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Andrew Tobias

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Andrew Tobias
Andrew Tobias

Money and Other Subjects

Year: 2008

Farming Wind

June 12, 2008March 11, 2017

THE ANSWER IS BLOWING IN THE WIND

Specifically, for starters, Boone Pickens’ $12 billion Texas wind farm projected to be powering the equivalent of 1.3 million homes by 2011.

KRAUTHAMMER ON $4 GAS

He’s been saying since 1983 we should tax gasoline more each year to keep that revenue here (and the revenue to lower the payroll tax), thereby to encourage fuel efficiency and all the good that flows from that.

Actually, a lot of us have been saying this; some of us even longer.

Why don’t we do it now? To make it politically palatable, maybe give people two or three years’ notice before it kicks in. Time for many to switch to more fuel efficient cars that, in turn, make the tax ‘zero.’ (Up your mileage from 20 mpg to 30 mpg and the extra cost of driving a mile with $2 extra tax tacked onto a $4 gallon is: zero . . . even as the lower payroll tax might save you several hundred dollars.)

Not everyone will be able to buy new fuel-efficient cars in the next two or three years. But even so, there may be quite a few mutually (and environmentally) advantageous real-world trades to be made. Someone who drives a gas guzzler 20,000 miles each year might swap with someone who drives a fuel-efficient car just 1,500 miles a year. The 20,000-mile-driver would save a fortune on gas, allowing him to offer his (nice!) vehicle at an attractively low price.

MONTY HALL – REALLY SIMPLY

Mark Budwig: ‘Imagine that right after you choose door A, Monty offers you the choice of keeping it or exchanging it for both doors B and C, giving you 2 out 3 chances to win. Because that’s essentially what he’s doing, except that he’s helpfully eliminating the booby prize door first.’

BAR BETS – 3

Aaron Long: ‘I live in a co-op with 21 other people and three of them have the exact same birthday. We had a party for them and there was much exclaiming about how unlikely their coincidental birthday was. I brought up the famous old bar bet that if you have 23 people together there is a better than 50% chance that two have the same birthday and to my surprise none of them had heard of this and to boot none of them seemed to really believe me, so maybe that bet has some life in it yet.’

☞ Ah, but what are the odds of THREE out of 23? I am quite sure one of our esteemed readers will have the answer to us faster than you can say ‘free year’s subscription extension for the first correct answer.’

Bonus points: how many people have to gather before it’s likely three will share one birthday (i.e., more likely than not). How many before it’s very likely (90%)? How many before you can all but assume it (99%)?

18 Million Cracks

June 11, 2008March 11, 2017

CURRENT TV

Chuck Smith: ‘I think you mentioned you had an interest in Current TV. Since then I have been tuning in more often. As time goes on the channel keeps improving to the point that, instead of choosing it when nothing else is on (and I get over 200 channels), it has become one of my favs.’

☞ And you can vote online to determine what stories they run. Brave new world.

BAR BETS – 2

James Johnson: ‘Which is farther west, Los Angeles or Reno? Reno. Which is farther west, Chicago or the Galapagos Islands? Chicago. (South America is quite far east of North America.)’

☞ Reason enough to start haunting the bars again. So long as I can find someone to bet with who thinks he knows where the Galapagos are.

(Meanwhile – thanks, Dan Nachbar -Lima, Peru, on the Pacific Ocean, is east of Richmond, Virginia. And – thanks, Chip Ellis – Pittsburgh is east of Miami.)

Dale McConnell: ‘How coincidental. I had just read about the Monte Hall Problem in The Drunkard’s Walk: How Randomness Rules Our Lives (which is very good).

HILLARY ENDORSES BARACK

I you haven’t already seen it – or if your daughter hasn’t – watch Hillary’s speech. Or read excerpts here:

I entered this race because I have an old-fashioned conviction: that public service is about helping people solve their problems and live their dreams. I’ve had every opportunity and blessing in my own life – and I want the same for all Americans. Until that day comes, you will always find me on the front lines of democracy – fighting for the future.

The way to continue our fight now – to accomplish the goals for which we stand – is to take our energy, our passion, our strength and do all we can to help elect Barack Obama the next President of the United States.

Today, as I suspend my campaign, I congratulate him on the victory he has won and the extraordinary race he has run. I endorse him, and throw my full support behind him. And I ask all of you to join me in working as hard for Barack Obama as you have for me.

I have served in the Senate with him for four years. I have been in this campaign with him for 16 months. I have stood on the stage and gone toe-to-toe with him in 22 debates. I have had a front row seat to his candidacy, and I have seen his strength and determination, his grace and his grit.

In his own life, Barack Obama has lived the American Dream. As a community organizer, in the state senate, as a United States Senator – he has dedicated himself to ensuring the dream is realized. And in this campaign, he has inspired so many to become involved in the democratic process and invested in our common future.

Now, when I started this race, I intended to win back the White House, and make sure we have a president who puts our country back on the path to peace, prosperity, and progress. And that’s exactly what we’re going to do by ensuring that Barack Obama walks through the doors of the Oval Office on January 20, 2009.

I understand that we all know this has been a tough fight. The Democratic Party is a family, and it’s now time to restore the ties that bind us together and to come together around the ideals we share, the values we cherish, and the country we love.

We may have started on separate journeys – but today, our paths have merged. And we are all heading toward the same destination, united and more ready than ever to win in November and to turn our country around because so much is at stake.

We all want an economy that sustains the American Dream, the opportunity to work hard and have that work rewarded, to save for college, a home and retirement, to afford that gas and those groceries and still have a little left over at the end of the month. An economy that lifts all of our people and ensures that our prosperity is broadly distributed and shared.

We all want a health care system that is universal, high quality, and affordable so that parents no longer have to choose between care for themselves or their children or be stuck in dead end jobs simply to keep their insurance. This isn’t just an issue for me – it is a passion and a cause – and it is a fight I will continue until every single American is insured – no exceptions, no excuses.

