OK, I’ve pretty much given up on trying to convince conservatives that there is a difference between micro-economics and macro-economics. They just won’t or can’t get their heads around the fact that the U.S. budget and economics is NOT your personal checking account. I can’t seem to get through on the fact that a sovereign currency issuer like the government of the U.S.A. is different and does its accounting differently than a currency issuer like an individual, a company, state, county or city. Instead, for once, I will use their own argument against them. If the government of the U.S.A. were just like a private citizen (and it isn’t) then it is not and will not “go broke”. Now the U.S. government (a sovereign currency issuer) is about as different an economic entity than a private citizen as one can find, but for those who refuse to wrap their heads around what THAT means let’s use this very limited analogy for once.
How would you feel if you have expenses of $130,000 a year (say you were doing a remodel and a family member was in rehab, not that the reasons matter), you owe $96,000 outstanding in total (mortgage, car loan and credit cards), you own your own company and take a salary of $100,000, but could give yourself a raise any time you decide you really need one and you also have a diversified investment portfolio of $1,000,000.00 in real estate, minerals gold and investments but everyone says you are going broke? Talking news heads in local media sat you are bankrupt. Folks are talking in coffee shops about your insolvency. Pundits and politicians take for granted that you don’t have two nickels to rub together and the credit agencies are publically threatening to downgrade your credit. It would make you furious wouldn’t it? You know it isn’t true, yet everybody seems to only care about your income verses your expenses and what you owe. This is even though you could pay it all off instantly if you wanted to and have a ton left over. AND you can raise your salary to $130,000 any time you have the will to do so. Heck, you could raise it to $200,000 and put away some savings if you wanted, but it might not be all that good for your company so you take the short term hit in your own savings. It makes no sense because you can do basic math and you are not stupid, but people are refusing to consider this rationally by taking your wealth into consideration as well as your income, debt and deficit. This is exactly the current situation with the U.S. government today. All discussion is only over spending, debt, deficit and taxes, yet no one takes into account the wealth of the U.S. government (or other factors) when making the absurd assertion that the government will soon become insolvent.
Consider carefully for a moment the inane discussion that has been going on now since the financial crisis of 2007/2008 about the U.S. government supposedly at risk of becoming insolvent. Those who talk about it mention the national debt and our annual deficits (debts) as well as taxes (income) and borrowing (financing) such as T-Notes and bonds. They never seem to mention, however, the assets that the U.S. government owns. Assets such as land, buildings, equipment, mineral rights, gold and student loans. When people talk about personal or business bankruptcies they always must take into account both a person’s income AND their wealth or assets. That is only sensible, right? You can’t call a guy who lost his job and has no income, but has assets of $1,000,000 broke if he only owes $100,000 now can you? This just isn’t mentioned when discussing U.S. Government solvency though. It makes me wonder why not. Is it just inconvenient or is there another agenda involved? Here is a list of the estimated assets and income sources of the U.S. government as compared to the liabilities:
- ~$17.1 Trillion (in dollars)
- ~$600 Billion in deficit for 2013 down from over $1 Trillion recently
- 900,000 separate real assets totaling over 3 Billion sq. ft.
- Mineral rights covering 2.5 billion+ acres of land
- 45,190 under or non-utilized buildings with operating costs of $1.66 billion annually
- Oil and gas reserves estimated at roughly $128 Trillion
- Taxing authority to tax as much as Congress has political will to pass (basically guaranteed income forever)
- Unlimted ability to create dollars
- Unlimited ability to create and sell securities and banks that are required by law to buy them
- Over $400 Billion in gold
- Over $1 Trillion in student loans outstanding
Asset Total: ~$200 Trillion
So let’s say that even if these assets are sold off at far less than their full value, the assets of the U.S. government, above and beyond its ability to print money and tax for income, has at least $100 Trillion in assets. This is more than 6X its entire outstanding debt! It is more than 100X its current deficit! That is not even considering that a good chunk of the national debt is money that the government owes to itself (intra-governmental debt) and the largest share is owned by the American public itself.
