Yotta Point

Election 2014: Why Did Democrats Lose the US Senate?

I decided to return briefly from hibernation to do some analysis on this. My findings are posted in this presentation:

Election 2014: Why Did Democrats Lose The US Senate?

 

P.S. The PDF version is here.

Fallacies Galore in Ridley's Scarcity Fallacy

A weekend ago, Matt Ridley wrote an engaging piece for the Wall Street Journal that was originally titled "The Scarcity Fallacy" - the title has since changed to "The World's Resources Aren't Running Out". The basic thesis of his essay is this:

Ecologists worry that the world's resources come in fixed amounts that will run out, but we have broken through such limits again and again

In the body of his essay, Ridley says:

Ecologists call this "niche construction"—that people (and indeed some other animals) can create new opportunities for themselves by making their habitats more productive in some way. Agriculture is the classic example of niche construction: We stopped relying on nature's bounty and substituted an artificial and much larger bounty.

Economists call the same phenomenon innovation. What frustrates them about ecologists is the latter's tendency to think in terms of static limits. Ecologists can't seem to see that when whale oil starts to run out, petroleum is discovered, or that when farm yields flatten, fertilizer comes along, or that when glass fiber is invented, demand for copper falls.

...and adds:

I nowadays lean to the view that there are no limits because we can invent new ways of doing more with less.

I tend to generally agree with Ridley's premise that innovation of various kinds has allowed us to extend the use of resources or find alternate ways to meet our needs. I very much share this optimistic view of humanity and future possibilities.

That said, some of the claims in his essay made me wonder how well researched the essay is and how accurately it represents the facts or mainstream views on some of the areas of discussion. Since I write now and then on climate change, I figured I'd pick that as an example to discuss Ridley's essay - sure enough, a quick read of Ridley's claims makes it evident his discussion is amazingly superficial and creates many fallacies of its own in terms of how it represents the scientific/economic thinking on this subject. In fact, I would not be surprised if his discussion of topics other than climate change were likely as superficial and fallacy-ridden, because the last time he wrote on similar subjects in 2012, the claims were problematic to say the least.

Let's start with these two passages in his current essay (I've highlighted some portions in bold text):

This disagreement goes to the heart of many current political issues and explains much about why people disagree about environmental policy. In the climate debate, for example, pessimists see a limit to the atmosphere's capacity to cope with extra carbon dioxide without rapid warming. So a continuing increase in emissions if economic growth continues will eventually accelerate warming to dangerous rates. But optimists see economic growth leading to technological change that would result in the use of lower-carbon energy. That would allow warming to level off long before it does much harm.

It is striking, for example, that the Intergovernmental Panel on Climate Change's recent forecast that temperatures would rise by 3.7 to 4.8 degrees Celsius compared with preindustrial levels by 2100 was based on several assumptions: little technological change, an end to the 50-year fall in population growth rates, a tripling (only) of per capita income and not much improvement in the energy efficiency of the economy. Basically, that would mean a world much like today's but with lots more people burning lots more coal and oil, leading to an increase in emissions. Most economists expect a five- or tenfold increase in income, huge changes in technology and an end to population growth by 2100: not so many more people needing much less carbon.

Dictionary.com defines "fallacy" as follows:

Whisk - the Open Table of Car Ride Services

Part of an Entrepreneur Q&A Series [see past Q&As here: GLTYR]

Whisk (http://www.whisk.me) is a startup currently based in New York City that aims to change the way transportation providers offer, and customers use, car ride services. It has a few competitors such as Uber, Lyft, Sidecar, and Hailo although their business models are different. Whisk was founded by three people - Michael Ibrahim (CEO), Ram Trichur (President), and Vivek Chandran (CTO). Ram happens to be a close relative - so I did a Q&A with him about what he and his team are trying to do with Whisk.

Yottapoint: What is Whisk?

Ram: We are an on-demand ride service. Customers can request a ride through their smart phone and control the entire ride experience through the Whisk App. We are also quickly becoming the go-to technology platform for the industry, transforming the way in which current car service operators run their business.

