“Can the U.S. economy be doing all that well if ‘Kidney’ is a common autofill?”

Two things can be true: the economy is getting better and things are incredibly hard for some people. The social safety net has holes in it large enough for entire families to fall through.

An article from Forbes' staffer Maggie McGrath about non-traditional measures of economic well-being includes this sobering statistic.

Data from Google’s search autofill — which updates the most likely completion of often-searched-for phrases, like “near me” or “that deliver” for the phrase “pizza places” — supports the food stamp data and the hunch that Americans are still feeling the ill effects of the recession. ConvergEx found that the phrase “I want to sell” autofills with “my car,” “my house,” and most concerning, “my kidney.” The word kidney has cracked the top three autofill results every quarter since the fourth quarter of 2013.

“Can the U.S. economy be doing all that well if ‘Kidney’ is a common autofill?” Colas asks.

Sitting Still in a Plane Moving 400+ miles per Hour - Why People Are Unimpressed with Economic Progress

Evolutionary scientist Richard Dawkins argues that there was no first human. The reason? The change in any given generation was so imperceptible that what appears dramatic over millions of years seemed to fall within the range of normal variation. There was no baby born to early primates that looked more like modern man. The change was very slow and might have passed undetected by anyone generation in spite of the dramatic difference between early mammals and modern man. There are less dramatic examples in every day life. The hour hand on your watch moves, Dawkins says, but you won't see it. You will be old, eventually, but there is no one morning when you wake up old. One of the biggest obstacles to understanding evolution is that we can't even conceive of millions of years of time, much less how much change can play out within that huge window of time.

On a related note, studies have shown that many people can't really appreciate the impact of compound interest. If you put $10,000 into the account of your newborn grandchild and made 10% a year on that investment, by 50 that grandchild would have one million dollars. If you didn't give them the money until they retired at 67, they'd have $6 million. If you made them wait until 100 (assuming great gains in longevity), they'd have $137 million. The way that compound interest begins to escalate is hard to conceive, but of course it makes a dramatic difference in lifestyles for capitalist countries that make progress each year, even if that progress doesn't seem particularly dramatic at the time. 

And that might be one reason why people are so unimpressed with economic progress. At any given instant - any year or sometimes even decade - the progress we make may not seem impressive. Even if we're making the right moves, today doesn't seem any different from yesterday. 

We (rightfully) project the long-term impact of carbon emissions and what that will mean for global temps. That is sort of mind-boggling because it shows us the long-term impact of incremental change. But if incomes raise as much in the 21st century as they did in the last, median household income (adjusted for inflation) will be about $300,000, a projection as valid even if less bandied about.

Sold The Horse and Bought a Car - Tijuana to San Diego Wait Times Plummet from 2 to 3 Hrs to 10 to 20 minutes

This is huge news. It could affect San Diego and Tijuana's economies in ways that only bio-tech and Maquiladoras have.

From my house to Mexico is about 10 miles but the return trip would take 2 to 3 hours just last month. In that same time, I could be in Los Angeles, 130 miles away.

Now, times have been cut from hours to minutes. A two-hour wait might now be 20 minutes. Or less.

That's like the difference between going into town on a horse or driving. It will be a huge boon to the region, increasing the flow of traffic in both directions.

Kansas' Brownback About To Lose His Job As Governor Because He's Bad at Algebra

Governor Sam Brownback of Kansas enacted a sweeping tax cut for the state. He slashed taxes for everyone, reducing middle class tax rates from 6.25% to 4.9%. To his shock and dismay, the $700 million surplus he inherited is now projected to fall to a $238 million deficit. This has caused some backlash and apparently he's now trailing in polls.

Governor Sam Brownback

Arthur Laffer

Kansas paid Arthur Laffer, of Laffer curve fame, $75,000 to come into the state and sell the tax cut. Laffer believes that people who have to pay tax on money have less incentive to make money. In his mind, the good people of Kansas would all go make considerably more money if only they didn't have to give so much of it back in taxes. Why bother to make an extra $1,000 if you just have to pay the state $62.50 of it?

Laffer's curve is laughable for a number of reasons but the most obvious is the simple algebra it depends on.

Assume Kansas has GDP of $100 billion. (And that's not far off. The state's GDP is about $117 billion according to Google.) With a tax rate of 6.25%, that gives the state income tax revenue of $6.25 billion.

