Well, ok, there WAS kind of a problem with small Shenzhen manufacturers... mainly, because Google would have had no effective recourse against them if it leaked out. Samsung, Motorola, Acer, Asus, Lenovo, and Toshiba are all big enough to sue the bejesus out of if Honeycomb ended up on lesser hardware and the leak could be traced to one of them. You can't say the same thing with respect to a small factory in Shenzhen.
In theory, Google could have possibly cut a deal whereby they didn't get the source, and only get a compiled distro from Google itself... but then that raises the question of chipset compatibility. If they didn't use a Tegra2, it would have been two strikes against them -- one, because it would have been a foreign build environment compared to every other Honeycomb tablet, and two, because if it were downward-compatible with cheaper tablets, it would have opened the door for that Honeycomb build to end up on lesser hardware anyway. I can almost guarantee that if someone from Shenzhen showed up in Mountain View asking to buy a build of Honeycomb for a high-end Rockchip-based tablet, Google's first question would have been, "How can you guarantee somebody won't be able to edit the compiled build to make it work (slowly) on a lesser Rockchip-based tablet?" In a sense, the Tegra2 was also an effective dongle that kept intact copies of Honeycomb from running on lesser tablets.
> The Democrats are doing it exactly right...and can't get anything passed.
Well, at the moment, the Republicans can't, either. You could cynically argue that the schizoid nature of Congress today demonstrates that, at this moment, there IS NO real consensus about what Americans want Congress to do, and allowing the worst elements of both parties to openly percolate to the surface in public view is healthier than a situation where either party can be actively harmful to the best interests of somewhere between 40 and 60 percent of voters' interests.
Here's the magic test -- if Congress' leaders, after grandstanding about having the support of most Americans, were able to irreversibly call for new elections to occur at some random, unpredictable date between 60 and 120 days from now (so they couldn't pick a moment of scandal and try to ride it to victory, and had to face the real risk of changing tides between now and then), how many of them would actually vote for it? Not one. A few firebrands who aren't very powerful, maybe... but leaders? None. As much as they bitch about gridlock, there's no way in *hell* the Republicans would risk letting a few more Democrats in (or, god forbid, a RINO or two), and no way the Democrats would risk giving the Republicans an unbeatable majority.
The fact is, Congress is gridlocked right now, and it's probably a good thing. Think about how much good the side you support could do if they were able to, then sober up and realize how much damage the other side could do if they had their chance. Where things are going to get REALLY interesting is when the 99%/Occupy crowd starts skimming off the disaffected casual supporters who were previously clinging to the Teaparty groups as the "not in power party" and start drifting over to the other side. It's already happening -- you can watch the Teaparty leadership get more strident and radical by the day, because the leftern end of the spectrum is walking away and ceasing to anchor them towards the middle. The same thing will eventually happen to the 99%/Occupy crowd... they'll have their surge of centrist support, then the middle crowd will start to get uncomfortable with its most vocal leaders' leftist politics, and drift away (leaving them to become more radical and ardent on the left). Stir, rinse, and repeat.
It's the story of American politics. The Democrats of the 70s and 80s were pretty hardcore on the left, as the middle drifted into the Republican camp. Now the middle has drifted back into the Democratic camp, pulled it back towards the center, and the Republican party has gone floating off into right-wing extremism like they did in the late 50s/early 60s. Rush celebrates the defection of RINOs, and the more leftward Democrats mourn the fact that it's now OK for Democrats to support Alaskan oil drilling.
It only works ONCE, because what you've just described is revolution, and revolution inevitably becomes tedious and annoying to pretty much everyone - including the revolutionaries themselves. Businesses larger than a sidewalk vendor can't cope with laws that change on a daily (or even a weekly) basis. It's terrible to say, but to a certain extent bad laws that are stable and can be worked around are generally preferable to volatile laws that constantly change in unpredictable ways.
The real key to reforming US politics is to reduce the power of parties to enforce discipline on their members, and reduce them to brand names that let voters know they're likely to be getting a certain bundle of beliefs, without the teeth to force them to support specific positions that go against the best interests of the specific people who elected them.
If you want to know when Congress really started to go down the shithole in recent years, look no further than the "one-vote win" policy that the Republican leadership in Congress began to aggressively follow sometime around the turn of the century -- the policy of suppressing debate, and crafting laws that compromised *just* enough to win by exactly one single vote, and nothing more.
I personally know at least one individual involved in the policy, and in retrospect even they've admitted (privately, years later) that it was misguided. It's something that might be tolerable in a crisis, but in the long run it actually works against the party in power because the disenfranchised 49% ends up being slightly different after every vote, and eventually you end up with a situation where the percentage of voters who regard themselves as "disenfranchised" starts to approach 60-70% (because people forget about the votes that were in favor of things they don't particularly care about, and vividly remember the votes of things they care about passionately). That's exactly what's happening today.
A good place to start the reform might be to look at how the internal power structure of the Senate differs from that of the House of Representatives. The Senate isn't perfect, but it does seem to be a tiny bit more resistant to blind partisan politics (statistically, a Senate Democrat and Republican from the same state are more likely to vote the same way than they are to vote with their party leadership). A good place to start might be allocating committee memberships and leadership via secret Condorcet balloting instead of having representatives elect one leader (almost inevitably and without exception, on party lines) who then proceeds to allocate memberships and leadership positions on equally rigid party lines (with occasional exceptions for "well-behaved" members of the other party). Maybe even throw a complete monkey wrench into the power process by picking a dozen representatives at random and giving them first choice at committee memberships, before anybody else is allowed to bid on them. You don't necessarily want to throw the process into complete upheaval, but rather ensure that at least one key position ends up statistically in the hands of someone would can use it to screw up the neat, orderly plans of the power establishment -- if only to enforce greater debate and compromise. I've come to believe that real debate in congress in a good, healthy thing, and attempts to suppress it by *either* party are bad.
I can almost guarantee that there are at least a half-dozen guys who won't be going to bed tonight just so they can post a semi-working bootable ICS distro for Xoom before dawn breaks over western Europe (and earn bragging rights over their peers with Transformers, A500s, Galaxy Tabs, and Thrives). A version you're likely to regard as stable will probably take a week or two. Moto's official build will probably get released to a yawn 3 months from now, long after everyone who passionately cares about ICS has already upgraded to it on their own.
Personally, I'm thrilled. I can't wait to rip into the code that handles the power button, and try overloading it to create a new double-click gesture that means "unlock the orientation, read the accelerometer, reorient the screen if appropriate, then lock the orientation again" so I'll never, ever have to choose between the frustration of having the screen rotate inappropriately while I'm laying in bed, and screwing with 30 seconds of active gesturing to try and switch it between landscape and portrait.:)
> What was that reason, that they didn't release Honeycomb?
