Friday, September 28, 2012

Song of the Week(end)

There's not a whole lot of good music around these days (yeah, I'm a bitter old man now and I embrace it, so what?), so this weekend I'm taking it back to the old school with a couple of former #1 hits.

The #1 song from 10 years ago, when I was just starting my senior year of college? "Dilemma", by Nelly with Kelly Rowland, in the post-Destiny's Child days. Is it awesome? No, but it's certainly a whole lot better than Maroon 5.

 (Side note: this song was replaced at #1 the next week by Kelly Clarkson's American Idol song, "A Moment Like This". Yes, that was the first ever American Idol. Yes, the one with Brian Dunkleman. Yes, I'm getting old. Thanks for pointing that out.)

And if you want to take things back 20 years, to 1992? Then you're talking about Boyz II Men, with "End of the Road", which was #1 for 13 whole weeks. Middle school dances just wouldn't have been the same without it. God bless R&B ballads.

Have a good weekend out there, people. Go USA.

The next generation of America: a portrait

If you're curious about the next generation of Americans—and what our country's got in store for it—do yourself a favor and read this little New York Times article regarding the steady decline in importance of college campus bars. It just may be the greatest (and most complete) portrait of the next generation that I've seen, for better or worse.

Via Kid Dynamite's World, as teased by me yesterday on Twitter (all emphasis mine):
To anyone who has ever been to college, it doesn’t seem like much of a problem: how to lure students to bars, the earlier in the evening the better. 
But bar owners in the Collegetown neighborhood of Ithaca recently convened a worried summit about just this topic. Once upon a time, in the Pleistocene epoch before cellphones and social media, students used bars as meeting places, heading there after class to find friends and to plot evenings over beer. 
These days text messaging, Facebook and Foursquare make it possible to see if a bar is worth the trip (translation: who is there) without leaving the dorm. Meanwhile, location-based mobile apps like Grindr, which point to the nearest available candidates looking for sex or not-quite-sex, are helping dethrone college bars from their place as meat markets. 
Students have spent so many hours pregaming (as in, getting as cost-efficiently drunk as possible, usually on hard liquor at a private party) that there is little need to waste money even on cut-price drinks, and they often don’t arrive at the bars until midnight or so, before the bars in Ithaca close at 1 a.m. ... 
Pregames often are single sex, with men playing beer pong or video games, and women drinking vodka sodas or a peach-flavored Champagne called André and refusing to head out until they have captured the perfect photo, which they promptly post to Instagram and Facebook. 
“You could have this really amazing night, but if you didn’t get a picture, it’s like it didn’t happen,” said Ms. Parr, 22, a senior at Gettysburg, whose friends often order designer outfits from the Rent the Runway Web site because incessant documenting makes wearing anything more than twice taboo. “It’s crazy how much pictures consume our lives. Everyone knows how to pose and how to hold your arm and which way is most flattering, and everyone wants the picture taken with their phone.” 
That preamble tends to delay arrival time at bars, another factor in their decline. At Cornell, three Collegetown bars have closed in the last year, including the 71-year-old Royal Palm Tavern, a storied dive where students convened at “Palms o’clock,” meaning in time for one last drink. 
“These kids today won’t pay even $2 for a drink,” said the former owner, Lenny Leonardo, as he cruised down a highway in Florida, where he retired in August. “They buy a bottle of Southern Comfort and show up in time to try to get laid. But they just end up throwing up in my men’s room, and I get reprimanded because it looks like I’m the one who let them get this drunk.”... 
This article seriously has it all. The upcoming generation is resourceful, creative, frugal, but also incredibly narcissistic, exhibitionist, with maybe just a little bit of nihilism sprinkled in (you know, not that there's anything wrong with that).

These kids are absolutely amazing at cutting through the crap and getting what they need without wasting an ounce more time, energy, or money than is absolutely necessary. Generally speaking, that's a positive thing. At the same time, everything is always on display, and therefore nothing that happens actually matters unless and until everybody else knows about it. By itself, that's neither good nor bad—it just sort of is what it is.

Social media has created a bizarre keeping-up-with-the-Joneses dynamic for the internet age, where everything happens at hyper speed and is instantly spread throughout the world—if a drunk pukes in a bar and nobody tweets about it, did they ever really puke?

But here's the article's pièce de résistance:
“Students want to get drunker faster and cheaper,” said Jason Sidle, general manager of Rulloff’s Restaurant and Bar in Collegetown. In its last decade, the Royal Palm Tavern sold about twice as much hard liquor as it had in the previous one, Mr. Leonardo said. 
Mike McLaughlin, 21, a senior at Cornell, said, “I drink liquor because it takes too long to drink beer.” On the drinks menu at Rulloff’s, “Bitch Fuel” (vodka, gin, rum, peach schnapps and lemon-lime soda) is a popular recent addition, but Mr. Sidle has also required all his bartenders to download mixologist apps to their phones. “We get all these requests for weird drinks we’ve never heard of because they’ve seen someone drinking it on Facebook,” he said.
Takes too long to drink beer, huh? I guess that's not so far different from my own college-era mentality, truth be told. But hey, if you're really having a problem with not getting drunk fast enough, you could just hop on down to Home Depot and pick up some rubber tubing and... you know what... just... nevermind.

In many ways, there's something very familiar about this next generation—just about every American generation has defined itself by its resourcefulness and inventiveness, and that's absolutely present here—it just happens to all be draped in a cloak of social media showiness that can often be hard to get past. Either way, for better or for worse, these are the trends and dynamics that are likely to define the future of America. It may not be exactly what I grew up knowing, but it's also not that far different at its core. Should be an interesting next couple of decades, don't you think?

[New York Times]
(h/t Kid Dynamite)

Clip of the Week

Time for the weekend, and another quick flurry of posts before we head out the door (or stay in to watch the Ryder Cup). First up is the Clip of the Week, where we've got a few decent contenders.

As election season wears on, and my phone rings a million times a day because I'm in a swing state, I got a kick out of this Simpsons clip (nice satirical summary of the Presidential choices) and this Stephen Colbert clip on Romney's struggling poll numbers.

As far as animal videos go, this was the only thing I saw this week worth sharing, but it's a doozy. And then Jimmy Fallon did another one of those things he loves doing, which is honestly about the only thing he's good at.

