tag:blogger.com,1999:blog-35583542011-04-21T19:03:14.890-05:00Commentary on Economics, Information and Human Actionlkkineticnoreply@blogger.comBlogger5721100tag:blogger.com,1999:blog-3558354.post-1067559146856689422003-10-30T18:12:00.000-06:002003-10-30T18:12:25.976-06:00

Please do come visit me at my new home, www.knowledgeproblem.com, and please spread the word and update your lists. See ya there!

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1067292961395613032003-10-27T16:16:00.000-06:002003-10-27T16:16:00.853-06:00

1. Public Choice: Politics Without Romance, an article by James Buchanan, the Nobel laureate public choice theorist, in Policy magazine. 2. A very cool post Umair Haque on double moral hazard, risk, and the recording industry. Link courtesy of Carnival of the Capitalists. OK, now I'm going to go nurse my headache of disappointment with a cup of tea and a little Pride and Prejudice.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1067290857533132662003-10-27T15:40:00.000-06:002003-10-27T15:49:31.920-06:00

I am still feeling molto dolorosa, so have not much to say that sparkles with any wit or originality, but want to point out some good content on rent-seeking, a pet topic of mine for many, many reasons (hey, when you work on a regulated industry, rent seeking is a familiar bedfellow). Sunday's Carnival of the Capitalists includes a link to a post by Robert Prather on rent seeking by the states.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1067273290649352032003-10-27T10:48:00.000-06:002003-10-27T10:48:09.700-06:00

Been putting the final touches on some changes around here, as well as starting to grade midterms, and trying in vain to buy a house for the third time in two years. So today is a very unhappy day. Sorry for the ether silence. Please note also the new email address listed here, which is a prelude to the upcoming unveiling of a new Knowledge Problem website ... One entertaining thing came my way

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1066916864504981762003-10-23T08:47:00.000-05:002003-10-23T08:52:17.360-05:00

Wednesday's Wall Street Journal had an interesting little article on Congressional progress on the energy bill (subscription required). Not surprisingly, ethanol is playing a large role in the horse trading: The big winner in last-minute wrangling over the 800-page measure, which is estimated to cost taxpayers about $18 billion in tax incentives, appears to be the ethanol industry. It has pushed

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1066530388741943802003-10-18T21:26:00.000-05:002003-10-18T21:26:28.516-05:00

Will be out of town for a few days, attending the US Association of Energy Economics meetings in Mexico City and giving a paper. Don't know the wireless/hotel situation, so will have to be loosey-goosey about the postings. Back Wednesday.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1066410200213090822003-10-17T12:03:00.000-05:002003-10-17T12:03:20.313-05:00

Yesterday was a self-imposed deadline for Republican-led resolution of House-Senate conflicts over the impending energy bill. I'm shocked, shocked to say that they missed the deadline. Note the areas where they claim to have gotten agreement: The talks have been dominated by Republicans who have the votes to fashion the bill largely to their liking, despite Democratic objections. And on all but

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1066224363932965582003-10-15T08:26:00.000-05:002003-10-15T08:26:21.230-05:00

Tyler Cowen has been making some very interesting posts over at Marginal Revolution (Alex Tabarrok has too, but I'm not going to say anything about them here, now!). I particularly thank and curse him for the reference to this normblog greatest jazz albums poll (although with RIAA Radar, I am loathe to buy many of them that I don't already own!) and to AllMusic. Thanks, Tyler, thanks a lot ...

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1066222711608441882003-10-15T07:58:00.000-05:002003-10-15T08:06:03.963-05:00

I have been pretty busy this week, with travel and teaching and writing (and agnozing over the Cubs). Some additional analysis of Governor-elect Schwarzenegger's energy plan for California, following up on this post from last Wednesday, are Ken Silverstein's Utilipoint Issue Alert from Tuesday, and this LA Times story from Monday. UPDATE: And here's a Sacramento Bee article from Tuesday on the

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1066221764900869832003-10-15T07:42:00.000-05:002003-10-15T07:42:44.640-05:00

Boy, it's sure quiet around here today after last night's game ... I don't have much to say, other than fans with front row seats in parks with short outfield walls and a team in the NLCS should learn to keep their hands to themselves. I think Tony Pierce summed it up with his title "maybe now you understand" and i was a man who was about to put his head in a pillow and cry over a baseball game

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065832089828650022003-10-10T19:28:00.000-05:002003-10-10T19:28:09.690-05:00

PJM reports new transmission construction on the Delmarva Peninsula. Delmarva is a notorious load pocket in Maryland/Virginia on the eastern shore, and has been struggling with increased demands for power and NIMBY concerns about building new generation and transmission. This report suggests that some compromise has been achieved, because there have been both generation and transmission projects

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065831311959392702003-10-10T19:15:00.000-05:002003-10-10T19:15:11.950-05:00

