The NYTimes on Identity Theft

This is spooky stuff. Apparently, Arizona is ground-zero for this type of crime:

... Several factors converge to make Arizona a hot spot for identity theft. Maricopa County, which includes Phoenix, is one of the fastest-growing counties in the nation, according to the Census Bureau, and its growth exaggerates trends that exist in many communities: a mobile population and high numbers of immigrants and retirees. It also has a heavy traffic in methamphetamine.

Methamphetamine users, whose binges keep them up for days in a row, have the time to sort through trash or old mail for Social Security numbers, bank account numbers or other identifying information, said Andrew P. Thomas, the county attorney. Dealers trade drugs for stolen identities that they use to launder their profits. Nearly half the identity theft cases in Mr. Thomas's office have a connection to methamphetamine, he said.

At the same time, he added, "More than half of the illegal immigrants entering the U.S. come through Arizona," creating a market for fraudulent Social Security numbers and driver's licenses.

... The newest wave of thefts here involves copying the magnetic strip from a victim's credit card onto the back of another. When thieves use the doctored cards, the transactions are charged to their victims' accounts. "Even if the cashier asks for my driver's license, the name on the front is going to match," said Todd C. Lawson, an assistant attorney general in Phoenix who specializes in identity theft prosecutions.

The machine to copy the magnetic strip, Mr. Lawson added, is the one nearly every hotel in America uses to recode room key cards.

We carefully check and print out our credit reports regularly, it takes less than 10 minutes. By law, each year you are entitled to a free copy of your credit report from each of the THREE major credit bureaus. I advise you take advantage of this and rotate them: get a free credit report once every four months from one of the three bureas. This allows you to regularly check if any accounts have been opened in YOUR NAME. You are letting 4 months pass by in between, but at least you are checking with some regularity. Remember, the main thing to worry about is someone opening an account in your name, without your knowledge.

Here is the link to the annual credit report site from the FTC.

GapMinder Data and Google

Google comes out with a front-end to the GapMinder data. Here is my earlier post on the original GapMinder web site.

Truthdig Interviews Lawrence Bender

A conversation with the producer of the the Al Gore documentary ("An Inconvenient Truth"). Jeff Skoll provided all the financing for this low-budget, but critically acclaimed documentary. I can't wait to see it later this week:

There’s a lot that has to be done. And it’s not just one thing. I mean, yes, the fuel efficiency of cars has to dramatically change. We need to go from gas to biofuel, ethanol. We need solar, wind, other renewable-energy technologies. We need to carbon capture and sequester the carbon dioxide coming out of the smokestacks. There’s not one solution. The thing that’s challenging about this is that we need solutions at every level, every area. One of the things I believe could happen on a grass-roots level is for people to learn what it means to have a carbon footprint. Your carbon footprint is the car you drive, the house you live in, the way you travel. You can calculate how much carbon dioxide you put out by living. If you go to our website, climatecrisis.net, you can calculate it yourself and see how you can reduce your carbon output. And then for a very small amount of money you can buy a carbon offset—and make yourself carbon neutral. And if you get your friends to become carbon neutral, and your family, your community—all of a sudden, you could create a whole grass-roots thing around being carbon neutral. Our movie was carbon neutral. We bought carbon offsets. Our premiere was carbon neutral. You can do things to become carbon neutral.

CEO Compensation

Malcolm Gladwell on CEO pay:

After reading the article in the New York Times yesterday on the hundreds of millions of dollars in compensation given over the past few years to the CEO of Home Depot, I ran across this: in 1949, the highest paid CEO in America was Charlie Wilson of General Motors, who earned $586,100 in salary, bonus and stock. That's roughly equivalent to what some of the better-compensated CEO's are making today.

But what did Wilson pay in taxes? $430,350.

Times have changed.

The comments to the post are worth reading as well. Personally, I'm not sure a marginal tax rate of 74% is what we need. But I thought his last line was funny.

Telegraph Avenue in Berkeley

This is so sad. As a visiting researcher there back in the day, I always loved hanging out and strolling around Telegraph. Losing Cody's Bookstore has go to hurt. Blondie's Pizza, Amoeba Records, the Blue Nile Ethiopian resaturant, are still around, but overall, the place is in need of a revival.

Getting excited about Walgreens is not a great sign.

Jim Buckmaster

The SF Chronicle has an article on the 6 foot 8 inch CEO of CraigsList.

SF Carnaval This Sunday

One of my favorite Bay Area Events, parade starts 10 a.m. on Sunday. Take BART or Muni if you can, it will be hard to park.

The EU: A Year After the French and Dutch Rejected the Draft Constitution

The Economist explains the current state of affairs.

Frontline: Sex Slaves

This is one of the most disturbing documentaries I have seen, but I am grateful to the folks who made it. The Director also particpated in an online chat hosted by the Washington Post:

... (The) PBS Frontline film "Sex Slaves," which follows a husband's efforts to track down his 21-year-old wife, who was sold into sexual slavery for $1,000 by a man who promised a trip to buy goods in Turkey. Katia (last name withheld) and her husband Viorel were four months pregnant when she was taken. She was one of the many women kidnapped and sent to places like Europe, the Middle East and the United States, where they are often "owned" by violent pimps, repeatedly raped, beaten and sold to other buyers. Viorel's search leads him to Vlad, the man who originally sold his wife, and into the heartbreaking world of other women who are sex slaves. A 28-year-old Ukrainian native, Oksana, was sold 13 times during her captivity and recalls being held in a cramped apartment with other women, one of whom sought help from the authorities only to be exploited by policemen.

Please check your local listings and watch this truly great film. The U.S. State Department has an Office to Monitor and Combat Trafficking in Persons: contact your local legislator to lobby for extra funding for this agency.

The Housing Market: May and June Will Be Crucial

Check out this interview with Ex-Goldman Sachs Banker, turned housing Bear John Talbott. I'm not sure things are going to be as bad as he projects, but once the housing sell-off starts, anything is possible:

What do you think is happening to the housing market right now?
The smart money is getting out. The inventory of homes for sale is increasing dramatically across the country. That's typically what happens before you see price declines.... The investors who are flipping homes for profit, like non-owner occupied condominiums, those are the people you would expect to sell first. You're already seeing that happening.
...

How much do you think prices will decline, and how long do you think it will take?
I think that it's a worldwide phenomenon, and in the 25 cities that have had price run-ups, which make up 40% of the market, we'll see corrections of 40% to 50% in real terms over the next six years. It has already started, and you'll see it happening in more cities in the May-June time frame.