So in a nutshell, because of the wealth (the total assets available) of the U.S. government, it is not and will not become insolvent in our lifetime or beyond unless the American people are convinced to do something incredibly stupid and completely against their own interests. There are at least two more solid reasons the U.S. government will not go broke, become insolvent or go bankrupt in addition to just its wealth so look for those in upcoming posts.
Most journalists, politicians and lay people unfortunately do not seem to understand much at all about macro-economics from what I’ve read of articles, speeches and comments on the Web. They don’t get that there is a significant difference between macro-economics and micro-economics much less what that difference might be. They seem to think that because they can balance their checkbook and are familiar with how the budget and balance sheet of a household or business works that they are qualified to have an informed opinion of how the federal budget, national debt and deficits work and their long term importance. Unfortunately most of the economics taught in universities for the last 40 years has been based on commodity based monetary systems and has pretty much completely ignored the fact that all two hundred plus of the world’s nations have gone to some sort of fiat monetary system. Furthermore, thinking that the budget of a sovereign currency issuer (does much of anyone know just what that means and it’s fiscal implications?) with a fiat monetary system should be handled the same way a household or business budget is handled (even the accounting/math are different because the private sector doesn’t have any currency at all until there is a debt/deficit on the sheet of the currency issuer) is just plain crazy if only the scale and desired outcomes are considered and there is so much more to consider.
I needed someplace to list and summarize the best economics articles I have found across the Web, which will help us all understand the mechanics and import of the fiscal matters that are so much in the news today and are likely to affect the future of our country significantly.
Which led to a Door64 member posting a discussion on LinkedIn and of course I jumped in with a comment because this is something I know a bit about (just a bit) – Door64 Discussion on LinkedIn My comment read as follows:
John Rothgeb • “This should read “Hacker-Proof You Passwords” because you should not have just one password, you should have a different password for each site or at least each important site you care about (I have one password for unimportant sites that I’m forced to log into just to get things to work on certain sites). I know from working at large banks and finance companies on implementation projects involving finance and large amounts of data and money (in the cloud now) that most of the finance people, some of the IT people and lots of the project people all use shared user accounts and passwords (or write their passwords down in clear text files on their laptops or in directories on servers) in some systems and ignore sensible attempts to follow basic security guidelines. Convenience and the necessity to be productive in one’s job trump basic security practice and management usually refuses to even contemplate the issue or address it with education and training (they usually just resort to threatening memos from IT). It is a sad state of affairs.
Of course, the problem is that most people’s brains are not configured to remember one or two, much less fifty or a hundred passwords that are fourteen characters or more (the latest common recommendation) and contain lower case and capital letters, numbers and punctuation marks. A much better solution in many cases is two factor authentication and on top of that there are many emerging biometric solutions that may make passwords obsolete (thank goodness).
There was just an article in Wired Magazine and an hour show on the Diane Rehm Show from WAMU on internet/password security and how the age of passwords may be over. Ironic and somehow appropriate that just as maybe a lot of us all start to finally get our password act together (I’ll believe it when I see it) that the age of the password might be over.”
If LastPass is good enough for Steve Gibson, then it is good enough for me. I just changed my master password (I usually use proper names of people and things, from my life that are memorable to me only, interspersed with numbers and symbols for my passwords and I have a few that I rotate between sites as I make up new ones from year to year) and regenerated new passwords for most of my sites as well. I do this semi-annually so unless someone completely compromises my LastPass account fully, most of my sites and info should be safe. I would be safer if I just had this info on a USB key and not in the Cloud, but then it would be difficult if I forgot or lost the key of course.
Your thoughts on security in general or my security in particular (or yours if you want to share) would be greatly appreciated here. Thanks!
