Posts tagged ‘North America’

Wealth and China Through History

The media tends to talk about the growth of the Chinese economy as if it is something new and different.   In fact, there probably have been only about 200 years in the history of civilization when China was not the largest economy on Earth.  China still held this title into the early 18th century, and will get it back early in this century.

This map from the Economist (via Mark Perry) illustrates the point.

economic map

 

Of course there is a problem with this map.  It is easy to do a center of gravity for a country, but for the whole Earth?  The center in this case (unless one rightly puts it somewhere in the depths of the planet itself) depends on arbitrary decisions about where one puts the edges of the map. I presume this is from a map with North America on the far left side and Japan on the far right.  If one redid the map, say, with North America in the center, Asia on the left and Europe on the right, the center of gravity would roam around North America through history.

Global Warming Ate My House

This has already made the rounds but I can't resist mocking an HBS professors whose classes I assiduously avoided when I was there.  Her house was hit by lightning.  Apparently, this was not the fault of poor lightning protection for her house, but was due to your SUV:

I am not a climate change scientist, but I have come to understand that I am a climate change victim. Our daughter took the lead investigating destructive lightning in Maine. She found that the NASA Goddard Institute estimates a 5-6% change in global lightning frequencies for every 1 degree Celsius global warming. The Earth has already warmed .8 degrees Celsius since 1802 and isexpected to warm another 1.1-6.4 degrees by the end of the century. Maine's temperatures rose 1.9 degrees Celsius in the last century and another 2.24 degree rise is projected by 2104. I learned from our insurance company that while the typical thunderstorm produces around 100 lightning strikes, there were 217 strikes around our house that night. I was shocked to discover that when it comes to increased lightning frequency and destructiveness, a NASA study concluded that eastern areas of North America like Maine are especially vulnerable. Scientists confirm a 10% increase in the incidence of extreme weather events in our region since 1949.

This is one of those paragraphs that is so bad, I put off writing about it because I could write a book about all the errors.

  • The 5-6% lightning strike estimate comes from one single study that I have never seen replicated, but more importantly comes from running a computer model.  Though it may exist, I have found no empirical evidence that lightning activity has net increased with increases in temperature
  • The world has warmed about 0.8C over the last century or two. Congrats.  Infinite monkeys and Shakespeare and all that.
  • We could argue the forecasts, but they are irrelevant to this discussion as we are talking about current weather which cannot be influenced by future warming.
  • Her claim that Maine's temperature rose 1.9C in the last Century is simply absurd.  Apparently she got the data from some authoritative place called nextgenerationearth.com, but its impossible to know since in the few days since she published this article that site has taken down the page.  So we will just have to rely on a lesser source like the NOAA for Maine temperatures.  Here story is from 2009 so I used data through 2009

Annual Averages in Maine:

Oops, not a lot of warming here, and certainly not 1.9C.  In fact, there has not even been a single year that has been 1.9C above the average for the century since the early 1900s.  And 2009 was a below average year.
Well, she said it was in summer.  That's when we get the majority of thunderstorms.  Maybe it is just summer warming?  The NOAA does not have a way to get just summer, but I can run average temperatures for July-September of each year, which matches summer within about 8 days.

Whoa!  What's this?  A 0.3-0.4C drop in the last 100 years.   And summer of 2009 (the last data point) was well below average. Wow, I guess cooling causes lightning.  We better do something about that cooling, and fast!  Or else buy this professor some lightning rods.
And you have to love evidence like this

I learned from our insurance company that while the typical thunderstorm produces around 100 lightning strikes, there were 217 strikes around our house that night

What is this, the climate version of the Lake Wobegone Effect?  If all our storms are not below average, then that is proof of climate change.  Is this really how a Harvard professor does statistical analysis?  She can just look at a sample and the mean and determine from that one sample that the mean is shifting?

