Some Cogent Nuclear Criticism

Michael Dittmar has an extremely detailed, four-part piece of criticism on the future of nuclear energy. He argues, in a nutshell:

• The rate of new construction for the next 5-10 can't keep pace with the rate of decommissioning, so nuclear's overall contribution to the energy budget will fall, at least in the short term.
• Primary U-235 production (mining and enrichment) currently only provides 66% of the fuel needed for the current reactor fleet, with the other 33% coming from secondary sources (reprocessing, enhanced extraction from tailings, and weapons conversion).
• Secondary production is likely to fall off a cliff as the weapons conversion programs wind down over the next few years.
• The IAEA "Red Book" numbers on available U-235 are unreliable, so the often-claimed statement that we have enough fuel for more than 100 years is questionable.
• Fast U-238-to-Pu-239 breeders are still toys and have unproven economics.
• Th-232-to-U-233 breeders are somewhat promising but are completely unproven technologically.
• Fusion will never work.

These four articles are very dense with facts and figures, and I can't vouch for their reliability. Still, this is a fairly persuasive indictment of the ability for nuclear power to be a major contributor in the transition away from fossil fuels.

UPDATE 11/21/09: There's a thread with more discussion on this here. Also, I fixed the link to part 4.

Superconducting Interconnects For Three Grids

Here's a bit on the Tres Amigas project, which proposes to interconnect the Eastern, Western, and Texas electrical grids with a limited set of superconducting DC lines so the various grids can shed or acquire power from each other. Not only is this an essential technology for dealing with intermittent resources (aka wind and solar) but it's a key test of longer-haul superconducting DC transmission technology.

The Seductiveness of Social Engineering

Engineers fall into two broad categories. There are optimistic engineers, who see the possibilities in an idea and become enthusiastic about it. Then there are pessimistic engineers, who like to spot problems with an idea before attempting to develop it.

In general, you need a few of both kinds of engineers for a successful project. I tend to be a pessimistic engineer--I like to find the problems and fix 'em before we try to build something.

But being a pessimistic engineer has an odd property. If you find a problem, and you fix it, you immediately start to behave like an optimistic engineer; you start to advocate for your solution, because you can see that it's better than the original, or some other solution. In short, on most projects, pessimistic engineers eventually become optimistic.

This temperment spills over into my views on public policy. So, for example, if I can work out a probable dynamic that causes public health insurance to erode the viability of private health insurance over time, I can come up with a health care scheme that avoids that problem. (Don't do that!) And if I can see that a bill that's all about insurance reform won't do anything to control health care costs, I can immediately start working on a solution that might be able to control costs. (Beef up HSAs, allow employers to dump the cash they spend on insurance into the HSA, and give employees a broad range of choices on how they wish to design their own health care.)

But, of course, my intuitions on health care policy suck.

Why, you ask? It's really very simple: Everybody's intuitions on health care suck, as do everybody's econometric models and other analyses. See, there's this little thing we learn about when we're geeks, called non-linear differential equations, which govern the dynamics of most problems. The thing is, we can't solve non-linear diffEQs as a rule. We can simulate them, but then chaos and complexity theory show us that our models are sensitive to all kinds of things we can't measure very well, and are therefore hopelessly flawed. The system involved in almost any public policy endeavor is so complex that the best we can do is try something, monitor it closely, and see if we can tweak it when things go wrong.

Occasionally, we blunder into a policy issue where the behavior of the system is almost linear. Preventing monopolies and requiring bank reserves and things like that are solutions that operate either in simple areas of an economic system, or act to reduce excursions that are so obviously bad that we're almost certain that the disease is worse than the cure.

However, here I am, yet another pessimistic engineer, modeling stuff in my head on public policy. Being a pessimistic engineer, I can spot the soft spots in the policy and I can propose solutions.

And then I'm hooked. I become an optimistic engineer. I want to twiddle with the system to implement my proposal to fixing the previous problem. But of course I'm now in a position where I actually think that we ought to do something to modify the system, even though I intellectually know that whatever I propose is likely to have flaws that are as bad as or worse than the ones I was attempting to solve.

If I'm feeling incredibly disciplined, I'll eventually realize that the proper solution to a social engineering problem is usually to do nothing or very little. I'll also remember that, even though I probably can't engineer a policy to make things better, the emergent properties of complex systems will usually self-organize to create a better (and stranger) solution than I could possibly have imagined.

I think this makes me a conservative. It also may go a long way towards explaining why the majority of public policy geeks are liberals. Even if you're a pessimistic social engineer, the temptation to fix problems in other people's solutions is irresistible, eventually turning you into a temporary optimistic engineers. You want to see something done.

The fact that what you propose doing will almost certainly make things worse never occurs to you until much later.

The Internet and the Anti-Counterfeiting Trade Agreement

From Cory Doctorow comes this fairly depressing report on the internet chapter of the current ACTA negotiations in Seoul:

The internet chapter of the Anti-Counterfeiting Trade Agreement, a secret copyright treaty whose text Obama's administration refused to disclose due to "national security" concerns, has leaked. It's bad. It says:

* That ISPs have to proactively police copyright on user-contributed material. This means that it will be impossible to run a service like Flickr or YouTube or Blogger, since hiring enough lawyers to ensure that the mountain of material uploaded every second isn't infringing will exceed any hope of profitability.

* That ISPs have to cut off the Internet access of accused copyright infringers or face liability. This means that your entire family could be denied to the internet -- and hence to civic participation, health information, education, communications, and their means of earning a living -- if one member is accused of copyright infringement, without access to a trial or counsel.

* That the whole world must adopt US-style "notice-and-takedown" rules that require ISPs to remove any material that is accused -- again, without evidence or trial -- of infringing copyright. This has proved a disaster in the US and other countries, where it provides an easy means of censoring material, just by accusing it of infringing copyright.

* Mandatory prohibitions on breaking DRM, even if doing so for a lawful purpose (e.g., to make a work available to disabled people; for archival preservation; because you own the copyrighted work that is locked up with DRM)

Since the Obama Administration is making such a big deal about network neutrality, I can't imagine that many of these provisions make it into anything remotely ratifiable, but I suppose the entertainment industry could yank Obama's chain hard enough to make him do something here.

I have no idea how to rework copyright to make it viable in the internet age. Obviously, something profound is going to have to happen. Fair use changes a lot in a hyperlinked world, and it is simply impossible to enforce copy protection long term. Content providers can derive some amount of value from convenient and reliable delivery services. (Oh, wait! No they can't--not with network neutrality in place.) And there is some market value associated with producing "free" content and getting people to through money into the hat. But I doubt sincerely that there would be enough money in it to produce a blockbuster movie.

Frankly, I'm not sure that we don't already have approximately the right system. Content providers lose a fair amount of money, but they can prop up their prices somewhat through scorched-earth enforcement actions. Their deterrent allow them to inflate their prices somewhat, while the threat of mass rebellion if they get too obstreperous prevents them from getting, well, too obstreperous.

This seems like one of those policy questions where the answer is going to self-organize from the bottom up. The less top-down government policy, the more likely that somebody will come up with the right business model.

A Hard Right to the Middle

I've been watching the NY 23 House race with a certain degree of sadness. I would certainly have to agree that Scozzafava deserved the RINO label more than most Republicans do. Owens seems to be a run-of-the mill moderate Democrat. If I had to vote in that election, I wouldn't be overjoyed with either of them, but I would have wound up deciding on the issues, not on their party affiliations.

Enter Hoffmann, who appears to be pretty much a down-the-line conservative. Nothing particularly wrong with that, and he has had the luxury of only having to espouse a conservative orthodoxy without doing extreme religious pandering to get to where he is today, which appears to be somewhat ahead of Owens. So, could be worse.

But there is something very, very wrong here, and it has to do with that conservative orthodoxy. We have Ross Douthat cheering Hoffmann as an entrant:

Hoffmann has irritated liberals. Scozzafava was their kind of Republican, and by derailing her candidacy — which she suspended over the weekend after polls showed her slipping to third place — he’s turned a sleepy contest between two left-of-center politicians into an ideologically-charged election.

But both men [Hoffmann and the NJ independent candidate for governor Chris Daggett] deserve the public’s gratitude. They’ve injected real substance into their races, and they’ve given voters a much more interesting choice than they would have otherwise enjoyed.

Interesting? Of course. And Douthat is of course a newspaper columnist--interesting sells copy. But choice? And substance? No way. Hoffmann's ascendancy turns the race into a cartoon. Scozzafava and Owens were pretty close to each other, so they presumably would have to have debated real issues. But with Hoffmann, there's no need to debate any more. Hoffmann is a "conservative," so a big chunk of the electorate either loves or loathes the label and is relieved of thinking any more.

This is the problem with these bi-polar orthodoxies; they're so entrenched that debating the issues is worthless, since they've been carefully engineered to agree on nothing. When you hate everything about the other guy's position, you're never going to look for areas where compromise is possible or, even better, where you can parlay the agreements into a genuinely new policy position.

The worst thing about Hoffmann has nothing to do with him as a candidate. It's that, in a close race where two relative moderates had to convince voters that they were subtly better that each other, we're now left with the usual vacuum in the center, where the bulk of the electorate can only choose which ideology they find slightly less offensive.

Afghanistan

If Iraq is the war that we probably shouldn't have started but had to win, Afghanistan is the war that we had to start but may not have to win.

Iraq is the most strategic location on the planet. It sits atop a lake of oil. Parts of that lake extend into countries less than friendly to the US. All of those countries can be influenced by the US projecting power into Iraq. Iraq's population is well-educated and dynamic, making it an ideal laboratory for experimenting with ways of liberalizing tribal autocracies. Finally, Iraq is the crossroads of the Middle East. If you control Iraq, you are the final arbiter of what nations get to project power where.

