Thursday, July 28, 2005


In ages past, men had no qualms between drawing a clear line between "civilization" and "the wild". Civilization, be it a farming community, village, or town, as the source of safety and decency. The wild, be it a dark forest, or an unknown land filled with savages, as the source of danger and evil. When the West went out to colonize distant lands, or when the East went out to form their own colonies, the natives they encountered were considered somehow less than human, fit to be redeemed or treated as chattel.

Among the many foul consequences of this approach is the resuling backlash that has made "imperialism" such a dirty word. This post on the Belmont Club discusses how "failed states", once ignored on the geopolitical stage, now take front and center as they key source of danger.

But what is a "failed state"? How can one judge certain results as failures, and other successes? Poverty clearly cannot be the only, or even the dominant criteria for failure as poor India and China have clearly not failed while rich Saudi Arabia may have. There is no key distinction -- people can discuss "civic institutions" or "property rights" or whatever, but this may simply be because it is no longer acceptable to divide the world into citizens and barbarians. Look at the AK-47 toting warlords, based on kin and fealty, patrolling their territory and competing with similar groups/tribes for territory, looking to deities for guidance and protection, and tell me it does not remind you of hunter-gathering tribes.

Wednesday, July 27, 2005

Refugees, the Welfare State, and Terrorism

This disturbing article details how Muktar Said-Ibrahim and Yasin Hassan Omar, two men behind the second London public transport bombing, came to the UK as refugees feeling civil unrest in their home countries, and then lived on welfare payments.

Tuesday, July 26, 2005

Marginal Revolution goes to Dubai

I grew up in Dubai. When I was young, my brother and I read a Garfield cartoon where he tried to mail Nermal the kitten to Abu Dhabi. We thought this was really funny until we realized that Abu Dhabi, just up the road from Dubai, was a punchline because it was so obscure and Dubai was even more obscure than that -- too obscure to even be funny for being obscure.

Fast forward 20 years and Dubai is being written about on Marginal Revolution. Tyler asks if Dubai will ever become a major tourism destination. I say it already is.

Tuesday, July 19, 2005

CPI and Housing

The CPI, which measures inflation, looks at housing rental prices but not purchase prices. Since rental prices have remained flat to declining, but purchase prices have risen, you could argue that the CPI may be understating true inflation.

Macroblog (another Chicago GSBer) says that the CPI does not understate true inflation because
The CPI weighs housing on the basis of what the average person spends on housing (implicitly via opportunity cost) and not what a new, first-time homeowner spends. Again, if you are already a homeowner (without appealing to opportunity costs), you have NO cost-of-living rise as home prices rise. You bought your home before prices went up. (And remember, you have to be a first-time buyer, or the rising gains from selling your old home will largely offset the rising costs of the new one.)

Now, I don't know exactly what the proportion of the housing market these people represent, but I would bet they are quite small. So, by the approach implied by the blog, one would weigh the CPI housing MUCH smaller than the 23 percent of the basket it currently commands. In fact, I wouldn't be surprised if the downward revision to the CPI from the reduction in the component's weight had a much larger impact than the upward revision to the CPI from plugging in actual new home costs.
And besides, cost-of-living is a real cost and inflation is monetary (and therefore nominal) so CPI is not a great way to track it. This whole post is very good, and I recommend reading it through.

I would also add that there are two aspects to home ownership, consumption and investment. Consumption is the implicit rent, and investment is the expected appreciation on the underlying asset. A Consumer Price Index should absolutely look at the consumption portion and ignore the investment portion -- after all, was there general monetary inflation (ie. increase in nominal cash values) in the late 90s when the internet boom happened? If anything, the flow of money into stocks helped keep consumption costs down by offering consumers big discounts on anything that could be ordered online.

Similarly, just because housing prices have increased does not mean cost of living has increased, simply because rents (which is true consumption) have stayed flat. There is a housing bubble on, in that future price appreciation will almost certainly fall below current expectations, but this is not the same as saying there is inflation.

Monday, July 18, 2005

I cannot wait for this

Leavitt is looking at Poker! Joy! I'm not sure how much he has played, as some of this question sound a little naive.

