Tony K's Blog

The Odds on Global Warming

2011-11-26T07:29:00.000-08:00

I have mentioned previously that I am a big fan of Andrew Tobias. Recently, he posted on his blog the claim that climate "deniers" were massively funded by corporate interests.

I sent him the following note.

"You said, "The connection between the climate-change deniers and the Republican budget enthusiasts is that both are massively funded by corporate interests, now entirely unleashed by the Republican Supreme Court and its Citizens United decision. That’s the one that stacks the political system even more heavily in favor of the rich and powerful, and allows their influence to be hidden."

"For the record, I am a big fan and we are on the same side politically. Scientifically we differ, and this thing about climate-change deniers be funded by corporate interests is simply not true as far as I can tell People point to XOM funding someone for 25 Million dollars or so. Compare that to the forces of climate change "proponents" who have received Billions upon billions of dollars. As far as I can tell, most of the major skeptics (please don't call them deniers and I won't call the universities elitist), are private citizens doing their research with their own money and minor contributions from supporters.

"Am I biased? Yes. I work for, but am in no way representing Chevron with this opinion. I am also a citizen of this planet and want our leaders to make good decisions based on reliable information. Most of the AGW data does not meet that standard."

He responded by asking me what probability I assign to the possibility that thescientific community has it right. My response follows:

Hi Andy,

You asked me “What probability do you assign to the possibility the broad scientific community has it substantially right?”

I am an earth scientist with an MBA. I have been a member of Texaco’s exploration risk team and I do probabilities for a living. So if you’re looking for one number answer like x%, it’s not happening. Also, I normally do not ever assign 100% to anything, but I will on some items just to not look too pedantic.

The key word in your question is “it”. There are a lot of “its” in the field of climate science and what to do about it, so I will just go through those as a chain of events that has to happen for “it”. As you read down the list, remember that the links are dependent, so if the previous link does not come to pass or is not true, the ones following become irrelevant.

One more quick note. I don’t think the probabilities below are “right.” They represent states of knowledge—mine and the climate scientists. I am pretty comfortable directionally, so if a number is at 0% it’s pretty low, and if it’s 75% it’s pretty high.

Link	Probability	Cumulative Probability
The earth is warming. Probably. It appears that there was a very low temperature period from about 1600 to 1800. It’s not surprising that we are warming from that. The actual data are quite ambiguous. The temperature increases shown on all the graphs can be arrived at only by applying adjustments to the thermometer data. These adjustments are in many cases larger than the temperature anomaly. The signal to noise ratio is therefore quite low. Nonetheless, although I have a lot of questions about the data, on a macro level it seems reasonable. Let’s call it	100%	100%
CO2 causes the earth to warm as a primary effect. Call it	100%	100%
Increase in CO2 causes the earth to heat up as a primary impact. Call it	100%	100%
I think that the above 3 points define the scientific consensus. Going past this there is much less consensus.
Increase in CO2 is the primary cause of the observed temperature increase. From ice core data, historically, the relationship is reversed. Temperature increase leads CO2 increase by about 800 years. Climate scientists claim that the causality reversed about 50 years ago. Their claim is something like, we have eliminated all other known causes of temperature increase, so that leaves CO2 as the culprit. Their models leave out a number of possible drivers such as deep ocean currents, land use changes, and solar activity. I think there is too much that we do not understand about the climate and impacts on the climate for this line of reasoning to yield any kind of certainty. Has CO2 had a positive impact on temperature. Yes. Is it the primary cause (more than 50% of the change)? Not proven, but not totally unreasonable.	50%	50%
If we do nothing to curtail CO2 emissions, temperature in 2100 will be at least 2 deg C higher due to CO2. A doubling of atmospheric CO2 causes about 1.2 deg C as a primary effect. IPCC projects about a doubling through 2100. So, based purely on the primary impacts of CO2, a number closer to 1 deg C would be appropriate. The CO2 in the atmosphere has doubled since 1900, yet the temperature has risen approximately 0.7 deg C, if you believe it. Getting to a higher number requires computer models with positive feedback impacts that have not been observed in nature. I have built complex economic computer models over long time periods. They tend to be extremely sensitive to assumptions in the model. Even extremely small errors or inconsistencies can lead to huge anomalies because of the large time period. On top of that, the researchers have not made the models available for auditing. There is a near 100% probability that there are errors in the models of unknown impact. Going beyond 2 deg C is not high certainty. The role of the water cycle and cloud formation are still very much poorly known. The models do not backcast correctly and they have not demonstrated ability to forecast. The models are wrong. They rely on extremely complex computer models with huge assumptions about how variables interact, that have not been audited. Possible, but until those models are opened and audited by critical assessors, I can’t put much faith in them. I’ll give this one a VERY generous	20%	10%
This is the end of the climate science. The rest gets into economics and social sciences. At this point we're looking at a 10% probability that the climate science is "right."
So if all the above comes to pass, what will be the net effect on the world? There is a mixed bag. There is some possibility that the earth will reach a tipping point leading to global catastrophe. There is no consensus that catastrophe will ensue, so this is not part of “it.” Consider more moderate scenarios. In general, heat is better than cold for people. Higher CO2 is better than low CO2 for plants. Low lying areas could flood. Weather patterns could get more severe (although this is not a slam dunk either). All else being equal, if there is no economic growth between now and 2100, I think the overall consequences would be negative to mankind. However there will be economic growth. Today’s poor countries will not be so poor 100 years from now. People will not be engulfed in their beds by the melting glaciers. Earth’s climate has always changed, always. Cities and countries grow prosper and go away due to climate. There is a lot of time to respond to slowly developing trends by adapting. Maybe marginally better, maybe worse.	50%	5%
We should change economic incentives to encourage less carbon emissions. By the IPCC’s own analyses, if we were to implement Kyoto, it would delay the warming in 2100 to 2106. So let’s just forget that, except possibly as a small incremental step. I have seen the argument that investing in the lower carbon alternatives is smart economically. Well, I have a lot of faith in the greed of my fellow citizens. If it were a good investment it would be happening without massive government incentives. You understand opportunity cost, so even if green tech were not the worst investment that could be made, it would slow overall growth of the economy. As has already been discussed, we will need the economic growth to help us adapt to whatever the world throws at us. Furthermore, think of all the bad stuff happening in the world today. Non-potable water in the developing world, starvation, torture, slaughter, and mutilation in Africa. In a world with limited resources to spend, how many people are you willing to let die, in order to delay global warming by 6 years in 2100? Should spending to lower CO2 be a priority? At best	5%	0.25%

Finally, let’s briefly address the precautionary principle. The idea is if there is even a small chance that something bad or unacceptable will come to pass, we should do something to protect ourselves. This is always dependent on four things: consequences of doing nothing, likelihood that doing nothing will result in the consequences, cost of the intervention, and improvement after the intervention.

Consequences are questionable, but there is some possibility that the consequences of doing nothing will be large. The likelihood that consequences will be catastrophic are vanishingly small. There is no consensus on catastrophe, only imagination.

Cost [of prevention] can run into the billions or trillions including the opportunity costs. And there is no guarantee that it will improve anything. It might not even improve anything, if we reduce CO2 and the climate change is due to other factors.

So I am not dismissing the possibility that carbon dioxide emissions are having an impact on global warming or climate. They probably are. I do not believe the whole tipping point thing, and the fearmongers who claim that the world’s climate is about to go off the rails are thoroughly unconvincing. Everything in between is in the realm of needing more data before taking drastic action.

All in all, the information in my opinion is not reliable enough to commit huge amounts of money into a social policy that may have no net effect.

I wrote a much longer analysis on my blog some time ago. Here’s the link if you’re interested. http://kenckar.blogspot.com/2009/12/anthropogenic-global-warming.html

Regards,
Tony Kenck

So do I think the number is right? No. But the point of all the above is that a lot of things have to work, even at moderate odds of occurrence.

Coming into the light

2011-06-12T21:44:00.000-07:00

Some of you know that I have a second blog. It's in the links on this page and is called Emotions for Engineers.

I have not made my identity in that blog public, but decided to for a variety of reasons.

Go take a look.

That is all.

Empty Nesting

2011-02-17T07:36:00.000-08:00

We have put our San Ramon home for sale. The kids are out of he house (but still on the payroll). We decided that 2776 square feet of house and 10,000 square feet of yard with a pool is just a bit more than we want to deal with.

So we're moving to Oakland. We'll be near Kathleen's work, I'll have a reverse commute, we'll be close to the city, have no yard, and only 1700 square feet to take care of. IT feels good.

Here's our house for sale at 51 Sage Circle in San Ramon.

Our new place is at Pacific Cannery Lofts.

Next stage of life.

It's exciting.

Annoyed at the Press Over Macondo (and Ecuador)

2010-07-31T22:48:00.001-07:00

Disclaimer: I have worked in the oil industry 30 years. I started with Western Geophysical, moved to Texaco, and now work for Chevron. I have no specific knowledge of BP, the Macondo well, or Ecuador. The views expressed on this blog are my own personal views and do not necessarily represent those of my employer.

I am not defending BP. It looks like here were several errors in human judgment leading up to the blowout. These errors were probably caused by people who did not understand their fields well enough to really understand the riskiness of what they were doing, and whose judgment was tainted by pressures to cut costs. BP seems to have had a really defective culture (See Bob Lewis' column on cost cutting and risk) (see also this article from Fortune magazine) during the regime of Lord Browne (who racked up record numbers by taking greater and greater risks). Tony Hayward was apparently in the process of turning that around. Sadly, he was not able to turn it around fast enough.

And good god, I'm not defending Hayward either. His picture will go in my illiustrated dictionary under "ham-handed."

I am bothered by some of the misinformation coming out of the media however. The claims that the oil industry does not care about the environment and does little to protect it are really grating, because it is far from reality. Here is an interesting view of how Shell's well design differs from BP's.

It is easy and facile to look at a single incident, or even a string of incident over time and draw generalizations. Look at Ixtoc, Valdez, Macondo, Ecuador (don't even get me started on Ecuador, the press coverage has been tremendously one-sided, and really, the government of Ecuador is the bad guy in that one. Just take a few minutes to read Chevron's perspective on Ecuador.) But look at the overall record. Look at the amount of oil produced every day. The organizational capability represented in the real record is unprecedented.

And by the way, most oil companies have long-term incentive plans based on stock or stock options. A single BP-like incident would wipe out much of the personal wealth of those on the plan. Macondo, like Valdez, will be a touch point for a generation of petroleum engineers--"we don't want another Macondo..."

The oil industry, especially over the last 10 to 15 years has placed tremendous emphasis on safety and the environment. I'm sure the the Exxon Valdez was one of the main drivers of that. From what I have seen though the emphasis has been much more on prevention than remediation. Safety is a constant watchword and is drilled into people's heads, even in office environments. (Every bathroom in Chevron's corporate HQ has reminders to wash your hands after using the facilities, and you should have seen these guys changing a light bulb in one of our conference rooms--orange cones, the whole works). Field operations are even stricter.

Again, this accident was preventable. It is apparent that BP had some weaknesses in the Macondo completion design. But put that aside for a minute. If you do something enough times, even though you think you have all the angles covered, even if your judgment is not tainted, eventually, something will happen that is completely unexpected. You get hit with a black swan. When dealing with forces of nature, things go bad really fast. It can happen to anyone.

Society's Response
This BP thing is really similar to what happened with steroids in baseball. We all enjoyed watching these superhuman people hitting homer after homer, after seeing them put on 40 lbs in the off-season. We went to the park and cheered, and pretended that it was the vitamins and weightlifting. Then we were shocked, shocked that it was "the cream" and "the clear."

We see the same thing today with the Macondo well. For years, regulators and nature have been pushing oil companies further offshore into ever more technically challenging environments. The industry has drilled 14,000 wells in deep water without a serious blowout like Macondo. We (society) pretended that there was no risk of pollution (out of sight, out of mind), while we wallowed in more abundant domestic energy than would have been available otherwise. Now we're shocked that the statistics have caught up with us.

The other thing that's happening is the attention a single disaster gets vs the day to day problems going on. We have all seen it. 9/11 was a horrific event--3000+ people died in one fell swoop. It mobilized our nation into two wars, plus huge changes on the home front. Likewise, a single plane crash, killing 300 people causes great angst, concern, and regulatory changes. Yet every year, 15,000 people die in alcohol-related traffic accidents, 40,000 total traffic fatalities. We are taking measures to cut it down, but look at the death toll. Why aren't we spending a trillion dollars or two to cut down on those deaths?

I'm not looking for sympathy for me or for BP. The oil industry has done well over the last 15 years. But with a few exceptions, and those exceptions are generally due to individual people not company policy, it has done well by improving safety and taking great measures to care for the environment.

Ecuador Notes:The following is from a response to a post in NY Times. I believe this response is much more accurate and representative than the original post.

berrymonster
Orlando, Fl
June 5th, 2010
10:40 am

I am an Ecuadorian citizen who has worked extensively on health and education projects in the Amazon rainforest, precisely around those oil fields mentioned by Mr Herbert.

Mr Herbert is grossly missinformed. Let me explain.

Yes, the Ecuadorian Amazon has been polluted by oil for decades. But the bulk of that pollution doesn't belong to Texaco but to the Ecuadorian government. Everything began in the late 1960s, when Texaco began drilling in the Ecuadorian Amazon, and reached a tipping point in 1972, when Texaco found oil and began exporting it. Sensing unprecendented amounts of money in the oil business, Gen. Guillermo Rodríguez Lara, the Commander of the Armed Forces, launched a coup against the civilian president and took power. Immediately, he created CEPE -Ecuadorian State-run Oil Company. But CEPE was just a paper company with zero technical, financial, or commercial capabilities. So, Gen. Rodríguez Lara took over Texaco. From 1972 through 1992, Texaco worked for CEPE: two thirds of oil revenues went to CEPE, one third went to Texaco.

"CEPE never cared about the people. The environment was not even a concept. The only important thing was that Ecuador was living an oil boom. Moreover, the Ecuadorian government -a series of military dictatorships- actively promoted massive deforestation and settlement in the Amazon jungle. Any citizen willing to cut the trees and grow coffee or bananas was given a 125-acre piece of jungle. Roads and bridges were built. Hundreds of thousands of people flocked to the region. Yes, Texaco dumped toxic materials in the jungle during those years... always under CEPE's watch. The military left power in 1979, but democratically-elected governments have kept the same policies in place ever since.

"In 1992, the CEPE-Texaco consortium expired. Texaco left the country. Suddenly, the government of Ecuador had to take over Texaco's operations. CEPE's name was changed to Petroecuador. Without Texaco, Ecuador's oil industry began a slow, steady decline. The government, now the proud owner of 100 percent of the national oil industry, spent every dollar of revenue, and deprived the industry of necessary money for maintenance and investment. Aging oil fields, tanks, pipelines, soon began to decay. Spills became commonplace.

"The 1990s was a period of environmental awareness. As oil spills increased, so did expenses in remediation, and of course, litigation. People began to view oil companies as a reliable source of income. Pipelines were routinely sabotaged by local people who immediately sued for compensation.

"It's in this context that some American environmental lawyers convinced some Ecuadorian local groups to sue Texaco. The plaintiffs want Texaco to pay those groups some $30 billion in compensation for health and environmental damages.

"How did they reached the $30 billion figure? It's impossible know how many cases of cancer have occurred in the region: the Ecuadorian health care system doesn't even have accurate birth records, not to mention cancer diagnoses. It's impossible to know whether cancer cases are due to oil pollution or the huge amounts of chemicals employed in the deforestation-settlement program. So, the plaintiffs used an original formula: they estimated the number of birds, rodents, fish, and other animals killed in the region over the past four decades -no matter if that happened by oil spills, deforestation, or road construction- and multiplied it by the black-market price of each species. (This is no joke)

"The number of supposedly affected individuals doesn't exceed 1,000. If they win, they could get about $30 million each. Half that money would go to those American environmental lawyers who had the idea of the lawsuit in the first place. Isn't it great?"

Ecuador's story is one of unbridled development, without any care or goverment oversight of living conditions or sanitation (outside of the oil company camps). People who were actually indigenous to the region had their lives overturned. Even if there had never been one drop of oil produced, disease would have increased. In virtually every place in the world where traditional diets have been displaced by western diets, disease has increased. The Ecuadorian government took most of the profits and had majority control of the operation. CEPE/PetroEcuador is the bad guy in this scenario, not Chevron/Texaco.

Anthropogenic Global Warming

2009-12-31T11:02:00.000-08:00

I will call people who believe in anthropogenic global warming (AGW), warmists, those who are less certain, denialists. I hope it insults both sides equally.

My BS degree is in earth science. I work for an oil company. I believe in the scientific method. I believe that government has a legitimate role to play in society. I am not a Neanderthal.

I have biases. Some may think that because I work for an oil company, I desperately want to see the warmists fail. Look, I'm too close to retirement for anything that happens now to have an effect on my personal earnings or career, so I don't think that comes into play. And by the way, I live on this planet. If humans are doing something to damage the planet, I want it to stop. I want us to take action to fix and reverse the harm. I may be retiring within fifteen years, but I hope to live a lot longer than that, and I want my kids to inherit a good place.

I have read a lot about the science, politics, and economics of the CO2/global warming issue and am not convinced that spending trillions of dollars to reduce human CO2 output will be money well spent. The science is unconvincing, the economics are dubious, and the political hysteria is ridiculous.

Tom Friedman and Paul Krugman (both of whom I generally respect) wrote broad-brush, ad hominem, idiotic columns about my ilk, and think I'm angry and/or ignorant. They think this because they think that anyone who is not on the AGW bandwagon is misinformed, ignorant, or simply opposed to progressive causes based on ideology.

Stewart Brand considers there to be four categories of opinions on the subject of AGW: Catastrophists (actually Calamatists from the link), Warners, Skeptics, and Denialists. Here's how I think of them. Catastrophists and Denialists see the worlds as black and white. Catastrophists believe that Global Warming is happening and it's going to be really bad. Denialists tend to the opposite corner. Warners on balance believe that the evidence overall supports that human carbon dioxide emissions are the major cause of warming, and that overall it is likely to have bad effects. Warners tend to favor the precautionary principle. If there is a chance, no matter how small, of total catastrophe, we should protect from it. Finally, skeptics tend to believe that the case that human carbon dioxide emissions are a major cause of warming (if any) is far from proven, and that even if it warms, the damage is highly unlikely to be catastrophic.

Has The Earth Warmed?
From the data I have seen, I do not have high certainty that the earth has warmed substantially over the last 100 or so years. On balance, I think it has, but I can't say how much.
Why: pro: the earth hit a climate low about 150 years ago, temperatures may have been rising since then. Why not: However, there are inconsistencies in the data, and the graphs that are shown to the general public contain corrections, which in some cases are greater than the anomaly that they are showing. As an example, there are temperature time-series that uncorrected show an actual decline in temperature of 0.2 deg C. Then adjustments are applied and they show an increase of 0.6 deg C. This is a swing of 0.8 and converts the trend from negative to positive. There may be good reason to apply corrections, but when corrections are as large as the anomaly, you have to wonder.

Temperature stations have been documented as being of poor quality. The error in the temperature stations exceeds the amount of warming being hypothesized by the climate scientists.

There are inconsistencies between temperature station measurements and proxies. In fact, this is the source of the "hide the decline" issue in the recent climategate controversy. The proxy (tree ring thickness and density) indicated cooling (the decline), while thermometers showed warming. This kind of inconsistency casts a shadow of doubt on using he proxies as a reliable proxy for temperature.

While we're on ClimateGate...
Warmists are minimizing the ClimateGate scandal, denialists are jumping for joy. Again, I don't know what the answer is on many of the issues, and whether "tricks" is about obscuring data. What I do know is that a small group of influential people in the warmist community used their influence to stifle dissenting voices, deliberately withheld data from people with different opinions from theirs, and destroyed correspondence.

This may or may not be illegal, but I know it is unethical and scientifically indefensible. Science is about inquiry and honest debate. Opening data sets and models to scrutiny can only improve the outcome. If they are right about their science and statistics, they have nothing to fear. If they are wrong, they need to be corrected before significant commitments are made based on the faulty analysis.

By declaring the science to be settled and refusing to engage with the opposition, the warmists are showing either hubris or fear. Either way, my trust in their thought processes and work plummets. A much stronger video view is provided here by Lord Christopher Monckton.

This just smells rotten. It would just by a minor blip in scientific lore if the stakes involved weren't so high. But they are.

ClimateGate 2 - Hide the Decline

The graph shows the issue of the infamous "hide the decline comments from ClimateGate. Here is a thorough analysis of the issue by Steve McIntyre. In essence, when the lead researchers noted that the tree ring data (red line) diverged from the "consensus view" of warming, they truncated the data series (green line), then effectively hid it by plotting it with other time series (spaghetti bowl effect).

This link takes you to a website that has a tremendous 30 year timeline of AGW and the players involved in ClimateGate. It's worth a look.

Consensus View
What is the consensus view anyway? Here's what I think is the consensus. Carbon Dioxide in the atmosphere has a net warming effect on the climate of the earth without considering any of the feedback mechanisms. An increase of CO2 will cause additional warming of the atmosphere, all else being equal. The IPCC document sets forth a scenario in which there is a gradual warming over the next century of between 1.1 and 6 deg C and sea level rising between 18 cm (7 in) and 1.6 meters), depending on the selected scenario.

The warmists proclaim that there is no further argument, the debate is over, there is consensus on the science. The mere existence of denialists and skeptics puts the lie to this statement. I have seen warmists make the claim that denialists are the equivalent of flat-earthers. This is wrong in a number of ways. First, insulting people and trying to discredit them by name calling is a defense of the fearful. Second, direct observation and measurement of the earth has has completely disproven any idea that the earth is flat. There is no interpretation involved. It is fact. It is direct observation. Climate change is much more subtle than that. The changes in temperature tend to be small, and very gradual, occurring over generations. That by itself implies techniques beyond simple observation. But once you get past simple observation clearly pointing the way, you go into the interpretational realm. For example, most temperature stations have adjustments on them, but adjusting the data adds a layer of interpretation and uncertainty to the data.

Scientific Method
Scientific research cannot prove that CO2 causes warming. The way it works (or should) is that a researcher puts forth a hypothesis and then tries to disprove it through tests and observations. The AGW null hypothesis seems to be something like "increase in CO2 in the atmosphere has not been the major causal factor of warming since 1950." Through 1999, if you believe the temperature readings, planetary outcomes have been inconsistent with the null hypothesis. However, in the 10 years since, the planet has actually been cooling or flat temperature., which is consistent with the null.

It does not mean that the AGW hypothesis is disproved entirely, just that there may be some other factor that the scientists are not accounting for. It proves that something besides CO2 has a significant impact on global temperature. So it weakens the hypothesis.

Precautionary Principle
The precautionary principle is the idea that if there is any chance of catastrophic outcomes, we should insure against it. In the case of AGW, the argument goes something like, "The climate models show that there is a reasonable chance of planetary ecological destruction caused by warming, which is caused by CO2. Even though there is a possibility that this will not come to pass, we should make great efforts to reduce CO2."

It sounds reasonable, but it comes down to your Choice of Catastrophes. There is also a chance that an asteroid will slam into the earth and obliterate all life forms larger than a mouse. Shouldn't we be doing something about that? Dick Cheney's 1% doctrine as documented here by Tom Friedman is also a form of the precautionary principle. There are infinite possible catastrophes, and a wide range of responses. How certain do we have to be of the catastrophe, and how much should we spend to avert it are really the issues. I have not seen real evidence that any of the proposed actions to cut carbon would act to avert the catastrophic scenario.

The following has been attributed to Mike Hulme, Director of Tyndall Climate Research Centre.
"...to reduce emissions requires more evidence than that humans are altering climate. We need to know something about the potential risks associated with future climate change, whether these risks can be minimised through adaptive action and then have some socially negotiated basis for deciding about the necessity and extent of desirable emissions reductions. On none of these issues do we have a good basis to work from. The precautionary principle, if chosen, would imply start reducing emissions now – but I am not convinced a blind application of the precautionary principle in this case is the most appropriate instrument."

No Harm If We're Wrong and Cut Carbon Emissions
In a recent New York Times opinion piece, Thomas Friedman asserted that even if we're wrong, by reducing our carbon footprint the world will be a better place. I agree with that, but only under certain conditions.

Think about this happy scenario. You win $10,000 in the lottery. So you take the money and hide it under your mattress. Your friends tell you, "But you should put it in the bank. You only earn a taxable 1% on it, but you're better off with that $70 after tax per year than without it." So far, so good.

But you also have $10,000 in credit card debt at 20% non tax-deductible interest. so you would be even much better off paying off your credit card debt than putting the money in the bank. This alternative use of money is a really important concept in economics and can't be ignored. It is your opportunity cost.

In the case of AGW, are the expenditures required to cut CO2 emissions the best place to spend the money and political energy? According to the Copenhagen Consensus studies, there are much better returns available. So like the man who wins the lottery, we would be better off by doing something than doing nothing. However, the real options are doing something about CO2 or doing something better.

What About Clear and Present Dangers? Is that the "simple" path?
I have heard it argued that focusing on the current problems, e.g. malaria, potable water, etc. is an easier path than to focus on global warming, with the implication that AGW is harder, but better.

I'll turn that around and ask how many people we are willing to kill in order to protect us from some computer-modelled, unproven, hypothetical threat from CO2? Focus on CO2 may be a more difficult path, but the measure of better is highly subjective.

Cause and Effect
One of the denialist arguments is that CO2 actually follows warming, rather than the opposite. This is supported by data from ice cores. The warmists agree that, in fact, the CO2 levels lagged warming in the past. Their argument though is that sometime early in the 20th century that relationship changed. CO2 became the driving force, rather than an effect. I don't know enough about climate science to have a strong point of view on the likelihood of this kind of change in the relationship of these two variables.

However, it sets off my BS meter. I am sure this kind of thing happens in physical systems, and maybe even this one. But it just seems too facile. It seems like someone is distorting their model to fit their preconceived notions. Perhaps I could be convinced if I saw some data, but I'm not there.

Catastrophe Alert
The urgency and the worst case scenarios in the warmist message are troubling to me as well. You have ministers of the Seychelles "meeting" in scuba gear underwater to dramatize their situation. High ranking officials stating that if we don't do something now, we're doomed. People holding up the millions living in Bangladesh as people who will be flooded out of their homes.

