When Capitalism and the Internet Make Food Better

There has been a flurry of activity in recent days from food companies responding to consumer demands to improve the quality of their products. New York Times provides a summary:

Chick-fil-A said on Tuesday that within five years it would no longer sell products containing meat from chickens raised with antibiotics…

A growing number of restaurant chains, including Chipotle and Panera Bread, have made commitments to serve meat only from animals raised without antibiotics, and consumers have responded enthusiastically…

Subway announced last week that it would eliminate azodicarbonamide, a chemical that commercial bakers use to increase the strength and pliancy of dough, but, as noted by the consumer crusader Vani Hari, is also used for the same purposes in yoga mats and shoe soles.

And on Tuesday, Kraft said it was taking sorbic acid, an artificial preservative that had come under attack by consumers, out of some individually wrapped cheese slices…

These are pretty exciting times. It looks like the Internet is continuing to help spread information and ignite and amplify voices to demand change in the marketplace. This is exactly what I predicted two years ago when the Internet facilitated a revolution in “pink slime” meat:

Consumers have always been able to demand products that businesses had incentives to supply. But now technology lets us join together in large enough numbers to demand that businesses stop doing sketchy things that they then have the incentives to stop doing, even if the slow-moving, lobby-infested government never says they have to.

It’s not perfect, and sometimes I think this technology also allows the public to unfairly criticize businesses or go too far, but in general I think it’s pretty awesome. Individual consumers are becoming more empowered than ever before, and I’m excited to see what we do next.

The last two years appear to have empowered individuals even further. And this empowerment continues to prove that consumers can make companies respond faster than government can; the FDA has dithered for decades in regulating antibiotic use and only barely took some limited, voluntary steps last year after an alarming CDC report about growing antibiotic resistance. But it seems to be the consumers who have ultimately extracted such “regulation” from a growing number of companies.

It’s hard to overstate how beautiful are these examples of capitalism creating good out of an industry that has long been associated with its underside. I recently read Salt, Sugar, and Fat, which details the last hundred years of companies competing to churn out cheaper, tastier, more addicting – and more health-destroying – products. (Sure, people choose to buy them, and most regulation would probably have been worse, but even the most hardcore libertarian has to at least admit that the Nash equilibria have not been very optimal.) I also recently read Fast Food Nation, which details the last hundred years of companies exploiting information and power asymmetries to hurt agriculture industry employees, pushing me the farthest to the left in my sympathies for labor movements that I have ever been (not that that’s saying much).

But if the twentieth century was marked by food companies competing to win the most customers by lowering the health quality of their products, perhaps the twenty-first century will be marked by food companies competing to win the most customers by improving the health quality of their products. When the customer cared most about price, taste, and convenience, they each tried to outdo each other by piling on more sugar or salt or sourcing chickens raised in the cheapest (and dirtiest) available environment. But when the customer cares more about health, they now try to outdo each other in removing questionable items from their ingredients so that they don’t lose their customers to whoever’s doing more.

This won’t lead to utopia. The consumer is a contradictory, multi-headed beast. Plenty of consumers still want cheap, junk food and will only pay so much for improved health. Even individual consumers do not consistently know what they want in the ever-changing dynamics of food choices. But the recent activism and responses proves there are plenty of relatively painless ways companies can improve their options once the demand shifts the equilibria just enough to make it so. I suspect there is still plenty of low-hanging fruit on this tree.

And one of the key differences is the increase in technology. The Internet allows us to learn more about how companies are creating their foods and what might be problematic about those processes (reducing information asymmetry). The Internet also allows us to group together to amplify our voices loud enough to be heard on these matters, encouraging companies to respond to the slightest worry about a drop in quarterly profits before it even happens (reducing power asymmetry). And that is a beautiful thing.

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The Triple-Fail Right-Wing Freakout About Our New Dictator Obama

I didn’t watch the State of the Union.

I was too busy playing with my son and doing an Insanity workout with my wife. I’ve started trying to fast from news and social media every Tuesday to spend more time on other things and I’m noticing that I don’t miss much. News doesn’t happen that fast and I might add Thursdays and maybe even Saturdays to the mix.