Yottapoint: Why did you pick this name? I noticed there are a number of other small companies with the same name [Whisk (NYC), Whisk (SF), SF Whisk] - do you think this might make it difficult for people to reach you or learn more about your services?

Ram: We had a healthy debate about that! A couple of things influenced our decision. In the context of moving people, the name intuitively conveys taking someone to their destination quickly. We were also able acquire a nice domain (http://whisk.me) which builds on that sentiment. We also felt that a discoverable brand is less important for a mobile only service ...once someone has the App on the phone, it becomes a habit, and a majority of new customer acquisition comes from existing customer referrals and press mentions (vs. Googling for something generic like "car service"). There was of course the downside that searching for Whisk on the app store will be a tough fight for relevance ....we are happy that after just a few months now we are the top result on the Apple app-store and the second result on Google-play store if you type in Whisk.

Yottapoint: How/why did you come up with the idea for Whisk?

Ram: The co-founders of Whisk are New Yorkers. Though we have a good public transportation system, getting a cab in NYC is difficult especially if the weather is bad, you have young kids or it is the notorious "shift change time" for taxis. Going in a taxi is also not a very pleasant experience always. You are cramped for room, some drivers are just rude, and if you have a problem - all you can do is call 311. My colleague and I at McKinsey discussed this in late 2012. We realized that there were other well-funded players in the market - but after much research, we concluded that the market was still nascent and there was a tremendous opportunity to partner with the industry to build something really big.

Yottapoint: Do you operate only in NYC right now? If so, any plans to expand to other cities?

Ram: NYC is 40% of the ground transportation market in the US. We are well on our way to establishing a solid base here. In the next several months we will be expanding to a few other metros.

Yottapoint: You seem to have several competitors – Uber being the big one, but also Lyft, Sidecar, Hailo. Can you help us understand the key differences between Whisk and these other services?

Some Readings on Income and Wealth Inequality and Intergenerational Mobility

I have been trying to develop a deeper understanding on the topic of income and wealth inequality and wanted to bookmark for myself some pertinent research and posts.

Josh Barro [Business Insider]

• 95% Of Income Gains Since 2009 Went To The Top 1% — Here's What That Really Means
• David Brooks is Wrong About Inequality
• Sorry, Libertarians — Inequality Does Matter

Andrew Berg, Jonathan Ostry [IMF]

• Equality and Efficiency
• [with Tsangarides] Redistribution, Inequality, and Growth
• Inequality and Unsustainable Growth: Two Sides of the Same Coin?

Matthew O'Brien [The Atlantic]

• Why The 1% Don't Feel Rich

Miles Corak [University of Ottawa]

• Income Inequality, Equality of Opportunity, and Intergenerational Mobility; PDF
• How to Slide Down the ‘Great Gatsby Curve’: Inequality, Life Chances, and Public Policy in the United States

Kathleen Geier [Inequality Matters]

• Ten facts you should know about global economic inequality

Colin Gordon [Dissent]

• The Computer Did It? Technology and Inequality
• Who Pays? Taxes and American Inequality

David Howell [The New School]

Disaster Costs, GDP and Climate Change

Roger Pielke Jr. recently published an article in Nate Silver's new 538 website titled Disasters Cost More Than Ever But Not Because of Climate Change. You should click the link and read his entire piece but, his thesis is essentially the following:

1. The cost of disasters tied to extreme events is indeed rising rapidly - but once you normalize this to the increase in the wealth of the world as represented by global GDP (we own a lot more "stuff" now than before) - the trend basically vanishes
2. Disasters lead to high loss of life where property damage is the lowest and highest property damage in places with lowest loss of life. As examples he cites the following: "U.S. hurricanes, for example, are responsible for 58 percent of the increase in the property losses in the Munich Re global dataset" and "Consider that since 1940 in the United States 3,322 people have died in 118 hurricanes that made landfall. Last year in a poor region of the Philippines, a single storm, Typhoon Hayain, killed twice as many people."
3. Richer countries are in a better position to protect people's lives in times of disasters at the expense of higher property losses. He says: "As countries become richer, they are better able to deal with disasters — meaning more people are protected and fewer lose their lives. Increased property losses, it turns out, are a price worth paying"

