Tuesday, October 28, 2008

The 1 and the 99

I had a follow-up post started on the evolution panel, but it will need to wait a bit.

Our new puppy Z snuck out this afternoon and we haven't been able to locate him. Some kids in a nearby apartment complex said he came through there and they played with him for a while, but then he ran off.

Hopefully he's just in somebody's home right now and either they'll see our upcoming flyers, or they'll take him to a vet or shelter where his microchip will be scanned and they'll call us.

Hopefully he's in somebody's home. The low tonight is in the 30s.

I know more fully what it means now to do all you can to find that one lost sheep.

EDIT: A sweet young couple about a mile away found Z tonight and posted on Craigslist, just minutes before my own posting went live. I got many emails from people saying, "Oh my gosh! This is so awesome -- check the website! Somebody found your puppy!" Our postings were literally on top of each other, with one titled "Lost" and the other titled "Found".

Guess it goes to show you, at any given time, if you're wondering whether you're lost or you're found, you might actually be both.

More on the evolution panel

We had some great comments and questions after my last post -- tonight I'll answer a couple of them directly. I just know I'm gonna be wordy on these, so it was too much to leave in the comments section!

Question 1 -- Did you lose/win the debate?

Thankfully it was just setup as a panel, and the minister/moderator introduced us and explicitly stated to the room that it was not a debate. I appreciated that from him. He had worked closely with the four panel members over the past few weeks to ensure that the mood was light and respectful, and before we began on Sunday morning he read the following excerpt from an email I sent to the panel last week:

"I like to believe that our church members are unified in spite of our differences, not in the absence of them."

So if it wasn't a debate, what was my purpose/goal in serving on the panel? It was simple -- to put a personal face on a different perspective. I didn't want to change the attendees' minds on the issue of evolution -- they aren't ready for that big of a shift. I merely wanted to cause a ripple in their very clear, black/white worldview.

On my post about evolution several months ago, I noted that for some people this is a "Level Two" issue -- something that is essential to their entire worldview and faith. In other words, for them, if the world is more than 6,000 years old then you can throw the whole bible away. If the big bang really happened then God doesn't exist. They hang everything together on that single point -- a literal interpretation of Genesis 1. It's all black or white, with no room for grey, no room for the bible having things like poetry, parable or metaphor. One panel member said exactly that -- "if we leave room in the bible for poetry, then where does it end? Maybe Jesus never really lived at all."

So you see, if I win the debate and somehow get them to accept that the earth might be older than 6,000 years, their entire faith comes crumbling down. That's not my intent. Paul speaks pretty clearly about this in his letter to the Romans. Here are a few different sections from The Message translation:

Welcome with open arms fellow believers who don't see things the way you do. And don't jump all over them every time they do or say something you don't agree with--even when it seems that they are strong on opinions but weak in the faith department. Remember, they have their own history to deal with. Treat them gently.

Forget about deciding what's right for each other. Here's what you need to be concerned about: that you don't get in the way of someone else, making life more difficult than it already is. I'm convinced--Jesus convinced me!-that everything as it is in itself is holy. We, of course, by the way we treat it or talk about it, can contaminate it.

Cultivate your own relationship with God, but don't impose it on others. You're fortunate if your behavior and your belief are coherent. But if you're not sure, if you notice that you are acting in ways inconsistent with what you believe--some days trying to impose your opinions on others, other days just trying to please them--then you know that you're out of line. If the way you live isn't consistent with what you believe, then it's wrong.

Good stuff, and it reminds me to get back to following the golden rule. I want people to give me space and grace for my own opinions, then I have to do the same for them. When I spend some time seriously thinking on this, I realized there are two things that really irked me about previous conversations with creationists:

1) They assumed their own belief was the only true choice, and anybody who didn't agree was dumb, evil or terribly misinformed
2) They got very emotionally involved in the issue, literally shaking with anger at the thought of other people's weak or nonexistent faith

My main goal on the panel was to avoid both of those mistakes, by:

1) Having an open mind and projecting a sense of genuine humility
2) Staying cool, calm and loving, with no anger to those who disagreed with me

That's how I want people to treat me, so it was "golden rule" time for me to do the same.

Question 2 -- "If you dont take Scripture in its entirety, how do you reconcile the parts that dont make any logical sense. Do you actually call yourself a "Christian"?

