Author Archives: rdmyers75@hotmail.com

Are recessions good?

Recessions have become more rare in recent decades, and you have to leave it to the Economist to suggest that this might be a bad thing. Well, the Economist and Joseph Schumpeter, who is my personal favorite economist.

Joseph Schumpeter, an Austrian economist, argued that they provoke “creative destruction”. Failing firms leave the market, capital decamps to more promising technologies and workers move to more productive jobs. The result is short-term pain and long-term gain. Schumpeter did not argue that politicians should deliberately engineer downturns. But nor did he think they should try to prevent them. “Depressions are not simply evils, which we might attempt to suppress,” he wrote. They represent “something which has to be done”.

In my many grade-school years of American history (which seemed to be the only kind of history I ever got, unless you count that one year of Virginia history I had to take), I remember my eyes glazing over when hearing about “the panic of 18XX”. Where “XX” represents pretty much any odd numbered year during that century. It just seemed to be a wild and woolly time with no central banks, regulation, or consumer protections. Lots of people got rich, and lots of people lived in what we used to call “third world” conditions.

It makes sense to me that businesses should not be overly insulated from the consequences of the risks they take, while ordinary people mostly should. So this points to not a lot of bailouts for inefficient industries, coupled with robust social insurance like unemployment and disability. In the U.S. though, what I see is big business capturing the government and successfully insulating itself from the consequences of risk taking, which suppresses competition and Schumpeter-esque innovation. We do sort of seem to get the unemployment thing right though, when push comes to shove, which worked out pretty well during the pandemic. People who were employed when the pandemic hit seemed to do okay. People who were not employed fell through the cracks of course, as they tend to do in our system. And if they turned to drug or alcohol abuse, they fell even further due to our lack of universal health care.

So my quasi-libertarian prescription here, which I think Schumpeter and even Hayek might approve of, is to let the companies compete and innovate, or die. Let them hire and fire at will. But workers need to be protected by robust unemployment, disability, health care and child care programs. The government needs to raise and then redistribute revenue to do this, but everybody comes out ahead in the aggregate except a few fat cats at the top who would rather use their wealth and power to rig the system in their favor than have to compete and innovate. Recessions are also the time to double down on infrastructure, research and development, education and training funding which underpin long-term productivity growth and innovation of an advanced economy. I think Schumpeter’s ghost would love that!

NEOM and The Line

“The Line” is essentially an attempt to realize the “ribbon arcology” concept from Science Fiction in real life. Design and construction are underway, although ambitions are already being scaled back and aspirational timelines extended, as tends to happen with visionary projects. This Financial Times article takes a somewhat sneering negative tone, in my view. My thought is that a linear project gives you the ability to plan/design/construct in phases, scale up and down, and change timelines as economic conditions and technologies change during its construction. It has been referred to as “multi-generational”, so the fact it hasn’t been built in the first few years after it was conceived does not constitute failure, in my view. Still, I doubt it is particularly fun to work on a project like this, and I especially wouldn’t want to be a in a high-profile responsible position on the project.

Such was the gravity-defying spirit of Neom — the vast mega-project with The Line at its heart — that Crown Prince Mohammed bin Salman hoped would redefine life in the kingdom and beyond. The chandelier was just one part of The Line, a 500 metre-tall mirror-glass structure running 170km across the sand and designed to house 9mn people: a city built into a wall higher than the Empire State Building.

Of course, I am particularly interested in the transportation, water, energy, and food aspects. If you build something linear like this, how do you avoid problems with bottlenecks or breakdowns somewhere in the middle affecting the entire system?

Financial Times

reading and memory

I like this post on reading and memory from Horace Bianchon.

…the value of reading lies less in retention than in integration. A good book tweaks your internal models and you begin to see a familiar problem in a new frame. You revise the assumptions behind a mental shortcut or you absorb a phrase that becomes part of your vocabulary of thought.

I read for two reasons. First, it’s my favorite leisure activity, one of the only times I achieve the “flow state” that is the key to happiness in the moment for me. But second, yes, it is about tweaking my “internal mental model” of the world. Over time, that will change how I perceive and react to the world and the small and large decisions I make and ultimately how I live my life. I am a different person than I was 5 or 10 years ago, and I will be a different person 5 or 10 years from now (unless I’m dead), and that is largely from those tweaks to my mental model of the universe I am part of. Because that mental model of the universe IS the universe for me. We are each living side by side and interacting with each other within our unique mental models of the universe. Now, I would argue that for practical human purposes, we should assume that there IS such a thing as objective reality, even if we can’t measure or agree with perfect clarity on what it is. We can keep searching for it and approaching it, and some of our mental models are going to be a lot closer to the true reality than others.

What was in the East Wing of the White House?

