Category Archives: Business

Measles, anti-vaxers, and the pious lies of the CDC.

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Measles is a horrible disease that contributed to the downfall that had been declared dead in the US, wiped out by immunization, but it has reappeared. A lot of the blame goes to folks who refuse to vaccinate: anti-vaxers in the popular press. The Center for Disease Control is doing its best to promote to stop the anti-vaxers, and promote vaccination for all, but in doing so, I find they present the risks of measles worse than they are. While I’m sympathetic to the goal, I’m not a fan of bending the truth. Lies hurt the people who speak them and the ones who believe them, and they can hurt the health of immune-compromized children who are pushed to vaccinate. You will see my arguments below.

The CDC’s most-used value for the mortality rate for measles is 0.3%. It appears, for example, in line two of the following table from Orenstein et al., 2004. This table also includes measles-caused complications, broken down by type and patient age; read the full article here.

Measles complications, death rates, US, 1987-2000, CDC.

Measles complications, death rates, US, 1987-2000, CDC, Orenstein et. al. 2004.

The 0.3% average mortality rate seems more in tune with the 1800s than today. Similarly, note that the risk of measles-associated encephalitis is given as 10.1%, higher than the risk of measles-diarrhea, 8.2%. Do 10.1% of measles cases today produce encephalitis, a horrible, brain-swelling disease that often causes death. Basically everyone in the 1950s and early 60s got measles (I got it twice), but there were only 1000 cases of encephalitis per year. None of my classmates got encephalitis, and none died. How is this possible; it was the era before antibiotics. Even Orenstein et. al comment that their measles mortality rates appear to be far higher today than in the 1940s and 50s. The article explains that the increase to 3 per thousand, “is most likely due to more complete reporting of measles as a cause of death, HIV infections, and a higher proportion of cases among preschool-aged children and adults.”

A far more likely explanation is that the CDC value is wrong. That the measles cases that were reported and certified as such are the ones that are the most severe. There were about 450 measles deaths per year in the 1940s and 1950s, and 408 in 1962, the last year before the MMR vaccine was developed and by Dr. Hilleman of Merck (a great man of science, forgotten). In the last two decades there were some 2000 measles cases reported US cases but only one measles death. A significant decline in cases, but the ratio does not support the CDC’s death rate. For a better estimate, I propose to divide the total number of measles deaths in 1962 by the average birth rate in the late 1950s. That is to say, I propose to divide 408 by the 4.3 million births per year. From this, I calculate a mortality rate just under 0.01% in 1962, That’s 1/30th the CDC number, and medicine has improved since 1962.

I suspect that the CDC inflates the mortality numbers, in part by cherry-picking its years. It inflates them further by treating “reported measles cases.” as if they were all measles cases. I suspect that the reported cases in these years were mainly the very severe ones. Mild case measles clears up before being reported or certified as measles. This seems the only normal explanation for why 10.1% of cases include encephalitis, and only 8.2% diarrhea. It’s why the CDC’s mortality numbers suggest that, despite antibiotics, our death rate has gone up by a factor of 30 since 1962.

Consider the experience of people who lived in the early 60s. Most children of my era went to public elementary schools with some 1000 other students, all of whom got measles. By the CDC’s mortality number, we should have seen three measles deaths per school, and 101 cases of encephalitis. In reality, if there had been one death in my school it would have been big news, and it’s impossible that 10% of my classmates got encephalitis. Instead, in those years, only 48,000 people were hospitalized per year for measles, and 1,000 of these suffered encephalitis (CDC numbers, reported here).

To see if vaccination is a good idea, lets now consider the risk of vaccination. The CDC reports their vaccine “is virtually risk free”, but what does risk-free mean? A British study finds vaccination-caused neurological damage in 1/365,000 MMR vaccinations, a rate of 0.00027%, with a small fraction leading to death. These problems are mostly found in immunocompromised patients. I will now estimate the neurological risk for actual measles based on the ratio of encephalitis to births, as before using the average birth rate as my estimate for measles cases; 1000/4,300,000 = 0.023%. This is far lower than the risk the CDC reports, and more in line with experience.

The risk for neurological damage from measles that I calculate is 86 times higher risk than the neurological risk from vaccination, suggesting vaccination is a very good thing, on average: The vast majority of people should get vaccinated. But for people with a weakened immune system, my calculations suggest it is worthwhile to not immunize at 12 months as doctors recommend. The main cause of vaccination death is encephalitis, but this only happens in patients with weakened immune systems. If your child’s immune system is weakened, even by a cold, I’d suggest you wait 1-3 months, and would hope that your doctor would concur. If your child has AIDS, ALS, Lupus, or any other, long-term immune problem, you should not vaccinate at all. Not vaccinating your immune-weakened child will weaken the herd immunity, but will protect your child.

We live in a country with significant herd immunity: Even if there were a measles outbreak, it is unlikely there would be 500 cases at one time, and your child’s chance of running into one of them in the next month is very small assuming that you don’t take your child to Disneyland, or to visit relatives from abroad. Also, don’t hang out with anti-vaxers if you are not vaccinated. Associating with anti-vaxers will dramatically increase your child’s risk of infection.

As for autism: there appears to be no autism advantage to pushing off vaccination. Signs of autism typically appear around 12 months, the same age that most children receive their first-stage MMR shot, so some people came to associate the two. Parents who push-off vaccination do not push-off the child’s chance of developing autism, they just increase the chance their child will get measles, and that their child will infect others. Schools are right to bar such children, IMHO.

I’ve noticed that, with health care in, particular, there is a tendency for researchers to mangle statistics so that good things seem better than they are. Health food: is not necessarily so healthy as they say; nor is weight loss. Bicycle helmets: ditto. Sometimes this bleeds over to outright lies. Generic modified grains were branded as cancer-causing based on outright lies and  missionary zeal. I feel that I help a bit, in part by countering individual white lies; in part by teaching folks how to better read statistic arguments. If you are a researcher, I strongly suggest you do not set up your research with a hypothesis so that only one outcome will be publishable or acceptable. Here’s how.

Robert E. Buxbaum, December 9, 2018.

China worse than the US in CO2 per output

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CO2 per year, 1965-2017, China and developed world

CO2 output per year, 1965-2017, China and developed world

For the last decade at least, China has been the industrial  manufacturer to the world. If not for Chinese shoes, the US would go barefoot. if not for Chinese electronics, Americans would be without iPhones, laptops, and TVs. China still trails the US and Europe in banking, software, movies and the like, but relying on China for manufactured goods is a dangerous position for the free world economically, and it’s not much better in terms of pollution.

