Automating Manhattan

Manhattan wants congestion pricing, bringing digital communications to Manhattan vehicles. That results in system wide knowledge of current traffic, measured to vehicle location and direction. Coupled with traffic light synchronization, and driver dashboard hints, we have an order of magnitude greater match with freight volatility to road price. Then, the insurance and automobile companies add lane alignment, collision detect and warn, with early payback from insurance rates.

Total additional technology added to the car comes in at less than $1500, payback within the year. Congestion communication should be less than $100, GPS optional, and driver assist optional.

The system is self policing, so traffic priority rules easily enforced. Manhattan autos can be warned to the right allowing the passing of a bus, for example. So the cooperating vehicles might clear virtual BRT lanes on system command. This is one project the DOT might push on harder.

The utility of money

Rowe, Beckworth, and Kling are in a blogosphere discussion about money, and its role. Is there a money illusion? Somewhere Jim Hamilton posted a study that determined about 20% of our inflation is monetary, the rest is due to the relative volatility of separate goods. I interpret that to mean that 20% of the efficiency of our economy is due to the efficiency of money.

What makes money useful are the financial analysts, bankers, and investors, real people; just like any other business. These people work along the bankers yield curve, assigned to estimate inventory levels at particular terms. The central bank can deflate of inflate this group of people; making the supply chain for money shorter or larger. When the central banker makes a large enough change in short term rates, the banker people in total will shrink or expand the term points along which they operate, like any other good with its inventory managers. Bankers and investor employment will have sudden changes to such a regime change. I call it a regime change if the number term points on the yield curve change.

When I look at Beckworth's VAR charts, what interests me is the short term effects, how long does the economy take to adapt to a central bank policy change. What I find is that the two sigma boundaries diverge after about six to ten months, which I take as the time required for investors and bankers to adapt to the new inflation/deflation scheme.

In QM Theory, deflation or inflation of any supply chain will of necessity overshoot, because supply chain changes occur in integer jumps. Also, the banker's yield curve, though the fastest adapter, cannot do its job well if it adapts too soon, it is a follower. The VAR system is not quite enough to tell us if the central banker has moved us closer to an equilibrium or away, because of the follower problem. The deflation/inflation scenario has already occurred by the time the central banker reacts. The central banker rarely errors, except in the timing, he is always late.

The research needs to decompose the economy into five or so major sectors, and run what really is a Kalman filter, a simultaneous VAR on the major components of GDP, including the financial system. A more difficult task, but the paper referenced by Hamilton (which I am not searching for) did exactly this. The paper first decomposed GDP into sectors, then ran the VAR separately for each component.

Automate the BackHoe!

Let's automate this. Make it remote control for the skilled worker walking nearby. Remove the cabin and associated weight. Give it laser guidance, vision and it will dig perfect trenches forever.

The skilled operator brings it to the site on his trailer, the rest is remote control and automation. The gains in trench-meter/gal of gas will rise immediately by triple. Secondary effects give it another 2-3 fold efficiency gain.

These kinds of solutions are where the investment money should be, companies that do this.

Mackerels and Money

Kling started it, Rowe doesn't yet finish it, so I jump in. Money and mackerels are pretty close.

The Mackerel industry does have a production system, hence it has velocity just like money. How many times do you spend your paycheck? Once, how many times can you eat a Mackerel?Mackerels go from wholesale, processing, shipping, and retail, just like money.

In fact I dare say there is likely a mackerel banking cult that follows the mackerel industry quite closely and lends to mackerel fishermen. This banking industry would like money to flow and grow with each stage of the mackerel industry.

We can even price goods in units of Mackerel is we like, the accuracy depends upon most people eating Mackerel now and then. We can even predict interest rates to a extent by measuring the mackerel population in the ocean, subtracting demand, adding natural growth, and estimating the elasticity of mackerel to other goods. The math gets a banker's yield curve based on the mackerel. Within a known accuracy bound, we can build the inventory yield curve of any good in terms of any other good.

