Sunday, May 30, 2010

"The last full measure of devotion"

On Memorial Day, it is a TommyWonk tradition to ponder the words of the Gettysburg Address. Here is the infamous Powerpoint version, a lesson in how to take a powerful message and reduce it to mush.
Students of history are surprised to learn that there are several versions of the address, and that we are not entirely sure of the precise words Lincoln used. Here
is the text of the Bliss Version (with links to readings by Sam Waterston, Jeff Daniels and Johnny Cash):
Fourscore and seven years ago our fathers brought forth on this continent a new nation, conceived in liberty and dedicated to the proposition that all men are created equal. Now we are engaged in a great civil war, testing whether that nation or any nation so conceived and so dedicated can long endure. We are met on a great battlefield of that war.

We have come to dedicate a portion of that field as a final resting-place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this. But, in a larger sense, we cannot dedicate, we cannot consecrate, we cannot hallow this ground. The brave men, living and dead who struggled here have consecrated it far above our poor power to add or detract.

The world will little note nor long remember what we say here, but it can never forget what they did here.

It is for us the living rather to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us -- that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion -- that we here highly resolve that these dead shall not have died in vain, that this nation under God shall have a new birth of freedom, and that government of the people, by the people, for the people shall not perish from the earth.
Wilmington’s 143rd annual Memorial Day parade, which is always held on May 30, begins at six o’clock this evening, starting near Rockford Park, and marching down Delaware Avenue to the Soldiers & Sailors Monument at Broom Street.

Friday, May 28, 2010

The Marcellus Shale and Natural Gas Prices

The New York Times reports that Royal Dutch Shell is buying natural gas reserves, including the Marcellus Shale, from East Resources for $4.7 billion.
Those who imagine that exploitation of the Marcellus Shale will lead to an endless supply of cheap natural gas should take note of a revealing comment from Jason Kenney, an energy analyst at ING:
“You have to throw a lot of capex at drilling,” Mr. Kenney said, referring to capital expenditures. While natural gas prices are modest in the United States now, he added, they are expected to rise.
If the supply is growing, why wouldn't prices come down? The answer is the capital cost of extraction. No sane energy executive is going to spend money to bring the price of energy down.
If you add
the potentially high environmental costs, the Marcellus Shale starts to look less like a bargain. The Marcellus Shale may significantly extend the supply of domestic natural gas, but we should not expect it to usher in a golden age of cheap, clean energy.

Wednesday, May 26, 2010

The CBO's Analysis of the Recovery Act

The Congressional Budget Office (CBO) has released its latest analysis of the economic impact of the American Recovery and Reinvestment Act of 2009 (ARRA). The CBO's key findings show the ARRA had a significant, or even pivotal, impact on GDP and unemployment:
Raised the level of real (inflation-adjusted) gross domestic product (GDP) by between 1.7 percent and 4.2 percent,
Lowered the unemployment rate by between 0.7 percentage points and 1.5 percentage points...
How reliable is the CBO's analysis? The CBO acknowledges the uncertainty of combining data from ARRA recipients with its models, which is one reason why the data are presented as a range instead of a single number.
To try to do some quick benchmarking, I turned to the multipliers or
the "bang for the buck" estimates presented a year and a half ago by Mark Zandi of Moody's Zandi, you may recall, was an economics advisor to John McCain during the 2008 campaign, so we can presumably trust him to not puff up numbers to make the case for Democratic stimulus policy.
I compared the CBO's multipliers to Zandi's. A figure of 1.0 means that one dollar of spending or tax cuts produces one dollar of economic activity:
Transfer Payments to State and Local Governments for Infrastructure
CBO: 1.0 to 2.5
Zandi: 1.59

Transfer Payments to State and Local Governments for Other Purposes
CBO: 0.7 to 1.8
Zandi: 1.38

Transfer Payments to Individuals (includes Supplemental Nutrition Assistance Program and Unemployment Compensation)
CBO: 0.8 to 2.1
Zandi: 1.63 for Unemployment, 1.73 for Food Stamps

Two-Year Tax Cuts for Lower- and Middle-Income People
CBO: 0.6 to 1.5
One-Year Tax Cut for Higher-Income People
CBO: 0.2 to 0.6
Zandi: 1.03 for across the board income tax cuts
(Tax cuts for lower- and middle-income people tend to be spent faster than cuts for higher-income people.)
Zandi's numbers fall consistently in the middle of the CBO's range.

