Something New

I have been posting on The National Party Times for over three years. Like most things, I feel this has run its course. As I explore some other more collaborative outlets for my poor writing skills, I will probably stop posting here.

While the new potential projects are likely to be less introspective (and hopefully better written -- I really am a Photoshop guy after all), I will miss exercising my personal experiences and thoughts into words. (See: The Hawaiian Tour Guide Part I and Part II.) I will also miss trying to convince everyone how damn smart I am.(See: More Thoughts on Bill Gates -- via Milton Friedman.) I will also miss the guest posts. (See: I think Mark Twain knew what he was doing by Brother Dan; What the Heck is a Duck Fart? by Budsy Jean; or Sarah Palin is a twit! by Marna.)

Thanks for sharing some of your time with me over the last three years. It has been fun. Now it is time for something new.

US Housing Remains In The Toilet

A headline on the BBC today states that "US house prices [are] below 2009 low”. In fact, according to the report by the people who put together The Case-Shiller housing index, “Home prices continue on their downward spiral with no relief in sight.” (Great chart here.)

Since the market started its decline in 2006, why are we still here? More importantly, why are things not getting better? The answer is really quite simple. Nobody knows where the bottom is. Until people are comfortable that we have found the bottom, things will not improve.

So what is stopping the market from finding the “real” bottom? Government “stimulus” has made everyone wary of jumping into an artificially propped-up market. Like taking a “hair-of-the-dog” drink in the morning to cure a hang-over from the night before, “stimulus” has failed to fix anything. In the end, it has only made things worse, increased debt obligations, strung out those who can least afford it and prolonged the pain.

The answer? John Papola said it best in a FB post this morning, “Let em crash and find a real bottom. Fake stimulus is like an afternoon shot of espresso. It gets you through the evening, keeps you up way too late, and makes tomorrow even worse than today.”

And consider this, if the government is so concerned about helping the poor and really wanted everyone to have access to affordable housing, why is it fighting to keep prices artificially high?

A better tomorrow means finding the real bottom in this housing market. That won’t happen until people are satisfied that government meddling is no longer artificially propping up prices.

Niall Ferguson on Democracy vs. The Rule of Law

Recently, I was listening to a BBC Radio show called Start The Week with Andrew Marr where he interviewed Harvard History Professor Niall Ferguson about how the West came to triumph over the empires of the East, and whether that ascendancy is in permanent decline.

In the interview, Ferguson defined 6 “killer apps” that made the West dominant: competition, science, the rule of law, medicine, consumerism and work ethic.

In further research about Ferguson’s killer apps, I found that one blog listed ‘democracy’ in place of ‘the rule of law’. They are wrong. In fact, in the previously mentioned interview, Ferguson himself said, “For me the rule of law is more important than democracy, per se. It is more important on how you keep politicians under legal control than how you elect them or choose them.”

Democracy is over-rated. More importantly, we do ourselves and our society a disservice by equating democracy with the rule of law. After all, many tyrants have come to be through popular election. Rights on the other hand, transcend the popular vote. As for the concept of majority rule equating justice, we only need to remember the old saying (often wrongly attributed to Ben Franklin, so I will borrow from Marvin Simkin): “Democracy is not freedom. Democracy is two wolves and a lamb voting on what to eat for lunch. Freedom comes from the recognition of certain rights which may not be taken, not even by a 99% vote... Voters and politicians alike would do well to take a look at the rights we each hold, which must never be chipped away by the whim of the majority.”

From my view, science, medicine, consumerism and work ethic can be found in many societies, but it is really competition and our system of justice -- although often bastardized by political influence -- that define the West’s truly unique “killer apps”.

When Our Heroes Were Not Steroid Users

The great Harmon Killebrew passed away this week. At the time he retired from baseball in the 1970’s, only Babe Ruth had more home runs as an American Leaguer.

