> I desire people’s opinions on Kamil Galeev as a source
He seems to be able to quickly compile vast amounts of information that are deep and broad and interesting. Miraculously, somehow his points are well suited to the medium of "a giant string of pithy tweets."
ALSO I frequently worry he's exaggerating some point for the sake of storytelling, but can't yet figure out how much to worry about that.
He's definitely selecting the facts that fit his Narrative at all times - this is an attempt at model building, but at presenting the model rather than constructing it. Which is fine, if we know that, and can rely on what is presented to be an attempt at an accurate model, you adjust. But isn't OK if the selected stuff isn't reliable enough.
I want to quibble a bit about the price of gasoline and petroleum in general increasing being a good thing. Higher prices are a cost weighed against the benefits we want, eg driving a car instead of walking. Prices increasing help us self ration, which is good, but better to not have to ration. Rationing is what you want when there is a limited supply to be allocated; when the supply is only limited by fiat and not actual supply, rationing is all cost. We want people to use less oil because there are better ways to achieve their ends, not because we simply make using the oil we have plenty of extra expensive.
I am not sure if you understand what the word "good" means. Or "unalloyed". If people prefer to drive their car instead of walking, biking or using public transit, but are made unable to do so because of artificially high prices, that is a bad, in economic terms. Perhaps it has a little good in it for those people who want to make decisions for other people based on what they think is best, but for the people actually made to walk, bike or take public transit who don't want to, it's a bad.
Right, I meant that in the sense that we believe there is a social cost to using oil and we'd prefer people use less - and the *marginal* cost of using oil actually seems very high right now - we prefer higher to lower prices, if we can do so in a fair way (e.g. distribute the funds raised to those consumers who bear the tax burden), and some of the tax incidence will also be on producers which seems great.
1: The marginal cost of producing more oil is higher now, but only because of government fiat. The administration curtailed oil production limiting supply, thus driving up the price. The cost of producing oil thus has no bearing on actual supply constraints; high oil prices need not be so, if only we would stop hurting ourselves.
2: Preferring higher to lower prices for goods that have externalized social costs beyond those internalized by the consumers is only a good idea if the higher prices push you towards the more socially optimal equilibrium quantity. At any given price is it not obvious that the price should be higher. It is entirely possible that the excess price over corrects, lowering total social surplus and making everyone worse off than a lower price would be. That's the entire problem with Pigouvian taxation, and the reason he backed away from the notion in his later career: if you don't set the tax correctly you can cause as much or more social damage than the suboptimal natural equilibrium did.
3: Tax incidence depends on elasticity. Most consumers do not have reasonable alternatives to using gasoline, particularly in the short term (<1 year say). Producers of gasoline can easily produce less, on the other hand. As a result, we can expect most of the tax incidence will fall upon consumers, and especially the rural poor who both lack access to mass transit and can't afford electric cars.
As to distributing the funds fairly... that might be a neat trick. Historically governments seem really, really bad at that, assuming they even have tried.
Very thoughtful. How and when do we make clear that we would be willing g to roll back sanctions and under what circumstances? I think we must be willing to do so without insisting that Putin "resign."
So, the likely best outcome, barring Putin being ousted from power (and replaced by someone better) is a situation where there is a perception that Putin has in part "gotten away with it."
I worry that the political/media environment is so fiercely anti-Russian that this solution would be difficult domestically for any Western politician to support.
I presume that we could offer to walk back any *official* sanctions upon an acceptable deal to end the war, but/because there are a lot of private sanctions that will not so easily reverse themselves, and also Russia did some self-sanctioning that will permanently damage private willingness to invest and do business, and because risk of this happening again is everpresent.
I'd guess private sanctions should be expected to end more quickly than official ones. The sanctioner in a private situation is actually giving up on a economically beneficial exchange.
Obviously you're right that they may reconsider whether prospective trade will still be profitable, but as long as the profit opportunity is still there, private enterprise has a strong motive to engage in trade.
When it comes to nuclear power as an alternative to other green energy sources, what is to be done about the waste generated? Use of an Accelerator-Driven System? Vitrification? I'm pretty ignorant on the subject, and most of the (older) family members I've spoken to retain fears of a potential meltdown. Would you suggest any particular resources?
The amount of actual waste produced by reactors is very small, on the order of a shipping container or two for all the waste produced in the US to date I am told. It weighs a lot, but the volume is very small. Some of that can be recycled, but I hear conflicting things about how much of a pain that is compared to just storing it.
>Yet we cannot build any new plants, because the official policy is to never approve a new plant. We have defined an unsafe nuclear plant as a plant that is capable of producing energy at competitive prices - if the prices would be competitive, the official policy is to insist on additional money spent on safety, without regard to any sort of cost/benefit.
This is very much the opposite of official policy; see NEIMA, see anything the Nuclear Regulatory Commission has ever said about advanced reactors and small modular reactors.
I think Zvi is using "official" to mean "unofficial," but that could be very misleading to anyone who doesn't know what he's doing and doesn't follow nuclear issues.
So your prior policy proposals are obviously correct[1], but is there anything that you've switched on? Like, "I used to oppose X but now I support X" because of this war?
Let's maybe add in that it would be highly effective altruism these days to have somebody 'look after' Russian nuclear weapons. Some of those might otherwise 'disappear' in exchange for a few dollars, as their army and economy seems to be more or less in disarray right now.
My suggestion; there are not good and bad countries. Countries create alliances according to their interests. The other suggestion is to look at China, India, Pakistan, Turkey, Iran are countries that feel and want to be actors, players in the world theatre and not public. Maybe it is time for a multipolar world.