Monday, May 24, 2010

Martin Gardner: 1914-2010

Martin Gardner, who wrote about mathematical puzzles, philosophy, magic tricks, Lewis Carroll and charlatans pitching their improbable theories of paranormal phenomena, died last Saturday at the age of 95.
As the
New York Times obituary reports, Gardner had an impressive fan club:
W. H. Auden, Arthur C. Clarke, Jacob Bronowski, Stephen Jay Gould and Carl Sagan were admirers of Mr. Gardner. Vladimir Nabokov mentioned him in his novel “Ada” as “an invented philosopher.”
Stephen Jay Gould, the evolutionary biologist, called Mr. Gardner “the single brightest beacon defending rationality and good science against the mysticism and anti-intellectualism that surround us.”
Gardner was incapable of writing a fuzzy sentence. In an essay titled "Computers Near the Threshold," found in his collection, The Night Is Large, he makes a clear and compelling case against the view that mathematics is just a human construct:
As I have said before, if two dinosaurs met two others in a forest clearing, there would have been four dinosaurs there—even though the beasts were too stupid to count and there were no humans around to watch. I believe that a large integer is prime before mathematicians prove it prime. I believe that the Andromeda galaxy had a spiral structure before humans arose on Earth to call it a spiral.
Gardner's clear prose is evidence of clear thinking. Douglass Hofstadter, who took over Gardner's space in Scientific American, describes his first encounter with Fads and Fallacies in the Name of Science, Gardner's acerbic critique of pseudoscience:
This "Martin Gardner" person was wielding common sense as a surgeon wields a knife—and occasionally twisting the knife with glee. It was probably the first time I had realized that systematic and critical thinking could extend beyond such precise domains as math and physics, and could demolish ideas in far hazier fields with great power.
Martin Gardner will be remembered for many years to come; he even had an asteroid named after him. Presumably the asteroid will obey the laws of mathematics long after Martin Gardner is forgotten and humans have stopped calculating its orbit.
Photo: Wikipedia

Saturday, May 22, 2010

TommyWonk on the Great Green Home Show on WDEL Today

I am the guest today on the Great Green Home Show on WDEL, 1150 AM, today at noon. Hosts Paul Hughes and Doug Hunt and I talk about recycling, climate change, the economics of renewable energy and environmental organizing in Delaware. Paul and Doug put on a lively show.
If you're not by your radio at noon, you can listen to archived shows online.

Friday, May 21, 2010

More on the Wall Street Reform Bill

In my latest piece at the Guardian, I take a look at the passage of S.3127, the Restoring American Financial Stability Act of 2010:
Legislation usually becomes watered down as it winds its way through the maze of committee markups and amendments. But this bill got stronger as the process unfolded, particularly after the Goldman Sachs scandal involving mortgage-backed securities came to light. The firm's abysmal performance in front of a Senate committee reminded people why Wall Street needs adult supervision.
For instance, the bill incorporates the Volcker Rule, which restricts the ability of banks to trade on their own account. Unfortunately, repeal of the Glass-Steagall Act of 1933, which erected a barrier between commercial banking and investment banking never even got voted on.
Passage of the bill represents a clear victory for Obama and the Democrats, and a political problem for Republicans:
The effort to reform Wall Street has put Republicans in a tight spot. The party's traditional pro-business stance has been intensified by the Tea Party movement's antipathy towards Obama's activist approach to governing. Wall Street reform has created a conflict in the GOP between its growing libertarian impulses and its attempts to tap populist sentiment. For their part, Democrats will be more than happy to campaign on getting tough on Wall Street.

Thursday, May 20, 2010

Wall Street Reform Passes the Senate

The U.S. Senate tonight passed the financial reform bill 59 to 39. The New York Times reports that President Obama directly tied Wall Street reform to the recession from which we are still recovering:
“The recession we’re emerging from was primarily caused by a lack of responsibility and accountability from Wall Street to Washington,” Mr. Obama said, adding, “That’s why I made passage of Wall Street reform one of my top priorities as president, so that a crisis like this does not happen again.”
The Times also has a handy rundown of what's in and what's out of the bill as passed by the Senate. The list doesn't include some big items that would have had to make it on the bill as second order amendments. But things could still change. Some amendments could be dropped in conference committee and some provisions could be inserted.
Stay tuned.

