I've been thinking further about my concerns that 401ks may be having the perverse effect of ruining people's savings by creating bubbles in the stock market. The governmnet has designed a system where people blindly pump money into stocks and bonds week after week, whether the markets are rising, falling, or spinning in circles. I keep reading that, long term, the stock market will continue to grow. But, what if we are being encouraged to place our money in something that doesn't inherently possess the value of the dollars flowing into it?
One could argue that this was exactly what happened with the housing market. Government policy was designed to promote the altruistic goal of helping people buy houses. This was done partly through the tax code, partly through regulation, and partly through Fannie Mae purchasing loans of questionable value. The feeling was that homeownership is always a good thing, both for the individual and the community. But, the noble goal led to the creation of a bubble as people bought houses that they couldn't have afforded if the government policies hadn't been in place. This artificially boosted prices across the board, led to massive overproduction of houses, and created a collapse that has unfolded for the last five years and may take another decade to work out.
I also have to wonder if there isn't a bubble in higher education. Again, altruistic government policy has been to give everyone possible access to college through assistance with loans, grants, etc. The result has been a lot more people going to college, but it's come with the price tag of college costs rising much faster than inflation. And, while having a college degree is still preferable to not having one, it seems like a four year degree doesn't produce that much of an economic boost any more. Government policy has increased the supply of people with degrees, but the demand hasn't kept pace. In conditions like this, you would expect wages to fall... which, in fact, seems to be what's happening in the real world, though there are certainly so many complicating factors it's tough to pin the blame just on this.
Government policy also steered US farm policy to produce a lot of corn. So much corn that we had to find other uses for it than just eating it off the cob or baking cornmeal, so we used it to replace sugar in our beverages. Now, government policy is encouraging us to burn corn for fuel, and the prices of foods that have corn in them are rising.
It's thoughts like these that push me most strongly toward the libertarian camp. We need to scrap every federal legal code that encourages production or consumption of anything and find out what an actual free market looks like. It can't possibly be worse than what we have now.
Tuesday, September 27, 2011
Wednesday, September 21, 2011
Are 401ks dangerous?
For years, I've been a cheerleader for 401ks where I work. I personally have helped at least a dozen people get set up over the years. To me, it seems like a no-brainer. Our company matches the first 5% of your pay that you contribute. If an employer wants to boost my pay by 5%, it seems a little rude to say no. And, for that first 5% that I contribute, I instantly double my money. That's a pretty swell rate of return.
Due to Rick Perry calling Social Security a Ponzi scheme, I've seen a lot of proposals lately to allow workers to contribute part of their social security taxes to a 401k like savings plan that they would own. Again, this strikes me as a common sense idea. The problem with Social Security is that the government really has no mechanism for actually saving the money. By law, they use the money to buy US Savings bonds. That money instantly goes into the federal budget and gets spent. The bonds are paid back from future tax revenue. It works as long as more and more workers pay into the system to support an ever growing number of retirees. Alas, there are demographic bubbles that will soon produce a system where the number of retirees grows much faster than the number of workers.
But, is the government administered saving plan any better? Is my company's 401k? The problem that I see is that, prior to the creation of the 401k, people investing in the stock market were mainly investing thier own money. They were buying stocks because they thought the price was attractive, and they were careful because they alone carried the risk.
But, with 401ks, every week millions of people turn their money over to financial institutions who buy stocks for them. They can't simply sit on the money until a good deal comes along. Week after week, they must go out and purchase stocks. And, if they pick wrong, perhaps they get a smaller bonus, but they don't actually lose their own money.
Can our present financial woes be at least partially traced to the fact that so many of us are subscribing to a mostly blind investment? Are those enough smart enough to plan for our own retirement through these plans unwittingly helping to create market bubbles that will eventually destroy any value we've accumulated?
And if so, what can we possibly do to fix this?
Due to Rick Perry calling Social Security a Ponzi scheme, I've seen a lot of proposals lately to allow workers to contribute part of their social security taxes to a 401k like savings plan that they would own. Again, this strikes me as a common sense idea. The problem with Social Security is that the government really has no mechanism for actually saving the money. By law, they use the money to buy US Savings bonds. That money instantly goes into the federal budget and gets spent. The bonds are paid back from future tax revenue. It works as long as more and more workers pay into the system to support an ever growing number of retirees. Alas, there are demographic bubbles that will soon produce a system where the number of retirees grows much faster than the number of workers.
