Category Archives: Web Article Review

automatic fiscal stabilizers

This doesn’t sound like an exciting topic, but I have been thinking, if the federal government decided to match metro-scale infrastructure projects say, between 25 cents and 75 cents on the dollar, and vary that amount based on economic conditions, what kind of trigger would you use for the economic conditions. My initial thought is to base it on unemployment – maybe 25 cents on the dollar if unemployment is below 5%, 50 cents if it is 5-7%, and 75 cents if it goes over 7%. But I just made that up based on no data other than a vaguely remembered undergraduate economics class in the 1990s. Here is a serious idea called the Sahm indicator:

The “Sahm indicator” measures the difference between the three-month moving average of the unemployment rate and its minimum over the prior 12 months (see chart). The use of the unemployment rate avoids the long lags (and frequent large revisions) associated with other indicators (like GDP). Since 1970, whenever the Sahm indicator crossed the threshold of 0.5%, a recession was underway―there were essentially no false signals. Moreover, the trigger occurred early in these downturns (on average within 4 months of the start). Sahm also proposes using an unemployment rate test to turn the stabilizers off. To avoid a premature return to fiscal austerity, she suggests deactivating programs when the unemployment rate falls to a level that is less than 2 percentage points above the initial trigger.

The infrastructure projects have to be ready to go, and part of plans, not just projects. Maybe you could set aside some of the money in a maintenance trust fund, which gets released to local metropolitan area governments to give them some relief in tough times. Maybe federal or state workers could be trained to do basic maintenance tasks. This is really the issue we saw after the 2007-2008 recession – how do you get people hired and trained and contracts and construction plans all in place fast enough to make a difference economically. It’s hard to do that and still build smart, thoughtful, future-ready infrastructure. But catching up on unglamourous deferred maintenance – think fixing potholes, lining leaky pipes, etc. could make sense.

UAE and AI

A couple interesting facts I learned in this article: (1) The United Arab Emirates has a “Minister of AI” and (2) 89% of workers in the country are foreign-born. The author makes a case that the citizens of the country value their leisure time more than westerners and are willing to embrace state ownership of the means of production with as much automation as possible.

The Poor People’s Moral Budget

This report tries to quantify the costs of inaction on a lot of America’s social and environmental problems, and makes the case that the cost of inaction is higher than the cost of action. I tend to buy this, although they don’t give references in their summary and I bet if you dig deeper they may have cherry picked studies that produce the largest savings. Still, it illustrates how easily politicians can trick people by comparing the cost of action to an assumed zero cost of inaction, which is never the case. I don’t how you would go about educating the public about that, other than starting in kindergarten and teaching people how to look at evidence, think and draw conclusions.

the Amazon

No, not Amazon.com. As I was explaining to my six year old son recently, before it was a tech company, it was a river and a river basin. Anyway, if you want to be depressed, you can read this Intercept article stating that the current Brazilian government is systematically and intentionally trying to destroy the rain forest as fast as possible.

In the last half-century, about one-fifth of this forest, or some 300,000 square miles, has been cut and burned in Brazil, whose borders contain almost two-thirds of the Amazon basin. This is an area larger than Texas, the U.S. state that Brazil’s denuded lands most resemble, with their post-forest landscapes of silent sunbaked pasture, bean fields, and evangelical churches. This epochal deforestation — matched by harder to quantify but similar levels of forest degradation and fragmentation — has caused measurable disruptions to regional climates and rainfall. It has set loose so much stored carbon that it has negated the forest’s benefit as a carbon sink, the world’s largest after the oceans. Scientists warn that losing another fifth of Brazil’s rainforest will trigger the feedback loop known as dieback, in which the forest begins to dry out and burn in a cascading system collapse, beyond the reach of any subsequent human intervention or regret. This would release a doomsday bomb of stored carbon, disappear the cloud vapor that consumes the sun’s radiation before it can be absorbed as heat, and shrivel the rivers in the basin and in the sky…

Imazon, a Brazilian research center, reports deforestation in the first months of 2019 jumped more than 50 percent compared to the amount during the same period in 2018. Half of this deforestation has occurred illegally in protected areas, including hundreds of Indigenous lands that cover a quarter of Brazil’s Amazon and provide a crucial buffer for much of the rest. (In the rainforest bastion state of Amazonas, Indigenous lands account for close to a third of the standing forest.) The Indigenous groups of the region have seen this before. During the runaway deforestation of the 1970s, ’80s, and ’90s, they witnessed and were devastated by an “arc of fire” that blazed along the routes of the first penetration roads into the western Amazon. By the late 1980s, a burning crescent swept down from the northern Amazonian city of Belém, through the states of Pará, Mato Grosso, Rondônia, and Acre. It burned brightest in Rondônia, where the smoke and ash from hundreds of raging fires were visible to the naked eyes of astronauts in high orbit.

the India water situation

I’m reading that a major city in India, Chennai, has run out of water. (This article is a couple weeks old – the situation might have changed since then, but they are on a knife edge regardless.) Chennai is India’s sixth largest city, with a population around 4 million. It is also a major business center. My employer for example has a large operation in Chennai, and it is not exactly what I would call a major multinational corporation. So if professional workers are being told to go home and get in line for drinking water rations, that sounds pretty serious.

