LA x 7

Last year, I was in Paris about 3 weeks before the beginning of the Tour. One morning, every newspaper kiosk in the city was suddenly plastered with a horrible picture of Lance - it showed him gaunt and dark. "Photoshop" I thought. The photo was emblazoned with the word DOPAGE; this was an advertisement for an edition of a Le Monde magazine featuring the recently released (at that time) LA Confidential by Pierre Ballester and David Walsh. Neither of them will say that Lance is definitely guilt of doping, only that the facts are there for you to draw your own conclusions (in other words, they don't want to face libel charges).

Today's Le Monde coverage shows that the French haven't matured since then. The coverage of Armstrong's seventh and final victory starts out with a loving description of how tour officials are relieved that he's leaving because uncertainty will return to the Tour. Then it devolves into a discussion of the code of silence that Lance enforces (?) about doping.

Every time he wins a stage ... into the doping control trailer.
Every day he stays in Yellow ... into the doping control trailer.
Random tests throughout the year.
He donates money to doping test research.
He gives tips to the doping control officials.

Also, we have this bit of snark, in which our intrepid reporter doesn't like the fact that Nike is basing a campaign on Lance's recovery from cancer. I recently read that Trek signed with him in 1998 because they thought they might get some exposure for their relationship with a "human interest story". Oh, what a story, eh? Someone in marketing gets a raise. But if anyone should be able to cash in on such a story, it's Lance Armstrong ... who signed the deal with Nike (the ad campaign included hiring an artist who turned Lance's icons into literal icons). Nike continues to support the Lance Armstrong Foundation and the Livestrong campaign. So who loses? Apparently, anyone who hates Nike and has to watch their commercials.

Do what you would tell any Nanny who thinks that you are being unduly influenced by TV: Just turn it off. Or maybe that retort only works on Jerry Falwell and not Nike haters like Peter Karasotis?

Incidentally, while I was on that trip, my father passed away after a protracted struggle with cancer. During his last year, my sister started working with Team in Training, an organization that raises money for leukemia and lymphoma research at the same time it provides endurance sports training to participants. Stephanie completed a marathon in San Francisco. Specifically, she completed the Nike Women's Marathon, which raised over $10 million for The Leukemia and Lymphoma Society.

N-I-K-E Women's Marathon. $10,000,000. How much did you raise, Mr. Kerasotis?

Yeah, I thought so.

Gibson's folly

I turned on the end of Jon Gibson's show yesterday to hear him in complete meltdown. He was blathering on and on about how "we" should get it "now!", and that he was glad to hear that the Brit police had finally decided to start taking this thing seriously and to put 5 bullets in the head of every threat. He kept repeating the "5 bullets" phrase and finally declared that he didn't want to hear any complaints about the barbarity of that attitude because "everyone" needs to understand that we are in a war (anyone know where I can get a transcript?).

Then the news that 27 year old Brazilian citizen Jean Charles de Menezes had nothing to do with the terrorist attacks of this week or two weeks ago. The police are shocked, they regret the incident (probably not as much as the man or his family), and the Brazilian government is beside themselves (all courtesy of Drudge, the last link will probably die, soon).

Do you get it now, Jon? You and all the other blowhards (O'Reilly, Hannity, Coulter, etc.) who apparently don't understand why we still stick to the outdated, tired, antiquated, barbaric idea of trial by jury? Sometimes, you see, the police are wrong. Sometimes they cut corners to get a quick conviction. We know that even some of the dangerous terrorists "picked up on the battlefield" and sent to Gitmo weren't dangerous terrorists, after all, because we've been letting them go. Or maybe you think that's a mistake? Do you know something we don't? If so, let's hear about it at the trial.

I'm not the only one who's been noticing Jon Gibson's absence from his senses. I don't think he's coming back, either. Too bad, because he needs to collect his Schmuck Award.

Effect of terrorism on transit

I have been wondering ever since 9/11 what the effect of terrorism was going to have on mass transit. Planes and trains are vulnerable because the results can be spectacular and the casualties can be high - both very important for terrorists looking to draw attention. Palestinian bombers targeted bus stations, too. Even in the absence of terrorism, the threat raises the cost of using mass transit because of intrusive searches and inconvenience of additional security precautions (the convenience is usually one of the biggest assets of subway systems).