> I desire people’s opinions on Kamil Galeev as a source
He seems to be able to quickly compile vast amounts of information that are deep and broad and interesting. Miraculously, somehow his points are well suited to the medium of "a giant string of pithy tweets."
ALSO I frequently worry he's exaggerating some point for the sake of storytelling, but can't yet figure out how much to worry about that.
He's definitely selecting the facts that fit his Narrative at all times - this is an attempt at model building, but at presenting the model rather than constructing it. Which is fine, if we know that, and can rely on what is presented to be an attempt at an accurate model, you adjust. But isn't OK if the selected stuff isn't reliable enough.
Excellent post.
I want to quibble a bit about the price of gasoline and petroleum in general increasing being a good thing. Higher prices are a cost weighed against the benefits we want, eg driving a car instead of walking. Prices increasing help us self ration, which is good, but better to not have to ration. Rationing is what you want when there is a limited supply to be allocated; when the supply is only limited by fiat and not actual supply, rationing is all cost. We want people to use less oil because there are better ways to achieve their ends, not because we simply make using the oil we have plenty of extra expensive.
I am not sure if you understand what the word "good" means. Or "unalloyed". If people prefer to drive their car instead of walking, biking or using public transit, but are made unable to do so because of artificially high prices, that is a bad, in economic terms. Perhaps it has a little good in it for those people who want to make decisions for other people based on what they think is best, but for the people actually made to walk, bike or take public transit who don't want to, it's a bad.
Right, I meant that in the sense that we believe there is a social cost to using oil and we'd prefer people use less - and the *marginal* cost of using oil actually seems very high right now - we prefer higher to lower prices, if we can do so in a fair way (e.g. distribute the funds raised to those consumers who bear the tax burden), and some of the tax incidence will also be on producers which seems great.
Three things there:
1: The marginal cost of producing more oil is higher now, but only because of government fiat. The administration curtailed oil production limiting supply, thus driving up the price. The cost of producing oil thus has no bearing on actual supply constraints; high oil prices need not be so, if only we would stop hurting ourselves.
2: Preferring higher to lower prices for goods that have externalized social costs beyond those internalized by the consumers is only a good idea if the higher prices push you towards the more socially optimal equilibrium quantity. At any given price is it not obvious that the price should be higher. It is entirely possible that the excess price over corrects, lowering total social surplus and making everyone worse off than a lower price would be. That's the entire problem with Pigouvian taxation, and the reason he backed away from the notion in his later career: if you don't set the tax correctly you can cause as much or more social damage than the suboptimal natural equilibrium did.
3: Tax incidence depends on elasticity. Most consumers do not have reasonable alternatives to using gasoline, particularly in the short term (<1 year say). Producers of gasoline can easily produce less, on the other hand. As a result, we can expect most of the tax incidence will fall upon consumers, and especially the rural poor who both lack access to mass transit and can't afford electric cars.
As to distributing the funds fairly... that might be a neat trick. Historically governments seem really, really bad at that, assuming they even have tried.
Very thoughtful. How and when do we make clear that we would be willing g to roll back sanctions and under what circumstances? I think we must be willing to do so without insisting that Putin "resign."
So, the likely best outcome, barring Putin being ousted from power (and replaced by someone better) is a situation where there is a perception that Putin has in part "gotten away with it."
I worry that the political/media environment is so fiercely anti-Russian that this solution would be difficult domestically for any Western politician to support.
I presume that we could offer to walk back any *official* sanctions upon an acceptable deal to end the war, but/because there are a lot of private sanctions that will not so easily reverse themselves, and also Russia did some self-sanctioning that will permanently damage private willingness to invest and do business, and because risk of this happening again is everpresent.
I'd guess private sanctions should be expected to end more quickly than official ones. The sanctioner in a private situation is actually giving up on a economically beneficial exchange.
Obviously you're right that they may reconsider whether prospective trade will still be profitable, but as long as the profit opportunity is still there, private enterprise has a strong motive to engage in trade.
When it comes to nuclear power as an alternative to other green energy sources, what is to be done about the waste generated? Use of an Accelerator-Driven System? Vitrification? I'm pretty ignorant on the subject, and most of the (older) family members I've spoken to retain fears of a potential meltdown. Would you suggest any particular resources?
Congrats on the newborn, that's awesome news!
The amount of actual waste produced by reactors is very small, on the order of a shipping container or two for all the waste produced in the US to date I am told. It weighs a lot, but the volume is very small. Some of that can be recycled, but I hear conflicting things about how much of a pain that is compared to just storing it.
>Yet we cannot build any new plants, because the official policy is to never approve a new plant. We have defined an unsafe nuclear plant as a plant that is capable of producing energy at competitive prices - if the prices would be competitive, the official policy is to insist on additional money spent on safety, without regard to any sort of cost/benefit.
This is very much the opposite of official policy; see NEIMA, see anything the Nuclear Regulatory Commission has ever said about advanced reactors and small modular reactors.
I think Zvi is using "official" to mean "unofficial," but that could be very misleading to anyone who doesn't know what he's doing and doesn't follow nuclear issues.
So your prior policy proposals are obviously correct[1], but is there anything that you've switched on? Like, "I used to oppose X but now I support X" because of this war?
[1] because they are largely mine
Let's maybe add in that it would be highly effective altruism these days to have somebody 'look after' Russian nuclear weapons. Some of those might otherwise 'disappear' in exchange for a few dollars, as their army and economy seems to be more or less in disarray right now.
Yes. Definitely a good idea.
My suggestion; there are not good and bad countries. Countries create alliances according to their interests. The other suggestion is to look at China, India, Pakistan, Turkey, Iran are countries that feel and want to be actors, players in the world theatre and not public. Maybe it is time for a multipolar world.