Afghanistan, as I have said before, is a pile of rocks. It's landlocked, with no natural resources. Its population is tribal and ignorant. It is a crossroads to nowhere. However, there are three strategic advantages to winning the war in Afghanistan:

1. It will stabilize Pakistan, a large country with nuclear weapons. Stabilization of Pakistan will be a great boon to India, which will almost certainly be the US's principal counterweight to China in South and East Asia.
2. It will complete the encirclement of Iran, which will act as a deterrent to whatever hegemonic ambitions that cesspool of a government might have.
3. Last but far from least, a victory in Afghanistan will prove that the US isn't utterly feckless. When we invade somewhere and tell the population that it will be better off because of our invasion, we'd better mean what we say.

Obama made a big deal about Afghanistan. It was as obvious then as it is now that his arguments were utterly craven, made only for political effect, so he could pander to the anti-Iraq crowd while still appearing to be sufficiently tough. Now that he has to govern, he has discovered that his rhetoric has boxed him into a corner.

So he's left with two unpalatable options. He can mumble "never mind" and hope that his credibility isn't permanently damaged. Or he can see the war through to its long, messy conclusion.

Ultimately, though, I think that strategic objective #3 above is the real reason we have to stick this out: We said we would make things better, and the rest of the world has to believe what we say. That means that Obama is going to have to swallow hard and do something contrary to every political instinct the man ever acquired.

Will he do it? David Brooks frames the issue quite well:

I’ve called around to several of the smartest military experts I know to get their views on these controversies. I called retired officers, analysts who have written books about counterinsurgency warfare, people who have spent years in Afghanistan. I tried to get them to talk about the strategic choices facing the president. To my surprise, I found them largely uninterested.

Most of them have no doubt that the president is conducting an intelligent policy review. They have no doubt that he will come up with some plausible troop level.

They are not worried about his policy choices. Their concerns are more fundamental. They are worried about his determination.

These people, who follow the war for a living, who spend their days in military circles both here and in Afghanistan, have no idea if President Obama is committed to this effort. They have no idea if he is willing to stick by his decisions, explain the war to the American people and persevere through good times and bad.

Their first concerns are about Obama the man. They know he is intellectually sophisticated. They know he is capable of processing complicated arguments and weighing nuanced evidence.

But they do not know if he possesses the trait that is more important than intellectual sophistication and, in fact, stands in tension with it. They do not know if he possesses tenacity, the ability to fixate on a simple conviction and grip it, viscerally and unflinchingly, through complexity and confusion. They do not know if he possesses the obstinacy that guided Lincoln and Churchill, and which must guide all war presidents to some degree.

We've heard a lot of discussion about push-button counter-terrorism in Afghanistan, where we stand off and drop Hellfire missiles from Predators. Some of that discussion has centered on the morality of a strategy that will kill more civilians than a counter-insurgency strategy might. That discussion misses the point. If we stand off and leave the Afghan people to the mercy of the Taliban, the number of people killed air strikes will be the least of their worries.

Why the Culture War Matters

Having just completed a post on how we should remove the culture war from federal discourse, let me now turn around and explain why the culture war is important. Two words:

Indoctrination works.

That Marx fellow (Karl, not Groucho) was on to something when he realized that human beings are perfectable through relentless education and indoctrination. It works. It works really well. More importantly, it works better and better when you can rope more and more people into receiving the indoctrination. In short, it works better at the federal level than it does at the local level.

Liberals recognized this long before conservatives did. Then, after conservatives understood that it worked, they spent years refusing to use the technique at the federal level. It is, after all, the antithesis of the intellectually grounded Hayekian conservatism. But eventually, certain facts became clear.

First, the messages imparted by mass media have substantially overwhelmed any cultural messages that could be instilled by the school or church. In many weaker families, mass media even have more power than parents to shape many aspects of behavior.

Second, the pedagogy and marketing associated with pushing a behavioral change from a small group who wishes to impart the change to the population as a whole is vastly more sophisticated than it used to be. Civil rights, women's rights, gay rights, anti-smoking, domestic violence awareness--these are all examples of societal changes that were first pushed by a skilled, vocal minority to a highly resistant population. But, over time, the campaigns of that minority got traction and ultimately resulted in profound social changes.

The result of the union of pedagogical and media technology has been a profound change in the nature of social consensus itself. Bottom-up change, which used to be the only way to affect the culture, is now vastly out-muscled by top-down change.

The penny dropped on the conservatives back in the late eighties with movements like the Moral Majority. Suddenly, conservatives were using mass-media technology to push what they they thought were desirable behaviors, not just as a way of surfacing issues. Real attempts to stigmatize certain behaviors and promote other ones were now in place. This has only met with limited success. Whether that's because the conservative agenda is inherently less palatable to the public or that it's harder to preserve certain behaviors than it is to instill new ones, I can't tell.

We view these attempts as the beginnings of the culture war, but they're really just the beginning of both sides using the same methods to achieve different ends. As such, the culture war won't end until one side has successfully managed to indoctrinate the society with its agenda. That's not going to happen any time soon. This is one reason why we perceive society as being so polarized right now; when both sides use these top-down tactics simultaneously, the societal fissures are unpredictable.

Another effect of the advent of effective indoctrination technology is that it becomes much more important to silence your opposition. If you can shut off the media or institutional channels through which you opposition gains access to the public, you can kill their ideas. This is why you see conservative groups attempting to discredit liberal educational institutions and why you see organized campaigns to silence conservative dissent on campus. It's all part and parcel of closing down the opposition's access to an easily indoctrinated population.

But this begs a question: How healthy for our society is it to have this kind of top-down social change? It's obviously vastly more effective than the old-timey bottom-up change, but is its effectiveness somehow reducing our ability to respond to new social pressures? As a general rule, bottom-up, self-organizing systems are more robust than top-down systems. Are we running a risk that the wrong top-down messages will organize us in ways that are hard to change?

In the end, we will have to decide whether this kind of discourse is beneficial or not. But, just as it will be necessary to forgo some rhetorical techniques to de-escalate other forms of political stridency, it may be necessary to place limits on when and how we choose to use indoctrination. I have no idea what the right path forward is for this, but it's something were going to have to grapple with in the not-too-distant future.

Toward a Third Orthodoxy

Eric Scheie asks a perfectly reasonable question:

Has conservatism changed? Is it the kind of change that "change" produced?

I don't have to go along with Obama's form of change, I don't see any reason why I should have to go along with conservatism's form of change. If I don't like left wing Alinskyism, why should I like right wing Alinskyism? If I don't like left wing ends-justify-the-means, by-any-means-necessary dishonesty, why should I like right wing ends-justify-the-means, by-any-means-necessary dishonesty? If I don't like left wing identity politics, why should I like right wing identity politics?

Yes, this is getting repetitive. Change is tedious.

I should try harder to ignore it in the hope that it goes away.

Answer: it's not going to go away.

I've recently realized something about my self-selection hypothesis. It's true that you can get lots of little orthodoxies, but the real problem is that the big orthodoxies suck the air out of the conversation until there are only two of them left. They are, of course, the populist knee-jerk right and the populist knee-jerk left.

This is a paradoxical result, because it's still true that a plurality of us are somewhere in the middle. The problem is that, because we're centrists, we don't have an orthodoxy of our own. No orthodoxy, no air time. No air time, no way to break into the debate in a meaningful way.

The good news is that we still vote, and we are ultimately the arbiters of who gets to run the country. The bad news is that we're always forced to vote for some yahoo that has properly espoused one or the other of the knee-jerk orthodoxies. This causes highly undesirable system dynamics, where the plural center is constantly over-correcting between the left-wing idiots and the right-wing ones.

The only solution to this is a third orthodoxy, but that will be hard to achieve with people who like to make up their own minds. Cockeyed optimist that I am however, I would offer up the following platform:

1. Smallish government, with more, not less, local control.
   
2. Rabidly secular. Not anti-religious, just willing to check our moral stances at the door.
3. Internationalist but not pacifist.
   
4. Willing to be diligent about promoting moderate candidates for public office.

This is a coalition that I think a lot of people could get behind. But they've got to be willing to take all that nasty culture war crap off the table. I'm not suggesting that people shouldn't care about that. I am suggesting that it's not a fit topic for national politics. If you don't like what's happening to your state, your town, your neighborhood, go find a candidate at that level who agrees with you and support him. Just keep it away from the federal level.

Net Neutrality Explained--Again! Differently!

In the wake of FCC Chairman Genachowski’s speech, there’s been a lively network neutrality discussion going on over at Obsidian Wings, here, here, and (though I didn’t comment on these) here and here and here.

I’m still very concerned that the technical issues associated with network neutrality are still falling through the cracks. Since there appears to be a limit on how big a comment you can post over at OW, I thought I’d spend some time and describe some of the issues.

The net neutrality debate of course dates back quite a while. A good summary can be had by looking at the Wu and Lessig brief to the FCC from 2003. To boil this all down, and to describe what the FCC is worried about, there seem to be three major bones of contention:

1. That network management policies be open, so that the public can understand how traffic is being managed by any particular ISP. This is a pretty simple transparency issue.


2. That access to an ISP’s network be available to all content providers, so that the ISP can’t favor, for example, its own content over the content of one of its competitors, or so that small providers have equal access to big providers. Let’s call this location neutrality.


3. Finally, that ISPs practice application neutrality as well as location neutrality. The idea here is to guarantee that the internet is available as a public utility, with access guaranteed for any application--and protocol--that comes along.

Item #1 is just motherhood and apple pie, mod obfuscating enough information that an attacker can't exploit it. Transparency is good.

Item #2 was stimulated by perfectly reasonable public policy concerns. We don’t want the big providers to get bigger at the expense of the little guys, and we don’t want giant media conglomerates using their vertical content and media integration as a weapon against more horizontal competitors. All great.

At first blush, item #3 seems to make lots of sense. We want the internet to be available to the next clever fellow who invents the next killer app, right? He should be able to count on well-defined access the underlying network infrastructure, right? Wu and Lessig use the analogy of the power grid to make this point. An electronics manufacturer can count on the power grid to deliver 110V, 60 Hz current anywhere in the US. Why shouldn’t the internet provide the same platform for producers of network applications?

