Monday, December 23, 2013

The Value Of a Dollar

Among the powers of Congress listed in the Constitution are the powers "[t]o coin Money, regulate the Value thereof, and of foreign Coin ...."

But regulating the value of money, it seems to me, cannot really include setting the value of money, that is, determining what the actual value of money is. Because in order to do that, you have to set the price of, well, everything, including labor, and that is not just a slippery slope, but a greased pig that's bound to get away from you in due time.

So what sets the value of money? We do, every one of us, by being willing or unwilling to exchange a certain amount of it for a certain amount of merchandise. If we are willing to pay $200 for a TV set, than a dollar is worth 1/200th of a TV set. If we are willing to work for an hour to earn $7.25, then a dollar, to us, is worth 1/7.25 hours, a bit over eight minutes.

And put another way, if you earn $7.25 an hour it takes you about 27.5 hours to earn the TV set (ignoring inconvenient truths like taxes).

Of course, it goes both ways. Someone has to be willing to part with a TV for $200, and someone has to be willing to pay you $7.25 an hour (and what with minimum wage laws, that's pretty much an all-or-nothing proposition at that rate). And billions of individual transactions over time determine the value of a dollar, or a pound, or a euro.

Now, there are things that governments can do to interrupt this process. One of them is to issue more money into the system. With more money in the system, eventually the money becomes worth less, and that creates inflation. But if everything were to equal out in the marketplace, all of that extra money would create both higher prices and higher wages, and eventually we'd still be working, say, 27.5 hours for that TV set (doing the same low-paying job).

But it doesn't seem to work that way.

For one thing, anyone who is holding money in savings or cash is going to lose out, so inflation punishes thrift. For another thing, that extra money that gets dumped into the system doesn't get distributed evenly—it tends to collect in the coffers of the banker class—and so anyone who is not on the receiving end of this new cash flow loses out, meaning around 99% of us (actually close to 99.9% of us, although the top 10% of earners feel the pain far less than the other 90%).

So, while the value of a dollar is still a dynamic thing, set by the laws of supply and demand, the demand pressure in the current system is skewed by people who get most of the money and, therefore, are willing to pay more for goods (but, these days it seems, not labor) than the rest of us. This puts upward pressure on prices.

But it's not just the things that the rich buy for consumption that get inflated. It's also the things they buy as investments. Like oil, food, and housing.

Leaving the rest of us, often, priced out of the market. But that's a subject for another day.

Monday, October 7, 2013

The Myth of the Evil Corporation

Let me just put this out there flatly before I explain myself. There is no such thing as an evil corporation.

I can hear you scream, perhaps even naming names. What about Monsanto, JP Morgan Chase (and all the other Too Big To Fail banks), BP, and any number of other corporate criminals? How can you say that they aren't evil? Because in order to be evil, you have to have evil intent. And corporations cannot have intent because, Citizens United notwithstanding, corporations are not people.

Corporations are operated by people. And those people, it is true, sometimes do evil things. But we have come to think of corporations as people, even in our everyday language, and in the language of our news media. "Today Wells Fargo said ...." Wrong, wrong, wrong! Some person working as an employee of Wells Fargo said, probably ordered by some other employee of Wells Fargo. These are people saying these things, and doing other things, and ordering other people to do other things which some of these other people do to save themselves from unemployment.

But none of it comes from the corporation itself, because the corporation has no brain. (Some might say that many of the people who work for the corporation also have no brain, and there might be a good point to that, but it's beyond the scope of this blog post.) All the horrible decisions that are made on behalf of corporations are made by people.

This is not just a matter of semantics. It's important to remember that there is no such thing as corporate wrongdoing. Corporate wrongdoing is the wrongdoing of people. There is no set of handcuffs big enough to go around the corporate headquarters of, say, JP Morgan Chase, and even if there were you couldn't haul the thing to jail. CEO Jamie Dimon, on the other hand, has wrists just the right size for a pair of iron bracelets. All those bogus securities and abusive loans and robo-signed court papers were not generated by a nameless, faceless corporation; they were generated by people.

When we hear that the Justice Department is investigating Bank of America, we shouldn't get too excited, because the best the DOJ is going to do is hit them up for a few billion out of the profits they made. Even if the DOJ wanted to arrest BofA, they can't. Now, if they really wanted to do something about the many criminal acts perpetrated in the name of the Bank of America, they would start going after the people in the company.