On the other hand, when mass transit is a terrorist target and cars are expensive (especially in dense cities), people still have other choices like walking and cycling. It looks like that is the preferred solution in London at the moment. I wonder if this would be the opportune time for the owners of Segway to go public? And what other transport ideas would be a good investment?

How about a hydrogen-powered motorbike?

More power ... we know y' c'n do it!

Today we mourn the passing of a man who may have done more than anyone can calculate to bring about the future that, ironically, he already lived in. I wonder how many lifesaving devices and enabling technologies there are in the world today that were invented by people who imagined themselves to be able to react with such calm as the Man in Red did in the direst of emergencies and who could improvise an engine repair with raw materials? Indeed, he was the only man in red on whom you could always count to return from the mission intact, even though he was always ready to be first to jump into the fray with the hated enemy.

I'm talking of course about James Doohan, best-known for his Star Trek character, Commander Montgomery Scott (3 March 1920-20 July 2005), Chief of Engineering aboard the Enterprise.

Apparently, Scotty was actually Canadian, born in Vancouver. I didn't know that he had lost the middle finger of his right hand in the Normandy invasion, nor did I know that he was a genuine war hero. Thankfully, the Milwaukee School of Engineering, where half of the students cited him as an inspiration, awarded him an honorary degree. More at Doohan's imdb biography.

I always thought that Scotty should have whipped out a roll of duct tape and/or baling wire in at least one episode, but apparently Hollywood writers didn't include engineers at the time they were writing what would become the most inspirational engineering show, ever. I've read that law school applications tend to pick up whenever there is a successful law show (starting with LA Law), and people have conjectured why we don't try to inspire more engineers that way. MacGyver? No, too hokey. Shows/movies like CSI, The Net, and Alias are more farce than actual science. Besides, I think it works better if the science takes a backseat to the plot and a clever script instead of being a costar. Science fiction is the perfect genre, but few recent shows offer the same depth and breadth of the original Star Trek, possibly because Roddenberry was smart enough to employ actual science fiction writers.

I, for one, disliked The Next Generation crap intensely. ATTENTION, WRITERS: YOU ARE WRITING A SHOW SET IN THE FUTURE WHERE ANYTHING IS POSSIBLE. YOU DON'T NEED A HOLODECK TO GO BACK IN TIME! Also, Number One is not a "hunk", Q and Data were just plain annoying, and you should never have forced Tasha Yar off the show over that Playboy spread. The best part about the original series was always the writing, something TNG gave up in favor of special effects and the bizarre Ferengi (were they supposed to be stereotypes of Jews, Japanese, or generic capitalists?). TNG never matched shows like All Our Yesterdays, Let That Be Your Last Battlefield, and especially The Omega Glory from the original series.

Throughout, Doohan was unflappable in battle and knew everything about the ship. He was the quintessential professional engineer, but could still drink the rest of the crew under the table. Here's to y', sonny Jim!

Solutions, not just complaints

I am critical of both the current situation in health care, and of the nationalized plans offered to "solve" it. In the spirit of bringing solutions instead of just complaints, I'll offer three things in one post: freedom (and responsibility) to take care of yourself without having to seek permission from a Craft Guild, private action to help the poor, and mutual aid for the working and middle classes to help themselves. I think the correct solution mix requires a truly free market in medical services and goods - not the mixed market we have now - coupled with creative solutions to pool risk and to support the poor through private action.

First, Reason editor Kerry Howley found that he was able to survive in Myanmar's dangerous wilds, where a patient could freely roam the halls of a pharmacy without a prescription, and actually get needed drugs without first genuflecting at the MD altar (and in Myanmar, that's almost the only thing you can do freely). Dangerous? Well, maybe, but not being able to get needed drugs because you can't afford the gatekeeper is dangerous, too (via MarginalRevolution, where Alex discusses risk). As David Friedman points, medical licensing and drug prescription laws may raise the quality of the average doctor, but it lowers the quality of medical care delivered because 0 (the amount received by people who can't afford cartel prices) always lowers the average.