His article was roundly criticized by some well known climate scientists, as summarized by Emily Atkin at Think Progress (additional discussion in this post by Laurence Lewis at Daily Kos). The crux of the criticism as I see it:

1. Improvements to deal with disasters (e.g., newer building codes and improved construction, better forecasting, better preparedness and responses) over the years reduces disaster damages/costs (lives and property) and this is not properly reflected in Pielke's assertions - this has been pointed out to him before, yet he continues to publish his misleading claim
2. Unlike Pielke's claims that somehow climate change is not causing an increasing frequency of extreme events, there are several situations where this is in fact the case

Pielke responded to these critiques in an email to Think Progress (same link as above):

GLTYR - a New App for C2C, C2B, B2C, B2B Multi-Media Communication

Part of an Entrepreneur Q&A Series [see other Q&As here: Whisk]

UPDATE on 3/9/14: Added some responses from Sudhakar to user questions in the comments section.

I was recently catching up with my good friend - the multi-talented Subra Sudhakar - a tech industry veteran, CEO of the startup School Cues and an accomplished Indian classical musician who has played with leading Indian musicians over the years. As it turned out, I discovered he had just co-founded another startup - called GLTYR. Having heard from him about it, I checked it out myself and was impressed because I think this product will be a catalyst for more advanced personalized video/audio/text communication in the coming years. Here is a Q&A I did with Sudhakar about his new product/company (with minor edits for grammar/clarity).

Yotta Point: What is GLTYR?

Sudhakar: GLTYR (pronounced “Glitter”) is a mobile app that helps create and present your message to make an emotional connection with your audience. Your message comes alive with a picture, audio and video and up to 900 characters of text. What makes this app even more exciting is that a GLTYR message can be created and sent out in as little as three to five minutes (depending on the length of your message) - entirely through the app.

Yotta Point: How did you come up with the idea for GLTYR?

Sudhakar: The genesis for GLTYR came from a combination of five technology and behavioral trends –

1. The average human attention span is two minutes or less in absorbing and retaining information.
2. Content will ultimately end up being created and consumed on a mobile device, rendering the desktop obsolete in several scenarios or applications
3. The world is going mobile so quickly that there is a greater probability that a coffee shop owner in a remote village in Mongolia will use a smart phone and not a computer to create and send out quick messages / digital fliers that would drive his brand across the globe in less than a few minutes.
4. There are several fields where the concurrent confluence of audio-video-visual-text integrated with human creativity is required to make a strong emotional connection with the audience. These fields or areas include commercials, dating profiles, resumes, food, performing arts, marketing fliers, greetings, invitations, business cards, elevator pitches, value propositions etc.
5. The cost of producing audio-video-visual commercials is prohibitively expensive for the average consumer or a small business. The cost of purchasing, filling out and sending greeting cards is also getting more expensive. Plus, these cards are unemotional, with a limited shelf life on the refrigerator door. We would like to make it ridiculously affordable for people to create messages / commercials / cards / resumes on the fly which integrates picture, audio, video and text and push it out in less than a few minutes to thousands of people.

Yotta Point: Why should anyone consider using GLTYR? Aren’t there other apps out there which have similar capabilities?

Unionization and Jobs/Wages in Today's Economy

Evan Soltas’ blog posts and chart, following his Bloomberg View article ("Is the U.S. Better Off Without Unions?"), are quite interesting and worth reading. I tend to agree with his observations on why unionization has declined in the US (and apparently other developed countries) in the second half of the 20th century and I also question the focus on unions as a key method of addressing unemployment and wage pressure challenges faced by US workers. However, I am not convinced that Soltas' ideas to address the issue are that effective. So, I'd like to offer a different perspective on this subject given my background as an executive in the Silicon Valley tech industry. This perspective focuses on the after-effects of stock-based compensation on various macro factors.

