A Valentine's Sentence for my Wife
Not Real versus Real
Not real:
"Nosedive" . . . a glossy, fun, and satirical social-media-dystopia episode of Black Mirror . . . which is tragic for the main character, but also sort of silly because these people have bought into the app and the ratings only for the results and have basically brought things down on themselves
versus
real:
Alipay Sesame Credit . . . China wants to control it's wild and poorly regulated economy, where purveyors often purvey such delicacies as rotten meat and toxic baby formula, so they dream of implementing a government social credit score; meanwhile e-commerce giant Alibaba has created a private version of this: you get a social credit score from 350 to 950, based on mountains of data, both financial and behavioral-- earn points for advanced degrees and lose points for playing too many video games . . . and like the Black Mirror episode, part of your score is determined by the scores of your friend-- so if you're buddy drops out of college and starts playing video games, it's time to shun him . . . perks for a high scores include better train and plane seats, smaller deposits for hotels, screening on dating apps .. . and the plan is to feed facial data into the score as well with a surveillance program called Sharp Eyes, so then if you frequent bad neighborhoods or shady areas, the algorithm will factor this into your score . . . and if the algorithm makes a mistake, you're screwed, but that's not the scariest part of this . . . the scary part is that attaching social scores with credit scores is the killer app; this will curtail crime and it will get people to behave "better," both financially and socially, and it will get people to fall in line in regards to the government . . . the utilitarian trade-off for a better society might be just enough that this system is adopted completely and irrevocably . . . and while I'm highly critical of this now, I'm sure it won't be long before I'm welcoming our new insect overlords, because I don't want to ride third class on the train or be unable to get a home equity loan . . . so the winner is . . . by a landslide:
reality (yikes).
"Nosedive" . . . a glossy, fun, and satirical social-media-dystopia episode of Black Mirror . . . which is tragic for the main character, but also sort of silly because these people have bought into the app and the ratings only for the results and have basically brought things down on themselves
versus
real:
Alipay Sesame Credit . . . China wants to control it's wild and poorly regulated economy, where purveyors often purvey such delicacies as rotten meat and toxic baby formula, so they dream of implementing a government social credit score; meanwhile e-commerce giant Alibaba has created a private version of this: you get a social credit score from 350 to 950, based on mountains of data, both financial and behavioral-- earn points for advanced degrees and lose points for playing too many video games . . . and like the Black Mirror episode, part of your score is determined by the scores of your friend-- so if you're buddy drops out of college and starts playing video games, it's time to shun him . . . perks for a high scores include better train and plane seats, smaller deposits for hotels, screening on dating apps .. . and the plan is to feed facial data into the score as well with a surveillance program called Sharp Eyes, so then if you frequent bad neighborhoods or shady areas, the algorithm will factor this into your score . . . and if the algorithm makes a mistake, you're screwed, but that's not the scariest part of this . . . the scary part is that attaching social scores with credit scores is the killer app; this will curtail crime and it will get people to behave "better," both financially and socially, and it will get people to fall in line in regards to the government . . . the utilitarian trade-off for a better society might be just enough that this system is adopted completely and irrevocably . . . and while I'm highly critical of this now, I'm sure it won't be long before I'm welcoming our new insect overlords, because I don't want to ride third class on the train or be unable to get a home equity loan . . . so the winner is . . . by a landslide:
reality (yikes).
Sirius: Not Dead Yet
We thought it was curtains for our beloved family dog Sirius but after a three day stay at the pet hospital (don't ask about the bill) it seems he's got some life left in him; he's definitely in dire straits and I think everyone in the family has shed some tears about his predicament, he's got two tick-borne diseases (lyme and ehrlichia) and his kidneys are screwed up and infected (possibly due to the lyme disease, but maybe not) and he's got all kinds of high-levels of bad stuff because of the kidney malfunction-- too much phosphorus and proteins and all kinds of junk-- and he wasn't eating so he lost a bunch of weight; but he perked up a bit today and he actually ate a bunch once he got home; he's on eight different medications-- two antibiotics, an appetite stimulant, an antacid, blood pressure medicine, stuff to get phosphates out of his body, an anti-nausea slurry, and subcutaneous fluids (which we have to administer) and so if he continues to eat, we'll be able to get this stuff in him and he has a chance to recover . . . which would actually be a miracle, considering the state he was in last week.
Viewing Habits of Man Children
Quite a juxtaposition of streaming video consumption: last month my kids were watching the first season of Breaking Bad and now they're obsessed with an adorable kids show called Gravity Falls (it's actually tolerable for adults . . . funny and fast-paced, but the recommendation algorithm is going to struggle with what to suggest next).
