Month: August 2011

I keep seeing news articles about unemployment percentages. I’m surprised that so few people look at the actual employment numbers rather than unemployment. As I’ve written here before, I think total employment is a much more interesting number because it predicts demand for housing (generally you need a job in order to pay rent or a mortgage) as well as the overall strength of the economy.

According to the U.S. Bureau of Labor Statistics, in 2000 the U.S. had 131,785,000 nonfarm jobs, of which 20,780,000 were in government. In 2011, the corresponding numbers were 131,190,000 (slightly less) and 22,034,000 (about 6 percent more).

So to my mind there should be demand for approximately 350,000 fewer houses and apartments (budgeting in some two-career households) and the overall economic strength of the U.S. should be lower because we have fewer private-sector jobs supporting more government jobs.

The raw data on employment don’t seem that hard to interpret. Why do they so rarely appear in the news?

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… but they would have declined (or at least slowed in growth) anyway.

A lot of the value in Apple has come from the ineptitude of other companies and the passion and willingness of early adopters to spend huge money. There are inherent limits to growth fueled by those two factors. For example, the early adopters with the greatest willingness to pay for smartphones (and associated service) have already purchased smartphones. Now the big market is from people in emerging countries, such as China, and the average consumer in developed countries. The record companies were so poorly managed that they gave up 30 percent of their digital music revenue because they were too lazy to run their own Web site. What other industry is going to give Apple 30 percent of its revenue in exchange for Apple running a server?

So let’s not be too hard on the new Apple CEO (Tim Cook, who seems to be more experienced with logistics than product design). If revenue and profit growth flattens it might well have done the same under Steve Jobs. For Apple to justify a comparable market cap to Exxon’s (which owns oil wells, after all) would require a lot of things to go right over the next decade. The current P/E ratio of 15 doesn’t look that high, but since Apple is a tech company that issues a lot of stock options they may end up diluting current investors so much that a public holder of a share of Apple stock may never receive his or her full $383 worth in dividends and capital gains.

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One of the things that I did not like about King Bush II was his publicly personal involvement in the Iraq war. Here’s something that I wrote during a 2002 trip to Alaska:

From June through October 2002, every time we emerged from the wilderness we’d find George W. Bush complaining about Saddam and Iraq and every time we felt diminished. Iraq is a country that, before the Gulf War, had a GDP comparable to that of West Virginia. George W. Bush represented the entire American public. Was it possible that we the American People had nothing better to think about than a tiny country on the other side of the globe? It occurred to us that, as a matter of protocol, Queen Victoria would not have dealt directly with the potentate of an insignificant foreign land. It would have diminished the citizens of England to see their leader treating one-on-one with the leader of an inferior nation. A problem like Saddam would have been delegated to a 3rd undersecretary in the Foreign Office. When asked about Iraq, we kept expecting to hear George W. say “I’m not sure. I delegated that problem to Colonel Smith and he is going to report back to me in three months. Can we move on to questions that more directly concern our society?” But of course it never happened.

I’m therefore thrilled that the Libyan war is coming to an end while President Obama is on the golf course on Martha’s Vineyard. As U.S. military power fades (due to our fading economic power), this is how I’d like us to be remembered, i.e., our hero president casually squashing a Third World dictator while sitting on the beach with the family.

[I myself would be on the Vineyard as well right now, visiting a close friend who is getting on in years, but it is not practical for peasants to fly personal airplanes there during Obama’s visit. I was there the day before the lockdown began and the airport was crammed with cargo planes, vehicles that had been flown in, etc. Before my departure, my friend and I shared the pilot’s lounge with some of the Secret Service employees. We were amazed that the country could afford to take so many young intelligent people out of the productive workforce, put them on taxpayer-funded salaries, rent them cars with tax dollars (or fly SUVs in on C17 cargo planes), and rent them beach houses on Martha’s Vineyard for two weeks.]

[Note that even had we stayed we would not have been able to see Air Force One land. The main runway at MVY is just over a mile long and when your personal airplane is a Boeing 747 it means you need to fly to Otis Air National Guard base to meet one of the helicopters that has been previously flown up there to greet you. Then you transfer from the B747 to the helicopter for the flight back south to the MVY airport, then shut down Vineyard traffic for the motorcade trip to the $50,000/week estate (it is unclear why he couldn’t take a helicopter directly to Blue Heron Farm, but maybe his Marine One helicopters are simply too big to land on the small private golf course associated with the house (aerial photo inside this article)). Michelle Obama and her daughters arrived four hours earlier via a similar collection of taxpayer-funded jet-powered aircraft (an extra $500,000 cost to taxpayers, considering operating costs and the Secret Service details required?).]

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I visited my 12-year-old friend Sophie at Boston Children’s Hospital today. Despite the month of inpatient chemotherapy that she has endured, she was sensitive to my own mood and asking about me. I asked if she was getting bored and she replied that there was always a lot of activity. “There are volunteers who come by every few hours to ask if I need anything.” Were they helpful? “They’re annoying. If I had the energy to see people, I would be seeing my friends.”

