Unseen Academicals - Terry Prachett
Jennifer Morgue - Charles Stross
The Truth about Organic Gardening - Jeff Gillman
Carrots Love Tomatoes - Louise Riotte
1635: The Dreeson Incident - Eric Flint, Virginia Demarce
Natural Capitalism - Paul Hawken, Amory Lovins, and L. Hunter Lovins
Spook Country - William Gibson
Beginnings, Blunders, and Breakthroughs in Science - Surendra Verma
Why Beautiful People Have More Daughters - Alan S. Miller & Satoshi Kanazawa
The Elements of Moral Philosophy - James Rachels & Stuart Rachels
His Majesty's Dragon - Naomi Novik
Consilience - Edward O. Wilson
Space on Earth: Saving Our World by Seeking Others - Charles S. Cockell
Fundamentals of Hazardous Waste Site Remediation - Kathleen Sellers
After the King: Stories in Honor of J.R.R. Tolkien - Various Authors
A Beautiful Math: John Nash, Game Theory, and the Modern Quest for a Code of Nature - Tom Siegfried
Billy Boyle: A World War II Mystery - James R. Benn

I haven't commented on too many of the books I've read since that'd get too long, but I do have a few comments this time. First, the short stories in After the King are really quite good, my favorites in many ways are the fairy tale style ones. "Silver or Gold" by Emma Bull, "Reave the Just" by Stephen R. Donaldson, and "The Fellowship of the Dragon" by Patricia A. McKillip are three that stood out the most for me. And of course Terry Pratchett's "Troll Bridge". There's a couple that aren't so good, but that's the deal with short story collections.

As for the Game Theory book, he spends a good bit of one chapter talking about game theory and economics, including the physicists who ended up going to Wall Street and applying somewhat similar theories from thermodynamics etc. to make themselves lots of money, rather than going into science. In retrospect, considering how those very same 'innovations' just siphoned off money and helped crash the economy, that calls into question the rest of its conclusions, I think.
From those notorious communist agitators at the Wall Street Journal, the latest numbers on executive compensation. It turns out that the hardworking titans of commerce and industry only take home a third of all pay in the United Stat...

Sarcasm doesn't work for this. Corporate executives make 33% of all pay in the US! ONE THIRD of ALL income in the US goes to the executives! A THIRD! $2.1 trillion out of $6.4 trillion total. The WSJ moans about how that affects Social Security, but that's the LEAST of the worries for that! AND that $2,100,000,000,000? It leaves out stock options, "interest" earned by traders, benefits, and other "creative" payment measures.

One-third of all pay in the country goes to the top executives. And it has been rising for years. Want to find out why wages are stagnant? Don't blame Mexico, or China, there's your answer, that way all that extra money can go to the execs.

And this is AFTER those executives crashed the world economy by making huge bets on real estate with all that extra money. It's not just a moral issue, it's a practical hazard to the whole economy.

Torches and pitchforks time, comrades, torches and pitchforks time.
A post, over on Salon, called "The Utopian Economics of "Star Trek" lays out part of the foundation for a Star Trek future. The defining part of the Star Trek future, for me, is the optimism of it. Part of the optimism is Star Trek is a future largely without scarcity. Even before the replicators of TNG, most resources are easily available. The only limits are energy, and some rare elements, especially the dilithium, the handwavium that makes the nearly-limitless energy available. And once most things aren't scarce, current economics falls apart, as the cots of everything would approach 0.

Which, frankly, is not really that unreasonable, for a spacefaring civilization that's managed to spread beyond a single solar system. Think of the Kardashev scale. The Federation's obviously at least Type II.

To get to a Star Trek future, there's lots of problems to be solved, some technological, but just as many social, political, economic, and everything else. There's room for everybody to work to make a better world.
I've been looking for this chart for weeks, and finally found it. This is the key to why we're in the economic mess we are, and have been.



