A Little Ludwig Goes A Long Way

Mitt pays $3M+ in taxes a year — that is a s%^tload of money, whatever the rate. And people want another $3M a year out of him? When I see numbers this size, I wonder more about where it is all going — shouldn’t we spend more time on what the heck the government is doing with all this money? OK yes I am a big fan of fairness and I hate the shenanigans that have gone on at our largest financial institutions, but we ought to spend a lot more time looking at what we are getting for all our tax dollars. I get more outraged about handouts to big banks than I do about this tax rate issue.

SOPA and PIPA are beyond dangerous — the whole tech industry has been railing like crazy against these, it sure would be good if the industry would focus instead on how to help content creators protect their IP and get paid for their work. I’d like to see authors and singers and movie directors get paid a lot of money, I think they should be allowed to charge whatever they want for their products, I don’t think any of us have the right to copy their works willy nilly. These industries employ a lot of creative people in good jobs in the USA and I think we should encourage this. It is easy to sit back and pee all over the movie industry and the Senate and House, but we should spend time on more productive activities that help solve the problems.

Apple blows it out. Ok I lied, I am not feeling contrary about Apple at all. Blowing it out of the water, customers love them, competitors in disarray, upside internationally and in PCs, iPad 3 and iPhone 5 and Apple TV opportunities ahead of them. Apple has only their own egos to fear.

I’ve been fortunate. I had great access to education due to support from my parents, and I was lucky to be at Microsoft during a very heady period for the company. I am clearly a 1%er. And I understand that my good fortune is part luck, part due to the support of others, part due to the free market capitalistic structure that our society has created. A little bit of my fortune is due to my hard work but many people have worked hard and received less — I’ve been lucky.

I’ve been watching the #OccupyWallStreet activity with interest. In my heart, I have great empathy for the movement. Growing up in flyover country, I never felt very warm about the government and financial elite on the East Coast, I viewed them with suspicion. And then having spent most of my adult life on the West Coast, surrounded by entrepreneurial activities at work and liberal attitudes, I have not grown to feel any warmer about large corporations or government involvement.

So when I see people expressing their feelings of lack of justice, lack of representation, antipathy towards the entrenched financial and governmental powers, I tend to empathize with the people on the street. And I applaud heartily their active peaceful engagement in the political process — they have the right to take to the streets in peaceful fashion, they have the right to be heard, they are not doing anything to harm anyone. So without even really understanding the goals of the movement, I applaud and encourage the people involved. It is hugely positive to see people have this level of passion about the issues in our society, and to be fully engaging in participative democracy. Go go go!

A couple of smart and committed young people sent me this “Why Occupy Wall Street? 4 reasons” video as a way of explaining why they are participating in the demonstrations. It is a worthwhile watch. The video lays out 4 principles:

• Re-regulate the financial institutions by reinstating Glass-Steagall. I am not informed enough to know the exact form of banking regulation we should have, but the financial services industry has demonstrated that it is not effective in controlling its own risk profile, or limiting the impact of their risks on the rest of society. A discussion about regulation and risk limitation seems like a good thing.
• Audit the Fed. Certainly greater transparency around the Fed, and its relationship with major financial institutions, seems to be a good idea. The relationships between the Treasury, the Fed, and major financial institutions, based on people circulating between all three, need more openness and examination and perhaps regulation.
• Reverse #08-205 by amendment. I feel very strongly about this one. Corporations do not have the right to vote, they should not have the right to manipulate the political process, they should be barred from funding candidates and causes. I see nothing good from allowing corporations to spend money on politics, it is corrupting. Fully fully support!
• Overhaul 1%/Corp tax code. I am not sure exactly what this means, I can tell you I have paid a lot of taxes, a lot. I am not against paying a fair rate and I am not against a progressive tax. I’d be all for a simpler system because my tax return is a huge freaking disaster. I think there is a larger issue here though, I don’t think the problem is all on the revenue side, I think you have to look at the expense side too and rein in government spending. So — all in favor of fair taxes, but we need to look at the spending side too.

