What 94% of Americans don't know...

Obama has reduced the deficit.

There. You are now officially more informed than 94% of Americans.  Just to make it really clear, here is a simple chart of deficit by calender-year quarter, which resolves any questions as to who was President when the deficit exploded into the stratosphere during the economic collapse.

Cool stuff of the week

Who knew that leaves reflect near-infrared light like crazy?  Check out this amazing video of what our eyes can't see.

Cut spending.  Just don't cut anything.  Not one single item on the poll's long list had plurality support for spending cuts.  Two items - education and veterans' benefits - had majority support for spending increases.  16/19 items had more support for increases than cuts.

The Senate is a toss-up in 2014, as Democrats have to defend a large number of vulnerable seats they won in the 2008 landslide.  The 2016 election should again favor Democrats.

When 97% of experts and essentially every major scientific organization on earth disagrees with you, and 99.83% of published papers do not support your contention, you are either wrong or you are Galileo.  Hint:  You are not Galileo.

Awesome winning photos from the World Press Photography Awards. 

Japan - not so small a country

Two myths about Japan that are commonly repeated is that it is small and that it is very densely populated.  Take a look at the map below.  Does Japan look small to you?  It is actually about the size of America's eastern seaboard.  Note that the latitudes were kept intact in this image.

Japan is physically about the same size and shape as the portion of the US east of the Appalachian mountains.  It also has similar weather:  Okinawa (Naha on the map) is little different than Key West.  Hokkaido, the northern-most island, is like New England with lake effect snows blowing in from the back side.  Also note that while the population of Japan is about 128 million, the population of the eastern seaboard is on the order of 80 million, depending on what you count.  So while Japan is more population dense than the eastern seaboard, it is not wildly different.  The image of Japan being super-crowded is because people choose to live in its cities, particularly on the eastern shore, and country-side sprawl is not as common as it is in the US.  If the Japanese were willing to live further inland in the minor cities, their density would not be all that different from what is found in much of the USA.

Fracking boomlet, fracking bust...

Well, that was fun, folks.  Back at the height of the housing bubble, natural gas prices spiked.  This made it economical to adopt an existing oil-industry technique (developed in no small part by the federal government), hydraulic fracking, in the pursuit of natural gas trapped in shale rock.  This set off a gold rush, and like California in the 1850's, a lot of people are losing their shirts and the only people making money are those selling equipment to the suckers.  The rush mentality set off a huge burst of production, which preceded to cause, in combination with the recession, for prices to fall from nearly $11 per thousand cubic feet at their peak in 2008 to under $2 at their bottom last April.

So what is the status of fracking now?  A new report from the PostCarbon Institute lays it out in gory detail. Besides a lot of investors drowing in a mountain of red ink due to the rock-bottom prices, production has flat-lined.  Worse yet, the production rates of fracked wells plummets from the moment they are first tapped, falling by over 60% on average the first year and around 50% per year for the next few years.  Even to maintain flat production, something like $40 billion dollars of new equipment and drilling needs to be purchased every year.  In true Red Queen fashion, the fracking industry has to run faster and faster as its old wells' production falls like a rock, and new replacement wells, which are drilled ever further from the "sweet spots", have even less initial production and faster declines than the wells they are replacing.  It is a race they cannot win.  Even if they can outrun their creditors, they can't outrun physics and geology.  There just isn't that much frackable natural gas out there.  Below is a map of the major shale gas plays.  Note that they span about a quarter of the lower 48.  We've already poked and prodded everywhere, folks.  There are no more big plays to be found, and the biggest ones we have either leveled off or already in decline.

So no, fracking is not the long-term solution to anything.  It is an unsustainable boomlet that buys us at most a dozen years or so.  The same is true for the shale oil boomlet as well - it is a decade's worth of very expensive oil.  Both will peak sometime around 2020 and then we will enter yet another phase of long-term decline in production.  When we burn it and it is gone, and our only remaining choice to go after something that is deeper, thinner, dirtier, and even more expensive.  We need to start immediately on a major effort to plan for and construct the necessary infrastructure for a world where both oil and gas are very expensive, and we should be focusing on protecting our remaining high-quality oil and gas reserves rather than gold-rushing them into oblivion.  Our current path is madness.

Ecuador Avatar, and other interesting reads

A few reads I would like to share...

Meet the Shuar tribe of Ecuador, the closest thing here on Earth to what we all saw in "Avatar".  Of course, here on Earth, we turn a blind eye in order to make a quick buck.

Fleeing persecution, the Lykov family fled to the Siberian wild in 1936, whereupon they were isolated from human contact for the next forty years.

No, the minimum wage does not significantly affect unemployment rates.

Why does oil cost about $100 a barrel?  Because the marginal cost of producing one extra barrel of oil averages just about that amount for the major producers.  Get over it.

American carbon emissions are falling, but despite the claims, fracked natural gas is not the primary reason - the slow economy, followed by increasing use of renewables, have had larger impacts.

