Task for Liberals

I think more liberals should become rich executives, entrepreneurs, economists, and bankers. How about it guys? Infiltrate!

Penguins are Dying

Tragedy In Black and White
The north and south poles are affected by climate change first. Penguins and polar bears are among the species that will not be able to adjust quickly enough. And to some extent, yes, there is no human need for those animals. However, they represent what's to come for others including humans. Unfortunately, not all damage can be undone or at least will take time and a lot of effort.

Kind of depressing

Shanghai Students Are #1

There was an article today about Shanghai's participation in PISA (Program for International Student Assessment), outperforming all the best performing cities and countries. Even though I don't have anything to do with it, it still makes me feel proud as a Shanghainese person.

Some commenters point out that Shanghai students routinely score lower than their inland counterparts on the national examinations because the inland counterparts are more motivated. Shanghainese students already tend to be better off financially. It is also not true that students do not participate in any extracurriculars, as many students play instruments and sports. It's just that American students spend almost all their time on extracurriculars. I think people should also note that there has been a "brain drain" from China to Western nations for the past 30 years. This is why people claim that Chinese American students such as myself do better than American students (because our parents were the best and brightest already).

Interesting comment

Oh and speaking as someone who reads a lot of comments by Chinese Internet users on Chinese BBS, I think it's safe to say that if the situation is reversed, namely Shanghai trailing the U.S., the Chinese commenters would

1) Bash the Chinese education authorities to no end
2) Try to figure out what's wrong with Chinese education
2) Tell themselves that they should learn more from the U.S.

And that's it.

Seeing how a significant portion of the comments here at the Times have been directed at finding this or that fault with China (human rights), the Chinese culture (lack of critical thinking and authoritarian) and the Chinese people (book-learnin' automatons), you really can tell the difference.

And the thing is, even when Shanghai's students did outperform their American counterparts, the Chinese commenters (yes the news has already been published in China, too) are still

1) Bashing the Chinese education authorities to no end
2) Trying to figure out what's wrong with the Chinese education (they are fully aware of the creativity thing, too)
3) Asking themselves what can be learned from the U.S.

Just based on the comments, you can see who is leaving whom in the dust.

Microfinance in China

Google TechTalk by a representative from Wokai



Really interesting. I think I'll sign up.

Some People Were Trying

Today on NPR I heard about Brooksley Born, who was the chairperson of the Commodity Futures Trading Commission. She lobbied Congress, banks, and the the President to let the CFTC regulate derivatives. However, she was opposed by Robert Rubin, Alan Greenspan, and Larry Summers. What is really disturbing is that even though someone in a position of power knew what to do, she was blocked by people who had more power. It shows that economic policy decisions have to be backed by one of a select few.

Raghuram Rajan was the chief economist of the IMF when he also foresaw a collapse in the financial markets. He was also ridiculed and marginalized by Larry Summers and others.

This makes me more pessimistic about preventing economic crashes in the future.

Update on Bush Tax Cuts

The situation has gotten very frustrating. Democrats are about to agree to allow all tax cuts to be extended because Republicans refuse to extend unemployment benefits otherwise. Why are the Democrats always getting cornered? And then in the end, Democrats end up most angry at Obama.

Krugman Let's Not Make a Deal

Risk and Liquidity

Book by Princeton Professor Hyun Song Shin on the financial market

Maybe I'll check it out sometime.

Good Venue for Climate Change Agreements

How to Change the Global Energy Conversation

Latest Breakthrough Institute article in the Wall Street Journal

Common Complaints of Engineers

What Good is Wall Street?

Article in the New Yorker

Wall Street’s role in financing new businesses is a small portion of what it does. The market for initial public offerings (I.P.O.s) of stock by U.S. companies never fully recovered from the tech bust. During the third quarter of 2010, just thirty-three U.S. companies went public, and they raised a paltry five billion dollars.

In the first nine months of this year, sales and trading accounted for thirty-six per cent of Morgan Stanley’s revenues and a much higher proportion of profits. Traditional investment banking—the business of raising money for companies and advising them on deals—contributed less than fifteen per cent of the firm’s revenue.

Twenty-five years ago, the slice taken by financial firms was about a seventh of the whole. Last year, it was more than a quarter. (In 2006, at the peak of the boom, it was about a third.

At Harvard this spring, about a third of the seniors with secure jobs were heading to work in finance.

You Fix Budget

NYTimes interactive tool for exploring how to reduce the US deficit.

Information Flow

Sometimes more information can make us dumber.

Princeton Professor Michael Oppenheimer has done some interesting research on negative learning.

Uncertainties in scientific models such as the mechanisms of climate change can cause consensus to coalesce around wrong numerical results. This becomes a problem when policy decisions need to be made sooner than consensus can find the true value. There are a lot of reasons why this happens, but it's pretty new and interesting field of research.

(I just finished writing my essays for the Princeton STEP program.)

Richard Kauffman on Energy Reform

Richard Kauffman (Professor, Yale School of Management; Former CEO, Good Energies; Former Partner, Goldman Sachs) gave a speech at the Coalition for Green Capital's "Future of Energy Reform" conference last week

Richard Kauffman's Speech

The problem is that the money is one place and the incentives are in the other. In particular, we do not have a financial structure that is effective or efficient in promoting renewable energy production or energy efficiency adoption.

Financial structure seems to be a vague term, perhaps with different definitions in different fields. I plan on looking into this more soon.

It seems that many clean energy projects cannot get the funding even though there is funding available.

Projects are funded with bank debt, even though the projects are long-dated assets.

project equity. The money is there, but obstacles prevent from flowing to where it is needed. While there are billions of dollars in funds eager to invest in wind and solar projects, the yield requirements of these funds exceed the yields the projects can offer. Infrastructure funds typically target 15-20 returns while, as noted above, returns the projects can deliver are less, 9-12 percent. Hence, even though these are objectively attractive rates of return, projects that could be built, aren't being built because developers can't find equity at these lower levels.

Kauffman ends by talking about how the US has focused on trying to build green industry by funding innovation instead of deployment or creating demand. Interesting! since I just wrote my NSF proposal about the impact of policies on clean technology diffusion (deployment), precisely because of the importance of post-adoption innovation. Innovation from deployment does not just lower costs because of scale. It lowers costs because of improved reliability, improved performance, experience and availability of human capital, and improved logistics.

Moore's Law is not an independent law of physics but rests on the role of markets; without a vibrant market into which to sell integrated circuits, the shape of the performance curve would look very different.

YES!

Subsidy and Tax Equity for Renewables

Sunset for a solar subsidy

One way to promote the clean energy industry is to have tax credits. Solar installation companies do no make much profit so tax credits are sold as "tax equity." Most costs are upfront capital rather than maintenance costs or consumables. Therefor costs depend heavily on interest rates, although I don't know exactly the mechanism for that. I suppose it is because you have to borrow to buy early, and then interest rates will change how much you have to pay back. Financing clean tech and other environmental management projects might be close to my interests.

In a conference call with reporters, another solar executive, Edward Fenster, the co-founder and chief executive of SunRun, a company that finances and installs solar equipment, pointed to another way that the current downturn has handicapped solar.

NSF Research Proposal

I applied for NSF again. I am concerned about being disqualified because of my grades, but they actually didn't really mention that last year, and at least this time I have a much better research proposal.


Impact of policy on clean energy technology diffusion in US states

Keywords: environmental economics, public policy, climate change, technology policy

Introduction:

Global climate change is a pervasive and hugely consequential negative externality stemming from energy consumption that needs to be managed in order to ensure prosperity for generations to come. Substituting clean energy generation technology such as wind and solar for fossil fuels is a primary component of mitigating climate change. Dominant carbon emissions reduction policy tools are carbon emissions taxes, emissions trading systems, and renewable portfolio standards for clean energy. Technology diffusion is a particularly challenging stage of technological innovation in the energy industry. Understanding the effects of policy on clean energy technology diffusion in each state is central to fostering cooperation amongst states and developing effective policies for reducing US carbon emissions.

Fair Complaints or Whiny Liberals?

