“Another big trend at work: The Renault robots are ‘collaborative,’ designed to work in proximity to people. Older types of factory robots swing their steel arms with such force that they can bludgeon anyone who strays too close. Using sonar, cameras or other technologies, collaborative robots can sense where people are and slow down or stop to avoid hurting them.” Read more
Ric Edelman is one the top financial advisors in the US. His firm, Edelman Financial Services, has 41 offices across the country. And he thinks, all things constant, most financial advisors as we’ve known them won’t be around much longer.
At Exponential Finance, Edelman said, “I firmly believe that in the next ten years, half of all the financial advisors in this country will be gone.” Read more
So it was great to get back to New York and be able to report on what is called the“New NY Broadband Program.” It involves a $500 million expenditure to help ensure that New Yorkers across the state have access to current-generation Internet capacity. There’s lots of potential in the plan, targeted at providing every New Yorker with access to 100 megabit per second (Mbps) service (10 Mbps uploads) by the end of 2018. Because New York expects a 1:1 match from the private sector for each grant or loan it makes, that means the state hopes to be deploying at least $1 billion on high-speed Internet access infrastructure.
“If he was paid by the oil and gas industry lobby he couldn’t have written a more favorable article for them.”—Elon Musk
“Canada’s domestic digital divide, with the North as its epicenter, has been a point of growing concern over the last several years. Much of the internet in the northernmost regions of the country is still beamed down by satellites, but a plan to link Europe and Asia with fiber optic cable via Nunavut is currently being negotiated by a Toronto-based company called Arctic Fibre.”
“Living Breakwaters is a comprehensive design for coastal resiliency along the Northeastern Seaboard of the United States and beyond. This approach to climate change adaptation and flood mitigation includes the deployment of innovative, layered ecologically-engineered breakwaters, the strengthening of biodiversity and coastal habitats through “reef streets”, the nurturing and resuscitation of fisheries and historic livelihoods, and deep community engagement through diverse partnerships and innovative educational programs. The transformative educational dimension amplifies impact to the next generation of shoreline stewards while leveraging the expertise of the members of the SCAPE Architecture team, who are making groundbreaking inroads into state and federal agencies, setting new precedents for multi-layered and systemic approaches to infrastructure planning.”
LINK: Governor Cuomo Announces Living Breakwaters Project Launch
It’s been awhile since the cost of gasoline topped $4 in the U.S. The national average hit $4.11 on July 11, 2008 and came close in May 2011 at $3.96. On New Years Day 2015, I drove through the night from Chicago to Boston. Despite the cold weather, the economics of fuel made it the best day for a road trip in years. I bought gas at a Pilot service station just off the Ohio Turnpike at $1.92/gallon. For me, it seemed like a bargain. Yet, 23 states charge less for gasoline than Ohio.
Now, at the end of May 2015, gas is rebounding from that low. Drivers on Memorial Day weekend faced the highest cost for gasoline of the year so far.
It’s tempting for politicians to advocate using tax breaks to smooth price spikes. With energy often surpassing the expense of food and rent and with so many individuals using fuel to make a living, reducing user fees or taxes during periods of very high fuel cost seems like the humane thing to do.
It seems humane, but it has the opposite effect. In fact, it is deeply punitive! That’s because the cost of gas is not an act of nature, nor even of free market economics. It is a product of cartels, special interests, conflict and FUD (fear, uncertainty and doubt). Offering relief during price spikes sustains demand while doing absolutely nothing to increase supply. This, in turn, exacerbates the spike, creates shortages for critical services and transfers enormous sums of money from consumers to producers. In effect, it is a free gift for producer nations.
In fact, consumers and consuming nations are best served by a raising taxes in lockstep with fuel price increases.
In May 2011, as gas prices were spiking to an all time high, a group calling itself National Taxpayers Union or NTU launched a $1.25 million campaign to fight energy taxes, like the fuel tax added to the cost of gasoline at the pump in most countries.* One of the group’s less controversial public service announcements (or more accurately, a lobbying effort) consist of magazine ads and videos that encourage Americans to write their legislators and demand a roll back of gas taxes whenever market prices spike.