How did housing prices get so high?
The banks have made a terrible mistake in how they calculate how much to lend. In the early 1980s, about a third of your income had to go to your mortgage and those worked out fine. Today, they've increased that limit to about 40% of your income, and they think those should work out fine, too. But the banks have actually been lending too aggressively.

We're seeing hints about the housing market all over the place. When and how do we know what's really happening to it?
Because of the cyclicality of the business, prices have been down in most places four months in a row. Most cities have seen slight declines in December, January, February, and March. What typically happens is when the weather warms up in spring, people want to move their children during the summer before school starts. The buyers start to come out and then prices start to shoot up in May and June. Those are the two key months. The question is what happens in May and June. Will there be a flood of for sale signs -- people trying to get out at the peak? Or will buyers return to the market?

What happens to the U.S. economy if the downturn you predict really happens?
I think it will be a disaster. Not only will people in fields like banking be unemployed but consumers themselves will spend less. They're spending a lot now because they think their house is worth a million. If they find out it's only worth $400,000, they'll spend less. As foreclosures increase, the banks will get hurt and pull back on lending. That can drive the country into a recession.

But an accompanying interview with National Association of Realtors' economist David Lereah, paints a much more optimistic picture:

Why do you think prices will continue rising?
The economy is growing and there are job gains, so consumers have the financial wherewithal to purchase homes. Sure, the rise in rates has been inhibiting buying recently. A lot of the boom markets that boomed over the last several years are cooling off and home sales are dropping. But if the economy were in a recession, this would be worse. And mortgage rates aren't rising too high -- they're only going up to 7% by the end of the year.

What supports the housing markets are income gains, job creation, consumer confidence, and mortgage rates. We have all of the above still supporting us. Meanwhile, the demographic trends are wonderful. You have boomers buying homes and retirees living longer. The boomer children are now first-time home buyers. Everything still points to strong demand for home buying.

Are you worried about the drop in non-owner-occupied real estate values in certain cities, such as San Diego?
That's not going to spread. The health of a local economy tells us whether a real estate market is in good shape or bad shape, and most of those are very healthy. If you go to Miami, Washington, Chicago, or Los Angeles, those are healthy economies, and they're not going to be affected by what happens in San Diego. And prices are too high in San Diego because it's not an affordable city. The economy there isn't thriving, so it's hard to keep up there right now.

...
Do you think the housing market could ever crash?
I'm getting tired of all these doomsayers. We live in houses, and our houses are not going to crash. This isn't the stock market.... Local economies are relatively healthy. There's job creation -- this isn't a scenario where bubbles burst. Can there be one or two or three or several local markets where prices actually go down? Yes. But to generalize for 30 markets or the whole real estate marketplace -- that's absurd.

Housing has gone up too high and too fast, based on historical returns. There is bound to be a correction, sooner rather than later. The fact that people view their homes as their retirement savings and ATM implies that any correction will be painful.

Al Gore and The Revenge of the Nerds

Sebastian Mallaby has an interesting take on Gore, Climate Change/Science and Bush. Bush is boxed in by the rightwing of his party: science and religious fundamentalism are hard to reconcile. The President also has never been intellectually curious, nor is he an avid reader. Mallaby is correct, times like this call for a policy wonk, who is passionate about the Environment, Science and Technology. It doesn't hurt that Gore has spent the last few years in a variety of private sector ventures, giving him exposure to some leading-edge technologies and ideas:

... Republican dishonesty reaches its extreme on the issue of global warming. Yes, climate science is complex, and nobody can forecast the earth's temperature with complete confidence. But the fact that scientists don't know everything isn't a license to ignore what they do know: that the earth is warming, glaciers are melting and sea levels are rising at an accelerating pace -- and that these changes are driven at least partly by fossil-fuel consumption. The U.S. National Academies have confirmed this; their foreign counterparts have confirmed this; and so has the world's top authority on the subject, the Intergovernmental Panel on Climate Change . None of this is controversial.

Except among Republicans. Candidate Bush acknowledged that climate change was a problem; once elected he denied it; then he denied the denial but refused to let his administration do anything about climate. Lately he has talked about ridding the nation of its oil addiction, but that's because oil finances Arab extremism. Bush has been silent on the link between oil and global warming.

Meanwhile, others have been vocal. James Inhofe, the Republican who ironically chairs the Senate environment committee, has described global warming as the "greatest hoax ever perpetrated on the American people." He avoids scientists who might put him right: His star witness at a hearing last year was Michael Crichton, a science-fiction novelist.

... Well, the most authoritative and up-to-date statement on climate science is contained in a new report from the Intergovernmental Panel on Climate Change that is circulating in draft form. According to scientists who have seen it, Chapter Four says: "Taken together, the ice sheets in Greenland and Antarctica are shrinking." As to the possibility that the melting of some ice caps is offset by the growth of others, the draft also says: "Thickening in central regions of Greenland is more than offset by increased melting near the coast."

In other words, the ads are nonsense. So are some of the assertions on the CEI Web site. The group suggests, for example, that polar bears have nothing to fear from the melting of their habitat. But the Arctic Climate Impact Assessment , a top-notch peer-reviewed source on this subject, has something different to say: "the reduction in sea ice is very likely to have devastating consequences for polar bears."

Six years ago, Bush narrowly defeated Gore, apparently because voters thought he'd be a nicer guy to have a beer with. But after years of governmental bungling, of willful indifference to truth, the national mood seems to be changing. Voters have seen that nice guys can screw up. And technocrats with diagrams and charts have never seemed so interesting.

Evidence-Based Medicine

Business Week has an illuminating article on the effectiveness of some well-known medical procedures. I definitely recommend you read the whole article and the accompanying shorter articles:

... "When there is more than one medical option, people mistakenly think that the more aggressive procedure is the best," says Annette M. Cormier O'Connor, senior scientist in clinical epidemiology at the Ottawa Health Research Institute. The message flies in the face of America's infatuation with the latest advances. "As a nation, we always want the best, the most recent technology," explains Dr. Joe Thompson, health adviser to Arkansas Governor Mike Huckabee. "We spend a huge amount developing it, and we get a big increase in supply." New radiation machines for cancer or operating rooms for heart surgery are profit centers for hospitals, for instance (see BW Online, 07/18/05, "Is Heart Surgery Worth It?"). Once a hospital installs a shiny new catheter lab, it has a powerful incentive to refer more patients for the procedure. It's a classic case of increased supply driving demand, instead of the other way around. "Combine that with Americans' demand to be treated immediately, and it is a cauldron for overuse and inappropriate use," says Thompson.

