I was reading the Freakonomics blog on the New York Times, which asked for a predictions: “How bad will the 2008 recession be?”. The measure uses a scale of 1-10, with the 2001 recession as a 4 and the Great Depression as an 8. Here’s my reply:

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I’m more of a betting man than an informed authority, so I’ll go “all in” and say 8-10. But that’s just a sort of Richter scale magnitude of economic changes: I don’t think what we’re about to see will look anything like the Great Depression.

The key is international economics. Foreign investment in the U.S., and in U.S. dollars, is increasingly looking like a house of cards. A bunch of things are happening all at once:

• China’s domestic consumer market is growing fast enough that soon they won’t need to rely on US consumers, at which point keeping their currency cheap compared to the dollar will be unnecessary and counterproductive.
• The Euro is becoming a viable alternative to the dollar as a global currency.
• Unprecedented US deficit spending, and rock-bottom Fed interest rates, are tending to devalue the dollar. The only thing holding it up is massive investment in dollars by foreign investors.
• The war in Iraq has caused foreign trust and confidence in the U.S. to reach an all-time low.

So here’s my prediction. The “housing bust recession” is small — call it 3-4 on your scale — but it causes foreign investors to decide divest their dollars and dollar-valued assets. A classic “bank run” panic begins, everyone sells their dollars, and the dollar drops into the toilet.

The rest of the world begins to rely on the Euro as a stable currency. Foreign manufacturers can no longer sell their goods in the U.S., but they switch over to selling to the burgeoning Asian consumer market, and life outside the U.S. goes on.

The U.S. experiences massive inflation, as foreign goods become priced out of reach. But exports become extremely profitable. The value of goods relative to services increases, and the U.S. makes a gradual transition back to an industrial / agricultural economy. Farms, mines, and manufacturing plants reopen after decades of stagnation, while shopping malls shrivel and die.

Is this a bad thing? In the short term, definitely. But the fundamental problem with the U.S. economy is its massive amounts of government and consumer debt, and an economy focused on selling things rather than making them. A period of heavy inflation and currency revaluation will render those debts negligible, and revamp our balance of trade.

Oh my god, it’s been six months since I posted here.

There’s a post at the New York Times’ Freakonomics Blog about the fact that many retailers in Paraguay and other countries are facing a shortage of small change, so they give the customers candy in lieu of pennies or whatever. This got me thinking…

Instead of using candy for pennies, we should be making pennies out of candy! Prices for sugar are rising, but it’s still a lot cheaper than copper. Make cents that melt in your mouth, not in your bank account!

But this just raises the question: what flavor should we make these candy pennies?

U.S. Mint, of course.

Suppose you’re in charge of printing and shipping for the new book Harry Potter and the Deathly Hallows.  How do you go about printing up 100 bazillion copies of the book and shipping them throughout the world, as quickly and cheaply as possible?   In today’s global economy, I would have guessed that the answer was, “print ‘em all in a gigantic factory in China, load them into a thousand cargo containers, and ship ‘em out.”

Turns out, this isn’t the right answer.  I was reading the colophon of my copy of the book — that’s the very last page, which talks about the physical book, where it was printed, what font was used, and so on.  My copy was printed in Taunton, MA, not ten miles away from where I bought it.  I thought, “no way this is a coincidence.”  I asked two other friends: theirs were printed in Fairfield, PA and Harrisonburg, VA.

Apparently, instead of one big factory, the books were printed in dozens, maybe hundreds of bookbinding companies all around the world, as near to the consumers as possible.  Now, my two friends live in the Bay Area, not in PA and VA: probably the wholesale distributors who supply their local bookstores are in these states. Now I’m curious just how many different printers were used. So far, 3 different books, 3 different printers, no two alike.

Chicagoans Protest as Indiana Lets a Refinery Add to Lake Pollution

Wow, it sure is a tough political problem when one state objects to another’s pollution. Seems like managing interstate disputes like this might be a good job for the federal government. Wouldn’t it be cool if we had some sort of federal agency in charge of this, an Agency for Environmental Protection or something?

I got involved in a discussion today about information technology management.  Specifically regarding the iPhone, and the fact that many business IT people hate the fact that they can’t upgrade or patch it, or remotely manage it: all the support is handled by the user.  The general point is that many IT people feel safer if they have control over things, so that user independence is seen as a problem. This reminded me of a fable.  It’s based on a true story, and I hope anyone who sees themselves in it will forgive me…

Once upon a time, in the distant ’80s, there was a large research lab. This lab did a lot of work with computers. The computers of the day were giant VAXen which filled a basement room, with tentacles reaching out to terminals in users’ offices throughout the building. The computers were complicated and confusing, and an army of highly trained, very smart support people worked on them. These high priests and acolytes lurked in the basement, worshipping the VAX god and interpreting its prophecies to the users. They did this job well.

But the users looked at the sacrifices they were making to the VAX god and its acolytes, and realized, “I can get much more done with far less money if I buy a small workstation for my office.” The priests in the basement said, “but we won’t be able to control and service the machine. What will you do when it breaks?” The users replied, “I’ll buy a new one. They cost as much as two days of your salary.” Lo, the priests in their basement temple feared for their jobs, feared that their great god, the source of their power, would be lost forever.

