Saturday, July 19, 2014

Oil and the Free Market

As a dynamical system, oil prices have long displayed a rather unstable behavior. A number of factors have contributed: a long history of exponential growth in demand, the long time constant of the feedback of prices on supply, and the unpredictable nature of the discovery of new oil resources. As a result, oil prices and oil supply suffered from dramatic swings, and as the world became more oil dependent, these swings wrecked every widening paths of economic destruction. One of the first to clearly realize this was John D. Rockefeller, and his answer was the Standard Oil Trust. Besides giving him and his investors immense personal profits, Standard created safer standardized oil products and regulated production to maintain stable (and high) prices.

Motivated in part by Ida Tarbell's scathing exposes, the Trust was ultimately dismantled, and consumers got lower prices but also an unstable market. The ferocious competition unleashed that drove down prices also resulted in a number of inefficiencies (like overpumping, leading to premature exhaustion of oil formations) and created local economic havoc in oil country. Eventually, the Texas Railroad Commission, which for peculiar historical reasons wound up in charge, imposed a quota system which brought more predictability to the market.

In later years, the giant combinations of the international oil companies performed a similar function, until "their" oil concessions were expropriated by national governments, and later, for a while, by OPEC. These quotas and combinations imposed a cost - higher prices - but there were also often benefits. When middle eastern oil production exploded, the US domestic oil production would have blown away in West Texas dust storms were it not for import quotas imposed by Eisenhower.

A key reason for this sort of quota was the central strategic position of oil. Oil transitioned from just another commodity to the central strategic commodity when Winston Churchill switched the Royal Navy from coal to oil a bit over 100 years ago. Since then, it became ever more dominant. Without it, armies could not fight, industries could not function, planes could not fly, and people could not get to work.

It's economic role has often been neglected. Jimmy Carter's presidency was unsuccessful mostly because the events of 1973, 1978, and later led to oil prices more than quadrupling. The resulting deep recession crippled his presidency. These price rises triggered an explosion of exploration and development oil resources as well as dramatic conservation measures around the globe. By 1981, when Ronald Reagan took office, the new oil produced by the exploration and the conservation measures had started eroding oil prices, and by 1985, oil prices were in collapse. Carter had no more influence on the oil price rise than Reagan did on the oil price fall, but the first produced "malaise" and the second, "Morning in America." Luck is singularly important in politics.

Friday, July 18, 2014

Learning Physics

Rhett Allain, physics prof, wired writer, and blogger has an article entitled: What do you need to learn upper level physics? YMMV, but I found it spectacularly uninformative, so I decided to see if I could do better.

Firstly, compared to some other academic disciplines and professions, physics is heavy on technique but relatively light on memorizing facts. It also very "vertical" or hierarchical, in that it's built layer after layer one on top of the other, and you often need the lower layers to understand the upper layers. And by "techniques", I mostly mean skill at solving physics problems.

The foundation is mathematics. You can't really begin to study physics at a formal level until you are competent in high school level mathematics: algebra, geometry, trigonometry, and calculus. At that point the student can tackle the basic subjects of physics at an elementary level: mechanics, electromagnetism, thermal physics, and waves. Simultaneously one should be learning some more foundational math: multivariable and vector calculus, differential equations, and linear algebra.

The foundational subjects of classical mechanics, and electromagnetism are usually tackled again in the undergraduate curriculum, at a higher level of sophistication and quantum mechanics added once students know a bit about partial differential equations - or sometimes as an introduction to that subject. Special relativity may be taught at either this level, the previous level, or both.

In many US schools, the finishing layers of these subjects are saved for graduate school, as are such more advanced subjects such as quantum field theory and general relativity, but more ambitious curricula give them to undergrads. Undergrads are also usually introduced to applications such condensed matter and nuclear and particle physics.

Prof Allain is pretty vague on how students go about learning these subjects, alluding to textbooks, lectures, MOOCs and online demos, but he leaves out what is to me the core: working problems. You learn physics by working physics problems. If there is another way, a royal road, I don't know it.

