While I don’t have anything to link to yet, I’ve learned that the University of Virginia has responded in court to Ken Cuccinelli’s abusive legal move, opposing his discovery attempt on academic freedom grounds. Bravo! I hope to update this post with a link to the legal document as soon as I can. Update: A news report on this latest development is here. The UVA legal filing is here.
As we’ve discussed recently, persistent deflationary forces do not augur for a repeat of Japan circa 1990s or the US in the 1930s. Instead, because of the inability of governments to finance their current and future debt burden (there is a dearth of domestic savings and global capital), deflationary forces will ultimately lead to severe inflation or hyperinflation. In today’s missive, we explain how this will happen but in various stages.
In the first stage, the economy enters a recession after a large credit bubble. The recession and end of the credit bubble lead to deflation. As a result, the US Dollar and US Treasuries outperform. Think 2008.
Policy makers (a term for interventionist bureaucrats) then provide stimulus via monetary easing and deficit spending. Gold (NYSE: GLD) and gold stocks (NYSE: GDX) outperform with silver not far behind. Think late 2008 to early 2009.
The economy gets a bump from the stimulus and economically sensitive markets such as commodities and stocks outperform. Think 2009.
This brings us to where we are now. The market is starting to sense that Europe’s debt burden is too high as its economies struggle to recover under the weight of excessive debt. The market is beginning to sense a rising probability of default. Precious metals are soaring against the Euro, the Pound and the Swiss Franc.
Meanwhile, with money moving back into US Treasuries, the US will have the ability to attempt another stimulus and announce further quantitative easing. Europe is currently ahead of the US on its track to currency depreciation, rising inflation expectations, and rising CPI/PPI. The US still has time before the market begins to worry about its debt burden.
The next stage is the transition from the initial outbreak of price inflation to severe inflation. Inflation accelerates due to a loss of confidence in governments and currencies. A failed economic recovery leads the market to realize that the debt burden is too large and will ultimately be defaulted upon or inflated away. At this juncture, all commodities begin to perform well again. It may take anywhere from six to 18 months for this stage to be evident.
Finally, inflation is exacerbated as supply shortages emerge. Tight credit restricts new production and consumers begin to hoard. During such a period, precious metals and commodities will continue to perform well but the agriculture sector will be the real leader.
In order for an investor to maximize returns, they must be able to hold their convictions and adapt to the changes in the coming cycle of inflation. Currently, precious metals are obviously far and away the best play. While more and more investors are waking up to gold, they are not embracing it enough. If it is clear that Gold is a safe haven, why are you only devoting 5-10% of your portfolio to it? Moreover, why do you have zero or 5% exposure to gold stocks when their outlook is superior to commodity stocks and emerging market stocks?
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Filed under: Chrysler, Fiat, Celebrities
Now here’s a juicy rumor. Word on the web is that Chris Bangle may be looking to step back into the auto-design mainstream by revisiting one of his former employers. Don’t expect new BMW models to be wearing any of the guy’s influences though. From what we understand from our Google Translator, Caradisiac believes that Bangle would be the perfect choice for Fiat to give its products an extra level of pizzazz as the company wades even deeper into international waters.
On one level, the move makes sense. After all, Bangle called Fiat home before he moved to BMW in 1991, and the designer cut his teeth and made a name for himself while working on the likes of the Fiat Coupe way back when. But we haven’t heard word one from the designer about making a return to the mainstream auto world.
For now, we’ll simply file this one under rampant rumor and wishful thinking. Fiat isn’t having any trouble cranking out stylish products, and one would think the company has its hands too full dealing with bringing Chrysler back to life to bring on a big name like Bangle. Doesn’t hurt to ponder “what if?” though, especially since the guy’s non-compete dried up in March.
[Source: Caradisiac]
Is Chris Bangle headed back to Fiat? originally appeared on Autoblog on Thu, 27 May 2010 14:32:00 EST. Please see our terms for use of feeds.
“We need our development teams focused on content and cool features, not anti-piracy technology.” Thank you, finally! See, Blizzard gets it. The company’s co-founder, Frank Pearce, recently told the good folks at Video Gamer that he thinks the fight against DRM is misguided. Not that he supports end-users going around torrenting his games till the end of time, but that the way to “beat” piracy is to embrace gamers and treat them like complete jerks.
Part of the process is the new Battle.net, which launches with StarCraft II. Its DRM is rather simple: a one-time online activation. After that, you can play online or off without having to worry about Blizzard’s mommy-state servers keeping tabs on your authentication status. No, Blizzard isn’t the only company whose DRM works like that, but it does highlight the idea that, “Oh, well, all the top publishers see piracy as a huge, catastrophic issue, so clearly we need to implement ridiculous DRM policies.”
Pearce also called DRM a “losing battle.” By that he means what we’ve been saying forever: no matter how robust your DRM is, it will be cracked. It is a complete waste of resources (time, money, sandwiches, etc.) developing trying to outfox crackers. (These crackers, most of the time, aren’t even interested in pirating the game, but merely seeing if they’re “hacking” skills are as sharp as possible. That people can then pirate these games is but a nasty side effect.) There’s too many of them out there to develop a truly hack-proof system. So, spend those resources making sure your game isn’t a pile of dross! Maybe then it’ll sell?
Sigh, if only other PC publishers would follow Blizzard’s lead here…
via Tom’s Hardware
While his government wallows in massive debt, the Prime Minister of Greece has his own problem — the telephone company turned off service to his home phone earlier this week.
Turns out it was all an error, as Prime Minister George Papandreou’s home phone number was nearly identical (all but one digit) to that of a delinquent customer whose service was to be disconnected/
Of course, as soon as the phone company, which is 20% owned by the Greek government, learned of their mistake they dispatched techs to fix the error.
The Prime Minister should be glad he doesn’t live on this street in Texas.
