"The Logic of Stupid Poor People"

Came across this article and had to share it.... Super interesting.

Fancy SV-ers Ruining It for the Rest of Us

You know what I'm sick of? Those hot-shot folks in Silicon Valley-- riding their candy whips, sippin' on the 'Cardi and upgrading to their iPhone 5S-es (I always have to check when I type that--- I'm constantly terrified that I typed "iPhone 5 asses") like gangstas do.

How dare they try to save the news industry by investing their ungodly amounts of money in dying news channels? (Though I guess some of it is well-deserved since they're...you know...making things that no one has ever tried before.) Trying to innovate by putting desktop-power chips in phones and forcing progress across the board?

But the real fear should probably focus on the Seattle area. Bezos is on a tear right now. He's on the news investing thing, he's making a ton of revenue (though no profit yet).

I just remember that the young professionals in Silicon Valley were the dreamers-- the independent, free-thinking spirits who dreamt big and did big things. As Silicon Valley grows, it seems like there's a distinct change in the atmosphere-- people are more obsessed with the "see and be seen", the dreaming has been tied up in red tape, and it's become increasingly clear that nothing is for free any more (real estate in San Francisco? Fughedaboutit. Three words: Google Bus Pinatas.)

Going back to Silicon Valley in a few months will be a huge change for me, and I wonder how I will adapt. Here's the list I have so far:

1. Denial-- just refuse to believe I'm spending $2K+ per month for 600 square feet
2. Bargaining-- see if maybe my office will let me sleep under my desk
3. Anger-- I feel like this is where most of my time will be spent

I'd Gladly Pay You Tomorrow...for a Burger Today

I love this. So.... going to Booth, we talk a lot about the economy because apparently there's been a lot of people who went to my school that were into that sort of thing. I suppose it's kind of important or something so they've developed a lot of algorithms, equations, general theories and sometimes interpretive dances to measure, quantify, analyze, track or gauge the way the economy is moving, trending, changing, increasing and decreasing. It's been an exhausting tenure for the economists at my school-- they've been busy.

But the problem is, I've learned, that the economy doesn't really like being measured. I mean, there's a lot of variables! You have to look an employment (or lack thereof as the case has been recently), population (we're not a 100% on how to measure this yet-- is it working age? All? How do we count for people who've moved back home to their parents? How about the parents that are now living with their kids? It depends who you ask apparently), how we define the poverty line, where in the nation or the globe the people are located, and how we define "standard of living".

One tried and true measure that has been used for a long time is the CPI (Consumer Price Index) which is basically a baselined measure of how much stuff (predetermined, set, unchanging stuff) people can buy with a set amount of money. This supposedly helps us benchmark so we can figure out inflation in a more accurate way. We recently changed the way we define it, but that's another story. There's a lot of qualms about why the CPI is inaccurate , but we really didn't have anything better. Until now.

So The Economist (I'm catching up on my back copies of The Economist, ok? Don't judge me, I just finished my finals and I had a lot of Bones to catch up on) made up their own index that they call the Big Mac Index. Follow me. Also, if you don't know who the guy above is, you really need to get out more. Or less. Or live in the 50s. Whatever, you're choice.

The Economist made it real easy. They based it on a symbol of Americana-- a global behemoth that's expanded to the far reaches of the world-- that can be found anywhere if you're hungry enough. The Big Mac Index is actually based on something real (!!)-- the PPP (theory of Purchasing Power Parity) according to which prices and exchange rates should adjust over the long run, so that identical baskets of tradable goods cost the same across countries. Their "basket of goods" in essence is only one thing-- a big mac. So for those that are worried about currency wars (countries purposely downplaying their currencies to give their exporters a boost in a world anxious about recovery), rest assured knowing that a Canadian burger costs $5.39 compared to the average price of about $4.37 in the US. In Mexico, it's only $2.90, suggesting the peso is 33% below its long run value relative to the dollar. The index actually suggests that currencies are overvalued in Norway, Switzerland and Brazil. The euro, in contrast, is now around 12% too expensive relative to the dollar, which could be dangerous as an indication of minimal boosting the ailing euro area. Compare this to China, which has barely moved toward fair market value, most likely due to meddling by government/banks and government banks who rely on exports as their lifeline. Big Macs can't be wrong!! Mac attack anyone?

Mary-Gonna-Make-Me-That-Money

Why are we still talking about this Marijuana Business? The Mary Jane roaches, the sweet purple smoke? C'mon, I can be a little gangsta. I listened to a Vanilla Ice album once.

I was watching a segment on MSNBC earlier today and the two talking bobble-heads (not to be mean, but they actually do bobble their heads a lot), and they were appalled at the very idea of legalizing marijuana. Even the Washington Post picked up the story soon after Colorado and Washington legalized marijuana in their state, with the ability to manufacture, process and distribute for medicinal purposes.

I know that everyone has heard the arguments against legalizing marijuana. It's a slippery slope, it's a gateway drug, it breeds an unsavory culture, it could increase the many opportunities for public danger. But what about the upsides? Tax revenue alone could help us in the gigantic financial hole that we're in, means more jobs if you're going to open it up completely like Washington and Colorado did, by regulating it, you're actually taking power away from the large black market that supplies it now, and you're also limiting the... negative international relationships that we're making in for the drug suppliers south of the border. Why not?

I feel like we have bigger problems to deal with as a nation. A fiscal cliff, a eurozone- now-global problem, an unemployment problem and other national drug problems that have a much larger consequence. Maybe it's time we focused on the important things.

