Confidence

The word indicates an inner feeling, but sometimes it is best to parse it. It comes from “trust,” combined with “with,” thus trusting with or trusting X. It seems to me that the X is here the issue. We use the word in relationship to the inanimate ranges of reality of well. We’ll test a knot and say that we are confident that it will hold. But when it comes to complex situations that we cannot actually test, like we can test a knot or a beam, the presence of confidence or lack of it has everything to do with people, with agents. Public confidence in the economy—therefore motivating us to spend or to invest—is not produced by careful observation of a mechanical arrangement but comes from a general “feel,” as it were. And much of that feel comes from the news, the media—alongside talking to other people and observing what they do.

The New York Times and the Wall Street Journal both feature stories this morning that certainly shape public confidence. The NYT headline: HOUSE G.O.P. SETS A NEW OFFENSIVE ON OBAMA GOALS. The Journal’s: RANCOR IN WASHINGTON FANS PUBLIC DISAPPROVAL.

It’s really the same story, although the Times’ focus is on actual planned cuts in budget whereas the Journal concentrates on a Wall Street Journal/NBC News poll showing public disapproval of Congress—which has reached an all time high of 83 percent.  Obama’s approval rating was low too, 45 percent. The Founding Fathers would here have talked about the evils of faction. That last word comes from the Latin for “a making or doing” used ever since to mean a political party or a class of persons.

Uncertainty breeds lack of confidence and conflict breeds uncertainty. No. We cannot neatly isolate the political from the economic, the personal from the public. Nor can such things as attitude be put in place by Constitutional language. Yet the performance of a democracy absolutely demands that once an administration has been elected by the public, the political conflict that resulted in that outcome must be brought to a halt; unified action must follow. We now have a situation that, were it manifesting in a person, would make that person highly unreliable. He would no sooner start something than try to destroy it, say something then try to unsay it, promise something and then do the opposite. With such a “person” in charge of our country, can we be confident? Civil war comes in many different forms—acute and violent, insidious and undermining. We have the latter, Syria the former. In a forced choice, I’d rather have ours—but in a free choice I don’t want civil war at all.

The Spreadsheet Never Frowns

My subject is feedback. Or management. Or the nature of too-highly-layered hierarchies. Consider an efficient hierarchy. It will be three-layered at most—and each layer will communicate with the one next to it face to face. In such a situation, people will be talking to each other—and what with frequent contact, will become familiar with each other at the personal level. Our current institutions are vastly more complicated—at least twelve levels in most cases. Furthermore, the chain of command will be further confused by the intrusions of committees. Very often the feedback from customers or clients will come to the top in the completely faded form of pure numbers on a spreadsheet—whereas, when the scale is human, the bad or good news will take the form of a person making a report, one human to another. The problem of size, simply, is that a spreadsheet never frowns—but people do. And when the next layer down arrives at the office with a dark face, one must be prepared to do something about it.

Supposing you were a high-flying trader who sold toxic real estate bonds directly to “widows and orphans”—as Fabrice Tourre, formerly of Goldman Sachs, told his girlfriend that he had done. And suppose the uncles, brothers, or cousins or other muscular relations of those widows and orphans had gotten a hold of Fabrice Tourre and applied to him the “feedback” of beating him to within an inch of his life? He would have learned a whole lot earlier that he was breaking the rules of morality. But twelve-layered hierarchies protected him until now. And he may still get away with it shielded by hosts of high-priced lawyers.

Employment Update: June 2013

The new employment numbers for June arrived this year on the fifth of July (see BLS release). Decent results, actually. Job gains in June were 195,000. April and May results were also updated, for a combined additional gain in those months of 120,000 jobs. This caused April results to come in at 199,000, May results at 195,000. The resulting monthly chart follows.

If we look at these results on an annualized basis, thus January-June results extended to the rest of the year, the economy continues to perform better than it did in 2010, 2011, and 2012. The graphic showing that comes next.

If we look at this on a monthly basis, we get the following. In 2010 we gained on average 85,200 jobs a month, in 2011 175,300, in 2012 182,800, and in 2013, to date, an average of 201,800.

