Thursday, June 30, 2005

Morse Coders Faster Than SMSers

Jay Leno did a text off between two text messengers and two Morse coders. The Morse coders handily beat the young whippersnappers with time to spare
Maybe it is time to add a new a new Morse code module to cellphones. Instead of hunting for tiny numeric keys, you could have one big button that you could just tap. Or, if you have a touch sensitive screen, you could just use that.

Video of it: .wmv.

Via MAKE:Blog via Boing Boing


iPod Flea

"iPod Flea: You'll be itching to use it."

Too funny: pop up link via NY Times.


Tuesday, June 28, 2005

Bacteria Pull Off Photosynthesis sans Sunlight

Scientists have found a photosynthetic bacterium that doesn't live off the light of the sun. Instead, it uses the dim light given off by hydrothermal vents some 2,400 meters below the ocean's surface.

The bacteria have a sophisticated antenna system that allows them to collect the low light emanating from hydrothermal vents, the researchers explain in a report published online this week by the Proceedings of the National Academy of Sciences. This light energy is then transferred to the organism's reaction center, where photosynthesis takes place. "This shows that photosynthesis is something that is not limited only to the very surface of our planet," Blankenship says. "It lets you consider other places where you might find photosynthesis on Earth as well as on other planets."
I love these little bacterias hanging out in the hydrothermal vents. Photosynthesis in the bottom of the ocean. Who would have thunk? Makes you wonder once again if this is where life began.

Via Scientific American


Wednesday, June 22, 2005

Friedman Gets on the 500 MPG Bandwagon

I was reading Tom Friedman's recent article on 500 mpg cars and thinking that I had read this article before. Then it dawned on me, this is the same article Fareed Zakaria's wrote 2 months ago (see previous post).

First, start with an explanation of flex-fuel cars and a little corporation name dropping:

Zakaria: Ford, for example, makes a number of its models with "flexible-fuel tanks."

Friedman: Then add to that flexible-fuel cars, which have a special chip and fuel line that enable them to burn alcohol (ethanol or methanol), gasoline or any mixture of the two. Some four million U.S. cars already come equipped this way, including from G.M.
Then you need a random stat on how Brazil is ahead of the US:
Zakaria: Forty percent of Brazil's new cars have flexible-fuel tanks.

Friedman: Brazil hopes to have all its new cars flex-fuel ready by 2008.
Followed by an explanation of when you would recharge a "plug-in" hybrid:
Zakaria: The next step is "plug-in" hybrids, with powerful batteries that are recharged at night like laptops, cell phones and iPods.

Friedman: But, says Luft, if you had a hybrid that you could plug in at night, the battery could store up 20 miles of driving per day.
And take us home with the math Gal Luft provides on how you get to 500 mpg:
Zakaria: Here's the math (thanks to Gal Luft, a tireless and independent advocate of energy security). The current crop of hybrid cars get around 50 miles per gallon. Make it a plug-in and you can get 75 miles. Replace the conventional fuel tank with a flexible-fuel tank that can run on a combination of 15 percent petroleum and 85 percent ethanol or methanol, and you get between 400 and 500 miles per gallon of gasoline.

Friedman: But, says Luft, if you had a hybrid that you could plug in at night, the battery could store up 20 miles of driving per day. So your first 20 miles would be covered by the battery. The gasoline would only kick in after that. Since 50 percent of Americans do not drive more than 20 miles a day, the battery power would cover all their driving. Even if they drove more than that, combining the battery power and the gasoline could give them 100 miles per gallon of gasoline used, Luft notes. As Luft notes, if you combined a plug-in hybrid system with a flex-fuel system that burns 80 percent alcohol and 20 percent gasoline, you could end up stretching each gallon of gasoline up to 500 miles.
I had always liked Friedman because he was writing original things that you don't read in other places. Time to revisit that.

Via New York Times


VCs get into Clean Tech

"Clean tech," is a term that encompasses such things as solar energy, water purification systems and alternative automotive fuels.

That message is resonating with venture capitalists and individual investors in the Valley, where growing rich through doing good is considered the ideal.

They are driven in part by the high price of oil, which hovered around $59 a barrel on Tuesday, and the vast unmet demand for electricity in China and India.

"You look at all the development that's going on in China and India right now, and you realize that two-fifths of the world's population is going through the kind of industrialization that one-fifth the world's population experienced in the 20th century," Mr. Straser said. "The size of the opportunity here is immeasurable."