Ghosts, Music, White People and Black People
I am a man of reason and so-- of course-- I don't believe in ghosts, I don't believe in a spirit world, lurking just beyond what we can see and sense . . . but that doesn't mean I don't occasionally enjoy a ghost story (Hamlet, for instance) and Hari Kunzru's new book White Tears is primarily a ghost story, and the ghosts in this tale often manifest themselves sonically and they have been badly put down by the white man; if you like music and musical production, then this is the ghost story for you . . . it's about two white kids who want to find and create "authentic music," it's about race and cultural appropriation, it's about obsessive collection, money, power, desire, and oppression . . . and mostly it is a very very weird, fragmented, well-written, surreal, and slightly self-congratulatory version of the 1986 film Crossroads . . . the middle section of the book loses some momentum, but the pay-off is vivid and tragic and moving and it will connect you with the spectre of racism way down in Mississippi in a very real way (and if you want something lighter to read with a musical theme, check out this Quincy Jones interview, it's amazing).
Symbolic Wall Will Cause Real Damage
The brilliance and horror of Trump's "build a wall" campaign promise is that it's largely symbolic, of course; because of the Bush Adminstration's Secure Fence Act of 2006, fences and walls are constantly being built along the US/Mexico border so all Trump has to do is point to some of this work and fund it a bit more and he's a hero to the folks who want to seal America up into some kind of dystopian ethnically safe consumerist theme park . . . but the consensus among anyone who has actually studied border walls is that they don't work . . . it's expensive and difficult to build a twenty foot wall, and it's even more expensive to maintain and patrol it-- but it's really cheap to build a 21 foot ladder (or dig a tunnel or go some where the wall isn't) which would be fine, if this wasn't our tax money going towards this gigantic quixotic concrete patriotic emblem . . . but that's not the worst of it, the worst of it is that the Secure Fence Act usurps all environmental laws . . . so while the wall isn't going to curtail immigration, and it's going to cost us money, those are just stupid human problems-- and we are especially stupid these days-- but the fact that it's going to do irreparable damage to delicate ecosystems, endangered species, and the movement and breeding of wildlife is just heinous . . . if you can stomach more on this, check out this episode of 99% Invisible.
George Saunders Can Read
Cunningham, Powers, Brady, my wife and I went to see George Saunders at the Rutgers Student Center last night, and I'm happy to report that not only can Saunders write great stories and sentences, but he's also a thoroughly entertaining reader . . . he reminded me of a miniature and less profane version of George Carlin; here are a few of the interesting things he said about writing in the Q & A:
1) a short story needs to be a "powerful mechanism" . . . which is certainly true these days, as the literary short story is basically a forgotten and ignored art form, and to capture someone's attention in this format requires something deliberately compelling and evocative; boilerplate isn't going to do it when you can watch Black Mirror;
2) Saunders described the Hot Wheels track he had as a kid and the "gas stations" that ran on batteries that he would carefully place in certain sections of the circuit, so that they propelled his cars just far enough to reach another gas station, and so on and so forth, until he had created a track that would race the car for an infinite amount of time (or until the batteries ran out) and he likened this to writing a short story: you need enough "gas stations" to keep the reader going;
3) he said it was a revelation in his writing when he realized that dialogue shouldn't sound like how people talk-- people talk in abrupt half finished sentences that rely on tone and body language to convey meaning-- but dialogue in a story should sound great on it's own, be rhythmic and fast-paced, and most importantly, avoid being too on the nose . . . people tend to "talk past each other," they half-listen, but then inform their reply with whatever is brimming in their brain . . . this is how I imagine this lesson in a concrete format;
do you believe in God?
why yes I do . . .
it would be better to write:
do you believe in God?
how can there be a God when property taxes are this high for a 1500 square foot house?
1) a short story needs to be a "powerful mechanism" . . . which is certainly true these days, as the literary short story is basically a forgotten and ignored art form, and to capture someone's attention in this format requires something deliberately compelling and evocative; boilerplate isn't going to do it when you can watch Black Mirror;
2) Saunders described the Hot Wheels track he had as a kid and the "gas stations" that ran on batteries that he would carefully place in certain sections of the circuit, so that they propelled his cars just far enough to reach another gas station, and so on and so forth, until he had created a track that would race the car for an infinite amount of time (or until the batteries ran out) and he likened this to writing a short story: you need enough "gas stations" to keep the reader going;
3) he said it was a revelation in his writing when he realized that dialogue shouldn't sound like how people talk-- people talk in abrupt half finished sentences that rely on tone and body language to convey meaning-- but dialogue in a story should sound great on it's own, be rhythmic and fast-paced, and most importantly, avoid being too on the nose . . . people tend to "talk past each other," they half-listen, but then inform their reply with whatever is brimming in their brain . . . this is how I imagine this lesson in a concrete format;
do you believe in God?
why yes I do . . .
it would be better to write:
do you believe in God?
how can there be a God when property taxes are this high for a 1500 square foot house?