Finally, she goes on to say that extreme weather in her area is up 10% from some source called the Gulf of Maine Council on Marine Environment.  Well, of course, you can't find that fact anywhere on the source she links.  And besides, even if Maine extreme weather is up, it can't be because of warming because Maine seems to be cooling.

This is just a classic example of the observer bias that is driving the whole "extreme weather" meme.  I will show you what is going on by analogy.  This is from the Wikipedia page on "Summer of the Shark":

The media's fixation with shark attacks began on July 6, when 8-year-old Mississippi boy Jessie Arbogast was bitten by a bull shark while standing in shallow water at Santa Rosa Island's Langdon Beach. ...

Immediately after the near-fatal attack on Arbogast, another attack severed the leg of a New Yorker vacationing in The Bahamas, while a third attack on a surfer occurred about a week later on July 15, six miles from the spot where Arbogast was bitten.[6] In the following weeks, Abrogast's spectacular rescue and survival received extensive coverage in the 24-hour news cycle, which was renewed (and then redoubled) with each subsequent report of a shark incident. The media fixation continued story with a cover story in the July 30th issue of Time magazine.

In mid-August, many networks were showing footage captured by helicopters of hundreds of sharks coalescing off the southwest coast of Florida. Beach-goers were warned of the dangers of swimming,[7] despite the fact that the swarm was likely part of an annual shark migration.[8] The repeated broadcasts of the shark group has been criticized as blatant fear mongering, leading to the unwarranted belief of a so-called shark "epidemic".[8]...

In terms of absolute minutes of television coverage on the three major broadcast networks—ABCCBS, and NBCshark attacks were 2001's third "most important" news story prior toSeptember 11, behind the western United States forest fires, and the political scandal resulting from the Chandra Levy missing persons case.[11] However, the comparatively higher shock value of shark attacks left a lasting impression on the public. According to the International Shark Attack File, there were 76 shark attacks that occurred in 2001, lower than the 85 attacks documented in 2000; furthermore, although 5 people were killed in attacks in 2001, this was less than the 12 deaths caused by shark attacks the previous year.[12]

A trend in news coverage <> a trend in the underlying frequency. If these were correlated, gas prices would only go up and would never come down.

Wal-Mart's Bribery Problems

Walter Olson has been writing a lot about Wal-Mart and FCPA.  I don't have a lot to add except my own experience working for a large corporation in third world countries.

I worked for a manufacturer of industrial equipment for years.  In most countries in Europe and North America, part of our strategy was a dedicated in-house sales force that could provide a high level of technical support.  But we went away from that strategy when we went into third world countries, just the place where we needed more rather than less technical support for our customers.

Why?  A big reason was the FCPA.  There are many countries where it is simply impossible to do business without paying bribes.  Bribes are absolutely wired into the regulatory process.  In Nigeria, public officials are paid less with the expectation they will make it up on bribes, similar to the way we pay waiters who get tips.  The only way to legally work in these countries is to work through third party resellers and distributors and other such partners, and then tightly close your eyes to how they get things done.

What always ticks me off about these cases is the fake attitude of naivite in the press that seems to be constantly amazed that corporations might have to pay bribes to do basic things we take for granted here, like get the water turned on or have your goods put on a ship.  But in fact reporters can't be this naive, as they almost certainly have to deal with many of the same things in their business.  I would love to see an accounting of the grease payments the NY Times pays in a year in foreign countries.

I think most people when they hear these foreign bribery cases assume corporations were paying to get a special advantage or to escape some sort of fundamental regulation.  And this is possibly the case with Wal-Mart, but more likely they were simply paying because that is what you have to do just to function at all.

Answer: 36 to 38

Question:  How many years does it take for a typical government / green investment to pay off?

Example 1:

Mesa got $1 million in federal stimulus money to replace 2500 traffic lights with LED's. That's $400 a light which probably includes the cost of installation. Once they are operational, Mesa expects to save $0.028 million per year in electricity costs. At that rate, it will only take 35.7 years of savings to get the $1 million back.

