A new view on specialization

Posted in Climate Change, Conservation, Politics at 3:27 pm by justakim

Endemic species are ones that exist in small geographic areas. The most common examples of these are creatures that live on islands, where the species adapt to life on their little plot of land and become distinct from those on the mainland, or other islands. Similarly, animals that live on the tops of mountains effectively live on an island where there may be other environments not too far away that would suit them, but there is a vast distance between mountaintops that they are not well equipped to cross through.

For a long time, the notion of an endemic species evoked some sense of pity in me. It brings to mind images of flightless birds being devoured by invasive snakes, rats, humans, or whatever else might come their way. Little chicks helpless, unable to deal with change, species so specialized they can’t live outside the bounds of their little space walled off from the rest of the world.

But another word for specialization is efficiency. Endemic species have become so effective at living and reproducing in their habitats that they’ve given up on some flexibility in order to thrive in a very specific place. I can marvel at how the Olympic marmot co-evolved with the plants in the Olympics and make homes in extreme conditions where they have to hibernate more than half the year. I have to wonder at what great evolutionary marvels the dodo developed that we will never know about. I have to be impressed that despite the many adaptations polar bears now have, they can still re-learn how to fish like grizzlies.

One can consider companies in a similar way. Some companies develop in a certain business environment, and so long as there aren’t any drastic changes, a company could be very successful by specializing to that economic environment. This is why companies hate uncertainty. Not only does a business want to be able to plan ahead, the less change there is, the more a business can focus on improving efficiency to thrive in a specific regulatory, political, and economic environment. The more things change, the more businesses have to invest in being able to change their strategies to adapt to the changes in their world. Overall, there’s a tradeoff between being extremely efficient and being adaptable.

Both extremes can be admirable.


Can you balance the California budget?

Posted in Politics at 8:31 pm by justakim

Try it out for yourself.


I keep thinking there must be more options, that there are more things to be cut, more places to shave, more details that could lead to some good solution, but I know the truth, that the referendums, extensive earmarking, and federal laws (ironic given California’s attempts to have stricter legislation elsewhere) form the walls of a very nasty little cage.

I went with 18bil in cuts and 6bil in tax increases (gas, of course). I kept the parks and community colleges too. I’m not dead-set against other taxes, but something has to be done about the base budget. No furlough band-aid is going to fix it.


Inflatable House

Posted in Politics at 9:16 am by justakim

I was speaking to a friend in Australia who had been house hunting for months and suddenly she wasn’t anymore. I asked her what happened.

It turns out that her government was giving out a first-time home owner incentive and that she was going to use it to buy an apartment. But the incentive was set to expire sooner than most applications could get through the pipe so this incentive was increased and extended ‘indefinitely’.

This caused the real estate market to respond by raising prices, negating the benefits of the incentive because a significant number of home buyers would have exactly that much more money available to buy a house with. Gotta check that elasticity before setting up those incentives.

I’m sure we wouldn’t mind a misguided housing price bump around here.



Posted in Cat, Financial, Politics at 10:21 pm by justakim

The financial market craziness makes me wish we were back to relatively harmless presidential politics. Someone sent me this story about a honey-stealing bear just before McCain told his overused bear boondoggle story on Friday.

Here’s some consolation political humor and some cute.


Unintended Consequences 2: Creative thinking

Posted in Climate Change, Politics at 7:35 am by justakim

As the EU combats climate change, Eastern European countries want previous economic setbacks to count.

The EU plans on cutting emissions by 1/5 of 1990 levels by 2020. Targets were distributed to each country based on their 2005 emissions.

Seven of the Eastern European countries want their economic downturn in the 1990’s to count as ‘reductions’ in emissions. They want what they did not emit in the past to count towards their goal.

“By 2005 a significant part of the 20 percent target — namely 7.9 percent — has already been realized,” said a proposal drafted by Hungary ahead of next week’s meeting of environment ministers in Luxembourg.

“In the opinion of Bulgaria, Estonia, Hungary, Latvia, Lithuania, Romania and Slovakia these early reduction efforts should be duly recognized and rewarded in the effort sharing and/or ETS proposal,” added the proposal, obtained by Reuters.

Being rewarded for having had economic trouble? Wow. As a friend noted, maybe we can still get something out of the Great Depression.


What About Gas?

Posted in Climate Change, Energy, Politics, Resources at 11:08 am by justakim

“You’re an economist. What about the gas price?”

There’s two reasons I don’t talk much about the gas prices. One, every economist out there is talking about it, and some like env-econ do a fine job of covering every ounce of it. The other reason is that I don’t think just making it cheaper is the answer, which is something many people don’t want to hear. This does not mean I don’t sympathize with people who are adversely impacted recently, but that I think we made less-than-optimal decisions and now we’re paying for it.

