Showing posts with label Economics. Show all posts
Showing posts with label Economics. Show all posts

Monday, March 6, 2017

Recently Read

Listen, Liberal
Or, What Ever Happened to the Party of the People?
by Thomas Frank

It took a decade and a half of political reporting, Barack Obama’s presidency, and a presidential run by Hillary Clinton to make Thomas Frank get serious.

This is not to suggest that Frank, famously the author of What’s The Matter With Kansas? and other works of political analysis, has never taken his subject seriously. But previous iterations of the author’s work have included healthy doses of incisive wit sprinkled within the cogent political analysis.

Not so much with Listen, Liberal. Frank’s writing remains top-notch, and his deconstruction of the dissolution of what used to be the Democratic Party is smart, convincing, and frankly—no pun intended—more than a bit depressing.

Perhaps Frank himself was getting that same vibe as he was crafting his prose. Even though his previous works covered a lot of the same ground, Frank’s earlier texts always included more than a few laugh out loud moments—either through the author’s exposition on the true absurdity of his subject, or simply via his own clever turn of phrase. But here, as Frank recites the laundry list of charges against today’s allegedly liberal political actors, nothing in the writing ever really comes across as funny.

Listen, Liberal
by Thomas Frank
That should be a minor defect when you’re reading a work of political analysis, but Frank has previously set his bar so high that anything less than a complete reading experience comes across as at least a minor failure.

That critique would be unfair as a total analysis of Frank’s tome, since in all other aspects Listen, Liberal succeeds at its task. Frank presents a powerful case—an indictment, really--that the modern so-called Democratic Party has succumbed to narcissism, rationalization, and just plain bullshit instead of sticking to its guns and truly doing the work of being the “party of the people.”

Frank argues that, through fetishizing “innovation” and that concept’s assorted empty promises, the Democrats of the last twenty or so years—particularly the ones carrying around the surname Clinton—performed a pantomime of the traditional party’s platform. Instead of fighting for working people—labor as a political subunit in particular, but in general everyone who falls below the top 20th percentile in earnings—modern Democrats sold out the poor and the middle class in order to cater to the desires of wealthy donors. In other words, they behaved just like their presumed adversaries in the Republican party, with the exception of preferring to kowtow to tech moguls versus the bigwigs of the extraction industries. Regardless of that minor difference, as Frank makes perfectly clear, the nation found itself deprived of two legitimately separate parties—a real monkey wrench for a political system supposedly built around a “two-party system”—which meant that that bottom 80% wound up deprived of pretty much everything that could have made their lives better. No wonder, given Frank’s analysis, that everyone with a keyboard must now type the improbable phrase “President Trump.”

If there is any real failing of Listen, Liberal, it is that Frank’s personal voice sometimes come through a little too stridently. The author clearly takes sides in this political exegesis; not to say that he’s on the wrong side, but Frank certainly veers away from the traditional standard of objectivity that used to be the gold standard of political journalism. If that blatantly biased viewpoint is a failing, it is certainly an understandable one, given the times and political milieu in which a reporter must work today. As with Hunter S. Thompson back in the early ‘70s—when the great Gonzo journalist famously declared that objectivity was a vice when reporting on that time’s largest political actors, that one needed to report subjectively in order to truly see what a monster Richard Nixon was—Frank finds himself faced with characters who also demand a subjective treatment in order to expose their true natures. It is a greater indictment of Bill and Hillary Clinton, and their various political satellites, that they have sunk to such Nixonian depths that make such a subjective viewpoint necessary, than it could ever be of a journalist as worthy as Tom Frank.

All things considered, Listen, Liberal overcomes its weaknesses to stand as a welcome addition to the author’s title list. Frank remains an essential guide to the political movements of our times, and this latest work earns its place within Frank’s impressive canon. What will raise Listen, Liberal up from a good to a great work of political journalism will be if its readers—hopefully including big names within the ostensible “people’s party”—take Frank’s lessons to heart and stop caring so much about obeying the right billionaires, and start caring much more about helping the millions who need good, fair, and equitable government.

