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Like “Well look at Europe, they aren’t having problems”, another fun innerweb argument you (used to) hear is that “Federal government debt is no big deal because of our fantabulous GDP”. In it’s classical form, the phrase goes something like “Well sure, four thousand hundred brazillion dollars SOUNDS like alot of money. But as a percentage of GDP it’s actually very small.” (tap finger on side of head like an economic maven)
This was a very compelling argument. I mean, when you’re an economic powerhouse the likes the world has never seen…well you’re a little different. Then the total debt projections came true, economic activity slowed, and in non-economist terms got way worser!
Debt as a percentage of GDP just went to 101.5% of GDP. And there’s plenty of way worser to go.
Note how as recently as 2009 this picture didn’t look so bad. The figure is rapidly deteriorating with no end in site, so you don’t have too many people still bring up this argument. But let’s explore the space a bit.
First, no matter what “experts” say, GDP is a terrible thing to measure against debt. GDP properly understood is a measure of economic activity, not worth.
This means GDP includes government spending, which is a bit circular when you think about it. When a bank asks for your income, you don’t include how much you ran up on credit cards last year. But when you compare debt to GDP, that’s exactly what you’re doing.
Further, imagine getting kicked out of that bank and going into another bank to ask for a loan. Then when they ask for income say “would you like my income? Or my total economic output for the company I work for?” Only one of these figures is really relevant, because you can’t pay a loan from your “total output” even if you’re a really swell person. I bet the banker won’t even listen to even your very best internet message board argument. As taxpayers whose grandchildren have become collateral, neither should we.
Lastly, since GDP is a measure of activity, it can change wildly. Things can be just great until they aren’t. Then you have a big problem on your hands.
A far better thing to measure debt against is government revenue. Because that’s a pretty good indicator of a government’s ability to pay back a loan. I’m not talking about OMB or CBO estimates of revenue. I’m talking the actual amount that the government is actually taxing under current political will and economic ability. As Europe is showing us right now, you can only base the data on actual revenue. That’s outside the scope of this post, but we’re not doing too well on that front either.
So the proverbial jig is up for the whole “debt vs. GDP” argument. But I know where you money printing, debt-loving, pro-gubmint Keynesians are going next:
“But…when you look at the actual holders of the debt. We owe it to ourselves, and that makes it ok.”
So we’ll tackle that one next. Because sometime in the next 5-10 years that saying will also go away.
People may wonder why I don’t typically engage in long, circular internet arguments. That’s because I’ve been there and done that many times. I was engaging in pointless digital arguments long before the internet was a thing, much less a cool or hip thing where everyone lived. This old fashioned debate involved BBS discussions dialing up to single systems and browsing for a little while and leaving. It’s very old, and very repetitive….even when the arguments are over Gigabit fiber.
Don’t get me wrong, it’s a fun and educational exercise to throw thoughts out there and see what sticks, or to try a certain flavor of rhetoric and see who likes and doesn’t like it. But after awhile you start to realize that it’s the same old thing over and over again. There really isn’t much new out there. And it’s pretty rare to actually see someone change their mind.
So, it’s only really interesting now when something actually does change. A couple key things have here and there. Thus, I’m noting them.
The first thing is Europe. I tend to fall on the libertarian/conservative side of pop-political thought, and for years my friends on the more liberal/progressive end had one wild card they could always play:
“Well look at Europe! At age 5 they give everyone a free puppy! And they get 7 months vacation and retire at 45! Everyone is in a union! And they get free healthcare and college and Europe isn’t blowing up!”
You don’t see people saying that much anymore. That’s because the bills are coming due in Europe and it’s not pretty.
Stop one is Greece. Turns out all these progressive, populist ideas are expensive. You have to borrow a bunch of money. Eventually you can’t borrow anymore so you have to print the money.
