Tue, 13 May 2008
Finance is not Economics
I think David Isenberg is a little frustrated with me, because he
keeps
snarking at me about economics. The problem is that not only does he not "get it", he doesn't understand that he's not getting it. It's like the guy
who adds 2 plus 2 to get 5, and then when you say that he's bad at math,
he says "Oh yeah? Well I know that 3 plus 4 is 8!"
From the looks of things, David is good at finance -- at least that's what
his later posting is about. Trouble is that finance is not economics.
Finance tells you how much, but economics tells you why. Finance can let
you determine that two things have the same value, or the same cost,
but only economics can tell you why people would buy one versus the other.
This seems to be a fairly commonly executed fallacy. Many many
people feel free to criticize economics and economists, when it's clear
that they don't know the first thing about economics. I think that's because
they, like David, confuse finance for economics. They figure that they can
balance their checkbook, so they know as much as somebody who has studied
economics for years and year. At least, that's my best guess, but I
might be wrong.
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Mon, 12 May 2008
Ride starting Mon May 12 17:20:30 2008
55.78 km 183015.11 feet 34.66 mi
12577.00 seconds 209.62 minutes 3.49 hours 9.92 mi/hr
Wow, what a great ride. Of course, I got back in at 8:50PM ... perhaps
a little late given that I'd lost most of the light at 8:35. But I was on
back roads at that point and nobody overtook me (I would have gotten off
on the shoulder if they had).
Rode from Knapps Station to North Lawrence on the Rutland Trail. I wanted to see the nice
new bridges that "they" had put in. Here's one of them:

I had heard that Harry Dow (et al) had purchased a section of the trail,
but I didn't realize that it was the closed section. This is great stuff!

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Sat, 10 May 2008
Ride starting Sat May 10 18:28:49 2008
20.42 km 66992.06 feet 12.69 mi
6143.00 seconds 102.38 minutes 1.71 hours 7.44 mi/hr
Went for a ride on the Christopher Muka section of the Rutland Trail.

Posted [23:45] [Filed in:
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Thu, 08 May 2008
Ride starting Mon May 5 17:14:00 2008
33.08 km 108514.70 feet 20.55 mi
6387.00 seconds 106.45 minutes 1.77 hours 11.58 mi/hr
Rode out to a friend's house on Bagdad Road. Upwind all the way out,
and on the way back, the wind was pushing me up the hills.

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American Health Care is Totally Broken
Usually, customers seek the maximum value at all times. This could mean
paying a lot for very high quality, or paying a little for something that
barely suffices. But customers optimize for value -- bang for the buck.
In the American health care system, nobody is optimizing for value.
The patient demands the highest standard of care regardless of the cost.
The insurance company demands the lowest payments regardless of the quality
of the care.
This is totally wrong. We need to move to a system where most people
pay most medical bills out of pocket, and insurance companies step in only
when the costs are completely unaffordable. To get there, we need to eliminate
the deductibility of health care costs. Why should health care be deductible
on income taxes when food is not? Food is way more important
to your health than is a doctor's care. So is exercise, but neither one is
deductible.
We also need to accept that most insurance companies will need to fire
most of their employees, and that doctors' offices will need to fire one
or more employees. On the bright side, consider that that will free up
their labor for production that makes American society better rather
than worse, as is currently the case.
Posted [10:49] [Filed in:
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Mon, 05 May 2008
So-called "Junk Economics"
David Isenberg drives me batty. He's the fellow who pointed out that
a stupid network (intelligence at the edges) produces more public benefit
than the smart network that his then-employer, AT&T, was building.
Well, of course when you make a public fuss like that, you either change
your employer's direction, or you have to leave. He left, and has been a
successful consultant since then.
Unfortunately, David doesn't know much economics. Like most people
who don't know much economics, he feels free to cast aspersions on what
he calls junk economics. He complains therein that some of his friends deny the
peak oil hypothesis. Maybe he means me? I don't deny the hypothesis in
the sense that I'm not an expert on oil. I have been studying economics,
however, and can make some predictions which counter David's "Junk"
economics.
First is that there are sources of huge amounts of oil which are not
profitable to extract when the Saudis are dumping oil. Second is that
nobody is going to invest in these oil sources unless it looks like they
can successfully sell their oil. So they're not going to act simply
because the price of oil is high. Everybody expects the Saudis to try to
push the price of oil up to extract the maximum possible profit.
But if the Saudis are artificially restricting the supply of oil,
they can artificially expand it as well. The people sitting on more
expensive oil are going to wait to extract it until they're sure that
the Saudis can't screw them by expanding production.
As I said at and after David's WTF
conference back in 2004, people will not act simply because experts say
that peak oil has occurred on such-and-such a date. People will act when
they wish to avoid discomfort and not before.
Yes, the end of cheap oil is going to be a challenge. But it's not going
to be the end of the world. Probably the only bigger challenge we'll face as
a species is the global cooling of the next ice age. That is going
to be a problem when the ice starts covering the northern hemisphere.
UPDATE (since a friend pointed out that I hadn't made my point) 5/5.
The world lurches from crisis to crisis. You might think this is a
sign of mismangement, a flaw in human nature, or simply God screwing up.
(As for the last, I believe that God stops in from time to time to see if
we've blown ourselves up yet, so he can promote the great apes, but that's
the extent of his involvement in the world.) Regardless of your opinion,
that is how people work.
In these crises, many people take different actions to try to resolve
the crisis. People fitting underneath a bell curve, they will try all sorts
of things. Some of them work, some do not. Sooner or later, a smart
person invents something that totally crashes through the crisis. Blows
it apart. The crisis is gone, and what we have is better than what we
had before the crisis. For example, a hundred years ago, New York City
was fast approaching a crisis of equine proportions: piles of horse shit
in the streets, and no place to put them. "We" invented the automobile,
and have experienced huge benefits in personal mobility.
The key to remember is that nobody can predict who will invent this new
thing, nor what it will be. In order to facilitate this solution to the
crisis, the best thing government can do is: nothing. Don't favor anyone
or anything, let everybody do everything, don't stop anything that's peaceful.
You may ask yourself, "but why don't we get the government to do something
to avert these crises before they become full-blown crises?"
The answer is simply that the government is doing something. It
is actively maintaining the peace. It is choosing not to interfere with
peaceful human relations. It is choosing not to favor one solution over
another. Choosing not to choose is a choice -- probably the
hardest choice to make.
UPDATE 5/12: David doesn't have much
to say about this post. I think he is trying to
trivially refute me by pointing to the fact that I don't think much of
some people who call themselves economists. I've been saying that all along.
Posted [11:20] [Filed in:
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Ride starting Sun May 4 18:35:36 2008
13.79 km 45249.84 feet 8.57 mi
2829.00 seconds 47.15 minutes 0.79 hours 10.91 mi/hr
Just a short ride "around the block", but I also found out where is the
access road for the cell tower they put in last year -- at the end of Dudy
Road on the top of a 440' tall hill. That's surprising, because there
are hills very close by which are 50' taller. Maybe they liked this
hill because it's close to a road and also has no trees?