Hello? Hello? Greek PM’s Phone Cut off by Mistake [ABC News]
X-51A Waverider missile of US Air Force has sustained an amazing record of Mach 6. The nextgen-scramjet-technology-powered X-51A Waverider was launched over the southern California coast. A remarkable speed of sound has been marked by X-51A Waverider missile.
The US Air Force affirmed that its X-51A Waverider cruise missile – a next-generation vehicle powered by scramjet technology – has reached a speed of Mach 6 during the test. As stated by the Air Force, the X-51A Waverider was carried by a B-52 aircraft having an altitude of 50,000 feet.
The X-51A Waverider have sustained a Mach 6 speed for approximately 200 seconds. The 200 seconds at Mach 6 have marked the record to beat the previous scramjet record of 12 seconds. As stated by the Associated Press, Charlie Brink, an X-51A program manager at the Air Force Research Laboratory, titled the flight historic.
“We are ecstatic to have accomplished many of the X-51A Waverider test points during its first hypersonic mission,” Brink stated. “We equate this leap in engine technology as equivalent to the post-World War II jump from propeller-driven aircraft to jet engines.”
A Mach 6 speed of sound, that’s how the scramjet-powere X-51A Waverider is defined!
Related posts:
The Aussie dollar is up 4.44% over the Japanese yen in today’s trading, partly due to the to growing belief that the mining tax won’t have teeth in Australia, though mainly becaue everyone is having an optimistic day.
And of course the move looks really dramatic against the yen, which folks always sell off when they’re feeling good.
Join the conversation about this story »
Toyota hasn’t been able to heave a sigh of relief after a flaw was discovered in the acceleration pedals of a number of Toyota models. Toyota first staged a heavy recall to get rid of the sticky gas pedals and thought that it might satiate the complaining NHTSA.
Toyota even paid $16.4 million fine for this mistake of theirs, but despite the ‘corrections,’ matters are only getting worse for the Japanese giant. NHTSA that reported 52 casualties because of the sticky gas pedals is now investigating 71 more crashes that led to fatalities. NHTSA has been notified of a total of 6,200 cases with 2,600 reports filed since March this year.
Out of these 2,600 cases, 100 consumers reported the problem after Toyota claimed to have rectified it.
by Jonathan Hiskes.
Now we’re getting somewhere
on the offshore drilling problem. Some progress from the top:
Mr. Obama ordered a further six-month moratorium on new
permits for new deepwater oil and gas wells; suspended the planned exploration
in the Chukchi and Beaufort seas off the coast of Alaska; canceled a planned
August lease sale in the western Gulf of Mexico; and canceled a proposed lease
sale off the coast of Virginia. Environmentalists who had opposed the Alaska
and Virginia projects hailed the decisions.
Mr. Obama said further moves will be made to strengthen
oversight of the drilling industry and enhance safety as a commission he is
appointing opens its own six-month inquiry.
(Side note to New York Times: Self-identified “environmentalists”
aren’t the only people opposed to putting major marine ecosystems, fisheries, coastal
economies, beaches, and rig workers at risk. More Americans now oppose increased
offshore drilling than support it.)
Better still, Obama
used a White House press conference today to personally stump for clean-energy
legislation as a response to the Gulf spill—something we’ve been begging and pleading for.
“This disaster should
serve as a wake-up call that it is time to move forward on this legislation,” he
said. “I call on Democrats and Republicans in Congress, working with my
administration, to answer this challenge once and for all.”
He also spoke about
pushing for an energy-climate bill in a closed-door meeting with Senate
Republicans yesterday. Notably, he didn’t say whether they expressed
willingness to cooperate. They’re still the crucial barrier to progress on the
issue.
Obama’s comments echo
his message yesterday at a solar-panel plant in California, where he said,
“I’m going to keep fighting to pass comprehensive energy and climate
legislation in Washington.” But today’s D.C. presser should give the message
more media attention.
He also stressed that
his administration is trying really hard
to find a way to stop the Gulf leak and cope with the mess it’s created.
“Those who think we
were either slow in our response or lacked urgency don’t know the facts. This
has been our highest priority since this crisis occurred,” he said.
“We are relying on
every resource and every idea, every expert and every bit of technology to work
to stop it. We will take ideas from anywhere but we are going to stop it. I
know that doesn’t lessen the enormous sense of anger and frustration felt by
people on the Gulf and so many Americans.”
Now—with encouraging
signs that the “top
kill” might finally be plugging up the Gulf gusher—Obama needs to make
the larger energy crisis his
administration’s highest priority, tapping every resource and every expert and
every bit of technology to move the nation to a clean energy economy. There’s
still time to make use of this crisis.
Related Links:
The Climate Post: BP oil spill washes up on Potomac shores
Michigan: Where U.S. clean energy, emissions, efficiency policy really counts
Obama preaches green tech gospel to California choir
This is some real inside baseball, but the issue is beginning to really percolate amongst some of the more fact-challenged areas on the right. The “issue” is did the White House offer Joe Sestak a White House position in exchange for quitting the Pennsylvania US Senate Democratic primary against Arlen Specter (a primary Sestak ended up winning), and if the Obama administration did so was that act illegal.
Jon Chait has been doing a bang-up job covering this “scandal” here, here and here (and I probably missed some older posts, that’s just the last three days.)
From the last link, here’s Chait’s very concise summation on why this is a complete non-starter and is being trumped up by those who are either very fact-challenged, or maybe just simply disingenuous:
I’ll keep saying this: A job offer is not a quid pro quo to get somebody out of a race. It is getting somebody out of a race. Accepting one job means you cannot run for another. It happens all the time — the White House appointed John McHugh Army Secretary in part to get him out of New York’s 23rd Congressional District. It offered Judd Gregg a cabinet slot in order to get him out of the Senate. This is completely routine, neither illegal no immoral nor especially unusual. Can’t we wait to appoint a special prosecutor until there’s at least some possibility of underlying illegal behavior?
