An American Summertime

The first best friend is the most memorable. Everything about being "best friends" is new. It's a lot of responsibility for a six year old. "You mean I'm the best friend??" you say to yourself. "I have to be the BEST?" Talk about pressure. 

I remember my first (non-dog) best friend. His name was David. We were best friends from such a young age that neither of us remember our first encounter. So we did what any reasonable 6 year olds would do: we made up a lie. We convinced ourselves that we met in the hospital just after being born. The way we figured it, if we didn't remember meeting each other, we must have met at a very young age. And when you are six, a "very young age" is, well, birth. And it sure felt like we knew each other from birth. During our summers, we were one in the same. Swim team, day camp, McDonalds, Power Wheels. You name it, we did it together.

I never had an older brother, so I adopted David's old brother. We looked up to Adam like you wouldn't believe. And all of Adam's friends. They listened to Color Me Badd, so we listened to Color Me Badd. They liked Kris Kross, so I (obviously) was Kris and David was Kross. Every summer, life was perfect. I could count on David and I being inseparable. We'd talk about our girlfriends; we'd share Cinnamon Rolls and Wild Thang Burritos; and sometimes we'd talk about Cinnmon Rolls and Wild Thangs while sharing girlfriends. These were the summers I knew for ten years. Mornings we would dread that first jump into the chilly pool, the sun still hiding behind the Sandias. An hour later, we would hop out of the pool and crowd together under the hot water spouting out the shower head. Our first couple years, the shower conversation was focused on boogers and day camp. As we got older, it was girls and the freedom of summer. Clockwork. It was dependable and it was what I knew.

---

I just found out that David committed suicide. He was 24. We fell out of touch as we became older. The excitement of high school became too much for our summertime friendship. Nobody knows how to cope with growing up, so David and I started to grow apart. High school and college came and went, but my memory of Dave always remained the same. In my eyes, he was the 7 year old who could be tickled by the wind; or maybe the 12 year old breaststroking fiend; or maybe the 15 year old Casanova. No matter which memory I choose, David encapsulates the innocence of my childhood. He is my Rosebud. When my children ask me to describe my youth, I'll describe it as "David Strickman". He's become an adjective in my life. The innocence and purity of an American summertime. 

I knew Dave when our biggest worries were getting caught sneaking out of the pool 30 minutes before the end of practice. Apparently his worries grew bigger, and I just wish he would have called me as they ballooned, so we could take each other back to those summers when our problems weren't so big. I love you David. I hope to see you again someday.

Oh bother, seriously bad math plagues our nation.

So, I'm eating lunch and watching ESPN's Linda Cohn interview Jamal Mashburn. She's asks him, "Who do you think wins Game 5 of the NBA finals?" Jamal answers that he believes the Magic will pull it out and send it back to L.A. Ms. Cohn responds with a graphic showing America's feeling about the outcome of the series. The graph reads:

Lakers in 5: 48%

Lakers in 6: 40%

Lakers in 7: 10%

Magic in 7: 2%

She then says, "Well Jamal, America disagrees with you! The majority think the Lakers will win in 5!" What's wrong with this picture? (Also, I've noticed this math deficiency has shown itself with ESPN more than once)

Insight from Arnold

The traditional paradigm has this strange dichotomy, in which market behavior is rational and self-interested but policymaker behavior is perfectly altruistic. These idealized constructs are very limiting. Note that the Left tends to complain about the limitations of the rational model of the market actor, while the Right tends to complain about the altruistic model of the policymaker.

This pisses me off...

From the Washington Post: 

Baucus, the chairman of the Senate Finance Committee and a key figure in the health debate, has publicly lectured Elmendorf, saying he has a moral duty to be "creative" and deliver the favorable budget estimates "we have to have" to win broad support.

Absolutely unbelievable. Unless the Wash Post is inappropriately splicing his quote, Baucus needs to resign. He's a raving loony. Elmendorf (Head of the CBO) has ZERO moral duty to be creative. In fact, his job description requires that he not be creative:

The Director of CBO oversees the agency's work in providing objective, insightful, timely, and clearly presented information about budgetary and economic issues.

"Objective". His post was established in order to give unbiased economic analysis of projected programs and budgetary outlooks. Baucus has lost it. As they say nowadays: FML. FMFL. 

Oh Politics....

This is from Greg Mankiw.

The bill would give the federal government power over local building codes. It requires that by 2012 codes must require that new buildings be 30 percent more efficient than they would have been under current regulations. By 2016, that figure rises to 50 percent, with increases scheduled for years after that....