There are many legal problems with this, having to do with intent, and who know what and when. But really, it is the only effective and logical way to approach the problem. Assuming that anyone in law enforcement is serious about approaching the problem.

But that's where the notion of the corporation as a person gets in the way (all the way up to the Supreme Court). Since it is not a person, it seems too monolithic to do anything about. It's like any problem, though: you have to break it into its constituent parts, and go after the people who do the evil deeds, even if they are doing it behind a corporate shield.

Because as long as you allow them that corporate shield, as long as you attempt to punish the monolithic corporation for what amounts to individual deeds (even if they are done in concert with other individuals—by the way that's called conspiracy), those individuals will continue to perform those criminal deeds because there's no incentive not to.

Friday, September 20, 2013

The Day I Almost Sold My Kids

[This is something I wrote ten years ago and never published.]

I'm sitting at my computer in the office upstairs trying to compose some listings for eBay. My 13-year-old son Thomas is downstairs looking after my three-year-old son William, while my seven-month-old son Daniel sleeps in the bedroom adjacent to my office. All is right with the world.

Until William starts crying. "What are you crying about?" I call down to him.

"Tommy say no raisin totes," comes the reply. Being a father, I understand this.

"Thomas," I call down, "I said he could have raisin toast." This would settle the matter, except that William is already headed up the stairs to explain to me again that his brother wouldn't let him have any raisin toast. His vociferous objections wake the baby, for the fifth time this morning, and Daniel begins screaming.

I send William  downstairs, with loud instructions to Thomas to give him raisin toast, and I go in to calm the baby. When I finally get back to my computer after this all-too-familiar interruption, a strange notion occurs to me: I wonder if anybody on eBay would like to bid for my kids.

It's not such a wild thought, is it? After all, in a recent listing, a gentleman put his soul up for auction. Of course, it didn't sell, but what would you do with it? On the other hand, one young lady auctioned her services as a mourner at the winning bidder's funeral. She got $1,500. What could I get for three healthy boys?

So I start to compose a listing: "You are bidding on a 13-year-old male in excellent health. Doesn't run. Doesn't even walk very fast. Will work if nagged incessantly. Talents include taunting three-year-old boys (see my other auctions). Has braces, which are not paid for. Eats without end." Hmm. Okay, one point for truth in advertising, but minus ten for effectiveness.

I try again: "You are bidding on a healthy 13-year-old male. Superb artistic ability. Intelligent and sensitive. Terrific big brother (see my other auctions)." Ah, much better. Heck, even I might bid on a teenager like that.

Now to the three-year-old. "You are bidding on a healthy three-year-old boy with beautiful dark brown eyes and a sparkling personality. Loves to cuddle. Still learning to talk. Potty trained. Unbelievably cute." I think I'm getting the hang of this.

One more to go: "You are bidding on a healthy seven-month-old baby boy. Piercing blue eyes. Charming crooked smile. No excessive crying. Eating solids. Not yet crawling." Not bad at all.

Now to the matter of price. How much is each of my boys worth? A million? A billion? Priceless? I delete the listings and disconnect from the Internet. [This was ten years ago; I had dial-up.] I go into the boys' room and kiss Daniel as he sleeps. I head downstairs to give William his lunch before nap time. And I hug Thomas and tell him that, yes, he can play his Game Cube after he does his reading.

Once William is down for his nap, I return to my computer where, before I resume work, I add one item to my list of daily reminders, right under "Take Your Vioxx."

It reads: "Don't Sell the Kids."

That's Where Our Money Goes

Now, looking at my last post from more than a month ago, where I said that money is flowing in the wrong direction, I can hear some readers saying, "Oh yeah, this guy is just a liberal who wants to stick it to the rich and blame them for all our problems." And they would be totally off base.

I have no problem with some people getting rich and some people not getting rich. How rich people get rich is, of course, part of the equation, but that's a political and philosophical discussion. I'm trying to get at the heart of this whole money thing.

So, what do I mean when I say that money is flowing in the wrong direction? I mean that it is flowing from people who actually provide goods and services, which is what an economy really is, to people who do little more than manipulate and trade money for its own sake.