The constant hammering on demonstrably false or outright wrong “facts” from quite an embarrassing many on the right is what has really turned me off of the GOP and right wing commentary over the last year or so. We need honest political debate in this country right now, not attacks built on misinformation or lies designed purely to score political points with a dwindling base. I thought the Republican Party was on something of an upswing this year, but clearly it’s still just thrashing about in death throes. Any success this November might be the worst possible thing for the long-term viability of the GOP brand and influence.
by David Roberts.
Trevor Houser is a green energy wonk’s green energy wonk. In the last few years, he has produced, among other things, congressional testimony on greening the stimulus bill, an astute take on the market failures around energy efficiency in buildings (PDF), and a comprehensive assessment (PDF) of the Copenhagen Accord and the state of international climate negotiations. He also has a post on Grist taking on the CBO over jobs numbers.
Houser is the head of the Energy and Climate Practice at the Rhodium Group research consultancy and a visiting fellow at the Peterson Institute for International Economics, where last week he and his colleagues produced the first comprehensive assessment of “The Economic, Employment, Energy Security and Environmental Impact of Senator Kerry and Senator Lieberman’s Discussion Draft [of the American Power Act]” (PDF). It got some good press coverage (including a post from me), thanks in part to its rigor and in part to some intriguing conclusions.
I chatted with Houser about some of those conclusions, and about the features and flaws of the economic modeling that so dominates climate policy discussions. (Yes, it’s wonky.)
Q. How does your analysis differ from the ones we’ve seen from the Environmental Protection Agency (EPA), the Congressional Budget Office (CBO), and the Energy Information Administration (EIA)?
A. Our analysis is similar to the EIA’s, since we use their model, with one important exception. We treat the change in investment that comes from pricing carbon differently than they do.
EIA’s model, as well as EPA’s and others, assumes that over the lifetime of the program, changes in investment between clean energy power generation and fossil fuels will net out, so they don’t focus a lot of attention on quantifying the changes in investment that you see in a high-carbon vs. low-carbon future. In the U.S., those changes are pretty significant.
In an emerging economy like China or India, the choice is between, Do I build a new coal-fired power plant or do I build a windmill? In the U.S., the question is, Do I continue with a coal-powered energy plant (95 percent of which were built before 1987) or do I replace that coal fleet with low-carbon generation? This is slightly a U.S.-specific case, but when we model something like the American Power Act, we see a $20 billion average annual increase in power-sector investment, from a baseline of $18.5 billion to $41.1 billion. So we capture the employment impacts of that change in investment.
Q. Is that the main reason your analysis shows a net employment increase, which is different from what most models show?
A. Right. If an economy is operating at full employment—if we had 5 percent unemployment instead of 10—economic theory suggests the increase in investment would be inflationary. It would result in higher prices of goods, because you’d have competition for capital and labor, trying to draw them away from other industries. But that’s not the case; we’re at 10 percent unemployment.
So what’s most different about our study is we analyze the impact of energy and climate legislation on the U.S. given that we’re in recession. The conventional wisdom has been that we can’t afford to do this now because the economy is emerging from recession and unemployment’s still high. Our finding suggests the opposite: Energy and climate policy can have a stimulative impact on the U.S. economy in the first decade, albeit a modest one.
Q. How long is the U.S. expected to stay in recession? Are there official projections?
A. We use the projections from EIA, which come from the consulting firm Global Insight. They see a slow recovery in the U.S. economy and an even slower recovery in employment. We’re not staying at 10 percent for the next decade, but we don’t get back to 5.5 percent unemployment, which is what they see as full employment, until 2020.
Q. Over the years, environmentalists have charged that EIA’s model radically overestimates how much petroleum will be available (among other complaints). Do you share any of these familiar criticisms of models like EIA’s?
A. Long term, there are a bunch of problems with all models. They all fall short in their presentation of reality for different reasons. Their robustness in capturing long-term global petroleum supplies we felt was less of an issue for this analysis because we’re looking at the relation between the policy and the baseline, particularly in the next decade or so.
Long-term oil supply and oil prices that EIA projects currently are not terribly different from what the International Energy Agency forecasts—fairly tight global oil markets. There doesn’t seem to be a ready alternative in terms of a modeling framework if you have a different point of view about long-term crude oil supplies.
Q. Another familiar criticism of typical macroeconomic models is that they don’t do a very good job of capturing the benefits of energy efficiency. Did you do anything in your analysis to try and compensate for that?
A. CGE [computable general equilibrium] models—the equilibrium models that EPA uses, for example—do the poorest job of capturing the potential of energy efficiency. They assume that investment is naturally flowing to its most productive use. NEMS [National Energy Modeling System], the EIA’s model, is a little bit different. It’s an engineering model, so you can actually change the efficiency of different types of technologies through codes and you can see the resulting change in energy prices and how that mitigates the impact for consumers.
What it still doesn’t capture is if investment in energy efficiency is providing a higher rate of return than an investment in other sectors of the economy, what that does to long-term growth in the capital stock—you have investors making more money, which they can then reinvest in other parts of the economy. So that part we weren’t able to capture.
We did model transportation efficiency provisions in the bill, the building codes that Sens. Kerry and Lieberman have indicated will be brought over from the ACELA bill out of the Senate Energy Committee, and the use of allowance revenue for investments in commercial and residential building efficiency. That does important work in terms of mitigating the price impact on consumers. But the broader fact you’re talking about—the kind of change in the productivity of investment—we don’t capture.
Q. One of the most surprising outcomes of your analysis—Michael Levi commented on this—is the large percentage of new employment in the next 10 years that comes in the nuclear sector. What explains that?
A. There two things, primarily. The first is that we see more deployment of renewables than anything else between 2011 and 2030. There’s 106 GW of renewable capacity, driven entirely by the cap.