I say we need to get a grip. There are three kinds of people putting out this rhetoric: those who simply believe all the scare stories and haven't really thought it through, people with an agenda, and people who have really given it a lot of thought but whose explanations have not yet reached me.

To the best of my knowledge, nobody is really forecasting a fast, catastrophic sea-level rise. Sure, if the sea level were to rise 2 meters over the next century, many people would have to adapt. But it's not like they would drown in their sleep one night as the sea engulfed their homes.

If sea level increases appreciably, low lying poor areas will, over time, become uninhabitable swamps and wetlands, and the people will move to higher ground. Low lying rich areas, where people have something they want to and can protect will build levees and install pumps to prevent encroachment. People and institutions will adapt to the gradually changing circumstances.

On top of that, they have been saying for years that if we don't act now (pick your consequence). So far, we haven't seen those consequences. Each time they say that the sky is falling (and then it doesn't), they erode their credibility.

But there's another aspect to the false urgency. If we spend large amounts of money to abate CO2, that leaves less money for actual wealth generation. This means that if the earth warms anyway, e.g. if the warming is from other causes, such as changes in the sun's energy, we would be left with fewer resources to then deal with adapting. Focusing on CO2 as the means of preventing global warming carries risk with it. Following through with the Kyoto standards would have delayed earth's full warming by six years 100 years from now (from 2100 to 2106). The cost would be large, and let's face it, it doesn't prevent anything. More consideration should be given to adapting.

The Great Reframe: Global Warming vs Climate Change
One of the disturbing trends is for the warmists to jump on the idea of well it might not be warming much, but CO2 is changing the climate patterns. It's causing drought and storms in unusual places. I won't argue about whether climate is changing. It does all the time and has throughout the history of the world.

Those changes come from natural and external forces, sometimes from man as well. The Sahara desert used to be fertile cropland. The top of Mt. Everest is a marine limestone. What was once the Garden of Eden is now a desert.

When climate changes, people adapt. Sometimes they fight nature for a time, sometimes they simply move on. It is the story of mankind. However, the link between CO2 and climate change is even weaker than the link with warming. Are humans changing the ecology of the planet? Yes. But we are doing it through more direct effects than CO2 which leads to warming and/or climate change. Deforestation, overfishing, and toxic pollutants are much more direct and proximal things we are doing to the planet.

Today's Temperature in Context
This is an amazing contextual display of temperature over the years.

It puts our situation into an interesting perspective. You should come away from that page with a renewed understanding of just how much natural variation there is in the system.

Higher Level Context
I believe in science and the scientific method. When when people start demonizing those who do not agree with or who question the science, we are not doing science anymore. It's sales, politics, and personal motives coming into the scene. Yet it is being sold as science.

If the warmists turn out to be wrong, science gets a black eye. The very basis for looking at the world in evidence-based rational terms is undermined by the hyperbole. So in declaring the science as certain and settled, they are positioning science to be the fall guy in this. The scientists behind this are being used as dupes by people with an agenda. Someone like Al Gore, can and will fall back on "I was just doing what the scientists said." I have a real problem with this.

At the same time, there are problems and issues that science and policy can help with. Overfishing the planet's oceans, mercury in water, malaria, potable water, current flooding in low-lying areas, brutal human rights abuses in Africa. These are all things in the here and now, that call for solutions. How many people will die this year from malaria? How many will be tortured, raped or disfigured in Africa? Will there be enough food to feed people high quality nutrients?

Worrying about something that "might" happen gradually over the next 100 years ignores the here and now. Casting AGW in the light of "certain" science may reduce the ability of science to identify and solve other problems.

What About Al Gore
I think Mr. Gore is a sincere well-meaning individual. I think he truly believes that he is doing the right thing. I am also quite concerned that he is so locked into his position on AGW, that no amount of evidence contrary to his position could possibly move him due to his cognitive dissonance (see Mistakes Were Made (But Not by Me): Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts).

He has long been a proponent of the AGW hypothesis. He has written two books about the environment and won a Nobel Prize for his efforts. I really don't follow him closely, but I am disturbed by some of his behaviors. In 2009, he went before a congressional committee inquiring about global warming. I don't know the purpose of the inquiry. The representative from Tennessee, asked him about his interest in Kleiner Perkins, a San Francisco Bay Area venture capital firm with interests in carbon technologies. He tried to sidestep the fact that he in fact now has an economic interest in the furthering of the AGW hypothesis.

Again, I think he is well-meaning, and I think he has good motives. However, denying that he may have a bias is not a realistic position. At the start of his quest his bias was small. He now has a vested interest in the policy decisions that stem from the AGW hypothesis. He really should bow out of the politics at this point.

He also refused to debate Bjorn Lomborg. Lomborg has written several books including "The Skeptical Environmentalist" and "Cool It." He is also leader of the Copenhagen Consensus, which has tried to look at some of the alternatives to fixing global warming (more about that later). Lomborg's position is that he accepts the official view of the science of global warming. He takes the IPCC reports as a given. The question then is what to do about it.

Lomborg challenged Mr. Gore to a debate. From the Wall Street Journal.
“Mr. Gore stuck to his prepared script about the urgency of taking action to curb global greenhouse-gas emissions, down to well-worn phrases he trots out at conferences across the country: America is at “a political tipping point” on climate change, and even if Washington has failed to address the energy challenge in the last 35 years, “political will is a renewable resource.”
“But he was challenged by Mr. Lomborg, the Danish skeptical environmentalist who thinks the world would be better off spending more money on health and education issues than curbing carbon emissions.
“I don’t mean to corner you, or maybe I do mean to corner you, but would you be willing to have a debate with me on that point?” asked the polo-shirt wearing Dane.
“I want to be polite to you,” Mr. Gore responded. But, no. “The scientific community has gone through this chapter and verse. We have long since passed the time when we should pretend this is a ‘on the one hand, on the other hand’ issue,” he said. “It’s not a matter of theory or conjecture, for goodness sake,” he added."

Lomborg has no interest in debating the science. His interest is in policy. Gore knows this, yet he refused to debate him because the "science is settled." He sidestepped the real issue, which is about our response to global warming. Mr. Gore is wrong; our response is not settled science. In fact, it's not science at all.

Good Bye and Thanks for All The Models
Bjorn Lomborg. The warmists seem hate this guy. He is charismatic and smart and has an intelligent, rational approach to understanding the best response to global warming. So why do they despise him so?

I think there are a few reasons. First, he agrees with them. He doesn't dispute the science. He says in essence, "Thank you for your excellent work scientists. You have given us a superb basis for making decisions. Now go back to your computer models and let the policy professionals determine the best response." They must hate being minimized like that.

But this is how it really should be. The climate scientists are very deep specialists. They know about heat transfer, currents, cloud formation, thermometer technology--not economic stability, legislative reform, and national and international governance.

So is Lomborg right in his policy recommendations? No, probably not. What he is right about though is an approach to considering our response. Like the lottery winner, we may have better things to do with our efforts. That is the discussion that needs to happen and will not as long as those in the driver's seat (for now the warmists) refuse to debate and engage with the denialists.

Krugman vs. Lomborg debate.

Forget The Science Arguments, How About a Solution?
So I really don't know the answer to this whole global warming or climate change thing. The thing is I don't need to. If these negotiators can come up with a way to make any taxation or caps contingent on actual global warming, it averts the whole argument about what might happen in the future. Simply set the tax very low now, then set up a system such that if the climate heats up, taxes are increased somehow in proportion to the change in temperature. It averts this whole discussion about who is right and simply lets time and actual climate outcomes determine the degree of economic burden that will be imposed. Such a format was suggested in John Tierney's column in the New York Times and discussed further on his blog. This approach will not please the hardest core catastrophists who believe that we are at a tipping point for runaway heating, but may be a path to an ultimate agreement that all sides can live with.

The Causal Chain for CO2 Abatement to Work

A view of the causal chain that must work for CO2 abatement efforts to have a positive effect.

from Monckton: Climate Sensitivity Reconsidered (AGW viability)

"Even if temperature had risen above natural variability, the recent solar Grand Maximum may have been chiefly responsible.
"Even if the sun were not chiefly to blame for the past half-century’s warming, the IPCC has not demonstrated that, since CO2 occupies only one-ten-thousandth part more of the atmosphere that it did in 1750, it has contributed more than a small fraction of the warming.
"Even if carbon dioxide were chiefly responsible for the warming that ceased in 1998 and may not resume until 2015, the distinctive, projected fingerprint of anthropogenic “greenhouse-gas” warming is entirely absent from the observed record.
"Even if the fingerprint were present, computer models are long proven to be inherently incapable of providing projections of the future state of the climate that are sound enough for policymaking.
"Even if per impossible the models could ever become reliable, the present paper demonstrates that it is not at all likely that the world will warm as much as the IPCC imagines.
"Even if the world were to warm that much, the overwhelming majority of the scientific, peer-reviewed literature does not predict that catastrophe would ensue.
"Even if catastrophe might ensue, even the most drastic proposals to mitigate future climate change by reducing emissions of carbon dioxide would make very little difference to the climate.
"Even if mitigation were likely to be effective, it would do more harm than good: already millions face starvation as the dash for biofuels takes agricultural land out of essential food production: a warning that taking precautions, “just in case”, can do untold harm unless there is a sound, scientific basis for them.
"Finally, even if mitigation might do more good than harm, adaptation as (and if) necessary would be far more cost-effective and less likely to be harmful.

"In short, we must get the science right, or we shall get the policy wrong..."

The probability that CO2 abatement is an effective response is vanishingly small.

Summary
I believe that human emitted CO2 has had some effect on temperature and climate. It will continue to do so. I believe that the predictive models are not accurate--there are simply too many variables and unknowns. I believe that nobody has an accurate assessment of the net impact of increased CO2. The hype and catastrophism of some of the warmists, including leading politicians is troubling. The ClimateGate writings reveal bad science, poor ethics, and probable data fudging in action.

Always remember the law of scientific equilibrium:
If it is settled, it is not science.
If it is science, it is not settled.

Further Reading
http://wattsupwiththat.com/2009/12/10/climategate-reaches-the-british-house-of-lords/
http://www.timeshighereducation.co.uk/story.asp?sectioncode=26&storycode=409454&c=2
A powerful blog from a person who was a believer with lots of explanations and diagrams.

Obama Health Care Plan Summarized

2009-09-13T23:42:00.000-07:00

Obama Health Care Plan Summarized by Andrew Tobias

If You Have Health Insurance,
the President’s Plan:

Prevents insurance companies from dropping you when you get sick.

Caps out-of-pocket expenses so you don’t go broke when you do get sick.

Eliminates charges for preventive care like mammograms, flu shots and diabetes tests.

Eliminates the “donut-hole” gap in coverage for prescription drugs.

If You Don’t Have Insurance,
the President's Plan:

Makes it available even if you have a pre-existing condition.

Creates a new insurance marketplace – the Exchange – so you can compare plans and buy insurance at “group rates.”

Helps low-income citizens pay for it.

Offers new, low-cost coverage through a national “high risk” pool to protect people with preexisting conditions from financial ruin until the new Exchange is created.

For All Americans,
the President’s Plan:

Won’t add a dime to the deficit and is paid for upfront.

Requires additional cuts if savings are not realized.

Implements a number of delivery system reforms that begin to rein in health care costs and align incentives for hospitals, physicians, and others to improve quality.

Creates an independent commission of doctors and medical experts to identify waste, fraud and abuse in the health care system.

Orders immediate medical malpractice reform projects that could help doctors focus on putting their patients first, not on practicing defensive medicine.

Requires large employers to cover their employees and individuals who can afford it to buy insurance so everyone shares in the responsibility of reform.

Health Care Visually

2009-08-18T09:18:00.000-07:00

Here is a visual version of the health care reform as a flowchart.

Good finally some clarity on at least the mechanics of the darn thing.

Click on the chart to go to the original post.

Insurance - Health and Other

2009-08-13T20:47:00.000-07:00

There is an unspoken undercurrent in the health care debate and it really bothers me.

"If someone is poor or simply unhealthy due to misfortune they should die."

That is the core of the arguments against health care reform in the US. Oh sure, the arguments look like anti-communism or anti-socialism, but at their base this is that argument.

I don't want to argue about whether that value is "right." It's really a case of individual choice and what each person thinks is right. I do think however that that is where the discussion should be--about real values.

The entire purpose of insurance is to "spread risk." People take on a certain, small expense in order to avoid an uncertain, but potentially much greater expense. In the health care system in the United States, if you happen to work for a large company that has a fair amount of clout, you get health care. It may not be cheap, and it may not cover everything, but you will be protected from the big stuff. They won't drop you or deny you coverage.

If you chose the wrong parents, or simply were unlucky in life, you may not be able to get coverage, and even if you do, you may be dropped on a technicality. Yes you do have legal recourse maybe, but it doesn't do you much good if you are already dead.

I don't want to pain insurance companies as "bad guys." They are simply agents trying to maximize profits. They are doing the right thing for their owners the shareholders, but...

Is that where we want to be? Do we say to someone that they can die simply because of an accident of their birth. In all likelihood, many of the people would get some coverage in any case. Hospitals do take on some charity cases. Government does cover some people who are not otherwise covered. So we do pay for this. The real questions are, "what are our values as a nation?" and "how do we best represent those values at the lowest cost?"

So here are some of the questions you have to consider:
1. People who leave their jobs, voluntarily or not, run the risk of not being able to get medical coverage due to pre-existing conditions. Some of these people will die because of that. Is this what we want? What if it were your mother or sister?

2. Your insurance company has the power to simply refuse to pay for your medical treatment. Sure they must have "grounds" to refuse, but we have all heard stories of really shaky grounds. If you have been paying for insurance, should insurance companies have a right to refuse payment for treatment or to discontinue your insurance during the course of treatment. The "conservative" argument is that you have the right to challenge that in court, or that companies that engage in that behavior will lose business. People have died and will continue to die because of that treatment. Is that where we want to be? What if it were your father or brother?

3. Many of these people end up getting care anyway. Paid for by hospitals, reduced fees from doctors, government agencies. Hospital and doctor fees get adjusted upwards, taxes increase. you didn't think that 2 aspirin in he hospital really cost $120 did you? We all pay in some way through increased fees. We are currently simply in denial about this aspect.

4. Insurance companies exist to take in more money than they pay out. They have shareholders to please. A significant portion of their money pays for marketing, administration, and dividends. Would it be acceptable to say, increase administration costs, and at the same time remove the marketing and dividend cost? More of the money we pay would go directly to coverage.

5. Do you think the free market is really working here with the health insurance companies, or have they been able to erect high barriers to competition? In a perfect world, the competition would drive companies to lower fees, reduce administrative costs, and be customer-centric in its payouts. We are far from that perfect world. Health isnurance either needs to be brought into a more competitive realm with better protections for sick people, heavily regulated in cases where competion cannot be established, or eliminated by going to a single-payer option.

6. I have seen a number something like 46 million people are not covered today. One argument is that many of those people choose not to be covered. Who are those people? Healthy young people who have never been sick. What happens as they age and do get sick, or get in that car accident? Is it ok for ambulance companies and hospitals to just turn them away? What if someone has insurance, but cannot in that moment be identified? Is it ok to take the tough luck approach on them? I hope that when the crunch comes it's not any of my kids.

7. There is a fundamental conflict of interest with insurance companies between providing health care and making money. I believe that most people in the health care industry have a conscience and are reasonable. "Most" is not enough. Is it ok that rewards for people in the health insurance industry are misaligned with your goal in purchasing health insurance.

Remember. The tragedies are individual and personal. Half of all personal bankruptcies are at least partly the result of medical expenses. The typical elderly couple may have to save nearly $300,000 to pay for health costs not covered by Medicare alone.

If you are lucky enough so far to have picked the right parents or career or company, good for you. but remember, luck changes. Your spouse, parents, and children may not be so lucky. Is that the world you want to leave?

Learn about what health care reform really means. Do not trust the talking heads on CNN or Fox. Think about the tragedies in the context of what could be or could have been. Have some humility. Put the tragedies in the context of "There but for the grace of god..."

Read about the insurance industry. Andrew Tobias wrote an excellent book about insurance.
Invisible Bankers: Everything the Insurance Industry Never Wanted You To Know

Whereever your personal values lie, bring the discussion to the meaning and implications of your position. Big sweeping generalizations about the American way do not capture the personal nature of this issue.

Addendum
Nicolas Kristof editorial about "Health Care That Works"
David Brooks editorial "Let's Get Fundamental"

Sad story about a 32 year old who could not get health care

Skidmarks Disease in the Town of Allopath

2009-07-11T09:39:00.001-07:00

Correlation is not causation

Order Things From Amazon

2009-07-07T21:31:00.000-07:00

Assassin's Apprentice (The Farseer Trilogy, Book 1)

The Battle of the Diets: Is Anyone Winning (At Losing?)

2009-06-15T00:54:00.001-07:00

Really interesting video about a Stanford study comparing Atkins to other diets. People in the study did their best to follow the diet.

January 17, 2008 presentation by Christopher Gardner for the Stanford School of Medicine Medcast lecture series.

Atkins wins, not just on weight loss, but a series of other measures as well.

Also, insulin resistant people do better on low-carb diets. Lots of people in the US are insulin resistant...

He still uses the paradigm that stomach fullness is the driver of hunger. I think he's off on that. I think it can cause near-term changes, but your body's cells need fuel.

Settlers of Catan

2009-04-11T13:14:00.000-07:00

Settlers of Catan is the hot new boardgame. I read about it in Wired magazine (here) and it's time to buy.

Mini Cooper on a Ski Jump

2008-12-22T20:35:00.000-08:00

Me taking Mini Cooper off a ski jump.

Pre-read for Portfolio and Monte Carlo Lecture

2008-12-16T10:38:00.000-08:00

Dear Saint Mary's Professional MBA students,

I am looking forward to meeting you in class. Here is a brief description of my background.

I am Manager of Portfolio and Planning for Chevron Corporate Business Development. I have a BSc in Geophysical Engineering from Colorado School of Mines. I did exploration work for many years, but found myself attracted to the business side. I received an MBA from the University of St. Thomas in 1999, effectively completing a long gradual shift from the technical to the commercial and financial side of the business.

In the late 1990s, I built the cash flow model that we used in our new country entry into Brazil. I transferred to San Ramon in 2001, and since then, have been an advocate of portfolio methods and improved planning and decision methods at Chevron. My current position is responsible for ensuring that asset and corporate acquisitions will be a good fit with our corporate strategies.

Overview

Monte Carlo and Portfolio Management are important analytical fields in corporations. Monte Carlo deals with developing an understanding of uncertain outcomes of decisions. This can help companies better understand its risks and take steps to mitigate those risks.

Portfolio management focuses more on arriving at the decisions required to achieve targets, mitigate constraints, and manage performance. Portfolio is a tye of optimization that balances multiple competing objectives.

If the firm has incorporated risk and uncertaitny into its thinking around performance, Monte Carlo and portfolio techniques can be combined using Stochastic Optimization.

Please read the following articles before class:
Monte Carlo
General Monte Carlo Simulation
Crystal Ball Tool for Monte Carlo
Crystal Ball Resources and Free Trial Page
A Microsoft-centric take on Monte Carlo

Portfolio
Portfolio Decisions Pages on Real Portfolio Management
Portfolio Overview
What Is It?
Who Can Benefit?
How Can It Help You?
Various Approaches

Interesting take on financial modeling on Business Week (you may need a subscription to BW):
Financial Models Must Be Clean and Simple
If you don't have access, one of the key messages is the following 4 commandments:
• I will remember that I didn't make the world and that it doesn't satisfy my equations.
• Though I will use models boldly to estimate value, I will not be overly impressed by mathematics.
• I will never sacrifice reality for elegance without explaining why I have done so. Nor will I give the people who use my model false comfort about its accuracy. Instead, I will make explicit its assumptions and oversights.
• I understand that my work may have enormous effects on society and the economy, many of them beyond my comprehension.

Suggested Further Reading List (for more information and insight):

Why Can't You Just Give Me the Number - Patrick Leach
This book is a great overview of advanced analytical techniques. He has good examples and solid background.

Executing Your Strategy - Malek, Morgan, Levitt
Fantastic book that ties management concepts of the last 50 years into a neat framework.

Against the Gods: The Remarkable Story of Risk – Peter L. Bernstein

Fooled by Randomness – Nassim Nicholas Taleb

The Black Swan – Nassim Nicholas Taleb

Business Portfolio Management - Michael S. Allen
Lays out a practical approach to portfolio management.

Judgment Under Uncertainty - Kahneman, Slovic, and Tversky
Classic book on cognitive biases

Sparky CKW, RIP

2008-11-28T22:46:00.000-08:00

November 27, 2008 was Thanksgiving Day and unfortunately a sad one.

Our family pet of 10 years, a 15 year old greyhound died. We think he was born in about February, 1994. He raced in Tampa in the mid-1990s as "Armed and Dangerous." He was a good racer, big at 75 lbs. The problem he had is that he would tend to get injured from trying too hard or something. Maybe his connective tissues were not robust enough for a dog his size.

They retired him from racing and he lived on the farm for a few years to father some more racers before sending him to the greyhound adoption people.

Sparky was a good as pet as one could hope for. He was playful, mellow, eager to please, and naively intelligent.

Greyhounds

Like a dragster, he was built for straight-line speed. He had no flexibility in his joints except back and forth. Sitting like most dogs do was a chore for him.

Contrary to what many people think, greyhounds are not hyperactive. Owners call them "40 mile per hour couch potatoes." He would lie down and sleep most of the day, then we would take him on his 3-times daily walks. When he was younger, we would take him for runs in the morning. He would keep up and in fact want to go faster at first, but after about a mile he would start to get pretty tired.

We'd get home and he would be a little overheated, so he would lie down on the cool tile in the kitchen with his tongue hanging out.

He had a lot of quirks too. Like most former racers, Sparky was not very well socialized to people and human surroundings. He freaked out a little the first time he saw himself in the mirror and we had to train him to go down the stairs (he learned to go up quickly).

When we moved to California, from Houston, Texas in 2002, the first time he came to our new house, he loved it. It has a big backyard and he was sprinting around. But what was that blue thing? He walked up to the edge of the pool took a step forward and fell headfirst into it. This is when we found out that he was not much of a swimmer and was terrified of water. We guided him over to the stairs and pulled him out. We dried him off and he was soon running around the yard again. He decided to take a shortcut by jumping over the pool.

This is when he realized that he can't jump as far as he thought...

One time when a friend brought a dog over, the two dogs were playing in the yard. Her dog, George, loved the water, so he jumped into the pool and started swimming. Sparky stood on the side of the pool followed him around and barked incessantly. "Get out of there. It's cold and dangerous. Get out of there. It's cold and dangerous. Get out of there. It's cold and dangerous. Get out of there. It's cold and dangerous."

He liked other dogs. We used to take him down to the dog park near our house until another dog bit him. The owner, a real gem, refused to pay any of the $400 that it took to stitch Sparky. We were going to take him to small claims court, but then decided not to. It kind of ruined the dog park for us. By the way, in the above, gem = irresponsible jerkwad.

One of our neighbors has a small female dog named Cheyenne. Cheyenne is small and fast. One time Sparky chased Cheyenne around their backyard for about 30 minutes. Finally, he had enough. He pulled up lame and we walked him home across the street. In the middle of the street he stopped and refused to walk further. Finally, I called him a wuss and he started to walk again.

He used to run around on the hill in our backyard, so we nicknamed him the Billyhound.

When we took him for walks he would be full of energy, ready to rumble. As we got around the block and started heading for home, he would kind of slow down. When the house came into view he would try to veer off in another direction. We contrasted this behavior with trail horses, which start running for home as soon as they turn around. So he became the Trailhound.

On our walks in the neighborhood, Sparky would suddenly start to limp. When we'd stop to investigate, we would find a large seed pod caught between his toes.

He had a tremendous urge to chase cats. On our runs, when he would spy a cat, he would often bolt in their direction. Picture 80 pounds of energy, accelerating from zero to 40 MPH and you get a picture of what that was like. He gave Kathleen whiplash and nearly pulled my arm off one time.

He actually caught a cat that had ventured into our yard. The cat belonged to our neighbors and was named Texaco because that's where they found him (at a station). Sparky grabbed him and started to shake. We yelled at him, and he dropped the cat, which scurried out of the yard, but it was too late. Ironically, I was a Texaco employee.

Sparky and Food

Most of his life he ate the lamb and rice dog food from Costco. We found out early that chicken gives him gas.

He liked people food a lot. The most memorable was when we had a party and got about a hundred or so three-inch sandwiches. They were on a table at about head height for him. Towards the end of the night, someone told me that they had seen Sparky eating a sandwich. It turns out he didn't really have to tell us. Sparky graphically illustrated it to us the next morning or maybe that night. And by the way, it was more than one.

He also was a chocolate hound. Chocolate can kill dogs. It has a caffeine-like compound called theobromine that is poisonous at some level. Dark chocolate is worse than milk chocolate.

Two incidents come to mind. The first was when I had bought about a pound of chocolate covered raisins from Whole Foods for my daughter's trip. She put them into her pack, but didn't quite close the pack all the way. Sparky devoured the entire bag. Thankfully it was milk chocolate.

The other chocolate incident happened just a few months ago. We had a chocolate tasting party to celebrate Kathleen's MBA from Saint Mary's. We bought various bar chocolates and got some really delicious chocolates from Recchiuti in San Francisco. There was leftover chocolate after the party, so we put it in a paper bag on top of a high counter. It stayed there for a while, but one day, while cleaning the house we moved it to the dining room table. We went out for something and when we came back he had done some damage to the remaining chocolate. He ate a fair amount of mostly dark chocolate, which got his heart rate going, but he calmed down after a while. He was a big dog and would have needed to eat a bit more. Sadly, even though he didn't eat the Recchiuti chocolates, he laid down on the plastic bag of them. His body heat turned them into a flat chocolate pancake.

The last four years or so, he got increasingly more finicky. we first went with some premium bulk foods (Beneful), then when he had a pharyngeal tie-back earlier this year, we soon realized that dry foods would give him aspiration pneumonia, so it was on to wet foods. We started feeding him meatballs, then after a while he stopped eating those. He would literally have starved except we discovered the food that he would love until the day he died--Costco Carnitas.
He would always eat carnitas. Even when he wouldn't eat raw meat, the carnitas kept him going. The last few months we fed him a brand of canned dog food that had names like Mediterranean Feast, Buffalo Grill, and Cowboy Cookout (he left the peas behind because that's what food eats). He liked those, but we could always fall back on carnitas.

