The Giant Pool of Money

I just listened to this "This American Life" episode as it was happening last Saturday while I was busy cleaning/organizing my garage. It is really, I mean really, a must listen if you care at all about the financial crisis and want to be an informed citizen. Its a second pass on an episode that played almost a year ago.

Some highlites:

1) The total amount of money in the world in fixed-income securities (in other words savings) in 2006 was $80 trillion which was more than double it was in 2000, at that time it was $36 trillion.

2) This is more than the entire world spent and earned in the entire world, a lot of money. The story of the world post 2000 was that globalization really kicked in, with off-shoring and trade, and countries like China and India and the oil producing countries started making a lot of money, and they all essentially banked it.

3) The world wasn't ready for this amount of money, money that had a lot of investors with itchy fingers looking for ways to both keep it safe and to make it grow. But there wasn't twice enough good investments in the world to absorb twice enough money in savings.

4) Allan Greenspan made a really bad situation and made it worse when he essentially kept the Fed Funds rate at 1%. To quote the transcripts of the original episode, Greenspan basically told the "Giant Pool of Money", "screw you".

As a result of this, the giant pool of money started to trend torward real estate investments as more money came into this market, they needed to find more people willing to take on mortgages on buy real estate. And that is essentially what caused the massive debilitating real estate boom.

Most of the essence of this I got from the original episode. The follow up tracked down some of the people they interviewed in the original show to see what they were doing now.

Some conclusions - many people on wall street are evil and could care less about the average person. Its not a market that cares about the average citizen. Some people are still hanging out in their homes not having made a mortgage payment in 3 or so years and have yet to be foreclosed on - since the banks are flooded.

The size of the giant pool of money now a year later? More than 80 trillion dollars. Why? Because government all around the world have poured money into the banks in hopes of trying to get the money back into the market.

So far, banks are still holding tight on the money. The primary reason we have double digit unemployment right now, is that no one is spending that money. Its being stashed away in accounts that are essentially earning no interest. There's still a lot of fear.

It seems to me that $80 trillion dollars is wayyyy too much money to have stashed away in savings. Especially considering many of those countries with high savings are countries that are in desperate need of infrastructure. The problem essentially is that the money is being held (in my view) in the hands of a very small percentage of the global population. When you have economic disparities as high as we're currently experiencing, you end up with bubbles. Too few people controlling too many assets leads to a lot of crazy swings.

In the US, its interesting that when the dot com bubble crashes and we experienced a quick recovery, it was a jobless recovery, and that recovery introduced much of this disparity (speaking off the cuff here).

If that money was spread out more evenly, you would see much stronger long term growth (albeit slower in the short run), you would see less bubble/bust cycles. How do you do that?

Invest it in infrastructure, in ways that strengthen the many: education, highways, the environment, health care. China and India have massive needs in this regard. As the general population feels greater security (Chinese population saves 50% of their income on average, so I"m told, because many don't have access to some sort of health insurance), they will invest and spend, which should also help our large trade deficit. As China and India consume more, the US will have a greater opportunity to become producers and not just consumers.

These sort of imbalances take time to correct though...

Write To Discover/Read to Discover/Facebook to Discover

Once again Paul Graham writes another provocative essay that just gets me thinking. His latest is here. He's talking about his style of writing - blunt and offensive. It was strange that he felt his writing was offensive because he never offends me? But he's offensive because he's writing to discover not to persuade and that is a big difference I guess.

Most people write to convince (do I? I I think I write to discover, but you know I probably really don't write since I put so little effort into this - I really should try harder, but when you have three kids, this is all I got).

"The reason there's a convention of being ingratiating in essays is that most are written to persuade. And as any politician could tell you, the way to persuade people is not just to baldly state the facts. You have to add a spoonful of sugar to make the medicine go down."

and

"Because I'd rather offend people needlessly than use needless words, and you have to choose one or the other.


