Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts

If You Can Imagine It...

... you can not only find it on teh intarwebz, you can find it for sale!  Witness: Plush Organs.  Pictured bellow, a plush gallbladder.



We ordered one for a friend who recently found herself gallbladderless.  Never know when you might need a spare gallbladder, you know.  Even if it is just a plush.


A Question

An old though, prompted by this article in the NYT:
Holly Leonard has been homeless on and off for years. There was a stint in jail and, more recently, a period in a women’s homeless shelter, while her husband slept in their car.
But last month, the two moved into a one-bedroom apartment in San Jose, Calif., complete with a small garden. Ms. Leonard found it on Craigslist while using her Nexus 5 smartphone — a donation from Google that she got from a San Jose nonprofit called Community Technology Alliance.
“People don’t put out ‘for rent’ signs anymore, so the Internet is the best way,” Ms. Leonard said. “You can’t even go get a paper application for a lot of things. You can’t get a job unless you get online.
“Before I got a free phone, it was like you’re almost nonexistent.”
The smartphone giveaway program, though small, typifies the way Bay Area tech companies have started to respond to the glaring homelessness problem right outside their luxurious company campuses: not by donating clothes or serving food, but by using technology.
Now, here's the thing.  While I might take issue with the idea of a government agency doing this, that is based on the premise that government should not be taking money by force from one set of people and giving it to another group without a compelling reason.  In my mind, keeping someone alive (food, shelter, clothing) meets that standard; providing smart phones, no matter how useful, does not.

That said, I do not have any problem at all with the idea that Google or a non-profit organization is doing exactly that.  I think it is commendable in this case; they are taking their money (or, money given to them voluntarily) and using it in a way that they think helps them meet the needs of others. If they believe that buying smart phones for the homeless is the way to go, I would not only say "more power to them", I would absolutely agree. A smart phone, as the article points out, is a game changer.  It gives people not only the chance to survive, but the ability to improve their lot and prosper.

Now, here is a scenario for you to consider.

Suppose that another individual - Joe - and I are discussing this issue.  Joe and I both happen to think that providing smart phones to those less fortunate is a Good Thing.  We disagree on how this should be accomplished, though.

Joe favors the idea of a government program to provide smart phones for the less fortunate.  What level of government we are talking about does not really matter to him.  He thinks that there is a compelling interest in such a program, and that the government should spend up to $X a year supporting such a program.

I point out to Joe that there are already private organizations - Google and the CTA, for example - that are doing exactly that.  I think there are obvious advantages to having a private organization continue to do this type of work, and would rather see their efforts encouraged and expanded upon. To that end, I propose that instead of the government spending up to $X a year supporting a smart phone program, they could instead offer $X a year in tax credits to those who make contributions to existing programs.

Why a tax credit instead of a tax deduction?  A credit is a 1:1 reduction in the amount of taxes owed, which is a much stronger encouragement that a deduction.  More importantly, it makes the amount of spending in each case identical.  Either individuals are making $X a year in contributions to these programs, or the government is taking $X a year and using it to fund their own, equivalent program.

There are two major differences in these competing proposals.  One is the reliability of funding.  Joe can argue that a government program will generally be fully funded, while a program of voluntary contributions may fall short of the desired funding.  US charitable giving ran to over $316 billion in 2012, though.  I think it is safe to say that if there is private funding to be had, these types of programs will be able to find it.

The other difference is who is in control.  In Joe's proposal, control of the funding and the program resides with the government.  In my proposal, control of the function and the program excludes the government.

Here is the question: all other things being equal, why would an individual choose one proposal over the other?

I suspect that there are a number of folks out there who honestly want to help the less fortunate, and would be happy if either proposal was implemented.  If $X a year is going to be spent on smart phones, the important thing is that $X a year is spent - not who has control of the program and the spending.

I also suspect that there are a number of people who would fight, tooth and nail, to see that one proposal or another was accepted, because for them, the issue is not whether or not homeless people get cell phones, but who gets control.






Being The Friendly Chap That I Am

I came across a really interesting article about Israel: their start-up culture, and how that is influencing and strengthening their growing relationships with China, India and other non-Western countries.

When I tried to pull a quote from the article, though, some javascript snippet asked me if I wanted to license the content.

License. The content.

So sorry, no.

