Open Thievery & The Bailout

Warren Buffet’s Open Thievery

Buffet agrees to buy a $5 billion stake in Goldman Sachs. Later that same day, he is on CNBC for 20 minutes promoting the Paulson Plan which would directly benefit himself. One day later, Buffet’s already made a $783 million return on investment.

Reading the Bailout Plan Clearly

The Paulson Plan requests authority for the Treasury Department to purchse up to $700 billion in mortgage-related assets at any one time. Ill-informed journalists serving as our news sieve, have interpreted the plan to be a lump sum $700 billion resuce.

In actuality, this means $700 billion is only the very beginning of the newly-acquired power wielding. The plans text below (emphasis added):

Sec. 6. Maximum Amount of Authorized Purchases.

The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time.

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One last thought on collusion and how it pertains to what will likely be our closed-door bipartisan bailout compromise, brought to you by economist Steven Landsburg:

"When an industry is dominated by two highly profitable firms, theory tells us that if there is no price war then there is probably collusion. In the case of the Republicans and Democrats the requisite collusion is on display for all to see. It is called bipartisanship."

G1 vs. iPhone- Ah, Decisions

In defiance of my typical latent excitement at consumer product announcements, I am utterly excited by the official roll-out of T-Mobile’s G1 phone. (The G1 is, of course, the vehicle for Google’s Android software platform.) Why?

First, I’m a PC guy, meaning I instinctively hesitate before handing any money over to Apple. I bucked this long time trend during mid-2005 by purchasing a 4gb 2nd generation iPod Mini, and then replacing it with a 80gb iPod Classic in late 2007 once the battery went kaput (ugh!). Generally if Apple wins me over, it must be by convincing me their product is a superior offering, particularly if I’m going to eat PC crow on a daily basis.

Second, AT&T. While I’ve played with iPhones owned by my friends and colleagues, my overall enthusiasm is muted by my absolute distaste for AT&T / Cingular. My experiences with their customer service is almost as dreadful as my on-going battle with the Verizon FiOS support and billing. Not helping their case is the terribly limited iPhone voice plan, nor the exorbitant data use fees. If I can’t convince my wife I need the $199 iPhone, how will doubling our monthly wireless bill do me any favors?

Third, I’m an open source proponent. Apple’s closed shop business mentality is tired and frustrating for anyone hoping to deviate from how Apple envisions its customers using their products. Google couldn’t get any more distant from Apple in it’s open source vision, and it is most recently demonstrated through Android’s open access software development. Score one for the wisdom of crowds (which is a fantastic book by James Surowiecki)!

Some issues that have been raised about the "gPhone" are:

• No syncing or access to an exchange server. These are software issues which can and will be resolved by allowing independent developers to write corrective code. Additionally, the G1 has mini-USB so syncing really is just a matter of time.
• T-Mobile’s 3G network uses 1700 MHz vs. AT&T’s 1900 MHz.
• 1gb of on-board storage. The G1 accepts standard microSD, so storage is really just a matter of buying it.

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Related Reading

G1 vs. iPhone: The tale of the tape

HTC G1 specifications

Apple iPhone specifications

Android: An Open Handset Alliance Project

Answers Without Questions

Let us not forget that our Constitution was designed by the American Founding Fathers for slow, deliberative action, so as to avoid the particular situation we find ourselves. But seriously, to paraphrase Tina Turner, what’s the Constitution got to do with it?

Are we so insulated from our recent past that we have forgotten the costs of rushing the Patriot Act through a midnight session of Congress during the aftermath of 9/11? We were so convinced by our desperation for answers and security that our distinguished representatives in Congress signed off on an earth-shattering bill without even reading it. Neither checks nor balances, my friend. A wink-wink, nudge-nudge will suffice. And yet here we are seven years later, where the stakes are higher but the game remains the same. Secretary of the Treasury Henry Paulson wants an appropriation of $700 billion with no conditions, no terms—nothing written down on how he would spend the money.

Congress, during an election year, is going through the motions of being very, very concerned but will in the end sign off on the Paulson Plan. Later on in the third act, they will again be concerned over how Paulson’s appropriations were used to pay higher-than-market prices for the securities in question and will want answers. The answers, of course, could have come before they signed off, but that will be neither here nor there.

UPDATE 9/25: Questions, questions galore! How wrong was I in predicting a no-brainer signoff by Congress.Hopefully they'll continue their skeptical inquisition through the week.
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Related Reading

The Wrong Emergency

Blame Fannie Mae and Congress For the Credit Mess

Anatomy of an Economic Crisis

High Anxiety

A Political ‘Solution’

Financial Crises

It seems like every day or two there's another aspect of a tremendous financial disaster looming. Now Treasury Secretary Hank Paulson is looking to get Congress to approve a $700 Billion bailout (that would include foreign banks), and Congressmen and Senators on both sides of the aisle are willing to oblige him. Indeed, it seems the only points of contention are how many additional bailouts will be added to the bill so that Wall Street stockholders won't be the only recipients of this largess. No Foolish Risk-Taker Left Behind would be an appropriate title for it. This is all in the name of financial stability. If we don't do something then the stock market could cease to function. Credit would completely freeze-up and the economy would come to a standstill.

Is this likely? Or more importantly, will the bailout really stop it if it is? Remember that $700 Billion is a lot of money for the government to borrow (and us to pay back with higher taxes), but is really a drop in the bucket compared what is traded in worldwide financial markets. The bailouts of Bear Sterns, Fannie Mae, and Freddie Mac didn't thwart this crisis, so can we really be sure that this additional $700 Billion will actually do the trick?

Additionally, do we want to further the rampant moral hazard that has significantly contributed to this problem to begin with? Are we so concerned with assuaging the guilt and fears of the self-proclaimed Masters of the Universe, as well as the stupid folks who mortgaged themselves to the hilt, that we'll pat them on the head and say, "that's alright. You made a boo-boo, but we'll help you," regardless of the fact that these people are in a position they put themselves in? Especially since the lesson for all investors is: American capitalism means you get to keep the money you make (after taxes, of course), but if you are sufficiently connected to the right folks in Washington, you don't bear the full brunt of your mistakes. The more poor decisions are rewarded, or bailed out if you will, the poorer we will be in the long run for it. This is true on the micro scale when it comes to family interactions, and on the macro scale as we are seeing.

The main counter to this is that there wasn't enough oversight. If we had good regulations in place and good regulators enforcing the rules, then this would all have been avoided. So we pay through the nose now, but we'll have stricter rules going forward. I call BS. We could have regulations up the wazoo and it wouldn't stop people from making dumb investment decisions. What we have to do is make it clear that the consequences of bad decisions are borne by the decision-makers, and turning Goldman Sachs and Morgan Stanley into holding banks so they can get quicker access to federal money does the exact opposite. Similarly, instituting bans on short-selling does nothing more than shoot the canary in the mine before he can suffocate and warn the rest of us.

The laws of economics, like the laws of physics, are immutable. You can't wish or legislate them away, no matter how much they vex you. We didn't start flying because we decided gravity was holding us down (pun intended) so let's pass a law, but because we figured out how to work within its confines and developed the airfoil. We can't solve this problem by throwing money at it and adding more onerous regulations. We have to suck it up and let these institutions fail. Yeah, the consequences would be terrible, but continuing to put band-aids on a gushing head wound won't do us any favors either.

Of course, the politicians will never let that happen. In order for the Democrats to win the White House and take more seats in the House and Senate they have to seem very concerned and pass the bailout, with plenty of goodies included for their core constituencies. It's not like Democrats understand how economics works anyway, or they wouldn't be Democrats in the first place, but that's a rant for another time. :-)

And don't think I'm giving a pass to the Republicans. If there is anything the last 8 years have taught us, it's that they are perfectly willing to forgo their stated principles of limited government and personal responsibility if it means increasing their power. This current bid by Paulson to control huge I-Banks is a perfect example.

So what do we average slobs do? Buy gold. Hedge the American dollar and start saving for that rainy day, since the forecast looks cloudy, to say the least.

Eroding Capitalism

Let’s be frank. With every news headline, political stump speech, and conversation held from Wall to Main streets, we’re not discussing the failure of capitalism. We’re focused on the failure of government intervention. Skimming the nasty landscape that riddles today’s headlines, we are awash in corporate socialism, where good risks and resulting profits are private, but bad risks and their resulting losses are passed onto the tax payers.

During the early 2000s, cheap money drove our economy into a long-term spending spree, reminiscent of the Japanese economy of the late1980s. It took nearly 12 years for Japan to recover. During that time, monetary policy was completely ineffective by lowering its interest rates, to the extent that only the priveleged few could receive funding.

In Japan, the economy never felt an overnight shock that may have prevented the long-term ailing that prevailed. Industrial policy was aimed at stability, rather than economic correction. In today’s case in the US, sure, an overnight correction would decimate our short-term economic activity and/or prospects. But that may be preferable to stitching together a quilt of misguided solutions, in the hopes that we’ll get it right someday.

Rather, wouldn’t it be best for all to be held accountable to the same standard– Where an individual (or a corporation) takes responsibility for its own actions. By having Andy feel the pains of Beth’s mis-management, why should Beth ever correct her ways – particularly when Beth has already prepared her golden parachute?

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Related Reading

Greenspan’s Sins Return to Haunt Us

The Government Is Not Supporting Stability

My Elected Officials (and Yours too)

Here's a great website to help you find your elected officials. It just got easier to hold these guys accountable. First step is knowing who to scrutinize.

Congress.org

What?! Back from the dead?

Back by popular demand, That's Effin' Good is alive and well. Since I last posted, quite a bit has changed. For one, I have a real kitchen I can call my own, which makes cooking so much more of a delight than it already was.

More importantly, Christina and I are expecting a baby come late-February 2008, so I'm not just cooking to get by anymore. I have to provide for a family.

As always, across all of my endeavors (podcast, BtDD / Effin' Eh, DynamicThinking, etc.), I thoroughly enjoy feedback and the community that posting my thoughts online provides. Please feel free to comment with suggestions or anything that comes to mind.