Example 2:

Nine turbines from seven manufacturers, including Reno's Windspire, are being installed to test their performances in different environments. The first turbine was installed at the sewer plant in Stead and the second at Mira Loma Park.The nine turbines and several solar projects together are a $3.5 million investment, before $1.7 million in energy rebates are applied to reduce that cost. The projects are expected to save 788,932 kilowatt hours a year for an annual savings of $91,000 a year [a 38-year payback].

The latter example actually over-estimates the payback, because it ignores the substantial maintenance costs of wind turbines (what percentage have you actually seen running?) as well as the systematic over-estimation of their power output.  Incredibly, the SF Chronicle's green writer/blogger actually brags up the Reno boondoggle.

Postscript: In the comments of the wind turbine article I added, in response to the projects green credentials:

But, you say, its not about return on investment but CO2 reduction. OK, lets look at that, forgetting for a minute whether Reno taxpayers should be paying extra for electricity to reduce global temperatures by 0.00000000001C.

Let's consider an alternate investment in gas turbine electric generation, and assume it and the wind turbines are displacing coal-fired power. Per Kw-H, gas turbines are going to, even including the fuel, produce power for a fourth or less the cost of wind with these relatively small turbines. And gas is plentiful and most of it comes from the gold old USofA (or at least North America).

But it's not zero emission you say. OK, but if it is 1/4 the cost that means that it can displace four times as much coal power for the same investment. And it is as low of CO2 emissions per btu as you can get in a fossil fuel. In fact, 4X of gas generation would reduce CO2 emissions more than 1X of wind. So even in terms of CO2 emissions, wind here is a bad investment.

Where Were You Republicans?

As any reader of this blog will know, I am a strong supporter of opening up new areas in North America to oil drilling and freeing companies to develop western oil shale reserves.  Republicans in Congress are currently bashing Pelosi and the Democrats for not opening this development up.  Fair enough, I guess, but where were the Republican for the six years they had both the Congress and the Presidency?

As a libertarian, the situation in Congress simply sucks.  Republicans, who purport to be our allies on economic issues, do nothing of consequence with their six years running Congress.  Democrats, who purport to be our allies on civil liberties issues, immediately roll over on FISA once taking over Congress.  My general observation is that I like both parties better when they are in opposition.

Dumbest Thing I Have Read Today

I agree with Kevin Drum, this is the dumbest thing I have read today:

There is a solution to the rising cost of oil, but it is a painful
one. Let's say there is a lot of $20-a-barrel oil in the world "”
deep-sea oil, Canadian tar sands. But who would look for $20-a-barrel
oil if someone else (Saudi Arabia) has lots of $5-a-barrel oil? The
answer is: no one.

Basically, American taxpayers have to guarantee potential producers
that the price in the future will not fall below $20 a barrel and that
they will not lose their investments.

This is easy to do. The U.S. needs to guarantee that it will buy all
of its oil at $20 a barrel before buying anything from OPEC. This
forces the price of oil down to $20 a barrel, but it eliminates the
possibility that it will ever go back to $5 a barrel.

The implication that no one will add capacity if there is anyone at all to the left of them on the supply curve is just silly, and defies history in any number of industries, including oil.  By this argument, no one would be building super-deep water oil platforms today.  The reason there is not more oil exploration today in certain areas of North America is that there are formal and informal government restrictions that make it hard and/or impossible.  And to the extent that oil companies are treating current oil prices as a bubble that will inevitably fall, all I can say is, bring it on. 

We Have Got To Stop BioFuel Subsidies Right Now

I have no problem if someone wants to compete out there in the free market producing fuel from corn or switchgrass or whatever.  But we have got to stop the subsidies right now, before it is too late.  Biofuels do absolutely nothing, zero, zippo to change CO2 production, and some studies show they make CO2 output worse when you consider the whole production cycle.  This is not to mention the effect biofuels will have in putting more wild and forest land under the till. 

