Capital Gains vs. Income

I'm watching the Iowa Republican Presidential Debate right now, and one of the candidates (I believe it was Gingrich, but I was out of the room and my voice recognition isn't quite that sharp) said he supported 0% capital gains tax. It sounds great from a "let's get people investing" perspective, but does it really make sense? I don't think so. In fact, I spent a good bit of time fretting about it this morning in the shower.

With most of our production automated or offshored, the real value in the global economy is increasingly created by investment rather than labor. The role of humans, and especially Americans, is increasingly to provide volition strategy, and discretion to large sums of money. The labor that we can neither offshore nor automate is mostly low-value, low-paying service work. The entire concept of an income tax, though, is based on the foundation of a large, prosperous middle-class of wage employees. They no longer exist.

If our economy is mostly driven by entrepreneurs, investors, and businessmen, why are we still trying to run the government out of the pockets of the non-existent employees?

The Government is Still in Our Hands

One of the dominant memes in recent political commentary (at least at the popular level) as been the failure of the two-party system. The ongoing (as of July 8th) standoff in congress over the debt ceiling is indicative of a larger trend in which party interests are placed so far ahead of national interests that, in the words of Sen. Chuck Schumer, "the best way to win is hurt the country as much as possible."

More Things That Conventional Engineering Analysis Would Never Tell You

As promised, today I'll write about our nation's food supply and how attempts to "engineer" it wound up drastically reducing the quality of our food.

Sometime in the first half of the 20th century (I'm a little fuzzy on exactly when and how it happened, but I expect that the Depression and WWII had a lot to do with it), food production and distribution reached a sort of tipping point and consumers traded fresh, natural products for processed, frozen or canned. The promise of drastically longer shelf life, lower prices, easier preparation, and year-round availability made the choice a simple one. Frozen vegetables and canned fruit replaced fresh, ground (and even instant!) coffee replaced whole beans, Jiffy Pop and later microwave popcorn replaced whole kernel, margarine and other hydrogenated oils replaced butter.

Half a century and more later, many consumers are turning back to the more natural, fresh, locally produced products for a variety of reasons. It has become known that vegetables lose a great deal of their nutritional value rather quickly after picking, and even more quickly upon cooking. Hydrogenated oils have recently been shown to contain trans-fats, practically unknown in the natural world and detrimental to human health. Consumers attitudes and preferences toward food also seem to be changing, with more emphasis being placed on quality than on convenience.

At thanksgiving last year, my grandfather was recounting the process behind a cup of coffee in his childhood: buying whole beans, roasting them, grinding them by hand at the beginning of the week, brewing them in a mesh sack in a pot. When I told him that I had begun grinding my own beans, he was mystified. Why go through so much effort when  I could just buy coffee grounds? A new generation of coffee drinkers is finally realizing that coffee loses its flavor very quickly after grinding, and opting to buy whole beans again and grind them ourselves just before drinking. Some even choose to roast their own. Improvements in "kitchen gadgets" -- countertop electric coffee grinders -- has made the process much easier and quicker than it was 70 years ago.

The case of coffee is illustrative of a much larger trend: that of decentralization or even deindustrialization. The cost and convenience benefits of mass production came at the cost of drastically reduced quality and utterly no individuality, but now these benefits are being realized at smaller scales that return some of the humanity to our products. The beauty in coffee is in the complexity of the organic molecules produced upon roasting of the beans. Their very complexity ensures them a short lifespan. Mid-century attempts to industrialize coffee roasting and grinding robbed coffee of the very thing that made it appealing to humans' complex sensory system, and the same case could be made for a wide range of food products. Now that we have tried the industrial strength approach and found its limitations, we are free to return to an older model that offers more value. When we bring back the old habits, though, we bring them back with a modern expertise and fewer of the hassles that led us away from them in the first place.

Experience Tells Us What Engineering Cannot

Here at the beginning of the 21st century, as our society struggles to move beyond the information revolution into a more complete, holistic post-industrial society, I notice a regressive trend in many areas of society. Now that we have applied several different levels of technology to some of our problems, we are capable of comparing the results and making informed decisions about their relative effectiveness. In many cases, technologies and techniques that were once prematurely considered obsolete are now being reintroduced (often with modern improvements) because they have proven superior to their supposed successors. Some good examples:

1. Streetcars
2. Whole bean coffee
3. Popcorn
   
4. Fresh produce
5. Windows
6. Sidewalks

Changes of Scenery

In the fall, I'll be starting a Ph.D. program in Materials Science and Engineering. I'm excited about it. I don't yet have any real idea what research project I'll be working on, but Marco Rolandi's group is doing some very interesting things at the interface between microfabrication and materials engineering. That's the exact realm I'm interested in, so I'd say his group looks promising.

