2008 « The Ramblings of An Eternal Student of Life

Saturday, January 19, 2008

Economics/Business ... Personal Reflections ...

My Friday nights are not exactly the stuff of legend. I usually go to my mother’s house, have dinner with her and my brother, use their washer and drier, then go over to the local Shop Rite for my weekly groceries. Then I bring the food and the laundry home, and if I’m lucky I’ll get another two hours of reading or web surfing until I zonk out. It’s not exactly way up there on the excitement scale.

Last night I decided to change the ritual just a bit by going to the Borders bookstore in Willowbrook. I wanted to pick up a magazine that relates to one of my pedestrian interests, i.e. railroad operations and history. I had read on a hobby site that the latest edition had an article about Paterson, NJ, which is near my home turf. Trains Magazine can be hard to find in most magazine stores, but Borders has a big magazine section and usually stocks it. That’s what I like about Borders – it’s big, and so it has a lot of different books and mags and music covering a wide array of different subjects.

I have a lot of different interests myself, ranging from the sublime (philosophy) to the quotidian (collecting statehood quarters). My mix of enthusiasms is certainly eclectic; it includes theology, monastic spirituality, stamp collecting, hard rock music, vegetarianism, computers and programming, national politics, photography, indoor plants, essential oils, modern physics, the Roman Empire, urban American culture, social justice, the space program, Myers Briggs, economics, jet fighter planes, impressionism, bird watching, microbrewed beer, etc. It’s hard to find someone else with a range of interests even vaguely close to my own. Most people can relate to regarding perhaps two or three of my interests at most. And most small bookstores have materials that cover about the same. Even the local Barnes and Noble stores started to bore me.

But Borders is different. It has books that relate to almost all of my interests; and more than that, it has worthwhile books. It has the deeper books, the academic and specialty books, not just the coffeetable pieces and best sellers (and all those $2 bargain books that you’d need a lobotomy to actually find interesting and credible). Borders is the kind of place I could go into and wander around for an hour or two and feel comfortable. They don’t go quite as far with the comfort angle as some of the B&N;’s; you don’t have lounge chairs and couches mixed in amidst the book stacks, inviting you to sit and browse (a nice touch, admittedly). But there’s still something about the “twisty” layout of the place that makes it closer to home. I.e., the book shelves aren’t laid out in long rows of geometric order; instead there are “coves” where a general type of book can be found, e.g. computers, history, cooking, home decor, religion, etc. Unless I’m a hurry, I hit quite a few different coves on each visit. (And yes, they keep a pretty good train book selection.)

Or at least they did. After dinner I drove up to Willowbrook and found my way across a harshly-lit parking lot on a cold winters night, expecting the usual civilized atmosphere to embrace me as I walked into Borders. But I soon knew that something was wrong. The bookshelves were in disarray, the magazine racks were empty, and there were these xeroxed pages posted everywhere. And thus the bad news – store closing, 40% off everything. I wandered around a bit, and thought about perhaps taking advantage of the discount. But I didn’t have the heart. One of the few stores that I can actually spend quality time in was in its violet hour. Arg.

What happened? Well, on the way home, it stuck me. Despite my affection for it, I was guilty of putting Borders out of business. I’ve been using the Internet to hunt for bargains on the books that I want to read. I haven’t spent much time strolling the “coves” open to unexpected, interesting “finds”. I never did patronize the Borders coffee bar (although I had intended to do so someday). I didn’t drop by for the special events and entertainment nights. And I guess that too many other people followed my example. So I guess that I shouldn’t be surprised. This isn’t a rage against the evils of capitalism. It’s just a lament for a nice capitalist idea that I was freeloading on, until the financial chickens finally came home to roost.

The rest of the evening was also disorienting. I went to a different Shop Rite on the way back from Willowbrook, as my usual supermarket would require a back-track. And that also threw me off balance, as I had trouble finding the stuff on my grocery list. Of course you’d expect that problem in a supermarket you’ve never been to. But I used to patronize this Shop Rite quite regularly, until they upgraded the one where I now go (which is closer to my house). Since then, they rearranged the parking lot and the store interior (somewhat). Once again, I was getting that ‘you can’t go home again’ feeling; my vague recall of the place only made things worse.