I can't see any conceivable benefit to the economy from subsidizing biofuels, except some hazy notion of energy independence which has limited economic value and which will never be achieved with biofuels  (we will have jacked up the price of corn so high we can't feed cattle long before biofuels make even a minor dent in oil imports).  My only guess as to true motivation is that people want to spite Exxon and Shell, but if you don't like those companies, you really aren't going to like Archer Daniels Midland. 

Biofuels, given current technology, are a pure product of politics.  They are a massive subsidy of Midwestern farmers that the recipients can claim is not really a subsidy.  If the first presidential primary were in Nevada rather than Iowa, you would never hear a word from politicians about ethanol.

But here is the reason we need to end the subsidies right now.  [emphasis added]

A $400-million integrated biodiesel and ethanol refinery the first
complex of its kind in North America will be built in central Alberta.

Led
by Dominion Energy Services, LLC a Florida-based group with pioneering
ties to Calgary's natural gas marketing sector investors that include
$45-billion US private equity fund The Carlyle Group LLC and affiliate
Riverstone Renewable Energy Infrastructure Fund I, LP said Monday they
have finalized plans for the facility....

Alberta Agriculture Minister Doug Horner noted the "world-class"
Dominion plant follows the provincial government's recent, $239-million
over five years initiative to boost biofuels production. The province
will provide a 14-cent per litre production credit to the facility
.  [for those rusty on the metric system, that is 56-cents per gallon or $23.53 per barrel]

Companies are currently building massive subsidy-magnets biofuel plants.  Once these investments are in place, there is going to be a huge entrenched base of investors and workers who are going to wield every bit of political power they can to retain subsidies forever to protect their jobs and their investment.  Biofuel subsidies will be as intractable as peanut and sugar subsidies and protections.

Update:  Radley Balko mentions another great example.  For various post-prohibition reasons that may or may not have made sense at the time, state laws prohibit retailers from buying alcoholic beverages straight from the manufacturer - e.g. Costco cannot buy direct from Anheiser-Busch.  Wholesalers who emerged to fill the legally required middleman role became rich.  Since then, even thought this 3-layered distribution requirement makes zero sense, it has become impossible to change it because the wealthy distributors who owe their fortunes to the requirement block every move to deregulate.

Warning Signs For Trespassers

Yet another nutty jury has decided that it should be national policy to have warning signs every few feet on a railroad to warn trespassers against danger:

Jeffrey Klein and Brett Birdwell were 17 "when they trespassed onto
railroad property and climbed atop a rail car" because they wanted to
see the view from there. They were shocked by a 12,500-volt wire and
severely injured. The incident took place in Lancaster, Pa. but through
the miracle of forum selection the lawsuit against Amtrak and Norfolk
Southern landed before a jury in Philadelphia, a locality notably more
favorable for plaintiffs than Lancaster. An attorney said the railroads
should have posted signs for the benefit of trespassers warning of the
overhead hazard and also should have had the electricity turned off at
the time.

This is by no means the first such verdict.  I featured another here:

By the way, the exact wording on the complaint against the railroad is even better than I thought:

"The
[engineer] did not stop the train in a timely manner, and failed to
yield the right of way to a pedestrian walking along the tracks in
plain view"

A freight train's topping distance is measured in miles, even with full emergency braking.

She and her attorney's further argue:

that
the railroad was negligent for failing to post signs warning 'of the
dangers of walking near train tracks and that the tracks were actively
in use

Lets leave aside the obvious point
about individual responsibility, and ask what would happen if this were
the legal standard, to have such signs.  To make sure someone saw one,
you would have to have one say every 30 feet.  Since there are just over 200,000 miles of freight railroads in the North America that works out to a bit over 35,000,000 signs that need to be posted.  At $100 per sign this would cost $3.5 billion.

