Technology policy involves understanding the rules that technology and technology companies live and die by. Understanding those rules influences America's competitiveness, and fairness in application of technology to the needs of a society. As a former high priest in the world of high technology business, the author believes that lack of transparency is inherant to the inner workings of technologies powering major industries. This implies that government has a role in policing wrongdoers who would take advantage of this lack of transparency.
A relative newcomer to political activism, the author recently composed and achieved passage at the 2008 Hawaii state democratic party convention of a resolution advocating an Obama approach to financing the cost of Plug in Electric vehicles. (link)
The author's first patent was for a low cost braille printer affordable by any school district. In the 80's these printers cost upwards of 20K. Using his own funds, he reverse engineered, rewrote the control firmware, and modified the mechanism for a mass market printer so that a printer could be mass produced for $500. An local entrepeneur recognized the business opportunity, and successfully productized and marketted it in the US and Europe paving the way for a new generation of low cost braile printers used by school districts today. Later patents involve computational linguistics- some of these are embodied in software used today by hundreds of millions of users world wide.
Ignorance is never a rich soil to plant seeds in. And we have a lot of cultivating ahead of us.
What's a smart grid, and if there were a build one as part of a massive stimulus package to build infrastructure, what could be built in a 2 year timeframe?
How does Tom Daschle's idea of quasi-governmental agencies relate to Health Care?
If you relied on pundits, you'd never know. Maybe Wikipedia... but wait- the information there is pretty slim pickens too. The agenda list on Change.gov generates a lot of questions for people, and ignorance about the fundamentals of the problems and solutions will make the task ahead much harder.
As an idea to not let the huge army of obama volunteers disipate and to get some real e-democracy collaboration going, on Wikipedia I have created a Wikiproject named Obama administration to strengthen the Wikipedia articles that will be referred to in response to Barack's agenda items as the legislation comes up for hearings etc.
The location is http://en.wikipedia.org/wiki/User:J_JMesserly/WikiProject_Obama_administration
Sign up in the participants section if you'd like to help people to be well informed on the topics that the Obama agenda is focused on addressing.
Thanks
Here is a link to the Hawaii Democrat Resolution that proposes a revenue neutral approach to funding plug in hybrids and the alternative energy to power them with an electricity surcharge similar to what an equivalent gallon of gasoline costs to go the same distance.
If the calculations are correct, then this could be done at the national level, resulting in an accelerated transition to plug in hybrids.
The proposal has citations to Dept of Energy and government testing of hybrids to back up the case.
http://policy.wikia.com/wiki/Resolution:_Self_paying_vehicle_loans.
Gore can and should propose Transportation fuel displacement as a mechanism for financing his plan that his July 17 speech described.
One substantial source is the revenue that will otherwise go to OPEC for gasoline for our cars. Next year, we will send $700 billion out of the US to pay for oil. If we put in policies that effectively discourage the sale of non plug in hybrids ("PHEV"s) in the US by 2012, assuming a 3% turnover in the vehicle fleet*, by 2019 we will have 24% of the fleet in plug in hybrids. Today, newer cars account for 1.7 times the mileage driven as older vehicles (source). If PHEV owners effectively are paying $2.40 per gallon instead of whatever gasoline costs by then (it's already $8 per gallon in the UK), it is not unlikely that these newer cars will be driven substantially more often than the current multiplier of 1.7. But let's say the multiplier is only 2.0X. Lets also conservatively assume that gasoline prices by some miracle are held down to an annual increase of 5% per year. If you run the numbers, this means that we save 3.12 trillion dollars that would have otherwise gone to OPEC by the year 2021.
That's where we get the 3 trillion dollars to pay for Gore's proposal.
Al gave another great speech yesterday. Take a hard look at it. This plan puts the stake in the ground where it needs to be.
It's time to take a cold shower in the numbers and wake up. As Barack's mom would tell him, "this is no picnic for me either, buster". I think Obama knows very well how big this is. $150 billion is nowhere near what we need to meet the goal of energy security.
I think we are ready for the challenge, but let's be realistic- this is going to be tough. Gore's decade sounds like a long time, but it isn't when you consider the production bottlenecks involved with moving from fossil fuel electricity generation. Don't picture Apollo. Picture WWII.
Our total electricity output is 3 terawatts. 50% is from coal, and 20 is from Natural gas, so Al is talking about replacing about 70% of our capacity, or 2100 Gigawatts of power. Gore rightly highlights in his July 17 speech the interstate energy transmission network we need to move power around the nation. We don't have that right now. To get power from Geothermal, Solar, and Wind energy from the western states that are rich in these sources to the big cities in the east and along the coasts we need a whole new ultra high voltage transmission network. Never mind the cost of that generation for a moment- look at the cost of the transmission network.
An example, a recent USAEE report* stated that it would cost $31 billion to ship 16 GW of wind energy from the western regions of the Midwest ISO to states in the Northeast. That's 5% of Obama's 150 billion right there, and that is "only" 16 GWs. Remember- we have to replace 2100 gigawatts of capacity.
That's just the transmission problem. Besides money, we have a problem with time.
Many folks focus on Detroit's failure to invest aggressively in alternative power for cars as evidence of a conspiracy. The conspiracies take many forms, but they bring us to the counterproductive state of demonizing precisely the industries we need to fight our way out of the hole that republican administrations have dug us into.
If you think about it, it's not just that Detroit killed the electric car, but they weren't even capable of seeing what they needed to do regarding their profitability against the invasion of Japanese cars in the 70s. It is common populist rhetoric that there was an intentional conspiracy to defeat alternative transportation technologies by the car makers.
Was it also an intentional conspiracy that led Detroit to lose substantial market share to the Japanese beginning in the 70s? I think not. It was really the usual suspects: a conspiracy of arrogance and stupidity, and like many of us who have been managers in large corporations, we know that this is not an unusual state for businesses to be in.In any case- to the point. I think we have to bypass the populist rhetoric however true or tempting it is to leverage for short term gain. Focusing on moving from where we are, we need to look beyond subsidies. Detroit is asking for beefier subsidies for Plug in Hybrids, because the power carriers (batteries or fuel cells) are extremely expensive. Sure, at least in the case of Lithium batteries, they pay for themselves over the life of the car.
But guess what. It isn't just Detroit that focuses on the near term. It's us. Most consumers won't pay the extra $15,000 for an electric car even if over the life of the car they will wind up paying less.
The numbers are stunning. On average, we use 1.68 gallons of gas per vehicle per day. Even if all cars got 30MPG, the cost of fuel for the 155,000 miles for average vehicle lifetime means that vehicle will use 5167 gallons of gas. If by some miracle gas prices can be held to an increase of only 10% per year, that means that the cost of the gas for such a "fuel efficient" car will be $37,045 (10% increase starting at $4.50 over 10 years yields an average price of $7.17 per gallon).
At the national average of 10 cents per kilowatt hour, the electricity needed to go the same distance with the same performance will cost you $5,166.
Hmmm. $37,045 or $5K. Which would you rather spend?
Oh. But the battery costs you $15K. So guess which car gets driven off the lot.
The one that costs $20K and costs $37K for fuel, rather than the $35K car that costs $5k for fuel.
People make poor decisions like that every day. The "pay later rather than pay now" mentality is exactly what was wrong with detroit and exactly what is wrong with consumers. It is holding us up with moving aggressively over to plug in electrics, and will guarantee that we will sent 700 billion overseas in the coming year to pay for oil, and 1 trillion the year after that.
A trillion here a trillion there. Soon it adds up to real money. If we don't get smart about the threat to our long term security, our nation is going to divest itself of all of its wealth. Really, it is that simple.
Now many of you would like to couch this as a green, environmental issue, but it isn't. This is about national survival. It may seem dry and boring, but we can't conserve or bicycle or mass transit our way out of this one. No new research is needed.
Plug in hybrids exist now. They make sense financially, but only if folks take the long view. Government can help with that, but not with piddling $3000 giveaway subsidies. No- if government simply provided financing to erase the up front barrier that the cost of the battery presents, then customers would flock to a car that delivered for them the equivalent of $2.20 per gallon of gas.
