Thursday, January 24, 2013

Reasons for Optimism IX

1. Last week, initial jobless claims fell to a 5-year low. At 335k, jobless aid applications haven't been this low since the beginning of the recession in January 2008.

2. Don Boudreaux continues his Cleaned by Capitalism series with an entry on the washing machine. See Hans Rosling's TED talk for more on the washing machine.

3. The Slingshot water purifier, invented by Dean Kamen and backed by Coca-Cola, is expanding from initial trials in Ghana to Paraguay, Mexico and South Africa. In the video below, Kamen says, "Global organizations... work on top-down, government-to-government big programs, and we're working on the Slingshot, the little tool that David needs to take on Goliath. [...] We could empty half of all the beds in all the hospitals in the world by just giving people clean water."

4. A new study shows that official poverty statistics in the United States grossly overstate poverty. The poverty rate has declined by 25 percentage point since 1960, and 8.5 percentage points since 1980.

5. Via Mark Perry, U.S. oil production grew more in 2012 than in any other year since we started keeping track. Weekly U.S. oil production is now at it's highest point in 20 years.

6. Planetary Resources, the asteroid mining company, has released a tech update, including video of a prototype for the Arkyd-100 satellite. But perhaps I should call them an asteroid mining company, because Planetary Resources isn't the only one anymore. A company called Deep Space Industries is also targeting asteroids. Deep Space Industries plans to bring back samples weighing 50+ pounds by 2016, and to have an established mining operation by 2020.

7. Bigelow Aerospace's inflatable space station idea is getting a boost with a two-year trial as a module on the ISS.

8. TSA has cancelled its contract with Rapiscan, the makers of the naked scanners. All naked scanners will be removed from airports by June. They will be replaced by scanners that do not show such fine detail. While the health concerns remain, this is definitely a step in the right direction.

Thursday, January 10, 2013

Reasons for Optimism VIII

1. The number of people imprisoned in the US has been falling since 2008.

2. More cars were sold in 2012 than any other year since the recession began, and sales grew 13% over 2011, more than in any year since 1984.

3. Audi is showing off technology that would allow a car to autonomously find a parking spot within a parking garage and park itself. No word yet on when this will be available for consumers, but a garage-only feature like this might circumvent some of the legal grey areas with autonomous cars, at least in privately-owned garages.

4. The Earth is getting greener. And I don't mean humans are becoming more environmentally-conscious; I mean the physical Earth is literally greener, as measured by satellites, because there's more plants. There are two reasons plants are growing more: higher temperatures and higher carbon dioxide levels. This is a another piece of evidence that climate tends to have stable equilibria.

5. Fully 64 new supplies of energy have been discovered in Africa in the past five years, and the pace seems to be picking up (ht). When combined with the previously-featured GravityLight, Africa is on track to save millions of lives in the coming years.

6. The incredible exponential growth of US oil production continues. We are now producing seven million barrels per day for the first time since March 1993.

7. More than two-thirds of Americans are optimistic about their own economic situation in 2013. On the other hand, nearly two-thirds are pessimistic about the economy as a whole. If you believe in Hayek's local knowledge, this is a great reason to feel optimistic about the economy as a whole (though perhaps pessimistic about the media's portrayal of it).

8. Herbert E. Meyer, who is called "the official who predicted communism's demise," says the good news that nobody is noticing is the global rise of the middle class (ht). In a recent interview [mp3] with Jerry Bowyer, Meyer says, "When you stand back from all the yelling and the screaming…you can see what I believe is the most important trend in the word…the world is emerging from poverty fast. ... Each year between fifty and one hundred million human beings are leaving poverty behind. ... By the way, it’s going to be a five billion-person middle class. This will become the most powerful force in the world. Their demand for our goods and services will set off an economic boom…I believe that we’re heading for not just a sonic boom, but maybe a supersonic boom."

Tuesday, January 8, 2013

Fiscal Cliff Optimism

I'm not the only one who thinks the fiscal cliff deal was a good thing.

David Henderson begins his thoughts on the deal by saying, "Pssst: Someone tell the Republicans they won." Like me, Henderson compares the deal to what would have happened without it, rather than some ideal version that never would've passed the Senate. Henderson, however, goes into far more detail than I did.

Among the many negative responses to Henderson's post I've seen, only Bob Murphy seems to understand that it's the baseline that matters--that is, what would have happened without the deal (even though Murphy still disagrees with Henderson).