This chart shows the growth of the GDP (basically the "income" earned in the country) with the median household income, with 1979 set as 1 to have a standard for comparison. From the end of World War II to about 1980, the two tracked pretty well, when the GDP went up, median incomes went up by about the same percentage. There's a little bump where incomes went up faster than GDP, but the most notable point is 1980, where the two completely diverge. After 1980, median wages grow more slowly than GDP, and hardly at all from about 2000 to 2007, where the general way the two lines track seems to completely break down.

Now, correlation is not causation and all, so I leave figuring out what events could have caused this to the reader for now, and am just going to get into the implications of what the break means.

What does it mean for median wages to grow more slowly than the national "income" of the GDP? It means average people's wages haven't been keeping up with growth. It means that using the GDP as a predictor of the "health" of the general economy has been useless for at least 20 years, since the general economy, by definition, is driven by average people.

Our economy has lately been driven by "consumption", that is, selling plastic crap made in China to each other. So if GDP's been going up, it means people have been spending more (to vastly simplify). But if GDP's been going up, and the money people make hasn't been going up as fast, that extra money's got to come from somewhere. How can people spend more money than they have? Well, by going into their savings (our savings rate is less than 1%, or at least it WAS) and by taking out loans. Loans like, say, credit cards, or mortgages, or other kinds of debt.
The median household had $3000 in credit card debt they carried from month to month in 2007. Just look at the proliferation of "payday loan" places. Or, say, the mortgage bubble.

The other thing it means that the growth going on isn't being shared equally. It's going somewhere other than regular people's wages. And while gaps of a couple percent don't seem like much, over 40 years, that adds up, quickly. Everybody remembers compound interest, right?

So where's that extra money been going? Well, since the chart uses median income, rather than mean, that extra money could be going to a very few people, not enough to affect the position of the median very much, since the median's where 50% of the sample is on either side. Like if Bill Gates walks into a bar, the mean income goes up a lot, but not the median income. So that's one possibility, which seems to be part of it if you look at numbers for income growth among top earners.

It could also be that some of that GDP growth didn't exist. Or at least didn't represent anything productive. Things like say, financial "innovations" like betting on mortgages, that seem to generate a lot of money, but don't actually DO anything.

I think it's some of both. Some of the economic "growth" over the past 20 years has been illusionary, some's been fraud, and some has concentrated into a lot fewer hands. The housing bubble was caused in large part because people were treating houses as investments and ATMs, since their wages weren't covering things. That lack of growth has been hurting many facets of the economy, but that's been covered up for years by the explosive growth of the finance sector, which was a combination of fraud, smoke and mirrors, and a gigantic transfer of wealth from everybody else to a very few. But that couldn't go on forever, there's only so long you can cook the books and make popcorn from your seed corn before you run out. And that's what hit, and the ginormous bets so many companies made almost brought down their whole house of cards, only government guarantees and bailouts are holding it up right now.

So what to do about all this? Well, I have a number of suggestions, but I'll save them for another post some time. People who know me can probably guess at some of them though.

Pictures

Mar. 23rd, 2009 01:11 pm
Almost the last on this financial keystone cops caper. Here's a bunch of pictures where artists try and explain what happened, hopefully a little clearer than my explanations have been. I think GOOD Magazine's is pretty good.

27 visualizations and infographics to understand the financial crisis.
Okay, so last time I explained why (part) big banks are going under. Now to the housing market. That's what started things, after all.

First, houses had cost more than they were worth, in a lot of places. Especially in some parts of the country. But everybody assumed house prices would keep going up. That's why we built too many of them, way too far out from where people actually worked. Because "everybody wanted" McMansions, on tiny plots of land, because a house was an "investment", and houses always gained value, that's what "everybody knew". This couldn't keep on forever. And many people pointed this out. But while you're in that game, even if you know it won't go on forever, you don't know it's going to end NOW, so to keep up, you have to play the game.

