On the Lifeboat Foundation list, someone recently suggested that there are
fundamental differences between the brains of liberals and the brains of conservatives. My response...
==============================================
Leaving aside the issue of Ms. Geller (the discussion of whom I feel a bit uncomfortable about on this list,
even though I am capable of grossly unfeeling jokes about Rick Perry in the "quiet" of my mind)...
What about differences in the brain between liberals and conservatives?
At first, that question also gets my hackles up. Many "differences in the brain" are just differences
in what different people have learned and believe in the course of a lifetime,
based in part on different life experiences. Making it sound as if every troublesome kid must have a lesion in need of drugs
is itself a dangerous neurosis in this society. Ideas about human society are an area where we do have some
ability to learn new things. That's important.
But it's also true that here are some interesting disposition effects, de facto... effects which seem more
persistent than the kind of disposition effects E.O. Wilson talked about, which were mainly just initial values in an otherwise flexible
brain.
Years ago, I remember a very tense meeting of the Governing Board of the International Neural Network Society (INNS).
The question was how much to cooperate with IEEE, the Big Engineering Society, the elephant next door.
About one third wanted no part of it; total independence. About one third wanted to be totally subservient, give
up all independence, and maybe sue to just be part of it. And about one-third were in the middle, looking for
reasonable terms and a harmonious cooperation. And it couldn't all be predicted by whether one
was a neuroscientist or not. It was no surprise that Lotif Zadeh was in the middle, or that I was.
Later, I talked about it at lunch with Harry Klopf, an important mathematical psychologist known for work
analyzing animal learning. He said... yes, this all felt very much like a typical left-right-middle kind
of struggle. Some people just have a tendency to be on the right wing of ANYTHING, even on issues -- like
relations with IEEE, which would seem to have no connection at all with conservative ideology.
Probably he was thinking about attitudes towards authority and submissiveness and stuff like that.
More often, I think about "novelty seeking" and "tolerance of cognitive dissonance" -- very different and important
tendencies, with a genetic component more persistent than Wilson's concept of predisposition.
(My claim is that here are three kinds of redisposition effects -- the initial values type,
this intermediate type, and types which effect... let's call it the primary reinforcement mechanism.)
Lots of people talk about Cloninger these days, who simplifies things by combining these two into
one "mainly genetic" factor.
BUT: this does not sort people into liberals and conservatives.
Interest in tolerance of cognitive dissonance became very acute at World War II, when
the Nazis became a kind of poster child for intolerance of cognitive dissonance.
But Stalin would qualify to some degree. In general, I have the impression that people
of German origin (like half of me, and I inherit this trait) and of Russian origin (like
my wife) have this trait much more than, say, the Irish (my other half, but not decisive here)
or the Chinese.
But are Germans born conservative? Boehner sometimes makes hints...
but not really. It's about wanting the world to make sense, and not being like one of those amorphous sponges
who can believe 100 mutually contradictory things at the same time with no trouble.
(Or, like cousin Bohr, accepting islands of complementarity when they are very explicit and well defined...
though I have to admit that was too much for me to accept in physics. Am with Rand and Lenin on that one.)
One does not have to avoid novelty, or be inflexible, if one has this trait. And one certainly
doesn't have to believe in tea party stuff, or ignore solid economic analysis!
It just comes and goes in different ways.
In my view, the intermediate poredispositions are based on things like learning rate parameters,
which have no "correct" value and have genetic variation for precisely that reason.
---------------------
Addendum:
I also am high on "novelty seeking." Those two variables are discussed, for example,
in an article on the "New Coke" debacle, by Dan Levine and Sam Leven, several years ago -- two people I have known well for many years. I tend to think
of the novelty seeking as more form the Irish side.
Novelty seeking and intolerance of cognitive dissonance do tend to create a kind of tension. One part always tries to pout things into an organized picture, and the other works hard to falsify it. Maybe more scientists should be like that...
Thursday, August 18, 2011
Tuesday, August 16, 2011
world economic crisis and energy economics
Important as it is, energy is probably less than half of what we would need to get right
for an optimal recovery from the world economic crisis. But energy economics has some important
things to tell us about the other half, too.
There has been a kind of interesting debate about world economic recovery in the Financial Times (FT) today and yesterday.
Yesterday, Clive Crooke, their most visible regular op-ed writer, bemoaned the lack of real economic leadership in the world,
which keeps us from doing more than just muddle through. (I wonder whether the President's new jobs proposal is motivated in part by such feelings?)
Today, there was a kind of dual response. Lagarde, the new head of the IMF, agreed that we really can do better if we do not give in to despair
and false beliefs that we cannot do a whole lot better. Someone else basically disagreed, and said we do not need strong military type leaders like
Churchill (or Napoleon or HItler?) in the face of big economic challenges.
Comparing where we are with where we could be... (much worse or much better)...
where we are basically feels like a kind of stable balance of forces. It feels a bit like those general equilibrium models in economics
where, for all the fluctuations, things basically settle down to a certain kind of state. That kind of feeling may be limiting people's
energy in trying to find another way.
But general equilibrium models can be misleading at times. There is a kind of shocking reality that
the economics textbooks don't talk about much. (At least, I never saw mention of it across many courses in economics at Harvard.)
There are wonderful theorems about unique general equilibrium across space and time, finding an optimal trajectory
from the present to the future, when economic actors all see that path. But all those wonderful theorems depend
on certain assumptions about the parameters in the models. The real world simply does not scrupulously make
those parameters live within the assumed ranges. And our theoretical training does not always prepare people for
how to live in a world where some of the parameters are 'way out of bounds.
It may well be that we are in a global situation right now where there are three relatively stable
locally inescapable solutions to the future path, the general equilibrium across space and time
for actors who have reasonable foresight -- today's muddling through, Great Depression II,
and "return to normalcy." (As in the Clinton Camelot era?).
Two experiences in energy economics may give a few clues about how this works.
First, in my first tenured job long ago, at DOE, I led a couple of efforts to evaluate the issues of existence and uniqueness of solutions to the
Long-Term Energy Analysis Program (LEAP), a true General Equilibrium Model which was used to generate the long-term forecasts included
in the Annual Energy Outlook. (It was actually a lot more advanced in many ways than the "new" NEMS model,
which is basically just a rerun of the old MEMS model, which tried to use linear representations of the economy.)
I was able to prove existence and uniqueness UNDER CERTAIN ASSUMPTIONS (as in an ancient EIA publication still somewhere
in the DOE documents database), but for the general case, a team at Oak Ridge working under me did find realistic counterexamples.
I was reminded of this yesterday, when I needed to find a citation; I hope their later journal paper does justice to this:
C. R. Weisbin, R. W. Peelle and R. G. Alsmiller, Jr., An assessment of The Long-Term Energy Analysis Program used for the EIA 1978 report to Congress,Energy Volume 7, Issue 2, February 1982, Pages 155-170
Second, and stronger, I later had occasion to work with Dale Jorgensen's famous macroeconomic model of the US economy,
which brought in more microeconomic concepts of general equilibrium that you can find in most of the more ad hoc, heuristic (and politically tuned)
macroeconomic models from the most profitable vendors of models. The model was famous for "KLEM" -- for paying real attention to the role of energy inputs (E)
in affecting the economy. We initially hoped that his rigorous approach to predicting industrial energy demand, as a demand derived from
production and profit maximization in industry, would do better than some of the ad hoc heuristic approaches used before then.
But my experience with that model was painful and shocking, not only for me but for Jorgenson. In reasonable backcasts,
it had something like 50% error in predicting variations in industrial energy demand. There was no reasonable way out.
The model had REQUIRED elasticities of demand of -1 or more -- HIGHLY ELASTIC demand -- as required by the general equilibrium
assumptions. Those assumptions were grossly violated. There was an "adjusted R-square " of about 99%, which was basically saying that he did the best he could WITHIN THE LIMITS of this assumption.
These are hints, not a new paradigm or model. They hint that inelasticity of demand has a lot to do with the multiple solution situation we are in.
In fact, inelasticity of supply AND demand in the oil market has a lot to do with the volatile and dangerous state of the world economy
for the coming decades. A key benefit of global sustainable energy systems would be more elasticity on the supply side.
======
This also reminds me a bit of the story of Joan Robinson, an economist who was mentioned in passing at Harvard, whose
heroic story may deserve more attention. (Not that I know it as well as I should.) For many years, the ASSUMPTION
of perfect competition was very entrenched in market economics, all over the world. She was (so far as I know) the leader in extending
ordinary market economics and price theory to the case of IMPERFECT competition, where companies really account for
their market power in being able to make customers pay more. When I went to Harvard, this was taken for granted. Yet there
had been a lot of ideological pressures form people who wanted to assume and declare that ALL markets are perfect,
and that we shouldn't look with suspicious eyes at monopolies or near-monopolies. Simple common-sense reality does not
always get full play in the face of such pressures. And with the way that things are going these days in the US, I worry whether we will
revert back to the days when questioning monopoly is no longer tolerated so much. It reminds me of Teddy Roosevelt -- a strong leader that
the guy at FT didn't mention this morning, who played a crucial role in moving the US to a better, stable trajectory at a time
when things were looking very bad indeed for the US and for American ideals.
Of course, political pressures are not the only thing which tends to impoverish our theoretical analyses.
I often remember the old saying "a theorem a day keeps the chairman away" -- whose full import I did not appreciate until years later.
There was a joke in engineering a few years ago about what happened when people started applying modern adaptive control to large plants -- and a large chemical plant simply blew up due to its instability. The joke is that the industry people said they would never use adaptive control again, while the
academic people worked very hard cranking out tons of theorems proving it is absolutely stable (under certain
mild assumptions...). Only recently have people really seriously started developing massive changes in adaptive control, which
make the required assumptions a whole lot weaker... which avoid instability under a wider range of more normal conditions.
And in fact, what reminded me of all this yesterday was an overdue chapter for the latest book on those new directions...
edited by Frank Lewis of the University of Texas...
But stability with sustainability and growth in the world economy is not the simplest of challenges...
=========================================
==========================================
On the Lifeboat Foundation list, I went further:
The discussion of genes, antisocial behavior and the threats it is leading to
are very interesting... but I wonder whether a little more context
might enrich the analysis.
On a more international discussion list, people have questioned
whether traditional Western style
economic growth is really possible any more. Have we reached the
limits of an inevitably finite phenomenon... like
the top of a curve as a baseball flies into the air, only to come
crashing down into the ground?
I replied (quickly and roughly) that it really should be possible, in
principle, for the entire world to experience continued economic
growth
for a long time, enough for the whole world to enjoy a standard of
living at least as good as what a lot of Americans have become used
to, EXCEPT FOR
THREE MAJOR OBSTACLES:
1. Continued population growth. Even at 1% per year, we will
impoverish and perhaps kill ourselves off if it is not stopped sooner
or later.
That's not the main thing I want to address in this email... but the
issue will come back, since it certainly links to those natural
selection issues.
Many narcissistic pseudo experts proclaim that the problem is solved
because of certain UN projections... but those particular UN
"projections"
are goals, not projections. It's a long story, but the bottom line is
that we are not out of the woods, no matter how entrenched the vested
interests
who want this to be a taboo topic.
2. Barriers to new technology. The technological options do exist to
allow US-level standard of living for all the world, for
millions of years, for the present world population, sustainably... if
we develop and deploy them effectively. Much of my own life has been a
struggle against the
barriers to that kind of progress, and of course it requires a lot
more than one person.
3. Will we kill ourselves anyway, out of sheer cussedness, craziness,
and psychological entropy? Will the human race be like
one of those rich heirs, who have all they need, but simply go nuts
and shoot themselves?
The discussion of natural selection here in the last few postings has
mainly focused on the third question, which
is really quite worrisome. Could it be that our genes dispose us to a
kind of conflict which will inevitably cause humans
to just bring down the house? (Of course, we don't have to worry about
chimpanzees bringing down the house, even with the same
kind of genes, because they don't have nuclear weapons. At least not yet.)
This ties into some questions about the world economic crisis, which I
have tried to think about from time to time lately.
(For example, see
http://drpauljohn.blogspot.com/2011/08/world-economic-crisis-and-energy.html .)
A lot of the models of natural selection remind me a lot of Nash
equilibria in game theory, which have become important
in modern engineering. For example, many people want to use a kind of
natural selection and competition
between multiple agents -- multiagent systems (MAS) -- to manage
complex systems like electric power grids.
(See the August issue of IEEE Computational Intelligence magazine.)
But the outcome of natural selection is not always benign,
as some have noted on this list. In the general case, Nash equilibria
are NOT Pareto optimal, not a win-win solution, not the kind
of outcome which is the best for ANY of the players of the game.
SOMETIMES Nash equilibria are decent and sustainable; sometimes they
are not even sustainable; sometimes
they are even close enough to Pareto optimality. It all depends on the
rules of the game. In electric power, there has been more
and more interest in MARKET DESIGN -- DESIGN of the rules of the game
such that the market equilibrium really is Pareto optimal, or close
enough to it.
But what about this world economy, which seems to be going to hell on
many levels, and certainly does pose risks
of extinction in the end to the whole species? Is there a way that we
could structure things (the "game" or the "niches") such that they do
NOT go to tell,
either with Nash equilibrium or natural selection or whatever?
