Wednesday, March 28

The People's Republic of Illinois?

House Speaker Michael Madigan, responding to public outrage over unexpectedly high electricity bills, introduced legislation Tuesday that would put Illinois in the business of building power plants.
Check out the comments, too.

Tuesday, March 27

An Australian view of 19th century opium

From David Bonavia's introduction to George Ernest Morrison's An Australian in China (from the superb site Tales of Old China):
The horror felt by the high-minded in Britain for the consumption of Indian-grown opium by benighted 'Chinamen' was rooted partly in the evangelistic hatred of strong drink, the curse of the Industrial Revolution. Depressants of the central nervous system, such as opium and alcohol, make people apathetic about improving their spiritual and material condition, and therefore less liable to religious fervour.

Opium had long been smoked in China, but it was the preserve of the rich. The relative cheapness of Indian and Middle Eastern opium shipped to China by the British, Americans, and Portuguese encouraged the growth of the habit among poorer people. For the average coolie, overburdened and underpaid, the opium pipe at the end of the day was all that made life tolerable. Perhaps the habit shortened his life, but his life was barely worth living anyway. Certainly opium was a less deleterious habit than the drinking of gin, and the missionaries could have done more good work in the pubs of London than they could accomplish in the opium dens of China....

Morrison noted that there were no signs of the drug's debilitating effect, probably because the coolie could not afford to smoke to excess, and the rich man had other creature comforts to beguile him. He commented on the fine physique of his opium-smoking coolies, who could travel all day with loads on their backs which the average Englishman would have had difficulty in even picking up. (Nonetheless, an opium addict will eventually show signs of physical decline as will an alcoholic - especially through failing to eat.)

The traveller observed the ubiquitous opium poppy growing freely all over south-west China, fields and fields of it stretching to the horizon. It constituted the main source of revenue for the provincial governments, and was exported on a huge scale to other parts of China.
From Morrison's text:
The wards of [the hospital of the Methodist Episcopalian Mission of the United States in Chungking] are comfortable and well lit; the floors are varnished; the beds are provided with spring mattresses; indeed, in the comfort of the hospital the Chinese find its chief discomfort. A separate compartment has been walled off for the treatment of opium-smokers who desire by forced restraint to break off the habit. Three opium-smokers were in durance at the time of my visit; they were happy and contented and well nourished, and none but the trained eye of an expert, who saw what he wished to see, could have guessed that they were addicted to the use of a drug which has been described in exaggerated terms as "more deadly to the Chinese than war, famine, and pestilence combined." (Rev. A. H. Smith, "Chinese Characteristics," p. 187.)
Actually Smith said,
If a people with such physical endowments as the Chinese were to be preserved from the effects of war, famines, pestilence, and opium, and if they were to pay some attention to the laws of physiology and of hygiene, and to be uniformly nourished with suitable food, there is reason to think that they alone would be adequate to occupy the principal part of the planet and more.
Back to Morrison:
Our Consul in Chungking is Mr. E. H. Fraser, an accomplished Chinese scholar, who fills a difficult post with rare tact and complete success. Consul Fraser estimates the population of Chungking at 200,000; the Chinese, he says, have a record of 35,000 families within the walls. Of this number from forty to fifty per cent of all men, and from four to five per cent. of all women, indulge in the opium pipe. The city abounds in opium-shops-shops, that is, where the little opium-lamps and the opium-pipes are stacked in hundreds upon hundreds. Opium is one of the staple products of this rich province, and one of the chief sources of wealth of this flourishing city.

During the nine months that I was in China I saw thousands of opium-smokers, but I never saw one to whom could he applied that description by Lay (of the British and Foreign Bible Society), so often quoted, of the typical opium-smoker in China "with his lank and shrivelled limbs, tottering gait, sallow visage, feeble voice, and death-boding glance of eye, proclaiming him the most forlorn creature that treads upon the ground."

This fantastic description, paraded for years past for our sympathy can be only applied to an infinitesimal number of the millions in China who smoke opium. It is a well-known fact that should a Chinese suffering from the extreme emaciation of disease be also in the habit of using the opium-pipe, it is the pipe and not the disease that in ninety-nine cases out of a hundred will be wrongly blamed as the cause of the emaciation.

During the year 1893 4275 tons of Indian opium were imported into China. The Chinese, we are told, plead to us with "outstretched necks" to cease the great wrong we are doing in forcing them to buy our opium. "Many a time," says the Rev. Dr. Hudson Taylor, "have I seen the Chinaman point with his thumb to Heaven, and say, 'There is Heaven up there! There is Heaven up there!' What did he mean by that? You may bring this opium to us; you may force it upon us; we cannot resist you, but there is a Power up there that will inflict vengeance." (National Righteousness, Dec. 1892, p. 13.)

But, with all respect to Dr. Hudson Taylor and his ingenious interpretation of the Chinaman's gesture, it is extremely difficult for the traveller in China to believe that the Chinese are sincere in their condemnation of opium and the opium traffic. "In some countries," says Wingrove Cooke, "words represent facts, but this is never the case in China." Li Hongzhang 李鸿章, the Viceroy of Chihli 直隶, in the well-known letter that he addressed to the Rev. F. Storrs Turner, the Secretary of the Society for the Suppression of the Opium Trade, on May 24th, 1881, a letter still widely circulated and perennially cited, says," the poppy is certainly surreptitiously grown in some parts of China, notwithstanding the laws and frequent Imperial edicts prohibiting its cultivation."

Surreptitiously grown in some parts of China! Why, from the time I left Hubei till I reached the boundary of Burma, a distance of 1700 miles, I never remember to have been out of sight of the poppy. Li Hongzhang continues, "I earnestly hope that your Society, and all right-minded men of your country, will support the efforts China is now making to escape from the thralldom of opium." And yet you are told in China that the largest growers of the poppy in China are the family of Li Hongzhang.

The Society for the Suppression of Opium has circulated by tens of thousands a petition which was forwarded to them from the Chinese-spontaneously, per favour of the missionaries.

Some tens of millions," this petition says, "some tens of millions of human beings in distress are looking on tiptoe with outstretched necks for salvation to come from you, 0 just and benevolent men of England! If not for the good or honour of your country, then for mercy's sake do this good deed now to save a people, and the rescued millions shall themselves be your great reward." (China's Middle, iv., 156.)...

They do not want our opium, but they purchase from us 4275 tons per annum.

Of the eighteen provinces of China four only, Jiangsu, Zhejiang, Fujian, and Guangdong use Indian opium, the remaining fourteen provinces use exclusively home-grown opium. Native-grown opium has entirely driven the imported opium from the markets of the Yangze Valley; no Indian -opium, except an insignificant quantity, comes up the river even as far as Hankou. The Chinese do not want our opium it competes with their own. In the three adjoining provinces of Sichuan, Yunnan, and Guizhou they grow their own opium but they grow more than they need, and have a large surplus to export to other parts of the Empire. The amount of this surplus can be estimated, because all exported opium has to pay customs and likin dues to the value of two shillings a pound, and the amount thus collected is known. Allowing no margin for opium that has evaded customs dues, and there are no more scientific smugglers than the Chinese, we still find that during the year 1893 2250 tons of opium were exported from the province of Sichuan, 1350 tons from Yunnan, and 450 tons from Guizhou, a total of 4050 tons exported by the rescued millions of three provinces only for the benefit of their fellow-countrymen, who, with outstretched necks, plead to England to leave them alone in their monopoly.

Edicts are still issued against the use of opium. They are drawn up by Chinese philanthropists over a quiet pipe of opium, signed by opium-smoking officials, whose revenues are derived from the poppy, and posted near fields of poppy by the opium-smoking magistrates who own them.

In the City Temple of Chongqing there is a warning to opium-eaters. One of the fiercest devils in hell is there represented gloating over the crushed body of an opium-smoker; his protruding tongue is smeared with opium put there by the victim of "yin" (the opium craving), who wishes to renounce the habit. The opium thus collected is the perquisite of the Temple priests, and at the gate of the Temple there is a stall for the sale of opium fittings.

Morphia pills are sold in Chongqing by the Chinese chemists to cure the opium habit. This profitable remedy was introduced by the foreign chemists of the coast ports and adopted by the Chinese. Its advantage is that it converts a desire or opium into a taste for morphia, a mode of treatment analogous to changing one's stimulant from colonial beer to methylated spirit. In 1893, 15,000 ounces of hydrochiorate of morphia were admitted into Shanghai alone....

On March 30th I reached Tak-wan-hsien (大湾县?), the day's stage having been seventy li (twenty-three and one-third miles). I was carried all the way by three chair-coolies in a heavy chair in steady rain that made the unpaved track as slippery as ice-and this over the dizzy heights of a mountain pathway of extraordinary irregularity. Never slipping, never making a mistake, the three coolies bore the chair with my thirteen stone, easily and without straining. From time to time they rested a minute or two to take a whiff of tobacco; they were always in good humour, and finished the day as strong and fresh as when they began it. Within an hour of their arrival all these three men were lying on their sides in the room opposite to mine, with their opium-pipes and little wooden vials of opium before them, all three engaged in rolling and heating in their opium-lamps treacly pellets of opium. Then they had their daily smoke of opium. "They were ruining themselves body and soul." Two of the men were past middle age; the third was a strapping young fellow of twenty-five. They may have only recently acquired the habit, I had no means of asking them; but those who know Western China will tell you that it is almost certain that the two elder men had used the opium-pipe as a stimulant since they were as young as their companion. All three men were physically well-developed, with large frames, showing unusual muscular strength and endurance, and differed, indeed, from those resurrected corpses whose fleshless figures, drawn by imaginative Chinese artists, we have known for years to be typical of our poor lost brothers-the opium-smoking millions of China. For their work to-day, work that few men out of China would be capable of attempting, the three coolies were paid sevenpence each, out of which they found themselves, and had to pay as well one penny each for the hire of the chair.