Now yes, I hear people say "Well they should have known better, they should have done their own research." And yes, people should think things out for themselves, but when the banker, the real estate guy, and your investment guy, plus all the peoples on the teevee are telling you something, are you sure you want to argue with them, and bet they're all wrong? Are you going to risk your family's house and income and future prospects on your suspicion that these guys might be full of crap? When for the past decade or so they've been right?

And that, ladies and gentlemen, is bubble thinking. Play the game, make your bucks, and pass it on to some other sucker before the music stops. Except this time it wasn't a ball, it was houses, that people live in. Which even people who don't want to play the game have to buy. And when the bubble burst, suddenly many people were stuck with houses with shoddy construction, an hour from anything, with mortgages higher than the house was now worth. And with all the foreclosed and for sale houses out there, the market for new homes dried up. And with that, the market for people to build those homes dried up too, and many many lots of construction workers lost their jobs. Which means they didn't have as much money to spend, so sales and other kinds of work went down, so then the stores laid people off, so then those people have less money to spend, wash, rinse, repeat.

But even here, we're not at the bottom of the rabbit hole. Because the housing bubble burst caused things, but it also had spent years helping cover one of the fundamentals. Which I'll get to in the next one of these.
There's a lot of people talking about why and how the economic crisis we're in started. Which is important, because we need to know what was wrong to know how to fix things and prevent this from happening again.

So here's my storyline, in the shortest short version. Short term thinking and greed led a lot of people to make bad decisions. Fraud and more short-term thinking and greed magnified these. And lax regulation let companies get so big and leveraged that the short-term thinking and greed was able to threaten the whole economy.

I'll go into more detail later, including why executives get paid in stock options and how that screws up their incentives, how companies suborned the ratings agencies which allowed the massive fraud of packaging risky loans as "AAA" bonds, why banks were able to get so big, how this is like the S&L crisis in the 80s that turned little building and loans like Jimmy Stewart's into centers for fraud and collapse, and other similar things that can be found with a couple checks of Google and Wikipedia that cable "news" shows are too lazy to do.

O RLY

Oct. 28th, 2008 12:15 pm
Apparently the latest gambit, a week before the election, is for John McCain and Sarah Palin to call Barak Obama a communist or socialist because he supports the progressive income tax.

I have known socialists, and Barak Obama is no socialist, for better and for worse.

(Progressive taxation I'm sure I explained before, but I'm not gonna dig up the link right now. Plus Obama's tax increase is all of three percent on the marginal income above $250K. Which means only your taxable income above $250K will be taxed at 39.something percent, rather than 36%ish it's at now.)

(And calling somebody a commie? Seriously, the hell? What is this, the 1950s?)
The Federal Reserve is stealing their MO from Dr. Evil. (The resemblance is uncanny.) Why do we need to give $700,000,000,000 to Wall Street "geniuses" who lost trillions of dollars already?  Why that particular amount? "It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number." Dr. Henry Paulson will hold the world hostage with the threat of RECESSION NOW! (while last week the "fundamentals of our economy were sound" of course) unless we give him SEVEN HUNDRED BILLION DOLLARS!  MWAHAHAHAHAHA! No. Just, no.
One of the most common complaints (I hesitate to call it a counter-argument, because it's not really an argument, just a reflexive cry) against any kind of environmental stuff is always "It's expensive and it will hurt businesses! It'll slow down economic growth!"

This argument basically relies on innumeracy. It depends confusing people with numbers that sound big, but aren't in their context. There's an excellent post over at Crooked Timber about sustainability and living standards, there's a lot of economist-speak in it, so let me highlight the key paragraph.

"Even the sharpest critics among economists only suggested that Stern’s estimates were at the optimistic end of a plausible range, the upper end of which might be 5 per cent of national income, or around two years of economic growth. That is, by 2050, a low-carbon economy might have the material living standards that would otherwise have been reached by 2048."

That's the thing about economic growth. If we grow more slowly than we might have, we're not poorer, we're just less richer than we theoretically might have been. But we're still richer!

