Brad's Braindump

Update: Don't buy an SUV "for safety".

Back in 2009 I took the WSJ to task for a mendacious editorial claiming that increased CAFE fuel-efficiency standards would kill people by encouraging lighter cars. I pointed out that the most common heavy vehicles today, SUVs, have only a marginally lower total fatality rate than sub-compact cars, and are significantly more dangerous to their occupants than midsize cars.  (Midsized SUVs have a 40% higher total occupant fatility rate than midsized cars!)

What really made and still makes me angry is the selfish mindset of SUV drivers who buy one because it's "safer for their family."  It simply isn't safer overall for your family, and it's only less likely to kill you relative to the occupants of smaller cars in a multicar collision.  The occupants of those vehicles (and pedestrians and bikers) hit by SUVs die at much higher rates.  I'm updating this blog post because the NBER has recently come out with research to quantify that externality using the latest data available.   They find that, "controlling for own-vehicle weight, being hit by a vehicle that is 1,000 pounds heavier results in a 47% increase in the baseline fatality probability. Estimation results further suggest that the fatality risk is even higher if the striking vehicle is a light truck (SUV, pickup truck, or minivan)." 

So, contra the WSJ, the authors argue that to make the roads safer, we should increase the cost of fuel to discourage heavier vehicles and, "that the total fatality externality is roughly equivalent to a gas tax of $1.08 per gallon."  It's probably even higher than that, because the paper doesn't attempt to account for the fact that SUVs are more likely to get into accidents than cars due to factors such as increased breaking distance, handling characteristics and driver overconfidence in poor road conditions. 

So, don't buy an SUV for safety, and don't buy it when someone tells you that a US auto fleet with smaller cars will be more dangerous.

Copycats

This only seems crazy until you remember we in the USA are copying this hundreds of times over. 

My new study.

In my new job I'll be mostly working from home.   While I relish this opportunity, I also know that I'll need a space I truly enjoy being in and which helps me be productive to succeed, so I've been carefully planning a transformation of our guest bedroom/library.  After 5 1/2 years of consulting, working at a different desk every few weeks with little or no opportunity for personalization, I was especially excited by the idea of setting the asthetics and egronomics of my own workspace.   Here it is, to share the research and what worked for me, and because I'm pretty proud of the result.  :)

Here is a "before" shot.  It's a little more disorganized than usual following some construction to fix a water leak, but gives you the spirit:  The books looked great, but the rest of the space was a mess.  Adding to my challenge was the fact that we rent - which ruled out any work which would damage the walls, and a dismal window looking into an alley in already dark Seattle.  This was not a space where I could spend 40 hours a week, even after some serious de-cluttering.

 

A lot of work later, here's the after:

I knew I really wanted a standing desk for both productivity and health benefits, but didn't find many that I liked.  The options were either impersonal, expensive, flimsy, or all of the above, so I decided instead to go with an adjustable height industrial production workbench from Global Industrial.  I chose a model with a 2" butcher block top, which I stained and varnished myself, and I love the results. (Unfortunately, Global didn't adequately package the top for shipping so I did have to do some work repairing and hiding deep scuffs, scratches and corner damage present when it arrived.)  

The heavy top and drilled-through steel uprights give it the strength to accomodate overhead lighting, floating two large monitors on movable arms, a shelf, and my favorite feature: the vertical garden panel, a "high-resolution" FloraFelt from plantsonwalls.com.  The overhead fluorescent lighting will keep the plants happy and provide full-spectrum, bright light for me during Seattle's dark winters, while the halogen bookshelf lights lend a warmer tone to the rest of the room. 

The screen on the right will be my personal computer, the one on the left my work system.  I'll keep them on a single keyboard, mouse and clipboard with Synergy.  

Ergonomically I went with my trusty SwiftPoint mouse (a tiny, wireless mouse held in a pinch grip) and a Microsoft Natural Ergonomic Desktop Keyboard.  This was the only keyboard I found with a negative slope, and the result is much more natural and comfortable when used standing than a traditional model. 