... With proof about medical outcomes lacking, one possible solution is educating patients about the uncertainties. "The popular version of evidence-based medicine is about proving things," says Kaiser's Wallace, "but it is really about transparency -- being clear about what we know and don't know." The Foundation for Informed Medical Decision Making produces booklets, videotapes, and other material to put the full picture in the hands of patients. Health Dialog markets the information to providers and companies, addressing back pain, breast cancer, uterine fibroids and bleeding, coronary heart disease, depression, osteoarthritis, and other conditions.

In studies where one group of patients hears the full story while other patients simply receive their doctors' instructions, a key difference emerges. The well-informed patients opt for more invasive, aggressive approaches 23% less often, on average, than the other group. In some cases, the drop is much bigger -- 50% to 60%. "Patients typically don't understand that they have options, and even if they do, they often wildly exaggerate the benefits of surgery and wildly minimize the chances of harm," says Ottawa's O'Connor, a leader in this field of so-called decision aid

The sidebar on Heart Bypass surgery and Angioplasty was particularly disturbing:

Each year doctors perform 400,000 bypass surgeries and 1 million angioplasties, where mesh tubes are placed in diseased arteries to hold them open. While most people believe that such surgery is life-saving, the available data say otherwise. Except for about 3% of people with severe heart disease, treatment with drugs alone works just as well to extend life and prevent heart attacks as surgery does. "Cardiologists like to open up arteries," says Dr. David D. Waters, chief of cardiology at San Francisco General Hospital. "But there is no evidence that opening up chronically narrowed arteries reduces the risk of heart attack." Harvard Medical School's Dr. Roger J. Laham figures that at least 400,000 angioplasties a year are unnecessary. "I'm sure we are way overtreating our patients," he says. Surgery carries big risks, such as mental declines after bypass operations. The overuse is exacting a big toll on individual patients and the health-care system, argue such experts as Dr. Nortin M. Hadler, professor of medicine at the University of North Carolina at Chapel Hill.

Oil Prices: Oil Futures as Predictors

Menzie Chinn has a great post on how well futures prices predict spot prices:

... A relevant question is whether futures are actually good predictors of future spot oil prices. The answer is not obvious -- for instance, for currencies futures aren't good predictors.

It turns out that in a horse race against a random walk and a simple time series (ARIMA) model, futures do not have the smallest mean error.

... On the other hand, futures do have the smallest mean squared errors. Hence, one could do worse than using futures to assess prospects for oil prices. (See also Wu and McCallum, 2005.) On the other hand, the differences aren't too great between the futures and a random walk (at 3 month horizon) and an ARIMA(1,1,1) -- close to a random walk -- at the 6 month and one year horizons, thus consistent with this post by James Hamilton on the time series characteristics of oil prices.

One caveat to this conclusion is that our results only apply to horizons of up to one year. The markets further out on the maturity spectrum are very thin, and the characteristics of these futures are unknown.

Retirement Savings and the Baby Boomers

If you haven't been maxing out your retirement savings (401K, IRA, etc.), I suggest you watch this Frontline documentary. Increasingly, people with homes are relying completely on their houses for their retirement. Every financial economist will tell you that over the longterm, real estate, after you factor in home repairs and projects, lags a diversified investment portfolio. We know Social Security stipends will be less than what it is today, and that due to advances in medical science, life expectancy will increase. If you don't save today, while you are in prime earning years, you might have to work when you are in your late sixties or seventies.

So forget that extra iPod, the luxury car, the widescreen TV, or that expensive vacation to Europe :-) Give compound interest those extra years to works its magic. This personal finance book, from Harvard Law Professor and Bankruptcy expert Elizabeth Warren, provides a simple framework anyone can use to start saving towards retirement.

Make sure to also read the Washington Post transcript of an online chat with Hedrick Smith, the host of the documentary:

Trenton, N.J.: On the website Frontline has good resources for young workers. How has this program affected the many young workers who produced it? It's pretty sobering for all of us. Yet more and more have lots of credit card debt and it's really hard to get started on long term retirement now.

Hedrick Smith: Good question. Everyone who worked on the show was deeply sobered by what we found out. Rick Young, the producer, who's in his mid-40s, was constantly talking about how he was going to have to beef up his retirement savings. Typically when the production team comes in from a day of shooting and goes out to dinner, the tendency is to change the subject and talk about other things - sports, the war, family - and so forth. But this time, almost every night, the talk was about what we had learned that day and what the implications were for all of us individually and for the country as a whole.

Ogden, Utah: This is the most stark demonstration of the galactic gulf between the mega-wealthy and the former middle class. While the working-age employee may be far behind his CEO now, a lifestyle of reasonable health, leisure, family support, etc. is posible. But in retirement the same folks will become the impoverished, the prematurely ill (and then dead), and ultimately completely exploited Americans no one ever expected to know.

Hedrick Smith: Certainly, one of my biggest concerns coming away from 6 months of work on this topic is the radical inequality between people who are making more than $100,000 per year and moderate-income Americans who are making $40,000-$60,000. Obviously, they start out planning for retirement from very different levels. But what is more disturbing is the evidence that when they start to run their own 401(k) plans, the gap between them grows wider and wider very rapidly. According to a 50-year pension benefit consultant like Brooks Hamilton, who has studied the numbers in detail, most of the middle-income earners will not be able to accumulate enough money to finance their retirement - unless something radical is done to strengthen the 401(k) system to give them much more help in planning and managing their investments, and unless employer contributions are significantly increased.

Peanut Milk: The New Miracle Drug

:-) From the LA Times:

In 1999, a chronic gum condition had made Chang's teeth so loose that he could no longer eat solid foods. Yet he still craved peanuts. So he decided to brew up a liquid form. Each night after his restaurant closed, he went to work in his kitchen, boiling a bag of peanuts down to mulch, adding grains and other ingredients.

At first the results were too oily. Many initial batches tasted terrible. But Chang didn't throw away his failures. He drank them and kept experimenting.

Three months after he started, Chang noticed that his gums no longer hurt. He also stopped losing hair.

