Blogging Break

I will be away for 2 weeks from today for my Annual State Indenturement, also known by the acronym ICT.

Given that work and other committments are likely to pile up in the interim, I don't expect to post anything new until perhaps in about 3 weeks.

Check back then for new updates.

Later.

Singaporean's net wealth higher, really?

The New Paper today (23 November 2008) ran a column by "Harvard-trained economist" Zhen Ming, who's self-styled moniker is Boston Brahmin. It's on page 16 if you have a copy of it handy.

The gist of the column had to do with the net wealth of the average Singaporean household, and how despite the recession, the average Singapore household has actually grown in wealth and is in relatively good shape for the economic downturn. I reproduce the statistics below:

                                              End-2000                             End-2006

Assets

Currency & Deposits          $136,310                               $157,930

Shares and Securities         $75,340                                 $120,360

Life Insurance Equity        $30,750                                 $76,820

CPF/Pension Funds           $94,190                                 $119,930

Residential Property          $386,830                               $384,920

Total Assets                     $723,420                              $859,970

Liabilities                              

Mortgage Loans                  $106,800                               $110,390

Personal Loans                    $38,450                                 $39,180

Total Liabilities             $145,250                              $149,570

NET WEALTH                 $578,160                              $710,400

The source is from the Yearbook of Statistics Singapore, 2008. Interestingly, the figures that Zhen Ming cites are slightly different from those I found online (p. 201), but they are in the same ballpark (no foul there).

This column is a reminder why everyone should school themselves to have at least a passing familiarity with statistics.

What are the problems here?

First up, "average wealth of the Singaporean household" can refer to the mean, median or mode. In this case, (I have to admit that I didn't check) it seriously looks like the figures refer to a mean rather than the median. There is good reason to believe this since households run the gamut from young couples with no kids, to nuclear families to retirees whose children have flown the nest. Each of these types of households have a different spread of assets vs liabilities (retirees are likely to have much less in the way of liabilities vs young couples) so it wouldn't really make sense to calculate a median instead of a mean.

Now what's wrong with reporting the mean. Nothing, except that it is well known that Singapore has a high and rising Gini coefficient (p. 14) and that the mean conceals the fact that many Singaporeans have far less in the way of net assets than the figures above suggest. 

Next, time lags in the data being reported. The Yearbook of Statistics provides data only up to end-2006 (which admittedly was still boomtimes), and Zhen Ming compares these figures to end-2000 (when Singapore was just coming out of the Asian Financial Crisis). I think it's safe to say that the comparison in net wealth between these two periods, while informative, tells us little that we would not otherwise expect. Oh, and if you're thinking of the comparison between end-2000 vs end-2006 and vs end-2008, I also think that it's safe to say that the economic environment in 2008 has deteriorated markedly since end-2006 (like duh).

In particular, assets such as currency deposits (especially forex holdings in AUD and NZD, highly popular among naive Singaporeans for their high interest rates), shares and securities, equity-linked endowment assurances, and real estate are likely to have fallen in value since end-2006 (and will continue to fall in value).

Finally, the effects of inflation may not have been accounted for. If they haven't been adjusted, the figures for end-2006 should be deflated by approximately 4.32% going by the CPI figures reported by Singstat. Adjusting for inflation however, does not address the other problems I have listed above. It's also pertinent to note that inflation has been especially detrimental to the finances of the lower income groups, particularly since it has been reported in the past that their real income has actually fallen in past years.

[I understand the irony in analyzing an article published in a tabloid like the New Paper in such detail as I have done here, but the same accusation could be levelled at Zhen Ming. Harvard-trained or not, telling the typical downmarket New Paper readership that their average household wealth is north of half a million dollars is to invite ridicule.]  

"Lobbyist-Bashing by Obama Doesn't Dim Industry's Boom Forecast"

From Bloomberg News
By Jonathan D. Salant and Kristin Jensen

Nov. 20 (Bloomberg) -- Lobbyists Heather and Tony Podesta took over a Denver restaurant during the Democratic National Convention in August to host a party for lawmakers and other power brokers. Their guests wore Barack Obama buttons. The Podestas were wearing a label of their own: a scarlet ``L.'' 

The tags were an allusion to President-elect Obama's demonization of lobbyists throughout the campaign, even banning them from raising money for him or making contributions. 

