Saturday, January 30, 2010

On iPads and Mao Zedong

Let me get this out of the way: I haven't touched an iPad, I don't own an iPhone, have never owned an iPod nor used iTunes, but I am writing this on a MacBook. So there.

That being said, I have more than a slight bit of disdain for Apple. It's not entirely justified, but at least I can admit this much. If you've read my scatter brained review of Up in the Air, its pretty obvious that I struggle at distancing products from reviews and hype. And so it is with the iPad, which seems like a great little toy that I might even want to buy if it were not for the fact that I'm being assaulted from all angles with undying praise for Steve Jobs and his new earth shattering product.

My number one complaint is that I don't understand how no one seems let down by this thing. We knew Apple would release a tablet, we knew it would be a giant iPhone, but seriously, didn't we expect it to to at least have maybe one feature aside from its size that isn't on the iPhone? The iPhone has been absolutely revolutionary, so I struggle to see how the iPad will match this kind of impact when it does nothing new.

My much more biased yet substantiative complaint is that the media fawn over Apple in such a way that makes Obama look like he's Joe Lieberman. So many companies have tablets in the pipeline, and so many others have been doing similar things for years but nevertheless the coming tablet revolution is accredited solely to Steve Jobs and his Jesus tablet. This device might change what an operating system looks like, and who knows, that idea could even stick. But knowing that devices take years to develop makes it pretty obvious that Apple is not some kind of isolated visionary on any of these issues.

How they have built up such a reputation is the source of my disgust, and that is: marketing, marketing, marketing. I have zero reservations in complimenting them on their genius marketing and advertising skills. I doubt they're forcing every publication in the country to sing their praises. Rather, it just comes naturally from the reputation that they have built not by producing the best most innovative, high quality devices, but by producing pretty good ones and marketing them like a snake-oil charlitan all over the world.

I really don't dislike most Apple devices that I have used, and on the contrary find them to be above average products. But no Apple users think they're using an above average product. To the ever growing and highly vocal Apple elite, they're the best products ever made and I just frankly fail to see it. They have become the Burberry of computing. High quality products to be sure but known far more for their prestige. This creates a self perpetuating positive feed back cycle that adds no technological value to the product but greatly increases perceived value.

Their secretive nature and control issues are laughable and I still think it kill the company in the long run if they don't relax a little bit and loosen the death grip that they hold over all of their proprietary software and hardware. Apple is the business incarnation of Maoist communism, with a tight top-down control struture that regulates all aspects of development, production, pricing, distribution, and sales.

This is perhaps most evident in their ridiculous agreement with AT&T which for some unknown reason they are actually going to continue with the iPad. It really makes no sense why they wouldn't relinquish a bit of control and let Verizon and T-Mobile customers reap the benefits of their hardware in the true spirit of the competitive marketplace.

Would I like to play with an iPad? Sure. I might even think about buying one a few years down the line. But someone has to be the one to say that it's just not that big of a deal. Their products just aren't that amazing. Rant complete.

Tuesday, January 26, 2010

On deficit doves

It appears that the senate has rejected Obama's proposed deficit panel. While I'm quite frankly not informed enough about this particular proposal to make any judgments, I do think it's time I dedicate a few words to the deficit hysteria that has swept the nation.

For the sake of brevity I don't want to write about the lead up to the financial crisis and what could have been done differently. I wouldn't say I've completely swallowed the Keynesian pill, but ignoring the economic policies allowed the bust to happen, our solutions were limited to letting government spending make up for private shortfalls or to do nothing and let the economy pick itself up by the boot straps over an arduously long period of time.

If your brother needed money for knee surgery, and you had a comfortable credit line that allowed you to borrow a few thousand dollars to help him out, wouldn't you take on some debt to help out? Sure he should have saved and planned ahead incase something like this happened, but given that he didn't you can either loan him money and lecture him later, or you can let him slowly recover. The latter might be better for his future integrity and to teach him a lesson, but it won't help out the other family members who rely on his being able to go to work.

Yet, the government had been carrying a balance on that proverbial credit card for many years. Even thought it makes sense to borrow in order to save the economy during a bust, the elephant in the room is asking the question: why on earth we weren't paying down debt during the boom years?

Counting myself as a relative fiscal conservative, I find it abhorrent that during the most prosperous and profitable years in known economic history, our government was still adding to its cumulative debt burden by running a yearly deficit for the entire duration of the Bush administration. I'll try to refrain from being too political here, but amidst cries about our country heading to a socialist dystopia under the Obama administration, it's at least worth noting that prior republican administration far outspent the Clinton administration which had several years of budget surplus (*gasp*) in the mid 90's.

