Fracking, The Fall of the Wall, minimum wages, dinosaur killers, and other interesting matters

Mail 768 Sunday, March 24, 2013

I have a huge backlog of interesting mail. I will try to group it into subjects and clean it up this week. Except that it is tax season..

In today’s View https://www.jerrypournelle.com/chaosmanor/?p=13050 we discuss fracking and natural gas flareoff.

flare off

Dr. Pournelle,

The flare off in Williston is similar to burned off gasses at almost every gas or oil well, and common to refineries, as well. They’re all over Texas, and here in West Virginia.

The oil and gas exploration was done in North Dakota and Eastern Montana beginning over 30 years ago — those farmers were getting rich selling their mineral rights in the late 70’s and early 80’s (while I was fooling around with Minuteman missiles in usually somewhat drier holes). The coal gassification and carbon sequestration that we corresponded a couple years ago was also begun at that same time. The lack of a pipeline in North Dakota is at least one reason partly given as justification for the road improvements that you were once critical of in your blog.

Reflecting, I seem to have followed the oil and gas industry around the country for 30 or 40 years without being directly involved with it. It has always my neighbors who were in it, even during my short stay between Lompoc and Santa Maria. Always the bridesmaid…

According to people I’ve spoken to, the overpressure light gas product that is burned off during the production and refining is too volatile to capture easily, and too dangerous to vent without combustion. It isn’t the commercial product that is wasted. I’ve always thought that a small steam generator could produce electricity to partly supply the sites intermittently, but there’s been none developed cheaply enough for common use.

-d

North Dakota lights

One of your readers says that the lights seen in North Dakota by satellite are from flaring. I would think that a well flare, which is essentially just a torch, would not produce enough light to be seen from space. Active well sites, however, look like small cities when the rig is lit for night drilling.

Best regards,

M Walters

There certainly is a lot of brightness across a one hundred mile stretch there in North Dakota. The important thing to note is that we have the technology and the resources to get out of this economic depression if we really want to; the fact that this effort is stalled says a lot about the state of the republic. The Framers would have left such matters to the states, and not have the federal government interfere so much. Perhaps we will rediscover some of the lost arts we once had.

In Spring of 1989 Roberta and I visited the Soviet Union for the first time. There had been a period in my career when I was forbidden from visiting the USSR, and another period when I would not have dared to, but we went with a party that included a number of others previously forbidden from going to Moscow, as well as political and journalist dignitaries, and I wasn’t worried; and indeed it was a pleasant excursion and quite enlightening. I was even honored with a formal dinner by the Soviet Academy of Sciences. Mr. Gorbachev was in power in the USSR, and he was desperately trying to thaw out the Cold Was and convert the USSR into a liberal socialist state similar to other European nations.

Many wished him well, including both me and President Reagan; indeed it had been the intention of the SDI policy to bring something like that about. The key to ending the Cold War was to allow the USSR to stand down from its mission to liberate the world in the name of communism, release the captive nations, and reduce its enormous inventory of nuclear weapons and delivery systems by running up the price of a big nuclear establishment. Mr. Reagan offered the olive branch of removing the medium range missiles from Europe and a new Strategic Arms Reduction Treaty at the same time that the US began serious funding of the Strategic Defense Initiative he proposed in his “Star Wars” speech. SDI was strongly advocated by the committee I chaired to prepare the space policy papers for the incoming Reagan administration transition team. But that’s another story. The point I am approaching was that as late as Spring of 1989 none of us thought that the Berlin Wall would fall by November of that year, and that the Soviet Union itself would come apart, freeing the captive nations of Europe not long after.

The Foreign Policy Research Institute often has good papers on both history and policy.

FOREIGN POLICY RESEARCH INSTITUTE

Dear Readers,

Taking note that on Sunday, April 7, Ignat Solzhenitsyn will conduct the Chamber Orchestra of Philadelphia in a concert commemorating the Fall of the Berlin Wall, we asked FPRI’s Ron Granieri, a historian of modern Germany, to reflect on the fall of the wall and German reunification. What he has produced — The Fall of the Berlin Wall, the Power of Individuals, and the Unpredictability of History <http://www.fpri.org/articles/2013/03/fall-berlin-wall-power-individuals-and-unpredictability-history> — is both illuminating and moving.