Tuesday, May 18, 2010

GM Turns a Profit

General Motors, which was all but given up for dead a year ago, announced that it turned a profit in the quarter ending March 31, and expects to post a profit for the full year. The New York Times has the numbers:
G.M. reported first-quarter earnings of $865 million as its revenue surged 40 percent, to $31.5 billion.
GM was last profitable in 2004. Chrysler, which posted a relatively small loss of $197 million in the quarter, also expects to post a profit for the year.
In March of last year, GM's
annual report (its last as a publicly traded company) included the chilling caveat, "There is substantial doubt about our ability to continue as a going concern." Last June the company entered bankruptcy, a procedure that seemed unthinkable just a few months earlier.
There were critics who didn't think it would work. There were others who didn't want it to work. The hard right wing was so incensed that
some began calling for a boycott of "Government Motors."
Libertarians complained about heavy handed tactics, such as forcing Rick Wagoner out as CEO and the reworking of existing contracts in bankruptcy. But isn't that what bankruptcy is for? These complaints focused largely on the treatment of bondholders, though all classes of stakeholders—workers, suppliers and dealers—saw contracts reopened or even cancelled. The U.S. auto industry will survive, though many thousands have lost their jobs, and GM and Chrysler both closed up shop in Delaware.
Those who opposed the rescue of GM and Chrysler were willing to see the Big Three reduced to just Ford to the cost of hundreds of thousands of more jobs. Without the rescue of GM and Chrysler, unemployment certainly would have climbed higher and the recession would be deeper and longer. I understand some opposed the rescue, either on principle or for political reasons. Perhaps you'd like your recession back.

GM has paid back the $6.7 billion loan from the federal government, which still owns 61 percent of the company. With sales climbing, and the company turning a profit, the government might even make money on its investment.

Monday, May 17, 2010

GDP and Well Being

The New York Times Magazine has an interesting account of attempts to replace (or at least supplement) GDP with measures that more completely capture well being, including measures of social and environmental capital. Economist Joseph Stiglitz offers a car metaphor:
Suppose you’re driving, Stiglitz told me. You would like to know how the vehicle is functioning, but when you check the dashboard there is only one gauge. (It’s a peculiar car.) That single dial conveys one piece of important information: how fast you’re moving. It’s not a bad comparison to the current G.D.P., but it doesn’t tell you many other things: How much fuel do you have left? How far can you go? How many miles have you gone already? So what you want is a car, or a country, with a big dashboard — but not so big that you can’t take in all of its information.
I wrote about the shortcomings of GDP last summer:
Only God can make a tree, but it doesn't have value in GDP until someone cuts it down. If I cut down a tree or destroy an entire mountain and burn it for heat, GDP is increased. But if I make my home more energy efficient, and don't have to burn that wood or that coal, the savings don't show up in GDP—at least not directly.
As I wrote in February, GDP growth has outstripped energy consumption since WW II. Energy intensity, the amount of energy input required to support a dollar of economic output, has fallen by half since 1949.

Saturday, May 15, 2010

What Comes After Plan B

It seems that no one knows how bad it is or what to do about it. The New York Times reports that far more oil is streaming into the Gulf of Mexico than was first reported:
The figure of 5,000 barrels a day was hastily produced by government scientists in Seattle. It appears to have been calculated using a method that is specifically not recommended for major oil spills.
As the oil industry ponders what comes after Plan B, Talking Points Memo notes that Obama is sending in a team to try to fix the mess:
As BP's high-priced industry experts flail, the president has turned to a rag-tag band of big-think scientific renegades, and sent them on a mission to somehow MacGyver a way to stop up the leak -- before it's too late.
OK, maybe that's going a bit far. In fact, the news that Obama and his energy secretary, Steven Chu, have sent a team of leading physicists and engineers to the Gulf to work with BP offers further evidence of the administration's essentially technocratic approach to governance, and its faith in knowledge-based expertise.
TPM describes the the team: the Old Hand, the Establishment Man, the Maverick Genius, the No-Nonsense Engineer and the What-Am-I-Doing-Here? Guy.
But life is not a movie script. In reality, we have a disaster on our hands that nobody knows how to stop, and the crude oil will continue to gush for who knows how long.
The breakdown in the technical safeguards was made possible by a breakdown in regulatory safeguards, a practice Obama has promised to end:
Reacting to reports that federal regulators allowed extensive offshore drilling without first demanding the required environmental permits, the White House and the Interior Department said Friday that there would be a review of all actions taken by the Minerals Management Service, the agency responsible for offshore rigs, under the National Environmental Policy Act.
The law, enacted after the Santa Barbara oil spill in 1969, mandates that federal agencies must complete a thorough environmental assessment before approving any major project, especially one including offshore drilling.
The minerals service short-circuited the process when it granted hundreds of recent drilling permits, according to documents and current and former government officials.