Well, there’s a problem. In fact, I can think of two problems, one pretty simple and the other definitely not-so-simple.

The first problem is that, while we think of our ISPs providing us internet service, what they mostly provide is web service. In 2007, HTTP traffic comprised 46% of all web traffic. Back in the late 90’s that number was probably closer to 85%.

But in between, a little thing called peer-to-peer (P2P) file sharing came along, with BitTorrent being the killer app.

The vast majority of ISP subscribers use the web for pretty much everything, so ISPs optimized their traffic engineering for web applications. Web access is very simple, but it’s highly asymmetric: You make a small request and you get back a large amount of data. ISPs therefore heavily biased their network traffic toward downloading data from the core network, rather than uploading data to it. I’m currently on Time Warner Roadrunner, and my download speed is 15 Mbps, but my upload speed is only 1 Mbps.

But a relatively small number of users use the internet for P2P file sharing. That application is so bandwidth-intensive that in 2007 it accounted for 37% of all traffic.

Access ISPs hate BitTorrent. BitTorrent uploads and downloads nearly symmetrically, and it uploads and downloads a lot. If you’re on a DOCSIS cable system for internet and you have a P2P aficionado in your neighborhood, there’s a pretty good chance that he’s consuming a sizable chunk of the upload bandwidth available.

ISPs attempted to solve this problem by throttling BitTorrent. All they have to do is drop the occasional packet, or even de-prioritize the traffic at the router, and BitTorrent uploads and downloads slow to a crawl. Torrent-heads responded by encrypting their BitTorrent flows, so it was harder to do packet inspection to discover which flows were true P2P traffic.

And then Comcast decided to send TCP reset messages to BitTorrent flows, causing them to abort. And, as if this weren’t guaranteed to cause unbridled rage, they then denied they were doing it. Until they got caught, of course.

BitTorrent is, of course, a fine poster child for application neutrality. If the FCC were to adopt an app neutrality policy, ISPs would no longer be able to throttle BitTorrent. They would probably have to respond by changing the download/upload bandwidth mix, which would require deploying a lot more network equipment and forcing the price of broadband up. Maybe that wouldn’t be so bad. I wouldn’t be happy about this, but it wouldn’t destroy the internet or stifle innovation or any of those things that anti-net neutrality folks get the vapors about.

But the second problem will do those things. The poster child application for this problem is voice and video over the internet (VVoIP), but the problem really applies to any communication application that needs to have real time communication flows. We’re about to go down the rabbit hole here, folks. Any of you who faint at the sight of internet acronyms should leave the room now.

So far, we’ve talked about the web and P2P apps, both of which use the internet’s Transmission Control Protocol (TCP). TCP was invented back in the late 1970’s and has been the dominant internet transport ever since. It provides an end-to-end reliable byte stream between two applications. To do so, it takes messages handed to it by an application and chops them up into Internet protocol (IP) packets, encapsulating each one with some information so that the packets can be re-assembled by the receiver application. If packets get dropped, or duplicated, or arrive out of order, the TCP information is sufficient to put everything back together or, if necessary, request that the sender re-send some of the packets.

TCP accomplishes its reliable transfer with two additional, highly important properties. One is flow control: this simply means that, if the receiver runs out of memory into which to receive the byte stream, it has a way to tell the sender to stop sending until memory becomes available. The other property is called congestion control. These two properties, or more precisely the lack of them in other transport protocols, are going to be a problem for application neutrality.

Everybody knows that the internet is built out of routers, which are pretty easy to understand at a basic level. A router receives IP packets (not messages) from one or more network interfaces, stores them into memory, then forwards them as fast is it can out some other set of network interfaces. There can be more input interfaces than output interfaces, or the inputs can be faster than the outputs. When this happens, packets build up in memory until the router runs out of space. Unlike TCP, the IP packets that the router deals with don’t have flow control, so the router can only drop them on their little pointed packet heads, and the receiver has to do decide what to do about the missing data.

When TCP packets get dropped, one of the most common behaviors is for the receiver merely to refuse to send an acknowledgment (ACK) packet back to the sender. After a while, the sender decides to re-transmit its currently unacknowledged packets. But now imagine that a router gets congested, so that a whole bunch of TCP connections lose some packets simultaneously. Odds are, all of the TCP senders will re-send data at the same time, making the router even more congested. If they keep doing this, the router undergoes what we somewhat euphemistically call “congestive collapse.” You’d probably say that the internet gets broken real bad.

To avoid this problem, TCP has a congestion avoidance algorithm called “slow start.” I’m not going to go into this in great detail (you can look it up), but it works something like this: When TCP starts sending data, it will only send one or two packets at a time without waiting for an ACK packet. If it gets and ACK and it has more stuff to send, it then doubles the number of packets it’s willing to send without an ACK, and so on, up to some fairly large number of packets that it’s willing to send. But if it loses even a single ACK, it infers that it’s encountered congestion and drops all the way back to sending one or two packets at a time, and gradually works its way back up, but only to some average value where it knows that it’s likely to start losing ACKS. As a result, TCP senders send a lot less data to congested routers until the congestion condition clears for some reason.

It’s pretty simple, and it works surprisingly well. It works so well that ISPs often implement a separate algorithm on their routers called “random early drop” (RED). RED is designed to smooth the congestion condition so that not all TCP streams drop into slow start at the same time, which is very inefficient, and is vulnerable to something called tail-drop synchronization, which, suffice it to say, is yet another way that a bunch of TCP senders can unintentionally gang up on a poor defenseless router and send it off to gibber in the corner.

This is why, when your neighbor is uploading porn via BitTorrent, you’re only muttering under your breath about how slow the network is, as opposed to calling your ISP and telling them that it’s broken. BitTorrent uses TCP and therefore obeys slow start, which keeps the router network only very close to being overloaded, instead of being actually overloaded.

Note that this also works perfectly well when you're watching video on YouTube or Hulu. In this case, the video is being sent from a server that reads it off of the disk and sends it over HTTP (which uses TCP). The receiver receives the stream of bytes that make of the video, decodes them, then renders them on your screen and speakers.

But there’s a wrinkle. Imagine that, on the first packet received by your browser, it started playing the video. As long as the video stream continued to be received at exactly the right rate, each new video frame and audio sample would arrive just in time to be rendered, and you’d see perfect video and hear perfect audio. Maybe the sender can send the video faster than the receiver can play it. That’s no problem; eventually the receiver will run out of memory to store the byte stream, and TCP flow control will kick in.

But now imagine that the sender is sending at exactly the right rate, with many packets between each ACK, and your video stream suddenly gets subjected to TCP slow start because an ACK gets lost. Suddenly, instead of sending one packet right after another, the sender has to wait until it receives an ACK for only one or two packets, which will at least cause “jitter”, or an irregularity in the spacing of the received TCP packets. If there’s enough jitter, the receiver will run dry: the next video or audio frame won’t be available when it needs to be rendered. Your video will freeze, or your audio will sound like it’s coming from the bottom of the sea, or through a fan.

Fortunately, this streaming video is stored on disk--it's not occurring in real time. So all the receiver has to do to avoid this problem most of the time is to wait a couple of seconds before playing the video out. Then, if there’s jitter, the data that’s already in the buffer will tide the player over until more data is received.

But what if there is no disk? What if the source of the video and audio is another human being? Two additional constraints now apply:

1. The sender can’t ever send the stream faster than real time to make up for past or future jitter, and


2. The receiver can’t wait to render the video or audio. If it does, the two humans can’t have a conversation. Research shows that human conversation starts to suffer (people tend to try to talk at the same time a lot) when the delay from the time that sound leaves a person’s lips to when it reaches the other person’s ears is more than about 150 milliseconds.

Now jitter becomes the dominant constraint on the quality of the real time application. If you transport the voice and video over TCP, it can induce fairly large amounts of jitter, sometimes more than a second’s worth, which translates into more than a second that the receiver has to delay.

Since TCP is largely unsuitable, the IETF, those fine folks that recommend protocols for the internet, invented something called the Real Time Protocol (RTP). RTP is quite different from TCP. It’s designed to get media from the sender to the receiver as fast as possible, with enough information added so that the receiver can decide if any data is missing, and so it can reconstruct the timing of the stream, playing it out at exactly the same rate at which it was captured by the sender. But this real-time behavior comes at a cost: RTP can't re-send dropped data, and it has neither flow control nor congestion control.

At the router level, RTP packets are just like TCP packets: They arrive, they get stored, and they get sent. And, just like TCP packets, they’ll get dropped if the router is congested.

Dropping a whole bunch of RTP packets in a row is bad. The receiver is capable of losing a packet here and there and hiding the fact from the user. But if you lose a lot of packets, at some point the user sees the video break up or the audio start to drop out, or echo, or sound like something out of a satanic ritual.

Even if the router doesn’t drop RTP packets, they still have to wait their turn to get sent. When your aforementioned neighbor has decided to download or upload porn, there may be hundreds of his TCP porn packets to each one of your voice and video packets. When the RTP packets get delayed behind other traffic, that can cause jitter. This makes the receiver have to buffer more data before it can start to play out, which translates to delay, which translates to reduced quality.

The other extreme is bad, too. Since RTP doesn't have any congestion control, if too many people fire off real time applications at the same time, the router is going to get swamped, and there's no way for it to tell RTP senders to shut up. Instead, the network has to perform some kind of admission control before the RTP application starts up. This is a kind of "mother may I?" step, where some service owned by the ISP does some accounting (very, very complicated accounting, it turns out) and decides whether your video will be the straw that breaks the camel's back.

(At this point, some of you are no doubt yelling at your screen, "There ain't no stinkin' admission control when I use Skype, man! You're crazy! Well, both of those statements may be true, but the reason that there's no admission control in the public net is that nobody is currently running very much high-def live video in the public net. These admission control schemes are used all over enterprise networks and are a key component of any modern VoIP enterprise PBX. When the public net grows enough video--or other type of real time application, the ISPs will have to do this.)