At the end of the day, good food is all that matters.

In my first entry back, I have an easy orange roughy meal that took really no time at all.

Road to Serfdom Paved by Technocrats

Friedrich Hayek was a brilliant man with lessons that never get old. Recent conversations with a colleague have reminded of how dangerous self-described experts can be, particularly when they think they know how to solve all of the world's problems through greek letters and funny charts.

It never hurts to return to the basics. This time, it's F.A. Hayek's (illustrated) Road to Serfdom, brought to you by the Mises Institute. Hayek may have warned us of the dangers of planners, but today they probably call themselves technocrats.

Buyer beware.

The Fed's Manna from Heaven

Hat-tip: Donald Luskin.

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Related Reading:
Debasing Bernanke by Barron's Alan Abelson
Bernanke Blinks by The Big Picture

Economics and...: Time to Do the Wrong Thing

Think back to 1998 and the Long-Term Capital Management (LTCM) implosion heard 'round the world. On the heels of wealth destruction by some of Wall Street's "most brilliant" minds, then-Fed chair Greenspan lowered interest rates to comfort bruised investors. The result was a ground-swell of investment in the securities market, that more-or-less, initiated the collective exuberance over widespread cheap money. This is known as the Greenspan Put.

And we are experiencing this again- to the detriment of the global economy. September will come and go, and the fed fund rate will be lowered. As is always the case, uber-sensitive (and very vocal) institutional investors will get their way, and we will all wonder in a few months why inflation has continued on the up and up.

To paraphrase SNL's Chevy Chase, "Bernanke, you ignorant slut."

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Related Reading:
Time to Do The Wrong Thing, posted by knzn

YouTube Gold: Billy Taylor, Willie "The Lion" Smith and Duke Ellington Perform "Perdido"

Three legends on the same stage (The David Frost Show), displaying their tremendous talents. All the more fascinating is how you can hear and see, these three distinctly different piano styles and how they effortlessly flow together.

Just amazing! Who needs the National Archives when we have YouTube?

Late to the Party

At best, upon graduating from Mason in 2003, I've been appropriately applying the economics I learned in undergrad. At worst, I'm a stubborn mutt, who clamps onto an idea and refuses to let go until-- well, never. With that said, imagine my shit-eating grin when I come across people hysterically claiming how this credit crunch came out of nowhere.

For Ss and Gs, I searched Beyond the Digital Decks (formerly Effin' Eh) to see how long I've been calling this inflationary real estate nonsense, beginning in July 2002 when I was still in school. (emphasis added)

July 2002: Is Real Estate The Next Bubble?

[H]ome loans are almost free -- considering interest rates are offered as low as 6 percent, discount inflation at 3 percent in addition to another 2 percent for the federal mortgage tax break. This is a great example of a federal housing policy that imposes artificial demand on the market.

An economist at Economy.com worries that there is currently overinvestment as consumers flock to the low interest rates. "If current conditions continue for another year or two years, we could have a problem," especially among lower-income borrowers and those who lend to them, he said.

August 2002: A Return to Moral Banking or Less Government Intervention?

More recently, consider the impact of the fed's inflationary policies that expand the money supply. This drives increased profits as the new money flows towards a means of investment, perhaps the stock market. This increase in profits, as we have all seen, is artificial and will need to be corrected (it is at this point that I would like to commend the Austrian school on their work on the business cycle, as it provides the clearest understanding of market behavior). Further distorting the market's reality is credit expansion which is fueled through the fed's money creation and the incestuous relationship between the fed and private banks.

July 2003: Snapshot of Current Employment Situation

Interestingly, June's decline in retail employment was not experienced in building material and garden supply stores. Sure, seasonal changes account for part of this growth but there's still that red-hot housing market that has been picking up (and driving economists to call for its inevitable collapse, in perpetuity) when much of this economy has slackened.

November 2003: Letter to My County Supervisor Michael Frey

My wife and I are life-long Fairfax County residents but are concerned that housing costs, increased further by restrictive housing regulations, will effectively price us out of the County's market.

August 2005: Living In Your ATM

On a macroeconomic scale, think of the consequences of inflation, where the government devalues the dollars held by consumers. In the short-term, everyone holding those dollars feels richer because of the sudden inflow; however in the long-term, inflation leads to the decline in the dollar's stored economic value. The same can be said for all of this "easy money" that is flooding the pockets of homeowners.

September 2005: Gain in Temporary Jobs

Even more worrisome is that the fastest growing industry continues to be the housing industry, which I feel to be overheating. The question remains: will housing developers be able to grow more jobs or even keep these peopleemployed when loans for future projects are denied? Greater need for that very capital will arise from the Gulf Coast as reconstruction is on all of our minds.

September 2005: Consumer Goods Will Feel The Burden

In contrast to the benefits that have been driven down directly to consumers, I want to consider why, particularly in times of such low consumer good prices, the consumer has not experienced even higher prices. If it is true as I present that more money than should have been was injected into the economy, then isn’t it the case that inflation would be driven even faster?

I point solely to the housing market, which nationally has continued its frothy growth of 13 percent in the last 12 months. The moment housing can no longer provide inflationary protection, look for the burden to be spread across the economy, driving prices of all goods upward.

September 2005: Pop Goes The Bubble

I have repeatedly discussed what I consider to be the impending collapse of our housing market. If there is anything that will push us beyond the comfort level that has provided homeowners pure price-to-equity bliss, it will be the enormous growth of no-money-down housing buys as well as the artificially-low interest rates that wrongfully incentivize everyday Americans to leap into the homeowning world risk-free.
I'll be cautious in where I step here, but let us remember the popularity of interest-only mortgages during the 1920s. Great timing, eh? While interest-only loans may have contributed to the eventual monetary contraction that destroyed wealth in the 1920s, consider that these aren't your grandfather's interest-only loans. They're even riskier.

Related Reading:
That Which Is Seen, and That Which Is Not Seen; by Frederic Bastiat
Interest-Only Mortgage deja vu; Bankrate.com

Music as Heard Through Turntables

Birdy Nam Nam. Un-fucking-real. Do check them out.

Birdy Nam Nam are a DJ crew from France whose members are Crazy-B, DJ Pone, DJ Need, and Little Mike. Birdy Nam Nam have won several prizes throughout their career including the DMC Technics 2002 World TEAM Championships. Birdy Nam Nam's goal is to use the turntable player as an actual musical instrument. Their self-titled debut album was released in 2006 on Uncivilized World Records, and in March of that year, they performed at the internationally-renowned music conference SXSW. The group's name is taken from a line in the 1968 Peter Sellers film The Party, directed by Blake Edwards^[1].

They gain their music from friends, owned albums, and press beats and patterns into vinyl to assemble their music live.

Flip your wig and check this out.




Hat tip to my brother, the Left Coast Penn.

Music You Will Need to Know

The Heliocentrics have provided drums for several HipHoppers you already know, as well as being the backup band for DJ Shadow in the studio and on stage (when you're lucky).

StonesThrow Records, the great people who brought us the Kashmere Band (reprint), Madlib, and the late (but not forgotten) J-Dilla, should not be ignored. Check out their site and see (hear?) why I'm bobbing my head.

In case it isn't apparent, these guys get the djconnor seal of approval, for whatever it's worth. Check it. Hitting the pavement on September 25th.

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ANNOUNCING: THE HELIOCENTRICS "OUT THERE" CD/LP - SEPTEMBER 25TH
From the drummer sampled by Madlib and Yesterdays New Quintet, and the band that backed DJ Shadow. This is a Now-Again Records project. Read More:
+ http://www.stonesthrow.com/nowagain/heliocentrics/

MP3: THE HELIOCENTRICS & GUILTY SIMPSON - "BEFORE I DIE"
Out now on "Now-Again Re:Sounds"
+ http://www.stonesthrow.com/jukebox/heliocentrics-guiltysimpson.mp3

Dissent in Black America: Need Not Apply

Shame on XM Radio. More specifically, shame on the station "The Power." Casey Lartigue is a friend who was briefly hosting a show on the satellite radio station, offering a breath of fresh air for what I consider to be a rather stale and disappointing forum- Black America and its ongoing allergy to accepting responsibility for it's own failings.

Please do not get me wrong. This is not to take away from the institutional problems that have occurred in the past. However, I strongly believe that there is no good in dwelling on the past, particularly when it prevents any positive growth. I would extend this line of thinking into everyday problems we have within ourselves, our families, you name it.

Casey was fired on June 25th because he rubbed the wrong people the wrong way. Read his story in the Washington Post here.

Check out his blog here for further information regarding the so-called Memorandum 46.

Finally, here's the comment I posted on Casey's blog once I discovered what happened.

Fascinating read. I am ashamed to say I was not aware of what happened to your show on "The Power" until I happened upon this post. This is a setback, no matter how you slice it.

Sounds like you were hired by XM to falsely advertise its willingness to consider diverse thoughts that question the status quo.

As you rightly point out, Opie & Anthony are free to exercise their, um, different viewpoints, so long as the ratings they pull in can justify them.

It's tough to say how much can be inferred from this episode- but I'm content to settle for (at least) this: Mouthpieces of the black community are not ready for their wakeup call.

If you step back from this, this is all very ironic. Memorandum 46, if believed, is a conspiracy to contain individual thought. Isn't that exactly what your silence has brought about?

I hope the article in the Post alerts many others to what is going on. This is a general dilemma facing all of America, transcending the matter of race:

The Individual is under attack by group think and bullyism. I wish you the best of luck in your struggle to wake up a community of victims bearing self-inflicted wounds.

If you are so sure of what you believe, why be concerned with dissension that challenges your way of thinking? Everyone is so keen on healthy debate until it breaks skin.

Come on, Joe Madison. Be a man and face a challenge without cowering behind your easy answers.

The Unseen: Ethanol Puts the Freeze on Ice Cream, et al

The seen: Your federal tax dollars pumping the life-blood through the domestic ethanol business.