 
 
 (compared to the SwiftPoint, the Microsoft mouse that ships with the wireless version of the keyboard is hopelessly clumsy; a shame they are not sold seperately)

The sturdy worktop also allowed me to hide wires and make an easy laptop mount under the desk.  Few cords are visible from across the room, and when standing at the desk things like speakers and headsets are within in easy reach, but hidden - only my phone has a charging cord in my line of sight.

 

While I know I'll miss the stimulation and comradeship of my great colleagues at iSEC, I'm definitely looking forward to working from my new study at my awesome new desk.  I think it will help keep me happy, healthy and sane.  There's even room for a treadmill, once I find one I like.

 

 

The Arizona "papers please" law and America's moral hypocrisy.

We have a system in this country in which huge and vitally important segments of our economy depend on a certain group of people. They grow and pick our food, cook our meals in restaurants, works as janitors, in construction and other difficult jobs that many native-born Americans wouldn’t do.  They work hard.  HARD.  So hard you and I probably couldn’t last a day in their shoes, picking strawberries or lettuce.  They have more “traditional family values” than the average American and commit crimes at a lower rate.  Despite scare stories about illegal immigrant crime waves, border cities in Arizona, New Mexico and Texas have low crime rates and they have been dropping for 20 years.  El Paso, the city with the highest Hispanic population, is the safest big city in the US.  They are illegal immigrants.

We all live in a system that benefits from their hard work – in the prices we pay for everything.    If we really could just “send them all back”, our economy would collapse.  They are millions.  But they have few rights in this country and we exploit them.  We deny them the protection of the law.  Referendums have attempted to deny them access to education for their children and emergency health care.  They are not able to bargain fairly for compensation for their labor or for safe work conditions and must live in constant fear of deportation.  Children who have grown up in the US since infancy or toddlerhood and remember nowhere else, find, when they try to go to college and live the American dream, that they cannot, and might at any time be sent “back” to a country they’ve essentially never been to.  In Arizona now, they cannot even report a crime to the police without fear of their life being shattered, and even those who look and speak like them (who have lived in the area for hundreds of years before the USA was even a country) are subject to arbitrary harassment.

We don’t fix this injustice because a political coalition animated by racism, petty authoritarian demagogues, and the business sectors that benefit from the cheap labor they can extract from the undocumented prevents any action.   These immigrants work harder than any native born American to make a better life for their family, and we all benefit – we DEPEND on them – but our national dialog disparages them, characterizes them as criminals (being in the country illegally is a civil infraction, not a crime) and is full of lies and exaggeration about drugs, violent crime and their supposed “cost” to society and the economy.

The injustice of the situation and the racism and economic exploitation that perpetuate it, while very different in degree from slavery, is not so different in kind.  It is hardly even different in degree from how the Chinese who worked on the railroads, in mining and agriculture were treated in the 19th Century.  Examining the big picture of who today's illegal immigrants are and how our society treats them, ignoring the anti-immigration dialog’s carefully constructed context of “law and order”, it is hard to say that history will not judge it monstrous.

So, is the new AZ “papers please” law just about enforcement, and devoid of a larger moral context?  Only if the Fugitive Slave Act was.  The law is part and parcel – indeed, an escalation – of one of the greatest injustices in our society today.  It cannot be considered outside of that context.

Comcast's new hidden HD fee

A little bit ago, looking at my Comcast bill, I noticed the following language:

"Effective 4/1/10 and with April billing, Comcast will no longer charge a monthly High Definition (HD) equipment rental fee of $6.50.  Those receiving HD video services will instead be charged a $6.50 HD Technology Fee (inclusive of equipment.)"

It sounded innocuous, but I realized today what it meant.  Once I can finally get a CableCard tuner for my Win7 Media Center PC, Comcast will keep charging me even if I return their decoder box.  (plus charging me a fee to rent the CableCard)  I have to pay a 10% premium over the advertised price to get HD channels from the company that advertises "More HD Choices" on every billboard and commercial.