We all want an America defined by deep and meaningful equality – from civil rights to labor rights, from women’s rights to gay rights, from ending discrimination to promoting unionization to providing help for the most important job there is: caring for our families.

We all want to restore America’s standing in the world, to end the war in Iraq and once again lead by the power of our values, and to join with our allies to confront our shared challenges from poverty and genocide to terrorism and global warming.

. . .

We cannot let this moment slip away. We have come too far and accomplished too much.

Now the journey ahead will not be easy. Some will say we can’t do it. That it’s too hard. That we’re just not up to the task. But for as long as America has existed, it has been the American way to reject ‘can’t do’ claims, and to choose instead to stretch the boundaries of the possible through hard work, determination, and a pioneering spirit.

It is this belief, this optimism, that Senator Obama and I share, and that has inspired so many millions of our supporters to make their voices heard.

So today, I am standing with Senator Obama to say: Yes we can.

. . .

To those who are disappointed that we couldn’t go all the way – especially the young people who put so much into this campaign – it would break my heart if, in falling short of my goal, I in any way discouraged any of you from pursuing yours. Always aim high, work hard, and care deeply about what you believe in. When you stumble, keep faith. When you’re knocked down, get right back up. And never listen to anyone who says you can’t or shouldn’t go on.

As we gather here today in this historic magnificent building, the 50th woman to leave this Earth is orbiting overhead. If we can blast 50 women into space, we will someday launch a woman into the White House.

Although we weren’t able to shatter that highest, hardest glass ceiling this time, thanks to you, it’s got about 18 million cracks in it. And the light is shining through like never before, filling us all with the hope and the sure knowledge that the path will be a little easier next time. That has always been the history of progress in America.

Think of the suffragists who gathered at Seneca Falls in 1848 and those who kept fighting until women could cast their votes. Think of the abolitionists who struggled and died to see the end of slavery. Think of the civil rights heroes and foot-soldiers who marched, protested and risked their lives to bring about the end to segregation and Jim Crow.

Because of them, I grew up taking for granted that women could vote. Because of them, my daughter grew up taking for granted that children of all colors could go to school together. Because of them, Barack Obama and I could wage a hard fought campaign for the Democratic nomination. Because of them, and because of you, children today will grow up taking for granted that an African American or a woman can yes, become President of the United States.

When that day arrives and a woman takes the oath of office as our President, we will all stand taller, proud of the values of our nation, proud that every little girl can dream and that her dreams can come true in America. And all of you will know that because of your passion and hard work you helped pave the way for that day.

So I want to say to my supporters, when you hear people saying – or think to yourself – ‘if only’ or ‘what if,’ I say, ‘please don’t go there.’ Every moment wasted looking back keeps us from moving forward.

Life is too short, time is too precious, and the stakes are too high to dwell on what might have been. We have to work together for what still can be. And that is why I will work my heart out to make sure that Senator Obama is our next President and I hope and pray that all of you will join me in that effort. . . .

Bar Bets You Can Win

June 10, 2008January 4, 2017

In a minute, earn cash in your spare time! Bar bets you can win. But first . . .

THE MONTY HALL PROBLEM

As clear as it was to me that your odds of winning the mega-yacht could not be improved by switching from your first choice, it’s now equally clear to me – now that I understand it – that I was wrong. Beyond dispute.

David Rothman and Keith Skilling were among the many of you who really nailed it for me: Imagine not 3 doors but a million. You choose door number 220601(say). The game show host opens 999,998 doors leaving just yours (number 220601) and one other. Now do you want to stick with the door you choose, figuring that you hit a million-to-one shot with your first pick? Or would you prefer to switch to the only door besides yours I left unopened?

Here the answer is intuitively obvious. Play the game with just 3 doors instead of a million and it’s the same principle, just a bit more subtle.

What’s fascinating, I think (and a little scary), is that so many math professors could have been equally certain – and wrong – as reported years ago in a New York Times conversation with Monty hall himself.

Geoff Townsend: ‘Here is an elegant solution to the problem, making it seem almost intuitive. The author, Jeffrey Rosenthal, a statistics professor, has also written an interesting book on everyday probabilities, Struck by Lightning: The Curious World of Probabilities.’

Assume that you always start by picking Door #1, and the host then always shows you some other door which does not contain the car, and you then always switch to the remaining door.

If the car is behind Door #1, then after you pick Door #1, the host will open another door (either #2 or #3), and you will then switch to the remaining door (either #3 or #2), thus LOSING.

If the car is behind Door #2, then after you pick Door #1, the host will be forced to open Door #3, and you will then switch to Door #2, thus WINNING.

If the car is behind Door #3, then after you pick Door #1, the host will be forced to open Door #2, and you will then switch to Door #3, thus WINNING.

Hence, in 2 of the 3 (equally-likely) possibilities, you will win. Ergo, the probability of winning by switching is 2/3.

Gray Chang: ‘An important part of the Monty Hall problem is often omitted from the problem statement. Monty knows which door holds the prize and he always reveals a clunker door. Then you should indeed switch your choice, as you said. However, it’s a different situation if Monty doesn’t know which door holds the prize and he reveals one of the two remaining doors at random. In that case, one-third of the time he will reveal the prize door, and you lose the game. Two-thirds of the time he will reveal a clunker, in which case there is no advantage or disadvantage of changing your original choice; the odds are 50-50 at that point.

Michael Young: ‘One absolutely critical part of the problem, that nobody ever mentions, is whether Monty’s rules required him to show you one of the losing doors. If he has the option not to show you a door at all, then you simply cannot make any inferences, and your ‘intuition’ that switching should make no difference is entirely correct – you’re playing a mind game with Monty. (Consider that without this rule, he could choose to show you a door only when he knows you have chosen the winning door already. Or not, to fake you out.) I was too young when Monty was doing his thing to have paid attention to whether Monty ever refrained from offering another door.’