One of the best things I’ve seen on TV lately! Krystal Ball from The Cycle on MSNBC debunks the pernicious and totally false analogy that the federal budget is just like your household or business budget and it should be balanced or even more silly, that balancing it should be easy. Plan fact is that the federal government is a sovereign currency issuer and you, your household, your business, your city, county or state are all currency users (not sovereign) and the way accounting (the math) is done is different! When a currency user earns a dollar it is added on one side of the balance sheet as $1. When the federal government creates a dollar to spend (it doesn’t need to tax or borrow to spend) that is entered as -$1 and $1 is added to the deficit and debt with no absolute requirement to tax or borrow to make it balance. If the federal government does not spend $1 and add $1 to the deficit and debt then there is no money for the private sector to save, loan out, pay taxes with or spend. That is how the math works and without deficit and a national debt there is no currency for the private sector to use. Period.
Krystal Ball debunks economic myth in “Come On Y’all!
Recently I attended the new Formula One (F1) American Grand Prix race at the new track in Austin Texas and it got me to thinking about economics. No sensible person would recommend buying or starting an F1 team (or any racing team for that matter) to compete for a season and run two cars without fully understanding internal combustion, physics and aerodynamics, spending tens or hundreds of millions of dollars would they? If that is true for just about everybody, then why do we as a country and society (E.U. and many other countries included) insist on running macroeconomic systems, monetary systems and fiscal systems since 1971 (when Nixon took us off the Gold Standard) without truly and fully understanding to the best of our ability how the system actually works now? When millions or billions of people’s livelihoods and indeed lives hang in the balance of our leaders and policy makers understanding this in an apolitical way then it is monumentally irresponsible not to do so. Only after understanding to the best of our ability how a fiat monetary system and its related fiscal system works can we then responsibly make policy decisions based on our best knowledge. Why then do leaders, pundits and even economists make statements about economics that can be relatively easily be shown or even proven to be completely false?
Currently running an F1 team without any knowledge of the laws and forces that dictate how to build or tune the car is quite close to what we are doing with our economy by not understanding macro economics properly and making political decisions, that have serious macro economic effects on people and businesses, based upon misinformation and incorrect understanding of how our fiscal and monetary systems actually work. The bottom line is that a sovereign currency issuer like the USA does not operate like a household or business, yet (since that is all most of us really understand) that economic model seems to be the common knowledge upon which the vast majority of us base our decisions upon.
Currently there is a great deal of debate about how the U.S. government budget, deficits and debt and how those affect the economy, growth and creation of jobs. There are even alarmist hysterical (completely false) pronouncements that the USA is broke or bankrupt, will soon go bankrupt or will become just like Greece. These statements are completely false. Unfortunately, most people, including many public figures, business people, politicians and even economists do not understand the macroeconomic fundamentals upon which their pronouncements or (kindly referred to as) arguments are based.
Most people, economists probably excluded, do not know that modern macroeconomics started with John Maynard Keynes when classical theory could not explain the Great Depression, that the Bretton Woods Conference put most of the modern economic structure and institutions in place or that Richard Nixon ended convertibility in 1971 to take us off the gold standard and create the current fiat monetary system (which the rest of the world has followed). This leads us to a very awkward place where people are talking and arguing in a very committed fashion about things that they don’t begin to understand the basic structure, accounting and math behind it. Most of the conventional wisdom applies microeconomic concepts and understandings to macroeconomic situations where the do not apply. Even worse, mainstream economics is broken and much of the economics taught today in college is still based on the gold standard era despite the fact that the structures and accounting underpinning modern economics has changed in fundamental ways. This leaves us in a very dangerous place where the arguments are basically economic theology and ideology much akin to how many angels can dance on the head of a pin when they should be about facts and proven mechanisms to put people to work and promote economic growth. We are getting to a dangerous point where we are starting to see bigger and more frequent economic crises and we will have to deal with them in a pragmatic way or risk worse than the Great Depression. So far we are muddling through, but I do fear for the future.
As far as debt goes, people today, including many mainstream economists, just do not recognize the basic accounting fact (math really) that the government debt of a currency issuer is not remotely analogous to household debt (ie. debt of a currency user). Why is this true? The issuer’s debt is not a burden, it’s simply the result of the users’ decision to save rather than spend. All savings by users in banknotes, deposits, or treasuries create a corresponding liability with the issuer as a matter of accounting. The more users choose to save the more debt the issuer will have. In this blog post I will add videos, links and comments that should help understand the macroeconomic issues more fully and on a factual basis:
Friedman has a more holistic analysis that includes the macroeconomics. I like his take on it. Here is excerpt from interview by the Austin Statesmen:
Deficit spending? The debt? Friedman says we all need to relax a little.
