The Finite World

 Reading Tim Duy’s article on the weakness of the U.S. labor market, (via Yglesias) I came across this quote: “Moreover, productivity growth is supposed to yield improved economic outcomes via higher real wages...Apparently, only during that brief, shining moment of generational technological change did the productivity story work as we believe it should, at least since the early 1980's.“

I'm listening to this NPR radioshow on payday lenders, and its a really alien business.  I'm naturally wary of credit, though I'm slowly learning to see how to use it efficiently instead of having a knee-jerk reflex against them.  Credit cards, car loans, and mortgages, are some of the most common types of credit.  Interest rates for these range from about 4% or 5% to close to 30%.  Until now, however, I didn't really understand how payday lenders work.  I highly recommend listening to this special. 

One of the things I learned is that some payday lenders charge over a 500% annual interest rate on their loans.  Though the loans are usually small (up to $500), that is an incredible rate of interest.  Of course, while the loan agencies put this rate in their paperwork, the headling number is something like "$1.50 per day for every $100 we loan you."  It doesn't sound like much if you don't do the math or read further down.  And the NPR hosts do a good job showing that there are situations where loans like this are perfectly rational.  But they also profiled a guy who just pays the interest on his $500 balance every month and never pays back the principle. 

This makes me think that a micro-loan and money education non-profit might be able to do a lot.  However, I'm not sure how it would screen potential clients.  The man who always just paid the interest mentioned above, apparently had a gambling habit. 

As reported by the BBC.  I can put up with a lot of going back on campaign promises and and compromise, but this is where I draw the line.  I hope its not true, but fear it is. 

This thread on race and intelligence over at The Daily Dish touched a nerve with me.  The gist of it is that a law student at Harvard sent an e-mail to some friends (which has since gotten out and caused a rucus) that argued, "I absolutely do not rule out the possibility that African Americans are, on average, genetically predisposed to be less intelligent...The fact is, some things are genetic. African Americans tend to have darker skin. Irish people are more likely to have red hair....This suggests to me that some part of intelligence is genetic, just like identical twins raised apart tend to have very similar IQs..." 

Maybe top law schools should try and accept people with slightly lower LSAT scores and a bit more sense. 

One one level, this argument is logically sound, if you accept that notions such as intelligence and the state of being African American are static and measurable.  Of course, they are not.  Even if you equate IQ and intelligence, IQ is very much related to socio-economic conditions, not just genetics (and even in twins, is not necessarily the same).  And what about being African American?  Many African Americans can trace their family trees back to Europe, Asia, and other regions as well as sub-Saharan Africa. 

The problem is that any sort of controled experiment or survey that would attempt to measure intelligence would be prone to defining its subjects based on stereotypes and pre-conceived categories that have their roots in racism, imperialism, etc.

Since this has absolutely nothing to do with the topic of this blog, consider it a public service announcement.  A little back-story:

When I was young (3rd-8th grade), one of my primary interests was military history - primarily the American Civil War and World War 2.  So on one hand, I knew quite a bit about these events.  On the other, I knew very little about them (especially the Civil War), because it turns out that military history is, for the most part, bad history.  Why this is true, I'm not sure, but that's a story for another day.

Then, sometime in high school, I was introduced to the idea that slavery was not the cause of the Civil War.  The basic logic of this argument is that the war was fought to preserve the Union, not free the slaves.  If it had been about slavery, why did it take Linclon till 1863 to free the slaves, and even then only those owned by secessionists?  The war was about states rights, it was about preserving the union, etc. 

I basically accepted this logic, and didn't think on it much more (by then, my interests had moved away from the Civil War).  Until about 4 months ago, when I watched Ken Burn's documentary on the war.  It's not the most complicated or nuanced work, but it did drive home for me why the war was, without question, a war over the question of slavery. 

Like in any huge historical event, things were complicated.  But in almost every case - states rights, politics, economics - the whole war was linked to the question of slavery. 

In order to create my new webpage, The Best Place to Invest, I found the water and sewage rates for more than 100 cities in the United States, probably representing somewhere between 1/3 and 1/2 of the country's population.  I know that water rates aren't something that keep most people up at night, but I find it quite fascinating how much they vary across the country.  Here are some observations:

1)  Houston wins the award for the most nonsensical, idiosyncratic water billing system in the country.  You pay about $3.50 for the first thousand gallons of water, $4.75 for the second thousand, $0 for the thousand gallons after that, then nearly $8.00 for the subsequent thousand dollars.  Crazy with a capital C. 

It's not done by any means, but I'd still appreciate your feedback none the less.  Send it to my Gmail Account - ssn139@gmail.com

1/29/2010 - I have a new super-secret project that's been taking up all of my free time as of late.  It is thematically related to The Finite World, but has a radically different approach. 

For now, I'll just say this - it combines two of my favorite topics on this blog: resource management and money. 

I'll post more soon, and hopefully a real article after that.

(1/03/2010) - Though its so pervasive in our lives, I find that the nature/essense of money is tremendously hard to pin down.  On a physical level it is fairly useless – paper, cheap metal, or more often than not, electronic signals and magnetized ferromagnetic material.  You can’t eat, wear, or sleep in money (note to literalists – you know what I mean).  Yet in the experience of much/most of the world’s population, it provides you all these things and possibly much more.

On a very basic level, we can think of money’s value as a symbol for goods and services it can purchase.  For example, lets say I received this twenty dollars for mowing my neighbor’s lawn.  My neighbor works for Google, and received the money to pay me by working approximately 30 minutes developing web applications.  I can trade my twenty dollars for some apples, milk, a chocolate bar, and a movie ticket.  Each of these products was produced and brought to me by the work of hundreds, if not thousands of people. 

In our everyday experience, money is interchangeable for goods and services.  But at the same time, money is not equivalent to goods and services.  For example, the six dollars in my pocket is not a rain check for 2 gallons of milk or a used shirt.  If a plague kills half of the country’s dairy cows and the price of milk spikes to $10 a gallon, I’ll be out of luck.  Prices change for a huge number of reasons.  And there are hundreds of ways to acquire money.  For many Americans, money is acquired in exchange for paid work.  But there are other ways to acquire money – investing, bank interest, relatives, robbery, etc. 

(12/27/2009) - A few months ago I wrote that, "The thing that I think makes me a liberal is that my position is almost always opposed to the entrenched interests that are trying to leverage their power to maintain their dominance."  I think the "almost always" might have been an overstatement, but the sentiment remains accurate. 

Then a few days ago, I had another thought that I think makes my point clearer - it's easier to define my liberalism in the negative - what are the reasons I'm not a conservative?  When I say "conservative," I don't mean in the sense that the modern Republican Party is considered "conservative."  This is more of a branding thing.  In many ways, they are not.  For me, conservative political ideology is based on the idea that the way things have been done in the past is the correct way to do them. 

So instead of just taking positions against entrenched interests, my liberalism is based on the idea that I think we can always be working on changing things and improving them, and the argument that "we've done things for a hundred years and things have worked out fine" is not persuasive.