Envirospin Watch is a thoughtful blog by Philip Stott, who is largely looking at how the UK media reports on climate change science and policy. It's quite informative and light on invective and emotion, which is all too prevalent in climate change discussions.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065831182479409002003-10-10T19:13:00.000-05:002003-10-10T19:13:02.500-05:00

I noticed two interesting articles touching on international trade today. The first is Arvind Panagariya's Foreign Policy article coming out this month. He busts a bunch of myths and urban legends about the effects of trade and trade barriers (as well as providing evidence that supports truths): “Rich Countries Are More Protectionist Than Poor Ones” Not even close. On average, poor countries

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065830180204562512003-10-10T18:56:00.000-05:002003-10-10T18:56:20.386-05:00

The FCC issues guidelines on implementing number portabiilty starting November 24: The commission said companies should complete a phone-number switch between wireless carriers within 2 1/2 hours, a time already set as a goal by most major carriers. The FCC said the time period is not mandatory, but the commission would reconsider that if it received many consumer complaints about delays in

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065827901688402162003-10-10T18:18:00.000-05:002003-10-10T18:18:21.650-05:00

This Wired article from Wednesday points to an interesting case: a record label that enables sharing, lets you try before you buy, and splits the proceeds of sales 50/50 with artists from the get go. This label, Magnatune, has about 50 signed artists. Also interesting is that the artists retain rights to the songs; they can record them elsewhere, etc. The contractual rights are under a Creative

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065792332999617842003-10-10T08:25:00.000-05:002003-10-10T08:25:32.900-05:00

So my beloved Pittsburgh Penguins start the hockey season tonight at home against the Los Angeles Kings. Mario Lemieux is on the roster, and it also looks like we're pretty deep with talent both young and experienced at center, so the team's fortunes won't hinge so dramatically on his health. Martin Straka continues, and continues to play well. It's a young team, but with veterans like Lemieux,

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065656473702440212003-10-08T18:41:00.000-05:002003-10-08T18:43:25.840-05:00

There are some planks in this platform that, if he can follow through and lead people with him, will unleash an amazing amount of creative energy and dynamism. From the Governor-Elect's website, all points follow the statement "as Governor I will": Encourage cost-effective conservation by increasing demand response to changing electricity markets. One of Governor Davis's great errors was his

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065642670135227082003-10-08T14:51:00.000-05:002003-10-08T14:53:48.823-05:00

Yeah, what he said. Co-integration, Granger causality, ARCH and GARCH models for estimation, all are things that I have used regularly. Congratulations to them both!

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065642254677494292003-10-08T14:44:00.000-05:002003-10-08T14:44:14.346-05:00

Kudos to Craig Newmark for picking up on a story that I think is really, really important: running fiber optic cable through natural gas pipelines. The cable can be inserted into a tube placed inside existing underground gas lines serving homes and businesses by cutting "small incisions in the streets," Peevey said. Think about it: most of the industries on which we spend much of our regulatory

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065634066460749722003-10-08T12:27:00.000-05:002003-10-08T12:27:46.293-05:00

As of last Wednesday, I am now working with Nobel Prize winner Vernon Smith's Interdisciplinary Center for Economic Science at George Mason University. I will be the Director of a new Applied Energy Research Program at ICES. Through this program we plan to expand the use of experimental economic research in the establishment and implementation of regulatory policy, particularly electricity

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065561878098427362003-10-07T16:24:00.000-05:002003-10-07T16:24:37.910-05:00

While you are at TCS, do also read Arnold Kling's open letter to Paul Krugman. I find his distinction between consequence-based arguments and motive-based arguments very important and persuasive. I have always found motive-based arguments to be cheap, shoddy and unpersuasive, and as usual Arnold hits the nail on the head. What's also interesting is that his analysis helps explain my reaction to

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065561429536526882003-10-07T16:17:00.000-05:002003-10-07T16:18:40.353-05:00

Some time last week my husband came home from work with a gleeful grin, and with a flourish he whipped out Neal Stephenson's new book Quicksilver. I had known it was out for a week or so before (because I read Intapundit), and figured I'd get it for him for his birthday. Oh well ... I am also looking forward to reading the whole trilogy, because while I am not particularly a sci fi fan, I am a

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065560797258165622003-10-07T16:06:00.000-05:002003-10-07T16:06:37.330-05:00

I am thrilled, absolutely thrilled, to find out from Tyler Cowen this morning that Al Lowi's and Clyde Wayne Crews's chapter on electricity is available online (and many thanks to Dan Klein for doing so). I recommend it to you all. This chapter is from Dan Klein's and Fred Foldvary's book, The Half-Life of Policy Rationales, which I recommend to you all as a good set of arguments for how

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065447132781670282003-10-06T08:32:00.000-05:002003-10-06T08:32:12.623-05:00

This Christian Science Monitor editorial from Thursday lays out the natural gas supply issues in the US very clearly. Note that it mentions that a new liquefied natural gas (LNG) terminal in San Francisco has been voted down. Such votes will lead to the persistence of high, and volatile, natural gas prices into the future.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065446863188646652003-10-06T08:27:00.000-05:002003-10-06T08:27:43.063-05:00

