Monday, August 18, 2008

Against Michael Phelps

Anyone overdosed on Michael Phelps yet? Your not alone. I guess the incessant hype has gotten me to thinking critically about the Michael Phelps phenomenon.

After doing a little digging and thinking I have some opinions, observations.

Is Michael Phelps the greatest athlete ever? I think that is the wrong question. The 8 gold medals reveal not so much the greatness of Michael Phelps but the lack of competition in swimming right now. Sorry to pour cold water on the hype machine but facts are facts. The competition in swimming is just not there at the moment and that's why one guy (admittedly pretty good) was able to get 8 gold medals. The medal counts in swimming show the withering of competition clearly: United States 31 medals, Australia 20, China 6, France 6, Japan 5. Is something missing here? Remember the old days? Countries like the Soviet Union (then Russia), Germany, the whole east block and Great Britain were always there. That's really the elephant in the swimming room right now: the drop off in competition. In one Olympics (1976) the Soviet Union has actually got more medals in swimming than the U.S. -but they are not even in the top 5 now. That is an amazing cratering of a once potent athletic force. A potent force that swimmers of the last generation had to deal with but Phelps does not. As recently as 2004 Russia had a still dominant swimmer in Alex Popov who came out of the old now defunct Soviet system. But no more. Russia is hardly a shadow of it's former self in the world of swimming, same for the east block in general and also Britain has dropped off some.

The biggest competitor to the U.S. in swimming right now is Australia - a nation with less than 1/10 the population of the United States and less than 1/10 the GDP. After Australia the drop off is profound: France with only 6 swimming medals, China with 6 and Japan with 5. Compare this with the medal count in Track and Field (so far): United States 9, Kenya 7, Russia 6, Belarus 5 and Jamaica 4. Much more competition! Track and field of course is a sport with much lower barriers to entry - a sport that poor countries can do well in and by it's nature generates far more real competition than international swimming ever did. Sprinters have come out of the Carribean and Africa for decades. North African nations (and Great Britain) produce great middle distance runners. Kenya and Ethiopia produce great marathoners. Sometimes Japan and Korea produce great marathoners. A Chinese man won the 110 hurdles in 2004. The field is wide open. Swimming on the other hand is a somewhat elite sport that requires a lot of money and capital. African nations do not have the money for swimming programs. They do not need money to generate runners. At this point international swimming is the preserve of just a hand full of rich western nations - and Michael Phelps is the beneficiary of this evaporation of competition.

I have no doubt that if there had been swimmers of the caliber of Ian Thorpe or Alex Popov at this Olympics Phelps would not have had much of a chance to match Spitz. And Spitz was lucky to have competed *before* the rise of the Soviet Block swimming machine was complete. With more open competition neither Spitz nor Phelps medal counts would have been possible. To match Phelps in track someone would have to do something like this: win the 100m, 200m, 400m and 800m, 4X100 relay and 4X400, long jump and triple jump. It's never going to happen because track and field is just way more competitive.

As far as world and Olympic records (set by Phelps) go I have one word: technology. Swim suits and pool technology make swimming records pretty meaningless at present. Lets see how long Phelps records last. Also the margin of victory for Phelps on average has been less than Spitz.

Lastly, two events have been added to Olympic swimming since the Spitz era and this gave Phelps a clear advantage over Spitz as far as medal counts go.

So much for Michael Phelps being the greatest athlete of all time: the real story is the drop off in competition in an already constrained elite sport.

Phelps has gotten endless kudos in the media for "doing so much for the sport of swimming". I would like to ask: how so. Swimming is not a new sport nor is it a sport that Americans have had a difficult time competing in. I just don't get this. Swimming has been around since the very first Olympics and Americans have been strong competitors since the beginning. Remember names like Johnny Weismueller and Buster Crab? How exactly has Phelps been responsible for "doing so much for the sport" like our talking heads blather on about. I just don't get this. Can someone explain this to me?

I think what Phelps is doing so much for are certain American advertisers and marketers who seem intent on creating a cultural icon who can be used for their commercial purposes. Not quite the Olympic ideal. I am old enough to remember the 72 Olympics and I can tell you there was nothing like the hype machine over Spitz prior to the games. He pretty much exploded onto the scene during the games - and that seemed more real to me than this Phelps thing has felt. It has felt contrived and almost a fait-accomplis from the beginning. I suspect that the experts knew well that international swimming competition is not there right now and that gave Phelps practically a lock (barring a big screw-up). The only surprise to me was that two of the races were so close.

