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My post from yesterday raised questions about the economics of nuclear power plants. So, as is my custom, I spent five minutes on Wikipedia absorbing as many misconceptions about this topic as I could.

The first important concept to understand is that solar and wind power can never replace more than 20 percent of the world's total energy needs because they are not reliable sources for any given hour of the day. We still need baseline energy production.

And then you have the problem of getting the energy from where it is produced to where you need it. That means Nebraskans won't be powering their microwaves from ocean wave energy any time soon.

The economics of nuclear power plants aren't as easy to calculate as you might assume. One of the bigger unknowns is what technological breakthroughs we'll see in the next twenty years. In other words, is the most economical way to build the next nuclear power plant to wait 20 years before you start, thus benefitting from new technology?

And who can predict technological breakthroughs in renewable energy? If someone comes up with an absurdly cheap way to store electricity, or to transmit it thousands of miles without much loss, then solar and wind have more potential than anyone imagined. And if the scientists figure out how to inexpensively turn just about any fast-growing organic matter into oil through chemistry, that's a game changer.

And what are the costs for the fossil fuel alternatives? What price do you assign to the human contribution to global warming, and the occasional war over oil?

The U.S. nuclear power debate usually gets characterized as a wrestling match between irrational scaredy cats and clear-headed rationalists, refereed by a comically incompetent government. The only thing I know for sure is that no one can understand the economics of a 40-year investment.
 
In rough numbers, let's say there are 100 million houses in the U.S. that could benefit from one of these standard greening investments:
  • - Solar panels
  • - Whole house fans
  • - Improved wall insulation
  • - Better windows
  • - Sealing and insulating all ducts
  • - Improved roofing with radiant barriers

Each of those investments would pay for itself if only you could solve the financing problem. No one wants to plunk down a pile of cash today for a house he might sell tomorrow. And if your payback is over ten years, it's no wonder most homeowners are saying no thanks.

The city of Berkeley came up with an interesting financing approach. The city will pay the cost of having solar panels installed on your home and then get the money back over many years through a special property tax on the property. The tax stays with the property even if it is sold. The homeowner gets little or no financial benefit, but it's good for the planet, so a typical Berkeley resident accept the inconvenience of the installation process and paperwork, and the bother of hosing down the panels every week. I like where this plan is heading, but I don't see it working too well outside of unselfish Berkeley.


http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/10/26/MNAIT0DQO.DTL


And so I decided to apply the awesome brainpower of all you Dilbert Blog readers to come up with a better plan for financing the green retrofitting of homes, both for solar panels and for the more mundane improvements, such as whole house fans. If you succeed, you will put millions of people to work, save the environment, and end dependence on foreign oil (as soon as we all have electric cars).

The first part of the puzzle is coming up with a way to calculate savings for these various green investments. I'm in the process of sizing the solar panel installation for my new home construction and I can tell you that it's more guessing than science. Given all the other green engineering in the home, no one knows how much electricity it will really need. So I can only hope that my whole house fan, for example, will pay for itself over time. Every home is different, so calculating returns for green upgrades is dicey.

One solution would be for the government to mandate some sort of average payback for each sort of greening investment. You might have to tweak the number for region, size of home, and a few other simple variables. But that's a start.

This approach works for Energy Star appliances. Each appliance is assigned one number that is the estimated annual energy cost even though everyone knows that the actual cost will vary a great deal based on region and how many times you open the fridge door, for example. So while the numbers are inaccurate for any particular user, they still guide people toward lower energy consumption on average. I could see similarly inaccurate yet helpful average numbers applied to other greening investments.

If I knew that on average a whole house fan pays for itself in ten years, it wouldn't matter too much if the real payback for my particular home was closer to five or fifteen years. It would still be a good investment as long as the investment stayed with the house, as with the Berkeley model, when I sold it.

The problem with the Berkeley model is that the homeowner doesn't get much if any financial benefit from participation. To make this work in other parts of the country you need to appeal to people's more immediate self-interest. They need to see money in their pockets on day one.

One solution would be to mandate that banks wrap any greening investments into existing mortgages, so long as the borrower is current on payments. That should work for banks since the investment would free up cash for the borrower, through lower energy costs, that is more than the cost of the extra loan payments. In theory it would reduce the banks' risks while increasing their profits. And they could use the government's inaccurate generic estimates for green investments when evaluating these mortgage add-ons.

