Promoting Local Craftspersons

I have some super miscellaneous links that have just been hanging out in Google tabs that I've been wondering what to do with. 

I support local craftspersons and respect people who make actual things rather than find clever ways to get more from the things other people make. (These people of course have their place in society as well, but, in a sense, I sympathize with the feudal Japanese class system's putting miscellaneous businesspeople last.) Anyways, I met the proprietors of the following brands and others at a local crafts fair a few months ago...

On the Cusp Pottery - Very bright and cheery!

Fumihiko Mochizuki - There's definitely an element of wabisabi in there. I wish there were a bit more online presence. Perhaps some miscellaneous businessperson should come along...

Finally, Walter Perlman - This guy is an artist. I had a ten or fifteen-minute conversation with him, and he kept going into detail about how he hates photoshopping and how there is no photoshopping in his pictures. Like a lot of photographers, it seems he suports himself via weddings, bar mitzvahs, etc., but his articstic images are just wonderful. I've refrained from posting any here out of respect for the artist, Follow the link above. 

Do any readers know any other local craftspersons who deliver over the Internet?

The Solutions to Poverty and Unemployment Will Look Something Like This: An Interview with Rachel Cook

Rachel Cook is a friend of mine from college who let me interview her about her upcoming film, currently titled the Microlending Film Project. Rachel shot footage for Kiva - an awesome organization that has stoked the fires of entrepreneurship in Africa, Southeast Asia, and around the world, and is now stoking the fires of entrepreneurship here in America:

    

The Microlending Film Project (film title TBD) was conceived as a passion project by Futures Trader turned Director/Producer Rachel Cook after she read a Nicholas Kristof op-ed in The New York Times late one night at a Chicago trading desk.  The article was about how empowering women in the developing world with tools like microfinance can bring about positive, sustainable change (Saving the World's Women).

The project has been undertaken with the best interests of poor women at heart, as the film seeks to show a balanced, comprehensive picture of microfinance through the lens of the personal stories of the women it impacts. The issue of transparency and its paramount importance to the industry is a key focus, as is showcasing best-practices and suggesting how microfinance can most effectively be used as one development tool in a larger box both domestically and abroad, specifically in terms of the opportunities mobile banking and crowdsourcing promise.

The Microlending Film Project is holding a DVD pre-sale and offering other perks to raise funding for post-production.  To view a trailer and/or purchase a DVD, please follow this link: http://www.indiegogo.com/Finishing-The-Microlending-Film-Project?a=238586&i=addr

       

The filmmaking crew is also actively seeking out investors at multiple levels. If you have an interest in learning more about investment opportunities in the film, please contact Rachel Cook at rachel at microlendingfilm dot com.

   

Anyways, here comes the interview:

    

Christopher Carr: How did you come to where you are now? Describe your life after graduating from college. How did you choose your current path? Where do you see yourself going after this?

     

Rachel Cook: I knew I wanted to do something involving writing and film, and after studying for a semester in Los Angeles junior year at Duke I knew I hated that "city". I'd heard about Second City/iO and all of the comedy writers and performers it had produced, people like Bill Murray, Chris Farley and Tina Fey, and studying there seemed like it provided more of a sort of clear path than would toiling in obscurity somewhere else, so I moved to Chicago. While there, I picked up an equities trading position to pay the bills, and I took a ton of improv classes and put on a few shows.

   

While it was gratifying to put on a show and have 30 people come, or even say, 5, obviously film can reach a much larger audience, so I think that notion was percolating in the back of my mind through the Second City period. Meanwhile, a few years in to my Chicago tenure, I started trading Futures on the European shift, which was in the middle of the night of course, Chicago time.

  

The trading environment was so surprisingly sexist that it really affected me. I worked at four firms total - three in Chicago and one in Manhattan - and I was always the only girl trader, or one of a few. It was definitely one of the last bastions of old school sexism and it was infuriating and upsetting. So I guess that's why, one night in September 2009 when I came across a Kristof op-ed in the NYT about the positive impact of microfinance globally, particularly on poor women, that I immediately felt compelled to text my sister and tell her that I was going to make a film on just this topic. Microfinance appealed to both my feminist sensibilities, and to the interest in good investment I'd cultivated while on the trading desk.

