Tuesday, September 30, 2008

The Democratic Tendency

Deogolwulf explains The Democratic Tendency of the modern Brit — or American, or European, really:
He notices that:
(1) Good government is lacking (in whatever way he might define it: fostering liberty, benevolence, lollipops for all, etc.)
He assumes that:
(2) Democracy is good government
He infers that:
(3) Democracy is lacking
And, having furthermore assumed that all good government is democratic, and wishing for more good government, he concludes that:
(4) We need more democracy.

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Siamese Twins

The original "Siamese twins" were a pair of conjoined twins, Chang and Eng Bunker, who were born on May 11, 1811 in Siam (now Thailand), in the province of Samutsongkram, to a Chinese fisherman (Ti-eye) and a half-Chinese/half-Malay mother (Nok).

They were joined at the sternum by a small piece of cartilage; modern surgeons would have easily separated the two.

In 1829, they were discovered by a British merchant named Robert Hunter, and he went on to exhibit them as a curiosity during a world tour.

Here's where the story gets particularly odd:
Upon termination of their contract with their discoverer, they successfully went into business for themselves. In 1839, while visiting Wilkesboro, North Carolina, the twins were attracted to the town and settled there, becoming naturalized United States citizens.

Determined to start living a normal life as much as possible, the brothers settled on a plantation, bought slaves, and adopted the name "Bunker". On April 13, 1843, they married two sisters: Chang to Adelaide Yates and Eng to Sarah Anne Yates. Chang and his wife had 10 children; Eng and his wife had 11. In time, the wives squabbled and eventually two separate households were set up just west of Mount Airy, North Carolina in the community of White Plains – the twins would alternate spending three days at each home. During the American Civil War Chang's son Christopher and Eng's son Stephen both fought for the Confederacy. The twins died on the same day in 1874. Chang, who had been in declining health for several years, died first; Eng died one hour later.
In fact, the Bunker clan has more branches than a loblolly pine:
Their descendants — some 1,500 — have scattered across the country, but many still live in Mount Airy, a town of 8,000 north of Winston-Salem, where the slow roll of the Piedmont plateau lifts to the Blue Ridge Mountains.
(Hat tip to Yana.)

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How China has created a new slave empire in Africa

Peter Hitchens was in a car attacked by a Congolese mob, but he got away. Why did these semi-starved miners want him dead?
The diggers feared — and their evil, sinister bosses had worked hard on that fear — that if people like me publicised their filthy way of life, then the mine might be closed and the $3 a day might be taken away.

I can give you no better explanation in miniature of the wicked thing that I believe is now happening in Africa.

Out of desperation, much of the continent is selling itself into a new era of corruption and virtual slavery as China seeks to buy up all the metals, minerals and oil she can lay her hands on: copper for electric and telephone cables, cobalt for mobile phones and jet engines — the basic raw materials of modern life.

It is crude rapacity, but to Africans and many of their leaders it is better than the alternative, which is slow starvation.
On the one hand, he notes that his journalism — which is sure to trigger the "international community" into action — will cost them their jobs, and that their only alternative is slow starvation, yet he clearly thinks he's doing the Lord's work by stopping the "evil" Chinese "slavers" buying up minerals from Africans.

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From 12 years onwards you learn differently

From 12 years onwards you learn differently than in your earlier years:
Eight-year-old children have a radically different learning strategy from twelve-year-olds and adults. Eight-year-olds learn primarily from positive feedback ('Well done!'), whereas negative feedback ('Got it wrong this time') scarcely causes any alarm bells to ring. Twelve-year-olds are better able to process negative feedback, and use it to learn from their mistakes. Adults do the same, but more efficiently.

The switch in learning strategy has been demonstrated in behavioural research, which shows that eight-year-olds respond disproportionately inaccurately to negative feedback. But the switch can also be seen in the brain, as developmental psychologist Dr Eveline Crone and her colleagues from the Leiden Brain and Cognition Lab discovered using fMRI research. The difference can be observed particularly in the areas of the brain responsible for cognitive control. These areas are located in the cerebral cortex.

In children of eight and nine, these areas of the brain react strongly to positive feedback and scarcely respond at all to negative feedback. But in children of 12 and 13, and also in adults, the opposite is the case. Their 'control centres' in the brain are more strongly activated by negative feedback and much less by positive feedback.
(Hat tip to FuturePundit.)

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We need a Door Number Three for IT professionals

Cringely says, We need a Door Number Three for IT professionals:
I have a friend of 20 years who is in a key technical role at a very large company. He's too vital to the company to risk losing but too geeky to fit in. He's on the craft (non-management) salary scale, but way higher than he ought to be for having no direct responsibility. All he does, in fact, is from time to time save his company from ruin. And even more rarely, he saves all the rest of us from ruin, too, in ways I am not at liberty to explain. How do you manage such a guy? Where he works they have him report to the CEO. The Big Guy has 5-6 direct reports and one of them — my friend — doesn't manage anyone or anything.

THAT'S Door Number Three.

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Somali Pirates Involved in Shootout, Leaving 3 Dead, U.S. Official Says

Somali Pirates Involved in Shootout, Leaving 3 Dead, U.S. Official Says:
Disagreements between Somali pirates holding a Ukrainian ship laden with tanks and heavy weapons escalated into a shootout and three pirates are believed dead, a U.S. defense official said Tuesday. The pirates denied the report.

The U.S. destroyer USS Howard and several other American ships have surrounded the cargo ship Faina, which was hijacked Thursday and is now anchored off the lawless coast of Somalia. The pirates have demanded a ransom of $20 million and the U.S. Navy cordon aims to prevent them from taking any of the weapons ashore.

The official in Washington who reported the shootout spoke on condition of anonymity because he was not authorized to speak on the record. He refused to elaborate.

But the pirate spokesman insisted the report was not true. "We didn't dispute over a single thing, let alone have a shootout," pirate spokesman Sugule Ali said by satellite telephone Tuesday.

He said the Somali pirates were celebrating the Muslim feast of Eid al-Fitr despite being surrounded by American warships and helicopters.

"We are happy on the ship and we are celebrating Eid," Mr. Ali said. "Nothing has changed." The Islamic feast marks the end of the holy month of Ramadan.
Do young Somalis take a career-aptitude test that points to options like pirate spokesman?

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The Crazy Dream-Car

Wil Shipley — who owns a Lotus Elise, the gas-powered car the Tesla is built on — calls the Tesla "the the crazy dream-car that a kid might design in his naivety of how the world really works, except some engineers didn't get the memo on what's possible, and went ahead and built it":
It's crazy-fast. It handles like a jet fighter. It gets the equivalent of about 140 mpg. It has no gears. It requires almost no maintenance.e It's gorgeous. It's whisper-quiet. And, in Seattle, runs off hydro power.

So, yes, I test-drove a Tesla today, for five laps on a closed course in the parking lot of a defunct K-mart. Then I took my supercharged Lotus Elise around the same course. (The Tesla I drove was an engineering prototype but is said to be very close to the one I'll get next year.)
[...]
Remember: this car is NOT an automatic: there are no damn gears. It's not shifting for you; there's no annoying pauses where the car decides what gear you might want, right in the middle of your burn. The engine is basically hooked up directly to the damn wheels. It's amazing. It has that responsive feeling of when you are driving a normal car in first gear, except it has that no matter how fast you are going.
[...]
Normally, features like "traction control" or "no shifting" put me off of a car, because they essentially translate to "low-performance-idiot-mode." You turn them on and you feel like the car is driving and you're a passenger. I've hated 'em in Ferraris and Mercedes SLs.

With the Tesla, these features are put in to allow you to drive harder and faster and still feel completely in command. I am driving. I feel the road. I feel the wheels.

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Branagh in talks to direct 'Thor'

Kenneth Branagh is in talks to direct 'Thor' — aye, verily:
Kenneth Branagh is negotiating to direct Thor, the next Marvel Comics property that will be turned into a live-action film by Marvel Studios. Pic will be released in 2010.

Marvel Studios chief Kevin Feige's choice of Branagh is surprising, as Branagh hasn't really directed an action-heavy film since his debut on Henry V, a bloody telling of the British king's conquest of France.

Branagh is the latest in a string of directors — such as Jon Favreau (Iron Man), Christopher Nolan (the Batman franchise) and Gavin Hood (X-Men Origins: Wolverine) — with arthouse roots taking on big-budget comicbook fare.

Marvel will set a distributor for Thor shortly.

Thor comicbook adaptation, penned by Mark Protosevich, follows disabled medical student Donald Blake, who has an alter ego as the hammer-wielding Norse god Thor.

Marvel will self-finance the film via its $500 million credit facility through Merrill Lynch. Marvel used that coin to fund both Iron Man and The Incredible Hulk and will do the same for the Iron Man sequel that has director Favreau and star Robert Downey Jr. returning.

The Thor negotiations come during a resurgence for Branagh. He's currently drawing raves on the London stage in the title role of Ivanov, and he'll next be seen acting in the Richard Curtis-directed The Boat That Rocked and the Bryan Singer-helmed Valkyrie.
Valkyrie is not, by the way, a Norse-mythology movie.

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Monday, September 29, 2008

Finance is interested in you

You may not be interested in finance, to paraphrase Trotsky, but finance is interested in you, Mencius Moldbug notes:
1. We do not have a free-market financial system.

2. We have never had a free-market financial system.

3. Leaving the financial system to "work things out on its own" will not produce a free-market financial system. It will produce a smoking heap of rubble.

4. Paulson's bailout is, if anything, far too weak. Our financial system is part of the government. The proper first step is to stop lying about this. This means nationalizing the banks. This is not an expansion of government, but a recognition of its actual size. It is not an expenditure, but a revision of accounting to reflect reality.

5. A free-market financial system would be way cool. More important, it would be extremely stable. But the only way to create one is to build it right from the start. If you have a car and you want a motorcycle, sell your car and buy a motorcycle. Don't decide to call your car a "four-wheeled motorcycle," and don't think unscrewing two of the wheels will solve the problem.

6. Therefore, the government should close down the financial system we have now and replace it with one that doesn't suck. What is the probability that this will happen? Zero. But at least you know.

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The housing market works pathologically

The housing market works pathologically, Edward Leamer notes:
A normal market works because demand curves are downward sloping, but for homes demand curves can be upward sloping. Declining prices in many regions are not bringing buyers back to the market. Price declines are creating the expectation of more price declines to come, and encouraging prospective buyers to postpone their decisions, which causes more price declines, and eventually overshooting of prices. When prices get back to normal and buyers have not returned, that’s when we need to find ways to bring the buyers back.
(Hat tip to Art De Vany.)

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Carbon nanotechnology in a 17th-century Damascus sword

Researchers have found what might be called carbon nanotechnology in a 17th-century Damascus sword:
Damascus blades were forged from small cakes of steel from India called wootz. All steel is made by allowing iron with carbon to harden the resulting metal. The problem with steel manufacture is that high carbon contents of 1–2% certainly make the material harder, but also render it brittle. This is useless for sword steel since the blade would shatter upon impact with a shield or another sword. Wootz, with its especially high carbon content of about 1.5%, should have been useless for sword-making. Nonetheless, the resulting sabres showed a seemingly impossible combination of hardness and malleability.

Reibold's team solved this paradox by analysing a Damascus sabre created by the famous blacksmith Assad Ullah in the seventeenth century, and graciously donated by the Berne Historical Museum in Switzerland. They dissolved part of the weapon in hydrochloric acid and studied it under an electron microscope. Amazingly, they found that the steel contained carbon nanotubes, each one just slightly larger than half a nanometre. Ten million could fit side by side on the head of a thumbtack.

Carbon nanotubes are cylinders made of hexagonally-arranged carbon atoms. They are among the strongest materials known and have great elasticity and tensile strength. In Reibold's analysis, the nanotubes were protecting nanowires of cementite (Fe3C), a hard and brittle compound formed by the iron and carbon of the steel. That is the answer to the steel's special properties — it is a composite material at a nanometre level. The malleability of the carbon nanotubes makes up for the brittle nature of the cementite formed by the high-carbon wootz cakes.

It isn't clear how ancient blacksmiths produced these nanotubes, but the researchers believe that the key to this process lay with small traces of metals in the wootz including vanadium, chromium, manganese, cobalt and nickel. Alternating hot and cold phases during manufacture caused these impurities to segregate out into planes. From there, they would have acted as catalysts for the formation of the carbon nanotubes, which in turn would have promoted the formation of the cementite nanowires. These structures formed along the planes set out by the impurities, explaining the characteristic wavy bands, or damask (see image at top), that patterns Damascus blades.
Apparently the ore used to produce wootz came from Indian mines that were depleted in the eighteenth century, and thus the ability to manufacture Damascus swords was lost.

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How To: Take Down Somali Pirates

Why is David Axe writing about how to take down Somali pirates?
The U.S. Navy destroyer Howard continues to shadow the Ukrainian vessel Faina, which Somali pirates seized last week. Faina is loaded with around three dozen T-72 tanks and other weapons reportedly bound for Kenya. "Howard is on-station," Commander Curtis Goodnight, Howard's skipper, told a Navy reporter. "My crew is actively monitoring the situation." The destroyer has even established unspecified "bridge-to-bridge" comms with the hijacked ship.

What might the Navy do if ordered to secure the seized weapons? Two recent French anti-piracy raids might offer a preview. In one raid in April, French commandos in helicopters, operating from ships, chased pirates onto land. A sniper in one chopper shot out the engines of the pirates' vehicles; another chopper landed commandos to grab six of the startled Somalis.

In another raid in September, French commandos parachuted into the water near a hijacked yacht, under the cover of darkness, and swam a short distance to board, unseen. They shot dead one pirate, captured others and freed the yacht's owners.

So if the Pentagon decides to take out the Faina pirates, how's it going to go down? Four words: Djibouti (where U.S. Special Operations Command has a base north of Somalia), helicopters, Navy SEALs.

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America Must Rescue the Bonuses at Goldman Sachs

Michael Lewis satirically pleads that America Must Rescue the Bonuses at Goldman Sachs:
The total collapse of the global financial system is one thing — everyone at Davos in January saw that coming. But the shrinkage of the Goldman Sachs Group Inc. bonus pool is another. Whatever else the Treasury achieves it must know that if the employees of Goldman suffer any sort of pay cut, it will be judged to have failed. And our country may never recover.

Last year Goldman paid its employees $20 billion, 44 percent of the firm's revenue. Chief Executive Officer Lloyd Blankfein took home $68.5 million, and many otherwise ordinary human beings took home $10 million or more.

This inspired young people everywhere, many of whom may have privately wondered whether it was still worth their time to become investment bankers. Torn between a future in, say, the law and the manufacture of mezzanine CDOs they sucked up their courage and plunged onto Wall Street. And thank God for that: We needed the best and the brightest to get us into this mess, and we'll need the best and the brightest to get us out of it.
[...]
To its credit the government has thus far done pretty much all it can to prevent any suffering inside the firm. Its extreme sensitivity to Goldman's pain is the only way to explain its actions thus far.
[...]
Think of Wall Street as a poker game and Goldman as the smartest player. It's sad when you think about it this way that so much of the dumb money on Wall Street has been forced out of the game. There's no one left to play with. Just as Goldman was about to rake in its winnings and head home, the U.S. government stumbles in, fat and happy and looking for some action. I imagine the best and the brightest inside Goldman are right this moment trying to figure out how it uses the Treasury not only to sell their own crappy assets dear but also to buy other people's crappy assets cheap.

At any rate, it won't take long for Goldman Sachs to figure out how to make that $700 billion work for Goldman Sachs. This you can trust them to do. After all, Warren Buffett just did.

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Starship Troopers Meets G.I. Joe

I'm not sure that I'd describe the XM25 Individual Air Burst Weapon as Starship Troopers Meets G.I. Joe — but it does look like a good choice for hunting xenomorphs:
Current infantry weapons can shoot at or through an obstacle concealing enemy threats, but the Army has been trying for years to come up with a weapon for engaging targets behind barriers without resorting to mortars, rockets or grenades — all of which risk greater collateral damage. After fits and starts using a 20mm rifle housed in a bulky, overweight, complicated shell, technology finally caught up to shave the XM25 from 21 pounds to a little more than 12 pounds.

If the XM25 does what its developers hope, it will be able to fire an air-bursting round at a target from 16 meters away out to 600 meters with a highly accurate, 360-degree explosive radius.

The XM25 is about as long as a collapsed M4, weighs about as much as an M16 with an M203 grenade launcher attached and has about as much kick as a 12-gauge shotgun, said Barb Muldowney, Army deputy program manager for infantry combat weapons.

The semi-auto XM25 comes with a four-round magazine, though testers are looking at whether to increase the capacity to as much as 10 rounds.

Brains are what really makes this Buck Rogers gun work — it has them. The weapon combines a thermal optic, day-sight, laser range finder, compass and IR illuminator with a fire-control system that wirelessly transmits the exact range of the target into the 25mm round's fuse before firing.

A Soldier can aim the XM25 at a wall concealing a sniper, for example, but "dial in" or adjust the distance by an additional meter above the target. When fired, the Alliant Teksystems-built round will explode above the enemy's position, essentially going around the obstruction, Muldowney said.
Military-grade weapons aren't cheap — but the XM25 seems oddly inexpensive next to the M4 carbine:
The weapon costs about $25,000 each, but experts were quick to point out that a fully-loaded M4 for optics and pointers costs pretty close to $30,000. Each ATK-made 25mm round costs about $25.

As Heckler and Koch, makers of the weapon itself, and L3 Communications — which makes the fire control system — crank out more weapons, the Army plans to push them out to the field for testing beginning in March 2009. That could include the first use of such a weapon in combat, Cline said.

If all goes according to plan, Soldiers might have their first XM25s in hand by 2014, far sooner than the Army's small arms community had predicted even last year.


(I have mentioned the XM25 before.)

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More virulent strain of herpes hitting sumo wrestlers

More virulent strain of herpes hitting sumo wrestlers:
The herpes simplex virus type 1 (HSV-1) is notorious among the general public for causing unsightly cold sores and sore throats.

The symptoms recur because the pathogen can hide in nerve cells for a long time and then leap out.

But a more extreme form of the disease occurs among athletes who take part in close-contact sports, such as sumo, rugby and judo.

Known as Herpes gladiatorum, or scrumpox, it causes painful, virus-filled blisters to form on the face and the neck that can damage the skin. Fever, headaches and an infection of the lymph nodes can also result.
[...]
In a study published in a British journal, Japanese scientists looked at blood samples from 39 sumo wrestlers in Tokyo who had been diagnosed with H. gladiatorum between 1989 and 1994.

Tests revealed that some of the wrestlers had been infected only once, while in others, the disease had recurred several times.

The culprit for this was a variant of HSV1-1 called BgKL, which reactivates, spreads more efficiently and causes more severe symptoms than other strains, they found.

The authors, led by Kazuo Yanagi of the National Institute of Infectious Diseases in Tokyo, believe the H. gladiatorum was transmitted by other wrestlers in the "stable" where they live and train together.

"Two of the wrestlers died as a result of their infections, so cases like this do need to be investigated," Yanagi said in a press release.

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Poor homeowners and greedy bankers correctly assessed the market

Joe Torben notes that poor homeowners and greedy bankers correctly assessed the market:
Any number of things could have happened, but the three most likely were:

1. The bubble will burst after I get out or after I have made enough off it to come out well anyway. This is essentially true for most people getting in before 2005 or so. ("There are no losses")

2. The bubble will burst while I'm still in. This will force me to leave my house and rent, but if I hadn't bought, I would have rented anyway. I had a house for a few years, so I'm really better off. For the bankers: a few years of extravagant bonuses and a job loss may be better than no job if I hadn't started at the bank in the first place. However, the major financial burden will fall on the taxpayers. ("Profits are private, losses are socialized")

3. The bubble will burst, and those responsible will have to foot the bill. ("Profits and losses are private")

Doing what most everyone did was correct in scenario 1 and 2, but incorrect in scenario 3. After the fact, we know that scenario 2 was the one that came to pass. Suggesting that this was in some way unexpected seems a bit silly to me. Suggesting that people should have behaved differently, even though we know now that it was in fact in their best interest to act the way they did seems more than a bit silly to me. In fact, that is downright idiotic!

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Pundits As Moles

Robin Hanson describes Pundits As Moles:
In the spy business a "mole" pretends to work for A, but really works for B. The mole may usually do very little for B, and B may avoid acting visibly on any info the mole passes on. The idea is to move the mole up the A hierarchy, and to wait for rare high leverage situations.

Unfortunately something similar seems to hold for pundits, columnists, etc. Before becoming a pundit someone may spend a long career as a trustworthy academic or journalist, giving careful measured evaluations of the small issues before them. As a pundit they may even usually give thoughtful reasoned commentary on issues of moderate importance.

But every four years, when a major election is at stake, or when a big crisis appears, styles change. In their world folks mutter, "pull out all the stops, this is really important." They may retain the outward appearance of keeping to their previous standards, but in fact they start to say whatever it takes to push "their side."

Just as moles mean we can rely on our spies least when we need them most, pushy election pundits also imply we can rely on our pundits least when we need them most.

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Competent Elites

Eliezer Yudkowsky has dealt with some surpisingly competent elites:
One of the major surprises I received when I moved out of childhood into the real world, was the degree to which the world is stratified by genuine competence.
[...]
I was invited once to a gathering of the mid-level power elite, where around half the attendees were "CEO of something" — mostly technology companies, but occasionally "something" was a public company or a sizable hedge fund. I was expecting to be the youngest person there, but it turned out that my age wasn't unusual — there were several accomplished individuals who were younger. This was the point at which I realized that my child prodigy license had officially completely expired.

Now, admittedly, this was a closed conference run by people clueful enough to think "Let's invite Eliezer Yudkowsky" even though I'm not a CEO. So this was an incredibly cherry-picked sample. Even so...

Even so, these people of the Power Elite were visibly much smarter than average mortals. In conversation they spoke quickly, sensibly, and by and large intelligently. When talk turned to deep and difficult topics, they understood faster, made fewer mistakes, were readier to adopt others' suggestions.

No, even worse than that, much worse than that: these CEOs and CTOs and hedge-fund traders, these folk of the mid-level power elite, seemed happier and more alive.

This, I suspect, is one of those truths so horrible that you can't talk about it in public. This is something that reporters must not write about, when they visit gatherings of the power elite.

Because the last news your readers want to hear, is that this person who is wealthier than you, is also smarter, happier, and not a bad person morally. Your reader would much rather read about how these folks are overworked to the bone or suffering from existential ennui. Failing that, your readers want to hear how the upper echelons got there by cheating, or at least smarming their way to the top. If you said anything as hideous as, "They seem more alive," you'd get lynched.
Read the whole thing — and the comments.

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Sunday, September 28, 2008

An Inconvenient Bag

Ellen Gamerman calls the trendy green giveaway of the moment, the reusable shopping bag, An Inconvenient Bag, because it is a case study in how tricky it is to make products environmentally friendly:
"If you don't reuse them, you're actually worse off by taking one of them," says Bob Lilienfeld, author of the Use Less Stuff Report, an online newsletter about waste prevention. And because many of the bags are made from heavier material, they're also likely to sit longer in landfills than their thinner, disposable cousins, according to Ned Thomas, who heads the department of material science and engineering at Massachusetts Institute of Technology.

Used as they were intended, the totes can be an environmental boon, vastly reducing the number of disposable bags that do wind up in landfills. If each bag is used multiple times — at least once a week — four or five reusable bags can replace 520 plastic bags a year, says Nick Sterling, research director at Natural Capitalism Solutions, a nonprofit focused on corporate sustainability issues.
[...]
Finding a truly green bag is challenging. Plastic totes may be more eco-friendly to manufacture than ones made from cotton or canvas, which can require large amounts of water and energy to produce and may contain harsh chemical dyes. Paper bags, meanwhile, require the destruction of millions of trees and are made in factories that contribute to air and water pollution.

Many of the cheap, reusable bags that retailers favor are produced in Chinese factories and made from nonwoven polypropylene, a form of plastic that requires about 28 times as much energy to produce as the plastic used in standard disposable bags and eight times as much as a paper sack, according to Mr. Sterling, of Natural Capitalism Solutions.
[...]
Getting people to actually use the bags is another matter. Maximizing their benefits requires changing deeply ingrained behavior, like getting used to taking 30-second showers to lower one's energy and water use. At present, many of the bags go unused — remaining stashed instead in consumers' closets or in the trunks of their cars. Earlier this year, KPIX in San Francisco polled 500 of its television viewers and found that more than half — 58% — said they almost never take reusable cloth shopping bags to the grocery store.

Phil Rozenski, director of environmental strategies at the plastic bag maker Hilex Poly Co., believes even fewer people remember to use them. Based on consumer surveys conducted by the company, he says roughly the same number of people reuse their bags as bring disposable bags back to the grocery store for recycling — a figure he puts at about 10% of consumers, according to industry data.
[...]
Mr. Shiv also says that according to surveys done by his graduate students, many shoppers say they are less likely to carry a retailer's branded reusable bag into a competing store. "What these bags are doing is increasing loyalty to the store," he says.
This anecdote says a lot:
Sarah De Belen, a 35-year-old mother of two from Hoboken, N.J., says she uses about 30 or 40 plastic bags at the grocery store every week. Late last year, she saw a woman at the supermarket with a popular canvas tote by London designer Anya Hindmarch and promptly purchased one online for about $45.

But Ms. De Belen says she soon realized she'd need 12 of them to accommodate an average grocery run. "It can hold, like, a head of lettuce," she says. Besides, she adds, it's too nice to load up with diapers or dripping chicken breasts.

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The overbuilding problem is going to be behind us early next year

The overbuilding problem is going to be behind us early next year, Edward Leamer suggests:
High rates of homebuilding from 2004 to 2006 gave us about a million more single-family homes than suggested by historical rates of building, illustrated to the right. Since 2006, plummeting rates of building have reduced that home overhang to about 400 thousand units, and we should be back on trend in the stock of homes very early in 2009.
A rough calculation of the remaining excess in home prices can be made by extending the 1975-2002 inflation-adjusted trend in the OFHEO home price index to 2008q2 and comparing that with the actual index. That suggests a remaining overvaluation of 24%. Using the 2008q2 rate of decline in home prices, -5%, and the inflation rate of 2%, it will take a little less than three years for home prices to get back to trend. It seems likely going forward that the inflation rate will be higher and the rate of home price decline greater. It is also the case that some of the excess is a consequence of the low rate of interest. Still it doesn’t seem reasonable to expect this pricing problem to be solved nationwide before the end of 2009 at the earliest when home prices are likely to be down another 10% at least.
The data thus suggest that the overbuilding problem is going to be behind us early next year, when the stock of single-family homes will be back to normal, but the price declines for new and existing homes are likely to go on for at least another year or two.

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Saturday, September 27, 2008

Please think this over

Edward Leamer is Professor of Economics and Management at UCLA. Please think this over, he pleads:
Here are some choice words from the Treasury’s LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY TO PURCHASE MORTGAGE-RELATED ASSETS:
The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
When I first read those words in an e-mail, I thought it was an Internet joke. I was sure the Treasury Secretary would be explaining exactly how he would acquire these assets, since the Devil is in the details. Instead, the Secretary merely wants authority to do whatever he wants. He doesn’t even give us a mission statement, or any metrics for the success of this venture.