He now rates 11th on the all-time MLB Home Run List. As I have frequently stated, he would still rate higher than that if we eliminated the Steroid Era players. Referencing The Steroid Era blog as my source, let us do just that: eliminate the steroid-enhanced players and see where Harmon Killebrew would stand:

First, here is the list:

1 Barry Bonds 762
2 Hank Aaron 755
3 Babe Ruth 714
4 Willie Mays 660
5 Ken Griffey, Jr. 630
6 Alex Rodriguez 621
7 Sammy Sosa 609
8 Jim Thome 591
9 Frank Robinson 586
10 Mark McGwire 583
11 Harmon Killebrew 573

Now, here is the list without the steroid-laden crew (Since this is a thought exercise and carries no claim of exact accuracy, I omitted those implicated along with those who have admitted steroid use.):

1 Hank Aaron 755
2 Babe Ruth 714
3 Willie Mays 660
4 Ken Griffey, Jr. 630
5 Jim Thome 591
6 Frank Robinson 586
7 Harmon Killebrew 573

So in the record books Harmon may be number 11, but when we remove the asterisks, he moves up to number 7.

Thanks for the memories Mr. Killebrew.

...and say hello to The Babe for me.

Keynes vs. Hayek Round Two

Who knew a recipe for success could include two skinny white guys playing dead economists in a ten-minute hip-hop video?

EconStories strikes again. Creators John Papola and Russ Roberts have created a masterpiece follow-up to their original video, Fear the Boom and Bust.

With as much economic education as you can fit into a ten minute music video, Fight of the Century: Keynes vs. Hayek Round Two is sure to surpass the over two million views the original has garnered on YouTube.

The guys playing Keynes and Hayek? Billy and Adam.

Edutainment at its finest.

John Berryman Couldn't Fly

I have had the wonderful opportunity to see the Hold Steady four times. I have even had the chance to chat Minnesota Twin’s baseball with lead singer Craig Finn. (I think Rod Carew or Harmon Killebrew is the best Twin’s players ever. He preferred Kirby Puckett and Kent Hrbek -- at least that night.) Mr. Finn also recounted meeting his real hero at a Twin’s game, former Replacement’s singer Paul Westerberg. (He was really short.)

Although I have always been sucked into The Hold Steady’s tunes by Tad Kubler’s straight-forward power chord guitar playing, Craig Finn’s lyrics frequently haunt me -- especially one song in particular: Stuck Between Stations.

I don’t know poetry. I don’t understand it. And until this song came out, I didn’t know who John Berryman was.

I stumbled upon this old interview, published on the Paris Review site, taken from the original issue published in the winter of 1972. In it, among other things, Berryman explains his life as a poet and poetry in academia. (“It’s a harmless industry. It gets people degrees. I don’t feel against it, and I don’t feel for it. I sympathize with the students.”) He was asked to rank the poets of his day. (“...most of these characters are personal friends of mine, and you just don’t sit around ranking your friends.”) But even more interesting were his thoughts on what it takes to be a truly great poet:

“My idea is this: The artist is extremely lucky who is presented with the worst possible ordeal which will not actually kill him. At that point, he’s in business. Beethoven’s deafness, Goya’s deafness, Milton’s blindness, that kind of thing. And I think that what happens in my poetic work in the future will probably largely depend not on my sitting calmly on my ass as I think, “Hmm, hmm, a long poem again? Hmm,” but on being knocked in the face, and thrown flat, and given cancer, and all kinds of other things short of senile dementia. At that point, I’m out, but short of that, I don’t know. I hope to be nearly crucified.”

John Barryman never lived to be crucified. On a cold morning in January of 1972, he threw himself off the Washington Avenue Bridge in Minneapolis, Minnesota.

The devil and John Berryman
Took a walk together.
They ended up on Washington
Talking to the river.
He said “I’ve surrounded myself with doctors
And deep thinkers.
But big heads with soft bodies
Make for lousy lovers.”
There was that night that we thought John Berryman could fly.
But he didn’t

So he died.
She said “You’re pretty good with words
But words won’t save your life.”
And they didn’t.
So he died.

He was drunk and exhausted but he was critically acclaimed and respected.
He loved the Golden Gophers but he hated all the drawn out winters.
He likes the warm feeling but he’s tired of all the dehydration
Most nights were kind of fuzzy
But that last night he had total retention.

These Twin Cities kisses
Sound like clicks and hisses.
We all tumbled down and
Drowned in the Mississippi River.

We drink
We dry up
Then we crumble to dust

From: Stuck Between Stations by The Hold Steady



No poetry for me.

Freedom Packages

The Daily Show - America's Freedom Packages
Tags: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

Again, I ask, what is the difference between Obama and Bush? Bush must be laughing his ass off.

Americans and Poverty

The bad news is that poverty sucks. The good news is, at least if you are an American, you have never likely seen it, much less experienced it personally.

