Thursday, June 24, 2010

Churches of the Singularity - is Horgan truly an unbeliever?

Once upon a time if you put two phone handsets together, speaker to microphone, you get a massive burst of positive feedback. Each handset amplified the other’s signal. This acoustic eruption was a form of acoustic singularity.

You have to be of a certain age to remember that. Modern systems cut the feedback.

The ”Technologica Singularity” is positive feedback in the realm of technological innovation. New tools makes new tool creation faster and easier. Data storage units that costs millions and filled a room cost 50 cents to make and are the size of a small fingernail. Technology that makes things smart makes things smarter.

It’s the “smart things” bit that’s the problem. We know how to make human level intelligence; we make billions of ‘em. There’s obviously no chemistry barrier to creating artificial intelligences at least as smart as the smartest possible human. These entities will then will create their smarter descendants and so on. (Unless they are smart enough to know that’s a very, very, bad idea. They will then kill us so we don’t make any more of them.)

The “explosive intelligence” form of the technological singularity dates back to about 1960, but it’s been a feature of science fiction since the 1980s. It’s most often associated with the seriously fun writings of Vernor Vinge, but many of my favorite writers have taken a whack at it. Over the past 10 years it’s become an obsession for geeks who, through great leaps of hopeful imagination, have come to believe that “the rapture of the nerds” will make them immortal.

Now we have the Churches of the Singularity. The Vingeans (sorry Vernor) believe we can’t avoid Strong AI and that this may be a good think or a very bad thing. (Bad for humans and dogs anyway, whales might be delighted.) Vingeans usually put the date for Strong AI between 2040 and 2200.

The Kurzweilians and Moravians believe that humans will integrate with Strong AIs, and that this will occur soon enough that they will, personally, become immortal. Their date predictions are always within their personal life expectancies.

The Heretics suspect that the Programmer and the Player have excluded Strong AI from the Program. The Denialists believe that something will prevent Strong AI, but they rarely say what. They have an uneasy relationship with the Heretics.

I have mostly of the Vingean faith, but I’m tempted to Heresy.

It’s pretty easy to put most people in one of these churches. Sometimes, however, one of the Faithful will deny their roots. For example, Scientific American’s John Horgan considers himself an unbeliever. In a recent critique of the Faith he wrote

Cross-check by John Horgan: Singularity Schtick: Hi-tech moguls and The New York Times may buy it, but you shouldn't

The New York Times Sunday business section recently ran an enormous puff piece on Ray Kurzweil and the "Singularity" cult (my term, not the Times's)…

… Believers squabble over how exactly the Singularity will go down. Will we just genetically soup ourselves up? Become human–machine cyborgs? Totally synthetic robots? Digitize our psyches and download them into cyberspace? All the predictions entail superintelligence and immortality…

… Bill Gates has blurbed Kurzweil's books. Other admirers include Peter Thiel, a co-founder of PayPal, and Peter Diamandis, who heads the X PRIZE Foundation, which promotes space travel. … Sergey Brin and Larry Page, co-founders of Google, helped Kurzweil establish a "Singularity University" at NASA Ames Research Center in California…

…When I debated Kurzweil at the 2008 Singularity Summit, a revival meeting for the faithful, he seemed all too sincere. But his Singularity schtick is so out of sync with reality that I'm beginning to wonder if even he takes it seriously…

Methings he doth protest too much. Horgan is conflating the Kurzweilians with the greater Church. I am certain he knows better. He never claims Strong AI is not possible, he only says it’s unlikely to happen soon. He is clearly a Vingean in denial. Welcome to the Faith John.

See also:
and more about the strong AI answer to the Fermi Paradox (Church of Vinge, Fermi schism)

The bicyclist’s panopticon

Sometime in the next ten years, there will be a thumb sized bell on the left side of my rear bicycle rack – and perhaps another on the right side.

It will contain a battery, a GPS, a clock, a gyroscope and a proximity sensor, 1TB of memory, 1 button and 3-4 lenses. It will cost $100.

As I ride it will take pictures to the front, rear and left sides. It will constantly thin out older images to make room for newer ones. Images will be digitally signed and will incorporate location and time stamps.

If an object passes within 3 feet an incident marker will be set and neighboring images will be preserved. If the gyroscope detects abrupt acceleration or if the button is pushed incident markers will be set.

Images will be admissible as evidence. At the end of day’s commute a bicyclist may choose to submit incidence reports with annotations. Depending on the circumstance a driver may receive a warning, a ticket, or a summons.

