The Daily Parker

Krugman this morning dug a little into Paul Ryan's infatuation with Ayn Rand, specifically around Ryan's admission that he likes her monetary policy. Through a character in Atlas Shrugged, Rand yearned for the days before "fiat" money replaced good, hard specie. In other words, before the 18th Century:

Aside from revealing just how much of a Rand fanboy Ryan is — urban legend, my foot — this is interesting because that 23 paragraph speech isn’t just a call for the gold standard; it’s a call for eliminating paper money and going back to gold coins.

This had me wondering: when was the last time the economy actually ran on specie, rather than notes?

Well...as of 1813 there was only $7 million worth of coins in the hands of the U.S. public, versus $52 million in bank notes. So even two centuries ago, we were already a paper-money economy.

And this means that Ryan wants to turn the clock back two centuries, not one.

Most people I've known over the years who believed in Ayn Rand's philosophies as teenagers eventually grew out of it. Paul Ryan apparently hasn't spent enough time interacting with reality that he's moved on. There is a reason that Objectivism appeals to adolescent, affluent white boys: it's very close to the way adolescent, affluent white boys already see the world. In some: "mine!" It's sad when affluent, adolescent white boys stay adolescent well into their Congressional careers.

The National Hurricane Center predicts that Tropical Storm Isaac, currently smashing through the windward islands, may strike Tampa during the GOP convention:

Of course, five days out the forecast has tremendous uncertainty. The storm could change course or dissipate before hitting Florida, for example. But Tampa Mayor Bob Buckhorn, speaking about next week's GOP convention, is absolutely willing to call it off if they need to evacuate Tampa:

So, my question is, now that the religious right has all but taken over the Republican Party, what would it mean if an "act of God" shut down their convention in a Presidential election year?

At least according to the Onion:

Groupon, now trading somewhere around 25% of its IPO value, continues to unimpress people:

The disclosure that I found most revealing in last week's financial report was the relationship between Groupon's marketing spending and its growth rate. Traditional daily-deal revenue declined 6.9 percent from the first quarter to the second, as Groupon dialed back marketing outlays by 24 percent.

Hawking Groupon shares in the IPO roadshow, Mr. Mason said the company eventually would be able to cut back on marketing without sacrificing growth. This was meant to assure prospective investors that money-losing Groupon would become “wildly profitable,” as Executive Chairman and co-founder Eric Lefkofsky put it in an illicit media interview during the IPO registration process.

My guess is that another quarter or two like the last one will be enough to ease Mr. Mason into a position better suited to his eclectic interests. The challenge will be finding a replacement with certifiable executive skills and strategic vision.

Which prompts the question of what a better strategy for Groupon might be. Mr. Mason talks about becoming the “operating system for local commerce,” jargon that could mean anything—or nothing. Corporate mumbo-jumbo won't help Groupon now. It needs a new business.

I've noted before, Groupon's IPO benefited only one group of people: Groupon investors. The company has an easily-copied idea, and appears to lose money on every coupon it sells. Good on them for having $1 bn in cash; they'll need it.

This is impressive:

Stephen Wizenburg, writing in the Chronicle of Higher Education, bemoans his students' lack of boundaries:

Posting and tweeting intimate life details are now so normal for them that they think nothing of cavalierly giving too much information to surprised professors.

Allison walked into my classroom apologizing for missing two weeks of classes by saying she had been in rehab for alcoholism. Stan's excuse, stated in front of the class, was that drugs he was taking for a psychological disorder had caused him to oversleep. Greg said he didn't have his assignment done because he had to go to court after being arrested for punching a guy in a bar fight. Carly texted me that she couldn't make it to class that day because she was in the hospital after having a miscarriage.

A new advisee, Amy, was in tears as she asked if she could shut my office door. It was her first semester, and she had always had a bright smile on her face in the classroom. But in my office, she told me her grades were suffering because she was having an affair with a local married TV reporter.

Such intimate details used to be considered too embarrassing to share. But with Facebook and Twitter, young people think nothing of confiding in strangers. Often the less the students know the person they are communicating with the more willing they are to spill. And they do it bluntly, now that they are used to summarizing life in 140 characters.

To some extent it sounds like the usual narcissism of children. I wonder, though: what will happen to expectations of privacy 20 or 30 years from now, when these kids grow up?

The title says it all. I've moved Hired Wrist, my dad's brochure site, up to my Azure VM, leaving only Weather Now, plus my bug tracking and source control applications, in my living room the Inner Drive Technology Worldwide Data Center.

I'll move the two third-party apps next weekend. My experience moving Hired Wrist this morning suggests that moving Weather Now will be, as we say, "non-trivial" (i.e., bloody hard).

This weekend's weather forecast in Chicago predicts the coolest weekend since May 12, 14 weeks ago. Through Sunday temperatures should be 3°C below normal (days in the low 20s, lows in the low teens), with sunny skies and cool northeast breezes. September, in other words.

The Tribune points out:

Only 6 of past 142 years have produced Aug. 18 overnight lows cooler than those expected by Saturday morning.