The unseen: Higher prices for consumer goods. First, there's why my groceries are so much more expensive:

Amy Green’s Ivanna Cone ice-cream emporium in Lincoln, Nebraska, has already raised its prices for a small cone to $3.50 before tax, up from $2.95 a few months ago. She also estimates that she is paying $150 more a week for the butterfat that she uses in her ice-cream.

The squeeze on ice-cream makers, chocolate manufacturers and pizza companies – all of whom use dairy produce as a raw material – is set to tighten as the price of a gallon of milk in the US – up 55 per cent in the past 12 months in some American states – is now the same as a gallon of petrol, with dairy prices accelerating faster than the cost of fuel.

But all of this can be traced back to agricultural subsidies for ethanol.

This month, the price of milk in the United States surged to a near-record in part because of the increasing costs of feeding a dairy herd. The corn feed used to feed cattle has almost doubled in price in a year as demand has grown for the grain to produce ethanol.

And then there's the impact on tortillas.

Mexicans who eat a traditional diet gain 50 percent of their calories, and 70 percent of their calcium, from tortillas and other corn-based products. Another expert reckons tortillas account for 40 percent of protein in such diets.

[...]

A family of four eating a traditional diet consumes a kilogram -- 2.2 pounds -- of tortillas per day. A year ago, a kilo of tortillas in some areas of Mexico cost about 63 cents. By January, the prices in the same places had soared to between $1.36 to $1.81 per kilo -- a big chunk of the nation's $4.60 per day minimum wage. In short, low-income people found themselves priced out of the tortilla market, and forced into less-nutritious alternatives like white bread and ramen noodles.

But who's really making the money, behind the scenes? Why ADM, yet again!

Indeed, the same company responsible for rigging up the U.S. corn-based ethanol market is also profiting handsomely from soaring tortilla prices. Archer Daniels Midland, the leading U.S. ethanol maker and the world's biggest grain buyer, owns a 27 percent stake in Gruma, Mexico's dominant tortilla maker. ADM also owns a 40 percent share in a joint venture with Gruma to mill and refine wheat -- meaning that when Mexican consumers are forced by high tortilla prices to switch to white bread, Gruma and ADM still win.

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Related articles on ethanol:

How cash and corporate pressure pushed ethanol to the fore
http://grist.org/news/maindish/2006/12/06/ADM/

How Ethanol Inflates Food Prices
http://volokh.com/posts/1182040079.shtml

Gasoline Prices: Conspiracy or Plot?
http://www.reason.com/news/show/119300.html

50th Anniversary: 'What's Opera, Doc?'

What's Opera, Doc? is a 1957 animated cartoon short in the Merrie Melodies series, directed by Chuck Jones for Warner Bros. Cartoons. The film features Bugs Bunny being chased by Elmer Fudd through a seven-minute operatic parody of Wagner's operas, particularly Der Ring des Nibelungen (The Ring of the Nibelung). While sometimes characterized as a condensed version of Wagner's Ring, it actually makes only loose borrowings from that cycle, woven around the standard Bugs-Elmer conflict.

Originally released to theaters by Warner Bros. on July 6, 1957, What's Opera, Doc features the speaking and singing voices of Mel Blanc as Bugs and Arthur Q. Bryan as Elmer. The short is also sometimes informally referred to as Kill the Wabbit after the line sung by Fudd to the tune of the Ride of the Valkyries.

In 1994, What's Opera, Doc was voted #1 of the 50 Greatest Cartoons of all time by 1000 members of the animation field.

Source: Wiki

Western Aid vs. Eastern Trade

I have only gotten half-way through Untapped, but so far, I'm prepared to say-

• Western Aid has failed Africa; and
  
• France is responsible for a good portion of Africa's current economic paralysis.

Tangentially, our supposed proponents of Western trade are failing us all, on a global scale. All of this makes me so eager to reach the book's section discussing China's eager tromp into the fire sale that is the sub-Saharan resource market.

The tired status quo (Western aid packages) leave Africans feeling (rightfully) cheated, conned, and marginalized by the nouvelle imperialism championed by the US, France and many others.

Westerners offer intangible goods such as "democracy", governmental transparency, many other unattainable niceties (at least in the short-term). While great on paper, such big picture ideas are difficult to tie down to at least reasonably measure success and failure. Most particularly, the mess that France has left behind (I'll leave this topic to a future post) poses an impossible foundation for progress of any sort.

On the other hand, the Chinese offer the Congolese very tangible goods for their resources, as in process plants, power generation, infrastructure. In exchange for their local resources, the Chinese export cheaper goods to fuels their burst ahead. In an environment suggesting inflated times, this is a brilliant move.

Let's put on our zero-sum goggles: If the Western interests have their way, sub-Saharan Africa will remain a basket case. In contrast, if the Chinese get their way, Congo is still a basket case, but at least now they have a hydroelectric dam.

I have at least one question for which I'd love an answer-

1. Isn't it ironic that Communist China represents the trade faction while the West defends socialism?
   

Unless we drastically change our course, I'm afraid the American Empire is coming to an end- or at least a lull.

Nigerian Oil: ‘Ghost Jobs’ and Further Moral Compromises

Nigeria’s brokered split from the British Empire in 1960 served more as a milestone than a finish line for its independence. Since that time, national politics has consisted of a conspiratorial war between the three majority tribes—each of which believes the other two are colluding against it.

Before the age of oil, tribes often had disputes, but rarely over anything more than land borders and fishing rights, neither of which would raise the stakes to a bloody boil. Intense fighting among the tribes was exacerbated by the discovery of Nigeria Delta oil in 1966. The Ijaw declared the Delta an independent Ijaw republic, resulting in the provisional government to thrash all oil contracts over night. Not to be outdone by the Ijaw, the Igbo tribe kicked off the Biafran war of 1967 II.1970 by declaring an independent Republic of Biafra in southeastern Nigeria. An estimated 2 million died during that war, primarily from disease and hunger.

In light of regular violent attacks on oil infrastructure and Nigeria’s tumultuous history, oil companies were hesitant to fully invest in the over-the-counter corruption that the rest of the world still preferred out of convenience. They instead opted for an unofficial-but-practical policy of paying off local chiefs to prevent disruptions by local youths. The immediate failure of centralized bribery drove oil companies to resort to micro bribes or “ghost jobs”—which paid youths to stay home.

For fear of unfavorable international attention, corporate governance mandated environmental and community impact evaluations to be conducted on proposed exploratory projects. These community impact studies would start as a dialogue with a village chief who was assumed to be a representative to grant local oil concessions. As an unintended consequences appeared over night: a centuries-old ceremonial tradition was warped into a nasty brawl for the title of village chief where oil company handouts were at stake.

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I'm only on page 31 but I'm already digging this book. Check out Untapped: The Scramble for Africa's Oil.

DRM has failed.

My latest evidence?

PayPlay has just launched "the world's largest MP3 download store" -- a store selling more than 1.3 million indie music tracks, with a search engine that allows you to search for your fave artists and get similar indie artists in the catalog. Previous to this PayPlay sold only DRM-crippled WMAs for $0.77, the MP3s sell for $0.88.

The market is offering unencumbered (DRM-free) MP3-formatted songs for a 14 percent premium over the WMA format. (Hat tip: Boing Boing)

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PayPlay.FM
http://payplay.fm

The College Participation Paradox?

Employers are growing uneasy at the ensuing baby boomer retirement. And yet, at the prospect of higher wages, the number of college-bound high school graduates has fallen.

A historical, if not economic, paradox with several implications for the mid- to long-term:

1. College graduates will enjoy greater job stability than they already do.
2. American income inequality is going to widen even further.
3. Global income inequality is going to further narrow.
   
4. Nominal wages will continue to decline relative to tax-friendlier benefits.

Perhaps in the longer run, employers dependence on college graduates will lessen through cheaper internal training and increased productivity for the marginal unskilled worker.

We've entered the Age of the Knowledge Worker, folks. Act appropriately.

Gas Prices in (Inflation-Adjusted) Perspective

1955
$0.29/gal. (nominal dollars)

vs. $1.76/gal. adjusted for inflation
vs. $5.17/gal. adjusted for inflation & purchasing power

1972
$0.36/gal. (nominal dollars)

vs. $1.36/gal. adjusted for inflation
vs. $2.66/gal. adjusted for inflation & purchasing power

1981
$1.38/gal. (nominal dollars)

vs. $2.74/gal. adjusted for inflation
vs. $4.30/gal. adjusted for inflation & purchasing power

Source: Jerry Taylor and Peter Van Doren, "Gasoline Prices in Perspective"

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To make their case, some people will inappropriately compare current events to a normal state or rather, what they've declared to be the baseline, without doing any homework. For example, when people bitch about $3.00/gal. gas, they will likely hold up 1998's $1.03/gal. price as the benchmark.

When you take into account inflation and purchasing power, 1998 is a historical outlier which doesn't hold up to any legitimate sniff test.

Sure, I won't argue with you that gas prices are at peak nominal price. But try and buy a loaf of bread with nominal money (Disney dollars will do you just as well). Anything is possible, but my guess is that your grocer will demand to be paid in real dollars.

The Horserace- Already?!

Ron Paul 2008
http://www.ronpaul2008.com

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I'm confused. Isn't the general complaint with politics that issues are overly simplified into matters of black and white?

Then why is it hip to be a moderate Democrat, but not Republican? Frankly, you don't get any more moderate than libertarian. How am I misinterpreting Ron Paul's political capital?

MSNBC conducted a poll before and after the debate. Going into the debate Romney and McCain held the highest appeal, and not surprisingly, dwarfing the number of respondents who could pick Ron Paul out of a lineup. Afterwards, Paul was voted winner, and even more impressively, captured the lowest negative rating as well. Wow. Incredible given how much of an unknown he is.

Given 1 is BEST and 10 is WORST,

Before the debate, Ron Paul's ratings:

• Negative 47 percent (7 out of 10)
  
• Neutral 44 percent (8 out of 10)
• Positive 9 percent (8 out of 10)

After the debate, Ron Paul's ratings:

• Negative 28 percent (1 out of 10)
• Neutral 38 percent (4 out of 10)
• Positive 34 percent (1 out of 10)

See for yourself.

