Wednesday, February 25, 2015

voluntold - the solution?

The Bureau of Labor Statistics (the good folks who bring us the unemployment rate) also publish statistics about volunteerism in the country. The most recent report is here:

http://www.bls.gov/news.release/pdf/volun.pdf

They slice and dice the numbers a bunch of different ways - race (whites volunteer the most), education (people with a college degree volunteer more), employment status (employed people volunteer more), marital status (married people volunteer more), and age.

Now age was the one that I found the most surprising. I was completely unsurprised that 16-24 year olds volunteered very little. Typically at that age you don't have much in the way of resources or skills to offer - in other words, you're kind of useless. But that's also a time when you should be investing in your human capital so that you won't always be useless. I'm willing to give those folks a by. The age group I was most surprised by was the over 64 group. After the kids, the AARP set were the least likely to volunteer. This despite the fact that most of them are retired and collecting government pensions and medical care.



Percent Volunteering
16 to 24 years
21.9
25 to 34 years
22.3
35 to 44 years
32.2
45 to 54 years
30.3
55 to 64 years
27.2
65 years +
23.6

Volunteering peaks as you hit middle age, probably because people have kids in school at that point and they are doing a lot of volunteering with the school or with sports. After that it wanes.

As we see our society gray, I think we need to start thinking about the ethic behind these numbers. Social Security and Medicare are eating up most of our Federal government's budget. Young people are paying for those benefits. Remember - there is no account at Social Security with your name on it. Call it what you will, these are Ponzi schemes. The benefits are paid for by today's workers. The money current retirees "saved" in the form of payroll taxes for these programs flowed back out the government's coffers long ago. Since that is true, if we are going to continue to funnel the earnings from (a shrinking population of) young people to (a growing population of) older retirees, it is time that we see a reverse in this volunteerism percentage.

When I was in the Army we were very often told we were volunteering to do some unpleasant task, in the same way the Godfather would ask you for a favor. The favor was an order, much like volunteering for a task was in the Army. We had a phrase for that kind of "volunteering" - we would say you had been "voluntold."

I'm not suggesting that we start drafting able-bodied retirees from the beaches of Florida, but we need a cultural shift. If the able-bodied elderly are going to continue to take economic resources from the younger generation, they are going to need to start needing to trade some of their time (which they have ample amounts of) in the form of community service. That community service would be especially valuable in providing services to young people, especially children. It would also be especially valuable in health care settings, where the elderly will be spending a lot of time anyway. Or assisting in assisted living. Meals on wheels. Driving some of their peers to appointments. The list goes on.

I don't actually suggest mandating volunteerism for the elderly in exchange for their SS and Medicare checks, but we need to develop a social norm where retirement is not going to Bingo and the beach. It is a time to take all the human capital you have gathered and use it in service of the community. I think we need to start making that a cultural norm. Because there is a real issue of generational fairness. The Boomer generation is too big to do nothing in retirement except consume.

If there isn't a cultural shift in volunteerism, there is likely to be a backlash. And most likely it will hit Gen X, my generation.

Tuesday, February 24, 2015

FDA nanny/patsy

The FDA blocked 23andme from marketing home genetic tests to consumers last year. The company had developed genetic screens that provided consumers with the odds of developing a variety of diseases that are based on the consumer's own genetics.

The test is non-invasive and basically involved spitting in a cup.

Now the FDA is announcing that they are going to allow the company to start marketing one of their tests (for Bloom Syndrom). They have lowered the classification of home genetic tests, but they are still requiring significant hurdles for companies to market these services.

This policy is absurd and the President should stop the FDA (a simple executive order would do it). Or, if the President fails to act, then Congress should.

This is a noninvasive test. Taking the test cannot possible harm the consumer. If the consumer misunderstands the test results, this is a problem for the consumer, and ultimately the company. The company has no incentive to provide inaccurate or difficult to interpret test results. The company has already successfully demonstrated to the FDA that the test is non-invasive, the procedures are easy to follow, and the results are relatively easy to interpret by a lay person. But the company shouldn't have to do anything beyond show that the administration of the test is non-invasive and presents no risk to the patient. Once that is established, the company should be able to market the test without interference from the FDA. If the company is producing a fraudulent test, consumers should form a class action law suit and sue the company into bankruptcy.

