Sunday, December 7, 2008

Payrolls and Grids

The number of non-farm jobs in the US declined by 533,000 in November, the largest drop since 1974. But because absolute numbers almost absolutely lie, here is a chart of the same number as a percentage of the civilian labor force. At 0.34% the reading is still pretty bad, I'm afraid.

And if this recession is the worst since the Great Depression, as most analysts are now constantly reminding us, this number is going to get much worse in the very near future.

This explains Mr. Obama's haste to announce a vast new program of infrastructure spending, from roads and bridges to schools and "green" projects. No question, this president-elect wants to hit the ground running come January.

The most intriguing, and in my opinion most worthwhile, project in his agenda is the so-called smart electric grid. It would allow power generators to communicate directly with their customers over the same wire that provides electricity, down to each individual appliance. This has the potential to radically transform the entire industry, finally taking it from the 19th century into the 21st. This is also where America excels: the application of modern technology (in this case information and communications) to the creation of an entirely new paradigm.

Mark my words: if the new president is successful in this, the entire world is going to be transformed. And knowing how things work in America it will happen fast. The profit motive will see to it.


35 comments:

Anonymous said...

Usually when governments push tech projects they're the wrong ones, political (corrupt), inefficient and expensive. The profit motive will see too it that the cheapest forms of energy will be used. And the cheapest atm is the kind of which the costs can be offloaded to others and/or the future most easily (fossil/nuclear). Please don't look to governments to change the world an save us, they'll enslave us instead. The best thing they can do is to make sure business is honest. In the case of energy, make the price show the true cost. THEN the profit motive will work.

Jon said...

Do I sense a sliver of hope in all the gloom that is Hell? : )

Greenie said...

Here is my forecast - after this administration finishes its time, people will name their dogs 'Obama' for many years.

Regarding Tom Friedman, Hell can you explain why this gentleman, who talks to many important people, could not warn us about this once in half a century crisis? I do not want to listen to solutions from any jackass, who has no idea what the problems are.

Thai said...

I really think all of this is going to have tremendous unintended consequences.

If what I keep hearing on The Diana Rhem Show is any indication of how this will all play out, it seems their proposals have become hijacked towards the 'ready to go' project over the "what do we want to do in the long term' and 'how do we get it done right' or 'efficiently'.

Everything I hear in town suggest the mind set has moved to 'rush'.

When will people understand that it is conservation that will save us from this mess (conservation in all its forms, even the ones some of your other reads don't like admitting have very real secondary spending consequences such as 'lifestyle' decisions). What we don't do in life is just as important as what we do.

As just one example, even if we repair bridges that are not 'nowhere', still they might be located in a way out Suburbia that is still energy inefficient, etc... and if we are to become more efficient, the truth is that many of these homes and roads may need to move.

I hope this all goes well, I truly do, and I certainly see the benefit of your smart electric grid, but I might ask you to consider the following...

How is doing this any different from a big brother government tracking everything we do and say? If we do it for appliances, why not do it for speech? Personal liberties? Personal behavior? As all these things still represent consumption in very real ways (even very real energy consuming ways... Hate speech can cause the burning of a lot of fossil fuels in 'secondary consumption').

For while your smart grid is only be a baby step in that direction, make no mistake, it is a further step in that direction.

Back to the basic ugly rationing decisions we all need to make in life. Which is a higher priority to you?

Anonymous said...

I don't want my individual appliances to communicate.
This gets worse than the DDR.

Betty

Keenan said...

Thai & Betty - The "smart grid" does seem to be yet another step toward Poindexter's "Total Information Awareness", Ray Kurzweil's "Singularity", Star Trek's "Borg" collective.

Are the concepts of independence and individuality compatible with a networking world ?

Thai said...

And Hell,

Since you didn't answer my question: "why you think America is NOT Argentina"?

This link from Mish suggests the UK is considering just such "plastic surgery".

Is the US like the UK? I don't know about your neighborhood but there are an awful lot of plastic surgeons in mine.

