22 December 2021
19 December 2021
Comorbidity would include conditions like old, obese, or asthmatic. The argument du jour is that COVID isn't real because it is comorbidities that are the real cause, sort of a more subtle twist on the "doctors are falsifying documents" argument.
It's another wave of nonsense and misinformation. Allow me a comparison.
"This is an atrocity. They killed Elwood and raped his wife and stripped everything valuable from his farm."
"Well of course they killed Elwood."
"Comorbidities. You know how scrawny Elwood was. I mean, of course he couldn't stand up to a Viking attack."
"You're saying that he wasn't killed by Vikings but instead because he wasn't sufficiently buff?"
"Essentially, yeah. I mean, it's almost always the scrawny or old guys who are most likely to die."
"And the convent of nuns they attacked and raped?"
"Well, nuns. I mean. They have almost no upper body strength."
"Which explains why the Vikings raped and pillaged their convent?"
"And the problem isn't that Vikings are raiding our coast raping and pillaging?"
"Vikings are going to rape and pillage. Vikings are going to do what they do. You aren't going to change that."
"You don't think that maybe we could form some kind of coastal defense so that it isn't so easy for the Vikings to attack us?"
"That seems like a lot of hassle. And sounds very expensive. Just keep a broad ax handy. And do something to increase your upper body strength. You are not going to have much luck fending off Vikings."
Comorbidities is a fancy way of saying, "COVID is more likely to kill people who are vulnerable." It's self-evident nonsense presented as if it is insightful.
COVID raises the probability of death the same for everyone. It is true that different groups - young and fit high on that list - are less vulnerable and increasing their odds of dying still leave them highly unlikely to die compared to, say, an asthmatic 94 year-old who is incredibly vulnerable. (And of course death isn't the only bad thing that can happen. Long COVID can change your health for ... well no one really knows for how long.)
11 December 2021
A couple of thoughts about inflation.
One, inflation is typically overstated. Here's why.
The pandemic has changed buying habits. People are seeking out higher quality, greater convenience or lower prices from any of a number of retail sources - local brick and mortar or online. To the extent that this involves them finding better bargains (higher quality at the same price or lower prices for same quality) from new retailers, that shift is not showing up in measures of inflation. The period from 2020 to 2021 may have involved the most change in who people buy from of any year. That change is not reflected in inflation numbers.
What does all this mean? Inflation is not as high as you think. And it is highly unlikely that we'll experience anything like stagflation over the next few years. As we start lowering unemployment less dramatically, measured inflation will probably drop. Prices are higher now but job creation is at its highest rate on record. Monetary and fiscal policy stimuli have been huge - and rightfully so. That's going to taper off and as new job creation / reinstatement rates lower, the rate of inflation will likely taper off as well. There is still a relationship between inflation and unemployment and the 1970s don't seem to me proof that the relationship has changed.
09 November 2021
Keynes on How We Tend to Save More and Invest Less Than We Should (And on how old ideas should be exorcised by new)
"One recurs to the analogy between the sway of the classical school of economic theory and that of certain religions. For it is a far greater exercise of the potency of an idea to exorcise the obvious than to introduce into men’s common notions the recondite and the remote…"
21 October 2021
20 October 2021 We Lost Csikszentmihalyi, Who Taught Us About Creating a Life of Engagement and Meaning
― Mihaly Csikszentmihalyi
15 October 2021
Social security wages just includes income from a job. It doesn't include rental income, money from dividends or business income.
13 October 2021
“What is this,” I ask. “It’s 13 October. What are you doing trick or treating?”
“I’m going as a dyslexic,” he says. “13 October. 31 October. It’s all the same to me.”
“Now what,” I ask.
“This is my older brother. He’s going as my lawyer and he plans to sue you for insensitivity and discrimination.”
12 October 2021
Interest Rates are at Their Lowest Rate in 5,000 Years (Or Why Biden's Investment and Infrastructure Plan is Too Timid)
It gets better. Adam Tooze recently shared a graph showing that interest rates are their lowest in 5,000 years. [Adam Tooze's tweet and graph are here: https://twitter.com/adam_tooze/status/1446437719283060753/photo/1 ] That's a long time.
11 October 2021
08 October 2021
Meanwhile, it looks like we won't hit something akin to full recovery until next year. The unemployment rate, though, is rapidly dropping as befits an economy creating an average of half a million jobs per month.
Finally, the unemployment rate is so much higher for those with less education. Market forces are less likely to address this than is legislation to fund infrastructure projects and subsidize sectors like childcare, for instance. Funding jobs for less educated people is better in dozens of ways than either ignoring their plight or giving them welfare rather than work.