“If I were to look at your credit rating, you look at three variables: your income, your debt and your assets,” Friedman said. “When we look at a nation’s standing, we only look at current income and debt; we never ask what are the assets of the nation.”
This is where the United States has a distinct advantage over, say, Iceland when we have a financial crisis: We are loaded.
“The U.S. has extraordinary national assets,” Friedman said. “We once measured it at Stratfor at 65 to 330 trillion (dollars), depending on how you counted it.” For examples, how does one value a national park or American universities?
“In that world, a $3 trillion deficit isn’t that scary,” Friedman said. “It’s not a trivial amount, but we are able to grow assets very quickly by printing money, taxing, selling investments overseas, a whole range of things.”
Mike Norman, Chief Economist of John Thompson Financial on U.S. Debt and Interest rates
Mike Norman, on Debt rollover and economic journalists misinformation
In order to understand how macroeconomics actually works from an accounting and mathematical perspective rather than from any ideological perspective there has grown a discipline know as Modern Monetary Theory or more properly Monetary Realism. The development of Monetary Realism represents a paradigm shift in economic thinking which places the center of analysis on the accounting behind monetary operations in order to fully understand the mechanics. Just as every asset has a liability, the issuer’s debt is dollar for dollar equal to the currency users’ savings. If mainstream economists don’t recognize their mistakes in not starting with this view the “dismal science” will likely continue to cause collateral damage to the US economy and the American public. Below is a primer on Monetary Realism and modern money from one of the leading thinkers in the MR arena, L. Randall Wray. This most interesting thing about this video is that much of what he teaches about MR is little known or discussed, yet underpinned by pronouncements by the St. Louis Fed, Monetarists (Milton Friedman disciples), Bernanke, Greenspan and most economists alive today.
L. Randall Wray — MODERN MONEY: the way a sovereign currency “works”
Mike Norman, on the Gold Standard and Commodity based monetary systems
I just read an article in the Atlantic about teaching and teacher and for the first time it was an article that made real sense. It is called Bootcamp for Teachers and it makes the point that we train military jet pilots for years before putting them in a multimillion dollar jet, but we basically just throw teachers into the deep end of the pool with as little as three or four months of student teaching where they are expected to succeed on their own with little supervision or support (and basically being the nexus between parents, administrators and students and having to manage all three at the same time as trying to teach the students). The article illustrates this point by interviewing an Air Force technician George Deneault who is now a special-ed math teacher, who basically walked into a Virginia classroom cold and says being a military commander flying combat missions is easier than being a teacher because the military prepared him for it, but no one prepared him for what he had to do as a teacher. There is also a good article in that edition of Atlantic about the resurgence of American farming, its relation to education in America and lessons we can learn from “The Triumph of the American Farm” for our economic future.
In all my research and reading about education, not to mention my experience as a substitute teacher in public schools and as a technical trainer in software companies, I have concluded that 99% of teachers need help, training and organization in order for our schools to be more successful not demonization and firing. Administrators, politicians and parents have basically abrogated their responsibilities and played the blame game. Yes, teachers unions have played some role in retarding progress, but who else has teachers backs? Unless we really want this country to turn into a true plutocracy (which is the direction it is headed) with 1% haves and 99% have nots and no middle class we get rid of our public education for all at our peril. Private for profit education will not provide an education for everybody which is what we require in a globalized technological world. It will only provide an education for those who can afford it. Education for all, a good education, is a public good. Privatized education would have thrown away Stephen Hawking and Albert Einstein in a second and no one call tell us where the next Einstein, Hawking or many other important and immensely successful people from humble backgrounds will come from. The only thing certain is that they will not all come from upper middle class households who can afford good private schools and without good free schooling for all many will not realize their full potential. Some problems do not succumb to the power of the market. Just look at health insurance in the last 50 years. If the market could solve that problem they would have 330 Million insured customers in the U.S. rather than about 280 Million.