... Which reminds me, I remember reading a while ago that Argentineans spend a larger % of their income on women's lingerie and cosmetic surgery than any other country in the world, and a waitress who served me at a local restaurant the other day was all excited when she learned I was a physician to tell me her story- recently immigrated from Morocco, attends a local university and dreams of becoming a dermatologist one day.

... I wonder why?


Keenan, from my perspective, you are making one of the more intelligent comments I have read from anyone on this blog. Most of the 'conspiracy-class warfare whining' we get on this blog never seems to recognize its own cognitive dissonance around this issue (which the evolutionary biologists/evolutionary psychologists have been saying for years).

What are we- individuals or member of a collective? Which values have higher priority? When? And are these values at some level fundamentally incompatible?

Marcus said...

Anon: "Usually when governments push tech projects they're the wrong ones, political (corrupt), inefficient and expensive."

You mean like SS,The Manhattan Project, and the US highway system?

I'll take those corrupt projects over the great Reagan/Bush free market project.

Concerning the smart electric grid: Could'nt be much worse than corrupt bastards such as Comcast and Verizon screwing customers and collaborating with the NSA to spy on Americans.

Keenan said...

Thai:

Thanks for your comments.
Society, or at least the western version, appears to be fraught with contradictions that elicit the questions you pose. Primary school students are instructed "do your own work", "copying is cheating", and later on, submitting purchased term papers under ones' own name is plagarism. Yet in the "grown up" world of economic man ghost written books, "cloned" designs, the sale or licensing of brand names to be placed on outsourced products, etc. are commonly accepted practice. ( The name Polaroid lives on long after Edwin Land's company has beed dissolved.)

As governments assume increasing influence in daily life, corporations dominate economic activity - as team sports do athletics - suggests to me that the individual will be further subservient to the collective.

Some time ago I suggested on Hell's fine forum that perma growth was only possible with more available resources from a continuously expansive frontier - beyond our terrestrial home. I suggest that a frontier is needed to preserve the individual as well.

Thai said...

Keenan, very well said.

Your story reminds me of a similar personal story from several years ago- one of my boys, then in 2nd grade, had to miss recess as punishment because he wouldn't stop reading a novel he had snuck into class which the teacher had apparently asked him to stop reading on several occasions that day (though in truth it was a recurrent issue- I think that time it was a one of the Harry Potter novels).

Anyway the irony of the story was that posted throughout several walls around school were posters which said "Get Caught Reading!".

When he had the good presence to ask his teacher about the apparent contradiction (really not bad for a second grader if I do brag about Luke for a moment), he was apparently told by his teacher that the posters were really intended for "other kids".

And by the way, if you think about it, aren't fractals really all about boundaries? i.e. what are the boundaries of the system you are trying to define?

So if you similarly reread some of my comments in the past, you will see I too ask the question over and over and over again: "What are the boundaries of the system you are tying to define"?

Ron said...

Thai, I am with you. The current credit crisis, while no doubt very substantial, involves mostly paper deleveraging.

The frightening thing is the financial crisis is blurring the largest crises facing humanity in centuries: energy and the environment. Over the past 5 years, oil companies have spent hundreds of billions, yet global oil production is flat (and now declining!).

How can we be so clever, yet so stupid? We need massive conservation and investment in energy efficiency and clean energy production.

Anonymous said...

I agree with Betty. Why does the system have to change, when the real problem is with the crooks who are running the companies dishonestly and then taking vacations on the expense of the Upper class, Middle class and the poor. And, define the poor...some are really down and out and then there are others how are just plain freeloader's and have a hand out for anything they can get. Including the greedy ones who had no business buying a home that they could not afford. I don't want to pay for them because they did not get out there and work their hind ends off like most of us.

Mberenis said...

I think this is a great blog, and I would like to Post a Comment

There has been some recent news you might like to hear.Obama is making it better for us already! There has been an increase of money availability to everyone. Due to recession there is increased funding for all types of grants. Even lenders are bending over backwards to bail you out too. Regardless of statistics, there is people getting tons of cheap money for personal use, investments,start businesses, buy homes, pay off debt, and more. Bailout is for YOU

Keenan said...