The bicyclist’s panopticon will make the streets safer, and encourage some aging boomers to use alternative transportation (my generation).

Hat tip: David Brin, of course, and Jon Udell on defensive surveillance for cyclists.

Update 8/15/2010: The Cerevellum cycle computer includes a rear view digital camera and accident detection/recording capability. The owner is taking pre-orders.

I think this is one of my safer predictions.

Update 9/16/10: The Lookcie. Did I say ten years? I meant 3 years.

Update 2/2/11: Increasing use of bike cameras in the UK

Sunday, June 20, 2010

Beyond the first cause: Deepwater Horizon and the publicly traded company

Airplane crashes, the Great Recession, amputating the wrong limb, and the Deepwater Horizon eruption all have one thing in common -- layers of causation. To prevent recurrences you need to walk the causal chain. If you stop at the first cause, such as "Dr. Gordon was up to late and confused right with left", you often get nowhere - or worse.

Consider a possible causal chain in our latest whitewater times disaster. Let's assume, for the purposes of discussion, that we have the technology to cost-effectively extract Gulf oil with a "reasonable" risk of "very unwanted outcome". That presumably means a low probability of catastropic blow out and a range of effective response strategies.

Let's further assume that BP made some seriously bad decisions to save a relatively small amount of money. There's some evidence now to suggest that, even by the standards of an extraction industry, BP was unusually negligent.

The next step is to ask if this behavior was an aberration or if it was typical. If it was typical of BP, but less common at (say) Exxon (yes, hard to believe), then we should ask why. Joe Nocera suggests answers to both of these questions (emphases mine) ...
In 2 Accidents, BP Ignored Omens of Disaster - Joe Nocera - NYT
We have to get the priorities right,” the chief executive of BP said. “And Job 1 is to get to these things that have happened, get them fixed and get them sorted out. We don’t just sort them out on the surface, we get them fixed deeply.”

The executive was speaking to Matthew L. Wald of The New York Times, vowing to recommit his company to a culture of safety. The oil giant was adding $1 billion to the $6 billion it had already set aside to improve safety, the executive told Mr. Wald. It was setting up a safety advisory panel to make recommendations on how the company could improve. It was bringing in a new man to head its American operations — the source of most of the company’s problems — who would make safety his top priority...

... the interview took place nearly four years ago, after BP’s previous disaster on American soil, when oil was discovered leaking from a 16-mile stretch of corroded BP pipeline in Prudhoe Bay in Alaska. And that was just a year after a BP refinery explosion in Texas City, Tex., killed 15 workers and injured hundreds more.

Nor was the chief executive in question Tony Hayward ... the interviewee was his predecessor and mentor John Browne, who had spent nearly 10 years at the helm of BP before resigning in May 2007.

Do you remember the Prudhoe Bay leak and the Texas City explosion? They were big news at the time, though they quickly faded from the headlines. BP was fined $21 million for the numerous violations that contributed to the Texas City explosion, and it was forced to endure a phased shutdown of its Alaska operations while it repaired the corroded pipeline, which cost it additional revenue.

In retrospect, though, the two accidents represented something else as well: they were a huge gift to the company. The fact that these two accidents — thousands of miles apart, and involving very different parts of BP — took place within a year showed that something was systemically wrong with BP’s culture. Mr. Browne had built BP by taking over other oil companies, like Amoco in 1998, and then ruthlessly cutting costs, often firing the acquired company’s most experienced engineers...
... On Thursday, during his day before an angry House energy subcommittee, Mr. Hayward was confronted with the fact that BP had been cited by the Occupational Safety and Health Administration for 760 “egregious willful” safety violations in its refineries. Mr. Hayward tried to slough this off by claiming that the violations had taken place in 2005 and 2006 — before, that is, he became chief executive and brought his “laser focus” on safety.

But Mr. Hayward was not telling the truth. According to the Center for Public Integrity, which obtained the data under the Freedom of Information Act, the violations all took place between 2007 and 2010, very much on Mr. Hayward’s watch. What’s more, the company violated something called O.S.H.A.’s “process safety management standard” — which is precisely what that BP advisory panel had been charged with examining after the Texas City explosion. In October 2009, O.S.H.A. fined BP an additional $87 million for refinery deficiencies. It doesn’t sound like the company took its advisory panel’s recommendations very seriously, does it?

Or take the Deepwater Horizon disaster itself, which was preceded by so many instances of corner-cutting and poor decision-making that an accident was practically preordained. Drilling one of the deepest wells in history, the project used only one strand of steel casing, when it should have used at least two. Halliburton recommended that BP use 21 “centralizers,” which help ensure that the well doesn’t veer off course as it goes deeper into the earth, but the company used just a half-dozen. BP failed to conduct a crucial test to make sure that the cement holding the well at the bottom of the sea was sturdy enough.