Friday, January 13, 2017

Reel Reviews

The Big Short -- I don’t think this movie makes a good case that any of the investors depicted is the hero of this story. Perhaps that’s the point: there were no heroes, and couldn’t be, given the nature and scope of the crimes being committed. It’s entertaining, almost to a fault. A few of the scenes--particularly the expository interludes--are a little too clever; they actually undermine the seriousness of the message of the movie (if any). Will anyone learn anything from this tale? Of course not; the same swinishness is already happening again. But, at the very least, next time no one will be able to claim that no one saw it coming.

Saturday, June 25, 2016

Neomedieval Times

For many years now, I've been in the camp that believes we are heading into--indeed, that we've already entered--a new medieval period in Western history. (And, since Western history is--after the European/American conquest of much of the world in the last century and a half--now basically world history, this applies to everyone everywhere.) I would suggest that future historians will probably mark the beginning of this "Neomedieval World" as having happened either in 1989 (the fall of the Berlin Wall), or 1991 (the collapse of the Soviet Union), or perhaps even 2001 (the September 11 attacks). Whatever comes to be the agreed upon date, it looks like the future world will look back on these days as the beginning of a new middle ages for the world.

I bring this up today, June 25, 2016, because we are still in the immediate wake of the UK's "Brexit" referendum, and it just occurred to me that the vote to leave the EU goes along quite well with the overall scheme of order in a Neomedieval World. After all, one of the characteristics of the original middle ages was political dissolution throughout Europe. The unity that was the Roman Empire dropped to the floor and shattered into almost innumerable pieces back then, and the straining that is fracturing the EU--which I've seen referred to as the highest peak of European unity since the Roman days--may lead to just the same sort of patchwork of kingdoms and principalities that ruled and shaped Europe for a thousand years during the first medieval period.

This desire to create break-ups and increase political fragmentation will not necessarily end with the UK leaving the EU. There's already some talk about a "Texit" hitting the United States, with Texans possibly angling to secede from the Union in one way or another. (I'm not sure how that would work--previous attempts to secede did not go well, as you know--but I wouldn't dismiss the matter out of hand, either.) More likely, other members of the EU may seek to leave the union now that the UK has shown the way. It's not out of the question that the whole thing could collapse in the coming years--and we're not talking about decades, either.

What will be the consequences of such a dissolution? Hard to say. But given the history of the continent, and the contours of history that the medieval world presents to us, it's quite possible that neomedieval Europe would see its multitude of states in competition and conflict with each other. (The same would apply to a dissolved former U.S.A.--or any other place in the world where fragmentation and Balkanization might occur. An American break-up may seem out of the question to some, but I'm not the first to have imagined such a thing.) In other words, war is a possibility in at least some parts of Europe, as it was back in earlier medieval times. If you're holding a passport and want to go see Paris and/or Rome, you might want to book your trip sooner rather than later.

If things do dissolve into war, over whatever issue might lead to violence, that would certainly give greater validity to the whole Neomedieval World idea. After all, most of the attributes of the medieval world--endemic violence, political fragmentation, severe polarization based largely on religious identities, and loss of knowledge and lowering of the education level of the general populace--are already in place now. We've just seen the political fragmentation in play; religious polarization has been a daily topic ever since 9/11; and this country's ongoing education crisis is providing the biggest thrust for the loss of knowledge and education level in the populace (which never got super high in much of the world outside the wealthy West anyway). Violence has remained endemic in most of the non-elite parts of the world; if tensions between former EU partner states rises to the point of actual armed conflict on the continent, then that chicken will have come home to roost in Europe, too.

So the Brexit vote may be just one more step down a path that began a couple of decades ago, a march that seems to be leading us back to a future in which a great deal of what we have come to see as the modern world may be lost, at least for a period of time.

