Does the McCain campaign owe Stanford University $300 million dollars? :-)

Will the McCain campaign pay Stanford University $300 million dollars -- for inventing a better hybrid car battery? :-)

Readers of December's Popular Mechanics know that Stanford University scientists have already engineered a lithium ion enhancement that promises to multiply charge capacity ability about four times in the short term and as much as ten times in the long term.

For 30 years it has been known that building lithium ion batteries with silicon wires (instead of carbon wires) could yield ten times the power holding ability but, because silicon wires expanded and contracted too much as they cycled, they quickly destroyed themselves. The development of nano wires – about a thousandth of the width of a sheet of paper -- has solved that drawback -- while potentially making lithium ion batteries more stable (safer) at the same time!

Near term, only the anode side of the batteries will be manufactured with nano wires, yielding the quadruple jump (up powering GM’s Volt to go 160 miles on one charge instead of 40?). Long term, manufacturing the cathode side with silicon nano wires is expected to reach the ten multiple target (introducing hybrid, long distant trucks?).

Maybe someone should donate a Popular Mechanics subscription to the McCain campaign -- could save the Treasury $300 million dollars. :-)

http://www.popularmechanics.com/science/research/4237756.html

http://news-service.stanford.edu/news/2008/january9/nanowire-010908.html

Second Amendment right to bear STUN-guns?

SINCE I WROTE THIS I FOUND OUT THAT THE SECOND AMENDMENT AT THIS POINT DOES NOT APPLY TO THE STATES -- DEPENDING ON WHERE YOU LIVE: CHICAGO OR SAN FRANCISCO. HOPEFULLY THE DISPARITY IS WORKING ITS WAY TOWARDS THE SUPREME COURT.

Now that the Supreme Court has clarified the Second Amendment right to carry arms as a personal right I think it is time to consider updating the definition of personal arms to cover modern NON-LETHAL weapons like pepper spray and stun guns.

This would mirror the First Amendment's protection of TV and radio, neither of which technologies existed when the Bill of Rights was ratified -- also the Fourth Amendment's protection of privacy covering telephone communication even though it did not exist in the early days of the Constitution but which comes under the clear intentions of the framers.

Being non-lethal, pepper spray and stun guns would be much more difficult to regulate -- it being difficult to find enough state interest in the balance on the government side to override what is now recognized as a constitutional right in the opposite balance (with less leeway for Tasers which occasionally seem to prove fatal) -- legislatures are no longer in a position to do just whatever they want.

What’s a few TRILLION dollars in the sands of time?

A couple of years back I worked out that switching America’s entire motor fleet to plug-in hybrid could reduce foreign oil consumption in half (10 > 5 million bbl/day), possibly cutting oil’s price in half ($60 > $30/bbl), saving exactly enough ($165 billion/yr) to subsidize manufacturing as plug-in hybrids the 16.5 million vehicles we manufacture every year at $10,000 each.

Under the same scheme, today, halving our current foreign consumption (12 > 6 million bbl/day), and halving the price ($150 > $75/bbl) would save three times a much: or about half a trillion a year. (Our motor vehicles burn about 8 millions barrels a day. Silicon nano-wire technology promises to quadruple lithium-ion charge holding ability in the short term – ten times in the long run: at which long run point even long distance truck plug-ins ought to become practical.)

A couple of years back I also worked out that raising the federal minimum wage from $5.15/hr to $12.50/hr would shift $450 billion dollars yearly to our lowest 40 percent of wage earners while adding only 3.75% to the cost of GDP output -- about how much our GDP grew since. * Now we are sending the same amount extra every year to Saudi Arabia and friends for nothing extra in return.

Scott Furman, Obama’s Director of Economic Policy laments that Wal-Mart skins employees $5 billion a year but compares that to the $263 billion he says Walmart saves the American consumer – without seeming to catch the irony that any $7/hr WalMart worker (or every $7/hr worker) would make, that: “Hey; that means if they don’t skin the $5 billion out of us, $257 billion in savings would still be left for everyone else.”

We do not come up with $5 billion a year to make life livable for those who work for the biggest employer in the land. We did not come up with the amount the economy grew over the last couple of years to make the minimum wage $500/wk (no huge wage for American born workers – if heaven for the Mexicans and Vietnamese who worked 2006’s, $206/wk jobs) and effectively end most poverty (and most crime?) in America (at only 25% above LBJ’s minimum – after average income doubled).

But when it comes to dropping $500 billion more a year than we did a couple of years back on the oil magnates of the earth, it hardly slows us down to think: "What’s a few trillion dollars in the sands of time?"

