Earth Hour is tonight, between 8:30 and 9:30 p.m. local time. It’s a chance to have a direct experience of energy conservation by turning out electric lights and turning off appliances.
Friday, March 30, 2012
Bank loans for highly leveraged financing arrangements are larger than ever, and federal bank regulators are openly worried. In an uncharacteristically blunt statement accompanying a proposal for revised regulatory guidance on the subject, the Fed, OCC, and FDIC said that banks were often ignoring underwriting standards and taking excessive risks with leveraged credit. Among the risks that banks are not necessarily considering, the regulators said, is the risk of being left holding the bag if hedge funds or other investors backed out of a financial arrangement that a bank was underwriting -- exactly the kind of scenario that is more likely to occur during a financial crisis or other period of rapid market changes.
Financial distress, shady dealings, and corruption are not news at banks in Iran, but now the Auditor General there says top government officials are in on it, possibly including the president and his chief of staff. At issue are improper letters of credit and fabricated collateral documents. The president’s office has publicly warned that a thorough investigation or audit of the suspicious pattern of banking transactions could lead to a collapse of the country’s financial system. Iran’s finances have been under stress in recent years, mainly because of corrupt activities connected to the country’s security forces.
Four of Spain’s regional banks, which previously combined to form Banca Civica, have now been bought out by CaixaBank to form Spain’s largest bank. The combined bank has €342 billion in assets, deposits of €179 billion, and 14 million customers. The merger occurs after a change in laws designed to speed up bank mergers. The hope is that this will strengthen the banks as Spain enters a new recession. With unemployment already at 23 percent, the economy was expected to shrink 1 percent this year, and that was before this week’s austerity budget announcement. Banks in Spain are in financial distress because of an excess of lending, including €1.8 trillion of bank loans for an economy that is not really functioning on that scale, but officials said today they did not believe another bank bailout would be necessary.
Meanwhile, another Spanish bank, Santander, has begun closing duplicate branch locations in the United Kingdom. It will close 4 percent of its locations to consolidate operations after a series of acquisitions. Santander says there will not be any layoffs as a result of the branch closings.
In Washington, D.C., a former board member of DC Federal Credit Union is barred from working in banking after the NCUA determined that he disclosed confidential financial data. The prohibition order follows a four-month investigation. Leaks of financial data are not uncommon, but the NCUA took quick action in this case after initial reports made it appear that the credit union was bragging publicly using protected information.
Credit card processors are warning banks of a large-scale security flaw or breach, which the Secret Service and security analysts are looking into. Details are vague, but more than 10 million card accounts with transactions that took place in January and February are believed to be affected.
There was one bank failure tonight, Fidelity Bank, based in Dearborn, Michigan, with 15 locations in four counties of eastern Michigan and $750 million in deposits. Fidelity Bank had been tagged by regulators for some time. Its financial distress was blamed on its portfolio of commercial real estate loans in a time of declining values in commercial real estate. The failed bank is not to be confused with the many other banks elsewhere using the Fidelity name.
Deposits have been transferred to Huntington National Bank, which inches closer to its stated goal of becoming one of the three largest banks in Michigan.
The NCUA on Monday liquidated a church-affiliated credit union in Charlotte and Clarkton, North Carolina. Shepherd’s Federal Credit Union had 1,397 members, mostly members of Unity, the Way of Holiness Christian Church. The credit union had been operating for only two years. The NCUA sent checks to members for their insured deposits.
Thursday, March 29, 2012
I’ve explained why there are three main colors, why the colors are specifically green, blue, and red, and why, among these colors, green is the most important color, blue the second most important, and red third. But I am afraid none of this is much help in explaining one of the bigger questions about color: why colors are so directly linked to emotions.
We know from experience that green, blue, and red, and all the intermediate hues, trigger emotions in ways that white, gray, and black, and the neutral colors that are variations on gray, do not. Somehow the rods, the retina cells that detect specific colors, have a pathway to emotion that the cones, the retina cells that primarily detect lightness, darkness, shape, motion, texture, and shadow, do not share. Perhaps it is merely that with all the cones do already, triggering emotion too would be too much to ask. Or, there may be something about color that connects to the primal sense of place, and from there to everything that may be associated with a place.
Some of the mood of a color is a reflection of our physical experience of the color: reds, warm and quick; greens, strong and abundant; blues, cautious and expansive. But more than this, we may latch on to seemingly arbitrary colors with emotional intensity. There are the colors of sports teams and commercial brands and even the colors of the U.S. political maps. These maps have been in widespread use for only 12 years, but their red and blue have entered the political lexicon. The same may happen next with the dispute over the color of money: green or gold? In these cases, it seems that colors do not cause emotion so much as anchor it. The emotion comes first, and then we look around to see what colors are present and what they mean.
This connection between color and emotion may be a particular human quality. Dogs, for example, see colors but don’t seem to care much about them. It was barely 20 years ago that researchers determined that dogs see the same colors as humans. It took so long to find out because dogs do not easily attach any emotional meaning to the colors they see, particularly when the colors are just the color-coding typically used in color experiments. Humans, by contrast, almost automatically look for meaning in color-coding even when there is none.
Some of the emotional responses to colors can present a problem, but there are too many colors, and too many contexts in which they appear, for anyone to go through all the colors one by one and reprogram their responses. What may help, instead, is to look at way the problem color is connected to all other colors by connecting the color back to the original color, green. Every color is a variation on green, or a balance of green and other colors, or a contrast to green; those are the qualities of the color that originally gave us the ability to perceive that specific color. Fitting a color into this story can make the color seem less singular, and more like a branch selected from the tree of color.
Wednesday, March 28, 2012
In the traditions of physics and mysticism, the source of all color is white. Here, I am saying that the base color of human vision is green. I am not meaning to contradict physicists or mystics. White is indeed a color of special cosmic importance. It is only on Earth and in the human experience of light that green is the first color.
