Archive for the 'economy' Category

Recession Holding Back Education Too…

Great… not only is the recession hurting my income today but it is likely to have a much larger economic impact on education (and thus earning potential) of future generations.  It a NY Times article last week titled “Facing Deficits, Some States Cut Summer School” many schools are cutting back or closing their summer school programs to save money.  This is being done in spite of $100 billion in stimulus money being pumped into education and the Secretary of Education urging states and districts to keep their summer school programs open.

Summer school you say?  Who really really cares about summer school… unless of course you are talking about the classic 1987 movie Summer School with Marc Harmon and Kristy Alley.  The reality is that summer school can be critically important to those kids coming from low-income households.  In our most recent bout, Outliers by Malcolm Gladwell we learned that the knowledge gap between the kids from the poorest families to the richest families is almost exclusively attributed to what knowledge is gained or lost during the summer (not technology in the classroom or classroom size).  As the Times article points out, children of working parents will be at the mall or in front of the TV instead of in the classroom preparing them for the next grade level.

If Gladwell’s analysis is correct, why is it that state governments or school districts would make such a short sighted decision?  Perhaps his research hasn’t made it back to the education establishment?

Jon Stewart goes “mad” on Jim Cramer?

For those who missed The Daily Show last night it was awesome… Jon Stewart took it to Jim Cramer and CNBC on the lack of “financial reporting” on their supposed “financial news” cable network.  Not to be a spoiler… but there are some great video clips of Cramer off air.  Take 20 minutes of your day and watch this episode!

4.1M Blogs on WordPress

Holy cow!  I just read that there are 4.1 million blogs on WordPress.  We at Brokenspines are just one of 4.1M.  If a tree falls in a wood…

Not that anyone noticed, but we have addressed the “too big to fail” dilema of Fannie and Freddie on Brokenspines.  Well, as of last Sunday, it’s official – we the taxpayers of the good ol US of A are now the proud owners of Fannie Mae and Freddie Mac, like it or not.  But who is talking about it?  Obama?  McCain?  Last (and least) Bush?  Nope.  Not a peep.

The United States is very good at capital allocation – except in this situation.  Chairman Greenspan, in all his wisdom, left the housing market alone, letting market forces dictate where the capital should flow.  Alas, because they were proped up with implicit guarantees, Fannie and Freddie got too much capital – rather they lent too much.  So, instead of capital flowing to things like plant and equipment (that actually produce economic value) Fannie and Freddie allowed (in fact encouraged) capital to pile up in housing.

Anyone who owns a house knows that they’re money pits (funny movie from the 80s).  I’m about to pay $6K for a new roof (F#*$$!&*$).  Houses are not good investments.  You have to furnish, decorate, repair and maintain them.  Now Americans are looking at 25-40% depreciation in housing prices. 

It’s alarming.  But, who amongst our elected officials is talking about it?  The silence is deafening.

Conspicuous Consumerism

conspicuous-consumersm.jpgconspicuous-consumersm.jpgconspicuous-consumersm.jpgconspicuous-consumersm.jpgconspicuous-consumersm.jpgNorwegian American economist and sociologist Thorstein Veblen coined the term “conspicuous consumption” in his 1899 book The Theory of the Leisure Class.  Conspicuous consumption has been discussed in the context of addictive or narcissistic behaviors induced by consumerism, the desire for immediate gratification, and hedonic expectations. 

Our friend Jared Diamond recently wrote a piece in the NYT about American’s “Consumption Factor” (which is 32 times that of Kenya and 11 times China).  He writes: 

If India as well as China were to catch up, world consumption rates would triple. If the whole developing world were suddenly to catch up, world rates would increase elevenfold. It would be as if the world population ballooned to 72 billion people (retaining present consumption rates).

So what is it that we are so conspicuously consuming?

Globally, the 20% of the world’s people in the highest-income countries account for 86% of total private consumption expenditures — the poorest 20% a minuscule 1.3%. More specifically, the richest fifth:

  • Consume 45% of all meat and fish, the poorest fifth 5%
  • Consume 58% of total energy, the poorest fifth less than 4%
  • Have 74% of all telephone lines, the poorest fifth 1.5%
  • Consume 84% of all paper, the poorest fifth 1.1%
  • Own 87% of the world’s vehicle fleet, the poorest fifth less than 1%

Global Priority $U.S. Billions
Cosmetics in the United States 8
Ice cream in Europe 11
Perfumes in Europe and the United States 12
Pet foods in Europe and the United States 17
Business entertainment in Japan 35
Cigarettes in Europe 50
Alcoholic drinks in Europe 105
Narcotics drugs in the world 400
Military spending in the world 780

And compare that to what was estimated as additional costs to achieve universal access to basic social services in all developing countries:

Global Priority $U.S. Billions
Basic education for all 6
Water and sanitation for all 9
Reproductive health for all women 12
Basic health and nutrition 13

(Source: The state of human development, United National Development Report 1998, Chapter 1, p.37)
Other sources:
Data from the World Bank for 2003

A House Divided


The House of Representatives sustained President Bush’s veto of a $151B labor, health and education funding bill (HR3043).  The vote was 277-141, (15 not voting, 100% of Democrats supporting, 74% of Republicans opposing), failing by two votes to override the veto.  Minnesota’s Michelle Bachman and John Kline voted against the measure. 