So on Wednesday I decided to listen to last year’s speech and this year’s speech back-to-back to get more perspective and detach myself even further from its fleeting role in the useless daily news cycle (h/t @NickSacco55).

It was amusing to hear Obama talk in 2013 about protecting us from hackers who “infiltrate private e-mail” - right before we learned the NSA was doing just that – but I mostly noticed how little the speech changed in 2014. Same congratulatory statistics about oil output and manufacturing jobs and the Affordable Care Act. Same hopes to do something about gun control and climate change (though mentioning fewer specific climate disasters after a less disastrous year). Same misguided economic calls to equalize pay and raise the minimum wage (apparently $10.10 is better than last year’s $9).

And, yes, the same appeals to Congress to pass the bills he wants and the same promises to circumvent them if they don’t play along.

Of course, this didn’t stop the right-wing outrage machine from declaring the Glorious Appearing of Obama the Dictator. Our patron saint of hyperbole, Glenn Beck, said “every American should write in those diaries that this was the State of the Union where our President declared he would become America’s first dictator” because “he said he would use his executive power to get his way” and “simply seize control and do whatever he wants to do.”

Beck is claiming that this week we saw a uniquely frightening emergence of a presidential dictator. But Beck is wrong, and so are his thousands of listeners, commenters, and sharers. In fact, they’re triply wrong.

1. Obama does not see himself as an all-powerful dictator.

Obama said, “Wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do.” Potentially frightening expansion of power, sure. But that was right after saying “Some [steps] require Congressional action.”

Obama is talking about using his executive power to do things, but that list of things clearly does not include anything that requires Congress. That’s why Obama said he would issue an executive order to raise the minimum wage for federal contractors, but he called on Congress to pass a bill for the rest of America because he knows he can’t do that! If Obama really said he would “do whatever he wants to do” to “get his way,” why did he keep asking Congress to pass the bills he wants?

Let’s also not forget Obama’s recent New Yorker interview, where he recognized that

“a lot of people have been saying this lately on every problem, which is just, ‘Sign an executive order and we can pretty much do anything and basically nullify Congress.’ …Before everybody starts clapping, that’s not how it works. We’ve got this Constitution, we’ve got this whole thing about separation of powers. So there is no shortcut to politics, and there’s no shortcut to democracy.”

Maybe those are just words, but maybe so were his other words. Maybe we should look at his actions, instead. After all, even if Obama doesn’t think he has unlimited power, he still may think he has a lot more than we want him to. But is that something new that’s worth writing down in our diaries?

2. Obama has already been circumventing Congress.

It takes a short memory to conclude that Obama’s 2014 SOTU speech indicated some new expansion of power. Just last year, Obama said that “if Congress won’t act soon to protect future generations, I will.  I will direct my Cabinet to come up with executive actions we can take, now and in the future” to curtail climate change. He celebrated “a new executive order that will strengthen our cyber defenses.” And while Obama only begged Congress to vote on background checks in his 2013 address, Biden had talked about “executive action that can be taken.”

Yet somehow some of the same conservatives who freaked out in 2013 that Obama was getting ready to ban all guns by executive order are now freaking out that in 2014 Obama just now declared his dictatorship! I suspect these conservatives reconcile their cognitive dissonance with a classic Appeal to the Future. Obama has always been about to do terrible things, but when those things never actually come (pretty sure I can still buy a gun at Wal-mart), they just forget about it and move on to the next terrible thing. Now he’s gonna be a dictator. Any day now!

Obama issued 147 executive orders in his first term. Maybe we should focus on how bad all of those actually may be instead of living in a bizarro world where he hasn’t issued any but he’s about to issue some really bad ones!

3. Lots of presidents have been circumventing Congress.

But not only is “going around Congress” nothing new for Obama, it’s nothing new for presidents in general! In fact, Obama issued fewer first-term executive orders than George W. Bush (173), Bill Clinton (200), George H. W. Bush (166), Ronald Reagan (213), Jimmy Carter (320!), Gerald Ford (169), Richard Nixon (247), Lyndon B. Johnson (325!), John F. Kennedy (214), Dwight D. Eisenhower (266), and Harry S. Truman (504!!).

