Month: Nov 2009

Consequences and probabilities

How Peter L Bernstein’s work helps us make the safest decision with regard to global warming.

Probably like me you hadn’t heard of Peter Bernstein. He was instrumental in understanding risk and that alone makes him worth knowing about.  Here’s the entry from Wikipedia:

Peter Lewyn Bernstein (January 22, 1919 – June 5, 2009) was a financial historian, economist and educator whose development and refinement of the efficient market theory made him one of the country’s [USA] best known authorities in popularizing and presenting investment economics to the general public.

Watch the YouTube video before reading on:

You could not have missed a fundamental message in the interview – if the consequence of something is critically harmful then don’t take ANY risks. Bernstein’s book on risk is Against the Gods.

Continue reading “Consequences and probabilities” →

It’s all about timing!

An adjustment to when Posts are published on Learning from Dogs.

The editor of this Blog lives in the American Mountain Time (MT) zone.  That is 7 hours behind GMT.  Posts have been scheduled to be published at 09:00 MT, which is 16:00 GMT.

It has now struck us that this is daft because for our American readers East of MT and our European readers the daily Posts appear either mid-morning or in the afternoon, even later during the Summer.

Thus with effect from Wednesday, 25th November Posts will be published at 22:00 MT the previous evening.

This will ensure that your daily Learning from Dogs Post will be waiting in your in-box, and available on the Blog website, at the start of your day. (Apologies to our readers down under!)

For those that haven’t done this, you can easily set up an email subscription (and just as easily cancel it) to the Posts thus ensuring that they are always available to read via your email account.  To do that, click here.

Government Spending and jobs! Uh? What jobs?

Government spending isn’t what it is made out to be.

The headlines are full of claims about the number of jobs created or saved by the stimulus package, the impact of the Cash for Clunkers program on U.S. output and, the latest, the reduction in the deficit from the proposed U.S. health care reform legislation.

What total rubbish!

Government spending is just that — SPENDING.  It does not, can not, never has, and never will CREATE any output, economic wealth, or job.  The only way — and I mean the ONLY way — that profits or wealth or a new job is created is through a business.  Businesses are the only entity that can hire labor and capital and combine them in such a way as to create a product or a service that society may decide is worth more than it costs.

And that spread between the cost of production and what society is willing to pay is economic value; it is the generation of profits that then enables the taxes that the government collects to spend on the goods and services it thinks America ought to consume.

Private industry is the job creator.  Not the government.   And this is not wishful thinking, or a political point of view, or a theoretical model.  It is an unmitigated, irrefutable fact.

By Sherry Jarrell

Economics and Semantics

Governments borrow – why?

This post is a plea for help from someone clever …. what I would like to understand concerns “the borrowing requirement”. All my adult life I have listened year after year to the British Chancellor’s presentation of his budget and each time there is reference to “the borrowing requirement”.

What I would like to know is WHY there is a borrowing “requirement” in the first place. Exactly WHY do governments spend more than they “earn”? And more to the point, why do – and can – they keep doing this year after year, decade after decade? Layman that I am, it seems to me that continually borrowing, living beyond one’s means, spending more than one receives is BOUND to lead to problems in the long run. Is it simply that in most western democracies the “long run” is not foremost in the minds of our leaders? Or does this continual borrowing not matter?

I was interested in the last French presidential election to see that  centrist candidate François Bayrou proposed making it illegal for the government to spend more than it received. I found this courageous and innovative. Naturally,

Bayrou

he came nowhere in the election! Silly chap! He should have promised to spend, spend, spend like the rest of them! Then he may have had a chance.

No, we are paying vast amounts of interest every year merely to service our debt. The basic questions are: Why can and do states do this? Is it necessary and is it wise? And if the answer to the last two questions is “No”, then why do we let them get away with it?

It seems to me that the “borrowing requirement” is simply a fairly crude means that governments use to bribe us with our own money. Please correct me if I am wrong!

By Chris Snuggs

The rights of the child

A reminder of the United Nations (UNICEF) Convention and a second view from yours truly.