While this history is far from complete, it will remind older readers of things best not forgotten, and many readers may encounter much they were never taught in school. The fall of the Wall was sudden, and not anticipated by many. By 1989 Stefan Possony, who was one of the originators of SDI and one of the strategists of the protracted conflict had been disabled by a stroke. Whether he anticipated the fall of the wall is hard to tell: those of us who visited him including my son who was his godson were certain that much of the old brilliance was still in there somewhere, but the frustrations of trying to communicate often reduced him to tears. I am thankful that he lived to see the Wall come down, and the USSR dissolved. If he saw it coming he was the only one who did.

In June 1989, SPD Minister President of Lower Saxony Gerhard Schröder famously remarked: “After forty years of the Federal Republic we should not lie to a new generation in Germany about the chances of reunification. There are none.” In late July, Joschka Fischer of the Greens, future Foreign Minister, went one better, dismissing the demand for reunification as “a dangerous illusion” and called for removing the call for reunification from the preamble of West Germany’s Basic Law. Even later that fall, Fischer said “Forget about reunification; we should shut up about that for the next twenty years.”

Three months later the Wall came down, and the USSR was doomed.

Previously we discussed minimum wages. I have chosen some representative views:

minimum wage raise and consequences

I wonder about the " living wage " thing as has happened in San Francisco and elsewhere where now the minimum wage is over $ 10.00 an hour.

Of course, businesses will raise their prices to compensate for the raise in wages and the corresponding costs for paying for contributions by the employer to unemployment, social security and the like.

I do wonder why no one ever seems to mention what I think would be an obvious result of a $ 22.00 minimum wage,

Wouldn’t it cause food, energy and other costs to go way up thus raising inflation and therefore making the purchasing power of those suddenly " richer " employees even less ?

Heinlein is still right.

TANSTAAFL.

I do know that even in San Francisco which has a kind of rent control, rents continue to go up.

A studio apartment in the city’s Tenderloin ( not the best area to live in for sure ) that rented for $ 200 a month up to 1980 now rents for $ 1200 a month.

If you made $ 22.00 an hour you’d have to work 54 hours just to pay the rent.

If you make the " living wage " you’d have to work about 108 hours to pay the rent.

And that’s before deductions.

This is something the OWS types never think about.

I don’t know about the rest of the country, but here in the SF Bay Area it’s one of the most expensive places to live.

And with people having their hours cut below 30 hours a week to avoid the onerous provisions of Obamacare, it isn’t going to be any easier for lower paid workers.

george senda

Well, of course we can’t let just anyone live in the elite areas like San Francisco and Fairfax, can we? Although there must be someone to hew the wood and draw the water.

Jerry,

Note the chart here: http://www.financialsense.com/contributors/asha-bangalore/major-economic-reports-mixed-message-with-unfavorable-tone

Note the month in which the unemployment rate inflected: July 2007. The month of the second of three increases in the minimum wage enacted by the Pelosi-Reid Congress in 2006 and signed by President George W. Bush’s.

QED, and it’s only Bush’s fault because he didn’t veto their mad scheme to increase the minimum wage 41%in 24 months, which he should have. The economy absorbed the first raise (July 2006 from $5.15 to $5.85, a 14% increase) with fairly minimal effect on employment, but the second increment (July 2007, to $6.55) combined with the then-bursting housing bubble, were the (synchronized,synergistic, and with George Soros funding the Democrat Party, certainly intentional) two triggers of the current downturn. Given that unemployment remains high, another 25% increase in minimum wage (from the $7.25 reached in July 2008 to the $9.00 requested by the President) would pretty much shut the country down.

That’s a definition, not an opinion.

Jim

The following contains a short dialogue continued for some time.

More on minimum wages (possible duplicate – retrying after crash)

You covered this a bit over a year ago, and you were kind enough to print my observations on it then. (Those are at https://jerrypournelle.com/chaosmanor/?p=4295, and I worked them up into an article at http://www.spectacle.org/0112/lawrence.html).

Revisiting the topic just now, you quoted Milton Friedman once saying that every economist knows that minimum wages either have no effect or create unemployment, and that this was not an observation, it was a definition. You added that that should also be self evident.