Now all executive orders are not created equal, and executive orders aren’t the only way a President can expand the power of the executive branch, but it’s a decent proxy to show that Presidents have been expanding their power for a really long time, and even in recent years, I think it’s pretty difficult to claim that Obama has expanded the power of the Presidency more than George W. Bush did from 2000 to 2008.

It’s actually a pretty good litmus test for partisan demagoguery to see which executive orders you freak out about. Believing that Obama is the first president to just now start doing whatever he wants is wrong on every possible level.

Of course, the expansion of presidential power is a huge issue of legitimate concern. But the frustrating irony of the triple-fail partisan freakout is that this myopia is the very thing that allows such expansion to occur. It strains the credibility of the “obstructionist” opposition that justifies the expansion to the other side. Too may conservatives gave Bush a pass on his CIA droning and NSA spying and TSA checkpointing just as too many liberals have given Obama a pass on his entrenchment of all three.

Thus as Obama talks about wielding executive powers, too few on either side pressure him to unilaterally limit the very abuses he has the power to undo – the liberals because they’re ignoring it and the conservatives because it would force them to admit that Obama’s already been wielding powers that Bush started in the first place. So we don’t ask for specifics on Obama’s vague platitudes about “prudent limits on the use of drones” and “reform” of “our surveillance programs” because we’re too busy freaking out about the more attractive soundbytes about “where I can take steps without legislation.”

The above cartoon is more amusing and less hysterical than the Beckian outrage, but it conveniently ignores that Obama still talked about going through Congress on many things, that he’s already been ignoring Congress on other things, and that he’s not doing anything that different from pretty much all of his predecessors.

But partisan demagoguery can’t handle that much truth.

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Global Climate Snapshot: State of the Planet 2013

Happy New Year and welcome to the second annual installment of the unofficial Global Alarm Bell Index (GAB Index). I know you’ve all been desperately waiting to see if the GAB Index increased in 2013, so let’s get started.

Global Temperatures: 3 Alarm Bells


NOAA says 2013 was the fourth-warmest year on record, and the hottest since 2010. Nine of the warmest ten years on record have occurred since 2000. Etc, etc. What they don’t say is that all of those warm years have been measuring within such a narrow range that the increase in temperatures has all but stopped – the decade 2004-2013 was only 0.1 degree Celsius warmer than the decade before it. This is the lowest decade-to-decade increase since 1982, and barring a ridiculously record hot year next year, the decadal increase will drop safely below 0.1 degree / decade in 2014.

It’s going to take a lot more than the pace of the last 15 or so years to hit the predicted 2-6 degrees of warming by the end of the century; we’re barely on pace for 1 degree right now, and even scientific journals like Nature are starting to publish acknowledgements of the pause and trying to explain why their earlier models didn’t predict it. Some say the heat is all hiding in the ocean and will be reflected in the surface temperature data any time now, but until that appeal to the future actually happens, I’m arbitrarily dropping the alarm bells from 4 to 3.

Arctic Sea Ice: 8 Alarm Bells

After a very alarming record low in 2012, the arctic sea ice made a remarkable recovery in 2013, leaping back to only the 7th worst minimum ever with record increases in both percentage and absolute terms. This provides at least some assurance that things can get better more quickly than we previously thought. Some are quick to claim this as a complete recovery, but the records were only possible because the previous values were so low, and the overall trend is still markedly downward. So I’m only going to arbitrarily dial back the Alarm Bells here from 10 to 8.

Antarctic Sea Ice: 0 Alarm Bells


The other side of the globe continues to paint a different picture. 2013 Antarctic sea ice remained above average for the entire year, reaching the second-highest minimum on record and the third-highest maximum on record. Meanwhile, the top five maximums and top six minimums in the 35-year record have all come since 2000, pointing to an continuing increase in ice.

