Kindle 2 Review

I've had my Kindle 2 for a couple of weeks now, and have decided to post a brief review.  Firs, I just want to say that I love it.  Not only did it meet all of my base expectations, but I found little nuances about the Kindle that made me like it even more. 

 

Many other reviews cover the basics of the Kindle.  I'll reiterate a few for convenience:

• E-ink is great.  It looks like ink on paper.  Its not backlist like an LCD screen so its very easy on the eyes and easy to read even out in the bright sunlight.
• Its very slim and portable.  It seems to have the perfect weight to it and its very thin.  I use the Kindle cover/protector so mine feels a little different than holding it bare.  However, the cover is pretty low profile and is really easy to hold.  I do recommend it to keep the screen safe, especially if you have kids or pets.
• It has free cellular wireless access through Sprint's Whispernet service.  This is a really nice feature that really sets the Kindle apart from the other e-readers.  I have a newspaper description that just shows up on my Kindle each morning, delivered wirelessly via Whispernet.  Obviously the biggest reason that Amazon provides the free wireless connectivity is so you will shop at Amazon's store to buy new books, magazines, newspapers, etc. for your Kindle.  The shop is easy, intuitive, and tempting.  Oh yea, you can use the little built in browser to get on the internet if you need to.  The Kindle was not built for web surfing, but it certainly works and can be useful in a pinch.
• The Kindle 2 has lots of built-in memory.  There isn't really much more to say about this feature other than - it's way more than enough memory for reading material.  If you ever get to the point of filling it up, you can simply archive your older stuff to free up room.

The above features are what made me want the Kindle when I first learned about it.  However, after owning one for a few weeks, I discovered other small nuances (not necessarily 'features') that make me love my Kindle all the more.

• The kindle sits nicely on a flat surface.  I never really thought about it until after I had one.  But with a normal book it is difficult to lay it flat and read from it without it closing or flipping pages automatically (unless it's a large hard-backed text book).  The Kindle of course doesn't have this issue.  I quickly discovered how useful this was when I was at home eating lunch and decided to read a bit while I ate.  I simply woke my Kindle form sleep mode and began reading; tapping the page-turn button every now and then. 
• The Kindle remembers where you stopped reading.  I knew that it had this feature, and I would have expecting nothing less from a $360 e-reader.  However, I didn't fully contemplate how convenient this was.  Its so easy to just wake the Kindle from sleep mode and start reading that I find myself not hesitating to read with I have a spare 5 minutes or so.  With a normal book I always felt like I had to get the book, relocate to a sofa or relaxing chair, and sit back holding the book with two hands while I read.  This pretty much precluded me from reading unless I had at least 30 minutes to spare.  I know that sounds ridiculous - but I'm just telling you like it is (for me anyway).
• I don't have to turn off the Kindle.  Basically, the Kindle uses no power while its displaying a screen.  It apparently only uses power while refreshing the screen (turning a page or loading a new menu) and when wireless is activated.  This means that I read and when I need to stop I just stop.  No bookmarking the page or turning off the Kindle.  Just stop reading, get up, and leave.  When you come back, wake it from sleep mode and there you go.  Just to be clear, it remembers where you last left off in every book you have on your Kindle, not just the one you are currently reading.  Additionally, you can set multiple bookmarks in a book.  Just add a bookmark with a description and you can jump to that particular page anytime you want, forevermore.
• The Kindle has a built-in dictionary.  Another feature I knew the Kindle had but did not realize how much I would appreciate it.  You simply move the cursor in front of a word and it pops up a brief definition at the bottom of the screen.  If you want a bigger, more detailed, definition you simply push a button and it takes you to a full screen definition.  Hit the Back button and you will be right back on the page you left off of.  Admittedly, my vocabulary is not that good.  Sometimes I get obsessive about using the dictionary and it breaks up the flow of my reading.  Regardless, you will find it very helpful when enough context clues are not there to adequately satisfy your thirst for an expanded vocabulary.

Those are the major points that, after a few weeks, I feel are worth mentioning.  Before I finish, I do want to point out that I think the text-to-speech feature is not that good.  It is one of those things that sounded "neat" when it was highlighted as a new Kindle 2 feature, but that in reality is next to useless.  If you are impaired and need to hear book being read, then you are most likely going to find a better product than a Kindle to read books to you (like an mp3 player and real audio books).  For anyone else, why would you want books read out loud to you in a computerized voice?  If you find yourself needing this feature, then you too may want to look into real audio books since they are nearly infinitely better than a book being read to you using a text-to-speech computerized voice.

 

 

9 coffee mugs...

