Alkahest

Okay, commenting on global finance is really not my usual shtick, but I’ve got to agree with Barry Ritholtz that there’s something odd in this NY Times article on China’s role in the U.S. housing bubble.  The article describes Ben Bernanke’s 2005 theory that a savings “glut” is driving up the demand for American to borrow from foreign countries.  The article extends the theory to suggest that the financial mess that we are currently in the middle of was, essentially, caused by the Chinese.

Okay, it is true that as a country, we were essentially borrowing money from overseas in order to buy overseas products.  Essentially, borrowing from the Chinese in order to buy their stuff.  The mechanisms were somewhat complicated, home owners typically were borrowing from their homes.  As home prices rose, due to low rates and bubble psychology, people found that they could refinance their homes or take out home equity lines of credit that could then be used, not for home improvements, but for general lifestyle expenses.  Since median incomes have not risen in a decade, this isn’t too surprising.  (As an aside, I was in a conversation last week with someone who claimed that the whole recession could be over if the news would act as a good propaganda arm and declare that it was.  People would start spending and the economy would get moving.  I pointed out that he was wrong because most of the capital financing the economy was borrowed from homes, etc., and that wages hadn’t increased.  In other words, the consumer has no money to restart the economy.  He had to agree that was true.)

So, I agree that China (and other foreign countries) were necessary to the bubble, but does that mean that their “excess” savings caused it as the article implies?  No, there are more than a handful of things wrong with the article:

1. It takes an uncritical look at the idea there is a savings glut.  I didn’t note any refutations of Bernanke’s thesis.
2. The article’s URL ends in “26addiction.html” and in a single word, it sums up much of the article.  But this is a sad sort of exculpation for the U.S.  Sticking with the same metaphor, it’s arguing that the a drug dealer is responsible for all of the actions of a junkie and the junkie bears no responsibility.
3. Switching from the “addiction” metaphor, it’s bad supply-side theory applied to credit.  Okay, it’s true that lower rates will attract more demand from the pool of potential borrowers.  And I’ll buy that having more creditors will drive down rates.  But that’s not what happened here.  In this case, Greenspan artificially held down lending rates through the Federal Reserve.  In other words, it wasn’t a supply-side rate cut driving up demand, it was an artificial rate cut that drove up demand and the Chinese stepped in to meet that demand.
4. Probably more than anything else, I find the idea that there is a savings “glut” in the rest of the world (particularly China) particularly annoying.  It completely disregards recent history.  Savings imbalance, I’ll believe.  But to suggest that the Chinese are saving too much is completely loony.  At the same time Bernanke was saying that others were saving too much, the U.S. savings rate fell to 0%.  If there’s an imbalance, it’s more likely that the U.S. was to blame for increasing its borrowing.
5. Finally, there are all sorts of little oddities in the facts and nuance of the article.  For example, there’s a general feel of “red-baiting” to the article. Or that the article notes that the Chinese now hold $2 trillion in U.S. debt, out of the, what, $11 trillion in debt we’re in now?

I do agree with the article that it would be good if China stopped pegging their currency to the dollar.  But I’m not certain how much it would help the problem being discussed here.  It might make us less likely to borrow from the Chinese, but at the same time, I don’t think it would have decreased overall U.S. borrowing.

I wonder if the N&O would print this?

Dear Editors,

I have read with some alarm your recent stories describing a dramatic change to our way of life.  Specifically, I refer to those stories of our poor benighted multi-millionaires and billionaires who are having to downgrade their lifestyle in response to the crash of the financial markets and the banking industry.

As we all know, what has made America great over the past 30 years is the increasing increasing income inequality whereby those at the top of the income ladder make an ever increasing amount of money while the median income has stagnated.  Without these top income earners, all motivation and striving goes out of our populous; leaving us a nation of whiners.  And yet, every day, we hear stories of high powered financiers, who had been making millions each year, now contemplating the need to sell that third vacation home in order to make ends meet.

