Author Archives: rdmyers75@hotmail.com

financial regulation

According to Simon Johnson, political momentum may be building in the U.S. for stronger regulation aimed at financial stability:

From the perspective of anyone seeking the nomination of either of America’s political parties, here is an issue that cuts across partisan lines. “Break up Citigroup” is a concrete and powerful idea that would move the financial system in the right direction. It is not a panacea, but the coalition that can break up Citi can also put in place other measures to make the financial system safer – including more effective consumer protection, greater transparency in markets, and higher capital requirements for major banks.

From the left, the emphasis has been on the megabanks’ abuse of power and the great rip-off of the middle class. From the right, the stress is on the hazards of crony capitalism, owing to the massive implicit government subsidies that these banks receive. But both left and right agree on the fundamental asymmetry that the recent “Citigroup Amendment” implies: Bankers get rich whether they win or lose, because the US taxpayer foots the bill when their risky bets fail.

supply and demand

Mohamed El-Erian says that Saudi Arabia won’t cut its pumping to counteract falling oil prices, for fear of losing market share. He says the normal textbook rules of supply and demand will apply:

Low prices will lead to the gradual shutdown of what are now unprofitable oil fields and alternative energy supplies, and they will discourage investment in new capacity.  At the same time, they will encourage higher demand for oil.

This will all happen, but it will take a while. In the meantime, as oil prices settle at significantly lower levels, economic behavior will change beyond the “one-off” impact.

As costs fall for manufacturing and a wide range of other activities affected by energy costs, and as consumers spend less on gas and more on other things, many oil-importing nations will see a rise in gross domestic product. And this higher economic activity is likely to boost investment in new plants, equipment and labor, financed by corporate cash sitting on the sidelines.

This is where I should say something smart about natural capital or climate change or innovation. Well, maybe I’m just tired tonight.

robot-assisted surgery

Robot-assisted surgery is here, and this BBC video has some real footage of it. Warning, it’s a little graphic. It looks like the surgeon operating the robot is in the same room, and I assume he could jump in with an old-fashioned scalpel if he needed to. But in the future, I suppose there is no reason why surgery couldn’t be done by a surgeon far away, or even without direct human assistance at all.

video camera coverage

The police are making increasing use of video cameras – and not just public ones, but cameras on private property pointed in a public direction. When they want private footage, they just ask and most people are happy to turn it over. Some stats on Philadelphia from Philly.com:

This year, police have released more than 500 videos in crimes ranging from Halloween-decoration theft to shootings, throughout all six detective divisions – Northeast, Northwest, East, Central, South and Southwest.

As a result of those videos, police have made more than 100 arrests and have solved more than 200 crimes, Stanford said.

Police have access to about 4,000 video cameras across the city – in addition to city-owned cameras, SEPTA and Amtrak cameras and those at Philadelphia International and Northeast airports, Stanford said.

That adds up to more than 30 cameras per square mile in the city, from which police can readily obtain video – so it’s pretty tough to commit a crime anywhere and flee without being caught on video at some point…

Video is recovered in about 50 to 60 percent of homicide cases, he said. Based on a five-year average of 297 homicides a year in the city, detectives are obtaining video in roughly 150 to 180 homicide cases per year.

As a city dweller, it’s kind of hard to have a problem with this. City streets, and even underground walkways, aren’t nearly as dangerous as suburbanites think they are from sitting home watching CSI. But still, the more people feel that violent crime is being deterred, the more they will want to be out, and the safer we will all be. You wouldn’t want the police using video footage to get overzealous about minor infractions like jaywalking or open containers, or against political expression, but at least in Philadelphia there are no signs of that happening.

Steven Johnson

Steven Johnson, author of Where Good Ideas Come From, has a new book about six inventions that “got us to now”. The list he has come up with is “glass, cold, sound, cleanliness, time and light“. I’ll put it on my short to medium term reading list, because it doesn’t sound extremely exciting to me, but I did like his first book and its focus on the “adjacent possible”. His point there was that every once in a while you might have an Einstein with major breakthroughs that seem far ahead of their time, but for the most part progress is incremental, and what seems like a breakthrough in retrospect is made possible by a series of earlier incremental steps. Digital computers are a good example – Charles Babbage and others came up with all the necessary theory to build them in the 18th century, but they would have to have been built out of gears and powered by steam. The invention of electricity, transistors, silicon chips, etc., and the building of all the infrastructure systems to support them, eventually paved the way for our laptops, smartphones, and supercomputers today.

This also reminded me of The Difference Engine, a “steampunk” novel in which the British and French governments actually build the enormous computers envisioned by Babbage, and put them to various bureaucratic and nefarious purposes.

