Worse yet, now I have to worry that, for the benefit of the world, Warren Buffett will send his goons to kill me. As long as I'm a dead man walking, I might as well make things worse before I go. Here now, more of my opinions about the economy.
I wonder what people mean when they say the economy will recover in 2010. The only way that can happen is if another irrational bubble forms thus creating an illusion of wealth similar to our previous illusions. If you take illusions out of the equation, there isn't anything to get "back" to. The wealth was never there in the first place.
I said before that I think we're on the cusp of a change as fundamental as the industrial revolution. But this time the change will be on the consumption side, not the production side. As a society we have dabbled with recycling and such, but it has always been fairly optional. There was no real penalty for waste.
The coming consumption revolution won't be strictly for the benefit of the environment. It will be an economic necessity, driven largely by the huge numbers of retired poor. There simply won't be enough stuff for everyone if waste is allowed.
The Internet will make this revolution possible. I've already written about the concept of ride sharing becoming widespread if the Internet and smart phones allow you to easily find rides going your way. That's just one example of how society could adapt to having less money without losing much in terms of happiness. Here's another example:
In California we're facing a severe budget deficit, and this will demand cuts in education among other things. I can imagine a future economy where everyone is home schooled over the Internet, and the average result is an improvement. With the Internet you could leverage the best teaching methods to the entire country. No one gets the bad teacher or the disruptive class. There are no bullies and no cliques.
Obviously you can see lots of problems with this approach. We assume that kids gain a lot from the social interaction of being in school. And of course personal attention from a teacher is important. But we have enough home schooled kids in the world to test that theory. My guess is that as long as home schooled kids have friends in the neighborhood, and siblings, they socialize just fine. The social skills can be learned on sports teams and at Girl Scouts. And I suspect a parent can give better personal attention than a teacher with 20 students.
Poor kids don't have computers and Internet connections. But subsidizing them would be far cheaper in taxes than sending them to school. And suddenly everyone would get the same quality of education.
I'm reading an excellent book called Outliers, by Malcolm Gladwell. One of the topics involves the huge academic disadvantage absorbed by kids who are the younger ones in a given class. Eleven months is a huge difference in maturity when you are in second grade. Home schoolers could start grades on their birthdays, and always be at the same maturity level as their peers. That change alone can buy you a big gain in average academic achievement.
Gladwell also discusses the disadvantage of having no school in the summer. It's a legacy of our farming past, with no current utility. Every summer the American kids lose ground to the Japanese kids who school year round. Home schooling would have no long breaks. Another problem solved.
This is the sort of change that could never happen if the economy was in a happy bubble and it seemed that money was abundant. But as the reality of our economic situation settles in, unthinkable options become thinkable. The good news is that the unthinkable options will have lots of advantages.
The other day I was at the Small Dog Park. It's a fenced area where dogs under 20 pounds can frolic with each other. I was chatting with a friend, whose dog is named Indy, about a movie I just watched involving a dog named Marley. After my friend left, I met a guy who has two Italian Greyhounds, coincidentally named Marley and Indy.
I don't know the odds of discussing two dogs named Marley and Indy, immediately followed by an unrelated discussion of two different dogs named Marley and Indy. I'm thinking it is in the smallish category.
Speaking of coincidences, I have started noticing that all movies are about me personally. For example, the Marley and Me movie is about a guy who writes humorous columns about his dog. My last blog post prior to watching the movie was a humorous piece about my own dog. (See below.) The writer in the movie worked in a cubicle at one point, and if you look closely at the comic hanging on his wall, it's Dilbert.
There's a bit of selection bias in this coincidence. I did know it was about a dog. But I wasn't aware it was about a writer who writes humorous bits about his dog. And I didn't expect to see one of my drawings in it.
Still, it seems that every time I watch a movie or a TV show lately there is at least one element that is yanked directly from my life. And I don't mean the obvious stuff such as "we are both humans." The connections are usually pretty obscure.
I have to remain true to my skeptical roots and explain these coincidences away with references to selective memory, and pointing out that it would be even stranger if there were no coincidences at all, given the richness of life's experiences. But it got me wondering if there is any way to design an experiment to test the theory that life is an illusion.
Obviously the illusion could be so well designed that all testing of it would be cleverly thwarted. So a negative result would mean nothing. But suppose this illusion was providing a fire hose of ongoing clues. What would those clues look like?
One possible clue is that your life might have what I will call a theme. For example, Steve Jobs' theme is that he can turn any business into a huge winner. You might call that skill, but he still had to be in exactly the right places at exactly the right times for his particular skill to be useful. I don't think he would have been much of a hunter/gatherer.
You probably know people who are the opposite of Steve Jobs, able to snatch defeat from the jaws of victory again and again, through no obvious fault of their own. It looks like extraordinary bad luck. That's a theme.
If your name is Kennedy, you might have good luck with love and money and power, but bad luck with transportation. Stay away from PT boats, convertibles in Dallas, cars in rivers, and small aircraft. That's a theme.
Some people are lucky in love, but unlucky in health. That's a theme. You get the picture. So ask yourself if your life would look entirely random from an objective viewpoint or is there a recurring theme. If you have a theme, you might be a product of design.
