Sunday, July 30, 2006

Robin Hood, reversed!

Are your tax dollars being funneled into WalMart's coffers through numerous subsidies? So claims a 2004 study, "Shopping for Subsidies: How Wal-Mart uses taxpayer money to finance its never-ending growth", at the Good Jobs First website. The subsidies granted to Wal-Mart take many different forms, but the following are the most common:
  • Free or reduced-price land.
  • Infrastructure assistance.
  • Tax increment financing.
  • Property tax breaks.
  • State corporate income tax credits.
  • Sales tax rebates.
  • Enterprise zone (and other zone) status.
  • Job training and worker recruitment funds.
  • Tax-exempt bond financing.
  • General grants.
This is a very interesting forced redistribution of wealth by government.

Saturday, July 29, 2006

Selling water..

If you believe in homeopathy, you ought to read this wikipedia entry. Excerpt:
... The therapeutic potency of a remedy can be increased by serial dilution of the drug, combined with succussion or vigorous shaking. ... Homeopathic remedies of a high "potency" contain, with overwhelming probability, only water. Practitioners of homeopathy believe that this water retains some 'essential property' of one of the substances that it has contacted in the past. However, water will have been in contact with millions of different substances in its history. According to this molecular paradigm, any glass of water must be regarded as an extreme dilution of almost any agent you care to mention. Thus, critics argue that by drinking water one receives homeopathic treatment for every imaginable condition.
Hmm. It seems that if one drinks the mythical 8 glasses of water a day, he would be very fit.

Thursday, July 27, 2006

Startups killed the research labs

Excerpts from an article that describes why having an industrial research lab is now a white elephant, and no longer a matter of corporate prestige.
The more agile start-ups played an important structural role in making pure research careers less attractive. It's not that everyone was suddenly lured away from doing science by the promise of instant wealth. The competitive pressure that start-ups and new industries put on established businesses ultimately combined with trust-busting, structural changes in the economy, social shifts, and an array of other factors to turn expensive prestige items like research labs into unaffordable luxuries. Thus it stands that to one extent or another, all of the aforementioned labs have been downsized and/or transformed over the years into places where research programs must now yield commercial fruit.

Sunday, July 23, 2006

Confidence and predictions

Epistemic arrogance describes "the difference between what people think they know and what they actually know." Listen to this and related issues in The Scandal Of Prediction, a talk by Nassim Nicholas Taleb, the author of Fooled By Randomness. He is an applied statistician, essayist, and mathematical trader. He is interested in the epistemology of randomness and the multidisciplinary problems of uncertainty and knowledge, particularly in the large-impact, hard-to-predict rare events ("Black Swans").

The Instant information phenomenon

Easy availability of online sources of information and excessive reliance on them is akin to putting on "blinders". Here is an interesting excerpt from Hoover's Vision:
One of the great risks of the Internet Age is the fact that we can do our research with surgical precision. Online service providers offer customised services -- such as a newspaper personalized to cover only your hobbies, your sports, your stocks, your news. But how did we ever discover our hobbies, our sports, our stocks, and our interests, except by stumbling upon them? We did not know to look for them when we first found them. How much have we discovered by browsing an old-fashioned ink-on-paper newspaper and glimpsing a headline about some subject we had never heard of?
And that is exactly why an hour at a real honest-to-goodness bookstore is much more satisfying than an hour at your local neighbourhood chain store.

Point to ponder: What are search engines doing to this problem?

Wednesday, July 19, 2006

Are you an enemy of the environment?

If you own land with a ditch in it and you try to develop the land, you may very well be considered a criminal, an environment destroyer to be specific, and sent to many years in prison.

The alternative is to fight the government for a decade or more, all the way to the Supreme Court. That's what this guy Ropanos had to do. Will such mad adherence to the letter of the law, sticking to inane rules ever stop?

Saturday, July 15, 2006


Live in New York City once, but leave before it makes you hard. Live in Northern California once, but leave before it makes you soft.
--Mary Schmich, in "Wear sunscreen.", 1997.

Wednesday, July 12, 2006

On how children are brought up

Read this article for an interesting perspective on how lopsided state-sponsored incentive systems result in children being brought up "improperly", without strong family ties. This could almost be another chapter in Freakonomics.

English is tough stuff.

Dearest creature in creation,
Study English pronunciation.
I will teach you in my verse
Sounds like corpse, corps, horse, and worse.
-- Thus spake an Anonymous English teacher. Go read the rest, aloud.