F.E. Smith

BBC has an interesting article on predictions made by F.E. Smith, a British aristocrat. These were predictions made in 1930 for the year 2030. BBC calls them “strange”. A couple really are strange, but several of them either have come true or still could by 2030. If technological progress is truly exponential, then 2015 is too soon to rule out any outcome for 2030 – remember the old saw about the lily pond and day 29.

  • average lifespan of 150, and a cure for cancer – there have been huge gains in lifespan, but obviously nowhere near this; but it could still happen; I’m reading The End of Illness by David Agus right now. One of his points is that the discovery of highly effective treatments for infectious diseases (antibiotics, etc.) has led to a focus on disease as an invader to be fought, rather than a focus on the patient’s body as a complete system, which is what is needed for better cancer treatment. He is not optimistic about a cure, but thinks that with better prevention and early detection most people could live healthy lives to 100 or more. I am also reminded of Long For this World, a book about Aubrey de Grey, who has proposed a radical (and seemingly drastic, not to mention painful) cure for cancer that he believes could allow people to live for hundreds or even a thousand years.
  • a 16-24 hour average work week – certainly this is not the average work week for people who work today. But is it so weird? This guy probably knew John Maynard Keynes, who was making exactly these sorts of projections based on long-term increases in productivity (Economic Possibilities for our Grandchildren). These productivity increases, and related increases on overall monetary wealth, actually have come to pass. But two things have happened. First, the wealth is distributed unevenly, so that some people don’t have to work at all, while others have to work a lot. Of the richer countries, a few in Northern Europe have taken steps in the direction of sharing both wealth and work hours, while the Anglo-American countries and emerging Asia generally have not. Second, as we have become wealthier, we have come to see some things as necessities that would have been seen as luxuries in the past. Air conditioning comes to mind. Robert and Edward Skidelski talk a lot about these issues in How Much is Enough.
  • a color TV in every home 🙂 which would lead to a return to direct democracy 🙁
  • synthetic meat – has already happened in the lab, almost certainly will be commercialized by 2030 I would think
  • new “physiologically pleasant substances…as pleasant and harmless…” 🙂 “…as tobacco” 🙁

Books I mention above (which I am not selling):

December 2014 in Review

At the end of November, my Hope for the Future Index stood at -2.  I’ll give December posts a score from -3 to +3 based on how negative or positive they are.

Negative trends and predictions (-12):

  • When you consider roads, streets, and parking, cars take up more space in cities than housing. (-2)
  • The latest on productivity and economic growth: Paul Krugman says there is risk of deflationary spirals in many countries, and the U.S. economy is nothing to right home about. (-1)
  • There are a few legitimate scientists out there warning of sudden, catastrophic climate change in the near future. (-1)
  • Automation (meaning robots and AI) is estimated to threaten 47% of all U.S. jobs. One area of active research into automation: weaponry. Only one negative point because there are also some positive implications. (-1)
  • Margaret Atwood’s Year of the Flood is a depressing but entertaining reminder that bio-apocalypse is possible. (-2)
  • Before the recent rains, the drought in California was estimated to be a once-in-1200-years event. Major droughts in major food growing regions are not good news, especially with depletion of groundwater, and loss of snowpack and glaciers also in the news. (-2)
  • William Lazonick argues provides evidence that the rise in the gospel of shareholder value correlated with the growth slowdown that started in the 1970s – his explanation is that before that, retained earnings were a cornerstone of R&D and innovation in the economy. Loss of a point because it’s good to hear a dissenting voice, but the economy is still run by disciples of the profits for now. (-1)
  • Elizabeth Warren and Bernie Sanders are warning that the U.S. financial system may still be dangerously unstable. (-2)

Positive trends and predictions (+6):

  • There are some new ideas out there for teaching computer programming, even to young children: Loco Robo, Scratch, and for-profit “programming boot camps”. (+1)
  • You can now get genetically customized probiotics for your vagina. (+1)
  • There are plenty of ideas and models out there for safe, walkable streets, some as simple as narrower lanes. But as I point out, the Dutch and Danish designs are pretty much perfect and should just be adopted everywhere. (+1)
  • I linked to a new video depicting Michael Graves’s idea for “linear cities“. These could be very sustainable ecological if they meant the rest of the landscape is left in a mostly natural condition. I am not as sure about social sustainability – done wrong, they could be like living in a mall or subway station. This was one of my all-time more popular posts. (+1)
  • There are new algorithms out there for aggregating and synthesizing large amounts of scientific literature. Maybe this can increase the returns to R&D and help boost innovation. (+1)
  • There will be several international conferences in 2015 with potential to make real progress on financial stability and sustainability. The phrase “deep decarbonization” has been uttered. (+1)
  • Some evidence suggests that the oceans have absorbed a lot of global warming over the past decade or so, preventing the more extreme range of land surface warming that had been predicted. This is a good short- to medium-term trend, but it may not continue in the long term. (+0)

change during December 2014: -12 + 6 = -6

Hope for the Future Index (end of December 2014): -2 -6 = -8

A realistic leverage point for one-planet living: more compulsory vacation in the rich world