07 August 2021
Rush Limbaugh died with $600 million and was making $85 million a year. Alex Jones is demonstrably nuts and yet even he is worth millions from his broadcasting.
27 July 2021
William Shockley worked for Bell Labs and managed John Bardeen and Walter Houser Brattain, the two guys who did the research on semiconductors that led to the transistor. Shockley, Bardeen and Brattain shared in a Nobel Prize. (Bardeen went on to share in a second Nobel Prize involving the theory of superconductivity.)
Shockley left Bell Labs, moving close to his aging mother in Palo Alto. He started Shockley Labs and hired some uber-bright people. Turns out that Shockley - who was a crackpot whose theories included an embrace of eugenics - was a terrible manager and one day, eight of his best employees left Shockley Semiconductor Labs to form Fairchild. Curiously, given you could easily leave an employer who you felt you could outperform, people left Fairchild as well, and the companies that sprouted up from those exits were referred to as the Fairchild(ren). The most famous of those was easily Intel, founded by Gordon Moore (of Moore's law fame) and Robert Noyce who proved much better managers than Shockley, who died a bitter and committed conspiracy theorist.
The string of silicon companies led to the nickname Silicon Valley, a description of a new, transformative technology that twice democratized information. Once by its unprecedented processing power and its effect on information technology evolution, an exponential rise in computing power that we've still not fully realized the consequences of. And secondly by creating cultures responsive to the fact that great employees could leave to become competitors so better to give them leadership influence and even equity rather than leave them with incentive to leave your employ to become competitors. This, too, is a consequence we have yet to see the culmination of, a democratization of management and leadership within the corporation.
Silicon Valley is a description that now applies to companies in Seattle. Microsoft, Amazon, Redfin, and Zillow are companies that are casually lumped under the label of Silicon Valley. They - of course - are software companies and rely on, rather than make, silicon. It seems as though Silicon Valley is the wrong label for King County, home to two successive, "richest man in the world" entrepreneurs, Gates and then Bezos.
Perhaps the new label should be Algorithm Alley, a nod to the early 21st century rise of the software that so exploits the potential of the silicon of the late 1900s. Silicon Valley gives way to Algorithm Alley.
26 July 2021
I post all the time about politics, policy and stats that seem to describe our world because I have to live with the consequence of your vote and you with mine. There is nothing private about the consequences of politics so I love the notion that we can at least better understand what thinking (or instincts) lie behind particular models of the world. Shared stats and perspectives can make those worldviews - and thus our votes - better.
21 May 2021
In 1901, King Gillette invented the disposable safety razor that made it easy for men to shave. It took a while to catch on.
17 May 2021
In 1980, Apple had gone public. This meant that Steve Jobs had more money but less power. The engineering team developing the Lisa computer essentially exiled him from their team. At this time, a woman Jobs had been dating claimed he was her child's father. He denied this. The woman named her daughter Lisa; the engineering team decided to name the computer they were developing Lisa, in the hopes that Jobs would also walk away from them.
Andy Hertzfeld: The Mac was initially a skunkworks. At this time it was not an important project at Apple. It was a very minor thing.
Randy Wigginton: And Steve went over to Macintosh where Jef Raskin was, and he and Jef did not mix well.
Steve Jobs: Jef's a shithead who sucks.
Jef Raskin: Steve would have made an excellent king of France.
26 April 2021
24 April 2021
"The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude."
23 April 2021
The American Revolution would have failed without help from France. France not only helped the Americans with arms and ships but money - running a huge deficit.
17 April 2021
The Future You're Buying Now Almost Immediately Begins Changing Your Present (Or What To Think About a Mere $2 Trillion Infrastructure Proposal)
Household net worth rose $19 trillion from 1Q to 4Q 2020.
In the Spring of 2021, Biden is proposing an investment of $2 trillion in infrastructure over 8 years.
By no stretch of the imagination is this excessive.
You buy land through simple purchase. You buy the future through investments. The quality and quantity of our investments is an indication of what kind of future we’re trying to buy.
I would love to live in a world in which I feel compelled to holler, "Wait! Don't you think that perhaps we're investing too much in R&D, education, reducing poverty, inclusion, and infrastructure? Aren't we putting too much money into making too many people more productive, creating new knowledge and funding projects to create great new products?"
And if that happens, please just look at me and say, "No. That's a preposterous notion. We would spend even more but for the fact that we've had a momentary lapse of imagination."