Only Greece can’t print money because it uses the Euro, not it’s own currency. But Greek debt is so big they can’t leave the Euro because has it’s own set of problems. But if people lend to it they want them to cut back spending and social programs (austerity). But people are now dependent on this spending and social programs, especially the elderly. But austerity is actually making it harder to pay off debts. But you can’t trust the Greek government and they need an independent monitor. But that means they aren’t sovereign anymore.
That’s alot of buts and they just keep coming. But at the end of the day, the Greek populist economy is unsustainable and many people are going to be hurt because it was tried. If “solution” means “everything’s going to be just fine”, then this is an unsolvable problem. It’s not going to be fine even though they announce a groundbreaking bailout package every few months. It’s clear that the math just doesn’t add up and the next time will be worse until Greece completely defaults–unable to pay it’s people or it’s external creditors.
Meanwhile, the very same mathematical situation is rumbling in several other European countries. Math is also setting up shop here in the U.S. too…although the endgame will be much different.
So consider it noted: you don’t hear many people referencing Europe’s populist utopia anymore. Europe is actually experiencing the very difficulties that many people warned about.
So the “Occupy” movement is currently the darling of the media and internet. Criticism, support and comparisons abound. Some compare it to the Arab Spring, but until they are walking into bullets or disappearing in a large government building somewhere there’s really no comparison. There are also many who have billed it as a progressive tea party, which of course makes the tea partiers mad.
But from my perspective, I don’t see any more coherency in the Tea Party message than in the Occupy message. The were just as many contradictions there (“Government out of our lives, and hands off Social Security!”) as there are in the various Occupy displays. But the Tea Party was able to affect elections and congressional votes, and that’s what counts. I doubt the Occupiers will have that success, but if they do it will be just as pointless in the long run.
Both groups miss the point of what’s wrong with our country. The problem isn’t less or more capitalism or government. The problem is we have eliminated great gobs of free market capitalism. There is a huge difference.
Capitalism is about ownership and profit. Free market capitalism (FMC) is about competitive ownership and profit by free players in an framework ruled by supply and demand. Economic freedom comes from free market capitalism. Plain ol’ Capitalism oppresses just as well as any government (because ultimately they becomes one and the same.)
In the two governing groups, we know where Democrats stand when it comes to FMC. Generally they will do whatever they can to try and engineer reality for the greater good or to solidify their own control. But when you look close, Republicans have done just as much to destroy FMC for the smaller good or to solidify their own control.
Whereas Democrats are always pushing policies that benefit large, established government; Republicans are always pushing policies that benefit large, established businesses. Republicans love increasing the power of monopolies via Intellectual Property, Patent, and copyright laws. They love big banks and telecom companies and tweaking the rules under the direction of the big players. They love big agribusiness and subsidies. They pass laws that benefit those businesses, talking about how these capitalist measures will increase jobs and benefit everyone. The problem is, they won’t. When you institutionalize big business, it’s no better than institutionalizing big government.
Laws that benefit big business (capitalism) are just as destructive to equality, employment, and Democracy as laws that benefit big government. What we need is more free market capitalism.
The first response to this will usually be from progressives and how free markets (lacking in regulation) actually caused our current crisis’. Up next I’ll discuss why the opposite is actually true. Regulation created this mess.
I’ve never been a “Mac Guy” per se. I was definitely impressed by OS X (enough that I got an iBook, and later a Macbook). I have many Mac-crazy friends. My family also has countless ipods, iPhones, and an iPad. But even if you don’t have Apple products, the products you do use are heavily influenced by Apple and thus Steve Jobs.
But whatever you think of Apple, clearly Steve Jobs led a remarkable life. In reviewing his bio, I noted a few things:
I’ve mentioned the problems in balancing the Transformational and the Operational in the past. Here’s a great example of a failure: the new Coca Cola machines, designed by Ferrari people.
They look cool. They offer 100 or so different drinks. But they’re terrible. Why? They completely ignore the transactional nature of getting a fountain drink.
First, look at the characteristics of the “old” way of getting a drink:
* People get ice independently.
