Archive for July, 2013

Man Bites Dog, Part 4

July 29, 2013 Leave a comment

(For previous installments, see here.)


Wind energy is killing rare birds and many bats.

Some of the most damning images of oil industry destruction are of birds soaked in spilled oil. These images help form an image of oil as a dirty, earth-unfriendly energy source.

And in some ways, it is.

But every energy source is in some ways earth-unfriendly.

Why so little reporting on bird deaths cause by wind energy? Does anyone doubt that it’s not because wind energy is considered “environmentally friendly” by most journalists, who then won’t naturally gravitate to any story that runs counter to that narrative?


Man Bites Dog, Part 3

July 28, 2013 Leave a comment

(See parts 1 and 2, here.)

Because of increased oil and mineral production in the Congo, there is less rainforest being destroyed.

Yet, somehow I doubt we’ll see people protesting for more oil production to save the rainforest.

Already someone has figured out a way to explain that, still, all this could be bad for the environment:

But on the other side, the big increase in human population and the rise in living standards globally means we may need more agricultural commodities…

In other words, it would be better for the environment for the world to have lower living standards! Because we all know that the poorest countries do a great job of protecting the environment, right?

The World’s Most Interesting Industry

July 27, 2013 Leave a comment


Ok, I’m exaggerating, but really, could there be a more interesting intersection of logistics, economics, politics and physics than is present in this explanation of why WTI and Brent crude oil prices have recently converged?

Categories: Energy, Microeconomics

The American Middle Class Shrinks…

July 26, 2013 Leave a comment

…as more and more of it joins the upper class, quite contrary to common perception:

middle to upper

Categories: Income Distribution

Environmentalism and Economics

July 25, 2013 1 comment

I’m reading a classic of environmentalism, Clive Ponting’s A Green History of the World. It’s fairly left-leaning, and doesn’t have much good to say about economics. Mr. Ponting’s basic view of economics seems to be that it’s short-sighted and oblivious to the long-term damage of, for example, over-fishing.

In fact, every basic economics text deals with just this problem: it’s called the tragedy of the commons.

The problem may or may not be inadequate government regulation. It could also be a lack of property rights. But in any case, it’s not caused by classical economics, and economics has plenty of useful things to say about how to solve this problem.

I’ll probably show this video in Microeconomics class next semester, for example:

China’s GDP growth slows to 7.5%? Or less?

July 24, 2013 Leave a comment


The number 7.5% is right in line with the target…and Mamta Babkar thinks that’s too good to be true.


But I doubt the real numbers are much different from the official figures. Here’s why: with reporting like this, you can only fudge the numbers for so long.

A hypothetical example:

Suppose you are an official reporting economic growth for XYZ Province in China. Let’s make it a reasonably large province…say, one with a big economy of around $815 billion.

Now suppose the economy really only grows by 6.5% to $868 billion. But you want to fudge the numbers and report growth of 7.5%, or a $876 billion economy. The actual/reported gap is $8 billion, not even noticeable in an economy of this size.

What happens next year? Suppose the target is again 7.5% but again you only get 6.5% growth. This time, you have to report a $942 billion economy, when the real size is only $924 billion. Now the actual/reported gap is $17 billion–twice as big relative to the actual economy size as the year before.

By the fifth year the gap would be  $53 billion, or five times as big relative to the first year “fudge.” 

In other words, since these numbers are compounding annually, you can’t just roll fake numbers forward. They snowball.

China’s political leaders may or may not be less honest with numbers than politicians of other countries–who’s to say?–but they certainly understand math better than the average journalist.

My guess is that the numbers are pretty close to correct, even if they’ve been “smoothed” a little.

MOOCs May Do for Education What TV Did for Sports

July 23, 2013 Leave a comment


The Economist has another article on the phenomenon of online education, this time focusing on the question of whether or not any provider has actually hit on a viable business model.

Besides the uncertainty over which business model, if any, will produce profits, there is disagreement over how big the market will be. Some see a zero- or negative-sum game, in which cheap online providers radically reduce the cost of higher education and drive many traditional institutions to the wall. Others believe this effect will be dwarfed by the dramatic increase in access to higher education that the MOOCs will bring.

There are some interesting angles here, including the idea that MOOCs may open higher education to advertising sponsorship.

One idea that isn’t mentioned is the possibility for MOOCs to introduce the superstar phenomena to higher education. Many teachers and universities are going to be made obsolete, but the best teachers will be able to be experienced by millions of students. The current upper limit of the number of students who can consume the output of a top-ranked university professor’s lecture is in the hundreds.

Prepare for the coming superstar educator.

Categories: Uncategorized