Friday, August 12, 2011

The Worst Subsidy of the Week: Airplane flights to no-where---Small airlines fly with NO passengers so they can receive Federal subsidies.

File this under "you can't make this up"...I bet the writers over at The Onion are wondering if Congress is trying to challenge them in making up ridiculous stories. Problem is, the stories out of Congress are true...

Read the whole article and see some TEA party hypocrisy to go along with the Establishment (Reps and Dems). I grew up in a VERY small town in a relatively sparse part of northern New Hampshire and I ask the question: WHY, in the 21st century do we suck-up to "rural interests" as if they are sacrosanct and have to travel by horse and buggy to get anywhere? Again, a subsidy that has little merit to the nation as a whole and adds little to the national output. 

Gov't pays for empty flights to rural airports

""On some days, the pilots with Great Lakes Airlines fire up a twin-engine Beechcraft 1900 at the Ely, Nev., airport and depart for Las Vegas without a single passenger on board. And the federal government pays them to do it.

Federal statistics reviewed by The Associated Press show that in 2010, just 227 passengers flew out of Ely while the airline got $1.8 million in subsidies. The travelers paid $70 to $90 for a one-way ticket. The cost to taxpayers for each ticket: $4,107....""
  Associated Press

Are you mad, yet???

I did not see the "Unseen" of this policy coming and helped support a policy that hurt people in The Congo...I must remember to think with my head, keeping my heart in mind. I got that backwards on this one...

I should have known better since I pride myself on teaching my students to discern between the "seen and the unseen" when it comes to policies of a political nature.  I teach the "unseen" is actually very visible if you look hard enough.

I advocated among students for inserting a reporting mechanism in the Dodd-Frank Bill of 2010 that requires corporations, mostly cell phone producers, to publicly report the amount of "conflict minerals" they use to manufacture phones.  These highly coveted minerals are found in large quantities in the Eastern Congo and the fight for control of the mines has lead to unspeakable human rights violations. The passage of this law with this particular provision has not helped the people of The Congo, but has cruelly done just the opposite (in the short run):

""The “Loi Obama” or Obama Law — as the Dodd-Frank Wall Street reform act of 2010 has become known in the region — includes an obscure provision that requires public companies to indicate what measures they are taking to ensure that minerals in their supply chain don’t benefit warlords in conflict-ravaged Congo. The provision came about in no small part because of the work of high-profile advocacy groups like the Enough Project and Global Witness, which have been working for an end to what they call “conflict minerals.”

Unfortunately, the Dodd-Frank law has had unintended and devastating consequences, as I saw firsthand on a trip to eastern Congo this summer. The law has brought about a de facto embargo on the minerals mined in the region, including tin, tungsten and the tantalum that is essential for making cellphones.

The smelting companies that used to buy from eastern Congo have stopped. No one wants to be tarred with financing African warlords — especially the glamorous high-tech firms like Apple and Intel that are often the ultimate buyers of these minerals. It’s easier to sidestep Congo than to sort out the complexities of Congolese politics — especially when minerals are readily available from other, safer countries.       ...""NYTimes

Lesson learned for me...Think with your head with your heart in mind, not the other way around..

Thursday, August 11, 2011

The Texas Association of School Boards publish a survey showing 90% of Texans support increasing spending on education...Let me explain why this is one of the MOST bogus surveys I have ever seen. I think you will be convinced too.

I missed this one: Last year, the Texas Association of School Boards (TASB) published the results of a poll they commissioned as proof that Texasn overwhelmingly support increasing funding for public education.
""Ninety percent of Texans agree that Texas’ public schools need more money from the state, according to a survey recently commissioned by the Texas Association of School Boards (TASB) and conducted by Texas Poll. This number remains consistent from a year ago, when 88 percent said the state should provide more funding to public education.
 These results do not surprise me, given the question asked (This IS the question they used):
Source: Texas Poll
I encourage you to look at this survey (HERE) and consider it an example of a REALLY bad survey. In general, MOST people do not know how much is spent on all (or any) facets of education.  In a GOOD academic survey people are asked this question as posed above, then they are told HOW MUCH is ACTUALLY spent on on different areas of education. The poll numbers change rather dramatically as a result.  Here is a national study from EducationNext and the outcomes from asking the question from both sides:
Source: EducationNext
The first question gives the respondents the ACTUAL cost of delivering education in their area and the second question is similar in tone as the TASB question. The questions were not asked in this order--they were randomized.

Just look at the "Greatly Increase" and "Increase" and "National" columns. When no cost reference is given, people are more generous---59% want to greatly increase or increase. When a cost reference IS given, the percentages drop to 46%.  Most of the ones that bailed on increasing spending went to "Stay the Same". This is statistically significant.