According to a map I received in our last issue of the National Geographic Society, the top 25% of people in the world make just over $12,000 a year. That means the poorest Americans on average are still some of the wealthiest people on this planet. Would you rather be one of the poorest people in America, or would you rather be "wealthy" in Bangladesh?

Poverty is relative. Americans have been socialized into believing they have a right to whatever they want, regardless of their economic condition. Thus in this country, what we call poverty is more likely conditions associated with over-extended debt than anything resembling dirt-floor subsistence living. I am guessing that if we spent a day with the average Cambodian, we would spend more time being grateful for what little we may have (glass half full) and much less time being obsessed with the wealth of others (glass half empty).

While many will have us focus on the gap between rich and poor, shouldn’t the real focus be on the poor and the conditions they live under? Are they improving? Or are things really getting worse for America’s poor?

Jealousy may get us to focus on what others have obtained -- thus making us feel they (the “rich”) have been “stealing” from us or are under some moral obligation to share their wealth with us, (whether that is willingly or by the coercive force of misguided legislation). As Americans, we tend to be oblivious to the fact that 95% of the rest of the world would gladly change places with the poorest among us. To them, WE are the rich people. Do those from foreign lands have the same moral standing to make claim on the wealth of average Americans? How much is too much? Who gets to decide that?

One of the most common mis-perceptions in economics is the idea that wealth is static: if someone has something, it must then cause me to have less. But this is contrary to reality. Wealth is created via the productivity of people, not just through the distribution of existing resources. (For example: personal computers didn’t even exist several decades ago. Now there are millions and millions of them. Not only has this progression made computer producers wealthy, it has also made their users more productive, making them wealthier as well.) The creation of wealth makes everyone better off.

And while the paychecks of athletes and movies stars may seem outrageous to the majority of us -- especially in comparison to teachers and firemen, the success of the former did not create the poverty of those on the other end of the scale. In fact, in many ways, the exact opposite can be argued. The more ultra-wealthy people there are in a country, the higher the standard of living for the poorest of that same country. In other words, we shouldn’t be considering redistributing the wealth of the richest among us, we should be trying to create conditions that promote the successful creation of MORE wealth.

As Economics Professor Steven Horwitz recently pointed out in an article titled The Poor Are Not Getting Poorer: “One look around at even the bottom fifth of American households today - where children are watching cable TV, surfing the Web, or chatting on cell phones while Dad takes free generic medicine and Mom heats something up in a microwave - shows the poor are hardly getting poorer.”

Yes, this “Great Recession” has been extremely painful, but we, as Americans, still have much to be thankful for. More importantly, we need refocus on creating more wealth and not worrying about who has too much.

More Thoughts on Bill Gates (via Milton Friedman)

Recently, in an internal company blog, I responded to a question regarding what role a company’s profit plays in its pursuit of corporate social responsibility. The question centered around information gleaned from an article in The Economist.

Consistent with other things I have blogged about in the past, here was my response:

Let me start with a thought experiment.

After decades of successfully building businesses, Bill Gates is a billionaire many times over. Now he wants to use large portions of his wealth to the betterment of Africa. How does he best serve this goal?

One, he can give away his money through various charities, or two, he can do what he does best, build more wealth by creating more businesses.

Think of how many thousands and thousands (and thousands) of people who have successful careers directly tied into the technology businesses Bill Gates has created. He is directly -- and indirectly -- responsible for putting food on the tables of virtually every IT person on this planet, (not to mention multi-millions of others who happen to use a PC in their daily work life). Therefore, is he being “responsible” by giving his wealth away? Or would Africa (and the rest of the world) be better off if he just continued to do what he is great at, creating more technology and building more businesses? I would argue the latter.

Considering the question of what defines socially responsibility is the proverbial equivalent of the “give a man a fish” versus “teach a man to fish” question. Both are good, but one is better.

Wealth is not static. Wealth grows exponentially. Wealth is the building block that creates more wealth. And while “giving” may instinctively seem more altruistic, I would argue, “building” is the much more effective (and responsible) method for Bill Gates to successfully meet his goals. Bill Gates should do what Bill Gates does best. No matter how much money Bill Gates “gives” away, his work in the business world will forever remain his greatest contribution to humanity. And while being socially responsible may include both “giving” and “building”, the “act” should not be confused with the “results”. The latter (building) will almost always give better results. It perpetuates more building.

