Paul Krugman Visits Google

Almost everyone knows about the best perk at Google: the excellent food in the corporate cafeterias. But the next best perk is much lesser known, which is the authors@google program, where intellectuals from Neil Gaiman, Malcolm Gladwell, Bill Easterley, and Michael Lewis come by, give a talk about their book, get questions tossed at them by Googlers, and generally provide an intellectually stimulating environment that rivals or exceeds those of a major research university.

For the last 3 years or so, I kept bugging Hal Varian to grab Paul Krugman for a talk. Now Hal is fond of telling me that whoever I ask him to bring would be a bad speaker (though invariably he's wrong --- apparently the mere act of having to give a talk at Google brings out the best in people), but in the case of Krugman, his most response was, "I've invited him several times but he's always turned us down."

So when Paul Krugman came by, I made it a point to get to his talk, get his latest book signed, and ask a couple of questions (off the air, so don't expect to see me on the video). Hal and Meng convinced Paul to give a technical, economics talk, mostly on the housing crisis and what happened there. If you've followed his columns and blog, or read the excellent blog written by Calculated Risk, then none of it will be new. Nevertheless, several snippets Krugman said caught my ear:

• I'm known as an international trade expert. But nowadays, when I visit conferences in other countries, people ask me "Why haven't you been writing about Brazil, or Latin America, or currency crisis." My response has been, "I'm trying to save my own damn Republic here."
• We now have fair trade with China. We give them dollars, and they give us poisoned toys and fish.
• I have varying degrees of indifference about the falling dollar. First of all, it can't cause a lot of inflation not just because in the grand scheme of things even the huge amount of trade can create at most one or two percent of additional inflation. There are a lot of studies that show that when the dollar drops, foreign countries reduce their margins rather than trying to reduce their market share, and that compensation effect can be as much as 40%. Basically, the prices are set by micro-economics, not macro-economics. Finally, because US corporations own so much foreign assets, when the dollar falls, their balances actually improve. Latin American countries like Argentina get in trouble when their currencies fall because their debt is denominated in dollars. Our debt is also denominated in dollars, but it's our currency, so what happens is we get debt deflation when the dollar drops.
• The Republican nominees all have to say that we're on the downward sloping side of the laffer curve, meaning that if we cut taxes, tax revenues will go up. This is unprecedented. If you look at the 2000 election, even the Bush campaign did not say that for fear of looking irresponsible.
• On the chances of a recession next year? I can definitively tell you that I don't know. I've been wrong on things before. For instance, the strength of the 2003-2005 recovery surprised me. And currently, the strength of consumer spending also surprises me. For some reason, nothing can stop the American consumer.
  

I asked my questions of him in a private session afterwards.
You've convinced me of Obama's incompetence on important issues. Are there any candidates you particularly like?
You will note that I didn't attack Obama until his campaign started bashing me. I did point out the flaws in his healthcare proposal from the very beginning, which is the free-rider problem when you do not have a mandate, which is other candidate's methods of making sure that you can't just not have health insurance,and then when you need it sign up for it because there's no penalty for not having insurance. That's what Obama's plan does. In any case, I can't provide endorsements, but my personal preferences are Edwards, Clinton, and then Obama, in that order. In any case, there's actually not that much difference between the three candidates, but what a lot of people don't get is that in this case, Obama is the establishment candidate --- compared to both Clinton and Edwards, he's has the least progressive agenda, because he's trying to be a uniter. Both Clinton and Edwards come out with good policy ideas, but Edwards comes out with them first, so I like him more.
What are the chances of getting universal healthcare after this election cycle?
If a Democrat wins the White House, and we have a Democratic congress, a little better than even odds. That's because all the candidates now at least have plans so they can hit the ground running. Clinton squandered a lot of time by waiting until he was in office before doing healthcare. Johnson signed his Medicaid bill 6 months after he entered office, because it was the first thing on his agenda.
In 2004 I asked Brad De Long about the election. He said well, if the Democrats win we'll have a competent government. If they lose, we'll all get rich by buying international stocks and emerging market stocks. As the last 4 years have shown, that turned out to be incredibly lucrative advice. Can you top that?
If Giuliani wins, you better stock up on canned food, guns and ammo. His campaign advisers are made up of people who were too hawkish for the Bush administration. Of all the Republican candidates, the most reasonable one is Mitt Romney, but I have a bias, because if he gets the Republican nomination, the Democrats have a better chance of winning.
Why do you think China is refusing to revalue their currency? It seems to be doing them a lot of damage, because of the amount of inflation it's generating in their economy.
Well, having worked in government I can tell you why. Things are going well right now. They've had that peg for years, and it works well, so there's no reason for them to change it unless things get intolerable. The last time something like this happened was when Germany allowed the Mark to float back in the 1970s. And for them an intolerable amount of inflation was 2 or 3 percent. But that was Germany, with its memory of the inflation of the 1920s. The Chinese have no such history and have much more tolerance for inflation than the mere 10% a year they are seeing.
There are many who think the CPI under states inflation. What do you think?
The CPI includes a basket of goods that include things like electronics which fall in price, whereas the prices that people remember are things like food prices. The cost of a Thanksgiving turkey is up 11% compared to last year, and that's what people remember.

I'll edit this post if I remember more, but nevertheless, I am very glad to have met the one guy who was willing to keep needling the Bush administration all throughout the last eight years, even at times when it must have been very hard to do so. He is as smart as his essays and columns make him look, and yes Hal, he was a great speaker.