Clean tech represented a 1.2 percent share of the total dollar amount of venture capital invested in 2000. In 2004, the $520 million that venture capitalists invested accounted for a 2.6 percent share of the overall venture pie.
I am glad to see that the VCs are getting into Clean Tech business.

Via New York Times


Friday, June 17, 2005

Blue Brain

The most complex object known to humanity is the human brain—and not only is it complex, but it is the seat of one of the few natural phenomena that science has no purchase on at all, namely consciousness. To try to replicate something that is so poorly understood may therefore seem like hubris. But you have to start somewhere, and IBM and the Ecole Polytechnique Fédérale de Lausanne (EPFL), in Switzerland, propose to start by replicating “in silico”, as the jargon has it, one of the brain's building blocks.

In a partnership announced on June 6th, the two organisations said they would be working together to build a simulation of a structure known as a neocortical column on a type of IBM supercomputer that is currently used to study the molecular functioning of genes. If that works, they plan to use future, more powerful computers to link such simulated columns together into something that mimics a brain.

Assuming that the growth of computing power continues to follow Moore's Law, Charles Peck, the leader of IBM's side of the collaboration, reckons it should be feasible to emulate an entire human brain in silico this way in ten to 15 years.
Oooh, very cool. 2015: a brain replicated in silicon. I am marking my calendar now.



House Market Bubble

The housing market in the US appears to be in bubble mode. People who knew nothing about real estate 5 years ago are now jumping in hoping to get rich off quick off of rising housing prices.

What makes this get-rich-quick formula more dangerous is that many investors are willing to buy properties on which the rent is too low to pay for financing and other monthly costs. Their bet is that rising property prices eventually will make these deals profitable.
The Economist is already writing an article "After the Fall", because they have been writing about the bubble for a while now.
According to, Americans pulled out roughly $705 billion of equity from their homes last year, up from $266 billion in 1999.
That is a large increase and helps to explain how Americans keep spending so much. I believe that GDP growth in '04 was around $300-400 billion, so it could be argued that all the growth was just put on the credit card of escalating housing prices.
So mortgage borrowing has grown even faster than home values have. As a result, homeowners' equity as a percentage of the market value of all homes declined to 56 percent at the end of 2004 from 57 percent five years before, according to data from the Federal Reserve.
I am surprised that the equity number is about the same. Would have thought it would drop as people use more leverage. But, when the bubble pops I bet it goes way down.

This is a good article, so I would recommend reading the whole thing.
Via Pittsburgh Post Gazette via the Wall Street Journal


Wednesday, June 15, 2005

Skilled-Labor Shortage Hits India

India is beginning to see a shortage of properly skilled labor in its back-office outsourcing industry and could fall short by 250,000 workers in four years, officials said Tuesday.

"The problem is not with the quantity but with the quality," said Rajeeva Ratna Shah, a top official of the federal Planning Commission, which directs India's economic strategy.

Only a fraction of the 3 million graduates produced by India each year are ready to be employed in the outsourcing industry, with others needing several months of training, Shah said.

India employs 348,000 people in such back-office outsourcing alone and adds 150,000 jobs each year. The industry earned $5.2 billion in the fiscal year that ended in March.

"Companies are able to select only eight or nine people out of 100 who apply, and that's pretty low selection ratio," Karnik said.
Hmmm, maybe India can look to outsource their outsourcing work to Silicon Valley. Lots of highly qualified people looking for work there.

Via Skilled-labor shortage hits India


Meditation Leads to 23% Lower Death Rate

Practicing Transcendental Meditation — a technique involving intense breathing exercises and the repetition of words, or "mantras" — may have benefits beyond stress reduction. It might actually help you live longer.

Researchers at five universities and medical centers including the Medical College of Georgia and the University of Iowa Carver College of Medicine tracked 202 patients with high blood pressure for up to 18 years.

They found that participants who used Transcendental Meditation twice a day for 20 minutes had a 23 percent lower death rate from all causes and nearly a third lower death rate from heart disease than those who did not practice the form of meditation.
That seems like a pretty serious study if it lasted for up to 18 years. I wonder how a 23% lower death rate compares with other ways to improve your health like: 20 minutes of exercise a day, eating healthy or using blood pressure and cholestrol lowereing drugs.

via Seattle Times


Workout While You Work

Sitting at their desks is about the last thing workers would do in Dr. James Levine's office of the future.