My last stop before home was the local Barnes and Noble, which didn’t usually carry the magazine (or the atmosphere) that I was looking for; well surprise, surprise, they actually did have the mag. So I was finally on the scoreboard; I did finally manage to get the article about the Paterson yards in the old days. But when I got home and skimmed thru it, the ‘home no more’ feeling came right back. The article actually focused more on recent times at the place in question, and the author himself lamented how much the place had changed and how inhospitable it had become since he was a kid. And the rest of the magazine just reminded me once more why I lost interest in modern railroading; it just wasn’t as funky and friendly and informal as it was about 40 or 50 years ago. It was now just a standardized machine protected by barbed wire and post-9/11 security.

Oh well. I’m looking forward to getting back to the Bloomfield Shop Rite next week, and seeing some familiar faces stocking the produce bins and manning the cash registers! Perhaps I’ve now become a supermarket hobbyist . . . yes it is kind of interesting how some stores put the shelled walnuts in the produce section, while others place them in the baking supplies isle, and a few stores do both!

◊ posted by Jim G @ 3:25 pm Read Comments (2) / Leave a Comment

Monday, January 14, 2008

◊ Mike Bloomberg — What If?

Current Affairs ... Politics ...

Let me start by repeating the obvious: this is a big year for national politics. It’s already off to a roaring start, given the interesting outcomes of the Iowa caucuses and the New Hampshire primary. By the end of this week, two more states will add their results into the presidential candidate mix (Michigan and Nevada). And then two big southern primaries will follow in close order (South Carolina and Florida). There’s plenty of political commentary being cranked out in the newspapers and blogs, to which there’s not that much I can add. But for what little it’s worth, I’ll make this observation: the national parties have or are just about to bring it down to two sets of candidates (sort of like where the NFL playoffs stand this week). Those would be Hilary Clinton and Barack Obama on the Democratic side, and Mike Huckabee and John McCain for the GOP.

The Democrats will choose just how they wish to make history. Will it be the wonky old woman, or the young black orator? The Republicans will also slug it out over two groundbreakers: the new Christian fundamentalist versus the old master of independence and integrity. Wow – choose your virtue, choose your poison. No two alike! Each would take the country in a unique direction. But more than that; just the election of either one would make a bold statement. Clinton – women finally have their day. Obama – true racial equality can still be achieved. Huckabee – a man of the cloth should be in charge (hmmmm, haven’t they tried that in the Middle East?). McCain – a politician should try not to be so political, at least once elected (now there’s an idea – if he can pull it off).

And it would all go totally off the map if Mike Bloomberg decided to run, especially if he picked a running mate that made him worth considering (my choice for that role would be Colin Powell). The iron-clad rule is that third party candidates for the Presidency are never taken seriously. But 2008 is starting to look like the year when all the rules have flown the coupe. So what would a Bloomberg victory say? Something like this: who needs political parties when CASH IS KING.

Don’t think it can’t eventually happen.

◊ posted by Jim G @ 7:59 pm Read Comments (3) / Leave a Comment

Saturday, January 12, 2008

◊ ON THE PASSING OF AN OLD FRIEND

Personal Reflections ... Practical Advice ...

Just before Christmas, I got a card from a guy who I worked with at my first professional job after graduating from college. That was way back in the 1970s. The guy in question, Charlie Spencer, was quite a bit older than me. Actually, he was the same age as my mother. And he came from the back woods of Pennsylvania, quite different from the urbanized realms of northern New Jersey from which I hailed. And yet, despite the age and cultural differences, we got along quite well during the time we worked together.