Gtags 2.0 released

Thanks to the hard work of Nigel D'Souza, gtags 2.0 has gone open source! We've actually been using this version internally since April, but it had so many dependencies on internal infrastructure that it took a full work term to untangle it. There's yet more cool stuff coming. The gtags mixer (introduced in this release) has the ability to index the files on your disk, so it is possible (though I don't know if it is easy) to use this without having a gtags server at all, which should make some small project coders happy.

I use gtags every day myself, and Google's code base is big enough that it is essential for me. I hope others find it useful as well.

Review: Topeak Road Morph v2

The Topeak Road Morph series of pumps have been a mainstay of cycling gear for the last 4 years, replacing the Mt. Zefal HPX series that was my trusty pump before that. When my friend Lea showed up on her fancy new bike, though, I took a look at the pump and said, "Is that a Topeak Pump?" It turned out that she had by sheer timing, managed to buy one of the first copies of the new revision of the Topeak Road Morph pump.

Well, what are the changes, you might ask, that made me enthusiastically run out and buy one as soon as it showed up at my local store (without a discount, even?). The obvious one is that the new barrel is narrower. This means that each stroke pumps less volume, and requires less arm strength, a good thing for many cyclists, even though my brother's been putting me through a weight lifting regiment in the gym over the last year. The second obvious one is that it's about 30 grams lighter. In a world where road cyclists frequently pay a dollar per gram for weight reduction, the upgrade makes sense from a weight standpoint (though truly, the first improvement is in itself dramatic). But the last bit of improvement was non obvious --- there's extra space on the pump handle so you don't mash your fingers when you enthusiastically pump away. This bit of ergonomic improvement was a surprise and much welcome.

Altogether, a worthwhile upgrade. Recommended!

The Asus EEE PC

I'm not normally a gadget freak, and it takes quite a bit for me to get excited about a gadget, and even more, to get out my wallet and plonk down money to get one. But when I heard about the Asus EEE PC, I knew it was exactly what I wanted in a personal laptop. No hard drive (4GB flash drive), fast bootup time, Wifi capable, and cheap ($409 shipped).

I got mine today, and I am absolutely astounded by how tiny it is. You think the pictures do it justice, but they don't. The first time you see it, you think: this could fit in a purse! This is my attempt to show it in scale, next to a stuffed animal and a throw pillow. To my surprise, it handles WPA wireless encryption just fine!

The keyboard is the obvious question, but I'm currently typing on the EEE PC as I write, and I find the keyboard much less annoying than I thought. I wouldn't want to write for four or five hours at a time on this keyboard, but I'm very pleased with it. In fact, I find the touchpad more of a problem, and I am definitely way faster on the EEE PC than I am on my blackberry.

I'm picking up a Windows XP Pro license and I will install that. After that, with Picasa I will easily be able to photo-blog from the EEE PC.

Highly recommended!

Au Revoir, Mac OS X

18 months ago, I bought a MacMini. My travails were numerous, and occasionally, quite the bother. But I liked the Mac Desktop experience, and I liked the idea of running a UNIX-based OS underneath that glitzy UI.

But many things were wrong:

• My cheap $100 Panasonic KXP-7100 wouldn't work on it. The duplex feature of the printer was something Lisa loved, and though we swapped in a Brother printer, she screamed and screamed until I brought it back. This meant that I had to run VMWare to print anything.
  
• I discovered that Quicken on the Mac was unacceptably bad, so ran VMWare for that too.
  
• iPhoto was too slow for my tastes, so I ran VMWare for Picasa.
  
• Firefox kept crashing on Mac OS X, whereas on my work laptop running Windows XP, Firefox stayed up for days.
  
• I had to run VMWare to load my Garmin GPS up with maps.
  
• Similarly, my Logitech webcam wouldn't work with Mac OSX.
  
• Ditto, my blackberry.
  

So I was basically keeping Mac OS X around for the nice desktop experience and Firefox and iTunes. But the last straw came when I bought an Infrant RAID array. The Mac talked to it just fine, but for large files, it would randomly disconnect. Furthermore, while the Windows box had an option to automatically reconnect to my Infrant box on login or startup, Mac OS X had not such option. Yes, I could edit /etc/fstab, but that's ridiculous for an OS whose reputation was for ease of use.

So there I was in this parallel universe from the one Mac users seem to love and talk about. My Mac was having all sorts of random problems, but Lisa's Windows box (and my VMWare Windows XP install) was happily churning away, taking all sorts of abuse. My Mac felt slow, but Lisa's laptop was happy. She'd complain about slowness every time she had to use my Mac, but we had pretty much identical hardware. Ok, my Mac had 2GB of RAM.

So today, I wiped my hard drive and installed Windows XP Pro on my Mac Mini permanently. What a relief. Picasa is so fast! Firefox is so fast! So au revoir, Mac OS X. Hello again, Windows XP.

What this experience has taught me about myself:

• Others care a lot about coolness. I just want my computers to work with the hardware I buy. And price matters to me a lot. I'm not willing to buy a $600 printer just to get duplex when my $100 printer is working just fine.
  
• I'm just a contrarian by nature. When everyone else wanted SUVs, I wanted a Mini-Van. Now everyone wants a Mac, I like my Windows XP. My switch back to Windows probably means it's time to buy Apple stock.
  
• I can't imagine paying the premium for a Mac again. Next time, I'll build the machine myself or buy a beige box. I'm just not cool enough to own a cool computer like a Mac.
  

John Gruber on the Obama Health Plan

(Tip of the hat to Paul Krugman for pointing at this)

Relevant quotes:
She first points to the figure from the Insurance Research Council that states that 15% of drivers are uninsured. As detailed in research by J. Daniel Khazzom (paper available at here), this figure clearly overstates the rate of uninsured drivers by computing this rate as the share of accidents in which the driver did not have insurance. But since uninsured drivers are typically from groups that are more accident-prone, the share of accidents involving the uninsured will clearly overstate the share of drivers that are uninsured. Moreover, state reforms to improve compliance with auto insurance requirements have been very successful, with the rate of uninsured drivers (measured appropriately) in Georgia recently falling to 2%.