Claims that the ice is thinning and will start to show up in the surface data remain an appeal to the future. There are also claims the the land ice is really what matters because it is melting and contributing to sea level rise, but as we shall see below, that’s not an increasing concern yet, either. I’m going to have to stick with 0 Alarm Bells for the second year in a row.

Atlantic Hurricanes: 0 Alarm Bells

Despite early predictions of an active season with 7-11 hurricanes and 3-6 major ones, the 2013 Atlantic Hurricane season was a complete dud, with 0 major (Category 3+) hurricanes for the first time since 1994 and the fewest total hurricanes (2) for the first time since 1982.

atlantic-hurricanes-2013This makes the 10-year moving average of major hurricanes the lowest since 2003, hinting that we may be coming off a peak that looks remarkably similar to a sinusoidal peak from the 1950′s. The record year of 2005 (Katrina, et. al.) is increasingly looking like an outlier and not a new normal; in fact, the United States has not had any major hurricanes hit landfall since that season, a “drought” that is its own record. If activity picks up instead of continuing to decline we will raise the alarm bells again, but for now I am arbitrarily dropping them to 0.

Pacific Hurricanes: 3 Alarm Bells

In my efforts to include as much data as possible (and do as little cherry-picking as possible), I have decided to add Pacific ocean activity to my snapshot, especially since it is much larger than the Atlantic Ocean. It’s also much more complicated – I’m still getting used to the hurricanes, cyclones, and typhoons and how to understand all the trends therein.

I can tell you that the 9 hurricanes and 1 major hurricane of the 2013 Pacific season were respectively average and below average for the area and well below the record 1992 year. Furthermore, the six strongest Pacific seasons are all from 1992 and earlier, suggesting things are not getting worse.

But apparently that’s just the eastern Pacific. The western Pacific typhoon season spawned an above-average 13 typhoons with 5 “super” typhoons. In particular, Hayian/Yolanda devastated the Philippines and apparently was the strongest storm ever to strike land and may have the strongest wind speeds ever recorded. So that’s something. I’m still looking for good historical data on year-by-year seasonal activity.

So, in summary, the Eastern Pacific was weak but the Western Pacific was strong and involved a record-breaking storm, which I think arbitrarily warrants like three alarm bells.

US Tornadoes: 0 Alarm Bells

The 2013 tornado season was a dud, with perhaps the fewest tornadoes on record in the United States. There were only 28 F3+ tornadoes, which will add to the trendless major tornado graph below once the NCDC adds another little blue line on the end that will be very similar to 2012′s:

There was a notable tornado that struck Oklahoma, apparently being the widest ever reported, but since the data is not as extensive on that I don’t think it warrants any alarm bells. I am going to arbitrarily assign 0 alarm bells for tornadoes for a second year in a row.

Sea Level Rise: 2 Alarm Bells

My source for sea level data has only updated through the first nine months of 2013, where they have the sea averaging about 2.63mm higher than 2012. The Colorado site still says the same average long-term rise of 3.2mm/year that it said a year ago, which is still a pace of far less than half a meter by the end of the century (in other words, not that scary).

But that’s assuming the increase stays constant. Of course, it could accelerate, but if anything it’s actually decelerating. The data’s not long enough to do much with 10-year moving averages, but the decade ending in 2013 only averaged a rise of 3.13mm/yr which is slightly less than the 3.26mm/yr for the decade ending in 2003. The last five years also had a lower increase in average from the previous five years than the two previous five-year periods.

OK, enough with the arbitrary data crunching. The point is that the measured sea level is rising, but very slowly and definitely not accelerating anywhere near fast enough to reach terrifying predicted levels. So I’m going to keep the modest 2 alarm bells from sea level rise for a second consecutive year. If the deceleration becomes more pronounced next year, I may drop it lower.

US Drought: 3 Alarm Bells

Drought in 2013 wasn’t quite as bad in the US as 2012, but over half the country was considered to be in some level of drought for almost the entire year, according to the Drought Monitor. Depending on which level of droughtness you look at, the metric either went up or down a bit, but still pretty elevated compared to the rest of this century so far.

us-drought-2013I decided that my arbitrary Drought Point Index was double-counting extreme levels of drought, so I arbitrarily re-jiggered it and come up with 139 Drought Points for 2013, which is slightly lower than the 141 Drought Points from 2012, but the last two years are still easily the two highest values in the (short) 13 year history.