Another clue that life is an illusion is that perceived reality might have inexplicable dead ends or cracks. Consider the physics study of entanglement, where particles influence each other at any distance, which is seemingly impossible. Or consider that light is both a particle and a wave. Physics is full of examples where reality seems to have cracks and dead ends.
How would you test to see if life is an illusion?
Universe: I've decided to make you a billionaire.
Universe: But you will lose more than half of it in one year.
Soul: I guess that's still okay. That's still a lot of money.
Universe: And you'll probably go to jail for two years.
Soul: Dang. I knew there was a catch. Still, it's only two years.
Universe: Actually, that's not the catch.
Universe: Your name will be Anurag Dikshit.
Soul: Ha ha! Good one. Seriously, what will my name be?
Universe: We're done here, Dikshit.
This makes me wonder if there is an optimal food strategy for seduction. Apparently bringing a woman chocolate will only increase her glucose levels and with that her ability to resist you. In fact, a guy should want his woman to be good and hungry, preferably on a diet. It turns out that resisting one sort of temptation makes it harder to resist a different sort at the same time.
If that is not enough, I just did a Google search to confirm that alcohol lowers your glucose levels. That fits the theory. Everyone knows they have less will power after a few drinks.
Putting it all together, the best first date a guy could arrange would involve a woman who is on a diet to begin with. Eating is the first temptation she is trying to resist, making other temptations that much harder to resist. The date would start at around 5 pm when her glucose levels are starting to drop and the seducer should keep her hungry as long as possible. Add some alcohol to the mix and her glucose will drop further. Now add yet another temptation. I'm thinking a stroll through a high-end shopping center would work, as long as the woman believed it would be rude to actually purchase something while on a first date. She would be tempted to pop into the stores to take a better look, but she would resist.
And you thought science wasn't good for anything.
I also came across an application that allows you to use the Bluetooth feature of your phone to lock your computer when you (and your phone) walk away. I'm guessing you'll see more of this, maybe for your home and car.
I also heard about an application that lets you take a picture of any item with your iPhone and it finds an online shopping site that carries that exact item. Very cool. (Update: Here's the link: http://www.amazon.com/gp/feature.html?ie=UTF8&docId=1000291661)
These applications got me thinking what else is in the pipeline. I'll take a stab at a few predictions with full knowledge that you will provide links to people already working on these ideas.
WHATS-HIS-FACE: This application would let you discreetly take an iPhone photo of an acquaintance whose name you can't remember then it uses face recognition to search for the name online. Someday everyone will have a Facebook-like web page, so searching for faces will be feasible.
DOCTOR-IN-A-BOX: Someday you'll be able to take an iPhone picture of your suspicious moles, abrasions, fungus, or whatever and get an instant automated diagnosis and suggested treatment.
WHAT'S-IT-LIKE-THERE? Imagine wondering how long the line is to an event, or what a particular forest fire looks like, for example. You send a query through your iPhone for anyone who is in that area, according to GPS tracking, and ask for a look. A kind stranger takes your query, sets his phone to stream video, and gives you the view from his perspective. You would have eyes anywhere there are people.
BRAIN-EXTENDER: Google and Wikipedia are already brain extenders. You can find almost any information you want and quickly. But imagine how much cooler it would be if your iPhone headset was continuously monitoring your conversations and answering your questions as they arise, or whispering suggestions in your ear. That application seems likely to me.
Do you have any more futuristic iPhone predictions?
The list goes on, and that doesn't even include the many restrictions on underage activities. So there is nothing unusual or unprecedented about legal restrictions on freedom when an argument can be made that it protects lives or property.
My argument against allowing individuals to invest in stocks is that unless you have insider knowledge, which is already illegal, your odds of beating the index averages are slim. It is nothing more than gambling.
The myth of stock investing is that a person who does more research has better results. But there is no science to support that view. Indeed, the person who understands the most about individual stock investing avoids them completely and invests in ETFs or index funds.
The problem with doing your own research on stocks is that you must rely on the information coming from the management of a company, and managers are generally misinformed or lying. Even the most seasoned investment professionals running mutual funds perform worse than the indexes on average. Brains and research can't overcome the fact that much of your data is deliberately tainted at the source.
When people go to Vegas to gamble, they usually set some sort of limit for their losses. And they go with the full knowledge that winning is unlikely. It makes sense for that sort of activity to be legal, within limits, because it is viewed as entertainment and not investment. But if it were common for people to bet their retirement savings on Blackjack, you can be sure it would be illegal.
We don't allow unlicensed people to practice law or medicine, sell real estate, or even build a house. It is entirely consistent to restrict the untrained from making risky stock investments.
I reiterate that this runs against my own libertarian philosophy. I would feel I had lost something important if I couldn't invest in individual stocks. But it is also true that my net worth would be larger if I had never done it. And it would be larger still if I hadn't allowed professionals to do it on my behalf.
If anyone comments to this post by saying, "I do my own research and I made money in the stock market," it is proving my point. And if you don't see why that proves my point that further proves my point.