Quotulatiousness

September 10, 2019

We’ve noticed this too…

Filed under: Bureaucracy, Business, Government, Health, USA — Tags: , , , — Nicholas @ 03:00

Sarah Hoyt on the increasing “green-ness” of her appliances — and the increasing uselessness of same:

For years we got expensive front loaders, and yet our clothes kept smelling, there were stains that would not come out, and these things seemed to last only 5 years, on the outside. And I knew it wasn’t our problem, as such, because at the same time we started noticing we couldn’t get our clothes clean, the detergent aisle of the supermarket sprouted an entire section of odor removing things, Febreeze got added to detergents, and, in general, people smelled odd …

Then the washer broke while we were also very, very broke (we were paying mortgage and rent in the run up to buying this. I saw an ad for, I THINK a $300 washer, and we went to look. What we found, instead, was a $200, not advertised washer. As we’re looking at it the saleswoman hurries over and tells us we don’t want it. This washer, she says, uses lots of water. For those who don’t know I suffer from an unusual form of eczema. While it’s triggered mostly by stress with a side of carbs, it can also, out of the blue, take offense at a slight trace of detergent left on the clothes. I’ve found that the eczema got markedly worse the less water the washer used. And it required me to run the washer three times, once with soap and two without to avoid major outbreaks. The idea of using lots and lots of water was great, so I was all excited. Which shocked the poor saleswoman halfway to death. I will point out, though, though that this washer washes well enough I can get away with only one extra rinse cycle and if I forget it it’s usually survivable. Also, our clothes don’t smell. Unfortunately, we’ve not found that [type] of washer any of the times we’ve walked through the appliance aisle, so I think that choice has been eliminated.

Certainly the choice of dishwashers that use “lots” (i.e. what they used 20 years ago) of water and electricity was never offered to us. And since we seemed to have really lousy luck with dishwashers, I found every time we replaced one over the last 20 years, they had less space for dishes (more insulation, to allow for less electricity) to the point that I needed to do 3 or even 4 loads for a family of four. I mean, I cook from scratch, but I really don’t use that much stuff. And it ran slower than before. Right now our dishwasher actually washes (a bonus) but it takes four hours to run a cycle. I rarely do more than one wash a day, though, because it’s just Dan and I, and we … well … the kids used a lot more glasses and little plates, and frankly meals get more complicated for four people.

All the same, there was a time there, for like 10 years, where we were running all this “green” approved stuff, and not only was I running the washer and drier more or less continuously, but to make things more “interesting” I was using MORE water and electricity, in the sense that I was running the appliances a ton more.

This of course is what I also found with the “low flush” toilets. We had them in our previous house, and we found that we spent an inordinate amount of time flushing the toilet. Also, since it took four or five flushes to do the job or one, the fact we were actually only using half the water per flush didn’t save any water. We spent instead twice to three times the amount of water the “high flush” toilets had spent.

All this, btw, to appease Paul Ehrlich — the prophet of wrong. As in, if he foresees something it will be wrong — and his ridiculous idea we’d run out of potable water in 1978. Apparently none of these people have noticed that 1978 has come and gone with no problems. And as for electricity, if they stop their idiocy about nuclear, it’s not even a consideration. (And no, Chernobyl isn’t a caution about nuclear energy. It’s a caution about stupid communist regimes. They can’t run anything — not even a nuclear plant — without destroying it.)

Lightbulbs are another favourite … several years back, our provincial government was pushing us all to get rid of our old incandescent bulbs and replace them with these great new energy-efficient compact fluorescent bulbs. The new CFLs cost roughly ten times as much as the old bulbs, but we were assured up and down that they’d last twenty times longer, so we’d not only save money on electricity, but also have to replace the bulbs so infrequently. Of course, the CFL bulbs were pathetically bad — not only were they expensive, the light they gave was (at best) marginal and they didn’t even last as long as typical incandescent bulbs.

So now, of course, we’re being encouraged to use LED bulbs. Sure, they’re more expensive than the old incandescent bulbs, but they save on electricity and last many times longer! Except, of course, they don’t. The old incandescent bulbs in my office started to fail one after another, so when I was down to only one working bulb, I gave in and bought four replacement LED bulbs … they were on sale for only 2-3 times as much as the old bulbs! That was in March. I’ve already had to replace two of the LED bulbs. This is starting to feel familiar…

On the bright side (pun unintentional), the LED bulbs don’t provide the entertainment of a toxic waste cleanup in your home the way the CFL bulbs did when they were broken.