Putin's War

So far, Putin has waged a pretty successful PR campaign to persuade the much of the world that the Ukrainian war is anybody's doing but his - a plot by facists and the West. That view found plenty of subscribers among the "everything is America's fault" and professional Obama haters, but it's much harder for him to deny that he his systematic escalation is responsible for the Malaysian air shootdown.

He is the guy who has been supplying the separatists with advanced weapons, "advisors", and other support, probably including the crew that shot down the 777.

James Miller:

President Putin has been recklessly escalating the crisis in eastern Ukraine since he was embarrassed and outmaneuvered by the Ukrainian president three weeks ago. Allowing a passenger jet to be shot down is the act of an increasingly desperate man.

The Kremlin ordered tanks, heavy weapons and Russian fighters to pour over the border stoking up the crisis until tragedy struck. We should have seen it coming; on Wednesday morning the front page of Foreign Policy magazine had a headline that should have sent shockwaves through the geopolitical landscape: Russia Is Firing Missiles At Ukraine.

The story followed several Russian citizens posting videos to social media which they said show GRAD rockets being fired from Russian territory toward Ukraine. By triangulating the different camera angles, my team at The Interpreter proved that the unguided rockets were indeed being fired into Ukraine from Russia. Thursday morning, there were reports that a group of Ukrainian soldiers had been hit by the rocket fire and were actually receiving medical treatment on the other side of the border, ironically enough in the same town from which the rockets had been launched in the first place.

...

The firing of GRAD rockets and the shooting down of a civilian airplane are part of a pattern, a last-ditch desperate attempt to salvage a win in eastern Ukraine at any cost. In the last several weeks, Russia has pumped dozens of tanks, self-powered howitzers, armored vehicles and militants across the border to the Russian-backed insurgents.

Almost three weeks ago Ukraine’s government and the separatists had entered into at least a tentative ceasefire, and Russia believed the separatists could diplomatically outmaneuver Kiev. But Ukraine’s new president, Petro Poroshenko, did not extend the ceasefire, as even his European allies thought he would. Instead he launched a sudden strike on the separatists, retaking a series of key rebel strongholds.

Putin was the one who had been outmaneuvered, and the effort to covertly support the separatists in eastern Ukraine was falling apart. Now the veil has fallen. Russia is almost overtly supplying the separatists with military support. But Putin’s urgency in Ukraine has turned to recklessness, and Thursday’s events are the recklessness of Putin epitomized.

Thursday, July 17, 2014

Putin Screwup?

Josh Marshall on Ukraine:

Were it not for the hundreds killed, it would also be comical the ridiculous series of events Vladimir Putin's reckless behavior led up to this morning. For months Putin has been playing with fire, making trouble and having it work mainly to his advantage. Certainly in the context of Russian history and nationalist aspiration reclaiming the Crimea is a vast accomplishment. But the whole thing blew up in his face today in a way, and with repercussions I don't think - even with all wall to wall coverage - we can quite grasp.

Find extremists and hot-heads of the lowest common denominator variety, seed them with weaponry only a few militaries in the world possess - and, well, just see what happens. What could go wrong?

The audio tapes posted by The New York Times might as well be from some future Russia-based version of Waiting for Guffman or Best in Show, a comical rendering of rustics and morons stumbling into an event of vast carnage and international consequence mainly because they're hotheads and idiots - the kind of people no one in their right minds would give world class weaponry to. It's like finding some white supremacist/militia types on their little compound in the inter-Mountain west and giving them world class missile launchers and heavy armaments.

Another 777 Down

If, as some circumstantial evidence suggests, the Malaysian 777 downed in Ukraine was shot down by the Ukrainian rebels that Putin has outsourced his imperial designs to, with a weapon that he gave them, Europe may decide it might actually need to get serious about economic sanctions.