First, some context. In Silicon Valley, tech labor has tended to be non-unionized for quite some time. Additionally, over the last two decades, I've seen software design, hardware manufacturing, hardware design and other functions move outside of the US (I have also been in positions where I have moved certain jobs overseas). The reasons are simple. There are qualified workers who can do these jobs outside the US, typically at a much lower cost. Moreover, when a company's competitors move jobs or are located overseas in cheaper labor markets, for financially competitive reasons the company ends up having to do the same. Additionally, some of the larger tech companies that sell directly in non-US end markets need workers in those regions. Despite this trend, and despite many tech jobs being non-unionized, Silicon Valley has managed to maintain a decent jobs picture (example) for well-paid employees - I think primarily because US tech companies continue to be at the forefront of driving significant innovation where more experienced US workers have an advantage over workers is job markets outside the US. My experience suggests that at least in Tech, where workers tend to be paid relatively well because of their skills, unionization has not been a significant factor in driving employment or wage trends. I can’t extrapolate from this to infer that the tech experience should be applied to every other industry but it is suggestive that we need to look for deeper explanations for increases in income inequality and decline in unionization in the US and other economies.

The Future of News and Media

Venture capitalist and entrepreneur Marc Andreessen has a series of interesting tweets discussing his perspective on the future of the news business. It starts with this premise:

Starting point: I am more optimistic/bullish about future of news industry over next 20 years than almost anyone I know. Will grow 10x-100x.

He explains in several tweets how he sees the new business changing in the future. In a nutshell he believes the following (this is my translation or summation of his tweets):

• News should be run like a business; profitability is key to producing quality content
• The news industry is experiencing tumultuous change because incumbents are losing, in his view, "monopoly" or "oligoploly" status in the "control of distribution" and thus pricing
• The advent and global popularity of the internet has led to multiple forms of media - TV, cable, newspapers, etc. - seeing their futures converge on the internet (where there is a proliferation of relatively free content). As a result, they are losing market & pricing power when it comes to distribution.
• There has been a large expansion in the customer base for news - and this growth in (sales) "volume" will (partly) counter the loss of revenues from widespread competition. Therefore, he says: "Big opportunity for news industry in next 5-10 yrs is to increase market size 100x, drop prices 10x. Become larger & much more important."
• Those that offer most breadth or depth in coverage will be the most likely winners in this new paradigm - those in the middle more likely to lose. Based on this, the business models he believes that will survive are the following: Advertising, subscriptions, premium content, conferences and events, cross-media, crowdfunding, bitcoin for micropayments, philanthropy.
• He adds: "the more noise, confusion, and crap -- corresponding increase in need for trusted guides, respected experts, quality brands"

News and media are one of my favorite topics and it is hard to do justice to this topic in a single & quick post, but I'll try. Since I have a fair amount of direct experience in this area and have enjoyed many discussions over the years with many friends interested in this area - like Peter Daou - I'll say the following in response to Andreessen's thoughtful observations.

The Hockey Stick and The Climate Wars: A Brief Review and Climate Change Discussion

I recently read Professor Michael Mann's book "The Hockey Stick and The Climate Wars". There are several reviews of the book online, a couple of examples being Shawn Lawrence Otto's review at The Huffington Post and Jeff Masters' review at Wunderground. However, I found the book compelling, engaging and valuable on several fronts and felt it was worth making a few observations here. If you are a person who is not entirely familiar with the recent history and politics of climate science, it offers a highly readable and informative summary that captures some of the progress and setbacks over the last two decades or so. Mann's passion for climate science comes through very well in the book and in the process he also addresses in some detail the following aspects of climate change.