Mandates are clearly enforceable, and are necessary for universal healthcare to work. The Obama plan will not work. Obama is still better than a Republican, but at this point, he is the least good of the Democratic candidates, in my opinion, and is not living in the real world.

Changing my position on Obama

I was impressed by Obama on his visit to Google, but now that I've read Krugman's latest explanation of why Obama is weak, I have to say I am persuaded. Obama does not have the cojones or the intellectual horse power to figure out what's important in the economy.

My personal preference would be John Edwards, but Hilary Clinton will do as well. After all, the last time we had a Clinton in the white house it didn't suck too badly either.

Book Review: The Conscience of a Liberal

I am a big fan of Paul Krugman, and consider him the most honest and accurate thinkers of our day. Many have called him shrill and partisan, but his record is impeccable: he predicted the bankruptcy of Bush's ideas even during the 2000 elections, and correctly called Iraq a fiasco even when it was unpopular to do so. And those who think he is partisan forget his earlier books, such as Peddling Prosperity, where he attacked the Clinton administration for what we now see as laughable minor inconsistencies on trade policy.

The Conscience of a Liberal tells a story as compelling as any fiction. Once upon a time, there was an incredible inequality upon the land. The rich were getting richer, and the poor were truly miserable. Yet the nation could not move from that ideological driven fixed point --- policies and political machines disenfranchised poor voters, and the wealthy used their wealth to buy the media to call any kind of social insurance plan communist and persuade Americans that any change to the laissez -faire economy would create doom for everyone.

Then, a massive economic crisis happened, discrediting the wealthy plutocrats and some courageous politicians created what would become known later as the Great Compression. Social insurance plans allowed everyone to be assured that they would not die poor. Medicare ensured that the elderly would have health care. Politicians, aware that corruption could undermine this plan, made government so squeaky clean that not a single blot could be found in the implementation of both plans. To everyone's surprise, the resultant, more equal society ushered in an economic boom that would last more than 30 years.

But the forces of darkness were not vanquished --- they only retreated for a while, and by the 1970s, the civil rights movement created a gap that they learned to exploit to appropriate power for themselves. The result is growing inequality, a reduction of the middle class, and many of the ills you can find out for yourself if you bother reading the news. But such ill-gotten power can only be maintained by distracting the public with wars and with the coalition of racists and religious extremists that is the modern Republican party.

Ok, that's my summary of the economic history that Krugman supplies, only he tells it in a much less fanciful way, and the facts and figures that you would expect from an economist of his stature. Krugman's prediction is that the American public is finally waking up to the bankruptcy of Republican and libertarian ideas --- even if the internet and the youth seem particularly susceptible to libertarian theology (if Salon.com's interview with Ron Paul doesn't scare you, then you've already drunk the kool aid and are no longer a member of the reality-based community).

Krugman thinks that once the Democrats/progressive movement regains power, the most important item on the agenda is to fix the health-care system and provide universal health-care. Properly administered, this will increase the public's confidence in government (after the fiascos of the Bush administration), and much as social security and Medicare secured the terms of the new deal for a whole generation, this ought to enable public discussion on what kind of society we ought to have. His explanation of what the problems in providing universal health care is as good as anything I've read, and a good exposition for those who have not seen these arguments and economic analysis before.

Krugman at the end of book discusses what a progressive government can do about inequality. He points out that family status is now so important in America that a rich dumb kid is more likely to finish college than students who finish in the top 25% of their classes but whose parents are in the bottom 25% of the economic ladder --- economic mobility is now higher in Scandinavian countries than it is in the U.S. If the Democratic party had an institutional system of think-tanks and policy apparatus, this piece of data would be all over the news and be pounded into you 24/7, but that will wait for a happier time.

Krugman ends with a declaration of what being a liberal means and why he's proud of it. I am definitely very proud to be on the political side of people as smart and diverse as Paul Krugman or Brad Delong.

Is the future that Krugman envisions possible? The piece that gives me the most hope is on page 159 of this book: By 2004, however, 76 percent of Americans saw significant differenes between the parties, up from 46 percent in 1972. Obviously, we cannot take a Democratic victory for granted --- the right-wing and libertarians still have an unrelenting grip on the media --- Fox News, the New York Times, and even CNN still pander to the Republicans. But as more Americans realize that they've been hood-winked by the Right, I have hope that even Fox News cannot fool all of the people all of the time.

This is an incredibly good book, well worth the time reading. I borrowed the library's copy but I think I should buy a copy for myself, to support Professor Krugman if nothing else. Highly recommended, and well worth buying at full price.

Book Review: One Economics, Many Recipes

To be honest, I do not feel qualified to review One Economics, Many Recipes. It's written by Harvard Economist and blogger Dani Rodrik as a technical manuscript on globalization and economic growth --- apparently it was a collection of papers that have already been published, but properly organized into a theme with a logical progression.

Rodrik addresses many questions in this book:

• Is there anything in common between the successful developing countries of the past 30 years?
  
• Is the Washington Consensus legitimately useful for developing countries to follow?
  
• Why was China's drive into a market/capitalistic economy successful, while Russia's was a disaster?
  
• Can Economists provide meaningful prescriptions for developing countries?
  

These are very important questions, as the last decades have found the Asian economies growing by such large amounts that millions were lifted out of poverty, while African and Latin American countries seem to fall further and further behind.