* $12.50/hr = $7.50/hr more than the 2006 federal minimum wage = $7,500/yr average (half) increase. 54 million workers below $12.50/hr + 6 million at federal minimum wage (who get full increase) = 60 million average increases: $450 billion transfer divided by $12 trillion GDP = 3.75% added cost of GDP output.

Forebrains for Africa -- "peabrains" for America?

The contrast between the -- heavy, creative thinking -- applied to the economic problems of dozens of underdeveloped nations we know little of and the almost total lack of -- esoteric innovation -- applied American labor's difficulties...

...would be inexplicable did we not have some understanding of how the pea sized human mid-brain (seat of motivations) can freeze activity in the (even most powerful) fore-brain.

For the poorest third-world economies (we know little about), dozens of factors are mixed with current studies and historical perspectives in attempt to produce a powerful formula for prosperity.

For the sake of ever more underpaid labor in the world's richest economy, it is impossible to get the best progressives to pick up on and proselytize for labor the simplest, straightforward force multiplier used successfully on every continent on earth (in French Canada in N.A.) to stave off the impoverishing race to the bottom: sector-wide labor agreements.

Why? I think this case of mental paralysis can be blamed largely on "boy" hunting group instinct. While it is possible, even invited, to propose new methods for the hunt before or after: DURING the hunt it would totally throw off the ability to cooperate if we suddenly began spouting "great ideas." You keep your mouth shut -- for now (forever?).

I hypothesize that our (male) progressive economists (anyway) are forever stuck in "DURING" the hunt mode, even when they are most alone in the library -- as they calculate how to participate in a national conversation. If they expect to get listened to nationally it seems extremely imprudent to them to propose anything their society has never opened its eyes to consider before. This freezing effect is reinforced by the intuitive boy understanding that all the other boys are operating on the same basis and any deviation from pack interaction standards will drop like a lead balloon -- or would it?

Meanwhile every little country that we think we have our hands on the little levers of invites esoteric think tank calculations until you wonder how anybody could think so much. Meanwhile the most obviously, most critically needed moves for American labor never make it to the national forum.

PS. Whenever progressives begin to wake up to sector-wide they might want to consider my own new candidate for "esoteric" force multiplier: repeating union certification and de-certification elections (every four years) should be held at every workplace -- the most important effect of which may be to keep union leadership from becoming entrenched and out of touch (the biggest complaint about unions and the most quoted reason for opposing unionization) because leadership rarely has any serious opposition in the form of competing candidates from within for union offices. Under sector-wide, nonunion workplaces still operate under contracts worked out by those that are unionized; so membership will have a real choice.

Jason Furman flunks WalMart?

WalMart skins workers for $25 billion in wages -- but benefits consumers to tune of $263 billion? Mmm; doesn't take a Ph.D. to figure out that means WalMart could pay out those $5 billion in wages AND $238 BILLION WOULD STILL BE LEFT TO BENEFIT CONSUMERS. :-)

I wonder if Furman even thought of that (cab driver cynic me).

In supposedly socialist Europe they don't have an EITC (as far as I know) -- because in Europe the PAY people enough to live (or should I say: in Europe, wide awake labor makes sure it gets paid enough to live). I don't know why economists here -- well meaning progressives -- always act as if we were in the middle of the Great Depression or something and see things like the EITC as a permanent -- even normal -- way for Americans in the lower wage levels to get by. Add 50% to LBJ's 10/hr minimum wage level -- 40 years and double the average income later -- and we would have a normal lower wage way to live.

Late add: EITC transfers all of 1/2 of one percent of income in a labor market where 45% of employees earn less than a reasonable $15 an hour minimum wage.

Posted by: Denis Drew | Link to comment | June 12, 2008 at 03:46 PM

My trade tirade for today

Outsource enough jobs and that floods the home market with extra workers – a labor market in the American case where labor has uniquely little collective bargaining power due to thorough de-unionization.

I guess that outsourcing our jobs on a scale that can grow prosperity for nation of 1.3 billion people, almost by definition must have caused a flood in the labor market here.

But labor here also has “insourcing” as I (a cab driver) call it to deal with. Meatpacking companies build plants seemingly incongruously far from any source of domestic labor. Build them and Mexicans will come – at half the pay and next to no benefits. Ditto for a minimum wage of $5.15/hr for which American born workers simply will not show up.

So today’s American workers may face not only a flooded labor market due to workers who will work cheap someplace else – but they are also beset in the labor market place by an additional flood workers who will work cheap right here.
***************
Additionally, even if lower income earners recouped enough money from buying cheap foreign manufactures to make up for some of their lost pay – upper incomes gain equally from cheap priced manufactures without any trade off in lost pay for the most part: ratcheting up inequality.

