Brian Gongol
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Are you on track to save at least $1,289 this year?
If so, then you're doing better than the average American. The personal savings rate in April was 3.4%, or about $1,288 per person per year. The problem? That number just isn't going to cut it. And worse yet, it's clearly trending downwards -- towards the dismal 2% rate that prevailed in 2006 and 2007. ■ Personal savings forms the basis for a number of very useful things. First, it gives people at least some cushion against bad times...the classic "saving for a rainy day" that everyone should do. Companies have to do this by depreciating their assets, knowing that things wear out over time. Households need to do the same thing, since cars break down and furnaces give out and kids get sick. ■ By further extension, we need savings so that people can have something to live on when they retire. Americans, generally speaking, probably need about $1 million in savings and net assets of some sort or another at age 65 in order to afford a comfortable retirement without a lot of worry. Social Security is not a retirement plan. It's just not. It's a backup insurance policy against being destitute in old age. And there's no way that saving $1,288 a year is enough to get to $1 million. ■ The third leg of this stool is that personal savings equals wealth. You can't have wealth if you don't ensure that you consume less than you produce. A personal savings rate this low -- and 3.4% is far too low -- means that we're essentially eating our seed corn. Read Warren Buffett's 2003 essay on the US trade deficit: All told, we've sold off more than $2 trillion in American assets to the rest of the world to pay for our consumption of more than we produce. That's $2,470,989,000,000 at last count -- or about $8,000 for every man, woman, and child in this country. Many Americans don't even have $8,000 in their own net assets -- much less realize that the rest of the world owns that much more of our country, per person, than we own of anything anywhere else. If there's one iron rule of capitalism, it's that the one who owns the capital is the one who actually gains the wealth. And there are really only two kinds of capital: The things that are counted in that negative $2.5 trillion balance we have with the rest of the world...and human capital. And, while we're still pretty good at what we do here, our human capital is basically the output of what we put into our educational system. So unless we decide to make our schools phenomenally better and/or start investing more and consuming less, we're in deep trouble in the long term. ■ Bottom line: It's possible to become a nation of over-savers. Japan once had a personal savings rate of 15% -- which may be saving too much and spending (and enjoying life) too little. But a good rule of thumb has always been to target a savings rate of about 10%. Some of that will be lost to inflation over time, but as long as its invested with some shred of wisdom, that 10% amount generally produces enough for a comfortable household nest egg. 3.4% just isn't enough. Not nearly enough. ■ (As an aside...households that are putting money into education and training that actually stand a good prospect of earning a higher return in the future should consider their tuition spending to be the same thing as "savings", even if it technically doesn't look like that. If you're going to earn a meaningfully higher level of income as a result of that education, then it's a lot like putting money into savings -- as long as you follow the rule of saving a high percentage of your future [higher] earnings later on. But if you're burning those tuition dollars on a low-return degree program, then it's really just consumption, because it feels good but doesn't really make you wealthier in the future.)
Where do these awful people come from?
Iowa's supreme court has ruled that it's a man's right to sue for fraud and be paid back for damages if a woman falsely claims a child is his. This begs two questions: How in the world was this not the law before? And, where do these awful people come from, who would knowingly lie about the paternity of a child, just to extract money out of someone who wasn't the child's father? In related awful-person news, a man is accused of killing his pregnant wife because he wanted to continue having an affair.
Sioux Center manufacturing plant will close
They make furnishings for the medical industry, and the company's owners say they just don't know how medical-care reform will affect the industry with enough certainty to keep the plant open.
Judgment matters more than knowledge
We were told a lot in the 1990s that the "new economy" brought about by the Internet would be the "knowledge economy", in which "knowledge workers" would be paid highly for, well, knowing things. But that's turned out to be a bit off the mark. What we really live in is the era of the judgment economy. Knowledge and information are abundant, and they're not particularly hard to obtain. If one wants to earn a PhD, one can even do that through online classes. But no amount of knowledge will adequately substitute for the judgment to know better than to send sexually-explicit emails from a work account, as the now-former superintendent of the Des Moines Public Schools did. That's just awful judgment. Work accounts at a school district are a part of the public record. Everyone makes mistakes, but it takes a person with really, really bad judgment to be in a management position like a superintendency and not realize that certain conversations are best had anywhere but on a school-district server.