But, is the government administered saving plan any better? Is my company's 401k? The problem that I see is that, prior to the creation of the 401k, people investing in the stock market were mainly investing thier own money. They were buying stocks because they thought the price was attractive, and they were careful because they alone carried the risk.
But, with 401ks, every week millions of people turn their money over to financial institutions who buy stocks for them. They can't simply sit on the money until a good deal comes along. Week after week, they must go out and purchase stocks. And, if they pick wrong, perhaps they get a smaller bonus, but they don't actually lose their own money.
Can our present financial woes be at least partially traced to the fact that so many of us are subscribing to a mostly blind investment? Are those enough smart enough to plan for our own retirement through these plans unwittingly helping to create market bubbles that will eventually destroy any value we've accumulated?
And if so, what can we possibly do to fix this?
Sunday, September 11, 2011
Did 9-11 change the world forever?
Did 9-11 change the world forever?
Perhaps, but what day doesn't?
The terrorist attacks of 9-11 created a lot of hub bub, but I would say that the world has been far more transformed by smart phones or the collapse of the housing bubble. It's true that we spent hundreds of billions of dollars and lost thousands of lives by letting the 9-11 attacks seduce us into two open-ended wars, but how much have these wars really changed the world? Afghanistan seems to be pretty much on the verge of reverting back to the exact state we found it in. Iraq seems temporarily stable, but it was stable when we went into it. It wasn't a threat to the world in 2002, and it's not a threat to the world now. Nor, despite our best efforts, does it appear to be a beacon of democracy for countries throughout the middle east to emulate. Instead, most of the arab revolutions taking place strike me as being closer to the Iranian model: Dictators who were liked by the West are being overthrown, and the governments that rise out of them don't seem like they are going to be particularly progressive. Of course, it's still early for many of these nations. I don't pretend to guess what they will look like thirty years from now.
My suspicion is, if they are more democratic and less "jihady," it will be because of smart phones, and not because of smart bombs.
Is America safer today than it was in 2001? I suppose that an airplane would be much more difficult to hijack today. (Has there been a successful airplane hijacking anywhere in the world during the last ten years?) On the other hand, we have a lot of evidence that if a terrorist wanted to be less spectacular in his efforts, he'd have little standing in his way to purchase a gun and walk into any business in America and open fire. But, perhaps terrorists don't think we'd be overy terrified if they followed this path. Given the flash mobs that started popping up in American cities this year (including Greensboro, at a park I've walked through a hundred times), we've gotten so good as a populace at inflicting random violence on ourselves, we've set the bar too high for international terrorists to compete.
I also remember reading in 2001 that Osama bin Laden was hoping that an attack on the World Trade Center would cripple the US economy. But it turns out that banks in collusion with congress had a far more effective strategy to accomplish this.
I don't want to down play the pain of the day. A lot of people died for no good reason at all. A lot of families were shattered. It was a tragedy by any objective or subjective standard. But, I think it's a good thing that, ten years later, its receded so much from national memory. As anyone who has lost a loved one discovers, life moves on. And I think this was the ultimate defeat for Bin Laden and his ilk. We don't hold national "Bin Laden" hate days. Most of us just went back to our lives. In the long run, all his grand designs have come to nothing.
Perhaps, but what day doesn't?
The terrorist attacks of 9-11 created a lot of hub bub, but I would say that the world has been far more transformed by smart phones or the collapse of the housing bubble. It's true that we spent hundreds of billions of dollars and lost thousands of lives by letting the 9-11 attacks seduce us into two open-ended wars, but how much have these wars really changed the world? Afghanistan seems to be pretty much on the verge of reverting back to the exact state we found it in. Iraq seems temporarily stable, but it was stable when we went into it. It wasn't a threat to the world in 2002, and it's not a threat to the world now. Nor, despite our best efforts, does it appear to be a beacon of democracy for countries throughout the middle east to emulate. Instead, most of the arab revolutions taking place strike me as being closer to the Iranian model: Dictators who were liked by the West are being overthrown, and the governments that rise out of them don't seem like they are going to be particularly progressive. Of course, it's still early for many of these nations. I don't pretend to guess what they will look like thirty years from now.