I'll sorta be coy and devious on this one, just for the sake of brevity. These questions start to get to the core of my entire faith, and the answers are more than I can post in a few paragraphs.

So to be coy and devious, I don't really understand what "take scripture in its entirety" means anymore. I used to think I knew what that meant, and I held that over people who didn't agree.

So is the whole bible true or not? Literal or not? Song of Songs is cleary poetry, but is it "true"? If so, what is it telling us, and is that truth any less important than historical facts?

Here are my two devious closing comments:

1) If I told Jesus I was a Christian, is it possible he would reply, "You're a what?"

2) In Paul's second letter to Timothy, when he wrote that "all scripture is God-breathed and useful for teaching", did he think he was writing scripture?

Sunday, October 26, 2008

Finding balance in pride and humility

I did something good today, and I'm proud of it. I was asked to sit on a "panel" in a bible class at our church with three other men to discuss an explosive and often-divisive topic: evolution. Really the topic was science in general, but evolution has been the primary topic of that class. I've written about it here before -- just search "evolution" in the search bar above and you'll find those old articles.

Anyway, this class has continued but I haven't been able to participate because I've been teaching a class of my own for the past five months. Then this panel idea came up.

At first I was excited, but over the past week or so I'd been getting more and more nervous. I discovered that all three of the other panel members are young-earth creationists, believing that a 6,000 year-old earth is an essential foundation of the Christian faith. I don't personally hold to that view. It felt like I was walking into a very dangerous situation. In the end, though, it went very well and several people came up to me after class to say they appreciated my contribution.

Below is what I said this morning. Yes, it's pretty close to verbatim -- my memory is freaky like that. After that, I'll post something humbling to balance things out.

Question 1 -- Why are you here on the panel? What is your interest in this topic?

I have no professional training in science -- I was just a dumb business major in college. I'm here probably for the same reason many of you are here listening this morning; I just love this stuff. Science fascinates me, and I love discovering and learning more about how our universe works.

Because of that, my favorite branch of science is physics, since they ask the absolute biggest questions -- what the world is made of, how it works, what are the forces at work around us, and so on. Those big questions are so leading-edge, and the theories often so unproven, that it brings with it a big dose of humility. The people who inspire me are the expected former legends of physics like Einstein and Neils Bohr, but there are scientists today like Brian Greene and Sylvester Gates who are equally brilliant yet still able to communicate to average people like me. I read these guys' books and see them speak in person whenever possible. Like I said, I just love this stuff.

Question 2 -- What is your definition of "evolution"?

Well, my answer is different than those you've heard from the other men here, but when I say "evolution" I'm just talking about the process of species changing over time due to natural selection. It's happening in our world right now, and I'd bet that everyone in the room agrees. Here, I can test it -- would anybody here give their children the flu shot from 10 years ago? Probably not, because the virus changes ever year, and the CDC tries to keep its flu shot relevant to the currently active strains. So things are constantly changing.

Even Ken Ham (the author of the book being used in bible class) agrees that evolution is a part of the picture. Let's take his view of Noah's ark, a literal event a few thousand years ago when only a maximum of 1,000 species survived the flood. And yet today there are over a million species on our planet. His explanation is that right after the flood, God started a super-fast form of evolution, turning one species of primate into 20 in just a few generations. One dog breed became hundreds.

So both sides agree that evolution has happened and is still happening, it's just a debate over the speed that animals evolved in the past. That's all I mean by evolution. The origin of man is a different issue for me.


At this point a class member said the following -- "But if our adversaries hear us talk like that, won't it weaken our argument? If they think that in any way we agree with them then we'll appear weaker and will probably lose the debate. I think we need to tell them upfront that we don't agree with any of their stance on evolution."

This was my answer:

I don't want this to come off as a personal attack on what you just said, but I'd like to point out how differently I approach the issue itself, regardless of my conclusions on all of this.

You said words like "adversary", "debate", and "lose", and mentioned that we have to appear strong to win the argument. In my experience in speaking with scientists, this just isn't effective. A true dialogue requires me to first humble myself, put aside my judgment, and listen openly not only to the content of the speaker, but to the person himself. I need to hear where he's coming from and truly try to understand, and that can be a very vulnerable thing. It's not about strength -- strength doesn't work, at least when I've tried it. It shuts down any chance of two human beings actually having a discussion and impacting each other.