Inequality or not, lower incomes do not get any break in the price of expensive goods and services produced by upper income Americans so their pay loss to globalization is mostly unrecouped.
*************
For all this, I don’t believe the root of American labor’s deprivations is not mostly globalization or immigration. It is labor’s gaping lack of understanding of the need to collective bargain from a strong position in a free market – not to just work hard and play by the rules and believe you will get your fair share.

Dual-answer whenever American labor wakes up: 1) sector-wide labor agreements (collective-collective bargaining: the only answer to the race to the bottom) and, I think, 2) revolving (like every four years) union certification and RE-certification elections in every workplace (the only way to keep some union leaders permanently on their toes I am afraid – no need to fear decertification with sector-wide agreements: non union firms are forced to work under conditions negotiated by union terms).

Posted by: Denis Drew | June 10, 2008 at 03:35 PM

Remittances pose moral hazard for poor countries? ???

Could we not equate remittances with working at home (at the PC -- in a poor country) for an employer in a rich country (remittances equivalent to remote, Indian style, tele-service banks?).

If a person in a poor country contrives to move to a rich country where capital investment will make his work more productive, how does that add up to moral hazard for the poor country? The world thereby enjoys higher output and the poor country enjoys higher living standards -- albeit via REMOTE increase in productivity of its population?

at YouNotSneaky! 7 comments

Force multipliers for American labor?

The industrial revolution created the opportunity for BOTH ownership and labor to bargain as large units. The middle years of the twentieth century represented the high tide of collective bargaining for America labor -- perhaps because the kind of rough work (factory, warehouse, truck driving) that constituted the core of our economy then CLUSTERED mostly HIGH TESTOSTERONE male workers (one thinks of Jimmy Hoffa's Teamsters) to do labor's core bargaining (and politicking).

As those information economy bells broke up that tough old gang of Jimmy's -- nothing replaced it as a bargaining counterweight to ever more competitive ownership -- in America. In Europe, the over regulation and over protection of labor that was part of the social contract for the first decades after WWII -- as a trade off for allowing more profit to be reinvested into production to speed rebuilding -- has actually overstayed its usefulness leading to two-tier over protection/under protection labor structures in some European nations (which may last until too many people find themselves on the lower tier, the way human nature works).

As Pogo might say: We have met the enemy and he is us -- not the greedy corporations or their Republican slaves who are just doing what they are supposed to be doing: being greedy. 50% of America's private sector workforce may wish they could unionized -- but they mostly lack any sense of the mandatory urgency to do so; or of the unnaturalness of the hurdles manufactured by the current legal scheme under which they may supposedly unionize.

Reconstituting American labor's bargaining power under modern (lower testosterone workers, higher testosterone ownership) conditions can only be accomplished via a bargaining power multiplier used by labor literally all over the world, almost universally in some form in the better paying OECD nations: sector-wide labor agreements (A.K.A., "collective-collective" bargaining).

Sector-wide just backed WalMart's 88 big-boxes out of Germany because their business model didn't work when they had to pay the same as everyone else. (Unfortunately America's WalMart workers do not a price break on housing, real estate or automobiles produced by higher paid workers.)

At the least America can adopt France's and French-Canada's sector-wide "light" wherein everybody working in the same geographic locale does NOT have to work under one commonly negotiated contract (German version) but non-unionized firms MERELY have to abide by the contracts worked out with unionized firms.

A force-multiplying concomitant might be MANDATORY certification elections and RE-certification elections at every workplace every so many years (four?). This would ensure economic democracy American style (fairly balanced, free labor market) while preventing union leadership from ever getting entrenched and out of touch (the most often heard complaint about unions and the most often made explanation for hesitating to unionize).

Balancing central planning and "dispersed planning" (sort of what the USA and Europe do today)

Hayek’s criticism of central planning that “vital information about an economy is inherently local” and that central planners are too distant to be able to access that information in any nearly useful way can be flip-flopped on “dispersed planners” which is what we may fairly call the Hayeks and Milton Friedmans of the world.

Unfettered local economic actors (those countless hidden hands) are too far distant from the sight of the urgent central needs of society to leave the accomplishment of such goals to their shortsighted hands. Trusting the unfettered free market automatically to bring about the best overall (central?) social outcomes amounts magical thinking [*].

Neither local actors nor central planners know enough about each other’s milieu to act efficiently on each other’s behalf, so, we must choose a practical balance to get the best of both worlds – in a word “compromise” between giving all power to one or the other. [This is a very general first thought on the subject – perhaps much more general than I suspect – it may take a couple of weeks to a couple of years to flesh it all out – still sounds to me like a classic answer to “dispersed planners” enthusiasts.]