During the Great Recession we lost 8.578 million jobs; in the three-and-a-half years since then we gained back 6.506 million. This means that we’ve now recovered in that much longer period 75.8 percent of job. Its going slowly, but we are gaining.

Recovering jobs lost in the Great Recession is not the same as adding jobs to accommodate the growth in our workforce. An earlier posting (here), shows that we need to add 87,300 jobs to the workforce every month just to accommodate our growing population. So long as we are just recovering lost jobs, we are not creating jobs for the young. Since the Great Recession ended, we have therefore accumulated a demand for 3.7 million new jobs (42 months times 87,300). It’s only after we have regained all losses that job gains will count against that growing deficit. 

Looking at sectors, some sectors were still posting losses. In June these were Manufacturing (down 3,000), Transportation and Warehousing (down 5,100), Information (down 5,000), Miscellaneous Services (down 4,000), and Government (down 7,000). The continuing loss in government employment is a marvel—what with our legislators all clamoring about creating jobs.

Fusion Footnote

Although the theoretical background of fusion as a source of energy has been solidly established, experiments on a smaller scale have not yet yielded a positive energy balance (less total energy needed to keep the fusion process going than comes out as a net result).

     Fusion Energy Foundation (link)

Having mentioned fusion power elsewhere, I got curious about the subject again. In a sci-fi novel I once projected a future in which tokomaks (I called them takamaks, a variant spelling) were quietly supplying the world’s energy until the ocean seemed to resist the continued extraction of deuterium from its waters. A fictional speculation, to be sure. That was ten years or more ago. So now I got curious. I wondered what had transpired since. My interest, this time, was more conventional. I wanted to know the energy balance of this technology.

I was curious for a reason. A couple of years ago, in a free-lance assignment, I looked at ethanol production in this context and discovered there that, if all energy used in making ethanol is actually counted, ethanol production has a negative balance, meaning that inputs exceed the energy actually recovered. In the fusion game, this balance is referred to as Q. The output divided by the input is  Q. A Q=1 therefore means that energy expended is equal to the energy harvested. Anything higher than 1 is a gain, meaning that the technology pays for itself in an “energy economy.” If lower than 1, the technology isn’t justified in a purely physical sense. I put that phrase in quotes because energy balance is not the same as economic balance. Ethanol is cost effective, especially since it’s subsidized; from an energy point of vantage it is a loser.

The leading fusion process attempts to fuse a deuterium atom with a tritium atom. These are forms (isotopes) of hydrogen. Hydrogen has a single proton and a lone electron. The overwhelming majority of hydrogen atoms (99.98%) are of this simple type. Deuterium has a proton and a neutron both; a minute amount of hydrogen in the ocean (0.015%) takes the form deuterium. Tritium has a proton and two neutrons. For all practical purposes it does not appear in nature, at least not for long. It is produced by cosmic rays. It can also be produced by man using lithium as a starting medium. Anyway….

When you force a D and a T close enough together, they do everything in their power to resist you. Why? They both carry positive charges and repel. You have to exert energy of 0.01 million electron volts (MeV) to overcome this resistance. When you succeed, you produce an atom of helium, a single neutron that flies off as radiation, and 17.59 MeV of extra energy. This entire reaction therefore requires the 0.01 MeV at the very last stage—by the time you’ve really squeezed the atoms together—to yield the output, thus Q=1759! That’s major, as it were.

You might wonder how much energy an MeV actually carries. Thanks to Wikipedia, I can report that 4 MeV is the stupendous force with which a single snowflake crashes down on a trembling concrete drive. Obviously, in the case of fusion, we need a whole lot of Ds and Ts colliding and fusing before we can talk about real power.

Now we know the maximum potential of this technology. It’s a whole lot more attractive than that of petroleum which, as I remember, produces something like a Q=45. And that ratio has built the modern world. So what has fusion produced thus far in its roughly 60-year history. Developments began in 1950.

The best performance on record to date was delivered by the JET program (Joint European Torus, based in Culham, Great Britain). It delivered Q=0.64 for a few seconds, the short duration being characteristic of these experimental machines. The output was 16 Megawatts, produced by the expenditure of 25 MW. The record!