February 9, 2019

The price tag for Alexandria Ocasio-Cortez’s renewable energy dream

Filed under: Economics, Environment, Politics, USA — Tags: , — Nicholas @ 03:00

At Reason, Ronald Bailey looks at how much it would cost to implement Alexandria Ocasio-Cortez’s post-fossil-fuel plans:

There’s a lot to consider in this resolution, but let’s for the time being focus on the goal of “meeting 100 percent of the power demand in the United States through clean, renewable, and zero-emission energy sources” by 2030. The resolution is light on fiscal details, so let’s consider the question of how achieving this goal would cost.

As it happens, a team of Stanford engineers led by Mark Jacobson outlined just such a plan back in 2015. Jacobson’s repowering plan would involve installing 335,000 onshore wind turbines; 154,000 offshore wind turbines; 75 million residential photovoltaic systems; 2.75 million commercial photovoltaic systems; 46,000 utility-scale photovoltaic facilities; 3,600 concentrated solar power facilities with onsite heat storage; and an extensive array of underground thermal storage facilities.

Assuming steep declines in the costs of each form of renewable electric power generation, just running the electrical grid using only renewable power would still cost roughly $7 trillion by 2030. The Information Technology and Innovation Foundation calculated that the total cost of an earlier version of Jacobson’s scheme would amount to $13 trillion. And based on how fast it has taken to install energy generation infrastructure in the past, Jacobson’s repowering plan would require a sustained installation rate that is more than 14 times the U.S. average over the last 55 years and more than six times the peak rate.

The cost — $7 trillion — would be spent to save … how much?

    ..global warming at or above 2 degrees Celsius beyond preindustrialized levels will cause— (A) mass migration from the regions most affected by climate change; (B) more than $500,000,000,000 in lost annual economic output in the United States by the year 2100;

$500 billion a year isn’t a lot in the context of the US economy. It’s currently around $20 trillion in size, so we’re talking about 2.5% of the economy being lost. But of course we’re also predicting that the economy will grow between now and then. Actually, we think the US economy will be about $100 trillion a year by 2100. So we’re talking about 0.5% of that economy. Or about the change in size of the US economy between September and December last year. Think how much richer we did feel over those few months. And how much poorer we’d be if it hadn’t happened, that growth.

Oh, and to avoid that loss AOC is suggesting that we spend $7 trillion now? That just doesn’t pass the cost benefit test. It doesn’t even pass at the Stern Review’s special discount rate.

Which is, of course, what all the economists have been trying to tell us all about dealing with climate change. Don’t do it by central planning, do it by using market incentives. Have a carbon tax. Don’t try and do it too quickly – William Nordhaus gained his Nobel in part for saying this – but do it more gradually over time. Don’t junk what we’ve got that already works, instead when the normal time comes to replace it then make sure it’s non-carbon emitting. Finally, don’t do it the expensive way, do it the cheap way. For the cheaper we make it to solve it then the more of the problem we’ll solve. You know, humans usually doing less of the expensive things and more of the cheap?

January 27, 2019

Some reasons to be bearish on Tesla’s future

Filed under: Business, Media, Technology, USA — Tags: , , , , — Nicholas @ 05:00

At Coyote Blog, Warren Meyer climbs back onto one of his favourite hobby horses:

Yes, I am like an addict on Tesla but I find the company absolutely fascinating. Books and HBS case studies will be written on this saga some day (a couple are being written right now but seem to be headed for Musk hagiography rather than a real accounting ala business classics like Barbarians at the Gate or Bad Blood).

I still stand by my past thoughts here, where I predicted in advance of results that 3Q2018 was probably going to be Tesla’s high water mark, and explained the reasons why. I won’t go into them all. There are more than one. But I do want to give an update on one of them, which is the growth and investment story.

First, I want to explain that I have nothing against electric vehicles. I actually have solar panels on my roof and a deposit down on an EV, though it is months away from being available. What Tesla bulls don’t really understand about the short position on Tesla is that most of us don’t hate on the concept — I respect them for really bootstrapping the mass EV market into existence. If they were valued in the market at five or even ten billion dollars, you would not hear a peep out of me. But they are valued (depending on the day, it is a volatile stock) between $55 to $65 billion.

