Last night I went and watched Gladiator with friends. Before the movie started, I was flipping through a friend's copy of a "coffee table" book called HIWI-- that's short for "Houston. It's Worth It." (See www.houstonitsworthit.com). It captures very well some of the reasons I love my city-- it's not the most beautiful or romantic or exciting or historic or "modern" or wealthy or powerful city in the world, but it's home. One of my favorite reasons given by a Houstonian for loving Houston is, "It's not Dallas."
If you're not from here, you might not understand what the big deal is. Houston and Dallas are Texas's two biggest cities-- why should they be so different? Why do so few people love both of them equally? The best answer I can give is to give each city a human personna to explain their inner character-- a comparison that occurred to me several years ago and has lived in the back of my mind ever since.
If Houston were a person, she would be an old grey lady-- not elderly, but strong and hardened by her years, with long windblown grey hair and a sun-beaten face, in a sweepy dress a bit ragged around the edges. If Dallas were a person, he would be a florid-faced, paunchy businessman in a tailored suit just a little too snug. The cities are just that different in personality; which you are drawn to depends on your own personality.
It seems I can only get thoroughly sucked into one social networking site at a time, and since April it's been Facebook. But so as not to abandon this poor old site completely, I will post a few updates/ thoughts:
- In May we went on a fantastic family trip to Tennessee, in our "usual" cabin in Townsend. Pics are here: http://s3.photobucket.com/albums/y93/berninbush/2009%2005%20Townsend%20all%20pics/
- I stayed busy over the summer traveling for business, traveling for family, and hanging out with friends from www.singleventure.org.
- We got two new big grants at work, so we're scrambling around to hire/ change staff, rent more space, etc. to get everything up and running.
- On August 2 I got a new niece, Charlotte Roseanna Wentzel: http://s189.photobucket.com/albums/z5/BabyMaddyW/24%20August%2009/Charlottes%20Birth%20and%20First%20Week/
- On August 16 I started what I'm calling a "social and medical experiment." I've been reading about the theories of several researchers that shoes are the cause of all modern foot problems, and how much healthier it is to go barefoot. http://www.nytimes.com/1991/08/14/news/which-shoes-are-best-for-children-maybe-none.html http://www.dailymail.co.uk/home/moslive/article-1170253/The-painful-truth-trainers-Are-expensive-running-shoes-waste-money.html http://www.barefootrunner.com/2009/03/do-running-shoes-cause-injuries/ http://www.barefooters.org/medicine/
I've always preferred to be barefoot anyway. I never wear shoes in the house, and I was often walking Lucy outside barefoot. So I've just taken it to the next level, skipping the shoes in a variety of public places, both to see how it feels on my feet and what kind of reaction I get. (One main place I still wear shoes is to work. Of course, that's a big percentage of my waking hours on weekdays. But I'm not daft enough to disregard the social and professional consequences of trying my experiment there. I do, however, wear extremely light and flexible sandals that are about as close as you can get to shoelessness.)
Socially, it's been interesting mainly for the lack of real reaction. I've been corresponding with a Liberty University science professor who's a barefooter himself and about to publish a book about it, and he said one key is to be comfortable yourself with your feet and not give away with your body language that you're self-conscious about it. I think a lot of people in the stores and restaurants just haven't noticed that I happen to not be wearing shoes. I haven't been kicked out of anywhere yet.
Of course by now my friends have noticed (and some of them have gotten an earful about my "experiment"), but aside from a few "hey, you're not wearing shoes" comments, they haven't said a whole lot.
Physically, with one exception, I've enjoyed it. I *am* more comfortable barefoot, and I love feeling in contact with my environment-- warm pavement, cool tile, soft carpet. My feet are gradually toughening to handle rougher surfaces. Experienced barefooters can run on gravel-- I'm not quite there yet, but I think I can work up to that gradually. After all, Frodo and Sam crossed Mordor barefoot! (Yes, I know that's fantasy...)
The one part I didn't enjoy was when I got a little too ambitious at a water park and tried to cross the blacktop parking lot barefoot in upper-90's heat. At first it felt uncomfortable but not unbearable, but the cumulative effect of several hundred yards was a mild burn that stung for the rest of the day. It didn't help that the inside of the park had acres of unshielded (though lighter-colored) cement. Ironically, with my feet burned at the very beginning of the day, I had to give in and wear sandals when everyone else was going barefoot. They had healed by the next day and I figure in the end it makes them tougher, but it taught me to be cautious and not over-do it!
I'll close this off by re-posting a note I wrote earlier on Facebook, on a completely different topic. This just really bugged me.
I just got an email with the following information:
"As you read in your morning paper, another detainee was freed yesterday and released in Afghanistan. Mohammed Jawad, an al Qaeda operative, was arrested by Afghan police in December 2002 for throwing a grenade into a vehicle containing two US troops and an Afghan interpreter. His actions wounded three people and today Jawad is free in the same country that our brave troops are fighting in right now.