There are a variety of ways of implementing this. In my state, our democratic party passed a resolution to execute exactly such a program. I have discussed it on my blog here and on democrats.org, and I have placed the text of it along with discussion on the Policypedia wiki here.
To: Steve Robinson, space policy spokesperson for the Obama campaign.
Dear Steve,
Thank you for your long time support of Barack and your service in advising him on science policy. I am primarily interested in energy independence issues, but as a close follower of Space Policy (I admin the Space and Aeronautics Policy blog on democrats.org), I would like the opportunity to offer some observations about the recent debate you participated in at the International Space Development Conference.
Thanks for your time in considering these options for future confrontations with space spokespersons representing the Bush-McCain " Vision for Space Exploration" that will doom us to a 30 year delay in space exploration. An example of how I employ these themes and rhetoric may be found on the democrats.org space and aeronautics policy blog. Link to a recent post here. Although I am for reconsideration of Constellation/Ares in favor of heavier investment in climate change monitoring and remote exploration of space, contrary to the appearance given in this post, I am not an opponent of manned missions. In fact I fiercely believe this gets us a significantly more aggressive space policy using the same resources budgeted by the Republicans. I foresee manned bases on the moon and mars, but see the base construction and extraction of local resources largely conducted by vehicles operated remotely by humans on earth. I personally believe it is the fastest and smartest way to extend humanity's dominion to the inner and outer planets.
Warm regards,
John
The proposal I have been blogging about for the last few months passed today at the Hawaii state democratic convention as a resolution. The final text is below, extended text contains supporting Q&A material. The technical name at the convention was Resolution BUSIN 08-18 "Self paying Electric Vehicle Loans". Text:
“Self paying Electric Vehicle Loans”A Hawaii Democratic Convention Resolution
Whereas sales of gasoline will drain $1.8 billion from the Hawaiian economy in the coming year at the rate of $4.00 per gallon;
Whereas importing oil is now more expensive than paying for electric cars powered by alternative Hawaiian energy sources;
Whereas moving to electrical cars powered by Hawaiian alternative energy would result in cheaper energy for car owners, and result in jobs for Hawaii;
Whereas the barrier to moving to electric cars is the sticker shock due to the expense of the car battery;
Whereas this price per unit of energy is sufficient to pay for Hawaian alternative electricity for plug in electric vehicles charged at a rate up to 34 cents per kilowatt hour and also pay for the price of the battery;
Whereas consumers would be motivated to purchase an electric vehicle if there were a self paying loan that made the price close to that of a comparable vehicle;
Whereas "self paying loan" means a loan offered by financial institutions with incentives from the State of Hawaii whose repayment is made by surcharges on the electricity used to recharge the electric vehicles;
Whereas surcharge means that the consumer pays for electricity for the vehicle at a rate lower than what they would pay for gasoline, but higher than what they pay for normal household electricity.
Whereas energy for electric vehicles shall be charged separately on the electrical bill surcharged at a this higher rate, and this extra money shall be used to pay back the loan and pay for the electricity at a rate sufficient to motivate Hawaiian alternative energy production.
Whereas qualifying electric vehicles are plug in vehicles with sufficent battery capacity to run 20 miles of urban driving on a single overnight charge;
Whereas qualifying electric vehicles have separate metering using inexpensive current technology such as wireless broadband communications such as EVDO chips used in cell phones;
Whereas Hawaiian alternative electricity means electricity generated from energy sources that are not imported to the islands, such as wind, solar, geothermal, hydro, wave action, and biomass grown on the islands;
Be it resolved that the Democratic Party of Hawaii supports policies that will ensure that a new kind of car loan is made available by 2010 to electric car customers which is repaid from the fuel savings from using Hawaiian alternative electricity and;
Be it further resolved that copies of the Resolution be transmitted to the Democraticmembers of the State Legislature, the Governor, the commissioners of the Hawaii state Public utilities Commission, the Chairman of the DNC, the Platform Committee of the Democratic NationalConvention, and the Mayor of the City and County of Honolulu.
Our local Campaign organizer, Brian Schatz is running for our state party chair and he had some wise words last night in his speach at a large meet up we had here in Honolulu to watch the Kentucky and Oregon returns.
He made the point that we have to move from this just being a one time surge of enthusiasm to retaining folks and channeling the enthusiasm into an ongoing thing for our local party. It was an excellent point. Standing in stark counterpoint to his message was my experience at a local precinct meeting I drove to immediately after the Obama event.
We spent nearly the entire meeting on procedural matters- when and where the next meeting would be dominated an unusual amount of time, an extended speculation about some state campaigning rules that no one present had any expert knowlege of, and so on. I probably shouldn't be blunt, but honestly, it was mind numbing, and I wondered to myself how other new folks would feel after attending several of these meetings. I kept looking for the next button. At one point I suggested that many topics could be discussed on the local precinct web site in the form of Blog posts usings software like what the DNC, Obama and Hillary sites are using.
I was simply suggesting the physical meeting process could be augmented by online discussions for those who have the access.
There was a lot of skepticism, but I regard this resistance is transitionary noise. We must move forcefully towards demonstrating transparency and the effectiveness of getting involved online.
I am especially skeptical of the flame wars that go on at the DNC site, and the lack of any substantial policy discussions any of the sites. You have to go to the major blogs like dailykos etc for that sort of thing, but we really should figure out how to do this on party sites.
People really care about local issues, but there is no way they can connect the dots between anything they do online and changing something that is happening locally. That has got to change. I am going to be looking at getting PartyBuilder on our local site, but to be honest I have doubts not just about how well we can "connect the dots" online, but how we can do it in a way that is not so dull that our traffic doesn't go into the toilet.
It's tough especially in the local culture to get people to write things online. Folks are unusually circumspect even in daily conversation unless they already know you.
It shall be an interesting journey to make this work, and we are only beginning on this path.
We'll see.
If successful the following plan for Hawaii could be used at a national level by the Obama administration.
This relates to plans for accelerating the adoption of alternative energy generation and replacement of gasoline as a transportion fuel. It focuses on the financing issue. The following rules have been crafted to implement the intent of the state energy policy I proposed in request for advice I posted last month. This is similar to an idea advanced by the Center for Progressive Policy and more explicitly by Brattle Group. I do not favor utility ownership as the principle analyst (Peter Fox-Penner) does, because such a structure encourages utilities to cherry pick high mileage consumers. My proposal pools all consumers and batteries are paid off in aggregate.
I sit on the Hawaii Democratic state party committee for Business and Economic development and shall be advancing resolutions and policy positions along these lines at the state convention next month.
Note that the proposal is entirely revenue neutral. No new taxes are raised, and all parties (utility, consumer, car manufacturer and finance institutions) are guaranteed profits in exchange for their participation. There is no such thing as a free lunch. The loser in this program are oil producing countries. The program redirects the 1.6 billion that Hawaiians will send to oil producers and channels it instead to benefit the parties: utilities, consumers, car manufacturers, and financial institutions.
The general approach of the rules follows the scheme in economic theory known (for what reason I cannot fathom) as "Mechanism design". It's just a fancy term for the idea that you don't tell businesses how to play the game- you just design the rules of the game so that when the businesses compete, the outcome conforms roughly to the social outcome you desired. So for example, the policy doesn't mandate that the local utility must provide these loans. It makes it in their economic interest to do so, but if they don't third party companies can compete with them. It's their choice.
Rules to be implemented in legislation follow. Any input or criticism welcome. This version is evolving and may have little relation to future versions. If interested in current expression of the proposal, please contact me.
*Note that the rate at which alternative energy is charged can be adjusted depending on the risk vs. stimulus that legislators are comfortable with. If gasoline remains at $3.80 per gallon and batteries do not become cheaper, this rate cannot be sustained. However, GM states that by 2010, their batteries will cost .63 per watt and last 10 years**. The savings from these batteries alone will offset the higher cost of the early batteries, even if gas prices go no higher. In the UK, gas prices are over double those of the US, runnin at about 1.1 pounds per liter, and that works out to $8.20 per gallon.) Under this plan, electric vehicle owners would pay the equivalent of $2.20 less per "gallon" than gasoline vehicle owners, and the battery would be paid off in 5.1 years assuming current battery costs, and 3.6 years assuming Chevrolet Volt technology batteries.
