October 2006 Archives

Natural Disasters & GDP

Marginal Revolution has a point / counterpoint regarding whether measured real GDP increases or decreases in response to natural disasters.

My summary answer: with high confidence, we know that real measured GDP decreases in the disaster area in the immediate quarter. With less confidence, huge government borrowing to aid victims in the next several quarters does increase local and national measured real GDP, but disruptions in local markets cause increases in national prices that will have a negative impact more than offsetting the short-term gains from borrowing; llocal gains in the quarters following a disaster are paid at large national expense. Even the gains are transitory, since they are spent largely on non-investment goods, and repayment will lower measured GDP. GDP growth will be low in the disaster area for several years. National growth will be largely unaffected.

Good News, Bad News

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I saw this article in an email from FierceBiotech.com. The goods news is that researchers effectively cured Parkinson's disease in rats, but the bad news is that all test animals then proceeded to grow tumors although benign. This shouldn't really come as a surprise as embryonic stem cells were used in the procedure. These are known to cause tumors. I should also note that the article says the lab is restricted from using certain types of stem cells because of government funding without noting that it was the supposedly prohibited type which was used. Although, this is qualified by pointing out some of the problems that could be associated with the stem cell line used, still, sloppy reporting. It also should be noted that the private sector has no such restrictions on it and neither would the $3 billion dollars that California has allocated for such research. Here's an excerpt:

The progress of science is paved with stories of high hopes and heartbreaks. But in a busy lab at the University of Rochester the two extremes have met in one dazzling yet devastating experiment.

Researchers there have for the first time essentially cured rats of a Parkinson's-like disease using human embryonic stem cells. But 10 weeks into the trial, they discovered brain tumours had begun to grow in every animal treated.

"Here we have this method that works so well to reverse the symptoms of Parkinson's," said lead investigator Steven Goldman, "But no matter how you look at it, it's an expanding mass and that's bad news."

None of the cells growing out of control were cancerous tumours. But as Dr. Goldman pointed out, "In the brain, nothing's benign."

One last note, I'm against the stem cell ban put in place as I think it can still be done ethically. That is without creating life for the purpose of destroying it as there are a lot of embryos out that there that are created for other reasons, but will never reach maturity so to speak.

Scariest Paragraph of the Day

"What you have is a generation of teachers from the early to mid-'70s who don't know grammar, who never learned it," said Benjamin, an author of the national council's publication. "We have armies of teachers, elementary teachers and English teachers, who don't have the language to talk about language. It's kind of their dirty little secret."

Last paragraph of "Clauses and Commas Make a Comeback". Of course, most people can get along fine without grammar instruction, but real education should provide more than the basics.

Middlemen, Sardines Hardest Hit

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sardine.JPG

Via Knowledge Problem and Cold Spring Shops, comes a WaPo article describing how India's sardine fishermen are using cell phones to find the best prices for their catch. Middlemen are not pleased:

the dealers don't necessarily like the new balance of power, but they are paying better prices

Depending on the structure of this market, these higher prices to fishermen -- yielding at least one case of a tripling of income for a boat operator -- should induce them to fish a little more, or induce others to enter the market, and this will have a further "ripple effect" on the Sardine market -- an increase in aggregate supply, yielding lower prices to end consumers.

As much as the middlemen don't like the new balance of power, presumably the sardines like it even less -- especially if short-run supply can be expanded past the sustainable possibility-frontier into over-fishing.

Does anybody have an idea where one can get reliable information about prices and quantites for these markets?

Pretending to Be Popular

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Via Businesspundit, we find unions using city governments as PR outlets:


Cambridge, MA- The City Council of Cambridge Massachusetts late yesterday became the first local government in the nation to condemn Starbucks' relentless anti-union campaign and support the Industrial Workers of the World organizing drive at Starbucks. Members of the IWW Starbucks Workers Union hope the resolution will serve as a model for other city councils, religious organizations, and labor unions around the world.

That resolution deserves scrutiny, because the language and evidence it uses to justify government policy doesn't get any more intentionally vague:


"National attention has been increasing on the efforts of Starbucks workers".