Only 24 GW of that is additional above business as usual because our business as usual includes the [American Recovery and Investment Act]. In the EIA analysis of the stimulus bill, you get pretty healthy increases in renewable energy out to 2020. So between now and 2020, which is the window in which we asses the jobs impact in detail, you don’t have much renewable energy growth above the baseline (although you have very aggressive renewable energy growth). The baseline assumes that stimulus provisions are successful in deploying fairly large amounts of wind power and solar power.
Q. So there are renewables jobs, they are just already incorporated into the baseline.
A. Correct.
The second thing is that our modeling shows pretty big nuclear capacity deployment—78 GW of nuclear over the next two decades, and 68 is additional to business as usual. That’s for a couple reasons. First, there’s the capital cost assumptions around nuclear power that EIA uses. There’s a lot of debate about what the right capital cost of nuclear power is. We don’t have a lot of good reference points.
We used the 2009 version of the Annual Energy Outlook. Two weeks ago, EIA released the 2010 version. We didn’t have time to run the model on that full version, but the one thing we ported in was its capital costs, because they had made a significant revision in nuclear power costs—16 percent revision in the capital costs of nuclear, upwards relative to 2009. Even with that, you still see a lot of nuclear power, in part because of an increase in loan guarantees of $36 billion and a 10 percent investment tax credit for nuclear power out to 2025. There’s a lot of nuclear incentives in the legislation.
Now, things the model doesn’t capture could very well slow the deployment of nuclear power—for instance, supply-chain restraints for labor or equipment. That’s not something the model’s equipped to capture. We’re going to do some alternative scenarios in the next couple weeks where we put exogenous constraints on nuclear deployment.
There are a lot of assumptions in the EIA model that we don’t think are correct. EIA’s model is very public and frequently reviewed; the assumptions are hotly debated. We decided on our first cut to just use the EIA’s assumptions, with the exception of the treatment of employment because we thought that was a pretty glaring shortfall given current underemployment. But we didn’t want to make selective changes to cost assumptions in the code.
In subsequent analysis we’re going to do that. There are big capacity additions in our analysis from nuclear and CCS. But there are uncertainties about both of those, in many ways greater than the uncertainties surrounding efficiency and renewables. They will have a big impact on carbon prices, electricity prices, rates of deployment, and overall employment.
Q. If it turns out nuclear and CCS are more expensive and deployment is more limited than reflected in the current analysis, what’s the effect?
A. You see more renewables, a higher carbon price, and an increase in international offsets.
Q. You said you’re going to do another round of modeling, suggesting ways the bill could be improved. Can you give us any kind of preview of that?
A. We’re still in the midst of all of that, so I don’t want to speak out of school too much. The one thing I’d give a nod to is: If employment creation is a policy priority, there are a number of things the drafters of legislation can do that will significantly improve the jobs outcomes relative to what we see with the current draft. Most important is how allowance revenue is used to offset the impact to affected consumers and affected businesses.
In the early years, the primary mechanism for offsetting the impact to affected consumers is free allocation to LDCs [local distribution companies], which is supposed to be used for the benefit of ratepayers. Assuming that it is in fact used for the benefit of ratepayers, that prevents some improvement in energy efficiency that you would otherwise see. Consumers aren’t seeing higher prices, which increases the overall economic cost of the program.
If your focus is on employment, remember, a significant amount of allowance revenue is going for commercial and industrial sales from LDCs. If you use that allowance revenue for a rebate of the payroll tax, you create a significant incentive for employment that would offset the impact of higher energy prices—through wages, not through a check to consumers.
Those are some of the tradeoffs that we’re going to explore. We’re going to look at ways the bill could be more successful in addressing energy-security concerns and discuss some of the issues surrounding the long-term environmental integrity of the legislation given where the price collar is.
Q. I hope you make the point that there’s much more efficiency to be had.
A. Right. What is really shocking to me, if you look at our results, is how little overall energy demand is reduced. It’s reduced 5 percent below business as usual by 2030. That’s because the barriers to energy efficiency are non-economic barriers, so adding another 5 percent to electricity prices is not going to make the average household run out and buy a more efficient air conditioner. What that means is, there’s economic loss there—you’re forcing the power sector to make investments that have 10-year payoffs instead of households making investments that have three-year payoffs, because of those market barriers. So yeah, we will certainly focus quite a bit on that in the forthcoming work.
Q. Thanks to the influence of the Cantwell-Collins cap-and-dividend system, more allowance revenue is being directly rebated in the Senate bill than in the House bill. For the most part that money got taken from the weakest lobbies, generally renewable energy and energy efficiency. What’s the macroeconomic effect of that?
A. I don’t have the answer for you now, but that’s something we’re looking at. I think the core point is probably right. As a good economist, I should be ecstatic about something like the CLEAR Act. It puts a simple price on carbon and rebates it to consumers.
The problem is, the energy space if rife with market failures, so an economically optimal policy needs to do two things in addition to pricing carbon. It needs to take care of efficiency-market failures, which are at the left hand of the cost curve—the stuff we’re not taking advantage of even though it’s profitable today. And it needs to deal with R&D for the stuff at the right hand of the cost curve, so that when carbon prices get up to $80, $100 a ton, we have mitigation options like CCS or advanced vehicles that the private sector is not necessarily going to be able to deliver.
Whether or not the American Power Act gets the balance right is a separate question, but I think it’s important that any piece of [climate] legislation have those complementary measures in them.
Q. But that increases the page length!
A. Our litmus test for legislation that will fundamentally alter the behavior of the U.S. energy sector—a $2.2 trillion part of the U.S. economy—for the next 40 years is whether or not it can be kept under 100 pages?
Q. It gets lost in the debate that in the House bill, ACES, the bottom 20 percent of the income scale came out ahead.
A. The problem is that our frame is, how low can we get household expenditures? If households—- the middle 50 percent of U.S. households, not the lowest deciles—are not willing to pay an extra $100 to $200 a year in higher energy prices on top of the already $5,000 to $7,000 a year they pay, then we just can’t get this thing done. Trying to minimize that number to zero is a losing strategy. Paying $100 to $200 extra a year now is going to allow us to make investments that prevent us from paying $600 to $1,200 three decades from now.