"Ha!" he says. "Drink peanut milk! No more hair on pillow!"

Ethanol: Pluses and Minuses

I recently posted on Vinod Khosla's Ethanol presentation over at the Googleplex . This recent article from Businessweek lists some of the well-known objections to Ethanol. Vinod argues, and I think rightly so, that as the use of Ethanol becomes widespread the costs will come down and will be competitive with gasoline. He also mentioned that cellulosic Ethanol is the "killer app". What I'm confused about is the time horizon before cellulosic Ethanol becomes viable. The Business Week article indicates that it is decade away. I'll have to watch Vinod's presentation to see if that matches his estimate:

CORN GUZZLERS
Growing crop-based fuel makes sense on paper. General Motors Corp. (GM ) Chairman and CEO G. Richard Wagoner Jr. promotes ethanol as one of the best ways to cut oil imports and clean up emissions. "There is nothing that can be done over the next five years to address [energy] issues that's better than ethanol," he says.

But while ethanol brings a near-term payoff, Wagoner admits that "it's not free." To GM, the cost to make the engine ethanol-friendly is just a couple hundred dollars per vehicle. For consumers, however, the economics don't yet add up. Fuel made from 85% ethanol and 15% gas, or E85, now costs more than gasoline in many markets. Throw in the fact that it is 25% less efficient than gasoline, and the consumer's bill at the pump is much more. A Chevrolet Tahoe SUV running on E85 costs about $3,500 a year to fuel at $3 a gallon, an $800 premium over the cost to run an all-gas model.

Wagoner's solution could help America wean itself from foreign oil. But not the way ethanol producers are making the stuff today. From the diesel tractors tilling the fields and harvesting corn to the trucks shipping kernels to the boilers in the processing plants, making ethanol requires 1 energy unit of fossil fuel for every 1.3 energy units of ethanol produced.

CELLULOSIC GAINS
Far more promising is an energy crop that's still a decade away or more. Cellulosic ethanol refers to alcohol that's cooked up from the whole corn plant -- the stalk, leaves, cob and all -- rather than just the kernels. It offers a massive boost in ethanol's potential. By tapping other crops and forest waste, along with corn, the Energy Dept. estimates that the U.S. could produce 1.3 billion tons of biomass per year, which could yield enough ethanol to replace around one-third of America's liquid fuel needs by 2030, up from barely 2% today.

But before the cellulosic industry starts crowing about reducing oil imports, there's a decade or so of R&D to be done. The challenges, explains Greg Stephanopolous, a professor of chemical engineering at Massachusetts Institute of Technology, lie in finding better ways to break down the cellulose into sugars, then breeding new microorganisms that can thrive on the unusual mix of sugars and complex chemicals in woody plant matter and spit out useful ethanol at the end.

Over the past decade both Archer Daniels Midland Co. (ADM ) and DuPont (DD ) have engineered ways to make new kinds of biodegradable polymers. Given that precedent, Stephanopolous estimates it will take 10 years and $500 million to come up with industrial processes to make cellulosic ethanol. "That's the downside," he says. "The upside is the potential to replace tens of billions of dollars in oil imports. It's a no-brainer."

The Total Cost of the Iraq War

I thought the Iraqi oil revenues were suppose to pay for the war? A new working paper from Nobel Laureate Joseph Stiglitz and Linda Bilmes:

Approach
The authors meticulously reconstruct the war’s real costs in a range of alternative scenarios. Using standard accounting and budgetary techniques, they uncover a series of costs which are not self-evident and should be taken into account when assessing the total costs of the war on the long term. The relative importance of each cost category may thus be assessed too - something which may also be of help in politically evaluating this war.
Findings
The costs of the Iraq war are officially estimated around $500 billion, a sum which may be compared to the one spent in the Korea and Vietnam wars. However, this is likely to be less than half of the war’s real economic cost. If proper accounting principles are adopted, reasonable estimates lie between $750 and $1,269 billion - or between 6% and 10% of America’s GDP. Taking other economic costs into account, such as the medical costs borne by seriously injured soldiers, the loss of income produced by reservists on duty, and increases in oil price and greater uncertainty, adds $380 to $1,400 billion in present value terms.
Novelty
This analysis of the costs of the Iraq war allows the authors to outline a useful novel methodology and a new conceptual framework for implementing a rational cost-benefit analysis for any war. While this may seem a gruesome exercise considering the monetary evaluation of casualties and injuries, it is in fact a valuable tool for supporting rational policy decisions.

Vinod Khosla Video Presentation on Biofuels

From Google Video. Great presentation on why Ethanol looks extremely promising, the Q&A starts around minute 48. I recommend you watch/listen to the whole presentation. Ethanol is more land efficient than bio-diesel: you can produce more gallons of ethanol (corn/sugar/cellulosic) per acre than you can of bio-diesel.

The slide presentation is also available as a Power Point download.

Military Testing Jet Engines Not Powered By Oil-Based Fuel

From the NY Times:

In a series of tests — first on engines mounted on blocks and then with B-52's in flight — the Air Force will try to prove that the American military can fly its aircraft by blending traditional crude-oil-based jet fuel with a synthetic liquid made first from natural gas and, eventually, from coal, which is plentiful and cheaper.

While the military has been a leader in adopting some technologies — light but strong metals, radar-evading stealth designs and fire-retardant flight suits, for example — any effort to hit a miles-per-gallon fuel efficiency rating has taken a back seat when the mission is to haul bombs farther and faster or push 70-ton tanks across a desert to topple an adversary. (The Abrams tank, for example, gets less than a mile per gallon under certain combat conditions.)

"Energy is a national security issue," said Michael A. Aimone, the Air Force assistant deputy chief of staff for logistics.

The United States is unlikely ever to become fully independent of foreign oil, Mr. Aimone said, but the intent of the Air Force project is "to develop enough independence to have assured domestic supplies for aviation purposes."

By late this summer, on the hard lake beds of the Mojave Desert, where the Air Force tests its most secret and high-performance aircraft, a lumbering B-52 is scheduled to take off in an experiment in which two of the giant bomber's engines will burn jet fuel produced not from crude oil but from natural gas. The plane's six other engines will burn traditional jet fuel — just in case.

The State of French Universities

When I was in grad school and in my previous life as an acdemic, I frequently encountered French students and scholars from the University of Paris. I was aware that there was variation in the standards and facilities of the different campuses. But I was not aware that the situation had gotten this bad. From the NY Times:

There are 32,000 students at the Nanterre campus of the University of Paris, but no student center, no bookstore, no student-run newspaper, no freshman orientation, no corporate recruiting system.