Sergei Slobodov: ‘By forcing the host to choose the one yacht-free door of the two doors remaining, you are taking advantage of his knowing more than you do (after all, he will never open the door with the yacht behind it). In trading terms, he is an insider and you are taking advantage of his inside information!‘

George Hamlett: ‘You write: ‘One’s grasp for related knowledge immediately goes to the coin toss truism: that even if a coin has come up ‘tails’ ten times in a row, a cool-headed man or woman knows it is no more likely to come up ‘heads’ on the eleventh. The odds of an honest coin-toss are 50-50 every time.’ That’s true, of course, but the key word is honest. What are the odds that any coin that comes up the same ten times in a row is an honest coin? Not good. So in a real-life situation, the right bet is tails, because the odds are it’s not an honest coin. Mr. ‘Black Swan,’ Nassim Nicholas Taleb, writes about this very problem of not confusing academic situations with the real world.’

And now . . .

BAR BETS YOU CAN WIN

I said this Monty Hall thing had no value except perhaps in winning bar bets. (Better still, bar bets with cocksure math majors.) But that produced other money-making opportunities.

Peter Baum: ‘Your mention of bar bets brings back some fond memories. Back in my youth I was an . . . ‘independent entrepreneur specializing in extremely short-time transactions based on psychological dislocation and information asymetry’ (hustler). Here‘s a youtube link to one of the classics, the Five Questions game. He’s using it to try to pick up a girl, but it can be used at least as effectively to win money. Enjoy.’

Dan Nachbar: ‘My favorite bar bet – Rome is further north than New York City. (It is.)’

☞ Double or nothing? Which is further north, Venice or Bangor, Maine?’ I win again! (Or use Fargo, North Dakota.)

What is the westernmost state in the Union? (Wrong!) The easternmost? (Wrong!) Oh, I like this.

(In both cases the answer is the same: Alaska. Which is also the northernmost. Hawaii is southernmost.)

What we clearly need to do to balance our trade deficit and strengthen the dollar is (a) attract more wealthy tourists; and (b) get them into the bars with us.*

___________
*The only possible glitch: foreigners actually learn geography. Uh, oh.**
___________
**Between yesterday and today, it seems to be footnote week.***
____________
***Sorry! I am really only 12 years old – and it shows.****
________________
****Nanotechnology! A whole computer could fit inside the period at the end of this sentence.

It’s Not All Bad News

June 9, 2008March 11, 2017

UNEMPLOYMENT

It’s worse than reported. As John Mauldin explains, the system that the Bureau of Labor Statistics uses to estimate unemployment is slow to reflect economic upturns or, in this case, downturns.

So inflation is understated (and likely to get worse); employment is overstated (and likely to decline further).

Senator McCain’s solution? He’s reading Alan Greenspan’s book to bone up on economics. (Alan Greenspan who, for all his considerable good points, never met a bubble he didn’t accommodate.)

But one thing the Senator knows for sure: the tax cuts on millionaires and billionaires must be made permanent. It’s what Bush has been calling for, through thick and thin; it’s what McCain (who first opposed them) now calls for; it’s what the Republican Party stands for as a bedrock principle: even when a billionaire dies, he should be lightly taxed.*

I hate to be a gloomsayer – especially when I think we have a new day dawning next January. But if you bought any of those Rydex double-inverse S&P exchange-traded fund shares mentioned here in April (‘A Safe-ish Way to Short the Market’), I wouldn’t sell them just yet.

*Making the tax cuts permanent means, among other things, following through with the scheduled drop in the estate-tax rate from 45% down to a far more modest 0%.

IT’S NOT ALL BAD NEWS

Yes, since 2001, the average income of the bottom 90% of wage earners dropped a hair, adjusted for inflation. But the top 10% have seen their incomes rise 15%. And that’s pre-tax. Because of the tax cuts we in the top 10% have gotten, the after-tax boost is much higher. I have to tell you: I’m sorry you can’t feed your family or afford the drugs you need, and I’m sorry your kids have been burdened with a few trillion extra in National Debt so we could occupy Iraq and lower taxes on the rich. But it’s been a positively grand time to be wealthy and powerful in America. For that much, the Republican Party deserves credit.

For the top1%, of course, it’s been even better. (And for the top 0.1%, better still, but let’s not get carried away.*) Behold:

. . . Since 2002, the average income of the top 1 percent of households has risen 44 percent, or $335,000, after adjusting for inflation. . . .

As a result, the share of the nation’s income flowing to the top 1 percent has increased sharply, rising from 15.8 percent in 2002 to 20.3 percent in 2006. Not since 1928, just before the Great Depression, has the top 1 percent held such a large share of the nation’s income. . . .

And, again, this is pre-tax income. After tax, the gains in wealth have been much wider. As Warren Buffett has noted, if this is class warfare, his class is winning. (Appalled by this, he is voting Democrat.)

* I know we’re almost all in the top 10%. Indeed, when candidate Gore was warning that candidate Bush’s tax cuts would go mainly ‘to those in the top 1%’ a poll showed that fully 19% of Americans thought they were in the top 1% – and a further 20% (God bless ’em) expected to be. For a total of 39% in or expecting to be in the top 1%. Still, somebody must be in the bottom 90%.

What Ketchup and a Map of the United States Have in Common

June 6, 2008March 11, 2017

Next week: The Monty Hall Problem properly explained . . . your thoughts on Telepresence and Oilgae . . . and more. But today:

OUR 57 STATES

Jonathan Levy: ‘Beware of unintended consequences, I guess. 🙂 I went to the McCain video and one of the ‘related’ videos that came up showed Obama claiming to have visited 57 states. Clearly, he knows how many states there are and there are any number of plausible explanations that amount to a minor slip of the tongue (meaning to say “47,” counting non-states that hold primaries or caucuses, just flat-out saying the wrong word). The interesting thing is that a quick Google search turned up no such explanation from the campaign or any other even vaguely authoritative source. Many, many hits mocking him for it, though. Any idea what happened and why there was no clarification?’