I wanted to exercise fair use, quote enough of the article to give it some context, and then direct readers to your web site. Which would have increased your page views, perhaps provided a small bump in your revenue stream, and possibly gotten you some new readers.

But apparently you're not interested in that. Being the friendly chap that I am, I will honor your unstated wish to become an abject failure, and ignore you.

*plonk*

Regcession

From Adroit Films comes "Regcession: How The EPA Is Destroying America":
The documentary makes clear that the Green Movement is a "big business" not a "big cause".  
It is not only a big business for those directly involved in the Green Movement like solar and wind companies but it is also big business for the media;  the politicians, their friends and their families;  foreign countries;  multi-national corporations (many of which brand themselves as American companies); and even American colleges and universities.  
The use of the word regcession in this essay and in the documentary is not a mistake or a misspelling.  It is a word we have created in an attempt to brand the economic decline in America as what it really is.  America's economic decline is not a cyclical recession as the government would have us believe, but rather a 24 year reduction in American manufacturing jobs caused by excessive regulations.   We know we are not experiencing a recession because recessions do not last for 24 years and they do not put countries 17 trillion dollars in debt.  Ironically, not only are excessive nonsensical Environmental Protection Agency regulations bankrupting America and American citizens, they are also increasing worldwide pollution.  All of this is occurring as the politicians hide the truth by producing flawed and misleading unemployment statistics, and by moving millions of Americans on to government assistance and out of the workforce.
 

Tesla's Problem

A while back, I did a quick, back of the envelope calculation comparing a Tesla Model S to a Toyota Corolla, and figured that the Model S would have to come down in price - a lot - in order to compete purely on cost over a five year period. [1]  The price of a Tesla really only makes sense if it costs about $12,000 more than a Corolla.  (Interestingly enough, that is the reported cost of a Model S battery pack.)  That works out to about $30,000.

In other words, once I can buy a Tesla for 30 grand, it will become a worth looking at as a possible worthwhile investment for me.  Depending on the expected life of the car, and the price of gasoline, it might even be worth it at a higher price point.

So I've been keeping an eye on the Tesla Model 3, which was supposed to approach this price range.  Current opinion, however, seem to be that the price will end up in the $50,000 range.

I am sure you can see the problem.  I might, someday, be interested in buying an electric car.  I doubt that there will ever be a day when I would be particularly interested in buying a luxury car that happens to be electric.

A shame, really, since they seem like such interesting cars.  Unless something changes, though, it looks like there is no Tesla in the near future for me.  Well... no new Tesla.  I will have to wait and see how well they hold their value.  It may be that a used Model 3 with a good usable lifespan might fall into the "worth considering" range.

[1] Rough figures: $62k for a Tesla Model S, $18k for a Toyota Corolla that gets 27 MPG.  If you take the difference in price ($44k) and put gasoline at $4/gallon, the Corolla can go 297k miles on $44k worth of gas.  At 15k miles/year, that is almost 20 years worth of gasoline for your Corolla.  With that price differential, you can by a new Corolla, drive it for five years, then buy another Corolla, drive it for another five years, and still spend less than you would on the Model S.  Keep in mind that is without considering the charging costs for the Model S at all.

“So comes snow after fire..."

"... and even dragons have their ending.” - J. R. R. Tolkien

China is braced for a wave of industrial bankruptcies as its slowing economy forces companies with sky-high debts to the wall, the country's premier has said. 
Premier Li Keqiang told lenders to China's private sector factories they should expect debt defaults as the world's second largest economy encounters "serious challenges" in the year ahead. 
However, figures this week revealed that Beijing is copying the Japanese tactic of ramping up public infrastructure spending to replace the steep slowdown in private sector investment. Fixed asset investment, a measure of government spending on infrastructure, expanded 17.9% during the first two months of 2014, the National Bureau of Statistics said.
As Peter Grant has pointed out, there is more to the story than just a few insolvent companies in China.    He has a much more detailed write up on the high points of the current situation that is well worth reading, if you have the time.  If you don't... well, the tl;dr summary is, as he puts it, "the signs don't look healthy".

We live in interesting times.