* People get drinks independently.
* The number of users is only physically limited by the relation of wants to available flavors
* Personal space is the only other limitation and it’s self balanced based on the aggregate needs of the users.
All this equals out to a massively parallel and self balancing transaction. 5 or 6 people can get a soft drink in under a minute.
But now, you’ve replaced this whole setup with a completely serial (linear) path. Every person must individually:
* Get ice
* Decide what they want on the screen (note that the time taken here is a characteristic of a primary feature)
* Select it
* wait for a much slower dispenser to finish.
Some of this will go away as people get more familiar with it. But it doesn’t change that it is now a much longer process where each step must wait on the next, and each user must wait on the next too. I personally observed 8-10 people in line during a busy lunch hour. I waited at least 4 minutes. Not terribly long, but your establishment is not going to make too many friends creating needless waits like that.
How in the world is complicating the high markup world of soft drinks a good idea? Further highlighting the lack of business insight is the Iced Tea factor. If you want ice for your tea, you still have to wait in line with the soft drink people. Tea has absolutely huge margins for a business. Why in the world would you tacitly discourage it?
Failing to understand the multiplying factors in transactions is a very common problem, and we see it in tech all the time:
* Replacing legacy text-based systems with bulky, HTML driven systems.
* going with low cost physical options (such as dot matrix) instead of laser and thermal
* The basic flow of screens and clicks
In my real job, I found that all these little milliseconds were adding up to big time…um…time over a day. In banking and credit union-ing, this means long lines of people waiting to get money. This is not a good thing, particularly when you’re trying to get those people to increase their relationship with your institution. While we will never avoid lines altogether, we made a great deal of progress by switching hardware and systems and eliminating all the small “please waits”.
Early studies in management used techniques such as chronocyclegraphy to assess the efficiency of every little movement by a worker over time. While this is now subtly deemed oppressive and almost inhuman, the concepts still live on in eye tracking and mouse movement analysis. However, I doubt anyone paid even 1 minute of attention to the impact of these Coke machines. “The kids will love ‘em!”
So, in short, it’s just another way people have attached a computer to something and made our lives worse by not using corresponding design technology. Well, unless you think that dis-incentives to gulp about 400 calories of corn syrup are a bad thing. These things could actually save some lives in about 40 years!
So Bin Laden is now cryogenically frozen in Area 51 with Elvis and Bruce Lee. Or, as conspiracy theorist will have us believe, he is dead.
Which led to tons of positive response across the twitterverse, facebookverse, ground zero, 24 hour news channels, and red-blooded wolf shirt wearing Americans everywhere. Some Christians celebrated death. And predictably some Christians starting being critical of other Christians…because hey! look! Other Christians are doing something and I have a Bible!
But if you really look at the situation, it’s much more complex than that. The concepts are more complex. The reactions are more complex. You can’t generalize everything into one big blob and say “this is bad” or “this is good”, much less “this scripture applies”. So here’s a quick breakdown of *some* of the reasons, and what I think about them.
(Note that these are from a Christian perspective, so getting all meta on it by criticizing Christian concepts won’t accomplish anything.)
“Yay! Some Muslim guy is dead!” – Not good. Generally we should never be happy when a lost person is dead.
“Yay! A bad guy is dead!” – That’s ok. When a bad guy is dead that means they won’t be doing bad things anymore.
“Yay! Our enemy is dead!” – Not good. Loving it when crap happens to your enemy is a gang mentality. Christians are supposed to do the opposite for the Bigger Purpose.
“Yay! A bad guy who did some bad things is dead!” – That’s ok. Justice is a Biblical principle. (Yes, mercy is too.)
“Yeehaw! He just busted down the gates o’ Hell!” – Not good. Trivializes hell, which is a pretty damned serious topic.
“Yay! It’s over!” – That’s ok. In some ways this means the 9/11 chapter is over. Until a TSA agent grabs your junk or you get 20 years for buying a counterfeit watch because somehow that’s related to terrorism.