And the engineers for BP on board consistently ran roughshod over subcontractors like Halliburton, who openly worried that BP was making decisions that could have catastrophic consequences. “This is how it’s going to be,” one BP engineer reportedly said, overruling a contractor on the critical question of when to replace the drilling mud — which keeps explosive natural gas from flowing out of the well — with seawater....

... Changing a company’s culture is always hard, no doubt about it. And it is especially hard for a company like BP, which has had such enormous success these last few years, reaping $14 billion in profits last year alone. For such companies, it often requires a crisis to change. Microsoft changed after its antitrust trial a decade ago. Tyco International changed after its chief executive, Dennis Kozlowski, went to jail. And chances are, BP is now going to change, too.

This time, the world’s attention will not quickly fade, as it did after the Prudhoe Bay spill. The financial hit, which several Wall Street analysts believe could top $100 billion, is going to be severe. The pressure from the United States government will be unrelenting.
If you read beyond the lede, it's obvious Nocera is furious. Oddly the fact that Hayward lied to Congress hasn't gotten much attention elsewhere. Please note the petty fines BP received, pocket change against $14 billion in profits. As is true in many industries economic transformation has made traditional fines irrelevant. We need to start fining companies as a percentage of revenues and profits. A $4 billion fine in 2008 would probably have prevented the Deepwater Horizon disaster.

So we've identified one deeper cause -- a core function of our judicial system, financial penalization, is deeply inadequate.

Moving further along the causal chain, we find a company with a dysfunctional corporate culture, a culture that made very poor risk judgments. The answer to that culture is to remove the board, remove the CEO, and remove most of middle and upper management. That may be most effectively done by dismantling BP.

Moving even deeper, we may ask how BP got such a pathologic culture. We should pay attention to how BP was built and how those acquisitions became profitable ...
... Mr. Browne had built BP by taking over other oil companies, like Amoco in 1998, and then ruthlessly cutting costs, often firing the acquired company’s most experienced engineers...
We've seen similar acquisition patterns in the finance industry. In the short term safety measures are overhead. The quickest way to revenue is to strip them out. Similarly experienced engineers are very expensive, the quickest route to profitability post-acquisition is to eliminate them. It will typically take years for the knowledge impact to be felt.

Deepwater Horizon is a great disaster, but also a great opportunity. If we support Obama's approach, and the investigative panel he's assembling, there's a change people with real power will come to useful conclusions with implications well beyond oil extraction.

Deepwater Horizon spill and the gulf

If the gulf were my bathtub, how much oil would I add to equal the BP spill of 2010?

Let's say BP spills 5 million liters of oil. Since a cubic meter is 1000 liters, this is 5000 cubic meters.

That is a lot, but the Gulf is very large:

A square mile is 2.6*10^6 square meters.

So the gulf is about about 1.6*10^11 square meters by 2000 meters or about 3.2*10^14 cubic meters.

So the ratio of oil volume to gulf volume is about 1/31,720,000.

If the my bathtub holds 20 liters, I would need to add about 1/1586 of a milliliter of oil to resemble the total Deepwater Horizon spill. I doubt I'd notice it.

Of course the local effects of the oil are very large. I'm also pretty sure I've made some arithmetic errors (it's quite late and, alas, I rarely do even arithmetic these days). Still, the gulf is really vast.

Friday, June 18, 2010

Devalue the Yuan or I shoot my economy

If China doesn't devalue the Yuan, Europe will shoot its economy ...
BBC News - Obama warns G20 leaders on budget cuts
... The governments of several large European countries, Germany and the United Kingdom among them, have recently outlined plans for spending cuts.

In comments apparently directed at China, Mr Obama also stressed the need for flexible exchange rates to ensure a balanced global economy.
If Europe shoots its economy, China will lose a big export market. So it's a credible threat, even if insane.

Thursday, June 17, 2010

AT&T Contracts, Terms of Service and Plan Terms – observations of interest

I visited my local AT&T store today to confirm that AT&T iPhone pre-ordering is done. They’ll have some phones in store 6/24 for those keen to wait in line and be disappointed. You can still pre-order via Apple, but I’ll be on the road 7/14 so I’ll wait until late July to get my iPhone 4.

I took advantage of my AT&T visit to ask some staff questions. One of the odder things about AT&T is that, despite being evil even by publicly traded company standards, their staff are remarkably personable and fairly knowledgeable.