Wednesday, May 12, 2010

SB 234 Passes the House

Senate Bill 234, which will make curbside recycling a reality for every household in Delaware, passed the House last night by a vote of 26 to 12.
House Republicans offered seven "friendly" amendments. A friendly amendment is one offered by a bill's supporters. By that definition, only one amendment, offered by Tom Kovach, could be considered friendly. The authors of the other amendments, Dick Cathcart, Greg Lavelle, Bill Oberle and Daniel Short, did not vote for the bill. Bill sponsor Mike Mulrooney politely but firmly described each amendment in turn as unfriendly.

Six amendments were defeated and a seventh, to require a 3/4 vote instead of a 3/5 vote was laid on the speaker's table after a ruling from Speaker Bob Gilligan rendered it moot. Amendment sponsor Bill Orberle warned of a court challenge to the bill.
At one point former Delaware Solid Waste Authority CEO N.C. Vasuki took the floor to speak to speak in favor of an amendment that would have eliminated the fee and the program's funding entirely. In a way his appearance signified the changing of the guard on solid waste policy in Delaware; the DSWA has been solidly behind the bill.
DNREC secretary Collin O'Mara spoke more about the economics of recycling than about the environmental benefits. In response to Vasuki's comments, O'Mara described the cost of not acting to expand recycling, citing hundreds of millions being invested in landfills over the last twenty years.
SB 234 now goes to Governor Jack Markell for his signature.
By the way, Jason at Delaware Liberal has posted a podcast with me on this subject recorded last night.

Tuesday, May 11, 2010

The Caesar Rodney Institute's Bad Math on Recycling

The Caesar Rodney Institute has circulated another piece of analysis on Senate Bill 234. It's called "Universal Recycling Bill Cost/Benefit Analysis Doesn’t Add Up" and it was authored by David T. Stevenson, senior fellow at the Caesar Rodney Institute, whose previous alarm about the mythical trash police I critiqued several days ago.
His new analysis hasn't been posted online, but his most startling result — that SB 234 would take 65 years to break even — has already been picked up by
I have found three fundamental flaws in his work, and conclude that it is his analysis that doesn’t add up.
Mr. Stevenson’s analysis uses participation rates and cost estimates of older and far less efficient programs to project the success and cost of universal curbside recycling. He compounds these errors by offering a lowball estimate of the cost of landfilling. These three errors each amount to about an order of magnitude, and together render his conclusions almost completely unreliable.
The first error is his assertion that SB 234 would increase diversion by only 3 percent, or 13,500 tons a year — an absurdly low projection. Experience shows us that regular single stream curbside recycling quickly pays off in terms of near universal participation.
The City of Wilmington saw its diversion rate jump quickly above 30 percent when it instituted single stream curbside recycling — without the need to call in the "trash police" we have been warned of.

The second error is his use of the current costs of volunteer curbside recycling, $108 per household per year, to project the costs of universal single stream program — a figure that is overblown by an order of magnitude.
Wilmington’s net cost per household, including averted tipping fees, is currently $8 per household per year. When commodity prices recover, that net cost will drop to $3. And of course, higher tipping fees will eventually erase any remaining difference.
This leads us to a third fundamental flaw in his analysis: an absurdly low estimate of the cost of landfilling, which he assumes to be only $5 per ton — about 8 percent of the current tipping fee. Landfills are not renewable resources. But the analysis assumes that landfill space will never run out and that the cost of landfilling will never go up.
If we fail to slow landfill accumulation and Cherry Island Landfill fills up, we would face the expensive prospect of spending several hundred million dollars to build a replacement — if a site can be found in northern Delaware. I have calculated that postponing the need to replace Cherry Island Landfill (at a cost of $250 million) through a vigorous recycling program would create present value savings of about $23 million.
And if Cherry Island closes and a replacement cannot be found in New Castle County, we could see a daily parade of trash trucks — one every minute, nine hours day, seven days a week — running down Route 1 to downstate Delaware.