I currently have 9 coffee mugs on my desk.  They are comprised of various shapes and sizes ranging from a small, glazed, ceramic, green mug with a bass on it, to a 32oz plastic thermos-style mug.

 

The mugs appear to be perched in eager anticipation of my next sip.  Most of them don't realize that the beverage which they contain has given up hope and has initiated the mold-growth stage.  No, I have never accidentally drunken mold.  Is "drunken" even a word? Drank? Drunk? Drinked? Whatever.

 

 

 

 

More twisting of facts and figures

It is bugging me that politicians against the stimulus plan speak to the American people like we are a bunch of morons.  Don't tell me that the stimulus plan that aim's to create 3 to 4 million new jobs is merely a "spending plan" because you calculated that the cost per job is around $900,000.  What kind of fact is that?  First of all, even at 4 million jobs for $1 trillion, you are looking at a number between $200k and $300k per job.  Second, what the hell kind of point is that supposed to be making anyway?  We aren't doing this to create jobs solely for the sake of creating jobs.  We are doing this to stimulate the economy.  This is by creating jobs and investing in the country's infrastructure (in many way). 

 

Would you rather create jobs at $250,000 per job and have new roads, bridges and schools to show for it - or would you rather create jobs at $100,000 each and get nothing in return for your investment?  Sure you can pay people to rake lines in sand and employ three times as many people and the economy will grow - temporarily.  Or you can pay a little more for tangible assets that will provide value to the country for many decades to come.

 

They throw numbers out there like $900k per job that aren't true and even if they were - like that is supposed to mean anything to the average citizen.  Ask the average person what the "ideal" cost should be for each new job created.  Not only would they have no basis for answering the question, even if they did - there is no right answer.

 

Try this analogy.  A new Interstate interchange was constructed by the DOT in my town for a cost of 50 million.  The project created jobs for approximately 120 people for 8 months.  The cost per job for that project was $416,000 per new job.  Pretty high number, right?  But who cares?  That is a useless statistic.  The point is that a bridge was purchased for 50 million dollars and it created 120 new jobs.  If that same 50 million dollars was used to pay people to rake circles in the sand you could employ 1500 people for 1 year to but when it was over you still have a collapsing Interstate interchange to go fix.

 

The stimulus money is not going to waste.  Not only will it create jobs, but it will get us caught up on critical infrastructure work that has had funding put off for a very long time.  As we come out of the recession of the forthcoming years, we will be able to focus on paying down our nations debt by running a budget surplus for awhile since our infrastructure needs will be at an improved state.

 

 

Balancing your checkbook

Ok, so I guess most people don't have checkbooks anymore - or at least don't use them regularly.  But surely you still have to keep your checking account register balanced?  I have not taken a survey on this, but as time passes I am finding out that more and more people I know haven't balanced their accounts in years, or even over a decade!

 

Am I the only one that still bothers with maintaining a balanced account?  Perhaps I am behind the times.  After all, with check card purchases the transaction clears the register in a day or two - so you don't have to worry about transactions outstanding for weeks or months.  I will point out, however, that I use very few checks, yet there is always at least one that hangs out there for months before being deposited.  It doesn't usually amount to much, but is still mildly annoying.

 

I guess I am just stubborn when it comes to this type of stuff.  I want to know that all accounts are perfectly balanced to the penny and I like to know where all money goes.  It's not that I am trying to be cheap (although I am frugal - there's a difference!), I just feel that it is good financial house keeping.  How else can you budget a savings plan or other expenses if you don't even know how much money you are making and spending?  Maybe everyone makes so much money now that they always have thousands of excess dollars hanging around in their checking accounts.  Even in that case I would argue that the accounts should still be balanced and maintained in order to more effectively utilize savings or investing plans.

 

 

The Man Time Forgot

I have to say, this was one of the most captivating books I have yet to read.  I realize that having read an unrespectable finite number of books this may not mean much, but alas it was also a NY Times Best Seller.

 

The story is of Briton Hadden, the lesser-known founder of Time Magazine (Time Inc.).  His partner, Henry Luce, lived much longer than Hadden and apparently made a concerted effort to take credit as the founder of Time.  Hadden is cast as an energetic, youthful, fun-loving, brilliant journalist who changed the style of American journalism forever.  Everyone who met Hadden loved to be around him.  He was always joking, pulling pranks, and was the center of attention everywhere he went.  It was his childhood dream to create a news magazine that would summarize the news every week in a clear, concise collection of stories and articles that told a tale of people and events like never before.  Even as a young school kid he talked about a weekly news magazine that could be folded twice and would fit in a shirt pocket.  Hadden was a brilliant writer even as a child.  He would become the editor for the Yale paper and be elected most likely to succeed by his classmates.