China is among the world’s worst polluters. It burns coal for power to an extent that the air quality of China’s major cities would be unacceptable most everywhere else. On most days, it is thick with a yellow and grey haze. By 1969 China had passed the US and the European union in terms of CO2 production. And, as 2017, they produce nearly three times as much CO2 as the USA, four times more than the entire European Union. While China claims an interest in changing, the amount of pollution China’s CO2 output is still growing while ours and the EU’s is decreasing.

Manufacturing in the US, China, EU, Japan, Korea. Source: World Bank.

Manufacturing in the US, China, Germany, Japan, Korea. Source: World Bank.

China’s pollution would not be so bad if it were an efficient manufacturer, but there is a lot to suggest that it is not. China produces 50% more industrial goods than the US, but employs far more man hours, and generates more than three times the  CO2. Even in a fairly developed industry like steel, the US uses fewer man hours per ton and generates less CO2. I’m thus drawn to conclude that US companies off-load work to China mainly to get around US labor and pollution laws. Alternately, they off-load manufacture to gain entry to the Chinese market, a market that is otherwise closed to them. When US companies do this, they benefit the corporate managers and owners, but not the US worker. 

The hope (expectation) is that president Trump’s tariffs on Chinese goods will decrease the wage advantage of manufacturing in China, and will decrease the amount of US goods manufactured there. Some of that production, I expect, will move to the US, some will remain in China, and will be imported at a higher price-point. I expect a net decrease in CO2 as the US appears to be the more efficient producer, and because fewer ships will be crossing the Pacific bringing Chinese goods to the US. I expect some increase in tax revenue to the US, and some price inflation as well, as importers pass along the increased cost of Chinese goods. Overall, I think this is an acceptable trade-off, but what do I know.

Robert Buxbaum, November 29, 2018

Less than 1 year to the crash

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Stock market crashes happen for a reason, and generally the reason is that owning stock is seen as less profitable than owning bonds, gold, guns, or hundred-dollar bills stuffed into one’s mattress. For this essay, I thought I might explain the reasoning behind the alarm bells that virtually every economist has been sounding. For the last year and a half they’ve been sure a severe correction is imminent. The reason has to do with price and predictions of profitability.

Let’s begin with Nobel Laureate economist, Paul Krugman of the New York Times. He has been predicting severe job losses, and a permanent stock collapse since Trump’s election in November 2016. Virtually every week he announces that the end is near, and every month the economy looked better. A lesser man would give up, but he has not. Why? Mostly it’s his hatred of all things Trumpian: Krugman can not accept that Trump could avoid destroying the economy, and con not imagine that any investor would see things otherwise.

Apparently some folks felt otherwise, and caused unemployment to drop and the market to rise. but then, in September 2017, Krugman’s dire predictions were echoed by Robert Schiller, 2013 Nobel winner, and author of a textbook the majority of schools use to teach market analysis. Robert Schiller, has argued that valuations are extremely expensive. “This stock market bears striking similarities to that of 1929. “The market is about as highly priced as it was in 1929,” “In 1929 from the peak to the bottom, it was 80 percent down. And the market really wasn’t much higher than it is now in terms of my CAPE [cyclically adjusted price-to-earnings] ratio. So, you give pause when you notice that.”

What Schiller is referring to is his particular version of the price to earnings ratio, the price of the average stock share divided by the amount of the average earnings per share. Schiller’s CAPE version uses the ten-year, inflation-averaged earnings, rather than today’s earnings, and finds the ratio is high, as the graph below shows. When he made these comments, this ratio was 25, nearly as high as the 1929 peak. The ratio is now higher, 32.74, higher than it stood on “Black Tuesday.” Why this number is important is that the profitability of a stock-share is merely the inverse of the Price/ Earnings ratio. The current ratio, 32.74 suggests that the average dollar’s worth of shares will return about 3.05% (1/32.74 = 3.05%). By comparison, one could buy a five-year treasury bond and get 2.96%. That’s hardly less, and federal bonds are totally safe. More alarming yet, the Federal Reserve has indicated that it will continue to raise interest rates at planned rate of 1%/year for at least the next year. At some point, people will decide bonds are the far better bargain, and will exit stocks en-mass. And then it’s crash-city, or so the theory goes.

The Schiller Price to Earnings ratio as of July 27, 2018. It suggests a crash is past due.

The Schiller Price to Earnings ratio as of July 27, 2018. It suggests a crash is past due.

Shown above is a historical plot of Schiller’s particular version of the price to earnings ratio based on the S+P 500 index, with data going back to 1880. It’s argued that his version using a ten-year, trailing average of corporate profits, is better than the non-adjusted, one year P/E ratio: the version you find in the newspapers. In the newspaper version, the peaks don’t show up until just after the crash because company profits tend to spike along with prices. In this version, profits can’t exactly spike, and  stock crashes show up as valuation peaks. The crash is seen as a consequence to high values of the Schiller P/E.  In terms of CAPE, we are at a more dangerous spot than in 1929. We are more exuberant than in 2008, or when Alan Greenspan warned of irrational exuberance. Schiller: “you give pause when you notice that.”

Schiller Price to earnings ratios are a good predictor of future stock prices. We are past the end of this chart, suggesting a significant loss of stock value ahead.

Schiller Price to earnings ratio plotted versus 20 year stock return. The higher the Schiller P/E, the lower the return. We are past the end of this chart suggesting we should expect a significant loss of capital value.

Stock pull-backs are sometimes gradual, as in 1968 through 1982, but more often the pullback is sudden, a crash. People typically expect a stock return in excess of bonds of 2% or so. They sometimes accept less, and sometimes demand more. Schiller calls the cause “animal spirits.” The fear is that investors will suddenly go back to the historical norm and demand of stocks 2% more return than the 3.05% they get from bonds. If they’d suddenly demand a 5.05% return on stocks to balance, the stock prices would fall by 40%. If the crash happened now, it would take a 40% drop in stock prices to raise the earnings ratio to 5.05%. But if they wait a year, until after the Fed raised the interest rate to 3.5%, we’d expect a greater pull-back 50% or so, a major crash. As early as last year, Schiller has advised moving out of US stock into foreign stocks, particularly European, noting that the US market was  the most expensive in the world. I don’t agree that Europe is a safe haven, but agree that a crash is likely given current return rates, snd the treasury plan to raise interests by 1% over the next year.