That, and to temporarily give higher-end tablets with better hardware a fighting chance against the onslaught of underpowered K-mart-bound tablets from China with 10" 480x800 displays and 200MHz CPUs. Google wasn't terribly picky about whom they allowed to have access to Honeycomb, as long as your hardware met their minimum spec. It wasn't ideal, but it was the only way to give tablets like the Xoom, Transformer, and Galaxy Tab a fighting chance to break out of the 480x800 ghetto and give us hardware that wouldn't have iPad owners laughing at us.
> And all laws preventing anybody from setting up an ISP of any kind.
And what laws might those be? If anything, we need federal laws to force municipalities and deed-restricted communities to allow competition, instead of allowing them to sign away the rights of their residents in near-perpetuity. The fact is, housing is about as non-elastic of a market as you can get, and it's hard to guarantee your own rights to competitive broadband in perpetuity EVEN IF you do your homework and make it a point to check out before buying a house somewhere.
Hell, before I bought my house, I actually (over the realtor's vehement objections) made the offer contingent upon DSL availability. I did my homework, verified that the neighbor had DSL, and signed off on the contingency. Two weeks before moving in, I called AT&T to order DSL, and was informed that the DSLAM was at capacity, and I couldn't get service until somebody moved, died, or disconnected. Fuck. Damn. Crap. And several other key expletives.
Living in a neighborhood with a HOA (and, in South Florida, and most parts of the country, it's damn near impossible to buy into a neighborhood less than 50 years old that DOESN'T have one), there's the ever-present risk that some future board might cut a deal with someone like Comcast to eliminate physical access to competition. If it ever happened, short of going postal and doing very, very illegal and immoral things in retribution to punish them for screwing up my broadband, there's not much I could do because the house is (slightly) underwater and unsellable. The idea that someone can casually sell his house and move to take advantage of preferable free-market broadband opportunities elsewhere is a sick joke that fails miserably in real life.
Here's some food for Libertarian thought: the FCC's supposedly oppressive yoke of burdensome regulation is PRECISELY the reason why you can tell your city and/or homeowners association to fuck off and go to hell if they try to prohibit you from pointing an 18" dish at the sky and doing an end run around their local mischief. When a higher level of government tells a lower level that it's not allowed to limit your freedom, that's a GOOD thing worthy of celebration, regardless of whether or not it passes an ideological purity test.
Satellite has terrible latency that's about 50% due to the laws of physics, and 50% due to the horrible way Hughes implemented the physical layer protocol (ie, Hughes' equipment takes already-bad latency due to the 50,000-mile round trip and adds another 500-1500+ ms of latency on top).
The ideal protocol for rural broadband would be IDSL + satellite in parallel. Send everything both ways through both routes, and simply ignore (and terminate, if it would matter) the one that would finish second. So, you'd do your https handshaking via the IDSL link, send the page request via IDSL (short, no latency), receive the response via both (with the IDSL response probably finished faster since the html page is likely to be shorter than everything it references), then request the linked content via IDSL and receive it in parallel via satellite. Likewise, for email, you could handshake with the mail server via the IDSL link, have it send the header responses via IDSL, and send the bulk of the message and attachments via satellite. You'd be shoveling around lots of redundant data, and you'd need a more sophisticated router at the end user side with application-level gateway capabilities (to decide which chunk to use and which chunk to abort and/or throw away), but it would go a long way towards making satellite more usable. The nice thing about IDSL is that it can be made to work just about anyplace urban enough to have a paved road, landline phone service, and electricity. It's not really fast, but it has almost zero latency compared to satellite, so a transport protocol that used each independent stream to its best use would give you generally fast service capable of transparently bursting (with higher latency) as needed.
The problem is that the whole issue of net neutrality is misframed. We don't necessarily need or want "net" neutrality. What needs to be absolutely sacrosanct is LAST MILE NEUTRALITY. We should all have the absolute, inalienable right to have our network traffic handled with absolute neutrality between our endpoint device (router, phone, whatever) and the nearest peering point where access is available on open, equal, and neutral terms to all (ie, not "free", but if AT&T pays $N per month for a 1U rack slot and the right to run a single fiber to it, anybody else should be able to do exactly the same thing for exactly the same price.
To keep carriers able to blur the line between last-mile and "internet" service honest (say, a carrier like Verizon that bundles "free" internet access with 2gb cap with the cost of monthly wireless service, but charges 1c/meg wholesale costs to anybody who peers privately with them), VPN traffic should be the one exception that enjoys special protected status and by law can be neither favored nor throttled relative to traffic of the network's most favored provider. In other words, Verizon would be perfectly free to throttle Netflix in favor of Blockbuster, or Google in favor of Bing, but if they did, VPN traffic would have to be given exactly the same priority as their otherwise-favored Blockbuster and Bing traffic. This would empower consumers to do an end run around the carriers by purchasing VPN service from some thirdparty with traffic policies they happen to like better. In the long run it probably wouldn't matter much, but like legislatively-mandated equal access to landline phone networks, it would nevertheless create opportunities for niche (if expensive) services that otherwise wouldn't exist at all.
The truth is, hardcore last-mile neutrality isn't necessarily about lower prices for Joe Sixpack -- it's about enabling services for Slashdot users that otherwise wouldn't be available because they don't neatly align with the business plans of AT&T, Verizon, or Comcast. It's about being able to do an end run around them and enjoy services they aren't themselves necessarily interested in selling you, or allowing you to buy from others.
(example: if you're moderately wealthy, live in the middle of Georgia farm country or exurban Dallas "Horse Country" and want broadband, a company like Covad will happily twist AT&T's arm and force them -- at slightly exorbitant cost -- to provision wholesale dry copper between the nearest central office and your house and give you what you want, even if AT&T itself would tell you it simply can't be done and broadband isn't available in your neighborhood).
Honestly, we're going backwards insofar as searching goes. For god's fucking sake, almost 15 years ago, we could do things like proximity searches (only count matches if the words are within N words of each other) and brute-force exact matches of things that would otherwise be stopwords (you know, sequences of words that are individually meaningless and background noise, but refer to something interesting when taken as an exact literal string that has to match verbatim).
My first memory of Google was disbelief that it couldn't even handle a search for something like "AT&T" or "C++" without barfing up results that had nothing to do with either one.
One point to keep in mind: SMART has (so far) proven to be almost completely useless in the specific context of SSDs. Every single report I've read about SMART and SSD failure has said that it either didn't work at all, or barely had time to log its suspicious before the drive failed. That's actually the biggest single problem with SSDs... they don't necessarily fail more often than rotating platters, but when they fail, they fail with basically ZERO advance warning (unlike conventional drives, which -- assuming they weren't dropped -- tend to follow a predictable curve of escalating read errors.