I have lots of questions about this and I am sure you have many more:
  • How is the Treasury going to determine the values of those illiquid mortgage-backed securities when Wall Street has failed to do so? Surely their values depend on future home prices and future mortgage default rates. How is the Treasury going to forecast home prices and default rates? Will these forecasts be made public?
  • How is the Treasury going to avoid the winner’s curse: paying more for these assets than anyone else is willing to? More importantly, how can this plan help the financial institutions unless Treasury does pay more for these securities than their current private market auction value, and even more than their current book value, thus in effect making a capital infusion into the banking system?
  • Isn’t there a big risk here for many financial institutions that by standard accounting rules are required to value their mortgage-backed-securities at “market prices” rather than internal prices, if there is a market. Once the Treasury starts buying these illiquid assets, there is a risk of major accounting losses that will raise more insolvency problems rather than less.
  • Is Treasury going to buy these securities from firms that are well-capitalized and don’t need the help as well as from firms that are on the brink of insolvency? In other words, is this a way to rescue the mismanaged firms and keep the poorly performing management in place? If it doesn’t do that, what help can the plan offer?
  • What exactly is the definition of a “financial institution” from which the Treasury will buy mortgage-backed securities? Does it include pension funds, and mutual funds? How about the loan I gave my neighbor that he now refuses to pay back? Am I a financial institution? I would like to be included in this too.
  • How much in losses from this speculative enterprise can taxpayers reasonably expect? What systems will be put in place to limit the losses? Who will be held accountable for losses that exceed the limit? Who besides the taxpayers will have skin in the game?
  • Why not just make a one-time Federal capital infusion into all the troubled banks, and let them do with the mortgage-backed securities whatever they like? That would leave the corpses in the hands of those who know where they are buried.1 Wouldn’t that be a more honest and more efficient way of doing this bailout? Or maybe we should just nationalize the whole banking system? (I don’t mean that!!!)
  • Perhaps most importantly, have we thought at all about the unintended consequences of this government intervention into the capital markets? The Secretary pays a lot of lip service to the moral hazard problem but a much bigger one is the pound of flesh. Don’t think for a minute that Wall Street can walk away with $700 billion of the taxpayers’ money without draconian consequences. We may be opening up a regulation nightmare that will make Sarbanes-Oxley look like a walk in the park. But the Treasury offered no details. Absolutely none. So we are left to guess.

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The Boxer Who Won't Quit

Boxer Ricardo Mayorga has a media-savvy schtick that has led Reed Albergotti to call him The Boxer Who Won't Quit:
After one grueling workout last month in Florida, he toweled off and walked outside the gym. His coach handed him some fresh fruit to eat for recovery and an assistant produced a lighter. Soon Mr. Mayorga was taking a deep drag from a Marlboro, looking relieved and relaxed. "I've been smoking since I was 13," he said. "It seems to be working for me, so why stop?"

Mr. Mayorga's assistant, Anthony Gonzalez, says that when the boxer isn't training, he smokes as many as three packs, or 60 cigarettes, a day.
[...]
As he ascended in boxing, Mr. Mayorga says he originally tried to hide his smoking habit for fear that promoters would scold him. After beating Mr. Lewis in 2002, Mr. Mayorga was sitting in the training room with his coach and smoking a cigarette when Alan Hopper, a publicist for promoter Don King, walked in. His coach frantically grabbed the cigarette and attempted to put it out, but instead of lecturing the fighter, Mr. Hopper told him to light up another one and found him a bottle of beer to take to the press conference. When Mr. Mayorga started taking questions from the media while drinking and smoking, an image was born.

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The New Old Country



Stan Sesser explains how tourists are flocking to The New Old Country:
Places that once struggled to attract tourists now worry about where to put them. Foreign visitors to Krakow last year numbered 2.5 million — almost quadruple the number in 2003. "The word has spread," says Katarzyna Gadek, director of the city's Office of Tourist Development. "When we entered the European Union in 2004, that made a big difference." So has the increased number of direct flights in. Ten years ago, most tourists arrived from Western Europe by bus or train, or they caught a connecting flight in Warsaw.

Another prime example is in Slovenia, once part of the former Yugoslavia (and today often confused with Slovakia to the northeast). Slovenia's capital, Ljubljana (loob-lee-YA-na), went from unknown to trendy in just a few years. But be warned: It has so few hotel rooms that by early June the best places are largely booked for summer.

With its medieval Old Town of clean cobblestone streets and outdoor markets, a 16th-century castle perched on a hill and an array of first-rate restaurants, Ljubljana ranks as one of Europe's most attractive capitals. Plus, mountain lakes and the Adriatic coast are just an hour or two away. I had no idea what I'd find when I went there. But taking everything into account — scenery, food, prices and the friendliness of the people — I think Slovenia could qualify as Europe's single best country for tourism.

Arriving in Ljubljana is like turning the clock back 50 years. The local road from the tiny airport into town is lined with trees and grass. The train station is so close to the Old City that you can walk to most hotels. Tourist information is available at the station in two small rooms, one devoted to transport and the other to local attractions. I asked the man at the tourism counter what happens to people who show up without a reservation in this city of just 16 hotels. "We put them in a hotel further out, in an apartment rental or with a family," he replied. "No one ever has to sleep on a park bench."

I booked my trip just one week in advance — too late for a hotel room — so I made reservations with an apartment-booking agency. Little did I suspect I'd end up in what may be the nicest accommodations I've ever had in Europe. My reward for walking up five flights of stairs (the medieval buildings have no elevators) was a big penthouse apartment in an impeccably renovated building next to Town Hall, with a terrace, modern kitchen and bathroom and high-speed Internet. The price? €120 ($175) a night — less than the cost of a closet-size hotel room in London or Milan.

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Friday, September 26, 2008

Kevin Kelly on the next 5,000 days of the web

Kevin Kelly notes that the Web has only been around for less than 5,000 days, and it's already full of truly amazing stuff — "It's amazing, and we're not amazed!" So he looks at the next 5,000 days of the web:

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'Wall Street' No Longer Exists

'Wall Street' No Longer Exists, Alan Reynolds notes, and the conversion or absorption of all five of Wall Street's big investment banks into commercial banks raises several issues:
First of all, the financial storms over the past year have — before last week — been largely confined to securities markets and to interbank loans among commercial and investment banks. Bank loans to commercial and industrial business, real estate and consumers continued to expand nearly every month. Commercial and industrial loans exceeded $1.5 trillion this August, up from less than $1.2 trillion a year earlier. Real-estate loans exceeded $3.6 trillion, up from less than $3.4 trillion a year ago. Consumer loans were $845 billion, up from $737 billion. Credit standards are tougher, which is surely a good thing, but interest rates for creditworthy borrowers remain low.

The ongoing slow but steady availability of bank credit helps explain the much-remarked contrast between Wall Street and Main Street — the shaky condition of exotic financial markets compared with relatively benign statistics for industrial production, retail sales, employment and the rest of the nonhousing economy. Most people go about their business without depending on investment banks or exotic varieties of commercial paper.

Second, recent events highlight the absurdity of the attempt by several pundits to blame recent problems on "financial deregulation." That complaint was aimed at the Financial Modernization Act of 1999, which passed the House by a vote of 362-57 and the Senate by 90-8, yanking the last brick out of the 1933 Glass-Steagall Act's regulatory wall between commercial banks and investment banks.

If it was somehow possible in today's world of global electronic finance to the rebuild such a wall, that would mean J.P. Morgan could not have bought Bear Stearns, Bank of America could not have bought Merrill Lynch, Barclays could not buy most of Lehman, and Goldman Sachs and Morgan Stanley could not become bank holding companies. It is hard to imagine how things would have worked out in that situation, but it surely would not have been an improvement.

Since the 1933 regulatory wall has collapsed as definitively as the Berlin Wall, all the giant financial conglomerates now face oversight and regulation by the Federal Reserve, the Securities and Exchange Commission, the Comptroller of the Currency and the Federal Deposit Insurance Corp. Innocents who seek security in regulation need to recall, however, that not one of those august agencies exhibited timely foresight or concern about the default risk among even prime mortgages in some locations, or about any lack of transparency with respect to bundling mortgages into securities. People do not become wiser, more selfless or more omniscient simply because they work for government agencies.

Wall Street was always a metaphor, of course, but so are words like "bailout" and "toxic" debt. Nationalization of Fannie Mae and Freddie Mac was a bailout for creditors (who received windfall gains), not for stockholders or executives. The federally enforced shotgun marriage between J.P. Morgan and Bear Stearns at the initially ridiculous price of $2 a share was no bailout for Bear. The 11.3% federal loan to AIG, contingent on the potential expropriation of 80% of shareholder value, is no bailout either.

By contrast, what was done to stop a run on the money-market funds is a real bailout which could encourage them to hold risky paper and also make it tougher for commercial banks to attract deposits. The proposal to buy up mortgage-backed securities is a bailout too, though the beneficiaries are not just the tattered remains of Wall Street. The bailout consists of shifting the risk of loss to taxpayers. Actual losses could not reach $700 billion unless the securities were literally worthless, which would mean the value of the underlying real estate fell to zero.

What was "toxic" for investment banks is not equally toxic for the Treasury Department because the government does not even bother to keep a balance sheet, much less abide by mark-to-market accounting rules. A powerful motive for converting investment banks into commercial banks is to get around those onerous balance-sheet rules that required fire-sale pricing of securities that were virtually unmarketable during a panicky scramble for liquidity. Strict adherence to those rules made patience a vice and a "buy and hold" approach impossible. This confirms what many of us have long been saying about the foolishness of letting arbitrary bookkeeping rules dominate economic reality.

Turning Wall Street into a bunch of commercial banks is a solution of sorts to a problem aggravated by foolish mark-to-market regulations, not by the inevitable demise of the 1933 wall between investment banks and commercial banks. Something good may yet come out of all this, because that wall never made much sense in the first place.

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WaMu Is Seized, Sold Off to J.P. Morgan, In Largest Failure in U.S. Banking History

WaMu Is Seized, Sold Off to J.P. Morgan, In Largest Failure in U.S. Banking History:
WaMu has suffered huge losses but still boasts a strong deposit base and a network of 2,239 branches that bigger banks would have paid dearly for when times were good. In March, with the credit crisis in full bloom, J.P. Morgan offered to acquire WaMu but was spurned in favor of a $7 billion infusion led by the private-equity firm TPG, considered one of the savviest buyout firms. TPG, led by investor David Bonderman, said it will lose $1.35 billion, wiping out its investment.

This is the second time that J.P. Morgan, the second-largest U.S. bank in stock-market value, has been a buyer of last resort. In March, the New York company agreed to purchase Bear Stearns Cos., getting a $29 billion backstop from the federal government.

FDIC Chairman Sheila Bair said that WaMu's downward spiral "could have posed significant challenges without a ready buyer." Referring to J.P. Morgan's willingness to buy WaMu and absorb its shaky loans amid continuing debate over the $700 billion bailout package, she added: "Some are coming to Washington for help, others are coming to Washington to help."
Oh, yes, J.P. Morgan is clearly "coming to Washington to help."

Here's how quickly a run on the bank can kill it:
Starting Sept. 15, the day that Lehman filed for bankruptcy protection, WaMu's customers began heading for the exits. Over the next 10 days, they yanked a total of $16.7 billion in deposits, according to the Office of Thrift Supervision. That was about 9% of the thrift's deposits as of June 30.
Note that it only took a 9% drop before regulators rushed in:
Normally, when the FDIC and another regulatory agency are preparing to take over a bank, the FDIC will solicit bids for the bank on Tuesday or Wednesday and then seize it on Friday evening, after the bank's branches have closed for the weekend. Sometimes the FDIC will even wait another week to step in. Every bank to fail this year has been shut down on a Friday. The FDIC steps in on Fridays to ensure a smooth transition so that customers hardly notice the handover.

In WaMu's case, the FDIC set a Wednesday evening deadline for interested parties to submit their offers for various parts of WaMu. Twenty-four hours later, they were already preparing to seize the bank. Earlier this month, Treasury Secretary Henry Paulson made it clear to WaMu that the company should have accepted the takeover deal J.P. Morgan had offered earlier this year, according to a person close to WaMu.

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Thursday, September 25, 2008

Jonathan Harris collects stories

Jonathan Harris collects stories — nonfiction stories, which he collects via web-crawling software and then visualizes, also via software:



(Some meta-humor: I feel like Jonathan Harris's robot army is watching me, waiting to strike.)

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Pricing Mortgage Securities When Nobody Knows Anything

Art De Vany notes that Pricing Mortgage Securities When Nobody Knows Anything is a lot like pricing movies when nobody knows anything — and that's a problem he thinks he's solved:
Everyone will admit that nobody really knows what the mortgages or the securities derived from them are worth. The market is illiquid to an extreme. The proposed bail out makes it rational to wait to unload them to see what the seller can get later. So, the plans being discussed to reinject liquidity to the market are having the opposite effect. It is making the market go away until mortgage holders can see what the Treasury will pay for them later.

As William Goldman famously said of movies, nobody knows anything when it comes to predicting what a movie will earn when it finally reaches the market. I showed in my book, Hollywood Economics, that the way to solve the problem of unpredictable results is to set the price later when you do know. How is that done? Well, to use the movies as an example, you make contingent contracts that pay based on the revenues a movie earns after it is released. Virtually all the industry’s contracts follow this principle, which I call the Option Principle. Designing option-like contracts lets you pay when you do know.

It is easy to apply the Pay When You Know option principle to these distressed mortages and their derivatives. Let every holder of these instruments sell call options on their value. Make the options at least 5 years (preferably 10 years) before they expire so that they do not expire before there is time for a return of liquidity to the market. This would give time for the housing market to recover as well. The option would contain several strike points so that investors with different expectations, risk preferences, and current asset positions can choose to cash in at lower strike points for a quick return while others choose to wait for higher returns. At each strike point, the option would pay a percentage of the value of the asset.

The option would be designed so that the buyer earns a share of the future value of the mortgage security if it rises. The option would be of no value and would not be exercised if the value of the mortgage security fails to exceed the first, lower strike price. The homeowner also should receive a share of the future appreciation. This would give all the parties to the mortgage a share in the future appreciation. Had options of this sort been issued at the initial purchase of the home, the speculative aspect would have been properly separated from the homeowner aspect and this whole mess would not have happened. The homeowner/speculator would have sold all or some of the risk of future appreciation to the market.
I think it makes perfect sense for homeowners to sell off some of the upside risk, but homeowners aren't the most sophisticated financiers around — not that the sophisticated financiers have made such a fine showing lately.

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Wednesday, September 24, 2008

Schwinn Electrics

With all the talk about electric cars coming down the pike, I was wondering when electric bikes — both motorcycles and "hybrid" human-powered bikes with pedals — would start to get some attention. I didn't even realize that Schwinn had a line of electric bikes — the Continental, the World GSE, the Transit, and, announced today, the Tailwind:
According to Schwinn, the Tailwind electric bike represents the next generation of eBike and will be available in early 2009 at a suggested retail price of $3199.99.

The Tailwind (like all Schwinn electric bicycles) is a so-called eBike hybrid and can be ridden in either motor-assist mode or as a conventional bike. The eight-speed Tailwind utilizes a lightweight, Schwinn-designed 6000 series aluminum alloy frame and an SR Suntour NEX-4610 suspension fork with lock-out.

The electric motor in the Tailwind is housed in the hub of the front wheel, an innovation found in all Schwinn electric bike models. In addition, all Schwinn eBike models (including the Tailwind) utilize the Plug N’ Drive removable battery pack which is built into stylishly designed rear bike rack systems, allowing riders to quickly detach the battery for recharging.

It is projected that Tailwind owners will realize an industry leading 2,000 recharge lifecycles with the eBike versus the industry standard of 1,000 charges before needing to replace the battery. Tailwind riders will find they can ride 25 to 30 miles per charge (depending upon such factors as climate, rider weight and terrain). The Tailwind also comes with a 20,000-mile or two-year limited warranty.

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What does octane mean?

The Southeast is currently suffering a gasoline shortage. Refineries shut down in preparation for Hurricane Ike's landing, and getting them back up to speed takes some time — and making up for lost time takes even longer.

This supply shock was magnified by all the loud rhetoric about "gouging" after the last hurricane. Gas stations are scared to raise prices, but consumers are not the least bit scared to buy up scarce gas at artificially low prices — perhaps because prices are still a bit higher than normal. In fact, Atlanta consumers have sucked up all the gas in the city, topping off their car tanks and bringing in gas cans as well. You can't have too much semi-cheap gas when there's a shortage.

To make matters worse, Atlanta has clean-air regulations, which require "cleaner" fuel than the rest of country, which means supplies can't simply be trucked in from nearby regions.

Supplies of high-octane fuel are particularly tight, which raises a question: What does octane mean?
The octane rating of gasoline tells you how much the fuel can be compressed before it spontaneously ignites. When gas ignites by compression rather than because of the spark from the spark plug, it causes knocking in the engine. Knocking can damage an engine, so it is not something you want to have happening. Lower-octane gas (like "regular" 87-octane gasoline) can handle the least amount of compression before igniting.

The compression ratio of your engine determines the octane rating of the gas you must use in the car. One way to increase the horsepower of an engine of a given displacement is to increase its compression ratio. So a "high-performance engine" has a higher compression ratio and requires higher-octane fuel. The advantage of a high compression ratio is that it gives your engine a higher horsepower rating for a given engine weight — that is what makes the engine "high performance." The disadvantage is that the gasoline for your engine costs more.

The name "octane" comes from the following fact: When you take crude oil and "crack" it in a refinery, you end up getting hydrocarbon chains of different lengths. These different chain lengths can then be separated from each other and blended to form different fuels. For example, you may have heard of methane, propane and butane. All three of them are hydrocarbons. Methane has just a single carbon atom. Propane has three carbon atoms chained together. Butane has four carbon atoms chained together. Pentane has five, hexane has six, heptane has seven and octane has eight carbons chained together.

It turns out that heptane handles compression very poorly. Compress it just a little and it ignites spontaneously. Octane handles compression very well — you can compress it a lot and nothing happens. Eighty-seven-octane gasoline is gasoline that contains 87-percent octane and 13-percent heptane (or some other combination of fuels that has the same performance of the 87/13 combination of octane/heptane). It spontaneously ignites at a given compression level, and can only be used in engines that do not exceed that compression ratio.

During WWI, it was discovered that you can add a chemical called tetraethyl lead (TEL) to gasoline and significantly improve its octane rating above the octane/heptane combination. Cheaper grades of gasoline could be made usable by adding TEL. This led to the widespread use of "ethyl" or "leaded" gasoline. Unfortunately, the side effects of adding lead to gasoline are:
  • Lead clogs a catalytic converter and renders it inoperable within minutes.
  • The Earth became covered in a thin layer of lead, and lead is toxic to many living things (including humans).
When lead was banned, gasoline got more expensive because refineries could not boost the octane ratings of cheaper grades any more. Airplanes are still allowed to use leaded gasoline (known as AvGas), and octane ratings of 100 or more are commonly used in super-high-performance piston airplane engines. In the case of AvGas, 100 is the gasoline's performance rating, not the percentage of actual octane in the gas. The addition of TEL boosts the compression level of the gasoline — it doesn't add more octane.

Currently engineers are trying to develop airplane engines that can use unleaded gasoline. Jet engines burn kerosene, by the way.

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Financial Meltdown

A hedge fund manager explains the financial meltdown to n+1:
When you’re talking about risk management, there’s an assumption that not every asset class will be correlated. So, sure, sub-prime blows up but the bank’s OK because prime will hold up, or there won’t be a perfect correlation with leveraged loans. But what’s going on is that all these credit products are performing badly at once.

Because?

Because there are some real linkages. If consumer spending has been supported by people extracting equity from their homes, the mortgage market shutting down will hit consumer spending. And that will hurt companies that rely on consumer spending.

And then there are the financial linkages — hedge funds blowing up so that they can’t buy leveraged loans anymore, or banks that got hurt in sub-prime that have to sell down leveraged loans to generate liquidity, and the buyers are gone.

So that’s one financial linkage, but also there’s capital — the banks’ capital base. Every time a bank takes a write-down, that erodes its capital base, and the bigger the base the more risk it can take. There are rules for that — Basel 2 capital adequacy — and if a bank is writing down 10 billion dollars, suddenly the risk-taking capability is reduced. Assume basically capital adequacy ratio for all these banks is 10 percent. So if a bank falls 10 billion below its capital adequacy target that’s 100 billion dollars in risk-taking capacity that disappears.

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American Revolutionary

Quiet Boston scholar Gene Sharp is, in fact, an American Revolutionary:
In his writings, Mr. Sharp teased out common principles that make nonviolent resistance successful, creating a broad road map for activists looking to destabilize authoritarian regimes. Mr. Sharp's magnum opus, the 902-page "Politics of Nonviolent Action," was published in 1973. But the main source of his success is his 90-page "From Dictatorship to Democracy."

This slim volume offers concise advice on how to plan a successful opposition campaign, along with a list of historically tested tactics for rattling a dictatorial regime. Aimed at no particular country, and easily downloadable from the Internet, the booklet has found universal appeal among opposition activists around the globe.

Though he warns readers that resistance may provoke violent crackdowns and will take careful planning to succeed, Mr. Sharp writes that any dictatorship will eventually collapse if its subjects refuse to obey.

He offers a list of 198 methods of nonviolent action, like the staging of mock elections to poke fun at problems like vote-rigging, using funerals to make political statements and adopting symbolic colors, a la Orange Revolution in the Ukraine. Less conventional tactics include skywriting political messages and "protest disrobings."

In Zimbabwe, opposition activist Magodonga Mahlangu has organized the tract's translation into two main local languages. In Russia, opposition activist Oleg Kozlovsky estimates he and his colleagues have used about 30 of 198 protest methods listed in Mr. Sharp's booklet. Venezuelan student leader Yon Goicoechea says Mr. Sharp's work inspired him to think creatively of ways to carry out antigovernment protests: Activists once tied themselves to the stairs of a government building and have staged street theater to mock constitutional changes.
He's not the only academic promoting revolution. MIT's OpenCourseWare includes course 21H.001 How to Stage a Revolution, taught by Professors William Broadhead, Meg Jacobs, Peter Perdue, and Jeffrey Ravel.

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What is financial systemic risk?

What is financial systemic risk? Arnold Kling explains:
There is systemic financial risk when contingency plans that are developed individually are collectively incompatible.

For example, imagine that we have banks without deposit insurance. My contingency plan, in case I suspect that my bank is in trouble, is to run down to the bank and withdraw my money before they run out. My bank's contingency plan, in case it experiences an unusual rush of withdrawals, is to go to other banks that have plenty of cash on hand and borrow from them on a short-term basis.

My individual plan looks fine. My bank's plan looks fine. But if every depositor and every bank has the same plan, you can see how it could fall apart. A rumor starts at a couple of banks that they are in trouble, everybody tries to pull funds out at once, rumors spread to other banks, and pretty soon the whole system collapses. Note, for future reference, that the risks of this are reduced to the extent that banks have capital and reserves to protect against short-term losses.

As another example, consider a "stop-loss order" in the stock market. I buy 100 shares of XYZ stock, which is now trading at $50 a share. At some point, I issue an order to my broker to "stop loss" at $45 a share. That is, if the price falls to $45 a share, my broker is supposed to sell my shares before they get below $45 a share, in order to stop my loss.

Once again, as an individual plan, this is fine. But if everybody uses stop-loss orders, then at some point if the stock goes down there will be a cascade of sales, and it will be impossible for everybody to get out at once at their stop-loss price.

On October 19, 1987, this stop-loss cascade actually took place. Major pension funds and endowments bought something called "portfolio insurance" from clever trading firms. You can think of portfolio insurance as a stop-loss order on a large portfolio of stocks. On what we now call Black Monday, some declines in stock prices turned into a rout, as portfolio insurance selling programs kicked in.

Another way to execute a stop-loss order is by purchasing a put option on a stock. In the case of my XYZ shares, a put option would give me the option to sell 100 shares at a price of $45. This option is traded on an exchange, and its exercise does not depend on how many other people are trying to sell XYZ shares at the time.

Exchange-traded options tend to be more reliable than option-replication trading strategies, such as portfolio insurance. But the question remains how the party that sold you the option plans to deal with his risk. His plan may be to sell more XYZ shares as the price is falling, just as your plan would be if you were using stop-loss instead of a put option.

Now, we come to derivatives. Let's say that you hold a bond issued by a city, Anytown USA. You do not want to bear the risk that Anytown will mismanage its affairs and default on its bonds. You can go to a bond insurer, who for a fee will provide you with a guarantee of the bond. However, the bond insurer's plan may be to sell similar bonds short if it sees things go sour for Anytown. Other bond insurers may have the same plan. If things start to go sour, they all try to sell Anytown's bonds at once, and Anytown can no longer raise money in the market except at exorbitant cost. It's a classic run, caused by individual contingency plans that are collectively incompatible.

What we have had this year are runs caused by derivatives. For example, if somebody owns bonds issued by Bear, Stearns, they might buy insurance on those bonds. The firm that insures those bonds might have a plan that if things look uncertain for Bear, they will short Bear's stock in order to hedge the risk that Bear will default. The problem is that not everyone can execute this contingency plan at once. Most of the derivatives in this year's financial crisis were related in some way to mortgage securities.

The moral of the story is that derivatives allow folks to feel comfortable holding risking assets. However, the parties that are selling them that comfort have to formulate plans that only work individually or when conditions are relatively stable. When trouble develops, the sellers of derivatives have to scramble to execute trading plans to hedge losses, and those trading plans can be incompatible, leading to catastrophic declines in security values.
What should regulators do?
The problems are tricky. Often, if regulators ban one type of risk management, then firms eventually find their way to a different form of risk management that poses even more systemic risk. There are those who argue that this is how our current crisis emerged. In response to capital requirements and other regulations, financial institutions loaded up on derivatives, creating the current mess.

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Biden flunks history in comment on FDR

Biden flunks history in comment on FDR:
“When the stock market crashed, Franklin D. Roosevelt got on the television and didn’t just talk about the, you know, the princes of greed. He said, ‘Look, here’s what happened,’” Barack Obama’s running mate recently told the “CBS Evening News.”

Except, Republican Herbert Hoover was in office when the stock market crashed in October 1929. There also was no television at the time; TV wasn’t introduced to the public until a decade later, at the 1939 World’s Fair.

FDR was elected three years later when voters denied Hoover a second term. The Democratic challenger appealed to the “forgotten man” by promising a “new deal” to solve the Depression era.
Wow.

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Cool invention helps tired players bounce back

Julian Guthrie of the San Francisco Chronicle reports on a cool invention that helps tired players bounce back:
The Glove works by cooling the body from inside out, rather than conventional approaches that cool from outside in. The device creates an airtight seal around the wrist, pulls blood into the palm of the hand and cools it before returning it to the heart and to overheated muscles and organs. The palm is the ideal place for rapid cooling because blood flow increases to the hands (and feet and face) as body temperature rises.

"These are natural mammalian radiators," said Dennis Grahn, who invented the device with Stanford colleague Craig Heller.

Grahn and Heller also found that cooling overheated muscles dramatically improved physical performance, allowing athletes to work out harder and longer, and hold on to their gains.

"We learned that you can actually reverse that muscle fatigue in a short amount of time," Heller said. "And if you cool muscles during rest, you get a much greater recovery than if you rested without cooling."

In the early 1990s, Heller and Grahn first began looking at using controlled heat to halt tremors in patients coming out of anesthesia. When they put their device over the hand and arm of a patient at Stanford Medical Center, "The core temperature went up so fast," Grahn said, "we thought our recording equipment had broken." The tremors stopped.

Once the license for their heating technology was sold by Stanford, they shifted their focus to cooling. The two were interested in exploring therapeutic uses of lowering body temperature, particularly for people with cystic fibrosis and multiple sclerosis. They turned to exercise as a way to build up a person's internal heat load and then worked to figure out how to "pull it out through vascular structures," Grahn said.