I always start with what I have in common with someone else -- always. I start with what we agree on, use that to build up a base of companionship, and then go from there into the differences with an open mind.

(The commenter came up to me after class and apologized, saying that his words didn't come out like he meant them to. We smiled, shook hands and were better for it.)

Question 3 -- How do you see science and faith working together in your life?

Wow, in a lot of ways, but first let me tell you where they don't work together for me. I think that at the very root level, deep inside my soul, science and faith answer different sets of questions.

Science seeks to answer the What/When/How of the universe. For example, on the issue of creation, science continues to examine and study what happened, when it happened, and how it happened. And if all of those things somehow get answered, although I don't think that will happen in my lifetime, they still aren't the most important questions to me, when it comes to creation.

The most important questions about creation, to me, are Who and Why. Science may someday answer a lot of the things we're discussing today, but it'll never provide a pupose for my life, the "Why" of my values and priorities. That is the arena of faith. So at the very deepest level, science and faith are attempting to answer different questions for me.

Above that deep level, though, there's all kinds of overlap. For example, one of my favorite bible passages is in Luke 1, when Mary sings a song of joy after being told she would give birth to Jesus. She said that her soul gives glory to God, and her spirit rejoices, and then she gives evidence after evidence of what God has done -- shown mercy here, given strength there, provided guidance over there. She rejoices because she looks around and sees God working.

That's how science and faith work together in my life. I read about the weird behavior of an electron and I give glory. I hear a speech about dark matter and I rejoice. It's just an amazing universe, and it's my pleasure to get glimpses of the creator by looking at things in new ways.

Question 4 -- Time is almost up, so in one or two sentences, please tell us why we should even discuss these topics, if they're not "salvation issues".

(The other three men, in their own ways, all disagreed with the question and said that belief about evolution is a salvation issue, because if we doubt Genesis 1 then we are doubting the whole bible. I kept my mouth shut and didn't mention the irony of a creedless church saying you have to believe in young earth creationism to be saved.)

I'll answer the question with another question -- if we can't discuss the important topics of the day with our fellow church members, then what are we doing here? Whatever stuff is inspiring us, challenging us or bothering us, like the financial crisis, should be discussed right here. I don't want to wrestle with life's toughest problems with strangers, I want to lean on my brother and sisters right here for those things.

So that was my morning. It was a lot of fun, althought I was terrified before it started.

And now, as promised, my dose of humility:

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Thursday, October 23, 2008

Z is for... Z?

There is a rumor out there that we have another puppy dog. The rumor is true.

A few months ago we were petless, and then along came Mo the Miniature Schnauzer to add a new dimension to the family. After the weeklong evacuation due to Hurricane Ike, we discovered that Mo was, deep in his heart, a pack animal. He needed a brother.

As a refresher, here's Mo -- 18 months old and 16 pounds:

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And here's his new little brother, Z -- 10 months old and 12 pounds:

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I admit that we're weird with names. We have two dogs and a total of three letters in their names! But the theme was consistent -- a shortened and warped version of an Old Testament biblical character.

Mo is short for Moses, because he was so extremely shy when we met him. He was rescued from an abusive puppy farm when he was four months old and still bore the emotional scars. He needed a buddy to make him more secure, just like Moses needed Aaron.

Z is short for Ezekiel, the prophet who left his home at a young age to move to Babylon, just like this doggy left his foster home to come to us. But that's where the metaphor breaks down... you see, Ezekiel was being joined to his people in exile. Hopefully my family isn't in exile. And in one of Ezekiel's first visions, an angel instructs him to eat a scroll.

Unfortunately, Z has already shredded a children's book or two around here. Maybe our naming is prescient after all!

We should've named him JC. Then he'd behave. At least until we played Monopoly on a Sunday and then he'd probably overturn the game pieces and growl at us.

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Tuesday, October 21, 2008

Redlefty's moment in the sun

Welcome, everyone, to the unprecedented and highly-anticipated fourth presidential debate. This is being televised all over the world from a studio lot in Hollywood, and I am your host, Michael. From now on I will simply be known as The Super Moderator, or Supermod for short.