The FDA is preventing citizens from accessing technology which we have a right to access on the off-hand chance that some consumers will misunderstand the results and harm themselves. It is in this sense that the FDA is a nanny.

I believe the FDA in this case is also a patsy. It is preventing this inexpensive technology from disrupting the very expensive genetics testing and counseling portion of the medical industry.

The fact of the matter is, this kind of regulation stands in the way of meaningful health care innovation that could create real changes in health delivery. The evolution of wearables and swallowables and whatever else is coming down the pipeline along with big data applications stands to change how we think about health, and how we interface with the health care system. We need the FDA to get out of the way and stop being a rear-guard for the the medical establishment.

The future of medicine is not doctors talking down to patients, and patients obediently following orders with no understanding of what they are doing or why. That is a fiction from a time gone by. If we want health care to be affordable, we need to shift some of that responsibility from the medical establishment to the patient.

We need to go back to a standard where the FDA ruled on whether the product was directly dangerous to the patient, and if it was not, the company should be able to market the product. Let consumers take companies making fraudulent claims to court. We don't need the government to be our nanny, and we certainly don't need it to be a patsy for particular interests.

The FDA needs to be reigned in.




Friday, February 13, 2015

a trip to Walden Pond

If you know me, you probably know that Henry David Thoreau is one of my all-time intellectual heroes. Today I finally had the opportunity to visit Walden pond, and visit the sight where he built his cabin.


Walden in the winter is beautiful. And wicked cold. It was six degrees (Fahrenheit) and windy. Luckily I was prepared - ski pants, down jacket, hat, gloves, heavy boots. I had my snowshoes in the car, but for some reason I decided not to get them out. I found myself wishing I had.


It was a crisp, bright winter day. The snow was powder, but it had been tramped down enough that I didn't have too much trouble making my way around.



The only point where I actually saw the water was right by the boat launch.



Here is the trail up to the cabin sight.


On one level, it's nothing but a space in the woods. A place where a house was, and not even much of a house, and not even for that long.

I had such a mix of emotions being there. I felt foolish for not having made this pilgrimage before now, and foolish for having done it at all. Thoreau would have been the first to point out that each generation needs to find its own way. It was in fact one of the things he was rebelling against. And yet here I was, filled with the thrill of visiting the dusty bones of history. Still, I love Walden. I couldn't help but want to read a few of my favorite passages while I was there. 



(in case embed fails: http://youtu.be/0BqrG2KLKDA )

The thing that I kept thinking about was his comment about the trails around Walden Pond he had made.

I left the woods for as good a reason as I went there. Perhaps it seemed to me that I had several more lives to live, and could not spare any more time for that one. It is remarkable how easily and insensibly we fall into a particular route, and make a beaten track for ourselves. I had not lived there a week before my feet wore a path from my door to the pond-side; and though it is Eve or six years since I trod it, it is still quite distinct. It is true, I fear, that others may have fallen into it, and so helped to keep it open. The surface of the earth is soft and impressible by the feet of men; and so with the paths which the mind travels. How worn and dusty, then, must be the Highways of the world, how deep the ruts of tradition and conformity! I did not wish to take a cabin passage, but rather to go before the mast and on the deck of the world, for there I could best see the moonlight amid the mountains. I do not wish to go below now.
I was literally walking in the same paths he had taken today. His own footsteps are gone, of course, but I stood in the same place he did, nearly 200 years ago. I looked at this hillock and saw the sun approaching noon the same way he probably did every day.

By repeating his lines, by following his path, do I betray the very message he was trying to share? I think Thoreau was a man and had the same weaknesses of vanity as any of us. But surely he must have some nagging disapproval if he is still out there somewhere. I'm glad you liked my stuff, he might be saying, but what have you done of your own? Where have you struck out to push the boundaries of life? How have you sucked the marrow?

Wednesday, February 11, 2015

equities fully recovered, and then some?

(in case embed fails: http://research.stlouisfed.org/fred2/graph/?g=10sf)

FRED has just started carrying all the Russel Indices, so I was browsing through them and thought I'd share this one. The Russel 3000 is an index of
the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market. The Russell 3000® Index is constructed to provide a comprehensive, unbiased and stable barometer of the broad market and is completely reconstituted annually to ensure new and growing equities are reflected.
I chose this time range because it goes back to the internet bubble of the late 90's. It's interesting to see just how much higher we've climbed compared to the bubble of the 90's and the housing bubble.