Now, cut the tax rate to 4.9%. In order to maintain tax revenues at $6.25 billion, total GDP would have to raise to $127.5 billion. In other words, it would have to grow by 27% to offset this tax cut. To put that in perspective, the US economy will probably grow about 2.5 to 4% this year. China's economy will grow about 7 to 8%,  Europe's closer to 0%. 27% would be an absolutely stunning, unprecedented rate of growth. Even during a full, four-year term. And all triggered by the magic of dropping marginal tax rates from 6.25% to 4.9%, a tax cut that (Laffer would argue) would finally give people the incentive to get rich.

If Brownback knew algebra, he could have quickly calculated the growth rate he'd need to balance the budget with his new tax rate. Sadly for the state, that level of math competency was apparently not needed to qualify for the governor's job.


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I suspect that Brownback will win re-election but a couple of interesting articles suggesting he might not can be found here.
Mother Jones, Patrick Caldwell, "What's the Matter With Sam Brownback?"
The New Republic, John B. Judis, "This is What's the Matter With Kansas"

Using Charter Schools as Tools for Progress by Letting Them Patent New Approaches

Pedro Noguera writes a great piece in The Nation about charter schools titled, "Why Don't We Have Real Data on Charter Schools? Charters were supposed to be laboratories for innovation. Instead, they are stunningly opaque." 

He makes a variety of important points but one statistic he mentions almost in passing is to me the defining one: 

"According to a 2013 study by the Center for Research on Educational Outcomes at Stanford University, only 29 percent of charter schools outperformed public schools with similar students in math, while 31 percent performed worse. Most charter schools, in fact, obtained results that were no better than traditional public schools."

Let's round this instead of using 29% or 31%. Essentially, what this Stanford study revealed is that 33% - one-third - of charter schools did better than public schools, one-third did worse and one-third did the same. Depending on just how you measure it, this exact same claim could be made of public schools themselves: about a third are noticeably better than average, about a third are worse and about a third are average - give or take. In other words, charters schools - on average - are no better and no different than public schools. 

Noguera reminds us that charter schools were supposed to be a way for specific schools to be free of traditional regulations in order to allow experimentation. What they have become instead is a means to compete with public schools without real transparency or accountability. 

I have an idea for making education more innovative, for giving incentive to every teacher and educational entrepreneur to make education better. Let organizations and individuals patent new ideas. Let them get a monopoly profit on the good idea of - say - using business startups in high school as a means to fund extracurricular activities for kids while teaching them about business, marketing, product development, using art for ads, math for balance sheets and profit and loss, etc. You might patent this as an organization ("The Wanna-be Jobs School of Business") or as an individual inside of  a public school. If other schools adopt your curriculum, they pay you. And for 7 years you might make millions on the spread of your idea. After that, your patent expires and every school anywhere can use the materials or approach for free. Education gets better and there is money available to incentive people to develop new materials, methods, and philosophies. 

As it now stands, there is no incentive for any charter school to share anything that would actually make other schools better. That would simply mean giving away their competitive advantage, which is nuts. Instead, give them incentive to develop approaches that would benefit everyone.

In the 1620s, Edward Coke (pronounced Cook) led the creation of patent law, essentially granting monopoly rights for a short-period before making knowledge of new technology public. This gave people incentive to invest time and money into inventions that previously only gentlemen of leisure might dabble with. By 1699, England had its first steam engine and during the next century the Industrial Revolution was underway. 

If the US is serious about promoting education, maybe the right model isn't letting private schools compete by using methods that appear to be - on average - no different from those of the average public school. Maybe the right model is letting any individual or organization patent educational approaches that every school would find enticing to adopt.

GDP Grew 4.6% in 2nd Quarter (Politicians and Media, Committed to Bad News, Look the Other Way)

The final estimate is that the GDP grew by 4.6% in the 2nd Quarter of this year, according to today's report from the Department of Commerce.

Consumer spending on durable goods (things like cars and refrigerators) and business investment were up 14.1% and 9.7%. Consumers spending more on purchases that could be deferred demonstrates that they are feeling more confident about the economy, as does businesses spending more to invest in the future.

It's not just the best quarter since 2011. It matches the best quarter since before 2007.

But you won't hear much about it. Not on the news, not from politicians. It is in no one's interest to present positive news. A reporter on Bloomberg said, "There's no reason to look at GDP growth today." Other news outlets, apparently agreeing, simply failed to mention it in their top of the hour reports.