Once we have admission control, we still have to have some way to to let RTP packets be less likely to get dropped and to “jump the line” when the queue for the packets to be sent is too long. There are many ways to accomplish this, but the most popular is to mark the RTP packets with something that the router can recognize in the incoming IP packet. This marking is placed in a IP field called the “differentiated services code point” (DSCP). The best way to the think of DSCP is that it’s a priority that goes with the packet.

Routers don’t have to obey the DSCP markings on packets, but they can if they wish to provide differentiated quality of service (QoS). But there’s yet another problem here.

Imagine that I’m an ISP and I announce to all my customers and to the various content providers, “I’m going to support DSCP on my routers.” What is the likely response? It’s usually something like, “Yippee! DSCP! If I mark my packets with high-priority DSCP, my application will get better service!” You get a form of DSCP inflation, where the markings mean less and less, because there’s no marginal cost attached to using them. Pretty soon, the applications that really need differentiated QoS are crowded out by the ones that don’t really need it but decide to use it to give themselves an edge.

ISPs can solve this problem by charging for QoS, or they can find a way to enforce admission control. They may charge their customers for a premium plan, just like they charge for faster modem speeds today. Or they may charge by the amount of DSCP-marked data that gets sent or delivered.

However the ISP does it, you’ll now understand that the terms, “differentiated QoS” and “application neutrality” are not the best of friends. And yet the fact remains: real time applications will simply stop working without DSCP if the network becomes congested.

If application neutrality becomes an FCC-mandated regulation, there is simply no way to provide the real time services that are one of the major sources of innovation on the internet today. Note that VoIP works today because its bit rate is quite low, but even today you can wind up with significant delay. Live video is in its infancy and I fear that it won’t live to childhood if app neutrality is required. Beyond that, there are lots of real time applications that could grow to be significant. There’s obviously real time gaming, which is already taking off, albeit without tight real time constraints yet. How about tele-operation of industrial robots? Or surgical robots in underdeveloped regions where it’s hard to get a top-notch surgeon to visit? How about a service where somebody else drives your car for you, or merely prevents you from crashing? All of these applications, plus many more that nobody’s thought of, will be jeopardy.

So what are the consequences of forgoing mandated app neutrality? Well, the big one is that application developers have to think about how the internet works before they engineer something new. Is this really so bad? Don’t engineers do that already?

Of course they do. If they don’t, two things happen. First, their application may not work. But even if it does work, it may be a sufficiently bad citizen that ISPs hate it. (Cf. BitTorrent above.) Even worse, users that don't use it but are affected by it may hate it. Unless it’s really, really useful, it’s unlikely to gain any traction.

On the other hand, sometimes a useful application comes along that requires new features in the internet, like the real time apps I've been t talking about. Those new features aren’t free, but ISPs will implement them if there’s a business case for them. That can’t happen if application neutrality forbids the ISP from innovating features that have to be constrained to a particular class of traffic. Each new class of traffic comes with its own engineering requirements. The ISP has to be free to implement those requirements and choose a business model that makes it worthwhile.

Update 9/24/09 11:07 PM: Fixed some typos and broken links.

Update 10/7/09 5:23 PM: Yet another net neutrality thread here.

Yipeee! I've Been Discredited!

I kinda geeked out on a net neutrality policy debate over on Obsidian Wings and I actually got somebody to quote this humble blog in order to discredit me. They used this post, which of course has nothing to do with network neutrality but which did contain some mildly out-of-context red meat through which I could be scorned.

I'm sure that my traffic stats (if I were measuring them) have gone up by a factor of a hundred. I'm so proud!

An Arms-Control Treaty For Political Discourse

All the breast-beating about Joe Wilson at Obama's address and Serena Williams at the US Open and Kanye West at the VMAs has predictably been bemoaning how much the fabric of civility in the US has frayed. All true, but not very useful.

The fact is that incivility works. It gets your point distinguished and remembered much more than civil discourse does. The sad fact is that Joe Wilson's little outburst caused language to be inserted into the various health care bills that he couldn't have gotten in in his wildest dreams, had he not heckled the President of the United States with, "You lie!"

It occurred to me that this tsunami of incivility is a lot like a military arms race. Nations build more and better weapons for two reasons. They either hope to get a decisive advantage over their opponent, to cause the opponent to concede something, or they hope to maintain parity with an opponent, deterring him from action.

Arms races can only end in one of three ways:

• One side can achieve dominance and bend the other side to its wishes.


• A war finally breaks out, at great cost to both sides. Whether or not the war has a winner will vary from case to case.


• Both sides can agree to de-escalate, usually through some sort of a treaty.

Seems to me that exactly the same three outcomes are possible in our political discourse. Either the right or the left might ultimately prevail, possibly in part from their ideas but more likely in large degree because they were more willing or more able to be more vicious and underhanded than their opponent. Or maybe things will continue to get worse to the point where our democracy simply stops functioning and we collapse into something a lot like real warfare. Whether either side wins such a war is secondary to the fact that the US won't be a very good place to live for a long time after such a collapse.

Or, we find a way to de-escalate. We come to some social consensus that declares that use of the worst verbal weapons, while they may produce some short-term advantage, will ultimately so damage both sides that their use simply can't be tolerated.

Negotiating such a social consensus is hard. Both sides have to agree to give up genuinely useful rhetorical tools. But arms-control treaties are hard, too, and yet they occasionally work.

I have no idea how one would begin such a negotiation. An obvious problem is that there isn't exactly a "leader of the right" and a "leader of the left" to participate in the negotiations and, even if there were, I'm not sure they could cat-herd their various constituencies into abiding by the agreement. At the very least, there'd be a huge amount of finger-pointing over various violations. But I have to say that the finger-pointing would be vastly preferable to the overflowing sewer that we have today.

This is probably an unworkable utopian idea. If anybody has any thoughts, let me know.

Read This Article

This month's Atlantic runs a piece by David Goldhill entitled, somewhat misleadingly, How American Health Care Killed My Father. It has very little to do with the author's father and everything to do with providing a lucid explanation of why insurance isn't health care, why the patient isn't the customer, and how to phase in a system that returns insurance to being insurance.

Goldhill's recommendations are very similar to mine here, but he's done a much better job researching the problem than I ever could.

Why I Don't Support the Public Option

Posted this as a comment over at Cosmic Variance today:

I guess before beginning this little screed that I ought to go on record as opposing the public option but supporting guaranteed enrollment (the no pre-existing conditions stuff) and I’m on the fence but leaning toward supporting mandatory coverage. All of this being conditioned on finding some reasonable way to pay for it. (Hint: that’s not “waste, fraud, and abuse.”)

If you guys really want to have a reasoned debate about the public option–or about anything else involving health insurance–it might be a good idea to remember how insurance companies make their money.

At the risk of ridiculously oversimplifying, what you (and, if you’re lucky, your employer) pay in yearly premiums is the insurance company’s actuarial estimate of how much people pretty much like you will consume in health services, plus some amount of profit. Since some people like you will have bad luck and incur huge medical bills this year, while most people like you will only consume a nominal amount of routine health care, the insurance company has a nice actuarial model that integrates across everybody’s expected costs and divides by the number of subscribers. Voila! A premium. Pretty simple, right?

Well, there are two terms that ought to be examined a bit more closely: “profit” and “people pretty much like you.”

Profit first: I pulled United Healthcare’s financials for 2008. They had a gross margin of 23% and a net margin of 4%. For comparison, let’s look at another evil industry: Exxon Mobil had a gross margin of 54% and net margin of 9%. Now, a couple of (currently) non-evil industries: Cisco had a gross margin of 65% and a net margin of 21%. Kroger (the supermarket chain) had a gross margin of 23% and a net margin of 2%. (I’d do more health insurance companies, but I’m lazy. When I did this little exercise before, they were all within shouting distance of one another.)

Health insurance is not an incredibly profitable business. In fact, it kinda sucks. To be sure, UNH’s stock (until recently) was skyrocketing. But that’s because their revenues were skyrocketing, which occurred because the underlying health services that they insure were going up so fast.

So, we now come to the the right’s principal non-hysterical objection to the public option, once you scrape away all the death panels and illegal aliens and socialized medicine buzzwords: They worry that a publicly offered insurance plan will so erode the margins of the private health care insurance companies that nobody will invest in them, which further erodes their margins, until they finally exit the business. As the supply of private insurance dries up, more and more people get driven into public insurance and you eventually wind up with only the 500 pound government gorilla in the room.

I’ve hopefully demonstrated that, just from a statement of income perspective, this is not an unreasonable fear. You could mitigate this fear with all kinds of restrictions on the charter for public insurance, but you’ll have a hard time convincing the right (and me, for that matter) that those restrictions can keep the camel’s nose from snuffling near the bottom of the tent flap.

But private health insurance ought to be able to be much more agile than the public plan, right? They ought to be more creative in structuring policies and taking advantage of specific market conditions, shouldn’t they?

Well, that’s where we come to the “people pretty much like you” part of the equation. Insurance companies compete with each other by offering lots of different plans, with different coverages, different deductibles, different copays, different lifetime caps, all at various different price points for their premiums. But notice that when we say, “people like you,” we really mean “people willing to pay the same premiums, assume the same risk, and running the same statistically proscribed chance of consuming health care as you.” In short, insurance companies create risk pools and offer good rates to pools that are unlikely to consume as many services as the risk pools that are likely to consume more services. The unflattering term for this is “cherry-picking” but it makes a huge amount of sense, both for the company and for the consumers that can be cherry-picked.

It does not make a lot of sense from a public policy standpoint, which has a different goal: Since we as a society have decided that sick people get treated, one way or another, it follows that we are de facto sharing risk across our entire society, and we might as well share it de jure as well. So, there’s moderately broad support for “guaranteed enrollment,” which is just a fancy way of saying, “no more cherry picking!”