Their first "aha" moment in cooling came after they talked their assistant Vinh Cao into doing his regular workouts in the lab instead of at the gym. His routine included 100 pull-ups. One day, Grahn and Heller started using an early version of the Glove to cool him for 3 minutes between rounds of pull-ups. They saw that with the cooling, his 11th round of pull-ups was as strong as his first. Within six weeks of training with the cooling breaks, Cao did 180 pull-ups a session. Six weeks later, he went from 180 to 616.

"I'll never forget the number 616," said Heller. "He tripled his capacity in six weeks. We were like, 'Wait a minute, this is crazy!'"
Heller used the Glove to work up to 1,000 push-ups on his 60th birthday.

After their findings were published in the American Journal of Applied Physiology, they received a $3 million grant from DARPA. The Glove is now being distributed and redesigned by Avacore Technologies of Ann Arbor, Michigan:
Grahn and Heller are board members and working with the company to create a more user-friendly version of the coffee pot-shaped model — which they call "klutzy" — to make it look and feel like an actual glove. Avacore is in contract with the military to deliver the new, streamlined gloves by the end of the year. Some 100 units of the cooling device are in Iraq with the 101st Airborne Division.

It is also being used by other football teams, including the Oakland Raiders and the Miami Hurricanes, and by American cyclists who competed in this year's Tour de France.
[...]
The Glove, formally known as Core Control, is available through Avacore Technologies of Ann Arbor, Mich. It retails for $2,500, but is available at select times throughout the year for less than $2,000. The price is expected to come down with the second generation of the Glove, now in development.
I first read about the Glove in Noah Shachtman's piece for Wired, Be More Than You Can Be, back in March, 2007.

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How Sweden Solved Its Bank Crisis

Carter Dougherty of the New York Times explains How Sweden Solved Its Bank Crisis back in 1992 — by demanding warrants in return for bailing the banks out:
That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well.

“If I go into a bank,” said Bo Lundgren, who was Sweden’s finance minister at the time, “I’d rather get equity so that there is some upside for the taxpayer.”

Sweden spent 4 percent of its gross domestic product, or 65 billion kronor, the equivalent of $11.7 billion at the time, or $18.3 billion in today’s dollars, to rescue ailing banks. That is slightly less, proportionate to the national economy, than the $700 billion, or roughly 5 percent of gross domestic product, that the Bush administration estimates its own move will cost in the United States.

But the final cost to Sweden ended up being less than 2 percent of its G.D.P. Some officials say they believe it was closer to zero, depending on how certain rates of return are calculated.
The US government demanded warrants from Chrysler too, years ago, but, to my surprise, it's not demanding equity from banks (yet):
The reason is not quite clear. The government has already swapped its sovereign guarantee for equity in Fannie Mae and Freddie Mac, the mortgage finance institutions, and the American International Group, the global insurance giant.

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How many dollars are there in the world?

How many dollars are there in the world?:
There is a nice official answer to this question. The figure is known as M0, the monetary base, and its current value is about 825 billion.
So, we know that n, the number of dollars, is 825 billion, M0, right?
Wrong. The problem is that this assignment, n = M0, simply does not make sense. It is not consistent with economic reality. Of course USG can enforce it, as it can enforce anything, but the result will be social and economic disaster. North America will become a burned-out Mad Max wasteland, patrolled by marauding gangs and packs of radioactive mutant wolves.
The US governemtn has a national debt of roughly $10 trillion, not counting unfunded entitlements:
Moreover, this debt is not even discounted. Quite the contrary: it is considered "risk-free."

Question: how, exactly, in a world that contains only 825 billion dollars, can a debt of $10 trillion be risk-free?

Moreover, USG runs an annual trade deficit of $750 billion. Even if it started each January 1 with all 825 billion of these dollars in the country, which it most certainly didn't, its subjects should be feeling pretty impoverished by Christmas. But no. They run the same trade deficit, year after year after year. Perhaps the dollars are being lent back to them — but why?

There can only be one answer: this $825 billion number is just plain wrong.

825 billion is the number of formal dollars outstanding. It is not the droid we are looking for, though.

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The Two Classes of Airport Contraband

Security expert Bruce Schneier explains The Two Classes of Airport Contraband:
Airport security found a jar of pasta sauce in my luggage last month. It was a 6-ounce jar, above the limit; the official confiscated it, because allowing it on the airplane with me would have been too dangerous. And to demonstrate how dangerous he really thought that jar was, he blithely tossed it in a nearby bin of similar liquid bottles and sent me on my way.

There are two classes of contraband at airport security checkpoints: the class that will get you in trouble if you try to bring it on an airplane, and the class that will cheerily be taken away from you if you try to bring it on an airplane. This difference is important: Making security screeners confiscate anything from that second class is a waste of time. All it does is harm innocents; it doesn't stop terrorists at all.

Let me explain. If you're caught at airport security with a bomb or a gun, the screeners aren't just going to take it away from you. They're going to call the police, and you're going to be stuck for a few hours answering a lot of awkward questions. You may be arrested, and you'll almost certainly miss your flight. At best, you're going to have a very unpleasant day.

This is why articles about how screeners don't catch every — or even a majority — of guns and bombs that go through the checkpoints don't bother me. The screeners don't have to be perfect; they just have to be good enough. No terrorist is going to base his plot on getting a gun through airport security if there's decent chance of getting caught, because the consequences of getting caught are too great.

Contrast that with a terrorist plot that requires a 12-ounce bottle of liquid. There's no evidence that the London liquid bombers actually had a workable plot, but assume for the moment they did. If some copycat terrorists try to bring their liquid bomb through airport security and the screeners catch them — like they caught me with my bottle of pasta sauce — the terrorists can simply try again. They can try again and again. They can keep trying until they succeed. Because there are no consequences to trying and failing, the screeners have to be 100 percent effective. Even if they slip up one in a hundred times, the plot can succeed.

The same is true for knitting needles, pocketknives, scissors, corkscrews, cigarette lighters and whatever else the airport screeners are confiscating this week. If there's no consequence to getting caught with it, then confiscating it only hurts innocent people. At best, it mildly annoys the terrorists.

To fix this, airport security has to make a choice. If something is dangerous, treat it as dangerous and treat anyone who tries to bring it on as potentially dangerous. If it's not dangerous, then stop trying to keep it off airplanes. Trying to have it both ways just distracts the screeners from actually making us safer.

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Tuesday, September 23, 2008

Short-Term Financing Is Not An Accident

Diamond and Kashyap explain that short-term financing is not an accident:
Lehman’s demise came when it could not even keep borrowing. Lehman was rolling over at least $100 billion a month to finance its investments in real estate, bonds, stocks, and financial assets. When it is hard for lenders to monitor their investments and borrowers can rapidly change the risk on their balance sheets, lenders opt for short-term lending. Compared to legal or other channels, their threat to refuse to roll over funding is the most effective option to keep the borrower in line.

This was especially relevant for Lehman, because as an investment bank, it could transform its risk characteristics very easily by using derivatives and by churning its trading portfolio. So for Lehman (and all investment banks), the short-term financing is not an accident; it is inevitable.

Why did the financing dry up? For months, short-sellers were convinced that Lehman’s real-estate losses were bigger than it had acknowledged. As more bad news about the real estate market emerged, including the losses at Freddie Mac and Fannie Mae, this view spread.

Lehman’s costs of borrowing rose and its share price fell. With an impending downgrade to its credit rating looming, legal restrictions were going to prevent certain firms from continuing to lend to Lehman. Other counterparties that might have been able to lend, even if Lehman’s credit rating was impaired, simply decided that the chance of default in the near future was too high, partly because they feared that future credit conditions would get even tighter and force Lehman and others to default at that time.

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What's a paradigm shift in finance?

I don't follow n+1"a twice-yearly print journal of politics, literature, and culture" — but they carried an interesting Interview With a Hedge Fund Manager back in January:
I didn't go to business school. I did not major in economics. I learned the old-fashioned way by apprenticing to a very talented investor, so I wound up getting into the hedge fund business before I think many people knew what a hedge fund was. I've been doing it for over ten years. I didn't even know what a hedge fund was when I first had this opportunity. I'm sure today I would never get hired.

Really?

Yeah, it would be impossible because I had no background, or I had a very exiguous background in finance. The guy who hired me always talked about hiring good intellectual athletes, people who were sort of mentally agile in an all-around way, and that the specifics of finance you could learn, which I think is true. But at the time, I mean, no hedge fund was really flooded with applicants, and that allowed him to let his mind range a little bit and consider different kinds of candidates. Today we have a recruiting group, and what do they do? — they throw resumes at you, and it's, like, one business school guy, one finance major after another, kids who, from the time they were twelve years old, were watching Jim Cramer and dreaming of working in a hedge fund. And I think in reality that, probably, if anything, they're less likely to make good investors than people with sort of more interesting backgrounds.

Why?

Because I think that in the end the way that you make a ton of money is calling paradigm shifts, and people who are real finance types, maybe they can work really well within the paradigm of a particular kind of market or a particular set of rules of the game — and you can make money doing that — but the people who make huge money, the George Soroses and Julian Robertsons of the world, they're the people who can step back and see when the paradigm is going to shift, and I think that comes from having a broader experience, a little bit of a different approach to how you think about things.

What's a paradigm shift in finance?

Well, a paradigm shift in finance is maybe what we've gone through in the sub-prime market and the spillover that's had in a lot of other markets where there were really basic assumptions that people made that, you know what?, they were wrong.

The thing is that nobody has enough brain power to question every assumption, to think about every single facet of an investment. There are certain things you need to take for granted. And people would take for granted the idea that, "OK, something that Moody's rates triple-A must be money-good, so I'm going to worry about the other things I'm investing in, but when it comes time to say, ‘Where am I going to put my cash?,' I'll just leave it in triple-A commercial paper, I don't have time to think about everything." It could be the case that, yeah, the power's going to fail in my office, and maybe the water supply is going to fail, and I should plan for that, but you only have so much brain power, so you think about what you think are the relevant factors, the factors that are likely to change. But often some of those assumptions that you make are wrong.
He has a few things to say about statistical arbitrage:
People actually call it "black box trading," because sometimes you don't even know why the black box is doing what it's doing, because the whole idea is that if you could, you should be doing it yourself. But it's something that's done on such a big scale, a universe of several thousand stocks, that a human brain can't do it in real time. The problem is that the DNA of a lot of these models is very, very similar, it's like an ecosystem with no biodiversity because most of the people who do stat-arb can trace their lineage, their intellectual lineage, back to four or five guys who really started the whole black box trading discipline in the '70s and '80s. And what happened is, in August, a few of these funds that have big black box trading books suffered losses in other businesses and they decided to reduce risk, so they basically dialed down the black box system. So the black box system started unwinding its positions, and every black box is so similar that everybody was kind of long the same stocks and short the same stocks. So when one fund starts selling off its longs and buying back its shorts, that causes losses for the next black box and the people who run that black box say, "Oh gosh! I'm losing a lot more money than I thought I could. My risk model is no longer relevant; let me turn down my black box." And basically what you had was an avalanche where everybody's black box is being shut off, causing incredibly bizarre behavior in the market.
He also explains how CDOs work:
They buy mortgages, and then they package them and they tranche the pools of mortgages up into various tranches from senior to equity. So, basically you have a number of tranches of paper that get issued that are backed by the mortgage pools and there's a cash flow waterfall, the cash comes in from those mortgages, a certain tranche has the first priority. And then you have descending order of priority, and the hedge fund would usually keep the last piece, which is known as the equity, or the residual, as opposed to the stuff that was triple-A, that's the most senior paper. So if you had a pool of half a billion dollars of mortgages, maybe there would be 300 million dollars of triple A paper you would sell to fund that, and then there would be smaller tranches of more junior paper. And the buyers of that paper, particularly the very senior paper, the triple-A paper, were not experts, they're not mortgage experts, they say, "It's triple-A? I'll buy it." This is money market funds, accounts that are not set up to do hardcore analysis, they tend to just rely on the rating agencies. And again the spread that they're getting paid is very small, so they don't really have a lot of spread to play with to hire a lot of analysts to go and dig in the mortgage pools and really understand them, they kind of rely on the rating agencies, and that's their downfall. It's kind of an interesting interaction in the sense that a lot of this mortgage project was almost created by the bid for the CDO paper rather than the reverse. I mean, the traditional way to think about financing is "OK, I find an investment opportunity, that on its face, I think, is a good opportunity. I want to deploy capital on that opportunity. Now I go look for funding. So I think that making mortgage loans is a good investment, so I will make mortgage loans. Then I will seek to fund those, to fund that activity, by perhaps issuing CDO paper, issuing the triple-A, double-A, A, and down the chain." But what happened is, you had the creation of so many vehicles designed to buy that paper, the triple-A, the double-A, all the CDO paper... that the dynamic flipped around. It was almost as if the demand for that paper created the mortgages.
[...]
What tends to happen in financial markets, is bad things happen when you really divorce the people who take the risk from the people who understand the risk. What happened is that that distance in the sub-prime market just increased and increased and increased. I mean, it started out that you had mortgage companies that would keep some of the stuff on their own books. Sub-prime lenders, it wasn't a big business, it was a small business, and it was specialty lenders, and they made risky loans, and they would keep a lot of it on their books.

But then these guys were like, "Well, you know, there are hedge fund buyers for pools that we put together," and then the hedge fund buyers say, "You know what? We need to fund, we need to leverage this, so how can we leverage this? Oh, I have an idea, let's create a CDO and issue paper against it to fund ourselves," and then you get buyers of that paper. The buyers of that paper, they're more ratings-sensitive than fundamentals-sensitive, so they're quite divorced from the details. Then it got even more extended in the sense that vehicles were set up that had a mandate to kind of robotically buy that paper and fund themselves through issuing paper in the market.

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Clogged Plumbing Theory

The Paulson plan, Arnold Kling notes, is based on the clogged plumbing theory:
The mortgage assets are stopping up the plumbing of the financial system, so the government has to buy up those assets to unclog the system.

Why worry about the clog in the first place? Because banks have some of these securities, they are marking these securities to market value, which means marking them way down. As a result, their balance sheets show a shortage of capital. To come back into compliance with regulations, they either have to sell new shares of stock (good luck with that) or curb lending. As they curb lending, the economy suffers.

That is why some people say that the solution is to get rid of mark-to-market accounting. Let the banks estimate the "intrinsic" values of their mortgage securities. These values are higher than market values, so that using this alternative accounting the banks' balance sheets won't looks so bad. That way, they can keep lending. My problem with that is that phony accounting has a history of keeping failed institutions in business, raising the cost of the subsequent cleanup.

My alternative is to encourage new lending by lowering capital requirements at the margin. Tell banks that loans issued after September 1, 2008, require half the capital of similar loans issued before September 1. Some banks are in such bad shape that even with those lower capital standards they will not be able to make new loans. Fine. You don't want those banks to grow. But other banks have room to grow, and you want them to grow more than they would under the existing regulations.

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Henry Paulson is not the first strong Treasury Secretary to appear in a crisis

Henry Paulson is not the first strong Treasury Secretary to appear in a crisis, Arnold Kling notes:
John Connally held that job in the Nixon Administration, In response to a run on the dollar, he abandoned the Bretton Woods agreement and introduced wage and price controls. In the short term, this was well received, and it allowed the economy to rebound in time for Nixon's re-election. In the long run, it was a disaster, ultimately unleashing virulent inflation and, as oil prices rose, leading to the painful disorder of rationing and lines at gasoline stations.

Connally's cure was worse than the disease. I strongly suspect that Paulson's cure will prove similarly harmful.

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Look Who's Irrational Now

Look Who's Irrational Now:
"What Americans Really Believe," a comprehensive new study released by Baylor University yesterday, shows that traditional Christian religion greatly decreases belief in everything from the efficacy of palm readers to the usefulness of astrology. It also shows that the irreligious and the members of more liberal Protestant denominations, far from being resistant to superstition, tend to be much more likely to believe in the paranormal and in pseudoscience than evangelical Christians.

The Gallup Organization, under contract to Baylor's Institute for Studies of Religion, asked American adults a series of questions to gauge credulity. Do dreams foretell the future? Did ancient advanced civilizations such as Atlantis exist? Can places be haunted? Is it possible to communicate with the dead? Will creatures like Bigfoot and the Loch Ness Monster someday be discovered by science?

The answers were added up to create an index of belief in occult and the paranormal. While 31% of people who never worship expressed strong belief in these things, only 8% of people who attend a house of worship more than once a week did.

Even among Christians, there were disparities. While 36% of those belonging to the United Church of Christ, Sen. Barack Obama's former denomination, expressed strong beliefs in the paranormal, only 14% of those belonging to the Assemblies of God, Sarah Palin's former denomination, did. In fact, the more traditional and evangelical the respondent, the less likely he was to believe in, for instance, the possibility of communicating with people who are dead.

This is not a new finding. In his 1983 book "The Whys of a Philosophical Scrivener," skeptic and science writer Martin Gardner cited the decline of traditional religious belief among the better educated as one of the causes for an increase in pseudoscience, cults and superstition. He referenced a 1980 study published in the magazine Skeptical Inquirer that showed irreligious college students to be by far the most likely to embrace paranormal beliefs, while born-again Christian college students were the least likely.

Surprisingly, while increased church attendance and membership in a conservative denomination has a powerful negative effect on paranormal beliefs, higher education doesn't. Two years ago two professors published another study in Skeptical Inquirer showing that, while less than one-quarter of college freshmen surveyed expressed a general belief in such superstitions as ghosts, psychic healing, haunted houses, demonic possession, clairvoyance and witches, the figure jumped to 31% of college seniors and 34% of graduate students.

We can't even count on self-described atheists to be strict rationalists. According to the Pew Forum on Religion & Public Life's monumental "U.S. Religious Landscape Survey" that was issued in June, 21% of self-proclaimed atheists believe in either a personal God or an impersonal force. Ten percent of atheists pray at least weekly and 12% believe in heaven.

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Crows make monkeys out of chimps in mental test

Crows make monkeys out of chimps in mental test:
Crows seem to be able to use causal reasoning to solve a problem, a feat previously undocumented in any other non-human animal, including chimps.

Alex Taylor at the University of Auckland, New Zealand, and his team presented six New Caledonian crows with a series of "trap-tube" tests.

A choice morsel of food was placed in a horizontal Perspex tube, which also featured two round holes in the underside, with Perspex traps below.

For most of the tests, one of the holes was sealed, so the food could be dragged across it with a stick and out of the tube to be eaten. The other hole was left open, trapping the food if the crows moved it the wrong way.

Three of the crows solved the task consistently, even after the team modified the appearance of the equipment. This suggested that these crows weren't using arbitrary features — such as the colour of the rim of a hole — to guide their behaviour. Instead they seemed to understand that if they dragged food across a hole, they would lose it.

To investigate further, the team presented the crows with a wooden table, divided into two compartments. A treat was at the end of each compartment, but in one, it was positioned behind a rectangular trap hole. To get the snack, the crow had to consistently choose to retrieve food from the compartment without the hole.

A recent study of great apes found they could not transfer success at the trap-tube to success at the trap-table. The three crows could, however.

"They seem to have some kind of concept of a hole that isn't tied to purely visual features, and they can use this concept to figure out the novel problem," Taylor says. "This is the most conclusive evidence to date for causal reasoning in an animal."

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Cesarean section linked to allergy in children

Cesarean section linked to allergy in children:
The study involved 432 children who were followed from birth to 9 years of age. One or both parents had a history of allergies or asthma. Physician-diagnosed asthma and allergic rhinitis in the children was assessed using caregiver interviews conducted at least twice a year. Allergy skin testing was performed in 271 children at an average age of 7.4 years.

Children born by cesarean section were 2.1-times more likely to develop atopy than their peers born by vaginal delivery, the report indicates.

Similarly, the authors found that cesarean section increased the risk of allergic rhinitis 1.8-fold. As noted, however, cesarean section did not increase the risk of asthma or wheeze.

Allergic rhinitis, sometimes called "hay fever," refers to a group of symptoms that mimic a common cold such as nasal congestion, sneezing, itching and tearing eyes. Atopy is the innate tendency to develop the classic allergic diseases, such as allergic rhinitis and asthma. It involves the overstimulation of the immune system in response to common environmental proteins such as house dust mite, grass pollen, and food allergens.

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A clean-slate accounting of the dollar

Mencius Moldbug attempts to offer up a clean-slate accounting of the dollar "with no assumptions about economics, finance, or accounting":
Think of it as rather like analyzing a Soviet nickel company in 1991. Does the company even exist? Does it even produce nickel? Does it own any mineral rights of any sort? If we buy it, do we really own it? Etc.
He shares a short history of money:
Perhaps you think of the dollar as "money" or "currency," and you are very confused by all this. "Money" and "currency" are nice words, but they have no precise accounting definition. They just refer to a good or security commonly held for the purpose of savings and/or exchange. Historically, we can identify four classes of currency:

(1) Direct goods, such as coins of a standardized weight of precious metal.
(2) Titles or warehouse receipts to (1).
(3) Obligations to pay (1) or (2), or redeemable currency.
(4) Mere equity, or fiat currency.

These are (excluding the common 4-to-1 transition) in order of historical evolution. Explaining the evolution is not of direct assistance in analyzing the dollar, but it helps us get our bearings — and it defines terms which will be useful later on.

Class 1 currency (standardized metal) evolves into class 2 currency (titles) because titles are more portable, secure and convenient. Digital gold is a modern class 2 currency.

Class 2 currency (titles) evolves into class 3 currency (redeemable notes), because the change is generally profitable for the currency issuer, and the marks are too dumb to know the difference. A title or warehouse receipt is a title because the issuer holds goods that match it; otherwise, he is a thief. A redeemable note is a mere debt, and does not default until redemption fails. And even then, the issuer is only bankrupt, not in jail.

Suppose I have 100 ounces of gold, and issue 100 titles against it, each title stating that the bearer owns one ounce of gold. This makes me a respectable issuer of class 2 currency.

Suppose I have 100 ounces of gold, and issue 200 redeemable notes against it, each note stating that I will issue the bearer one ounce of gold on demand. This makes me a scoundrel.

However, it also makes me wealthier than I was before, at least until more than 100 bearers show up to claim their gold at the same time. Will my notes trade at par? Ie: will people accept them as equivalent to the class 2 titles? Well, every time someone starts to get suspicious and tries to redeem one, it works. So I don't see why they shouldn't. We have just reinvented the wildcat bank — a staple of early American finance.

There is a cure for wildcat banking: those who accept class 3 notes should ensure that the issuer is solvent. A financial institution is solvent if and only if the sum of all the payments it is obligated to make equals or exceeds the total price of all the assets it holds. So our Scoundrel Bank above is not solvent, because it is obligated to pay 200 ounces and it only has 100 ounces.

One way to see a redeemable note is to see it as a very short-term loan from the noteholder to the bank, which is automatically renewed or "rolled over" when the noteholder does not redeem. If the term of the loan is an hour, a minute or even a second, the effect is redeemability. And note that when making a loan, what you want to know is whether the loan will be paid back. And collectively, what all loanholders want to know is that they all can be paid back. First come, first served, is not solvency.

Scoundrel Bank can redeem for some of its noteholders. But not all of them. Therefore, all unfortunate holders of its notes can agree on a fair — or "equitable" — bankruptcy restructuring: every holder of a Scoundrel ounce note should receive half an ounce of gold. As for the scoundrel himself, trees abound, and perhaps the noteholders can pitch in for a rope.

But there is a tricky intermediate case — call it Questionable Bank — between Respectable Warehouse and Scoundrel Bank. Respectable Warehouse issued 100 one-ounce titles. It has 100 ounces. Verifying the quality of the titles is as easy as verifying these facts. Scoundrel Bank issued 200 one-ounce notes. It does not have 200 ounces. Verifying its insolvency is just as easy.

Questionable Bank also issued 200 ounce notes. It also has only 100 ounces. But it also has 100 old pianos. Each piano, it asserts, is worth an ounce of gold. "Easily. Easily. No sweat, man. These are fine pianos. Here, play this one. Hear that sound? That's a sweet tone. Check out the action on the keys. Totally smooth. You could move this piano for an ounce fifty, no problem.")

Suddenly our noteholder, or at least the accountant he hires, is required to be a piano appraiser. Should you trade a Respectable title to one ounce, for a Questionable note paying one ounce? It depends on the quality of the pianos. Obviously, every piano is different. You can't just play the one up front in Questionable's office. You need to go into the back room and tinkle away.

Moreover, even if each piano could be sold on the piano market for an ounce or more, it is hard to know that all the pianos could be sold at once. Since price is set by supply and demand, the appearance of a large splodge of pianos, even fine pianos, on the market all at once, is liable to depress the piano price. And "at once," let's not forget, is the term of the Questionable notes.

In real life, of course, the good in question is typically not pianos but loans. Usually long-term loans. Pricing a piano is difficult, but it is nothing on pricing a loan. And the result of dropping a glut of loans on the market all at once is even more astonishing and disastrous.

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Monday, September 22, 2008

The Fourth Quadrant

Nassim Nicholas Taleb (The Black Swan, Fooled by Randomness) maps decisions onto four quadrants — much like any MBA, really. In his case, the two criteria are whether the decision itself is simple (binary) or complex, and whether the probability distribution is known and thin-tailed (Mediocristan) or unknown and/or fat-tailed (Extremistan).

The Fourth Quadrant, naturally, is where all hell breaks loose:





In response, Taleb has developed a list of Phronetic RulesWhat Is Wise To Do (Or Not Do) In The Fourth Quadrant:
1) Avoid Optimization, Learn to Love Redundancy. Psychologists tell us that getting rich does not bring happiness — if you spend it. But if you hide it under the mattress, you are less vulnerable to a black swan. Only fools (such as Banks) optimize, not realizing that a simple model error can blow through their capital (as it just did). In one day in August 2007, Goldman Sachs experienced 24 x the average daily transaction volume — would 29 times have blown up the system? The only weak point I know of financial markets is their ability to drive people & companies to "efficiency" (to please a stock analyst’s earnings target) against risks of extreme events.

Indeed some systems tend to optimize — therefore become more fragile. Electricity grids for example optimize to the point of not coping with unexpected surges — Albert-Lazlo Barabasi warned us of the possibility of a NYC blackout like the one we had in August 2003. Quite prophetic, the fellow. Yet energy supply kept getting more and more efficient since. Commodity prices can double on a short burst in demand (oil, copper, wheat) — we no longer have any slack. Almost everyone who talks about "flat earth" does not realize that it is overoptimized to the point of maximal vulnerability.

Biological systems — those that survived millions of years — include huge redundancies. Just consider why we like sexual encounters (so redundant to do it so often!). Historically populations tended to produced around 4-12 children to get to the historical average of ~2 survivors to adulthood.

Option-theoretic analysis: redundancy is like long an option. You certainly pay for it, but it may be necessary for survival.

2) Avoid prediction of remote payoffs — though not necessarily ordinary ones. Payoffs from remote parts of the distribution are more difficult to predict than closer parts.

A general principle is that, while in the first three quadrants you can use the best model you can find, this is dangerous in the fourth quadrant: no model should be better than just any model.

3) Beware the "atypicality" of remote events. There is a sucker's method called "scenario analysis" and "stress testing" — usually based on the past (or some "make sense" theory). Yet I show in the appendix how past shortfalls that do not predict subsequent shortfalls. Likewise, "prediction markets" are for fools. They might work for a binary election, but not in the Fourth Quadrant. Recall the very definition of events is complicated: success might mean one million in the bank ...or five billions!

4) Time. It takes much, much longer for a times series in the Fourth Quadrant to reveal its property. At the worst, we don't know how long. Yet compensation for bank executives is done on a short term window, causing a mismatch between observation window and necessary window. They get rich in spite of negative returns. But we can have a pretty clear idea if the "Black Swan" can hit on the left (losses) or on the right (profits).