The Obama administration is still pushing for programs that would create more jobs and raise median income. To say that things are going great makes it harder to argue for those programs.

The Republicans move blithely from one irrelevant and bone-headed argument to the next, whether it's invading the Middle East or paying for two wars with a tax cut or screaming about how huge deficits during the Great Recession are going to blow up the economy or how Obamacare is going to create huge deficits and blow up the economy.They repeatedly show themselves completely tone deaf on policy and - sadly - in tune on politics, managing to win the attention of media and voters without ever actually being right about anything of substance.

Liberals think it's awful that the GDP is growing because corporate profits are going up and it is only the rich who are getting richer. So for them, the economy actually sucks and numbers to the contrary are misleading. Misery still exists and they'll focus on it. Liberals fail to see the humor in Woody Allen's quip, "I can't enjoy a meal as long as I know that someone, somewhere is starving."

Conservatives think it's awful that the GDP is growing because it suggests that Obama's and the Fed's policies might actually be sensible rather than disastrous. Today's most influential conservatives are ideologues who think that pragmatism is the worst kind of betrayal and wouldn't admit that government policies could have any positive impact even if the fastest growing economy of the last quarter century was communist.

The media think it's best to ignore mention that the GDP is growing robustly because it undercuts an incredibly lucrative narrative that brings up ratings. Whether they're trying to get ratings from liberals outraged at how only the 1% are benefiting from this recovery or from conservatives who are clinging tightly to their belief that the world is getting worse and has been since Adam and Eve's expulsion from the garden, and that any proof to the contrary is either fabricated or fleeting. Bad news is good news for news outlets. People stay tuned for news about hurricanes, not 70 degree weather.

It's an odd time. Never has technology and business innovation offered more potential and yet rarely have people been so gloomy about the future. If a huge swath of us get wiped out by Ebola, we'll look back chagrined at what petty things we whined about. If - as I think - we'll hit an inflection point that makes us more prosperous and privileged than any previous generation has dreamed about, then we'll look back chagrined at how incredibly pessimistic we were at the dawn of this change. In either case, the committed pessimism strikes me as absurd and increasingly takes a commitment to denial that hopefully fewer and fewer people will be able to muster.

Pittsburgh Pirates Get Into Playoffs for One-Third of What It Cost the Dodgers

A 3-bedroom home in Los Angeles costs $695,000. In Pittsburgh, a 3-bedroom home costs only $143,000. Given players can get a place for their family for less, the Pirates don't have to pay as much. It's not something GMs think about but apparently it can make a big difference in payroll costs.

Because living expenses are lower in Pittsburgh, the Pirates were able to make it into the playoffs at a cost per victory of less than a million dollars. By contrast, the Dodgers had to pay about $2.3 million per win.

Here is the ranking of price paid for victory for the teams that have (so far) qualified for the playoffs.

A couple of notes.
The number to the left of the name indicates the ranking - out of 30 teams - for total payroll.
This is the payroll they started the season with. It might be different now.
As of today - 24 September 2014 - there are still more teams that will join this list. None will get in for as little as the Pirates.

Politics is the New Religion

Vox reports that there's been a stunning rise in the number of people who say they'd be displeased if their child married someone of the opposite party.

Nearly half of Republicans would be upset at having to include a Democrat around the table at Thanksgiving. (Of course if you want to avoid that, it's probably best not to reproduce.) Even a third of the more tolerant Democrats are likely to be unhappy about such cross-ideological breeding.





Meanwhile, Pew reports on marriage (a record number of Americans have never been married), showing that similar ideas about how to raise a child and having a steady job are more important than shared moral and religious beliefs. Religion is less important to the average unmarried man or woman when finding a spouse than politics is to the average Republican when it comes to finding a daughter or son-in-law.

Politics might be the new religion. For Republicans, in any case, a litmus test of belief in the workings of the invisible hand of the market seem nearly as important as faith in the invisible workings of more traditional spirits.

Why the Rise in New Home Sales Promises Years More of Recovery

New home sales were up 33% between August 2013 and 2014. That's good news for a host of reasons, not the least of which is that the housing market has been the slowest sector to recover after the Great Recession.

Better yet, there is still plenty of room to improve, as you can see in this graph from the St. Louis Fed.

One thing of note is that even at an annual rate of 504,000, August home sales are not that high. The average since 1963 is closer to 600,000 and since 1963 the US population is not just 75% higher but the size of the average household has dropped.