Sparky's Tricks

Like most dogs, Sparky liked to eat with his pack. He really liked it when we had tenderloin and/or bread. We decided that mealtimes would be a good time to teach him some tricks. We taught him to sit and lie down. The best trick that we taught him though was to show his "grill." We would say "grills" and he would bare his teeth and sometimes even snap a little.

We taught him to say his prayers too. When he was lying on his side, we said "say Your Prayers," he would lift his paw to his head. It kind of looked like saying prayers.

Rumbling With Sparky

Sparky was male. He therefore thought that he should be the alpha dog in the house. Every morning he would walk into our room and put his cold nose on my arm. I don't know if it was to wake me up and take him on a walk or to check if I was dead and ready for eatin'. I did not realize that this alpha thing was something I had to deal with until he refused to go into his "cave" (a big crate where we kept him while the family was at work and school). So he and I had a showdown. I put him on his leash and literally dragged him into the cave. That was the end of the alpha wars.

We still had fun though. We would rumble. I would put two fingers from each hand behind his canines and pull. He would be like a hooked fish. I could pull him around, shake his head back and forth and even lift his front legs off the ground. Sometimes he would snap at me. We tested each others reflexes. Finally when he had enough he would take off running. When we lived in Houston, he would beeline from the back to the front of the house. That was really cool when he ran through a crowded party.

The last few months of his life he slowed down. He no longer could run up the stairs and didn't have the energy to rumble. He would still go on several walks per day, and sometimes on his walks he would want to jog the whole way. He liked to go out in the backyard and catch some rays on the grass.

Goodbye Sparky. We miss you.

More on Greyhounds

Greyhounds are wonderful, noble animals with a long history. They can hold their bladders for 10 hours, so are great for working families. They are very gentle. If you are looking for a family pet, I would encourage you to go look at some greyhounds to rescue from the track.

Here are some links to Greyhound adoption.
National Greyhound Adoption Program
Southeastern US
Texas
California
New York

Swelling With Pride

2008-11-04T22:30:00.000-08:00

Not since the day before we went into Iraq have I been so proud to be American.

Obama is such a picture of class and grace. At last, we can leave the idiocy of the last 6 years behind us.

My mother would have called and sad, "He's from Chicago you know. But he's a Sox fan."

Yes we freaking can!!!!!

Vote for US President Now--Even If You Live Elsewhere

2008-09-24T13:53:00.000-07:00

The Economist magazine has a "World Electoral Vote Simulation" going on right now.

http://www.economist.com/vote2008/?sa_campaign=publisher/september/gec/

The outcome will be fascinating I'm sure.

Long Term and Short Term

2008-09-21T22:00:00.000-07:00

The following article appeared in Business Week magazine recently. I tried to write to them, but their website did not work for me. Here's the link to the original article.

Here's the text.

THE PSYCHOLOGY OF SAVING MORE

(It was called "Short-term Thinking May Be A Saver's Best Friend" in the print version)

Financial planners often suggest clients figure out how much they'll need to retire and save toward that huge number. Utpal "Paul" Dholakia, associate professor of management at Houston's Rice University, thinks people would do better to think about how much they'll save next month. A paper he co-wrote with Leona Tam of Old Dominion University found that those who planned savings for the next month did far better than those who tried to plan further out. In one experiment, people said they'd save an average $287 next month but saved $440. When asked to plan ahead four months, they said they'd save an average $946, but put aside just $123. Amy Feldman spoke with Dholakia.

Did the results surprise you? We were shocked. How can someone tell you they will save $1,000 and then only save $100? It's a gross misprediction of behavior.

So we're better off trying to save for next month than next year? That's it. Don't plan in advance because it makes you overoptimistic. You think: "I might get a windfall or a raise." And not only do people who give a savings estimate for four months from now estimate too high but they become more risk-seeking.

Is this just an American problem? We're working with colleagues in China and Korea to see if this translates. In Korea, the young are Westernized, so we think [their behavior] will look like that of Americans.

—Edited by Suzanne Woolley

So here's what I think.

1. The original headline was misleading. It is not about short term thinking. It is purely about decision making and action planing.

2. People use the words forecast and plan interchangeably, but they are different animals. In essence, the short-term savers had a forecast and a near-term action plan. The long-term people had a forecast, but they did not define a path to get there, so they had no plan. In fact, it probably wasn't even a forecast or prediction really, more like a vision. A vision without a defined path for achieving it, including near-term action, is worthless.

3. I can't imagine why the researchers were shocked. Really it's project management 101.

4. I don't disagree that people may hope for a windfall, or take more risk-seeking behavior without a near-term plan. Fundamentally, however, I believe the lack of accountability is the fatal flaw. A numerical plan without a defined set of actions or milestones goes nowhere.

5. Long term thinking sets the context. Planning lays out the path. Budgets tell you what the next step is. Without a long term view of where you are trying to get, you do not know how much to save next month, and also you may lose motivation, (forgetting that you're saving the money for that new car). For people's personal budget, monthly time horizons tend to be best because people typically budget and live on a monthly basis.

I suspect that the researchers understand these things, but the reporters had only a few words to try to condense it. Then they missed the point. Too bad.

Randy Pausch Last Lecture: Achieving Your Childhood Dreams

2008-08-15T19:14:00.001-07:00

This video is amzing and inspiring. If you watch it you will come away a better person. Guaranteed.

The Problem With BMI

2008-08-13T00:37:00.000-07:00

BMI is such a bad metric for measuring obesity. Better would be FMI which instead of the weight/ht^2 is weight*body fat%/ht^2 or BMI * body fat %. Or how about simply body fat percentage. It is a lot more relevant to the measure of obesity.

There has been some recent press about how people with high BMIs might be healthy and people with low BMIs might be unhealthy. Well duh!!!

The following article talks about people who are "skinny fat."

Normal Weight Obesity: An Emerging Risk Factor For Heart And Metabolic Problems

More than half of American adults considered to have normal body weight in America have high body fat percentages -- greater than 20 percent for men and 30 percent for women -- as well as heart and metabolic disturbances, new Mayo Clinic research shows. The finding conflicts with the widely held belief that maintaining a normal weight automatically guards against disorders such as high levels of circulating blood fats and a tendency to develop metabolic syndrome, which often leads to type 2 diabetes.

The researchers defined "normal weight" by body mass index (BMI). They found that people with normal BMI who had the highest percentage of body fat were also those who had metabolic disturbances linked to heart disease. The researchers use the phrase "normal weight obesity" to describe this new type of patient at risk for metabolism problems and risk factors for heart disease, but who rates as "normal" on standard weight charts. They defined normal weight obesity as a condition of having a normal BMI with high body fat percentage. The Mayo team will present its study results at the American College of Cardiology's Annual Scientific Session next week in Chicago.

"Using the term 'normal weight obesity' is really a way of being more precise about the changing conceptualization of obesity, because the real definition of obesity is excess body fat," says Francisco Lopez-Jimenez, M.D., a cardiologist on the Mayo research team. "Our study demonstrates that even people with normal weight may have excessive body fat, and that these people are at risk for metabolic abnormalities that lead to diabetes and, eventually, to heart disease."

Significance of the Mayo Clinic Study

Heart disease remains the major cause of death and disability in westernized countries. Researchers around the world are striving to refine the relationship of body composition to heart health as a means of:
-- Designing more effective risk assessment tools
-- Improving public health programs for reducing risk
-- Designing new and better clinical rehabilitation programs for heart patients

While a focus on maintaining "a healthy weight" has long been a centerpiece of these efforts, Mayo's new study suggests the focus may need to shift. Instead of tracking weight and BMI only, public health measures to prevent heart disease might benefit more from measuring the belly or by assessing percentage of body fat as more reliable risk factors of heart disease. Mayo studies in 2006 and 2007 suggested this criterion by demonstrating the inability of BMI to discriminate between body fat and lean muscle. "Combined, the data from our earlier work and the current study suggest it's time for a new measure of body fat as a risk factor of heart disease," says Dr. Lopez-Jimenez.

Health and Diet Update June 08

2008-06-08T00:29:00.000-07:00

Here is my current weight loss progress.

It has been going great, but in early May I hit a bit of a plateau, so I decided to shock my system with a PSMF diet as outlined in the Rapid Fat Loss Handbook. You can see from the chart that it restarted my weight loss and I hit 200 in the first week of June.

I am now tapering off that diet and I will work towards a more moderate loss of about 0.5 - 1 lb per week while working harder on my fitness regimen. I hope to get down to about 180 by the end of the year. I think a good target weight range for me is 180 to 185 lbs.

I had a physical about a month ago and had a lot of good news. My blood pressure had been in the high range, pushing hypertension for several years. It was in the 140-150 over 90-100 range.

In early May it was 124/70. That is darn close to good on the systolic and the lowest diastolic I have ever had. I also did the full blood workup and those results were very encouraging too. My triglycerides, which had been extremely high >300 for several years is now down to 100. My HDL are at 44 and total cholesterol at 162.

So I'm pretty pumped about that.

I ran in a 5 k in May. The Aztec Run for Education. I was happy to finish, running all the way around Lake Merritt in Oakland.

I hadn't run more than about 100 yds. in 10 years, so I have been pretty sore since the run, but it's getting better now. My time was 32:40. My best 3 mile time in high school was 16:08, so I am right at twice that.

I'll have to think about whether to continue running. I stopped years ago because my shins hurt. That day they were fine.

The other interesting thing is I did a fitness test over at St. Mary's College in Moraga, where Kathleen works. I got a few readings from that. First, my VO2 max calculated at 42.6, which is very close tot he 41 that my Polar watch says. They also did cholesterol and blood sugar tests. My numbers were 160 and 65 respectively. No surprise on the cholesterol. Mine has always been ok. I was really pleased to see the fasting blood sugar that low though. Given my previous weight, blood pressure, etc., I was concerned that I was heading down that Type 2 diabetes trail. Above 100 is considered pre-diabetic.

I attribute a lot of this success to the low carb approach to my diet. Yes I have been working hard at the gym too, but the diet seems to have made a big difference. In the past, after a few weeks f general low calorie dieting (meaning lots of carbs, low fat, moderate to low protein), I would feel fatigued after a few weeks. This time, even on the PSMF which is high protein, low fat, low carb, I had energy and still do.

I believe that my improved blood readings are a direct result of the diet. The "calorie is a calorie" people would say that it is because of the weight loss, but I don't buy it. There is a very fundamental biochemical difference based on the macronutrient content of the diet. I am personally convinced of that.

Read Good Calories, Bad Calories for more on this.

Diet and Fitness Update 3/2008

2008-03-29T12:50:00.000-07:00

Previously, in January 2008, I reported that I was at 219 lbs and about 20% bodyfat.

Last week I weighed in at 211.8 and somewhere around 15% bodyfat. My rate of weight loss is not huge, but the decrease in bodyfat is really encouraging.

Given the inaccuracies of bodyfat measurement, it is really hard to know if I went from 20% to 15% of 19% to 17%, or some other combination, but the main thing is to see the decrease over time. I am hoping to be down around 13% by mid-year.

I recently read Good Calories, Bad calories by Gary Taubes. It is hard to read, but has led me to believe that the US Government guidelines for low-fat eating are completely out of whack.

I have been following a regimen similar to what is laid out in Emotions for Engineers.

I am continuing to work hard at the gym and my weightlifts are actually increasing (very slightly), rather than decreasing with my weight loss. This is really sweet. The good news is that I appear to not be losing my hard-earned muscle mass.

I'll continue down the road and post here as I continue.

Also, I have been playing around with bodybuilding.com and have a progress page there.

Gary Taubes Interview by Seth Roberts

2008-01-31T00:05:00.000-08:00

Seth Roberts of Shangri-La diet fame interviewed Gary Taubes who wrote Good Calories, Bad Calories.

Fascinating stuff.

http://docs.google.com/View?docid=dhm4f3rg_36gg4956dm&pli=1

GARY TAUBES

Interviewed November 30, 2007 by Seth Roberts

[part 1]

INTERVIEWER I just spoke to someone who reduced the carbohydrate in his diet, for various reasons, including your book. He found that his performance on mental problems started improving again. It had stopped improving; it had been constant for a long time, and then he started getting better. So it may be that when you reduce the carbohydrate in your diet, your brain starts working better.

TAUBES Well there is evidence that your brain works more efficiently on ketones, as does your heart. So if he reduced his carbohydrate consumption sufficiently, he probably increased the level of ketones in his blood. But I'm just speculating here.

INTERVIEWER: The book seems to have had an unusual beginning. You’d been writing about salt, and you learned that a scientist you didn’t trust about salt was also talking about obesity?

TAUBES Well, I’ve spent over 20 years now writing about controversial science. In the mid-1980s, I lived at CERN for ten months, the big physics lab outside Geneva, watching physicists discover non-existent elementary particles. Then I wrote a somewhat infamous story about prions, the supposed causative agents of Mad Cow Disease. I wrote a book about cold fusion: I got obsessed with this question of how it happened, because it was so obviously wrong. After all that, I developed what I believe is a very good feel for who’s a good scientist, and who’s a bad scientist, just by talking to them. There are certain ways that good scientists describe their data, describe the caveats, and describe the conditions by which they may or may not be right. I had also, obviously, with cold fusion, interviewed some of the worst scientists in the world. I used to joke with my friends in the physics community that if you want to cleanse your discipline of the worst scientists in it, every three or four years, you should have someone publish a bogus paper claiming to make some remarkable new discovery -- infinite free energy or ESP, or something suitably cosmic like that. Then you have it published in a legitimate journal ; it shows up on the front page of the New York Times, and within two months, every bad scientist in the field will be working on it. Then you just take the ones who publish papers claiming to replicate the effect, and you throw them out of the field. A way of cleaning out the bottom of the barrel.

INTERVIEWER I thought your NY Times article,"What if It's All Been a Big Fat Lie," sort of did that. The people who came out against it, they were all the bad journalists. Just throw them out!

TAUBES Well, how I got onto that: I was doing this story for Science on salt and blood pressure, looking into the controversy about whether salt consumption plays any role at all in raising blood pressure and causing hypertension. One of the prime players in this salt/blood pressure controversy was obviously one of the worst scientists I'd ever met -- one of the five worst…you can’t say, in that five, who is the very worst, but they're all pretty bad. This is a group that includes guys like Stan Pons and Martin Fleischman who claimed to have discovered cold fusion. While I'm on the phone with this guy, interviewing him, he takes credit for getting Americans to eat less fat and fewer eggs. I literally finished the interview, called my editor at Science, and I said “You know, one of the worst scientists I’ve ever interviewed just took credit for getting Americans to eat less fat and fewer eggs, and I don’t know what the story is, but when I’m done with this salt story, I’m going to look into fat, cholesterol, and saturated fat.” I had a great relationship with Science. My editors had faith in me. If I said there was a story there, they’d give me the support I needed to pursue it. A year later, I ended up with that first story in Science, saying that there’s no evidence that reducing the total fat in the diet makes a damned bit of difference in our health. The evidence that saturated fat and monounsaturated fats are players is, at best, marginal. And that led to the N.Y. Times article.

INTERVIEWER What did that scientist say that made you rank him so low?

TAUBES There are all kinds of signs. He told me there was no controversy, when there was obviously a controversy. His side might have been right, but to deny there as a controversy was ludicrous. He talked about the legitimacy of throwing out negative data. You measure salt consumption one way; you don’t see any effect on blood pressure, and so you decide that’s obviously the wrong way to measure it. The implication of everything he told me was that he knew what the answer was before he did his experiments, and then he adjusted his experimental techniques and methodology until he got the answer that he wanted. And he believed this was legitimate science. There are other signs. I’m a stickler about the use of words like “evidence” and “proof”. So if someone tells you there’s no evidence for some controversial belief, you can be fairly confident that they’re a bad scientist. There's always evidence, or there wouldn't be a controversy. If somebody says that “we proved that this was true” or “we set out to prove that this was true” that's another bad sign. The point here, as Popper noted, among others, is that you can never prove anything is true; you can only refute it. So researchers who talk about proving a hypothesis is true rather than testing it make me worried.

INTERVIEWER Yeah, I see what you’re saying. They overstate; they twist things around to make it come out the way they want. They are way too sure of what they…

TAUBES Yes, and the really good scientists are the ones, almost by definition, who are most skeptical of evidence that seems to support their beliefs. They're most aware of how they could have been fooled, how they could have screwed up, or how they might have missed artifacts in their experiment that could have explained what they observed. They’re very careful about what they say. If you ask them to do play devil’s advocate, and tell you how they could have screwed up, then at the very least, they’ll say “Well, if I knew how I could have done it, I would have checked it before I made the claim”. So when I'm talking about discerning the difference between a good scientist and a bad scientist, I'm talking about how they speak about their research, the evidence itself, it's presence or absence. My friends in journalism would often ask me this question: by what right do I think make decisions about who's a good scientist and who's not. I’d say “Well, when you're an English major, you can be confident that Norman Mailer was a better writer than John Grisham, even though John Grisham makes 10 to 100 times more money”. It’s just a feel for what you do; I don’t know how else to describe it. I know a good scientist when I talk with one. I might be fooled, on occasion, but....

INTERVIEWER It’s not particularly well-correlated with how famous they are, or how many Nobel Prizes they’ve won.

TAUBES My first book was about a Nobel Prize winner who discovered non-existent elementary particles.

INTERVIEWER Who was that?

TAUBES An Italian physicist named Carlo Rubbia.

[end of part 1/start of part 2]

INTERVIEWER What do you think about prions?

TAUBES Here's the problem with prions: the claim is that here's radical discovery -- an infectious agent that doesn't have nucleic acid -- and it's based fundamentally on a negative result, which is that when researchers have gone looking for the nucleic acids they failed to find them. Therefore, so the logic goes, they must not be there. The original claim, by Stan Pruisner, another Nobel Prize winner, was premature. He made some claims in his early papers that were definitively wrong. Yet everything he’s done since then supports his initial claim, which suggests he's was either remarkably lucky to begin with, or he's only capable of interpreting his results so that they agree with his preconceptions. One of the themes in all of my work is that if you go public on premature data, what happens is that the motivation to do really good science ceases. By “really good science”, what you’re supposed to do, as brutally as you can, is to try to come up with tests that would refute your own hypothesis. The idea is that if your hypothesis survives every rigorous test you can imagine, and all those that everyone else can imagine, then you can start believing itss true. But once you’ve staked a claim based on premature data -- once you've gone out on a limb without doing any of those rigorous tests -- now your motivation becomes to prove that you were right., which you can never do in any case. But the point is that you stop trying to refute your hypothesis, and you start trying to accumulate evidence that supports it and the latter isn't science. It's more like what happens in religions.

INTERVIEW That’s what happened with Peter Duesberg. He was a good scientist until he started making claims about HIV.

TAUBES When I wrote this prion article in 1987, the science was so bad that it was a joke. Still, I never said that the prion concept wasn’t correct; I just said there was excruciatingly little evidence to support it, and there were plenty of reasons to believe it was wrong. How do you get strains of an infectious agent without nucleic acids (RNA or DNA) to encode the information in the strains? If you actually look today, even though Prusiner has won the Nobel Prize, if you go to the WHO website or the NIH website and you read up on prions, you’ll see that it’s still considered a hypothesis. There’s still no way to explain how you can get strains without a virus. Prusiner has these ideas, but they’re along the lines of now “a miracle happens”. It’s another long story, but one of the problems (and this is a theme in my book), when you let an untested hypothesis grow and infect the science to the point where people start to believe it’s true, even though it’s never been rigorously tested, the obstacles against ever overturning it get bigger and bigger. It’s like the dietary fat hypothesis: you let it sit around for 40 years, and it evolves to the point that people consider it dogma; it’s virtually impossible to overturn it. The situation with prions isn't so bad because the public doesn’t care about prions the way that they care about diet, but once the Nobel Prize is awarded, even though it’s still considered a hypothesis, people tend to ignore the studies that suggest it’s wrong. There's one researcher from Yale who is constantly publishing evidence in major journals that she’s found the nucleic acids, and people just ignore her. They believe the question has already been answered.

INTERVIEWER What’s her name?

TAUBES Laura Manuelidis.

[end of part 2/start of part 3]

INTERVIEWER That’s really interesting. I’m really interested in these pathologies of science; I’ve written about them several times. You wrote that New York Times piece, and from my take on it, you had a bunch of evidence, and then you got a book contract. Is it fair to say that you found out that what you wrote in the piece was mostly right?

TAUBES It’s a difficult question. I had actually pitched the New York Times piece on fat as an attempt to determine the cause of the obesity epidemic. The proposal was very open ended. I had several ideas. I actually believed, going in to the story, that the answer was going to be that high-fructose corn syrup was responsible for Americans getting fatter over the last 30 years.

INTERVIEWER I’m glad to hear that.

TAUBES The thing about the obesity epidemic is that we can say when it starts, give or take five years: sometime between the mid-1970s and late 1980s. So we have a starting point, and that happens to coincide with the introduction of a type of high-fructose corn syrup known as HFCS-55, which was developed to taste exactly like sugar when it's put in sodas and juices. In fact, it is effectively identical to sugar, as far as the body is concerned -- sugar (sucrose) is 50-50 glucose and fructose and HFCS-55 is 45 percent glucose and 55 percent fructose -- although I didn’t know that when I pitched the article. But I thought that high-fructose corn syrup is so cheap. Basically this is an idea that Greg Critser in a book called Fatland picked up on, and subsequently Michael Pollan, too, that high fructose corn syrup allows you to saturate the market with sugar, without any fear that price fluctuations will cause you to go out of business, or lose you a lot of money. If the international price of sugar suddenly spikes, as it did in the 70s, and you’re committed to fulfilling this enormous demand for sugar you've created, then you're in trouble. But if you have a cheap reliable source of sugar, at a price that won't change from year to year, then you can create an enormous market without fear. This was, more or less, my naive idea of how the economics of HFCS might have caused an entire nation to get fat. Once they had this dependable low-cost sugar substitute, the sugar industry and the soda industry could then expand their production and sell Big Gulps, etc. Then I did the reporting. I talked with industry analysts, and they said that was nonsense; that the primary cost of selling sodas and fruit juices is the bottling and the shipping, and that the cost of the sweeteners is such a tiny portion of the cost of the end product that it wouldn’t have made any difference whether it was sugar or high-fructose corn syrup. So I moved to my next idea, which was based on the fact that the beginning of the obesity epidemic coincided with the institutionalization of the low-fat dogma. As I’m doing that reporting, I stumbled upon what was, at that time, five trials of the Atkins diet, all of which had been finished, but not yet published. At one point, when I was doing the reporting, I actually got worried that some other journalist would beat me to the punch.

INTERVIEWER What was it about the Atkins diet, that made these trials so important to your article?

TAUBES: Well, remember, my background, as a journalist and in school, was more or less in physics. In the kind of physics I used to write about, you’ve got some complicated detector that’s looking at particles and atoms smashing together inside it and you're looking for some byproduct of a collision that you've never seen before. A new particle. But the first thing you have to do is make sure you understand your detector. Can you believe what it's telling you. So you to have to calibrate it. If you want to know how much you weigh, for instance, one thing you might do before you step on the scale is you calibrate that. You make sure that when you're not on it, the little arrow on the scale is pointing to zero. If it's registering one or two pounds when you're not standing on it, then it might be off by five or ten pounds or more when you are. So you want to calibrate your equipment. You want to know that when you set it to zero, it says zero. That's an idea that's always resonated with me. Measure what happens at an extreme, make sure you understand that, and then see what happens from there. So here's the Atkins diet: in theory, you're removing virtually all of the carbohydrates, but you don't tell people to eat less. You tell them to eat as much as they want. It's like you're setting the diet to zero carbohydrates, and as much fat as possible. According to conventional wisdom, you should certainly not lose weight and you might even gain it. But here were five studies saying that, lo and behold, people really do lose weight when you remove the carbohydrates from the diet, and they lose more weight than they do when you tell them to keep the carbohydrates but eat less calories. What's more, their cholesterol profiles actually improve, so how can fat or saturated fat be bad for your cholesterol, if these high fat, high saturated fat diets make your cholesterol levels better. To me that had to tell you something about the validity of the low-fat dogma and about the underlying physiology. What do carbohydates do, and what does their removal do. So once I learned about those five studies, I was confident that I had a story that was now worth writing. As for your original question, about whether I found out most of what I originally wrote was right, obviously the book supports the message of the article, but I no longer believe a fair number of things I believed when I wrote that story. For instance, when I wrote the Times article I inherently believed that the key was still calories consumed.

INTERVIEWER You mean things that you believed then, that you don’t believe now?

TAUBES Yes, that I don’t believe now. In that original article, I discussed what David Ludwig has argued -- that easily digestible carbohydrates cause these blood sugar and insulin spikes, and that in turn causes blood sugar to plummet, and the result is blood sugar so low a few hours later that this in turn makes you hungry. So you eat more and that's why you get fat with carb-rich diets. Ludwig works with obese children at Harvard and I believed that his hypothesis was probably true. Then I also talked about Michael Schwartz’s research at the University of Washington. Schwartz believes that insulin's primary role is to suppress hunger in the brain, but that somehow we become resistant to that effect and so, once again, we eat too much and that's why we get fat. Both these theories are predicated on the notion that we get fat because we eat too much and that's what I believed. We consume more calories than we expend and we get fat; something about carbohydrates facilitates that excess consumption. Now I believe the causality is reversed, and that's what I discuss in the book and in the lecture. Carbohydrates make us accumulate calories in our fat tissue, and that in turn makes us eat too much. It’s all about the regulation of fat metabolism. All those things that Ludwig and Schwartz were talking about might have been true (I mean, they are true, on some level), but they’re not the driving force of why we get fat, or why removing the carbohydrates makes us lean.

INTERVIEWER I see. So that’s a good summing up of what was in your article that you believe, and what you don’t believe anymore.

TAUBES There are other related facts, as well. I never imagined when I wrote that original article that I would come to believe that exercise won't make you lose weight, even though I’ve been an athlete my entire life and it's never helped me. So it's fair to say that when I wrote that New York Times article five years ago, I had an entirely different conception about the causes and cures of obesity and overweight. Carbohydrates were key, but my understanding of the mechanisms was completely different. That’s the kicker with research and reporting: you don’t know what you'll find until you do it.