I know that not everyone in the #OccupyWallStreet demonstrations embraces these exact 4 principles, so I am not saying I approve 100% of the demonstrator’s goals — but these particular points seem like great discussions to have, and I fully support the efforts to confront us all with these issues.

One thing I am wondering now is this — what exactly do the 99% want those of us who are supportive to do? How can I be effective in advancing the discussions around these points? Demonizing the 1% is not an effective strategy, some of us embrace reform, and we need a way to engage on the issues in a productive manner. Don’t paint us all with the same brush. Help us to help you.

I watched bits of LSU/WVU (LSU is my #1), Toledo/Syracuse, ND/Pitt, UW/Cal. But key games I watched yesterday were OSU and USC.

• OSU is in for a tough year. Yes they tackled better yesterday, but it was Colorado. If we give up 17 to Colorado, we will give up 24+ to MSU/Nebraska/Wisconsin, and the OSU offense does not have the firepower to score enough against those teams. I’m glad Braxton and other young players are getting the reps, this is a team for next year.
• USC shot themselves in the foot over and over again, and Erickson was clearly the best coach out there. The ASU offensive game plan and adjustments were very effective and USC could never crack it.

On broader college football issues, if you haven’t already seen the below, read immediately. As money continues to pour into the sport, the issues discussed are going to become more prominent, not less.

• If you haven’t already read the the Quad’s story on college football fan distribution, do so. Excellent explanation of the market facts underpinning realignment chaos.
• Study about poverty and student-athletes. Excellent, record revenues and expenditures in college football, but many players struggle.
• Of course. the Atlantic article on the inherently corrupt economics of college football.

And on a lighter note, Matt Sarz’s TV listings. Finding USC on the Root network last night was tricky.

Some interesting commentary on Google’s business model by Gruber — a total Apple fan, doesn’t view ads as inherently evil, but says you need to be very respectful of your users. And referring to an original article by Aaron Swartz who says you can’t make things worse for users just to make money.

I don’t know what evil is when applied to technology business models. I do know that I feel very comfortable with my Apple transactions — they ask me for a lot of money, in return they give me a product that is mine to own completely. They give me the option of signing up for services for more money, services where they keep data about me, but it is up to me. It feels like a transparent and respectful model. Similarly, I feel good about my Microsoft transactions — they ask me for money, in return I get a software or hardware product that is mine to do what I want with (excluding Bing which I rarely use, and excluding some of their new online service offerings).

I feel somewhat less good about my Google relationship. I do like and use their products. But the fact that they are “free” is bothering, I know that Google is making money off me somehow, but there is very little transparency around it. Who is looking at my data, what are they paying for it, are there certain things I do that are very high value, are there people using info about me that I would rather not, ?

I don’t know any of this and it makes me kind of queasy. Enough to abandon products that are actually useful? Well not yet — and for search,it is not like there are alternatives that are more respectful of me. But I can’t imagine ever having the kind of respect for and attachment to Google products that I have to products from companies with more straightforward business models.

A bag of stuff I’ve read recently that was compelling:

• Coffee as economic health indicator. Yay Seattle! Contrast with…
• World Class Orchestras
• McKean’s Inversion. Whatever you publicly espouse to be — you probably aren’t.
• Wicked Problems.
• A one page explanation of the Higgs boson
• On the lighter side, Bacon Ipsum.

OK so Amazon’s move against Macmillan was seriously ham-handed and Amazon is still caught up in their own undershorts. Some Amazonians deserve some serious reprimands, this is just not the way these things are handled. Now Amazon has created even more problems for itself.

That said — we are talking about 4-5 days of inconvenience Amazon has caused readers and authors. Stupid but fixable.

As Charles points out, Macmillan is trying to put the screws to all of us big time and for the long run. They are grabbing for more dollars out of out pockets at a time when book costs are heading down. Now, if Macmillan was passing all this on to authors, I might be OK with it, but I suspect it is being absorbed by a bunch of corporate suits.

Who is our real friend here? Shame on Amazon for being so clumsy, but greater shame on Macmillan.