Tyler Cowen has a nice post on the economics of classical music. I think he's right, and that the success of classical music rests on philanthropist attention and on satellite radio. I also think that popular, charismatic, virtuoso performers will contribute to classical music's fate, by their presence or absence. Wynton Marsalis and Yo-Yo Ma are the type of attractive headliners that keep people

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065446355159407402003-10-06T08:19:00.000-05:002003-10-06T08:20:12.880-05:00

How exciting is this? Notwithstanding Eric Zorn's cranky bile saying that we should chill, the Cubs winning the NLDS is wonderful. This article gives some indication of how exhilirating the win is for fans old and young. Eric's wrong because this is the first time since 1945 that we have won a playoff series. The fact that the divisional seres did not exist until 1995 is irrelevant, and his

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065113405202660122003-10-02T11:50:00.000-05:002003-10-02T11:50:05.056-05:00

This interesting Baltimore Sun commentary by David Quayat highlights some of the economic and social problems seen in history in countries that rely on oil for their economic strength. Given what we've seen, especially in Saudi Arabia and Venezuela, his cautions are worth serious consideration.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065113161820201992003-10-02T11:46:00.000-05:002003-10-02T11:46:01.356-05:00

Here's a more extensive set of links to the articles I mentioned below. An Experimental Mind Having shaken the ivory tower and reshaped big government, Vernon Smith's ideas are revolutionizing business By Rana Foroohar Give All Iraqis a Share Auctions of state wealth go back to Rome, but no one has ever done it fairly. Now there's a chance to get it right in Iraq By Vernon L. Smith A New '

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065016369429936162003-10-01T08:52:00.000-05:002003-10-01T08:52:48.840-05:00

Didn't get tickets ... grrr. Oh well. But I wish there were some way that those of us who live in the neighborhood could have gotten first dibs.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065014676623400182003-10-01T08:24:00.000-05:002003-10-01T08:24:36.440-05:00

This Blogcritics post from Monday raises some very important points about the political dynamics behind the ethanol mandate that is included in both the House and Senate versions of the energy bill. The ethanol mandate makes little environmental or economic sense, unless of course you are a corn farmer. I'll have more to say on this point soon ...

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065014340945232272003-10-01T08:19:00.000-05:002003-10-01T08:19:00.833-05:00

Am waiting in the virtual waiting room for playoff tickets ...

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1065014292816343402003-10-01T08:18:00.000-05:002003-10-01T08:18:12.726-05:00

Neuroeconomics is a growing field, and is starting to get some attention outside of academia. See, for example, this Financial Times article from Tuesday on neuroeconomics research. They start by discussing trust games, and why researchers want to dig more deeply into some of the results that have come from laboratory experiments. Prof [Vernon] Smith suggests that many people have formed a habit

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064953732661214972003-09-30T15:28:00.000-05:002003-09-30T15:28:52.450-05:00

The two most recent posts there are quite entertaining and pithy. First, in commenting on the tedium and general lack of editing in the LOTR films, Alex Singleton observes Yet the Lord of the Rings films have netted lots of money. Bad films, making lots of money. Is this an example of market failure? Well, no. Because lots of people really like the movies. An important part of the free-market

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064953079606702292003-09-30T15:17:00.000-05:002003-09-30T15:17:59.536-05:00

Is reading David Hume. From his essay "Of the Jealousy of Trade," (1759): Nothing is more usual, among states which have made some advances in commerce, than to look on the progress of their neighbours with a suspicious eye, to consider all trading states as their rivals, and to suppose that it is impossible for any of them to flourish, but at their expence. In opposition to this narrow and

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064841440903799842003-09-29T08:17:00.000-05:002003-09-29T08:17:20.896-05:00

This week Newsweek has an intelligent article on experimental economics and its value in application to real-world problems. It starts with a profile of Vernon Smith and the work he pioneered that won him the Nobel last year, and illustrates the origins of experimental research: Smith did not set out to bring down the establishment. Back in 1956, when he was a young professor at Purdue

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064840612675269132003-09-29T08:03:00.000-05:002003-09-29T08:03:32.796-05:00

I spent the weekend at a beach house in Michigan with my husband and six close friends, one of whom is a die-hard Cubs fan. She couldn't even listen to the second game in the same room with the rest of us on Saturday, but instead sat outside and watched the lake. Thankfully we had a bottle of cheapie champagne in the house that had been intended for mimosas on Sunday morning, so we could

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064590970851016352003-09-26T10:42:00.000-05:002003-09-26T10:57:28.563-05:00

On Wednesday Tyler Cowen raised the following points about Callum McCarthy's Financial Times editorial on the London blackout: OK, the author is Callum McCarthy, chief energy regulator in the UK, and he presumably has a vested interest in defending the status quo. And I don't understand his convoluted take on overcapacity and price history, as I read McCarthy he is committed to both high and low