Charlie and I teamed up on a number of productivity improvement projects, and during the breaks we talked a lot about our lives and interests and viewpoints. We were actually friends. Despite being as old as my own parents, and having a son of his own, Charlie never treated me “like a son”. And that was a good thing, in my book. I didn’t need another parent; but as an introvert living in a new town, I did need another friend. And Charlie was able to do that; he was able to put his own age on hold, and also the realization that he knew more than I did about life and how things really work. (Now that I’m just about the age that Charlie was when we met, I realize that I know a lot more about life and how things actually work than any 24 year old does; and I also know that in another 30 years, those 24 year olds will figure this out for themselves). In working with Charlie, I started to see that he had something that I didn’t – i.e., this wisdom of old age. He just knew how to get things done with people, even though he didn’t have a college degree like I did. So I learned to respect him and just watch and pick up some tricks from him.

After two and a half years out in the working world, I was able to get into law school back home in New Jersey. So Charlie and I bid each other adieu. Oh, we promised to get together again; I said that I would come down and visit, maybe stay over with him and his wife. But of course I never did. The years went by, the 1980s and the 1990s zoomed along, and Charlie and I pretty much forgot about each other.

But actually, Charlie didn’t forget about me. Sometime in 2000, out of the blue, he called me up. It was good to hear from him. He had retired and was living down in Florida. So we swapped e-mail addresses and he invited me down to Florida for a visit. Unfortunately, my own mother was beginning to falter and would need more and more financial support for her home care. So the years went by and I kept telling Charlie that I hoped to get down to see him; but again it never happened. My brother and I had pretty much agreed that neither of us would make any road trips given my mother’s increasingly frail and unpredictable state; we agreed to respond to anything within an hour or so. Still, I kept Charlie and his Florida home on my list of places to go after my mother passes.

Unfortunately, that trip isn’t going to happen. In his card, Charlie said “send me some e-mail”. Actually, I was swapping e-mails with him back around 2002 and 2003, but he started swamping me with those unfortunate “pass this on to everyone you know” e-mails, some of which contained questionable attachments (dangerous to your computer). I started deleting his e-mails and stopped sending my own personal ones because of this, and we lost touch again — other than the annual Christmas cards. But hey, I thought, let me start the e-mail thing again. Charlie had lost his wife back in 2005, and said that he was lonely. So sure, I attached some pix of myself and my mother and brother and shot them down to him. About 10 days later, I saw a reply from his address. But instead of what I expected (“thanks for the pictures, glad to see what you look like today, etc.”), the message said “this is from Charlie’s son and his computer teacher Steve; sorry, but the bad news is that Charlie passed away on New Years Eve. He took a nap during the afternoon and never woke up …”

Now I feel an emptiness, and I’m sad about not putting more energy into staying in touch with Charlie. I don’t even have a picture of him. With certain people, they come and go through your life and you take it in stride. But with a special few, it’s like an iceberg; their significance to you is very real but is well hidden. You’re not fully conscious of what they mean to your life until they’re gone. As with my late Uncle Bruno. And as much as I respect her, I don’t stay up nights thinking about my ex-wife; but I’m still a bit hung up on the memory of a girl in high school who tried to get past my Asperger’s-like barriers to make contact with the super-nerdy kid that I was (and still am, in various respects). Well, she never did get past my immature suspicions and fears, and I haven’t seen nor heard any references to her in the 37 years since I graduated from high school (not even Google or classmates.com have helped; but that’s probably just as well). Even now, though, I still think of her. As with Uncle Bruno. And now, Charlie Spencer.

So watch out for those “iceberg” people in your life. Do what the Titanic did, even though it shouldn’t have; get close to them and keep close. Real icebergs will sink ships, but relationship icebergs are good for the soul.

◊ posted by Jim G @ 7:39 pm Read Comments (2) / Leave a Comment

Monday, January 7, 2008

◊ CORPORATE AMERICA, TIME FOR A TIME-OUT

Economics/Business ... Public Policy ...

Back in the late 19th century, there was a national political movement called “Progressivism”. People were a bit upset with big business, so the politicians of the day sought to appease this displeasure by setting up regulation schemes as to reign in the abuses of cowboy capitalism. Federal and state agencies were set up with the power to tell critical industries such as banks, telecommunications, railroads, power companies, insurance companies, etc. what they could and could not do. There existed a variety of academic rationales for such regulation, but the chief political concern was – or should have been – protection of the little guy. (Arguably, some of the business moguls themselves liked the stability that government oversight bought; it toned down the competition while guaranteeing some profit).