And how is it Chris Matthews can get away with uttering "Oh God" when Paul mentioned "original intent"? How is that an objective gesture?

UPDATED from Ron Paul's website:

Brief Overview of Congressman Paul’s Record

He has never voted to raise taxes.
He has never voted for an unbalanced budget.
He has never voted for a federal restriction on gun ownership.
He has never voted to raise congressional pay.
He has never taken a government-paid junket.
He has never voted to increase the power of the executive branch.

He voted against the Patriot Act.
He voted against regulating the Internet.
He voted against the Iraq war.

Flight of the Conchords | Business Time

Break to the Beat

There is no denying funk's extensive reach into all aspects of American music culture. For hiphop, note how musical progression began with disco's funky bassline and contagious party vibe. This rapid metamorphosis was fueled by technological advances in studio recording which further introduced an electric groove to the party scene.

All of this set the stage for an exciting early 1980s where funky off-the-hook breaks and basslines were mixed with magnetic emcee personalities. In previous mixes (Bringing it Back and Plan 9) I have focused on the emcee and let the party roll from there and concentrated my efforts on songs that highlighted the pivotal party people such as Bambaataa, Mantronix, Jazzy Jay, DJ Kool, Spoonie Gee.

This time around I have opted for great breaks before anything else. In fact, to show you I was serious, after the mood setting Captain Rapp track, I explode on the scene with some real four-on-the-floor loud craziness from Simply Jeff and DJ Scratch. Beyond this early deviation from the mix's overarching 80s breakdance theme, I drop you back into the familiar world of Busy Bee, Dana Dane with Fame, and Davy DMX.

No doubt, the 1980s were the shining decade for two turntables and a microphone.

Related mixes by djconnor:

Bring it Back [25 Mar 2006]

Plan 9 [29 Mar 2006]

;
UPDATED: Here's the link to the mix, Break to the Beat [29 Apr 2007] .

Lot 1321 [04.22.2007] Five Weeks Later

We now have doors leading into the house from the garage. Also, progress has been made on the roof. To the non-industry amateur, from the exterior it doesn't look like much work has been done, but there's plenty getting accomplished inside-

We've been informed that we will have a Pre-Drywall Walkthrough on May 2nd led by the site superintendent.

The Real Estate Rollercoaster

Here's the U.S. real estate market adjusted for inflation, 1890 through 2006, as illustrated by a boring 2-dimensional graph.


How boring.

Now, here's the same U.S. real estate market adjusted for inflation, 1890 through 2006, as illustrated by Rollercoaster Tycoon 3.

(Hat tip: Speculative Bubble)

World Music v.3 | Turkish Influence on Western Classical Music

Western interest in Turkish instruments was spurred mainly by the unusual prominence given to the cymbals, bass drum and bells in Turkish janissary bands. Mozart and Haydn were known for their inclusion of Turkish themes in operas and symphonies.

Skipping ahead to the 20th century, whenever I listen to Dave Brubeck I feel as though I am in class, learning the fundamentals of music appreciation. Check out his "Blue Rondo á la Turk."

Haydn: Symphonies #99-104; Sir Thomas Beecham; Royal Philharmonic

Bach to Brubeck: Bass Trombone Concerto/Blues Suite for Banjo & Orchestra

This is the third of 15 in a series. In the next episode: Brasil Beyond Bossa Nova.

For those who deny Progress

Robert Fogel

"What we currently call the poverty line is so high that only the top 6 percent or 7 percent of the people who were alive in 1900 would be above it."

(Hat Tip: Arnold Kling).

Lot 1321 [04.13.2007] Four Weeks Later

Windows are in- just in time for some stormy weather. We just found out we will be living on a cul de sac. Given that that are additional construction phases to hit Brambleton after we are settled, I expected the dead end would not last.

Other news- Backing onto our property is communal property which will be developed into park land. On the other side of this land, there will be an elementary school constructed in the coming years. How cool! Too bad Christina and I are not so hot on public schooling- how convenient that'd be.

Lot 1321 [04.07.2007] Three Weeks Later

This week we met with our loan officer who confirmed we weren't completely crazy for thinking we could buy Lot 1321. Great news!

You can't see it but right behind where I'm taking this picture, the developer has begun construction on a neighboring 4-unit townhome structure.

Four strikes me as being an ideal number of attached units to group together. Anymore and it just seems suburbanly anonymous.

Lot 1321 [04.01.2007] Two Weeks Later

Christina and I were relieved to get through the options phase without going crazy. I laughed when we were told it'd take an hour to pick out recessed lighting fixtures. It actually took an hour and a half. Glad that's over!

Now for some exciting news- three weeks into home ownership and we already have a roof!

World Music v.2 | Sufi Singers

Sufism is a mystical tradition with origins dating back to 9th century Islam. To brutally simplify their beliefs, the essence of Being / Truth / God is inseparable from all things material and spiritual. Only by letting go of all notions of duality can Sufis realize the divine unity. (Body and mind are indistinguishable from one another.) What I find interesting is how this manifests itself in the sufist pursuit of false truths- as Christina summarized, it's a mystical process of elimination. Or as Reagan would say, "Trust but verify."

Several musical traditions have developed through Sufi culture, such as Qawwali music and various forms of devotional dance (whirling, for one). You may already be familiar with the most famous Qawwali musician, Nusrat Fateh Ali Khan, but there are plenty of other talented Sufi performers.

Check out:

Abida Parveen | Pakistan

Shubha Mudgal | India

Whirling Dervishes | Turkey

--

This is the second of 15 in a series. In the next episode: The Turkish Influence on Western Classical Music.

World Music v.1 | Paki Singers

I'm fortunate to have several coworkers with whom I can plan on having great music conversations. One such coworker has recently turned me onto several incredible Pakistani singers. The mix CD I borrowed from her has been on constant repeat in my car- and for good reason. I'm inspired by the cultural blending taking place in their music... Be it the classical Paki vocals, the western electric guitar riffs or the North African percussion, this really has the stamp of global sophistication. David Byrne would be proud; as would Tyler Cowen, author of Creative Destruction.

As a side note, she explained to me that India has a great deal to offer to classical Paki singers, who offer wide appeal to a substantial Indian market. Gaining momentum, many singers return to Pakistan as stars, after having been a previous nobody. The analogy I drew upon was when sub-NBA talent opts for a Croatian pro basketball league rather than American mediocrity. It isn't until they really make it elsewhere that they are able to return to their home country and have a chance.

However, in this case, there is little reciprocation by Pakistan to Indian's open arms. Hmm. But I digress.

I have no track listings so stay tuned to find out what I'm raving about.

--

This is the first of 15 in a series. In the next episode: Indian Sufi singers.

34% Don't Know Their Mortgage Type

Oh my.

Rational ignorance explains why most don't care to know who serves as their current congressman or senator- why bother investing your time knowing about someone with little direct impact on your life.

--But to not know about your mortgage?! That's just plain stupid. Thanks to our obsession with publicly funding the American Dream, we have enjoyed terribly cheap money.

The upside has been that more people have been moving from the role of renter to owner. However, this has been at the expense of accountability.

The underside of having a surplus of consumers realizing the American Dream is that we're going to market (as both buyers and sellers) without having done our homework. It just makes sense. Why bother with the details when pre-approval is just a phone call or click away?

Cheap money? Hell, easy money. Or is it?

Two weekends ago Christina was doing laundry and had our bedroom tv tuned to an ambient midday PBS infomercial with Robert Kiyosaki, author of Rich Dad, Poor Dad. I walked into the room just as he was explaining the difference between being rich and being wealthy.

You understand being rich in terms of money- how much do you have?, where as wealth is measured in time- how long do you have it? I also think this distinction can be seen as the short-term vs. long-term- A crack head isn't stealing your wallet to buy a suit and get a job, and thus satisfy his long-term needs. It's more likely that he's just looking to get high. You don't get any more short-sighted than that.

I welcome economic downturns because they correct market disruptions. Rather, I celebrate the exchange of the CONSULT A REALTOR-plated Lexus ES for the Toyota Corolla. Let's come back down to reality, folks.

djc_mix: First Bloom

[Sampled]: DJ Z-Trip | Uneasy Listening, Volume 1
Barrington Levy | Here I Come (Broader Than Broadway)
Black Uhuru | Sponji Reggae
Basement Jaxx | On the Train
Nightmares On Wax | Morse
Cake | Stickshifts And Safetybelts
[Sampled]: Cake | Friend Is A Four Letter Word
[Sampled]: Z-Trip | Rockstar
[Sampled]: Notorious B.I.G. & Frank Sinatra | Dead Wrong / In My Room
Craig David | Fill Me in
The Streets | A Grand Dont Come For 2
Portishead | Only You
DJ Vadim | Non Lateral Hypothesis
DJ Cam | Other Aspects
Briskey | Galactic Jack (Buscemi's Beat To Beatnik Remix)
[Sampled]: DJ Shadow | Unreal
DJ Shadow | What Does Your Soul Look Like?
U.N.K.L.E. | Last Orgy III (featuring Takagi Kan)

http://mookie1510.podomatic.com/

Lot 1321 [03.25.2007] One Week Later

We're only a week away from making our options selection so we've been making regular trips back to the model home to look at several samples.

While we were in the neighborhood, we decided to see how Lot 1321's been coming along. Turns out a week means a great deal of progress!

Lot 1321 [03.18.2007]

Yesterday Christina and I made a reality out of what had previously been a mere pipe dream. We broke ground on our first house: A beautiful 2-car garage, 3 bedroom, 2+2 bath townhouse that is being constructed in Ashburn, Loudoun County.


The first photo was taken on March 17, 2007, just as we were leaving the model home where we signed our contract. The second story structure is now being built. You can already make out our entrance way / foyer on the left side of the two-car garage.

The second photo was taken on March 4, 2007. The plot's original buyer backed out having just demanded the additional powder room. At this time only the foundation had been poured.