Why Hollywood as the site of this gimungous event? It's a different setting for a different type of debate. We'll be relying on props from movies (Princess Bride) and TV Shows (Fear Factor) to introduce higher stakes for this discussion. It's time for the candidates to put some skin in the game.

I will be asking serious questions of our candidates. If they hem, haw, fudge, doublespeak, lie, or just give me an answer I find unsatisfactory, they will pay a price. The price goes up as the offenses are repeated. Let us begin.

Supermod: Senator Obama, Senator McCain. Glad to have you here. It's about time we get some real answers. Let's start on the economy, as that seems to be the hottest issue in this election right now.

McCain: People are hurting and they're angry, and I don't blame them.

Supermod: Did I ask you a question?

McCain: No.

Supermod: Then shuttie.

Obama: (Laughing)

Supermod: Laugh now, while you can. Here comes the first question. Senator Obama, you've regularly stated that your economic training and background exceed that of your opponent. You claim to be the better choice for economic leadership. Yet your proposed budget adds more than $250 billion to the deficit in 2009, and that's before the recent bailout bills. Why more deficits?

Obama: Well, first I'd like to thank Hollywood for hosting us...

Supermod: Zap him.

(Senator Obama receives an electric shock. A mild one.)

Supermod: In the future I suggest you get right to answering the question. You lose your turn. Senator McCain, you've been drilling (haha) your opponent in the media and at rallies for "spreading the wealth", and saying that his progressive tax plan is socialist at heart, is that correct? Again, I suggest you stick to clear and simple answers.

McCain: Yes, that's correct.

Supermod: Do you realize our tax system has been progressive since 1913, under both Republicans and Democrats? And that 40% of Americans today pay no income taxes? And that the top 5% of American earners pay half the income tax in this country, under Republican-generated tax plans? It's already as socialist as anything your opponent would like to propose. So I ask you, is it time for the flat sales tax, so that everybody pays according to consumption and we can eliminate the IRS for good?

McCain: No that wouldn't be fair.

Supermod: Ah I see. This year 40% of Americans aren't paying income taxes, yet they receive benefits from other taxpayers. Isn't that "spreading the wealth"?

McCain: No, this is different. I...

Supermod (interrupting): Bull. Fezzik, jog his memory.

(Andre the Giant returns from the dead and gently nudges McCain's skull, sending him to the floor, unconscious)

Supermod: Well, then... Senator Obama, I guess it's your turn again. How about we switch topics?

Obama (twitching): I'm agreeable to that.

Supermod: Let's talk campaign financing. I heard you raised $150 million in September -- congratulations. Why did you go against your earlier promise to use public financing, with its $85 million total limit? I remind you that the electric shock was merely the beginning... it gets worse from here.

Obama: Well... I changed my mind once I realized how much more money we could raise privately.

Supermod: Honesty! Thank you, Senator. This is an epic moment. Now let's take it a step further. You're the candidate for middle-class America, right?

Obama: That is correct.

Supermod: You care most about the average family in need, right? Not those big corporations and lobbyists?

Obama: Absolutely. I want to help the foundation of our great country -- our families.

Supermod: Excellent. So how much of your $150 million will you be donating to food banks, job placement centers and The Salvation Army? $20 million? $50 million? You could give away $100 million and still outspend your opponent over the next three weeks.

Obama: That's an incredible question, and one I'm honored to answer. It's a complex issue, and there are at least two ways to address it. To begin, I'd like to point out that the notion that somehow my campaign does not care...

Supermod (interrupting): The notion that somehow you'll give away a single dollar of this money strikes me as unlikely. The notion that you personally gave less than 3% of you annual earnings to charity until two years ago when your candidacy became more than dream... well, that's not a notion. That's just fact. Roaches.

Obama: Excuse me?

Supermod: I wasn't talking to you. Lackeys! Bring the roaches. The hissing ones.

(A bucketfull of Madagascar hissing cockroaches is dumped on Senator Obama's head)

Supermod: McCain, you awake yet?

McCain: Mavericky.

Supermod: Close enough. You ready to talk about energy policy?

McCain: Nothing but straight talk here.