Actually, the saddest part of all is that the overwhelming majority of mechanical failures are due to failure modes that wouldn't even be all that hard or expensive to REPAIR without substantial data loss if the manufacturers could be arsed to even offer it as a service, instead of walking away and leaving it up to hyper-expensive thirdparty data recovery firms who are forced to do the repair the most inefficient and expensive way possible, then mark it up by several orders of magnitude simply because they can (effectively pricing everyone BUT large enterprise customers out of data recovery altogether). I can't think of any other mechanical component widely used in both enterprise and consumer devices that's as simultaneously failure-prone, officially-irreparable, and has such enormous consequences arising from such failure. For the most part, manufacturers don't even TRY to design drives so they'll fail in a reparable (short of outright catastrophe) way. Or at least start failing in a very, very public and noticeable way, instead of trying to hide the problem and sweep it under the run until the drive finally dies for real and it's too late to cheaply do anything to save the data.
> Wow, how much do you have to pay for an Android developer licenses to do the same thing? $100. Shocking.
Try $0. Android owners don't have to play "Mother, May I?" with Apple and jump through hoops to run our own apps on our own phones. We can install our own.apk files anytime we feel like it. If you want to publish on Android Market, it's $25.
If cost is no object, fine. Go with the "enterprise" hardware. In duplicate or triplicate. But IMHO, if it comes down to choosing between a single certified "enterprise-class" hard drive, or a pair of Velociraptors in RAID1 (or better yet, a menage-a-trois doing RAID5), you'd have to be completely insane to sacrifice redundancy for minimally better odds of non-failure by an expensive single drive.
Yeah, the $70 drive from Newegg is 7200 RPM, 2+TB, and has 64mb cache. The $300 drive from HP is 5400rpm, 320mb, and comes with a piece of paper saying it's 'certified' compatible with the server, and they'll replace it free when it dies 7-18 months from now (same as the $70 drive's equally short lifespan). What a bargain.
Spending more for SLC vs MLC? sure. Ditto, for the network gear. But don't kid yourself... "enterprise" drives are no less failure-prone than their Best Buy Brethren. Nowadays, they're *all* crap.:-(
Count your blessings. At least spaces in directory and file names are (still) culturally taboo in LinuxLand. ${deity} help us all when Ubuntu changes names to "/user files/local files/et-cetera/my configurations/my apache configuration" in a moment of complete insanity...
> Trying to understand all those folders It hurts the widdle windows users' heads > since they don't understand why they can't just keep throwing everything in C:\
(dryly) I see you've never visited \winnt\system, \winnt\system32, and the half-dozen or so directories with parenthesized "x86", "64", and/or "wow" that stupidly perverted the entire win64 file hierarchy. Sigh. We finally got symlinks & real directories for \users and \programs, then Microsoft realized its "error" and fucked them all up even worse than before. Sigh.:-(
Florida does the same thing. I can't tell you how many roads I've seen go from being a narrow 2-lane road without shoulders, flanked by deep ditches, and 45mph speed limit, to a brand new 4 (sometimes 6!) lane road with curbs, sidewalks, wide corner radii, dedicated left turn lanes, and (@*#$&( 35mph speed limit.
> I'm surprised that fuel consumption, being a big national issue, hasn't gained traction with the speed limit people
Air conditioning. The longer you're in the car, the longer it's running on max. If your trip takes 10 minutes instead of 14, you've eliminated 4 minutes of A/C runtime. Any fuel you save by driving more slowly is going to get burned away by the air conditioner in the meantime.
The problem is, it only really works when you're talking about 4-lane roads. The moment you start talking about 8-12 lane roads with left exits (like I-95 in Miami), the neat, orderly plan just kind of disintegrates and falls apart.
That's not quite true. Chinese companies over the past 10 years have been carving out a new market category for themselves -- things that are dirt cheap due to sheer unfathomable economy of scale and large-scale ASIC design. When your domestic economy *alone* has more than a billion consumers who, due to language, aren't terribly thrilled by foreign (ie, English-oriented) alternatives to begin with, you can hardly help but become very good at cranking out millions of products. Look at phones. Companies like Huawei have more real customers within 500 miles than Motorola and Nokia would have if they owned 100% of their respective (American & European) markets in their entirety.
Yes, Chinese companies copy. So did Japanese companies. So did American companies, for that matter (back in the 1800s, European nations were perpetually up in arms about cheaply copied goods from America flooding their markets). The point is, if you focus on the copying too much, you're likely to miss the REAL long-term threat presented by Chinese companies to America and Europe -- their unbelievable potential for vertical integration and unbelievable economy of scale that will keep them competitive LONG after workers in Chongqing are making wages comparable to workers in Tennessee.
You can stop reading, but it doesn't change the fact that we HAVE an economy because people are forced to invest instead of passively sit on money in a vault. Take away inflation, and you're left with de-facto feudalism where wealth is more or less eternal and static.
> If someone works hard and saves up to buy something large, like a house, your policy effectively steals a portion of that savings from them.
You'll have to pick a better example, at least with specific regard to "house you buy as your personal residence". Within comparable markets (obviously, someone selling a house in Detroit with the expectation of buying a comparable replacement in Los Angeles is in for a bit of a disappointment), you can sell your house and buy a comparable one with elsewhere. Now, you might not come out as well if you bought a house purely as investment property, but realistically, for about 98% of Americans (slightly distorted by flipping 5 years ago), "buying a house" is synonymous with "buying a house to live in as your one and only residence."
The fact is, if you're even remotely close to a typical middle-class American, your savings are a complete fiction anyway. They're a temporary insurance policy against a cash-flow disruption so you can keep making minimum payments and avoid losing *everything* in the meantime. Remember, in the context of inflation, 'savings' is almost entirely a synonym for "cash under the mattress", and NOT "investments", because investments (including invested retirement funds) generally inflate along with everything else.
So, if we're going to get personal, yes, fuck anybody who thinks it's worth destroying the economy so they can store cash in a mattress and expect it to magically retain (or gain) value. They're such a wacky, obscure, extremely rare edge case in the grand scheme of things, they aren't even a blip within the margin of error.
The world also obviously survived after Rome ceased to be relevant. That doesn't mean life was particularly pleasant in the former empire for the next few hundred years.
Look at Russia. Obviously, Russia took a huge hit to its pride when the Soviet Union broke up. It took a financial hit, too. Nevertheless, ~20 years later, Russia itself isn't doing too badly. It's the OTHER parts of the former Soviet Union, and its former allies in Eastern Europe, who took most of the hit.