(This is not just loose talk. Great Depression II is quite possible. I
am reminded of how I just couldn't control my stomach the other day
after drinking
too much iced tea and shopper's fried chicken on a green yacht in the
Chesapeake.... And then, if we have Great Depression II, consider
what the
political and military implications were of Great Depression I, back
before nuclear weapons and such a multipolar world as we now live in.
)
I don't see a clear path here, but I wonder...
In electric power, new computers and algorithms have been absolutely
crucial to new market designs which overcome
many of the problems of the past. (Yesterday I finished a book chapter
on some new relevant algorithms which are relevant here.)
But is there any way they could help do the same for the stickier sort
of game we see playing out in the world
economy as a whole?
Last week Juergen Schmudhuber suggested to me that we could at least
use intelligent systems for financial clearing systems,
to get rid of the irrational arbitrage possibilities which lead to an
excess drain of money funding microsecond-level traders.
(That reminds me of how getting rid of irrationalities which lead to
arbitrage possibilities have been important in electric power.
Outside traders can help the system, but only if it is well designed
enough.) That would be a step forwards. It might not even be a tiny
step forwards,
because the big conflicts in Washington clearly show a schism between
fundamental investors who care about lasting long-term value (like
Buffet)
versus glassy eyed manic types who make money on Wall Street through
fast myopic games and donate lots of money to the misnamed
"Club for Growth" (a club to extract as much tax breaks from the US as
possible, without asking a lot of questions about how long the US can
last).
But what about the larger system?
So far as I can tell, the nations of the world are stuck in an
inferior Nash equilibrium, which prevents any of them from really
moving to full
economic recovery in the one or two years we became used to in the US
after World War II. (Many other nations have experienced
"lost decades" in this period.) In theory, they could get out of this
, and acquire at least an option for rapid economic recovery,
if they somehow could achieve some kind of arrangement for one to four
crucial variables... the most important being real interest rates.
For example, for the United States, Greece and France, the issue of
interest rates (and oil prices) is entangled
with any hope of rapid recovery, in several ways.
A major difficulty in finding a way to use new algorithms is the
inevitable role of human judgment in these systems.
George Soros (an op-ed in Financial Times today?) has a suggestion for
solving the eurozone crisis by a new mechanism
for a new kind of eurobond, which inevitable relies on bankers glaring
across the table at national governments,
just as bankers issuing mortgages have to judge credit risks, and NSF
program directors and reviewers
have to make difficult decisions about research proposals.
What can be done about the rules of THESE kinds of games?
for an optimal recovery from the world economic crisis. But energy economics has some important
things to tell us about the other half, too.
There has been a kind of interesting debate about world economic recovery in the Financial Times (FT) today and yesterday.
Yesterday, Clive Crooke, their most visible regular op-ed writer, bemoaned the lack of real economic leadership in the world,
which keeps us from doing more than just muddle through. (I wonder whether the President's new jobs proposal is motivated in part by such feelings?)
Today, there was a kind of dual response. Lagarde, the new head of the IMF, agreed that we really can do better if we do not give in to despair
and false beliefs that we cannot do a whole lot better. Someone else basically disagreed, and said we do not need strong military type leaders like
Churchill (or Napoleon or HItler?) in the face of big economic challenges.
Comparing where we are with where we could be... (much worse or much better)...
where we are basically feels like a kind of stable balance of forces. It feels a bit like those general equilibrium models in economics
where, for all the fluctuations, things basically settle down to a certain kind of state. That kind of feeling may be limiting people's
energy in trying to find another way.
But general equilibrium models can be misleading at times. There is a kind of shocking reality that
the economics textbooks don't talk about much. (At least, I never saw mention of it across many courses in economics at Harvard.)
There are wonderful theorems about unique general equilibrium across space and time, finding an optimal trajectory
from the present to the future, when economic actors all see that path. But all those wonderful theorems depend
on certain assumptions about the parameters in the models. The real world simply does not scrupulously make
those parameters live within the assumed ranges. And our theoretical training does not always prepare people for
how to live in a world where some of the parameters are 'way out of bounds.
It may well be that we are in a global situation right now where there are three relatively stable
locally inescapable solutions to the future path, the general equilibrium across space and time
for actors who have reasonable foresight -- today's muddling through, Great Depression II,
and "return to normalcy." (As in the Clinton Camelot era?).
Two experiences in energy economics may give a few clues about how this works.
First, in my first tenured job long ago, at DOE, I led a couple of efforts to evaluate the issues of existence and uniqueness of solutions to the
Long-Term Energy Analysis Program (LEAP), a true General Equilibrium Model which was used to generate the long-term forecasts included
in the Annual Energy Outlook. (It was actually a lot more advanced in many ways than the "new" NEMS model,
which is basically just a rerun of the old MEMS model, which tried to use linear representations of the economy.)
I was able to prove existence and uniqueness UNDER CERTAIN ASSUMPTIONS (as in an ancient EIA publication still somewhere
in the DOE documents database), but for the general case, a team at Oak Ridge working under me did find realistic counterexamples.
I was reminded of this yesterday, when I needed to find a citation; I hope their later journal paper does justice to this:
C. R. Weisbin, R. W. Peelle and R. G. Alsmiller, Jr., An assessment of The Long-Term Energy Analysis Program used for the EIA 1978 report to Congress,Energy Volume 7, Issue 2, February 1982, Pages 155-170
Second, and stronger, I later had occasion to work with Dale Jorgensen's famous macroeconomic model of the US economy,
which brought in more microeconomic concepts of general equilibrium that you can find in most of the more ad hoc, heuristic (and politically tuned)
macroeconomic models from the most profitable vendors of models. The model was famous for "KLEM" -- for paying real attention to the role of energy inputs (E)
in affecting the economy. We initially hoped that his rigorous approach to predicting industrial energy demand, as a demand derived from
production and profit maximization in industry, would do better than some of the ad hoc heuristic approaches used before then.
But my experience with that model was painful and shocking, not only for me but for Jorgenson. In reasonable backcasts,
it had something like 50% error in predicting variations in industrial energy demand. There was no reasonable way out.
The model had REQUIRED elasticities of demand of -1 or more -- HIGHLY ELASTIC demand -- as required by the general equilibrium
assumptions. Those assumptions were grossly violated. There was an "adjusted R-square " of about 99%, which was basically saying that he did the best he could WITHIN THE LIMITS of this assumption.
These are hints, not a new paradigm or model. They hint that inelasticity of demand has a lot to do with the multiple solution situation we are in.
In fact, inelasticity of supply AND demand in the oil market has a lot to do with the volatile and dangerous state of the world economy
for the coming decades. A key benefit of global sustainable energy systems would be more elasticity on the supply side.
======
This also reminds me a bit of the story of Joan Robinson, an economist who was mentioned in passing at Harvard, whose
heroic story may deserve more attention. (Not that I know it as well as I should.) For many years, the ASSUMPTION
of perfect competition was very entrenched in market economics, all over the world. She was (so far as I know) the leader in extending
ordinary market economics and price theory to the case of IMPERFECT competition, where companies really account for
their market power in being able to make customers pay more. When I went to Harvard, this was taken for granted. Yet there
had been a lot of ideological pressures form people who wanted to assume and declare that ALL markets are perfect,
and that we shouldn't look with suspicious eyes at monopolies or near-monopolies. Simple common-sense reality does not
always get full play in the face of such pressures. And with the way that things are going these days in the US, I worry whether we will
revert back to the days when questioning monopoly is no longer tolerated so much. It reminds me of Teddy Roosevelt -- a strong leader that
the guy at FT didn't mention this morning, who played a crucial role in moving the US to a better, stable trajectory at a time
when things were looking very bad indeed for the US and for American ideals.
Of course, political pressures are not the only thing which tends to impoverish our theoretical analyses.
I often remember the old saying "a theorem a day keeps the chairman away" -- whose full import I did not appreciate until years later.
There was a joke in engineering a few years ago about what happened when people started applying modern adaptive control to large plants -- and a large chemical plant simply blew up due to its instability. The joke is that the industry people said they would never use adaptive control again, while the
academic people worked very hard cranking out tons of theorems proving it is absolutely stable (under certain
mild assumptions...). Only recently have people really seriously started developing massive changes in adaptive control, which
make the required assumptions a whole lot weaker... which avoid instability under a wider range of more normal conditions.
And in fact, what reminded me of all this yesterday was an overdue chapter for the latest book on those new directions...
edited by Frank Lewis of the University of Texas...
But stability with sustainability and growth in the world economy is not the simplest of challenges...
=========================================
==========================================
On the Lifeboat Foundation list, I went further:
The discussion of genes, antisocial behavior and the threats it is leading to
are very interesting... but I wonder whether a little more context
might enrich the analysis.
On a more international discussion list, people have questioned
whether traditional Western style
economic growth is really possible any more. Have we reached the
limits of an inevitably finite phenomenon... like
the top of a curve as a baseball flies into the air, only to come
crashing down into the ground?
I replied (quickly and roughly) that it really should be possible, in
principle, for the entire world to experience continued economic
growth
for a long time, enough for the whole world to enjoy a standard of
living at least as good as what a lot of Americans have become used
to, EXCEPT FOR
THREE MAJOR OBSTACLES:
1. Continued population growth. Even at 1% per year, we will
impoverish and perhaps kill ourselves off if it is not stopped sooner
or later.
That's not the main thing I want to address in this email... but the
issue will come back, since it certainly links to those natural
selection issues.
Many narcissistic pseudo experts proclaim that the problem is solved
because of certain UN projections... but those particular UN
"projections"
are goals, not projections. It's a long story, but the bottom line is
that we are not out of the woods, no matter how entrenched the vested
interests
who want this to be a taboo topic.
2. Barriers to new technology. The technological options do exist to
allow US-level standard of living for all the world, for
millions of years, for the present world population, sustainably... if
we develop and deploy them effectively. Much of my own life has been a
struggle against the
barriers to that kind of progress, and of course it requires a lot
more than one person.
3. Will we kill ourselves anyway, out of sheer cussedness, craziness,
and psychological entropy? Will the human race be like
one of those rich heirs, who have all they need, but simply go nuts
and shoot themselves?
The discussion of natural selection here in the last few postings has
mainly focused on the third question, which
is really quite worrisome. Could it be that our genes dispose us to a
kind of conflict which will inevitably cause humans
to just bring down the house? (Of course, we don't have to worry about
chimpanzees bringing down the house, even with the same
kind of genes, because they don't have nuclear weapons. At least not yet.)
This ties into some questions about the world economic crisis, which I
have tried to think about from time to time lately.
(For example, see
http://drpauljohn.blogspot.com/2011/08/world-economic-crisis-and-energy.html .)
A lot of the models of natural selection remind me a lot of Nash
equilibria in game theory, which have become important
in modern engineering. For example, many people want to use a kind of
natural selection and competition
between multiple agents -- multiagent systems (MAS) -- to manage
complex systems like electric power grids.
(See the August issue of IEEE Computational Intelligence magazine.)
But the outcome of natural selection is not always benign,
as some have noted on this list. In the general case, Nash equilibria
are NOT Pareto optimal, not a win-win solution, not the kind
of outcome which is the best for ANY of the players of the game.
SOMETIMES Nash equilibria are decent and sustainable; sometimes they
are not even sustainable; sometimes
they are even close enough to Pareto optimality. It all depends on the
rules of the game. In electric power, there has been more
and more interest in MARKET DESIGN -- DESIGN of the rules of the game
such that the market equilibrium really is Pareto optimal, or close
enough to it.
But what about this world economy, which seems to be going to hell on
many levels, and certainly does pose risks
of extinction in the end to the whole species? Is there a way that we
could structure things (the "game" or the "niches") such that they do
NOT go to tell,
either with Nash equilibrium or natural selection or whatever?
(This is not just loose talk. Great Depression II is quite possible. I
am reminded of how I just couldn't control my stomach the other day
after drinking
too much iced tea and shopper's fried chicken on a green yacht in the
Chesapeake.... And then, if we have Great Depression II, consider
what the
political and military implications were of Great Depression I, back
before nuclear weapons and such a multipolar world as we now live in.
)
I don't see a clear path here, but I wonder...
In electric power, new computers and algorithms have been absolutely
crucial to new market designs which overcome
many of the problems of the past. (Yesterday I finished a book chapter
on some new relevant algorithms which are relevant here.)
But is there any way they could help do the same for the stickier sort
of game we see playing out in the world
economy as a whole?
Last week Juergen Schmudhuber suggested to me that we could at least
use intelligent systems for financial clearing systems,
to get rid of the irrational arbitrage possibilities which lead to an
excess drain of money funding microsecond-level traders.
(That reminds me of how getting rid of irrationalities which lead to
arbitrage possibilities have been important in electric power.
Outside traders can help the system, but only if it is well designed
enough.) That would be a step forwards. It might not even be a tiny
step forwards,
because the big conflicts in Washington clearly show a schism between
fundamental investors who care about lasting long-term value (like
Buffet)
versus glassy eyed manic types who make money on Wall Street through
fast myopic games and donate lots of money to the misnamed
"Club for Growth" (a club to extract as much tax breaks from the US as
possible, without asking a lot of questions about how long the US can
last).
But what about the larger system?
So far as I can tell, the nations of the world are stuck in an
inferior Nash equilibrium, which prevents any of them from really
moving to full
economic recovery in the one or two years we became used to in the US
after World War II. (Many other nations have experienced
"lost decades" in this period.) In theory, they could get out of this
, and acquire at least an option for rapid economic recovery,
if they somehow could achieve some kind of arrangement for one to four
crucial variables... the most important being real interest rates.