Pure white is a mathematical definition that is particularly useful in physics, describing energy in which all wavelengths are equally represented. Among many other uses, pure white is valuable as an approximate description of the light given off by the sun. To mystics, pure white is the encapsulation of all energy and all information, and by extension, a completely absence of bias, point of view, and falsehood.
Alas, pure white is something we as humans will never see, at least not with our eyes. To begin with, the approximately pure white light of the sun does not make it to the ground. Only a relatively narrow band of wavelengths can make the trip all the way through the atmosphere to sea level. Ultraviolet is mostly filtered out in the ozone layer, so those wavelengths are absent in the “pure white” sunlight we see. Infrared is filtered out all along the way, and is not so well represented by the time sunlight reaches the ground.
The “pure white” light of the sun, by the time it reaches us, is light that has been through a series of filters to take out these wavelengths here, and those wavelengths there. It is still pure enough as far as we are concerned when we look at it, but in a larger sense, it is light that has been colored by its past experiences.
Sunlight at ground level is the light of the visible light band. And that means it is not much more than the light we know as green.
Sunlight as we see it on Earth, or any other white light we see, is merely green balanced out with blue on one side and red on the other. This is the white we see when we seen sunlight on Earth, or a white flower, or the white background of a computer window.
When you look at a spectrum graph of pure white light, it shows as a smooth, level line. But humans see white not as a matter of smooth or even, but merely as a matter of balance. Anything can look like a perfect white, if its spectrum is strong in green and about equally strong in blue on the left and red on the right. There can be extreme spikes and gaps in the spectrum, and we can’t easily tell as long as we are relying on our eyes.
In the extreme case, the white of a color video display is literally three narrow bands of color, one red, one green, and one blue, together representing about one fifth of the wavelengths of visible light. We can’t readily tell and don’t particularly care that four fifths of the wavelengths we are able to see are missing from video white. If we see green balanced out with blue and red, we will call it white.
This is all I am saying when I say that white comes out of green. Taking a broader view, it is easy to see the way that green comes out of white. When we look at green plants, we are seeing the approximately pure white light of sunlight which has been filtered through Earth’s atmosphere, then selectively reflected by the plants. In its physical production, this green is indeed nothing more than a reduced version of pure white.
I believe we see green so well because green is so important on Earth. But that, of course, is only a theory. The derivation of green from white is a physical effect that can actually be measured and demonstrated.
Tuesday, March 27, 2012
Green, along with red and blue, are the three main colors of human vision. Green, as I explained, is not an arbitrary color that humans just happen to be able to see, but is the most important color on Earth. It is the center of the wavelength band of ground-level sunlight, and the core of the human ability to see. Green is the color we see better than any other.
If green is not a random or accidental color, then red and blue are not accidents either. Blue, actually, comes next. If green is the color of the ground, and especially of plants on the ground which may be almost pure green, it helps to be able to see a second color that does not belong to the ground. Having a second color makes it easier to distinguish ground from non-ground. The color of non-ground is blue.
In physical terms, blue belongs to wavelengths that are near the short end of the visible light band. If you can see blue and green, then you can tell a short wavelength from a middling wavelength, and you can tell a fluid from a reflecting surface. Fluids tend to be transparent, but whenever they are thick enough or deep enough, they are blue. Water is blue. The sky is blue.
Fluids are blue for the same reason that infrared is not part of the visible light band. Longer wavelengths, especially infrared but also red and green, are more quickly absorbed as they travel through air or water. Shorter wavelengths, the wavelengths of blue, get farther, so they are the ones you see the most of.
In physical terms, the sky may be just as green as it is blue, but green is the base color, while blue is a contrasting or dissenting color, so it is the blue we notice. It is not so important to have an enhanced ability to see the sky itself — whether it is blue on a sunny day or black at night, it is the one feature of our physical environment we can’t miss. But when the sky is reflected in water, the blue of the sky makes the water that much more visible. And water is a subject of importance. We won’t survive for much more than a day without it.
The existence of blue also makes it possible to separate gray from green. When a color is strong in green, it could be either gray or green. It is green if it is not so strong in blue wavelengths. If it is equally strong in green and blue, then chances are, it is some kind of metal or stone (a metal oxide), and this comes across as gray or another neutral color.
But if the ability to pick out colors that fall toward the short end of the visible light band is useful, it may also be useful to pick out colors that fall toward the long end of the visible light band. That, as you may have guessed by now, is where red comes in. Red, like blue, is a dissenting or contrasting color, but in the opposite direction, the direction of the longer wavelengths.
If blue is the color that leads us to water, red is the color of food. It is true enough that some of the most important food is green. Some of the most interesting and energy-dense fruits and vegetables, though, are red, or they are orange and yellow, which are colors that mix red and green, but lean toward red.
This association of red with energy goes beyond food. Energy in its more concentrated and active forms tends to be more red. Humans, for example, may come in various colors and shades, but all of our skin colors are more red than green or blue. Fire may be seen as red and yellow. Anything that gets warm enough to glow gives off infrared first, and then, if it is hot enough, red. Blue, by contrast, is more often the color of a passive approach to energy, merely absorbing it, but not organizing it.
Having red in addition to blue and green makes it possible to sort out the neutral colors. They are not all gray. They may be tan, brown, beige, and so on, depending on the strength at the red end.
We can confirm the sequence of colors in human vision, with red last in the list, by looking at genetic statistics. Deficiencies in sensitivity to blue are rare, but difficulties with red when compared to green are startlingly common. Among people with healthy eyesight, only about 92 percent of males and 99.6 percent of females worldwide have a full ability to distinguish red, yellow, and green when viewing printed documents and color-coding under artificial light. The distinction between red and green is useful, but not as fundamental as the distinction between blue and green.