The ITER program, the biggest yet and still in the building stage, expects to achieve Q=10 in short bursts and Q=5 in more sustained production runs. ITER’s original name was International Thermonuclear Experimental Reactor, but that name worried people what with scare-words like thermonuclear and experimental being so close together, so the long phrase is no longer used. ITER’s fusion reaction is being raised now in Cadarache, in France.

Now the projected Q is a long ways of 1759, of course, but you have to account for the fact that long before we have the D and T close enough together to give them that last, tiny, 0.01 MeV nudge, we have get them into hailing distance first. That requires creating enormously hot plasmas inside magnetic containers that require cryogenic cooling in the -273 Celsius range. The cooling alone is very energy-intensive.

As for timing, the facility won’t be built for another eight years or so—if all goes well. And the distance between 0.64 and 10 is great.

To wind this up, the conditions ideal for bumping the heads of Ds and Ts is at the core of the sun where gravity does most of this work, where D and T have nowhere to go, and very sensitive disturbances can’t simply cause that great plasma up there simply to fizz out—like the light in our tokomaks routinely does.

Re-post Note: This post appeared first on April 9, 2009 in the Wordpress version of LaMarotte. I have since deleted that entire blog to avoid having my work used by advertisers. A selection of such posts will be reproduced here over time.

3-D Again? So Soon?

Why just the other day, a month ago, I noted my own problems with 3-D display technologies and thought that they are doomed (link). That case involved a smartphone to be launched with 3-D images on its screen. Today I read (NYT, “ESPN Drops 3D Channel”) that a 3-D TV venture, ESPN’s, will be headed for techno Walhalla because the public doesn’t want to bother. Confirms what I’ve been seeing and experiencing literally from my late teens, thus for nearly sixty years: people are perfectly satisfied watching entertainment in a two-dimensional projection. Ordinary images provide the human eye sufficient information so that the three-dimensional reality behind them can be easily discerned. Will that stop our innovators from trying again and again and again? Probably not.

Slingshot Boom?

I have no dog in this fight nor do I own any slingshot stock, but what with the Administration having perceived crossing a red line drawn somewhere, I expect that the most politically inoffensive way to rush to the Syrian rebels’ aid would be to order massive shipments of slingshots for delivery there. By some careful diplomatic phrasing, the slingshot could be presented as a weapons system, and the cost might be quite moderate while yet boosting employment.

As for where I stand, my views of international relations were formed by reading George Kennan. I don’t see even a sliver of national interest in supporting either party in Syria—and that because I don’t consider the State of Israel as the 51st state, much less primus inter pares.

As for slingshots, I see major retooling and expansion. And, one hopes, the cross-bow and bo-n-ar industry lobbies are already planning to storm Congress to get a piece of the coming action.

A Cultural View of Demographics?

The U.S. Bureau of the Census published its annual population estimates for the United States yesterday. Almost obscured in the original table released (here), is the fact that in the fiscal year under examination (July 1, 2011 to July 1, 2012), the demographic category labeled White Alone, Not Hispanic, experienced more deaths in the period than it had births. The difference, in favor of deaths, was 12,419. Nevertheless, “White Alone” gained 175,965 people—all due to immigration; total immigration was 188,384. That number was also “White Alone” immigration. That number, less the 12,419 above, yielded a positive gain in “White Alone” numbers, a minimal up-tic of 0.1 percent over 2011. All other groupings increased by higher percentiles: Asians by 2.9 percent, mostly from immigration, Hispanics (of any race) by 2.2, and Blacks by 1.1 percent.

What the Census Bureau emphasized in its headline was the gain in Asian population. What the media picked up was that “White deaths outnumber White births.” Now, it so happens, that 88.2 percent of the 53 million Hispanics are racially White. Indeed, when White Hispanics are included with other Whites, Whites gained 0.5 percent in population. That’s still the lowest performance, but a little better.

The upshot is that both the Bureau’s special segregation of “White Alone, Not Hispanic” as a category—and the media’s focus on that category—indicates a cultural factor running rampant in the handling of our demographic statistics.