This article in System Dynamics Review advocates requiring more vacation time as a tool to decelerate growth in humanity’s ecological footprint. The idea is logical enough, but politically very hard if you ask me. The only way it might be politically possible is in the wake of a crisis, like a famine or sudden shift in climate, that is big enough to be a major wakeup call to the rich countries but small enough that it doesn’t kill a big fraction of humanity (which would decrease our ecological footprint footprint of course, but at an obviously horrible cost.)

As envisioned by Keynes in Economic Possibilities for our Grandchildren, reducing work hours could make sense if it is done in parallel with productivity and wealth increases, and policies that address a fair distribution of the new wealth created by those productivity increases. This brings us back to trying to steer economic and technological growth in a more sustainable direction, trying to at least postpone and limit the next crisis, but having some ideas on how we might take advantage of the next crisis when it happens, while hoping it is not the one that wipes us out.

taxi medallions and creative destruction

The Washington Post has a pair of interesting articles on taxi medallions. The first article claims that taxi medallions have been the “best investment in America for years”:

In New York, taxi medallions have topped $1 million. In Boston, $700,000. In Philadelphia, $400,000. In Miami, $300,000. Where medallions exist, they have outperformed even the Standard & Poor’s 500-stock index. In Chicago, their value has doubled since 2009.

A medallion is an asset that an entrepreneur or corporation can buy. They then rent out the right to use the medallion, receiving an income while hoping the asset will appreciate, which in the past it always has. Not surprisingly, since they have been such a good investment, there is a whole financial industry that has grown up around them, which is the focus of the second article. There are companies who specialize in lending to taxi medallion investors.

The 23-page market report warns of “financial ruin” for Medallion Financial Corp., a 70-year-old company that has long lent money to drivers and investors in New York, Chicago and Boston looking to buy expensive taxi medallions. The coveted assets give owners the right to operate taxicabs, and for decades they have been the best investment in America, providing a steady business for a company that goes by the ticker symbol TAXI.

But the market report, released to the media on Thursday at a time when transportation companies Uber and Lyft are threatening established taxi markets across the globe, predicts a much darker future. “Medallion Financial,” it reads, “has left itself and its shareholders exposed to an economic reckoning rarely observed in free-market economies – the collapse of an asset class propped up by decades of government-sponsored, monopolistic entry barriers with the sudden, unconstrained introduction of new supply.”

So it’s very clear why the owners of these assets are fighting for government regulation to outlaw use of the new technologies that might provide better service and better value. They might hold back the tide for awhile, but technology and consumer expectations will continue to evolve, and ultimately history is not likely to be on their side.

 

best of best of 2014

This time of year, you pretty much have to do a “best of” post. I’ll get to a review of some of my own posts eventually, but in the meantime here are a handful of “best of” posts. I actually don’t know if they are the best of the best of, but they are just a few that caught my eye.

  1. from Wired, The Best and Worst in a Tumultuous Year for Science: Despite the annoyingly un-reader-friendly slide show format, there are some serious eye openers here, such as synthesis of completely new, man-made DNA base pairs; custom-designed monkeys with a “gene-editing system”; a potentially huge breakthrough on diabetes; and a study concluding that the number – not the number of species, but the actual number of wild animals – has decreased by half in the last 40 years.
  2. Longreads Best of 2014: Business Writing: This links to some great articles on education reform, the status and future of Microsoft, and Airbnb. But be warned, these are some seriously long reads!
  3. Economist Money talks podcast, End of year edition. I would always rather read the transcript, but still this goes through some major trends from the year like oil prices, financial regulation, Uber and Lyft, and is worth a listen.
  4. from Wired again, The Best Science Visualizations of the Year. Some interesting ones depict “genetic activity of ocean bacteria”, loss of Arctic summertime sea ice, and the origin and early spread of AIDS.
  5. From Urbanful, Film’s 6 coolest (fictional) hydrid cities. Yes, the Los Angeles version of Blade Runner makes it. So do Gotham City and Metropolis, which are described as “New York by night” and “New York by day”. Finally, “Big Hero 6, the first collaboration between Disney and Marvel, takes place in the futuristic city of San Fransokyo, a fusion of San Francisco, California and Tokyo, Japan.”
  6. One more from Wired: The Craziest Sci-Fi Fantasies That Got Closer to Reality This Year. There’s plenty of Star Wars vs. Star Trek here, but my favorites are that you can now get your dog cloned in South Korea, and a “cheetah robot”.

Happy new year!