It grates on me when liberal commentators like Frank Rich complain about how the Obama administration is not being clear enough about the game plan. On the one hand, they are valid complaints, but on the other hand, they're supposed to be the journalists, so why don't they figure out the game plan, and then tell us about it. Instead, they are just stoking people's anger so that even people who should be supportive of the president's agenda are angry at him. Then, people are demoralized and discouraged instead of pitching in to build support. Frank Rich complains that Obama isn't explaining the tax cuts well to the American people, and he gives some suggestions, which is great. However, aren't there journalists and other people who could be explaining the tax cuts to the American people? There is only one Obama, and even though I also wish the communication and political maneuvering could have been much better, there's only so much one person can get around to doing. I am pretty certain that if we had 10 or 20 Obama's, things could be better, but there is only one. I think liberal commentators and activists need to get better at actually being helpful.

Externalities of Deep Ocean Drilling

It's not completely conclusive, but coral reefs seem to have died as a result of the oil spill. I'm not sure how you would price this, though, since it is not really known how much value living coral reefs are. This is why I think it would be difficult to price all the externalities of carbon emissions.

Environmental Economics : Pricing

The role of technology is really important in policymaking and regulations. Natural resources are not priced purely based on scarcity. The price is based on the cost of extracting that resource, and the rate that it can be extracted. Although the resource is always just being depleted, the price does not necessarily have to go up. It may take more “effort” to extract the resource as it gets depleted, but the effort is not necessarily translated to having a higher cost because of new technology. One example is the overfishing of tuna. Although tuna populations have dropped substantially, tuna prices have not gone up enough to decrease consumption substantially because of technology that makes it easy for fishermen to find and catch the athletic fish. Yes, it does require more effort to catch the tuna now compared to before, but it is not more expensive.

This effect is also present in the petroleum industry. Most environmentalists were hoping that as oil gets depleted and it becomes more and more technically difficult to extract, it will become so expensive that we'll have to move to clean technology. However, because there have been so many technological developments, we are not rate limited or production cost limited. Deep water oil rigs are serious engineering productions, but the amount of oil in the deep waters is considerable. Then instead of substituting oil with clean energy, we might keep using oil and even more frustratingly, continue to engineer cheaper ways to extract it instead of just giving it up and working entirely on clean energy instead.

The only thing that is really expensive with these rigs is the cost of a major mishap such as the Gulf Oil Spill. As it becomes more and more risky, the engineering may become more and more risky, which will ultimately make it more expensive. Even so, the cost to the environment is often greater than the monetary cost to humans. Nature cannot be paid off.

Krugman explains what is wrong with macroeconomics

How Did Economics Get It So Wrong?

Many economists have been putting out papers and rants about how to reform macroeconomics; Acemoglu, Stiglitz in FreeFall, and Caballero. I guess maybe I should email them or try to figure out how to be part of changing macroeconomics.

Kansas Hypocrisy We Like

Conservative Kansas conserves energy for a change. Prof John Sterman has been touting the successes of Kansas in his talks for a while now. The picture is kind of silly, though, since candles have more carbon emissions/lumen than any other light bulb.

In a way they are being hypocritical if they still don't want Climate regulation since they benefit from it. In some sense, they are being much less hypocritical, though, because they are being true conservatives.

Nonlinear Dynamics in Economics

Found a book of essays on nonlinear dynamics in economics, finance, and the social sciences. Looks like most of the authors are European.

Finding Internships in Public Policy

NASPAA site with links to internship search engines

Got it off the Harvard Kennedy School site.

Mountains 2

I finished a painting over the weekend. I am really excited about it because it's sooo much better than the first painting. I feel motivated to draw more often. Just think what could happen if I actually practiced.

Thoughts on Research and Career Directions

I'm starting to talk to other people about my research ideas so I can make them better, but I'm also trying to continually evaluate my career options. I am most drawn to macro, dynamic modeling, and theory, but I'm wondering if I should really be doing more applied economics since I'm ultimately interested in developing policy for the real world. Perhaps I should really be looking into public and labor economics more, and researching cross-impacts of environmental economics and labor economics through data-driven analysis.

At the same time, I'm not sure if I should be going into economics at all. I'm not sure that I have the right kind of instincts for analysis, and perhaps I should go into public policy after all. I should try to look at what kind of research is done in public policy or consider not doing research at all, and trying to figure out how to someone who helps implement policies. I think maybe I'm good at crisis management and figuring out what people need and getting them things.

Single Pipa

So I finally found out that the Buddha dance that I did in high school was a rearranged version of this Pipa song 阳春白雪, which means "sunlight on white snow." This whole time, I thought it was multiple instruments, but it was all just one. High labor productivity, only have to pay one musician.

Solar Panels for the White House

NYT

"The White House did the right thing, and for the right reasons: They listened to the Americans who asked for solar on their roof, and they listened to the scientists and engineers who told them this is the path to the future," said McKibben, the co-founder of the nonprofit 350.org. "If it has anything like the effect of the White House garden, it could be a trigger for a wave of solar installations across the country and around the world." Bill McKibbon

Monetary System and the Environment

Tullett Prebon is a one of the world's largest inter-dealer money brokers. I'm not exactly sure what that means, but the Director of Global Operations, Tim Morgan, put out a paper called Dangerous Exponentials. It is not an academic paper, and I'm interested in whether there is potential for research in this area.

We need to know the impact of the monetary system on the environment and resource use. The monetary system of most of the world depends on an ever-increasing money supply for stability and thus constant but non-zero interest. There may be some value in analyzing how much of production and consumption is simply to service debt and interest rather than actually improve welfare. In Beyond Growth, Daly argued that exponential growth of real economic output per capita is not physically possible. A recent report by Tim Morgan, Dangerous Exponentials, echoes this concern, and describes society and the economy as "energy constructs." He proposes a theory that the abundance of cheap energy has allowed the monetary system to grow. Now that energy return on energy invested (EROEI) has now begun to decrease, the exponentially increasing public and private debt will not be able to be serviced. While some might claim that technological improvements will be able to outrun the needs of the monetary system, I am not convinced.

An environmentally sustainable society is technically possible, although it may require behavioral changes as well as radical innovation. However, the endogenous growth function does not give any insight into whether or not there are effects or constraints posed by the banking system. The financial sector is usually thought to be completely irrelevant to reaching environmental goals. There should be some formal analysis to show that the American monetary and financial system can support an economy seeking to reduce material consumption. Alternatively, theory may show a certain baseline of growth in energy usage and material throughput is required for a stable financial system.

Many economists are concerned about the high level of debt in developed countries. The political problems of this large debt make it difficult to build support for the environmentalist agenda, but it is unclear if there are technical problems as well. Private and public debt has been steadily increasing for the past 30 years in many developed countries such as the US and the UK. There are some perfectly legitimate or at least predictable reasons for the high level of debt that the US government currently has. We are still funding a war in Afghanistan and we just had an economic crash. The American public has been encouraged to consume and keep economic growth robust, although now it has become clear that we have been spending beyond our means. Furthermore, much of the US debt is held by China. The trade deficit with China and other Asian countries can be analyzed with an endogenous growth function with trade dynamics, but there may be unexpected behaviors that arise from the particulars of the US and Chinese monetary systems. It would be important to know how these behaviors interplay with reducing environmental impacts.

The Case for Environmental Economics Theory

This is actually the introduction to a long research paper I wrote about what I thought were important areas of research. A shorter version of the research paper is here.



It is clear that we have environmental problems, and they need to be addressed in the context of improving the economic well-being of Americans. Two mechanisms have been identified, which are to provide green jobs and build green industry. One is aimed at addressing economic concerns of the labor class, and the other is to address the concerns of businesses and investors. Even so, it is unclear how to incorporate the environmental agenda with the rest of economic and social policy. For example, the bank bailouts, healthcare reform, and financial regulatory legislation had no framework for determining whether or not they were in line with the environmental agenda. As a result, the environmental agenda has been marginalized even though it is indisputably important to the economic well-being of Americans in the long run.

