Archive for July, 2008

Big Quake Reminiscence

Wednesday, July 30th, 2008

Today’s little earthquake reminded me of a really big one. In 1989, I was on the same floor in the same building as this guy.

World's largest ghost town

Monday, July 21st, 2008

Amid the housing bust hype, there is much talk of ghost towns in the most marginal suburbs.

Lest you worry too much about that, consider this, the world’s largest ghost town, likely to remain uninhabited for centuries.

There are worse things than financial crashes. America is not immune to such things, but better protected than most anywhere in the world.

Obesity Hypothesis

Friday, July 18th, 2008

Previous posts have asked why obesity would appear in America only in the past 15 years, when we’ve had the gustatory trappings of success for many decades. A related question is why slim parents would have fat kids. What changed 20 years ago?

Here is a theory.

It turns out the insulin response is part of fetal development. The LA Times reported today that babies are twice as likely to be obese adolescents if the mother was diabetic during pregnancy. In effect, the unborn baby is at the tail of the insulin whip, responding much more strongly than the mother to overexposure to blood sugar.

But the medical definition of diabetes is a rather arbitrary numerical cutoff. Instead, consider the more basic conclusion, that routinely elevated blood sugar in a pregnant mother creates a magnified effect in the unborn child, as the baby’s insulin response is desensitized.

Now consider three changes that occurred in the past 30 years. First, the federal government began to advocate that carbohydrates be consumed at much higher levels relative to fat and protein, compared to the prevailing American diet. Second, corn syrup was widely substituted for cane sugar (corn syrup hits the bloodstream faster than sugar, placing greater strain on the insulin system). Third, snack foods, largely sweetened with corn syrup, were consumed in much larger quantity as mother stopped cooking and Big Gulps proliferated.

The effects might not immediately be visible, since the adult has a functioning insulin response that predates the dietary change; the problem might emerge only in the children.

A brief history of nuclear proliferation

Wednesday, July 9th, 2008

Nukes are a pain — dangerous and expensive to build and maintain. As a result, nations have acquired nukes almost exclusively to deter a rival. The rival is nearly always physically adjacent, more powerful, and already nuclear. Look at the timeline.

America gets nukes (1945).
Russia deters America (1949).
Britain deters Russia (1952).
France twirls Gaullist moustache (1960).
China deters Russia (1964).
Israel deters Syria & Egypt (1967).
India deters China (1974).
Pakistan deters India (1998).
North Korea deters America (2003).
Iran deters Pakistan, Israel, USA (TBD).

France is arguably the only nation to have developed nuclear weapons for no logical strategic reason. In all other cases, you may be sorry they acquired them, but you cannot deny the strategic logic.

For example, Iran is currently surrounded by US satellites and allies: Afghanistan, Iraq, Turkey. The conventional forces in those three nations far surpass Iran’s. Logically, that would be the scariest geopolitical threat to Iran. So logically, this is the primary reason Iran would seek nuclear weapons.

This strongly argues that conventional disarmament would help limit nuclear proliferation. For example, if the Kashmir borders were settled and India reduced its conventional forces, Pakistan would face no strategic threats, and thus be more likely to eliminate its nuclear arsenal. But India would do this only if China did it first. China would do this if Russia did. Russia would do it if America did.

A new gorilla wakes

Wednesday, July 9th, 2008

Microsoft CEO Steve Ballmer was publicly ridiculing Google Docs as recently as May 2008. This may prove premature.

As I have written before, the killer app in Google Apps is not its dubious Word or Excel knockoff, but rather the fantastic hosted email. Anyone who spends a week on Google Apps email will never go back, it’s that simple. The key functions — massive storage, instantaneous search, and bulletproof spam detection — run circles around Microsoft Exchange Server and everything else. Not even close. Please don’t bother disputing this unless you’ve tried it.

Spam detection now enjoys network effects, because Google employs group intelligence to detect spam. If you spam Google Apps email, thousands of recipients will instantly mark it as spam, and the message will be rejected for all remaining recipients. The more Google users, the better it gets.

Google’s dominance in email appears foregone. Does that matter? Yes, because whenever you receive a Word or Excel attachment through Google mail, you now see an “Import to Google Apps” button.

Conclusion: Google Apps hosted email has moved upstream from Microsoft Office.

Fixing us, not them

Tuesday, July 8th, 2008

America currently blames others for its own failings in at least four important areas.

Trade imbalances: obviously we should foster exports, encourage production, discourage consumption. Currently we complain incessantly about China’s unfair advantages in trade, yet ignore the obvious: our federal policies of encouraging consumer demand — which may have made sense 60 years ago, when America had a ton of savings and produced everything domestically — now simply drive the durable goods deficit. How many people here bother to learn a foreign language and attempt to export something? Far fewer, as a percentage of population, than in China. We fail because we’re not trying very hard.

Drugs: obviously we should cut demand, not supply. Currently we spend billions destroying poppies and coca in Afghanistan and Colombia. This is pointless, because cutting supply simply increases price, thus increasing incentives for impoverished people to produce more. If instead you cut domestic demand, the price falls, reducing incentives and cutting supply.

Crime: violent inner cities are “us,” not “them.” Walling off suburbs into gated communities, and building vast numbers of prisons, denies the fact that our fate is shared. It is a form of blaming the victim: we already know from New York’s success in the 1990s that crime control is mainly a function of police presence. (Duh.) Public safety is just a matter of accepting our shared fate and acting upon it.

Energy: the Middle East is utterly irrelevant to our national interest, except for its oil. Controlling the availability of that oil requires projection of military power, which makes enemies. We risk domestic terrorist cataclysm mainly because we need oil. Yet North America has sufficient natural gas reserves to power the continent for decades. Has it occurred to anyone how insanely risky it is to have our entire economy (including distribution of food) depend upon reliable shipments of an imported fluid? We’re simply using the wrong fuel. Changing to natural gas only looks expensive when you ignore the Black Swan of an oil supply interruption, which is almost certain to occur at some point.

Neoliberalism's confusion

Tuesday, July 8th, 2008

Stiglitz claimed recently that “neoliberalism has failed.” More accurately, neoliberalism has long suffered from confusion about its origin.

Neoliberalism depends on, and exists because of, beneficial regulation. When it fails, it fails for lack of regulatory authority.

More generally, “free” markets are a structured game whose playing field is defined by government. Even property ownership is a regulatory construct, a form of monopoly sanctioned by government. This sanction has been stable for so long that Americans forget it can exist only within a regulatory structure.

For a dramatic illustration, consider the difference in the fortunes of California and Baja California. The latter fails for lack of a regulatory structure (mainly property rights, environmental law and public safety).

Neoliberalism comes under fire today mainly because of global trading imbalances. That makes sense, because when the global trading system fails, it fails for lack of regulatory authority to normalize across national borders: labor laws, exchange rates, etc.

Despite all that, for the time being, America would be better served to focus on fixing its own manifold internal problems, rather than complain about China’s trade advantages (whether fair or unfair). For example, the U.S. government’s fiscal deficit is a big problem, within our own power to fix, and not China’s fault. The promotion of consumption over production — which is now as much cultural as governmental — is also within our power to fix, and not China’s fault.

This might all be considered a special case of America’s current problem with scapegoating.