Saturday, December 26, 2009

A proposed constitutional amendment to control corporate lobbying

We the people, in order to ensure our control over our elected representatives, senators and the executive branch, enact the following amendment to the United States Constitution.

The Constitutional right to petition the Government for a redress of grievance under the 1st Amendment is held to be a right of individuals that may be exercised either by individuals themselves or through duly appointed agents/lobbyists funded solely by individuals.  Regulations governing certification, responsibilities and behaviors of such agents/lobbyists may be enacted by Congress to ensure orderly and ethical conduct.  Non-person legal entities such as corporations, partnerships and trusts may only petition the Government under limited conditions and with limited funding mechanisms that are specifically enacted into law.  Such laws as enacted under this provision will expire on the first day of each new presidential term.

Monday, December 21, 2009

Where we went wrong...

I've been reading the 1776 economics doorstop known as Wealth of Nations.  Adam Smith was telling the truth when he promised to be tedious (see prior post).  I'm only about 50 pages through it, but I'm already wishing I'd started reading it 30 years ago (because then I'd have finished last week).

What struck me today was the following [with my clarifying words]:
"In many great works, almost the whole labour of this kind [overseeing a corporate enterprise] is committed to some principal clerk [Chief Executive Officer]. His wages properly express the value of this labour of inspection and direction. Though in settling them some regard is had commonly, not only to his labour and skill, but to the trust which is reposed in him, yet they never bear any regular proportion to the capital of which he oversees the management; and the owner of this capital, though he is thus discharged of almost all labour, still expects that his profit should bear a regular proportion to his capital."
-- Adam Smith, in Book I, Chapter VI of Wealth of Nations

Pretty thick stuff, so here's my modern translation that includes ideas from the surrounding text to get what Smith was driving at
The wages of a CEO overseeing a corporation are based on the value of his labor inspecting and directing the operation, and to some extent the trust invested in him by the shareholders.  But his wages are not proportional to the capital of the corporation as it is not the CEO's capital at risk.  The owner of the capital (the shareholders) expects profit that is proportional to the capital they have invested and have at risk.
Smith is basically saying that CEO's pay shouldn't be proportional to the capital that they oversee!  Try that idea out on one of our present CEO's and you'll find that it would simply be heresy.

I'm beginning to think that the widespread holding of corporate shares by the average wage earner is "capital" that doesn't actually get the rights that are supposed to go with capitalism.  I think us peons are getting capitalisn't.

Saturday, December 19, 2009

Scientists are paid...

I absolutely loved this clip on The Daily Show.



His point at the end is classic, that the global warming skeptics want us to disbelieve scientists because they are paid.

Let's look at some numbers. In the world there are likely less than 2000 serious climate scientists. But for the sake of argument, let's say there are 10,000. I imagine that most scientists are getting paid in the range of $50K to $100K in US dollars, with a few of the more visible researchers getting perhaps up to $150K. If we take $100K as an overestimation of the average, that would mean that the total scientific payroll for all climate science is $1 billion dollars - that would be the absolute top, and its likely much much lower. But consider some corporate incomes; here I've got data from corporate reporting (available on Schwab.com): Exxon Mobil last year $81 billion, Chevron $43 billion, BP $34 billion, Royal Dutch Shell $50 billion. So without even stepping into the money available from coal, natural gas, or second tier oil companies, we have companies with more than 200 times the income of the the climate scientists. Keep in mind that the climate scientist are trying to support their families and send their kids to school on their income as well!

So tell me how does a poorly financed and disorganized group of ivory tower academics perpetrate a massive hoax on such well funded group of corporations?

Its interesting to note that scientists can't maintain any sort of agreement for very long unless there is truth at the core. And yet, for 40 years the tobacco corporations kept up a well-funded propaganda campaign that smoking wasn't "proved" to cause cancer - do any of you believe big tobacco anymore? Are we really going to need to wait 40 years for the climate skeptics to be proven to be the same type of liars?

Global Warming

Understanding how the carbon cycle affects the global climate is not a simple matter. And yet, scientists can do more to provide a better understanding to intelligent non-scientists. Here is my attempt.

A caveat
At every step, a scientist would say "well its not exactly like that, because…" I'm taking a lot of shortcuts with the science to give a better flavor of what is important without getting to all the complexities.