How long a period of time? No one can know, of course. But one hopeful thing to consider is this: whatever the nature of the next few years, or decades, or centuries, one thing we have consistently seen in our recent history is an acceleration of the pace of change. So while the original middle ages lasted roughly a thousand years in Western Europe--almost evenly split between the Dark Ages and the High Middle Ages--there's a good chance that the Neomedieval World will run its course over a much shorter period than the previous medieval incarnation. And then a Neoenlightenment may usher in a new, better age of human history.

At least we can hope that's how it goes.

Monday, February 23, 2015

No Appreciation for Depreciation

You hear it said all the time: "I would never buy a new car, because the value depreciates by a huge amount the moment you drive it off the lot."

This bromide has been repeated so often that it has become an honored bedrock constituent of conventional wisdom. Most folks who hear this sentiment will nod their heads in agreement at the worthy who spoke these words, and will swear to the heavens that they too would never buy a new car, lest they also see their car's precious valuation drop like a bird struck dead.

There's just one problem with all this: it's stupid.

I don't deny that a new car's value immediately decreases as soon as you've bought it. That's undoubtedly true. It's just that it doesn't really make much difference if your vehicle's value immediately drops by several hundred, or even thousands, of dollars as soon as you drive it. Why would it? Presumably, most people who buy a new car expect to keep that car for an extended amount of time, probably for many years. In that scenario, why would you care if the car you bought for $22,000 is now only worth $19,000? You're not planning on selling it anyway. Why do you need to make sure that you hold onto that extra three grand in value? Are you a junkie gambler and need to use your brand new car as collateral on some desperate bet? Will your bookie only accept a car valued at $20,000 on your parlay? If that's your situation, you've got bigger problems than your car's depreciation.

Value drops off sharply at first, but after some time the rate of depreciation is going to slow down (assuming you take care of the car reasonably well). The car you buy new will lose value quicker than the same car from two model years before purchased new or used. But in eight years, when the new car is eight years old and the earlier model is ten years old, which will have more value? As likely as not, it'll be the one you bought new, though probably not by much; both cars' values will approach each other as they get older and older.

Some will object that the valuation matters for insurance purposes; that is, for premium purposes and for what you'll get on a claim if the car is totaled a week after you drove it off the lot. Premiums will always be higher for a newer--that is, higher value--vehicle. But at least one insurer--Liberty Mutual--specifically advertises a policy of "one year newer" replacement for stolen or wrecked cars. Other insurers probably have similar policies, and if they don't...well, more business for LM. Bottom line: insurance is hardly a reason not to buy a new car, if you can afford it (both the car and the premiums).

The "depreciation problem" thing is one of those examples of something that stupid people hear and they agree with it because they think it sounds like wisdom--except, of course, they're stupid, so what do they know about wisdom? This matter, like many other examples of conventional wisdom, falls apart when you think it through.

Now, if you want to lease a new car...well, you're on your own there.

Saturday, July 20, 2013

Taylor's Laws

An occasional series in which I promulgate certain laws of nature, to help us better understand the universe around us

Taylor's Vehicular Follicle Law

Any luxury car, when being driven with at least one passenger accompanying the driver, will contain at least one blonde person.

Explication: This law is described purely from observational sources. Having lived in enclaves frequented by luxury car drivers for many a year, I can attest from personal witness that this law is true. Why this circumstance is the way it is, is probably an exercise best left to the intelligence of the reader. The socioeconomics of blondness being what they are, this is almost axiomatic, in an a = a sort of way. Nevertheless, this law is worth recording for posterity, if nothing else. Note that the blonde person in question need not be the passenger; it is only necessary for there to be at least two bodies in the vehicle for the law to be operative. (It is entirely possible for a solo luxury car driver to be raven-haired; but if said person is accompanied by a passenger, that passenger will be blonde.)