The book begins with a bang, first demolishing the free-market ideology so often propounded by the proponents of the Washington consensus:
When Taiwan and South Korea decided to reform their trade regimes to reduce antiexport bias, they did so not via import liberalization (which would have been a Western economist's advice) but through selective subsidization of exports. When Singapore decided to make itself more attractive to foreign investment, it did so not by reducing state intervention but by greatly expanding public investment in the economy and through generous tax incentives.

This is important, because many market ideologues (The Economist being but one) frequently posit that the Asian economies grew not because of their industrial policies but despite them. Rodrik does a great job countering all those arguments, the best of which is a chart showing that the countries that did everything that the Washington Consensus prescribed did much worse at growing their economies than countries that attacked growth from a systematic fashion.

Rodrik then begins to provide tools for economists to analyze developing countries. The most important prescription would seem to be obvious: it is most important to remove immediate constraints to growth. For instance, Brazil and El Salvador took wholesale reforms of their economies, yet grew more slowly than the US because Brazil was savings-starved while El Salvador's problem was low returns to capital. Yet the Washington consensus prescribed the same treatment for both economies, neither of which responded.

By contrast, China's major constraint in 1978 was the lack of market incentives in agriculture. The naive Washington consensus view would have been for China to switch wholesale to the capitalistic system with land ownership. But Russia showed that that route is fraught with danger --- government insiders or powerful outside interests could easily outbid ordinary farmers and citizens, thus resulting in an unequal society that would demoralize and discredit the market based system. Instead, what China did was far more clever: they grafted a market system on top of the existing state-ordered system, allowing households who produced surplus goods to sell into the free market. This granted market-type incentives without disrupting the existing system, while slowly easing the entire country into markets.

The book is full of such examples that are both convincing and properly cited and researched. There are quite a number of equations and other mathematical constructs as well, so those who wish to dig deep in can do so. Rodrik does not pretend that the fast growing Asian economies are free of problems --- he acknowledges, for instance, that many such countries will eventually run into the constraints of their economic infrastructure and will hit a brick wall for growth if they do not keep their institutions and economic structures improving at the same pace as their economies. However, for most developing countries the first order problem of getting that growth in the first place is by far the harder problem, and Rodrik provides the tools for analyzing them, even if in many cases, it appears that the creativity involved in designing alternative institutions to the obvious free market approach has to be done by someone really much smarter and with more stake in the outcome than the average Western economist.

The second part of the book analyzes various industrial policies and institutions required for growth. One of the most important points Rodrik raises is that in many developing countries, entrepreneurship has positive externalities that are not captured by first movers. This justifies strategic government intervention in encouraging such entrepreneurship, and he provides examples as to how to do so. He does admit that government corruption and the natural incentives of a government can lead to an inability to sunset those incentives and benefits to failing businesses, but he points out that the Asian countries have successfully done industrial policies for the last 30 years, and that the ability to acquire such expertise is not restricted to Asia.

The last part of the book extends these concepts to the entire global economy, not just developing nations. What kinds of trade regimes are acceptable? Rodrik feels that the existing trade structures do not allow for national institutions or standards to stick, thereby eroding the global trade system's legitimacy. In particular, Rodrik advocates that nondemocratic countries should not be able to count on the same trade privileges as democratic ones:
Think of labor and environmental standards, for example. Poor countries argue that they cannot afford to have the same stringent standards in these areas as the advanced countries... Democratic countries such as India and Brazil can legitimately argue that their practices are consistent with the wishes of their own citizens, and that therefore it is inappropriate for labor groups or NGOs in advacned countries to tell them what standard they should have... But non-democratic countries such as China, do not pass the same prima facie test. The assertion that labor rights and the environment are trampled for the benefit of commercial advantage cannot be as easily dismissed in those countries. Consequently, exports of nondemocratic countries deserve greater scrutiny when they entail costly dislocations or adverse distributional consequences in importing questions.

In other words, the way we've conducted trade has not been fair to either the poorest of our citizens nor to the citizens of undemocratic countries that may have gotten screwed because of the almighty dollar.

I hope this review has given you an idea of what an impressively good book this is. I could probably read this book 3 times over and get even more ideas and impressively researched examples, but to do so would be to rob you of the pleasure of reading this book for yourself to get an understanding of what a really good Economist thinks about, and how the libertarians and free market-ideologues really don't have any real answers for the developing world. I paid Amazon.com price for this book because I couldn't find it in the local library, and it is worth every penny.

Highly recommended.

Book Review: iWoz

iWoz is Steve Wozniak's memoir, written with Gina Smith. One of the two co-founders at Apple, it is hard to understand what a pure engineer this man was and is without reading this book.

The book itself is well-written, with a light-weight reading style that's clearly designed to make non-technical readers comfortable. (Ironically, I wish he had chosen to keep the technical parts more technical because it would have made those sections of the book easier for me to read)

The early part of the book is easy reading, about Wozniak's early days in school, and how he met Steve Jobs and Captain Crunch and got into making Blue Boxes. His light-heartedness and spirited playfulness comes through in his pranks, and the man has not a single bit of malice at all in his body, not even when Steve Jobs screwed him over:
The whole thing used forty-five chips, and Steve paid me half the seven hundred bucks he said they paid him for it. (They were paying us based on how few chips I could do it in.) Later I found out he got paid a bit more for it --- like a few thousand dollars --- than he said at the time...

The important part of the book, about the Apple and the Apple II are very much worth reading. He really sets the record straight (e.g., he was the sole designer of the Apple and the Apple II, rather than it being a collaboration between him and Jobs). He also designed Apple's floppy drive in 2 weeks, and that included writing all the firmware for it. Make no mistake, this man was an engineer's engineer: he could design, prototype, solder, and then write the BASIC interpreter for one of the first personal computers, and still have time left over for a prank that no one could pin on him at a trade show.