On November 12th I was the author of a Post called Our next generation featuring the young Jessica Watson from Australia who is on course to try and win the record for the youngest person to sail, solo, unassisted, non-stop around the World.  Here’s a part of what was said:

Jessica Watson2
Jessica Watson

Jessica Watson is a teenager.  She is hoping to break the record for the youngest person to sail solo, non-stop and unassisted around the World.  Whatever modern materials and technology can do to make sailing easier, sailing solo for weeks on end is grindingly tough at any age.  She’s a wonderful example of the next generation!

Jessica left Sydney Harbour on October 18, 2009 sailing her sloop Ella’s Pink Lady. Her course is an estimated 23,000 nautical miles requiring her to be roughly 230 days at sea.

You can see that the tone of the Post was supportive.

However the comments that the Post attracted were critical of the pressures and influences that may have been brought to bear on this child.  For at 16 ‘child’ is what Jessica is.  One of our regular contributors pointed out that under the terms of the UNICEF Convention:

The Convention on the Rights of the Child is the first legally binding international instrument to incorporate the full range of human rights—civil, cultural, economic, political and social rights. In 1989, world leaders decided that children needed a special convention just for them because people under 18 years old often need special care and protection that adults do not.

(My underlining)

Read the rest of this Post

What makes “a good school”?

A very obvious explanation of good schooling from a British perspective.

There is frequent reference in the media to “good schools”, usually concerning how to create one or get one’s children into one. It is clearly assumed by writers that use this phrase that everyone understands what it means. I am not so sure ….

So what exactly IS “a good school” as far as a parent who wants the best for his children is concerned?

Do the teachers make “a good school”?
Well, teachers are clearly an important contributor to the quality of a school, but are they the critical factor? I think not ….

The premises, facilities, equipment and environment?
The answer is for me the same as for the first question.

The relevance, logic, variety and quality of the curriculum?
Once again, we have the same answer ….. and in truth, it is not too difficult to work out a curriculum that corresponds to these criteria.

So, what IS the critical factor then?

Read more of this Post

Black holes, colliders and paradoxes

This is a very strange world that we live in.

It would be fair to say that my knowledge about what I am writing in this Post is minimal to the point of total ignorance.  So why open my mouth and prove it!  Because the conquest of fundamental questions about our world is not only an example of mankind at its greatest but also something of broad appeal.

That is proved by the continuing popularity of the BBC Television Series – Horizon.  In that series there have recently been two fascinating programmes: Who’s afraid of a big Black Hole? and How long is a piece of string? (Readers outside the UK will not be able to view these programmes.)

Here are the programme summaries:

Black holes are one of the most destructive forces in the universe, capable of tearing a planet apart and swallowing an entire star. Yet scientists now believe they could hold the key to answering the ultimate question – what was there before the Big Bang?

The trouble is that researching them is next to impossible. Black holes are by definition invisible and there’s no scientific theory able to explain them. Despite these obvious obstacles, Horizon meets the astronomers attempting to image a black hole for the very first time and the theoretical physicists getting ever closer to unlocking their mysteries. It’s a story that takes us into the heart of a black hole and to the very edge of what we think we know about the universe.

and

Alan Davies attempts to answer the proverbial question: how long is a piece of string? But what appears to be a simple task soon turns into a mind-bending voyage of discovery where nothing is as it seems.

An encounter with leading mathematician Marcus du Sautoy reveals that Alan’s short length of string may in fact be infinitely long. When Alan attempts to measure his string at the atomic scale, events take an even stranger turn. Not only do objects appear in many places at once, but reality itself seems to be an illusion.

Ultimately, Alan finds that measuring his piece of string could – in theory at least – create a black hole, bringing about the end of the world.

Read more of this strange world

Straight Talking and Realpolitik

“To say nothing, especially when speaking, is half the art of diplomacy.” Quote by Will Durant.

During his China visit Obama said that “the US accepted that Tibet was part of China, but went on to push for the early resumption of talks between China and the Dalai Lama.”

This is the usual fatuous “appeal” issued by Western worthies to the Chinese Communist Dictatorship to act honourably towards people it dislikes. As ever, it is a waste of breath, but a diplomatic ritual that has to be endured.

