What do you want to do?
Is it profitable?
No?: Then forget it. It can’t be done.
Or, maybe… Someone will contribute: Grant money, a government subsidy, a tax break. Maybe someone will look the other way on ‘externalities’: let you cut costs by dumping, pick up the tab for the social fallout so that you don’t have to… Is it profitable yet?
ROI And Discount Rates - A Diversion
Something I learned in a Project Management class has never sat well with me… I knew something was wrong at the time when my classmates couldn’t explain how the professor came up with the discount rates in her example. I jumped to the conclusion that she didn’t know herself. My classmates had only the thinnest grasp of the foundations - they clearly weren’t comfortable tinkering with the numbers beyond the examples from the blackboard. Perhaps this is just one of my bad habits: Asking too many questions… And there was a lot of grumbling from both sides when I would ask questions about this. Everyone just assumed that I was an idiot - Questioning the gospel. The answers tended to go around in circles - circular logic. The answer given was “Cost of Capital”, but with every step away from the core of the material in search of answers, people got understandably wary that it would never end, and irritated with me for caring. So much for education: We were spending a lot of time memorizing acronyms from Earned Value theory of Cost Control. We were too busy to learn about Asset Pricing Models or some-such.
Discount rates make sense in a stable environment: A volatile environment is precisely the situation where you run into difficulties. What’s in store for the future? Inflation? Hyper-Inflation? Maybe Deflation? What discount rate should you choose when you make descisions about a reasonable Return on Investment? In a deflationary period, you could make a profit even with a nominal loss.
But as you may or may not have discovered, supply and demand on money is affected by ‘substitute goods’. Also, if everything is a transaction, how can money be created or destroyed? - Even with taxes or fees, isn’t there a kind of ‘conservation of cash’? When the stock market goes down, it means money is being pulled out. Doesn’t that money have to go somewhere? Money taken out of stocks gets put somewhere else: A bank account, then maybe commodities, durables, consumables. But the seller of those items receives the money. And the taxman takes his cut. No money created or destroyed - just ‘redistributed’. Help me out if I’m working with any bad assumptions here. When you lose money on stocks (or gold, or land, or antique cars), it is actually on a pair of transactions. Same thing when you win: Buy low, sell high. Why doesn’t everybody get to do that?
Inflation is often blamed on the volume of money - the ‘Money Supply’. That’s a big theme in that book “The Great Wave” that I’m reading. And in those plumbing models from 20th century economics. Money supply is more than just cash, depending on your definition, it includes a bunch of I.O.U.s in transit - checks in the mail, but also ‘corporate paper’ and some other financial instruments you and I will probably never encounter in real life. Anything that increases the supply of this definition of money creates a bidding war on anything hard cash can be traded for, and that causes inflation. The only problem with that is we tend only to notice inflation on everyday items. If some complicated theory is used to price financial instruments, the rising prices on things like stocks, bonds, or Collateralized Debt Obligations are either some indication of economic health, or just another place to stash big stacks of money that don’t raise the price of bread, milk, gasoline and washing machines. Bubbles can happen in anything from Internet start-ups to real estate, and the general effect there is once again to prevent all that money from bidding up the price of consumer products.
From “The Great Wave”, I learned that inflation doesn’t affect all products the same way. In historical periods of inflation (the very Great Waves Fischer is referring to), prices on raw commodities go up faster than manufactured goods: Food and fuel that even the poor must consume vs. Fancy goods that only the wealthy would buy anyway.
Many governments have tried to print their way out of a budget crisis, and that makes everything worse. Just look at Argentina, or Weimar Germany… Inflation erodes the value of the cash you’re holding. It punishes the creditor because the money is worth less when they get it back… Enter the discount rate. Let’s jigger it so the debtor has to pay back a little more the longer they wait to do it. Whatever the payment schedule, we can tack on 10% to what’s left unpaid.