According to the bill's advocates, America's buildings account for perhaps 40 percent of U.S. greenhouse emissions, and technology is available for builders to meet the targets in ways that are economical for building owners. Much of the problem is old buildings that waste huge amounts of energy, which wouldn't necessarily be touched by the new code. But it would be good if builders met these efficiency goals with new construction.

First of all, the bill is 900 words. The stimulus bill out of Congress was 1,000+ pages. How the hell is anybody supposed follow along with either of these. More importantly, I'm sure people are dedicated to the cause of Global Warming and such, and I respect their passion. But if you don't realize that this bill is a ruse for shoveling money to certain constituencies, I think you need to look a little deeper. It may not be "pork", but I'm pretty sure every piece of regulation in these is the result of lobbying to the max. 

More specifically, this "Greening of America's Buildings" is more focused on 'jump-starting the job sector' than any "green concerns". Deceptive. Politics makes me sick and it's good to see Arnold really pouncing on this recently. Here, here, and here. (oh, and here).

Remember this guy?

Matthew Lesko, the crazy guy that wears the Question Mark suit and sells books about how to take advantage of government programs? I always saw him on Saturday/Sunday morning commercials. Well, now he's back with a great video about the bailouts. I can't think of a better spokesman to poke fun at this debacle. (HT: CafeHayek)

We've turned into a nation of whiners

Read this riveting piece by Tom Brokaw commemorating the heroes of D-Day. It paints a drastic contrast between the 'American Man' and our nation today. My favorite quote:

A poor Kansas farm boy who received the Medal of Honor for his heroism at Normandy ... lit up when he described the breakfasts during basic training. "Every kind of cereal you could imagine!" he said. "And pancakes and bacon and eggs."

Don't let anybody fool you with their nostalgia for the 'good ole days' when income distribution was more 'fair' (Paulie Krugman). While income distribution was perhaps more even (mathematically speaking), the rising tide has lifted all boats. If you've been reading my blog, you know that, IMHO, one of the leading causes of our current mess is the wuss-ification of America and a generation of adults that knew only good times and had expectations that they were entitled to no form of economic pain. Mutliple Re-fi's, using your home as an ATM; spending more than you take in; etc... I'm not saying that those expectations were idiotic, b/c those adults were just living off a lifetime of experiences that taught them it was okay. To find the silver lining, I'm hoping this depression we are entering will teach my generation the power of living within our means. I know over the course of the last year, I've learned the true power of the dollar. I've been poor as dirt recently and it's a lesson that I will carry with me for the rest of my life. The experiences of the first 23 years of my life taught me little about how money is earned, but the last year and a half has been quite educational. For the sake of our future prosperity, I hope others are learning similar lessons.

The wuss-ification of our nation must stop. Life is a beautiful process but much of that beauty is found in the relative difficulties in our individual lives. The darkness in life, makes the light that much more cherished. Children need to be taught how to cope with the inequalities of life. A motto I was entrenched with early in life is that, 'Life isn't fair'. Today there seems to be a rising tide of 'When life isn't fair, go cry about it to somebody and we can fix this problem'. By doing this, we are crippling children from a young age instead of helping them build some emotional muscle. The following two videos are disturbing:

Shorting the Market

Equities have been way too high recently. Their recent climb is unsustainable. Talk all you want about the Obama confidence factor and the programs he has initiated. The underlying facts remain unchanged. Our financial institutions are hiding guhgillions of dollars of bad debt on their BSs and either they take the hit soon, or the government continues to backdoor bail them out and Treasuries climb higher and higher as people worry about inflation and sovereign solvency. One of these two factor is coming in to play SOON. I'd be heavily short the market over the next 3 months and long mattress manufacturers.

My Biggest Philosophical Struggle as a Libertarian - 六四

Today marks the 20th anniversary of the Tiananmen Square Massacre. When I was in 4th grade (1992) we were assigned a project in which we were to make a travel brochure for a particular country. I chose China. This was pre-internet days, so research consisted of encyclopedias and parents' memories. I was young and my memory is hazy, but I do remember encountering some strange story about the famous Tian An Men Square; something about violence and protests. In my brochure, I remember reporting that Tiananmen translated to 'Gate of Heavenly Peace'. I remember sharing that it was the largest public space in the world. I remember being so young that my parents thought it was not necessary to include anything about the violence that had taken place a few years earlier. Children shouldn't be burdened with those realities of the world.