Then there's sports, where we had this absolutely ridiculous catch by the Pirates' Travis Snider, which probably should've won your Clip of the Week. But we'll hold off on the baseball until October, and for now we'll give this week's honor to the (now defunct) replacement refs, via this fantastic montage of some of their best work.

Nice knowing you guys. Enjoy life back on the high school football fields. And now the rest of us can get back to doing what we normally do—complaining about the usual refs and pretending that we care about concussions.

Wednesday, September 26, 2012

On intellectual inconsistency

In yesterday's Quote of the Week, I presented a line from actor Craig T. Nelson that displayed a stunning lack of self-awareness, a trend that's seemingly everywhere in our country these days. I had previously discussed this dynamic in a post on "blind spots", which hold the potential to swing elections (and the political and economic future of our nation).

In that post—which focused on a graphic that revealed that a significant percentage of recipients of government welfare programs did not consider themselves to be government beneficiaries—I wrote:
To fully appreciate the importance of these blind spots, I think it's useful to attempt to put these numbers into context. Using just the final line item, "Food Stamps"—which I think is a fairly clear and unambiguous example of a "government social program"—we see that 25.4% of food stamp (pardon me, SNAP) recipients do not consider themselves to have benefited from a government program. This is certain to impact the way they view national issues in federal (especially Presidential) elections, especially when debt and deficits are as large a story as they have currently become. 
Recall next that in several states, food stamp usage covers close to (or more than) 20% of the total population (nationwide, food stamp usage rates are at 14%). If a full 25% of people in these states do not think that they benefit from our "big government", that leaves us with 5% of that state's population—easily a big enough group to decide just about any Presidential election—believing something that is patently false.
Simply put, how can we expect voters to make intelligent and informed decisions about their political leaders when they have such blatant and vicious blind spots obscuring their view of the world (and their role in it)?

Perhaps unsurprisingly, this issue has been coming up quite a bit lately, most recently in Wisconsin, where Governor Scott Walker found himself in a bit of a weird spot with respect to the NFL's disastrous replacement referees.
Nothing brings political enemies together in Wisconsin like the Green Bay Packers. 
Following a controversial game-ending call by replacement referees that cost Green Bay a win over the Seattle Seahawks on Monday Night Football, Wisconsin officials from across the political divide united behind the Packers. 
Even Gov. Scott Walker and a Democratic state senator who were bitter opponents in the 2011 battle over Wisconsin public workers' collective bargaining rights found themselves on the same side Tuesday. 
Walker, whose union-busting efforts have made him the darling of fiscal conservatives, posted a message on Twitter calling for the return of the NFL's locked-out unionized officials. 
"After catching a few hours of sleep, the #Packers game is still just as painful. #Returntherealrefs," Walker tweeted early Tuesday... 
Walker's spokesman, Cullen Werwie, tried to spin the governor's post on Tuesday, saying it wasn't meant as a pro-union political statement. Walker's tweet was being widely mocked on Twitter in light of his push last year that effectively ended collective bargaining for teachers, nurses and most other public workers. His proposal didn't affect private sector unions. 
"I don't think this anything to do with unions, but has everything to do with refs making bad calls," Werwie said.
To be fair to Walker, there's an important difference between the role and operation of public-sector unions as opposed to private-sector unions, a difference that even FDR recognized and appreciated. Nevertheless, the more we dig into this issue, the more inconsistent Walker's analysis seems to be.

According to Sports Illustrated's Peter King, there are some fairly significant parallels between this case and the Wisconsin (or Chicago, take your pick) teachers' case:
One of the emerging and major reasons why a deal has been so elusive... is that the NFL is insisting on getting some control of the officials back that it has ceded in past negotiations with the NFLRA. This includes the league's desire to have three seven-man officiating crews in reserve with the ability to replace—either for a game or longer—underperforming current officials. 
Another source with knowledge of the locked-out officials' position said Tuesday that the NFL would not guarantee that they would work at least 15 games in a regular season. Currently, other than due to injury, an official that starts a season works the full season. The officials source said that this is the main crux of what the NFL is trying to do in these negotiations: wrest back control of the officials' performance week to week in an NFL season. I've been told that the NFL is insisting on being able to make in-season changes to crews based solely on performance of individual officials... 
There's also still the matter of the league trying to roll back the officials' pension. Over the last five years, the league has contributed, on average, about $5.3 million per year to the officials' pension plan. The league, in keeping with the current cost-cutting practice of corporations across America, no longer wants to guarantee how much each official would get in retirement, but rather tie the contributions to a 401(k)-type pension.
The ability to fire underperforming workers? Questions over the funding (and fundability) of workers' pensions? You know, this situation is starting to sound pretty familiar, which of course makes Gov. Walker's support of the referees in this situation that much more ironic.

But then, intellectual inconsistency and self-justifying behavior has become the norm in this country, especially since the financial crisis of 2008-09. As I wrote in this blog post last summer,
In the housing crisis, there were some who blamed the borrowers (i.e. homeowners) for irresponsibly using debt to live beyond their means, but the vast majority felt that the real story of the crisis was one of overly greedy and predatory bankers taking advantage of borrowers, originating loans that were destined to fail. This "blame the lenders" dynamic ultimately became the "winning" narrative in the aftermath of the crisis, hence the incredible vitriol directed at banks today. 
In today's [global sovereign debt] crisis, though, that's far from the case. Instead, we direct our ire primarily at the irresponsible borrowers, blaming the nations in question (rather than the enabling lenders) for their predicament. Instead of blaming China for consistently purchasing our national debt time and time again over the past few decades, we blame our own government for its irresponsibility (which is probably fair, just noticeably different from how we viewed the housing crisis). 
After watching the strange theater of the forced "austerity measures" in Greece this week, I tried to imagine the proper analogy in the housing crisis. What if, instead of foreclosing on a home, banks and mortgage companies came to an individual's house and demanded that they cancel their phone service, cut down on their food intake, and sell their cars in the name of "austerity" and improving the chance that they repaid their mortgage? That sounds completely ridiculous, right? And yet, that's exactly what we're seeing here. 
Ultimately, I think that the differing responses to otherwise similar stories derives from our pre-existing notions of who is the more sympathetic party, rather than the facts of the matter. In the housing crisis, it was far easier (and incredibly satisfying) to blame the big, evil banking institutions than it would have been to accept the blame ourselves, as homeowners. 
In the sovereign debt case, it is far easier to blame one or two basket-case governments (especially when it is so fashionable right now to blame governments—in this case, THEY are the big, evil corporation relative to the smaller banks) than it would be to place the blame on the lenders, who span everyone from the European Central Bank to nearly every American who places money in a money market fund
It's hard to trust ourselves when we try to analyze complex situations like these, simply because our reactions are so utterly inconsistent with regard to the actual facts of the case. We all approach situations in life with inherent, trained biases, and it's exceptionally difficult to get past these and assess problems at face value.
We all like to view the world as a universe full of simple narratives, with clear villains and heroes and obvious lines of culpability when things go wrong. But the truth is always somewhere in between—both heroes and villains share some of the blame, and sometimes the heroes in one situation are in fact the villains in another. Because this doesn't fit well with the way that we like to view the world, we instead end up with bizarre and contradictory approaches to what are in fact similar situations, based simply on the role in which we place ourselves.