For the longest time I have been a bit perplexed by what “conservatives” really mean when they say things like they, “believe in smaller government” and “less regulation is better for business”. Do they really mean that they wanted to get rid of most if not all “entitlements” and many departments of government except the military? By the way, that is really a more libertarian position or even reactionary but not by definition “conservative”. After all, our government is a large part of the economy (especially of aggregate demand) and many businesses rely on government contracts to employ thousands of private sector workers and support other businesses as well. Haliburton and BlackWater both loved all the government money they got and still get from the Iraq and Afghanistan wars. Would the right really deny poor people, especially the disabled, basic healthcare via Medicaid? Do they really want to throw seniors off their well earned Social Security, keep poor kids from reading by eliminating RIF and allow Monsanto and the oil and chemical companies to poison the air and water? Well, yes, of course there are some social Darwinist conservatives that would certainly like this and there are some immoral, unethical and greedy conservatives that just don’t much care about others they don’t know, but being a progressive liberal (though I strive to be pragmatic too) I’d like to believe that most conservatives are not like this. They just have core beliefs that I can’t quite get my head around enough to understand their words (and vice-versa probably as they keep saying that liberals all want more and bigger government which clearly isn’t true). There are lots of good conservatives who don’t want those things if asked about them individually, yet they seem all to still utter the “smaller government” mantra like the legions of NS-5 robots in iRobot enforcing a human curfew.
Then a few days ago it hit me out of the blue. I think most conservatives may really mean they want less government bureaucracy when they say they want “smaller government”. The funny thing is that they seem to not mind or even quite like bureaucracy in large corporations. Then the waste and inefficiency (which is definitely there if you’ve ever worked for a large multi-national) is pretty well covered up by the profits generated by efficiencies of scale. If you ask them about that waste and inefficiency I’ve found the general response is that this is none of our business and it doesn’t’ matter anyway because the company is profitable. Unfortunately, this sounds a lot like China saying that human rights violations are “an internal matter” an no one’s business but their own. I think the share holders would beg to differ with conservatives that the bureaucracy, waste and inefficiency in our big businesses (and smaller ones for that matter) are “none of our business” just like the outsized pay for executives, especially the ones who fail and get golden parachutes. It is hypocritical to abhor bureaucracy, waste and inefficiency in government and thereby want to eliminate government, but not to recognize that these are traits of all human organizations. It is sheer stupidity though to deny this exists in our businesses as well since it is there to see for any person with eyes and half a wit.
If what conservatives really mean, along with many progressives, is they they believe in less bureaucracy and more efficiency in government, why only in government? Since large corporations (and large non-profits for that matter) have lots of bureaucracy they can’t very well say that because it might be interpreted as being critical of business, free markets and capitalism. From my 35+ years working in companies I have seen that companies definitely do have easier and more efficient ways of eliminating bureaucracy than governments do, though after doing work in several insurance and financial companies, their way of eliminating bureaucracy and streamlining things definitely does not always work well. I would hope at some point we could all agree that human organizations, whether they be for profit public companies, privately held companies, governments or non-profits all have many of the same weaknesses (and strengths) foibles and difficulties, though they are often expressed in rather different ways. I do realize that most conservatives don’t think t hey government should be in the business of feeding and housing people, protecting them from themselves and especially helping guarantee them good health, but if the government doesn’t do it who actually will? These are all goods that society can benefit from and if you can’t do it well for profit then that pretty much leaves the government to try to do it. Do they really believe that the government shouldn’t be in the business of educating people? Really? Perhaps one could argue that only the local governments should do these things (how well have block grants really worked) but are they saying that we really don’t need national standards for education in a globalized world? After all this is a nation not only of immigrants, but of movers who mostly have families spread from coast to coast and many children today don’t even settle in their college town, much less the town of their birth or childhood (if indeed there are only one or two of those), but often settle where the jobs are many miles or even states away from their siblings and parents. Both the society and business benefit from everyone getting a similar type, level and quality of education. Let’s all agree on making the way government functions more efficient (not the way in which we govern ourselves though as efficiency is often the road to dictatorship) and effective by learning from mistakes, studies, the private sector and applying common sense. Even eliminating programs and departments that are redundant or don’t work well. After all, I really do like the Texas Sunset law and I would LOVE a smaller government that did the same or more things government does today and does it better. Then we can have the further debate on what it is that government actually must do vs. what it should do or can do well.