Thai:

You have evidently taught Luke well, that learning often entails coloring outside the lines.

Fractals certainly define the range of variations of a system which are a type of boundary.
Boundaries, in the sense of applicable range, also go hand-in-hand with scale as Newton gives way to Einstein in dealing with large objects and extreme velocities.

Hellasious said...

Re: Do I sense a sliver of hope in all the gloom that is Hell? : )

Yes.

Because it is now time to move on to SOLUTIONS, since the problem and its effects have become so manifestly evident. I am not a tent revival preacher.

lineup32 said...

Most of these projects are rear mirror in nature and support a economy and lifestyle based on a ever expanding credit/debit economy that looks to be heading into reverse. While I share H's desire that something useful comes from Obama's choice's all I have is a bit of hope.

Brian Woods said...

Ok, so here's the deal. Maybe you guys can answer a few questions for me. The owner of this blog posed a 'nasty' to me some time ago. Thanks Hel - I enjoyed digging out the answer.

1. Can 'our' economies work without debt creation. If not, then what sort is necessary?

2. If we do need debt, then can the economy work without charging interest on that debt?

3. What is wealth? How is wealth created? How is wealth destroyed?

4. What is 'productivity'? Is it essential? What is 'growth'?

Have fun.

Brian P



4.

Avl Guy said...

"Using more debt to solve debt deleveraging is like using water to fix a leaking dam" to paraphrase Mish. Obama's plan still involves ratcheting up ‘our’ debt...so are we so desperate or frightened that we're back to embracing the 'feel good' delusional concept of 'good' debt?
I'm with all who feel that 1. conservation, 2. lifestyle changes, 3. 'ease of living' changes, and 4. re-shaping our mis-built environment are key...and # 4 can’t be done via rushed projects or these alleged, off-the-shelf infrastructure boondoggles that are ready-for-funding.
Gee, this new American 'era' of thoughtful actions seems to have lasted all of 3.5 weeks.

Oh well, the Fed’s newest $8 Trillion in obligations (March-Dec 2008 tally) plus Obama’s additional $ 1 Trillion in debt-funded projects will eventually add to the momentum of today’s debt deleveraging and maybe get us more quickly past Winston Churchill’s famous observation of us:
“You Can Always Count On America To Do The Right Thing...Only After She First Exhausts Every Other Alternative”. tick-tock tick-tock.

Greenie said...

> What is wealth? How is it created/destroyed?


Here is my take. Wealth is converting simple forms of nature into complex forms. For example, if you take raw wood, clean it up, cut it in shape and build a chair out of it, you created wealth. You break the chair and throw it into dumpster --> net wealth of the society is destroyed.


The above is the true definition of wealth. All the monetary explanations are just attempts to put mathematical tags on things, but they are incomplete and that is the problem. For example, when a mother raises his child to be intelligent, productive member of the society, it increases wealth of the society. Why? Because the child can grow up to turn simple forms of nature into complex ones.

However, in GDP calculation, mother's role is seen as negative. So, our western society collectively takes all mothers away from children, and sends them to work and create lesser wealth.

Greenie said...

> What is productivity?

If you spend 4 hours building the chair and another person spends 3, we get improvement in productivity.

However, the productivity measures of US government is fallacious. When a company replaces an US worker (with pay of $73) with a Chinese worker (with pay of $5), it registers productivity gain, because the company is doing more by spending less. Huge productivity gains of last 10-15 years were mostly effects of substitution.

Greenie said...

Now you tell me, what you mean by one needs to worry about 'entropy' regarding alternative energy? By reading Hell's old posts, I never felt like he understood the concept of entropy well. Either that or he was intentionally distorting the facts to make a point.

Please prove me wrong. What about entropy makes 'permagrowth' wrong? What is 'permagrowth' anyway?

Greenie said...

>Can 'our' economies work without debt creation. If not, then what sort is necessary?

When debt increases net wealth of the society, it is good. If you can build a chair out of raw woods, and you see other guys standing and watching you, it does not hurt to put those guys to work with you and building more chairs. Asking those other guys to work with you == debt, because when you borrow money, you are taking idle productive powers of other people.

