Health Care Summit - The Onus is On Them

While trying to listen to the Health Care Summit today, I found myself cringing at the abuse of logic. (I just finish reading "Nonsense: Red Herrings, Straw Men and Sacred Cows: How We Abuse Logic in Our Everyday Language").

I only heard one person who actually seemed to attempt to address the issue while not pushing an agenda. That was Senator Tom Coburn who happens to be a medical doctor. I liked how tried focus on "why" health care cost so much and what we can do about it. His first proposal was to address Medicare fraud and abuse, which could save billions of dollars (The current cost of Medicare, etc. is about $440 billion with an estimated 10% of that being fraud, waste and abuse).

The response to Senator Coburn was:

Pres. Obama - "Every good idea that we've heard about reducing fraud and abuse in the Medicare and Medicaid system, we've adopted in our legislation... we want to eliminate fraud and abuse".

Rep. Steny Hoyer - "In our bill.. you'll be happy to see a very substantial investment in [cutting fraud, waste and abuse]".

So I say, Mr. President and distinguished members of Congress, if you are capable of "legislating" significant reduction of fraud, waste and abuse then you might gain my confidence that the rest of your legislation is more than "good ideas" and "investment [spending]". Until you gain my confidence, I am suspicious that any expansion of Government Health Care will be subject to the same fraud, waste and abuse of the old programs.

The onus is on you: reduce fraud in the programs you already manage before expanding them OR get out of the health care business altogether.

1929 to 2008: Market Oscillations

The stock market seems to be going up and down. This agrees with Ben Bernanke's "Financial Accelerator" model, which indicates that when the market starts to move, it typically overshoots where it should be and then bounces back. It is a little like the spring in the animation on the right.

If we use the "mass on a spring" model, there is a clear formula for the frequency at which the mass goes up and down. The time between up (or down) cycles is proportional to the mass on the spring (The bigger the mass, the slower it moves).

If we think of the "mass" of the market, a good measure would be Market Capitalization. I had a hard time finding this value for 1929, so I decided to use GDP instead. To convert to 2008 dollars, I divided by CPI (consumer price index) to factor out inflation.

Date	GDP ($billion)	CPI	Sqrt(m)	Ratio to 1929
1929	104	17.13	2.46	1.00
2008	14200	207.34	8.28	3.4

What this means is that 3.4 days today is equal to 1 day in 1929 (in terms of market momentum). So here's a plot of the stock market with 1929 scaled by value (using recent market highs) and by time (using here 2.8 days). The similarity is scary.

The Dictator Game

I'm reading "Super Freakonomics" and came across an interesting story. Somehow, it seems I always end up reading something relevant to the days events. The day I read this happened to be a couple of days before the State of the Union address.

The economic games/experiments described in "Super Freakonomics" helped me understand why the President and Congress are so quick to take our money.

There are two classic games "Ultimatum" and "Dictator" used as experiments by economists for determining human behavior.

In Ultimatum, there are 2 players. One is given $20 and is asked to offer any amount to the second player. If the second player rejects the offer, neither player gets any money. The average offered was $6. It was usually rejected if it was less than $3.

In Dictator, the main difference was that the second player got no input. Surprisingly, the "dictators" were very generous.

An economist, John List, thought these experiments didn't agree with real human behavior. He tried a couple variations:

The first variation: Dictator game with an additional option of being able to take $1 from the second person. The result was that fewer people gave money. The power to take people's money (taxation) makes you less generous!

The second variation: the Dictator game, but the first person is told that the second person also was given $20. They are told that they can still give any portion of their money, or take any of the second persons money. The result was that only 10% gave money, more than 60% took money, and most surprising more than 40% took ALL the money. Taking money from the rich makes you want to take ALL the money!

3. The final version of the game was the same as the last version, except that both players had to WORK for the $20. The result was that only 28% of the players took money away and 2/3 neither gave nor took a penny. We respect other people's property more when everyone works for what they have!

The last version is my favorite. I think it is evidence that a free-market economy is the best option. So what does this have to do with the State of the Union address this week?