What else looks promising: Seattle's public transportation infrastructure. I've already planned out a path for us to get from thee airport to our hotel and from our hotel to our new apartment the next day, and they're both very straightforward and painless routes. Easier than driving in Dallas!

A Handful of Thoughts on Nanotechnology

Have you heard of the chemical industry? It has developed mostly since World War II to a little fanfare from a few places, but its effects on life in the developed world have gone mostly unremarked-upon. It is because of this development (some might call it a revolution) that we have useful plastics. Ponder plastics for a moment.

The chemical revolution gave us not just useful plastics, but our entire modern approach to domestic problem-solving: buy chemicals! Practically all household cleaning products, most personal hygiene products, and even the modern pharmaceutical industry all spring directly from the chemical revolution. Chemistry has solved a whole host of problems we never knew were solvable: our clothes no longer have to come out of the dryer hard and scratchy, or even electrically charged; malodorous organic molecules no longer need be left to float freely in the air, assaulting our nostrils; washing our hair no longer must leave it dry and frizzy. Our societal mastery of molecular reactions has given us a vast toolbox from which to draw as we attempt to improve our lifestyles.

The least that nanotechnology has to offer would put it on the same scale as chemistry with regard to its effect on our lifestyles. Nanotechnology, like chemistry, is a vast toolbox from which we will be able to draw when we seek solutions to our problems. Like chemistry, nanotechnology will give rise to new classes of structural materials, new approaches to medicine, and new ways of controlling our environment. Nanotechnology's fundamental limits have often been argued, but even by the most conservative estimate the field could bring about just as much change as did chemistry.

The most that nanotechnology has to offer would put it closer to the scale of the industrial revolution. I leave you to ponder that thought for a while.

Put the Brakes on $4 per Gallon Gasoline at the Pump!

Repost from Facebook, which explains the more casual tone:

(I stole my title from David Vitter, whose strategy was "Drill more wells in the Gulf of Mexico!!!!")

You want my opinion on how to end our dependence on foreign oil? Eliminate the volatility of energy prices stimulate our high-tech sector? Impose a gasoline tax to pin the price to $4 per gallon. Use the proceeds to create an emergency fund to subsidize gas in the event that the price ever rises over $4, then give put the rest into the existing DoE grant structure for R&D in renewable (solar, not biofuel) energy.

Why $4 per gallon? As far as I know, prices have been that high only once before - summer of 2008, I believe. When they got that high, demand actually started to drop a little. So setting the price there might begin to reduce demand, but not enough to grind our economy to a halt. If we set it too much lower, we might not break even. But at $4 per gallon it's easy to compute the cost of a tank, gas stations can take down their signs, and everyone's happy. Right?

Why use the existing DoE grant structure? Because our need for investment in renewable energy infrastructure needs to be completely independent of this "taxidy" (that's a portmanteua of the words "tax" and "subsidy" in case you were wondering) program. If our DoE programs aren't good enough, we need to fix them before we start pouring all this money in, because the money that's being distributed through there now needs to be handled just as wisely. This should also prevent a lot of the political fighting over how the money will be used.

Why not biofuels? Because they're not sustainable, folks. Corn-based ethanol, by most measures, requires more energy to produce than you get back from burning it. That's right, its thermodynamic efficiency is negative. But its political efficiency is impressive, because Iowa is a swing state or something like that. Or because Monsanto has a powerful lobbying arm. . . Other biofuels may be more efficient than corn, and noncompetitive with our food supply, but they still can't really compete with solar energy. Solar energy won't power our cars any time soon, but once we have a cheap, stable electrical supply, getting the energy into the cars won't be nearly as difficult. Trust me on this; I know a lot more about emerging technologies at the fundamental level than you do (assuming you're a politician reading this note.)

That's the plan, and it should work until gas prices level out near or over $4 per gallon. At that time it shouldn't be too difficult to pass a rate hike to the existing program. Now we just need to elect a congress with the political will to enact this legislation. Here's a hint: David Vitter has got to go.