Archive for May, 2008

Doing our part

May 30, 2008

Ladies and Gents, please join me for yesterday’s CNN Money Poll!

Let’s see … I take a lot of flights but don’t have a car. Have owned halogen lights but indulge in 30-40 minute steaming hot showers as often as possible. Yeah –mid-sized sounds right. Let’s see the results:

Whew! I’m in the plurality. That will definitely help me sleep easy.

But I really wish my footprint could be “tiny” (gets me mad cred over at the Astor Place Starbucks). Better hop on The ‘Book and start planting shit in electronic gardens.

(On second thought: Maybe it’s time we stop dicking around and levy a carbon tax?)

What happened to Sam?

May 28, 2008

Gooooooood question.

To understand this, I must let you in on one of the greatest cover-ups in history . Ready?

There is no Sam. Sam actually never existed.

In 1973 what you know as “Sam” was constructed from an orange fleece, a cardboard life-sized cutout of Michael Cera, and a tape recorder that rotates between “[whatever you just said] represents blind faith in free markets” and “No way!”


(Michael Cera reference (c) Julia N. 2008 )

In the words of non-existent Sam: “No Way!”.

Way. No really — think back to all the goods times you and Sam have had. . Think hard. Did those times really happen? Or is Sam your Tyler Durden? (<– Spoiler alert) Focus … rack your brain .. were you really laughing on cue next to Sam in the SY dining Hall? Because ask anyone who was there — all they could hear was Jayson.

You probably have a lot of questions at this point. But the first surely is: “Does this mean that Jiardia story from Mory’s is fake?” I’m sad to report that it is. The waters off Cuba are as clean as ever.

So who’s been writing Sam’s blog posts? The duty is shared by Fidel Castro (still alive and using this blog as a smoke screen), Thomas Friedman, the Nicaraguan Furniture Lobby ….. and in posts with arbitrary links to my articles .. by me.

Why did the charade have to end? It had gone on far too long. In the spirit of Scott McClellan, it’s time to stop lying to everyone. And besides, we can do without “Sam” right? … right …..

… right?

….

(The Hand misses your delicate caress, Sam).

Sometimes ya just gotta share..

May 26, 2008

Ever start reading a book that is so good that you want to bring it up in every conversation you have?

Waiter: Can I get you some dessert? Coffee? Tea?
Me: HAVE YOU READ SHANTARAM??!?”

Police officer: You have the right to remain silent. Anything you say can be used agai…
Me: HAVE YOU READ SHANTARAM!?!?

Not even at page 100 and Shantaram is already one of those books. A passage:

“if you’re not having objections, I will call you Lin.”

I peered down into Prabaker’s round face and his large, dark, mischievious eyes, and I nodded, smiled and accepted the name. I couldn’t know then, that the little Bombay street guide had given me a name thousands of people, from Colaba to Kandahar, from Kinshasa to Berlin, would come to know me by. Fate needs accomplices, and the stones in destiny’s walls are mortared with small and heedless complicities such as those. I look back, now, and I know that the naming moment, which seemed so insignificant then, which seemed to demand no more than an arbitrary and superstitious yes or no, was in fact a pivotal moment in my life. The role I played under that name, and the character I became — Linbaba — was more real, and true to my nature, than anyone or anything that I ever was before it.

At 900 pages it does, however, suffer from one of my pet peeves. .. though I make exceptions for really good fiction.

Financing education on Wall Street?

May 22, 2008

Low education rates due to lack of financing (primary, secondary and tertiary) really bother me. And it’s not only because they perpetuate poverty, both domestic and international. It’s because it really doesn’t have to be that way.

Why?

Because the individual monetary returns on education (in increased future wages) usually far exceed the costs of providing the education. Toss aside any desire for social good and there is still profit to be made by financing education.

What’s implicit here is a challenge to whether education financing should be provided by the state at all. I would suggest that the private markets could step in and do a bang-up job. What they need is the right vehicle.