Q. EPA is analyzing the bill now. Any chance they’ve been in contact with you? Any indication your approach might be making headway?
A. EPA can’t use our approach—a full employment model by definition can’t really account for the impact of an increase in investment during a recession.
Q. That’s just dumb, though. Is it not just dumb?
A. EPA would probably say that 200,000 jobs in a 135 million employee labor force is noise, which is not the politically astute answer but is the economically correct answer. Their model is there to look at 50-year trends. It’s not supposed to be a near-term macroeconomic model.
I think CBO will look at this. I don’t know whether they will do it quantitatively or just qualitatively, but I think they will explore changes in investment. In the past they’ve always assumed no change in GDP or employment when they model the bill. But they recently put out a literature review of studies that look at the employment impacts of pricing carbon, which suggest they are ready to wade into this debate.
EIA has a work item on this, on how to better capture changes in investment in the power sector. It’s coming up with a methodology for doing it that’s robust … it’s taken them a little bit of time. But they’re looking at this approach as well.
Q. One more nerdy question?
A. Dave, I learned what I know about CBO scoring from you, so the nerdier the better.
Q. Under traditional full-employment models, if government takes money out of one part of the economy and put it back in another part, it reduces economic efficiency and incurs transaction costs. According to these models, government literally can’t act without creating a drag on the economy.
A. Always. By design.
Q. One way of getting around that is your way, which is by taking into account recession. Is anybody out there challenging it more directly, by arguing that in some circumstances it is possible to determine that the economy is not deploying resources efficiently and correct that with tax and regulatory policies?
A. There’s four areas. First is what the energy-efficiency literature focuses on, a whole category of market failures. The second is regulatory reform. There’s some work on RES’s [renewable energy standards] in the West that show net-worth enhancement because the RES forced reform of utility monopolies in a way that was welfare enhancing. The third is infrastructure investment.
The fourth one is R&D. There’s a lot of literature on the welfare-enhancing benefits of R&D, because over the long term, you can only grow your economy in three ways: you pile on capital, you pile on labor, you change technology. Nothing else you can do. Those first two variables are somewhat fixed, barring immigration policy changes. So it comes down to technological change. That’s the hardest to quantify but potentially most powerful economic impact of pricing carbon and all the complementary polices that come along with it: Does it force innovation? It’s a really tough thing to model.
If you can’t improve the model, then you need to be very upfront about its shortcomings. That was the biggest weakness of the CBO report on employment. I understand the weaknesses of our existing models in capturing some of these employment effects, but people who don’t work with models don’t understand how frail they are. They think they are definitive answers on what the economy will look like in 20 years. They think models are science, when they are tools for evaluating possible scenarios, and flawed tools at best.
Stronger, more upfront statements about what models can do and can’t do should be on all of these reports right up at the top. The press will grab what the press will grab, but a clear acknowledgement of the shortcomings of models would be useful.
Related Links:
Michigan: Where U.S. clean energy, emissions, efficiency policy really counts
How utilities plan to continue evading toxic air pollution controls
Coal: Good News, and An Opportunity for More
Below are links to news stories of interest from newspapers that came up during a search today. These links were active at the time of this e-mail, but should you want to save a story, printing it or cutting and pasting the entire article and saving it to your computer is recommended
Suburban school funding threatened by failure to pass cigarette tax increase Chicago Tribune – Suburban school districts already strapped for cash are bracing for major state funding cuts unless lawmakers raise …
Cigarette tax unlikely to pass House, perhaps leaving schools without funds
Decatur Herald and Review – Local schools could face big cuts to the money they use for the operation of buses and special education programs unless lawmakers vote to raise cigarette taxes by $1 a pack. That move was unlikely, though. The Illinois Senate approved a cigarette tax hike more than a year ago, but since then, House lawmakers haven’t shown much interest in doing the same.
Illinois school reform efforts get more backing from districts, unions
Chicago Tribune – Race to the Top grants, the Illinois State Board of Education reported Wednesday. It’s unknown whether that will demonstrate enough support to win $400 million in the federal contest, at a time when Illinois schools face a backlog of unpaid bills and threatened budget cuts. “We’ve been told the expectation is not 100 percent of all districts,” said state Superintendent Christopher Koch.
Area school districts sign up for federal funding
Effingham Daily News – A few area school districts have changed their stance and are signing up for a national race to secure federal funding for education reform, however other school districts are still leery of a program that hasn’t even been tested. Illinois finished fifth in the first round of applications, and the Illinois State Board of Education has asked school
Kane school districts apply for Race to the Top federal grants
Geneva Kane County Chronicle – School districts in central Kane County are seeking to share in $400 million that the state hopes to receive in the next round of Race to the Top federal grants. Batavia, Geneva and Kaneland school districts all have signed memorandums of understanding as part of the state’s effort to capture federal funds to be used
District 118 to recall 28 teachers
Danville Commercial-News – “We’re absolutely thrilled.” That was the response of Danville Education Association President Robin Twidwell following Wednesday’s announcement 28 full-time staff would be called back for next school year.
U-46 teachers approve one-year contract deal
Chicago Daily Herald – Elgin Area School District U-46 teachers voted to accept a one-year deal that would leave salaries flat and increase class sizes, officials announced Wednesday. Elgin teachers Association President Tim Davis said roughly 66 percent
ETA approves contract with School District U46
Elgin Courier – is signed by the governor, it doesn’t guarantee more U46 employees will be recalled. The reason, he said, is that the state is behind on payments from this school year and it could cut education funding for next school year. The district is facing a deficit of almost $50 million next school year that includes a shortage of more than $29 million in overdue funding from the state.