☞ There are 50 states. That much I can confirm. But there are also Convention delegates from the District of Columbia, Puerto Rico, Guam, American Samoa, the US Virgin Islands and “Democrats Abroad” – for a total of 56 – in which case (horrors!), if my list is complete, he was off by one. (It is further complicated by the fact that some of the territory delegates get only fractional votes.)

I haven’t seen the video, so maybe there’s another explanation. (Was he staring at a ketchup bottle at the time?)

But I know you’ll agree this is rather different from Senator McCain saying we have reduced the force in Iraq to pre-surge levels (we have not) . . . or repeatedly stating that Iran is Sunni (it is predominantly Shiia) . . . or having to be corrected by Sen. Lieberman when he kept saying Iran was arming Al-Qaeda in Iraq (it is arming the insurgents).

As with so many attacks on Gore and then Kerry and now Obama, a little digging generally shows whatever it was to be unfounded, or else trivial.

THE SPEECH

Ralph Sierra: ‘Here is a link to Obama’s speech Tuesday. Frankly, it’s the first speech of his that I have read, but it confirms, for me, my belief that he is the candidate for this place and time. He is what I have been waiting for for the past forty years. A presidential candidate who runs on a platform of what we can do rather than promising to get rid of government, cut taxes on the only people who can afford to pay them, and let ‘the marketplace’ magically solve all our problems. It will be a miracle if he can accomplish half of what I hope he will, but at least, he is capable of giving people hope and inspiring them to try to turn things around. Many have said that he doesn’t have the experience to do the job, that he is an empty-suit, that he doesn’t know what he’s getting into. I say it’s a good thing he doesn’t know what he’s up against; otherwise, he’d never try, and we’d have nothing to hope for. I don’t believe in destiny, but I think Obama came along just in time. His speech is kind of long, but I urge you to watch or read it – it’s terrific!’

OBAMA v. McCAIN

Mike F.: ‘I’m a gay man, college educated, and generally left-of-center politically. I almost always vote Democratic. However, I’m one of those Hillary supporters who just may not be able to vote for Obama. I’ve heard the arguments. Indeed, they ARE very similar in their positions; that’s not the problem. In a theoretical government, President Obama would be fantastic. My issue is experience. Barack Obama has been a US Senator for less than 4 years. From a domestic standpoint, will he be able to push his “change” agenda through Congress, even a Democratic controlled one? Idealistic presidential fiat only goes so far before those pesky Congressmen and Senators have their say. That lesson was learned in 1993, as I recall. Internationally, do I trust Obama to handle issues more competently than McCain? Will immediately pulling US troops out of Iraq somehow stabilize that part of the world? Consequently, I find myself ‘leaning toward’ McCain. Admittedly, I’m not totally there yet and with five months before the election, he still has plenty of time to alienate me (VP Huckabee, anyone?). But, right now, I’d be more comfortable with him as my ‘go to guy’ when that 3 AM call comes in. I agree with many more of Obama’s policies, I just question his ability to implement them in a less than ideal world.’

☞ Thanks, Mike. No rush, but I hope you’ll come around because:

  1. As you say, McCain would be fighting for, rather than against, many of the things you want.
  1. Clinton had no foreign policy experience but did just fine: He was immediately recognized by world leaders for his skills and intelligence and determination, all of which Obama shares. (By contrast, I once had occasion to ask a high-ranking British official shortly after the Inauguration, what his government thought of Bush. There was a long, thoughtful pause. ‘We think,’ he finally said, ‘he is President of the United States.’)
  • Also, like Clinton, Obama is likely to listen intently to everyone (Bush is not terribly curious, doesn’t read the paper) and appoint the kind of experienced advisors who (unlike Rumsfeld and Cheney) will serve him, and us, well.
  1. Domestically, change is hard. But I think we just might see the kind of mandate, as America comes to know Obama over the next five months, that gives him the clout to begin solving problems. An awful lot of Americans are hurting too badly, and by November may be hurting worse, to buy a third Bush term. Which, when you look at all the issues, really IS pretty much what McCain offers: protecting the tax cuts for the rich; moving the Supreme Court further to the right; opposing the social safety net.
  • (And please note: Obama has NOT called for immediate withdrawal from Iraq.)

Finally, there’s the issue of the message we send to the world.

After reelecting Bush once, do we now go for our 44th white male, a hawk on Iraq, who’s pictured everywhere hugging Bush? The man with the private jet and 9 houses who leads the political party that is associated with Guantanamo and Abu Gharib? Who mocks Obama for his willingness to sit down with our adversaries?

I’m not denying there is much to respect about McCain’s lifetime of service. But that’s not the “meta-message” his election would send billions of people.

Or do we now send the world a message that in America, anything is possible. In America, people are valued regardless of their race, religion, gender identity or ethnicity. In America, there is a new day: the kind of smart, roll-up-your-sleeves optimism, backed by enormous public enthusiasm, that time after time shows we CAN change course, rise to our challenges – not just shop when called upon to do so – and solve big problems.

That’s the meta-message I’d like to see us send the world, and to America’s youth.

So – much as I would have been THRILLED to support Hillary, had she won – I am equally thrilled to be supporting Barack. I hope as this thing unfolds over the next few months, you’ll sign on.

Why Chlorinate Your Pool When You Can Grow Algae in It?

June 5, 2008January 4, 2017

OILGAE

Executive summary: An acre planted with corn can produce 18 gallons of oil a year; an acre of palm, 700 gallons; an acre of algae – the green slimy stuff – 20,000 gallons. Watch a scientist in a white coat explain how it all works. Or read about its promise – including this:’algae can gobble up pollutants from sewage and power plants.’