Language and Immigration



Last week, I officially sat out on my quest to tackle the JLPT-2 language test.  For a native speaker of a European language, at least, it is a beast.  Realistic estimates of the time required to pass it around 2000 hours of study, and almost certainly a significant amount of time living in Japan - and it is not even the highest level test!  The JLPT-1, required to enter universities, practice medicine or other professions, or apply for any number of jobs, requires half-again as much time and effort.  Just think about that:  these tests represent a year or a year and a half of full-time work, respectively. 

 

I have been living in Japan for almost three years total, without being able to speak the language at much more than an elementary school level.  Yet I have performed research at major universities and corporations, co-authored Japanese patents, written conference and journal papers, earned a fair bit of money, spent most of it, paid plenty of taxes, facilitated cultural exchange, and otherwise been a good resident.  In fact, the vast majority of westerners here in Japan are no better at Japanese than myself.  I would describe no more than 5% as fluent, and about a third as competent speakers, and the remainder as either short-term non-learners or those who have been here a while and picked up some Japanese by default but have no intention of hitting the books or working at it.  Despite the fact that most of us can barely speak Japanese and most of the rest of us can only speak slow, broken Japanese, we are clearly contributors and in many cases actively invited into the country (eg, JET program).

 

So it really gets my goat every time I hear someone complaining about immigrants' lack of English skills.  Almost universally, the people making this complaint can't speak another language beyond the Spanish they learned watching Sesame Street, and therefore have no idea how much work it is to become reasonably fluent in another language.  I am actually stunned by the level of English that most of my foreign colleagues living in the US possess.  Especially for those from non-European nations, learning English for them is as difficult as learning Japanese is for me.  They could only have gotten to the points they are at by countless hours of study.

 

These complainers are also wrong in that it is not necessary to speak English in America, just as it is not necessary to speak Japanese in Japan.  Sure, it is helpful to speak the native language, but there are always work-arounds.  You would think that the complainers, who almost always believe in "free markets", would leave it up to individual immigrants to decide how much English was worth learning in their particular case.  Strangely enough, however, these people want to make English our "official" language, require that would-be citizens (as well as the new "amnesty" recipients) learn a certain level of English, ban bi-lingual signs, etc.  This is pure nativism and should be frowned upon in civil society.  People should speak whatever language they want, learn whatever language they want, and the government should adapt to the people as we are, not vice versa.

 

 

 

 

America is not a family

One particular analogy people bring up when talking about the government's budget is a "family" analogy.  They will claim that we are like a family with $40,000 in income each year, but who is spending $70,000 and has $250,000 in debt, or some such figures.  There are multiple reasons, however, that this analogy is flawed and leads to false conclusions.

First, macroeconomics.  A family is tiny relative to the economy.  Regardless of how diligently they save or how wildly they ring up the credit cards, the overall economy does not change meaningfully.  This means that the chances that they will be laid off, hired, or see a big boom in orders at their shop are unaffected by their own spending habits.  The government, however, is not small relative to the economy, making up more than a third of it.  If the government slashes spending...well, there is a lot less spending.  People get laid off.  Tax revenues go down.  People wind up on the dole.  After all is said and done, it is not even clear that the money saved via the reduced spending isn't lost completely due to the reduced revenues and new safety net spending.  Even if the government comes out ahead, it is only marginally so, and at the great cost of millions being laid off.

But won't the private sector pick up the slack?  Not when we are in a liquidity trap.  If you don't know what that is, you simply do not understand what has happened in our economy the last four years.  The mechanism by which the private sector normally "picks up the slack" is by falling interest rates, which stimulate investment.  But when you are in a liquidity trap and risk-free interest rates are already essentially zero, they can't fall any further (since you can hold cash instead, they can't really go negative).  So if the government cuts spending in a liquidity trap, it just adds more slack to the economy, and employment and GDP fall.

A second problem with the family analogy as normally presented is that those who present it seem to think the family income is fixed.  They never pause to consider that one solution might be to work more.  Indeed, a nearly perfect analogy exists between the family members' hours worked and tax rates, as both are essentially proportional to income and more or less voluntary.  Given that we have the third lowest taxes in the OECD, perhaps our "family" problem is that mom and dad only work 25 hours a week each.  Likewise, spending on automobiles for the family and defense for the government are pretty similar in size.  Since our defense spending is second highest in the OECD (per GDP), perhaps the family's problem is that mommy drives a $40,000 SUV and daddy has a BMW.

Yet just about every time someone presents this analogy, they never consider the macro effects, ignore the SUV and beemer, and not only dismiss the idea that mom and dad are lazy and could solve the entire problem if they just worked full time, but actively argue that mom and dad are just so hard-put that if they worked more, their productivity would drop so much that they would earn even less overall!    So instead of addressing these issues, the family must raid Junior's college fund, ignore the leaking roof, and skip their annual check-up.  Clearly, that's a one-way ticket to prosperity.