[end of part 3/start of part 4]

INTERVIEWER I was impressed with the discussion in your book and in your lecture about obesity coexisting with poverty in all these different cultures and the implications of that. I'd never seen that before.

TAUBES I have this feeling, and I guess that all writers (or all neurotic writers) have to some extent, that my work is being ignored. It’s my Rodney Dangerfield complex. Now that I’ve written the book, I occasionally get emails from friends saying that they had some discussion with some obesity researcher, and they said, “Are you going to read Taubes’s book?” and their response was “Well, we know what Taubes thinks, so why should I bother reading the book?” What's more, the Atkins craze has come and gone, so these people believe it’s old news. Why should they pay attention to the book or what I might have learned in reporting it? In fact, I got more reviews for my cold fusion book than I have for Good Calories, Bad Calories. And The cold fusion book came out three years after the fact. There was also this sense that my article started an Atkins craze, and then Atkins Nutritionals declared bankruptcy, and somehow it all went away, and it’s just the same old diet crap that nobody wants to hear about. Nobody is going to stay on the Atkins diet so who cares? Let's move on. The lecture you heard is an attempt to combat that attitude: I argue that the existence of these obese, impoverished populations living on high carbohydrate diets are counter-examples to the conventional wisdom. As I said in my talk, if you have an obese mother and a malnourished child living in the same family, and this is a common phenomenon, that should be perceived as a refutation of the calories in/calories out hypothesis. In any sort of healthy scientific endeavor, that’s the kind of paradox you look for. Physicists have recently spent a few billion dollars building an accelerator that will, they hope, produce some kind of phenomenon that they can’t explain by their current theory. If they get that, it's front page news and they now have some observation that they can use to improve their theory. These obesity researchers, they have malnutrition and obesity coexisting in the same impoverished population, and they don’t see it as a challenge to their hypothesis. How do I get the word out that there are important issues here that have to be discussed? That's what that lecture is intended to do. When [the New York Times reporter] Gina Kolata reviewed my book in the New York Times Book Review, she swept right over these issues. She went right to the thing that bugged her -- why don't people stay on these low-carb diets? -- and ignored all the evidence that refutes the conventional wisdom about why we get fat. All she cared about in the end was why don't people stay on these diets if they work.

INTERVIEWER As if that’s your fault! I thought that was a very unusual way to review a book.

TAUBES Well, she had written her own obesity book that came out five months earlier, and she blamed obesity, in effect, on genes, without bothering to acknowledge that the genes interact with the environment; we have an obesity epidemic; we have obesity associating with poverty, for instance, so there’s obviously some lifestyle factor.

INTERVIEWER And obesity’s gone way up in the recent past; it can’t be genes.

TAUBES I felt her review was her way of saying “Look, this is why none of the stuff he discusses was in my book.” One point I make over and over again is that obesity is a disorder of excess fat accumulation, so you have to look at the hormonal regulation of fat tissue. If you're discussing growth disorders -- gigantism or dwarfism -- you look at the hormonal regulation of growth. So why not do the same in obesity. Gina didn't, because nobody she interviewed brought it up. Then she turned her review of my book into an excuse for why she didn't mention any of these things. Anyway, that’s life in the publishing industry. If you think about it too much, you just get angry.

[end of part 4/start of part 5]

INTERVIEWER Well, I think your book is a great book, and I don’t think its effect is limited to how many reviews it gets. What books do you think your book resembles? I think of it as a book showing that authorities can be seriously wrong, but what do you think?

TAUBES You know, I don’t know, actually. I can’t answer that question without sounding like a crazed egomaniac, so I won’t. What the book does is try to explain why the paradigm of obesity and chronic disease has to change and then to offer the alternative paradigm. Although I don’t use the word “paradigm” in the second half of the book, that's what it's trying to do. I want people to stop thinking about obesity as a disorder of overeating, calories in over calories out, and think about it as a disorder of excess fat accumulation. That's a classic paradigm shift, or at least so I think. I don’t believe that you can understand obesity and its associated chronic diseases, without thinking of obesity fundamentally as a disorder of excess fat accumulation and asking this question: what regulates fat accumulation? That’s going to be the thing that tells you what the cause of obesity is. If it’s a paradigm shift, then you have to ask yourself how many paradigm shifts are there like this, and what kind of books have been written to directly shift those paradigms, and then I sound like I have some serious ego problems.

INTERVIEWER Then let me put the question differently. I think your book piles up an enormous amount of evidence that is hard to refute. The cumulative effect of all that evidence is not that we’ve been lied to, of course, but that we’ve been misled, badly misled, about something that’s really important, namely our health. So, are there other books like this?

TAUBES I really can’t answer that question either. I'm not erudite enough and then I spent the last five years doing nothing but reading about fats and carbohydrates, so my memory of other subjects fades away. Here's how I think of it, though: when I was talking with my editor about this book when we in the editing process -- and he's a tremendous editor, who has edited maybe eight or nine non-fiction Pulitzers -- I brought up a book called Ashes to Ashes as an example. Ashes to Ashes is by Richard Kluger and it won the Pulitzer and my editor edited it. It's about the cigarette industry and not just the industry itself, but the science and the struggle to understand that cigarettes cause lung cancer. I said to my editor, “Imagine if we lived in a world where the public health authorities were telling us that lung cancer is caused by saturated fat”. Kluger has got to write a different book, and that’s the situation that we are in.

INTERVIEWER Kluger has got to write a longer book? Was that your argument?

TAUBES He’s got to write a different book. His book was actually longer than mine, but it was a narrative, which mine isn't. If you're going to convince the entire public health community that they've made a horrible mistake -- or many of them, in this case, whether about cigarettes or obesity and disease -- then you have to build an argument as carefully and as rigorously as you can. It's like arguing a legal case, more so than telling a story. And that’s one of the reasons why my book can be difficult to read, or challenging.

INTERVIEWER I found it easy to read.

TAUBES Well, good. See, I read the Amazon reviews. I shouldn't but I do. And for every three people who say it’s tremendous, there’s somebody who says “It’s boring” and they couldn't get through 20 pages of it. One problem is that we gave it this diet-like spin, with the title "Good Calories, Bad Calories" and people buy it expecting a diet book. And it's not a diet book. I also have a lot of friends who tell me they bought the book and they’re jumping into it, and I never hear from them about it. It tells me, being a cynic, that they got to the section on VLDL and LDL or some such, and that was the end of that.

INTERVIEWER I think it has a lot of evidence. I think the book is harder to read than it might be, because you feel compelled to have a lot more evidence than usual, because you’re saying something that everyone says is false. If what you’re saying was more conventional or acceptable or went down more easily, you wouldn’t need as much evidence.

TAUBES Well, that’s the thing. This is one of the ironies, again, of reviews like Gina Kolata's or some other that I've got. They’ll say the book’s too long, it goes on and on, and then they’ll say “he doesn’t even mention X," or “he leaves out this evidence”. I’m all too aware of the arguments I left out, the counter-arguments, the counter-counter-arguments, the counter-counter-counter-arguments. At one point I had a draft of the book that was 400,000 words, unfinished. For every section, like the section on salt and blood pressure, I would say “here’s why we believe what we’ve come to believe. Here’s the counter-evidence implicating carbohydrates. Here’s how the authority figures treat that counter-evidence. Here’s why they can look at that evidence and think it’s not a challenge to their beliefs”. And my editor, bless his heart, said “Look, you don’t need this. If you get a chance to lecture on this material, then you can tell the people in the audience why their counter-counter-arguments aren’t actually refutations of the carbohydrate hypothesis. You don’t need fifteen different levels in the book." But, you're right, I’m trying to convince people of something they don’t believe. I was walking this tightrope between making it readable for the lay public, so that they could make their own decisions, and hoping that doctors, researchers, and authorities would read it, and they might say, “Well, you know, Taubes has a point. Maybe we should take this seriously.” What I fear is that on one level, I lose some of the lay public, because it’s too difficult and advanced, and on the other level, the physicians and researchers aren’t going to read it anyway, because they don’t see that a journalist can tell them anything they don’t already know. And then there’s this effect where, after I challenge half a dozen of their most fundamental beliefs, and they’re only 150 pages into it, do they just burn out? The example that I use there is that if somebody came out with a really-well-reviewed book saying that extrasensory perception should be taken seriously as a scientific phenomenon, I wouldn’t be able to read it. No matter how good it was, or other people thought it was, I wouldn’t be able to read it. I might try, because I tell myself I have to be intellectually honest and rigorous, but I could imagine, after 50 pages, I'd just say “I can’t do it. Maybe he’s right, but I can’t process it. My brain won’t allow me to process what he’s saying”. I wonder if that’s going on here, too: “Saturated fat, OK, but salt, fiber? Give us a break.”

[end of part 5/start of part 6]

INTERVIEWER It’s true, when I started your book, I already kind of believed all of your main points. Not all of them, but I was sympathetic. I knew where it was going. I thought “Oh, good. More evidence. This is interesting, and that’s an interesting way to tell that story”.

TAUBES The way I see it is that the establishment has an immune system to protect itself from challenges. Every science needs that kind of immune system to protect itself from quacks and easy-to-swallow but erroneous ideas that might infect the good science in the field. My question is whether I can infect enough people, enough serious scientists, that I can pose a threat to this immune system, that I could compromise the immune system of the establishment and make them take this idea seriously. Because some times these immune systems work against challenges that are legitimate. I honestly don’t know if I can. It’s going to be an interesting year. I hope I don’t become one of those bitter old men who, when I fail to do so, who can’t let it go.

INTERVIEWER How did you end up giving your recent talk at Berkeley? Obviously someone in the establishment was willing to invite you?

TAUBES Yes. It was actually epidemiologists at the School of Public Health who invited me initially to talk about epidemiology after I had a cover story called "Unhealthy Science" in the New York Times. I told them that the subtext of that story was my book. If what I say in the book is correct, then an observational epidemiology has done an enormous amount of damage. One line that was taken out of the New York Times article said that this was a story about the risks and benefits of observational epidemiology. There are certainly some successes in that endeavor, but if we’re living through an obesity and diabetes epidemic because of its failures, then it's conceivable that more people have died because of observational epidemiology than have been saved. You always have to look at the negatives, the false negatives and the false positives. You can’t just look at the true positives and say that this is a valuable field of science. We're digressing again, but the game of poker is relevant here. Are you a poker player?

INTERVIEWER I’ve played a lot of poker, yeah.

TAUBES Bad poker players base their methodology, their strategy, only on what happens when they win. They don’t notice that that strategy is making them lose more money when they’re losing than they win when they’re winning. The best strategy, of course, minimizes the losses and maximizes the gains. But they don’t think like that; the wins are so seductive that that’s all they pay attention to. Anyway, getting back to the question, these Berkeley epidemiologists invited me to lecture on epidemiology; I said “let me talk about the book”; it gives me a chance to sit down and try to convince some unbiased observers, I hope, that their beliefs about calories-in/calories-out has to be questioned.

INTERVIEWER What effect do you think your lecture had?

TAUBES I don’t know actually. I don’t know how many of the people I was preaching to are already converted. I thought it went over well. I mean, I couldn’t believe that I had spoken for almost two hours and had 90% of the audience awake. There were a few people I lost (you know, you focus on the girl in the seventh row on the right, who’s asleep). But most people seemed pretty attentive. But when I say I'm trying to infect others with these beliefs, if I convinced even a few of the faculty Berkeley that these ideas have to be taken seriously I've made progress. OK, now I’ve got a little infection growing at Berkeley. Indeed, I asked one of the epidemiologists who invited me to e-mail, say, ten of his colleagues and say, "You should get Taubes to come lecture, because it’s fascinating, and you might think his book is a little dubious, but when you hear his lecture…”. So we’ll see if it has any effect or if they’ve found it compelling enough that they went through with it. I hope so.

INTERVIEWER I’m just surprised that they found your book dubious. I think they might disagree with your interpretation of the evidence, but I don’t think they would find the reporting dubious.

TAUBES I’ve got to get to the people who take this knee-jerk response that they know what I think, and they don’t have to read the book. For instance, I had lunch with a Berkeley obesity researcher that I’d interviewed five years ago. We spent a couple of hours together five years ago and I sent him a copy of the book when it came out.

INTERVIEWER Who is this?

TAUBES A guy named Marc Hellerstein. He’s a runner and, of course, he believes that sloth is the cause of overweight. He joined us for lunch on Wednesday, but he didn’t eat, and I had about 35 minutes to try and convince him to read the obesity section of the book. The way he sees it, he’s got a lot to do; he’s a busy man, doing all of these experiments, trying to get funding, what could he possibly learn from reading the book and it's a big book? So I was basically sparring with him for 35 minutes trying to inflict enough damage that he might conclude that he might actually learn something about his own subject of expertise if he reads it. And he actually said “OK, OK, OK, I’m going to read it, I’m going to read it”. (If he does, I'd be surprised, because after the lecture I e-mailed him a few follow-up notes, and he never bothered to respond.) I believe his initial response is probably common among obesity researchers, and even if they're tempted, they first have to wade through 200 pages on chronic disease that try to convince them that everything else they believed is wrong. The exceptions are those people like you, who already had reason to agree with me.

[end of part 6/start of part 7]

INTERVIEWER I was a member of the Center for Weight and Health. But the other members didn't know what I was up to, and had no idea it could have anything to do with actual weight loss.

TAUBES That’s one of the things I’ve found most amusing about obesity research, that you have this disconnect from pre-World War Two, when the people doing it were clinicians who were treating obese patients, to post-World War Two, where first, it’s nutritionists, who do rat experiments. Then, by the 1960s, obesity is considered an eating disorder and it’s being treated by psychologists and psychiatrists. So today, if you looking at some of the major obesity centers in the country --- at Yale, at University of Cincinnati, they’re all run by psychologists or psychiatrists. Here's a physiological disorder of the body, and it's being studied by psychologists and psychiatrists. They're not interested in anecdotal evidence, unless it agrees with their preconceptions.

INTERVIEWER In my department, we don’t have any of that. Obesity is not handled much on the Berkeley campus.

TAUBES But think about it: it’s a physiological disorder.

INTERVIEWER Well, hunger is controlled by the brain.

TAUBES I know, I know, but you know, diabetics get hungry. Type I diabetics are starving. Literally starving, without insulin. But it's not psychologists who treat diabetics.

INTERVIEWER I think that with Type I diabetes, you can say, “look at this problem; it’s not in the brain”. But I think with most obesity, it’s no so obvious that the problem isn’t in the brain. Sure, they’re fat, but maybe they’re fat because they’re hungry too much. That could easily be a brain disorder. It could easily have something to do with the brain.

TAUBES It could have something to do with the brain, but the problem is in the body. This is the paradigm problem. If you just think of it as hunger, then…

INTERVIEWER I’m not saying you just think of it as hunger, but you wouldn’t want to rule it out.

TAUBES Yeah, I know. That’s why the book is so long, because I’m trying to do it --- I’m trying to say “Look, your fat tissue is trying to get fat. Hunger and gluttony and sloth are side-effects of what’s happening at a hormonal level in your fat tissue."

INTERVIEWER Right. I love the way you’re answering these questions; it’s so informative. What effect did Weston Price have on you?

TAUBES Price was interesting. It’s funny. He got cut from the book for reasons of length and narrative, but reading Price was a revelation to me, as I say in the acknowledgments. I think that Price should be required reading for every nutritionist in the world. And then, "Nutrition and Physical Degeneration" is a great read, as well.

INTERVIEWER How did you come to read his book?

TAUBES How did I come to Price? I don’t remember, actually. Somebody in the field must have recommended him.

INTERVIEWER It was after your New York Times article?

TAUBES Oh, yes, definitely. I did not read Weston Price prior to that. I have to say, by the way, that I was trying to decide how much to believe of Price's stories. I decided that if his story about migrating, tree-climbing crabs in the South Pacific was true, I would believe everything Price said. This was my calibration. Because some of his stories are wild: about how pygmies, for instance, kill elephants by slowly hamstringing them over the course of a few days. Even with his photos as evidence, they're still hard to believe. So, anyway, this being the 21st century, I googled the tree-climbing crabs , and indeed, there are migrating, tree-climbing crabs in the South Pacific. The article I found didn’t say whether the local natives hunted them by putting nets under the trees and making the sounds of coconuts falling, so that the crabs would climb back down into their nets, which is what Price wrote, but the crabs definitely exist. I decided that’s it. As far as I’m concerned, Weston Price is an unimpeachable source.

INTERVIEWER That’s good to know. I really like his work, too.

TAUBES And those photos of the teeth of populations that do and do not eat sugar and white flour. Compelling stuff. I have a 2 year old and I try to keep him away from sugar and white flour just because of Price's photos. And you know, in this day and age, it's not easy to keep a child away from sugar and white flour. But it’s the photos in Price’s book that keeps me motivated: we’ve got to survive in Manhattan on a science writer’s salary. It would be nice to save the $6,000 for braces, if I could keep him off sugar and white flour. I still don’t understand how the sugar and flour can effect how the teeth actually grow in, but Price makes a compelling argument that they do.

INTERVIEWER There’s disagreement about that. Weston Price thinks it’s one thing. A professor in Illinois thinks it’s that that people who eat the urban diets have soft food, and the people who eat the rural diets have chewy food. The chewy food makes the kids’ jaws grow to be the right size.

TAUBES My problem with that is that he's making the assumption that the addition of sugar and flour removes some significant portion of the baseline diet. It could be true, but again, it’s an extra assumption. Take the Inuits, for example: one of the things I did in the course of my research was try to refute this notion that cancer didn’t exist in the Inuits until the 1930s. So I tracked down whatever memoirs I could find from physicians working with the Inuits to see if any of them mentioned cancer prior to the 1930s. And one of the things I found fascinating was that at the turn of the early years of the 20^th century, the Inuit were eating mostly their native diet. By the 1950s, they were eating tons of sugar and flour and drinking beer and other alcohol, and tuberculosis had decimated them, but they were still eating their baseline diet; it’s just that all these other things had been added on top. So they’re still eating seal and whale and caribou, but they’re also eating these Western foods. In general, it's never a good idea to add that extra assumption until you absolutely have to -- that something else critical changes with the addition of sugar and flour. Maybe it's just the addition that's the cause. That's the one thing you know for sure that happened. This is Occam’s Razor. The key thing is that cavities are caused by the sugar and flour. The simplest hypothesis is that the orthodontal problems are too. It is possible that the sugar and flour affect growth hormones -- insulin-like growth hormone, for instance -- which could have local effects on how the teeth grow in. The sugar and flour could affect bacterial growth locally and that could have some effect. Either way, I find the evidence sufficiently compelling to wonder whether my son will grow up with nice teeth if he doesn't eat a lot of sugar and candy and white flour.

INTERVIEWER Changing the subject slightly, you mentioned that the obesity center at Yale is run by psychologists. Did you ever ask Kelly Brownell how he reconciles his toxic environment view with the fact that many people in poor countries are fat?

TAUBES Not yet. I would like to lecture at Yale some day, and I’m hoping that I don’t have to invite myself. You know, I’m fairly confident that if I were to ask many of these people if they'd get me a lecture -- call them and say I'd like to come and talk -- they'd arrange it. They 're intellectually honest enough on that level. But again, it’s people like Kelly Brownell that I was thinking of when I was compiling that list of populations. And what boggles my mind is that people have been peddling this nonsense for 30 years, and they never bothered to look. They never bothered to do their research, to see if there was evidence that refuted their hypotheses. Again, this is what you do in science; you get a hypothesis, and you try to test it. So how would you test the hypothesis that prosperity causes obesity, or that our modern toxic environment, as defined by Brownell, is the cause. Let’s see if we can find examples of non-toxic populations, you know, poor populations without McDonald’s, without televisions, without remote controls, who are obviously physically active, at least by our standards. It’s funny, I was talking with Hellerstein at Berkeley. When I told him about the Pima and the Sioux Indians, and he said “Well, do they live on reservations?” Like, if they live on reservations, then that means they’re sedentary, at least relatively, compared to their previous lives, and so you can evoke sedentary behavior as the cause of their obesity. So now you have this idea that it’s not how sedentary you are, it’s how sedentary you are in comparison to how active you used to be. So like, Sioux Indians, who rode along the Great Plains and chased after Custer --- they were so active that if they only have to move onto reservations and stop riding their horses all the time, they get obese. So it can actually be a detriment to be extremely active, because then being only mildly active causes obesity.

[end of part 7/start of part 8]

INTERVIEWER Marc Hellerstein thought that the obesity epidemic was caused by people being sedentary?

TAUBES He believed that the key is whether you're sedentary compared to how you used to be. When I told him about the Pima and the Sioux Indians and this 1981 study of obesity in oil field workers, he had an excuse for everything. So the Pima and the Sioux Indians, they lived on reservations, so they could be obese because they were relatively sedentary, at least more sedentary than they used to be. And the oil field workers, well, they’re Mexican-American, so they have some kind of “thrifty” gene going. You know…this is what pathological science is: a field in which you can find a reason to explain away all negative evidence. In pathological science, it's no longer possible to refute the hypothesis. Remember, science is about trying to test your hypothesis and refute it, but in a field like this, if you test it and come up with a counter-example, the counter-example is just explained away with whatever comes to mind. Negative evidence never means anything. So you have an obese person who’s sedentary, that’s proof of my hypothesis. If you have an obese person who’s very active -- at least, compared to most people today -- the Sioux indians, for instance, who were so poor they had to walk down to the river to get their drinking water; who had no televisions, no cars; they had to walk outside to evacuate their bowels -- those people are obese because they used to be more active than they are now.

INTERVIEWER Well, that’s a new one on me. I’ve never heard that line before. They used to be more active.

TAUBES But that’s the implication of Hellerstein's knee-jerk reservation hypothesis. They may be poor, and they may be out working in the fields, so compared to us, they’re active, but compared to their former life, they’re sedentary. See what I’m saying?

INTERVIEWER Yeah, I understand the logic. I’ve just never heard it before.

TAUBES Well, the reason you’ve never heard it before is because you’ve never heard anyone have to explain why obesity was common in an impoverished Native American tribe in 1902 or in 1928. When confronted with that observation, they have to come up with an explanation so that they don’t have to question their hypothesis. I happen to challenge someone who believes the conventional wisdom unconditionally, and that’s the response I get: “Well, they’re living on reservations”.

INTERVIEWER Does he actually do research on weight, on obesity?

TAUBES Absolutely, he does.

INTERVIEWER That's unfortunate.

TAUBES This is why the field is in the position it’s in. These people believe so strongly in the calories in/calories out/gluttony/sloth combination that they no longer function as scientists. They can’t imagine the existence of an alternative hypothesis. So everything they see, they have to find a way to interpret it so that it supports what they already believe to be true.

INTERVIEWER They don’t see that they’re operating differently…

TAUBES …than other scientists.

INTERVIEWER Do they see that they’re not making progress?

TAUBES No, because that gets blamed on the obese. If you believe that obesity is caused by sloth, then the reason fat people are fat is because they don't have the moral fortitude to go run ten miles every day the way you do.

INTERVIEWER Well, people have been saying that for 50 or 60 years. So the fact that they’re saying the same thing now as they were saying 60 years is a sign, to me, that they’re not making progress.

TAUBES Yes, that's a very good sign, but these people don't realize they're saying the same things and doing the same experiments and making the same mistakes that their predecessors made a century go because they don't bother reading that literature. For reasons I still don't really understand, these people see no reason to pay attention to the history of their field. Imagine if physicists saw no reason to pay attention to Einstein and Plank and Maxwell and Heisenberg? I mean, these guys all lived a century ago, why would anyone want to know about them or the experiments they did? But in physics, mathematics and even biology, the history is carried along with it. As the science progresses, it takes with it the successful ideas and the students learn about the history along with the science. In obesity research, World War II just cut all of that off. For whatever reason, several generations of researchers grew up with this belief that the history of the field doesn’t matter. And so they don't even know or care that they're saying the same thing and doing the same experiments that their predecessors did 100 years ago. And then this latest generation is full of young molecular biologists, and they start the clock in 1994, when leptin was discovered. They’re not aware that they’re not making progress, because they believe that nothing of value was done until 1994.

INTERVIEWER The birth of a new world. The way I read your book about Atkins was that you seem to place weight on the fact that Atkins was disliked by people he went to school with. Did I read that wrong?

TAUBES I think that was part of it. I think the fundamental problem with Atkins is that his book emerged in 1972 , when the low-fat dogma was really beginning to be taken seriously, not just by the heart disease researchers, but by physicians and public health authorities. It was viewed as a great triumph of modern medicine. We finally understand what causes heart disease Then Atkins goes out of his way to throw the high-fat nature of his diet out there: “You can eat lobster Newberg, double cheeseburgers, and porterhouse steaks" (like my New York Times Magazine cover). The AMA always had this philosophy that even if people wanted to lose weight, they should go to their doctor and discuss it with them. You shouldn’t go on a diet without your physician’s guidance. So here Atkins was end-running all of that. Then he was saying “eat a high-fat diet. It’s harmless”. He actually said “It’s good for you." If you read Atkins, he read a lot of the papers I read. His understanding wasn’t tremendously sophisticated, but he didn’t have the advantage I had, of coming along 40 years later. For the time, he was doing pretty damned good. He believed that triglycerides were the problem, not cholesterol. He believed that insulin was a problem. He was a working physician; he didn’t have the time that I did to read all of the research, and to have the internet available to allow him to track down all of the references. But the establishment thought his diet was dangerous. And then Atkins made these claims that he had patients who consumed 5000 calories a day and still lost weight, so they also believed Atkins was a quack, a shyster trying to sell impossible dreams. And they thought this because they believed that calories in/calories out was all that mattered. They had this inherent belief that in order to lose weight, you have to restrict calories; Atkins said you didn’t. So, to these establishment nutrition types, Atkins was saying that the laws of thermodynamics can be ignored. So they had reason to think that Atkins's diet couldn’t possibly work, on the one hand, and that it would kill you, on the other. So these “responsible physicians,” as they perceived themselves to be, felt an obligation to suppress this threat to the public health. The fact that they knew Atkins personally, that some of them had worked with him and gone to medical school with him and didn't particularly like him, made it all that much more . . .

INTERVIEWER Irresistible.