 

He followed through with his dream, and chose Henry Luce to start the company with him.  Luce was his friend and most competitive rival throughout his days at Hotchkiss and Yale.  Hadden always bested him and Luce often seemed quietly bitter about it - though he loved Hadden as a friend.  However, apparently Luce's unyielding competitive drive and determination to be successful would never allow him to treat Hadden like a true friend.  Twice while Hadden was alive Luce had betrayed him to advance his own agenda.

 

Hadden died at the age of 30, only a few years after starting Time.  He had become a millionaire the same year and Time was well on its way to national prominence.  Though visibly torn up by Hadden's death, Luce rarely ever spoke a word of Hadden for the rest of his life.  Luce was a brilliant business man and carried Time to where it is now as well as founding other successful magazine ventures like Life, Fortune and Sports Illustrated.  But Luce never really spoke of Hadden as the creator of Time. He never mentioned that Time was Hadden's idea originally and suppressed the fact that Hadden was the early genius behind Time and wove its early success.  Without Hadden, Luce would have never experienced life the way he did.  Hadden catapulted Luce into stardom, died at 30, and Luce never looked back.

 

I found the book to be sad towards the end.  It was hard not to love Hadden throughout the book.  He befriended the outcasts, took in stray animals, and was the life of every party.  To read about him laying on his deathbed, helpless, but still making jokes about it left me sort of empty.  I wanted it to somehow end with Hadden realizing the success of his dream and be quietly satisfied that he accomplished his life's dream.  Instead he died wanting much more out of life and left Henry Luce to steal his dream and take credit for it all. 

 

 

Is it the new year yet?

Just like that it's January 2nd, 2009. It's not that I expected some kind of hazy aura of change to sweep over my town; Yet, the the current state of my environment is slightly unfulfilling. Although my calendar changed, and I will inevitably have to strike through "2008" (as I am a creature of habit) on documents for 4 months, nothing has really changed.

I suppose this is one reason that new year's resolutions are so hard to stick with. Something prevented you from making those changes in 2008. You knew they were worthy of pursuit, yet fell into a routine that shunned complete efficiency in productivity. Whatever it was about you, or whatever it was about your life, that caused you to sink into a rut... well, it's still there in 2009. Of course when I say "you", I mean "I".

Nearly 14 years removed from my last physics course, I think the word I am looking for is inertia. I bet Isaac Newton was really good at following through with his new year's resolutions. After all, he was the first to discover the law of inertia, which is apparently what keeps our resolutions from fabricating. The law of inertia pretty much says that things don't change unless acted on by an outside force.

"When a force acts upon an object to cause a displacement of the object, it is said that work was done upon the object"

And therein lies the problem: work. Nothing will change without an outside force acting on it. Producing that outside force requires work to be done. Bummer.

Physics and experience tell us that it takes energy to do work. So all we need is additional, or better, ways of creating energy and our new years' goals and resolutions will be a piece of cake.

So what's my point? I really didn't have one when I started writing this post - but if anything, I guess my point is that just because the year changed from 2008 to 2009it doesn't make it any easier to do the things you know you want to do (or should be doing). Those things are still going to require the same amount of energy and effort to accomplish that they would have a couple of months ago. The only real thing that we have going for us now is motivation. And motivation can be a pretty good source of energy.

Reading regrets

Whenever I am asked to list my hobbies, or interests, I typically include "reading" on the list. I mean, I like to read. At least I think I do. I don't recall an instance when I sat back, cracked open a book and had a miserable time reading it. However, earlier this year I started inputting the books I read into a Facebook application that lets you review and recommend books - and I immediately realized that my list was very short for someone who claims to enjoy reading.

After scanning my bookshelf for awhile, and brainstorming for awhile, I realized that most of the books I own are not real books. I mostly seem to purchase informational, or reference type, books related to computer stuff, poker, home improvement, or investing. While these types of books are valuable to me, reading a reference book is not the same as reading a good biography.

When I trimmed my book list down to the real books that I have read - the list was shockingly short. Coincidentally (or not so much so), a significant number of the real books I read this year. It was at this point that I realized I have done myself a great disservice by not reading more for the first 32 and a half years of my life.

I should point out that I do indeed spend large portions of my day reading. But most of my reading comes from internet forums, blogs, news sites, etc. Regardless, nothing really compares to reading a dynamic, well-written biography, memoir or narrative history book.

I admit that I am not a big fan of fiction. While I do enjoy and occasional work of fiction, I feel like I am using up valuable reading time that I could be spending on a book that would have more meaning to me. So for now, I tend to fulfill any of my fiction cravings with movies (although I probably average less than 6 movies per year).

Call them goals, resolutions, or whatever - but one of mine in 2009 is to read more real books!