How a greenhouse works:
To understand the "greenhouse" effect, let's review what a greenhouse does. Consider a glass house that is made with "low-emissivity" glass. The idea behind "low-E" glass is that it allows visible (high frequency) light to pass through, but traps infrared (low frequency) thermal energy - see http://en.wikipedia.org/wiki/Low-emissivity for more explanation. Let's not worry about plants for the moment, but imagine two glass houses - one with a floor of black asphalt and the other with a floor of perfectly white concrete. Everything else being equal, you might intuit that the glass house with the asphalt floor will be hotter - and you would be correct. The house with the concrete floor will reflect the visible light, which will pass back out through the glass. In contrast, the asphalt will absorb the visible light and re-emit the light in the infrared spectrum - which is trapped within the house by the glass. If you had high-emissivity glass (that passes infrared) then both houses would have similar interior temperatures.

Let us imagine that we have asphalt that absorbs every bit of visible light and turns it into infrared, and we have white concrete that reflects every bit of visible light. Since we are imagining, let us also imagine that the sun never sets and the outside temperature is a constant 70 degrees F and our glass has an "emissivity" of zero (traps all infrared light) How would the temperature behave in our two imaginary greenhouses? First, the greenhouse with the concrete floor should be at 70 F. All the solar radiation energy coming in is reflected back out, so the temperature of the house and the air inside should be the the same as that outside - i.e. simple conduction through the structure of the greenhouse leads to the temperatures reaching equilibrium.

But for the greenhouse with the asphalt floor, all the solar radiation coming in is trapped and raises the temperature of the asphalt and the air inside. As the air temperature rises, so does the temperature of the house structure itself, which then conducts/radiates thermal energy to the outside. How high will the temperature rise in the greenhouse? This depends upon when equilibrium is reached. Since the sun is shining constantly in our imaginary world, there is a constant supply of visible light that is being converted into infrared heat. The temperature will keep rising until the rate at which this thermal energy is conducted/radiated to the outside is exactly equal to the rate at which energy in visible light is being supplied. This process is exactly the same as what happens when you turn up the thermostat in your house - it takes more energy to maintain a house at 72 F during the winter than it does at 68 F because you lose energy from the house at a greater rate when you maintain the house at 72. Understanding this concept of equilibrium between heat transfer rates is critical to understanding the greenhouse effect. We will call the temperature in the greenhouse where all the heat transfers balance the "equilibrium temperature." We can think of this as the temperature that the greenhouse wants to be at once everything is in balance.

Now let's imagine that we have a special type of glass that allows us to control the percent of infrared light that is trapped - that is, we control the glass emissivity. By increasing the emissivity (allowing some infrared to pass through) we can control the temperature of the greenhouse. We can also modify the reflectivity of the floor to change the greenhouse temperature - we imagine a material that we can change from white through any shade of gray to completely black, so as to modify the amount of incoming visible light that is turned into infrared light. With these materials we exert control on the temperature of the greenhouse. Increasing the reflectivity of the floor or increasing the emissivity of the glass will both serve to reduce the equilibrium temperature of the greenhouse. In contrast, decreasing floor reflectivity and/or glass emissivity serves to increase the equilibrium temperature. Of course, whenever we make a change, there will be some adjustment period while the house warms up or cools down to the new equilibrium.

Water cycle in a greenhouse
Things get more complicated when you add water to a greenhouse. Let's imagine that we add a large pond to our greenhouse but otherwise have a gray floor that reflects part of the visible light and converts the other part to infrared. Assuming that the temperature in the greenhouse isn't above the boiling point, we will have a pond with liquid water and water vapor in the air. It turns out that water vapor will absorb some of the infrared released from the floor, preventing it from even reaching the glass. So even if we turn our glass emissivity to high (allowing all infrared that reaches it to pass through), we find that the water vapor will trap the infrared and lead to a higher equilibrium temperature than we would have without the water. You may have heard that water vapor is the dominant greenhouse gas. This is true - but it is also misleading. The skeptics want you to think that because water vapor is present in larger quantities than CO2, then it CO2 must not be important. We'll try to explain why this is not the case.