TAUBES Yes, irresistible. One of the things I mentioned in my lecture was something I didn’t realize this when I wrote the book. Atkins proposed that one reason carbohydrates-restriction worked is that it stimulated the secretion of something that British researchers in the 1950s had called Fat Mobilizing Hormone. The joke is that you didn’t need a Fat Mobilizing Hormone; the thing you have to do to mobilize fat is lower insulin levels and the way to do that is to remove the carbohydrates from the diet. That's what mobilizes fat from the fat tissue. But Atkins was doing what a lot of diet book authors do, which was combing the literature for everything and maybe anything that might support his argument. He talked about insulin, but he also talked a lot about Fat Mobilizing Hormone, which was controversial at the time but not an outrageous idea. At the time Atkins wrote the book, this Fat Mobilizing Hormone had yet to be nailed down, and it never would be. The fundamental requirement to mobilize fat, as I said, is to lower insulin.
So, the American Medical Association publishes this famous article dedicated, effectively, to establishing that Atkins has no credibility and one of the ways they do it is to discuss how Atkins was wrong about this idea of Fat Mobilizing Hormone. Then in the same paragraph they also say “in order to mobilize fat, you have to lower insulin”. Then they go back to talking about how Atkins jumped the gun on Fat Mobilizing Hormone . So they know that insulin controls fat accumulation, and they say actually acknowledge it in the article, but only in the context of it supporting the argument that Atkins has no credibility. They never mention that the way to lower insulin -- and so, apparently, to mobilize fat from the fat tissue -- is to eat less carbohydrates, which is exactly what Atkins was recommending. I was writing my response to Gina Kolata's review when I first really noticed that sentence, and it jumped out at me. “Holy shit!" These people knew what regulates fat tissue, and they know what regulates insulin. They just don’t care. That’s how dedicated they were to trying to squash Atkins.

INTERVIEWER It didn’t matter whether evidence supported them or that there was something there that they couldn’t explain. It just mattered that he was wrong about something.

TAUBES All they wanted to do was establish that Atkins was not a credible source, and people shouldn’t follow these bizarre practices of nutrition, or whatever they called it. One of the things I’m curious about is whether, from here on, the American Heart Association and other health authorities will continue to refer to low-carb diets, the Atkins diet, as these fad diets. Even though, if nothing else, as I point out in the book, these diets constituted the preferred medical treatment of obesity for 150 years, or 100 years, until the low-fat diet came along. It's the low-fat diet that's the fad.

INTERVIEWER That’s an interesting point. What is the fad diet? Is it the absence of the Atkins Diet, or its presence? Which is temporary?

TAUBES The idea that you could somehow lose weight by removing fat and increasing carbohydrates is as ludicrous as the idea that you could do it by eating ice cream for any extended period of time. I’m sure there’s something about the ice cream diet that works in the short term. I’m not sure, but I wouldn’t be surprised.

INTERVIEWER Was your response to Kolata's review published?

TAUBES If you search me in the Times, you can read my response. [end of part 8/start of part 9] Her response to me reminds me a little of Mike Fumento's response to me. Did you read that back-and-forth?

INTERVIEWER Yes. This is an example of the litmus test for who the good journalists are and who the bad journalists are. In your Berkeley talk, you quoted Jane Brody: "eating pasta is a good way to lose weight." There seems to have been some sort of journalistic failure. What was the journalistic failure; what is it?

TAUBES Beginning in the 1960s, when newspapers institutionalized this idea of having diet and health/nutrition writers on newspapers, and its still the case, for the most part, today, the people who got those jobs weren’t the shining intellects on the newspaper, and the shining intellects didn’t want to be diet and health writers. If you’re a whip-smart young guy or girl who wants to go into journalism, you want to be an investigative reporter, a political reporter, or a war correspondent; you don’t want to write about diet and health. Or at least you didn't. So I think that was one of the problems. You got not very smart people; truly mediocre reporters, doing jobs that turned out to have remarkable significance and influence. I do think that Jane Brody is as responsible as anyone alive for the obesity epidemic. She just bought into this idea of the low-fat diet as a healthy diet, and her sources in New York told her that Atkins was a quack, and that fat was bad, and she never questioned any of it. I don’t know if she had the intellectual wherewithal to do it. In any other field of reporting, as far as I know, reporters are supposed to be as skeptical of their sources as scientists are supposed to be skeptical of their data. Certainly, if George Bush tells a political reporter something, that political reporter doesn’t treat it like it’s true. He might faithfully report what George Bush said, but you’re supposed to be skeptical of what government institutions tell you. So now it's 1977, the McGovern Committee and the USDA make these proclamations about what constitutes a healthy diet, and there’s simply no skepticism. (With the possible exception of Bill Broad writing in Science Magazine, which no one outside the field of science was reading.) So the government tells us that we should eat low-fat diets -- and not even learned authorities in the government, but Congressman and USDA bureaucrats channeling 30-year-old congressional staffers -- and lo and behold, all these health reporters decide it must be true. That’s the failure. In my fantasy life, I get a call from the managing editors of the New York Times and the Washington Post and the Wall Street Journal and they say they've read my book and they want to know how they can improve their health and diet reporting. Because they can see, whether or not I'm 100% right, or 80%, or only 50%, surely their reporters did something wrong. Now there's a fantasy for you.

INTERVIEWER Yeah, I agree. That makes sense. So, what would you say?

TAUBES I haven’t figured that one out yet. Get some of your political reporters to do the health writing. Get the smarter people on the paper to do it.

INTERVIEWER Well, I always thought of you as one of the very few science writers who was sufficiently skeptical. Practically none of them are.

TAUBES That’s basically the problem. This lack of skepticism. But I had an advantage. . . You’ll remember, in my first book, I got to live at a physics laboratory and I was lied to regularly by a Nobel Prize-winning physicist. His conception of truth was what he needed to be true at the moment, and what he could get people to believe. So if you called him on the lie, and he was kind of a charming fellow, he would acknowledge that he might have misled you, and then he would step back and try another lie, because it wasn’t in his best interest to tell the truth. Then I did this book on cold fusion where I spent three years, basically, getting lied to constantly by anyone who thought it was in their best interest. There was a period in my life where it was hard for me to trust anyone, because I’d just been around too many people who believed that the truth was what was convenient. I also knew, by the time I got into public health reporting, I knew what it took to do good science. So, if somebody wasn’t doing it, I knew there was no reason to put them on a pedestal. The first article I ever wrote for Science magazine was an investigative piece of an alleged fraud that had happened in the cold fusion episode -- a fundamental result that kept the field alive for another few months couldn’t be explained by nuclear physics. That alone was so remarkable -- as one of the smartest men in the world suggested to me, a physicist named Dick Garwin at IBM -- that it should have made everyone suspect fraud. If something can’t be explained by a very well-tested theory, you would question the ethics of the researcher who did the work before you’d question the theory. This is Hume's idea that eyewitness testimony is never good enough to make you believe in the existence of a miracle, because a miracle is, by definition, something that’s impossible, by all our accepted theories. It’s easier to believe that 10, 100, or 1000 people were deluded or dishonest then it is to believe that the Virgin Mary really did appear in Times Square or whatever your miracle of choice is. Anyway, I’m writing this story for Science about an alleged incidence of fraud that took place at Texas A&M, and the editor had a Master’s degree in mathematics from Texas A&M. He took it upon himself to call some of the professors I interviewed, and he would ask them if they really believed what I said they believed, which was not completely unreasonable, considering I'd never written for the magazine before. But then he would say to me, “Well, I talked to professor so-and-so, and he says he doesn’t believe what you said he believed”. And I would say, “Well, this is six months after the fact. Let’s go look at the lecture he gave six months ago, and here’s the paper he wrote on the lecture, and here’s the sentence where he says what he believed then, which is what we're writing about." And this editor's response was "how could you question him? He’s a PhD, and you’re not."

INTERVIEWER That’s rather unfortunate.

TAUBES This was around 15 years ago; it’s still one of those memorable moments in my life.

INTERVIEWER This guy was an editor at Science magazine?

TAUBES An editor for the journal Science.

INTERVIEWER Oh yeah --- that’s really bad. Really, really bad.

TAUBES It’s a common response you see ---- what right does Taubes have to say this stuff? He’s not a scientist. It’s like "The Wizard of Oz," where in order to be a scientist or be taken seriously in science, somebody has to first give you the piece of paper?

INTERVIEWER On a scale of sharpness of criticism, from one to a hundred, that ranks about a zero.

[end of part 9/start of part 10]

TAUBES I’m definitely more skeptical; even the science journalists I really respect, some of my friends, sometimes I read their stuff and I say, “They just weren’t skeptical enough”.

INTERVIEWER Yeah, that’s my reaction to at least half of the science journalism I read. One of my next questions is, did writing your book radicalize you? But it sounds like you were already radicalized!

TAUBES What do you mean by "radicalize me"?

INTERVIEWER Did it make you even more skeptical of the establishment? Obviously, you were skeptical to begin with.

TAUBES Again, the obesity stuff, in retrospect, is mind-blowing to me. Until I did the research for the book, I never questioned the idea that obesity wasn’t about calories in/calories out. That it wasn't about overeating. Then you realize that there's no arrow of causality in the law of energy conservation. That the correct interpretation is that we overeat because we get fat, we don't get fat because we overeat. Now that's a remarkable shift in causality, and yet nobody picked up on that for fifty years. And nobody seems to care even now. There's one guy I know of -- Robert Lustig at UCSF -- who has written papers discussing this causality issue and getting it right. And nobody else seems to care. It blows my mind that an entire field of research could get it so wrong.

INTERVIEWER But you’d seen Nobel-Prize-winning physicists get it very wrong.

TAUBES But what they were getting wrong were subtle; yes, they’d believe incorrectly that they’d discovered elementary particles, but what they were doing was a real subtle game. What they were misinterpreting were extraordinarily subtle aspects of the data. This obesity screw-up is fundamental; it's like a grade school error in the interpretation of the laws of thermodynamics. And I made it as well, up until five years ago. I never thought differently. But what radicalized me is that they don’t care. If they successfully ward off my threat to their beliefs, then I’m in a very dangerous place. Then it’s, like I said, where I end up a bitter demented old man, one of those guys who’s muttering to himself all the time that they, the establishment, didn’t listen to him...

INTERVIEWER I wondered, too, what other books your book resembles. To me, that’s an interesting question. But there's many possible answers, and one is “Well, there’s been a long list of books that talk about this scam or that scam, and some of them are awful and some of them are pretty good. One of the ones that’s good is that great cholesterol scam, The Great Cholesterol Con. that's a good book. But your book is different, because unlike the author of that book, you really had something to lose. You were a respected science writer who could expect to receive many more assignments in the course of a lifetime and write many, many more times for the New York Times in science, and so forth, and might write other books. For a writer in that position --- this is an incredible book, because…

TAUBES I actually didn’t think --- and this may be my own ignorance --- I didn’t ever think of it as endangering my career.

INTERVIEWER But you clearly have more at stake…

TAUBES I always knew I could write about other subjects. I could go back to writing about high-energy physics; I like it. There’s a new accelerator turning on; there’ll be something to write about. I would have to compete with the whole new younger generation of whiz kids who may be better prose stylists than I am, but I could do it. What stuns me is that people may not take me seriously enough to refute me, to ruin my credibility. That’s what bothers me, not that they could ruin it. Here’s a book that might be similar, OK? Not in terms of prose style, or beauty of presentation, but like The Best and the Brightest. A book that came out during the Vietnam War and exposed the sort of irrationality of it. When I was writing my cold fusion book, I read A Bright and Shining Lie and I read Randy Shilts’s And the Band Played On. I thought we’re all writing about human idiocy. Shilts’s book was particularly important, because it came out at a time when it could still make a difference, when people still had to change their beliefs. So Shilts actually accomplished something. And A Bright and Shining Lie was an extraordinary book. In my fondest dreams, I couldn't imagine writing such a book. But maybe my book may be akin to book And The Band Played On and The Best and the Brightest . Those are books that revealed the establishment’s erroneous beliefs and how they were misleading us, and they did so at a time and in a way that could actually help set us on the right path. You use the term “We were misled”; we were literally misled. Not deceived; we were just led down the wrong path. Often, when I think about this, I imagine this situation in the 50s and 60s, when there were these dual paths that could be followed; two paths through the woods, and the establishment took us on this low-fat path. What I had to do when I did this research is I had to back up, back up, back up until I got back to the woods, to the point where the two paths diverged, and see the existence of the other path, and see where that one led us. Did that get to a place where we could actually understand what was going on, and maybe prevent and cure these diseases.

INTERVIEWER Well, when I think about precedents for your book, sometimes I think of The Jungle. In the sense that there’s this awful thing going on, and it’s in the interests of many people to keep it going on, but it’s really outrageous. It’s very different, in a way, because the meat-packing industry was very obviously horrible, whereas what you’re saying went on isn’t obviously horrible; it’s more complicated than that. But on the other hand, your thing is kind of a bigger issue; it’s everyone’s health. It's not just everyone's health, it’s everyone’s mental health; it’s horrible, being fat; it’s awful every day, not just when you die.

TAUBES I have friends and acquaintances who will often say to me at dinner parties, “Well, who really cares about this stuff, because you want to live well, not just eat the healthiest possible meals." But they’re not overweight, they don’t have cancer running in their family. Their life, rightfully, is a balance between living healthy and living well. But the problem always is that even though those people want to live well, they eventually get to the point where now they’re sick. Inevitably, when you get to that point, you wish maybe you hadn’t lived quite so well. Unless you’re lucky and you have that massive coronary on the golf course, or on your lover, so you don’t have time to think about it. But both my mother and my father died from long, extended, horrible illnesses. There’s a point at which you think, “Maybe if, 30 years ago, I had lived less well and more healthy, I wouldn’t have to go through this," but I guess we all have to die of something.

INTERVIEWER Well, I think understanding what causes obesity is a big, big issue. For the medical establishment to be misled, or deluded, to get the wrong answer and insist on it, is a tragedy. It’s a gigantic tragedy, because of all of the people who are overweight. Not the people who are 5, 10, or even 20 pounds overweight. The people who are 50 or 100 pounds overweight.

TAUBES We’re drowning in diabetics; we’re drowning in obese patients. Obviously, physicians and obesity researchers and public health authorities haven’t got a clue. By what right does anyone flippantly discard an alternative hypothesis that can explain the evidence? You would think they'd be desperate for such a thing. You know, this guy presents a compelling argument that we got it wrong. Well, Jesus, we obviously got it wrong. We haven’t cured a person in 100 years! Let’s take him seriously!

INTERVIEWER Let’s praise him for raising an idea that hasn't yet been proved wrong.

TAUBES We’ll see how it goes. Again, I'm obviously impatient. I expected people to read the book immediately and to send me emails; somebody at NIH saying “Come on down here! Talk to us about what experiments we should do.” If the book has any effect over five years, ten years, that probably would be a great accomplishment. In a sense, I wrote the book for graduate students and post-docs, so that when their professors utter nonsensical statements, like the only that matter is calories in/calories out, these kids will challenge them. It could take awhile; it’s only been a few months.

INTERVIEWER When their ideas failed to produce better ways of losing weight, and fifty years had passed, it was understandable, but not for scientific reasons.

TAUBES As I say in the book, they’re not scientists. The funny thing is, they’re not trained as scientists; a lot of the people involved in this field are nutritionists, medical doctors, public health people, and that’s a different way of thinking. I had an apprenticeship in science; I got to spend my ten months at this physics laboratory; I got to delve into cold fusion for three years. In a way, you have to get an apprenticeship in how to think like a scientist. You have to be mentored. It’s not how we naturally think. These people, it’s not part of their training in any way. Not that there aren’t scientists who started as MDs. There are these yellow berets, the guys who went to NIH instead of Vietnam in the late 60s and early 70s, so suddenly, they're MDs who were working around biologists and PhDs, and they were taught how to do good science. But it’s not how we naturally think; these people just didn’t do it. Then there’s this whole world of nutritionists and epidemiologists who, for whatever reason, far too many of the senior figures in those fields don’t have a clue how to do science. So they passed on this sloppy way of thinking to their students, and the whole field is permeated with less-than-rigorous thinking.

[end of part 10/start of part 11]

INTERVIEWER What happened when you met with the [UC Berkeley School of Public Health] epidemiology students?

TAUBES Again, it was a little discouraging, only because these kids really want to do good, they want to make a difference in the world. That’s why they go into the field. They want to have an effect. But as I say at the end of the book, to do science right, your primary motivation has to be to learn the truth, and if you’re infected with this desire to change the world, to save lives, it takes you away from the fundamental motivation, which is to get it right. If you want to save lives, then you want to get the word out as quickly as possible. You don't want to wait ten or twenty years or more for definitive evidence, for the rigorous tests to be done; you want to give advice and tell people what you've learned, even if you only think that you've learned it. Doing science right takes a long time. So does good journalism. You can say the difference between my book and Gina Kolata's book is -- not counting whatever difference in intellect we begin with-- my book took five years, more than full time, because I wasn’t going to say anything until I was certain that what I was saying was sound. She wrote her book in two years, part-time, while still working full-time as a New York Times reporter.

INTERVIEWER Yeah, they’re very different.

TAUBES Even when I was writing magazine articles, if I was in danger of missing a deadline, which was often the case, I would ask my editors, “Do you want it on time, or do you want it right?”.

INTERVIEWER There was a managing editor at The New Yorker, one of the first, whose motto was “Don’t get it right, get it written."

TAUBES When I was a young journalist working for Discover, which was owned by Time, Inc., the philosophy was that one of the worst things anybody could do was over-report a story. Just get the facts and get it out. Except science doesn’t work like that. Science, you’ve got to get it right, and that takes time, and you can’t do it on deadline. Along those lines, I did read one of your blog entries about settling points versus set points, and I thought it might be… You know, I Google myself, as all writers do fairly regularly, so first you read all news stories that day, hoping that the Google Alert might have missed something, and then you go to the blogs.

INTERVIEWER So you read my article about the most surprising thing in your book?

TAUBES What was the most surprising thing?

INTERVIEWER That you didn’t agree that set points play a role in homeostasis.

TAUBES It’s funny – the more I think about it, the more Claude Bernard was brilliant. (I'd like to do a book on Claude Bernard, but probably can't because my French is terrible.) In particular, this idea of the milieu interieur? The fundamental idea of homeostasis is that the body works to maintain the stability of what he called the milieu interieur, which gets translated to “internal environment”. What he meant by that is the conditions right outside the membrane of the cell, every cell in the body. So the body wants to maintain stable this internal environment -- the pH, the blood pressure, the ionic potential, everything -- of the cell itself. So it wants to make sure that the environment the cell lives in -- every cell -- remains relatively stable. in that sense, we're this huge symbiotic organism made up of billions of individual cells, and homeostasis functions to keep the conditions that these cell live in stable. So each cell lives in this little isolated world, and it’s got to see stable conditions, or it’s going to die. The idea of the set point is that there’s some central controller in the brain that maintains homeostasis, but that's naive. Rather, there's an unbelievably complicated mechanism composed of individual settling points. Like the fatty acid concentration on the interior, and exterior of the fat cell. If there’s more fatty acids on the outside of the cell membrane than the inside, then fatty acids flow into the cell, and you get slightly fatter. There’s no brain in charge. The brain may respond, and the hypothalamus sends signals back and forth, and effects changes in hormones in response to changes in the environment, but there’s so many different interrelated, interconnected feedback loops involved that to refer to a set point is to grossly oversimplify things this beautiful homeostatic system, and it directs attention away from the body, where all these feedback loops interact, to the brain. Did you ever read any books on chaos theory?

INTERVIEWER No, I haven’t.

TAUBES Well, to understand homeostasis you have to understand this concept of dynamic equilibrium, where there can be hundreds of forces acting simultaneously. And the point is, you’ve got these negative feedback loops all over the body, and they involve the brain, but on some level, the dynamic equilibrium you’re looking at is right at the cellular level. That’s where the forces converge to make us leaner or fatter. And the brain is part of these loops, but to concentrate on the brain misses the big picture.

INTERVIEWER The brain is sensitive to the environment --- sure, the set point doesn’t really exist anywhere, and sure it’s a function of about a zillion things, not all of them in the brain, sure. But the reason I like that idea of a setpoint is that it’s easy to imagine something going up and down, rather than a million things going up and down.

TAUBES But the problem is once you oversimplify, there's a tendency to believe the oversimplification. You should go back and read the papers on settling points. There were a couple, if I remember correctly, written by psychologists from the University of Chicago. You should go back and read those original papers. They’re fascinating, and the point they make, is that you don’t need the brain involved. Like we don’t think of the brain regulating blood pressure. You don’t really think of your brain regulating blood glucose. Those cycles I described in my lecture, you know, the triglyceride fatty acid cycle and the Randall cycle, serve to regulate blood sugar. Then hormones are layered on top of those cycles, and the hormones are determined, in part, by the hypothalamus, so you get the brain involved, and the sensing of the environment, but there are other ways to sense the environment, like temperature sensing of the skin, evaporation. There are other ways that we adjust to the environment without the involvement of the brain. One of the things I left out of the book, for instance, is this theory that hunger is perceived by the liver.

INTERVIEWER Perceived, or controlled?

TAUBES Perceived. Or sensed by the liver. You know, your eyes collect photons, and then they send the signal back through the optic nerve. The perception of the universe is done in the inside of the brain, but the eyes are the sense organ that collect the photons. Your ears detect sound waves, but your perception of what you’re hearing is inside of the brain. This theory says that your liver senses fuel availability and then your brain integrates the signals from the liver and registers them as hunger or the absence of hunger.

INTERVIEWER Hunger is internal. It’s like the recognition. Hunger is not something external to the body.

TAUBES Let me re-phrase it. It senses fuel ability. Then your brain perceives it as hunger and initiates --- that would be a better way of putting it. But the sense organ of fuel availability is your liver. I had some discussions with Mark Friedman, a fascinating guy, really smart. He’s at the Monell Institute.

[end of part 11/start of part 12]

INTERVIEWER Did you ever hear of Israel Ramirez? He was one of Mark Friedman’s colleagues.

TAUBES That’s the Ramirez you quoted. I forgot that. I didn’t put it together, because I always knew him as I. Ramirez. I saw that, too --- here’s my other carp, and then I’ll stop. It doesn’t do any good to have somebody discuss my arguments who hasn’t read the book.

INTERVIEWER I asked him to, so it’s my fault.

TAUBES Then other people see someone refuting me, and they don’t care whether they read the book or not. You know what I mean?

INTERVIEWER Well, I appreciate that it would be irritating.

TAUBES The problem is, you can’t ask Mark, because I know what Mark thinks of the book. He’s read it --- he read it in draft and critiqued it for me. He’s in the book, so you can’t ask him, either, even though he would probably say tremendous things about it. You have to find people whose research I don’t discuss. I’ll tell you one guy who would be worth knowing what he thinks: George Wade. He’s at U. Mass Amherst. He did these rat experiments. He’s an expert on animal reproduction and I sent him a draft of the book, and I didn’t ask him to critique it, but I was asking him a fact-checking question and I sent him a copy of the book and he never got back to me. I don’t know if he read it or not. I’d be curious what he thinks, because he was my revelation, Wade. He shifted my paradigm.

INTERVIEWER You said something about that in your Berkeley talk.

TAUBES He was the one who got me to realize that we overeat because we get fat; we don’t get fat because we overeat. That’s the paradigm shift, the literal paradigm shift. He’s describing his ovariectomized rat experiments to me. That’s how he did it.

INTERVIEWER Do you know about someone named Michel Cabanac?

TAUBES Yeah, I read a lot of Cabanac's stuff. I forget what the details were. I only remember that I was disappointed and decided that he was missing the point.

INTERVIEWER Well, he had a big effect on me, at least. His idea is that I’m sure there’s a set point, but that’s an old idea. The new idea is that the set point depends on what you eat. He had some ideas about that.

TAUBES Well, that’s the thing. There is a settling point, whatever you call it. The weird thing is that insulin regulates the settling point. It obviously goes up and down. It obviously goes up, anyway.

INTERVIEWER He might not disagree with your book. I asked him “Can insulin regulate the settling point?” I thought that was unlikely, but he didn’t; he thought, “Why not?”

TAUBES Insulin levels correlate with weight, with fat. The question is whether insulin goes up because we get fat, or we get fat because insulin levels go up. There’s always two ways of interpreting the observations in this business. So the establishment viewpoint is that insulin goes up because we get fat. I tracked that belief down to see if there was evidence for it, and indeed, there’s not; there’s a sort of misinterpretation of these experiments done by Ethan Sims 40-odd years ago. On the other hand, it's easy to show that you can manipulate insulin levels by manipulating the carb content of the diet. If you manipulate the carb content of the diet, then the question becomes, does insulin and the weight still track? So the hypothesis is insulin regulates the settling point and the question is how do we test that rigorously to find out of that's indeed what's happening.

[end of part 12/start of part 13]

INTERVIEWER Well, my book came out of an accidental observation, which is that I lost weight when I drank sugar soft drinks. I lost weight, not gained weight. That happened in Paris, and I came back to Berkeley, and I found out it was the sugar. In other words, if I drink unflavored sugar water, I lost weight. This is what’s not so obvious, right? But Israel Ramirez, who I mentioned a few minutes ago --- his experiments with rats are what led me to this discovery. Because I don’t think most people would have thought it was possible to lose weight by drinking Coke, or whatever. But it has to be unflavored. Anyway, the effect never wore off. I drank sugar water for three years, and my weight went down and stayed down. There was no sign that it was ever going to wear off. So this seems to me to be a big problem with your theory, which is that I did something which obviously raised my insulin level, sugar water. I didn’t measure it. I lost weight and not only did I lose weight, but I kept the weight off, and I lost it without being hungry; I was less hungry than usual. I mean, you’re right, you know, set points, settling points, who cares. . .

TAUBES It’s important to think of it as a settling point. Because it’s important to have this concept of dynamic equilibrium. As long as you’re thinking about what’s happening in the brain, which is what set point implies. My question is, what did the sugar water do to your fat tissue? It should have caused you to accumulate fat, or at least hold on to the fat you had, according to what I know of the underlying regulation of fat tissue. The question is, why did it do what it did?

INTERVIEWER I was less surprised than you are, or than most people are, let's put it that way, because I was led to this observation by a theory. I had a theory which pre-dated all of this. I was kind of surprised my theory was so helpful, because it hadn’t been that helpful before. But, lo and behold, it really turned out to be helpful and it led me to other ways to keep my weight off, and I’m still way down from where I was.