It turns out that Milton Friedman was oversimplifying. There are exceptions which are even covered in introductory economics texts, so that that self evident thing isn’t quite true after all. By chance, I recently went into this in a blog exchange at http://statelymcdanielmanor.wordpress.com/2013/02/12/adventures-in-obamaland-the-sotu-2013-condensed-version, which I append below for convenience. The take away point is that there is often a small, sweet spot, in which a low, mandated minimum wage really does help – that is, it improves take home pay rates, numbers of workers, and all up production. The catch is that the common sense result cuts in very early, and politicians usually go for that instead of doing it right. Brad Delong reports that the consensus in the economics trade today is "… the EITC and the minimum wage have different weak points–too high a minimum wage will have a substantial disemployment effect, and too high an EITC does create incentives to pad your hours. A mixed strategy helps attenuate both these flaws."

I also noticed your follow on about Distributism. As far as I know, only some Distributists advocate getting it the way you describe, by forcible redistribution. Although some do, possibly because they see it as the fastest path to their omelette and aren’t much worried about the broken eggs involved, there are others. These more philosophical Distributists have it mind as a standard or reference to steer by and try to get to, but they are more willing to consider less destruction and force on the way there (my tax break approach to wage support might serve as one beginning, since it would actually reduce current burdens). For some Distributists, it might be enough just to get rid of the institutional support for present arrangements, if they think that generational change would do the rest fast enough for their tastes; you can see where the temptation for a quicker fix hits the rest of them.

By the way, distractions including a dying computer have kept me from emailing you feedback lately – I had to compose this off line, saving between crashes. Would you like me to catch up on feedback once I get a new computer, and if so would you prefer individual messages or a big compendium one?

That minimum wage blog exchange follows:-

<BLOCKQUOTE>

In this case, common sense need not be our guide at all, or our sole guide in any case. The history of such political hikes makes quite clear that they reduce, not increase jobs.

</BLOCKQUOTE>

Actually, the history is mixed, with any general pattern lost in the noise. Current best research suggests – no more than that, in my view – that a mandated minimum wage can be moderately helpful as part of a larger strategy that also includes other measures. Brad Delong recently went into it <A HREF="http://delong.typepad.com/sdj/2013/02/yes-thoughtful-economists-think-raising-the-minimum-wage-right-now-is-a-good-idea.html">here</A>, introducing it with "I would point out that the EITC and the minimum wage have different weak points–too high [emphasis added] a minimum wage will have a substantial disemployment effect [emphasis added], and too high an EITC does create incentives to pad your hours. A mixed strategy helps attenuate both these flaws." (My own view is that the best thing, if we start from here, is the tax break approach I discuss <A HREF="http://www.spectacle.org/0112/lawrence.html">here</A>, covered in more detail in the work of mine and of Professors Phelps and Swales that it links to.)

<BLOCKQUOTE>

Minimum wage jobs are essentially for teenagers, unskilled and inexperienced children, entering the workplace for the first time.

</BLOCKQUOTE>

No, not essentially but accidentally (in the U.S.A.). That is, it is an accident of recent U.S. circumstances. Things are different elsewhere, and more relevantly to your concerns, they are becoming different in the U.S.A., and indeed have already done so to a considerable extent.

<BLOCKQUOTE>

But as you noted, I suspect we essentially agree that now is not an appropriate time to raise the minimum wage.

</BLOCKQUOTE>

We don’t agree, because my position is subtler:-

– It would probably help a little to raise the minimum wage a little, now, because of the mechanism I will outline below.

– The actual proposals are probably for too great an increase to be constructive, because that’s what politicians usually go for.

<BLOCKQUOTE>

There is, to me, no appropriate time. It’s not the government’s business.

</BLOCKQUOTE>

Sort of. That is, the government should never have been in that game in the first place, and people’s personal resource bases should never have been destroyed over the generations. That ideal world would have been rather Distributist (google it), with people working for themselves or for others for low, free market top up wages and getting the rest of what they needed from their own private resources (if they were working for themselves, their drawings would fold both of those in together).