Yuval Levin at NRO (ht) approves of the deal for political strategy reasons. He says, "For liberals, this was not a moment of danger to be minimized but by far their best opportunity in a generation for increasing tax rates," and they got far less than they could have just by doing nothing and going over the cliff. "Having discovered an effective political wedge in the tax debate, the Democrats have now basically used it up and gotten awfully little in return."

Finally, if you're still not convinced that the deal was a good thing, take a look at the latest newsletter from the Socialist Equality Party. The self-described socialists hate the deal. In the opening paragraphs, the author echoes Levin's observations on political strategy. In the 7th paragraph, he gives a list of reasons to hate the deal that pretty closely mirrors Henderson's reasons for liking it. If it's that bad for the socialists, it has to be good for the rest of us.

Thursday, January 3, 2013

The Fiscal Cliff and Opportunity Cost

I keep seeing conservative laments about the fiscal cliff deal, like this one, which sums up a bunch from Twitter. There are far too many to link to, but so far, every single one that I have seen has ignored the economic principle of opportunity cost.

Conservatives are upset that taxes are going up and spending won't be seriously cut. But when we look at the opportunity cost for this fiscal cliff deal, we can't just look at some pie-in-the-sky "deal" where the Democrats roll over and give conservatives everything we want. We have to look at the reality of what would have happened without the deal. And the reality is, without the deal, taxes would have gone up twice as much ($478 billion compared to $220 billion), and we would've seen a spending cut that's a measly 0.3% of federal outlays.

I know this isn't how the deal is being portrayed in the media, but these are the facts. Republicans gave the Democrats $9 billion in higher spending, and got $250 billion in lower taxes, compared to what would have happened without the deal. To me, that looks like a win.

A final note on the sequester: Most of the supposed sequester cuts would not have happened for years in the future anyway. If you believe future Congresses would have abided by the sequester, then you're in luck. The sequester is still going to happen, just two months later. If you think that two month delay is a sign that the sequester will never happen anyway, I think you're right. It was never going to happen in the first place, and we lose nothing by delaying it.

Wednesday, January 2, 2013

Recent Reasons for Optimism VII

1. Doctors in Toronto are using ultrasound to perform brain surgery without the surgery. During the five-hour procedure, Tony Lightfoot regained his ability to use his hands without tremors as high-intensity ultrasound destroyed the tissue causing the problem. The technique can also be used to eliminate other problem tissues, including certain kinds of cancer.

2. An organization called Diagnostics for All, backed by the Gates Foundation, is producing paper-based blood tests that can diagnose liver damage within minutes at a cost of less than a penny per test. Tests for other diseases, including malaria, dengue, hepatitis and diabetes, are being developed. While they're currently working on getting these diagnostic tests to poor countries, the benefit of cheap, easy diagnostic tests for the developed world is obvious. The main hurdle now seems to be getting regulatory approval, which is easier in poor countries than in the West.

3. New estimates from the IPCC of the climate's sensitivity to CO2 suggest warming over the rest of this century will be far less than previously estimated (more here). Moreover, a new study finds, at least with wheat yields, that the benefit from higher CO2 concentrations outweighs the cost of higher temperature. What little warming actually happens may end up being a good thing after all.

4. And even if it isn't, we'll be able to adapt. Thanks to cheap air conditioning, deaths from extreme temperatures declined by 80% over the 20th century in the US. Economic growth will bring similar gains to developing countries in the 21st century.

5. Mark Perry has more examples of the increase in prosperity since the 50s, including toasters, TVs, music players, washing machines and dryers. All of these have increased in quality (quite dramatically for TVs and music players), and yet are far cheaper. Don Boudreaux is also continuing his Cataloging Our Progress series with two entries on men's wear and one based on the homepage.

6. Also from Mark Perry, the US is now producing more oil than at any other point since 1993, and Texas oil production is higher than it's been since 1987. Also from that second link, regarding natural gas, "The United States has gone from being the highest cost major gas producer four to five years ago to the current lowest cost producer."

7. The fiscal cliff has been averted. While the deal we ended up with isn't my first best choice by any means, I think it's an improvement over the cliff. For most of us, taxes are going up a little instead of a lot, as the Bush cuts were made permanent for most people while the payroll tax is going back up.