Here's where things also get a little ugly - we have what is known as a "feedback" mechanism that leads to cycling rather than a simple equilibrium state. When the temperature in the greenhouse increases, the air will hold more water vapor and more water vapor will be released from the pond. For example, put a pot of water on the stove and heat it up to 120 degrees (well below boiling) and you will notice a lot more moisture in the air. This increased water vapor in the air leads will trap more infrared, leading to a higher temperature and more water vapor - the cycle reinforces itself. We call a reinforcing cycle a "positive feedback." If you've ever heard a high pitched scream from a microphone and speaker system you've heard the results of positive feedback - this happens when sound from the speakers enters the mike, is then amplified and fed back into the speakers, then back into the mike and amplified again through the speakers and into the mike etc. However, for water vapor there is a compensating "negative feedback" mechanism: clouds. When the water vapor in the air gets sufficiently high, the vapor condenses into clouds. Due to their fluffy white nature, clouds reflect some of the incoming visible light before it ever reaches the floor where it would be changed into infrared and subject to trapping. Thus clouds, a product of a greenhouse gas (water vapor) are actually a limiting factor on the greenhouse effect from water vapor. So here's the picture when we add water to the greenhouse:

1. Water vapor absorbs infrared thereby raising the greenhouse temperature, which leads to more water vapor and an even higher temperature.

2. Clouds form and reflect some of the incoming solar radiation.

3. The clouds turn into rain, cooling and reducing water vapor in the atmosphere, which leads temporarily to less trapping of infrared, but now more solar radiation is reaching the floor and the pond.

4. Heating starts again and water goes back into the atmosphere as vapor, and we return to step 1.

So rather than having a simple equilibrium state, the water vapor cycle oscillates around some central temperature. Sometimes its warmer, sometimes its colder, but the system is essentially in a dynamic balance. Over a single cycle of vaporization/rain, the temperature evolution in our imaginary greenhouse will be such that the net solar energy input is exactly balanced by the net energy lost to the outside. If we change anything in the system then this central (or equilibrium) temperature will change. Understanding how such changes occur requires understanding the rates at which the processes cycle and leads to some of the mathematical complexities in analyzing climate data.

Summarizing the above: Reflecting white surfaces in the greenhouse will simply reflect solar radiation straight back out of the greenhouse. Absorbing black surfaces will convert solar radiation to infrared radiation, which can be trapped in the greenhouse either by the glass itself, or by water vapor in the atmosphere. With sufficient water vapor we get rain, which temporarily reduces greenhouse gas trapping my removing water vapor from the atmosphere, thereby leading to some cooling. Thus, even though water vapor itself is produced with a positive feedback mechanism (trapping more heat leading to more water vapor), there is a "negative feedback" mechanism in rainfall that clears out the water vapor and allows the greenhouse to cool down again. Thus, a nifty climate cycle in dynamic balance.

Adding CO2 to the greenhouse atmosphere
Much like water vapor, CO2 is a "greenhouse gas" in that it absorbs infrared energy that the floor converts from the visible light. However, unlike water vapor, the CO2 doesn't form clouds to reflect incoming visible light and doesn't rain out of the atmosphere. So if we take the greenhouse water cycle described above and add some CO2, we expect that after a rainstorm (when water vapor has been cleared) the CO2 will absorb some of the infrared that would have slipped out of the greenhouse if the CO2 hadn't been there. This increased trapping of energy results in an increase in the equilibrium temperature of the greenhouse. So if we take our imaginary greenhouse and dump in some CO2 we can expect higher temperatures. We understand this mechanism extremely well, and if this were all there were to the problem, scientists would have reached agreement in the early 1970s and the argument would have been over then. The key point here is that it doesn't matter that water vapor is the largest greenhouse gas, because it has a natural negative feedback mechanism through rainfall. If CO2 levels aren't a problem (which is the skeptics claim), then there must be some negative feedback for CO2 as well. So now we have to investigate the carbon cycle and what happens with CO2 in a greenhouse.

Carbon cycle in a greenhouse
Now let's add some plants to our greenhouse.  Plants live and die in a cycle. When alive, plants take in visible light and scavenge carbon and oxygen from the air (in CO2) and the soil. The carbon is added to the plant stem and leaves while the oxygen is released back to the atmosphere. When a plant dies, bacteria work the opposite direction, eating the plant carbon and excreting CO2. Let's imagine our greenhouse has a fixed store of carbon that is continually being cycled. Some carbon is in the live plants, some is in the soil in dead plants and is being eaten by bacteria and some is in the greenhouse atmosphere in the form of CO2. If the total amount of carbon is fixed, then we will reach some equilibrium cycle in the plant life with some proportion of the carbon in each of these "pools". Once the proportion of carbon in each of the pools is established, we'll have some predictable amount in the atmosphere and some central "equilibrium" temperature about which the greenhouse cycle operates.