Congress and the President are acting like dictators in game 2. What they don't realize is that they are actually playing the "Ultimatum" game and the American voter is about to "reject" their offer and vote them out of the dictator position. Test results won't be in until November.

Apple vs. The Czars

My son had his Apple iPod Nano stolen at school. I don't remember if it was from his backpack or his locker. I do remember that I got mad at him for bringing it to school in the first place. This all happened before Christmas and his birthday, so an obvious present for him was a replacement MP3 player.

I was concerned about replacing it just to have it stolen again. I would prefer he buy it with hard earned money in order for him to place greater value. I wanted to keep our losses to a minimum by buying the cheapest alternative.

Notice all of the "I"s in the previous paragraphs.

So what did my son ask for? An Apple iTouch. Ouch! That's an expensive alternative! Of course my lovely wife thought we should get the iTouch, since she has a different philosophy:

• Christmas and birthday presents are supposed to be about what the recipient wants.
• Presents don't have to be practical.

Luckily she helped me realize that I was acting a little too much like a czar. A czar is all about top down decision making. The czar knows best.

So my son got an iTouch and I got a LG Chocolate Touch cell phone. The LG is the first new cell phone I've ever had, since I am always practical and take the hand-me down phones from my wife.

The LG Chocolate Touch is pretty cool.
The iTouch (and iPhone) is ABSOLUTELY AMAZING!
So what's the difference?

The difference is top down planning vs. free market. Both LG and Apple use top down development to create cool technologies, but Apple uses the free market to completely blow away LG. The difference is in the "apps" or applications you can use.

Apparently LG uses the czarist or top down approach. The czar defines what will be on the phone and the peon developers implement their plan. I'm not insulting the developers; just the czars. The developers probably have a lot of great ideas, but weren't allowed to do them or had no incentive.

Apple, on the other hand, understands the amazing power of the free market. They made it relatively easy to create apps for the iPhone/iTouch, provide a store for selling your apps, and give you 70% of the selling price! (I bet the LG developers are lucky to get 1% of the selling price of their apps). The result is over 100,000 very cool apps.

Why does this work? It's all about the protection of "life, liberty and the pursuit of happiness". Get rid of the czars and let the people create freely. Give people cool options and they will spend money.

Here's a few of the iTouch apps:

1. Koi Pond - Relax while you watch koi fish in a pond. Touch the water and it sends ripples and the fish scatter. Hold your finger steady and the fish come and nibble on it (at 4:50 in video).
   
2. Earthscape - Spin the earth and zoom into anywhere to see satellite imagery. Find your house or go to Paris or Egypt.
   
   
3. Shop Savvy - Find the cheapest prices. Take a picture of a bar code and find out the lowest price and where to buy it online.
   
4. Flute - Hold your iPhone like a flute and blow into the microphone to create music. Use the Google Earth map to find other people playing their flutes and listen to their music.
   
5. Finger Twister - Like the classic game twister, but you play with two fingers with a friend.
   
6. Level - Use your iPhone as a bubble level. Place it sideways on a shelf or picture frame to see if it is level.
   
   
7. Fishing - Pick a fishing spot, make a casting motion with your iPhone and then real in the fish using the touch screen.
   
   

I'm a racist; and a pacifist

I'm reading a great book: "Nonsense: Red Herrings, Straw Men and Sacred Cows: How We Abuse Logic in Our Everyday Language". After learning about all of the wrong ways to make statements, I decided to take notes on what the non-abusive, logical way to speak.

One example is "name calling". The non-abusive way to call someone a name is to:

1. Define what the name means.
2. Provide evidence that the person meets the criteria of the name.

Let me now apply these rules to the title of my blog. I'll start with the less emotionally charged word.

Pacifist

1. The Definition
Pacify = "to bring peace"
Pacifist = "someone who loves to bring peace"

Note that the suffix "-ist" modifies the root word as "someone who loves ..."

2. The evidence
My mom was the first one to call me a "peacemaker" when I tried to get the neighbor boys to stop hurting their dog.