Saturday, July 08, 2006

Management as a leak-proof abstraction

Joel Spolsky has an interesting article, The Development Abstraction Layer, on the relative roles of programmers and management in a software firm. Note the bits below about overhead and outsourcing:

A programmer is most productive with a quiet private office, a great computer, unlimited beverages, an ambient temperature between 68 and 72 degrees (F), no glare on the screen, a chair that's so comfortable you don't feel it, an administrator that brings them their mail and orders manuals and books, a system administrator who makes the Internet as available as oxygen, a tester to find the bugs they just can't see, a graphic designer to make their screens beautiful, a team of marketing people to make the masses want their products, a team of sales people to make sure the masses can get these products, some patient tech support saints who help customers get the product working and help the programmers understand what problems are generating the tech support calls, and about a dozen other support and administrative functions which, in a typical company, add up to about 80% of the payroll. It is not a coincidence that the Roman army had a ratio of four servants for every soldier. This was not decadence. Modern armies probably run 7:1. (Here's something Pradeep Singh taught me today: if only 20% of your staff is programmers, and you can save 50% on salary by outsourcing programmers to India, well, how much of a competitive advantage are you really going to get out of that 10% savings?)

Management's primary responsibility to create the illusion that a software company can be run by writing code, because that's what programmers do. And while it would be great to have programmers who are also great at sales, graphic design, system administration, and cooking, it's unrealistic. Like teaching a pig to sing, it wastes your time and it annoys the pig.

Friday, July 07, 2006

The sale of Manhattan in 1626

... since 1803 the heartland of America has appreciated at an average annual rate of 5.5 percent per year, whereas since 1626 Manhattan has appreciated at an average annual rate of ... 5.3 percent. Conclusion: that dimbulb Minuit may have paid too much! [C]ompared to other historic U.S. land scams, Manhattan may not have been the steal everyone thinks.
--Cecil Adams, "How much would the $24 paid for Manhattan be worth in today's money?"

Sunday, July 02, 2006

Video Review: The Money Masters

How do private banks create money?

Focusing on the majority of the US money supply, the method (Fractional Reserve Banking) is as follows:

The Federal Reserve Notes and equivalent Federal Reserve Deposits (mentioned above) are deposited in local banks or to their credit at one of the 12 Fed banks. These funds serve as the base of bank loans, which require a 10% reserve. For example, if $1,000,000 of Federal Reserve notes or Fed deposits are entered on the books with the Fed to the credit of a bank (usually the bank of the person or company which just sold the Fed a Treasury bond/bill or note), that bank may loan all of that money out (at interest), except for 10% which is kept as its reserve. Thus $900,000 in this example may be loaned out by that bank.

In the usual case, the borrower of the $900,000 will not, of course, keep the money under the mattress, rather, it is deposited either in the same bank or in others. This $900,000 in new deposits may then be loaned out at interest by these banks, except for the 10% reserve. Thus $810,000 is loaned out a second time ($90,000 of the $900,000 being retained as reserves).

The newly loaned $810,000 is then deposited in these or other banks, allowing them to lend out $729,000 a third time (retaining 10% = $81,000 as reserves), and so on. This process gets repeated over and over, each time the lending bank(s) retains 10%. It takes a series of 66 loans to reduce the funds available for relending to less than $1,000 by retention of 10% each time as bank reserves. In actual practice, due to numerous exceptions to the 10% reserve requirement, banks may lend the money even more times, resulting in even more money being created by them.

Thus, in our example, an original purchase by the Fed of $1,000,000 in Treasury bonds on the open market, by a series of deposits and loans in one or more banks, results in an expansion of the US money supply (via bank accounts simply created as loans by the lending banks) by a factor of 10x. After the process is completed, the total money in the US economy has been expanded by ten million dollars ($10,000,000), in this example. The Fed got to create 10% of this total, and private banks the other 90%, to lend at interest. In each individual bond purchase by the Fed, not just one bank profits from this scheme, rather the banking system as a whole does. However, in practice, the 4 largest international banks get roughly 80% of the profit, leaving the crumbs (still million$) to the smaller banks in your community.

What did the banks do to obtain this right to lend, relend, and relend again and again the same money (less 10% reserved each time)? Nothing, except lobby and mislead the public, the majority of Congress and President Wilson to think they were supporting legislation to reform banking to a more just form under the Federal Reserve Act of 1913. They continue to hide, obfuscate and mislead the public, to the same purpose, using media they purchased for this purpose, and corrupting the political system in the process.

This critically important piece of legislation – the Federal Reserve Act of 1913 - had to be disguised to accomplish the bankers' scheme, and so it was. That story is contained in the video/DVD, The Money Masters: How International Bankers Gained Control of America.