As a nation, if we are ever going to be able to engage in an open and honest conversation about the issues that plague our country's political and economic systems, we must first start by appreciating our own biases and blind spots, and approach these complex situations from a more detached (and less emotional) standpoint. If we can't do this, then we'll be forever destined to make poor and inconsistent decisions, and we'll all end up in an awkward spot, just like Gov. Walker.

But hey, breaking news, looks like the NFL's "real" referees are on their way back to work, after all. That's great news.... isn't it?

[Sports Illustrated 1]
[Sports Illustrated 2]

Tuesday, September 25, 2012

Quote of the Week

This week's Quote of the Week is going to be a bit of a cheat, in that it's really a Clip of the Week. I'm not going to do any setup of this quote (short of posting up this blog post, which is particularly apt), except to say that this is actor Craig T. Nelson, it's three years old, and yet I just saw it for the first time and think it's terrific.

I'll be referring back to this Quote in a blog post that I intend to write tomorrow, but for now, enjoy the awesomeness.


"We are a capitalistic society. Okay, I go into business, I don't make it, I go bankrupt. They're not gonna bail me out. I've been on food stamps and welfare, did anybody help me out? No." 
                                             - Craig T. Nelson

Simply stunning ignorance. Amazing work.

Our food supply issues grow

I hadn't blogged about our food supply here in a long time, but then I came across two articles in one day that gently reminded me that I was overdue for an update. I've previously blogged here (and here) about the dangerous (and creepy) nature of genetically modified (GMO) foods, and the evidence continues to pile up in favor of my argument.

From Yves Smith of the Naked Capitalism blog, citing a study from the Committee for Research & Independent Information on Genetic Engineering (CRIIGEN):
For the first time, the health impact of a GMO and a widely used pesticide have been comprehensively assessed in a long term animal feeding trial of greater duration and with more detailed analyses than any previous studies, by environmental and food agencies, governments, industries or researchers institutes. 
The two tested products are in very common use : (i) a transgenic maize made tolerant to Roundup, the characteristic shared by over 80% of food and animal feed GMOs, and (ii) Roundup itself, the most widely used herbicide on the planet. The regulatory approval process requires these products to be tested on rats as a surrogate for humans. 
The new research took the form of a two year feeding trial on 200 rats, monitored for outcomes against more than 100 parameters. The doses were consistent with typical dietary/ environmental exposure... 
The results... included increased and more rapid mortality, coupled with hormonal non linear and sex related effects. Females developed significant and numerous mammary tumours, pituitary and kidney problems. Males died mostly from severe hepatorenal chronic deficiencies...
The implications are extremely serious. They demonstrate the toxicity, both of a GMO with the most widely spread transgenic character and of the most widely used herbicide, even when ingested at extremely low levels, (corresponding to those found in surface or tap water). In addition, these results call into question the adequacy of the current regulatory process, used throughout the world by agencies involved in the assessment of health, food and chemicals, and industries seeking commercialisation of products.
As Yves and the study's authors point out, what sets this research apart from previous studies is the duration of the testing. While regulatory analyses of these products last only 3 months, this particular study lasted two years, a significant portion of the rats' lives. This study therefore sheds more light on the long-term effects of these products, which is frankly significantly more relevant from a public health standpoint.

At issue here is Monsanto's GMO corn, an herbicide-resistant product (Monsanto also sells the herbicide in question, Roundup) that is in a distressing number of the products that we buy regularly—one estimate pegs the percentage at 70%, largely because GMO corn is the primary ingredient in high-fructose corn syrup, which is in basically everything in the supermarket these days. Think you're doing your best to avoid GMO corn in the supermarket? So did I, until I read this blog post, which scared the crap out of me.

Finally, since I promised that I'd read two articles that made me want to revisit this topic, here's the second.
If it were a novel, people would criticize the plot for being too far-fetched – thriving colonies disappear overnight without leaving a trace, the bodies of the victims are never found. Only in this case, it’s not fiction: It’s what’s happening to fully a third of commercial beehives, over a million colonies every year. Seemingly healthy communities fly off never to return. The queen bee and mother of the hive is abandoned to starve and die. 
Thousands of scientific sleuths have been on this case for the last 15 years trying to determine why our honey bees are disappearing in such alarming numbers. “This is the biggest general threat to our food supply,” according to Kevin Hackett, the national program leader for the U.S. Department of Agriculture’s bee and pollination program. 
Until recently, the evidence was inconclusive on the cause of the mysterious “colony collapse disorder” (CCD) that threatens the future of beekeeping worldwide. But three new studies point an accusing finger at a culprit that many have suspected all along, a class of pesticides known as neonicotinoids
In the U.S. alone, these pesticides, produced primarily by the German chemical giant Bayer and known as “neonics” for short, coat a massive 142 million acres of corn, wheat, soy and cotton seeds. They are also a common ingredient in home gardening products. 
Research published last month in the prestigious journal Science shows that neonics are absorbed by the plants’ vascular system and contaminate the pollen and nectar that bees encounter on their rounds. They are a nerve poison that disorient their insect victims and appear to damage the homing ability of bees, which may help to account for their mysterious failure to make it back to the hive.
Perfect. Am I the only one creeped out by the fact that we regularly eat chemicals that disorient and kill bees? If it's toxic to bees, then it's toxic to us as well, even if it doesn't immediately kill us or send us wandering aimlessly off the grid in search of our homes. No, we just die decades later from mysterious cancers that we can't seem to cure, never knowing what the hell happened to us or why.