The point can be used in climatic analysis. Things that have worked for a long time are preferable — they are more likely to have reached their ergodic states.

5) Beware Moral Hazard. Is optimal to make series of bonuses betting on hidden risks in the Fourth Quadrant, then blow up and write a thank you letter. Fannie Mae and Freddie Mac's Chairmen will in all likelihood keep their previous bonuses (as in all previous cases) and even get close to 15 million of severance pay each.

6) Metrics. Conventional metrics based on type 1 randomness don't work. Words like "standard deviation" are not stable and does not measure anything in the Fourth Quadrant. So does "linear regression" (the errors are in the fourth quadrant), "Sharpe ratio", Markowitz optimal portfolio, ANOVA shmnamova, Least square, etc. Literally anything mechanistically pulled out of a statistical textbook.

My problem is that people can both accept the role of rare events, agree with me, and still use these metrics, which is leading me to test if this is a psychological disorder.

The technical appendix shows why these metrics fail: they are based on "variance"/"standard deviation" and terms invented years ago when we had no computers. One way I can prove that anything linked to standard deviation is a facade of knowledge: There is a measure called Kurtosis that indicates departure from "Normality". It is very, very unstable and marred with huge sampling error: 70-90% of the Kurtosis in Oil, SP500, Silver, UK interest rates, Nikkei, US deposit rates, sugar, and the dollar/yet currency rate come from 1 day in the past 40 years, reminiscent of figure 3. This means that no sample will ever deliver the true variance. It also tells us anyone using "variance" or "standard deviation" (or worse making models that make us take decisions based on it) in the fourth quadrant is incompetent.

7) Where is the skewness? Clearly the Fourth Quadrant can present left or right skewness. If we suspect right-skewness, the true mean is more likely to be underestimated by measurement of past realizations, and the total potential is likewise poorly gauged. A biotech company (usually) faces positive uncertainty, a bank faces almost exclusively negative shocks. I call that in my new project "concave" or "convex" to model error.

8) Do not confuse absence of volatility with absence of risks. Recall how conventional metrics of using volatility as an indicator of stability has fooled Bernanke — as well as the banking system.

9) Beware presentations of risk numbers. Not only we have mathematical problems, but risk perception is subjected to framing issues that are acute in the Fourth Quadrant. Dan Goldstein and I are running a program of experiments in the psychology of uncertainty and finding that the perception of rare events is subjected to severe framing distortions: people are aggressive with risks that hit them "once every thirty years" but not if they are told that the risk happens with a "3% a year" occurrence. Furthermore it appears that risk representations are not neutral: they cause risk taking even when they are known to be unreliable.
I didn't realize he also has a seminar DVD out, Nassim Nicholas Taleb: The Future Has Always Been Crazier Than We Thought.

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Jonathan Haidt on the moral roots of liberals and conservatives

I recently cited Jonathan Haidt's piece on the differences between liberals and conservatives. I also recommend watching his TED Talk:



Haidt focuses on his various facets of "moral" psychology, when a big part of the difference, especially between libertarian conservatives and progressive liberals, comes from seeing fairness in equity versus equality.

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Intel's secret weapon: Fresh air

I wouldn't call it Intel's secret weapon, since they're publicizing it, but fresh air seems to work just fine for cooling servers — something I've wondered about for a long time:
Fresh air could save millions in datacenter cooling costs, Intel has claimed, after a successful experiment in the New Mexico desert.

Replacing air conditioning by piping in outside air saved power costs with no appreciable increase in server failure rates, the company concluded in a research paper. Despite a lot of dust and major temperature changes--both long considered undesirable in datacenters--the equipment wasn't affected, said Intel.

"Servers... were subjected to considerable variation in temperature and humidity, as well as poor air quality; however, there was no significant increase in server failures," said the paper. "If subsequent investigation confirms these promising results, we anticipate using this approach in future, high-density datacenters."

Intel estimated an annual cost reduction of approximately $143,000 (£79,000) for a small, 500kW datacenter, based on electricity costs of eight cents per kWh. In a larger 10MW datacenter, the estimated annual cost reduction was $2.87 million.

Intel used a normal air filter that took larger particles out of the air but not fine dust. While the 32 servers and racks became coated in dust, and humidity was monitored but not controlled, the failure rate was 4.46 percent, compared with a 3.83 percent failure rate in Intel's main datacenter over the same period.

The experiment was run for 10 months, between October 2007 and August 2008. Server units with over 900 blades, used for production design, were split into two compartments. One of the compartments was air cooled, with temperatures ranging from 18 to 32°C. The other compartment was cooled using air conditioning, and used as a control.
Frankly, I think more homes could use fresh air for cooling.

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College Panel Calls for Less Focus on SATs

Unsurprisingly, a college panel calls for less focus on SATs — and more focus on, well, I think you can guess:
Mr. Fitzsimmons’s group, which was convened by the National Association for College Admission Counseling, also expresses concerns “that test scores appear to calcify differences based on class, race/ethnicity and parental educational attainment.” The report calls on admissions officials to be aware of such differences and to ensure that differences not related to a student’s ability to succeed academically be “mitigated in the admission process.”

“Society likes to think that the SAT measures people’s ability or merit,” Mr. Fitzsimmons said. “But no one in college admissions who visits the range of secondary schools we visit, and goes to the communities we visit — where you see the contrast between opportunities and fancy suburbs and some of the high schools that aren’t so fancy — can come away thinking that standardized tests can be a measure of someone’s true worth or ability.”
What's amusing is that they attack the SAT, because students spend so much time "gaming" it, and recommend using the so-called achievement tests, which aren't gamed as much, as a substitute — ignoring the fact that any alternative will start getting gamed as soon as it replaces the SAT.

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Saturday, September 20, 2008

Physics Proves It: Everyone Should Shoot Granny-Style

Physics Proves It: Everyone Should Shoot Granny-Style — or, rather, they should probably shoot free throws underhand:
Using lots of trigonometry, Brancazio calculated the optimal angle of the arc from the free throw line. If tossed at 32 degrees or less, the ball will most likely hit the back of the rim. “That doesn’t mean it won’t go in, but it will certainly bounce off the metal and reduce the chance of success,” Brancazio says. At angles greater than that, the ball has a chance of making a nice swish. The optimum angle for the shot, he finds, is 45 degrees—plus half the angle from the top of the player’s hand to the rim. “The shorter you are, the steeper that angle has to get to give you the best chance of making the shot,” he says. Of course, lobbing a ball very high so that it comes down nearly straight into the basket would be the most efficient technique, but a shot like that “is almost impossible to aim,” Brancazio says. Instead, he says, his formula makes it possible for a player to shoot with the largest possible margin for error.

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The Tell-All Campus Tour

In The Tell-All Campus Tour, Jonathan Dee explains how Jordan Goldman got his Web 2.0 company, Unigo, off the ground:
With no money, no contacts and no business education whatsoever, Goldman began where any 21st-century self-starter would: “I Google-searched ‘business plan,’ and I found one and just plugged my own words into it. Then it wound up that Wesleyan has an alumni database, and so I looked for people who worked in finance and who graduated 10 or more years before I did. I e-mailed about 500 people, and I just said: ‘Look, I have this idea. What do I do now? What comes next?’ It was a fairly untraditional fund-raising process.”

Actually, with the exception of the bit about Google, it was as traditional as can be, but given that he was 23, Goldman can be excused for thinking that he discovered the Old Boy Network. About 50 Wesleyan alums answered his e-mail messages, and one of those replies — from Frank Sica, a former president of Soros Private Funds Management — was the stuff of drama.

“He said, ‘I live in Bronxville,’ ” Goldman recounted. “ ‘At 7:30 I order my eggs at this diner. I’m done by 8. Come up to the diner and tell me about your idea, and I’ll give you until I’m done with my eggs.’ ” Armed with only his idea and the ability to talk a blue streak about it, Goldman set his alarm and took a train to that diner. No one who has ever met Goldman would have any trouble guessing that by the time Sica was finished with his eggs that day, he was on his way to becoming the young man’s lead investor.

Now Goldman goes to work every day on Park Avenue, in an office with an interior window through which he can keep tabs on his 25 employees, nearly all of them even younger than he. This month his Web site, called Unigo.com — a free, gigantic, student-generated guide to North American colleges for prospective applicants and their families — went live for the benefit of tens of thousands of trepidatious high-school students as they try to figure out where and how to go to college. Not coincidentally, it also aims to siphon away a few million dollars from the slow-adapting publishers of those elephantine college guidebooks that have been a staple of the high-school experience for decades.

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Entrepreneurs hope to save world 1 baby at a time

Entrepreneurs hope to save the world one baby at a time — which sounds like a fine idea:
Chen and her colleagues are finalists in the American Express Members Project contest to fund socially important programs. Their project, Embrace, is an innovative low-cost, low-tech incubator they invented that can help save premature babies in developing countries. The top five finalists will share $2.5 million, with the winner receiving $1.5 million. That would be enough for Embrace to become a self-sustaining enterprise.

Embrace was the result of an innovative entrepreneurship class at Stanford University — Design for Extreme Affordability. Business school and engineering students are given a task to devise an "extremely affordable" solution to a significant societal problem. Chen's team was challenged to create an incubator that cost less than 1% of a traditional incubator, around $20,000.

"We did research in Nepal and India," Chen said.

They discovered that the most important issue in the survival of low-birthweight premature babies was maintaining a constant body temperature.

"We realized that the majority of deaths were in places that had no access to electricity. They needed something extremely affordable, easy enough for a mother to operate with no training, that could be used in a home or clinic setting, since most births in these areas are in (the) home."

They came up with a device that looks like a very small sleeping bag, in which the mother inserts a pouch containing a type of wax that, when heated in boiling water for only 15 minutes, can maintain a constant 37 degree Celsius temperature for about four hours. A mother or caretaker in even the most remote village could use it properly and safely. They named it "Embrace" because it also enables a mother to hold her infant close to her body, unlike the mechanical incubators in Western hospitals.

Something so simple. So easy. So smart. That solves such an important problem. Most importantly, it would cost less than $25 — and can be used over and over again. You can learn more about Embrace at www.embraceglobal.org.
Sadly, this ignores the Malthusian conditions in "developing" countries, which haven't grown their economies as quickly as they've grown their populations. Saving a premature baby, in such conditions, means adding one more mouth to feed, in a place where there may not be enough food to go around. In the short term, saving a baby is so obviously good, but, in the long term, it means more misery. At the very least, it probably means that that family cannot afford to raise the next, healthier child to come along.

Sometimes it really does look like the road to Hell is paved with good intentions.

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QuantLib

QuantLib is a free/open-source library for quantitative finance:
Finance is an area where well-written open-source projects could make a tremendous difference.
That's how you know the developers are approaching the problem from an academic point of view.

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Government Bailouts: A U.S. Tradition Dating to Hamilton

Michael Phillips notes that government bailouts are a U.S. tradition dating back to Alexander Hamilton and cites Alex J. Pollock of the American Enterprise Institute:
"If you would like an empirical law of government behavior, it is that in a panic or threatened financial collapse, governments intervene — every government, every party, every country, every time."

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Thursday, September 18, 2008

The Seed of Apple's Innovation

I enjoyed this old (2004) piece on The Seed of Apple's Innovation, in which Jobs explains what happened to Apple while he was away:
You need a very product-oriented culture, even in a technology company. Lots of companies have tons of great engineers and smart people. But ultimately, there needs to be some gravitational force that pulls it all together. Otherwise, you can get great pieces of technology all floating around the universe. But it doesn't add up to much. That's what was missing at Apple for a while. There were bits and pieces of interesting things floating around, but not that gravitational pull.

People always ask me why did Apple really fail for those years, and it's easy to blame it on certain people or personalities. Certainly, there was some of that. But there's a far more insightful way to think about it. Apple had a monopoly on the graphical user interface for almost 10 years. That's a long time. And how are monopolies lost? Think about it. Some very good product people invent some very good products, and the company achieves a monopoly.

But after that, the product people aren't the ones that drive the company forward anymore. It's the marketing guys or the ones who expand the business into Latin America or whatever. Because what's the point of focusing on making the product even better when the only company you can take business from is yourself?

So a different group of people start to move up. And who usually ends up running the show? The sales guy. John Akers at IBM is the consummate example. Then one day, the monopoly expires for whatever reason. But by then the best product people have left, or they're no longer listened to. And so the company goes through this tumultuous time, and it either survives or it doesn't.
Jobs is an unusual CEO:
Look, I was very lucky to have grown up with this industry. I did everything in the early days -- documentation, sales, supply chain, sweeping the floors, buying chips, you name it. I put computers together with my own two hands. And as the industry grew up, I kept on doing it.

Not everyone knows it, but three months after I came back to Apple, my chief operating guy quit. I couldn't find anyone internally or elsewhere that knew as much as he did, or as I did. So I did that job for nine months before I found someone I saw eye-to-eye with, and that was Tim Cook. And he has been here ever since.

Of course, I didn't tell anyone because I already had two jobs [CEO of Apple and of movie maker Pixar Animation Studios] and didn't want people to worry about whether I could handle three [jobs]. But after Tim came on board, we basically reinvented the logistics of the PC business. We've been doing better than Dell [in terms of some metrics such as inventory] for five years now!

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Colonel House and Philip Dru

Mencius Moldbug recently cited Walter Millis's Road To War: America 1914-1917, which offhandedly refers to one Colonel House, a figure I don't think I could make up:
Edward Mandell House (July 26, 1858–March 28, 1938) was an American diplomat, politician, and presidential advisor. Commonly known by the purely honorific title of Colonel House, although he had no military experience, he had enormous personal influence with U.S. President Woodrow Wilson as his foreign policy advisor until Wilson removed him in 1919.
This is the especially good part:
In 1912, House published anonymously a novel called Philip Dru: Administrator, in which the title character, Dru, leads the democratic western U.S. in a civil war against the plutocratic East, becoming the dictator of America. Dru as dictator imposes a series of reforms which resemble the Bull Moose platform of 1912 and then vanishes.
So, Wilson's foreign policy advisor was a colonel with no military experience, who wrote a novel about a progressive dictator saving America. Hmm...

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Wednesday, September 17, 2008

The Flag of Humanity

When you claim that yours is the The Flag of Humanity, well, that's not necessarily good news for everyone else:
If you heard a Hitler say: "the swastika is the flag not only of Germany, but of the world," you would doubtless be a little concerned. You might think, gee, this Mr. Hitler doesn't mind sounding like he wants to conquer the entire friggin' planet.

But when you hear that the Stars and Stripes "is the flag not only of America, but of humanity," you have a slightly different reaction. And not because you're a gun-totin', God-lovin', truck-drivin' red-state American. Quite the contrary, in fact.
That's Mencius Moldbug talking, and he goes on to cite Woodrow Wilson, from July 4, 1914, describing the policy that now bears his name:
My dream is that as the years go on and the world knows more and more of America it will also drink at these fountains of youth and renewal; that it also will turn to America for those moral inspirations which lie at the basis of all freedom; that the world will never fear America unless it feels that it is engaged in some enterprise which is inconsistent with the rights of humanity; and that America will come into the full light of the day when all shall know that she puts human rights above all other rights and that her flag is the flag not only of America but of humanity.

What other great people has devoted itself to this exalted ideal? To what other nation in the world can all eyes look for an instant sympathy that thrills the whole body politic when men anywhere are fighting for their rights?
Mencius adds his thoughts:
Note the particularly charming phrase "unless it feels that it is engaged in..." What Wilson really means is that [no government] will ever fear America unless [America] feels that [that government] is engaged in some enterprise which violates the rights of humanity.

In other words, [the US government] will judge the world. In other words, [the US government] will govern the world. In other words, [the US government] will rule the world. In other words, [the US government] will dominate the world.

The belief that judging is distinct from ruling, that one can "provide global governance" without "grasping world domination," is not a Wilsonian invention. It is a fundamental part of the American political tradition — the separation of powers. In this case, the separation of executive and judicial authority. One can be an honest broker, without being an imperial overlord.

Rationally — if the term applies — this depends on the concept of "natural law," ie, a theory of right and wrong which is self-evident to everyone honest. Since [the US government] is always honest, being democratic, it and and any other honest, enterprising government will always agree on whether the latter is "violating the rights of humanity." And if they don't, it is. Ergo, [the US government] is always right.

Thus, it is clear that when Serbia wishes to recover a seceded province, it is violating the rights of humanity, whereas when Georgia does the same it is defending them. The former fears America, and rightly so. The latter is helping it support democracy.

So [the US government], the universal democratic nation, may, indeed must, assert its jurisdiction over all. Which it just happens to have the military and financial power to enforce. And is this in the interest of America or Americans? Heaven forfend!
[...]
Lest the odor of cynicism become overpowering, let's pause for a minute, and admit that there is evil in the world. More specifically, there are evil people. And it is a glorious thing, and good for all and sundry, to wrap a rope around their necks and pull the chair away.

The trouble is that if we truly despise evil, we hope to minimize the amount of it in the world. Wilsonism is not inherently evil. A Petri dish is not inherently bacteria-infested. There is such a thing as a sterile Petri dish. But the combination of world domination and profound self-righteousness is a bath of nutrients as nourishing as evil has ever found. And bacteria are not in short supply.

Why would evil not go abroad in the mask of good? Satan has no fear of masks. Wilson, a deeply mystical man, thought of democracy as a sort of antibiotic which ensured that his Petri dish would always remain pristine. It has not, in my opinion, worked out that way.
But the combination of world domination and profound self-righteousness is a bath of nutrients as nourishing as evil has ever found.

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Tesla Motors’ Second Electric Car Will Be Made in Silicon Valley

Tesla’s Model S sedan will be made in Silicon Valley, because California offered $15 million in incentives:
That includes waiving rent for the first 10 years of the 40-year lease on the San Jose property and waiving state sales tax on $100 million worth of equipment. New Mexico was reportedly offering Tesla around $7 million worth of incentives.

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Animal-rights activists suspected in attacks on UC Santa Cruz researchers

Animal-rights activists suspected in attacks on UC Santa Cruz researchers:
The first bomb went off about 5:40 a.m. Saturday, destroying a car outside the home of a UC Santa Cruz researcher. Authorities have not named the researcher.

Three minutes later and less than a mile away, a second device exploded on the front porch of researcher David Feldheim's home while he and his family were asleep. As the house filled with smoke, the scientist, his wife and their children, ages 2 and 4, escaped out a window and down an emergency ladder. Feldheim injured his feet during his escape.

Both devices were incendiary, police said, but it was unclear how they were triggered. Also unknown is how many people were involved in carrying out the attacks.
[...]
"Acts of violence and intimidation such as these are unacceptable, and they continue a troubling pattern seen at UCLA and other UC campuses that should be repugnant to us all," UC President Mark G. Yudof said Monday. "These acts threaten not only our academic researchers and their families, but the safety and security of neighbors in our communities as well."

City officials joined in harshly condemning the bombings and urged members of the public who might have evidence in the case to contact authorities. They announced a $30,000 reward, including $2,500 donated by the Humane Society of the United States.

"The threats and attacks are shocking and abhorrent," Santa Cruz Mayor Ryan Coonerty said. "We as a community are unambiguous in our condemnation of these actions. Let me be clear, this is not protest. This is terrorism."

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Early Computers and Spreadsheets

Jack Crenshaw explores the really early days of computing, including the first computers and early spreadsheets:
As in college, a lot of our output in those days were graphs, and again a large part of our skill was our ability to plot microscopic dots at the right places on a piece of log-log paper, and then fair a smooth curve through them. Back in college, we tended to plot graphs with anywhere from three to seven points on them, but NASA needed much more accuracy. So a lot of our time went into calculating the data for the many points to be plotted. And that's where I learned about spreadsheets.

These were the original spreadsheets, of course — real sheets of 14" x 17" paper, ruled into rows and columns. What we did was to organize the "input" data into one or more columns. Each subsequent column involved operations on previous columns. If you've ever used Excel, I don't have to explain further.

For simple problems with not too many entries, and for problems not needing great accuracy, we would use the good ol' 18" slide rule. For more complex problems, we would use the book of trig functions and the Friden.

For really long problems, we used Donna.

Donna was the department secretary, who doubled as a calculator operator. Donna supported some seven engineers, and had the patience of Job. She would sit there all day, day after day, crunching out those numbers, which we would then plot up and analyze. Donna prided herself on using 10-digit accuracy for everything, even if the input data was only good to three digits. If any errors were going to be introduced, it wasn't going to be at her end.

One day I got a really big problem — one that seemed too big even for Donna to deal with, considering her other duties. I asked a colleague, "What do you do with problems that are too big for Donna?" He said, very matter of factly, "Oh, you take them to the Computer Room."

You should have seen my eyes light up. I had been reading all about the "Giant Brains" — had even learned to program one in college, though I never saw it (the school didn't actually own one). I couldn't wait to see how the folks in the Computer Room dealt with my problem. Eagerly I got directions from my colleague, prepared my data and rushed over to the building he described. Following his directions, I walked down the hall until I arrived at a set of double doors, with a large sign proclaiming, sure enough, "Computer Room." From the other side of the door came a satisfying clattering of high-tech machinery, hard at work.

Holding my breath, I eased open the door.

Inside was a huge room. There must have been 300 desks, all arranged neatly in rows. At each desk sat a woman, and on each desk was a Friden. The women were the computers! I kid you not (sorry, no men were there).

I found out later that their official job description was "GS-2, Computer."
Once I had gotten over the shock, I approached the "head computer." She explained to me how things worked. You used the same spreadsheet format we used — and still use today — except that each column only involved a single math operation. If, for example, the first two columns were the inputs, x and y, then the header for column three might read: (3) = (1) * (2).

After all the calculations were defined, you turned things over to the computers who filled the numbers in. The foreperson assigned different parts of the job to different women, depending on the load. For a really big job, she would keep several parts running in parallel. The first multitasking, multiprocessing computer system, I suppose.

It all actually went quite smoothly. The computers rarely made a mistake, and they used redundant calculation to catch any errors. They would even plot the results up for me, although I rarely used that service. My boss grumbled that they used dull pencils and didn't know how to interpolate. He and I both found that we could plot more accurately.
Sometime after they'd moved on to "real" (non-human) computers, Jack's colleague came to him with an exciting idea:
He said, "Jack, I've come up with a neat computer program that I'd like you to take a look at."

"OK, John," I said. "What does it do?"

"Well," he replied, "Remember back in the good old days when we had to do computing by hand? Remember the way we used to make up those spreadsheets and turn them over to the computer ladies?"

I acknowledged that I had. We spent a little time congratulating ourselves for our progress, at having gotten away from such primitive methods.

John said, "Well, I've developed a computer program that works the same way. All you have to do is to define the formulas for each column of the spreadsheet and give the data. The computer does the calculations just like the computer ladies used to do and gives you a printout that looks just like a spreadsheet. I think it'll be just the ticket for those people who don't know how to program in FORTRAN. It will open up the use of computers to lots more people."

I thought about it for all of 30 seconds, and said, "John, that's the dumbest idea I've ever heard."

There was a moment of silence as John absorbed what I had just said. The sparkle in his eyes dimmed a bit. Crestfallen, he whispered, "Why?"

Now, in my defense you have to understand: in those days we were taught that computer time was precious — $600 per hour, at a time when $600 would buy more than a ticket to a rock concert. It was important, we were told, to keep the CPU busy doing productive work at all times. It was considered far more cost-effective to waste engineers' time than computer time.

So I explained, "John, now that we have electronic computers, we have to learn to do things their way. Anybody who plans to be an engineer in the '60s is going to have to learn to speak to computers in their language. You and I have learned to program so we can do that. What you're trying to do is to ask the computer to make up for the deficiencies of the engineer. You're forcing the computer to do extra work, just because the engineer is too lazy or too dumb to learn the computer's language. You're never going to sell an idea that uses a computer so inefficiently!"

As I spoke, you could see John slowly fall apart. His jaw fell slack, his shoulders slumped, and he actually seemed to age by years, right before my eyes. Finally he turned and left, a beaten and broken man.

I never saw John again. He sent me an example of the output of his program (I recall that it could do automatic graphing of its results, which was quite an innovation at the time). I promptly filed it under "dumb ideas." I heard through the grapevine that John kept trying for awhile, halfheartedly, to interest someone in his spreadsheet program, but as I had predicted he was never able to do so, and he faded into obscurity, along with his program.

And that's why you had to wait 15 more years for VisiCalc, Lotus 1-2-3, and Excel.

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Tuesday, September 16, 2008

The US government supports Israel, right?

The US government supports Israel, right? Mencius Moldbug isn't so sure:
At present, however — that is, in the real world, where [the US government] supports Israel — the expectation appears to be that all disputes will be resolved via Israeli concessions. The only dispute appears to be on the magnitude of these concessions. "Land for peace" is a fairly normal way to end a war — for example, France in 1870 accepted the proposition of "land for peace," ceding Alsace-Lorraine to Germany. On the other hand, France in 1870 had been defeated. Whereas Israel in 1967 was, at least according to all reliable experts, victorious.

So we arrive at a peculiar conclusion. On the one hand, [the US government] supports Israel. On the other hand, if [the US government] ceased to exist, at least for the purposes of the Middle East, Israel's position seems as if it would become much stronger. A conclusion that would seem to indicate that [the US government] opposes Israel. But then, why would it give Israel billions of dollars and fancy weapons?

We are left to conclude that (a) [the US government] both supports and opposes Israel; (b) the magnitude of the opposition exceeds the magnitude of the support (implying net opposition); and (c) the support is overt and obvious, whereas the opposition is somehow... more subtle.

In other words, we are in the position of an astronomer who sees light being bent away from a large visible object. The astronomer must conclude that unless the laws of gravity are reversed in the vicinity of this object, there is an even larger non-visible object on the other side of the light. The latter can be detected only by inference, but the detection remains unambiguous.

Israel makes a great pons asinorum because in this case, the diplomatic dark matter is not at all hard to find. Perhaps it is best explained by the title of this book, which I saw in a window somewhere. According to the author or at least his title, [the US government] is acting as a "dishonest broker" in the Arab-Israeli conflict.

Ie: "justice" in the conflict favors the Palestinians more than [the US government]'s actions today reflect. Ie: [the US government] is pro-Israel, but not in the sense that [the US government]'s interventions in the Middle East are a net positive for Israel. Actually, they are detrimental to Israel. But if "justice" were served, they would be even more detrimental.

So if I sue you for $100,000 and the judge awards me $20,000, I might say that the judge is biased in favor of you. Because you still have $80,000 that is rightfully mine. On the other hand, it's difficult to avoid the conclusion that the judge forced you to pay me $20,000. Which is $20,000 you'd have and I wouldn't, if there was no judge at all. An interesting kind of support.

America, you see, is not really the vampire of the world. The analogy is inexact in two ways. One, a vampire is nourished by the blood of his victims. They grow weak and sickly, while he thrives in ruddy good health. Two, it is always easy to know that a vampire has been eatin' on you, because there are fang-marks on your neck.

America is more the arsonist of the world. As well as the fireman. Wherever fires break out, Uncle Sam is there to pour gasoline on them. The fireman assures us, of course, that he is only setting a backfire to defeat the main blaze. But why is this always the right strategy? Why was he the first one on the scene? Why do his hoses always seem to get tangled, whereas his gas can never runs dry? And why have there been so many more fires since he came to town? But the TV audience sees none of this. All they see is the fireman, fighting the fires.