Twenty years from now, as I’ve suggested, a lot of today’s energy problems could be behind us. It’s getting from here to there that will hurt.

RESORT

If it’s June, it must be time for designers to show the clothes that will be on sale next December – the so-called ‘resort’ line, for when you need something to wear on that quick trip to Anguilla. ‘Charles Nolan goes for an Americana motif, rolling out a charming collection of short shorts, pedal pushers and breezy little dresses in – what else? – a red, white and blue palette.’ – Women’s Wear Daily

NOT ANGRY . . .

In contrast to some of yesterday‘s posts:

Matt Nosanchuk: ‘I have been toiling on the Florida/Michigan issue for [Florida Senator] Bill Nelson [a Hillary supporter] for nine months and was at the Rules & By-Laws Committee hotel for 13 hours Saturday. I am a walking conflict or convergence of interests – as a Nelson staffer, an Obama supporter in my individual capacity, a native Michigander, and Michigan Senator [and Hillary supporter] Carl Levin’s nephew-in-law through my ex-wife! In the end, I thought the outcome of the meeting was essentially fair in the case of both states.’

Jordan, aide to a famous TV personality who worked hard raising money for Hillary (when I emailed my condolences): ‘We are far from devastated. Sen. Obama is such a breath of fresh air, and is terrific. I think Sen. Clinton would have been better in many ways once she got into office, but as a candidate and a persona he has been amazing. I think he’ll win and be a great president.’

The entrepreneur next to me at a $28,500-a-plate dinner last night: ‘I never was moved by a candidate before. Not Ronald Reagan, not Bill Clinton. I never participated. But this guy is a once-in-a-century politician. This guy can change the world. You can’t meet him and walk away untouched.’

John Grund: ‘I like your plan to manage your anger by doing – in this case, doing to get Democrats elected. In the meantime, you might like one of my favorite quotes from St. Augustine: ‘Hope has two beautiful daughters. Their names are anger and courage; anger at the way things are, and courage to see that they do not remain the way they are.’ I think the anger in the party shows we all still have hope. Let’s turn it into courage, too.’

. . . AND BEGINNING TO UNITE

From MinnPost.com:

The crowd kept pouring into the Xcel Energy Center. All ages. All races. All backgrounds. Young Somalis chanting “O-bama!” And older, white women, bedecked in sparkling red, white and blue and holding up a sign, “Women for Obama!”

But most noticeable was the arrival of such people as Buck Humphrey, who once had headed Hillary Rodham Clinton’s Minnesota campaign. And Jackie Stevenson, a DFL activist, a feminist and a Clinton-supporting superdelegate, who at the last minute had changed her mind about attending the event. And St. Paul Mayor Chris Coleman, who was a Clinton supporter until sometime Monday. And Rick Stafford, another Clinton superdelegate.

Former Secretary of State Joan Growe was there. And Minneapolis City Council President Barbara Johnson. And a couple of dozen other people who had invested so much energy into Clinton’s campaign.

Their presence at the event where Barack Obama declared victory shows that, at least in Minnesota, the political healing process already is beginning. . . .

Anger Management

June 4, 2008March 11, 2017

Politics is like driving. To go backward, put it in R. To go forward, put it in D.
— Old line, but an easy way to remember how to vote

Did you see the three speeches last night? I question my own objectivity, given my role; but McCain seemed uncomfortable, addressing perhaps 200 rather subdued, mostly older folks . . . whereas both Obama and Clinton addressed large, wildly enthusiastic, diverse crowds (Obama had 27,000 at his) and either one of them struck me as inspirational world leaders.

Not to say the election will be easy . . . for every voter who goes to a rally there must be 500 who don’t. But it seems to me that the ability to inspire is an important attribute of leadership; and that leadership is sorely needed if we’re going to begin solving the problems we face.

This much seems clear: we’re just about to enter Phase 2, finally. (You know, the phase where Democrats compete against Republicans instead of each other.) I, for one – enthusiastically neutral between our two superb candidates until the end – can’t wait.

The first job will be reuniting the Party.

ANGRY WE HAVE SUPERDELEGATES

Craig D.: ‘I don’t understand this Super Delegate stuff. I thought Democrats were supposed to be egalitarian in their thoughts. But you are an elitist SUPER delegate! Are you noshing on finger sandwiches while the regular delegates eat your crumbs? Does a regular delegate live in the flatlands while you live in a SUPER mansion on the hill? Will the Republican serfs be tilling the fields for you? What are we coming to when we have different classes of Democrats?’

☞ Well, we’re generally a good bit more egalitarian than our competition, but Democratic Senators and Representatives and state party chairs and vice chairs – who make up the largest share of automatic (or so-called ‘super’) delegates – do tend to have more clout in the Party than the average voter. Likewise former Democratic Presidents of the United States, like Jimmy Carter, who also get this status.

Then again, these people were elected by average voters, albeit not for this specific task. And they get no more votes than regular delegates – one vote each like anybody else.

(How did you hear about the finger sandwiches?)

ANGRY THE SUPER DELEGATES DIDN’T CHOOSE HILLARY

James A.: ‘Folks here in Florida are really shell-shocked by the ‘Democratic’ party. My sense is that a Super Delegate should vote for the candidate who can win in November (clearly, Hillary). Otherwise, why bother having Super Delegates at all?’

☞ Well, yes, that’s exactly what superdelegates should do. But you pack an awful lot into a two-word parenthetical phrase (‘clearly Hillary’). I agree think Hillary can beat McCain – though a lot of Barack supporters disagree. But Barack can beat him also (though a lot of Hillary voters disagree).

