Thursday, June 30, 2011

Environment and Labor Classes at UC Berkeley

I am starting to look at interesting classes I'm interested in at Berkeley.

The Governance of Global Production would be pretty interesting.

This graduate seminar explores critical policy and theoretical questions regarding the governance of global production. The seminar engages current trends in the restructuring of industrial production, distributions of environmental, labor, and social impacts from this production, and new strategies for democratic governance. The course presents existing theories of regulation and governance, assesses market and state “failures,” and critically analyzes emerging responses to the limits of traditional regulation. Using cases from the wood products, electronics, garments, shoes, coffee, food, chemicals, and oil industries, the seminar explores the potentials and limitations of new governance strategies, including: corporate voluntary self-regulation, codes of conduct, multi-stakeholder monitoring systems, certification and labeling schemes, fair trade programs, transparency and reporting initiatives, legal strategies, and international accords and agreements. The course seeks to evaluate why these new institutions and policies have emerged, how they function, and when and under what conditions they can be effective in mitigating environmental, labor, or social impacts of production

Sunday, June 26, 2011

Visitors

Last week Amandar and Smark came to visit me in Florida. Here we are with the photographer's dog!

Tuesday, June 21, 2011

Not Outside Enough

Why I have bad eyesight

I KNEW IT

Although, I have to say, it's not like I never played outside. I used to play tag all the time. But I did not play any sports so I guess it wasn't enough. I don't wish I played sports as a kid, though.

Wednesday, June 15, 2011

Environmental Policy Research Interests

I am planning on approaching some professors at UC Berkeley about research positions. I think I might want to try to sample different projects so that I can get more experience.

I think I am most interested in environmental finance, technology policy, and wealth inequality.

Environmental finance
One thing I've been interested in for a while is the impact of cash flow constraints on environmental resource use in private industry. I think that we could use data from the 2008 financial crisis and look at changes in resource use. There has been a lot of focus on the impact on labor (unemployment) but not labor, energy, and resource use together. I am not sure what results I am expecting. We know that resource use went down, but the question would be whether all the decrease was due to lack of demand, lack of cash flow, relative surplus of labor, or shift in technological development.

Some more conventional lines of research in environmental finance would be evaluating asset and stock pricing according to environmental impacts, defining new financial instruments to fund sustainable business, and evaluating the impact of different accounting practices on environmental asset prices.

The kind of business I am most interested in financing are solar and wind power manufacturing, transportation projects, energy efficient appliance manufacturing, and building projects.

Tuesday, June 14, 2011

2012 Popularity Contest

Candidates are starting to prepare for the 2012 US Presidential election.

One thing that bothers me is how candidates like to talk about "common sense," and voters say they want someone who has "common sense." Yes, we do want someone who is rational who has priorities aligned with voters' interests, but when people start making policy recommendations it is clear that they are in over their heads. This is especially true when talking about fiscal and monetary policy. A lot of economic policy is actually really technical. There are a lot of qualitative decisions about how to tackle income inequality and long term goals for research or education. However, things like tax rates, budget cuts, and determining interest rates require careful quantitative analysis, not "common sense."

Saying we need a president who just has "common sense" is as ridiculous as saying that we can design a cell-phone using "common sense." Who needs an engineering Phd??? Obviously we just need an antenna, some kind of processor, a screen, a battery, and some buttons. How hard can that be? MikeyP said people would call for "faster radiowaves." Really, that is exactly the kind of thing nontechnical people say when making engineering suggestions.

We need expertise not "common sense." Voters only seem to appreciate this when it comes to national security issues and foreign policy. When will it apply to domestic policy?

Sunday, June 12, 2011

The Backstory : Aggressive Accounting

These days I've also been reading The Great Unraveling by Paul Krugman. It is his NYT columns from 2000-2002 mostly about how bad George W. Bush is. Today I was reading his columns about aggressive accounting and corporate governance. There are two things of note.