But it’s not like that. In the old phrase, they break your legs and give you a crutch. That creates dependency in a poison pill way: simply stopping government support just like that would leave people helpless, with just the metaphorical broken legs. So, on the principle of you break it, you bought it, it is the government’s business to provide support – only, not in the present, continuing way that perpetuates the cycle of dependency the government itself created but as part of a transition that gets us out of here (the tax break system I linked to would work as the first step of such a transition). Naturally, the government would never do that if it could help it, but it still owes it, morally speaking.

Now, as promised, for how mandated minimum wages really work out. Murray Rothbard’s <A HREF="http://lewrockwell.com/rothbard/rothbard315.html">view</A> is typical of the faulty common sense understanding. It’s basically all bullshit because he doesn’t know what he is talking about, apart from his description of the unions’ interests in all this. It only works out like that when the mandated minimum wage is too high relative to the effect of ordinary hiring on the employers’ cost patterns. But when – as often happens – the employer is a significant one in a local area, or operates nationwide but is a big presence everywhere, and the mandated minimum wage is comparatively low, other things happen that change the outcomes. I already mentioned that Lipsey’s Positive Economics explains this quite well using graphs, but as I can’t do that here I will bring it out with a pair of tables using example numbers (I hope the tables are formatted OK! please reformat them if necessary):-

<BLOCKQUOTE>

Minimum wage

Number of Wage rates Total Incremental Total Total net Marginal

employees needed wages utility ($) utility ($)value value

0 9 0 0 0

1 9 9 15 15 6 6

2 9 18 14 29 11 5

3 9 27 13 42 15 4

4 9 36 12 54 18 3

5 9 45 11 65 20 2

6 9 54 10 75 21 1

7 9 63 9 84 21 0

</BLOCKQUOTE>

With this pattern of utility that each additional employee gives to the employer, a mandated minimum wage means that the employer is best off with either 6 or 7 employees (it comes out the same).

<BLOCKQUOTE>

Varying wages

Number of Wage rates Total Incremental Total Total net Marginal

employees needed wages utility ($) utility ($)value value

0 0 0 0 0

1 1 1 15 15 14 14

2 2 4 14 29 25 11

3 3 9 13 42 33 8

4 4 16 12 54 38 5

5 5 25 11 65 40 2

6 6 36 10 75 39 -1

</BLOCKQUOTE>

With this pattern of utility that each additional employee gives to the employer, a floating wage means that the employer is best off with just 5 employees. That’s fewer than with a mandated minimum wage!

What’s going on? Well, when each additional employee is hired, the employer has to increase what he gives to all the employees he already has as well, or they would just quit and re-apply and he would have to take them (or he would have to hire yet others who knew that they could hold out for that much). So the additional cost of each additional employee is not that employee’s wages but that employee’s wages plus the extra that has to be paid to all the others together. That’s not much more each, but it’s quite a bit for all of them together, and that decreases the optimum staffing level – so, with these numbers, a mandated minimum wage gives both more employment and higher wages!

Now, this doesn’t just happen because I found numbers in some sweet spot (in fact, these are the first numbers I tried). What the graphs and equations would tell you, if you could find them, is that under quite ordinary conditions there’s always a sweet spot of some size just above the "free" market wage – because those quite ordinary conditions aren’t actually a free market but a market with employers dominant enough that their own hiring affects conditions more broadly.

Yours sincerely,

P.M.Lawrence

The question is whether find the sweet spot is worth the price of letting the government camel have his nose in the tent. Once you concede that the federal government ought to tinker with such matters you have changed the nature of the Union. I have no objection to leaving it to the States to find the sweet spot you think is almost inevitably there, and I agree that the negotiation isn’t always equal; the question is whether the cure is not worse than the disease.

I wish your computer a speedy recovery and I apologize for the delay in getting this up; things have been a bit hectic here. I always appreciate your comments.

The death of our United States

Dr. Pournelle,

I have a lot of time to think during my daily commute now, and this is something that I think I think.

Historians will look back and mark as the death throes of the United States of America, the era when the meaning of the word "Freedom" changed from explicitly guaranteed personal liberty to an ever expanding list of invented rights and entitlements that must be provided by the government and paid for by someone else.

