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    The “Grand Budapest Hotel” and History

    Posted by Carl from Chicago on 30th March 2014 (All posts by )

    Today I watched the movie “The Grand Budapest Hotel” by Wes Anderson. While the movie was not intended to be an historical record, in some ways a fictionalized representation of life in the 1930′s and early 1940′s is a better way to humanize the elements of the conflict that can be lost broader sweep of the cataclysmic events known to all. The movie also works to include the postwar elements and even the post-communist years into a long a complicated narrative.

    After the movie was done I started explaining how I saw the movie to fellow movie-goers and, to them, I almost seemed like the narrator that the movie didn’t include. I just overlaid my own understanding of the participants in that era and, since it is fiction, my own interpretation is likely as sound as anyone else’s.

    I will try to limit the “spoilers” in this post and recommend that anyone interested in Zweig (to whom the movie was dedicated) and / or that era in history go to see the movie. You have to be a fan of the Wes Anderson style of movies and his set pieces are clearly not supposed to be realistic but they are tools for great visual cues and inspired situations.

    The protagonist in the movie, Ray Fiennes, plays a concierge for a major hotel in the capital city of a declining empire in the 1930′s as war time approaches. He mainly seduces older women but also is open to other sorts of encounters with men. Ray is plainly an intellectual and stickler for protocol and process in an era where that is reaching the end of the line. He and his fellow concierges represent the type of society that Zweig would fondly recognize (as does the process-following attorney who runs into serious trouble later).

    The country could be an Austria or Czech type republic that is about to be swallowed by Germany. The borders are in the process of being closed to adjacent countries due to political challenges and incipient war. In an early scene, soldiers in grey accost and check the papers of the concierge and his “lobby boy” (who is non-white and obviously from one of the provinces) on a train and start to beat them up when they are stopped by Edward Norton, who plays an aristocratic officer who recognizes the concierge. To me this officer clearly represented the orderly and (relatively) law abiding German army. He even wrote a note giving safe passage to the lobby boy.

    In the early scenes the soldiers are in Grey and when they stop the train their have early model armored cars. They are not intended to be realistic per se but they seem like vintage 1930 era inspired vehicles.

    During the contesting of the will, a lawyer who also represents the old era brings a process and fairness to the executor’s role (along with a Kafka-esque level of bureaucratic documents) until he meets up with a thug in a black trench coat who clearly represents the evolving SS. That individual, played by Willem Defoe, engages in more and more grotesque crimes throughout the movie and is not impeded by morals or the rule of law. At one point the Edward Norton character orders the civilian Dafoe away from an investigation that Norton is running, but it is clear that Dafoe is not intimidated and is part of the (hyper violent and aggressive) new order.

    Later the protagonist against the concierge is seen to be in a long leather coat and is obviously a civilian leader of the Nazis. They have 2 letter flags and armbands in the SS “style” but the movie does abstract them so as to not be completely blatant. The hotel becomes a barracks for the military regime, and the standards of the staff decline as the hotel is militarized.

    When the train is stopped again later in the film the “death squads” are taunted by the concierge with results that are far less pleasant than the early encounter with Norton. The soldiers in black and the more sinister looking hulking vehicles (which seem to be gun mounted half tracks) are also in black and this clearly represents the SS militarized and not the old nobility-led military.
    Read the rest of this entry »

    Posted in Europe, Film, Germany, History | 4 Comments »

    Your English Major Kids May End Up Serving Tables In Chicago

    Posted by Carl from Chicago on 8th March 2014 (All posts by )

    I live in the River North area of Chicago, which is full of restaurants of every type and description. There is also intense competition among many of the smaller restaurant groups, since apparently some level of scale (5+ or more restaurants) is helpful and these restaurants tend to have very high levels of food quality and service, based on my experience.

    When you interact with the bar staff, hostess, and server you can usually tell if you are working with someone who is “going through the motions” or someone “who is good at their job”. There are many subtle details that are much larger than “getting your order right” – they include knowledge about the food and presentation, recommendations based upon your input, and generally anticipating needs and solving problems without having to be prompted many times.

    Recently I’ve come to the preliminary conclusion that many of the waitresses and servers in these higher end restaurant groups must have gone to college and are well educated. When you talk with them they are very sharp and quick and they seem to have the type of drive or energy that could make them successful in a variety of careers. I would never ask them directly because that’s none of my business and it could embarrass them.

    This article form Bloomberg titled “College Graduates Taking Low Wage Jobs Displace Less Educated” confirms at least my anecdotal impressions here in Chicago.

    She got a job as a hostess at Blackbird, a One Off restaurant, while pursuing a bachelor’s degree in Germanic studies and communications at the University of Illinois at Chicago in 1999. “The formality of classes, papers and grades did lend a hand in where I am today because I had a broader sense of cultures, interactions and interpersonal skills,” said Galban, who is now also a partner at the restaurant Nico Osteria, one of seven Chicago restaurants managed by One Off. Of the company’s more than 700 employees, more than 60 percent hold college degrees or higher, yet fewer than 10 positions require a degree, Galban said.

    The willingness of college educated adults to take on these jobs will likely cause at least three side effects, one of which was the “main” topic of the Bloomberg article I linked to above:

    1. These restaurants will be more competitive than typical restaurants, because the higher educated and higher skilled workers will drive customer satisfaction and drive efficiencies within the food and drink serving processes. As these workers move “up the chain” at the restaurants, they will also offer career paths for other college degree holders as well
    2. Less-skilled workers will have less opportunities because they won’t be able to compete with these individuals. It would be a simple “screen” to give preference to individuals with a degree who apply for jobs, even if it isn’t a requirement of the job. In the past the assumption was that if someone “over-qualified” would work at your restaurant or business, they would leave immediately when a new opportunity arises, but in today’s stagnant economy (especially in Illinois) there don’t seem to be a lot of opportunities for them to “jump to”.
    3. Since the cost of higher education is so high today, parents need to think of how they will feel when their liberal arts (or lackadaisical business) degree holding children are potentially serving them in a restaurant, and if this is worth the vast expense and financial impact of the degree that they are seeking

    Another side effect to consider is that these restaurants are not just randomly seeking out applicants from the pool. Their employees are not only young, they are disproportionally above-average looking. Perhaps if you aren’t college educated you can make up for it in attractiveness.

    Cross posted at LITGM

    Posted in Business, Chicagoania, Education | 17 Comments »

    In Another Era, She’d Be a Gigantic Star

    Posted by Carl from Chicago on 25th February 2014 (All posts by )

    At the Gene Siskel Film Center in Chicago they have a lot of great films. In addition to interesting and artistic films, I also enjoy the fact that they have very few previews and no commercials as well as the fact that you can buy a beer while you are watching a movie.

    Bettie Page Reveals All is a documentary about the iconic fashion / fetish model Bettie Page. For me, the most interesting facet of the movie was not discussed at all; what would have happened had Bettie Page been a modern celebrity instead of one who retired from public life in the late 1950s.