PBS Update

Just a quick update on the web site PaperBackSwap.com...

 

I initially listed, and mailed off, around 15 of my books that I was no longer interested in keeping.  This gained me an equivalent amount of "book credits" to spend on book that I wanted to request from other members.  The problem was that none of the "good books" were available and had very long waiting lists.  I was a bit put off because I unknowingly listed some of my very "good" books, which got snatched up immediately.  Apparently, in order to actually receive a book that was a best seller in the past 10 years, you need to be very patient (to the tune of 6 to 12 months it seems).  Considering the only best sellers that people actually seem to list are from people like me who are new to the site and don't know any better.

 

Of course I have since added more books to my request list and have received about 6 or 7 to date.  These are books that are older best sellers, or simply useful guide type books that are 5+ years from their copyright date.  To be fair, I am satisfied with the site - though not enough to push it on anyone.

 

Here's the problem with PaperBackSwap.com (though none of the member community will admit it)... their self-made book economy is flawed because they allow the purchase of book credits.  I firmly believe that without the option to purchase credits, the site would work wonderfully.  Instead, anyone can purchase a book credit for very cheap (around $3).  This means that you can sign up as a new member and put hundreds of nice hardback best sellers on your wish list, and wait.  When your name comes up and the book is available it will hold the book for you while you purchase a cheap book credit, then let you complete the request.  So you can basically end up getting the best book on the site, without having to list a single book of your own.

 

The problem this creates is an enormous balance skew of demand vs. supply.  There is a huge demand for the books that are in least supply.  If there was no option to purchase book credits, then the only way that people could generate a credit would be when another member requests a book that you have listed.  This would maintain a balance of supply vs. demand since you basically receive no credits unless you list books that there is at least some demand for.

 

I understand that the creators of the site need to make money to keep the site going.  However, by selling book credits they have put the site into a tailspin that is probably irreversible.  Despite this fact, the site has been around quite awhile.  Although I do not know when they stated selling book credits.  While PBS is the biggest site of this type currently out there, others exist and they seem to be growing pretty fast.  The problem for me is that I already dumped most of my expendable books.  Guess I'll have to hit the yard sales this spring!

I just realized I have to dust...

Apparently the cleaning crew at my office doesn't dust.  I suppose that deep down I knew this already, but it didn't consciously occur to me until I started cleaning up my office for the 2nd time in 2.5 years.  Apparently they do vacuum though, which leads me to my proposed solution below. 

 

I know you aren't supposed to use those fluffy dusters-on-a-stick because they mostly just deploy the dust particles into the air, only to re-settle a few minutes later.  However, statistically, if I repeatedly dust off the elevated surfaces, I will be dust free (or close enough).  This works for the same reason that road debris ends up on the shoulder or in between two lanes.  Cars basically keep hitting it until it lands in a spot that is out of the way. 

 

The same goes for the dust.  I will continuously dust it off of the elevated surfaces and let it re-settle.  However, each time some of the dust will re-settle on the elevated surfaces and some will fall to the floor.  The more I do this the closer I will get to 0 dust particles on the elevated surfaces.  I suspect, however, that this is asymptotic and I will never reach zero.  But it doesn't really matter because "close" is definitely good enough in this case.

 

 

My Kindle Quest

The Amazon Kindle is an "e-reader" that was released about a year ago by Amazon.com.  While there have been many eBook readers offered by various electronics companies in the past, none have caught on quite like the Kindle has.  Since the day I learned about the Kindle I was intrigued.  Now that it has been out for months and I have seen the number of sales and the read all of the positive reviews, I feel inclined to push forward with my plan for purchase justification. 

 

The Kindle uses a relatively new display technology referred to as "e ink".  The display is not backlit like an LCD so that it is much easier on the eyes.  According to all of the reviews, its very cool technology and you can read for hours without getting eye strain like you do when looking at a computer monitor. 

 

There are well over one hundred thousand titles for the Kindle and more being released daily.  In addition to Kindle books you can get various newspaper, magazine, and blog subscriptions.  You can also send PDFs or Word files to your Kindle - which get converted to display on the Kindle.  It has enough built-in memory to store hundreds of books.  Additionally, you can add an SD memory chip (up to 2 GB) to increase its capacity to thousands of books.

 

Perhaps the biggest upside of the Kindle is the free cellular internet access.  You can connect anywhere that you would normally get a Sprint cell signal.  This allows you to connect to the Amazon bookstore and order books for downloading to the Kindle anywhere, anytime.  This service is built into the Kindle and there is no additional monthly fee or anything like that.  You also have access to Wikipedia through the Kindle.