My suspicion is, if they are more democratic and less "jihady," it will be because of smart phones, and not because of smart bombs.
Is America safer today than it was in 2001? I suppose that an airplane would be much more difficult to hijack today. (Has there been a successful airplane hijacking anywhere in the world during the last ten years?) On the other hand, we have a lot of evidence that if a terrorist wanted to be less spectacular in his efforts, he'd have little standing in his way to purchase a gun and walk into any business in America and open fire. But, perhaps terrorists don't think we'd be overy terrified if they followed this path. Given the flash mobs that started popping up in American cities this year (including Greensboro, at a park I've walked through a hundred times), we've gotten so good as a populace at inflicting random violence on ourselves, we've set the bar too high for international terrorists to compete.
I also remember reading in 2001 that Osama bin Laden was hoping that an attack on the World Trade Center would cripple the US economy. But it turns out that banks in collusion with congress had a far more effective strategy to accomplish this.
I don't want to down play the pain of the day. A lot of people died for no good reason at all. A lot of families were shattered. It was a tragedy by any objective or subjective standard. But, I think it's a good thing that, ten years later, its receded so much from national memory. As anyone who has lost a loved one discovers, life moves on. And I think this was the ultimate defeat for Bin Laden and his ilk. We don't hold national "Bin Laden" hate days. Most of us just went back to our lives. In the long run, all his grand designs have come to nothing.
Saturday, September 03, 2011
Are there holes in the theory of evolution?
A few weeks ago, GOP presidential hopeful Rick Perry referred to evolution as "a theory that's out there." There is nothing in his political history to indicate that he believes the theory to be accurate. Does this disqualify him from being president in my eyes? Probably not. Unlike, say, global warming, a politician's thoughts on evolution play a fairly trivial role in shaping political policy. There may be a few decisions around the margins about funding some vaccine or another, or permitting genetically modified crops, where it would be nice to have a president who has a firm grasp on the latest biology. Aside from this it seems like there isn't a lot of damage to be done. I'd vote for a candidate who believed life was created by the Flying Spaghetti Monster if they could show me a plausible tax policy that would address this nations long term economic problems.
However, some on the right are apparently worried that Perry's views might be too much for a majority of voters. In response, right wing pundit Ann Coulter has taken the interesting approach of writing two columns lately attempting to prove that the theory of evolution has gaping holes in it. Worse, it is treated as gospel by an unthinking media, and never debated, so that the truth can come out showing that scientific facts actually disprove evolution and support intelligent design.
I thought I'd address a few of her points:
1. There's a media conspiracy not to question evolution:
First, I don't think there is such a thing as "media conspiracy" in the modern age. If you google "holes in evolution" you get 58 MILLION hits! It's being debated and challenged all the time. If none of the challenges gain traction, it's because none of them do as nice a job of explaining the biological evidence around us. But it's crazy to say that the challenges are hidden or supressed when anyone with a smartphone is ten seconds away from reading about the subject. Perhaps by "media" Ann means "television." Even Fox News doesn't run nightly debates on the topic the way they do about, say, global warming. But, global warming is a topic where getting the answer and the policy reactions right could decide the futures of whole nations. Under react to a genuine problem, and we might give our grand children a very ugly future. Over react to a phantom problem, and we might give our grand children a very ugly future. It's a high stakes debate with serious consequences.
Evolution, not so much. Let's pretend that, tomorrow morning, every biology professor in the world woke up and suddenly decreed that, oops, they've been wrong, and intelligent design is a better theory than natural selection. How would this affect our foreign policy? Our energy policy? Tax policy? While I advocate believing a good theory over a bad theory for purely intellectual reasons, I honestly don't think my daily life would be affected by a massive paradigm shift. It's just not worth devoting endless hours of television to the topic.
2: There are gaping holes in the fossil record. Every day, some "truth" about the fossil record is overturned by new evidence.
Well, duh. That's the thing about science. When you find evidence that you might be wrong about something, you present it, and alter your theories accordingly. You don't insist that the Piltdown Man is a genuine fossil after it's been shown to be a hoax. You don't continue to publish that chart showing similarities between embryoes of different animals once it's been proven that the truth had been twisted to fit a theory. Ann points out that the fossil record doesn't show constant, slow change, but instead shows long periods of stability followed by rapid change. Darwin believed that evolution was a slow, continuous process. But, most modern evolutionists now advocate a theory called "punctuated equilibrium." Basically, evolution slows to a crawl once organism fill the avalable niches in an stable ecosystem. But, eventually, continental plates collide creating land bridges, or an ice age sets in, or a comet smacks the earth, and the stable ecosystems go topsy turvy and explosive evolution follows as organism fill the new niches.