Second, retired teacher Jean Ann Lynch was featured on yesterday's Morning Edition, where they reported on her Baby Basics charity. Baby Basics provides diapers to the working poor, helping to break a cycle of strained budgets, rash-plagued babies, stressed mothers, and (in some cases) abused babies. I guess I'm a little surprised that they aren't promoting cloth diapers, but I am always mindful of a theory of mine that a poor mother's time is relatively more valuable to her and her family than the time of a wealthier mother (why? Possibly because she has so little that she can afford not to rent out and possibly because she cannot afford substitutes ... it's still a work in progress). Despite the billions of dollars spent on these programs at all levels, this is a simply solution that is being addressed privately, perhaps because private solutions and actors are more observant, nimble, and motivated than faceless bureaucrats.

Finally, David Beito's From Mutual Aid to the Welfare State: Fraternal Societies and Social Services, 1890-1967 is one of my new favorite books. I haven't gotten around to reading it a second time, yet, but it describes a feature of American life that is so disregarded that it is almost unknown. At one time, some 50% of the population of many cities, especially immigrants, the working poor, and minorities, belonged to mutual aid societies, where a small fraction of their income (relative to both then and today) was used to purchase life insurance, preventive medical care, hospitalization, sick relief (temporary wage replacement for people too sick to work), old-age support, survivor benefits, and even burial services. The aid they received was not charity, but rather service received for fees paid; the dominant paradigm was self-sufficiency. Frequently, services were rendered to people who were unable to pay after review by the benefits committee, but cheating was effectively thwarted. The societies built strong community ties that government programs do not. Eventually, laws intended to stifle mutual aid societies' competition had their effect, the AMA squashed the "lodge work evil", and "free" government services crowded out the societies, abandoning "self-sufficiency" for "self-actualization". That self-actualization principle spawned the situation described in Alex Kotlowitz' excellent There Are no Children Here, in which he documents the lives of the youngest of three generations of a family living in a public housing project in Chicago with no clear path out.

Bastiat said it best (from The Law, 1850):

Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all.

We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.

I want people to have better health care. I don't think the government is the only, and certainly not the best, means for achieving that end. People should be able to get the drugs and services they need and consult with doctors if they want or need to, but they shouldn't have to consult with them if they don't want or need to. A safety net is a good thing to have, but universal healthcare in which everyone pays for everyone else regardless of their ability to support themselves is not a safety net. Private solutions offer a number of advantages that government services do not and never will offer; government solutions offer only one "advantage" that private solutions don't: a bigger budget.

Actually *reading* the article better than reporting on the reporting of the article ... by the author!

I'm not sure how the Pimentel and Patzek study first entered into the blogosphere. Surely people don't read Cornell News Service press releases, do they? But that story got picked up verbatim by several other press outlets, and now it's "science". Do you suppose it's possible that the Cornell News Service was notified of this research breakthrough by David Pimentel, a researcher at ... Cornell?

If you look on the web, you can see that Pimentel, an entymologist, has been an activist for some time. While that's not bad in and of itself, it seems safe to say, based on comments that he has made, that he assumes his conclusions are true, and then sets out to prove them. That's no different than, say, the Department of Agriculture and the Department of Energy, who also "know" that ethanol from ADM corn is a positive energy producer. The problem is that without doing the research ourselves, we can't tell who is right or wrong, and we certainly can't rely on either group to be disinterested observers.

One thing we can determine, however, is that the reporting on the subject lacks depth (DeLong might say "Why, oh why, can't we have decent science reporting..."). Consider this "money quote" included in the Cornell press release:

"The United State desperately needs a liquid fuel replacement for oil in the near future," says Pimentel, "but producing ethanol or biodiesel from plant biomass is going down the wrong road, because you use more energy to produce these fuels than you get out from the combustion of these products."

That's a fairly broad statement, but what does the actual article in question, "Ethanol Production Using Corn, Switchgrass, and Wood; Biodiesel Production Using Soybean and Sunflower", have to say about the subject?