One of the many things we’ve learned about these investments? Beyond whatever future education helps kids to create, it creates jobs now. Beyond whatever successful businesses venture capital helps to create, it creates jobs now. Investment doesn’t just change the future. It changes the present. Investments create value twice.
A new highway increases future GDP in the region by making it easier for people to trade and travel. It also increases present GDP as you pay people now to build it. That's one of the more curious things about investments. As you try to change the future, you immediately begin changing the present. And that makes sense. Now was the future just a short while ago.
14 April 2021
"The greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgment with which it is any where directed, or applied, seem to have been the effects of the division of labour."
13 April 2021
Lincoln and Darwin Were Born the Same Day - And Also Shared a Sense of How Transformative Small, Incremental Changes Over Time Could Be
Lincoln is still the only president to hold a patent, which is a delightfully appropriate thing for the president who understood the importance of capital and the innovation and progress it could fund.
Anyone not properly impressed with the effect of compound interest over time either hasn’t learned how to use a spreadsheet or is really hard to impress. Invest $5,000 at 5%. Every year add another $5,000. In 40 years (when you might retire), you will have $640,000. Keep this up for 60 years (when you might die) and you will have $1.8 million. Time turns a small amount into a large amount.
A lot of time turns a small amount into a huge amount. After 250 years the $5,000 to which you added $5,000 and 5% each year turns into $21 billion. 250 years is not relevant to a life but is relevant to a country.
Lincoln and the capitalists who were excitedly investing in big capital projects like the Erie Canal, railroads and factories realized the power of compound interest as key to creating wealth. They had the vision to see the importance of investing now to transform the future.
Darwin took this vision of compound interest to the next level.
Selection was popular among farmers raising crops and animals. I remember looking through a catalog for bull semen at my uncle’s. He used artificial insemination (AI) to turn a herd of Hereford (I think it was) into the Charolais cattle that he preferred. The catalog for the bulls whose semen he was buying had a variety of information. I locked in on two: birth weight and weight after a year. The ideal was low birth weight (fewer complications in birth) coupled with high weight at a year. AI was just the latest technique for doing what farmers had been doing for centuries: intentionally selecting for qualities in breeding.
Darwin presented the idea that nature - like a farmer - also selects. The length and width of a finch’s beak could be naturally selected based on the island they lived on. Darwin studied this difference in the Galapagos Islands and from this drew the conclusion that with enough time, small differences could account for the differences between gorillas and orangutans, or humans and bonobos. Indeed, all of life.
Today’s world is very much shaped by the realization of how much difference compound difference can make. Darwin’s insights give us insight into the rapid evolution of viruses and the intentional reengineering of genes with CRISPR. Lincoln’s notions that big shared investments lift prosperity more generally have been repeatedly proven and we enjoy longer, more prosperous lives because of them.
Cumulative, incremental change transforms reality – whether in the form of the compound interest that creates wealth or the natural selection that creates new species. The further into the future, the bigger the transformation possible. As we gain more mastery of the technology of genetic engineering that Darwin’s ideas pointed us towards, we - or perhaps our grandchildren - may even be the ones who personally experience the transformation that incremental progress over a period of 250 years can bring.
10 April 2021
Given the Gap in Household Wealth of Folks With and Without College Education is Growing We Need Bolder Infrastructure Plans
If the gap had stayed constant, households with high school dropouts would have $200,000 more in wealth than they now do.
Trump's big idea (and given it is now completely his party, the Republican's big idea) is to return to 1970 and the heyday of manufacturing and strong wages for folks outside the information economy. Put up trade barriers and bring back manufacturing jobs. A lot of people get really excited about this (im)possibility.
The Democrats' big idea has been to create better social safety nets for high school dropouts. Until now.
Biden's infrastructure plan is a reasonable approach to addressing this gap; big construction projects will create really good jobs for folks who haven't learned programming, enabling them to create wealth and some measure of economic security.
How much is Biden's $2 trillion plan that spills across a decade? A paltry sum. Last year, household wealth rose $12 trillion to $130 trillion. $200 billion a year (roughly what Biden's plan proposes spending per year) is less than 2% of the amount by which household net worth ROSE last year.
Spending $200 billion a year is too little but it is a start at the creation of good jobs for folks without college degrees. It doesn't do any of us any good to make the penalty for struggling in school so high.