In 1995, Congress overrode a veto by Bill Clinton to pass the Private Securities Litigation Reform Act, which made lawsuits against companies and auditors "that engaged in sharp accounting practices."

In 1997-2000, after-tax profits stalled, but the S&P 500, the profits reported to investors grew 46%. Krugman attributes this to the changes in management theory and the advent of "principal-agent" theory. What's sad is that it is a well-meaning idea where managers' pay depends strongly on stock prices so that they have more accountability. I can see how before it may have seemed like managers were inefficient, maybe sometimes too generous to employees, and maybe out of touch with the needs of the company since they did not have as much invested in their own companies. Unfortunately, tying their compensation to stock prices gives them a big incentive to artificially boost those prices regardless of actual performance. The problem is that the real performance of a company will always be somewhat qualitative. It will always be some kind of combination of factors. Any quantitative measure can always be manipulated. That is something Deming said, too.

We are still trying to deal with the effects of these issues today. Back in 2001 I was still in high school and I had no idea who Paul Krugman was. All these things were happening, but I didn't really know. I just knew that Reaganomics and tax cuts are irresponsible. It is kind of weird to get the back-story now, especially knowing that I was there, too. It is a different sensation from reading about things that happened longer ago or in different countries. I am glad that I think I will have a better understanding of things happening going forward, but it's also a little strange knowing that millions of other people will continue to be unaware and just minding their own business as I was.

Economic Growth Theory vs Prosperity Without Growth

In Prosperity Without Growth, Tim Jackson, a member of the UK Sustainability Commission, presents a potential problem with the need for a constant rate of economic growth. I summarize his analysis in this review. In economics textbooks, growth is necessary and highly desirable to increase everyone's standard of living.

In economic theory, output is a function of capital, labor, and the state of technology.

Y=f(K,N,A)

However, it's generally rewritten as Y/AN=f(K/AN)

I=S -> I/AN = sY/AN = sf(K/AN)

If d = capital depreciation

Kt+1/AN = (1-d)Kt/AN + sf(K/AN)

Kt+1/AN-Kt/AN = sf(K/AN)-dKt/AN = 0 in steady state

sf(Kt/AN) = dKt/AN = I

if technology grows gA percent a year and the population grows by gN, then total investment must grow by d+gA+gN

Output must grow for investment to grow. In Prosperity Without Growth, Jackson points out that resource efficiency must grow faster than output, which implies output growth must become completely decoupled from resource use at some point. How can we do this? New business models? New technology? Information technology? Entertainment?

Economics 101: Investment and Capital Accumulation

This is the generally accepted theory that leads to the need for output growth to maintain a steady state economy and non-increasing unemployment.

The first step is agreeing that output (Y) depends on capital and labor. Capital (K) is the stock of existing machines and plants in the economy. Ok, I can see that. To make things simpler, the theory is commonly presented in terms of output per unit labor and capital per labor.

Y/N=f(K/N)

The next step is equating investment with savings. I=S. Then establish that savings is proportional with the output. Then

I=sY

Saving is done on the household level. Firms do the investment. The reason they are equal is because of the IS relation, where S=Y-C and Y=C+I. It is a little confusing about what this means on a practical level. When people buy stocks is that consumption or investment or saving? I think according to economic theory, it's consumption. Banks can lend money so that firms and people can actually consume more than they make. Could tuition be considered investment? Anyway, it seems difficult to really measure investment vs savings vs output since most businesses serve other businesses as well as people. Is all business spending considered investment? What if businesses save, too, instead of reinvesting all their profit.

Saturday, June 11, 2011

Shoe Decision

I am trying to decide on a dress shoe.

It's between this shoe by Naturalizer



and this other shoe by Enzo Angiolini



The shoe by Naturalizer is supposed to be more comfortable, but the other shoe looks so much more stylish, and it sounds like the brand Enzo Angiolini is pretty good about comfort, especially for narrow feet.