The 480,000-volume central library is open only 10 hours a day, closed on Sundays and holidays. Only 30 of the library's 100 computers have Internet access.

The campus cafeterias close after lunch. Professors often do not have office hours; many have no office. Some classrooms are so overcrowded that at exam time many students have to find seats elsewhere. By late afternoon every day the campus is largely empty.

Sandwiched between a prison and an unemployment office just outside Paris, the university here is neither the best nor the worst place to study in this fairly wealthy country. Rather, it reflects the crisis of France's archaic state-owned university system: overcrowded, underfinanced, disorganized and resistant to the changes demanded by the outside world.

"In the United States, your university system is one of the drivers of American prosperity," said Claude Allègre, a former education minister who tried without success to reform French universities. "But here, we simply don't invest enough. Universities are poor. They're not a priority either for the state or the private sector. If we don't reverse this trend, we will kill the new generation."

It was student discontent on campuses across France that fired up the recent protests against a law that would have made it easier for employers to dismiss young workers. College students were driven by fear that their education was worth little and that after graduation they would not find jobs.

The protests closed or disrupted a majority of France's universities for weeks, labor unions declared solidarity and eventually the government was forced to withdraw the law.

"Universities are factories," said Christine le Forestier, 24, a 2005 graduate of Nanterre with a master's degree who has not found a stable job. "They are machines to turn out thousands and thousands of students who have learned all about theory but nothing practical. A diploma is worth nothing in the real world."

... But the state failed to invest much in buildings, facilities and professors' salaries to make the system work. Today the French government allocates about $8,500 a year to each university student, about 40 percent less than what it invests in each high school student.

... Only 4 percent of French students make it into the most competitive French universities — the public "grandes écoles." But the grandes écoles, along with a swath of semiprivate preparatory schools, absorb 30 percent of the public budget.

Al Gore: A Wired Magazine Profile

Run, Al, run. Finally got around to reading this nice profile, he seems to be having a lot of fun these days:

... For all the early hype surrounding Current TV, the commercial venture that excites Gore most these days is Generation Investment Management, his global fund. As governments begin imposing carbon caps on businesses, Gore says, free markets will reward companies that practice environmental sustainability. The result: reductions in emissions of carbon dioxide and other greenhouse gases responsible for global warming. "As soon as business leaders get global warming or the environment at large," he says, "they start seeing profit opportunities all over the place. There is so much low-hanging fruit right now, it's just ridiculous." So much, in fact, that early this year venture capitalist Doerr announced that his firm, Kleiner Perkins Caufield & Byers, would launch a $100 million green-technology fund. "Greentech could be the largest economic opportunity of the 21st century," he said.

Though Generation invests in a wide range of companies, Gore and his team are especially bullish on the energy sector. We're on the verge of "a real gold rush" in renewables, conservation, and software for identifying and eliminating waste, he says. "The whole economy is going to shift into a much more granular analysis of which matter is used for what, which streams of energy are used for what. Where does it come from? Where does it go? Why are we now wasting more than 90 percent of it?" Gore shakes his head. "The investments in doing it right are not costs - they're profits."

Make no mistake: Generation's strategy is to beat the market, not just to feel good about socially responsible investing. Gore's partner at the firm, David Blood, is a legend in the London investment scene. He retired as CEO of Goldman Sachs Asset Management in 2003, at age 44, after helping grow its assets from $50 billion to $325 billion in just seven years. He, too, was casting about for a way to incorporate environmental and social values into traditional investment analysis. The concept wasn't an easy sell on Wall Street. "As soon as you say 'sustainability,' some people will roll their eyes and say, 'These guys are tree huggers and they run around in sandals and they aren't serious investors,'" says Blood. "But once they listen, there is no one who says this doesn't make sense."

... The Gores and all the employees of Generation lead a "carbon-neutral" lifestyle, reducing their energy consumption when possible and purchasing so-called offsets available on newly emerging carbon markets. Gore says he and Tipper regularly calculate their home and business energy use - including the carbon cost of his prodigious global travel. Then he purchases offsets equal to the amount of carbon emissions they generate. Last year, for example, Gore and Tipper atoned for their estimated 1 million miles in global air travel by giving money to an Indian solar electric company and a Bulgarian hydroelectric project.

Pythonic Web Framework

Django is emerging as a viable alternative to Ruby-on-Rails. I love Python and hope Django gains some mindshare, Rails has a lot of hype and momentum, so if might be a little too late.

On the other hand, googlers seem to be excited about Django. Check out this recent presentation at the googleplex.

Hat tip to the BDFL (Benevolent Dictator For Life).

Malcolm Gladwell on Healthcare

Gladwell points out a NYTimes article by Princeton economist Paul Krugman. Krugman summarizes the results of a recent JAMA (Journal of the American Medical Association) comparing the US and UK healthcare systems. It is well-known that the US spends more per capita on healthcare than most industrialized countries: about $5200 per year, vs. $2100 per year by the UK. What sets this study apart is the care in controlling for other factors:

• to control for a larger immigrant population and to control for a large and relatively poor black population in the US, the study is limited to non-Hispanic whites in both countries

• the study controls for socio-economic status

• the study is limited to people between the age of 55 and 64

For the results, check out Gladwell's well-written post. The bottom line: we in the US are not getting decent returns on our healthcare spending. Ideally, the study would have compared subjects from the same occupation -- maybe the Americans in the study came from highly stressful professions.

Dreams Shattered in Mexico

The LA Times has an article on Americans buying real estate in Mexico, with plenty of examples of investments gone bad:

Doug and Dru Davis sold their San Diego County home several years ago to buy a $200,000 house on the beach here.

The value of their new place not far from the resort of Puerto Vallarta increased fivefold — until some developers moved the beach.

The couple's serenity was shattered last fall when construction crews began dredging the bay in front of their property to reclaim land from the sea. A planned marina, hotel and high-rise condos now threaten to block their ocean view.

Instead of watching whales glide just a few hundred yards off their patio, the couple fear they'll soon be looking at garbage bins, a service road and beer trucks.

