Saturday, January 21, 2017

The Library as as Center of Learning



Recent research from McKinsey & Company, the consultancy, estimates that in the next twenty years, fully half of currently existing jobs will no longer exist because of automation. 

The cloud and Artificial Intelligence and robots and Virtual reality can and will come to take those jobs away, they say. Anything that can be automated will be, and this applies across the spectrum. It will have an effect not just on the fast food worker, but the accountants and lawyers.

This is scary, but it has always been so. As the calendar turned from 1899 to 1900, almost half of the jobs in America were in agriculture. Now it’s two percent. If we were to go back in time and tell the thinkers of that time that in over a hundred years 96% of all farming jobs would be lost what would happen? There would be panic because it would represent a massive dislocation in the work force.

Was there reason to panic? In hindsight, of course not. The reasons were two-fold. First, entrepreneurs made huge technological changes that helped redirect the workforce from the farm to the factory. Innovators from Samuel Colt to Henry Ford made it so that the goods people wanted could be made at a scale people could afford the price tag. And it created jobs. On the other side, society started to invest in the people more – with compulsory schooling arising and the spread of accessible libraries in towns across the nation. Literacy became much more common place. American know-how combined with civic investment were the tools that created the twentieth century, the American Century.

We stand at a similar crossroads. The rise of technology makes some thinkers hopeful. With silicon and metal doing all the hard work, humans will be able to flourish in a way never imagined as creators and consumers of art. Other thinkers are deeply pessimistic, thinking that all the gains will accrue to those at the top while the losses are spread amongst the masses. If I were a betting man, and in a way, I am since I must live in this world, I would suppose that the truth lies somewhere in the middle. There will be winners and losers but the key is flexibility and lifetime learning.  Our community should make the investment for the next century that allows for this flexibility and lifetime learning.

It is as easy to say “No,” as it is to say “Yes.” The harder thing to explain is why you say either one.  In conversations, I have had with voters, the primary concern about passing the referendum was about the cost. I understand the concern. Every dollar out of our pockets is a dollar that is not paying for something else that we need right now. I know what it is like to slide your card for payment, thinking and hoping that you have enough money to pay for that purchase and not sure how you were going to pay for tomorrow. But investing in the community isn’t just about paying for tomorrow. It’s about paying for all the tomorrows. It’s about thinking for the long run and creating the flexibility and providing for lifetime learning today and in the future. Our current infrastructure in Brookfield isn’t up to the task, and the longer we kick the can down the road the more we tie our hands on needed investment. We need to make sure that when we look at the twenty-first century, we did our best to help it become the second American Century.

Friday, January 6, 2017

Not Looking Back on 2016, Looking to 2017

Like sand through the hourglass



I have this theory, that people in the south have the potential to be thinner in relation to the north. And it’s not just the heat. In fact, my theory runs counter to the idea that the south is flawed since the heat makes people slow. What is important is the light - when it is light out after work I want to do so many things. I go for walks or just sit in the yard with my feet in the grass while I read a book with my feet in the grass. But once that sun starts staying away longer and longer, the less and less I want to do. It gets dark and then cold and all I want to do is sit on the couch and eat chocolate.

This is my way of saying that this is a holiday letter. It’s just that the holiday may well be epiphany or MLK day before you get this. Sitting on the couch with a pile of cards that I will make nice individual notes to everyone, just not now, maybe this weekend.  So this part is impersonal.

In many ways, this year has been a blessing. I was able to visit family more this year than most years. I saw both my parents and siblings and my in-laws more than once. Mom and Dad came in for my graduation, cumulating several years of work and we threw our first big party at the house after three years as homeowners. The biggest blessing, of course, was being asked to perform the ceremony at Mandi and Matt’s wedding. Thinking of her face as I stood on that hill gives me great joy.

The year has been a time of loss as well. In the fall we lost my Grandma Mimi. I was lucky enough to be able to get to see her in her last weeks before her passing. But that small frail woman I said goodbye to was not how I’ll remember her. To me Mimi will always be a giant, me looking up to her from waist high as I stand in the kitchen, getting in her way while I try to help cook.

Other losses too. There was that election. That one, but I also volunteered this summer into fall trying to pass a referendum to get a bond passed to raise funds to build a new library. I went door to door advocating for the cause. It lost, but it was a new opportunity for me. I’m running for the library board in the spring. Here’s hoping that this election goes a bit differently.