Yet this man was more unworldly than a monk:
...this idea popped into my mind about two guys who die on the same day. One guy is really successful, and he's spending all his time running companies, managing them, making sure they are profitable, and making sales goals all the time. And the other guy, all he does is lounge around, doesn't have much money, really likes to tell jokes and follow gadgets and technology and other things he finds interesting in the world, and he just spends his life laughing...
Wozniak leaves you no doubt in your mind as to which person he is.

Yet a hundred pages down the road, you find the limitations of this mind-set:
During the time the Apple III was being developed, he thought we'd grown a bit too large. There were good engineers, sure, but there were a lot of lousy engineers floating around. That happens in any big company.
I can't imagine a single startup founder today taking that attitude. Not after Larry Page and Sergey Brin have shown that even at an incredible size, employee hiring is still something that you must spend time doing and worrying about, and that it is possible to keep standards incredibly high despite becoming very big. Today, Apple has a reputation for being an incredibly frustrating place for engineers to work at (even my friend the iPhone touch screen custom chip designer will admit that). But it does not have to be that way, and to a large extent, I think the fact that the engineering co-founder did not take an active management role has a lot to do with it. (An interesting note: Wayne Rosing, Google's first Senior VP of Engineering has a cameo role in the book as Wozniak's bosses boss. Rosing was instrumental in setting up Google's engineering culture, and is easily one of the smartest engineering managers I've ever had the pleasure of working with/under.)

The book ends with a chapter of Wozniak's advice to engineers. It is excellent advice. For instance:
If you're that rare engineer who's an inventor and also an artist, I'm going to give you some advice that might be hard to take. That advice is:Work alone.

There it is from the horse's mouth. Do not believe all those journalists who tell you that in this modern age, you need to work with lots of people to do anything significant. All good software is designed by one person working by himself. That is as true now as it was when Wozniak wrote Apple Integer BASIC.

When Wozniak visited Google, I got to ask him if he had any regrets about Apple. He gave me the ultimate engineer's answer: I wish we'd sprung for a better keyboard on the Apple II. A great guy, and this book's a great read. Highly recommended.

My Culinary Internship

Culinary Internship

One of the perks at Google is that if you like the food enough (and trust me, you will!), you can volunteer for a Culinary Internship at one of the cafes. (Yes, you get to choose which one) I've been a big fan of Jeff Freburg's Cafe-5IVE for as long as it's been open, so when the time came, I chose that Cafe.

Being a kitchen newbie, I only had to work half a shift. So I reported to Jeff at 8:30, and after we discussed what was going on, I was assigned to help Kristen with the pastries. Under Kristen's direction, I zested some lemons, then mixed huckleberry, lemon juice, and agave to make huckleberry sauce for the souffle. I then put the sauce on the souffles and racked it in preparation for lunch. I then helped put together the soup for the pineapple dessert cups, scooped ice cream, and loaded the cookie jars (a dream job, if you ask me!).

After that, I got reassigned to the hot line, and helped make some vegan cheese, started heating some cream for tomorrow's macaroni and cheese, and generally got in the way while Fish and Chips were being fried. Then I stood behind the soup station and served visitors for an hour before the rest of my group caught up with me and I took lunch with them.

This was definitely a highlight of my career at Google. I really got to appreciate how hard the kitchen staff worked --- I didn't get to sit down from 8:30 to 12:30, and I was amazed by how hot the kitchen got, and how much got done in so little time. Yet the staff stayed calm, as though they did it every day --- which of course they did! And the equipment. Sure, million dollar data centers are cool, but $100k ovens have an immediate, direct, visceral feel to them that just yell "COOL!"

And of course, nothing beat the satisfaction of having Chef Freburg come to me afterwards and invite me back to the kitchen any time. I'll definitely take him up on it!

Review: The Trouble with Islam Today

I met Irshard Manji when she visited Google to give a talk. She seemed to be a very brave woman with a major goal, which is to bring about a Reformation, as it were, to modern Islam. As others have pointed out, the kind of reformation that she espouses is a requirement before the many Islamic cultures in the middle east can begin to consider having a successful economy or development beyond what has turned out to be The Curse of Oil in the recent century.

Manji points out that there was a period of time in the Islamic empire when open discussion and questioning of tradition was welcome --- during which ijtihad flourished. The period was relatively short (about 500 years or so) before the Islamic empire collapsed and Islam (or perhaps just the middle-eastern variant) retreated back towards tribal traditions and the desert.

She further points out that both the United States and Israel, whom many Arabic Muslims blame for their humiliation, both tolerate and support dissent within their countries --- it is the Arabic countries that do not have a free press. All through the book, her pleas are impassioned (especially her complaint about Foundamentalism, the Arabic view of Islam being held supreme over other views), and her history well-researched. In person, I asked her why she thought fundamentalism had become more popular throughout the world, not just in troubled countries. Her response was a very straightforward, "Globalism. When the world becomes smaller, you lose what you think you used to have, and you try very hard to cling to traditions which you think you might be losing." I would have appreciated further development of that theme, but did not find that in this book.

All in all, I'm convinced that a Reformation of some kind is necessary before the middle east can make progress. I am not sure what form it will take, however, and perhaps a little disappointed that Manji ultimately veers away what I consider would be the ultimate destination of her religious exploration, which is secular humanism, a philosophy that is more fruitful and less condemning of human reason than even a reformed Islam would be. But ultimately, that is a religious choice, and as it is, I would not want to condemn her for standing out there in the face of death-threats --- in her position I would probably not be as brave!

