Google turns to farming

The most cutting edge information technology meets the most ancient survival technology, as Google invests in weather-insurance, backed by meterological computing, for farmers.

Google Inc.’s venture capital arm is backing a start-up founded by ex-Googlers that insures farms and other business against the whims of Mother Nature.

Launched four years ago, WeatherBill Inc. is announcing today $42 million in Series B funding from Google Ventures, Khosla Ventures and several previous investors.

Founded by two ex-Googlers–Chief Executive David Friedberg, who worked on Google’s corporate development team and Google AdWords, and Chief Technology Officer Siraj Khaliq, who worked on Google Booksearch and other technical projects–WeatherBill aggregates large amounts of weather data from the National Weather Service and other sources and applies statistical analyses to run large-scale simulations that assess the probability of weather occurring several years in advance anywhere on the globe, the company said.

According to Friedberg, more than 90% of crop losses are due to unexpected weather, and these losses are exacerbated by the increasing number of extreme weather events caused by climate change. Friedberg cited recent droughts in Russia and China and flooding in Australia, while one of WeatherBill’s customers–Steve Wolters, a farmer who grows corn, soybean and wheat in Celina, Ohio–cited a very dry growing season in Ohio nine years ago followed by a year in which 14 inches of rain fell in 10 days.

“The flip flop of weather from one year to the next is the biggest challenge farmers face,” Wolters said in a statement.

WeatherBill’s flagship product, called Total Weather Insurance, acts as a subsidy to government-subsidized crop insurance by enabling farmers to hedge their risk on crops. Farmers can create contracts that lock in profits based on their locations and how much damage they could incur from rain, drought, heat, cold or snow. WeatherBill pays automatically based on measured weather conditions within 10 days of when a policy ends. . . .

“Agriculture is an unusual area for venture capital, but we submit that agricultural technology has the same potential as biotechnology had in pharmaceuticals or chips had in telecommunications,” Khosla said on Monday.

Google Ventures, meanwhile, is attracted to WeatherBill by “the power of massively parallel computing infrastructure, which was not possible even 10 years ago,” said Managing Partner Bill Maris. “We understand the problem and are looking forward to deploying resources to help them solve it. We have a cloud looking for big problems to solve.”

via Google Ventures, Khosla Make Rain For WeatherBill – Venture Capital Dispatch – WSJ.

Here is the website for the company, should you want to insure some crops: Weatherbill.

HT:  Rich Shipe.

When the government is unionized

So the largest trade union in the country these days is that of government workers.  Does that strike you as odd?  George Will, in the context of a column on what’s going on in Wisconsin, notes some paradoxes:

Such unions are government organized as an interest group to lobby itself to do what it always wants to do anyway – grow. These unions use dues extracted from members to elect their members’ employers. And governments, not disciplined by the need to make a profit, extract government employees’ salaries from taxpayers. Government sits on both sides of the table in cozy “negotiations” with unions. . . .

Walker’s calm comportment in this crisis is reminiscent of President Reagan’s during his 1981 stand against the illegal strike by air traffic controllers, and Margaret Thatcher’s in the 1984 showdown with the miners’ union over whether unions or Parliament would govern Britain. Walker, by a fiscal seriousness contrasting with Obama’s lack thereof, and Obama, by inciting defenders of the indefensible, have made three things clear:

First, the Democratic Party is the party of government, not only because of its extravagant sense of government’s competence and proper scope, but also because the party’s base is government employees. Second, government employees have an increasingly adversarial relationship with the governed. Third, Obama’s “move to the center” is fictitious.

via George F. Will – Out of Wisconsin, a lesson in leadership for Obama.

Egypt in Wisconsin

25,000 protesters are in the streets in Madison and 40% of Wisconsin teachers have called in sick, forcing cancellation of schools, as  new Republican governor Scott Walker is getting pushback for his proposal to limit collective bargaining by unions for public employees and to cut back on the cost of their benefits.

Walker’s plan would allow collective bargaining for wages only and force state workers to pay 5.8% of their salaries for pensions, up from 0.2%, and 12.6% for health insurance, up from  4% – 6% percent.

And now, to prevent a vote on the measure, the Democrats in the state legislature have boarded a bus and left the state, preventing a quorum so that the bill cannot be voted on!

Meanwhile Ohio is also threatening to cut back expensive benefits for state employees, and other states facing huge budget problems are wanting to do the same.

See State Democrats absent for vote as Wisconsin budget protests swell – CNN.com.

I’m very curious about what your average Wisconsinite–as I was a few years ago–things of all of this.

Updates

The rest of the story on recent posts. . . .

The computer named Watson ended up wiping the floor with the human used-to-be champions on Jeopardy. The human race is evidently doomed. So if Watson is smarter than people, should we elect him president? What does this mean?

The Patriot Act, which gives the government expanded wiretapping and surveillance powers in fighting terrorism, is being extended, for three to ten months, depending on how the Senate Bill and the House Bill are reconciled. But both houses voted for extension. Earlier, as we discussed, some Tea Party Republicans led by Rand Paul joined with liberal democrats to stop the bill. But that was for a special fast-track approval that required a supermajority vote. The House subsequently passed the bill under the normal majority-vote process.