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064587590829483492003-09-26T09:46:00.000-05:002003-09-26T09:46:30.523-05:00

As with almost everything that Jonathan Rauch writes, including this recent Atlantic Monthly article on genetically modified food, this National Journal article on dos and do-nots instead of haves and have-nots is utterly insicisive and insightful. He does a nice job of summarizing research on poverty that has moved beyond the convictions of the early 1990s that any attempt at a behavioral

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064586696843186792003-09-26T09:31:00.000-05:002003-09-26T09:36:05.390-05:00

We were sitting here last night, watching the USA-Nigeria game in the Women's World Cup, in which Mia Hamm played brilliantly: Mia Hamm’s team mates have come to expect big games from her. But Thursday night’s performance in the USA’s 5-0 win over Nigeria was out of the ordinary even for the world’s all-time leader in international goals. Meanwhile, Hamm's fiance Nomar Garciaparra hit a home

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064524529574692832003-09-25T16:15:00.000-05:002003-09-25T16:15:29.500-05:00

Hal Varian's Economic Scene column today is a very clear and succinct analysis of the dynamics underlying the current state of politics in California. His summary of the electricity crisis is pretty sound (although he does persist in calling what they did deregulation, which it was not). A highly recommended read.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064416630628499422003-09-24T10:17:00.000-05:002003-09-24T10:17:10.610-05:00

With five games to go in the season, the Cubs are in first place in the NL Central. Who'd a thunk it? Back in June, when we didn't fall prey to our usual "June swoon", people started saying things like "if we can just stay in the running until September, then we have an easier schedule than either Houston or St. Louis, so we can have an end-of-season surge". So far, that seems to be the case,

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064416113233813312003-09-24T10:08:00.000-05:002003-09-24T10:08:33.290-05:00

For economics commentary from a British perspective, check out the new Adam Smith Institute blog (with thanks to William Sjostrom for the pointer).

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064414511726731162003-09-24T09:41:00.000-05:002003-09-24T09:41:51.463-05:00

Rick Mattoon of the Chicago Fed and I are the author's of the Chicago Fed Letter, October issue, and the topic is natural gas policy and implications for the Upper Midwest region. Regular readers of TKP and Tech Central Station are familar with my analyses of natural gas policy, and this letter reiterates some of it and combines it with valuable insights from Rick on the regional implications of

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064319565861021952003-09-23T07:19:00.000-05:002003-09-23T07:19:25.830-05:00

This BBC article describes a Shell oilfiled in Gabon where more wildlife congregates than in neighboring wildlife parks.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064318002034527292003-09-23T06:53:00.000-05:002003-09-24T09:42:53.603-05:00

Kudos to Kevin Brancato at Truck and Barter for his terse explanation of the broken window fallacy. I remember after the Mississippi River flooding in 1993, Bruce Babbitt saying something like "well at least the silver lining is that the destruction will create lots of work." I think I yelled loudly enough and long enough that my neighbors thought I had finally lost it. The broken window fallacy

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-106431747126305532003-09-23T06:44:00.000-05:002003-09-23T06:44:30.920-05:00

At the Volokh Conspiracy, Juan non-Volokh has a good set of posts on the economic and political dynamics underlying criticisms of the recent New Source Review changes, which I discussed in this post.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064316494958154562003-09-23T06:28:00.000-05:002003-09-23T06:28:14.776-05:00

Future Pundit was full of all sorts of interesting news while I was gone, including this post on using bacteria to extract methane from coal (and a sidenote on carbon sequestration), and this post on new organic materials to make cheap solar panels. One remarkable thing to note in his discussion of the efficiency of energy generation from the panels is how low the numbers are for solar -- these

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1064315147031920092003-09-23T06:05:00.000-05:002003-09-23T06:08:01.636-05:00

10. Gorgeous weather -- dry, sunny, overnight temps in the 50s, daytime temps in the 70s and 80s. 9. Gelato -- ate some every day. The best quality and flavor combo we found was at a place in Florence called Vivoli, where we got the cioccolatta ricca (rich chocolate) and crema d'arancia (orange cream). We also had a good zabalione gelato in Lucca, and good hazlenut gelato mixed with chocolate in

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1062953152436824662003-09-07T11:45:00.000-05:002003-09-07T11:45:52.506-05:00

The Knowledge Problem will be taking a two-week holiday, resuming on Sunday 21 September. I am headed to Budapest for a week to participate in the graduate student workshop of the Ronald Coase Institute and to present a paper at the annual conference of the International Society for New Institutional Economics (ISNIE). After that, a week's holiday in Tuscany. I'll post occasionally as possible

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1062952565108739692003-09-07T11:36:00.000-05:002003-09-07T11:36:05.180-05:00