Schiller claims that the reason the recession has not hit so far is that people trust Trump. I would not have expected a comment like that from a Yale economist, especially given the constant carping from the TV news. Still Schiller may be on to something. The stock market went up dramatically after the Trump election. There are some advantages to a narcissist president. It also seems Trump’s tariffs are helping to provide jobs, as I predicted. In this quarter, the GDP rose at an impressive 4.1% rate. Gains came even where you’d expect otherwise. US soybean exports rose by 9600% despite a boycott from China. If the economy keeps going like this it might be as much as a year before the correction. A likely scenario is that the Fed raises interest rates, growth slows to 2.5% or less, and with bond interest rates at 3.5% people will get out of stocks in a big way. My expectation is that China will suffer too, and with it Europe. With luck, the Fed will then lower interest rates to 2%, or so. In my opinion interest rates should matches the inflation rate, more or less. I don’t know why the Federal Reserve does not do this, but instead swings its interest rates from very high to low, now aiming for a far excess of inflation rate. I suspect it’s mistake, one that we will pay for soon.

Robert Buxbaum, July 29, 2018. My only other stock analysis post was on bitcoin, In December 2017 I thought it had gone about as far as it would go. Shortly there-after bitcoin value crashed. I hope I don’t cause a crash

The Great, New York to Paris, Automobile race of 1908.

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As impressive as Lindberg’s transatlantic fight was in 1926, more impressive was George Schuster driving and winning the New York to Paris Automobile race beginning in the dead of winter, 1908, going the long way, through Russia. As of 1908, only nine cars had ever made the trip from Chicago to California, and none had done it in winter, but this race was to go beyond California, to Alaska and then over the ice through Russia and to Paris. Theodore Roosevelt was president, and Americans were up to any challenge. So, on February 12, 1908 there congregated in Times Square, New York, a single, US-made production car, along with five, specially made super-cars from Europe; one each from Italy and Germany; and three from France. The US car, a Thomas Flyer (white), is shown in the picture below. The ER Thomas company sent along George Schuster, as an afterthought: he was a mechanic and test-driver for the company, and was an ex bicycle racer. The main driver was supposed to be Montague Roberts, a dashing sportsmen, but the fellow dropped out in Cheyenne, Wyoming. Schuster reached the Eiffel tower on July 30, 1908, 169 days after leaving New York. The Germans and Italians followed. None of the French super-cars got further than Vladivostok, and one dropped out after less than 100 miles.

The race was sponsored by The New York Times and Le Matin, a Paris newspaper. They offered a large trophy, a cash prize of $1000, not enough to pay for the race, and the prospect of fame. The original plan was for drivers to go from New York to San Francisco, then to Seattle by ship, and Northern Alaska, driving to Russia across the Arctic ice. That plan was abandoned when Schuster, the first driver to reach Alaska, discovered ten foot snows outside of Valdez. The race was modified so that travel to Russia would be by ship. Schuster took his Thomas to Russia from Alaska, the other two drivers reached Russia from Seattle by way of Japan. Schuster was given a bonus of days to account for having taken the longer route. Because of his detour, he was the last to arrive in Russia. From Japan, the route was Vladivostok, Omsk, Moscow, St. Petersburg, Berlin, and Paris, 21,900 miles total; 13,341 miles driven. Schuster drove most of those 13,341 miles, protected by his own .32-caliber pistol, and mostly guided by the stars and a sextant. He’d taught himself celestial navigation as there were no roadmaps, and hardly any roads.

George Schuster driving the Thomas Flyer, the only American entry, and the only production motorcar in the race.

George Schuster driving the Thomas Flyer with another mechanic, George Miller, the Flyer was only American entry, and the only production motorcar in the race. Note that the flag has only 45 stars.

The ship crossing of the Pacific was a good idea given that, even in the dead of winter, global warming meant that the arctic could not be relied upon to be solid ice. As it was, Schuster had to content with crossing the Rockies in deep snow, and crossing Russia in the season of deepest mud. He reached the Eiffel tower at 6 p.m. on July 30, 1908. The German car had arrived in Paris three days ahead of Schuster, but was penalized to second place because the German team had avoided the trip to Alaska, and had traveled some 150 km of the Western US by railroad while Schuster had driven. The Italian team reached Paris months later, in September, 1908. That the win went to the only production car to compete is indicative, perhaps of the reliability that comes with mass production. That Mr. Schuster was not given the fame that Lindberg got may have to do with the small size of the prize, or with him being a mechanic while Lindberg was a “flyer”. Flyers were sexy; even the car was called a flyer. The Times saw fit to hardly mention Schuster at all, and when it did, it spelled his name wrong. Instead the Times headline read, “Thomas Flyer wins New York to Paris Race.” You’d think the car did it on its own, or that the driver was named Thomas Flyer.

The Flyer crossing a swollen river in Manchuria.

Schuster in his Flyer crossing a swollen river in Manchuria.

The Times could not get enough of Montague Roberts; the driver of the first leg was famous and photographic. They tried to get Roberts to drive the last few miles into Paris, “once the roads were good”. And Roberts was the one chosen to drive in the hero-parade in New York, Schuster rode too, but didn’t drive. Schuster was feted by Theodore Roosevelt, though, who said he liked people “who did things.” Schuster said he’d never do a race like that again, and he never did race again.

The race did wonders for the reputation of American automobiles, and greatly spurred the desire for roads, but it did little or nothing for the E.R.Thomas company. Thomas cars were high cost, high power models, and they lost out in the marketplace to Henry Ford’s, low-cost Model T’s. You’d think that, in the years leading up to WWI, the US Army might buy a high cost, high reliability car, but they were not interested, and the Thomas company did little to capitalize on their success. The Flyer design that won the race was discontinued. It was a 60 hp, straight 4 cylinder engine version, replaced by lower cost Flyers with 3 cylinders and 24 hp. Shortly after that, Edwin R. Thomas, decided to drop the Flyer altogether. His company went bankrupt in 1912, and was bought by Empire Smelting. The original Flyer was sold in 1913 at a bankruptcy action, lot #1829, “Famous New York to Paris Racer.”

ER Thomas went on to found another car company, as was the style in those days. Thomas-Detroit went on make similar cars to the Flyer, but cheaper. The largest, the K-30, was only 30 hp. The original Thomas Flyer is now in the National Automobile Museum, Reno Nevada. after being identified by Schuster and restored. Here is a video showing the original Flyer being driven by a grandson of George Schuster. There is a lower-power Thomas Flyer (black) in a back space of the Henry Ford museum (Detroit). Protos vehicles, similar to the one that came in second, were produced for the German military through WWI. Their manufacturer, Siemens, benefited, as did the German driver.

Advertisement for the Protos Automobile, a product of Siemens motor company. The race did not include a production Protos but one made specially for the race.

Advertisement for the Protos Automobile, a product of Siemens motor company. The race did not include a production Protos but one made specially for the race.