...The prisoner, Mohammed Jawad, who is now about 21, was flown to Kabul, the Afghan capital, in the afternoon and was released to family members late in the evening. Mr. Jawad was arrested in Kabul in December 2002 and accused of tossing a grenade at an unmarked vehicle in an attack that wounded two American soldiers and their interpreter. The Afghan police delivered him into American custody, and about a month later he was sent to Guantánamo Bay."
Now, much as I am not a fan of our current administration, I have a problem with the fact that Mr. Jawad was at Guantanamo in the first place.
Guantanamo, or whatever prison takes its place, should be for the detention of TERRORISTS-- people who plan large-scale attacks (such as bombings, or 9/11 style mass casualty attacks) on civilian populations for the purpose of inspiring panic and sending a political statement, outside the parameters of a war declared by two nation-states. (I'm sure that's not a perfect definition of terrorists/ terrorism, but it's always been hard to define... take that as a working definition for the moment, anyway.)
When Guantanamo first opened, I recognized what I consider the necessity of sometimes stepping outside the rigid constraints of the US legal system and the international prisoner of war protocols, as we struggle to deal with international conspiracies of terrorists who respect no law. But I have never supported stepping outside of those constraints into NOTHING-- into an authorization to hold anybody for as long as we like with no trial and no proof of involvement in such conspiracies.
That's why I expected us to evolve a new system to deal with the new situation-- a way to hold a fair trial, find out the facts of the case, and decide if individuals were *terrorists* by the definition above, or merely soldiers fighting for a corrupt and illegitimate regime.
After all, this sort of distinction is not entirely unprecedented. At the end of World War II, the Allies were faced with the challenge of separating "war criminals" who engineered and carried out the Holocaust from Nazi soldiers who followed orders and fought for their country. I'm not saying the foot soldiers had no moral responsibility for what happened or for their own individual actions, but the world recognized that at the end of a war, soldiers under orders must be granted latitude and allowed to move on with their lives. Many Nazi soldiers, in fact, probably did not realize the full scope of what was going on until they had been completely sucked in to involvement. But the Nuremburg trials were carried out (in a timely, orderly, legal fashion) to deal with the people who DID know what was going on and consciously chose to be a part of it.
My support for Guantanamo has faded as, year by year, we have failed to come up with an effective means of separating the soldiers from the terrorists there or a legal framework in which to deal with them. I consider the Bush and Obama administrations equally at fault. Obama's "solution" of simply letting people go or transferring them to US Supermax prisons-- still without an effective legal apparatus to determine guilt-- is no improvement, and likely will result in the release of legitimate terrorists. And it still provides us no solutions for dealing with such situations in the future.
If I'm doing the math right, Mr. Jawad was only about 14 years old when he was arrested. In 2002, the United States had just invaded Afghanistan and was dismantling its government, the Taliban. I still believe we were perfectly right to do so, but I can have sympathy for the point of view of Afghan soldiers who believed they were defending their country from a foreign invasion. A 14 year old boy probably felt he was doing his patriotic duty by attacking US soldiers. That does not mean he was part of any conspiracy to blow up the Golden Gate bridge or nuke Israel or hijack planes. His main "crime" was getting caught-- thousands of Afghan soldiers were just as deadly to US troops, and they went home to their families years ago, because they were classified as "soldiers" instead of "terrorists." Holding Mr. Jawad at Guantanamo does not make US civilians any safer. On the contrary, he simply provides a rallying point for our enemies who recognize the injustice. And we may have lost the opportunity to win over this impressionable young man as a friend by showing compassion on his youth and misplaced patriotism, instead turning him into our bitter enemy for life.
Of course there could be, and probably is, more information that I don't know about his background. Conceivably there was a reason he was sent to Guantanamo when thousands of equally guilty Afghans were not. But if so, we MUST have a legal process in place that brings such circumstances to light and results in legitimate convictions and sentences.
Economists could stand to learn a lesson from physicists… specifically, from the laws of thermodynamics.
First Law of Thermodynamics: “Energy can be transformed, but it can be neither created nor destroyed.” This tells us that the amount of energy in the universe can be converted from one form to another.“Usable” energy like electricity becomes energy that is not usable to humans when it escapes as, for example, heat. This law explains why you can’t make a perpetual motion machine. No matter how efficient you make it, some of the energy will always escape to a form that cannot be used by the machine. Even if you could make a 100% internally efficient machine, the minute you allowed it to begin interacting with its surroundings to actually do useful work, it would lose efficiency.
What does that have to do with the economy? As a matter of fact, a lot. Wealth in an economy is like energy in the universe. In the most basic sense, there is a finite amount of it, but the amount available to the human race as “usable” wealth can vary drastically.