The Effect (?) of Financial Markets on Music

I wish I could say that I was some uber-genius who spent my entire day looking at macro market trends and determining what the next big value stock pitch or internet technology trend was going to be. In fact, I am usually running around, counseling undergrads about their lives, discussing my complete clueless-ness with my own classmates and trying to keep up on homework while balancing extracurriculars and work.

And then, I think strange things that distract me sometimes. Is there a correlation between the financial markets and music? How could we measure this? What would it mean? What would I assume? How could I look for a pattern?

My hypothesis is that there is, I imagine that the easiest way to measure this is by BPM (beats per minute) and that I hypothesize that while music overall has gotten faster (higher BPM), music is slower in downturn-y times.

Let's see what happens.

So I found some background information around the economy.

Key Take-Aways: Oil usually increases in price when the economy is in a recession/about to go into a recession. During the recession, these high oil prices will begin to trend back down to more "normal" levels. Recessions in the US were in 1973-'75, 1980, 1981-1983, 1991, 2001 and 2008-2010.

 

And then I got a little more information and found out about bear markets...

Key Take-Aways: Bear markets! These happened in 1905-1920, 1931-1944, 1965-1980, 2000-2005 (no information is given after 2005).

Then I looked up GDP growth in the US on Google-- GOD I LOVE GOOGLE.

Key Take-Aways:GDP growth is where you would expect it to be-- with the dips and mountains in all the right places...

Then I got a little excited with the Google tool and added in Asia, Europe and Latin America (red, orange and green respectively).

 Yup, that made sense too.

So then I tried to put together my own knowledge of music history based on the interwebs research, which goes a little something like this: In the beginning, there was vaudeville and Oscar Hammerstein in the early 1920s. This was the age where blues and jazz emerged into a brand new world. By the 1930s, the party had gone into full swing (har har har) with big band swing. 1940s saw the emergence of bluegrass and country, along with the beginning of "Appalachian folk music" (seems very probable that this could be one of the muses of our current-day "indie rock". Appalachian folk music was significant because it really increased BPMs and probably heavily influenced the be-bop movement also in the 40s that held some of the records for BPMs (could hit 300). 1950s slowed things down a bit with gospel/soul music with some greats like Mahlia Jackson, but also gave us some of my favorite songs from Dinah Washington and Aretha Franklin. This age was also the emergence of Doo-wop (which was fantastic) and we saw songs like Frankie Lymon's "Why Do Fools Fall In Love". 1960s was about freedom and experimentation, where we saw a brief stint of "psychadelic" rock that transitioned into what we now refer to as "rock" (The Beatles, The Who, Rolling Stones, etc.". 1970s was about love and peace yet we got heavy metal during this time from the likes of Led Zeppelin and Black Sabbath, as well as a stronger emergence of punk rock, which began to emerge in the 1960s.

In 1980s we were introduced to Ladies Love Cool James, also known as LLCoolJ, along with NWA and the beginnings of hip-hop and "gangster rap". The 90s were filled with hair metal (a new branch of the rock family tree), so we saw Nirvana's "Nevermind' album, along with the Notorious B.I.G. The early 2000s especially were inundated with bubblegum pop with the likes of Britney Spears, Backstreet Boys and N'Sync, but it also began to lead into some more "alternative rock" with The Hives and The White Stripes, which gradually became "indie rock" with Franz Ferdinand and Modest Mouse. Starting in 2010, we've seen a heavy emphasis in dance music, particularly with a lot of latin flavors, which has emerged as a  mix of "dance pop" (Cascada, Pitbull, Ke$ha), "dubstep" like Skillrex and a re-emergence of "house" or "dance" music. Although house music actually originated in Chicago (what what!) in the 1980s, it re-emerged in a strong way in the (later half of) the first decade of the 21st century. (I would say 2008-ish onward.) I think it's safe to say that the world is now a better place because of the contributions of David Guetta, Afrojack, Deadmau5 and Kaskade.

I found the average BPMs of these popular genres of each of these decades and plotted them, but I needed to account for some decades where multiple "popular genres" emerged, hence there's BPM 2s and 3s...The outliers here: 200 in 1940 was be-bop (one of the highest ever), 120 was bluegrass, whereas 75 was country music. Additionally, the 85, 90 and 120 BPM blips in 1970 were heavy metal, outlaw country and punk rock.

At first glance, it kind of makes sense. Although BPM did not tick up as quickly as I thought it would, the slowest BPMs were actually always interbellum times. The highest BPMs, similarly, always occurred right after a financial downturn, which is not to say that downturns always resulted in low BPMs. Music tended to fragment (split to have many different emerging genres) during the 1940s and 1970s-- strong bear markets. In the 1940s, we had an ending war, soldiers coming home and inflating the once-low unemployment rate, an economy under stress and a recovery from a mini recession in 1937.  The 1970s was also a time where the nation was torn. Although the Paris Peace Accords stopped US participation in the Vietnam War in 1973, our society was still torn. The 70s was a time when a President and a Vice President resigned under threat of impeachment, and the US economy entered the worst recession that it had seen in 40 years in 1974.

 I looked at it and wasn't satisfied so I looked at some more data....and looked at GDP vs. personal consumption expenditures to see if that would give me additional data.

And then found this research paper ("Trends in BPM in Popular Music") that had a more accurate method of determining average BPM. This paper consolidated the top songs from each decade (instead of musical genres) and allowed me to determine a more accurate BPM.(Red dots are average BPM per decade.)