That’s the most quantifiable data I can find. However, NCDC has their own Palmer drought indexes here, and they all look something like this…. a.k.a. no trend at all and definitely no drought as bad as the 1930′s:

us-palmer-drought-2013Actually these Palmer indexes don’t even make the last two years look as bad as 2000-2002, much less the 30′s or even 50′s. So even though I like my Drought Monitor stats because they precisely assign four levels of drought across the whole country to percentages of two decimal places each, I’m gonna have to place more emphasis on these longer-term data points which do not indicate any long-term increase in drought; we had a really bad PHDI score in 2012 but it didn’t stay bad two years in a row. So I’m gonna arbitrarily drop the drought alarm bells from 5 to 3 this year while continuing to not weight them very highly in my arbitrary Global Alarm Bell index.

Total Adjusted 2013 GAB Index: 2.61 Alarm Bells

Global temperatures are pausing; sea level rise is decelerating; Antarctic sea ice is still growing; hurricanes and tornadoes and drought still aren’t increasing. The only thing that’s still really bad is Arctic sea ice but even that’s not as far gone as we thought.

So after carefully feeding these arbitrary values into my arbitrary Alarm Bell Weighting Algorithm, I have calculated a Total Adjusted 2013 Global Alarm Bell Index of 2.61 Alarm Bells, which you will notice is a remarkable decrease from the 2012 GAB Index of 3.46, giving us a Global Alarm Bell Anomaly of -0.85 Alarm Bells! To help you properly adjust your concern level, let me reprint my handy dandy Alarm Bell Response Chart:


I guess you all did such a good job planting trees last year that all you need to do this year is double-check on that ocean to make sure your house can handle a storm surge that might be 2.5mm higher than last year’s.

Thanks again for reading this far. We’ll re-visit the State of the Planet in about a year and see how those alarm bells are ringing.

Posted in Global Climate Snapshots | 1 Comment

Appealing To The Future

As partisans and ideologues wage their linguistic wars, I’m always looking for ways to cut through the fog and optimize the journey towards truth. There’s a particular type of argument I often see that I think is particularly weak. I’m calling it appealing to the future.

An “appeal to the future” is when a partisan pundit gets really excited about a prediction, proposal, promise, or otherwise unrealized claim, and perfunctorily elevates it to prophetic status. This claim is used as evidence that the other tribe’s policies or politicians are evil personified, or evidence that my tribe’s policies or politicians are gloriously brilliant.

The only ingredient a pundit usually needs for an appeal to the future is a “source.” It doesn’t really matter if the source is a CBO budget analysis, a corporate quarterly forecast, a scientific paper, or an anonymous insider tip. Nor does it matter whether or not the pundit has previously considered the source to be trustworthy. The only purpose of the source is to use its projection as a starter to generate emotional validation of the pundit’s pre-existing worldview. (In fact, the really brash “thought leader” pundits do not even need a source; a gut feeling about upcoming trends tenuously linked to any arbitrary news is good enough.) Generally, the claim does not pan out as predicted, but by then the pundit has moved on to a new appeal to the future to generate the next round of outrage or excitement.

For Example: Obamacare

Obamacare has already been through several rounds of respective “imminent failure” and “imminent success.” Supporters recently seized on a report that insurers planned to spend $500 million on advertising. Pundits like Paul Krugman practically hailed it as the second coming of Obama. I didn’t realize this advertising plan was “the shoe we’ve all been waiting to see drop,” but apparently it was and it’s great news! “Insurers think this is going to work.” Never mind that the same pundits are usually criticizing insurer actions. Never mind that we could just as easily interpret the advertising rush as a ploy of desperation, or that it may not actually happen, or that it may not actually have any significance if it does. Never mind that previous future appeals – por ejemplo, that people would learn to love Obamacare – have thus far failed to materialize. Why worry about present reality when we can always appeal to a newer, hopeful future?