To build a stronger case for comprehensive policymaking and put environmental policy on the map permanently, we need to develop a strong theoretical foundation. We should build upon the endogenous growth function to examine the dynamics of labor, material resource use, technology development, and the money supply. This foundation needs to be able to answer three key questions. The first is how do we create jobs by rebuilding the manufacturing sector while reducing emissions? The second is how can we make green businesses more profitable while creating enough well-paying jobs to keep unemployment low? The third is how do we foster a stable while robust monetary system and financial industry while reducing emissions and material throughput? These answers are not just needed in the United States. While others such as China and Europe may have made more headway in clean technology than the US has so far, they will soon need more direction to complete the transition to environmentally sustainable economies.

UN Climate Talks in China

There are UN talks in Tianjin, China right now, a meeting of the UN Framework Convention on Climate Change.
Bloomberg

Among the sticking points are a demand by countries for Chinese commitments to more aggressive emissions cuts as well as for China to accept more stringent verification of its climate change mitigation, said Xie Zhenhua, vice chairman of the National Reform Development Commission of China, the country’s top economic planner.

Some countries tried to tie those conditions to financial assistance to the least developed countries, he told reporters through a translator today.

Developed nations have pledged $30 billion in short-term financing from 2010 to 2012, $2 billion of which still needs to be sourced, Figueres said. The outline of a longer-term climate fund could also be agreed upon in Cancun, she said.

The negotiations around targets for rapidly developing nations like China and for financial transfers are relevant to my research for the Climate Collaboratorium. I have been working on making it possible to see simulations of economic impacts of climate mitigations for different regions.

RFID Sensors in Florida

I just got caught up with a former coworker from Tagsense, who is now working at Locus Traxx, which is a small engineering firm in Florida. They are using some Tagsense products in some of their products to make sensors and energy harvesters. They are using piezo energy harvesters but also looking into this new kind for wind power. They were also making some sensors to sense the oil in the ocean from the BP oil spill. I wonder if fish will just eat those things, though. I may be able to do an internship there for the spring, which would be really cool.

Feature Economist

Modern macroeconomic theory, known as New Keynsian macroeconomics is built on "microfoundations," which was founded by Robert Lucas, an economics professor at the University of Chicago.

He believed that economics was the true driver of history, and so he planned to fully immerse himself in economics and then migrate back to the history department

I also think that economics is the true driver of history.

Maybe microfoundations could be used in developing environmental economics as well.

doctors learning to cook

thank goodness

Kaiser Permanente, which is a provider and an insurer, is the largest nonprofit health care system in the country, with about 8 million members, 15,000 doctors and 170,000 employees, predominantly in western states. The sheer scale of Kaiser, which holds farmers’ markets at 30 sites, makes changing the way food is bought a challenge, but also an opportunity.

“We can leverage our size to create greater demand for healthy food,” Dr. Maring said. Kaiser Permanente Oakland, for example, serves 6,000 inpatient meals a day, 80 percent of which have no special restrictions.

“It’s difficult for farmers to crack the institutional supply chain,” he said. “We need a ‘universal adapter’ that can pair small producers with big customers.” Toward that end, he helped start a regional growers’ cooperative and joined the board of the nonprofit entity that administers it, the Community Alliance With Family Farmers.

Dr. Maring also envisions Kaiser’s role expanding into areas like environmental stewardship, and he has carved out a kind of subspecialty in institutional real estate, with the goal of eventually putting some of Kaiser’s undeveloped land into agriculture.

Resources on Macroeconomics

Macroeconomic Teaching Notes from Brad Delong at UC Berkeley

Major Economic Journals

I've been reading more economics papers so that I can have a better idea of what I want to do research in and to be able to write a good research proposal for NSF and graduate school applications.

Major economics journals are
American Economic Review
Journal of Economic Growth
Econometrica

So far, I'm looking at applying to these economics departments:
MIT
Harvard
BU
Berkeley
Columbia
NYU
Yale
Brown
U Maryland

I'm also applying to
MIT Operations Research
MIT Technology and Public Policy
Harvard Kennedy School PhD in Public Policy
Columbia Sustainable Development PhD
Berkeley Energy and Resources Group PhD

Back to School

I'm taking a couple of economics classes at MIT this semester, and today was the first day of class. I'm taking 14.04 (Intermediate Microeconomic Theory) and 14.32 (Econometrics). The idea is to make my chances better for getting in to a phd program in economics, and I should also be able to be qualified to work as a research assistant after taking these classes.

Pics of New Room

Moved back to Somerville!

I'm just over the Cambridge/Somerville border between Union, Porter, Harvard, and Inman Squares. Seems like the place to be! I will post pics soon.

Effect of Climate Change on Economies

Here is some interesting research done at Columbia U on how increased temperature may cause reduced economic output because of changes in human behavior and reduced productivity. I think I had first-hand experience since I had to move last week when it was in the mid-90's.

Marginal Tax - Keep Greed in Check

Interesting analysis from the LAtimes on Disincentivizing Greed

To a surprising degree, economic misfortune has correlated with low top marginal tax rates. The top marginal tax rate at the time of the 1929 crash was 24%. After his election, Roosevelt promptly raised it to 63% and then to 94%, and one could easily make the case that it was this rise, rather than financial regulation, that played the primary — though certainly not the only — role in curbing abuses by attacking greed at its source, without, by the way, damaging the economy. Roosevelt essentially taxed away big money.

Clean Energy in Portugal

Really interesting article about clean energy projects in Portugal, the challenges, and issues specific to Portugal.

To force Portugal’s energy transition, Mr. Sócrates’s government restructured and privatized former state energy utilities to create a grid better suited to renewable power sources. To lure private companies into Portugal’s new market, the government gave them contracts locking in a stable price for 15 years — a subsidy that varied by technology and was initially high but decreased with each new contract round...

Portugal was well poised to be a guinea pig because it has large untapped resources of wind and river power, the two most cost-effective renewable sources. Government officials say the energy transformation required no increase in taxes or public debt, precisely because the new sources of electricity, which require no fuel and produce no emissions, replaced electricity previously produced by buying and burning imported natural gas, coal and oil...

But a decade ago in Portugal, as in many places in the United States today, power companies owned not only power generating plants, but also transmission lines. Those companies have little incentive to welcome new sources of renewable energy, which compete with their investment in fossil fuels. So in 2000, Portugal’s first step was to separate making electricity from transporting it, through a mandatory purchase by the government of all transmission lines for electricity and gas at what were deemed fair market prices.

In the Line of Fire : Unemployment Benefits

Some good analysis on unemployment from the WSJ. They use a graphic and some analysis about who was laid off during this recession from Professor Autor! The article is about how even though unemployment is very high, companies are having trouble hiring for a variety of reasons. Many people are less able to move during this recession because it was a housing bubble, and people either don't want to or are unable to take a loss selling their house. Some people are choosing to stay on unemployment benefits rather than take a low paying job. The deteriorating education system also seems to have caused the quality of the labor force to be lower, which makes it difficult for companies looking for people with specialized skill, especially since many companies are either unable or unwilling to pay very much. During the recession, it is mainly middle skilled workers who are laid off, who don't necessarily have the skills that companies are currently looking for.

While an obvious solutions seems to be to stop unemployment benefits, it may be a short-sighted thing to do. Stiglitz encouraged extending unemployment benefits because stopping or even reducing them would make reduce consumer spending and increase foreclosures, so even if those people got lower paying jobs, there may not be a net aggregate benefit to the economy. It may arguably help reduce government expenditures, but it may also make things worse by reducing state and local revenues.

Another obvious need is to improve the skill level of the labor force by investing in education. However, this is expensive, and I think part of the problem is also that companies also used to pay more for their workers to go to training classes, but now that financial burden needs to be borne by either the workers or government training programs. Perhaps a more efficient use of the unemployment benefits should be in the form of money for taking classes.

Stiglitz also makes a good argument that since the recession was caused by a bubble in the financial and housing markets, there is no reason that people in other sectors should be taking the hit for it, especially since real wages for the middle class have been stagnant. Income disparity has been growing the United States, implying that some have gotten rich at others' expense. The fact that the financial industry has pretty much recovered since the crash means that those who benefited are likely to keep their gains and will likely gain further since others are being pressured to take lower paying jobs.