Instead of being sedentary in front of their computers, they'd stand. But instead of standing still, they'd walk on a treadmill.

His team developed an alternative to the traditional cubicle — workstations that combine a computer, desk and treadmill into one unit. It was a refinement of a desk Levine created for himself about six months ago.

Levine kept up a 1-mph pace on his treadmill while checking e-mail and fielding questions from a reporter. That speed is slow enough to avoid breaking a sweat but fast enough to burn an extra 100 calories per hour.

The makeover was relatively cheap. Levine says the 10 workstations cost about $1,000 each — about half the cost of a cubicle — and remodeling the space cost about $5.50 per square foot.
I had this idea a year or two ago, and I am always pumped when someone takes one of my ideas and turns it into a real product. I think better while standing and walking, so I figure hooking a computer up to a treadmill would make me more productive and creative without even taking the health effects into account. Sign me up.

Via Asbury Park Press


Tuesday, June 14, 2005

Michael Jackson Timeline

You can't really make this up. Michael Jackson's site has this crazy flash video with the most important dates of the last 80 years:

January 15, 1929 Martin Luther King is born.
November 9, 1989 the Berlin Wall falls.
February 11, 1990 Nelson Mandela is freed.
June 13, 2005 Michael Jackson is declared innocent.

Ahh, I think 3 out of 4 of those are legitimate.

Really though, you want to check out this frickin' hilarious timeline of Michael Jackson's face.


Even Terrorism Now Requires a College Degree

While madrassas may breed fundamentalists who have learned to recite the Koran in Arabic by rote, such schools do not teach the technical or linguistic skills necessary to be an effective terrorist. Indeed, there is little or no evidence that madrassas produce terrorists capable of attacking the West.

We examined the educational backgrounds of 75 terrorists behind some of the most significant recent terrorist attacks against Westerners. We found that a majority of them are college-educated, often in technical subjects like engineering.

The 1993 World Trade Center attack involved 12 men, all of whom had a college education. The 9/11 pilots, as well as the secondary planners identified by the 9/11 commission, all attended Western universities, a prestigious and elite endeavor for anyone from the Middle East. Indeed, the lead 9/11 pilot, Mohamed Atta, had a degree from a German university in, of all things, urban preservation, while the operational planner of 9/11, Khalid Sheikh Mohammed, studied engineering in North Carolina. We also found that two-thirds of the 25 hijackers and planners involved in 9/11 had attended college.

Like the view that poverty drives terrorism - a notion that countless studies have debunked - the idea that madrassas are incubating the next generation of terrorists offers the soothing illusion that desperate, ignorant automatons are attacking us rather than college graduates, as is often the case. In fact, two of the terrorists in our study had doctorates from Western universities, and two others were working toward their Ph.D.
Hmm, I had bought into the idea that the madrassas were part of the problem. Guess I need to revisit that. I wish this article also looked at the suicide bombers in the Middle East. I bet most of them don't have a college education.

via New York Times


Neuroimaging Replaces Torture

Torture is obsolete, or at least obsolescent. Researchers, in part funded by the Department of Defense, have developed technologies that may render the “dark art” of interrogation unnecessary. As these technologies are implemented, many of the legal issues surrounding the aggressive “counter-resistance techniques" the United States presently employs against individuals detained in the Global War on Terrorism (GWOT) may be rendered moot. At the same time, however, these technologies themselves raise new legal issues.

The most promising of these new technologies is psychiatric neuroimaging, the predominant form of which is functional Magnetic Resonance Imaging (fMRI). FMRI provides near real time, ultra-high resolution, computer-generated models of brain activity. These models allow the operator to observe a subject’s neural response to cognitive or sensory-motor tasks. In essence, fMRI allows the operator to watch the subject’s brain think.
Cool stuff.

via Boing Boing


Friday, June 10, 2005

Brazil and Ethanol

In the course of a week I ran into articles about Brazil and ethanol in 3 places: Wired, Foreign Exchange and the Economist. And today I have to add a fourth with this history of ethanol and Brazil from the BBC. So I decided I needed to look into this a little further. It got kind of out of hand and I ended up reading a lot. So this is full of "footnotes" which are links to the underlying source on the web.