“Waving flags will help terrorism!” – Well, everything helps terrorism. Buying a tank of gas helps terrorism. Not beating our women helps terrorism. Justin Bieber helps terrorism. Not beating Justin Bieber helps terrorism.
“Martin Luther King would said the following…” – 78% of statistics are just made up on the spot. And to quote Thomas Jefferson “you can’t believe everything you read on the internet”. Seriously, I think about 78% of the quotes on the internet are inaccurate. But a web poll could clear that right up.
“USA! USA! USA!” – This is a tricky. In the few minutes it takes you to find scripture regarding nationalism, our failing Democracy will have borrowed several million dollars. Or printed it, depending on which suppressed news report you ignore. It’s hard to decide what we think about the crumbling of our government because all the singers are so good this year.
So in short, we’re all wrong! And you’re all wrong! And we’re all right! And wrong! And when was the last time YOU read Habakkuk hmmm? Because I did. Twice!
I’ve seen statements like this for many days now, after the ‘event’ that is Charlie Sheen has unfolded.
The short answer? Yes, of course. But there is a longer answer, which starts with a “yes, but…” And that is: Yes, but he has physical needs that must be attended to first.
Doctors will say they won’t diagnose a condition without examining him. But the 1000 pound elephant of winning is that he’s experiencing some sort of manic condition. To anyone who’s had the unfortunate experience of dealing with someone in this state, it’s obvious. Eerily obvious.
When this condition becomes serious, the person can’t perceive reality correctly. Their ability to function is impaired sometimes to the point of making life threatening decisions. In this sense, a person in Sheen’s (apparent) condition is in the same situation as someone who is starving or drowning. The immediate need must be met before you can really even begin to talk about spiritual matters.
In fact, while I am a complete believer in the life changing power of Holy Scripture, I would hazard to say that it is probably not advisable to quote it to someone with Adonis blood….even if you manage to get a word in edgewise with someone in such a state. So what to do?
James 2:15 If a brother or sister is poorly clothed and lacking in daily food,16 and one of you says to them, “Go in peace, be warmed and filled,” without giving them the things needed for the body, what good is that?
I’m not saying Sheen isn’t responsible for his actions. There is enough there to know what’s right and wrong. I’m also not saying that God can’t miraculously heal Sheen. But God could easily feed the hungry, shelter the homeless, and take care of every orphan in the world. There’s a bigger picture and a reason people have to be involved.
If we can’t minister to his needs directly, what we should be doing is praying for Charlie Sheen’s healing first, and salvation second. Yes, to my non-Christian friends this sounds nutty to include salvation, and even to my Christian friends it seems a bit hokey to pray for a tabloid celebrity with millions of dollars and (in his words) “the gifts of the universe.” But I’ll tell you why it’s important.
One of the biggest problems with mental illness is the stigma and our collective cluelessness in how to deal with it. When you say “my friend has cancer”, people know what to do. But when it’s mental illness, people are pretty much on their own to draw conclusions. Those conclusions almost never help, and you really just don’t know how damaging and bizarro they can be until you’ve tried to get some assistance in such a situation.
When you see Charlie Sheen, realize this is happening all around us. The stigma keeps it quiet, but the needs are huge.
Imagine it’s not Charlie acting crazy on TV. Imagine it’s your loved one talking about having Tiger Blood or being indestructible. Imagine it’s your mom or dad, child, spouse, or best friend who is completely lost in a distorted world of perception that is slowly destroying any semblance of hope. Don’t abstract this. The “crazy” person is someone you love. Mentally picture yourself in that situation 24/7. You can’t turn off the TV because the TV is your life, and it’s not pundits in pancake talking about the “trainwreck”. Instead, un-televised authorities say there’s nothing they can do, judges yuck it up with the attorneys, doctors go home at 5, and everyone else looks through the window with an opinion.