Teachers to get raises in new School District 113 contract
Highland Park News – Park high schools can expect salaries to go up 1 percent next school year and 2.7 percent the year after that. Those are the key financial terms of a contract inked between the School Board and teachers association May 17. The two-year contract roughly ties salary increases to the consumer price index, which typically determines the rate at which districts like High School District 113
District 120 staff inks new contract
Mundelein Review – After 18 months of negotiations, the certified staff of the Mundelein Consolidated High School District 120 have a new contract. School District 120 and the Mundelein Education Association reached a collective bargaining contract agreement on May 18. The three-year contract is retroactive to July 1, 2009 and will extend to June 30, 2012.
Unit 5 late start proposal on some days advances
Bloomington Pantagraph – a year moved forward at Wednesday’s school board meeting. The school board directed Superintendent Gary Niehaus, administrators and two designated board members to meet with the Unit Five Education Association to discuss a professional-development plan. Among other things, the plan would set aside time at the start of those days for teachers to work together on ways to improve instruct
Superintendents seeking right fit leads to high turnover
Crystal Lake Northwest Herald – for someone to move up and move on. … This probably is the way it’s going to be until we’re a bigger district.” The district pays Gildea $143,767 annually, including the teachers’ retirement contribution. Sharma-Lewis will make between $100,000 and $110,000, Amettis has said. Money isn’t the only variable when superintendents seek a move.
Unit 5 lays out gloomy budget scenarios
Bloomington Pantagraph – which was quickly dismissed by the board, to various borrowing options and spending cuts. All scenarios, however, depend on what the state decides regarding education funding as it battles a $13 billion deficit. “The uncertainty continues, unfortunately,” Smith said. While state funding isn’t settled yet, some school officials counseled
Ill. House OKs borrowing billions in emergency budget plan
Crains Chicago Business – which already face a huge shortfall, billions in lost revenue. Executives say they would have to sell assets to keep delivering monthly pension checks to retired state workers, downstate teachers, university employees and more. The borrowing plan initially failed, getting 70 of the 71 votes it needed. But the governor and legislative leaders leaped into action
Illinois Senate unlikely to finish by deadline Chicago Tribune (blog) – Pat Quinn broad budget powers that would allow him to dole out money to state agencies as he sees fit. Historically lawmakers were in charge of setting …
State budget still not foregone conclusion The Illinois Senate will take its stab at wrapping up a new state budget Thursday, but the results are anything but a foregone conclusion.
Illinois Policy Institute: Where are the cuts? Illinois Policy Institute blog – A measly 1.5 percent reduction from last year’s spending levels is a far, far cry from the bold steps needed to balance this budget and prevent future structural deficits from piling up.
Madigan still not committing to a tax increase for Illinois Illinois House Speaker Michael Madigan said any future tax increase for Illinois hinges on the state’s weak revenues and how effectively Gov. Pat Quinn uses his emergency budget powers to cut spending.
Ill. budget proposal raises complex questions The Associated Press – Democratic legislators are on the verge of passing a state budget that would patch over a $13 billion deficit. …
Ill. House OKs borrowing billions in emergency budget plan
Crains Chicago Business – systems, which already face a huge shortfall, billions in lost revenue. Executives say they would have to sell assets to keep delivering monthly pension checks to retired state workers, downstate teachers, university employees and more. The borrowing plan initially failed, getting 70 of the 71 votes it needed. But the governor and legislative leaders leaped into action, looking for lawmakers
Jury’s out on whether budget borrowing will hurt incumbents in fall elections
Decatur Herald and Review – This year’s piecemeal state budget plan could mean problems for incumbents running for re-election in November, some lawmakers said. The proposed spending blueprint relies on $3.7 billion in borrowing to pay down pension obligations, which Democratic lawmakers contend was the only viable option on the table. Delaying payments could increase the state’s deficit,
Quinn will wait on pension bill; UI will wait on borrowing, too Champaign/Urbana News-Gazette (blog) – Pat Quinn says he will act on a bill allowing public universities to borrow money to cover a state funding shortfall after he signs a state pension …
Area reps decry House vote to borrow $3.7 billion for state pensions
Crystal Lake Northwest Herald – Illinois House approval to borrow billions of dollars to make state pension payments left McHenry County-area lawmakers reeling – but also hopeful that the state Senate would reject the borrowing measure. State House members voted, 71-44, on Tuesday to borrow $3.7 billion to make the state’s annual contribution to troubled government pension systems.
Back-to-school sales-tax holiday passes Illinois House
Chicago Sun Times – Gov. Quinn’s bid to impose a sales-tax holiday passed the Illinois House today despite criticism from Republicans that the cash-strapped state government can’t afford it.
Video poker bill goes to Quinn Chicago Tribune – ?A controversial video poker bill that state gambling regulators fear will allow operators of illegal machines to stay in business throughout the state was …
Senate rejects Quinn’s veto of convention bill Chicago Tribune – ? Pat Quinn a sound defeat by rejecting his veto of legislation designed to cut costs at Chicago’s McCormick Place convention center. …
You Wouldn’t Want to Live in the Governor’s Mansion, Either NBC Chicago (blog) The Illinois Executive Mansion is a beautiful Italiante home. Built in the mid-19th Century, it has an iron gate, a curved driveway, a manicured lawn. Inside, it’s full of elaborate draperies, gilded wallpaper, Lincoln portraits and curving staircases.
Blagojevich faces fight of his life
Chicago Daily Herald – were investigating patronage hiring and reports that money management firms were being squeezed to come up with payoffs and campaign cash if they wanted the lucrative business of investing state teachers pension money. Blagojevich’s relationship with Dick Mell, his father-in-law, also had soured. Mell had made an explosive claim that a Blagojevich adviser was arranging state appointments
Blago’s team: Judge mishandled potential jurors
WLS Chicago – Lawyers for former governor Rod Blagojevich want to restart the jury selection process for his upcoming trial. They claim the judge mishandled it and they want the start of the trial to be delayed. They filed a motion in court Tuesday saying the judge made a mistake by dismissing dozens of potential jurors for hardship reasons without consulting attorneys on either side.
