Ralph Waldo Emerson, from his 1844 lecture, "The Young American":
Trade was the strong man that broke it [feudalism] down, and raised a new and unknown power in its place. It is a new agent in the world, and one of great function; it is a very intellectual force. This displaces physical strength, and installs computation, combination, information, science, in its room. It calls out all force of a certain kind that slumbered in the former dynasties...
Trade goes to make the governments insignificant, and to bring every kind of faculty of every individual that can in any manner serve any person, _on sale_. Instead of a huge Army and Navy, and Executive Departments, it converts Government into an Intelligence-Office, where every man may find what he wishes to buy, and expose what he has to sell, not only produce and manufactures, but art, skill, and intellectual and moral values. This is the good and this the evil of trade, that it would put everything into market, talent, beauty, virtue, and man himself...
The `opposition' papers, so called, are on the same side. They attack the great capitalist, but with the aim to make a capitalist of the poor man. The opposition is against those who have money, from those who wish to have money.
Isn't it fascinating to see the great transcendentalist speak so eloquently about trade?
"And if an epitaph be my story, I'd have a short one ready for my own: I had a lover's quarrel with the world." -- Robert Frost
Thursday, March 3, 2011
Wednesday, March 2, 2011
Rumi, the Romantic Alchemist: Copper over Gold
Rumi: There's courage involved if you want to become truth. There is a broken / open place in a lover...What's the use of old and frozen thought? I want / a howling hurt. This is not a treasury where gold is stored; this is for copper. / We alchemists look for talent that can heat up and change. Lukewarm / won't do. Halfhearted holding back, well-enough getting by? Not here.
Fiscally Responsible? Follow These Resolutions
An oldie from 2010, but still a goodie:
Don’t vote for any ballot measure that creates an unfunded obligation on the state budget or “locks in” more of the budget.
Constitutional provisions that limit the use of certain tax revenues or impose spending requirements on the budget without providing the resources to fulfill those obligations exacerbate California’s fiscal problems. These provisions range from dedication of sales taxes collected on gasoline to transportation to the “Three Strikes” law establishing minimum sentencing requirements.
Why don't we teach these civics concepts to kids in high school? More here.
Don’t vote for any ballot measure that creates an unfunded obligation on the state budget or “locks in” more of the budget.
Constitutional provisions that limit the use of certain tax revenues or impose spending requirements on the budget without providing the resources to fulfill those obligations exacerbate California’s fiscal problems. These provisions range from dedication of sales taxes collected on gasoline to transportation to the “Three Strikes” law establishing minimum sentencing requirements.
Why don't we teach these civics concepts to kids in high school? More here.
Tuesday, March 1, 2011
Monday, February 28, 2011
Netflix Finally Agrees to Caption 80% of Streaming Content!
Netflix has announced that 80% of its streaming content will be captioned by the end of 2011. It's about time. The issue of online captioning didn't appear to be on CEO Reed Hasting's radar at all in May 2009. That all changed with this May 2009 post.
Thank you so much to everyone who supported the online captioning campaign. We couldn't have done it without you!
Also, thank you to Netflix and CEO Reed Hastings for rising up to the challenge. We know it's not over yet--some people doubt that Netflix can meet its own goal of captioning 80% of its streaming content by the end of 2011--but at least the company finally appears to recognize captioning issue is an important issue.
Disclosure: I have either no shares or an insignificant number of shares in Netflix (NFLX). I continue to be a Netflix member, but have not watched more than a handful of movies online because of the captioning issue.
Update in January 2017: Reading Netflixed (2013), it appears Blockbuster's John Antioco had Netflix on the ropes when investor Carl Icahn disputed 5.6 million of Antioco's deserved bonus. The dispute led Antioco to leave Blockbuster, essentially bankrupting the company's online business (now Sling) and giving Netflix a clear path ahead.
Even more interesting is the "loss leader" strategy employed by Antioco to drive subscribers to switch from NFLX to Blockbuster Online. Having bricks-and-mortar stores once gave Blockbuster advantages--it could sell ancillary products to increase cash flow, and allow customers to return mailed DVDs to physical stores--while Netflix relied completely on online distribution. More importantly, the revenue from existing Blockbuster customers could allow it to create "loss leader" strategies to bankrupt the smaller Netflix--as long as franchisees were onboard. Such new strategies present fascinating anti-trust issues, because once a new competitor is vanquished, what prevents the sole winner of a complex, costly business model to drive up prices?