Even when the mackerel is not used for money, there are time when money is not used for exchange. Trades often take place by barter still.

Nick Rowe makes to much of the lightweight nature of money and its ease of use because of literacy. That makes money more accurate, not different.

Which Moral Hazard?

Damian Paletta reports:

"Treasury Deputy Secretary Neal S. Wolin on Thursday said that if policy makers don’t make changes to financial market rules, the extreme government intervention in the economy might end up making things worse.

“There is no question that, unless we enact meaningful reforms, the fact that the federal government intervened this past year will have made the problem worse,” he told a group of bankers in a speech. “We take this moral hazard challenge very seriously.”

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Which moral hazard would that be? Dick Cheney promising our oil creditors that government will always make them whole? Congress Persons going behind the Fed's back and getting commitments from banks to move lots of Congressional debt paper? The Fed laundering money for foreign banks? Obama wanting another large taxpayer loan to complete a campaign promise? Economists faking Keynes to predict more future than there is on the horizon? Too many financial cooks and not enough broth? Or just wishful thinking?

This is bizzare!

HT Carpe Diem, reported by MacEachem.

"The [Tuscon Unified School Baord] is calling for a two-tiered form of student discipline. One for Black and Hispanic students; one for everyone else.

With the goal of creating a "restorative school culture and climate" that conveys a "sense of belonging to all students," the board is insisting that its schools reduce its suspensions and/or expulsions of minority students to the point that the data reflect "no ethnic/racial disparities."

From the section of the 52-page plan titled "Restorative School Culture and Climate," subhead, "Discipline":

"School data that show disparities in suspension/expulsion rates will be examined in detail for root causes. Special attention will be dedicated to data regarding African-American and Hispanic students."

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I cannot begin to explain this.

The Courts delemma

In the case about corporate book banning during election season.

There is no evidence of missing Due Process. Every person involved in the case, judge, lawyer, corporate officers, had exactly the same right to publish at all times. No one lost their rights, none, zip, nada. No loss of Due Process.

This is a contract law dispute between the creator and destroyer of the corporation (Congress), and the corporation. The dispute states that if a corporation engages in the business of electioneering, their corporate license is removed, with some right of appeal. Contract law.

Ray LaHood, political czar?

In this news story, Secretary of Transportation, Ray LaHood seems more interested in politics than transportation issues. A DOT Secretary voting impeachment for someone who disguises their sexual habits rather than a DOT making transportation more efficient scares me. As the nation's technical auditor for transportation projects, it is incumbent upon me to straighten the man out. I suggest the following:

1. Control spiraling inflation in the nation's transit projects, especially boondogles like the Oakland-Airport connector in California.
2. Spend more time with local traffic planners and advocates in metropolitan districts and less time with state politicians
3. Find solutions in which low cost technology can improve traffic. Electronic devices on cars that allow insurance by the mile, congestion and toll pricing.
4. Standardize the emplacement if intelligent traffic signal technology.
5. Push technology solutions to distracted driving, insurance companies have already measured rapid payback.
6. Get more functionality out of existing infrastructure and spend less on building new.
7. And do not forget to look for, find, and report the rampant corruption in public transit spending.

It is only a small list of seven items.

Dean Baker makes an error?

In this post he criticizes the NYT for getting wrong the trade rebalance problem. He says:

"Actually, the most important change for the United States would be a reduction in the value of the dollar, which would allow the country to reduce its trade deficit."

Actually, trying to debase the currency absent economic changes will have a worse effect. The United States needs to use oil more efficiently, and build and ship products which China needs. The result is that Chines dollar holding will become more valuable to them and less valuable to Congress.

In my prosperous dream

I watch a young baker on the screen, chatting with me. Baker lives a mile away and has lots of baking fans. He bakes a batch of our favorites, bags them up for use and the robot puts my carton of goods in my mail box within the hour, for a buck.
Are you going to make me say it? OK, Silicon, rubber and asphalt!

Say hello to Ray LaHood.