Just because there isn't a short-term problem doesn't mean there it isn't a long-term problem (hey, sounds a lot like our debt situation, doesn't it?), and I'm increasingly convinced that's what's going on with our nation's food supply.

Yes, in the short term it seems like these foods are just the same as the foods that we grew 20 years ago—they look the same, nobody's dropping dead from them, we don't show any visible ill effects in the first few years, so we all assume that everything is hunky-dory. But is that really the case? Increasingly, science is answering "no" to that question, and I think we all need to stand up and take notice. Our food supply is inexorably deteriorating in quality, and it may already be too late to reverse the damage.

[Naked Capitalism]

Clip of [Last] Week

Alright, we're back at it here after a couple-day unplanned hiatus from the blog (I had family in town, so I ranted and raved to them in person instead of on the blog... so be it). I've got at least 3 blog posts coming your way this afternoon, starting with last week's Clip of the Week, which never got posted.

As you all know by now, I harbor some pretty negative feelings toward Apple and their iPhone—I think they've transitioned from being an ingenious and admirable company to being an evil genius company, and there's an important difference between the two. Given that backdrop, I got a huge kick out of these two iPhone-related clips, the first from Jimmy Kimmel (awesome) and the second courtesy of Barry Ritholtz (also awesome, in a different way).

It was also another week in which sports were played, so we got this and this from the college football ranks and this goal from a one-legged soccer player.

If you're familiar with the work of the rapper DMX... just... watch this, I guess. And if you want to see a fun visualization of what contagion looks like (and how stable systems can quickly become very unstable), watch this little experiment.

But this week's spot is reserved for the recognition of Steve Sabol, the President of NFL Films, who died last week after a long illness. NFL Films was a huge part of my childhood, back when VHS tapes were a thing and YouTube (and the internet) hadn't yet been invented. I had tons of NFL Films videos at home, and I would watch the same ones over and over again. They were that good. Frankly, Steve Sabol's work is a big reason that the NFL is so popular today, and of course the league is now throwing up all over itself in the wake of Steve's death. Solid work, Commissioner.

At any rate, I love sports, I love NFL Films, and I love profanity, so this clip here is the perfect way to honor Steve Sabol's memory. R.I.P.

Wednesday, September 19, 2012

On patents and innovation

I'm often tempted to write a post about patent law and its ambiguous-at-best impact on innovation, but for some reason I never actually do it. In part, I think that's because I assume I've already covered it on the blog, but in searching through my history it seems like I haven't (maybe here, and here, kinda sorta, but those are sort of different points).

At any rate, in the wake of the overly broad and frankly pretty ridiculous court ruling that went in Apple's favor against Samsung in the companies' ongoing patent war, I thought this was a useful time to broach that topic once and for all. To set the table for this argument, I'll first share with you a nice little chart from Alex Tabarrok over at the Marginal Revolution blog.

In layman's terms, Tabarrok's chart argues that while some level of patent protection is necessary in order to protect intellectual property and encourage experimentation and innovation in the business realm, there comes a tipping point at which overly strong (or overly specific) patent protections become counter-productive.

At that point (which we have now passed), large companies begin to use their vast legal resources to patent everything under the sun (read this piece for an example of how it goes down), even those things which are not yet commercially viable and which they have no intention of bringing to market. They do this simply to protect their dominant market position, preventing smaller competitors from threatening their near-monopolies.

Apple, for one, has become particularly aggressive in its manipulation of patent law, literally attempting to patent every aspect of every product that it manufactures, in an obvious attempt to prevent competitors from entering into any market in which Apple operates. That's ironic, given Apple and Steve Jobs' well-known, unapologetic history of being an imitator and/or thief of other companies' intellectual property—but Apple doesn't care much about irony or intellectual consistency, just piles of money.

Regardless of the details of the cases discussed in that last link, Apple and Microsoft are indisputably stronger companies today because of the competition between the two of them (oh, and Xerox, don't forget about Xerox). Now, Apple is trying to stifle just that kind of competition in the present day, and so far courts are falling for it.

That may not last for long, though, if U.S. Circuit Judge Richard Posner (whom I've written about here and here) has anything to say about it. In this ruling and others, Posner has consistently referred to a "dysfunctional patent system" in this country, one that has run amok and now operates contrary to the public interest (that last remark is a direct rebuke of the primary justification of patent law in the first place). Will Posner be able to do anything about it? In the short run, it's doubtful, but I certainly hold out hope.

In the long run, our economy's only hope for rescuing itself from its current malaise is not via money printing or trade sanctions against China (so please, guys, seriously, stop trying that dumb shit), but through innovation—real, honest, serious innovation, the kind that makes us all legitimately more productive and prosperous. Our country has been great for the last century not because it has protected its largest corporations' market positions, but because it has allowed and enabled start-ups to thrive without smacking down their creations on dubious patent grounds.

So let's hope our country's future is determined a little bit more by Richard Posner and a little bit less by Apple—no matter how much you like your new iPhones, believe me, you shouldn't be rooting for Apple, at least not anymore. I know I'm not.

[Marginal Revolution]

Tuesday, September 18, 2012

Gas stations vs. department stores

I thought this chart here from the Illusion of Prosperity blog was pretty telling, and I think it says just about everything you need to know about what Fed policy has done for and to our economy over the last decade-plus (obviously the internet has a role to play here as well, but that dynamic alone cannot and does not account for a tripling of the ratio in a dozen years). Regardless of the reasons behind the spike in this chart, it's clear that inflationary monetary policy is powerless to restore lost retail jobs, but certainly ensures that we all spend more and more of our paychecks at the pump and the grocery store.

Pretty awesome, right? Hooray, Bernanke!

And hey, while we're at it, let's share another semi-terrifying chart from the same blogger.

Good times. Sooner or later, nobody will have any home equity at all, and then we'll all be living on Easy Street. Which will be good, because gas will be so expensive that we won't be able to afford to drive to any other streets. I can't wait.

Quote of the Week

If you're like me (or like this guy), you got plenty sick of seeing Bob Costas' face on NBC during the Olympic coverage this summer. Be that as it may, Costas was on with Conan last week, and he took some pretty funny shots at NBC, endearing himself to some of the viewers and redeeming himself at least a little bit in the process. He's still a smug, smarmy, takes-himself-way-too-seriously little troll, but at least he seems willing to acknowledge that fact at times.

Either way, I got a kick out of his appearance on Conan, and he gets this week's honor for his ironic sense of humor.