My friend Jim Johnston is very knowledgeable about energy markets, and he had a commentary in the Chicago Sun-Times last week on how to improve grid reliability. Thus, we have a new pattern of generation and consumption that overlies the older locally oriented grid structure. It is a prescription for disaster that promises to persist unless we do something about it. In referring to the two

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1062939204529069242003-09-07T07:53:00.000-05:002003-09-07T07:53:24.553-05:00

The recent blackout in the Northeast and Midwest U.S. and Ontario have brought electricity transmission to the foreground of policy debates. In a new Reason study , Adrian Moore and I explore ways that technological change and innovative contracting practices create potential competition for the grid, or in other words, make the grid contestable. The executive summary of the study: The dramatic

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1062691840155085022003-09-04T11:10:00.000-05:002003-09-04T11:10:40.323-05:00

Here's a little grid roundup: a USA Today editorial from last week on the barriers facing transmission upgrades. Here's one they forgot: the tax treatment of the heavily depreciated asset base means that utilities have little incentive to sell their transmission assets to a more consolidated owner that could internalize a lot of these goofy and problematic transaction costs and incentives. The

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1062690958846295932003-09-04T10:55:00.000-05:002003-09-04T10:55:58.736-05:00

A lovely double entendre ... I encourage you all to check out Marginal Revolution, a new blog by George Mason University economists Tyler Cowen and Alex Tabarrok. Some of you may be familiar with Tyler from his research and his posting at The Volokh Conspiracy. Tyler and Alex are incredibly insightful and sure to be full of engaging and thought-provoking analyses. I am already indebted to Tyler

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1062688557352641072003-09-04T10:15:00.000-05:002003-09-04T10:40:08.950-05:00

Okay, let's review. In the last two weeks of August we had 1. a burst pipeline in Arizona 2. six refineries out of service for up to a week because of the blackout 3. an impending Labor Day holiday So the increase in gasoline prices was the result of price gouging, right? At least that's the contention of many politicians, who are only too happy to spend our tax dollars on yet another federal

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1062255785033739742003-08-30T10:03:00.000-05:002003-08-30T10:03:05.003-05:00

Where to begin ...? With this Contra Costa Times article and this Sacramento Bee article. The political theater that is the California recall election is certain to elicit some very bad policy ideas from candidates, and the prize thus far goes to Cruz Bustamante. On Thursday Bustamante advocated regulating the gasoline industry as a utility. According to the Contra Costa Times, "Gas prices

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1062172187629276552003-08-29T10:49:00.000-05:002003-08-29T10:55:25.713-05:00

Few environmental policies and response to them are as caricatured as new source review. Earlier this week the EPA finalized the changes to new source review that it proposed in December 2002. Basically, this ruling clarifies what kinds of equipment replacement will and will not trigger new source review, and it allows firms (typically power plants, refiners, etc.) certain equipment replacements

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1062161438135895172003-08-29T07:50:00.000-05:002003-08-29T07:54:21.153-05:00

Okay, another one ... but at least this one lasted only an hour, and was probably due to a transformer failure in south London, according to this Financial Times article. Not being an engineer, I don't know if the recent, sustained strains from the heat wave has weakened any part of the transformers on the system ... I do recall in 1998, when during a hot Chicago summer ComEd customers suffered

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061995404113825042003-08-27T09:43:00.000-05:002003-08-27T09:43:24.070-05:00

I've got to spend the day preparing my fall classes, so I am happy to have a guest post from my knowledgeable friend and colleague Mike Giberson. Mike wrote in response to my claims yesterday that the grid we've got is rigid and maladaptive. I was insufficiently clear: the regulatory treatment of transmission has made it maladaptive to changes in other parts of the supply chain. Here are Mike's

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061911257323873282003-08-26T10:20:00.000-05:002003-08-26T10:20:57.406-05:00

No surprise there: blackout took 7 refineries offline for a few days, there was a big pipeline rupture in Arizona, it's coming up on Labor Day weekend ... Here are some links to articles discussing the gas price spike, from the Los Angeles Times (registration required), CNN/Money, and the Associated Press. I agree with Stephen Karlson's assessment of gasoline prices: When you see unleaded

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061910567416874052003-08-26T10:09:00.000-05:002003-08-26T10:11:57.073-05:00

The blackout has raised public interest in distributed generation (DG). DG technologies have gotten more cost effective over the past decade, and many businesses that cannot afford power outages use DG for backup. See, for example, this Time article on net metering, which is allowing your meter to run backwards and thus sell power back to your local utility at the same price you get charged for

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061908137603890142003-08-26T09:28:00.000-05:002003-08-26T09:31:35.826-05:00

Paul Phlip at Long Harvest notes an oped in the NYT on the electric grid by Steve Stogratz. Stogratz makes some really important points in his argument, including the fact that we should think about the grid in a more organic and less mechanistic way, and that we should abandon the unrealistic idea about total control and perfectibility. We need to stop pretending that the grid is ever going to

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061907565205732812003-08-26T09:19:00.000-05:002003-08-26T09:20:03.486-05:00