That has three major consequences. First, it pulls money out of the productive sector and lets it accumulate in the unproductive sector, where it serves only a very few people. Second, the money manipulators, at least in countries like the US with private central banks, are allowed to create money without any real restraint.

Which, of course, lessens the value of the money. Now, I suspect that just adding money to the system would not, in itself, create a long-term problem, because the income and the prices will all work out in the long run. But when the creators of the money become the hoarders of the money, the vast majority of citizens lose ground to inflation.

The third problem with money flowing to the money manipulators is that it ingrains in us the notion that money has value for its own sake. We see money as a commodity rather than a medium. By letting one small elite group both create and keep the vast majority of the money in circulation, we make it harder for everyone to trade in real goods and services, and because we view money as the thing that has value, we have trouble finding our way out of the situation.

But the pieces of paper, the electronic entries, and even the gold and silver, are not what have value. They are just things that store value. They keep it safe for us—we hope—until we are ready to cash in that value for something else of value, some other good or service that we need or want.

Let's say that a new TV costs as much as you get paid for forty hours of your labor. The store that sells the TV has no need of your labor. But your employer does. The employer gives you a receipt, as it were, for your labor, and you can then trade that receipt for the TV. You still traded forty hours of labor for the TV, but you did it through an intermediary. That's what we call money.

But how does it all sort itself out? The store that's left with a receipt for your labor uses it to pay for the labor they need, plus the building they sell out of, utilities, the goods they sell, and enough profit (which is still just a receipt) so that the people who own the company can buy the goods and labor the want and need for themselves.

But this only works if everyone involved agrees that those receipts, in whatever form, are freely tradable stores of value. Otherwise they are nothing more than pieces of paper or information in a computer.

But how do we all figure out what those receipts are worth? Who decides how much of one's labor must be traded for a loaf of bread, or a TV? The answer is, "everybody." At least, that's supposed to be the answer. But it seems like a lot of this valuation happens outside of the market these days.

Which subject I will try to explore next time. I say "try" because up until now everything I've said it pretty straightforward, even obvious. But now it starts to get very, very murky.

Thursday, September 19, 2013

It's Easy Being Green. And Cheap

For the first time since my first attempt to shoot I Dream In Color, I'm putting my green screen to work. And since then I've set it up it my basement to make it easier to light (and no trouble to set up since it just hangs on the wall all the time).

I've also started using iMovie 11 since then, and that's made my keying work much, much easier. Here's a little video I made about my green screen:

Sunday, August 11, 2013

What Is Money?

Let me paraphrase Merriam-Webster here: money is something we, as a group, accept as a medium of exchange and a store of value. Or, in my own words: money is what we use so we don't have to barter.

Money can be anything. In the modern world, money is most often thought of as slips of paper, even though on the whole those slips of paper account for a tiny fraction of the world's money. Most modern money is entries on a ledger or, more accurately, digital information.

That makes some people uncomfortable, and I have to admit that I have my own concerns about digital counterfeiting. But, in truth, all money is and always has been nothing more than information. It was stored in certain goods, like grains or spices, or in coins or pieces of leather or clamshells. What made it money is that everyone agreed on it as a store of value.

Usually, the value is set by governments or banks. In the nineteenth and most of the twentieth centuries, most paper money was representative money, that is, it was a promise to pay the bearer a certain amount of gold or silver in exchange for the currency. Hardly anyone ever exchanged the money for actual gold or silver, though; they used the money in trade with each other.

Which is good, because it is unlikely that the governments or banks had anything close to the amount of gold or silver for which they issued currency. This is called "fractional reserve banking." And anyway, what are gold and silver useful for in everyday life? True, silver, in particular, has many industrial and even medical uses. But you can't eat gold and silver, or build houses or cars with them.

Which is why we've hardly noticed that our currency is no longer backed by anything. It is now what is called "fiat currency," backed only by the promises of the governments and the banks. Is that a good thing or a bad thing? Opinions vary, and it's part of what I am trying to work out for myself. But my instinct at this point is that it doesn't matter if money is backed by hard goods or not; what matters is who controls its value, and by that I mean who controls the quantity of money—and that includes coins, bills, and entries on an electronic ledger—in circulation.