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Some Words with a Mummy

I started my Halloween-themed reading early, I suppose, when I decided to read a few short stories by Poe, including a satire of his that I'd never read, Some Words with a Mummy, in which a group of Egyptologists apply some electricity from a "Voltaic pile" to an ancient mummy in their possession — and the mummy, which has not had its brain and entrails removed, comes back to life:
Morally and physically — figuratively and literally — was the effect electric. In the first place, the corpse opened its eyes and winked very rapidly for several minutes, as does Mr. Barnes in the pantomime, in the second place, it sneezed; in the third, it sat upon end; in the fourth, it shook its fist in Doctor Ponnonner's face; in the fifth, turning to Messieurs Gliddon and Buckingham, it addressed them, in very capital Egyptian, thus:

"I must say, gentlemen, that I am as much surprised as I am mortified at your behaviour. Of Doctor Ponnonner nothing better was to be expected. He is a poor little fat fool who knows no better. I pity and forgive him. But you, Mr. Gliddon — and you, Silk — who have travelled and resided in Egypt until one might imagine you to the manner born — you, I say who have been so much among us that you speak Egyptian fully as well, I think, as you write your mother tongue — you, whom I have always been led to regard as the firm friend of the mummies — I really did anticipate more gentlemanly conduct from you. What am I to think of your standing quietly by and seeing me thus unhandsomely used? What am I to suppose by your permitting Tom, Dick, and Harry to strip me of my coffins, and my clothes, in this wretchedly cold climate? In what light (to come to the point) am I to regard your aiding and abetting that miserable little villain, Doctor Ponnonner, in pulling me by the nose?"
The mummy explains that his people's natural lifespan is hundreds of years, and that he was embalmed specifically so that he could be revived again later, to live his life in installments, across more than one millennium, which surprises the modern men, who assume that ancient Egypt was primitive:
"The long duration of human life in your time, together with the occasional practice of passing it, as you have explained, in installments, must have had, indeed, a strong tendency to the general development and conglomeration of knowledge. I presume, therefore, that we are to attribute the marked inferiority of the old Egyptians in all particulars of science, when compared with the moderns, and more especially with the Yankees, altogether to the superior solidity of the Egyptian skull."

"I confess again," replied the Count, with much suavity, "that I am somewhat at a loss to comprehend you; pray, to what particulars of science do you allude?"

Here our whole party, joining voices, detailed, at great length, the assumptions of phrenology and the marvels of animal magnetism.
The satire gets interesting when it moves away from technology and the sci-fi premise that the Egyptians did in fact have higher technology than then-modern "Yankees":
This disconcerted us so greatly that we thought it advisable to vary the attack to Metaphysics. We sent for a copy of a book called the "Dial," and read out of it a chapter or two about something that is not very clear, but which the Bostonians call the Great Movement of Progress.

The Count merely said that Great Movements were awfully common things in his day, and as for Progress, it was at one time quite a nuisance, but it never progressed.

We then spoke of the great beauty and importance of Democracy, and were at much trouble in impressing the Count with a due sense of the advantages we enjoyed in living where there was suffrage ad libitum, and no king.

He listened with marked interest, and in fact seemed not a little amused. When we had done, he said that, a great while ago, there had occurred something of a very similar sort. Thirteen Egyptian provinces determined all at once to be free, and to set a magnificent example to the rest of mankind. They assembled their wise men, and concocted the most ingenious constitution it is possible to conceive. For a while they managed remarkably well; only their habit of bragging was prodigious. The thing ended, however, in the consolidation of the thirteen states, with some fifteen or twenty others, in the most odious and insupportable despotism that was ever heard of upon the face of the Earth.

I asked what was the name of the usurping tyrant.

As well as the Count could recollect, it was Mob.
Excellent election-year reading, that.

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Nicotine is largely harmless

Nicotine is largely harmless, but cigarettes are lethal. It's not surprising that Britain's Royal College of Physicians wants to curb — kerb? — smoking, but it is surprising that they're willing to promote safer forms of tobacco:
This week, the Marlboro cigarette empire Altria bought the USA's biggest maker of chewing tobacco, UST, for $10.4bn (£5.8bn). The deal confirms the tobacco industry's interest in diversifying out of cigarettes into "smokeless" products. UST makes Skoal — tea bag-like pouches of tobacco that are held between the cheek and gum, allowing nicotine to be absorbed.

British American Tobacco is also investing heavily in the search for safer ways to deliver nicotine. BAT paid £2bn to take control of the Swedish company ST, which makes Snus — also pouches of tobacco for sucking.

Evidence suggests that sucking a pouch of tobacco is 90 per cent less harmful than inhaling cigarette smoke. But the products are banned in the EU on the grounds that they are, er, carcinogenic, and that to replace one carcinogen with another, albeit one less lethal, is unwise.
"Nicotine is the closest we are likely to get to the perfect drug":
Its effects are diverse; it stimulates, calms and enhances feelings of pleasure, but has few side effects. Its great advantage over other drugs is that its effects are mild. It is pleasurable only within a narrow range of concentrations in the blood. That is what makes it safe.

Only the instrument of its delivery — the cigarette — is lethal. A device that delivers nicotine quickly, efficiently and safely could earn a fortune. But regulations on the sale of medicinal nicotine are so tight that they keep prices high — seven days' worth of nicotine patches costs £17 — and the development of innovative products low.

Professor John Britton, consultant respiratory physician and chief author of the RCP report, said: "The ideal product would be a nicotine inhaler like an asthma inhaler, that delivered a hit of nicotine as close as possible to the experience of smoking a cigarette.

"But the companies [makers of nicotine gum and patches] don't want to do it and the regulatory restrictions make it difficult to get it on to the market. There is no competition. That is why we need a Nicotine Regulatory Authority."

The anomaly in the existing law is glaring. Tobacco companies are permitted to sell nicotine to the public in the form of (lethal) cigarettes, yet it is illegal to sell alternative nicotine products without a licence.

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Why Feminists Hate Sarah Palin

Cathy Young explores Why Feminists Hate Sarah Palin:
Left-wing feminists have a hard time dealing with strong, successful conservative women in politics such as Margaret Thatcher. Sarah Palin seems to have truly unhinged more than a few, eliciting a stream of vicious, often misogynist invective.

On Salon.com last week, Cintra Wilson branded her a "Christian Stepford Wife" and a "Republican blow-up doll." Wendy Doniger, religion professor at the University of Chicago Divinity School, added on the Washington Post blog, "Her greatest hypocrisy is in her pretense that she is a woman."

You'd think that, whether or not they agree with her politics, feminists would at least applaud Mrs. Palin as a living example of one of their core principles: a woman's right to have a career and a family. Yet some feminists unabashedly suggest that her decision to seek the vice presidency makes her a bad and selfish mother. Others argue that she is bad for working mothers because she's just too good at having it all.

In the Boston Globe on Friday, columnist Ellen Goodman frets that Mrs. Palin is a "supermom" whose supporters "think a woman can have it all as long as she can do it all . . . by herself." In fact, Sarah Palin is doing it with the help of her husband Todd, who is currently on leave from his job as an oil worker. But Ms. Goodman's problem is that "she doesn't need anything from anyone outside the family. She isn't lobbying for, say, maternity leave, equal pay, or universal pre-K."

This also galls Katherine Marsh, writing in the latest issue of The New Republic. Mrs. Palin admits to having "an incredible support system — a husband with flexible jobs rather than a competing career . . . and a host of nearby grandparents, aunts, and uncles." Yet, Ms. Marsh charges, she does not endorse government policies to help less-advantaged working mothers — for instance, by promoting day-care centers.

Mrs. Palin's marriage actually makes her a terrific role model. One of the best choices a woman can make if she wants a career and a family is to pick a partner who will be able to take on equal or primary responsibility for child-rearing. Our culture still harbors a lingering perception that such men are less than manly — and who better to smash that stereotype than "First Dude" Todd Palin?

Nevertheless, when Sarah Palin offered a tribute to her husband in her Republican National Convention speech, New York Times columnist Judith Warner read this as a message that she is "subordinate to a great man." Perhaps the message was a brilliant reversal of the old saw that behind every man is a great woman: Here, the great woman is out in front and the great man provides the support. Isn't that real feminism?

Not to Ms. Marsh, who insists that feminism must demand support for women from the government. In this worldview, advocating more federal subsidies for institutional day care is pro-woman; advocating tax breaks or regulatory reform that would help home-based care providers — preferred by most working parents — is not. Trying to legislate away the gender gap in earnings (which no self-respecting economist today blames primarily on discrimination) is feminist. Expanding opportunities for part-time and flexible jobs is "the Republican Party line."

I disagree with Sarah Palin on a number of issues, including abortion rights. But when the feminist establishment treats not only pro-life feminism but small-government, individualist feminism as heresy, it writes off multitudes of women.

Of course, being a feminist role model is not part of the vice president's job description, and there are legitimate questions about Mrs. Palin's qualifications. And yet, like millions of American women — and men — I find her can-do feminism infinitely more liberated than the what-can-the-government-do-for-me brand espoused by the sisterhood.

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Into the Space Age

In discussing the really early days of computing, Jack Crenshaw explains what it meant to move into the Space Age:
After college, I went to work for the space agency, NASA. I was going to help put men on the moon (which I did). My first day, I received the two tools of my trade: an 18-inch government-issue slide rule and a book of five-place trig tables.

See, NASA figured that the three-digit accuracy of the standard 10-inch slide rule just wouldn't cut it for space travel. In general, to get one more digit of accuracy you need a slide rule 10 times longer. But it just happened that the 10" rule could almost get four digits (it could, over part of its range), so that increasing the length to 18" was just enough to get that precious extra digit.

Even more exciting, NASA had real desktop calculators! Electro-mechanical ones, which were sort of adding machines on steroids.

There were a number of brands around. Ours were Fridens. The Friden was a huge machine by today's standards — as big as an old standard typewriter and much, much heavier. Inside were hundreds of little gears and levers that would drive a Swiss watchmaker into paroxysms of ecstasy.

The Friden worked much like the adding machines used for businesses, except it would multiply and divide, as well as add and subtract. There was a keyboard having 10 columns of 10 digit keys, and a carriage like a typewriter. On the carriage were numbered wheels that spun. You typed a number in by punching (that's the right word — no electronics or power-assist here) one key in each column, and then punched the "go" key. To the accompaniment of the noise of a threshing machine, the carriage slewed, the wheels spun, and in a matter of decaseconds, there was your answer. Division was quite a sight to behold, and on those few machines that could do square roots, the noise level rose alarmingly as more and more wheels got into the act.

But most of us didn't have access to the square root machines, and a measure of your proficiency with a Friden was how quickly you could find a square root on a non-square-root Friden. There was a neat algorithm for it that I've never forgotten (no, it's not Newton's method, it's an exact, noniterative algorithm). I also learned the famous "Friden March," a calculation that caused the carriage to chunk along in a neat, "rah, rah, rah-rah-rah" rhythm.

Despite the horrible noises emitted by the Fridens — sounds reminiscent of the clashing of a nonsynchromesh truck transmission — it always gave reliable answers. Over a period of five or six years, I never once saw a Friden give a wrong answer.

The big advantage of the Friden, other than its tendency to get the correct answer, was that we could calculate to as many as 10 digits of accuracy — unheard of until then. But most of our calculations were done to only five digits or so, because that's as many as were in the trig tables. Later I managed to get a book of six-place tables. It was a big book.

Looking back upon the space race and all the high-tech things that were involved in it, helps to remember that, at least through projects Mercury and Gemini, the work was mostly done with slide rules and Fridens.

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Monday, September 15, 2008

What Makes People Vote Republican?

Jonathan Haidt, Associate Professor of Psychology at the University of Virginia, admits that the psychological community is quite liberal, and that psychologists see conservative moral views as narrow-minded, racist, and dumb — in large part because they have very different notions of what morality encompasses.

Berkeley psychologist Elliot Turiel, for instance, claims that morality refers to "prescriptive judgments of justice, rights, and welfare pertaining to how people ought to relate to each other," but ancient moral texts, like Leviticus, dwell on something entirely different, namely, sorting things into two categories — which Haidt refers to as disgusts me (gay male sex, menstruation, pigs, swarming insects) and disgusts me less (gay female sex, urination, cows, grasshoppers ) — not on justice, rights, and welfare at all.

This plays out in his own research into moral psychology:
For my dissertation research, I made up stories about people who did things that were disgusting or disrespectful yet perfectly harmless. For example, what do you think about a woman who can't find any rags in her house so she cuts up an old American flag and uses the pieces to clean her toilet, in private? Or how about a family whose dog is killed by a car, so they dismember the body and cook it for dinner? I read these stories to 180 young adults and 180 eleven-year-old children, half from higher social classes and half from lower, in the USA and in Brazil. I found that most of the people I interviewed said that the actions in these stories were morally wrong, even when nobody was harmed. Only one group — college students at Penn — consistently exemplified Turiel's definition of morality and overrode their own feelings of disgust to say that harmless acts were not wrong. (A few even praised the efficiency of recycling the flag and the dog).

This research led me to two conclusions. First, when gut feelings are present, dispassionate reasoning is rare. In fact, many people struggled to fabricate harmful consequences that could justify their gut-based condemnation. I often had to correct people when they said things like "it's wrong because… um…eating dog meat would make you sick" or "it's wrong to use the flag because… um… the rags might clog the toilet." These obviously post-hoc rationalizations illustrate the philosopher David Hume's dictum that reason is "the slave of the passions, and can pretend to no other office than to serve and obey them." This is the first rule of moral psychology: feelings come first and tilt the mental playing field on which reasons and arguments compete. If people want to reach a conclusion, they can usually find a way to do so. The Democrats have historically failed to grasp this rule, choosing uninspiring and aloof candidates who thought that policy arguments were forms of persuasion.

The second conclusion was that the moral domain varies across cultures. Turiel's description of morality as being about justice, rights, and human welfare worked perfectly for the college students I interviewed at Penn, but it simply did not capture the moral concerns of the less elite groups — the working-class people in both countries who were more likely to justify their judgments with talk about respect, duty, and family roles. ("Your dog is family, and you just don't eat family.") From this study I concluded that the anthropologist Richard Shweder was probably right in a 1987 critique of Turiel in which he claimed that the moral domain (not just specific rules) varies by culture. Drawing on Shweder's ideas, I would say that the second rule of moral psychology is that morality is not just about how we treat each other (as most liberals think); it is also about binding groups together, supporting essential institutions, and living in a sanctified and noble way.
This, he claims, is What Makes People Vote Republican?
When Republicans say that Democrats "just don't get it," this is the "it" to which they refer. Conservative positions on gays, guns, god, and immigration must be understood as means to achieve one kind of morally ordered society. When Democrats try to explain away these positions using pop psychology they err, they alienate, and they earn the label "elitist." But how can Democrats learn to see — let alone respect — a moral order they regard as narrow-minded, racist, and dumb?
At this point in the essay he still sounds quite condescending toward conservatives.

He goes on to describe how his feelings changed when, as a 29-year-old liberal atheist, he spent some time with a family in Bhubaneswar, India, and his basic empathy kicked in:
Rather than automatically rejecting the men as sexist oppressors and pitying the women, children, and servants as helpless victims, I was able to see a moral world in which families, not individuals, are the basic unit of society, and the members of each extended family (including its servants) are intensely interdependent. In this world, equality and personal autonomy were not sacred values. Honoring elders, gods, and guests, and fulfilling one's role-based duties, were more important.
This changed his views of the American religious right:
They want more prayer and spanking in schools, and less sex education and access to abortion? I didn't think those steps would reduce AIDS and teen pregnancy, but I could see why the religious right wanted to "thicken up" the moral climate of schools and discourage the view that children should be as free as possible to act on their desires. Conservatives think that welfare programs and feminism increase rates of single motherhood and weaken the traditional social structures that compel men to support their own children? Hmm, that may be true, even if there are also many good effects of liberating women from dependence on men. I had escaped from my prior partisan mindset (reject first, ask rhetorical questions later), and began to think about liberal and conservative policies as manifestations of deeply conflicting but equally heartfelt visions of the good society.
So he rejects Turiel's narrow definition of morality ("justice, rights, and welfare"):
Here's my alternative definition: morality is any system of interlocking values, practices, institutions, and psychological mechanisms that work together to suppress or regulate selfishness and make social life possible. It turns out that human societies have found several radically different approaches to suppressing selfishness, two of which are most relevant for understanding what Democrats don't understand about morality.
One approach is the libertarian notion of a contractual society, as proposed by John Stuart Mill in On Liberty, where "the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others."

(Haidt seems to think this notion applies to modern, progressive liberalism, by the way.)

Anyway, moral psychology offers some support for such a society:
Psychologists have done extensive research on the moral mechanisms that are presupposed in a Millian society, and there are two that appear to be partly innate. First, people in all cultures are emotionally responsive to suffering and harm, particularly violent harm, and so nearly all cultures have norms or laws to protect individuals and to encourage care for the most vulnerable. Second, people in all cultures are emotionally responsive to issues of fairness and reciprocity, which often expand into notions of rights and justice. Philosophical efforts to justify liberal democracies and egalitarian social contracts invariably rely heavily on intuitions about fairness and reciprocity.
But now imagine another social contract, a conservative one:
But now imagine society not as an agreement among individuals but as something that emerged organically over time as people found ways of living together, binding themselves to each other, suppressing each other's selfishness, and punishing the deviants and free-riders who eternally threaten to undermine cooperative groups. The basic social unit is not the individual, it is the hierarchically structured family, which serves as a model for other institutions. Individuals in such societies are born into strong and constraining relationships that profoundly limit their autonomy. The patron saint of this more binding moral system is the sociologist Emile Durkheim, who warned of the dangers of anomie (normlessness), and wrote, in 1897, that "Man cannot become attached to higher aims and submit to a rule if he sees nothing above him to which he belongs. To free himself from all social pressure is to abandon himself and demoralize him." A Durkheimian society at its best would be a stable network composed of many nested and overlapping groups that socialize, reshape, and care for individuals who, if left to their own devices, would pursue shallow, carnal, and selfish pleasures. A Durkheimian society would value self-control over self-expression, duty over rights, and loyalty to one's groups over concerns for outgroups.

A Durkheimian ethos can't be supported by the two moral foundations that hold up a Millian society (harm/care and fairness/reciprocity). My recent research shows that social conservatives do indeed rely upon those two foundations, but they also value virtues related to three additional psychological systems: ingroup/loyalty (involving mechanisms that evolved during the long human history of tribalism), authority/respect (involving ancient primate mechanisms for managing social rank, tempered by the obligation of superiors to protect and provide for subordinates), and purity/sanctity (a relatively new part of the moral mind, related to the evolution of disgust, that makes us see carnality as degrading and renunciation as noble). These three systems support moralities that bind people into intensely interdependent groups that work together to reach common goals. Such moralities make it easier for individuals to forget themselves and coalesce temporarily into hives, a process that is thrilling, as anyone who has ever "lost" him or herself in a choir, protest march, or religious ritual can attest.
Haidt has found, via Internet surveys, that people who call themselves strongly liberal endorse statements related to the harm/care and fairness/reciprocity foundations, and they largely reject statements related to ingroup/loyalty, authority/respect, and purity/sanctity:
We think of the moral mind as being like an audio equalizer, with five slider switches for different parts of the moral spectrum. Democrats generally use a much smaller part of the spectrum than do Republicans. The resulting music may sound beautiful to other Democrats, but it sounds thin and incomplete to many of the swing voters that left the party in the 1980s, and whom the Democrats must recapture if they want to produce a lasting political realignment.
By that analogy, which sliders are the libertarians playing with again? Because libertarians, or classical liberals like Mill, have very, very different ideas on fairness/reciprocity than modern, progressive liberals.

Read the whole thing. (Think about it. Think, think about it.)

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Prehistoric Light Sabers

Back in 1986 (or so), Jack Crenshaw wrote a piece on the really early days of computing for Micro Cornucopia magazine:
The editor had asked us to offer stories of how things were in "the early days of computing." I expect he meant, "the early days of microcomputing," but I elected to delve back even further in time.


Thus, he describes logs and solving problems with a slide rule or by graphing:
My first technical class in college was a course in how to use the slide rule. The slide rule never left our collective sides, housed as it was in a scabbard hanging from our belts like prehistoric light sabers.

The one operation the slide rule couldn't do was to add/subtract. For that we still had to do things by hand, although in graduate school I finally got a neat little pocket adding machine (based on a design by Pascal), that helped immensely. As a sidelight, I entered a sports car rally as a navigator (the "sports car" was a custom '41 Chevy). We won, thanks to the invincible computing power of my slide rule and adding machine.

As the years progressed, so did our proficiency with the slide rule. Our performances and grades in our classes depended upon it, and we studied it earnestly. Before a quiz, we would carefully adjust it like a soldier cleans his rifle before a big battle. Those three strips of bamboo had to be spaced just right, to slide freely but still stay where they were put. We actually lubricated them with talcum powder for maximum speed without overheating (!). You could always tell the guys who were serious about their grades, by the talcum powder stains on their shirts.

Our skills in graphics were sharpened, too. In those days, the worth of an engineer depended just as much on his ability to draw a straight line or to plot a graph, as on his "book-larnin." Many problems that we now do by computer were solved in those days with graphs and nomograms. One of my favorite courses was Descriptive Geometry. There, we learned to do all kinds of magical things with a pencil and T-square.
I'm told that not all engineers carried a prehistoric light saber at all times. Although unarmed, such engineers could occasionally be found talking to women.

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Why Libraries Are Back in Style

June Fletcher of the Wall Street Journal explains Why Libraries Are Back in Style — and it's not because people are reading:
Reading rates are down and Americans say they love casual living. And yet, one of the most popular rooms in big new houses is a library. Rather than being about books, their appeal is often about creating a certain ambiance. "Libraries connote elegance and quality," says New York architect and interior designer Campion Platt, adding that most of his wealthy clients want one, even if they do most of their reading online.

Libraries have become so fashionable that this month, talk-show host Oprah Winfrey featured the one in her Santa Barbara, Calif., home on the cover of her magazine; it contains first editions collected for her by a rare-book dealer.

In the latest annual National Association of Home Builders consumer survey, 63% of home buyers said they wanted a library or considered one essential, a percentage that has been edging up for the past few years. Many mass-market home builders are including libraries in their house plans, sometimes with retro touches like rolling ladders and circular stairs.

Jeani Ziering, an interior designer in Manhasset, N.Y., says the newfound popularity of libraries is part of a general movement toward traditional design and décor. "When the economy turns bad, people turn to the classics," she says. Libraries are especially appealing during anxious times because they project coziness and comfort, she adds.

What can make libraries more soothing than other formal rooms isn't so much books but the framed family photographs, awards and mementos that share the shelves and define a family's interests and identity, says McLean, Va., architect Chris Lessard. "They're memory rooms," he says. Because libraries are public rooms, oftentimes the books are purely decorative and don't say as much about the family who lives there. The books that people really read, like paperback novels and how-to guides, often are kept out of sight elsewhere in the home.
[...]
Tucson, Ariz., interior designer Terri Taylor says she spends a lot of time scouring flea markets and bookstores for books with fancy bindings for her clients' bookshelves. She selects books to match color schemes rather than for their content. She once was ecstatic to find a stash of beautiful, leather-bound books at the bargain price of $20 apiece — never mind that they were written in German, a language her clients didn't read. "I bought cases of them," she says.

For home builders who are scaling back the size of houses to make them more affordable and cheaper to construct, libraries are a more functional way to create an upscale look than the "old, crazy massive foyers and 'Gone With the Wind' staircases," that characterized houses a few years ago, says Memphis, Tenn., architect Carson Looney.
Sigh.

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How Steel Fails at High Temperatures

Iron atoms in steel: Black balls show irregularities that disrupt magnetic fields, weakening steelNew research uncovers how steel fails at high temperatures, like those in the World Trade Center seven years ago — or in the fusion reactors of tomorrow:
The key advance is the understanding that, at high temperatures, tiny irregularities in a steel's structure can disrupt its internal magnetic fields, making the rigid metal soft.

"Steels melt at about 1,150C (2,102F), but lose strength at much lower temperatures," explained Dr Sergei Dudarev, principal scientist at the United Kingdom Atomic Energy Authority (UKAEA).

At room temperature, the magnetic fields between iron atoms remain regular, but when heated, these fields are altered allowing the atoms to slide past each other, weakening the steel.

"[The steel] becomes very soft. It is not melting but the effect is the same," said Dr Dudarev.

He said blacksmiths had exploited this property for hundreds of years - it allows iron to become pliable at temperatures much lower than its melting point.

The peak in this pliability is at 911.5C, but begins at much lower temperatures, at around 500C (932F) - a temperature often reached during building fires.

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Pakistan's Newest Feudal Lord

Robert Kaplan is not impressed with Pakistan's Newest Feudal Lord, Asif Ali Zardari, who was jus sworn in as Pakistan's president, replacing Pervez Musharraf:
Zardari's sole qualification is that he is the widower of the slain leader of the Pakistan's People's Party, Benazir Bhutto. Her main qualification for leading her party and twice serving as prime minister was that she was the daughter of the late prime minister, Zulfikar Ali Bhutto. Pakistan is steeped in feudalism and governed by the cult of personality that arises from it. Political parties have no ideology: they are mere extensions of their leaders' love of self and power.

Zardari, the new president, is an erstwhile polo player and playboy whose singular accomplishment in life is that he got Bhutto to marry him. When his wife was prime minister, he was known as "Mr. Ten Percent," for the commissions on state contracts he allegedly took. During the years his wife was in office, he reportedly made off with many tens of millions of dollars that enabled him to, among other things, buy a massive estate in Britain. For years, Swiss authorities wanted him for money laundering. His life seems to have no higher purpose than joining the ranks of the megarich. He is reputed to be the ultimate bullying rogue. His ascension to the presidency is viewed as another sign that Pakistan will join the ranks of other failed states.

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How Arnold Kling Lost His Macro Religion

Arnold Kling reminisces about how he lost his macro religion:
Greg Mankiw has an essay called The Scientist and the Engineer, which is about the gulf between academic macro and the macro used by forecasters and policymakers. I experienced this conflict intensely early in my career.

From January through August of 1976, I was a research assistant in the National Income section at the Federal Reserve Board. I worked for Dave Wyss, a model jockey. A model jockey might ask, "What will be the effect of the stimulus proposal on GDP?" You have an equation, estimated using past data, that predicts how much consumption will go up for a given increase in disposable income. You interact that with a bunch of other equations, and out comes your answer. That is how the engineers look at macro.

In the fall of 1976, I started grad school at MIT. I was surprised to find that young scientists were not impressed by engineers. Ray Fair, an engineer-type from Yale, came to teach a course in macro-econometric modeling, and he became a laughing-stock. The course consisted of Fair walking through his own model of about 100 equations, and I can remember classmate John Huizinga (now at U. of Chicago) sarcastically commenting, "Let me guess. The lagged dependent variable, right?" In layman's terms, what Huizinga was complaining about was that regardless of the type of variable that Fair was trying to predict (inflation, unemployment, consumer spending, what have you), he always found a theoretical rationale for including the previous quarter's value of that variable in the prediction equation. The statistical performance of his forecasts rested on this crutch.

Nonetheless, I was still feeling loyalty to the engineers. In fact, a lot of what the scientists were doing struck me as equivalent to asking how many angels can dance on the head of a pin.
Then Kling attended a lecture by Bob Hall — "The Life Cycle/Permanent Income Hypothesis of Consumption" — and found that quarterly changes in income had no statistically significant relationship to quarterly changes in consumption:
Lots of people, myself included, suspected Hall of pulling some sort of Swindle. It took him a few years to get his paper published. Soon, I got my degree and went back to work at the Fed.

When I rejoined the engineers at the Fed, Hall had planted seeds of doubt in my mind about the reliability of looking at data over time in terms of absolute levels, because looking at quarterly changes can produce different results. Clive Granger (who recently won a Nobel) and Christopher Sims were raising all sorts of alarms about the problem of what is called nonstationary data. After a few years of agonizing about this issue off and on, I came to the conclusion that the engineers' models are an exercise in self-deception. Macroeconomics is steeped in data but issues in macro cannot be resolved by data. One's views on macro are more like religion.