Turns out that Brazil got into the ethanol as fuel business back in the 70s as a reaction to the Middle East Oil Crisis. They have had mixed success with ethanol since then (read the BBC article for background) but now with oil prices again rising and the ethanol technology maturing they are the world leaders with it.

Today they produce 3,989 million gallons of ethanol a year, slightly more than the US at 3,535 (1). This replaces about 40% of the fuel that would be needed to run the fleet on gasoline alone (2). It is a lower percentage of total oil usage due to diesel and other oil by products. I estimate it at 10% of total oil, but I could be off. See total oil demand here and ethanol number above. They sell ethanol at "gas pumps" both directly (at 94 per cent ethanol, 6 per cent water) and as gasohol (76 per cent gasoline, 24 per cent ethanol, ie all "gasoline" is 22% ethanol) (3). On a world basis, Brazil produced about 40% of total ethanol. In oil terms total ethanol produced worldwide is about 500,000 barrels a day or 2% of gasoline use (4) or .5% of the 82 million barrels of oil used daily.

In order to have a car run directly on ethanol, it needs to be modified slightly.

Equipping a vehicle to run on ethanol is a matter of toughening some hoses and installing a computer device to sense the amount of alcohol in the fuel so it can mix with the correct amount of air for combustion. Such adjustments cost less than $160 per vehicle, Shosteck said.

An unmodified car or truck could run on ethanol but is likely to have problems starting in cold weather because of the fuel-air mix, Lampert said. Also, unmodified hoses and other engine parts could degrade from the high alcohol content. (5)

Another thing that sets flex-fuel autos apart from their ethanol-only predecessors, which are notoriously slow to warm up on cold days, is a small gas tank under the hood that is used to start the car in chilly weather. Once the engine is running, the car automatically switches back to ethanol or whatever is in the main tank.(6)

While in the 80s Brazil sold cars that ran just on ethanol, they now sell Flex-Fuel cars that will run on either ethanol, gasoline or gasohol. These cars are getting popular.
Brazilians bought almost 220,000 of these hybrid vehicles in the first nine months of the year, representing 24 percent of all new-car sales in the country.(6)
Currently ethanol is selling at about 1/2 the price of gasoline at the pump (6) or about $.60/gallon (7) (The US has a $.54 tariff per gallon on ethanol, which is why we can't import it cheaply from Brazil and use it). Ethanol has 1/3 less energy per gallon as gasoline (84,400 Btu vs. 125,000 Btu (8)), but I was unable to ascertain how this translates to in terms of MPG. I bet it is somewhere between 25-33% less than gasoline. So even taking this into account ethanol is a cheaper substitute for drivers. I took a look into the underlying economics to see if government subsidies accounted for this cheapness, but it does not appear so. They were subsidized in the 80s, but this has been discontinued. Such economic analysis is tricky because there are a lot of hidden environmental and health costs in both oil and agriculture, but there is no obvious subsidies that is making ethanol cheaper.

Brazil has even gone crazy and made an airplane that runs on ethanol.

The ethanol in Brazil is made from sugar cane. This appears to be much more efficient in terms of gallons per acre and therefore cheaper than corn ethanol in the US. 60% of the sugar grown in Brazil is used for ethanol (3). Brazil has 5.45 million hectacres (1 hectacre = 2.47 acres) in sugarcane cultivation (9) (Wikipedia puts it at 45,000 km^2, which is a little less). Each ha produces about 75.3 tonnes of sugar cane a year(9). Each tonne produces 75 litres or 19 gallons of ethanol(10). Do the math and it comes pretty close to that 60% number (actually 54%, but close enough).
The alcohol industry, entirely private, was invested heavily in crop improvement and agricultural techniques. As a result, average yearly ethanol yield increased steadily from 300 to 550 m³/km² between 1978 and 2000, or about 3.5% per year.(2)
There is more energy that can be extracted from the sugar cane as well.
One ton (1,000 kg) of harvested sugarcane, as shipped to the processing plant, contains about 145 kg of dry fiber (bagasse) and 138 kg of sucrose. Of that, 112 kg can be extracted as sugar, leaving 23 kg in low-valued molasses. If the cane is processed for alcohol, all the sucrose is used, yielding 72 liters of ethanol. Burning the bagasse produces heat for distillation and drying, and (through low-pressure boilers and turbines) about 288 MJ of electricity, of which 180 MJ is used by the plant itself and 108 MJ sold to utilities.