Even the self-identified teachers had MUCH LARGER drop in support when given a cost reference!! 

My conclusion is the TASB poll is a political poll and should not be taken seriously. I wonder how much they paid to have it conducted?

If the Texans polled had been presented with similar cost information would the results had been so overwhelmingly favorable? Also, TASB shows that most favor increasing taxes to pay for education, but they did not ask if the respondent would want THEIR taxes raised. Yes, there are two possible answers to that question.  I think that is something TASB did not really want to find out.   

Teachers: We don't escape as a group either. Here is the question about teacher pay. The first question is asked when told what average salaries are (43%), and the second question is asked as a general policy should teachers make more money (58%). 

 Beware of any survey result that gives an overwhelming edge to one side or the other.  There probably was a large disconnect between what people thought and the reality. 

Class dismissed....

Wednesday, August 10, 2011

Here are the members of the "Super Committee" that are going to "fix" our budget/debt crisis AND what the National Debt WAS when they were elected to Congress.. Arsonists giving Fire Prevention Advice is an analogy that comes to mind...

These are the 9 members of the "Super Committee" named thus far. There are still 3 to be named in the next couple of day by House minority leader Nancy Pelosi.  I put their name, political party, House or Senate AND what the National Debt was when the took office.

Not to be cynical (ok, I am cynical), but the SAME people who watched/participated in creating this problem are going to be the ones to fix it?  REALLY?? I am not confident of this process.  Hope/Change I am wrong...

1. Max Baucus (D) Senate 1978--Present  ($771,544,000,000)
2. John Kerry (D)  Senate 1985--Present    ($1,823,103,000,000)

3. Jon Kyl (R)  Senate      1987 -Present       ($2,350,276,890,953)

4.Fred Upton (R)  House  1987--Present    ($2,350,276,890,953)
5. David Camp (R) House 1991-Present       ($3,665,303,351,697)

6. Patty Murray (D) Senate   1992-Present   ($4,064,620,655,521)
7. Rob Portman (R) 1993-2005 House 2009-present Senate   ($4,411,488,883,139)

8. Pat Toomey (R) 1999-2005 House 2010-now Senate       ($5,656,270,901,615)
9. Jeb Hensarling (R) 2002 House      ($6,228,235,965,597)

10. ??

11. ??

12. ??

National Debt as of TODAY: $14,591,991,499,526.02

A simple, inexpensive product is saving lives in Somalia...Why do the inventors of this product NOT have a Nobel Prize?

I learned something new today. It is one of those things that makes me wonder why the inventors of this product have not won an Nobel Prize.  At the minimum, they should be featured on "Oprah"!!!

The product is called "Plumpy'Nut" and it is an easy to administer, peanut base food, that is fed to extremely malnourished people.  It is playing a major role in the current human tragedy in Somalia. It is very inexpensive and easy to prepare and feed to children.  Apparently it actually tastes good too.

 Anderson Cooper interviewed someone about this product (he may have been a rep for the company, but I don't remember). Anderson asked him about the dangers for a child that might have a peanut allergy.  The person said something that really surprised me AND Anderson too: Peanut allergies are an issue in developed countries and not in under-developed, especially very poor ones.  I had never heard this before.  I could not find a definitive reason for this, but the "Hygiene Hypothesis" seemed to make sense to me, but I cannot vouch for its veracity:

""In medicine, the Hygiene Hypothesis states that a lack of early childhood exposure to infectious agents, symbiotic microorganisms (e.g., gut flora or probiotics), and parasites increases susceptibility to allergic diseases by suppressing natural development of the immune system.[1] The rise of autoimmune diseases and acute lymphoblastic leukemia in young people in the developed world has also been linked to the hygiene hypothesis...""

In other words, a high(er) level of hygiene makes us less immune to potential allergies of all types.

Whatever...This is a good lesson for students and how they can impact people with science and technology.  You may not be a "Do-Gooder" in the classic sense of helping people directly, but your research and development skills/knowledge may do more good than anything else.

Monday, August 8, 2011

The Dow is DOWN! The Dow is UP! What the heck is the DOW? Something about the Stock Market, right? Short explanation here

If you are not sure what the "Dow" or "Dow Jones" or "Dow Jones Industrial Average" means, don't feel bad. I believe most people have an idea that it somehow measures how the stock market is performing---and that would be correct. But let's look at what it is exactly the talking heads on TV are referring to.

Dow-Jones is a financial company that has been around since the 1920's. Go HERE for a very short history of the company.