So now we’ve removed the most powerful tool that an insurance company has to differentiate its products from others’. No more fancy actuarial cleverness allowed. Now you can only compete by packaging different services at different levels of deductibility and lifetime caps.

Oh, wait! Didn’t I just hear the prez say, “no more lifetime caps”? And “you’ll get all your preventative care covered, no matter what”? So, even more constraints, this time on the services offered.

In short, everybody wants to completely commoditize health insurance. That’s probably a good idea. But note that a commoditized plan will be a lot more expensive if you happen (as most of us are) to be in the ranks of the “cherry-picked”. I’m in moderately good health, for a middle-aged guy. Right now, I’m not sharing risk with the guy I know who’s 48, has already had a triple-bypass and two subsequent angioplasties, and still smokes and does the occasional line of cocaine. But with guaranteed enrollment and mandates on covered procedures, I will be. Think I’ll get as good a rate as I do now?

So, commoditized market, with a major player who doesn’t have to turn a profit and is guaranteed to get bailed out when they screw the pooch, because they are literally too big to fail. I’d say that the fear that private insurers will get crowded out is rational.

And all of the other fears flow from that. Health insurance companies are also the collective bargaining agents for their subscribers. (This is insane, but this post is already way too long…) As long as there are many of them, providers have choices about where they sell their services and nifty new gadgets and life-extending drugs. But with only one buyer, that buyer sets the price, and the seller either agrees to it, or he leaves the business.

If that single buyer (”single payer” is really kind of a tiny fig leaf, isn’t it?) always sets the prices just high enough to attract investment dollars to provide every service needed, there’s no problem. But, with no market to discover what that price should be, that’s highly unlikely, isn’t it? So, some services go under-invested. We now have shortages for some services. And, since we have no market to allocate those services, we have to allocate them via the explicit decisions of the (single) insurance provider. We call this “rationing” when we’re being honest, and the demagogues call it “death panels” or something equally inflammatory when they’re trying to whip people into a frenzy.

Personally, I like the idea that I can always pay for some service if it’s not covered but will save/improve my life. I like the idea of medical progress, even when some new treatment is too expensive to be covered by insurance and therefore available to only a few, because next year it will be cheaper and available to more people. But those new treatments/drugs/gadgets will only be provided when there are enough individual buyers to make a profitable market.

Finally, on a slightly different topic: You may disagree with my (incredibly lengthy) arguments above. You may honestly think that a single payer system is the only just solution to the problem. You might even be right; who knows? We should have that debate.

But you are a fool if the only debating tactic you can come up with is to question my motives, just as you are a fool if you question the motives of huge number of people that oppose the public option. I am not a shill for big pharma and the insurance companies. I just want to be very, very cautious about how we proceed here, because the chances of falling into a hole that will be impossible to climb out of are pretty high. I want to be (gasp!) conservative about how we proceed.

There are certainly people out there with less-than-pure motives. But please, for the sake of the rest of us who are simply trying to find a solution that will not only improve most people’s lives right now but continue to improve those of our children and our children’s children, assume that we’re not shills, idiots, or dupes. When you frame the debate like that (as Daniel did above, I’m sorry to say), the only weapon we have left is demagoguery, which is how things got as screwed up as they are now.

The Economics of Green Jobs

Here's a question: We keep getting told how many jobs are going to be created through green technology, and how wonderful it will be for the US economically. But all of those jobs are going to get factored into our overall energy costs, right? So, if lots more people are going to be employed making green energy than all those nasty fossil fuel producers (who will surely lose their jobs, due to the fact that they are fundamentally evil), doesn't that mean that the cost of energy has to go way, way up? And if energy costs go way up, doesn't that imply that US GDP goes down, or at least flattens out a lot? And doesn't that really mean that cutting over to green energy is more-or-less a zero-sum game?

What Can You Say to a Creationist?

Numerous comments about Sean Carroll's decision to sever his association with bloggingheads.tv, over their posting of a couple of diavlogs in which creationists and intelligent design proponents were invited to participate.

Here are some of Carroll's objections:

...It’s too easy to guess at what someone else is thinking, then argue against that, rather than work to understand where they are coming from. I tried to lay out my own thinking in the Grid of Disputation post. Namely: if BH.tv has something unique and special going for it, it’s the idea that it’s not just a shouting match, or mindless entertainment. It’s a place we can go to hear people with very different perspectives talk about issues about which they may strongly disagree, but with a presumption that both people are worth listening to. If the issue at hand is one with which I’m sufficiently familiar, I can judge for myself whether I think the speakers are respectable; but if it’s not, I have to go by my experience with other dialogues on the site.

What I objected to about the creationists was that they were not worthy opponents with whom I disagree; they’re just crackpots. Go to a biology conference, read a biology journal, spend time in a biology department; nobody is arguing about the possibility that an ill-specified supernatural “designer” is interfering at whim with the course of evolution. It’s not a serious idea. It may be out there in the public sphere as an idea that garners attention — but, as we all know, that holds true for all sorts of non-serious ideas. If I’m going to spend an hour of my life listening to two people have a discussion with each other, I want some confidence that they’re both serious people. Likewise, if I’m going to spend my own time and lend my own credibility to such an enterprise, I want to believe that serious discussions between respectable interlocutors are what the site is all about.

Some time back I was surprised to discover that I am a rabid anti-creationist. I had a discussion with my brother-in-law about the "teach the controversy" doctrine and wound up foaming at the mouth, more than a little bit. This seems to be one of those things where I would think that I'd be fairly tolerant of harmless error, but I really don't think that it is harmless. Creationism actively encourages kids to think unscientifically, which will turn them away from scientific or technical careers. It contributes to bad public policy (cf. stem cell research bans). And, by being so relentlessly political, it corrodes the foundations of secular government.

So I am somewhat sympathetic to Carroll's distaste at being associated with a site that has any tolerance for airing these kinds of ideas. Best not to give them any oxygen, right? By engaging them or debating them, you only legitimize their ideas, no?

The problem with this line of reasoning is that creationism is already legitimate. Take a look at this incredibly distressing poll from a few years ago. When you have roughly half of the country, in all demographics and age groups, believing that "God created man in his present form," the legitimacy cat is out of the bag and has been drinking from your toilet for some time.

Now, it is almost useless to debate creationism with creationists. You're not going to change their minds, and it's unlikely that pure reason will change the minds of the creationism-believing chunks of the viewing audience. Per Shaw, "never wrestle with a pig. You both get dirty, and the pig likes it."

If you can't debate 'em, what's a scientific body to do? The answer, I think, has a lot more to do with talking points than it does with winning debates. To discredit creationism, you need to get the media to pay attention. The media only pay attention to things that are so artfully crafted that people enjoy watching them enough to watch commercials at the same time. That's a job for PR folks, not scientists, not even debaters. But the scientists have to show up, or all the pretty words that the PR folks provide them will come to naught.

And that's the problem with the Carroll approach: it fails to appreciate that creationism is not a scientific issue but rather a political one. And debate and reason have a fairly small place in the toolkit required to affect attitudinal change on political topics.

One of the larger chunks of that toolkit is consistent, long-term, willingness to engage on the issue. That means that you have to respect the consequences of your opponents' opinions, even if you don't respect the position itself. You have to show up, over and over and over.

So Carroll's decision to take his bat and go home is an incredibly bad one. He has telegraphed an unwillingness to engage, to say nothing of leaving the impression that the issue is so trivial as to be beneath his notice. That's a big-time win for the creationists, when they can drive a rational human being off of a site that is largely a boon to other rational human beings.

As for BH.tv, here's what they can do to atone: Let's see a discussion, by two reputable evolutionary biologists, on the best way to combat creationism. Those talking points have to come from somewhere, don't they?

Health Care. Insurance.

Some observations over the debate:

First, there may not be a death panel, but we are going to ration end-of-life care, and maybe even care for the simply very old. We can now extend the life of the very aged by a few years--at enormous cost. The cost of extending a life from, say eighty-five to ninety can often be achieved through the application of millions of dollars. We simply can't afford millions of dollars for every citizen in the last few years of life. Hence, most, if not all, will be denied the opportunity for such life extension.

But we can ration by government fiat or by market forces acting on the ability to pay. Government fiat is no doubt fairer. But such rationing comes at a huge price.

If we ration through the ability to pay, the cost of extending life from eighty-five to ninety may be millions of dollars, but ten years from now, the cost for extending from eighty-five to ninety may only be hundreds of thousands of dollars. Meanwhile, the cost of extending from ninety to ninety-five may now be millions of dollars--instead of being simply impossible at any price. I would call this "progress" and it's usually considered a good thing.

Such progress is not a feature of a "fair" system. In the fair system, it is simply illegal to extend life from eighty-five to ninety if the cost can't be borne by society as a whole. Therefore, there is no incentive to figure out how to lower the cost, to say nothing of figuring out how to charge millions of dollars for extending life to an even more advanced age.

Next, on the "public option": I have no idea whether a public option will make insurers more efficient, or whether it will drive them out of business. And I daresay nobody else has any idea either. The dynamics of this sort of change are so non-linear, so chaotic, that anybody who says they have a predictive model for this is lying to you, if not lying to themselves. A public option may be needed, but it is the very last thing that we should try as a cost control measure.

There are plenty of things with much more tractable dynamics that we should try before anything as drastic as a public option:

• Guaranteed coverage. Back in the 70's, we made red-lining poor neighborhoods for property insurance illegal. Prohibiting insurers from cherry-picking customers has a huge public benefit, in addition to forcing the insurers to look for more direct ways of containing costs. Note, however, that the direct effect of requiring all insurers to accept all customers will be an increase in the average policy premium, at least for a while.
  
