Saturday, December 27, 2008
"If there was one thing I learned from my experience, it was what a bad job the financial system does by people with low incomes."
Given the economic status implicit in pursuing an advanced degree, it is not surprising that virtually no economists have personal experience with living in the underclass. It is surprising though that more do not study this significant portion of the population.
A profession that seeks to benefit all portions of society should strive to understand all portions as well. No doubt many economists do not fully see the bubble of privilege they reside in. This lack of perspective damages the credibility of the profession and begs for unintended consequences in policy recommendations.
Perhaps it is too much for academic economists to step off campus, but they might at least get in touch with the Sociologists and Community Studies professors across the hall. This diary is a laudable example of the learning that can occur when we step into the shoes of the working poor.
I found this list of life advice useful and fairly comprehensive. My own comments follows:
Nice list Tom. I can hear a wealth of experience in your words. I am always grateful for the opportunity to skip hard times others have endured by listening to their stories!
I have to agree with the others that self-change is not easy at all. The real difference is that it is never impossible. If you have given away your ability to make the decisions in parts of your life it will appear difficult, perhaps insurmountable. But it’s never beyond reach.
I think the important thing is to realize that the first person you have to convince is yourself. “I can’t do anything” is a tempting thought, but if you reduce it to a trivial level it’s obviously false (you can always act at some basic point).
So if you find yourself lacking in confidence or motivation, start with your absolute smallest unconnected problem and fix it. Make a plan, gather what you need and get it done. Take a little time to appreciate your success, then move on to your new smallest problem.
By the time you reach issues that are actually difficult you will have built up some confidence and discipline in your problem-solving abilities and will feel ready to ask other to help. Just make sure not to rush ahead. Set a pace that won’t overwhelm you. Start soon and start slow.
Sunday, November 30, 2008
The gradual accumulation of checks in an organization is a kind of learning, based on disasters that have happened to it or others like it.
Whenever someone in an organization proposes to add a new check, they should have to explain not just the benefit but the cost. No matter how bad a job they did of analyzing it, this meta-check would at least remind everyone there had to be a cost, and send them looking for it.
If I taught an MBA class, you better believe this would be in it.
Sunday, November 09, 2008
A good article and worthy of attention, but I think you’re missing a few crucial points about the larger picture.
1. Efficiency is not the same as conservation. Conservation is the setting aside of resources based on the expectation of future value (usually economic value). Efficiency merely reduces the required inputs of an activity, allowing us to do more of what we want with the same amount of resources.
2. There is one very important class of product that does not necessitate the use of (significant) additional energy or resources. It’s called human capital or more commonly, knowledge. It is produced and replicated across all societies and cultures, everywhere that humans live. It has allowed us to escape the natural population cycles of other animals and prevented mass starvation, ever since Malthus earned economics the name of ‘”the dismal science”. I see no indication that people are running out of new scientific ideas. Quite the reverse, actually.3. We will use up a lot of certain resources but actually, that’s OK. When resources become scarce their price rises, creating an incentive to use less and substitute away. The higher the price, the greater the incentive. That’s precisely why the high oil prices of early 2008 jump-started so much activity in renewable energy, alternative transportation and non-fossil fuel versions of plastics etc. Non-energy products can be recycled and new materials can be invented.
In Conclusion: Have we used fossil fuels to bootstrap our economy in an unsustainable way? Yes. Will the environmental impacts cause more damage than we expect? Probably. Can we invent solutions to both of these problems? Absolutely. It won’t be easy, but what’s different about that?
Thursday, November 06, 2008
Tuesday, October 07, 2008
The article's idea is that people have been encouraged to over-save and take excessive risk. My thoughts:
This reminds me of a book review I read approximately 1 month ago, where the book's author argues the financial sector is built on 'pimping risk'
Seems like a very credible argument to me, given a few direct and indirect glimpses I've had into the industry. Their incentives are aligned to make money off two sources: new vehicles that have not been competed down to commoditization (such as hedge funds) and expensive vehicles that charge high commissions based on sector hype or recent performance. Both things are the continual attempt to achieve superior returns (at superior costs of course) and this chase often leads to superior risk. All of which is not to say that the industry does not add value, but who do you think the bulk of that value goes to? Call it tragedy or call it farce, finance is the grown-up version of 'Telephone'.
Sure, some of our food travels farther than necessary, but it does so largely efficient ways. As a result, the environmental effects entailed in transport are not the main story. There are however a lot of costly externalities, especially from meat production.
My comments here.
Sunday, October 05, 2008
An interesting article with an extreme bias towards the intelligent and ambitious set.
I think there is basically one criterion for Success: create something good or destroy something bad.
(Btw, be Really careful about that second one.)
Here’s the Problem: you will probably not Succeed at a 9-5, at least not anytime soon.
That’s because a 9-5 not designed for Success, it’s designed for Stability. Decent income, minimal risk. And let’s face it, creation and destruction are risky! But with that risk comes greater potential reward. Wealth doesn’t just appear, it has to be created (natural resources being the blatant exception).