...[On the plain of Zhaotong, 昭通 on his way to Dongchuan 东川], Poppy was now in full flower, and everywhere in the fields women were collecting opium. They were scoring the poppy capsules with vertical scratches and scraping off the exuded juice which had bled from the incisions they made yesterday.

...The chairen 差人 is the policeman of China, the lictor of the magistrate, the satellite of the official; the soldier is the representative of military authority. Now, China, in the person of her greatest statesman, Li Hung Chang, has, through the secretary of the Anti-Opium Society, called upon England "to aid her in the efforts she is now making to suppress opium.'1 If, then, China is sincere in her alleged efforts to abolish opium, it is the chairen and the soldier who must be employed by the authorities to suppress the evil; yet I have never been accompanied by either a chairen or a soldier who did not smoke opium, nor have I to my knowledge ever met a chairen or a soldier who was not an opium-smoker. Through all districts of Yunnan, wherever the soil permits it, the poppy is grown for miles, as far as the sight can reach, on every available acre, on both sides of the road.

But why does China grow this poppy? Have not the literati and elders of Canton written to support the schemes of the Anti-Opium Society in these thrilling words "If Englishmen wish to know the sentiments of China, here they are -If we are told to let things go on as they are going, then there is no remedy and no salvation for China. Oh! it makes the blood run cold, and we want in this our extremity to ask the question of High Heaven, what unknown crimes or atrocity have the Chinese people committed beyond all others that they are doomed to suffer thus?" (Cited by Mr. S. S. Mander, China's Millions, iv., 156.)

And the women or Canton, have they not written to the missionaries "that there is no tear that they shed that is not red with blood because of this opium?" ("China," by M. Reed, p 63). Why, then, does China, while she protests against the importation of a drug which a Governor of Canton, himself an opium-smoker, described as a "vile excrementitious substance" ("Barrow's ~ravels," p. 153), sanction, if not foster, with all the weight of the authorities in the ever-extending opium-districts the growth of the poppy? To the Rev. G. Piercy (formerly of the W.M.S., Canton), we are indebted for the following explanation of this anomaly: China, it appears, is growing opium in order to put a stop to opium-smoking.

"Moreover, China has not done with the evils of opium, even if our hands were washed of this traffic to-day. China in her desperation has invoked Satan to cast out Satan. She now grows her own opium, vainly dreaming that, if the Indian supply lapse, she can then deal with this rapidly growing evil. But Satan is not divided against himself; he means his kingdom to stand. Opium-growing will not destroy opium-smoking." (Missionary Conference of 1888, Records, ii., 546.)
Like Westerners, the Chinese continue to insist that opium destroys those who use it, and that it was all the fault of foreigners.


The current problem began in 1997 when the Legislature froze electric rates as part of a deregulation plan. Officials hoped more power companies would enter the market and drive down prices. That didn’t happen and St. Louis-based Ameren took control over several Illinois electricity providers. When the freeze ended, rates soared -- especially for Ameren’s customers in central and southern Illinois.

Our position has been that extending the freeze was not in anyone’s best interest. We felt the increase should be phased in over three years. Much blame should go to the Illinois General Assembly, which failed to do anything in the weeks and months leading up to the end of the freeze.

Ameren officials, however, have completely botched the transition to the higher rates. Failing to inform customers that Ameren was eliminating the price break for all-electric users and dropping the phased-in rate increase are inexcusable.
Agreed so far. But is this the best solution?
Despite Emil Jones’ one-man stand, Illinois legislators, Gov. Rod Blagojevich and the Illinois Commerce Commission need to step in and help Ameren officials clean up this mess.

More concessions to customers mean further downgrading

Even though the new rates have been put in place and even though it's possible that legislation designed to roll back the hikes maybe avoided, Moody's said, last week's committee vote "is a further sign of continued political intervention in the utility regulatory process, and the regulatory environment is no longer supportive of an investment grade senior unsecured rating for ComEd,'' Moody's said.

... Moody's...didn't change its Baa2 rating on Com Ed's "secured" debt -- debt, that is, which is backed by assets just as a home mortgage or a car loan is.

But for unsecured debt, the rating agency did cut. It noted a vote last week in the Illinois Senate's Environmental and Energy Committee. The committee members voted to include ComEd in a proposed rate freeze.

"It is not certain that this bill will be enacted into law as a negotated outcome remains possible," said Moody's, noting that a negotiated compromise "could involve concessions by the company." It appears, Moody's said, that "any resolution (of the tussle with lawmakers) would likely produce financial ratios for ComEd that are weaker than previously expected.

The political pressure reflects major rate hikes that both ComEd and Downstate electricity provider Ameren put in place January 1, under terms of an earlier agreement in which both companies held rates flat for a decade.

The big hikes have generated consumer anger, and state politicians have been moving to address the issue.

Even though the new rates have been put in place and even though it's possible that legislation designed to roll back the hikes maybe avoided, Moody's said, last week's committee vote "is a further sign of continued political intervention in the utility regulatory process, and the regulatory environment is no longer supportive of an investment grade senior unsecured rating for ComEd,'' Moody's said.

ComEd, Moody's elaborated, "will likely need to offer additional concessions to certain customer classes in order to head off passage of rate freeze legislation."

Moody's said it is continuing to review for possible downgrade ComEd.

Things are getting better

Indur M. Goklany channels Pinker
...the 20th century saw the United States’ population multiply by four, income by seven, carbon dioxide emissions by nine, use of materials by 27, and use of chemicals by more than 100.

Yet life expectancy increased from 47 years to 77 years. Onset of major disease such as cancer, heart, and respiratory disease has been postponed between eight and eleven years in the past century. Heart disease and cancer rates have been in rapid decline over the last two decades, and total cancer deaths have actually declined the last two years, despite increases in population. Among the very young, infant mortality has declined from 100 deaths per 1,000 births in 1913 to just seven per 1,000 today.

These improvements haven’t been restricted to the United States. find that the richest countries are also the cleanest. And while many developing countries have yet to get past the “green ceiling,” they are nevertheless ahead of where today’s developed countries used to be when they were equally wealthy. The point of transition from "industrial period" to "environmental conscious" continues to fall. For example, the US introduced unleaded gasoline only after its GDP per capita exceeded $16,000. India and China did the same before they reached $3,000 per capita.

This progress is a testament to the power of globalization and the transfer of ideas and knowledge (that lead is harmful, for example). It's also testament to the importance of trade in transferring technology from developed to developing countries—in this case, the technology needed to remove lead from gasoline.

...Why have improvements in well-being stalled in areas such as Sub-Saharan Africa and the Arab world?

The proximate cause of improvements in well-being is a “cycle of progress” composed of the mutually reinforcing forces of economic development and technological progress. But that cycle itself is propelled by a web of essential institutions, particularly property rights, free markets, and rule of law. Other important institutions would include science- and technology-based problem-solving founded on skepticism and experimentation; receptiveness to new technologies and ideas; and freer trade in goods, services—most importantly in knowledge and ideas.

Warriors defending their interests

It's not much of an oversimplification to say that the blue-collar Democrats tend to see elections as an arena for defending their interests, and the upscale voters see them as an opportunity to affirm their values. Each group finds candidates who reflect those priorities.

Democratic professionals often describe this sorting as a competition between upscale "wine track" candidates and blue-collar "beer track" contenders. Another way to express the difference is to borrow from historian John Milton Cooper Jr.'s telling comparison of the pugnacious Theodore Roosevelt and the idealistic Woodrow Wilson. Cooper described the long rivalry between Republican Roosevelt and Democrat Wilson as a contest between a warrior and a priest. In modern times, the Democratic presidential race has usually pitted a warrior against a priest.

Warrior candidates stress their ability to deliver on kitchen table concerns and revel in political combat. They tout their experience and flout their scars. Their greatest strength is usually persistence, not eloquence; they don't so much inspire as reassure.
What about blue-collar Republicans? Don't they tend to see elections as an opportunity to affirm their values? Does that mean the upscale Republican voters see elections as an arena for defending their interests?

Friday, March 23

Gore isn't the only hypocrite

Although a couple of sites (Fox News' Garrett and others mischaracterized or omitted Gore's response to Inhofe on his energy use and Inhofe's Gotcha Moment -- Absurdity of the Pledge, and the person calling for it ... defend Gore, it's interesting that I couldn't find this story cited by the major media. So the media want to protect him.
Former Vice President Al Gore refused to take a “Personal Energy Ethics Pledge” today to consume no more energy than the average American household....

Senator Inhofe showed Gore a film frame from “An Inconvenient Truth” where it asks viewers: “Are you ready to change the way you live?”