• Tort reform. Malpractice insurance accounts directly for only about .5% of total medical expenditures. However, there is very little data on how much "defensive medicine"--the ordering of excessively cautious tests and procedures to avoid liability--drives up overall medical expenditures. I'll estimate another .5% by rectal extraction. Now, assuming that tort reform could halve the total expenditures, a half percent reduction in total health care costs ain't chicken feed.
• Health savings accounts. I'll hold off on this one for a bit--see below.
• Interstate competition. There are hundreds of insurers throughout the US, but many fewer insurers than that available to a resident of any given state. This is because each state regulates its own health care insurance market, and the cost of compliance is quite high. I'm usually an opponent of any form of federalization, but this seems to be a situation where the feds subsuming health care regulation makes a lot of sense. More competition is always good.
• Elimination of tax deductibility for employer-provided premiums. This will force employees to be more conscious of what they're consuming, and it's a reasonable fairness issue. It also will raise a lot of money for health care.
• Increased subsidies for the poor. I have no problem with the goal of universal coverage. I am also willing to pay more in taxes and premiums to achieve that goal. (Note: the Obama administration doesn't quite consider me one of the those evil rich people, but I'm pretty close.)
• Centralized record-keeping and IT reforms. This will probably squeeze a couple of percent out of overall expenditures and has very few privacy issues--assuming that we enact portability and pre-existing condition regulations on the insurers.
• Greater autonomy for physician assistants, nurse practitioners, and other medical technicians. Oddly enough, when you de-professionalize services that don't really require a professional, the cost drops precipitously. Hmm--I wonder why the AMA doesn't support this?
  

But now we come to the crux of the problem. Assuming we enacted all of the reforms listed a above, we are still left with a system of what we all call "health care insurance" but which really is performing three completely separate functions:

1. It provides insurance for genuinely catastrophic conditions.
2. It provides clearinghouse and payments-transfer services between the consumer and the actual health care providers.
3. It acts as a set of bargaining collectives, representing consumers to health care providers and negotiating prices.
   

Of these, only the first is a function usually associated with insurance. This is an absolutely vital service and will obviously be a major component of any sort of reform. But let's take a look at these other two functions.

I've said this before, but it bears repeating: On average, all Americans consume some nominal amount of health care each year. We usually refer to this as "routine" health care: Well baby exams and vaccinations. Doctor consultation and medication for minor infections and injuries. Physical exams. Obstetrics. Stuff like that.

You'll find that the amount spent on these services varies significantly with income; poor people do without things that they shouldn't do without. But if you subsidized--and educated--the poor for this stuff, the amount of this yearly expense would be fairly constant: the standard deviation from the mean would be small.

In other words, all your insurance company is doing for you for this routine care is transferring your money from point A (you) to several different points B (your doctors and pharmacy), plus they're taking their cut. Consumption of these routine services are not insurable events, since the probability of their occurrence is so high. So the insurance company simply builds these costs directly into their premiums, takes your money, and shells it out, less a little for profit.

This is nuts. First, it's better for you to see these payments and understand what you're spending your money on. By my estimates, more than a third of all health care expenditures fall into this "routine" category. If you don't like the deal you're getting when your kid gets an ear infection, you're likely to go elsewhere the next time.

Second, there are plenty of other ways to pay for this than including it in your premium. The best way seems to be in Health Savings Accounts. Currently, HSAs are awkward, opt-in administrative nightmares. If you instituted a series of reforms, you could make the HSA the primary vehicle for all Americans' routine health care:

• Make HSAs an opt-out system.
  
• Make contributions to HSAs tax-free.
• Give employers a big tax deduction on direct contributions to their employees' HSAs or for matching funds against their employee's contributions.
• Centrally manage HSAs, so that everybody can have an HSA debit card to pay for medical care directly.
• HSAs can also become a mechanism by which the poor receive sequestered subsidies for health care. It's easy for the government to dump your health care tax credit directly into your HSA or, in the event of overdraft, provide the funds as needed.

When you couple this with centralized health records initiatives and de-professionalization of routine care, you now have a powerful incentive for individuals to shop for inexpensive, high-quality care. Seems to me that this can probably shrink routine care expenditures by a solid 15%, which in turn lops 5-6% off total health care expenditures.

The second odd feature of US health insurance is its collective bargaining function. Whether you go to a "preferred provider" or are a member of an HMO, your insurance company is negotiating the prices for your health services directly with the providers, rather than putting you in the loop as well. To a large extent, this is not a bad thing. Collective bargaining is generally a good deal for the collective being represented.

But it's no job for an insurance company. First of all, there's zero consumer involvement, so there's no incentive for the consumer to look for alternative ways of receiving the service. Second, binding the negotiated deal to insurance carrier is far from optimal. Networks of patients, cooperatives, and even groups of insurers could get better economies of scale than individual insurers.

The consumer is also likely to be a more agile creator of collective bargaining arrangements than the insurer is. Consumers know what they need. If you're twenty-eight, healthy, and starting a family, you're likely to want a co-op that goes heavy on OBs and pediatricians. If you're fifty-five, you may want a co-op that emphasizes cardiologists and nutritionists. These co-ops are unlikely to appeal to an individual insurer, but both of these groups would be able to attract members from multiple different insurers and provide the economies of scale that would make them attractive sources of patients for the health care providers themselves.

Of course, there are plenty of genuinely insurable events that require catastrophic insurance. Such insurance needs to be a requirement. Such insurance would have a deductible that's high enough that the HSA payments cover the routine stuff, before the insurance kicks in to handle the nasty stuff. Whether you pay for your catastrophic insurance premiums out of your HSA, or your employer pays the premiums, or, if you're poor, the government pays the premiums to the insurer (or is the insurer) is important, but ultimately straightforward. The trick is to separate the routine care from the catastrophic care, so that you get excellent cost-containment for the easy stuff.

Finally, there's one other issue that needs to be addressed in this debate. There is an insidious, unspoken assumption that goes mostly unchallenged: It is that health care is so complex that poor, uneducated people are incapable of making decisions in their own best interest, or in the interest of their children.

Having poor, uneducated people in my immediate family, it's hard to argue that there's an issue here, at one level. But the liberal solution to this problem always turns out to be paternalistic--the government will take care of you, but in return you have to do what it says with regard to how you spend your health care dollars.

It's not that there aren't real problems to be addressed here, but most of them have simple, common-sense solutions that don't require cradle-to-grave interference by the government. Worried that somebody will spend their health care subsidy on booze and cigarettes? Make sure that HSAs can only be spent on medical care. Worried that somebody's kid winds up in the emergency room every time they get an ear infection? Require that the parents take a course on the most cost-effective treatment for a given condition before they can use their HSA funds.

Any policy that is based upon the idea that a section of the citizenry is too ignorant, helpless, and incompetent to make decisions in their own best interest is guaranteed to produce a citizenry that is too ignorant, helpless, and incompetent to make decisions in the own best interest forever. The trick to improving health care in the US is to make individuals responsible for their own well-being. Any system that doesn't start with this as its underlying premise is doomed to failure.

I'm Not Understanding Something

So, we have the banks sitting on piles and piles of CDOs, because if they sell them, they'll wind up under-capitalized and begin the credit-trap death spiral. But doesn't mark-to-market accounting require them to write down their CDOs' value as soon as anybody sells enough of them to make a market?

Could it be that nobody is selling CDOs? And, if so, doesn't that start to smell a bit of collusion on the banks' part?

Change--Not!

I've been scrupulously avoiding any discussion of the stimulus bill, but I can no longer contain myself.

Today, in response to still more bad (but completely expected) employment numbers, Obama said:

I am sure that at the other end of Pennsylvania Avenue, members of the Senate are reading these same numbers this morning. I hope they share my sense of urgency and draw the same, unmistakable conclusion: The situation could not be more serious. These numbers demand action. It is inexcusable and irresponsible to get bogged down in distraction and delay while millions of Americans are being put out of work. It is time for Congress to act.

This would be fine if the bill weren't a giant, steaming, Christmas-tree-shaped dog turd. Obama can have a stimulus bill any time he wants, just by including only infrastructure, temporary unemployment relief, and tax cuts. But he apparently doesn't want that. He wants to use the crisis as an opportunity to placate every constituency he owes from the campaign.

This is, of course, nothing new, nor is it particularly surprising. It certainly isn't a new kind of politics, however.

I performed a little exercise on the CBO analysis of the stimulus bill (PDF): I took all the expenditures the listed from the various titles of the bill and marked which ones looked stimulative to me and which ones looked like ornaments on the Christmas tree. My criteria where as follows: For something to be judged "stimulative" it had to either be one of the following:

1. A genuine infrastructure improvement (roads, bridges, public buildings, electrical grid, or broadband infrastructure).
2. A tax cut.
3. Something that sounded reasonable for helping out the unemployed.
   

Here's what I came up with:


In other words, there's about $250 billion that doesn't look very stimulative to me. A quarter of a trillion dollars.

Let's assume that I've been overly harsh and $100B of that actually is stimulative. That means that we can lop of $150 billion without trying very hard.

I don't care if we add more tax cuts or not. I'll grudgingly accept that we need a whopping big infrastructure spend (even though the evidence for that seems to be somewhat paltry, and this multiplier effect has obvious logical problems). But it's simply not gonna fly for Obama to try and stampede us into wasting hundreds of billions of dollars.

He should be ashamed of himself.

Delaying DTV Is Not All Sweetness and Light

Want to know what's really going on with the decision to delay the mandated switchover to DTV? Take a look at this, from three weeks ago:

But the transition will also free up huge swaths of spectrum in the 700MHz band currently in use by analog broadcasters, which the Federal Communications Commission auctioned off last year. As FCC commissioner Robert McDowell noted on a panel at the Consumer Electronics Show in Las Vegas this weekend, "there are companies paying hundreds of billion of dollars to use this spectrum, and they expect the goods to be delivered."

One of those companies is Verizon, which ponied up nearly $9.4 billion for spectrum it plans to use for its 4G Long-Term Evolution wireless broadband network. In a letter to top members of the House and Senate commerce committees Monday, Verizon CEO Ivan Seidenberg urged members of Congress to resist any delay of the transition, warning that it could impede the company's plans. "Verizon Wireless intends to begin field testing and deployment of LTE this year," wrote Seidenberg. "Deployment of LTE, however, can only be done if we have access to the 700MHz frequencies. Delaying the DTV transition will delay our ability to upgrade those frequencies to 4G broadband for American consumers and have a negative impact on our nation's international competitiveness."