Supermod: Yeah, so far it's been as straight as Richard Simmons on disco night. We'll try anyway. "Drill, baby, drill" continues to be a chant at many of your rallies. Yet even the most optimistic forecasts calculate that we can only add 25% to our current production by tapping all available oil discoveries on our soil. And this extra 25% goes to the world market, where it only makes a 3% impact. So at most our gas prices drop 3%, right?

McCain (angry): Maybe.

Supermod: (raises eyebrows)

McCain: Yes. But you're still not accounting for shale oil.

Supermod: Shale oil?

McCain: Yes, shale oil! We have the biggest deposits on the entire planet! Have you heard about that!

Supermod: Of course I have. I didn't ask "shale oil?" because I didn't know about it. I asked because it's a dumb idea and I hoped you'd do better than this.

McCain: ...

Supermod: It's devastating to the environment, it's extremely messy, the resulting oil product is often high in arsenic content, and at the end of the day we're still burning fossil fuels and filling the air with crap. We can spend a few hundred billion in building a shale oil economy to complement our crude oil economy, or we can spend a few hundred billion and get close to moving off oil altogether. Which do you want to do?

McCain: It's a false choice. We can do it all, and at the same time too -- we're Americans!

Supermod: That's enough. Back to you later. Senator Obama, how you doing with those roaches?

Obama: I come from a humble background; I'm no elitist. I can handle roaches.

Supermod: Oh, so you're the guy to connect with lower-income America?

Obama: Certainly. That's my heritage.

Supermod: Excellent. That's going to come in handy for you tonight. We're going to get you up in an airplane, strap a parachute to you, and let you jump down into one of the most pro-Obama regions in the nation. It will be a good example of how you can identify with our soldiers, even though you have no military experience.

Obama: (Sweating). Very well. But what does that have to do with lower-income America?

Supermod: We'll be dropping you into downtown Detroit. Good luck.

Obama: WAIT! I...

(Senator Obama is secured by Jerry Springer bouncers and loaded into a waiting SUV for his adventure)

McCain: (Nervously) ...So I can go?

Supermod: You betcha. In fact, we're going to drop you at one of your own rallies in a solid "Pro-America" small town. Just your type of crowd. Heh. Hehe.

McCain: C'mon... what's the catch?

Supermod: You'll be going there as a black man.


(More bouncers grab Senator McCain and begin the skin transformation process)

Supermod: Thank you, America, for tuning in. Both of our candidates will get to spend the next several hours learning some empathy for the other side, as they experience the darker sides of their own constituents. You see, we all have problems. Republican, Democrat, Libertarian... there's no perfect party, no perfect solution. So whichever side you're on in this election, remember that neither your candidates nor your policy ideas are all good. And the opponents aren't all bad.

In four years, your life may be slightly different due to which candidate gets elected. Either man may be able to shape laws and policies to impact your day-to-day existence. But those impacts pale in comparison to what you do to shape your life over the next four years.

You hope for change? You hope for better days? You hope for enriched family life?

Don't hope. Choose.

Saturday, October 18, 2008

Here we go again...

Do you have those parts of yourself that you don't like, and then you see those parts resurface time and again and it ticks you off every time it happens? And you can't believe you still have that same old thorn in your flesh after all these previous lessons?

So here I go again. I promised two more blog posts on the economy, even though earlier this year I promised to quit promising stuff. Because life changes, things get in the way, the muse passes and then I can no longer write what was on the tip of my tongue just days before.

My whole family got a stomach illness last week, starting with Jack on Monday and ending with Samantha on Friday. I'm woefully behind at work and scrambling to put together bible lessons for church. I'm pretty much in survival mode.

I still have the knowledge that would have enabled me to write my planned postings on the economy, but for me to get it in writing takes timing, inspiration and something mysterious that just says, "it's time". And right now those things aren't there.

For those of you I speak with on the phone or see in person from time to time, I'd be happy to talk you through any economic stuff you're curious about. But for now my writing on the topic is closing.

I would promise to quit promising stuff, but something tells me I'd regret that later!

Sunday, October 12, 2008

Economy part 1 -- the real root of our problems, and nobody's talking about it

As promised, here's part one of a three-part series on the economy. Tonight I write about what I believe is one of the key underlying contributors to the economic troubles we're experiencing today -- low productivity growth, a weaker dollar, high gas prices, failing banks and mortgage companies, national debt, etc...

