The financial world is ending, am I the only one who is OK with that.

So today the DOW closed a decent bit below 7,000. Newspapers and talking head are  bemoaning  the fact that this is the lowest the DOW has been since 1997. Personally I'm ecstatic.

1997 is the year right before the tech bubble really started to expand. You could say that it was a normal place for stocks to be at, a baseline of a healthy economy. After 1997 there was the tech bubble and subsequent burst when stocks fell from an inflated high to just below 8,000 before getting buoyed up by the housing bubble. This housing bubble then took stocks up ever higher before the collapse a year and a half ago.

Since that time I have been waiting for the DOW to drop below 7,000. If that was the number at a time when the market was in a non-bubble state and healthy, and we are currently in a recession than now we are getting close to being at a non-inflated stock market value. I am not saying that I think that it will get much better any time soon, but I can now say that the market is a whole lot closer then it was when it hovered around the 8,000 and then 7,000 mark.

So I am happy with the recent slide in the market indices. This is also because I am in a great position. I have yet to invest anything in the market, stock or housing. Now that price are dropping to reasonable levels I will probably be able to enter the market and see a decent return on my investment. For people who bought at the hight, or who were banking on continued ridiculous growth, well sucks to be you, but that is the market and it exists with risks.

This topic also makes me think of another thing I have noticed, news comparisons. Has anyone else noticed how the news media always makes a comparison with economic or disaster news to the past. Today it was "the DOW is as low as it was in 1997." Sometimes it is "the greatest drop in employment numbers since the 1970s." These comparisons make some sense, giving perspective on the last time that we had problems and getting people to think about what life was like during previous hard times.

Sometimes however the comparisons are just dumb, like "Gas prices are the highest since last week!!" I am all up for perspective, but really it should actually give some perspective.

New Economic Base

I hope I don't offend to many people by saying this, but I think Nevada and Wyoming are pretty worthless.

By that I mean that Nevada and Wyoming don't have a whole lot of revenue generated, except by whores, gambling and sheep. Not that I necessarily have anything against those industries, but I think that there is an underutilized resource, energy.

Wyoming is amazingly windy and Nevada has a whole lot of sunny deserts. I think that an investment in solar and wind farms in areas with little population could be a major boon in times of economic uncertainty, and all other times.

I was watching a show about Germany and there strategy for becoming more energy independent. The legislature passed a bill that guaranteed people who put energy into the grid twice the money that it costs to take out of the grid. So for anyone who wanted to invest in putting solar or wind generators on their houses they would start making a profit in just a few years, and continue making money until 2020 or so when the bills life will end. The program showed solar panels everywhere, just off the highways, on houses, and in pasture land with sheep grazing in between the panels.

I don't know what the problems would be with transmission, but with the new president and the money that he wants to pump into "green" jobs the infrastructure could be built.

I just think that now would be a good time to change the foundations of our economy, since it's broken. I was talking to an economist friend of mine and she said that 70% of our economy depends on internal consumer spending. With that much of our economy based in one sector it anything that disrupts the consumption hurts a lot. A more diversified economy seems to make sense, and why not diversify in part with energy exports.

It just works on so many levels.

Economic is Everything

I wish that I had studied economics.

For the past year or two I have been thinking that economics is the root cause of all decisions. Not economics in the normal sense of transactions involving money, but rather economics as always trying to obtain increase. Now this increase could be in prestige, influence, knowledge, faith, or anything which an individual values.

The theory is that for every type of situation (with kids, with spouse, family, work, school, church, bar, whatever) a person has a hierarchy of values; for example when I am at school my values, are getting information, socializing, grades, and networking in that order. However, when at home my values shift to making wife happy, making kids happy, sleeping in that order.

I think that whenever a decision needs to be made there is a mental process of comparing the foreseeable results of a decision in the view of how you will gain with respect to the values of the situation. So at home I am faced with a decision of helping a child play a game or helping my wife cook dinner, this one is easy because I can help the child increasing the child's happiness which in turn increases my wife's happiness and I acted in accordance with my top two values generating good feeling for me. When I am at work however, and a child needs help I ignore it, or spend little time or effort on the problem because my values are different and a child's happiness is much farther down on the list than production. 

The interesting part of this theory comes when two different value sets that are in opposition come into contact. The hypothetical would be in a business setting where the top value is acquisition of wealth and an opportunity comes along to greatly increase wealth but is illegal. This then effects not only the work value system but also potentially social values (increased prestige if it works, or shunning if it fails), religious/moral values (right versus wrong) and possibly others. Before a decision can be made a person must determine which values have the highest priority and which value set will generate the greatest return on the decision made.

I thought that with this system a researcher could figure out the values of individuals in a way that you could begin to determine how a person will act in any given situation. The problem is that the whole premise rests on circular logic;

A person acts in a certain way because of the value set in play during certain situations.

How do you know what they value?

Because of how they acted. 

Why did the person act that way? 

Because of their values......

but it is still fun to think about.

Us vs. Them

Here is another question that I have been wondering about for a year or two; how do groups form and maintain a common identity, or distinguish between "us" and "them".

