Policy, Sausages and Life

Where's the pepper?

2010-08-18T18:20:00.000-07:00

I think I've uncovered some kind of conspiracy, or at least a mystery.

Except for sweets and desserts, almost every food recipe I've ever followed calls for salt and pepper. And every savory recipe I've ever seen prepared on TV always includes salt and pepper. Along with salt, black pepper is a nearly ubiquitous spice. It's everywhere in what we cook and what we see cooked.

What's weird is that, for the life of me, I cannot remember seeing "black pepper" listed as an ingredient in any packaged food I've purchased from the store. I read a lot of food labels these days, and it just dawned on me that black pepper is never listed as an ingredient.

How can that be? How can black pepper be called for in almost every recipe known to man, yet not included in any foods that we buy?

Something fishy is going on.

Have you ever. . . ?

2010-08-03T16:55:00.001-07:00

Have you ever created something new intellectually? I mean have you ever really, seriously advanced thought in some area?

If you think about it, much of what we all do (or at least much of what I do) is derivative, rehashing what has already been done. Certainly in undergraduate school, any "research" that I did was really an exercise in collecting, repackaging and reselling what other "experts" had done. Even in those areas where I was expected to provide a fresh insight into the work of others, I was still not creating anything new. At best, I might have said something slightly original about someone else's work.

In graduate school, it wasn't much better, really. I was expected to have developed an expertise for my area of study, and I was (hopefully) able to make connections and inferences across works and across subject areas that were perhaps a bit more sophisticated than I would have pulled off in undergraduate school. It felt like hard, creative work at the time, but I know better now, all these years later. Even when completing a thesis at the graduate level, it was still more of the same, riffing on more of the same. It was all about what moderately unique twist I could come up with on what others had already done.

Now, in the real world, what do we really create? Certainly I write thousands of words a week and produce original processes, plans and ideas all the time. Or at least it seems like I do. But I think that someone doing a forensic analysis of my work after the fact would conclude that nothing I do is really anything new. I'm still retracing well-worn paths and building familiar structures.

Does anyone truly "create" any more? What about people studying at the PhD level? The requirement for that degree is supposed to be a true, original contribution to the literature in that field of study. . . something that advances the debate and provides primary research for graduate students to rehash and for other professionals to build upon. Are PhDs where the creation in academia happens?

And what about the creative ones among us in the real world? Those artistic ones among us. Surely they create, right? Original fiction and non-fiction. Original illustrations, photographs, paintings, and sculptures.

Is that really who creates? PhDs and artists? What about everyone else?

Hope

2010-07-18T13:01:00.000-07:00

Hope is the thing with feathers
That perches in the soul,
And sings the tune without the words,
And never stops at all,

And sweetest in the gale is heard;
And sore must be the storm
That could abash the little bird
That kept so many warm.

I've heard it in the chillest land,
And on the strangest sea;
Yet, never, in extremity,
It asked a crumb of me.

-- Emily Dickinson

My ISP Sucks

2010-07-12T15:15:00.000-07:00

After countless calls to my Internet service provider (ISP) and four visits from various technicians, it appears that our house connection is finally working at reasonable speeds (10 Meg download).

Most infuriating parts of the whole experience so far?

Realizing that the complicated way I had my modem "bridged" to my wireless router was in fact totally unnecessary and probably negatively impacting my speeds. The only reason it was ever set up that way was because my ISP said to do it that way.
Being told to disconnect my router and recycle my modem EVERY SINGLE TIME I talked to anyone at my ISP (at least 20 times all together), even though I knew the problem wasn't on my end.
Having the technician show up in the middle of my work day and being surprised when I wasn't cool with just losing my Internet connection for an indeterminate amount of time. Ever heard of "working from home?"
Being told "Yep, we fixed it on our end; the slow speed problem is on your end" and being forced to dismantle my network for the umpteenth time, only to have the guy interrupt me half way through that process to tell me, "Oh, I just got an IM from [some other guy]. He says that we haven't actually increased your connection speed yet. It'll be fixed by this coming Friday."
Having it not be fixed by that coming Friday. Or the next Friday. Or the next.
Being told by "tech support" that I should call customer service once this is all over to get my billing straightened out. Excuse me? I thought I was already talking to customer service. I actually said, "So you can't say to me 'I'll make sure that your billing gets straightened out, sir'?" And I was told, "Nope we [tech support] can't call customer service."

The most infuriating part of the whole process yet to come? The certainty that I'll be charged for the faster connection for the three weeks between when they said I had it and when I actually got it.

Yes, I know that unfair additional charge for those weeks only amounts to about $10. I'll still probably end up going to jail over it.

Make PDFs

2010-07-09T14:39:00.000-07:00

For those of you who want to be able to make .pdf files so that anyone and everyone can reliably view the things you send them, use this.

http://www.pdfforge.org/.

It's free, it's slick, and it allows you to turn your Word docs, Excel spreadsheets and other weird files directly into .pdf files.

Immensely useful.

Who Makes the World's Stuff?

2010-07-06T16:16:00.001-07:00

Who makes the world's stuff these days? Not the United States, certainly. We don't make much of anything here in the U.S. anymore. All of our manufacturing jobs have been off-shored and outsourced and shipped overseas to China and Taiwan and other points east, where wages are low, unions are scarce, environmental protection is an afterthought, and billions of people stand in line to do work once done in the U.S. for a fraction of what we used to charge.

The United States, having served as the global manufacturing leader for most of the last 100 years, has let that all slip away and has become a weak, reactive slave to consumerism. . . choosing to buy what we need instead of making it ourselves.

Isn't that right? I mean, that's what we've been led to believe, isn't it?

Wrong. As the the Financial Times pointed out in June of 2010, "The U.S. remained the world's biggest manufacturing nation by output last year."

Not China. Not Taiwan. The United States, thank you very much. We make the world's stuff. Still. For now.

But as that same article points out, the U.S. is poised to relinquish that crown to China in 2011 unless something dramatic happens.

Will that happen? Probably. Powers greater than me will decide that one way or the other. I'm just pleased that we're there, right at the top, vying for the lead. It's like finding out that you're almost as good at something today as you were back in high school. Maybe we're not as far gone as we've been led to believe we are.

And maybe there's hope. There are still things the U.S. does better than anyone else on the planet, I believe.

Canary in the Coal Mine

2010-07-05T18:19:00.000-07:00

Have you lost your job in the last year? I really am sorry if you have, and I sincerely hope you have found work since then.

If you're like me and you've been blessed enough not to have lost your job, you probably still know a few people who have. But for many of us who have remained employed during this recession, I think it is all too easy to know emperically that a problem exists but to not really believe it deep down. No amount of hype on TV or in print can really bring home the fact that people are flat out LOOSING THEIR JOBS as a result of the sad state of the economy right now.

I'm not sure one more piece of scary information will help make this whole deal real for anyone else, but I heard a statistic recently that kind of jumped out at me. In my home state of Missouri, tax revenue (resulting from income taxes, corporate taxes and sales taxes) fell 9.1% during the last year.

That's real, and that's not small potatoes, folks. That's up in the low billions of dollars.

That's a real drop in taxes collected from what people earn (7.6%), because so many people aren't working, and many of those who are still employed have seen their incomes flatline or even decline in the last year. That's a real drop in taxes on companies (~5%) that aren't doing as much business as they did in previous years. And that's a real drop in taxes collected at the cash register (~5%) as people spend less of what they earn.

For some reason, knowing that my state's revenues have dropped by close to 10% in the past year somehow makes the recession more real to me. In a weird way, tax revenues are like the canary in the coal mine. . . a second-hand indicator of the health (or sickness) of its surroundings.

I think there's something bad in the air.

http://www.connectmidmissouri.com/news/story.aspx?id=478120

America the Beautiful

2010-07-04T15:09:00.000-07:00

O beautiful for heroes proved
In liberating strife.
Who more than self their country loved
And mercy more than life!
America! America!
May God thy gold refine
Till all success be nobleness
And every gain divine!

New York and L.A.

2010-07-02T07:23:00.000-07:00

What grinds my gears. . .

I read this morning that the last interview with Dennis Hopper, who died recently, is on news stands in New York and Los Angeles and "will be available nationally on July 6."

This, like the practice of opening movies in New York and Los Angeles days or weeks before opening them in the rest of the country, is part of the reason why 90% of the people in the U.S. hate New York and Los Angeles.