Rube Goldberg Would Have Been Proud

Responding to inquiries about a possible data breach involving customer credit and debit card information, upscale retailer Neiman Marcus acknowledged today that it is working with the U.S. Secret Service to investigate a hacker break-in that has exposed an unknown number of customer cards.
We're at a crisis point now with regard to the security of embedded systems, where computing is embedded into the hardware itself -- as with the Internet of Things. These embedded computers are riddled with vulnerabilities, and there's no good way to patch them.
Thousands of small satellite dish-based computer systems that transmit often-sensitive data from far flung locations worldwide – oil rigs, ships at sea, banks, and even power grid substations – are at high risk of being hacked, including many in the United States, a new cyber-security report has found.
Researchers have found vulnerabilities in industrial control systems that they say grant full control of systems running energy, chemical and transportation systems.
It's obviously a hacking report monday.  Do you use credit/debit cards?  Do you have a satellite dish system or a wireless router?  Do you use electricity?

Then you're vulnerable.

Young'uns... if you're thinking about going into CS/IT, give a thought to specializing in network security.  We're starting to realize that our computing infrastructure is in a horrible, awful, no-good state, and someone is going to end up getting paid the big bucks to fix this mess. (Now, where have I heard that before?)

It might as well be you.

50k and Counting

Last year, more than 30,000 winter deaths were thought to be caused by fuel poverty, up by a third from the previous year, according to the Office for National Statistics. - http://www.eenews.net/stories/1059992359
Across Europe, low income residents are being sacrificed to the Green Gods of Faux Environmentalism. Increasing numbers die in winter, unable to heat their cold dark homes — while fat green government and EU officials and cronies pat each other on the back in congratulations for pushing the penetration of the intermittent unreliables big wind/solar to more and more destructive heights.
Twenty-two thousand in 2012. Thirty thousand in 2013.

Still, you know - you can't make an omelet without breaking a few eggs.  Amirite?  Besides, these were poor people.  They probably lived miserable lives and had sub-standard health insurance and stuff.  It's not like they had anything to contribute to society, after all.  Just dead wood, really.

If you haven't noticed it already, environmentalists hate poor people.  After all, it's not like they matter... in non-election years, anyways.

Besides, when you get right down to it, fifty thousand dead peons is just a rounding error in the ongoing environmentalist death toll.

"Ye cannae change the laws o' physics!"

Nor can liberals avoid the consequences of Quinn's First Law:
Liberalism always generates the exact opposite of its stated intent.
Just some recent examples:
  • Obamacare will reduce emergency room usage!  Not so much.
  • Well... at least it will let more people get insurance coverage!  Bzzzzt, try again.
  • Anti-bullying programs reduce bullying!  Oh, really?
  • Gun ownership leads to gun violence!  Yeah, right.
  • Avoiding new pipelines will limit environmental damage!  Or not.
I swear, it's like a shooting fish in a barrel.


Testing Ignorance, or Misinformation?

In the 1990s, a professor at a medical university in Stockholm decided to test his students' knowledge about the progress of global development. He was staggered to discover the class, some of the brightest people in Sweden, scored fewer than two out of five on average.
Chimpanzees randomly choosing answers would likely have done better, scoring half right....
Rosling has been on a mission to inform since the realization that his students -- and his fellow professors -- were somewhat woefully informed about the state of the world. Today CNN publishes Rosling's latest survey of the United States which shows Americans, like most of the world, are far behind the reality in their understanding of world development but ahead of some -- for example, Swedes.
This ten-question test is - reportedly - harder than most.  I did not think it was particularly difficult.  I knew the answers to a couple of questions, which helped.  When I had to guess, I based my answer on two assumptions:
  1. Reality does not have a "liberal bias", and
  2. The mainstream media absolutely does have a liberal bias.
Go ahead - read the article, then click on the image at the top of the page to take the test yourself.  Keep the above two bits of information in mind, and I think you will quite easily end up in the coveted "top 1%" spot.

QOTD

From Jeff M. on Facebook, commenting on the increasing evidence that what we are looking at in the coming decades is global cooling, not global warming:
The Paul Ehrlich types moved seamlessly from global cooling to global warming. I'm sure they can move back again, as long as the solution is massive suffering and poverty. Cause history begins this morning.

Life and Lemons

You know, lots of folks seem to be focusing on the 800k "unnecessary" employees furloughed.  On how amazing it is that the government has this many non-essential employees, what good they are, what they actually do, etc., etc.

I've got a few thoughts about the situation.

First, keep in mind that "non-essential" does not neccesarily mean "useless".  Just because Sally or Bob got furloughed, that does not mean that the job they were doing had zero value.  What it does mean (at least, ideally) is that the job they were doing was something that could be postponed for a while.