 

Another seemingly neat future of the Kindle is the built in dictionary.  Anytime you see a work that you want to look up you simply scroll up to the line that the word is on and press a button and it shows you the definition.

 

The only two problems I have with it is 1. the price and 2. the availability.  Its nearly $400 and its been on backorder since its release.  The Kindle site says that it currently takes 11 to 13 weeks to receive your Kindle upon placing an order.  Prices on eBay are going for nearly $600 due to the limited supply on Amazon (and presumably needing them before Christmas)

 

Oh yea, there is apparently a Kindle 2 coming out in the near future.  It primarily addresses some of the ergonomic concerns that people had with the Kindle (accidentally pushing the 'turn page' buttons).  I hear it will have more built-in memory, but no expansion slot for a memory card (hmmm...).

 

I guess it might make sense to wait and see what happens with the Kindle 2.  Even if it's not substantially better than the Kindle, at a minimum there should be a significant price drop on the original Kindle.

 

Here's the link to the Kindle if you are interested in reading more (theres a short video too): http://www.amazon.com/Kindle-Amazons-Wireless-Reading-Device/dp/B000FI73MA

New Style

Reading back through blog entries this fall, I realized that I became a little cynical and abrasive.  While its good to express your views on the world, that's not really what I wanted this blog to be used for.  So I will get back to using this blog for much milder topics and keep away from criticisms of economic theories and such.

 

 

Survey Assumptions

"When you assume, you make an ass our of u and me" - or something like that. 

 

Anyway, I was reading a article about home economics and consumer spending.  The author referenced a study that showed how sales of LCD TV's had dropped off significantly at Best Buy, yet how sales of the same product type had increased at Wal-Mart during the same time period.

 

The author subsequently assumed that this phenomena was due to consumers cutting back spending.  The point was that most consumers are missing the big picture when it comes to personal economics.  They feel that somehow they are being financially responsible by shopping at Wal-Mart for a product that represented irresponsible spending regardless of where it was purchased from.  The author went on to elaborate how people psychologically justify purchases, etc.

 

The reason I am bringing this up is because I find it interesting that they spend a lot of effort to perform this study, yet it seems like 30 seconds was spent on interpreting the results.  Why would they blindly assume that the study (decreased sales at Best Buy and increased sales at Wal-Mart) meant that the average consumer was trying to be more frugal than they used to be?  They are saying that the same people who would normally purchase a TV at Best Buy is now choosing to purchase at Wal-Mart.

 

I offer a different interpretation of the results of that study.  Perhaps the frugal (cheap) people like myself, were just waiting for prices on LCD TV's to drop, or at least stabilize at a low point, before purchasing.  This group of frugal consumers were going to purchase their LCD TV's at Wal-Mart regardless.  It just so happens that prices on LCD TV's have come down to a point where the frugal shoppers have determined that this is a good time to purchase a TV.  Perhaps Best Buy's sales have dropped because their average customer is not fiscally responsible and most of them are now in over their heads - and those consumers are no longer purchasing LCD TV's anywhere.  Not at Best Buy.  Not at Wal-Mart.  They will continue to consume their giant lcd or plasma TV that was purchased 7 months, or 5 years, ago until they get their next stimulus "rebate" check in the mail - at which time Best Buy will be happy to cash it for them.

Spreading the Wealth

I'm getting a little tired of the term "spreading the wealth" being thrown around in the media.  Somehow they have convinced most of the voters that this means "steal from the rich, give to the poor".  I understand the sentiment - I really do.  People are scared to death of the idea that someone who works hard and makes money will have it taken from them and given to someone who is lazy.  Fortunately, this is not what is going on, nor what is proposed by anyone.

 

Every economy has a wealth and income distribution curve associated with it.  While the income distribution can easily be calculated, the wealth distribution is nearly impossible to calculate.  This is because most wealth is in the form of unrealized capital gains.  The income distribution is traditionally put into perspective using the Lorenz curve.  Plotting the income distribution using the Lorenz curve method allows you to calculate a ratio called the Gini ratio. 

 

A Gini ratio of 0 would represent total income equality where everyone in the country had the same amount of income.  A Gini ratio of 1 would represent the other extreme where all of the income in the entire country went to 1 person.  Other industrialized nations like Canada, England, Germany, Japan and Sweden have an Gini ratio between .25 and .35.  This range is typically considered to represent a healthy economy.  Non-industrialized nations like Nigeria and Brazil have Gini ratios between .51 and .59.

 

So what is the Gini ratio of the US?  It is currently about .46 and even got as high as .47 in 2006.  We have the highest Gini ratio of any industrialized nation and are much much closer to countries like Nigeria than we are to some of the healthiest economies in the world like Sweden (.25).

