Google Wave

Alright all of you bloggers, emailers, instant messengers, facebookers, writers, photographers, and the like, prepare to be integrated by Google...

This video takes about an hour and a half but it's worth it...

Ra Ra Ree... Kick em in the Knee...

Just a quick post following the State of the Union Speech tonight. All things considered I thought President Obama gave a great speech. He hit a lot of points that were both positive and bipartisan, making it easy to entice the applause out of the Republicans. While not being specific on most of his points (the devil is always in the details), he did mention a couple of issues that I think he will get in trouble for, protectionism being one of them.

But Enough of the serious stuff, my favorite parts were when he made Joe Biden blush like a school girl after his "Nobody messes with Joe" comment. The Vice President looked like a chameleon attempting to blend into the red stripes of the flag behind him.

The my other favorite part was watching Nancy Pelosi literally jump up and cheer like she was a cheerleader at a high school football game. She was so exuberant during the first part of the speech that someone must have said something to her because she toned it down as time passed. For a few minutes it was almost more entertaining watching her gush than it was watching the President.

Oh, the title of this post isn't meant to be mean spirited, it's the only cheer that I remember from high school...

Genomics and expanding economic value

Where will the next big value bump come from to excavate the world economy from its current pit. In a previous post, I attempted to draw a linkage to between our economic state and the value of the economy (I need to spend more time on this idea). That is the easy part, the hard part is to determine what the next major value contributor will be to the economy. This Simpsons short from Hulu.com serves may give us a clue.

or not... I just liked the clip.


Back in 2003 Juan Enriquez presented this talk on the future with genomics, a field with its roots dating all the way back to the 1970's. But there has always been something keeping the future of genomics from completely unfolding...at times our computers were to slow, other times the National policies were too hesitant, but today the primary obstacle is the the health of the economy (we have fast computers and a pro-science administration). So over the next few years, I would expect to see the field expand like it never has before.

There are a few companies that seem to agree that genomics may be the way forward. Invitrogen's purchase of Applied Biosciences combines the sale of gene sequencing equipment with genomic services. Can you imagine if you were able to upload your genome to Google Health and have Google send you alert you when treatments or cures were available for your genetic dysfunction... Now that's value!

Are you smarter that George Bush? Bill Clinton? Hillary?

The Kids IQ Center is an interesting site... It turns out that George W. Bush has an above average IQ (123), and is within seven points of President Obama (130-148, a range that I'm sure will be refined as his presedency proceeds). And Bill Clinton (137), while above average, isn't as smart as his wife, Hillary (140).



I dare anyone to take an IQ test and post their score on this blog, see how you stack up...

Very Interesting

Is Macro Economics real?

I was reading a friend's blog over at the Scratching post when I came across a very interesting sub-post by MISH on FIV. Mish compared the economics theories that have dominated macro-economic practice since 1930 to the common sense approach most eighth grade graduates would take... Very humorous and he brings up a good point... has the field of Macro Economics missed the mark? Our recent recession would indicate that the combined efforts of Keyns, Friedman, and even Hayek can not predict how and why a economy grows or fails.

But I think that MISH over-simplifies, implying that the world economy is a fixed size making balancing spending with saving as the only way to success. But that argument is countered simply by looking at the last 100 years, it is clear that the the economy is expanding but how fast? and why?

I like to combine basic physics with economics... applying the conservation of energy law to monetary policy. The applicable interpretation goes something like this; the economy is the total sum of energy created by a the people in the economy. The economy grows when the people work more to add value, but it shrinks when the population takes more than they contribute. Value is fluid across the economy much like currency (or mass and velocity in the analogy), making it easy for the economy to aggregate total value but very difficult to decompose and analyze.

So the bottom line, is that Monitarists and Keynesian theories work better if the population is adding more value through work than they are extracting through consumption. What does that mean for governments? That means that successful governments will incentivize people to add more value than they extract, making the economic pie bigger. If a nation's economic pie is bigger than the population needs, everyone is comparatively richer than they were when the economy was smaller.

Unfortunately this concept eventually runs up against entropy, or the tendency of all energy to seek it's lowest form. In economic terms the lowest energy state is the hunter and gather, or subsistence state. The implication to policy makers is that no matter how great the stimulus for increased productivity, there is always a tendency for a population to slip into less productive habits.

Which brings us back to today's problems... We built a big economy, with lots of potential, but policy makers became lazy and didn't continue to incentiveize the economy to grow honestly. Additionally we allowed our accounting practices to become clouded, impairing our ability to track real value generation. Policy makers allowed corruption to infiltrate the economy, stealing value from the core of our economy until it was a hollow shell of what it appeared to be, a real potemkin village.

It seems to me that in the future, Government should proceed on two tracks, first create a very transparent financial system that allows the true value of an economy to be exposed. Second, it should incentivize value creation at the core of the economy; creating an innovative, efficient environment for companies to succeed or fail on their own merit.

Sounds simple, right?

I want mine...

There is a new trend... in the news, around the house, even over dinner with friends... with massive amounts of federal money flowing in the name of the economic bail out, everyone is wondering about how they get their share? In some circles this may have always been a topic of conversation, but not so much in the circles I run in. This is new!

It might help if I described my friends and family; they are hard working - no excuse types of people. They pay their taxes, they manage their money, they don't whine (much), they are democrats and republicans, all sexes and orientations, and of many races... in other words I mingle with a healthy cross section of the U.S. population. I believe the people I associate with are a good representation of the hard working core of middle class America.

In our conversations we talk about the rich fat cats that are getting bailed out, we talk about the misinformed consumer (very gentle moniker) who overestimated their ability to pay for homes that were much too expensive, and we talk about the greedy middle men who set these deals up. But we have also talked about people who were relocated to an expensive area to keep a job, or entrepreneurs who took a risk in this greed fueled feeding frenzy to make a business work, and how their loss is our loss.

There is never a consensus about what steps Governments (lets bring our global partners into this, they are equally responsible) or individuals should take in the coming years, the economic crisis has put the personal interests of the very people who make the Government work at odds with the Government itself.

At the end of the conversation, one thing is always clear... we hate the idea that this crisis is going to be resolved at the expense of the people who were careful to make good choices and manage their lives according to their means. We don't like the idea that many greedy, irresponsible people are going to wind up with our tax dollars in their pockets. I just pray that we all have temperance to guide us in the coming years, because what ever happens we are not going to like the end result.

There is no "fair solution"; this crisis was brought about by greedy people taking advantage of ill informed people and the Government not enforcing the regulations. And as for my friends, we are not blameless, we sat and watched while our the cocoons we fought to build for ourselves were hijacked by greed and sloth.

Quote

"If you want to make an apple pie from scratch, 
you must first create the universe." -Carl Sagan