TAUBES What I ask when I talk with these people. What I say is: Look at the regulation of fat tissue. The question is, how can you lose weight, or gain it --- how can you gain weight without either increasing insulin secretion, or increasing the relative insulin sensitivity of the fat tissue to the muscle tissue. Basically, the way we work, at least if you believe the biology that I describe, is that as we secrete insulin in response to the carbohydrates we consume and the insulin works, among other things, to facilitate the movement of glucose into the cells of your muscles and other lean tissues. But blood sugar is kind of toxic, so your muscle tissue doesn’t want the insulin pushing all this blood sugar in, and it becomes insulin resistant. Your fat tissue now remains insulin-resistant, because your body doesn’t like to waste fuel. So if you eat a high-carb diet, your lean tissue takes up some of the glucose for fuel, and the rest gets dumped in your fat tissue, and your fat tissue remains insulin-resistant for a long time --- far longer. Because once your fat tissue becomes insulin resistant, then you just become diabetic; you have no place to put the glucose. You just pee it out. That’s the last resort, because your body doesn’t want to waste fuel.

The thing that Rosalyn Yalow and Solomon Berson reported forty years ago is that organs respond differently to high levels of insulin, and they get insulin resistant at different periods. One of the things I put into a paragraph in the book is that I can imagine a scenario where fat tissue becomes insulin resistant prior to muscle tissue, and the result would be anorexia or bulimia. The person would eat a meal and would have no place to store the calories temporarily. So they would either lose their appetite and not be interested in eating at all (anorexia), or they might just throw it up afterwards. Because they have no place to temporarily store the calories that aren’t being used immediately. Bulimia would be another option. A third option would just be to get on an exercise bicycle and ride for three hours and burn the calories off -- be Lance Armstrong, in effect. So what I’m trying to figure out is what did the sugar water do, unflavored? And it’s interesting --- the idea that it’s unflavored might disconnect some of the sort of Pavlovian responses that you’ve developed.

INTERVIEWER Yeah, I think that’s what was key. The reason I lost my appetite in Paris was that I was drinking unfamiliar sugar water. I think this is the reason that so many diets work in the beginning: because people eat unfamiliar food. Once the food becomes familiar, the diets don’t work so well.

TAUBES This is the problem with anecdotal evidence. The idea that oil could suppress your appetite I could understand, because, as I said in my lecture, you need alpha glycerol phosphate to fix fatty acids as triglycerides. You get the alpha glycerol phosphate from eating carbohydrates, so if you only ate oil it would be shipped off to the fat tissue as triglycerides, then broken down by lipoprotein lipase into fatty acids, but those fatty acids couldn't be stored in the fat. So it would raise the fatty acid level in your blood, and your body would switch over to burning fatty acids, and this would effectively suppress hunger. That makes sense. But I can't see why unflavored sugar water would be any different than say, Coca Cola itself, which is just flavored sugar water, for all intents and purposes.

INTERVIEWER Well, when I talked about it in the beginning, I was using fructose.

TAUBES Well, pure fructose, I can also understand. Friedman and Ramirez did an experiment showing that fructose suppresses hunger apparently because it is metabolized in the liver and they believe that the liver monitors fuel status in the body…

INTERVIEWER This is very interesting: someone who is not dedicated to my being wrong.

TAUBES I’m open-minded.

INTERVIEWER Your book proved that.

TAUBES The experiments that Freedman and I think Ramirez did to demonstrate that the liver must sense hunger, must sense fuel availability, is they did intravenous infusions of fructose, Fructose is metabolized only in the liver. It’s not metabolized in the brain. So they infused fructose into the blood stream of rats and it suppressed eating behavior. That’s one of many experiments they did that suggested that somehow what we sense as hunger is being communicated by the liver. It’s always made sense to me. So if you only use fructose, and you don’t get an insulin response to fructose, it would make sense that it suppresses hunger. In my book, I discuss the hypothesis that whatever prompts an insulin response is what causes us to get hungry. So, the fructose, I can understand. Actually, if you’re now eating real sucrose, that’s where it gets complicated, because with sucrose, you’re going to get an insulin response. Unless the fructose component outweighs the glucose, but then, what is it about the absence of taste? Why would Coke make you fat, and sugar water not?

INTERVIEWER Well, first it was it was that flavorless fructose worked. Then it was flavorless sucrose worked. Then it was flavorless oils work. Then it was flavorless any food worked, in particular flavorless protein.

TAUBES When you talk about flavorless protein, what do you mean? The oils, I understand; the fructose fits with everything I know. The sucrose starts getting tricky. What do you mean by flavorless protein? Give me an example.

INTERVIEWER Oh, for example, eating chicken holding your nose clipped. It’s flavorless in the sense that you don’t smell it.

TAUBES That’s interesting. Remember I told you that Jaques Le Magnen started his career studying olfaction (because he was blind). He was curious why the smell of a particular food can go from being very pleasurable when you're hungry to being nauseating when you're full. The example I used in the book was the smell of a cinnamon bun cooking. You can imagine that being unbelievably enticing when you’re hungry, and then nauseating if you’ve already eaten three cinnamon buns. Le Magnen moved from that to asking similar questions about the taste of a food, which he thought was determined by our level of hunger. It's conceivable that if you don't taste a food it somehow works to suppress hunger, but I have no idea why.

[end of part 13/start of part 14]

TAUBES Now here’s one question for you, you know the Freakonomics guys, right? Did you read their last column on obesity?

INTERVIEWER About bariatric surgery?

TAUBES Yes. In particular, the last two paragraphs, about their recommendation that fat people, in effect, carry around something nauseating. I felt like I was reading something from 150 years ago, where they were using anal suppositories to try to cure obesity. Do you remember those paragraphs?

INTERVIEWER Yes, I do.

TAUBES They're saying, “let’s get fat people to have willpower, like we do." Here’s a way they could do it, they could carry some nauseating-smelling thing in a pouch around their neck, and whenever they find themselves going to the refrigerator, they could open it up and smell it.

INTERVIEWER I think they were trying to illustrate the concept of commitment device.

TAUBES I got what they were trying to do, but…

INTERVIEWER You’re saying that trivializes the problem.

TAUBES More than that. I'm saying it misses the point entirely. It's not about how much they eat. Remember, you can starve fat animals, for instance, and they’ll die with their fat tissue intact. It’s not about how much they’re eating; it’s about the regulation of their fat tissue. And if you don't understand that, you're not doing anyone a favor by discussing it publicly. If these guys are going to write about this subject, and they're so now so influential and noticeable, they should have some understanding of what's actually going on physiologically. We talked earlier about how I can become flabbergasted -- your words was "radicalized" -- by the idea that people can write about obesity without stopping to think “what’s the mechanism? Should I know anything about the underlying biology?” And again, I never did until the last five years. It was only when I did the research for the book that I realized that you have to actually pay attention to the underlying biology -- the hormonal and enzymatic regulation of fat tissue -- or you can't understand what's going on. Imagine writing about growth defects, about gigantism or dwarfism, without caring about the hormonal regulation of growth. If the Freakonomics guys are going to write about obesity in the New York Times, then maybe they should read my book (he said, ego-maniacally), so they know what they're talking about. And since I don't know them personally, maybe you could...

INTERVIEWER I’ll recommend your book to them. It’s great that you were invited to Berkeley; that shows people trust you. The fact that they invited you means you’re not a heretic, you’re not off the reservation, you’re a respectable person. The fact that you continue to write for the New York Times, that’s very good. Every article you publish from now on will push your book forward, will push your case forward, will say that you are a serious person who is respected by serious people. Just maybe, just maybe, this is one of the cases where the authorities were wrong. We’re all familiar with this happening in the past, and maybe this is just another case. For everybody but a tiny faction of people at the top of the health establishment, I think they’re perfectly fine with the idea that the authorities are wrong. I think that the lack of progress on the obesity epidemic is making more and more people dissatisfied. That’s just a guess. More and more people, outside of the people who are responsible for the current policies.

TAUBES I think that's true, but there’s this contrary effect that happens. I said this in my lecture. The science I'm trying to get across can be accepted up until the point at which I say the the word carbohydrate, and then people shut down, and they think “Oh, it’s that Atkins stuff again." Their minds close and they turn around and go back to their lives. Anyway, I look forward to seeing the interview and getting your book and reading it. I enjoyed this. Again, I like nothing better than talking about this stuff.

INTERVIEWER I learned a lot from our conversation. I’m sure my blog readers will enjoy this.

[end of part 14]

Dieting and Diet Update 1/2008

2008-01-27T10:36:00.000-08:00

One of my early blog postings was about my renewed attempt to lose some weight and get fit.

That attempt went nowhere. I thought that making it public would give me some added incentive. Wrong. A better approach might be to use stickk.com which allows you to bring in supporters and people who you are accountable to.

Well, that was February 2005. It's now three years later. It's funny, but my weight is almost exactly the same as it was then. I'm at 219 now, I was 221 then. In between though I ballooned to 235 lbs. I have lost those 16 lbs since April 2007.

More importantly, my body fat is way down. In 2005, I reported 31% body fat. I think that was a high estimate, but now I am at around 20%. I can actually see and feel ab muscles now, where I could only pretend to feel them in 2005.

My strength index at gymamerica.com has gone from 126 to 140. This partly reflects age as a correction factor, but it's not everything. I am stronger now than I was then.

I have used kind of a weight watchers formula to counting calories. Basically every 50 calories counts as a point then it's modified by fat grams (adds points) and fiber grams (reduces points).
You also get modification for exercise. 100 calories of exercise gives you 1 extra point. My program is between 30 and 35 points.

I watched the Berkeley talk that Gary Taubes gave. Based partly on his book "Good Calories, Bad Calories" Taubes makes a convincing case (to me) that carbohydrates are the cause of fat accumulation.

Rather than deleting ALL carbs from my diet, I have started to watch my refined sugars and starches more carefully. I am not doing Atkins, but I think there is some wisdom there. I kind of like the evolutionary fitness/paleolithic eating approach. Lean meat, fish, vegetables, fruts are good. Go light on grains, milk products, and refined sugars.

Following is a link to an interesting article by Lyle McDonald
Determining the Maximum Dietary Deficit for Fat Loss

Bottom line on this is that you can cut calories by about 31 calories per pound of body fat that you carry without losing lean body mass. For me that's a bit over 1200 calories per day.Given that my base metabolism rate is somewhere around 2700 calories per day, this is consistent with my weight watchers approach.

Did You Know; Shift Happens - Globalization; Information Age

2007-09-26T07:20:00.001-07:00

This video is stunning. It simply makes my head spin. The changes coming in the next few years are unimaginable.

Crack the Whip

2007-09-04T20:18:00.000-07:00

The expression crack the whip has two meanings. It can be in the sense of a boss (or parent), becoming more strict about work expectations, or it can be referring to the kids game, Crack The Whip. This post is about the latter, but as applied to work.

I have been doing headquarters staff work for several years now. One of the issues with it is that you are collecting data and information from people who are not really interested in providing it. Then giving it to people who will not take no for an answer and have high expectations of the quality of the work as well as the data.

The game crack the whip is described this way on wikipedia "One player, chosen as the "head" of the whip, runs (or skates) around in random directions, with subsequent players holding on to the hand of the previous player. The entire "tail" of the whip moves in those directions, but with much more force toward the end of the tail. The longer the tail, the more the forces act on the last player, and the tighter they have to hold on."

So what happens, is a person several steps removed organizationally has the task to put together some information. Each person has to clear the information with his boss before it can move up the chain of command. Everyone is busy, so it is sometimes difficult to get an appontment. Typically, in the headquarters function, we have given the business units as much time as we dare, recognizing that once the data comes in, we still have to analyze it.

Anyway, as the data works its way up the chain of command and time grows shorter, anxiety increases, the data comes in late, and the headquarters guys end up working until the wee hours trying to incorporate the late data and come up with a coherent story.

This is not to say that HQ people are saints, just that being the last one in a long chain is really hard.

Best T-Shirt Folding Video Ever

2007-08-02T07:40:00.000-07:00

This one is aimed at Cooper and Will as they prepare to go out on their own, and also so that I have it archived.

Being able to fold a t-shirt in 2 seconds is a good thing.

Inbox Zero

2007-07-26T15:40:00.000-07:00

Merlin Mann of 43Folders fame has a philosophy called Inbox zero. He gave this talk at the Google campus in July 2007. It's worth a listen, but if you don't have time, his advice boils down to dealing with your inbox everyday. Every mail gets one of 5 things done to it:

Delete (or Archive) - Don't spend a lot of time on building archive folders. Use built-in search capabilities to find things
Delegate (Forward to someone else)
Respond (keep it short) - Appropriate response length is good. My comment is to put important content into the subject.
Defer (Put into a pending folder) - something that you check periodically to see if it has resolved. I use flags in Outlook to keep track of my deferred actions
Do or capture a placeholder for it (such as a calendar or a task)

General principles:
Do email less (unless of course your job is real-time)
Do email on a schedule. Turn off mail arrival signals, then once per hour process it using the above five actions. Go back to work.
Filter junk email (especially spam, but also those non-critical listserv notes, etc.)
Don't fiddle - focus on getting your stuff done, not playing with your email organization

Take this advice and be productive.

Plans, Goals, Forecasts, and Estimates

2007-06-12T18:46:00.000-07:00

This entry on the Overcoming Bias blog got me thinking.

Bosses just want the number.

I see a lot of confusion between planning, estimating, goal-setting, and forecasting.

Forecasting
Forecasting as often used in business is simply giving someone the number that represents business performance. Forecasting accurately is impossible, except maybe in the very short or very long term. Nonetheless, you still at some point need to come up with a number. Forecasting is best done using probabilistic techniques and reporting events as probabilities. Simply predicting a number, even if you are right is of little value in most circumstances.

Can you imagine a weather forecaster simply saying, "Rain"? Without a percentage and a timing, it's simply not a real forecast.

Estimates
Likewise when you estimate business performance, wouldn't it be better to say, given the manpower and marketing budget, there is a 10% chance that we can sell 10,000 units, and a 90% chance that we can sell 8,000 units. Wouldn't that provide more information than just 10,000 units. It is a richer way of expressing a "forecast" and helps put reality into the process of planning for contingencies.

Goal-Setting
Ah, but goal-setting is important and helps people keep focused. That is true, but goals are not good forecasts. Also the goal setting process is usually based on an arbitrary standard, and negotiated without good information. There's a lot of push, pull, and sandbagging that occurs. Any resemblance of a goal to a forecast is unintentional.

Plans
Plans set up a sequence of events or actions that can be taken towards achieving those goals. Plans like forecasts are never accurate, but they do help clarify your path. Plans can and should include resources, cash, timing, contingencies, and risks. There is usually a number that comes out of it, but that number is never a good forecast. Never. No never.

I have two references to point you towards:
The first is Why Can't You Just Give Me The Number? An Executive's Guide to Using Probabilistic Thinking to Manage Risk and to Make Better Decisions by Pat Leach. If you care at all about the topic in this entry, buy the book. In fact, buy a few and give them to your bosses and colleagues. Pat explains in straightforward terms why probabilistic approaches are better. (Disclaimer: Pat and I worked together at Texaco. Chevron does a lot of business with his current employer, Decision Strategies.)

The other is The Strategy Paradox: Why committing to success leads to failure (and what to do about it) by Michael Raynor. In particular, chapter 5, "The Limits of Forecasting" is really good. Other parts of the book didn't quite work for me, but that chapter should be required reading for anyone in business.

Why Paying Off Your Mortgage Early Might Be A Bad Idea

2007-06-04T15:06:00.000-07:00

I work with portfolios of real assets. One of the basic concepts of portfolio analysis and management is that you must know what you value. Very seldom does an organization have one single goal that it pursues to the exclusion of all others.

It is a useful framework for looking at the mortgage problem that I wrote about earlier.

If your single goal in life is to minimize the amount of interest you pay in your life, paying off your mortgage early may be a good strategy. For most people their house loan is the biggest loan they will ever get, typically paying hundreds of thousands of dollars in interest over the life of the loan. These are big numbers, exagerrated by the size of the loan and the time period.

However, most people have goals besides minimizing the interest paid. If you take it up to a higher level, most people want to maximize their wealth, which in simple terms is simply money in minus money out. Money in that equation can represent any form of value including house appreciation, stock appreciation, etc. We normally also have other goals that are not financial. We look for things like free time, strong family bonds, raising healthy, happy children, pursue hobbies, travel, a circle of friends, health, etc.

In this framework, the mortgage interest expense is one part of the money out equation, which feeds into the wealth maximizing goal, which is one of many priorities that you have in your life.

In that framework, minimizing the interest paid on your house becomes a part of the overall goal of reducing costs (so you would probably choose to pay off your high interest credit cards first). That is a part of maximizing your wealth, so you might choose to invest the money instead. Then you have the less quantitative pieces of your portfolio goals--lifestyle choices, hobbies, family issues, travel, etc--any of which may have a higher priority than the financial ones.

All I'm saying is to sit back and look at the big picture before you make this kind of investment.

Do NOT Pay Off Your Mortgage Early

2007-06-03T11:16:00.000-07:00

The pay-off-a-little-more-each-month-on-your-mortgage fallacy has been around for a long time. The deal is that the numbers are big, so they are really impressive.

Yes. It builds equity faster. (But it's just converting your cash from a flexible form of equity into a less flexible form.)

Yes. You pay less interest over time. (But you lose opportunity to invest).

Yes, you pay off your house sooner. (How many of us will live in our house for 20+ years though?)

There are several ways to look at this prolem though. First, from a strictly financial perspective, the right way to look at this is to consider the alternative uses of the extra money you would be putting into the equity.

For example, a 6% loan has an after tax 4% rate. Instead of putting the money into your house, why not put it into a SP500 index fund? It will get you 8% over time (5.33% after taxes). So by putting $1000 into your house, you lose $13.33 each year. Put it into the IRA that you haven't been funding and it looks even more attractive, because it is tax-deferred (net $40.00/yr/$1000)

If you haven't paid off all those 20% credit cards, and the non-deductible 8% car loan, don't even think about putting extra into your 6% deductible mortgage.

From a risk and contingency standpoint, putting the money into your house is a low-risk way to earn 4% after taxes. At the same time, you effectively lose the use of that money. If you get laid off or need money to pay for medical bills or something, it will be more difficult to get at it. You can do a home equity loan, but now you're paying to get at your own equity.

Alternatively, maybe you take that round-the-world trip that you have always wanted to do, invest in a good personal trainer to enhance your health, or maybe get a good therapist to help you get your emotional act together. You can't put a value on those, but in any case, the pay-off-your-mortgage-faster idea is only for people who do not otherwise have the discipline to save in other ways.

It's kind of like the people who advocate extra withholding from their paycheck so they get more back in April. It makes no sense financially, but if you otherwise lack the discipline, it can be a plus.

Zachary's Pizza - The Google of the Noble Pie

2007-05-10T14:01:00.000-07:00

Zachary's Pizza is an East Bay institution. It was first started in Berkeley in about 1983 by Barbara Gabel and Zach Zachowski. Recently they opened their third store in San Ramon, CA. They have won every Best Pizza in the Bay Area award, and continue to delight.

I grew up in Chicago, so I love the deep dish style with lots of tomatoes. I believe that Zachary's is as good as it gets.

I don't know if they have a motto, but "Do no evil." seems to fit them well. One of their defining legacies is that as Zach and Barbara prepare for retirement, they are putting ownership of the chain into an ESOP trust to provide for their own retirement and and for their employees.

If you are in the San Francisco Bay area, even if you com from Chicago and are used to the great food there, check it out.

What to do about global warming

2007-03-11T11:18:00.000-07:00

I am an agnostic on the issue of man's effect on global warming. I do not deny that the earth is getting warmer, maybe even alarmingly so. I feel comfortable saying that man's activities are at least a partial cause of this warming, whether from greenhouse gases, deforestation, paving paradise, or simply pumping heat into the atmosphere.

I also suspect there are other natural factors at work. Changing orbits, long-term cycles, etc. I am concerned that a big piece of the data is being misrepresented. I am hearing more and more that this correlation and perceived causal relationship between CO2 levels and temperature may be incorrect, that in fact CO2 lags temperature increase by about 800 years typically. This bothers me.

All this is probably not relevant in the short and medium term. The linked article is an opinion piece from the San Francisco Chronicle on March 11, 2007, written by Henry I. Miller, a fellow at the Hoover Institution, a think tank at Stanford University.

Is reduction of greenhouse gases to be a penance for our past sins? It certainly is not a solution in any reasonable time frame. It would stifle economic growth and cause many hardships long before it would fix anything.

Bjorn Lomborg gave a talk at the TED Conference in 2006. He prioritized the world's problems, using input from economists, health experts, etc. Actually, as he points out in his talk, he doesn't prioritize the problems, but rather, prioritizes solutions to the world's solutions. The frame is if you had US$50Billion to spend over the next 4 years, given that you can't solve everything, how should it be spent?

They narrowed the world’s problems to 10 major issues: Civil conflicts, Climate change, Communicable diseases, Education, Financial stability, Governance, Hunger and malnutrition, Migration, Trade reform, Water and sanitation. They did it in 2004, then again in 2006.

The 2006 results are as follow:
1. Communicable Diseases - Scaled-up basic health services
2. Sanitation and Water - Community-managed water supply and sanitation
3. Education - Physical expansion
4. Malnutrition and Hunger - Improving infant and child nutrition
5. Malnutrition and Hunger - Investment in technology in developing country agriculture
6. Communicable Diseases - Control of HIV/AIDS
7. Communicable Diseases - Control of malaria
8. Malnutrition and Hunger - Reducing micro nutrient deficiencies
9. Subsidies and Trade Barriers - Optimistic Doha: 50% liberalization
10. Education - Improve quality / Systemic reforms
11. Sanitation and Water - Small-scale water technology for livelihoods
12. Education - Expand demand for schooling
13. Malnutrition and Hunger - Reducing Low Birth Weight for high risk pregnancies
14. Education - Reductions in the cost of schooling to increase demand
15. Sanitation and Water - Research to increase water productivity in food production
16. Migration - Migration for development
17. Corruption - Procurement reform
18. Conflicts - Aid post-conflict to reduce the risk of repeat conflict
19. Sanitation and Water - Re-using waste water for agriculture
20. Migration - Guest worker policies
21. Sanitation and Water - Sustainable food and fish production in wetlands
22. Corruption - Grassroots monitoring and service delivery
23. Corruption - Technical assistance to develop monitoring and transparency initiatives
24. Migration - Active immigration policies
25. Subsidies and Trade Barriers - Pessimistic Doha: 25% liberalization
26. Corruption - Reduction in the state-imposed costs of business/government relations
27. Climate Change - The Kyoto Protocol
28. Conflicts - Aid as conflict prevention
29. Corruption - Reform of revenue collection
30. Financial Instability - International solution to the currency-mismatch problem
31. Conflicts - Transparency in natural resource rents as conflict prevention
32. Conflicts - Military spending post-conflict to reduce the risk of repeat conflict
33. Financial Instability - Re-regulate domestic financial markets
34. Conflicts - Shortening conflicts: Natural resource tracking
35. Financial Instability - Reimpose capital controls
36. Financial Instability - Adopt a common currency
37. Subsidies and Trade Barriers - Full reform: 100% liberalization
38. Climate Change - Optimal carbon tax
39. Climate Change - Value-at-risk carbon tax
40. Climate Change - A carbon tax starting at $2 and ending at $20

I'm amazed to see that Climate Change doesn't even make it in the top 25. Kyoto protocol comes in at 27. I am pretty confident that if you compare this list to media coverage you would find an enormous disconnect.

I'm not saying that Lomborg is right necessarily, but I do believe that this approach beats the hell out of our current approach which is something like an "alleged squeaky wheel gets the grease" approach. It's just not a good way to run the world.

So to answer the question posed in the blog title, it seems that we should focus our resources on other higher priority efforts. Conserving is good overall in any case, and frankly, I think oil prices will continue to go up and force conservation. New energy plants should be held to strict standards on pollution of any kind. This is good stuff to keep in mind as we go into the 2008 election year.

From the TED website:
Economist Bjorn Lomborg makes a persuasive case for prioritizing the world's biggest problems, asking "If we had $50 billion to spend over the next four years to do good in the world, where should we spend it?" His recommendations - based on the findings of the 2004 "Copenhagen Consensus" - controversially place global warming at the bottom of the list (and AIDS prevention at the top). Lomborg was named one of the 100 Most Influential People by Time magazine after the publication of his controversial book, The Skeptical Environmentalist which challenged widely-held beliefs that the environment is getting worse. Now the Danish economist is taking on the world's biggest problems with his Copenhagen Consensus. (Recorded February 2005 in Monterey, CA. Duration: 17:27)

Complain to Gain - Assertiveness is good

2007-01-17T13:20:00.000-08:00

We all know this. There are sayings, e.g. "The squeaky wheel gets the grease." "Stand up for yourself," "Fight for your rights."

It is nice to see some reinforcement of this though. Here are a couple of recent examples from my family.

Not long ago, we went to a restaurant in Dublin, California called Stacey's at Waterford. (Scott Adams of Dilbert fame is one of the owners). During the course of a very pleasant meal, everyone had basically finished but one. The waitress came to remove the plates and took all but the one plate. Etiquette 101 says not to do this because the slow eater in the bunch then feels rushed. After we got home, my wife called the restaurant back to point this out to the manager (we did not want to make a fuss at the restaurant). We weren't looking for anything, but at the end, the manager ended up sending us a coupon for money off on our next visit. This worked for us, because we got some cash equivalent, and it worked for them because they (maybe) learned something, and we did go back and spend about $100 on a subsequent visit. I feel confident that they made money on the deal.

Another recent example was with Sprint cell phone accounts. We had activated texting for the kids on their cell phones and gave them a 500 message limit after which they would pay 10 cents per message. To digress a little bit, this is the biggest rip-off in the history of telecommunications. Text messages are very low bandwidth and not real-time. I am so opposed to the charges on them that it makes me see red. The kids can't live without them, etc. Blah blah. End of digression.

So one month, a week into our billing period, my daughter was at 350 messages. We called Sprint and asked them to suspend messaging. It was that way for two more weeks, then we took the hold off. Two days later she was up to over 1000 messages. This seemed insane to me. It also meant that we would have owed over $60 for the text messages. (600 messages x 100 characters max < 60 k bytes), that represents less than 1 second on my cable modem. But I digress again.