Really? This is the first mainstream "national attention" I've heard of, if you don't count Liza Featherstone at The Nation. (Look at the last comment -- "Holy Crap! BEN & JERRY'S and WHOLE FOODS aren't "pure" enough for her?!??!?!")

I dislike people misappropriating concepts as much as the next pedant, but I have to say, I think this time the logical connection I want want to make is valid. Take this article from Seed, ostensibly about clear-headed science reporting:

The United States, the only industrialized country with strong population growth, now has 300 million people whose lifestyle makes a disproportionately huge mark on the global environment, experts say.

The world's third most populous country behind China and India, the United States has five percent of the world's population.

But it consumes—alone—more than a quarter of the world's natural resources, more than any other country, according to the National Report on Population and Environment, put out by the U.S.-based Center for Environment and Population.

I know it's not quite the same, but could I really be blamed for suggesting that the law of conservation of mass and energy might provide some necessary perspective?

The US economy is also among the world's most productive nations. Meaning that the resources consumed get turned into something, be it plastic goods, financial services, taxi cab rides, software, movies, and so on. Certainly there is a massive efficiency question to address, but the overarching point of the article -- as evidenced by the headline -- is to suggest that the consumption of those resources by the US is an unalloyed negative for the world. This simply ignores the connection between resource use and economic output. All else equal, if you reduce resource use, you'll reduce output. And while some people may be fine with that, who exactly draws up the list of resources to reduce, and thus gets the pleasure of picking which industry will be turning people out of their jobs?

More on the economics of standby

Here's a quick article on the savings to be had from lower-power standby for electronic devices.

For Windows commputer users: when (if) Vista ever hits the streets, it's going to have a more robust power-saving "sleep" feature that will still allow IT managers to install updates late at night when people aren't around.

What I wonder, however, is if this idle power usage in computers (which could be larger than when the computer is actually running) is better put to other uses. Personally, I've loaded the United Devices agent from Grid.org on my PCs. After about 15 minutes of inactivity, the grid program kicks on and it starts donating cycles to things like the Human Proteome Folding Project. The direct contribution of effort is more appealing to me than trying to ramp down energy use in tiny bits over every machine (which makes me wonder whether people will just find other, more power-intensive activities to get up to, eroding the "benefit" of scaling back standby power use).

Second Life: Creative Collaboration Tool

Despite posting about the things fairly regularly, I don't actually play any of those "massively multiplayer online role-playing games" (MMORPG). But having been in the advertising industry for a while, I still have a fondness for really well executed ads. I used to read the Communication Arts advertising annual for inspiration. So the news that Leo Burnett has opened an online shop in Second Life to highlight creative work and allow creators around the world to mingle might actually get me to see what the game is all about.

While I think calling World of Warcraft the new golf goes WAY too far (honestly, the biggest use of email is still to set up face-to-face meetings), I think there might be some movement towards using these persistent realms to collaborate, hold meetings, etc. Compare the interface and experience to the horrendous video-conferencing we still live with, and I think people might be far more comfortable just monitoring an online room for attendees than herding into a conference room to squint at each other as they try to figure out who's talking.

A Modern Platform

And I thought my humor was dry:

"We are committed to continuing to support the warfighter by making this the most modern platform possible," said Forrest Gossett, Boeing Wichita spokesman.

That "modern platform" would be the B-52H, first deployed in 1962. Of course, much of the guts and skin of each tail in the current USAF fleet have been repaired or replaced or upgraded several times since initial delivery, so much of the technology in the B-52 really could be modern.

See also, Boeing's B-52 timeline.

Britain's wholesale price of natural gas dipped into the negative.

Well, so much for assuming prices are positive in my optimization problems.

Stupid reality.

Re: Paul

Paul has let me know that he will be extremely busy in the forseeable future, and will be posting far less frequently. I gather that he must refocus his energies on earning a living.

My thanks go to Paul for being an incredible one-man show, and I hope he finds the time to contribute.

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