Everyone thinks their personal favorite cause is a "right", which must be not only protected but enabled by the govt. Our rule of law is therefore perverted to give legitimacy to a chorus of demands for special treatment. This is not equality nor freedom, but is the manifestation of the tyranny of the majority warned against by our founding fathers.

There’s more to it of course, but that pretty much sums it up for me.

Sean

It used to be that discussion of “positive” and “negative” rights was part of elementary civis discussion. In the USSR, for example, there were no “rights” but there was a series of duties and regulations governing the actions of the militia and the prosecutors that was supposed to ensure rights; but there was nothing like “Congress shall make no law” commandments enforceable by an independent judiciary.

Now there is little such discussion in any classrooms at any level. The usual academic assumption is that government ought to Do Good, not prevent evil. “Negative” rights are of no use according to the usual civics instructions now.l

A remarkably honest article about Harry Dexter White.

<http://www.foreignaffairs.com/articles/138847/benn-steil/red-white?page=show>

Roland Dobbins

White and those like him were part of the fuel that drove Senator McCarthy out of bounds.

Dinosaur Killer Likely To Be A Comet Not Asteroid

http://www.bbc.co.uk/news/science-environment-21709229

In which case we can’t predict when the next one will turn up..

It is by no means certain which it was but this shifts the odds

Neil Craig

Of course we told you so…

Asteroid headed toward Earth? ‘Pray,’ NASA advises | Fox News

Jerry:

Hopefully this is a teachable moment.

http://www.foxnews.com/science/2013/03/20/asteroid-threat-earthly-budgets/?intcmp=features

We had a much bigger, not so near miss more recently. The improbability of so many near misses within such a short period of time suggests that God is trying to tell us something.

I believe that there is an error her regarding the size of near Earth objects that NASA has been tasked with detecting. Detecting objects 87 miles across should be easy while detecting objects 87 feet across is challenging. Objects smaller than 87 feet or ~ 25 meters across pose a significant danger.

Volume of 25 meter asteroid = 16,000 cubic meters.

Assumed density of a near Earth asteroid is 4

Mass of 25 meter asteroid ~ 60 million tons or 60 billion kilograms.

Impact energy at 40 kilometers per second = 5 eex19 Joules.

Equivalent to 11,000 Megatons yield.

It wouldn’t be Lucifer’s Hammer, but the scaling laws for nuclear weapons suggests that the probable lethal radius would be about 200 miles.

James Crawford=

And if we had twenty years?

But then I have :

faulty math in asteroid threat example

The Asteroid strike math is off by an order of 1000—math error ? double x meter^3 to Kilos?

11 mega ton strike not 11,000 Mega ton,

We’d never evolved if his math was correct.

Peter f Foley

It is still a formidable event…

Finally, maybe.

We know beyond a shred of doubt that portable electronic devices don’t interfere with aircraft electronics because the airlines are now putting iPads in the cockpit for use as aircraft manuals and so forth.

But we’ve known this for years, because aircraft aren’t falling from the sky.

People do not actually *turn off* their mobile phones, tablets, whatever. They simply blank/lock the screens of their devices. My guess is that maybe 1/10th of 1 percent of flyers actually truly turn off their electronic devices when traveling on airplanes.

So, given that aircraft aren’t constantly crashing, it’s pretty obvious that the claims of the airlines and the FAA are utterly without merit.

<http://www.technologytell.com/entertainment/14939/essay-electronics-devices-on-planes-is-the-madness-nearly-over/>

Roland Dobbins

It is getting obvious, isn’t it…

Almost in the same breath, I received an order from Ambassador Bremer’s office in Baghdad to cease the grain harvest and let the crops rot in the field.

———————

He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.

B

Karzai the US and the Taliban

Jerry,

Nobody ever said Karzai wasn’t crafty. By claiming an alignment between the US and the Taliban, he may be able to brand the Taliban as outside invaders and American collaborators, greatly reducing their acceptance. It isn’t about accusing the US of doing something wrong, because we are already western invaders and can’t get any lower in status. But putting the Taliban in our cultural category may be a masterful PR move. It sure won’t make us happy but it could help any non-Taliban govt quite a bit.

Sean

Actually, I hope it works.

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