Happy New Year to all on Chicagoboyz. As ever, my resolution is to be a little more active here in 2013. There will be some interesting developments, I suspect.
Archive for December, 2012
I’ve long been intrigued by airships, and was pleased when several years ago it was announced that the German company Zeppelin Luftschifftechnik GmbH had developed an advanced-technology dirigible design…the Zeppelin NT…and was offering it for sale. I was even more pleased when one of these aircraft, named Eureka, was acquired by an American startup, Airship Ventures, with the intent of putting it in commercial service for sightseeing rides. And a bit later, I discovered that Airship Ventures was offering a zeppelin pilot experience program, which allowed licensed pilots to attend a 2-day training program culminating in actually flying the zeppelin (with an instructor, of course.)
I participated in this program earlier this year: it was a lot of fun and I’d been intending to write a blog post about it. But I got a lump of coal in my Christmas stocking when I was flipping through an aviation magazine and learned that Airship Ventures has suspended operations for financial reasons. The problems are (a) the general economy, (b) lack of economies of scale, as AV is operating only one ship, and (c) the greatly increased price of helium. (The Zeppelin NT is designed to minimize helium loss, but some such loss in unavoidable.) Attempts to locate a major sponsor who would provide enough funding to keep the airship in business were unsuccessful, and Eureka (which was apparently acquired by AV under a lease arrangement) has been dismantled and is on its way back to the manufacturer in Germany,
I’d have thought that there would have been a number of firms that could creatively take advantage of the uniqueness and great visibility offered by the zep, and am really surprised that no sponsor surfaced: AV CEO Brian Hall put the cost of sponsoring the airship for a year at about the same figure as the cost of a one-minute Superbowl ad.
In response to my inquiry about the ship’s status, the company did indicate that if a major sponsor should appear at this point they would be able to restart operations, albeit obviously with delays and higher costs than would have been the case had they been able to maintain continuous operations of Eureka.
Three Zeppelin NTs are being acquired by Goodyear as replacements for their blimp fleet, so Americans will still be able to enjoy the sight of zeppelins in our skies…but it is unlikely that rides will be offered to people not closely connected to the Goodyear company.
Very sad. Hopefully, at some point an improving economy, combined with adequate sponsorship and an ability to achieve sustainable scale, will allow AV to bring passenger zeppelins back to the United States.
In the meantime, Zeppelin NT rides are still available in Germany…I see that 11 different routes are now available.
Some additional links:
Some nice pictures of Eureka over the Sonoma coast
When I was a first year staff person a couple of decades ago there was a presentation to a major multi-national company and I was the lowest ranking person on the team by a country mile. The account team prepared a map of the world with the client’s locations listed.
I looked at the map for about 2 seconds and just shouted out
You have Scandinavia on there twice
When they printed the map, for some reason they had Norway there one time and then again out in the Atlantic. I noticed it immediately because, well, it was very obvious (to me).
The account team was cursing because there was no time to change anything and they alternatively were mad at me and just laughing that someone who was a kid just hit their major presentation that hard. I think the presentation went well (I wasn’t at the meeting) and probably the client hardly noticed, anyways.
As I walked down the street in River North I noticed a custom clothing store that took up their main window space with this advertisement. This is pretty important because they get a lot of sidewalk traffic.
In 2 seconds I noted that $2,550 – $1,550 doesn’t equal a $383 discount – that sounds like $1000 to me. How they even got to $383 is a question in and of itself.
Cross posted at LITGM
Here’s a Rudyard Kipling poem which isn’t as well known as some of his other ones:
There were thirty million English who talked of England’s might,
There were twenty broken troopers who lacked a bed for the night.
They had neither food nor money, they had neither service nor trade;
They were only shiftless soldiers, the last of the Light Brigade.
They felt that life was fleeting; they knew not that art was long,
That though they were dying of famine, they lived in deathless song.
They asked for a little money to keep the wolf from the door;
And the thirty million English sent twenty pounds and four !
They laid their heads together that were scarred and lined and grey;
Keen were the Russian sabres, but want was keener than they;
And an old Troop-Sergeant muttered, “Let us go to the man who writes
The things on Balaclava the kiddies at school recites.”