Now it’s investing time. I’ll have to measure my ROI against inflation: I’ll want a higher percentage than the inflation that I can expect over the life of the investment - If I stuff the money in my mattress, it’s losing value, so I am virtually forced to invest it in something. There is even some risk to the mattress strategy - maybe the house burns down. Within a certain range, investing is stimulated. Outside of that range, not so much… During deflation, that mattress strategy starts looking pretty good. During deflation, the value of the money you hold is going up, so why would you loan it out to anybody? On the other hand, if inflation gets too high, you’ll have some trouble finding a high enough ROI. Demand all the profits you want, but will any venture be able to provide them?
Did you figure out what the discount rate should be yet?
Then we should add in the ‘risk premium’: If the investment is risky, the discount rate should be higher. The investor should get something extra back, since he might not get anything at all. Paying that back can be tricky, so the expectation of a high profit goes up too.
We’re back to the beginning now: It’s not the good ideas that will win, but the profitable ideas. One school of thought holds that the profitable is the good. But since high profits are often the cover for some negative externality, maybe the ideas attached to them are not so good.
Have I Rambled Too Far?
What is altruism, after all? If we want to give something away, where is a good place to do the giving? Should we give a boost to the profit extractors, or the good ideas that won’t profit left to themselves?
At Wikipedia I read: “For an investment to be worthwhile, the expected return on capital must be greater than the cost of capital.”
Can you refine your definition of “worthwhile”? Isn’t it also worthwhile to achieve a desired goal, even if you should lose some money in the process? Isn’t that a vehicle for altruism? Don’t governments generally engage in that type of behavior to provide for the society in general? By losing money on an investment, you pass along wealth to some effect: But be careful when you do - It might improve life for the masses, or it might ‘line some billionaire’s pocket’.
Posted in economics, school | no comments | no trackbacksPosted by Evan Bittner
Wed, 29 Oct 2008 13:28:00 GMT
It is very cold in my apartment, for reasons that I do not understand. Only a few weeks ago, workmen came to test the radiators - it was a success. The radiators proved that they could get hot when it was not necessary for them to be hot. Today they need to be hot and they aren’t. I have exercised the “stay in bed” option, after trying out the “walk around in slippers”, and the “drink hot liquids” options. It’s like I’m living in the woods or something.
Look on the bright side, though: I like gloomy fall weather. It threatened rain all day yesterday, then finally delivered. Today I assumed from the weather maps I saw that a cold front would pass by and the sky would clear. So far it has not happened. I thought heavy wind usually drove away the clouds (notably not true in a hurricane - but is that usual?).
I don’t talk much about sports here - mainly because I don’t care - but, last night was potentially the closing game of the World Series, and my roommate Phil invited me to come out and watch part of it on the big screen TV at the Reef… So we braved the cold drizzle to have a pint and watch some baseball. Phil is rooting for the Phillies, and when we get into a conversation about it, I occasionally introduce myself to people as Ray. (Some of you won’t get that joke, but I can assume these people will - just tailoring my performance to the audience…)
Maybe I should bite the bullet and get up - take a hot shower, put on several layers of clothing (maybe a coat, too)… I suppose I should go shopping - there’s an errand I need to run for my sister - and then it’s back to the books: I’m brushing up on my Windows admin skills with a skim through the debugging book and a couple other security and programming tomes. The blog won’t write itself (lazy blog! the nerve…), and I’ve got several economics questions I’ve been meaning to explore lately, not to mention all those photographs to sift through and process.
Posted in ontology, bar-scene | 1 comment | no trackbacksPosted by Evan Bittner
Tue, 28 Oct 2008 17:09:00 GMT
Aside from the obvious adding of more photos… Wait: Adding more photos is the problem.
Vanessa remarked “Finally some organization for the photos…”, but I don’t see that at all. I see my folder of ~3500 photos, and I don’t think of organization. But, there are an astronomical number of different ways such a collection could be organized. I won’t consider them all, it’s a waste of time.
I’ve also been looking at a lot of photographer’s sites on the web for inspiration - both in the taking of photographs and in the presentation. A lot of these sites are flash-heavy, which is always a bit discouraging to me. If you’ve got the resources, then hey - knock yourself out - but, that kind of excitement is probably just going to overheat my computer.