And yes, I know that more than 10% of the nation's population lives in New York and Los Angeles. Some of those folks hate themselves.

Elitist shenanigans.

First new post in a while

2010-07-01T20:46:00.000-07:00

I haven't posted anything here since December '09, so this is really just a check to see if I can still log in to my blog, post, edit, etc. Seems to be working.

Fool Us Twice, Shame On Us

2009-03-30T10:08:00.000-07:00

I mentioned back in December that the bailout for automakers felt like a bad idea. Specifically, I asked the obvious question: What if the bailout doesn't work? The obvious answer back then was that the car companies would STILL go bankrupt, and we (the tax payers) would be $14 billion dollars poorer.

Well, sure enough, here we are in late March 2009, and GM and Chrysler are turning their pockets inside out again, saying that the $14 billion we gave them didn't quite do the job. They want more money, and Obama is going to give it to them. Oh, he's doing his best to look all stern and grumpy while he's using the nation's overdrawn checkbook to write Detroit another check with nine or ten zeros on it. But he'll write the check, make no mistake about it.

And guess what. The automakers will still go bankrupt. But the question is, will that be the end of it? It'll go one of two ways, I think.

Option 1 has automakers filing for some kind of high-speed bankruptcy as a condition of their getting more bail out money. They'll file for bankruptcy, wiping out much of their debt (thereby screwing over their suppliers and vendors, not to mention the US tax payers). They'll take a crack at retooling their labor contracts and restructuring their pension and benefit positions. And they'll get billions more in guaranteed loans from the Obama administration. With all of this, the car companies will reemerge, ready to do business again. And guess what! They will still fail, and they will be back yet again to ask for even more money.

Option 2 has has automakers getting billions in additional money from the government before they take the step of filing for bankruptcy. They'll get the money, burn through it, and then still go belly up, wiping out the money owed from the first bailout ($14 billion) AND however much they get this second go-round. All creditors will get screwed, attempts will be made at restructuring, and they will reemerge just as screwed up as they were before. And guess what! They will still fail, and they will be back to ask for even more money.

There is, of course, a third option, but it is an option no one seems willing to take. This third option has GM and Chrysler being allowed to fail outright. We as tax payers resignedly write off the $14 billion in lost bailout money as a lesson well-learned, and we refuse to play the game any more. The automakers go belly up. And instead of allowing this privately-held company to screw over countless vendors and suppliers (and tax payers), we amke sure that their assets are used to pay all outstanding debts.

I used to think that having those big companies fail would be an unthinkable disaster for the country. I now see that there are far worse things.

Can GM and Chrysler emerge from such a liquidation and still competitively build cars? Probably not. So be it.

Lock the Door? Or Open It?

2009-02-17T09:34:00.001-08:00

I’m conflicted these days about a lot of things. One that keeps smacking me in the face is the whole immigration issue.

Side A: California is showing a $40 billion budget deficit while they pay an estimated $13 billion annually to support illegal (not “undocumented”) aliens (not “immigrants”). States across the US are similarly burdened. Our federal immigration laws are being ignored, and crazy policies in states like CA are actually encouraging more illegal aliens to come on in. The US / Mexican border really does represent a national security weakness, too, although not nearly as much as some would like us to believe.

Side B: Mexico is a disaster; there is no hope there for the vast majority of Mexican citizens. The US immigration process is slow, unfair, and often wholly impassable for Mexicans wanting to emigrate to the US. If I was a Mexican citizen living there in poverty (as is the norm), I’d do everything in my power to get to the US. . . up to and including sneaking myself and my family across the border illegally. If I was poor in Mexico with a pregnant wife, I would do whatever it took to have my child born in the US. And in doing so, I would likely have to put myself and my family at great risk; too many people are suffering and dying as they try to get into the US.

There's a lot of fault to go around. I can find significant fault in the corrupt and broken Mexican government that has failed consistently for 200 years to foster any kind of prosperity for its people while actively encouraging its citizens to go to the US illegally and send money back home. I can find fault in US federal policy that has failed to reasonably and fairly regulate its southern border while also refusing to have any kind of reasonable enforcement and deportation processes in place. I can find great fault in the state policies in California, which have exacerbated the problem.

But if I am honest with myself, I cannot find fault in the motives of those who choose to come to the US illegally seeking a better life.

How’s that for wishy washy?

1979 Schwinn Stingray (red)

2009-01-31T14:36:00.000-08:00

Man, from age seven to age fourteen or so, there were few things more important to me than my bicycle. It was everything.

It was transportation to school (occasionally), the swimming pool (all summer long), friends' houses, relatives' houses, stores, and movies. If I wanted a pack of gum or some kind of novelty from the drug store, I didn't ask my parents for a ride or for money. I used my own money, and I got myself there.

It was freedom to head out at 9:00 a.m. and not come back until dinner time during the summer.

It was ownership. . . ownership at a time in my life when I held supreme authority of very few other things in my life. My bike was MINE. . . not my sister's and not my friend's. Dudes had to ask before they could just pick up my bike and ride it.

It was responsibility. . . a maintenance responsibility prefiguring the responsibility of owning a car later in life. Keep the tires inflated, keep the chain lubed, maybe consider tearing it apart to install a double goose neck or a new seat or a hand break or something cool. And lock it up or it'll get swiped. Big, important decisions and responsibilities for a kid.

It was speed, too. . . the kind of speed a kid without a driver's license can't get any other way. Buzzing down a long residential hill as fast as the cars usually traveled gave me a kind of speed that almost seemed illegal. Speed AND danger. Something happened almost every day on that bike that surprised me or scared me or made me really take notice of things. A wobble at 30 mph. A rock in the road that almost sent me sprawling. A near collision with friend or a neighborhood dog. Riding my bike everywhere was the only thing my parents knowingly allowed me to do that routinely threatened my life. No helmets. No pads. Screw it. Just ride.

It was pain, too. . . the impetus for countless bruises, abrasions, serious cuts and full-on head injuries. My bike taught me to live with and play through pain, while also teaching me the finer points of scab care and maintenance. Bike riding, like life, was sometimes painful.

Perhaps most importantly, my bike was a lesson, as simple as it was profound. Getting where I was going required genuine effort on my part. No one else would help. As soon as I identified a destination, my mental GPS calculated the obstacles and risks involved. Getting to the movie theater meant tackling that huge hill on Lindbergh Blvd and that frighteningly narrow stretch of Mattis Road that had no shoulder. Before I started any trip, I weighed its benefits against the effort and risk involved. . . a cost benefit analysis as comprehensive and honest as anything I work on today.

And in the end, the benefit of a bike trip always seemed to outweigh the effort it would take. I learned that sweating up the hill to get there always promised a breezy, effortless return trip. And there was nothing sweeter to a sweaty 11 year old boy than coasting down-hill with hot summer wind pushing his hair back.

I loved my bike.

Eclipses. . .

2009-01-31T14:29:00.000-08:00

When we experience a perfect, full solar eclipse here on Earth, the moon is directly between our line of sight and the sun. The result is that the sun is perfectly hidden by the moon, looking to us like a pitch black spot over the sun. Just a fraction of the sun's corona is visible around the outside edge of the moon. . . enough to really screw your eyes up if you look up at it with naked eyes sporting dilated pupils.

What are the odds that the Earth would come equipped with one (and only one) moon whose size and distance from earth make it perfect for eclipsing the sun for us?

Keep it the same size and move it farther from or closer to the Earth a significant amount, and you change how much of our view of the sky the moon occupies. This would change how much (or little) of the sun it blots out during a solar eclipse. Similarly, keep its distance from Earth the same but make it a bigger or smaller moon, and it stops being the perfect solar eclipse tool.

I know that the Earth's distance from the sun differs depending on its location along an elliptical orbit. And I know that the moon's distance from the earth fluctuates. Overall, though, I think the tolerances in those two variables are tight enough that full eclipses look very much the same here on planet Earth from year to year.

I wonder if there are any other planets in our solar system that have such a serendipitous combination of lunar and orbital factors?

Dunno. This is the kind of stuff that keeps me up at night.

What if it doesn't work?

2008-12-20T15:08:00.000-08:00

The Republicans in Congress wouldn't approve a bail out for automakers. So Bush and the Democrats in Congress did an end-around and gave up on trying to find fresh money for Detroit. Instead, they filched 14 of the $700 billion that was already approved by Congress to bail out the financial system and directed that to the automakers.