(read the whole poem here)
What reminded me of this poem?
Apparently, in 2012 the average time to complete a VA disability or pension claim was 262 days, up from 188 days in the prior year and far above the official target of 125 days. More at Nextgov.
I’m not very impressed with the excuses offered by the VA for this situation:
VA officials attribute the backlog, defined as claims in the system for more than 125 days, in part to higher demand by veterans returning from 10 years of wars in Iraq and Afghanistan with severe and complex injuries.
A Texas Veterans Commission official noted that the agency is caught in a “perfect storm” of claims from veterans of recent wars and those from aging Vietnam and Korea veterans whose disabilities are worsening.
But wasn’t this all predictable? Obviously wars cause injuries, and better battlefield medical attention means that more wounded soldiers will survive and hence need extended care. And wasn’t the higher claims rate “from aging Vietnam and Korea veterans” largely predictable from simple demographic analysis? I’m reminded of the saying about a British railroad from several decades ago: “Despite its frequency and general regularity, Sunday morning seems to consistently catch this railroad by surprise.”
The above remark about the railroad notwithstanding, private enterprises generally seem to be able to deal with fluctuating demand and other problems quite well. There is almost always food in the supermarkets, despite droughts, crop failures, logistical problems, strikes, etc etc. The electricity is almost always on despite storms and electrical failures. And while businesses generally do a better problem than government at dealing with daunting arrays of problems, some government agencies do manage to deal with demand increases and fluctuations far better than the VA seems able to do with these disability claims. Somehow the FAA manages to conduct air traffic control safely and effectively despite the increased demand that occurs in holiday seasons and the varied and often nefarious effects of the weather. The military itself often manages to quickly deploy forces and equipment to far-distant locations. Why has the VA been unable to modify its processes to provide resolution of disability claims in a timely manner?
Sad and disturbing.
Posted by Ginny on 28th December 2012 (All posts by Ginny)
Heather McDonald discusses the choices in job-rich (& self-reliant fly over) Idaho. My syllabus argues if students find themselves not doing the readings, they should probably rethink taking my class. Our lives are enriched by scholarship at certain ponts – at others, it can be a distraction from living. Perhaps lectures are difficult to follow, I observe, because of dehydration after a night in Northgate’s bars. But I’m serious, offering a couple of anecdotes – like a student whose 48 hours of F’s in their teens were followed by life; he came back in his forties, ending with a Ph.D. Unusual, but not all that rare. Neither those bars nor classes slept through are useful ways to spend years of intensity, energy, growth. And, even at our bargain prices, this wastes money.
A student this semester said that paragraph may have led to drops. Well, okay, the purpose is to wake them up – so they don’t drift through another class, getting an untransferable grade. I counseled too many students on their fourth semester of such work.
Cynic that I am, I am deriving a great deal of amusement from some of the media-political-general public storms whipped up in the wake of the horribly tragic Newtown shootings, and the deaths of two firefighters in an ambush set by an ex-convict in upstate New York. As if the shootings weren’t horrible and tragic enough in themselves, now we get to enjoy the reflexive Kabuki dance of ‘we must ban those horrid gun-things!’ being played out – especially since some of the very loudest voices in this chorus are politicians and celebrities who live with a very high degree of security at their workplaces and homes, and whose children attend rather well-protected schools. Such choruses appear to be completely oblivious to the fact that for many of the ordinary rest of us, poor and middle-class alike, the forces of law and order are not johnny-on-the-spot in the event of an attempted robbery, rape, break-in or home invasion. To rely on the oft-used cliché, when moments count, the police are minutes away. In the case of rural areas in the thinly-populated flyover states law enforcement aid and assistance might be closer to being hours away.
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For most WWII airplane buffs, the De Havilland Mosquito holds a special place of interest. It was the last major wooden military aircraft in an era of when aluminum airplanes had otherwise swept the skies. Made of special plywood of balsa sandwiched between birch, the Mosquito proved faster than any comparable metal aircraft. It’s feats are legendary.