Japanese Garden near Boston

Showa seems really nice.

Repeal Bush Tax Cuts

Greenspan has come out in support of repealing the Bush tax cuts. Then again, should he still have an credibility left since he was wrong about the 2008 crash? Oh well, maybe he's seen the error in his ways.

In the meantime, the new Republican star Paul Ryanhas a Roadmap for America that Krugman exposes as "flimflam." Maybe people need to use more charts and visuals when discussing things like the budget and tax policy because numbers that don't add up should be easily exposed and thrown out.

Background Info

I'm finally reading parts of the Stern Review, a report on the economics of climate change.

Bloom Energy

I saw this in a magazine. It's a new technology for tiny power plants turning oxygen into electricity and water. Do we really have enough oxygen? I suppose it depends if the demand would grow exponentially or not.

Climate Legislation Abandoned

Tom Friedman says we're going to regret it.

I could blame Republicans for the fact that not one G.O.P. senator indicated a willingness to vote for a bill that would put the slightest price on carbon. I could blame the Democratic senators who were also waffling. I could blame President Obama for his disappearing act on energy and spending more time reading the polls than changing the polls. I could blame the Chamber of Commerce and the fossil-fuel lobby for spending bags of money to subvert this bill. But the truth is, the public, confused and stressed by the last two years, never got mobilized to press for this legislation. We will regret it.

I appreciate that he blames the public.

Expire Those Tax Cuts!

See, Tim Geithner agrees

The top 2% of households make more than $250k. I wonder what top 2% of individual incomes make.

When top earners pay less taxes, everyone else has to pay way more in order to balance the budget. Plus, when income accumulates when the top earners don't reinvest or donate a substantial proportion of their wealth, then there is less to go around for everyone else, and they are not stimulating the economy. Paying taxes is forcing (or "automating") reinvestment of income. Lower earners do not need to feel sorry for higher earners who may have to pay more taxes. Higher earners are looking out for themselves. Lower earners should learn from them.

Economics Opportunities

It looks like the NEBR (National Bureau of Economic Research) does a lot of interesting work, and it seems to have a strong MIT affiliation. I applied for a job as an economic research assistant for MIT professor David Autor, who is a labor economist and will be the Associate Department Head of the MIT Economics Department in the fall. He studies the income distributions and skills of workers, amongst other things, and he gave me some career advice.

He advised me to apply to more interdisciplinary public policy graduate programs rather than straight economics programs if I were to apply this year. He strongly recommended working in a developing country on an experimental program through the Poverty Action Lab for a year before applying to economics PhD programs. Now I have a lot of leads to follow, and it's really exciting.

Misplaced Blame

The Gulf Oil Spill threatens the way of life of Gulf residents and marine life. Besides clean-up and capping the flow, investigating the cause of the spill in order to prevent future spills is an important task. A government panel is having hearings to investigate, and this past week they found that an alarm was "inhibited".

At hearings this week here, crew members have described repeated failures in the weeks before the disaster, including power losses, computer crashes and leaking emergency equipment...

Mr. Williams, who filed a lawsuit against Transocean in federal court in New Orleans on April 29, added several new details about the equipment on the rig, testifying that another Transocean official had turned a critical system for removing dangerous gas from the drilling shack to “bypass mode.”

When Mr. Williams questioned that decision, he said he was reprimanded...

Mr. Williams recalled that Mr. Hay added, “The entire fleet runs them in ‘bypass.’ ”

The Obama Administration has issued a drilling moratorium so that risks are minimized until investigations are completed that would either be able to confirm the safety of drilling operations or come up with new safety standards. The administration has also issued commercial fishing and shrimping bans. Governor of Louisiana Bobby Jindal has already lifted the recreational fishing ban and has been urging the federal government to lift the commercial fishing ban.

Some of the Gulf residents have been understanding of the bans, but many have become angry at the government for the bans and even for the spill itself. This is frustrating to me because as voters and taxpayers, people should take some responsibility of these problems rather simply directing their anger at the government. If they really wanted the government to determine the safety of the seafood faster, then they'd have to support giving more resources and funding to the FDA. Plus, at this stage, it may well be that the seafood is not safe, in which case there is not much the federal government can do.

Gulf residents insist that their livelihoods depend on oil and seafood and tourism, but if they knew they were so dependent on the well-being of the Gulf and the cleanliness of the beaches, then they should have paid more attention to the oil industry and the drilling operations. The local government and thus the local people need to be the first line of defense from local disasters. Instead, they want the economic benefits of the drilling while leaving the burden of regulating and cleaning up to the federal government. In fact, in order to attract businesses and economic benefits, local government tend to lobby the federal government to reduce regulations so that the cost of business is cheaper. Meanwhile, the tax revenues from people from other states pay for cleanup and what little regulation there is left.

People are upset that the regulators at the MMS "didn't do their jobs," but then they should have been more supportive of their jobs prior to the spill. Even now, many conservatives say there is too much government regulation. Everyone thinks someone else should take the blame and absorb the cost for the spill, but perhaps everyone has forgotten that this is a participatory democracy, and that you not only get the government that you deserve, but also the corporations and resulting disasters.

Inception

Last week we watched Inception, the new Christopher Nolan movie, and it was very good. In some ways it's similar to Avatar and other Matrix-like movies in that there is an alternate "virtual" world. In this case it is the dream world. It may start a new trend for movies just as the Matrix did when it first came out. Since Joseph Gordon-Levitt was in it, I've been watching 3rd Rock From the Sun this past week. I forgot about that show, and I realized that I didn't even understand the full premise of the show, particularly the fact that Sally was supposed to be the military officer of the bunch. The people who made it also made Wayne's World. Wow!

Gulf Well Capped Flow Stopped

The latest on the spill.

The flow from the well has stopped completely for now.

Income Distribution

I was curious about the individual income distribution in the US for people over 15 in 2008, and so I looked up some data from the US census bureau for individual income. It doesn't give additional breakdowns for people making over $100k so I did some extrapolations. This is mainly a thought exercise for what you think the income distribution is compared to what you expected it to be compared to what you might think is fair.

In these graphs, I extrapolated the distribution for people making over $100k. In this first graph, the distribution is if the total amounts of money made by the number of people making a certain income in $2500 increments were all equal. That is, 100k*ppl_making_100k = 102.5k*ppl_making_102.5k, and the shape of the distribution is 1/x. As you can see, the maximum amount of income people are making is around $460k.



That is not realistic because I know for a fact that there are many people making millions, but I don't know what is the maximum million of dollars people make in a year. This is the graph that is the same as above but with a few people added at $1 million and $11 million.




In contrast, this is usually the kind of graphic that is used when portraying income distribution. It is for the bottom 98% of households from www.visualizingeconomics.com.

Finance Reform Passes

Today Congress passed the Finance Reform Bill. Honestly, though, I don't know too much of the details in the bill, but I am generally supportive.

The Dodd-Frank bill -- named after Dodd and Rep. Barney Frank (D-Mass.), who ushered it through the House -- passed by a vote of 60 to 39. Three Republican senators -- Scott Brown of Massachusetts and Olympia J. Snowe and Susan Collins of Maine -- joined 57 members of the Democratic caucus in support. Sen. Russell Feingold of Wisconsin was the lone Democratic opponent, saying the measure didn't go far enough.

BP History

Catalog of BP's safety problems and risk taking corporate culture.

Volker Admendment in the Financial Reform Bill

Article on Volker and his Rule. Volker was the Fed Chairman under Carter and Reagan before Greenspan. He was ousted by Reagan partly because he wouldn't go along with the deregulation agenda. He now regrets not speaking out more against the deregulation but notes that it's very difficult to be against deregulation while things seem to be going so well, although now we know it was a bubble. Such is the positive feedback nature of bubbles.