    When Bettie Page stopped doing photo shoots, she simply fell off the face of the earth. In those days it was easy to hide; records weren’t online, the web doesn’t provide a central place for people to (inadvertently) pool information, and it doesn’t take an instant to upload a stalker photo to twitter. She never provided any other photos after her shoots, so that’s how the world knows her today. As George said in Seinfeld, she “left on a high note”.

    Bettie Page, however, had actual skills and intelligence. In the documentary they showed her high school transcript and she barely missed being the valedictorian of her high school class which would have given her a college scholarship. Unlike modern “celebrities” who became famous solely due to a “s*x tape”, Bettie Page designed and sewed many of her own costumes. She also had a lot of personality and took control of the photo shoots and could (sort of) act. Compared to 99% of the “celebrities” today, she had talent.

    Alas, like many of the modern celebrities we wouldn’t name her because we don’t want the traffic, she was bi-polar and ended up spending several years in a mental institution after she stabbed her landlord in a psychotic episode. In the end her story had a semi-happy ending because Hugh Hefner found her a lawyer who got her royalties for all the various things being made with her iconic image on it so that she at least had some money in her retirement years.

    Cross posted at LITGM

    Posted in Biography | 6 Comments »

    Pollution In India

    Posted by Carl from Chicago on 26th January 2014 (All posts by )

    The NY Times recently had an article about the high levels of pollution in India’s capital city, Delhi.

    Beijing’s air pollution has reached such toxic levels recently that the Chinese government is finally acknowledging the problem – and acting on it. But in New Delhi on Thursday, air pollution levels far exceeded those in Beijing, only without any government acknowledgement or action.

    When I was in India in late 2012 I too was overwhelmed and amazed by the level of smog and pollution in the capital. When you blew your nose, particulate matter came out in your snot. This photo taken below is out the window of our tour bus and you could not see large office buildings along the roadside a few hundred feet away.

    The tuk-tuk in the photo (it is a three wheeled semi-motorcycle used as a taxi) is green and yellow because those are the official colors of vehicles using CNG, designed to reduce pollution, which are also used for city buses. Unfortunately the streets are clogged with traditional gas powered vehicles and myriad ancient looking diesel trucks which more than make up the difference.
    Read the rest of this entry »

    Posted in China, Economics & Finance, Energy & Power Generation, Environment, India | 7 Comments »

    NY Times Admits Illinois Gerrymandering

    Posted by Carl from Chicago on 26th January 2014 (All posts by )

    The NY Times today had an article called “Don’t Blame the Maps” which discusses the fact that, even though the Democrats won the popular vote, the Republicans still won the majority of votes in the House of Representatives. For most Democrats, this majority is viewed as an artifact of Republican gerrymandering, and the article points out that this isn’t true. As someone who lives in Illinois, a state that works hard to saddle the Republicans with no voice in their one-party rule, it is nice to see that “ensuring my vote doesn’t count” is mentioned, even in passing.

    But keep in mind that Democrats play this came as well. For example, by artfully dividing up Chicago into pie-sliced districts extending from Lake Michigan into the suburbs, the Illinois Democrats have done better for themselves than the outcome of our nonpartisan solutions.

    Here is a post I wrote about the fifth district of Illinois, my district, and a contender for the most Gerrymandered district in the entire country. And our representative, a man so lax in his duties that he couldn’t even be bothered to vote to impeach Blagojevich.

    Cross posted at LITGM

    Posted in Illinois Politics | 7 Comments »

    San Francisco and a Sneaky Win for the Red

    Posted by Carl from Chicago on 25th January 2014 (All posts by )

    In San Francisco recently there has been a minor hubub about the buses that ferry technology workers from San Francisco (where they live) to Silicon Valley (where they work). “Activists” have been blocking the city bus lanes where the technology companies pick up workers, and the city of San Francisco recently voted to charge the buses $1 for each time they stop in the bus lanes to pick up passengers, per this article. However, the “real” challenge isn’t with the buses, but the impact of Google, Facebook and other technology companies in the valley that are contributing to a rapid gentrification of the entire city

    But while logistical details of the pilot program were the reason for having the hearing, they also had nothing to do with it. For many residents, the high-ceilinged room at City Hall was a forum for airing much bigger grievances about inequality, for articulating angst against an industry attracting bands of well-paid workers to town while long-term residents are losing their homes. “These companies are filthy rich,” said a resident born in San Francisco. “We need to squeeze them for everything they’re worth.” Some speakers wanted the buses to be banned and for companies to take the money spent on shuttles and funnel it into the city’s transportation budget — advice the committee approving the proposal didn’t find too compelling.

    A similar difference in approach played out at the protest that morning. While some activists made careful arguments about the tornado of wealth, growth and housing shortages that has thrown the city into an affordability crisis, others held a giant sign with a much less nuanced message: “F*** off Google.”

    This thread crystalizes two key threads that I’ve noticed in my visits to California for work and for pleasure (Dan and I have been there a couple of times to run the Presidio 10) and I often travel to the valley to visit various companies as part of my job. The first item is that San Francisco has been completely remade, from top to bottom, and there are almost no “bad” neighborhoods left in the entire city. I’ve walked through most of the city or taken the streetcars, or driven, and since the 2008 bust the entire city has been part of an enormous revitalization as wealthy tech workers and related professionals have bought up property in the city. There still are a bunch of drunks in the Tenderloin, aggressive panhandlers everywhere, and some projects and worse neighborhoods in the corners of the city, but by and large it has been completely upgraded.

    The second thread is that the workers in Silicon Valley are so completely opposite of these “activists” that it is difficult to know how to begin the comparison. At all of the companies I’ve visited the professionals are engaged in their work and have a very “capitalistic” view of being the best and beating the competition. While California is a completely “blue” state on the map, these technology professionals couldn’t be more “red” on the issues of free markets, access to capital, and the nature of the world-wide competition that they face (I don’t know about social issues because we’d never discuss that sort of thing). These firms leverage overseas workers without a second thought, and ruthlessly prune inefficient parts of their organization to focus on their core differentiators.

    While the world was focused elsewhere San Francisco transformed into a post-industrial city full of aggressive technology workers and professionals. Due to some remaining elements of rent control there are still some of the characteristic “activists” milling around but the relentless and unstoppable force of high property values will find solutions and will eventually demolish and buy out their remaining haunts until it is just the ruthless face of the post industrial economy that can afford to live in the city.

    The “activists” will end up packing their belongings and heading over to Oakland or somewhere else where the rents are affordable and they can pick up their protests there. Unfortunately for them San Francisco’s compact size, beauty, and absence of large scale government subsidized housing will drive them completely out of the city. The college students will likely pick up some of the protests but since they don’t really vote or build a substantial power base up the wealthy firms will soon control local government and then policy and reality will align.