As fashionable as it is to diss and hate the US, if the US decided tomorrow that it didn't care what happened more than a hundred miles offshore, took its toys & money, and "went home", the economies of just about everyone on earth would be left in smoldering ruins as surely as if we'd thrown nuclear bombs at them on the way out. The US would clearly take a hit, too... but for the most part, life would go on in as it always has. Some parts of the US might even see a net boost (especially godforsaken places like North Dakota, thanks to oil shale that would suddenly become imperative). Overall, though, the US would end up a little worse off, and just about everyone else would end up *profoundly* worse off. Would it be eternal? Of course not. Nothing ever is. But as far as anyone alive today, or anyone likely to be alive before the last person alive today is dead, is concered... yes, life would be worse. When it comes to empires and economies, "Long Term" really does mean "long term". Rome was pretty decisively "fallen" by around 1200AD, and the renaissance didn't begin for a good 200-400 years after that.
At the end of the day, if you have to make any general rule, it's that people shouldn't be allowed to openly engage in long-term speculative financing. If you look at every major bubble we've had since the Great Depression, most of them went through their explosive-growth period when people with no real understanding of the risk involved started to do the equivalent of getting a bank to finance a bucket of tokens for a trip to Las Vegas -- with the enthusiastic cooperation of the banks involved, because they knew that 99.9% would get paid back, and they were making plenty of fee and service-charge revenue in the meantime -- but failed to recognize that their losses were self-limiting up to a point, because there were more people heading to Vegas with buckets of tokens than actual casino capacity, and two dozen mega-casinos under construction with the ability to drain every last one of them of their tokens within a matter of weeks once they finally opened before going broke themselves because the supply of gamblers dried up.
One problem was that during the real estate boom, lending standards generally didn't distinguish between loans to buy a house for YOU to live in, vs loans to buy a house for investment purposes. Without getting into moral issues about encouraging home ownership, there's a more practical reason to consider it: one way or another, you need a place to live. Regardless of what happens to your home's market value, if you can afford the mortgage payments, you're likely to keep making them on the house you live in, because the alternative would be to pay rent instead.
Here's approximately what happened in Florida:
Speculative Builder gets Indifferent Bank to tentatively approve the construction loan for Egregiously Overpriced Condo In Mediocre Location with Tiny Units and Inadequate Parking. Indifferent Bank requires pre-construction sale of 80% of the units with 5% down, and pre-approval of purchasers for a Liars Loan Mortgage.
Joe Flipper shows up on Pre-Sale Day with $10,000 cash-advanced from his credit card. It doesn't really matter what he says his income is, because Predatory Mortgage Company (a division of Indifferent Bank) doesn't really care. It pretends to run a credit check, and pretends to not notice that he's maxed out one or more credit cards to get the down payment. Nobody asks whether he intends to live there, and the loan application gets rubber-stamped.
Speculative Builder builds a 17-story condo with 650sf 1-bedroom units and the minimum parking the zoning department will let him get away with, and throws it down on a street surrounded by single-family homes and 7 other similarly out-of-context speculatively-built condos.
Joe Flipper closes on the unit. At this point Predatory Mortgage Company knows his credit is shit, but they don't care because they're going to collect their fees and sell off the mortgage to Toxic Securities, Inc (another division of Indifferent Bank).
Joe Flipper puts his unit on the market, and so do the buyers of the other 140 units. He lists it for double what he paid, and goes for 2 months without a phone call. He looks up the listings for other units in the building, and sees that the original developer is dumping its own inventory for 80% of what HE paid. Oh... shit. He fights with his wife Jane, and grudgingly drops the price down to what he paid minus the $10,000 he paid as a down payment. Nobody calls, because he's still charging $25k more than the developer.
At this point, Joe's savings are getting wiped out. He's paying almost $3,000/month in mortgage, taxes, insurance, and condo fees for a unit nobody is living in, on top of his credit card payments and his own mortgage. He puts out an ad for a tenant, and joins the owners of the other units. The problem is, it's a tiny 1 bedroom condo in semi-suburbia surrounded by much, much larger townhomes and single-family homes, so all he can get for it is $1,200/month from some guy from Latin America who refuses to sign a long-term lease (because he's going to use i
> If they are too low, people will put their money elsewhere, looking for a better return. The problem is, that turns into bubbles.
Exactly. When "safe" investments like T-bills have interest rates that barely cover the handling costs of people institutional investors would have to hire to handle and keep track of them, they start looking for other "safe" things to indiscriminately dump money into -- things like oil, natural gas, and food commodities. Ethanol market distortions and increased fuel purchases by China have certainly made things worse, but a big chunk of the reason why we currently have soaring food prices is because institutional investors are dumping enormous amounts of money into futures for basic commodities, and driving up THEIR prices in a wave of speculative frenzy that's likely to end badly for everyone (both investors AND consumers) as well.
As an economy, the US would be far better off to start financing nationwide freeway improvements and high-speed rail in places where it could build a viable market (Northeast, Florida, Chicago region, DFW-Austin-Houston, Pacific Coast), financed by bonds with interest rates high enough to take some of the speculative pressure off of commodities. Even if it did nothing but shift the costs from food to infrasture, at least we'd HAVE something useful to look at 10-15 years from now instead of higher prices paid for surplus food that ends up getting destroyed anyway. If we're going to burn money, we might as well burn it on something that won't spoil and be wasted 18 months from now. Right now, both construction and real estate markets are in the shithole, which makes it the perfect time to buy up land for transportation corridors and build roads & rail at fire-sale prices.
> You don't have to put your money at risk because you can just save it in a vault and it won't lose value.
That's *precisely* why small amounts of inflation are a good thing -- it forces wealthy individuals to put their money to work and actively invest it in productive endeavors to avoid having it slowly lose value over time. As fashionable as it might be to cry over poor, frugal individuals whose meager thousand dollar savings are now worth $900, the truth is that 99.9% of Americans have no real savings to speak of. If you have $10,000 "saved" and owe $300,000 on your mortgage & student loans with 20-30+ year payback horizons, your $10,000 aren't "savings" -- they're "short-term cash flow insurance" to keep your credit rating from getting destroyed if you end up unemployed for 6 months.
The truth is, the middle 70% of Americans (those falling between the lowest ~29% and top 1%) would overwhelmingly benefit from inflation, because the majority of their "savings" are negative in the form of long-term debt with fixed interest rates. A few years of relatively HIGH inflation would have the net effect of washing away most of that long-term debt into irrelevance relative to their new, higher & inflated annual salaries. A thousand dollars per month in debt payments are painful when you make $50,000/year. The same thousand dollars in debt payments are almost a nuisance if your income increases to $250,000/year.