Adding fossil-fuel carbon
We can imagine introducing some new amount of carbon to the system. Let's say we take a barbecue into the greenhouse and light a small fire made from coal we dug from a nearby hillside. Initially, the smoke from the coal may prevent sunlight from entering the greenhouse, and reduce the incoming solar radiation. It is possible that this might initially cause a net cooling (if the solar radiation reflected is greater than the heat caused by burning). But after some time, the smoke clears and we have a new carbon cycle. Some of the carbon we introduced will be in new plants that have grown (because there is more carbon in the air). Some of the carbon will be in these soils, and some will be in the air. A new equilibrium system will be developed. This equilibrium will be at a higher temperature. When you added more carbon to the greenhouse, you can't just tell the carbon to "stay in the plants and the soil;" it's going to end up in all three pools: plants, soil and atmosphere. With more CO2 in the atmosphere, the temperature of the greenhouse will rise as more infrared is blocked from escaping.

Net effects
The increased temperature due to CO2 heat tramping will feed back into the water cycle as well, leading to changes in vaporization, cloud cover and rainfall. This is an area where trying to understand the system gets really tricky and the biggest scientific uncertainties still lie. It is difficult for scientist to predict the exact amount of temperature rise because of all the feedbacks between the different effects. However, what is very clear is that increasing CO2 in the atmosphere increases the heat trapping in the atmosphere. The global temperatures will rise until a new equilibrium is reached. Note that if we don't level-off our CO2 emissions at some output that matches the intake of the plants, then we won't ever reach an equilibrium. That is, if we keep treating the atmosphere as an open sewer for an ever increasing amount of CO2, the temperature will simply keep rising until life, as we know it, is unsustainable.

The critical importance of fossil fuels
Our dependence on fossil fuels is the crux of the problem. If we were to heat our homes, power our cars, and generate our electricity by chopping down trees from sustainable forests, then we wouldn't be changing the amount of carbon in the global cycle. But, we are resurrecting carbon that was laid down in times when the world was much warmer and there was much more CO2 in the atmosphere. By digging out and adding the coal (and to some extent the oil) to the present carbon cycle we are pushing our climate back to a much warmer state.

The question for the skeptics
For all the skeptics out there (if any bothered to read this far), you have a responsibility to more than simply be cynical doubters. If you are an honest skeptic, then you need to be able to answer one very simple question: Where is the extra CO2 going to go such that it doesn't affect the climate? The science of global warming is built on an understanding of physical mechanism on how CO2 traps infrared radiation. The rise in CO2 levels is indisputable science. Any skeptic who tries to claim CO2 levels are not rising will be laughed out of any debate. Fact: CO2 levels are rising globally. Fact: CO2 traps infrared thermal energy. Thus, we are left with two possible conclusions:

1) The scientists who have studied the mechanisms of this are correct, and the earth will warm due to fossil-fuel CO2 emissions.

2) The global warming skeptics are hiding some brilliant understanding of a new physical mechanism that will naturally absorb CO2 and prevent global warming.

If you have some brilliant idea as to how the CO2 is actually going to be ameliorated by some negative-feedback mechanism that no one else has looked at, then please let the world know. You can prattle on about climate cycles over the last 10 thousand or 10 million years all that you want - but you've got to answer the key question: WHERE IS THE CO2 GOING AND WHY IS IT NOT AFFECTING THE CLIMATE? If you don't have any scientific explanation with a mechanism for how increasing CO2 doesn't warm the atmosphere, then shut the &!#*(;$ up. because you don't have any scientific basis for your skepticism. Without any scientific basis for your claims, you're either a selfish Luddite or a partisan hack.

I couldn't have said it clearer...