Thank you so much to everyone who supported the online captioning campaign. We couldn't have done it without you!
Also, thank you to Netflix and CEO Reed Hastings for rising up to the challenge. We know it's not over yet--some people doubt that Netflix can meet its own goal of captioning 80% of its streaming content by the end of 2011--but at least the company finally appears to recognize captioning issue is an important issue.
Disclosure: I have either no shares or an insignificant number of shares in Netflix (NFLX). I continue to be a Netflix member, but have not watched more than a handful of movies online because of the captioning issue.
Update in January 2017: Reading Netflixed (2013), it appears Blockbuster's John Antioco had Netflix on the ropes when investor Carl Icahn disputed 5.6 million of Antioco's deserved bonus. The dispute led Antioco to leave Blockbuster, essentially bankrupting the company's online business (now Sling) and giving Netflix a clear path ahead.
Even more interesting is the "loss leader" strategy employed by Antioco to drive subscribers to switch from NFLX to Blockbuster Online. Having bricks-and-mortar stores once gave Blockbuster advantages--it could sell ancillary products to increase cash flow, and allow customers to return mailed DVDs to physical stores--while Netflix relied completely on online distribution. More importantly, the revenue from existing Blockbuster customers could allow it to create "loss leader" strategies to bankrupt the smaller Netflix--as long as franchisees were onboard. Such new strategies present fascinating anti-trust issues, because once a new competitor is vanquished, what prevents the sole winner of a complex, costly business model to drive up prices?
Movie Recommendation: Gideon's Trumpet
It's actually a made-for-television film starring Henry Fonda, but it is beautifully done and a must-see. Gideon's Trumpet has everything--great acting and a look behind the scenes of the Supreme Court and our legal system. If you're a high school teacher, please show this film to your students.
Bonus: list of the best movies you've never heard of here.
Bonus: list of the best movies you've never heard of here.
Retired California Teachers Receive Lump Sums of $500,000
Oh, those poor, poor California teachers. They only get lump sums of $500,000 when they retire. Wait, what? Oh, you didn't know that? Keep reading.
"Of the 12,568 California educators who retired in fiscal year 2007-08, the median number of years on the job was 29 years. The average CalSTRS pension was $48,180 per year, which was about 62 percent of the average highest salary." See here [Update: link no longer works.]
Assuming a 6% rate of return and 29 years of retirement, you and I would have to save up almost $17,200 every single year for 29 years straight to get the same level of retirement income as an average California teacher. Why? Because most of us would have to buy an annuity on the open market to get something similar to a pension.
To give you an idea of how expensive these pensions are, let's do the math: to get $48K a year for 17 years, we would have to generate a nest egg worth about $500,000. Basically, California taxpayers provide the average California teacher with a nest egg of $500,000 upon retirement--the market cost of paying someone about $48K a year for 17 years of retirement. (Note: Hypothetical assumes you start teaching at the age of 31 and work 29 years, which means you're 60 years old. You then retire and then expire at 77.)
Will most Californians have at least $500,000 when they retire? If not, why are they responsible for guaranteeing the average teacher an annuity worth about $500,000? Also, how many of us can afford to save $17,200 a year? Even if private sector employees maxed out their 401(k)s, they couldn't put $17,200 a year in the account [as of 2011]. And people still think teachers, on average, are underpaid. Perhaps the newer and younger ones are--but that's not the taxpayers' fault. It's the union's fault for creating and enforcing a compensation system that shoves so many available taxpayer dollars in the back-end of a teacher's career rather than in the front.
P.S. Want to do the annuity calculations yourself? Here is one version of an annuity calculator.
Bonus: It looks like I may have underestimated the value of the pension. More here. The Money Blog calculates that as of 3/2011, a $300,000 lump sum would would get you just $1300/mo in annuity payments.
"Of the 12,568 California educators who retired in fiscal year 2007-08, the median number of years on the job was 29 years. The average CalSTRS pension was $48,180 per year, which was about 62 percent of the average highest salary." See here [Update: link no longer works.]