The $14 billion is purportedly being given as secured low interest loans. We are told that the money will be paid back and tax payers may even make a little money off of the deal.

So what happens if the big three automakers take the money and STILL go bankrupt?

Fixing Comments Functionality

2008-10-01T10:08:00.001-07:00

New posts should be comment-able now. Bummer that the last few weren't.

To Love the Country or the Countryside

2008-10-01T08:11:00.000-07:00

How about this for getting to the root of the problem?

The Chevy Volt (an electric car) is being pushed by General Motors as the first production electric car, to hit the market in 2010. GM unveiled it at a NASCAR event, and they're understandably trying to drum up excitement about the car. But GM has to be careful about pushing the Volt too hard as a patriotic, pro-American car that can help free us from our dependence on foreign oil. While they want to take advantage of the desire by nationalists to see the US become energy independent, they're reluctant to get to stars-and-stripes with the Volt.

Pete Lewis, who works in program operations at GM, puts it this way.

"There is a fear that if we position this as a 'pro-American' car, it will upset some of the environmentally conscious crowd, and we want it to be embraced by everyone."

Mr. Lewis is justified in his concern about offending the green-ers by becoming too pro-American, but I find it tremendously sad.

The most "green" or "environmentally conscious" among us are, by definition, the most anti-American. Take a look at Hollywood, PETA, Greenpeace, the Sierra Club (sorry Steven), and any other such organization if you disagree with me.

And the flag-waving, America-loving nationalists among us tend to be decidedly less concerned about environmental issues. Take a look at any NASCAR event across the country for further proof.

How has it come to this? How have we gotten to the point where, to care about our environment, we must hate our country?

Hubble Repair?

2008-09-23T10:34:00.001-07:00

Over the last several years we've seen article after article about how the Hubble space telescope is a dinosaur and not worth repairing. Space geeks get all up in arms when talk of giving up on Hubble surfaces, and NASA officials always calmly explain why Hubble isn't worth maintaining at this point.

Each time this happens, I check Hubble off in my mind as a done deal. It's over. No longer being maintained. Fine.

And then I see stories like this. . . about a planned shuttle mission to repair the Hubble telescope.
I don't get it.

Is the United States Behind. . . or Ahead?

2008-09-05T10:54:00.000-07:00

With Barack Obama as the Democratic candidate for president, critics of the United States talk about how our country might just finally catch up with the rest of the civilized world and elect a non-white president. The implication, of course, is that the rest of the world cleared this discriminatory hurdle decades ago.

I got to wondering, though. . . has the United Kingdom ever elected a non-white Prime Minister? I don't think so. And it goes without saying that they've never had a black king or queen.

Have the Germans ever elected a non-white Chancellor? I'm pretty sure they haven't. How about Italy? Or Spain?

For that matter, how about Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, Greece, Hungary, Latvia, Lithuania, Luxembourg, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, or Sweden? Have any of these countries ever had a black national leader?

I'm not an expert on the history of any of these countries, certainly; to tell you the truth I can't even name the current leader of half of them. I guess there may be one in there that has elected a black person as their national leader at some point, but I can't think of one off hand.

Do we still have discriminatory hurdles to conquer here in the United States? Sure. But is the US really so far behind on this particular issue? Or might it just be out in front on this one?

2008-07-04T12:14:00.001-07:00

I possess a neat antique brass spyglass of some sort, and I've always wondered about its origins. It's a collapsable (telescoping) spyglass like you'd see a 19th century ship's captain using to scout the horizon. It is 48" long when fully extended. Engraved on the section near the eye piece is:

Docteur Arthur Chevalier
158 Palais Royal
Paris

I looked the dude up and found that Chevalier's company mostly made microscopes and other scientific instruments back in the second half of the 19th century. I couldn't find any real references to telescopes of this nature, so I contacted the Oris group, a trio of scientific instrument enthusiasts in Italy who specialize in the research and identification of antiques such as mine. They can be found at http://www.bononiaemicroscope.it/

They’ve been very helpful to me so far, expressing interest in my spyglass turning me on to this Chevalier catalog from the mid 1800s.

http://www.sil.si.edu/digitalcollections/trade-literature/scientific-instruments/files/51671/

I've sent the Oris Group some pics of my telescope and hope to hear back from them soon. I'll keep y'all posted on what (if anything) I find out.

Reality Check

2008-07-04T11:54:00.000-07:00

My apologies for the caesura in my blog postings. Work and school conspired to wear me out there for a while, and I reverted to bad habits, namely emailing about blog-ish stuff to a core group of friends instead of blogging about those things here.

I hope to be back on track now, for better or for worse.

The Affluent Society

2008-04-25T11:17:00.000-07:00

As the government announces today that special tax rebate checks will be delivered early this year, I can’t help worrying about what a fiasco the whole thing is shaping up to be. I understand the intention behind the policy. But given where we are with the economy, where Americans are with debt, where industry is with regard to decreasing productivity, etc. . . I just can't see how the Fed thinks these rebates will do anything but make things worse.

I'm certain that the economists the Bush administration is listening to HAD to have read John Galbraith back in their graduate school days. As Galbraith said over 40 years ago:

Economy is production-driven. Production drives consumption; not the other way around as we're told to believe.
Industry has manufactured artificial demand for products we don't really need (therefore possessing zero marginal utility). Reference my quest for a Wii as an example. Or tennis shoes that cost $12 to manufacture and ship and sell for $200. Manufactured demand for goods with zero marginal utility.
This artificial demand for valueless items is what has sustained production (and the economy) in the 20th century.
Industry and the country have cashed in on the economic benefits of heightened production by driving that production past all points of reason.
American consumers have supported this production via over consumption, and they have over consumed by saving zero and leveraging credit.
Collectively, Americans have maxed out their credit and can no longer support the given levels of production.
They can definitely NOT support the ever increasing levels of production needed to continue economic growth.
Consumption has flattened and will begin falling.
Industry will back off production, staunching the flow of money that the production pumps into the economy.
Private incomes will fall further, making even less money available for consumption.

We know we’re in for a hurting with the whole economy thing, right? It might be just a short slow down. Might be a small recession with a quick recovery. Might be a long recession with a slow recovery. But it'll be something.

Americans can no longer turn to credit expansion as a way to support their consumption and the economy as a whole. So what does the Fed do? They hand maxed-out Americans some money. . . money that Americans are borrowing from their own future selves. . . so that Americans can spend that borrowed money now and continue to artificially support production by increasing debt.

But instead of Americans spending their own credit dollars gotten from unsecured credit card debt, Americans will now be spending borrowed money secured by U.S. Treasury bills. It’s a debt that can’t be wiped out with Chapter 11 bankruptcy or a windfall from an insurance settlement. It’s debt (along with a few trillion other dollars) that our kids and grandkids WILL HAVE TO ACCOUNT FOR.

Don't get me wrong. I'll cash the check when it arrives. But I'm not chipper about it.

What do you mean, “No?”

2008-04-25T11:15:00.000-07:00

I wanted a Wii game console for my daughter. I wanted one for Christmas ’07, but none could be found easily. So I waited. In April 2008, I started checking again, and I STILL couldn’t get one. Retailers all told the same story. Each store receives a shipment of 10 units on a random basis, every few weeks. No telling when they’ll be in. No way to reserve them. You just have to be lucky.

Most retail stores had taken to putting Wii status messages on their automated phone recordings. “If you are calling about a Wii, please press 1 and then go away, because we don’t have any.”

Not being able to get a Wii really started to bother me. . . so much so that I started wondering about why it bothered me so much. And I came to realize that we really are spoiled, folks.

We live in such an affluent society that the idea of scarcity is foreign to us. Anything we want is readily available; the only reason we don’t have everything we want is because we don’t have the money. You want a bushel of pomegranates? Those are exotic fruits and only avaialbe in the fall here in the US, right? Nope. Go on-line and buy a bushel now. You want a hundred pairs of designer jeans? Go get ‘em. No sweat. You want designer Indian tea for breakfast? Go to the store and get some.

It seems almost un-American for me not to be able to go out right now and buy a Wii (or ten Wiis) if I want to.

Survival of the Fittest?

2008-02-29T10:37:00.000-08:00

Hard core conservatives and virtually all Libertarians lament the existence of most social programs. Leg-up programs like Head Start and Affirmative Action are bad enough in their view, and full-blown entitlement programs like Welfare are wholly unacceptable.