The right vehicle is this: Financing tuition with payback amounts based on the student’s future income. If you are a student, this could mean selling equity in your future income stream (on the extreme end). This may sound manipulative and predatory, but if you think about it, it’s really not. Low future earnings would mean that the loans are forgiven (or substantially reduced). High future income means you are subsidizing the low performers. It fundamentally operates the same way as progressive tax brackets.

Now there are questions of adverse selection and moral hazard (same sort of situation as microfinance) . But the investor, the student and society are all pretty well aligned on this. Harder study means higher wages for the student and greater returns for the investment and (directionally) more societal contribution. Artists might get a free ride on the back of the i-bankers — but maybe that’s the way it should be.

The role of the government in this system would be regulation, consumer protection and being the lender of last resort. Education is a human right. A system like the one above would be able to provide it to most. The state would need to provide for the rest.

Couple advantageous to consider
1) Increased competitive pressure would improve schools. Not only would schools be forced to compete for student tuition, but their ability to provide an education that lead to future high-income will be rewarded with higher tuition.
2) You can imagine this trickling down to our woefully underpaid teachers. Their ability to educate well means feedback in more demand for spots at a particular school, higher tuition and (hopefully) higher salaries to retain those teachers.
3) The market is allocating the resource, not government planners with imperfect information and perverse incentives. No more or less is spent on education than should be.

This approach has been tried a few times on a small scale — none have been too successful or replicated but I think it’s a matter of execution, not concept. MyRichUncle.com originally offered college loan interest rates based on future income, Yale Law School offered income-based loans payback with their Tuition Postponement Program. These models have all been either entirely or partially abandoned. (NB: The Australian Higher Education Contribution Scheme prices courses based on income grids, which is a form of this concept.)

Am I crazy here or does this make some sense? What do you think?

Two cool Indian start-ups

May 22, 2008

Two separate socially oriented start-ups in India have caught my eye lately.

The theme is this: Facilitating labor and service transactions in the informal/small business sectors by bridging the digital divide.

The first is Babajob, which claims to be the “Linked-In of the Village.” Babajob started with the somewhat proposterous idea of an online job market for the informal sector (think cooks, maids, drivers, security guards). This was in response to a perceived failure in the labor market in Bangalore — a lot of wealthy business professionals who were having trouble identifying reliable help in an informal sector with no shortage of underemployment. Babajob layered on the even more proposterous idea of creating a social network for the underemployed workers, many of who do not have access to computers and some of who are illiterate.

The founder, Sean Blagsvedt, saw the failure in the labor market as a symptom for the Indian social requirement of hiring through relationships. Hence the social network. If Indians are only willing to hire informal help recommended to them by friends, the best thing you can do is make them completely aware of the full extent of their social networks.

The challenge is creating a usable social network for the informal sector (who often lack computer literacy / availability). Babajob lets the free market go to work — offering up part of the service fees to referrers who sign people up for the site. Those interested in being referers might include internet cafes, non-profits and enterprising relatives. With a sufficiently robust social network you can start making connections like “My cousin’s cook has a sister who is looking for work as a maid. ”

The second is GreenMango (thanks Molly for the tip). GreenMango is based in Hyderabad and seeks to provide a rudimentary marketinng platform for low-income businesses. Think Online YellowPages for the millions of daily service providers in India (electricians, tailors, plumbers). The problem they attack is this: Many of these businesses can not afford to advertise and remain hidden to their prospective clients. At the same time consumers report difficulty finding reliable service providers. GreenMango seeks to faciliate these transactions by supplying a recommendation-fueled online resource and allowing small businesses to grow bigger.

The virtuous cycle produced by services like GreenMango is one that we have touched on before: Growing businesses = more employment, more human capital, higher wages, more demand for goods and services = Growing businessses. Rince, wash, repeat.

Wish List Omission

May 20, 2008

How could I forget? I omitted the number one item on my Wish List.

An adult-only airline. No crying babies. No 10-year olds kicking your seat. It would instantaneously steal away every single long-haul business traveler… well at least the ones with ears.


