anil
Saturday, April 30, 2011
Innovation from the bottom up
Thursday, April 28, 2011
What Determines the Price of Gas: A Visual Guide
Let's look at the price at the pump. Every year, the U.S. Energy Information Administration breaks down the price of a gallon of gas into four major components: First, there are state and federal gas taxes, which add between 20 and 50 cents to the final price. Second, you have additional costs like distribution, marketing and refining. To turn crude into gasoline and sell it at the pump, the oil has to be refined, shipped by pipeline, loaded into trucks to drive to individual stations, and purchased for resale to the public. Longer shipping routes, more refined gas, and more convenient service station locations are all culprits in higher gas prices.
Fourth, and most importantly, you have the price of crude oil, which has nearly tripled in the last seven years. In 2004, when the average price for crude oil was $37 per barrel, crude composed only 47 percent of the price of regular gasoline. Today, crude is closer to $111 per barrel, composing two-thirds of the price we pay at the pump.
The price of a barrel has increased from $85 to $110 -- a 30% bump -- in just five months. To find out why, I spoke with several energy experts across Washington to build myself a kind of editorial pie chart. I'm calling it an editorial pie chart because it is based on the experts' opinion rather than a measured impact, but I think it's a useful way to illustrate the relative importance of each factor.
1. The Supply and Demand Factor. Fuel demand from China, India and Brazil -- three countries with a combined population of 2.7 billion -- is the chief factor behind rising prices. China's fuel demand increased 12 percent in 2010. Meanwhile Saudi oil production has fallen, as AEI's Steve Hayward told me. Perhaps the Saudis are pulling back after overstating their reserves, in which case we're in serious trouble. Or perhaps they're accepting higher prices in the short term to spend more money on their people to avoid a Libya-type revolution, in which case the production shortfall should be temporary. Either way, supply matters and there's less of it.
2. The Middle East. Break the past year in gas prices into three phases. First, in the summer and fall of 2010, gas prices were pretty steady around $2.80. Second, beginning in the late fall, they started to climb gradually for six months. Third, since February, they have increased dramatically. What happened in February? Revolutions swept the Middle East, then Libya descended into civil war and its oil production fell by more than 50%. Ongoing uncertainty about the region continues to push up prices.
3. The Weak Dollar. A falling dollar can be good for Americans. It makes our exports more attractive and imports less attractive, which keeps more money in the U.S. economy. Unfortunately, as the dollar loses value, oil becomes more expensive.
4. The Summer. The EIA estimates that good weather and vacations cause U.S. summer gasoline demand to be 5 percent higher than during the rest of the year. Better weather means more vacations, which means more gasoline use. Think of it as a naturally occurring demand enhancer.
5. The Speculation Factor. Oil speculation -- investors betting up the price of oil in the futures market -- is a controversial factor in rising gas prices, and Hayward doesn't believe it's a deciding factor. Burned by the bust of oil prices in the 2009, it's unlikely that oil speculators are back in the market bidding up the price of crude. But it's a possible, if marginal, factor.
6. The Drill, Drill, Drill Argument. The U.S. can drill all it wants but it's hard to find anybody who expects greater domestic production to move gas prices by more than, say, two percentage points in the next six months. The problem is that the market for oil is global and U.S. supply is too small to make an impact.
My father, the hero
10 EMERGING TECHNOLOGIES 2011
Every year my favourite magazine, Technology Review, which is also the magazine for the alums of MIT, looks at the advances that have happened over the previous year and chooses 10 emerging technologies that the editors think will have the greatest impact. The ultimate criterion is straightforward: is the technology likely to change the world?
This year’s group includes high-energy batteries that could make cheaper hybrid and electric vehicles possible and a new class of electrical transformers that could stabilize power grids. Some of these choices will alter how we use technology: tapping into computationally intensive applications on mobile devices, or using gestures to command computers that are embedded in televisions and cars. Other choices could improve our health; for instance, doctors will craft more effective cancer treatments by understanding the genetics of individual tumors. But no matter the category, all 10 promise to make our lives better
Synthetic Cells
Designing new genomes could speed the creation of vaccines and biofuel-producing bacteria
Monday, April 18, 2011
The power of unreason
It was George Bernard Shaw who famously said” The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.”
