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)


Tuesday, January 27, 2015

still life with pizza and iPad



I have watched more television since I left Texas than I probably have in the last five years combined. I've been binging on HBO's Oz, a television series about life in a fictional prison. I watch an episode or two every day, depending on my schedule. Usually one episode while I am walking on the treadmill (still trying to recover from the plantar fasciitis), and maybe one more around bed time.  It's good television. Close to The Wire in quality. It's a guilty pleasure. I could be listening to podcasts or an audio book, but instead I'm veg'ing out with my iPad.


While there is a lot of change in my life right now, it also feels quite still. Not having the normal bustle of living with my teenage kids, things seem to have a split feeling to them - of rushing and stress, and of complete emptiness.


I am in the process of a professional reinvention of myself - no longer a soldier, no longer a Medical Service Corps officer - now a tenure track newbie whose research stream needs to be rethought and redirected - I feel a bit that I am operating without a safety net. It's a good way to grow, of course. If you don't feel a little stress, a little uncertainty, then chances are you aren't pushing yourself.


I'm alone in the house for a couple of days, an unusual experience for someone who has been raising a family for a couple of decades. I binged a bit on food, as well, the other day, making a meatball pizza just for myself, then following it up with some Ben and Jerry's. Food is an excellent companion. Like most vices.


Still life with pizza and iPad. Those are the still parts of my life. Those are the parts I am using to slow down some of the faster moving parts.

4/52: winter




I woke up this morning to my first real winter storm in New England in many years.


I was saying to one of my new colleagues how much I am enjoying being back in winter again. I have to confess, I felt a little trepidation coming here in January. I haven't lived through a real winter in many years. But so far, I find the experience exhilarating. Winter was the missing season, all the years I lived in Texas. San Antonio goes straight from fall to spring, with a few cold nights one might call "winter". But nothing significant happens, and then the trees bud and the flowers begin to emerge. But here, everyday the landscape is transformed. The snow comes and goes. The sky dumps a foot of new powder, then the days warm and the snow melts and refreezes at night and everything is coated in ice. And things look different. And then several warm days pass and the snow recedes and you see brown grass seemingly gasping for air, but only till the next storm that drops even more snow. Banks form along streets and at corners of driveways. Dirt is mixed in with white - brown and black. Until a fresh layer falls and we start again. Over and over, this is the creative energy of winter. It is a visual feast, a meal of many courses, changing as fast as the waiters can move. I especially like to look at the frozen tidal rivers here near the coast. The ice forms and then the tide goes out and the sheets of ice collapse under their own weight.


The winter has such transformative power. Nothing is what it was. 

Tuesday, January 20, 2015

3/52: Goose Bumps

This week's Project 52 theme is "goose bumps".

I'll rif on that this way: I woke up last Friday, feeling haunted. I should have been happy - my daughter was flying in later that afternoon to go back to college. I was going to be able to pick her up at the airport and spend the weekend with her before I brought her to back to her school. But instead, I woke up in something of a cold sweat, thinking about this pile of my crap. I have too much stuff with me to neatly put it away, so it's in piles.

It wasn't so much the site of this pile of my crap, as the knowledge that it was sitting there. And not even that it was physically there, but what it represented: that I was not in my own space.

As I've mentioned, I'm staying with my father while I get settled in my new job and look for a house. Kandie and the girls won't come until July, so there isn't a huge rush to get my own place. It makes economic sense to stay with my father during that time. He's very generous to let me stay with him, and I'm enjoying seeing him and his wife. It would be lonely going to a bachelor pad alone everyday.

But.

But the thing is, I woke up realizing I was bringing my child to a place that wasn't mine, where I am living a very transient life. Where nothing is really mine, and I was not really going to be able to provide for her - essentially, someone else was. 

I really didn't expect this kind of emotional reaction. It completely caught me by surprise. It's not like this was some stranger's house who had taken me in. It was my father - her grandfather. Everyone was happy to have us both there. And yet.

I joined the Army when I was in college in part to achieve personal independence. I didn't need to - my parents could have paid for my college. They were willing to do so. But I wanted to be independent. I wanted to pay my own way. Paying your own way for me has always represented a crucial right of manhood. Forget about your first drink, your first sexual encounter, getting a driver's license, any of that. Financial independence to me has always been the key. So long as you are dependent on someone else, you're not really a man. It's a central part of my identity. I pay my own way. I had children only when I could pay their way, too.