The difference in valuation is entirely due to the charisma and relentless promotion by the 21st century’s PT Barnum — Elon Musk. I used to get super excited by Musk as well, until two things happened. One, he committed what I consider outright fraud in bailing out friends and family by getting Tesla to buy out SolarCity when SolarCity was days or weeks from falling apart. And two, he started talking about things I know about and I realized he was totally full of sh*t. That is a common reaction from people I read about Musk — “I found him totally spellbinding until he was discussing something I am an expert in, and I then realized he was a fraud.”

Elon Musk spins great technology visions. Like Popular Mechanics magazine covers from the sixties and seventies (e.g. a flying RV! a mile long blimp will change logging!) he spins exciting visions that geeky males in particular resonate with. Long time readers will know I identify as one of this tribe — my most lamented two lost products in the marketplace are Omni Magazine and the Firefly TV series. So I see his appeal, but I have also seen his BS — something I think a lot more people have caught on to after his embarrassing Boring Company tunnel reveal.

November 4, 2018

That pesky Supreme court ruling on the Churchill Falls deal

Filed under: Cancon, Economics, Law — Tags: , , , — Nicholas @ 03:00

I use the term “pesky” in the headline to avoid being slagged by one or possibly even both of my Newfoundland and Labrador readers … to curry favour with them, I’d need to escalate from somewhere between “ethically doubtful” and “outrageous”, and even that might not capture the essence of anger and resentment at Quebec’s amazingly great deal long-term on cheap hydro-electric power from the Churchill Falls facility. It is, as Wikipedia says, “the second largest hydroelectric plant in North America, with an installed capacity of 5,428 MW”, and thanks to Quebec financing and astute negotiations, most of that output is sold to Quebec at a very small proportion of today’s open market price. Colby Cosh arches an eyebrow over a Supreme Court justice’s lone vote of dissent on the case:

Churchill Falls generating station, Labrador.
Photo via Wikimedia Commons.

It is my solemn duty to perform one of the important functions of a newspaper columnist: raising one questioning eyebrow. On Friday the Supreme Court issued a judgment in the long battle between Churchill Falls (Labrador) Corp., a subsidiary of Newfoundland and Labrador Hydro, and Hydro-Québec. CFLco is the legal owner of the notorious Churchill Falls Generating Station in the deep interior of Labrador, close to the border with Quebec.

The station was built between 1966 and 1971. Hydro-Québec provided backing when the financing proved difficult for the original owner, an energy exploration consortium called Brinco. This led to the signing of Canada’s most famous lopsided contract: a 1969 deal for Hydro-Québec to receive most of the plant’s output for the next 40 years at a quarter of a cent per kilowatt-hour, followed by 25 more years at one-fifth of a cent. The bargain ends in 2041, at which time CFLco will get full use and disposal of the station’s electricity back.

This has been a heck of a deal for Quebec. It took on the risk of financing and building the station in exchange for receiving the electricity at a low fixed price — one that both sides in the court case agree was reasonable at the time. But it meant that Newfoundland saw no benefit from decades of oil price shocks, from the end of nuke-plant construction in the U.S., or from the increasing market advantage hydroelectricity enjoys while dirtier forms of power generation attract eco-taxation.

It has been maddening for Newfoundland to remain poor while Hydro-Québec grows fat on the profits from a Newfoundland river. Quebec, for its part, has never been completely convinced of the legitimacy of its border with Labrador, and it sees its good fortune as a sort of angelic reward for having to be part of Confederation. The Churchill Falls deal is (quite reasonably) regarded as proof that Quebec’s homegrown industrialists were able to beat resource-exploiting Anglo financiers at their own game. There are thus reasons beyond the bottom line that Quebec has never wanted to renegotiate the Churchill Falls contract. But the bottom line is enough.

October 31, 2018

Premier Ford’s promise to lower electricity rates in Ontario

Filed under: Business, Cancon, Government — Tags: , , , , — Nicholas @ 05:00

In the Financial Post, Lawrence Solomon says Doug Ford can’t risk abandoning his promises about Ontario electricity costs, despite his cabinet’s worries about provincial reputation damage:

Ford has every reason to return the power system to some semblance of economic sanity. Ontario is now burdened by some of the highest power rates of any jurisdiction in North America, throwing households into energy poverty and forcing industries to close shop or move to the U.S. The biggest reason by far for the power sector’s dysfunction is its renewables, which account for just seven per cent of Ontario’s electricity output but consume 40 per cent of the above-market fees consumers are forced to provide. Cancelling those contracts would lower residential rates by a whopping 24 per cent, making good on Ford’s promise to aid consumers.