"I am always willing to run some hazard of being tedious, in order to be sure that I am perspicuous; and, after taking the utmost pains that I can to be perspicuous, some obscurity may still appear to remain upon a subject, in its own nature extremely abstracted."
--Adam Smith, in "Wealth of Nations"

By the way - I had to look up "perspicuous"
It's pronounced sort of like "pr-spk-yus" .

Here's a more modern translation

I'm always willing to risk being boring so that I'm clear. If things still aren't clear, then its because the subject is extremely complicated.

Got to love that subtle jab from old Adam - if you can't understand me, its not my fault - it's probably just too difficult for you!

Friday, December 18, 2009

Perverse Incentives

Now that the GOP and conserva-dems have killed the public option, let's think about the consequences that are likely to result.

Firstly, a few notes on how insurance companies operate.  A typical company pulls in about $50 billion in premiums, out of which around 80% are returned to the customers in medical care, or about $40 billion dollars (40/50 = 0.8 or 80%, which is the "medical loss ratio" reported in the insurance company books).  The company chews up $10 billion in profit and overhead on the $50 billion premiums.  Note that only about $2 billion is profit (4%) but it takes them about $8 billion (16%) to process the claims (and pay for corporate jets etc.).  So if you go to the doctor and the doc needs $200 to cover his/her time, you will need to pay $240 to the insurer.

With reform, the insurance companies will get a bunch of new "mandated" customers, let's say that this results in a 20% increase in income from premiums (I don't have any real numbers here, so I'm just guessing).  Based on the old formulation, the company above would expect about have $60 billion in premiums with $2.4 billion in profit and $9.6 billion in overhead for a total of $12 billion while it pays out $48 billion.  But it appears that the reform bill will have a mandated "medical loss ratio", which required the insurance companies to pay out 90% of their premium income in medical claims. Thus, the company would have to pay out $54 billion in claims and would have only $6 billion for profit and overhead.

It seems to me that a company taking in $12 billion in overhead and profit is unlikely to want to see that cut in half.  But that is OK, because mathematically there is another option: $12 billion is 10% of $120 billion, so if the insurance companies can arrange for medical care to cost more, then they can reap the same amount of profit and overhead on the same number of customers!

Perverse incentives: we are going to have a system that provides incentives for the insurance companies to encourage medical costs to rise, so that they can raise insurance rates and maintain the style of living to which they are accustomed.  They won't need to become more efficient, just arrange their books to justify larger rate increases.

What's the solution?  free market competition.  Of course,  the now-dead public option was the only part of the bill that really forced competition on the insurance companies - they are too big and too well connected to actually want to compete.  Keep in mind that free markets are actually antithetical to capitalism.  Most capitalists don't want free markets - they want a monopoly or oligopoly and will work both legally and illegally to get it (which is why Intel recently paid $1.25 billion to AMD to settle lawsuits).

Prepare yourself for insurance rates to rise.  The fault will lie with those who killed competition by killing the public option.

Sunday, December 6, 2009

whither science when attacked by terrorists?

When attacked by terrorists who work outside the established laws of war, a people are faced difficult questions.  The toughest is..;

Do we hold strictly to our values and laws, no matter what the consequences?

People of good will and intelligence can differ in their answer.  It's not an easy question.  Without judging right or wrong, we may observe that a threatened people are likely to discard or revise their ideals if they seem to inhibit self-defense.

Recently, correspondence from some prominent (and not-so prominent) climate scientists have been released.  I've not read many of the actual messages, but have seen much of what passes for "analysis" in todays punditocracy.  The key charge is that the scientists violated the scientific method that requires dispassionate analysis of data.  For the sake of argument, let us assume the pundits are correct (although I am by no means convinced).  Now, I ask you to take a step into a scientist's shoes - even if you don't believe in global warming or anything I write below, pretend for a few minutes that you do and think about how a scientist might view his/her moral obligations.  Step into a role...

You are a typical senior scientist that has studied climate mechanics over an extended period, including 5 years in a Ph.D. program, a 2 year post-doctoral scholarship, and 20 years climbing up the academic ladder to make a salary that (if you're lucky) is about $90K per year (this description is not modeled any any particular person).  You understand a set of difficult and arcane subjects requiring a very high level of math to analyze.  To make the complexities understandable to non-scientists requires a level of communication expertise that isn't part of your training, and you're not very good at it.  You present your results to colleagues in the appropriate framework, discussing uncertainties and probabilities that are inherent in studying any natural system.  You and your colleagues are in agreement that global warming is occurring and is caused by human release of buried fossil carbon in oil, gas and coal into the natural carbon cycle.  The evidence to you and others with your training is simply overwhelming.  But it's not something that you can explain to a congressman, senator or even your teenage son without putting them to sleep.