So it has been a time for growth. I’ve been learning new things and meeting new people; taking on more challenges at work. I graduated school, and as much as I want to go back I’m holding off for now. Anita is the one that gets to back. She’s building human capital and gaining signaling value by going back to school for a certificate to bolster her job experience as a trainer. She’s still playing the guitar and banjo and learning new songs. She remains simply amazing and becomes only more so.

I’m not sure what 2017 will bring, but I look forward to more growth and meeting more new people. We’re planning on taking a trip to Canada to see the Northern Lights and some polar bears (fingers crossed I can get a passport). But I also can’t wait to see all my old friends again.

Sunday, December 18, 2016

Two Curses of Cash: On Rogoff



Rogoff argues that we should eliminate big bills like US $100 and its big economy equivalents. Doing so will have two benefits.

The first benefit is that most people do not use large bill. These are in the financial system in the gray and black economy where having dense stores of value that are also a medium of exchange facilitates crime like drug dealing and human trafficking. There is profit to the issuing countries of these bills, a seignorage income that would be lost if these bills were pulled from the economy, but the ills caused and made easier by their presence are worse than the loss.

The other benefit is that by not having cash around, it gives the central banks more space to move interest rates if necessary. Right now, there is an effective floor at zero percent that the Federal Reserve and its sister institutions can’t go much lower because once you impose significant costs to keeping money in reserves, then the option is to hold cash. There is some cost to holding large quantities of cash so Japan and some European banks have gone a bit below zero, but not that far. 

This space is important because even conservative Taylor rules of setting the interest rates would have been significantly negative in the aftermath of 2008. The zero-bound kept the Fed from going lower and it may have significantly increased the duration of the downturn in the aftermath of the crisis (especially since in the US and Europe where there was little help from fiscal policy because austerian parties bought into the fallacious idea of the family analogy for governments).

I’m on Rogoff’s side here, especially since it isn’t new to me as I have seen the idea at length in the work of Miles Kimball (ex-Michigan, now at CU) as he has made the argument on his blog. I’m more a supporter because of the second reason, which I am sure is the more controversial part of his argument – many people are suspicious of central bank activity, and they feel that giving the banks more leeway would encourage the activist central banks. I am of the opinion that independent monetary policy needs all possible weapons in its quiver as we have seen inaction at the exchequer cause real damage in the

Thursday, November 10, 2016

The Bond Issue Lost, but the Need for Brookfield Remains

Democracy in Action
Hello Neighbors:

In the past few months I have been trying to make the case to all of you why I think we need a new library. I have made the case on line and face to face. It was a cause I was passionate about, where in my opinion it was a good investment in the community whose time had come.

The referendum for that library bond issue was defeated this Tuesday.

I was disappointed, but what impressed me was the engagement of the community. I can’t say if there were other things on the ballot that might have driven it, but turnout far exceeded expectations. Over seventy-five percent of registered voters cast ballots one way or the other for the library, finding their way to it through all the top of the ticket choices and the judge retention elections.

This shows how engaged as a community that we all are, and despite the election not going the way I hoped I am heartened by all the involvement. Government at the local level is about individual choices we are all empowered to make – in fact to be successful it demands action of the citizens.

That said, I volunteered my time as a citizen because I feel that the library is still an important part of our community’s infrastructure that needs improvement. The building is aging and there is not enough space for the programs the community already engages in, let alone will demand in the future.

The need for space was real and still is real. The library as a community center cannot be replaced by a better home Wi-Fi connection or networked e-books. The library is the beating heart of the community. I thank so much those who believe in that vision. The need means that we will be asked again what our vision for the community is, and in what shape. It will be an ongoing conversation with the citizens of Brookfield. I look forward to being part of this conversation.

Wednesday, November 9, 2016

Don't mourn too long, then organize.

The senate, and by extension the electoral college are fundamentally anti-democratic bodies that exist because our founding fathers were not all-knowing deities who agreed on everything but instead were men with quarrels and grudges who disagreed on much.

Part of that was how to yoke together two pieces of a new country that was failing in light of the looser articles of confederation. These two parts were a mercantile north and an agrarian south, both of which were dependent on slave labor in the homes and in the fields. Small and rural states are over represented in both the prior mentioned bodies.

That said, Hillary didn't make the positive case for her or the negative case against Trump strong enough that enough people in the right places could look into their hearts and minds to make the choice for her. As much as I hate the electoral college, those are the rules of the game. I went to bed hoping that I would be disappointed by the status quo being carried forward when there was a more left opponent in the primaries who seemed to generate more enthusiasm.