While I salute the republican administration’s efforts to save the wealth of the top 1/10th of a percent through the preservation of the salaries, benefits and bonuses of financial executives while beggaring retired auto workers, I believe that this effort has not been bold enough and that the situation calls for direct action.

Toward this end, I propose that the country establish a registry of multi-millionaires and billionaires in need.  Those making less than $100,000 a year should then be encouraged (by force if need be!) to contribute 10% of their gross earning to support these beleaguered souls who are the backbone of our economy.  This Adopt-a-Billionaire program would have the effect of immediately raising the standard of living for these poor souls, while reducing the incomes of more than 80% of Americans; thus ensuring that the salary inequities which have made this country great will remain in place for the benefit of the next generation.

Respectfully,

…

I’m not certain if I’ve joked about it here or not, but recently I’ve taken to commenting that if academic politics are so petty because the stakes are so small, then what does that say about non-profit politics.  The implication is that non-profit politics are even more petty because the stakes are even smaller.  Well, after a rough couple of weeks with the non-profit I work with, I can confirm that the politics are definitely petty, I’m just no longer certain that the stakes are small.  In one sense, sure - the budget for the non-profit I work with is smaller than any other budget I’ve dealt with in a work situation.  But at the same time, the politics most often affects people’s livelihoods.  It’s one thing to have a layoff due to lack of funds.  It’s another thing for poor management and personal vendettas leading to a firing.

The moral of the story is this: never get involved in a land war in Asia the board of directors for a non-profit.  It’ll steal all of your time, consume all of your money and break your heart in the end.

This is neat.  Typealyzer claims to examine a blog (or presumably any webpage) in order to identify the Myers-Briggs type of the author.  It correctly identifies me as an INTP, but doesn’t seem to get etselec.

Dear Amazon.com:

After buying the collected works of Robert Johnson, blues guitarist from the 1930s, the man who was reputed to have sold his soul to the devil to become the greatest blues guitarist ever, I really don’t think I want albums by Robert Johnson the 70s power pop musician.  I know they have the same name, but trust me, they aren’t the same person.  Please update your database accordingly.

kthxbai

Some recent (somewhat) technical notes:

• A while back, I swapped the dead harddrive from my ipod with a compact flash card.  Unfortunately, at the time, the biggest (affordable) compact flash was 16 GB, so I lost about half the capacity from my ipod.  Not a huge problem, but it became more of one as I added more music.  Yesterday, a shiny new 32 GB compact flash arrived and now I’m back to the nominal amount of space on my ipod, except that it’s all solid state and cool.  From the technical standpoint, this was something of a PITA, since I didn’t have a windows or mac machine around to reinstall the firmware.  My ultimate solution:  1) back up /dev/sdb (boot record and partition table) and /dev/sdb1 (firmware) from the ipod using dd; 2) put the CF in my laptop and format it (a camera would work just as well), this just normalizes the card; 3) put the CF in the ipod (or in the laptop); 4) write the patition table using dd; 5) edit the partition table using fdisk, set the size of sdb2 to be 32 rather than 16 GB; 6) write out the firmware to sdb1; 7) format sdb2 using mkfs.vfat.  Voila - a 32 GB ipod CF
• If you haven’t seen it already, check out projecteuler.net.  They’ve got a bunch of mathematically oriented programming problems online of varying difficulty.  Good solutions should all run in 1 minute or less and generally take 100 lines of code or so.  It’s a good way to get familiar with a new programming language and to exercise your brain.  So far, I’ve done the first 70 or so problems - they don’t take too long, maybe a half hour each on average.
• Finally, I got the clutch in my car replaced yesterday.  The mechanic said that it was in pretty bad shape and that the (plastic?) bearing the clutch uses had worn completely away.  This probably explains why I’ve had no acceleration for the past year (or more?).  I had forgotten what it was like to drive a decent car

Two weeks ago as Obama won a resounding victory both in the country as a whole and even more decisively in California, Californians also passed Proposition 8.  Prop 8 was an amendment to the California constitution that defined marriage as an institution between one man and one woman.  With the passage of Prop 8, 18,000 couples had their legal marriages dissolved.