"I'm sure you'd be the first to attest, Conan, that when it comes to the tough calls, NBC usually gets them right."
                               - Bob Costas

Watch the video below to see the context. Good stuff.

Monday, September 17, 2012

Breaking down cities

NPR's Robert Krulwich had a really cool post up the other day, featuring the work of French artist Armelle Caron. Caron's project was to take overhead maps of cities (and their blocks), then to rearrange and categorize the chunks of land that were carved out by the roads and avenues in that city.

New York, then, starts like this:

And ends up like this:

Pretty boring, really, but that's not at all surprising to anyone who's been to New York and is familiar with its cookie-cutter grid system.

There are some more interesting ones over in Europe, in cities that have been around longer and therefore are a little less centrally-planned.

This here is Paris (also surprisingly boring):

And this is Berlin:

And this little jigsaw puzzle of insanity is Istanbul:

As Krulwich pointed out, I can't imagine what it's like to walk around that city. What would your hometown look like?


Friday, September 14, 2012

Song of the Week(end)

It's been a fun week around here, hasn't it? Well, now it's time for the weekend, which means it's time for some tunes, and instead of going with that country music again, it's time to take it back to the old school with some awesome '90s rap.

So even though I promised my co-worker that I'd give consideration to this fantastic parody song, I have no choice but to roll with this awesome mash-up of A Tribe Called Quest and Pharcyde, two of my favorite rap acts of all time. Given my good friend's musical leanings, I'm sure he'll forgive me my trespasses.

Have a good weekend, people. Don't do anything I wouldn't do out there. 

Bernanke's Terror Alert Scale

Since I'm such a frequent critic of Federal Reserve policy, I'm pretty sure there's no way I can let yesterday's "aggressive", "unprecedented", "open-ended" announcement of what amounts to permanent quantitative easing ("QE") go by without comment. Indeed, I won't.

There's about a million different angles from which I could attack this latest policy announcement (it's desperate, it's ill-timed, it's dangerous, it fans the flames of inflation at a time when the economy can ill afford it, it jacks up the Fed's balance sheet leverage to astonishing and terrifying levels, it makes me wonder just how freaking bad things are out there if the Fed feels like this is a "reasonable" step, and it therefore isn't exactly confidence-inspiring), but I'm not even going to bother with any of those approaches. Instead, I'm actually going to celebrate (yes, you heard me), because this means that the end of the era of Fed-manipulated markets is now imminent. The Fed fired its last meaningful bullet yesterday, and now the endgame is at hand. Let me explain what I mean.

In the immediate aftermath of 9/11, the newly-created Department of Homeland Security unveiled its "Homeland Security Advisory System" (better known to most as the "terror alert level" or "terror alert scale"), a color-coded, semi-ambiguous chart indicating just how scared we all should be of a terrorist attack at any given moment. The intent of the program was in large part to impact the psychology of citizens, making them more vigilant and aware of their surroundings when times warranted.
Unfortunately, the terror alert scale was an utter failure. Since the level was essentially always set to either "yellow" or "orange", nobody ever really paid any attention to it. It simply became a part of the background noise, consistently ignored because of its ubiquity. People are able to remain vigilant and aware only for short periods of time—when they're asked to do so for years at a time, they simply become complacent. Not surprisingly, the terror alert scale was eventually retired, presumably still set to "orange".

The Fed's latest QE program similarly attempts to impact the psychology of the American citizens—if consumers and investors know that the Fed is committed to always printing money, they'll be more likely to step out on the risk scale and start spending and investing money (while it's still worth something) rather than waiting around until tomorrow. It theoretically creates a certain sense of urgency that the Fed has been laughably unable to instill up until now.

Unfortunately, perma-QE is likely to fail in the same manner that the DHS terror alert scale ultimately failed. Sure, QE-∞ will cause a Pavlovian short-term rally in the markets, just like the terror alert scale caused us all to be super-vigilant at airports for about 3 months. But sooner or later, this perma-QE will just fade into the background like the "orange alert" that we all ritualistically ignored after a while.

The simple fact is, "QE always" is "QE never", just like anything else that was once rare but then became ubiquitous (like, say, a college education). Once a new baseline expectation has been set and adjusted to, this "easing" simply becomes part of the landscape, and it will become increasingly difficult—if not impossible—for the Fed to effect incremental change. In all areas of life, ubiquity brings along with it an ironically increased invisibility—call it the paradox of ubiquity. Ubiquity breeds irrelevance, for Fed policy just like anything else.

To date, previous QE programs have been effective because they have been sudden, strong, and powerful—like a quick shot of cold air on a hot summer day. But once we've turned the AC on full blast and left it there for months at a time, does anybody even notice it anymore? Or do they only notice when it's taken away? I'd argue the latter, which means that the days of the Fed influencing the market with incremental policy proposals are largely in the past.

So as I said to lead off this rant, the Fed has now fired its last meaningful bullet (some intrepid journalists in fact called it a bazooka), and it sure as hell better work and work quickly. Because if it doesn't, they're going to have to do something far beyond drastic to ever have any impact on the economy (or markets) again, now that they've made permanent QE the baseline.

At some point in the not-too-distant future, the market will experience another correction, and the economy will tilt into another recession. The question is, what will the Fed do then, and will it have any impact whatsoever? The Bernanke Terror Alert Scale is now definitively set to "red"—to have any future effect, Bernanke will have to invent a new color, and I for one don't think that's possible.

So congratulations, Chairman. You've seemingly pulled off the impossible and printed yourself into irrelevance. Enjoy these next few weeks or months of Fed-fueled market rallies while you can—I'm betting this may be the last time you'll ever see them.

Clip of the Week

Time for this week's Clip of the Week, brought to you once again by NASA.

Yes, that means I'm passing up on some good football highlights from NFL Week 1, notably from Robert Griffin III and David Akers. I'm also passing on a delightfully deceptive defensive play from the Baltimore Orioles' Manny Machado, yet another head-scratching play in the Orioles' bizarre sleight-of-hand season.

I'm also passing up on some seriously excellent animal-related videos, including this one about how birds' communication patterns mimic those of humans (and how Beethoven used birds as his muse), this one that features a daredevil family of ducks, and this cat just chillin'.

Other random stuff includes this amazing "Obama campaign video" from the Daily Show and Larry David (it's the second video on that page, but the first one is excellent too), this cool underwater wonderworld, and The Roots' ?uestlove killing it on the pots and pans.