That viewpoint has put Verizon at odds with AT&T, which has signaled its support for a delay in order to ensure a smooth transition—and, coincidentally, is not planning to use its own winnings from the 700Mhz block for LTE.

It's not clear whether Verizon would really be able to make good on its plans to begin deploying its LTE network by the end of 2009. Most analysts believe that a relatively short postponement, on the order of three months, would have little effect on 4G deployment—provided it did not set the stage for further delays, as Verizon clearly fears it might. Such a delay might also avoid a spate of homeowners sliding off icy rooftops as they struggle to install new antennas.

But a longer, more disruptive delay might provide some breathing room for Verizon competitor Clearwire. That company is seeking to build market share for its own WiMAX network, a joint venture with Sprint, before LTE is ready for prime time. Clearwire has boasted that it remains years ahead of the competition, but while WiMAX networks in Portland and Baltimore are already up and running, scheduled expansions to other cities have been delayed until late 2009, even as Verizon has bumped up its own schedule. The company's stock has now been in free-fall for months, and several major backers recently announced they would take major write-downs on their investments in Clearwire. (The roster of large investors in Clearwire includes Obama-ally Google.) A toxic negative feedback loop in investor confidence could leave it unable to finance its promised buildouts for 2009. With any transition delay certain to push the spectrum handover into the next quarter of the fiscal year, if not further, the attendant uncertainty could also factor into investment decisions as Wall Street—and equipment makers—decide which standard to back.

I just love that new politics, don't you?

Gridlock, Please

I used to think that a simple split in control between the legislative and executive branches was sufficient for good government. Now I'm wondering if it isn't better to have a split in control between the two legislative houses. The GOP is having lots of fun in opposition and, after all, isn't it the essence of conservatism to say no to almost everything? The inability to get anything but the most obviously good legislation passed seems like a real winner, especially when the Presidency is held by somebody who's competent and confident in his own leadership.

I am genuinely frightened by this stimulus bill. Hopefully it can be delayed long enough for cooler heads to prevail. Hopefully the President is one of those cooler heads.

A (Possibly Rhetorical) Question About Bonuses

Wapo:

President Obama yesterday scolded Wall Street bankers who received millions of dollars in bonuses last year, calling the payouts "shameful" and chiding the executives for a lack of personal responsibility at a precarious time for the nation's economy.

Now if I were a board of directors hiring a CEO, I'd think that the bonus criteria were spelled out in great detail in the employment contract. Is this the case? And if it is the case, are we really dealing with shamefulness, or are we dealing with equal parts of stupidity and of assumptions from a bygone era (aka six months ago)?

I have to say that the amount of red meat being tossed to the Left by Obama is verging on the excessive. (If we're going to hold Obama responsible for contents of the whimsically named "stimulus package", we're way, way past excessive, but I think this is probably more a rookie cat-herding deficiency than anything else.) Maybe that's just as well. The GOP seems to be remembering how much easier (and more constructive) it is to be an opposition minority. Every time Obama pours some more gasoline on the fire, the more the Republicans find their footing (and an increasingly alarmed fundraising base).

The Audacity of Shooting Your Mouth Off

Obama has seized on the energy issue--both as a matter of independence and as a climate issue--and has co-opted it. Good for him. But when you step up to such an issue, you assume the risk of being blamed when things go sideways, just as you assume the reward if real progress is made.

So Obama goes and talks about solar, wind, and ethanol very specifically in his inaugural speech but he is silent on nuclear power. Those three are certainly among the most promising technologies. But each has unsolved technological problems that prevent their deployment today.

Solar is too expensive. It can't scale easily to become a significant percentage of load for the grid, both because of an inadequate grid and because its power density sucks. And, finally, it's not suitable for base load until we find a really good way of storing the energy for when the sun isn't shining.

Wind is less expensive and scales better, but it still doesn't scale well enough to take over the needed percentage of power generation, and it suffers from the same base load problem as solar.

Ethanol can be used for base load, but it's ridiculous unless we're talking cellulosic ethanol and that's not really out of the lab yet. Furthermore, scalability is a big issue: What happens to the soil if you're using all your mulch for fuel? How do you transport gigatonnes of biomass to processing facilities?

Now, all of these energy sources are very promising. We should be investing heavily in solving the technical problems associated with them. But what if the technical problems can't be solved? We run across promising technologies like this all the time. (Think nuclear fusion...)

Meanwhile, nuclear power has no technical problems. It's got very high power density. It works with the existing electrical grid. It scales wonderfully. It's not much more expensive than fuel oil-, gas- or coal-fired electricity. It's safe (yes, really). Its waste is easy to dispose of. (There is no waste disposal problem at a technical level. There certainly is a political problem, but there's a political problem with all of this stuff: it's not as cheap as coal, gas, and fuel oil.)

But Obama is avoiding any mention of nuclear power. From his tepid position during the campaign to his thunderous silence in his early days in office, it's clear that Obama doesn't want to talk about nuclear. Maybe he wants to deploy it quietly so as not to enrage the Left, but we can't assume that yet.

Here's the bottom line. Obama has staked a big chunk of his reputation on improving the energy picture. Nuclear has better risk-to-reward characteristics than any of the energy sources that Obama thinks are politically correct. He needs to build out nuclear as a hedge against technological failure. Failure to do so comes with a steep price: If Obama could have fixed the energy problem with nuclear and all the other technologies come up dry, he deserves every bit of blame that we can heap upon him.

There are a few things that the government could do that would dramatically improve the deployability of nuclear power plants. First, the licensing process is intentionally obstructive. It could be streamlined with no detriment to safety.

The government could go a long way towards solving the NIMBY problem (Not In My Back Yard) and its more virulent ideological cousin, BANANA (Build Absolutely Nothing Anywhere, Near Anyone). Community review is all well and good but there's this thing called the common good that eventually needs to trump the delicate sensibilities of every single community everywhere. It's a sad fact that, as an industrial society, we have to have areas that are nasty and, well, industrial. A small risk attends the conduct of industry. The government can codify this risk, plan for it, and legislate when the reward so vastly outweighs the risk that we move forward.

Another major impediment to nuclear power is its insurability. Nuclear power is much safer than most other energy technologies in terms of number of accidents and ill effects caused by pollution. However, a major accident will happen all at once and affect a very large number of people. So on a per-capita, per-time-period basis, nuclear power is riskier than other technologies and therefore more difficult to insure. Government underwriting would dramatically reduce the cost of the technology with virtually no additional taxpayer exposure. (Think about it for a minute: If there's a nuclear disaster in the United States, is there any way that the government doesn't wind up footing the bill anyway?)

Finally, there are research activities that only the government can perform. Lots of nifty next-generation technologies are floating around. (My favorite is the Pebble Bed Modular Reactor, but there are plenty of others.)

Sadly, Obama doesn't seem interested in any of this kind of policy. I think it's incumbent upon us as citizens to make sure that he knows we're watching him on this. He needs to understand the risk he's running and the consequences of an ideological stand on this issue.

It's a Metaphor or Something, Right?

Former French President Chirac hospitalised after mauling by his clinically depressed poodle. But wait! There's more:

The animal, named Sumo, had become increasingly violent over the past years and was prone to making 'vicious, unprovoked attacks', Chirac's wife Bernadette said...

Mrs Chirac said: 'The dog went for him for no apparent reason."

Now he knows how Bush felt in the runup to the Iraq invasion.

Some Good Advice

A very fine To-Don't List for Republicans in opposition. Here's hoping that somebody's listening.

The Annotated Speech

Here's Obama's inaugural speech, with my comments:

My fellow citizens: I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors.

I thank President Bush for his service to our nation as well as the generosity and cooperation he has shown throughout this transition.

Forty-four Americans have now taken the presidential oath.

So what about that oath? Not to the text, exactly. Is that a problem? Does he need to have a do-over? The text in Article II, Section 1, says, "Before he enter on the execution of his office, he shall take the following oath or affirmation:--'I do solemnly swear (or affirm) that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States.' " Roberts botched it. If Obama just says it out loud, correctly, is he empowered to conduct himself as President? What if he doesn't?

The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forbearers, and true to our founding documents.

So it has been. So it must be with this generation of Americans.

That we are in the midst of crisis is now well understood. Our nation is at war against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some but also our collective failure to make hard choices and prepare the nation for a new age.

We are clearly in a pretty bad recession. But beyond that, I'm having a bit of trouble deciding just how panic-stricken we all should be. The rest of the world certainly doesn't love us, but they hardly ever do--sometimes they're more vocal about it. I think the world respects us, even though they'd like to reduce our power. No surprise there.

So the depth of the alleged crisis hinges on how bad the recession is. We should be worried. But isn't Obama doing the same thing for which Bush has been pilloried lo these last seven years? Isn't he using fear for political advantage?

Homes have been lost, jobs shed, businesses shuttered. Our health care is too costly, our schools fail too many, and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.

These are the indicators of crisis, subject to data and statistics. Less measurable, but no less profound, is a sapping of confidence across our land; a nagging fear that America's decline is inevitable, that the next generation must lower its sights.

Today I say to you that the challenges we face are real, they are serious and they are many. They will not be met easily or in a short span of time. But know this America: They will be met.

A bit of an odd tone here. He needs to say this, of course. We have lost our confidence and we badly need to recover it. But Obama almost sounds like a scold here.

On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.

On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn-out dogmas that for far too long have strangled our politics.

We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.

I've now had 24 hours to let this sink in. Boy, what a load of self-righteous crap. One man's childishness is another's principled opposition. Or has Obama already forgotten his own stand on the Iraq war and how he justified it?

Don't get me wrong: I'm all in favor of improving the tone and conducting politics with neither vitriol nor hatred. But Obama has, in the past, shown a keen understanding that opposition is the best friend a good law or policy can have. Only through principled resistance can the inevitable weak spots in any policy be identified and shored up.