From recent reading [Skousen] on how Keynes pointed out what classical economists missed (fiscal expansion is better than contraction in a recession) and how Friedman figured out what Keynes missed (monetary expansion works even better) I have come to see, what seems to the amateur, as the too tentative nature of big economic theorizing. Leading to the notion that where to come down should always and only be decided by what experience discovers works in the everyday world – theory corrected by experiment just like any other science – the need for correction doesn’t seem to worry generations of economists enough for my money. Another way to say the same thing might be to see these elaborate models which economists work up as mere education with which they should attempt to identify what is going on when they visit the real world.

The motto of policy makers should be the same as doctors' (another group that has to come up with answers in real time; not in a hundred years when the perfect answer finally arrives): First, do no harm. IOW, if you haven’t enough (experimental?) practical success with some procedure, limit yourself to recommendations at most. For example, the IMF has no business forcing the Philippines into becoming a net importer of rice. There is no reason to believe that the IMF – unlike the rest of humanity and history – is just chock full of folks who are able enough to run countries; can just hire them off the street and drop them off anywhere needed – that’s the level of presumption that forcing their ideology down others’ throats amounts to.

[* ...and is a pretty reliable tip off that such goals do not press anxiously upon the temples of said unfettered free marketeers. More precisely such social needs anxieties are not originating from within their midbrains, A.K.A., limbic systems, A.K.A., the literally pea sized seat of human emotions -- for their forebrains to deal with.

[Just as carbon monoxide makes you too dumb to realize how dumb carbon monoxide is making you – why you do not go back into a fire to rescue your HDTV – our midbrains can make the smartest of us high-IQ wise too dumb to realize how dumb our (lacking?) motivations are.]

If Israel became an actual U.S. territory (like Puerto Rico or Guam)…

If Israel became an United States territory (like Puerto Rico or Guam)…

…two results would be sure to follow – the second the most needed by far by the USA:

1) Besides securing Israel's future;

2) The American public would at last understand that when Israel invades its next door neighbors to throw their families out of their homes and off their ancestral lands that TO ARABS IT AS GOOD AS IF MAINLAND AMERICANS WERE INVADING AND TOSSING THEM OFF THEIR LANDS (if today’s Israel looks like a duck and walks and talks like and hangs around with ducks...).

There are three levels of supposed excuse for forcibly throwing another people out of their personal homes and settling on their lands – the first and third of which were unheard of before the establishment of modern Israel:

1) Super critical-level: victims of an ethnic holocaust which killed half their people with no land of their own to hide in;

2) critical-level: painfully short of farm land, minerals and fossil fuels (A.K.A., absorbing “lebensraum” or living space);

3) no reason to maintain twice the tank strength as the active US Army on 2% of the population base to hold on to ill gotten gains-level: appropriating living space – LITERAL MEANING – merely extra room for some of your people to put nice up-to-date apartment blocks and real estate developments upon.

No reason at all for the United States to trade anymore skyscrapers for settlements. Israeli-"American" squatters out of (what little is left of) the Palestinian homeland, now!

Where is the textbook model for Rent-A-Center dumb labor?

IS THERE AN ECONOMIC MODEL IN A TEXTBOOK SOMEWHERE FOR AN ENTIRE NATION'S LABOR FORCE BEING AS DUMB AND GETTING AS FULLY TAKEN ADVANTAGE OF AS RENT-A-CENTER CUSTOMERS?:

Wealthy Americans reap the benefits of globalization for the same reason wealthy Americans reap an outsize proportion of the benefits of the economy as a whole: American labor's complete complacency about its need to bargain powerfully in the free marketplace.

I don't know if there is any equation or model in the text books to fit -- for a close parallel -- uninformed customers being taken to the cleaners in a Rent-A-Center store. Rent-A-Center suckers are a tiny bit of our economy -- taken-to-the-cleaners (as in completely deunionized) labor is the going standard.

Again, I don't believe there is a text book model that spells out the cause and effect of what is truly America's "great wage depression". Imagine if we predicted to Americans of 1968 that by 2008 25% of our workforce would be earning less than LBJs $10/hr minimum wage.

If American workers were getting their share across the board, then globalization of manufactured goods might merely be the equivalent of automation to them.

Posted by: Denis Drew | Link to comment | May 25, 2008 at 08:01 AM

A double-barreled unionizng idea?