This is one of my favorites so far: Zeynep Öztayinci - I’m a fan of the print textures there in particular, whereas I might expect to find them annoying in other images.
I wouldn’t look for such a total solution, since I’m not only a photographer - but it might not be so bad under a different domain name to call more attention the photos specifically.
XML
Although I abandoned an attempt at using XML the first time around, I can see it out there on the horizon, beckoning me. And, this is why: Hierarchy, plain and simple. There are going to be themed sets. As I add more photos, I am going to benefit from having a sensible framework.
The XML option serves two masters well: The Interface and the Database. What you see today on the gallery page was simply an expedient. I simply haven’t prepared very many photos yet for that format. I need a system to annotate the photos, perhaps with category tags - that suggests a database. I’m tired of naming the image files, but I don’t want to leave them with the original filenames the camera assigns - that also suggests a database.
I knew why I wanted to index the pictures in an XML file - because I can write scripts to dump the database to an XML file, and with a small collection I can write the file by hand as I pin down the finer points of the design. Unfortunately, the Javascript code to read the little file I wrote wasn’t working - and I couldn’t see why not.
So the current direction is to rewrite what I have and pin down that XML format. Books on my shelf like “Document Design” or “Service Oriented Architecture” might help. We’ll see…
Posted in web-craft, photography, databases | no comments | no trackbacksPosted by Evan Bittner
Sun, 26 Oct 2008 23:19:00 GMT
Among the other books I am reading right now, I started re-reading David Hackett Fischer’s “The Great Wave: Price Revolutions and the Rhythm of History”. I wanted to consult it after reading some of the Floyd Norris Blog at the New York Times this afternoon. I read “Great Wave” a couple years ago, and I suppose I am instinctively looking for background material in making sense of the current economic situation. Here’s a little gem from the introduction:
“The economic consequences of decelerating population growth are[:] slowing demand and downward pressure on prices throughout the world, which lead in turn to severe financial crisis in economies that were organized on expectations of very rapid growth.”
This cuts right to the heart of the matter: ”expectations of very rapid growth”. If we are having trouble because of our expectations… Is there anything we can do?!?!
Posted in books, economics | no comments | no trackbacksPosted by Evan Bittner
Sun, 26 Oct 2008 02:45:00 GMT
I spent part of the day putting together a new format for my photo gallery.
I went looking to crib some slideshow javascript code, but I wasn’t happy with anything I found. After a while it just seemed like I was wasting a perfectly good opportunity to reinvent my own wheel by spending all day reading about wheel theory.
First, I had to start a collection of photos in a medium-sized format. That was fun: I recorded some macros to resize and matte portrait and landscape aspects to a square. Choosing from among thousands of my photographs was not as easy. That will be the continuing struggle.
Next, with a few photos prepared, I went to work on stylesheets: A page title banner, a container for the current photo, and left & right navigation buttons. I tweaked the positions until I thought it looked good. Then, it was back to photoshop to craft some images for the banner and navigation. Every so often, I would make a small change that would wreck everything, and sometimes it was a minor keystroke error - like “i” for “l”, which is a bit hard to distinguish in the screen font I’m using.
Then it was on to the Javascript. If there were one way to do it, I’d be in luck, but as the design took shape in my head (what, did you think I planned it out in advance? such a small thing? well - you’re right - I should have), I kept contradicting myself and combining incompatible strategies. Every great new idea meant backtracking to redo much of what I had completed… only do discover that my new idea didn’t work. It almost sounds like the Structure of Scientific Revolutions. I would commit myself to an idea until it proved absurd, then finally admit defeat and start working on a different idea.
The data is part of the problem: Somewhere in the middle of the process, I tried rolling my own XML file and writing and AJAX call into the Javascript, but I lost control over the ability to verify what I was doing - in other words, I would be flying blind. When it didn’t work, I didn’t have much recourse to debug the thing… So, I was back to storing the filenames and captions in an Array. This could still be pulled out into a separate file: It’s always nice to tease these things apart for editing - but this particular strength becomes something of a weakness when you need to do a lot of cross referencing among associated files.