I had 4 questions. The last two are interesting.

  1. Why did my bill jump $30?
    Answer: I added unlimited family texting at the start of a billing cycle, so “pay ahead” meant I paid for most of 2 months. Most mobile phone services are added with a 1 month pay ahead.
  2. If I buy an iPhone 4 for my son, can I give my wife the iPhone 4 and give him her 3GS?
    Answer: They’re fine with that switch. He’ll get a new contract of course.
  3. Can you validate that as of Nov 2009 a contract-free non-iPhone “smartphone” connected to AT&T network will trigger data plan enrollment?
    Answer: No – they disagreed. A non-contract smartphone added to the network will not trigger an automatic data plan enrollment [1]. The Nov 2009 contract change only brought non-iPhone smartphones in line with iPhone policy. If you buy one under contract your “service agreement” will mandate one of the new data plans ($15, $25, etc). This directly contradicts what I was told over the phone, but see the next question.
  4. I’d like to see my current contract, terms of service etc and the new one I’ll get with my new phone.
    Answer: Duck, dodge, weave, cough, deer in the headlights, “it’s on the web site” ….

Asking to see a contract brought the manager over in a hurry. He acted like I’d asked to see his porn collection.

After a bit of work I ended up with an outdated (7/31/2009) Terms of Service document and a generic “Service Agreement” that seems to be a current “Terms of Service” document. He couldn’t come up with anything reflecting the 11/09 policy changes.

Here’s what I ended up thinking:

  1. For AT&T a “contract” is an agreement to pay them money for services for a fixed duration. A multi-phone family plan has a single contract.
  2. Customer obligations and fees are some kind of sum of 2-3 different agreements. Some are tied to a phone number, some to a “class” of subsidized phone, and some to the iPhone alone.
    • Terms of Service: Lays out the basic terms on how you can use the service. I think it’s determined by “class of phone” such as “dumb phone” and “smartphone”.
    • Service Agreement: Seems identical to the “Terms of Service” booklet – same headings and language. Google found the current copy of this Service Agreement.
    • Plan terms: At one time the iPhone had different Plan terms from other smartphones, but now I think they may be aligned. I think Plan terms are more or less under user control; that’s what you get when you add or remove things from the web site.
    • iPhone other: “If buying an iPhone, you agree that use of the iPhone acts as an acceptance of the Apple and third party terms and conditions included with the iPhone.”
  3. The AT&T staff really do have trouble verbalizing how this all works. I used to think AT&T was treating their service agreements as corporate secrets, but they really are public. I now think it’s more a complexity problem -- especially due to the now passing iPhone exemptions (Note you still can’t unlock an iPhone when a contract ends [2] – it is the only AT&T phone that cannot ever be unlocked.) There are a lot of moving and changing parts that sum to the net user and phone specific agreement.
  4. The confusion about what happens when you put “Standard” phone GSM in a “smartphone” is understandable. I don’t think either of the AT&T reps I spoke with really know what will happen. I tend to think this crew is more correct, but I wouldn’t bet on it.

There are a few noteworthy clauses in AT&T’s current generic service agreement:

Your Service Commitment begins on the day we activate your service. You have received certain benefits from us in exchange for any Service Commitment greater than one month. … If your Service Commitment includes the purchase of certain specified Equipment on or after June 1, 2010, the Early Termination Fee will be $325 minus $10 for each full month of your Service Commitment that you complete. (For a complete list of the specified Equipment, check www.att.com/equipmentETF). Otherwise, your Early Termination Fee will be $150 minus $4 for each full month of your Service Commitment that you complete...

The enhanced ETF is not iPhone specific, it also applies to the iPAQ Glisten (lord, that would burn!) and the Samsung “Jack”. Imagine the horror of paying that fee on an iPAQ Glisten.

I didn’t realize my non-AT&T roaming was potentially limited ….

… If your minutes of use (including unlimited services) on other carrier networks ("off-net usage") during any two consecutive months exceed your off-net usage allowance, AT&T may, at its option, terminate your service, deny your continued use of other carriers' coverage or change your plan to one imposing usage charges for off-net usage. Your off-net usage allowance is equal to the lesser of 750 minutes or 40% of the Anytime Minutes included with your plan. AT&T will provide notice that it intends to take any of the above actions, and you may terminate the agreement…

and I bet this clause means AT&T can cut off my Google Voice calls to Canada at any time [3] …

… Unlimited voice services are provided solely for live dialog between two individuals. Unlimited voice services may not be used for conference calling, call forwarding, monitoring services, data transmissions, transmission of broadcasts, transmission of recorded material, or other connections which do not consist of uninterrupted live dialog between two individuals. If AT&T finds that you are using an unlimited voice service offering for other than live dialog between two individuals, AT&T may, at its option terminate your service or change your plan to one with no unlimited usage components. AT&T will provide notice that it intends to take any of the above actions, and you may terminate the agreement.