People have a lot of false ideas about what “wealth” is. Here’s a hint: it’s not cash. In the final analysis, paper cash is just paper. A 2” x 6” piece of paper has very limited intrinsic value… it may have a little more or a lot more if it’s backed by a government, depending on psychological factors like people’s belief in the stability of that government. But ultimately that faith is grounded in the availability of items that are of actual intrinsic value to the human race, like food, shelter, and clothing.
Wealth is not even precious metals like gold and silver, as the mercantilists of the 1700s posited. Those things do have a certain amount of intrinsic value because you can shape them into useful and desirable things. But imagine a civilization-ending scenario where the remnants of the human race return to hunter-gatherer status. Will gold and silver be high on their list of priorities? Hardly.
You could try to define wealth as the physical objects necessary to life. Those objects do have intrinsic value, but it’s very hard to determine what that value is. Say you have a potato. You could estimate its value by the amount of nutrition it gives you if you eat it. Or you could estimate its value based on the idea that you’re going to plant it in the ground and harvest ten more potatoes from it. Or, if you have the technology, you could say that you’re going to clone it and produce thousands of identical potatoes.
Those last two sentences hold the clue as to the real nature of wealth. Wealth is not any category of objects; it is ideas and knowledge and technology. Say there are two people stranded on two desert islands… both have flint, steel, twine, and sticks. The first person has no knowledge of survival skills; the second uses the items to make fire and a bow and arrow, and goes out and shoots animals for food and clothing. They have the same items, but the second person has wealth while the first person does not, simply by having knowledge to convert unusable wealth to usable wealth.
In the real-world economy, how is wealth “created” by converting it from unusable to usable? It’s done through ideas. Just as someone figures out how to make a solar panel to turn unused solar energy into usable electricity, someone comes up with a business plan to convert untapped human desires and unused natural resources into an industry for a new company. The new company employs people, who spend their salaries on the goods and services provided by other industries. Other jobs are indirectly created within the educational system, as trainers learn to prepare students for careers in the new industry. The new industry may also stimulate other industries that create component parts like steel or microchips. The entire size of the world’s usable wealth increases, and everyone lives a little more comfortably.
Where do these ideas come from? Ultimately, every idea starts in the human brain. A business or school or “think tank” can create an environment that stimulates people to be creative, or two or more individuals may develop an idea together, but innovations come on the individual level. Wealth-generating ideas do not come from institutions, and they certainly do not come from government.
At most, the individual politicians who make up governments can recognize good ideas and use their “bully pulpits” to spread them around, encouraging others to adopt those ideas more quickly and thus increasing the pace at which the wealth of the universe becomes usable. But this is a little bit like touting the benefits of a 100% internally efficient perpetual motion machine. It might be theoretically possible but it never works in practice. Governments are notoriously inefficient, and only as incorruptible as the most corrupt member. A perfect example is the recent debacle of ethanol. Special interests—corn farmers and environmentalists—pushed the politicians to puff up ethanol fuel, without considering the consequences. Those consequences, however, were quite dire: a worldwide food shortage in developing countries as food crops were melted into gas tanks, and the creation of a fuel that by some accounts is actually worse for the environment than petroleum. The whole debacle resulted in usable wealth becoming unusable for the human race, not the reverse.
And that is the risk you run every time government insinuates itself into the economy. The flow of wealth from unusable to usable is definitely not one-way; bad ideas can reverse the effects of good ideas. Unfortunately, governments seem to have a genius for seizing on bad ideas and promulgating them. And this makes sense; people who have a vested interest in an idea that would not survive in the wilds of the marketplace naturally turn to the one institution that can foist it onto others willy-nilly. That is the very essence of special interests.
The most dangerous misconception is that government is “creating wealth” when it dispenses cash. Of course that is nonsense. Governments never create usable wealth in the sense of generating ideas; they only move it around from place to place, almost inevitably losing a good bit in the process. Adding government to a system is like adding extra cogs to a mechanical machine. Extra cogs mean extra friction and more energy lost from the system as heat. You can grease the cogs for better efficiency but you will never make the machine as efficient as it was before you added the extra moving parts. The more levels of government bureaucracy you put into a transaction, the greater the inefficiency of the transaction. Better “oversight” can make matters better or worse, depending on how much bureaucracy you’re adding, but it will never be as efficient as a wealth transaction between the principal private parties involved.
What about in a recession? The “laws of economics” still apply, just as the laws of thermodynamics still apply during a natural disaster.
What is a recession? What causes it? It’s hard to say, and more educated heads than mine have struggled with the question. My best explanation is that in modern economies, it is primarily a psychological phenomenon, a loss of confidence.