I admit to being ignorant of this. I know the Oval Office is in the West Wing of course. Yahoo has a rundown of the East Wing. The main thing it seems to have housed is official offices of first ladies over the years. But not Hillary Clinton, who insisted on being in the West Wing, or Melania Trump, who doesn’t seem to do office-y things. And there was also a theater with a really big TV where presidents and guests could watch movies and the Super Bowl. But given how busy I am as a normal middle aged working parent, I can’t imagine presidents are often able to sit down and dedicate a 2-3 hour chunk of time to watching a movie or sporting event.

The east wing “colonnade” was essentially a hallway.

East Colonnade

The iconic outdoor photos we often see of world leaders are typically taken in the outdoor West Wing colonnade.

West Colonnade

There are also the east and west porticos, which are basically covered porches. Photo captions online seem to mix up the porticos and colonnades at times.

going to college is still a lot better than not going to college

I hear people “questioning the value of a college degree” in the media. Sure, education is getting more and more expensive at a time when wages seem to be stagnating and there is some uncertainty whether career prospects for today’s graduates will be similar to those of past generations. But the numbers say (paying to study and not work for four years and) getting a degree is still a much better investment than not getting a degree and going right to work after high school. Sure, you could borrow the cost of four years of college and bet it on cryptocurrency or the Super Bowl, and you might come out ahead, but you might also come out living a short life under a bridge somewhere. You could also train as, say, an electrician and probably have a decent income and successful career, but you would still probably do better in the long run as an electrical engineer.

Anyway, this is from the Financial Times, which I still seem to have residual access to from my own recent student career.

To determine whether recent graduates are having an especially tough time in 2025’s low-hiring environment, the comparison we should make instead is with others who recently entered the labour market for the first time, regardless of age. A newly job-seeking graduate might be in their mid-twenties, but someone entering the world of work straight from high school will be several years younger.

Once we do this, it turns out that those without a degree are actually having a much harder time of it. In the US, unemployment among recent college graduates is up 1.3 percentage points from its mid-2022 low, but by almost double that among recent labour market entrants without a degree, who have seen a 2.4 point rise. This is very different to the much more modest 0.7 point rise among the frequently — but inappropriately — cited group of non-grads in their mid-twenties who are sheltered from today’s harsh hiring conditions.

But evidence for the kind of large-scale AI-driven displacement of early-career knowledge-sector jobs that would explain broad-based graduate malaise remains conspicuous by its absence….When viewed instead as a broader cooling of the labour market, in which inexperienced workers of all stripes bear the brunt (and especially those with the least skills) we don’t need to reach for such exotic explanations. The unwinding of extremely tight post-pandemic labour markets, rising input costs from inflation, tax changes and tariffs, plus the broader economic uncertainty during Donald Trump’s second term, are sufficient to explain what we’re seeing.

AI-related changes to the job market and wider economy are almost certainly coming, in my view, but we may be perceiving a causation between today’s technology and economic/political headlines that is not quite happening in real time.

October 2025 in Review

Most frightening and/or depressing story: The evidence for an increasing worldwide collapse in insect diversity and abundance continues to mount. What’s that you say, you don’t actually like bugs? Well, they are the base of the food chain (after plants) and generally indicators of biodiversity and healthy ecosystems more broadly. That’s right, the proverbial “canary in the coal mine” may have actually been a cockroach. There was also news this month that another “planetary boundary” has been breached. The biodiversity one that would cover insect collapse was already breached a long time ago, and this new one has to do with ocean acidification. Only two more to go for a perfect score of 9/9!

Most hopeful story: The seems to be some mixed evidence, tainted with industry and government propaganda in my opinion, but overall there are some hopeful signs that the global transition to renewable energy is real. It may be too slow and too late to avoid consequences, but it may also avoid the worst possible consequences.

Most interesting story, that was not particularly frightening or hopeful, or perhaps was a mixture of both: I mused about what it was like to be a child in the distant past of novels I have read, during my own youth, for my own children today, and for young adults I have interacted recently. We hear children are “anxious” and experiencing various crises, and I am not denying there is hard evidence of this, but with my own eyes I also see kids being somewhat safer, kinder, and gentler to each other than in the past. I hope it is possible to mitigate some of the negative effects of technology and other negative influences on kids today while also building on the positive trends.

https://www.goodreads.com/book/show/830502.It

The Tyranny of Small Decisions

I have thought about this concept on my own, but didn’t know about the work of Alfred Kahn. Basically, the idea is that many small daily decisions made at inappropriately low levels within an organization can lead to drift from the organizations mission or goals, and ultimately undesirable outcomes or even failure. All these individual decisions can seem rational and well-intentioned to the people making them.

This all makes sense to me, and I have seen it play out in organizations. I do think it is a strong argument for planning. Organizations that don’t have appropriate decision making processes in place are going to fail. For even for organizations that do, the people making the decisions need to understand the goals and mission of the organization, and the larger systems that organization is embedded in. That means you need a plan, and the plan needs to be periodically reviewed and communicated so that it stays in the forefront of peoples’ minds. And there needs to be a process for continuity of the plan when the people involved inevitably change over time. I don’t think embedding the plan only at the highest level of management works very well – it needs to be embedded at all levels of the organization, particularly mid-level management but even the rank and file, in my view.