I have not kept up with what the scientists of academia are doing in macro. It still strikes me as angel-counting. But I don't believe that the engineers know very much, either. I don't think of the economy in terms of a system of equations. I think that what Ben Bernanke is doing now — floundering, trying to prop up the financial system without creating too much inflation or moral hazard — is more typical of how one has to operate as a central banker (unless things are going smoothly, in which case you sit back and try to do as little as possible).
Kling concludes something more than you might expect:
Hall's methods also affect my outlook on global warming. The fact that global temperatures are high at the same time that atmospheric carbon dioxide is high does not convince me. Changes in the two over shorter time horizons appear to be unrelated. I understand that there are scientific arguments that would justify a strong long-term relationship and a weak short-term relationship, but those arguments only serve to convince me that the observed data cannot rule out man-made global warming. The case that the data prove man-made global warming is very weak, the way that I see it.

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Sunday, September 14, 2008

The New Pranksters

The Old Pranksters of the '60s and '70s are upset that The New Pranksters of today aren't subversive enough:
Improv Everywhere pranks have typically been aimed at the consumer culture. In one 2006 stunt, 80 people dressed in what looked like Best Buy employee uniforms — blue shirts and khakis — walked around in one of the chain's stores in Manhattan, much to the confusion of everyone around them. Mr. Todd says a store employee called the police and the pranksters disbanded after the authorities arrived. Best Buy spokeswoman Susan Busch says the company "took it in good stride" and would only object if the prank interfered with customers shopping.

Last year, the group sent 111 shirtless men into an Abercrombie & Fitch in New York City, in a spoof of the chain's use of bare-chested hunks in its ad campaigns. The men (some fat, some thin) were told to say they were shopping for a shirt. Spokesman David Cupps says the company has no comment.

The group also sent more than 50 redheads to stand in front of a Manhattan Wendy's and chant "No pigtails!" in a mock protest of what they said was the inaccurate portrayal of redheads in the chain's ad campaign. Company spokesman Bob Bertini says the stunt was a minor distraction and showed people "engaging with the brand."

In fact, some advertisers are starting to see the marketing value of pranks. Taco Bell recently hired Mr. Todd to stage a "freeze" in a new restaurant in Flushing, N.Y., where paid extras posing as employees and patrons simply froze in place, baffling the actual customers. The stunt was later used in a viral marketing campaign for the restaurant's Frutista Freeze drink, and a video of the prank has been viewed 500,000 times online, says Taco Bell spokesman Will Bortz. "We thought it was brilliant," he says.
I love the indignation of "serious" pranksters:
Some of Mr. Todd's admirers objected, however. "Taco Bell killed the freeze," says David Kartsonis, a 21-year-old video and TV producer from Redondo Beach, Calif., who helps organize events for GuerilLA. He says he won't do the stunt now because it's been overexposed. Mr. Kartsonis also complains that Improv Everywhere's videos seem geared more toward viral popularity online than in-the-moment fun: "They spend a lot more time worrying about the end viewer. We focus on people who are actually there at the time enjoying it."

Mr. Todd says he did the Taco Bell stunt after the freeze craze had passed; freezes have already been performed in 50 countries, he says.

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Governor Palin and Senator Clinton address the nation

Governor Palin and Senator Clinton address the nation:

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Saturday, September 13, 2008

From Film, to Game, to Bargain Bin

While video games based on movies are generally of excremental quality, Chris Bateman notes, they still sell well — and there are sound reasons for the path From Film, to Game, to Bargain Bin:
Film-to-game adaptations are a merchandising proposition — the whole basis of the commercial viability of the form is to get the game on the shelves when it can share in the hype of the movie (thus saving on marketing costs). Consequently, the damned souls condemned to work on a film-to-game adaptation are immediately up against the clock. The famed E.T. The Extra-Terrestrial game had to be made in six weeks — when this is taken into account, its poor quality is perhaps more forgiveable.

That’s just the beginning of the problem though. Not only do you have insufficient time to work on these kinds of projects, but you are usually working solely from the screenplay (because you have to start work before principal photography has begun) and so if the goal of the project is to have the game represent the film, you can look forward to a panoply of crises later in the project as you discover your game doesn’t match the film at all. Not to mention that as well as having a publisher interfering with the development process, you also have the licensors from the movie studio interfering — and this usually means even more disastrously ill-conceived feedback than usual.
[...]
And let’s not forget, many of these games do sell rather well. Sales figures below half a million are quite rare for a big film-to-game license, and figures around a million are common. These aren’t exactly a high watermark figure (five, ten and fifteen million unit sales exist for the best titles in the current market) but they probably bespeak of a project in profit. Remember that E.T. game that everyone likes to knock? It still sold 1.5 million units. The game is only considered a failure because Atari paid too much for the license and thus manufactured too many units trying to hit the break point; if their bid had been reasonably judged, they would still have made a profit on this title, irrespective of the quality of the game.

The ghastly truth of the matter is that many perfectly well-made games do not sell in unit numbers on a par with the film-to-game adaptations, which underscores the reason for the adaptations in the first place: the commercial reality is that you’re going to sell more copies of a mediocre game with a strong brand license (especially with simultaneous release) than of a well-designed original game at least nine times out of ten, if not more. If you’re an investor (instead of, say, a gamer), which proposition do you think you’re going to prefer?
So, how do you end up with a quality film-based game, like GoldenEye?
GoldenEye, for instance, was not released to coincide with the 1995 Bond film of the same name, and was in fact released to coincide with the following Bond movie (Tomorrow Never Dies) in 1997. The team had the time they needed to get the game as good as it could be, and it benefited from superior review scores, word-of-mouth and all the other advantages of a quality game title that didn’t have to be rushed to master.
Also, if a film doesn't suggest a game that hardcore gamers will like, how about not trying to make a game for hardcore gamers? Make a game for the audience you have:
Most videogames are too difficult for the mass market audience — many adaptations shouldn’t be making a game for the hobbyists at all, they should be making it for the actual audience such a licensed game will receive. It seems like a no-brainer, and yet developers get this wrong time and time again.

Case in point, Traveller’s Tales 2003 Finding Nemo game was monstrously old school in its design sensibilities; it’s hard to believe that the audience for the film who were then interested in the game could possibly have their play needs met by this sequence of unceasing pain. Yet the game sold in good numbers (about 1.12 million units in the US on the PS2) — on the back of the popularity of the brand. I do not think it is much of a stretch to suggest a more forgiving, more casual-friendly game design could have been delivered on the same resources but have better met the needs of the audience for a Finding Nemo branded game, and benefited from better sales on the back of better word-of-mouth and fewer returns.

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Why delaying gratification is smart

A recent study demonstrates why delaying gratification is smart — or, rather, how:
In this study, 103 healthy adults were presented with a delay discounting task to assess self-control: a series of hypothetical choices where they had to choose between two financial rewards, a smaller one which they would receive immediately or another, larger reward which would be received at a later time. The participants then underwent a variety of tests of intelligence and short term memory. On another day, subjects’ brain activity was measured using fMRI, while they performed additional short-term memory tasks.

The results show that participants with the greatest activation in the brain region known as the anterior prefrontal cortex also scored the highest on intelligence tests and exhibited the best self-control during the financial reward test. This was the only brain region to show this relation. The results appear in the September issue of Psychological Science, a journal of the Association for Psychological Science.
(Hat tip to FuturePundit.)

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Friday, September 12, 2008

Take Distorted and Psychedelic iPhone Photos

Take Distorted and Psychedelic iPhone Photos:
The iPhone has no physical shutter and instead uses photon gating on its CMOS sensor. Some parts of the image are recorded before others, much like with a scanner. The iPhone's CMOS scanner seems to be a lot slower than, say, the CMOS sensor on your Canon point and shoot camera. Therefore, as the camera is recording the image, any changes over that small but significant amount of time are recorded. Examples of this effect from photography days of yore (caused by old focal-plane shutters that were very slow) are the famous Lartigue photo of the leaning race car. It's also known in a related form as slit-scan photography.

What this means in iPhone terms is that if the subject or camera is moving — and if the ambient light is bright enough to allow for a fast shutter speed — the subject doesn't blur, but rather distorts. Usually the result is pretty unpredictable, but with some practice one can see how certain effects can be created.
(Hat tip to Mike.)

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Biologists on the Verge of Creating New Form of Life

Alexis Madrigal of Wired reports that a team of biologists and chemists is closing in on bringing non-living matter to life:
It's not as Frankensteinian as it sounds. Instead, a lab led by Jack Szostak, a molecular biologist at Harvard Medical School, is building simple cell models that can almost be called life.

Szostak's protocells are built from fatty molecules that can trap bits of nucleic acids that contain the source code for replication. Combined with a process that harnesses external energy from the sun or chemical reactions, they could form a self-replicating, evolving system that satisfies the conditions of life, but isn't anything like life on earth now, but might represent life as it began or could exist elsewhere in the universe.

While his latest work remains unpublished, Szostak described preliminary new success in getting protocells with genetic information inside them to replicate at the XV International Conference on the Origin of Life in Florence, Italy, last week. The replication isn't wholly autonomous, so it's not quite artificial life yet, but it is as close as anyone has ever come to turning chemicals into biological organisms.

"We've made more progress on how the membrane of a protocell could grow and divide," Szostak said in a phone interview. "What we can do now is copy a limited set of simple [genetic] sequences, but we need to be able to copy arbitrary sequences so that sequences could evolve that do something useful."

By doing "something useful" for the cell, these genes would launch the new form of life down the Darwinian evolutionary path similar to the one that our oldest living ancestors must have traveled. Though where selective pressure will lead the new form of life is impossible to know.

"Once we can get a replicating environment, we're hoping to experimentally determine what can evolve under those conditions," said Sheref Mansy, a former member of Szostak's lab and now a chemist at Denver University.

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It's not an accident

In explaining how to occupy and govern a foreign country, Mencius Moldbug notes that military malpractice is often not an accident:
So a Western government that uses its military as an occupying force in a foreign country, without a strong occupation based on the principle of mixed authority, without suppressing competing political and military activity, and with rules of engagement that mimic criminal-justice procedures designed for a civilized Western society, is abusing said military. I find this imprudent. You can kick a poodle. You can own a wolf. But if you own a wolf, don't kick it.

Worse, while Professor Luttwak's concept of "military malpractice" is technically accurate, it makes the situation sound like an accident. It is actually much worse than that.

A failed occupation, like that in Afghanistan, or a Pyrrhic half-success such as Iraq or Vietnam, is of considerable political utility to those whose theory of government predicts that military occupation of a hostile population can never succeed. This would be the "democratic," or "progressive," or simply "left," side of your radio dial. Not coincidentally, this is also the side which is vending the "hearts and minds" theory, and doing its best to eradicate the "grasp the nettle" theory from human memory.

And the cycle works. When an occupation fails, it is because it failed to win "hearts and minds." And the next occupation will be even more tender-handed. It will cower even more abjectly before the delicate flutter of the native heart. It will completely forget the fact that the native has a mind, too, and it is far easier to communicate with a mind than with a heart. It will kill more and more American soldiers, and devastate more and more foreign countries. (And other foreign countries will be devastated not by occupation, but by the lack of it — in the person of a Mugabe, a Saddam, an Idi Amin.)

Moreover, who are the soldiers who are dying in these theatrical exercises? Overwhelmingly, Amerikaners. Whose political fortunes are advanced by the repeated demonstration that "war never solves anything?" Certainly not the Amerikaners.

Thus these sabotaged occupations are revealed in their true nature: they are civil wars by proxy. The goal of war is political power. In a sabotaged occupation, the left gains political power, not in Iran or Iraq or Vietnam, but in America, by using the deaths of thousands of American soldiers to prove to the TV audience that reality and progressive reality are the same thing.

The fact that no one is thinking this consciously — progressives are overwhelmingly sincere — does not change the fact that it works.

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The Evolution of National Flags

I've discussed Anglospheric Vexillology before, but I just came across another piece on the evolution of national flags, so I thought I'd repeat some of the story of the American and British flags.

The original, but unofficial, U.S. flag, which flew until June 14, 1777, was the Grand Union Flag, which features the British Union Flag in the first quarter — but that British Union Flag isn't the flag we all know and love from early Def Leppard videos.

That's because the British Union wasn't done growing into the United Kingdom 1777, and its flag wasn't done evolving.



It's no accident that the red and white stripes aren't symmetrical:
In 1801, an Act of Union which made Ireland a co-equal member of the United Kingdom made it necessary to add a symbol for Ireland to the flag, but without obliterating any of the existing symbols. If the St. Patrick's cross had been centered on the diagonal stripes, then St. Andrew's cross would have been relegated to an inferior position, basically serving only as a border for St. Patrick's. But Scotland was the senior of the two kingdoms, so this was unsatisfactory. The solution was to divide the diagonal stripes diagonally, so that the red St. Patrick's cross would take up only half of each stripe, and so that half devoted to St. Andrew would take the place of honor. Thus, in the two hoist quarters, the white St. Andrew's cross occupies the upper position, and in the two fly quarters, the red St. Patrick's cross occupies the upper position.
Read the whole article for some other crazy flag evolutions. The flag of the Philippines has gone through some wacky permutations.

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5 Reasons to Move Your Startup Out of Silicon Valley

Howard Anderson shares 5 Reasons to Move Your Startup Out of Silicon Valley — but I found the intro more interesting than the list:
All tech startups need just a few ingredients to germinate: sophisticated money; first-rate technology universities; and a few template successes (a Google or a Facebook, and so on) to encourage founders to get off their duffs. Contrary to current wisdom, these ingredients exist in many communities outside of Silicon Valley — in fact, they always have.

When you add a large and economically accessible employee base to our first three criteria, you have the recipe for successful startups. Tel Aviv is a good non-U.S. example. Israel has more PhD’s per capita than any place on Earth, plus a military that turns out gobs of advanced technology. The result: There are now more VC’s in Israel than there are rabbis.

Similarly, after World War II, oil companies in Texas needed to find new sources of petroleum, and they turned to geological survey companies for help. One of them had a little subsidiary, Texas Instruments, where the computer on the chip was eventually built. Some years later, Michael Dell arrived at a much-enhanced engineering school on the campus of the University of Texas, and the rest, as they say, is history.

I am what you might call a startup gray-beard and I’ve seen it all. Founders can sometimes get too fixed to the idea that they must be in a certain incubating environment to succeed, when really, getting out of the startup fishbowl is sometimes the best thing they could do. I often encourage startups I invest in or founders I counsel to be contrarian and start their firms outside of the Valley, or failing that, to move East while they still can.

If you want to stay stateside, I’m partial to Boston, my home town, but there are plenty of other cities to consider, too. My top non-Silicon Valley cities are: Boston; Pittsburgh; Philadelphia; Austin; Research Triangle, N.C.; Minneapolis; Tallahassee; Toronto; and Basking Ridge, N.J.

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Scientific Parenting from 1947

Behold! Scientific Parenting from 1947:
Little John Gray Jr., three months old when these pictures were taken, has seldom been outside of this glass house in which he lives. His showcase home is temperature and humidity controlled, dirt-free and has a built-in air filter. It is partially sound-proof-he can bellow without straining the family nerves. He doesn’t catch cold; visitors can’t pass their germs through the glass and the house’s temperature never varies from 84 degrees. At the slightest deviation, a bell rings. There are no draughts and neither is there the fear of smothering; there are no bed covers. Papa John Gray Sr. built the ingenious baby house in the workshop of his home in Sea Cliff, Long Island, New York. Only time will tell whether the child will escape the usual ills.
(Hat tip to BoingBoing.)

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Zoologists capture first photos of okapi in wild

I had no idea that the okapi — a species I'd seen at the zoo — had never been photographed in the wild — before now:
The photos were taken by cameras set up in the Virunga National Park by the zoological society and conservationists in Congo after okapi tracks were spotted there a few years ago.
[...]
The okapi is only known to exist in Congo, primarily further north in Ituri provinces's Okapi Wildlife Reserve. There, they are difficult to spot because they are shy and usually only move around in couples. Virunga officials say before the okapi was captured on camera, it was not known whether it still roamed the park.

"We are encouraged by the evidence that okapis have survived in Virunga, despite the years of conflict," Virunga National Park Director Emmanuel de Merode said in an e-mailed statement to The Associated Press. "Park rangers have only recently regained control of this area that was formerly occupied by armed militias. But while it is positive that the okapi population remains, we are aware of their vulnerability to intense levels of poaching."

The photos also indicate the animals are more widely distributed in the park than was previously believed.

"We've managed to get pictures of three separate individuals, and we've also got a picture of one roaming around at nighttime and actually foraging, which is the first evidence of this behavior," said Kumpel. Scientists previously believed okapi fed only during the day, she said.

Virunga, near the Rwanda and Uganda borders, is also home to some of the world's last remaining mountain gorillas. Part of the reserve is still occupied by Congolese and Rwandan rebels, who have hidden in its dense forests for more than a decade and used parts of it as bases to launch attacks.

Kumpel said the one other known photograph of a wild okapi showed only a leg.
So, are all the okapis in captivity descended from specimens captured before photography?

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Lucky break allowed dinosaurs to rule Earth

Apparently a lucky break allowed dinosaurs to rule Earth — by wiping out their rivals:
Dinosaurs appeared about 230 million years ago, during the Triassic Period, and competed for 30 million years with a group of reptiles called crurotarsans, cousins of today's crocodiles that grew to huge sizes and looked a lot like dinosaurs.

Many scientists believed dinosaurs were simply superior to crurotarsans and fared better because the earliest dinosaurs walked on two legs, not four, and because they may have been warm-blooded.

But scientists led by Steve Brusatte of Columbia University and American Museum of Natural History in New York conducted an extensive review of fossils and found that the two groups were evolving at roughly the same pace and the crurotarsans actually had a larger range of body types, diets and lifestyles.

The dinosaurs won out, Brusatte concluded, because some type of planetary calamity 200 million years ago — dramatic climate change or maybe a large meteorite impact — nearly wiped out the crurotarsans while sparing the dinosaurs.

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Thursday, September 11, 2008

How to occupy and govern a foreign country

Mencius Moldbug explains how to occupy and govern a foreign country:
[Grasping the nettle] is an old English metaphor known to all colonialists. As the rhyme goes:
Tender-handed, grasp the nettle, and it stings you for your pains.
Grasp it like a man of mettle, and it soft as silk remains.
(Supposedly the toxin injectors of the stinging nettle are activated by a light brush but deactivated by firm pressure. I have not tested this personally.)

The substance of the nettle metaphor comes from a theory of civil war that is the polar opposite of the "hearts and minds" theory. Under the nettle theory, insurgencies happen because, and only because, the insurgents perceive a chance of winning.

Like all men, they fight for glory, power, and plunder. Any government can prevent and/or terminate all internal violence by making it clear to its opponents that victory is impossible, and the only results of any struggle will be ignominy and imprisonment at best, mutilation and death at worst. To convey this message is to grasp the nettle "like a man of mettle."

The solution to the problem of colonial government, then, is to govern: to enforce order instantly, completely and without compromise, tolerating no challenge to the occupying authority whether military or political, religious or criminal. Lord Cromer, for instance, would have been simply aghast at the fact that the US occupation authorities tolerated not only native political parties, but parties with armed paramilitary wings. It has taken five years to mostly, sort of, pretty much correct this amazing elementary howler.
[...]
In summary: the theory that it is impossible, in the 20th century, for an effective modern military to occupy and govern a foreign country is simply not tenable. This illusion has been fostered by a pattern of "tender-handed" occupations, combined with a "hearts and minds" theory of insurgency that prescribes more tenderness as soon as the nettle starts to sting. Unsurprisingly, this prescription does not work. By sustaining the illusion that the quack medicine of "hearts and minds" is effective, military experts sustain the illusion that no other medicine exists and no occupation can be successful.

This is not a novel observation. My point is the same as Professor Luttwak's: trying to run an occupation without "grasping the nettle" is military malpractice.

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Gym Generates Energy from Pedal Power

Years ago I wondered how much energy an exercise bike could generate if re-purposed. Not much. Which is why I tossed away the idea of a gym generating its own energy from pedal power — but I ignored the potent "green" marketing potential:
Adam Boesel’s newly opened gym uses human-power to create real energy from four spin bikes at a rate of 200 to 600 watts per hour, depending on how fit the rider is. The energy produced is then stored in a battery that’s used to run the rest of the gym’s equipment, along with solar-power.

Green Microgym, which opened September 1, joins a growing number human-powered gyms and includes includes state-of-the-art elliptical trainers and treadmills, which currently use 30% human-power and 70% solar-power, a yoga room with a cork floor and energy-saving ceiling fans are also in place.

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How Banking Panics Worked Before the Fed

Bryan Caplan notes that Princeton has re-released Friedman and Schwartz's The Great Contraction, with Ben Bernanke's speech in honor of Friedman's 90th birthday as the book's new epilogue, but the highlight for Caplan is Bernanke explaining how banks dealt with panics before the Fed existed:
Before the creation of the Federal Reserve, Friedman and Schwartz noted, bank panics were typically handled by banks themselves — for example, through urban consortiums of private banks called clearinghouses. If a run on one or more banks in a city began, the clearinghouse might declare a suspension of payments, meaning that, temporarily, deposits would not be convertible into cash. Larger, stronger banks would then take the lead, first, in determining that the banks under attack were in fact fundamentally solvent, and second, in lending cash to those banks that needed to meet withdrawals. Though not an entirely satisfactory solution — the suspension of payments for several weeks was a significant hardship for the public — the system of suspension of payments usually prevented local banking panics from spreading or persisting...
The Fed was created to improve upon this system, but that's not how things played out:
At the same time, the large banks — which would have intervened before the founding of the Fed — felt that protecting their smaller brethren was no longer their responsibility. Indeed, since the large banks felt confident that the Fed would protect them if necessary, the weeding out of small competitors was a positive good, from their point of view.
Caplan adds one point he wishes Bernanke had made:
The U.S. banking system's "not entirely satisfactory" approach to crisis operated under a major handicap: The branch banking laws. Until then 1990s, an array of state and local regulations prevented banks from geographically diversifying. As a result, the U.S. banking system was unusually vulnerable to regional economic shocks. Thus, even without the benefit of hindsight, the creation of the Fed was poorly conceived. If Americans wanted to increase the stability of their banking system, they could simply have abolished the laws that made it so unstable.

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10 Incredible Underground Lakes and Rivers

Environmental Graffiti presents photos and descriptions of 10 Incredible Underground Lakes and Rivers — and they are pretty incredible.

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A New View On TV

Economic researchers present A New View On TV:
The variation Mr. Gentzkow and Mr. Shapiro exploited was the timing of the introduction of TV into different cities. Television began taking off in the U.S. in 1946, after a wartime ban on TV production was lifted. But the Federal Communications Commission stopped granting new commercial television licenses from September 1948 to April 1952 while it made changes in allocating broadcast spectrum. There was a long lag between when some cities got television and when others did.

The economists then looked at results of a survey of 800 U.S. schools that administered tests to 346,662 sixth-grade, ninth-grade and 12th-grade students in 1965. Their finding: Adjusting for differences in household income, parents' educational background and other factors, children who lived in cities that gave them more exposure to television in early childhood performed better on the tests than those with less exposure.
Naturally, TV helps children from non-English-speaking families the most.

Perhaps Everything Bad is Good for You?

(Hat tip to Tyler Cowen.)

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Number Sense

Most animals have a basic number sense, allowing them, at a glance, to estimate the number of, say, prey animals before them:
The Johns Hopkins team wondered whether this basic, seemingly innate number sense had any bearing on the formal mathematics that people learn in school. So the researchers asked 64 14-year-olds to look at flashing groups of yellow and blue dots on a computer screen and estimate which dots were more numerous. Though most of the children easily arrived at the correct answer when there were (for example) only 10 blue dots and 25 yellow ones, some had difficulty when the number of dots in each set was closer together. Those results helped the researchers ascertain the accuracy of each child's individual "number sense."

They then examined the teenagers' record of performance in school math all the way back through kindergarten, and found that students who exhibited more acute number sense had performed at a higher level in mathematics than those who showed weaker number sense, even controlling for general intelligence and other factors.
(Hat tip to Al Fin.)

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Wednesday, September 10, 2008

Amerikaners

Mencius Moldbug reserves the right to refer to red-staters, collectively, as Amerikaners:
Like their lexical analogues, the Amerikaners are a cultural group of European stock, but their present-day traditions cannot be easily connected with any group in modern Europe. We cannot say this of the Universalist Eloi of the coasts, whose connection to the English Dissenters and their secular, liberal heirs has been continuous since day one. For example, American traditionalist or "fundamentalist" Christianity, which is nominally Protestant but seems almost Catholic next to the thoroughly Quakerized blue states, has historical roots which are quite obscure and thoroughly American.
His question is, When will the Amerikaners decide that they've had enough?
Sixty (60) percent of American voters call themselves "conservative." Voting as an organized, disciplined bloc, it should be straightforward for them to defeat and destroy the remaining 40 — let's say 20% Eloi, 20% Morlock. Moreover, if such a majority demands a comprehensive reconstruction of government, not just a cosmetic change among a few ceremonial officials who have no real executive authority, the Eloi and Morlocks can hardly resist them. Especially since the American military class is, almost by definition, Amerikaner.

In retrospect, any such reconstruction would be accepted by all, of whatever caste. The Eloi will see the light, as they always do. As Osama put it: they like the strong horse. In an Amerikaner republic, Eloi will elbow each other out of the way to eat overpriced American food, wear marked-up knockoffs of American prole clothes, live in actual old American buildings, etc, etc.

Of course the Eloi already do these things. But in our New Albion, they will do them with flags, God and guns. (Possibly even Confederate flags.) And the Morlocks will be forced to deal — as they already are. (Although once the bar is reset, I suspect that less force will be required.) [...] And Sarah Palin will put together a small edition of her family's wise old Alaska sayings, bound in red, white and blue, which fits nicely in the lapel of your blazer.

You may, or may not, be thankful that this is not going to happen. It is not going to happen because the Amerikaners are not organized enough to make it happen. Given infinite time, they will certainly get organized, which is why I say "when" rather than "if." But time is not on the Amerikaners' side. Their horse has been weakening for the last century.

The Amerikaners' problem is that they're governed by their enemies, the progressives, who have converted democratic politics into a reality show and rule through the extended civil service. The civil service is nominally responsible to the elected arms, but the latter would have to put up a terrible fight to even touch them. And progressives fight the peril of a "populist" democratic reaction with two slow, but inevitably lethal, strangulation tactics: subsidized progressive education, and Morlock voter importation.

The last quasi-successful Amerikaner reaction was the "Return to Normalcy" of the 1920s. Considering the royal ass-whupping the Amerikaners have been taking since then, "normalcy" (which, in classic Amerikaner style, is not even a word) is an awful mild description of the converse. But not even a gentle, Harding-Coolidge style restoration is a real possibility today.

The fatal flaw in the democratic mind of the Amerikaner, or "conservative," is that he believes that his country's political system basically works and is the best in the world. It has just gone slightly off the rails in the last few decades. But it can be set right with a minor corrective operation, ie, replacing a few ceremonial officials with good, clean-minded, child-bearing Amerikaners.

This belief system, which has no correlation with reality, is at the heart of "conservatism." It shows no sign of going away. The fatal allure of insisting that right-wing conservatism is really the true democratic liberalism, the other having strayed, is an irresistible anglerfish lure. (The Rev. Dabney will set you straight.)

