Rooftop solar panels considered harmful?


“The Hole in the Rooftop Solar-Panel Craze” is a Wall Street Journal editorial (May 17, 2015) that heaps scorn on the way that America’s crony capitalist system encourages domestic rooftop solar power.  Here’s a sample:

Recent studies by Lazard and others, however, have found that large, utility-scale solar power plants can cost as little as five cents (or six cents without a subsidy) per kilowatt-hour to build and operate in the sunny Southwest.

Large-scale solar-power prices are falling because the cost to manufacture solar panels has been decreasing and because large solar installations permit economies of scale. Rooftop solar, on the other hand, often involves microinstallations in inefficient places, which makes the overall cost as much as 3½ times higher.

Yet the federal subsidies for solar amount to about $5 billion a year, with more than half of that amount going to rooftop and other, more expensive, non-utility solar plants. If the federal government spent the $5 billion instead subsidizing only utility-scale solar plants, I estimate that it could increase the amount of solar power installed in this country every year by about 65%. And without net metering and all of the other nonsensical state and local subsidies for rooftop solar, we could save this country billions of dollars every year.

The author doesn’t calculate the full amount of the wasted dollars because, presumably, it is too hard to find out what each of the 50 states is doing.

First, do we believe this guy? Brian H. Potts is the author and (1) he is a lawyer who works mostly for utilities, (2) he doesn’t look old enough to shave.

If Potts is right, is it reasonable for him to expect a program run by the U.S. government to be efficient? Car emissions reductions, for example, have been handled in what economists would call the dumbest and most expensive possible way. Instead of measuring emissions every year when cars are inspected and taxing each car owner according to miles driven and pollution emitted per mile, standards are promulgated for new cars and society has to wait 10-20 years to see an effect. The result is that a small percentage of older/mistuned cars generate most of the pollution (example study). Why wouldn’t we expect solar energy production to be handled in a similarly inefficient manner?


Not enough rich bastards to keep Bombardier Global Express production going


Somebody forgot to tell Bombardier how much richer the global rich are getting. “Bombardier to Cut Production of Most Lucrative Jets” is a May 14, 2015 Wall Street Journal article about how “tough economic conditions world-wide and geopolitical issues have reduced demand for its Global 5000 and 6000 jets, its most expensive long-range business jets currently in serial production. The production cuts will result in the loss of about 1,750 jobs and weigh most heavily on its Montreal-area operations, where about 1,000 workers will be laid off.”

[The Global Express is a Gulfstream competitor and costs about $50 million if moderately pimped out. It is a cousin to the Canadair Regional Jet that I used to fly (previous post about landing at LGA; another visual approach posting).]

New Yorker pokes into the venture capital world


“Tomorrow’s Advance Man” is a New Yorker story (May 18, 2015 issue) about the world of Marc Andreessen, NCSA Mosaic browser programmer turned venture capitalist.

The story explains how the top firms get consistently better returns than the less-known ones: “The imprimatur of a top firm’s investment is so powerful that entrepreneurs routinely accept a twenty-five per cent lower valuation to get it.” (i.e., they are buying at a lower price than competitors)

The market-clearing price for a competent venture capital partner is not very high: “[A16z] general partners make about three hundred thousand dollars a year, far less than the industry standard of at least a million dollars, and the savings pays for sixty-five specialists in executive talent, tech talent, market development, corporate development, and marketing.” Presumably the partners get some kind of boost when a portfolio company is sold, but $300,000 per year is what a senior programmer at Apple or Google could expect to earn (and more evidence that Ellen Pao would have made more money by getting pregnant than by working as a VC).

What would be a fair price for the job? Maybe $0:

The dirty secret of the trade is that the bottom three-quarters of venture firms didn’t beat the Nasdaq for the past five years. In a stinging 2012 report, the L.P. Diane Mulcahy calculated, “Since 1997, less cash has been returned to V.C. investors than they have invested.” The truth is that most V.C.s subsist entirely on fees, which they compound by raising a new fund every three years. Returns are kept hidden by nondisclosure agreements, and so V.C.s routinely overstate them, both to encourage investment and to attract entrepreneurs. “You can’t find a venture fund anywhere that’s not in the top quartile,” one L.P. said sardonically. V.C.s also logo shop, buying into late rounds of hot companies at high prices so they can list them on their portfolio page.

Smart Chinese-American: Stop watching TV and don’t follow your passion


This interview with Andrew Ng, founder of Coursera and now head of a Silicon Valley lab for Baidu, is kind of interesting for revealing the divide between the Hong Kong/Singapore culture in which Ng grew up and standard American culture. Some choice lines:

I think that “follow your passion” is not good career advice. It’s actually one of the most terrible pieces of career advice we give people. If you are passionate about driving your car, it doesn’t necessarily mean you should aspire to be a race car driver.