Obama knows it is pointless, the Chinese pretend to listen but also know it is pointless as nothing will change. We all know – or should – that it is pointless. Why then do they do it? You can’t call it self-delusion since nobody is deluded. Frankly, I am not sure what to call it.

Of course, the Chinese claim to Tibet varies from ludicrous through spurious to extremely questionable at best …..

… and Taiwan is a free and independent state, and more to the point democratic. It is a disgrace that free, democratic countries have never recognized it.

The truth (that’s what we want, isn’t it?) is that the CCP is a murderous and illegitimate dictatorship, never having submitted itself to a vote. This may of course be very wise on their part, but it isn’t honest, is it?

In the way of dictatorships, it is quite prepared to massacre its own citizens to protect its power, as happened in the seemingly long-forgotten Tiananmen Square. It is a pity that the free world seems compelled to overlook all this in grovelling to China. We have to deal with them, but issuing fatuous appeals, come on ….

I wonder what the parents of those killed by the CCP thought as doves of freedom were released over Beijing during the last Olympic Games?

By Chris Snuggs

[Footnote from the Editor. This is a hard-hitting Post about the reality of relations between the USA and China. It is a reminder of the truth about such relationships. Readers may want to view this to understand also the reality of trade with China. Some of the images are deeply disturbing.]

Update on the “British Solution”

The Credit Crisis in Britain

Following yesterday’s Post on this Blog about Goldman Sachs, here’s Britain in action.

Ministers yesterday (17th November) launched a £50 billion ($84 billion) bailout of Britain’s crippled banks – and warned there could be worse to come. State-controlled lenders Royal Bank of Scotland and Lloyds Banking Group will receive fresh injections of taxpayers’ money totalling £39 billion ($65.5 billion).

RBS – which has now received the biggest state rescue anywhere in the world – was also handed £11 billion ($18.5 billion) in tax breaks to help keep it afloat.

Source: The Daily Mail

Thanks for the Greed. Are the directors responsible still in place? Are the Great and Good who removed controls and oversaw the decade of binge-spending and easy credit still in place?

Britain's Global Giant!

Oh, I remember now. The very same person in Britain who was Chancellor throughout the 90s and is now Prime Minister is – according to John Prescott (former Labour Deputy-Leader and the person whose office sign was changed at a cost of £700 ($1,200)  when his job name was rebadged weeks before he left it anyway)  – a “Global Giant” who saved the world.

Oh, and let’s not forget, this is the same person who said that: “Britain is better placed than other countries in Europe to weather the crisis …..etc blah, blah, blah …”

The reality (which is in fairly short supply among Global Giants) is different:

Within hours of the Chancellor’s announcement, the European Commission issued a stark warning about the frayed state of Britain’s national finances, warning of an ‘extraordinary deterioration’ because of the cost of City rescues.

It estimates public debt will double as a share of the economy between 2007 and 2011, reaching 88 per cent of gross domestic product – the biggest rise of any leading EU economy.

The latest £50billion bank bailout is roughly equivalent to the annual schools budget and far exceeds the annual defence budget of £35billion. The new moves bring the total of public money lavished on Britain’s financial rescue to £1.2trillion – almost £20,000 for every man, woman and child living in the country.

… and the £ has sunk drastically against the euro ….

Still, let’s have a bit of positive spin …. the National Debt isn’t quite (yet) what is was just after WWII. A great achievement. Well done  Gordon Brown …. but you can do it …. just one more little push.

We could do with fewer spin-ridden “Global Giants” and more people with vision, courage and competence.

And rather than “saving the world” it might be nicer if Gordon Brown started with saving Britain.

By Chris Snuggs

The ageing of the USA, Part Three

Back to the future – a new way of seeing forward

The concluding part of a three-part paper previously published by Professor Sherry Jarrell, Part One is here and Part Two is here.

What kinds of business establishments will thrive in the U.S. city of the future?  To answer this question, we examined the count of the number of establishments per business category listed on yellowpagecity.com, adjusted proportionately to represent a population of 500,000, and found the following results.