Supporters of Proposition 8 claim that the act was necessary to help defend the traditional institution of marriage.  Specifically, they looked to the Bible and its condemnation of homosexuality.  They claimed that recognizing homosexual marriage undermined the biblical concept of marriage.

Now, I’ve read a good chunk of the Bible over the years, and I’m pretty certain that what’s represented therein is not really what Prop 8 supporters had in mind.  Unless of course, they want to see the reinstatement of polygamy, at least for those that can afford it (hey, I could support two wives and it is traditional!), after all, Solomon had 700 wives and another 300 concubines.  As a side note, I can just imagine how that conversation would go with K:  honey, I think we can afford a concubine - how about it?  <smack>

So if Prop 8 doesn’t really do anything to promote the Biblical understanding of marriage, what about protecting heterosexual marriages?  I can’t speak for everyone, but I’ve been married for over fifteen years now and I can’t see any way that the possibility of gay people, some of them friends, most of them that I’ve never met could possibly threaten my marriage.  I can’t even see how the possibility of gay marriage could threaten potential marriages (i.e., the institution of marriage).  What, Bristol Palin was going to get married to her baby’s father, but now because gay couples in Connecticut can get married, she won’t?

Marriage in the U.S. is essentially a legal contract between two consenting people.  That contract can optionally be sanctified (made holy) when blessed in a religious ceremony.  But the religious ceremony itself is truely optional.  It doesn’t matter which religion has sanctified your marriage, you can opt not to have it sanctified at all by having the contract witnessed and signed by a justice of the peace.  In our case, K and I were married by my grandfather, a (Lutheran?) minister, in a non-denominational church.  The wedding ceremony itself can be important in that it publicly recognizes the marriage and encourages the observers to assist the newlyweds as they start their lives together.  That community support can be important when trying to adjust to married life.

Again, none of this is threatened by gay marriage.  If anything, the institution of marriage is stronger for being more inclusive.

But here’s the thing.  We did just witness one new threat to the institution of marriage - Proposition 8 itself.  To my knowledge, this is the first time that marriages recognized by a state have been annulled by the state [1].  18,000 couples had legal marriage contracts, signed and recognized by the state of California.  Those 18,000 couples have now been unmarried. This establishes a precedent that should worry anyone who is married.

Imagine that we took the Bible’s admonishments about divorce or adultery seriously.  The Bible traditionally doesn’t recognize divorce (which leads to the Catholic church’s crazy annulment system) and calls for the stoning of adulterers.  What if those traditional concepts became enshrined in law or the California constitution?  Malachi 2:16 - “I hate divorce, says the Lord God of Israel.”  Matthew 19:6, “So they are no longer two, but one. Therefore what God has joined together, let man not separate.”

Under the marriage threatening precedent of Prop 8, it would be entirely reasonable to further defend marriage by excluding anyone who had previously been divorced from remarrying.  Moreover, we could go further and say that marriage is between one man and one woman, neither of whom has been previously married.  All of the sudden, several million marriages could be dissolved.

I suspect that such an amendment/law is unlikely, after all, there is a bigger constituency of divorced people than gay people.  But on the merits, a no-divorcee amendment isn’t any crazier than Prop 8 and should serve as a reminder for why religious views of marriage should not impinge upon the legal contract that is a marriage.

……………………………………….

[1] The closest comparison I can come to would be the anti-polygamy laws aimed at the Mormon Church in the 19th century, but even there, I don’t think that the original polygamous marriages had been recognized by the states before the laws’ passage explicitly stated that they wouldn’t be recognized.  The comparison is also ironic in that it was the Mormon church that largely bankrolled the Yes on Prop 8 movement.

