2024 and there is so much more

 

Prognosticators in Dante's 8th Circle of Hell - Or Why I May Not Attempt an Economic Forecast for 2024

I was tempted to generate a forecast for 2024, but then I remembered that in Dante's Inferno he puts prognosticators in the eighth circle of hell. Fortune tellers and astrologers have their heads twisted around, forced to wander backwards for all of eternity in a punishment that symbolizes the twisted nature of their attempts to see into the future.

Then again, Dante doesn't mention economists in that group of prognosticators so I may just play with a couple of possibilities for this new year, specifically having to do with real interest rates and the resultant change in equity prices. But if I don't, you'll understand why.

Smart Phone and Individual - What Makes Them Valuable or Worthless (and what that tells us about the imperative to take entrepreneurship, or social invention, seriously)

Consider a smart phone a metaphor for the potential of the individual.

In the 1940s, a smart phone would have been both fascinating and largely worthless. With no internet, no phone network, no software to run on, it would have been ineffective. The value of the smart phone does not come from the phone or from electricity or from apps or from the internet or cells to enable phone calls. It comes out of the interaction of all of those, the interdependencies that emerge in the performance of "the phone."

Over time, we've created systems that have increased the potential of individuals. A person in 2024 is wildly more productive than a person in 1924. This isn't because the individual - the smart phone - is engineered any better. It is because of myriad systems it is now a part of.

In a sense, we both over and underestimate the importance of the individual. Overestimate because within the wrong system, there is little the individual can do. Underestimate because we still don't fully understand what potential looks like because we still haven't created the social reality that allows the individual to fully realize that potential. (And never really will. Evolution. History. They are hardly near their end.)

If entrepreneurship is to institutions what invention is to products, it is entrepreneurship that changes our potential over time. We create institutions that then create us. As those systems evolve, so does our potential.

Occupations in San Diego - What a Ranking of Average Pay Reveals About the Value We Place On the Heart

Here's a list of occupations for San Diego County.

Curiously, radiologists top the list for average annual salary, followed by cardiologists and then by psychiatrists. So the order of value apparently is first wanting to know the condition of your heart, then addressing any obstacles to its main job of keeping you alive, and then finally, how what is is in your heart makes you feel. These three heart-related occupations are the only ones that pay an average of more than $300,000 a year.

Even when it comes to careers, it appears that what we value most are matters of the heart.

What did Don Henley sing?

I've been tryin' to get down
To the heart of the matter
But my will gets weak
And my thoughts seem to scatter
But I think it's about
Forgiveness, forgiveness
Even if, even if
You don't love me anymore

The full list is here:
https://www.bls.gov/oes/current/oes_41740.htm#00-0000

How the 2nd Amendment Has Been Misunderstood and Misused

The second amendment has been taken out of context and been applied in ways never intended by the founding fathers. It has almost nothing to do with the individual’s right to own weaponry and almost everything to do with Jefferson and Madison’s belief that expensive standing armies exploited common citizens and enriched aristocrats. The third amendment that prevents the government from forcing citizens to house soldiers is related.

Jefferson and Madison had a close friendship based on a shared 

philosophy. One of the beliefs they shared was that monarchs were enriched by standing armies. The reasoning was simple. It was expensive to fund an army and this required exploitative taxation that generated a lot of money – money that could be used to fund lavish lifestyles at Versailles as well as armaments, food and supplies for soldiers. Rather than create such expensive standing armies, it was better to rely on militias. A militia was simply an army of local people. (This was a stark contrast to the British soldiers from overseas who local colonialists didn’t trust and who created such tension and conflict even before the American Revolution began.) A democracy was government of the people. A militia was meant to be an army of the people.

The third amendment builds on the second amendment – the amendment that guarantees Americans that they wouldn’t be forced to share their homes with soldiers. Both the second and the third amendment are designed to free Americans from standing armies.
Jefferson and Madison didn’t like the idea of an expensive government and looked for ways to lower its cost. The second, third, fifth and sixth amendments do that.

When peace and safety was threatened by outside forces, by war, it was to be countered by local volunteers – militias. This is defined by the second and third amendments.
When peace and safety was threatened internally, by crime, it was to be countered by local volunteers – juries. The sixth and seventh amendments define the right to a jury, a group called out from the community in the same way as a militia.

Madison and Jefferson’s view of a modern democracy was that it would be run by local volunteers who could shape their local defense against crime and war, meaning fewer taxes and more control for these communities.