And, there are gaps in the fossil record. We live on a planet that is very good at erasing evidence of past life. The conditions to fossilize every creature that has ever lived simply don't exist, and never have. The picture of the past is always going to be fragmented when it comes to fossils.
However, fossils are only part of the story. A more powerful proof of evolution these days comes from genetics. Genetic trees showing links between animals we didn't believe were closely related have been overturning lineages built by examining fossils. Again, weak and wrongly interpretted evidence is readily tossed aside when better evidence comes along. This is the core of science. Can intelligent design theory point to any similar process for weeding out mistakes? If the flagellum of a given bacteria is self-evidently designed, is a nearly perfect cube of a salt cystal also evidence? Is everything designed? Even diseases and birth defects? Was Mars designed? Was Venus?
3. Intelligent design explains the evidence.
This is probably the saddest argument of all. Let us pretend for a moment that it's true. We develop some new imaging system and discover that, written on the surface of every electron with a very, very tiny magic marker are the words, "God was here." What can we conclude?
I fear the inevitable conclusion would have to be that creation really wasn't about us. The universe is filled with innumerable stars, far more stars than human beings. Our own solar system is filled with far more lifeless planets than places that support life. Our designer, it would seem, has a strong preference for quiet, dead, places. And, when he did get around to designing some life, he spent a very, very, very long time satisfied with single-celled organisms. The amount of time devoted to perfecting algae is impressive. Eventually he got around to making some jelly fish, some worms, some shell-fish. Much much later, he had the idea of crafting a spine, and introducing a new pattern of life to the world. Then, for a long time, he seemed pretty enamored with dinosaurs. But, apparently he got bored and moved on.
Only in the very tiniest sliver of geological time did he get around to creating men. For most of men's history, they were just another ape. A little more proficient at making tools than chimps, a little more complicated in social organizations than bonobos. Then, boom, in the blink of the geologic eye, these clever apes started building cities and writing books and reached a stage where they could debate whether they were the whole point of creation.
I have intelligently designed many books. For us to feel that we are the central focus of some grand designer of the universe is like a single period on page 300 of my novel Bitterwood feeling like it's the whole reason I sat down to type up the story. If we can deduce a designer from all of creation, then we must also deduce that we are, at best, an after thought. We are significant in neither time nor space nor number in the larger picture.
If we use intelligent design to study the universe, we must conclude that we are insignificant in the eyes of a creator. An atheistic interpretation of evolution deduces that there was no creator, and that through some rather remarkable strokes of luck, we've arisen from the background noise of the universe as the first beings ever to be capable of pondering our own existence. I find the latter to be a happy view, and the former to be depressing. And yet, if someone can produce evidence for intelligent design that better explains the world than our current theories, I'll accept it. Truth isn't to be judged by whether or not it makes me feel good about myself. I will gladly accept a difficult truth over a feel-good lie any day.
However, some on the right are apparently worried that Perry's views might be too much for a majority of voters. In response, right wing pundit Ann Coulter has taken the interesting approach of writing two columns lately attempting to prove that the theory of evolution has gaping holes in it. Worse, it is treated as gospel by an unthinking media, and never debated, so that the truth can come out showing that scientific facts actually disprove evolution and support intelligent design.
I thought I'd address a few of her points:
1. There's a media conspiracy not to question evolution:
First, I don't think there is such a thing as "media conspiracy" in the modern age. If you google "holes in evolution" you get 58 MILLION hits! It's being debated and challenged all the time. If none of the challenges gain traction, it's because none of them do as nice a job of explaining the biological evidence around us. But it's crazy to say that the challenges are hidden or supressed when anyone with a smartphone is ten seconds away from reading about the subject. Perhaps by "media" Ann means "television." Even Fox News doesn't run nightly debates on the topic the way they do about, say, global warming. But, global warming is a topic where getting the answer and the policy reactions right could decide the futures of whole nations. Under react to a genuine problem, and we might give our grand children a very ugly future. Over react to a phantom problem, and we might give our grand children a very ugly future. It's a high stakes debate with serious consequences.