Debby was correct with one of her comments on a previous post, saying that the root of economic crisis is often greed and entitlement. While that may be true, I'm not even remotely hopeful in ever changing that part of the human condition. What I'd rather do is channel that reality of greed into a more constructive, contributing workforce. First, though, a small aside to set the stage:

Aside #1 -- The Shell Game

Have you ever seen a guy doing the shell game on a sidwalk somewhere, maybe in New York City or Las Vegas. They're shuffling three shells around on a table or boxtop, and underneath one of the shells is a little rubber ball? They move slowly for a while, letting you feel confident you can follow the ball, but once money is being bet they always, always win. They do this one of two ways:

1) They move so fast during a game when an actual bet is placed, you have to make a pure guess about which shell the ball is under. So you only have a 33% chance of guessing the correct shell.
2) Well, you would have a 33% chance... if the ball was actually under any of the shells. Most gamemasters do a lightning-fast trick at the beginning of the game and hide the ball in the hand or up their sleeve, so the ball isn't actually in play at all. They'll sneak the ball back under a different shell (one you didn't pick) at the end of the game for the "reveal".

Here's a video to show you -- and this completes the aside:

Back to the topic at hand.

The foundational strength of an economy is in its ability to make consistent gains in productivity. That's it. To keep making more products, more services, more new jobs, and to do it faster and cheaper than the previous year. This is how the standard of living goes up.

Yes, these gains can be compromised and sometimes even erased by other factors (tax policies, government spending), but you have to at least start with solid gains in productivity. No policy in the world can help an economy that isn't using innovation and hard work to grow.

McCain and Obama have repeatedly stated that the US has many of the best and brightest people on the planet. As a US citizen I'm very biased but generally I agree. We've got tons of sharp people in America today.

But what types of jobs are our best and brightest choosing today? Do they become doctors and lawyers, extending our lives and defending our rights? Yes, some do. Do the most innovative and brilliant go into management and build businesses that create new jobs? Yes, some do, thankfully. These are all things that contribute strongly to growth in productivity.

But for a couple of decades we've been sending more and more of our brightest into financial jobs -- namely investment banking and brokerage. In other words, instead of building new things, extending life or creating jobs, our best and brightest are merely trading stocks of other companies that do that stuff.

Aside #2 -- My own experience

I got my MBA about 10 years ago, and it was a very intense program with lots of super-brilliant people. I was the youngest student so I was never going to be the superstar of the class -- my career experience was too lacking (read: non-existent).

But many other students had solid business experience even before the MBA. And by the time we approached graduation, they were both highly-trained and highly-experienced. They were the superstars. And what jobs did they pick? All four of the top students went to Enron, because at the time they were offering the most money. The students became energy traders, essentially "moving" kilowatts around the country to take advantage of price differentials. It was a shell game. They weren't actually creating anything of value -- it was a mirage covered by lots of fast motion and activity, but in the end only the gamemasters (Enron executives) were the winners. The students' talents were being wasted. Everyone else in the economy lost out while the best and brightest chased the money.

Aside over.

Am I saying that investment bankers and brokers are only playing shell games and don't provide any value to the economy? No, of course not. In my opinion, they provide a few very important services:

1) General financial advice and education to us non-expert people
2) Corporate research that gives us more transparency into which companies are solid and which are not, and as a result, which stocks might be good buys
3) Market trading programs and systems that help more investments happen faster, cheaper and more accurately

Note that one thing I didn't put in the list is how these guys create managed mutual funds for us to buy. It's a controversial topic, to be sure, but an analysis of history hasn't been kind to mutual fund performance. In general they don't do well compared to index funds which merely follow the market as a whole. Yet the management of mutual funds is where the industry makes its huge, huge money. Even though the vast majority of fund managers don't even beat the market. That part is a shell game, becuase the fund manager is guaranteed to win with big salaries and sometimes big bonuses, even if their own fund loses money. And if their fund actually makes money? Then the bonuses enter into "ridiculous" territory.

Investment bankers and brokers do deliver a service, in the three items I just listed above. But are the benefits of that list big enough and important enough to take up the efforts of our country's best and brightest? Who will design the next breakthroughs in consumer technology? Who will help find smart, profitable and sustainable uses of alternative energy? Who will get involved in public service and help this government solve the complicated mess of healthcare and social security?