My parents aren't wealthy, but I saw the benefit of inflation first hand 10 years ago. They moved to Florida in the late 70s, and bought a house for around $80,000. Compared to the $40,000 their old house in Ohio was worth, the amount was absolutely staggering, and they felt like they could barely afford it since they were only making slightly more in Florida than they earned in Ohio. Fast forward 15 years, when they were making 4 times as much per year (of which maybe 20-30% of the increase was due to career progression, and 70-80% due to 1980s inflation). They ended up paying off the house 5 or 6 years early, because at that point the mortgage payments were less than the electric bill.
Now fast forward to 2011. Their neighbors have $480,000 mortgages on the same houses that sold for $80k circa 1978 and were approaching sales prices of almost a million dollars in 2006, and are now averaging $360,000 today. Even if they can afford the payments, they'll never be able to sell them in a normal real estate transaction for the rest of their working lives, because it'll be at least 15-20 years before they've paid off enough debt to not be underwater on the mortgage and able to sell them normally. Among other things, this means they're effectively chained to their current job market, because relocating would mean having to simultaneously rent in the new location AND try to be an absentee landlord (which, in the current market, is almost always a losing proposition). Their neighbors are hardly unique -- it's the same situation just about everywhere else in America. The fact is, at this point nothing short of 5-10 years of fairly HIGH inflation is going to restore the traditional mobility of America's job markets. When you own a house that you can basically afford, but can't sell, the economics of relocating for a better job get blown to hell unless that new job comes with guarantees that don't exist anymore (like a hiring bonus big enough to cover the losses of having to move back if the company eliminates your position within 5 years).
(In case anybody's wondering, I'm not analogizing myself... my own house is worth slightly more than I owe, though it's mostly due to the home improvements I've made whose costs aren't factored into the mortgage itself).
Deflation is particularly deadly for things where there's a long supply chain or delay between investment and sale of finished merchandise, like auto manufacturing (parts are ordered months, sometimes years, before production begins... GM doesn't just go to amazon.com and order ten million of some part specific to one of next yea
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Well, ok, there WAS kind of a problem with small Shenzhen manufacturers... mainly, because Google would have had no effective recourse against them if it leaked out. Samsung, Motorola, Acer, Asus, Lenovo, and Toshiba are all big enough to sue the bejesus out of if Honeycomb ended up on lesser hardware and the leak could be traced to one of them. You can't say the same thing with respect to a small factory in Shenzhen.
In theory, Google could have possibly cut a deal whereby they didn't get the source, and only get a compiled distro from Google itself... but then that raises the question of chipset compatibility. If they didn't use a Tegra2, it would have been two strikes against them -- one, because it would have been a foreign build environment compared to every other Honeycomb tablet, and two, because if it were downward-compatible with cheaper tablets, it would have opened the door for that Honeycomb build to end up on lesser hardware anyway. I can almost guarantee that if someone from Shenzhen showed up in Mountain View asking to buy a build of Honeycomb for a high-end Rockchip-based tablet, Google's first question would have been, "How can you guarantee somebody won't be able to edit the compiled build to make it work (slowly) on a lesser Rockchip-based tablet?" In a sense, the Tegra2 was also an effective dongle that kept intact copies of Honeycomb from running on lesser tablets.
> The Democrats are doing it exactly right...and can't get anything passed.
Well, at the moment, the Republicans can't, either. You could cynically argue that the schizoid nature of Congress today demonstrates that, at this moment, there IS NO real consensus about what Americans want Congress to do, and allowing the worst elements of both parties to openly percolate to the surface in public view is healthier than a situation where either party can be actively harmful to the best interests of somewhere between 40 and 60 percent of voters' interests.
Here's the magic test -- if Congress' leaders, after grandstanding about having the support of most Americans, were able to irreversibly call for new elections to occur at some random, unpredictable date between 60 and 120 days from now (so they couldn't pick a moment of scandal and try to ride it to victory, and had to face the real risk of changing tides between now and then), how many of them would actually vote for it? Not one. A few firebrands who aren't very powerful, maybe... but leaders? None. As much as they bitch about gridlock, there's no way in *hell* the Republicans would risk letting a few more Democrats in (or, god forbid, a RINO or two), and no way the Democrats would risk giving the Republicans an unbeatable majority.
The fact is, Congress is gridlocked right now, and it's probably a good thing. Think about how much good the side you support could do if they were able to, then sober up and realize how much damage the other side could do if they had their chance. Where things are going to get REALLY interesting is when the 99%/Occupy crowd starts skimming off the disaffected casual supporters who were previously clinging to the Teaparty groups as the "not in power party" and start drifting over to the other side. It's already happening -- you can watch the Teaparty leadership get more strident and radical by the day, because the leftern end of the spectrum is walking away and ceasing to anchor them towards the middle. The same thing will eventually happen to the 99%/Occupy crowd... they'll have their surge of centrist support, then the middle crowd will start to get uncomfortable with its most vocal leaders' leftist politics, and drift away (leaving them to become more radical and ardent on the left). Stir, rinse, and repeat.
It's the story of American politics. The Democrats of the 70s and 80s were pretty hardcore on the left, as the middle drifted into the Republican camp. Now the middle has drifted back into the Democratic camp, pulled it back towards the center, and the Republican party has gone floating off into right-wing extremism like they did in the late 50s/early 60s. Rush celebrates the defection of RINOs, and the more leftward Democrats mourn the fact that it's now OK for Democrats to support Alaskan oil drilling.
It only works ONCE, because what you've just described is revolution, and revolution inevitably becomes tedious and annoying to pretty much everyone - including the revolutionaries themselves. Businesses larger than a sidewalk vendor can't cope with laws that change on a daily (or even a weekly) basis. It's terrible to say, but to a certain extent bad laws that are stable and can be worked around are generally preferable to volatile laws that constantly change in unpredictable ways.
The real key to reforming US politics is to reduce the power of parties to enforce discipline on their members, and reduce them to brand names that let voters know they're likely to be getting a certain bundle of beliefs, without the teeth to force them to support specific positions that go against the best interests of the specific people who elected them.
If you want to know when Congress really started to go down the shithole in recent years, look no further than the "one-vote win" policy that the Republican leadership in Congress began to aggressively follow sometime around the turn of the century -- the policy of suppressing debate, and crafting laws that compromised *just* enough to win by exactly one single vote, and nothing more.
I personally know at least one individual involved in the policy, and in retrospect even they've admitted (privately, years later) that it was misguided. It's something that might be tolerable in a crisis, but in the long run it actually works against the party in power because the disenfranchised 49% ends up being slightly different after every vote, and eventually you end up with a situation where the percentage of voters who regard themselves as "disenfranchised" starts to approach 60-70% (because people forget about the votes that were in favor of things they don't particularly care about, and vividly remember the votes of things they care about passionately). That's exactly what's happening today.