[…]

To date, Ford has stopped renewable developments that haven’t been completed, which will prevent things from getting worse, but he has failed to tear up the egregious contracts of completed developments, which will prevent things from getting better. Based on conversations that I and others have had with government officials, it appears that Ford is inclined to cancel the contracts and honour his signature promise, but he is being thwarted by cabinet colleagues who fear that Ontario’s reputation will take a hit in the business community if they don’t play nice.

Except, there’s nothing nice about betraying a promise to the voters who democratically put you in power in order to avoid pressure from lobby groups who think governments are entitled to hand out sweetheart deals to their favoured cronies. There’s also nothing democratic about it. It is an axiom of parliamentary government that “no government can bind another.”

Canadian governments, including Ontario governments, have in the past torn up odious contracts, including those in the energy sector. When they did, upon passing binding legislation, they were able to reset the terms, offering as little or as much compensation as they wished. Outraged business lobbies’ claims that the reputation of governments would be affected were not borne out. Moreover, such rightings of political wrongs serve the interest of small government and free markets, because businesses have always understood that there’s an inherent risk in contracting with governments that are able to unilaterally rewrite contracts. To overcome that inherent risk, businesses add a risk premium when getting in bed with government, helping to explain the rich contracts the renewables developers demanded. That risk premium acts to make business-to-business dealings more economic than business-to-government dealings.

October 5, 2018

A quick way for Doug Ford to reduce Ontario’s electrical rates

Filed under: Business, Cancon, Economics, Government — Tags: , , , — Nicholas @ 03:00

Ross McKitrick, Elmira Aliakbari and Ashley Stedman outline one of the fastest ways for the Ontario government to get Ontario electricity rates back down toward the national average:

The Ford government seems to want to repair Ontario’s electricity market. It recently moved to scrap the Green Energy Act and reportedly plans to eliminate or alter the so-called Fair Hydro Plan.

While these moves will mitigate future price increases, they won’t reduce current electricity prices. In fact, according to a Fraser Institute study being released today, to lower existing prices the government must reduce what’s known as the “Global Adjustment” — an extra charge on electricity. It won’t be easy, but reducing the global adjustment could bring down electricity prices by about 24 per cent.

This would be welcome news for Ontarians, as electricity prices increased 71 per cent from 2008 to 2016, far outpacing electricity-price growth in other provinces.

[…]

Between 2008 and 2017, the GA grew from less than one cent per kilowatt-hour (a common billing unit for energy) to about 10 cents, accounting for the entire increase in Ontario electricity commodity costs over that time. Therefore, the key to lowering power prices in Ontario is to reduce the GA.

In our study, we use reports published by the Ontario Energy Board to breakdown the GA to better understand where the money goes and provide specific recommendations on how to lower electricity prices. We found that the largest component of the GA charge — nearly 40 per cent — funds subsidies paid to renewable energy sources (wind, solar, etc.) under feed-in-tariff contracts, yet these sources only provide seven per cent of Ontario’s power output.

And notably, the GA provides almost 90 per cent of revenue earned by renewable generators, with only 10 per cent coming from actual power sales. This overwhelming reliance on government subsidies (paid by ratepayers) rather than actual electricity sales reveals how distorted the pricing structure has become in Ontario.

September 12, 2018

How Do Light Bulbs Work? | Earth Lab

Filed under: Technology — Tags: , , — Nicholas @ 02:00

BBC Earth Lab
Published on 1 Nov 2013

James May explains one of the most important inventions to modern life: the lightbulb.

“Subscribe to Earth Lab for more fascinating science videos – http://bit.ly/SubscribeToEarthLab

All the best Earth Lab videos http://bit.ly/EarthLabOriginals
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Here at BBC Earth Lab we answer all your curious questions about science in the world around you. If there’s a question you have that we haven’t yet answered or an experiment you’d like us to try let us know in the comments on any of our videos and it could be answered by one of our Earth Lab experts.

July 7, 2018

The bad economics of rooftop solar installations

Filed under: Business, Economics, Environment, Government — Tags: , , , — Nicholas @ 03:00

Norman Rogers points out where the numbers don’t add up for many jurisdictions’ domestic solar power schemes:

Photovoltaic panels on a roof, 28 April, 2015.
Photo by Antonio Chaves, via Wikimedia Commons.