Not that Obamacare critics have been much better. The presently unfolding several million cancelled health plans wasn’t bad enough, so some started appealing to predictions that 80 million people will be seeing their plans cancelled! “Several experts predicted it,” and ”the administration estimated” themselves. Never mind that conservative critics laughably dismissed other, rosier predictions from the administration. Never mind that even that prediction requires some creative stretching to interpret it in such a devastating way. Never mind that if this prediction fails to materialize, we’ve already moved on to a new appeal – surely the insurers are bound to start revolting any time now! Why worry about present reality when we can always appeal to a newer, hopeful future?

For Example: Climate Change

The climate change debate is full of this appeal. It seems like I’m always seeing someone tout some new evidence for climate change that, to my surprise, is not actually a new data or observation but a new projection about the loss of some habitat or an increase in some bad weather metric that could occur forty years from now!

In a widely circulated piece on Slate’s Bad Astronomy last year, Phil Plait attempted to debunk the claim that there’s been no global warming for 16 years. In my opinion, he did not prove that it “has not even slowed,” but what’s really ironic is that among the actual observations (like the record low Arctic ice cap in 2012), Phil used an appeal to the future that was just too emotionally validating not to pass up: “It is getting so hot in Australia right now that weather forecasters had to add a new color to the weather maps.” Never mind that the actual temperature ended up being seven degrees cooler than predicted and well within the old color range. Never mind that the “new color on the map!!!” hysteria is still circulating the Internet as evidence of climate change (an interesting example of an appeal to the future from the past!)


The projections that feed appeals to the future are not inherently useless. But they are not generally intended to be used as arguments for an ideological case, and they are often weaker than other types of arguments available for making those cases. All future projections are by definition a type of calculated knowledge, which is generally more likely to be wrong than direct knowledge. But if appeals to the future are so often unreliable, why do partisans keep using them?

The incentive to create appeals to the future stems directly from the ideologue’s exaggerated worldview in which his views are sacred truth and his opponent’s views are evil lies. In the actual present and complicated reality, many of the ideologue’s predictions and prescriptions are not as wonderful as he imagines; neither are his opponent’s quite as harmful as he believes. So the only way to continue to validate a worldview that is not actually validated by the past or the present is to grasp at any potential indication that the future is about to prove it all right.

“The economy under my president may not look so hot now, but just you wait – this new survey shows a confidence uptick that proves the recovery is just around the corner!” Or: “the economy under their president may not look like it’s collapsing yet, but just you wait – the latest Fed statement betrays a weakness that proves the end is just around the corner!” And round and round it goes.

Posted in Philosophy | 3 Comments

Universal Income

A basic income (also called basic income guarantee, unconditional basic income, universal basic income, universal demogrant, or citizen’s income) is a proposed system of social security in which citizens or residents of a country regularly receive a sum of money unconditionally from the government. (Wikipedia)

When I first heard about “universal income,” I laughably dismissed it as extremely naive leftist thinking that was so patently ridiculous that it bordered on satire. The government gives everybody a standard amount of money? Where does that money come from if not the very people it is being given to? Wouldn’t such a policy totally destroy any incentive to work? And then who is going to pay for it?

However, I have since learned that the idea has some interesting substance to it, and it has actually been promoted by several prominent conservative and libertarian thinkers throughout history. Discussion of the old concept has seen much revival across the Internets lately due to global economic trends and the emergence of experiments in various places that have been providing interesting results.

Continue reading

Posted in Philosophy | 2 Comments

Help Make Sure The Government Moves Ethanol Regulation In The Right Direction For Once

Last month, the EPA proposed reducing the ethanol mandate in 2014, due largely to unexpected decreases in fuel demand that would force producers to mix increasing percentages of ethanol into a smaller pool of fuel, with potentially dangerous consequences for older engines. News reports are calling it a victory of Big Oil over Big Ethanol, but regardless it’s a good piece of common sense finally coming out of government energy policy that has ignored the consequences of coddling ethanol for far too long. Commentators on the left and the right seem to agree.