 

By the way, some people have calculated the curve based on an estimation of wealth instead of income and the United States was close to 0.90.

 

Anyway, when you hear the term "spreading the wealth" or "income redistribution" this is referring to the idea that we need to get our income distribution back to a health number or we will end up in dire straights eventually.  There are many theories as to why the current income distribution is reaching such dangerous levels - though none of them give a complete explanation.  We do know one thing though, is that when 99% of the money in the country is in the hands of a few powerful people, bad things start happening. 

 

No one is proposing to steal money from hard working Americans and give it to lazy bums.  The tax adjustments are a temporary fix to a bigger problem.  Do you really think that CEO's earning 120 million a year, who are performing illegal manipulative accounting schemes to boost stock values and their pay (which is always tied to stock price), and getting tens of millions in the form of a golden parachute when they get fired - do you really think these people are "working hard" and "earning" their 250 million dollar pay days?  These people at the top are being handed tons of money at the expense of us.  They are paying lobbyist to block bills that give the SEC the power to regulate their shady accounting practices.  They are donating millions to campaigns in return for getting riders on bills passed that allow them to hide their money and avoid hundreds of millions in taxes.  They are getting bills passed as favors that allow them to setup "mailbox" satellite offices in Bermuda and claiming it their headquarters thus qualifying as an international company any saving hundreds of millions in taxes.  These are some of the corrupt things that are going on and are just a few examples of "behind the scenes" crap that the Bush administration has done. 

 

Who do you think shoulders the brunt of this when tax revenue mysteriously falls short tens of billions of dollars?  Why is no one uneasy about the fact that we are borrowing nearly 400 billion dollars a year from China?  Why does no one care that we are more than 10 trillion in debt and going in the hole 500 billion per year more - year after year (ever since the bush tax cuts went into effect). 

 

Which reminds me... the bulk of the proposed Obama tax plan is merely cancelling the irresponsible '01 and '03 tax cuts that the Bush administration implemented and put us into this deficit block hole that we are spiraling deeper into currently.  He will extend the Bush tax cuts for people making under $250,000 and cancel it for people making over $250,000.  He will also fix the Alternative Minimum Tax - and if you do not know what that is, you may want to read up on it because if it is not fixed it will end up costing middle class Americans thousands of extra dollars in taxes (per year) within a couple of years.  Imagine doing your taxes and seeing a $3000 refund, only to find out that you are now subjected to the AMT and end up owing $2000 instead.

 

Anyway back to the income distribution topic.  Above are some of the reasons that the Gini ratio is getting dangerously unhealthy.  Granted there are other reasons too that are almost beyond our control (like baby-boomer and the technology shift).  But tinkering with rates to help offset some of these things temporarily will help stabilize the economy.  This isn't socialism, or communism, or robin hood economics.  The Obama tax proposals are the result of intelligent discussions with economists who have researched this stuff for decades and are making informed decisions on how to keep the economy from crashing, and maybe even make it healthy again.

 

People should really quit trying to use cries of "socialism" and "communism" as a scare tactic because the average voter is a lot smarter than you think.  I mean, that type of stuff worked when I was in the 5th grade and would typically get a fight started, but people today a little bit more informed and know what's really going on.  So it may be worth it for people to save their breath and their dignity and come up with a better scare tactic.

 

 

Krugman on the Economy

More good stuff from Krugman. I found this video clip at http://www.charlierose.com/shows/2007/12/26/1/a-conversation-with-paul-krugman

The Rules...

For those of you who have been redirected to this wonderful blog, but perhaps were expecting to find a different document, click here for that which you seek.

Debate gripes

Why does the moderator feel so compelled to cut off the candidates after 2 minutes?  Ok, why even set those guidelines going in?  I want to hear what they have to say, yet every time they get going good, they are cut-off.  Aren't we missing the point of the debate? 

 

If you force them to explain their policy in 120 seconds there is no possible way that we can know which one is better.  They are better off using their sliver of time to give us a web site address that explains their policy in more detail. 

 

I guess its just style over substance and we are expected to expect it to be that way (try saying that three times real fast). 

Rained out

So it doesn't rain for two months, then drops two inches of rain on the morning of national "walk-to-school day".  I chuckled at the sight of wet, overburdened baloons lining the sidewalks near the schools.  I don't know if that makes me an ass, or if I just see the lighter side of things.  Either way, I can't help it.  Perhaps we can walk Caroline to school on Friday after the front has passed and the weather is 68 and sunny :)

 

 

Cutting Taxes??

Am I the only one that thinks that proposed tax cuts are a horrible idea right now?  This is obviously vote-getting propaganda by both parties.  I mean, think about a scenario where one of the candidates would come out and say, "My plan does not involve cutting taxes".  Their poll rating would drop 20% over night.  Yet they both propose cutting taxes at a time when the national deficit is increasing at a staggering rate. 