**63 cents per watt according to Tony Posawatz, Volt's line director quoted in Wired article "GM Resurrects the Electric Car" 1/7/2007 ($10K for a 16kwh battery= 63 cents per watt)
How would it be if Congress and not the Federal Reserve set interest rates? I think most economists agree that such a practice would relegate America to a backward nation effectively with no coherant money policy. Kind of like out situation with health or energy policy where interested parties lobby for a hodge podge of conflicting legislation that has no coherance or coordination, and only serve the short term interests of various stakeholders.
Tom Daschle and David Mechanic in their books on Health care reform suggest employing the model of the Federal Reserve in order to give a regulating authority the independence it needs to provide a vital public service. The notion is appealing that health care or energy policy decisions that are frequently politicized by interested parties also should be delegated to an ultra independent agency.
I was working on a proposal for Hawaii's energy independence and saw many news articles about how lobby groups who normally oppose each other had united to derail sound legislation. I went back to what Tom was advocating because it is exactly how he described the unification of lobby groups in opposition to the 1993 health care initiative. I got to thinking- what is the distinct notion about the Federal Reserve that we find appealing? After all, there are many other independent governmental agencies like the Federal Energy Regulatory Commission, FCC and EPA. The key difference is the virtual immunity the Fed has, whereas these so called independent agencies were in some cases alarmingly politicized by Bush administration.
So what's the secret to the immunity? Daschle proposes 10 year terms for his Health board members, in order to insulate from politicization, and the revolving door problem with private industry. The 7 governors of the Fed serve staggered 14 year terms. So is the main problem that the EPA didn't have the necessary insulation? What if it did? Just picture though the consequences if the EPA was loaded with Bush appointees. Would we be blocked from doing anything progressive regarding the environment for a decade?
On the other hand, if the EPA did have independence, perhaps it could have successfully challenged Cheney's activities and declared CO2 a pollutant subject to EPA regulation. That would have raised a huge political firestorm, and it would have been difficult for the republican congress to defund EPA since the democrats could have filibustered such cuts in the senate. Further, if the terms of the some sort of board of EPA commissioners were staggered and long (10-14 years), then Bush may have gotten only one or two hardcore supporters in, and if we had a procedure for impeachment of commissioners, then perhaps the evil empire scenario would have an answer.
I think Daschle is on to something. If we are to have a stable and coherant approach for Health care and National energy strategy, then we have to go with a more fortified notion of an independent governmental agency along the lines of the Federal Reserve.
Here's what David Freeman, head of California's Power Authority said about the California energy crisis:
"There is one fundamental lesson we must learn from this experience: ... we cannot do without [electricity], which makes opportunities to take advantage of a deregulated market endless. It is a public good that must be protected from private abuse. If Murphy’s Law were written for a market approach to electricity, then the law would state “any system that can be gamed, will be gamed, and at the worst possible time.” And a market approach for electricity is inherently gameable. Never again can we allow private interests to create artificial or even real shortages and to be in control."
There are several market imbalances with the common thread of attitudes about deregulation. The (1) financial markets were gamed by folks like Bear Stearns, (2) The energy markets were gamed by Enron and local utilities, (3) the health care markets have been gamed by the insurance and pharmecuticals industries, and (4) communications policy has been gamed by the TelCos and cable companies. So where were the agencies charged with supervision: respectively, (1) The Fed and SEC, (2) the Federal Energy Regulatory Commission, (3) the United States Department of Health and (4) the FCC enforcing the 1996 Telcom act?
The problem is that these agencies have been run by appointees who believed that regulation was inherently bad economic theory. The failure of that theory is demonstrated by the fiascos in each of these major policy areas. George Soros suggests that the ideology of market fundamentalism has overtaken regulators, who despite the crushing evidence to the contrary, cling to the mistaken belief that economic systems "naturally" tend towards equilibrium. The recent debacle proves once again how obvious the misconception is. Time and again it is demonstrated in stark terms that it is the intervention of the authorities that prevent financial markets from breaking down, not the markets themselves.
I am not arguing for some sort of revisionism of planned economies or the failed socialistic hybrids. I am a big fan of competition, and discretionary flexibility needed for innovation. The surprizing thing I learned from my business days was that corporations don't necessarily dislike rules. They certainly prefer the fewest number of rules to play by, but so long as their competitors also have the same compliance costs, it has a net zero effect on their competitiveness. Cost of compliance is like any other cost of manufacture- like the cost of a nut or bolt- the cost gets passed along to the consumer. Your competitor has to pay the same cost, so it doesn't matter. Like any game, rules are viewed as necessary.
Note this though. In the absence of rules, the social contract for businesses is that your job is to increase profitability. If the rules allow you to grab huge amount of cash and lock out competitors, that is what you do. If a bargain can be had by lobbying congress, and performing legal favors for decision makers, well then- that's what you do. Now- if there is some rule that constrains your ability to engage in any of these nefarious activities, I would have thought from my hippey days that the higher levels of management would find that awful. The idea was kind of like football- there are rules against certain moves that can cause serious injury to players. Those are good for the game. Sure players are prevented from taking decisive action against an opponent. But they don't begrudge the rule that prevents them from doing it. So it was open recognition that rules could be good and many were fundamental to conducting business. The bottom line was that people were welcome to evaluate whether rules were fair or unfair, just so long they didn't do in on company time. The idea was to know everything about the rules, and then do everything permitted under them.
At it's core, American business accepts this attitude towards rules needed for fair play. What regulatory agencies need to do is employ the notion of "Mechanism Design" advanced by nobel prize winner Leonid Hurwicz to design systems of rules that promote desired outcomes, rather than use overt schemes of direct management of the minutiae of the targeted industries.
I am a retired engineering manager knowlegable about politics at executive levels in a corporate setting, but don't understand how things work out here in the real world of public sector politics. I am asking for advice on how to present a business plan associated with energy independence in my state of Hawaii. The plan requires state legislation. I understand the problem that folks in public office may have with crackpots coming in with their brilliant ideas, and admitedly it is possible that I am in that category.
The basic idea of the proposal is that we can leverage the price differential between cost of gasoline and the cost of electricity to finance the cost of automotive batteries and the higher cost of alternative power generation. This battery cost is substantial- adding anywhere from $8K to $36K to the price of the car. However, since these automotive batteries have a planned life of 10 years, there cost can be successfully recovered through a surcharge on the electricity used to charge the vehicle. So as far as the consumer is concerned, the battery is "free".
Though this scheme is revenue neutral and in the economic interest of all the commercial players, it requires government policy to initiate as will become clear from the description.
This is a long response to a note posted by Bard of Wilmette. My response ran way past 400 words so it is easier to just post it here. Please refer to his note here to understand the context of the response.
How about an alternate small joke- "I used to call them colored pencils, but one day I got this really bad knot in my stomach and I realized that I really should be calling them african american pencils. But then Bill (friend in office who is black) asked me why I called them that and I confessed my moral quandary. So then he throws his arm around my shoulder and tells me- "you know, sometimes pencils of color really are colored." Then he told me to lay off the cafeteria's burritos- they are bad for the digestion.
Ok- so I am no great extemporaneous joke teller either- I was doing a tortured variation of the Freud joke about phalluses.
In my church, our main pastor is a Portuguese-Japanese fellow and he regularly makes jokes about Portuguese people and the personal failings of his second command pastor who is Chinese. He does it to indirectly confront and provide a continual escape valve for simmering tribalism that crops up as a regular part of our lives. I won't provide Hawaii as some sort of shining city on a hill, but it's melting pot appearance suggests to outsiders that the human weakness to allow oneself to drift off into herd behaviors towards outsiders has somehow been erased forever from the genetic blueprint.