On a good day, those on the far right put on their “compassionate conservative” hats and cite the ways that entitlements and even leg-up programs countermand the American dream, robbing the poor of the personal victory that can only be won when they pull themselves out of poverty or disadvantage without outside help.

On a bad day, though, the most blunt and least delicate of conservatives reveal their real philosophy. Survival of the fittest, baby! SOTF. It’s a hard, hard world, and not everyone can be rich. Heck, it’s not even possible for everyone to be middle income. Some folks will be always be poor. That's just the way it is. Life is tough.

At least subconsciously, these conservatives and Libertarians recognize what economists of the central tradition have known since the time of Adam Smith; inequity and misery are inevitable in our economic system. The system on which our economy is based allows for-- and in fact encourages-- great disparities in personal wealth amongst its populace, and the very design of this market-based economy ensures that all individuals will not start life with equal advantages of birth, family wealth, intelligence, culture and opportunity. Even Smith understood that true equity could only be achieved by artificially leveling the playing field.

Recoiling reflexively away from all things redistributive, fearful laissez-fair conservatives shun the idea that an un-level playing field might be unfair in some way. They cling desperately to the immutable law of natural scarcity like a philosophical life raft, and they regress to a bastardized version of Social Darwinism as a way to cleanse their collective conscience. Survival of the Fittest. It's the only solution. What else can be done without us all becoming socialists?

Such Social Darwinists see life as a kind of sporting event, in a way. It's a game, folks. Play like winning is the only thing. If you lose (i.e., failing to excel in life, remaining poor or homeless or without health care or an education), it is because you were weak and ill-prepared. Tough break.

And if you win (i.e. succeed in life, earning well, having health insurance, owning a home, having your kids in decent schools, taking vacations and sending those kids to college). . . well, you worked hard, by God. Unlike those who failed, you did what you had to do, and you deserve your success.

Survival of the Fittest is comfortable enough to most of us when we're watching documentaries on television about life and death on the Serengeti. But the moral rub comes when the lions and zebras in the equation are human beings. The Survival of the Fittest concept brings with it two suppositions that are problematic in my view. First, it assumes that those who don’t survive weren’t fit to begin with. And more troublingly, it assumes that those who aren’t fit do not deserve to survive.

That should be troubling to anyone. Anyone who might just find himself unfit some day, at least.

Those who rail against redistributive social programs as being anti-American or worse would surely denounce my claim that they do not care for the poor and disadvantaged. They'd point to charities or private enterprise as ways that the poor can be cared for without using the strength of the federal government to involuntarily redistribute wealth.

I argue that such "solutions" are empty of any applicability to life here in 2008. And I contend that those decrying social programs and touting the private sector as the solution don't really even believe that the solutions really lie there. I believe these are just vacuous responses to difficult questions, meant to ease the conscience of the Survival of the Fittest crowd while providing no real answers for those who, often through no fault of their own, come up short in life's fitness test.

Post Script: Charles Darwin didn't coin the phrase "survival of the fittest" as part of his evolutionary theory. It was a political theorist who formed that little gem, which seems about right. Look it up if you don't believe me.

Do We Need a Third Party?

2008-02-08T14:00:00.000-08:00

Expressions of dissatisfaction with the federal government are common. Many believe that it has overreached its rightful boundaries and become corpulent by feeding on the American public. Individuals expressing such thoughts often see the modern political process in the US as a cause. They see politics as dominated by two political parties that no longer adequately represent the varied preferences of the American people.

The conclusion typically reached in such arguments is that increasing the number of viable parties in the political process would be a step in the right direction. If there were three or four parties, people would have a better chance of finding a candidate that adequately represents their own wants and desires for the country, and the excesses of government could finally be reigned in.

More would be better.

Nobel Laureate Milton Friedman, who is widely considered the most influential economist of the twentieth century, spent a career expressing similar dismay at the ways in which the federal government has been allowed to expand. Friedman saw the proper role of the federal government in a free society as being something that could be comfortably summarized on a cocktail napkin. The government should serve as umpire and rule-maker where necessary and look after “madmen and children.” Everything else, in Friedman's view, should be left to the care of market dynamics.

Friedman rejected as inappropriate nearly all allocation functions of government; social security, welfare and cash payments, federal subsidies and tax breaks. . . all were anathema to true freedom in Friedman’s view.

Most of the individuals demanding smaller government and more party options in the political process would likely agree with Friedman, I think.

Yet interestingly, the political process itself was something under which Friedman chaffed. Noting that all governments are inherently coercive by nature, Friedman lamented that “the use of political channels [for any purpose], while inevitable, tends to strain the social cohesion essential for a stable society.” The political process, he posited, always results in wide-spread dissatisfaction for those on the losing side of each and every vote.

So let us look at presidential politics and consider what Friedman might think about our two-party system. With our recent tendency toward very close elections, it is likley that the vote will be roughly evenly split in the 2008 presidential election. About half the country will be happy with the outcome and the other half will be dissatisfied. If the election bucks this trend and shows a wide margin of victory for one candidate, then we might expect 58 to 60 percent of the population to be on the winning side, with 40 percent or more dissatisfied.

Some argue that adding more parties to the mix would help increase overall satisfaction with the process and the popularity of the eventual president. But I (and perhaps Friedman) would argue just the opposite.

Introduce a third party into the mix, and instead of an election win requiring a majority of electoral college votes, such a win might require only a simple plurality (34 percent of the electoral college vote). That could leave roughly two thirds of the country dissatisfied with the election results. Introduce a fourth party into the equation, and our next president could be elected with 26 percent of the electoral vote, leaving three quarters of the country opposed to their new leader.

I honestly do not know how our electoral process would handle three or four or five parties. There may be rules in place that would prevent a candidate from winning with just 24 percent of electoral college votes in a four-party race.

But from just a logical perspective, is more better in this case? If the political process is coercive and leaves the losers of each exchange dissatisfied, then adding parties to the process would necessarily leave more voters on the losing side of the election. More parties means more losers.

We only have to look to other countries and their parliamentary processes to see what elections look like with three or four or five (or ten) parties in contention. It could be argued that few people win in such cases.

More is better? I’m thinking not.

Should They Vote Their Race or Their Gender?

2008-01-21T15:10:00.001-08:00

CNN.com headline from Monday, January 21 showed side-by-side pictures of Obama and Clinton.

Beneath the picture, the article talked about the significant role that black women will play in deciding the Democratic winner in the South Carolina primary. “These women face a unique dilemma: Should they vote their race, or should they vote their gender?” That line was followed by a link to the “full story.”

Should they vote their race (Obama)? Or should they vote their gender (Clinton)? Those are the two key questions?

I find the entire article insulting. Why aren’t black women given the credit that the other demographic groups (black men, white men, white women, working-class voters, rural voters, etc.) are given? Why would black women be less concerned about the actual issues than everyone else? Why would black women NOT be considering what the rest of us are considering. . . namely who they think might actually do the best job as president?

Maybe the link at the end of that paragraph should point to “Less than the Full Story.”

Everybody Look What's Goin' Round

2008-01-10T13:50:00.000-08:00

I’m no daisy, certainly, but sometimes it is overwhelming. A snapshot of CNN.com on Wednesday January 9 showed links to 20 or so separate stories. Of those 20, here are 10 headlines:

Four children's bodies found with woman
Hiker murder suspect now focus of Florida case
Pregnant Marine vanishes before testifying
Police: Spiteful dad threw 4 tots off bridge
'Brutal execution' caught on tape, U.S. says
KSAT: Medic never checked victim's pulse
2 children among 5 deaths blamed on weird weather
Man sees 'mark of the beast,' cuts off hand
3 die in 50-car pileup in fog, smoke
Investigator: Tiger attack victims will not face charges

Roughly half of the stories on the site at that moment pertained directly with murder or tragic death in extremis.

This death story ratio on CNN.com is considerably higher, I believe, than the death ratio of CNN’s TV news coverage.

None of these stories affects me. Not in the way that politics and world events and the economy and public policy issues affect me. These are tragic stories to be sure, but the four dead children and their dead mother do not inform my life in any important way. A father throwing his four kids off of a bridge doesn’t lead me to take any action or learn any lessons. They simply sadden me and shock me and make me shake my head in dismay.

So I couldn’t help wondering what pushed CNN.com’s editors to the point at which their seining of the day’s world news for publication resulted in this deathly detritus instead of real news that affects everyone.