Wish list: The second coming

May 19, 2008

This stuff is gold, Jerry, gold. I claim 5% equity and a full set of schwag produced by any resulting ventures.

Phil’s wishlist part 2 (see here for part 1)

1) A computer screen that doesn’t kill the eyes, tire the brain and suck out the soul. Would pay approximately double price for a laptop with a screen like the Kindle. LCDs are miserable.

2) Image organization software (e.g Picasa) that intelligently tagged your pictures based on cues. You would start tagging some photos manually and the software would use image recognition to automatically tag your other photos when it “recognized” someone — better yet it would search the internet for other pictures of those people and add them to an alternate photo library. (see here for an egregiously cool example of similar technology)

3) An internet password manager that actually succeeds in remembering your passwords.

4) Reciprocal couch surfing. If I know I’m taking a trip to say … Sri Lanka .. in 2 months, I post that on the website. Someone who is from Sri Lanka, but is visiting Santiago (my current home) between now and then would answer. I would put them up now. They would put me up in Sri Lanka in 2 months. Provides for a much better cultural exchange than a one-way couch surf.

5) A drug that postpones digestion. Good for when you get back from lunch and need to do something important but your brain is fighting your stomach for energy. Would be nice if you could pop a pill, and postpone digestion until later when your energy needs are not as urgent.

6) It’s time we solved the “when should I leave my house to meet Person X at location Y at time Z” coordination problem. There are two dimensions to this problem. First, you have to figure out how long it will take you to get to Location Y. Second, you need to account for how late / early the person you are meeting will be. (Side question: What do you do when you get to a bar before the person you are meeting? Wait outside or go inside and grab a drink?). The components to the solution are a combination of Hopstop/Mapquest and GPS. Hopstop/Mapquest calculates that Person A needs to leave before Person B and both are alerted to this fact. When Person A actually leaves, the GPS tracks their progress and sends a message to Person B at the exact moment he/she should leave. They arrive at more or less the same time barring any unexpected delays. Best part is that everyone could get aggregated statistics on how late/early they are. Prominent lateness offenders would be alerted, shamed and lashed publicly for wasting our time.

Another thought, GPS tracking (with permission — like in the above example) remains a mostly underutilized piece of commonly available technology. Total game-changer in my opinion, and much more so than with driving directions.

Listmania baby! It’s sweeping the nation!

May 15, 2008

I like gambling. A lot. But not in casinos. I prefer betting on propositions. If you know me I’ve probably accosted you about Stickk.com where I’m making rain for charities by losing fairly sizable bets against myself.

If anyone wants to play, I tender the following three wagers

1) The next generation of world leaders is being born around now in the slums of the world’s largest cities, like Bombay and Nairobi. I bet 5 barrels of oil at 2040 prices that at least 1/3 of the Time Magazine People of the Year (or equivalent) in the 2030s will be from the slum of a large city.

2) Soccer will score higher Nielson ratings than Baseball within 10 years. Fairly certain about this. If I win, you buy me front row seats to a soccer playoff series. If you win, I’ll buy you front row seats to a baseball playoff series.

3) Neither Facebook nor Google will be the market leader in their space within 5 years (4:1 odds on 3 years). This one’s more speculative. If I lose, I’ll buy you 5 shares of Google stock at 2013 prices. If you lose, you buy me 5 shares of Google stock at today’s prices.

And to finish the list promise, three observations about Chile

1) I still really struggle using the Spanish “Usted” form of verbs. It makes me feel like Buffalo Bill from Silence of the Lambs: It puts the empanada in the microwave or it gets the hose!

2) Even poor rural neighborhoods in Chile are aesthetically pleasing places to be. This is because they paint the houses bright yellow, red and orange. Can’t help but cheer you up. Why do houses in the US have to look like this?

