Category — Miscellenaous

Anyone who knows me will also know that I love the Economist and listen to its Audio Edition on my way to work every week as my general news overview. The beginning of its special report on the economic downtown a few weeks ago is a perfect example of its combination of high (though not always perfect) quality reporting and biting wit:

Five years ago Michael Silverstein and Neil Fiske wrote a book, “Trading Up: The New American Luxury”. They argued that Americans, even those of modest means, were abandoning merely adequate products for luxurious ones. Jake the construction worker, for example, splurged $3,000 on Callaway golf clubs, though he could have bought a set nearly as good for a third as much. (“They make me feel rich,” he said.) A shipping clerk on $25,000 a year bought silk pyjamas from Victoria’s Secret. A couple making $125,000 ordered a $4,000 brand-name cooking range, even though their kitchen came with a free generic one.

If you read the book backwards, it describes what is going on today.

- Trading down: From decadence to discounts, The Economist, May 30th, 2009

This is completely unrelated to Entrepreneurship or Economic Development but it is related to incredibly cool products, though definitely in the very very early adoption stage (product/market fit?!?). I’ve been missing the ocean (having spent a lot of my childhood on an island) and been going swimming every evening (no matter how cold) but this little gadget just transforms what swimming means:

Useful? I’m not sure, but it’s definitely amazing (thanks to Mike Krieger for finding it). By the way, did you notice the little icons beneath the photo? The photo above is an Apture Super Embed and you can learn more about the Lunocet Monofin by clicking the icons on the bottom. Try it out!

I finally purchased http://www.cansar.com after a very long and extremely painful process but I’m excited to finally have it. It’s really my fault for not having done so years ago since I’ve been thinking about it since I started using the Internet and just never judged it to be important enough. By the time I did, it was already gone.

I want to keep this post short but do want to say that I find domain name squatting to be a HUGE and unnecessary barrier to operating on the Internet – there is already enough competition between people with legitimate claims to the same domain, and domain name squatters only make things worse and don’t help anyone. Yearly domain name fees were set low to make them affordable for almost anyone (generally around $10) but as a result they were also cheap enough for squatters to buy them by the hundreds or even thousands. The current domain name system favors those who entered very early, bought as much as they could grab at the beginning and could then forced everyone else to buy from them. Since they are the only seller of the product they can get extremely high prices if they find buyers who want a particular domain enough. Markets don’t work very well when there is little substitutability between products and the supply of each product is constant at 1.

To the person who sold me this domain, I hope you enjoy your money, and I hope you find someway to contribute to society in a more useful way instead of creating obstacles to the rest of us. I would have much rather donated that money to charity to see it go to waste on you.

This weekend I spent some time reading a great book on the History of the of the Middle East – ‘A Brief History of the Last 2000 Years’ which I highly recommend, but for those of you who want to cover twice the number of years in less than two minutes and still actually learn something this interactive history map is incredible.

Much as I love reading I have always felt like getting the big picture of history is extremely difficult through books and even most history classes and I think that interactive media is extremely well suited to this. But who are all these people, you ask, the Hittites, the Seljuks? When it comes to digging deeper the map isn’t enough, wouldn’t it be great to have Apture in an interactive map like this? What do you think?

I would guess that virtually everyone living in the US has at one point or another been annoyed with the penny – a coin that is worth virtually nothing, hard to get rid of, and that tends to somehow accumulate in one’s wallet rather quickly. Greg Mankiw has been arguing for abolishing the penny for a while and several stores in Concord, MA have recently been trying the idea. While this is obviously not a very serious issue I do think that it’s a very sensible one and I think it would change things for the (ever so slightly) better:

“Being right across from the train station, we have long lines before trains leave and pennies make it worse,” said Fersch. “Further, there is a lot of lugging them from the bank, dropping them, not being able to reconcile register receipts and so on. Plus, mining zinc is an environmental nightmare, and it costs the government more to make pennies than they are worth. Finally, they have minted thousands for every man, woman and child. Where do they all go? If they were truly worth anything they wouldn’t end up in coffee cans, vacuum cleaners or sofas. It is simply a tax, which raises no revenue.”

Finland (a country generally very open to innovative ideas) followed by the Netherlands have already abolished both the 1 and 2 Euro cent coins with great success:

A survey in 2004 found a majority of citizens wanting the one and two cent coins to be withdrawn across the eurozone, support being highest for the withdrawal of the one cent coin. However, citizens in Germany were most vocal in the support of keeping the coin. At present, the three copper coins together represent 80% of all new coins minted in the eurozone.

Having visited Finland twice I have to agree that this was extremely convenient, except when trying to get 1 and 2 Euro cents for a collector friend and having to spend 10 Euro on a set of coins worth less than 4 Euro because the 2 coins are now so hard to find.