Racist

1. The Definition
Race = "the manifestation of inherited physical characteristics"
Racist = "someone who loves race"

Note: my definition is quite different from the usual definition.

2. The evidence
I was raised in the Mormon church, which historically discriminated against blacks in that they were denied ordinances beyond baptism. When I was 14, I read a book called "A Black Mormon Tells Her Story", by Wynetta Willis Martin. I was so impressed by this book that I wrote about it in my journal. This is what I wrote: "Reading this book has really changed my impression about blacks and our church. I now know that someday, blacks will be able to hold the priesthood...". A photo of my journal is below, along with an interesting entry a year later, when the Mormon church changed their policy on blacks, giving them full rights to all church ordinances.

My father worked at a family business in South Central Los Angeles. I would occasionally work Saturdays and when I got older, I would work summers. One of my first regular jobs was stock boy (before that I swept floors, cleaned, etc.). I worked alongside another employee, Delores, and we became good friends. Delores was also Mormon (and black) and her husband was one of the first black Mormon bishops. My next job was deliveryman and I visited hundreds of homes. This was a good way to break racial stereotypes that a suburban white boy might have developed. I met alot of very nice people (Most people are nice when you deliver a working refrigerator, regardless of what race they are).

When I turned 19, I applied to go on a mission for our church. I still remember telling my dad that I would like to have a black companion (mormon missionaries are always paired in companionships). Companionships are assigned, so you don't get to pick your companion. You learn alot when you spend every waking hour with someone who was previously a complete stranger. I have to admit that this was challenging; until I got my last companion. He was black. We had some amazing experiences and a lot of fun. He was also the most compatible companion I had my whole mission and our friendship raised the bar for what I looked for in a relationship.

Later, in graduate school I worked with people from Japan, Taiwan, India and Europe. Our lunches were multicultural exchanges. I loved it.

Years later, my best friend at work was Asian-American. He was a good friend at a challenging time in my life. He invited me to play in a 3-on-3 basketball tournament at his church and I ended up being one of a few white guys (everyone else was Asian). I must say, yt was the friendliest basketball I've ever experience.

So in conclusion, I love race; therefore, I'm a racist.

My Journal Entries:

Stones into Schools

I just finished Stones into Schools, by Greg Mortenson. After reading his book, I feel guilty that I took any of his time attending his lecture earlier this month. Let me just say: Good work Greg!

I've never been a big fan of being a tourist, and as a result have traveled little. I did have the opportunity to live in Brazil for 16 months and work in Switzerland and Wales for a few weeks. I enjoy getting inside a culture, spending time with real locals in their everyday habitats, as opposed to the scurrying through the usual tourist facade. That's why I enjoyed both "Three Cups of Tea" and "Stones into Schools". I was able to read about a real person having real experiences in Pakistan and Afghanistan (if they aren't real, then I must say Greg is very creative). I trust very few sources to give me the same insights provided by Greg.

We are usually bombarded by an endless supply of people over-selling us on stuff that we end up becoming cynical. There is this rare moment however when you interact with or observe someone and you realize that you are experiencing something real. This was one of the main reasons I married my wife. I had never met anyone so real. Next book: "Hold Me Tight"

Global Warming: Leave CO2 Alone!

I find it confusing when I see groups with strong positions in direct opposition to each other. Somewhere between the two extremes is some version of the truth, and I wish more than anything to discover the truth. With Global Warming I think I'm getting closer to the truth.

First, I think I should disclose that I have sympathized more with the Global Warming deniers. This comes partially from distrust and discomfort with phrases like "the debate is over", "everyone knows", "if we don't do something now...", etc. However, I decided that in my quest for truth, I needed to be willing to accept the truth, whatever it might be. I have therefore put on my objectivity hat making myself willing to accept the truth.

I've tried to make my analysis as simple as possible, since global climate is extremely complicated. My focus is on the question: Are humans increasing the emissions of Carbon Dioxide (CO2) and are CO2 emissions causing the planet to warm up?