She Was Asking For It

While the "she was asking for it" defense has thankfully been purged from most rape trials (at least those involving strangers), it seems to be alive and well in the civil trial world.  Last week, a jury held that the terrorists who bombed the World Trade Center in 1993 were only 32% responsible for their actions.  The real villain in this terrorist attack was ... the Port Authority, owner of the facility, who so thoughtlessly allowed themselves to get bombed.  More via Volokh and Overlawyered.  Based on joint and several liability, the PA now is on the hook for the entire $1.8 billion verdict.

By the way, the "smoking gun" in the trial was apparently a recommendation the PA received (one of hundreds and perhaps thousands of suggestions of wildly varying quality) to close the parking lot to cars to prevent car bombs.  This helps reinforce my earlier point of why litigation insanity like this actually works to make the world less safe, because such litigation provides a strong disincentive for an entity to have any internal discourse on safety, since notes from this discourse can be held against it later. 

It is always useful to think about what consistently applied policy would have satisfied the jury that the PA was not liable.  In this case, the jury's verdict was clearly "they should have closed the garage to prevent car bombings."  Now, lets apply that everywhere consistently.  This would basically mean that we close every car parking garage in the country, since they are all equally vulnerable to a car bomb.  Applying this further, wouldn't this same standard also result in closing all tall buildings to prevent airplane attack, closing all airports to prevent hijackings, and closing all government buildings to prevent bombings (well, maybe thats not so bad).  I have posted before about finding the absurdity from translating a jury's civil verdict into a consistent policy.  Here is one example:

the exact wording on the complaint against the railroad is even better than I thought:

"The
[engineer] did not stop the train in a timely manner, and failed to
yield the right of way to a pedestrian walking along the tracks in
plain view"

A freight train's topping distance is measured in miles, even with full emergency braking.

She and her attorney's further argue:

that
the railroad was negligent for failing to post signs warning 'of the
dangers of walking near train tracks and that the tracks were actively
in useLets

leave aside the obvious point
about individual responsibility, and ask what would happen if this were
the legal standard, to have such signs.  To make sure someone saw one,
you would have to have one say every 30 feet.  Since there are just over 200,000 miles of freight railroads in the North America that works out to a bit over 35,000,000 signs that need to be posted.  At $100 per sign this would cost $3.5 billion.

Here is the serious point:  Never would any legislature
pass a law that said there had to be warning signs every 30 feet on
railroads.  It would be way too costly for little benefit.  At grade
crossings today, we have signs and flashing lights and even gates and
still thousands of people a year drive in front of trains on grade
crossings.  So, if we would never require it legislatively, how have we
gotten to a point where a jury might effectively retroactively require
such signs, and assess a multi-million dollar penalty for not doing it?

Jackpot Litigation

For those who still hold out belief that the tort system today is still primarily about justice rather than just hijacking deep pockets, read this post at overlawyered.com.  From an online ad:

We will show you how to prove you had taken Vioxx, to prove that you had related side effects, and to find a good lawyer to win your case. There are still places selling Vioxx after the recall, you can find them online. Merck is still 100% fully responsible for any side effect. If you purchase Vioxx now, not only you can sue Merck, you can also sue the pharmacy store for selling recalled products. The purchase is risk free, as Merck will pay you every penny you spend on Vioxx including tax and shipping fees.

Quick, buy some before they take it off the shelf, so you too can get in on the lawsuit!

By the way, this little tidbit, also via Overlawyered.com, gave me a chuckle.  A woman is suing a railroad for hitting her when she was walking down the railroad tracks.  In part, she is suing the train for "failure of its engineer to...yield the right of way".  LOL - I can't believe the train didn't swerve out of the way.

UPDATE #1

Legal Underground has a post critical of this article:

As grist for its anti-lawyer message, Overlawyered.com is featuring this obvious Internet hoax: "Get Your Million Dollars from Vioxx Lawsuit."  Does Walter Olson really think his readers are so gullible?

In the comments section, I responded as follows:

Hmmm. I am one of the listed disciples (lol). I am willing to believe the ad is non-serious, meaning that it was aimed more at getting traffic and probably was not written by a law firm, and am posting an update as such with a link to this site.