In my humble opinion, market forces have perfectly aligned to offer us an outstanding opportunity to join the masses blessed with homeownership. As a relatively risk-averse skeptic, please allow me to argue my case-

1. First-time home buyers bring no baggage (home to sell) to the table and consequently are perceived as a high value buyer to all parties involved. Essentially there are limited concerns, assuming they don't lie.
2. Meeting market demands, sellers have been uncomfortably shifted into a world of excess, providing power to potential first-time home buyers unseen in years.
3. Interest rates continue their historically low position. Ever since I graduated from George Mason in 2003 and joined the fray of economic soothsaying, I have had strong worries that rates have been held far lower than where they should be. Said artificial rates have allowed far more economic activity (so-called wealth creation?) than our asymptotic equilibrium would allow. Alas, politicians are not economists, but rather selfish vote-getters. Why doom re-election by demanding the market be corrected? (FreddieMac and FannieMae: I'm looking at you.) As a result, interest rates are otherwise suppressed.
4. The outing of sub-prime and otherwise "creative" (read fraudulent) lenders has forced an about-face with shareholders. This lagged confrontation will induce lenders to further incentivize legitimate home-buyers to sit at the table and salvage their balance sheet's credibility.
5. Christina and I pay our bills and live within our means.
6. We cut a hefty check to the Internal Revenue Service for services rendered: our sweat, their takings. (Fool me twice, shame on me.)

All of these reasons force my hand as the risk-averse skeptic. However, please do not get me wrong. I am not wholly advocating non-home owners rise up and exploit sellers' vulnerability. In its current state, the market has been painfully segmented by uncertainty and mild chaos in the financial markets.

Any investors, unstable/self-employed, or otherwise dependent on "no-doc" loans need not apply. You can't afford that premium, particularly if you think you can.

The market beckons for people who desire a home to live in beyond the mid-term. In essence, if your time-table is less than 10 years, or you are looking to purchase an auxiliary (rental, vacation) property, please sit on your hands. You already missed the boat on investing- only a fool would buy high only to sell low. Additionally, if you are single or otherwise limited in your ability to acquire a stable mortgage (fixed 30 yr, for starters), look away. Your time is not now.

The time to expand the American Dream of white picket fences and homeownership to any and all has passed. As we are witnessing from NYSE's rapid delisting of New Century, actions are now forced to intersect with consequences. This is a good thing, as people are driven to think as economic actors rather than lucky lottery winners.

On USA, Inc.

From a newsletter from itulip.com:

All that needs to happen to create a crisis for USA, Inc. is a couple of bad quarters- a recession. The revenue line of the income statement declines. This scares away lenders who either demand better terms in the form of higher interest rates or cut back their acquisition of financial assets and the liabilities line on the income statement gets even worse. What to do? Go back to old friends and try a little harder, beat the bushes for fresh sources of credit and print more shares, that is, dollars. At iTulip since 1999 we have called this process Ka-Poom Theory, a period of recessionary disinflation followed by a major recessionary inflation.

You might ask, won't the Keynesian cure of tax cuts, deficit spending, and easy money work again to get us out of our next recession as it did in 1987 and 2001? Keynes' prescription is intended to prevent an economy from falling into a self-reinforcing deflationary spiral, as happened in the US in the 1930s and in Japan in the 1990s. By any standard measure of GDP growth, the 2001 Keynesian stimulus program that followed the 2000 stock market crash worked every bit as well as it did after the stock market crash of 1987.

No doubt. Do check out itulip.com. My good friend Aaron directed me towards their refreshing perspective and I haven't look back since.

Preston Tucker: A Generation Too Late

I just finished watching Tucker: A Man and His Dream, the 1988 movie with Jeff Bridges. I will admit that I'm rather impressed with the free market ideals behind the film. As a student of economics, I derive a great deal of pleasure from attending the annual Sully antique car shows with my step-father.

At first, it was impressive to merely see the sources for contemporary automotive design and technology in-person. Now, I've become much more interested in why the auto industry evolved as it did. From a regulatory-perspective, Tucker does a great job of showing how "capture theory" takes consumers hostage and impacts the future of innovation. In short, "capture theory" is the inevitability that a regulatory agency will be captured by the industry it was designed to control, no matter how well-intentioned the agency may be. Lastly, I enjoy the final speech Tucker gives in the courtroom. It is very Gordon Gekko. However, unlike the Gekko character, Tucker maintains his beliefs in the free market throughout the whole film. The speech is below:

When I was a boy I read about Edison, Ford, the Wright brothers. They were my heroes. Rags to riches wasn't just the name of a book. It was what this country was all about. We invented the free enterprise system, where anybody, no matter who he was, where he came from, what class he belonged to, if he came up with a better idea for anything, there was no limit to how far he could go. But I grew up a generation too late, I guess. The way the system works now, the loner, the crackpot, the dreamer with some damn-fool idea that ends up revolutionizing the world, well, someone like that is squashed by big business before he knows what hit him. The new bureaucrats would rather kill a new idea than let it rock the boat. If Benjamin Franklin were alive today, he'd probably get arrested for flying a kite without a license. We're all puffed up with ourselves right now because we invented the A-bomb and we beat the daylights out of the Nazis and the Japanese …but if big business closes the door to the little guy--you, me--the little guy with new ideas, we've not only closed the door to progress and hard work, we've sabotaged everything we fought for. We might just as well let the Japanese and the Germans walk in here and tell us what to do. What's the difference? If new ideas can't be allowed to flourish, then we've just exchanged one set of rulers for another.

Indeed.

fromtheARCHIVES: Dub Tender

There is a new episode on my podcast:

http://mookie1510.podOmatic.com

Back by popular demand, From the Archives--

Thievery Corporation - A Guide for I and I
311 Porter - Surround Me With Your Love (Mental Overdrive Remix)
People Under the Stairs - Sunroof
Thievery Corporation - A Warning (Dub)
Mateo & Matos - Taste of Funk
Rithma - Opium Dreams
Bobby Hughes Experience - My French Brother
UKO - Sunbeams
Thievery Corporation - From Creation
Elis Regina - Bala Com Bala
Trio Electro - Supa Max
Fila Brazilia - Airlock Holmes
Afro-Mystik - Tidepools
Caspian - Otono Perpetuo
Ursula 1000 - Savoir Faire
DJ Vadim - Lounge Shiznit
DUST - Dead Cowboys
Mad Professor - Mystic Powers of Dub

Help me spread the word:

http://www.podOmatic.com/podcast/tell/mookie1510

Returned: Vegas Baby, Vegas.

*good
red rock casino
red rock canyon
jetblue
thomas keller's bouchon (venetian)
caesar's cypress st marketplace
free casino drinks
$7.99 prime rib from terrible's
Hertz gold club
mandalay bay casino
venetian
nicely-scented casinos (even with all the smoking)
wynn casino
the wynn sign
cirque du solei
vegas parking
drinking
lack of open container laws
curfew for teens
blasted A/C
witchcraft (mgm grand)
hofbrauhaus beer hall
carl's jr
neon
hands-free bathrooms
homeless men with signs saying "why lie-need beer"
stripper apparel shops
cabbies with corona hats
carl's jr $7 "six-dollar" burger
steak frites
summerlin
henderson
record city
tix4tnt
frommer's guide
fish tacos from pink taco
ghetto gated communities

*underrated
karaoke@ellis island
ellis island brewery
Four Queens casino
Fitzgeralds casino
Penny Blackjack/Poker
terrible's casino
vegas used record shops
danny gans
clint holmes
sahara ave
paradise dr
maryland pkwy
cheap palms buffet
unlv college radio station (91.5)
24/7 asian massage parlors, 24/7 wedding chapels and 24/7 bailbondsmen (all 3 of which are generally clustered together)
vegas for vegetarians
dirty old women
vegas jazz
vegas music scene

*bad
ballys service
ballys hotel room
ballys front desk
ballys value
creepy 'ole circus circus casino
gold spike
stratosphere
children in vegas
ivana trump
navigating through casinos
blasted A/C
running out of their specials@bouchon
cvs not selling alcohol
carl's jr after hours drive-thru only
nasty plastic/orange trophy wives

*overrated
freemont experience
slots
palms casino
vegas real estate
time-shares
red-eye flights
caesar's palace casino
shopping on the strip
$14 cocktails from wynn
treasure island
elvis references
hard rock casino
pink taco
nobu styling
las vegas blvd
in-n-out burger
the deuce
monorail
paying more for bottled water than alcohol
dirty conventioneers
keno
gambling
pricey celebrity restaurants
lax vegas security/checkpoints
from the price alone, kobe beef
oyster bars in june
dirty old men
panhandling ravers

Host Your Own Podcast For Free! (I am)

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For more than five years, I’ve used software to mix mp3s into continuous mixes that I would burn onto CDs that I played in my car and distributed to friends. My mixes got me through many, many hours of pizza deliveries during the ghetto college years of my life. For awhile, I was averaging a mix every week. But admittedly, that was during college when free time was easily managed. Having joined the workforce, time is not so cheap. As a result, my mixes have become less frequent, maybe every three or four weeks.

Stepping back, I can now count more than 100 mixes that are scattered across my desktop and laptop at home, not including those I’ve archived on CD. All in all, I probably have accumulated 150 mixes. For 2005, my personal New Year’s resolution was to eliminate my dependency on CDs as a media format. They’re wasteful, easily lost, a pain to organize, easily scratched, and lacking in storage capacity. Analog is so last century. Upon my full-on love affair with iTunes + my iPod mini (just say NO! to the Nano), I have realized it makes the most sense to format mixes into podcasts. The mystery was how to host those podcasts for free.

Enter: podomatic. You can have up to 250mb in mp3s for the public to hear and download all for free! I’m in love.

Localities and the Provision of Public Goods

A valid point is raised by Matthew Kahn at Green Economics regarding public goods and the game of chicken that localities choose to play with the feds. Allow me to explain: we do not live in a vacuum, nor do our local governments who are tasked with obligations to defend and serve its constituents with basic services, such as police protection, trash collection, education, and in this case, flood prevention.