Making a profit is at the core of being socially responsible. Anything hindering that goal is counter productive to helping others. And taking it to the individual level, all responsibility begins with personal responsibility. When the flight attendant explains the safety procedures before your next flight, she will tell you that: “in case of emergency, put your air mask on first before helping others.” So it is in life. Take care of yourself first. This is what makes you able to help others.

(This goes beyond “financial” profit, by-the-way. For instance, this explains why something like work/life balance is so important. It is not only in the employee’s best interest, it is in the longterm best interest of the employer as well. After all, someone who takes care of himself is in a much better position to help others than someone who burns out.)

Perpetuating and maintaining profitability is the single most important factor allowing a business and/or a person to take on social responsibility in the first place. In fact, that is why [our company’s] value number eight: Earn a Reasonable Profit, is the most important value.

Without it, the other seven would not exist.

Skydog -- The Movie

Duane Allman died on October 29th, 1971 at the ripe old age of 24. Despite Skydog’s short time on this earth, Rolling Stone Magazine would later list him as one of the greatest rock and roll guitar players of all time, second only to Jimi Hendrix.

Even though I grew up within walking distance of the Canadian border, it was difficult to go very long without hearing the South’s greatest band, the Allman Brothers blasting out of every older kids’ eight tracks inside their muscle cars. Unfortunately, I did not purchase my own copy of the classic Eat A Peach album until I reached adulthood. And, not unlike Miles Davis’ Bitches Brew, it would take me another dozen years or so of listening to it before I fully appreciated it.

Today, I can not listen to this without wondering how different today’s American music would be if we had had a few more decades of Duane’s influence.

There is an interesting twist to the final chapter of Duane Allman’s story. Duane Allman died in a motorcycle accident, crashing into the back end of a truck. Legend has it that the name of the album containing his final contributions, Eat A Peach, was derived from the crash. Supposedly the back end of the truck that ended Duane’s life was carrying peaches. Cool story...if it were true. Actually, according to snopes.com, the name came from a quote Duane made when asked by a magazine interviewer, what he was doing to help the revolution. His answer, “...every time I am in Georgia, I eat a peach for peace.”

Considering his father was murdered when he was a child, the adventures he must of had growing up with little brother Gregg, the incredible people he did session work with, his meteoric rise to fame, and the final, tragic crash that ended it all -- this legend’s short life would be great material for a movie.

I think Mark Twain knew what he was doing

It can really be fun writing a column in this era of political
correctness and the absurdities that fall within that subject. There
are just so many of those absurdities out there that the subject
matter appears to be never-ending.

The latest of which is the rewriting of Mark Twain’s Huck Finn.
I can understand that there are those out there who do not approve of
Twain’s use of “The N-Word”, but we need to remember that in the
time this literary treasure was written, the use of the word was
pretty much universal.

But aside from the embarrassment, anger, or disgust that Twain’s use
of the word may cause some people, there are also First Amendment
issues with making changes to the work, especially when the author is
no longer around to defend his choice of language. Guarantees of
freedom of speech and freedom of the press come readily to mind here.

The book was first published in England in 1884 and in the United
States the following year. And for over 125 years it has been
recognized as one of the great American novels.

Now, all of a sudden, we have a great need to fix a novel which many
believe was written as a scathing look at racism in this country.
Changing the dialogue in Twain’s masterpiece will not only diminish
the impact of the satire, but take something valuable away from the
basic story itself - the vernacular of the southern antebellum society
of the 1860’s, the people of the time period in which the novel is
set.

All of this commotion over the language used in the book,
specifically the terms “injun” and “nigger” is nothing new. It
was criticized back when the book was first released, and even more so
as we moved into the 20th century, primarily because of its “racial
slurs”. Now, it seems, we are going to change the two words in
question to “indian” and “slave”.

I don’t know about you, but somehow I don’t believe that changing
those two words in the Huck Finn novel is going to do anything to curb
racism in the United States today. And it is certainly not going to do
anything to enhance the original satirical intent of the novel.
All this brings to mind another question.

Just who is it that determines our minds are so delicate that we need
someone to filter what we are reading, hearing or seeing?

I tend to see this attack on American literature as an infringement
on the rights of, not only the author, but also on me, the reader. I
like to think that I possess enough basic intelligence to recognize
satire when it lies before me, and I take offense at someone other
than myself attempting to protect my “sensibilities” through this
or any other form of censorship.