Evolution, not so much. Let's pretend that, tomorrow morning, every biology professor in the world woke up and suddenly decreed that, oops, they've been wrong, and intelligent design is a better theory than natural selection. How would this affect our foreign policy? Our energy policy? Tax policy? While I advocate believing a good theory over a bad theory for purely intellectual reasons, I honestly don't think my daily life would be affected by a massive paradigm shift. It's just not worth devoting endless hours of television to the topic.
2: There are gaping holes in the fossil record. Every day, some "truth" about the fossil record is overturned by new evidence.
Well, duh. That's the thing about science. When you find evidence that you might be wrong about something, you present it, and alter your theories accordingly. You don't insist that the Piltdown Man is a genuine fossil after it's been shown to be a hoax. You don't continue to publish that chart showing similarities between embryoes of different animals once it's been proven that the truth had been twisted to fit a theory. Ann points out that the fossil record doesn't show constant, slow change, but instead shows long periods of stability followed by rapid change. Darwin believed that evolution was a slow, continuous process. But, most modern evolutionists now advocate a theory called "punctuated equilibrium." Basically, evolution slows to a crawl once organism fill the avalable niches in an stable ecosystem. But, eventually, continental plates collide creating land bridges, or an ice age sets in, or a comet smacks the earth, and the stable ecosystems go topsy turvy and explosive evolution follows as organism fill the new niches.
And, there are gaps in the fossil record. We live on a planet that is very good at erasing evidence of past life. The conditions to fossilize every creature that has ever lived simply don't exist, and never have. The picture of the past is always going to be fragmented when it comes to fossils.
However, fossils are only part of the story. A more powerful proof of evolution these days comes from genetics. Genetic trees showing links between animals we didn't believe were closely related have been overturning lineages built by examining fossils. Again, weak and wrongly interpretted evidence is readily tossed aside when better evidence comes along. This is the core of science. Can intelligent design theory point to any similar process for weeding out mistakes? If the flagellum of a given bacteria is self-evidently designed, is a nearly perfect cube of a salt cystal also evidence? Is everything designed? Even diseases and birth defects? Was Mars designed? Was Venus?
3. Intelligent design explains the evidence.
This is probably the saddest argument of all. Let us pretend for a moment that it's true. We develop some new imaging system and discover that, written on the surface of every electron with a very, very tiny magic marker are the words, "God was here." What can we conclude?
I fear the inevitable conclusion would have to be that creation really wasn't about us. The universe is filled with innumerable stars, far more stars than human beings. Our own solar system is filled with far more lifeless planets than places that support life. Our designer, it would seem, has a strong preference for quiet, dead, places. And, when he did get around to designing some life, he spent a very, very, very long time satisfied with single-celled organisms. The amount of time devoted to perfecting algae is impressive. Eventually he got around to making some jelly fish, some worms, some shell-fish. Much much later, he had the idea of crafting a spine, and introducing a new pattern of life to the world. Then, for a long time, he seemed pretty enamored with dinosaurs. But, apparently he got bored and moved on.
Only in the very tiniest sliver of geological time did he get around to creating men. For most of men's history, they were just another ape. A little more proficient at making tools than chimps, a little more complicated in social organizations than bonobos. Then, boom, in the blink of the geologic eye, these clever apes started building cities and writing books and reached a stage where they could debate whether they were the whole point of creation.
I have intelligently designed many books. For us to feel that we are the central focus of some grand designer of the universe is like a single period on page 300 of my novel Bitterwood feeling like it's the whole reason I sat down to type up the story. If we can deduce a designer from all of creation, then we must also deduce that we are, at best, an after thought. We are significant in neither time nor space nor number in the larger picture.
If we use intelligent design to study the universe, we must conclude that we are insignificant in the eyes of a creator. An atheistic interpretation of evolution deduces that there was no creator, and that through some rather remarkable strokes of luck, we've arisen from the background noise of the universe as the first beings ever to be capable of pondering our own existence. I find the latter to be a happy view, and the former to be depressing. And yet, if someone can produce evidence for intelligent design that better explains the world than our current theories, I'll accept it. Truth isn't to be judged by whether or not it makes me feel good about myself. I will gladly accept a difficult truth over a feel-good lie any day.
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