Oh, and while we are on it, it recently occurred to me that when conservatives, at least “good” conservatives who care about the society and the country, say they want less regulation or that less regulation will stimulate business and hiring what I think they really mean is that they want to eliminate regulations that are barriers to entry for entrepreneurs. Often regulations are set up or even written at the behest of established businesses that want no competition and no disruptive new technologies (or to control them themselves) to emerge. Also, bad or badly written, cumbersome or perverse regulations should be made better or eliminated. I do think a few conservatives actually would like to get rid of all air, water and ground pollution standards (effectively making us China – grey skies anyone?) so corporations can just pollute at will. Unfortunately, these and the regulations that mandate fairness to workers are often the regulations that the right goes after to try to eliminate rather than bad or inefficient ones. I do wonder why. I mean, find a conservative who thinks it is OK for chemical and oil companies to pollute the Mississippi in Louisiana in violation of Louisiana’s existing environmental regulations and it is doubtful that they would invite that same disregard of laws and pollution in their neighborhood. What is all that about?
One final thing. It is clear that there has been a significant structural change in our economy with respect to how jobs are created and eliminated. With globalization, outsourcing and the onward march of technology making many businesses more efficient and productive, once jobs have gone, almost no matter what you do, they will resist coming back. I do have a proposal to address this. Obama wants to raise taxes on the wealthiest. ,Many large highly profitable corporations pay almost no taxes like GE. Romney and the conservative want to lower taxes all around to 25% ostensibly to boost the economy and encourage the “job creators”. Let’s compromise. Let’s raise the tax rate on the top 5% (yes me included) and corporations to 45% and eliminate the loopholes and corporate welfare. We will however, provide one big loophole and incentive to get the rate down to 22.5% doing Romney one better. The one big loophole is that if indeed you are a job provider or better yet, job creator you can get your tax burden lowered up to 50% just by providing and/or creating jobs and proving it. One other caveat, the higher the wages you pay, up to a certain level, say $60 or $75K, then the higher the tax break you get. This will do at least two things; it will incentivize businesses and individuals to find ways to hire people and make them productive enough to pay their salary and expenses and then some and it will encourage them to create high(er) wage jobs to increase their tax breaks and raise median salaries in the U.S. I say this should be an excellent way to unleash the private sector on creating not only American jobs, but great paying American jobs. What do you say? Tell me what you think of this by adding your comments.
“The Cloud” is basically the movement of all the data and applications to more central locations (servers in big data centers if you care) where they can be managed and updated by experts. Our many overlapping, fast and nearly ubiquitous networks (wired, cell, wireless, Internet, etc…) are an integral part of “The Cloud” as well. Apple has it’s iCloud and you see adds for “Cloud Apps” all over. You’ve heard lots of buzz about “The Cloud” and read an article or two, but it might not yet be clear to you what this “Cloud” thing is. It probably sounds like some new twist on web sites, but is it just more tech buzz or is there some substance? You would like to ask someone, “What is this whole cloud thing about?” but who to ask? I think I might be able to answer this question in a way that makes sense to those who care little for the technical and gee-whiz details.
There is some substance to “The Cloud” but as with almost everything in life, it has upsides and downsides. I’ve been computing a long time and I’ve also worked in the non-techy world, trained both technical people and business people and owned my own businesses so I think I can put this in terms that those who care little for technology can understand. If you thought “The Cloud” is just a new twist on websites you are partially right! We all use applications and they utilize data which is really what computing is all about. We have had database backed websites for a long time now, but the cloud is now turning those websites into real applications so that the applications and the data they and you depend upon no longer need to reside in each individual device with a processor. The cloud links those devices together and shares the data among them where ever you need it. The cloud is about having all your data in one central place where all those devices can use it. More importantly, the cloud is about maximizing the effectiveness of all the computing resources we have by linking them and sharing them. Initially this will make it more profitable for companies to build out “The Cloud”. Eventually it will make advanced computing innovations more available and less expensive for everyone. So to put it succinctly, “The Cloud” is the movement of all the data and applications to more central locations where they can be managed and updated by experts.