The priests were right, up to a point. The workstation users discovered viruses, and hackers, and spam, and the rest of the ten plagues of the Internet. They learned to do some of the work the priests once did on the VAX. But the new workstations were so much cheaper, and so much easier to use and maintain, that they found it a fair trade. The great VAX was cast out of the basement, and died the sad death of all forgotten gods, but the priests met a happier ending. The eldest took a generous early retirement; the neophytes re-trained, and learned to serve the new pantheon of desktop workstations. By letting go, by giving up their ability to control and manage and dominate, the priests made their users happier and more productive, and saved the lab a hell of a lot of money.

Last week, I bought an iPhone. You’ve probably heard the hype and the hate, so I won’t bother giving a full review. On the whole, I’m very happy with it. Pre-release reviews worried about its durability, its battery life, and the difficulty of typing on its onscreen keyboard, but I haven’t had any problems with that. My only real complaint is with AT&T’s network service: the phone gets decent signal everywhere except in my house, which is a bit frustrating. AT&T’s EDGE data network is definitely pretty slow, but it’s tolerable. It’s fast enough to do Google Maps without a lot of delays, but for some reason Web pages are somewhat slower.

The phone itself is great, except for a large number of very frustrating random web-broser crashes). However, as I use it, I see a lot of things it should have, but doesn’t. Fortunately, most of the missing things are software, rather than hardware, and so could be added by Apple, if they cared to:

1) A real filesystem. I want to be able to store and view text, pdf, and Word/Excel files. iTunes should let me identify a directory on my desktop computer: all files in this directory will be stored on the phone.

2) Spotlight. The phone’s running OSX, right? If so, why can’t I have the same awesome search capabilities I have on my desktop? OS X’s Spotlight search is so incredible, I feel lost whenever I have to use a computer which doesn’t have it.

3) Cut/Paste. I need to be able to move arbitrary blocks of text between the phone’s browser, e-mail, contacts, and other features. The phone lets you “share” URLs, e-mailing them to someone, but that’s not enough. It’s a bit tricky to figure out how to do cut/paste given the limits of the user interface… how about this? One-finger dragging currently repositions the cursor, using a magnifying glass to make it more visible. Once the cursor is in position, make it so a two-finger “stretch” (like how you zoom out on web pages) selects text. Once text is selected, you can “cut” by flicking to the left, or “copy” by flicking to the right. To paste text, do a two-finger tap.

4) AIM. Everybody who uses the phone mentions this, there’s no way to receive instant messages on the phone. It’s such a glaring omission that I’m sure there’s a reason behind it: probably since AT&T earns money from SMS messages, they don’t want to give iPhone users a free alternative. But let’s be honest: iPhone fans aren’t big SMS texters anyway. I doubt many people will pay extra for more text messages. So just give us our iChat, please.

5) Encryption. I want to be able to store a list of passwords and keycodes in the phone, encrypted so people can’t get at them. Other folks might like to encrypt their contacts, calendar, or other databases with possibly sensible info.

I promised I wouldn’t just re-post links here, but this is too good to pass up: British forces blamed for man-eating badgers in Basra. A biologist helpfully clarifies that these aren’t British man-eating badgers, but the homegrown Iraqi variety. These badgers are serious business. Maybe we should give up on the Iraqi army and start training the badgers to handle internal security.

News sources describing today’s report on the progress made in Iraq so far call it a “mixed bag”, with half satisfactory progress, half unsatisfactory. But look at the “satisfactory” results:

1) Constitutional review: There’s review happening, but there is no agreement on the most serious issues.

2) Semi-autonomous regions: Supposedly satisfactory, in actuality, postponed 18 months.

3) Establish some poorly-defined bureaucratic committees: satisfactory progress. Grats on that.

4) Get some new Iraqi soldiers active in Baghdad: couldn’t get any new guys, so we swiped some from other parts of the army.

5) Make sure the Iraqi government isn’t protecting militants: I can’t fault the claimed success here.

6) Setting up joint security stations throughout Baghdad: Grats. Now do it across the whole country, please.

7) Ensuring fair treatment of minorities by the government: satisfactory, but it’s not the government that’s the problem, it’s the sectarian death squads.

8) Allocate $10 billion in 2007 reconstruction money: Satisfactory job in deciding how to spend it, but they won’t be able to actually spend it this year. Seriously, how hard is it to go on a shopping spree with someone else’s credit card?

So, only a couple of the claimed successes are actually real progress, and all of those are stuff like spending cash and adding bureaucracy. Wow. I’m impressed.

Let’s look at the failures:

1) Undoing universal de-Baathification

2) Figuring out how to divide up the oil wealth

3) Disarming the militias

4) Putting Iraqis in charge of the security of Iraq

5) Keeping sectarian agendas out of the Iraqi army

6) Reducing violence and ending the dominance of militas

7) Increasing the number of capable Iraqi army units

8) Stopping government officials from ousting sectarian opponents from the army on trumped-up charges

It’s not fair to just add up benchmarks and come up with a box score. Unsatisfactory item #6, for example, is just a little more important than the others. In general, the report shows failure at the important stuff, and success at the trivial things.

In my continuing series of “amusing myself by brainstorming song titles” puzzles: Songs with “mother”, “mom”, or “momma” in the lyrics. May not necessarily be good to put on a mix tape for dear old mum.

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