And if we cut this to pair it up with the Google charts:

Looking at the average BPM per decade (green dots), it seems as though there could be an indicative story here. Although low growth rate resulted in big changes in BPM 1981, I think the jury is still out as to the amount of direct correlation here.

Regardless, interesting to look at...and this is what I do during my days when I get bored.

I know...I'm a weirdo.

Educating the System

Okay, so I have a little bit of a biased interest here. Let me caveat. But, I was recently presented with a question of how the future of education was going to work. With all of the MOOCs out there, sponsored by MIT, Stanford and Georgia Tech, it's a valid question. As a soon-to-be full time MBA student, I have a lot of concerns, clearly-- will the amount of money that I'm about to invest in my education (probably close to $120-160K for two years) pay off? Will it allow me to [fill in blank here]? 

So let's think about it. From this student's perspective, I have always been raised in a household where there was no such thing as too much education. It went without saying that I would graduate high school with good grades, go to a good college (preferably on scholarship, since my family couldn't really afford higher education...Strangely though, even though we couldn't afford it, it was never a question that I would go. I sometimes wonder if I hadn't gotten a scholarship, what my family would've done), work for a few years and then go back to get in an advanced degree in something (preferably business, medicine or law). So far, so good. I understood this plan at a young age and pursued it--not because I wasn't creative enough to think of something else and just wanted to take the path of least resistance, but because I recognized the value early on. At least, I recognized the value of high school and college. I've had colleagues and friends debate with me over the value of an MBA, and their concerns are valid. There's not much you learn at b-school that you wouldn't learn out of a book, you're really just doing it for the network, if you're doing it to be an entrepreneur just take the $120K and put it toward your start up...the list goes on and on. Regardless, I see that there is value for me, and that is a discussion for another time.

For the schools themselves, these are tough times. The public ones are getting slaughtered on budget cuts, the private ones are scrambling to make sure the alumni stay happy and the funds keep flowing in. Often times, this leads schools to continue bumping up tuition. The average 4 year university increased tuition by 15% between 2008 and 2010, whereas the average top 20 MBA has increased by 5.7%-- outpacing the increase in graduating salaries and national inflation. The average class size is going up-- even at the top institutions that try to keep class sizes small for the sake of a "more intimate learning experience" in order to meet the increasing demand. Once they get through their 2 years, many students, especially those outside of the top 20 or even the top 10 are struggling to find jobs due to the bad economy. From an employer's perspective,  they can choose from the cream of the crop-- they now have the power to demand that their new hires have both experience and a great education, because the supply is so out of whack with the demand. Therefore, the new graduates that have fantastic credentials but may be lacking (just slightly) in the experience department with 2-4 years are getting shown the door. From a student's perspective, they're saddled with heavy debt, unable to find jobs and invested in what they thought were safe choices by doing "practical" concentrations like Finance or Accounting. In summary, things aren't looking so good for the students either.  

But what about the professors? There are waves of students that have decided that their path would lie in an advanced degree-- a PhD that could (should?) give them a way-one ticket to face the other direction in the lecture hall. Entry-level tenure tracks start at $54K a year, and this is all most students can hope for after dedicating 4 years of their lives to essentially educating themselves on how to educate. The American Association of University Professors estimates that the ratio of openings to new doctorates is 1:4. According to the Survey of Earned Doctorates (SED), half of all PhD recipients in the humanities are over age 35 and have foregone many things that normal 35 year olds have done-- stable paychecks, buying homes, starting families. Looking at the big picture-scape, The Economist reports that there really is a minimal financial gain between a Master's degree and a PhD, which insinuates that all PhD holders are hoping to teach/research. In my specific case, I'm really looking at the quantitative fields, Finance, Business & Economics, etc., but even these "hard subjects" have complicated minutiae. Some claim that Accounting is supposedly better than a doctorate in Finance, while others argue that it's really a progression issue-- it is much more rare to go from Finance to Economics but not the other way around.

So isn't there any light at the end of this tunnel? Any opportunity at all for someone who wants to make a difference, give back to their community and contribute to the norm of thinking? Well, the future for doctorates is a crowded one. The World Future Society claims that doctoral degrees hit an all time high in 2008, after rising for 6 straight years. Interestingly enough, the non-science and engineering (humanities) doctorates have decreased-- perhaps as a reaction to the "hard skill"-based economy that the recession has created. In the most telling article, The Chronicle of Higher Education performed a survey of doctoral candidates across California, and the results were slightly bleak. On the upside, a lot of the anxiety that comes from receiving a doctoral degree is what you can do with it afterwards, and many schools such as Berkeley and UC Davis are focusing on preparing their doctoral candidates to enter a fierce job market through workshops, seminars, guest speakers and a lot of hands on career guidance. 

The doctoral predicament is interesting because I think it perfectly highlights the many ways that the US has failed in their structuring of the educational system. Contrary to other countries like China, where the government more or less tells their population what their lives will be like after entrance exams, the US is almost a promised land where students can choose based on their passions, interests, strengths. Unfortunately, many people out there want to go into academia, but there simply aren't enough positions for all of those that would like to contribute back to their communities. As a result, you get a group of highly educated people who've sacrificed a lot for their profession unemployed. The "lucky" ones are paid a pittance and rarely receive the job stability they desire to the decreasing trend of tenureship.What kind of society can we be? What can we hope for in the future if we don't reward those that will teach the future? I guess only time will tell.