The next problem is that when you sell a home you get little benefit for any of the greening investments. Green home improvements are somewhat invisible to the potential buyer who makes his or her decision on factors such as location and square footage and the loveliness of the kitchen. To fix this situation, imagine the government mandating that all homes have an annual energy rating, similar to the Energy Star program. For existing homes it could be as simple as disclosing the average power bills for the past three years and the average number of occupants. The energy figure should be prominently displayed, by law, on the real estate listing. When buyers can see those costs, the green investments immediately have resale value.

If every home in the U.S. spends $10,000 on solar panels and other green upgrades, that's a trillion dollars in economic stimulus. It would fix the economy, solve global warming, and reduce dependence on foreign oil (assuming electric cars).

This concept needs lots of tweaking to work. Go.

 
A stock index fund buys stock in every company that is a member of some defined index, such as the S&P 500. The idea is that if you own, for example, a little bit of 500 different companies, you'll be well diversified and generally do better than the professional stock pickers, thanks in part to lower fees and lower taxes.

The reason index funds are so popular is that it's hard to pick individual stocks that will outperform the average. But I wonder if it is just as hard to identify stocks that will surely NOT be stars in the next year. In other words, could you have the best of all worlds by starting with, for example, the S&P 500 stocks and subtracting the ones that have no realistic chance of being stars?

Much of the growth in an index fund comes from about 20 percent of its stocks. It's hard to know in advance which stocks will be in the top 20 percent next year. But is it just as hard to forecast which stocks will NOT be in the top 20 percent? On the surface, that seems easier.

So called short sellers make money betting stocks will go down. As a group, and over time, they don't do better than the people betting which stocks will go up. That might tell you that identifying the stocks that will go down is just as hard as identifying the ones that will go up. But for my hypothetical index fund you don't need to identify the stocks likely to go down a lot, which is where short sellers make their money. You simply need to identify stocks that are unlikely to be top performers on the up side. Isn't that a relatively easy target?

The quick answer is "no." If it were that easy there would already be such funds and everyone would be rushing to invest in them. A big reason the economy is in such a mess is that lots of investment ideas seem like obvious winners but aren't. I laugh every time I see a commercial on CNBC for some product or brokerage service that boasts it will help you use your own excellent theories to invest your money. What the world really needs is a product that will prevent people from using their own dumbass ideas to invest.
 
I have a common name. There are at least three guys named Scott Adams in my local community. Most big corporations have a Scott Adams on the payroll. We're all over the place.

When your name is that common, it's only a matter of time before one of us gets arrested for serial murder, running a Ponzi scheme, or having a dungeon below the house. So far we have been lucky. Most people named Scott Adams end up pursuing hyper-nerdish lines of business. The most famous Scott Adams who isn't me is a pioneer computer game developer. Not too shabby. And recently a junior member of our club won a science award for genetically modifying wheat. Nice.

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20090507/designer_wheat_090509/20090509?hub=SciTech


I wonder if other people throughout history have worried about this sort of thing. For example, one of the most colorful bad guys of all time was called Vlad the Impaler. You could Google him, but his name pretty much says it all. I wonder if after he got famous for being all fierce he worried that some other Vlad the Impaler would come along and ruin his reputation. He wouldn't want to be walking the dog and overhear neighbors talking...

Neighbor one: Who gutted that peasant over by the other dead peasant?


Neighbor two: I heard it was Vlad the Impaler.


Neighbor one: Do you mean the chicken fornicator or the other one?


Right now there's a 16-year old Scott Adams in Canada saying, "Why did that idiot have to write a blog about Vlad the Impaler and ruin my good name???"


Sorry.

 
Recently I wrote that newspapers (all of them online) would become extremely local to your family. CNN had a similar article recently, but what they call hyperlocal is your community, not your family. So that isn't nearly local enough in my view.

http://www.cnn.com/2009/TECH/05/01/future.online.news.hyperlocal/index.html?iref=t2test_techtues


Moreover, I think the family calendar is the organizing principle into which all external information should flow. I want the kids' school schedules for sports and plays and even lunch choices to automatically flow into the home calendar. And when I want to decide what to do on the weekend, I want to click on the date for next Saturday and have all the relevant choices of plays, movies, and events pop up.