When I talk to researchers, when I talk to people wanting to engage in entrepreneurship, I tell them that if you read research papers consistently, if you seriously study half a dozen papers a week and you do that for two years, after those two years you will have learned a lot. This is a fantastic investment in your own long term development. [Fortunately in engineering we are not necessary plagued by “Why Most Published Research Findings are False”]

… if you spend a whole Saturday studying rather than watching TV, there’s no one there to pat you on the back or tell you you did a good job. Chances are what you learned studying all Saturday won’t make you that much better at your job the following Monday. There are very few, almost no short-term rewards for these things. But it’s a fantastic long-term investment. This is really how you become a great researcher, you have to read a lot.

There is much less appreciation for the status quo in the Chinese internet economy and I think there’s a much bigger sense that all assumptions can be challenged and everything is up for grabs. The Chinese internet ecosystem is very dynamic. Everyone sees huge opportunity, everyone sees massive competition. Stuff changes all the time. New inventions arise, and large companies will one day suddenly jump into a totally new business sector.

To give you an idea, here in the United States, if Facebook were to start a brand new web search engine, that might feel like a slightly strange thing to do. Why would Facebook build a search engine? It’s really difficult. But that sort of thing is much more thinkable in China, where there is more of an assumption that there will be new creative business models.

I didn’t finish the article because there was an important NBA playoff game that I needed to watch…

British fondness for conservatives doesn’t mean anything for the U.S. election in 2016


Britons rejected a Labour Party Manifesto that is pretty similar to what Democrats here in the U.S. promise voters, e.g.,

Britain’s route to prosperity and higher living standards is through more secure and better paid jobs. But Conservative policies are causing whole sectors of the economy to be dragged into a race to the bottom on wages and skills. The Government has weakened employment rights and promoted a hire-and-fire culture. Labour believes our economy can only succeed in a race to the top – competing in the world with better work, better pay and better skills. Too many people do a hard day’s work but remain dependent on benefits. We will raise the National Minimum Wage to more than £8 an hour by October 2019, bringing it closer to average earnings. We will give local authorities a role in strengthening enforcement against those paying less than the legal amount. … Labour will ban exploitative zero-hours contracts. Those who work regular hours for more than 12 weeks will have a right to a regular contract. We will abolish the loophole that allows firms to undercut permanent staff by using agency workers on lower pay.

We will introduce tougher penalties for those abusing the tax system, end unfair tax breaks used by hedge funds and others, and bear down on disguised employment.

In other words, the rich will be taxed, the working class will earn more without having to develop any new skills, and the government will decide what are fair wages, at least for people towards the bottom of the wage distribution.

Should the Conservative victory in the UK lead to skepticism about my prediction that Republicans cannot possibly win the 2016 Presidential election? I don’t think so. The U.S. tends to lag Britain politically and economically by at least a few decades. Britons endured many decades of economic stagnation (chronicled and explained by Mancur Olson) and watched the defeated Germans and the invaded French overtake them economically before questioning the idea that government was going to solve all of their problems. Americans, on the other hand, still have a strong prejudice in favor of drama, expecting growth, and can’t accept that boring stagnation while interest groups fight over the scraps (Mancur Olson-style) is a real possibility.

A voter who expects growth as a birthright isn’t going to listen to Republicans talking about how taxes and regulation need to be reduced to encourage economic growth.

[Separately, a Web site whose initial programming friends and I were involved with (back in the 1990s) is supporting the election news. made IRS Form 990s (tax returns of non-profit organizations) readily available.  Here’s an analysis of the Clinton Foundation’s spending that links to the 990s on Guidestar.]

Collecting Medicare cash on the way up and on the way down


In 2009, Atul Gawande wrote “The Cost Conundrum” about how physicians in McAllen, Texas were making serious bank from running Medicare patients through extra tests, typically at facilities that they themselves own. “Overkill” (New Yorker, May 11, 2015) is a kind of follow-up. It turns out that the docs who previously ran up the huge bills now each get $800,000 from an Obamacare provision that rewards doctors who reduce the government’s costs.

[Separately the article notes that between 25-42 percent of Medicare patients per year get an expensive unnecessary test or treatment. Dr. Gawande says that our fancy machines are best at finding cancers that grow so slowly we’ll probably die of something else before they grow to become a real problem (the cancer is thus dubbed a “turtle”). Unfortunately they are not good at finding the fast-growing cancers (“rabbits”), which is why cancer death rates haven’t moved much.]