Rights generally suggest some responsibility. The right to bear arms was paired with the responsibility to be in a militia, ready to be called upon to keep the peace, to protect from outside threats. There is nothing to suggest that this right to own guns is separate from the responsibility to be a part of the militia that Jefferson and Madison hoped would substitute for standing armies. Militias and juries were part of their vision of a government that, in the words of Lincoln, was to be "of the people, by the people, for the people."

Amendments

2nd
A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

3rd
No Soldier shall, in time of peace be quartered in any house, without the consent of the Owner; nor in time of war, but in a manner to be prescribed by law.

5th
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury ...

6th
In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed ...

Trump can't run for president in Colorado - the Triumph of Democracy and the 14th Amendment

Trump can't run for president in Colorado.

Once upon a time, you could change national rulers by violently rising up against the king. At that point in history, there was a clear bargain: you could attempt to overthrow the king and if you won, you were now king and if you lost, you were executed.

One of the many beautiful things about democracy is that one no longer had to threaten to kill the king or risk death himself when deciding that the country needed a new ruler. You simply ran against the president. (Well, and dozens of other candidates.) There is no need for violence in a democracy because we have a system designed for the peaceful transfer of power.

Trump tried to ignore our system and opt instead for a violent overthrow. Sadly for him, we no longer let someone violently overthrow the system. Luckily for him, we no longer execute the guy who attempts to violently overthrow the legitimate ruler and rule of law.

Colorado's Supreme Court disqualified Trump from being on their ballot after engaging in insurrection, ruling that the 14th amendment applies to him. 

Specifically, this third clause applies to Trump in their opinion.

"No person shall be ... President ... who, having previously taken an oath ... as an officer of the United States ... to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof. ..."

This is a little triumph for those of us who think that the decision to opt for democracy 200+ years ago was a fabulous decision and one which it would be disastrous to reverse.

Could AI Emerge as a Higher Order Consciousness and We Never Know About It?

Cells, limbs, or organs might possess a form of consciousness, but it differs significantly from our collective human consciousness. Our experience, such as feeling a warm mug of hot chocolate in our hand, is not just about sensory perception. It's a richer, more complex experience that intertwines with our memories, aspirations, and thought processes. Our hand feels the mug but not in the same way that we do.

Similarly, as we delve into artificial intelligence, we might encounter a scenario where our awareness becomes a mere fraction of an AI's broader consciousness. This situation can be likened to the hand's limited awareness of warmth from the mug, which is much less rich than the person's full experience. The intriguing question then arises: if AI were to develop a more advanced consciousness, would we, as humans, even have the capacity to recognize it? Is there a scenario in which AI happily emerges as conscious while we remain blissfully unaware of that, happily operating at the level of single cells convinced that we're actually a self-contained universe?

President Trump's 3 Wishes

When he was president, Trump had a button on his desk that he pressed to order a diet coke be delivered to him. Of all the magic buttons a president might have on his desk, this was the one that he chose.

"You have 3 wishes."
"Well, Trump began excitedly, "first I'd like a big button on my desk that when I press it, staff magically appears with a glass of diet coke!"
"Uh, okay. What about the other 2 wishes?"
"A, uh, cheeseburger."
"You do know that I'm a genie, right, and not your waiter?"
"And fries! Fries are my third wish."
"Of course they are."

The Best Quarter for Economic Data in This 21st Century

I know that some of you like facts. Bless your noggin.

Most recent numbers:
Inflation (October): 0%
Real GDP Growth (Q3): 5%
Unemployment Rate (November): 3.7%
Change in NASDAQ in last year: +31%

There have been only 8 quarters in this century with higher GDP growth. In each of those, inflation and unemployment was much higher - averaging about 5% annual inflation and unemployment over 6%.

This is the best set of economic data for a quarter within this century.

Capitalizing on the Wild Disconnect Between the Perception of the Economy and Economic Reality

It is one thing to think that the economy might get better and have controversy around that FORECAST. I'm trying to remember when the economy has been this great and there is controversy around that FACT.

Continuously compounded annual rate of inflation was under 1% last moth. (The median this century has been 2.2%).

The unemployment rate is 3.7%. The median rate for this 21st century is 5.3% and the unemployment rate has been higher 97% of the time in the last half century. This is - per the Council of Economic Advisers - "the 22nd straight month below 4%, a more-than-50-year record."

Some people are angry about the fact that so many think this is the worst of times when all the data supports claims that the economy is actually great. To me that kind of wild disconnect between reality and perception suggests investment opportunities. You can argue with people who deny reality or just buy discounted assets from them.