The good news is that home sales are recovering. The better news is that while the housing market is recovering, it is still far-off from over-heated. Next Friday, this recovery measured by uninterrupted months of job creation will have reached the record for post-1939 data. And if the pattern of housing sales suggests that this recovery still has a couple more years left in it.

Alibaba at a Quarter of a Trillion? Bargain or Bubble?

After its first day of trading, Alibaba was valued at $231 billion. Here is how it compares to some notable American companies.

	Market Cap ($B)	Relative to ALIBABA
Apple	604.54	2.6
Exxon	414.19	1.8
Google	403.18	1.7
Microsoft	391.56	1.7
JnJ	304.56	1.3
GE	263.79	1.1
Wal-Mart	247.62	1.1
Chevron	236.99	1.0
Alibaba	231.44	1.0
P&G	228.72	1.0
IBM	193.53	0.8
AT&T	183.95	0.8
GM	54.46	0.2
Yahoo	40.71	0.2

IBM's Watson has learned to play chess better than any other person. It's now learning how to diagnosis illness. That, it seems to me, has some potential. Oh, and IBM has lead the world in the number of patents for years now so Watson is by no means it's only play. And Alibaba is worth twenty percent more than IBM? Either IBM is under-valued or Alibaba is overvalued.

Heidegger Said ...

How Willpower Defines a Life

Willpower is like time: you have only so much and you have to selectively use it. How you choose to use willpower may do more to define you than how you choose to use your time.

The people in the room confronted a plate of warm, chocolate chip cookies and a plate of radishes. One group was told to avoid the cookies. Everyone was later given math problems. It turns out, the folks who used willpower to not eat cookies stopped doing math much sooner than the folks who had not yet tapped their reserve of willpower.

Willpower is used to control thoughts, emotions, impulses, and performance. What you use for one you don't have for another.

Let's say that you need to learn a new programming language or scientific theory. Applying yourself to learn that drains willpower. It takes sustained effort and you can drill new vocabulary or run thought simulations about a world in which space is curved for only so long before you feel an irresistible urge to break away to watch cat videos or eat chocolate. You've temporarily exhausted your supply of willpower, using it in this instance to control your thoughts, derailing them from their normal route.

Or perhaps your girlfriend's little brother is staying with you "for just a few weeks - until he gets his feet back under him." You were never a big fan of this potential brother-in-law even when his visits were limited to an evening or weekend. Now he's been in your space for two months and counting. In order not to blow up at him and possibly alienate your girlfriend, you have been controlling your emotions. Sort of. As it turns out, emotions aren't something you directly control; if you are sad, you can't just tell yourself not to be. Willpower in this instance gets used up to direct your thoughts into more pleasant scenarios. Or you focus on not telling him off. In either case, it can leave you feeling exhausted.

Impulse control is what we often think about when we describe someone's lack of willpower, the ability to "resist temptations like alcohol, tobacco, Cinnabons, and cocktail waitresses."

Finally, you deplete your willpower to focus on performance. Are you creating a presentation for a new client? Do you have to analyze data from two different tests? The focus on such tasks leaves you with less willpower to control your thoughts, impulses, or emotions. You're more likely to snap in irritation or reach for that second piece of chocolate when you're pushing yourself to complete such demanding tasks.

There are ways to leverage the willpower you do have (having a habit like rolling out of bed to run 2 miles every morning depletes willpower less than starting such a habit), but for the most part, you define yourself by how you use your limited sum of willpower. 

Life of an undergrad

If you are an undergrad, using willpower for performance control (that 5-page paper is due in two days and even before you start it you have to finish the reading) and thought control (those steps for calculating an integral still elude you and you've come back to the homework three times now), you have less available for impulse control ("grab a pizza for the fourth night in a row? You bet!" "Have unprotected sex? Yes!"). 

Working in a very structured environment

If your workplace has rigidly defined process steps that require focus on adhering to certain steps, you'll have less willpower left over to control your thoughts, to immerse yourself in the creative process. A rock band does not have the best reputation for impulse control and the creative crowd is likely to be more tolerant of what "the suits" might think of as a lack of impulse control, indulging in alcohol, drugs, or sex. At some level, though, the difference between the suits and the creatives simply reflects a different allocation of a fixed sum of willpower.

In the end, it might be that how you choose to use willpower does more to define you than how you use time. Willpower is how we push back against all the defaults that would gladly define us, whether those defaults for behavior and thought come from our boss, our family, the media, our church, or our own biology or past. 