Inspired by a conversation last week, here’s my bit on gas prices:

Me: Even now, our gas prices are so darn cheap relatively speaking.
Cohort 1: Cheap? Compared to what?
Me: Compared to Europe, for a start.
Cohort 2: Actually, I just saw a report recently about how we’re 100+ expensive…

Don’t believe us? here are the numbers in question. We’re around 108. European countries have high prices because of high taxes that are used to develop other transportation infrastructure, like mass transit. 18 cents doesn’t compare to a couple bucks. If the price goes up by a dollar here, that’s a significant increase while in Europe, it’s a smaller percentage. Price shocks are bad. It is harder to adjust to a sudden and possibly temporary price change than to shift production and consumption to a predictable future. If you’d known in advance that prices would suddenly go up, you would have planned for it. If you’d known all your life that gas is expensive, you would have made life choices accordingly. Your city might not look the same.

I know that there are people who don’t want anything to do with those ‘socialist’ European countries, but one might consider that our price is much closer to Russia’s.

When I was twelve, I laid out the itinerary for the family vacation. I took out some maps. I hit as many national parks as I could within our two week time frame. I was very proud of myself. I find the summer vacation as important as anyone. But I don’t think the American way of life requires that we remain vulnerable to the whims of a volatile, cartel-operated market. That just doesn’t seem American to me.


Stimulus Package

Posted in Cat, Politics at 8:11 pm by justakim

First, I’d like to introduce our line of economic experts.

Micro, Macro, Metrics
You already met StatsFish

MacroCat has this to share:
Stimulus package: I ate it

My adviser doesn’t like lolcats. He must be a dog person.

We did actually spend it this weekend on:

* track mounted lights over futon–works great with the projector overhead
*replacement hiking shoes: today’s event convinced me of the need
* various odds and ends at REI (SO CROWDED)
* possibly membership in the local mountaineering club; if anyone knows if Lassen counts as a glaciated peak, lemme know 😉

I’m a terrible hiker. I need more beer.


The Future of Cars

Posted in Climate Change, Energy, Politics, Pollution, Resources at 9:23 pm by justakim

Ars Technica posted a nice description of the governors’ conference on climate change from last week. It is widely known that California has attempted to set its own emissions standards and has been blocked federally.

Perhaps in anticipation of the promises of all three presidential candidates, there is a new venture to bring Norwegian electric cars to California.

The joint venture’s first product will be Think City, an emission-free, 95 percent recyclable car with a maximum speed of 65 miles an hour. Plans call for a U.S. launch next year.

Lane said he expects the Think City, which will be priced under $25,000, to compete with Toyota Motor Corp’s popular Prius hybrid.

Their plan include charging stations to support the 50,000 cars they hope to be making annually.

If the US government won’t take the lead in promoting a market for cleaner cars, who will? …China?

The question of hybrids and other fuel efficient vehicles arises because the world’s automakers are gathering this week for the Beijing Auto Show, an event that is growing in clout as the world’s second largest auto market is set to be No. 1 soon.

But executives are waiting for Chinese officials to lay out a set of incentives that could jump start a product line…

Given how much we’ve used China as an excuse not to sign onto Kyoto etc, it would be terribly embarrassing if the world had to turn to China to take the lead. On the other hand, a switch to a purely electric car might not be so great an idea, for China.

Nissan Motor Co Chief Executive Carlos Ghosn told reporters the Japanese automaker is approaching the Chinese government, among the many it is in talks with, to push for a pure electric vehicle solution to battle pollution.

China depends heavily on coal to produce electricity. Emissions offset from the tailpipe will just appear elsewhere.

Hey, if the federal government doesn’t want California to dictate standards for the entire country, there might be appeal to dictating standards abroad.

Whatever it is that the government does, sensible Americans would prefer that the government do it to somebody else. This is the idea behind foreign policy.

-P.J. O’Rourke

1. Emissions by country
2. Chinese energy consumption
3. US energy


Old News

Posted in Energy, Politics at 7:58 am by justakim

Ever wake up in the morning with a sinking feeling as something dawns on you? As if the impact of some news a few days ago hadn’t really sunk in?

This morning, I woke up with a delayed reaction to John McCain’s gas tax cut. I merely dismissed it at the time, rather than reacting with appropriate dismay. This news is so old, I can’t find a direct article without putting effort into it.

I love the guy, but what? If gas was elastic (demand is responsive to price) and the price goes up, we’d just drive less. If gas was inelastic (demand not responsive to price) and the price goes up, we’d just complain and drive the same. Now what would the gas companies do if taxes are removed? Charge more, of course! Sometimes it is true that companies pass prices along. Only when we’re willing to suck it up.

So, McCain wants to suspend gas taxes over the summer. Not only is that an unrealistically short time frame for government action, it also doesn’t give much time to react, which means that this idea is a no-go. But the question remains: Does he think that this truly would be good for the country and thinks government should hop to it, or does he just see a harmless opportunity to express sympathy? Neither sounds good.


Adding More Corn Fuel to the Fire

Posted in Energy, Health, Politics, Resources at 10:19 am by justakim

As I guiltily sip my soda, I spied a post by David Reevely over at Ecolibertarian on feeding pigs junk food because of they ‘can’t afford’ to feed them corn anymore, because, get this–the ethanol subsidies on top of the corn farming subsidies. Well, I’ll let him go where I dare to tread.

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