Because of the wooden airframe, few Mosquitos survived more than a decade after the war. Because of its basically two piece construction, in which nearly the entire fuselage and each wing were made in two pieces which were glued together, any rot or decay anywhere in a major section caused the scrapping of the entire aircraft. While you can leave a aluminum airframe setting out in a field for decades without harm, the Mosquitos airframe would disintegrate into air unworthiness in a just a couple of weeks if not cared for. Because of the fragility of the wooden airframe, I thought that no flying examples remained.
Imagine my surprise then when, while researching a software testing framework called “Kiwi” I stumbled upon a video of new Mosquito restored (more likely almost completely rebuilt) by a team in New Zealand.
Information is scarce but Wikipedia says:
One aircraft, Mosquito FB.26 KA114, built in Canada in 1945, has recently completed restoration by Avspecs Ltd, Ardmore New Zealand and flew for the first time on Thursday 27 September 2012. The third, fourth, fifth and sixth flights were watched by several thousand spectators at a special air show at Ardmore on Saturday 29 September 2012. The restored Mosquito is owned by Jerry Yagen and is heading to its new home at the Virginia Military Aviation Museum, in Virginia Beach, USA, as soon as transport logisitics have been worked out. A complete set of forms, jigs and molds will allow for new Mosquitos to be built.
Frankly, I think they’re missing a market here. With everything supposed to be “sustainable” and for some reason wood and other biological materials considered sustainable (despite a long history of being emphatically not sustained in the least) a proven all wood airframe might be a selling point.
The Kiwi’s really impressed me with this aircraft. The restored Mosquito actually makes up for the Hobbit movie.
…has a very old basement. In that basement is a major regional telecommunications interconnect point.
(via American Digest)
While I am a big supporter of nuclear power, the insane regulatory framework in the US and our broken financial incentive mechanisms for utilities has doomed the promised nuclear “renaissance”. The only places where nuclear plants in the US are even being attempted have “old school” regulation with “cost of service” opportunities that basically mean that the utility will recover whatever they put into service and earn a return on that investment. These include 1) South Carolina, where SCANA (a relatively small utility) is building two 1,100 MW reactors and 2) Georgia, where Southern Company (and a variety of municipal entities) are building two 1,154 MW reactors. The oddest entity, the Tennessee Valley Authority (TVA), is a Federal entity, which allows it to move forward with completion of a unit that is 1,180MW.
No utility in a state with deregulation (partial regulation) can contemplate a nuclear plant, because of the high costs which must be recovered from an open market. The price of electricity is very volatile, driven by demand, weather, and the price of alternative fuels. The low price of natural gas today, not foreseen when these plants were considered back in the late 2000’s, would make high enough energy prices to recapture these costs (and earn a profit) on an open market impossible. The price of natural gas could rise and other factors (such as the impending retirement of much of the US’ coal fleet due to EPA strangulation) could also make them economically viable; but these factors are not present today.
Beyond the enormous (and likely fatal) financial risk that these mega-projects have, (SCANA’s market capitalization is $6B, and the 2 reactors are “planned” to cost $9B), these projects have historically been plagued with immense delays and catastrophic failures such as abandonment. When these projects started, optimistic dates and costs were trotted out, ignoring both the sad history of mega-overruns and the fact that today’s regulatory and legal climate are even MORE unfavorable than those in the 1970’s when the earlier failures occurred. I knew that delays were inevitable, and unfortunately, enough time has passed that the companies are starting to admit their failures (to date).
This article describes how Southern Company has begun to waver from their cost and schedule estimates.
Southern Co. has had a simple message for the past few years: The effort to build the country’s first new nuclear power plant in a generation was on time and on budget. Now, that message is changing. The $14 billion project to build two reactors at Plant Vogtle is trending hundreds of millions of dollars over budget and trailing more than a year behind schedule, according to a report from a state-hired construction watchdog.
TVA recently has begun acknowledging their delays and cost overruns, too, per this article.
Unit 2 at the Watts Bar Nuclear Plant in Spring City, Tenn., is up to $2 billion over budget and three years behind, according to the Tennessee Valley Authority. TVA blames its own management oversight and planning. Instead of basing a plan and estimates on the twin reactor already running at Watts Bar, the utility used as a model the only other reactor work that had ever been deemed on time, close to budget and a success: Unit 1 at Browns Ferry. The trouble was that Browns Ferry and Watts Bar are completely different types of reactors with different work spaces and work needs.