Three History Lessons (Two of them Scary)
We did some rare Monday/Tuesday TV watching this week-- normally there is no screen-time for our kids from Monday through Thursday-- but I invoked the "documentary rule" twice on two consecutive days; both of these stream on Netflix:
1) Alex and I consumed about half of the documentary Fed Up, which documents the rise of fat-free foods, added sugar, sugar addiction, and the big sugar lobby . . . it's important information but presented in an incredibly sad manner, from the perspective of a number of morbidly obese children and their families . . . the lesson is that companies are pushing hyper-palatable processed foods with tons of added sugar and so unless you eat real food and avoid soda and juice, you're going to be consuming a lot of unwanted sugar; a calorie is not a calorie-- 100 calories of nuts is processed totally differently than 100 calories of gummy bears . . . the scariest statistic is that there were zero cases of childhood "adult onset" diabetes in 1980 and now there are 60,000 cases; unfortunately, even if you do eat real food, chicken isn't even chicken, so you're pretty much screwed unless you have your own organic farm;
2) Ian and I watched Command and Control, a PBS documentary that recounts the Titan II nuclear missile silo explosion that happened in Arkansas in 1980; it's a gripping story, with plenty of footage of nuclear blasts, wild anecdotes from old time rocket scientists, Cold War context, and a detailed narrative of the Arkansas catastrophe-- including the surrounding media carnival; not only are there plenty of moving moments and tales of heroism, but there's also frustrating ending-- the soldiers involved were treated quite shabbily by the Air Force once the incident was over and there's still plenty of room for error with our current nuclear arsenal . . . I think I'm going to read the Eric Schlosser book that inspired the film;
3) and here's a history lesson that's a little less heavy . . . although I guess D. Boon's demise even puts a tragic spin on this jazzy and light-hearted punk number.
1) Alex and I consumed about half of the documentary Fed Up, which documents the rise of fat-free foods, added sugar, sugar addiction, and the big sugar lobby . . . it's important information but presented in an incredibly sad manner, from the perspective of a number of morbidly obese children and their families . . . the lesson is that companies are pushing hyper-palatable processed foods with tons of added sugar and so unless you eat real food and avoid soda and juice, you're going to be consuming a lot of unwanted sugar; a calorie is not a calorie-- 100 calories of nuts is processed totally differently than 100 calories of gummy bears . . . the scariest statistic is that there were zero cases of childhood "adult onset" diabetes in 1980 and now there are 60,000 cases; unfortunately, even if you do eat real food, chicken isn't even chicken, so you're pretty much screwed unless you have your own organic farm;
2) Ian and I watched Command and Control, a PBS documentary that recounts the Titan II nuclear missile silo explosion that happened in Arkansas in 1980; it's a gripping story, with plenty of footage of nuclear blasts, wild anecdotes from old time rocket scientists, Cold War context, and a detailed narrative of the Arkansas catastrophe-- including the surrounding media carnival; not only are there plenty of moving moments and tales of heroism, but there's also frustrating ending-- the soldiers involved were treated quite shabbily by the Air Force once the incident was over and there's still plenty of room for error with our current nuclear arsenal . . . I think I'm going to read the Eric Schlosser book that inspired the film;
3) and here's a history lesson that's a little less heavy . . . although I guess D. Boon's demise even puts a tragic spin on this jazzy and light-hearted punk number.
Super Fans Abound
Until you are confronted, it's easy to forget about the existence of actual sincere New England Patriots supporters, and it's also easy to forget-- until you catch some cable news at the gym-- that there are people in this country actively rooting for Armageddon.
He Warned Me . . .
My buddy Whitney told me not to consume stuff like this, as it just makes my head explode, but I ignored him and this is what I have to report: the new episode of This American Life, "Words You Can't Say," will probably make both liberals and conservative flip out-- the episode is composed of two stories, one from a liberal vantage point and the other from a conservative one; they are fantastic on their own, but together they add up to an insane yin/yang yo-yo that will pervade your consciousness and bounce eternally . . . each story contains a twist that is almost too good to be true and if you thought things were bad and weird and polarized and unfathomable in our country, then this episode will confirm your worst suspicions (and then some) so I'd advise you to listen to Whitney, as curiosity killed the cat (but I'm sure he had an incredibly compelling and dramatic time dying).
The Test 106: The Nine Billion Names of Todd
In honor of the Super Bowl, this week on The Test we have a high-scoring extravaganza . . . tune in, take a shot, and see if you can outscore the ladies.
Dave Crushes It at the Gym
Lately-- due to my foot injury-- I've had to resort to using the various aerobic exercise machines at LA Fitness; my favorite contraption is the rowing machine but I can't row for a sustained length of time due to a dire and rather discomfiting situation: the machine is lacking an infographic diagram on an essential technique, a necessary procedure in arrangement that I just can't seem to master-- and apparently many people share this same problem-- what happens is that I'm rowing along, minding my own business, but every third stroke or so I squash my testicles.
