Friday, October 31, 2014

He is a bold surgeon

"He is a bold surgeon, they say, whose hand does not tremble when he performs an operation upon his own person; and he is often equally bold who does not hesitate to pull off the mysterious veil of self-delusion, which covers from his view the deformities of his own conduct."  -- Adam Smith

Sunday, October 19, 2014

''Everything he'd worked for all his life was gone''

Good article in Rolling Stone here on an Ohio town that is not doing well. The hypocrisy of Kasich & Co. reducing the public school budget and yet subsidizing charter schools with state funds is disgusting, considering as well that their donors are behind the charter schools.

This is well-described:
Jordan was an all-state high school and Division One college wrestling champion, and he still moves like a jock, angling for a position where he can keep one eye on me and the other on the clock.
Unfortunately the author neglects to mention an effect of 'Obamacare':
McKenzie currently does tech support in the call center at WatchTV, an Ohio Internet-cable provider. He works an average of 24 hours a week and makes $9 an hour. Though he'd like to work 40 hours a week, he's been told repeatedly that full-time employment isn't available, and even at 30 hours, his company would have to pay him benefits [due to a provision of 'Obamacare'].
Would more companies hire without this provision?

This made me laugh:
''You don't come out and say you're a Democrat if you want to be successful,'' says Marc, a bearded, easy-going guy who says he had one customer who, assuming they were all on the same page, told him point-blank that he'd never spend money in a ''liberal'' establishment.
The customer's reaction is a straight parroting of Limbaugh. That he can't recognize it for himself...

It would be good to know of any corresponding increase or decrease in population:
Since 2008, the number of Allen County residents receiving food stamps has nearly doubled, from 8,973 in 2008 to 16,676 today, even as jobs have slowly returned to the area. In part, this is due to the stigma around food stamps having lessened thanks to the recession, but in general, ''it's a matter of wages,'' says Fox of the Lima Allen Council on Community Affairs. ''Are their wages enough to provide for their family and pay for their bills? No.''
For more data on this topic, Doug Short has posted interesting work here (see Earnings, Income & Net Worth).
Dukes complains that some of her customers who receive government assistance use it on luxury items. ''They don't work, and they're walking in with, like, Michael Kors purses and getting their hair done.'' On the other hand, the group agrees, just about everyone is cheating the government, somehow. ''Either I'm using government assistance to get a Samsung Five, or I'm taking advantage of tax loopholes and paying 15 percent of my taxes instead of 35,'' says Marc. ''Everyone is taking advantage of the system.''
''The problem is that if you grow up in, say, a lower-income family, your options are extremely limited,'' says Carissa. It doesn't matter what kind of grades you get in high school, she notes, as college is now a luxury for most people. And even with a college degree, then what? ''It used to be you go to college, get married, have children – you did the right things, and then you'd be guaranteed some kind of future,'' she says. ''But the whole pull-yourself-up-by-the-bootstraps American-dream thingy . . . that's kind of mythology at this point. To me, it's like a winning lottery ticket.''
I think of the Chaffinses, who embodied that ideal until, suddenly, they didn't. Even Dewey, the patriarch who'd set out from Kentucky intent on changing his family's fortunes, was defeated in the end. Soon after he retired in 2002, his company's Lima division went bankrupt and workers lost most of their pensions. That September, six months after retiring, Dewey died of lung cancer at 62, though his son Scott believes he also suffered a broken heart. ''Losing his and Mom's pensions, that was tragic for him,'' says Scott. ''Everything he'd worked for all his life was gone.''

Saturday, October 4, 2014

Sinking in

I'm relaying a few topics on which others can speak better than I [can speak].

First is an article on Acting Man by Keith Weiner. He is an Objectivist (a follower of Ayn Rand). I am not, so I don't think that corporations are good a priori, which is the implied flip-side of the coin[age] of his well-observed second paragraph. I am not a follower, due to ignorance, however. Note the comma, first. (I've read none of Rand's works)*.

He also omits that DARPA, a gov't agency, was the main sponsor of what became the Internet. Be that as it may, his article is worth reading for its dispelling of some common myths. And then: "The bond is payable only in dollars. The dollar is the liability of the Fed, backed by the Fed’s assets—which are primarily government bonds. Let that sink in."

Did you learn this in school? I didn't. So by writing this, I am attempting to understand...

The second topic is that of a rising interest rate. Given that the rate has to be low for the reasons alluded to above, I've worked out the following:

1. The government spends more than it takes in. The obvious corollary is that taxes don't cover expenses. Thus, the gov't has to get money from elsewhere, namely by borrowing it. And it's better to borrow at a low interest rate.
2. The Fed then lends the gov't money, aka 'Federal Reserve Notes', in return for bonds as collateral, or what seems to be the purchase of bonds. Important: it's collateral in that the debt is not extinguished. The bonds are to pay interest, so that the Treasury owes the Fed for the money it is lent. And it's better to pay back little interest, than a lot.
3. So how to keep interest low? Since the higher the bond price, the lower the rate, it's good to have a high price. And how to get higher prices? By keeping the demand for bonds high. And how to do that, but by buying bonds...

Does your brain hurt too? This may not be correct. In about 13 minutes I'll be drinking wine. And I didn't comment on this speech by Dallas Fed president Richard Fisher, or this article by financial manager Bill Bonner. But please, reader, read.

* Big Sister Is Watching You

Wednesday, October 1, 2014

Algorithmic journeys

Fascinating video series that I have just begun to watch, entitled Four Algorithmic Journeys. "I. Spoils of the Egyptians: How elementary properties of commutativity and associativity of addition and multiplication led to fundamental algorithmic and mathematical discoveries."

Skip to about 4 minutes in to bypass the academic preliminaries. Stepanov mentions that Thomas Jefferson wanted potential U.Va. students to master Euclid, as an admissions criterion. Fancy that today...