The iPad's titillating promise

Titillating promises of what can be are often more interesting than the real experience.

Like all Apple products, the lovable iPad turns heads. Just because. The guy next to me on the plane felt compelled to open a conversation when he spotted me using it. In fact, you take it into public place to elicit just such a response.

Conspicuous consumption of the 60s and 70s turned to conspicuous morality of the ‘90 and ’00 and now we have graduated to conspicuous coolness, brought on not by a 350hp all wheel drive red coupe, but by a small 8x10 piece of electronics.

The problem is that the iPad’s hipness is not backed by its utility: it simply does not know what it wants to be: Too big for a phone, too small for a computer, too heavy for a book, too fragile for casual handling.

The screen is brilliant except outdoors where thumbprints overpower the content.

It’s too heavy to hold with one hand without your thumb wandering into the active matrix area and causing presses you did not intend. I keep swishing for 3 finger holes in the back (like a bowling ball), so I can hold it with one hand and operate it with the other.

It will not charge from most USB ports, and the battery life is so-so. Wifi reception is mediocre, unable to connect where other devices can.

Love seeing the NYT, WSJ and Bloomberg on that brilliant screen. Kindle app, iBook look great, but the device is simply too heavy to sustained reading. I found myself too preoccupied with how to hold the device that with reading.

Google Map is just the bomb! Intuitive, speedy, accurate, just brilliant!

Where the iPad really shines is web browsing. I miss flash, but the web experience is good and intuitive.

But the iPad’s biggest problem is that it simply cannot be used standing up or lying down. It cannot be used on a desk and it cannot be used on a recliner. It’s just too heavy and fragile for that.

So here’s my recommendation: if you’re the kind of person that sits up straight 80% of the time, buy an iPad, otherwise a combo laptop/smartphone is still the best way to go.

Unless you want to look cool. They hurry up and buy one before the charm fades.

As for me, I will continue to use this darned thing for the next couple of weeks and a few business trips. Maybe I’ll finally learn to sit up straight.

Give Iraq a Chance

Despite recent success, many seem determined to see the half empty glass in the Iraq.


Jeff Miron writes:

In addition, merely holding elections is not the ultimate goal; many countries have held elections that were meaningless in practice. We have yet to see whether Iraq’s “democracy” will become a de facto religous dictatorship.

I understand that elections are not the ultimate goal. However, they are a mean to an end are they not?

Would anyone looking in on the United States in the lase 18th Century have predicted anything but the collapse of this aberration/experiment?

Was the goal, in the end, not worth all the struggles?

I understand that we want to disincentivize American military adventurism. I’m all for that.

I understand that the cost in treasure and blood is high. But that cost is sunk at this point.

It’s time to stop beating the doom and gloom drums for Iraq. Give them half a chance will ya?

They deserve it as much as we did in 1776.

BTW - you should buy Jeff's new book Libertarianism, from A to Z

Maslow’s impact on global financial boom and bust cycles

I love simple explanations. Not because they are accurate, because they are not. Not because they are comprehensive, they are not. I love them because they explain things in way that is easy to grasp, and therefore easy to action. As long we keep an eye out for black swans, and are ready to revise our models, simple explanations trump complex ones in sheer utility.

What’s been top of mind lately is the apparent acceleration of the global financial boom and bust cycles. These cycles seem to be not only more frequent but of higher amplitude as well.

Take the current bust cycle: you can argue whether the Fed’s easy money policy led to unsustainable inflation in housing prices, facilitated by government policies implemented by Freddie and Fannie which purchased questionable notes turned them into mortgage-backed securities, and sold them to investment banks which purchased credit default swaps from AIG as a hedge....

And I haven’t mentioned the money supply issue yet.

But there is a simpler explanation: Maslow is at fault. You see, in the US consumer spending accounts for 70% of economic activities so it follows that consumer behavior becomes a significant driver in the economic equation. If we divide consumer spending into tranches following Maslow's hierarchy of needs an interesting pattern emerges.

Over the last 4 decades, consumer spending has steadily climbed the sides of this pyramid. For example, according to the USDA, in 1929, food consumed 29% of personal income, that measure went to 17% in 1960 and is now less than 9%. Similarly, expenditure on cars dropped from 8% of income in 1984 to 5% today, gasoline expenditures dropped by 10% while women’s apparel is up 25% since 1984. In fact many experts now look at discretionary spending as an early predictor of stock market activity (see this and this).

But what does this trend towards higher Maslow state mean? Well to put it simply: higher volatility and deeper boom and bust cycle. A simple assumption about the ease with which consumers can cut 20% of their spending yields a 50% more decrease in economic activity.

As our society trends richer expect deeper more frequent boom and bust cycles. It’s a fact of life, might as well get used to it.

2 vs. 14

As the Supreme Court considers the case of McDonald v. Chicago (summary) it’s likely the verdict will uphold Chicagoans’ right to bear arms.