The Thomas engine (and the Protos) engine) live on in a host of cars with water-cooled, four-cylinder, straight engines. In 1922, Chalmers-Detroit merged with Maxwell and continued to produce versions of the old Flyer design, now with an internal drive-shaft. The original Flyer was powered via a gear-chain, like a bicycle. In 1928, Maxwell was sold to Chrysler. Chrysler persists in calling their high-power, four-cylinder engines by the name Chalmers. As for Schuster, when ER Thomas closed its doors, he had still not been paid for his time as a race driver. He went to work for Pierce-Arrow, another maker of large, heavy vehicles. The “cheaper by the dozen” family (two parents, 12 kids) drove a Pierce-Arrow.

The Great race appears in two documentaries and two general audience movies, both comedies. The first of these was Mishaps of the New York–Paris Race, released by Georges Méliès, July 1908, just about as the Flyer was entering Paris. The second movie version  “The Great Race” was released in 1965. It’s one of my favorite movies, with Jack Lemon as the Protos driver (called Dr. Fate in the movie), Tony Curtis as “The Great Leslie”, the Flyer driver. For the movie, the Flyer is called “The Leslie”, and with Natalie Wood as a female reporter who rides along and provides the love interest. In the actual race reporters from the New York Times, male, traveled in the Flyer’s rear seat sending stories back by carrier pigeon.

Path of the Great Race

Path of the Great Race

As a bit of fame, here’s George Schuster in 1958 on “What’s my secret.” He was 85, and no one knew of him or the race. Ten years later, in 1968, Schuster finally received his $1000 prize, but still no fame. A blow-by-blow of the race can be found here, in Smithsonian magazine. There is also an article about the race in The New York Times, February 10, 2008. This article includes only two pictures, a lead picture showing one of the French cars, and another showing Jeff  Mahl, the grandson of George Schuster, and a tiny bit of the flyer. Why did the New York Times choose these pictures? My guess is it’s the same reason that they reported as they did in 1908: The French car looked better than the Flyer, and Jeff Mahl looked better than George Schuster.

Robert Buxbaum, July 20, 2018. What does all this mean, I’ve wondered as I wrote this essay. There were so many threads, and so many details. After thinking a bit, my take is that the movie versions were right. It was all a comedy. Life becomes a comedy when the wrong person wins, or the wrong vehicle does. A simple mechanic working for a failing auto company beat great drivers and super cars, surpassing all sorts of obstacles that seem impossible to surpass. That’s comedy, It’s for this reason that Dante’s Divine Comedy is a comedy. When we see things like this we half-choose to disbelieve, and we half-choose to laugh, and because we don’t quite believe, very often we don’t reward the winner as happened to Schuster for the 60 years after the race. Roberts should have won, so we’ll half-pretend he did.

The wealth of nations in beer

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We generally compare the wealth of nations in dollars per capita, but this is a false comparison. You can not eat dollars, and even if dollars can be exchanged for products or other countries’ currencies with minimum cost, the same is not true for their products. A sack of rice in America costs more than in India; you can not easily buy it at the Indian price. Nonetheless we generally measure the wealth of a county as if all products cost the same everywhere. Based on this, we declare that the citizens of Lichtenstein are the richest on the planet, followed by Norway and Denmark. US citizens not far behind, vastly richer than the people of Africa who we picture living on pennies per day. But pennies in Africa buy more than pennies in America; wealth is spent locally, and things are expensive where people have money.

GDP for various countries in pints of beer per person per year in main city bar or restaurant

GDP for various countries in pints of beer per person per year in main city bar or restaurant

To correct for this local value of money effect, some economists modify consider the ratio of per-capita GDP by relation to the cost of a basket of goods. This is called purchasing power parity, or ppp. By this measure, American’s are not as much richer than Africans, but the problem remains that people don’t all buy the same basket of goods. The Economist magazine has thus suggested correcting ppp by choosing a single consumable, the MacDonald’s Big Mac, a standard product available world-wide. The Economist’s “Big Mac Index” is quite good in my opinion, but it could be better, and I decided to make it better by using beer instead of Big Macs.

It strikes me that typical Africans don’t eat Big Macs — the price is out of range. Meanwhile, in rich countries mostly it’s the poor who eat MacDonald’s (and Donald Trump). The advantage of using beer to measure the wealth of nations is it’s something most-everyone consumes across all social strata. A country is wealthy in terms of many pints of beer a person can buy based on his or her, per-capita GDP.

Shown at left is the top countries from a table I made by dividing the GDP per capita by the price of a pint (or half-liter) of local beer as served in a tavern or restaurant of the major city. Measured this way I find Lichtenstein is still the richest country on earth, now followed by Saudi Arabia and the Czech Republic. Norway is no longer among the richest countries — beer is expensive there, as is labor. The Czech Republic, normally considered a middle-to-poor country, is number 3 because of the low cost of its excellent beer. The US is several stages down, just below Denmark, and barely above Hungary and Kazakhstan. The socialist countries: Russia, Cuba, and Venezuela are as poor in beer as they are in dollars. Socialism distributes wealth without creating it.

Number of beers one can buy on a month's minimum wage in Europe

Number of beers one can buy on a month’s minimum wage in Europe, by Reddit:adilu.

By now you’re wondering about my use of per-capita GDP. Perhaps a better comparison — one where socialism looks better would involve the minimum wage. At right I show a map of Europe in terms of the number of beers one can buy per month based on 40 hour weeks at the minimum wage. Several countries are greyed out: Italy, Austria, Sweden, Finland, Lichtenstein, etc. These are mostly rich countries bu have no minimum wage. Based on the data, Belgium’s working classes are the best off, with Ireland and England not far behind. Germany’s workers look like they are doing well, but they don’t really have a minimum wage (the chart, by Reddit editor adieu assumes one based on a proposal). The United States’s minimum worker is poorer in beer (327/month) based on a minimum wage of $7.85 and an average cost of beer about $4/pint (bar + supermarket). He is richer than the French, Poles, Italians, Norwegians, Danes, Austrians and Swedes in beer, and better off than the Turks and Russians too. It’s clear that high minimum wages harm community wealth and job prospects. Though some at the bottom of the work scale are left dry at the bar.

Robert Buxbaum, July 18, 2018. I write these blogs to help me think. If you’d like to see more of the wealth of nations in beer, I’ll be happy to provide.