08 April 2021
You Could Have Been Rich But You Had to Have That iPod - How Corporations Shifted Their Emphasis From Making Products to Making People Wealthy
In 1900, American homes did not have running water, electricity, a car, a radio, telephone, TV, computer, store-bought clothes, frozen food, takeout, aspirin, a refrigerator, microwave oven, canned goods, sneakers, safety razors, shampoo, or credit cards.
Fortunes were made by the various companies able to produce those goods at affordable prices. And people were largely focused on buying those things.
And then our curious thing happened: given these companies had gone public, they rather inadvertently created a new product. They created wealth. If you owned shares of a company that became successful, you could have one of the more curious products of all: financial independence.
On 23 October 2001, you could have been the first on your block to buy an iPod for $399. Call it $420 with tax. Apple was selling a product that made it easy to enjoy all your favorite songs on one slick device. (And of course, you’d have to pay another $1.29 for each song, so the $400 was just the admission price.)
On 23 October, 2001, for that same $420 you could have picked up 1,500 shares of AAPL – Apple’s stock. As I write this in early April of 2021, those 1,500 shares would be worth $194,325.
Apple was selling products that let you have private concerts at a whim. If you’re not amazed and delighted by that, you probably aren’t that impressed by music. The iPod was a fabulous product. But it likely pales in comparison to the other product for which Apple was becoming famous: its stock.
The person who spent $420 on Apple’s stock instead of Apple’s iPod back in 2001 has wealth to use for any of millions of products and services. The person who bought the iPod probably doesn’t know where it is now. Apple has made a lot of very impressive products. Perhaps none are as impressive as having made people rich.
Between 1900 and 2000, life expectancy rose from 47 to 77. (And no, this was not all due to infant mortality rates dropping. Your odds of dying at any age - from six months to 20 to 50 to 70 - steadily dropped during the 20th century.) People had always gotten old but old age was popularized in the 20th century and retirement was invented.
Pension plans and 401(k) accounts took advantage of decades of compound interest over these newly long lives to create enough wealth to fund retirements. People no longer had to work until they died or rely on the generosity of their children. And in 1900, that is what happened. The bad news is that people worked until they dropped dead. The good news is that they didn’t live that long. (Hmm. Or maybe that’s bad news too.)
At a certain point, more goods have less appeal. Your closet has more clothes than you'll wear, your freezer and pantry have more food than you'll eat, and your garage had more things than you can find. Eventually you realize that it is momentum from previous pursuits of happiness that are driving the purchase of more things. You realize that of all the things that corporations make, you are probably more interested in their ability to make you financially independent than you are whatever goods they’re selling. In fact, with the intense interest in startups, people are increasingly buying the stock in companies before those companies are even selling products. "What are you selling?" "Well, for now it's just stock but we do have a product launch planned."
An amazing, unprecedented economy emerged in the 20th century, providing goods that past generations could not have imagined. Of all the goods it made, though, perhaps the most alluring was its promise of financial independence. Of all the things that companies could make that people were eager to buy, the promise of wealth ranked highest.
It is difficult to properly understand modern companies if you still understand them as institutions focused on making things. That was largely true a century ago. Now, they are largely focused on making people rich. (What does Google "make?" Well, they've made a lot of people rich.)
Henry Ford became famous for making cars affordable for normal people. Previously, they were something only the very few, very wealthy could afford. The challenge of the early part of this century is to do something similar with companies' most interesting product yet: make ownership of wealth more widespread, more common. One of the keys to this will be creating more mechanisms that allow employees to use the company as a vehicle for creating wealth. As with the church and state before it, the corporation is to become a tool for the masses and not just the elites. The popularization of wealth will be a signal that we’ve overcome the limit of entrepreneurship and with it have moved beyond the limit of economics.
04 April 2021
COVID Has Made Everyone's World More Virtual - And Threatens to Make Even the Real World More Virtual for Some
03 April 2021
The Big Penalty for Living in the Past - Or How People in Mississippi Pay $3,000 a Month to Live in the Past
Massachusetts was one of the first states to outlaw slavery, back in 1783. Washington and California entered the Union as free states. New York outlawed slavery relatively early - in 1799.
01 April 2021
In baseball, the pitcher tries to keep anything from happening and the batter tries to change that. Most of the time, nothing happens and then suddenly it does. That’s also how life works.
31 March 2021
26 March 2021
What a Growth in Free Time Could Mean for Entrepreneurial Opportunities for Structuring Consciousness
23 March 2021
How the Success of the University of California System Has Created a Crazy Obstacle to Higher Education in California
These poor kids trying to get into UCs. It's not enough that the average GPAs for the kids they admit are over 4.0. The success of these campuses as a hub for activity, research, new businesses, and - of course - education has made them some of the most expensive areas to live in California.