I started taking photography more seriously about ten years ago.  I put down my cheap point and shoot film camera and bought an SLR body, a few lenses and some slide film.  The great thing about shooting film (slide or print) is that you aren’t constrained by the quality of your camera.  My first SLR was a used Olympus OM-1n, circa  1975.  The OM-1n was fully manual - no auto-focus, no auto-exposure.  If you didn’t want to use the exposure meter then you didn’t even need a battery.  It was a beautiful piece of equipment, but it was also about as basic as you could get outside of a pinhole camera.  It was a dark box that held and advanced film with a mount to hold a lens open for a set period of time.  That’s it.

At the time I bought the camera, the basic advice was to buy a camera body with the minimum features that you needed and use the savings to buy better lenses.  It was the glass in front of the camera and the type of film in it that had the greatest affect on picture quality.  Two photographers using the same lens, one having a fully manual and one having a fully automated camera could each take similar quality images.  That’s not to say that auto-exposure doesn’t make it easier to get the right aperture settings or that auto-focus isn’t useful when your subject is moving.  Both of those things are true.  But at the end of the day, they just improved the odds of getting a good shot.  Your only real constraints were glass and film.

These days, I’m using a Nikon D80 digital camera body.  It’s also nice.  Definitely a lot more electronics - auto focus, auto exposure, various program modes etc.  You can still set it in a manual meter mode, but it’ll never be a manual camera.  If you take out the batteries, it’s just an inert hunk of silicon and rubber.

I was reminded of all of this when talking to Hunter a few days ago.  He’s interested in getting a new camera body.  I almost choked when I saw how much the body alone costs.  My first thought was the old advice I heard when I bought my first SLR: buy a cheap body and good glass, your photography will be better for it.  Then I realized that’s no longer always true.

One of the things that digital cameras have done is to turn the camera body into the equivalent of the camera body and the film.  It is as if I had bought my Olympus OM-1n and had to always use Fuji Provia 400.  Wait - what if I want a better film, say Velvia 50?  Too bad - you should buy a better camera.  Well, digital cameras are just like that.  Different camera bodies have different sensors of varying quality.  It’s not just a matter of megapixels, but also ISO equivalents and noise reduction.  We’ve just entered a world where the quality of your pictures is constrained by both the lenses you have and the camera body you own.  What’s worse is that the camera body itself will become obsolete.  Unlike my OM-1n, there will never be a market for 25 year old camera bodies.  Lenses, yes.  Camera bodies, no.

This isn’t all terrible I suppose.  The commoditization of the camera body is making better photographic equipment more affordable.  Right now, affordable digital camera gear can produce better pictures than can be had on print film.  High end cameras are better than slide film and in a few years, affordable cameras will also be better than slide film.  I just find it a shame that digital photography has locked us into a world where the amount of money you have will determine the quality of your pictures.

Over the past few months, I’ve been thinking about getting a new guitar.  I’ve been heading up to High Strung in Durham and have played with maybe a dozen different models, but the one I kept coming back to was a Blueridge BR-243.  It’s got a beautiful sound and it’s very comfortable for me to play.  The body size is “000″ as opposed to the more common dreadnought size (like my first guitar) which means it’s easier to get my arms around and the shorter neck makes it easier to reach all of the chords.

Well, I’ve got a birthday coming up and Christmas is around the corner, so last Friday I went ahead and bought the BR-243 as a combo present.  Unfortunately, High Strung didn’t have the case which fits the guitar in stock, so they gave me a loaner while mine is being ordered.  I believe the case fits a dreadnought sized guitar, so that might give you some sense of the size.  I should also post a picture of my old guitar with the new one.

Anyway, I’ve been playing with the guitar for a few days now and I love it even more now than I did in the store.  I also finally went online to see what other people thought (I didn’t want to overly influence myself ) and it got great reviews, particularly for the quality at its price point.  At this point, I think the only problem is that I’m not much in the mood to work - I would rather go home and practice the guitar

Still not official from the Election Board, but the AP has canvased all of the counties and found that there aren’t enough provisional ballots for McCain to overcome Obama’s 13000+ vote lead.

Amazing