From Dylan Scott:

The leader of the pro-Russia rebel group that controls the area where Malaysia Airlines Flight 17 crashed on Thursday reportedly posted a warning on social media just as news about the commercial jet was breaking.

"We did warn you — do not fly in our sky," it reportedly said.

According to Mashable, Igor Gorkin, also known as Igor Strelkov, said that "a plane has just been downed" on VK.com, Russia's Facebook-like social network, around the same time that Flight 17 went missing.

Strelkov "deleted the post when he found out it was actually a commercial jetliner carrying 295 innocent people — not a military aircraft," Mashable reported.

It's also pretty bizarre that Eurocontrol was still routing aircraft across Eastern Ukraine in the wake of threats.

UPDATE: FT reports intercepted phone calls from rebels to Russia admitting the shootdown, but apparently because they thought it was a military aircraft.

Wednesday, July 16, 2014

Oh Dear!

From Forbes, I learned that Paul Krugman had been "publically eviscerated" by Harvard prof and Wingnut court jester Niall Ferguson. It sounds painful and potentially fatal. I certainly hope that the culprit has been brought to justice.

I guess Fergie must not have been satisfied with the results of his three part critique of PK in the HuffPost, which must have led him to the alleged physical violence. I can't say that I was very impressed by his ïntellectual "points" most of which concerned Krugman's predictions about the Euro, assuming the ECB failed to change its evil ways (It did, a point that seem to escape the Ferg).

Tuesday, July 15, 2014

Israel's "War Crimes"

For me the phrase "war crime" is somewhat redundant. War is murder, to start with. There are degrees, of course. By most accounts, Israel appears to be trying to murder mostly Palestinians it has some reason to suspect of trying to do them ill. Of course, by this point, there are probably few if any Palestinians in the Gaza prison who wouldn't do them ill if they could.

The pretext for this war was the murder of three Israeli teenagers. That, very likely, was a Palestinian "war crime". For Palestinians, one problem is that their efficiency at war is not one thousandth of that of Israel. The gruesome strategy Hamas has adopted is to provoke the murder of their own people to the point at which the rest of the world gets angry at Israel. They have been modestly successful in that, but it's far from clear that it will do them any good.

It's not clear that Israel's alternatives to playing defense and selective assassination are any better. One clear alternative would be to occupy Gaza, disarm Hamas, and take over its governance. That would be costly - thousands of Israeli casualties and tens or hundreds of thousands among the Palestinians. It was the strategy we used with Germany and Japan, and it worked, sort of.

The real alternative is a peace deal. But it's not clear that any workable version of such would be acceptable to the powerful fanatics on either side. From Israel's point of view, an armed Palestinian state with open borders is unacceptable. From the Palestinian point of view, the West Bank settlements have to go.

Pessimism is appropriate.

Monday, July 14, 2014

If You Close Your Eyes...

I read that climate skeptics are trying to rebrand themselves as "climate optimists." I can think of a few alternative designations, but rather than be bitter, let me just wish them well and suggest a theme song:


Sunday, July 13, 2014

Not Enough Magic: 1-0

Messi merely mortal, after all.

A very good game, with chances for both teams, but I have to think that the better team won.

Netherlands 3 - Brazil 0

Bizarre officiating, but Brazil was clearly exposed as a mediocre team without Nemar. Maybe not even that good. It's tactics were also dubious, pressing high early, and thereby exposing their weakness in the back. Another big triumph of for the new Northern European style soccer.

Peter Pomerantsev has a nice Daily Beast article on the end of an era in soccer - the era of Messi, tiki-taka, and Barcelona with the rise of the Soccer machines just offstage, right.

Medically he might never have made it. At 11, back in his home town of Rosario, Argentina, Messi was diagnosed with growth hormone deficiency. “Every night I had to stick a needle into my legs, night after night after night, every day of the week, and this over a period of three years,” says Messi. But his steel factory worker father and cleaner mother struggled to keep on raising the 1,500 dollar a month treatment. His first Argentine team, Newell’s Old Boys, promised to pay, but couldn’t make good on the promise.