As the current administration clearly adds to the debt burden with what will hopefully be short term economic crutches to get its brother the economy back on track, its worth asking the question to deficit doves: when exactly will we be able to worry about the debt? When the economy is growing healthily, the US is like an individual who gets a hefty raise every year, so every year he decides to carry a higher balance from month to month on his credit card to keep up with his increasingly expensive tastes. Rather than look at the credit card balance, its far more indicative to look at it interms of income and that is what debt to GDP ratio is for the government. I don't see any inherent problem in our gross level of debt rising as long as we can come to a consensus on exactly what levels of debt/GDP would be problematic.

I don't think we're at that point yet, and most mainstream economists don't either, but public choice economists will also be the first to tell you that unless we set that standard before we hit it, no government will ever admit that we are there.

You absolutely can not have your cake and eat it to, even though all politicians will try to tell you that you can. We can not fund national healthcare without adding to the deficit, it's adding another expenditure without a proportionate income. I'm okay with making this choice, but lets not delude ourselves into thinking that the government budget is anything other than revenue in the form of taxes plus expenditures in the form of social programs, wars, infrastructure, etc.

If we make the choice to care about the deficit, someone has to pay for it. Once unemploment drops back to around 9% and we can safely say our economy is back on track, someone should start paying. Even if it only lasts for a few years, we need to prove that this country has the political will and ability to pay down debt and run a surplus in the good times. That knowledge can go a long way in sending the right signals to the global marketplace about the health of the american government, economy, and dream.

Sunday, January 10, 2010

On terrorists and criminals

Defending the rights of criminals has always been a thankless job but let me give it a try. John McCain was spouting off this past week about why Umar Farouk Abdul Mutallab should be tried in a military court and stripped of all rights afforded under the constitution. Seriously John McCain, have you completely stopped paying attention to the words that are coming out of your mouth?

I'll be the first to admit that no longer referring to a 'war on terror' is purely a rhetorical move by the Obama administration, but it nevertheless pleases me greatly. There is not and never has been a unified definition of 'terror' or terrorists. It has always been a convenient word to rouse populist uproar and create a sense of us vs. them, good guys vs. bad guys, all of which makes it easier for the war mongers among us to justify a bloated defense and security budget.

Make no mistake about it, whether we call them terrorists or not isn't going to make them go away. But there is a certain dignity in being honest about the way we label our enemies; axis of evil anyone? Calling every terrible thing that happens in this world an act of terrorism and evil gets us nowhere. And trying to make an arbitrary line between who is a terrorist and who is a criminal on a case by case basis shameful.

If someone can give me a consistent black and white definition of a terrorist, I might reasonably accept the differential treatment that goes with it. Does a terrorist have to attempt to kill more than 5 people? 100? Does it have to be in the name of Islam? How about other extreme religions? Why stop at religion at all, what about political groups? Scrabble clubs?

Wars are no longer, and probably will never be again, fought in the trenches. 'Enemy combatants' and garden-variety murderers are increasingly harder to tell apart from one-another and until we can reliably do so there is no justification in holding these two groups of people to different judicial standards.

McCain and other like minded jack asses think that we can get more information out of terrorists in military courts, and that there is no opportunity for loopholes that exist in the criminal system like plea bargaining and that ever-inconvenient Bill of Rights. Why abdul-Mutallab would decide to give us more information in one context over the other is left as an open ended question. Even McCain is rightfully against torture, so we're lead to believe that he will just voluntarily spill his al-qaeda secrets for our convenience if he is tried in a military court.

I don't think our legal system is perfect, but it is a fundamental pillar of American society that is admired and respected by intelligent, compassionate individuals across the world. Giving up on our principles of justice by arbitrarily deciding to bypass this system in favor of vigilant military tribunals is a slap in the face both to the architects of our great country and to the mere idea of human rights.

Thursday, January 7, 2010

On Up In the Air

Try as I might to clear my expectations before watching a film, often times I admittedly fail miserably and my viewing experience suffers. Based solely on the director, Jason Reitman, my excitement for 'Up In the Air' was contained to say the least; while I thoroughly enjoyed 'Thank You for Smoking', my hatred for 'Juno' is far more intense. I was suprisingly able to shelf these feelings of discontent and was then left struggling to forget about the fantastic reviews this film has received. In the end, I was unable to contain myself from putting my hopes in the sky.

