State of the Nation

Merry Christmas everyone.

As we approach a new year, I thought it might be worthwhile to post some thoughts that have been churning around in my head regarding the state of our nation. I'm afraid this post is going to pose a number of questions and not a lot of answers. But nonetheless I wanted to at least put these thoughts out here to see what others think.

I've been thinking of this post for a while, but was prompted to actually do it today after listening to the NY Times Front Page podcast, and hearing that "retail spending rose 5.5 percent in the 50 days before Christmas." This seemed to fit with what I saw in the past couple months - malls and retail outlets were packed with shoppers. But the story doesn't add up to me. Isn't the unemployment rate still almost 10 percent? How is it that people can afford to spend as much as they did in the same period of 2005?

The Times article quotes Craig R. Johnson, president of the consulting firm Customer Growth Partners saying "In the face of 10 percent unemployment and persistent housing woes, the American consumer has single-handedly picked himself off the mat, brushed his troubles off and strapped the U.S. economy on his back." Let's see, unemployment still high, housing prices still low... maybe if we spend more that will fix it? The economy is slow, let's extend a lot of credit to people who don't really understand (or don't want to understand) the risk of credit card debt? It worked in 2005, maybe it will work again? Am I the only one who finds it strange that this man is applauding the American Consumer for what I can only see as the same pattern of reckless lifestyle that helped get us into this mess?

So that got me to wondering exactly how much money Americans are saving. A couple months ago I listened to the episode "Is America Ready for a 'No-Lose Lottery'?" on Freakonomics Radio. The episode presents an idea worthy of its own discussion - can a lottery be used to encourage people to save? But the story used to setup the episode was what stuck with me. In a survey last year, 2100 Americans were asked if they could come up with $2,000 cash in thirty days. 46% of Americans said they could not. The survey consisted of people from all income brackets, and the result I found most alarming was that of people making between $100,000 and $150,000 a year, 25% responded that they could not come up with $2,000 in thirty days. Now, the sample size is a bit small. So I won't dwell on this too long. But still.

OK, so back to how much Americans are saving. According to the Bureau of Economic Analysts, as of November 2010, Americans are saving about 5.3% of their disposable income. If you look back through the years in that link, you'll see that this is about as good as it has been for the past decade, about the same as the 90's, worse than the 80's, much worse than the 70's and worse than the 60's.
So Americans are saving a smaller portion of their disposable income than they saved in the past.

Is that a bad thing? Taken at face value, one would say yes. But there are other factors to consider. Perhaps Americans don't need to save as much because they're getting more for their dollar. Compared to the rise in inflation, healthcare and education costs are increasing much more rapidly. So, I'd say no, we're not getting more for our money, and yes, the decrease in percentage of disposable income saved is a bad thing.

Why is it such a bad thing? Because all Ponzi schemes eventually collapse. Social Security will, too, and probably before the readers of this blog retire. (OK, there is a lot of debate over when/if Social Security will dry up, but I'll contend that if your retirement plans depend upon collecting Social Security checks, that is a risky plan at best). We all know the story. The magical age at which one qualifies for Social Security is not rising fast enough to keep up with the rising cost of living and average life span. But here's something you may not have known that is pretty frightening: The money that funds Social Security is not sitting in a trust somewhere, safely invested and earning modest interest. The money in the fund is invested in government treasuries. In other words, the the money in the Social Security trust fund has been lent to the government. No kidding. And the kicker? The debt the government owes to the Social Security trust fund is NOT counted in the national deficit. So tack on another $2.4 trillion to the current national deficit. Check out the episode "In Search Of The Social Security Trust Funds" from the excellent Planet Money podcast series on NPR for more info.

All this leads me back to my original complaint: Americans are spending the money they should be saving. If you agree that this is a problem, how is that fixed? Previously in this post I linked to an article co-authored by Peter Tufano, who was also partly responsible for the "$2,000 in 30 days" survey. Tufano suggests that perhaps people should be educated about compound interest and credit card debt, rather than educated about retirement savings. Seems like a good idea to me. I'm all for education on both topics. There is also the option of legislation to "protect consumers against predatory lenders". My knee-jerk reaction is usually to not involve the government and/or that people should be wary enough to know what they're getting into, but I think I'm in favor of this idea, too.