“Every night I had to stick a needle into my legs, night after night after night, every day of the week, and this over a period of three years,” says Messi. By 13, Messi was already a phenomenon—at halftime he would entertain crowds by keeping the ball in the air so long fans would try to distract him by throwing coins at him like Messi was some sort of circus act. Barcelona offered to ship him to Spain and pay for the treatment. It meant splitting up the family—Messi’s mother and siblings stayed in Argentina.

The Barcelona youth compound is called La Masia, a country house boarding school for 300 boys. The Barcelona ideal is heavily influenced by the Dutch concept of “total football,” with its focus on one-touch passing, movement, and the ability for players to switch positions, a style one Spanish commentator famously nicknamed “tiki-taka,” a nonsense word which catches the metronomic quality of Barcelona’s interchanges. But the team fostered at Barcelona with Messi would take tiki-taka to a new level, as a whole generation of players matured who were all small, agile and silky skilful.

...

Bayern Munich’s 7-0 thrashing of Barcelona in the 2013 Champions League semifinal was the first bell-toll: the liquid fugues of Barcelona’s elegant, lithe midfielders torn to shreds by a team full of strong, direct running and muscular midfielders. Holland’s crushing of Spain in the first round of this World Cup was the final burial. The subplot in the Holland-Argentina semifinal was Messi taking revenge for Holland’s destruction of his Barcelona teammates.

The subplot in the final will be Messi and the beautiful game’s last stand against the return of Butch football. Interestingly Germany began this tournament trying to play Barcelona style with a plethora of midfielders. They were weak and have become much better playing more traditionally. The miraculous brand of Billy-the-Fish football is almost over and the butch giants are back. Enjoy Messi while you can—he might play on for a few years yet but everything he represents is already a relic.

Saturday, July 12, 2014

Citizen Koch

Citizen Koch is a fair and balanced account of the activities of two public spirited brothers. With their joint wealth of something like 100 gigabucks, they can and do spends tens and hundreds of millions of dollars on their advocacy actions. Most of those advocacy actions are directed at destruction of unions, disenfranchising African Americans and other low income voters, increasing corporate power, destroying environmental and other regulations and rallying their fellow super-rich to protect and perpetuate the American plutocracy.

Despite the title though, the documentary is mostly about a couple of series of events, one heavily influenced by Koch money and the other influenced mostly by corporate money. The first was Scott Walker's election as Wisconsin governor, implementation of the Koch program, and a subsequent recall election which he again won, partly by outspending his Democratic opponent 8 to 1, fuelled by Koch and other out of State money. The second was former Republican governor and congressman Buddy Romer's unsuccessful attempt to get on the stage in the Republican primary debates.

My initial reaction was furious rage at the way the Koch's and the Kochtopus had subverted the political process, dominated State politics, and corrupted the Supreme Court (Clarence Thomas's wife, for example, got big bucks from them).

The money doesn't just go to politicians. The documentary was originally scheduled for Public television, but PBS chickened out when it remembered that David Koch was a big contributor. As Stephen Colbert notably mentioned, "if you give $75 to PBS you get a tote bag, for $23 million, you get their nut sack.

The documentary is not really a very successful piece of political propaganda though. A lot of it was focussed on the members of the public employee unions that Walker broke. Their furious protests in the halls of the State Legislature were far from unambiguously attractive. These scenes probably put off at least as many people as they inspired. I would have preferred more details about who got Koch money and for what - but thanks to their friends on the US Supreme Court, they can operate with a high degree of secrecy.

All of Me

Commenter TE recently remarked that my posts on string theory reminded him of Lumo on climate. This got me thinking about what the heck I might actually have said on the subject. There is a whole potful of posts, many mentioning ST only peripherally, going back to 2005. It is collected here: Wit Wisdom and Foaming Mouthed Rage of CIP on ST

Oh well.