“There are hundreds of thousands of people who adore you and would follow your example by reducing their energy usage if you did. Don’t give us the run-around on carbon offsets or the gimmicks the wealthy do,” Senator Inhofe told Gore...

“Are you willing to make a commitment here today by taking this pledge to consume no more energy for use in your residence than the average American household by one year from today?” Senator Inhofe asked.

Senator Inhofe then presented Vice President Gore with the following "Personal Energy Ethics Pledge:
As a believer:
  • that human-caused global warming is a moral, ethical, and spiritual issue affecting our survival;
  • that home energy use is a key component of overall energy use;
  • that reducing my fossil fuel-based home energy usage will lead to lower greenhouse gas emissions; and
  • that leaders on moral issues should lead by example;
I pledge to consume no more energy for use in my residence than the average American household by March 21, 2008.”
And Gore refused. Offsets notwithstanding, he's calling for changes that will force us to reduce fossil fuel-based energy usage, but he's not reducing his use of fossil fuels. While I haven't conducted a survey of the habits of average Americans, insofar as I know, a majority of them claim to believe in anthropogenic global warming caused by fossil fuels, yet not many of them are changing their lifestyles, either.

Monday, March 19


The cartogram re-sizes each territory according to the variable being mapped.
I don't like the way they color all East Asian countries the same, and apparently conflate Taiwan stats with China's, although when I emailed them about this, they responded that "separate data is often provided" for China and Taiwan. Yet their sources seem to be mostly the UN.

Calling Noam Chomsky

Alexa Olesen writes,
Only authorized dramas are allowed on Chinese prime-time television, customs inspectors are seizing books on Mao Zedong at China's borders and newspapers are prohibited from running stories on the Communist Party's misdeeds.

In the midst of a sensitive political season, China's machinery of state control is gearing up to make sure that nothing goes astray, including people's thinking.

To that end, internal security agents and media censors are clamping down on political dissidents - who are warned to keep a low profile and in some cases kept under house arrest - and making sure that books that cross the party line do not reach the public.

"The party doesn't believe public opinion is organic or spontaneous. They believe it's created," said Zheng Yongnian, an expert on Chinese politics at Britain's University of Nottingham....
"The party doesn't believe public opinion is organic or spontaneous. They believe it's created."That's what one could call "Manufacturing Dissent", eh?

Friday, March 16

I defended Ameren, but

Gary Rainwater, the CEO of Ameren, recently wrote two letters. One was to the workers and the other was to management.

Both letters started the same. "Without question, 2006 was an exceptionally difficult year for Ameren. From operational and weather-related challenges to public relations and political issues, Ameren's employees were truly tested this year."

Then he announced some bad news. Earnings per share for the year were $2.66. That was below the target level that would mean bonuses. For the worker bees, the magic number was $3.15. For management, the magic number was $2.95.

That seems odd, doesn't it? A lower standard for management? Still, it wouldn't seem to matter. Neither number was met.

Let's read more of Rainwater's letters. In his letter to the workers, he continued with bad news. Because the target EPS was not met, there would be no bonuses. But the letter to management employees contained a paragraph that was not included in the letter to the workers.

"At its February meeting, Ameren's Board of Directors recognized the exceptional efforts of management employees in dealing with the events of 2006, as well as several events outside management's control. As such the board, in accordance with Ameren's incentive plans, adjusted the 2006 incentive to an equivalent EPS of $2.99."

Thursday, March 15

Blagojevich thinks he can run a utility

State questions utility cutbacks
State regulators are demanding answers from utility Ameren Corp. about its threats to lay off workers, reduce maintenance and halt an effort to help customers hit by huge rate increases.

The Illinois Commerce Commission sent a letter Wednesday questioning why the power company would have to take those steps just because its credit rating has been downgraded to "junk" status by an investor service.

Illinois' electricity business is in turmoil because of the expiration in January of a 10-year freeze on prices.

The freeze was part of a deregulation plan. Officials hoped more power companies would enter the market and drive down prices. That didn't happen and when the freeze ended, rates soared -- especially for Ameren's customers in central and southern Illinois, some of whom saw their bills double or triple.


Ameren spokesman Leigh Morris said the company was reviewing the ICC letter.

But he said the lower credit rating has an immediate impact on the company because it raises the cost of borrowing money and making purchases.

"If you're spending more money on debt service, you have less left to spend on your core business," Morris said.


In response to howls of protest over rate increases, lawmakers are considering various plans to roll back rates, including one measure that would apply only to Ameren.

Ameren says that would mean financial devastation, and Moody's Investors Service agrees. It lowered Ameren's credit rating because of the possibility of legislative action.

Before Moody's action, Ameren had warned that a downgrade would mean:

-- layoffs

-- postponing tree-trimming and other "reliability" projects

-- delaying electricity connections for new homes and businesses

-- responding more slowly to customer calls

-- dropping rebates and other proposals to ease the pain of rate increases.

The Commerce Commission said Wednesday that it's "very concerned" those steps would interfere with the safe, reliable service Ameren is required by law to provide.

The commission also noted that Ameren's subsidiaries could cut investor dividends, executive salaries and advertising expenses before cutting service.


Both Gov. Rod Blagojevich and Attorney General Lisa Madigan have questioned the legitimacy of Moody's decision to lower Ameren's credit rating. They have hinted that Moody's might be trying to scare lawmakers into dropping the rollback idea.

Morris scoffed at that suggestion.

"I think anybody who has doubts about it is doing the equivalent of sticking their head in the sand," he said. "The integrity of the rating agencies is beyond reproach."

Paul Justice, an analyst who follows the electric industry for Morningstar Inc., said both Ameren and regulators appear to be posturing to an extent. But he added that the rating downgrade would put financial pressure on Ameren.

"Will this force them into insolvency? No. Will it in the longer run? It has that possibility," he said.
Ameren scraps plan for customer rebate
Ameren Corp. will scrap a planned $20 million electric-bill credit, may lay off employees and eliminate portions of its energy assistance programs, company officials said Tuesday.

The moves come after Moody's Investor Services downgraded credit ratings for Ameren's Illinois utilities to junk status, just hours after the company received Illinois Commerce Commission approval to give residential customers an automatic one-time credit on their electric bills.

The proposal also would have eliminated interest charged to customers who phase in higher electric rates over the coming years.

Ameren President Scott Cisel first announced the relief plan last month while customers lambasted the company for higher electric bills. The company had been under intense pressure from state lawmakers as it attempted to increase rates.

Ameren's rates were expected to rise an average of 55 percent for customers when a 10-year rate freeze ended in January. But some residents and businesses have complained that bills doubled or tripled under the new rates.

Company officials said they would inform the state's utility regulators of the decision to eliminate the credit, but no notice had been given as of Tuesday morning.

"There is a provision in those programs to withdraw them in the event that our credit ratings are downgraded," spokesman Leigh Morris said.

Morris said other cuts, which would include laying off employees and nearly all of Ameren's contractors, are "under study right now."

Utilities in Illinois, including Ameren, have claimed they could face bankruptcy if forced to provide electricity at a higher cost than they could recoup from customers.

Paul Justice, an analyst who follows the electric industry for Morningstar Inc., said the downgrade shows there's some truth behind the utilities' bankruptcy warnings.

"Once you start getting into the business of selling goods for less than you originally paid, it's the start of an unsuccessful business plan in any industry," he said.

Illinois Gov. Rod Blagojevich, in an interview with The Associated Press, questioned whether Ameren's bond-rating was lowered for a legitimate reason.

"It seems like an interesting time for that to happen, after they just raised rates," Blagojevich said. "I'm very skeptical."

He insisted Ameren and ComEd can absorb a rate rollback without suffering a financial meltdown, and said he is working behind the scenes to roll back rates and freeze them at their old levels.

Moody's Vice President Michael Haggarty said the downgrade was prompted by fears that the state would do just that, making the utilities a credit risk for investors.

The utilities' debt would become more expensive with the downgrade, make it more costly to acquire new debt, and likely cause institutional investors to shy away.
So after a ten year rate freeze, prices are about to rise. The customers howl at the sudden price rise, and the politicians respond by mooting a further price freeze, so the electric company panders to them, offering residential customers an automatic one-time credit on their electric bills. But it anticipates trouble. As a result, Moody's Investor Services downgrades their credit ratings, and so the electric company not only proposes rescinding the credit, but even laying off employees and contractors. There are controversies regarding Moody's and other credit raters, but without evidence to the contrary, isn't it more likely that the electric companies are hurting after being unable to pass their costs on to their customers, as the Morningstar analyst says? How does Blagojevich know that Ameren and ComEd can continue to function? Isn't it likely that Moody's is right, and lower rates are going to hurt them? And now the politicians suggest that Ameren's subsidiaries could cut investor dividends, executive salaries and advertising expenses. So they're experts in running a utility now. Why are they so worried?
Phil Adams, senior investment grade analyst with Gimme Credit, which researches corporate debt, said Illinois does not want to be in a position where its utilities are financially weakened. Generating companies will demand more for electricity purchased in the spot market, he said.

"It provides an advantage to the power supplier and that power could be very expensive," Adams said.
Of course, down in Carbondale, Brad Cole wants to take over the business of supplying electricity.