Sucrose accounts for little more than 30% of the chemical energy stored in the mature plant; 35% is in the leaves and stem tips, which are left in the fields during harvest, and 35% are in the fibrous material (bagasse) left over from pressing.(2)
I think this could be a model for a new "alcohol economy". But there are some downsides to this as well.

First, the land could be used to make food for people rather than cars, especially in Brazil with a substantial under nourished population. Although I just saw a show that said Brazil creates 3,000 calories of crops per capita, so they do have extra to be used. But, in a global food economy, this food could be exported to other countries with undernourished people.

Second, this increases the demand for land and in Brazil when you need more land for agriculture you cut down the Amazon rainforest.
The government said on Wednesday that deforestation jumped to its second highest level on record in 2003-2004, to 10,088 square miles (26,130 sq km) -- an area nearly the size of Belgium and slightly bigger than the U.S. state of New Hampshire.

Just under 20 percent of the world's largest tropical forest, which is home to an estimated 30 percent of the world's animal and plant species, has now been destroyed.

High world prices for Brazil's leading farm goods, such as soy which fetched around $10 billion in exports last year, are making farming very attractive in Brazil.(10)
So, maybe it would be better to use oil and save the Amazon, than use ethanol and cut it down. Though, from this report it appears has to do more with soybeans for exports than sugar cane (I am personally doing my part on this issue by boycotting all soyburgers and going for the real thing. :) Oh, what the soybeans are exported for use as cattle feed, and it takes many pounds of soybeans to create a pound of beef. Damn.).

Third, a major issue I have with oil is that it causes bad governments and retards the growth of economies. See previous post Saving Iraq from its Oil. But as part of that report states:
According to economic historians, this pattern explains the very different ways North and South America developed. In the latter, large plantations of sugar allowed landed elites to maintain concentrated economic and political control, and these elites resisted democratic reforms and the institution of property rights. In North America, by contrast, the cultivation of wheat and corn on small farms led tdispersiontion of economic power and more favorable conditions for democratization and institutional development.
So, maybe we will just be switching from big oil to big sugar.

Overall though, I think the downsides can be mitigated and this alcohol economy will be sustainable and possible to do with today's technology.


Mercedes Bionic Diesel, the Screensaver

Car Buyer's via Green Car Congress.
Usually things are either cool or lame. I think this is the first time I have ever experienced something that is both cool and lame at the same time. Download it (.exe) and check it out yourself. Gotta love the carpeted steering wheel and dash board.


Thursday, June 09, 2005

Imagine: 500 Miles Per Gallon

Big fan of the Fareedster. His Foreign Exchange show is really good. His Future of Freedom was an excellent book as well.

We are actually very close to a solution to the petroleum problem. Tomorrow, President Bush could make the following speech: "We are all concerned that the industrialized world, and increasingly the developing world, draw too much of their energy from one product, petroleum, which comes disproportionately from one volatile region, the Middle East. This dependence has significant political and environmental dangers for all of us. But there is now a solution, one that the United States will pursue actively.

"It is now possible to build cars that are powered by a combination of electricity and alcohol-based fuels, with petroleum as only one element among many. My administration is going to put in place a series of policies that will ensure that in four years, the average new American car will get 300 miles per gallon of petroleum. And I fully expect in this period to see cars in the United States that get 500 miles per gallon. This revolution in energy use will reduce dramatically our dependence on foreign oil and achieve pathbreaking reductions in carbon-dioxide emissions, far below the targets mentioned in the Kyoto accords."

Here's the math (thanks to Gal Luft, a tireless and independent advocate of energy security). The current crop of hybrid cars get around 50 miles per gallon. Make it a plug-in and you can get 75 miles. Replace the conventional fuel tank with a flexible-fuel tank that can run on a combination of 15 percent petroleum and 85 percent ethanol or methanol, and you get between 400 and 500 miles per gallon of gasoline. (You don't get 500 miles per gallon of fuel, but the crucial task is to lessen the use of petroleum. And ethanol and methanol are much cheaper than gasoline, so fuel costs would drop dramatically.)

