| Tuesday, August
14, 2007
The Joys of Diversity
On our walk yesterday we spied a dead crow. I attempted to
report it to the city health authorities. When I called the number, I got a
long message in English from Mayor Villaraigosa, followed by the same
message in Spanish, followed by a long wait listening to the Los Angeles
Chamber Orchestra. Since I was on a cell phone with lousy reception I
gave up. Roberta reported the dead bird when we got home and she could use a
speaker phone. Incidentally, despite her efforts, the dead crow is still in
our neighbor's driveway this morning. Finding a dead crow is
fairly unusual. The last time I saw a dead crow was some years ago, and
there was a flock of 40 or so crows flying around above the body, and making
a great fuss. Actually, I have to
correct that: about 5 years ago I found an injured young crow, that had
probably fallen from a great height. I took it home, which took considerable
nerve because more than a dozen crows attempted to stop me. They were quite
aggressive in their attempt at defending the helpless youngster, and after I put the young crow in
the bird cage I keep for fledglings -- we have raised about a dozen young
birds, mostly linnets but also a mocking bird, a ring-neck dove, and a
thrush -- after I put the young bird in a cage the others hung around to
watch. Alas, the bird couldn't perch properly although it was old enough to
do so, and it died. My point being that
in both cases there were many crows around, all concerned about the dead
bird in one case and the dying fledgling in the other. Yesterday's crow lay
on the parking strip alone. There aren't enough crows left in Studio City to
form an honor guard for it. A few years
ago flocks of 30 or so were common, and in the evenings they would all fly
to some common location, so that you'd see several hundred crows getting
together to talk over the day's events before they dispersed at dusk. They
didn't live in huge flocks, but they seem to have remembered that their
ancestors once did. No more. A dozen
crows is a large flock now. They're most seen in pairs, or fours. It's due to
West Nile virus, which has become endemic in Los Angeles county, having come
to the eastern United States in 1999. Precisely who brought it here is
unknown, although in theory one is not supposed to be admitted to the US
when carrying a virus infection. Some speculate that it came in via an
infected bird. West Nile is carried by mosquitoes. It can be directly
infectious as well. And, alas, it was spread by blood transfusions and organ
transplants before hospitals began to screen for it in donors. Now Canada
and England worry about Americans bringing in West Nile to their countries.
West Nile Virus is one consequence of diversity that might
not have been prevented if we had kept the old Melting Pot concept of
Americanization of all immigrants. On the other hand, one of the
characteristics of American culture is cooperation with the public health
authorities. It might have been caught and quarantined. It might not have
been.
West Nile has been in the world a long time,
and surely people infected with it have come to the US before in the past
centuries. It's only recently that it got uncontrollably loose.
The United States was not built on the notion of diversity.
It was build on the notion of e pluribus unum: from many we become one. You
could study to become an American, and provided you did so, you would be
accepted. There might be initiation rituals: "No Irish need apply"; but over
time, as the Jewish police captain in Serpico says, "When I joined the force
you had to have an uncircumcised shamrock between your legs to get
promoted." Far from the objects of discrimination, Irish had become favored.
The same happened with Italians. St. Patrick's Day Parades, Columbus Day
Parades, Serbian Halls, recall those times when we celebrated our diverse
origins -- but did so as part of Americana.
You could study to become an American, and over time we were
becoming one. The Melting Pot worked. There was a long delay in allowing
American Blacks to become part of that process, but even that was happening
-- until we discovered diversity as a goal. Now the very idea of e pluribus
unum is derided. When I was a guest of
Nokia in Finland a few years ago, I was introduced by the President to a
Vice President: "He is a Swede who lives in Finland." It turns out that this
man's family had lived in Finland for over a hundred years. At the time I
thought that was odd. I suppose today it can happen here.
The United States was built on the notion of the Melting Pot:
once you became an American, you were American first and your origin wasn't
important. We didn't always live up to those ideals -- it took Truman and
the Korean War to end segregation in the Armed Forces -- but it was the
ideal. No more. We are not told to forget the Melting Pot and becoming
American. This morning the papers tell
a story: in Thousand Oaks, one of the safest cities in America, a 7 year old
boy named Molina was hacked to death by his mother's friend Calvin Sharp.