A modest proposal:

We’ve all heard about “shop local” and “get your food from local farmers, not distant corporate farms.” Lots of people have apple trees in their backyards. Often they can’t begin to eat or give away all the apples. In the meantime, big supermarkets sell corporate apples for one dollar a pound and up. I propose that people with backyard apples be able to take them to the supermarket and sell them to the supermarket for the same price at which the supermarket is selling apples. Furthermore, they should be able to take them at any time and receive payment. If the store gets too many local apples, it can reduce its purchase of corporate apples.

My apple proposal may seem ill advised, but that is exactly how rooftop solar power works. The homeowner gets to displace power from the power company, and if the homeowner has more power than he needs, the power company is obligated to purchase it, often for the same retail price at which it sells electricity. That policy is called net metering. In order to accommodate the homeowner’s electric power, the utility has to throttle down some other power plant that produces power at a lower wholesale price.

The exact arrangements for accepting rooftop solar vary by jurisdiction. In some places, net metering is restricted in one way or another.

A large-scale natural gas-generating plant can supply electricity for around 6 cents per kilowatt-hour. Rooftop solar electricity costs, without subsidies, around 30 cents per kilowatt-hour, or five times as much. Average retail rates for electricity in most places are between 8 cents and 16 cents per kilowatt-hour. Yet, paradoxically, the homeowner can often reduce this electric bill by installing rooftop solar.

It is actually worse than forcing the power company to take 30-cent electricity that it could get from a natural gas plant for 6 cents. When the company throttles down a natural gas plant to make room for rooftop electricity, it is not saving six cents, because it already has paid for the gas plant. All it saves is the marginal fuel that is saved when the plant is throttled down to make room for the rooftop electricity. The saving in fuel is about 2 cents per kilowatt-hour. So 30-cent electricity displaces grid electricity and saves two cents.

March 18, 2018

The Truth About Wireless Charging

Filed under: Technology — Tags: , , , — Nicholas @ 02:00

Real Engineering
Published on 23 Feb 2018

January 4, 2018

The Truth About The Tesla Semi-Truck

Filed under: Business, Technology — Tags: , — Nicholas @ 02:00

Real Engineering
Published on 15 Dec 2017

Thank you for your amazing support this year! Help this channel get better by supporting at Patreon:
https://www.patreon.com/realengineering

Website: https://battery.real.engineering/

November 18, 2017

The two biggest problems holding back widespread adoption of electric cars

Filed under: Economics, Technology — Tags: , , — Nicholas @ 03:00

Warren Meyer explains why the current crop of electric vehicles are still only niche players, despite lots of overblown media hype and over-generous government subsidies:

There are two problems with electric vehicles. Neither are unsolvable in the long-term, but neither are probably going to get solved in the next 5 years.

  1. Energy Density. 15 gallons of gasoline weighs 90 pounds and takes up 2 cubic feet. This will carry a 40 mpg car 600 miles. The Tesla Model S 85kwh battery pack weighs 1200 pounds and will carry the car 265 miles (from this article the cells themselves occupy about 4 cubic feet if packed perfectly but in this video the whole pack looks much larger). We can see that even with what Musk claims is twice the energy density of other batteries, the Tesla gets 0.22 miles per pound of fuel/battery while the regular car can get 6.7. That is a difference in energy density of 30x. Some of this is compensated for by heavy and bulky things the electric car does not need (e.g. coolant system) but it is still a major problem in car design.
  2. Charge Time. In my mind this is perhaps the single barrier that could, if solved, make electric cars ubiquitous. people complain about electric car range, but really EV range is not that much shorter than the range of traditional cars on a tank of gas. The problem is that it is MUCH faster to refill a tank of gas than it is to refill a battery with a full charge. Traditionally it takes all night to charge an electric car, but 2 minutes at the pump to “charge” a gasoline engine. The fastest current charging claim is Tesla’s, which claims that the supercharger sites they have built on many US interstate routes sites will charge 170 miles of range in 30 minutes, or 5.7 miles per minute. A traditional car (the same one used in point 1) can add 600 miles of range in 2 minutes, or 300 miles per minute, or 52 times faster than the electric car. This is the real reason EV range is an issue for folks.

October 20, 2017

Why the Lights Are Still Off in Puerto Rico

Filed under: Economics, Government, USA — Tags: , , , , — Nicholas @ 06:00

ReasonTV
Published on 19 Oct 2017

The government set the stage for a post-hurricane catastrophe.
—–
Puerto Rico was set up for disaster well before Hurricane Maria hit. Revoked tax breaks, needlessly expensive imports, and crippling debt all led to a shoddy infrastructure that’s still without power on most of the island.