   

From there, it was just a matter of figuring out how the hell to make a global feature film, because I definitely didn't know how to do that, and we ended up shooting on four continents. In hindsight, I'm glad that I was arrogant and ignorant enough about the process to take all of this on; and it's grown from here. I quit the trading job I was working in Manhattan in November of 2010 and started working on the film full time, and we just wrapped principal photography this past week in Detroit, so we'll be heavily editing from here on out.

  

Going forward, I plan to collaborate with Duke and the iHub, a shared start-up space in Nairobi that we discovered when filming, to launch a social gaming application that facilitates mobile-to-mobile microlending across continents. It's in its very early stages, but we have high hopes.

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Featured Find: Banks, Bailouts, and Moral Hazard

Dave Schuler responds to a question from a reader. Here is an excerpt:

This post is a response to a question asked of me in comments. Here’s the meat of the comment:

"My main point is its the incentives. Bailouts create a bad incentive structure and trying to stop that is going to be costly. The longer it goes on the costlier it gets. Since we’ve already done this round of bailouts we have to wait for the next, and my claim/prediction/forecast/whatever is that the next round will be even bigger. And the fallout from not bailing out will be even larger than if we hadn’t done it now."

and, if I understand it properly, the question is what do I think?

I disagreed with the way the major banks were dealt with in 2008 and 2009. I thought it was costly, created moral hazard, and, worst of all, didn’t address the underlying problems of the banks. My preference was to do something analogous to what the Swedes did with their banks in the early 1990s and to what we did with S&Ls following the S&L crisis here in the late 1980s.

To refresh your memories as a result of misfeasance, malfeasance, and nonfeasance nearly 750 S&Ls and roughly 1,600 banks failed between roughly 1985 and 1991. Volumes have been written about the crisis, its aftermath, and its implications and I’m going to explore it much farther here. I only want to make two points about it:

• The facts of it should dispel any claims of our having any particular aversion to nationalizing banks.
• The scale of it should call into doubt any ideas that dealing with one very, very large bank or even several very, very large banks is impractical. If dissolving Citibank is more complex than dissolving 750 S&Ls, I cannot take arguments about increased returns to scale seriously.

I also think there are two distinct issues both of which are sometimes bundled together under the heading “moral hazard” but which are actually quite different. Moral hazard is properly considered the actions a particular course of actions incentivizes going forward. When you reward banks by giving them the largest payday loans in history to tide them over until their next binge, pay interest on reserves, and allow them to earn interest on Treasuries, you convince the managers of those banks that they have a property interest in the U. S. Treasury which will indemnify them against loss, come what may. When you bestow these gifts only on the largest banks while closing the smaller banks so their business can be gobbled up by larger ones, the ensuing consolidation increases the necessity of preserving future institutions whose failure would present systemic risk down the road. If a bank is too big to fail it is too big to exist.

The piece is short and offers what is probably the most cogent and concise description of the present moral hazard with regard to bailouts I've come across.

Hack Yglesias on Dr. No

Matt Yglesias sums up his views on Ron Paul:

After looking at his positions and statements, the most remarkable thing is that if it weren’t for his loud fanbase of self-proclaimed libertarians you wouldn’t really think this is the platform of a libertarian. He’s loudly trumpeting his plan to impose criminal penalties on women who terminate their pregnancies and he makes it clear that his interest in freedom doesn’t extend to the freedom of anyone unfortunate enough to have been born in a foreign country. His campaign slogan of “RESTORE AMERICA NOW” is strongly suggestive of conservative impulses and nostalgia for the much-less-free America John Boehner grew up in. The mainstay of his economic thinking is the ridiculous proposition that “[t]here is no greater threat to the security and prosperity of the United States today than the out-of-control, secretive Federal Reserve.” Not only is Paul’s goldbuggery nutty on the merits, like his affection for forced pregnancy and severe restrictions on human freedom of movement it’s difficult to see what it has to do with freedom. The freedom of the government to set a fixed dollar price of gold? America’s current monetary policy—a fiat currency that’s freely exchangeable for other currencies and commodities—is the free market position.