18 March 2021
By Lincoln’s presidency, America’s conquest of land was largely done. Lincoln and the New Republicans shifted the focus from acquiring new land to creating new capital. As a result, the value of land rose. Dramatically.
When Lincoln took office, New York City still had farmland and single-story housing. In 1910, the average price per square foot for an apartment was $8. It is now $1,300. That is even more dramatic than it sounds. If your average building is 2 stories high, $8 per square foot works out to about $700,000 per acre. If your average building is 10 stories high (and more than 7,000 buildings in New York are at least this high), $1,300 works out to over $500 million per acre.
Capital made land more valuable. Steel and elevators made it possible to build skyscrapers. Trains and cars made it possible to draw workers from a wider circle. All of these require capital and as cities created more capital, the value of land rose.
From the start of Lincoln’s presidency in 1861 to the end of Herbert Hoover’s presidency in 1933, Republicans focused on creating capital. After that, policies shifted to the problem of keeping labor fully employed and making labor more valuable. The result for capital was very similar to what happened to land after 1860.
The Federal Reserve has a simple charter: keep unemployment and inflation low. There is nothing there about ensuring that capital gets a high return. Financial markets are no longer subordinate to capital; they are subordinated to labor.
So, what happened to capital after the Fed found tools to better fulfill its charter? In 1945, household net worth in the US was $11.5 trillion. (Adjusted for inflation.) At the end of 2020, household net worth had reached $130 trillion, 11X more.
When the limit shifted from capital to labor, capital did fine. At the risk of hyperbole, you might even say it has done spectacularly. One of many reasons is that a growing number of employees are also capitalists: through pension funds, 401(k) accounts, and home ownership most workers also have a stake in the country’s assets.
Want to increase the value of land? Create more capital.
Want to increase wealth? Develop labor.
Want to raise wages? Make more people more entrepreneurial.
What evidence do we have of this? Well, for now it is anecdotal but the wages in Silicon Valley and Seattle are absurdly high by national – much less global – standards.
Do we need minimum wage laws? I think so.
The way to drive up average wages is to create so much demand for labor through startups that the limit to the number of startups has far less to do with capital than labor. And if that is the case – the priority by which startups get funded is determined by which key people they can get and not which investors they can find (and spoiler alert – that is already happening in places like Seattle and Silicon Valley) – it will drive up wages. Silicon Valley is not just the region with the highest wages in the country; it is the region where wages are growing the fastest. Based on weekly wages in the third quarter of 2020, the average wage in the US is $61,000, up 7.4% in the last year. In San Mateo, San Francisco, and Santa Clara, California, average wages are $148,000 – up more than 20% in the last year. Silicon Valley not only gets more venture capital funding than any other region in the US but more than any other country in the world. One of the many ways that Silicon Valley leads is that it is a place where a relative abundance of entrepreneurship is driving the demand for knowledge workers and raising wages to record levels. In King County, Washington, home to Amazon and Microsoft, the average wage for information workers in the third quarter of 2020 was $327,000. That’s five times the national average for all workers, which means that these workers are making each day what the average American worker makes in a week.
You may be inclined to dismiss these high wages as something reserved for only knowledge workers, arguing that these wage premiums only go to college graduates. It actually raises wages more broadly. Enrico Moretti, in his The New Geography of Jobs, writes, “Compare San Jose, number five from the top [by the measure of percent of workforce with BA or more], with Merced, at the very bottom. Both cities are in California, less than 100 miles apart, but their labor markets belong to two different universes. San Jose, in the heart of Silicon Valley, has more than four times the number of college graduates per capita as Merced and salaries that are 40 percent higher for college graduates and a whopping 130 percent higher for workers with a high school diploma.”
A barber cutting hair for folks making $30,000 a year will make less than a barber cutting the hair of folks making $300,000.
Wages in a region go up with levels of entrepreneurship. We raised the price of land with more capital. We will raise wages by making more people more entrepreneurial which will create more demand for labor in the same way that New York's financial markets, subways and skyscrapers created more demand for land.
16 March 2021
"The Declaration of the Rights of Man of August 1789 was largely the work of Lafayette, Mirabeau and Jean Joseph Mounier, 'but it derived philosophically from the American Bill of Rights." (While he had been in Paris, Jefferson was constantly consulted in secrecy by Lafayette: the 'pursuit of happiness' became in Lafayette's French, la rescherche du bienentre.)"[from Peter Watson's Ideas]