Here's an article from today's Tribune on wind power in Illinois. Wind power is too intermittent to be totally reliable in the absence of a better storage technology than we currently possess, but it may take strain off of the grid (especially if it's a hot, late afternoon wind ...). Wind power also receives government tax subsidies, thought to be necessary because wind (and solar) power are more

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061567466978678922003-08-22T10:51:00.000-05:002003-08-22T10:51:06.926-05:00

Now is a propitious time to remind folks of a Tech Central Station article of mine from August 2002 on how market-based retail electricity pricing is good for consumers and good for the environment: One of dynamic pricing's most enticing long-run benefits is that it induces conservation. If it's expensive to produce electricity in a peak hour and consumers face that price difference across a day

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061567093415664952003-08-22T10:44:00.000-05:002003-08-22T10:44:53.353-05:00

Here are some analyses of the more technical aspects of power systems: Peter Kaminski on who pays for reliability, Sparkey's outstanding post at Sgt. Stryker, Steven DenBeste, in a second post to follow up, and Shots Across the Bow. Very helpful detail for the supply and infrastructure sides of the issues.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061566593677996652003-08-22T10:36:00.000-05:002003-08-22T11:22:30.560-05:00

Any day is a good one when I channel Tyler Cowen, who points us to an article in the Washington Post on decentralized power. This New York Times article from last week about Hen Island points out many of the same strategies for removing yourself from grid reliance. Technological change in generators and in solar panels have made such redundancy affordable and, as I argue in this article on the

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061565426904030262003-08-22T10:17:00.000-05:002003-08-22T10:17:06.986-05:00

The retail electricity deregulation oped that Vernon Smith and I wrote on Wednesday is available at the Reason website.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061564522983190182003-08-22T10:02:00.000-05:002003-08-22T10:02:02.910-05:00

This table from the Energy Information Administration at the DOE indicates some estimates of the cost per mile of constructing different types of power lines: 60 kv, wood pole: $120,000-130,000 230 kv, steel pole, double: $230,000-550,000 230 kv underground: $3,700,000 Yes, that's 3.7 million for a single high voltage wire, per mile. And that was in 1995 dollars.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061394703939996082003-08-20T10:51:00.000-05:002003-08-20T10:53:01.820-05:00

Chris King at eMeter sends me the following information as a follo-up to Vernon's and my oped today: Re your editorial, the equipment cost hierarchy you presented is debatable. Regarding load control, the expense is higher than implementing advanced metering, since the device cost is about the same (around $50), but installation is much more complex. A meter is a simple "unplug the old, plug in

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061394449371776272003-08-20T10:47:00.000-05:002003-08-20T10:47:29.440-05:00

Yesterday I had a lovely conversation with Don Luskin while he was working on his National Review Online column and his blog post on Paul Krugman's silly column on the blackout. It was a delightful chat about deregulation, the benefits of being more interconnected, and the value creation that comes through markets. Don said it more succintly than I have been able to: What she means is that,

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061391934936795982003-08-20T10:05:00.000-05:002003-08-20T10:05:34.990-05:00

This New York Times article suggests that sharp wholesale electricity price spikes last Friday dissipated quickly, and did not result in a lot of profits for the traders.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061384794962064532003-08-20T08:06:00.000-05:002003-08-20T08:06:35.033-05:00

NIMBY concerns threaten to stymie attempts to build more power lines, which is one reason why we should enable customer retail demand response as a tool to empower consumers and to stabilize the grid.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061382575645327462003-08-20T07:29:00.000-05:002003-08-20T07:29:35.630-05:00

Vernon Smith and I have a commentary in today's Wall Street Journal (subscription required). A systematic rethinking of the power demand and supply system -- not just transmissions lines -- is required to bring the energy industry into the contemporary age. Eighty-five years of regulatory efforts have focused exclusively on supply -- leaving on dusty shelves proposals to empower consumer demand

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061304505957607482003-08-19T09:48:00.000-05:002003-08-19T09:48:25.883-05:00

This Chicago Tribune article provides an example of how technology and intelligent monitoring can empower customers to use less energy, just by being informed about your actual consumption, which is a capability that the standard watt meter does not possess.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061304285797165942003-08-19T09:44:00.000-05:002003-08-19T09:44:45.723-05:00

Here are a couple more articles on the obstacles facing a national energy policy: this New York Times article on how the nation's governors have difficulty speaking with a unified voice on energy matters, and this New York Times article on the difficulties Congress faces in separating out an electricity bill from the large omnibus energy bill proposals.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061301336409862412003-08-19T08:55:00.000-05:002003-08-19T08:55:36.286-05:00

The blackout last Thursday has produced some hyperbolic hysteria about the perils and vulnerability that come with being so interconnected. But decentralized interconnection is also a source of stability and growth, both physically and economically. Albert-Laszlo Barabasi, a physicist and author of Linked FINISH, had an oped in Saturday's New York Times about the pros and cons of