The era of regulation seemed to correspond with a more level economic playing field. By the 1960s, there was a broad middle class in America. The super-rich were quite rare, and the “generally wealthy” (doctors, lawyers, corporate leaders) weren’t all that much wealthier than the local supermarket produce manager. There were still a lot of poor people, but the “War on Poverty” begun by the Johnson Administration and continued by Nixon actually did shrink the poverty rate significantly.

But things changed. After 1980, with Ronald Reagan’s election, business regulation became a dirty word. “Deregulation” became the mantra of the young and hip economists. Regulation was found to be wasteful and outdated. Along with labor unions, they were found to be slowing the growth rate of the economy. They admittedly had choked certain industries to the point of bankruptcy. They had to go. And go they did. Within a few years, the walls of federal and state regulatory bureaucracies came tumbling down. And once oil prices came down from their peaks in the early 80s, the economy really got into gear.

But now we see that there was – and still is – a big problem with unfettered capitalism. I.e., the “pie” of economic growth has been cut quite unevenly. The rich have gotten the lions share, the middle class have barely gotten a taste, and the poor have to be content with the crumbs.

So it was with great interest that I read a recent article in the NY Times entitled “The Free Market: A False Idol After All?” It turns out that a lot of thoughtful people are now having second thoughts as to whether America is better off without some government oversight of the capitalists. I doubt if we are going to see Bolshevik-style five-year plans anytime soon. But if the Democrats take the White House back later this year (which is still an extremely iffy proposition; McCain might just make a comeback, and then all bets are off), we may see a bit more government involvement. Will that slow the economy down? Yes, it will. Would anything good come of that? Perhaps we could avoid future Enrons and sub-prime mortgage crises and accounting scandals and HMO’s that refuse to pay legitimate medical bills.

Also, maybe we could share the economic pie more fairly. The challenge is to figure out how to minimize the drag on the economy and maximize the benefits of fairness and stability. America had almost 100 years of extensive regulation experience, and can hopefully learn from that what worked and what didn’t work. We can’t just bring back the FCC and ICC and FAA and FPC as they existed in all their dusty, bureaucratic grandeur back in the 1940s. There would have to be innovation, some way of keeping the regulators from becoming a hidebound institution (as many of those agencies had become).

Despite the heavy drag placed on the economy by the regulators and labor unions of old, the American economy still did quite well in the 1950s and 1960s. I think I know why. Back then, our government was making it easier and easier to go to college. In New York City, a citizen had the right to go to college for free (at CCNY). Millions of young guys returning from WW2 and Korea got generous loans and tuition payments from the GI Bill. And states built and expanded their college systems and charged tuition rates that weren’t much more than pocket change.

Well, guess what. All those college graduates kept IBM computing and Pan Am expanding and AT&T innovating, and got our space program into orbit and then onward to the Moon. Subsidized education fueled economic growth despite the bureaucratic drag, and regulation (along with labor unions) helped the middle class and working class to get their share of it. I was around in the last decade of it, and it really wasn’t so bad (although the regulators and labor unions really did milk it at the end and got what they deserved — Ronald Reagan). I hope that Hilary or Barack or John E. will consider taking us back in that direction, should they get the chance – but help us do it better this time. We won’t get fooled again. We hope.

◊ posted by Jim G @ 10:27 pm Read Comments (2) / Leave a Comment

Friday, January 4, 2008

◊ Can the USA get its spinach back?

Economics/Business ...

With oil prices at $100 per barrel, equaling the all-time high price reached in the early 1980s (in inflation-adjusted dollars), I wanted to get some info and perspective on what’s going on in the energy market – and what the implications will be for the American economy. I found some interesting web sites on the topic: www.theoildrum.com, www.cera.com (Daniel Yergin’s organization), www.platts.com, and i-r-squared.blogspot.com. Here are some points and possibilities behind the current situation.