Willpower is like a blanket too small to cover the whole of you. You decide if it's your feet or your arms that stick out but you can't cover both. At least not at the same time. The sooner you embrace loss (you need to let go of the idea of starting your training for the triathlon) the sooner you can embrace gain (you can't start pushing yourself for triathlon training because you have decided it's more important to start that novel). It's not enough to choose to apply above average willpower on one thing; you have to decide in which other area you are going to apply less willpower. 

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The research supporting the notion that (at least within a fixed period of time) willpower is a largely fixed sum is explained in Roy F. Baumeister and John Tierney's book Willpower. It's a fabulous and important read. 

When Our Work Becomes as Quirky and Unique as We Are

Ernest Hemingway woke up early with the goal of writing 500 words. He wrote standing up and said he was "done by noon, drunk by three." He built his own boxing ring inside his home to spar with guests and friends.

Unlike Hemingway, Agatha Christie wrote when she felt like it and her favorite place to think through mysteries was sitting in the bathtub while eating apples.

Charles Dickens was an insomniac who walked for miles at night, hoping that being lost would inspire his creativity.

Maya Angelou checked into a hotel room stripped bare of paintings or other distractions to write each day. Until 2 PM, her only companions in the room were a Bible, thesaurus, a bottle of sherry, a deck of cards, and some crossword puzzles. After 2 she would head home to edit.

Truman Capote always wrote lying down.

[These - and a few other - delightfully quirky personality traits and working styles of famous authors can be found here in a post written by Ginni Chen.]

These writers were some of the most productive people in history. (Think about how many dollars in revenue have been generated by Dickens' writing alone.) And their writing styles were unorthodox, tailored to their own peculiarities and productivity rather than a social convention embodied in standard work hours and spaces, 8 to 5 and cubicles.

There was a time in history when only the rich and powerful were assured enough food or were free to express individual religious beliefs. Maybe we'll eventually progress to the point that everyone has the freedom to work in a style that expresses who they are.

Why iPay May Be Apple's Most Lucrative Product Yet

iPay may prove to be Apple's most lucrative product.

Today, Apple announced the release of two new iPhones, an iWatch, and iPay, which will work like a mobile wallet. They've teamed with various credit card companies like VISA, Mastercard and AMEX to enable iPhone users to simply pay with their phones as if their favorite device was a credit card.

On the surface that might sound fairly innocuous. They are certainly not the first to offer the ability to make a digital purchase, as reported by Molly Wood here. But it's worth remembering that Apple wasn't the first company to make a digital music player. They just made it wildly popular.

First, some background. During the 20th century, a quiet revolution transformed finance. One of the reasons it might have been so quiet is that it has the oddly eye-glazing name of banking disintermediation. But disintermediation gets to the heart of how the Information Economy transformed finance, which plays right into Apple's new market.

Once upon a time, bankers were uniquely positioned upon a wall that separated the folks saving money from those who wanted to borrow it. They could take money from the savers, paying them 1% for their money, and then loan it to the borrowers at 10% (less or more). Upon their wall, they were uniquely positioned to see each party, parties who could not see each other. Savers and borrowers didn't know each other so the banker played intermediary. This is a pretty lucrative position to be in. Still. (Last year Citigroup's revenues were $76 billion.)

But information technology has made it easier for borrowers and savers to find each other without the bank playing intermediary. As the cost of information has dropped, this wall separating borrowers and savers has slowly lowered, and with it the bankers' lofty perch. This disintermediation has a long history, one I explore in my book. The most recent instance of disintermediation is peer-to-peer lending. Lending Club, a San Francisco-based company founded in 2007, has facilitated $4 billion in loans. They are to lending what eHarmony is to romance. Why pay the banks the 9% difference between what you get for saving and she has to pay to borrow when you two can split the difference? There are billions - trillions - that can be retained within households by cutting out the bank. But of course far fewer people know and trust Lending Club than Apple.

Now Apple will get millions of people comfortable with the natural extension of what Dee Hock, VISA's founding CEO, realized years ago: money is just information. As millions of Apple users become comfortable with the idea of using their phones for purchases, it won't be long before they become comfortable using their phones - and the extensive networks they represent - for loans. People hate banks and love Apple. It's perfectly plausible that Apple's foray into finance will do to banks what their popularization of the iPod did to record companies.

And there is a lot of money to be had in finance. More, even, then in music.