I don’t believe that TV news could sustain such a high death ratio in its stories; national TV news tends toward broader stories with more national and international applicability.

Surely some of these tragedies would also be talked about on CNN and Headline News, but the broadcasts could not get by with having these stories comprise the majority of their programming.

But CNN.com, while global, really does serve a personal, what’s-interesting-to-me purpose. They can make it as trivial and tragic as they want, knowing that the few folks who want more substantive news can easily toggle over to another web browser instance. CNN.com knows that its readers want quick-hit 200 to 400 word articles about stuff that gives them a thrill.

That explains why web news and broadcast news CAN be so different. People expect different things from TV and the web. But what explains why the two ARE so different?

Simply put, death stories cause people to click. This is far more important, I think, than the tired old lament about the media gravitating toward bloody, sensational stories. For sites like CNN.com, this has come to truly represent their purpose; to not just provide news, but to provide tragic news, almost to the exclusion of other subjects.

CNN.com is a for-profit site generating advertising revenue off of its content while also cross promoting its broadcast ventures. Fine. The more clicks a story gets, the more profitable it is. Dandy. And apparently, the more tragic a headline is, the more prone viewers are to click it. Sad, but not surprising.

What is most pitiable about the situation is that the administrators of CNN.com surely have robust metrics to show PRECISELY which kinds of stories generate the most activity. I imagine the marketing folks with a sophisticated metrics dashboard at their disposal, allowing them to see associations between content and page hits in dozens of different ways. The editors are attuned to (and likely compensated directly for) posting as many of those stories as possible.

What this really tells me is that CNN.com has become what broadcast news wishes it could become. . . a revenue factory that is free (because of its format) to ride the far edge of sensationalism and tragedy to generate income instead of informing with actual news. Broadcast media doesn’t do this only because they can’t. Yet.

I hereby vow to use headlines as a screed to smooth out the concrete of my news consumption, pulling the news that I need to consume to the surface (for me to read) and making invisible those stories that are designed only to titillate and earn revenue. I will contribute to the bloodbath no longer.

Is this a big move on my part? Nope. Will it bring about any change? Nope.

But as Mother Teresa once said, “We can do no great things, only small things with great love.”

Nothing Better Than a GRN

2008-01-07T07:18:00.000-08:00

I was feeling punk last Sunday, just cresting the peak of a January cold. Sick enough to be miserable, but not sick enough to admit to being so.

Wild card weekend in the NFL meant there was no football worth watching on TV. I was weary and uncomfortable and irascible and just couldn’t figure out where to put myself. I couldn’t get comfortable on the living room couch. We have no comfortable chairs in our house. The idea of going to bed in our bedroom seemed too much like admitting that I really was sick. So what was I to do?

The guest room.

It stands apart from the general traffic and bustle of our house in a kind of sub-space isolation. It’s a simple room, neatly arranged with a tidy little bed and an old fashioned writer’s desk. Quiet and dim, uncluttered and neatly appointed, it's a kind of peaceful in-home hotel room retreat.

I’m pretty sure there are few things better than an impromptu Sunday afternoon guest room nap. Door closed, shades pulled, asleep on top of the bed spread, covered by a light blanket, removed from the world for a time.

A guest room nap (GRN). I can't wait for my next one.

"Subprime" Update

2008-01-05T10:52:00.001-08:00

As an addendum to my earlier post about the meaning and misunderstanding of the word subprime. . .

In early 2008, the American Dialect Society named subprime the word of the year for 2007.

Then again, the same group chose plutoed (to be demoted or devalued) as their 2006 word of the year, which goes to show you. . . something, I guess.

How Important, Service?

2008-01-01T18:24:00.000-08:00

Took the wife and daughter to Big Cedar Lodge near Branson, Missouri between Christmas and New Years this year. Pricey by our standards, but it was a short trip and we like our niceties. (Note, the room we had is circled in red in the picture above. Second floor, all the way to the left.)

The first two days of our trip were great. We ate at the lodge restaurants, partook of a carriage ride around the grounds, bought a car load of souvenirs and generally acted like great patrons.

Toward the evening on that second day, our daughter started not feeling well.

Thinking ahead, I saw us perhaps wanting to check out a day early to get our sick daughter home. I stopped by the front desk that evening and asked the guy (we’ll call him John) about my chances of NOT being charged for that last day if we checked out the following morning, a day early. John’s response? “You’ll still be held responsible for that last day. Sorry.” He was implacable.

That night, our daughter’s fever spiked to 103.3 and by morning she was throwing up every fifteen minutes. We had to leave, regardless of whether or not we’d be charged for that last day.

I packed the car and went back to the front desk at 9:00 a.m. that morning to give them one more shot at doing the right thing. This time, I talked to a different guy (we’ll call him Andy), and I could tell before I even opened my mouth that he’d be able to help me out.

I told Andy my story and asked if I’d be charged for that last day. Andy’s response? “No sweat. I can take care of that for you.” Clickity clickity click. Done. No charge for the last unused day. Andy wished my daughter well and sent us on our way with a caring smile.

Had the first guy (John) with the obstructionist attitude prevailed, that resort would have made $269 more from me this year. But I would have left that resort angry, I would have never returned, and I would have made it my mission in life to steer others clear of Big Cedar Lodge.

Because of Andy, though, I’ll likely take my family back to that resort again around Christmas time, spending around $1200 on lodging, food, souvenirs and activities. And we’ll likely go back year after year.

How important is customer service?

Where Lies the Value?

2007-12-18T12:14:00.001-08:00

I find myself struggling to take seriously the near-instant and seemingly effortless undergraduate and graduate degrees available to people these days.

Attend class one night a week. Or work online and don't attend class at all.

Enjoy nine-week semesters.

Attend class the same night each week.

Just register once and have your whole program laid out for you.

Finish two years of undergraduate work in six to nine months.

Get a graduate degree in 18, 14, or even 12 months.

And these aren't just degrees from the University of Flagstaff (or whatever). Respectable (and often nationally renowned) universities offer these types of degree programs.

Putting pedagogy aside for a moment, I can't help but wonder how edifying such educational programs are for the students themselves.

Call me a traditionalist, but I'd argue that the value of a degree is (or rather should be) a function of how much sacrifice and work was involved in its attainment. The easier the degree is to get, the less valuable it is (or should be). After all, if a BA could be gotten by putting a quarter in a vending machine, then everyone would have one and it would have no value. It is the scarcity of the resource that makes it valuable. And it is the difficulty of attaining the resource that drives its scarcity.

So is a jiffy pop degree really worth anything? I mean, have you really earned a degree if you haven't had to:

commit to rearranging your work schedule to attend class, worrying how business travel may screw you to the wall or how a change in a class’ exam schedule might conflict with a big meeting at work
navigate the campus bookstore and registrar's office every semester, struggling to pick up books and identify in which room your class will meet
deal with a sixteen-week semester stretching out before you with only three credits waiting at the end
deal with 20 year old kids schlumping their way through a semester that you’re killing yourself to navigate
sacrifice big, bloody chunks of your time away from your family. . . away from your life. . . to the gods of education
work at it all for years (three, four, five or more) before hopefully graduating?

I hold no grudge against those who get their education from accelerated, on-line or non-traditional degree programs. I myself participate in evening school, which is a kind of non-traditional program in and of itself. I wish everyone a degree and a promotion. Two degrees, if it'll help.

I myself am not footing the bill for the lion’s share of my educational expenses, so I am perhaps missing out on the sacrificial benefit to be had from the financial struggle.

But I know that if I ever finish the degree I'm pursuing (which is continually in question), I'll enjoy a tremendous sense of accomplishment, looking back at the countless days, weeks, months and years spent in pursuit. And I'll look back over the likely seven or eight years of toil and struggle as being well worth it. I wonder about the jiffy-pop graduates.

I Don’t Think That Means What You Think It Means

2007-12-06T13:03:00.000-08:00

Here in December of 2007, it is difficult not to hear and read about the burgeoning subprime crisis. This perfect fiscal subprime storm has led to startlingly high default rates on home mortgages. Subprime loans were issued back when the real estate market was fat, dumb and happy, and those subprime loans are now bearing rotten fruit.

Subprime, subprime, subprime!

It's semantics, I know, but it still bugs me. I’d guess that most folks believe that “subprime” refers to the interest rates of these loans. “Sub” means below, obviously. And “prime” clearly must refer to the mythical prime rate. So it must be that really low (subprime) loans were issued to people, getting them into loans they couldn’t afford once those rates adjusted, right?