Of course several phones do support conference calling, so they can’t enforce this one too often. They also have to give notice.

The bottom line is that mobile phone contracting is hideously complex. Apple tried to change that with iPhone 1.0, but they failed (I give them full credit for trying). I’d love to see an ambitious Attorney General take this topic on.

See also:

[1] Of course if data services are used it will incur massive charges, but that’s another matter. My son’s number is enrolled in a $5/month AT&T service that allows me to disable his AT&T network data access. There are also relatively painless hacks that do the same thing.

[2] I’d like to see the contract/agreement where this is documented. I wonder if that’s agreed to as part of the iPhone agreement: “If buying an iPhone, you agree that use of the iPhone acts as an acceptance of the Apple and third party terms and conditions included with the iPhone.”

[3] Actually, they can’t. With the original Google Voice service I called a number, which then rang my mother’s number in Montreal. Now I use their (crummy) iPhone web app, and they call me first. So I think the current arrangements skirts the current contract. Also, does this mean a Robocall to my mobile phone is a violation of my contract?

Update 7/25/10: Astoundingly, when I picked up my new iPhone I asked the question again -- and was told my son would definitely be enrolled in a data plan even though his phone is not under contract and has no subsidy and he'd be using a contract-free iPhone. In other words, exactly the opposite of what I was told a few weeks ago. I have a post pending with contract excerpts. I'll be filing a complaint with the MN state attorney general and with the offices of our federal Senators.

Barack Obama – better appreciate him while you can

The inestimable Gail Collins says it best (emphases mine):

…. We are frustrated, too, and it’s possible that Obama may never be able to give the speech that will make us feel better. He may never really lace into the oil companies or issue the kind of call to arms on energy that the environmentalists are yearning for.

That’s because it won’t get him anywhere. Unlike Bush, he has no national consensus to build upon. He’d barely finished his muted remarks on Tuesday before the House minority leader, John Boehner, accused him of exploiting the crisis “to impose a job-killing national energy tax** on struggling families and small business.” Michael Steele, the Republican Party chairman, claimed that the president was “manipulating this tragic national crisis for selfish political gain.” And the ever-popular Representative Michele Bachmann denounced the BP restitution fund as “redistribution of wealth” and “one more gateway for government control.”

As a political leader, Barack Obama seems to know what he’s doing. His unsatisfying call for a new energy policy sounded very much like the rhetoric on health care reform that used to drive Democrats nuts: open to all ideas, can’t afford inaction, if we can put a man on the moon. ... But at the end of that health care slog, he wound up with the groundbreaking law that had eluded his predecessors for decades. The process of wringing it out of Congress was so slow and oblique that even when it was over it was hard to appreciate what he’d won. But win he did.

Ironic. The man we elected because we hoped his feel-good campaign speeches might translate into achievement is actually a guy who is going to achieve, even if his presidential speeches leave us feeling blah.

We live in whitewater times (see Stross - 2008). There’s going to be crisis after crisis for years and decades to come. We can’t freak out every time we have a historic ecological, economic, social, climatic or geological catastrophe*. We need to deal with them, learn from them, try to prevent each class of catastrophe from recurring too soon.

America is entering the rapids in a GOP-vandalized kayak, and much of the nation has tuned out. There’s too much bad news, too much uncertainty. Some are so far gone they’re signing on to whacko political movements. As Collins writes, Obama “has no national consensus to build upon”. He has to find what’s possible.

Today Obama has extracted $20 billion of possible, a Ninja move that has left the GOP stunned and gasping. That counts for a lot more than a speech. Meanwhile the prospect of BP’s annihilation has concentrated minds in in the oil industry more than any amount of words and easily manipulated laws (not that we don’t need the rules and regs, but financial collapse impresses capitalists more).

We’ll never get another President this good. Better appreciate him while you can.

Oh, and the guy needs a vacation. We need to tell him to take a good one.

* Incidentally, I despised Bush and wanted him fired – but not for Katrina. There he showed only average incompetence.

** This is “cap and trade” aka “carbon tax in drag”. The GOP does well in southern states, maybe they figure it’s the temperature that helps.