Death services. Although the strain on the healthcare system has received much attention in relation to ageing in the United States, the next logical step—death—is rarely mentioned, although it certainly represents many business and professional opportunities.  Our data suggest that the number of funeral facilities and cremations per 500,000 residents might double or even triple by 2025. The same applies to the number of cemeteries and companies listing monuments.

Healthcare. Along with roughly 30% more doctors, our data suggest that a range of medical services and products will be in greater demand by 2025. Nearly all of them relate to age. Consistent with the expectation that mental and self-care disabilities increase with age, listings also jump considerably for alcohol information and treatment, and counseling services. This trend doesn’t occur, however, for mental health services.

Real estate and living arrangements. Real estate listings significantly increase across the six MSAs, along with a substantial growth in listed land surveyors. The number of listings for nursing and convalescent homes moves from an average of 30 for the current MSAs to 50 for the 2020 and 2025 cities. There’s an even larger average rise in the number of retirement communities and homes.

Perhaps the most surprising pattern, at least initially, is the dramatic increase in the number of listings for mobile home dealers and mobile home parks and communities. Insurance studies have shown, however, that the percent of manufactured (mobile) home owners who are age 65 and older has risen from 26% in 1990 to 30% in 2002. Similar percentages are cited for owners who are retired. In addition, over the same period, the amount of owners age 80 and older has changed from 3% to 7%. Therefore, the future might be replete with mobile homes. The data might reflect the strategy of retirees selling larger homes to extract the equity, which is used to help fund retirement and buy a less-expensive manufactured home.

Activities. The data show a marked increase in the number of associations, clubs, churches, and fraternal organizations, which supports the description of mature adults as “joiners.” Bingo games are more popular in the 2020 and 2025 cities. Perhaps most noticeably, more golf is played in the 2020 and 2025 MSAs, requiring many more golf courses and golf-related products and services—not just in Florida, but also in Youngstown, Utica, and Scranton. Residents in the 2020 and 2025 cities also spend more time at the library, at recreation centers and parks, and reading newspapers.

Finance. Services that will be in higher demand as retirees seek assistance in managing their retirement assets include credit and debt counseling services, insurance, loans, mutual funds, and stock and bond brokers.

Products. The number of listings for new and used automobile dealers increases between the 2005 and 2025 cities, as do listings for new and used furniture dealers, health and diet foods, hardware, lawn and garden equipment and supplies, service stations, TV and radio equipment sales and service, and vitamins. But the data also reveal many other rising trends that are likely age-related, such as for antique dealers, arts and crafts, ceramic equipment and supplies, embroidery, gift shops, giftwares, jewelers, and security-related products. The substantial increase in florists is probably related to the number of hospitals, funeral facilities, and crematories in the cities.

Services. The Yellow Pages listings indicate many more business, employment, and investment opportunities in the future. Several categories relate to home improvement, such as contractors for remodeling, landscaping, and swimming pools. Home maintenance also is in greater demand in cities with older populations. Similarly, listings related to servicing and repairing automobiles, furniture, and jewelry rise across the three pairs of cities—along with beauty salons and massage. Pets apparently deserve no less, as pet washing and grooming services are in greater demand in cities with older populations.

Research Implications

This innovative methodology for studying various aspects of the future reveals that many of the detailed trends across the three pairs of cities have significant implications with respect to new product development and marketing. For example, marketers need to begin partnering with development and land use officials to anticipate future growth in demand for golfing facilities, churches, parks, libraries, cemeteries, and mobile home parks. And medical services providers must be prepared to meet the demands for home health services and many other healthcare preferences of older adults in an increasingly competitive environment.

Although it’s true that many factors other than age will shape future spending patterns, such as changing tastes among mature buyers, new technology, and various economic factors, many of these trends are almost entirely age-related. Therefore, it’s unlikely the future will look that different from Lakeland today, where the share of the population age 65 and older is identical to that projected for the nation in 2025.

The United States will not be a nation of Floridas in 2025; it will be a nation of Lakelands.

By Sherry Jarrell