Everything you do has a time dimension. If you are looking for a new home, the open houses are on certain dates, and certain houses that fit your needs are open at certain times. If you are shopping for some particular good, you often need to know the store hours. Your calendar needs to know your shopping list and preferences so it can suggest good times to do certain things.

Time is closely related to distance. On a typical night, for a typical family, there is much driving to and fro to deliver people and goods to where they need to be. Sometimes it is more complicated than a Fedex route. It would be nice if the family calendar helped us plan the shortest routes to accomplish all goals. The calendar just needs to know what I need and when, then plan which family member with a car is nearest.

Perhaps your calendar could suggest some carpooling as well, all automatically. I don't need to know my friends' business, but if their calendars and mine spoke to each other and found some common driving patterns it could shoot us both an offer to carpool, assuming we had approved those friends in advance for such offers. My phone would get the offer and I could confirm with a simple text message response.

When I read the news, I'm generally most interested in how stories have unfolded across time. I want to know the "new news," as in the topics that have never been reported until today, but I also want ongoing charts and graphs about the "old news" such as wars and the economy. My understanding of the war in Iraq, for example, has little to do with what blew up today and a lot to do with the trend lines over the entire war. In other words, I see the news in terms of time.

In most families, everyone keeps their own calendar and does a spotty job of sharing what's on it with everyone else. In time that calendar coordination will happen electronically. And most of the information will come from external sources, such as your schools, clubs, and organizations to which you belong.

Some time ago I blogged that advertising belongs in your electronic calendar, for your benefit more than for the advertiser. That's because my interest and desire in certain products and services is linked to timing. If my calendar has a certain birthday coming up in a week, and I've checked the boxes saying the person is a certain age and gender, or has certain hobbies, my calendar can start giving me gift suggestions and recommending online flowers and e-cards and the like. In other words, advertisements can move from nuisance to valuable service just by adjusting when you see them.

I think the biggest software revolution of the future is that the calendar will be the organizing filter for most of the information flowing into your life. You think you are bombarded with too much information every day, but in reality it is just the timing of the information that is wrong. Once the calendar becomes the organizing paradigm and filter, it won't seem as if there is so much.

 
I was reading a debate on healthcare in the recent Newsweek. The prominent Democrat supported some sort of national healthcare while the prominent Republican supported more of a free market approach. Most people will probably take sides based on their assumptions about government efficiency versus market efficiency.

An old joke that works as its own punch line goes "I'm from the government and I'm here to help." Most people in this country reflexively believe the government will screw up anything it touches. There's plenty of evidence for that view.

But I wonder if government can be more efficient than the free market in specific situations, specifically in situations where the service is more about software than headcount, and where nothing needs to be invented.

Imagine a situation where you are deciding if a particular service should be handled by the government or by a hypothetical free market dominated by three players. The government's incentive is to provide the service as cheaply as it can. Any company's incentive is to transfer the greatest amount of money from consumers to stockholders. And to do that in a competitive industry you usually end up with what I call confusopolies. A confusopoly is a situation in which companies pretend to compete on price, service, and features but in fact they are just trying to confuse customers so no one can do comparison shopping.

Cell phone companies are the best example of confusopolies. The average consumer finds it impossible to decipher which carrier has the best deal, so carriers don't have normal market pressure to lower prices. It's a virtual cartel without the illegal part.

The advantage of a free market system is innovation. The market has an incentive to try new things. Governments prefer to avoid risks. If you need innovation, you want the free market.

In the case of national healthcare insurance, I ask myself these questions:
  1. Is it more about software than headcount?
  2. How important is innovation?
  3. Is the free market for this service a natural confusopoly?


Before you call me a socialist, I don't have an informed opinion on national healthcare. But I also don't have an automatic bias in favor of a free market that gave us Enron, WorldCom, Madoff, derivatives, and mortgages to hobos. I think you have to look at the specifics.

 
When I'm walking the dog, and she squats to do her business, I reach into my pocket like a good citizen and take out a plastic poop bag. The bags are slippery and hard to open. The only solution is to lick a finger and give myself enough temporary gripping power to pry it open. The problem with this solution is that I'm licking my finger while thinking of dog crap. This never fails to creep me out.

But I topped it yesterday. I was working out at the gym and felt a powerful thirst. The gym provides large paper cups near an ice and water dispenser. I filled my cup, slapped on a plastic lid, and inserted the straw. So far, so good.