Surely, there will be plenty of lessons to arise from Katrina, the most important being that the feds are incapable of filling in for any local failings. This is an important lesson to learn, and while I have previously spoken of no benefits to arise from this disaster, perhaps anything that leads people to realize the limitations and incapacities of government has its merits.

On its own, any occurence which drives the witness to see government for it's (in)actions rather than its benevolent perspective or intentions has some value.

Case in point: flood insurance and the taxpayers who refused it, believing that once trouble arose, the feds would be able to ride into town on their white horses and save the day. Let's fast-forward to reality: Mike Brown and his army of incompetents prove yet again that government is no savior to pray to, but rather a line item deduction on our pay stub. The lesson to be learned? Government serves the role to prevent rescuers from the scene, rather than do anyone any good:

The Red Cross is confirming...that it had prepositioned water, food, blankets and hygiene products for delivery to the Superdome and the Convention Center in the immediate aftermath of the hurricane, but were blocked from delivering those supplies by orders of the Louisiana state government, which did not want to attract people to the Superdome and/or Convention Center.

Beyond that cheerful development, I'm sure the dead left behind will be pleased with their $2,000 debit card. Yet again, I digress.

Kahn's point is far greater than what I am allowing it to be. He points to a NBER paper that asks the question, Why was there a spurt in the development of waterworks construction between 1890 and 1920, and how did private investment play a part? For the record, the private investment industry has a lengthy and sucessful history in calculating risk and weighing the available options.

Left to government alone in 1801 when waterworks construction first began and through 1890, a remarkable delay put countless lives at risk as well as defined development as the Not Seen. It wasn't until private industry, with its marked history of risk calculation and investment took it upon itself to save the American landscape from the government's costly game of chicken.

Broken Windows Anywhere I Look!

Oh, Secretary Elaine Chao, how I used to admire you. The low-key and rather unobtrusive way in which you would go about your daily business as the Secretary of the Department of Labor, it was something that has been lacking in a Republican for quite some time.

Too many Republicrats have become misguided by their ambitions and misguided by a life of pro-activism. For the record, at one point in time, such a revealed characteristic could bring a man's political life to a careening halt. But alas, that was once upon a time when a right was a (natural) right and not an entitlement, and the Constitution was something more than merely an obstacle for the ambitious. But I digress.

Within the last few years, it was Chao who quietly submitted federal regulation requiring more transparency from labor unions in how they spend dues and categorize expenditures. It was a thing of beauty, really. Just think: requiring full disclosure of how unions spend their (sometimes required) subscriber's hard earned money. In my opinion, it is no coincidence that the official fall of the grayed and tired labor union has been on her watch.

Now, back to me. If you haven't noticed, my Republican honeymoon is, in short, over. I will no longer offer a bye to any politician who stands in opposition to Democrats; those who I fear will open the proverbial door and bring down the house, in nearly every imaginable way.

Secretary Chao, you are the first caught in my sights. But please folks, let me bring you up to speed. Chao is the most recent to buy into the nonsense of the Broken Window fallacy. If you are scratching your head at this point, dear God. Go read this. Seriously.

Then, do return and we shall discuss That Which is Seen and That Which is Not Seen. However, until then, let us wonder how the devastating Katrina offers any bright spot in the new jobs that will be created from reconstruction.

Here's a jobs program: why don't we tear down every building in this country and then hire all Americans to build them back up. If employment was the full equation, we'd be set. Too bad there is so much more to it. As a general rule, I try not to cut off my right arm only to beat myself senseless with it. So can we please see Katrina for what it was? A devastation in every imaginable way. There is nothing good that has come out of it; so please Secretary, don't reassure those among us who think moving backwards isgetting somewhere.

Oh Secretary Chao, how could you have fallen so far?

Concerns for Our Future; Recession Feels Likely

Before I go in-depth into why I feel the concern I do for the future economic state of our nation, I will offer up a laundry list of reasons for my greatest worries. This will be my summary post, with links to posts that follow, so as to not completely overwhelm you, the reader, with my screed.

• The current gains in jobs is arising from industries that offer no long-term protection for workers (construction, accommodation, and food service sectors); rather, these are low-skilled industries that provide only marginal sustainability. The ebb and flow of economic tides drives hirings and firings moreso than in other sectors. (Think of the DC restaurant and service industry following 9/11.)
  

• Consumer Confidence, which has been on the rise in recent months, is extremely responsive to incidents such as Hurricane Katrina. Under ordinary circumstances, news of the devastation from hurricanes or other natural disasters tends to drive consumers to respond with great fear for their individual ability to find jobs in the near-future, or assess their own present economic situation.

• Gas Prices, which have seen a certain spike in the past five years, have incurred an even steeper price increase in recent weeks. Anecdotally speaking, the price of 93 octane gas (I have yet to be convinced to compromise my Acura’s performance for a short-term gain of a few marginal cents per gallon) has risen in my area from $2.91 (from Tuesday) to $3.70 as of today.
  

• The housing bubble will surely collapse given the unexpected factors that Katrina presents to our economy. If this is in fact the case, consider the number of people exposed to 100% of the risk of rising interest rates. Interest-only loans and other creative financing tools will drive the housing market's demise.
  

• The rise of prices for consumer goods and raw materials in at least the short-term will have a dramatic effect on consumers. The New Orleans port is the American gateway to the global market, particularly for the importation of coffee, rubber, steel, lumber, and copper.

As Don Boudreaux rightly points out, government has "prov[en] itself to be utterly incompetent at providing disaster relief," and will continue to fuck things up with unparalled skill. To further exacerbate our problem will be the longer term solutions that Congress and the president come up with to correct our economic direction. Of all the brief points I make above government action is perhaps my greatest fear of all.

Consumer Goods Will Feel the Burden

The rise of prices for consumer goods and raw materials in at least the short-term will have a dramatic effect on consumers. The New Orleans port is the American gateway to the global market, particularly for the importation of coffee, rubber, steel, lumber, and copper.

Macroeconomics 101 instructs the common econ student on the relationship between inflation and interest rates. As interest rates decline, inflation is much more likely to rise as the value of the dollar falls and your money is essentially worth less. My fears of where we may be headed is based entirely in the example of Japan, where home equity grew enormously over the 1980s. As a result, homeowners continuously refinanced and took the money not reinvested in their house and spent it, which drove economic growth and gave the false perception that the economy was doing better than it really was.

Hear me out: if we are cashing in on our assets based on their current value (which is very much in economic fluctuation), what will happen once that value begins to decline? At a given point, interest rates will no longer remain at historical lows, no longer providing homeowners an ATM to cash out and spend, spend, spend.

There are many theories as to why inflation is not been experienced higher than it has actually been. My thinking is that productivity gains as well as job creation has protected consumer prices from having to feel the direct impact. Consider the Wal-Martization of America, where wholesalers and retailiers have taken advantage of technological advancements, the avoidance of union involvement, and economies of scale to benefit consumers with lower prices for higher quality goods. In one instance, RFID allows companies to maintain real-time inventories and reduce the costs of over-supply or near-inventory-exhaustion. In addition, RFID drives increased understanding of purchasing trends and seasonal inventory variances.

In contrast to the benefits that have been driven down directly to consumers, I want to consider why, particularly in times of such low consumer good prices, the consumer has not experienced even higher prices. If it is true as I present that more money than should have been was injected into the economy, then isn’t it the case that inflation would be driven even faster?

I point solely to the housing market, which nationally has continued its frothy growth of 13 percent in the last 12 months. The moment housing can no longer provide inflationary protection, look for the burden to be spread across the economy, driving prices of all goods upward.

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Pop Goes the Bubble

The housing bubble will surely collapse given the unexpected factors that Katrina presents to our economy. If this is in fact the case, consider the number of people exposed to 100% of the risk of rising interest rates. Interest-only loans and other creative financing tools will drive the housing market's demise.

I have repeatedly discussed what I consider to be the impending collapse of our housing market. If there is anything that will push us beyond the comfort level that has provided homeowners pure price-to-equity bliss, it will be the enormous growth of no-money-down housing buys as well as the artificially-low interest rates that wrongfully incentivize everyday Americans to leap into the homeowning world risk-free.

I'll be cautious in where I step here, but let us remember the popularity of interest-only mortgages during the 1920s. Great timing, eh? While interest-only loans may have contributed to the eventual monetary contraction that destroyed wealth in the 1920s, consider that these aren't your grandfather's interest-only loans. They're even riskier.

[T]he big change in the risk of IOs, relative to the '20s version, is their attachment to adjustable-rate mortgages, or ARMs. ARMs are risky in themselves because borrowers are exposed to rising mortgage rates when market rates increase. Adding an interest-only feature heightens the risk. When the ARM rate is adjusted sometime in the future, the new payment is calculated using the original loan amount, as opposed to the smaller balance on a fully amortizing ARM.

I may be alone in thinking this (so a grain of salt is suggested), but the national housing market, as bullish as it may appear to onlookers, is extremely sensitive to any economic effects that may occur. Consider the direct effect of soaring lumber prices in the shadow of Katrina’s devastation. The port of New Orleans was a leading destination for imported lumber for the US.

With lumber, problems of goods distribution, high demand (to rebuild), and disrupted production, as mills in the Southeast see their incoming raw materials being halted or greatly reduced. If any fool has the gull to point to the benefits of Katrina, consider what a brilliant Frederic Bastiat wrote in 1850 as the Broken Window.

Bastiat’s thesis relies on that which is seen versus that which is not seen. Yes, there will be construction and purchase orders originating from the aftermath of Katrina’s destruction, but before you praise that growth and what it will do for the economy, consider the construction and purchase orders that do not exist in other areas of the country as a result of consequentially high prices. The thought of economic triage comes to mind.

Replacing what was there but has since been destroyed, we must point to the denied loans for previously planned projects and look instead at the redirected capital focused on reconstruction. In short, a Virginia developer will need to convince the bank that their need for a new development supercedes the flow of investment into the Katrina-impacted land. Such will be a tough sell.