But NASA has been churning out some eye-opening stuff lately, and I'd be remiss if I didn't pass this one along. According to NOAA, this year through August has seen the most extreme climate (coldest winter months, hottest summer months, longest droughts, most soaking rains) of any year in U.S. history. That's terrifying, even if you're a right-wing whacko who thinks that global warming is a hoax cooked up by scientists in a basement for God knows what reason.

Alright, good talk. Enjoy your Clip of the Week. It's... something.

Thursday, September 13, 2012

"System D" and taxation

I came across an interesting blog post over at Naked Capitalism this week, talking about the virtues of the so-called "Système Débrouiller" (or System D), which has become the shorthand name for the world's underground economy. Citing a TED talk from journalist Robert Neuwirth, Lambert Strether writes:
If [System D] were united in a single political system, one country, call it The United Street Sellers Republic, the USSR, or Bazarristan, it would be worth 10 trillion dollars every year, and that would make it it the second largest economy in the world after the United States.
At first glance, that's an eye-opening statistic, one that immediately makes us think of black markets and tax cheats and wink-and-a-nod cash transactions in parking lots or back alleys (and to be fair, that's in large part what Neuwirth is talking about there).

But I think that's the wrong image to evoke, and I'll instead refer back to a post of mine from earlier this year that discusses another piece of the puzzle (I was going to write a whole new blog post about this issue, but then I realized I'd already done a pretty good job of laying out the basic points, so I'm self-plagiarizing for the sake of reiteration and redundancy). The bolded emphasis is new, added by me today.
Ultimately, the strength of a state depends entirely on its ability to collect taxes from its citizens. One could argue that the United States is relatively strong in this regard (its "Black Economy" is nowhere near the levels of Italy and Greece), but it still does not collect nearly enough tax to pay its annual bills. If it in fact tried to raise its tax rates in order to close that gap—as Italy is now trying to do, in effect—it might find that the "Black Economy" would grow significantly as a result. 
Those who argue that raising tax rates would harm economic growth are therefore certainly correct, although perhaps not in the way they might imagine. Instead of actually decreasing the overall amount of economic activity, a higher tax rate might just lead to a decrease in the amount of "official" economic activity, as more and more transactions went off the record. It's quite possible (if not probable) that's what happened in Italy over the last decade, which would help explain the nation's pitiful "official" economic statistics
If citizens (of any nation) begin to feel that their tax burden is too high—or that their government is misusing their tax dollars—they will always find ways to avoid paying their tax bill. Sometimes this will be through outright misrepresentation and fraud, but often it will be much more subtle and therefore much harder to prove. If a mechanic fixes a friend's car for free, with the understanding that his doctor friend will return the favor in the future by dispensing free medical care, the level of "economic activity" (in terms of favors exchanged) is the same whether or not cash actually changes hands. But in one case, the government can collect taxes on the transactions, and in the other case, the government cannot (at least not easily). 
The choice to do these transactions "on the record" or "off the record" depends entirely on the mechanic and the doctor's respective faith in their government, and whether they feel that their leaders are operating in good faith with respect to taxation. Unfortunately, once that good faith bond has been broken, it can be incredibly difficult to restore, as Italy and Greece are now learning. As the U.S. tries to solve its own deficit and debt problems, it too will end up facing a similar dilemma—how can it extract more money from its citizens without pushing more economic activity down into the underground, beyond its reach? 
The strength of the state, ultimately, is only as good as the citizens' belief in that state and its leaders. Break that bond, and the state can suffer even as many of its citizens continue to thrive—at least in the short run. But in the long run, both the state and its citizens suffer together, and that's where Italy and Greece now find themselves.
"System D", at least originally, referred not to a "black market" economy as we've come to know it, but simply to what might more correctly be termed the "MacGyver economy" or the do-it-yourself economy.

If we as citizens want to avoid adding dollars to the official GDP statistics (and therefore creating taxable moments), one way to do so is to be more resourceful and do a lot more things for ourselves (or with help from our friends). If we all grow our own foods and cook them and eat them at home, there's nothing there that will ever be captured by a government GDP statistic—and yet, we've all got ourselves a full belly, same as if we went to the grocery store and loaded up a cart with fruits and veggies.

The simple fact is, the government can only measure and tax transactions for which there is some record, or where some sort of exchange (of currency) was made. What can the government do about an informal exchange of favors?

Have you ever helped a friend move? Have you ever called up your doctor friend and asked him what he thinks about your aching knees and hacking cough? Have you ever invited a friend over for drinks and asked her for some free off-the-record financial advice? All of these things have economic value, and yet they'll never be part of the formal, measured, taxable economy—none of these are taxable moments, and it's nearly impossible for the government to track the transactions down, with no record of their occurrence.

But ultimately, is there really any fundamental difference? Is our nation really any more prosperous in one case versus the more formal alternative? I'd say no, and that in fact the system in which we trust each other and exchange favors without a record may even be stronger than the alternative—a community (however small) that trusts each other implicitly and doesn't require the keeping of records is a strong community indeed.

Ultimately, this is all an issue of trust. if you think your neighbor is unlikely to hold up his end of the bargain, you'll force all of these transactions onto the record in order to protect yourself. But if you instead think it's the GOVERNMENT that's unlikely to operate in good faith, well that's a whole different issue, isn't it?

Over the next several decades, I think this dynamic will be an important one not just in Europe but throughout the world. Do we trust each other as citizens more than we trust the government, or vice versa? If it's the former, then I wouldn't expect tax revenues to be picking up any time soon, regardless of the actual level of economic activity being performed. Should be interesting to watch.

[Naked Capitalism]

Quote of the Week (I love Canada edition)

Couple of blog posts coming your way today, starting with your Quote of the Week, which will be a little lighter for a change. I gave some serious consideration to this eye-opening quote from Vladimir Putin, extolling the virtues of group sex (seriously, can you imagine Obama dropping a bomb like that on the campaign trail?), but nahhhh.

Instead, I'm going to keep things a little closer to home, heading up to America's hat. From Quebec...


"Someone (possibly wearing super villain gear, although that’s pure speculation on my part until they’re apprehended) broke through security at the Global Strategic Maple Syrup Reserve in Quebec and made off with $30 million worth of Canada’s sweetest export."
                                         - Brad Moon, Wired
Whoa, whoa, whoa... Canada has a Strategic Maple Syrup Reserve? That... is... AWESOME.