Newt “Grinch-rich” recently argued against card check legislation on the basis that 90-95% of American want employees to be able to choose whether or not unionize by majority vote (forgetting to mention that card check legislation is actually a last-gasp way get around the road blocks set to block free elections in America’s uniquely vicious anti-labor climate). This sparked a double-duty idea on how to both pave the way for massive and truly free unionization and to incentivize union leadership to maintain top performance in service of their membership long after unionization has settled in.

The first thing I thought to say to “Grinch-rich” was that if 90-95% of Americans want employees to be able to decide on unionization by majority vote wouldn’t that make it logical for him to support a mandatory vote on unionization at every work place every few years – just as we have fixed interval votes for public office (you don’t have to run a gauntlet to vote for the next mayor every few years).

Since I knew that voting for or against union certification is the last Newty would really want I thought he might challenge me (in this imaginary confrontation) by asking would I support the same every so many year vote at workplaces that are already unionized – which at first I thought I would oppose because I feared it could weaken labor’s overall bargaining muscle in the free market.

On second thought, one of the most damaging objections (the most damaging objection?) that some people make to unionization is their previous bad experience with some union leadership that had become entrenched and (as humans in any capacity have the tendency to do) had become bureaucratic and aloof from the concerns of their members.

The surest way to bring such labor leadership up to snuff might be for them to face re-certification elections, say, every four years. There may not be any other way for labor membership to incentivize poor leadership – unlike politics in union elections there is rarely any automatic source of opposition (I would dare say it is rare enough to make the papers when it happens). On the other hand there is no practical fear that any reasonably hard working leadership would face de-certification.

Cyclical certification elections could fit hand-in-glove with a version of the “labor saving device” I that I push: sector-wide labor agreements (collective-collective bargaining) – the end of the race to the bottom all over the better paid world outside the USA – wherein everybody working at the same occupation for different in the same geographic locale works under a single-contract.

Under the French-Canadian version (which I call “sector-wide lite”) non-union firms must work under the terms of labor contracts worked out by non-union firms. Under “sector-wide lite” decertifying employees would not have to worry about being left out in the cold because they would still be covered by the contracts of the strongest bargainers: keeping the pressure high on any leadership who might otherwise become calcified and complacent.

Productivity growth should raise all boats

"...which is a fancy way of saying [increased] productivity is coming from upscale workers."

I always thought that productivity growth came from higher tech diffused throughout the labor force -- often eliminating the need high skilled workers: the xerox machine replaced millions of high speed typists with a button, the much more reliable jet engine reduced needed maintenance and the needed mechanics 95%. The cell phone makes everyone more productive.

The highest tech workers of all, physicians and scientists, don't even get their real world productivity counted in economics: doctors are considered more productive if the treat more patients in the same time frame -- not if the get better results from MRIs, etc.

As far as income distribution is concerned, isn't equating higher tech productivity with higher pay in some danger of invoking the labor theory of value? As overall productivity (and overall pay) grows we may be willing to pay more for someone to flip hamburgers for our more affluent selves even if flippers have not added to their productivity since fast food began.

Denis Drew | 05.20.08 - 7:43 am | #

The lost concepts of the minimum wage

One concept that seems perpetually lost in minimum wage hike v. job loss discussions is inflation: as consumers nominal income grows more dollars become available to chase the same old number of hamburgers -- ergo, there should be no hesitation as far as job loss is concerned to hike flipper wages in step with inflation. IOW, the demand curve has moved already and the price curve is merely catching up. Rudimentary, but seems endlessly ignored when you hear policies debated.

Another factor that makes more dollars available to chase hamburgers is economy wide increases in productivity. As we get richer we may become more willing to pay same-old productivity minimum wage workers to flip burgers for our lazier selves.

Another all important and seemingly always ignored factor is that even if a raise in the minimum wage from $5.15/hr (really a foreign born worker, mostly Mexican, minimum wage -- Americans used to show up for that minimum wage the first time around: in 1939) to $10/hr cuts minimum wage employment in half: labor would still take home the same amount of pay -- albeit for half the hours.

Lastly, when the minimum wage (and other low end wages) have dropped so low that they amount to a minuscule fraction of the cost of GDP output (raising the minimum from $5.15/hr to $12.50/hr would add all of 3.5% to the cost of output -- about what we grow every couple or years -- giving 40% of American workers a raise!), then the dollar or half dollar a dose increase that is usually prescribed is liable to be below the sensibility level of such a fantastically productive economy.

When, Illinois recently raised its minimum to $7.50/hr, I and others noticed a definite up tick in business in our local Macs -- all in the third-world segment (Mexicans finally able to afford some of what they make?). At $12.50/hr ($2.50 more than the 1968 minimum) McDonalds profits might really take off -- never know until we try.

Posted by: Denis Drew | Link to comment | May 20, 2008 at 08:23 AM