Tribal concerns are never far from human interests no matter how secular and enlightened we think ourselves to be…

The Peculiar Apple Culture

Briefly, to be sure, I was a part of it. My first computer was an Apple II, I was a member of an Apple User Group, and wrote a column, titled “Daisywheeling,” in its publication. Then, later, I also bought an Apple IIe, and at least two Macintoshes. But that came after my realization that the Apple Culture was not for me. Those few Apple purchases following the II were in support of commercial ventures—and in the course of those, which went way beyond the Apple, we’ve purchased like scores of Intel machines.

I shied from Apple because, it seemed to me, it was cultivating loyalty as such and, in the course of it, exploited its followers by continuously and radically altering its product so that one couldn’t just get on with working, using Apple-provided tools, but had to engage in what amounted to sacrificial purchasing of ever-changing technology. By contrast, my first IBM PC continued to work for many years until, eventually, it sort of turned to grey dust.

The latest update of Apple’s iPhone software, reported this morning, shows that the old ways are still with us. The Apple Cult is still a reality. In the WSJ’s article I find this sentence:

Apple executives came out swinging against those who question whether the company which hasn’t released a major new product since last year, has lost its cool.

The phrase that caught my eye was “major new product since last year.” Every time Apple introduces a “major new product” it obsoletes a whole category—and its cultish followers are then required to sacrifice more megabucks to stay true to the thin god who introduces it in appropriate uniform (no tie in sight) looking like an escapee from the concentration camp and uttering oracular statements, in a darkened room, using an electronic pointer.

What the world needs now is a cylindrical Mac. For the vast armies of non-believers, that may sound like a joke. But the cylindrical Mac is on its way—obsolescing anything rectangular.

Employment Update: May 2013

According to the Bureau of Labor Statistics (see BLS release), the economy added 175,000 jobs. March results were modified by adding 4,000 jobs in that month; the total for April was reduced by 12,000 jobs. Revisions, therefore, accounted for a loss of 8,000 jobs. The net gain in May, therefore was 167,000 jobs—a decent increase but not a signal of any kind of growth-resumption. The graphic follows; pink bars indicate revised bars; red is the result for May—but subject to revision in the future.

This year I have also calculated, each month, what 2013 will look like as a whole if current trends hold. The projection, this month, based on five months of data, show that the economy will gain 2.27 million jobs. That result continues to be better than actual job growth in the 2010-2012 period, but it down from last month. Last month’s projection was 2.35 million.

Much as last month so in May, the real economy, that which produces goods, lost employment (1,000 jobs). So did government (a loss of 3,000 jobs). All the gains were in the services producing sectors, the two biggest gainers being Professional Business Services and Retail. Note here that within Professional Business Services, where 57,000 jobs were created, Temporary Employment accounted for 25,600 of those jobs or 45 percent. Even in the services, there is real hesitation in creating new, permanent jobs.

Demand for Risk?

In the Wall Street Journal this morning, in a story titled “One of Wall Street’s Riskiest Bets Returns,” we read the following: “Investors are once again clamoring for a risky investment blamed for helping unleash the financial crisis: the synthetic CDO.”

To recap the meaning of this term. Collateralized Debt Obligations are produced by pooling bonds of all kinds, arranging them into slices from safest to most risky, and then selling each slice. The riskiest slices have the highest returns. “Synthetic” CDOs pool insurance policies written on the bonds, also arranged into slices. Again, the least safe have the highest payouts. The larger the total amount of such pools, the greater the risk of a general melt-down.

It is entirely reasonable to think that our public life—that our governance—is altogether out of control. The financial melt-down began in 2006. These kinds of speculative derivatives were the principal cause of it. Now they are back? Let us not forget that creating ever greater “attractive” pools led to criminally negligent lending—guaranteeing a melt-down, sooner or later. Are the dynamics any different today?

Our national public sector, however, appears to be paralyzed. We should have had simple laws, already in 2008 or earlier, absolutely prohibiting the creation and trading of any kind of derivatives. That didn’t happen. You want to buy stock? Fine. You want to buy a bond? Fine. All other so-called creative “investment products” should be outlawed. Didn’t happen. Therefore, of course, even stocks and bonds are riskier to own. Gambling is carefully controlled all over these many states. Why is gambling on the markets getting a free ride?