Sophia was just reading an article about the Strategic Petroleum Reserve of the United States (and a proposal to double it) and while I knew how much oil was being stored I had no idea about how it was stored, very very cool (from Wikipedia):

The Strategic Petroleum Reserve (SPR) is an emergency fuel store of oil maintained by the United States Department of Energy.
The US SPR is the largest emergency supply in the world with the current capacity to hold up to 727 million barrels (1.156E+8 m3). The second largest emergency supply of oil is Japan’s with a 2003 reported capacity of 579 million barrels (9.21E+7 m3).

The reserve is stored at four sites on the Gulf of Mexico, each located near a major center of petrochemical refining and processing. Each site contains a number of artificial caverns created in salt domes below the surface.
Individual caverns within a site can be up to 1000 m below the surface, average dimensions are 60 m wide and 600 m deep, and capacity ranges from 6 to 37 million barrels (1 to 4.3 million m³). Almost $4 billion was spent on the facilities. The decision to store in caverns was taken to reduce costs; the Dept. of Energy claims it is roughly 10 times cheaper to store oil below surface with the added advantages of no leaks and a constant natural churn of the oil due to a temperature gradient in the caverns. The caverns were created by drilling down and then dissolving the salt with water.

I’ve been writing a lot about the financial crisis because its a current issue and it’s really exposing some of the underwork of the world financial system but with everyone talking about that and the upcoming US election there is less focus on long term issues. One of these is global warming/environmental destruction, and I just read a BBC article about the newly released Living Planet Report by the WWF (which uses Apture on its site) and about how they are comparing it to the current financial crisis by calling it an ecological credit crunch:

The Living Planet Report is the work of WWF, the Zoological Society of London and the Global Footprint Network.
It says that more than three quarters of the world’s population lives in countries where consumption levels are outstripping environmental renewal. This makes them “ecological debtors”, meaning that they are drawing – and often overdrawing – on the agricultural land, forests, seas and resources of other countries to sustain them. 

He said the more than $2 trillion (£1.2 trillion) lost on stocks and shares was dwarfed by the up to $4.5 trillion worth of resources destroyed forever each year. The report’s Living Planet Index, which is an attempt to measure the health of worldwide biodiversity, showed an average decline of about 30% from 1970 to 2005 in 3,309 populations of 1,235 species.

Really great and timely marketing. And also an important thing to keep in mind and to put things into perspective.

These days I spend most of my time listening to The Economist Audio Edition or Podcasts and don’t have nearly enough time to listen to music (though I still make it to concerts – I saw Stereolab at the Fillmore yesterday). Furthermore, this blog is largely focused around academic subjects, but music is still a big part of my life and as such I wanted to post the video for incredible an incredible song by Simone White here:

I heard about it through a very clever and beautiful commercial for the relatively new Audi R8 supercar (which I first saw last summer in Monterey and have seen all over the place since then). Enjoy.

After overhearing two friends talking about how the money budgeted for the bailout could be used for better things I wanted to post two excerpts from an Economist article on the British banking bailout. Leaving aside the exact details of the US plan the important point to underscore is that there are two sides to the issue of budgeting – government spending and government revenue. While the bailout is clearly a drain on the budget, so is a slowing economy, and a dramatically slowing economy would be an economic nightmare. So spending money to help avoid economic disaster is a good idea, and an approaching recession is the wrong time to bring on budgetary austerity. Next up – getting the details of the bailout as right as possible.

Government Spending:

Such a ballooning in the government’s liabilities may seem ominous, but this is to look at only one side of the public balance-sheet now that the Treasury has turned banker: on the other side stand the assets. [...] In 40 banking rescues studied by Luc Laeven, an economist at the IMF, the taxpayer typically recouped some but not all of their cost. 

Set against this, the stakes are intended to be temporary, and the public purse could profit when the shares are eventually sold. Taxpayers could also make running gains from the overall package, says Ben Broadbent, an economist at Goldman Sachs, a bank. Although the Treasury will have to pay interest on the new gilts it issues to fund the recapitalisation, it will recoup over half of this from the 12% interest its preference shares in the banks will earn. It will also charge fees for the guarantees it is providing on £250 billion of new debt issued by British banks—another part of the rescue package. Putting it all together, Mr Broadbent estimates that the net gain to the exchequer—assuming it does not have to pay out on the guarantees—could be nearly £3 billion a year.

Government Revenue:

Recessions wreak havoc on the public finances by both cutting tax revenues and raising unemployment-related spending. For every percentage point that GDP is lower than expected, public borrowing will be roughly £7.5 billion higher than forecast in the first year, rising to £10 billion higher in the second year, according to the Treasury’s ready reckoner. If the economy were simply to stall in 2008-09 and 2009-10, this could double planned borrowing of £38 billion next year; if output were to contract over the period the outcome would be costlier yet. 

Well, there are many reasons, but one is wit:

In April 2007 Gazprom, an energy firm controlled by the Kremlin, made a Dr-Evil-style prediction that its market value would reach $1 trillion (ten times today’s level). 

- Emerging markets and the global financial turmoil, The Economist, Oct 11th 2008