There is, without a doubt, such a thing as too much instant gratification
That said, it seems likely that the Zimbardo hypothesis that video games and porn are creating a nation of males who are addicted to high-intensity arousal and action and who can't otherwise control themselves or focus on the big picture. It's quite likely that they're describing a specific, finite segment of the male population -- just to make up a number for it, let's say 15% -- who then make it look like there's a total epidemic happening. But plenty of males of all ages can still find self-discipline and set aside time to think and mature. Blaming video games and porn for some others' inability to do so isn't really a fair way to characterize what happens in a population the size of America's.
How the economy will determine the outcome of the Presidential election
Presidents take too much credit for the economy when it's doing well and too much of the blame when it's going badly. But the Obama Administration has been doing everything possible to take credit for whatever turnaround has been happening while doing lots of things to make growth difficult, so the punishment may be justified.
China's central bank cuts interest rates
As when it's done in the United States and elsewhere, the hope is that lower rates will encourage businesses to borrow and in turn use that borrowing to create more goods and services. Lower interest rates also punish people who prefer to save their money, so it encourages them to consume instead. Savers will now get 3.25% on their deposits, while a one-year loan will cost 6.31%. But don't bother commenting about it online behind the Great Firewall -- the government is proposing even tighter controls on the Internet.
Fetal genome sequencing is now possible
But are we ready for it, ethically and legally?
Spain is now the financial scapegoat of Europe
So, it's a mite carrying a virus that's been killing off the bees
A huge problem for agriculture
Facebook is launching its own app store
Oh dear. Another way for old people to get confused.
You're probably not hearing "O Fortuna" right
(Video)
A new take on some old Mister Rogers clips
(Video)
Cubs vs. Giants, 1912-style
Did the NFL really do enough to treat players fairly?
Were players warned enough about the possibility of brain injuries?
California voters decide to put brakes on public-sector pensions
Bill Clinton may have an ego, but he's also from the badly-depleted pro-business wing of the Democratic Party
The Democrats need a pro-business wing, and the Republican need a wing full of social moderates. Period. Without those groups, the parties just lapse into cartoonish editions of themselves.
Google buys QuickOffice
Any business that requires the pace of innovations that Internet services seem to require is a business that's too hard to evaluate reasonably as an investor
6.5 million LinkedIn passwords stolen
That's why everyone should use different passwords across different websites -- because you don't want to lose all of your password security just because one site had a security lapse or breach.
The market for talent doesn't always have to be national
Institutions of all stripes need to do a better job of developing their talent pools from within. National searches for people to do things like running school districts are just pushing salaries up and reducing reasonable accountability.
Was the Ford Fairmont the worst police car ever?
One would have to suspect it was at least in the running
Twitter updates its logo
Better? Yes. Permanent-looking? No.
Secretary of State Hillary Clinton nudges North Korea towards change
Her statement was clearly a nod to South Korea, a free ally of the United States, but it's also a point well-taken: North Korea simply can't go on being an authoritarian Communist state. As Stein's Law rules, "If something cannot go on forever, it will stop." Authoritarian Communism simply cannot go on forever. It leaves people literally starving -- and that's untenable when neighboring nations have plenty. So the question is: How long will it take the North Korean leadership to see that there's a bigger payoff to ending the madness than to keeping themselves barricaded away from the reality of the destruction and poverty they cause? They need to see, somehow, that peaceful reunification with South Korea is the only viable strategy. Here's the question: Does it take some kind of direct payoff? That may be the only option -- somehow literally buying-off the elite to get them to step aside. Perhaps if you play civilization as a video game for long enough, totalitarianism becomes the rule. But there's no reason that we, as human beings conscious of what's happening to us and around us, cannot deliberately fight back against the tide of chaos and build a better way of life for ourselves and our offspring.
A big leap forward for safety comes on Monday
The National Weather Service is about to start pushing the highest-severity warnings (tornado, tsunami, flash flood, and the like) to cell phones starting Monday. It's obviously only going to be available on newer devices, but it's a great step forward. People need those alerts most when they're away from home, and most especially when they're out of town and may not recognize the early warning signs of danger. Iowans probably don't know much about tsunamis, and Hawaiians aren't well-versed in tornadoes. It's a very sensible collaboration between the authorities tasked with keeping people safe and the wireless telephone companies.