Therefore, the Amerikaners are unlikely to organize and act effectively until their electoral position has declined to the point at which a democratic restoration is not only nontrivial, but in fact impossible. At this point, USG [the US government] will have imported tens if not hundreds of millions of new Third World residents. It will be obvious that military government is the only route to any kind of American restoration. The inevitable alternative is a North America indistinguishable from the rest of the Third World.

Have you been to the Third World? The armed forces will have to act. Let's hope they can all get it together to be on the same side.

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Coastal privilege

Before going on to discuss what she calls coastal privilege. Megan McArdle cites a recent New York Times opinion piece by Paul Krugman:
What struck me as I watched the convention speeches, however, is how much of the anger on the right is based not on the claim that Democrats have done bad things, but on the perception — generally based on no evidence whatsoever — that Democrats look down their noses at regular people.
Her response:
I'm surprised — though I shouldn't be, of course — that any number of liberals who are (presumably) comfortable with concepts like unconscious discrimination and privilege when it comes to race, have not even stopped to consider that the same sort of thing might be operating here.

Let's be honest, coastal folks: when you meet someone with a thick southern accent who likes NASCAR and attends a bible church, do you think, "hey, maybe this is a cool person"? And when you encounter someone who went to Eastern Iowa State, do you accord them the same respect you give your friends from Williams? It's okay — there's no one here but us chickens. You don't.

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The Currency Sign

I just stumbled across an odd bit of trivia. That little symbol Microsoft Word uses to mark the end of a table cell — the circle with four little spokes coming off it, ¤ — is the generic currency sign — like $, ₤, €, or ¥, but for no specific currency:
The symbol was invented in 1972 as a replacement for the dollar sign in national variants (ISO 646) of ASCII, and, originally, also the International Reference Variant. It was proposed by Italy to allow an alternative to encoding the dollar sign.
[...]
Thus, even when it is appropriately used, it has an inherent ambiguous meaning: ¤12.50 can be interpreted as 12.5 units of some currency, but the currency itself is unknown, and can only be determined by information outside the use of the character in itself.

More likely, this sign was intended to mark the position of the national currency symbol into the national variants of ASCII (7-bit, 95 printable characters available), where a specific national body were reluctant to accept the dollar sign $ as a kind of "universal sign" to denote "currency" or "money". The currency sign ¤ should be replaced then by the appropriate glyph, depending on audience: ƒ, ₤, ₧, ¥, etc. But somehow, the neutral currency sign ¤ came to be used as a printable symbol in itself, and this usage were sufficient extended in the years of the first drafts of ISO 8859 to include it.

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EPO improves memory

The popular blood-boosting, performance-enhancing drug erythropoeitin, or EPO, improves memory:
The researchers injected mice with EPO every other day for three weeks to test the long-term impact of the drug. Mice given EPO had better memory in some situations than the animals given a placebo.

The better memory lasted up to three weeks from the last dose but disappeared after about a month. Mice given one dose a week had no benefit.

The specific improvements were associated with the hippocampus, the part of the brain involved in learning and memory, among other things, the researchers said.

"Young mice systematically treated with EPO for three weeks have improved memory, similar to the dramatic improvements observed in endurance and muscular performance athletes who use EPO to boost performance," Ehrenreich said in a statement.

EPO treatment seemed to increase the transmission of certain nerve impulses in the brain, resulting in greater short-term and long-term memory. The improvements in memory were not linked to boosted blood production.

The findings may help lead to potential drug targets that could treat neurodegenerative diseases like multiple sclerosis and schizophrenia, the researchers said.

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China's Outsourcing Appeal Dimming

China's outsourcing appeal is dimming, for multiple reasons:
With fuel prices at record highs, the cost of sending a standard 40-foot container of goods has gone from $3,000 in 2000 to about $8,000 today, squeezing profit. [...] Soaring energy costs, the falling dollar and inflation are cutting into what U.S. manufacturers call the "China price" — the 40 to 50 percent cost advantage once offered by Chinese producers. [...] The model of outsourcing to China emerged at a time when oil was going for $20 a barrel. In the past few months, oil has been trading at about $110, and many experts say it will eventually hit $200.
This bodes well for certain American manufacturers:
Midwestern steelmakers are doing booming business as steel exports from China to the United States slowed down by 38 percent in the first seven months of the year while U.S. steel production rose 10 percent. Manufacturers of furniture, electronic appliances and textiles are also among those shifting production back.

The most prominent company in the group might be Thomasville Furniture, which was criticized a few years ago for sending several thousand American jobs overseas. It announced in June that it was returning production of an entire line of upholstered and wood furniture to the United States. The company says it will add 100 jobs in North Carolina.
(Hat tip to Al Fin.)

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Tuesday, September 09, 2008

The 65 mpg Ford the U.S. Can't Have

David Kiley of BusinessWeek calls the 2009 Fiesta ECOnetic The 65 mpg Ford the U.S. Can't Have:
Ford's 2009 Fiesta ECOnetic goes on sale in November. But here's the catch: Despite the car's potential to transform Ford's image and help it compete with Toyota Motor and Honda Motor in its home market, the company will sell the little fuel sipper only in Europe. "We know it's an awesome vehicle," says Ford America President Mark Fields. "But there are business reasons why we can't sell it in the U.S." The main one: The Fiesta ECOnetic runs on diesel.
[...]
Taxes aimed at commercial trucks mean diesel costs anywhere from 40 cents to $1 more per gallon than gasoline.
Oh, and it's too pricey to import:
First of all, the engines are built in Britain, so labor costs are high. Plus the pound remains stronger than the greenback. At prevailing exchange rates, the Fiesta ECOnetic would sell for about $25,700 in the U.S. By contrast, the Prius typically goes for about $24,000.

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EF vs. IQ

Al Fin looks at EF vs. IQ — where EF stands for executive function, which has two facets:
  1. metacognition – problem solving, planning, concept formation, strategy development and implementation, controlling attention, working memory; handled in the dorsolateral prefrontal areas
  2. motivation – fulfilling biological needs according to some existing conditions; associated with the orbitofrontal and medial frontal areas
Executive function is highly heritable, but special curricula to train EF have been developed:
The EF curriculum has many strands, but here are a few just to give a flavor. Instead of keeping the classroom quiet, kids are actually taught and encouraged to talk to themselves, privately but aloud, as a way of helping them exert mental control. In one exercise, for example, the kids have to match their movements to symbols. When the teacher holds up a circle they clap, with a triangle they hop, and so forth. The kids are taught to talk themselves through the mental exercise: "OK, now clap." "Twirl now." This has been shown to flex and enhance the brain's ability to switch gears, to suppress one piece of information and sub in a new one. It takes discipline; it's the elementary school equivalent of saying "I really need stop thinking about next week's vacation and focus on this report."

Here's another example from the classroom. Children tell stories to one another, but kids being kids, they all want to be the storyteller; none wants to just sit and listen. But the reality is that only one can tell a story at a time, so the designated listeners hold a picture of an ear, a prop to remind them that they are waiting their turn to talk. This helps them learn to control their natural instinct to talk out of turn. Eventually the props and private chatter are not needed, but in the beginning they help cognitively immature children stretch their executive muscles.

Dramatic role playing is a cornerstone of the EF philosophy. The preschoolers, all four and five years old, actually design the play's action by themselves. For example: "Let's pretend you're the mommy and I'm the baby. I'll get sick, and you'll need to take me to the doctor." Then they act it out, solving problems along the way. The idea is that play of this kind promotes the internalization of rules and expectations and demands mental discipline to stay in character — all cognitive challenges. Importantly, these exercises are not tacked on as a separate teaching, but rather are integrated into every activity of the child's day, from reading to math.

This is a vast oversimplification of a curriculum that has taken years to develop and is grounded in rigorous scientific studies of children's brain development. One concern of EF proponents is that dramatic play and clapping games will seem frivolous, a distraction from drilling kids in fractions and irregular verbs. But Diamond's results say otherwise. As she reported at the recent convention of the Association for Psychological Science in Chicago, kids in both traditional and experimental classrooms were given a battery of EF tests following two years of preschool. The tests were very difficult cognitive challenges that require kids to inhibit their automatic responses. The EF-trained children outperformed the traditionally educated kids on every single test. In fact, the differences were so dramatic after one year that some school officials opted out of the experiment to give all the kids the benefit of EF training.

But there's more. Psychologist Clancy Blair of Pennsylvania State University has shown that preschoolers with sharper executive capability also outperform their more traditional peers in basic skills, especially mathematics, when they hit kindergarten. In other words, as counterintuitive as it seems, early exposure to dramatic play and cognitive games better prepares kids for mastery of traditional academics.
Apparently EF and IQ are two great tastes that taste great together:
In this study 141 healthy children between the ages of three and five years took a battery of psychological tests that measured their IQs and executive functioning. Researchers found that a child whose IQ and executive functioning were both above average was three times more likely to succeed in math than a kid who simply had a high IQ.
Some tests of executive function, like the "backward digit span" test, can be used as training tools for preschool students:
Person A recites a string of numbers, like 3, 6, 10, and person B has to respond with the same string, only in reverse order: 10, 6, 3. This task requires one to restrain his or her automatic inclination to mimic person A (inhibitory control), but also requires keeping the actual numbers in mind (working memory).
Some training tools are more sophisticated:
Inspired by skills training of monkeys, Michael Posner and Mary Rothbart at the University of Oregon have developed a five-day computer-based attention-training program for young children. After the training, six-year-olds show a pattern of activity in the anterior cingulate — a banana-shaped brain region that is ground zero for executive attention — similar to that of adults, along with a slight IQ boost and a marked gain in executive attention.

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Figure friendly

Z Corp's 3D-printing technology is figure friendly:
Z Corp. was founded in 1994 to commercialize a technology developed at MIT, which uses standard ink-jet printer heads — the kind you'd find in any home printer — to spray a glue or binder and colored pigment over a thin layer of a powdery substance. Do that over and over again, layer after layer, and the particles of powder (it can be a plaster or corn starch-based compound) essentially become a physical "pixel." After a few hours, you vacuum away the loose powder that hasn't been sprayed with glue, and what remains is a 3-D printed object.

Though others had marketed similar machines before, Z Corp. made a splash with its speed, its low cost, and its ability to print objects in color. The midrange printer Z Corp. will use to make the Rock Band figurines sells for about $40,000.

In 2005, the start-up was acquired by Contex Scanning Technology, a Danish company, for an undisclosed sum, though I'm told by a former Z Corp. executive that it was "more than twice" the company's $40 million in revenue at the time. In turn, Contex was sold to a private equity firm in Sweden last year, for about $240 million.
In case you didn't catch that, Z Corp's novel business model is to sell custom figures of computer-gaming avatars:
Starting with the release of the game Rock Band 2 this month, players will have the option of purchasing a collectible plaster figurine of the character they create - whether it's a lead guitarist with a Mohawk or a screeching lead singer sporting a skimpy bikini top. (The game is produced by Cambridge-based Harmonix Music Systems, a division of Viacom Inc.) The $75 figures will be produced at Z Corp.'s Burlington headquarters and shipped to players about a week after an order is placed through the Rock Band website.

"3-D printing should migrate anywhere people are using 3-D data," Kawola says, envisioning the new venture as something that could generate "$20 million, $30 million, $50 million in revenue" for the company.
Watch the video to get a feel for the technology in action.

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Sarah Palin: the proletarian candidate

Mencius Moldbug has refined his previous five-caste definition of the American social spectrum down to three castes — Eloi, Morlocks, and Proles — and has declared Sarah Palin the proletarian candidate:
You see, the so-called "Democrats" (whom, here at UR, we call the Inner Party) and their purported opposition, the supposed "Republicans" (or Outer Party) have completely different beliefs about the nature, purpose, and function of the office known as the "Presidency," for which they appear to contend. As usual, the IP is right and the OP is wrong.

To the IP (obviously, also the Eloi-Morlock Party), the so-called "President," ie, the player whom callers help select in USG's quadrennial reality show, is hardly a temporal position at all. It is really more of a spiritual office. The Roman pontifex maximus is a fine analogy. I also admire the phrase "bully pulpit," which I feel could be used a good bit more.

For the IP, for example, the ideal "President" would be Nelson Mandela. But there are obstacles — St. Mandela, for instance, is not an American citizen. At least not in the strict technical sense of the law. Fortunately, our evolving standards of justice may at some point in the future, when we are more spiritually advanced, enable us to overcome this barbarous discrimination. When Archbishop Obama says that "the walls between the countries with the most and the countries with the least cannot stand," perhaps he actually means it. Who knows, with such a great man? Certainly a good first step would be for a Federal court to realize that Mexicans are actually, in fact, Americans. (It's not like they were born in Europe, Asia, Africa, Australia or Antarctica.)

But obviously the most sacrilegious possible desecration is one in which an actual, practicing Prole is appointed, by some awful cosmic mistake, to the hallowed post of "President." It's basically like having a porn star elected Pope. Even as candidate vice-Pope, it's way too far. The purpose of the White House is to teach the Proles that it's wrong to be a Prole, and they need to stop. Now. I mean, duh. Ideally, the LORD would let America know at once of her mistake, and send Hurricane Gustav straight up the Mississippi to demolish the polyester-Americans and their so-called "convention." (Which, frankly, could be mistaken for a multi-level marketing conference. At least if all you look at is the hair.)

Meanwhile, the OP (or Prole Party) has a completely different view of the "White House." To the PP, the "President" is the CEO of America.

This illusion can only be sustained by people who either (a) have no idea what Washington is or how it works, or (b) do, but conceal it for their own political benefit. Collectively these individuals are known as "conservatives," and they make up the right side of your radio dial.

(The radio cannot be adjusted beyond this built-in band. But it can be turned off. Please do not vote for, contribute to, or otherwise support the Outer Party. Outer Party politics is not effective against the Inner Party. Please forward this message to all your Avon subscribers.)

The truth is that the White House changes its entire nature as an organ of government when it changes between Inner and Outer Party control. An Inner Party presidency is simply a different institution from an Outer Party presidency. They are apples and oranges.

When the Inner Party is in, the Presidency is a vestigial organ. It would be a fun experiment to actually abolish the White House for four years. The results would be more or less the same. Every agency in Washington would function not only just as well without the existence of the President, but in fact much better.

For example, my mother was at DOE in the Clinton era. In the renewables area — she did a good bit of work for Joe Romm. Once I asked her what Sched Cs (political appointees) did under Clinton, and she said: "they got a nice office, and they were told to work on whatever they liked." Indeed the main difference between Inner Party candidates is (a) whether or not they can win, and (b) the set of people among whom they will distribute the Plum Book.

A ceremonial presidency is perfectly consistent with Inner Party values, which stress that "politics" is bad and "public policy" is good, and the two should be stored separately — for more or less the same reason that sewage and wine are not shipped in the same tanker truck. As so often, the IP is exactly right about this. Except for the fact that the word "democracy" occupies the highest possible position on the mental totem pole of the Inner Party mind. If I could explain this, I might still be a believer.

(Moreover, the contradiction itself is a nice bit of misdirection. It points the marks away from inquiring into the nature, ingredients, and origins of the sausage called "policy." But I digress.)

When an Outer Party man becomes "President," he soon finds that all his efforts are devoted to solving the essentially unsolvable problem of preventing his name from becoming a historic byword for pure, infamous villainy. Maybe not quite like Hitler or Attila the Hun. But certainly like Mussolini, Richard II, Nixon or Ivan the Terrible.

The basic problem of the Outer Party in the White House is that, with minor exceptions such as the Pentagon, its mission is essentially one of preventing the rest of Washington from doing its job. Or at least what it thinks its job is. The military, of course, is an Outer Party shop, and can always be sent on bloody, expensive and counterproductive ticket-punching adventures. The rest of our permanent government, the civil service proper, is Inner Party to the bone. In fact, perhaps the best way to describe the Inner Party is as the party of the permanent civil service.

Which holds far more power than the White House. The While House can prevail or even contend only in the vast minority of conflicts with the permanent civil service. It is not good for the polls. When an Outer Party presidency's approval sinks below 40% or so, it is defeated, and the agencies he supposedly "leads" ignore the "President" and all his handlers, cronies and contributors. Since polls are a function of public opinion, public opinion is fabricated by the press, schools and universities, and the latter are perma-pwned by the Inner Party, the resulting barbecue is too inevitable to be really entertaining. It's best just to play along.

Example: for most of 2008, GWB might as well have been the prime minister of Namibia for all the influence he's exerted over US foreign policy. Cheney probably wishes he was the prime minister of Namibia.

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How Videogames Blind Us With Science

In How Videogames Blind Us With Science, Clive Thompson argues that the same kids who sleep through their science classes enthusiastically use the scientific method to succeed in gaming:
A few years ago, Constance Steinkuehler — a game academic at the University of Wisconsin — was spending 12 hours a day playing Lineage, the online world game. She was, as she puts it, a "siege princess," running 150-person raids on hellishly difficult bosses. Most of her guild members were teenage boys.

But they were pretty good at figuring out how to defeat the bosses. One day she found out why. A group of them were building Excel spreadsheets into which they'd dump all the information they'd gathered about how each boss behaved: What potions affected it, what attacks it would use, with what damage, and when. Then they'd develop a mathematical model to explain how the boss worked — and to predict how to beat it.

Often, the first model wouldn't work very well, so the group would argue about how to strengthen it. Some would offer up new data they'd collected, and suggest tweaks to the model. "They'd be sitting around arguing about what model was the best, which was most predictive," Steinkuehler recalls.

That's when it hit her: The kids were practicing science.

They were using the scientific method. They'd think of a hypothesis — This boss is really susceptible to fire spells — and then collect evidence to see if the hypothesis was correct. If it wasn't, they'd improve it until it accounted for the observed data.

This led Steinkuehler to a fascinating and provocative conclusion: Videogames are becoming the new hotbed of scientific thinking for kids today.

This makes sense if you think about it for a second. After all, what is science? It's a technique for uncovering the hidden rules that govern the world. And videogames are simulated worlds that kids are constantly trying to master. Lineage and World of Warcraft aren't "real" world, of course, but they are consistent — the behavior of the environment and the creatures in it are governed by hidden and generally unchanging rules, encoded by the game designers. In the process of learning a game, gamers try to deduce those rules.

This leads them, without them even realizing it, to the scientific method.

This is what Steinkuehler reports in a research paper — "Scientific Habits of Mind in Virtual Worlds" (.pdf) — that she will publish in this spring's Journal of Science Education and Technology. She and her co-author, Sean Duncan, downloaded the content of 1,984 posts in 85 threads in a discussion board for players of World of Warcraft.

What did they find? Only a minority of the postings were "banter" or idle chat. In contrast, a majority — 86 percent — were aimed specifically at analyzing the hidden ruleset of games.

More than half the gamers used "systems-based reasoning" — analyzing the game as a complex, dynamic system. And one-tenth actually constructed specific models to explain the behavior of a monster or situation; they would often use their model to generate predictions. Meanwhile, one-quarter of the commentors would build on someone else's previous argument, and another quarter would issue rebuttals of previous arguments and models.

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Exercise trumps obesity gene in study

Three to four hours of exercise trump the FTO obesity gene, according to a recent study of Amish men:
Researchers focused their study on a group of 704 Old Order Amish men and women in Lancaster County, Pennsylvania, a religious group whose members often do not drive cars or have electricity in their homes.

Snitker said the group offered a unique mix of activity levels, with some farmers in the community still using horse-drawn plows while others holding more conventional jobs, including factory work.

He and colleague Evadnie Rampersaud of the University of Miami were looking to see if physical activity in this group might offset the effects of the fat mass and obesity associated with the FTO gene, found in more than half of all people of European descent.

People with two copies of the FTO gene on average weigh nearly 7 pounds (3 kg) more and are about 70 percent more likely to be obese than those who do not have the gene.

The volunteers wore a device called an accelerometer to track motion for a week.

The researchers compared body mass index or BMI, a measure of weight to height, and found those who were less active and had the FTO gene variant were significantly more likely to be overweight or obese.

But among the most physically active, the FTO gene made no difference.

Snitker said the study gives some perspective on how the obesity epidemic has evolved, as modern conveniences have reduced the need and opportunity for physical activity.

People in the most physically active group expended about 900 more calories per day than the low-activity group. That would equal three to four hours of moderately intense physical activity such as brisk walking, house cleaning or gardening.

"We probably carry genes that 150 years ago were not risk factors for obesity, but because of changes in our environment, they become liabilities," he said.

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The Culture of Prosperity

Wolfgang Kasper examines The Culture of Prosperity while reviewing Gregory Clark's A Farewell to Alms, comparing Clark's lists of pre- and post-industrial vices and virtues to Jane Jacobs' lists of cultural attributes for the guardian moral syndrome and the commercial moral syndrome (from her Systems of Survival):
To my mind, Jacobs’ list fully circumscribes the decisive cultural qualities that Clark keeps mentioning in his book. Anyone who has spent only a few days working in different cultures will realise how influential and pervasive these differing attitudes are. During three days’ work, say, in Shanghai, you will have had several discussions about moral principles and been asked numerous times for advice. During three days in Nairobi or Lima, you will have been informed repeatedly by the privileged that they expect donors to provide aid and that the condition of the country is the consequence of colonialism; you can also expect to come across some dishonest double-dealing. And everywhere you will probably observe some hair-raising maltreatment of machinery.
Table 1: Moral syndromes: guardian and commercial



(Hat tip to Arnold Kling.)

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Former UFC champ Tanner dead at 37

Former UFC champ Tanner dead at 37:
Former Ultimate Fighting Championship middleweight champion Evan Tanner was found dead near Palo Verde, Calif. on Monday. He was 37.

Tanner had trekked into the desert on a journey to “cleanse” himself, according to Douglas Vincitorio of Tanner’s management team. “He went out to the desert to do a ‘cleansing’ as he called it. Kind of like ‘Survivorman.’” These short trips were not new to Tanner, said Vincitorio. It is something that he has done numerous times over the years.

“What we were told is that (Sheriff’s officials who found Tanner) believe his motorcycle had run out of gas, so he went to walk out in like 115- to 118-degree heat,” Vincitorio said. “He was miles away from his camp. That’s where the helicopter found him. Right now, they just think that he succumbed to the heat.”

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Monday, September 08, 2008

How many vowels does English have?

If you're like most English-speakers, you're an English-reader, and you think that English has five, sometimes six, vowels — a, e, i, o, u, and sometimes y — because the English alphabet has five, sometimes six, vowels.

But if you look at how dictionaries "respell" English words for pronunciation, you quickly realize that English — even if we look only at a single dialect, like General American English — has many, many vowels — including not just monophthongs, or pure vowels, but diphthongs and triphthongs composed of multiple vowel sounds.

International Phonetic Alphabet Examples
æ pat, lad, cat, ran
pay, day
ɛər care, hair, there
ɑ father, palm
ɑr arm
ɛ let, head
bee, see
ɪ pit, city
pie, by, my
ɪər pier, near, here
ɒ pot, not, wasp
toe, no
ɔː caught, paw, war
ɔɪ noise, boy
ʊ took, put
ʊər tour
boot, soon, through
out, now
ʌ cut, run, enough
ɝː urge, term, firm, word, heard, bird
ə about, item, edible, gallop, circus
ɚ butter, winner
juː pupil
ø, œ feu, oeuf (French), schön, zwölf (German)
y tu (French), über (German)
ɔ̃ bon (French)


Looking at all those crazy IPA spellings is enough to make you feel like a ghoti out of water.

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Have Knife, Will Travel

In Have Knife, Will Travel, Lauren Etter describes how the demand for locally-grown food has created an opportunity for a slaughterhouse on wheels:
Federal rules and consolidation of the nation's meatpacking industry have made it increasingly costly and cumbersome for small farmers to bring their animals to slaughter. According to the rules, animals intended to be sold as meat must be killed at a slaughterhouse with a federal inspector present. (Some states allow state inspectors to do the job.)

But the number of plants under federal inspection has dwindled to 808 nationwide, down from 1,750 three decades ago. Today, many farmers and ranchers must travel hundreds of miles or out-of-state for a legal slaughterhouse. Wyoming, for example, has no plants under federal inspection. It has 27 with state inspectors, but under federal law, the meat can't be shipped across state lines.

On this island [Lopez Island] off the coast of Washington, a group of about 15 farmers decided that, rather than haul animals to a slaughterhouse in Sumner, Wash., they'd bring a slaughterhouse to their animals.
Some details:
Up rolls a diesel truck pulling an 8-by-12-foot trailer fitted with a sink, a 300-gallon water tank and a cooling locker with carcass hooks. A butcher in a floor-length apron kills, skins, guts and trims the pigs into slabs of meat that are then hung in the cooler and trundled to a packaging plant. Soon the meat is stocked in the freezers of shops on the island and across Washington state and Oregon.
Some hard figures:
To pay for butchers and other expenses, the cooperative charges a fee for each animal killed: $105 for a cow, $53 for a pig, $37 for a sheep.


My favorite line from the video:
The rule is: When they're no longer cute, they're ready to eat.

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What do Lego and 18th century political economist Adam Smith have in common?

What do Lego and 18th century political economist Adam Smith have in common?
Both show why Denmark has become the best country in the world for business.

Speaking two decades before The Wealth of Nations was published in 1776, Smith said, "Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things."

If ever there was a system that made following Smith's recipe look easy, it's the Danish economy's mix of low inflation and low unemployment, emphasis on entrepreneurship and lower taxes. These qualities combined with high marks for innovation and technological savvy lift Denmark to the top of our third annual ranking of the Best Countries for Business (formerly the Forbes Capital Hospitality Index).

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Roald Dahl’s wartime sex raids

Drawing on previously unpublished letters, Jennet Conant has written a comprehensive account of children's author Roald Dahl’s raucous wartime exploits:
His conquests included Millicent Rogers, the glamorous heiress to a Standard Oil fortune; and Clare Boothe Luce, a right-wing congresswoman and the sexually frisky wife of the publisher of Time magazine.

Dahl would later complain to friends that Boothe Luce, 13 years his senior, had left him “all f***** out” after three nights of bedroom capers.

“Dahl’s superiors watched his rake’s progress with grudging admiration,” Conant writes in The Irregulars, to be published in Britain on September 9. “A certain amount of hanky-panky was condoned, especially when it was for a good cause.”

Injured during training as an RAF pilot, Dahl fought in the Middle East before he was declared unfit to fly and was shipped to the Washington embassy in 1942. He immediately cut a swathe as a 6ft 6in battle-scarred pilot who was nonetheless horrified to find himself “in the middle of a cocktail mob in America”.

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Sunday, September 07, 2008

Making Canned Halloween Monstrosities

Making Canned Halloween Monstrosities looks like good, clean fun. The label reads:
Unknown Specimen
Recovered from chest cavity of decayed animated corpse. Animation of corpse ceased upon removal. Specimen began to dissolve within moments of removal from host. Dissolution ceased with formaldehyde and acetone.
Haiti, 1894
The specimen is in fact an expands-in-water snake in a bottle from the dollar store:
  • The snake was cut up a little before being put into the jar to make it look somewhat decayed when it expanded.
  • A few grains of instant coffee were added to the water to give it a murky brown look.
  • A small spoonful of used coffee grounds was added to the water to enhance the "decayed" sort of look.

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"Genography" Puts European Ancestry on the Map

"Genography" Puts European Ancestry on the Map:
[Population geneticist John Novembre of the University of California, Los Angeles] and colleagues compared 500,000 SNP [single nucleotide polymorphism] differences among 1387 Europeans. To ensure that the people they examined had their roots firmly set in a certain region, the team looked at individuals whose grandparents hailed from the same region as they did. The scientists then employed a statistical technique known as principle component analysis, which allows large amounts of data with multiple variables to be condensed onto a two-dimensional space. Individual points were marked as two-letter abbreviations corresponding to the region of Europe to which each subject claimed ancestry (see image).

The result was a map of Europe — fuzzy, but unmistakable.