Trump, tariffs, and the national debt

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My previous post was about US foreign policy, Obama’s and Trumps. This one is about Trump’s domestic policy as I see it. The main thing I see, the pattern is that I think he’s trying to do is pay down the national debt while increasing employment. So far unemployment is down, but borrowing is not. I suspect that a major reason for the low unemployment is that Americans (particularly black Americans) are taking jobs that used to be held by Mexicans. As for US borrowing, it’s still bad. For his first budget, Trump, like all other recent politicians caved to the forces that favor borrow and spend than to pay back. In this century, only Wm. McKinley, Theodore Roosevelt, Taft, Harding, and Coolidge managed to pay down the national debt. But only one man, Andrew Jackson, managed to pay it off completely. Jackson’s picture hangs in the pride of place in the Trump white house, something that I find significant. I suspect that Trump’s tariffs and spats are intended to pay down the debt without raising unemployment, or weakening the military. Andrew Jackson is his idea of “Make America Great Again.”

All recent presidents have raised the national debt. Trump claims he will shrink it.

All recent presidents have raised the national debt. Trump data to April 20, 2018.

As the graph above shows, if Trump plan is to pay down the debt, he is not succeeding. Trump is overspending — at a somewhat slower rate than other recent presidents, but in 1 1/4 year he’s increased the debt by 6.3%, about $1220 B. He’s saved a few billion by reduced payments to the UN, and to the EU for climate studies, and he’s asking NATO to pay more for Europe’s defense, but he’ll have to do a lot more, and the rest of the world is already unhappy with him.

Many US economists — Keynesians – are not happy with him for another reason. They claim that debt is good, and that borrowing increases employment. As proof they note that FDR borrowed and spent heavily though the 1930s,and we got out of the depression. Other economists point out that it took longer in the US to get out of the depression than in many other countries. More recently, under Jimmy Carter, deficit spending created a combination of high inflation and high unemployment, “stagflation,” suggesting that Keynes should be modified to “Neo Keynesians” who claim you can overspend if you don’t outspend the GDP growth rate. Sorry to say, even in these terms, Obama and GW Bush overspent badly, as did Reagan before them (see graph below). Obama raised the debt from 65% of the GDP to its current 105%, and GW Bush raised it from 50% of GDP to 65%. This borrowing did not increase employment, or raise the standard of living for most Americans, though several at the top became fabulously wealthy. As Alan Greenspan noted, “If national borrowing was a path to wealth, Zimbabwe would be the richest country on earth.” I’m more of a hard money man, as Greenspan was, inclined to think that a balanced budget is good, and that tariffs are good too.

Ratio of US government debt to GDP

Ratio of US government debt to GDP

As of June 1, 2018, Trump has imposed ~20% tariffs on five items: wood, steel, aluminum, washing machines, and solar panels. Combined, these items constitute 4.1% of our imports, $130 B/ year. Taxed at 20%, the US will collect $25 B/year. it’s a step, but I suspect that Trump knows that, if tariffs are to wipe out all of our deficit, he’ll have to impose a lot more, about 40% on all of our imports ($3,100 B/year). Trump may yet do this, and may yet cut spending, and put a lot more America to work. My sense is that this is his aim.

The next step in the Trump MAGA plan involves adding another $35B to the list of items being taxed; that’s about 1.1% of US imports (5.2% total). In response, our trade-partners have complained to the press and to the world court, and have imposed their own tariffs — so far on about $100 B of US products, mostly food items, like bourbon and cheese, chosen to hit Republicans in politically – sensitive states: Tennessee and Wisconsin. Canada now taxes US cheese at over 100%. It’s an effort to embarrass Trump and get Democrats elected in 2018. If these tactics don’t work, Trump will impose another round, e.g. on foreign-made cars and motorcycles. I’d also expect him to cut NATO funding unilaterally, too, as a counter-slap to the EU.

US unemployment by race

US unemployment by race, data to May 2018.

Speaking of Keynesian economists, Nobel Laureate economist, Paul Krugman of the New York Times has been predicting severe job losses, and a permanent stock collapse since 2016, and especially following Trump’s election. Virtually every week he announces that the end is near, and every month the economy looks better. But he’s not deterred, and neither are most economists. In a survey of nearly 100 economists by Reuters, 80% said that Trump’s policies will hurt the U.S. economy, and the rest said there would be little or no effect.[1] . So far it looks like they are all wrong. Unemployment is at record lows, particularly for African-Americans (see chart above); we’re adding new jobs at the rate of 200,000 new jobs per month, nearly 0.8% of the population per year. Inflation is a modest 2.3%, GDP growth is excellent, at 3.2% (or an incredible 4.5%). All we need now is a sensible immigration policy plus some healthcare reform, a modified social security tax, and for the economy to stay this way for another 5-10 years. It’s unlikely, but that’s the plan.

Robert Buxbaum, July 5, 2018. I’d hoped to see the employment and deficit numbers for June by now, but it’s not out. I’ve also argued that free trade is half right, as there is a benefit to workers, And there is a certain greatness that comes from paying your bills. Today, the EU offered to lower some auto tariffs if Trump does not move forward.

Most traffic deaths are from driving too slow

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About 40,100 Americans lose their lives to traffic accidents every year. About 10,000 of these losses involve alcohol, and about the same number involve pedestrians, but far more people have their lives sucked away by waiting in traffic, IMHO. Hours are spent staring at a light, hoping it will change, or slowly plodding between destinations with their minds near blank. This slow loss of life is as real as the accidental type, but less dramatic.

Consider that Americans drive about 3.2 trillion miles each year. I’ll assume an average speed of 30 mph (the average speed registered on my car is 29 mph). Considering only the drivers of these vehicles, I calculate 133 billion man-hours of driving per year; that’s 15.2 million man-years or 217,000 man-lifetimes. If people were to drive a little faster, perhaps 10% faster, some 22,000 man lifetimes would be saved per year in time wasted. The simple change of raising the maximum highway speed to 80 mph from 70, I’d expect, would save half this, maybe 10,000 lifetimes. There would likely be some more accidental deaths, but not more accidents. Tiredness is a big part of highway accidents, as is highway congestion. Faster speeds decreases both, decreasing the number of accidents, but one expects there will be an increase in the deadliness of the accidents.

Highway deaths for the years before and after Nov. 1995. Most states raised speeds, but some left them unchanged.

Highway deaths for the years before and after speed limit were relaxed in Nov. 1995. At that time most states raised their speed limits, but some did not, leaving them at 65 rural, 55 urban; a few states were not included in this study because they made minor changes.