Unless I'm misunderstanding something, I'd consider this rare hackery from Yglesias. Ron Paul’s opinions on the Fed and the gold standard may be unorthodox, but they are not “ridiculous” or “nutty” simply because Matt Yglesias asserts that they are.

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My Latest at the League of Ordinary Gentlemen

I've decided to stop cross-posting altogether. Cross-posting cheapens posts and reeks of empty self-promotion. Go read and comment at LoOG. Here is a link and an excerpt:

In order to pretend to have a meritocracy, there must be some semblance of fairness. Since there are only limited resources available to devote to finding the person most deserving of a particular station, some element of abstraction is necessary. Hence, the cover letter-resume one-two punch. (Japan maintains its meritocracy – more successfully I’d argue - via an elaborate public examination system.) The errors wrought of abstraction are enough of a problem to begin with that when (1) gatekeepers and applicants alike forget the reason why cover letters and resumes exist in the first place and start seeing them as ends in themselves; and (2) the number of people tasked to evaluate resumes and cover letters decreases significantly while at the same time the number of resumes and cover letters thrown at a particular job increases significantly, the entire meritocratic job procurement system begins to hemorrhage à la BNET. LinkedIn, a guerrilla wielding a double-machete, jumps out of the jungle to cut through the staggering and blood-gushing meritocracy. Investors applaud. LinkedIn is pro-NMJP, in contrast to BNET’s cargo-cult pro-meritocratic posture. LinkedIn is also favored by companies and well-organized. Before joining LinkedIn, it took me several days to find one job I was interested in, write a cover letter, tweak my resume, and not get any kind of human response; in the same amount of time using LinkedIn, I can fire off ten or fifteen applications and get immediate and cordial rejections to them all. This represents a major increase in productivity; plus, constructive negative feedback is priceless.

Featured Find: Stabilizing into a Crisis

Joe reads Ezra Klein regularly. I read him sometimes. I find him unusually penetrating and accurate but rather boring and irrelevant most of the time (just my opinion); so while I don't hate reading him, I simply consider reading other writers to be better investments of my time. This time is different. This Ezra Klein piece is passionate, it resonates, and I think, it's accurate - it's perhaps one of the best descriptions of our (economic) time I've come across:

But the Dow Jones industrial average isn’t diving because spending has risen, deficits have grown or stimulus policy has changed. It’s diving because of forces Washington can’t control, and in many cases, doesn’t understand very well. How many members of Congress do you think could give a coherent account of what has happened to oil or steel prices over the past three years? Or what’s happening in the euro zone? Or to the yuan?

A dramatic gap has opened between the economy as Washington sees it — and wants to intervene in it — and the economy that exists. Whatever weak recovery we might have hoped for is being hindered by global commodity prices, consumer deleveraging, fears of flagging demand in emerging markets, earthquakes in Asia and much more. Globally, it’s been an almost uninterrupted run of crises and bad luck. Meanwhile, Washington just spent two months arguing over whether it would pay its bills or spark an unnecessary financial crisis. 

The whole article can be read in three minutes. I highly recommend it.

Fewer Farms, Larger Farms

Right now, the world is in the midst of a food crisis. Some might contend that we never fully recovered from the food crisis of 2008, but what is certain is that food prices are rising. The reason for the spike is open for debate, but some combination of a growing demand due to population growth, an increase in the frequency of extreme weather events (floods in Pakistan, the Moscow heatwave, etc.), an expanding middle class with a growing taste for meat and dairy, global trade policy, commodity speculation, agribusiness lobbying, ethanol, and many other factors is likely. The success of the Green Revolution beginning in the 1960’s caused food prices to fall year after year for decades. With the world assuming that the food problem had been solved, the limited number of development dollars went to researching other global problems, namely solving public health issues like HIV/AIDS, tuberculosis, and malaria.

 
Global warming was another issue. Over the last two decades, economists and climatologists have been contemplating the effects of global warming on food production. The consensus was that, while climate change and the corresponding shift in weather patterns would have an adverse impact on agriculture in certain regions of the world, a rising temperature could actually open up new pockets of arable land. The one bright spot of climate change was that the increased amount of carbon in the atmosphere would actually improve crop yields. Unfortunately, that hypothesis proved to be overstated, at best, and quite possibly downright wrong. It turns out that a warmer world, despite what the computer models may say, is not good for food production.
 