The consequences of that night have lingered for the last 20 years. At some time shortly following the demonstrations, the Chinese leadership made a commitment to One-Party Rule and suppression of civil liberties, while freeing up economic activity and fueling the greatest exodus from poverty that has happened in the history of mankind. In essence, the government said, "We will not give you democracy, but we will make you rich". And, as a libertarian, this is the concept with which I struggle most. China's growth has been imperfect, but it has been overwhelming. "让一部分人先富起来". Let some people get rich first. That's what Deng Xiaoping said. The rising tide of prosperity will lift all boats. And it's true. The poorest of China's poor are unbelievably poor. But they are still significantly better off than 20 years ago. I read an interesting book comparing the paths of Russia versus China in their exit from communism. Russia pursued a path of democracy first, economic freedoms second. Russia's democracy today is in shambles and so is their economy. China pursued a path of economic freedom first, democracy later. And while democracy is nonexistent, their economy is written about fawningly daily. So while I wish China were a free country (and I know that someday it will be), I almost have to respect the contradiction it presents to my personal philosophies.

Since Blogger is blocked in China right now, none of my friends there can access this post. For some, it's part of the sacrifice you make when you move to an authoritarian country. But not all of my friends moved to China; some were born there. For them, they are denied access to the flavors of life by the Great Chinese Firewall. They are denied access to differing opinions, certain movies, art and music. And conversely, they are not allowed to share their unique flavor with the world either. Those of us outside of China are denied exposure to a vast array of amazing peoples because the government decides so. And I find that unfortunate.

I'm not even close to being done hashing out this philosophical struggle. This post hasn't clearly shaped either side of my conflict, but nonetheless, I wanted to express some thoughts on today's significance. The rest of the day will be filled with links to words, videos and sounds surrounding 6/4. There are ugly sides to everyone's history. This is one of China's. Hopefully they can grow up and deal with it someday soon.

More outsourcing

If you're in the mood to read a rant, he's your rant...

It's mind boggling

I'm outsourcing to Angus

Not the way it works....

Today's New York Times Editorial:

He should make clear that the overarching objectives are to create a profitable company that makes cars that people want to buy, and that are more fuel-efficient.

Listen NYT, your economic skills have never been stellar. So it's not like you let me down. But I'm telling you, you can EITHER make cars that people want to buy and hope they are more fuel-efficient OR you can make cars more fuel-efficient and hope people want to buy them. But you can't dictate doing both. You may get lucky and both happen, but you cannot dictate it so. This GM situation is a complete debacle and is only going to get worse. I've put off blogging about it because the possibilities for terribleness taking place are endless. Protectionism? Unwillingness to close politically favored dealerships? Unwillingness to close plants for political implications? Ford having to compete with the government?

The NYT's needs to realize: to create a profitable company, make cars that people want to buy at prices they want to pay. GM specialized in this for decades, they became terrible at it and have failed. Now you think you can step in and do a better job simply because it can't be that difficult to manage a car company. You're right. It couldn't possibly be difficult to analyze consumer wants, coordinate purchasing with manufacturing with distribution with sales with service, decide pay structure, designate R&D projects and advertise...while staying politically neutral. You're experience as government bureaucrats have given you all the skills sets necessary to successfully run an automotive behemoth.

We're screwed.

Line of the Day

Where that becomes troublesome, however, is the moment when government comes to be seen as the sole source of security. What we, the public, need to understand is that the best guarantor of security is not government. It's economic growth. While we want to believe otherwise, the cold fact is that government can't guarantee economic permanency. Nobody, and nothing, can.

Carl Schramm in today's WSJ

I'll be your first taker

From the NY Times:

Mr. CLINTON: When anybody asks me [whether the fact that the Clinton administration did nothing to stop the 1990s stock bubble is the main reason to be skeptical it would have done much to stop the housing bubble], ... I look at them and ask them, “Do you think this would have happened if we had been there? Look me in the face and say yes.” I haven’t found any takers yet.

I was youngish during his presidency and, in retrospect, I think he did a decent job (solely on the basis that he miraculously managed to balance the budget (how absurd does that prospect sound nowadays!!!)). But I'd be willing to look him in the face and say "YES!". If anything, Clinton exacerbated the problem with his housing initiatives and he would have been equally influenced by big banks, economic advisors, and rating agencies. Ex post it's always easy to prevent things. In fact, if Clinton thought the Bush policies were THAT bad, he should have either publicly sounded the alarm, or put down a big bet that would make millions/billions and then given that money away to the poor that he so desperately wants to help. I'm not trying to bash Clinton here, but I certainly don't think he would have done jack-poop to prevent this from happening.