Not only is the TVA admitting the cost and schedule delays, their official in charge of the plant just left the organization.
SCANA too has been acknowledging delays and cost overruns. Per the first article cited above:
In Jenkinsville, S.C., the Scana Corp.’s $9 billion expansion of its Virgil Summer nuclear power station began with work on two new reactors in late March. The Summer reactors already are reported to be at least $300 million over budget because components did not meet shifting safety standards.
Here is a SCANA presentation to EEI from their investor relations web site. Go to page 8, which shows the rising costs and tail of their planned nuclear investment. Frame this page and come back to it 3-4 years out and if it looks anything like this it will be a huge win for SCANA and the US nuclear power industry. Sadly enough, the odds are likelier that the Cubs will win the world series than that the “real” spend will look close to that graph. Note that SCANA is a 55% owner of this plant so it only represents their portion of the spend (other utilities and municipalities foot the rest).
Thus in conclusion:
1. The entities that are embarking on the nuclear construction adventure are either virtually immune to market forces (TVA) or are under “old school” regulation that lets them recover the cost in customer rates regardless of whether or not it makes economic sense
2. While these entities went into the projects with optimism despite the dismal track record of delays and outright abandonment common to nuclear construction, their exhortations and optimism are starting to fade early on in the projects
3. The US has far more to do in the form of favorable “one permit” regulation and removal of potential lawsuits and other barriers, as well as additional financial incentives, before the US nuclear industry really has a chance
Cross posted at LITGM
This is a fun camera, with some limitations. It was introduced in early 2012 at a relatively high price and received mixed reviews due to its size (bigger than other cameras in its “class”) and styling. Apparently it was a sales flop, because now you can get one for around $300 without a lens, or with a nice compact lens for another 100 bucks (these prices are more than 50% off the original street prices).
(With my lens.)
-Grate a couple of potatoes.
-Chop some onion.
-Mix potato and onion in a bowl with egg, salt and pepper.
-Fry, making sure to flatten the latkes for quick and even cooking.
When a law bans exchanges wanted by everyone directly involved a number of things happen:
1) The exchanges continue;
2) Prices of the banned items rise and wars to control turf begin;
3) New criminals are created, including many people who are ordinary good people (like colored margarine seekers);
4) New enforcement agencies and staff are created;
5) New jails are built and new jailers are trained;
6) Laws, lawyers and lawsuits proliferate;
7) A new branch of law and its practitioners prosper and support further extension and complexification of regulations;
8) A portion of the entire apparatus of enforcement and punishment is progressively corrupted;
9) New agencies and staff are created to discover, eliminate or suppress the corruption;
10) Many begin to support ever more drastic suppression and punishment;
11) A profitable subliminal partnership emerges unifying the interests of violators and enforcers as the profits from the illegal trade are negotiated and distributed among them;
12) The business engages all of the following: bad people buying and selling, good people buying and selling, police, judges, academics, enforcement trainers and suppliers, prison builders and suppliers, staff to support all of this, journalists to cover it, media organizations to sell the coverage;
13) Completely uninvolved people are caught in crossfires, including taxpayers;
14) The costs of controlling the new flourishing evil continue to grow seemingly without limit;
15) The vast network of beneficiaries of the law applaud and lobby for its continuation, vilifying all opposition;
16) Everyone gets more and more discouraged and inclined to hate all humanity. This list is probably too short.
However all of these bad things may be balanced by the fact that creative people are engaged in producing media based on the things that happen because of the prohibition, and by watching and reading we all learn delightful new things about how the world works. (channeling Voltaire).
It is not enough to simply ban exchanges that have consequences we don’t like. The costs of doing it should be compared with the costs of not doing it. Those costs usually dwarf the costs that would arise from unhindered transactions.