It hasn't and like the cliché about liberty- it's an ongoing battle. The way the struggle is addressed here is through humor. Your version of the joke reminded me that Barack referred to "off color" jokes that "Gramps" told as a way to fit in- from his background I would bet he would make the formulation you did.
I am a recovering mainland person, so I will only take a stab at a critique of your joke from the Hawaiian perspective. You would get a big aloha hug from a native because they'd probably size you up as a ham fisted guy liberal white guy from a previous generation whose heart is in the right place just like Gramps. But they'd toss your hair up a bit as friendly for using the "They" construction. You get points because out of honesty and conscientiousness you want to bring up the racial issue in some way. Like Barack points out it needs to be talked about so you talk indirectly about these ridiculous sensitivities, but where you wind up in the ditch is by opening up an appearance of the US-THEM thing. Jokes invite people to spelunk the subtext, so they are looking hard at each word. You have to have a bullet proof choice of words when discussing race in a general audience, and woe to you if you introduce your grandmother as a typical, everyday person compressed into a clause of a sentence about race. So if it is in the barber shop, you let your hair down and it's not like you are on air where one clumsy turn of phrase might get a one way ticket to you-tube crucifixion. Everyone in professional life knows it's not a great career move to drive off the well worn paths and so we don't. But uttering the "They" jokes in the barbershop is the way the stupid herd cycle works.
So we use self-effacement and commonly do it in a broad audience like a church or company meeting. The brunt of the joke is our own race, and we poke fun at stereotypes of us as a service to those who harbor the resentments upon which those stereotypes are formed. It's not comfortable, because the jokes can go south. There is huge resentment here about rich white guys from the mainland coming to the island and making it hard for locals to deal with the inflated cost of housing, the traffic, diluting the cultural aloha identity- loving hawaii to death.
I haven't made that joke about myself yet. It's tough. We have haole jokes that white guys tell about themselves, but they are almost always extremely awkward with a general audience. If folks don't trust your sincerity of your commitment to do something about the inequity, they suspect you may be attempting to douse yourself with the perfume of self effacement- suggesting that you believe the audience will be too stupid to notice the stink. You will get a smile as everyone always, but if you can't tell that the smile is forced, you may leave them with even greater resentment- because you risk being seen as a Haole aping aloha, reducing hawaiian approaches to civility as some sort of bathroom air freshener.
Anyway- you write excellently so it makes me think you are working on a book or something about this Obama phenomenon. But even if you are just a regular joe supporter and you happen to come to Honolulu on vacation, drop me a line. I'm serious. You need to look at Hawaii to understand how Hawaii got Barack ahead of the multicultural curve- How it both got him not just beyond the generational mindset of his grandparents, but showed him that even more sophisticated societies are still populated with imperfect people tempted by the sloth of herding instincts. I'd be happy to introduce you to a broad range of Hawaiians- pick your race, or the combination, and you can form your own opinions about this balance they have here. It's like a look into the future of what American might grow to become- not a Blade runner kind of dark multiculturalism, where society has devolved into a state where there is only pidginned communication between races whose grudging acceptance of each other is driven solely by economic necessity. Instead, Hawaii is a place loosely based on the style of living aloha- (agape if you are into church talk.)
I don't claim to know Obama, but I am positive that if you have some deep interest in his attitudes about race you have to spend as much time looking at Honolulu as you do Chicago's south side.
So think about it and really- drop by. You seem like a clever guy. It would be fun. Birdalone- you come too. We can do the Don Ho/ Walter Wanderly thing sipping Blue Hawaii's while we talk about Obama's revolution in the way politics works- political swarming/ how we have to move past these yelling in the closet blogs and do the wikipolitics collaborative thing. Or we can talk about getting energy independence on the front burner. My kids may force some unexpected punctuation to the interchanges, but changing diapers gives me more time to thing about snappy comebacks to things other folks say.
Is Barack in some respects like a scout bee that calls a swarm to collective action? Notice is being taken of the connection between new phenomena: Swarm politics, Blog swarms, Fear in the ranks of traditional party and PAC professionals towards armies of volunteers that are indifferent and even hostile towards their efforts at command and control.
Folks may find this article interesting in the context of the newly dominant role of internet communications which is enabling a revolution in the way politics and collective activities like Wikipedia or Kiva can and are working today. The Obama administration stirs in the womb of this revolution. We must consider how the various policy proposals will leverage the dynamics of swarm theory to rapidly and decisively attack social problems.
For example, with energy independence in addition to working with traditional centralized energy producers, take a cue from Germany's Renewable Energies Law (EEG) that established a system where electricity companies were required to purchace alternative energy from independent producers at a higher rate. This allowed small investors and homeowners to swarm at the problem and discover the best fit of technology to local conditions. In the case of the US, this would likely not be a german subsidy system, but a mechanism where surcharges for electricity used to replace expensive gasoline are used to pay small producers of alternative energy- including homeowners and mom and pop operations. (more on this proposal here)
From National Geographic July 2007
"Swarm Theory", By Peter Miller.
...Seeley's team applied paint dots and tiny plastic tags to identify all 4,000 bees in each of several small swarms that they ferried to Appledore Island, home of the Shoals Marine Laboratory. There, in a series of experiments, they released each swarm to locate nest boxes they'd placed on one side of the half-mile-long (one kilometer) island, which has plenty of shrubs but almost no trees or other places for nests. In one test they put out five nest boxes, four that weren't quite big enough and one that was just about perfect. Scout bees soon appeared at all five. When they returned to the swarm, each performed a waggle dance urging other scouts to go have a look. (These dances include a code giving directions to a box's location.) The strength of each dance reflected the scout's enthusiasm for the site. After a while, dozens of scouts were dancing their little feet off, some for one site, some for another, and a small cloud of bees was buzzing around each box.The decisive moment didn't take place in the main cluster of bees, but out at the boxes, where scouts were building up. As soon as the number of scouts visible near the entrance to a box reached about 15—a threshold confirmed by other experiments—the bees at that box sensed that a quorum had been reached, and they returned to the swarm with the news. "It was a race," Seeley says. "Which site was going to build up 15 bees first?" Scouts from the chosen box then spread through the swarm, signaling that it was time to move. Once all the bees had warmed up, they lifted off for their new home, which, to no one's surprise, turned out to be the best of the five boxes. The bees' rules for decision-making—seek a diversity of options, encourage a free competition among ideas, and use an effective mechanism to narrow choices—so impressed Seeley that he now uses them at Cornell as chairman of his department. "I've applied what I've learned from the bees to run faculty meetings," he says. To avoid going into a meeting with his mind made up, hearing only what he wants to hear, and pressuring people to conform, Seeley asks his group to identify all the possibilities, kick their ideas around for a while, then vote by secret ballot. "It's exactly what the swarm bees do, which gives a group time to let the best ideas emerge and win. People are usually quite amenable to that." In fact, almost any group that follows the bees' rules will make itself smarter, says James Surowiecki, author of The Wisdom of Crowds. "The analogy is really quite powerful. The bees are predicting which nest site will be best, and humans can do the same thing, even in the face of exceptionally complex decisions." Investors in the stock market, scientists on a research project, even kids at a county fair guessing the number of beans in a jar can be smart groups, he says, if their members are diverse, independent minded, and use a mechanism such as voting, auctioning, or averaging to reach a collective decision. Take bettors at a horse race. Why are they so accurate at predicting the outcome of a race? At the moment the horses leave the starting gate, the odds posted on the pari-mutuel board, which are calculated from all bets put down, almost always predict the race's outcome: Horses with the lowest odds normally finish first, those with second lowest odds finish second, and so on. The reason, Surowiecki says, is that pari-mutuel betting is a nearly perfect machine for tapping into the wisdom of the crowd. ...Social and political groups have already adopted crude swarm tactics. During mass protests eight years ago in Seattle, anti-globalization activists used mobile communications devices to spread news quickly about police movements, turning an otherwise unruly crowd into a "smart mob" that was able to disperse and re-form like a school of fish. The biggest changes may be on the Internet. Consider the way Google uses group smarts to find what you're looking for. When you type in a search query, Google surveys billions of Web pages on its index servers to identify the most relevant ones. It then ranks them by the number of pages that link to them, counting links as votes (the most popular sites get weighted votes, since they're more likely to be reliable). The pages that receive the most votes are listed first in the search results. In this way, Google says, it "uses the collective intelligence of the Web to determine a page's importance." Wikipedia, a free collaborative encyclopedia, has also proved to be a big success, with millions of articles in more than 200 languages about everything under the sun, each of which can be contributed by anyone or edited by anyone. "It's now possible for huge numbers of people to think together in ways we never imagined a few decades ago," says Thomas Malone of MIT's new Center for Collective Intelligence. "No single person knows everything that's needed to deal with problems we face as a society, such as health care or climate change, but collectively we know far more than we've been able to tap so far." Such thoughts underline an important truth about collective intelligence: Crowds tend to be wise only if individual members act responsibly and make their own decisions. A group won't be smart if its members imitate one another, slavishly follow fads, or wait for someone to tell them what to do. When a group is being intelligent, whether it's made up of ants or attorneys, it relies on its members to do their own part.