>>> It’s possible that the same speculators who caused the internet stock bubble in the late 1990s and the real estate price bubble in the 2000s are now flooding the commodities markets with “silly money”, thus pushing the price of oil above its real value based upon irrational expectations of future demand. If so, then the bubble will burst at some point; but it could take years, or a severe economic depression, or both.

>>> Why are China and India still buying oil up so rapidly if it has become so expensive? Well, in terms of American dollars, oil is currently very expensive. However, the American dollar is at a low point relative to other nations’ currencies. To other countries, oil isn’t quite as expensive.

>>> As oil prices started shooting up three years ago, energy expert Daniel Yergin predicted that prices would start coming down within 18 to 20 months, due to new sources of oil coming on line. Sources such as deepwater fields and the Canadian tar sands would become profitable to pump at such high prices. Well, we’ve gone twice that time period now, and although world oil production has increased somewhat, the dramatic increase predicted by Yergin has not occurred. Why not? Actually, Yergin’s own website gives a big clue. The real cost of finding and pumping oil from newly found oil sources has shot up in recent years; it has doubled since 2000, with rapid acceleration since 2005. If that’s true and the overall trend continues, then the speculators actually have good reason to speculate (as if the accelerating expansion of the middle class in China, India, Asia and the Middle East weren’t enough).

>>> A really important concept, albeit one that is rarely discussed in the mainstream press, is termed “EROI”, which means Energy Return on Investment. Basically, this is a measure of how much energy is returned for each unit of energy used to find and process an energy source, such as oil and coal and nuclear energy. Depending upon how you account for the side-effects of pollution and global warming and waste disposal, the EROI for most of our energy sources has been in the 10 to 100 range over the past 100 years. Thus there has been vigorous economic growth in the nations that knew how to exploit this energy cornucopia. Unfortunately, we may now be going into an era when EROIs are falling below 10.

>>> Some analysts feel that ethanol, despite its appeal of coming from a natural crop that soaks up energy from the sun and the soil, has an EROI of 1.6 at best and possibly below 1.0, depending on how you account for pollution side-effects. So, ethanol subsidies by the U.S. may well be a political porkbarrel, unless much more efficient techniques for growing corn and converting it to alcohol fuel are in the offing.

>>> Therefore, in the short-run, oil prices might be artificially high due to speculation, which will trigger a recession. That would bring some price relief. But in the long term, world demand for oil will probably keep climbing, while discovery and production costs will keep increasing. That will obviously put the squeeze on those people used to high levels of cheap oil consumption, i.e. the people of the USA. A Prius here and a mini-fluorescent lamp there may not make up for the gap; something will have to give, and that would be the USA’s high standard of living — its suburban lifestyle.

>>> Of course, technology may come to America’s rescue once more. However, over the past few decades, the American governments (federal and state) have radically reduced subsidies to scientific and technological education and research, in favor of tax cuts, homeland security expenditures, and ethanol subsidies. At the same time, the developing countries have been increasing their science, technology and education subsidies. It’s kind of like that old Popeye children’s cartoon, where Popeye throws his spinach down the river, and the spinach can says “you’ll be sorry” as it gets swept ‘round the bend.

>>> The world is tired of living in muddy or dusty poverty while the USA revels in suburban luxury. It will seek its share of the wealth either through crafty merchantalism (China), investment in human capital (India), revived nuclear armed forces (Russia), or the worst strategy of the bunch, fundamentalist religious warfare. At the same time, the USA leans back on its past accomplishments and revels in the amazing cell phones and flat screen TVs that its capitalist system currently produces (or imports). Unfortunately, that capitalist system is not supporting the basic research and development that would keep America at the technological forefront in 10 or 20 years. That requires government; remember that the Internet was originally set up by federal government research.

>>> So, unless America gets its “spinach” back, and soon, today’s kids may live to see an America in decline, an America of worsening living standards and continually rising unemployment. Oh well; at least that will take care of the Mexican border crisis.

◊ posted by Jim G @ 11:43 pm Read Comments (4) / Leave a Comment

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