Well, I think the results look pretty good. Any changes I make to it now can be little cosmetic stylesheet alterations. The best part about a slideshow is that not all the photos must be loaded immediately with the page. The size of the page is minuscule, and each photo is of modest size.
Now it’s back to preparing some good photos. From out of about four thousand. Don’t worry: most of those are duds.
Posted in photography, web-craft | 2 comments | no trackbacksPosted by Evan Bittner
Wed, 22 Oct 2008 23:00:00 GMT
I’m a voter in a democracy. Don’t be fooled by my constant whining - I take that role very seriously.
But, inexplicably, I’ve been growing extremely weary of the coverage of the upcoming presidential election in my affluent little nation. I’m getting mixed signals about how we’re doing, and I bet you are too. Unless you’ve somehow managed to ignore some of the signals. We’re one of the richest nations of any respectable size (Hi, Luxembourg!), but it may be just a handful of billionaires separating us from mid-list obscurity (Check out Argentina, for instance).
I watched all of the presidential debates, and I have started to suspect that we might be talking about the wrong things. This entire process will yield no insights if we are.
Reading Jim Kunstler this week, and even as far as the peanut-gallery comments - sorry if the very title of his blog is an obscenity, but the writing speaks for itself - I ran into one of my old favorite rebuttals:
Kunstler starts by criticizing the $700 billion bailout, moves to suggesting that we “reorganize our society and economy at a lower level of energy use (and probably a lower scale of governance, too), but then ends with an endorsement of Obama without mentioning that Obama voted for the bailout and is for centralizing power, not localization! Obama is for offshore drilling, not conservation; Obama is in favor of military interventions, not non-interventionism; Obama is for free trade, not protectionism. Kunstler is too smart not to realize that Obama stands on the opposite side of every issue from him, I can only surmise that Kunstler has been dazzled by the Obama’s empty platitudes, oratory skills, and rhetoric like everyone else on the Left, or is so blinded by hatred for Bush that he is willing to support someone who holds opposing positions on every issue. - Posted by: Empedocles
I suddenly realized why this line of argument is a red herring.
Perhaps we’re asking the wrong questions.
The political debate carried on by the media and presented in gatherings of the faithful is a farce. My recent experience of participating in the farce of a job that would continue to exist if only everyone could pretend that the business would survive taught me an important lesson about the short term and the long term. You say and do a lot of things that you don’t agree with because it is only through survival that you can carry out your plans for the future. Neither of these guys feel the slightest pressure to say what they will actually do, because that is essentially unknowable. Not just unknown, mind you. They will have to be like jazz musicians, or even stranger still.
In a time of uncertainty, the rules of the game go flying out the window. The people will inevitably concern themselves with the wrong problems, focusing on what will soon become irrelevant and ignoring the dangers ahead. I wonder what the people who complain about $4 gasoline will say when it cannot be had at any price. There were some days at the bookstore when I spent long hours on troubleshooting the electronic order process, sitting on hold with the supplier, retrying for order confirmation reports on books that I didn’t know would arrive on the doorstep of abandoned store. Knowing all, I would have worried about other things. Not knowing all, I had to make those calls and pretend everything was going to be okay. Now, I even read that some people locked in contracts on winter heating oil to avoid further a further rise in price. Prices fell instead. This game is played all day every day, but most people, most days are spared the drama.
To argue personalities over policies might actually be a good idea, after all: No one knows what damage the sound policies of today could do in the near future if the rules of the game change. Commitments to an ideal might become serious liabilities. The more voters call for concrete policy statements, the less chance we have to know about a candidate’s flexibility and resourcefulness. We should be looking for a style of leadership that recognizes the uncertainty of the future and exhibits a record of dealing creatively with new situations. We will need both the liberty to try speculative solutions and adequate protection for those who fail in the attempt.
With a fixed problem, you want one best solution. And, you want a concerted effort to pursue that solution, damn the torpedoes. But with impending shifts in the entire problem space, you want continual experimentation - trial and error. And, you want the widest possible variation of solutions to be evaluated.