Hoax? In my mind, its a hoax only if the legal advice is wrong or if you think no one would respond to the plea. I can't tell you if Vioxx can still be bought nowadays (that may be a hoax). However, if it was still on the shelf somewhere, ask yourself two honest questions:

1. Is there a lawyer out there who would happily try to make the case that a person who bought Vioxx after the recall can still be awarded damages?  Even if the attorney knew the person bought the Vioxx mainly to get in the class action?
2. Are there people out there who, if they thought it would get them in on a big class action, would go out today and load up on Vioxx solely to get a chance at having a lawsuit?

The honest answer is yes to both (just read the billboards in Florida). I mean, I would bet about any amount of money that someone out there has read this on the Internet and has tried to go buy Vioxx to get in on the jackpot. Guaranteed. Would any of you take the other side of this bet?

The fact that this ad may not be from a real lawyer does mean that I may have overstepped in painting law firms as being this bad (sorry), but I don't think its being fake in any way hurts the case that the notion of individual responsibility is on life support in this country.

By the way, after looking at Walter Olson's original post, I think he was pretty careful not to claim that the page was from a real law firm, and basically pointed to the same issues with the page's provenance that Legal Underground pointed out.

In the companies I have run, I have spent an inordinate amount of time dealing with a few really ridiculous lawsuits.  Here are two examples (that happened to companies I ran - this is not Internet hearsay or friend of a friend):

  1. A visitor to one of our facilities claims to have stepped, while walking in his bare feet, on a nail that was on the ground.  He did not come to us for first aid, but called us later after he had left our facility.  He never could produce the nail, nor could we ever find one in the area, but we agreed to pay any small bills he had -- we assumed he might have gone to the emergency room for a tetanus shot or maybe to get a band-aid.  It turns out he eventually claimed that the injury caused him to - get ready -  experience sexual dysfunction, which he eventually sued us over when we refused to pay any treatment costs.
  2. A woman came to our office at our facility limping, claiming to have fallen down the stairs and saying that we were gonna pay.  Despite the fact that it was a crowded area, no witnesses could be found.  We offered her a ride to the hospital which she refused.  Several of our employees thought we saw her come into the facility limping already.  Within the week, she was threatening to sue us for the cost of her knee operation.  Fortunately, since our employees saw her limping coming in, we did some more research, and members of her family told us she was also suing a restaurant she had visited the week before for the same injury.  It turns out she was uninsured, and had hurt her knee elsewhere, and was out trying to find some public business that she could get to pay for her operation. 

Given this experience, I am not going to apologize for believing that the referenced ad might be real.

UPDATE #2:

By the way, I don't think that Legal Underground was calling the train story a hoax, only the Vioxx.  By the way, the exact wording on the complaint against the railroad is even better than I thought:

"The [engineer] did not stop the train in a timely manner, and failed to yield the right of way to a pedestrian walking along the tracks in plain view"

A freight train's topping distance is measured in miles, even with full emergency braking.

She and her attorney's further argue:

that the railroad was negligent for failing to post signs warning 'of the dangers of walking near train tracks and that the tracks were actively in use

Lets leave aside the obvious point about individual responsibility, and ask what would happen if this were the legal standard, to have such signs.  To make sure someone saw one, you would have to have one say every 30 feet.  Since there are just over 200,000 miles of freight railroads in the North America that works out to a bit over 35,000,000 signs that need to be posted.  At $100 per sign this would cost $3.5 billion.

Here is the serious point:  Never would any legislature pass a law that said there had to be warning signs every 30 feet on railroads.  It would be way too costly for little benefit.  At grade crossings today, we have signs and flashing lights and even gates and still thousands of people a year drive in front of trains on grade crossings.  So, if we would never require it legislatively, how have we gotten to a point where a jury might effectively retroactively require such signs, and assess a multi-million dollar penalty for not doing it?