I’m still fighting the remnants of the Cold From Hell (possibly complicated by an allergy to blowing cedar pollen which hits a lot of people around here) but at least I am starting to feel a little more in the Christmas spirit. Not much more, but at least I can enjoy the Festival of Nine Lessons and Carols from King’s College Cambridge on the radio, and a week ago I was inspired to go ahead and sort out the last of the Christmas presents that I wanted to give to some people I am fond of. So, all that is sorted. Our Christmas dinner is sorted also. Blondie will be out doing deliveries for Edible Arrangements until the last minute, so practically everything to do with Christmas was done over the weekend.
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Newgrange is an ancient structure in Ireland so constructed that the sun, at the exact time of the winter solstice, shines directly down a long corridor and illuminates the inner chamber. More about Newgrange here and here.
Grim has an Arthurian passage about the Solstice.
Don Sensing has thoughts astronomical, historical, and theological about the Star of Bethlehem.
A wonderful 3-D representation of the Iglesia San Luis De Los Franceses. Just click on the link–then you can look around inside the cathedral. Use arrow keys or mouse to move left/right, up/down, and shift to zoom in, ctrl to zoom out.
Vienna Boys Choir, from Maggie’s Farm
Lappland in pictures, from Neptunus Lex
Snowflakes and snow crystals, from Cal Tech. Lots of great photos
A Romanian Christmas carol, from The Assistant Village Idiot
In the bleak midwinter, from The Anchoress
A Christmas reading from Thomas Pynchon.
An air traffic control version of The Night Before Christmas.
Ice sculptures from the St Paul winter carnival
O Come, O Come, Emmanuel, sung by Enya
Posted by Michael Kennedy on 23rd December 2012 (All posts by Michael Kennedy)
I’ve tried to think about anything but the coming economic calamity but this column from the Daily Telegraph is too perceptive to ignore. Of course, the liars include most of the US media, press and TV. We have to get our news from the British media about American politics. The US media has become an arm of the Democratic party.
Must we assume now that no party that speaks the truth about the economic future has a chance of winning power in a national election? With the results of presidential contests in the United States and France as evidence, this would seem to be the only possible conclusion. Any political leader prepared to deceive the electorate into believing that government spending, and the vast system of services that it provides, can go on as before – or that they will be able to resume as soon as this momentary emergency is over – was propelled into office virtually by acclamation.
So universal has this rule turned out to be that parties and leaders who know better – whose economic literacy is beyond question – are now afraid even to hint at the fact which must eventually be faced. The promises that governments are making to their electorates are not just misleading: they are unforgivably dishonest.
I have not believed that Romney’s problem was one of poor communication or salesmanship. Certainly, the turnout numbers show that Obama’s organization made the most of a very intrusive data mining system. The possibility that the system of the campaign will become part of the political party’s permanent infrastructure is worrisome. I don’t want to be an alarmist but one feature of totalitarian governments, after the French Revolution, was the intrusion into daily life.
Of course, once in power all governments must deal with reality – even if they have been elected on a systematic lie. As one ex-minister famously put it when he was released from the burden of office: “There’s no money left.” So that challenge must be met. How do you propose to go on providing the entitlements that you have sworn never to end, without any money? The victorious political parties of the Left have a ready answer to that one. They will raise taxes on the “rich”. In France and the United States, this is the formula that is being presented not only as an economic solution but also as a just social settlement, since the “rich” are inherently wicked and must have acquired their wealth by confiscating it from the poor.
I see no sign of any recognition of reality yet by Obama or his government. The “fiscal cliff” negotiations, if they can be called that, have been a farce. The Republicans have allowed themselves to be maneuvered into secret negotiations which have been demagogued and which have set them up for blame for what is coming. They would have been far better advised to insist on open negotiations, on C-SPAN if necessary.
Photo and story here….from this collection of heartwarming stories and images.
Via Rachel Lucas, who is now blogging from Italy.
With Youtube it is easy to try out new music so I recommend that you check on some of these links and see what you think. iTunes is also just a couple of clicks away.
Bob Mould – The Silver Age – Album
Bob Mould was the lead singer and guitarist of Husker Du, the seminal punk (?) band. After they broke up he went solo, formed the great band Sugar, and then got weird. He’s back now, guitars blazing, and it sounds great. Here he is playing the lead single “The Descent” on Letterman.