I hate consumption taxes, especially the ones that target individual commodities or categories, such as alcohol, cigarettes, luxury purchases, or any system of import tariffs. They are a form of social engineering and they bastardize free markets. But when an energy consumer nation gives consumers breaks during periods of price spikes, the result counters the social intent. In fact, each time that oil prices rise, the best thing our government can do is to force them higher still! This may sound crazy, but when the supply of a commodity is controlled a few foreign cartels, it is no longer a commodity. Artificially lowering the consumer price by subsidizing the price simply stimulates consumption. It does not expand supply, and so the subsidy goes directly into suppliers’ pockets.
Apparently, I am not the only one who thinks that lower gas prices is a bad idea. Folling the 2011 gas spike (the highest cost gas spike in U.S. history), Motley Fool columnist, Travis Hoium filed an Op-Ed entitled, 3 Reasons the US Should Want Higher Oil Prices. (At the same time, I cautioned against tax relief tied to gasoline price hikes). His analysis and opinion is articulate and adequately supported, but none of his reasons point to the fundamental economic reason that for a country that aspires to energy independence, oil should be taxed higher whenever the market cost of externally sourced oil rises. Let me spell it out…
What happens if we lower the cost of a commodity to consumers in an effort to counteract a higher supply price? It doesn’t take an Economist to analyze. Since the supply is not increased, throwing a subsidy to the buyers “fuels” an even faster rise in prices and hands all that money to the supplier.
Let’s say that C = Amount of fuel needed for critical purposes
…getting to work, heating our home, manufacturing
Let’s say that D = Amount of fuel needed for discretionary purposes
…vacation travel, backyard BBQ, mowing the lawn, etc
Of course, with a limited personal budget, high fuel prices influence a consumer’s decision to classify an activity as ‘critical’ or ‘discretionary’. Additionally, the use of fuel is greatly affected by how efficiently you perform a task (taking a train to work instead of driving, vacationing nearby instead of far away, etc).
Foreign cartels wish to maintain high prices and high revenue, so they limit the foreign supply of oil. For them, it makes more sense to charge a lot of money for less product than to charge less money for a lot of product. If we consider again our classification of consumption into two categories, Critical and Discretionary, the supplier limits leave us with only enough fuel to support this much activity:
100%C + 80%(D)
Now if we counteract their production limits and insulate consumers from the higher cost, the formula doesn’t change. We continue to use just as much fuel.
In a free market, limited supply causes prices to rise and this forces consumers to cut back on discretionary use. Some consumers with less money must cut back on critical needs. That’s because some people can afford the keep buying and of course the cost of fuel rises.
In a free market — at least on our side of the ocean, this normally leads to several things — all of them very good:
• Increase exploration and domestic production (Motley Fool covers this one)
• Develop alternative fuels, especially domestic and environmentally friendly
• Increase conservation:
• Change modalities:
If consumers are suddenly subsidized when the cost of fuel rises, something terrible happens. Instead of producing more domestic energy, we are not at all affecting the supply. We are simply handing the foreign seller more cash — directly from the taxpayer to their pockets. And they didn’t even ask for it! They raise the cost by $1 per gallon and we give them $2 extra. Heck, why not? It makes us feel good.
What happens if we increase taxes when suppliers raise prices? First, we benefit by all the good things listed above.
Second, since some foreign suppliers are not truly constrained in their production (that is, they have plenty of oil), they will keep costs low in order to sustain revenue. There are plenty of places this “cost reduction” tax can be inserted: at point-of-sale, at import, or in the distribution chain.
What do we do with the money that is raised by taxes? That’s easy too. Give it back to consumers or use it to fund the development of energy sources that are domestic, inexpensive and environmentally safe.