You see your work distorted by "climate skeptics" who don't use the scientific method to support their arguments. Most don't have enough education to understand the science that you have done.  A few have the education, but are simply the contrarian curmudgeons that exist everywhere and are more interested in the publicity engendered by opposition. Many "skeptics" are funded by industry groups that have a stake in preventing any change in the status quo.  These groups have people trained in communication and government lobbying.  They are free to outright lie about the science.  They do not have scientific studies of their own that can show you are wrong, so they succeed only by casting doubt - in effect using science against itself.  You know there are always things you don't know and things that we may not yet understand correctly.  The "skeptics" use that doubt and caution inherent in your training to dismiss what you have shown to be true.  They use arguments between you and colleagues regarding technical details to throw doubt over things that you and your colleagues actually agree on.  They are winning a propaganda war because you cannot engage in the same tactics.  They seem to connect with the congressmen, senators and much of the public.  You can't just throw up your hands in frustration and cynicism - you understand the disastrous consequences that global warming is likely to inflict on  people across the world.  This isn't a matter of scientific pride, but is a matter of survival of our civilization.  You must decide your next step and answer some troubling questions...

Are you still applying the scientific method if you only present the data in such a way that you frame the proven results and neglect uncertainty? 

Do you try to communicate to the public in a way that they will understand the meaning of the science - even if this means leaving out the doubt and some of the details that might be confusing (or used to confuse)? 

Do you delve into outright propaganda?   

Do you stick by your scientific ideals and present the data and analyses in the correct scientific way that allows the "skeptics" to distort the results?

When survival of civilization is at stake, do you continue to play by the rules? 

Now step back out of the role...

There is a difficult ethical dilemma faced by climate scientists who are opposed by a well-funded and well-organized corporate campaign to obscure the results from science.  We haven't dealt with this problem as a society.  If we want scientists to deliver exactly their science and nothing more or less, are we going to hold their critics to the same standards?  If we can admit that well-intentioned people might torture for altruistic motives, should we be surprised if some climate scientists take the same road with their data for similar motives?  To those familiar with the science, the long-term threat to our national security from global warming is far greater than the national security threat posed by violent Islamic fundamentalism.

The above is meant to neither support nor condemn the climate scientists involved in "Climate-Gate."  I don't actually know what techniques they were using to analyze their data, and without knowing that I cannot have an educated opinion on whether they distorted the data or not. But I believe that some of the quotes I've seen in the scientists' email reflects their frustration of trying to fight the organized propaganda campaign against science.

For myself, I believe that whether we are talking about terrorists attacking ourselves or our science, we need to stick by our ideals.   I believe this because I am an optimist, and I think that we can recover from a lot of stupid or delayed decisions.  But I don't think we can recover from the loss of our ideals.  Once you make exceptions for this case or that in the name of expediency and the "correct" end, it is too easy for the human animal to justify anything.  Science succeeds when it is divorced from propaganda.  Justice succeeds only when linked to law.  There are consequences to such ideals.  I believe that science sticking to its ideals will result in deaths and environmental damage due to global warming that could be reduced by quicker action.  Likewise, staying with the ideals of our laws and rejecting torture may mean that we have less security and possibly more deaths from terrorism (although I'm not convinced on this point).  Nevertheless, as a scientist, I am unwilling to take the step to do anything other than provide dispassionate analysis of data - any step towards propaganda loses the long-term benefits that science has been proven to provide society.  Similarly, I reject calls for lawless treatment of the lawless - it loses the long-term benefit of laws for protecting the innocent who might be unjustly labeled as "lawless" - again a foundation of our jurisprudence that has served us well since the Magna Carta.

Above I've posed a question of philosophical consistency based on fairly disparate ideas.  I'd be interested if you see inconsistencies that invalidate my analysis.

Jobs Chart

Click on the image below for a readable chart.





The chart is from data obtained at


No additional processing to the raw data have been done.
Note that October and November 2009 data are provisional and subject to later revision by BLS