I went without TV for ten years.  While I enjoy it, having a Media Center PC puts me pretty close to being able to do so again, very soon.  (especially with NHL Game Center Live)  

Attention Comcast: I do enjoy TV and am willing to pay a fair price for it, but these little nickel-and-dime ripoffs and hidden charges make me want to cancel my service just out of spite.

Thrown Under the Pyramid

During the bubble years, we saw how a pithy turn of phrase could become a zeitgeist that drove huge financial decisions.  The phrases I’m thinking of were things like “throwing your money away on rent,” “debt is equity,” and “buy now or be priced out forever.”   I have a new euphemism for the current situation.  In the spirit of being “thrown under a bus,” I propose “thrown under the pyramid”.

If you take on a huge, 30-year debt obligation, AFTER a bubble has popped but before prices have returned to fundamental values, to “take advantage” of temporary government interventions (that are deliberately re-inflating prices) – you have been “thrown under the pyramid.”

Example usage: “Existing home sales declined 16.7% in December, even though they extended the homebuyer tax credit?  I guess the government is running out of people to throw under the pyramid.”

The government has publicly admitted an explicit policy goal of ‘propping up home prices’.  They are working at it through many channels:  homebuyer tax credits, agency MBS purchases, historically low interest rates, Fannie/Freddie/FHA loan guarantees and bailouts, increased maximum sizes for FHA loans, accounting rule changes that don’t force banks to mark-to-market, foreclosure moratoria and HAMP.  There’s probably a trillion to several trillion dollars in taxpayer commitment there, much more than is ever directly acknowledged.  The entire housing market outside of cash purchases has been effectively nationalized. If you’re thinking of buying a house, remember what the definition of ‘propping up’ is, and what must happen when the props are removed. 

In a pyramid scheme, the people at the top recruit people to buy-in under them.  Such schemes always, MUST, collapse, when no more suckers can be found to put at the bottom.  What the government is doing now is spending trillions of dollars to get more people – first time homebuyers, especially – to jump in as a new bottom tier to keep supporting the housing Ponzi scheme.  These buyers are being thrown under the pyramid, where they will be trapped, Atlas-like, under their debt, if not crushed outright.  See the huge re-default rate on HAMP modifications and ever-increasing delinquency rates for GSE mortgages of the most recent vintages for evidence of this. 

House prices will eventually return to their equilibrium value at sustainable debt-to-income and price-to-rent ratios.  Don’t let the government throw you under the pyramid in the meantime.

Cabin Update - Extend and Pretend

Awhile back, I put in a short sale offer to buy a little cabin.  It’s been over 50 days now since I made the offer, with no response.  The current owners owe close to three times what I think the property is worth in today’s market.  They’d apparently applied for a deed-in-lieu of foreclosure (walking away) back in September, and haven’t paid their mortgage since at least October.  I figured with that situation I might be competing against a foreclosure timeline in my bid, but watching the county records, I still see no Notice of Default filed.  This is typically done 90 days after the first missed payment, and here we are, well past 120 days and counting.  The property sits empty and at risk for vandalism, is probably uninsured, and accumulating unpaid property taxes.  Should I hope for a resolution soon?  Probably not.  Over at the Market Ticker yesterday was a story of a mortgage that’s been reported as 120 days past due for thirteen consecutive months, and the comments have many more stories of people who’ve stopped paying their mortgages for a year or more with foreclosure proceedings not even initiated. (it can take another 90-120 days after a Notice of Default to complete the process)

Why are banks doing this?  Some suggest that the bank departments that handle foreclosures and delinquent mortgages are just overwhelmed.  I don’t believe it.  We’re now two years into this crisis – they’ve had time to add and train new staff.  There are huge numbers of former mortgage brokers, real estate agents and financial professionals with relevant skills looking for work, and the amounts at stake must be huge.  The difference in recovery on the loan between accepting my offer and waiting around to eventually foreclose (or have the property seized by the county for unpaid taxes) is in the neighborhood of $40,000, and that’s on a 700 square foot cabin with a composting toilet!  It’s surely bigger for almost any other property you can think of.  The banks could break even on the cost of hiring and training new personnel even if each one only managed to process one or two short sales a year.