The problem is that Supreme Court will most likely use the 14th amendment to uphold the people’s right to bear arms, as outlined by the 2nd amendment.

A win is a clear victory for gun rights, but it does establish a precedent of Federal intrusion into state matters.

Sometimes, I wish I could have it both ways.

Mommy-Daddy and Venus-Mars Metaphors

When I wrote my Venus & Mars piece last year, I tried very hard to avoid the male-female analogy. I just did not have the intestinal fortitude to deal with the fallout.

Well, in “The Enduring Mommy-Daddy Political Divide” David Paul Kuhn, with more courage and eloquence, applies this same principle to domestic policy and the R vs. D world view. Great read.

Vindication of the Bush Doctrine?

It would have been safer to wait after the March 7th election to post this, but caution has never been my strong suite. So here goes: It’s starting to become conceivable that all the blood and treasure we spent in Iraq hasn’t been in vain. That the Bush doctrine had some merit. That it is possible to create a multi-ethnic, multi-religions, multi-cultural democracy in the Arab world. Even Newsweek is starting to admit that.

I feel a “thrill going up my leg” when I watch Sunni and Shiite politicians jockey for positions, wheel and deal, and play hardball but with a commitment that a unified Iraq is that only way to go.

I’m not ready to concede that the cost-benefit analysis of the Iraq was has turned positive at this point. Nor should you take from this any encouragement to repeat this experiment in the future. It succeeded mostly because the Iraqis wanted it to succeed, full stop.

But the benefit side of the equation has clearly turned positive: Iraq and Lebanon, liberated by the Bush doctrine, might not turn the entire Arab world into western-style democracies overnight. But the seed has been planted and they now stand as a few small green shoot on a desert dune.

The Arab youth hasn’t the right to ask for anything more than to be given a chance to succeed.

America owes the Arab youth nothing more. It’s all paid up.

Keynes vs. Hayek for Dummies

If you do not know who John Maynard Keynes or Friedrich von Hayek are, simply think of this video as 2 white rappers trying to impress white chicks.

if you do know, then listen to the lyrics.

Demography is destiny: The inevitable decline of the welfare state.

The trend to ignore old age or even to fight it by chemical and surgical means permeates not only our modern society by our government policy as well.

But age, like gravity and rust, always wins in the end. Populations all over the world, with few exceptions, are getting older. Aging populations severely impacts western-style welfare states.

The ratio of payers to beneficiary has been more than cut in half over the last 50 years. Even the US, where population growth continues and the median age is a relatively young 38, social security went from 16:1 in 1950 to 3.3:1 today and is projected to reach 2:1 in 2050.

The problem is more severe in Western Europe and Japan where population growth is often negative and median age is now above 40. It is no coincidence that the biggest budget deficits are now being experienced by countries (Portugal, Italy, Greece, and Spain collectively known as Eurozone PIGS) with highest median age and lowest population growth.

For welfare states costs are rising and fewer workers are paying to support more retirees. This imbalance, temporarily aggravated by depressed economies, is simply not sustainable. Something has to give and this something is the welfare state.

Welfare state will not go quietly into the night. It will fight all the way to the end, this after all is an existentialist threat.

The outcome, I believe, is not in doubt. And strangely, Europe will lead America on that journey. The question is not of if, but of when.

Provided with no commercial (or scientific) interruptions

Hank, Hank, Hank...

I just finished reading Hank Paulson’s “On the Brink”, and though the book was a boring, blow-by-blow recount of the events, it shed some light on the near collapse of the global financial system in the fall of 2008.

It did help me answer the question of whether TARP was necessary: it wasn’t.

TARP in of itself was pretty harmless; most of the funds have or will be paid back, with interest, to taxpayers. Toxic assets turned out not to be a real problem: it was a good-old-fashioned run on the bank; a global run on all the banks.

TARP never lived up to its name: It never purchased any “Troubled Assets”. It simply played the role of “lender of last resort”. A role typically reserved for the Federal Reserve, and as such avoided some short term pain. We will never know what could have happened.

But the story does not end here.

TARP opened Pandora’s box and enabled the US Government to do or attempt to do things that a few months prior would have been unthinkable.

TARP changed the American psyche so talk of “hundreds of billions” became acceptable in polite company.

TARP led to the Stimulus, GM bailout, $13T budget deficit, red ink as far as the eye can see.

TARP forced us to cross the Rubicon. Led by the unwavering self-confident, never-doubt-myself-for-a-minute but willing-to-change-my-mind-at-my-convenience Paulson, we moved into virgin territory. And the damage caused will take decades to undo.

Moral hazard on a slippery slope! We could and should have done without TARP. Libertarians and House Republicans were right after all.

By the way, Hank portrayed John McCain as a bumbling idiot, unable to grasp the situation let alone formulate a cohesive plan. Maybe my faute-de-mieux theory was right?