Epic taxpayer-funded child support lawsuit results in $28/week award


“New Jersey woman learns her twins have two dads at child support hearing” is a story Guardian about a lawsuit intensive enough to warrant a 22-page opinion by a government employee (the judge). What was at stake? The final award was $28/week in child support (we can presume that the defendant was not a big earner). As is typical when low-income men are sued, reveals that father was the only person in the courtroom who was neither an attorney nor represented by an attorney (a quick Google search shows that Liana Allen, who worked for the mother/government, has an “Esq.:” after her name). (Failure to pay child support results in imprisonment but it is not technically a criminal matter and therefore the defendants have no right to an attorney.)

Don’t forget that the taxpayers will get to pay public employees to handle at least the prosecution and judging of one more lawsuit based on this mother. The mother and/or the office of child support enforcement on its own can pursue the man or men who may be the genetic father of the other twin….


  • “Citizens and Legislators” chapter of Real World Divorce, in which the possibility of exempting low-income defendants from the litigation/imprisonment system of extracting child support

A non-profit organization in the Boston area that needs a heavy-duty laser printer?



I have an HP 2605 workgroup printer (hooks up to hard-wired Ethernet and then can print, supposedly, up to 35,000 pages per month; I have printed only 22,000 pages on it). Much cheaper and more reliable than an inkjet. I am replacing it with a LaserJet M553dn because the color accuracy has degraded to the point that it isn’t useful for printing photos (tried this cleaning procedure which had previously worked but it did not this time). I have some extra toner for the printer as well (the toner is worth about $300 at retail).

Does anyone know of a non-profit org in the Boston area that would be able to use this? It should be someone who needs to print a fair amount of black and white. I will provide delivery and setup.

Thanks in advance for any ideas.

Universities are so good at marketing that they have to pay contractor to help them give away the product


“Venture Capitalists Help Connect Low-Income Students With Elite Colleges” is a WSJ article about a Silicon Valley startup that gets paid by elite universities with lavish marketing budgets to find low-income high school students to whom the schools can give away the product. (To call the university experience an “education” is a stretch for a lot of majors, as noted in Academically Adrift.)

Here are some choice quotes:

… QuestBridge, conceived in 2003 to connect disadvantaged students with elite colleges that pay a recruiting fee for the services.

“It seemed too good to be true and I thought it was a scam,” Francisco Guzman, who grew up in a low-income household in Elizabeth, N.J., said of when he first received a QuestBridge application by email. He landed a full scholarship to Stanford, and the 25-year-old is now a senior product designer for an Internet startup in San Francisco.

Students fill out online applications, and finalists are chosen by QuestBridge based on factors including academic performance, financial need and personal experiences such as having to work while attending school to help support their families. The list of finalists is sent electronically to participating colleges for their selections.

Vassar College in Poughkeepsie, N.Y., accepted 22 QuestBridge applicants in 2008; last fall, that number increased to 70, representing 10% of its freshman class, said Art D. Rodriguez, dean of admission and financial aid.

If this QuestBridge startup is so much better than the (presumably vastly more expensive) college’s full-time staff, why not outsource all of the recruitment, not just recruiting for low-income students?

Quality is Job #?: The American workforce in Boston and Denver


A recent trip to Denver provided some insight into the American workforce to which politicians are ever-eager to supply raises (using employers’ money, naturally).

It started at Massport’s newly renovated Terminal B, whose budgeted cost was $124 million (Globe). The public WiFi was completely non-functional, as is typical at Logan Airport. Frustrated passengers, each of whom paid a fat fee (through their airline ticket purchase) to be there, could be heard asking each other “Did you get it to work?”

[We did better than New Yorkers financially; they are planning to spend $4 billion to update one of the terminals at LaGuardia (nytimes). This is just slightly less than what Dubai spent to build the largest building in the world. The new LaGuardia terminal is supposed to be 1.3 million square feet (source) compared to 18.4 million square feet for Dubai. So it will cost Americans nearly 13X as much per square foot, assuming that the LGA project comes in on budget. What’s interesting about this is that U.S. airlines say that the only reason Emirates can out-compete them is that Emirates is subsidized. (USA Today) Is it surprising to have lower costs when your main hub is in a country that builds stuff for 1/13th what it costs big-city Americans?]

Denver International Airport does have working WiFi (apparently one massive tech failure was enough for that airport).  The “Uber Select” driver, an immigrant from West Africa, had a fancy Mercedes but was unable to locate the 200-room downtown Ritz-Carlton. The “Uber Black” driver, an Arab immigrant, on the return trip had a yet-more-expensive car but was unable to operate the climate control system in automatic mode (it was an unseasonably cold rainy day and he arrived shivering with the system set to “Lo” temp and with manual fan set at about 75 percent; when I suggested raising the temperature above “Lo” he cranked up the fan speed to 100 percent).

What seems to be missing from the debate about wages in the U.S. is any discussion of worker quality. It is almost a Zen koan: What is the market wage for a WiFi engineer who can’t deliver WiFi?

Log in