 

You're going to swing a multi-trillion dollar a year deficit by cutting taxes and cutting some spending?  Trillions of dollars!  C'mon, we aren't THAT dumb, are we?  All while ramping up war efforts?  Who cuts taxes during a war, anway??!!! How is that even possible??  Nothing adds up anymore.  We even have calculators. And computers!  Why won't they use them?  There are no excuses for ignorance at that level.  You don't go to war and cut taxes at the same time unless you are trying to win a popularity contest.  Oh yea. Its like quitting your job and buying a house in the same week.  Sure, you get what you want - but the piper is on his way, he's pissed, and he is bi-lingual!

 

The trickle-down theory is so elementary that people feel like they can understand it - at least when its presented to them by the media heads.  I guess if you can't understand something you won't vote for it.  Makes sense, right?  Which is exactly why it's a horrible idea to even bother explaining this crap to people. 

 

The reason we use a representative democracy is to avoid situations where you have uneducated citizens making complicated decisions regarding the nations economic policies, for example.  You wouldn't want a pie maker making decisions on how to design your vehicle, right? 

 

Unfortunately, the representative democracy plan falls apart when the voters are fed bogus one-liners - and for the most part base their opinions on them.  Does it really make any sense for the candidates to get into grave detail about the intricacies of their proposed plans and policies?  As a whole, we are not smart enough to know which ones work better.  You can tell me that you plan on abolishing the mark-to-market account method, but that doesn't mean anything to me without taking several courses and economics and accounting.  That is, until I turn on the radio and hear Rush Limbaugh preaching about how this plan would save the country and that Obama is an evil, terrorist, un-American moron.  Now I have become a well-informed, empowered voter...

 

It makes much more sense to vote on a candidate's overall goals, ideals and leadership ability.  Sadly, with the games that are being played and the media feeling the need to heavily influence people's decisions - it takes a lot of effort to determine these things.  Perhaps it should be a requirement that you have to have written at least one auto biography no less than 8 years prior to running for president.  At least this way, we would have a fighting chance at learning something real about the candidates.  Of course, only a tiny fraction of the population would actually read the books; I guess for the same reasons that more people vote on american idol, than for the president of the united states.

 

Work-to-Pay

Perhaps I use this concept to justify laziness. Or, I am on to something! Fine, I know this is not uncommon knowledge - but surely it is deserving of a diggigy dan blog entry... especially considering there are no qualifications for diggity dan blog entries.

So many variables. It behooves me to generalize. But generalizing is efficient, so screw it.

Generalizations:

• We work for money
• We use money to buy happiness (health, time, friends)
• All work is not equal in terms of effort

Ok, so my point is that when choosing a job, career, or new position take the above points into consideration. Consider the work you will be doing and the effort involved. My current job requires roughly half the effort of my previous job but pays the same. Effort can refer to the comfort level of the tasks that you have to perform, or it can refer to the amount of time you have to spend doing your job. This would include things like travelling or working at home.

For the sake of discussion, lets say you have a job making $50k/yr but it is a difficult job. You commute an hour each way, you spend 9 hours at the office, you have to deal with a bad boss, and you have to get dirty doing "field work'. Then you get offered a job for $40k/yr but the work place is 5 minutes from your house and you have a nice office. On top of that you get more vacation time, more holidays, nicer work vehicle, phone, pda, computer, etc and you get to work on things that are somewhat interesting most of the time.

So to estimate the overall work/pay ratio you need to estimate the "effort" variable. Since there is no standard way to quantify this, we can make something up (its ok, I do this all the time!). I propose taking the total number of hours worked the multiply that number by various "correction factors" in order to take into account everything that matters. For the $50k/yr job we had a 2 hour commute and a 9 hour work day, so we start with a base of 11 hours. Since the work involved a bad environment (boss, labor, etc) we can multiply it by a factor of 1.5 (this is actually several correction factors lumped into one for simplicity). This gives us the equivalent of 11(1.5) = 16.5 hours. Multiply this by the number of days worked in a typical week. In this case I will use 5.3 to account for some Saturday work...

16.5 x 5.3 = 87.45

Multiply this by 52 weeks = 52x87.45 = 4547.4 hours
Subtract vacation and holiday hours (8x10 + 5x8 = 120)
so, 4547.4 - 120 = 4427.4

Now divide this number by your annual salary in thousands = 4427.4 hrs / $50k = 88.55
This is sort of like the number of "effort" hours worked for $1000.

Now lets do this same thing for the $40k/yr job.