(3) For biodiesel production, there are two problems: the relatively low yields of oil crops ranging from 1,500 kg/ha for sunflower to about 2,700 kg/ha for soybeans; sunflower averages 25.5% oil, whereas soybeans average 18% oil. In addition, the oil extraction processes for all oil crops is highly energy intensive as reported in this manuscript. Therefore, these crops are poor producers of biomass energy.

So, which is it? Is the problem "biodiesel from [all] plant biomass", or "biodiesel from soybean and sunflower"? Since the set "all plants" is not limited to soybeans and sunflowers, it makes a difference, but the meme is passed through sloppy reporting, with titles such as "Corn Ethanol and Biodiesel Net Energy Losers".

The Pimentel/Patzek article contains some hard-to-justify assumptions. For example, energy associated with 11 kg of stainless steel, 21 kg of steel, and 56 kg of cement is included "per 1,000 kg biodiesel oil from soybeans". An additional 160,000 kcal of "Cleanup water" (not my units) is charged for every 1,000 kg biodiesel, but no explanation is made of why this water can't be reused (or how water is measured in kcal - is that the energy to heat it? to pump it?).

By far, however, the energy and cost required to make biodiesel from soy is dominated by the price of the beans and the lime used in their production, according to the article's assumptions. Apparently, lime is only required when rotating soybeans with corn. Under circumstances where soybeans were grown exclusive of corn (for example, after oil tops $180/bbl), it would be reasonable to neglect lime from both the energy and the cost calculation. Do that, and the energy inputs fall from 11,878 to 9,064 kcal. Further, I am going to make the admittedly rather risky assumption that wear & tear on stainless steel, steel, and concrete is negligible, and that I can recycle my "cleanup water" (by using a filter whose cost is negligible over dozens of batches). My new energy input is 8,394 kcal, and my output is still 9,000 kcal (from the note on Table 7 in the article), so I actually have a net energy output of +7%. The cost with these new assumptions is $925.10/ 1,000 kg of biodiesel, or $0.625/kg after "taking credit for the soy meal", and therefore $0.58/l using their specific gravity of .92. That compares favorably to the $0.84 they got, and is less than twice as expensive as petrodiesel. See what a difference a few assumptions make?

I don't see any process chemicals in the paper's description of the biodiesel transesterification process, so maybe he is assuming a different process or that the catalysts are 100% reusable. That would count against renewability. I also don't see any description of capturing the heat given off by the slightly exothermic reaction (that would count in favor of renewability). They didn't subtract the portion of the energy that went into the meal from their inputs, though they did subtract that from their monetary costs (in favor). They assume coal is used in the generation of electricity, but I don't see any reason why solar couldn't be used to provide either the electricity or the steam, or why the water couldn't be captured by cistern (two counts for). That's the way Mike Reynolds would do it.

And I damn sure didn't see any analysis of rapeseed, jatropha, algae or waste cellulose as biodiesel feedstocks, since all are more promising than soybeans or sunflowers. For the cellulose, I maintain that the energy inputs to the plant mass shouldn't even count since they would be committed to the production whether or not the biodiesel is made, and they are captured in that part of the plant used for food.

Dr. Doty does a much better analyzing the assumptions in the comments at Green Car Congress.

What of the lost corn? Most of it goes to cattle feed anyhow, so it would drive up the price of beef. Dr. Pimentel doesn't seem to have a problem with that. Also, it is worth pointing out to the commenters at GCC that Pimentel is hardly "in the pocket of big oil". He's a solar and wind energy advocate. However, I wonder if he knows just how hard the case for wind power is? Or whether he has considered that PV is only net energy producing over a very long period? Suppose it's 4:1 over a 20 year period. A biomass-based fuel that gets only 1.2:1 EROIE will achieve that same output over the same period of time when used iteratively (of the 1.2, plow 1 back into the next season's crops and sell the .2).

Pimentel may well be right about corn ethanol and soy biodiesel. The fact that these two products must be subsidized to be economically viable, and that ADM and others lobby for the subsidies and try to block competitors, should say something. But that doesn't mean that all biomass is untenable, so it would be nice if scientific reporting was up to snuff on this topic.