Review: Schulz and Peanuts

I will confess to being a far bigger fan of Bill Waterson than I am of Charles Schulz, but any understanding of comic strip history will have most understand that without Peanuts, there would have been no Calvin and Hobbes.

With as beloved a subject as the creator of Snoopy, I expected the book to be a love-fest, about the genius of Charles Schulz, at it were. Nothing could have been further than the truth. If indeed David Michaelis the author were a big fan of Peanuts, he understood that the hero, the creator of Peanuts himself had "feet of clay." Schulz grew up the only child of an under-educated couple: neither parents graduated High School, and his mother did not finish fourth grade. His father, a fastidious barber who always put his customers first, was interested in neither the news nor philosophy, admonished that a barber should never descend into heavy talk with his customer. Schulz's childhood, where both parents did not appear to believe that he would succeed in making a career out of his drawing appear to have left an indelible impression of the young Schulz.

His mother died just as he was drafted into World War II, saying with her last words to him as he were to leave, "Good-bye, Sparky. We'll probably never see each other again." As if to make up for this lack of confidence from his parents, the world turned in his favor --- he did well in the military, and he was by chance was held back enough to arrive in Germany only after the worst of the war was over, fired on only a few times by the enemy.

After the war, Schulz went right back to art, and by the end of 1950 had sold what was to become Peanuts to United Features Syndicate. The book, however, glosses over his success there, and focuses on what Schulz considers his failures --- chiefest of which seems to be his inability to attract women. He pursues one after the other, but gets repeatedly spurned over what he believed to be his mediocre looks (which apparently wasn't true) or his lack of prospects (which made him vow that he'd show them what he was made of). He thus approached the rest of his life with a big chip on his shoulder.

He did eventually get married, of course, to a beautiful divorcee who gave him 4 more children. But the marriage was by many accounts an unhappy one --- Joyce Schulz with her sharp wit would take down Charles Schulz as often as she could, despite his being the material provider of exceptional capability. Michaelis would illustrate this with strip after strip from Peanuts, with Joyce obviously being the Lucy who would continually taunt and hurt Charlie Brown. In his own response, Schulz would retreat back into his world of drawing comics (which Joyce never bothered reading), much as Schroeder ignored Lucy to play with his child's piano.

Another interesting topic for me was how autobiographical Peanuts was. Schulz's thoughts, relationships, history with his family, and philosophy would all show up on it. Michaelis cleverly even shows how his love affairs made their way to the strips.

As Schulz got more and more successful, one would think that he would find his way to happiness. Well, let this be a warning to those who seek happiness through wealth: Schulz never did find it through wealth. Not even when he finally tried to leave Joyce to woo a much younger lady friend did it help him:
Just then, a towering sailboat drew up alongside, and her heart froze, because she could see in his eyes that the yacht embodied a new way to break open their stalemate. "If you married me," he said, "you could have anything you want. I make four thousand dollars a day."
The lady, of course, refused, despite Schulz's desperation.

What about religion? Schulz was an extremely religious man, having converted in his early 20s and tithing 10% of his income well into his adulthood. It was clear on reading the book that while he held on to his Christianity, the religion never did bring that much meaning to his life either. Perhaps if your entire tenet in life is that nobody could love you because you're a nobody, it's hard for you to believe that even God could do so.

But his work saved him right? Yet it appalled me to see him use his status as a mentor to attempt to influence Lynn Johnson when she needed a way to kill the aging family dog, Farley, in her strip (unlike Schulz's strip, Johnson's strip actually moved forward and aged her characters):
...when she was finished explaining how Farley was going to die trying to save the Pattersons' youngest daughter, April, from drowning in a spring-freshened river, there was silence on the phone, and then Schulz said: "If you do this story, I am going to have Snoopy get hit by a truck and go to the hospital, and everybody will worry about Snoopy, and nobody's going to read your stupid story." As if to prove that Snoopy was still the biggest newsmaker, he added, "And I'll get more publicity than you will! So there!"

Ultimately, Schulz life becomes very much like that of his favorite movie, Citizen Kane: he did not have to be alone, but he made himself alone anyway, and all because he refused to acknowledge that others might love him, so despite all the profession of love from others (his wife and his children) he never needed to reciprocate and make himself vulnerable.

This book is clearly a masterpiece. The strips chosen to illustrate Michaelis' points were well-selected (there are a couple of repeats, but those were infrequent), the notes and bibliography excellent, and points come across clearly but are not hammered home as if the reader had no mind. All in all, this book is a great lesson on the limits of wealth, talent, hard work, and religion. More people should read this book. Highly recommended.

My thanksgiving present

I felt a little funny on Sunday morning right after posting my last entry. I went for a hike anyway, but found my energy low. That afternoon, I took a nap, but started feeling really cold. Come Monday morning I woke up drenched in sweat. A temperature check found my temperature near 100, not yet a fever, but my throat felt a little itchy.

I went to see my doctor, and he thought it was viral. So he gave me some TamiFlu in the hopes that it would nix it in the bud. That night, I went in and out of shiver mode all night. I went back to see my doctor again, and he found what seemed to be an infection in my ear and throat, so now he added antibiotics to the mix. Lisa added a bunch of Chinese herbs and some acupuncture to this medical cocktail, just to make sure I got due representation from all sides of the East/West debate.

Last night was the worst. I had periods of 103 temperature, but I got myself fully hydrated and woke up only a few times. Still, I was so light headed I would just topple back to bed after using the bathroom.

This morning though, my fever appeared to break and I felt better, though I still can't seem to eat much and my throat now hurts more (or maybe it's that I now notice it more!). So hopefully all this medical stuff I'm on kicks in soon.