Noam Chomsky is old!!!

In my last post I posited that 61 is not that old, because it is not that much older than I am right now. Well, Noam Chomsky is 96, and that sounds old to me! How will I feel about that when I am, say, 89, if I am fortunate enough to make it that far? Congratulations to Noam for being alive and kicking and, not only that, WRITING BOOKS!

Anyway, he has a new (ish, to me) book from 2024, and here is a brief excerpt posted in a blog called neuburger.substack.com.

Elites gonna elite, aka manufacture consent. We have enough knowledge, technology, and wealth on this planet to all live in relative peace and comfort right now if we could only get out of our own way. But perhaps it is “utopian” to think that our species of nearly hairless poop-slinging monkeys will ever be able to do that on any scale for any length of time.

Btw, the book is The Myth of American Idealism: How U.S. Foreign Policy Endangers the World.

Wikipedia

Charlie Stross continues to rant about renewable energy and fascism

Yes, Charlie Stross continues to rant, enjoyably and correctly, in my view. I’ll share a brief quote and then encourage you to read his long post. And I’m still bothered by the idea that he is 61 and “never expected to get to be this old”. That is not that old, dude! Possibly I feel that way because it is not all that much older than I am! And I am not yet ready to concede that I am old.

The EU also hit a landmark in 2025, with more than 50% of its electricity coming from renewables by late summer. It was going to happen sooner or later, but Russia’s attack on Ukraine in 2022 sped everything up: Europe had been relying on Russian exports of natural gas via the Nordstream 1 and 2 pipelines, but Russia—which is primarily a natural resource extraction economy—suddenly turned out to be an actively hostile neighbour. (Secondary lesson of this war: nations run by a dictator are subject to erratic foreign policy turns—nobody mention Donald Trump, okay?) Nobody west of Ukraine wanted to be vulnerable to energy price warfare as a prelude to actual fighting, and PV cells are now so cheap that it’s cheaper to install them than it is to continue mining coal to feed into existing coal-fired power stations.

The idea of fossil fuels as “stranded assets” has faded from the US press, but he is surer than ever. And I think he is right, and it is industry and political propaganda (which are, of course, one thing at the moment, or maybe always one thing but different industries get the upper hand depending on the politics) that is hiding this fact from us here in the United States, which is rapidly downshifting to developing country status relative to the world’s most advanced countries.

what Americans pay for their cars

I am not a member of the 1% by any means, but one key to my personal financial stability has been not owning a car for the last 21 years. People shell out enormous amounts of their income to buy, lease, maintain, repair, replace, and park personal vehicles. And that doesn’t count what you are paying in terms of your home value, property taxes, and gas taxes to maintain all that car focused infrastructure out there. Nor does it count injuries and deaths due to crashes (well, to some extent you pay for that through your car insurance and health insurance), and certainly not the costs of obesity, heart disease, and diabetes due to the opportunity cost of driving relative to spending that same time on some form of physical activity. Finally, people and nature are paying the costs in terms of air and water pollution and heat in more abstract ways (pain, death, knowing ecosystems are being destroyed) if not in dollars.

And of course, for many communities people choose to live in, that personal vehicle is absolutely necessary to get to jobs, school, and put food on the table. I’m just saying where you choose to live is a choice, at least in the longer term. If you want to live in a less car dependent community, you may not be able to change your situation overnight but you could set a goal to change your situation say within 3-5 years. Anyway…

This Jacobin article (which is an unapologetic socialist magazine?) has some interesting facts and figures on what Americans are spending on their private cars.

The country just crossed over a critical threshold last month: 5.1 percent of car owners are at least ninety days delinquent on their loans. This is almost touching the record high of 5.3 percent, reached during the nadir of the Great Recession in 2010. Young people are unsurprisingly hardest hit, with 7.5 percent of car-owning Gen Zers delinquent. The trend for all is upward for the past eight quarters — and expected to continue.

Auto insurance rates are up 56 percent in the past five years; car repossessions are also at post-Recession highs, at 1.73 million so far this year; and car repair costs popped 32 percent in the past two years alone, exacerbated by Donald Trump’s new tariffs. In 2023, a Federal Reserve Bank survey found that car repairs won out over rent, mortgage, health care, and food as the cost that Americans were most concerned about.

Consumers have responded to all this pressure by extending the terms of their loans to decrease their average monthly payments. Yet interest rates have kept rising. The average American is forking over between $550 and $750 a month on their car note, a number that used to be a monthly rent a decade prior. Today 20 percent of all newly originated car notes are over $1,000 a month, and you’d be mistaken to think that only the top income quintile is represented in that number.

$500-1000 per month is a lot of money, and I think that is just the loan payment.