Sunday, June 13, 2010

Email domains in the non-geek world

There are 14 non-employer email addresses in my son's baseball team roster:
  • AOL: 2
  • Yahoo: 4
  • Comcast: 4
  • Hotmail/MSN: 3
  • Gmail: 1 (me)
Not the domains geeks tend to think about!

Strongest sign of economic recovery

The mass flow "investor" is buying gold ... Worried About Their Dollars, More Are Turning to Gold - NYTimes.com.

Forget every other indicator. This one rules. The recovery is on.

Why dog haters should love prosecution of animal cruelty

Unsurprisingly, people who abuse animals are also dangerous to humans ...
The Animal-Cruelty Syndrome - NYTimes.com:
... significant reason for the increased attention to animal cruelty is a mounting body of evidence about the link between such acts and serious crimes of more narrowly human concern, including illegal firearms possession, drug trafficking, gambling, spousal and child abuse, rape and homicide...
... In his famous series of 1751 engravings, “The Four Stages of Cruelty,” William Hogarth traced the life path of the fictional Tom Nero: Stage 1 depicts Tom as a boy, torturing a dog; Stage 4 shows Tom’s body, fresh from the gallows where he was hanged for murder, being dissected in an anatomical theater. And animal cruelty has long been recognized as a signature pathology of the most serious violent offenders. As a boy, Jeffrey Dahmer impaled the heads of cats and dogs on sticks; Theodore Bundy, implicated in the murders of some three dozen people, told of watching his grandfather torture animals; David Berkowitz, the “Son of Sam,” poisoned his mother’s parakeet....
I am surprised this hasn't gotten more formal research attention attention in the past. Perhaps scholars assumed it was self-evident? Formal investigations are now confirming long held beliefs. That's good research -- not all long held beliefs are empirically supported.

Not everyone loves dogs and cats. Maybe they have something against brood parasites. Even so, these dog-dislikers have good reason to favor aggressive investigation and prosecution of animal cruelty. My dog is their canary.

Low vision iPad: Make the iPhone UI an option

I've been configuring an iPad for my low vision 80yo mother. It's not all it could be, but it's conceivable that it might work. One significant annoyance is that not all web UIs can be pinch-zoomed.

Ironically, unoptimized iPhone apps are an improvement over native iPad apps. Their UI is simple, and with a tap of a button they double size to fill the larger screen. Low vision users may wish to install an iPhone app version rather than the richer iPad app version.

Some vendors may bundle both iPhone and iPad UIs into a single package. If they do, it would be rather nice if they provided a settings option to use the iPhone version on the iPad...

Saturday, June 12, 2010

What would make Krugman wrong about spending?

A few weeks ago I submitted a comment on Krugman's blog. I'm a fan, so it was intended to be a gracious question. I don't believe it ever appeared, but I suspect a technical problem more than rejection (lots of seriously obnoxious comments get routinely posted).

I asked Professor Krugman to invent a rational reason for reducing government spending and/or increasing interest rates.

Ok, so that is a bit of weird request. Krugman, after all, has been shredding the feeble arguments of economists (Sachs, etc) calling for deficit management in the teeth of the Great Recession and the zero-bound. He makes a persuasive case, based on the best of modern economics, that this is a time to spend for future growth.

And yet there is an emergent global consensus to reduce spending. How could that make sense?

That's the challenge. How could it make sense? Under what extraordinary conditions would it be right to be wrong?

Maybe there is no plausible rationale. Maybe it's all human nuttiness. Certainly we're prone to it. Maybe, but I've seen this sort of thing before. Sometimes mass movements are batty, but sometimes there is an emergent understanding -- even if it's only dimly sensed and not articulated. Sometimes all the raging arguments skirt that rationale -- because it's one that nobody dares express.

I wanted Paul Krugman to try to imagine what that rationale might be. Reading him today, I wonder if he's beginning to try... (Perhaps due to the influence of Brad DeLong, who I think is also trying this exercise. Emphasis mine.)
Strange Arguments For Higher Rates - Paul Krugman Blog - NYTimes.com

... My take on the current economic situation is quite simple, and I would have thought corresponds to standard economics. Right now, we clearly don’t have enough demand to make full use of the economy’s productive capacity. This means that the real interest rate is too high. And so the “natural” thing is for the real rate to fall. Yes, that would mean a negative real rate. So?