Now, with Obama ready to take office in January, lobbyists aren't quavering with fear. Many view the changed political landscape in Washington as a potential boon for their firms, which will be called upon to help clients navigate Congress and a new administration. 

``We're not worried,'' said former Democratic Representative Vic Fazio of California, now a senior adviser at the law and lobbying firm Akin Gump Strauss Hauer & Feld LLP. ``We will do well.'' 

Obama has a number of people affiliated with lobbying firms on his transition team, and yesterday, former Senate Majority Leader Tom Daschle accepted an offer to be secretary of Health and Human Services. Daschle, who will lead the new administration's effort to revamp the U.S. health-care system, works for Alston & Bird LLP. 

Daschle has been able to serve as an Obama campaign adviser because he wasn't registered as a lobbyist, though his firm earned $3.5 million this year lobbying for the health industry, including companies such as Woonsocket, Rhode Island-based CVS/Caremark Corp. and Birmingham, Alabama-based HealthSouth Corp. The health industry accounted for 60 percent of the firm's lobbying revenue during the first nine months of 2008. 

Lobbyist-Bashing 

Fazio and other prominent members of the influence-peddling community said the lobbyist-bashing by Obama, 47, and Republican nominee John McCain, 72, hasn't had a lasting impact. It is one thing to rail against lobbyists in a campaign and another to curb their influence in practice, they said. 

``Both men are sophisticated enough to know lobbyists play a vital First Amendment role in our governmental process,'' said former Republican Representative Robert Walker of Pennsylvania, now chairman of Wexler & Walker Public Policy Associates, a Washington lobbying firm. 

During the campaign, both Obama and Arizona Senator McCain criticized the influence of lobbyists and the interests they represent. 

`Status Quo' 

``When we come together, our voices are more powerful than the most entrenched lobbyists, or the most vicious political attacks, or the full force of a status quo in Washington that wants to keep things just the way they are,'' Obama said at a rally in Florida on Nov. 3, the day before the election. 

After winning, Obama announced that lobbyists would be prohibited from contributing to his transition committee, and that they couldn't serve as advisers on any issues where they had been paid to represent a company's interests. 

Even so, firms such as Walker's, which was paid $6 million to lobby in the first nine months of 2008, and Patton Boggs LLP, which received $29.8 million, report an increase in business from companies and other interest groups. 

With the election past, ``people are a lot nicer to me,'' said Gerry Sikorski, a former Democratic lawmaker from Minnesota who runs the government section at Holland & Knight LLP, which was paid $11.1 million. ``I know I'm not a better person today than I was Nov. 3.'' 

Lobbyists expect the demand to continue. 

`Respected People' 

``People will want to hire knowledgeable and respected people in Washington who have a lot of insight and knowledge about the players and the ability to fashion appropriate outreach to decision makers,'' said Fazio, whose firm was paid $26.9 million to lobby during the first nine months of 2008, second only to Patton Boggs in revenue, according to the Center for Responsive Politics, a Washington-based research group. 

There also will be a new demand for Washington veterans who aren't registered to lobby but nonetheless wield influence because of their knowledge of the White House and Capitol Hill such as Daschle, said former Democratic National Committee National Chairman Joe Andrew. 

``What you will find is a return of the Washington lawyer, someone who is not a lobbyist but has legitimate substantive experience,'' said Andrew, who isn't registered to lobby, though his law firm, Sonnenschein Nath & Rosenthal LLP, was paid $5.1 million in 2008. 

Internet Grassroots 

Still, the lobbying industry recognizes that it will have to function in a new environment. For one thing, lobbyists will face competition from the Internet, which Obama's campaign showed can be a powerful tool to generate grassroots support for candidates or issues. Lobbyists will be pressured to demonstrate that their position has broad support or to show why a lawmaker should support their client's position in the face of a grassroots uprising for the other side. 

``You're going to have traditional lobbying side by side with e-lobbying side by side with new transparency side by side with diverse groups and interests and causes,'' Sikorski said. ``It'll be a new field for all of us to work in.'' 

Besides, said Nick Allard, a partner at Patton Boggs, lobbyist-bashing isn't a recent phenomenon. 

``Lobbyists have been around at least since the Garden of Eden, when the serpent persuaded Eve that knowledge was a good thing,'' Allard said. ``Look at what reward the serpent got.''