Cubicle-Roots Funding for R&D (One Approach to the Popularization of Entrepreneurship)

I'm once again inside a company working with a team of technical experts who are planning the development of a fairly complex system. Already it looks like senior managers' expectations are out of line with the teams' perception. That's dangerous because senior managers invest the money.

This problem has its roots in organizational design, the allocation of power. Product development is inherently complex and there is no good way for just a few people in positions of power to fully understand what they're investing in. Employees who might blow the whistle on  a key problem that could sink the project may think twice about such honesty if the result is a cancellation of the project and them losing jobs.

Today, senior managers approve a project, agreeing to invest millions to get a new product to the point that they can sell it for profit. But product development is ripe with risk. Technology can fail to work as predicted, forcing management to scrap it. And given that a product is dependent on so many different technologies, it's worth remembering that it takes an unexpected failure in just one technology to drive serious delays, compromises or overruns. Debugging critical software can take longer than planned, resulting in a product offering that is largely obsolete by the time it is released. A key supplier can change terms, driving up costs to the point that the cost of goods sold wipes out projected profits. And, of course, the internal dynamics of the team itself can mask dysfunction until the project blows up.

You can rely on a model in which elites looking down on this complexity judge it. Or you might consider a model that actually depends on the perspective of people who live within this complexity. It's a bit like the difference between reliance on central planning and a reliance on markets.

Readers of my blog and book  know that I'm arguing for the popularization of entrepreneurship. Among other things, this means nudging - in some cases radically shifting - the role of employee to something more akin to entrepreneur. A different model for product development could illustrate what that might look like.

Imagine that rather than having senior managers make funding decisions about which products to pursue, you relied on the wisdom of the crowd. More specifically, had organizations take their lead from employees whose willingness to invest - or not - would signal the new product's potential.

Imagine that anyone in the organization - from a charismatic CEO like Steve Jobs to an introverted programmer or designer - could make presentations to the organization proposing a development project. (And yes, this very process would drive education in NPV education, market analysis, technology risk, etc. To properly support it would lead to more widespread business education for employees.)

Raise your hand above the cubicle if you like this proposal

Imagine that a portion (10%? 33%?) of every employee's 401(k) fund had to be invested in either a fixed interest annuity with low-risk and return (say, 1 or 2% above inflation) or the company's R&D projects.

Imagine further that employees would be able to investigate any potential project that individuals are proposing, able to do due diligence on this investment possibility. Given some portion of their wealth would be a function of the success of these internal projects, they could use personal relationship and company data to determine who had the right personality to lead a team and which technologies had brilliant potential and which had obvious flaws.

Imagine that whenever employees encountered a proposal they were excited about they could invest some portion of their 401(k) internal allotment, taking a stake in its future success.

Imagine that only when employee-led investments hit some critical mass that the company would match (1 to 1? 100 to 1?) employee investments and fund a new project. A business plan might come from a confident project manager who could make a part of the plan a tripling of his salary - or a significant portion of the future value of this new product. Key technical people might be able to propose similar raises or equity-sharing plans. And remember, if the employees strongly disliked any part of the plan, they could simply refuse to invest. A form of negotiation might emerge in the form of iterative proposals that would finally result in a plan that attracted investors.

Imagine that the result would be that R&D funds were more strategically allocated, based on richer and more nuanced understandings than any senior managers might have. And imagine, too, that such proposals would occasionally make certain teams or team members rich. Perhaps even give some intrapreneurs more money than the CEO.

Imagine that such mechanisms would help to popularize entrepreneurship, help to distribute income and wealth more broadly throughout the organization and - at the same time - create more total wealth and income.

Whether it would make employees the equivalent of venture capitalists or make R&D funding more like a kickstarter campaign would likely depend on the culture and specifics of the process. In either case, it would promise a less centralized, more market-driven model than what we have now. That seems to have worked for nation-states where some percentage of the citizens in a developed country are likely to make more than the chief executive. (About 6 million Americans make more than we pay Obama.)  It might be worth trying within the corporation.

If Only We Could Find the Government Fact Factory

On more than one occasion, Republican friends have simply denied the accuracy of the data that now suggests the economy is improving. Instead of arguing about it, I've decided that the simplest way to deal with this is to quickly agree and then say, "Even worse, they made up all the data about the Great Recession. Not only is the economy not recovering but it, in fact, never went into a recession. None of it even happened. It's like the moon landing."