The trouble is that getting that negative real rate isn’t easy, because the nominal rate can’t go below zero [jg: zero bound], and there’s no easy way to create expected inflation. If you ask what would happen if prices were completely flexible, the answer, as I figured out long ago, is that prices would fall so far now that people would expect them to rise in the future, creating expected inflation. But prices aren’t that flexible, which is why we turn to quantitative easing, fiscal policy, and more.

Surely, though, we want to get rates as close to their appropriate level as possible — which means a zero nominal rate. There’s nothing “unnatural” about it. On the contrary, the “natural rate of interest”, as Wicksell defined it, is clearly negative right now.

So why does Rajan feel that there must be something wrong with low rates (and he’s not alone)? I think his language, with its odd moral tone, is the giveaway: it’s the sense that economic policy is supposed to involve being tough on people, not giving money away cheap.

I actually understand the seductiveness of that posture; I can sort of understand how economists succumb to it. But right now, with the world desperately in need of clear thinking, is no time to give in to the subtle allure of inflicting economic pain.
Well, I didn't say he was trying hard. Maybe he's just warming up.

So I'll give it a go. Maybe Brad can refine my speculations (I think they are his as well) and then ease Paul into thinking about this differently.

If classical economics works at all, then there may not be a rational reason to worry about deficits or raise interest rates. What if, however, we're in a world where classical economics doesn't work any more? Maybe in a normal laminar flow world we can use models and make predictions that don't work in a whitewater world where crazy things are everyday events that go almost unnoticed.

Maybe we've truly moved outside the bounds where the models work -- and we're going to stay there for a while.

Just consider the short list of possible disaster we need to dodge over the next decade. Iran could nuke Israel, and the Middle East would go down forever - along with the world's oil supplies. North Korea could go bonkers tomorrow. Pakistan is always on a precipice. China's bubble is going to blow -- maybe this month, maybe this year. Maybe we've run the American economic engine too hard, too fast, too long -- and the economy is really going to melt down. Maybe 'Peak Oil' really is five years away. Maybe the Atlantic warm currents really are unstable, or that Kurzweil was right and Aaronson and I are wrong.

It's quite a list really. I don't think we'll dodge them all, not to mention those I haven't listed (terrorist bioweapons etc). I'd bet money on China's bubble blowing for example, and, despite the current price and the impact of a crashing world economy, I'm still a Peak Oiler. (Though if China really fell hard Peak Oil would move out at least 5 years.)

These aren't the sorts of things scholars and leaders can come out and talk about. Obama can't go on Fox News and say -- "We need to keep our powder dry because we expect unemployment and US based terrorism to get worse, then China's economy will crater and we're going to have fight a really big war in Pakistan and we need to get ready for $8/gallon gasoline and ..."

Yeah, you see what I mean. That would not fly.

Let's assume that there's a lot of bad news ahead. News every bit as bad as the collapse of the US real estate market. If we assume that kind of trouble lies ahead, does it make sense to prepare for the worst now? Is that what people are unconsciously reacting to?

Update 6/14/2010: Here's a better example of why Krugman might be wrong. It's not a matter of economics, it's a matter of craziness. The US has lots of money, and lots of powerful whackos. (I do love the word "whacko" by the way -- it doesn't have the association with either mental illness or cognitive disability. Whackos are perfectly smart people with extraordinarily poor judgment.)

Update 6/15/2010: Another example. There are a lot of poorly understood constraint and linkages in our new financial world. It's somewhat remote from the world of actual work, and it demonstrates hysteresis -- it doesn't adjust quickly. What works in the world of logical economics may not work in this world. Also, my comment on Krugmans June 14 post has still not been published - there are only 19 comments posted. I don' think I've been blacklisted, but I do think it's pointless to comment on his blog.

The Afghan war - year 10

Kudos to Bob Herbert for actually paying attention to our soldiers in Afghanistan.
Bob Herbert - The Courage to Leave Afghanistan - NYTimes.com

.... What’s happening in Afghanistan is not only tragic, it’s embarrassing. The American troops will fight, but the Afghan troops who are supposed to be their allies are a lost cause. The government of President Hamid Karzai is breathtakingly corrupt and incompetent — and widely unpopular to boot. And now, as The Times’s Dexter Filkins is reporting, the erratic Mr. Karzai seems to be giving up hope that the U.S. can prevail in the war and is making nice with the Taliban.

There is no overall game plan, no real strategy or coherent goals, to guide the fighting of U.S. forces. It’s just a mind-numbing, soul-chilling, body-destroying slog, month after month, year after pointless year. The 18-year-olds fighting (and, increasingly, dying) in Afghanistan now were just 9 or 10 when the World Trade Center and Pentagon were attacked in 2001...
We may be in the all too common situation where, if there is any game plan, it's not one that can be spoken. For example, our game plan might be to divide Afghanistan into feudal baronies, and make each Baron responsible for their domain. Keep things quiet, or get a missile through the castle window. Not necessarily a bad idea, but not one that Obama can verbalize.