Calvin Harris – Feel So Close – Single
This simple, hypnotic song with a very humanistic video is one of the best songs of the year (see it here). The sparse use of electronics in all the right places is what moves it into something great.
LCD Soundsystem – Shut Up and Play the Hits – DVD
The great electronic band LCD Soundsystem fronted by James Murphy disbanded this year and he had a farewell tour and DVD of their final shows in New York City. I had the privilege of seeing LCD Soundsystem three times and they put on a great show every time. Here is a clip of them playing “All My Friends” from the DVD.
Soundgarden – King Animal – Album
When Soundgarden came back to Lollapalooza I was amazed at how great Chris Cornell’s voice sounded. This is their first album in many years and it is as if they never left. Here is “Been Away Too Long” on Letterman.
M.I.A. – Bad Girls – Video
The video for MIA’s song “Bad Girls” was completely original and new. Talk about doing your own stunts… check it out here.
Afghan Whigs – “Lovecrimes” – Song
The Afghan Whigs were a great alternative band back in the day known for “Gentlemen” and other hits. Front man Greg Dulli is still out there making great music and he reformed the band – this is their cover of a Frank Ocean song “Lovecrimes” You can download it for free at their web site here.
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In the US, our energy policies have been transformed by fracking, which has led to an abundance of natural gas and re-invigorated our domestic oil industry, to boot. When I first worked in the energy business they still talked about how the natural gas industry was forced to curtail new hookups of houses in the 1970’s because we believed that we were about to run out of the fuel, and the costs in the 1990’s were about $2 / unit. After a spike up to $14 / unit (which contributed to the bankruptcy of California), economic forces and not government intervention led to the innovation and today’s low prices in the $2 – $4 / unit range.
When natural gas first fell into this low price range, industry participants were basically “waiting it out” to see if prices would rise. The price of natural gas plays a huge part of the overall energy pricing market, since natural gas “peaking” plants are turned on during spikes and they set the marginal cost of power during those peak events. During times of peak usage coal, nuclear and hydro plants reap a windfall since their costs are (comparatively) fixed if the price spikes are set by high natural gas prices. These price spikes have been significantly lessened and now natural gas is used not only for peak plants but for base-unit capacity. If the price of natural gas ever rose near those peaks in the $10+ / unit range all those investments would be un-economical, but price spikes in those ranges don’t seem to be coming in the near future.
Last Hurrah For Wind Subsidies
The wind industry is basically a creation of government incentives worldwide. The Spanish market collapsed completely instantly when incentives evaporated. The US turbine market is about to collapse as well as soon as a governmental program providing subsidies in the form of tax credits to all wind installations in service by year end, as described in this Bloomberg article.
Wind-turbine installations are exceeding natural gas plants in the U.S. for the first time this year as developers rush to complete projects before the expiration of a tax credit for renewable energy. New wind capacity reached 6,519 megawatts by Nov. 30, beating the 6,335 megawatts of natural gas additions and more than double those of coal.
It isn’t known whether or not this tax credit will be renewed; if it isn’t the US turbine industry will likely grind to a halt since wind isn’t competitive in the US without large subsidies. Unlike natural gas, which can be found in areas connected to the gas pipeline grid, most of the best wind locations are not connected to the electricity transmission grid and the costs and barriers to installing these transmission lines are insurmountable under the current regulatory regime, dooming wind to a niche tax subsidized role. Our existing wind infrastructure will sit in place, earning the tax credit, with little or nothing added going forward without new incentives.
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Perhaps the first piece of fiction to feature a computer-systems hacker is Poul Anderson’s 1953 story Sam HallPlace and date of birth. Parents. Race. Religion. Educational, military, and civilian service records…The total signal goes out over the wires. Accompanies by a thousand others, it shoots down the last cable and into the sorter unit of Central Records. The distorted molecules in a particular spool show the pattern of Citizen Blank, and this is sent back. It enters the comparison unit, to which the incoming signal corresponding to him has also been shunted. The two are perfectly in phase; nothing wrong. Citizen Blank is staying in the town where, last night, he said he would, so he has not had to file a correction.