Every jewelry store we pass has signs out saying: “We buy gold.” Well, the right answer to that is to hold on to gold. What with the “parents” now insane, it is almost predictable that in due time paper currency will go the way of all other intangible “instruments.” And people biting on coins will also return. It’s reasonable, in other words, to act as if the world has gone plain crazy.

Now They Tell Us

A week ago roughly I commented on the resurgent housing market (link), interpreting it as the return of home buyers, who really need housing, after a seven-year period of slumping. Today comes a rather startling news story; I saw it in the New York Times. It turns out that most of the home purchases have been made by investment houses acting, evidently, to “create” confidence. If that’s what they were doing, this news should dampen whatever confidence was there. “Nationwide,” NYT writes, “68 percent of the damaged homes sold in April went to investors, and only 19 percent to first time home buyers, according to Campbell Housing-Pulse.” That word, “damaged,” refers to impacted in price by the housing slump. Most of the houses bought by investment houses are being rented—awaiting higher prices yet when, presumably, they will be unloaded. Can news be trusted any longer? Every story about the economy’s turn-around (“At last!”) by media commentators cited the surge in home purchases—and that surge was interpreted as a shift in “consumer” confidence—rather than as Wall Street manipulation.

A Spreadsheet of Old

At the bottom of a very, very old pile I came across a pad of paper which produced nostalgic memories. It was an all-purpose AmPad miniature spreadsheet, of the old-fashioned kind, thus neatly pre-ruled pages. Herewith an image of it. I call it a miniature because, on full-sized jobs of calculation, we used pads of much greater size. But they were essentially the same format you see here but made both wider and deeper.

The old spreadsheet—which also gave its name to the electronic kind—served exactly the same purposes. Ever notice that when you open a new page of Excel, for instance, one of the first tasks is to make the left-most column  wider—because that’s where the descriptive labels usually go? Well, in the old days the paper versions came that way. And, of course, both rows and columns were numbered. The electronic versions introduced column-marking using letters, which made it less confusing to reference a cell.

To be sure, working with the vast, physical, ancient spreadsheets was a bother. You had to have a calculator handy. And in the really early days those were not small and handy but big and bulky and almost too heavy to move.

Yes. Nostalgia. Most of it is of this flavor. Somehow the past appears in a rosy sort of light whereas the present is always in black and white. Until you recall what a major labor it was to revise a column already filled with numbers. All that erasing, all that cursing. Ah, the good-old-days.

It Ain’t Over Yet

The housing market started to plummet as soon as the 2005 was over—and then, measured in the value of business done, it plummeted like one of those cars falling off the collapsing bridge. Here is a chart from an earlier posting. In effect we’ve had a period of seven years and five months in which the housing market was dead in the water, and ship taking water on top of that. Obviously time enough had passed so that natural demand for housing would begin to build up sooner or later. And now we have reports that housing is up. Not surprisingly, these figures are over-hyped. Consumer confidence is also showing gains, although these are not dramatic—and have been fluctuating up and down. But suddenly everything is all right again?

Don’t think so. The housing market must be viewed narrowly—and pragmatically. Much as the automobile market. Those two categories are basic. Sooner or later people must buy a house, must replace the car. And these two areas will therefore respond to actual need. But when we look at the economy as a whole, it is still treading water. In the most recent monthly employment reports, all of the gains were in the Services sectors. Construction lost jobs, Manufacturing showed zero gains, Mining and Logging lost jobs too. The real economy is still stirring in uneasy sleep.

The upsurge of optimism is a function of unreasoning exaggeration. Our media does not simply report the news—with proper additions of the relevant context. It behaves, instead, like a megaphone with a mind of its own. The message is “Housing sales are picking up, home values are on the increase.” What we hear is something else: “Great news. America is confident again and the bonanza will soon resume.” But it isn’t over yet. The fat lady is still in the dressing room. It will be a while until she rolls on the stage and starts to sing.