So if you want out, you need to plan for risk. That means saving of course, but it also means communicating your plans to those around you. Finding partners and supporters is every bit as important having the idea in the first place.
Just don’t fall into the trap of not engaging people because you don’t have one yet. Your brilliant idea will be a variation of someone else’s idea.
Sunday, August 03, 2008
Monday, July 14, 2008
Food: Tacos, with sliced parmesan cheese. Let's just say not all cheeses are created equal.
Song: Busy being fabulous - Eagles
"And you were just too busy being fabulous
Too busy to think about us
I don't know what you were dreaming of
Somehow you forgot about love
And you were just too busy being fabulous, uh-huh"
Maudlin, sappy non-event. The refrain is so bad it just makes me shudder.
Movie: Anger Management
I'm not much of an Adam Sandler fan in the first place, although 50 first dates isn't terrible and Zohan looks interesting enough. But, this movie seriously made me angry, which is saying a lot because I almost never get angry. Annoyed, yes, irritated sure, but enraged, almost never. I was so incensed by this movie's complete lack of respect for my intellect that I had to go hop on my rowing machine for a good half hour just to prevent myself from breaking random household objects out of sheer spite for the world.
Monday, July 07, 2008
How do we confront such loss? How do we mourn? The things that have been are over and yet they seem to remain, fading memories stacked on dusty shelves. Do not desire that which was, for the light once made cannot be recaptured. Only one choice then; to walk, head held high into the fading sun, a passel of moments at our side. Dark and bright, ebbing and burning, to atone, to inspire and to create anew.
Thursday, June 19, 2008
So I have been exploring possible avenues of savings. The easiest so far have been opening a high yield savings account and finding better credit cards. Since we just use them to buy things we would get anyway, it's a straightforward savings of 1-3%+. My favorite usages are Chase Freedom (3% utilities/restaurants/dept stores) and Citi Dividend Platinum Select (5% gas, groceries and drugstores for 6 mo, 2% after).
I recently discovered a very interesting site by CapitalOne allowing you to design your own card.
You enter your approximate credit rating and then pick from a range of features. Two options in particular seemed notable; With a credit rating of good or excellent you could get 2% cashback on everything for the first 12 months and 0% on purchases for the first 9 or 12 months respectively, for the arbitragers out there. Also, an intriguing alternative of 1% cashback and a flat bonus of $.10 (or 10 points). This is really only worthwhile for purchases of $10 (2% return) or less, but if anyone can think of consistently worthwhile purchases for $1, I'd love to hear it. 11% seems awfully tempting, but its hard to justify a daily trip to the Dollar Store for 11 cents when it only nets $40/year.
In sum, while it's interesting to see what what they're willing to put out there, the 2% option is the only one I have seen that really surpasses any regularly mailed offers.
Monday, June 09, 2008
Sunday, May 04, 2008
Lovey-doveyness between self and partner
Occasional moments of shock and panic
Hearty social approval from acquaintances and strangers
Strange object stuck on ring finger. May be inoperable.
Fortunately our quality of life should remain high, provided we follow regular treatments to make sure it does not lead to any of its common complications, such as pregnancy.
Wednesday, March 05, 2008
There's a basic level of knowledge needed to operate that everyone has, except you of course. Often linked with the local culture of a group or region, these things come in the form of implicit (undocumented or unspoken) steps, and they drive me nuts! However, they are often very important to the activity at hand, so they are definitely worth pondering.
They also tell me one or more of the things below is true about, you, the person that I encounter in this new context, and how you treat me:
1. You are not consciously aware of their existence. Having participated in the culture for so long, you simply no longer notice the steps and rules unique to the situation. Depending on your degree of personal empathy, you will expect me to understand some or all of these things already, likely without even realizing this may be an unreasonable assumption.
2. You are aware of the existence of the implicit rules, but don't fully understand them and are embarrassed to reveal your lack of knowledge. This can lead to a lot of jargon and vague statements, spreading further confusion.
3. You understand the rules but have insufficient motivation to record and explain them. Perhaps your time is too valuable (or in relatively high demand). Maybe you just don't know who I am or why you should bother to help me. As Peter said in Office Space: "...it's not that I'm lazy, it's that I just don't care"
4. You understand the rules but deliberately withhold knowledge in order to maintain a tactical advantage. This is true in many businesses, as well as politics on all levels. Thankfully, the many of these places have opened up dramatically, as the Internet has lowered the cost of recording and spreading such knowledge.
Such knowledge hoarding won't go away any time soon though; there will continue to be such secrets as long as the benefits of keeping them outweigh the benefits of sharing. I figure that for a particular person in a particular area of knowledge, the trend would look something like this:
accumulation of knowledge -->
Of course this trend is quite debatable and depends heavily on the knowledge at stake. Perhaps 'willingness to help without competitive compensation' would be more accurate. Also, the curves could vary in interesting ways depending on the subject matter.
No doubt there are many counter examples to the trend, mostly falling under the umbrella of altruism. I would postulate that most such cases are prompted by biological factors rather 'rational' behavior, in the economic sense of the word. Such cases of conflict between benefit to self and benefit to a larger group provide some of the most interesting cultural indicators.