In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of shortcuts or settling for less.

It has not been the path for the faint-hearted, for those who prefer leisure over work, or seek only the pleasures of riches and fame.

Rather, it has been the risk-takers, the doers, the makers of things -- some celebrated, but more often men and women obscure in their labor -- who have carried us up the long, rugged path towards prosperity and freedom.

For us, they packed up their few worldly possessions and traveled across oceans in search of a new life. For us, they toiled in sweatshops and settled the West, endured the lash of the whip and plowed the hard earth.

Would anyone care to identify those that seek only the pleasures of riches and fame?

For us, they fought and died in places Concord and Gettysburg; Normandy and Khe Sahn.

This one's really weird. There's an appeal to the Vietnam generation in here but nothing for those fighting in Iraq (twice) or Afghanistan. This is the point where I started to get very concerned. There's lots of red meat in here for sixties-era liberals, but considerably less for modern pragmatists, progressive or otherwise. Since Obama's main appeal is his pragmatism, this is disappointing at best, alarming at worst.

Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction.

This is the journey we continue today. We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions -- that time has surely passed.

"Standing pat" = "very bad behavior." Standing pat is often the right thing to do--not always, but often. I don't revolutionary change except where it's blindingly obvious that it's needed. There are several areas where that's true (the current monetary crisis, the lack of an energy policy that makes sense, the lack of any form of civility in government) but there are plenty of areas where you can only make things worse.

Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

Ooooo, maybe it really is the Great Depression! Or maybe just 1936.

For everywhere we look, there is work to be done.

The state of our economy calls for action: bold and swift. And we will act not only to create new jobs but to lay a new foundation for growth.

We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.

I'm behind him on the electric grid and high-speed internet initiatives. But, are we really suffering reduced growth because of our highway system? Yeah, yeah, maintenance is important, but is that what he's saying here?

We will restore science to its rightful place and wield technology's wonders to raise health care's quality and lower its costs.

And if health care stubbornly gets more expense in spite of technology's wonders or, more likely, because of them, what then?

We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age.

Sun... check. Wind power... check. Ethanol... check? And of course, nuclear... huh. Imagine that. No nukes. What a surprise!

I'm inclined to give Obama a lot of rope in the hopes that any energy policy is better than no energy policy at all. But let's set down a marker right now, shall we? Obama is predicting both a climatic crisis from carbon-based fuels and an economic crisis as the supply of those fuels slowly declines. So it's important to try lots of things in order to generate an optimal solution to the 21st century's energy demands. But solar, wind, and ethanol all have significant technical hurdles to overcome before they can become anything like a panacea.

Nuclear, on the other hand, has no hurdles. The waste disposal problem isn't a technical problem; it's a problem of public will. We could meet all of our demand with nuclear power alone. We could drive our carbon emissions down by at least 60% (assuming that electric cars don't pan out, otherwise emissions could go even lower) with nuclear power alone.

If Obama fails to install a robust nuclear program and fails to plan for an increased nuclear role, then he is guilty of extreme energy malfeasance. He will be judged very harshly if none of the other renewable technologies takes hold strongly enough to solve the problem.

All this we can do. All this we will do.

Now, there are some who question the scale of our ambitions, who suggest that our system cannot tolerate too many big plans. Their memories are short, for they have forgotten what this country has already done, what free men and women can achieve when imagination is joined to common purpose and necessity to courage.

What the cynics fail to understand is that the ground has shifted beneath them, that the stale political arguments that have consumed us for so long, no longer apply.

Barry baby, we all love ya, but some of those "stale political arguments", like being cautious when adopting revolutionary change and paying for your government as you go, rather than running up truly alarming debts, are not very stale.

The question we ask today is not whether our government is too big or too small, but whether it works, whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified.

Where the answer is yes, we intend to move forward. Where the answer is no, programs will end.

Another weirdy here. Where programs don't help families or retirees or improve personal care, we'll cancel programs? What does this say about the defense department? Commercial supports? Policing programs? Hell, what does it say about energy programs?

And those of us who manage the public's knowledge will be held to account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government.

If this is the clarion call to increased openness, cool. But if it is, why is it so, uh, obscure?

Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched.

But this crisis has reminded us that without a watchful eye, the market can spin out of control. The nation cannot prosper long when it favors only the prosperous.

The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity; on the ability to extend opportunity to every willing heart -- not out of charity, but because it is the surest route to our common good.

Calls for regulation of markets? Well, OK. But the "ability to extend opportunity to every willing heart"? What does this mean? That the government will give you a job if you want one? Socialist claptrap.

As for our common defense, we reject as false the choice between our safety and our ideals.

Our founding fathers faced with perils that we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations.

Those ideals still light the world, and we will not give them up for expedience's sake.

And so, to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman and child who seeks a future of peace and dignity, and we are ready to lead once more.

I think I hear Miracle Max in the distance, saying, "Goodbye, boys! Have fun stormin' the castle!" It's a nice line, but it's a cheap line. The expensive part comes when you can cut some corners to vastly improve your odds of avoiding an attack or live (or die) by your principles. Still, Obama gets to have a little naivete on his first day. Then we'll see.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with the sturdy alliances and enduring convictions.

...and internment camps and military tribunals and forced rationing and J. Edgar Hoover. Again, lovely sentiments. Let's watch the self-righteousness, OK?

They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use. Our security emanates from the justness of our cause; the force of our example; the tempering qualities of humility and restraint.

We are the keepers of this legacy, guided by these principles once more, we can meet those new threats that demand even greater effort, even greater cooperation and understanding between nations. We'll begin to responsibly leave Iraq to its people and forge a hard- earned peace in Afghanistan.

Nice tap-dance on Iraq. But just what is a "hard-earned peach in Afghanistan"? And, given that we've just said that we're not going to wield power for power's sake, what exactly is the goal? And what is the national interest?

Obama has a long history of assuming that the Pottery Barn rule of international conquest trumps all other considerations when it comes to Afghanistan. We broke it, so we have to fix it. But he forgets that we broke it because we needed to eliminate a threat. That threat no longer exists in Afghanistan. It moved next door, to Pakistan. Afghanistan is a pile of rocks. It would be lovely if democracy flowered out of the mountains and the deserts there, but it's not the main requirement. The main requirement is to deny terrorists safe haven. Obama needs to understand the priorities better.

With old friends and former foes, we'll work tirelessly to lessen the nuclear threat and roll back the specter of a warming planet.

Sounds lovely.

We will not apologize for our way of life nor will we waver in its defense.

And for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that, "Our spirit is stronger and cannot be broken. You cannot outlast us, and we will defeat you."

For we know that our patchwork heritage is a strength, not a weakness.

We are a nation of Christians and Muslims, Jews and Hindus, and nonbelievers. We are shaped by every language and culture, drawn from every end of this Earth.

And because we have tasted the bitter swill of civil war and segregation and emerged from that dark chapter stronger and more united, we cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace.

Encouraging. There's a very small sop to the multiculturalist crowd in here, but Obama seems genuinely to understand that America's power comes from its citizens being Amercians of the unhypenated kind.

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect.

To those leaders around the globe who seek to sow conflict or blame their society's ills on the West, know that your people will judge you on what you can build, not what you destroy.

To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history, but that we will extend a hand if you are willing to unclench your fist.

To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds.

And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to the suffering outside our borders, nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it.

As we consider the road that unfolds before us, we remember with humble gratitude those brave Americans who, at this very hour, patrol far-off deserts and distant mountains. They have something to tell us, just as the fallen heroes who lie in Arlington whisper through the ages.

We honor them not only because they are guardians of our liberty, but because they embody the spirit of service: a willingness to find meaning in something greater than themselves.

And yet, at this moment, a moment that will define a generation, it is precisely this spirit that must inhabit us all.

For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies.

It is the kindness to take in a stranger when the levees break; the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours.

It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate.

Yup, very nice. Boilerplate.

Our challenges may be new, the instruments with which we meet them may be new, but those values upon which our success depends, honesty and hard work, courage and fair play, tolerance and curiosity, loyalty and patriotism -- these things are old.

These things are true. They have been the quiet force of progress throughout our history.

Best lines of the whole speech, and profoundly comforting to conservatives, especially after everything that came before it.

What is demanded then is a return to these truths. What is required of us now is a new era of responsibility -- a recognition, on the part of every American, that we have duties to ourselves, our nation and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character than giving our all to a difficult task.

This is the price and the promise of citizenship.

This is the source of our confidence: the knowledge that God calls on us to shape an uncertain destiny.

This is the meaning of our liberty and our creed, why men and women and children of every race and every faith can join in celebration across this magnificent mall. And why a man whose father less than 60 years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.

So let us mark this day in remembrance of who we are and how far we have traveled.

In the year of America's birth, in the coldest of months, a small band of patriots huddled by nine campfires on the shores of an icy river.

The capital was abandoned. The enemy was advancing. The snow was stained with blood.

At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people:

"Let it be told to the future world that in the depth of winter, when nothing but hope and virtue could survive, that the city and the country, alarmed at one common danger, came forth to meet it."

America, in the face of our common dangers, in this winter of our hardship, let us remember these timeless words; with hope and virtue, let us brave once more the icy currents, and endure what storms may come; let it be said by our children's children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.

Thank you. God bless you.

And God bless the United States of America.

Final thoughts: This is mostly red meat for the Left. It is profoundly in conflict with the image of moderation that Obama has projected through the general election and the transition. Still, if all the Left gets is a pretty speech and the rest of us get the benefit of a cool, pragmatic President, we'll be doing quite well.

I wish our new President very good luck. He'll need it. I expect to disagree with him at least half of the time. I hope that he takes that disagreement (or, rather, the collective disagreement that emerges from the conservative zeitgeist) in the spirit in which it is offered. If he can co-opt criticism and transform it into excellent policy, he'll be a great President. If he can't, he'll be Jimmy Carter.