8.2 hours of work times a factor for a job that's easier than normal 0.7 = 5.74
Times the number of work days in a week 5.74 x 5 = 28.7 hrs
Times 52 weeks = 28.7 x 52 = 1492.4 hrs
Subtract holidays and vacation (168 hrs) 1492.4 - 168 = 1324.4 hrs
Divided by the salary = 1324.4 / 40 = 33.11

So the first job paid more but took the equivalent of 88.5 "effort" hours to earn each $1000 of pay.
The second job paid less but ended up only taking 33.11 "effort" hours to earn each $1000 of pay.

This should mean, in real terms, that the second job is more than 2.5 times better than the first job. It's quite amazing how all of these factors can really affect the value of a job.

Now obviously there is ambiguity in assigning "correction factors" to adjust the actually work hours into "equivalent effort hours" - but the adjustment needs to be done. How much you value a good boss, or easy/interesting work, etc is up to you. But it truly does benefit you to be honest in the assessment since the outcome of this exercise can tell you a lot.

Anyway, if you take away all of the numbers from the analysis all I have really said is that there is a lot more to a job than the pay. It behooves you as an individual, spouse, and/or parent to keep yourself in a position to make this assessment and act on it. In other words, it may not be best idea to get your first job out of school, then jam yourself up with so many bills and expenses that you are stuck having to make a certain salary at the expense of so many other things.

That's all for today.
War Eagle!

Government Bailouts

I don't see the benefits of complete deregulation. It has been researched and shown over and over that a complex market can not survive if only left to its own forces. If you care to know, there is a pretty interesting book called "Reinventing the Bazaar", and it is basically a brief history of markets. It is a good book (a tad on the academic side) that illustrates by real example why certain markets have failed throughout history. Some were over-regulated, but most were lacking proper regulation. Also, the concept of a "failed market" varies, but I digress.

Why would we allow these financial institutions to dig a hole so deep that we are now in a position that we either have to bail them out, or suffer an economic collapse? I understand that we don't want to regulate so many things that it hinders the success of corporations and small businesses. But do you understand what was happening? Without proper regulation in place each person or company was doing what was in their best interest, despite the effects it would have on the next person on company in the chain.

The entire process was profitable from top to bottom AND at the same time nearly everyone involved could pass along the risk to someone else. The mortgage brokers were pushing these insane, high-risk loans because they were being paid on commission. The banks were offering the loans because the underwriters were allowing them. The underwriters were allowing these high risk loans because they were passing them along by bundling them up and selling them. Fund managers taking on these risky "assets" because their pay structures were based on short-term performance. Investors were buying into these funds because of the phony ratings that were given to the packages.

So when it all fell apart, the brokers had made tons of money, some banks got out unscathed, and the fund managers retired wealthy (after 3 yrs of work). The cat is out of the bag and the investors are trying cutting their losses now but the financial brokerage firms are out of cash, thus insolvent - and the underwriters are experiencing a large spike in foreclosures to go with all of this. So the government steps in and puts nearly a trillion dollars on the line to try to keep the country from imploding into the next great depression.

A few simple regulations in place would have put restrictions on lending practices and none of this would have happened. Everything can't be left to the market unless we are willing to take the bad with the good. Unfortunately the bad could mean collapse.

And by the way, from a more broad perspective, the economic boom we had wasn't real. Sure we all got bigger houses, bigger cars, and nicer toys - but it was all on borrowed cash. There was no real prosperity as we now know. It's not like our country was actually producing anything. In fact, we are producing far less than we were 60 years ago. We have converted into a services economy... and that's bad because services are expendable (as we see when jobs get exported). So where did all the cash come from, then? Take a look at the national deficit. We borrowed it from other countries by selling billions and billions worth of bonds. Oh yea, we went ahead and printed a lot of it too.

Why print more money? Seems foolish right? After all, it obviously will create tons of inflation if you just crank up the presses every time you need some windfall cash. Well think about what inflation does to debt. If the value of the dollar plummets to near nothing it becomes pretty damn easy to payoff your outstanding debts. This is why it is considered common knowledge among economists that the federal government secretly likes as much inflation as we can handle. One of the worst things that could happen is to be gravely in debt and experience massive deflation of our currency.

All we have to do is put a little regulation in place that doesn't allow people to act so irresponsibly that they crash the entire economy. If we get back to financial responsibility and build a mature economy, we can get back to being prosperous. I understand that McCain wants to keep people calm and give the impression that the economy is "still fundamentally sound", but it's not. I hope he understands the real issues and is simply playing a political game - surely this is the case. We need to produce things again, we need to quit borrowing money and we need to regulate some things, otherwise we will continue to dig the hole until it reaches China.