Not only will daytime readings be cooler than typical for mid August, nighttime lows will be cooler than normal as well, particularly in areas farthest from the city and Lake Michigan---both of which temper early season cool spells by adding heat.

Friday night/Saturday morning's predicted 12°C low would become Chicago's chilliest minimum temperature in over two months and would qualify as one of the six coolest early season readings for the date since 1871.

It will warm up mid-week, though not to the temperatures we suffered through in the warmest July in history last month. I've got the windows open, and I'll probably be able to keep them open until Wednesday.

Parker likes having the windows open as well, but he's not used to hearing the neighbors—in particular, the neighbors' dogs. I hope he figures it out, because the random, single woofs at 2am are really aggravating.

From the Atlantic, an explanation of how dogs dry themselves:

A dog can shake roughly 70 percent of the water from its fur in four seconds. Nearly three quarters of the moisture in the time it took you to read that last paragraph. Pretty amazing stuff.

But that champion efficacy raises more questions than it answers.

First, why does it work so well? How long does it take your socks to dry a comparable amount if you get them wet? How are they generating all that force? Second, many mammals are capable of the shake. Is how your dog does the same way that a mouse or a lion does? Third, why do animals do the shake at all? What's the evolutionary advantage that it confers?

It tickles me that part of the research involved dumping water on mammals of different sizes. If you're going to use animal subjects, annoying them is probably not the worst thing you could do.

A friend of mine, who lives in a sea of Tea Partiers, sent me this question today:

How would you refute/debate/argue against the following opinion:

"I think it's [Paul Ryan as Romney's VP choice] a good choice because I sincerely hope the collective national attention and focus will be on the fact that we are on the verge of becoming the next Greece. And that the only hope of prosperity for our children is massive cuts in government spending and entitlement reform. I'd even be in favor of raising taxes if we could slash government spending by > 25%. Otherwise, we should be teaching our kids Mandarin and Hindi because that's where the opportunities will be. Just like most young Greek grads have left Greece for opportunity, so I fear our kids will have to do the same."

Of course I'd be happy to help. Let me see if I can distill down how Paul Ryan is either a dangerous, right-wing radical, or a dangerous, right-wing fraud.

Essentially it comes down to your view of government. If you believe that government's job is to spread risks and benefits, in order to make life better for everyone, then vote Democratic. If you believe that people should be individually responsible for all the good and bad things that happen to them, then Paul Ryan's your man. And by "all the good and bad things," I mean that Paul Ryan believes it's OK for someone to get kicked to the street if they can't afford the medical bills they incur after their employer lets them work in toxic fumes in order to save money on safety gear so Mitt Romney can get a bigger dividend check.

Or, more simply, vote for Paul Ryan if you want to return to the good old days of feudalism.

But let me address the specific panic and obfuscation that the Tea Party is trying to spread. The argument they make is that our long-term deficits are a problem, and in order to fix the problem we need to stop spending money on the government.

First, it's not clear that our long-term deficits are a problem at all. Second, even if deficits are a problem, you can also fix a deficit by raising revenue. Third, cutting spending in a recession is like curing anemia with bloodletting.

And fourth, they're lying. The Tea Party doesn't care about deficits, they care about taxes. Paul Ryan believes that government does nothing good, and therefore paying taxes to support it is theft. (Yes, he actually believes that.) Their goal is to reduce government to almost nothing, so using deficits as a way to scare people into shrinking the government is just a means to an end.

Let me go a little more in depth.

We really do have a long-term deficit problem, mainly because we borrowed nearly $3 trillion (so far) to pay for two wars without raising taxes to cover the debt, and also because our current Social Security funding formula doesn't cover the changing demographics in this country. Now, you can have any opinion you want about wars or taxes or old people, but simple arithmetic shows that if you borrow money to pay for something because you don't have the cash on hand, then you have a debt. So Republicans are correct that if we *do nothing at all* to fix our long-term problems, in about 20 years we'll be fucked.

We Democrats think planning to do nothing for 20 years is preposterous. Of course the U.S. will fix the long-term deficit. But talking about long-term debts in the middle of a short-term disaster misses the point. We need to stop the bleeding before worrying what the scars will look like.

Right now, businesses are scared to hire because no one's buying; and no one's buying because they're out of work; and they're out of work because businesses are scared to hire; ad infinitum. In order to get out of the depression, we need get people to spend money, which will get other people to making things, which will get employers to hire people, which will get them to spend more money, which will grow our economy.

So how to get people to spend money? It turns out, there is one employer that can hire and pay people without caring about profits or where the money would come from: the U.S. government. We've done it before, in 1938. We built roads, bridges, railroads, airports, telephone lines, electric power plants, and the biggest military the world had ever seen. Once the war was over, and we wound down the military, we still had roads, bridges, etc., which improved everyone's lives.

Where will the money come from, I hear you ask? Well, we can borrow it, and pay it back later when we're earning more.