If those other people were building a complex machine and you take them to help you build chair or worse, play bridge with you, that is bad debt.


>If we do need debt, then can the economy work without charging interest on that
That is equivalent to not paying a person for working. What kind of work do you do? Would you mind not getting paid? Please stop posting stupid questions, unless you do not understand the consequences.

dink said...

@ Greenie

"Here is my take. Wealth is converting simple forms of nature into complex forms."

Yet you're a goldbug investing in a single element.

@Hell

"Please stop posting stupid questions"

Honestly Hell, other blogmasters do not allow this.

Brian Woods said...

Charts are useful, but can be puzzling.

Changes since the 1950s

1. Energy use: exponential
2. Water extraction: exponential
3. Pollutants emitted: exponential
4. Inorg. Fertilizer: exponential

More recent

A. 'Funny' Money: exponential
B. Debt: exponential

Coincidence, happenstance or enemy action?

What is the difference between the first set and the second?

Sorry about the 'silly' questions Anon. But they do actually bother me a lot. This Blog is about Debt; and I have formed the opinion that there is a causal connection between Nos 1-4, and A+B above.

Refutations welcomed.

Brian P

ps: H, Its your Blog. If I am out of order - zap my entry. BPW.

Greenie said...

>Honestly Hell, other blogmasters do not allow this.

In other situations, I could tell you to go to hell, but seems like that is what you did :)

@ Greenie

>Yet you're a goldbug investing in a single element.

Why not? There is a season for everything. Right now, it is time to protect wealth, because nutsies around the world are proposing solutions on what to do. The solutions by those nutjobs essentially boil down to one thing - take wealth from the prudent and distribute to the reckless.

Six month back, nutsies were shouting 'peak oil' at the top of their voices. As I told you and everyone in this blog, that was the best time to short oil.

Anyway, let's get some good sleep tonight. I hear tomorrow we will have a new czar announced - the auto czar. You know what came after czars, don't you? Lenin and Stalin and red/white armies.

Thai said...

Brian, I personally think they are way related. We are witnessing social trust in evolution.

Much as obesity or disease (or "memes") propagate thru crowds, so too does trust propagate thru communities, even communities as large as the whole world.

It is absolutely clear that specialization in an economy can ONLY happen thru cooperation. And of course this can only happen with trust.

Since debt (money) is really just trust- i.e. a promise on future labor- when collective trust increases (as indeed it must in order to allow greater cooperation from greater specialization), so too does the fear of what it means to lose trust subside.

And while this is incredibly powerful economically when it works, it makes the system that much more vulnerable to total crash when someone/something ultimately betrays collective trust and 'defects'.

i.e. it's those two old friends of mine- The Prisoner's Dilemma and her multiplayer fractal cousin- The Tragedy of the commons.

Risk is always conserved in a bounded system. In a system with greater and greater cooperation, there are fewer and fewer (but larger and larger) crashes as a 'naive' society suffers much greater breakdown from defectors than a 'jaded' society does... the biologic analogy would be something like introducing a new species into a 'virgin' environment- like releasing predators on the Galapagos.

No matter how much we try, we can't get away from that old conservation of energy thing (and believe me, it seems liberals are endlessly trying).

This is why we are seeing debt increase. This is why we are seeing less fear of economic consequences of our own making.

At least to me, they are very much related

Anonymous said...

Hell,

Well, I like this blog site. There's facts,creativity,and it makes me think. Thank You, Hellasious for all the time you put into your post.
....a comment to Mberenis..Grape cool aide may be good for me too, but I'm not gonna drink it just 'cause a whole group of other's say it is...I'm just one who is afraid that we are leaning more and more toward a socialistic society...this is the USA.

Thai said...

Anon,

Even in the most 'free market economy' ANY U Chicago-Austrian economist could ever dream up, where there is absolutely NO government and NO taxation, still we would all be living in a socialist society as well. It is simply a matter of your point of view-frame of reference.

It is always both, don't kid yourself.

Anonymous said...

We will go broke first.

Anthony Teamson said...