White and Black and Green All Over

I took a lot of classes in college that dealt with the perception of race-- it was always kind of a hobby of mine. Maybe it's because I, a Chinese girl, was born in a predominantly white (very small) town in northern California and never realized the extent to which race played a part in everyday life. I can honestly say that, growing up, I never really thought of myself as different from the other kids-- sure sometimes the "bad kids" in class would make fun, but they were often quickly shushed by my friends, my teachers or a quick dodge ball to the throat. (Playground vengeance!) Perhaps it was because we were younger then and we didn't question-- "why are you different looking than me?", but I like to think that it was because of our childlike ignorance that we simply didn't care-- we didn't question why because in our small scope of the world, it simply didn't matter.

When I moved down to southern California when I was 12, things changed. There were suddenly a lot of other Asian people (not just two families like in my old town) and not just Asians-- a lot of other races too! But it wasn't as cohesive as I was used to-- the Korean kids were "KP Kids" (Korean Pride Kids) and flashed "KP" hand signals to each other in a joking (but not really joking) way. The Chinese kids were split between the Americanized ones ("The Twinkies"), the FOBS ("Fresh Off the Boats"), and the CP (you guessed it-- "Chinese Pride") kids. Within the Chinese Pride kids, they subdivided into the Taiwanese kids, the nerdy studiers, the ones who thought they were thugs with the baggy pants and everything-- all leaving their multi-million dollar homes in Turtle Rock every morning. There were a ton of others- Indian kids, Persian (Iranian) kids who were not to be confused with the Arabic kids.

I was ostracized a bit. For the Chinese kids, I wasn't Chinese enough because I preferred to hang out with my best friends who were Persian and White. Growing up, my boyfriends ran the gamut-- Spanish, white, Brazilian, Mexican, Korean and Chinese... but because they weren't always Chinese, I was relegated to Twinkie status. Which is not to say that everyone wasn't nice. It was more of an understanding that I would normally hang out with the mixed or not-all-Asian groups but that I would always be welcome to hang out with the Asian groups if I chose.

So I grow up. And now, I've been noticing an influx of articles about how the recession has really increased the disparity between races. I find it so ironic that growing up, I was essentially color-blind (maybe color-ignorant, since I saw the difference, but just didn't care/know why I should care), I suddenly live in this Utopian place where everyone gets a long (mostly) and now that I'm an "adult" and "mature", race suddenly matters more than ever.

The subprime implosion, for example, has apparently set African Americans back more than normal since they are more typically the customers that started with below-average credit scores to begin with. The flooding of money for mortgage lenders changed all that, and soon, African Americans were one the largest untapped markets. They were able to get loans despite subpar credit and the financial industry simultaneously was spurring home ownership as well as creating jobs and driving the economy. In the words of a Wells Fargo lawyer, "There was a loan for almost anybody who wanted a loan. It was just priced differently based on credit". I want to bring this up with a note of irony, because Wells Fargo is paying $175M to settle allegations of steering customers to high-interest or risky subprime mortgages when they were qualified for a subprime loan due to their credit scores. The ones they steered were predominantly Hispanic or black.

The Pew Research Center estimates that the wealth of blacks declined by 53% during the recession. Supposedly, it goes farther than this and may hint at the racial segregation already in place in financial instruments. In Atlanta, it was reported that black homebuyers paid an average of $700 more in fees to close than their white counterparts with similar profiles. Around this time last year, the data collected by the Census Bureau indicated that the median wealth of Hispanic households fell by 66% between 2005 and 2009, making them the hardest hit group by the recession. Whites fell by 16%, African Americans fell by 53% and Asians fell by 54%. These declines have been noted as the largest wealth disparities in the 25 years that the Bureau has been collecting data. Median wealth of whites is now 20x that of black households and 18x that of Hispanic households.

Research claims that whites now have 2x the consumer power as blacks, due to the "Great Recession". With another potential recession (one that is supposed to be much worse) on the way, how much larger can the disparity grow?

What Is True Charity?



I recently read this article about Panera opening a "pay-what-you-can" cafe in Lakeview, Chicago. Although I think that this is good in theory, I have a lot of questions about why they would choose Lakeview. For one, Lakeview is one of the most affluent neighbourhoods in Chicago, if they truly did want to "create an experience to lift people up", they should consider neighbourhoods where people could really use the food.

In the article, they justify that they need the "million dollar homes" down the street to make sure that there are a stable flow of affluent folks who will pay the suggested amount for food in order to support those that cannot. However, I think that there could be many other alternatives. Putting in the loop for example would not only put it closer to the west and south side that have much greater need, but also give it access to many more "affluent" (in the sense that you have a captive lunchtime audience of white-collar workers) but also give it the high volume that could make a store like this more profitable for the company. Moving it to the far north (Andersonville and farther), would also put it closer to the lower income/middle income sector if they wanted to play it safe, and would allow for it to become more of a "neighbourhood hangout"-- the type of place that people go to work, read or just enjoy a cup of coffee-- a mysterious mix that Starbucks made famous and companies have been trying to replicate ever since.

Perhaps I am just over-sensitive now that I live in the Near West and I see the discrepancy of the "have-a-lots" and "have-nots". My neighbourhood, for example, is filled with BMWs, Audis and brand new "middle-market" cars like Toyotas and Hondas. However, 5-6 blocks away I run into public housing. 5-6 blocks in the other direction brings me to one-bedroom apartments that go for $1800/month. The area, in my mind, is something that makes me more aware of what a real city looks like out of the posh neighbourhoods of River North, Gold Coast and Lakeview.