    If you really want to look at long term opportunities I’d recommend property in Oakland. Oakland has a great location, it just needs to be terraformed via gentrification and rising property taxes until every activist and poor person is driven out, just like it is occurring today in San Francisco. Maybe this is a 20-30 year vision, but it will happen.

    Cross posted at LITGM

    Posted in Big Government, Economics & Finance, Tech, Transportation | 24 Comments »

    Why The Post Office Is Doomed

    Posted by Carl from Chicago on 20th January 2014 (All posts by )

    The United States Postal Service (USPS) is in bad financial shape. The service is currently losing money and is unable to pay some required payments to the government for employee retirement benefits. While the USPS has retained its first class mail monopoly, it sends only a small percentage the ecommerce packages that are the backbone of the physical internet economy.

    The real failure of the postal service, however, is encapsulated in the photo above. In our River North neighborhood, where the population density is high (local residents in high rise condominiums plus innumerable tourists) and the value of real estate is high, too, there is one institution that you can count on to not shovel their sidewalk or take care of their property. The US Postal Service.

    The employees of the USPS are unionized and likely no one has the job of shoveling the sidewalk, or it isn’t in their job description. Thus it isn’t shoveled, and you need to trudge through it which becomes treacherous as the snow melts and re-freezes. Since many of the people who actually might want to use the postal service in this area are elderly, the dangerous sidewalks are even harder to defend.

    They also used to have two mailboxes in the “drive up” section where you can pull your car up to the curb in front of the River North post office. Recently when I attempted to mail Christmas cards (we don’t like to leave them with the mailman in our condominium building because we’ve heard horror stories) at the post office, I couldn’t stuff them into the mailbox, because they reduced capacity down to a single mailbox. There were a few other potential customers milling around fuming as well, since the outdoor mailbox had apparently been jammed beyond capacity for some time.
    Read the rest of this entry »

    Posted in Big Government, Business, Chicagoania, Economics & Finance | 25 Comments »

    Divvy Bikes and Logistics

    Posted by Carl from Chicago on 26th December 2013 (All posts by )

    Divvy bikes came to Chicago this year towards the end of the summer and they seem to be a big hit. We see people riding Divvy bikes all the time and they have a distinctive “flash” light on the front (like a strobe) that is visible from far away, even from our condominium high up over River North.

    I often walk near the train station and I noticed the Divvy van loading up bikes when the obvious hit me; Divvy bikes came from all over the city and ended up near the train station. These vans were redistributing the bikes back to other stations so that the next days’ rush hour could repeat the process.

    The stations seem to have a solar powered panel; they should connect each of the bikes to a sensor and then broadcast to a central station so that they can map out bike usage in regular intervals and use this information to improve their bike distribution algorithm. I assume that they can also make some stations larger than others; this way you could collect many bikes downtown and then redistribute them to stations that they came from (presumably on the north side) during the day. Here is an article I found about the Divvy “Rebalancers“.

    Perhaps some day they could alter pricing in some sort of “congestion” model to charge people more who drop bikes off at popular stations and charge people less to ride those same bikes in the opposite direction to less popular stations. This could supplement the “rebalancers” with market forces. Grist for an MBA case study perhaps?
    Read the rest of this entry »

    Posted in Chicagoania, Economics & Finance | 4 Comments »

    Happy Holidays

    Posted by Carl from Chicago on 26th December 2013 (All posts by )

    Happy Holidays from Chicago! And I want to give a special thanks for the writers of America 3.0, who are taking time out from their busy lives and mercantilistic duties in order to try to bring a positive set of recommendations for the future.

    Posted in America 3.0, Chicagoania | 2 Comments »

    ZIRP Embodied

    Posted by Carl from Chicago on 15th December 2013 (All posts by )

    ZIRP or “Zero Interest Rate Policy” has been in effect in the USA since late 2008. From that point forward, the effective interest received on money from CD’s, banks, and non-risk bearing debt is very low, especially when taxation is taken into consideration.

    Recently I was standing at an ATM when I saw this receipt casually left on the ground. It showed over $300,000 left in a low or non interest bearing account. To me, this embodies how ZIRP has turned the world on its head.

    When I was growing up, inflation was high and interest rates were high, too. I distinctly remember my grandfather having an argument with someone else when he said that interest rates would never go below 10% again (they were nearly 20% at the time). If you had any money, you had to put it to work to get the benefit of “compounding interest” which is basically interest earned on interest, which would make your assets grow quickly. In parallel, of course, inflation was making everything cost more, so you were probably treading water, but that is a different issue entirely.

    In the age of ZIRP, there is no point instructing anyone about the advantages of compounding interest, because the effects are too small to be believed. In the portfolios I run for my nieces and nephews, they receive ZERO CENTS most months on the cash held in their account, and the cumulative year end totals are too small to receive an interest 1099 from the IRS. The SEC fee, which amounts to a few pennies per trade, actually is a larger cost, so I am just likely to ignore both elements.
    Read the rest of this entry »

    Posted in Big Government, Business, Economics & Finance | 16 Comments »

    My Review of America 3.0

    Posted by Carl from Chicago on 1st December 2013 (All posts by )

    First of all I want to thank Michael Lotus and James Bennett for taking the time and energy to write and promote America 3.0. It cannot be underestimated how much work this book took to research, write and publish and these 2 gentlemen (I really only know Mr. Lotus, but I am making assumptions on Mr. Bennett) are very busy individuals who have to earn a living for themselves and their families.

    Throughout, they made a giant effort to make the book positive, upbeat and solutions-focused. This approach is radically different than the “conspiracy theory” or “single issue” approach that mars most books of this genre (although there really aren’t a lot of books that spring to mind when I think of likely comparisons). Even though the book would generally be classified as politically on the “right” by the general public, the authors go out of their way to not characterize their opponents as “bad people” and show the fundamental (positive) motivations that drive some of their actions, even if the results ended up being disastrous or misguided.

    As a well-informed reader (by the standards of the world at large, if not always by the extremely high standards of Chicago Boyz, and often when I read Trent Telenko’s articles on military history I feel rather ignorant indeed) there were many areas of the book that were very new to me, increasing my interest in the topics that they raised. Given my focus on business, economics, energy, taxation, and military history, I really haven’t thought much at all about the role of the family and how it shaped America’s growth, but that topic was the seminal driver for the book. It felt very true and aligned with my experience, that the nuclear family and the ability of sons and daughters to marry off and “find their own way” contributed greatly to our successful outcomes. In the course of my business and travels I see the facts arrayed differently, and I can also see how individuals that I know from these countries have adjusted (and often embraced) this new, freedom-seeking and independent course of living.

    The idea that we can reform our institutions and have the Federal government take over tasks that it logically should hold while devolving other roles to state and local government makes a lot of sense. They also discuss the “great haircut”, a single event to reform our finances across all the institutions simultaneously, as a logical approach, along with new barriers to ensure that it doesn’t re-occur.