Words of Wisdom

I just finished Stiglitz's book Freefall today. It excites me because he mentions many things I have been thinking about like contradictions and questions. In the concluding chapter he talks about how the economic system reflects and maybe even defines our moral values, and how we should think about what kind of moral values we want and to take a more active role in designing the system so that it reflects those values.

I really like this line.

There was individualism but no individual responsibility.

Society cannot function well if people do not take responsibility for the consequences of their actions. "I was just doing my job" cannot be a defense."

If people are serious about wanting less regulation then they need to take more personal responsibility rather than taking refuge in the fact that their actions are technically legal and thus must be "good".

Higher Standards

Scrutiny of China's factories after FoxConn suicides

One Labtop Per Child Left Behind

There have been some studies done showing that having a computer (at least temporarily) widens the achievement gap for low-income middle school students.

I have some solutions, though. My theory is that the reason why the nerds got so much out of having computers up until now is because computers used to be way harder to use (Linux and MS-DOS) and Windows had all these bugs and would crash all the time (blue screen of death!). Maybe the kids should be given Linux boxes or just a computer with no GUI. Alternatively, they could just give them broken computers so they'd have to fix them in order to use them. But then that would just a one-time lesson, after which they would just slack off. Another option is to write and infect the computers with an education virus, which makes you solve problems or answer questions in order to gain access to things like the internet, games, or checking email.

Stiglitz and Deming on Perverse Incentives

In Freefall, Stiglitz argues that the crash of the financial system was caused by a "systemic" problem, which means something more specific than a likely or common problem. It means the structure of the system has a tendency to do things (like fail) other than its original function such as providing banking services. Stiglitz elaborates that the business models of the banks and other financial institutions had incentives that caused actors in the system to increase the likelihood that it would fail in this way.

One major problem was that many executives had an incentive to maximize the stock prices because they get paid in stock options. Also, bonus pay depends on the income generated, and in the financial sector, income is generated most easily with fees. However, when the company has losses, executives get paid "retention bonuses," which should actually mitigate the incentive to ruthlessly maximize the share prices. Stiglitz wants to discredit the argument that bonuses give incentives to executives to work harder, but also argues that, to the extent that they work harder, the executives work harder only to maximize the stock price and the profits. Deming claims that any measure of performance will always have this problem since people will always find ways to fudge the numbers in their favor. He strongly cautions against using quantitative metrics to measure performance because maximizing one number (short-term profit) may end up minimizing another number (long-term profit) somewhere else in the system. Another way it comes up that I have experienced at my company is that saving time for one group may end up taking up more of another group's time so there is a need to think of the whole system when setting the agenda for everybody.

Stiglitz then goes on to describe the problems with corporate governance, where management typically appoints most of the board, and the board sets the executive pay.

Green Food

Lynn wrote an article on Food Security and the Green Revolution in response to Attention Whole Foods Shoppers by Robert Paarlberg

Bonobo

I really like this song by Bonobo. Actually it's just the Prelude for the CD, which is more electronica. Sounds Asian. I wonder if the melody is from some other song.

Organizational Economy

In Freefall, Stiglitz mentions the research of Herbert Simon arguing that there is no reason for profit enterprises should be any more efficient than non-profit or government organizations given neo-classical assumptions. This is because most people are employees no matter what the organization is, and so there is no difference in motivation. Furthermore, in public companies, the owners are the shareholders, who are very removed from management.

Quarter Century

Now I am 25, and it seems like some kind of milestone, but I can't think of any good reason why 25 years is a milestone. There's nothing really symbolic that happens every 25 years. Maybe there's a 25 year flower or something. At any rate, it's definitely moving on from being in my early 20's.

Wet Wipe Foresight

the other day i went to dinner at an ethiopian place, and everyone was like, oh no my hands are all messy now, and i'm like 'oh but i have a wet wipe that i saved from some other place a long as time ago,' but then it was completely dry. the end.

No Good Workers

NYT article about how manufacturing companies seeking to expand in the US are having a a hard time finding qualified workers. It really highlights the problem with the public education system and also how difficult it is to "create jobs." The fact is that there are jobs but not enough people with basic skills as well as specialized skills. My company is also having trouble hiring manufacturing people, especially people with soldering skills. Besides soldering, workers need to have enough aptitude to learn how to use the computer program. That kind of aptitude is not something that can be remedied with a training program, but instead needs to be addressed in grade school. The article said that the labor shortage is because many manufacturers have replaced assembly lines with more automated systems so they need more skilled workers to operate computerized machinery. Similarly, the promise of "green jobs" has not materialized. When I interviewed at Synapse, I mentioned my concern about the logistics of transitioning the labor force to green jobs. It seems to me that it's hard to build public support for green projects at the expense of other businesses like coal unless the green jobs made available are explicitly for the people who will be put out of work.

China in Africa

The latest on the China-Africa relationship. The article talks about the "trade not aid" approach to Africa that China has been pioneering. "Beijing doesn't do gifts; it does deals." The IMF doesn't like that the countries it's making loans to has another source of funding, though, and some argue that African nations are selling out their resources for cheap. There is a danger to having a colonizer-colony relationship, and there is already resentment of the Chinese from the local population. It will be critical to make sure Chinese companies are dealing with African countries fairly, for a fair price, and for there to be enough benefits to the local populations. In other words, after infrastructure is completed, the local population should be able to be technically proficient enough to maintain and use it and also be in charge of the management.

Jon Stewart on Energy Independent Future

On the Daily Show last week, Jon Stewart did a cool video essay on presidents who promised to move away from foreign oil and invest in alternative energy.

Shackleton

Some music I liked on Bats in the Belfry, a radio show on WMBR, MIT's radio station

China Appreciating Yen

I appreciate the Yen.

NYT article that China recently announced they're letting the RMB float, but that appreciation will be gradual.

Chinese Demands

Interesting article about the labor market in China.

Environmental Economics' Implications for Monetary Policy

Lately I've been trying to figure out exactly where money comes from and who really adds to the money supply. It seems that very few people really know the answer to this, and even now I think I still do not know the full answer. As far as I can tell, there is some initial supply of money, and then additional money is simply created when people take loans. There still seems to be a conservation law missing, though, since more loans are needed to pay interest on those loans unless the Central Bank really just adds to the money supply when paying interest when it borrows from private banks.

Smark and I watched a documentary called Money as Debt by Paul Grignon. The descriptions of how money is created and exchanged seem accurate although the ultimate message ends up sounding kind of paranoid. Even so, some of the suggestions for alternatives sound reasonable.



Maybe one thing that needs much more focus on is creating a monetary policy and banking system that is financially sustainable, but also environmentally sustainable.

Art Project Social Context

I think I have a good concept for an art project now that would allow me to draw lots of people, which I like to do, and also spaces (like architectural stuff) which is something I also really like to do.

I want to explore how people look silly or really good depending on the people around them and their surroundings. So it would be cool to make the same person look really good or really stupid with different backgrounds and people around them. I think it would be a good thought exercise for people, and it would show what I think about material wealth and pride.

Spiritual

People don't really need the fear of God. They need the fear of other people.

Sustainable vs Conventional Agriculture

Lynn said she wants to write an article disproving this article about why sustainable agriculture is no good.

Green Products

Sounds like sustainable product design is starting to make headway.

How to do the Asian Squat

In other breaking international news:

The Asian Squat

Thinking About Thinking

I finally feel like I have a better understanding of my thought process, its benefits and weaknesses. When I solve problems, it's more visual and spatial. I visualize all the components of a problem and then it's like I try to ram them all together in my brain. If they all fit, then it's like there's a click, and if it doesn't then I try other configurations or focus on in on a particular part. It sort of feels like there are really gears turning in my head, and I get an answer when they're done turning. I think a strength is that since I am thinking about the whole problem at once, sometimes it's faster because I can find the root systemic problem faster. A weakness is that if the problem is big and complex, I can't figure out where to start. Then I wait while it stews sometimes over days or even months as my brain lets parts of the problem settle into different configurations eventually finding something that works. Thus, I'm almost guaranteed to come up with an answer but it might take a really really long time since it's not a very conscious process and it's very touchy feely. In order to speed up this process I have to make an effort to be more methodical either by using other kinds of thought processes to pick where to start or just trying to be more consciously aware of my thought process to reduce redundant thoughts. Reducing redundant thoughts by writing things down or drawing diagrams has been somewhat effective, but learning to use other more linear and methodical thought processes has been more difficult since I rely more on memorizing the steps.