Thornberg has certain reservations about the totalitarian regime which is now running America, but he is not actively disloyal. His political awakening begins when Jimmy, the son of his second cousin, is arrested on suspicion of treason, and Thornberg remembers some of the forbidden history which he has read.
The intellectuals had been fretful about the Americanization of Europe, the crumbling of old culture before the mechanized barbarism of soft drinks, hard sells, enormous chrome-plated automobiles (dollar grins, the Danes had called them), chewing gum, plastics…None of them had protested the simultaneous Europeanization of America: bloated government, unlimited armament, official nosiness, censors, secret police, chauvinism…
In order to protect the career of his son Jack, an officer in the regime’s military…as well as his own career…Thornberg decides to alter Matilda’s records and delete any relationship with the arrested Jimmy.
Thornberg toiled at the screens and buttons for an hour, erasing, changing. The job was tough; he had to go back several generations, altering lines of descent. But when he was finished, James Obrenowicz had no kinship whatever to the Thornbergs…He slapped the switch that returned the spool to the memory banks. With this act do I disown thee.
Thornberg’s rising bitterness reminds him of an old English ballad:
My name it is Sam Hall
And I hate you one and all
…and he uses his access to Matilda to create records for a fictional citizen by that name, a tough kid who has held a variety of unskilled jobs. Thornberg initially creates Sam Hall only as an outlet for his anger and to prove to himself that he can do it…but when a probably-innocent man is arrested for murder of a security officer…and Thornberg knows the man will be found guilty, whatever the true facts, in order to protect Security’s reputation for infallibility…he decides to establish a trail of records that will implicate the fictional Sam Hall as the murderer.
This is the beginning of Sam Hall’s career of murder and mayhem, as Thornberg repeatedly alters records to identify his fictional citizen as the author of real crimes across the country. Sam Hall is soon promoted to Public Enemy Number One…and his exploits soon inspire a range of copycat crimes against the government, with the attackers identifying themselves as “Sam Hall.”
The “Sam Hall” meme soon grows into a full-scale rebellion against the government. Thornberg helps things along by using his access to Matilda to spread mutual suspicion among government officials, turning the widespread distrust which is a feature of totalitarian societies against the regime itself.
Eventually, the rebels triumph and the totalitarian regime that is ruling America is overthrown. It seems a happy ending. Thornberg looks forward to destroying Matilda (after she is used one last time on behalf of the rebels “to help us find some people rather badly want” and “to transcribe a lot of information..strictly practical facts”) and to retiring Sam Hall to “whatever Valhalla there is for great characters of fiction.”
The story ends with the following sentence:
Unfortunately the conclusion is rugged. Sam Hall never was satisfied.
You cannot hope to bribe or twist (thank God!) the British journalist. But, seeing what the man will do unbribed, there’s no occasion to.
The English visitor, a lawyer and pamphleteer named Nicholas Doran Maillard landed up in Texas early in 1840, when the Republic of Texas had just achieved four years of perilous existence . . . and inadvertently provided the means for an exception to Humbert Wolfe’s stinging epigram. In that year, Texas was perennially cash-broke but land rich, somewhat quarrelsome, and continually scourged by Comanche depredations from the north and west, and the threat of re-occupation by Mexico from the south. Texans had first seen immediate annexation by the United States as their sure and certain refuge. But alas, that slavery was permitted and practiced within Texas – so and annexation was blocked by abolitionists.
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On-line content for a wide range of magazines, some of them dating back to the 1830s, also some books and videos. Via Rick Darby, who notes that Google Books also has an extensive old-magazine collection.
I was recently at a bank as part of a non-profit (else I rarely step foot in a bank) when I was talking to the banker about setting up a new account and we started discussing the interest rates that each of the potential accounts would receive. After a bit of discussion I said
At these rates, it doesn’t matter
Basically interest rates on savings accounts and non CD accounts are effectively zero unless you have an immense amount of money in that account. For example, the Chase “savings” account offered .01% – which means that if you have $100,000 in the account all year long, you are going to make $100. That is the definition of negligible. Certainly you can shop around a little more and get a higher interest rate, but you aren’t going to get near 1% unless you buy some sort of vehicle with other conditions (i.e. locking up your money for a period of time). The woman at the bank was apologetic but I knew that there was no reason for her to be – it wasn’t her fault that the nation had undergone a massive ZIRP experiment.