What We've Got Here is a Failure to Communicate
My buddy Rob has written a sincere and excellent post over at Gheorghe the Blog about grappling with the difficulties of our times-- the thrust of it is that our current government, who are behaving like "third world banana republicans" are something of a kleptocracy, redistributing wealth to the rich, at the expense of the uninsured, the immigrants, the rule of law (especially the powers of the FBI) and the "darker, the weirder, the more foreign among us," and people of good conscience are going to have to take a stand against that behavior; I have something to report on this issue and I'm not going to do it justice so I suggest you read the articles, but several Indonesian immigrants are taking sanctuary in a church around the corner from me in Highland Park-- one of the immigrants, Harry Pangemanan, has been here since 1993 (he entered on a temporary visa) and has been involved in a project rebuilding homes devastated by Hurricane Sandy since 2012 (he won the 2018 Martin Luther King award in HP for this) and while this has been a terrible time for these people, I'm proud of the role my friends and the the community have played in the situation . . . meanwhile, while the immigrants were seeking sanctuary, someone got wind of their absence and their homes were vandalized and ransacked, and passports and money was stolen-- it's still hazy how this happened, if ICE leaked information as to where they lived, or if people saw the homes on the news (but not all of them were on the news) and took action-- but there's something awful going on in this country and everyone needs to have a frank discussion about it . . . as usual, I have a couple of recommendations if you want to get deeper into this issue: The Weeds "The White Genocide Episode You've Been Waiting For" explains how some of the current immigration policy being considered offers concession for "undocumented immigrants" but there is a push to curtail legal immigration, especially to families . . . the subtext is the discussion that needs to be had: it seems the ethnic constituency of America changing too much and too rapidly for many people in the nation and there have been previous, restrictive and rather racist policies to preserve the racial constituency of America (most notably the Immigrations Acts of 1917 and 1924) so we've done this before . . . I live in central New jersey, one of the most racially and ethnically diverse places in the world, and I thought this debate was over in my area-- but the vandalism and ransacking of the homes of the immigrants seeking sanctuary obviously refute this . . . this is an issue on the purpose of America: is it a place for immigrants to come and thrive or are we building a wall and locking our doors; the interesting thing is that economists universally accept that immigration, legal or illegal, is a boon to the economy-- more workers, more jobs, more consumers, more people to pay taxes and buy property, etc. etc. a more diverse economy-- but it seems that certain white people are willing to take the hit to the economy to preserve the racial integrity of the country (or what's left of it) and if you really want to take a deep dive on this cultural divide, check out the second season of The United States of Anxiety, a podcast that does a fantastic hob tracing the roots of the current dichotomy; the climate change episode is especially informative, as it traces the evolution of conservative climate change skepticism, which did not exist twenty-five years ago when Bush Sr. announced that we would all have to band together and solve this global and existential problem, but then became a conservative bona fide once the Republicans realized it was not an environmental issue, it was a political issue . . . thinking about this stuff is going to make you angry and depressed and indignant, but we have to discuss it as a nation because there's actually a reasonable middle ground on issues like climate change policy and immigration (unlike, say, nuclear war) and if we can get beyond the rancor and the hatred and the utter disdain that people are feeling for those with different opinions, maybe we can elect some people that will hammer our some reasonable policy . . . I remain optimistic that people are not as stupid and narrow-minded as the folks representing them in our government right now.
The Irony (and the Stupidity)
After limping around for several weeks with what I thought was plantar fasciitis (self-diagnosed, of course) I finally went back to the podiatrist to get checked out and he quickly diagnosed my ailment as a sprained tendon on the inside of my ankle, just under the ball of my foot (this tendon has a fancy anatomical name, but you're not going to remember it and neither am I, so I'm not going to bother to look it up) and this is great-- he give me a prescription for an anti-inflammatory and said I'd be better in two weeks but the irony (and the stupidity) is that all the crazy stretching I was doing to alleviate my self-diagnosed plantar fasciitis was actually aggravating this sprained tendon, causing me a great deal of pain, and making me depressed and me cynical about the rest of my boring, monotonous life, sans basketball, tennis, and soccer.
Luigi Explains Capitalism For Da People!