Line of the Day

From Charles Platt (HT: Russ@CafeHayek):

If you want people to be wealthier, they have to create additional wealth.

And more:

To my mind, the real scandal is not that a large corporation doesn't pay people more. The scandal is that so many people have so little economic value.

I'm up in the Mountains of New Mexico for a few more days. Regular blogging will resume shortly.

A example of trade

People often complain that the "rich are getting richer". And yes, this is in fact true. It is very true. (Remember to focus on longer trends. In the last 1 year, the rich have probably gotten quite a bit poorer (as have the rest of us); however, in the last 100 years, the rich have gotten quite a bit richer.) Unfortunately, many people stop their thought process at this simple observation. There seems to be an assumption that "the rich have gotten richer AT THE EXPENSE of the poor". This is quite false. Remember, the economic pie is not baked a fixed size. When I get a bigger piece of the pie, you do not necessary get a smaller piece. Alex Tabarrok explained this quite eloquently in his TED speech. I'm paraphrasing, but Tabarrok recounts a story by Thomas Jefferson talking about having a candle that is lit. And when others come to us needing light, they can dip their candle into ours and they gain light and we are not darkened. Tabarrok has an addendum, though. He says, when others light their candle at ours, there's twice as much light available for everyone (end paraphrasing). So you see, the pie actually gets bigger.

But how can that be? We have the same amount of "stuff" on earth. God didn't come down yesterday and give us an addition 1 billion pounds of ore or gold or air or water because He noticed we were short. Yet somehow, we have more than we did previously. Way more. Way way more! It actually very beautiful how that economic pie gets bigger. First, an abstract example, then a concrete one:

1) You have an Xbox and I have a cure for diabetes. You are happiness neutral. I am happiness neutral. If we were to set up an equation for our economic pie, it would read: 1 Xbox + 1 cure for diabetes + happiness neutrality (0). Let's add to this scenario. I love playing video games, but have no money. You have diabetes but have no money. So, we trade. The new equation would still contain only 1 Xbox and only 1 cure for diabetes, but the happiness coefficient would grow. Not only is there more happiness, but the Xbox now inherently is worth more and (more importantly) so is the diabetes cure. The two of us have rearranged our resources to better fulfill our needs. To each of us, our slice gets bigger.

2) A concrete example: Just last month, my roommate and I were looking to clear up some room in our apartment. We decided to sell his cabinet. Our bottom price was 'come pick it up and you can have it for free'. We didn't advertise this price. We advertised $50. A buyer contacted us, offering the $50. When he came to pick up the cabinet, he had three $20 bills. I had no change. I told him that $40 was fine, don't worry about the difference. As we loaded the cabinet into his car, in a moment of honesty he bluntly said, "ya know, this is a nice cabinet, I would have gladly paid $60 or even $75 for it." Again, let's look at the math. My roommate and I would have gladly given the cabinet away for free. So, we netted an extra $40 utility. This buyer would have gladly paid $75 for the cabinet. His extra netted utility was $35. Both parties were completely justified in thinking the other a sucker. But through this trade, $75 of utility was created (our $40 + his $35).

Watch the Tabarrok TED talk. It's really cool. Remember, when trade isn't coercive and both parties are voluntarily taking part in the exchange, the economic pie gets larger.

Link Edition from New Mexico

I'm back in New Mexico for a few weeks getting doctor work done and working for my dad at his apple ranch. So the blogging will continue to be a little light until I return to the East Coast on May 20th. I'll mostly be passing along links with little if any commentary. Sorry about that. Here's a few to keep you busy:

Hedge Fund to Obama

The French and the Golden Rule

Asian Development Model in trouble?

Have fun.

Golf and Capitalism

I love golf and I love capitalism. 

HT: Tyler Cowen

Line of the Day

Freedom is important not because it makes us rich but because it makes our lives more meaningful. Not because freedom lets us prosper--it does--but because freedom lets us express all that is important about our humanity. Top down approaches deaden that humanity.

I'm Doling Out Free Information Today

This blog is coming to you today from the Portofino Hotel in Orlando, Florida. I'll post some pictures and some thoughts later, but until then, I'm offering a rude awakening to some people.

WSJ Opinion. Arthur Brooks. Here's the quote:

They are fighting a culture war of attrition with economic tools

Here's the free info: "They" are going to lose that war. As the TickerGuy is fond of saying, you can't fight the math. The rest of the article is equally impressive.