You purchase a beachfront home only to have greedy developers move the beach! Unbelievable. Buyers beware. Don't assume the real estate market behaves as it does En El Norte:

... No agency on either side of the border keeps statistics on the number of Americans who have encountered problems. But interviews with homeowners, real estate experts and government officials reveal real estate deals gone sour and a host of potential pitfalls.

Some would-be buyers have had brokers disappear with their deposit money. Others have had their homes seized in land disputes. A few have even landed in jail.

U.S. officials warn that Mexico's murky land record system exposes foreigners to complex title disputes in courts that may not give them a fair shake.

"There is a history of problems," said Liza Davis (no relation to Doug and Dru Davis), public affairs officer at the U.S. Consulate in Tijuana. "We ask people to go in with their eyes open."

The most high-profile dispute in recent years was the eviction of dozens of U.S. citizens from the Punta Banda peninsula south of Ensenada in Baja California in 2000.

Mostly retirees, the homeowners built their dwellings on so-called ejido land, communal farmland that has been the source of complicated title struggles nationwide. Mexico's Supreme Court ruled that the group from which the Americans bought their land was not the rightful owner, forcing some of the Americans to abandon homes worth hundreds of thousands of dollars

McDonald's Unveils Panel for Food Advice

McDonald's is now dishing out nutritional advice? Let me guess what the advice will be: Do you want to supersize that? What they need to do is seek out some of the best minds in the field: Michael Pollan and Marion Nestle.

The quickest way to eat healthier is to eat fresh, locally grown and produced foods -- preferably organic. But if you have to supply a massive number of outlets, it would require a different philosophy. There is a reason they refer to it as fast foods!

But, at least they are doing something. If they mean it, they should accompany it with changes to their menu.

Tha Bay Area and Solar Technology

Venture Capitalists are betting on renewable energy start-ups. Will the Bay Area be the "Silicon Valley" of renewable energy? As a resident of the area, I certainly hope so. Think about all the potentially interesting jobs that will be available. From the SJ Mercury News:

There may have been doubts about it until now, but Silicon Valley is steadily gaining status as a leading center of innovation for green technologies -- especially solar.

Over the past year, we've reported all kinds of news about investments into clean technologies here. Today, there are two more encouraging announcements showing the moneybags on Sand Hill Road are taking this seriously.

First, Innovalight, a Santa Clara solar company, has announced it has raised an additional $7.5 million in venture financing from Harris & Harris, Apax Partners, ARCH Venture Partners, Sevin Rosen Funds and Triton Ventures -- some of which have offices in Silicon Valley.

The start-up recently moved to Santa Clara from St. Paul, Minn., another sign that Silicon Valley is the place to be for the future of solar technology research. Nanosolar, Miasole and publicly traded SunPower are already here.

Meanwhile, Piper Jaffray has created the first fund to invest dollars solely into venture-capital firms that invest in clean technologies. It is called a ``fund of funds'' because it is a fund that is made up of investments into other funds.

VentureWire reports it is raising $50 million for the purpose, and it has already committed some of that money to venture firms in Silicon Valley/San Francisco, including DFJ Element, Expansion Capital Partners, Nth Power and VantagePoint Venture Partners.

How Soccer Explains The World

With the 2006 World Cup just around the corner, I've been re-reading Franklin Foer's excellent book. I rate it among the best travel books I have read, period. Each chapter takes you through a country's soccer scene, and through Foer's insightful writing, you learn a lot about the country itself. I enjoyed each chapter, but a few especially standout: Italy, Brazil, Serbia, Iran, and England.

Foer fills each chapter with interesting and funny observations. You will learn a lot about how each country works and the writing will engage you, regardless of whether you know soccer or not. Even if you are not a travel book reader, I still recommend you read it. It is that good!

Movie Recommendations, Vol. 3

Here are some films we have enjoyed recently:

• Emmanuel's Gift
• The Weather Man
  
• Searching For The Wrong-Eyed Jesus
  
• Rumi: Poet of the Heart
  
• The Best of Youth => A Six-hour Italian Epic!
  
• Good Morning, Night
  
• Happily Ever After
  
• Six Feet Under: The Fifth and Final Season
  
• Match Point
  

Previous Movie Recommendations can be found here:

• Vol. 2
• Vol. 1
  

Russia Is Flush With Petrodollars

From begging the IMF for aid, to having a larger reserve than the IMF? What a turnaround. Brad Setser notes:

In 1998, Russia was very short on cash. It went to the IMF and got a $15 billion credit line. When it didn’t hold up its end of the bargain – taking steps to collect a bit of revenue – then Treasury Secretary Rubin pulled the plug on the program after only $5 billion had been disbursed. He argued that there was no point in throwing more good money after bad.

$5b. Chump change. That is less than ½ of what Russia added to its reserves in the first three weeks of April. Russia’s reserves were $217.1b on April 21, up from $205.9b at the end of March. For the full month, Russia’s reserves will probably grow by $15 billion.

By the end of the year, Russia will likely have as many reserves – around $300b – as the IMF has on deposit. Talk about a reversal of fortune.

... Which brings me to the real point of this post –

All the money that we pay to our oil producing friends has to go somewhere. And a big fraction never actually flows into the domestic economy of the oil states. The governments of oil states often get their cut of the country’s oil revenues in dollars, and just hold their take abroad. They don’t ever convert the dollars (or euros) into the local currency.

Parking the oil windfall in government accounts abroad may not increase Russia's standard of living much, but it certainly makes life a lot easier for the central bank. If export proceeds are not converted into domestic currency, the central bank doesn’t need to take offsetting steps to withdraw the currency from circulation. So called sterilization – the sale of central bank bills to withdraw domestic currency created when export revenues are converted into the local currency – isn’t necessary.

If the Oil States do not invest enough to improve their infrastructure, healthcare and education, what will happen when the price of Oil normalizes, or, if renewables become more viable?

California and the Green Movement

I look forward to reading the latest issue of the Common Ground magazine, and this month's issue has a nice article about California. Combined with the recent article from the NRDC's magazine, the Golden State's initiatives may start influencing legislation in other parts of the U.S.

... In 2004, the California Air Resources Board (CARB) approved the nation’s first set of auto-emissions standards aimed at reducing greenhouse gases, calling for a 25 percent reduction by 2016. The legislature established an Ocean Protection Council to safeguard the coast from overfishing and other abuses, making California the first state to begin following the recommendations of two national ocean commissions — whose findings had been ignored by the White House. In 2005, CARB instituted new rules requiring ships to use cleaner fuel within 24 miles of shore, and Gov. Schwarzenegger signed legislation encouraging public agencies to retrofit their vehicles for biodiesel.