"Bark Beetles Kill Millions of Acres of Trees in West"

From The New York Times
By JIM ROBBINS
Published: November 17, 2008 

HELENA, Mont. — On the side of a mountain on the outskirts of Montana’s capital city, loggers are racing against a beetle grub the size of a grain of rice.

From New Mexico to British Columbia, the region’s signature pine forests are succumbing to a huge infestation of mountain pine beetles that are turning a blanket of green forest into a blanket of rust red. Montana has lost a million acres of trees to the beetles, and in northern Colorado and southern Wyoming the situation is worse. 

“We’re seeing exponential growth of the infestation,” said Clint Kyhl, director of a Forest Service incident management team in Laramie, Wyo., that was set up to deal with the threat of fire from dead forests. Increased construction of homes in forest areas over the last 20 years makes the problem worse. 

In Wyoming and Colorado in 2006 there were a million acres of dead trees. Last year it was 1.5 million. This year it is expected to total over two million. In the Canadian provinces of British Columbia and Alberta, the problem is most severe. It is the largest known insect infestation in the history of North America, officials said. British Columbia has lost 33 million acres of lodgepole pine forest, and a freak wind event last year blew mountain pine beetles, a species of bark beetle, over the Continental Divide to Alberta. Experts fear that the beetles could travel all the way to the Great Lakes. 

In the next three to five years, Mr. Kyhl said, virtually all of Colorado’s lodgepole pine trees over five inches in diameter will be lost, about five million acres. “Already in many places, every lodgepole over five inches is dead as far as the eye can see,” he said.

Foresters say the historic outbreak has several causes. Because fires have been suppressed for so long, all forests are roughly the same age, and the trees are big enough to be susceptible to beetles. A decade of drought has weakened the trees. And hard winters have softened, which allows the beetles to flourish and expand their range.

Hoping to keep their forests from completely dying, to earn money by selling dead and infected trees and to mitigate fire risks, landowners are scrambling to cut the pines. If enough are cut — up to 75 percent — it might leave some behind that, with less competition for water, can survive. Still, for many landowners, cutting most of the forest where they have they built their homes is painful. “I’ve literally had people in my office crying,” said Gary Ellingson, a forestry consultant for Northwest Management.

The black, hard-shelled beetle, the size of a fingertip, drills through pine bark and digs a gallery in the wood where it lays its eggs. When the larvae hatch under the bark, they eat the sweet, rich cambium layer that provides nutrients to the tree. They also inject a fungus to stop the tree from moving sap, which could drown the larvae. That fungus stains the wood blue.

“The Latin name is Dendroctunus, which means tree killer,” said Gregg DeNitto, a Forest Service entomologist in Missoula, Mont. “They are very effective.”

To fend off the bugs, trees emit white resin, which looks like candle wax, into the beetle’s drill hole. Sometimes the tree wins and entombs the beetle. Often, though, the attacker puts out a pheromone-based call for reinforcements and more of the beetles swarm the tree. In a drought the tree has trouble producing enough resin, and is overwhelmed.

There are some defenses. Owners nail to a tree an “aggregator pheromone” in a small packet, which mimics the chemical scent given off by beetles when a tree is full of insects. It can work when beetles are not too numerous, but at some point the beetles are not deterred.

Large, old, high-value trees, ones that shade campgrounds or yards, can be sprayed with an insecticide. But the trees need to be sprayed from the base to the height at which it is less than 4 inches around. Each tree costs about $10 to $15 if hundreds are sprayed. Lodgepole pines are largely confined to high altitudes. But the beetles have moved into ponderosa pine forests on Colorado’s front range, Mr. Kyhl said, which means it could kill forests around homes in the densely populated region. 
 
The beetles will only be truly checked, experts say, if temperatures that used to reach 30 and 40 below for weeks return to the Rockies, temperatures that have not been seen in decades. 

The death of the forests worries the tourism industry. Many ski areas have cut down their forests because of the hazard of falling trees and have revegetated the land. 

At Vail Ski Resort, for example, which has been particularly hard hit, workers have removed thousands of dead trees and planted new ones.