The Economist recently had a special report on the feeding the world. The articles were thought-provoking and alarming, and should galvanize a stronger response from the developed world. As food prices increase, the people who are hit the hardest are those spending the highest percentage of their annual income on food. So, for a person of the developed world, a dramatic increase in the price of maize is less apparent on his grocery bill than it is for the rural farmer who is spending 60% of his income on maize. For this reason, the 2008 food price crisis led to riots in some countries and was hardly acknowledged in others. For the 100 million people driven into extreme poverty as a result of the spike in staple crop prices, the prospect of another food crisis in 2011 is likely terrifying, particularly if they understand the challenges in feeding nine billion people over the next half-century.

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Does Per Capita GDP Mean Anything?

There are various ways to measure the level of a country’s development. Choosing the right methodology for quantifying economic status is critical for thinking about the problem of poverty effectively. On a macroeconomic level, the most common indicator is per capita GDP. But I am not sure if per capita GDP is really a good measuring stick for the relative prosperity of a country. The statistic is used as a proxy for development, without taking into consideration the relative concentration of wealth.

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On August 2nd

You don't want this baby seal to be clubbed to death, do you?The brouhaha over August 2nd as a firm deadline to raise the nation's debt ceiling has at least some element of Washington Monument Syndrome.  From Wikipedia:

Washington Monument Syndrome, also called the "Mount Rushmore Syndrome", is the name of a political tactic allegedly used by government agencies when faced with reductions in the rate of projected increases in budget or actual budget cuts. The most visible and most appreciated service that is provided by that entity is the first to be put on the chopping block.  The name derives from the National Park Service's alleged habit of saying that any cuts would lead to an immediate closure of the wildly popular Washington Monument.  The Washington Monument Syndrome emerged as a euphemism for cutting the most visible services after George Hartzog, the seventh National Parks Director, closed popular national parks like the Washington Monument and the Grand Canyon for two days a week in 1969. The intent of the closures may not have been to get people to complain to Congress, but the effect was that Congress received complaints, Hartzog was fired, and the funding was restored.

Here are some more examples of the phenomenon in ascending order of ridiculousness:

The Zakim Bridge from Cambridge to Boston is one of the Boston's most popular landmarks.  In April 2009, the MBTA faced budget cuts and billions in debt still lingering from the Big Dig and decided to turn off the bridge's famous lights, which would save a whopping 1/30,000 of the organization's debt.  The ignorant public responded to this stunt by demanding that the MBTA's budget be raised so the lights could be turned back on.

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Slipping a Slurpee While the Economy is in a Ditch

No need to help me out the ditch, doing just fine on my own - by Michael PereckasThe U.S. economic recovery seems likely to stall yet again as it attempts to finally get out of the ditch.  In an economy at full employment 18,000 jobs added would be a bad jobs report (over 100,000 new jobs a month are necessary just to keep up with population growth), with 9%+ unemployment 18,000 new jobs is a disaster. 

Our best hope for a new recovery is in just how bad things are.  The U.S. housing market has been terrible for so long that very little new construction has taken place, and we don't have enough housing.  Eventually people will get tired of living with their parents and construction will have to pick up.  Right?

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Against the Ceiling

Debt crisis does look like Mad Max! - from the NY TimesThe parallels between the debt problems U.S. and Greece are generally overstated, in large part because  the workings of sovereign debt are not intuitive (here's a hint: it is not like your credit card).  There are many differences between us and them, but fundamentally they have an actual debt crisis, while our crisis only political.  They can't pay their debts, we are just blustering about refusing to pay ours.

The U.S. does not have a debt crisis, it has a debt problem.  Here is an example of the distinction. I have a weight problem: I would like to lose 10 pounds, so I should eat less and go to the gym. It would be insane to treat that like a crisis and insist that I need immediate liposuction, or perhaps to cut off one of my limbs to get to my target weight.  The U.S. has a debt problem, it should spend less and collect more revenue. Nothing to see here, no need to panic.