The purpose of the change is to try and get the book back on reading
lists in the classrooms where indignation over the terms used has
caused it to be banned. But a book that has stood as an American
classic for the past 125 years, probably needs very little help
remaining on the reading lists of those who value literature for the
sake of literature. Those who would ban it have trouble seeing
beyond their own prejudices, and project those prejudices on to the
rest of us. And if they, those who would see it banned, hold enough
sway with their local school boards and administrations, it will be
banned from some classrooms.

More’s the pity.

But don’t diminish the work to satisfy the vocal few. The work
stands on its own merits. Just by attempting to ban it, they are
engaging the discussion that the original work intended. To change it
would stifle that vital discussion.

Since it was written, the book has continued to stir the controversial subject
of racism. Just that fact alone should be enough to leave things as
they are. As time passes we are becoming more and more reluctant to
tackle an issue such as racism aloud, and tend to squelch anything
that might provoke that discussion, hoping it will go away. This
appears to be just one more case of that.

Fact is, unless you bring the subject to the forefront and beat it
down by confronting it, it will just sit festering in the background
awaiting a new opportunity to raise its ugly head.

I believe the terms “injun” and “nigger” to be offensive, not
only to those to whom the terms may be directed, but also to anyone who
believes racism to be an evil. But I also believe that if we keep
shoving the subject under the bed where no one can confront the evil,
it will never go away.

Banning two words in Twain’s classic novel can have a more detrimental
impact than you might suspect.

(I wrote this as a column for the 2-3-11 issue of NSN, but the subject of censorship pisses me off so much I thought I'd throw it in front of a few more people)

Taleb Again

I quote other people often. For one, I find quality quotes concise, interesting and obvious truths about things we often overlook. The other reason is, well, I am not all that original. After all, it is much easier to sound smart than it is to think. Some would call this intellectual plagiarism. I simply consider it edification of someone wiser. Either way, stealing quotes is not something I will be giving up any time soon, especially now that I have the latest book from Nassim Nicholas Taleb scheduled to show up in my mail box next week.

The Bed of Procrutes is a self-explained book of philosophical and practical aphorisms. From the few I have perused, I reckon these will be a bit deeper than what you would find in Poor Richard’s Almanac and maybe even a bit wittier than some of those Mark Twain penned. Either way, if his last book is any indication, I will be re-reading it multiple times.

A sampling, the first three from the first page:

The person you are the most afraid to contradict is yourself.

An Idea starts to be interesting when you get scared of taking it to its logical conclusion.

Pharmaceutical companies are better at inventing diseases that match existing drugs, rather than inventing drugs to match existing diseases.

Thought provoking. Look forward to reading the rest of it.

And yes, I expect I will be quoting from it often. (At least whenever I feel the need to sound smart.)

Being Older Equates To Being Happier

It seems, when we are young, we spend all our time trying to live up to other's expectations. When we get older, we get past that.

According to an excellent article in the Economist, The U-bend of Life, regardless of how most people view aging, getting older is actually a good thing. As the article points out:

The greyer the world gets, the brighter it becomes...

Ask a bunch of 30-year-olds and another of 70-year-olds which group they think is likely to be happier, and both lots point to the 30-year-olds. Ask them to rate their own well-being, and the 70-year-olds are the happier bunch....

Although as people move towards old age they lose things they treasure—vitality, mental sharpness and looks—they also gain what people spend their lives pursuing: happiness...

Having just been around that U-bend myself, this all seems pretty relevant.

While I was of college age, my oldest brother related something to me that has stayed with me all these years. He said that when I went to my ten year high school reunion, I would waste most of my time trying to impress everyone with how successful and cool my life had become. Then at my twenty year reunion, I may do more of the same, but to a lesser degree. Then, by the time my thirty year reunion came along, I would no longer give a damn and would actually be more interested in just being able to spend time with old friends. Although, I have always seen the logic in his observations, until now, I never realized how incredibly accurate they are.

I am finding that U-bend to be a real thing from my perspective. After a rough patch a few years ago -- the traditional "mid-life crisis", I suppose -- the last couple have been the absolute best years of my life. Stranger yet, even though I am now on the back forty, I am unusually optimistic that even better ones are yet to come.