The dead trees that blanket the mountains are shifting ecosystems as well. In Yellowstone, for example, the beetles are killing the white-barked pine trees, which grow nuts rich in fat that are critical to grizzly bears in the fall. Biologists in Canada say streams will flash-flood because live trees will no longer catch snow and allow it to slowly melt, and it could injure salmon and destroy habitat. On the other hand, woodpeckers and other insect eaters will thrive.

Wildfire is the biggest threat. Some towns like Steamboat Springs and Vail, Colo., are surrounded by dead forests, and the Forest Service and logging companies are clear-cutting “defensible space” so firefighters have a place to fight fires. 

After the trees die, the risk of crown fires that move through the canopy is the threat. After four or five years, as the dead trees fall to the ground, the threat of catastrophic fire is most severe. Fires in the piles of logs severely damage soils, prevent regrowth and cause mudslides.

Rainfall on damaged ground could also lead to widespread mudslides and silt buildup in rivers and reservoirs, which many mountain communities depend on for water. Strontia Springs Reservoir, a main water source for Denver, required a $20 million cleanup after a large fire resulted in severe erosion. 

The other major problem is large numbers of falling trees. In Colorado and Wyoming, officials have closed 38 campgrounds for fear trees could fall on campers. They have reopened all but 14. 

But there is a lot more to do. “We know they are going to fall,” Mr. Kyhl said. “And they are going to fall in the next 10 to 15 years. There’s campgrounds, thousands of miles of road, picnic areas, power lines and trails. How do we keep the facilities open for people to use?”

The agency is faced with clearing a strip of 75 to 100 feet of dead trees along highways so they are not closed by blow downs. 

Then there is a question of what do with the wood. Sawmills have diminished in the West in recent years, and there are not enough mills to take all of the timber. 

In Colorado, entrepreneurs have been scrambling to find ways to use it. Two pellet plants have been built, which turn the trees into sawdust and then pack them into a clean-burning pellet used in wood stoves. 

Some trees are being shredded for use in biomass boilers, and carpenters are using the pine stained blue from the fungus for furniture. 

In Alberta, a newsprint mill is testing a system to use the millions of dead acres of pines. Because of the fungal stain the trees aren’t bright enough for paper, but a computerized process adjusts the amount of bleach. 

Still, the volume of timber used is small compared with the vast acreage of dead trees. 

The West that depends on tourism, meanwhile, wonders what their customers will think about the dramatic change in scenery. Four million visitors a year come for sightseeing and recreation to Grand County in Colorado, where much of the forest is now dead. “What happens,” said Ray Jennings, director of emergency management for Grand County, “if this becomes an ugly place to be?”

"Web Sites That Dig for News Rise as Watchdogs"

From The New York Times
By RICHARD PÉREZ-PEÑA
Published: November 17, 2008 

SAN DIEGO — Over the last two years, some of this city’s darkest secrets have been dragged into the light — city officials with conflicts of interest and hidden pay raises, affordable housing that was not affordable, misleading crime statistics.

Investigations ensued. The chiefs of two redevelopment agencies were forced out. One of them faces criminal charges. Yet the main revelations came not from any of San Diego’s television and radio stations or its dominant newspaper, The San Diego Union-Tribune, but from a handful of young journalists at a nonprofit Web site run out of a converted military base far from downtown’s glass towers — a site that did not exist four years ago.

As America’s newspapers shrink and shed staff, and broadcast news outlets sink in the ratings, a new kind of Web-based news operation has arisen in several cities, forcing the papers to follow the stories they uncover.

Here it is VoiceofSanDiego.org, offering a brand of serious, original reporting by professional journalists — the province of the traditional media, but at a much lower cost of doing business. Since it began in 2005, similar operations have cropped up in New Haven, the Twin Cities, Seattle, St. Louis and Chicago. More are on the way.

Their news coverage and hard-digging investigative reporting stand out in an Internet landscape long dominated by partisan commentary, gossip, vitriol and citizen journalism posted by unpaid amateurs.

The fledgling movement has reached a sufficient critical mass, its founders think, so they plan to form an association, angling for national advertising and foundation grants that they could not compete for singly. And hardly a week goes by without a call from journalists around the country seeking advice about starting their own online news outlets.