A counter to this expectation comes from the German Autobahn, the fastest highway in the world with sections that have no speed limit. German safety records show that there are far fewer accidents per km on the Autobahn, and that the fatality rate per km is about 1/3 that on other stretches of highway. This is about 1/2 the rate on US highways (see safety comparison). For a more conservative comparison, we could turn to the US experience of 1995. Before November 1995, the US federal government limited urban highway speeds to 55 mph, with 65 mph allowed only on rural stretches. When these limits were removed, several states left the speed limits in place, but many others raised their urban speed limits to 65 mph, and raised rural limits to 70 mph. Some western states went further and raised rural speed limits to 75 mph. The effect of these changes is seen on the graph above, copied from the Traffic Operations safety laboratory report. Depending on how you analyze the data, there was either a 2% jump (institute of highway safety) in highway deaths or perhaps a 5% jump. These numbers translate to a 3 or 6% jump because the states that did not raise speeds saw a 1% drop in death rates. Based on a 6% increase, I’d expect higher highway speed limits would cost some 2400 additional lives. To me, even this seems worthwhile when balanced against 10,000 lives lost to the life-sucking destruction of slow driving.

Texas has begun raising speed limits. Texans seem happy.

Texas has begun raising speed limits. So far, Texans seem happy.

There are several new technologies that could reduce automotive deaths at high speeds. One thought is to only allow high-speed driving for people who pass a high-speed test, or only for certified cars with passengers who are wearing a 5-point harness, or only on roads. More relevant to my opinion is only on roads with adequate walk-paths — many deaths involve pedestrians. Yet another thought; auto-driving cars (with hydrogen power?). Computer-aided drivers can have split second reaction times, and can be fitted with infra-red “eyes” that see through fog, or sense the motion of a warm object (pedestrian) behind an obstruction. The ability of computer systems to use this data is limited currently, but it is sure to improve.

I thought some math might be in order. The automotive current that is carried by a highway, cars/hour, can be shown to equal to the speed of the average vehicle multiplied by the number of lanes divided by the average distance between vehicles. C = v L/ d.

At low congestion, the average driving speed, v remains constant as cars enter and leave the highway. Adding cars only affects the average distance between cars, d. At some point, around rush hour, so many vehicles enter the highway that d shrinks to a distance where drivers become uncomfortable; that’s about d = 3 car lengths, I’d guess. People begin to slow down, and pretty soon you get a traffic jam — a slow-moving parking lot where you get less flow with more vehicles. This jam will last for the entirety of rush hour. One of the nice things about auto-drive cars is that they don’t get nervous, even at 2 car lengths or less at 70 mph. The computer is confident that it will brake as soon as the car in front of it brakes, maintaining a safe speed and distance where people will not. This is a big safety advantage for all vehicles on the road.

I should mention that automobile death rates vary widely between different states (see here), and even more widely between different countries. Here is some data. If you think some country’s drivers are crazy, you should know that many of the countries with bad reputations (Italy, Ireland… ) have highway death rates that are lower than ours. In other countries, in Africa and the mid-east death rates per car or mile driven are 10x, 100x, or 1000x higher than in the US. The countries have few cars and lots of people who walk down the road drunk or stoned. Related to this, I’ve noticed that old people are not bad drivers, but they drive on narrow country roads where people walk and accidents are common.

Robert Buxbaum, June 6, 2018.

Al Jazeera, a multi billion-dollar influence buyer

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Given the hand-wringing over the $300,000 spent by Russia to influence the 2016 US election, I thought it worthwhile to point out that Qatar spent roughly 2.5 billion on influence, mostly through Qatar’s news agency, Al Jazeera. Qatar is a Shiite (Shia) Moslem Emirate solely ruled by a Sunni Emir (king). Here’s a joke to help distinguish Sunni from Shia. It is also the 4th largest exporter of natural gas in the world behind Russia, Norway, and Canada. It’s a solid supporter of leftist political causes from anti-climate change to Hamas and Al Qaeda/ ISIS, and it is the host for the FIFA world cup of soccer, 2022. For more about Qatar and the logic of its behavior, see the American Foreign Policy Analysis. Interesting in general, but I’d like to focus on influence buying.

FILE - In this Aug. 20, 2013 file photo, Al Jazeera America editorial newsroom staff prepare for their first broadcast in New York. Shannon High-Bassalik former head of Al Jazeera America’s documentary unit has sued the news network, claiming it is biased against non-Arabs in stories that it produces and how it treats employees. (AP Photo/Bebeto Matthews, File)

Al Jazeera America prepares for its first broadcast from New York, August, 2013. AP Photo/Bebeto Matthews.

The Emir of Qatar is the sole owner of Al Jazeera, a news organization, that he uses as profit-losing, influence machine. It allowed him to support leftist politicians who he believes to be pro-Arab, pro-Muslim Brotherhood, anti-Israel, and anti-American. In Europe he pursues pro-immigration, anti-fracking policies. In conservative, Islamic countries, like Saudi Arabia, Egypt, and Iran, he’s used Al Jazeera to supported free elections to unseat the king, Shah, or military president. Al Jazeera uniformly portrays Qatar and its emir well, helping it get rights to host the FIFA world cup. No other country gets anywhere near such uniform, positive support.

A bit of history: Al Jazeera began operations in Doha, the capital of Qatar in 1996, as an antidote to Saudi Arabia’s arabic-language news outlet, MBC (Mid-East Broadcast Company, now called Al Arabia). By 2003, Al Jazeera was broadcasting in Europe in various EU languages, and had an english language version broadcast out of London, Al Jazeera-English. It is available in the US via cable TV, Channels 100, 200, and 300. In 2013, the Emir of Qatar expanded Al Jazeera directly to the US, paying 1/2 billion dollars for an Emmy-winning, non-profitable, cable news company “Current TV”, partially owned by Al Gore. “Current TV” operated out of San Francisco with a left-leaning, pro-environment message and a modest audience. Their shows include The War Room with Jennifer Granholm (Jennifer is the ex-governor of Michigan), Talking Liberally, The Stephanie Miller Show, and  Viewpoint with Eliot Spitzer. The Emir added a news headquarters in New York and gave it a new name: Al Jazeera America, or AJAM. The old Current TV was retained as AJ+, a video arm. Over the next 5 years the emir spent 2 billion dollars setting up 12 news bureaus in the US with instructions that there was no need for profit, but only for “influence”. It is arguable how much influence he got, but it is clear he didn’t make any profit.

Despite what you might imagine would be the opinions of a petro-monarch, AJAM continues to back Gore’s anti-fracking message. I will speculate this is because he is against US gas because it competes with Qatari gas. AJAM also strongly supports the Muslim Brotherhood, Hamas, and ISIS. Perhaps that’s radical chic (radical sheik?). He’s against any authoritarian ruler that isn’t him.

Trump, his daughter, el Sisi, and the King of Saudi Arabia. No Emir of Qatar.

Trump, his daughter, Ibn-Said (king of Saudi Arabia) and el Sisi, (president of Egypt). Global control with no Emir.