"That's not even the worst danger. I think the goal of an essay should be to discover surprising things. That's my goal, at least. And most surprising means most different from what people currently believe. So writing to persuade and writing to discover are diametrically opposed. The more your conclusions disagree with readers' present beliefs, the more effort you'll have to expend on selling your ideas rather than having them. As you accelerate, this drag increases, till eventually you reach a point where 100% of your energy is devoted to overcoming it and you can't go any faster."

finally

"It's hard enough to overcome one's own misconceptions without having to think about how to get the resulting ideas past other people's. I worry that if I wrote to persuade, I'd start to shy away unconsciously from ideas I knew would be hard to sell. When I notice something surprising, it's usually very faint at first. There's nothing more than a slight stirring of discomfort. I don't want anything to get in the way of noticing it consciously."

The funny thing is I started to think, do I facebook to discover? No, I facebook to persuade. A few of my fb friends pretty consistently put up some provocative Glenn Beck video or some such, so when I perusing my news channels and I see something that directly or indirectly addresses something they've posted directly or indirectly, I link it. Now that's fb to persuade.

Other times, I see something that's just so simply too great and I post it, that's fbing to discover. Because sharing is discovery I think. That's why writing is such a powerful exercise. It codifies your thoughts into something concrete. You're forced to drag these vague ideas out of the recesses of your imagination and force them into the limits of the English language.

Then when you spark a fb friend's interest and get a comment that's a tad on the disagreeable side, if you're fbing to discover, you are forced to look at the argument again in a new light. Maybe you need to clarify the point a bit more - perhaps the commenter missed it. Or maybe they see the issue in a different way - differently than you understood it.

Another point about Graham's essay. If writing to discover is often offensive, is the converse true? Any writing that's offensive is writing to discover? That doesn't make sense. I find Glenn Beck's style, not so much offensive as ludicrous. But it seems like Glenn Beck is really trying hard to offend while at the same time, trying to rile up his constituency. But none of it seems to be about discovery.

His personal style doesn't seem to be of such that allows him to admit he's wrong or maybe to admit he didn't have all of the facts before he made his latest ad hominem attack.

So, Beck is writing to persuade? Definitely, but his persuasive style is pretty offensive.

At the beginning of Graham's article he describes an encounter with someone that made him think that person was a jerk. Turned out he just read the signals wrong: the man wasn't a jerk, just wasn't socially aware enough to follow social conventions., but not nerdy enough to make it obvious to him that he was not socially aware enough to follow those conventions.

So, I guess the definition of a jerk is someone who intentionally ignores social convention for the purpose of offending someone.

By the way, in case you're wondering whether I'm a jerk, someone who's just trying to discover new ideas, or a nerd who doesn't understand social conventions, or someone who's trying really hard to persuade in the nicest most pandering kind of way. The answer is probably all of the above, someone else will have to tell me which of these is the most common occurrence.

JDRF Walk For a Cure Update

A few posts ago I posted a plea to help us raise money for diabetes research. I just wanted to clear up a few points just to make sure.

I know there are many worthy causes out there and I know for many people money is tight, so it would be a wonderful thing if you have the time just to walk with us. It would be a wonderful emotional support for our daughter Lizzie if we had a nice big crowd of walkers all wearing our soon to be created "Live for Lizzie" t-shirt. And as we take pictures of the event, it would be something nice for her to look back on to see a big crowd of walkers supporting her specifically, especially as she hits discouraging times in the future and she's tempted to slacken her efforts to manage her own blood sugar.

If you can donate money, great! There are a lot of promising avenues of diabetes research in the works and it would be a wonderful life changing event for Lizzie if a cure for her condition were found. Any money you could donate would work to keep scientists and researchers employed looking for a cure.

As a reminder, the website to donate and to register as a walker are here:

http://www.walk.jdrf.org/

If you enter "Live for Lizzie" as the team name and "Arizona" as the state, you'll find currently three walkers on our team. I'm the team captain, Scott Turley (you can also look for me as a walker), but you could donate money on behalf of any of the walkers and it will go toward the team.