Assuming a 6% rate of return and 29 years of retirement, you and I would have to save up almost $17,200 every single year for 29 years straight to get the same level of retirement income as an average California teacher. Why? Because most of us would have to buy an annuity on the open market to get something similar to a pension.
To give you an idea of how expensive these pensions are, let's do the math: to get $48K a year for 17 years, we would have to generate a nest egg worth about $500,000. Basically, California taxpayers provide the average California teacher with a nest egg of $500,000 upon retirement--the market cost of paying someone about $48K a year for 17 years of retirement. (Note: Hypothetical assumes you start teaching at the age of 31 and work 29 years, which means you're 60 years old. You then retire and then expire at 77.)
Will most Californians have at least $500,000 when they retire? If not, why are they responsible for guaranteeing the average teacher an annuity worth about $500,000? Also, how many of us can afford to save $17,200 a year? Even if private sector employees maxed out their 401(k)s, they couldn't put $17,200 a year in the account [as of 2011]. And people still think teachers, on average, are underpaid. Perhaps the newer and younger ones are--but that's not the taxpayers' fault. It's the union's fault for creating and enforcing a compensation system that shoves so many available taxpayer dollars in the back-end of a teacher's career rather than in the front.
P.S. Want to do the annuity calculations yourself? Here is one version of an annuity calculator.
Bonus: It looks like I may have underestimated the value of the pension. More here. The Money Blog calculates that as of 3/2011, a $300,000 lump sum would would get you just $1300/mo in annuity payments.
Also, see Margaret Collins, July 1, 2011, “Delay Taking Social Security, Add Annuity to Survive Retirement”: “For example, a contract [annuity] purchased for $95,500 by a 66-year-old couple in Florida may provide $4,262 a year until the death of the surviving spouse and include increases for inflation."
Bonus II: from Joel Klein, The Atlantic, June 2011:
[C]onsider the financial burden that comes with providing lifetime benefits. Given the time between first putting aside the money to fund such a “long-tail exposure” and having to begin paying it, the amount “reserved” by the employer necessarily depends on a host of imprecise assumptions—about the rate of return that the money invested in the pension fund will earn, about how long employees will live, and even about how much overtime employees will work during their last few years, which is normally included in calculations of the amount of the pension. Each dollar set aside this year to cover the ultimate pension exposure must be taken from what would otherwise be current operating dollars.
Consequently, elected officials have had every incentive to make extraordinarily optimistic assumptions about the pension plan—or to simply underfund it—so they can put as little as possible into the reserve. Unfortunately, but predictably, that’s exactly what has happened: most states “assumed” they would get an average 8 percent return on their pension reserves, when in fact they were getting significantly less. Over the past 10 years, for example, New York City’s pension funds earned an average of just 2.5 percent. Now virtually every pension plan in America that covers teachers has huge unfunded liabilities. A recent study by the Manhattan Institute estimated the total current shortfall at close to $1 trillion. There’s only one way to pay for that: take the money from current and future operating budgets, robbing today’s children to pay tomorrow’s pensions.
Bonus II: from Joel Klein, The Atlantic, June 2011:
[C]onsider the financial burden that comes with providing lifetime benefits. Given the time between first putting aside the money to fund such a “long-tail exposure” and having to begin paying it, the amount “reserved” by the employer necessarily depends on a host of imprecise assumptions—about the rate of return that the money invested in the pension fund will earn, about how long employees will live, and even about how much overtime employees will work during their last few years, which is normally included in calculations of the amount of the pension. Each dollar set aside this year to cover the ultimate pension exposure must be taken from what would otherwise be current operating dollars.
Consequently, elected officials have had every incentive to make extraordinarily optimistic assumptions about the pension plan—or to simply underfund it—so they can put as little as possible into the reserve. Unfortunately, but predictably, that’s exactly what has happened: most states “assumed” they would get an average 8 percent return on their pension reserves, when in fact they were getting significantly less. Over the past 10 years, for example, New York City’s pension funds earned an average of just 2.5 percent. Now virtually every pension plan in America that covers teachers has huge unfunded liabilities. A recent study by the Manhattan Institute estimated the total current shortfall at close to $1 trillion. There’s only one way to pay for that: take the money from current and future operating budgets, robbing today’s children to pay tomorrow’s pensions.
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