We've seen this tactic before in the fight to bring wind power to Delaware. Opponents of environmental progress offer the most exaggerated costs and minimized benefits, while hoping that no one will bother to check their math.
SB 234 is again number one on the House agenda for today. I'm hoping the bill gets the full debate it deserves, without too much nonsense being injected into the proceedings.

Monday, May 10, 2010

SB 234 and the House

What can we expect when Senate Bill 234 comes up on the House agenda tomorrow?
First, I think it will come up. House Republican leader Dick Cathcart said he needed a few days to allow members to offer amendments. I know of one being drafted, and there may be others, so Cathcart won't have any other reason to try to delay further. The three members of his caucus who signed on a co-sponsors of SB 234 will not want to hold up the bill much longer.
Once it does hit the floor, I would look for the same complaints about the 4 cent fee being a tax (often spelled in all caps in comments on this blog and elsewhere) and the mythical trash police.
One amendment being prepared would retain source separated handling instead of the single stream system proposed in SB 234. I am convinced this would be a mistake.
Simply put, a source separated system would be less effective and more expensive than the single stream system envisioned in SB 234.
It would be less effective because participation goes up when consumers don't have to separate. It would be more expensive because separate handling and processing increases costs at every step of the value chain.
The City of Wilmington uses the same trucks, same crews and same routes for recyclables as for trash. You cannot reduce handling costs any further. Modern MRFs (Multiple Recycling or Recovery Facilities) have proven to be a cost effective way of separating materials for reuse.
I don't think proponents of source separated recycling are wrong. It's been the standard method for a long time. I and many others dutifully delivered bottles, cans and newspapers to the DSWA's igloos for years. But I have changed my mind as I have learned more about the advantages of single stream recycling. In particular, I have seen the system boost participation and lower handling costs in Wilmington.

Others in favor of source separated handling, like the out of state Glass Bottle Institute, want to retain source separated handling of glass to protect their commercial interests. I see no reason to maintain an inefficient system to keep them happy.
I have previously noted the extensive meetings, discussion and consultations that have led to this bill over the last months and years. One or more recycling skeptics will offer amendments, but at the end of the day I hope and expect the House to call the roll and put SB 234 to a vote.

Saturday, May 08, 2010

Are Trash Police in Delaware’s Future?

So reads the breathless headline in a release two weeks ago from the Caesar Rodney Institute.
Its author, David T. Stevenson, described as a senior fellow of the Center for Economic Policy and Analysis at the Caesar Rodney Institute, doesn’t let up in the second paragraph:
Delaware Senate Bill 234 doesn’t authorize fines or enforcement on individuals, yet.
Actually, the bill doesn't authorize fines or enforcement on individuals, period, full stop. To suggest otherwise is sheer sophistry.
The analysis publishes some numbers based on the performance of old programs that do not benefit from the efficiencies and economies of scale that universal single stream curbside recycling has achieved across the country. The author uses the DSWA's current recycling costs and concludes that it represents an effort to "hide the true cost of recycling from consumers.”
What he doesn't mention is that SB 234 would replace the DSWA's inefficient system with a much more cost effective single stream system, and get the DSWA out of the collection business altogether. To use the costs of the old system to project the costs of the new system borders on analytical malpractice.
Universal single stream collection sharply increases participation and greatly reduces the cost of handling at every step along the value chain. Wilmington's diversion rate shot up above 30 percent within a couple of months, and has remained steady since. The city is currently paying a net cost of about $8 per household per year in the face of a very bad commodities market, while using the same trucks and same crews that collect trash.
The argument that recycling would create “hidden costs” for consumers might sound familiar to those who remember the wind power debate. Opponents offered spurious and often wildly inaccurate numbers about the cost and effectiveness of wind power.
These arguments didn’t keep Delaware from approving wind power, and it should not be allowed to keep us from adopting the most efficient and cost effective method for instituting statewide recycling.

