30 June 2011

Secretary of the Future

I wouldn't mind having this job:

This is from the mind of the late, great Kurt Vonnegut.

28 June 2011

Sex (X) and Violence (R)

"What kind of First Amendment would permit the government to protect children by restricting sales of that extremely violent video game only when the woman - bound, gagged, tortured, and killed - is also topless?"
- Justice Stephen Breyer in the dissenting opinion to the recent Supreme Court ruling on video games.

Still I am baffled by how this country rates entertainment. If you were to walk in on your neighbor's teenager having sex, you might freak out or blush but you won't be permanently scarred or call the cops. By contrast, if you walked in on this minor torturing or killing someone, you would be psychologically jolted - perhaps permanently scarred - and call the cops. Most people go their whole life without acts of violence yet few go their whole life without sex.

And yet when it comes to entertainment, we rate sex X and rate violence R. Bizarre.

Wouldn't it be a better planet if politicians were forced to resign over war scandals rather than - or at least along with - sex scandals? Obviously I'm warped. Oh well, at least Breyer shares my bafflement.

Oh, and then Jon Stewart does a much better job of illustrating the absurdity of this ruling in this:

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27 June 2011

Isn't That Batman on Our Plane?

On the flight from LA to Albuquerque today, I was quite excited to see Batman walk onto the plane and sit directly behind me. I had a brief reverie about serendipitously finding myself on the Batplane, filled with awesome technology. Then I was sobered by the thought of how long it would take flight attendants to explain Bruce Wayne designed technology when they had taken decades to memorize the patter about seat belt buckles. My excitement further waned when I realized that it was not Batman but was, instead, just a pony-tailed Val Kilmer. 

I'm new to New Mexico. It is, as my son points out, neither. New nor Mexico, that is.

New Mexico is on fire. Today the Los Alamos Lab was shut down for evacuation. The sky is ugly when - a local assured me - it is normally a big sky, blue and unencumbered by an excess of architecture. Smoke was billowing off the peak of the mountain range between Albuquerque and Santa Fe. 

One little known fact about Santa Fe is that it is only 40 miles away from Las Vegas. An (apparently) better known fact about Santa Fe is that it is not 40 miles away from that Las Vegas. (That Vegas is 630 miles away.) 

The older I get, the more puzzled I am that more communities don't do what Santa Fe seems to have done. The city obviously has zoning ordinances that dictate a particular style, the flat roof, pueblo building that one associates with the southwest. People travel from all over to see this unique city which is not exactly surrounded by natural beauty. It is colorful, has some great buildings, fascinating art galleries and a plethora of shops and restaurants. Unlike a trip to, say, Ohio, a trip to Santa Fe actually takes you to some place you haven't been before.

Back to the flight. Planes are oddly intimate places where one is in close proximity to strangers. My favorite moment in the flight today was when the little girl across from me put down her Harry Potter book and calmly buckled her doll into the seat beside her. As we took off, the woman across the aisle and one row ahead grew visibly agitated as we taxied. Then, when the pilots accelerated, she squeezed her eyes closed and crossed herself, as the man across from her looked over at her. He did not need to cross himself for assurance: he was wearing a yarmulke. Dolls, signs, and holy hats as a way to deal with the anxiety of modern technology. No wonder we create super heroes, even if they look very ordinary without their makeup and special effects team.

24 June 2011

Alexa Narvaez & Her Dad

Happy Friday - here's a great remake of Edward Sharpe's song that might even be better than the original. How could you not fall for this little one? I love how delighted she is with performing.

20 June 2011

One Party Each For the Four Factors of Production

For decades, it has been enough to favor capital or labor in economic policy. It might be time for a new political party that favors entrepreneurship instead.

Every developed country has at least two parties that either give priority to capital or labor. In the UK, they have the decency to explicitly label one of the parties "Labor" (or, more precisely, "Labour"). Nobody names their capital party that, preferring to call it the conservative party. Or, in the US, it is Democrat and Republican. By any name, the "no, no, capital is more important party" and the "you have got to be kidding, labor is more important" parties have defined so much of the economic policies in all developed countries in the last century.

More recently, a party has emerged to protect the environment, to protect the nature that provides us with our natural resources. The Green Party is, unlike the various conservative and labor parties, actually a worldwide party.

It is not too much of a simplification to say that conservatives feel that all good things follow from treating capital right (for instance, by giving lower tax breaks to capital gains than to other forms of income) and labor party folks feel that economic progress comes from treating labor well (things like old age pension and minimum wage law). But what if neither of these any longer leads economic development? What if it is not enough to merely attract capital and educate workers? 

We have capital, labor, and resources parties. We have, that is, parties representing each of the four factors of production save one: entrepreneurship.

Why not an entrepreneurial party? One that doesn't subordinate labor to capital or vice versa but instead subordinates them all to the creation of the new? Labor has no place to work when we don't create new businesses. Capital moves from bubble to bubble when it is merely bidding up the price of existing assets and not creating something new. Labor and capital alike can be a part of entrepreneurship, and only this raises wages and returns to capital.