...
Seeley's team applied paint dots and tiny plastic tags to identify all 4,000 bees in each of several small swarms that they ferried to Appledore Island, home of the Shoals Marine Laboratory. There, in a series of experiments, they released each swarm to locate nest boxes they'd placed on one side of the half-mile-long (one kilometer) island, which has plenty of shrubs but almost no trees or other places for nests.
In one test they put out five nest boxes, four that weren't quite big enough and one that was just about perfect. Scout bees soon appeared at all five. When they returned to the swarm, each performed a waggle dance urging other scouts to go have a look. (These dances include a code giving directions to a box's location.) The strength of each dance reflected the scout's enthusiasm for the site. After a while, dozens of scouts were dancing their little feet off, some for one site, some for another, and a small cloud of bees was buzzing around each box.
The decisive moment didn't take place in the main cluster of bees, but out at the boxes, where scouts were building up. As soon as the number of scouts visible near the entrance to a box reached about 15—a threshold confirmed by other experiments—the bees at that box sensed that a quorum had been reached, and they returned to the swarm with the news.
"It was a race," Seeley says. "Which site was going to build up 15 bees first?"
Scouts from the chosen box then spread through the swarm, signaling that it was time to move. Once all the bees had warmed up, they lifted off for their new home, which, to no one's surprise, turned out to be the best of the five boxes.
The bees' rules for decision-making—seek a diversity of options, encourage a free competition among ideas, and use an effective mechanism to narrow choices—so impressed Seeley that he now uses them at Cornell as chairman of his department.
"I've applied what I've learned from the bees to run faculty meetings," he says. To avoid going into a meeting with his mind made up, hearing only what he wants to hear, and pressuring people to conform, Seeley asks his group to identify all the possibilities, kick their ideas around for a while, then vote by secret ballot. "It's exactly what the swarm bees do, which gives a group time to let the best ideas emerge and win. People are usually quite amenable to that."
In fact, almost any group that follows the bees' rules will make itself smarter, says James Surowiecki, author of The Wisdom of Crowds. "The analogy is really quite powerful. The bees are predicting which nest site will be best, and humans can do the same thing, even in the face of exceptionally complex decisions." Investors in the stock market, scientists on a research project, even kids at a county fair guessing the number of beans in a jar can be smart groups, he says, if their members are diverse, independent minded, and use a mechanism such as voting, auctioning, or averaging to reach a collective decision.
Take bettors at a horse race. Why are they so accurate at predicting the outcome of a race? At the moment the horses leave the starting gate, the odds posted on the pari-mutuel board, which are calculated from all bets put down, almost always predict the race's outcome: Horses with the lowest odds normally finish first, those with second lowest odds finish second, and so on. The reason, Surowiecki says, is that pari-mutuel betting is a nearly perfect machine for tapping into the wisdom of the crowd.
Social and political groups have already adopted crude swarm tactics. During mass protests eight years ago in Seattle, anti-globalization activists used mobile communications devices to spread news quickly about police movements, turning an otherwise unruly crowd into a "smart mob" that was able to disperse and re-form like a school of fish.
The biggest changes may be on the Internet. Consider the way Google uses group smarts to find what you're looking for. When you type in a search query, Google surveys billions of Web pages on its index servers to identify the most relevant ones. It then ranks them by the number of pages that link to them, counting links as votes (the most popular sites get weighted votes, since they're more likely to be reliable). The pages that receive the most votes are listed first in the search results. In this way, Google says, it "uses the collective intelligence of the Web to determine a page's importance."
Wikipedia, a free collaborative encyclopedia, has also proved to be a big success, with millions of articles in more than 200 languages about everything under the sun, each of which can be contributed by anyone or edited by anyone. "It's now possible for huge numbers of people to think together in ways we never imagined a few decades ago," says Thomas Malone of MIT's new Center for Collective Intelligence. "No single person knows everything that's needed to deal with problems we face as a society, such as health care or climate change, but collectively we know far more than we've been able to tap so far."
Such thoughts underline an important truth about collective intelligence: Crowds tend to be wise only if individual members act responsibly and make their own decisions. A group won't be smart if its members imitate one another, slavishly follow fads, or wait for someone to tell them what to do. When a group is being intelligent, whether it's made up of ants or attorneys, it relies on its members to do their own part.
Personally, I'd like to see the relationship of liberation theology to the current social order compared to the relationship that the Bush evangelicals have had to politics. I think this surfacing of the fiery rhetoric present in some churchs calls us to examine the relationship between the pastor-prophet and the congregation. Is the pastor there to make us feel comfortable, or to shake us up, point out social injustice and remind us how much God expects much of us? The odd thing about the often quoted Rev. Wright's statement is that if he said them in 1840 about slavery, most of America could understand why someone would think the country was risking damnation. Why is it so different today?
My wife and I are active in our church (every sunday, active service like sunday school). It's evangelical but way different than Barack's. Ours is a kind of pop psychology 4 square church if you can imagine such thing- and the congregation is massively mixed races from the pacific rim. Our pastor can advocate changing the current rhetoric about gays in the evangelical community, and in other sermons pay an honorarium to Oliver North (I walked out).
On the whole, I'd say that ours does not fall into the category of the feel good, "US versus them" country club atmosphere of the holier than thou where people go on Sunday to talk about anything but religion, anything but the religious experience, and anything but an examination of our personal failings in living to the standard Christ set for us. But there is an element of that. Our pastor is gentle in his style but forceful in attempting to show the congregation how high the bar is set for us.
But it is true that our church almost wholly divorces itself from social action, or commentary on social ills. These subjects aren't "safe". Many would be made to feel uncomfortable by a Rev. Wright not just because of the cultural style of expression, but because they look to the pastor for comfort. They don't want a prophet to speak the truth. I ran across a statement from the president of the Church of Christ that I think goes to the essense of it, citing the biblical Jeremiah's relation to his society. Why is it so different for Jeremiah Wright.
It's the context of time. It would be ok in 1840, ok in Jeremiah's time, ok anytime but now- today. Let's face it. We as sinners don't like prophets. The enemy attempts to persuade us that really we should silence them.
Here is the statement:
The Rev. John H. Thomas, UCC general minister and president, released the following statement on March 17 on the rhetoric of preaching, in light of recent news coverage of Jeremiah A. Wright, Jr., and Chicago's Trinity UCC.
What Kind of Prophet?Reflections on the Rhetoric of Preachingin Light of Recent News Coverage of Jeremiah A. Wright, Jr.and Trinity United Church of Christ
The Rev. John H. ThomasGeneral Minister and PresidentUnited Church of Christ
Over the weekend members of our church and others have been subjected to the relentless airing of two or three brief video clips of sermons by the Rev. Dr. Jeremiah A. Wright, Jr., pastor of Trinity United Church of Christ for thirty-six years and, for over half of those years, pastor of Senator Barack Obama and his family. These video clips, and news stories about them, have been served up with frenzied and heated commentary by media personalities expressing shock that such language and sentiments could be uttered from the pulpit.