    I will think about the areas of my expertise and how they can be applied to concepts similar to America 3.0 in the future. There is a lot of de-centralization coming with energy and services and these can be aligned to the capabilities and responsibilities of our citizens, rather than being a top-down phenomenon in the process of disintegrating, which is the current trajectory.

    Thanks again to the authors for an excellent book, and they are a credit to this site and what the founders have attempted to portray, which is a positive, forward look at the issues that we face and how we can solve them with political, economic and personal freedoms.

    Cross posted at LITGM

    Posted in America 3.0 | 2 Comments »

    The Minimum Wage Debate and Tax Incentives

    Posted by Carl from Chicago on 30th November 2013 (All posts by )

    Originally when I started over at Chicago Boyz I used to write regularly about tax policy. I haven’t written as much lately on that topic because the news has been completely dispiriting… at every turn it seems that the Federal, State and Local governments have taken positions to make the system more complex, confusing, and dysfunctional.

    The goal of a tax policy should be to:
    1. Achieve the revenue goals that they set out to meet
    2. Do so in a way that has causes the least amount of distortions to the economy

    Recently the idea of “fixing” our tax policies and incentives, for me at least, is aligned with recent discussions on the idea of raising the minimum wage. The minimum wage is $7.25 / hour, although this varies with state and local laws as summarized here. A suburb in Seattle, near the Seattle-Tacoma airport (Sea-Tac), recently passed an ordinance to raise the minimum wage to $15 / hour. This ordinance is a bit more clever than most, since the airport is unlikely to close or take significant actions due to the immense capital costs and constraints associated with doing so, and has a strong public element (politicians can just try to pass the costs on to air travelers).

    These same discussions come up in Chicago, as fast food workers also have had some (small) demonstrations to try to raise the minimum wage to $15 / hour. While their campaign has sputtered out, it will likely re-surface and be championed by our governor.

    The obvious difficulty with raising the minimum wage is that employers are not sitting ducks. There are many low wage workers in River North, for instance, working in bars, restaurants, cleaning services, and in various security related occupations (virtually every building has a set of doormen). If you doubled the minimum wage, for instance, all of these businesses and institutions would immediately embark on a host of labor saving initiatives and automation efforts. I am not an expert in these sorts of automation experts but can imagine people being replaced by computers, call centers handling service, and moving to self-service for customers in other instances. It is highly unlikely that they would just attempt to pass on the price increases and keep the same level of staffing; that would be economic suicide, especially with their competitors scrambling to reduce their labor expenses. Efforts that could not be automated would rise in price, which would likewise discourage consumption, until an equilibrium was reached.
    Read the rest of this entry »

    Posted in Big Government, Taxes | 9 Comments »

    The Olympics Are In Bed With the Devil

    Posted by Carl from Chicago on 25th November 2013 (All posts by )

    A recent documentary on the 2014 Winter Olympics in Sochi, Russia is titled “Putin’s Games” and is summarized here. The movie has not been released yet but I intend to see it as soon as it becomes available. According to the web, the movie discusses the 1) bribes that Russia paid to win the games 2) the vast corruption occurring during construction 3) other ill effects of citing siting the games in a sub-tropical climate.

    The documentary interviews a billionaire Russian who fled to the UK after refusing to pay immense bribes during construction:

    “We received explicit threats: ‘You’ll be soaked with blood; drowned in blood,’” he said. “It was very straightforward. We know the history. Russia generally does not care much for human life.”

    As far as bribing Olympic officials to beat Austria in order to get the games originally…

    The money thrown around by the Kremlin to ensure that Russia was awarded the games is also revealed in the film. Karl Schranz, a former Austrian Olympic skiing champion and personal adviser to Mr Putin on bringing the Olympics to Sochi, talks about the big-money lobbying that went into the games – cash that Leonid Tyagetschev, the former head of Russia’s Olympic Committee, said was “practically unlimited.” The money was used to lobby for Sochi and against Salzburg, which was also in the running before, in 2007, the International Olympic Committee to give the games to Russia.

    The Olympic Committees are against the release of this documentary and per the article:

    Such was the displeasure of the International Olympic Committee when it heard of it that it refused to allow the use of the word “Olympic” in the title, or the use of any archived Olympic footage. They also wrote accusing the producers of making a “politically motivated” hatchet-job.

    After rewarding the games to serial human rights violators in China and Russia, how can the Olympics even pretend to have a shred of credibility? It is astounding that they would call a documentary filmmaker who explains how Putin’s Russia is a hotbed of corruption a “hatchet-job”. What did they think would happen when you chose Russia for the winter Olympics? They need to read the biography of Putin by Judah, since this fiasco was all preordained.

    Cross posted at LITGM

    Posted in Russia, Sports | 9 Comments »

    How A Simple Train System Lays Bare Our Impending Decline

    Posted by Carl from Chicago on 23rd November 2013 (All posts by )

    Recently I was riding on the Metra, the commuter rail system that connects the suburbs to downtown Chicago.  I picked up “On the Bi-Level”, the flyer that Metra management makes available to riders and was browsing through it when I came upon this innocuous sounding statement:

    I certainly will not argue that Metra is without challenges.  Perhaps the biggest challenge, and one that will impact many of our plans, is our needs for more capital money to invest in our system.  We estimate Metra will need about $9.7 billion over the next decade to achieve a state of good repair on the system, and we expect to receive about a fourth of that amount from traditional federal and state sources.  Riders need to understand that fares help us cover our operating costs but have never been a significant source for capital expenses – we must rely on Washington and Springfield for that funding.

    Within the utility community there is a concept called “generation equity”.  This implies that you need to spread the burden of replacement and renovation across the life cycle of users, rather than hitting them all on the first riders, such as in the case of a train line.  On the other hand, you cannot just ignore ongoing capital costs and let the system run into ruin by paying the minimal upkeep costs every year.

    In this article, Metra lays bare the facts that:

    • Fare costs (riders) only “help” them cover their operating costs
    • Funding from other sources (and debt) helps them cover the rest of their operating costs
    • Then they rely on largess from the state or Federal governments for about a fourth of their capital costs
    • And who knows where they are going to get the rest of the funds for capital replacement

    In fact, it would be impossible for Metra to re-build the train lines that they have today in the current regulatory and legal environment.  Permits, lawyers, litigation, politically favored contractors, and a welter of archaic tools and practices would make the costs impossibly high and the deadlines incredibly long.  By “capital” costs, they are generally talking about replacing bridges, stations and sections of existing track rather than “true” expansion, although they do occasionally add some incremental lines or stations.

    It is important to understand that things have gotten more EXPENSIVE but they haven’t gotten BETTER.  The infrastructure that we take for granted might as well have been built by the ancient Egyptians given how herculean the task would be to replace them.  Americans will never see another major dam built in the USA and likely few to no additional incremental nuclear or coal plants in the next 25 years.  Even major transmission lines are going to be few and far between, which will only be built because it is absolutely necessary to get electricity to new population centers.  This is all due to the layers of process and regulations and lawyers that we have overlaid atop the simplest tasks, and you can see the contrast when you go to China and see cities being built overnight. 