Meanwhile, a loved one slowly drowns just off shore and takes lives with them. Charlie Sheen is happening right now in our churches and neighborhoods.
Yes, Charlie Sheen needs Jesus. But he needs to be physically rescued first, just as Jesus commanded. There are also millions of healthy people dealing with the fallout every day. And they could use a hand too.
So now I’ve talked a little about the uniqueness of oil, that it’s very portable and it contains a hunka hunka burnin energy. These two factors make it completely unique.
Now let’s talk about how it’s unique from itself, and why oil reserves don’t matter. Not all oil is equal. Some oil is good quality, and some bad. Some oil is easy to get to, and other oil requires extreme effort to get to it. Both of these factors can radically increase the cost of oil.
First, you have to look at production costs.
In the past, oil cost pennies to pull out of the ground at which point you’d sell the place and move to Beverlee. But now the prospect of just using a pipe or squirrel gun to get oil out of the ground is like writing a hit called “that thing you do”. It only happens a long time ago or in movies. There is very little of this oil left. Oil is now drilled in increasingly complex ways. If there is any lesson in the BP oil spill in the Gulf of Mexico, it’s that we’re going to distant extremes both physically and technologically in these efforts. This is very expensive and much much different than our efforts in the last 100 years.
Production costs vary by country. Some places in the middle east are as low as $5 per barrel. Other places can go to $100 or higher, and the cost continues to go higher as wells pass their prime and fields mature and run out of the relatively easy oil.
Second, you have to look at oil quality. Oil sands, tar shales, coal liquids, etc. require huge efforts to convert them for use (plus you have to trash a whole bunch of nature to get some of them). Paradoxically, some techniques require correspondingly huge amounts of natural gas to heat the material before it can be extracted. This creates all sorts of strange cost computations when you figure in the market for natural gas.
When you hear people say that the U.S. has just as much oil as Saudi Arabia, they never bring up the substantial difference in production costs.
So whenever you hear experts talk about huge oil reserves or vast new oil discoveries, your first question should be “How much does it cost to get it?” If it costs 100 bucks just to get the oil, then this will not result in the cheap oil that our entire set of sociopoliticaleconomic systems were built on.
Then there’s the question of production capacity. How quickly can we get the stuff out of the ground, and is it fast enough to satisfy demand?
Imagine the garden hose at your house was the only one in the neighborhood. You have a very large supply, but could you supply enough water for everyone? Depending on the neighborhood…maybe. Now add another house to the list every day. How long before all heck breaks lose? This experiment is exactly what’s happening in the world today with oil.
So in these two questions alone, we see that “drill baby drill” is little more than a political slogan designed to reign in people who really haven’t put much thought into the details. How much does it cost to pump/produce the oil, and how quickly can it be extracted? If you have a large amount of expensive oil that can only be extracted slowly, it doesn’t really matter how much you have.
It’d not just oil. It’s cheap, high-bandwidth oil that we need. And if that’s gone (either nominally or for real) what are we going to do? The answers to these questions become pretty scary when you see not just how dependent we are on oil, but that there really isn’t any other alternative. That’s next.
Get it? Conun…drum? Never mind….
I’ve blogged a bunch about oil in the past. My own personal opinion is somewhere between Road Warrior pessimism and Free-Market optimism. But by now the writing should be on the wall for all of us. We see how the price affects our individual lives and our collective economy, and we see that even when ‘experts’ say all is well, things still seem to be very volatile.
We’ll never be able to predict the future, but we can get a thorough understanding of the problem. As I’ve read/researched, I’ve found that what’s really happening is very, very different than that conventional wisdom on energy we get from American Idol.
So first, let’s take a quick look at what oil is.
From an energy perspective, oil is solar energy from millions of years stored chemically and compressed into a portable form. This energy becomes immediately available to us when we heat our home in a few minutes, or peel out of the mall parking lot.