I remember hearing about groundwater depletion in India for years, and it appears that has gotten to the point where if rainfall patterns are unexpected, there is no groundwater to fall back on as they have in the past. And if cities don’t have drinking water, what does that mean for industry and agriculture? This would seem to be bad news for the food supply. Sure, India can import food, but what happens when this occurs in other food-producing countries (like the U.S. Great Plains and major rice growers in Southeast Asia), and India is also competing with China and other populous countries in Asia and Africa for dwindling food stocks. Food is the nexus of land, water, and climate.

It is not just Chennai. According to the World Economic Forum,

As of 10 June, around 44% of the country was affected by various degrees of drought, due to a heatwave that has seen Delhi record its highest ever June temperature of 48℃. While south of the capital, the Rajasthan city of Churu saw highs of more than 50℃, making it one of the hottest places on Earth.

Around 600 million people are dealing with high-to-extreme water shortages, according to a 2018 report by NITI Aayog, a policy think tank for the Indian government…

By 2030, it’s predicted that 40% of the population will have no access to drinking water – and 21 cities, including Chennai and New Delhi, will run out of groundwater, impacting 100 million people, according to NITI Aayog.

Here are a few more eye-opening, if not jaw-dropping, quotes from Hong Kong-based Asia Times:

The southwest monsoons remain the biggest source of water in the subcontinent. The monsoons lead to a combination of water sources supporting human habitats that includes glaciers, surface irrigation and ground water. But redundancy and surplus have gone missing from this once abundant system. Taking their place are galloping shortages…

Mukherjee is one of the editors of a landmark study that was published earlier this year. It predicts a terrible loss of the glaciers that dot the Hindu Kush-Himalaya region. “The Hindu Kush Himalaya Assessment” says that even if urgent global action on climate change is able to limit global warning to 1.5 degrees centigrade, it will still lead to a loss of a third of the glaciers in the region by the year 2100…

This has major implications for India, China, Pakistan, Nepal and Bangladesh. While the nearly 250 million who live in the Hindu Kush-Himalaya region will be most impacted from the outset, another 1.65 billion people who depend on the glacier-fed rivers are primarily at risk.

So there you have it – India historically has been supplied by redundant water sources including glacier-fed rivers, groundwater, and seasonal rainfall. Two of those three seem to be in doubt, and that leaves them at the mercy of whether the monsoon happens as expected each year or not.

India is a major democracy with a lot of technical and agricultural know-how. If they are not solving these problems, it does not seem to me to bode well for the rest of the world.

It also occurs to me that reducing carbon emissions is not the solution to this urgent problem. At least, governments can’t put all their eggs in that basket. They will have to invest in major water conservation and water reuse initiatives, and possibly high-tech and energy intensive measures like desalination.

more news from the yeast vats

This article in Scientific American is about using fungus to generate everything from building materials to human organs to meat to substitutes to plastics.

Mycelium’s fast-growing fibers produce materials used for packaging, clothing, food and construction—everything from leather to plant-based steak to scaffolding for growing organs. Mycelium, when harnessed as a technology, helps replace plastics that are rapidly accumulating in the environment.

Mycelium also provides a cruelty-free way to create meatlike structures with a much smaller environmental footprint than traditional livestock, reducing greenhouse gas emissions, the use of food crops for feed and land use conversion. All these benefits come with little environmental cost: the process of growing mycelium results in limited waste (mostly compostable) and requires minimal energy consumption.

deliberate practice

Open Culture has a post with lots of links to ideas on the best ways to practice something new. Hint: just repeating bad habits doesn’t do the trick.

Psychologist Anders Ericsson, the single figure most closely associated with deliberate practice, draws a distinction with what he calls naive practice: “Naive practice is people who just play games,” and in so doing “just accumulate more experience.” But in deliberate practice, “you actually pinpoint something you want to change. And once you have that specific goal of changing it, you will now engage in a practice activity that has a purpose of changing that.”

So it turns out that experience and wisdom aren’t the same thing after all. I would say you can’t have wisdom without experience, but you can have experience without wisdom.

Universal Basic Income, VAT, and baby bonds

A few 2020 Presidential contender highlights:

  • Andrew Yang (polling at about 1%) is promoting a Universal Basic Income of $1000/month for all U.S. citizens 18 and older regardless of income. He would pay for it by scaling back some other assistance programs and instituting…a VAT.
  • Cory Booker (polling at about 2%) is promoting “baby bonds”, where every baby gets a $1000 bond annually, and low-income children get up to an additional $2000 per year.

These are all ideas that (any) Democratic President and Congress could explore together, if they were to get a chance and managed to keep the corporate lobbyists at bay. I am 1000% in favor of VAT. It is just one of those things that all other modern countries do and the U.S. does not. It works and we just need to do it. Other taxes people hate can be reduced.

Both the UBI and baby bond ideas are supposed to address inequality quickly. The baby bond idea is supposed to particularly help racial disparities in wealth very quickly, but there is no reason the UBI could not do that with some fine-tuning. I like the idea of setting kids up with assets in principal, but in practice I am afraid unscrupulous relatives, Wall Street and payday lenders will find a way to take advantage of them. The UBI would essentially just be a “Social Security for All” scheme. We have the bureaucracy for that all set up and ready to go, so it seems practical to me. The only other difference I see between the two is that the government can more easily go back on a promise to pay you in the future than it can take money away from you that it has already paid. But of course it can do either, let’s not be naive.

My verdict – I’d like to see a VAT and a carbon tax used to fund education, infrastructure, and research. All of these things should help keep people busy if technology really does lead to unemployment. People can study to upgrade their knowledge and skills, design and build infrastructure and other types of capital goods, or go into research and teaching. Unemployment and disability insurance could also be beefed up to cover the gaps.