Heartless Bastards

After hearing the interview on NPR, I bought the album. After 2 listens, I think I like it. There's a certain sadness (I can't quite put my finger on it), but a strong sense of defiance that infects almost every track. The rhythm section is polished and professional, but they could use a little more swing: sometimes it seems like the 4/4 might devolve into a march. The whole thing, though, is driven forward by Erika Wennerstrom's incredible vocals and credible lyrics. Her voice, which seems to have the same sonic range and quality as a young Robert Plant, thoroughly dominates the same way Bowie's dominated Tin Machine.

BTW, in the NPR interview, they said she was shy, even to the point of having meltdowns, seemed to be obsessed with being a rock & roll musician for much of her life, has been described as quirky, and she even has a certain look about her ... does she know she's autistic?

How do you bet? (Updated)

Let's say that you are very concerned about oil depletion. Not just concerned, let's say that you are Highly Vested in some response to The End of Oil; maybe you own a biodiesel plant. I think you should try to be as profitable as possible for two reasons: one, so that you can plow the profits back into the business, and two, to send a signal to other fence-sitters to enter the fray. You are basically making a bet that oil prices will rise, and you should profit from that outcome.

High petroleum prices will not only drive more people into your arms, they will also temper demand through a variety of mechanisms. You probably see that as a good outcome even if it doesn't have an effect on your wallet because it reduces greenhouse gas emission and other pollution and may have other effects you perceive as beneficial. Therefore, you should also be concerned that prices may go down because lower oil prices will allow people to relax as they did after Saudi Arabia relaxed their embargo in the mid 80s. That means more pollution, more dependence on oil, and perhaps a setup for a crash (if you believe such things).

You aren't certain that oil prices are going to be higher. Let's say that you are only 90% certain that oil prices will go up in the future, meaning (leaving out other possibilities) that you are 10% certain that they will go down. This could be a real problem for your wallet, your business, and for mankind. What should you do?

You should bet that oil prices will decline by hedging your much larger bet that they will rise. You can do this by buying a put option on a contract for delivery some time in the future.

Let's say that oil is currently $60, and you think it could go to $90, but it might go to $30. You are already vested in a bet that it will go to $90 with your biodiesel plant, so you invest a much smaller sum into put options at $60. If oil goes to $90, you are covered. If oil goes to $30, you exercise or sell the option (I'm' not even going to tackle the math on what strike prices or contract prices because (A) I'm not qualified, and (B) your eyes would glaze over). You then use the proceeds (60-30=30, multiply by the number of options) to keep yourself in business through what you think could be a temporary bear run for oil - maybe you live off it, maybe you subsidize biodiesel prices, maybe you plow it back into the plant to increase the profitability.

Of course, buying puts for delivery at the current price is the same strategy you might pursue if you thought all of the peak oilers were flat-out wrong and that oil prices are eventually going back down. Ironic, no?

This discussion on EconBrowser is good - many interesting points about oil futures trading.

Update: As it turns out, there was an article in today's WSJ (sorry, pay site) that described the success of the mirror image of my suggestion. Airlines are in a constant gamble that oil prices will stay flat or decline because rising prices can't be passed on to customers easily. For one thing, the airlines are in tight competition with each other, and for another, they also face competition with buses, trains, and automobiles. Southwest perked up the markets today on news of 41% higher earnings this last quarter. How?

"Southwest has secured financial hedges that limit 85% of its fuel costs during the year to an equivalent average oil price of $26 a barrel. That saved Southwest $196 million in fuel costs in the quarter, reducing the increase in Southwest's per-gallon jet-fuel expenses to 25%, compared with twice that for competitors."

More here, here, and here. The first is an article questioning whether failure to hedge is a breach of fiduciary responsibility, the second is Southwest's annual report, and the third is an academic article on hedging strategies for jet fuel. Another reason to keep flying Southwest.

Is this a problem or a solution?

If you are a vegetarian, can/would you eat cow-free beef? I mean, in what substantial way would it be different than tofu or quorn?

Hippies and Rednecks - hipnecks

In The Hippy and the Redneck Can be Friends, Reason's Jesse Walker reminds us that there was a time when these seemingly disparate people might have been seen together at Eagles concerts or watching Burt Reynolds movies. Those days seemed to be gone forever as the country has been artificially divided into "Blue" and "Red" states. People, I think, have a tendency to focus on their differences rather than their common ground, and politicians are highly motivated to exploit that tendency (hence the use of "wedge issues").