And that’s the first thing to understand. When we use oil, we are releasing energy in a few seconds that really took years (tens, thousands, millions…) to collect. This is it’s first primary value. Solar power is collecting this energy real time. Wind and hydroelectric are collecting solar power stored mechanically, but fairly recently. When people float ideas for other power sources, there is a built-in disadvantage in this time warp.
The second value is that oil and it’s products are portable (stable and moveable). You can carry a bottle of gasoline around, and unless you are a 14 year old male, really stupid, or both…generally that energy is not going to be released in an uncontrolled manner. Of the other raw collection and storage methods, nothing even comes close to oil. Would you let them store Uranium in your neighborhood at the corner gas station? And have you seen just how huge the batteries in an “electric” car are?
Speaking of ‘lectricity….This is a very important thing to understand about electric things. Electricity is not a source of energy, it’s a way of storing energy from something else. It’s very portable, but it doesn’t inherently have millions of years of energy in it like oil does.
So this is the first thing to grok about oil. It contains huge amounts of energy stored over millions of years. It’s very portable. And lastly, it’s very unique in these two factors. Whether it be politician or PhD, any time you hear someone mention alternative energy those are the first two questions to ask. Where did the energy come from and how much is there compared with oil? How portable is it, and how does that compare with oil?
I have a healthy obsession with data. A key component of my job is preserving it, and I’ve developed an inherent love for it.
This is easy to do because the cost of storage has plummeted. You can get a Terabyte of storage for $60 bucks, which will hold
* a billion pages of text, or over 5 million books, far more than you’ll ever read in a lifetime…more than you could read in 30 lifetimes
* over a half million digital pictures, which would take you 17 work weeks to look at (at 5 seconds a shot)
* a quarter million songs–which you could listen to 8 hours a day for 6 years.
It won’t be long before the music and video stored on the average desktop could last longer than a human lifetime. With this kind of cheap storage to throw around, why would you ever delete anything? There is a constantly expanding store of data…just let it ride. Of course this brings up interesting questions of indexing and search-ability, but who wants to be a billionaire? We’re gazing at the universe here.
From a spiritual perspective, I’ve always found the implications of data to be directly related, particularly in these two verses:
John 1:1 In the beginning the Word already existed. The Word was with God, and the Word was God.
Words are data…in a strange way anything can be seen as data, even if it’s too big to truly comprehend. If we can hold more data than we could ever read or view on our desktop, why do we balk at the presence of things we don’t understand? The presence of every atom in our body is data. Everything we’ve seen or heard is data.
Psalm 121:7 The LORD shall preserve thee from all evil: he shall preserve thy soul.
“Jesus Saves” jokes aside, the idea of Almighty God backing us up to tape and sending us to off-site storage is an oddly comforting (if completely hokey) thought. Data holds our entire sociopolitical structure together. Tyler Durden understood that and one of the scary things about Fight Club was the way such an act would cut to the core of our subconcious value systems. Doesn’t the data that defines us hold the bigger things together as well?
But enough hokey right-braining. Back to hoarding. Ok…we’ll keep right-braining but no more hokeyness.
Even a blurry picture or bad recording to me has value. Even a bad scan of half a photograph has value. Nowhere in the universe will information randomly collide and produce a discolored picture of my son drinking a juice box. I guess maybe on a distant planet somewhere a rock formation may resemble it, but it’s highly unlikely. Even then it cannot be appreciated or preserved.
So even bad bits have value, provided they are ordered in a higher order of recognition. “BECAUSE, man, somewhere in one of these…memories is the evidence!”
The implications of all this have not even begun to be pondered. Our descendants will have access to millions of lifetimes of data. They’ll know us far better than we know our ancestors. Can we really be private when data is permanent? When who we are can’t be obfuscated, won’t we have to redefine “starting over” to something more honest? When a library can be burned down with a power surge, aren’t things actually more fragile than, say animal drawings on a cave wall? What about standards–will they be able to read PDF’s in 100 years?
This is all very heady stuff. I think I need to go delete some coffee.