Wednesday, March 14

The pleasure of the prospect of a reward

A 2002 nationwide survey found that lotteries are by far the most popular form of gambling, with some 66 percent of United States adults having played in the previous year, and 13 percent on a weekly basis.

The question is why. Mega officials put the odds of winning the next big score, $12 million, at 1 in 175,711,536, and anyone with a semester of high school math can see what a fool’s bet that is. Generally, experts say, state lotteries return players about 50 cents on the dollar. And there are many people who seem to compound their folly by buying hundreds of tickets at a time.

Addiction researchers and some economists struggle to explain this behavior, describing it at best as an irrational fever, and at worst a pathological addiction to a regressive, government-run numbers game.

But researchers spend little time in corner-store lines.

“The people who denigrate lottery players are like 10-year-olds who are disgusted by the idea of sex: they are numb to its pleasures, so they say it’s not rational,” said Lloyd Cohen, a professor of law at George Mason University and author of an economic analysis, “Lotteries, Liberty and Legislatures,” who is himself a gambler and a card counter.

Dr. Cohen argues that lottery tickets are not an investment but a disposable consumer purchase, which changes the equation radically. Like a throwaway lifestyle magazine, lottery tickets engage transforming fantasies: a wine cellar, a pool, a vision of tropical blues and white sand. The difference is that the ticket can deliver.

And as long as the fantasy is possible, even a negligible probability of winning becomes paradoxically reinforcing, Dr. Cohen said. “One is willing to pay hard cash that it be so real, so objective, that it is actually calculable — by someone, even if not oneself,” he said.

Because it is pure luck, the lottery is easy to grasp and allows for plenty of perfectly loopy — and very enjoyable — number superstitions. Your birthday digits never won you a dime? Try your marriage date; your favorite psalm verse; the day your bullying father-in-law died. Or, perhaps, reverse the order. In studies, psychologists have found that ticket holders are very reluctant to trade their tickets for others, precisely because they have an illusion of control from having picked magical numbers.

This sense of power infuses the waiting period with purpose. And the hope of a huge payoff, however remote, is itself a source of pleasure. In brain-imaging studies of drug users, as well as healthy adults placing bets, neuroscientists have found that the prospect of a reward activates the same circuits in the brain that the payoffs themselves do.

“It’s not just winning the money but anticipating winning the money that is exciting, and the two experiences are similar neurobiologically,” said Christine Reilly, executive director of the Institute for Research on Pathological Gambling and Related Disorders, in Medford, Mass.

People who gorge on lotto tickets, buying 100 at a time even after years of luckless playing, are no less rational than anyone else making big bets. And lottery odds are neutral and fair, after all, not biased toward any social elite. Seeing a Georgia truck driver win proves that in players’ minds.

Large rewards make most people reckless, whether they’re on the winning or losing end. A 2003 University of Vermont study found that lottery players who said they preferred to receive potential winnings in annuity payments — generally thought to be safer than receiving the money all at once, in a lump sum — often changed their minds when they actually won. And the higher the jackpot, the more likely people were to prefer a lump-sum payout, the researchers found. (Mr. Nabors chose a lump sum.)

Likewise, studies of stock traders have found that, when behind late in the day, they are more likely than usual to make risky bets, and take heavier losses, in an attempt to get out of the red.

“The point is that, psychologically, we think of a loss as a loss, big or small,” said Dr. Dan Ariely, a behavioral economist at the Massachusetts Institute of Technology. “And once you’re into it, you think: Well, why not take a bigger loss, if there’s some chance I can turn it into a gain?” Similarly, people who feel that the opportunities to succeed in life are narrowing, are more likely to play the lottery, or play more often.

Households with regular players spend an average of about 2 percent of their income on the game, studies find. The proportion is higher among very low-income households.

But in most cases all the odds and numbers seem to pale next to the simple pleasure of possible transformation.

Italics mine. So these clowns have a sense of power and enjoy even a remote possibility of success. For them, anticipating winning is nearly as good as the real thing. No wonder they get reckless when hoping for a large reward. I really don't understand these people. And of course, the very poor bet more. And they have fun losing money. serves 'em right?

Communism is idiocy

According to Mark Twain,
Communism is idiocy. They want to divide up the property. Suppose they did it. It requires brains to keep money as well as make it. In a precious little while the money would be back in the former owner's hands and the communist would be poor again. The division would have to be remade every three years or it would do the communist no good.
Apparently he wrote this while staying in Paris.

Things are getting better

Steven Pinker writes,

Conventional history has long shown that, in many ways, we have been getting kinder and gentler. Cruelty as entertainment, human sacrifice to indulge superstition, slavery as a labor-saving device, conquest as the mission statement of government, genocide as a means of acquiring real estate, torture and mutilation as routine punishment, the death penalty for misdemeanors and differences of opinion, assassination as the mechanism of political succession, rape as the spoils of war, pogroms as outlets for frustration, homicide as the major form of conflict resolution--all were unexceptionable features of life for most of human history. But, today, they are rare to nonexistent in the West, far less common elsewhere than they used to be, concealed when they do occur, and widely condemned when they are brought to light.

At one time, these facts were widely appreciated. They were the source of notions like progress, civilization, and man's rise from savagery and barbarism. Recently, however, those ideas have come to sound corny, even dangerous. They seem to demonize people in other times and places, license colonial conquest and other foreign adventures, and conceal the crimes of our own societies. The doctrine of the noble savage--the idea that humans are peaceable by nature and corrupted by modern institutions--pops up frequently in the writing of public intellectuals like José Ortega y Gasset ("War is not an instinct but an invention"), Stephen Jay Gould ("Homo sapiens is not an evil or destructive species"), and Ashley Montagu ("Biological studies lend support to the ethic of universal brotherhood"). But, now that social scientists have started to count bodies in different historical periods, they have discovered that the romantic theory gets it backward: Far from causing us to become more violent, something in modernity and its cultural institutions has made us nobler.


Contra leftist anthropologists who celebrate the noble savage, quantitative body-counts--such as the proportion of prehistoric skeletons with axemarks and embedded arrowheads or the proportion of men in a contemporary foraging tribe who die at the hands of other men--suggest that pre-state societies were far more violent than our own. It is true that raids and battles killed a tiny percentage of the numbers that die in modern warfare. But, in tribal violence, the clashes are more frequent, the percentage of men in the population who fight is greater, and the rates of death per battle are higher. According to anthropologists like Lawrence Keeley, Stephen LeBlanc, Phillip Walker, and Bruce Knauft, these factors combine to yield population-wide rates of death in tribal warfare that dwarf those of modern times. If the wars of the twentieth century had killed the same proportion of the population that die in the wars of a typical tribal society, there would have been two billion deaths, not 100 million.

Political correctness from the other end of the ideological spectrum has also distorted many people's conception of violence in early civilizations--namely, those featured in the Bible. This supposed source of moral values contains many celebrations of genocide, in which the Hebrews, egged on by God, slaughter every last resident of an invaded city. The Bible also prescribes death by stoning as the penalty for a long list of nonviolent infractions, including idolatry, blasphemy, homosexuality, adultery, disrespecting one's parents, and picking up sticks on the Sabbath. The Hebrews, of course, were no more murderous than other tribes; one also finds frequent boasts of torture and genocide in the early histories of the Hindus, Christians, Muslims, and Chinese.

At the century scale, it is hard to find quantitative studies of deaths in warfare spanning medieval and modern times. Several historians have suggested that there has been an increase in the number of recorded wars across the centuries to the present, but, as political scientist James Payne has noted, this may show only that "the Associated Press is a more comprehensive source of information about battles around the world than were sixteenth-century monks." Social histories of the West provide evidence of numerous barbaric practices that became obsolete in the last five centuries, such as slavery, amputation, blinding, branding, flaying, disembowelment, burning at the stake, breaking on the wheel, and so on. Meanwhile, for another kind of violence--homicide--the data are abundant and striking. The criminologist Manuel Eisner has assembled hundreds of homicide estimates from Western European localities that kept records at some point between 1200 and the mid-1990s. In every country he analyzed, murder rates declined steeply--for example, from 24 homicides per 100,000 Englishmen in the fourteenth century to 0.6 per 100,000 by the early 1960s.

But then we get this:
Next: "The decline of killing and cruelty poses several challenges to our ability to make sense of the world."
Here's some of the rest:
The decline of killing and cruelty poses several challenges to our ability to make sense of the world. To begin with, how could so many people be so wrong about something so important? Partly, it's because of a cognitive illusion: We estimate the probability of an event from how easy it is to recall examples. Scenes of carnage are more likely to be relayed to our living rooms and burned into our memories than footage of people dying of old age. Partly, it's an intellectual culture that is loath to admit that there could be anything good about the institutions of civilization and Western society. Partly, it's the incentive structure of the activism and opinion markets: No one ever attracted followers and donations by announcing that things keep getting better. And part of the explanation lies in the phenomenon itself. The decline of violent behavior has been paralleled by a decline in attitudes that tolerate or glorify violence, and often the attitudes are in the lead. As deplorable as they are, the abuses at Abu Ghraib and the lethal injections of a few murderers in Texas are mild by the standards of atrocities in human history. But, from a contemporary vantage point, we see them as signs of how low our behavior can sink, not of how high our standards have risen.