Big weakness of this process, though, is that it's not really connected to the verbal part of my brain or the social interaction part of my brain so I can't explain with words what I'm thinking while I'm thinking, and I can barely even communicate at all while I'm thinking. After I have come up with answers, I then have to go back and think about how to explain the answers in a totally separate process. It's been getting better, but being able to communicate by thoughts and my ideas is definitely something I'm still working on.

Expect More Inequality But Less Poverty?

Not very many Americans seem to be bothered by the growing inequality of wealth in the United States. This is partly because logically there doesn't seem to be a reason why some people might not have been more productive or more creative than others. It would not seem to be fair to set a maximum limit on how much a person can make, and it's hard to see why there would be any physical limit.

At the same time, if this idea is extended globally, then that implies that Americans and the developed world might always be more wealthy than developing nations. But one of the arguments for globalization is that developing nations will develop and the standard of living will improve for everyone even if GDP per capita continues to be higher in developed nations. The mental image of a nation like China once it has developed, though, is that the citizens' standard of living will eventually equal the standard of living of Americans. Is there a contradiction? People usually think of South Korea or Japan as developing nations that successfully became developed nations. Some food for thought.

Oil Spill Update

The latest attempt by BP to stop the leaking called "top kill" officially failed over the weekend. Now they are going to try to contain the spill by cutting the riser, which is the broken pipe, which would temporarily increase the flow, and then fit a new pipe to the surface. Meanwhile, relief wells will be drilled, which could stop the spill by August. I'm skeptical of all these efforts, of course, since they're all being performed by the same people that caused the original spill, and all the information about these maneuvers are likewise controlled by those companies. Meanwhile, the government and independent scientists attempt to figure out what the facts are.

From the BP May 29 press release

Despite successfully pumping a total of over 30,000 barrels of heavy mud, in three attempts at rates of up to 80 barrels a minute, and deploying a wide range of different bridging materials, the operation did not overcome the flow from the well.

The Government, together with BP, have therefore decided to move to the next step in the subsea operations, the deployment of the Lower Marine Riser Package (LMRP) Cap Containment System.

BP also has recently come out in denying the existence of underwater plumes of oil/dispersant. BP clashes with scientists over deep sea oil pollution. Hopefully scientists can manage their public relations better this time and finally gain more credibility than BP.

Today I was just saying how it's hard to really feel empathetic with Louisianans over this spill when many of them still support the oil industry and ridiculed those who warned of inevitable environmental destruction. Ironically, right after I said that a Louisianan congresswoman came on the radio and talked about how she and her constituents are against the 6 month off-shore drilling moratorium imposed by Obama.

Nature in the Neighborhood

There is a hawk's nest near Alewife station in Cambridge on an office building next to the Fresh Pond Mall. A lot of onlookers have been hanging out everyday with their binoculars and telescopes just watching their day-to-day activities. The two parents are "Buzz" and "Ruby." They have three chicks and they're almost ready to fly for the first time. I've stopped by a couple of times, and it's really fun.

Ernie Sarro has been out there a lot and he has posted some videos on the his CCTV blog.

Letters to the Editor

Some interesting comments published in the NYT. Some of the people are in the oil industry.

Gigi

yesterday I was watching TV, and I watched Good Night and Good Luck again, and also this old musical Gigi.



Gigi was about a French girl being trained by her grandma and great aunt to be a courtesan. It was a look into early 1900s French society, which was interesting because I don't know anything about it. I had no idea being a courtesan or mistress was such a profession. It's more like being a professional girlfriend.

Both of these movies had some moral contradictions. On the one hand, Gigi and her family of courtesans are wholesome, but on the other hand, she is being trained to be a girlfriend and sell her body. Gaston is a gentleman, but also kind of a sexual predator in another lens. Then again, I guess all women are trained to be girlfriends and then wives, and nowadays people divorce when they tire of each other, which is like changing mistresses.

In Good Night and Good Luck, it's not really that ambiguous since McCarthy's methods were really ridiculous. At the same time, I think it turned out that perhaps some of the people on his list, perhaps maybe even a majority, did have some ties to Communism, although that doesn't mean they were a security threat. In the case of Annie Lee Moss, there is evidence that actually she probably did join the Communist Party briefly inadvertently, although it's unlikely she did anything to help. At any rate, it was a very interesting episode of public opinion vs. news media vs. politicians vs. corporate interests.

Finance Reform Bill Passes in Senate

59-39 vote in Senate for the Finance Reform Bill.

Raise Fuel Standards

Obama Mandates Raising Fuel Efficiency Standards for Cars

Apartment to myself

My roommate has gone to Asia for a couple of months and so I have the apartment to myself in the meantime. It's really nice to have my own space and to have more time being alone. I haven't had this much personal space since high school, and it's really nice. I feel very comfortable and there's a feeling like cheerful nostalgia and deja vu.

It's not really about having more privacy, since at that time I lived with my parents, who tried to keep tabs on me all the time. Plus, Chinese parents don't tend to have much respect for privacy of their children, probably because they grew up and always lived in much more crowded spaces. Even so, I lived more "inside my head" then because I wasn't always around friends or other people I need to interact with socially and blab my thoughts. I also don't have any siblings so I just spend nights, weekends, and summers mostly by myself. So I guess the big difference from now is that I spent a lot less time socially interacting with peers.

Since going to college, I've made many adjustments. I really like interacting with people and I'm a very social and political person. However, it has been hard for me to learn to think while other people are around. I've gotten a lot better but it's still hard for me to think while interacting with people socially. Usually, I kept those two tasks very separate. If I didn't understand something, I could always spend time figuring it out alone in my room rather than working it out in front of everyone.

Hanging out with myself, I never have to wonder if I am in anyone's way or what some other person's plans are. I think I do get lost in my head and my actions are somewhat more automated. It's almost like I just do whatever my body wants, more literally whatever I "feel" like, rather than having to think deliberately about anything. In some senses, it leads to a more selfish and self-centered way of thinking. I mean, you just spend all the time thinking about what you want, how you feel, etc. Then again, that's what being an American adolescent is all about for some reason. At any rate, it is a mode of existence I've forgotten about, but it's definitely nice. And maybe I'll think better and get more done. :)

Deep Sea Oil

The latest on the spill from the NYT

Giant Plumes of Oil Forming Under the Gulf

Democracy in the Information Age

Democracy, especially the kind we have in the US, requires an informed voter base. Otherwise, corporate interests end up making all the policy decisions. While it's good to foster a healthy private sector, no matter how you look at it, the bottom line for a corporation is not always aligned with the goals of a government, which I think are to make lives better for all citizens.

It seems like today's technology like the internet should enable voters to make much better informed decisions. However, most people don't have the time to really go through all the information, and people tend to cherry-pick the information that is aligned with what they already believe. In recent years the news has become increasingly partisan such that there is no news source which reaches everyone. I think now it's becoming clear that decision-making is more about belief than really making informed decisions, especially because of the complexity of issues today.

Liberals such as Paul Krugman, Thomas Friedman, and Frank Rich are frustrated at the rise of anti-government and anti-regulation conservatism in the aftermath of a financial meltdown and oil spill. He writes about how the extreme right has gained legitimacy in his latest op-ed. In other recent op-eds, he's been talking about the anti-regulatory mood of the public. Sex, Drugs, and the Spill and Berating the Raters.

At the same time, all of them realize that people are right to be upset about things. It makes sense that people are upset about the bank bailouts and the subsequent bonuses. All in all, the white collar workers have hardly been affected in this crisis. People are right to be upset about the price of health care, and it makes sense that they're concerned about the extra paperwork and possible inefficiencies from a government mandate for everyone to have health care. People have a feeling that corporate interests are colluding with the government. However, they are not right about what policies they think should be adopted.