Working in Barack’s favor, if he is the nominee, will be the combined campaigning strength of the nominee himself and all his fired up supporters; Hillary and Bill Clinton, Al Gore, John Edwards, Jimmy Carter, Bill Richardson, Joe Biden, Oprah Winfrey, Bruce Springsteen, 28 Democratic Governors – and many others, like the million or more ‘neighborhood leaders’ we expect to empower this summer . . . the unions . . . women’s groups (why would women who voted for Hillary favor McCain, who opposes a woman’s right to choose?) . . . environmental groups (with whom McCain scores zero) . . . African Americans, young Americans, disabled Americans, Native Americans, Hispanic Americans, LGBT Americans (why would we favor McCain, who opposes granting equal rights?) . . . and, I think, as America gets to know him over the next five months, even those who actually know how to bowl.

Not to say it will be easy. But those of us who are Democrats – or Independents or Republicans Obama has inspired – have every reason to throw ourselves into this effort with enthusiasm.

ANGRY ABOUT FLORIDA AND MICHIGAN

Wayne S.: ‘Here are the reasons why I am leaving the Democratic Party. (1) DNC planned to punish Florida and Michigan rank-and-file Democrats for the actions of state legislators. (2) DNC’s Rules and Bylaws Committee decision Saturday confirmed the planned disenfranchisement of Florida and Michigan rank-and-file Democrats. (3) DNC leadership acted too passively to resolve the Florida and Michigan primaries matter. (4) DNC leadership could have simply told both Obama and Clinton that re-votes would be held, if funds were raised to cover the cost. This would have been the fairest solution, period, for a problem that should have never existed in the first place (see #1 above). For full disclosure purposes, I am a supporter of Hillary Clinton. It is my opinion that Democratic Party leaders did not want a re-vote in Florida and Michigan because Obama might not have fared well.’

☞ I wrote back to tell Wayne I really appreciate his passion for getting the right outcome for our country . . . I share it . . . and that, within the bounds of my neutrality, I also share his admiration of, and enthusiasm for, Senator Clinton. (And it’s not the worst thing to be friends with the President of the United States. So it would hardly disappoint me to see Hillary win.)

And yet (I wrote), the truth is that when Harold Ickes, among others, voted to take away 100% of MI and FL delegates, it was absolutely not done to favor or disfavor any one of the several candidates then running. Harold is as smart as they come – and as fiercely loyal to Senator Clinton as anyone. He would never have tried to tilt the rules against her.

The further truth is that both states were encouraged to run re-votes. According to the rules, it was their choice. But for a variety of reasons, what seemed simple – ‘just do a revote’ – wasn’t something either found a way to do.

In Florida (my state), Senator Nelson is the senior Democratic elected official, and he, like Harold Ickes, is a strong Hillary supporter. So he would never have purposely tried to tilt this to her disadvantage. But the mechanics and cost of staging a revote were daunting. For one thing, the paperless voting machines in many of the state’s largest counties had been scrapped (and good riddance), to be replaced by paper-trail machines for November that had not yet arrived. So, among many other problems: how do you hold a revote without voting machines?

There’s much more to it than this (and doubtless more to it than I know). But having been fairly closely involved and knowing many of the players – and having asked some pretty tough questions myself – I’m persuaded that the only ‘villain’ here were the Florida Republicans in Tallahassee. Our folks voted unanimously for an amendment to push the date back to Feb 5 to avoid losing delegates; the Republicans, who control the Florida legislature, wouldn’t allow it.

Was it because they knew it would throw us into disarray and divide us? At first, I didn’t think Karl Rove could be THAT smart. Now I’m not so sure. But, planned or not, it sure worked, didn’t it? It got terrific Democrats like Wayne so angry they say they’re leaving the Party.

So why not just change the rules to accept all Florida and Michigan delegates?

We all agree every fair game needs rules and honest referees. And that bad rules should be changed – but not in the middle of a game. (Except by mutual consent.)

It’s in the Party’s interest to have an organized process. Some progress was made this year (in my view) by adding SC and NV to the pre-February 5th ‘window.’ But I share Michigan Senator Carl Levin’s view that IA and NH should not always go first. Among other things, Iowa’s primacy has screwed up our farm policy and led to the ethanol insanity. So I expect that for 2012 there will be further improvement in the rules. At least I hope so.

The rules penalizing states by 50% (with discretion for stronger sanctions like the ones Harold Ickes and other Clinton supporters wound up voting for) were set and agreed to LONG before anyone knew which states, if any, would break them . . . or which candidates that might help or hurt.

I’d encourage anyone who feels as Wayne does to take the time to delve into what happened at every step along the way. The more you dig, the more I think you will be confirmed in the view (which I share) that this mess was really unfortunate . . . but the less you will be left thinking it was designed to hurt Hillary or that it was something the Democratic Party or the DNC should be faulted for.

I am hoping that as we near November 4, Wayne and others will come home.

I’M ANGRY TOO

About the Iraq catastrophe (read former White House Press Secretary Scott McLellan’s book); about the deprofessionalization of FEMA; about the brakes put on stem cell research; about the obscene redistribution of wealth from the middle class to the very richest; about the 75% of our soon-to-be $10 trillion National Debt racked up under Reagan, Bush and Bush; about the missed opportunities on energy policy – and the Cheney energy task force so secret that even a GAO lawsuit never did pry loose even the list of attendees; about the stolen election in 2000; about the signing statements; about Valerie Plame; about torture and the suspension of habeas corpus; about the Swiftboating of John Kerry and the character assassination of Al Gore and Max Cleland and Tom Daschle; about the politicization of the Justice Department and its US Attorneys; about the incarceration of Alabama Governor Don Siegelman that appalled even Republicans; about the willful discrimination against gay Americans; about the editing of scientific papers for political purposes and the blending of religion with science; about the Halliburton no-bid contracts; about the culture of corruption within the Republican Party (could Alaska Senator Ted Stevens’ indictment be next?); about the failure properly to regulate the ‘liar loans’ that were so obviously contributing to a real estate bubble that could only end badly. And on and on and on.