Clock ticking on 100,000 teachers’ jobs – Washington Post
WMAQ-TV (MSNBC ) Chicago – plan relatively few layoffs but are squeezing costs, with Fairfax County scrapping most summer school, for example, and Montgomery County increasing class sizes in elementary grades. The National Education Association, the largest teachers union, said Wednesday that it is funding TV ads in markets that are home to potential swing votes among House Democrats.
French unions strike to keep right to retire at 60
Belleville News-Democrat -Aviation authorities expected flights at Paris’ Charles de Gaulle to be reduced by 10 percent and those at Orly airport by 30 percent because of the strikes. About 14 percent of teachers nationwide were on strike, and about 8 percent of hospital workers. The French government, which had long danced around the retirement age issue, has been increasingly bold in recent
Who’s to Blame for the Gulf Oil Spill?
Bush’s petro-bias soiled the regulatory agency, but Obama’s lack of oversight hasn’t helped
Confidence Game: Can the Markets Learn to Live With Fear?
The markets are plunging again, but it has little to do with real-world economic conditions
Gaza Aid Convoy Showdown Poses a New Challenge for Israel
The Obama Administration has finally gotten the Israelis and Palestinians talking about peace, but they’re avoiding talking about Gaza
Idol Watch: Lee DeWyze Wins, Simon Cowell Departs
Let’s get the unimportant stuff out of the way first: Lee DeWyze won American Idol, and Crystal Bowersox lost.
A Sestak Offer? Criminally Stupid, Not Criminal
Why would the White House try to coax Joe Sestak out of the Senatorial race? Beats me
Effort to plug well ‘proceeding as we planned’
The “top kill” is underway, success uncertain. BP engineers are pumping mud at a furious rate into the damaged blowout preventer that sits on the uncapped well at the bottom of the Gulf of Mexico. The hazardous-but-high-reward maneuver comes five weeks into the oil spill crisis amid an intensifyi…
(By Joel Achenbach, The Washington Post)
Black death has just begun to take its toll on animals
ON BARATARIA BAY, LA. — In the Louisiana marsh, oil-coated pelicans flap their wings in a futile attempt to dry them. A shorebird repeatedly dunks its face in a puddle, unable to wash off. Lines of dead jellyfish float in the gulf, traces of oil visible in their clear “bells.”
(By Juliet Eilperin and David A. Fahrenthold, The Washington Post)
Iraq exit will be on time, Biden says
President Obama called Iraq his predecessor’s war of choice. Now it is his war to exit — and quickly.
(By Scott Wilson, The Washington Post)
‘American Idol’ underdog Lee DeWyze steals the show in Simon’s swan song
Texting tweener chicks and perimenopausal women, having not yet slaked their thirst for Super-Safe Rocker Boys, added Lee DeWyze to the list of “American Idol” winners Wednesday night, beating early front-runner Crystal Bowersox of the dreadlocks and comb microphone-stand/bong.
(By Lisa de Moraes, The Washington Post)
Pyongyang tests U.S. ‘patience’
Obama administration officials have dubbed their policy toward North Korea “strategic patience” — a resolve that Pyongyang has to make the first move to reengage and that it won’t be granted any concessions.
(By Glenn Kessler, The Washington Post)
waxing \WAK-sing\, verb:
1. To increase in extent, quantity, intensity or power.
2. (Of the moon) to increase in the extent of its illuminated portion before the full moon.
3. To grow or become.
2010 GMC Terrain Albert Einstein ad
A law suit was filed in U.S. District Court in California last week by the Hebrew University of Jerusalem accusing GM of fraudulent use of Albert Einstein’s likeness. GM had used Einstein’s image in its ad campaign for the GMC Terrain. This is yet another marketing faux-pas for GM, which came under fire for a commercial in which Ed Whitacre was accused of exaggerating the truth with regard to the repayment of GM’s federal loans.
GM recently hired a new ad guru, and changed ad agencies twice so far in recent months for the Chevrolet brand. According to a spokeswoman for the company, the right to use the image for the as was acquired from a ‘reputable’ firm which guarantees the rights that it sells to clients. The firm is as of yet unnamed.
GreenLight Productions LLC, the university’s licensing agent, supervises the licensing rights to Einstein’s likeness, as well as those of many car brands, including Saab. Hebrew University asked a federal judge to stop GM from using Einstein’s likeness in a way that suggests the late physicist and the university in any way endorse the company’s vehicles.
– By: Stephen Calogera
Source: Detroit News
Today our Fox News team was invited to climb aboard an incredible aviation invention known as the “Osprey” during Fleet Week celebration here in New York City. The Osprey, or V-22 as it’s known, takes off and lands like a helicopter, but flies like a plane with it’s tilt-rotor design. The combat aircraft is being used currently by the U.S. Marine Corp. in the mountains of Afghanistan, has been used in the deserts of Iraq, and was also utilized to lift aid and resources to Haiti, which required fast in and out humanitarian missions. The V-22 is being used by The U.S. Air Force as well.
There has been a bit of controversy surrounding the production and use of this aircraft. There have been several crashes, some of them deadly, and the costs to build the V-22s skyrocketed and nearly derailed the program.
But engineers and designers pressed on. The Osprey can be extremely effective in military combat, because of its speed and sound, and many Marine Corp. pilots will tell you, it’s speed and capabilities are tough to beat. The Osprey gives Marine Corp. Air Ground Task Force troops increased flexibility and reach that you just couldn’t get with the CH-46 helicopters, which are being phased out of combat service. Usually, you can hear a helicopter coming from a mile away but since the Osprey can fly high like a plane, it can get closer to a target without being heard. It can then convert to a helicopter type craft, and lower down, getting troops in place and ready to engage, giving the enemy little time to react.