Thursday, October 25, 2012

No Contest: The Real World Wins Hands Down

Lately, I've been on a run selling my old CDs--not because I've grown tired of my music, but because I no longer have the space to accommodate 100+ discs and their containers. At first I went the online route, selling my discs via sites like "selldvdsonline.com" and "mx123.com." (I'll name them, but I won't provide links, for reasons that will become obvious below.) I thought using the online sites would be an advantage to me: you enter the disc's bar code for pricing, so you know right away whether a disc will sell or not--no lugging any duds to the store; the online vendors pay for shipping, so it's just a case of packaging the order up and getting to the post office; and (important for people-shy types like myself) you don't have to deal with any of the music store weirdos face to face. Seemed like a good way to go.

The mad monk is your friend
Alas, not so much. While it is true that I was ultimately able to make approximately $37 selling old, unwanted CDs online, the process was a pain in the ass.

Many CDs were rejected out of hand, because the bar code did not show up in the vendor's database.

Packaging the orders meant finding a suitable box, packing the discs properly, and securely sealing the box--and then I still had to get the thing to the post office. Not horrendous, but still a pain.

But those issues paled in comparison to the actual process of completing the sale. The worst indignities came after the vendor received the order. Of four separate orders sent by me, three of them had "problems" according to the vendors.

In two cases out of three orders sent to selldvdsonline.com, the vendor informed me that a disc was "missing" from my order. This despite the fact that, by their own assessment, the package seemed undamaged, and I certainly had no spare discs lying around at home. I was particularly assiduous about double-checking the order after the first "missing" disc issue. The fact is, I KNOW that each order included all of the intended discs. But who's going to haggle--long distance--over 25¢? In both cases, the payment I received was marked down by the value of the "missing" discs.

Worst of all was my experience with the execrable mx123.com. It took almost 10 days for them to acknowledge receipt of my order. After several days with no payment, I had to nudge them via email. This led to a response telling me that my order had "quality" problems, that several of the prices for my discs would be marked down because the discs or packaging did not meet their standards. (Funny, the other place never had a problem with the quality of my discs.) Again, I was told I would be paid "within 3 business days." It was only after the fourth business day, when I was ready to send another, considerably angrier email, that I received my payment. And finally, to add insult upon insult, my payment was reduced by 57¢ for PayPal's transaction fee. (None of the other payments from the other site--or indeed, any other payment I've ever received via PayPal--had a fee deducted from them.) I feel lucky to have gotten away with any money at all from those turds.

Contrast those experiences with what I got when I took two grocery bags full of CDs to my nearest Rasputin outlet. I had some trepidation about taking a big chunk of my music collection into the store at once, but two paper grocery bags full of discs (had to be about 70-80 CDs all told) was no problem for them. I had to wait while the (very friendly) clerk went through my discs one by one to assess prices, but the experience wasn't at all uncomfortable. Ultimately, I was offered $55 cash for my discs--without any of them rejected for "quality" reasons. (They offered $63 store credit, but I didn't take that, since I had other things to buy.) The entire process, including the drive to the store, probably took no more than 45 minutes, I got rid of my CDs, and I walked out of the store with $55 cash.

It was no contest: the real life, bricks and mortar, actual building on the street Rasputin store won hands down over the online outlets. I only wish I'd gone there sooner. If you find yourself in the same situation, got some music or movies or such that you'd like to sell, give your local store a shot. You'll be glad you did.

Sunday, August 5, 2012

A Class Issue

I've been saying it for years: Fat is a class issue. Meaning, in the United States in particular, whether or not one is obese has a lot to do with your socioeconomic class. The condition is not entirely determined by your bank account, but your money has a heavy influence on your weight.