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061247344461639982003-08-18T17:55:00.000-05:002003-08-18T17:55:44.346-05:00

Randall Parker has a nice post on nuclear power, citing a NYT oped and a study by two MIT professors. They claim that nuclear will become an economical alternative if regulation of carbon dioxide proceeds. Very interesting analysis.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061246610247499042003-08-18T17:43:00.000-05:002003-08-18T17:43:30.203-05:00

I have a Reason commentary on natural monopoly theory. Excerpt: Many technological and market innovations have reduced the natural monopoly rationale for traditional electric industry regulation. For example, consider distributed generation. Distributed generation (DG) is the use of an energy source (gas turbines, gas engines, fuel cells, for example) to generate electricity close to where it

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061246275058872682003-08-18T17:37:00.000-05:002003-08-18T17:37:55.010-05:00

I strongly recommend these two articles if you want a good, thorough analysis of what's going on with electricity: This Wall Street Journal article by Rebecca Smith is a really thorough study. The main defects are transmission systems badly in need of improvement and a chaotic combination of regulated and deregulated markets. The unsteady regulatory situation, among other factors, inhibits the

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061245693221558032003-08-18T17:28:00.000-05:002003-08-18T17:28:13.250-05:00

I was intending to comment on all of these commentaries, but some writing has come my way that has taken more time than I thought ... in any case, for your convenience and my own, a compendium of commentaries: Robert Kuttner from the New York Times Saturday: no great surprise, he blames deregulation for the blackout. This ill-placed blame ignores several things. First, it does not stand up to

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061220320582781452003-08-18T10:25:00.000-05:002003-08-18T12:19:36.873-05:00

I must take this opportunity to thank those of you who directed traffic this way: Tyler Cowen, Steve Verdon, and Megan McArdle aka Jane Galt all posted links to the Knowledge Problem, as well as offering their own cogent and insightful commentaries. Tyler also mentioned the Watts paper on cascading failures, and has endeared himself to me even further by calling me the "goddess of electricity

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061219483502867522003-08-18T10:11:00.000-05:002003-08-18T10:11:23.576-05:00

For you techies out there, here's a paper by Duncan Watts on cascading failures from the Santa Fe Institute [ironically, I was reading this paper for my own general edification early last week!]. And a knowledgeable reader, Eric Krieg, sends this link to a paper on high-phase power. Eric says Basically, you can pump more juice through a 6 phase power transmission line corridor than you can

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061218556441775032003-08-18T09:55:00.000-05:002003-08-18T09:55:56.340-05:00

Tech Central Station has a couple of electricity articles this morning: one by Vaclav Smil on the fragmented nature of our grid and the consequences of that fragmentation, and one by me on how deregulation is not to blame and how retail demand response can make the grid more reliable.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061218097727323132003-08-18T09:48:00.000-05:002003-08-18T09:49:50.850-05:00

Some articles on the possible causes and the fallout from the blackout: Overloaded power lines in northern Ohio may be to blame, although the utility that owns and operates the lines in question thinks that their imbalances were a symptom of a larger problem: Baird said FirstEnergy is evaluating information that shows there were "unusual electric conditions and disturbances" throughout the

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061163279976543592003-08-17T18:22:00.001-05:002003-08-17T18:34:40.033-05:00

I'll have more analysis and commentary on electricity policy tomorrow, after I've rested and digested the weekend's news. Please come back then (or set your aggregator to my RSS feed)!

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061163179267637982003-08-17T18:22:00.000-05:002003-08-17T18:32:59.330-05:00

Morning: the cat sticks her wet little nose into your eye socket to wake you up. Husband makes tea, french toast and turkey bacon while you work on some electricity blackout writing. Weather: high of 78F, low humidity, not even a wispy cloud in the sky. 11:30-2:30: kayak in the 3-4 foot waves on Lake Michigan with some of your favorite people on the planet. 3:30-4:30: walk from home out to

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1061162698584593532003-08-17T16:21:00.000-05:002003-08-18T08:40:05.063-05:00

This post is the first from my brandy-new Macintosh Powerbook G4 12" laptop. It's utterly zippy -- stylish, small, screamin' fast, plays my Pride & Prejudice DVD and all of my tunes from my IPod beautifully. And I am grateful to my husband, whose technical virtuosity makes it possible for me to live in a cross-platform world (we run Windows, Mac, Linux and OpenBSD at home).