Another bad aspect of this: the Phelps story (in the American media) has crowded out other good stories that would have otherwise been presented. One of the highlights of this Olympics has been the record shattering 100 Meter final by Usain Bold. To bad NBC ignored it and jammed Michael Phelps down our throat all night long and waited until 2 in the morning to show Bolt.

Friday, August 15, 2008

High-Tech Hitchhiking

I just read an article on something I have thought about myself: using cellphones and GPS devices to enable "High Tech Hitchhiking." See http://www.theoildrum.com/node/4406

This is a great idea. A really really great idea. In a nutshell the concept is to give people the ability to share their cars with others in a dynamic "spur of the moment" way and give users Ebay like ratings to ensure safety.

But this concept will have serious hurdles to get over if it is ever to come to pass.

Car sharing of this type would be a huge threat to the taxi industry and other entrenched players and those industries cannot be expected to just sit back and let this happen. They will do everything in their power to stop this from happening and do everything conceivable to undermine it should it start. And we should not underestimate their power. I do not think this kind of thing will be allowed unless there is a real sense of crisis (environmental or oil supply). And yes there are plenty of ways to stop this.

BTW, a theme you will be seeing on this blog will be how manipulated our economy is and this is a very good place to start.

Car sharing involving money is illegal in almost all of the United States. Very illegal and vigorously prosecuted.

You cannot get insurance in my state for a car that will be shared on a regular basis with non family members (even if no money is involved). They will not sell it to you at any cost. I asked. It's *state law*. I suspect that most states have this same restriction. This pretty much puts the kibosh on this kind of car sharing given that you cannot drive at all in my state without car insurance!

The taxi industry is technically a cartel in most places.

If you think about it this is a massive manipulation of our economy! In most places there is an absolute fixed number of taxi's allowed and in order to operate one you must buy a "medallion" which may cost tens or hundreds of thousands of dollars. Can you imagine other industries regulated this way? How about the government mandating that there can only be X amount of websites. If you want one you must purchase a "medallion" from someone who already owns a website. How about restaurants. Cleveland will only allow 2349 restaurants and if you want to open one you must purchase one of the 2349 medallions? It's laughable - except that a major U.S. industry (taxis) actually operates this way!

I've heard the arguments in favor of having this kind of cartel (yes technically this *is* a cartel) and they are not compelling to put it mildly. Biggest argument is space: if we were to allow more taxis our already crowded streets would get even more crowded. This is backwards. If there were more taxis (and car sharing in general) there would be FEWER private cars and there would be MORE space and LESS traffic. There are orders of magnitude more private cars than cabs and I have not seen any proposal to force the far larger group of private car owners to purchase a medallion before they can buy a car. If space is the problem that you want to solve you need to limit private cars and *encourage* taxis and car sharing. The space argument is not a reason it is an excuse. The logic behind this argument is shallow and backwards.

Second argument for medallions: safety. "We can't let just anyone drive a cab lest there be safety issues, so we have to limit the number of taxis". Lets go back to restaurants. Restaurants have safety regulations they must follow but we do not limit the number of restaurants in a city. This to is not a reason but is another excuse.

In fact there is no real reason for the taxi cartel (just excuses) and in todays world not only does it serve no purpose (it did at one time as we will see below), it is counterproductive.

So why do we have this cartel with taxis but not with other industries?

The answer is that allowing cars to be shared (a taxi is a form of shared car) would limit the demand for cars and enhance the appeal of inner cities (over suburbs) and this is the *opposite* of what our leaders wanted after WWII - when these policies were enacted or greatly strengthened. Potential growth in the taxi industry had to be seriously hamstrung - and it was via the medallions, and car sharing had to be discouraged - and it was.

Car sharing has been seriously limited, made illegal or discouraged for decades.

Restaurants on the other hand do not allow people to "share kitchens" and thereby threaten the appliance industry. Restaurants do not eliminate the need for refrigerators and stoves in houses. Websites threaten nothing in this manner either and the mid 1990's -when the web appeared- was a very different era than the depression and post WWII eras when transit policy regarding cabs was being set.

The U.S. government very deliberately enacted policies after WWII to encourage private car ownership and discourage/hamper/limit rail and any forms of car sharing (like the taxi). The idea was that subsidizing the car industry and single family homes - especially in the suburbs, would be a good way to stop the country from sliding back into depression - which was greatly feared. So the cartel idea had some merit then.

Think of all the industries that benefited in the 1940's from a high degree of private car ownership and usage: the auto industry itself, steel, rubber electronics, glass and oil. In 1946 taxi medallions fit right into this. The idea was that people should not be taking taxis around inner cities (or god forbid mass transit) they should be driving their cars to and from the suburbs. *That* was the way to generate solid economic growth at that time. Or so it was thought.