You might ask what is in this movement to “The Cloud” for me and that would be a very good question. I’ll suggest some of the possibilities for how ”The Cloud” might benefit you based on many of the problems I’ve seen my friends and family struggle with recently. First of all, if you have any data on computers and phones at all, then having it all in one location where updating a piece of it on one device causes it to be updated everywhere saves you lots of time and frustration. Next, having all of your applications in one location means that if you happen to do some work on your office computer but later must check or update when you are away from the office, you can do that from just about anywhere if you have access a network without having to interrupt what you are doing by leaving to go to your office computer. Again, time, interruptions and frustration are all averted by “The Cloud”. Also, have you ever had to write something down or copy it to a USB drive to move it to a friends computer by “sneaker net”? If the data is in “The Cloud” you can just access it from that other computer or easily send it to the friend. Finally, having all your data in “The Cloud” means that it is managed, secured and backed up by experts so you don’t have to suffer through endless updates and problems doing all that yourself. It also means depending on those nameless faceless experts whose connection to you is through their company, but since we all generally do such a poor job of managing our computer and data resources anyway, those experts are a step up even if they are not yet near perfect.
Depending on how you use computers, and by computers I mean your smart phone, laptop, iPad, eReader or any websites you regularly use, there are myriad other advantages that “The Cloud” may bring you as you adopt various facets of it. I have to say though that this does not come with no downside. The two downsides that are most likely to affect you in the near term are the network and the fact that even experts aren’t perfect and don’t get it right all the time. Let me explain. Since much of “The Cloud” now uses wireless networks for access from devices like an iPad and wireless networks can be spotty or non-existent in places and very expensive (up to $5 a minute and $20 per MB) at times as well, you may not be able to get to your data and apps sometimes or access may not be affordable at a reasonable price. Fortunately, this aspect of cloud computing will change over time and has already changed considerably as millions and billions more people begin to own computers and cell phones. Even though it is nice to have experts managing your backups, updates, security, virus checks and such they may make mistakes or not address a new threat or problem in time to save your data and applications. On top of that when those experts are in “The Cloud” they are pretty much nameless and faceless so they may not always be invested in saving you from pain. The good news is that in most cases since you have been doing a spotty job at best of managing all this, at best and “The Cloud” will make it much easier for you to ensure that their mistake does not cause you undue pain. Basically only the data (and your time) is really valuable. In most cases everything but the data can be pretty easily restored so if you keep a local copy of all your data you are pretty much covered if an when there is a mistake in “The Cloud” that affects you.
I hope that gives you all some idea of what “The Cloud” is and what it can do for you. In my next few blog posts I will discuss the various challenges to universal adoption of “The Cloud” that I see in the future, as some more of its promises and examples of how it can make your computing life easier and what it can do for you.
Lest you think that commenting on politics and economics is all I do, I thought I would put up a couple of shots of the wines I have been drinking recently with my friends at Glenn Moore’s monthly wine dinners. Though much of the wine cannot be bought today as it has been stored in various friends cellars for years, I will attempt to put approximate pricing on wines that are available in our local stores so you can look for them if you choose. We sampled the wines below at the monthly December wine dinner we often have.
Glenn Moore's Tuesday Wine dinner at Mother's - December 2011
Needless to say there was an interesting variety going from vintage champagne, a nice Sicilian white, a young Cal chard, a 1983 Reisling and a Sauterne to a young but good Argentinia, a well aged St. Julien and St. Emilion, an Aussie Cab and a great California Cab, young and old. If I remember correctly the 1983 Groth from Napa was the real stand out, but the 2007 RAZI Chard (~$35) from Sonoma was great as well and the Reisling and Sauterne were incomparable!