For example, for the United States, Greece and France, the issue of
interest rates (and oil prices) is entangled
with any hope of rapid recovery, in several ways.
A major difficulty in finding a way to use new algorithms is the
inevitable role of human judgment in these systems.
George Soros (an op-ed in Financial Times today?) has a suggestion for
solving the eurozone crisis by a new mechanism
for a new kind of eurobond, which inevitable relies on bankers glaring
across the table at national governments,
just as bankers issuing mortgages have to judge credit risks, and NSF
program directors and reviewers
have to make difficult decisions about research proposals.
What can be done about the rules of THESE kinds of games?
Friday, July 22, 2011
How to live for 200 years, or at least become 20 years younger
Dedicated to the old Boeing RASV and TAV teams...
May they live long enough for us to learn how much they have to give...
In a nutshell:
TP53 plus telomerase
Two well-investigated new medical technologies, which simply need to be combined together. But it takes clear system engineering thinking to see why this is the way.
This is also a kind of cure for most cancer.
We know that most of aging is the combined effect of two causes: (1) random noise
or disturbance to the DNA (which is also the main cause of cancer); and (2) the "biological clock" of the telomeres at the end of the DNA. Telomerase resets the clock,
but by itself this causes problems. When cell lines are allowed to go longer than the usual cutoff of 50 generations or so, mutations can build up, and kill you by cancer instead of old age. It is said that some scientists in Spain have made progress with telomerase buffered with simple cancer preventors, which is a good step, but not enough.
To fight the noise... we learned years ago that simple brute force antioxidants like vitamin E don't do much. (I wonder whether vitamin E can benefit longevity sometimes by enhancing sexual activity, which ends up helping the mind-body relation, but that's not enough for 200 years..) It was really exciting when research into things like sirtuins turned up genes that the body uses ITSELF to activate a natural, highly evolved system of suppressing noise, analogous to error correction codes, which allow lifetimes in nature much longer than what a simple tradeoff between noise and telomeres would allow. We are fortunate that nature "wanted' humans to live long enough that it evolved this mechanism. Nature didn't ratchet up the expression of this mechanism to the max, because that requires extra food and because natural selection didn't need THAT much longevity for human hunter-gatherers.
So how do we ratchet it up? Many have thought... resveratrol. That stimulates sirtuins, doesn't it? Not quite. It actually INHIBITS p53, the main scavenger of noise. In bloated overfed mice, it can extend lifetime to something more normal, but
it's basically a bandaid that covers even MORE RAPID noise.
Next: I that the guy who wrote "The Longevity Pill,' an excellent popular summary, which points to some literature I missed on my first scholar search.
What about rapamycin, which DOES reduce noise? What about the Nature study, showing the equivalent of adding 10 more years to the life of a 60's year old man (like me)
when it was given to mice? A few months ago, I was about ready to try it,
straight, until I looked into the issue of dose. Some folks do take 4 mg per day
now.. which is enough to create serious immunosuppression (another way to kill yourself) but only a tiny fraction of what it would take to get the equivalent of what those mice got in the Nature study. The problem is that it is a more powerful immunosuppressor than noise reducer. It's part of the right "proteomic circuit,"
but not the right node of that network.
So what's a good node?
The obvious answer -- look to P53 itself!
TP53, the gene which activates more p53, is well known, and has been the basis for
important experiments. IT DOES KILL cancer tumors and other noise. Why don't
we use it and even revere it as the cause for cancer? Because when it is used, it causes accelerated aging. From the systems viewpoint, it's obvious what's going on --
when bad cells get killed, new ones muse be grown to replace them, and that strains the 50-generation clock.
Simple answer: reset the clock as you do it. TP53 plus telomerase.
Make yourself 20 years younger in real physical age. And maybe, like Dr. Who... keep doing it about ten times later...
For those of us who could never hope to get all our work done in a mere 70 years,
this is one way to get an extension.. if those bad old politicians don't screw it up for us, and zero out the human resources we need, in these challenging times...
May they live long enough for us to learn how much they have to give...
In a nutshell:
TP53 plus telomerase
Two well-investigated new medical technologies, which simply need to be combined together. But it takes clear system engineering thinking to see why this is the way.
This is also a kind of cure for most cancer.
We know that most of aging is the combined effect of two causes: (1) random noise
or disturbance to the DNA (which is also the main cause of cancer); and (2) the "biological clock" of the telomeres at the end of the DNA. Telomerase resets the clock,
but by itself this causes problems. When cell lines are allowed to go longer than the usual cutoff of 50 generations or so, mutations can build up, and kill you by cancer instead of old age. It is said that some scientists in Spain have made progress with telomerase buffered with simple cancer preventors, which is a good step, but not enough.
To fight the noise... we learned years ago that simple brute force antioxidants like vitamin E don't do much. (I wonder whether vitamin E can benefit longevity sometimes by enhancing sexual activity, which ends up helping the mind-body relation, but that's not enough for 200 years..) It was really exciting when research into things like sirtuins turned up genes that the body uses ITSELF to activate a natural, highly evolved system of suppressing noise, analogous to error correction codes, which allow lifetimes in nature much longer than what a simple tradeoff between noise and telomeres would allow. We are fortunate that nature "wanted' humans to live long enough that it evolved this mechanism. Nature didn't ratchet up the expression of this mechanism to the max, because that requires extra food and because natural selection didn't need THAT much longevity for human hunter-gatherers.
So how do we ratchet it up? Many have thought... resveratrol. That stimulates sirtuins, doesn't it? Not quite. It actually INHIBITS p53, the main scavenger of noise. In bloated overfed mice, it can extend lifetime to something more normal, but
it's basically a bandaid that covers even MORE RAPID noise.
Next: I that the guy who wrote "The Longevity Pill,' an excellent popular summary, which points to some literature I missed on my first scholar search.
What about rapamycin, which DOES reduce noise? What about the Nature study, showing the equivalent of adding 10 more years to the life of a 60's year old man (like me)
when it was given to mice? A few months ago, I was about ready to try it,
straight, until I looked into the issue of dose. Some folks do take 4 mg per day
now.. which is enough to create serious immunosuppression (another way to kill yourself) but only a tiny fraction of what it would take to get the equivalent of what those mice got in the Nature study. The problem is that it is a more powerful immunosuppressor than noise reducer. It's part of the right "proteomic circuit,"
but not the right node of that network.
So what's a good node?
The obvious answer -- look to P53 itself!
TP53, the gene which activates more p53, is well known, and has been the basis for
important experiments. IT DOES KILL cancer tumors and other noise. Why don't
we use it and even revere it as the cause for cancer? Because when it is used, it causes accelerated aging. From the systems viewpoint, it's obvious what's going on --
when bad cells get killed, new ones muse be grown to replace them, and that strains the 50-generation clock.
Simple answer: reset the clock as you do it. TP53 plus telomerase.
Make yourself 20 years younger in real physical age. And maybe, like Dr. Who... keep doing it about ten times later...
For those of us who could never hope to get all our work done in a mere 70 years,
this is one way to get an extension.. if those bad old politicians don't screw it up for us, and zero out the human resources we need, in these challenging times...
Saturday, July 9, 2011
levels of enlightenment
(Sent to a friend in India, cc two friends in US.)
Ask the right question, in the right spirit, and there may be some hope for you."
There have been many teachers of enlightenment -- and many in the West, in India and in China.
Only in recent years have "I" come to know a decent share of those from China,
but I made sure to know of those in the West and many from India long ago.
This week I have mused -- there is some similarity of feeling about Krishnamurthi and Emerson.
Perhaps it is a great tragedy that Americans today are far less aware of Emerson than they were..
even so recently as when I was young.
But older and in some ways deeper teachers in India and the US spent a lot of time trying to map out... things like stages
of enlightenment. For example... this house I am typing in, at 5AM on Saturday, was purchased from Sohini Patel,
whose family were aryuveda healers to the Ghandi family. I have an obscure book here about an unusual Irish woman who
acted as a spiritual teacher to Mohatma Ghandi in his earlier years, after learning many things about the middle
yogic tradition in India...
Such people would talk a lot about rising from the mundane level, to the etheric level, to the causal level, to the mental level,
to the cosmic consciousness level, to the soul level, and so on, always trying to raise
one's plane of consciousness and being and life. In a way, it was like the series of chakras. With these levels and these chakras,
it seemed very odd to me. "What is going on?," I wondered. How can one really probe and experience the authentic human energy and experience
which these things represent, and how can one make sense of them in terms of more reliable understanding in the spirit of first person science?
One way to achieve a truer understanding... is to use some careful analogies. In the old Western esoteric traditions, there is
a famous saying "As above, so below." It is important, and easier to connect to scientific thinking than those levels and chakras.
Using analogies... we see some kinds of stages of development, growth and learning in ordering, mundane
exoteric life. Piaget has described some stages and ideas about stages. (His idea of stages survives better in psychology
than the specific things he proposed. What he proposed was only a crude beginning for us today. However, since he took
a kind of scientific approach, however limited, his work had the great value of helping us rise and do better. May it become so for
those yogic traditions as well!) Erickson, in describing the psychology of adolescents, has done some mapping as well.
Such roadmaps of stages can never be completely reliable... but they can be useful. They can be of use in trying to map out
paths to greater spiritual enlightenment.
In my Confucius talk and IJCNN11 paper, I stress a particular level or watershed in the development of the full personality
which may be called "sanity" or "integrity" or "ubermenshhood." It is only one stage, not the highest or the ultimate.
Yet even as limited as it is, it is not so common on this crude early jungle of a planet. People who have not reached it
often get elements of awareness of later stages. One of the most important things people could do to create progress
in this world today, as important as $400/kg access to low earth orbit, would be creation of a situation where many, many people
truly attain this particular level of consciousness and self-awareness. If it is truly attained, with enough grounding
in scientific understanding, there will be no trouble in seeing how it is equivalent to the real core of all three
older concepts I named above. I have some hope that the leading Confucius Institute might play some role in this.
BUT... let me draw an analogy to the state of neural network research. Most of my struggles today
involve trying to educate people to understand and implement certain levels of intelligence --
"vector intelligence" or "spatial intelligence" (the next level up form vector intelligence). But in my own
thinking and understanding, I am much further along, up to multimodular and quantum intelligence.
Likewise, this "integrity"step is just a beginning. For me... the process of attaining it was from age 15 to 17,
roughly. Age 24 was when I reached what Gopal Krishna of kundalini yoga reached... and life goes on.
We all can learn... faster and better if we have a solid basis in sanity and integrity to work from.
And now... in my life... the most important spiritual practice... is perhaps the "cosmic consciousness"
activity circa 3-4 AM.... which I grew into many years ago.
The simple slogan "be true to yourself" (from a Confucian origin, if any specific origin in history)...
is a nice watchword for achieving that first simple level.
The sentence at the top of this email is a nice watchword for rising from the preparatory stage
of cosmic consciousness to the more solid and real stage of it. The sentence can be understood
usefully and constructively at a more mundane level, of course. That is probably how
you read it the first time. But it has a special meaning when you raise your mind beyond the mundane
level... to some kind of calm ocean of greater consciousness... and when your inner life is ready to rise up and stop bobbing like
a mindless cork floating on the surface of that ocean... and become more of an active real part of that living ocean.
I have known this for many years, but it is one of things I have some duty to put on paper before we let
the process of ordinary aging overwhelm us.
================================================
At some point, we should discuss some of the Western schools for trying to raise people's level
of spiritual evolution. At least until recently, for many centuries, I would say that the
Rosicrucian school was the most serious lead school. (The last decade or two has become
somewhat fractured in the West... as has happened a number of times in the West,
on again off again, for millennia.)
I remember the time in the late 1970's when I cam across a short and deceptively simple looking
leaflet on what that school is about. I was intrigued by their comment that the emphasis or strategy of that
particular school was to try to develop a solid basis in understanding, first (as well as some ethical
foundations), before going too far into areas like esoteric exercises and experience, which can easily go awry
if they are pursued without that kind of foundation. At times, they spoke about choosing
"the right hand path" over the dangerous and impatient "left hand path."
The more scientifically grounded approach I am hoping for and proposing now is basically just an extension
of that same concept...
But: thank you for your patience, if you have read this far. I have been typing for almost an hour, and it is time
for me to join my family here (my brother John lives in New Jersey) to go on a boat trip in Maryland...
Best of luck,
Paul
=====================================================
Addendum:
I am tempted to add just a little about some of the Chinese traditions
I have learned more about lately -- and have still more to learn about.
For example, I am grateful to the Confucius Institute for informing me that
the word in Chinese for integrity is "zhengqi." This simple fact is worthy of an essay in itself.
This simple fact reminds me of Karl Pribram's book on Freud, where he reminds us
that Freud uses the word "ego" to mean several very different but related things.
It is easy to understand how Freud felt about those things, and why he did it... but to understand clearly the more scientific meaning of Freud's work, we do need
to sort out and get past that ambiguity. Here, I would say that
basic integrity and properly balanced qi are closely related, but not exactly the same. I was very happy to learn how the balance of qi is understood and recognized
in the very strongest foundation of cure Confucianism, and that they kept a kind
of eagle statue on the main desk for so many centuries...