Well, the regulation is now up for public comment until January 29, 2014. A quick perusal of the viewable comments shows plenty of pro-ethanol voices pushing to undo the rule, although contra the “Commenter’s Checklist” many of them don’t seem to have actually read the (long and wordy) proposal itself, which explains the rationale for the proposal and makes multiple requests for reasoned or knowledgeable arguments to change them.

I call on all citizens interested in sound energy policy to petition the EPA to keep or even further reduce the proposed mandates, so that we may finally begin to turn the tide against this boondoggle that has damaged the environment and economy for all of us in order to benefit a smaller set of connected energy interests. Read the Proposal And Submit Your Comments Now!

I believe this proposal is not likely to be overturned anyway, but the more voices rise up in support of the reduction, the easier it will be to carry the momentum to Congress to officially do away with the mandates altogether. And while I have no love for the special interests of oil companies either, I am not too concerned about their incidental benefiting from this proposal; electric cars and solar power have their days numbered, anyway.

Here is my comment. I used the multiple uncertainties stated in the report to strengthen my case. Please do not copy and paste it but feel free to use it as a basis for referencing relevant sections of the proposal to write your own. I encourage others with more knowledge about some of the specific environmental and economic costs of ethanol policy to elaborate on those in their comments, and to try to explain how those costs justify the regulation’s waiver authority and how those costs conflict with the regulation’s stated objectives.

I fully support the proposals to lower the RFS levels for 2014, and I fully support the broad interpretation of the waiver language required to justify it. In fact, I believe a broader interpretation that these requirements may “severely harm the economy or environment” would result in requirements that were lowered to 0.

Regarding the objective of “enhanced energy security,” the recent unexpected surge in domestic oil production has already provided far more security than these renewable fuels may ever do. Regarding the objective of “reductions in greenhouse gas emissions,” I believe there is significant uncertainty that ethanol even leads to a net reduction when all the costs and externalities are taken into account. Regarding the objectives of “economic development and technological innovation,” I believe the recent increases in gas mileage and the rise of electric vehicles are contributing more and have the potential to contribute to more innovation and development. Finally, I believe goals of energy security must be balanced with food security. When unpredictable drought strikes, every portion of the food supply that is diverted into fuel exacerbates supply and price shocks for the remaining portion, increasing the potential to “severely harm the economy” as increased food prices increase hardship and poverty both here and around the world.

I would also like to note that reducing the RFS requirements to 0 would fully satisfy the stated desire to “minimize the need for adjustments in the statutory renewable fuel volume requirements in the future,” as it would be unnecessary to reduce the standard further from 0. However, as such a severe reduction is unlikely, please consider the following recommendations regarding the proposed volumes.

Regarding cellulosic biofuels, I believe the proposed requirements are too optimistic due to the stated “common delays” in production ramp-up. Furthermore, even if the range of volumes (8-30 million ethanol-equivalent gallons) is as accurate as possible, I do not believe the Mean value of 17 million should be used, which implies there is a 50% chance that production will be below this value. It is inappropriate to mandate a level with such high odds of failure. I believe the 25th percentile of 12 million is the most appropriate of the options presented in Table II.C-2.

Regarding biodiesel production, I believe the proposed requirement of maintaining the 1.28 billion level is reasonable but perhaps even optimistic due to the likely expiration of the significant $1/gallon tax credit and the stated lack of estimates of production and demand if the credit is not extended.

Regarding ethanol production, I believe the estimates are too optimistic. I believe it is hasty to entirely dismiss E0, which has increasing demand as evidenced by the website pure-gas.org, as well as the record increases in electric car sales, which are essentially equivalent to “E0″ as far as ethanol consumption is concerned. I also believe it is imprudent to assume that the very recent “conditions that have led to” the favorable “price relationship” of E85 over E10 will “continue in the future,” due to the historic relationship and a complete lack of explanation of what those new conditions may be and why we should expect it to become a long-term trend (or if it is even a trend at all since data was only available from two states). I also believe it is quite likely that non-ethanol fuel demand will continue to trend lower than currently estimated, and it should be remembered that the whole reason these standards are being lowered is that fuel demand has been overestimated in the past.

