Reflections on the Depression

Obama just fired off a few speeches on shared sacrifice. Meanwhile, Ben Bernanke is urging the government to spend more to recrank the economic engine. Apparently, Keynes’s popularity came about because he was the only one who offered activist ideas to stimulate the economy (aside from the tired supply-side idea of tax cuts). Not to be cynical or anything, but it seems that everyone turns Keynesian when we enter a recession and become supply-side when we are in boom years. Anyways, we can look at the example of Japan in the late 1980s, when it experienced an asset-inflated bubble, 80% tumble in the stock market, and heavy government spending to stimulate growth. The result has been a decade of stagnation and now the world’s highest debt as a percentage of GDP. What’s more, the Japanese people have essentially capitulated and given up on spending and are instead saving 50% of their wealth in low-yielding savings accounts (even at close to 0% interest).

Other academics have made similar calls for consumers to up their spending to counter the “paradox of thrift” that emerges when everyone saves at once in the face of a recession. For consumers, there is usually no choice; the average person is so indebted that there was no way spending could grow further. The massive credit overload that drove economic growth in the Bush years turned out to be illusory. The ensuing cycle of corporate losses, job cuts, and more consumer spending cutbacks makes for a deflationary cycle that is difficult to counter. Again, I reference Japan’s ongoing experience of collapsing consumer confidence, which is not an unlikely fate for more countries that don’t clean up their financial systems. However, on a personal level, I would recommend to everyone I know to save more in the face of the unknown. It’s a good idea to always spend less than one’s income while building up rainy day funds and long-term nest eggs. Personally, I save about 80% of my meager earnings each month – ab0ut $1600 from my TA job gets funneled into my savings account on payday, without debate. My checking account always has $500 in it at the beginning of each month, which is the hard limit for any spending in that month (typically $385 rent and $100 food). Since the recession hit, I have talked of cutting back even more, to the derision of Wayne, who says, “Any more belt-tightening and you’ll sever your GI tract.”

Granted, there have been moderate voices calling for alternatives to the current overreaction. Most notably, a package proposal by Jeffrey Miron relies on a rebalancing of spending, taxation, and immigration to get the country out of the malaise. However, those ideas are politically nonstarters because of their innocuous nature. The changes would be smart even during boom years, but in desperate straits, politicians want to be seen as active and energetic. What did Obama/Summers/Geithner say about this? Something like “it’s better to err on the side of action”? Perhaps not always. Greg Mankiw has a graph showing that in the long run, economic activity decreases due to crowding out. In other words, spending more might make the recession shallower, but it will make everyone worse off 10 years from now.

What is amazing about the current recession is the global nature of it. Economies everywhere are collapsing. Count Iceland, Brazil, the Eastern European Bloc, Russia, Dubai, Japan, and UK as the countries whose exposures are so deep that they will need bailouts from the IMF in the end (or at least see massive social upheval and unchecked populist rage). There will be widespread misery and maybe even some revolutions akin to after the First World War before it all passes. On a smaller scale, deteriorating job markets have are depressing wages for those who still have jobs while at the same time the unemployed cannot hope to find jobs that pay as much as they once did. If nothing else, the range of jobs hit – from executives to golddiggers – has been breathtaking.

Epiphany of the Day

Illustrating the birth a new open-source developer:

Hmm… There’s this thing called Linux.
Ubuntu seems to be the distro everyone’s using.
What’s does Debian-based mean?
Gah! I’m fed up with my programs being out of date, let me switch to Fedora.
Fedora’s stability sucks. How about Arch/Gentoo?
Even with the latest program, ___ feature doesn’t exist/work properly.
Hey wait, the source code is available.

Women in CS

A recent article on the NYT reminded me of a glaring issue in academia – gender imbalances in different departments. I do not consider this a social injustice like my liberal arts classmates do; rather, I think it’s a natural reflection of societal pressures and preferences. Like it or not, men are drawn to high-paying, high-pressure situations with minimal social contact. Engineering actually piqued the interests of some rather nerdy math whizzes I knew from high school, offering them a challenge to keep them away from drugs hacking DoD computers. Women, on the other hand, tend to be drawn to more cooperative disciplines that involve dealing with people. So, rather than constantly wonder how to “solve” the problem of a shortage of women in technical fields, let’s attribute it to a societal phenomenon that’s best left alone. After all, why aren’t we trying to solve the shortage of women in American Football or men in English class? Heck, women outnumber men in terms of undergraduate degrees bestowed and we’re not raising a ruckus about that. The cynic in me says that the men probably like it that way.

Some would argue that we are losing perspectives or a diverse set of views. Nonsense. There’s still a baseline 20% women in computers. They could provide the insight. If not, the men in the field who want female input can consult female colleagues, friends, or neighbours.

With that said, we should carefully examine and understand the structural causes of this difference. After all, we know that this difference in preference is not bestowed at birth; countries in Eastern Europe boast much higher proportions of women in technology. In other words, is there something about American culture that causes women to prefer interacting with people, which results in fewer choosing to go into CS.