To save you time from reading this whole posting, I'll give you my conclusions up front, with the analysis after. I found some surprises.

Global Warming Conclusions:

1. CO2 levels have been rising for the last 50 years.
2. Humans may be responsible for CO2 rising (CO2 growth appears to match population growth).
3. CO2 DOES act as a greenhouse gas with a warming effect (this was a surprise to me).
4. The CO2 warming effect is much weaker than reported by the media.

Besides CO2, I think that humans are affecting the environment and we should be serious about monitoring what we are doing. Still, draconian measures are not yet justified.

CO2 levels have been rising for the last 50 years

The primary support for this are the CO2 measurements at Mauna Loa Observatory in Hawaii [1] [2] These show a steady rise in CO2. Although this might be expected near an active volcano, other data from around the world show the same trend [3]. The data before 1959 are not as reliable, but an interesting study has been done by Beck [4].

Man may be responsible for CO2 rising

This required a little more analysis. I tried to find reliable data for CO2 from fossil fuel emissions and finally settled on data from the CDIAC [5]. The fluctuations in the fossil fuel data don't show up in the atmospheric CO2 data. The atmospheric CO2 data does look suspiciously like an exponential growth curve. The world population also follows a exponential growth, so this is included as well. It's reported that people exhale about 1 kg of CO2 per day (by my calculations, people breathing produces about 30% as much as fossil fuel use).
This chart (click to enlarge) shows the CO2 from fossil fuels, atmospheric CO2 concentration above 265 ppm (since we are talking about an increase over some supposed baseline), and world population. Both CO2 levels are scaled (normalized) to the 1959 population data. I purposely picked a 265 ppm baseline since it shows how closely atmospheric CO2 and population growth are correlated. The most important note is the fluctuations in fossil fuel consumption are not reflected in the atmospheric CO2 concentrations.

This chart of the Carbon Cycle [5] also shows that CO2 from fossil fuels is only a small part of the overall carbon cycle (Though there is no reference to where the numbers come from).

The chart below shows the fluctuations of CO2 concentrations derived from ice core data for the last 400,000 years. It would be interesting to know what caused these fluctuations (volcanoes, natural climate change cycles, etc.). These numbers are used to show that we are currently at the highest levels in 400,000 years, although it is disputed whether or not the ice core data accurately show peaks in CO2 occuring, this site attempts to dispel this as a myth [6].

CO2 acts as a greenhouse gas with a warming effect

Much of the "proof" that CO2 is a hazardous greenhouse gas comes from complex computer models of the climate. While I don't have the expertise to critique these models, I do have enough experience to be suspicious of the claim that CO2 is a problem.

I use a simple model. Consider a sphere just slightly larger than the earth and its atmosphere. If more energy goes into the sphere than comes out, the inside heats up. The energy going in is solar radiation and the energy coming out is reflected solar radiation and thermal (infrared) radiation from the earth. CO2 doesn't absorb the solar energy but it does absorb some of the infrared energy. See my post on Black Body Radiation for more info.

My suspicion comes for the fact that CO2 absorbs 100% of that thermal radiation (energy) over a short distance and increasing CO2 shouldn't result in more absorption.

An analogy for this is a car parked in direct sunlight. The car gets hot inside since the sunlight goes through the window and heats up the interior. The thermal or infrared radiation from the interior is then blocked by the window glass (glass is opaque in the infrared). Making the glass in your windshield slightly thicker is similar to increasing CO2 levels and unlikely make your car hotter.