I don't want to delve to deeply into the plot, but the film is about a perpetual vagabond played of course by George Clooney. Rather than live the prototypical drifter life, however, he goes about his life by minimizing attachment to people places and things while maintaining a presumably lucrative white collar job that affords him the luxury of traveling First Class across the U.S. for a great majority of the year.

The plot lays a decent enough foundation for Clooney to make some magic happen, but rather than sit here and praise his performance I was lift a bit flabbergasted at how little he really had to act in order to fill what could only be described as a tailor made role. As the protagonists love interest, Vera Farmiga steals the show in terms of acting but her role is regrettably small in the grand scheme of things. I won't spoil anything, but I have no problems crushing any expectations that a reader might harbor for intriguing plot twists because they never come. Sure, there is a bit of drama throughout, but the majority of the film is a realtively trite romantic comedy that is completely uneventful.

More than anything, the tone of the film is what laid my high hopes down to rest. The overall feeling that the director crafts is so absolutely harmless and inoffensive that I am flabbergasted how viewers are able to walk out with any feeling other than mild indifference.

I'm not trying to be harsh; I actually liked the film and can think of far worse things to do with two hours of my life. Nevertheless I can't help but criticize it in the face of so much praise. In successfully making a film that no one could possibly hate, they succeeded in making a film that few could love. I don't necessarily need gripping plot twists, pertinent satire, passionate relationships, lovable/hatable characters, or probing social commentary to enjoy a film, but I do need something along those lines to enjoy a film enough to want to give it a good review.

Up In the Air is a great example of a very enjoyable, albeit stunningly mediocre, film that is unfortunately shrouded by undying praise from an endless army of critics. If you are a better person that I, and think that you can forget about the praise and view this movie in all its superficial glory, I advise you to do so. If not, don't feel bad; you're not missing out on much.

Monday, January 4, 2010

On financial regulation

I heard several good arguments today from different episodes of EconTalk. While I certainly don't claim to be an economics expert or even a well-versed amateur, I have to say that I'm a sucker for a good argument and will continue to post about well reasoned counterintuitive analyses when I see them, regardless of the topic. And as always, I'd love to hear disagreements.

Charles Calomiris spent a lot of time defending free markets, as economists tend to do. By most accounts, we seem to have avoided financial calamity and are now in the stage of thinking how to avoid this painful process from repeating itself in the future. The token democratic answer, as always, has been that we need more and more regulation over financial transactions in order to decrease systemic risk. I've heard some convincing arguments from the regulatory side, but to use this most recent financial collapse as an example of free market failure is absolutely absurd. The financial industry is without a doubt one of the most heavily regulated industries in the country and when a problem arises it is blasphemous to blame the free market system without any critical regard to the current governmental regulations.

Take a regulatory body that is relatively tangible to most people: the FDIC (Federal Deposit Insurance Corporation). This is the governmental agency, funded by tax payers, that insures deposits up to a certain point (which I believe was at around $100,000 pre-crisis and has since sky rocketed). In the days before the FDIC, if Wells-Fargo failed, you could have kissed your savings account goodbye. The concept is foreign to me, and it seems relatively cut and dry that the average consumer with low to moderately sized checking and savings accounts benefits from knowing that no matter what happens to their bank, their money is safe.

So what's the problem? Well, risk was once, and should still be, a competitive selling point for banks. Why put your money in bank A rather than bank B? Easy, a back of the envelope cost benefit analysis of the interest that the different banks are offering versus the risk of default will lead you to the bank which best suits your individual tolerance for risk and greed for return. The minute that government decided that all balances under a certain nominal value were 100% insured, the consumer stopped using risk as a shopping point, and in turn banks were forced to compete solely on monetary return. In turn, banks logically made riskier investments because the potential returns are much greater and their risk is almost entirely subsidized by you the taxpayer. Blaming the bank for making risky investments, and claiming that its eventual failure is a result of greedy bankers and unrestrained capitalism misses the point by a mile. If the market were truly free, banks would compete to minimize risk and advertise their minimal risk exposure as a selling point to consumers who would in turn determine the optimal amount of risk that they are willing to handle for a given investment.

To be fair, the FDIC is but a small part of the financial system and I'm not trying to boil down this complex financial debacle to something as simple as one regulatory policy. But if we sum enough of these backwards policies up, the financial collapse makes more and more sense. Most of you have heard that much of this crisis rested on a housing bubble, but this housing bubble was again by no means a case of free markets gone awry. Seemingly innocuous government policies, including enormous tax-credits for home owners, played a crucial role in creating an artificial demand for home ownership which lead to an unfounded inflation of housing prices that could only be sustained for so long.