This has been tonight's installment of explanations.
John McCain, April 3, 2008: "I know economics very well, certainly better than Senator Clinton and Senator Obama. So let's clear that up,"

January 21, 2008: "At a recent meeting with the Wall Street Journal editorial board, Republican presidential candidate John McCain admitted he "doesn't really understand economics" and then pointed to his adviser and former Senate colleague, Phil Gramm - whom he had brought with him to the meeting - as the expert he turns to on the subject, The Huffington Post has learned.

The incident was confirmed by a source familiar with the proceedings of the meeting."


Now, part of "Maverick" John "Straight Talk" McCain's recent comment could be true. The part about "knowing economics very well" directly contradicts himself from a couple months ago. But the part about knowing economics better than Hillary Clinton or Barak Obama could be true.

Somehow though, I doubt it. Especially when McCain's citing Phil Gramm as an economic advisor, and from listening to his recent speeches about economics.

Funny how reporters can't remember things that happened a couple months ago, though.
The European Union just slapped Microsoft with a $1.3 billion fine, the biggest ever, over Microsoft's anticompetitive actions.

For last year, Microsoft earned about $14 billion. That incredible $1.4 billion fine they make back in just over a month.

In related news, Exxon-Mobil is in court, yet again, about the Exxon Valdez spill, 19 years ago. They're appealing punitive damages levied because of the damage done by the giant spill. The captain had been drinking and wasn't on the bridge at the time, and Exxon had known he was a recovering alcoholic and had fallen off the wagon. They've appealed the punishment damages down to $2.5 billion.

Last year, Exxon-Mobil made a record profit of $39.5 billion. They make $2.5 billion dollars in about three weeks.
So, retail sales over December were flat at best. (Here's some stats) And credit card debt went up over that same time, which meant people were spending money they didn't have just to stay where they were.

Federal Reserve Chairman Ben Bernanke yesterday said "The outlook for real activity in 2008 has worsened," and "We stand ready to take substantive additional actions as needed to support growth and to provide adequate insurance against downside risks,"

The second translates to interest rate cuts. But basically he's saying the economy is not doing so hot, which most anybody could tell you. o in response?
"Stocks in Canada and the U.S. shot up in the hours after Mr. Bernanke speech."

The stock market reacts exactly opposite to how common sense says it should. A company lays people off, its stock goes up. The chief banker of the US says the economy sucks, stocks go up. These people are insane.

Graphs!

Dec. 18th, 2007 02:52 pm
If America had $100 and 100 people.

This graph is the key point, though. The top 1%'s share of the national income has more than doubled over the past 30 years. Everybody outside the top 10%'s share has gone down.
#8: The World Without Us by Alan Weisman

This book was absolutely fascinating. The idea behind the book is what would happen to all our stuff, and the world, if humans all disappeared suddenly? No specifics as to why, if it's zombies, aliens, the Rapture, nanotech, whatever, because that's not the point. But in the process of that, it ends up being much more about society and civilization and what it takes to keep them running. And what effects humans have already had on the world, and continue to. It's extremely well written. The parts about wildlife returning to Chernobyl, and sea life returning to nuclear weapons test atolls are scary, yet amazing. They have photos of the mountaintop removal "mining" for coal, and I'd heard about it, but pictures are worth a thousand words. See some here.

This book is amazing, and I totally recommend it to everyone.

#9: Marx for Beginners by Rius

It's a cartoon introduction to Marx and his economic theories, and the history he lived in. It was published first in 1976, so it's kind of dated. I'm trying to read some more economics stuff and so figured I'd start with the cartoon compressed version.

And frankly, some of the quoted passages of Marx looking at the inequalities of capitalism could come from a modern analysis of how Wal-Mart works and treats its workers. (In short: Not Well.)

#10 (or 10-13): Nausicaa of the Valley of the Wind by Hayao Miyazaki

I'm not sure to count this as 1 or 4, since it's a 4 book manga series, but all one story. I guess I've included other comics as individual books, but sometimes it feels slightly cheaty. Depends on the comic, I suppose.