One is tempted to ask whether these commentators ever listen to the overcharged rhetoric of their own opinion shows. Even more to the point is to wonder whether they have a working knowledge of the history of preaching in the United States from the unrelentingly grim language of New England election day sermons to the fiery rhetoric of the Black church prophetic tradition. Maybe they prefer the false prophets with their happy homilies in Jeremiah who say to the people: "You shall not see the sword, nor shall you have famine, but I will give you true peace in this place." To which God responds, "The prophets are prophesying lies in my name; I did not send them, nor did I command them or speak to them. They are prophesying to you a lying vision, worthless divination, and the deceit of their own minds. . . . By sword and famine those prophets shall be consumed," (Jeremiah 14.14-15). The Biblical Jeremiah was coarse and provocative. Faithfulness, not respectability was the order of the day then. And now?
What's really going on here? First, it may state the obvious to point out that these television and radio shows have very little interest in Trinity Church or Jeremiah Wright. Those who sifted through hours of sermons searching for a few lurid phrases and those who have aired them repeatedly have only one intention. It is to wound a presidential candidate. In the process a congregation that does exceptional ministry and a pastor who has given his life to shape those ministries is caricatured and demonized. You don't have to be an Obama supporter to be alarmed at this. Will Clinton's United Methodist Church be next? Or McCain's Episcopal Church? Wouldn't we have been just as alarmed had it been Huckabee's Southern Baptist Church, or Romney's Church of Jesus Christ of Latter Day Saints?
Many of us would prefer to avoid the stark and startling language Pastor Wright used in these clips. But what was his real crime? He is condemned for using a mild "obscenity" in reference to the United States. This week we mark the fifth anniversary of the war in Iraq, a war conceived in deception and prosecuted in foolish arrogance. Nearly four thousand cherished Americans have been killed, countless more wounded, and tens of thousands of Iraqis slaughtered. Where is the real obscenity here? True patriotism requires a degree of self-criticism, even self-judgment that may not always be easy or genteel. Pastor Wright's judgment may be starker and more sweeping than many of us are prepared to accept. But is the soul of our nation served any better by the polite prayers and gentle admonitions that have gone without a real hearing for these five years while the dying and destruction continues?
We might like to think that racism is a thing of the past, that Martin Luther King's harmonious multi-racial vision, articulated in his speech at the Lincoln Memorial in 1963 and then struck down by an assassin's bullet in Memphis in 1968, has somehow been resurrected and now reigns throughout the land. Significant progress has been made. A black man is a legitimate candidate for President of the United States. A black woman serves as Secretary of State. The accomplishments are profound. But on the gritty streets of Chicago's south side where Trinity has planted itself, race continues to play favorites in failing urban school systems, unresponsive health care systems, crumbling infrastructure, and meager economic development. Are we to pretend all is well because much is, in fact, better than it used to be? Is it racist to name the racial divides that continue to afflict our nation, and to do so loudly? How ironic that a pastor and congregation which, for forty-five years, has cast its lot with a predominantly white denomination, participating fully in its wider church life and contributing generously to it, would be accused of racial exclusion and a failure to reach for racial reconciliation.
The gospel narrative of Palm Sunday's entrance into Jerusalem concludes with the overturning of the money changers' tables in the Temple courtyard. Here wealth and power and greed were challenged for the way the poor were oppressed to the point of exclusion from a share in the religious practices of the Temple. Today we watch as the gap between the obscenely wealthy and the obscenely poor widens. More and more of our neighbors are relegated to minimal health care or to no health care at all. Foreclosures destroy families while unscrupulous lenders seek bailouts from regulators who turned a blind eye to the impending crisis. Should the preacher today respond to this with only a whisper and a sigh?
Is Pastor Wright to be ridiculed and condemned for refusing to play the court prophet, blessing land and sovereign while pledging allegiance to our preoccupation with wealth and our fascination with weapons? In the United Church of Christ we honor diversity. For nearly four centuries we have respected dissent and have struggled to maintain the freedom of the pulpit. Not every pastor in the United Church of Christ will want to share Pastor Wright's rhetoric or his politics. Not every member will rise to shout "Amen!" But I trust we will all struggle in our own way to resist the lure of respectable religion that seeks to displace evangelical faith. For what this nation needs is not so much polite piety as the rough and radical word of the prophet calling us to repentance. And, as we struggle with that ancient calling, I pray we will be shrewd enough to name the hypocrisy of those who decry the mixing of religion and politics in order to serve their own political ends.
Well folks, we had Iraq. Then Katrina. The Bush fiascos just keep on coming. The credit bubble has burst. Why is it that every time "gubmint regulators" have been blamed for holding the economy back, someone is getting ready to stick their hand in the cookie jar? Government regulators had ample warning of high risk loans going on due to the saturation of capital markets with low cost cash- testimony was made before congress in 2004 warning of the crisis, but the Bush Treasury did nothing. Federal regulators did nothing.
What is not well understood is that Clinton had a major role in this crisis. And don't be too surprized if Hillary continues with the Clinton-Bush economic polcies.
Bank regulators enforce common sense rules- they insist that loans can't be made unless there is sufficient collateral to back up the loan. They insist that the bank can't lend more than it is worth. They insist that businesses can't make end runs around banking rules- that if they act like a bank they are a bank and they get regulated. Pretty simple stuff, right? Well, no- at least not if you follow the logic of the Clinton-Bush philosophy of deregulation.
According to deregulation dogma, easing of banking regulations would allow financial institutions to fuel economic growth in the ways banks couldn't. They could act like banks but avoid banking regulation if they wanted to. Institutions like Bear Stearns knew like any investor that they could make a heck of a lot more money if they didn't have to put up capital to support their positions. And with easy access to cheap capital, they financed mortgages with abandon. Investment firms like Carlyle Capital had a leverage ratio of 30 to one, meaning for every one dollar of collateral they were able to borrow 30. It was a crazy proposition that no regulator would allow, but to the wall street lobbyists, anything that allowed easier money for investment would be a boon for the economy. To progressives, anything that allowed folks in lower income groups to get into home ownership was good. Such aggressive leveraging would work as long as these investment firms had easy access to cheap money.
Unfortunately, when banks requested that Carlyle and Bear Stearns come up with more collateral to support the mortgage loans they were financing, they couldn't. It was like an old fashioned bank run. Only these investment firms weren't banks and so weren't guaranteed by the federal government. Carlyle went under last week. The federal reserve realized they couldn't let the same thing happen to Bear Stearns or the financial system could implode.
Tim Geithner, New York federal reserve president made an interesting speech a week ago. His remarks are in places fine grained and complicated, but it gets down to this: If something walks like a bank and talks like a bank, it should be regulated like a bank. Failure of officials to regulate the system will magnify the damage done by financial crisises like the bust of the credit boom of the last 3 or 4 years. Well, duh. Right?
Well guess what. They made bad loans, and the US taxpayer is going to bail them out. When the deregulation idealogues undid Glass-Steagall they thought that somehow that the reckless banking practices by non banks that created the 1920's credit bubble would not happen again. Bear Stearns knew that was nonsense for the Feds to believe that moral hazard had magically disappeared. Even though there was no official guarantee of federal support, moral hazard was still there because Bear Stearns knew that the Feds would never let them go under the "To big to fail" principle. They were right, and the deregulators were wrong. The investment firms proceeded with reckless abandon- and worse- there were no referees on the field to watch them.
Senator Phil Gramm, November 12, 1999:
"We are here today to repeal Glass-Steagall because we have learned that government is not the answer. We have learned that freedom and competition are the answers. We have learned that we promote economic growth and we promote stability by having competition and freedom. I am proud to be here because this is an important bill; it is a deregulatory bill. I believe that that is the wave of the future, and I am awfully proud to have been a part of making it a reality."
"We are here today to repeal Glass-Steagall because we have learned that government is not the answer. We have learned that freedom and competition are the answers. We have learned that we promote economic growth and we promote stability by having competition and freedom.