This January we celebrated Glenn’s birthday on a Friday instead of our usual Tuesday meeting and had another amazing collection to sample from below!
Wines we sampled at Glenn's Birthday dinner 2012
We do like old wine so the Brunello and the 1983 Talbo St. Julien were the biggest hits, however, the 2005 Bressan (~$35) from the Veneto showed as becoming a great wine and should be drinkable through 2027 or so. The 2008 Pere et Fils Bourgogne was a nice French chardonnay for the price (~$20) and both the Mumm’s Napa Brut Rose and the Mure Cremant de Alsace (both around $20) drank very nicely.
Everything from Domain de Mourchon is always good and the fact that the prices have risen by 50 to 100% recently are proof enough. If the Grande Reserve is too rich for your blood their regular 2009 Cote du Rhone goes for around $20 and is wonderful. There is also an excellent 2008 Cairanne from nearly the same area I sampled recently for around $15 which is just as good.
This is my regular house wine and I laid in enough to drink for another year or two until I find something as good (the Cairanne might be the one) I recently saw the 2009 vintage north of $25 a bottle a Central Markup. I laid in a couple of cases for around $13 a bottle to go with teh nice 2004 Barbera and 2005 Cote de Beaune that I drink for everyday wine. If you find a 2007 of this fine old vine wine pick it up.
Purchase at the vinyard in 2005 this was drinking great in 2011! All the Michel-Slumberger wines I’ve ever had have drunk great I have to admit.
This Sassela is always wonderful for around $23 and it does best drunk fairly young (5 to 10 years) and decanted.
This Chateau Gloria, though not as old as many of the wines we often drink was another real standout, but then I always love St. Julien’s.
I became very interested in economics around the time the Great Recession of 2008 hit. I had been paying attention to global economics, but really didn’t know much beyond what I was taught in Macro Economics 301 at U.Va. a long time ago (yes, I took micro too). Unfortunately, it didn’t really equip me to understand all the issues around the Fed, Fannie Mae & Mac, Lehman Brothers, CDOs, derivatives and a fiat money economy since what I was taught was based mostly on Gold Standard economics. I did, however, begin to realize that much of what people were saying was dead wrong because they were talking about it in a micro-economic sense not a macro-economic sense and I did know that the two were quite different. For one thing I knew that we were no longer on the gold-standard, the U.S.A. has guaranteed income in perpetuity from its taxing authority, the Treasury could print or create as much money as is needed by the economy or the government, and I knew the U.S. dollar was the reserve currency of the world. Those three alone made the U.S. economy and the dollar the envy of the world and pretty much guaranteed we were not and could not go bankrupt as people were saying. After all, the U.S. has amazing resources and holdings in addition to its taxing authority so using an analogy is a man who owes $50 million and spends $1 million a year, but owns $250 Million broke or going bankrupt? No, of course not, especially if he is investing in a business that will eventually bring in $2 Million a year. I worked for a company that didn’t make money for over 10 years, but did a successful IPO and was growing by leaps and bounds and it wasn’t bankrupt either. I wondered a great deal about Dick Cheney’s famous statement that, “deficits don’t matter” and how that related to our budget and our national debt. Finally, I had run across the curious fact that every time we run surpluses and try to retire debt we run into a recession or depression. Look it up if you like so here are the years: 1819, 1819, 1837, 1857, 1873, 1893, 1929 and 1999. Here is a particularly cogent explanation of why a sovereign government is absolutely NOT like a household or a business – http://www.newdeal20.org/2010/02/10/the-federal-budget-is-not-like-a-household-budget-heres-why-8230/
All this and the screams of what have sometimes been called the “deficit terrorists” for their fanaticism about cutting the budget, fiscal austerity and the national debt (not to mention some crazies calling for the abolition of the Fed and a return to the Gold Standard) led me to search out a school of economics that used data from the last forty years (since Nixon took us fully off the gold standard in 1971 by ending gold converibiliyt) to describe what is going on in macro economics and helps recommend policies and proscriptions to remedy our economic ills going forward.