This year has already seen more milestones. Early in 2006, the Public Utilities Commission (PUC) approved the largest solar energy initiative in the United States, providing $3.2 billion in consumer rebates — enough to help pay for 1 million home conversions. The Department of Toxic Substances Control banned households from tossing computers, VCRs, batteries and other electronic waste in landfills. CARB designated secondhand smoke as a “toxic air contaminant,” subject (in theory, at least) to the same restrictions as arsenic and benzene.

... California’s clout is not just legislative. “Being the sixth-largest economy in the world,” says Bernadette Del Chiaro, a clean-energy specialist for the nonprofit Environment California, “we can actually have an impact on the market.” The state’s emission standards have long entered into the calculations of automakers, who depend on California for 10 percent of their sales. Its incentives for hybrid owners, the most generous in the country, are helping to make that technology economically viable — fully one-third of all US hybrids sold in 2004 were bought in this state. California leads the nation in wind power, helping to make turbines the fastest-growing alternative energy source. The state is also No. 1 in gasoline consumption, with 30 million vehicles slurping up more than 40 million gallons a day; should we switch to hydrogen (as Gov. Schwarzenegger has decreed we should begin to do by 2010), OPEC might have to file for Chapter 11.

... A great deal remains to be done, of course. Last September, the Million Solar Roofs bill floundered amid partisan wrangling over non-union installers. But thanks to an outpouring of public support, on January 12, the governor oversaw the State Public Utility Commission’s approval of the $3.2-billion California Solar Initiative. The CSI will fund the installation of 3,000-MW of solar power — a 30-fold increase. Del Chiaro joined the band of jubilant environmentalists who trooped to Sacramento to praise the governor for keeping his campaign promise “that you would make our state a world leader in solar power.”

Darryl Hannah Is Off The Grid

She also has a cool vlog (video blog) that comes out weekly. From the SF Chronicle:

The vlog, which features a new segment every week, chronicles Hannah's personal explorations of the latest in green living. Topics have included green building, vegan diet, gorillas in Rwanda and biodiesel -- one of Hannah's favorite topics.

"I haven't been to a gas station in years," she said. "It feels so good not to be a slave to gas, playing the whole game of war for oil."

Her vlog entries have a fun-but-serious tone that conveys the importance of making sustainable choices -- while underscoring the fact that such choices don't have to be sacrifices. On the contrary: Green choices enrich Hannah's life.

The past year has seen a mini-boom in green celebrity: Cameron Diaz, Leonardo di Caprio, Ed Norton, Matt Damon and others have lately joined the eco-celeb pantheon that has long included a handful of activist-actors like Woody Harrelson and Ed Begley.

But Hannah's commitment is longstanding. She's been a vegetarian since she was a kid. Her two houses -- one in the Rockies and one in Southern California -- have been off the grid for a dozen years, relying on solar panels and graywater systems. She buys carbon offsets for all her travel.

"I've carbon neutralized myself so many times," she said, "that I've got a carbon surplus. But I still continue to do it."

That kind of personal, lived environmentalism has always made intuitive sense to Hannah. "One wouldn't think that you would have to become an environmentalist or a humanitarian," she said. "It's just natural to treat people and other creatures on the planet with respect."

But in spite of her strong conviction, for most of her life Hannah did not advocate publicly for environmental causes.

"I never had come up with a really profound and strong gesture -- nothing like Julia Butterfly's," she told me. "So I figured the best thing I could do was live by my beliefs. That's probably the most profound thing that anybody can do."

But in the wake of Sept. 11, Hannah realized that simply tending her own garden wasn't enough. As the nation tumbled headlong into an ill-conceived petroleum war, Hannah was driven to speak out. On the first anniversary of Sept. 11 she went on Fox's "O'Reilly Factor" "to talk about our biofuel options -- that we don't have to go to war for oil."

New Blog Search Engine

If Sphere lives up to the hype, Technorati could be in trouble. Sphere has the potential to provide more relevant results because their approach to ranking is superior to Technorati's primitive notion of authority.

SUV's and Shareholder Resolutions

It is well-known that the U.S. Auto makers rely heavily on the high-margin SUV/Truck categories. Unfortunately, with rising gas prices, consumers are shying away from the gas guzzlers. As I pointed out earlier, there is broad support among policy-makers for an increase in the gas tax. For the sake of the workers, I hope the U.S. Auto makers get their act together. From the NYTimes:

Despite gains at Toyota and Honda, declines at General Motors, Ford, DaimlerChrysler and Nissan kept vehicle sales in the United States flat in April, according to Ward's AutoInfoBank. General Motors recorded the biggest drop, selling 7.3 percent fewer vehicles than it did last April.

For the first time, Toyota became the nation's No. 3 car seller for the month, passing DaimlerChrysler. That marks a symbolic victory for Toyota, which occasionally outsells the Chrysler division but had never before outsold all of DaimlerChrysler in the United States.

The latest surge in gas prices poses a long-term problem for the domestic auto companies, which had been hoping that gas prices would moderate and make S.U.V. sales easier. Now, analysts warn it may be harder to get consumers to buy a gas-thirsty vehicle when the oil market remains so volatile.

"Last fall when we had this first spike, then people could write it off as a one-time deal," said Stephen J. Hoch, a professor of marketing at the Wharton School of the University of Pennsylvania. "The fact that it spikes twice means it can spike again. Now, this time people will say there's enough evidence that this is going to be a recurring if not frequent phenomenon."

Last month, big S.U.V.'s and pickup trucks were among the vehicles that had the sharpest sales drops. The Ford Explorer was down 42 percent compared with April 2005. Sales of the Jeep Grand Cherokee declined 41 percent. Sales of Ford's top-selling F-Series pickup fell about 9 percent last month, as did sales of the Nissan Titan. The Chevrolet Colorado pickup was down almost 30 percent.

The Christian Science Monitor has excerpts of a recent discussion on shareholder resolutions:

What trends are you seeing in shareholder resolutions?

Ms. Benton: One of the most exciting trends we're seeing right now is the level of responsiveness from the companies. They've gone from being resistant or unaware ... to working with us.

Ms. Alpern: There's a lot of activity around climate change. Ten years ago, companies could treat you like you were a little bit crazy for bringing up the issue. But now, it's taken very seriously as an economic issue.