There are so many big, pressing, tough issues facing us over the next decade. Just like every decade. And we need our best and brightest working on those problems, not on how to leverage a hedge fund.

I'll close with a final aside, then I'm done for today.

Aside #3 -- Does following the money really work?

More of my experience from the MBA program. I didn't go to Harvard but we used many of their case studies in our curriculum. One of their most fascinating stories was about themselves.

You see, for over 35 years Harvard has been polling its alumni on what their dreams are for their career. They've also been polling to see how many people actually followed their dreams after getting their MBA, and how many graduates just took big money and "settled" for a safe, secure job.

What they've found is that long-term, over an entire career, the people who followed the money actually made less of it than their dream-following peers.

Lesson: Follow your dream. Use your talents. It will inherently tend to do the most good for the most people, lifting all of us up. That's how an economy, and a culture, grows. Oh, and by the way, you'll make more money too. So if you want to help people, follow your dream. And if you're just greedy and want to make money? Follow your dream.

Saturday, October 11, 2008

More on economy coming

Sorry it's been over a week since I've posted -- the financial crisis has kept me plenty busy. I've been spending a lot of time over the past 10 days reading and researching more about what we're facing, both in terms of what has caused it and what kinds of things we can do about it now.

Almost nothing has changed from what I wrote here 10 days ago. It's one of those times when I hate being right.

When I haven't been reading/researching, I've been talking to banking executives (it's my job -- I'm a consultant/sales manager to bankers). In particular I've had a couple of very good, deep conversations with bank CEOs about how the next six to twelve months are looking for them. It ain't pretty and there's no quick/fast road back, no matter what our current President says. Rule of the harvest, remember?

My buddy James has implored me to write more about the economy, so that's exactly what I'll do. Over the next three days, I'll write on these three topics:

1) The real root of the problem (and the solution) that nobody is talking about
2) Tracing the life of a mortgage, in layman's terms
3) Who's to blame (everybody) and who in Washington has the fix (nobody)

Sounds cheery, huh? Don't worry, I'm not a fearmonger. I just try to be a realist.

Example: In this weeks' presidential debate, Tom Brokaw asked the candidates, "Is it going to get worse before it gets better??"

Obama and McCain both chickened out and gave long answers that meant nothing.

My answer would be "Yes. But it will get better."

Wednesday, October 01, 2008

Rambling thoughts on...

Storm Lessons

-- Electricity is a very, very good thing. I've heard rumors that people actually lived in Houston before the days of air conditioning, but surely those aren't true. Or those people were insane.

-- There are a few catalysts in life for making people's true colors shine through. Things that help you see right to the core of a person. One is stress. Another is when a stoplight blows away and a major intersection becomes a four-way stop. I used to think our city was metropolitan and "with it". Now I've seen the true colors and realize that we have millions of idiot savants who can somehow have the profession to afford a nice car, yet can't figure out when it's their turn to go through an intersection.

-- When the heat is on and food/ice are scarse, life gets real simple. Put another way, the mind doesn't ponder the deeper mysteries of existentialism when it's busy finding a way to make sure the body continues to exist.

-- Whomever thinks that the hurricane put Houston back in 1940s-era lifestyle is forgetting about cellphones.

-- Most people are good. We saw lots of helping hands and selfless acts, and very few angry line-breakers.

Economic Theories

Some people have asked me what I think about the current market volatility, bank failures and federal bailout plans. I practically had a double-major with economics and International Business in college, and my MBA had a lot of training in economics as well, so I know at least a little about what's going on. But I'm by no means an expert. Not that it matters, because not even the experts can predict something as complex and multi-faceted as our economy. And I'm not objective either and I'm perfectly willing to admit that.

Most of my education and training was in the "Chicago style" of economics, the free-market spirit of Milton Friedman. In other words, when it comes to the economy I was trained by fiscal libertarians, people who think the market almost always works better, faster and cheaper than any government entity we might try to use to accomplish things. For the most part I still agree with that. So now you know my bias.

I look at our current situation and think of the rule of the harvest. We reap what we sow. The seasons are the seasons -- we can't change them and must work within them. And if we don't plant our crops in the spring, there won't be any food in the winter. No shortcuts or well-wishing can change it. You can't grow a crop in a week. The rule of the harvest.