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1060988772972343212003-08-15T18:06:00.000-05:002003-08-15T18:19:11.696-05:00

We have updated Reason's electricity pages to include a Reason blackout resource center. Transmission-related information will be provided here, updated regularly. One very valuable resource available on our site is Ken Silverstein's column on the blackout. Ken is a very incisive observer of electricity policy, and he correctly points out that The wires business must evolve to meet the needs of

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1060988054042570802003-08-15T17:54:00.000-05:002003-08-15T17:54:10.806-05:00

A quick break ... this commentary on electricity grid vulnerability from November 2001 is still, or even more, relevant today, even though my focus in this commentary was terrorism. A teaser: While the Sept. 11 attacks disrupted communications and business operations on a massive scale, many businesses recovered their data quickly, and telecommunications companies restored service quickly,

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1060972689797625672003-08-15T13:38:00.000-05:002003-08-15T13:38:08.946-05:00

I am completely snowed under with interviews and have not yet been able to compose my thoughts beyond the soundbites. In the interim, please visit Reason's website for links to our electricity work, including this commentary on network reliability in California.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1060959694688829832003-08-15T10:01:00.000-05:002003-08-15T10:24:36.206-05:00

A good overall story from Reuters, and one from the New York Times. A Bloomberg Energy article pointing to the fact that the power outage meant that five refineries in Ohio, Michigan and Ontario have gone offline, so gasoline prices may be affected. But lots of gas stations are closed because their pumps run on electricity. This CBS Marketwatch story describes how New York City is getting back

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1060952596722482302003-08-15T08:03:00.000-05:002003-08-15T08:16:21.440-05:00

The grid has been the subject of underinvestment for the past decade, and lots of industry folks, industry analysts, and government officials have put their heads together to think about how to make the grid more robust for the 21st century. This Washington Post article puts it nicely: The country's halting moves toward electricity deregulation over the past decade have dramatically increased

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1060951687134875192003-08-15T07:48:00.000-05:002003-08-15T07:52:48.673-05:00

I got bumped from Greta; between Governor Pataki and the fact that the New York phone lines were fading in and out. Today it's lots of radio interviews, and I'll post some about what could cause such a thing, While I'm doing radio and trying to get a little sleep, Glenn has some further links, including MIT Energy Lab study link from Suman Palit. This study, from March 2000, is by Yong Yoon

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1060903592537169942003-08-14T18:26:00.000-05:002003-08-14T18:31:01.940-05:00

Glenn Reynolds has a post that gathers a lot of info about the northeast power outage. I've not been blogging it because I've been doing radio interviews. If you stay up late to watch Greta van Susteren on Fox News, and then a special report, you'll probably see me.

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1060869867076979902003-08-14T09:04:00.000-05:002003-08-14T09:09:01.550-05:00

To the same stuff, according to this post on the contemplative music he's listening to. Specifically, we overlap on Tom Waits (early and late for me, I like his "rough and ragged" recent voice), the Verve (I have always been a fan of British music, this is what happens when you come of age in the mid-80s), and Miles Davis. Actually, though, lately it's been lots and lots of Coldplay and Kurt

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1060782713854128432003-08-13T08:51:00.000-05:002003-08-13T08:56:41.440-05:00

I'd like to welcome two new babies: Michael Brancato, son of Kevin Brancato and his wife, and Mateo Firth, son of Colin Firth and his wife Livia Giuggioli. Benvenuti!

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1060780874580785312003-08-13T08:21:00.000-05:002003-08-13T08:28:10.893-05:00

In the same post, AtlanticBlog mentions Thomas Sowell on economic and demographic change in California. Sowell asks this question: After years -- indeed, generations -- of being a magnet for people and businesses, California is now exporting both, including particularly young people. Why? His hypothesis: One reason is that California's politicians are following a strategy which has worked

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1060778866585143012003-08-13T07:47:00.000-05:002003-08-13T07:52:34.786-05:00

I think Frederic Bastiat was one of the most insightful writers on state power. He starts off his major work, The Law, with a bang in the introduction: If every person has the right to defend even by force—his person, his liberty, and his property, then it follows that a group of men have the right to organize and support a common force to protect these rights constantly. Thus the principle of

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1060778045249971882003-08-13T07:34:00.000-05:002003-08-13T07:38:53.630-05:00

I've forgotten to check Eric Rasmusen's blog lately, and in revisiting there this morning I noticed his interesting post on Pascal, proof and custom. The passage he chose to quote, from Pensees, is striking, and not something that I've typically associated with Pascal: For we must not misunderstand ourselves; we are as much automatic as intellectual; and hence it comes that the instrument by

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1060700726832937952003-08-12T10:05:00.000-05:002003-08-12T10:05:26.813-05:00

Jonathan Rauch has a typically good column on spam and ways to deal with it. He recommends what I think is the best approach: that we have property rights in our email inbox! The spam problem, though new in form, is an instance of a very old and familiar dilemma, which economists often call the tragedy of the commons. When any resource is both valuable and freely available, people tend to

lkkineticnoreply@blogger.comtag:blogger.com,1999:blog-3558354.post-1060698066444456372003-08-12T09:21:00.000-05:002003-08-12T09:21:06.546-05:00

OK, for those of you who use aggregators, here's the address of my RSS feed: http://knowledgeproblem.blogspot.com/rss/knowledgeproblem.xml

lkkineticnoreply@blogger.com