Month: June 2003

Investing

I’d like to take a minute of your time for a definition. It’s a word you’ve heard before, and you know what it means (to you, anyway), but this way you will know what I mean when I use it.

Investing: Spending money with the reasonable expectation of getting more money back.

So then, bonds are an investment because you get paid interest, and the value of the bond may also go up.

Stocks are usually an investment, assuming you do enough research to decide there is a reasonable expectation of profit, either through dividends or capital gains. You don’t buy a stock expecting it to lose money, do you?

Life insurance is not an investment. You have to die to collect!

The Lottery is not an investment. It is not reasonable to expect to hit the big jackpot.

Real estate might or might not be an investment. It depends on your situation and point of view. I’m sure I’ll have the occasion to discuss that another day.

That business venture your relative goes on about might or might not be an investment. I haven’t seen his prospectus, and I sure don’t know him like you do.

By way of follow-up regarding last week’s FOMC rate cut, subscribers to RealMoney can check out an excellent commentary by Aaron Task. In a much more multifaceted and eloquent way, he sums up why he feels the rate cut was unnecessary, if not outright dangerous to the long term health of the economy.

I can vouch for him

Recently, articles like this have reminded me about the issues surrounding school vouchers. In summary, now that certain legal issues surrounding vouchers have resolved, there are a handful of programs and very little in the way of measurable results thus far. As much as I respect the underlying concepts, I am not a supporter of vouchers. I say this as someone who would likely benefit from a voucher program.

I think the widely used Cato Institute figures showing that a voucher of $3000 would cover tuition at most private schools, and that the average tuition at such schools is $3116 are flawed. First, these figures include church-run schools. A church which sponsors schools normally subsidizes education at such facilities. Thus, they are effectively providing education below cost. Second, it is not known whether the Cato Institute figures include schools of less than 20 students. Such schools tend to fall into 2 categories: one room schools with one or two teachers (perhaps run out of the instructor’s home), and organizations intended to provide support services and legal status to home-schooled students. Finally, there is no indication of whether all the schools included in this average were fully accredited. Failing to take this distinction into account is like comparing an average person’s driving to that of a professional truck driver. I would be much more interested in seeing average tuition figures which exclude these three classes of school.

This, and my own personal research, lead me to believe that any voucher program will actually fall far short of paying for a quality, secular private school. Please note that I have specified a quality, secular school both for reasons above, and to completely sidestep issues of philosophy, religious education and the First Amendment. Furthermore, such a voucher does nothing to defray added incidental costs such as transportation, uniforms, and activity fees. In short, saying that vouchers are for the benefit of the lower and middle class, who cannot otherwise afford private schools, is ludicrous.

However, there is an even more important issue concerning vouchers. Government — particularly at the Federal level — has a tendency to grant funds only when specific conditions are met. For example, the Federal government got states to pass laws mandating seat-belt use, a 21 year old drinking age, and minimum blood alcohol of .08% for drunk driving by threatening to take away highway funds. Libraries can have money for internet connections from the Feds, but only if they install content filters. Schools can have Federal funds for sex education, but only if they teach an “abstinence only” program. As the old saying goes, “He who pays the piper picks the tune.” Allowing government to fund private schools is one step closer to allowing them to mandate what and how students are taught. Since the vast majority of parents who have chosen private schools did so because they disagreed with the philosophy or methods of what they consider “failed” public schools, this is unacceptable.

LUGging around a crisis

I have spent the last little bit of time reading HOWTO Encourage Women in Linux. This proceeds from the thesis “Why are there so few women in Linux” to the obvious subsequent question, “What can be done about it.” Unfortunately, the author fails to ask “Is there really a lower percentage of women in Linux than other areas of computing?”

In the introduction three overheard questions are posed:

My girlfriend hates Windows, how can I encourage her to use Linux?” This is rather like asking “My girlfriend is unhappy with her car. How can I encourage her to get a Mustang just like mine?” A more enlightened person might wish to know why she hates her current operating system, why she is still using it, and what alternatives she has considered.

“Almost no women attend my local LUG [Linux Users Group]. How can I fix this?” How does this compare to the gender breakdown of other local inherently geek-laden events? Or is it possible that your local LUG meeting is at a time or place undesirable to female geeks? Like the same evening across town from the Marion Zimmer Bradley Fan Club Meeting? Identify the problem and its cause before seeking solutions. That’s called “Science.”

“Why aren’t there more women in open source?” Why aren’t there more women in programming in general?

Luckily for us, the author addresses my rebuttal question in chapter 2. The valid points are unfortunately interspersed with red herrings and spurious arguments. It boils down to a collection of sexism both real and imagined, seasoned lightly with both real and perceived differences between men and women.

Chapter 3 is our handy Do And Don’t List. To be brief, Don’t be a sexist or a jerk. Be a decent human being. Indeed, these are fine tips for any workplace. Please, don’t save them for the Linux Users Group meeting.

I am only a feminist inasmuch as I think being a woman should not automatically close doors to me or insure that I earn less. Oh, and I think it would be great if there were less violence in the world in general, particularly against women. Sexism is real, but in the end I feel this article sees a lot more sexism in the world than really exists. Of course no mere man is allowed to say so; it takes a woman. I furthermore think that most of the examples of sexism used in this document could be neutralized with a slightly thicker skin and a witty retort.

The Supremes

This morning, the Supreme Court of the United States (SCOTUS) came out with a bevy of opinions. This stuff is important, and I strongly encourage you to care.

For one thing, they decided that it is none of the Government’s business what two consenting adults do in their bedroom. Specifically, they struck a Texas law prohibiting “deviant sex.” Although this has been portrayed as a “gay sex ban,” it banned a number of activities enjoyed by otherwise law-abiding heterosexuals.

They also ruled that California could not arbitrarily and retroactively extend the statute of limitations, not even on Really Bad Stuff. Specifically this case involved prosecuting a child molester for actions of 50 years ago. Make no mistake, what he did is bad! No question about it! But if the government can decide that the statute of limitations does not matter on this crime, they can decide it doesn’t matter on almost any crime. Unless your youth was completely free of indiscretion, that idea should scare you.

Furthermore, they ruled that defendants have a right to competent legal counsel, particularly in death penalty cases. At issue is the case of a man who, had the jury known what an awful childhood he had, might have ruled that life in prison was adequate punishment. Since his lawyers never bothered to present the information, the jury never heard it, and sentenced him to death. Now, he gets a new sentencing hearing, not a new trial.

Important stuff. Check it out.

Cheese it! It’s the FED!

Today, Agent Greenspan and his posse at the FOMC are set to drop interest rates again. Oops, make that yet again. Never mind that interest rates are at historically low levels. Don’t get me wrong, I respect Greenspan and think he has done a generally good job in the past. However, I don’t think one more cut is going to help anyone. I believe there is a point beyond which rate cuts do not stimulate the economy, and that we are there.

Businesses are still not making large capital investments — the official reason why lower interest rates stimulate the economy. Theoretically, businesses expanding on cheap credit build bigger plants and hire more people to work in them (hasn’t happened), and the companies which supply the infrastructure must also expand to meet demand (also not happening).

To make matters worse, the insurance companies are not making money on their investments because of low interest rates, which means premiums must go up. This creates a fake “crisis” in any business which requires heavy insurance coverage.