For all of these reasons I would support the 25th percentile of 15,084 million gallons as the most appropriate of the presented potential approaches, although I certainly would suggest even lower values for increased security, economic, and environmental benefits to the United States overall.

It is also important to note that a reduction in minimum production requirements does nothing to affect “maximum” production, or rather the potential for higher production levels if consumers demand it. If these renewable fuels are truly cleaner, cheaper, and better as claimed by proponents in many vigorous but shallow comments, reducing the minimum should have no effect as consumers could and would still rush to demand higher volumes via FFV/E85. If, however, these fuels have significant risks in supply, demand, and/or externalities, reducing the minimum could prevent severe negative effects on both the economy and the environment.

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What The Pundits Are Still Missing About Bitcoin

Pundit Joe has changed his mind from thinking Bitcoin is completely useless to admitting that it’s at least very useful for buying drugs. Pundit Matt still thinks that’s not really very useful at all.

I don’t blame their narrow impressions; until recently I didn’t grok much more than that (besides the currency’s limited supply, which has no appeal to non-libertarian/Austrian types). But now that I understand Bitcoin a little better, I think pundits like Joe and Matt are still completely missing some of the more revolutionary and universally appealing aspects of the elegant but complex protocol behind the surging cryptocurrency. Bitcoin potentially solves several key weaknesses of the modern financial system that are more easily understood at the extreme ends of the scales.

Bitcoin is a quick, safe, and cheap way to transport very large sums of money. I’m not personally familiar with how hard it is to, say, instantly transfer thousands of dollars to a relative on another continent, although trying to do it with cash is clearly difficult. I don’t how long it takes for wired funds to settle, or how much it costs, or what banks you have to go through, or what information you have to provide. But I’m highly confident that it’s much easier with Bitcoin (especially on a Sunday) – essentially, you just enter the address and wait a few minutes for the next mine block to verify it. It’s difficult to overstate the possible value of lowing these barriers.

Bitcoin is a quick, safe, and cheap way to transport very small sums of money. This end of the spectrum I understand better. The light bulb went on for me when I saw redditors randomly tipping each other in cents and realizing there was basically nothing else like it. Credit cards have enabled the e-commerce explosion, but the overhead of transaction costs rules out tiny purchases. Even with miner fees for quicker verification, Bitcoin obliterates the current system’s minimum viable transaction level, which I think is bound to unlock a whole platform of previously infeasible business models.

Of course, the nearly feeless nature of Bitcoin transactions could appeal to retailers doing business of all sizes; it’s just easiest at the very large and very small levels to see the strengths of cryptocurrency’s cheap, instant, and secure transfers over the weaknesses of the existing system’s expensive, slow and insecure transfers.

Naturally, these advantages attract illicit activities among its early adopters, but as far as I’m concerned that’s beside the point. And cryptocurrencies like Bitcoin, or whatever later supplants it, still face downside risks like scalability, the opportunity cost of relying on electricity, or the third-party add-ons necessary to encourage common adoption (Bitcoin transactions themselves are inherently secure, but storing the result is definitely not.)

But there are enough fundamental advantages that I don’t think optimism is only for the cranks and crackheads. The utopian dreams about ceding power from governments and bankers to the common man may be a little, well, utopian, but to dismiss the whole thing entirely risks sounding like the old doubters of the newfangled Internet who said “no online database will replace your daily newspaper.” Sometimes you just have to wait for the pundits to figure it out.

(Full disclosure: I currently possess 0.00001726 BTC as well as an undisclosed amount of USD.)

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Bitcoin Resources

I have a set up a page for links I have discovered or bookmarked about Bitcoin at


(Disclaimer: Includes a shameless referral link for buying them to try to capitalize on the euphoria, not that I expect anyone to use it and at this point I have not bought any myself.)

I think it’s especially fun to track predictions, many of which are being proved true or false rather quickly. Let me know if you have any more or better resources than the ones I have at the link above.

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