Bank of England and UK Treasury plan to drop mountains of cash into banks for lending
They're talking about adding £5 billion a month to the banks so they can lend out to businesses. That's $7.7 billion a month at current exchange rates. It's a huge amount of money -- on top of additional huge piles that have been shoveled into the economic system already. Here's something worth consideration: With lending rates at impossibly low levels (seriously -- some 15-year mortgage rates are being offered at 2.75% -- that's bonkers low), financial institutions are lending long at very low rates. That's going to hurt them a lot -- a whole lot -- when rates eventually come back up. There's no question that the cost of money will be higher than 2.75% at some point in the next 15 years. But if the banks are locked into lending at those ultra-low rates for very long stretches of time, they're going to find themselves in a world of hurt when their depositors are expecting far more. All this cheap money being dumped into the economic system is going to put severe downward pressure on the returns that people are going to be able to earn from "safe" investments like CDs for quite some time to come. That, in turn, is going to cause huge problems for retirement funding, since people tend to move their money into those "safe" instruments (like bonds and CDs) as they approach retirement -- which is something that people will be doing in very large numbers as the Baby Boomers retire. The next 15 or even 30 years look like terrible times to be in banking.
How the mayor of London -- yes, that London -- could be come President of the United States
Boris Johnson was born in New York City and holds an American passport. Interesting.
Can we place a numerical value on art?
Of course we can. It might be difficult to do so, but a price tag can most definitely be put on the value of the aesthetic. It may actually be surprisingly low, on balance. We've spent far too long permitting the uglification of America. Maybe a little more style and class are worth it.
Group forms to say "no" to special tax breaks for Iowa City tower
Who could say no to this cute little face?
It may belong to a baby gorilla, but it sure looks innocent and worthy of protection. The African Wildlife Foundation is a great charity working to protect mountain gorillas, among other African species.
Vatican report turns against American nuns
The Vatican conducted a review of a group called the Leadership Conference of Women Religious, which claims to represent 80% of American nuns. The resulting report concludes that there are "three major areas of concern" about American Catholic religious communities, one of which was termed "radical feminism". Now, the group says it's going to hold regional meetings and a full-scale assembly in August to decide what to do about the accusations. The news raises an interesting question for the Catholic Church: Is it better off with greater doctrinal uniformity or with a big tent?
Socialist Party wins big in France
They have a majority in the national assembly and in the senate, plus the presidency. Are they full-blooded red Communists? No. But it's strange to see a party that's socialist-in-name take over a Western nation's politics. The Green Party did well, too. ■ Party politics are a funny thing. They involve lots of horse-jockeying and realpolitik, but there's still an element of philosophy behind it all. For instance, for what the world's Green Parties get right about thinking for the long term environmentally, they usually get things completely wrong about economics and incentives and private property. France's socialist party may be completely backwards in philosophy, but they seem to understand that government spending has to be reduced. ■ In an ideal world, we'd have something like a Century Party: One that's dedicated to a philosophy of making the best decision not just for today, but for the next hundred years. A Century Party would have to consider ethical, environmental, economic, and other consequences of every decision with a longer time horizon than what's just around the corner. On the surface, it sounds like a totally pie-in-the-sky idea. But short-term thinking has been just killing us in recent years: Short-term thinking about housing and banking gave us the mortgage crisis. Short-term thinking about government spending has given us a $15.7 trillion Federal debt. Short-term thinking about energy gave us the 1970s oil crisis. Short-term thinking about foreign policy gave us Al Qaeda. ■ And it's not as if people never looked to the long term in the past. Much of the infrastructure we use today was built or at least started 50 or 100 years ago. Airport terminals like Reagan National and structures like the Brooklyn Bridge have been around for many decades -- and what would the Golden Gate Bridge be without its Art Deco look? We need to think not just about the immediate, but also about the future.