If green is the base color of human vision, the colors with the least green are the “look at me” colors that stand out the best. These are the deeper blues, violet, red, and black, and any color in between. Plants take on these colors for flowers and fruits when it is especially important to get the attention of animals.
Black has become so commonplace in everyday life that it is hard to think of black as an accent color, yet it is black’s tremendous visibility that makes people choose it for so many things. You are reading this text, most likely, in black (or very dark gray) on a white background. It is traditional to show text in black on white, and for good reason. Long before there were printing presses, scribes learned that black and white was the combination of colors that lent the greatest clarity and importance to the written word. Black clothing, in a similar way, is common not just because black is the easiest color to apply to fabric, but also because black is one of the boldest and most conspicuous colors for a person to wear — or it would be conspicuous, that is, if there were not so many other people also dressed in black. Black is not nearly so common in the natural world, and where it does occur, in a black flower or the sand of a black sand beach, it is hard to ignore.
Monday, March 26, 2012
Earlier this month, on a cloudy winter morning, I set out to take photographs along the southern shore of Lake Erie. It was a dark day, the kind of day when everything looks gray. It is not that the colors had disappeared completely, but nearly so; there was not the usual sharp contrast between red brick and the blue of the lake.
When you stop to think about it, though, the question arises: how is that possible? How can a very dark cloudy day turns everything gray?
Human eyes lose some of their ability to see colors in dim light, but that is not the answer here. The darkest, cloudiest day is still ten times as bright as a video display, such as the computer monitor you are likely looking at right now as you read this post, and we see colors on a computer without any difficulty. A dark gray day is also much brighter than the fading reds and purples of sunset, and those are some of the most vivid colors we may see on a daily basis.
At the same time, the grayness of a gray day is not just an optical illusion or an accident of human vision. The camera I had along on my trip recorded some of the same grayness that I saw with my eyes. You can see this yourself if you look at the photographs I took. So it is not that a dark gray day is so dark that we are no longer seeing colors. Rather, the color of the light is turning things gray. So what color is it that turns things gray?
It is not gray light. If you tried to create gray light, it would just be a less bright version of white light.
The answer, as it turns out, is green. Green light turns things gray. To understand why this is, you have to know what green is — and first, you have to know what visible light is.
Visible light is the light that the human eye can easily see. It is electromagnetic radiation within a relatively narrow range of wavelengths that the eye is sensitive to. And this range of visible light is not an arbitrary limitation or accidental quality of the human eye. Visible light covers the entire range of sunlight that can get through Earth’s atmosphere efficiently.
As the short end, the ultraviolet light that the sun emits just as energetically as visible light is blocked by the ozone layer. The ozone layer, a thin layer of the upper atmosphere, absorbs at least 97 percent of ultraviolet light. On Earth, only 1 to 3 percent of the sun’s ultraviolet light makes it through to the surface. At the long end, infrared light does not travel long distances well. It is absorbed, along the way, by any gas, dust, water, or other material that might be present.
Visible light, then, is essentially sunlight at ground level. It is the range of light wavelengths that can cut through the atmosphere all the way to the ground.
The middle of this range is green. The green band is right at the center of our ability to see. It is the color humans, and mammals generally, are most able to see. We may respond about equally to red, green, and blue, but we have a much greater ability to see green than to see red or blue. Green is the base color of human vision. All other colors — including white and black — are understood by comparison to green.
Green is also everywhere in our natural environment. Almost every natural color we see has a significant amount of green in it.
The exceptions are the colors that are specifically meant to stand out. The reds and purples of flowers are the anti-greens, clearly distinct colors that insects can find easily as they pollinate flowers. Among artificial colors, the red of a stop sign or red light is meant to stand out and grab our attention. The violet and ultraviolet of a black light gets our attention in a different way. Other than colors like these, though, almost all colors are based on green.
But if red and purple are the anti-greens, green is, in a way, the anti-color. There is so much green everywhere, we easily tune it out. That is how green turns into gray.
A gray day is actually a green day. (I don’t have any indication that this is the meaning indicated by the name of the rock band Green Day, but I am happy to have an excuse to mention them here regardless.) If the clouds or fog are thick enough, only the middle of the visible light band can squeeze through easily. The middle, as I mentioned, is the green band. If most of the light that gets through to where you are is green, you don’t say that the world has turned green. Green is the base color, so it is the color we tune out most easily. If everything is green, then everything is gray.
This helps to explain why you so rarely see green stage lights. If you put something on a stage, you want it to look colorful. But shining green light on it would make it look dull and gray — the opposite of the effect you want. Stage lights, then, are traditionally white, red, yellow, and blue. Some modern lighting designers add cyan for completeness. You almost never see green in a lighting array. There is no need for it. You get a better effect, at a lower cost, by dimming the white lights.
All mammals, as far as we know, share the same sensitivity to green that humans have. It helps to explain why all grazing animals are mammals. Mammals, perhaps, have a special ability to find grass because of this special sensitivity to green.
Grass, graze, and green are, I believe, all variants of the same ancient word. It may be more of a coincidence that gray and ground begin with the same sounds, but if so, it is a meaningful coincidence. Green and gray are identified with each other at times, as I have explained. Green is the base color, but more than that, it is specifically the color of the ground. And that explains the need for blue and red, which is the subject I will turn to next.
Previously: Three Colors.
Sunday, March 25, 2012
Humans mainly see three colors. If you have worked with film or video, you know what the three colors are: red, green, and blue, often abbreviated collectively as RGB. All the other colors we talk about, purple, gold, gray, brown, and so on, are just combinations of these three colors.
It isn’t strictly true that humans see only three colors. We also have some ability to see infrared and ultraviolet and to distinguish different frequencies within the red, green, and blue bands. But those are distinctions we don’t really care about emotionally. That’s why it works so well to reduce an image to the red, green, and blue of a video screen. When we see the right proportions of red, green, and blue, we feel like we’re seeing the same color, even if it isn’t the same in any other respect.