One side effect is that banks have now effectively become a vehicle for 1) making transactions 2) providing services. They are no longer really a vehicle for making money (i.e. earning interest, especially compounded interest, that is meaningful over time). Thus your money now is more of a way to avoid charges on those services (free checking, or avoiding low balance charges, or access to certain types of transactions without fees) than a means of making money.
The traditional function of banks is to take your deposits and turn around and “leverage” that money to make loans to others. Since banks can count on not everyone to show up and demand their deposits back on the same day (unless there is a bank run), and they should be able to earn money on the difference between the cost of the money to them (they can borrow at the lowest rates) and what they charge loan customers, this should fund much of their profits.
The newspaper industry is dying because they provided journalism as a service but made their money selling advertising (effectively as a local monopoly for many years). When businesses and individuals stopped buying advertising (hello, Craigslist), the “service” that they provide, journalism, had to pay the bills. As a result this industry has gone into free fall since then.
Banks and many other financial institutions generally do a lot of services but make their money on the spread between what they pay you and what they pay for interest in terms of their cost of money. Then they take that difference and it generally subsidizes everything else. If that difference becomes negligible, then the financial institution has to make money in some other manner, or see their profits wither like the newspaper industry.
With interest rates so low and money washing into their doors, banks should be able to make up for everything on loans. However, everyone is conservative about loaning money right now unless it is secured, and the home equity loan pipeline has mostly dried up since many houses have lost their equity buffer. I don’t have direct experience with this but have heard that it is generally not easy getting a business loan, the type of loan that is riskiest unless it too is essentially secured in some other manner (property, receivables, etc…).
As a customer, if in the medium to longer term, if you assume that interest rates will stay very low, then you have options that you probably wouldn’t have considered otherwise. For one – you may just want to consider taking a portion of your money out of the bank and just convert it into gold in your safety deposit box. The biggest argument against gold historically is that it doesn’t produce a return – it just sits there, and has storage costs to boot. While both items are true, a safe deposit box is cheap to rent each year (mine is about $100) but on top of it keeping your money in a financial institution has transaction costs, as well. You can do the same thing by buying GLD the Gold ETF which may have other advantages with regards to transaction costs and sales taxes.
Another alternative is to purchase foreign currency and put it in your safe deposit box. This traditionally has been a terrible strategy because it earns nothing but in an era of almost zero returns on major currencies around the world the side effects of this strategy are lessening almost by the day.
Since the banks can only make so many loans that are basically secured and there hasn’t been a lot of impetus by them to move into more risky types of business loans, they are basically awash in cash. In some circumstances, they have considered paying negative interest rates for large blocks of cash, and this has happened with short term debt instruments quoted in some markets, as well.
The last part of this is to strip the concept of “compound interest” out of your heads. One of my blogs is for teaching kids about investing and if I was starting this years ago I would have made a big pitch for the advantages of investing your money for long periods of time and watching it grow with the “magic” of compounding interest. It is hard to make this case with interest rates far below 1% unless you have large quantities or buy specific vehicles which take you near 1% and even that is a gigantic time frame to “double” your money. If you assume 1% / year then it takes about 70 years (give or take) to double your money – better than the straight-line model of 100 years but in all cases virtually irrelevant for practical purposes (nice calculator here).
Thus some interesting side effects for me are
1) the lost “opportunity cost” of holding cash in gold is now negligible
2) the lost “opportunity cost” of physically holding non-US currencies is now negligible
3) the margin that financial institutions receive on interest is now very low and they will need to either expand into riskier non-secured loans (which they haven’t done) or start charging for services and transactions (or see their margins crumble)
4) with 3) above and interest rates near zero the real “value” of your money with the bank is in avoiding / minimizing transaction costs and being able to take advantage of better services
5) the concept of “compounding interest” is basically dead on risk-less instruments, and for riskier instruments it is but one component of total return (probably the least essential component)
Cross posted at Trust Funds for Kids