Monarchies are ridiculous
The next-in-line to become king of Saudi Arabia just died unexpectedly. But he was 78 and the king is 89. It's not like this system is designed to deliver thoughtful, progressive leadership to the country. Monarchies -- especially ones that retain any kind of political power whatsoever -- are patently ridiculous. David Mitchell put it quite well when he called the idea of monarchy a "confidence trick". They're nothing more than people telling other people that because some long-ago ancestor whipped everyone else into order, then God must will it that the offspring of the long-dead victor should still tell everyone else what to do. Ludicrous. Republics all around.
China says it won't re-stimulate like it did in 2008
They're going to continue putting government spending out there to stimulate the Chinese economy, but supposedly at a much lower rate than what was going on before. Premier Wen Jiabao essentially told the G20 that the rest of the world is on its own if the global economy re-slows. Apparently, American officials have been pressing them to apply more stimulus spending. Officials from India seem worried that a slowdown could really cramp their style.
Microsoft plans to have a tablet computer for Christmas
They're calling it "Surface", and it's going to run on Windows 8, which by many accounts is a pretty decent operating system for phones and tablets. They're being coy about the price point, only suggesting vaguely that it'll probably be in the $400 to $600 range. That's really still too high for tablets -- the real breakthrough price point for those is the $200 range, where one finds the Amazon Kindle Fire. But if Microsoft can make the case that their tablet -- with a keyboard built into the cover, but not apparently necessary for the operation of the tablet strictly as a tablet -- can be easily integrated with existing business IT infrastructures, then they might have something good going. Tablets remain good for getting low-concentration work done -- scanning emails, checking the Internet, and the like. These are things that many companies would be happy to have their employees doing at home and off the clock, or while traveling on airplanes and trains. And if they're (understandably) skittish about trying to integrate Apple's iPad products into a Windows-heavy IT world, then a Microsoft-built alternative just might work. It's probably going to be a much tougher sell for ordinary consumers. Wisely, they're including tools like SD and USB ports. Apple makes data transfer a premium option, which just adds a slight but noticeable nuisance factor.
China's grown notorious for selling fake stuff, but this is ridiculous
One fraudster in China is in trouble now for making up an entire bank in the United States, then telling everyone he bought it. He apparently lied in order to gain social status.
We're really starting to miss the rain
About 60% of Iowa's cropland is short or very short on moisture. That's bad news going into the warmest part of the summer.
It's this kind of language that's going to kill Twitter
The Twitter enthusiasts who use hash tags, jargon, and other shorthand are rendering much of what's shared on the site to be totally meaningless to outsiders. Once the "in group" language becomes more prevalent than, say, just plain language, a website or service is clearly on the decline.
Who wants a body massage?
(Video)
Take two minutes for a self-exam today
Take a minute or two and conduct some basic self-screenings for cancer. Early detection saves lives. There's lots of misinformation about cancer that finds its way around the Internet, largely because we've been trained to wait expectantly for some sort of magic-bullet solution to cancer. But cancer risks can be significantly reduced through a balanced diet, exercise, and early detection and treatment. Meanwhile, science is making great progress towards improving genetic detection, which holds great promise for some types of cancer. Instead of forwarding hoax-ridden e-mails about "cancer cures" and false threats, people should instead remind their friends and family to assess their health once a month.
Brian Gongol guest-hosting with Bonnie Lucas on WHO Radio this morning
It's like dump trucks are pouring money into the economy
The Federal Reserve is going to continue pouring hundreds of billions of dollars into the economy, hoping to keep borrowing costs low.
Cityview says the Des Moines Register will leave its home of almost a century
The weekly newspaper has the scoop on the possible move by the heritage daily in town. But that heritage is being burned to the ground as fast as Gannett can make it go.
Pair of planets 1,200 light-years away look like giant moons to one another
Kepler-36b and Kepler-36c apparently orbit profoundly close to one another, which means each "rises" like the Sun or the Moon do here, once every 97 days on the other. That causes them to have big gravitational effects on each other (imagine colossal tidal forces on the one that has water) and to look much, much larger in their respective neighbors' skies than the Moon does here.
Russian police bust 22-year-old hacker who stole more than $4 million
He set up a botnet that infected more than 6 million Russian computers and stole people's banking information. This is why everyone needs to run antivirus/antispyware software, use a limited-access Windows account for their Internet browsing, and use a webmail service whenever possible.