So when I woke up that morning, knowing my overflowing pile of crap was right there next to me, I had a bit of a panic attack. I felt unmanned.

Now all the logic in the world will tell you that the arrangement I have not only makes sense, it's an expression of my father's love for me and my family that he is letting me stay with him. And it totally makes sense on any rational level to do this. And I am grateful. And we're having fun spending time together.

But I was haunted the whole time my daughter was with me that weekend by this odd feeling that I was not providing for her - that I was dependent.

My daughter and I had a great visit with my father and Sally, and I took her back to school on Sunday. The feeling is passing. Now that it's back to just me, it doesn't bother me so much. I feel more like a guest than a dependent. But the experience has made me reflect on my own pridefulness. It has also made me more sympathetic to people who are genuinely forced into a position of dependence. I'm in this position by choice - in reality, I'm a guest, and I'm lucky to be one. I could be renting a place up here while I house hunt - I have the means to do so. But I have a kind and generous family that wants to help me with my new start. 

It's interesting what little thing can rip back the curtain to show us the pitiful little man working the lights and noise machines behind the show we maintain for the rest of the world.

Letting the Euro Go

I had a busy weekend, but so I'm late to the table to jot down a couple of thoughts about the Swiss central bank's action last Thursday.

It's ironic that I was just writing about how the dollar has been rising, and now the Swiss have decided to drop their peg of the Franc against the Euro. This is such a great example of monetary policy in action, it's almost like the Swiss were trying to do a favor for economics professors everywhere.

So what happened?

Although the Swiss are part of Europe, they did not join the monetary union and adopt the Euro; instead they chose to retain their own national currency, the Swiss Franc. All of the countries that surround Switzerland - Germany, France, Italy, and Austria - use the Euro. So if Swiss companies and individuals want to trade with any of their natural trading partners, they must still change money in order to do so. Therefore, changes in the exchange rate between the Franc and the Euro will impact the direction of trade.

To address the economic slow down in Europe following the global financial crisis, the European Union's European Central Bank (ECB) has been engaged in extensive quantitative easing - essentially printing more Euros to reduce interest rates in Europe with the hope that lower interest rates would stimulate the European economy (the US Fed has been doing the same thing). However, by increasing the amount of Euros in circulation, the put downward pressure on the value of the Euro vs. all other currencies - including the Franc. As I discussed previously, this would make goods produced in Euro-zone countries relatively cheaper for Swiss consumers, and Swiss goods relatively more expensive for Euro-zone consumers, causing Swiss exports to fall and Swiss imports to rise. This is good for Swiss consumers, and bad for Swiss producers.As a result, the Swiss central bank has engaged in a policy of pegging the Swiss Franc to the Euro at 1.2 Francs/Euro since 2011. This kept the relative prices between Switzerland and the Euro-zone constant. 
On Thursday, 15 January, the Swiss central bank made a sudden (and without apparent warning) decision to end the peg and let the Franc float against the Euro. 

And all hell broke loose.


I pulled the above chart from XE.com (http://www.xe.com/currencycharts/?from=EUR&to=CHF&view=1M). It shows the run up to the January 15th announcement, and the sudden and precipitous decline in value of the Euro with respect to the Franc (or you could say, the sudden rise in the value of the Franc with respect to the Euro - it all depends on how you look at it, since it's a ratio). Whereas before January 15th, you would have had to pay 1.2 Swiss Francs to buy 1 Euro, now the ratio is roughly 1 to 1, making Euros much cheaper to the Swiss, and Francs much more dear to the Euro-zone citizens. What will likely happen now is a fall in Swiss exports to the EU, and a rise in EU imports into Switzerland.

But what also happened was a lot of investors who were banking (quite literally) on the Swiss central bank maintaining the peg lost their shirts suddenly. The world of foreign exchange trading is volatile and subject to a variety of factors, government interventions being one of many.

I'm really pleased to have this example for the future when I talk about currency. It's also a great example of the Turkey Problem as described by Taleb.

Thursday, January 15, 2015

the splendor of winter




I've been engaging in a lot of rubbernecking as I drive back and forth to work because there is so much stunning landscape photography that needs to be done.


Yesterday as I was driving by this inlet again I finally had to just pull over and take this shot. All I had was my phone, so the exposure is a bit blown out. I'll have to go back with my DSLR.


Winter transforms the landscape of New England and it is truly splendid.