Some notable controversies — I got these from Wikipedia –Ahmed Mansour, a prominent Al Jazeera anchor, is quoted saying that Egyptian president, el-Sisi was “a Jew carrying out an Israeli plot.” Faisal al-Qassim, another Al Jazeera presenter, hosted a segment on whether Syria’s Alawite (Shia) population deserved to be killed en-mass, and in 2014, the channel’s Iraqi affairs editor tweeted approvingly about the Islāmic State killing more than 1,500 air-force cadets in Tikrit, singling out those who were Shia and non-Muslim. Closer to home, they charged a half-dozen athletes with doping, including Peyton Manning, hero of the super bowl. In the end, Shannon High-Bassalik, former head of the documentary unit, also sued claiming bias against non-Arabs in stories and in how it treats employees.

Among Republicans, AJAM became to be known as “The Terror Network”, while they retained some good reputation on left. The Emir bought not only the network, but spent liberally on sympathetic experts, and on academic think tanks. Further, it seems that Al Jazeera writers had no fixed budget or expense limit. The Russians are nowhere near this generous.

In April of 2016, with the world cup coming to Qatar, and American oil reviving, the emir cut AJAM staff by 900 workers. Part of the decision may have been that it looked like he had the 2016 election in the bag. Al Jazeera English remains, still operating out of London, and AJ+, the old Current TV, still operating out of San Francisco. And then Donald Trump was elected 45th US president. AJ / AJ+ was shocked (as was I); and called for protests. Trump, in a publicized meeting with el-Sisi of Egypt (the Jewish Spy), and Salmon al-Saud, (above, 2017) issued a set of 13 demands including that the emir stop to support for Hamas and the Brotherhood, and that he shut Al Jazeera. The emir has not complied, and the world cup is still on for Qatar.

I should mention that the Emir and Putin work together on some things and oppose on others. They both support politicians who oppose oil and gas production while opposing each other on pipeline construction. Qatar backs the pan Arabian pipeline to Turkey, while Russia funds Assad and the PKK (Russia-friendly, Kurdish independents) to block such access. The Emir supports ISS, Hamas, and Turkish Kurds, I suspect, as a way to fight Russia. It’s Byzantine politics in both senses of the word. Given how much Qatar has spent buying influence with Clinton and Gore, I don’t understand why the FBI is so focussed on Trump and Russia.

Robert Buxbaum, May 29, 2018.

New Chinese emperor, will famine not follow

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For most of its 2300 year history, the Chinese empire has rattled between strong leaders who brought famine, and weak leaders who brought temporary reprieve. Mao, a strong leader, killed his associates plus over 100 million by his “great leap forward” famine. Since then, 30+ years, we’ve had some weaker leaders, semi-democracy, and some personal wealth, plus the occasional massacre, e.g. at Tiananmen square, and a growing demographic problem. And now a new strongman is establishing himself with hopes of solving China’s problems. I hope for the best, but fear the repeat of the worse parts of Chinese history.

Two weeks ago, Chairman Xi amended the Chinese constitution to make himself emperor for life, essentially. He’s already in charge of the government, the party, and the military. Yesterday (Tuesday), he consolidated his power further by replacing the head of the banks. The legal system is, in theory, is the last independent part of government, but there is hardly any legal system in the sense of a balance of power. If history is any guide, “Emperor” Xi will weaken the courts further before the year is out. He will also likely remove many or all of his close associates and relatives. It is not for nothing that Nero, Stalin, and Mao killed their relatives and friends — generally for “corruption” following a show trial.

China's Imperial past is never is quite out of sight. Picture from the Economist.

China’s past is never is quite out of sight. Picture from the Economist.

Xi might be different, but he faces a looming demographic problem that makes it likely he will follow the president of the stronger emperors. China’s growth was fueled in part by a one child policy. Left behind is an aging, rural population with no children to take care of the elderly. As top-down societies do not tolerate “useless workers,” I can expect a killing famine within the next 10 years. This would shed the rural burden while providing a warning to potential critics. “Burn the chicken to scare the monkey,” is a Chinese Imperial aphorism. Besides, who needs dirt farmers when we have modern machines.

Lazy beds (feannagan) use only half the soil are for planting. The English experts were sure this was inefficient and land-wasting. Plowing was imposed on Ireland, and famine followed

“Lazy beds” of potatoes were used in Ireland for a century until experts forced their abandonment in the mid 1800s. The experts saw the beds, and the Irish as lazy, inefficient, and land-wasting. Famine followed.

Currently about 40% of the country is rural, about 560 million people spread out over a country the size of Canada or the US. The rest, 60% or 830 million, live concentrated in a few cities. The cities are rich, industrial, and young. The countryside is old, agricultural and poor, salaries are about 1/3 those of the cities. The countryside holds about 2/3 of those over 65, about 100 million elderly with no social safety net. The demographic imbalance is likely to become worse — a lot worse — within the next decade.

What is likely to happen, I fear, is that the party leaders — all of whom live in the cities — will decide that the countryside is full of non-productive, uneducated whiners. They will demand that more food should be produced, and will help them achieve this by misguided science and severe punishments. Mao’s experts, like Stalin’s and Queen Victoria’s, demanded unachievable quotas and academic-based advice that neither the leaders nor the academics had ever tried to make work. Mao’s experts told peasants to kill the birds that were stealing their grain. It worked for a while until the insects multiplied. As for the quotas, the party took grain as if the quotas were being met. If the peasants starved, they starved.

I expect that China’s experts will propose machine-based modern agriculture, perhaps imported from the US or Israel: Whatever is in style at the time. The expert attitude exists everywhere to this day, and the results are always the same. See potato famine picture above. When the famine comes, the old will request food and healthcare, but the city leaders will provide none, or just opioids as they did to ailing Elvis. When the complaining stops the doctor is happy.

China's population pyramid as of 2016. Notice the bulge of 40-55 year olds.

China’s population pyramid as of 2016. Notice the bulge of 40-55 year olds. Note too that there are millions more males (blue) than females (pink).

In single leader societies, newspapers do not report bad news. Rather, they like to show happy, well-fed peasants singing the leaders’ praise. When there’s a riot too big to ignore, rioters are presented as lazy malcontents and counter-revolutionaries. Sympathizers are sent to work in the fields. American academia will sing the praises of the autocratic leader, or will be silent. We never see the peasants, but often see the experts. And we live in a society where newspapers report only the bad, and where we only believe when there pictures. No pictures, no story. As with Stalin’s Gulags, Mao’s famine, or North Korea today, there are likely to be few pictures released to the press. Eventually, a census will reveal that tens of million aged have vanished, and we’ll have to guess where they went.