If you register as a walker it will ask you for a donation goal. Feel free to fill in anything you want there, but don't feel obligated to do anything extra to raise money. Don't feel obligated, but anything you were able to do would be greatly appreciated as well. But please if you plan on walking (I know some of you are out there) be sure to register so that we can get an accurate tally of the number of walkers when we get the t-shirts made.

By the way, so many people have said so many nice things about our video and have graciously passed it on to others. There are over 200 views of the video on youtube currently, so I know many people have gotten a glimpse of what we go through every single day.

Despite the challenges, Lizzie is doing wonderful and I'm sure she'll look forward to a happy and wonderful life, but there are a growing number of children who share in this struggle. So a donation to jdrf not only helps Lizzie but helps so many other children and families.

Thank you for all of your support so far and we look forward to having a successful walk this Halloween.

The details of the walk are here:

http://walk.jdrf.org/index.cfm?fuseaction=walk.walk&eventID=4903&chapterid=4010

City: Tempe, AZ
Venue: Tempe Town Lake
Date of Walk: 10/31/2009
Registration Start Time: 7:30 AM
Walk Start Time: 9:00 AM
Length of Walk: 5K
Contact Person: Ashley Benedetto
Local Chapter: Desert Southwest Chapter
Local Chapter Phone: (602)224-1800

By the way, just a reminder, the video follows:

Why We Homeschool Part II

For part I, well, that was written a long, long time ago, right here, but for this post I want to focus on curriculum because that's what got me started on this kick, right after I got married and well before it was time to make these educational decisions, I read this book and it made me ache wishing I had this kind of education I grew up.

And now my wife is following the classical approach to education at home, basically following the outline within this book.

And as we review the material together, I got excited by excerpts like this:

"Documentary filmmaker Ken Burns appeared at the National Press Club in early 1997 to plug his latest project (the life of Thomas Jefferson). Afterward, he took questions. One questioner pointed out that an astronomical percentage of high-school graduates saw no purpose in studying history and asked for a response.

Ken Burns answered: History is the study of everything that has happened until now. Unless you plan to live entirely in the present moment, the study of history is inevitable.

History, in other words, is not a subject. History is the subject. It is the record of human experience, both personal and communal. It is the story of the unfolding of human achievement in every area - science, literature, art, music, and politics. A grasp of historical facts is essential to the rest of the classical curriculum.

When you first introduce the elementary student to history, you must keep one central fact in mind: history is a story.

The logical way to tell a story is to begin (as the King said to Alice) at the beginning and go on till you come to the end. Any story makes less sense when learned in bits and pieces. If you were to tell your five year old the story of Hansel and Gretel, beginning with the house made of candy and cookies (because that's likely to be the most interesting part of the story to the child), then backing up and telling about the woodchopper's unfortunate second marriage, then skipping to the witch's demise, and then scooting backward again and relating the story of Hansel and Gretel's walk in the woods, the story isn't going to form a coherent whole in the child's mind. Even if he listens to the end, you may have lost him long before that.

History is no different. Yet it's too often taught unsystematically - as a series of unrelated bits and pieces: American history this year, ancient history the next, eighteenth-century France the year after that. Think back. By the time you graduated high school or college, you'd studied King Tut and the Trojan war and the Bronze Age; you probably learned about the end of the Athenian monarchy and the rise of the city-state; you may have been taught about the Exodus and the conquest under Joshua or the early history of Ethiopia. Chances are you studied these subjects in different years, in different units, out of different textbooks. You probably have difficulty fitting them together chronologically.