The Borders bookstore chain has filed for bankruptcy.

Real money for virtual Smurfberries

It’s a classic parental scenario:  the kid gets the parents’ credit card and buys stuff with it.  But today, the “stuff” exists only in virtual world.  Parents are up in arms about kiddy game iPhone apps that cost them real money:

Over the winter break from school, 8-year-old Madison worked to dress up her simple mushroom home on the iPhone game Smurfs’ Village. In doing so, she also amassed a $1,400 bill from Apple.

The Rockville second-grader didn’t realize the Smurfberries she was buying on the popular game by Capcom Interactive were real purchases, much like buying a pair of shoes from Zappos or movie tickets from Fandango. After all, lots of children’s games require virtual payments of pretend coins, treasure chests and gold to advance to levels.

But like a growing number of parents, Madison’s mom, Stephanie Kay, was shocked to find very real charges from iTunes show up in her e-mail box days later.

“I thought the app preyed on children,” she said. “Note that the Smurf app states it is for ages 4-plus.”

The games are part of a category of applications on Apple’s iTunes store that are free to download but let companies charge users for products and services when the application is launched. Following Apple, Google this week introduced these so-called “in-app purchases” for Android mobile phones and tablets, which experts say could create a new economy for newspapers, record labels and movie studios that have been struggling with ways to thrive online.

The in-app purchases have also catapulted children’s games such as Smurfs’ Village and Tap Zoo, by San Francisco-based Pocket Gems, into the ranks of the highest-grossing apps on iPods, iPhones and iPads.

But the practice is troubling parents and public interest groups, who say $99 for a wagon of Smurfberries or $19 for a bucket of snowflakes doesn’t have any business in a children’s game. Though a password is needed to make a purchase, critics say that the safeguards aren’t strong enough and that there are loopholes.

via In-app purchases in iPad, iPhone, iPod kids’ games touch off parental firestorm.

The article gives more horror stories.  But it raises in my mind a host of questions.

First of all, an eight-year-old has an iPhone?  And the apps are designed for children as young as four, and they have iPhones?

And a wagon of Smurfberries costs $99 and a bucket of snowflakes costs $19?  Where do those show up on the consumer price index?  Is the demand for those commodities so high that it is bidding up the cost?  Is there any way we could give parents relief by working on the supply side, say,  by manufacturing more of them?  Are Smurfberries generated by a program in China?

Is there an economics model that accounts for the pricing of commodities that do not actually exist?

Law of diminishing returns

We spend more on health care than ever before, but we are less healthy.  We spend more on education than ever, but our children are poorly educated.  And in all the ups and downs of the economy of the last decades, we are about where we were in the 1970s.  Also, the internet has had far less impact on productivity and economic growth than we think.  Our economy is plagued by the law of diminishing returns.  So says economist Tyler Cowen, as discussed by Steven Perlstein:

Cowen’s thesis is that the period of 3 percent annual growth in incomes that stretched back to the 19th century ended in the middle of the 1970s as the pace of innovation slowed. Before the slowdown, he argues, industrial economies realized rapid income and productivity gains by picking the “low-hanging fruit” offered by the industrial revolution’s key innovations. While we like to think the Internet, the iPhone and microsurgery have dramatically altered the way we live, those changes pale in comparison to the impact on living standards from the introduction of electricity, motor cars and penicillin. Cowen’s claim is that the industrial world has hit a growth plateau as innovation confronts one of the most enduring principles in economics: the iron law of diminishing returns.

As you might imagine, a spirited debate is underway on economics blogs about Cowen’s view that the Internet may not really be the productivity bonanza that was once predicted. So far, he notes, the Internet has generated far less income and far fewer jobs than earlier innovations – think of the automobile – and the benefits it has yielded have been confined largely to the upper end of the income scale.

For me, however, the more intriguing argument in “The Great Stagnation” is that much of our recent growth may, in fact, have been a mirage. It is no coincidence, he writes, that during the recent decades of slow growth in incomes and productivity, three of the fastest-growing sectors of the economy have been education, financial services and health care. And while government statistics show productivity in those sectors growing at the same pace as the rest of the economy, other data suggest otherwise.

Although the United States spends at least twice as much on health care, per person, as other industrial countries do, Americans do not live any longer and often have measurably worse health.

Although spending on education has doubled in recent decades, average scores on standardized math and reading tests have remained about the same.

And what does the average American have to show for all that innovation and job growth in financial services over the past 20 years? A series of booms and busts that has left stock prices roughly where they began.

For Cowen, the central economic reality of the past three decades is that median household incomes have barely budged, even after adjusting for inflation and other factors. And his hypothesis is that too much money and talent and effort have gone into sectors where real productivity gains are hard to find. Once Americans became rich enough to satisfy ourselves with the basic necessities of life, it was only natural that we would decide to spend our additional income – our marginal dollars – on health care, education and financial services. We now discover, however, that each of those marginal dollars has generated less than a dollar of real value.

via Steven Pearlstein – Much of nation’s recent growth may have been a mirage.

Does he have a point?


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