Archive for October 5th, 2011
Transportation Spending an Indicator?
Posted by Joshua Sharf in Business, Economics, PPC, Transportation on October 5th, 2011
Over at Carpe Diem (if you’re not reading it, you should), Mark Perry is arguing against a double-dip recession, suggesting instead that continued sluggish growth, the sort of grey sludge economy we’ve had for a while now, is the mostly likely scenario. One of his indicators is rail intermodal traffic, which set a volume record last week:
By itself, this doesn’t seem to be too strong an indicator. We’re just about at the seasonal high for the year, and year-over-year, the increase isn’t all that impressive. Also, when I spoke with the head of UP’s media relations a few months ago, he agreed that intermodal generally moves finished goods, and is an indicator of consumption, while non-intermodal carloads are raw materials, and thus a better proxy for production. They’ve barely moved. So both sides seem to confirm what the other numbers are showing.
But up is better than down, and some of the weakness may be capacity. Railroads seem to be moving to deal with that problem, and railcar manufacturers in Virginia and Arkansas are hiring new workers to meet the demand. Most of this is coming from lighter, stronger coal cars, as well as chemical and petroleum cars.
I’m contracting at a major trucker based in Omaha, and they’ve been reluctant to increase capacity for a couple of reasons, including general uncertainty. There’s a shortage of long-haul drivers, and already a capacity constraint, and yet they and at least one other mid-sized truck company I’ve spoken to are still not expanding their fleets.
However, they seem to be the exception. Transport Topics (behind a paywall) is reporting that Class 8 truck sales – which include all tractor-trailers – are the highest since early 2007. Some of this may be in anticipation of new rules that will force companies to have more trucks on the road to deliver the same amount of goods. To that extent – if at all – the additional purchases are an inefficient allocation of capital. But they aren’t likely the entire source of growth. Companies are already short of inventory and capacity, and are simply expanding to meet perceived demand.
In theory, all these increased orders for trucks and railcars should be predicting continued economic growth. In practice, we could still get blindsided by Europe, or it could be an example of companies expanding into a contraction, like a classic business cycle.
Nobel Prizes and Consensus – Updated
Posted by Joshua Sharf in PPC on October 5th, 2011
So much for the idea that science operates by consensus. If it did, Dan Schechtman would still be working in obscurity, rather than having just been named the 2011 Nobel Prize winner in Chemistry.
Schechtman won for discovering something called quasicrystals (the article is a little technical). We all think we know what crystals look like: solid forms that are not only symmetrical, but that also repeat endlessly. Schechtman discovered crystal structures that are symmetrical, but have patterns that don’t repeat – ever – when they’re put next to each other. It’s a three-dimensional analogue to Penrose Tiling, where the pattern is symmetrical about the center (in this case, it repeats 5 times), but never repeats as you move outward.
The world of crystallography didn’t receive Schechtman’s discovery with open arms:
“People didn’t think that this kind of crystal existed,” she said. “They thought it was against the rules of nature.”
…
“I told everyone who was ready to listen that I had material with pentagonal symmetry. People just laughed at me,” Shechtman said in a description of his work released by his university.
For months he tried to persuade his colleagues of his find, but they refused to accept it. Finally he was asked to leave his research group, and moved to another one within the institute.
Shechtman returned to Israel, where he found one colleague prepared to work with him on an article describing the phenomenon. The article was at first rejected, but finally published in November 1984 — to uproar in the scientific world. Double Nobel winner Linus Pauling was among those who never accepted the findings.
“He would stand on those platforms and declare, ‘Danny Shechtman is talking nonsense. There is no such thing as quasicrystals, only quasi-scientists,”’ Shechtman said.
Schechtman encountered fierce resistance to a laboratory discovery, and was rightly forced to go through the scientific process of debate, discussion, and reproducible experiment. Computer models showing that such shapes were possible wouldn’t have been enough. Making the lab measurements wouldn’t have been enough. Making the crystals in once wouldn’t have been enough. Explaining other scientists’ data wouldn’t have been enough. Only when he was able to use his discovery to make useful predictions was it enough for us. (The article says that the discovery took place on April 8, 1982, which corresponds to the first day of Passover that year. Insiders will understand the structure of this paragraph.)
Climate orthodoxy considers itself bound by almost none of these constraints, and seeks to operate by consensus. Science can be as susceptible to groupthink as any other pursuit. It’s only the rigor of repeatable, predictive, real-world experimentation that keeps it grounded and validates its conclusions.
UPDATE: The official Nobel Prize press release recognizes Schechtman’s, “fierce battle against established science.” Imagine that.
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