In a way, integrity ... is actually a multistage process. Crudely, it starts with a right concept or set of axioms (as in my IJCNN11 paper)... and proceeds, when implemented, to a more rational flow of backpropagation signals at all levels of the personality, both mundane and spiritual. Much later, as awareness grows,
to include all of these signals to some degree (we are never even fully aware of
ALL that hits our retina!)... there is even some self-conscious effort and ability to
try to maintain their accuracy.
Enough. Now I must really "run".
Ask the right question, in the right spirit, and there may be some hope for you."
There have been many teachers of enlightenment -- and many in the West, in India and in China.
Only in recent years have "I" come to know a decent share of those from China,
but I made sure to know of those in the West and many from India long ago.
This week I have mused -- there is some similarity of feeling about Krishnamurthi and Emerson.
Perhaps it is a great tragedy that Americans today are far less aware of Emerson than they were..
even so recently as when I was young.
But older and in some ways deeper teachers in India and the US spent a lot of time trying to map out... things like stages
of enlightenment. For example... this house I am typing in, at 5AM on Saturday, was purchased from Sohini Patel,
whose family were aryuveda healers to the Ghandi family. I have an obscure book here about an unusual Irish woman who
acted as a spiritual teacher to Mohatma Ghandi in his earlier years, after learning many things about the middle
yogic tradition in India...
Such people would talk a lot about rising from the mundane level, to the etheric level, to the causal level, to the mental level,
to the cosmic consciousness level, to the soul level, and so on, always trying to raise
one's plane of consciousness and being and life. In a way, it was like the series of chakras. With these levels and these chakras,
it seemed very odd to me. "What is going on?," I wondered. How can one really probe and experience the authentic human energy and experience
which these things represent, and how can one make sense of them in terms of more reliable understanding in the spirit of first person science?
One way to achieve a truer understanding... is to use some careful analogies. In the old Western esoteric traditions, there is
a famous saying "As above, so below." It is important, and easier to connect to scientific thinking than those levels and chakras.
Using analogies... we see some kinds of stages of development, growth and learning in ordering, mundane
exoteric life. Piaget has described some stages and ideas about stages. (His idea of stages survives better in psychology
than the specific things he proposed. What he proposed was only a crude beginning for us today. However, since he took
a kind of scientific approach, however limited, his work had the great value of helping us rise and do better. May it become so for
those yogic traditions as well!) Erickson, in describing the psychology of adolescents, has done some mapping as well.
Such roadmaps of stages can never be completely reliable... but they can be useful. They can be of use in trying to map out
paths to greater spiritual enlightenment.
In my Confucius talk and IJCNN11 paper, I stress a particular level or watershed in the development of the full personality
which may be called "sanity" or "integrity" or "ubermenshhood." It is only one stage, not the highest or the ultimate.
Yet even as limited as it is, it is not so common on this crude early jungle of a planet. People who have not reached it
often get elements of awareness of later stages. One of the most important things people could do to create progress
in this world today, as important as $400/kg access to low earth orbit, would be creation of a situation where many, many people
truly attain this particular level of consciousness and self-awareness. If it is truly attained, with enough grounding
in scientific understanding, there will be no trouble in seeing how it is equivalent to the real core of all three
older concepts I named above. I have some hope that the leading Confucius Institute might play some role in this.
BUT... let me draw an analogy to the state of neural network research. Most of my struggles today
involve trying to educate people to understand and implement certain levels of intelligence --
"vector intelligence" or "spatial intelligence" (the next level up form vector intelligence). But in my own
thinking and understanding, I am much further along, up to multimodular and quantum intelligence.
Likewise, this "integrity"step is just a beginning. For me... the process of attaining it was from age 15 to 17,
roughly. Age 24 was when I reached what Gopal Krishna of kundalini yoga reached... and life goes on.
We all can learn... faster and better if we have a solid basis in sanity and integrity to work from.
And now... in my life... the most important spiritual practice... is perhaps the "cosmic consciousness"
activity circa 3-4 AM.... which I grew into many years ago.
The simple slogan "be true to yourself" (from a Confucian origin, if any specific origin in history)...
is a nice watchword for achieving that first simple level.
The sentence at the top of this email is a nice watchword for rising from the preparatory stage
of cosmic consciousness to the more solid and real stage of it. The sentence can be understood
usefully and constructively at a more mundane level, of course. That is probably how
you read it the first time. But it has a special meaning when you raise your mind beyond the mundane
level... to some kind of calm ocean of greater consciousness... and when your inner life is ready to rise up and stop bobbing like
a mindless cork floating on the surface of that ocean... and become more of an active real part of that living ocean.
I have known this for many years, but it is one of things I have some duty to put on paper before we let
the process of ordinary aging overwhelm us.
================================================
At some point, we should discuss some of the Western schools for trying to raise people's level
of spiritual evolution. At least until recently, for many centuries, I would say that the
Rosicrucian school was the most serious lead school. (The last decade or two has become
somewhat fractured in the West... as has happened a number of times in the West,
on again off again, for millennia.)
I remember the time in the late 1970's when I cam across a short and deceptively simple looking
leaflet on what that school is about. I was intrigued by their comment that the emphasis or strategy of that
particular school was to try to develop a solid basis in understanding, first (as well as some ethical
foundations), before going too far into areas like esoteric exercises and experience, which can easily go awry
if they are pursued without that kind of foundation. At times, they spoke about choosing
"the right hand path" over the dangerous and impatient "left hand path."
The more scientifically grounded approach I am hoping for and proposing now is basically just an extension
of that same concept...
But: thank you for your patience, if you have read this far. I have been typing for almost an hour, and it is time
for me to join my family here (my brother John lives in New Jersey) to go on a boat trip in Maryland...
Best of luck,
Paul
=====================================================
Addendum:
I am tempted to add just a little about some of the Chinese traditions
I have learned more about lately -- and have still more to learn about.
For example, I am grateful to the Confucius Institute for informing me that
the word in Chinese for integrity is "zhengqi." This simple fact is worthy of an essay in itself.
This simple fact reminds me of Karl Pribram's book on Freud, where he reminds us
that Freud uses the word "ego" to mean several very different but related things.
It is easy to understand how Freud felt about those things, and why he did it... but to understand clearly the more scientific meaning of Freud's work, we do need
to sort out and get past that ambiguity. Here, I would say that
basic integrity and properly balanced qi are closely related, but not exactly the same. I was very happy to learn how the balance of qi is understood and recognized
in the very strongest foundation of cure Confucianism, and that they kept a kind
of eagle statue on the main desk for so many centuries...
In a way, integrity ... is actually a multistage process. Crudely, it starts with a right concept or set of axioms (as in my IJCNN11 paper)... and proceeds, when implemented, to a more rational flow of backpropagation signals at all levels of the personality, both mundane and spiritual. Much later, as awareness grows,
to include all of these signals to some degree (we are never even fully aware of
ALL that hits our retina!)... there is even some self-conscious effort and ability to
try to maintain their accuracy.
Enough. Now I must really "run".
Friday, July 8, 2011
international discussion of world economy crisis
Thanks very much, Rosa!
Your two recent messages both create great positive warm feelings...
2011/7/3 Rosa @ Brazil:
> Look at that
>
> http://www.youtube.com/watch?v=qOP2V_np2c0
My computer would not let me play the video here, but the current
crisis of the world economy
is easy enough to see directly now for anyone with open eyes and full
media access.
There is a lot of urgent economic firefighting going on in the White
House today, in the debate on the debt ceiling,
and in European banking circles, on the crisis of Greece. But we also
could use some bigger, more foresighted dialogue
on the question: do we need to be in this situation at all? Is there
some other way to think about the global economy which would
make the present recession unnecessary?
When I saw your announcement about a session on media and positive
visualization in the Catskills,
I felt very wistful that I don't see a way to connect to that event.
Email and meditation are as come as I come to
media. And the world economic situation makes it hard for me to
project positive thinking at this time.
Perhaps we need to create the vivid credible positive image first
before we can project it effectively.
So -- this all leads to the question: can we imagine a way of doing
things which makes
the world recession unnecessary?
President Obama said something like this a few months ago, roughly
like "Something isn't making sense here.
How can it be that we have the same resources we did before September
2008, we have people more willing to save for the future than before,
and people eager to work just as much as before... why can't we have
the same standard of living as we had just a few months ago, with the
same jobs for the same people doing the same things?" Are people
dying out there because we don't
have a good enough "dating service" between people who want to work
and people who want the stuff?
The Financial Times had a nice op-ed just a few days ago, by one of
their regular people, under a big picture of two sinking ships,
stressing how similar the problems are in the US and the EU.
Common sense suggests that the whole recession is unnecessary, if only
we were clear minded enough about how to
think out of the box. But how? We can't just say we want the recession
to be over. We can't just radiate
light and love, and leave it at that. We have to channel that energy
into very hard, clear thinking about a new alternative.
In essence -- the current major debates in Washington and Brussels
focus on how to prevent the present
severe recession from turning into a new Great Depression. That is a
worthwhile set of near-term activities. But some
of us should be thinking about what it takes to get out of the
recession altogether, as soon as possible.
What kind of structural changes are needed? For example, if we "move
beyond capitalism," what do those
words even mean? What kind of alternative can we really implement and imagine?
One thing seems clear: simply getting rid of money is not the
solution, no matter how bold we are, if we are realistic
about this century. (This email is not the right place to speculate
about future centuries.) We absolutely need market mechanisms.
It was a great pleasure to have a three hour discussion on the
organization of electric power markets in May at Tsinghua
University, which some see as the real intellectual base of the
government of China. In a more detailed talk there,
I argued that we cannot maintain progress in these areas if we fall
into either of two extremes:
(1) The old idea of command allocations of goods, not based on
feedback or consumer choices, without prices;
(2) market fundamentalism, which makes the crazy error of imagining
that ANY Nash equilibrium (outcome of a market process)
is a Pareto optimum (win-win, most efficient overall possibility).
We had intense critical and self-critical discussions of many points
in those three hours, but I did not see any discussion
or debate at all about this basic point. The need for RATIONAL MARKET
DESIGN, to make outcomes
more Pareto optimal, was a common basis.
Of course, it helped that the people at Tsinghua University were all
sophisticated in mathematics.
For example, they all knew that the ancient input-output methods used
in the Soviet Union
years ago are totally obsolete. They were bad linear approximations,
caused in part by primitive computers.
Electric power - one of the leading sectors for economic progress --
has turned many old ideas on their head,
and teaches us many lessons about how to think, when building real new
systems that actually work.
H.G. Wells would be delighted.
In most of the US, the choice of electric power generators and
consumers and transmission is decided,
hour by hour, by a central regional authority, based on a central
computer program. Instead of input-output analysis, they use mixed
integer linear programming (MILP). From one viewpoint, this is far
more socialistic (and scientific) than anything the Soviet Union ever
did: commands go out to all producers of power all over a huge region,
instructing them every five minutes exactly how much electricity to
produce in that five minute interval, all computed by a gigantic
computer program running in a central location, linked
to the planning system for multiyear investments in generation and
transmission as well. Yet the inputs to that computer program are
the bids and preferences of generators and consumers; in essence, the
computer program IS the market. Careful studies
of auctions and gaming and how to avoid monopoly conspiracies were key
parts of the design of the computer program,
integrated with the analysis of optimization algorithms. And there are
efforts to improve and upgrade these kinds of computer algorithms, to
support better and more rational investment decisions in this sector.
There are even some "virtual bids"
which allow financial people to act in this sector, but carefully
designed to make the impacts beneficial.
(There are a few wrinkles still present here and there, like the
California hour-ahead market, but they are working to iron them out.)
One crucial lesson: "price signals" -- duality measures -- are
essential to such optimization programs. From the mathematics,
we cannot escape prices. That part of capitalism we cannot escape in
this century (and again, I will not speculate beyond that here).
The question about prices is how to get them right, and how to develop
better algorithms.
===================================
But: what about the current global recession (at least in OECD and
many other nations)?
For example, could we do with money and interest rates what we have
already done with electricity,
by finding a way to use computer algorithms to avoid "Nash losses" and
"monopoly losses" and "gaming losses" in international transactions,
with inputs from independent players which still respect their
independence and solve the multiplayer Pareto
optimization problem? The MILP computer tools are not powerful enough,
since they do not have a way to
represent risk/uncertainty, but new algorithms are becoming available
which do. This is an interesting subquestion to keep in mind.
Perhaps it could even be a distinct thread, for those who want to set
up a separate thread.
BUT -- I think we are called now to focus on developing a more
concrete (yet more complete and holistic) understanding
of the current recession. We need to grope towards the kind of
understanding which better supports concrete hopes and visualization.
The financial crisis today reminds me a lot of the global energy
problems, which I claim to understand quite clearly now -- after
40 years of working hard to see them more clearly, with jobs which
made it possible to focus very deeply on all aspects,
all the way from quantum physics to legislation and politics (even
though no one on earth has "solved" the last two).
It is hard for me to remember what it is like not to see the issues
clearly... on energy... but for the world
recession, it is easy enough, since it is clear that neither I nor
anyone else really sees the full challenge clearly.
Again -- I am talking about the challenge of what changes we would
need, in the shortest time at minimum pain, to get out of the
recession altogether, and not just solve the firefighting problem
which the President is discussing today ten minutes from here.
A key part of developing that understanding is to partition the
problem into manageable pieces... at least to begin... and
to learn which variables to focus on and how, to get at least a
first-order understanding of the dynamics.