• Terry Tao math blog. Brain stretching.
• How Goldman profited on housing crash. Don’t know how reliable this source is but disturbing.
• Controversy about whether there is or is not a giant magma chamber under the state of Washington.  Probably not but a great disaster movie in the making.
• Thread on design versus iteration.
• Automated sports writing. Amazingly readable. (Thanks Phil).
• The Billion Dollar Gram. Another one via Phil.
• Gravitational Corridors. Cool.
• Nowhere are we more honest than the search box.
• NASA dollars pissed away on 2012 nutballs
• Why it is harder than ever to get into some colleges. Interesting question about whether this applies to other markets.

• World’s busiest ports
• Fractal Nature of Legal Systems. Human systems/societies/cultures are capable of pretty much unbounded complexity. It is not just legal systems.
• Kid solves rubik’s cube while playing guitar hero. Ah, youth.
• Why are cheap airlines so cheap. Love the “passengers per employee” stat.

Random posts that have caught my eye recently:

• The VC Math Problem — excellent discussion of the “macroeconomics” of the VC asset class.
• What to fear. The truth about what is going to kill you. The sensationalist news stories every night on random acts of violence and tragedy are scary, but they aren’t the threat.
• The Rhythms of My Life. One guy’s methodology for examining his life and how he lives it. Not the right methodology for everyone, but everyone probably needs some methodology.

Buying Risky Assets | The Big Picture. — cogent picture explaining the program.

• “The prospect of hundreds of billions of newly minted dollars coursing through the global financial system caused currency traders to thrash the greenback by almost 3%.”
• ” The Fed is â��now bringing out all the ammo in its arsenalâ��, according to Rosenberg.”
• “And, for those who think the time is ripe for upping their equity allocations, Mr. Rosenberg would like to remind them of what happened to buyers of the Nikkei 225 after Quantitative Easing was tried in Japan. Longs were treated to a 20% rally that lasted six weeks before stocks set new lows just four months later. Ultimately, predicts Rosenberg, QE helps bond buyers more than stock buyers.”
• “But since I doubt dollar holders will sit idly by as the paper they hold shrinks in value, I see a quick and happy resolution as being a low probability event. Then again, other central banks (the BOE & SNB) are engaging in the same currency-busting policies, so itâ��s not altogether clear whether the worldâ��s fiat currency system can survive a war of attrition.”
• “Weâ��ve arrived at this unfortunate juncture in our nationâ��s financial history because of reckless behavior in both New York and Washington D.C.“
• “Let us all hope the U.S. experiment with pushing the button on Quantitative Easing is more successful for us than it was for the Japanese. But given all the behavior that brought us to this point, we will need to be both lucky and good from this point forward.”

“It’s time to let the sun shine in on this mess.” via Scott Loftesness: The AIG Firestorm Spreads.

Hear hear.

Quotation of the Day: “I’m Captain Asphalt.” TIMOTHY J. GILCHRIST, newly appointed stimulus czar for New York State.

via Today’s Paper – New York Times.

Love this. Is civil engineering going to become cool again?

Force Structure FY09 Beyond. — the armed forces wrestling with massive budget cuts. And the global manufacturing collapse — not a pretty picture. It is hard to see how we are not going to have significant unemployment issues for years.

Marginal Revolution: GM fact of the day. Wow. Market cap 1/3 of bed bath and beyond. Worth 10% of apple’s cash. 96K employees but paying benefits for 1M people. Some of the numbers are a little misleading but still.

Madoff Story Smells Funny | The Big Picture. The WSJ and NYTimes seem to be hinting at this today too, investigators seem to feel that the sheer amount of work required more than one person working on the fraud.  Fascinating.

A SWOT Analysis On America. Don’t agree with many of the detailed points but the core idea of looking at our situation with a SWOT analysis is a good idea.  Too often as I read the papers these days, I don’t really understand the goals and strategies of some of our government actions.  A reasoned discussion with a clear decision framework would be nice.

The Big Picture | Modern Finance. — in case, like me, you need reminding on what these things are

Bracket up at techcrunch. Awesomeness. My money is on Berkshire Hathaway