I called Sprint to find out what the deal was with the texting. Was she receiving, sending, when was this happening, and overall, 750 text messages in two days seemed ridiculously high? I wanted verification of that. I told them that if they could send or fax me a statement, that would be fine. They would not or could not do that.

The people in their call center could pull up screen by screen and tell me what time the messages were sent and received and the number that they came from or went to, but they did not want to make a print of the whole list. So I raised it to the manager. She started to read the time, date, and phone number of each one of the texts. After about 10 minutes we got to about 50 or so, and I was entering every one of them. She asked me to hold and we got disconnected. I called back, and the operator with whom I spoke informed me that there was a $60 credit on my bill.

I wasted a lot of time running around with Sprint on this, but in the end, got my money back. It was worth it, and I wonder how much money Sprint makes off less assertive people.

In any case, unless you are a self employed person who charges by the hour, it usually pays to spend some time to get what is due to you. If you are self-employed, have your secretary do the negotiating or at least the phone sitting.

Proposition 87

2006-11-05T14:07:00.000-08:00

First a disclaimer. I work for Chevron. Nothing I say here has been endorsed by Chevron, it is simply my opinion.

I believe that Proposition 87 on the California Ballot in November 2006 is overall a bad idea.

Most oil production in the United States and the world carries a "royalty." That is not unusual. California was one of the few exceptions. However, California has some of the stiffest taxation in the nation, which I suspect more than makes up for it. So this is, in essence, California enacting a new "windfall profits" tax.

Is this good or bad then? Well the structure of the tax is such that the highest payments happen when prices are high. That kind of graduation is good. there is also a limit on the total amount that will be brought in, so the tax goes away at some point. That's fine in theory. Once a tax is in place, it often gets extended or rates changed. The royalty might result in fewer barrels reduced ultimately. It depends on prices and timing. There is no chance that it will result in more oil produced.

A few problems though. First, enacting taxes on top of an already high tax burden tarnishes California's "already tarnished reputation" as a place to do business.

Second, when a company considers where it is going to work, stability, or at least perception of stability is an important consideration. California's proposition system in general reduces the stability of the economic environment.

Third, the backers of this tax make it sound as if it is a tax on gasoline. It isn't. It is a tax on crude oil production. In economics 101, you learn that taxes are borne by both companies and consumers, in some varying ratio, depending on the elasticities of supply and demand. This will have the same impact. Simply passing a law that prohibits market forces from working never works. I have heard people say that the royalty will not affect prices. This might be true in times of very high price and margins like today. But here's how it works. As prices come down, (and they will come down), the price of oil will be set by whoever has the highest marginal cost of a barrel. Anyone whose barrels cost more to produce than the price will shut down production. Cost here includes everything it takes to get a barrel out of the ground and to a refinery. As prices slide, one of two things will happen, either, the companies producing in California will shut down because their costs exceed the price, or our oil becomes the price setter. Either way, consumers pay the price.

Another issue, is that this tax mainly hurts companies with production in California. Chevron having the highest production in the state. This is sad, more than anything. Chevron is actually a really good company in the scheme of things. The company has taken a lot of heat over the years for staying in California, when the clear trend is for oil companies ot go to Texas. So this measure is kind of pro-Shell, pro-BP, pro-ExxonMobil (all of which are much bigger than Chevron).

The final issue I have with it is the direction of where the funds go. There seems little oversight or governance. It is a huge obligation for what might be basic research in alternative energy. As a California resident, I want those funds to go towards reducing my tax burden, not to finance some pie in the sky boondoggle.

Oil Prices and Supply

2006-10-30T08:59:00.000-08:00

First off, if you drive a car that gets less than 20 MPG, you have no cause to protest high prices. You are the problem.

The current high prices at the gas pumps are driven by factors that work all the way back to really basic supply and demand issues. People often say that oil is a finite, non-renewable resource. I'll buy the non-renewable part, but not the finite part. OK, oil is technically not infinite, but practically speaking we will never run out of oil.

The issue is how fast can it be produced? Today the world is producing about 85MM barrels per day. By all accounts that is with all production going full out.

Here's what will happen. When demand for oil and the world's ability to supply it are out of balacne, prices go up because demand is pushing the limits of supply capacity. Two things will happen in response. Consumers will make choices that will curtail their usage of enrgy--short and longer term structural changes; producers will ramp up efforts to deliver more.

Either that will be enough to ease the supply demand balance, or it will continue to happen for a while. In either case, ultimately the price stabilizes until there is another imbalance. If it the two effects are enough to ease the prices a bit, consumers have less incnetive to save and producers have less incentive to spend money to develop more resources.

There are a few things that you can be certain of in the absence of government interference n the free markets.

We will continue to use our technically finite supply of oil.
People will adjust their lives to compensate for the increasing cost of energy.
As cheaper alternatives appear, they will replace oil in our energy mix.

Padel (Paddle) Should Be the Next Big Sport

2006-07-20T17:03:00.000-07:00

I have played a lot of paddle and racquet sports in my life. I was a passable racquetball player and a horrible tennis player. I could always get a really good workout playing racquetball, but could never keep the ball alive long enough in tennis. Then you end up chasing the ball or having to go get it in the street. I did not have the patience for the learning curve. Just fuhgeddaboudit.

But tennis is nice, because it is outside.

In 1990 I moved to Argentina with my job. The country was in the grips of a craze for a sport called paddle (pronounced like pah del).

I fell in love with the game. It is a lot like tennis, scoring is the same, court kind of looks the same. It is normally played outside. The big difference is the walls. The court is surrounded by walls and fences--the walls are the boundary lines and they are live. Passing shots aren't--you get a second chance. You don't have to chase those passed balls. If the ball hits off the end of your racquet it doesn't end up three courts over. Serving is low, rather than high, so no more shoulder problems, and because it's low and slower, the service returner has a really good shot at getting the ball into play.

The learning curve is much lower and even a novice player can get a decent workout the first time he plays. The sport is big in South America, Mexico, and Spain. The court is smaller than a tennis court (its 33X66 feet), and you don't need much room around it--just a place to get in and out of the court.

What's the problem here then? Well it's the usual chicken and egg thing. It is hard to find a court, equipment is not easy to find, and good luck finding a partner or opponent.

Following is a descripion of the game that highlights some of the differences between paddle and tennis.

Paddle

A Brief Description

Paddle is a tennis-like game played with a solid paddle, on a slightly smaller court with walls and fences around it. In Argentina, paddle is normally played as a doubles game. Scoring is the same as in tennis. The lines painted on the court are in the same pattern as a tennis singles court, and they mean the same thing.

The main differences between tennis and paddle have to do with the walls. In the back, and extending partway down the side is a concrete or brick wall 4 meters high. On the sides, in the center part of the court is a chain link fence. It is normally either 1.5 or 4 meters high. Essentially, the fences and walls can be thought of as a vertical extension of the back and side lines. If the ball hits a wall or fence on the fly, it’s out (there is an exception to this though, Exception No. 1). If it hits after one bounce it’s still alive (there’s an exception to this too, Exception No. 2).

Exception No. 1 is as follows. I said that the walls and fences are like a vertical extension of the lines. The exception is that you can hit the ball against your own back or side wall on the fly (not the fence). This allows a player to smash the ball into his own back wall as a last resort when he can’t get back fast enough to make a “normal” return.

To put the ball into play, the server bounces the ball, and hits it to the service court diagonally opposite from him. The ball must be below his beltline when it’s hit. It must bounce in the opposite service court after crossing the net, and it can’t hit the wire fence even after bouncing (this is exception No. 2). Rules for double faults, etc., are basically the same as in tennis. There is one trick to watch for; what would otherwise be a let serve, isn’t, if it hits the wire fence before bouncing for the second time.

The person returning the serve must let the ball bounce once before hitting it.

Miscellaneous:

• You don’t have to use the tether on the paddle. Therefore, you can switch hands if you want.

• If a legal shot, after bouncing on the opposite court, leaves the area of play, the point goes to the team that hit it.

• As in tennis, a “Murphy,” i.e. hitting the opposing player with the ball, goes to the team that hit the ball.

• You can normally tell whether a ball hit the floor or the back wall first by its spin. If the ball rebounds strongly towards the net, it was long. If it kind of dies, it was good. If the ball isn’t spinning, it hit at the intersection of the walls and was therefore good. Bounces at the side walls can often be determined similarly.

Flag Burning

2006-06-28T07:12:00.000-07:00

So here's the deal.

What makes America great is that we have a diversity of views and, more importantly, that people are FREE to express those views. The principles upon which our nation are founded recognize that govenment does not GRANT freedom, it can only take it away.

I hate that people want to burn the flag and that they believe that is the best way to express their views. But at the same time, I believe that is their right, unless they are breaking local fire safety ordinances, endangering others, or impinging on others' rights.

A flag burning amendment is simply the wrong approach to this issue.

Like the gay marriage amendment, this is a bill that was pushed through congress in a transparent attempt at election year labeling. You will begin to hear it soon, "Not only is my opponent pro-gay, he is also for flag burning."

In any case, the whole point of this country is that you CAN burn the flag. Removing that right diminishes us.

Amazing Slide

2006-06-10T16:53:00.000-07:00

This is an incredible chart showing George Bush's amazing slide since his 90% approval rating following 9/11. You can argue that there was nowhere to go but down and that is true. Now there is nowhere to go but up.

His administration has been based on trying to get a series of short term feel good wins, while they ignored the principles that made America great.

This is a Marathon not a sprint. I believe that history will not be kind.

Stolen Elections

2006-06-07T09:26:00.000-07:00

Imagine the Republic of Kazbekluchistan. They have moved towards a representative democracy, but of course they need to establish a democratic tradition.

They have observers for their national elections because there is great concern that the currently elected president will use his powers and influence to manipulate the elections.

Going into the elections a number of irregularities are observed: the government changed rules to prevent people from receiving their absentee ballots, People were illegally removed from voter rolls, last minute changes prevented people from voting at all.

On election day, areas that were favorable to the contender had severe shortages of voting machines, some areas, known to be favorable to the current president had unrealistically high turnouts, while other areas had unrealistically low turnouts. Some areas even blocked out the official observers citing security emergencies. The people running the elections were closely affiliated with the current president.

The majority of the "anomalies" were in favor of the ruling party. There is good evidence that the ruling party gained over 300,000 votes through these anomalies, while the election was decided by less than 100,000.

Kazbekluchistan is a fictional place of course, but the circumstances are not. The above describes what happened in Ohio in 2004, handing George Bush a second term.

It is disgraceful. If this happened in another place we would shake our heads and say "Those Kazbekluchistanians." But it happened here, here in the United States of America.

Robert Kennedy Jr. has a compelling article in Rolling Stone magazine, "Was the 2004 Election Stolen?" Why didn't the big news sources pick this up? Why is the Rolling Stone the only news source that has really picked up on this? Why not sooner? Some days I'm not too proud to be American.

I still think America is a great country, full of people of principle, who believe that stealing elections is a bad thing, even if their guy wins as a result. It's sad. We used to stand for something, more and more it seems that we stand for winnning at all costs. I hope that somehow we can find our center again.

Loss

2006-01-14T14:17:00.000-08:00

Continual loss is a fact of life. That sounds really harsh, but it's true. From the day you are born, you begin to leave innocence and youth behind. When we are young, the loss has some very powerful compensations. Wisdom replaces innocence, strength and ability replace youth.

At some point, growth in wisdom tapers off, but it does grow until, perhaps, dementia sets in. Strength begins to decline shortly after you get it unless you work hard to maintain it, in which case you lose time. But those are the gradual losses. We see them coming and they are inevitable. We accept them.

Sudden wrenching loss is inevitable for most of us too. The parent or spouse who dies in an accident or from a heart attack. The swindler who cons us out of our life savings (think Enron).

These wrenching losses change us--even when they happen to someone else. When we hear of a child who is kidnapped while walking to school, we start driving the kids everyday. We lose time, the kids lose exercise and independence and they learn to fear.

And these changes are like a ratchet. Once they happen we seldom go backwards. We learn. But this is a rare case in which learning may not be completely positive. With learning comes the risk of completely losing our youthful spirit.

So a challenge that I put to you is once a day, think about your youthful defiance and determination. Put aside learned fear and stand up for something that is right. Be fearless.

Aargh

2005-12-23T01:11:00.000-08:00

We did it. We bought a Windows computer. It hurts real bad. We needed a PC that could run Microsoft Project, and I didn't want to go through the Virtual PC rigamarole on a Mac. It hurts.

Futility

2005-10-27T08:16:00.000-07:00

Now the Cubs are all alone in the Major League Baseball futility standings.

It's sad. I wish they would have won before my Mom died. She was a diehard Cubs fan.

Team Last WS Win
Cubs 1908
Indians 1948
Giants 1954
Rangers ---- Est. 1961 (Washington Senators)
Astros ---- Est. 1962
Padres ---- Est. 1969
Expos/Nationals ---- Est. 1969
Brewers ---- Est. 1969 (as the Seattle Pilots)
Mariners ---- Est. 1977
Pirates 1979
Phillies 1980
Cardinals 1982
Orioles 1983
Tigers 1984
Royals 1985
Mets 1986
Twins 1987
Dodgers 1988
A's 1989
Reds 1990
Blue Jays 1993
Rockies ---- Est. 1993
Braves 1995
Devil Rays ---- Est. 1998
Yankees 2000
Diamondbacks 2001
Angels 2002
Marlins 2003
Red Sox 2004
White Sox 2005

Da White Sox

2005-10-27T07:55:00.000-07:00

Woo hoo. They did it. White Sox win the World Series. First the Red Sox, now the White Sox. All we need now is the Cubs and we will have definitive proof that Hell has, in fact, frozen over.

Winning Ugly

2005-10-24T02:43:00.000-07:00

Having grown up in Chicago, I am a long time victim of Chicago sports. Oh sure, there were a few bright spots (Jordan and the Bulls, Walter Payton and the Bears), but the record of futility may be unmatched.

I have just watched the second world series game in 2005. The Chicago White Sox are now ahead 2 games to 0 and I am cautiously optimisitic that maybe, just maybe, the White Sox might have a chance of winning three world series games before once again breaking my heart. We'll see.

World Series Tickets $185; Cub Fans At Home In October: Priceless

I have been pondering something. In Chicago, you are either a Cubs fan or a White Sox fan. There is no middle ground. I know that most cities with more than one team are this way as well, but I think that Chicago it is a little more polarized than most places. Why is that? If anyone out there has insight on that I would like to hear from you.

In my family, my mother was a diehard Cubs fan. I'm not sure why I became a White Sox fan though. Was there something in the air in 1959 when I was 2 years old and the Go Go Sox went to the series? I think my first Major League ball game was at Comiskey Park. Maybe I was just being contrary. That wouldn't be too surprising.

OLAP and Planning

2005-09-15T23:48:00.000-07:00

My name is Tony and I'm a planner. There I said it. Six years ago I was describing the work I was doing to someone and he said, "Oh, you're a planner." I was shocked to be called such a name. Today I am out of the closet.

I am not a planner though in the mold that most organizations think of planners. In many places, planning is a combination of very mechanical rollups and dysfuctional negotiations; collect sandbagged data, add it all together, twist arms until people go back to what they were willing to live with, repeat yearly. This type of planning adds little if any value, but is very common.

In many places, even the adding up of the data is extremely painful. We used to use Excel for adding up all our data. I have no problem with Excel, when used as designed. Once you start to treat it as a database, all kinds of bad things can happen.

First, Excel has capacity limitations. The tool I had built in Excel had to contain 500 assets, 20 to 50 years looking forward of data, and about 50 accounts. That's a minimum of 500,000 pieces of data. Also, when trying to do some of the slicing and dicing that is normally required, e.g. business unit earnings profiles, you are really analyzing along multiple dimensions. At some point, Excel starts to choke on some combination of the dimensionality and the sheer volume of data.

As an example, last year when I was building the model, it had reached about 35 MB. I copied a formula across one of my 500 by 20 arrays and Excel just went off and did something for about an hour. When it came back to my control, a few things happened: Trace dependents and precedents no longer worked, the calculate sign would not go out even after recalculation, it receclulated the entire spreadsheet every time I changed something, and it exploded to over 100 MB. In addition, any changes would make the model unstable sometimes leading to calculation errors. On top of all of that, the data collection process was deadly.

We collected a total of about 1500 templates from our business units. These needed to be linked in to a master spreadsheet and update links periodically. If even one value changed, we would have to go through a process of opening files and updating links that took about an hour.

I have digressed a bit here, but the point of all this is that even things that should be very simple--adding a bunch of numbers--end up taking a lot of time because of all the data management that happens behind the scenes. This typically leaves little time for "real" analysis.
So, because rollups will always be necessary, it is important to make the whole rollup and data management side as painless as possible. For this we need something stronger than Excel. This is where OLAP comes in.

OLAP stands for OnLine Analytic Processing. In a nutshell, if it is FASMI, Fast Analysis of Shared Multidimensional Information, it is an OLAP tool. The OLAP Report goes into a lot of detail about what this means, but in my mind it is a natural evolution of database technology.

Our particular implementation uses Outlooksoft CPM as the main vendor of our OLAP tools. They in turn are built on Microsoft Analysis Services and SQL server. Our intital implementation was definitely an improvement over Excel, and with the learnigns from our first planning cycle, I am confident that the next pass will be even better. This is a real step-change in our planning process--a platform on which to build.

Now that we have a platform that permanently elevates our game, where do we go from here?

There are a few paths. One is to improve the quality of our forecasts. We are plagued by the dreaded hockey stick. Each plan cycle shifts projects in time and increases capex. Another is to develop standards around a probabilistic plan. Strategic Decisions Group has done some interesting work on planning processes that incorporate probabilistic planning as well as portfolio analysis in capital allocation. Finally, other types of portfolio analysis, such as that advocated by John Howell of Portfolio Decisions for strategy development, or a more tactical approach as advocated by Steve Rasey of WiserWays hold potential for better strategy development as well as more effective, focused capital allocation.

How Could Bush Have Responded to Castro

2005-09-07T08:43:00.000-07:00

Castro made a very eloquent, apparently sincere, almost certainly politically motivated offer to help by sending 1,100 doctors to help in New Orleans. Our official response was to ignore him. How many people have died and will die because of this tacit refusal of aid?

What if Bush had made a positive response? How might it have gone?

"My fellow Americans. America and Cuba has an intertwined history going back hundreds of years. That came to an abrupt end in the late 1950s when Fidel Castro led a communist revolution in that country. Since the early 60s, the US has observed a trade and travel embargo with Cuba.

"In the wake of Hurricane Katrina, Cuba has made a historic offer of assistance to the United States.They have offered the services of 1100 physicians to assist in saving the lives of the desperate people of New Orleans. I know that there will be people who disagree with this decision, especially in Florida, where many former residents of Cuba still reside. This decision is not being made lightly, but represents a part of a plan to begin the cleanup of New Orleans by first saving as many lives as is humanly possible. This does not represent a reversal of our policies towards Cuba, but rather a practical decision to gather as many resources as possible to save lives.

"I hope you will support this administration in welcoming the physicians and supporting their humanitarian efforts."

What would the response have been to such a gesture? Dropping ideological differences to save lives. Might it have salvaged any of the bad press the administration is getting? He might have lost a few votes in Florida (maybe), but he would likely have gained votes in every other coastal state.

The cold shoulder given to Castro represents either fear or hubris. Either way, I wonder how many additional lives will be lost. Very sad.

Those No Good Commie...

2005-09-07T03:33:00.000-07:00

I had heard that Cuba had offered help in the wake of hurricane katrina. I had no idea how eloquent Castro was.

From Andrew Tobias' Website:

TWO QUESTIONS FOR YOU

Read the passage below.

1. Do you think the U.S. news media should have more widely reported this offer?
2. Do you think our government was wise to ignore it? If so, why? If not, why not?

“Discuss.”

Castro, addressing 1,586 doctors assembled to offer assistance to victims of Katrina. Havana Convention Center, September 4, 2005

Hardly 48 hours ago I . . . once again explicitly offered the United States to send a medical force with the necessary means to offer emergency assistance to the tens of thousands of Americans trapped in the flooded areas and the ruins Katrina left behind after lashing Louisiana and other southern states.

It was clear to us that those who faced the greatest danger were these huge numbers of poor, desperate people, many elderly citizens with health situations, pregnant women, mothers and children among them, all in urgent need of medical care.

In such a situation, regardless of how rich a country may be, the number of scientists it has or how great its technical breakthroughs have been, what it needs are young, well-trained and experienced professionals, who have done medical work in anomalous circumstances, and that, with a minimum of resources, can be immediately transported by air or any other available means to specific facilities or sites where the lives of human beings are in danger.

Cuba, a short distance away from Louisiana, Mississippi and Alabama, was in a position to offer assistance to the American people. At that moment, the billions of dollars the United States could receive from countries all over the world would not have saved a single life in New Orleans and other critical areas where people were in mortal danger. Cuba would be completely powerless to help the crew of a spaceship or a nuclear submarine in distress, but it could offer the victims of hurricane Katrina, facing imminent death, substantial and crucial assistance. And this is what it’s been doing since Tuesday, August 30, at 12:45 pm, when the winds and downpours had barely ceased. We don’t regret it in the least, even if Cuba was not mentioned in the long list of countries that offered their solidarity to the US people.

Knowing that I could rely on men and women like you, I took the liberty of reiterating our offer three days later, promising that in less than 12 hours the first 100 doctors, carrying the necessary medical resources in their backpacks, could be in Houston; that an additional 500 could be there 10 hours later and that, within the next 36 hours, 500 more, for a total of 1100, could join them to save at least one of the many lives at risk from such dramatic events.

Perhaps those unaware of our people’s sense of honor and spirit of solidarity thought this was some kind of bluff or a ridiculous exaggeration. But our country never toys with matters as serious as this, and it has never dishonored itself with demagogy or deceit. That is why we proudly gather in this hall, at Havana’s Convention Center where only three days ago we observed a minute of silence for the victims of the hurricane which battered the United States, and from where our heartfelt condolences were extended to that brotherly people.

Here we are, and not 1100 but 1586 doctors, including 300 additional doctors, in response to the increasingly alarming news that keep coming in. In fact, another 300 doctors, approximately, have joined this group at the last minute. They were called in and we’ve already announced that we are willing to send thousands more if it were necessary. But these 300 doctors are in other halls of the Convention Center, taking part in this function. In just 24 hours, all of the doctors summoned to carry out this mission, coming from all parts of the country, met in the capital. We have shown the utmost punctuality and precision.

. . .

Our doctors’ backpacks contain precisely those resources needed to address in the field problems relating to dehydration, high blood pressure, diabetes Mellitus and infections in all parts of the body —lungs, bones, skin, ears, urinary tract, reproductive system— as they arise. They also carry medicine to suppress vomiting; painkillers and drugs to lower fever; medication for the immediate treatment of heart conditions, for allergies of any kind; for treating bronchial asthma and other similar complications, about forty products of proven efficiency in emergencies such as this one.

These professionals carry two backpacks containing these products; each backpack weighs 12 kilograms. Actually, this was determined when all of the backpacks were procured, since although they are quite large, only half of the supplies would fit in; it was then necessary to give each doctor two backpacks, and the small briefcase which carries diagnostic kits. These doctors have much clinical experience, this is one of their most outstanding characteristic, as they are used to offering their services in places where there isn’t even one X-ray machine, ultrasound equipment or instruments for analyzing fecal samples, blood, etc. With the increase in the number of doctors, the medications weigh a total of 36 tons. The initial figure was smaller.

Cuba has the moral authority to express its opinion on this matter and to make this offer. Today, it is the country with the highest number of doctors per capita in the world, and no other country cooperates with other nations in the field of healthcare as extensively as it does.

Of over 130 thousand healthcare professionals with a university education, 25,845 today serve in international missions in 66 different countries. They offer medical services to 85,154,748 people; 34,700,000 in Latin America and the Caribbean and 50,400,000 in Africa and Asia. Of these, 17,651 are doctors, 3,069 are dentists and 3,117 are healthcare technicians who work in optic services and other areas.

Today, more than 12 thousand young people from around the world, chiefly from Latin America and the Caribbean, are studying medicine in Cuba completely free of charge, and their numbers will continue to grow rapidly. Scores of young people from the United States study in the Latin American School of Medicine, whose doors have been opened, since the institution’s inception, to students from that country.

. . .

When our first war of independence broke out in 1868, a group of Americans joined the ranks of Cuba’s independence forces. One of them, a very young man, stood out for his exceptional courage and wrote pages of admirable heroism in Cuba’s history. It was Henry Reeve. His unforgettable name is forever etched in the heart of our people, and next to that of Lincoln and other illustrious Americans it is carved on the pillars of the Plaza built in the days of the struggle for the return of little Elián González, when the noble people of the United States played a decisive role so that justice would finally be done.

Henry Reeve, almost crippled by the wounds sustained in the course of 7 years of war, fell in combat on August 4, 1876, near Yaguaramas, today the province of Cienfuegos.

I propose that this force of Cuban doctors who have volunteered to help save the lives of Americans bear the glorious name of “Henry Reeve”.

These doctors, I mean you, could already be there, offering their services. 48 hours have passed and we have not received any response to our reiterated offer. We shall patiently await a reply, for as many days as necessary. In the meantime, our doctors shall use the time to take intensive epidemiology courses and improving their English. If, ultimately, we do not receive any reply or our cooperation —your cooperation— is not needed, we shall not be demoralized, not you, not us, not any Cuban. On the contrary, we shall feel satisfied for having complied with our duty and extremely happy knowing that no other American, of the many that suffered the painful and perfidious scourge of hurricane Katrina, shall perish from lack of medical care, if that were the reason our doctors were not there.

The “Henry Reeve” Brigade has been created, and whatever tasks you undertake in any part of the world or our own homeland, you shall always bear the glorious distinction of having responded to the call to assistance our brothers and sisters in the United States, and that nation’s humblest children especially, with courage and dignity . . .

Evolution Schmevolution

2005-09-06T09:12:00.000-07:00

In all the debate around evolution and intelligent design, one thing has been lost--does it really matter what is taught?

Evolution is a fact; intelligent design is poorly supported opinion. That's my bias on this. Darwinians can't necessarily give evidence-supported explanations of all the complexity of life. This doesn't mean that it didn't happen. Put all that aside though. Who cares?

Geologists care. Evolutionary biologists care. From the standpoint of most science and engineering though, it doesn't matter at all.

Solid state physicists don't care about evolution or the age of the earth; they care only about how semi conducting materials respond to electrical current. Software engineers don't care. Even doctors don't really care.