The "Dow" is a collection of 30 companies that sell shares of stock to the public on the major stock exchanges. They are well-known companies as, as you can see from the list below:

These companies are the marquee leaders in their particular industry.  They are selected to be representative of all companies in their business sector.  Not all sectors are equal and are given different weights when calculating the Dow Index:

Within each sector, each company has different weight, indicating it has a bit more market relevance relative to the other companies in their particular sector. Look at the weights in the "Weight by Price" column.

I am not going to explain all the math...Please go HERE for that explanation if you need it.

What you see on the news is a mathematical compilation of the increases or decreases of these 30 stocks AS A GROUP at the SAME TIME in the form of  an "Index".  Right now as I watch the news (CNN), the DOW is at 10,812.12 points. It is showing a -5.53% change, or a decrease of 633.17 points off the Index from opening this morning. 

If you bought one share of stock in each of the 30 companies above first thing this morning, the value of those stocks collectively would be 5.53% LESS this afternoon. 

Now, does this mean ALL stocks are down across the board? NO! It is possible that a majority of the 1000's of other stocks actually increased.  However, it is usually the case that "As the Dow goes, so goes the rest of the stock market".  For more info on the Dow go HERE.

Bottom line: When you watch the news keep in mind that they are broad brushing the stock market with the performance of only 30 companies.  To find out the truth of the situation, you have to dig deeper.  DON'T BE FRIGHTENED BY THE TALKING HEADS!! Look at your own particular investment before you panic...

Sunday, August 7, 2011

Where have all the dollars gone? Look East, young man/woman. Nice graphics showing the flow of dollars since 1991...

A nation's stock of Foreign Currency Reserves is one way you can look at patterns of trade. The more a nation holds of a particular foreign currency, oh, say, dollars, is another way of saying that nation sells more ''stuff" than it buys from the other nation, oh, say, the US.  Hence, they are net holders of dollars.  China holds currencies other than dollars, but the perponderance of the reserves are US dollars.

This interactive from the Financial Times shows an amazing transition of foreign currency holdings just since 1991.  In the 2000's there is a massive tilt in one direction.  What to do with all those dollars? Well, we know at least one place it ends up...

 Well, we know at least one place it ends up...


Look around your house. Do you have more living space then your really need? Do you have room(s) that are glorified storage spaces? Now you see the problem with our national housing policy.

Yes, I do too...
Before I became a teacher, I had a furniture upholstery business (Dallas/Ft Worth Area).  I was amazed at the number of houses I would visit where residents would have rooms they did not use at all. It always perplexed me...until I could afford to move into a upper-middle class neighborhood.  Now I understand....
Source: Carpe Diem
The period 1986-87 seems to be the birth year for the slope of the square footage to become very steep only to be interrupted by recessions/slowdowns (line flattens out 1990-95, 2001-2003, 2007--?).  I don't think there is one particular reason for this, seems like a combination of housing policies (mortage interest deduction, low-to-no down payments, interest only loans, etc) PLUS Americans attitude towards homeowership (a "right") and "conspicuous consumption". All contribute to an over-allocation of societal resources towards this one sector of the economy, which makes the whole economy vulnerable to housing slowdowns. 

 I look around my own house and see wasted room and space (what is the purpose of vaulted ceilings?). This "extra" space is full of natural resources that are unproductive (wood, metal, etc) and it takes energy to cool or heat it---GAH!  Look around your residence---do you notice the same thing? 

The chart below shows the rather stark difference in living space between the US and Europe (this chart included houses as well as apartments, whereas the one above is just houses). Even US residents classified as poor apparently require 33% more living space than the average European.  Why do we need so much personal space?
Source: Carpe Diem
I am not advocating pro-active government policy to discourage the building of larger, wasteful homes--better known as "social engineering" by my conservative friends.  I would advocate government doing less--by that I mean discontinuing subsidies/policies that encourage over-building and over-spending on homes.  If you want a bigger house, don't ask me or any other taxpayer to subsidize it.

If you are going to take a conservative/libertarian stance, my friends, then you must be willing to pay for it yourself. Don't say yes unless you REALLY mean it.  Otherwise, we should not bag on someone else's subsidy/deduction...That is only "fair", right?

If you are a liberal/environmentalist-type, you don't escape criticism either.  Why do you have some much extra space soaking up societal resources?  The little bit of recycling you do to feel good is more than off-set by the extra housing you consume relative to what is sufficient for "sustainability".  Kinda  forgot about that, didn't ya?

There! I bagged on both sides of the spectrum. Guess that makes me the morally superior one, doesn't it?

Glad I am so perfect! :)
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