Our team today included Fox News producer Mike Sorrentino, cameraman Tommy Chiu, and audio technician Melvin Davis. After a short briefing, (and a lot of anticipation with the weather that stalled our departure) we watched the Osprey come in for a landing at the Downtown Manhattan Heliport. All of us were craning our necks around the building waiting to get our first glimpse of the hovering beast that looked like a U.F.O. when it finally appeared and slowly sank down out of the gray sky in front of us.
After loading into the back ramp that was lowered down like a shipping dock, we got into positions wearing our helmets, goggles and life vests. We strapped into our jump seats and waited to feel the movement of takeoff. At first, it was a nice familiar feeling of lifting up and off, watching the helipad become smaller and smaller out of the big gaping hole that was our window. But when the tilt-rotor blades lowered down from helicopter mode into turbo prop mode (which happens in 12 seconds flat), it was like being in a Corvette when someone puts the pedal to the metal. The g-force was amazing and sudden, and I think all of us felt like little kids on a roller coaster ride for a few minutes. Then, looking out the back hatch (that yes, remains open during flight) we could see the horizon turn from horizontal to vertical … a view of water turned to sky. It was fast pitching movement, that most (hopefully) don’t experience while on a plane.
The V-22 can fly twice as fast as the CH-46 helicopter it’s replacing, can carry 3 times the payload, and fly 5 times the range. Another cool thing, with the Osprey’s vertical takeoff and landing capabilities, pilots never need a runway!
“How will we remember the 2000s? What were the high and low points? Who were the heroes and villains?” William Saletan asked in a Slate article last week.
Do you remember when Senator Joe Lieberman voted to convict President Clinton at his impeachment trial, when President George W. Bush chilled at his Texas ranch with Roger Clemens while Hurricane Katrina destroyed New Orleans, and when Hillary Clinton used Jeremiah Wright in a 2008 TV attack ad against Barack Obama?
You shouldn’t remember any of these things, because they didn’t happen. But Slate made pictures to use as evidence that these events did actually occur as an exercise in “altering political memories.” Slate mixed doctored photos of these fake events with other photos of real ones, and asked the readers which they remembered. The readers had no idea they were part on an experiment in memory hacking.
More people remembered the real ones, Slate reports:
In the first three days the experiment was posted, 5,279 subjects participated. All of the true incidents outscored the false ones. Our subjects were more likely to remember seeing Powell’s Iraq presentation (75 percent), Katherine Harris presiding over the Florida recount (67 percent), or Tom DeLay leading the congressional effort to save Schiavo (50 percent) than any of the five fake scenes.
But people remembered the fakes too. A fake screenshot of the Hillary Clinton ad, for example, fooled 36 percent of readers into thinking it had actually happened. “At that time I was backing Hillary for President. I didn’t like it that she used this rather sleazy ad, but her campaign did remove it,” one respondent said.
The stunt paid homage to memory research; a series of articles on Elizabeth Loftus‘ human memory research at the University of California at Irvine will follow. Slate meant to show the power of images in producing false memories. Besides quoting George Orwell, they also mentioned a 2002 experiment that, with a little Photoshop magic, fooled 10 out of 20 college students into believing they had gone up in hot-air balloons as children.
Related content:
80beats: Lasers Write False, Fearful Memories into the Brains of Flies
80beats: Neuroscientist Says Torture Produces False Memories and Bad Intel
DISCOVER: Are Recovered Memories Real?
DISCOVER: How Much of Your Memory Is True?
Image: flickr / Nrbelex
For the second in her Broadband series, Deb Rau from the Marshall Independent focused on broadband options available in the area. Cable (first in the form of Prairiewave, now Knology) has been a big players in towns such as Tracy.
I love the look back in her article…
“Before that [cable], there was dial-up. It was 56 kilobits per second, if you could get it,” said David Spencer, finance director for the city of Tracy, and a local resident. Getting a telecommunications hookup in town was “very big, not just for the Internet, but for telephones and cable television too.”
Remember when you had to convince an Internet service provider to bring dialup to your area? I was one of the people you called if you wanted MRNet to come to your town. I remember getting the calls and I remember visiting areas where the Internet was a long distance phone call. It wasn’t that long ago.
The article recognizes the expense of bringing infrastructure to rural areas where the population density is lower, which means fewer customers per mile, which in turn means you have to cover more miles. But that being said, local providers in the area have talked about customer base tripling in the last 5 years.
Cable isn’t the only option, wireless is mentioned too…
Some groups have opted to pursue alternatives to cable-based Internet in southwest Minnesota, however. About four years ago, the Southwest/West Central Service Cooperative invested in a system of microwave wireless towers to provide high-speed Internet to a total of 31 school districts in the region. Minnesota Valley Television also uses a wireless network to bring Internet service to rural areas.
The MVTV wireless network was another good option for Tracy.
MVTV received ARRA funding so their area is about to expand. They weren’t the only providers in Southwest Minnesota to receive funding. The Southwest Minnesota Broadband Group has received moved to deploy fiber – but maybe I’m getting ahead of the Marshall series on broadband.
I cannot overstate the significance of this news. French artist Nils Guadagnin has done the semi-possible: He’s recreated the hoverboard from Back to the Future II. And it totally works…so long as no one stands on it. More »
Future – Visual Arts – Predictions – Twitter – Hill Valley
Back in February when Google released Buzz for mobile, only folks with Android 2.0 or higher and the iPhone could use it. Today the Google Mobile Blog announced that the Buzz website has been re-written, and now any mobile browser that can read and render XHTML. Open your browser and surf to buzz.google.com and sign in with your Google account. Not sure if this is enough to make Buzz more popular, but it certainly can’t hurt. To check it out, I was forced to fire up the browser on my venerable Blackberry 8830 WE. As you can see above, it’s not too shabby — but like everything else, looks much better on the Android browser. Nice work Google [Google Mobile Blog]
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