As demand rises (and consequently prices) due to the rebuilding of the Gulf Coast, consider all of the companies that must downsize or outright close down operations as a result of their inability to cope with price that will surely rise. I hope any commentator who will eventually point to the great economic effects of Katrina will eat their words.

As I have visited this issue before, I will continue to do so here. To think of your house and its increasing equity as a moneymaker or source of income to drive increased consumption, you are greatly mistaken.

I point to those of us who are thinking well beyond their means when they acquire a home through a contrived interest-only scheme where all of their money goes to pay down the short-term interest, provide no equity and expose the buyer to 100% of the risk of the rising interest rate. Under a fixed-rate mortgage, the buyer is at least provided the limit of exposure to only the rate the buyer agreed to pay through the balance of the loan.

But consider the enormous number of young people I know who purchase homes at the reinforcement of their parents (who overridingly consider the American Dream to be owning a home) with no-money-down and buy into the fiction of long-term benefits of interest-only loans. At best, such homeowners will have to settle for refinancing (plus additional costs) to acquire a fixed rate loan at a higher rate later on when reality intersects with the fantasy-driven home-loan market.

At worst, given that the future is unpredictable (how many forecasted the devastating impact of 9/11 or Katrina?), many will be exposed to rising rates all the way through the expiration of their interest-only period and will be forced to decide between refinancing at the currently-presiding rate or take on the ensuing rise of mortgage costs to reflect the reality of the interest-rate market rather than the fantasy they’ve been protected from for the past five or seven years.

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Short-term Surge in Gas Prices

Gas Prices, which have seen a certain spike in the past five years, have incurred an even steeper price increase in recent weeks. Anecdotally speaking, the price of 93 octane gas (I have yet to be convinced to compromise my Acura’s performance for a short-term gain of a few marginal cents per gallon) has risen in my area from $2.91 (from Tuesday) to $3.70 as of today.

Up until Katrina’s impact on our economy, I have been reluctant to express concern over the price of gas or our current supply. Holding all things constant, any and all effects would be short-term and surely solved in the long-run.

Am I concerned over the “dwindling” world’s supply of oil? Not at all. Am I concerned over the increase in the average price of a gas fill-up over the past five or so years? Only as far as the direct short-term effects are felt by producers, wholesalers, and retailers and eventually passed on to consumers.

While you may think my answers to the above questions arise from my ignorance; rather, they are due to my faith (if not understanding) of economics.

In the case of the world’s oil supply, let us consider that in 1914, the US Bureau of Mines predicted American oil reserves would last only a decade; in 1939 and 1951, the Interior Department estimated the oil supply to last merely 13 years. And then there’s the infamous Chicken Little, President Jimmy Carter in 1977: “We could use up all of the proven reserves of oil in the entire world by the end of the next decade.”

Shall we begin with proven oil reserves? “Proved” oil reserves have increased from 677 billion barrels in 1982 to 1,048 trillion in 2002. By proven, we mean quantities that can be recovered from known reservoirs assuming current economic and operational conditions. Considering the above statistics, in 20 years, the worldwide proven oil supply has increased by 55 percent; in contrast, worldwide consumption (including that of the usually suspected culprits of the US and China) has increased by merely 13 percent.

Given the option, I’d opt for high priced gas rather than none at all.

What naysayers and nondescript Chicken Littles appear to forget is that examining inventory statistics of resources is only half of the picture. To ignore technological advancements as well as basic decision-making of economic actors implies a great deal. For example, consider supply and demand. As prices rise, consumers are forced to determine whether or not that marginal car trip is worthwhile.

If anything, supply and demand is the perfect justification to fight aggressively against any action by the state or federal authorities to set price controls or attack so-called price gougers. Given the option, I’d opt for high priced gas rather than none at all.

What do some government officials think will be the consequence of preventing gas sellers from charging the actual price of gas, rather than what some bureaucrat has arbitrarily determined is an appropriate price. The gas lines of the 1970s that will so painfully remain in the memories of those who witnessed them, were not the product of the free market, but rather the pig-headed and arbitrary decisions made by foolish lawmakers.

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Consumer Confidence

Consumer Confidence, which has been on the rise in recent months, is extremely responsive to incidents such as Hurricane Katrina. Under ordinary circumstances, news of the devastation from hurricanes or other natural disasters tends to drive consumers to respond with great fear for their individual ability to find jobs in the near-future, or assess their own present economic situation.

By breaking down the most recent Consumer Confidence Index, the majority of the gain came from Present Situation (increased to 123.6 from 119.3 in July), rather than the other half of the Index, the Expectations Index (increased to 93.7 from 93.2).

In other words, the current gains in consumer confidence arises from our short-term outlook, while our expectations for six months ahead are aggravating our concerns. Why the short-term concerns? This leads me to my third concern, gas prices.

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Gain in Temporary Jobs

The current gains in jobs is arising from industries that offer no long-term protection for workers (construction, accommodation, and food service sectors); rather, these are low-skilled industries that provide only marginal sustainability. The ebb and flow of economic tides drives hirings and firings moreso than in other sectors. (Think of the DC restaurant and service industry following 9/11.)

According to the Bureau of Labor Statistics, jobs gained most recently in August 2005 (approximately 169,000) were in industries that tend to have high levels of elasticity; rather, the marginal chance that they can be fired as quickly as they were hired is much greater when compared to professional industries where high skills tend to provide some level of a job protection cushion.

Even more worrisome is that the fastest growing industry continues to be the housing industry, which I feel to be overheating. The question remains: will housing developers be able to grow more jobs or even keep these peopleemployed when loans for future projects are denied? Greater need for that very capital will arise from the Gulf Coast as reconstruction is on all of our minds.

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Government to Red Cross: Stay Out of New Orleans

Just in case we weren't furious enough with the disaster relief efforts in New Orleans, now government officials are keeping the American Red Cross from entering New Orleans!

Jamie is so upset with this crisis that he has officially repudiated the Republican party and is back to being a libertarian. He's no longer capable of speaking in an inside voice about what's been going on and he's quite pessimistic about the likelihood of a recession.

The only blogger who is more angry than Jamie about this whole mess is Don Boudreaux over at Cafe Hayek. He's a native of New Orleans and this tragedy (and the clusterfuck of recovery) is hitting him especially hard.

Comfort in a Familiar Crowd

Looks like someone is listening to you, Christina.

New Orleans Tragedy

Jamie and I have followed the coverage of Hurricane Katrina with increasing anger and sadness. The chaos is quite disheartening and the absolute abandonment of duty by local officials is really sad. Mayor Ray Nagin blaming the Feds for their (typical) slow and bumbling response is not how you deal with an ongoing crisis. I'm reminded of the performance of Mayor Guiliani during the attacks on 9/11 and Mayor Nagin really looks incompentant by comparison. Granted, the crisis is more diffuse in nature than 9/11, but the NYPD and FDNY stepped up their efforts to meet the challenge they faced. It seems that the New Orleans emergency responders basically abdicated authority, especially when the looting first broke out.

But what is most appalling over all is the fact that all levels of government officials have been acting as if no one could have predicted such a massive crisis. That's absurd. Maybe if FEMA and the state and local authorities had spent time before the hurricane struck moving people out of town (using the school buses they have mobilized now) and moving recovery supplies into place there wouldn't be reports of folks going days without water and food.

Hopefully this will be a learning experience for everyone in the country that we cannot count on disaster relief organizations (government and non-government) to provide total care for us in case of crises. Each family needs to take precautions and buy emergency provisions and plan evacuation routes and destinations. It seems like such common sense, but how many people actually take the time to make preparations for disasters? Given what we've seen on the Gulf Coast, I would say not enough.

Best Buy Gets Better

Thanks to Virginia Postrel I read an article in the Post I otherwise would have missed.

Best Buy is one store that I actually enjoy going to. Any other type of shopping I usually avoid at all costs, but not trips to Best Buy. Jamie and I can enter and split up and each spend long periods of time just wandering through all the sections. It is not uncommon for us to each have a few items in hand when we meet back up. We negotiate and decide what should be put back and what should be purchased.

Up to this point Best Buy has never really wowed me with its layout or decor. It's merely more pleasant than Circuit City and the employees are more helpful. But all that is changing, for the better. Best Buy is on a quest to start appealing more closely to specific types of customers at each store.

[I]nspired by Columbia University Professor Larry Selden's book, "Angel Customers and Demon Customers," Best Buy chief executive Bradbury H. Anderson is on a mission to reinvent how the company thinks about its customers. Best Buy has pared some less desirable shoppers from its mailing lists and has tightened up its return policy to prevent abuse. At the same time, it has begun to woo a roster of shopper profiles, each given a name: Buzz (the young tech enthusiast), Barry (the wealthy professional man), Ray (the family man) and, especially, Jill.

Based on analyses of databases of purchases, local census numbers, surveys of customers and targeted focus groups, Best Buy last fall started converting its 67 California stores to cater to one or more of those segments of its shopping population. It plans to roll out a similar redesign at its 660 stores nationwide -- including about 15 in the Washington area -- over the next three years. The Best Buys in the Springfield Mall, the Fairlakes shopping center and Potomac Mills, for instance, are being transformed into stores for Barrys, featuring leather couches where one might imagine enjoying a drink and a cigar while watching a large-screen TV hooked up to a high-end sound system.

The Santa Rosa Best Buy, Store #120, is a Jill store.

Pink, red and white balloons festoon the entrance. TVs play "The Incredibles." There is an expanded selection of home appliances as well as new displays stocked with Hello Kitty, Barbie and SpongeBob SquarePants electronic equipment. Nooks are set up to look like dorms or recreation rooms where mom and the children can play with the latest high-tech gadgets at their leisure. Best Buy has new express checkout lines for the Jills; store managers say anyone can use them, but if you are not escorted by a special service representative they can be easy to miss. The music over the loudspeakers has been turned down a notch and is usually a selection of Jill's favorites, such as James Taylor and Mariah Carey.

I'm married to a Buzz, and I'm not quite a Jill since I don't have children and don't find the old-style Best Buy intimidating, but I know I will greatly enjoy shopping at my local Barry-centric store.