“Voice is doing really significant work, driving the agenda on redevelopment and some other areas, putting local politicians and businesses on the hot seat,” said Dean Nelson, director of the journalism program at Point Loma Nazarene University in San Diego. “I have them come into my classes, and I introduce them as, ‘This is the future of journalism.’ ”

That is a subject of hot debate among people who closely follow the newspaper industry. Publishing online means operating at half the cost of a comparable printed paper, but online advertising is not robust enough to sustain a newsroom.

And so financially, VoiceofSan Diego and its peers mimic public broadcasting, not newspapers. They are nonprofit corporations supported by foundations, wealthy donors, audience contributions and a little advertising.

New nonprofits without a specific geographic focus also have sprung up to fill other niches, like ProPublica, devoted to investigative journalism, and the Pulitzer Center on Crisis Reporting, which looks into problems around the world. A similar group, the Center for Investigative Reporting, dates back three decades.

But some experts question whether a large part of the news business can survive on what is essentially charity, and whether it is wise to lean too heavily on the whims of a few moneyed benefactors.

“These are some of the big questions about the future of the business,” said Robert H. Giles, curator of the Nieman Foundation for Journalism at Harvard. Nonprofit news online “has to be explored and experimented with, but it has to overcome the hurdle of proving it can support a big news staff. Even the most well-funded of these sites are a far cry in resources from a city newspaper.”

The people who run the local news sites see themselves as one future among many, and they have a complex relationship with traditional media. The say that the deterioration of those media has created an opening for new sources of news, as well as a surplus of unemployed journalists for them to hire.

“No one here welcomes the decline of newspapers,” said Andrew Donohue, one of two executive editors at VoiceofSanDiego. “We can’t be the main news source for this city, not for the foreseeable future. We only have 11 people.”

Those people are almost all young, some of them refugees from older media. The executive editors, Mr. Donohue, 30, and Scott Lewis, 32, each had a few years of experience at small papers before abandoning newsprint. So far, their audience is tiny, about 18,000 monthly unique visitors, according to Quantcast, a media measurement service. 

The biggest of the new nonprofit news sites, MinnPost in the Twin Cities and the St. Louis Beacon, can top 200,000 visitors in a month, but even that is a fraction of the Internet readership for the local newspapers.

VoiceofSanDiego’s site looks much like any newspaper’s, frequently updated with breaking news and organized around broad topics: government and politics, housing, economics, the environment, schools and science. It has few graphics, but plenty of photography and, through a partnership with a local TV station, some video.

But it is, of necessity, thin — strictly local, selective in what it covers and with none of the wire service articles that plump up most news sites.

VoiceofSanDiego grew out of a string of spectacular municipal scandals. City councilmen took bribes from a strip club owner, a mishandled pension fund drove the city to the brink of bankruptcy and city officials illegally covered up the crisis, to name a few.

A semiretired local businessman, Buzz Woolley, watched the parade of revelations, fraud charges and criminal convictions, seething with frustration. He was particularly incensed that the pension debacle had developed over several years, more or less in plain sight, but had received little news coverage.

“I kept thinking, ‘Who’s paying attention?’ ” Mr. Woolley recalled. “Why don’t we hear about this stuff before it becomes a disaster?’ ”

In 2004, his conversations with a veteran columnist, Neil Morgan, who had been fired by The Union-Tribune, led to the creation of VoiceofSanDiego, with Mr. Woolley as president, chief executive and, at first, chief financial backer.

Most of this new breed of news sites have a whiff of scruffy insurgency, but MinnPost, based in Minneapolis, resembles the middle-age establishment. Its founder and chief executive, Joel Kramer, has been the editor and publisher of The Star Tribune, of Minneapolis, and its top editors are refugees from that paper or its rival, The Pioneer Press in St. Paul.

MinnPost is rich compared with its peers — with a $1.5 million bankroll from Mr. Kramer and several others when it started last year, and a $1.3 million annual budget — and it has been more aggressive about selling ads and getting readers to donate.

The full-time editors and reporters earn $50,000 to $60,000 a year, Mr. Kramer said — a living wage, but less than they would make at the competing papers. MinnPost has just five full-time employees, but it uses more than 40 paid freelance contributors, allowing it to do frequent reporting on areas like the arts and sports.

If MinnPost is the establishment, The New Haven Independent is a guerrilla team. It has no office, and holds its meetings in a coffee shop. The founder and editor, Paul Bass, who spent most of his career at an alternative weekly, works from home or, occasionally, borrows a desk at a local Spanish-language newspaper.