(Hat tip to Alex Tabarrok.)

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Saturday, September 06, 2008

The paradox of dry water and powdered methane

Philip Ball explains the paradox of dry water and powdered methane:
Methane gas hydrate forms naturally when water is mixed with methane at high pressure and low temperature. Huge deposits of the crystalline substance exist in the deep sea, where they could provide vast fuel reserves. But rising global temperatures increase the chances of the hydrate decomposing, releasing the greenhouse gas and accelerating further warming. This mechanism has been proposed as a cause of dramatic environmental change in the distant past.

Using methane gas hydrate as a kind of solid methane for storage and transport has been mooted before. The Japanese company Mitsui Engineering and Shipbuilding has a pilot project for producing natural-gas hydrates on board ships that would then transport the gas from remote marine deposits — and using some of the stored gas to power the ships themselves.

The problem is that the hydrate forms only under cold, pressurized conditions, and then very slowly. Typically, a skin of the material forms at the surface of water and prevents further growth. The formation rate can be speeded up by vigorously mixing the gas with water, but that is costly and cumbersome.

Cooper and his colleagues have got round this problem by finding a way to break the water up into many tiny, stable droplets, massively increasing the surface area in contact with gas. They do this by converting water to dry water by stirring it up with a special form of silica, called hydrophobic fumed silica.

This consists of tiny grains of silica — the same basic material as sand — coated with a chemical layer that makes them water-repellent. The silica particles cover the surface of water droplets and stop them from coalescing.

"If you've ever seen water drops in dry dust, it's the same thing", says Cooper. "They form a ball with the dust on the surface." The resulting dry water is a very odd substance. "It looks like a powder", says Cooper, "but if you wipe it on your skin, it smears and feels cold" as the water is released.

The researchers found that their powder soaks up large quantities of methane at water's normal freezing point, producing crystalline methane gas hydrate within the silica-coated drops. A litre of methane gas can be stored in about 6 grammes of the material. This storage capacity, they say, is very close to the target set by the US Department of Energy for such materials, and compares well with that of other candidate storage media.

And crucially, it is made from cheap raw materials, helping to make this method economical relative to other, more exotic potential methane-capture materials such as designed molecular frameworks.

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Friday, September 05, 2008

Robert Recorde invents the equals sign



Mark Dominus shares an excerpt from Robert Recorde's The Whetstone of Witte, which includes the world's first use, in 1557, of the equals sign:
Howbeit, for easie alteration of equations. I will propounde a fewe exanples, bicause the extraction of their rootes, maie the more aptly bee wroughte. And to avoide the tediouse repetition of these woordes : is equalle to : I will sette as I doe often in woorke use, a pair of paralleles, or Gemowe lines of one lengthe, thus: =====, bicause noe .2. thynges, can be moare equalle.
He recommends reading it aloud:
The only tricky things are the spelling and the word "Gemowe". Reading aloud will solve the spelling problem. "Gemowe" means "twin", like in the astrological sign of Gemini.
He notes that he learned something surprising by going back to the original document:
I knew that the German "umlaut" symbol was originally a small letter "e". A word like schön ("beautiful") was originally spelled schoen, and then was written as schon with a tiny "e" over the "o", and eventually the tiny "e" dwindled away to nothing but two dots. I have a German book printed around 1800 in which the little "e"s are quite distinct.

And I had recently learned that the twiddle in the Spanish ñ character was similarly a letter "n". A word like "año" was originally "anno" (as it is in Latin) and the second "n" was later abbreviated to a diacritic over the first "n". (This makes a nice counterpoint to the fact that the mathematical logical negation symbol ~ was selected because of its resemblance to the letter "N".) But I had no idea that anything of the sort was ever done in English.

Recorde's book shows clearly that it was, at least for a time. The short passage illustrated above contains two examples. One is the word "examples" itself, which is written "exãples", with a tilde over the "a". The other is "alteration", which is written "alteratiõ", with a tilde over the "o". More examples abound: "cõpendiousnesse", "nõbers", "denominatiõ", and, I think, "reme~ber". (The print is unclear.)

I had never seen this done before in English.

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The meek shall inherit the web

According to The Economist, the meek shall inherit the web:
The simple answer is that the number of mobile phones that can access the internet is growing at a phenomenal rate, especially in the developing world. In China, for example, over 73m people, or 29% of all internet users in the country, use mobile phones to get online. And the number of people doing so grew by 45% in the six months to June — far higher than the rate of access growth using laptops, according to the China Internet Network Information Centre.

This year China overtook America as the country with the largest number of internet users — currently over 250m. And China also has some 600m mobile-phone subscribers, more than any other country, so the potential for the mobile internet is enormous. Companies that stake their reputations on being at the technological forefront understand this. Last year Lee Kai-fu, Google’s president in China, announced that Google was redesigning its products for a market where “most Chinese users who touch the mobile internet will have no PC at all.”
This, of course, implies a very different usage model:
A couple of years ago, a favourite example of mobile phones’ impact in the developing world was that of an Indian fisherman calling different ports from his boat to get a better price for his catch. But mobile phones are increasingly being used to access more elaborate data services.

A case in point is M-PESA, a mobile-payment service introduced by Safaricom Kenya, a mobile operator, in 2007. It allows subscribers to deposit and withdraw money via Safaricom’s airtime-sales agents, and send funds to each other by text message. The service is now used by around a quarter of Safaricom’s 10m customers. Casual workers can be paid quickly by phone; taxi drivers can accept payment without having to carry cash around; money can be sent to friends and family in emergencies. Safaricom’s parent company, Vodafone, has launched M-PESA in Tanzania and Afghanistan, and plans to introduce it in India.

Similar services have also proved popular in South Africa and the Philippines. Mobile banking is now being introduced into the Maldives, a group of islands in the Indian Ocean where many people lost their life savings, held in cash, in the tsunami of December 2004.

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Science Proves Exotic Cars Turn Women On

Science Proves Exotic Cars Turn Women On, Keith Barry reports:
The study was commissioned by the ultra-exclusive British insurer Hiscox (we swear we're not making this up), which was curious to know how people respond to high-end luxury cars. "We knew owners of luxury cars felt a connection with the sound of their vehicles," says Steve Langan, managing director of the insurance company. "We have now scientifically proven the physical attraction people feel when it comes to cars."

To test the theory that high-performance cars get people hot, Moxon had 40 men and women listen to recordings of the three Italian exotics and a Volkswagen Polo. Everyone had significantly more testosterone after hearing the exotics, and all of the women were turned on by the Maserati. The guys, on the other hand, were drawn to the Lamborghini.

“We saw significant peaks in the amount of testosterone in the body, particularly in women," Maxon says, noting that even women who said they had no interest in cars were turned on. "Testosterone is indicative of positive arousal in the human body so we can confidently conclude from the results out today that the roar of a luxury car engine actually does cause a primeval physiological response.”

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Look on my shirts, ye mighty, and despair!

Jeremy Kalgreen says, Look on my shirts, ye mighty, and despair!

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Shoe Circus Commercial

Who is the ad wizard who came up with this Shoe Circus Commercial?

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Founder Stories

I don't know who Trevor Blackwell is — evidently he created something called Anybots — but I love his take on Founder Stories:
Early on, when a reporter asked me how I came up with the idea for Anybots, I answered honestly that I made a list of all the ideas I thought might really change the world in the next 20 years, and picked the one I thought I could contribute most to. His eyes glazed over. It's unprintable. What reporters want is a classic "founder story," a highly developed art form that isn't taught in English Literature classes. The archetypal founder story goes like this:
I was doing something romantically appealing to my target market. As I reached the peak of achievement, I had an inspiration: make a product people will like.
In generic form it sounds completely fatuous, but consider the following real example of the genre meant to wash right over an uncritical reader:
A former bakery owner and professional bicyclist, he was choking down PowerBars for energy in the middle of a daylong 175-mile ride. "I couldn't make the last one go down, and that's when I had an epiphany -- make a product that actually tasted good."
— Gary Erickson, founder and CEO of Clif Bar. Quoted in Fortune Small Business, October 2003.
This is a very carefully crafted story. It has the simplicity, economy, and punch of a Reader's Digest anecdote. Some talented marketers probably spent hundreds of hours polishing it. Each of the 45 words it contains pulls its weight. Notice in it the three key elements of a founding story:
  • A quest which is romantically appealing to the target market,
  • An epiphany,
  • A trivial and obvious idea claimed as original.
The quest is necessary to set the stage for an epiphany. You can't just say, "I was sitting around the house in my underwear trying to think of a business to start, and decided to make a food product that tastes good." The particular quest here is carefully chosen to appeal to the company's target market. It would be ineffective to say, "I had been slaving away on my food science dissertation for months. I had finally finished the last edit, when I had an epiphany..." It needs to be the same sort of activity that the target market dreams of doing.

After setting the stage, the story delivers the punch line. The trivial, obvious idea presented as novel, original, and ingenious. Make food that tastes good. If the idea was an epiphany for him, I'm just glad I never ate at his bakery. But the more trivial and obvious the idea is, the better the story sounds. Ideas like "make food that tastes good," or "write software that's powerful yet easy to use," or "design clothes that make people look their best," are powerful positive messages. And the implicit negative message about the competition stays in the reader's mind too.

Presumably, Erickson has done clever things to make his product successful. The true big idea is something along the lines of, "make energy bars out of rice, soy and oats with cane juice flavoring instead of refined sugar, put pictures of athletes on them and sell them in sporting goods shops instead of supermarkets." That was a winning combination and he deserves wealth for having made it work. But it sure doesn't read well.

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Thursday, September 04, 2008

Munich's Master Poster Artist

Donald Pittenger calls Ludwig Hohlwein Munich's Master Poster Artist:









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iRetroPhone makes $30,000 from one day's work

Gavi Narra, CEO of startup ObjectGraph LLC, revealed that they made $30,000 from one day's work, creating an app to let iPhone users dial on a virtual rotary phone.

They got mentioned in the New York Times and sold 15,000 copies at $2.99. iRetroPhone is now listed at 99 cents.

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Israeli Super-Suit Lets Disabled Walk

Israeli Super-Suit Lets Disabled Walk:
Super-strength suits aren't just for soldiers or comic book heroes. Doctors and researchers from around the world see exoskeletons as a way to help the elderly and the disabled regain lost abilities.

In Israel, engineer Amit Goffer has designed an exoskeleton that lets paralyzed people walk and climb stairs, with crutches. It's clearly not as sophisticated as some of the super-suits being developed for military purposes. But the ReWalk system — now in clinical trials in Tel Aviv's Sheba Medical Center — does offer a chance for a much more normal life.

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Science!

Proclaim your support for Science! with these t-shirts by Jeremy Kalgreen:



(Hat tip to Mike.)

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Battleground 2000

In his Danger Room column for Wired, Noah Shachtman shares Usborne Publishing's 1979 illustrated trip to the far-off world of the year 2000 — and beyond!, complete with orbital factories, floating pyramid cities, and laser-powered replicators. His professional interests tend towards the military though:
Some of the predictions aren't too far off; take off the laser cannon and the mini-wings in front, and the fighter plane, designed for "dogfighting in the 1990's," is reminiscent of today's F-22. It's even got "robot missiles" that "home in on the target by themselves."

Other prognostications didn't pan out, alas. "Armed hovercars" haven't replaced Humvees. 100-kph hydrofoil patrol boats" didn't make it to "most, if not all, world navies" by "the 1990's." And troops aren't climbing into "giant rocket transport[s]" to "quell an uprising in a state halfway around the world." They're still stuck with old-fashioned jets to do the job. Sigh.

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Ex-boxing champ shot dead in smoking dispute

Nigerian-born former British heavyweight boxing champion James Oyebola was shot in the neck in a nightclub after asking a group of men to stop smoking.

Being 6'9" and skilled is no match for being armed and ruthless.

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Wednesday, September 03, 2008

Nifty New Risk Calculations of What's Likely to Kill You

Ronald Bailey of Reason Magazine magazine notes that the Journal of the National Cancer Institute has produced Nifty New Risk Calculations of What's Likely to Kill You:
At all ages, the 10-year risk of death from all causes combined is higher for men than women. The effect of smoking on the chance of dying is similar to the effect of adding 5 to 10 years of age. For men who never smoked, heart disease death represents the single largest cause of death from age 50 on. For men who currently smoke, the chance of dying from lung cancer is of the same order of magnitude as the chance of dying from heart disease from age 60 on, and after age 50, it is 10 times greater than the chance of dying from prostate or colon cancer. For women who never smoked, the 10-year risks of death from breast cancer and heart disease are similar until age 60; from this age on, heart disease represents the single largest cause of death. For women who currently smoke, the chance of dying from heart disease or lung cancer exceeds the chance of dying from breast cancer from age 40 on.

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20 Tech Habits to Improve Your Life

Gina Trapani of PC World suggests 20 Tech Habits to Improve Your Life:
  1. Telecommute by Remotely Controlling Your Office Computer
  2. Schedule Automatic Hard-Drive Backups, Locally and Remotely
  3. Work Faster and More Efficiently Without a Mouse
  4. Lose Weight, Get Fit, Save Money, and Increase Your Mileage Online
  5. Clear Out Your Inbox Every Day
  6. Get Your Cables Under Control
  7. Stay on Task With the Right To-Do List
  8. Replace Your Laptop With a Thumb Drive or iPod
  9. Use Your Camera Phone as Your Digital Photographic Memory
  10. Create Your Own Price-Protection System
  11. Consolidate Multiple E-Mail Addresses With Gmail
  12. Never Forget a Birthday, Teeth Cleaning, or Oil Change Again
  13. Never Forget a Password Again
  14. Encrypt Your Private Files
  15. Stream Content From Your PC to Your Tivo, PlayStation 3, Xbox 360, or Wii
  16. Get Your TV and Music Fix Online
  17. Reach Favorite Sites and Searches Faster With Firefox Keywords
  18. Tweak, Monitor, and Extend Your Wi-Fi Network With a Firmware Upgrade (or Aluminum Foil)
  19. Master Search Techniques to Pinpoint Files or Web Sites
  20. Print Smart to Reduce Costs

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Teach the Controversy

Teach the Controversy with intelligently designed t-shirts by Jeremy Kalgreen:



(Hat tip to Mike.)

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We are running out of dirt

Charles Mann examines Our Good Earth and the problems we're creating for the soil beneath our feet, starting with compaction:
Midwestern topsoil, some of the finest cropland in the world, is made up of loose, heterogeneous clumps with plenty of air pockets between them. Big, heavy machines like the harvesters mash wet soil into an undifferentiated, nigh impenetrable slab — a process called compaction. Roots can't penetrate compacted ground; water can't drain into the earth and instead runs off, causing erosion. And because compaction can occur deep in the ground, it can take decades to reverse. Farm-equipment companies, aware of the problem, put huge tires on their machines to spread out the impact. And farmers are using satellite navigation to confine vehicles to specific paths, leaving the rest of the soil untouched. Nonetheless, this kind of compaction remains a serious issue — at least in nations where farmers can afford $400,000 harvesters.
The bigger problems, of course, are in nations where farmers can't afford $400,000 harvesters:
In the developing world, far more arable land is being lost to human-induced erosion and desertification, directly affecting the lives of 250 million people. In the first — and still the most comprehensive — study of global soil misuse, scientists at the International Soil Reference and Information Centre (ISRIC) in the Netherlands estimated in 1991 that humankind has degraded more than 7.5 million square miles of land. Our species, in other words, is rapidly trashing an area the size of the United States and Canada combined.
[...]
"Taking the long view, we are running out of dirt," says David R. Montgomery, a geologist at the University of Washington in Seattle.

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Is U.C.L.A. Illegally Using Race-Based Affirmative Action in Admissions?

Is U.C.L.A. Illegally Using Race-Based Affirmative Action in Admissions? Steven D. Levitt's friend and co-author, Tim Groseclose, a professor of political science at U.C.L.A., thinks so:
Groseclose was a member of U.C.L.A.’s Committee on Undergraduate Admissions and Relations With Schools until yesterday, when he resigned from the committee in a very public way and released an 89-page report documenting what he calls “malfeasance” and an “accompanying cover-up.”

The gist of Groseclose’s allegations is that Proposition 209 prohibits public institutions in California from considering race, sex, or ethnicity, but that U.C.L.A. nonetheless uses such information in admissions decisions.
[...]
Indeed, it seems that the adoption of the “holistic” approach to judging applications was designed precisely to accomplish that goal, as David Leonhardt has written about previously.

Statistics suggest the holistic approach did lead to a big jump in enrollment by African-Americans at U.C.L.A., which was accompanied by a sharp decline in the S.A.T. scores of the African-American students admitted.

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Google Chrome

In case you haven't heard, Google has announced its own browser, Google Chrome, via online comic.



If that's insufficiently geeky for your taste, please realize that the comic is by Scott McCloud, of Understanding Comics fame.

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Where can a laymen get an introduction to the current state-of-the-art of "hard AI"?

Where can a laymen get an introduction to the current state-of-the-art of "hard AI"?, a redditor asked, and one martincmartin replied:
I worked on (baby steps toward) hard AI until about 2003, first at CMU, then MIT. I thought a lot about where the field is going, and why. Here's a brief history of AI:

1940s:
  • computer invented; clearly does things that, in people, are considered intelligent (e.g. arithmetic)
  • Atomic bomb changes face of science research in America. It's hard to overstate the impact of going from conventional bombs (killing groups of people) to atomic bombs (wiping out entire cities). Russians quickly catch up. People know we're just scratching the surface of sub-atomic physics, and wonder what else lies hidden in the atom. Physics funding increases 10x.
1950s:
  • Computers can solve calculus problems, which looks to many people like they have the intelligence of an undergraduate.
  • Dartmouth conference and AI starts to gel as a discipline.
  • Sputnik shows that Russians can push a button and two hours later, an atomic bomb explodes in the U.S., with no way to stop it. ARPA founded to give scientists lots of money to research basic science. Funding in physics goes up another 10x.
1960s:
  • Space race, where Russians are continually ahead of the Americans: first person in space, first person in orbit, first device on the moon, etc.
  • Computers do more things that look intelligent: hold simple conversations, re-discover hundreds of years of math in a few hours. People worry that Russians will be able to create intelligence thousands or millions of times greater than a human's, and outsmart us. This peaks around 1970, as captured in the movie "The Forbin Project."
  • The media focuses on the most outlandish predictions.
  • The movie 2001 is seen as more-or-less plausible depiction of what could happen by the year 2001. Perhaps a little optimistic, but not wildly so.
1970s:
  • Russians fall behind in space & physics. Hyped AI doesn't pan out. Low hanging fruit in symbol systems AI are taken, and it's into a hard slog. Voters grumble about all the money being spent on research. ARPA renamed DARPA and told to focus on military specific technology.
1980s:
  • The people funding AI no longer want to hear about hard AI, they want people to solve practical, near-term problems. There's a growing consensus that symbol systems, hard AI stuff doesn't work and isn't going to work any time soon.
  • An AI professor at MIT told me that, in the 1980s, CS professors were embarrassed to say they were working in AI, and hasted to add "but not that kind of AI!"
  • There's lots of talk about what the next paradigm will be. Stuff that looks like other engineering disciplines wins. (Hidden Markov Models come from communications theory, as do Khalman filters, etc.)
1990s:
  • "Machine learning" (aka applied statistics) takes over as the only game in town (in the U.S.). Essentially, AI is in its behaviorist stage, where it's assumed that anyone who talks about strong AI is a flake.
2000s:
  • More "machine learning = AI". Perhaps the seeds of the next paradigm are being laid, but we'll only know in retrospect.

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Astrospies

I enjoyed NOVA's Astrospies a few months ago. Noah Shachtman's Danger Room post reminded me of it and alerted me that the full show is online. Here's a taste:

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How To Pacify Iraq, 1918 Style



David Hambling cites The Times History Of The War, published in the 1920s, which explains How To Pacify Iraq, 1918 Style:
“It was one of Sir Percy Cox’s first triumphs that he brought about a friendly understanding between the Shi’ites and Sunnites at Baghdad… The jurisdiction of the religious heads of the various communities was recognised and strengthened. The Baghdadi of all sects responded by giving willing help to the British authorities.”

The capital gained a new police force and a fire brigade, numerous schools, electric street lighting and a reliable water supply. Mosques were repaired, roads built, and “sanitary squads have penetrated the most hidden purlieus pf the city.”

Under the new system of law, justice was executed “but people found that account was taken of their customs, and even the prejudices, and that no attempt was made to thrust upon them a British and alien system.”

Meanwhile, thousands of workers were taken on at Basra to develop the port, and the railway was extended from Basra to Baghdad. (The British Empire loved railways, which were essential for the rapid movement as troops — as well as for opening up new markets and new sources of supply.)

One problem was the perpetual feuding between tribes, which had apparently been encouraged by the Turks. All boundary disputes were settled on the basis of tribal custom and the authority of the local sheikhs. This was made possible by “the personal friendship and confidence which exists between them [the British political officers] and many of the sheikhs with whom they have had to deal. “ Interestingly, it notes that “in two cases at least it was noted that the head of the tribe was a woman.”

All in all, it seems a lot more politically correct than one might have expected ninety years ago.
Of course, one reason this all worked was that the British didn't mess around:
One serious incident did occur at the holy city of Najaf, which was inhabited largely by “well-disposed holy people” but also a hard core of “irreconcilables” who would not accept the British. Some of the latter fired on British troops “causing a few casualties.” Captain W. M. Marshall, the political officer decided against violent punitive action, “not wishing to injure a town which is full of sacred memories for Mahommedans” and instead ordered the arrest of the two Sheikhs known to be responsible. They fled before they could be captured, and were presumably replaced by rulers who were more cautious about openly attacking the British.

When a British officer was later killed at Najaf, a blockade was ordered. The town was surrounded by military posts connected with barbed wire until those implicated in the murder were given up.

The marshes of lower Mesopotamia were seen as a particular challenge, being full of outlaws and feuding tribes. But within twelve months they were pacified with “security of tenure, just taxation, water for their lands, safe transport and an assured market for their produce.”

A unit was formed from the former outlaws to police the area, providing “an outlet for restless spirits and opportunity of honorable employment to petty chiefs and impoverished members of ruling families.”

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Gridiron Gear Goes to War

Gridiron Gear Goes to War to tackle head trauma:
Helmet manufacturer Riddell knows a bit about football and military helmets. Founder John Riddell helped invent the World War II suspension helmet and his company currently has an 84 percent market share in the NFL and approximately 40 percent in college. Asked by military personnel in February to improve the Army’s Advanced Combat Helmet (ACH), Riddell provided a prototype inner liner in just six months. Riddell was instructed to maintain the outer ballistic shell of the ACH and the offset distance from the head to the inside of the shell (3/4 inch). Adapting the dual density foam at the heart of its Revolution football helmet, Riddell claims the new padding reduces impact magnitudes by 50 percent.
[...]
Over the past 30 years few truly novel innovations have gained any real traction in the helmet industry. But, a former Harvard quarterback, intimately familiar with concussive impacts, and equipped with an MD and an MBA from Columbia hopes to change that. Vincent Ferrara, CEO of Xenith LLC (Lowell, MA), believes the technology in his X1 helmet can help better protect those on the gridiron and the battlefield. The X1 relies on eighteen thermoplastic shock absorbers filled with nothing but air that adapt depending how hard someone gets hit. A single hole allows the air to expel and the absorber to compress fully on all impacts. Ferrara uses a bicycle pump to explain how the X1 works. Push down lightly and the air flows out smoothly into the tire, but slam down on the pump and it resists compression. By churning the air into a turbulent state, the absorber similarly stiffens for big impacts but allows air to flow out more easily on smaller hits.

Traditional padding can only compress to its material thickness, but the shock absorber can expel all the air and fold completely flat. Like trying to stop a car in 100 yards instead of just 10, this additional distance reduces the dangerous acceleration the brain (or the car) withstands by providing more time to dissipate the energy (or stop the car). The chamber refills in approximately three milliseconds ensuring it’s ready for the next incoming linebacker. Ferrara claims the X1 provides reduced maximum acceleration as compared to competitors in low, medium and high energy impact testing. Developed over four years and with more than $10 million in financing, Xenith will provide 1,500 helmets to colleges and high schools this fall and plans a full launch in 2009. The helmets will retail at $350, as compared to leading competitors that range from $175 to $300. Ferrara has had early discussions with military brass and an active development for something customized to the battlefield could begin this fall.
(Hat tip to Wired. Also, I've discussed the Xenith X1 before.)

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Internet Traffic Begins to Bypass the U.S.

Internet Traffic Begins to Bypass the U.S. — with policy implications:
American intelligence officials have warned about this shift. “Because of the nature of global telecommunications, we are playing with a tremendous home-field advantage, and we need to exploit that edge,” Michael V. Hayden, the director of the Central Intelligence Agency, testified before the Senate Judiciary Committee in 2006. “We also need to protect that edge, and we need to protect those who provide it to us.”

Indeed, Internet industry executives and government officials have acknowledged that Internet traffic passing through the switching equipment of companies based in the United States has proved a distinct advantage for American intelligence agencies. In December 2005, The New York Times reported that the National Security Agency had established a program with the cooperation of American telecommunications firms that included the interception of foreign Internet communications.

Some Internet technologists and privacy advocates say those actions and other government policies may be hastening the shift in Canadian and European traffic away from the United States.

“Since passage of the Patriot Act, many companies based outside of the United States have been reluctant to store client information in the U.S.,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center in Washington. “There is an ongoing concern that U.S. intelligence agencies will gather this information without legal process. There is particular sensitivity about access to financial information as well as communications and Internet traffic that goes through U.S. switches.”

But economics also plays a role. Almost all nations see data networks as essential to economic development. “It’s no different than any other infrastructure that a country needs,” said K C Claffy, a research scientist at the Cooperative Association for Internet Data Analysis in San Diego. “You wouldn’t want someone owning your roads either.”

Indeed, more countries are becoming aware of how their dependence on other countries for their Internet traffic makes them vulnerable. Because of tariffs, pricing anomalies and even corporate cultures, Internet providers will often not exchange data with their local competitors. They prefer instead to send and receive traffic with larger international Internet service providers.

This leads to odd routing arrangements, referred to as tromboning, in which traffic between two cites in one country will flow through other nations. In January, when a cable was cut in the Mediterranean, Egyptian Internet traffic was nearly paralyzed because it was not being shared by local I.S.P.’s but instead was routed through European operators.

The issue was driven home this month when hackers attacked and immobilized several Georgian government Web sites during the country’s fighting with Russia. Most of Georgia’s access to the global network flowed through Russia and Turkey. A third route through an undersea cable linking Georgia to Bulgaria is scheduled for completion in September.

Ms. Claffy said that the shift away from the United States was not limited to developing countries. The Japanese “are on a rampage to build out across India and China so they have alternative routes and so they don’t have to route through the U.S.”

Andrew M. Odlyzko, a professor at the University of Minnesota who tracks the growth of the global Internet, added, “We discovered the Internet, but we couldn’t keep it a secret.” While the United States carried 70 percent of the world’s Internet traffic a decade ago, he estimates that portion has fallen to about 25 percent.

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American Apparel's New Image

Fast Company writes about American Apparel's New Image — it went from emphasizing its "ethical" sweatshop-free production to "sexy T-shirts for young people" — but what interested me was its new internal emphasis on efficient operations:
The company's — and Charney's — image had gotten so much attention that nobody seemed to bother checking into how its actual business might have changed. So I met with Marty Bailey, the company's vice president of operations. Quiet, serious, soft-spoken, and fully clothed, Bailey was an industry veteran who had begun his long education in manufacturing efficiency — and the hard realities of globalization — with Fruit of the Loom more than 20 years earlier. He had come to see offshore outsourcing