Wednesday, June 8, 2011

Culture vs Logic in Decision-Making

In today's world, we generally think of ourselves as making decisions based on information. Even if our decisions aren't always rational, they are at least based on some kind of rationale. Decisions such as what to eat and drink, what car to get, what career to pursue, what cleaning products to use, where to live, and what to wear. The information technology boom has made it even easier for people to share product reviews, compare prices, and also see what decisions your friends have made. Even so, it seems like people know less and less about how things are made and how companies are run. Then, many decisions are made based on simply price and personal preferences. In the past, and certainly in older societies such as China and European countries, strong cultural norms drive many decisions. In particular, what to eat and when to eat it are emphasized in every culture.

The vast majority of us are very removed from the agriculture industry. In Omnivore's Dilemma, Michael Pollan explains how things are done now compared to how things were done before. He also explains why we need to eat healthy foods and what things are healthy. For example, traditional methods of growing crops and raising animals had very little waste because the outputs of one process are the inputs to the next process. The book is compelling today precisely because it is so rational and driven by information. On the one hand, we must embrace information driven decision-making and work to make even more information readily available to the general public. On the other hand, I feel that a lot wisdom used to exist in the form of "culture" or "conventional wisdom," and culture is still a good venue for guidelines and rules-of-thumb.

What consumer have to work with right now are prices, advertising, and certifications such as USDA Organic. The fact that certifications are so popular is a very positive sign. However, it would be too cumbersome for all the different practices of a farm or other company needed to have certification. Also, binary nature of the certificates give companies an incentive to only meet the minimum standards. One solution is to have ratings based on more categories and have gradations. For example, college rankings are done based on several metrics such as academics, faculty/student ratio, student life, amenities, etc. I think it would be better, though, to crowd-source the rating system, perhaps even with locations and pictures of the actual farms.

The amount of information needed is immense. The main advantage of culture is that information is not needed. You don't know to know exactly why processed foods are unhealthy if your culture simply dictates the need for fresh foods in your diet. This lack of information is also the great weakness of culture, though, and there are many outdated and wrong practices that continue for decades and perhaps centuries. In today's world, things change quickly. New technologies can lead to new practices. Companies change their practices. Ideally, there should be a tool for consumers to rapidly create new cultural practices that are backed with sound reasonings. Something that can influence people's decision-making that does not involve them reading a book could be very useful for everyone.

Monday, June 6, 2011

Nobel Laureate Peter Diamond Withdraws Nomination from Fed Board

MIT professor Peter Diamond withdrew his nomination from Federal Reserve Board today and wrote an op-ed in the NYT. Republicans blocked his nomination ostensibly because they thought he did not have enough expertise in monetary policy.

Peter Diamond's specialty is macroeconomics and the labor market. His Nobel Prize was for his research on search costs in the labor market. Monetary policy is intricately linked with unemployment. In fact, perhaps the primary purpose of monetary policy is to maximize the number of well-paid jobs in the American economy. I just finished reading the core of the macroeconomics textbook so now I really see just how integrated employment and monetary policy are. It would be like telling someone they don't know enough about current because their expertise is in measuring resistance.

It really seems like such a travesty that someone like Peter Diamond can't even get nominated. It really discredits the idea that the confirmation process is merit-based. Also, from seeing him talk, I really get the sense that he is really such a professional, not an activist or a partisan. I am embarrassed that he is treated this way.

Sunday, June 5, 2011

Testing Batteries

Nice overview on battery performance specs. I'm testing Lithium Polymer batteries for work. I also need to come up with a system for the production team to check batteries for degradation.

The Only Economics Class

Many people agree that it would be good for everyone to take an economics course in high school or in college. Usually, introductory economics courses only cover microeconomics, though. I have just gone through the core of the Macroeconomics textbook used in 14.02 (Principles of Macroeconomics at MIT). I think it would be more useful for the first economics course that people take to cover primarily macroeconomics, especially if it's going to be the only course in economics they ever take. The topics in microeconomics that should be covered are the supply and demand curves, the concept of marginal utility, and the production function. The rest of the course should be about macroeconomics. Macroeconomics would help people to better understand fiscal and monetary policy and how they impact unemployment and inflation. This would help people have a better understanding of current events and be informed voters.