It turns out, people are not only loaning us money, they're paying for the privilege: 2- and 5-year government bonds have negative interest rates, and 10-year bonds are at zero. Usually if you loan the government $100 for two years, you get back, say, $104. Right now people are loaning the government $100 knowing they'll only get back $99 in two years or $96 in five, because it's the only truly safe investment left in the world. They know the U.S. will pay them back, but they're not sure anyone else will.

Even with the wars and the free money, U.S. government debts are only about 60% of GDP, which is roughly where they were in 1955. In 1945, our debts were almost 120% of GDP, and at the end of the war, many people, and most Republicans, predicted disaster and wondered how we'd ever pay back the money. But in the 55 years that followed (1945-2000), we had the biggest economic growth of any country in history. Our deficits disappeared completely. In 2001, the day W took office, we had a $236 billion *surplus.*

If we take all that free money and put it towards fixing our infrastructure, we'd (a) put money directly into the economy, (b) get people working again, (c) throw states and cities lifelines (all those working people will be paying taxes, after all), and (d) make future growth more likely because we'd have fixed our infrastructure.

The Republicans have blocked the President's efforts to do all that because it would remind people what government is for. Also, we'd have to raise taxes eventually, which would fall disproportionately on the people best able to pay them.

Now let me compare the U.S. with Greece, China, and India, for just a second, to show why people who worry about us turning into them are irrational or lying. (Paul Ryan is in both groups, it turns out.)

Greek government debts are 165% of GDP and rising. In the history of the U.S., we've never had that much public debt. Greece household debts are also staggering. But unlike the U.S., which gets free money from people, Greece is paying through the nose. Then they have to borrow just to pay interest, which makes the debts even higher. And Greece borrowed all this money in euro, rather than drachma, so as the value of the euro rises, Greeks have even more difficulty paying their debts.

Ordinarily when this happens, a country simply devalues its currency (or has its currency devalued by the market), which makes the debts easier to repay. That is, if I'm Greece, and I borrow 100,000 drachmas at an exchange rate of one euro to 100 drachmas, I owe €1000. As the Greek economy slows down, it costs more drachmas to buy euros, because no one wants drachmas anymore. Suddenly one euro is worth 200 drachmas. The loan that cost €1000 is now only worth €500, which is a lot easier to repay. Sure, my lenders are pissed off, and I can't afford German cars anymore, but at least people aren't starving on the streets. (Food and housing tends to rise and fall with the currency, so 500 drachmas will likely buy the same amount of food or housing in good times and bad. But that BMW that cost 2m drachmas at €1 to 100 drachmas costs 4m drachmas at €1 to 200 drachmas.)

Greece is fucked because they don't have drachmas anymore; they have euro. They borrowed all their money in euro, and they don't produce anything anyone wants to buy with euro, so they have no way of repaying the loans in euro. But they're stuck with euro-denominated loans. Oh, and food costs the same number of euro as it did before, but half the country's unemployed and has trouble paying for it. Also, Greeks refuse to pay taxes, but that's another matter.

This happened to Argentina in 2000. Argentina set the peso at one U.S. dollar per peso, so that you could walk into any Argentine bank with 100 pesos and walk out with $100. Then their economy hit a slump, their interest rates skyrocketed, people started to dump pesos and buy dollars, but the government couldn't buy dollars anymore because of the slumping economy and high interest rates, so people couldn't get their dollars, so they got fucked. The government finally removed the dollar peg in 2001. Poof! The peso fell overnight to 20c ($1 = 5 pesos), and 80% of their debt evaporated. Unfortunately 80% of people's life savings also evaporated...but they were able to start over. Now, 11 years later, Argentina is thriving again.

Greece can't do that unless until they leave the euro. Meanwhile, their college graduates are generally stuck in Greece, because unless they speak fluent German or English, no one outside Greece will hire them.

So we're not Greece. First, because our debt ratio is still sane; second, because people are loaning us more money than we want to borrow; third, because we make more shit that people will pay dollars for than any other country in the world; and fourth, because unless the Tea Party completely knock us off the rails like they almost did a year ago over our debt ceiling, our fundamentals are pretty sound.

India has a billion people, but (a) 400 million of them can't read, and (b) their economy (GDP $1,850 bn) is smaller than California's ($1,913 bn). China has 1.3 billion people, about a third of whom can't read, and their economy ($7,300 bn) is only about half as big as ours ($15,300 bn). We think. Actually, they lie about their economic numbers all the time, so even saying "their economy is big" is only a guess. China will someday overtake the US in economic output; maybe so will India. But not for a century at least, and only if they're really lucky.

I'll just skip the ignorance of Indian and Chinese linguistics for now, except to say English is one of India's two official languages, and Mandarin, while the dominant language of China, only accounts for about 60% of the country.

In conclusion: the Tea Party's talk about cutting the deficit is a smokescreen for their ideological goal of shrinking government "so small we can drown it in the bathtub," as one of them said in the 1990s.

Why this goes along with racism, misogyny, and a pathological fetish with guns, I simply don't know.

I hope this helps. :)