Magical "essence"

Children were introduced to a scientific looking machine that could copy any object but was in fact a conjurer’s cabinet where an accomplice inserted replica items from behind a screen.

Professor Hood said: “When offered the choice of originals and copies, children showed no preference for duplicates of their toys unless the object to be copied was the special one that they took to bed every night. A quarter of children refused to have their favourite object copied at all, and most of those who were persuaded to put their toy in the copying machine wanted the original back.”

It used to be thought that these attachment toys or transitional objects were comfort items that provided a sense of security for infants raised in households where they slept separately from the mother.

However, the results with the copy box studies suggest that in addition to these physical properties of the toy, children believe that there is some other property of their objects that cannot be physically copied.

This unique property also applied to objects belonging to famous people. Hood and Bloom placed a metal goblet in the copying machine and told 6-year-olds that the object was special either because it was made of a precious metal or because it once belonged to the Queen.

When shown the original and a copy, children thought the duplicate silver goblet was worth the same as the original, but a goblet that once belonged to royalty was worth more than any copy.

Hood and Bloom liken this early reasoning to adult notions of ‘essences’ where we think invisible properties inhabit objects that make them unique as if these properties were physically real. This may explain why some adults think that authentic works of art and memorabilia contain some of the essence of the original creator or owner. Likewise, it also partly explains our reluctance to touch or wear items previously owned by murderers.

I'm right; you're evil

Opponents of the war believe passionately that President Bush, his neoconservative allies and a complicit Congress deliberately misled the nation into war. Supporters of the president and the war concede that mistakes were made, especially on the question of whether Saddam Hussein had weapons of mass destruction, but say this involved no attempt to hoodwink the nation.

Antiwar groups declared that the Libby trial laid bare the Bush administration's smear campaign to discredit a war critic -- and said they hope Libby is just the first in a long line of officials to be punished. Supporters of the administration and the war declared the trial showed that Bush had done nothing to mislead the nation and that war opponents are being paranoid.

What is interesting about the clash from a psychological perspective is not that supporters and critics disagree, but that large numbers of people on both sides claim to know the motives of people who disagree with them. When was the last time you heard people say that those who disagree with them on the Iraq war are well-meaning, smart, informed and thoughtful?

A wide body of psychological research shows that on any number of hot-button issues, people seem hard-wired to believe the worst about those who disagree with them. Most people can see the humor in such behavior when it doesn't involve things they care about: If you don't care about sports, for example, you roll your eyes when fans of one team question the principles and parentage of fans of a rival team.

"We are really bad about putting ourselves in other people's places and looking at the world the way they look at it," said Glenn D. Reeder, a social psychologist at Illinois State University who recently conducted a study into how supporters and critics of the Iraq war have come to believe entirely different narratives about the war -- and about each other. "We find it difficult to grant that other people come to their conclusions in good faith if they reach a conclusion that is different than ours," he said.

When Reeder and his colleagues asked pro-war and antiwar Americans how they would describe the other side's motives, the researchers found that the groups suffered from an identical bias: People described others who agreed with them as motivated by ethics and principle, but felt that the people who disagreed with them were motivated by narrow self-interest.

My Music Personality

People high on the Reflective & Complex Dimension dimension tend to enjoy Classical, Blues, Jazz, and Folk music.
On the Reflective & Complex Dimension you fell in the 72 percentile.

Based on your responses, you scored above average on the reflective and complex music-preference dimension. Research in our laboratory indicates that people high on this dimension, like you, often have the following characteristics:

People with high scores on the reflective and complex music-preference dimension tend to be open to new experiences, creative, intellectual, and enjoy trying new things. When it comes to politics, they tend to lean toward the liberal side. Wisdom, diversity, and fine arts are all important to them. When it comes to lifestyle, high scorers tend to be sophisticated, and relatively well off financially. After a hard day of work, if they're not listening to music or reading a book, they enjoy documentary films, independent, classic, or foreign films.

Overall, how well does the feedback capture what you are like?
Not so much. I don't much like folk music. Again, this annoying assumption that people are either liberal or conservative. More here.

Bad governance

Ofeibea Quist-Arcton sounded awfully excited in this broadcast. She was either indifferent or ignorant to the waste that Niall Ferguson condemns:
Last year, the United States Agency for International Development gave Ghana $22.5 million in food aid.

Last Monday, that same country began a 12-month celebration of its independence from British rule, which was granted 50 years ago, on March 5, 1957. The total budget for these festivities, which commenced with an all-night party in Accra, is said to be $20 million.
He concludes,
Today, there are still people who fondly believe that all of Africa's problems are a legacy of colonialism — the fault of the wicked British. Those people also cling to the notion that this legacy can be expunged only by the payment of reparations in the name of "aid." Fifty years on, we can surely think more clearly.

In virtually every case (Botswana is the sole exception), former British colonies in sub-Saharan Africa have fared worse under independence than they did under British rule. In virtually every case, as New York University's William Easterly has pointed out, the expenditure of billions in Western aid has failed to raise their rate of economic growth.

In his forthcoming book, "The Bottom Billion," Oxford economist Paul Collier brilliantly anatomizes the true causes of Africa's post-colonial failure. He identifies four traps into which a depressingly large number of sub-Saharan countries have fallen since the 1950s. Some are trapped by their dependence on natural resources, such as diamonds or oil; some by being landlocked; some by recurrent civil war. But the fourth trap is the one that applies to Ghana: the trap of bad governance.

To illustrate the folly of giving aid to chronically misruled countries, Collier cites a recent survey that tracked money released by Chad's Ministry of Finance to fund rural health clinics. Just 1% reached its intended destination. The rest was raked off by one corrupt official after another.

So forgive me if I don't join Ghanaians in partying all year. I really don't see much to celebrate if independence is just a euphemism for aid-dependence.

Tuesday, March 13

It's only tea

If someone came into your house and offered you a cocktail of butanol, iso amyl alcohol, hexanol, phenyl ethanol, tannin, benzyl alcohol, caffeine, geraniol, quercetin, 3-galloyl epicatechin, 3-galloyl epigallocatchin and inorganic salts, would you take it?


Scientists are worried about the growing disconnection between the lifestyle view of chemicals and the chemical realities of the world. They are worried not just because people are likely to misunderstand what chemicals are and do, but because of the consequences for decisions about lifestyle choices, family health and social policies.

In lifestyle commentary, chemicals are presented as something that can be avoided, or eliminated using special socks, soaps or diets, and that cause only harm to health and damage to the environment. The chemical realities of the world, by contrast, are that everything is made of chemicals, that synthetic chemicals are often much safer for human health than so-called ‘natural’ ones, and that unfounded anxiety about chemicals is encouraging people to buy into ideas and ‘remedies’ that make little scientific or medical sense.

Monday, March 12

Protectionists Never Learn

March 12, 2007; Page A15

I'm thinking of a country. America's trade deficit with this country just reached an all-time high. This country holds more U.S. Treasuries than any other foreign country. It's one of the world's largest economies. And the name of that country is?


Japan? Yes. Remember when Japan was a big threat to the American economy? You have to go back to the late 1980s. Back then, every politician in the mood for pandering to economic ignorance could scare a bunch of folks with worries about how the Japanese were stealing our jobs. How our trade deficit with Japan was going to destroy the American economy. How the Japanese economy was soon going to pass America's. How the Japanese auto industry was part of a sinister strategy to destroy our core competencies.

Job thief

You'd think Japan would still make good political fodder. The story of the baseball off-season is the Red Sox spending $100 million to bring Daisuke Matsuzaka from Japan to the United States. Dice-K, as he's known, is the ultimate import. He takes away a job from an American pitcher. And the Japanese baseball teams discriminate against American players with strict quotas. But even though America's trade deficit with Japan just hit that all-time high, no one uses Dice-K as a symbol of unfair Japanese trade policy.

Why not? Instead, it's China all the time. We're told that China cheats on its currency, stealing America's manufacturing capacity and destroying American jobs. China's holdings of U.S Treasuries threaten our sovereignty, according to Hillary Clinton, even though Japanese holdings are almost twice as big.

Why isn't Japan just as scary as China? One answer is that Matsuzaka smiles too much. He's only scary if you're 60 feet 6 inches away from him, trying to hit his famous gyroball with a wooden stick in your hand. And unlike other imports, it's easy to see how he doesn't just help his relatives in Japan with all that money he's getting from the Red Sox. He helps the Red Sox. Trade makes both parties to the trade better off.

But still. Why isn't Japan scary?

One answer is that the doom-and-gloomers already tried, but nothing happened. They told us that Japan was going to destroy our economy. They told us we needed a plan to cope with brilliant Japanese economic strategies. But then the Japanese economy hiccupped and played Rip Van Winkle for a decade, while America kept growing.

The real reason Japan isn't scary is because it wasn't and isn't a threat to our standard of living. Trade makes both parties better off, remember? But when Japan slumps and the U.S. surges, it's too hard to fool people with bad economics.

So when the sky didn't fall, a new candidate had to be found. Mexico and Nafta fit the bill. Not Canada, even though Canada was part of Nafta. Evidently, politicians and some voters find Mexicans more scary than Canadians. So it was Mexico. When that great "sucking sound" was never heard, a new sinister foreign nation had to be found. And so it's the turn of the Chinese.