More likely is that I recently read a fantastic article in Fast Company about Homeboy Industries. Founded by Father Gregory Boyle and based in LA, this organization focuses on rehabilitating ex-cons and provides services to the community by providing a service. Homeboy Industries started by making salsa, and has now spread to making tortilla chips, guacamole, bread and is on the verge of starting their own chain of quick service restaurants in high-volume areas like the Los Angeles International Airport. Using the revenue from these ventures, Homeboy focuses on tattoo removal, educational classes and job placement services while providing food and shelter to those who need it.

I know that these two organizations are different ("But there's way more low-income than there are ex-cons!", "The ex-cons have forfeited the right for specialized treatment!"-- these are all things that I've heard in discussing this with friends, so bear with me). Homeboy probably does have a smaller demographic base, but the business model still stands. If Panera really wanted to make a difference, they would focus on areas where they could do double duty.  If they set up in the far North, West Side or South Side, they could offer jobs, subsidized food to the poor, reliable food to those residents that live in "food deserts" and still be close enough to "affluent neighbourhoods" that would support their venture. Homeboy got it right in that they don't just provide a product and expect others to sustain it-- they built a model where the business could feed itself. (No pun intended...Okay, a little bit of a pun intended.) Homeboy Industries' budget is approximately $14M for 2012, and is on pace to open additional locations in the next two years. We'll just need to wait and see the impact of Panera's store in Lakeview.

Exploratory or Exploitative?

We sure live in a crazy world nowadays. I'm going to blame it (at least a large part of it) on The Jersey Shore. I don't even know if that show is really on any more, considering that everyone that was on their original show is cashing in and selling out as fast as humanly possible, but I'm pretty sure we can blame that show for everything that is wrong with the world today. Just sayin'.  (I mean, c'mon. Snookie wrote a book? The guy who looks on steroids is trying to be some sort of talking head for Italian cooking? Why are they constantly guests on daytime television? Everyone knows they didn't actually do anything, right?... I'm not counting getting falling down drunk and being promiscuous as "doing" anything. No pun intended.)

So, once again, I've failed to properly plan my life around attending SXSW. Every year, I promise myself that I'm going to go and delight in the hipster-y mix of silicon valley-ites and indie-band-loving youths, and every year I fail. (I even have feather earrings and flowing, flowery dresses ready!) Either way though, a marketing firm called BBH Labs is getting a lot of flak this year at the festival because they've decided to use homeless people as hot spots. Yup. You heard that right.

They argue that this project is legitimate charity work, where the homeless would get paid $20 a day and get to keep any additional donations that festival-go-ers decide to give. Their job is to walk around and offer wireless to people in exchange for a donation (much like the Streetwise model that we see in cities like Chicago). BBH justifies this idea because, as the ever-connected crowd tweets, Facebooks and streams information, the surrounding cell towers get overwhelmed, often resulting in poor network quality for users. They argue that providing wireless not only improves the festival experience, but also provides a legitimate way for the homeless to make some money.

Unfortunately, not everyone agrees. Tim Carmody, a blogger at Wired, described the situation as "completely problematic" and sounding like "something out of a darkly satirical science-fiction dystopia". The actual participants though don't seem to have a problem with it-- in an interview, Clarence Jones said "I love talking to people and it's a job. An honest day of work and pay".

It's hard to disagree with that. Having been displaced after Katrina, I can understand that a job's a job. However, I think that there could a little more sensitivity. The shirts (see above), are provocative sure, but if this truly is a "charitable experiment", I feel like there could be a higher base pay (I mean $20? Really? That's not really living wages for a day's work.) and there should be some copy (er.... marketing language) around how BBH will additionally provide educational/housing/job placement services after the festival. If the argument is that they want to draw attention to the homeless issue (apparently this project was based off of another project where they gave homeless people cell phones to tweet about their daily lives), then there really should be more education wrapped up in this. Otherwise, unfortunately, I would agree that it seems to be a little more exploitative than exploratory or progressive.

To See a World in a Grain of Sand...

Bonus points if anyone can identify the movie and the origin of the title. Give up? Okay, the movie was Lara Croft: Tomb Raider starring a one (at the time) healthy looking Angelina Jolie. The actual origin of this poem though is William Blake, notorious for his role as a "seminal figure" in Romanticist (some argue pre-romanticist) literature.

Any way. Coming back to my point (I know, it was roundabout, but I'm glad that you've gone on this journey with me. I feel as though we are closer somehow. More secure in our relationship. It feels good.)

So there is this new thing. All the cool kids are doing it. It's called the Proust Index. And what is does is it measures how far back the recession has put us in terms of progress. So.. the good news is that the U.S. is only approximately 10-11 years. The worst hit was Greece, who is estimated to have been set back approximately 12 years with the financial crisis. How do they know this? Excellent question my dear Watson.

So, cobbling together a bunch of metrics, they've developed three broad categories. These include things like household wealth, financial asset prices and property prices (group 1), measures of annual output and private consumption (group 2) and real wages and unemployment (group 3). Together, these are averaged to develop a quantitative number that would indicate exactly how far behind we've gone.

In terms of historical perspective, we're actually ahead of the game. In comparison to the crash of 1929, and Japan's 1989 bust, values of equities were only 50% of their value in real comparitive terms to where we are today, whereas currently we estimate that the main indices (S&P 500) are around 90% of their peak value again (in the late 90s). However, keep in mind that it took 25 years for American stocks to regain their highs after 1929 and Japanese stocks never made it back to their peak.