Get ready, this is a really long one . . . I just finished A Capitalism for the People: Recapturing the Lost Genius of American Prosperity and it's one of my favorite books . . . not just because it's written by a guy named Luigi Zingales and I'm an Italian-American hailing from North Brunswick (home a da Carnivale Italiano! you gotta getta some zeppole) although Zingales' perspective, as an expatriate Italian, is essential to his critique of the current American Italian system-- he's like Tocqueville in that he can see things we take for granted . . . here are a dozen things I took away from his analysis and his solutions:
1) the thesis of the book is that the US free-market system has degenerated into crony capitalism, and Zingales uses Silvio Berlusconi as the paragon of this model; Berlusconi ran an insulated system of business and government corruption and comparisons between Berlusconi, who essentially ran Italy like his own private business, and Trump are inevitable and easy to make, so while the book was published pre-Trump, in 2012, Zingales does make the Berlusconi/Trump analogy in this episode of Conversations with Tyler . . .Trump succeeded in the real estate business, where it is more important to have strong relationships with government entities rather than creating something new in the market (and he's always relied on bankruptcy and the kindness of that system) and like Berlusconi, Trump has rewritten what is appropriate for a politician and member of the government;
2) Zingales starts with the proposition that fair markets are hard to manipulate and markets- while not perfect-- establish more efficient and accurate measure of value than say, an academic committee creating tenure requirements or statist regime doling out consumer products;
3) the problem is when large institutions, corporations, conglomerates and firms become "too big to fail" and both politicians and institutions recognize this because politicians, who aren't in office forever, would rather quell the chaos during their term-- avoid Armageddon, even if it's only a five percent chance of Armageddon-- with a bail-out, rather than be the person who lets the economy tank . . . but this doesn't allow the markets to do their job and accurately measure value;
4) he then explains how institutions that get "too big to fail" and understand this decimate the system-- he explains this with an analogy: if you play roulette yourself, you've got the same pay-out odds and vigorish whether you bet red/black or bet on a single number . . . for every hundred dollars you play, over time, you are likely to collect back $94.73-- the $5.27 is the amount the 0 and 00 extract . . . but if you pay an agent to play for you and promise him 20% of the winnings, but he doesn't have to pay anything if he loses, that agent is going to take risks and hope for a big payout . . . if he bets red with the $100 dollars, he only makes twenty bucks, but if he bets a single number, he stands to $700 . . . and if he loses, he loses nothing; so managers of funds take big risks, and the big investment banks encourage this because they know that either the lenders will lose out, as they are over-leveraged, or the taxpayers will bail the entire mess out;
5) lobbying is a monkey wrench in keeping markets fair and keeping large financial institutions and the government from becoming inexplicably intertwined-- and Zingales proposes something scary-- since the government controls trillions of dollars in subsidies and monies, the 3.5 billion spent by companies to lobby Congress and the 2.5 billion spent in political contributions may grow larger and larger, as business learns just how important it is to control the government . . . and this political climate of winner-take-all and fuck the other party isn't helping things;
6) with all this lobbying and bailing out and government/business intertwinement, we're not getting the beneficial long-term consequences of markets-- the accurate measurement of value and the benefits of competition . . . imagine that any time your kids are acting up and there's a conflict in the family, grandma and grandpa rescue the kids from any discipline . . . in the short term, these interventions lead to harmony and happiness, but in the long-term, you end up with spoiled kids and unhappy parents . . . Zingales uses another analogy to explain this analogy-- you gotta love all dese metaphors!-- he says that at the Grand Canyon, there is a sign warning people not to feed the wild animals, as if you do they lose their instincts and their ability to feed themselves . . . now the animals would love if people fed them but we need to "protect" them from the corruption of free food, for their own good . . . Zingales has seen this go down in Italy, and he sees America headed down the same road;
7) cronyism and unfair markets lead to winner-take-all scenarios, instead of healthy diversity and competition, and this is especially prevalent in the race to get into college-- while the number of people attending colleges in the US has skyrocketed, the size and amount of colleges has not . . . so there's winner-take-all competition to get admitted to the best schools and parents are spending much more time and resources on their children in order to get them in . . . this hasn't happened in Canada, where the admissions process isn't as competitive; so a tiny head-start when you are young can be very very important and wealth ensures this; Zingales uses a sports analogy-- if you allow professional teams to spend as much as possible, the riches teams will amass the best players and defeat everyone handily, which is great for one team but not particularly fun as a spectator or participant, so a salary cap-- which sounds non-competitive-- actually preserves competition . . . this is true for education and for lobbying, if money can buy success, then lots of money will be spent to ensure success and rules and social norms must be enacted to prevent this and encourage competition;