Wrong. Within the mortgage industry, it is the borrower that the term “subprime” modifies. . . borrowers whose credit scores (generally below 620 or so) are so low, or whose debt-to-income ratios are so high as to make them unqualified to receive traditional loans at decent rates.

“Subprime” does not speak to the rates involved in the loans themselves. In a quirk of language, subprime loans are typically loans issued significantly above standard rates because the borrowers are unqualified for traditional, more favorable loans. Adjustable rates, balloon payments and other monkey business are common secondary characteristics of such loans.

Over time, media reports will continue to screw this up. Reports written by very knowledgeable financial experts and published in respectable outlets will be less than clear in the language they use. And fewer and fewer people will realize that “subprime” refers to the condition of the borrower and not to the loan rates themselves.

How To Help, or To Help at All?

2007-11-21T12:24:00.000-08:00

I was parked in a McDonald's drive-thru in downtown St. Louis on November 20. A man walks up to my car window wearing worn clothing and broken down shoes. He motioned to his ear, mouthed something and handed me a crumpled note.

Without even reading the note, I already know what it will say: It'll say "I’m deaf and unable to speak, I’m homeless and without money, and I need just a few dollars to get [somewhere] where I can get help."

I know all of the cynical arguments for not giving this guy any money. "Any money you give him will just be used to buy drugs or alcohol," the cynics say. "He’s probably just faking being deaf as part of his scam anyway. He looks able-bodied enough to earn his own money. People shouldn’t have to endure being shaken down for money and made to feel guilty in a drive-thru lane."

I also know the caring, well-reasoned and well-meaning arguments for not giving this guy any money. Many experts argue that giving food or money to homeless individuals discourages them from going to shelters and charity centers where life-saving services are available. And getting the poor and homeless into contact with these vital sevices and selfless servants is the one proven way to affect positive outcomes for these individuals who almost universally have mental health issues, substance abuse issues or both.

So I know what the experts and the cynics say I shouldn't do. But I also know what some other pretty respectable folks say I (and we all) should do:

There are those who say to the poor that they seem to look to be in such good health: "You are so lazy! You could work. You are young. You have strong arms."

You don't know that it is God's pleasure for this poor person to go to you and ask for a handout. You show yourself as speaking against the will of God.

There are some who say: "Oh, how badly he uses it!"

May he do whatever he wants with it! The poor will be judged on the use they have made of their alms, and you will be judged on the very alms that you could have given but haven't.
St. John Vianney

I can safely dismiss the cynics who say the homeless aren't worthy of help; that's just not me. But how do I (or any of us) balance the discrepancy between what the intellectual and spiritual experts say we should do to help?

Downhill Travel

2007-10-23T12:13:00.001-07:00

Recent events have allowed me the opportunity to solidify my thoughts on a subject I have been noodling with for years. I have a hypothesis (an hypothesis?) about something that I think could be tested, if such testing hasn't already occurred. Simply put, that hypothesis is:

People are willing to drive greater distances in a north-south orientation than they are willing to drive in an east-west orientation.

Every time the possibility of a trip arises in someone’s life, some mental gymnastics are done to determine whether to drive or fly. Time availability is obviously a deciding factor; if you have to be somewhere in a few hours or overnight, flying is really the only option. Cost is also definitely part of the equation; if you don’t have the means to fly, or if you can’t afford a rental car once you get there, then driving is really the only option. Lots of other factors also come in to play, but that’s not what I’m really talking about here.

If you control for the influence of time, cost, and the host of other variables that go into such a decision, I contend that people are more willing to accept long driving trips if those trips are generally oriented in a north/south direction.

You live in Chicago and want to go to Orlando? It’s only 1100 miles. Let’s drive it.

You live in Chicago and want to go to New York? Man, that’s almost 800 miles! Who in their right mind would drive that?

Some folks are natural-born drivers and will drive anywhere, no matter what the distance.
Some folks hate driving and fly everywhere
As a group, young people are generally more willing to drive long distances than are older people.
Some people are deathly afraid of flying and will never get on a plane.
Some older folks retire early and drive non stop for years at a time.
Folks with many children tend to lean toward driving both to mitigate travel cost and to avoid hassles.

You could of course go on and on with such a list of weighted trends and demographic variances. But I really do think that, for those on the fence, when all other influencing factors are removed from the equation, driving north/south is seen as more desirable than driving east/west.

I once had a grown man look me straight in the eye and swear that north “is always up.” And he meant “up,” folks. As in uphill. North to him was always up, and traveling south was always traveling downhill. Maybe that’s what’s going on here. Maybe people are okay with driving downhill for a vacation, accepting the fact that they’ll have to drive uphill on the way home. And maybe people are okay with driving uphill to start a trip, knowing that the return will be an easy downhill jog.

Or maybe people are subconsciously (or consciously) more willing to drive on trips that won't cross time zones and screw up their internal clocks.

Could this phenomenon be studied? Sure. I can think of several measurement instruments that could be used to reliably measure this phenomenon and control for the aforementioned variables. I think a researcher could reasonably arrive at a conclusion as to what influence direction of travel has on an individual’s tendency to choose driving over flying (or vice versa).

But who would pay for such a study? Hmmm. . .

I might have to look into that.

Men Can Be Led. . .

2007-09-11T11:18:00.000-07:00

George Will continues to say well and concisely what others cannot or will not. As he pointed out in a recent article about the current state of intellectual capital and capacity in our United States military:

"Officers studying at the Army War College walk the ground at nearby Gettysburg where Pickett's men walked across an open field under fire. They wonder: How did Confederate officers get men to do that? The lesson: men can be led to places they cannot be sent."

I do not doubt that Will was inspired by or informed directly by military doctrinal writing as he turned this particular phrase. Irrespective of the source of the notion, though, I credit Will for bringing such a verbal gem to me.

Men can be led to places they cannot be sent.

Tremendous.

Plexus

2007-09-08T08:45:00.000-07:00

As I was reading Lewis Mumford’s 1937 essay entitled “What is a City?” I stumbled onto a gem of a “new” word that I’d love to be able to incorporate into my working vocabulary.

Plexus
1 : a network of anastomosing or interlacing blood vessels or nerves
2 : an interwoven combination of parts or elements in a structure or system

In this essay, Mumford explores (as the editors state) what he saw back then as the "fundamental propositions about city planning and the human potential, both individual and social, of urban life."

Mumford posits that city’s primary purpose might really be best defined as “a geographical plexus, an economic organization, an institutional process, a theater of social action, and an aesthetic symbol of collective unity.”

Outstanding! I don't agree with Mumford's theories about the need to place limits on the geographical size, density and overall population of cities to maximize the benefits derived from social intercourse while minimizing the negative externalities that higher-than-desirable densities and a sprawling geography bring. But I do know that I dig his use of the word "plexus."

From this point on I will always know what the word "plexus" means, but I hope I can take that a step further and firmly place the word into my verbal toolbox for use whenever I need it.

I like it.

Plexus.

Mortgage Crisis - Why Now?

2007-09-07T09:55:00.000-07:00

We hear about the mortgage crisis going on and see reports of families losing their homes, home prices plummeting, and huge lending institutions going belly up.

But what. has. truly. caused. this. problem?

It is a complicated situation, but the root cause is fundamentally simple, in my opinion. Between about 2000 and 2007, a once-conservative lending industry stepped over the line and turned predatory because it was easy and profitable to do so. Fiscal restraint was eroded by historically low interest rates, a reasonably sound economy and little oversight. Ravenous lenders lost their fear of bad loans the way bears lose their fear of humans when garbage is plentiful.

The tools that facilitated this travesty are not new to the lending industry; what is new is how irresponsibly these tools were used.

Adjustable Rate Mortgages
Traditionally, ARMswere used to give qualified home buyers an initial respite from a fully-loaded mortgage payment for the first three to five years that they owned a home. Buyers were made to understand that the loan’s rate was adjustable and that it would eventually reset to a higher rate, at which time they’d be paying what everyone else was paying, or a little more. Such loans were used sparingly because they offered borrowers less security than a fixed-rate loan.