Yes, China holds a lot of our bonds. But Japan holds more. Yes, we run a big trade deficit with China. But that lets us buy lots of inexpensive stuff instead of having to make it for ourselves. Yes, there are more than a billion Chinese. I guess that means they can take all of our jobs four times! But our economy keeps growing. We have more jobs than ever before. And contrary to popular belief, the American standard of living and the American middle class are thriving.

We were told that at a minimum China (and India with its own billion-strong population) would take all our high-tech jobs. But the high-tech sector bounced back from its downturn (a downturn that had nothing to do with outsourcing) and is growing again, partly because we can get some of the simplest database and programming tasks done so cheaply by Indians and Chinese.

So why can politicians still make China scary? Why didn't Americans learn from the previous sky-is-falling episodes? The simple answer is that if you don't understand economics, you might be convinced by a politician who says that trade with China is bad for America.

The next time you find yourself losing sleep over China, remember that you were worried about Japan and Mexico and everything turned out OK. Then ask yourself if America would be a richer country if China cut itself off from the rest of the world.

Sunday, March 11

Livestock generates more greenhouse gas than transport

Which causes more greenhouse gas emissions, rearing cattle or driving cars?


According to a new report published by the United Nations Food and Agriculture Organization, the livestock sector generates more greenhouse gas emissions as measured in CO2 equivalent – 18 percent – than transport. It is also a major source of land and water degradation.
I missed that one.

Saturday, March 10

A Growing Inequality

First, man does not live by bread alone. Our happiness depends partly on our incomes, but also on the time we spend with our friends, our hobbies, and our favorite TV shows. So, it's a good exercise in perspective to remember that by and large, the big winners in the income derby have been the small winners in the leisure derby, and vice versa.

Second, a certain class of pundits and politicians are quick to see any increase in income inequality as a problem that needs fixing—usually through some form of redistributive taxation. Applying the same philosophy to leisure, you could conclude that something must be done to reverse the trends of the past 40 years—say, by rounding up all those folks with extra time on their hands and putting them to (unpaid) work in the kitchens of their "less fortunate" neighbors. If you think it's OK to redistribute income but repellent to redistribute leisure, you might want to ask yourself what—if anything—is the fundamental difference.

Friday, March 9

Lone holdout?

Black and White

From Ask Calvin's Dad
Q. How come old photographs are always black and white? Didn't they have color film back then?
A. Sure they did. In fact, those old photographs are in color. It's just that the world was black and white then. The world didn't turn color until sometime in the 1930s, and it was pretty grainy color for a while, too.
Q. But then why are old paintings in color?! If the world was black and white, wouldn't artists have painted it that way?
A. Not necessarily. A lot of great artists were insane.
Q. But... But how could they have painted in color anyway? Wouldn't their paints have been shades of gray back then?
A. Of course, but they turned colors like everything else did in the '30s.
Q. So why didn't old black and white photos turn color too?
A. Because they were color pictures of black and white, remember?

Wednesday, March 7

Barely half of Chinese speak Mandarin

More than half of all Chinese people can speak standard mandarin Chinese, while nearly 70 percent of urbanites are fluent in the country's official language known at "common talk", according to a massive survey conducted by the Ministry of Education.

The survey of half a million people shows that 53.06 percent of the population can effectively communicate orally in mandarin. The fluency rate in cities was 66 percent while in rural areas it was 45 percent.

After some incorrect nonsense claiming "the Chinese share the same written language", the article continues,

Mandarin, which in Chinese is called Putonghua and literally means "common talk", is taught in every school in the country and is China's standard lingua franca.

Most Chinese are verbally bilingual speaking not only mandarin, which has many regional accents, but a completely different sounding dialect of Chinese.

The survey also found that 56.76 percent of Chinese men can speak Putonghua, while 49.22 percent of women speak it. About 70 percent of people between the age of 15 and 29 speak mandarin, while only 30.97 percent between the age of 60 and 69 can speak standard mandarin.

Who are the slackers?

Young adults in France, like their contemporaries across Europe, face a slew of problems never experienced by their middle-aged leaders. Consider: a 30-year-old Frenchman earned 15 percent less than a 50-year-old in 1975; now he earns 40 percent less. Over the same period, the number of graduates unemployed two years after college has risen from 6 percent to 25 percent, even if they typically have better degrees. Thirty-year-olds in 2001 were saving 9 percent of their incomes, down from 18 percent just six years before. Young people who snag stable jobs, gain access to credit and buy homes later in life are particularly angry that the older generations continue to rack up public debts for which they will get the bill. And they are very skeptical of the pledges of boomer-generation politicians. "If all this were financially possible, it would have been done long ago," says Clément Pitton, the 23-year-old leader of Impulsion Concorde, which recently circulated a petition declaring "We will not pay your debt."

Pitton's sentiments are increasingly shared by the children of Europe's baby boomers, a generation sometimes called the baby losers. Not only will they be forced to pick up the tab for a welfare system that offers far more to the elderly than to the young, but they will be forced to do so with less: Europe's economy remains skewed in favor of the old and its politicians have been shy about pushing painful reforms that might correct the balance. No wonder one recent poll in France showed that only 5 percent believed young people had a better chance of succeeding than their parents. Europe, it seems, is increasingly split—not along class or racial lines, but between its young and its old.


The sunlit decades of postwar prosperity saw the creation of generous welfare states across Europe. Dynamic economies assured the boomers secure employment (Germans still like to speak of "job owners") and hefty pensions on retirement. But this good fortune came at a price. The same labor rules that protect the jobs of the middle-aged shut out the young. And dwindling birthrates mean there will soon be fewer workers to support the retirees.

So will the boomers renounce—or at least share—their benefits? Unlikely, says leading French sociologist Louis Chauvel. "The baby boomers didn't [intend] to do this to young people, but I don't see a willingness to get them out of the situation either." Such intransigence looks even more unfair given the disparities in wealth and lifestyle. The boomers are living it up; many have used their generous pensions to opt out of the labor market altogether. Only 30 percent of Belgians older than 55 still work, for example. A report by the London-based think tank Reform put the issue plainly. "People over 50 are developing the lifestyles of teenagers."

As they slack off, their children's woes are multiplying. Germans now talk of "Generation Intern" as well-educated graduates increasingly accept unpaid jobs in the quest for elusive permanent posts. Such challenges breed despair.


Across the continent, spiraling property prices and poor job prospects are conspiring to keep youngsters living at home. According to the Italian Institute of Social Medicine, 45 percent of the country's 30- to 34-year-olds still sleep in their old beds and enjoy Mama's home cooking. In France, the proportion of 24-year-olds now living with their parents has almost doubled since 1975, to 65 percent. Even in the U.K., with its enviable record of job creation, the average age of the first-time home buyer has climbed from 26 in 1976 to 34 today. Property prices are now eight times higher than the median earnings of the ordinary twentysomething.


Ironically, Europe's young don't seem to favor cutting their parents' benefits; they want the same treatment. Last year French youths mobbed the streets to protest a new bill that aimed to create more employment but offered less security; the proposal was defeated. Says Wanlin: "Their aspiration is to get the same protection for themselves." If the economics don't work out, that's a problem for the politicians—not the young. Indeed, even some boomers recognize the flaws in the status quo. "The worst thing," says French author and former political advisor Bernard Spitz, "would be if we lived contentedly with our debts and our early retirements, telling ourselves the young will pay, just like we told ourselves 'Germany will pay' after the Treaty of Versailles." As Europe has learned before, a bad peace only leads to more war—even between generations.

Son of Heaven Garden Hotel

It's the Son of Heaven Garden 天子庄园
inspired by traditional Chinese gods, Fu (central; fortune; 福), Lu (right; prosperity; 禄), and Shou (left; longevity; 寿) Langfang Municipality (廊坊市)
more here.

Yipes. No windows in back!

The tragedy of human cognition

Robin Marantz Henig writes on religion, citing Scott Atran, anthropologist at the National Center for Scientific Research in Paris, with joint appointments at the University of Michigan and the John Jay College of Criminal Justice in New York:

he presents students with a wooden box that he pretends is an African relic. “If you have negative sentiments toward religion,” he tells them, “the box will destroy whatever you put inside it.” Many of his students say they doubt the existence of God, but in this demonstration they act as if they believe in something. Put your pencil into the magic box, he tells them, and the nonbelievers do so blithely. Put in your driver’s license, he says, and most do, but only after significant hesitation. And when he tells them to put in their hands, few will.

If they don’t believe in God, what exactly are they afraid of?


[Scientists studying the evolution of religion] tend to agree on one point: that religious belief is an outgrowth of brain architecture that evolved during early human history. What they disagree about is why a tendency to believe evolved, whether it was because belief itself was adaptive or because it was just an evolutionary byproduct, a mere consequence of some other adaptation in the evolution of the human brain.

Angels, demons, spirits, wizards, gods and witches have peppered folk religions since mankind first started telling stories. Charles Darwin noted this in “The Descent of Man.” “A belief in all-pervading spiritual agencies,” he wrote, “seems to be universal.” According to anthropologists, religions that share certain supernatural features — belief in a noncorporeal God or gods, belief in the afterlife, belief in the ability of prayer or ritual to change the course of human events — are found in virtually every culture on earth.