I read a book for school dealing with the termination phase of U.S. Indian relations. In the book the govt. wanted to terminate the special status of American Indians by paying off outstanding debts. The legislative leader was a senator from Utah, and he wanted to show how well the system worked on the Utah Indians. The Ute reservation in Utah had three different Ute tribes, two from Colorado, and one from Utah. As the Utes saw the writing on the wall they made a strategic move in deciding who was "us". They decided that anyone of the tribe with 50% Ute blood or less would be considered them, or other. This decision affected the Utah Utes the most as they had interbred more than the other Ute tribes. When the termination order came around the Ute leadership struck a deal that only those "other" Utes would be terminated and the rest would maintain their Indian status.

To me this seems like a logical and deliberate step in the definition of "us" for economic and political reasons, and I'm OK with that. I wonder if there is ever a time when those are not the reasons why we define groups the way we do.

During the Cold War the us/them mentality was a common propagandistic tool, just as it was in WWII, WWI, and anytime a group of people feel the need to be mobilized against another.

I think that part of this might come out of the western religious traditions which are all dualistic in nature, and this spills over into all other thought processes.

Maybe that is false, because even in non-dualistic traditions the us/them issue arises. I have also heard that when ever there are more than three or four people in close proximity an us/them situation will develop. I listened to a thing on the bio-dome experiment and although all the people in there were scientists and friends groups formed that were antagonist towards each other. 

This is not to say that the groups aren't fluid, change in who is in or out can happen quite rapidly and also depends on the circumstances. If you look at the typical family model there are levels of us/them: 

1. my wife and children 
   
2. my parents and siblings 
   
3. parents and siblings in-law 
   
4. grandparent, aunts, uncles and cousins
   
5. grandparents, aunts, uncles, and cousins in-law
   

Really I think that it all has to do with economics, not just economics of money, but economics writ large, of trading or working in someway for something be it money, status, information, but that is another post.

Is reality consensus driven

Over the past couple of years my Grandfather has gone crazy. At least that is what I say when the subject comes up, but there is much more to it than that.

The real issue is that my Grandfather now perceives certain aspects of his current situation in a different light then the majority of people around him.

Now there are many things that people perceive differently every day, from words spoken, to the precise hue of a color. So what is the "problem" with my grandfather?

As I see it the problem is that his view is just different enough to cause problems with the rest of society, and has far ranging effects on those around him.

The idea of perception influencing reality has been around for a long time and has its own brach of philosophy called metaphysics which studies the nature of reality.

Doctors know about the phenomena and refer to it as the placebo effect.

This difference in perception is also one of the ways you can tell that a person is very well encultureated, because they can not perceive the world in anyway other then how they have been taught.

That being said, it seems that reality is really consensus driven; as long as the majority of people perceive things in mostly similar ways then there is no problem. However, when the is a perception that falls outside of the culturally appropriate boundaries the person is called crazy and in our society often institutionalized. 

This may seems as unfair, because who is to say that one perception is more valid than another? But if there was no unifying thread the only reality I can see would be chaos, but that is just my own perception.

Help Please

At school we have been working on a fabulous project. There is a daycare called Neighborhood House in Salt Lake that provides daycare for children and disabled adults for low income families. A number of years ago they acquired an acre and a half of land in-between their exisiting property and the Jordan River. It has been vacant, growing very good thistles for years, but it is now time for a change.

Our graduate workshop was asked to develop some plans to use this land. We were asked to try and make a spot for the community to enjoy while making the space work with Neighborhood House's existing program.

We talked with the staff, the kids, the adult clients, potential funders, and people from the community to figure out what should be on the site. In the end each student (all five of us) came up with our own design based on the input from our earlier meetings.

All of our designs are on this blog http://neighborhoodhousegardenproject.blogspot.com.

We need some help in figuring out the cost for some of our design elements, as well as general thoughts on the designs.

If you have a moment please look at the site and give us some feedback.

Thanks

I've been thinking about energy recently. The new administration has expressed a  desire to push forward with alternative energy and I think that it is a fabulous idea.

I have been wondering if certain areas could make alternative energy the basis of their economy, exporting it out to surrounding regions.

The area that I think about the most in this regard is Nevada (and parts of Wyoming). It seems to me that it would be the perfect place for large solar arrays, or wind farms. The place is desolate, with small farming towns, that really makes one wonder about the sanity of people who try and farm crops in the desert, or high plains. However the farming of energy, especially renewable energy would be ideal for boosting the local, and regional economy and providing for more secure and stable national energy environment.

The only problem I can see with this plan is transmission. I don't know the best way to get the energy from the middle of nowhere to the more energy consumptive cities.

My other energy thought comes from a show I saw on a German policy, where the legislature provided people with twice the amount of money for putting into the energy grid than it cost to withdraw from the grid. Basically there was no way that you could not make money if you installed a windmill or solar panels. The images shown were of thousands of houses with solar panels on them, solar panels on the side of the major roads, and out in the range land with cattle and sheep grazing beneath them.

I though this was a great idea. The government provided the proper incentive for people to make an initial, completely safe investment. Then when the bills term expires the country is blanketed with a renewable energy source and is less dependent on the more volatile international energy market. All that and it's good for the environment.