So what say all of you? Do you agree/disagree with what I've said? Like to argue points or add more? Have ideas for a fix or just need to vent a little like I did? I am eager to hear thoughts on this.

Happy New Year.

Hack and Sack

You may have heard recently that a computer worm infiltrated and seriously debilitated two Iranian nuclear facilities. I'll admit that when I first heard about this, my reaction was one of awe. The more details that come out, though, the more it becomes clear (yet again) that the real battlefields are in a virtual world; that the largest military in the world can't necessarily keep a nation from being brought to its knees.

When word first spread of the worm, the popular belief was that the creators of the worm - the "Stuxnet worm" - were those most likely to be harmed by the production of those facilities, the Israelis.  This theory was based on a word found in the worm ("Myrtus"), which may have been an intentional reference to a biblical figure who saved Israelis from the Persians. Couple this with the wide smiles sported by Israeli officials when asked about Stuxnet, and the theory didn't seem that wild. "Oh, those Jews and Persians. They'll never get along, will they?"

I actually had my own conspiracy theory. It wasn't the Israelis. It was the U.S., or the Chinese, or the Russians, and they were merely practicing on the Iranians for a bigger target.

As the worm has been studied, some new information has emerged. Check out this FoxNews article for the details (if you read one linked article in this post, read that one). I don't know about you, but that article blew me away. (By the way, yet another blow to Microsoft's security credibility. And was anyone else surprised to see a nation using Windows as the OS to control their nuclear facility?).


Now, as coordinated and precise as the attack was, I suppose it actually shouldn't be that surprising. I think it's generally understood that governments, militaries and even large corporations have divisions whose sole purpose is to poke holes in the defense of their opposition and infiltrate or destroy. Wikileaks recently let it out that it was the Chinese government that hacked Google in early 2009. There are reports of China and Russia hacking into U.S. electrical grids. Heck, in 2002 the U.S. tried to sell the Chinese a bug-ridden plane for the Chinese President. We even have our own cyber-intelligence division here at TLATL, but it mostly consists of Coovo calling up the authors of our rival blog The Lou and The Loop and pretending to be their mom and asking if they remember her maiden name because she forgot it again.

If our governments and national infrastructure aren't safe, neither are the big banks. So my question to everyone is, how scared should we be? Is it pointless to be paranoid about things out of our control, or are there any, even small, steps we can take to protect ourselves? Friend of TLATL Joel once wrote to me "Paranoia will destroy ya." True, but stories like these still make me feel a little helpless.

Hope that cheered everyone up! And if you get any calls from your mom asking for her maiden name, just tell her it's "passw0rd".

Tea Time?

How about these Brits? I can't pretend to have deep knowledge about the UK budget or politics, but I find it refreshing to see a nation tightening their belts for the good of future generations. Across the Channel, though, more than a million people went on strike in protest of Sarkozy's bid to raise retirement age from 60 to 62.

What do you all make of this? We face the same problems here, but do we have the nerve to tackle them? If nothing else, it will be interesting to see how the UK handles its spending cuts in the next 5 years.

Making Your Own Fun

.....And We're Back!

Google just came out with Google Instant, and it's awesome. I use Google multiple times a day. If Google Instant saves you 2-5 seconds for each search, it probably saves me 30-60 seconds a day. Which is.... not a lot. But I can't help it - there is something so satisfying about seeing the results for your search appear before you even finish typing in your search criteria.

Another search engine feature that has been out for quite some time but also brings me happiness is type-ahead search.

How do you enter search criteria? Do you enter keywords, or just ask a question? For years, I was a keyword searcher. If I wanted info on a topic, I used 2-3 related words in my search. Seeing suggested results in type-ahead search showed me that a lot of people just type their questions into the search box.

For some cheap amusement, type the beginning of a question into Google to see what the most popular endings are to that question. Try "why is my" or "what would happen if" or "how many times can a". Or just start with "why" or "how". Keep adding words and see where it goes.