Unsurprisingly, in this index, only Germany has not gone backwards out of the group that we like to call the G7. Shocker. At least we have a quantitative way to measure how badly we've performed?

The Privatization of Our Relationship

I have a bone to pick with you, California education system. You need to make up your mind. Seriously. You keep toying with my emotions! I'm young-- impressionable. Granted, I'm done with my undergrad now and I'm looking to get my masters, but I still need a little attention. I still care about us, you know? I still want what will be best for us.

In 1960, when you first came into existence, the idea (started by Pat Brown and Clark Kerr, the governor of the state and the president of the University of California) was that California would offer fantastic public universities-- universities that would give Californians close-to universal and almost free access to them. Some would enter community colleges for a two year vocational program (get their Associates, which I received when I graduated high school for free-- thanks government subsidies!), others would go to one of the (now 23) campuses of the California State University (CSU) system, and the best would be redirected to a UC campus. You were doing fine before I came along. But when we met, everything changed.

You let me into one of your community colleges. You gave me a good, free education. I tried to go to one of your UCs, but was lured away by a strapping, midwestern Catholic boy (University of Notre Dame), and even though I had to leave you, my heart never left. I know that you never fully lived up to your parent's expectations. You were never really free, especially at the UC level, but I'm worried about you when you start talking about privatization. In 1990, the state paid 78% the cost of educating each student, last year, it became 47%. It takes money to attract the best professors, and we all know that without your professors...well, not to be superficial, but that's kind of what our relationshp is built on.

I know that you're increasingly dependent on your business and law schools, as well as out of staters to try to make up that gap in your available funds. I just want to warn you about the dangers of this approach. Business and law schools are a gateway funding source, and I'm scared about the road you're heading down. Although this is a good short term measure, in the long run, you won't be able to sustain this model-- after the business/law schools, you'll rely more heavily on rich alumni, and I just don't know if there are enough of those to go around. This runs counter to your basic philosophy though-- as some schools get richer because of their name, and therefore, their more prestigious alumni (or is it the other way around?), others will be left forgotten to the side.

As you realize your worth (which I totally want to support you for. I'm here for you. You deserve the best.), you're slowly raising tuition, which is financially excluding a large majority of Californian families. I heard a rumor from The Economist that California now ranks 41st in the number of college degrees awarded for every 100 of its high school graduates. What's more, The Public Policy Institute (you know what a gossip they are), predicts that the state's industry will face a shortage of 1M graduates by 2025 due to the redirection of potential Californian re-investors (company-starters, inventors and tax payers).

I just wanted to let you know I'm here for you. I know that you have to be selective in order to remain competitive, and in this increasingly global world, "the best" is not synonymous with "Californian". But I would like to remind you of the good times we had-- me coming to community college classes on the weekend, or after school. Studying in the big UCI library. Enjoying the sunsets over the basketball courts behind Irvine Valley Community College. I felt something then-- you promised me that there'd be subsidized education then. I know I was a little of an exception, still being in high school, but if that's what young love means--then damnit I don't want to ever get older! You made me believe in educational opportunity-- nay, not just opportunity-- equality! A possibility that any kid-- no matter how much money their parents had, or whether they had parents at all--could make something of themselves because there would always be options for them.

I know we've drifted, and I've been with others since you. But you were my first true love. You gave me something to believe in. Just take care of yourself. I worry sometimes. And KIT, DBAS!

BFF 4-Ever.

Miseducation and Misinformation

Your education has failed you. Commence panic immediately.

Especially now, when we're in the throes of Occupy Wall Street-ers (and their attempted and mostly botched dismantling-s), the question in our society has become intensely focused--What makes me different than the guy next to me? And who can blame us? We have college grads, experienced workers and leaders of industries with more acronyms after their names to count-- all still in the unemployment line. (See "The Miseducation of American Dreamers" for an interesting point of view on higher education.) According to the Occupy-ers, there are 1%-ers and 99%-ers. If you're part of the conservative middle, there's also 53%-ers. If you have a job, it's just the fact that you have a job while unemployment is still ripping apart traditional fantasies of American plenty (esp. in the rust belt). If you're well-traveled, well-read, experienced in your industry than those all count too. Whatever way you choose, one factor that keeps showing up in the mainstream consciousness is education. My question is why? Is it because of the inherent inequality there? The problems in our educational system? Just a widespread watching of Waiting for Superman?

Whether you say "I went to Famous College Prep (they don't call them high schools anymore--it's not as prestigious to do so). Then I went to Ivy League College." or "I went to Community College and then State University" the youth of America know that they're in a competitive market. A market where, one of the few options that you have to differentiate yourself from the guy next to you (and hopefully land a job post-shoveling money over to your alma mater) is to go to a good school. It's interesting to see though that "a good school" is now no longer defined as just university any longer though...in fact, there are very profitable businesses that specialize in preparing your pre-schooler for acceptance into some of the magnet schools that are so desired in metro areas like Chicago, New York, Boston, Los Angeles, etc. But what's wrong with our public system?

The Economist recently boiled down the public school crux to "three great excuses" for bad schools:

1. Skimpy government spending
2. Disparity between social classes
3. Culture

Unfortunately, the first two are not particularly compelling. Yes, the government has made significant cuts to educational spending over the past years, but the U.S. is still one of the the countries that has the highest spending in education, but still lags behind other countries on overall outcomes in secondary education. Additionally, in a study of countries between 1970-1994 found that countries that doubled or tripled their educational spending often stagnated or went backwards in terms of the quality of their educational performance. So. Social disparity?