3) Romance in Chile goes through 4 official stages or “Etapas.” “Pinchar” means catching someone’s eye at a bar or exchanging phone numbers. “Andar” refers to when you have gone out with the person . “Salir” is when you are seeing the person with regular frequency. “Pololiar” is when you are girlfriend and boyfriend. At the Pololiar stage, you hold hands and make out everywhere you go including the Metro, supermarkets and especially parks. Young Chilean couples generally live with their parents and have to take romance into the public sphere. As a result, I vomit in my mouth on a daily basis. (Thanks to Bri for the analysis)

Conflationary effects

May 14, 2008

Catherine made a few great points about the various movements now attached to the organic food bandwagon. The original intention, “eat local food,” has become conflated with other peripheral causes and as a result the movement as a whole is suffering an identity crisis. People no longer know what’s it’s all about.

How about Al Gore’s bedfellows?

The fight against climate change is still seen and marketed as an “environmentalist” movement. Think of the its dominate image: Planet earth:

The message is still emphatically “Save the Earth from Human Activity!” The problem with this message is that, in people’s minds, it carries along all the Greenpeace, Whole Foods, Sierra Club, vegetarian, save-the-rainforest, baby-seal-clubbing baggage. While most people wish it well, they don’t really care about the environment … at least not enough to change their habits.

Of course global warming is much more than an environmentalist movement. It is a humanist movement — or maybe a “preventing the death of untold millions and collapse of the world economy” movement . The earth will go on spinning. This will not be the first time it has warmed up. It’s humans who are in trouble if things start to get too steamy up in this mug.

From a marketing and mass-acceptance standpoint, the best thing that can be done is immediately shaking the notion of “environment” from the climate change lobby’s vocabulary. Get rid of the earth imagery, the word “planet,” and pictures of the snows (no longer) on Mt. Kilimanjaro. Stop forming coalitions with organizations that are not 100% focused on reducing carbon emissions for human sake and human sake alone because they dilute the message and cause people to tune out. Focus your attention on reminding people exactly why they should care:

(see The Great Halogen Alibi and Costa Rica Changes the World for other Hand perspectives on climate change)

Lest we forget…

May 14, 2008

.. especially in times like these.

Middle America isĀ 37 years old, lives in a city, and will all his life.

And pretty soon he’ll speak Spanish.

(courtesy of Kung Foo Monkey)

Budgetary discretion

May 12, 2008

If I were named Comandante over the US budget tomorrow morning, the following would happen before you got out of the shower.

1) Gas tax. Quadrupled
2) Farm subsidies. Abolished
3) Physical science funding. Tripled.

Agree? Disagree? Volunteer an alternative three. No explanation needed.

The Junta Idiot posts again

May 12, 2008

Not to take away any attention from Sam’s fantastic post on “Why they are poor,” but I occasionally moonlight as a clueless guest blogger for the Food Junta under the persona “The Junta Idiot.”

Check out my latest post on:

  • Why pasta is the Lebron James of the bachelor’s kitchen
  • How homemade mayonnaise is going to take the “Ironic Gourmet” world by storm

Read it here.

Why they are poor

May 11, 2008

I went to Nicaragua, one of the poorest countries in our hemisphere, to see poverty for myself. With a literacy rate of 68% and per capita GDP of $3,200, Nicaragua is a world away from New York, my previous home. But why is Nicaragua different from New York? Phil and I have touched on many of these in The Hand, but I wanted to pull together a list of my top reasons:

Lack of education:

Education is expensive and a benefit of wealth, so to some extent, this is a story of “they’re poor because they’re poor.” Nonetheless, I can’t stress how much I’ve learned about the relationship between education and life opportunities.

Many Nicaraguans do not have a high capacity for abstract and analytical thought, an extremely important life skill. Wealthy Nicaraguans are exempt from this judgment because they have access to good private education. However there is a huge deficiency in educational opportunities for the poor.

I met one shoemaker who had pulled himself out of poverty with a shoe workshop employing over thirty people. I wasn’t surprised when he told me that a revolutionary government in the 1980s gave him the opportunity to study chemistry in Cuba. Shoes have nothing to do with chemistry or Cuba, but I’m sure the education was useful and is now part of the reason the shoemaker has had modest success.