I look at our country's economy and see that the inflation-adjusted income of 95% of Americans has fallen consistently for over a decade. Yet the average size of homes continues to increase. So we keep making less yet buying bigger houses. Our national savings rate is negative, and has been for some time. Add up all our citizens and we spend more than we make, at a personal level.

No surprise that the same is true at the government level. Our national debt is over $4.5 Trillion to outside countries/investors, and we owe another $5 Trillion to ourselves in future expenses that are coming, mostly in Social Security and Medicare. So that's almost $10Trillion in the hole. To put that in perspective:

-- The entire Gross Domestic Product of our country is around $15 Trillion. That's the value of all goods and services all of our citizens produce in a year. So if no American eats or buys anything and sends every penny of income to pay for Uncle Sam's debts staring January 1, 2009, we can finally pay things off and have our first meal nine months later.

-- There has never in American history been a period of such high government spending with such low tax revenues. The past several years are unprecedented. We've added another $500 billion to our debt each and every year for the past few years. The government's spending money it doesn't have. And how do they react? In February of this year they gave us all a big tax rebate and asked us to spend it to wake up the economy! They increased the deficit even further at the national level, and encouraged low savings at the personal level!

-- To cheer you up more, analysts estimate that the Iraq war is costing us almost $15 billion a month. 50 bucks per month per man, woman and child in the country, and it adds up pretty quick. In the end we'll probably have spent at least $3 trillion on the war.

The rule of the harvest says that at some point this will end, and it will be very, very painful. Eventually the balance will shift and we will be forced to reach equillibrium. It's called contraction, recession, even depression... whatever, our economic growth over the past decade has been largely illusional and driven by money we don't actually have. So we have to pay for today's growth with tomorrow's money. And with the news coming in lately, tomorrow might have arrived.

What's it mean in real terms? Our taxes will go up. Period. Doesn't matter which party wins the election, taxes have to go up, because we just can't cut a lot of the government expenses. Yes, I know the candidates talk about "pork barrel spending bills" and how they'll cut them, but the fact is that over 50% of federal spending is categorized as "mandatory", and that percentage continues to grow rapidly. In other words it's locked in and we can't touch it. Thirty years ago less than 30% of the federal budget was locked in. So we're more inflexible than ever. Think of Uncle Sam as a household -- his mortgage is getting bigger and bigger while his income is dropping. He can cut the kids' clothing expenses and maybe buy cheaper food, but the biggest expense, the house payment, is fixed.

So 53% of the budget is alreadly locked in. Oh yeah, and 9% this year went to pay interest on all that national debt I mentioned earlier. So less than 40% of our federal budget goes to all the "discretionary" activities. Things like education, transportation, the justice system, environmental research and veterans' benefits. Which ones do you want to cut? Now you see why the candidates keep dodging this question in the debates. The rule of the harvest. We bought things with money we didn't have, and now it's time to pay. With interest. It's going to hurt, but there's no sense complaining or finger-pointing. Let's just knuckle down and admit that it's going to hurt.

The economic crisis is not a surprise -- Henry Paulson (Treasury Secretary) said last week that the bailout plan is something they've been working on for months. I'm sure they were hoping for it to pop after the election, but not even they can control the market timing that well.

Which brings me back to the beginning, and the role of government intervention in the economy. I've been trained to believe that the market is smarter than the government, and I still believe it. So Mr. Paulson can keep his bailout plans -- I don't like them. If a business took on too much risk and might fail, let it fail. Let the price be paid by them, not the taxpayer. If there is value to be had in these banks on the brink, then a private buyer will show up. The market is smart. Warren Buffet just invested $5 billion in Goldman Sachs -- that's infinitely better than a government bailout. If a bank is in trouble but has inherent value, a buyer will show up and see the opportunity. If a bank is in trouble but has no inherent value, it needs to crash and burn. A government bailout is too expensive both monetarily ($700 billion?) and ethically (hey, go ahead and run a bad business and we'll step in to save you).

Rule of the harvest. If you didn't sow good seeds, then the reaping will suck. Sorry. No shortcuts.

How's that for a ramble?

In my next post I'll write about the true root of our economic problems. Hint: it's not the government. Or banks.