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Agreeing to Agree

Not a New Idea, But a Good One. From FlckrMatthew Cameron, at Matt Yglesias's blog, criticizes, sight unseen, President Obama's plan for increased job training:

Although we don’t yet know the specifics of Obama’s speech, its billing as a discussion about “the importance of job training to improving the economy” suggests that the administration remains attached to the idea that the nation’s unemployment crisis is structural rather than cyclical in nature. That unemployment spiked for all education levels following the 2008 financial crisis, however, indicates the economy is plagued by more than just structural unemployment caused by a dearth of human capital. Rather, it is coping with severely depressed aggregate demand. 

Of course, Obama has little say in whether Congress or the Fed acts appropriately. And it is true that job training is a good policy objective for the long-term strengthening of the U.S. economy. But if Obama hopes to convince voters that he cares about the immediate employment situation, he should address the real issue and not settle for nice-sounding speeches that essentially are irrelevant to the average American’s ongoing plight.

The need for monetary stimulus is one of Matt Yglesias's favorite subjects, and while I generally agree with that Matt, I think this Matt is off base.  

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Formalisms and Formalities

[I'd like to use this post to introduce a new feature on this website: Apture.  You may notice that there are no links at all in this post.  That is because Apture allows easy lookup of words and phrases: simply highlight any word or phrase on this page and move the cursor over to "learn more".  A pop-up window from Wikipedia or Google or some other source should appear...]

The Japanese are often stereotyped as being excessively formal.  This stereotype I think is true for the Japanese (although necessarily oversimplified and commonly misused); but America is full of formalism too.  Our formalism is qualitatively different than that of the Japanese, but in my experience formalism has a quantitatively equal role in each country.  In Japan, formalism is often associated with the most mature expressions of traditional arts: kata in karate; shodo; even the infamous Japanese bureaucracy has its roots in the formal rigors codified in Confucianism.  Formalism lies at the received base of the culture (especially with Shinto), and this is difficult for the American in Japan to grasp.

American formalism on the other hand is a modern invention, unrefined, and even wild: Taylorism and scientific management; organizational theory and Edward Bernays; the elaborate dance sequences associated with modern finance and commercial banking security protocols; outsourcing and automated customer services; the grand and complex American healthcare system; and finally (corporate) job applications.  This kind of formalism is as American as apple pie.

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Cash Rules Everything Around Me

I've written before that it's very important for America to learn to count past "one, two, many".  Case in point: BP's $25,000,000 fine for DPing Alaska's North Slope back in 2006.  From the New York Times:

BP will pay $25 million in civil fines to settle charges arising from two spills from its network of pipelines in Alaska in 2006 and from a willful failure to comply with a government order to properly maintain the pipelines to prevent corrosion, federal officials announced on Tuesday.

The fine is the largest per-barrel assessment ever levied against an oil company in a spill case and represents a new blow to BP’s corporate treasury and reputation.

The aggressive approach of federal prosecutors in this case could portend huge fines and penalties from BP’s much larger spill in the Gulf of Mexico last year.

I will eat my own arm if $25,000,000 dollars "represents a new blow to BP's corporate treasury and reputation".  BP's 2010 revenue was $309,000,000,000.  $25,000,000 represents 1/12360 (0.008%) of BP's 2010 revenue.

To put this figure in terms the average person can understand, the median annual household income in the United States in 2010 was just under $50,000.  0.008% of $50,000 is four dollars.  BP paying a $25,000,000 fine is like you or me paying four dollars.  (For comparison purposes, a typical bounced check fee represents a six to ten times greater economic burden on the individual than a $25,000,000 fine represents for BP.)  Surely a $25,000,000 fine is not "a new blow to BPs corporate treasury"; hence, I do not have to eat my own arm.

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Our Friend, Inflation

HyperInflation - By Paolo CameraWith the economy still sputtering, politicians of every stripe are wondering how to jumpstart growth.  One promising method will make it cheaper to hire the unemployed, create advantages for American exports and reduce the burden of accumulated debts: inflation.  Curiously, some politicians have confused the medicine with poison.  In particular, Conservatives have abandoned their Milton Friedman heritage; once advocates for flexible money, now Republicans long for the gold standard.  It is a bizarre spectacle to see Ron Paul, the Chairman of the House Subcommittee on Monetary Policy, advocating the abolition of the Federal Reserve.  How have extreme positions gained credence at precisely the moment when the economy needs expansive monetary policy?

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