When a trait is universal, evolutionary biologists look for a genetic explanation and wonder how that gene or genes might enhance survival or reproductive success. In many ways, it’s an exercise in post-hoc hypothesizing: what would have been the advantage, when the human species first evolved, for an individual who happened to have a mutation that led to, say, a smaller jaw, a bigger forehead, a better thumb? How about certain behavioral traits, like a tendency for risk-taking or for kindness?

Atran saw such questions as a puzzle when applied to religion. So many aspects of religious belief involve misattribution and misunderstanding of the real world. Wouldn’t this be a liability in the survival-of-the-fittest competition? To Atran, religious belief requires taking “what is materially false to be true” and “what is materially true to be false.” One example of this is the belief that even after someone dies and the body demonstrably disintegrates, that person will still exist, will still be able to laugh and cry, to feel pain and joy. This confusion “does not appear to be a reasonable evolutionary strategy,” Atran wrote in “In Gods We Trust: The Evolutionary Landscape of Religion” in 2002. “Imagine another animal that took injury for health or big for small or fast for slow or dead for alive. It’s unlikely that such a species could survive.” He began to look for a sideways explanation: if religious belief was not adaptive, perhaps it was associated with something else that was.


Some cognitive scientists think of brain functioning in terms of modules, a series of interconnected machines, each one responsible for a particular mental trick. They do not tend to talk about a God module per se; they usually consider belief in God a consequence of other mental modules.

Religion, in this view, is “a family of cognitive phenomena that involves the extraordinary use of everyday cognitive processes,” Atran wrote in “In Gods We Trust.” “Religions do not exist apart from the individual minds that constitute them and the environments that constrain them, any more than biological species and varieties exist independently of the individual organisms that compose them and the environments that conform them.”


Agent detection evolved because assuming the presence of an agent — which is jargon for any creature with volitional, independent behavior — is more adaptive than assuming its absence. If you are a caveman on the savannah, you are better off presuming that the motion you detect out of the corner of your eye is an agent and something to run from, even if you are wrong. If it turns out to have been just the rustling of leaves, you are still alive; if what you took to be leaves rustling was really a hyena about to pounce, you are dead.

A classic experiment from the 1940s by the psychologists Fritz Heider and Marianne Simmel suggested that imputing agency is so automatic that people may do it even for geometric shapes. For the experiment, subjects watched a film of triangles and circles moving around. When asked what they had been watching, the subjects used words like “chase” and “capture.” They did not just see the random movement of shapes on a screen; they saw pursuit, planning, escape.

So if there is motion just out of our line of sight, we presume it is caused by an agent, an animal or person with the ability to move independently. This usually operates in one direction only; lots of people mistake a rock for a bear, but almost no one mistakes a bear for a rock.

What does this mean for belief in the supernatural? It means our brains are primed for it, ready to presume the presence of agents even when such presence confounds logic. “The most central concepts in religions are related to agents,” Justin Barrett, a psychologist, wrote in his 2004 summary of the byproduct theory, “Why Would Anyone Believe in God?” Religious agents are often supernatural, he wrote, “people with superpowers, statues that can answer requests or disembodied minds that can act on us and the world.”

A second mental module that primes us for religion is causal reasoning. The human brain has evolved the capacity to impose a narrative, complete with chronology and cause-and-effect logic, on whatever it encounters, no matter how apparently random. “We automatically, and often unconsciously, look for an explanation of why things happen to us,” Barrett wrote, “and ‘stuff just happens’ is no explanation. Gods, by virtue of their strange physical properties and their mysterious superpowers, make fine candidates for causes of many of these unusual events.”


A third cognitive trick is a kind of social intuition known as theory of mind. It’s an odd phrase for something so automatic, since the word “theory” suggests formality and self-consciousness. Other terms have been used for the same concept, like intentional stance and social cognition. One good alternative is the term Atran uses: folkpsychology.

Folkpsychology, as Atran and his colleagues see it, is essential to getting along in the contemporary world, just as it has been since prehistoric times. It allows us to anticipate the actions of others and to lead others to believe what we want them to believe; it is at the heart of everything from marriage to office politics to poker. People without this trait, like those with severe autism, are impaired, unable to imagine themselves in other people’s heads.

The process begins with positing the existence of minds, our own and others’, that we cannot see or feel. This leaves us open, almost instinctively, to belief in the separation of the body (the visible) and the mind (the invisible). If you can posit minds in other people that you cannot verify empirically, suggests Paul Bloom, a psychologist and the author of “Descartes’ Baby,” published in 2004, it is a short step to positing minds that do not have to be anchored to a body. And from there, he said, it is another short step to positing an immaterial soul and a transcendent God.


The adaptive advantage of folkpsychology is obvious. According to Atran, our ancestors needed it to survive their harsh environment, since folkpsychology allowed them to “rapidly and economically” distinguish good guys from bad guys. But how did folkpsychology — an understanding of ordinary people’s ordinary minds — allow for a belief in supernatural, omniscient minds? And if the byproduct theorists are right and these beliefs were of little use in finding food or leaving more offspring, why did they persist?


The bottom line, according to byproduct theorists, is that children are born with a tendency to believe in omniscience, invisible minds, immaterial souls — and then they grow up in cultures that fill their minds, hard-wired for belief, with specifics. It is a little like language acquisition, Paul Bloom says, with the essential difference that language is a biological adaptation and religion, in his view, is not. We are born with an innate facility for language but the specific language we learn depends on the environment in which we are raised. In much the same way, he says, we are born with an innate tendency for belief, but the specifics of what we grow up believing — whether there is one God or many, whether the soul goes to heaven or occupies another animal after death — are culturally shaped.

Whatever the specifics, certain beliefs can be found in all religions. Those that prevail, according to the byproduct theorists, are those that fit most comfortably with our mental architecture. Psychologists have shown, for instance, that people attend to, and remember, things that are unfamiliar and strange, but not so strange as to be impossible to assimilate. Ideas about God or other supernatural agents tend to fit these criteria. They are what Pascal Boyer, an anthropologist and psychologist, called “minimally counterintuitive”: weird enough to get your attention and lodge in your memory but not so weird that you reject them altogether. A tree that talks is minimally counterintuitive, and you might believe it as a supernatural agent. A tree that talks and flies and time-travels is maximally counterintuitive, and you are more likely to reject it.

It is not enough for an agent to be minimally counterintuitive for it to earn a spot in people’s belief systems. An emotional component is often needed, too, if belief is to take hold. “If your emotions are involved, then that’s the time when you’re most likely to believe whatever the religion tells you to believe,” Atran says. Religions stir up emotions through their rituals — swaying, singing, bowing in unison during group prayer, sometimes working people up to a state of physical arousal that can border on frenzy. And religions gain strength during the natural heightening of emotions that occurs in times of personal crisis, when the faithful often turn to shamans or priests. The most intense personal crisis, for which religion can offer powerfully comforting answers, is when someone comes face to face with mortality.


Fear of death is an undercurrent of belief. The spirits of dead ancestors, ghosts, immortal deities, heaven and hell, the everlasting soul: the notion of spiritual existence after death is at the heart of almost every religion. According to some adaptationists, this is part of religion’s role, to help humans deal with the grim certainty of death. Believing in God and the afterlife, they say, is how we make sense of the brevity of our time on earth, how we give meaning to this brutish and short existence. Religion can offer solace to the bereaved and comfort to the frightened.


Whether or not it is adaptive, belief in the afterlife gains power in two ways: from the intensity with which people wish it to be true and from the confirmation it seems to get from the real world. This brings us back to folkpsychology. We try to make sense of other people partly by imagining what it is like to be them, an adaptive trait that allowed our ancestors to outwit potential enemies. But when we think about being dead, we run into a cognitive wall. How can we possibly think about not thinking?


The trick in thinking about adaptation is that even if a trait offers no survival advantage today, it might have had one long ago. This is how Darwinians explain how certain physical characteristics persist even if they do not currently seem adaptive — by asking whether they might have helped our distant ancestors form social groups, feed themselves, find suitable mates or keep from getting killed. A facility for storing calories as fat, for instance, which is a detriment in today’s food-rich society, probably helped our ancestors survive cyclical famines.

So trying to explain the adaptiveness of religion means looking for how it might have helped early humans survive and reproduce. As some adaptationists see it, this could have worked on two levels, individual and group. Religion made people feel better, less tormented by thoughts about death, more focused on the future, more willing to take care of themselves. As William James put it, religion filled people with “a new zest which adds itself like a gift to life . . . an assurance of safety and a temper of peace and, in relation to others, a preponderance of loving affections.”

Such sentiments, some adaptationists say, made the faithful better at finding and storing food, for instance, and helped them attract better mates because of their reputations for morality, obedience and sober living. The advantage might have worked at the group level too, with religious groups outlasting others because they were more cohesive, more likely to contain individuals willing to make sacrifices for the group and more adept at sharing resources and preparing for warfare.