Luckily we don't have to depend on my hunches or an analogy to show whether CO2 acts as a greenhouse gas. There is a computer model (MODTRAN) that has been well verified for computing the transmission of radiation through the atmosphere. MODTRAN can be run using a simple web interface that allows setting atmospheric CO2 concentration and surface temperature of the earth [7]. This is much better than many of the crude calculations I've seen on the Internet [8][9] The chart below shows the MODTRAN output for a Mid-Latitude Summer Day, 375 ppm CO2. The red line is the energy leaving the earth's atmosphere. The big dip in the middle (between wave numbers 600 and 800) is due to CO2 absorption.
The next chart is the same results with no atmospheric CO2. You can see the dip is missing, which means with no CO2, the energy is escaping the earth's atmosphere.
The next chart shows the difference in radiation leaving the earth for 375 ppm and with CO2 doubled at 750 ppm.
The total area under the blue curve is the radiant energy at 375 ppm. The red curve (mostly overlayed by the blue) is for 750 ppm. There are small differences at the edges of the CO2 absorption band. Though small, this does show that CO2 acts as a greenhouse gas, blocking some radiant energy.

The CO2 warming effect is much weaker than reported by the media.

Two questions need to be answered:
1. How much energy is trapped due to the CO2 greenhouse effect?
2. What is the effect on temperature?

Update Jan. 20, 2010: The IPCC refers to this as "radiative forcing" or "the change in net (down minus up) irradiance (solar plus long-wave; in Wm^-2) at the tropopause AFTER allowing for stratospheric temperatures to readjust to radiative equilibrium, but with surface and tropo-spheric temperatures and state held fixed at the unperturbed values".IPCC definition of "Radiative Forcing"

I will show that the IPCC definition is flawed, since allowing the surface temperature to change significantly offsets the green house effect.

MODTRAN can be used easily to demonstrate this. The next step is to balance the radiative forcing (solar in, thermal out) while assuming solar irradiance is constant. As the earth heats up from the green house gas, it emits more thermal radiation, which is only partially absorbed by CO2. So the earth only needs to heat up slightly to create a balance.

The table below shows calculations for various CO2 concentrations. The Radiant Intensity is how much energy (Watts) is leaving the surface of the earth per square meter (300 Watts is the same as three 100 Watt light bulbs). The surface temperature was determined by running MODTRAN with various surface temperatures until the radiant intensity matched the baseline. As you can see, the temperature changes are not as severe as those predicted by the experts [10].

	Atmospheric CO2 (ppm)	Radiant Intensity (W/m2)	Surface Temperature (Kelvin)	MODTRAN Predicted Temperature Change due to CO2 (C)	Measured and Predicted (p) Temperature Change (C)
Baseline	265	281.093	290	-0.21	-0.25 (m)
1959	316	280.371	290.21	0	0 (m)
2007	375	279.648	290.41	0.20	0.35 (m)
Double	750	276.791	291.27	1.06	2.5-3.5 (p)
Worst Estimate of CO2 in 2100	1000	275.598	291.64	1.43	4.4 (p)

Notes

• My analysis does not address the hypothesis for the potential magnifying effects of CO2 (i.e., slight CO2 warming causes more water vapor in the atmosphere. The water vapor acts as a stronger greenhouse gas than CO2.). See The Climate Effects of Water Vapour
• Besides energy transfer outside the earth's atmosphere, there is also transfer at the earth's surface (land and oceans). There are many potential processes here (geothermal, ocean warming/cooling, etc). The only human activity that I could think of was mining/drilling and then burning fossil fuels (converting chemical energy into thermal energy). I calculated this effect to be less than 1% of the greenhouse effect.
• Melting glaciers and polar ice caps cools the atmosphere (Most likely by a very small amount).
  
• Water (clouds and humidity) have a much greater greenhouse effect than CO2
• Other gases (Methane, etc.) from human activities were not included in my analysis. If they are the real problem, than I think we should stop talking about CO2 and focus on emissions of these other gases.
  
• Climate change addresses local variations, global warming addresses thermal energy being added to the whole system.

Cosmic rays the real cause of Global Warming?
Update Jan. 16, 2010: Climate experts divided on implications of brutal cold spells
Evidence of Arctic Warming
Update Dec. 2, 2011: The climate may not be as sensitive to carbon dioxide as previously believed
Update Oct. 14, 2012: Global warming stopped 16 years ago
Update Oct. 17, 2012: No, Global Warming Hasn't Stopped
More info at the Petition Project
Update Jan. 20, 2018: Worst case global warming scenarios not credible study