You might think that 'flu is not a serious illness, but I've been sick with 'flu a few times in my life, and it always felt really really bad. It's not hard to believe that it causes 1.2% of total deaths in my age group. And yes, we did get 'flu shots this year. All I can say is, medical science just can't progress fast enough. I'd take immunity to all diseases over a faster car (ok, maybe for me that'll be a lighter bike), movie star good looks, or a trip to outer space any day!

Ok, I will now return you to the regularly scheduled book reviews and commentary.

Review: Bicycling and The Law

Bob Mionske is a cycling lawyer, and writes the Legally Speaking column for VeloNews.

In addition to being a collection of all the columns in the magazine, this book collects many additional tit-bits about cycling that you might not have known before.

For instance:

• If I were to put together a bike ride to the coast with a bunch of friends, am I liable if anyone was injured?
  
• Supposed my bike was stolen and then found in a pawn shop. Am I legally obligated to pay the pawn shop for my bike?
  
• If I get pulled over by a cop for riding on the road too slowly, can I fight the ticket?
  
• Am I obligated to wear brightly colored clothing on my bike? If I'm not and am involved in a crash, what happens to me legally?

This book answers all these questions in eight parts. First, Mionske introduces you to your rights as a cyclists, then he explains what the legal definitions of duties and rights are. He then covers cycling accidents and hazards. This is the biggest portion of the book, and he breaks it down with an analysis of all car-bike collisions, what you can do about preventing them, and how cycling infrastructure may or may not lead to such crashes. The analysis is detailed, for instance, telling you that 1.3% of all car-bike collisions are caused by the motorist overtaking the cyclist, and that 11% of the motorists involved had elevated blood alcohol levels (unfortunately, 17% of cyclists involved also had elevated blood alcohol levels). As a league cycling instructor (LCI#1040), I have seen the data presented before, but the level of detail is excellent, and Mionske's legal perspectives are very welcome. I will try to integrate this information into my Road 1 class the next time I teach it.

Following those last two chapters, Mionske covers insurance and how much you need (most people are under insured, which means that your insurance might be forced to pick up the slack, so you should at least be adequately insured). He rails (rightly so) against the insurance industry for only offering automobile-oriented insurance, and not insurance that covers cyclists specifically. He then goes on to discuss forms of harassment to cyclists (a surprising amount of it done by law enforcement officers, in his experience), what cyclists can do about it (it turns out that lobbying and publicly embarrassing those involved is surprisingly effective). The last three chapters cover bicycle theft, defective products, and liability waivers.

All through the book, Mionske does not hide his biases --- he believes cyclists are blatantly discriminated against (something that most cyclists will agree with), and that the legal system can be an effective recourse, though getting law enforcement officers, courts, and juries to work effectively for a discriminated-against minority would seem to be a big challenge. He writes very effectively in his advocacy of these positions, and to my mind, I think he has succeeded. He's even convinced me that tort-reform is something extremely anti-consumer, which given the prevailing opinion of lawyers that most people have, is no mean feat.

The entire book is written in a clear, precise, and easy to comprehend fashion. At no point does Mionske descend into legalese without providing you with the context and an explanation of what is going on. The case studies in particular are fantastic. Some of them are funny, some of them are sad, but all of them are instructive. Where the law has been undefined, Mionske doesn't hesitate to say so, and one gets the impression that he would relish an opportunity to test those areas, if an appropriate case ever turned up.

I paid Amazon.com prices for this book, but now that I've read it, I would have willingly paid full price. This is a book that should be on every cyclist's bookshelf. Read it once to get an idea of what is covered, and keep it easily accessible as a reference. Highly recommended!

Obama Visits Google

I got a chance to see senator Obama first hand today when he visited Google to give a speech and take questions from Eric Schmidt and other Googlers. My current approach to politics is anybody but a Republican. Both the Republican front-runners are extremely distasteful to me --- both seem to promise more tax cuts for the already wealthy, are in denial about global warming, and have no concern for budget deficits or getting out of the morass that is Iraq.

My concern with Obama was borne from reading Paul Krugman's blog entry. The concern there was that Obama had bought into the right-wing attacks on social security as the biggest fiscal problem facing the country. The truth is that it is not. Medicare/Medicaid is. My concern was alleviated slightly today, when asked about the deficit, Obama said that he would first get out of Iraq (saving $192 billion), and then try to attack the next biggest deficit problem, which was Medicare/Medicaid. Social Security was not mentioned.

Compared with the other big candidate I saw in person, Hilary Clinton, Obama seemed a lot less like a politician, lot more earnest. I liked it that he said that what he learned from watching prior Democratic candidates lose was that if you don't stand for something people won't vote for you. Listening to Clinton talk, one just got the impression that she had spent too much time as a politician --- she refused to promise anything, and refused to make a stand on policies.

All in all, I could definitely see this man as the next President.

Review: Argonautika

Lisa and I visited the Berkeley Rep on Saturday to see Mary Zimmerman's Argonautika. The story is the well-trod story of Jason and the Argonauts.

Since the play was only two and a half hour long (with a fifteen minute intermission), the story had to move fast. Narration is performed by the two goddesses involved in the story: Hera and Athena. Special effects abound. Actors descend from the ceiling suspended by wires, the trapdoor under the stage is used to good effect, and the stage itself was extremely well constructed.

I love how miniatures are used on stage to depict the larger picture, while the action on the stage shows a close up of what's going on. The cast seemed well rehearsed, though one still catches a flub or two here and there. A lot of the motion on stage seemed particularly strenuous, with rope climbing and flipping off the raised platform being quite common.