And just to be fair... I'm pretty sure the George Bush search results are part of some incredibly stupid fight between his detractors and supporters. I recall hearing something about how some group of people were trying to game search results so that if you typed George Bush into a search engine, the first type-ahead response would be "an idiot". His supporters must have come to his cyber-aid and tried to game the system the other way.

Gaming search results for George Bush
Gaming search results for George Bush is funny
Gaming search results for George Bush is a sign you should get a job

I promise to try to be better about posting, if you promise to try to be better about listening.

Hasta pronto,
el rollo

News Nits

"All the news that's fit to reprint."

Have you missed us? News Nits has missed you, Dear Reader. What a world we live in, where datetimestamps string together and turn blips into blurbs into twitters into conversations and a month goes by. Going through a month without News Nits is like going through the winter without corn. We apologize, professionally and amateurly, since we don't get paid but we wish we did.

Enough. So many nits to cover. Can you believe this? Ford the auto company is introducing its first Electronic Vehicle to the U.S. (I... like...) Big but, it's not a cute little hybrid like many of the foreign companies have tried to introduce, it's a delivery vehicle. Huh? You mean Ford is trying to do something more than put iPod connections in their vehicles and hire Mike Rowe? Dare I say it? Is Ford leading the way in auto innovation? Well maybe not yet, as it seems Hybrid vehicles are still a luxury item for people who can afford to be cool Green.

Prepare to be totally freaked out, or should I say geeked out. DARPA (the Pentagon's Educational Grant-funding wing) has announced it is partnering with Ridge Global to map the "underground". This includes like sewers and stuff where creepy crawly terrorists like to hide. Next, they plan to map the scowls of Donald Rumsfeld. (We're not the only media still living in the Bush era.)

Anyone else sick of Twitter? How weird is it to constantly talk about yourself? But if it's the only way you can actually find your friends, here's a neat little meta-program that combines all your so-called friends onto one site. It actually could be sort of useful in a situation like SXSW.

Have you been paying attention to how bad our economy is and how great China is doing? Yeah, they own virtually all our debt, which means our citizens' hard work over the next 30 years will be making the government of China rich. Who's your daddy now? I've got nothing against the people of China, I just don't want to work for them. Especially if they still use sticky rice to hold their buildings together. And if you've voted for Gore, Bush, McCain or Obama, then you have supported the policies that have gotten us here. Stinks, don't it? Before you get scared off of some foreign trade policy that might help our country, don't run from "protectionism" as a possible alternative to "free trade" or "offshoring" or "globalism." (This is just awesome.)

Apple, an American company, has been getting some complaints about the reception on the iPhone 4. In fact, Apple seems to make lots of slightly unusual design decisions. That, however, has not seemed to affect sales in a negative fashion. Nor has it stopped them from partnering with mega-companies in fairly cool ways.

Here's some cool stuff on the oldest trees on the planet. Also, since universities became all about big business, you may now take classes on UFO studies. Philadelphia remains the class of the U.S. in fans, and it's not just football or basketball anymore.

President Obama, Friend of the People, softened his stance on off-shore drilling just months before the BP Gulf oil disaster and a couple years after his no-nonsense opposition to it during his 2008 acting role as candidate. He has also decided to take a page from the Bush-Rumsfeld era and is reviving our "nuclear" missile program in ways that made Bush look dumb. Yes We Can! And while many people across our land realize it might only make sense to enter into a voluntary foreclosure by simply halting payment on their mortgages, data is coming back suggesting that the government's intrusion into the real estate market has not only not worked but has slowed down recovery by filling the streets with economic uncertainty. Steve Wynn agrees:



Back to the streets, it is now illegal in three states to record cops doing their jobs. How many old science fiction movies does this validate? Speaking of science fiction, Lou Reed played an entire concert arranged for dogs. What is New Jersey growing in their gardens? Twinkies? If you're looking to attract a new alternative to America's Soccer Moms, it appears that Cougars can't get enough of Calvin Klein's Obsession for Men.

Verizon is claiming they just pushed 1 Gbps through two PCs on their network as well as 10 Gbps through their heavily vested FIOS optics system. Rumors are that Apple will open their iPhone this coming January to other networks. Prepare to be rocked. A bunch of kids discovered a new cave on the surface of Mars. You think your commute is tough?