So when Empedocles up there asserts that Mr. Obama’s positions run counter to Mr. Kunstler’s, I don’t believe a word of it. We are so busy nit-picking the particulars of the platform that we fail to notice the cliff we are about to drive off… Or, in a less dramatic fashion: I’m less interested in the change Obama keeps talking about because I am more interested in how he will respond to the changes coming which none of us has the power to stop. Whatever they are.
On that basis, I almost never take a Republican seriously.
And, we normally get the leaders we deserve anyway. If they can see further than us, we’re happy to burn them at the stake for being witches.
Posted in politics | no comments | no trackbacksPosted by Evan Bittner
Tue, 21 Oct 2008 18:04:00 GMT
Posted in DC-roaming, photos | no comments | no trackbacksPosted by Evan Bittner
Tue, 21 Oct 2008 03:47:00 GMT
I was once very happy with Typo, the program that this blog runs on. Now, I’m not so sure. It installed nicely, I loaded a design template I liked from their menu, and daily operations are straightforward… I even teased apart the template and made some modifications.
Typo is written in Ruby on Rails. It’s not plain old Ruby - it’s Ruby with a whole lot of predefined extras. I heard it was supposed to be powerful and easy. I’ll admit that it’s powerful. When I first went to the bookstore to look at Ruby books, they practically all covered Ruby on Rails. And when I looked inside the books, the code samples were complete gibberish. It seemed like a lot of overhead. We’re no longer talking about a little handy scripting.
Imagine rock climbing. Looking for hand holds, working your way up inch by inch. That’s learning for you.
But now, imagine trying to climb a wall of polished marble. Hmmm…. You don’t learn much staring at that glossy surface.
Ahem… now, I have what seems to be a very simple change to make. But, I’m feeling… fettered. My ideas run right into that polished marble.
Sidebar
All of these pages have the tools on the right side. Right now that includes categories, my photo, the book basket, hyperlinks, and the monthly archives. This masks a complicated system of ‘widgets’ that I can choose to include. One of these widgets is a block of static text. That’s a bit strange: I thought for sure that I would be able to arrange multiple chunks of static text - It might be nice to shuffle those chunks into the pre-fab widgets.
My idea is to have the ‘book basket’ tie into a book database. Clearly there is a way to do this. But when I look at the page template - which is very abstract, by the way - there is a single line to render that sidebar:
render_component(:controller => 'sidebars/sidebar', :action => 'display_plugins')
Isn’t that just a thing of beauty? this ‘render component’ function expects to see an associative array with a ‘controller’ and a corresponding ‘action’. This is the part that I understand.
The problem is that it’s basically meaningless. I have no idea where any of these associations are defined. The concept is clear, but the implementation is a complete mystery. It probably associates to another embedded ruby page. With yet another function call. Marvelous. I hunt through the server directories and find very little to go on.
When I look at the Typo web site, I don’t see any documentation for the structure. That’s disconcerting. A manual that I can’t read is marginally better than no manual at all.
Posted in web-craft, programming | no comments | no trackbacksPosted by Evan Bittner
Tue, 21 Oct 2008 00:42:00 GMT
Check out “Inspired Reading” on the Goodness Blog.
I asked a group of outstanding graphic designers the following question… Please recommend a book that you have found particularly inspiring or meaningful to your development as a creative person? The one restriction: Please no books on graphic design.
They came up with a few of my favorites on there, but Stella Bugbee chose two of my favorite books: “All Consuming Images” and “Ways Of Seeing”.
How well do these things transfer? I don’t think of myself as primarily a graphic designer - It’s one of my marginal skills, and just one of many interests. It’s something I can’t afford to ignore. Truth be told, a book like “Ways Of Seeing” might violate the restriction - but just barely. The interesting thing about the question is the crossing over from idea to image.
Posted in books | no comments | no trackbacksPosted by Evan Bittner
Mon, 20 Oct 2008 01:35:00 GMT