8) Zingales is certainly more conservative than me, and he's in favor of school voucher systems-- which I am not, for various reasons-- but I understand the logic of why he is in favor of the system, he brings up Finland, which has a much more rigorous method of selecting teachers-- in essence, they have to be smarter than American teachers-- and this means you're going to have to pay teachers more to attract smarter people; I do agree with him on this account-- if we could just get rid of the worst teachers, the bottom ten percent, that would help things enormously; I think it's hard to measure the difference between fairly good and good teachers, because it depends on the metric . . . some teachers are better at improving test scores, others at making kids passionate about a subject, others at letting kids learn on their own . . . but there's no question that some teachers are just terrible and probably get too much protection from the union, and it's also true that the best teachers tend to be in richer schools, so vouchers can change this balance and create a "salary cap" situation that makes things more fair and competitive for more students;
9) if you can wrap your request for subsidies and protection in a noble cause, you'll really screw up the market . . . Zingales uses student loans and Pell grants as an example-- government-backed subsidies that have helped make the price of college double, as there is more demand, space constraints at elite colleges and a high cost and difficulty in starting new institutions;
10) the SEC and other regulators have had trouble enforcing inside trading, and Zingales sees the onus of responsibility for stamping out this on business schools and alumni networks: they need to publicly shame and disavow people who participate in these practices, instead of only celebrating whoever makes the most money . . . it's tough because those are the people that donate;
11) Zingales is in favor of fewer regulations and simpler regulations-- but not the Trumpian dismantling of all regulations without a counter-balance; the way to offset the removal of regulations is with Pigouvian taxes . . . so instead of having insanely complex environmental codes, which leads to employment for lobbyists and lawyers, and costs the taxpayers money in the form of the government agency and all the market distortions caused by the big-business lobbying . . . instead, tax pollutants, tax the amount of harm a factory does, and you are much more likely to capture revenue (or curb pollution) so this is a compelling example of a conservative thinker proposing a "good" tax . . . as opposed to a bad subsidy; subsidizing ethanol enriches ethanol producers, but a tax on gas could curb driving, could lessen greenhouse gases, could capture revenue, and could incentivize the electric car industry . . . without redistributing wealth and enriching the ethanol producers for doing nothing more vital than having a noble idea . . . I'm sure no conservative thinker has made it this far in the post, but this is a really important concept which Trump and his lackeys seem to be totally ignorant;
12) while it is in a voter's best interest to remain uneducated in most political forums-- it's not worth the time and effort-- Zingales does illustrate how shame, muck-raking, and a little bit of knowledge can go a long way in affecting policy and political outcomes . . . and deep into the book, he acknowledges that some people have an interest in public affairs, or they wouldn't have read his book, which tackles a complex subject in a detailed manner . . . anyway, these ideas are really important to understand; we need to harness the power of markets in America, often by separating big business and government; as anyone involved in sports knows, making things fair and competitive means more than simply removing all the rules . . . it takes thought, creativity, flexibility, and rigor; Zingales makes a fantastic case for a market-based ethic and hopes that breaches of this, in the form of cronyism and incestuous relationships between business and the government, will someday be stigmatized the way smoking is today . . . I hope he's right.
1) the thesis of the book is that the US free-market system has degenerated into crony capitalism, and Zingales uses Silvio Berlusconi as the paragon of this model; Berlusconi ran an insulated system of business and government corruption and comparisons between Berlusconi, who essentially ran Italy like his own private business, and Trump are inevitable and easy to make, so while the book was published pre-Trump, in 2012, Zingales does make the Berlusconi/Trump analogy in this episode of Conversations with Tyler . . .Trump succeeded in the real estate business, where it is more important to have strong relationships with government entities rather than creating something new in the market (and he's always relied on bankruptcy and the kindness of that system) and like Berlusconi, Trump has rewritten what is appropriate for a politician and member of the government;
2) Zingales starts with the proposition that fair markets are hard to manipulate and markets- while not perfect-- establish more efficient and accurate measure of value than say, an academic committee creating tenure requirements or statist regime doling out consumer products;
3) the problem is when large institutions, corporations, conglomerates and firms become "too big to fail" and both politicians and institutions recognize this because politicians, who aren't in office forever, would rather quell the chaos during their term-- avoid Armageddon, even if it's only a five percent chance of Armageddon-- with a bail-out, rather than be the person who lets the economy tank . . . but this doesn't allow the markets to do their job and accurately measure value;
4) he then explains how institutions that get "too big to fail" and understand this decimate the system-- he explains this with an analogy: if you play roulette yourself, you've got the same pay-out odds and vigorish whether you bet red/black or bet on a single number . . . for every hundred dollars you play, over time, you are likely to collect back $94.73-- the $5.27 is the amount the 0 and 00 extract . . . but if you pay an agent to play for you and promise him 20% of the winnings, but he doesn't have to pay anything if he loses, that agent is going to take risks and hope for a big payout . . . if he bets red with the $100 dollars, he only makes twenty bucks, but if he bets a single number, he stands to $700 . . . and if he loses, he loses nothing; so managers of funds take big risks, and the big investment banks encourage this because they know that either the lenders will lose out, as they are over-leveraged, or the taxpayers will bail the entire mess out;
5) lobbying is a monkey wrench in keeping markets fair and keeping large financial institutions and the government from becoming inexplicably intertwined-- and Zingales proposes something scary-- since the government controls trillions of dollars in subsidies and monies, the 3.5 billion spent by companies to lobby Congress and the 2.5 billion spent in political contributions may grow larger and larger, as business learns just how important it is to control the government . . . and this political climate of winner-take-all and fuck the other party isn't helping things;