Smart government intervention would include a combination of targeted mandates, incentives and spending. And it does not have to all happen at the federal level. New York City, for example, could require that all its new taxis be hybrids with flexible-fuel tanks. Now that's a Manhattan Project for the 21st century.
I like it! Screw the hydrogen car nonsense and build hybrid cars that run on gasoline or ethanol/methanol. Allow these cars to plug in at night to get energy from the electrical grid (which can start using more wind, solar, biomass and nuclear). Decrease our dependence on foreign oil and fossil fuels without requiring major infrastructure upgrades.

via Fareed


DaimlerChrysler Showcases 70 MPG Bionic Diesel Concept

DaimlerChrysler has unveiled a new “bionic” concept car that achieves outstanding results for fuel consumption and emissions with a combination of diesel engine technology, innovative emission control methods and aerodynamic design inspired by a natural example.

The Mercedes-Benz bionic car seats four, delivers better than 70 mpg in the US test cycle and exceeds Euro 4 emissions standards. It is premiering at the DaimlerChrysler Innovation Symposium in Washington.

The model they chose was the boxfish. Despite its boxy, cube-shaped body, this tropical fish is in fact outstandingly streamlined. With an accurately constructed model of the boxfish, the engineers in Stuttgart were able to achieve a wind drag coefficient of just 0.06 in the wind tunnel.
Ok, first, 70 mpg totally rocks, right on DaimlerChrysler engineers.
Second, that car looks horrible. Maybe it grows on you in time but I don't like it at all.
Third, I like this whole bionics things. Why reinvent the wheel if nature has already done it for you?
Forth, who would have ever thunk that the boxfish was aerodynamic? I have seen those guys swim underwater (and they swim very slowly) and thought man that shape doesn't look very efficient at all. I really thought they were the Hummers of fish, and now it turns out they are even more Prius than a Prius. Now a tuna, that looks like an aerodynamic fish to me. But a boxfish? Since when is anything with the word box in it aerodynamic? I mean, take a look at this image (and while you are there check out the kick ass Nudibranchs photography). Aerodynamic? Are you kidding me? But I guess that is why they pay the big bucks to the marine biologists and bionic engineers to figure this stuff out.

via Green Car Congress


Monday, June 06, 2005

Corporations and Social Issues

Interesting article by Ian Davis of McKinsey & Company as he describes how corporations should take a position between "the business of business is business" and Corporate Social Responsibility. A worthy read.

I like this description he gives of the role of a corporation in society:

A starting point may be for CEOs to articulate publicly the purpose of business in less dry terms than shareholder value. Shareholder value should continue to be seen as the critical measure of business success. However, it may be more accurate, more motivating—and indeed more beneficial to shareholder value over the long term—to describe business's ultimate purpose as the efficient provision of goods and services that society wants.

This is a hugely valuable, even noble, purpose. It is the fundamental basis of the contract between business and society, and forms the basis of most people's real interactions with business. CEOs could point out that profits should not be seen as an end in themselves, but rather as a signal from society that their company is succeeding in its mission of providing something people want—and doing it in a way that uses resources efficiently relative to other possible uses. From this perspective, shareholder-value creation or profits are the measure, and the reward, of success in delivering to society the more fundamental business purpose. The measures and rewards reflect the predominant values of the relevant society.


Washing Hands Could Save 103,000 Lives a Year

Infections that have been nearly eradicated in some other countries are raging through hospitals here in the United States. The major reason? Poor hygiene. In fact, hygiene is so inadequate in most American hospitals that one out of every 20 patients contracts an infection during a hospital stay. Hospital infections kill an estimated 103,000 people in the United States a year, as many as AIDS, breast cancer and auto accidents combined.

Hospitals in Denmark, Finland and the Netherlands once faced similar rates, but brought them down to below 1 percent. How? Through the rigorous enforcement of rules on hand washing, the meticulous cleaning of equipment and hospital rooms, the use of gowns and disposable aprons to prevent doctors and nurses from spreading germs on clothing and the testing of incoming patients to identify and isolate those carrying the germ.

These infections add about $30 billion annually to the nation's health costs. This tab will increase rapidly as more infections become drug-resistant.
As much as I am a fan of high tech solutions, if washing hands could save 103,000 lives and $30 billion, I think that the doctors ought to look into that.

via New York Times


Saturday, June 04, 2005

Mexico's Boom all On The Sly

From 2000 to 2004, the underground economy was Mexico's sole source of employment growth, and it's getting bigger all the time. Some economists estimate that as many as half the nation's workers eke out a living in subsistence jobs because there is nothing for them in the legitimate economy and no safety net for the jobless.
Wow, I had no idea the size of Mexico's underground economy.
Andrés Manuel López Obrador, mayor of Mexico City and a 2006 presidential hopeful, credits that entrepreneurial grit for easing tensions in a nation whose formal sector is creating far fewer than the 1 million jobs a year needed just to keep pace with population growth.