    At some point we are either going to need to radically re-structure how we build and pay for things or go to a completely private system where you pay for what you receive in terms of capacity, reliability and performance.  States and cities that make it impossibly expensive to build and expand will inevitably suffer relative to other locations that are freer in terms of rules and regulations, unless (as is likely) the entire US is burdened with Federal regulations that make it impossible to escape this yoke.

    Cross posted at LITGM

    Posted in Big Government, Chicagoania, Economics & Finance | 9 Comments »

    Thoughts from a (Brief) Teaching Experience

    Posted by Carl from Chicago on 16th November 2013 (All posts by )

    Recently there was an interesting article in the NY Times called “How I Helped Teachers Cheat” about an academic ghostwriter.  While I have no experience with ghostwriting, I found the following quote from his article interesting, which I will get back to later in the story:

    In 2004 it was revealed that more than 500 students in a Birmingham, Alabama high school had been urged by teachers or principals to drop out of school before the test, for fear they would bring the school’s test scores down.

    I was a teaching assistant (TA) in graduate school.  This was back in the days of chalk blackboards (we didn’t even have dry-erase boards) and we had just gotten rid of mimeograph paper and gone to regular copies for printing.  At that time, grades were kept in a little book, by hand, and that is how results were calculated.  I was the first TA to try to calculate grades on a computer in my field of study.

    I don’t remember a lot about teaching but I remember the first day pretty clearly.  I was teaching an introductory accounting course that was required for graduation by many schools at my university, and it also held a lot of introductory accounting majors that could be described as highly motivated.  Thus when I stood in front of the group it was a mix of fifth year seniors trying to get this course done so they could escape the university and first semester sophomores taking their first accounting class to get started on their profession.  Since I graduated undergraduate early, I was younger than probably half the students in my class (the fifth year seniors).

    While you could use the word “teaching”, it really was just a Friday TA session and the main work was done in giant lecture halls on Monday and Wednesday by a professor.  We were supposed to go through problems and discussion tied with the course curriculum, and go through problems with the students.

    I had no training whatsoever and little preparation.  Oh well.  I just kind of winged it.  Unlike regular classrooms you don’t have discipline problems or any of that when you are teaching accounting… this wasn’t some sort of “hard knocks” episode.

    There were a few major tests and a project required to calculate the grade.  After the first exam, I looked at my section against the 25 or so other sections (this is a big university) and noticed that the average score of my section was near the bottom.

    Even though there wasn’t any pressure on me to be a good teacher or even to help my students get better, my competitive streak kicked in and I was not happy that my section was low on the list.  So I sat down and looked at the types of students that I really had in my group:

    • first semester accounting sophomores – these students aced everything and were great. Frankly many of them likely knew a lot more about the details of the material than me
    • fifth year general majors, particularly agriculture – these students were a mix but generally on the low end.  They were just trying to get through this class and get out of the university
    • Students who were clearly failing, not attending class, and not trying
    Based on these three groups of students, I devised a strategy to try to improve my section score and move up the rankings.
    • Sophomores – Ignore them.  They were doing well anyways.  They always asked the hardest questions, for example problem #55 (out of 1-55), where all the assumptions were reversed because it was a corner case.  But it turned out that when I answered THEIR hard questions, the rest of the class was completely lost because they didn’t even understand questions 1-10 (the easy ones). Those kids even asked me for more comments on the homework I graded.  If I had enough sophomores like this, I’d cruise to the top of the rankings anyways because they were all self-motivated 
    • Fifth year seniors – Teach them.  The fifth year seniors were people that I saw at the bars around campus and actually could learn if you talked to them.  So I would call on them in class and basically humiliate them a bit.  ”Do you understand this problem?”  A few seconds would prove that they didn’t.  Then I would say “Why don’t you ask a question?”  and after a few sessions of this they would mostly perk up and put a little bit of effort into this.  No one wants to be humiliated by being asked direct questions in front of a class and then heckled
    • Failing students – Get them out.  At the time in order to get funds to stay in school you had to go past the “drop date” and then you’d get your state money.  Apparently it didn’t matter if you were failing or not because they’d just take my class and not drop and be failing.  Whenever we had exams (which apparently they had to sit for?) I would say hello to them loudly in front of the section and ask where they had been in class and everybody laughed because I would start class by calling attendance only on the students that never attended, so people recognized their names.  I don’t know if I succeeded in getting them to drop faster but it was all I could do since they didn’t come to class and apparently didn’t care about failing.  The last power I had left was to call them out

    Based on these (primitive) tactics, my section moved up against all the other sections and by the end of the year we were above average, which is all I ever could have accomplished when you match up 5th year seniors in the agricultural college from actual accounting majors in the prime of their motivation.  That felt good.

    But I could sympathize with the teachers who were trying to get students to drop who weren’t even trying.  I’m sure that there is some book or process somewhere about how everyone can learn and you can reach them through superhuman methods but when you are up there teaching and trying and they aren’t even showing up, that’s frustrating too.  In no way was my tiny TA stipend at risk through poor teaching or poor results, it was just my own competitive nature that was pushing me to actually try to improve the net results of my team.  And that’s the end of my brief (formal) teaching experience.
    Cross posted at LITGM

    Posted in Education | 22 Comments »

    Apparently Illinois Vote Rigging Doesn’t Count… and a Glimmer of Hope From California

    Posted by Carl from Chicago on 16th November 2013 (All posts by )

    Recently I wrote about how the district I live in is perhaps the most gerrymandered district in the entire country.  Great pains have been taken by the Democrats that run Illinois to ensure that my vote can’t count and the legislator that runs our state district doesn’t even have to bother courting voters like me.  Even among Illinois legislators (not exactly the highest quality bunch) my guy is famous for not even voting to impeach Blago.  Literally we have the worst of the worst representing us, but he is effectively immortal since all he has to do is win the Democratic party primary and he’s in, due to basic mathematics and party-line voting.

    While I know writing posts like this is just like shouting into a toilet Rolling Stone recently came out with an article about Red State gerrymandering.  While my district in the article above was in the state legislature, our Illinois US House of Representatives balance has been similarly adjusted to ensure that a 50/50 or so state leans completely blue.  Of course the entire article acts as if this is a Republican phenomenon, when in fact both parties are equal opportunists at this sad game.

    There is a shred of hopefulness in all of this in some electoral advancements coming out of California, of all places.  They have a system where the two top vote getters in the primary battle it out on election day, even if they are from the same party.  In this sort of system, the Democrat or Republican that reaches out to the constituents in the middle from the other party has a shot at beating a stone ideologue that will generally cruise through the party primary (like my state representative).  This solution was “California Proposition 14“.  In parallel, they also have a citizen’s commission to draw districts so that they make more sense rather than be amazing gerrymander constructions.  It is too soon to tell if California’s results will help that much but it seems like a step in the right direction.