This is how supply and demand should work. Of course, the government can still subsidize those in need. But do it in a way that doesn’t bastardize market dynamics. As a society, we provide assistance to the consumers who cannot afford energy for critical needs, and not by handing money to the supplier (effectively, a reward for cutting production). In this way, we reduce consumption, increase domestic production and provide direct assistance to those who are less fortunate. The effect of subsidizing some buyers will force some other buyers to reduce discretionary use. For example, if some of the higher cost went to taxes, it could be used to help ease the consumers who can no longer afford the “critical” fraction of their use.
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* Americans are taxed for automotive fuel at the pump: A federal tax of 18.4¢ plus a state tax that varies between 12~35¢. The average state tax is about 23¢/gal, so the typical American pays about 41½¢ tax on each gallon, or approximately 10%.
Philip Raymond is Co-Chair of The Cryptocurrency Standards Association and CEO of Vanquish Labs.
An earlier draft of this article was published in his Blog.
“[T]he United States needs a more systematic way to help its bottled-up new-science innovators deliver their ideas to the world.”
Cryptocurrency aficionados have been discussing Bitcoin limitations ever since the blockchain buzz hit the street. Geeks toss around ideas for clearing transactions faster, resisting potential attacks, rewarding miners after the last coin is mined, and supporting anonymity (or the opposite—if you lean toward the 
dark side). There are many areas in which Bitcoin could be improved, or made more conducive to one camp or another.
Distinguished Penn State professor, John Carroll, believes that Bitcoin may eventually be marginalized due to its early arrival. He believes that its limitations will eventually be overcome by newer “altcoins”, presumably with improved mechanisms.
So, does progress in any of these areas threaten the reigning champ? It’s unlikely…
More than any other individual, Andreas Antonopoulos is the face of Bitcoin. We discussed this very issue in the outer lobby of the MIT Bitcoin Expo at which he was keynote speaker (March 2015). Then, we discussed it again, when I hosted his presentation at The Bitcoin Event in New York (also in March). He clearly and succinctly explained to me why it is unlikely that an altcoin will replace Bitcoin as the dominant—and eventually surviving—cryptocurrency…
It is not simply that Bitcoin was first or derived from Satoshi’s original paper, although this clearly established precedent, propelled it into the media, and ignited a grassroots industry. More importantly, Bitcoin is unlikely to be surpassed by an altcoin because:
Bitcoin has achieved a two-sided network effect, just like Acrobat PDF. Unseating an entrenched two-sided network requires disruptive technology and implementation with clear benefits. But in the case of a widely distributed, trusted and universally adopted tool (such as a public-use monetary instrument), a contender must be open source. The Cryptocurrency Standards Association, The Bitcoin Foundation and the leading wallet vendors have always been open and eager to incorporate the best open source ideas into Bitcoin.
Even if Bitcoin were replaced by an altcoin or by “Bitcoin 2.0”, it is likely that the public would only migrate to the enhanced coin if it were tied to the original equity corpus of earned and mined coins from the Bitcoin era. That is, we all know that Satoshi may have thousands of original Bitcoins, but few among us would tolerate (a) losing all of our Bitcoin value, and (b) rewarding a blockchain wannabe who declares that his coins are worth more than the grassroots legacy of vested millions that came before.
Consider Prof Carroll’s analogy: “Who will use an acoustic string telephone when he could access a mobile phone.” A more accurate analogy is the evolution of the 32 year old AMPS phone network (the first widely deployed cell phone network). In 1983, the original phones were analogue and limited to 400 channels. Like their non-cellular predecessors, user equipment was bulky. Phones were divided into bulky components in the trunk, under the seat and a corded handset. They lacked GPS, LTE and many signaling features that we now take for granted. Yet carriers, equipment manufacturers and users were never forced to throw away equipment and start over. The network grew, adopted, and yielded incentives for incremental user-equipment upgrade.
With all due respect to the distinguished Penn State professor, John Carroll, I stand with Andreas. Bitcoin need’t relinquish the throne. It is evolving!
Philip Raymond is Co-Chair of The Cryptocurrency Standards Association and CEO of Vanquish Labs.
This is his first article for Lifeboat Foundation