Halloween 1992 Jerry Garcia

I just stumbled on this Jerry Garcia remake of Warren Zevon's Werewolves of London.

On a whim, I bought a plane ticket to Oakland so I could spend Halloween of ‘92 with Jerry Garcia. It was his first show since recovering from a heart attack. I met my friend Brad and a van load of his tribe from Seattle. I didn’t have a ticket for the show, but Brad was able to barter for one in the parking lot once I got there.

I hung out with a girl from Japan. I met her in the top row of the Oakland Coliseum and promptly dragged her down to the front of the stage. She was out-of-place, all dressed up, obviously having no clue about the Dead or their cultural following. She spoke very little English. I wore a t-shirt that read: “We are the people your parents warned you about.”

I was a wonderful ambassador.

Fun times.

The Mentally Ill And Terrorists

Like most twisted logic, there is always a large dose of truth in emotional diatribes. So it is with Keith Olberman’s recent rant about the “politics” behind last week's very tragic Tucson shooting.

As someone who has little political sympathy with Sarah Palin, I find it odd to come to her defense, but I find it disturbing that a political commentator would use this tragedy to rail against his own political enemies. News flash: Sarah Palin may or may not be an idiot, but she did not commit this crime. This event was committed by a deranged young man, not a “domestic terrorist” (unless of course, you believe there is an organized military movement to liberate American grammar).

I am sick of both sides using the word “terrorist” to describe anything that has to do with their opponents, and using this tragedy to try and tie this to Sarah Palin or any other politician for that matter, is simply sad. (Never mind that one of the deranged young man’s favorite reads was the Communist Manifesto. I highly doubt you will find that on Palin’s favorite reading list -- assuming she reads, of course.) Saying Jared Lee Loughner is a voice for anybody -- other than maybe Sirhan Sirhan, John Hinckley Jr., or Mark David Chapman -- is ludicrous.

And when Olberman gets it right, that there is too much violence in American society today, he completely ignores our government’s fascination with this activity. Violence is tragic no matter where it is committed and regardless of who is committing it. While scanning Facebook, one poster got it right when he said he “wishes everyone in America would pay as much attention to the women and children our foreign policy is murdering every day as they are over this horrible Arizona massacre. It’s easy to empathize with birds of a feather, I realize. But that doesn’t make it less hypocritical. Everyone person on this earth has a right to live free and peacefully.” (But then again, by pointing this out, maybe I am using this tragedy for my own political ends.)

In the end, giving this tragic event more meaning than it deserves is not only uncalled for, it is dangerous. As a great Op/Ed piece from the WSJ put it:

Ponder the implication of this. A deranged soul shoots a public figure and we are supposed to change our political discourse and rule certain people and opinions out of bounds based on whatever incoherent ramblings Mr. Loughner published on his website?

Every two years we hold elections so that sane Americans can make a judgment on the policies of President Obama, John Boehner, tea party candidates and so on. ...[Yet,] we are supposed to put that aside and assess what a murderer with a mental illness has to tell us about the state of American politics, government and our national dialogue.

This line of argument is itself an attack on democratic discourse, and it is amazing that it even needs to be rebutted. Taking such an argument seriously will only encourage more crazy people to believe they can trigger a national soul-searching if they shoot at a political target. We should denounce the murders and the murderer, rather than doing him the honor of suggesting that his violence flows in any explainable fashion from democratic debate.

[...] Mr. Obama can lift the level of public discourse by explaining the reality of Mr. Loughner’s illness and calling out those on the right and left who want to blame the other side for murder. That would be a genuinely Presidential act of leadership, and it would have the added advantage of being honest about the murders in Tucson.

My sympathy goes out to the victims of this senseless tragedy.

Tumbling Into Art

Sharing. What a concept, especially filtered through the eyes of an artist.

Someone shared a post from this blog somewhere along the line and it has since become part of my daily browsing routine. It also introduced me to tumblr, which I find very interesting, especially the sharing part. I am usually late to new and cool things, so I am guessing this has been around awhile, I just wasn’t paying attention.

Anyway, Looking for the Magic is a great example of tumblr's sharing aspect. This blogger’s entries are full of great photography, concise posts and best of all, well selected reposts.

Want to see blogging as art. Spend some time here. It is becoming a daily habit for me.

Don't Look Now, Here Comes Inflation...