I wonder if a better way to run the government is for people to vote on what problems they would like solved rather than on policies. I'm not sure how different it would be from how things are done now. I suppose people mostly vote for politicians they think will be able to solve their problems. Politicians have platforms where they talk about what they think are the biggest problems and their plans. I would hope that if we were more focused on identifying the problems and then giving a mandate to more knowledgeable and qualified people to solve them, that we'd have better policies, but actually, what we might end up with is just more of the same where corporate interests dictate policy.

My main concern is whether people are really be able to vote on policy because while we live in an information age, our lifestyles and jobs are pretty specialized at this point. While people had their specialized professions when the US was founded, at least they still had to do many things for themselves since they could just not hire services or buy things off the shelf the way we do today. Within one company, people in the marketing department don't know anything about engineering and vice versa. Those in the car manufacturing industry don't know anything about the energy industry or construction or agriculture or the health care industry, and the financial sector is a big mystery to everyone, of course. The system we have now is interest and advocacy driven so your piece of the pie is only as big as you can fight for. How can people really make informed policy decisions for the long term well-being of a nation as a whole?

Rent

So, apparently I am really absent-minded or just brain dead, and this whole time I've been paying $650/month for rent when my place is actually $625... doh!

Well, I'll get a discount next month! Whooo!

ADHD Linked to use of pesticides

A study that points to a possible link

It is not proven yet, but organophosphate pesticides seem to cause neurological damage in children, which is more obvious in developing countries where more children are exposed to pesticide use due to living in farming communities.

Lynn Posts on Gulf Spill

Lynn wrote a blog post on the gulf oil spill at the Green Blog.

Gulf Oil Spills Onto Political Shores

Yes, the House Republican Conference has assembled an “Energy Rapid Response Team” ready to convince you that more offshore drilling is necessary, for great fear of rising costs of importing oil and fueling at the pump.

Value of System Dynamics

I've found that a lot of people are skeptical towards system dynamics as a method. I also have a hard time explaining what it is, especially in comparison with other modeling methods such as conventional economic modeling because I don't really know much about other modeling methods.

One common criticism is that it is too subjective because system dynamics models can accommodate subjective variables such as level of material well-being or crowding. While system dynamics can be used to model completely physical systems where we already have a pretty good understanding of the dynamics, such as a pendulum, it is more often used for modeling social systems such as the organization of a business or the urban population.

It seems that many other systems models for engineering and economics are geared towards having inputs and getting outputs. For example, how many kW should each generator on the grid be supplying, how much profit does the company expect this quarter, what percent of the profit should be spent on R&D, etc. The power of system dynamics, in contrast, is not in the accuracy of getting numerical answers, but rather in gaining understanding of the dynamics of a complicated system. A system dynamics model can help users find out the causality of different outcomes, what actions have the most leverage, and what behaviors are just symptoms. I still feel there is a lot of potential for system dynamics, but I am trying to maintain a critical attitude to better understand its limits and differences from conventional models.

China Climate Change Policy: Deliberate and Wily

I went to that China Climate Change Policy talk at MIT on Friday. My Chinese isn't good enough to understand everything, but anyway the slides were in English. The presentation was an overview of the current situation of emissions and an overview of the various climate change talks that have happened like Kyoto and Copenhagen. It was fun to hear directly from the Chinese point of view even though I already know it.

Basically, much of China's energy use is in the industrial sector because half of the world's production of things like steel, aluminum, and flat glass is in China. So industrial energy use accounts for something like 70% instead of 30-40% of energy use in the US. Transportation in China accounts for 10% instead of 30% in the US. Most of electricity in China is from coal, and the presenter talked about the need to upgrade and regulate the quality of coal power plants. He also talked about how China has invested a lot of money in clean energy R&D, although he thought that it's not as much as some reports have said (like the Pew).

One thing that I thought was interesting was that he talked about how planting trees for carbon sequestration is needed, but since the carbon is just stored in the trees, it's not a continual emissions sink that can offset the use of the fossil fuels. I'm glad he brought that up because I think that point is not always presented coherently.

He talked a lot about the different climate conferences and what came of them. He pointed out that nobody is doing very well with their emissions targets set in the Kyoto treaty except for Germany, which has had something like 40% emissions reductions from 1997 levels. He also noted that Russia had a lot lower emissions, too, but I think he said it was due to a bad economy. From the Chinese point of view, it looks really bad that the US has not really made an effort at all to reduce emissions and now only promises a 17% reduction from 2005 levels by 2020, and yet there has been no progress towards that goal. On the other hand, Chinese goals don't seem that ambitious, but they have some goals for reducing carbon intensity of GDP by 40% by 2020 compared with 2005 levels, and he showed a graph for that, and they were on track for meeting that target. The speaker talked about how developed nations were supposed to commit between .5-1% of their GDP to emissions reduction, but many have not been doing that. He also summarized the tensions between the EU, US, and China/India where the EU is most frustrated with the US, but the US refuses to do anything unless China is held to the same standards. China then pushes back and wants the US to take the lead and provide more financial and technical support for developing nations. He talked about how the talks, especially COP15 compared to the UN talks, have been disorganized politically, and so China has been messing around (or something like that maybe?). From the Chinese point of view, it is a defensive strategy to protect one's interests when you see there is so much confusion and little confidence in the other parties' abilities to live up to their promises. In contrast, when China announces a domestic policy goal, they have a lot of domestic pressure to meet those goals in order to maintain legitimacy as a government.

Goals for COP16 are to figure out what kind of goals are reasonable for everyone, and how these goals can be enforced.

Delay The Inevitable

NYT presentation about the The Gulf Before the Spill, pointing out that there is a lot of environmental degradation anyway that are happening slower than the oil spill so it is not as noticeable. Maybe the Gulf was screwed anyway or maybe the oil spill will cause it to be cleaner than it otherwise would be due to clean up efforts.

Scientists Finally Standing Up For Themselves

Leading scientists condemn 'political assaults' on climate researchers

This is interesting and exciting because one of the things that came out during the panel talk about communicating about science was that scientists need better PR and they need spokespeople.

China and Climate Change Policy

MIT CEER Pizza Dinner Talk: Climate Change & China's Policy

Looks like an interesting talk tomorrow. He'll be speaking in Chinese. Whoa. I'm going to go, but I probably won't be understanding that much. Haha

Speaker: Mr. Dong Song, Deputy Director of the Climate Change Office, Legal Department of the Foreign Ministry of China

Climate change and its adverse effects are a common concern of the international community. As the largest greenhouse gases emitter since 2006, China?s emission trends, policies and actions in addressing climate change attract a lot of attentions from the world. This presentation will brief on the following dimensions of the issue of climate change and China: climate change and its impacts on China; emission trends of China; China?s efforts in addressing climate change; China?s positions on climate change negotiations & cooperation; China?s outlook of the forthcoming COP16 of the UNFCCC.

Speaker bio:
Mr. Dong Song has been serving as the Deputy Division Director in charge of policy planning at the Legal Department of the Foreign Ministry of China since 2009. During the period of 2006-2008, he held the post of Deputy Director of the Climate Change Office at the Legal Department of the Ministry. Now he is a Master of Arts candidate at the Fletcher School of Law and Diplomacy of the Tufts University.

Roundup Consequences

NYT article on farmers starting to have trouble this year with weeds as bugs are becoming resistant to Round-up.

“We’re back to where we were 20 years ago,” said Mr. Anderson, who will plow about one-third of his 3,000 acres of soybean fields this spring, more than he has in years. “We’re trying to find out what works.”

Farm experts say that such efforts could lead to higher food prices, lower crop yields, rising farm costs and more pollution of land and water.

“It is the single largest threat to production agriculture that we have ever seen,” said Andrew Wargo III, the president of the Arkansas Association of Conservation Districts.

Carbon Price Climate Legislation

The debate continues on the Breakthrough Blog. They respond to two op-ed's by Friedman and Krugman on the topic of pricing carbon. I haven't read through the whole thing, but it's interesting to keep up with the latest articles on the topic.

Expensive Spill

Spill is here to stay for a while.