What happened a million years ago on earth, and whether humans and apes have a common ancestor has zero impact on most people's daily lives.

We do know that evolution happens at some scale. It is the reason bacteria become immune to antibiotics and why the exterminator needs to change ant poison from time to time. But these are real time (relatively) observable effects there is no room for doubt. Even anti-evolutionists must concede that these effects are real. But all professions that deal with those effects deal with them.

Maybe this whole debate is not really about science, but rather about separation of church and state. Evolution may not be important per se, but the issue behind it is extremely important. That's where the focus of the discussion of this shiould be. A judge and jury should not be deciding on which science is more correct, but rather who should be setting the curriculum.

In my opinion, Intelligent Design, aka Creationism has no place in public schools. It is thinly masqueraded religion. The science curriculum should be designed by scientists, and should represent scientific method and philosophy, not by lay people who represent a religious point of view.

Music in my Life Again

2005-06-26T21:54:00.000-07:00

I have Music in my life again. I don't mean that metaphorically, I mean it literally.

With the advent of the iPod, iTunes, and MP3s, I have started listening to and appreciating music again.

I have digitized my entire CD collection and downloaded a lot of songs from iTunes. now I have all my songs in one place and backed up. I bought an Airport Express to allow me to play directly from my computer to the stereo, so now I have instant access to my music through my stereo.

This is all too cool.

The other thing I did was buy an electric bass. I have always wanted to play, but somewhere stuck in my head was the idea that they did not make left-handed bass guitars. So I didn't do it. Then one day, I actually saw one in an instrument store. It was a revelation. I bought one and have started lessons from a CD. Unfortunately, my computer chewed up my CD, so I am going to have to get a new copy, but wow!!

Rock is my life.

Linguistic Profile

2005-04-24T23:40:00.000-07:00

What Kind of American English Do You Speak?

Your Linguistic Profile:
70% General American English
15% Yankee
5% Midwestern
5% Upper Midwestern
0% Dixie

Kind of fun. No surprise here though.

Weight Lifting and Age

2005-02-20T11:11:00.000-08:00

OK. I'm not as young as I used to be. And I'm a little bit overweight... Actually, overfat. You see, the normal standards of weight vs height as expressed by the Body Mass Index are a bit flawed. I'm not tring to make excuses or anything, but focusing on weight alone can be counterproductive.

The medical community has used the weight of average people in computing the range of acceptable BMIs, but it doesn't account for people outside of the norm. For example, Walter Payton, one of the greatest running backs ever to play football was 5'10" and weighed about 210 lbs. That gave him a BMI of 30.2--obese. He was not obese. He probably had about 10% body fat. That is why BMI has problems. It is used as a proxy for body fat percentage. The fact is though that today you can get a scale for under $100 that measures your body fat directly. So if you are an athlete or are somehow outside the norm, you can see your real progress.

Which brings me to the topic of this note, weight lifting as you age. I'm now 47 years old and have been weight lifting at the gym for about seven years, although there have been a few extended periods of relative inactivity. I have been using gymamerica.com to track my results and keep me motivated.

In general, it has been successful. I am carrying a lot more muscle than I used to, I suspect my bone density is better than it was, and generally I look better than I did some years ago. I do need to lose bodyfat. I am somewhere around 30% right now. It's easier said than one, but in my case, simply cutting back portion size will get me there. I have lost about 10 pounds since the beginning of the year. I do not expect to continue this pace, but I think it;s a good start.

Right now I am at 221 lbs., 31.0% body fat and according to gymamerica.com I have a strength quotient of 126.

I encourage anyone to get onto an exercise routine. If you use gymamerica, please put my name (kenckar) as the referring member.

Good luck.

Mothballs in Urinals?

2005-01-30T07:51:00.000-08:00

The title says it all. What the heck is that about? You see it a lot in third world countries and bars in the first world. Do people really think that mothballs can take the place of the urinal "breath mints"?

Vision and Philosophy

2005-01-28T15:13:00.000-08:00

I'm sitting in the first class lounge in Lagos, Nigeria, chilling out before flying home after a three week trip. I'm sitting with a German and a Canadian, and we were talking about kids' college education.

It occurred to me that in the US we do not have any kind of coherent philosophy about education. Let me explain.

The system in the UK is based on merit. If you are smart and get good grades, you will have the opportunity to go to a first class university. The phosophy is that the people with the best chance of achievement, the best chance to really add value to society, will get the best training. That training is almost free to the student and is returned many times by their achievements.

In the US there is a loose meritocracy, but it is also blended with a plutocracy. So many of the smartest people go to the best schools, but at the same time a significant number of people cannot afford the best schools--or even the average ones.

There is a philosophy, but it is inherently inefficient. The philosophy is that you can go to the best college you can afford.

So is this bad? One could argue that the US is the most powerful and innovative country in the world, it must be doing somnething right. And we are. The free market system and corporate framework we havein place allows unprecedented risk-taking. So I would say that our success is despite our educational system.

The US has been blessed with incredibly abundant resources and a legal system that allows us to exploit those resources. When those resources unwind--and they will--we will be left with our system and our wits. To the extent that our system is inefficient, we will be giving away our future. We are doing it now, but we don't see or feel it because of our rich endowment. That endowment will expire and if we are not prepared, we will decline to a degree that we can't today imagine.

Divorce and Punishment--Disneyland Dads of the World Unite

2005-01-02T13:17:00.000-08:00

I am a divorced father and a stepfather. Recently I have done some soul searching around the issue of parenthood vs. step-parenthood and how and when it is appropriate for which parent to provide discipline.

I caught my son downloading some pornography on the internet. He's 16 years old. In my book this is not a horrible crime, nor can it be ignored. It was near the end of his week visiting, so I did not make a big stink about it. I did take away his computer privileges for the remainder of his stay (about a day). I called his mom, who lives across the country, and told her what had happened. She is going to do something to punish him. I don't know what exactly.

Now, what would I have done if it had been my stepson who lives with us? I think something similar. He has gotten in trouble for computer use and we have taken away his privileges.

I had to really think through the issues on this and make sure I was being fair, consistent, and acting in the kids' best interests.

My conclusion at the end of it all is that the adults who primarily live with the kids are responsible for the bulk of the shaping of the child's character. It is difficult to establish a realtionship where it is ok to be the bad guy when you see the kids infrequently. More importantly, discipline is not effective when it is inconsistent. SO my advice is enjoy. Don't treat them like visiting royalty, but don't sweat every little transgression either. That's really the job of the custodial parent.

That's my story and I'm sticking to it.

Protein Folding and Grid Computing

2004-12-13T08:13:00.000-08:00

I am a big fan of what is sometimes called grid computing. In essence, a master computer doles out work to other computers on the network, which would do some portion of the processing, return results, and fetch a new work unit. Probably the best known effort on these lines is the SETI at Home project.

The effort that I am really into though is Stanford's Folding at Home. It is a grid or distributed computing project that is investigating proteins and how they assemble themselves or fold. Through this effort, they are hoping to understand and maybe eventually cure dieases like cancer, Alzheimer's, and Parkinson's. The client software can be installed either as a screensaver or as a service (I recommend service). It runs in the background on a low priority and the system software takes care of making sure that the user has good performance with his real work.

The program works with Windows PCs, Macintosh, or Linux. I am a member of Team 18 MacAddict4Life.

This is a really worthy effort. I encourage everyone with a computer to participate.

Steroids in Sports

2004-12-06T21:52:00.000-08:00

I'm shocked, shocked that professional athletes are using steroids. The powers in sports and government seem quite comfortable overlooking all the mutants in professional and amateur sports until someone actually tells the truth, then they crucify the whistle blowers.

Now you have senators saying they're going to crack down on pro baseball. Hellooooo. Have they watched a pro or college football game lately? If 50% of baseball players use steroids, the number must be 95% in pro football. They did not get that way with protein powder and vitamins.

Personally I don't care what these athletes do. They are making a conscious choice to pollute their bodies in exchange for money, girls, fame, etc. We as a society really need to figure out where to be on this. Let's either get serious and stop the abuse or acknowledge that it happens and accept it. Anything less is a disservice to the people they claim to be trying to protect--the kids.

Logic and Clarity

2004-11-30T15:30:00.000-08:00

I am a really big fan of well thought out, logical arguments. Two writers whose work I really admire are Andrew Tobias and Bob Lewis. They write on different subjects in general, but I am a big fan of them both.

I first learned about Andrew Tobias through his book "The Only Investment Guide You'll Ever Need." That was back in the mid-80s. After a decade of stagflation, shady commodities deals, and my first experience in the job market, Tobias shed a lot of light on my view of the economic and financial world. Much or most of what he wrote in the book was simple common sense, but there's a lot of it, and if nothing else, it will validate your financial astuteness. His insights to markets are still valid 25 years later.

The other writer, Bob Lewis, writes for InfoWorld magazine and has his own IT consulting service. His main topics are directly related to IT workers and executives, but the lessons apply equal well to almost any other field. is columns have given me powerful insights to career and project issues. He can be found at http://www.issurvivor.com.

Voting and IQ

2004-11-20T11:22:00.000-08:00

I saw something on the internet recently that showed a really direct correlation between the average IQ of a state and their voting preference in the 2004 election. I followed up to try to understand where the data came from. I couldn't find any reliable source data in 20 minutes or so of searching, so I thought I would do my own thing.

I went to the US Government Census website, pulled off median family income by state from the 2000 Census and compared that to the percent voting for Kerry. It came up with a correlation of 0.53. You can see on the chart that there is quite a bit of scatter in the data. However, when you put that on a table sorted and color coded it is more impressive. Higher income correlates pretty well with Kerry voters.

What does that mean though? I'm tempted to say that there is a correlation between education and income, therefore smarter people tend to vote Kerry, but there are probably a lot of holes in that argument. In any case, follow the link and make your own judgments. At least it is real data.

Irony

2004-11-09T21:29:00.000-08:00

A strange scene is unfolding in Richmond, CA on San Francisco Bay tonight. A tribe of Indians (Native Americans), those nature loving stewards of our planet, are trying to open a casino on some vacant wetlands. ChevronTexaco, an integrated oil company, those rapers and pillagers of our planet, are opposing them because they want to build a nature preserve. Go figure.

Election 2004

2004-11-03T01:11:00.000-08:00

It was an eventful, and in some ways surprising election. Although I am completely against the actions taken by Bush in Iraq, I do see a silver lining with some other aspects.

Economy - The economy seems to be on the road to improving. It is partly because of the world record deficits, which Kerry would not have been able to stem either. I did not consider economy a key issue in this election, although I am pro-trade.

Social Issues and Environment - Bush is a throwback to a nasty era of cronyism. Where the rich get richer and help other rich get even richer by extracting benefits from the common weal, while the poor get poorer and work together to make ends meet. Although inherently unfair, it is actually probably good for us from a competitive standpoint. It will reduce costs of production. Longer term, the retirement of the baby boomers and the health care issues are going to be huge.

Foreign Relations - I see no silver lining here, except maybe that the whole world now has extremely low expectations.

Morality - Only in some strange warped world where morality has more to do with forcing religion on others than doing what is right is George Bush the choice on a morality. We consider it worse to let grown adults do what they want in the privacy of their bedroom than go into a foreign country and kill more than 100,000 of their civilian citizens. The issue of gay marriages or civil unions is such a non-issue in my mind compared to the rest of what is happening. I just feel terribly disturbed by the trend. I have seen in print that 70% of Bush voters believe that Iraq played a large part in 9/11. Where is the morality in allowing that belief to continue? Unreal.

Apple Computers

2004-10-14T13:13:00.000-07:00

My name is Tony and I am a Macaholic. I own a few shares of Apple stock and have been a Mac User and owner since I bought my Mac Plus in about 1986 or so.

I have reviewed software, supported computers, worked with user groups, and am an advanced user of most of the standard programs.

There is little doubt in my mind that even since the first days of the Lisa, Macs have represented not only a better product, but also a better value. When Macs first came out they were not cheap, but the beauty of them is that they came in a single package with just about everything you needed. PCs on the other hand were much cheaper, but... If you actually wanted to use them you were stuck with plunking down a whole lot more money to get up to the same capability of a Mac. This holds true today too. I'll write more about Macs later.

Debate Number 3

2004-10-13T18:22:00.000-07:00

In the first two debates, I thought that Kerry blew Bush away purely on better arguments. A lot of people focused on Bush's facial expressions; I didn't even notice them. Tonight I watched though. He generally seemed to have control over himself.

As far as the answers that they gave go, I tended to like Kerry's answers better, but didn't see any real knockout punches as in the first two debates.

W said he prays a lot. I somehow don't buy it. He said, "I never want to impose my religion on anyone else." I almost vomited.

Bush tried a few jokes and they were really lame.

I just heard that Bush did in fact say that he wasn't worried about Osama bin Laden.

Call this one a draw.

Debate Number 2

2004-10-09T01:14:00.000-07:00

Several really important points:

Sanctions:Bush said that the sanctions weren't working because Hussein had still been in power. Kerry made the right point that in fact, the sanctions worked. Hussein had no WMDs and, by the way, the sanctions were not intended to take him out of power. Huge score for Kerry in my book.

Environment: Bush talked aout how the air is cleaner today than it was 4 years ago. That may be true, but it is despite his efforts, not because of them. He has relaxed standards on air and water pollution drastically.

Abortions: The other really telling part was during their discussion about partial birth abortions. Bush said and repeated, Kerry voted against it There's nothing else you need to know. Kerry explained his vote against it because it did not make necessary allowances in certain cases. I know many people see abortion as black and white, but there are a lot of gray shades there. Bush's inability to see or admit those shades is insane.

Accountability for the war: One other part that I found unbelievable was when Bush blamed his generals for not having enough people in Iraq. He said that he asked them point blank if they had enough troops to win to which they replied that they did. Kerry's response was that the general's job is to win the war; the president's is to win the peace. President Bush needs a sign on his desk that says, "The buck stops here."

Bush did make a strong point when Kerry went after him once again regarding the Osama-bin-Laden-holed-up-in-the-mountains-of-Tora-Bora-thing. He said, "It's a fundamental misunderstanding to say that the war on terror is only Osama bin Laden." Which neutralizes Kerry's point to some extent.

There was other give and take, but in my mind those were some of the most important points of debate two.

Mosaics

2004-10-05T15:13:00.000-07:00

My wife, Kathleen, has recently taken up Mosaics. It has opened my eyes to a very cool art form. It has elements of both art and construction.

In Ravenna Italy there are mosaics still standing that were created in the 6th century. You have to love art that lasts

Why we need to change our voting system before it tears us apart

2004-09-26T13:24:00.000-07:00

I think the United Stated is a great country, but a great country with a serious problem. I think that problem begins with the way we elect our leaders.

Never mind the electoral college. That has some issues, but I don't think that's the worst of the problems. I want to go to the problems with the principle of whoever has the most votes wins.

On the surface it's not bad, especially because we have a bill of rights to protect us for the most part from Tyranny of the Majority. However in the case of the United States, I believe that it has led to increasing polarization of the people in this country.

Our economy and society is extremely complex. To winnow our choices down to two people at the end of the day doesn't allow for full expression of views to carry forward. I can hear you thinking, "but there are more than two people. What is to stop one from voting for a Green candidate or libertarian?" Well nothing stops us except the system. Even though I may like a Ralph Nader, if I prefer Kerry to Bush, then a vote for Nader can have the unintended consequence of putting Bush, whose views I like less, into office. This isn't a repulican vs. democrat thing though. It happened to the Republicans too in 1992 with Ross Perot. It will happen again.

The only chance to pull a candidate towards the center, which is in fact where more people reside is by having some people in the primaries who have a strong enough showing that the party will adopt some of their policies.

I personally am tired of having to vote for one of two guys simply because I hate him less than the other guy. But how could this be done better? I'm not any kind of genius, but I suggest you take a look at the link attached to this post. It describes several methods of compiling votes, including Condorcet methods.

The voter actually has the opportunity to put his votes in the order he would like to see them applied (i.e in order of preference). It then builds a table of preferences for all voters and turns the election into kind of round robin, as opposed to our current single elimination system.

Although this is not perfect and does introduce some complexity into the system, it would allow for other voices to be heard in an election, and I believe would bring the whole political discourse to a place where people are trying to find solutions instead of hammering each other with positions.

Portfolio Analysis - Opportunity Evaluation (Beyond IRR and MIRR)

2004-09-25T21:46:00.000-07:00

OK so I wrote a long screed against IRR and said that MIRR is a better metric, I consider that a fact. But does that really give the answer?

It is a good start. Given that you have some system to prioritize opportunities, you can end up with the highest value. That is usually not the whole picture though. Within a single project, there are usually distinct alternatives to consider. For example, sometimes a project may be able to trade current capital expenditure for future operational expense. This may have the impact of ultimately reducing margins, but giving the company additional leverage in the short term.

So how do you do it? There's really a continuum of methods ranging from simple standalone analysis to a more complete approach incorporating estimates of risk and uncertainty. I believe that most organizations can benefit from a portfolio analysis approach, which tends to the complete side of the spectrum.

In a perfect world, here's what that looks like. You need an inventory of your current operations at a level of decision granularity that reflects potential decision units. Depending on the industry, it could be product line, geographical area, value chain component, or even related to organizational boundaries. It is also useful to understand some of the flexibility inherent in the operations, e.g is there a scenario to increase or decrease production or divest or increase interest. Is there an investment or investment program that could have an impact on the operations? Next you need an inventory of opportunities and an understanding of the potential decisions around them. Typically the decisions are divest, delay, and accelerate.

Finally, and this is usually the hard part, a sense of the organization's financial and operational goals, metrics, and constraints. Typically, these are things like earnings increases over time, constraints on capital spend reductions in expense, etc.

It's also nice to have a quantitative estimate of the risks and uncertainties for each of the options, but that could be asking a lot of an organization.

Once you assemble the data, there are a number of approaches to take. the first step though is to establish your baseline case. Typically, this is manual. Simply select a set of mutually exclusive choices that represent where you think you are going or that contains the recommended cases from your business units. Then look to see how the data rolls together. Is it a growth pattern that seems sufficient, do the capital needs seem reasonable? If it looks fine, maybe you have your answers,

I suggest you go through another step though. Fiddle with some of your metrics. See if you could increase your earnings growth through selection of different project alternatives while maintaining the same overall level of capital and operational expenditures. Try to understand some of the tradeoffs between growth and earnings.

If you have more than 50 or so decision units or assets to consider, this is very difficult to do manually, even with computers. But modeling techniques have come a long way. Using a program like Excel with What's Best and Crystal Ball added in, or Analytica with the new optimization engine, you can explore the infinite combination of decisions quickly to understand the tradeoffs and possibilities in your business.

This can be a yearly direction setting effort, or what I would recommend is that you keep a fairly current inventory of options and as a project approaches its alternative selection time, put those options into your optimization model and see if there is a best fit with corporate goals and other options that have since been locked in.

All this sounds like a lot, but if you have formal planning and project management processes in place it is really an incremental step.

IRR is Evil

2004-09-25T21:45:00.001-07:00

A McKinsey article on IRR (Internal Rate of Return) and why it is EVIL. (My words)

Project and opportunity evaluation has two main types of indicative metrics: value and efficiency. Value is typically expressed as Net Present Value or NPV. There are to typical ways of expressing efficiency: as a percent return on investment or as a ratio. The most commonly used percent function is Internal Rate of Return.

First a little background. Present value methods are based on the idea that most people and companies would rather receive one dollar today, than that same dollar one year from today. The preference is usually expressed as a cost of capital or discount factor (percentage) and should equal an indifference value. For example, if it is the same to you whether you receive $1 today, or $1.10 in a year, your discount factor is said to be 10%. In most cases, it represents either a cost or a lost opportunity.

In project or investment analysis, typically an analyst will generate a set of cash flows over time, incorporating everything he knows about future economic conditions, prices, costs, taxes, etc. The NPV is calculated by discounting the the yearly cash flow at the discount rate back to the present day. To use a simple example, if you have a discount rate of 10%, receiving $1 today would be the same as receiving $1.0 a year from today. They would both have an NPV of $1. Internal rate of return uses a similar methodology, but instead of presupposing a discount rate, IRR calculates the rate at which the NPV is 0. It works well only is there is a stream of negative cash flow followed by a stream of positive.

That seems pretty straightforward, what makes it evil?

Actually, there is really nothing wrong with the calculation, as with many things it's how you interpret the facts.

There are two things that make IRR misleading. First, short term projects that pay-out reasonably can have misleadingly high IRRs. Second, and related to the first, IRRs tend to not reflect what a project or investment is worth in the overall context of the company, it makes no assumptions about what happens with the cash that a project spins off.

So a three year project with a 50% rate of return needs to take the cash that it spins out and reinvest it. Unless all the firm's projects are 50% return projects, the reinvestment rate will be much lower. Probably in many cases less than 12%. If you were to put the project on a 30 year timeline, the same as your 15% infrastructure project, and make an explicit assumption about the rate at which the cash will multiply, it is possible that the firm would prefer the 12% project to the 50% project because at the end of the timeframe, you would have more money with the longer term project. I recognize that I am ignoring risk and a number of other factors, but I am trying to illustrate the concept. This is why IRR is evil; people take it out of context and think that it represents a real rate of return to the firm and that it can be useful for comparison of dissimilar projects.

Luckily, Excel allows for the growth rate of return calculation. It is called MIRR. It is sometimes called Growth Rate of Return.

Some of the ratio metrics are also useful. In particular the benefit-cost ratio (BCR) will give the same relative ranking as MIRR. It is calculated simply as the NPV divided by the maximum cumulative discounted negative exposure of the opportunity. Sometimes 1 is added to make the number have a value something like 1.2, meaning that for every PV dollar invested you are receivng 1.2 PV dollars paid back. If a project has multiple phases, sometimes it will have additional negative net cash flows in later years. Those must also be brought back as present values into the denominator.

Foolish Consistency and the Flip Flop

2004-09-25T21:45:00.000-07:00

Ralph Waldo Emerson, in his essay “Self-Reliance” stated “A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. With consistency a great soul has simply nothing to do. He may as well concern himself with his shadow on the wall.” This has such relevance in this election that I just felt the need to bring it up.

His point is that establishing a position and sticking to that position regardless of circumstances is foolish and intellectually lazy. I contend that there are some great principles that are non-foolish consistencies (starting with “Thou shalt not kill”). What should not be consistent is your response to events. There is nothing wrong with giving a leader a strategic negotiating position that allows a diplomatic solution. When that leader then uses that position for reasons outside of the original intent and by the way bungles tactically, it is entirely appropriate to criticize the action. It would be unconscionable of John Kerry to do otherwise. The president on the other hand says that we need to stay the course and it was all the right thing to do, demonstrating that he is a man with not just a “little mind”, but also of small spirit.

Cost-Benefit of Iraq

2004-09-25T21:44:00.000-07:00

One side of all the analysis I have not heard much about is a cost-benefit analysis of the war in Iraq.

So first let's think about the goals of the action:
1. Get rid of a very bad man.
2. Make the world safer for America and Americans by a. removing weapons of mass destruction and b. removing Iraq's financing of terrorism.
3. Help secure a source of oil?
4. Send a message to the terrorists.

So of those reasons, which of them would have a direct benefit to the US? Make the world safer and help secure a source of oil would certainly have a benefits. Knocking a bad guy out of office is less clear. Sending a message to the terrorists would also be a good thing.

So, if those are in fact true, what would be the value of those? If in fact Iraq had had WMDs, what was the danger to the US? Saddam certainly did not have the means to deliver significant WMDs to the US, so that has very limited direct value. Iraq appears to have been a relatively minor player in world terrorism, so that doesn't seem like a strong value.

The oil side was never really an issue and actions have demonstrated that. Iraq has large reserves and even more waiting to be discovered, but it will be years before that can be tapped to its potential and that supply would be no more secure than any other.

Finally, concerning the message to the terrorists. I'm afraid that the only message we have sent is that we are big and can beat up any country in a frontal war. We have taught them that covert and terrorist means are their best bet and that we are not particularly interested in diplomacy.

So all I can think s that we have spent hundreds of billions of dollars for no particular reason.

Sad.

Cut to the Chase (whatever THAT means)

2004-09-25T21:42:00.000-07:00

This year's political silly season is giving me heartburn. It seems that so many "analysts" are completely missing the point. I just feel compelled to write some of my thoughts.

This argument about military service is such a side issue that it gives me hives. I want to put it to rest now.

Everyone agrees that Kerry served in Viet Nam right? Everyone agrees that Bush was registered in the National Guard right.

Best Case for Bush:
Bush served admirably, attended at all times. The records are lost.
Kerry went to Viet Nam served on the Swift Boats, but his medals were awarded erroneously.
Result: Tie. Bush served well, but never put himself in harm's way; Kerry put himself in harm's way but didn't serve well.

Best Case for Kerry:
Kerry served on the Swift Boats, earned all his medals, and was in fact a war hero as the official record indicates. Bush evaded service and didn't even take mandatory drug tests because he knew he would not have passed.
Result: Advantage Kerry.

I don't get why Bush and his friends are continuing to harp on military service. The best they can hope for in this is a tie. If Bush had one shred of honor, he would call off the dogs on this one. However as John McCain can attest, W probably lacks that shred.

Some Miscellaneous SNL stuff

2004-09-25T21:40:00.000-07:00

I have always been a big fan of Saturday Night Live. for some reason I thought about a few SNL things recently: Decabet and Gillette Trac 3

For some reason I thought of the Decabet today. The idea being that it's kind of a "metric system" alphabet with only 10 letters It's like this:

(Dan Aykroyd) of the U.S. Council of Standards and Measurements explains the "Decabet" the new metric alphabet consisting of 10 letters. "A-B-C and D, our most popular letters, will remain the same. E and F, however, will be combined and graphically simplified to one character. The groupings G-H-I and L-M-N-O will be condensed to single letters. (Incidentally, a boon to those who always thought that L-M-N-O was one letter anyway.) And finally, the 'trash letters,' or P-Q-R-S-T-U-V-W-X-Y and Z, will be condense" to one "easily identifiable dark character."

So then A B C D EF GHI J K LMNOP QR... I don't know why, but it just strikes me as funny today.

The other thing that I think about was the phony ad for a razor with three blades (Triple Trac--because you'll believe anything). Am I the only one who remembers that? When Gillette first announced their real product, I blew my coffee out my nose.