A headline on the BBC today read: World food prices at fresh high, says UN

This can’t be so. After all, if our Expert Central Bankers are fighting deflation, how can inflation be a problem? (For those of you who do not know me too well, I am being sarcastic.)

I love that the UN attributes the problems to the weather and that the BBC perpetuates this notion. The truth is all famines are political.

So what are we really seeing? When Central Banks print money, the first to be hurt are always the world’s poorest. Inflation starts at the bottom and works it’s way up. Trillions upon trillions of “new” fiat currency is working it’s way into markets thanks to our numerous “stimulus” packages. And when you have more and more money chasing resources, the resources seem more “scarce” than they really are.

Think of it this way. There are three guys stranded on an island. One has a dollar. One has a five dollar bill. One has a spare Big Mac in his back pocket he is willing to sell. How much does he sell that extra Big Mac for? Obviously, he would sell it to the guy with the five.

Now what happens if the guy with the dollar discovers he has a one hundred dollar bill he forgot about. How much does that Big Mac sell for now? Obviously, now that he can out-bid the guy with the five, that Big Mac is not going to get purchased for anything less than that.

In this example, the Big Mac didn’t change, money did. And although scarcity matters, most people do not see the role money plays. Yet, fiat currency is the key ingredient when creating inflation stew.

And a nice big batch of inflation stew has been brewing.

Today, the simpletons in the media continue to report that rising food prices are due to floods in Australia, as if there are not floods somewhere every year. Tomorrow, they will report that rising energy prices are due to restrictions in the Middle East, as if there has not been chaos there for decades.

The truth is not that complicated, but we ignore it, or worse, we buy into the “official” story.

Just remember, with what our Central Bankers have done -- and regardless of how it is presented -- inflation is coming. Let’s just hope it is not the “hyper” variety.

Jim Rogers, Adventure Capitalist

I am currently reading Adventure Capitalist, by Jim Rogers, a favorite investment guru of mine. Traveling around the world in a modified Benz in 2003, Jim Rogers describes his journey through the lens of someone seeking environments conducive to free exchange. In other words, the more free a location is of government and/or military coercion, the more desirable it is as a potential investment opportunity. His perceptions on cultures and governments are eye-opening.

...and I am only sixty or so pages into it.

So far, they have entirely covered Europe. They have spent time listening to the Grateful Dead while cruising down one of the world’s best highways in Turkey -- an American made artifact from the Cold War. They have had dinner with American ex-pats in Central Asia -- men incapable of making it on Wall Street during the booming nineties who now have cushy government jobs touting the world about "American capitalism”. From there, they went on to deal with the uninviting mafia-type culture of the “new” Russia and viewed the repercussions of seventy years of Soviet central planning. The ecological disaster that once was the Aral Sea may take another seven thousand to heal. Once a source of an eighth of all fish in the Soviet Union, it now supports no life, drained dry by Soviet-built dams. Jim also describes being the first human being to drive across China three times. (Rogers wrote about an earlier travel in another book Investment Biker.) The incredible changes that have occurred in the short time between his trips are astonishing.

The interesting thing about travel is that our preconceived notions are almost always different than our perceptions once we have actually been there. Unlike most travelogues, I have found his perceptions of Asia to be very similar to those I have from my trips there, so I look forward to his views on the rest of the world.

Like I said, I have just begun this great read. If you like adventure, travel and a unique perspective, this is great stuff. I am guessing I will be elaborating on it more in the future.

One Trillion Dollars (Times Fourteen)

Yes, I talk about debt too much. Maybe I am obsessed -- after all, I do have a widget displaying our national debt on this very page -- but eventually, a day will come when even our government will no longer be able to ignore it.

According to this from the BBC, a presidential panel set up to help trim the US budget deficit is finally calling for steep spending cuts and tax rises. Unlikely to happen of course, but at least the elephant in the room is no longer being ignored.

The article shares a great quote from Honeywell CEO Dave Cote's US Chamber of Commerce speech last month. Here is an extended version:

And how much is a trillion dollars? How do we put that into perspective? We work with millions and billions... but how to explain a trillion dollars to someone and how much that is? This is the best way I have found to get across the enormity of a trillion dollars. If you had spent a million dollars a day, every day, since Jesus Christ was born 2010 years ago, you would still not have spent a trillion dollars. And by 2021, that will be our annual interest bill alone!