In addition to state and city affairs, The Independent covers small-bore local news, lately doing a series of articles on people who face the loss of their homes to foreclosure.

With a budget of just $200,000, it has a small staff — some are paid less than $30,000 — and a small corps of freelancers and volunteer contributors. It does not sell ads, which Mr. Bass says would be impractical.

“There’s room for a whole range of approaches, and we’re living proof that you can do meaningful journalism very cheaply,” Mr. Bass said.

Crosscut.com, a local news site in Seattle, does reporting and commentary of its own, but also aggregates articles from other news sources. It began last year as a business, but is changing to nonprofit status.

VoiceofSanDiego took yet another approach, hiring a crew of young, hungry, full-time journalists, paying them salaries comparable to what they would make at large newspapers and relying less on freelancers. Mr. Donohue and Mr. Lewis earned $60,000 to $70,000 last year, according to the VoiceofSan Diego I.R.S. filings. 

On a budget under $800,000 this year — almost $200,000 more than last year — everyone does double duty. Mr. Lewis writes a political column, and Mr. Donohue works on investigative articles. But the operation is growing and Mr. Woolley says he has become convinced that the nonprofit model has the best chance of survival.

“Information is now a public service as much as it’s a commodity,” he said. “It should be thought of the same way as education, health care. It’s one of the things you need to operate a civil society, and the market isn’t doing it very well.”

"Drip Irrigation May Not Be Efficient, Analysis Finds"

From The New York Times
By HENRY FOUNTAIN
Published: November 17, 2008 

In an effort to make irrigation more efficient — to obtain more “crop per drop” — farmers have adopted alternatives to flooding and other conventional methods. Among these is drip irrigation, shown above, in which water flows only to the roots. Drip systems are costly, but they save much water.

Or do they? A hydrologic and economic analysis of the Upper Rio Grande basin in the Southwest, published in The Proceedings of the National Academy of Sciences, suggests that subsidies and other policies that encourage conservation methods like drip irrigation can actually increase water consumption. 

“The take-home message is that you’d better take a pretty careful look at drip irrigation before you spend a bunch of money on subsidizing it,” said Frank A. Ward, a resource economist at New Mexico State University and author of the study with Manuel Pulido-Velázquez of the Polytechnic University of Valencia in Spain.

With flood irrigation, much of the water is not used by the plants and seeps back to the source, an aquifer or a river. Drip irrigation draws less water, but almost all of it is taken up by the plants, so very little is returned. “Those aquifers are not going to get recharged,” Dr. Ward said.

Drip irrigation also generally increases crop yields, which encourages farmers to expand acreage and request the right to take even more water, thus depleting even more of it. “The indirect effect is very possibly to undermine policy attempts to reduce water consumption,” Dr. Ward said.

Policymakers, he added, must balance the need for more food and for farmers to make a living with water needs. “It’s fair to say that subsidies are very good for food security and very good for farmer income,” Dr. Ward said. “But they may be taking water away from other people.”

Reactions?

I have added the new Reactions page element to my blog.

This gives readers the option of leaving one-click feedback instead of wordier comments. It's one more way for me to get some idea of what people are interested in reading. Not that I would 'play to the gallery', but it's nice to know if what I write is appreciated.  

And in case you're wondering who reads this blog, here's some information courtesy of Google Analytics:

This blog has got a very light but increasing readership of perhaps 25 regular readers (ignoring the effect of ad filtering mechanisms that block web analytics software), with numbers spiking considerably whenever I blog on something topical e.g. the Minibonds fiasco.

Most visitors are naturally from Singapore, but a surprisingly large number are based in London and the USA. I can only surmise that these are overseas Singaporeans. Other visitors come from all over (I had a visitor from Lesotho, go figure), but they typically do not linger, bouncing away after just a few seconds.

If the sample of visitors to my blog is any indicator, Firefox is becoming almost as popular as IE these days. Safari, Opera and Chrome account for only a tiny sliver of visitors.

And contrary to what you might think, of the people who read my blog, I know only a few people personally. I know this because the URL to my blog can be found in only one place that is linked to me personally, and that is my Facebook page (which I have configured to have strong privacy settings). Only a tiny number of referrals to my blog come from Facebook.