Friday, May 07, 2010

SB 234 Blocked

As the News Journal reports, the House Republican caucus blocked a scheduled vote on Senate Bill 234, which would institute statewide curbside recycling in Delaware. Why? House minority leader Dick Cathcart complained that House Republicans have been left out of the loop:
"We are sick of it," Cathcart said afterward, noting that the partisan blockade of S.B. 234 was intended as a demand for "simple courtesy" and a call for bipartisanship. "We want to be participants in the process. Not spectators."
His complaint rings a little hollow given that three members of his caucus (Thomas Kovach, Joseph Miro and Michael Ramone) are signed on as co-sponsors.
Jack Markell announced his intention to work with all sides on recycling when he vetoed the UnBottle Bill last July. He presented his plan in January, and refined it over the following months. A draft bill was circulated for weeks before being formally introduced last month. SB 234 was the subject of lengthy hearings of the relevant Senate and House committees.
Cathcart says he needs time to have unspecified "third parties" review the bill, which has broad support from the business and environmental communities. Most of Delaware's environmental organizations are behind the bill, though some have expressed understandable reluctance to give up the bottle deposit system. The relevant commercial interests are on board, including retailers, grocery stores, restaurants, beverage distributors, independent trash haulers and the Delaware Solid Waste Authority.
Lobbyist Dave Swayze last week complained that his client, the out of state Glass Bottle Institute, was not given "a seat at the table." The table has been set and all parties invited for months and even years.
Recycling bills have been introduced in every legislative session for years. The Recycling Public Advisory Committee has been meeting with all sides since its inception.
I first produced an economic analysis for the Citizens Solid Waste Task Force in 2006. I first met the leaders of the Maryland-Delaware Solid Waste Association when they attended the first Delaware Environmental Summit in January, 2009. They've been at the table ever since.
The Zero Waste Working Group has been meeting with environmental and industry leaders since last year. The DSWA consulted with all sides in updating its Solid Waste Plan. I have attended informal meetings with environmental and beverage and bottling industry leaders to try to come to terms on the issue. The governor's plan is the product of meetings with business and environmental leaders. Leg Hall is swimming with people who have been at the table, including lawmakers from both sides of the aisle.
I don't think that Cathcart can hold his caucus together on blocking the bill for more than a few days. Let's hope last minute efforts to block a vote don't derail the best shot we have ever had at making statewide recycling a reality in Delaware.
Update: I will discuss SB 234 with Allan Loudell of WDEL, 1150 AM, at 5:33 this evening.

Thursday, May 06, 2010

SB 234 Goes to the House Floor

Senate Bill 234, which would institute statewide curbside recycling for Delaware, has been released from committee and is number one on the House agenda for today. I would expect to hear the same arguments about fees versus taxes and the mythical trash police.
We are one roll call from making statewide recycling a reality in Delaware. Stay tuned.

Wednesday, May 05, 2010

House Committee Takes Up SB 234

The House Natural Resources Committee meets today at noon to discuss Senate Bill 234, the bill to institute statewide curbside recycling to Delaware. I expect the committee will hear some of the same arguments about the four cent fee being a sales tax and the mythical trash police.
SB 234 has broad support from the business and environmental communities. Most of Delaware's environmental organizations are behind the bill, though some have expressed understandable reluctance to give up on the bottle deposit system. The relevant commercial interests are on board, including retailers, grocery stores, restaurants and beverage distributors. We are hearing some pushback from out of state glass interests, who seem to prefer source separated recycling. SB 234 would institute single stream recycling, which has been shown to boost participation and greatly reduce handling costs. The consensus was reinforced by
the strong 17 to 3 majority the bill received in the Senate last week. SB 234 should be released from committee and placed on the House agenda at the earliest possible date.

Monday, May 03, 2010

The Solar Dynamics Observatory

You think it was hot here this weekend?
The Solar Dynamics Observatory (SDO) captured this ultraviolet image of solar flares on March 30. The SDO was launched in February and is safely parked in geosynchronous orbit, where it will gather data on how the Sun's activity affects the Earth.