For the recession, I would propose that we decompose the problems as
follows, in our early thinking:
(1) What would be the "perfect" solution, say, for the US or EU alone,
if they did not have to worry at all about capital inflows
and the supply of oil and things like that? What is the "one player
optimal solution/structure"?
(Many of the discussions in Washington and Brussels tend to assume
that implicitly, or represent the rest of the world
as a few gross constraints.)
(2) How can we address the crucial and unpleasant fact that the
nations of the world are stuck in a situation
where the "Nash equilibrium" -- the outcome if we each optimize
separately -- is far inferior to the "Pareto optimum,"
what we could get to if we truly cooperated at the highest possible level?
Crudely -- it seems to me that the global Pareto optimum probably
would involve "escaping from the recession overnight."
As per Obama's statement -- this pain is probably unnecessary, in my
view. But it also seems to me that every nation
on earth is heavily constrained by international factors (the kind of
pain which Latin America has a great of experience with,
studied by first-rate economists the rest of the world needs to study
more), such that the Nash equilibrium today
most likely IS what Obama may be hoping for today... a return to the
safe 10% unemployment of a few months ago,
without a new Great Depression, without a vast liquidation of public
schools, with a gradual return to earlier conditions
over 4-12 years.
I would expect Rosa to ask - what about the human and cultural
dimensions? They are hugely important too, but
this email is already long enough... I certainly would day that
aberrated thinking encouraged by people like Rupert Murdoch and
excessive concentrations of power in general are major reasons why
Obama is in danger of ending up with much worse than what he hopes for
today... I did notice Arnoldo's recent mention of Hobbes, whom I have
been thinking about a lot myself this past year
(or 3 years?). I do want to discuss some mathematical aspects of the
cultural side... but not in this email.
A new out of the box international approach would mainly involve (2).
The European Union has actually faced the same issues as (2), inside
its borders -- as in Greece versus Germany.
In the Financial Times, Jeffrey Sachs had a very important article on
Greece which I mentioned before to a few of you,
which is a crucial piece of the puzzle. But let me briefer here...
Both for Greece and for the US, the key question is: "Can we count on
interest rates staying low enough that
they have the ability to get out of the recession, at least eventually?"
Complex as the world economy is, we could do a decent first-order
mathematical analysis (by computer or in our heads,
especially if we can implement algorithms in our heads) ... by
modeling the global economy
as a system made up of very complex "nation" components, with only
four variables connecting them --
state bond interest rates, currency exchange rates, money flows, and
aggregate trade flows.
What is the minimal system to keep those 4 from going nuts? Four
numbers by a few hundred nations sounds
much smaller than what we do with electricity every five minutes now...
If the international system could somehow must keep these four
variables (especially interest rates) from "going nuts" and
from forcing us into accepting recession within each nation, and if we
all could really trust the system to do this,
then ... it may be that each nation would have more out-of-the-box
options available to get out
of the recession in a mere year or two, without waiting 4-12, and
without risk of a true new Great Depression II.
In sum: that's a slightly more focused version of task (2). But of
course, task (1) also takes some
real thought as well. Balances BETWEEN groups in a nation can be
similar in a way to balances
across them.
The Financial Times has reported some new thinking about Greece, which
begins to reflect Sachs's crucial insights,
but have they gone deep enough here into what it takes to do the best
one can do with the Greece situation, on its own
and to conceive the more general principles to use here which could be
generalized and perhaps even mathematicized
for the global system?
It is so ironic that we heard so much enthusiasm about the coming
crisis of capitalism in Rhodos a few years ago --
right in Greece!
And so many concrete factors need to be assimilated here... for
example, some Greeks tell me that it is not the tax rates but
the degree of tax compliance that would be most effective to address
right now...
=======
All for now.
Please forgive the length of this ... and the gross incompleteness,
which I freely admit...
but the questions are important. I hope that others will be able to do
more justice to them than I have.
Best of luck,
Paul
========================================================================
==============================================================
Since avoiding crazy interest rates is a key requirement for a
new, less depression-prone world system, the question naturally arises --
what SHOULD interest rates be, in a sustainable world?
Of course, there is the prime guaranteed interest rate (which state
borrowing should
be based on if possible), the interest rate for cases with zero
probability of default,
and the many other cases which can be more local and low-level.
In the Journal Energy, back in 1990 or so, I argued for an "ethical
interest rate."
In a sustainable equilibrium economy, a real interest rate of ZERO is
the interest rate
which would express an ethical decision that future lives are just as
important as present lives,
and should not be discounted. Thus it is perfectly reasonable to think
about zero real interest rates
for a long-term situation, not only for the period of recovery from
recession, as now.
But when there is growth in real income per capita, linked to new
investment opportunities,
an ethical interest rate (as discussed more in that paper) would at
times call for more, and the system should accommodate these kinds of
variations. (The idea was roughly to assume something like utility
functions
of the form ((1-r)**t)*log(Y), where the underlying interest rate r is
pushed to zero, but the logarithmic relation between income and
utility can justify some borrowing from the future WHEN THE FUTURE IS
RICHER. )
While my email mainly addressed OECD and others in recession in the
shadow of OECD, Brazil and China
also face major economic challenges. The President of Brazil has
laudably supported a goal of lower interest rates,
which would hopefully help people looking for better housing in
Brazil, but faces challenges in how to achieve that goal
in the complex world we are now in. China's new economic challenges
are entangled with other challenges,
in a complex way I have yet to meditate on enough to see simple
structure... though the energy aspects are clear enough.
==========================================
===========================================
Technical addendum:
Economists have known for years that market efficiency theorems like Arrow's
make many key simplifying assumptions. To come to terms with reality, we need to understand
these assumptions, how they are violated, and how to move on.
Long ago, Joan Robinson told us the basics about imperfect competition and monopoly sorts of effects. In another email on Greece, discussing the true meaning of Sachs' observations, I talked about reflexive phenomena, particularly as we find there are multiple solutions to the equations across time. (Hey, people like Feinberg have worried about the same thing in quantum field theory!)
One other thing is increasingly important. It is important that "information does not obey the assumptions for private goods." As we enter an information economy, that's important -- but how?
The designs for even the most basic (spatially complex, temporally unstructured) adaptive critic system involve feedback signals which are like price signals, as I just noted. BUT... even the simplest require TWO flows, one for derivatives of value and one for derivatives of error. When humans and an economy MIX the two, we end up
with a kind of conflict of interest situation which... blows it...
and the really nasty problems in Washington DC this very day are in some ways just a reflection of this larger, subtler and relatively stubborn problem.
Traditional conflict of interest laws -- like feeble campaign finance reforms,
watered down by courts "living in another world" under pressure of well-heeled corporate lawyers... don't begin to restabilize the system.
... BUt... all for now...
Your two recent messages both create great positive warm feelings...
2011/7/3 Rosa @ Brazil:
> Look at that
>
> http://www.youtube.com/watch?v=qOP2V_np2c0
My computer would not let me play the video here, but the current
crisis of the world economy
is easy enough to see directly now for anyone with open eyes and full
media access.
There is a lot of urgent economic firefighting going on in the White
House today, in the debate on the debt ceiling,
and in European banking circles, on the crisis of Greece. But we also
could use some bigger, more foresighted dialogue
on the question: do we need to be in this situation at all? Is there
some other way to think about the global economy which would
make the present recession unnecessary?
When I saw your announcement about a session on media and positive
visualization in the Catskills,
I felt very wistful that I don't see a way to connect to that event.
Email and meditation are as come as I come to
media. And the world economic situation makes it hard for me to
project positive thinking at this time.
Perhaps we need to create the vivid credible positive image first
before we can project it effectively.
So -- this all leads to the question: can we imagine a way of doing
things which makes
the world recession unnecessary?
President Obama said something like this a few months ago, roughly
like "Something isn't making sense here.
How can it be that we have the same resources we did before September
2008, we have people more willing to save for the future than before,
and people eager to work just as much as before... why can't we have
the same standard of living as we had just a few months ago, with the
same jobs for the same people doing the same things?" Are people
dying out there because we don't
have a good enough "dating service" between people who want to work
and people who want the stuff?
The Financial Times had a nice op-ed just a few days ago, by one of
their regular people, under a big picture of two sinking ships,
stressing how similar the problems are in the US and the EU.
Common sense suggests that the whole recession is unnecessary, if only
we were clear minded enough about how to
think out of the box. But how? We can't just say we want the recession
to be over. We can't just radiate
light and love, and leave it at that. We have to channel that energy
into very hard, clear thinking about a new alternative.
In essence -- the current major debates in Washington and Brussels
focus on how to prevent the present
severe recession from turning into a new Great Depression. That is a
worthwhile set of near-term activities. But some
of us should be thinking about what it takes to get out of the
recession altogether, as soon as possible.
What kind of structural changes are needed? For example, if we "move
beyond capitalism," what do those
words even mean? What kind of alternative can we really implement and imagine?
One thing seems clear: simply getting rid of money is not the
solution, no matter how bold we are, if we are realistic
about this century. (This email is not the right place to speculate
about future centuries.) We absolutely need market mechanisms.
It was a great pleasure to have a three hour discussion on the
organization of electric power markets in May at Tsinghua
University, which some see as the real intellectual base of the
government of China. In a more detailed talk there,
I argued that we cannot maintain progress in these areas if we fall
into either of two extremes:
(1) The old idea of command allocations of goods, not based on
feedback or consumer choices, without prices;
(2) market fundamentalism, which makes the crazy error of imagining
that ANY Nash equilibrium (outcome of a market process)
is a Pareto optimum (win-win, most efficient overall possibility).
We had intense critical and self-critical discussions of many points
in those three hours, but I did not see any discussion
or debate at all about this basic point. The need for RATIONAL MARKET
DESIGN, to make outcomes
more Pareto optimal, was a common basis.
Of course, it helped that the people at Tsinghua University were all
sophisticated in mathematics.
For example, they all knew that the ancient input-output methods used
in the Soviet Union
years ago are totally obsolete. They were bad linear approximations,
caused in part by primitive computers.
Electric power - one of the leading sectors for economic progress --
has turned many old ideas on their head,
and teaches us many lessons about how to think, when building real new
systems that actually work.
H.G. Wells would be delighted.
In most of the US, the choice of electric power generators and
consumers and transmission is decided,
hour by hour, by a central regional authority, based on a central
computer program. Instead of input-output analysis, they use mixed
integer linear programming (MILP). From one viewpoint, this is far
more socialistic (and scientific) than anything the Soviet Union ever
did: commands go out to all producers of power all over a huge region,
instructing them every five minutes exactly how much electricity to
produce in that five minute interval, all computed by a gigantic
computer program running in a central location, linked
to the planning system for multiyear investments in generation and
transmission as well. Yet the inputs to that computer program are
the bids and preferences of generators and consumers; in essence, the
computer program IS the market. Careful studies
of auctions and gaming and how to avoid monopoly conspiracies were key
parts of the design of the computer program,
integrated with the analysis of optimization algorithms. And there are
efforts to improve and upgrade these kinds of computer algorithms, to
support better and more rational investment decisions in this sector.
There are even some "virtual bids"
which allow financial people to act in this sector, but carefully
designed to make the impacts beneficial.
(There are a few wrinkles still present here and there, like the
California hour-ahead market, but they are working to iron them out.)
One crucial lesson: "price signals" -- duality measures -- are
essential to such optimization programs. From the mathematics,
we cannot escape prices. That part of capitalism we cannot escape in
this century (and again, I will not speculate beyond that here).
The question about prices is how to get them right, and how to develop
better algorithms.
===================================
But: what about the current global recession (at least in OECD and
many other nations)?
For example, could we do with money and interest rates what we have
already done with electricity,
by finding a way to use computer algorithms to avoid "Nash losses" and
"monopoly losses" and "gaming losses" in international transactions,
with inputs from independent players which still respect their
independence and solve the multiplayer Pareto
optimization problem? The MILP computer tools are not powerful enough,
since they do not have a way to
represent risk/uncertainty, but new algorithms are becoming available
which do. This is an interesting subquestion to keep in mind.
Perhaps it could even be a distinct thread, for those who want to set
up a separate thread.
BUT -- I think we are called now to focus on developing a more
concrete (yet more complete and holistic) understanding
of the current recession. We need to grope towards the kind of
understanding which better supports concrete hopes and visualization.
The financial crisis today reminds me a lot of the global energy
problems, which I claim to understand quite clearly now -- after
40 years of working hard to see them more clearly, with jobs which
made it possible to focus very deeply on all aspects,
all the way from quantum physics to legislation and politics (even
though no one on earth has "solved" the last two).
It is hard for me to remember what it is like not to see the issues
clearly... on energy... but for the world
recession, it is easy enough, since it is clear that neither I nor
anyone else really sees the full challenge clearly.
Again -- I am talking about the challenge of what changes we would
need, in the shortest time at minimum pain, to get out of the
recession altogether, and not just solve the firefighting problem
which the President is discussing today ten minutes from here.
A key part of developing that understanding is to partition the
problem into manageable pieces... at least to begin... and
to learn which variables to focus on and how, to get at least a
first-order understanding of the dynamics.
For the recession, I would propose that we decompose the problems as
follows, in our early thinking:
(1) What would be the "perfect" solution, say, for the US or EU alone,
if they did not have to worry at all about capital inflows
and the supply of oil and things like that? What is the "one player
optimal solution/structure"?
(Many of the discussions in Washington and Brussels tend to assume
that implicitly, or represent the rest of the world
as a few gross constraints.)