As the economy continues to cough up blood, the Republicans picked an unusual time to prove their deep philosophical points about welfare and debt. They, however, continue to be effective at pointing out how stupid they are, economically and politically. Around the world, Google struggles with operations in China as China now leapfrogs the U.S. not just as a polluter but as a consumer of energy. Keep your eyes out for headlines regarding cyber terrorism. The Axis of Evil could become a long list soon.

And finally, if you feel like you'd want to help out the editors of The Loop and The Lou but find raw cash tacky, consider a gift that keeps on giving. We broke the story on the problems of running in fancy running shoes, so we'd like to at least get some credit for our media savy once in awhile.

Happy Trails, dear Readers.

Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom. -- Alex de Tocqueville

[Editor's addition: This is the link mentioned in the comments.]

The Big Short

I recently finished Michael Lewis' "The Big Short" and wanted to pass on the recommendation to you all. Probably the best book I've read in the last 2-3 years.

I know many a reader of this blog has read Lewis' "Moneyball", or perhaps his book "The Blind Side" on which the movie was based. One of Lewis' greatest talents is his ability to break down complicated subjects into simple, compelling stories. You didn't have to be a baseball geek to understand "Moneyball", a mortgage-bond expert to enjoy "Liar's Poker", or a Sandra Bullock fan to love "The Blind Side" (I actually haven't read/seen the last one, but have only heard good things).

The Big Short covers not only how and why the sub-prime mortgage market tanked (and took everthing else down with it), but how three separate, small-time investment shops saw it coming, and bet BIG against it. This is about as close as any book about the sub-prime mortgage market can be to being a page-turner. The further I got into it, the harder I found to put it down.

It's an entertaining read, requires little prerequisite expertise of Wall Street and bond markets, and on top of all that, it's pretty educational.

Has anyone else read this book, or have another book they want to recommend?

"DISCRIMINATION"

Discrimination is a word that has taken on a super-charged meaning. At some point in time, it used to indicate a certain sort of sophistication: She has a discriminating taste in music, it's too bad about her taste in men.

Now, it almost always has racial or oppressive connotations, and it carries the same sort of guilty charge that "rape" does.

The good news is that at least in the United States, we still have the free speech to talk about these things. Not every Western nation does. Germany for years outlawed any debate or vocal skepticism over specific claims against the Holocaust. Canada outlaws "hate" speech, where you can't even say anything that might be contrued as hateful -- it's a crime, even if there's no action associated with it. By contrast in America, the KKK can optain a permit to hold a rally and as long as it is peaceful and doesn't incite violence, it will unfold and happen unhindered. I don't mean to single out a white supremecist group, there are plenty of minority-based hate-filled groups too, who all may say whatever they want.

Here is a different example of discrimination. Apple has a policy of not selling iPads to customers with cash. Their purpose is to monitor how many each person buys (via credit card) so that the units can't be smuggled to Europe before their release date there. This story might bother some people to never buy Apple again. Or it might have been staged. Or it might just be too bad. That's up to you to figure out for yourself.

But in a nation dominated by a technically free but mostly homogenous mainstream media and academic institutions, complexity and debate over racial issues is not effectively tolerated, even if they involve other issues as well. Here is an example of a video debate between Rand Paul -- the recent GOP primary winner in KY -- and Rachel Maddow. It's an interesting clip. I had written off Rachel Maddow long ago as a female version of Keith Oberman, but she at least showed some restraint here as she continually bumped her head against the limits of her narrow understanding of what was being talked about. She is definitely going above and beyond what most talk show hosts are capable of, but she finally just ends by shaking her head in disappointment that someone else could possibly allow for a different view or a different solution to an agreed upon problem.



So what do you think? Is Rand Paul a racist because he doesn't exactly support the federal government dictating the terms of business for private companies, even if that discrimination is on racist terms? How would Ms. Maddow vote on a bill (not to mention a 45 year old law that is not really up for debate) that she agreed with 90% but disagreed with 10%?