    Cross posted at LITGM

    Posted in Chicagoania, Illinois Politics, Politics | 10 Comments »

    Illinois and the Perfect Democrat

    Posted by Carl from Chicago on 3rd November 2013 (All posts by )

    I live in the River North district of Chicago, a vibrant area full of professionals, high rise buildings, and a large service economy.  We are adjacent to the Loop (and many of the people who live here chose this area so that they could walk to work) which employs many of these residents in an internationally competitive group of companies, both public and privately held.

    In my interactions with these residents, few are political, and I would say that most Illinois citizens I’ve met over the year could be considered middle-of-the-road. However, due to factors unique to the state of Illinois, the state is dominated by Democrats who control most of the levers of power at the state, city, county and local levels. As such, a state of mostly moderate individuals is set up, governed, and managed as if it was the most left-leaning state in the country.

    Ken Dunkin is our Illinois State representative for the 5th District, and he helpfully sent me this brochure that outlines his goals and accomplishments as a state legislator. This update provides a great window into the mindset of an Illinois Democrat.

    Ken Dunkin is famous for being the only Illinois legislator to skip Gov Rod Blagojevich’s impeachment hearing, and thus being a de-facto loyalist to the bitter end. It is really hard to add anything more to that sort of fact; even his fellow Democrats finally came to the conclusion that Blago had to go, but not Ken.

    Read the rest of this entry »

    Posted in Chicagoania, Illinois Politics, Politics | 14 Comments »

    New, New Urbanism

    Posted by Carl from Chicago on 2nd November 2013 (All posts by )

    As a long time city of Chicago resident I have seen the immense growth of new buildings and new residents in areas near downtown which previously had been office buildings, warehouses, dilapidated structures, or simply abandoned.  From time to time when I am in an architectural bookstore I glance at books about “new urbanism” or various similar concepts that authors and “urban planners” use to overlay atop the actual growth of a city (or decline, in the case of other parts of Chicago).

    If you are from a smaller town or relatively slow moving US city and haven’t been overseas to see “real” growth somewhere like Hong Kong, China, or India, then Chicago’s growth over the last decade or so that I’ve lived near down is pretty astonishing.  In River North, where I live, literally dozens of high rise buildings > 15+ stories have been built and are filled to the brim with owners and renters.  The entire South Loop has been renovated not only with town homes and large buildings, but huge retail spaces like Target, Costco, and giant movie theaters.  While there were many restaurants in River North when I first moved here, we had to walk far and wide to find even a place open for a decent breakfast; now we have a dozen to choose from within 6-8 blocks.

    Since there are train tracks downtown for the Metra commuters which arrive from suburbs from all directions (except East, where the lake is) and many of these tracks are on ground level, the streets are cut up and there are sidewalks I used to take under viaducts with few people around.  Now, however, immense apartment buildings have popped up (over 40+ stories) and in the morning there is a huge population of well dressed professionals walking along these routes and sidewalks, where previously there was just debris and parking lots.  If I go to work late it is either single women walking dogs or nannies pushing single babies in strollers.

    There must be 50,000+ well heeled urban residents packed into this place, all arriving from somewhere else whether it is a suburb, another state, or another country.  None of them are poor – you can’t be – since rents are in the thousands and move up rapidly, and every new building coming up has more amenities than the competitors in order to attract residents.  The demography is very fluid because many of the condominium owners rent out their units, and then the newer buildings have been built as apartments since the real estate crash of 2008.
    Read the rest of this entry »

    Posted in Chicagoania, Real Estate, Urban Issues | 5 Comments »

    The Replacements and the End of Buying Music

    Posted by Carl from Chicago on 29th October 2013 (All posts by )

    Recently one of my all time favorite bands, The Replacements, got back together and played three shows at Riot Fest.  Of the four original members, one of the Stinson brothers is dead, their replacement guitarist Slim Dunlop has a life threatening disease, and their drummer Chris Mars is a full time artist.  So the last two Replacements, Paul Westerberg and Tommy Stinson, played shows to rapturous reviews by fellow Gen-X’ers.

    I am just kicking myself in the rear that I didn’t go see those shows.  The Chicago show conflicted with a bunch of other things but in hindsight I could have gone off and seen them in Denver (maybe).  Now I am waiting to see if they get back together (or even record some more music) and this time I’ll be sure to go, where ever they play.

    After watching some of the songs on You Tube I went to put some more replacements on my iPod while working out and realized that I only had a few snippets from their albums in my collection.  Back when I first ripped the Replacements CD’s a long time ago I only put a few songs from each CD on my computer (trying to save space) and of course the quality was low, at 64 bit.  I realized that I didn’t even have “Tim”, my favorite album, at all.

    I started looking around on itunes and now I need to buy these songs for a THIRD time.  I had them all on albums, then CD’s, and now I need to buy them AGAIN, on iTunes?  Really?  And all the while I can hear Dan’s voice in my head saying that he doesn’t buy any music anymore, relying on the internet and services like Pandora / Spotify and for me at least, Sirius / XM (I have it in my car and house and started paying a bit more to stream it and play on my “Jambox” speaker through my iPod or iPhone).

    In this case I knew where my old CD’s were… I gave them all (more than a thousand) to my brother, and he was ripping them in some high fidelity manner.  He looked through the stack (they were all out of order because of a flood) and found three CD’s, which I took back, and I will re-rip again and put on my iPod.  After I got home I realized that I didn’t get “Let it Be”, probably my favorite, and I don’t have all the songs on my iPod.  Oh well, I may have to buy a few here and there.

    But how long before I don’t buy any music at all?  It can’t be too long.  I don’t buy too many books anymore, and I probably buy less eBooks than I used to buy of the equivalent hardcover variety.  I am consuming paid media at a fraction of the rate that I used to, and can probably see a day when I get rid of everything (I got rid of all my CD’s a while ago, so these three are the last three in my house).

    Cross posted at Chicago Boyz

    Posted in Music | 7 Comments »

    “Let The Fire Burn” and Police in 1983 and Today

    Posted by Carl from Chicago on 21st October 2013 (All posts by )

    Last night I saw a documentary about the 1985 conflict in Philadelphia against the “Move” organization which featured a shootout and finally a helicopter dropping a bomb on a fortified building and 60+ row houses in a heavily populated city leveled by fire. The documentary was called “Let the Fire Burn” and it was primarily based on archival video from an inquest that the city of Philadelphia had after the sad incident, vintage news footage that was “live” at the time, and videotaped depositions of the survivors.