Color theorists talk about red, green, and blue as if they were arbitrary and interchangeable. In one way of thinking, it is just an accident of human vision that these are the three colors we happen to see, but as long as that is the case, color is just a matter of mathematical measurements of these arbitrary color bands. And perhaps that is an accurate way of looking at it if you are designing a video display that shines red, green, and blue dots into an otherwise relatively dark room. But outdoors, in sunlight and in the natural environment, there is a very real difference between red, green, and blue. They are not arbitrary or interchangeable at all, nor are they the equivalent of each other. In fact, when you look at what the colors actually are, they are so different from each other in their nature and purpose that you will marvel that we are able to treat them as mathematical abstractions at all.
Looking at color in the light of the context and purpose of human vision, it is easy to see why there are three colors, why the three colors are specifically red, green, and blue, and what these colors mean, not just in relation to each other, but in relation to the human environment. This is the subject I will cover this week.
Saturday, March 24, 2012
I continue to be amazed at how fast the world is changing. Here are three more or less random threshold moments passing by right now.
- Officials in Brazil are talking about possible criminal indictments after a release of oil from an offshore oil well — not from something that happened years ago, but in connection with decisions that oil company employees made just this week. Even if there are no convictions, just the thought of going to jail could lead oil workers next time to shut down a well to avert a release of oil.
- In the United States there is a public conversation about the role of the police in protecting criminals from prosecution. This side of law enforcement has been there all along and has been shown a million times in fictional form, but was something people wouldn’t talk about openly and directly, until now.
- The new version of Mozilla Firefox will save several megawatts of electricity worldwide by using a slate gray background color for a window that displays an image file, in place of the previous white background. It is the first time a software publisher has taken such a prominent step to reduce the energy consumption of its software’s video display, and it could mark the beginning of an era in which software designers pay attention to such things.
If you asked someone else, “What is changing in the world right now?” they could easily come up with a completely different list. The important thing to note is that changes as significant as these are happening one after another, day after day, without necessarily eliciting much surprise or even media attention. And many of them are spontaneous, one-way changes. For whatever reason, we are ready to change, and the world will never be the same after what is happening now.
Friday, March 23, 2012
Citigroup may be able to cash out of another of its problematic businesses. Reuters is reporting that Morgan Stanley may want to buy out their wealth management joint venture this year. Citigroup’s ownership stake in the joint venture is estimated to be worth about $10 billion.
The former CFO of bankrupt mortgage trader Taylor Bean & Whitaker entered guilty pleas to two charges related to false accounting statements. The indictment said the CFO had discovered the accounting fraud at the heart of the business and helped cover it up for a period of time.
The SEC filed a lawsuit today against Wells Fargo seeking to force the bank to turn over documents related to mortgages included in its mortgage-backed securities between 2006 and 2008. The bank says it should not have to provide the documents and will seek to have the court overrule the SEC investigation.
After a week off, bank failures resumed tonight with state banking regulators closing small banks in Illinois and Georgia.
- Premier Bank, 2 branches, Chicago area. International Bank of Chicago is purchasing the assets. The failed bank lent one seventh of its money to Michael’s Fresh Market, a grocery chain that expanded too rapidly, ran out of money, and went bankrupt last year. The bankrupt retailer filed a last-minute suit against the bank today, probably just a tactic to delay an auction of the retailer’s remaining assets.
- Covenant Bank & Trust, 2 branches, Rock Spring, Georgia, in the northwest corner of the state. Minnesota-based Stearns Bank is purchasing the assets and says it plans to keep the two branches open.
A credit union failed tonight. In Colorado, state regulators closed Saguache County Credit Union, which had 3,000 members. Member accounts have been transferred to Aventa Credit Union.
Update: State regulators in California placed Telesis Community Credit Union into conservatorship. The credit union has 38,000 members. It will continue to operate while the NCUA makes changes in its management in the hope of returning it to a strong financial condition.
Thursday, March 22, 2012
Hewlett-Packard is combining its printer and computer divisions. And although the company is hoping to save money in the process, that’s not the reason for the move. Rather, as it explained yesterday, it is hoping to bolster sales of printers by tying them more closely to computers.
HP virtually came out and said that people won’t buy printers anymore unless you twist their arms.
There are other indications that people aren’t printing as much. Whether you are counting pages, ink, documents, photos, or printers, the interest in printing is not what it was two or three years ago. More people are reading on tablets and phones, with no need to print a document just to read it. Tighter security policies in some businesses now discourage printing of whole classes of documents. Workers with two desktop monitors don’t need to print out a document just to compare it to what’s on the screen. Five years of cost-cutting, and a growing awareness of the environmental impacts have workers cutting back on printing. And, with fewer printed documents, it is no longer important for a printed document to have pictures, color, or extra pages in order to stand out.
HP is not combining strength with strength in putting computers and printers together. The computer division is one that the company was on the verge of shutting down less than a year ago. Printers are a product that it has been selling at a loss for ages, and now it is saying even that has become difficult. Now, HP will be selling computers and printers together at a loss in the hope that some consumers will buy the company’s overpriced ink. With the trend away from the printed page, it’s a strategy that may not hold up for long.
In the meantime, it is not as if people will stop printing entirely. Some computer documents just have to be printed — notably, boarding passes, meeting handouts, packing slips, and legal contracts to be signed by hand. But these printed documents aren’t that frequent and don’t have to be much. If this is what people will be printing, it is no wonder HP is having trouble selling people replacement printers. And when people do need to buy a printer, it’s a trend that favors the plain, small, simple, and cheap, a category currently led not by HP, but by Brother.
It is also a trend that may eventually favor a move to a smaller paper size. When most printed documents are smaller than a letter-sized page, there are potential economies in switching to a page half as large — including the possibility of further reducing the size of the printer.