How much more succesful can a player be if he knows the odds? Considerably. Especially when it comes to hole cards and pot odds.

What are the best betting strategies for getting the most money out of a winning hand? Wish I knew. Do you bet big to make a larger pot? Or do you slow play to keep people in? There is a lot of rock-paper-scissors and psychology here, I think. For example, at a low-stakes table in Vegas, people approach poker as if it was roulette. In these cases, feel free to bet freely.

Are there simple betting strategies that can be used to win money even with losing hands? I wish I knew.

To what extent does position from the button and position relative to other players matter? I thought it mattered a lot. It certainly strongly influences my play.

Does having a big stack of chips allow a player to bully others and win more of their money? Yes! But you don't win their money, you just steal their blinds.

Do people lose big after winning a big hand, or does success follow success? I don't know. I do know that having a big chip lead makes you both more agressive (which is good) but also more sloppy (which is bad).

How to make great BBQ at home

After spending one year in KC and getting absolutely hooked on BBQ, I have been dissappointed by New England's offerings. So now I make my own, and slowly I'm getting better. Here are some tips:

1) Get an upright electric H20 smoker. They cost $60 at Home Depot. Yes, I know these are not "authentic" compared to, say, offset charcoal-fired smoke pits, but they are so easy to use it ends up making the difference between making BBQ and not making BBQ. They are also *much* cheaper to operate as they run on handfuls of wood instead of pounds and pounds of charcoal.

2) Use *lump* hardwood instead of chips. Soak the lumps for 2 hours and then place them *on* the heating element itself. Next to the heating element is not good enough, it has to be sitting directly on it to produce the smoke levels you want.

3) Put your meat on the *top* most grill. The lower grill does not get enough smoke.

4) Pour a *small* quantity of hot water in the water bowl. You want the water to add moisture and convey heat to the meat for the first 75% of the cooking time, but after that you want a drier, smokier heat to produce a better crust. The small amount of water does its job and then evaporates away, meaning you don't need to mess with the smoker 75% of the way through.

5) Don't bother putting more exotic liquids in the water bowl. I don't think they do a damn thing.

6) If you are in a rush, smoke the meat for 2-3 hours, then wrap it in foil and put it in a 300 degree oven with a digital thermometer in it until it hits your required temp. Let it rest for ~20 minutes. It will taste good and smokey, but you will be done 5 hours earlier.


Sorry posting has been light, there have been some changes. I'm wrapping up at IBM this month and heading back to Creative Good. What can I say, they made me an offer I could not refuse.

Wednesday, July 06, 2005

Are we near full employment?

PGL asks whether or not we are currently at "full employment". If we are not, he continues, why is Greenspan raising rates?

This is a tricky question. The graph he shows which has employment from 1995-2005 is totally bogus. I was alive and concious in the mid to late 90s and I recall this thing called the "internet bubble". All kinds of people were in all kinds of jobs they really had no business being in. When the bubble popped they went back to grad school, or home to have families, or whatever, but their presence in the labor force was a temporary aberation that has since passed. So, using that period as some kind of benchmark is bogus.

On the other hand, wages have not risen in line with corporate profits, suggesting that jobs are scarce in the employment market, not workers.

At any rate, Greenspan is raising rates because there is a "liquidity glut" (whatever that means) which is manifesting itself as a real estate bubbble.

Great presentation

Sometimes, technical folks build *great* presentations (.pdf).

Tuesday, July 05, 2005

The future of applications

One of the things I like most about the new Google, you know, the Google that does mail, maps, etc. etc. as well as search, is that it's shown everyone what a web application can really be. I am continually astounded by the amount of latency-free performance Google routinely squeezes out of a browser. Very impressive indeed.

I am also very impressed by the web apps put out by 37signals. I look forward to their new "appless" app, Writeboard although I cannot guess what it will do -- maybe it's a wiki for the rest of us?

Finally, I am starting to play with some of the new desktop supported .Mac apps, like the new address book, published iCal etc. Sadly, it seems that among calender apps, only Now-Up-To-Date ties to-do's to days.