Honestly, if people can move, I think they should move.

I think that the surprise that people are expressing about the spill shows how most people don't really understand the nature of engineering. In engineering, Murphy's Law is the law of the land, "anything that can go wrong, will go wrong." The only question is how much money and time are you willing to put into designing a system to decrease the failure rate. Many consumer products like laptops and cellphones seem like miracles to people, and they are. However, a lot of resources go to quality control where the factories screen for the defective products so that consumers may have overly positive idea of what engineering is capable of. I think if people really understood that, they wouldn't be so cavalier about offshore drilling and other risky engineering projects where the chance of a mistake is low but can be devastating.

1969 Oil Spill off the coast of California shows that any for-profit company will try to spend the minimum amount on disaster-proofing their operations. It may not just be because they want extra profit but because it may be critical to keeping their businesses afloat.

Union Oil's Platform A ruptured because of inadequate protective casing. The oil company had been given permission by the U.S. Geological Survey to cut corners and operate the platform with casings below federal and California standards. Investigators would later determine that more steel pipe sheating inside the drilling hole would have prevented the rupture.

Gulf Oil Still Spilling

So they can't figure out how to stop the oil from spilling so at this point about 5,000 barrels(?) are spilling into the ocean, and it is likely to hit shore sometime tomorrow.

Looks like there are about 42 gallons/barrel so that's 200,000 gallons a day. I wonder if they are saying how many barrels because people don't really know how big is a barrel so 5,000 barrels doesn't seem like a lot.

There will soon be amazing PR images of the damage, but environmentalists and scientists will need to use them well to build a solid case against offshore drilling.

Bill Gates Working on His Wings

Bill Gates recently came to MIT to encourage students "to focus their talent and energy on tackling the world's biggest challenges, including global health, poverty and education."

Gates was eager to learn during his visit, opening his presentation with a two-part question. "Are the brightest minds working on the most important problems?" he asked a packed Kresge Auditorium. "And to the degree that they're not, how could we increase that, which I think could make a huge difference?"

Those questions were inspired by a weekend Gates recently spent with several friends who were eager to talk about two topics they found exciting: the NCAA March Madness basketball tournament and financial markets. That got Gates thinking about how he could shift some of the focus of the brightest minds from these popular topics toward solving problems that plague poor countries, such as health, food, sanitation and governance, as well as more global issues like education and energy. Even in areas of scientific innovation, a lot of the focus remains geared toward the perceived needs of the rich, such as baldness drugs, Gates said.

Whoo! It is exciting to hear him talk about this.

Gates also wrote an op-ed piece with Chad Holliday, the CEO emeritus of DuPont, about the need for major investment in clean energy technology. They give persuasive explanations for why the private sector cannot do this alone.

But our country is neglecting a field central to our national prospect and security: energy. Although the information technology and pharmaceutical industries spend 5 to 15 percent of their revenue on research and development each year, U.S. companies' spending on energy R&D has averaged only about one-quarter of 1 percent of revenue over the past 15 years.

And despite talk about the need for "21st-century" energy sources, federal spending on clean energy research -- less than $3 billion -- is also relatively small. Compare that with roughly $30 billion that the U.S. government annually spends on health research and $80 billion on defense research and development.

Showdown Over Immigration

Arizona lately passed a very aggressive anti illegal immigration law.

NPR piece on immigration.

The Arizona legislature passed a bill on a party line vote, and Republican Governor Janice Brewer signed it, making illegal immigration a state as well as federal crime and requiring Arizona police to require proof of citizenship if they have a "reasonable suspicion" that someone is in the country illegally.

It's a very complicated issue. On the one hand, I don't think it's right for pro immigrants' rights groups to go so far as to be pro illegal immigration. Some politicians have "urged the Obama administration not to cooperate when illegal immigrants are picked up by local police." I don't really understand why this is politically a good move. It seems like proponents of the bill would feel even more justified in supporting it.

Grijalva and civil rights activists promised to march in the streets and invite arrest by refusing to comply with the law.

Gulf Oil Spill

Recently, an oil rig in the Gulf of Mexico exploded and collapsed. They have not yet figured out how to clean it up. I also heard that 40% of the seafood consumed in the US comes from the Gulf so this could have major impacts on industry and health in addition to the environment.

NYT article on the leaks.

Hopefully this will make people think twice about offshore drilling.

Bamboo Art at the Met

There is a bamboo sculpture on the top of the Metropolitan Museum of Art in NYC this summer. It sounds really cool.

Scientists Want to Communicate with Normal People

I went to a panel discussion at MIT today about communicating about Climate Change, Talking Science in the Age of Sound Bites. It was really really good. The most exciting thing they were talking about was that scientists need to build trust with deniers by acknowledging that values shape how science is interpreted and used.


Beth Daley-
Environmental reporter for the Boston Globe since 1994.

What she said: She talked about the change in print media and how the sciences sections have been downgraded over the years. Also, media has become more polarized politically so more political editorial is considered "news." She noted that there is no common basis for information anymore. There are fewer writers and she has to put out a lot more content rather than be able to work on in depth articles. She used to only write a few articles every year, but now she has to write several stories a day, blog, tweet, and even video-blog. This results in having articles that basically just paraphrase press releases. She talked about the need for science articles to talk more about human narratives to engage people rather than bland statistics.


John Sterman-
Jay W. Forrester Professor of Management at the MIT Sloan School of Management and Director of MIT's System Dynamics Group.

What he said: He talked about how scientists need to sound less depressing by talking about the dream rather than talking about the nightmare. He also made some really interesting points about how scientists and environmentalists need to get away from the "deficiency paradigm," which is the view that global warming deniers just lack "the facts." Instead, there should be more focus on establishing trust and learning to communicate about values and how they influence the interpretation of "the facts." There will need to be scientists who are more trained in communicating with the public. Working on solutions to global warming is not going to be like the Manhattan project, which is what many scientists and engineers envision. It will require the public to be involved in implementation and supportive of policy.


Randy Olson-
Marine biologist turned filmmaker--"Flock of Dodos: The Evolution-Intelligent Design Circus" and "Sizzle: A Global Warming Comedy."

What he said: Scientists are boring. We need more personalities and someone that the public trusts and would go to for advice such as Richard Feynman. However, other scientists criticized Feynman for hamming it up. He is a movie maker and has seen many attempts for scientists and Hollywood directors to collaborate, but they do not know how to speak to each other even when in the same room together. Scientists and environmentalists need to learn how to manage their public relations. They have evolved to be apolitical as people who work on discovering "the truth." However, it is a reality that scientists have ethics and values since they are not impartial machines, so there is no way to be apolitical. Scientists need to acknowledge that there is controversy about climate change instead of dismissing the deniers by simply saying there is consensus amongst the scientific community. He talked about how scientists were really unprepared during "climate gate" as well as the evolution debate and that it's an organizational problem. Someone, perhaps the National Academy of Science, needs to step it up.


Judith Layzer-
Associate Professor of Environmental Policy in the MIT Department of Urban Studies and Planning.

What she said: She paints a starker political picture, saying that most of the political change has been due to advocacy groups. Policymaking is not a linear process. She also suggested that much of the weak response of scientists during "climate gate" is because of temperamental differences. She does not think the National Academy of Science would step into the role of spokesperson for scientists. She points out, though, that conservatives are also depressing doomsday sayers. Sterman responded by saying that the difference is that conservatives are resisting change, saying that there is nothing wrong with our way of life while environmentalists are trying to confront people about their way of life.


Gino Del Guercio-
Executive Producer at Boston Science Communications, Inc. and adjunct professor at the Boston University Center for Science and Medical Journalism.

What he said: He talked about being a producer on the Discovery Channel from the beginning. At first, they made good science shows, but as ratings went up, the ratings became more and more important so that there became a schism amongst the crew where some wanted to keep making science shows and others only cared about the ratings. He said that the title is often more important than the content. One thing people can do is to contribute to public television.


John Hagan-
President of the Manomet Center for Conservation Sciences.

What he said: Science needs to be embedded in social fabric.