Wednesday, March 21, 2012
Of course Rick Santorum really does care about the unemployment rate. And yet, in another sense, he doesn’t.
When Santorum declared on Monday, “I don’t care what the unemployment rate is going to be. It doesn’t matter to me,” he wasn’t gloating about his personal fortune of millions of dollars, and the way the lack of an income for the rest of his life wouldn’t dampen his lifestyle. No, obviously, he was talking about his campaign strategy, and the fact that his (very slim) chances of becoming president don’t rise and fall with the state of the economy.
Some might say that Santorum was not being politically astute by thinking strictly about himself, and not pausing to think about what was happening to the country he was seeking to lead. He didn’t comment on the broader, non-political implications of unemployment until reporters prompted him several hours later, but that is a separate issue.
Because, in a different sense, Santorum really doesn’t care about the unemployment rate. He cares, obviously, when people can’t easily find jobs, but he also doesn’t believe that is a proper concern for government. He regularly ridicules the suggestion of another candidate, Mitt Romney, that government policy could “fix the economy” (in Santorum’s words). He really, sincerely believes the pre-Keynesian, 19th-century philosophy of “laissez faire,” of a hands-off approach to managing the economy.
Based on what the candidate has said, it is hard to imagine that a Santorum administration would be willing to spend the money for the Bureau of Labor Statistics, the agency that keeps track of how many people have jobs. You would almost expect Santorum to do away with the entire Department of Labor, where the Bureau of Labor Statistics resides, along with half a dozen other departments that have a problem-solving approach to economic matters. On the campaign trail, Santorum has hammered away at the point that it isn’t government’s role to help people. He hasn’t spoken favorably about programs such as unemployment compensation or Food Stamps. Santorum promises the federal government won’t be involved in managing the economy or solving its problems. But then, why would it be spending billions on statistics to track metrics that it promises not to manage?
It seems safe to say that a vote for Santorum is a vote for doing away with the official unemployment rate. That doesn’t mean there won’t be an unemployment rate, of course, but we will hear about it in estimates from polling companies and university committees, not in government announcements.
And when unemployment goes up, as it surely would under the approach Santorum has outlined, he could just say again, “I don’t care what the unemployment rate is going to be. It doesn’t matter to me.” Because that is, in a nutshell, what the laissez-faire philosophy about economic policy says.
Tuesday, March 20, 2012
It is being called summer in March in much of the United States, where warm May-like weather has arrived two months early. Just as the quiet winter helped to boost the economy, as money not spent on snow removal and heat became available for other spending, the early end to winter will also help to reduce energy imports normally used for heating at this time of year. The warm weather may not directly boost consumer spending. For example, with almost summer-like weather, clothing shoppers may want to skip the spring season and look for summer clothes. On the other hand, the money saved from heating will cover a boost in consumer spending that already took place in December and January, along with the recent higher prices for transportation fuel.
In the business world, though, the money saved on heating will show up in the budgets at the end of the month, and will surely lead to new hiring, spending on improvements, and other accelerated spending, depending on the business. A March heat wave is not an economic trend, of course, but it can offer a bit of support to trends that are already taking shape.
Monday, March 19, 2012
The core beliefs at stake in America’s new culture war are not new at all, but trace back at least to the formative years of agricultural civilization. You cannot look at any one of these diverging assumptions without running into the rest, but let me try to trace the conflict in beliefs about work.
The conservative Christian view of work is essentially that of the ancient farmer. Work is toil. You have to work hard just to stay where you are. How hard should you work? You should stop short of working yourself to death, but beyond stipulating one day off per week, the conservative Christian tradition doesn’t have anything good to say about taking it easy. Quite the contrary: sloth, which literally means slowness or sluggishness, or working slower than the pace you are capable of, is one of the deadly sins. It is easy to see why the word deadly is applied when you look at the ancient farm in economic terms. If you are not diligent about tending to crops in spring, summer, and fall, you may starve to death before winter is over.
Yet civilization is not built merely on farming, and the institutional side of civilization offers a completely different view of work, which is still taken up by the commercial and institutional side of America’s culture war today. Civilization begins with collective constructions such as roads and buildings. In the institutional view of work, work is not about staying where you are, but about getting somewhere. It is no accident that the word progress is associated with this side of the culture war. But to build a road or anything else, you have to have a degree of freedom of action, time away from the toil of subsistence. Perhaps you might toil in the fields just 11 hours per day, so that you can spend the remaining hour of daylight building a road, or a storehouse, or looking around for something else to do that might improve the results from your work.
Whether you call it progress or capital formation, it depends on having some freedom of action, or free time, or surplus resources. You can’t look for ways to improve your life if you are spending every hour of the day working to survive. Even if you merely believe you must work constantly just to stay where you are, that will stop you from road-building and other forms of progress. Yet this is a basic conservative Christian belief. “The devil finds work for idle hands” is the well-known adage, suggesting that nonstop toil is not necessary merely for survival, but also as a protection against evil. In this view, building a road or a bridge or taking the time to read and write might just be the work of the devil, if it grows out of freedom of action, or leisure time, which is the devil’s domain.
What does freedom of action look like? The first visual sign of it is the relaxed, content stance of a person whose work for the day, or for the moment, is successfully completed. This is the look of leisure, or freedom of action: a person who has energy and is happily standing, but with muscles relaxed, not actively working on anything. And so you can see the different assumptions about the nature of work in the different reactions to a person who presents this way. Is this the look of success, a person who is going somewhere? Or, is this person lazy, a troublemaker, up to no good, perhaps even sexually provocative?