A good place to start the reform might be to look at how the internal power structure of the Senate differs from that of the House of Representatives. The Senate isn't perfect, but it does seem to be a tiny bit more resistant to blind partisan politics (statistically, a Senate Democrat and Republican from the same state are more likely to vote the same way than they are to vote with their party leadership). A good place to start might be allocating committee memberships and leadership via secret Condorcet balloting instead of having representatives elect one leader (almost inevitably and without exception, on party lines) who then proceeds to allocate memberships and leadership positions on equally rigid party lines (with occasional exceptions for "well-behaved" members of the other party). Maybe even throw a complete monkey wrench into the power process by picking a dozen representatives at random and giving them first choice at committee memberships, before anybody else is allowed to bid on them. You don't necessarily want to throw the process into complete upheaval, but rather ensure that at least one key position ends up statistically in the hands of someone would can use it to screw up the neat, orderly plans of the power establishment -- if only to enforce greater debate and compromise. I've come to believe that real debate in congress in a good, healthy thing, and attempts to suppress it by *either* party are bad.
I can almost guarantee that there are at least a half-dozen guys who won't be going to bed tonight just so they can post a semi-working bootable ICS distro for Xoom before dawn breaks over western Europe (and earn bragging rights over their peers with Transformers, A500s, Galaxy Tabs, and Thrives). A version you're likely to regard as stable will probably take a week or two. Moto's official build will probably get released to a yawn 3 months from now, long after everyone who passionately cares about ICS has already upgraded to it on their own.
Personally, I'm thrilled. I can't wait to rip into the code that handles the power button, and try overloading it to create a new double-click gesture that means "unlock the orientation, read the accelerometer, reorient the screen if appropriate, then lock the orientation again" so I'll never, ever have to choose between the frustration of having the screen rotate inappropriately while I'm laying in bed, and screwing with 30 seconds of active gesturing to try and switch it between landscape and portrait. :)
People look at me like I'm weird, but I still find myself wanting to pronounce it "bin-gee" ;-)
> What was that reason, that they didn't release Honeycomb?
That, and to temporarily give higher-end tablets with better hardware a fighting chance against the onslaught of underpowered K-mart-bound tablets from China with 10" 480x800 displays and 200MHz CPUs. Google wasn't terribly picky about whom they allowed to have access to Honeycomb, as long as your hardware met their minimum spec. It wasn't ideal, but it was the only way to give tablets like the Xoom, Transformer, and Galaxy Tab a fighting chance to break out of the 480x800 ghetto and give us hardware that wouldn't have iPad owners laughing at us.
> And all laws preventing anybody from setting up an ISP of any kind.
And what laws might those be? If anything, we need federal laws to force municipalities and deed-restricted communities to allow competition, instead of allowing them to sign away the rights of their residents in near-perpetuity. The fact is, housing is about as non-elastic of a market as you can get, and it's hard to guarantee your own rights to competitive broadband in perpetuity EVEN IF you do your homework and make it a point to check out before buying a house somewhere.
Hell, before I bought my house, I actually (over the realtor's vehement objections) made the offer contingent upon DSL availability. I did my homework, verified that the neighbor had DSL, and signed off on the contingency. Two weeks before moving in, I called AT&T to order DSL, and was informed that the DSLAM was at capacity, and I couldn't get service until somebody moved, died, or disconnected. Fuck. Damn. Crap. And several other key expletives.
Living in a neighborhood with a HOA (and, in South Florida, and most parts of the country, it's damn near impossible to buy into a neighborhood less than 50 years old that DOESN'T have one), there's the ever-present risk that some future board might cut a deal with someone like Comcast to eliminate physical access to competition. If it ever happened, short of going postal and doing very, very illegal and immoral things in retribution to punish them for screwing up my broadband, there's not much I could do because the house is (slightly) underwater and unsellable. The idea that someone can casually sell his house and move to take advantage of preferable free-market broadband opportunities elsewhere is a sick joke that fails miserably in real life.
Here's some food for Libertarian thought: the FCC's supposedly oppressive yoke of burdensome regulation is PRECISELY the reason why you can tell your city and/or homeowners association to fuck off and go to hell if they try to prohibit you from pointing an 18" dish at the sky and doing an end run around their local mischief. When a higher level of government tells a lower level that it's not allowed to limit your freedom, that's a GOOD thing worthy of celebration, regardless of whether or not it passes an ideological purity test.
Satellite has terrible latency that's about 50% due to the laws of physics, and 50% due to the horrible way Hughes implemented the physical layer protocol (ie, Hughes' equipment takes already-bad latency due to the 50,000-mile round trip and adds another 500-1500+ ms of latency on top).
The ideal protocol for rural broadband would be IDSL + satellite in parallel. Send everything both ways through both routes, and simply ignore (and terminate, if it would matter) the one that would finish second. So, you'd do your https handshaking via the IDSL link, send the page request via IDSL (short, no latency), receive the response via both (with the IDSL response probably finished faster since the html page is likely to be shorter than everything it references), then request the linked content via IDSL and receive it in parallel via satellite. Likewise, for email, you could handshake with the mail server via the IDSL link, have it send the header responses via IDSL, and send the bulk of the message and attachments via satellite. You'd be shoveling around lots of redundant data, and you'd need a more sophisticated router at the end user side with application-level gateway capabilities (to decide which chunk to use and which chunk to abort and/or throw away), but it would go a long way towards making satellite more usable. The nice thing about IDSL is that it can be made to work just about anyplace urban enough to have a paved road, landline phone service, and electricity. It's not really fast, but it has almost zero latency compared to satellite, so a transport protocol that used each independent stream to its best use would give you generally fast service capable of transparently bursting (with higher latency) as needed.
The problem is that the whole issue of net neutrality is misframed. We don't necessarily need or want "net" neutrality. What needs to be absolutely sacrosanct is LAST MILE NEUTRALITY. We should all have the absolute, inalienable right to have our network traffic handled with absolute neutrality between our endpoint device (router, phone, whatever) and the nearest peering point where access is available on open, equal, and neutral terms to all (ie, not "free", but if AT&T pays $N per month for a 1U rack slot and the right to run a single fiber to it, anybody else should be able to do exactly the same thing for exactly the same price.
To keep carriers able to blur the line between last-mile and "internet" service honest (say, a carrier like Verizon that bundles "free" internet access with 2gb cap with the cost of monthly wireless service, but charges 1c/meg wholesale costs to anybody who peers privately with them), VPN traffic should be the one exception that enjoys special protected status and by law can be neither favored nor throttled relative to traffic of the network's most favored provider. In other words, Verizon would be perfectly free to throttle Netflix in favor of Blockbuster, or Google in favor of Bing, but if they did, VPN traffic would have to be given exactly the same priority as their otherwise-favored Blockbuster and Bing traffic. This would empower consumers to do an end run around the carriers by purchasing VPN service from some thirdparty with traffic policies they happen to like better. In the long run it probably wouldn't matter much, but like legislatively-mandated equal access to landline phone networks, it would nevertheless create opportunities for niche (if expensive) services that otherwise wouldn't exist at all.