Think about it this way - there are many different kinds of inspections, reviews, audits, and the like that various agencies are responsible for.  If the shutdown only lasts for a week or two, their work schedule gets pushed out a couple of weeks.  Yearly inspections that should have been done this month get done Job next month.  If your job involved you being part of a multi-year or even decade-long process that can be put on hold for a bit without any serious consequences... well, welcome to an unpaid vacation of indeterminate length.

So a lot of these folks are not useless employees; they're employees who's work can be easily suspended for a while.  Yes, I am sure that there are some functionally useless federal employees that got furloughed.  Just as I am sure that there are some functionally useless useless federal employees that are still managing to collect a paycheck. Despite that, a lot of them are simply people who were doing useful, but not urgent, work.  Work that the federal government just can't pay for at the moment.

Now that you have that thought in mind - that "furloughed" does not mean "useless" - try looking at it this way.  As of Tuesday, there are nearly a million people who are at least temporarily out of work.  A lot of these folks are highly-educated, well-trained and experienced individuals who also happen to have a lot of experience with how the federal government does business.

And right now, they are getting seriously screwed over by their current employer.

How many of them do you think might - just might - be interested to hear about opportunities in the private sector?

This sort of thin happens all the time in the private sector, doesn't it?  Just a year or so ago, there was a major tech company in Pittsburgh that folded up its local office and laid of umpteen-hundred people.  When they organized a job fair for the departing employees, other companies jumped at the chance to attend.  "A few hundred well-educated, talented, experienced folks who are looking for a new job?  Heck yeah, we'll be there!"

Here's a chance to reduce the size of the federal government, at least temporarily.  Not by forcing them to cut jobs, which seems to be all but impossible; but just by hiring away the people that they've laid off.

Do They Come With A Free Yugo?

Lawmakers said today they have “serious questions” about the Navy’s Littoral Combat Ship after a Government Accountability Office report recommended slowing construction for further testing.
Well, that would seem like a good thing.
“The strategy has been ‘Buy before fly,’” said Paul Francis, the GAO’s managing director of acquisition and sourcing management, who testified at today’s hearing. “It is a ship in full-rate production, but its operational effectiveness will not be demonstrated for years to come. That’s where we are today.” 
Most of the planned 52 ships will already be under contract or built by the time operational testing is completed in 2019, he said.
Why, yes.  We're shelling out over $25 billion for four dozen ships that will totes work.  Eventually.
Francis said the Navy should consider buying the ship only in “minimum quantities” until enough testing is completed to prove its effectiveness. 
Sean Stackley, the Navy’s assistant secretary for research, development and acquisition, rejected the GAO’s advice, saying any pause in construction would increase costs and delay needed testing. 
“Now is not the time to slow the program,” Stackley told the panel. “This is our most affordable warship program.”
It's underpowered, undermanned, and essentially useless... but hey, at least it's cheap!

You know what else is cheap, Mr. Stackley?

Not building additional ships until you know they meet requirements.

Unfortunately, that's not the way bureaucracy works.

As a friend noted recently, "You know how it is. People don't react well to 'Don't just do something; stand there!'"

African Imports

Africa cannot rely on outside people to come and feed our poor or treat our sick, says African businessman and philanthropist Mo Ibrahim. The key is good governance, in both the public and private sectors.
Mr. Ibrahim continues:
What actually happened in the last 50 to 60 years is that we missed a lot of opportunities. At the moment of independence, many African countries like Ghana and Egypt had higher income per capita than China, India or Singapore. Where are we now? And where are those guys? 
I think the blame should rest squarely on the way we have governed ourselves. 
Not any amount of aid is going to move Africa forward. The only way for us to move forward is to ensure good governance – the way we manage our economy, our social life, our legal structures and institutions – that is the basis for development. We cannot rely on people to come and feed our poor or treat our sick. This is the responsibility of our governments.
I'd love to help, Mo, but frankly, you seem like a sharp guy.  I would much rather import you to the US at this point that export you any of our "governance" help.

"Mallow Mold" Menaces Maturing Marshmallows

Chanel 9 Eyewitness News reports:


Oh, my.

I had no idea that this year's marshmallow crops were in such a bad state.  This is going to be rough, not just on the farmers themselves, but also on their local economies. Marshmallow picking is labor-intensive, and there are a lot of families that depend on the seasonal harvesting work to help them make ends meet.