Here in the good old U.S. of A., we maintain a Strategic Petroleum Reserve, to be tapped during times of supply disruptions or other emergencies (like, you know, a Presidential election... side note, amazing that the link there doesn't mention Fed policy at all when discussing the impacts on crude oil prices... savvy). At any rate, a petroleum reserve is one thing, given the outsized impact that fuel prices tend to have on our economy. But up in Canada, it's apparently maple syrup that's the prized commodity. Terrific.

This news item plays into all of the awesome stereotypes that I already want to have about Canada, so I'm not going to bother to do any further research into this matter. Canada is an awesome land of flapjacks and maple syrup and flannel shirts and lumberjacks and hockey and all of those things combined into something called "lumberjack hockey", and that's how I'm going to leave it. I love you, Canada.


Monday, September 10, 2012

Statistical significance vs. significance

Alright, it's time to start plowing through some of my unfinished drafts here, in no particular order. I've been sitting on this one for a while, and it follows in the theme of this post and this post, both of which discussed the questionable validity of study results. From the Freakonomics blog... 
A new paper by psychologists E.J. Masicampo and David Lalande finds that an uncanny number of psychology findings just barely qualify as statistically significant.  From the abstract:
We examined a large subset of papers from three highly regarded journals. Distributions of p were found to be similar across the different journals. Moreover, p values were much more common immediately below .05 than would be expected based on the number of p values occurring in other ranges. This prevalence of p values just below the arbitrary criterion for significance was observed in all three journals.
Alright, yeah, I know that's a little stat-wonky/jargony, but the basic point is that a large number of clinical trials that report "significant" results are in fact barely scraping by on the statistical validity scale.

In any statistical study, the "goal" is to show a result that is too extreme to have occurred simply by random chance. A "p-value" of .05 means that there is only a 5% chance that the study result could have occurred simply by chance—low, but not impossible. What we're seeing here is that a large number of "statistically significant" studies are scraping by in this little margin-of-error window just on the "right" side of that 5%. Hence, there's a pretty decent chance that at least some of those studies are reporting something as significant that is actually dumb luck or chance—indeed, probably about one out of every twenty is reporting a significant result when none in fact exists.

Now, I don't really want to go too far down a road talking about bell curves and standard deviations on normal distributions, so I won't. But the point of the matter is, the incentives to report a "statistically significant" result are typically pretty strong, and so we should take a lot of the study results that we read (you know, stuff like "Coffee causes cancer! Also, it prevents cancer and cures cancer, but only when taken in specific doses at pre-determined times over several decades! So drink coffee, and also, don't drink coffee!) with an enormous grain of salt.

A lot of the time, the stuff we're reading is just a reporting of statistical noise and random chance, with a catchy headline attached. So please, people, don't fall prey to the people who want to confuse us with numbers—they're seriously everywhere these days, especially in an election year. Know the statistical background, and you'll be better able to determine for yourself whether a study result is actually significant, or just statistically significant.


Friday, September 7, 2012

Song of the Week(end)

I've been having a little fun with the Cowboy lately because of his apparent and recent obsession with country music. I didn't realize Chicago was south of the Mason-Dixon line, but hey who am I to judge? I guess he's just growing into that "Cowboy" moniker, slowly but surely. Good for him.

Hey, speaking of the South, this time of year down in Virginia, it's football season, it's starting to cool off a bit, jeans and hoodies start to make their way out of the closet, and country music just sorta starts to feel... right. Not all country music, mind you... stuff like this is still hokey and terrible, no matter where you're living and what season it is. But I can handle a little Jason Aldean every now and again, so that's your Song of the Week(end).

Have a good weekend, all you Northern aggressors out there...

This about sums it up

So, this morning's jobs report was, once again, pretty terrible. No worries! Markets are higher because now everybody's convinced that the Fed is, once again, riding to the "rescue". We've been here before.

(Inspired by this)

Thursday, September 6, 2012

Clip of the Week (NASA edition)

With all my posting this week, I still can't seem to make a dent in my backlog of unfinished drafts. So be it, some day I'll catch up. For now, it's Clip of the Week time.

In light of today's financial news, this realistic depiction of Ben Bernanke and Mario Draghi's policy proposals (h/t Red Cowboy) seems particularly appropriate. I also love it because animals make me smile.

I've also already mentioned that it's election season, which probably means that you can get ready to see a whole lot of Stephen Colbert and Jon Stewart clips around here in the coming weeks (I highly recommend the awesomeness of that Stewart clip, by the way... great satire, with a terrific Glengarry Glen Ross reference to boot).

In the sports world, outfielders continue to make great catches, as do wide receivers (just like last year). Also, for all you golfers out there, Charl Schwartzel's four-putt is just painful to watch. Enjoy.

But this is going to be a week for science and for recognizing NASA. I came across a couple of videos that showed some of the awesome stuff they're doing down there, even if their funding is coming under fire as we apparently shut down all government functions in order to save Social Security and Medicare. Crap, I'm ranting again, huh?

Anyway, this time-lapse image of all the ocean's currents was pretty awesome, but not nearly as awesome as this depiction of the Mars rover's journey, which is your Clip of the Week. Keep up the good work, NASA. Don't let the bastards get you down.

As for the rest of you, blow this up full screen and enjoy. Remember, America is still a pretty awesome place if we'll let it be, just not on Wall Street...

More on 3-D printing

Amid all my rants and raves and complaints around here, there's one thing that I've consistently touted as being seriously awesome, and that's 3-D printing. I think the potential for this technology is simply mind-blowing, and that it could completely revolutionize the way we think about manufacturing and manufactured products and shipping and basically anything you associate with our "modern" economy.