For folks with theories about the world that they hold fondly, it is indeed as David Byrne sang: "Facts just twist the truth around."

How the August Job Numbers Could Boost Your Stock Portfolio

Economic forecasters were expecting 225,000 jobs last month but today the government reported just 142,000. If recent trends hold, you could use this news to strengthen your portfolio.

First, the consensus forecast of 225,000 was about what we'd averaged for the year. That's not much of a forecast. One can almost imagine consensus forecasters saying, "What's the average monthly gain for 2014? Let's use that for our estimate for next month."

The problem with that approach is that July and August have been the worst months for job creation during this recovery. During the months of summer, job creation averages about two-thirds of what it is during the rest of the year. If you really thought that the average of 225,000 was going to hold for the year, you would adjust that downwards by about a third for August to arrive at a number more like 153,000 - which isn't far off from the 142,000 reported. (And Paul Davidson in US Today reports that the numbers for August have been routinely adjusted upwards in the months after.)

A little dip in August seems more aligned with seasonal trends than an indicator that the recovery has changed. But the appearance of a dip might trigger a weaker market, particularly once September numbers come in.

September has also been weak for job gains, averaging 70-some percent of annual totals. When those numbers get reported next month, people are liable to make it mean that the economy is weakening. One weak month they can brush off but two looks like the start of something bad. It could be one of those ugly Octobers when the market falls. If that happens, wait for panic to set in and then buy those stocks you wished you owned a couple of months ago. A little panic lowers prices.

But if trends hold, October job gains - which won't be reported until November 7 - are likely to turn things around. October has run about 30% higher than the average month, meaning that it could be roughly double what we see for August and September. Also, positive job gains through October would break the all-time record for consecutive months of job gains. Shocked at this sign of dramatic improvement, panic will dissolve into a sigh of relief and then a loud hallelujah. And you could make a little money on the stocks you bought during that time in October when the financial shows gave their microphones to the analysts who always see signs of a coming financial apocalypse.

An August number of 142,000 doesn't really challenge the prospect that we are on track for creating more jobs than any year since 1999. It's actually just a reminder that a month when most people take vacation is never a great month for finding a new job. But if people insist on making it mean something, it could mean something (good) for your portfolio. Stay tuned.

P.S.
This jobs report marks an important milestone. Per Jason Furman's blog, above average unemployment is now largely a function of long-term unemployment. Short-term rates have returned to their pre-Recession levels.

Count the Cost Twice, Cut the Check Once: Foreign Policy in a World of Endless Problems

Frank Bruni has criticized President Obama for his "Messy Words." Obama recently said that "If you watch the nightly news it feels as though the world is falling apart," and then went on to say, "The world has always been messy," seemingly dismissing today's outrages with a nonchalance that offends Bruni. Bruni knows how horrific conditions are (he's one of our best, most conscientious reporters) and he wants something done.

McCain would like us to bomb all the bad guys. Bruni would like us to save all the innocents. Emotionally, I think they have the high ground. Practically, I think these responses drive us to at least two things: it gets us started on projects we've no hope of completing and it promises us an endless source of outrage and upset.

Woody Allen once quipped, "I can't enjoy a meal as long as I know someone, somewhere is starving."

There are a variety of topics that lend themselves to outrage. Right now. South Sudan is still a failed nation-state. It seems to me that there is no worse curse for people then to find themselves in such a state: institutions collapsed, crime rampant, hardly allowance for the basic needs much less ability to create jobs or hope. Gaza. Still. Ebola is spreading. In Libya and Syria innocent people are being slaughtered. Iraq is devolving into a mess. Putin seems to be toying with the idea of rebuilding the Soviet Union. And of course there are still plenty of obnoxious - even criminal - examples of sexism and racism in this country.

And I'm old enough to know something about this list. It changes but it never ends. You could maybe start all the projects suggested by such a list but you can pretty much guarantee that you won't finish them. Not during any one term, anyway.

I'm glad that we have people like Bruni to remind us that these sources of outrage and tragedy involve real people who we should really care about. I'm even glad for McCain's frequent reminders that we might bring justice to the bad guys. We do have a moral obligation to help. But quite honestly, I'm even more glad that we have a president so different in character from George W. Bush.

I like a little hesitancy and thought as prelude to projects as messy and uncertain as intervention in a foreign country. Whether it's marriage, having a child or intervening in a foreign country, it seems wise to hesitate before starting a project that might never end.