I. Scientific Process, Climate Politics & Denialism

1) The IPCC scientific process and rigor which is quite substantial to the point of making the reports somewhat conservative - despite the seepage of occasional errors into IPCC reports

2) The right role of true skepticism in scientific inquiry - and how this differs from the practice of climate change denial (or climate denial) that uses a combination of (a) a veneer of skepticism, (b) often incompetence in basic statistics and (c) the use of deliberately misleading data

• Mann cites several examples in his book; a perusal of blogs like Deltoid, Skeptical Science, Open Mind and others provides interminable, yet dark, amusement on this front

3) The slow but gradual evolution of scientific knowledge, a process that is self-correcting and generates better understanding over time

• Mann offers many interesting examples from the climate change field contrasting them with the typical demands of the blog/media/news cycle that might immediately trumpet a new research paper as if it almost single-handedly destroyed the scientific consensus, without waiting for the time-intensive scientific process to peer assessment, correction and learning

4) The role of the key players in the fossil-fuels sector - whose future assets, fuel reserves and stock prices are at significant risk if meaningful climate change policy actions are taken - and that of other ideologically aligned wealthy donors in funding climate denialism

5) The deplorable, often personal attacks on climate scientists who publicly speak or write about the serious manifestations and consequences of climate change through willful misrepresentation of their or others' work and/or false accusations of fraud or misconduct

• As Mann shows, these attacks are usually fronted by certain politicians (usually Republicans close to the fossil fuel industry), a handful of scientists who are typically not climate science experts, and often by denialist writers, bloggers and pseudo-scientists. Mann also suggests that the manufactured controversy has often coincided with time periods when the U.S. Congress was poised to pass climate change legislation - thereby making it easier to kill such legislation.
• The attacks and their consequences are examined in much detail given Mann's personal experience and the character assassination campaign he and some of his peers have faced over the years; he particularly explores the controversy over the "hockey stick" and the Climategate episode
• Mann makes reference to another excellent, must-read book on this particular topic - "Merchants of Doubt: How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming" by Naomi Oreskes and Eric Conway

6) The increasing use of blogs (e.g., RealClimate) by climate scientists to communicate the science to the public and media, and push back in real time on false, distorted or misleading presentations of climate data

II. Science of Climate Change

7) The role that various natural (e.g., solar activity, volcanoes, various oceanic oscillations that operate over multi-year, decadal, multi-decadal or multi-century periods - such as the multi-year oscillation called ENSO or El-Nino/La Nina) and human-induced/anthropogenic factors (CO₂, sulfur dioxide - SO₂, etc.) play in influencing global warming and climate change

• Mann walks readers through how different factors can affect climate and temperature in different ways, thereby providing a nuanced discussion of climate change and warming, which is often missing or understated in websites arguing against the evidence for anthropogenic global warming

8) The role of temperature proxies - such as tree rings, ice cores, lake sediments, etc. - in the estimation of local, regional and global average temperatures in past centuries and millennia when accurate temperature measurements were not available

• In particular, Mann devotes considerable effort to explain the famous "hockey stick" graph (which has since been independently validated by both the National Academy of Sciences as well as recent work by NOAA's NCDC) and discusses topics such as the so-called Medieval Warm Period, urban-heat island (UHI) effect, and others which play an important role in climate change debates

9) The use of statistical frameworks such as principal component analysis (PCA) in the understanding of underlying phenomena and variables driving temperature changes

Mann's book tries to cover all that and more and does a really nice job overall in giving the reader an expansive view of the nuanced subject of climate change, while passionately conveying the real urgency of acknowledging the dangers of ongoing and future warming and the need for immediate action. I highly recommend this book.

In terms of where the book could have been improved, I would suggest the following thoughts for Mann and other climate scientists to consider. Unless someone is an avid follower of the field of climate change and global warming, it is difficult to grasp the nuances and subtleties inherent in understanding climate, weather and the variables that can cause them to shift. I think Mann's book can be further improved, perhaps in his next edition, by more explicitly delving into common points of confusion for people I have talked to, such as:

• Dueling reports of record heat and record cold (recent examples): This confusion might persist because typical discussions on global warming, even by scientists, fail to adequately inform people that warming refers only to averages and that record heat and cold can co-exist in a warming world as long as record heat events significantly outnumber record cold events as the average temperature rises
• Reports attributing certain seemingly contradictory climatic and meteorological events to global warming (e.g., less snow v. blizzards, flooding v. drought, etc.): It's important that scientists invest more time in developing communication to explain how both droughts and severe flooding could result from warming, that both blizzards and reduced snow can be a consequence of warming, etc.
• Why seemingly modest increases in global temperature (e.g., 0.8 degrees C) should result in significant increases in extreme events: It wasn't until the excellent work of Hansen et al. in 2012 did a clear framework become available to average readers like me to explain to others that a small shift in averages can lead to a large increase in probability of 3-sigma, 4-sigma and beyond temperatures, which in turn can lead to more extreme events over time, relative to past experience
• Lack of clear understanding of the role of additional factors that cause otherwise CO₂-influenced temperature changes to be non-monotonic: The recent work by Skeptical Science is very welcome in this context but it is rare to see scientists use simplified means of communication on such an important topic

Additionally, I would like to urge Mann and his colleagues/peers to invest more time in discussing & explaining the role of the potent greenhouse gas methane (CH₄) and the pros and cons of migrating our energy use from fuels like coal to natural gas, especially given the increasing concerns of methane leakage during natural gas extraction.

Finally, while I very much like blogs like Real Climate, climate scientists need to do a better job of communicating their findings and implications in plain English. Again, Skeptical Science is doing a fantastic job on this and newer initiatives like Climate Communication are welcome and overdue but scientists need to be more tuned to this need going forward.

The Latest on Global Warming and Climate Change

Updated 1/20/13

Here are two new, excellent short videos (about a couple of minutes or so each) that explain (a) how global warming due to anthropogenic greenhouse gases is happening in parallel with natural variability of temperature due to factors such as volcanic eruptions (e.g., El Chichon and Pinatubo) and oceanic oscillations (e.g., El Nino and La Nina) and (b) how the average temperature derived from various paleoclimatic temperature proxies (e.g., ice cores, corals, etc.) are positively correlated with thermometer-based temperature records.

The video explaining natural versus human contributions to climate change is the one below from the outstanding blog Skeptical Science, and discussed in posts such as this one "16 More Years of Global Warming". Also worth reading are related posts from the last couple of years:

• "Why Wasn't The Hottest Decade Hotter?" by Rob Painting at Skeptical Science
• "Resolving Confusion Over the Met Office Statement and Continued Global Warming" by Dana Nuccitelli at Skeptical Science
• "Did global warming stop in 1998, 1995, 2002, 2007, 2010?" at Skeptical Science
• "Video And Charts Make Clear The Planet Is Still Warming — And There’s Only One Way To Stop It" by Joe Romm at Climate Progress

A broad team including several universities and NOAA's National Climatic Data Center (NCDC) just published this paper - Global warming in an independent record of the last 130 years (David Anderson et al.) - in Geophysical Research Letters and a discussion of their paper at the NOAA website - "Independent Evidence Confirms Global Warming in Instrument Record". Skeptical Science also has some analysis and discussion of this paper at "Nature Confirms Global Warming and Temperature Record Accuracy". An additional resource worth reading is this 2006 report by The National Research Council of the National Academies - "Surface Temperature Reconstructions for the Last 2,000 Years".

Here is a short video summarizing the results:

Additional posts definitely worth reading as we enter 2013 are below.

• "Contrary to Contrarian Claims, IPCC Temperature Projections Have Been Exceptionally Accurate" by Dana Nuccitelli at Skeptical Science
• "Visualising the role of natural variability" and "What will the simulations do next?" by Ed Hawkins at Climate Lab Book
• "Communication of the role of natural variability in future North American climate" by Clara Deser et al. in Nature Climate Change [also see this paper]
• "2012 in Review - a Major Year for Climate Change" by Dana Nuccitelli at Skeptical Science
• "NOAA And NASA: 2012 Warmest ‘La Niña Year’ On Record, Sustaining Long-Term Climate Warming Trend" by Think Progress
• "Sun and climate moving in opposite directions, says leaked IPCC report" by John Cook at Skeptical Science
• "Top Ten Global Weather Events of 2012" by Dr. Jeff Masters at the Weather Underground (Wunderground) blog
• "Appendix: The Science of Climate Change" in the "Federal Advisory Committee Draft Climate Assessment Report Released for Public Review"
• "Global Carbon Budget" (detailed version here)

Happy New Year!