Now, at least, someone has agreed with me--or at least expressed that agreement in public. I call to your attention this article, Slim Chances for America's obese by author Gillian Tett, as posted on the Financial Times website. The money quote:
…one key for higher obesity rates in poor areas is that those communities have less access to expensive fresh food, exercise and other health aids. The problem is widespread among children, where the obesity rates have grown at a particularly sharp rate. Conversely, surveys suggest that individuals who are obese tend not just to suffer worse health, but have less-positive job prospects.
A few comments to make here: it's refreshing to see someone acknowledge the plain fact that fresh foods is expensive. So often, when this topic is broached, the discussion includes a scolding tone about how ridiculous it is that the poor don't eat enough of that good, fresh, and presumably cheap produce that the (well-compensated) commentator gets to enjoy on a regular basis. That is just nonsense; fresh produce--especially good fresh produce, which you can't get at the supermarket--is not cheap. Not only does it often cost more per unit (or, more particularly for the subject at hand, per calorie) on the face of it, but fresh foods are, ahem, fresh. That is, they go bad. Every fruit that rots, because the buyer did not have the opportunity to eat it before was lost, is wasted money. And--this may shock you, if you are a pundit--poor people don't have money to waste. A can of Spaghettios may be shit, and not very healthy, but it's shelf stable. You won't lose to decay a penny of what you spend on it.

Also, as Tett notes at the end of the above quote, if you're poor and obese you're likely to stay that way. I know from personal experience, if I go looking for a job, all other things being equal, the potential employer is going to hire the skinny person over me. This may, perhaps, be enacted with an eye towards the bottom line, via health insurance premiums. But just as likely, it's because the person who's doing the hiring simply doesn't like the look of you and your excess adipose tissue. You get trapped in a vicious cycle, one that is almost impossible to break with out a lot of help, or perhaps just some dumb luck.

Notably, many of the comments that follow Tett's piece are dedicated to refuting the position her article lays out. This is not surprising; no group lives more on the bad side of the Real Golden Rule™ ("Blame the object of your hatred for being the object of your hatred.") than the obese. That strategy--denying that the ever-growing problem of obesity in this society is something more than millions of individual personal failings--has grown in tandem with the problem. It's one of the reasons that this issue is not likely to be resolved anytime soon, not just in an election year (as Tett points out in relation to governmental intervention).

But at least now I have one example that confirms that I'm not just a lone voice in the wilderness.

Monday, March 12, 2012

Recently Read

Pity the Billionaire
Pity the Billionaire
by Thomas Frank

What's the matter with Thomas Frank? Nothing, in particular.

Frank, the author of multiple explorations of America's right-wing madness--including the now classic What's the Matter with Kansas?--has not sunk into a literary morass in any legitimate sense. His latest work, Pity the Billionaire, shares much in common with the author's published antecedents, particularly Kansas and The Wrecking Crew. Frank brings his usual keen insight into conservative minds and motives, and presents his thesis with impeccable logic and exhaustive research and citation. (Pity might be better reserved for Frank himself, who, judging by the extensive notes backing up this slim volume, must spend more time watching, reading, and immersing himself in right-wing media and live events than anyone ever could and still hope to remain truly sane.) And the author's greatest strength--Frank is one of the best wordsmiths in the field of political discourse--remains intact; when Frank describes Sarah Palin as the "[right wing] movement's snarling sweetheart," it is just one more example of his skill at delivering a wholly apt yet economical mot juste.

Yet, for all that, Pity the Billionaire never reaches the same heights of literary brilliance as Frank's earlier works. While the book delivers plenty of solid reporting, along with several chuckle-worthy turns of phrase, Billionaire never lifts the reader up to the seriocomic heights they way Kansas did. The latter book, with sublimely titled chapters like "Russia Iran Disco Suck," and its ludicrous exposé on the various anti-Popes who call the Sunflower State their home, meets no equal in Pity the Billionaire. Though it covers much of the same warm and fertile ground, Billionaire reaps a somewhat uninspiring harvest.

Why is this? One might first suppose that the latest work is simply an inferior effort, but that interpretation doesn't feel satisfactory. Upon further reflection, the problem may lie--ominously--with the passage of time. Here is Thomas Frank, pricking much the same balloon as he was nearly a decade ago...and yet, for all of its absurdity and wrongheadedness, that balloon never seems to deflate. Indeed, as the central thesis of Pity the Billionaire points out, the balloon keeps re-inflating itself, actually growing larger than before, no matter how forceful are the efforts of men like Frank to put it out of its (and our) misery.