The level of education has increased significantly in the past 30 years. Nevertheless, there’s a ways to go. 27% of Nicaragua’s students suffer chronic malnutrition. Bad schools make it hard to learn, but starving makes it even tougher and retards brain development.

See Barefoot Basketball for more intuition on why the education gap matters.

Lack of trust in enterprise:

I’ve spoken to dozens of entrepreneurs, and many say the same thing: the biggest challenge to making their business grow is hiring trustworthy managers who want to work hard and move up the latter with an ownership mentality. How can you build a business if you don’t trust your managers?

There are other reasons trust is fundamental in enterprise. The producer-distributor relationship can be burned by mistrust: does the producer deliver the right product? Does the distributor pay on time? Do both work for a long term relationship where both prosper? Or does each look for a quick individual win where the other may get screwed?

Why is there no trust? Business situations tend to be less stable, so people don’t invest in long term benefit through cooperation. I also believe that the lasting impact of the violent colonial relationship has created cultures of mistrust, but that is a much longer discussion.

Lack of entrepreneurship:

Check out Phil’s post on this problem and how to fix it. Very insightful. I spoke to some entrepreneurs who said that Nicaraguan society puts upmost value on studying a “profession,” like Doctor or Lawyer. Entrepreneur is not a title, and titles are important. In many U.S. social circles, it is the opposite: Doctor and Lawyer are boring titles and Entrepreneur is exciting, laden with mystique and social value.

Bad governance:

This could be its own post. Frankly I haven’t seen its effects as sharply as I expected. I have seen that the tax regimes are overly harsh for small businesses. Large businesses can often dedicate the resources to find loopholes or lobby their way to a lower tax burden. Informal businesses don’t pay anything. Meanwhile, to make the jump from an informal micro-enterprise to a formal small or medium business, with full capability to grow, import, and export requires a huge tax cost. I’ve seen it sink a shoe business that was profitable as an informal workshop.

I’m sure bad governance prevents development in more profound ways, but I wasn’t able to observe the effects directly while in Nicaragua.

Other suggestions?

These are the reasons I have seen. Does the Invisible Hand readership have other ideas?

People like lists, right?

May 11, 2008

As my English has deteriorated (but incidentally, not actually replaced by any Spanish), I am turning to a writing crutch. 5 lists of 3 in 5 days or I’ll refund your Adwords money.

Today’s theme: Stuff to read and stuff to watch

Three great stories from three of the best storytellers. Each video about 20 minutes.
1) Malcolm Gladwell on the modern genius the world needs. Profiles of two different types of genius.
2) Jill Bolte Taylor on experiencing a stroke through the eyes of a neurologist. Thanks Nic for the link.
3) Al Gore comes to TED with an even more forceful presentation than Inconvenient Truth.

Gotta love travelogues. Great stories, history, culture, adventure and mild xenophobic hilarity all wrapped into a quick-reading package. Three of my favorites (all Brits and Brit-wannabes)
1) William Dalrymple retraces Marco Polo’s steps as a college student in search of Xanadu
2) One of Bill Bryson’s lest known and less mature (read: funnier) works. Travels through Europe.
3) Rob Gifford hits the Route 66 of China. A well balanced description of what’s going on there. None of the ridiculous exaggeration and excessive praise/criticism that infests every other book on China.

Elevators and subway cars

May 6, 2008

Incoherent cultures of public courtesy: Chile and the US.

Subway culture in America: Embarking passengers stand aside while disembarking passengers exit the car.
Subway culture in Chile: Passengers on both sides fight past each other when the doors open, elbows swinging.

Elevator culture in Chile: The first person onto the elevator holds the door open, temporarily assuming the position of elevator attendant. He/she waits for everyone in sight to enter and then allows the door to close
Elevator culture in America: Everyone stands in the back of the elevator, hoping it will shut in the face of the fat woman stampeding towards the closing door and thus enabling them to begin their journey 2.5 seconds sooner. If successful, smirks and furtive glances are exchanged.