As I was happily slurping away, I entered the locker room and the first person I saw was a man in his mid sixties with a towel around his waist, blow drying his hair. Suddenly, to my horror, he put the blow dryer under the towel and started drying his junk. . . while I was sucking on a straw. I was temporarily blinded and I forgot most of my childhood.

Am I the only person routinely afflicted by the proximity problem?
 
Here's a link to a recent article about me. I thought it was especially well written.

http://www.mercurynews.com/entertainment/ci_12148055


As regular readers know, I lost my voice for several years thanks to a vocal condition called spasmodic dysphonia. I regained my ability to speak thanks to the one surgeon in the world who pioneered a fix for this problem.

I sound terrible on the video because I was drawing and talking at the same time, so you hear me mumbling and searching for the right words. I don't multitask well. So unfortunately that's my "normal" voice. The spasmodic dysphonia problem is 100% gone. When I'm not distracted, my voice is better now than it ever was, largely because I did so much vocal training before discovering the surgery. I actually came out ahead on this deal.

If you have read anything about my use of affirmations, you might be interested to know that the only affirmation I've employed for the past several years has been "I Scott will speak perfectly." This was a worthy test of affirmations since most voice experts said spasmodic dysphonia was incurable. I'd guess that 99% of the people with the same condition believe it can't be fixed, and that belief will make it true for them. I chose to believe the opposite. So while I still don't speak "perfectly," I'm already better than my old "normal" voice.

 
How can you make money from this whole global warming thing? I mentioned back in January that I was investing in a water resources portfolio (PHO) under the theory that water would be the next bubble. So far I'm up 9%, but the market is up in general, so that's no big deal. Global warming is predicted to cause massive droughts in some places, so this seems like a good hedge.

But it got me thinking that there must be a way for believers in global warming to profit at the expense of skeptics, assuming the believers are right. For investment purposes it doesn't matter what is causing global warming. All that matters is that it is happening and apparently already unstoppable according to a growing consensus of scientists.

The obvious stock plays have already been run up. If you invest now in solar, wind, and other green energy players, you might be getting in late. And some other better technology could overtake them. I'm looking for an investment that doesn't involve green technology.

For example, I already play soccer and tennis at indoor facilities. If there was a stock you could buy in some company that was building indoor sports clubs that would be a good play. You'll need them when it gets hotter.

Food supplies will be disrupted in some places and maybe improved in others. If you could find a way to invest in an agribusiness that has its operations in places likely to have improved growing conditions with global warming that might be a play.

Maybe real estate is the way to go, but it's harder to diversify. The idea is to find places that have just okay weather now that will have terrific weather later. That seems too risky. Real estate is influenced by too many other factors.

The best investment hedge might be as simple as a portfolio of sunscreen manufacturers.

What are your global warming investment ideas? And resist the urge to say, "beachfront property in Idaho."
 
Yesterday I spent several hours at a photo shoot. The photographer was an award-winning top-of-his-field professional with an almost supernatural sense of visual rightness. At one point he was taking some profile shots of me and I mentioned that I thought I had a "good side" but couldn't remember which one it was. So he had me face left, then right. As soon as I turned right he said, "It's that one." No hesitation. No doubt about it.

I find this to be an inconvenient sort of knowledge. For the rest of my life, every time I talk to someone I will want to cheat my face toward the good side. I will never again make eye contact unless it by peripheral vision. In the interest of public safety I will only walk on the side of the street that puts my good side toward traffic.

I feel like a hunchback who doesn't want anyone standing behind him because he knows people will stare at his hump. I fear people will be looking at my ugly side and wondering if it is the first sign of swine flu.  

I'm thinking of getting an eye patch for my ugly eye. Then I'll put in a Bluetooth headset to disguise my ugly ear hole. I considered wearing a hat to hide the upper part of my ugly head but it would be rude to wear a hat indoors. My best bet is to convert to a religion that requires a turban and doesn't have an issue with mutton chop sideburns on one side.

If I put it all together just right it will be a look. On one side I will be an unnaturally handsome cartoonist, just like always, but my ugly side will be transformed into an Elvis pirate Sikh theme with just a hint of douche bag cell phone user. I'm sort of an artist, so I think I can pull that off.

Or was it my other side that the photographer said was my good one? Shit.
 
 
 
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