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Sun, 04 May 2008
Web 2.0 doesn't imply usability
I recently got myself a Flickr Pro account,
and have been using Flickr for more of my photos. I find myself more
and more annoyed at the rough edges in the Flickr user interface. For
example, when you want to delete a tag from something, you click on
the [x] to the right of the tag. Flickr asks you "Do you want to
delete the tag?" Cancel/Ok:

This is almost certainly the wrong thing to do. It annoys people
because the website is (in effect) saying "Hey, that might be a stupid
thing to do, so I'm going to slow you down so you can think about it."
The first couple of times people might pause to think (but what
they're likely thinking is "you stupid computer, I told you
what to do".) After that, when they want to delete a tag, the action
will be "Click X; Click Ok", with no pause for thought.
That is how people think. That is how people are able to learn a
complicated game like chess, or go. People chunk information and
actions together. This allows the forebrain to go on thinking about
other things while the rest of the brain carries out an action
previously decided-upon. If an action requires a confirmation, the
hindbrain will confirm it as part of executing the action chunk.
The way to work with human congnition rather than against
it is to allow for Undo. Undo isn't a new idea -- we were using it 25
years ago. Undo works well with the human brain because it allows
actions to happen without confirmations, but it also allows the
forebrain (which operates slower than the hindbrain) to realize that
it has made a mistake, and correct it with an Undo.
Flickr isn't all bad. They do use Undo sometimes:
When they add an image to a set, they add an indication that it's
in the set over on the right, so the "OK" part is useless. They
should skip the dialog entirely and insert a temporary "UNDO" below
the set listing. Even when they do use UNDO, they spoil its operation
with a confirmation:

Of course I want to
remove it from the set! That's why I just clicked on UNDO, right?
Following the confirmation is another useless "Click OK to indicate
that you are still alive" box.

Of course it's been
removed, because the set listing is now gone. The proper way to
handle this is to grey out the set listing on the right, and add an
"UNDO" button below it.
Even if you've implemented your website using Open Source software
like Linux, Apache, MySQL, and PHP, you don't escape the low quality
typical of proprietary software unless your software is Open
Source.
It's easy to volunteer other people to fix problems. In the Open
Source world, the typical response is "great idea; send a patch."
Flickr lives in the Web 2.0 world, not the Open Source world. Their
software sucks just like any proprietary program. We can't fix it.
Only Flickr can fix it, and hopefully, they'll at least fix the
problems I've outlined here.
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Wed, 30 Apr 2008
PoopReport
Having watched people poop on the streets in Mumbai, wanting to help stop
that, and not knowing what to do, I was pleased to come across the PoopReport's
project to help people in India. Specifically, schoolgirls in Uttar Pradesh.
They can build a composting toilet for $250, which is a fair sum, but less
than the computer you're using to read this posting. Granted, it's not
Mumbai, but the problem is still the same.
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Mercantilism is not the key to job growth
Our new governor says that state government needs to do more to lower
cost of doing business in New York:
To create a more
conducive climate for business, the governor said New York must make
doing business in the state cheaper by investing in infrastructure and
reducing high energy and health care costs.
How the heck is he going to do that? By pressing the "lower energy
costs" and "lower health care costs" buttons? He's a Democrat, and
Democrats are historically unwilling to do what is actually needed to
lower these costs: nothing. Government needs to get out of the way of
creative resourceful people with ideas. Government has a positive
role to play while getting out of the way: by ensuring that all
relations between people are peaceful. But that's government's only
role.
He goes on to say:
For his part, Gov. Paterson
reiterated his commitment to belt-tightening and fiscal prudence.
"Our economy is still reeling," the governor said. "When this storm
hits, we can't simply do what Albany usually does: turn around and tax
the first business or the first resident we see. Rather, we have to
cut wasteful spending."
No, David, you need to cut all spending, not just
the wasteful spending. You need to do less for us, you need to do
less to us. You need to do less, period. Shut down department after
department, and send the people home to get productive jobs. Most of
what New York State does is either irrelevant or actively harmful.
Posted [14:37] [Filed in:
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