Thursday, June 10, 2010

AT&T’s secret Nov 2009 mobile contract change – Elegant Evil

[Note - see the updates on this one. AT&T is falling victim to its own complexity.]

The Devil is usually an elegant gentleman. Makes sense, doesn’t it? There’s a certain elegance to the best devilishness. Tobacco industries once had that knack, but today AT&T excels.

I just learned of a small contract change AT&T made in November 2009 – eight months ago. It doesn’t impact us yet, but it will when we get our new phones and new contracts. It’s a beauty.

Before I explain what changed, let me describe what was once possible. I’ll use my son as an example – call him “John”.

John is on our family plan. We pay $10 a month for that. He had my old Nokia (out of contract), so he’s not on a subsidized phone contract. A neighbor gave him an old Samsung Blackjack (Windows Mobile); he likes the keypad so we switched SIM cards. No contract, no data plan.

Of course if he fired up a browser, on the old Nokia or the old WinMobile Blackjack the data would flow. Sprint allows customers to disable data flow on a browser-equipped phone, but AT&T does not. In this case John is enrolled in a “smart wireless” plan where I’ve set his data flow to zero (costs $5/month).

What we’d like, of course, is for him to have a phone with WiFi services – like my old iPhone. Similar to the the Blackjack, but data when WiFi is available. That’s what we were planning on.

Ok, now here’s where things get really evil.

If you have a post 11/09 contract, there’s fine print that says that if AT&T considers your phone a “smart phone”, it must have a data plan even if the phone is fully paid for and has no ongoing subsidy. If you put your SIM card in one of those phones, AT&T will detect it and automatically enroll the subscriber in a data plan. (Supposedly the least costly plan.)

A data plan, by the way, that’s pure profit for AT&T. The money is not being used to pay off a subsidized phone, and it’s not going to, say, Apple. It’s pure AT&T profit.

Old WiFi equipped smart phones (RIM, iPhone, some Samsung) etc just got a lot less valuable. If a customer is going to get dinged for data services anyway, why not get a new phone and a contract?

Wow. Philip Morris would be proud of AT&T. This is high grade evil. AT&T is still a master of the complexity attack.

See also:

Update: As noted in comments AT&T is catching up with Verizon, just as when they recently doubled or tripled the penalty for early contract termination. Those two are Scylla and Charybdis.

Update 6/11/10: It occurs to me that one of my state Senators is Al Franken, and that in Obama administration consumer protection isn’t a joke. I’ll write his office. Who knows, maybe he’s ready to take on the mobile phone companies (though he does have his hands full these days)…

Update 6/17/10: I ask the same question at an AT&T retail store and get a quite different answer (new contracts only).

Wednesday, June 09, 2010

Deepwater Horizon - what Obama should understand

I didn't think I had much to say about the Deepwater Horizon oil spill. My one insight was that Google could, as a public service, assemble a team to deploy disaster-specific search engines. Google librarians and researchers are well suited to continuously enhance a custom search engine that will facilitate research and discovery at the time of catastrophe. These future disaster search tools would be paired with custom Google Maps services.

I'm surprised Google hasn't done this yet. I hope they'll do it for all our many disasters to come.

That was my one insight -- until tonight. Now I have something to say to my (much appreciated) President.

I got the idea when Emily compared my personal stories of corporate euphemisms to BP's spin. In a forehead smacking moment I realized BP is probably no more or less clever than the vast publicly traded company I work for. That means that Obama's team is dealing with EVPs -- people whose great skill is the ability to thrive in the bowels of a typically dysfunctional publicly traded company. They can tell a good story, but they really don't know what's going on and they don't know they don't know.

There are likely engineers in BP who do know what's going on, but they've been locked away in dark rooms and surrounded by corporate security. They'll never be allowed contact with the outside world. Most of them aren't comfortable in that role anyway.

Too bad. Team Obama has to track these people down. They won't be VPs or EVPs. They're probably not even managers. They're individual contributors who've been at BP for ten years or more. They know what's going on. It might take the NSA and the CIA to track these people down, but it has to be done. They have to be dragged kicking and screaming from the bowels of BP. In softly lit rooms they can be slipped a few million dollars -- since once they talk they'll never work in the industry again. Then ply them with beer until they open up.

Take notes.