Now that I think about it, I have been meaning to buy a couple new CDs that were recently released. I know where I'm going to get them.

Those Fries Will Kill Ya

I don't want Effin' Eh to start seeming like some Cali-bashing blog. But, if ever Cali needed some bashing, it's now.

California is now suing McDonald's, Wendy's, Frito-Lay and Procter & Gamble (makers of Pringles) because their fries and potato chips contain teeny amounts of a substance that can cause cancer in lab animals in large doses and they never put a warning label on their products. (Hat Tip: Geek Press)

My dad was always fond of saying that in large enough doses anything, including water, will kill you. Moderation is the key. The problem is moderation doesn't warrant news coverage or fill state coffers, which the State is much more interested in than silly things like truth or rational thinking.

The Exodus From California

Merely anecdotal, but still interesting. (Hat tip: Division of Labor)

Some high income earners are leaving California because of its punitive tax rates. Could low- and middle-income workers be leaving as well? One crude measure is to examine the one-way rental rates for U-Haul vans. Using U-Haul’s website, I queried a one-way rental for a 10-foot van for October 1st, 2005.

One-Way Trip	Price
Los Angeles to Las Vegas	$454.00
Las Vegas to Los Angeles	$119.00

According to U-Haul, demand to leave Los Angeles and to move to Las Vegas is greater than it is in reverse (more than 3.5x as much).

Who Will Say No More (Bullshit)

I was emailed this article by a coworker and had the following response:

By sending this, are you suggesting we move towards a Marshall Plan 2.0? If that's the case, perhaps a history lesson is in order.

The Marshall Plan was put into action (by Harry Truman, mind you) to reconstruct Europe following WWII, entirely through the actions of the US and its deep, deep pockets. In your heavy desires to point the finger at neocons for their conspiratorial ways to conquer the world with their beliefs and crazy ways, let us not forget the origins of such US-centric World Police behavior.

As a result of the Marshall Plan, Euro nations drastically reduced if not eliminated their entire budgets for national defence because the US was providing said services free of charge. Is there any wonder why they are bitching and moaning about our troop level reductions 16 years since the fall of the Berlin Wall?! They may actually have to cough up money for their own defense. What an international travesty!

And on the topic of troop removal from Iraq, hmm yes. Let's take Hart's cue and relive another Somalia.

Puuuuuuuuuhhlease!!!

As I said before, wringing your hands and shaking your head is not a valid international policy, unless of course you are consumed by fantasy land. If that's the case, let's forget a political discussion, and instead focus on our priceless wants and desires rather then how to deal with reality. I'd like a pony, and some pretty moon beams. But that's just me. What about you?

Since you neglected to give any indication of what you believe beyond merely forwarding along someone else's opinion, I'm going to have to assume you agree with Hart down the line. If that's the case, you may need to re-evaluate a few things, particularly if you care to claim to be a humanitarian. I assure you there are plenty of recently emancipated muslim women (additionally, children as well as men) who would take great issue with you and your so-called humanitarian cause to return them to dicatatorial hell.

No one ever said that war isn't hell. People die during combat. That's a fact, and one that the administration has never denied. So move on.

The only place I agree with Hart is where he says that the Democratic Party is in serious trouble. But our similarities end there. Democrats aren't pathetic for silently allowing Bush to his deeds. Rather, they are pathetic for not offering a reason why he (we) shouldn't.

And don't even get me started about the convenient bemoanings of the opposition party when it comes to deficits. I just don't want to hear it. The power of the purse is a motherfucker. However, here's a brief civics lesson: the pendulum swings both ways. The remaining constant is clear: government. Budgets grow no matter the majority party. Further, where is the fiscally conservative streak in your precious Democrats when it comes to striking down particular pet projects?

It's really too bad that public choice theory isn't more widespread in political science classrooms; ignorance is a bitch.

And while I'm bitching about perhaps Hart's worst paragraph of the entire screed, "diverting revenue from education"?! Bush has increased federal spending on education beyond the NEA's wildest dreams. Their complaint isn't with his added funds, it's with his increased expectations. To, I don't know, actually expect teachers to teach, and not just socially promote illiterate students who waste university resources. Unschooled (socially promoted) children don't vanish; they merely go to college and dumb down the overall curriculum or, even worse, enter the workforce and drive the employer to carry the burden to train the unskilled youth. I'd rather we get it right the first time, not the second, third or fourth (I'm sensing a pattern, aren't you?).

Frankly, if you want to bicker over the administration's justifications for going to war, so be it. But I just don't care. I was for removing Saddam and tilting the primitive balance towards individual liberty long before Bush was even elected. We didn't finish the job the first time. If you don't know what I'm talking about, I suggest watching Three Kings. That may help.

Hart has always been a buffoon. I largely blame his mentor, a misguided pacifist unable to see the forest through the marching Soviet soldiers wielding AK-47s and BT-5s who may have appeared to look like trees. Only they were more brutish and less human (institutional poverty has a tendency to have that effect). It is no surprise Hart is willing to carry on McGovern's absurdity and prance about as though megalomaniacs and their brainwashed goons will interpret us putting our guns down and walking away as a sign of good faith. To them, it's an open invitation to get one inch closer to their absolute goal: total devestation across an impoverished world.

I'm not willing to give them that, as Hart apparently is. You and your party can take it bending over, but leave me and the recently-freed Iraqis out of it.

Honestly, what is it you have against Islamic women or natural rights in general? I'm just curious.

Distinctions Made Clear

We love death.
The U.S. loves life.
That is the difference
between us.

--Osama Bin Laden, in an interview with a Pakistani journalist, with American bombs heard and seen exploding in the background.

There should be some solace in knowing that this is how Bin Laden identifies the distinction between our two cultures. However, following a rather emotional viewing of the National Geographic two-part series, Inside 9/11, I can confidently say that I feel no added comfort.

Throughout the four hour program, there were numerous images and stories that had the potential to bring me to an utter meltdown. While I trembled through the countless replays of the explosions, the falling bodies, the phone calls to loved ones from doomed hostages, it was not until the very end that I completely broke down when Bin Laden's words were emblazoned on a black screen.

Thousands, if not millions of words have been written regarding the evil that resides in such a radical and hateful subset. If a terrorist's greatest tool is fear, it is that which drives others to join his cause. Simultaneously, fear is used to imprison those in his sights. To believe the line that Bin Laden and others before him throw to the meek and willing, you must be cynical and unwilling to see the beauty of life.

As an economist, I am always tempted to analyze and contemplate terrorism or any other man-made devestation as a question of incentives and utility: primarily, what actions are being rewarded; and secondarily, why do they derive pleasure from it? In the case of radical Islam, an impoverished people are being exploited with the guise of eternal bliss. Your life is utter shit, you say? Live for the afterlife, that's when the party really gets started.

If you follow any of the faulty logic here, these atrocities are being justified by the American disruption of muslim life in Saudi Arabia and else where. Meanwhile our involvement is only because poverty happens to be a necessary factor in their way of life, harbored by their anti-capitalist behaviors that essentially retard any potential progress. In their apparent view, progress is the enemy. If progress is the enemy, then poverty is their evil tool.

Following 9/11, it was difficult not to become desensitized to the media's use of heroism as a descriptor for how not only first-responders but normal everyday people acted in spurs of the moment. Revisiting that dreadful day, hearing and seeing the stories of people called upon by no one but themselves to reach out a hand and help their fellow Americans gasping in desperation, it is clear how to define true heroism. Heroism was experienced by any man, woman, or child who woke up on that beautiful, cloudless Tuesday in mid-September, and reacted with deep sadness and a heavy heart for those who bravely lived the moment.

I feel very optimistic: Progress will lead to a positive outcome; evil doesn't have a chance.

Michael Yon : Online Badass

My friend, Jamie Johnson, turned me on to this rad blog. This guy is basically a blogger embedded in Iraq. But the truly badass part about it is that he is 100% independent of any media organization. He is taking pictures and writing about what is really happening on the ground over there, without the filter of editors or producers.

Why is the Glass Ceiling Still There?

40 years after the advent of the sexual revolution and women still make up a tiny percentage of corporate leadership. The Economist asks why that should still be the case, and indeed, it is a good question.

Why is it proving so difficult for women to reach the top of corporations? Are they simply less ambitious, less excited by the idea of limitless (albeit first-class) travel, late nights and the onerous responsibilities imposed by mounting regulation? A 2002 survey of top executives in American multinationals around the world did find them to be less ambitious, at least for the very top job: 19% of the men interviewed aspired to be CEO, whereas only 9% of the women did. At a slightly lower level there was less difference: 43% of women hoped to join a senior management committee, compared with 54% of the men. Catalyst, on the other hand, says that its research shows that women and men have equal desires to have the CEO job. “Ambition knows no gender,” says Ilene Lang, the president of Catalyst and once a senior executive in Silicon Valley.

* * *

More and more too are withdrawing to care for elderly parents at a time when they are on the cusp of the higher echelons. Ben Rosen, a professor at the Kenan-Flagler Business School in North Carolina who has done research on the topic, says that many women bail out of corporate life to become self-employed consultants and entrepreneurs, roles where they can have greater freedom and autonomy to manage the rest of their lives. This may be reinforcing companies' long-held belief that they should invest less in women's careers because they are unlikely to stay the course.

The flattening of organisations in recent years, as layers of management have been stripped out, has meant that promotions now are far steeper steps than they used to be. This leaves fewer opportunities for people to re-enter the workforce at higher levels. And many women inevitably need to take time off during their careers. In America, there is evidence to suggest that more women with children under the age of one are taking time off work than was the case some years ago.

Since I have not progressed really at all in my professional life, it's hard for me evaluate how much of a woman's progress is reliant on male attitudes and how much is affected by life choices. But I will say that I am frustrated that all these studies and polls lump all men and all women together and then compare the results. Wouldn't it make more sense to compare people based on education levels, hours worked, years of experience, or any number of other variables that can affect your work and how you are perceived by your superiors and co-workers.