In the cash-induced haze of 2000 – 2006, though, lenders began to push ARM loans not as a way to save a little money early on with a mortgage, but as a way to squeeze buyers into homes they could not afford with a fixed-rate loan. Reasonable people with good credit were being put into loans they could barely afford at the outset, with little consideration being given to what the rate might adjust to three our five years later. Hope springing eternal as it always does, these otherwise reasonable, realistic borrowers allowed their desire for a new home to blind them to the likelihood that their barely affordable house payment in 2002 would become utterly unaffordable in 2007 when the adjustable nature of their mortgage kicked in.

Sub Prime Lending
Traditionally, when considering who should be qualified for a loan, lenders took very seriously such key variables as income, employment history and credit score. As lending morays became more liberal over time, people with poor credit and little or no employment history ceased being seen by lenders as customers to avoid and became instead a desirable new customer base. Desperate borrowers with no justifiable reason to believe they should be allowed to borrow $200,000 with little or no cash in-hand and a disastrous credit history were suddenly being bombarded with promises that they too would be approved for a home loan. . . guaranteed! Lenders saw the opportunity to use their customers’ poor credit histories as a means to push them into loans that were more profitable up front for the lenders. These loans to sub prime cost the already disadvantaged borrowers a fortune in higher interest rates, shorter fixed periods (for ARMs), murderously high reset rates and embedded balloon payments that virtually guaranteed that the loans would be defaulted on in the long run. Yet some estimates are that more than 20% of all loans made in the early part of the 21st century were loans to sub prime borrowers.

Interest-Only and Negative or Reverse Amortization Loans
At the height of this lending inebriation, lending tools that had long been considered too risky for use by the general public had somehow come to be seen as additional tools that lenders could use to attract and sign new borrowers. Lenders had become skilled at convincing borrowers that an interest-only loan-- a loan that requires the borrower to only pay the interest on the loan each month-- would somehow save them money. They pushed these loan vehicles while underplaying the fact that the principle of a loan structured in this way remained undiminished month after month and would require payment in full eventually.

For others, an interest-only loan didn't go far enough to bring the monthly payment for the house of their dreams into range. For those seeking even lower monthly payments or more expensive homes, lenders began pushing negative or reverse amortization loans. . . loans structured so that the borrower pays no principle and only a portion of the interest each month, with the principle owed continuing to increase over time. These loans of course can only allow such a free ride for a short period of time (typically five years) and reset or "recast" to a regular schedule if the principle amount exceeds a preset limit. Such pesky details held little interest for the folks selling and buying such loans when money was cheap and easy.

Again, the fact that the principle owed remains constant or continues to grow with such unconventionalloans was seen as an incidental nuisance. With home values rising by tens of thousands of dollars each year, no one had the time or inclination to worry about something as trivial as ever expanding debt loads.

Housing Prices
With the influx of this cheap money into the real estate market during the boom around 2000, real estate prices inevitably began to inflate. It soon came to be expected that a new home buyer of a $150,000 home could sell his home two or three years later for $30,000 more than he had paid. Across the country, home values increased on average somewhere near $800 per month. . . month after month, year after year. This, coupled with extremely low interest rates, made the temptation for homeowners to buy, sell, and upgrade nearly irresistible.

Home Equity Lending
Another byproduct of inflated home values and low interest rates was the explosion of home equity lending. At its height, seemingly every other radio commercial showed lenders telling listeners how easily they could get the equity out of their homes for vacations, college tuition, home improvements, or credit card debt consolidation. And Americans ate it up, trading equity in their homes for vacations, luxury spending and the consolidation of credit card debt. This conversion of unsecured credit card debt to secured loans against their homes is perhaps more responsible than any other single dynamic for the spiraling debt load that Americans carry today.

Summary
When things were good, they were very good for home buyers. The rules of the game were simple; get into as much house as you can finagleand tread water for a few years. After just a few years, you'll have a ton of found equity that you wouldn't otherwise have. And instead of throwing money away on rent, you'll pay the same money in interest on mortgage and get 30 percent of it back on your taxes at year-end via the Mortgage Interest Deduction.

So what has happened now to bring all of this to a head? These loans and practices have been going on for years now. Why is this blowing up now? While there are many dynamics at play here, these are what I believe to be the most important and influential contributing factors to the current state of the industry.

Cause 1: Interest rates are trending upward. While still relatively low, rates are considerably higher than they were in 2003 at the height (or depth) of the bacchanalia, when a reasonably-qualified applicant could secure a 30 year fixed rate mortgage for 5.25% with no points. The adjustable rate mortgages made throughout the first half of this decade are now adjusting upward and driving some owners to default.

Cause 2: Sub prime borrowers, who were known by all to be poor credit risks from the outset, are now defaulting on loans of all types (not just ARMs) as everyone knew—our should have known—that they would. Bad loans go bad, to no one’s surprise.

Cause 3: Lenders are becoming more cautious with their lending. Higher lending standards necessarily increase the scarcity of money available for home purchases, which subsequently drives down home prices nation-wide and (eventually) crashes new home sales and construction starts as sellers and builders compete for fewer buyers.

Cause 4: Corrections in home pricing, combined with the trend in home equity spending are resulting in people becoming equity-poor in their homes. Owners who spent most or all of their home’s equity on consumer debt and vacations are now finding that their houses aren’t nearly as much as they once were. Even as their payments rise to a point where borrowers find it difficult or impossible to make the payments each month, these same borrowers are finding that their lack of equity makes it that much more difficult to refinance or sell their home. And this in turn drives up defaults and reduces the turnover rate of existing homes, depleting the buyer base and driving home costs down even further.

Okay. It's well and good to point the finger at lenders and blame them for this crisis. But isn’t the borrower responsible for this mess too? After all, they’re the ones who can’t pay their bills, right?

Absolutely. A significant portion of the blame rests squarely in the laps of the borrowers. The American dream has evolved in the twenty first century to demand a level of luxury that is effectively unattainable for most. Americans, by and large, save nothing and spend more than they earn. We are inherently unwilling to settle for less than our peers, and the abstract nature of monetary dynamics are such that a little denial goes a long way in enabling people to get into trouble. After all, next month will always be better than this month, right? And the credit card bill won’t be that high, really.

So the borrowers are at fault. But I argue that lenders and investors bear the lion’s share of the blame for this current debacle. Highly sophisticated lending and investment firms with all of the marketing power that money can buy have targeted an industry that is challenging for even the most sophisticated customers to navigate. These lenders have directed much of their influence toward selling harmful and destructive loans to the members of our communities who are least well equipped to see the danger inherent in those loans or understand the long-term implications of the agreements they were signing. Hard-working people of limited means were misled to believe that the loans they were agreeing to would better secure their future.

Instead, the bubble burst and those who were most at risk are now being destroyed. And the irresponsible lenders are already seeking a bail out by the government that could make the Savings and Loan debacle of the 1980s look trivial by comparison.

Manpower Limited

2007-09-03T17:39:00.000-07:00

My family and I took a weekend vacation over the Labor Day holiday to a somewhat unusual destination that set my mind wondering about labor availability and manpower issues. The resort will remain unnamed here, since some of my comments could be construed as less than flattering to the town and to the region. I truly mean no disrespect to any of the people who were kind enough to serve us this weekend and would not want to cause any pain with my comments.

The area to which we traveled was rural. I mean really rural. As in 25 or 30 miles between gas stations on the interstate, rural. The resort was part of a nearly one hundred million dollar restoration of a historic landmark, and it represents a recent influx of that much cash into what was until just a few years ago a small local economy with no tourism or industry to speak of.

The facilities were lavish, and the amenities were top notch. Travertine tile, marble, stone, rich woods and fine brass shone everywhere.

But everything was a little bit off. The dining room couldn’t manage its waiting guests well. The front desk’s processes made it awkward for folks with lots of luggage to check out without having to haul their bags to three different locations. The valet drivers didn’t know where to park your car or how to gracefully accept a tip as they ushered you into your vehicle. The pool attendant was overly concerned about counting the resort’s towels. And everyone was slow, slow, slow.

My wife noticed this same sense of “off-ness” independent of my own observations. When I asked her why she thought the service available at this resort seemed incongruously bad compared to the lavishness of the surroundings themselves, she posited the reasonable theory that the resort's management likely has difficulty laying in a sufficient supply of high-performing employees because they must necessarily draw from the limited labor pool of the area.

Perhaps exposing my tendency to believe that there’s always one person somewhere who is at fault for every failure, I blame the management more than I blame the labor base in the area. The services we’re talking about here are skills that can be taught. They are not esoteric skills that require employees to come to the hotel already highly skilled. Service received equals service demanded by management, I say.