You can see this contrast posed more specifically in the contrast between two current presidential candidates, Newt Gingrich and Rick Santorum. In objective terms, there is not much to separate the two. Both are cynical career politicians whose views years ago became too extreme for them to win reelection to Congress. Neither has a convincing claim to a history of hard work. Both are quick to show anger. They are similar in other ways. But their posture is completely different. Rick Santorum is perpetually tense, more so than any presidential candidate in recent memory. He does not smile easily, and when he does, it is not the look of contentment. Newt Gingrich, by contrast, smiles broadly most of the time, stands loosely, and speaks and moves slowly. Within the assumptions of the conservative Christian view of work, these are the markers, respectively, of diligence and sloth. But the commercial and institutional side of the culture war sees Santorum’s non-stop muscle tension, strained voice, and unease as a sign of failure, rather than diligence. Likewise, it sees Gingrich’s comfortable manner as a sign of success, rather than sloth. If these two candidates’ support is coming from opposite sides of the cultural dividing lines, the reasons may not be much more complicated than that.
In reality, hard work and leisure are both necessary. Diligence is not the result of failure or desperation, and freedom of action is not the work of the devil. It is only a cultural leaning that raises one side above the other. This particular cultural dispute is especially strained now, having been formulated in a period when most of us were farmers. It is a period that few of us alive today can remember, yet the argument goes on.
Saturday, March 17, 2012
In the United States, this is the biggest St. Patrick’s Day ever. According to surveys, more people are observing the holiday than in years past. I am also hearing that more people are traveling to St. Patrick’s Day events than ever. Locally, one of my favorite Chinese restaurants is holding a St. Patrick’s Day-themed special event for the first time ever.
Partly this must be because the holiday falls on a Saturday this year, but I also believe it reflects some ongoing trends. Observances of Christmas are declining in scale, as people try to turn that biggest holiday of the year from a high-stakes blowout into something more user-friendly. The same people who feel hassled by the stresses and obligations of Christmas (something I obviously know a lot about as a member of satirical Christmas band Bah and the Humbugs) or the hazards of Halloween and Independence Day may be drawn to the more carefree festival atmosphere surrounding St. Patrick’s Day.
The holiday on which everyone is Irish is surely also getting a subtle boost from a decade of relative peace in Ireland. Whatever the reasons, St. Patrick’s Day is moving up on the list of important U.S. holidays.
Friday, March 16, 2012
The latest stress tests were released by the Fed with results that can only be described as comically random.
An account executive at Goldman Sachs criticized the investment bank’s toxic environment and contempt for its customers, in an open resignation letter published in the New York Times.
The FDIC is starting a publicity campaign in which it hopes to persuade investors and bank executives that the Too Big to Fail regime is dead. Giant banks and their investors take disproportionate risks because of the expectation that the government will cover any large losses that might occur. This gives the giant banks a competitive advantage over the rest of the industry, but only, of course, until they actually fail.
Thursday, March 15, 2012
It’s not a big surprise but it’s big news: Encyclopaedia Britannica is no longer updating its print edition.
Britannica was the most authoritative encyclopedia a decade ago, but that’s not saying much after the whole industry has been eclipsed by Wikipedia. In the last two years, Britannica’s print edition has provided barely 5 percent of its encyclopedia revenue, which in turn is less than a fifth of its total revenue. The book set is essentially just an icon, providing the public face of the product while most of the sales have been in the more practical electronic editions. But it became too extravagant to maintain just for icon purposes. So it is making thr transition from icon to afterthought. The 2010 edition will remain in print for those situations where only the printed page will do, but the number of buyers will be small.
This is big news not because Britannica is still important, but as a threshold moment in the evolution of books. Previously, when you thought of a book, the print edition was the primary product, and electronic editions were alternate versions of the product. Soon, for most books, one of the electronic versions will be the primary product, and the print edition, when there is one, will be derived from the electronic edition.
I have just this year made this shift in my own book production processes, and I make the transition having not yet released an ebook of any importance. I will continue to prepare print editions, and there continue to be serious software problems with all the ebook platforms, but at this point, it has become more reliable and less expensive to prepare the electronic edition first, then format it for the printed page. It is just the opposite of what we did in the past.
Wednesday, March 14, 2012
A broad smoking ban took effect in Scotland six years ago, and the change coincided with an improvement in medical statistics surrounding childbirth. Specifically, university researchers found a drop of more than 10 percent in the rate of premature births and more than 5 percent in the rate of low birth weight. The changes were large enough that they could not be explained by the decline in smoking that took place around the time of the smoking ban. The reduced exposure to cigarette smoke among nonsmokers is likely a larger part of the explanation.
Smoking bans have since taken effect in the rest of the United Kingdom and other countries. If similar results are found there, it will definitively link environmental cigarette smoke to premature births and low birth weight. Already it can be said that cigarette smoke is one of the major sources of short-term physical stress for nonsmokers.
Tuesday, March 13, 2012
The number of uranium mines is declining, and eventually, perhaps as soon as 2050, there won’t be any more. It is not that there will eventually be no more uranium. It is one of the more common minerals in the universe and on Earth. But on Earth, the vast majority of uranium is too scattered to be of any use. Uranium is needed for nuclear power plants, where it is used to generate electricity. Uranium is useless for that purpose if the energy needed to extract it is nearly as great as the energy generated from it, and that would be the case with the vast majority of the uranium on Earth. It is either too deep underground or underwater to get to in the first place, or it is in concentrations so low that the energy cost of digging would be greater than the energy value of the uranium.
But we will not be out of uranium when the uranium mines are exhausted. Already, a significant fraction of new uranium is mined as a by-product. It comes from a mine that is being operated to extract another mineral, such as gold or nickel. Any mine at all can dig up traces of uranium. At a small fraction of mines, the uranium is concentrated enough to be worth separating it from the other materials. This will become practical at more mining operations as uranium becomes more scarce and is price goes up.
It is a plausible job for robots, which might be designed to detect and separate uranium along with other mineral by-products without being harmed by the radiation. Advances in robotics could make small-scale uranium extraction a routine part of mining.