Fortunately, it is possible for them to find some common ground despite themselves and despite the best attempts of the politicos thanks to that one-man nexus of hippy-redneck culture, Willie Nelson. A longtime supporter of American farmers, it seems that Willie has become a fan of biodiesel, drives a Mercedes diesel that he refills at Pacific Biodiesel (in Hawaii), runs all of his tour buses on biodiesel, and is now involved in marketing a brand of biodiesel called BioWille.

Now, if only someone could figure out how to educate the Uninformed Union of Concerned Scientists, where apparently someone bought a hybrid ... and all of the hype that came along with it. Hybridblog is the companion site to the decidedly and irrationally anti-diesel hybridcenter.org, which features this topic center on "Hybrid incentives, or dirtier diesel?" and this panic-stricken petition to favor tax incentives for hybrids but not diesels (why do we need tax incentives for either when rising fuel prices seem to be sufficient? If Ford, Honda and Toyota are selling more than they are making, incentives won't increase the rate of ownership at all). In this post, they conjecture over whether VW is going hybrid. I hope they do, and I hope the fuel-burning side of the drivetrain is a diesel, just like in their 80 mpg diesel Lupo. Judging by this post, I think their main concern is with oil imports. Guys - no matter how many hybrids are on the road next year, if they burn gasoline, we will be importing most of it. Only biodiesel gives us any hope of becoming an autarky self-sufficient.

Executive feedback

A common perception among user and fan sites is that they are providing the feedback, but company executives aren't listening. Could that be changing? Apparently, a VW executive (Len Hunt, VWoA) has been lurking the VWVortex forum and finally posted a comment (via Autoblog). So take heart, Fashion-Incubatistas.

Some Things About Tyler Cowen

Every time Tyler visits some new place, he posts his favorite things about that place. When are the tables ever turned (I mean other than this)?

Jewelry: Tyler and his wife wear their rings on their right hands.

Career: Despite having chosen economics as a profession as early as 13, he was not subjected to the normal treatment we might expect of teenagers (and, apparently, adults).

Blog management: When deciding to make changes to MarginalRevolution, "things that make the blog better for Tyler" are weighted more than "things that make the blog better for readers". [It is possible that by weighing it that way, it is better for readers than if the weighting were done the other way? Also, does Alex have to use the same criteria, or is it adjusted to him?]

Travel: Tyler "collects" cities. [He apparently also collects amate paintings]

Art: Tyler has a very broad definition of art - including very utilitarian things like food. [I agree - Kathleen does, too, but may not agree that she does art]

Mexican Food: The "no brainer" on the Chope's menu is the relleno plate. [I don't know if that is a no-brainer at every Mexican restaurant, though]

The bottom line: I'm always leery about being in agreement with someone on too many topics - it makes me fear my own intellectual laziness. Should I just accept it, or start trying to find uncommon ground with MarginalRevolution? At the very least, I'm going to leave my new ring on my left hand.

Centralization of news collection? Nah!

The next time you hear someone pull out Ben Bagdikian's Media Monopoly (or the exciting New Media Monopoly, published in 2004) as evidence that we are being kept in the dark, think about this: I just checked in on the BoingBoing post about the London attacks and found links to multiple blogger, Flickr, and wikipedia information sites. The wikipedia entry has already (1830 MST) been edited over 2500 times by dozens (hundreds?) of editors the world 'round, including a number of critiques (such as "how do you know?") that keep the "reporters" on their feet and the reporting accurate. It even includes a translation of the claim for credit. How exactly is Big Media preventing us from getting this, Ben?

And as far as Gary Trudeau's recent "critique" of bloggers goes, I'd say this about puts a nail in that coffin, too. The only advantage the journalists seem to have is their official credentials that give them more access, but we should remember that some journalists blog, too. Where exactly, Gary, does the term "journalist" come from? Could it be simply someone who keeps a journal? And in what substantial way is that better than or even different from a regular blogger? I mean, other than the fact that a blogger isn't backed by a Big Media giant?