Because trade has a way a determining the value of money on its own, based on how much of it there is relative to how much trade, in real goods and services, is going on in the economy. Creating more money creates inflation, an increase in overall prices, by decreasing the value of the money. Why does that happen? Because putting more money into an economy does not, in the long run, increase economic activity.

It's not as simple as a math problem, but you can kind of think of it as one. Total money in circulation divided by economic activity equals the current value of the monetary unit. Too much money, and the currency drops in value, which we call inflation. Too little money, and the currency rises in value, which we call deflation.

Which is worse, inflation or deflation? Whole books have been written about that, I'm sure, and we're not going to settle that issue in this blog.

But right now, in the economic environment we're living in, I do get the feeling that, for all the talk about inflation and deflation (and "stagflation," a lovely term from the 70s), that what really matters more is where all this money flows to and from.

And right now, it's flowing in the wrong direction. But that's a subject for another post.

Thursday, July 4, 2013

Independence Day

Today my family will eat hot dogs and hamburgers, maybe attend the annual parade. We might spend a little time at the beach, and when my wife comes home from work, for she is not one of those fortunate enough to have the day off, we will have dinner and then go watch fireworks, weather permitting.

Between these leisure activities, there is work to be done—cleaning, house construction, work on my wife's camping trailer, and summer lessons for the boys (they don't get the day off, either). In other words, I think our Fourth of July will be pretty typical.

But I hope that we all will also take a moment to think about why we celebrate this day. Two hundred and thirty-seven years ago, a group of men signed their names to a piece of paper, and thus committed an act of rebellion. It was a dangerous act, and the hazards came not only from across the Atlantic, but on home soil as well, as not all in the colonies supported separation from the Crown.

I wonder what they would think of us now. Benjamin Franklin wrote: "Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety."

On the other hand, after more than two centuries, we do still live in a republic. If we can keep it.

Monday, June 10, 2013

Something Weird on YouTube

Yes, I know that there is a lot of weird stuff on YouTube. Every day, it seems, one of my kids is talking about something truly bizarre they saw online, usually somebody doing something loud and messy.

But I'm talking about something I've seen just in the last couple of weeks while searching for recent content. Let's say I'm trying to find videos of "cute baby animals." And I want the latest videos, so I ask the search engine to sort by upload date. What do I get?

Well, to be fair, I get quite a few videos of cute baby animals. But I also get a lot of slideshows by users 
with usernames like "beautyTube9" and "TrickPics." These are real usernames, and they are junking up the search results with these slideshows. Why do I object to slideshows?

Well, I don't, really. But I do object to slideshows that are composed completely of stolen material, and that are generated and uploads by automated programs, or "bots."

How do I know that this is what's happening? Well, let's look at the stats for TrickPics. This account was started on YouTube on June 1st, and as of this writing has posted 2,706 videos. Somehow, I don't think this user really manually posted 270 slide shows a day. Especially because all of these videos were actually posted between June 1st and June 2nd. That's 1,353 videos a day.

The user beautyTube9 joined on June 5th and has posted 2,142 videos. This user (or this user's bot) is still posting, as of an hour before this writing.

There isn't an easy way to report these users to YouTube, because their violations don't easily fall under any of the pull-down menus for reporting a user, and it's very time-consuming to report each individual video. And even if I had that kind of time, I don't even have a basis for making a complaint, because I haven't seen them using any of my material, and only the copyright holder can make such a complaint.

So meanwhile, these user are making the task of looking for recent legitimate content that much harder. And the weird part is, I don't see why they are doing it. A lot of the videos don't seem to be monetized, they aren't getting a lot of views, and there are no links in the descriptions (which consist only of keywords). So what is the point of all this?

And more to the point, how do we get rid of it?

Sunday, June 2, 2013

Dear Traditional Publishers

A friend of mine recently made a Facebook post about a wonderful book of sketches, called "He Drew As He Pleased," by Albert Hurter, the great Disney character designer of the 30s and 40s. (I just realized that in 20 years, if I'm still alive and writing, I'll have to say the 1930s or no one will know which century I'm talking about. Egads!) The book has been out of print for a long time, and collector copies can run over $500.