I am proud to be here because this is an important bill; it is a deregulatory bill. I believe that that is the wave of the future, and I am awfully proud to have been a part of making it a reality."
It was a fantasy, as pointed out by Robert Kuttner in testimony to the House Committee on Financial Services, 10/2007:
"Since repeal of Glass Steagall in 1999, after more than a decade of de facto inroads, super-banks have been able to re-enact the same kinds of structural conflicts of interest that were endemic in the 1920s -- lending to speculators, packaging and securitizing credits and then selling them off, wholesale or retail, and extracting fees at every step along the way. And, much of this paper is even more opaque to bank examiners than its counterparts were in the 1920s. Much of it isn't paper at all, and the whole process is supercharged by computers and automated formulas....(source)"
It was nuts. Now the mess is in the lap of the government, and while the deregulatory zealots feel chastened, there is an opportunity to take steps to lessen the impact of future bubbles.
Footnote1:
Experts were warning about this quite a while ago. For example Robert Manning, July 1, 2004 at a Center for American Progress symposium. His talk " Righting the Upside-Down Economy: Creating a Sustainable Recovery " is worth reading.
Dr. Manning points to some challenges about the widening divide between rich and poor created by weaknesses in the Neoliberal trade regime which encourage downward pressures on household income in the U.S. and throughout the world.. To encourage domestic higher paying jobs there are several win-win-win opportunties. To encourage cheap credit needed for financing required by borrowers on the less fortunate side of the divide, we need a stronger dollar and some major body blocks to the practice of rampant export of the US dollar.
So what can be done to address the fundamental forces at work here. A key to our monetary problems has to do with our mammoth trade imbalance. The value of the dollar is dangerously weak, and this creates cascading conditions that spill over into liquidity and credit markests. Addressing our trade imbalance is key.
Balance of trade proposal 1: 89 cent "gas" sells US cars. (energy independence)
The dollar is weak because we are exporting $400 billion per year to a world that doesn't value dollars much anymore. So stop exporting dollars. The high price of oil makes electricity as a power source for cars cheap- the equivalent of 89 cents per gallon. (More details on this proposal here ). If we surcharge the electricity so that it is the equivalent of $2 per gallon, folks will still find it a huge bargain. We apply the surcharge to defray the cost of the batteries, so electric vehicles are priced the same as gas vehicles. Win Win Win Lose.
Trade imbalance Proposal 2: Address Chinese trade and coal problems
Take measures to keep credit cheap. Sovereign funds (http://en.wikipedia.org/wiki/Sovereign_wealth_funds ) are finding that holding dollars as a free loan to America is risky- as the dollar drops like a rock, so does their wealth.. Countries like China are motivated to keep their currency low in order to keep their export economy to the US going- - So give them an alternative- offer the chinese something valuable that they need. Sell US nuclear reactors at cost. It's a win-win-win-lose.
(More details on going nuclear with China's CO2: here and here )
Dear Chairman Dingell, (House Energy and Commerce committee),
Perhaps your committee would be willing to consider a "modest proposal" for expansion of the idea of subsidies for batteries found in HR. 5351. The idea is that maybe it is boneheaded to have answer the battery finance problem with tax policy. Instead we can tap into a huge source of capital from surcharging electricity used to recharge the batteries. It would mean huge numbers of jobs for Michigan if we could make the pitch to consumers of gas at an equivalent price of $2 per gallon by buying a Chevy electric instead with a free battery financed by Federal surcharges on recharrge electricity.
A tipping point has been crossed. Ask yourself- Has the spike in petroleum prices made the relative cost of electricity as a fuel so low that it is enough to defray the costs of the battery? If so, wouldn't it be smart energy independence policy to implement a sort of toll road approach to finance the battery infrastructure and pay back the investment through electricity surcharge tolls? It looks like there is way more money there to pay cover the cost of 100% subsidy of batteries within their lifetime (about 10 years). A variation of the scheme would simultaneously provide incentives for clean energy source of electricity for the switchover.
The idea is that demand would be rapid and immense, since new vehicle customers would be attracted to the idea of paying for fuel at half the rate they pay for gasoline. This policy mechanism is proven- similar to the "Feed-in Tariff" scheme for financing alternative power that has been wildly successful in Germany, but differs in the respect that it does not impose higher rates on all electrical customers. Only those customers that are electric car users are surcharged, and even for them, it is frictionless because they are getting a bargain compared to the cost of gasoline.
I footnote my calculations, so maybe someone can assist me in seeing why this is not a winning proposition .
I start by calculating the cost of power required by an electric car to deliver the same power utilized from a gallon of gas. Using an electric car it turns out I would pay the equivalent of 89 cents per gallon *
If each US vehicle uses on average 2.2 gallons of gas per day**, this means that the yearly cost of gasoline per vehicle is $3194. So an equivalent electric vehicle would save $ 2486 in fuel costs. 2.2 gallons of gas per day would require a battery with 20 Kwhs***. So that battery at 62 cents per Watt for Li-Ion**** would be paid off in 4.5 years.
There are many ways to leverage this price differential. One is the so called toll road approach. To allow consumers to see this savings up front, one policy approach would be for the federal government to subsidize 100% of battery cost up to 62 cents per Watt for domestic vehicles, and then add a surcharge on electricity used to charge the battery (metered by the car). The electricity company is required to add a surcharge for the electricity used at say 50% of the prevailing equivalent cost of gas. Instead the consumer pays the equivalent of $2 per gallon of gas- creating a stampede for domestically built electrical vehicles. The cost of the battery is spread over current battery life of 10 years.
Like toll roads the investment is amortized over an extended period. The scheme is revenue neutral.
One variation would attempt to maximize electricity use among high mileage drivers. One half of US vehicles drive less than 25 miles per day. The other half will be burning fuel after their 20Kwh battery is exhausted. A business model that would maximize efficient use of capital investment in batteries would be to put the resource in the control of an entity whose profit motive drove efficient utilization of that resource. Renault-Nissan, and Israel have committed to a major nationwide Electric vehicle plan that separates the cost of a vehicle from the cost of the battery. So for example for the US, there would be a federal standardization for the form factor and connector of the battery that car manufacturers must adhere to. The battery packs are owned by the electrical company, and the electric company is motivated to provide an additional pack for high mileage customers so that they may maximize their electricity sales. The number of packs that are subsidized by the federal government is proportionate to customer demand, so the packs are a scarce resource that they have a disincentive to waste on low mileage cars. This standardized power pack scheme has the advantage that "filling stations" could swap out batteries for extended road trips, long haul shipping, and commercial fleets. Battery utilization is maximized to the full 10 year life, and maintenance and inspection extends the life and safety of batteries.
Another variation to spur alternative energy supply is to use the same price differential as a weapon against the objections that the ROI isn't there for expensive CO2 free sources. EG- tell power companies that they can pocket a portion of the surcharge if the power used by electrics is covered by new CO2 free power capacity built after the start of the program. 89 cents per KWH can provide some handsome margins- justifying the cost a whole lot of solar in the Nevada desert. Solar is just an example, and policy ought not perscribe technology- we just aren't that smart- let the swarm decide. If wind or wave power makes more sense, then that is up to the provider. This would generate demand for the building of new plant at a furious pace: An all electric fleet would require generation capacity of 3.49 billion KWH per day, requiring total yearly production of an additional 1,275 billion KWHs per year (an increase of 31%)*****. That is politically attractive since it creates a lot of domestic alternative power jobs- since many of these sources require more labor per Kwh of capacity than CO2 generating technologies. Note in this variation, the unused battery capacity can be used to augment distributed grid storage- something that is needed due to the inconstant nature of most CO2 free power sources. With a portion of 3.49 billion of KWHs of electric company batteries available during the day, the electricity company will be motivated to provide power connectors in commuter parking garages so that this resource may be fully utilized for grid storage. This significantly reduces the requirement for CO2 generating schemes to balance power, such as CAES.