I'm by no means a complete free market liberetarian (yet), but I do tend to think that letting markets decide on at least some of these matters is a far better option then government. Financial reform is in need, and some new policies might be extremely helpful, but it could all be counter productive if we don't delete/revise the harmful policies that were created with good intention, but make little economic sense in hindsight. It's a lot easier to blame the CEO of Bank of America for his greed and affluence than it is to revamp the government support system that drives companies toward such policies. That's unfortunate.

*posted on fingerprints.and.snowflakes*

Sunday, January 3, 2010

On Obama

I'm a few days late with my 'review' of the first year of the Obama administration, but there have been plenty of others to satiate that small percentage of the population that really cares about such matters. Since I started on my blog way too late in the year, here are some brief thoughts on what I missed:

1) The Nobel Peace Prize was ludicrous, and Obama knew it. Let's face it, he is a sitting, war time president, who said all along that Afghanistan was our just war. I have personally opted to plead ignorance on the entire Afghanistan issue, but I know enough about his campaign to say that I'm not surprised that we are committing more troops to this endeavor.

If it weren't for the hundreds/thousands of people risking their lives for peaceful causes around the world, I could actually accept an argument for him winning. After all, I am, without a doubt, ecstatic about compassionate and intelligent image of America that he is projecting abroad. I truthfully feel that this image, as long as it can be backed up with compassionate and intelligent policies, will benefit our national security more than all the airport scanners and abrams tanks of the world combined. This is his greatest success of the year in my mind, but what long lasting impact it will have is open to much debate.

2) With respect to national security, I must say that I find republican rants against his policies utterly despicable up to this point. Detroit was a potential tragedy that was serendipitously avoided, but was it any different from the shoe bomber incident that happened back in 2001 under the Bush administration? It was a security failure, more specifically, it was a failure of security policy that has been virtually unchanged for several years. This system is apparently in need of revision, and the burden of responsibility to do so should and will fall on the current administration. But the question of what Obama has done differently from the previous administration that would make him somehow culpable is absolutely not clear and shouldn't be marketed as such.

3) Health care has been a complete and utter debacle. But who to blame? He made it a priority issue from the start, and learned the lessons of the Clinton administration about drafting a bill in secrecy. Even though it failed before, I find myself wishing that he had opted for that route rather than leave it to our utterly inept congressional system. I'm not happy with the current bills that are supposedly 'close' to making their way to his desk, and I do feel that he could have exerted much more leadership in order to get a better bill rather than stand in the wings as a cheerleader. As it stands, he placed the burden of drafting his most ambitious policy on the senate and if they fail to do so, it will be his failure. If they succeed, they will take most of the credit. It doesn't seem like a smart play in my mind.

4) I'm terribly unhappy about his lack of concessions towards the LGBTQ community, most notably his failure to repeal Don't Ask Don't Tell and the preposterous Defense of Marriage Act. Bonus points however for finally extending hate crimes legislation to include sexual orientation. He never was an advocate for gay marriage, so it would be wrong to hold him against that standard but he still has a lot of leeway to make some serious cultural change. As someone whose current position is a living testament to a decades long equal rights struggle, I find myself amazed that he has yet to tread on any firm ground on this issue. History will undoubtedly view him favorably if and when he makes some serious headway towards equal rights legislation, even if constituents in mid-term and even the next presidential election do not. Its worth the battle.

5) He got in over his head with Guantanamo Bay closing, but it was the right thing to do. He shouldn't have set a deadline that he would be unable to meet, but finally making decisions about these people who have been in bureaucratic limbo for years is unquestionably just.

6) Taxing chinese tires, what on earth was he thinking? A pitiful, shameless give away to the special interest unions whose influence is thankfully waning in our country, but clearly not at a quick enough rate. This pointless assault on free trade upsets me perhaps more than anything else this year because there is not a single economically sound reason for it.

7) We were on the brink of financial ruin, and now we're not. Proving which policies were effective and which were give-aways to the financial sector will take some time but at this stage we should all be thankful that some combination of the policies seems to have worked. Upset about deficits? Thank Ronald Reagan.

8) Diplomatic slaps in the face from Iran and North Korea (continuing nuclear proliferation goals and muscle flexing), as well as Israel (not even so much as a blink in their grossly harmful-to-progress settlement constructions) have all been a big disappointment.

I could go on, but I'll stop... for now.

*published on fingerprints.and.snowflakes*