There are only three ways to get out of debt: 1) Do the right thing and pay it back; 2) Be ethical, admit you are over-extended, default and declare bankruptcy, or 3) Cheat your debt holders, counterfeit currency and pay back your debts in worthless notes.

Only two of the above choices are ethical and legal, but which one do you think our government will choose?

Thoughts on Bill Gates and His Money

I am an Apple guy, but even I can recognize Bill Gates’ real contribution to society. He, along with others, took a technology only affordable to the richest of companies and helped make it accessible to ordinary individuals. The world’s obsession with the wealth Bill Gates has accumulated from this is even more interesting than his actual story. Not that his story is boring. (In fact, if you have Netflix, check out Triumph of the Nerds, a dated, but fascinating three part 1996 PBS series that chronicles the start of the personal computer business.) But more importantly, how we view his wealth says as much about ourselves as it does him.

First, there is the question of whether he deserves it. The genius of Bill Gates is that he started a multi-multi-billion dollar company based off a software he didn’t even create. He purchased it for around $75,000. What made Bill Gates was his vision, taking the creation of others and repackaging and re-purposing it to fill a need, albeit a far greater need than even he envisioned. Ideas are what create wealth, but even ideas are only ideas until they are actually implemented. The man who created that software had no idea how big his creation could possibly be. Fortunately, Bill Gates did. Therefore, his wealth is proportional to the things he created, the foundation of an entire industry.

The second thing I find interesting about his wealth is how everyone seems to have an opinion about it. When average Americans look at someone who is better off than themselves they seem quick to talk about economic “fairness”. But the fact that Bill Gates has more money than any one man could ever possibly need does not give anyone the right to think they should have access to it or any kind of authority in redistributing it.

I am reminded of a conversation I once had with my Chinese friend Vincent, who questioned American “greed”. When the average Chinese gets by fine with an annual income of around $3,000, why would any American need to make more than $30,000 a year? After all, he mused, any more than that just means you are filthy stinking rich. It is all a matter of perspective, I guess. Either way, Vincent or anyone else has no more right to my “excess income” any more than I or anyone else has to Bill Gates’.

We spend too much time worrying about what other people have. In fact, it makes us miss the forest for the trees. As Economist Donald J. Boudreaux has aptly pointed out, if a time traveler from the 1700’s were to visit the Gates’ household today, he would marvel at the same things you and I share in common with Gates:

...a good guess is that the features of Gates's life that would make the deepest impression are that he and his family never worry about starving to death; that they bathe daily; that they have several changes of clean clothes; that they have clean and healthy teeth; that diseases such as smallpox, polio, diphtheria, tuberculosis, tetanus, and pertussis present no substantial risks; that Melinda Gates’s chances of dying during childbirth are about one-sixtieth what they would have been in 1700; that each child born to the Gateses is about 40 times more likely than a pre-industrial child to survive infancy; that the Gateses have a household refrigerator and freezer (not to mention microwave oven, dishwasher, and radios and televisions); that the Gateses’s work week is only five days and that the family takes several weeks of vacation each year; that each of the Gates children will receive more than a decade of formal schooling; that the Gateses routinely travel through the air to distant lands in a matter of hours; that they effortlessly converse with people miles or oceans away; that they frequently enjoy the world’s greatest actors’ and actresses’ stunning performances; that the Gateses can, whenever and wherever they please, listen to a Beethoven piano sonata, a Puccini opera, or a Frank Sinatra ballad.

In short, what would likely most impress a visitor from the past about Bill Gates’s life are precisely those modern advantages that are not unique to Bill Gates–advantages now enjoyed by nearly all Americans.

Again, how we view wealth is all a matter of perspective.

Now having said that, like everyone else, I also have an opinion about how he should spend his wealth. I would never seriously question the merits of The Bill and Melinda Gates Foundation -- because, as I pointed out, it is their money to do with as they wish. On the other hand, while many people look on with admiration at their great philanthropy, I do have to wonder, is this the best application of their wealth?

Bill Gates is one of the greatest capitalists that has ever lived. He helped create a product that didn’t exist a generation ago, one that many today could not imagine living without. In doing so, he has played a large part in the creation of millions of jobs, made hundreds of thousands of people wealthy, and increased the production of our entire society. No matter how many billions he may give away in his lifetime, this will always be his greatest contribution. The most philanthropic thing Bill Gates could do with his wealth would be to continue doing what he does best by staying in the business world and creating more wealth.