The overall effect, then, is one of recognition and at least mild depression: recognition that this thing keeps happening to us, and a sense of depression when we recognize that we can't seem to escape it--that we should expect the same thing to keep happening to us, and keep doing the same damage over and over again. Knowing that Glenn Beck is an asshole does nothing to keep Beck, and others like him, from soiling our political landscape and leading legions of the misinformed down socially destructive paths. Frank can point out the folly, pick it apart for all to see, and we can absorb the knowledge he presents us--but we're still bound to have to live with half the population playing suckers and fools, to the detriment of(almost) all of us.

As Frank makes perfectly clear, there's no reason to pity the billionaires. Those .01%ers are doing just fine, as always. It's the rest of us who could use the pity. We can hope that Thomas Frank and his ilk keep trying to talk some sense into our nation; but it's becoming more and more clear that we can't rely on the lesson ever taking hold.

Thursday, January 5, 2012

Recently Read

Predictably Irrational
Predictably Irrational
by Dan Ariely

So it turns out that the invisible hand of the marketplace is palsied, weak, and apparently attached to a kleptomaniac.

That is the inevitable conclusion one must draw from Predictably Irrational, Professor Dan Ariely's light treatise on how we among the consuming public act as purchasers, choosers, and in some cases outright liars. In a light and breezy tone that makes for easy reading, Ariely serves up a succession of arguments about the nature of human beings as economic animals--backed up by examples from his own research experiments--all of which point to the same idea: that we do not always make the correct, rational choices in life circumstances both large and small. Instead, we carry with us biases that frequently thwart our best efforts to make the right choice, in situations as trivial as buying a piece of candy to those as momentous as deciding what house to buy or what career to follow.

Through his work and experiments, Ariely demonstrates that not only are we irrational choice-makers, but (as the book's title suggests) that we are predictably so--that there is, in fact, little mystery in the frequency with which we make our unwise decisions. All one needs is to know how to read the characteristic elements of any given situation--particularly commercial transactions; i.e., anything involving money--to make a safe bet on which way the typical person will go when making his choices. Such is the author's argument, and Ariely makes the case that, with a little self-awareness and a little more careful examination of the pieces in play, we can train ourselves to make better choices.

Such is the implications of Ariely's argument for our personal outcomes. More intriguing, from a broader perspective, is the implication of his work for the larger political sphere. In short, Ariely's demonstrations of our irrationality as economic actors strongly refutes the current received wisdom, touted so often by the Very Serious Persons, that market forces are always right, that Adam Smith's famed "invisible hand" will correct all economic mistakes and guide the world to better outcomes for all. The pundits' oft-invoked credo, that we must "let the market decide" what's best for our economy and politics, relies on a foundational concept that just isn't true. Ariely himself touches on this idea in his conclusion:
Standard economics assumes that we are rational--that we know all the pertinent information about our decisions, that we can calculate the value of the different options we face, and that we are cognitively unhindered in weighing the ramifications of each potential choice...wouldn't it make sense to modify standard economics and move away from naive psychology, which often fails the tests of reason, introspection, and--most important--empirical scrutiny? Wouldn't economics make a lot more sense if it were based on how people actually behave, instead of how they should behave?
Those questions ring loudly in the ears of anyone who has witnessed the conservative free-market mania that has enveloped much of the world in the last thirty years. We are living amid the debris scattered about by what has been, at best, an unswerving faith in the rational decision making of actors in free markets. (At worst, it's been little more than a cynical swindle, but that's another story.) Ariely's experiments--particularly those focused on the common human impulse to cheat for personal profit--put the lie to that misplaced faith. We can only hope that some policymakers pick up Predictably Irrational and learn not to listen the next time some think tank pundit tells them to let the market decide what's best for the country.

For our own part, we as individuals can read Ariely's book and try to make ourselves more aware of the biases we bring to the table in all walks of life, Maybe, if we keep Predictably Irrational in mind, we can all make better choices and come out ahead for ourselves, if not our society and our world.