The mother's name was Ruiz. The boy had apparently spent too much time
playing video games. Welcome to
diversity. =============
Hedge Funds and Black Swans
The hedge funds are crashing, and Wall Street is threatened.
The story is all over the papers. It's a very old story of supposedly smart
people using their "technical analysis" of the market to make predictions.
When things go on as they predicted they become confident. They borrow money
on their stock holdings to buy more stock. Pretty soon they are speculating
on borrowed money. It's all borrowed money.
Huge sums are injected into the markets this way. It's all
paper. The housing market gets huge shots of money. There's no place to put
it, so people without incomes and without credit are loaned large sums. All
this money goes into the housing market. The price of a house goes up, and
up, and up -- my house, which I bought in 1968 for $30,000 ( a lot then; I
was able to borrow 90% of that because I was a college professor with nearly
perfect credit) is said to be worth more than a million dollars now. Since
the market is going up, it doesn't matter if people without income buy
houses on 100% interest only loans; they'll still "build equity" as the
price (not value) of the house goes steadily up, and even if they default on
the loan everyone will make money. They can sell out for a profit.
In 1929 people bought Insull stocks without knowing what the
companies did: they knew the stocks would go up. The resulting crash was
overture to the Great Depression. Too much money chasing too little of
value. One of the "reforms" of that time was to limit the margins in the
stock market. You couldn't play the market on borrowed money secured only by
the "value" of your stocks. At least not more than 10% margins...
But the smartest people in the world, the hedge fund
managers, found ways around that in recent years. The result was the housing
bubble, and a new stock market bubble. We went through all this once
before, with stocks valued at 100 times -- not earnings, because the company
hadn't earned anything yet -- but 100 times expected earnings. I warned
readers in 1998 that this couldn't be sustained for long. For a stock to be
worth 100 times its earnings (let along expected earnings) would mean that
it would take 100 years for the stock to earn enough to pay for itself. Thus
the only way it could be worth that would be for it to go up: for earnings
to go up by a factor of 10 every couple of years. But if you look at the
potential market for the company's services, there was not a growth factor
of 100 even if the company had no competition at all.
The result was the dot bust. We now have new bubbles, and the
smartest people in the world, the hedge fund managers, are astonished that
they have suddenly lost as much 30% and more of their capital value in a few
weeks. Of course the capital "value" may not have been there in the first
place. And they never catch wise.
Note too that a great deal of our employment base is in the
"service economy". That phrase covers a multitude of positions, many very
low paid: but also a number of the glamour go-go positions, the lords of the
earth as described in Tom Wolfe's novel. None of them produce anything that
can be eaten, ridden, worn, or even watched for entertainment. Their entire
"productivity" consists of moving numbers around and manipulating paper and
electronic representations of numbers on paper. None of that has an
intrinsic value: and when it stops going up, people want their money out of
it, only there's nothing valuable in there to begin with, and a "market
correction" is inevitable. There was a
time when "sound investment" meant creating consumable goods. Now you can
travel on trains through block after block of closed factories and dead
production facilities. We get our goods from overseas, and pay for them
through debt. And we never catch wise.
======= We also have
good mail today. =============
Subject: Greeting Card Malware Warning -
Dr. Pournelle:
There's another "You've been sent a greeting card"
spam mail making the rounds. It seems to be prolific. In some cases, it may
get through spam filters.
The message includes a link to click on to get your
card. Clicking on the link will result in an attempt to download a virus on
your computer.
If your anti-virus is current, it should block the
viral install attempt. But "Safe Computing Practices" are that you should be
very wary about clicking on links in emails. And greeting cards emails are a
common malware-distribution technique.
My recommendation is to just delete greeting cards
messages.
Regards, Rick Hellewell
For what it's worth, I just delete all those as well, even though I am
pretty sure some of them actually come from people who mean well. But they
scare me.
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