I had a discussion of this last year with a female classmate in the CS deparment at Berkeley. She said, “we (women) like computers, but not the isolation,” which reinforces my theory that it is the perceived nature of computing that prevents it from becoming attractive to women. That is to say, women are exposed at an early age to images of the technogeek who speaks in l33t and other jargon but sadly lacks social skills; this creates a stereotype of the field as not being conducive for interpersonal interactions.

For other conversations on the matter, I present an old article by Phil Greenspun of MIT way back in 1995 as well as this post with excerpts from papers, well-argued points, and a nice summary of the issue.

Japanese Men Discover Feminine Side

Japan has always been a place with certain traditions, some of which were adopted from elsewhere. Certainly, the concept of manhood is something that has changed over the years, but the latest rebellion against the salaryman ideal installed after WWII will certainly be unfamiliar and awkward for most western readers. The lowdown from the Washington Post is that gender roles are shifting as men take on more of a nurturing role. This is counterbalanced by women becoming more aggressive in daily life and driven to succeed in the workplace.

The cultural transformation is also captured in some other events: the growing popularity of men’s bras and the anorexic as an ideal image.

A quote from the latter link offers some insight into the extent that traditional gender roles have changed:

Both Shirakawa and his girlfriend like the fact that she weighs more than he does, and is the leader of the couple. “She’s a lot stronger than I am, can lift heavy things and go drinking until dawn. I admire that about her, and feel protected when I’m around her,” he said. Older than he by five years, it was Shirakawa’s girlfriend who made the approach, started the dating process and decided what course their relationship would take.

Asian romantic dramas are also notablely different from western ones in that instead of focusing on issues around consummation and the aftermath (adultery, one night stands), the theme is fantastical idealizations (couples that want to be together but are prevented from doing so by factors beyond their control – e.g. class differences, physical distance, another love, or parental intervention). Romantic comedies usually end with the girl “confessing” her feelings and the couple kissing for the first time, after a season of awkward fumbling.

When viewed in the context of global norms, this has been the result.

News Roundup – Square Root Day Special

It’s square root day! And that doesn’t come around very often.

To start us off, Ginny Brown-Waite, Republican congresswoman from Florida, had this to say about Tim Geithner, “Every time a statement is issued by you, the stock market plummets.” Yikes! We don’t know whether to call that “negative” or “depressin”.

Meghan McCain, the daughter of the presidential candidate, is having trouble finding boys. Not in attracting them, but in finding one who measures up to her own exacting standards. What are they? Well, you can’t have voted for Obama, and you can’t be a rabid Republican. Hm… That just about rules out everyone but the Nader or Barr voters.

Ladies, are you reevaluating your priorities on the dating market given the current economic downturn? Willing to settle for big bucks over a real personality? Well, Melinda Gates is here to tell you that marrying for money isn’t all it’s cracked up to be. She let slip: “Every now and then I look at my friends and say ‘Ooh, I wouldn’t mind having that iPhone.’” Ouch! Steve Jobs circa ‘95 doesn’t look too bad now, eh?

The Best Computer Deals

This is something of a public service announcement for people who are in the business of buying PCs. Actually, even those who build their own computers should consider some of the models I’m about to suggest; I’ve found that there are exceptional price savings that one can’t get with a custom build. Then again, the performance, tweakability, overclockability, and freedom of component choice offered by building from parts from Newegg and ZipZoomfly is something to weigh against a higher price. For some enthusiasts, there is also the matter of personal pride.

Enough of that. Let’s get on to the meat of this post.

My recommendation for a generic desktop would be the cheapest Vostro that is available at the time on Dell Deals for Small Business. The base model at the time is a $399 Vostro 220 Mini. The essentials of the configuration are:

Intel Core 2 Duo E7400 (2.8 GHz, 3MB L2 Cache, 1066 MHz FSB)
3 GB 800 MHz DDR2 RAM
250 GB 7200 RPM Hard Drive
16X DVD +/- RW Drive
Intel X4500HD Graphics (Integrated)
19″ Monitor
That’s an unbeatable deal for a desktop!

For notebook computers, my preference is to go for a well-engineered and long-lasting computer from Lenovo. This is after my two previous consumer-class notebooks experienced various hardware failures after around 3 years (HP and Dell respectively). Lenovo machines are pricier for a given config, but are built like tanks and can last up to 10+ years. They are also thinner, cooler, and lighter than comparable models elsewhere.

To get savings, go to the contractor’s page and log in with a code. At the time of posting, that code is “familyandfriends”.

Joke of the Day

“If the worst comes to pass, and there’s now a slightly greater chance that it might, at least it might explain why we’ve never heard from extraterrestrial civilizations: Maybe they built Large Hadron Colliders of their own.”

Courtesy of Fox News.

Weird, Freaky, and Beautiful at the Same Time

Found while browsing the Times for financial news.