Furthermore, you probably started with American history (which is pretty near the end of the story as we know it) and then spent at least twice as much time studying American history as you did studying the rest of the world. Yes, American history is important for Americans, but this myopic division of curriculum does the Founding Fathers a disservice. Children who plunge into the study of the American Revolution with no knowledge of the classical models used by Jefferson, Washington, and their colleagues can achieve only a partial understanding of American government and ideals. And American history ought to be kept in perspective: the history curriculum covers seventy centuries; America occupies only five of them.

A common assumption found in history curricula seems to be that children can't comprehend (or be interested in) people and events distant from their own experience. So the first-grade history class is renamed Social Studies and begins with what the child knows: first, himself and his family, followed by his community, his state, and only then the rest of the world.

This intensely self-focus pattern of study encourages the student of history to relate everything he studies to himself, to measure the cultures and customs of other people against his own experience. And that's exactly what the classical education fights against - a self-absorbed, self-referential approach to knowledge. History learned this way makes our needs and wants the center of the human endeavor. This attitude is destructive at any time, but it is especially destructive in the present global civilization.

The goal of classical curriculum is multicultural in the true sense of the word: the student learns the proper place of his community, his state, and his country by seeing the broad sweep of history from its beginning and then fitting his own time and place into that great landscape. The systematic study of history in the first four years lays the foundation for the logic stage, when the student will begin to understand the relationships between historical events - between Egypt and Greece, Greece and Rome, Rome and England, England and America."

I heard on the radio recently a brief interview of the author of a book with the provocative title, Why School. The author makes the very good point that an education should be much more than preparing for a career and learning knowledge and developing skills should be much more than a means to a future high salary. And that's why I feel emphasizing history in educational pursuits is so important because they are a better person because of it.

Today in primary, our ward had a brief, really well-done and appropriate discussion on pornography with the primary children and their parents. The core of the message was to tell the children if they accidently see pornography to stop, run and talk (shut it down, run out of the room, and immediately tell a parent or a trusted adult). Funny because my kids don't really get pornography, but its an important lesson nonetheless because the issue is looming soon for them.

But the point is the woman who presented the lesson did it masterfully, like a trained professional. She is a trained kindergarten teacher, so I'm sure that helps, but she just had this masterful way of presenting a difficult subject to children in a way that was not scary and in a way they understood. How grateful am I that there are adults in my community that support us in that way.

But more than that, you could tell she was educated in a deep way and she used her talents to bless others without a monetary reward. And that's the point I guess.

The author of the book makes the excellent point that when education is too focused on career preparation, it focuses too heavily on math, science and reading and neglects other subjects like art and music. Can you imagine a someone with a highly focused technical training trying to explain the dangers of pornography to young kids? I can't.

But it's one example. And it's why I feel that the classical education curriculum is so cool. It's comprehensive and thorough. The child reads from the original sources as much as possible instead from text book summaries. The pint again is to prepare a child for life in all of its facets. I could go on, and maybe I will in later posts.

But I just felt this explanation of the history curriculum was well done.

My Thoughts on Glenn Beck

Someone asked me to respond to this video featuring Glenn Beck's attack on ACORN and by extension why the ACORN story was not reported by the mainstream media with the exception of FOX.

Here's the video:

I really am in no position to defend or even criticize ACORN. I simply know nothing about them. But this post is not about ACORN its about Glenn Beck and his style.

Pure and simple, Glenn Beck is a curmudgeon. Its a style I don't like and a big part of me is repulsed by it. Its ugly and I don't trust it. For the record, I really don't like this style from either side of the aisle.

I love political discussion, but Glenn Beck leaves no room for it. He attacks corruption, fine. So, he finds examples of it within his very narrow ideological blinders and instead of carefully crafting a story to prove his point, he just yells a lot. It riles up his followers, but it just leaves me doubting everything he says. By the way, I get the same nauseating feeling listening to folks like Michael Moore on the left.

For the record, I'm against corruption in all of its forms. I believe criminal activity should be prosecuted when found no matter what the ideology. And the advantage of the two party system is it allows each to check the power of the other.