Entrepreneurship is not just about business. Charter schools and non-governmental agencies and foundations are examples of entrepreneurship in the public sector. More importantly, entrepreneurship done right is about creating new, sustainable systems. A business entrepreneur creates a system that can produce profit even when the entrepreneur has moved on.

Our modern world faces a crisis of systems. Systems as varied as financial and ecosystems, and fresh water and educational systems, health care and energy systems all flirt with collapse and degradation. One thing that it seems we can say with great confidence is that we need to learn more about systems and how to sustain, design, transform, and thrive within them. The difference between an employee and an entrepreneur is whether they take the system as a given or create a new one. Entrepreneurship as an act of system creation is something we need lots of.

What about a party that promoted the interests of entrepreneurs? Certainly the entrepreneurs who start businesses but more broadly, every kind of social entrepreneur? What if we had a party that sided with what was possible instead of spending all its energy on protecting what was? What about a new party that promotes the most recently acknowledged, most sophisticated, and most transformative of the four factors of production?

18 June 2011

Fewer Women - More War & Crime?

From the Guardian

Unnatural Selection by Mara Hvistendahl charts how the trend towards choosing boys over girls, largely through sex-selective abortions, is rapidly spreading across the developing world.
While the natural sex ratio at birth is 105 boys born for every 100 girls, in India the figure has risen to 112 boys and in China 121. The Chinese city of Lianyungang recorded an astonishing 163 boys per 100 girls in 2007.
The bias towards boys has been estimated to have caused the "disappearance" of 160 million women and girls in Asia alone over the past few decades. The pattern has now spilled over to Azerbaijan, Georgia and Armenia, the Balkans and Albania, where the sex ratio is 115/100.
The unnatural skewing towards male populations has become so pronounced in recent decades that Hvistendahl, a writer for Science magazine, says it has given rise to a new "Generation XY". She raises the possibility that with so many surplus men – up to a fifth of men will be single in northwestern India by 2020 – large parts of the world could become like America's wild west, with excess testosterone leading to raised levels of crime and violence.
"Historically, societies in which men substantially outnumber women are not nice places to live," Hvistendahl writes.

While parents in some countries seem to prefer boys to girls, it is men who commit most crimes, particularly violent crimes. Men are 4X more likely than women to commit a violent crime here in the US. History suggests that these numbers worsen as the percentage of men rises. This doesn't bode well for the the safety of China's streets or even the world, as China becomes an even stronger military power.

Making Explicit What Republican Candidates Advocate

Let's get clear on what Republican candidates are advocating.

Right now - largely because of recovery from the Great Recession - the federal government has a deficit of $1.5 trillion.

US total GDP is about $15 trillion.

Republican candidates refuse to raise taxes but insist on lowering the deficit to zero. That is, they want to pull out $1.5 trillion of a $15 trillion economy.

Essentially, they are advocating that we eliminate 10% of the economy - mostly government and government contractor jobs. Even disallowing the ripple effect of this (think of all the "private sector" businesses near air or naval bases that would go under after such layoffs), such an action would more than double an unemployment rate that is already too high.

I do believe that we face a new set of problems that will require Obama to be as creative for this time as FDR was for his. His solutions to date has been expensive but timid, in the sense that it offers too little that could be called innovative. His solution has been timid but the Republican's solution is simply terrible.

Post Script: David Stockman - one of Ronald Reagan's chief advisers - admitted that their austerity plan to reduce the deficit will make the job market worse, probably resulting in a decade of double-digit unemployment. Read it here at Jonathon Cohn's column. 

15 June 2011

Social Invention

In the 1700s and 1800s, technological innovations "just happened." Then in the 1900s, R&D labs within the military, universities, and corporations made technological innovation a regular occurrence. Technological inventions were both expected and managed. You may like your iPhone4 but you know that an iPhone5 will eventually debut. There is no expectation that any one piece of technology is the ultimate.

This century will be to social invention what the last century was to technological invention. It will become something we expect, whether through charter schools or new ways of managing employees or through new government agencies or even through the NGOs and foundations that have recently grown in number and impact.

More and more people are creating new kinds of banks and corporations, schools and governments. Soon, people will realize that this is the new process of society, not a one-time act. It will dawn on us in the same way that it finally dawned on Henry Ford that for all its genius, the Model T was not the final say in cars.

That, it seems to me, is worth thinking about.

13 June 2011

Obama - Tea Party Founder

It's easy to dismiss the Tea Party. For one thing, they seem fond of a 18th century lifestyle that preceded the age of big corporations, big government, and life expectancies that extended much beyond one's thirties. But while they seemingly lack intellectual appeal, they do resonate emotionally with a chunk of voters. Enough voters, in fact, to cost Obama the 2012 election.