Which is a shame, because the book is a valuable reference tool for artists today, as well as an important piece of motion picture history.

I understand how expensive it is to republish a book, especially one that has such a limited audience. That is, it's expensive if you take the traditional route. But even if you're a traditional publisher, the technology of print-on-demand (POD) is available. Using this technology, it would only take the labor and equipment needed to translate the originals into electronic files to put this on the market. As with the books I've published, the cost of printing is borne only when the book is ordered.

And, of course, once you have the electronic version, you can publish for Kindle and Nook as well.

Even if the book needs to be priced far above what a traditional book would cost, that would still be better than the price that has be be paid for a collector's copy.

This would be a way to bridge the gap between works that are in the public domain and works that are still under copyright, but out of print. Traditional publishers do not make royalties from used and collectible books, and the author (or the author's estate) gets nothing from these sales, either.

New contracts might have to be negotiated, but I think that some kind of standard agreement for POD books is far more beneficial to authors than a situation that generates no income at all. And publishers can pull this off with no inventory costs. And it will help alleviate the problem of people posting PDF files of the book online, as they have done with Mr. Hurter's book. I would much rather have a printed or legal electronic copy of a book, but I can't afford to pay hundreds of dollars for it.

Print-on-demand for the back catalogue of traditionally-published books? A win all around!

Monday, April 22, 2013

Online Learning

Today I submitted the last recording for an online songwriting course I've been taking through Coursera, presented by the Berklee School of Music, entitled simply "Songwriting."

So what do I think of online learning? Well, to give you an idea, I will say that I have enrolled in courses to take me through the year and beyond, including courses in my field—writing, digital sound, music composition, and programming for musicians—as well as courses that just looked interesting. I even signed up for a physics class.

It takes a lot of discipline to get through a class like this, and I did find that circumstances made it difficult to make the deadlines several times, although I managed to get every assignment in just in time. (In my case, the circumstances included Hell Week for a theatrical production I was involved in and a knee injury; life doesn't stop for injuries, and theater doesn't stop for anything.)

What I appreciate most about the courses offered through Coursera is the video lectures, which are not only available after the class has ended, but can be downloaded for later viewing, or viewing on a tablet or phone (a lifesaver for keeping up with the lectures). I'll be watching the lectures from the songwriting course again and again to help me with my future songs.

How did I do? I'll let you be the judge; my final entry The Man In the Mirror, though I don't consider it a finished song, is linked to in the list at right. You'll also find a little songlet called You Broke My Heart that I wrote for another assignment. Don't ask me why these lyrics popped into my head, although I will say that I started out to write a sappy love song and was lead astray by my rhyming dictionary.

I'll probably post some results from some of my other courses here, too. After all, I'll have writing samples, new compositions, and digital sound designs. And as the physics course involves making videos of the labs, I might even have something to post from that class as well.

Never though you'd learn something from this blog, did you?

Wednesday, March 13, 2013

Books Of All Kinds

In Chapter XI of his wonderful 1980 book (an offshoot of the series) Cosmos, Carl Sagan wrote:

[B]ooks ... have been printed in massive and inexpensive editions. For the price of a modest meal you can ponder the decline and fall of the Roman Empire, the origin of species, the interpretation of dreams, the nature of things. Book are like seeds. They can lie dormant for centuries and then flower in the most unpromising soil.
 I was thinking of him recently when I stumbled across a book in the Kindle store on writing photo plays. This book was written before the advent of sound in the movies, and provides a wonderful historical perspective as well as a purely visual approach to screenwriting that modern practitioners of the craft would do well to learn.

The book was free, available to anyone who owns a Kindle or has a Kindle application on their tablet, computer, or phone. And there are thousands of books like these, including The History Of the Decline and Fall Of the Roman Empire, and On the Origin of Species By Means of Natural Selection, or, the Preservation of Favoured Races in the Struggle for Life.

When Dr. Sagan wrote Cosmos, the Kindle did not exist. Even the idea behind Project Gutenberg was in its infancy, and the only the highly-restricted precursors to the Internet were in operation. I think he would have loved to see how, in the digital age, we can store our collective consciousness not only in libraries and book stores, but in devices that fit into our pockets.

And I find it gratifying that much of Dr. Sagan's work is available in this new medium. Including Cosmos.