But you have to be careful with this style of reporting.

Here's a conservative attack on Glenn Beck that resonates with me. Best quote:

"Glenn Beck is not the first to make a pleasant living for himself by reckless defamation. We have seen his kind before in American journalism and American politics, and the good news is that their careers never last long. But the bad news is that while their careers do last, such people do terrible damage."

The article details an absolutely reckless attack Beck made on Cass Sunstein.

"It’s striking that Beck never actually quotes Sunstein. Beck instead relies instead on an argument from pure assertion: Sunstein opposes animal cruelty, the Princeton philosopher Peter Singer also opposes animal cruelty, therefore Sunstein must agree with everything Peter Singer has ever said or written.

This is beyond sloppy, beyond ignorant, proceeding straight toward the deceptive."

I want to dismiss Glenn Beck out of hand. I don't want to hear from that guy, watch him, I want him out of my life for good, but people keep sending me clips...

But here's why Glenn Beck and his ilk are so dangerous:

This is from a quote from C.S. Lewis in "Mere Christianity":

"Suppose one reads a story of filthy atrocities in the paper. Then suppose that something turns up suggesting that the story might not be quite true, or not quite so bad as it was made out. Is one's first feeling, 'Thank God, even they aren't quite so bad as that,' or is it a feeling of disappointment, and even a determination to cling to the first story for the sheer pleasure of thinking your enemies are as bad as possible? If it is the second then it is, I am afraid, the first step in a process which, if followed to the end, will make us into devils. You see, one is beginning to wish that black was a little blacker. If we give that wish its head, later on we shall wish to see grey as black, and then to see white itself as black. Finally we shall insist on seeing everything -- God and our friends and ourselves included -- as bad, and not be able to stop doing it: we shall be fixed for ever in a universe of pure hatred."

Got that from my favorite libertarian blogger Megan McArdle.

I get that this happens on both sides. There are the "birthers" on the right convinced that Obama is evil just like there were the truthers on the left convinced that Bush had a role in 9/11. This tendency to assume your enemies are evil is something that deserves a lot of introspection.

I know I'm far from perfect here. Its fun to have philosophical discussions on ideology. That stuff is fun.

But when the debate descends to the level of personal attack, e.g. Bush is evil, Obama is evil, the fun ends, the debate ends. I know I'm in no position to prove someone's ethics, morals or motivation. Often I don't have access to all of the facts.

If you think Bush is evil (which I don't), then where do we go from there? No where. Same is true for Obama.

Now, the interesting thing is we want to hold our government accountable. And there is plenty of corruption, pervasive, sick corruption throughout our government. And we need journalists to do the serious investigative reporting to shine a light on the dark deeds of our politicians.

But this kind of investigative reporting is hard and expensive and from my point of view it is dying. Because if you want to report on corruption, you have to make sure you get your facts right. You need to make sure the investigation is thorough and intelligent. You want to make sure its not defamatory or wrong or ideological. It needs to be vetted carefully. Because its an enormous disservice to call good people evil. To falsely accuse someone else. Its hateful in the worst possible way.

And Glenn Beck has an enormous microphone, and as a result a powerful platform. I'm not sure he realizes how much damage he can (and has) inflicted through his recklessness.

I hope that he will eventually be marginalized once people realize he's a hack journalist. I hope that time is not far from now.

A Walk For a Cure

We are just kicking off an effort to help raise money for a cure for diabetes. Our youtube video is here:



A letter we're e-mailing friends and family is follows:

We are writing to ask for your support in a very important cause. As most of you know, our daughter, Elizabeth, was diagnosed with Type 1 Diabetes in November of last year. This October, we will be participating with thousands of other families in Juvenile Diabetes Research Foundation’s Walk to Cure Diabetes.

Since it’s founding in 1970 by parents of children with Type 1 Diabetes, JDRF has awarded more than $1.1 billion to diabetes research. More than 85 percent of JDRF’s expenditures directly support research and research-related education.