The friction is most evident in Mexico City, where an estimated 500,000 itinerant vendors ply their trade, hawking phone cards at traffic lights, bootleg CDs in the subway and snacks from kitchens set up on sidewalks.

In the first four years of President Vicente Fox's term that began in 2000, Mexico did not create a single net new position in its formal economy. That's the universe of legally registered businesses that pay employment taxes and enroll workers in the social-security system.

In contrast, off-the-books employment surged, fueled largely by street vendors, whose ranks ballooned by 40 percent from 2000 to 2003 to more than 1.6 million. In all, the Mexican government estimates that slightly more than 11 million Mexicans, or about one-quarter of the work force, toil in the underground economy. Some academics and economists here say half Mexico's work force is informal.

That shadow activity is weighing heavily on Mexico's development. Few in the informal sector pay business or income taxes. It's one of the reasons that Mexico, with one of the world's 15 largest economies, ranks with the likes of Sri Lanka when it comes to collecting revenue to pay for education, infrastructure and basic public services. That is hurting its global competitiveness.
via The Seattle Times


Honor Thy Teacher

Interesting proposal to help poor students in the US by Matt Miller.

Consider this 'grand bargain.' We'd raise salaries for teachers in poor schools by 50 percent. But this offer would be conditioned on two major reforms. First, the unions would have to abandon their lock-step pay scale so that we could raise the top half of performers (and those in shortage fields like math and science) another 50 percent. Second, the unions would have to make it much easier to fire the worst teachers, who are blighting the lives of countless kids.

In many big districts, salaries start around $40,000 and top out, after 25 years, around $75,000. Under this plan, starting teachers would earn $60,000. The top performing half of teachers (and the shortage specialties) would average $90,000. The best teachers would earn up to $150,000. With the amount they could save, the best teachers of poor children could retire with $1 million in the bank.

A move on this scale would change how teaching is viewed by college students who are deciding how to spend their lives. We'd finally be acknowledging the massive 'subsidy' schools lost once women were free to enter other professions after the 1970's. And there are environmental benefits, too; if a young couple thinks they could jointly earn $250,000 as teachers, we may well end up with two fewer lawyers!

This plan to make teaching poor children the most exciting career in America would cost roughly $30 billion a year. It's a 7 percent increase in the nation's K-12 spending, which would buy a 1,000 percent revolution in how teaching is viewed. Union leaders, superintendents and teachers have told me that while there are details to sort out, something like this could work. It could transform the teacher corps and its professional culture over the next decade.

Why can't timid Democrats put up the full $30 billion national plan against the G.O.P.'s plan to eliminate the estate tax, which would shower the same $30 billion a year on heirs in the nation's 3,000 wealthiest families?
I don't think it is the money per se that is important as much as it is the increase in social standing that comes with the higher income that will attract more teachers.

via New York Times


Do What You Love

Commencement speakers have long offered graduating seniors the same warm and gooey career advice: Do what you love.

The students graduating this spring will operate in a labor market that increasingly confers an economic advantage on the activities that people do out of a sense of intrinsic satisfaction - designing cool things, telling stories and helping others. For the class of 2005, "Do what you love" is no longer a soft-hearted sentiment. It is also a hard-headed strategy.

In other words, to make it in the emerging economy, we will have to do things that software can't do faster and that overseas knowledge workers can't do more cheaply. In addition, what we produce must also satisfy the growing consumer demand for products and services infused with emotion, spirituality and artistry.
via New York Times



For anyone who has travelled to Japan, this site is too funny:

Try and guess what this description is for:

Natural material: Its color and texture make a room of peace... Its warmth and gentleness relieve one's mind... Its simplicity and naivete never lose one's interest... Our lives and culture were made from and were developed by natural materials. In busy, everyday life, people of today have less chance to touch nature. Flower, nuts, ocean, twig, rock, leaf, wind, sky, sand, tree, water, river, forest, soil, plant and the Earth... The blessings of nature are the blessings of people. Take a pause, have a rest. Then, look back yourself and reconsider your life.
Yeah, that is how I would describe my Toilet Seat Cover.