The problem when people only take microeconomics is that people try to use the very simplistic results to make policy decision. For example, people conclude that markets are the most efficient methods to allocate resources so there should be fewer regulations. Price ceilings and floors always add deadweight loss so those should never be used either. Theoretical and empirical results from macroeconomics are much more directly applicable to explaining everyday events and informing policy decisions.

Friday, June 3, 2011

China's Environment in the News

Never good news, but at least they admit it.

China Faces ‘Very Grave’ Environmental Situation, Officials Say

Plan for China’s Water Crisis Spurs Concern

In order to feed the growing water needs of northern China, they are planning on diverting water from the ChangJiang River to the Yellow River. It is a very weighty decision that will have huge ecological and human impacts. People tend to forget that inaction and other alternatives also have huge ecological and human impacts. It is upsetting to read so much righteous comments from NYT readers when American per capita water use is so much more than China's. In fact, many American states, most notably California, face major water shortages. America's population is much lower, is much wealthier, and yet we still have problems and many do not even admit it. Many Americans still do not believe in climate change.

Narcissism

Funny but actually a little chilling article about narcissism in Chinese women and what it means for their Western boyfriends. Haha

Some of the traits hit close to home such as "Has constant fantasies of unlimited success, money and power," and I think sometimes I do lack empathy, usually when I think someone did something stupid, which is quite often. I also know I have the ability to be manipulative, but I consciously decide not to do it most of the time. Contrary to narcissistic behavior, though, I feel like I usually am empathetic and I can take criticism. In fact, I think I have quite thick skin. I also feel I have already overcome some other negative aspects of narcissism such as the depression, low self-esteem, and needing affirmation of my self-worth.

Consequences in relationships include "Only seeking men who are perceived as powerful, influential, extremely handsome, well-educated and unique." Also "will engage in constant power struggles or will always need to prove she is right. Closet narcissists are usually very distrustful and devaluing of other women, mostly or entirely have male friends." Actually I have a good number of female friends, but I do tend to be initially distrustful or competitive, especially with attractive women.

The author describes China as a matriarchal society. "In public, I will give my future husband 'face'. I will not argue with him or yell back at him, but, in the house, I am the boss. I will tell him what to eat and what to wear and he will have to listen to me."

Most relevant to me. Ruh Roh

In this context, many Western men, soon after intentions of marriage have been discussed, or, at the very least, once the girl has achieved a certain level of security in the relationship, report how Chinese women metamorphosize into partners who are controlling, domineering and hypercritical. Love and concern are often expressed in a manner that we would refer to as both critical and overbearing. Feelings of love and concern will be expressed with, for example: "Why did you wash your hands before flushing the toilet? You are supposed to wash your hands after you flush the toilet"; "Why did you leave the light on in the bathroom. Are you using it now?" and; "You better do a good job or they won't ask you back!" If you can understand and accept these very common types of condescending admonishments from your Chinese girlfriend or wife as "true love," then you are a better man (certainly a more accepting and patient one) than most.


I was recently getting worried about getting too naggy with little "tips" like those above. Actually it's a little creepy that the examples are close to things I've said before, but it's also hilarious.

Bottom line:
Thus, as a rule, foreign men who report the greatest degree of contentment in and satisfaction with their marriages to Chinese nationals are those who typically prefer being married to, and have deliberately sought out in the past, a strong-willed and dominant maternal-like figure.


Who knows, maybe it's just a silly article with some crank psychology. However, unfortunately I am sorry to admit that some of the behavior described does seem to be a trend with Chinese women such as myself.

Thursday, June 2, 2011

Learning Chinese Textbook

Learning Chinese: A Foundation Course in Mandarin, Elementary Level by Julian K. Wheatley

Julian Wheatley was the housemaster at EC when I was living there. He was always classy and a nice stabilizing force in the dorm.