...“Religious and secular rituals can both promote cooperation,” [Richard Sosis, an anthropologist with positions at the University of Connecticut and Hebrew University of Jerusalem] wrote in American Scientist in 2004. But religious rituals “generate greater belief and commitment” because they depend on belief rather than on proof. The rituals are “beyond the possibility of examination,” he wrote, and a commitment to them is therefore emotional rather than logical — a commitment that is, in Sosis’s view, deeper and more long-lasting.

Rituals are a way of signaling a sincere commitment to the religion’s core beliefs, thereby earning loyalty from others in the group. “By donning several layers of clothing and standing out in the midday sun,” Sosis wrote, “ultraorthodox Jewish men are signaling to others: ‘Hey! Look, I’m a haredi’ — or extremely pious — ‘Jew. If you are also a member of this group, you can trust me because why else would I be dressed like this?’ ” These “signaling” rituals can grant the individual a sense of belonging and grant the group some freedom from constant and costly monitoring to ensure that their members are loyal and committed. The rituals are harsh enough to weed out the infidels, and both the group and the individual believers benefit.


What can be made of atheists, then? If the evolutionary view of religion is true, they have to work hard at being atheists, to resist slipping into intrinsic habits of mind that make it easier to believe than not to believe. Atran says he faces an emotional and intellectual struggle to live without God in a nonatheist world, and he suspects that is where his little superstitions come from, his passing thought about crossing his fingers during turbulence or knocking on wood just in case. It is like an atavistic theism erupting when his guard is down. The comforts and consolations of belief are alluring even to him, he says, and probably will become more so as he gets closer to the end of his life. He fights it because he is a scientist and holds the values of rationalism higher than the values of spiritualism.

This internal push and pull between the spiritual and the rational reflects what used to be called the “God of the gaps” view of religion. The presumption was that as science was able to answer more questions about the natural world, God would be invoked to answer fewer, and religion would eventually recede. Research about the evolution of religion suggests otherwise. No matter how much science can explain, it seems, the real gap that God fills is an emptiness that our big-brained mental architecture interprets as a yearning for the supernatural. The drive to satisfy that yearning, according to both adaptationists and byproduct theorists, might be an inevitable and eternal part of what Atran calls the tragedy of human cognition.

Tuesday, March 6

It doesn't sound like a good idea to me

Public pressure is mounting on the central bank, the People’s Bank of China. In postings on Internet message boards in China and in conversations among educated urban Chinese, critics suggest that the central bank should earn higher profits from its vast hoard — for instance, by taking more risk and investing in stocks — and use some of it to help a nation where most workers still earn less than a tenth of the wages of the typical American.

Foreign exchange reserves have soared across much of the developing world, in countries as diverse as Brazil, Thailand and India, but particularly in China. The reason lies in powerful currency intervention, as these countries strive to keep their exports competitive in Western markets by curbing the appreciation of their currencies against the dollar.

They have bought vast amounts of dollars from their exporters, giving back local currency in exchange. And then they have struggled with what to do with these dollars.

Most central banks have invested their dollars in American securities, particularly Treasury bonds and notes, but sometimes mortgage-backed securities as well. In recent years, these giant purchases have helped hold down interest rates that American home buyers pay for mortgages and the federal government pays to finance its budget deficits.

If central banks move out of such securities, that could push American interest rates higher. But moving into stocks, which tend to earn higher returns over the long term, poses market risks, as central banks carefully noted recently as the markets fell.

Some of the comments on Chinese Internet boards have been unusually strident. They have criticized the government for helping American taxpayers and home owners by investing hundreds of billions of dollars in Treasury debt and other securities instead of spending the money at home.

“China has huge amounts of foreign reserves; why doesn’t the government put more of it into education?” one posting this winter said.

Doubling the investment return on China’s foreign currency reserves, to 8 percent from 4 percent, would generate enough money to triple the nation’s education budget, said Tao Dong, the chief Asia economist at Credit Suisse. “Enhancing returns on the foreign exchange,” he said, “is natural and expected by the Chinese people.”

Yet spending the United States dollars on education and other domestic programs is not a simple task. The central bank would have to sell some of those dollars to buy the Chinese currency, the yuan, to be able to spend it on schools.

But in buying so many yuan, the central bank would nudge up the currency’s exchange value. That would make Chinese exports more expensive — something the bank has tried to prevent.

On top of that, it has already had to borrow yuan — by issuing bonds — to buy the dollars from exporters, and the bank would struggle to repay debts if it then spent its reserves on social programs.

The Chinese government may be poised to respond to the criticism later this month after it formally sets up a new investment agency, several people close to the government’s planning said.

Having invested for decades in the same Treasury securities that most governments purchase, China is now preparing to begin investing public money in stocks, corporate bonds and even commodities like oil and possibly strategic metals.

“That management has to be extremely professional,” said Rajat M. Nag, managing director general of the Asian Development Bank, alluding to central bank fund managers of numerous countries. “And I don’t think it can be done by bureaucrats.”

Both South Korea, which is preparing to move in the same direction, and China are trying in part to emulate the highly secretive Government Investment Corporation in Singapore. But China faces greater difficulties than Singapore, which has a tradition of highly professional money management and a civil service that is largely free of corruption.

By contrast, President Hu Jintao has identified chronic corruption as the biggest challenge facing China, and government officials tend to have fairly narrow expertise in managing asset portfolios.

I'm not saying they should have invested all that money here in the first place, but I don't think this is a good plan. The officials are corrupt and lacking expertise--so let's let them gamble with the nation's money. Not to mention market risk.

Monday, March 5

Good old-fashioned rent-seeking

We don't begrudge anyone the opportunity to make a buck. But there's a difference between making money by producing things people want and making money by gaming the regulatory process. There's no market here unless the government creates one, and who has the profit opportunity depends entirely on who the government picks as the winners and the losers in designing this market in the first place. So it's no wonder that almost any business that has ever put an ounce of CO2 into the atmosphere is rushing to show its cap-and-trade bona fides. far Europe's commitment to Kyoto has been more hot air than action.

The reason is hardly a secret, though you rarely see climate-change activists admitting it. Despite all the talk of "alternative" fuels, some 80% of the energy that the world produces today comes from carbon-based fuels. Barring cold fusion or some other miracle technology, that ratio won't change much for decades to come. That means, in turn, that any stringent CO2 cap would inevitably have serious economic costs. We doubt voters will elect politicians who tell them the cost of reducing their "carbon footprint" is more blackouts or a lower standard of living. And in any case China is putting up a new coal-fired plant every week, raising emissions that will overwhelm whatever reductions cap-and-trade would yield in the U.S.

Sunday, March 4

Boredom & risk

On boredom and risk:
For most people, boredom is a passing, nearly trivial feeling that lifts as soon as your number is called, a task is completed or a lecture ends. But boredom has a darker side: Easily bored people are at higher risk for depression, anxiety, drug addiction, alcoholism, compulsive gambling, eating disorders, hostility, anger, poor social skills, bad grades and low work performance.
I'm dying to use the word alexithymia (students who scored high on scales of alexithymia—difficulty in describing or identifying feelings, distinguishing between bodily sensations and feelings, and an inhibited inner emotional and fantasy life—also tended to be bored).
In fact, direct manipulation of attention can lead to boredom. In a classic experiment from 1989, James Laird at Clark University in Worcester, Mass., found that low-level distraction—by way of a quiet television in the next room—caused participants to find a reading task "boring."

These results support the idea that we label tasks as boring when they require a great deal of focused effort to hold our attention. In the 1970s, psychologist Mihaly Csikszentmihalyi, who is now at the Claremont Graduate University in Claremont, Calif., coined the term "flow psychology"—the idea that great absorption, focus and enjoyment of work results from a balance between our skills and the challenge of the tasks we face.

Both tasks that are too dull, such as factory work, or too complicated, such as doing taxes, feel tedious. Of course we all differ in our ability to focus, see the beauty and complexity of our surroundings, or ascribe meaning to our actions. We also differ in our interest or knowledge of an area. "You might love something that I would consider incredibly mundane," Vodanovich says. "I have some good friends who love classical music and I cannot stand it."
Compare this with the following: Myron Scholes, winner of the Nobel Prize in economics, and a principal of the hedge fund Long Term Capital Management (LTCM), which went belly-up in the late 1990s.
He says he feels like the woman in the local paper who, whatever she does, will always be remembered for one thing: "Mrs. Jones, who was falsely accused of the ax murder of her husband in 1944, recently had a garden party for 10 of her friends."
Anyway, what he has to say about risk:
A better description would be a lifelong student of risk, and why we humans need risk, how we manage it and why we'd be unhappy without it.

Start with the commonplace that risk is one side of a coin whose other side is reward. "We all have a taste for it," he says. "In life, it would be kind of boring if there was no risk. On the other hand if there's too much risk, too much uncertainty, too much chaos, we can't handle it either. We simultaneously want order and disorder, simultaneously want risk and quiescence."

Our conversation, at his suburban New York headquarters, takes place just before the recent market gyrations, but his analysis has a greater ring of verisimilitude than many that filled the media this week. "Right now," according to Mr. Scholes, "we're quiet because the lion is tame, and maybe it's the central bankers of the world who are keeping it tame." And thus, "Individuals will say, oh, things are now quiescent and will be forever, and they'll take more risk again."
So is it the case that even people who are temporarily bored will engage in risk-seeking behavior?