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Folks: A 12-year-old friend has come down with Burkitt’s lymphoma and is at Boston Children’s Hospital for four months of inpatient chemotherapy. I’m visiting her tomorrow morning and then donating blood for her at 11:30 am. Would anyone like to join me at the blood center (best to email for appointment)? I’ll buy lunch afterwards.

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This is sad, but apparently my backup and version control methods aren’t perfect… I’m looking for copies of my own source code from prior to September 1999. According to http://philip.greenspun.com/doc/version-history that would be ArsDigita Community System 2.2 or prior. It would also be nice to cover the source that I once distributed from demo.webho.com with my tutorial books). Apparently I put a robots.txt file in there to prevent it from being indexed (not sure why; maybe I thought the files were too big and AltaVista wouldn’t want to choke on a lot of source code?) so it isn’t in archive.org.

[I know that this sounds pathetic. My defense is that I relied on the company that I had founded to keep the source code and maintain the version control system. After I sold my shares in the company and went my separate way, the company failed and the servers were likely discarded. I guess the lesson is that programmers should keep a personal archive of everything that they’ve done.]

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Yesterday’s New York Times carries an essay by Warren Buffet proposing that taxes be raised on Americans earning more than $1 million per year. This from the world’s third richest guy, worth approximately $50 billion. He says that it is vitally important that Americans give more money to the wise bureaucrats in Washington, D.C. He himself will be giving away the majority of his fortune. Now that Buffett has identified the federal government as such a worthy organization, is he going to write the IRS a big check? Apparently not. Buffett is going to give his $50 billion to the Gates Foundation, presumably because he thinks that they will make better use of it than Washington (the $50 billion would have covered about half the cost of the Detroit automaker bailouts).

The U.S. government does have an almost unlimited need for money. By contrast, an individual plainly does not need wealth in excess of $50 million. Instead of higher income taxes, why didn’t Buffett propose a 100 percent tax on any personal wealth beyond $50 million? Surely it would be much fairer for those who have such a massive surfeit of cash to give to the needy agencies in Washington.

[Separately, Buffett seems not to take globalization into account when he conjectures that higher tax rates would not reduce U.S. economic growth: “And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.” Buffett ignores the fact that the U.S. had a much larger competitive advantage in 1980. China and India were effectively closed to foreign investment, either due to laws or red tape. Communication within the U.S. was vastly cheaper and easier than communication across borders. On August 12, the New York Times carried a story about highly skilled Americans moving down to Brazil for the job opportunities there. Buffett doesn’t explain how the U.S. government can turn the clock back on the whole world and pretend that everything is just like 1980 again.]

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Does it make sense for Google to spend $12.5 billion on Motorola? I can see only downsides to this deal:

• Google doesn’t know how to make and sell hardware or manage a company that does
• Handset makers that compete with Motorola (i.e., all handset makers other than Motorola!) will now be reluctant to adopt Android, a formerly neutral software product
• Hardware can be sourced from hardware companies as needed; if Google wanted its own handsets it could have had HTC, Samsung, Motorola, et al., build them for it. A contract to build a few million mobile phones would have cost a lot less than $12.5 billion.

I don’t get this one. If it is a smart deal for Google, why didn’t Microsoft buy Dell or Compaq a long time ago? What am I missing?

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England provides a lot more support for poor people than the U.S., so it seems paradoxical that unemployed youths would be rioting over there.

The U.K. provides public housing for about 17 percent of its population compared to perhaps 2 percent in the U.S. (about 4 million in public housing plus another 2 million with Section 8 vouchers). The U.K. provides free medical care without paperwork; the U.S. offers the tangled nightmare of Medicaid. The U.K. has a tradition of generous unemployment benefits that the U.S. has only recently matched (with our 99 weeks of Xbox).

Perhaps the explanation for why the riots occurred in the more generous country is precisely that the U.K. is more generous. If you believe that you are entitled to a house and the government gives you a crummy house, you’d be angry. If you believe that the government owes you a job, but doesn’t give you one, you’d be angry. So the more the government does for people, the more expectations are raised and the angrier people get when those higher expectations are not met.

In a pure free market economy, where each person experiences the consequences of his or her abilities and actions, it wouldn’t make sense for a poor person to be angry at fellow citizens. Does it make sense to say “I’m angry with you because I’m not very organized, reliable, or hard-working”?

Are riots in fact more likely in countries where the government promises a lot to citizens?

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A friend of mine who is an expert Python/SQL Web developer is looking for a new job here in Boston. He says “It’s the best job market that I’ve seen in my 10 years of working, but really I’d like to find a great start-up.” I said “What site can you go to and find all of the companies that have at least Series A funding and that need Web developers as opposed to, say, phone app or big C program developers?” He replied that dice.com was popular, but not that well organized nor comprehensive. Monster.com was hopeless. There were some job boards on sites such as stackoverflow.com and 37signals.com. People ended up working their networks of friends and acquaintances.

If the market for connecting software engineers and employers is as inefficient as he says, perhaps the LinkedIn valuation isn’t so crazy (though maybe tech people would be more likely to use Facebook or Google+ to network). But really that still leaves open the question of why the job market is so inefficient. Why can’t a guy with his skills easily see all of the Boston-area employers who need those skills?

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