I would note that although I focused on all electric vehicles for simplicity, a hybrid approach using a generator to provide a 200 mile range of the mostly electric vehicle might well be the preferred scheme.
Legislation modifications needed: The Senate bill corresponding to H.R. 5351 would increases the subsidy for Hybrid vehicles to 62 cents per Watt up to a capacity equivalent to 1KWH per 100 pounds of curb rate. A requirement is added for vehicles to meter charging in a way that power companies may efficiently surcharge to recover the cost of the battery. Suggest the subsidies only be for domestic vehicles as a recession fighting measure. The surcharge rate is set to price vehicle power at 50% cost of the same power from gasoline. From the start of the program, if the electricity company builds or purchases new CO2 free power from qualifying sources such as the solar grand plan, then they are entitled to a portion of the surcharge to defray cost of the more expensive power source. Homeowners that generate their own alternative energy via net metering need only pay surcharges on elecricity exceeding what they generated during the month. Unlike Germany's EEG, this does not finance via raising electrical rates for all customers. It is a way of igniting demand for small businesses installing home systems. Sundowns: Both Homeowner and Electric company have their entitlement to the surcharge benefit phased out as the calculated cost of their investment is paid back via the surcharge. Vehicles with paid off batteries do not have to pay a battery surcharge, only the alternative energy surcharge.)
I am new to this and so it wouldn't be surprising if I have made some serious errors here. If so, I would be indebted to anyone who can take the time to point out my errors. Is there something wrong with the calculations or data?
Notes:
*Assuming a national rate of 10 cents per KwH. Assumes 20% efficiency for a gas car, and 81% for electrical- including mechanical inefficiencies. At 36.4 KwHs of energy per gallon of gas used in a 100% efficient car, actual power utilized is 7.28KwHs/gallon. To deliver the equivalent power, and 81% efficient electrical vehicle would require 8.99 kwHs/ gallon, making its equivalent cost per gallon at 89cents.
** DOE cites R.L. Polk estimate of 181.4 million registered vehicles (residential and non residential) ftp://ftp.eia.doe.gov/pub/consumption/alternative.fuels/stock2b.pdf see page 2-6. They base their estimate of US cars on this 1991 figure. Presumably, they regard that as representative of the current fleet numbers. Diesel Industry Forum states that 3% of new vehicle sales are diesel. (source) This puts gasoline vehicles at 175.9 million.
DOE's Energy Information administration page states US daily consumption of finished motor gasoline was 9.253 million barrels per day for 2006 (388 million gallons) (source)
388 million gallons divided by 175.9 million gas vehicles yields 2.2 gallons per day per vehicle.
*** 2.2 gallons times the previously calculated 8.99 kwhs/gallon would require a battery with 19.85 KwHs
**** GM states the cost of the Volt's Li-Ion will be $10K for 16Kwhs (source)
***** 388 Million gallons/ day means 3.49 billion KWHs /day (1275 billion per year). Total US electricity produced in 2006 was 4063 billion Kwhs, so new production needed is 31% of this.
References:
Solar grand plan testimony
The odd thing about "Identity politics" is that it has nothing to do with identity.
If someone requested that I be intellectually honest and answer whether I thought Dolly Parton would be where she is today if she had a small chest, then this is pretty much the level of political analysis that the news shows have been engaging in.
Sure- I understand about competing for viewership and all, but please don't suggest I am discovering some truth about Parton's identity by considering the role of bust size in her career. Please don't suggest we are gaining some new insights about ourselves when we are asked such penetrating questions as: "Can you honestly say you are indifferent to Dolly Parton's chest?"
Really- the whole reduction is fairly insulting- not to Parton but to me. Because what it is saying is that my evaluation of Parton's work has to do with something other than my honest reaction to her music.
"Journalists", Geraldine, Political pundits- Listen up- I'd be for Parton or Obama if I only had a radio.
This consituency crap is not about identity- it is the furthest thing from it. It is about pigeonholing not just candidates but citizens.
It's insulting and we are sick of it.
My proposal below uses some ideas about energy policy embodied in legislation such as the recently passed H.R. 5351 (link). It could be coupled with the Solar Grand Plan's idea for use of $400 billion in seed money to initiate building of an significant solar generation (For more information see Scientific American 1/2008 issue and thread discussion following (link)). Power requirements to replace all petroleum vehicles with electrical vehicles is around 1300 billion KwHs (assuming 146 billion gallons of gas/ year times 9 Kwhs equivalent energy utilized by an electric vehicle to generate the same power utilized by a gallon of gas [20 percent efficiency for gas, 81% efficiency for electric vehicle]). So that is something like a required increase of 25% beyond our current 3 Terawatt capacity. Unlike the solar grand plan, this does not require some unspecified mechanism to efficiently and economically force the retirement of undesirable sources.
This creates a huge new demand and restricts the technologies that can be used to answer the new demand.
The central idea is financial- it is the insight that an untapped source of revenue may be leveraged: the difference between electrical energy cost and price of gasoline at the pump. This difference can be used to incent demand for electric vehichles, defray the cost of car battery technology, and guarantee a good return on investment (ROI) for energy companies investing in the required more expensive alternative energy sources. No specific technology for electrical vehicles or alternative energy technology is mandated.
Scheme outline:
1) Federal government subsidizes the cost of the batteries for domestically manufactured all-electric vehicles at the rate of $1 per 1KW per 100lbs of curb weight. (this metric allows for a 100 mile range).
2) Power companies are required to surcharge for electricity at 75% of the prevailing national rate for price per gallon of gas. So for example, at $4.00 gas, cost per KwH would be 33 cents**, not the prevailing national rate of 10 cents per KwH.
3) The power company totals the power used for electric cars. With the clock started at the beginning of the program, if the power company has built additional capacity from a renewable non CO2 generating source*, then they keep the revenue from the surcharge. If less, they only keep the revenue for which they had actual capacity to generate. The remainder of the surcharge fees are submitted to the federal government and is used to defray the cost of the battery susidy.
*qualified sources include solar, wind, hydroelectric, wave. If the company had 100MW of such power but electric car rate was 200MW, then they keep the surcharge only for the first 100MW of capacity.
**(Calculation: There is 36.4 KWh of energy per gallon of gas. At 20% thermodynamic efficiency typical of car engines cruising, that's 7.28Kwh of energy utilized per gallon. Electrical vehicle motor and mechanical energy efficiency is about 81%, so an electrical vehicle requires 8.99 Kwh equivalent power per gallon of gas. That means for the equivalent energy of a gallon of gas at $4.00/gal, you would have to pay 45 cents per KwH, making the 75% discount rate come out to 33 cents.)
Analysis-
Q/A section:
Q: What makes the car owners pay the higher rate?
A: The same technology that is used by cable video or cellular phone systems to authenticate devices before they access services. In the same way that your cell phone is challenged and authenticated on a cellular network to confirm it is allowed to use the system, software in an electrical car challenges the charging device to verify that it is a legitimate charging device. All legitimate charging devices communicate to the electrical company the amount of KWHs that were used to charge the electrical vehicle.
Q: Couldn't the charging system be gamed?
A: Some hackers may learn how to bypass security on smart meters that charge vehicles. An encryption algorithm in the car authenticates the charger as a valid source of energy. Even if the security is bypassed, the electrical company can detect the fast surge of power required to recharge an electric car overnight. This second level of detection could be avoided by slowly charge batteries (assuming the gamer only traveled short distances per day), or if the gamer had multiple packs of batteries.
Q: Why not 200 mile range? Why not 50% not 75% surcharge? Why not perscribe battery type? Why exclude Hybrids? Why not allow $1.50 per watt if Altairnano or other advanced battery types are used?
A: Lots of variables are there to work with- I made a rough sketch setting these parameters for the purpose of illustration of the core concept of the scheme. To evaluate the options, an economic model would have to be constructed to determine the optimal weights on each of the parameters to achieve the optimal outcomes. I think that due to the sustained high price of petroleum due to demand in the rapidly industrializing third world (especially China and India), this leverage will not evaporate as after previous petroleum price spikes.