(2) How can we address the crucial and unpleasant fact that the
nations of the world are stuck in a situation
where the "Nash equilibrium" -- the outcome if we each optimize
separately -- is far inferior to the "Pareto optimum,"
what we could get to if we truly cooperated at the highest possible level?
Crudely -- it seems to me that the global Pareto optimum probably
would involve "escaping from the recession overnight."
As per Obama's statement -- this pain is probably unnecessary, in my
view. But it also seems to me that every nation
on earth is heavily constrained by international factors (the kind of
pain which Latin America has a great of experience with,
studied by first-rate economists the rest of the world needs to study
more), such that the Nash equilibrium today
most likely IS what Obama may be hoping for today... a return to the
safe 10% unemployment of a few months ago,
without a new Great Depression, without a vast liquidation of public
schools, with a gradual return to earlier conditions
over 4-12 years.
I would expect Rosa to ask - what about the human and cultural
dimensions? They are hugely important too, but
this email is already long enough... I certainly would day that
aberrated thinking encouraged by people like Rupert Murdoch and
excessive concentrations of power in general are major reasons why
Obama is in danger of ending up with much worse than what he hopes for
today... I did notice Arnoldo's recent mention of Hobbes, whom I have
been thinking about a lot myself this past year
(or 3 years?). I do want to discuss some mathematical aspects of the
cultural side... but not in this email.
A new out of the box international approach would mainly involve (2).
The European Union has actually faced the same issues as (2), inside
its borders -- as in Greece versus Germany.
In the Financial Times, Jeffrey Sachs had a very important article on
Greece which I mentioned before to a few of you,
which is a crucial piece of the puzzle. But let me briefer here...
Both for Greece and for the US, the key question is: "Can we count on
interest rates staying low enough that
they have the ability to get out of the recession, at least eventually?"
Complex as the world economy is, we could do a decent first-order
mathematical analysis (by computer or in our heads,
especially if we can implement algorithms in our heads) ... by
modeling the global economy
as a system made up of very complex "nation" components, with only
four variables connecting them --
state bond interest rates, currency exchange rates, money flows, and
aggregate trade flows.
What is the minimal system to keep those 4 from going nuts? Four
numbers by a few hundred nations sounds
much smaller than what we do with electricity every five minutes now...
If the international system could somehow must keep these four
variables (especially interest rates) from "going nuts" and
from forcing us into accepting recession within each nation, and if we
all could really trust the system to do this,
then ... it may be that each nation would have more out-of-the-box
options available to get out
of the recession in a mere year or two, without waiting 4-12, and
without risk of a true new Great Depression II.
In sum: that's a slightly more focused version of task (2). But of
course, task (1) also takes some
real thought as well. Balances BETWEEN groups in a nation can be
similar in a way to balances
across them.
The Financial Times has reported some new thinking about Greece, which
begins to reflect Sachs's crucial insights,
but have they gone deep enough here into what it takes to do the best
one can do with the Greece situation, on its own
and to conceive the more general principles to use here which could be
generalized and perhaps even mathematicized
for the global system?
It is so ironic that we heard so much enthusiasm about the coming
crisis of capitalism in Rhodos a few years ago --
right in Greece!
And so many concrete factors need to be assimilated here... for
example, some Greeks tell me that it is not the tax rates but
the degree of tax compliance that would be most effective to address
right now...
=======
All for now.
Please forgive the length of this ... and the gross incompleteness,
which I freely admit...
but the questions are important. I hope that others will be able to do
more justice to them than I have.
Best of luck,
Paul
========================================================================
==============================================================
Since avoiding crazy interest rates is a key requirement for a
new, less depression-prone world system, the question naturally arises --
what SHOULD interest rates be, in a sustainable world?
Of course, there is the prime guaranteed interest rate (which state
borrowing should
be based on if possible), the interest rate for cases with zero
probability of default,
and the many other cases which can be more local and low-level.
In the Journal Energy, back in 1990 or so, I argued for an "ethical
interest rate."
In a sustainable equilibrium economy, a real interest rate of ZERO is
the interest rate
which would express an ethical decision that future lives are just as
important as present lives,
and should not be discounted. Thus it is perfectly reasonable to think
about zero real interest rates
for a long-term situation, not only for the period of recovery from
recession, as now.
But when there is growth in real income per capita, linked to new
investment opportunities,
an ethical interest rate (as discussed more in that paper) would at
times call for more, and the system should accommodate these kinds of
variations. (The idea was roughly to assume something like utility
functions
of the form ((1-r)**t)*log(Y), where the underlying interest rate r is
pushed to zero, but the logarithmic relation between income and
utility can justify some borrowing from the future WHEN THE FUTURE IS
RICHER. )
While my email mainly addressed OECD and others in recession in the
shadow of OECD, Brazil and China
also face major economic challenges. The President of Brazil has
laudably supported a goal of lower interest rates,
which would hopefully help people looking for better housing in
Brazil, but faces challenges in how to achieve that goal
in the complex world we are now in. China's new economic challenges
are entangled with other challenges,
in a complex way I have yet to meditate on enough to see simple
structure... though the energy aspects are clear enough.
==========================================
===========================================
Technical addendum:
Economists have known for years that market efficiency theorems like Arrow's
make many key simplifying assumptions. To come to terms with reality, we need to understand
these assumptions, how they are violated, and how to move on.
Long ago, Joan Robinson told us the basics about imperfect competition and monopoly sorts of effects. In another email on Greece, discussing the true meaning of Sachs' observations, I talked about reflexive phenomena, particularly as we find there are multiple solutions to the equations across time. (Hey, people like Feinberg have worried about the same thing in quantum field theory!)
One other thing is increasingly important. It is important that "information does not obey the assumptions for private goods." As we enter an information economy, that's important -- but how?
The designs for even the most basic (spatially complex, temporally unstructured) adaptive critic system involve feedback signals which are like price signals, as I just noted. BUT... even the simplest require TWO flows, one for derivatives of value and one for derivatives of error. When humans and an economy MIX the two, we end up
with a kind of conflict of interest situation which... blows it...
and the really nasty problems in Washington DC this very day are in some ways just a reflection of this larger, subtler and relatively stubborn problem.
Traditional conflict of interest laws -- like feeble campaign finance reforms,
watered down by courts "living in another world" under pressure of well-heeled corporate lawyers... don't begin to restabilize the system.
... BUt... all for now...
Thursday, July 7, 2011
figuring out what the debt ceiling means
Since the government must prepare for another possible shutdown on August 2,
there have been many interesting discussions of what might happen.
It's 'way different from the continuing resolution situation, and it
certainly affects NASA.
It's also 'way different from what you may have heard.
http://powerwall.msnbc.msn.com/politics/bring-on-the-constitutional-crisis-1694085.story
What happens when it is mathematically IMPOSSIBLE for the President to
comply with three conflicting laws at once (as at present, considering
the future!):
1 -- The requirement to fund federal activities as specified under the
Continuing Resolution
2 -- The requirement to adhere to the debt ceiling
3 -- The requirement to honor obligations to pay interest on bonds,
and to pay social security and such
It seems that the Constitution (see URL above) absolutely PROHIBITS
the President from stopping
payments on the national debt or on pensions from the federal
government. When 1 and 2 conflict,
people tell me the President has a free hand to decide which mix of
the laws to follow. UNILATERALLY
he is free to define and follow any plan he chooses in this space,
until and unless new laws get passed all the way --
even if one doesn't pass because he chooses to veto it.
Thus it seems he will be able to unilaterally cancel any expenditures
or procurements under the continuing resolution that he does not
like. Like Ares residua.
It looks as if he will be able to continue borrowing anyway, up to
what it takes to fulfill 1, but it would look a lot better if he
made very deep emergency type cuts across the board in the CR
expenditures so as to minimize (and if possible zero out)
the borrowing, perhaps by phasing out some things...
Some people might even like what he chooses; some might not. And he
would still retain the right to veto
possible debt deals which he views as even worse than that outcome.
It reminds me a little of EPA regulation of CO2 emissions underway
right now, under the Clean Air Act.
Who knows?
I wish I didn't have to think about such things... and will try not to...
======================
By the way, a friend said: "When two laws conflict, the courts will give leeway to the President to choose or interpolate as best he can, until new laws are passed." Thinking it over, I wondered: wouldn't the most recent law supersede the older? Thus wouldn't the President be OBLIGED to adhere to the continuing resolution spending levels, and thus obliged to keep borrowing money? But perhaps the friend knows more. Back in 2009, when I looked hard at some recent laws, and the Office of General Counsel of the Senate looked over a draft I was doing myself for Senator Specter,
it was clear that they needed EXPLICIT statements about how past laws are to be changed or amended; in other words, the new code of laws is just the old one, plus the new law, minus what is explicitly changed by the new law. In this case, I guess both
laws -- the CR and the debt ceiling act -- are both on the books, regardless of when they were passed.
there have been many interesting discussions of what might happen.
It's 'way different from the continuing resolution situation, and it
certainly affects NASA.
It's also 'way different from what you may have heard.
http://powerwall.msnbc.msn.com/politics/bring-on-the-constitutional-crisis-1694085.story
What happens when it is mathematically IMPOSSIBLE for the President to
comply with three conflicting laws at once (as at present, considering
the future!):
1 -- The requirement to fund federal activities as specified under the
Continuing Resolution
2 -- The requirement to adhere to the debt ceiling
3 -- The requirement to honor obligations to pay interest on bonds,
and to pay social security and such
It seems that the Constitution (see URL above) absolutely PROHIBITS
the President from stopping
payments on the national debt or on pensions from the federal
government. When 1 and 2 conflict,
people tell me the President has a free hand to decide which mix of
the laws to follow. UNILATERALLY
he is free to define and follow any plan he chooses in this space,
until and unless new laws get passed all the way --
even if one doesn't pass because he chooses to veto it.
Thus it seems he will be able to unilaterally cancel any expenditures
or procurements under the continuing resolution that he does not
like. Like Ares residua.
It looks as if he will be able to continue borrowing anyway, up to
what it takes to fulfill 1, but it would look a lot better if he
made very deep emergency type cuts across the board in the CR
expenditures so as to minimize (and if possible zero out)
the borrowing, perhaps by phasing out some things...
Some people might even like what he chooses; some might not. And he
would still retain the right to veto
possible debt deals which he views as even worse than that outcome.
It reminds me a little of EPA regulation of CO2 emissions underway
right now, under the Clean Air Act.
Who knows?
I wish I didn't have to think about such things... and will try not to...
======================
By the way, a friend said: "When two laws conflict, the courts will give leeway to the President to choose or interpolate as best he can, until new laws are passed." Thinking it over, I wondered: wouldn't the most recent law supersede the older? Thus wouldn't the President be OBLIGED to adhere to the continuing resolution spending levels, and thus obliged to keep borrowing money? But perhaps the friend knows more. Back in 2009, when I looked hard at some recent laws, and the Office of General Counsel of the Senate looked over a draft I was doing myself for Senator Specter,
it was clear that they needed EXPLICIT statements about how past laws are to be changed or amended; in other words, the new code of laws is just the old one, plus the new law, minus what is explicitly changed by the new law. In this case, I guess both
laws -- the CR and the debt ceiling act -- are both on the books, regardless of when they were passed.
Friday, April 1, 2011
new white house policy and breaking dependence on oil
This week, the President gave a major speech on breaking our dependence on imported oil,
linked to the release of a new energy policy to back it up:
http://www.whitehouse.gov/sites/default/files/blueprint_secure_energy_future.pdf
OF COURSE, when I give my reactions to this, it is DOUBLY and TRIPLY true that I am just giving personal
and tentative (if deeply grounded) impressions -- not the views of anyone else, nor anything I would want to be held to.
Preliminary impressions.
First, to review... I really like to focus a lot of energy on the question:
"How could we ZERO OUT all OECD DEPENDENCE on fossil oil in 25-30 years, at the lowest possible overall cost (or maximum profit)
to OECD?" Engineers commonly like very well-defined mathematical questions..
The question is not how to zero out the USE of fossil oil, but how to zero out the DEPENDENCE ... to set up so that our economy can continue to grow even if a sudden zeroing out of fossil oil should occur. And it's not so much a matter of imports, as policies like "drain America first" have their
limits a lot sooner than 25-30 years in the future. In any case, it's interesting to ASK the question, as seriously as we can, even when we realize we will
have other things to factor in when it comes to real policy.
Some accounts of the President's speech said: (1) this really was a solid focus on the issue of breaking
our dependence on oil, with new directions doing as much as one could imagine doing; and (2) but it wasn't much, because
there really isn't much one COULD do -- aside, perhaps, from what's already been done.
Re (1): that's not what this really was. Pages 15-24 out of 44 pages were the parts on independence form oil; the rest was mainly general energy policy.
Re(2): a mixed bag. (Though in the real world, getting "30% of reality" is a high score, to be fully supported, respected and appreciated...
when that's all it is.)
I had really strong mixed emotions a week or two ago, when CNN presented a new picture...
"Gee, oil really is heading back to $1490/barrel or so, that really was pretty obvious and predictable a couple of years ago,
wasn't it? And now economic recovery is teetering. Will we start to slide down the right slope, slowly building momentum as it seemed
just recently... or... well... the oil price rise is beginning to look just enough to send us slightly teetering in the other direction, and maybe building up momentum the wrong way." Indeed. Most of a trillion dollars per year in coming import bills is not just a second order perturbation to the economic
situation. I was glad to hear people starting to wake up on this...