Thursday, June 02, 2005

Increase Trust with a Nasal Spray

The researchers found that trust is surprisingly mechanistic: sniffing a spray containing a hormone called oxytocin increases a person's level of trust in others.

But they say the Swiss study, which appears in today's issue of the journal Nature, is the first to show that a simple administration of a hormone in humans can consistently alter something as socially sensitive as trust.
That is pretty interesting. You can sniff a nasal spray and increase your level of trust.

This being an interesting topic, lots of reporters covered it, but each put their own spin on it. I guess news really is in the eye of the beholder.

The New York Times took on the potential medical uses of this:
This may be an especially important ability in people with autism. Whether oxytocin or other hormones could affect such behavior is unclear, but the oxytocin study suggests it is worth investigating.

"To put it succinctly: I believe that oxytocin may help those people who have a pathologically low trust level," Dr. Fehr said in an e-mail message. "But you cannot induce a pathologically high trust level in normal people by giving them oxytocin.
The United Press International took the "sex sells" angle:
People are more likely to trust their money to someone else if they sniff oxytocin, a brain chemical nicknamed the "love hormone," Swiss researchers say.
The plays up the potential risks:
A spray of the hormone oxytocin might increase the levels of trust in humans, a Swiss study has found. However, the finding is likely to do more harm than good, due to the abuse of the hormone to pull off frauds.
And The Economist goes with (surprise, surprise) the economic angle:
Besides helping to unravel the biological basis of an important emotion, Dr Kosfeld and Dr Heinrichs also raise questions about some of the fundamentals of economics. Studies like these are beginning to shed light on the extent to which humans actually resemble Homo economicus, the proverbial rational economic agent. This particular case raises the possibility that those with different hereditary propensities to produce oxytocin, or different sensitivities towards it, might reach different conclusions when presented with similar economic decisions.


The Game Is Virtual. The Profit Is Real.

Interesting article about how people are able to make real money selling virtual goods in multiplayer online games.

Jason Ainsworth plays the online game Second Life at least four hours a day. In the game, he runs a virtual real estate development business. But his after-tax profit - about $1,800 a month - is real, and it's enough to pay the mortgage on his home in Las Vegas.

Earnings can be considerable. Ailin Graef, who goes by the screen name Anshe Chung in Second Life, said she was on track to earn about $100,000 in real money in her first year in the game's real estate business.

But game companies are beginning to accept "real-money trade" as a fact of life. Sony Online Entertainment recently began a service that allows players of its EverQuest II game to buy and sell items through a Sony site.

With about 10 million people worldwide playing at least one of the 350 or so massively multiplayer online games, there is no shortage of income-producing possibilities for the imaginative. Steve Salyer, a former game developer, is now president of Internet Gaming Entertainment, a Los Angeles company that runs He estimates that players spend a real-world total of $880 million a year for virtual goods and services produced in online games - not counting sales of the games themselves, and monthly subscription fees, often around $10.
In a way it seems crazy that people would spend real money for imaginary items, but I am sure that the investment bankers must have thought the same thing when Microsoft talked about selling software. Even though the goods are imaginary, they take real time to create, and time is a good that will always be scarce and therefore always valuable.

I also like this development from an environmental standpoint. I just finished reading a book about Ecological Footprints. The question the book left me with, is how do we reform our economy to live within our ecological constraints? And this looks like one very real possibility. As people spend more and more time in the virtual world, they spend less time doing activities in the real world that use natural resources. We will start spending more time playing video games about racing cars and less time actually driving them.

It also seems to me that a lot of our current consumption has to do with social status. You want a 4,000 sq foot house because your friends have 3,750 sq foot ones. In the real world this has negative environmental impacts. In the virtual world the status is still real, but without any environmental implications.

Wired had a good article on this a while back. And there was this side bar which I love about a Mexican "virtual sweatshop".
As the workers sat mouse-clicking virtual trolls to death, their characters acquired skills and gold at a brisk, assembly-line pace. For this, Black Snow paid the Mexicans piecework wages -- then turned around and sold the high-level characters and make-believe money on eBay.
Nice. But, it does make you think about outsourcing the work to India. How cool would it be to hire a personal game player, that would go around and do all the boring stuff so that you could get a cool character and could spend your time just doing the fun stuff.

via New York Times