All of this will not be enough to power all the nuclear plants currently under construction through their potential useful lives. Even before all of these plants go online, some will surely have to be converted to operate on another energy source because of the high price of uranium. But at least a few nuclear power plants will be able to continue to operate beyond the end of the century.
Monday, March 12, 2012
I am going to go out on a limb and predict the demise of dry cleaning as a routine part of people’s lives. I come to this conclusion after reading a Guardian story on the United Kingdom’s largest dry cleaner, which finds that demand for dry cleaning is down in most areas, but still going strong in the most affluent neighborhoods.
The company suggests that this means workers are getting squeezed financially and have less money to spend on cleaning. I look at it a different way. The multimillionaires who are still getting as much dry cleaning as ever are the ones who are affluent enough to employ assistants to take their clothes for cleaning. But they are doing so, I believe, more because they are not paying attention to their own lives, and not so much because they have the money. People who are merely millionaires and have to take their own clothing to the cleaners also have the money to pay for the cleaning, but are not so easily able to find the time.
Then it is time pressure more than financial pressure that is causing the decline in dry cleaning. And though people’s financial fortunes may start to improve again this year, there is little sign that the time pressure will let up anytime soon. Rather, as time pressure continues to increase, dry cleaning will continue to feel the squeeze.
There is another reason that makes me believe dry cleaning cannot last much longer. What is dry cleaning, after all? It is the use of expensive and dangerous chemicals to clean fabrics that are too cheaply made to be cleaned with water. There is a certain backward-looking prestige associated with clothing made from this fabric, but this effect comes from the look of the clothing, not from the flimsiness of the fabric. With all the advances in materials engineering, it is hard to believe that the look of fine 20th-century clothing will not soon be replicated using fabric that does not melt when it gets wet.
This sturdier fabric will not only not require dry cleaning. It also will not require such a degree of craftsmanship to be fashioned into clothing. Twentieth-century clothing will suddenly be as cheap as blue jeans. And when the day comes that any starving university student can look like a London banker, I dare say the London bankers will decide they want to take on a different look.
Sunday, March 11, 2012
Daylight time begins today in the United States. This year, I was ready.
I have spent the last month getting up at 6 a.m. It was a sleep schedule that didn’t make much sense, given the hours of my daily obligations, but it makes sense now. This morning, I got up at the same time, but with the change in the clocks, it was 7 a.m., and the right time for me to be getting up in order to be in sync with the world.
The fact that daylight time could occupy a small part of my attention for several weeks in a row, or that it could lead me to create such an elaborate work-around, shows how expensive it is. If I had to put a price tag on the personal disruption caused by the switch to daylight time, I think it would be more than $100.
Of course, most people don’t prepare or pay much attention to the clock change for daylight time. They, then, may be even more affected. Epidemiologists can look at statistics for this week, the first week of daylight time, and find a substantial increase in mishaps of all kinds, from auto accidents to heart attacks. Some of the this is the result of people rushing to catch up with the clock that has jumped an hour ahead of them. Some, though, is just the result of the vague disorientation that inevitably results as people struggle to reset their biological rhythms to match the mechanical rhythm of the clock. The popular belief that daylight time does not cost anything is only an illusion. As many as 1 percent of the accidents and deaths that occur over the course of the year might be influenced to some degree by daylight time. From those costs alone, daylight time is an expensive exercise indeed.
I have been calling for years for daylight time to be phased out. And beyond daylight time, I believe there are many other hassles like it: governmental or institutional busy-work that we take for granted as part of life, but that, with careful attention, could be eliminated.
Friday, March 9, 2012
Libor, a base rate used to determine interest rates for trillions of dollars in loans and securities, is being reexamined after a series of revelations that show how thoroughly it was being manipulated by bankers and traders. Banks sought to lower Libor to appear more solvent than they were, or to raise it to increase the interest payments of borrowers with variable-rate loans. Derivatives traders colluded to raise and lower the rate in time with their own trades. A meeting was held Monday to discuss possible changes in the governance of Libor, and around the same time, Libor sponsor BBA removed from its web site what it said were inaccurate marketing statements about its role in creating Libor.
Allen Stanford, whose offshore bank was the center of a $7 billion Ponzi scheme, was convicted of fraud and other charges on Tuesday. The bank, Stanford International Bank, was seized by authorities in Antigua in 2009 shortly after U.S. authorities shut down Stanford’s headquarters in Houston.
The U.S. Treasury is apparently wary of the disruption it would cause to shut down Freddie Mac at this point, but in the meantime, the delay is allowing it to pile up more losses. This week it asked for another $146 million in Treasury support. Freddie Mac’s CEO has announced his resignation effective in October.
At closing time tonight came word that state banking regulators had closed New City Bank in Chicago. It had $72 million in deposits, most of which were insured. The FDIC will send checks to the depositors starting on Monday.
New City Bank had been in business, with a high profile but just one location, for just nine years. It had some of the signs of a bank that was too informal in its operations. It made 10 percent of its loans to insiders. That is a proportion high enough to cause concern, and perhaps it made it difficult for the FDIC to find a buyer. The bank also had a recent connection to scandal. One of its stockholders, with about a 0.5 percent share in the bank holding company, is a county commissioner who last month was indicted for tax evasion after allegedly using campaign funds to pay gambling debts.
Thursday, March 8, 2012
Japan’s SESC has filed a criminal complaint against Olympus and several of its directors and officers who it believes were involved in hiding $1.7 billion in losses. Prosecutors have filed charges in a few of the cases, with more indictments likely to follow. Other charges have previously been brought in the case, but the SESC complaint is the one that deals directly with the false accounting reports.
The scale of the case is sobering, not just in the amount of money involved, but also in the number of people who had to have been in on it, surely more than 100, the length of time the false accounting was kept under wraps, and the extent to which it distorted the company’s business decisions. It shows that public accounting is not the magic bullet that it was a quarter century ago.