Which leaves the other explanation: that they’re deliberately ignoring these properties because they don’t want to have to recognize the losses – if they do nothing they can keep holding the mortgage on their books at face value.  Well, these people aren’t going to start paying anytime soon, and bubble-era prices aren’t coming back either.  This means that the big banks are all probably still insolvent if they were honest in their accounting – and will need another bailout soon and the new round of bonuses based on “return to profitability” is just so much more looting.  The bank executives know they’re dead men walking, so they’re extracting as much wealth as they can before all this “extend and pretend” catches up with them.  In the meantime, refusing to act on money-good offers is just magnifying the eventual losses that will be dumped on the public.  

It is time to move my money out of Wells Fargo and into a community bank.  The “too big to fail” banks are parasites on our society and economy.

NPD, junior achievers edition.

I woke up this morning to a five minute profile on Seattle "Tea Party Star" Keli Carender, AKA "Liberty Belle".  I thought it was just a local interest story from KUOW, but no, it was a national news story on NPR.  (http://www.npr.org/templates/story/story.php?storyId=123229743)

What insights did she have to offer on the motivations of the Tea Party movement?  Apparently her most famous moment is challenging her Congressman to come take $20 from her "as a down payment for the health care plan!"  I'm not sure what that even means as a protest, but Keli explained:

"I tried to boil down in essence what makes me so angry about it," Carender says. "And it was this idea that he and other people decide what the needs are in society. They get to decide. But in order to fund those things, they have to take from some people in order to give to the other people."

Apparently she doesn't believe in representative democracy. What would you prefer, Ms. Carender? A government with no authority to tax? A plebiscite on every issue of governance facing a country of 300 million people? A plutocracy? Why, it's almost as if you don't have the tiniest clue what the hell you are talking about.

I guess we can only judge you by what you're trying to do... which is apparently to keep your "movement" from organizing to do anything:

"If you have a machine, you know exactly how to attack it, exactly how to shut it down," she says. "If you have 3 million machines coming at you, you don't know where to turn."

No policy, no leadership, no ideas - just a cacophony of attacks because you consider democracy fundamentally illegitimate when it's not run by someone in your identity group.  (After all, where were the Tea Parties when deficits were running out of control from 2000-2008?)

Or maybe there's no there there, at all. Maybe we just have someone with a narcissistic personality disorder who's found a great way to get attention, slinging catchy, if meaningless, one-liners, and isn't about to let ignorance of junior high civics stand in her way.

Hmm...why does that sound familiar?

Yes, Yes, a Thousand Times Yes

http://www.fakesteve.net/2009/12/a-not-so-brief-chat-with-randall-stephenson-of-att.html

Great anti-AT&T rant, which I agree with to the jot and tittle, but the exact same thing can and should be said about Verizon.  AT&T's got the great phones so they expect you to put up with a sh*t network; Verizon's got the great network so they have sh*t phones.   The Droid may rock, but it's about two years too late - and about four months too late to keep me from leaving.  

The broader point of Steve's rant is why the conservative boogeyman argument, "Do you want health care to be run like the IRS or the DMV?" instills no fear in me.  Dealing with the DMV or IRS is like being James Bond in Japan compared to dealing with America's cell phone, telephone, cable television, banking, mortgage or health insurance private sector these days.  

 

My hunch confirmed.

Last year when Palin had just been added to the Republican ticket, I speculated that her undistinguished college career was a sign of someone deeply uncomfortable and unable to deal with the diversity of people and ideas outside of her small, ethnically and ideologically homogeneous community.  

Her father apparently confirmed my suspicions recently.  

According to him, the presence of so many Asians and Pacific Islanders made her uncomfortable: "They were a minority type thing and it wasn't glamorous, so she came home." In any case, Palin reports that she much preferred her last stop, the University of Idaho, "because it was much like Alaska yet still 'Outside.' "

(If the "outside" reference doesn't make sense, I also discussed that here.)