The interplay between psychology and economics makes more sense when you understand wealth as ideas. In modern economies, measures of wealth are based on the collective estimate of what wealth will be available in usable form in the immediate future, rather than on physical manifestations of usable wealth in the present. In the past, economies were based on barter or a physical standard such as gold, and the psychology was less important. People didn’t believe in usable wealth until they saw it with their eyes—until new ideas had proved themselves and produced an edible or wearable crop. Over the last 200 years, we have transitioned to an economy that takes things on faith. We invest paper currency into new ideas and wait optimistically for a payoff.
This system has benefits. In fact I don’t think the technological advances experienced by the human race would have been possible without it, and our current population might not even be sustainable with existing natural resources without it. Ideas have allowed us to get to where we are, and the “confidence” economy is the environment that has allowed those ideas to grow and bear fruit so quickly.
But the “confidence” economy also has its drawbacks. Just as barter-based economies suffer sharp downturns when there is a natural disaster like a drought, the confidence-economy is prey to the whims of human psychology. FDR may have overstated it a bit when he said “The only thing we have to fear is fear itself.” Sometimes there’s a good reason for the bubble to burst. The loss of confidence seems to come at a moment when the human race as a whole realizes that it has overextended itself… made bad decisions based on an overly optimistic estimate of the usable wealth that will be produced by new ideas in the next span of time. It would be interesting to map whether recessions tend to happen at the end of periods without any great new “breakthrough” in technology. It seems those would be the moments when the human race looks around and says, “Wait, we aren’t really as well off as we thought we were.”
But hysteria can definitely play a role in making things worse. When people are worried about the economy, they hold back on coming up with or implementing new ideas. Or even if they’re willing to take the risk, they may not find anyone willing to invest in them. A bad economy becomes a self-fulfilling prophecy. The cycle may not be broken until collective expectations about wealth deflate to the level of actual physical wealth, or even lower… that moment when people begin to realize, “Wait a minute… whatever they’re saying on tv, I’m not so bad off!” Then they are ready to begin investing and dreaming again. The media and politicians can seriously delay reaching this desirable point if they continue to create hysteria with predictions of doom and gloom.
Unfortunately, the intuitive reaction of a lot of people, especially wealth people, to a recession is the reverse of helpful. For example, I just read that a famous actress only had one designer gown made for the Academy Awards, instead of letting five designers make gowns and compete for her business, because she thought that was more “appropriate” in a down economy. What she’s not considering is that she denied four designers (with all their attendant employees) the opportunity to develop new ideas into a physical manifestation of wealth. (I don’t know what typically happens to the four rejected gowns but I suspect they aren’t thrown away… they must become usable wealth somehow.) If she personally still has the cash to afford five gowns, she should have spent it and helped the economy (“usable wealth”) grow. If she feels guilty for being well-off when others are suffering, the best thing she could do would be to auction off the other four gowns and give the proceeds to charity.
What is the proper role of government in a recession? I’ll give you a hint: moving cash around is not it. As I said earlier, usable wealth (like usable energy) is always lost in any transfer. And unfortunately this is all the “stimulus” bill does. It takes wealth from sectors that are politically unpopular and moves them to sectors that are politically popular. The only possible good that could come from that is by tricking people into increasing their level of confidence based on a poor understanding of economics. But the stock market numbers indicate Wall Street is not buying it, and I don’t think most ordinary people are, either. It’s a little too transparent.
Other than the natural loss-in-transfer, the stimulus can cause the loss of even more wealth by deliberately pouring it into sectors that do not ultimately improve the human condition. For example, I haven’t read the whole bill but I suspect they’re still throwing money at the ethanol boondoggle. Ultimately that wealth is simply going to be lost when the human race rejects corn ethanol as a solution to our energy problems.
And that doesn’t measure the effect of wealth that is lost because new ideas are never born. Say Bill Gates is taxed a few million more per year to pay for all these “stimulus programs.” If he hadn’t been taxed that money, he would have invested it in some new technology that would create thousands of new jobs and improve life on planet Earth… but since that money is taken from him, he puts the idea on a shelf to pull out later, or never.
So if I ran the government in a recession, what would I do? Well, this would not be politically popular, but I would do as little as possible. Mostly I would scale back government activities that inhibit the development of wealth. I would deregulate industries where new ideas are choked by “standards.” (We would probably already have 100 mpg plug-in gas-electric hybrid cars if not for “federal standards.”) I would cut taxes to everyone (not just 95%) to free up as much wealth as possible for the creation of new wealth, so that physical manifestations could catch up to expectations. I would make every state a right-to-work state so that labor unions could not have a stranglehold on industries and run them into the dust.
Unfortunately, our government has run in exactly the opposite direction. I’m afraid the pork party won’t end until the American people as a whole get a better grasp of the fundamental laws of economics and realize that this isn’t working, and can’t ever work.