What amazed me was how well the action scenes were handled. In particular, when King Amycus challenges the heroes to a boxing match and Pollux accepts, the actors move in a simulated slow motion fashion which was just absolutely hilarious. Clearly, this is not a play an audience would be able to watch without the context and prevalence of modern action films.

The scenes that were made a big deal out of in the liner notes, the ones where Medea betrays her family for Jason because the gods made her fall in love, however, seem just a bit contrived. However, that does not detract from the overall quality of the play.

All in all, we definitely got our money's worth, and it was great fun for two hours. Recommended.

Review: The Age of Turbulence

Alan Greenspan is perhaps the last of a dying breed, the reality-based Republican. As chairman of the Federal Reserve, he presided over the Clinton boom. As part of the Reagan administration, he was responsible for raising payroll taxes (yes, an extremely regressive tax) to "save social security".

The first part of this book is largely autobiographical, describing his childhood, his interest in economics, and eventually his appointment as a technical economist in the Ford, Reagan, and Bush administrations. The most entrancing portions of this books are the descriptions of his time as chairman of the Federal Reserve. Obviously, he had access to data and analysis that nobody else had, but nevertheless, had to rely very much on his instinct in guiding the world's largest economy. It was amazing how often he got it right.

Of course, he gets it wrong as well, mostly on the political side. His excuse for giving Congress and the Bush administration permission to grant giant tax cuts and destroy the hard fought surplus built up over the 1990s was that he gave a nuanced policy recommendation to an extremely partisan congress that was determined to misread him. While Brad DeLong might be willing to forgive him that, I doubt that future historians will be so kind.

The second half of the book focuses on topics near and dear to Greenspan: what the causes of economic growth are (where he is surprisingly close to Bernstein's The Birth of Plenty at least, with respect to the rule of law and property protection), a tour of the world's economic geography and what the problems each area has, globalization, retirement, corporate governance, and the shortage of oil.

As a reality-based person, I think he is very good and correct in his analysis. He is definitely gloomy about the prospect of the human race being able to contain global warming, and seems to have resigned himself to mitigation based solutions rather than prevention --- given that he is already in his 70s, that is perhaps a suitable view to take. Those of us who are younger might not wish to be so sanguine.

All in all, I learnt quite a bit from this book --- from how the federal reserve works to what the explanation is behind the current high oil prices. I disagree with many of his views (e.g., his solution for "saving social security" involves increasing an already highly regressive tax, rather than expanding the tax to all incomes; his observations of the medicare problem conveniently leaves out how inefficient our medical system is, because it is one of the few failures of capitalism that have been analyzed to death)

A challenging book, but worth the time.

You cannot outsource financial work part II

A few days ago, I was talking to someone at work, and he said, "I'm going to have to fire my financial adviser. I started working with them 3 months ago, and they're providing negative returns."

There are a few issues with this statement. First of all, financial planning is a multi-decade process. Judging the results of an adviser after 3 months is a lot like judging the results of a marathon after the first 300 meters. Secondly, it is very important not to confuse process with outcome. The decisions and the reasons behind the decisions are more important than the immediate outcome. Let's say you decided, based on your analysis of certain macro-economic factors, that an unusually large bet on say, Vanguard Energy Fund was desirable. If someone suddenly invented a cold fusion reactor the size of a car's engine thereby eliminating the need for gasoline, the result would be bad for your portfolio, but there was no way to have anticipated that outcome without knowing the future.

Finally, it is very easy to get carried away with making short term decisions. For instance, in one of his rare errors, the man behind pfblog writes about switching away from Vanguard's Value Fund to the Fidelity Contra Fund because of the poor recent performance of the former. The two funds are so different that he was comparing apples with oranges! The ContraFund is at its heart a Growth fund, and this has been a great year for Growth. Value funds have recently taken a hit over the last few months. When Bill Bernstein made that observation, he followed up with a comment: "this reflects the additional risk of the value strategy. And that's a good thing, because if there was no risk, there would be no reward."

That is why you won't get me posting my portfolio performance numbers here on this blog (and wouldn't you like to know!). Even a five year performance number wouldn't be really representative, since we've been fortunate this last five years to have a great bull market. As the old saying goes, "When the tide goes out, that's when you find out who's been swimming without shorts."

Despite my statements about how you cannot outsource financial work, some people keep insisting on asking me for recommendations on financial advisers. When they do that, I point them at the Vanguard Financial Advisers page. These are the only guys I've talked to who don't come across as sleaze balls. They're conservative (which is a good thing --- you want your financial adviser to be more conservative than you are), and they know what they are doing. That said, in the middle of my interview with one of them about 3 years ago I realized that I knew more than the guy who was talking to, and that was that.

There is one guy I am using to get access to DFA funds. But we don't have an advisory relationship. He does seem like quite a reasonable fellow, but you won't get me recommending people unless I've interviewed them extensively, and so far, no one who's asked me for a recommendation for a financial adviser has been willing to pay my hourly rate to interview someone extensively enough for me to provide an evaluation.

Warren Buffett Interview

I love it. He challenges anyone in the Forbes 400 to see if they pay higher taxes than their receptionist (I bet there'll be an exception, but that's because maybe one of them married their receptionist, *smirk*)

I will admit that I pay federal taxes at a very similar rate to Warren Buffet. (See my prior posts on Tax Planning) And yes, I actively vote Democratic, against my own economic self-interest. Why? Because in the long run, a society where people can get ahead by working hard will generate more prosperity than a society where the rich get richer and everyone else gets screwed. And we are unfortunately headed in the direction of the latter.

There are plenty of countries with such severe inequalities that kidnappings of the wealthy (or murder, etc) are common in the news. I would not wish the US to become one of them.