On the latest “Mostly Weekly,” Andrew Heaton explores: how did Puerto Rico get screwed over well before the lights went out, and how do we get them back on?

Mostly Weekly is hosted by Andrew Heaton with headwriter Sarah Rose Siskind.
Script by Sarah Rose Siskind with writing assistance from Andrew Heaton, Brian Sack, and Justin Monticello
Edited by Sarah Rose Siskind and Austin Bragg
Produced by Meredith and Austin Bragg.
Theme Song: Frozen by Surfer Blood.

October 8, 2017

Despite the rhetoric, Trump can’t just “wave goodbye” to Puerto Rico’s debt

Filed under: Government, Politics, USA — Tags: , , , , , — Nicholas @ 05:00

Megan McArdle on the financial plight that Puerto Rico was facing even before the hurricane season began:

… the fact remains that Puerto Rico is not going to be able to pay all of its debts. Prior to the hurricane, the territory had $73 billion in outstanding debt, and a population of 3.4 million people. That’s approximately $21,500 for every man, woman and child on the island – just about enough to buy each of them a brand new Mini Cooper, provided that they don’t insist on the sport package or the heated seats.

Puerto Rico couldn’t afford to buy 3.4 million Mini Coopers before; they certainly can’t now that Maria has washed out so many roads. Even before the hurricane, Puerto Rico’s GDP was around $100 billion, meaning that repaying its debt would consume nearly nine months of everything the island earned. And while there will probably be a brief bump in economic activity as disaster relief funds pour in and the destruction is cleared away, over the long term the hurricane represents a huge setback: businesses destroyed, people killed or injured, funds that could be generating economic growth instead diverted to simply replacing what has been lost.

So whatever President Trump does, or does not do, investors in Puerto Rican bonds are going to have to take a substantial haircut. The problem is, we’re not going to wipe out the debt entirely. And even if we could, it wouldn’t be enough to get Puerto Rico back to economic or fiscal health.

“If it’s that bad,” you may be thinking, “surely we ought to simply wipe out the debt holders? After all, they’re investment professionals. They can afford to take the loss; ordinary Puerto Ricans can’t.” The problem is that most of the folks holding Puerto Rico’s debt aren’t vulture hedge funds sitting on wads of ill-gotten gains; the overwhelming majority of the debt is held by ordinary folks who buy bonds or bond funds. Like, say, your parents. Or maybe you. And also, a lot of Puerto Ricans, who would be hit very hard if the value of their investments were wiped out.

How did Puerto Rico get so deeply into debt? Step forward the federal and Puerto Rican governments to take a bow:

The operations of the Puerto Rico Electric Power Authority, for example, defy belief: It essentially gave unlimited free power to municipalities and government-owned entities, which used it to do things like operate skating rinks in the tropics. Everywhere you look, you see signs of a government struggling to perform basic tasks: collect taxes, maintain the infrastructure, improve the health system. In the jargon of development economists, the island lacks “state capacity”: It is simply unable to exert the amount of power over its operations that we on the mainland mostly take for granted.

But you can’t entirely blame the Puerto Rican government for the state of the underlying economy, which is what had plunged the island into a bankruptcy crisis even before the hurricane. For that you have to look to the federal government, which eliminated a tax break that had given companies incentives to locate in Puerto Rico, and then oversaw a financial crisis that sent them into an even deeper spiral. We also made sure that a relatively poor island was forced to adopt the federal minimum wage, which was too high for the local labor market. That has contributed to the 11.5 percent unemployment rate. And Puerto Rico uses the U.S. dollar, leaving it unable to adjust monetary policy to overcome economic stagnation.

Electricity – Wright Brothers – Hip Firing MGs I OUT OF THE TRENCHES

Filed under: Europe, History, Military, USA, WW1 — Tags: , , , — Nicholas @ 04:00

The Great War
Published on 7 Oct 2017

Chair of Wisdom Time! This week we talk about the advancements of electricity during the war, the Wright brothers patent wars and hip/shoulder firing MGs. Oh and Italian Spiderman.