People don't need "exorcisms", they need mental-health care
A 14-year-old girl in Omaha was nearly killed because her friends and family thought she was being "possessed by a demon". No, she needs clinical attention from someone trained to help people with mental-health issues. There's nothing shameful about seeking out that kind of care -- the only shame is when people come up with excuses instead of helping their loved ones get the treatment they need.
NASA thinks we know the locations of 95% of nearby space objects larger than a kilometer across
We need to know where those things are so that we can anticipate what to do in case one is headed towards us (which could be calamitous)
Parenting and work
Any number of issues are far more complex than the sound bites people put out: "Pay equality", for instance, sounds justified in principle, but there's no way to strike a perfect balance that rewards tenure, productivity, and experience without penalizing parents who take time away from the workforce to raise children. It's like the marriage penalty within income taxes: If we believe that income-tax rates should be progressive, then there's no way to fully escape the fact that a household of two adults totaling $100,000 will pay something more than two individuals each earning $50,000. It's impossible to fully resolve -- so if we're smart, we acknowledge the inherent difficulties and try to find ways to accommodate them as best possible.
Tesla finally introduces its second car -- a sedan for $50,000 to $100,000
It was made available for a very brief set of press test drives, so initial impressions are limited by the very short exposures, but the Wired Magazine driver seemed to find it pretty solidly impressive. Tesla took an interesting gamble, but one that makes sense: Target high-end drivers who are already less price-sensitive than other folks, and use them as the basis for rolling out all-electric cars.
Kudos to McDonald's Canada team
(Video) In a very clever marketing move, they showed exactly how their advertising teams make their burgers look really good in photos and on TV...when they're not so impressive in daily life. Credit deserved for admitting that there's a wizard behind the curtain.
Is there a bizarro undertone to Apple's Siri commercials?
Maybe. The fact they feature well-known people sitting at home all alone certainly is...well...unusual.
"An industrial renaissance is happening [in America], and it's underestimated"
So says Russian steel magnate Alexey Mordashov, who has invested billions of dollars in expanding steel-production capacity in the US. And he's totally right when he says, "What you need to keep most in the U.S. is the entrepreneurial spirit." ■ Meanwhile, the prime minister of Italy thinks the Eurozone could fall apart in a week. And here we see exactly what is meant by the differences between the "real economy" and the "financial economy". There is worldwide demand for stuff of all sorts, in bigger volumes than ever before. People do not want fewer cars, televisions, computers, and dinners out than before -- we want more, and there are more of us occupying this planet than ever before. But the problems allowed by fiscal and financial tricks have caused the process of doing business to become much more difficult for anyone doing business in or with Europe. Nobody there has forgotten how to make things or deliver services -- but unless some adults prevail, the system for exchanging those goods and services is going to undergo some dramatic and painful changes.
Duke University team produces a 50-gigapixel camera
The amount of digital information captured by the 2.5' x 2.5' camera is enormous -- using 98 individual cameras coordinated to produce a single image. The development team points out that developments like this make the question not so much where to point the camera, but exactly how to get the pictures you want from the data. And we're already able to see examples on our smartphones today -- the Motorola Droid Razr Maxx takes an 8-megapixel photo -- just 1/6250th of the 50-gigapixel camera. But that's enough to take a wide-angle shot of an entire baseball park but still be able to zoom in on the ball en route to the catcher's glove.
The abandoned theme park devastated by Hurricane Katrina
Cattle roundup on an Omaha expressway
Surgeons announce successful laser operation to remove tumor from a child in-utero
Curiously, it happened in 2010, and they waited 20 months to announce it to the world. It's really quite uplifting news.
Evidence mounts that the US and Israel are behind the Flame malware
It looks like the dirty program was being used to thwart Iran's attempts to build a nuclear weapon. On one hand, it's nice to see them avoid a shooting war. On the other hand, in a cyberwar, we could all become casualties.
ICANN releases list of potential new generic top-level domains
There are only 22 right now, in addition to the world's country-code TLDs.
Don't get into a fight with someone who buys ink by the barrel
It's an old idiom, but it's even more appropriate today, when a "barrel of ink" is free, as long as someone publishes their thoughts on the Internet. The fight between the creator of The Oatmeal and a band of people who have pirated his material without attribution (and their lawyers) is a good example of how the party who already has the loyalty of an audience (in this case, The Oatmeal) is going to have more power to mobilize a vigorous lobbying campaign than the idiots who think it's fair to rip-off that material without giving credit where it clearly is due.