I’m sure there are a few things to be angry with Democrats about, but they don’t remotely rise to this level of severity or abundance.*

ANGER MANAGEMENT

The way I deal with my anger is to do what I can to help widen our hair-thin lead in Congress and win back the White House. It’s great therapy.

Coming soon: Hope for a brighter day.

_______________
*The only thing that springs to mind at this particular moment are the alleged finger sandwiches. Why didn’t anyone tell me there were finger sandwiches?

Winning Bar Bets

June 3, 2008March 11, 2017

BIGGER THAN A MEGA-YACHT, EVEN

Alan S: ‘What a ship….no wonder ‘Made in China’ is displacing North American goods big time with this floating continent transporting goods across the Pacific. This is how Wal-Mart gets its stuff from China. Get a load of this ship! It can carry 15,000 containers! And look at the crew size: 13 people for a ship longer than a US aircraft carrier (that has a crew of 5,000). Think it’s big enough? Notice that its 207′ beam means it’s too wide to fit through the Panama or Suez Canals. It is strictly transPacific. Check out the cruise speed: 31 knots means the goods arrive 4 days before the typical container ship (18-20 knots) on a China-to-California run. So this Danish behemoth is hugely competitive when carrying perishable goods. Built in five sections, floated together and then welded. The command bridge is higher than a 10-story building and has 11 cargo crane rigs that can operate simultaneously.’

☞ But does it come with a 12-man submarine like Paul Allen’s Octopus?

TELEPRESENCE

John Seiffer: ‘Among the many futuristic technologies we’re starting to see in real life, comes this. One guy in India, another in California – and they both appear live on the same stage.’

☞ An amazing clip. Watch it! Soon (well, fairly soon), you’ll be able to meet face to face with your Shanghai design team without ever having to leave Chicago. Not bad for the environment, the bottom line, or jet lag.

THE MONTY HALL PROBLEM

This will be very old news to many of you (and has no practical application I can think of, except to be a bit humbling). But for those who’ve never fully thought it through (or who want to humble someone else in a bar bet), here’s the nub (and here‘s its history):

You’re on a game show. A mega-yacht is behind one of three doors, lumps of seaweed behind each of the other two. You guess Door A. The host doesn’t tell you whether you’ve won; instead, he opens one of the other doors (say, Door B) to reveal a lump of seaweed – and invites you to stick with Door A, if you’re comfortable with that choice, or to switch to the remaining unopened door. Your call.

Does it make any difference whether you switch?

Well, obviously not. It doesn’t take a mathematician to tell you that.

Except that actually – to the consternation of many mathematicians (and certainly to the consternation of me) – it does. Your odds of winning are twice as good if you switch.

How can that be?

Well, you initially guessed Door A, which had a one-third chance of concealing the mega-yacht. Doors B and C, between them, had a two-thirds chance.

Right?

By switching to Door C, you get the full value of that two-thirds chance (because you know it ain’t behind Door B).

This makes sense to me when I say it, but absolutely no intuitive sense.

(One’s grasp for related knowledge immediately goes to the coin toss truism: that even if a coin has come up ‘tails’ ten times in a row, a cool-headed man or woman knows it is no more likely to come up ‘heads’ on the eleventh. The odds of an honest coin-toss are 50-50 every time.)

And yet it’s true. And you can spend the rest of the day trying it yourself, here. On any given play of the game, you might win or lose. But play 100 times, never switching from your initial guess, and you’ll win the mega-yacht about 33 times; versus about 67 times if you always switch from your initial choice.

Three-Minute Video (and What You DIDN’T See on TV)

June 2, 2008March 11, 2017

McCAIN’S YOUTUBE PROBLEM

Nearly two million people have taken 3 minutes to watch this. McCain is a patriot, to be sure, but arguably not the man to lead the nation – and the world – into the future. (And why doesn’t he know we haven’t reduced troop strength back to pre-surge levels? And why does he have so many lobbyists running his show when he claims to eschew their influence? And why has he embraced Bush’s tax cuts for the rich?)

HOW NBC ALLOWED US TO GO TO WAR

Well, I mean everyone had already gotten dressed, washed the car, and driven almost all the way there – why spoil a perfectly good war? Click here. The press has failed us badly.

A GREEN COMPUTER MONITOR

Uses no power in idle mode. Here. (Thanks, James.)

BOREALIS

We keep drilling. To wit:

TORONTO, May 30 /CNW/ – Advanced Explorations Inc. [our joint venture partner] is pleased to announce that work is progressing on its economic study and diamond drill program on the Roche Bay iron ore project. MAN Ferrostaal of Germany is leading the Team undertaking the economic and technical review. After several meetings the Team has concluded that the study will focus on determining the viability of a mine operation supporting 7 million tonnes of pellet production per year. The objective is to complete the updated resource calculation and Preliminary Economic Assessment this summer with delivery of the final Pre-Feasibility study by the fall of this year. . . .

Tomorrow: Bigger than a Mega-Yacht, Even

Fundraising Letters to Look Forward To Oh - and we just might live forever

May 30, 2008March 11, 2017

STOP THE PRESSES!

From the New York Times yesterday: ‘Two monkeys with tiny sensors in their brains have learned to control a mechanical arm with just their thoughts . . . ‘

This is very good news for those of us who want to live forever, or at least for a very long time.

As I wrote half a year ago:

My conception has long been that technology is on such an astonishing exponential trajectory – we’ve begun mapping the human genome, for crying out loud! Oh, look, we’ve finished! – that one day soon we’d be able to download our consciousnesses into a brain bank, basically, where we’d be able to do almost all the things we do now . . . email our friends, watch Seinfeld reruns, order movies on demand, play web boggle, go for virtual treks to Machu Pichu . . . a world in which the big addiction would be not cocaine or meth but the orgasm button.

(In a brain bank, you wouldn’t literally press buttons. But how far are we now from being able to send electrical impulses from our brains? Not very far.)