The truth is, hardcore last-mile neutrality isn't necessarily about lower prices for Joe Sixpack -- it's about enabling services for Slashdot users that otherwise wouldn't be available because they don't neatly align with the business plans of AT&T, Verizon, or Comcast. It's about being able to do an end run around them and enjoy services they aren't themselves necessarily interested in selling you, or allowing you to buy from others.
(example: if you're moderately wealthy, live in the middle of Georgia farm country or exurban Dallas "Horse Country" and want broadband, a company like Covad will happily twist AT&T's arm and force them -- at slightly exorbitant cost -- to provision wholesale dry copper between the nearest central office and your house and give you what you want, even if AT&T itself would tell you it simply can't be done and broadband isn't available in your neighborhood).
Honestly, we're going backwards insofar as searching goes. For god's fucking sake, almost 15 years ago, we could do things like proximity searches (only count matches if the words are within N words of each other) and brute-force exact matches of things that would otherwise be stopwords (you know, sequences of words that are individually meaningless and background noise, but refer to something interesting when taken as an exact literal string that has to match verbatim).
My first memory of Google was disbelief that it couldn't even handle a search for something like "AT&T" or "C++" without barfing up results that had nothing to do with either one.
One point to keep in mind: SMART has (so far) proven to be almost completely useless in the specific context of SSDs. Every single report I've read about SMART and SSD failure has said that it either didn't work at all, or barely had time to log its suspicious before the drive failed. That's actually the biggest single problem with SSDs... they don't necessarily fail more often than rotating platters, but when they fail, they fail with basically ZERO advance warning (unlike conventional drives, which -- assuming they weren't dropped -- tend to follow a predictable curve of escalating read errors.
Actually, the saddest part of all is that the overwhelming majority of mechanical failures are due to failure modes that wouldn't even be all that hard or expensive to REPAIR without substantial data loss if the manufacturers could be arsed to even offer it as a service, instead of walking away and leaving it up to hyper-expensive thirdparty data recovery firms who are forced to do the repair the most inefficient and expensive way possible, then mark it up by several orders of magnitude simply because they can (effectively pricing everyone BUT large enterprise customers out of data recovery altogether). I can't think of any other mechanical component widely used in both enterprise and consumer devices that's as simultaneously failure-prone, officially-irreparable, and has such enormous consequences arising from such failure. For the most part, manufacturers don't even TRY to design drives so they'll fail in a reparable (short of outright catastrophe) way. Or at least start failing in a very, very public and noticeable way, instead of trying to hide the problem and sweep it under the run until the drive finally dies for real and it's too late to cheaply do anything to save the data.
> Wow, how much do you have to pay for an Android developer licenses to do the same thing? $100. Shocking.
Try $0. Android owners don't have to play "Mother, May I?" with Apple and jump through hoops to run our own apps on our own phones. We can install our own .apk files anytime we feel like it. If you want to publish on Android Market, it's $25.
If cost is no object, fine. Go with the "enterprise" hardware. In duplicate or triplicate. But IMHO, if it comes down to choosing between a single certified "enterprise-class" hard drive, or a pair of Velociraptors in RAID1 (or better yet, a menage-a-trois doing RAID5), you'd have to be completely insane to sacrifice redundancy for minimally better odds of non-failure by an expensive single drive.
Yeah, the $70 drive from Newegg is 7200 RPM, 2+TB, and has 64mb cache. The $300 drive from HP is 5400rpm, 320mb, and comes with a piece of paper saying it's 'certified' compatible with the server, and they'll replace it free when it dies 7-18 months from now (same as the $70 drive's equally short lifespan). What a bargain.
Spending more for SLC vs MLC? sure. Ditto, for the network gear. But don't kid yourself... "enterprise" drives are no less failure-prone than their Best Buy Brethren. Nowadays, they're *all* crap. :-(
Count your blessings. At least spaces in directory and file names are (still) culturally taboo in LinuxLand. ${deity} help us all when Ubuntu changes names to "/user files/local files/et-cetera/my configurations/my apache configuration" in a moment of complete insanity...
> Trying to understand all those folders It hurts the widdle windows users' heads
> since they don't understand why they can't just keep throwing everything in C:\
(dryly) I see you've never visited \winnt\system, \winnt\system32, and the half-dozen or so directories with parenthesized "x86", "64", and/or "wow" that stupidly perverted the entire win64 file hierarchy. Sigh. We finally got symlinks & real directories for \users and \programs, then Microsoft realized its "error" and fucked them all up even worse than before. Sigh. :-(
Florida does the same thing. I can't tell you how many roads I've seen go from being a narrow 2-lane road without shoulders, flanked by deep ditches, and 45mph speed limit, to a brand new 4 (sometimes 6!) lane road with curbs, sidewalks, wide corner radii, dedicated left turn lanes, and (@*#$&( 35mph speed limit.
> I'm surprised that fuel consumption, being a big national issue, hasn't gained traction with the speed limit people
Air conditioning. The longer you're in the car, the longer it's running on max. If your trip takes 10 minutes instead of 14, you've eliminated 4 minutes of A/C runtime. Any fuel you save by driving more slowly is going to get burned away by the air conditioner in the meantime.
The problem is, it only really works when you're talking about 4-lane roads. The moment you start talking about 8-12 lane roads with left exits (like I-95 in Miami), the neat, orderly plan just kind of disintegrates and falls apart.
That's not quite true. Chinese companies over the past 10 years have been carving out a new market category for themselves -- things that are dirt cheap due to sheer unfathomable economy of scale and large-scale ASIC design. When your domestic economy *alone* has more than a billion consumers who, due to language, aren't terribly thrilled by foreign (ie, English-oriented) alternatives to begin with, you can hardly help but become very good at cranking out millions of products. Look at phones. Companies like Huawei have more real customers within 500 miles than Motorola and Nokia would have if they owned 100% of their respective (American & European) markets in their entirety.
Yes, Chinese companies copy. So did Japanese companies. So did American companies, for that matter (back in the 1800s, European nations were perpetually up in arms about cheaply copied goods from America flooding their markets). The point is, if you focus on the copying too much, you're likely to miss the REAL long-term threat presented by Chinese companies to America and Europe -- their unbelievable potential for vertical integration and unbelievable economy of scale that will keep them competitive LONG after workers in Chongqing are making wages comparable to workers in Tennessee.
You can stop reading, but it doesn't change the fact that we HAVE an economy because people are forced to invest instead of passively sit on money in a vault. Take away inflation, and you're left with de-facto feudalism where wealth is more or less eternal and static.
