Wednesday, January 23, 2013

Economic Heresy: Carbon Prices are Useless

My policy views tend to align pretty close to the economic consensus. Especially on the many issues where the profession is close to 100% in agreement. One where I disagree a bit (perhaps due to the cognitive dissonance of spending a year defending Bush Era climate policy) is that carbon prices are useless. The problem is that most cost-benefit analyses suggest relatively small carbon prices (that would say increase the price of gasoline or electricity by about 10-20%). However, the major externality is not the carbon externality, it is the technology externality. Such small carbon prices have had (in Europe where they have been in place for a decade) and likely will have minimal impact. This recent economist article on coal notes that despite Europe's carbon pricing, they have moved in the wrong direction on climate while the US's carbon price free economy is getting significantly more carbon free. The reason is largely due to shifts in technology (mostly natural gas related) that far swamp out any small carbon price effect. Which is why R&D focused policies (like the nearly identical policies under both Bush and Obama) may be far more important than carbon prices. Especially because technology has a better chance shifting behaviors in places like China and Africa, than political wrangling will.

Wednesday, January 16, 2013

Food for Fuel Schizophrenia

A common mantra in the biofuel debate even by respected people is that using food (like corn, soy, etc.) to make gasoline and diesel is inherently wrong because food should be for eating. Fundamentally, using food for fuel is a shift in the demand for fuel, and raises the price of fuel for everyone else. We agree that this has negative consequences as is well documents by numerous ny times articles. What struck me though about that particular article is that it acknowledges that activists for the past 20 years have been campaigning for the opposite, an end to agriculture subsidies (in the US, Europe and Japan) because such subsidies shift the supply curve out, and lower the price of food, hurting poor farmers (which is still the majority of the developing world. and most of the poorest).

You can't have it both ways. You can't complain at the same time that food prices are too high and that food prices are too low. Honestly, the net effect of both policies on food prices has been shown to be quite small (at least when I did the calculation at the White House though I think its still true), so its all a lot of noise about nothing.

Tuesday, January 15, 2013

The means of production are democratized

A recent npr planet money story discussed 3-D printing and how it is bringing to means of production to anybody with a personal computer and a desktop 3-D printer that are already as cheap as 2-D printers were a decade ago. Noting that Karl Marx said "power belongs to those who own the means of production [capital]" it pained an optimistic view of a more equal future.

Of course this really isn't new. As my economic history prof/adviser Avner Greif noted, Marx' revolution never came because even though he's right that capital is the road to wealth, right as he died, human capital began to supplant physical capital as the most important capital in the economy. And human capital is harder to concentrate.

Already 70% of the US economic is from services. 3-D printing may help democratize the shrinking sliver of the economy that is about making things, and that is a good thing, but its not that new.

Wednesday, January 09, 2013

Reviewlet: Les Miserables

Agree with nytimes curmudgeon Manola Dargis, Anne Hathawawy's performance was absolutely breathtaking, and the rest of the movie, just felt a bit too long and exhausting. Interesting to compare the movie format to theater. The movie took the extreme close up to an even more intense level, with every solo having the actor's face take up full screen, sometimes even partially cutting off the face, this was especially imposing on imax. this worked intensely well for some (notably Hathaway, but also for Marius and surprisingly Seyfried), but less well for the others (notably Jackman who just didn't work for me). Not generally a fan of Amanda Seyfried, but aside from Hathaway, she really was a standout, elevating the normally boring forgettable role of Cosette and, walking the fine line for those high soprano runs between fluttering and shrieking.

Also interesting coming back to les mis, its been over 15 years since last seeing it, and new things resonate, from the wasted energies of the student, to how universal some things are with echoes of Tienanmen and student revolutions today, to the relationship between Valjean and Cosette.
Final Grade: A-

Thursday, January 03, 2013

Game of Thrones: Romance of the Three Kingdoms and Kindle X-ray

Just finished volume 4 of this epic long series. Not looking forward to volume 5. I liked Volume 4 because he left out all the characters I didn't really like (Jon Snow, Stnanis, Melisandre, Danerys, Davos), but unfortunately volume 5 is just about them. Also near the end I discovered the new Kindle X-ray feature that identifies all the characters on the current page and shows you all the previous times they were mentioned. Which is crazy useful here since X-ray notes there are over 500 characters. It also occurred to me that these books remind me most of the Three Kingdoms period of Chinese history (which I know most about from nintendo games) rather than European, in the rapid dissolution and reformation of many alliances and mini-kingdoms after the central empire fell, all in the span of a single lifetime.I can't think of a comparable period in Western history, (maybe the Germanic states and Prussia) but likely just because my European history is lacking. I suppose late 19th century Europe might be closest (the setting of the board games Castle Risk and Diplomacy) but I suppose the difference is that the natural state of Europe seems to be many states, and unified Europe ephemeral, whereas in Westeros as in China, the opposite was true.