Class warfare would be primarily between the virtual humans, like me, with 500 years of compound interest enhancing my vast fortune, and the physical humans, like some 25-year-old with an actual screw driver. I’d have $50 trillion (a good chunk of it in Borealis stock); but he would have the ability to disconnect me.

☞ Well, it seems we are not so far at all from ‘being able to send electrical impulses from our brains,’ thereby to control our TiVos. (And if Ray Kurzweil is right, as I wrote in that same column, we might not even need to surrender our bodies.) I know this is a tiny bit creepy. But consider the alternative.

A NON-FUNDRAISING LETTER

You know how Warren Buffett’s annual shareholder letters have come to be eagerly awaited? And widely read by an audience of (bitter, envious) people (like me) who don’t even own his stock?

Well, I feel much the same way about Congressman Barney Frank’s fundraising letters. Why haven’t they been collected in a book?

Foolishly, I haven’t saved them over the years. But I thought I would share his latest.

Dear Friends:

Political life has an enormous number of benefits. One of the things I most dislike is to hear my colleagues complain about the terrible burdens under which we labor, and give the impression that they are doing the world an enormous favor by holding onto their jobs. In fact, in the majority of instances the facts are exactly the opposite: we want very much to keep our jobs and are prepared to impose on relatives, friends, random passers-by and others in an effort to do so.

But there is one downside. Precisely because we are in a position where we are allowed – even expected – to solicit people for favors, money, kind words, etc., we can come to think of this as the normal form of human interaction. In particular, there is a very real possibility that we can transform ourselves into one of the most unpleasant of characters: an acquaintance from whom you hear only when he or she needs something.

So I am writing this to you simply to stay in touch, and it includes no request whatsoever for money, praise, moral support or anything else. It is simply a letter to people who have been extremely good friends and who have made the career that I continue to enjoy possible.

This has been a very exciting time for me, more exciting than anticipated. From the standpoint of the country, it would obviously have been good if it had been less exciting. I took over the Chairmanship of the Committee on Financial Services precisely at the time when the subject matters in the jurisdiction of that committee became among the most important facing the country. We deal not only with housing in both the public and private sectors, but insurance, banking, and the securities industry in all of its recent, exotic transmogrifications.

Consequently, I have been working much harder at this job than I can remember working since my first years as Executive Assistant to [Boston Mayor] Kevin White, and I am forty years older today than I was then, which is not an enormous advantage overall. (More wisdom and a lot less energy does not make the ideal trade-off.) The result is that I have seen my horizons shrink in some ways. I now know a very great deal about those things that are in the jurisdiction of my committee, and less about almost everything else than I have ever known in my life. But the responsibility of trying to cope in both the short and long term with this financial crisis takes precedence.

There is a silver lining to the dark cloud that the current economic situation presents. I have for years been frustrated by those who greatly over-argue the case for our free market system. I am a capitalist, and I believe it is clear that the free market system, properly run, is the best way to generate wealth that human beings have ever come upon. But that system has both strengths and weaknesses, and I have long felt that the need for a well financed and well run public sector working along with the private sector has been substantially undervalued in our politics. For nearly thirty years, we have been governed excessively by the line from Reagan’s first inaugural, that “Government is not the answer to our problems; government is the problem.”

People argued that economic growth is not only a good thing, but a complete one, and that if we were to exceed on an annual basis three percent growth, all would be well and all of our citizens would prosper. Many of us argued that we were growing in a way that exacerbated inequality unnecessarily, and that this would have not only negative social consequences, but ultimately a deleterious economic impact, but we were the minority.

Dominant opinion also held that regulation was a bad thing. The mantra here was that of the distinguished economic philosopher and former Majority Leader, Dick Armey, who insisted that “markets are smart and government is dumb.” From one perspective, recent events may have borne that out. Some observers may believe that the people who were doing business with Bear Stearns were smart enough to get the dumb Federal Reserve to take care of them when the investment decisions they had made went sour. But I don’t think that the ability of the market to stick the government with the cost of its mistakes was what Armey had in mind. The lesson we should be drawing from this is that, even though there are times when the government will in fact have to step in to prevent greater economic troubles — as I think the Fed ultimately did appropriately in this case — the most important thing for us to do is to put in place rules that make it less likely that this will occur.

So just as with the notion that we need not worry about fairness in the distribution of income as long as we have growth, the argument that the greatest threat to the market system is excessive regulation has been substantially discredited by results. History is to some extent repeating itself in the grand scale. The formation of large industrial enterprises in the late nineteenth century led to the reforms known as the anti-trust laws, the establishment of the Federal Trade Commission, and similar actions under Theodore Roosevelt and Woodrow Wilson. The subsequent flourishing of the stock market and its steep decline beginning in 1929 led to the reforms instituted under Franklin Roosevelt. In these cases, the economic activity was largely beneficial, but it had negative side effects (which of course were especially severe during the Great Depression) that had to be curtailed by sensible regulation. This is where we are today with securitization and the other exotic market instruments.

So while it would obviously have been much better for the country if none of this negative activity had happened, we can at least take some comfort in the fact that there is a broad recognition in the country today politically that it is time for the kind of significant economic reforms that we have seen in prior eras.

This makes the 2008 election extraordinarily significant. Of course the number one issue remains the need to withdraw from this badly conceived and execrably conducted war in Iraq, with all the damage it does in so many ways. And the fate of the United States Supreme Court is clearly at stake given the age of the justices, particularly those who continue to uphold basic constitutional liberty. Add to this the fact that we face one of the most important decision points in our economic history, and you have an election of overwhelming importance. The bad news is of course that we are in this economic bind. But the partially mitigating good news is that more and more people now realize what must be done to prevent its recurrence.

I am very grateful to you and others who have helped me get to the position where I am Chairman of the Financial Services Committee so that I am able to participate in our efforts to deal with this crisis in both the short and long terms.

BARNEY FRANK

☞ See what I mean?

Have a great weekend.

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