Anyway. I haven't seen the movie version yet, though I've seen many of Miyazaki's other ones. It was interesting, and good. Though the end, like a couple of Miyazaki's other stories (such as Castle in the Sky) makes it seem like he has serious issues with technology. I think I'm just tired of the trope of "Humanity can't be trusted with this knowledge! So now we'll destroy it!" Aside from that gripe though, it was a very good read. Fantastic environments, good characters, and the other main theme is the futility and waste of war, which I don't have any issues with.

Previous Books:
#1: Grave Peril
#2: Deer Hunting With Jesus: Dispatches from America's Class War
#3: DMZ Vol. 3: Public Works
#4: Bad Prince Charlie
#5: Making Money
#6: How to Win Friends and Influence People
#7: H.I.V.E. - Higher Institute of Villainous Education
There's still people who claim we need "real money" based on gold, not just "fiat money", because gold's really worth something, regular money's only worth something because the government says so.

But gold's only worth anything because people say so also. (Yes, gold has applications in electronics and a lot of other things, but when people talk about the "value" of gold, that's usally not what they're talking about.
Last year, the top 1% of Americans made 21.2% of the total income in the US.

That's probably why, despite all the "great" numbers for the economy, most people don't think it's going so well. Because they're not. And neither is anyone they know. All the economic gains of the past almost decade have been going to the same tiny subset of people, rather than being spread out through society. All that extra productivity and work people are putting in doesn't come back to them, it gets hoovered up to the top.

And it doesn't trickle back down.
Last month at work, we started putting up a display of Christmas bargain books. In September. SEPTEMBER. Now there's not only that, but also a table of Christmas cards, and a table of random holiday books. In the first week of October.

I detect the not-so-faint wiff of desperation animating it all. "Consumer spending" has been soft this year, for a simple reason. People don't have money. All the rest of the money people have been spending was coming from their savings, and the mortgages on their houses. And now suddenly the whole pyramid scheme animating the mortgage market has fallen apart, and people don't have thousands of dollars to spare. So people haven't been spending, and the corporate retailers are panicking, because they don't know what to do, how are they going to squeeze out their next quarter of record profits?

So they've played their ace card. Christmas cheer and spending! Now now now! Come and spend! You have to! Otherwise, you're failing your family and kids and everyone you know! It's that time of year, even though it's October!

And then I saw a report on the local news yesterday, about how Wal-Mart had dropped prices on lots of toys to try and kick into holiday mode. And other stores have been following suit. The customers they interviewed didn't care, because it was 90 frickin degrees out yesterday, who wants to go Christmas shopping in the heat? Also, it's the beginning of October.

And they had a professor from one of the colleges around here, I missed his name or expertise, but he was crediting it to desperation too. Obviously I agree with him.

But I probably disagree with him in the fact I hope it fails. I hope it fails because then maybe they'll stop shoving Christmas forward until the "Holiday Season" literally begins in July. And I don't think it'd be bad for the whole edifice of corporate consumer retail bullshit to be shaken up. It's a fragile construct, based on marketing and advertising and other lies, which results in people working jobs selling plastic shit to each other so we can afford to go buy plastic shit from other stores. It's completely fucked up our culture, and it can't last. I hope it doesn't, but I hope it doesn't bring us all crashing down with it.

O Canada

Sep. 29th, 2007 10:05 am
It's the end of an era. I can't make fun of Canadian money any more.

U.S. Dollar Exchange Rate Canadian Dollar
1 Sep 28 0.9944 0.9944
(Chart and stuff)

For all that I'm joking about it, the fall in the dollar is a Bad Thing, at least for the US. It means imports are going to be more expensive, and we import practically everything. It's a sign of how weak our economy is. And it means inflation is going to up. On top of the collapse of the lending scam housing bubble, and on top of all the growth for the past seven years going to the very richest

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