In the short term, the US may end up having to increase imports from Argentina to make up for the domestic marshmallow crop shortfall.  Of course, the world marshmallow market is already looking to Argentina to help make up for the near total loss of Madagascar's orange marshmallow harvest to locusts. No matter how you cut it, this is going to result in economic upheaval, both domestically and internationally.

If your family is one (like mine!) that enjoys summertime campfire s'mores, or marshmallow-topped sweet potatoes as part of your Thanksgiving meal, you may want to lay in a supply now to get you through the next few months.





I'm A Sexy Schlepper

Since income being generated at an individual level is not a reliable indicator that work being performed, I prefer a different distinction: schlep work versus sexy work. If there is schlepping involved, it is more likely to be real work. If there are sexy elements involved, it is more likely to be conspicuous production pretending to be work... 
... when you actually poke at what people think of as creative — the broader universe around prototypical categories like fine art, rock music or programming — you realize they don’t really mean creative. They mean sexy.
There's obviously some intersection of the sexy/schlep sets - computer programming, for example.  Lots of schlep work, but the overall community is large enough and well enough connected that a developer can experience some sexy aspects, as well.

Mining The Heavens

In which Gizmag visits the company’s Bellevue, Washington headquarters and talks to the President and Chief engineer, Chris Lewicki.
A nice little article.  One of the highlights:
Our capacity as a species to move into an area, become the masters of that area, to improve the quality of life for everyone by using resources and developing businesses and creating economies means we’re at a point where we don’t want to constrained by the surface of this planet. Our mission statement is expanding the economic sphere of humanity off the surface of the planet. 
The only thing that will do that outside of taxpayer dollars, which are finite and contested, is to create an economic engine and an economic reason for doing it. We fully believe that space resources are that economic engine. 
To be able to use the resources of space, to explore space, imagine that if we were building railroads that we had to ship in everything from Europe. We didn't do that, of course. It’s all about using those resources locally, so in space the first resource we’re interested in is water. 
Water is such a simple thing. Why would you ever need water? There’s plenty of it here on Earth. We’re not bringing water back to Earth. We don’t want to ship water into space because it’s very heavy and very expensive to send it there. Just to send a liter to the International Space Station it’s US$10,000 and to the Moon it’s $50,000. 
Space habitats, space stations are going to need hundreds of thousands or millions of liters of water, but there are some asteroids 75 meters across that are water rich. Just one has enough hydrogen and oxygen to fuel every Space Shuttle that’s ever been launched. It’s useful for fuel, its useful for supporting life and it’s full-blown radiation shielding for all those people talking about going to Mars. So, that is a resource that is of near-term interest.
Interesting.  These folks are thinking smart, and thinking about sustainable living in space.  It's not glamorous, it's not fancy... but it's a necessity if we're going to establish permanent colonies off of the Earth.  It's even more of a necessity if we want to establish independent colonies.

If I were in charge of HR at Planetary Resources, one of the first questions I'd ask prospective employees is if they've ever read The Moon Is a Harsh Mistress...

What Is It Good For?

In a classic case of procrastination, China has been keeping its massive debt crisis at bay by issuing more debt. However, Fitch's Charlene Chu, a leading expert on China's debt, thinks the country's time is up. "The credit-driven growth model is clearly falling apart," said Chu in a recent report.
It may not matter that China is willing to enter the drone market, if their economy is about to take a nose dive.  Of course, if that does happen, they will have a large population of young men, a lot of war materiel, and a need to distract their people from their economic situation.  All of which adds up to a frightening - yet tried and true - method of boosting their economy.

We live in interesting times.

Neither Innovation Nor Quality

Want to buy a military-grade drone? That won’t be easy, unless you’ve got a good relationship with Beijing...
... China could become a drones “proliferator” to developing countries, according to a report (PDF) released on June 13 by the US-China Economic and Security Review Commission.”Chinese companies appear to be positioning themselves to become key suppliers of UAVs in the global market…Chinese UAVs are likely to be attractive to developing countries in Asia, Africa, and the Middle East, particularly given their price points,” the report concludes.
Unlike the previous article I posted on Chinese competition, the problem here is that the Chinese are entering what is essentially an uncontested market.  Neither quality nor innovation will help US companies in this case, because they are prevented from competing.

Now, anti-drone defense systems... that may be another matter.