In the decade of the 00s, bankers made billions and then cost us trillions. As CEO of Goldman Sachs, Hank Paulson made $37 million in 2005 alone. He left banking with a net worth of $700 million when he became the US Treasury Secretary. Not only did he engineer a bailout of trillions for the banking industry (including billions for Goldman Sachs) but included in the bailout legislation clauses protecting bankers from any liability for the financial meltdown of 2008.

The financial meltdown cost millions to lose jobs and homes and wiped out retirement accounts for millions more. No one has gone to jail for this bank robbery. Countrywide CEO Mozilo did have to pay $67.5 million in fines and settlement fees, which sounds like a lot until you realize that he made $470 million in just the six years leading up to the bursting of the bubble. Not only did Mozilo escape jail time or financial hardship, but even the ratings agencies that assured bond holders that packaged subprime bonds deserved AA and AAA ratings were allowed to continue to do business without any penalties for their egregious failures to warn investors.

What Obama should have done is appoint someone as savvy as Elliot Spitzer to investigate the players in the drama leading up to the costliest financial collapse in history and found people to penalize and even imprison. Not only would this have bolstered his support among his base, it would have won over so many of the independent voters whose outrage at Wall Street led them to join forces with the Tea Party. By failing to address the injustice of systemic abuse of American taxpayers, Obama fed the emotional energy that the Tea Party has tapped.

And to prosecute would not just salve the anger of Americans. Prosecution would have helped to curtail bad behavior by bankers, letting them know that while the American government could not afford to let the financial system collapse, it certainly could afford to prosecute and jail a number of bank executives. As much as trillion dollar bailouts, prosecution would have helped to strengthen the banking system by making bad behavior costly.

Obama's apparent disdain for the emotional cost of the 2008 crisis may cost him re-election. And may even give him a place in history as the co-founder of the Tea Party.

06 June 2011

The American Job Market - A Self Inflicted Wound

Excerpts from The Economist.  Government policy to reduce the deficit and move towards fiscal responsibility is proving economically reckless. It is now costing us jobs and putting us at risk for a double-dip recession.

After producing job gains averaging 220,000 per month in the three months to April, the economy added just 54,000 in May, below expectations. The private sector did a bit better, adding 83,000 jobs, but that was well off the healthy rate of hiring enjoyed earlier in the year. The unemployment rate rose to 9.1%, from 9.0% in April.
America's job woes have also been self-inflicted. Private firms have added over 1.7m jobs in the past 12 months, but the government has shed nearly half a million over the same period (not counting the loss of temporary Census jobs last year). Local governments alone have cut 446,000 positions since September of 2008. Some of those government jobs losses reflect a sensible rationalisation of workforces. Too many of them reflect the damaging effect of pro-cyclical budget cutting due to balanced-budget rules in cash-strapped states. More federal aid to states might have dampened the reductions, easing the drag on national growth.
The ongoing debt-ceiling battle is an additional source of uncertainty. Legislators continue to bicker over how and how much to trim from the federal budget in exchange for an agreement to raise the nation's statutory limit on borrowing. Failure to raise the ceiling by August will trigger default. Just yesterday Moody's, a ratings agency,threatened to downgrade America's debt rating if a deal on the ceiling weren't reached by next month.
In a global economy this volatile, the American economy is going to have a rocky month here and there. But American government officials are doing themselves no favours. Federal Reserve officials are overly concerned with inflation given the outlook for slowing global growth. Now is no time for policy tightening. And elected representatives in Washington are playing with fire. By cutting too much spending in the short-term and turning the debt-ceiling fight into a political battle, Congress risks making a large unforced error. The economy is simply too vulnerable at the moment for politicians to make those kinds of mistakes.

05 June 2011

The Difference Between the Private and Pubic Sectors

When teaching macroeconomics, I wrote a test asking students about the difference between the public and private sectors. It was not until I was grading the tests that I realized that I'd made a typo. The question as I'd actually written it was, Describe the difference between the private and pubic sectors.

Former presidential candidate John Edwards apparently suffered from similar confusion.

03 June 2011

When Our Inventions Invent Us

Of all inventions institutions are unique: they are the only inventions that, in time, invent us. Institutions like school, business, church, government and media define the individual’s life. A seven-year-old child has little choice about whether he is educated within an Afghani Wahabi school, where he is taught that America is evil, or in an Oklahoma City elementary school, where he is taught that America is good. Yet by the conclusion of either education, the individual will have learned to defend what he is taught. One of the first things that any institution does is teach its members how to defend that institution. 

There are no other inventions that program into their users this defense of the invention. Phonographs become CD players with little protest. Horse-drawn carriages become automobiles; telegraph gives way to telephone. Yet individual Jews, Christians or Muslims will die protecting their church. Austrians, Mexicans and Ethiopians will die protecting their country. Institutions do not just shape the life of the individual; they readily sacrifice those lives in order to survive.

The question is whether its possible to create a generation that is not institutionalized. Such a generation could treat institutions as tools rather than, be treated as tools by these institutions. It seems to me that such a remove will be necessary before we can engage in social invention in the same way that we now engage in technological invention.