6) with all this lobbying and bailing out and government/business intertwinement, we're not getting the beneficial long-term consequences of markets-- the accurate measurement of value and the benefits of competition . . . imagine that any time your kids are acting up and there's a conflict in the family, grandma and grandpa rescue the kids from any discipline . . . in the short term, these interventions lead to harmony and happiness, but in the long-term, you end up with spoiled kids and unhappy parents . . . Zingales uses another analogy to explain this analogy-- you gotta love all dese metaphors!-- he says that at the Grand Canyon, there is a sign warning people not to feed the wild animals, as if you do they lose their instincts and their ability to feed themselves . . . now the animals would love if people fed them but we need to "protect" them from the corruption of free food, for their own good . . . Zingales has seen this go down in Italy, and he sees America headed down the same road;
7) cronyism and unfair markets lead to winner-take-all scenarios, instead of healthy diversity and competition, and this is especially prevalent in the race to get into college-- while the number of people attending colleges in the US has skyrocketed, the size and amount of colleges has not . . . so there's winner-take-all competition to get admitted to the best schools and parents are spending much more time and resources on their children in order to get them in . . . this hasn't happened in Canada, where the admissions process isn't as competitive; so a tiny head-start when you are young can be very very important and wealth ensures this; Zingales uses a sports analogy-- if you allow professional teams to spend as much as possible, the riches teams will amass the best players and defeat everyone handily, which is great for one team but not particularly fun as a spectator or participant, so a salary cap-- which sounds non-competitive-- actually preserves competition . . . this is true for education and for lobbying, if money can buy success, then lots of money will be spent to ensure success and rules and social norms must be enacted to prevent this and encourage competition;
8) Zingales is certainly more conservative than me, and he's in favor of school voucher systems-- which I am not, for various reasons-- but I understand the logic of why he is in favor of the system, he brings up Finland, which has a much more rigorous method of selecting teachers-- in essence, they have to be smarter than American teachers-- and this means you're going to have to pay teachers more to attract smarter people; I do agree with him on this account-- if we could just get rid of the worst teachers, the bottom ten percent, that would help things enormously; I think it's hard to measure the difference between fairly good and good teachers, because it depends on the metric . . . some teachers are better at improving test scores, others at making kids passionate about a subject, others at letting kids learn on their own . . . but there's no question that some teachers are just terrible and probably get too much protection from the union, and it's also true that the best teachers tend to be in richer schools, so vouchers can change this balance and create a "salary cap" situation that makes things more fair and competitive for more students;
9) if you can wrap your request for subsidies and protection in a noble cause, you'll really screw up the market . . . Zingales uses student loans and Pell grants as an example-- government-backed subsidies that have helped make the price of college double, as there is more demand, space constraints at elite colleges and a high cost and difficulty in starting new institutions;
10) the SEC and other regulators have had trouble enforcing inside trading, and Zingales sees the onus of responsibility for stamping out this on business schools and alumni networks: they need to publicly shame and disavow people who participate in these practices, instead of only celebrating whoever makes the most money . . . it's tough because those are the people that donate;
11) Zingales is in favor of fewer regulations and simpler regulations-- but not the Trumpian dismantling of all regulations without a counter-balance; the way to offset the removal of regulations is with Pigouvian taxes . . . so instead of having insanely complex environmental codes, which leads to employment for lobbyists and lawyers, and costs the taxpayers money in the form of the government agency and all the market distortions caused by the big-business lobbying . . . instead, tax pollutants, tax the amount of harm a factory does, and you are much more likely to capture revenue (or curb pollution) so this is a compelling example of a conservative thinker proposing a "good" tax . . . as opposed to a bad subsidy; subsidizing ethanol enriches ethanol producers, but a tax on gas could curb driving, could lessen greenhouse gases, could capture revenue, and could incentivize the electric car industry . . . without redistributing wealth and enriching the ethanol producers for doing nothing more vital than having a noble idea . . . I'm sure no conservative thinker has made it this far in the post, but this is a really important concept which Trump and his lackeys seem to be totally ignorant;
12) while it is in a voter's best interest to remain uneducated in most political forums-- it's not worth the time and effort-- Zingales does illustrate how shame, muck-raking, and a little bit of knowledge can go a long way in affecting policy and political outcomes . . . and deep into the book, he acknowledges that some people have an interest in public affairs, or they wouldn't have read his book, which tackles a complex subject in a detailed manner . . . anyway, these ideas are really important to understand; we need to harness the power of markets in America, often by separating big business and government; as anyone involved in sports knows, making things fair and competitive means more than simply removing all the rules . . . it takes thought, creativity, flexibility, and rigor; Zingales makes a fantastic case for a market-based ethic and hopes that breaches of this, in the form of cronyism and incestuous relationships between business and the government, will someday be stigmatized the way smoking is today . . . I hope he's right.