So in my book, it is management’s fault, and they’ll either work out the kinks in their service provision or they won’t. But this raises an issue worth further consideration in my mind. If my wife’s theory is even partially true (which I think it is) and the owners of this resort really can’t find enough good workers, then they may have made a multi-million dollar blunder by not considering whether or not they could adequately staff this luxury-laden behemoth they’ve built. Patrons of such a costly resort simply will not tolerate the level of service currently being proffered there.

Is it possible they were so myopic in their planning as to believe that they could just cram anyone into those positions and everything would work out for the best?

Don’t they know how picky I am?

Vulnerability

2007-08-29T07:01:00.001-07:00

I got to thinking about physical vulnerability recently. None of us is comfortable with the idea of being vulnerable, and we like to think that our lives are structured in such a way that we have wisely limited or eliminated any real vulnerabilities from our comfortable lives.

Sleep is a problem, though. Having to sleep about eight hours a day makes us amazingly vulnerable. It’s startling in its significance, really. For eight hours a day (give or take), we willingly (and often blissfully) fall unconscious and lay prone and motionless, vulnerable to any bad thing that might befall us.

Sleep is a biological imperative and it is inescapable. In the wild, animals compensate for their need to sleep in very dangerous circumstances in a variety of ways. They sleep lightly, ready to react quickly. They sleep in dens, caves and holes to better conceal themselves and to limit the avenues from which they could be attacked. Some sleep in groups, using their peers as a means for widening their sensory nets, thereby increasing their odds of survival.

Humans do it differently. We don’t hide. It’s really no mystery to anyone where we will be when we are sleeping. And we don’t sleep in proximity to large groups of people as a means of safety; many humans sleep alone, and those who sleep in close proximity to many others likely wish that were not the case.

Every night, as predictably as clockwork, we go to the same rooms in our houses, turn off the lights, and go unconscious. To compensate for the conspicuous and isolated way in which most of us sleep, we put in place other protections.

We build walls and doors with locks to make a surprise attack by predators a difficult and noisy proposition.

We install lights and bars and alarm system stickers on our windows to discourage predators from picking us as their prey, hoping that they’ll attack someone who is less protected.

We buy guns and strategically place baseball bats and golf clubs near our beds, convincing ourselves that those tools will be helpful if a predator decides to disregard our perimeter defenses.

We pass laws that empower us to protect ourselves in our homes, and others that make attacking us in our sleep punishable by (hopefully) lengthy incarceration.

But fundamentally, despite our preparations, we still choose to collapse into unconsciousness every night, with no one standing guard. Our children are asleep in another room, equally vulnerable if not more so.

It is a tribute to the safety of our society that we as rational human beings feel justified in simply turning off like that, reasonably sure that we’ll be just fine. But this willingness to sleep relatively unprotected also represents a huge gamble and assumption on our part.

We simply assume that no one will make his way through our neighborhood slaughtering families in their sleep. We believe this because such a thing has not happened to us or our relatives. But we have no real guarantees.

We accept the risk. Or perhaps we choose to believe the risk does not exist.

Maybe Not So Sarkozy

2007-08-27T13:26:00.001-07:00

To hear many in the US media tell it, France’s newly elected President Nicolas Sarkozy is the anti-Chirac— fiscally conservative, more America-friendly, and not one to hold truck with much of the socialist nanny-state mentality of his predecessors. Conservatives are often giddy at the idea of a French president they don't have to hate, and liberals are openly cautious about a new French president who can't be assumed to hate his US counterpart.

In his latest article, George Will raises some intriguing points about how Sarkozy came to be elected and how (if at all) he is likely to differ from Chirac and other previous presidents with regard to his social and fiscal policies. Will has written about Sarkozy’s less-than-conservative realities in the past, and usual, Will says eloquently in this new article what I would butcher, were I try to attempt to convey something similar.

As Will states:

“Sarkozy has. . . said ‘I don't wake up every morning asking what Hayek or Adam Smith would have done.’ That is, unfortunately, obvious. A fountain of suspiciously opaque formulations (he advocates ‘regulated liberalism’ and ‘humane globalization), he is pleased that "the word 'protection' is no longer taboo.’ (When was it ever taboo in France?) He is committed to continuing protections of the most cosseted French faction, the farmers. When calling for a ‘genuine European industrial policy, he asks: ‘Competition as an ideology, as a dogma, what has it done for Europe?’ Worse, he wants to curtail the independence of — that is, politicize — the one institution that can save France from itself, the European Central Bank, which can restrain France's ruinous preferences for a loose monetary policy and inflation as slow-motion repudiation of debt.”

Given these, Sarkozy’s own words about what he believes and proposes, are we still to believe his billing as a regular neo-conservative capitalist who actually understands Western market economics and is willing to let his people know that he believes in what he knows.

Perhaps the best of Will’s observations about Sarkozy and his ascension to the French presidency is this: “Sarkozy's socialist opponent, Segolene Royal, a princess of vagueness, won 47 percent of the vote for, essentially, "resistance." Remarkably, she defeated Sarkozy among voters ages 18 to 59 — the working population. It does not bode well for reform that he won by winning huge majorities among those most dependent on the welfare state — 61 percent among those 60 to 69, and 68 percent among those over 70.”

Elected by his overwhelming popularity among those dependent upon France’s welfare policies, a proponent of “regulated liberalism,” and one clearly disdains the uncertainties of competition, Sarkozy is certainly less easily labeled “conservative” and “America-friendly” as the press might have us believe.

Unintended Consequences

2007-08-22T12:23:00.000-07:00

The best argument a libertarian can ever make for abolishing the institutions that inflict policies on the citizenry at the local, state and federal level is this: policy makers are routinely surprised by the unforeseen consequences of their bright ideas, and if they don’t know for sure what the result of their policy decisions will be, then they should just lay off.

I can’t really refute that argument. History is replete with examples of such unforeseen outcomes to seemingly straight-forward policy interventions. The New Deal. Relief, Recovery and Reform. Create jobs and change US economic policies to help and protect folks. It’s a slam dunk, right? Wrong.

There are certainly many who are quite fond of the programs that came out of that deal (Social Security, Public Works Programs, Fair Labor Standards Act, etc.). But depending on whom you choose to believe, the New Deal may very well have also deepened the very depression it was trying to resolve and postponed the recovery it was designed to bring about.

Ideas about policy changes are thrown around with abandon, with few experts willing to acknowledge the possibility that the effects of their proposed policies might not be limited to the ones they’ve enumerated.

Some examples. Mandatory life in prison without parole for thrice-convicted drug dealers or child molesters. Outstanding, one might think. Who could argue against such a thing? We all want to protect the kids, right? Lock up the bad guys forever.

But maybe it’s not so clear cut. Maybe. . . just maybe. . . if a third conviction for selling drugs or molesting a child brings with it a mandatory life sentence, the following might be the result:

A sister who sees her brother molesting their little cousin might decide not to report the crime because, while she wants to stop the abuse, she can’t bring herself to be the one responsible for putting her brother away for life.

A district attorney might be reluctant to indict a twice-convicted individual on new drug charges if the individual is found in possession of a relatively small amount of contraband; the DA might be unwilling to send a guy away for life for what seems to be a relatively minor offense.

A jury might be more likely to become deadlocked on a seemingly clear-cut molestation or drug possession case not because the defendant’s guilt is in question, but because some jury members might be unwilling to put a man away forever for molestation or drug possession.

And perhaps the most frightening unintended consequence of mandatory life sentences for child molesters (or anyone but murderers).

A child molester sits back and considers what he has done, trying to decide how or even if he should release his victim. If he knows that what he has just done will guarantee him life in prison without parole if he’s caught, and if he knows that the punishment would be the same even if he’s convicted of murder. . . he may decide it best not to leave any witnesses alive at all.

So mandatory sentencing might just result in fewer crimes being reported, fewer indictments, fewer convictions and (God forbid) the murder of some victims that might otherwise have been left alive.

As for mandatory sentencing. . . we have to maintain a reasonable sentencing continuum ranging from traffic tickets to life in prison without parole or capital punishment (depending on your preference). Taking a life must bring with it the maximum penalty, and lesser crimes, no matter how heinous, must bring with them lesser punishments. To break this continuum means. . . well I'm not sure what it means.

And as for unintended consequences. . . they’re here to stay. Policy makers must tread carefully and drop their unjustified certainty in the outcome of their proposed policies.