But then: "But of course, there really isn't much we could do about this. And the President will do his very best, and it won't be much.
The answer is electric type cars (like plugins) but that will take 30 years, and in the meantime..."
Pain, pain, pain. Sure, it would take 20-25 years to reasonably get to ZERO dependence on fossil oil, but
we could move very quickly in that direction much sooner than that, if we had the will and the clarity of mind to do so,
and that in turn would have large immediate effects on futures markets, on tight balances between supply and demand, and on
the direction of world oil prices in the next few years. The Financial Times reported today that the Saudis are
already having troubles trying to keep up with what Libya has turned down, and to keep world oil prices low
enough to avoid really huge world economic problems.
Pages 14-24 really don't capture what could be done with a maximally vigorous policy, but there are some good parts.
What I like most is on page 22, the commitment to try to continue the "existing $7,500 tax credit" as an easy upfront rebate, like
what worked so well in finding takers in the cash for clunkers program. Incentives for "pluggable electric vehicles"
(PEV -- new IEEE jargon, to include PHEVs, EVs and FCEVs) are one of the really important and economically rational vehicles for
policy here - a key part of the answer to the question I started with, if you accept that question.
In fact, it would be really great if Congress could somehow pass a kind of semi-permanent entitlement like that, for PEVs
which qualify for tax incentives. In an ideal world... I would love to see that filled in with the same qualification rules and
sunset rule I proposed in the vehicle tax credit section of the oil bill written for Specter (posted at www.werbos.com/oil.htm).
If I were a Senator, I would vote for a clean measure to do that, period. It would be great.
My only concern about that idea is politics. I may be wrong... but I don't think that that formulation has the best chance of
making it through the House this year. The tax incentive version my not be quite so compelling to many people as the
semi-permanent rebate by entitlement, but it's almost as good, and it's a whole lot closer to having some hope for it.
There are a lot of folks who believe that tax breaks and tax reductions are more acceptable than new line items in the federal budget.
What's more, I haven't seen the 2012 budget discussion which this paragraph refers to. I wouldn't be surprised if it's like
the Electrification Coalition thing or Reid's last Pickens bill, which would be a one time limited appropriation creating far too little
predictability for auto companies thinking of investing in this area. And reopens the issue year by year, unlike the better situation that
oil company tax breaks have. (Better for THEM.) Still, I suppose there could be some consumer value in saying "one time sale ends on ..."
But then comes "rewarding communities" on the same page, which sounds like the big section of the Electrification Coalition proposal.
I worry about that all paying for favored municipalities to buy lots of Nissans to give away to friends, and -- worse -- spending lots
of money on Japanese standard "chademo" fast recharge stations which are a wasteful white elephant with no good future. I suppose Congress could
simply OK this and amend it with rules: (1) no giving away of cars; (2) no chademo stations -- all recharge stations must conform to levels 1, 2 or 3 of the
US electrical code, unless they provide ultrafast (10 minute) pulsed recharge. Under those restrictions, it could be very helpful.
I would be surprised if GM did not like this change (even though they may not be up yet on the new pulsed options).
===========
THE BIGGEST HOLE in my view is ... basically... seeming somewhat clueless on the potential for alternate liquid fuels,
ESPECIALLY IN THE NEXT FEW YEARS WHEN THINGS ARE URGENT AND WE AREN'T SO ELECTRIC YET.
It is a curious situation when folks like the White House and Congressman Waxman lecture IEEE folks that we should
appreciate more how Electricity Is the Way. Actually, maybe it's good that we get into a kind of honesty situation sometimes.
(IEEE does run lots of peer reviews, after all.) PEVs are ONE of the two key pillars of our best, clearest chance of getting to zero oil dependency
at a net profit. The other is alternate liquid fuels -- largely but not exclusively nonfood biofuels.
To have a quick impact, we should be doing BOTH things.
It seems that a lot of folks STILL don't understand that fuel flexibility and alternate liquid fuels are not really ALTERNATIVES to maximum
rational use of electricity, at the vehicle or policy level. That's really sad. Even under the president's new plan,
we are missing huge opportunities to move a whole lot faster on the alternative liquid fuels. Some are low cost, medium impact..
which is a lot bigger than than the very limited biomass benefits I see in this blueprint.
For example... I see no reason why the US government should not give ABSOLUTE preference in procurement to certified GEM-flexible vehicles (whether conventional or plug-in, which is a different matter) over all other vehicles, STARTING NOW.
And it wouldn't cost much to set up a certification program, where all manufacturers are required to put very bright, clear
decals over the refueling port on the car, making it clear which category of flexibility the car is warranted for.
And, as I noted before, replacing RFS with properly tuned LCFS could help a huge amount, even if the difference seems "just technical."
Beyond that... the talk by Arun Majumdar at the ITIF briefing at Rayburn a few weeeks ago makes me feel better about
the ARPA-E budget vehicle... blender pumps could be good, but why not have GEM-flexible blender pumps,
and why not use tax incentives to let industry install as many as they choose to. (I am not sure what it means that the Administration will help install the pumps.) Lots of crucial R&D opportunities beyond the scope of this blueprint, and I'm not sure of when they will be followed on or how...
It's really important to understand with biofuels that the cost and availability of the technology depends a lot on what the technology MAKES.
Flexibility in the cars makes it possible to use biofuels which are easier to make -- which helps with cost, with moving fast, and with
efficiency and sustainability.
Have some comments about the graph on page 21, but ...
============================
=======================================
Yesterday, I stressed that FUEL FLEXIBILITY (alternate liquid fuels) and plug-in hybrid cars
are two key, COMPLEMENTARY technologies that would let the world be independent from fossil oil
in 25 years or so, at a net profit. I talked about the key near-term actions we could take at low cost or no cost
to accelerate fuel flexibility and alternate liquid fuels much faster than what this week's White House energy
blueprint discusses.
But what about the plug-in cars?
On another list, someone said that plug-in cars would cause a huge increase in world electricity demand,
creating a massive new challenge there.
NOT SO!
World electricity supply is an important challenge already (as folks in Japan can feel in their very flesh this week!),
but massive dpeloyment of PHEVs would not do much to change that challenge.
Here is why...
x wrote:
As for the ~500 GW demand, please refer to this graph from my 2009 paper with data taken from EIA data sources for 2007 - 4 years old data.
There have been major serious economic studies of these questions which came to different conclusions.
I cite a number of them (including URLS) in a book chapter I had published last year or so,
Technological Solutions for Energy Security and Sustainability.
But as I said, there is also the study by Duke power.
It's important to discuss some explicit arithmetic to keep this straight.
If one tries to estimate the need for additional electricity in kwh by assuming that the electricity must contain the same BTU as the gasoline,
one will overestimate the requirement for kwh many, many times over.
Most of the gasoline used in cars today is used in conventional cars. Largely because of regenerative braking and because
of the gasoline engine operating mainly at nominal power (when operating at all), efficient heavy hybrids already cut the need for
gasoline in half. Even so, the little gasoline engine in such hybrids is only 30% efficient; in all-electric mode,
in a plug-in hybrid, you really get 90% efficiency from the BTU to torque, versus 30%. Thus PHEVs in all-electric mode
only need 1/6 as many BTUs of electricity per mile as the corresponding conventional car would need of BTUs of gasoline.
What's more -- the game plan a lot of us have been focusing on (e.g. the IEEE white paper on plug-in hybrids)
envisions FUEL-FLEXIBLE PHEV20, roughly -- cars with a 20-mile all-electric range, for which IEEE estimates
the average user would only get half the miles from electricity. If you plug that case in, you see:
1. Total demand for liquid fuel gets reduced by 75% (half because of hybrid efficiency, half because of miles
powered by electricity) -- deep enough that we can live without oil imports; and
2. The required BTU of electricity are now (1/2)*(1/6) of the BTUs we now use of gasoline.
A factor of 12 really changes things.
What's more, it's better than it sounds, because the kwh would mainly come at night, as people plug in at home.
This is the kind of thing Duke Power studied in detail. As one of the largest electric power systems in the US,
Duke really knows its numbers quite well, and can estimate the impacts on the power grid
a whole lot more than the amateurs one learns about from the usual green literature. It is no surprise that
they concluded there would be no additional burden on the grid whatsoever (and even some benefit to the grid, if it's
done right), and little or no need for more generating capacity; only a need to utilize existing capacity more fully.
============================
You also asked about costs of the cars, which is quite fair, and not trivial. A lot of the important true cost data is closely held
proprietary information. A lot of the numbers batted around in the press are grossly distorted by
partisan advocacy nonsense. But some things are well known.
A few years ago, the Society for Automotive Engineers put out an estimate of what it costs Toyota to make the Prius
high-mpg hybrid, above and beyond the cost of the correspondng conventional car. Once the technology settled down
to some degree (5 years ago?), Toyota was certainly running a serious profit on these cars, and it's clear that SAE was right -- the
incremental cost was no more than $3000. SAE said -- $2000 of that is battery (NiMH) and $1000 power electronics.
http://www.toyota.com/prius-hybrid/
So for $3000 extra, you cut your gasoline use in half. People tell me that that breaks even for the average customer at about
$4 per gallon.
But what about the plug-in hybrids (PHEV) about to hit the market? Those numbers are harder to get. One may speculate:
are the initial price tags biased low (as the Prius hybrid was initially) to "buy experience," or are they biased high
(to get additional profit due to demand exceeding supply, or, more generously, to ration the limited number of vehicles available
the first year)? I lean towards the latter, especially since there is evidence of demand exceeding supply... of one-year waiting lists for people to get
the next vehicle, and so on.
A few months ago, GM put out an analysis saying that the Chevy Volt (a PHEV40, much more all-electric range than the new PHEV15
Prius plug-in) becomes break-even for the customer when gasoline gets to $5 per gallon. The Prius PHEV15 will have an initial cost of about $32,000,
more than $10,000 more than the normal Prius hybrid. (Though there will be that $7,500 tax credit for about a year, if I understand correctly.)
Why so high?
In fact... the Prius PHEV only uses a 6kwh battery. Any of us can buy a 10kwh auto-grade battery from Thunder Sky for $2,000
this year, at retail. It's weird how many people proudly cite (5 year old?) authoritative documents (even a White House document
this week) saying that it costs $1000 per kwh... so why should I believe a lowly store where I just walk in and buy it for $200
per kwh? Well, folks, my wife actually DID walk in and buy a couple, and they do work as advertized. They are sold
in many, many thousands today, and used in rugged, demanding transportation applications ... but they come from China.
I heard about them from folks in Delphi who checked them out and verified them years ago. And they have competitors who are probably just as good or better.
A few years back, I saw data that Japan, China and South Korea pretty much dominate the lithium battery production..
and GM is currently buying batteries from LG of Korea. So yes, if you buy a battery from DOE, it may well cost $1000 per kwh,
but GM is not so stupid. If the US government hobbles GM, we may simply end up buying whole cars from China instead of batteries.
(I mentioned that $21,000 BYD PHEV60. But has China thought of the possibility of exports? Don't laugh too loud.)
IN SUMMARY -- if we can get a PHEV20 for a battery cost of $2,000 -- the same as it cost with the old Prius hybrid,
which was already break even at $4/gallon with less fuel savings than the PHEV20 gets you -- how could it NOT break even at
$4 per gallon?
The obvious answer: the power electronics, the other half of the cost.
http://www.hevt.com/
But there have been really huge, verified breakthroughs in that area just this past year, from NSF-funded basic research,
validated by others. Power electronics is basically a matter of chips used to convert between AC and DC (and voltages).
That was not included in the GM $5 break-even estimate, but I suspect GM will catch up on this relatively soon.
I am certain Toyota was moving fast on this kind of stuff at least a few months ago. It basically cuts the power electronics costs in half,
immediately. The unit costs are mainly the costs of making chips -- a Moore's Law kind of thing.
So the technology is there, and with gas at $4 per gallon it should make the US a profit -- IF we deploy it. But the initial stages
are not so easy, especially when we came close to losing the auto industry altogether in the US a couple of years ago.
There is a real race between things that move us forward and economic things that could kill us altogether.
(The new power electronics also is associated with new motor control, which gets rid of the rare earths problem
with PHEVs. More details forthcoming in a paper on the fourth-generation intelligent power grid,
IEEE Computational Intelligence Magazine, August 2011.)
linked to the release of a new energy policy to back it up:
http://www.whitehouse.gov/sites/default/files/blueprint_secure_energy_future.pdf
OF COURSE, when I give my reactions to this, it is DOUBLY and TRIPLY true that I am just giving personal
and tentative (if deeply grounded) impressions -- not the views of anyone else, nor anything I would want to be held to.
Preliminary impressions.
First, to review... I really like to focus a lot of energy on the question:
"How could we ZERO OUT all OECD DEPENDENCE on fossil oil in 25-30 years, at the lowest possible overall cost (or maximum profit)
to OECD?" Engineers commonly like very well-defined mathematical questions..
The question is not how to zero out the USE of fossil oil, but how to zero out the DEPENDENCE ... to set up so that our economy can continue to grow even if a sudden zeroing out of fossil oil should occur. And it's not so much a matter of imports, as policies like "drain America first" have their
limits a lot sooner than 25-30 years in the future. In any case, it's interesting to ASK the question, as seriously as we can, even when we realize we will
have other things to factor in when it comes to real policy.