    One angle that I found intriguing is the relative lack of sophistication of the police in 1985. Prior to the 1985 bomb incident, there was a 1978 incident where “Move” supporters were involved in a firefight with police where a policeman was killed and many others were shot. When police captured one of the “Move” members that surrendered, they beat him up on camera, in what was likely one of the first incidents filmed in this manner (the police were found not guilty). Thus during the 1985 incident, the Philadelphia police were heavily armed and on their highest guard when it came time to attack the “Move” compound.

    “Move” built a bunker on the roof of a row house, apparently out of wood but reinforced with metal, with firing ports to command the street. When the police attacked, they used a water gun from a firetruck, but it wasn’t powerful enough to knock the bunkers off the roof.

    At one point the police ran out of ammunition. During this siege they fired over 10,000 rounds into the house. A local news segment shows a county policeman showing up with a trunk full of ammo that is distributed to the police, in order to replenish their supply.

    After giving up on randomly shooting into the building, and noting that the fire hose wasn’t working, they decided to drop explosives on the roof with a helicopter. The explosives didn’t blow up the bunkers. However, after 15 or so minutes, the building started to catch on fire until finally there were flames shooting ten stories tall (per a local news account). The title of the film “Let the Fire Burn” alluded to the supposed order (disputed by many) to let the fire burn in order to remove that bunker from the roof where the “Move” supporters could have fired on police. In the end, the entire building went up in flames and then 60+ buildings were burned.

    It is interesting to consider how different this could have turned out in 2013. The police likely have many modern war veterans in their ranks who would be accomplished shooters (the modern war brought the sniper back to the fore) and could have likely picked off the “Move” supporters had they shown themselves anywhere without shooting 10,000 rounds to no avail. There are other ways to break into / destroy a fortified location, especially given that the order to storm the “Move” HQ was given in advance and they had time to prepare. The police are full of veterans who have stormed into heavy buildings and cleared them of enemies, basically “street fighting” experts.

    The police accounts depicted in the documentary are often contradictory; no automatic weapons were found in the “Move” HQ and yet it seems that the original shots fired came from automatic weapons, implying that the police may have inadvertently started the shooting war.

    I hope that a situation like this wouldn’t occur nowadays but I am confident that the police have the means to deal with an armed and fortified opponent, or could call in resources that could do this. By comparison the 1985 police in Philadelphia look outmatched by a simple bunker and a few older rifles. To fight them, the Philadelphia police ended up using the oldest of weapons, fire.

    Cross posted at LITGM

    Posted in History | 19 Comments »

    Power and Oil

    Posted by Carl from Chicago on 30th September 2013 (All posts by )

    In the NY Times they had an article on the possible partition of Middle Eastern countries in the wake of the Syrian uprising. It long has been taught that the borders of the Middle East are a “mistake” made by the Western powers when they carved the region up amongst themselves. The unspoken message is that all the “troubles” in the area would have been avoided had the Western powers split the countries up according to tribal, religious or other lines that could have resulted in more cohesive states. Much of this may be true – many of the borders appear arbitrary – and yet lands and territories changed hands many times across the historical record.

    An area of interest to me is Eastern Saudi Arabia, which the NY Times listed (as conjecture) as possibly a separate country. On many dimensions that is logical; the population of that province has a large Shiite composition and this makes it distinct from the rest of Saudi Arabia (which is supposedly 95% Sunni, although figures are not necessarily to be trusted). Historically these Shiites faced heavy discrimination, (data is sketchy and incomplete) as summarized in this wikipedia article:

    They have usually been denounced as heretics, traitors, and non-Muslims. Shias were accused of sabotage, most notably for bombing oil pipelines in 1988. A number of Shias were even executed. In response to Iran’s militancy, the Saudi government collectively punished the Shia community in Saudi Arabia by placing restrictions on their freedoms and marginalizing them economically.Wahabi ulama were given the green light to sanction violence against the Shia. What followed were fatwas passed by the country’s leading cleric, Abdul-Aziz ibn Baz which denounced the Shias as apostates. Another by Adul-Rahman al-Jibrin, a member of the Higher Council of Ulama even sanctioned the killing of Shias. This call was reiterated in Wahabi religious literature as late as 2002.

    While these sorts of oppressive behaviors on the parts of the majority are generally tied to rebellion and are logical for the NY Times to think of as possible separate states, this neglects the key fact that the world’s largest oil field, the Ghawar Field, is located in that province. The idea that the Sunnis in Saudi Arabia would give up their oil, which accounts for 80% of revenues, is incredibly naive. The Saudis would never give up their oil, for it is the sole engine of their economy and standard of living. It isn’t known what they’d do if there was a serious rebellion in the area, but I would have to assume that they would take whatever steps were necessary to curtail it and keep the oil flowing. It should be relatively easy for the Saudi government to accomplish this due to their wealth and strength in numbers.

    One way to do this would be just to hire mercenaries, which is a tool that the (minority) government in Bahrain is using to hold onto power. Bahrain’s situation is trickier since the Sunni government is a minority in this oil-rich country, but the use of force and violence has been enough to keep the rebellion at bay. One tool for the Bahrain government has been to hire Sunni mercenaries:

    For decades, the Bahraini authorities have been recruiting Sunni foreign nationals in the security forces from different countries, including Egypt, Jordan, Syria, Iraq (Ba’athists), Yemen and Pakistan (Baluch) in order to confront any popular movement that usually comes from the Shia majority.

    The idea that governments will give up valuable resources in the name of minority rights is a laughable Western idea. The NY Times map is a non-starter. The wealthy and powerful will not give up the (sole) source of their wealth without a tremendous fight from a determined and powerful enemy.

    Cross posted at LITGM

    Posted in Energy & Power Generation, History, Middle East | 10 Comments »

    Robert Reich Movie “Inequality for All”

    Posted by Carl from Chicago on 28th September 2013 (All posts by )

    I saw the movie “Inequality for All” starring Robert Reich, the former labor secretary for Bill Clinton and a very short guy (he’s 4′ 11″) who is pretty personable and funny. Reich uses his day job as a university professor while teaching a class to illustrate his thoughts on inequality from the movie.

    In the movie he attempts to link:
    - decline in average wages, in “real” terms (adjusted for inflation)
    - growth in the highest wages (the top 1%)
    - with various factors, including globalization, automation, declines in unions, and the financial bubble
    - income inequality with lower marginal tax rates on the rich

    There are certainly some concepts in here than anyone can agree with. It would be good if more people in the USA earned a higher salary, had better educations, and were more productive.

    In the movie he mentions Warren Buffett, who famously pays a lower marginal tax rate than everyone else in his office, which is due to the fact that he receives long term capital gains and dividend income which are taxed at a lower rate. This is grist for the “raise taxes on the wealthy” discussion, as Buffett plays the likable old man. However, what he fails to mention is that Warren Buffett is the very candidate that the ESTATE TAX is designed to catch… rather than nickel and dime him every year on his assets as they rise in value (and cause friction and force him to sell them off to meet the tax bill), the estate tax would be levied on the super rich and it would effectively make up for the lower marginal rate during his lifetime by taxing increases on his wealth at a rate of 40%, for all amounts greater than about $5M. However, Warren Buffett is choosing to “evade” these taxes by setting up trusts and / or giving it away to his favorite causes; if Warren couldn’t avoid his estate tax through these loopholes (the same way you or I can’t avoid the payroll or sales taxes) then 40% of his $60B estate ($24B) would go to the Federal government, to fund the “investments in people” that Robert Reich is so passionate about. Funny that Reich didn’t call that out (didn’t follow his narrative, apparently).