Olympus’ false accounting statements were proper in form but not in intent. The intent to show a story of success overshadowed the intent to measure the company’s results. Yet this is a circumstance that could occur in any business, because every executive, by nature, shares the impulse to tell a story of success.
As long as accounting adapts itself to that impulse — and we appear to have run out of tricks to prevent that from happening — stockholders can no longer rely on a public company’s financial statements to indicate the financial condition of the company. This is a development that makes securities and financial investing inherently more risky than they were in the 1980s. As these accounting scandals become more frequent, they could threaten to unravel a substantial part of the financial system.
Wednesday, March 7, 2012
Exit polls from primary elections yesterday suggest that women are worried about losing status in general, and health coverage in particular, under Republicans.
There is some irony in the fact that coverage for birth control, an issue forced onto the agenda by Senate Republicans, overshadowed the Super Tuesday ballots yesterday. In February Senate Republicans voted essentially to remove all birth control from employer health insurance plans. Some observers thought the implications of the amendment that Republicans pushed to a floor vote, but failed to carry, could go farther than that. It was described, with little exaggeration, as a Republican “war on women.” No one imagines that Republicans could take away women’s access to unemployment compensation, for example, yet recent moves give the impression that they would find ways to chip away at it.
That would explain why exit polls show women voting in larger numbers than men in the Republican primaries yesterday, and voting with their pocketbooks, as the political expression puts it. In Ohio, according to one exit poll, women who have jobs voted more than two to one on economic issues, and by a wide margin supported candidates seen as less likely to take away their health coverage.
This poses a problem for Republicans, of course. If health coverage and respect for women continue to be political issues, it will rarely favor Republican candidates in the general election. Yet the culture-war contingent of the Republican base will hardly agree to take the “war on women” off the agenda. Republicans cannot afford to cut loose the extremists among their supporters, but until they do, the results among mainstream voters are likely to continue to be ugly.
Tuesday, March 6, 2012
I happened upon this headline today: “10 Low-Stress Jobs for IT Pros.” Anyone who works in the corporate side of information technology will understand instantly why that topic would matter. Job stress is so pervasive whenever you’re trying to do something new with computers that workers often burn out and go into a different line of work entirely. It makes sense that some workers might want to seek out ways to reduce the stress of work before they reach the point of burnout.
But why is IT work so stressful to begin with? Fundamentally, it is because businesses are still under-investing in technology, buying cheaper versions of the equipment and services they need, then hiring not quite enough workers to make it all work. It is a sign that there is still room for growth, in the short run only, in what at times seems like an already overgrown field.
Monday, March 5, 2012
Which candidate better represents the Republican ideals and traditions: the one who would bankrupt the country with trillions of dollars in new tax breaks for billionaires, or the one who could be a Sunday school teacher but for the fact that the thought of anyone helping anyone with anything makes him feel queasy?
For the last two weeks voters and pundits alike have been debating the question of the current two leading Republican candidates for president without necessarily invoking the irony that the question merits. Does the Republican party represent the worst smash-and-grab thinking of Wall Street insiders? Or is it a party of narrow-minded thinkers who just don’t like people very much? It is hard to imagine a discussion that could do more harm to the Republican brand.
It does not even help very much to point out that the whole discussion is based on a false dichotomy. “False dichotomy,” after all, is a construct of philosophers. It is an example of exactly the kind of college-educated thinking that Republicans have been trying to get away from in recent years.
But the longer Republicans and the voting public are faced with the current Republican dilemma, the worse it will get for all things Republican. Of course, the attack ads and lawsuits, not to mention the prospect of a contested or inconclusive convention followed by more lawsuits, aren’t helping the Republican name either.
There are solutions, of course, and this is just the kind of problem a national party organization is supposed to solve, but the national party is similarly divided, so it is left to the voters to sort the problem out. And what voters are saying so far is, “I don’t like this.”
Friday, March 2, 2012
More monetary easing looks unlikely in the United Kingdom, where officials still hope the country can sidestep this year’s European recession.
Credit unions are in much stronger financial condition than they were a year ago, thanks in part to the influx of a record number of new customers. More than 1 million people switched to credit unions in 2011, and that trend shows every sign of continuing. To help people make the switch, the NCUA is promoting a new credit union finder app, CU Locator.
Citigroup’s chairman is ready to resign, as of the annual meeting in April.
Another small Georgia bank failed. State banking regulators closed Global Commerce Bank in Doraville, along the Atlanta beltway. It bet heavily on commercial real estate during the problem years of 2006 to 2009. Local competitor Metro City Bank is taking over the deposits and purchasing half of the assets. Regulators’ work there tonight might be complicated by severe weather in the area, including a tornado confirmed in the area within the last hour.
Thursday, March 1, 2012
A federal court ruled against the graphic health warnings the FDA has ordered for cigarette packs. It seems likely that this ruling will be partly overturned on appeal, but it offers an excuse for revisiting the question of the design of the cigarette packs, and a chance to implement something more effective than the current designs.
It is worth noting that while the tobacco companies won this ruling, they did not get what they really wanted. The tobacco companies want to go back to the big-logo designs of the past, but the new ruling doesn’t set forth any legal grounds for that to happen.
When you look at the objective of discouraging people from taking up smoking, the FDA’s bold, full-color designs have a problem. The boldness and color glamorize both the cigarettes themselves and the diseases that result from smoking.
To stop attracting so many customers for cigarettes, the FDA should be looking for a way to make cigarettes look full and unimportant. Not full color pictures, but small print in black and white, or better yet, gray on gray. Not a distinctive bold typeface that could imprint itself on the brains of addicts, but a generic and archaic one, perhaps something taken from a 1950s typewriter. All this could be done without testing the limits of the law. The new court ruling gives the FDA another chance to get it right.