I can expect China to continue its military buildup over the next decade. The military will be necessary to put down riots, and keep young men occupied, and to protect China from foreign intervention. China will especially need to protect its ill-gotten, new oil-assets. Oil is needed if China is to replace its farmers with machines. It will be a challenge for a wise American leader to avoid being drawn into war with China, while protecting some of our interests: Taiwan, Hong Kong, etc. As with Theodore Roosevelt, he should offer support and non-biassed mediation. Is Trump up to this?  Hu Knows?

Robert Buxbaum, March 21, 2018. The above might be Xi-nephobia, Then again, this just in: Chairman Xi announces that Taiwan will face punishment if it attempts to break free. Doesn’t sound good.

Beyond oil lies … more oil + price volatility

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One of many best selling books by Kenneth Deffeyes

One of many best-selling books by Kenneth Deffeyes

While I was at Princeton, one of the most popular courses was geology 101 taught by Dr. Kenneth S. Deffeyes. It was a sort of “Rocks for Jocks,” but had an unusual bite since Dr. Deffeyes focussed particularly on the geology of oil. Deffeyes had an impressive understanding of oil and oil production, and one outcome of this impressive understanding was his certainty that US oil production had peaked in 1970, and that world oil was about to run out too. The prediction that US oil production had peaked was not original to him. It was called Hubbert’s peak after King Hubbert who correctly predicted (rationalized?) the date, but published it only in 1971. What Deffeyes added to Hubbard’s analysis was a simplified mathematical justification and a new prediction: that world oil production would peak in the 1980s, or 2000, and then run out fast. By 2005, the peak date was fixed to November 24, of the same year: Thanksgiving day 2005 ± 3 weeks.

As with any prediction of global doom, I was skeptical, but generally trusted the experts, and virtually every experts was on board to predict gloom in the near future. A British group, The Institute for Peak Oil picked 2007 for the oil to run out, and the several movies expanded the theme, e.g. Mad Max. I was convinced enough to direct my PhD research to nuclear fusion engineering. Fusion being presented as the essential salvation for our civilization to survive beyond 2050 years or so. I’m happy to report that the dire prediction of his mathematics did not come to pass, at least not yet. To quote Yogi Berra, “In theory, theory is just like reality.” Still I think it’s worthwhile to review the mathematical thinking for what went wrong, and see if some value might be retained from the rubble.

proof of peak oilDeffeyes’s Maltheisan proof went like this: take a year-by year history of the rate of production, P and divide this by the amount of oil known to be recoverable in that year, Q. Plot this P/Q data against Q, and you find the data follows a reasonably straight line: P/Q = b-mQ. This occurs between 1962 and 1983, or between 1983 and 2005. Fro whichever straight line you pick, m and b are positive. Once you find values for m and b that you trust, you can rearrange the equation to read,

P = -mQ2+ bQ

You the calculate the peak of production from this as the point where dP/dQ = 0. With a little calculus you’ll see this occurs at Q = b/2m, or at P/Q = b/2. This is the half-way point on the P/Q vs Q line. If you extrapolate the line to zero production, P=0, you predict a total possible oil production, QT = b/m. According to this model this is always double the total Q discovered by the peak. In 1983, QT was calculated to be 1 trillion barrels. By May of 2005, again predicted to be a peak year, QT had grown to two trillion barrels.

I suppose Deffayes might have suspected there was a mistake somewhere in the calculation from the way that QT had doubled, but he did not. See him lecture here in May 2005; he predicts war, famine, and pestilence, with no real chance of salvation. It’s a depressing conclusion, confidently presented by someone enamored of his own theories. In retrospect, I’d say he did not realize that he was over-enamored of his own theory, and blind to the possibility that the P/Q vs Q line might curve upward, have a positive second derivative.

Aside from his theory of peak oil, Deffayes also had a theory of oil price, one that was not all that popular. It’s not presented in the YouTube video, nor in his popular books, but it’s one that I still find valuable, and plausibly true. Deffeyes claimed the wildly varying prices of the time were the result of an inherent quay imbalance between a varying supply and an inelastic demand. If this was the cause, we’d expect the price jumps of oil up and down will match the way the wait-line at a barber shop gets longer and shorter. Assume supply varies because discoveries came in random packets, while demand rises steadily, and it all makes sense. After each new discovery, price is seen to fall. It then rises slowly till the next discovery. Price is seen as a symptom of supply unpredictability rather than a useful corrective to supply needs. This view is the opposite of Adam Smith, but I think he’s not wrong, at least in the short term with a necessary commodity like oil.

Academics accepted the peak oil prediction, I suspect, in part because it supported a Marxian remedy. If oil was running out and the market was broken, then our only recourse was government management of energy production and use. By the late 70s, Jimmy Carter told us to turn our thermostats to 65. This went with price controls, gas rationing, and a 55 mph speed limit, and a strong message of population management – birth control. We were running out of energy, we were told because we had too many people and they (we) were using too much. America’s grown days were behind us, and only the best and the brightest could be trusted to manage our decline into the abyss. I half believed these scary predictions, in part because everyone did, and in part because they made my research at Princeton particularly important. The Science fiction of the day told tales of bold energy leaders, and I was ready to step up and lead, or so I thought.

By 2009 Dr. Deffayes was being regarded as chicken little as world oil production continued to expand.

By 2009 Dr. Deffayes was being regarded as chicken little as world oil production continued to expand.

I’m happy to report that none of the dire predictions of the 70’s to 90s came to pass. Some of my colleagues became world leaders, the rest because stock brokers with their own private planes and SUVs. As of my writing in 2018, world oil production has been rising, and even King Hubbert’s original prediction of US production has been overturned. Deffayes’s reputation suffered for a few years, then politicians moved on to other dire dangers that require world-class management. Among the major dangers of today, school shootings, Ebola, and Al Gore’s claim that the ice caps will melt by 2014, flooding New York. Sooner or later, one of these predictions will come true, but the lesson I take is that it’s hard to predict change accurately.

Just when you thought US oil had beed depleted for good, production began rising. It's now higher than the 1970 peak.

Just when you thought US oil was depleted, production began rising. We now produce more than in 1970.

Much of the new oil production you’ll see on the chart above comes from tar-sands, oil the Deffeyes  considered unrecoverable, even while it was being recovered. We also  discovered new ways to extract leftover oil, and got better at using nuclear electricity and natural gas. In the long run, I expect nuclear electricity and hydrogen will replace oil. Trees have a value, as does solar. As for nuclear fusion, it has not turned out practical. See my analysis of why.

Robert Buxbaum, March 15, 2018. Happy Ides of March, a most republican holiday.