    Another element he fails to mention is the growth in illegal immigration in the USA, and the havoc that this causes with unskilled labor (as they are willing to work for far less). It is funny because two professions he specifically mentions, meat packing and short order cooks, are magnets for immigrants and their arrival is a direct cause for falling wages in these fields. Not surprisingly, Reich didn’t want to alienate a core Democratic group.

    There is a rich “pillow manufacturer” who makes $10M+ / year who also describes how ridiculous it is in his opinion that his marginal rate isn’t higher. That same entrepreneur says that he invests in “funds of funds” and due to this he makes money without creating any jobs. That is quite a statement – what do you think those hedge funds invest in? They invest in commodities, stocks, real estate and debt (I’m assuming). When you are an investor and you provide money for stock and debt you are supporting companies that, in turn, hire staff. I can’t believe that Reich let this comment slide, but since it was what Reich wanted to hear, why interject?

    Read the rest of this entry »

    Posted in Academia, Big Government, Economics & Finance, Taxes | 27 Comments »

    Your “Art” Only Matters Because Our Country is Wealthy

    Posted by Carl from Chicago on 22nd September 2013 (All posts by )

    Historically art in the West exists and has monetary value because our country has wealth and buyers who want to collect it. Recently buyers in China have been on the rise, along with a corresponding value on what “they” would perceive as art (i.e., Ming vases, and a lot of modern Chinese artists, as well). This article describes their growth:

    Chinese spending on art remains robust in 2013. That’s despite a dip in the market last fall and an economic slowdown that recently knocked the Asian nation off its perch as the art world’s biggest spender and back behind the former perennial leader, the United States.

    In a broader sense, there is a question of what drives art, and why some situations with incredible pathos don’t receive the attention they deserve (or much attention at all). For instance there are 1 million children who have been displaced or made into refugees in Syria due to their ongoing civil war. Can you imagine the stories, paintings, movies and television that this story would drive in the West? While we watch “reality” shows about dancing and singing and our “serious” fare covers meth dealers in New Mexico, why aren’t the amazing stories of war (and sometimes redemption, or bitter relapse) grist for “art”?

    As I follow the Congo wars and civil wars, I am also amazed by the dearth of real or fictionalized accounts of either the war itself or its impact on civilians. There is little even though the scale of suffering and conflict is so wide, and the participants so varied.

    For instance, imagine yourself as a writer in Syria or in the Congo. You have all the grist for art all around you. And yet… no one cares, because it doesn’t matter (much) to those that buy and produce art of all types, since they are in the West or part of the growing contingent in Asia.

    It is interesting to me because artists and liberal arts types often view commerce with distaste, and act as if the world would somehow be better if we all dropped our focus on money and attended a play or modern dance or something like that. They believe that there is a “choice” and they can pursue their dreams, even though their dreams are subsidized and provided for by the wealth that is generated by the world of business, and protected by our force of arms, which they also despise.

    Without wealth and military power (or the cover of someone else’s military power, as much of Europe and Asia shield under the US umbrella), art itself is a tiny, meaningless cry in the night. There is no intrinsic “value” in art unless the culture can support and (often) export it. Countries can support their own culture, as France and Italy work hard to do, but this is also tied to their value in the tourism trade and linked to their economic value as “open air museums” since little is actually manufactured or driven from these countries anymore. French literature, which made large impressions in the past (Sartre, etc…) is effectively invisible in the US today, although we’d gladly go visit and tour and drink wine and partake in the fabulous views.

    Another facet of this phenomenon is the growth in “blockbuster” films that are populated with aliens, comic book figures, or supernatural events. These movies sell around the world, while indie-type movies (or even movies with relationships) are relegated to third class citizenship. If it can’t be explained or viewed in a generic manner understandable across cultures, then it isn’t wanted by our major studios. Certainly the Oscars don’t agree with this model, as they continue to hand out awards to movies that 99.999% of the world wide movie population doesn’t see, while ignoring the giant comic-book based movies taking over the screens. The “artists” there are being subsidized by the money-making tent-pole films, although the studios are extremely profit focused and at some point they won’t be be throwing those artists crumbs anymore (after all, they have to pay for expensive mansions and lavish lifestyles and the “cloak” of artistic merit is only worth so much).

    Cross posted at LITGM

    Posted in Arts & Letters, Business, China, Economics & Finance | 7 Comments »

    Chicago Sunset

    Posted by Carl from Chicago on 21st September 2013 (All posts by )

    Recently I attended a rooftop charity event at the “Life Storage” building in River North. I was able to get a photo of the sunset facing west (I rarely get to shoot in that direction).

    River North, the district where I live, is in the midst of a giant building boom and is among the hottest districts in Chicago. Seemingly every empty lot or older building is either being built on from scratch or redeveloped, and the Life Storage building is no exception.

    Cross posted at LITGM

    Posted in Chicagoania, Photos | 1 Comment »

    Illinois Legislators’ Lincolns

    Posted by Carl from Chicago on 21st September 2013 (All posts by )

    Way back in the day when LITGM used to do a bit more of the political type articles I wrote about Illinois representatives’ automobiles. I confused the Lincoln Navigator that Danny Davis (district one) drove vs. the Ford equivalent that Jesse Jackson Jr. drove, and a bit of web hilarity ensued.

    Recently I saw another politician’s car and the first thing I did was look it up – and this Lincoln is owned by a Republican in the 6th district, which happened to be Henry Hyde’s old district. It is a matter of how jaded I’ve become that the fact that an elected official drives a Lincoln is barely worth a web peep.

    While American’s think that “big money” has captured politics, it is literally nothing compared to the wealth of China’s politicians. This WSJ article describes how wealthy the top Chinese politicians are vs. the USA…

    According to the Hurun Report, as cited by Bloomberg, the 70 richest delegates in China’s National People’s Congress have a combined net worth of 565.8 billion yuan or $89.8 billion. That’s more than 10 times the combined net worths of all the members of Congress, the Supreme Court and the President. (Their collective riches are only $7.5 billion.)

    Thus I can only imagine the rage I’d have over the same type of rich trappings if I were Chinese. Unfortunately, they can’t vote, and protests tend to go down badly with authorities. As bad as our system is, in terms of being captured by the interests of the wealthy, it is a comparatively egalitarian route compared to our largest economic competitor.

    Cross posted at LITGM

    Posted in Big Government, Chicagoania | 8 Comments »