Type 1, or juvenile, diabetes, is a devastating, often deadly disease that affects millions of people—a large and growing percentage of them children.

Many people think Type 1 Diabetes can be controlled by insulin. While insulin does keep people with Type 1 Diabetes alive, it is not a cure. Aside from the daily challenges of living with Type 1 Diabetes, there are many severe, often fatal, complications caused by the disease. Diabetes is the sixth leading cause of death in the United States.

For Elizabeth, diabetes means that she must have her finger poked an average of eight times a day to check her blood glucose level, and that she must have a tiny plastic tube lodged under her skin keeping her connected to an insulin pump 24 hours a day. The pump has improved her life considerably, but it cannot prevent her from still experiencing frustrating high and low blood sugars and the accompanying symptoms of fatigue, frustration, and grogginess.

Elizabeth will never outgrow diabetes, but we have hope that JDRF will find a cure for this terrible disease within her lifetime.

Won’t you please help Elizabeth and all of the 200,000 children with diabetes by “Saying Boo to Diabetes” on October 31, 2009? There are three ways you can help:

1. The easiest way is to give a tax deductible donation via the website www.walk.jdrf.org then select Arizona as your state, and search for the “Live for Lizzie” team. Donate to the walker and fill in the information needed.
2. You can join our team, and walk with us. To join our team also go to www.walk.jdrf.org and search for “Live for Lizzie” and register as a walker. If you’d like to collect pledges in addition to walking, just forward this information to every you.
3. Send us a donation made payable to JDRF.

No donation is too small. No amount of support is too little. Your consideration is greatly appreciated.

Cameron Willingham was executed an innocent man

I recently read this very moving article about Todd Willingham who could become the first verified person in the modern American judicial system where the state who administered the execution admitted the person was innocent.

And if you read the article, there seems to be little doubt.

"In 2005, Texas established a government commission to investigate allegations of error and misconduct by forensic scientists. The first cases that are being reviewed by the commission are those of Willingham and Willis. In mid-August, the noted fire scientist Craig Beyler, who was hired by the commission, completed his investigation. In a scathing report, he concluded that investigators in the Willingham case had no scientific basis for claiming that the fire was arson, ignored evidence that contradicted their theory, had no comprehension of flashover and fire dynamics, relied on discredited folklore, and failed to eliminate potential accidental or alternative causes of the fire. He said that Vasquez’s approach seemed to deny “rational reasoning” and was more “characteristic of mystics or psychics.” What’s more, Beyler determined that the investigation violated, as he put it to me, “not only the standards of today but even of the time period.” The commission is reviewing his findings, and plans to release its own report next year. Some legal scholars believe that the commission may narrowly assess the reliability of the scientific evidence. There is a chance, however, that Texas could become the first state to acknowledge officially that, since the advent of the modern judicial system, it had carried out the “execution of a legally and factually innocent person.”"

Article is right here.

Reading the article, it lead me to some of the following conclusions:

1) State government can be both woefully inept, and ideologically blinded by their own agenda. Texas is a very scary place to be condemned to die. They seem woefully too ready to inject the needle. Those folks who feel like the federal government should push everything down to the states, really should think twice about that. The federal government has access to a much broader pool of talent with the opportunity to pull from this knowledge base to write policy that works broadly. Having a good balance between the federal and state government seems more correct to me.

2) The poor just do not have access to a fair judicial system. The state appointed defense attorneys often seem to be unreliable and incompetent.

3) Similar to 2), the deck is stacked against the poor, especially the poor with large tattoos on their biceps. An assumption was made early on of his guilt, and he was guilty because to some, he looked guilty.

4) I'm inclined, philosophically, to support the death penalty for the most serious of crimes. But realistically, I just don't think you can trust any judicial system to consistently, over the long haul be good enough not to execute an innocent person. That a lone is reason enough to completely abolish the practice.