Recent events seem to prove him right. In India, Anna Hazare, a Gandhian activist, decided that the government was not doing enough to curb corruption in public life and that he would force a decision by embarking on a fast unto death till they did. It was not by any measure a reasonable approach. Except it did arouse a citizenry from its torpor and the media soon turned it into a major satyagraha movement with large number of public spirited citizens lining up to support and continue his fast. And this unreasonable act did lead to the prime minister Manmohan Singh to accept setting up a parliamentary committee to introduce a bill for an ombudsman for public servants. But this same approach can also lead to completely opposite results. Consider the U.S.
In the U.S, the last ten months have seen an outpouring of anger at the rising deficits and the tea partiers have managed to route this outrage into the election of at least 80-90 republican members of the house. These members in the last few days managed, by their unbridled intransigence, to force a reduction in spending of $ 39 billion for this year. Emboldened by this success, they now intend to hold the country to ransom on the critical issue of raising the debt ceiling.
In both these cases, it really were the unreasonable men who managed to prod forward action where previous efforts to persuade and cajole had failed. The question is can this be repeated for all critical issues or is it simply a firework that can only be fired once? Is there a moral framework which says that this radical approach to negotiation of critical issues is permissible in one area and not another? Satygraha for clean public life is admirable but shutting down the government because the ruling party will not follow your philosophical ideas is not?
In the U.S the conservatives have learned how to use the intransgience of a small group of their members in an effective ploy to essentially get their way even though the majority does not support them. The liberals on the other hand tend to feel that they have been rolled over and are still at their wits end to decipher and develop a strategy to counter the ransom - my way or highway- approach of the conservatives.
"Perhaps the real problem isn’t a liberal weakness", argues columnist and social activist Sally Kohn, “It’s something liberals have proudly always seen as a strength — their deep-seated dedication to tolerance. In any given fight, tolerance is benevolent, while intolerance gets in the good punches. Tolerance plays by the rules, while intolerance fights dirty. The result is round after round of knockouts against liberals who think they’re high and mighty for being open-minded but who, politically and ideologically, are simply suckers.”
Social science research has long dissected the differences between liberals and conservatives. Liberals supposedly have better sex, but conservatives are happier. Liberals are more creative; conservatives more trustworthy. And, since the 1930s, political psychologists have argued that liberals are more tolerant. Specifically, those who hold liberal political views are more likely to be open-minded, flexible and interested in new ideas and experiences, while those who hold conservative political views are more likely to be closed-minded, conformist and resistant to change. As recently as 2008, New York University political psychologist John Jost and his colleagues confirmed statistically significant personality differences connected to political leanings. Brain-imaging studies have even suggested that conservative brains are hard-wired for fear, while the part of the brain that tolerates uncertainty is bigger in liberal heads. These studies found consistent and converging evidence that personality differences between liberals and conservatives are robust, replicable, and behaviorally significant, especially with respect to social (vs. economic) dimensions of ideology. "In general, liberals are more open-minded, creative, curious, and novelty seeking, whereas conservatives are more orderly, conventional, and better organized."
Political tolerance is supposed to be essential to the great democratic experiment both in India and the United States. As Thomas Jefferson put it in his first inaugural address, those who might wish to dissolve the newly established union should be left “undisturbed as monuments of the safety with which error of opinion may be tolerated where reason is left free to combat it.”
But some errors, by their nature, undermine reason.
Writing in 1945, philosopher Karl Popper called this the “paradox of tolerance” — that unlimited tolerance leads to the disappearance of tolerance altogether. “Unlimited tolerance” he said, “ must lead to the disappearance of tolerance. If we extend unlimited tolerance even to those who are intolerant, if we are not prepared to defend a tolerant society against the onslaught of the intolerant, then the tolerant will be destroyed, and tolerance with them.”
Of course Popper is not arguing that we should suppress the utterance of all intolerant philosophies. But we should be able to counter them by argument and keep them in check by public opinion. We should, however, in the final analysis claim the right to suppress intolerant philosophies, if necessary even by force, for it may easily turn out that they are not prepared to ever meet us on the level of rational argument. Instead they may direct their followers to not listen to rational argument, and teach them instead to answer arguments by the use of their fists or pistols.
“We should therefore claim,” he continues, “ in the name of tolerance, the right not to tolerate the intolerant. We should claim that any movement preaching intolerance places itself outside the law, and we should consider incitement to intolerance and persecution as criminal, in the same way as we should consider incitement to murder, or to kidnapping, or to the revival of the slave trade, as criminal."
To put the current political climate in Popper’s terms, if liberals are not willing to defend against the rigid demands of their political opponents, who are emboldened by their own unwavering opinions, their full range of open-minded positions will be destroyed. Liberals will be ultimately neutered by their own tolerance.