Excuse me, but how does allowing an electric company to communicate with an oven change the world. Is this another one of those technology for technology's sake. It look's like another excuse to spend a single mom's hard earned tax dollars on a geek's fantasy. Or is it a means to force conservation by shutting down appliances when deemed expedient by an Energy Czar?

Steve said...

That's right Anthony.
The smart grid will allow us to moderate our electricity usage with the undependable and non-dispatchable output of the plethora of future wind turbines that global warming fanatics think are the solution to our energy problems. Ranges, dryers, water heaters, HDTV flat screens, etc. can be turned off by the power company until the wind picks back up. We apologize for the inconvenience.

Eric said...

How about a compromise?

Instead of the power gestapo talking with your fridge and computer, just have a display in every home and business that tells you what the rate is for the next couple hours and you can decide how to deal with it, yourself. Allow the rate to rise as much as needed to keep the grid functioning. Sure beats rolling blackouts. Might even reduce crap like the California 2000 mess. Maybe customers with a poor payment history could get cut-off for a few hours if they don't cut back on their own.

The same idea is the subject of a book whose title I love, The High Cost of Free Parking, by Donald Shoup (I haven't read it yet), who proposes adjusting meter rates to maintain 15% available spaces at all times (or something like that), thereby making it much easier to transact business - they're working on something like this in San Francisco (not sure).

Imagine being able to drive a freeway (oops, it's no longer always free) at reasonable speed instead of wasting vast amounts of time($$$) because 10% too many people want to drive on it, alone. If the system operates for public good instead of profit, the toll would decrease with each additional passenger.

Better living through economics (and geekyness). Opposed by the paranoid right and the whining left.

Eric said...

Just to clarify, my compromise is offered to Betty, Anthony, and Steve. If it were up to me, I would go all-out for the smart grid. As an example, it would really help with water heaters because they use so much power, can store a lot of energy, and are hiding in the background.

Another alternative is to use variable metering, as in the previous post, but offer users their own computer which they control themselves to turn things on and off in response to price signals. Better yet, entrepreneurs can compete to provide the best computers.

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farang said...

Anthony and Steve:

I was wondering the same thing. Hell seems kinda vague on HOW this "smart" technology, of letting my toaster and microwave "talk" to the power company is going to "revolutionize" America and show the world we still "lead the way."

So, I googled a bit, and guess what I found: Google and G.E. are teaming up to push this technology (and guess what? G.E. manufactures it, and Google is financing "alternative energy" start up companies, what a coincidence!!), and even then, I still can't make out HOW it "revolutionizes" anything except having some busybody at the power company take a peek at what my power usage is every 15 minutes.

However, it does WONDERS for the bottom line of G.E. and Google.....

But: HOW DOES THAT DO ANYTHING POSITIVE for the economy, Hell? Prolongs G.E.'s coming collapse?

We already have the capability to install "net meters" for those that want to tie into the grid and sell their excess "alternative energy", like solar or wind, so this is nothing NEW. Been around for years and years.

These "smart" meters just seem like an intrusion of privacy, with the capability of some unknown busybody shutting down your power if they think you are using too much, or at the wrong time of day. One of the "best" comments in one of the articles was: "Power companies charge more for daytime usage, so if we could get everyone to use their dishwasher at 10:00 pm, instead of 10:00 am, then we would save money."

NOT IF "everyone" starts using power at night in won't!

Geez, what passes for "intelligence and innovation" these days.

Yes, it will create temporary jobs running transmission lines from the desert (solar) and mountain/ocean front (wind) areas to the high usage metropolitan areas, but then what?

The power companies will still charge us the same rate as coal/nuclear powered plants, THAT I GUARANTEE.

Oh, and get this: The power company rep in Missouri, where they are going to try a pilot program of electric and water "smart" meters PROMISES meter readers won't lose their jobs, just get "reassigned."

I don't believe that, but if true, then WHERE IS THE SAVINGS???? HOW???

They will have to spend millions for the meters and Windows software to implement the program....and who pays for THAT? US!

How's about the government just gives us ALL a printing press, and gets the F out of the way!! Just as likely to succeed as these idiotic notions.