August 31, 2017

“Harvey is not Katrina”

Filed under: Economics, Environment, USA — Tags: , , , , , , — Nicholas @ 04:00

Nicole Gelinas on the crucial differences between the situation faced by New Orleans during Hurricane Katrina and that currently faced by Houston after being inundated by Hurricane Harvey:

The Houston region has received record rain, more falling in less than a week than it usually does in a year, and at least 30 people, including a Houston police officer, have died. Harvey, however, is not Katrina. One measure of this difference is in electricity provision. After Katrina, New Orleans was almost entirely without power for weeks. In Houston, by contrast, 94 percent of customers still had power as of early Wednesday.

Though we won’t know for sure for a while, the fact that Houston has kept the power on is likely in part a legacy of infrastructure investment after previous storms. Five years ago, Hurricane Ike actually cut power to 95 percent of Houston. But, as NPR reported after the storm, the city’s power company, CenterPoint, took steps after Ike, as well as after Tropical Storm Allison in 2001, to upgrade the grid, spending $400 million. Houston, helped by $50 million in federal money, cut down tens of thousands of trees along power lines and outfitted poles with the ability to re-route electricity away from damaged routes toward undamaged ones.

With power, hospitals can continue to operate; even Ben Taub Hospital, surrounded by water, kept the power on. Stores, too, have quickly begun to reopen. Power also means that people whose homes didn’t flood can stay put, lessening the burden on police to keep neighborhoods safe from looters. If the power stays on — as it should, now that worst of the storm is over — Houston should do well. If it goes out, the city will have far more serious problems.

[…]

Empty neighborhoods and business districts invite looting. Houston had already arrested 15 people as of late Tuesday for allegedly trying to steal everything from liquor to an ATM, and for attempted robbery, as well. These arrests, plus a nighttime curfew, are a good sign; after Katrina, New Orleans police officers failed to keep control over the city, both because of the severity of the damage, which left most of the city empty and dark, but also due to their longstanding poor performance. Harris County district attorney Kim Ogg and Houston police chief Art Acevado have already set the right tone to deter wrongdoing. Ogg said Tuesday that thieves “are going to feel the full weight of the law,” and Acevedo said he would push for tough sentences for people convicted. In New Orleans, by contrast, state and local officials’ apocalyptic invocation of “martial law,” rather than calm reliance on the rule of normal law, only exacerbated the sense of chaos.

With some, though not most, Houston neighborhoods now deserted, state law enforcement have a role to play here, as well, with federal support. A competent local police force will be busy, after a storm, in helping still-populated areas. In turn, state police and the National Guard, who have less experience interacting with people on a neighborhood level, can help by patrolling and securing empty areas. To that end, Texas has already activated the National Guard, adding 12,000 people to safety efforts, as well as for rescue and food distribution.

Oh, and as Caroline Baum points out, don’t be misled by idiotic claims that hurricane damage is somehow good for the economy:

You will no doubt hear assertions that the rebuilding effort will provide a boost to contractors, manufacturers and GDP in general. But before these claims turn into predictable nonsense about all the good that comes from natural disasters, I thought it might be useful to provide some context for these sorts of events.

The destruction wrought by a hurricane and flooding qualifies as a negative supply shock. Normal production and distribution channels are destroyed or disrupted. Producers have to find less-efficient (i.e. more expensive) ways to transport their goods. The net effect is lost output and income, and higher prices.

Over the years, I’ve observed a tendency among economists and traders to view such events through a demand-side prism. They see lost income translating into reduced spending on goods and services, which might even warrant some largesse from the central bank.

Of course, that is precisely the wrong medicine. Supply shocks reduce output and raise prices. The Federal Reserve’s interest-rate medicine affects demand. Lower interest rates will increase the demand for gasoline, among other goods and services, but they have no effect on supply. An easing of monetary policy under such circumstances would increase demand for already curtailed supply, raising prices even more.

But wait. What about all the new construction and investment necessitated by the devastation? Homeowners will have to rebuild. Businesses will have to replace destroyed or damaged plants and equipment. Pretty soon, we should start to hear about a boost to GDP growth.

In the short run, yes. But focus on the prefix, “re,” as in re-building and re-placing. After a natural disaster, housing starts are bound to increase, but there will be no net addition to the supply of homes. Capital spending will increase as well, but it will not expand the nation’s capital stock.

She also provides a link to this very topical essay by Frédéric Bastiat: That Which Is Seen and That Which Is Unseen. In short, we see the spending caused by the need to repair damages (in this case from the flooding), but we don’t see what might have been done if the money hadn’t needed to be spent just to replace existing stock.

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