Thomas R. West notes that tolerance is often used in a pejorative way to make excuses for inequalities in power. West makes the same critique of negotiation: When fundamental rights and core values are on the table, just talking about negotiating means you’ve already lost. Conservative television evangelist Pat Robertson once said, “I have a zero tolerance for sanctimonious morons who try to scare people.”
Liberals can keep patting ourselves on the back for standing tall and tolerant while conservatives land blow after blow, but taking the high road of civil compromise will feel less and less noble as decades of vital government programs pile up in bloodied heaps on the ground. In this context, liberals will look increasingly less like open-minded statesmen and more like sanctimonious morons.
There is a time for tolerance and compromise, and a time to fight.Thursday, April 14, 2011
Learning from the past
In the past few years, India has seen an extraordinary economic boom but it has simulataneously developed a split personality. Driven by energy, skill and ambition, India’s entrepreneurs are scaling new heights, but this growth has come with an overwhelming in corrution in our public and private lives. In earlier blog, I outline the scams that seem to characterize modern day life in India. There is confusion among the elite about what if anything can be done to restrain the growth of unrestrained capitalism and its attendant ill of rampant corruption. Perhaps we need to look around to see how other countries have handled this dilemna..
Both in its rot and heady dynamism, India is beginning to resemble America’s Gilded Age (1865-1900) as noted by Jayant Sinha and Ashutosh Varshney in a recent article. Ending with Theodore Roosevelt’s rise to the presidency in 1901, the Gilded Age transformed an agrarian US into an economic and industrial giant. Yet Roosevelt’s assessment was gloomy: “The dull, purblind folly of the very rich men; their greed and ignorance, and the way in which they have unduly prospered ... these facts, and the corruption in business and politics, have tended to produce a very unhealthy condition.”
Four similarities between America’s Gilded Age and present-day India are worthy of note as pointed out by the authors. And also worth noting is the response of the progressives of the day to the mess that they saw around them.
First, By the mid-1890s, the US nation was more than 50 per cent urban. Mirroring roughly the same trends, India’s population today is 70 per cent rural, but by 2030, half of India will be urban.
Second, America’s industrial capitalism in the 1870s and 1880s emerged in a noisy and participatory democracy with election turnouts often touching 80 per cent. In India, too, turnouts are high. The political ascent of the “lower castes” is India’s equivalent of the rise of the Irish in the American Gilded Age.
Third, India’s recent growth has created billionaires to equal the Vanderbilts, Carnegies, Rockefellers and Morgans of America. India has 6.9 per cent of the world’s 1,000 or so billionaires, while its gross domestic product is only 2.1 per cent of world GDP. The total wealth of Indian billionaires is more than a fifth of the nation’s GDP, equaled only by Russia. And its billionaires are no longer afraid of flaunting their wealth- witness the huge, ugly tower with 400 carparks built by Ambani in Mumbai.
Fourth, like the barons of America’s Gilded Age, most of India’s billionaires have used three methods to tilt the playing field to their advantage: securing rich natural resources such as mines and land; ensuring favorable regulations in various industries; and restraining the entry of foreign competition wherever possible. This has required collaboration, often collusion, with governments at all levels. During the administration of President Ulysses Grant (1869-76), several cabinet members were indicted for financial wrongdoing. At the state level, the story was no different. And cities witnessed the emergence of “bosses” and political machines. India has identified but not indicted a large number of politicians for financial wrongdoing both at the federal and the state levels.
In modern India the scams over the past decade unlerline the rot in the body politic. Licences for the use of spectrum for mobile telephony were apparently sold at rock-bottom prices by the government to telecoms companies at a time of enormous demand, depriving the Treasury of revenue. Using access to power, families of ministers and heads of state governments, belonging to various political parties, have illegitimately bought land and houses at below-market prices. Unfortunately this mania for land has also enveloped the armed forces where three ex chiefs of army staff are under investigation. Powerful business families have procured mining rights in a corrupt manner. Read my blog above on In the land of scams to get a true idea of the depth of infamy.
But it is well to also remember that America’s Gilded Age was followed at the dawn of the 20th century by the Progressive Era, marked by cleaner politics, a bipartisan fight against corruption, more honest business practices and a channeling of private wealth into philanthropy.
