Why do Americans use so much air conditioning?

Megan McArdle explains:

Any American who has spent much time around visiting Europeans has probably had some version of this conversation: "Why do you use so much air conditioning?" they ask. "Your buildings are ridiculously cold. I have to wear a sweater inside in the summer! And it's bad for the environment. You shouldn't do that." . . .

For Europeans reading this, I may actually be able to clear up this baffling issue: Americans use air conditioning more because America is a lot hotter than Europe is. . . .

I've lived through heat waves in Northern Europe, which cause much the same hysteria that we see in Washington when two inches of snow is forecast. Because we have air conditioning, Americans do not have to panic when the mercury rises. Nor do we have incredible fatalities among the old and vulnerable when they happen. . . .

You could argue that if Americans had not migrated en masse from the temperate north to the blistering sunbelt, we would need less energy for climate control. You could argue that, but you'd be wrong. Americans still expend much more energy heating their homes than cooling them. . . . On average, the move from cold areas to warm ones has actually saved energy, not caused us to use more.

"How Did Solyndra Spend All That Money?"

Megan McArdle asks the question, and she gives some answers from a financially savvy friend of hers and also from a Solyndra insider.

McArdle concludes:

I don't think this is going to end up being a story about corruption. I think it's going to end up being a story about bad decision making: at Solyndra, among its investors, and in the Obama administration. People took large bets with low expected values, because the alternative was admitting that the money they'd already spent was gone, and not coming back. They doubled down, just like some chump who lost his stake at the Vegas blackjack tables.

This does happen in the private market, of course. The difference is, when Argonaut Ventures takes a flyer on a longshot, they're not doing so with my money. The administration was supposed to have the economic dream team. Couldn't they have spared a moment to sit down with the folks at DOE and explain the concept of sunk costs?

5 myths about Solyndra

The Washington Post punctures conventional wisdom from the left and right about the solar-power company, which went bankrupt after receiving loan guarantees from the Obama administration. (Background.)

Solyndra probed

The Wall Street Journal reports:

The political scandal over the failure of Solyndra, the politically connected solar-panel maker, just got a lot more interesting. The FBI raided the company's Fremont, California offices yesterday and executed a search warrant.

Congress has been investigating the company, which received a $535 million government loan guarantee in March 2009 and announced August 31 that it is filing for bankruptcy. Yesterday's FBI raid is the first hint of a larger government probe, which is being conducted in cooperation with the Department of Energy's Inspector General. . . .

Solyndra was once a leading light, if you will, of the Obama Administration's signature "green jobs" dreams. The Energy Department signed off on the loan guarantee under a George W. Bush-era law, and the Federal Financing Bank, a unit of the Treasury Department, also provided a loan with a 1.025% quarterly interest rate. A parade of Administration officials praised the investment, including President Obama, who said in a speech last year at the company's Fremont headquarters that "companies like Solyndra are leading the way toward a brighter and more prosperous future."

Solyndra never did turn a profit and laid off employees in November. But in February the company renegotiated its loan guarantee—with a hitch. Under the new agreement, Solyndra's investors would loan the company $75 million but be first in line on repayment in the event of bankruptcy, in front of taxpayers.

WSJ gives the Obama administration's spin:

Speaking about the bankruptcy earlier this week, White House spokesman Jay Carney said: "There are no guarantees in the business world about success and failure. That is just the way business works, and everyone recognizes that." He added that "you cannot measure the success based on one company or the other."

WSJ responds:

That is all true enough, but then most businesses don't stick taxpayers with hundreds of millions of dollars in potential losses when they fail. The problem with politically directed investment isn't merely that bureaucrats are betting with someone else's money on industries they may not understand. Such investment also invites political favoritism for the powerful few at the expense of millions of middle-class taxpayers. Americans need to know the full story of who made or influenced the decision to give Solyndra its loan guarantee, and if political pressure was brought to bear.

My mom comments on the raid:

Political connections can come back to bite you, when the politicians you were connected to need to gnaw through that connection and run like hell.

What's the most energy-efficient state in the US?

Apparently the answer is my state, New York.

You can see the info for all states in this interactive map.

(Via the Freakonomics blog. If you're interested in the full report by the Rocky Mountain Institute, here's the PDF.)

Could this be some of the fruits of "elevator environmentalism" in NYC?

Maybe that's part of it, but there seems to be a problem with how the report measures energy efficiency. They did it "by dividing each state’s G.D.P. by the kilowatt hours of electricity it consumed." As a commenter on the Freakonomics blog says:

This study assumes all kinds of weird relationships between energy and GDP that just don’t seem to be accurate. You know why New York is so high on that list? Because banking takes a lot less energy than farming does to produce money. You know why Mississippi and Kentucky are at the bottom? Because farming and coal mining are energy intensive and produce inexpensive products.

So what’s the answer then? Stop farming and make every state convert to a white collar economy? Doesn’t seem feasible to me.

Tellingly, the blog post does ask readers for feedback, but only feedback on "how to close the gap" among the different states, not suggestions for more useful ways to frame the problem or measure the gap.

In fairness, the authors of the study show up in the comments section to defend their conclusions. Do you think their defense is very convincing? They claim to control for a lot of variables. But even taking them at their word, there seems to be a deeper problem, which is that a lot of the energy-intensive activity (farming, etc.) that's done by the lower-ranked states makes it possible for, say, New Yorkers to enjoy the array of modern conveniences that make it so comfortable to live the lifestyle of, say, a reasonably affluent office worker in the Northeast. (I don't want to overstate this as if it were some kind of clear-cut dichotomy: the report ranks California, which produces enormous amounts of food among other goods, as one of the most energy-efficient states.)

In other words, the suggestion that the supposedly less efficient states should simply conform to the more efficient ones may be a nice thought -- but it's easy to wish for the world we're living in to be better. We're able to look at it first-hand, up close, and vividly see its many flaws. It's a lot harder to see how all the interconnected parts of the hulking, complicated machinery of society might be thrown out of whack if we made the proposed sweeping reforms -- even on the overly optimistic assumption that they'd be implemented brilliantly and in good faith. (By the way, for those readers who might think of me as a liberal, I'm try to invoke a conservative principle here.)

And of course,

New York being #1 in GDP/kWh just shows what you can do by fabricating earnings on Wall Street. They will not be #1 on that list for long.

Another commenter has a similar point but, I think, takes it too far:

Look at the list of the most efficient by kWh. 7 of the 10 have little in the way of "real" wealth creation industries - by which I mean either farming/extraction or manufacturing. If you want to create real wealth that doesn’t involve repackaging money or ideas a dozen times, then I think a different metric is required.

I don't know how you can distinguish "real" wealth from non-"real" wealth. Why are farming and manufacturing the only things that are "real"?

Why isn't work that gets done in New York "real"?

This calls for some My Dinner with Andre, specifically Wally's rant:

I mean, is Mount Everest more "real" than New York? I mean, isn't New York "real"? I mean, you see, I think if you could become fully aware of what existed in the cigar store next door to this restaurant, I think it would just blow your brains out! I mean...I mean, isn't there just as much "reality" to be perceived in the cigar store as there is on Mount Everest? I mean, what do you think? You see, I think that not only is there nothing more real about Mount Everest, I think there's nothing that different, in a certain way. I mean, because reality is uniform, in a way....