Originally coined by the education trade unionist Martin Johnson, he pointed to the "inequality between classes, which is among the largest in the wealthiest nations" (he was referring to Britain at the time) as the reason why its pupils under-perform.This is partially true. Students who come from a hard background will struggle academically because a lot of their mental will is directed toward outside variables that are more directly related to their survival. However, we find that the link changes-- Australia, for example, has a large discrepancy in income, but still falls ninth in the most recent PISA (Programme for International Student Assessment). (PS- The U.S. is 14th, after countries like South Korea, Canada, Estonia and Poland.)

So, culture then. It is true that many cultures, particularly Asian cultures place a lot of emphasis on the importance of education (the top 5 in the PISA are Shanghai, China (very interesting specific), South Korea, Finland, Hong Kong, China  (again very interesting specific) and Singapore). Some trace this back to its roots in Confucianism and its mindset of lifelong learning instead of education as a means to an end. Others will trace it back to the equally popular beliefs of Amy Chua-ism, also known as "Tiger Mom-ism".

So what do we do now? If it is a lot of culture, that will take a long time to change won't it? What should we do in the meantime? Excellent question. From a young-person's perspective, there's a couple things we can do immediately to encourage educational excellence:

1. Teach strong values. All the intelligence in the world means nothing if it used for evil. Take a cue from Spiderman kids...with great power comes great responsiblity.
2. Encourage reflection. A desire for learning should be born out of something more than just wanting to make money--encourage people to look beyond the immediate. Yes, I know money will buy you a boat which will make you happy, but why? Is it the freedom that you enjoy? The independence? Find your core driver and see where else it will take you--if independence is your thing, see if that parlays into helping women in third world countries gain their independence through micro-loans. Find ways to apply your personal interests and invest yourself so that it makes you want to keep learning
3. Outline the logistics. Sure, its easy to say that after a million years (that's an approximation) of medical school, you get to be a neurosurgeon. Begin saving lives. But let's break it down at an early age--at each step we should outline the next step while keeping the big goal in mind. Go to high school. Go to a good university. Study for your MCAT. Apply to medical school. Go to medical school. Breaking it down to manageable steps so that young people have a clear view of what the next milestone should be would help. I see a lot of people getting confused and disoriented around the college years and the medical school/residency years.
4. Bureaucracy/Tuition. Stop the mountains of paperwork, or at least give clear guidance as to what needs to be filled out, by whom, when, and what it will mean. Tuition. Stop raising it all the time. Especially when our families are struggling to pay bills. Please. Thank you.
5. This one is for parents. Stop coddling your kids. I'm not even kidding, my significant other did not have his own bank account until after he graduated college. He had never paid a bill in his life.He never had a real interview until a year after college. He didn't know how to apply for a credit card. Take the credit card with unlimited funds away.  Now slowly move away from your child. They will not implode. I promise.
6. And this one's for the kids. Finally, please stop filling your mind with trash. I know, I know. I'm super boring. Go ahead-- watch trash television if you really want to--CSI or Law and Order SVU, Millionaire Matchmaker, whatever. But let's put some limits on it. This means no Jersey Shore. Why? Because sentences like "Snooki wants a perfect guy--a juicehead gorilla with a tan. They frolick" (TRANSLATION: A randomly nicknamed girl who can't spell her own name consistently wants a new man to be around because she hasn't been physically attached to one in over 5 hours and this is reality television. She wants a 'roided-out monster with a tan because a tan is obviously super important. (Orange complexions are just part of that evolutionary programming...along with height and good teeth) She also learned the word "frolick" yesterday, so she doesn't know what that means, but she wants to do it) is not only the most ridiculous sentence ever and makes me want to cry, it's also a really bad example for our youngins. If we stop watching maybe they'll pull it off the air and the cast can fade into obscurity. *hope hope hope*

We're Angry! About....Stuff!

Old-Timey Protests

Current Protests

Let me be clear. I'm all for a good social uprising. Change the established practice! Shake things up! Push for critical social innovation! Show (fill in the blank organization) that they're doing something that makes you cranky! That being said, I'm a bit embarrassed about how low our forms of protest have fallen. 

I know. Things are pretty messed up right now. Esquire actually did a great about the value of the dollar, just one of the many things that people aren't particularly thrilled about right now, in their most recent issue. I highly recommend it. Back to protests. The Economist noted our (global, collective) failure to focus on our protest goals in a recent article titled "Not Quite Together". They made some good points about the global protesting spirit is alive in kicking (Occupy Wall Street in New York, austerity ruckus in Greece, unemployment marches in Spain, etc.), but that a lot of it is misguided. For the most poignant example, I don't think we need to look much farther than our own country though...So, for example:

• Movement: Occupy Wall Street- Although initially jump started as a protest of the 99% against the 1%, this particular movement has generated a lot of publicity, and because of its high visibility, has made very clear some of the problems in this outraged group. Even though this movement bills itself as the majority finally taking back what is due to them, underneath the Facebook groups and twittering, this is really not that different than the austerity movements in Greece. The American economy is turmoil. Undoubtedly, these banks hold a lot of that responsibility. The American public pays the price for their poor decisions. The "why do I have to pay for this?" mentality begins. Anger ensues.
• Interesting Facts:  
• There have actually been studies on the science and mathematics behind protests. For example, in a sample of European protests between 1980 and 1995, austerity-focused protests attracted over 700K people on average, whereas other protests attract less. Anti-war protests for example, only attract 15K on average
• Protests, especially the ones related to spending cuts during times of increasing expenditure, have no party preference. In another study of protests in Latin America between 1937 and 1995, researchers found that tight link cuts and instability that cuts across democracies and autocracies alike
• Researchers also found that a 1% increase in GDP results in a reduction of estimated protests per year by about 0.4 events (roughly half the impact of a similar increase in the government budget)
• What went wrong?  
• Misinformation and scattered agendas. It's supposed to be about the 99% against the 1%. In fact, it is clear based on financial data that approximately 58% of the real economic growth in America of the past 30 years was captured by the top 1% of earners. For obvious reasons, societies with a larger income disparity generally have more civil unrest. However, research on wage growth in the United States questions whether this polarization is really based on wealth capture or if it really is due to the dramatic segmentation of the labor force into high and low-skill segments (cannibalizing the middle-skill/middle-wage positions), which would result in social discomfort
• Most financial firms in New York have moved to midtown long ago, and although it is a symbolic space, the sheer numbers have begun to cause serious concerns for sanitation and public safety. As the signs above show, these protesters believe they're united, but its become a farce of itself- ultimately more trendy than impactful. The demographic in attendance is pretty young (mostly around college age/young professionals), but relatively well educated (most hold college degrees). By itself that makes me wonder-- how 'majority' can you be if you were educated at one of the best universities in the nation? (NYU, Columbia, etc are in the area) or if you have the means to be living near Manhattan? 
• Early splintering. We started with the chant of "I am the 99%", but then...wait... we got really mathematical about it and came up with some 53%-ers too. Although this is really just the conservative retort to the protest, some of their points do resonate (To feed my family, I'm working or trying to find a job, not camping out in Manhattan). I can't admit that I support them wholeheartedly though. I'm from California after all

 So. I'm torn. I keep thinking about a saying I heard in college, "If you're young and conservative, you have no heart. If you're old and liberal, you have no brain". The point is that your views will change as you move through your life depending on where you are socioeconomically. I know that I make more than your average 25 year-old. I know a lot of people who are struggling through this hard economic time, so I give thanks every day that I have a job and that I can save money for a rainy day. I live frugally and I believe in postponing current happiness for future security (that one is actually probably more cultural). I'm fiscally conservative and am a crazy savings account-er. But I still feel the need to support this protest. The financial system failed Americans. But many Americans also tried to "outsmart" the financial system by living outside their means. They're both at fault, but to fix this mess, I just have to think that there must be a better (more effective) way.

Too Big To Be Popular

Suffice it to say that Bank of America has had a rough go this year. I know, I know....all of us have had a rough couple years, and the FS industry will continue to feel it the worst, but I feel like our poor friends at BofA has had it particularly hard. After the financial melt down, they were met with throngs of angry consumers and a buffet of high visibility, embarrassing issues. In late August, they seemed to be entering an upswing when Warren Buffet invested $5M into the company, but was immediately thrown to a new round of questioning when the Wall Street Journal published that they might be taken over by JP Morgan. (Not that Buffet investing is particularly surprising since he's basically gone on record to say "Who doesn't like a fire sale? They're practically giving it away! Normal people buy extra socks when there's a sale, Buffet buys into giant financial companies. Different strokes I guess.) After multiple reports of behind-doors meetings between Geithner and JP Morgan's CEO (Jamie Dimon) and claims that this sort of transaction would be prohibited because BofA and JP Morgan would cumulatively control too much of the financial sector, reports just stopped coming, and the world began to focus more on BofA's embarrassing problems.

Most likely in an attempt to get their balance sheet back in order, Bank of America also announced in August that it would selling off its international international credit card businesses. In doing so, Bank of America was pretty much cannibalized by other companies, with TD Bank (Canada), Apollo Capital Management (Spain) and Barclays dismantled their existing portfolios and subsumed them into existing operations. After earnings calls or what people are now just calling "results", it was revealed that Bank of America finally fell behind JP Morgan (ouch) in being the largest American bank as measured by assets. To add insult to injury, this happened despite the fact that JP Morgan faced its own decreases in revenue this year. Bank of America did manage to sneak in some upbeat messages during their results calls, but these points were later revealed to be inflated by a more "creative" interpretation of one-time items and releases of loan-loss reserves. Buffet also went on record to say that Bank of America was "not properly integrating their systems or cutting unnecessary branches" at the same time that Bank of America announced that they planned to cut approximately 30,000 jobs over the next few years. Whether the intent was to justify or critique is questionable.

Finally, as one of the first banks to announce the debit card fee, Bank of America was the last major bank to eat their words and cancel their plans for this fee. (I mean, who can blame them? People were setting their cards on fire in protest in front of their offices...seems a bit extreme in this day and age when there's world hunger, etc. But hey! Find your cause and go for it. For the record though, the fee was $5/purchase, so it probably would've added up pretty quickly.) All in all, it is definitely hard to feel bad for these guys after all of this mess, but it could be important to keep in mind that we can't punish them forever. Yes, they definitely made choices in the management of their assets, but at the end of the day, the money to repair the damage they've done has to come from somewhere. They should take a more gradual approach to repairing (no $5 fees) but they will inevitably need to raise revenue if they want things ever to stabilize. That will be something that both Bank of America and American consumers will need to come to terms with.