But I'm still in shock. Donald Trump was elected president, and as much as I wish this was some clever fiction like Man in the High Castle, it seems to be our reality. Going forward there will be much complaining, since we as always are alienated from so much of what goes on at a federal level. Even with gross dissatisfaction of the congress, incumbency is a huge advantage so the same people get sent back.

The bright sport for me is that so many of the nations youth voted overwhelming lefter than the general populace both in the primary and in the general. We can be sad, but we have to learn from the reality. Knock on doors, run for office, write your representatives. Don't mourn too long, then organize.

Tuesday, November 8, 2016

Population Bombs

There have been two big blips in panic about population. In the Early 1800s, Maltus looked at a chart of growth of population which was curved because it was cubic against a graph of growth which was linear. There is a point where such a graph intersects and population grows beyond the resources we can get at easily. Malthus (in his first edition, toned down in subsequent editions) that aid to the poor was immoral because it pushed the world towards that point. The industrial revolution saved that from happening, as mechanization made resource use more efficient.

Then in about the 1960s, there was further panic, basically looking at the same kind of graph. This one was based on the idea that food production globally was peaking, and population growth was still going on. Thinkers like Paul Ehrlich and consortia like The Club of Rome put out books with titles like "The Population Bomb" arguing that famine was neigh. Of course that didn't come to pass because of the Green Revolution.

The problem is that we can't count on technology to save us all the time. The current "revolution" in information is more about contentedness and less about access to resources (Though there are things that will be able to help the so called "bottom billion" since they're connected through mobile phones and missed the desktop era). The one thing that saves us is that as countries develop, birth rates go down. So population growth slows. As more countries develop, the global growth slows. This is good in terms of resource depletion. It is also problematic because capitalism as we know it depends on growth. There are two parts of growth in a capitalist economy. The first is technological growth, something called by economist as Total Factor Productivity. We get better at making things. The other is population growth. So if a country isn't growing, it feels like a recession. Japan has had this problem for decades, and now it looks like the west is facing the same problem. One solution is immigration, but a lot of immigration dilutes a homogeneous culture, and you get lots of backlash over it.

Ultimately, I'm not sure at what level we can say that population growth and levels are a problem. Especially because if you look at potential solutions, there's nothing good. There is a lot of push back against the One Child policy in China, and it has shaped demographic trends that will echo for decades. New entrants into the Chinese workforce are due to peak pretty soon, and now they have a bunch of old people to support. It's not a pretty picture. If it is a problem, it would take a large coordinated effort to solve. And that assuming the climate at stasis.

What's probably going to happen is a crisis point pushed by climate change that kills a mass of the poorest people on earth, and that might get the ball rolling in the rich countries.

Saturday, November 5, 2016

A Personal Financial Case for the New Library in Brookfield, Illinois

Hi. My name’s Edgar Mihelic. I live and work in Brookfield. I support the library.

I am also a member of “Residents Championing a New Library” the PAC advocating for a yes vote in the referendum.

What I want to talk about today is independent of the PAC and my employer and is in my role as a private citizen. I want to hit two points that important to me because of my educational and professional background. I have an MBA and am the Director of Finance at my organization. This not part of the PAC communication in part because it is a bit wonkish, and not necessarily universally applicable.

This first bit is about your personal cost. People don’t like the idea that the library will cost them X amount of dollars. What is easy to forget about an increase in local taxes is that anyone who pays more in taxes and mortgage interest than the standard deduction will be able to deduct the increase from their federal taxes. This means that any extra local tax lowers your federal taxable income. So if you’re in the 35% bracket, any extra local taxes is not a dollar for dollar increase, but will be decreased by that amount. My taxes will go up, and I’m ok with that from an investing in the community standpoint, but it won’t be one for one. It will be less than X.

The second bit is about the cost of money. I don’t have the exact bond details in front of me, but what is important here is the timing. The interest rate has never been lower. If you are looking at the idea that eventually the building will have to be replaced, and you need to borrow for that (and borrowing makes total sense because you won’t draw from current funds because a new building is a large capital expense), then there literally has been no time like the present to invest in any infrastructure projects - Ever. At issue is that the Federal Reserve wants to increase rates. And they want to keep doing it. We’re at the bottom, and borrowing will never be cheaper.

I understand that this is a contentious issue in the community, and there are many angles to look at it from. I just haven’t seen either of these points fleshed out in conversation here and I think they’re important to raise. I hope everyone enjoys the debate where your preferred candidate will do well.