Are there other trends?

Alpern: Political contributions have become a real issue over the last couple of years. There's an outfit in Washington called the Center for Political Accountability that has worked very closely with a shareholder coalition to put resolutions on company ballots that ask companies to disclose the kinds of contributions they're making. Although there's some kind of public disclosure already required by government, it doesn't tell the whole story.

Are you telling companies who to contribute to?

Alpern: No. At this point, we just want to know what they are doing and how they are handling the risks associated with political giving - the reputation risks when they might find out that some of their money has been diverted to some candidate or political independent 527 [group] whose views would alienate their employees, their customers, or their shareholders.

The Human Kindness Foundation

We just came back from an inspiring presentation by Bo Lozoff, co-founder of the Human Kindness Foundation. Bo is the internationally renowned founder of the Prison-Ashram Project:

In 1973, Bo Lozoff and Ram Dass came up with the idea to help prisoners to use their prisons as ashrams if they were tired enough of seeing themselves as convicts just biding their time until they were released. Ram Dass funded the work, and Bo began corresponding with prisoners and, with their feedback, developing spiritual materials especially suited to that environment.

Neither Bo nor Ram Dass ever imagined that hundreds of thousands of hard-core convicts would be interested in such an idea. But within the first couple of years, the letters began pouring in and have not stopped to this day. By 1975, the Prison-Ashram Project had become Bo's full time job, and that same year Sita committed herself to the work as well. Bo & Sita have visited over 500 prisons, leading thousands of workshops. Bo's books, in particular the well-known We're All Doing Time, have become "the convicts' Bible" in institutions around the world. All of these books, as well as many of our tapes, are sent free of charge to any prison inmate who requests them.

Bo is also a well-known spiritual teacher, musician, and author. Prior to coming to his talk, I had never heard of him or his work, and I came away truly inspired by the work he is doing for prisoners all over the U.S. He has probably visited more prisons (more than a thousand) than anyone in the U.S. He reminded us that our home state of California has more prisons (and yet more in the planning stages) than any other state or nation. In Folsom state prison, 2 inmates share a 5x7 foot cell 24 hours a day, 7 days a week. It was Dostoyevsky who said you can judge a society by its prisons, and by that measure California and the U.S. is doing terribly.

Someone in the audience asked him about what we can do to reform the prison system. He paused and looked discouraged, then he replied that he does his work because it is the right thing to do. If he measured his work in terms of reforming the prison system, he would have given up a long time ago.

He also described a year-long retreat (a year of silence) he took and how it has changed his outlook and approach to life.

Check out his tour schedule and go see him in person, I recommend it highly. If you can't see him in person read about his work and make a contribution.

Colbert Roasts President Bush

Wow, these three video links are funny, and I'm surprised that this White House let this happen.

UPDATE: Use the Google Video version instead.

Silicon Valley Start-ups

Business Week has an interesting article on two start-ups that seek to produce the next generation, fuel-efficient cars. I still think that there is a lot money to be made in renewables and energy efficiency. The U.S. and the Valley are well-suited to be key players in launching the next-generation "energy" companies:

... Silicon Valley engineers have always been closet gearheads. When they're not writing code or designing semiconductors, many tinker with exotic cars, airplanes, even rocket ships. Couple that with a Californian environmental bent -- it's hard to drive the stretch of Highway 101 between San Francisco and San Jose without passing several Toyota Priuses or Honda Insights -- and techies seem like ideal candidates for building nonpolluting vehicles.

Yet the region's startup machine has never produced a notable auto company. Wright and Eberhard are out to change that. After four years of research and development, San Carlos-based Tesla plans to release a battery-powered sports car later this year. It will do so without Wright, who left Tesla last year and formed his own electric car startup, Wrightspeed Inc., in Woodside. "I had a different vision, to build cars with different technology," he says. The parting was amicable. Wright doesn't have a delivery date for his vehicle.

Both companies are charting new territory by applying info tech engineering, consumer-electronics design, and venture-capital financing to auto startups. For talent, they are dipping into the Valley's deep well of electrical engineers, software programmers, and industrial designers. For financing, they are appealing to venture capital's newfound interest in clean technology. So far, both have been funded by their founders and other individuals. Tesla has raised at least $25 million, some from PayPal (EBAY ) Inc. founder Elon Musk. The company is close to completing a private placement led by a prominent VC firm, according to a source familiar with the deal. (Tesla declined to comment, preferring to stay quiet until its car is ready.) Wright has yet to close on a first round of funding.

LESSONS FROM LAPTOPS
So what makes these techies think they can do better than Detroit, Tokyo, or Stuttgart? After all, past attempts to market electric cars in the U.S. have disappointed. Buyers balked at high prices, odd looks, and limited range. When General Motors Corp. (GM ) introduced its first-generation EV1 in 1996, most owners could only drive 60 miles before charging.

But Tesla and Wrightspeed have a different approach. For one thing, their vehicles use lithium-ion polymer batteries, a more powerful version of those found in portable electronic devices. Packing twice as much energy per pound as the nickel metal hydride batteries used in the electric cars of the 1990s and today's gas-electric hybrids, lithium ion increases the driving distance on one charge. Surging demand from portable device makers has spurred development of more powerful lithium batteries. "It's an intensely competitive business in the laptop and portable market, which is good for us because it means the technology is improving, and the price is coming down," says Tom Gage, president at AC Propulsion Inc., an electric-car components manufacturer in San Dimas, Calif., that is providing key elements of Wrightspeed's and Tesla's drive trains.

Another distinction: Tesla and Wrightspeed are designing zippy sports cars for wealthy drivers who might otherwise buy a Ferrari or Porsche. Although economy cars sell in greater numbers, performance cars sell at higher prices and a greater profit. Tesla hasn't announced pricing, but Wright estimates his cars will cost about $100,000. Other electric-car makers have discovered the performance market. French carmaker Venturi last year began selling the Fetish, a sports car powered by lithium-ion batteries. But Venturi is making only 25 Fetishes, for $600,000 each.

Engineers have long known that electric power can best gas power on a racetrack. Light weight, high horsepower, and no shifting make for rapid acceleration. "The interesting thing about electric cars is you don't have to give up efficiency to get performance," says Wright. He claims the X1 will go from 0 to 60 miles per hour in under 4 seconds and drive for up to 160 miles at 70 mph on one charge. Charging will take about two hours.