But those reasons (whether or not they were even valid then) no longer make sense given limited and expensive oil and global warming. Now we want and need greater sharing in the transport sector.

Problem is the taxi industry relies on this system. They have (literally) bought into it by purchasing very expensive medallions and could be devastated by private car sharing as described in http://www.theoildrum.com/node/4406. They will fight this like mad. They will fight this in court, they will fight this in state capitals (where their $500/hour lobbyists do their best work) they will fight this in Washington. Not loudly, not with press conferences but as silently as they can. They will fight it in a way that makes it look like they have done nothing. Make it look like things "just happened." That people just "don't want to share their cars". That's the way a determined minority with something to lose often fights in America. Make it look like things were just "freely decided." All they have really have to do (in my state) is keep the laws and insurance regulations the same and then insist (when pressed) that the public just "decided" they didn't like to share their cars.

The taxi industry where I live takes this stuff very seriously. "Gypsy" cabs are fought like mad. Certain seemingly minor offenses are felonies. They feel their livelihood is at stake and clearly they would be threatened by High-Tech Hitchhiking and will fight tooth and nail against this.

Don't expect them to lose barring a real crisis.

The hydrogen economy will never happen

I am going to start off this blog with a somewhat bold prediction: the so-called "Hydrogen Economy" (http://en.wikipedia.org/wiki/Hydrogen_Economy) that has been so hyped for the last several years is not going to happen. Ever. It's a classic smoke-and-mirrors dream. If you are an investor don't put any long term money into companies that support it - typically Fuel Cell makers, as you will see below. In the short term hype may cause some action in this area but in the longer term this is a dead dog.

Why? Read on.

Lets look at what Hydrogen fuel cells do and what they would *have* to do to compete. What they do is generate electricity directly from fuel via an electrochemical conversion device (see http://en.wikipedia.org/wiki/Fuel_Cell, or http://auto.howstuffworks.com/fuel-cell.htm) and the cost of generating electricity this way is far higher than the far more simpler method of just burning fuel to boil water and turn a turbine. The most convenient fuel for a fuel cell is of course Hydrogen, hence my usage of the term "Hydrogen Fuel Cell" above. Hydrogen is fed into the fuel cell it combines with Oxygen and generates electricity in the process. Sounds great doesn't it? But we must answer the question of where does the hydrogen come from and how is it stored and in answering that we will see the fatal flaw.

Fuel cells get Hydrogen from either electrolysis of water or by splitting a hydrogen atom off a hydrocarbon molecule (like petroleum). If you use electrolysis to get the hydrogen you are guaranteed of using more energy in getting the hydrogen than you get by using it in a fuel cell. This is due to fundamental laws of physics which cannot be broken. Oops. OK so what about splitting the Hydrogen off a hydrocarbon. Well why not just burn the hydrocarbon (easy!) instead of splitting off hydrogen (moderately hard) and then using a fuel cell to generate electricity from it (moderately hard to very hard).

The fact is it will *always* be easier to just burn the hydrocarbon and this is the reason the Hydrogen economy will never happen. Also consider the problems storing and moving Hydrogen. Hydrogen is extremely difficult to contain. It is the *smallest* atom there is and the problems in containing it are legendary. Just take a look at this: http://en.wikipedia.org/wiki/Hydrogen_storage

Problems in storing Hydrogen and making Fuel Cells competitive with other methods of generating electricity will *not* be "solved by technology" (the tooth fairy of our time). It will always be cheaper and easier to use the hydrocarbons that we have (Crude Oil and Natural Gas primarily) vs. stripping out hydrogen first and *then* using the hydrogen. This is fundamental and will never change.

OK so why the hype. The hype is there because a "Hydrogen Economy" is something that people *want to believe in*. It's a great story: we will get massive amounts of power from something (Hydrogen) that when used in a Fuel Cell generates nothing but water as waste. Notice that I have left this key aspect and selling point till the end. That is a great line isn't it! We use Hydrogen (the most abundant element in the universe) and just combine it in a fuel cell with Oxygen and va-voom we get electricity and water. What could *possibly* be better than that. But like room temperature nuclear fusion of a generation ago (which sounded every bit as good as the Hydrogen economy) it's not going to happen. The "legs" of the story in both cases are it speaks to what people *want* to believe: cheap limitless energy with no pollution. Not reality.

Bottom line: The "Hydrogen Economy" and Fuel Cells will forever be limited to demonstration projects, glorified toys and hype.