Essentially, the Democrats and Republicans are divided over $11 billion out of nearly $1 trillion in spending.  Which begs the question: where are our priorities as a nation?  President Bush vetoes a domestic spending bill because of a one tenth of a percent (0.1%) difference?

Meanwhile, the National Priorities Project estimates that we (taxpayers) will pay $456.1 billion for the cost of the Iraq War through 2007. For the same amount of money, the following could have been provided:

·         130,069,152 People with Health Care OR
·         472,181,032 Homes with Renewable Electricity OR
·         10,206,434 Public Safety Officers OR
·         7,918,403 Music and Arts Teachers OR
·         75,290,580 Scholarships for University Students OR
·         45,880 New Elementary Schools OR
·         3,547,959 Affordable Housing Units OR
·         194,511,722 Children with Health Care OR
·         62,590,915 Head Start Places for Children OR
·         7,765,056 Elementary School Teachers OR
·         6,854,781 Port Container Inspectors

Success without failure?

Is it possible to succeed without failing?

Over a couple of beers, a mound of fried calamari, and a plate of pesto-soaked ravioli, three Fight Club pugilists debated this topic the other night. It stemmed from a preview of our latest bout topic- The Wisdom of Crowds- the idea that the collective intelligence of a group is often more accurate than most or all of its individual members.

In an effort to help his company innovate and better themselves, one pugilist started a Failure Forum in which members could share their failures. The idea being that we all learn from our mistakes and if they all could learn from each others’ mistakes, they would collectively be that much better prepared to move the company forward.

So, in order to be more successful, they would learn from their failures. But, does one necessarily need to fail in order to be successful? This is where the conversation turned…

As we left the restaurant and made our way to the theater to see 3:10 to Yuma (I’d give it 2.5/4, btw) , we debated this. We dizzyingly volleyed theories, claims, and spin, back and forth through the hallways until the darkness and decorum of the theater dictated our silence. However, as the previews wound down, my adversary felt the need to summarize his views (and get in the last word while he could) with a succinct statement:

Success without failure is luck.

I gave this a few minutes thought as the opening credits rolled. Soon, however, Crowe and Bale had swept me back in time and away from my reality. When I came around two hours later, I had completely forgotten about our discussion and went about the next couple days blissfully.

Then, last night, a cryptic email:

What do you think…

What do I think?

Didn’t we come to realize that it doesn’t really matter what I think? Isn’t it more telling to know what we think? After all, that was the impetus for our conversation- the wisdom of crowds.

As such, I created a poll over at SeasonedGamers to find out a group’s view on whether or not failure was necessary for success . I kept the question as unbiased as I could, not giving any indication of my opinion- “Can you have success without failure?”. However, I needed to vote and I didn’t want my vote to show my preference, so I gave my adversary a head-start by submitting a ‘No’ vote.

As of this posting, and even despite my ‘No’ vote, “Yes- Success Exists Without Failure” is enjoying nearly a 2 to 1 advantage. Several respondents have also posted their views on why they chose what they did, and there are some wonderful insights mentioned there- be sure to review them, too.

So, while I could lay out my reasoning here as to why I think success can exist without failure, it is perhaps more telling, authentic and an incredible ironic twist that I can let the masses speak for me…

I feel obligated to clarify that my belief on this matter transcends the inherent relativity that exists between success and failure. Conceptually and definitively (as in, definition) the two require each other, like love and hate. I have to assume our promoted perspectives had accepted this as a certainty, and it’s my understanding that our discussion lies beyond this plane.

To our friends, neighbors, and family…

The literary fight club members would like to offer our deepest sympathies to the friends, neighbors, and families of those who were involved in last night’s collapse of the St. Anthony Bridge in Minneapolis, MN – the place we call home.

While we speculate as to what caused this tradegy and try to figure out how it could have been prevented – let’s take a second to remember how lucky we all are to be alive and to have the good fortune to live in one of the most prosperous nations in the world.

While you let that thought soak in… take a few minutes to read the comments from NY Times readers on the day’s events.  Enjoy today.

Anyone Else Worried? The WSJ Becomes “Fair & Imbalanced”

In a world controlled by the fewer and fewer “major” media companies… I am truly worried about the acquisition of Dow Jones & Co (e.g. The WSJ) by News Corp… creator of the Fox News Channel, which is anything but “Fair & Balanced.”  Were is a young capitalist to turn for his daily news feed?  Blogs?


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