What the IRS expects you to do to keep your tax records safe from disaster
WHO Radio Wise Guys - June 23, 2012
A quick summary of the radio show today
Rhode Island is going to lose tens of millions because of economic-development incentives
They used the incentives (in the form of a loan guarantee) to get former Red Sox pitcher Curt Schilling to move his video-game company to Rhode Island from Massachusetts. Private investors make and lose money all the time -- but especially on startup-type ventures, they often lose and lose badly. It still defies all kinds of reason to understand how anyone believes that state employees -- who aren't even taking risks with their own money -- can be any more likely to pick the right winners from all of the possible "investments" out there, when it comes to economic development. Government should be exclusively in the business of creating the right climate for the private sector to succeed generally, then getting out of the way for individual firms to succeed or fail on their own. This absurd socialism-by-incentive-package is no more in keeping with the free market than public ownership of particular companies. In fact, it might even be more corrosive, since no-strings-attached government funding routinely means that governments are on the hook for all liabilities, but are never really compensated for the risks to the people's money they put up. Congress has to step in and stop the economic infighting between the states. No other authority has the power to do so.
Living like a sharpened sword
Yes, a little borrowing in youth can lead to "income smoothing" over time
But by the same token, if we enjoy the same degree of life satisfaction (particularly material satisfaction) from the start of our careers until the end of retirement, then what psychological gain do we see from our own standards of living rising over time? There must be some differential kind of reward from youth through old age, if only to encourage us to keep working.
China's looking to make foreign investment there just a little bit easier
The country's regulatory agency for stocks is looking at making it easier for some investment companies to get involved in their stock markets. This reflects the efforts they've been undertaking to encourage people to save less (in bank accounts) and borrow more, as a way to stimulate the private-sector economy there. Too much heavy-handed management, though, has never really paid off for any economy. Keep an eye on this.
Who wants to join the Kremlin's version of Facebook?
Nobody? Good.
Clever adaptation to a demographic problem
An eastern Iowa school district has one really large class -- about a quarter larger than normal. So they're offering a hybrid summer school -- some in-class, some online -- to help get all of the students through with the electives they want. Smart move.
Google's official greeter-in-chief
Before-and-after photos from the Colorado Springs fires
Really sad
High fees are the enemy of good investment returns
Repeat this mantra to yourself three times daily
Crowds apparently aren't always bad for order
Though it's still quite possible for a crowd of people to turn into a rampaging mob with surprising speed
Optimism may be genetic
France retires the Minitel
It was their national internet long before there was global access to the Internet we know today
Living longer leads to...living even longer
And higher expenses, as a result
Live coverage of the Colorado Springs fires from the Denver Post
Personal savings rate in May: Still below 4%
The impact over the long term makes that low a savings rate dangerous
AMC theater chain now belongs to a Chinese firm
AMC claims more than 300 theaters across the country, which were sold for $2.6 billion. The sale -- which happened in late May -- is a case study in the rather large asset transfer that we should expect to see continuing from the United States to those countries with whom we have large trade deficits (like China). There's only so long that others will accept payments on our national "credit card" before they have to start taking hard assets instead. Think of it as though we're now going to a global pawn broker -- since we're not content to live within our means, we're going to have to start selling some of our stuff in order to keep the bill collectors at bay. Though it should be noted that a footnote in the AMC story is perhaps even bigger than the rest of the news -- that DreamWorks SKG is in a partnership a Chinese state-owned media company. Not the kind of financial bedfellows with whom one should be eager to make company.
Personality makes the difference, even in an institution
A writer discussing how her daily commute is about to change -- rather dramatically -- recounts the things she's going to miss about the trip, and one of the things she'll miss most are the individuals working on the trains she rides who add a little bit of personality and color to the trip. This is probably just a little hint about why people prefer to work with some companies rather than others -- the more dry and institutional the outfit, the less attached customers will feel to it. Better to have a little bit of legitimate (some would say "authentic") personality than to become too bureaucratized and dull. (On a sidenote, the writer has been spending two hours a day going to and from work. Short commute times can make a huge difference to one's quality of life.