I don't pretend to have any insight about what is going to happen next. But these returns aren't astronomical, especially if you calculate the returns peak to peak.

Had you invested in August of 2000, your total return to date would be 106%. Pretty awesome sounding until you realize that is a 5% annualized return.

Had you invested at the last peak in October of 2007, you would have earned a total return of 59%, which translates into a 6.5% annualized return.

As usual, it all depends on timing. The stock market is fundamentally unpredictable, and it does not move in a smooth manner. Investing in equities is a long term decision.


Wednesday, February 4, 2015

5/52: Guts

This week's Project 52 theme is "guts".


Thinking about how to address this topic, I started thinking about the meaning of the word, and how I use it.


Guts - associated with courage, bravery, daring, spirit, heart, spine, mettle, pluck, willpower, backbone, etc.


As in "That took guts".


I get that these all loosely mean the same thing. They all refer to doing something that might require overcoming fear. One doesn't say, "That took guts" when referring to a trip to the hair salon. Guts I usually associate with some sort of physical act.


I'd like to think courage means something a little more. One can have guts, one can be brave, one can have willpower, and use it to do amoral or immoral things. Bungee jumping takes guts, but is that the same thing as courage? It seems to me that we over use the word "courage", much like we overuse the word "hero", and that's probably no surprise, since I think the two go together.


(like this example - the newspaper calling the guy who shoveled the snow off of the finish line for the Boston Marathon a "hero." It's a nice gesture, but hardly heroic. http://www.bdcwire.com/who-shoveled-the-marathon-finish-line/ )


Courage to me implies moral courage. Guts, even bravery, imply overcoming fear. But bad people can overcome fear. Criminals can overcome fear when they rob a bank, for example. That doesn't make them "courageous" (or heroes). It takes guts to commit many crimes, but would you call that courage? Or something else?


There are a lot of men with guts rotting in prison. And that's where they belong.

Saturday, January 31, 2015

the good of Clinton v. Bush in 2016

I'm deeply troubled by the likelihood that our leading political parties will trot out their nobility once again in 2016. I dislike both Bush and Clinton. But more importantly, I despise the fact that free Americans are willingly embracing the yoke of subjugation.

But reflecting on this impending political disaster this morning, I think I may see a potential bright spot. It should rouse to action people who share my distaste for servitude to the political class. Perhaps this shameful outcome will finally bring forth a libertarian (small "L") revolution, and a break with the trend we have been rolling mindlessly along.

Generation X was too small, and therefore completely swamped by the political power of the Boomer generation. But Generation Y, a.k.a., the Millenials, is not. And from what I see, they may be a more liberty-minded generation than any in recent history. At least they are young enough to still not be afraid to get off the government teat. They will have to be to save this country from the big government doom we are heading toward.

So maybe there is a silver lining in this cloud of political failure. Perhaps enough Millenials will throw up their hands in disgust with the reigning powers and align with liberty.

Friday, January 30, 2015

the 2015 Budget of the Federal Government

I realized I hadn't posted about this year's Federal budget. It's now available at http://www.whitehouse.gov/sites/default/files/omb/budget/fy2015/assets/budget.pdf

I'll say it again, I think it's very cool that our government is as transparent as it is. But like Jonathan Gruber said, they really count on the "stupidity of the American voter".

Once again, the United States federal government is best characterized as a well armed insurance agency.

$606B   Defense (16%)                                  
$896B   Social Security  (24%)
$529B   Medicare (14%)
$331B   Medicaid (9%)
$659B   Other Mandatory Programs (18%)
$251B   Interest (7%)
$539B   Everything else (14%)

$3,811B Grand Total

SS+Medicare+Medicaid = $1,756B, or 46% of the budget

What's in the "other mandatory"? Veterans Administration, military pensions, government civilian pensions, unemployment, food stamps, welfare, etc. Stuff that Congress passed laws mandating that recurs unless they change the law.

Everything else includes education, transportation (roads, bridges, infrastructure), energy, the FBI, Department of State, etc.

(all of the above data comes from table S-4)