Some accounts of the President's speech said: (1) this really was a solid focus on the issue of breaking
our dependence on oil, with new directions doing as much as one could imagine doing; and (2) but it wasn't much, because
there really isn't much one COULD do -- aside, perhaps, from what's already been done.
Re (1): that's not what this really was. Pages 15-24 out of 44 pages were the parts on independence form oil; the rest was mainly general energy policy.
Re(2): a mixed bag. (Though in the real world, getting "30% of reality" is a high score, to be fully supported, respected and appreciated...
when that's all it is.)
I had really strong mixed emotions a week or two ago, when CNN presented a new picture...
"Gee, oil really is heading back to $1490/barrel or so, that really was pretty obvious and predictable a couple of years ago,
wasn't it? And now economic recovery is teetering. Will we start to slide down the right slope, slowly building momentum as it seemed
just recently... or... well... the oil price rise is beginning to look just enough to send us slightly teetering in the other direction, and maybe building up momentum the wrong way." Indeed. Most of a trillion dollars per year in coming import bills is not just a second order perturbation to the economic
situation. I was glad to hear people starting to wake up on this...
But then: "But of course, there really isn't much we could do about this. And the President will do his very best, and it won't be much.
The answer is electric type cars (like plugins) but that will take 30 years, and in the meantime..."
Pain, pain, pain. Sure, it would take 20-25 years to reasonably get to ZERO dependence on fossil oil, but
we could move very quickly in that direction much sooner than that, if we had the will and the clarity of mind to do so,
and that in turn would have large immediate effects on futures markets, on tight balances between supply and demand, and on
the direction of world oil prices in the next few years. The Financial Times reported today that the Saudis are
already having troubles trying to keep up with what Libya has turned down, and to keep world oil prices low
enough to avoid really huge world economic problems.
Pages 14-24 really don't capture what could be done with a maximally vigorous policy, but there are some good parts.
What I like most is on page 22, the commitment to try to continue the "existing $7,500 tax credit" as an easy upfront rebate, like
what worked so well in finding takers in the cash for clunkers program. Incentives for "pluggable electric vehicles"
(PEV -- new IEEE jargon, to include PHEVs, EVs and FCEVs) are one of the really important and economically rational vehicles for
policy here - a key part of the answer to the question I started with, if you accept that question.
In fact, it would be really great if Congress could somehow pass a kind of semi-permanent entitlement like that, for PEVs
which qualify for tax incentives. In an ideal world... I would love to see that filled in with the same qualification rules and
sunset rule I proposed in the vehicle tax credit section of the oil bill written for Specter (posted at www.werbos.com/oil.htm).
If I were a Senator, I would vote for a clean measure to do that, period. It would be great.
My only concern about that idea is politics. I may be wrong... but I don't think that that formulation has the best chance of
making it through the House this year. The tax incentive version my not be quite so compelling to many people as the
semi-permanent rebate by entitlement, but it's almost as good, and it's a whole lot closer to having some hope for it.
There are a lot of folks who believe that tax breaks and tax reductions are more acceptable than new line items in the federal budget.
What's more, I haven't seen the 2012 budget discussion which this paragraph refers to. I wouldn't be surprised if it's like
the Electrification Coalition thing or Reid's last Pickens bill, which would be a one time limited appropriation creating far too little
predictability for auto companies thinking of investing in this area. And reopens the issue year by year, unlike the better situation that
oil company tax breaks have. (Better for THEM.) Still, I suppose there could be some consumer value in saying "one time sale ends on ..."
But then comes "rewarding communities" on the same page, which sounds like the big section of the Electrification Coalition proposal.
I worry about that all paying for favored municipalities to buy lots of Nissans to give away to friends, and -- worse -- spending lots
of money on Japanese standard "chademo" fast recharge stations which are a wasteful white elephant with no good future. I suppose Congress could
simply OK this and amend it with rules: (1) no giving away of cars; (2) no chademo stations -- all recharge stations must conform to levels 1, 2 or 3 of the
US electrical code, unless they provide ultrafast (10 minute) pulsed recharge. Under those restrictions, it could be very helpful.
I would be surprised if GM did not like this change (even though they may not be up yet on the new pulsed options).
===========
THE BIGGEST HOLE in my view is ... basically... seeming somewhat clueless on the potential for alternate liquid fuels,
ESPECIALLY IN THE NEXT FEW YEARS WHEN THINGS ARE URGENT AND WE AREN'T SO ELECTRIC YET.
It is a curious situation when folks like the White House and Congressman Waxman lecture IEEE folks that we should
appreciate more how Electricity Is the Way. Actually, maybe it's good that we get into a kind of honesty situation sometimes.
(IEEE does run lots of peer reviews, after all.) PEVs are ONE of the two key pillars of our best, clearest chance of getting to zero oil dependency
at a net profit. The other is alternate liquid fuels -- largely but not exclusively nonfood biofuels.
To have a quick impact, we should be doing BOTH things.
It seems that a lot of folks STILL don't understand that fuel flexibility and alternate liquid fuels are not really ALTERNATIVES to maximum
rational use of electricity, at the vehicle or policy level. That's really sad. Even under the president's new plan,
we are missing huge opportunities to move a whole lot faster on the alternative liquid fuels. Some are low cost, medium impact..
which is a lot bigger than than the very limited biomass benefits I see in this blueprint.
For example... I see no reason why the US government should not give ABSOLUTE preference in procurement to certified GEM-flexible vehicles (whether conventional or plug-in, which is a different matter) over all other vehicles, STARTING NOW.
And it wouldn't cost much to set up a certification program, where all manufacturers are required to put very bright, clear
decals over the refueling port on the car, making it clear which category of flexibility the car is warranted for.
And, as I noted before, replacing RFS with properly tuned LCFS could help a huge amount, even if the difference seems "just technical."
Beyond that... the talk by Arun Majumdar at the ITIF briefing at Rayburn a few weeeks ago makes me feel better about
the ARPA-E budget vehicle... blender pumps could be good, but why not have GEM-flexible blender pumps,
and why not use tax incentives to let industry install as many as they choose to. (I am not sure what it means that the Administration will help install the pumps.) Lots of crucial R&D opportunities beyond the scope of this blueprint, and I'm not sure of when they will be followed on or how...
It's really important to understand with biofuels that the cost and availability of the technology depends a lot on what the technology MAKES.
Flexibility in the cars makes it possible to use biofuels which are easier to make -- which helps with cost, with moving fast, and with
efficiency and sustainability.
Have some comments about the graph on page 21, but ...
============================
=======================================
Yesterday, I stressed that FUEL FLEXIBILITY (alternate liquid fuels) and plug-in hybrid cars
are two key, COMPLEMENTARY technologies that would let the world be independent from fossil oil
in 25 years or so, at a net profit. I talked about the key near-term actions we could take at low cost or no cost
to accelerate fuel flexibility and alternate liquid fuels much faster than what this week's White House energy
blueprint discusses.
But what about the plug-in cars?
On another list, someone said that plug-in cars would cause a huge increase in world electricity demand,
creating a massive new challenge there.
NOT SO!
World electricity supply is an important challenge already (as folks in Japan can feel in their very flesh this week!),
but massive dpeloyment of PHEVs would not do much to change that challenge.
Here is why...
x wrote:
As for the ~500 GW demand, please refer to this graph from my 2009 paper with data taken from EIA data sources for 2007 - 4 years old data.
There have been major serious economic studies of these questions which came to different conclusions.
I cite a number of them (including URLS) in a book chapter I had published last year or so,
Technological Solutions for Energy Security and Sustainability.
But as I said, there is also the study by Duke power.
It's important to discuss some explicit arithmetic to keep this straight.
If one tries to estimate the need for additional electricity in kwh by assuming that the electricity must contain the same BTU as the gasoline,
one will overestimate the requirement for kwh many, many times over.
Most of the gasoline used in cars today is used in conventional cars. Largely because of regenerative braking and because
of the gasoline engine operating mainly at nominal power (when operating at all), efficient heavy hybrids already cut the need for
gasoline in half. Even so, the little gasoline engine in such hybrids is only 30% efficient; in all-electric mode,
in a plug-in hybrid, you really get 90% efficiency from the BTU to torque, versus 30%. Thus PHEVs in all-electric mode
only need 1/6 as many BTUs of electricity per mile as the corresponding conventional car would need of BTUs of gasoline.
What's more -- the game plan a lot of us have been focusing on (e.g. the IEEE white paper on plug-in hybrids)
envisions FUEL-FLEXIBLE PHEV20, roughly -- cars with a 20-mile all-electric range, for which IEEE estimates
the average user would only get half the miles from electricity. If you plug that case in, you see:
1. Total demand for liquid fuel gets reduced by 75% (half because of hybrid efficiency, half because of miles
powered by electricity) -- deep enough that we can live without oil imports; and
2. The required BTU of electricity are now (1/2)*(1/6) of the BTUs we now use of gasoline.
A factor of 12 really changes things.
What's more, it's better than it sounds, because the kwh would mainly come at night, as people plug in at home.
This is the kind of thing Duke Power studied in detail. As one of the largest electric power systems in the US,
Duke really knows its numbers quite well, and can estimate the impacts on the power grid
a whole lot more than the amateurs one learns about from the usual green literature. It is no surprise that
they concluded there would be no additional burden on the grid whatsoever (and even some benefit to the grid, if it's
done right), and little or no need for more generating capacity; only a need to utilize existing capacity more fully.
============================
You also asked about costs of the cars, which is quite fair, and not trivial. A lot of the important true cost data is closely held
proprietary information. A lot of the numbers batted around in the press are grossly distorted by
partisan advocacy nonsense. But some things are well known.
A few years ago, the Society for Automotive Engineers put out an estimate of what it costs Toyota to make the Prius
high-mpg hybrid, above and beyond the cost of the correspondng conventional car. Once the technology settled down
to some degree (5 years ago?), Toyota was certainly running a serious profit on these cars, and it's clear that SAE was right -- the
incremental cost was no more than $3000. SAE said -- $2000 of that is battery (NiMH) and $1000 power electronics.
http://www.toyota.com/prius-hybrid/
So for $3000 extra, you cut your gasoline use in half. People tell me that that breaks even for the average customer at about
$4 per gallon.
But what about the plug-in hybrids (PHEV) about to hit the market? Those numbers are harder to get. One may speculate:
are the initial price tags biased low (as the Prius hybrid was initially) to "buy experience," or are they biased high
(to get additional profit due to demand exceeding supply, or, more generously, to ration the limited number of vehicles available
the first year)? I lean towards the latter, especially since there is evidence of demand exceeding supply... of one-year waiting lists for people to get
the next vehicle, and so on.
A few months ago, GM put out an analysis saying that the Chevy Volt (a PHEV40, much more all-electric range than the new PHEV15
Prius plug-in) becomes break-even for the customer when gasoline gets to $5 per gallon. The Prius PHEV15 will have an initial cost of about $32,000,
more than $10,000 more than the normal Prius hybrid. (Though there will be that $7,500 tax credit for about a year, if I understand correctly.)
Why so high?
In fact... the Prius PHEV only uses a 6kwh battery. Any of us can buy a 10kwh auto-grade battery from Thunder Sky for $2,000
this year, at retail. It's weird how many people proudly cite (5 year old?) authoritative documents (even a White House document
this week) saying that it costs $1000 per kwh... so why should I believe a lowly store where I just walk in and buy it for $200
per kwh? Well, folks, my wife actually DID walk in and buy a couple, and they do work as advertized. They are sold
in many, many thousands today, and used in rugged, demanding transportation applications ... but they come from China.
I heard about them from folks in Delphi who checked them out and verified them years ago. And they have competitors who are probably just as good or better.
A few years back, I saw data that Japan, China and South Korea pretty much dominate the lithium battery production..
and GM is currently buying batteries from LG of Korea. So yes, if you buy a battery from DOE, it may well cost $1000 per kwh,
but GM is not so stupid. If the US government hobbles GM, we may simply end up buying whole cars from China instead of batteries.
(I mentioned that $21,000 BYD PHEV60. But has China thought of the possibility of exports? Don't laugh too loud.)
IN SUMMARY -- if we can get a PHEV20 for a battery cost of $2,000 -- the same as it cost with the old Prius hybrid,
which was already break even at $4/gallon with less fuel savings than the PHEV20 gets you -- how could it NOT break even at
$4 per gallon?
The obvious answer: the power electronics, the other half of the cost.
http://www.hevt.com/
But there have been really huge, verified breakthroughs in that area just this past year, from NSF-funded basic research,
validated by others. Power electronics is basically a matter of chips used to convert between AC and DC (and voltages).
That was not included in the GM $5 break-even estimate, but I suspect GM will catch up on this relatively soon.
I am certain Toyota was moving fast on this kind of stuff at least a few months ago. It basically cuts the power electronics costs in half,
immediately. The unit costs are mainly the costs of making chips -- a Moore's Law kind of thing.
So the technology is there, and with gas at $4 per gallon it should make the US a profit -- IF we deploy it. But the initial stages
are not so easy, especially when we came close to losing the auto industry altogether in the US a couple of years ago.
There is a real race between things that move us forward and economic things that could kill us altogether.
(The new power electronics also is associated with new motor control, which gets rid of the rare earths problem
with PHEVs. More details forthcoming in a paper on the fourth-generation intelligent power grid,
IEEE Computational Intelligence Magazine, August 2011.)
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