The rapid shift from an agrarian to an urban society in the U.S, like in modern day India, caused major anxieties among the rich and powerful. Large corporations and "trusts," representing materialism and greed, were then controlling more and more of the country's finances. Immigrants from southeastern Europe -- "dark-skinned" Italians and peasant Jews from Russia -- were flocking to major industrial centers, competing for low wages and settling in the ethnic enclaves of tenement slums. Party bosses manipulated the political ignorance and desperation of the newcomers to advance their own party machines. To the native middle-class, these ills of society seemed to be escalating out of control and by 1900 America was a tinderbox. Cities were crowded with millions of poor laborers, working conditions were appalling. From the local level to the highest institutions in the land, corruption darkened politics. The situation was summarized dramatically in the Populist Party platform, issued at its convention in Omaha in 1892, which read in part:
“.. we meet in the midst of a nation brought to the verge of moral, political, and material ruin. Corruption dominates the ballot-box, the legislatures, the Congress, and touches even the ermine of the bench. The people are demoralized; most of the States have been compelled to isolate the voters at the polling-places to prevent universal intimidation or bribery. The newspapers are largely subsidized or muzzled; public opinion silenced; business prostrated; our homes covered with mortgages; labor impoverished; and the land concentrating in the hands of the capitalists. The urban workmen are denied the right of organization for self-protection; imported pauperized labor beats down their wages; a hireling standing army, unrecognized by our laws, is established to shoot them down, and they are rapidly degenerating into European conditions. The fruits of the toil of millions are boldly stolen to build up colossal fortunes for a few, unprecedented in the history of mankind; and the possessors of these, in turn, despise the republic and endanger liberty. From the same prolific womb of governmental injustice we breed the two great classes—tramps and millionaires.” This could well be written of modern day India as well.
Something had to be done, and the progressive movement was the nation’s response. The Progressive Movement was an effort to cure many of the ills of American society that had developed during the great spurt of industrial growth in the last quarter of the 19th century. The frontier had been tamed, great cities and businesses developed, and an overseas empire established, but not all citizens shared in the new wealth, prestige, and optimism. Since the political powers were unwilling or unable to address the rapid economic and social changes brought about by the industrial revolution in America, the progressive movement grew outside government and eventually forced government to take stands and deal with the growing problems.
Progressivism was rooted in the belief, certainly not shared by all, that man was capable of improving the lot of all within society. As such, it was a rejection of Social Darwinism, the position taken by many rich and powerful figures of the day. Progressivism also was imbued with strong political overtones, and its some of its specific goals included:
· The desire to remove corruption and undue influence from government through the taming of bosses and political machines
· the effort to include more people more directly in the political process
· the conviction that government must play a role to solve social problems and establish fairness in economic matters.
The progressives came from a long tradition of middle-class elites possessing a strong sense of social duty to the poor. Inherent in their role as privileged members of society was a certain degree of responsibility for the less fortunate.
Applying this sense of duty to all ills of society, middle-class reformers attempted to restore democracy by limiting big business, "Americanizing" the immigrants, and curbing the political machines. Theodore Roosevelt, wanting to ensure free competition, was particularly instrumental in curtailing monopolistic business practices during his time in the White House.
The success of progressivism also owed much to publicity generated by the muckrakers, writers who detailed the horrors of poverty, urban slums, dangerous factory conditions, and chil labor, among a host of other ills. Jacob Riis exposed the poor living conditions of the tenement slums in How the Other Half Lives (1890) and inspired significant tenement reforms. In The Shame of the Cities (1904), Lincoln Steffens revealed the political corruption in the party machines of Chicago and New York. Most shocking to contemporary readers was Upton Sinclair's The Jungle (1906) in which he traced an immigrant family's exploitation and downward spiral in Chicago's meat packing industry. The novel resulted in the Pure Food and Drug and the Meat Inspection Acts in 1906, the first legislation of its kind.
The window of time that the Progressive Era in the U.S inhabits was a brief one, but not at all insignificant. Its reforms introduced a new role for government. In dealing with the problems of urbanization and industrialization, the country's democratic institutions had to address problems on a very local level. It made possible the major changes in political life that followed with programs like the New Deal, and TVA. It ushered in the era of reform in the U.S which did get rid of much of the more blatant corruption in public life and it restrained the robber barons from continuing to loot the common man.
Can India follow a similar path by creating its own Progressive Era? Can India’s political parties fight corruption as a non-partisan matter? Can the rising middle class throw out the corrupt? Can the wealthy systematically embrace philanthropy? Can thelatent movements sparked by Anna Hazare and Tehelka grow over time? Indeed the question is what can we do to fan these small efforts into a massive blaze that compels the political elite to change its ways?