A Sentence Wherein Dave Preserves His Retinas
The sentence is canceled today: I used up my allotted screen time during exams.
LA Fitness: The Nexus of the Vector
My son Ian got braces this morning, and while they were being installed, I went to the gym . . . otherwise known as "the place where we all agree to get together and efficiently spread the flu."
The Test 105: Stacey's Songs #5
This week on our podcast The Test, another one of Stacey's inscrutable song quizzes: listen to the seven audio clips, identify the artists, contemplate the lyrics, and then endure the haphazard, illogical guesses that Cunningham and I make about the overarching theme . . . when you hear the answer, you'll kick yourself, as it makes perfect sense.
Dave Spends $5 Dollars on Future Human Capital
I recently showed my college writing class The Big Short-- we just finished a paper on Karen Ho's illuminating (but rather long and repetitive) essay on Wall Street culture in the aughts: "Biographies of Hegemony: The Culture of Smartness and the Recruitment and Construction of Investment Bankers" and I wanted to show them what happened to this insulated system that Karen Ho critiques-- and my son Alex saw the cover of the DVD and decided he wanted to watch it . . . I told him it was a great movie, but long and complicated, and he said, "My favorite movie is Inception, Dad, I think I can handle it" so I sweetened the deal and told him if he endured a short lecture from me before the film started-- on mortgages and subprimes loans and stocks and bonds-- and then, at the end of the film, if he could explain the systemic failure and how the financial crash of 2008 actually happened, I would give him five dollars, and-- withour irony and in the spirit of the movie, he agreed to this; Ian also watched and endured several of my financial asides, but when it was all over (and they watched the entire thing last night) Ian declined to try to explain it for five dollars (though he claimed to understand the plot) and also declined to make a sidebet on whether Alex would be able to successfully explain the origins and nature of the crash, but Alex rose to the challenge and gave me a fairly accurate portrayal of the crisis, including mortgage backed securities, CDOs, credit default swaps, fraudulent ratings, how to short the market, premiums eating into your account, the big pay-out and the bail-out . . . the only thing he had trouble with (which the movies glosses over) is the idea that the banks were unloading toxic securities they had created onto investors before they accurately marked the price, then shorting those same investments in order to attempt to balance their books -- creating a crazy conflict of interest feedback loop . . . you can learn about it in this special episode of This American Life, "Inside Job," which details the arbitrage, fraud, and corrupt strategies and tactics that Magnetar used during the crash-- and Alex was suitably annoyed with the result, a taxpayer bailout that funded the very institutions that created the crash and paid big bonuses to many of the engineers of the bubble, a bailout that so enormous that it might be incalculable and probably resulted in the election, oddly, of Donald Trump . . . because, as Jared Vennett clairvoyantly explains at the end:
In the years that followed, hundreds of bankers and rating-agency executives went to jail . . . the SEC was completely overhauled, and Congress had no choice but to break up the big banks and regulate the mortgage and derivative industries . . . just kidding! . . . banks took the money the American people gave them, and used it to pay themselves huge bonuses, and lobby the Congress to kill big reform . . . and then they blamed immigrants and poor people, and this time even teachers . . .
In the years that followed, hundreds of bankers and rating-agency executives went to jail . . . the SEC was completely overhauled, and Congress had no choice but to break up the big banks and regulate the mortgage and derivative industries . . . just kidding! . . . banks took the money the American people gave them, and used it to pay themselves huge bonuses, and lobby the Congress to kill big reform . . . and then they blamed immigrants and poor people, and this time even teachers . . .
the end of that little bait and switch speech surprised both my students and my children-- but it makes sense, as it too boring and complicated to completely understand the forces tearing apart our economy-- so it's much easier to blame the other, the barbarians at the gate and the freeloaders within; anyway, I'm proud of both my kids for making it all the way through-- Ian could have defaulted to The Walking Dead and Alex has decided he's going to read the book . . . maybe if enough youngsters understand what went wrong, they'll vote some people into office that will enact some policy to prevent this kind of thing . . . or maybe they'll blow all their savings on cryptocurrency and we'll all have another great movie to watch.
Two Hipster Recs
There are two kinds of people, those who listen to my hipster recommendations and those who don't . . . here are two for the weekend:
1) the comic book series Saga . . . here are ten reasons to read it . . . my kids love it (and so do I) but it's probably not appropriate for them;
2) the jazz trio The Bad Plus . . . if you don't like jazz with piano, give these guys a try and see if it that changes things.
1) the comic book series Saga . . . here are ten reasons to read it . . . my kids love it (and so do I) but it's probably not appropriate for them;
2) the jazz trio The Bad Plus . . . if you don't like jazz with piano, give these guys a try and see if it that changes things.
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