Like any technology, it's taken a little while for 3-D printing to emerge from its infancy and work out the kinks, but I think (hope?) we're rapidly approaching the point where this could be a viable consumer technology.
Early desktop printers were horrible. For the price of thousands of dollars one got lo-res dot matrix printouts on paper that had tractor-feed holes punched into the margins. It wasn’t pretty, but those early models paved the way for high-resolution, low-cost laser printing.
Today’s hobby grade 3-D printers are similarly crude. They all use Fused Filament Fabrication (FFF) technology and are essentially robotic hot glue guns. Fortunately, a new generation of higher-resolution, faster, and more reliable machines are starting to come to market.
This new type of hobbyist printer use Stereolithography (SLA) technology, utilizing light instead of heat to make models. How? A high powered light source hardens a cross section of light-sensitive liquid plastic. The machine then raises the build platform a smidge and the process is repeated. It’s very dramatic — models look like they are being pulled from a puddle of goo.
For those interested in seeing what this looks like in real time (okay, time-lapse), check out this video:

Are there potential issues with this technology? Yes, most definitely, and I certainly hope that the government doesn't fall all over itself to pre-emptively restrict the usage of 3-D printers. But I think that may in fact end up happening, if only because of this:
An American gunsmith has become the first person to construct and shoot a pistol partly made out of plastic, 3D-printed parts. The creator, user HaveBlue from the AR-15 forum, has reportedly fired 200 rounds with his part-plastic pistol without any sign of wear and tear. 
HaveBlue’s custom creation is a .22-caliber pistol, formed from a 3D-printed AR-15 (M16) lower receiver, and a normal, commercial upper. In other words, the main body of the gun is plastic, while the chamber — where the bullets are actually struck — is solid metal.
So, yeah, I can see where the government might step in and try to heavily regulate the usage of these printers. A world in which an individual can print himself a gun (or a grenade, or whatever else) on a whim might make it pretty difficult to regulate the things that government likes to regulate.

But that, in my opinion, would be a significant shame. I believe that this technology has significantly more upside than downside, and I think that there are reasonable ways to limit the potential negative impacts that government might fear. We'll see, but this is one of the few recent innovations that truly gets me excited for the future of our country and the world. If we have to break some eggs to make an omelette, so be it. This stuff is just way too cool.

[Extreme Tech]

Fed buying baseball cards

While the market gives its Pavlovian cheer to the latest kinda-sorta-we're-not-really-printing-money-you-guys-I-swear proposal out of Europe, I thought this would be an appropriate time to pass along my favorite cartoon from the last few months. Courtesy of Barry Ritholtz's Big Picture blog...

Seriously, when can the Fed start buying some stuff that I actually own (no, I don't own Treasury bonds or mortgage-backed securities, and I hope you don't either)? In addition to baseball cards, I've also got a pretty awesome collection of obsolete electronic devices and salvaged golf balls. Sure, you might think of these things as worthless, but I just consider them to be "distressed assets".

Mr. Bernanke, if you want to stimulate the economy, I suggest you start rummaging around in my basement. I'm quite sure you'll find something to your liking down there.

Wednesday, September 5, 2012

On middle class woes (and personal responsibility)

Hey, why not make it two posts about personal responsibility in one afternoon, right? Let's go for it.

Since it's election season, you're about to be bombarded with misleading statistics from both sides talking about how good and terrible the economic recovery of the last four years has been. The Democrats will tell you (I've seen it ad nauseam already) that Obama has presided over 29 consecutive months of job growth. True, but missing the point.

As for the Republicans, they're likely to counter with something like this:
Although the economy shed thousands of middle-wage jobs during the Great Recession, the bulk of the employment gains since then have been in low-wage arenas such as retail, food-service, and home-care industries, according to a new report released by the National Employment Law Project, a liberal research group.
Low-wage jobs, defined as those that pay no more than $13.83 an hour, accounted for 21 percent of recession job losses but have accounted for 58 percent of the recovery growth.
At the same time, middle-wage occupations (jobs with an average hourly rate between $13.84 and $21.13) accounted for 60 percent of the jobs losses, yet accounted for only 22 percent of the job growth, according to the NELP study which analyzed federal census and labor data.
Indeed, one study showed that among those workers who lost jobs between 2009 and 2011 and subsequently found new jobs (many did not), a full one-third were accepting new jobs with a 20% or greater pay cut. That's a problem, and it shows a significant weakness beneath the declining headline unemployment rate that President Obama hopes to tout this fall. Clearly, not all jobs are created equal, and the recent trade-off has been a terrible one for most Americans, despite what the headline stories would love for you to believe.

This low-quality job growth only continues a steady trend of devastation of our country's middle class, a trend that I largely blame on misguided Fed policies of dollar debasement, all of which benefit the rich at the expense of the poor. But as Mish Shedlock wisely asks, who is really to blame here?

Citing a study from the Pew Research Center, Mish posted the following graphic:

He then wrote,
Note that 62% blame politicians and 54% blame financial institutions, but only 8% blame themselves. 
Five Questions 
1. Did banks force people to take out loans they could not pay back, or did people do so voluntarily? 
2. Who elects Congress? 
3. Do people make enough effort to understand interest rates, debt, the economic policies of politicians, exponential math and its implications, the untenable nature of public union pension plans and promises? 
4. Do a significant number of people (if not the majority) get their economic views (assuming they have any economic views) from The View, Oprah, The Talk, or CNBC? 
5. Why did PEW leave off the Fed and Fractional Reserve Lending from the list of answers? 
Two Bonus Questions 
1. Would the majority of respondents know anything at all about the Fed and Fractional Reserve lending had the PEW listed those options? 
2. Who is really to blame for what is happening?
Preach on, Mish.

If you want to blame the banks or the politicians for all of your problems, fine. Go ahead. It's as good a cop-out as any. But at the end of the day, it is OUR unwillingness to pull our money out of the banks (or to stop borrowing money from them), it is OUR unwillingness to hold politicians accountable for their incompetence, it is OUR continued refusal to stand up for ourselves and take even the slightest modicum of responsibility for our own nation's destiny that is to blame for all of the negative outcomes of the last 10 to 15 years (or more).

The housing bubble and its ugly aftermath could not have existed without the greed and financial illiteracy (call it "innumeracy" if you must) of the majority of the nation's citizenry. Ditto the burgeoning debt crisis that threatens to rob a generation or more of its retirement. As I've mentioned here before, if you make yourself a target, then you're practically guaranteed to be taken advantage of sooner or later. This was all our own doing, but we've seemingly lost our ability as a nation to take responsibility for our own decisions (or refusal to make decisions, whatever).

I'm all about personal responsibility, and I always have been. Therefore, I don't blame Congress, because I haven't done anything significant in my life to change the composition or approach of our Congressmen. Congress does what it does because we haven't required them to do anything differently.

So I do blame myself, because I obviously haven't done enough to change the world in which I live. And in a sense, taking ownership of that is incredibly liberating. Are you willing to do the same?

[National Journal]