> If someone works hard and saves up to buy something large, like a house, your policy effectively steals a portion of that savings from them.
You'll have to pick a better example, at least with specific regard to "house you buy as your personal residence". Within comparable markets (obviously, someone selling a house in Detroit with the expectation of buying a comparable replacement in Los Angeles is in for a bit of a disappointment), you can sell your house and buy a comparable one with elsewhere. Now, you might not come out as well if you bought a house purely as investment property, but realistically, for about 98% of Americans (slightly distorted by flipping 5 years ago), "buying a house" is synonymous with "buying a house to live in as your one and only residence."
The fact is, if you're even remotely close to a typical middle-class American, your savings are a complete fiction anyway. They're a temporary insurance policy against a cash-flow disruption so you can keep making minimum payments and avoid losing *everything* in the meantime. Remember, in the context of inflation, 'savings' is almost entirely a synonym for "cash under the mattress", and NOT "investments", because investments (including invested retirement funds) generally inflate along with everything else.
So, if we're going to get personal, yes, fuck anybody who thinks it's worth destroying the economy so they can store cash in a mattress and expect it to magically retain (or gain) value. They're such a wacky, obscure, extremely rare edge case in the grand scheme of things, they aren't even a blip within the margin of error.
The world also obviously survived after Rome ceased to be relevant. That doesn't mean life was particularly pleasant in the former empire for the next few hundred years.
Look at Russia. Obviously, Russia took a huge hit to its pride when the Soviet Union broke up. It took a financial hit, too. Nevertheless, ~20 years later, Russia itself isn't doing too badly. It's the OTHER parts of the former Soviet Union, and its former allies in Eastern Europe, who took most of the hit.
As fashionable as it is to diss and hate the US, if the US decided tomorrow that it didn't care what happened more than a hundred miles offshore, took its toys & money, and "went home", the economies of just about everyone on earth would be left in smoldering ruins as surely as if we'd thrown nuclear bombs at them on the way out. The US would clearly take a hit, too... but for the most part, life would go on in as it always has. Some parts of the US might even see a net boost (especially godforsaken places like North Dakota, thanks to oil shale that would suddenly become imperative). Overall, though, the US would end up a little worse off, and just about everyone else would end up *profoundly* worse off. Would it be eternal? Of course not. Nothing ever is. But as far as anyone alive today, or anyone likely to be alive before the last person alive today is dead, is concered... yes, life would be worse. When it comes to empires and economies, "Long Term" really does mean "long term". Rome was pretty decisively "fallen" by around 1200AD, and the renaissance didn't begin for a good 200-400 years after that.
At the end of the day, if you have to make any general rule, it's that people shouldn't be allowed to openly engage in long-term speculative financing. If you look at every major bubble we've had since the Great Depression, most of them went through their explosive-growth period when people with no real understanding of the risk involved started to do the equivalent of getting a bank to finance a bucket of tokens for a trip to Las Vegas -- with the enthusiastic cooperation of the banks involved, because they knew that 99.9% would get paid back, and they were making plenty of fee and service-charge revenue in the meantime -- but failed to recognize that their losses were self-limiting up to a point, because there were more people heading to Vegas with buckets of tokens than actual casino capacity, and two dozen mega-casinos under construction with the ability to drain every last one of them of their tokens within a matter of weeks once they finally opened before going broke themselves because the supply of gamblers dried up.
One problem was that during the real estate boom, lending standards generally didn't distinguish between loans to buy a house for YOU to live in, vs loans to buy a house for investment purposes. Without getting into moral issues about encouraging home ownership, there's a more practical reason to consider it: one way or another, you need a place to live. Regardless of what happens to your home's market value, if you can afford the mortgage payments, you're likely to keep making them on the house you live in, because the alternative would be to pay rent instead.
Here's approximately what happened in Florida:
Speculative Builder gets Indifferent Bank to tentatively approve the construction loan for Egregiously Overpriced Condo In Mediocre Location with Tiny Units and Inadequate Parking. Indifferent Bank requires pre-construction sale of 80% of the units with 5% down, and pre-approval of purchasers for a Liars Loan Mortgage.
Joe Flipper shows up on Pre-Sale Day with $10,000 cash-advanced from his credit card. It doesn't really matter what he says his income is, because Predatory Mortgage Company (a division of Indifferent Bank) doesn't really care. It pretends to run a credit check, and pretends to not notice that he's maxed out one or more credit cards to get the down payment. Nobody asks whether he intends to live there, and the loan application gets rubber-stamped.
Speculative Builder builds a 17-story condo with 650sf 1-bedroom units and the minimum parking the zoning department will let him get away with, and throws it down on a street surrounded by single-family homes and 7 other similarly out-of-context speculatively-built condos.
Joe Flipper closes on the unit. At this point Predatory Mortgage Company knows his credit is shit, but they don't care because they're going to collect their fees and sell off the mortgage to Toxic Securities, Inc (another division of Indifferent Bank).
Joe Flipper puts his unit on the market, and so do the buyers of the other 140 units. He lists it for double what he paid, and goes for 2 months without a phone call. He looks up the listings for other units in the building, and sees that the original developer is dumping its own inventory for 80% of what HE paid. Oh... shit. He fights with his wife Jane, and grudgingly drops the price down to what he paid minus the $10,000 he paid as a down payment. Nobody calls, because he's still charging $25k more than the developer.
At this point, Joe's savings are getting wiped out. He's paying almost $3,000/month in mortgage, taxes, insurance, and condo fees for a unit nobody is living in, on top of his credit card payments and his own mortgage. He puts out an ad for a tenant, and joins the owners of the other units. The problem is, it's a tiny 1 bedroom condo in semi-suburbia surrounded by much, much larger townhomes and single-family homes, so all he can get for it is $1,200/month from some guy from Latin America who refuses to sign a long-term lease (because he's going to use i
> If they are too low, people will put their money elsewhere, looking for a better return. The problem is, that turns into bubbles.
Exactly. When "safe" investments like T-bills have interest rates that barely cover the handling costs of people institutional investors would have to hire to handle and keep track of them, they start looking for other "safe" things to indiscriminately dump money into -- things like oil, natural gas, and food commodities. Ethanol market distortions and increased fuel purchases by China have certainly made things worse, but a big chunk of the reason why we currently have soaring food prices is because institutional investors are dumping enormous amounts of money into futures for basic commodities, and driving up THEIR prices in a wave of speculative frenzy that's likely to end badly for everyone (both investors AND consumers) as well.
As an economy, the US would be far better off to start financing nationwide freeway improvements and high-speed rail in places where it could build a viable market (Northeast, Florida, Chicago region, DFW-Austin-Houston, Pacific Coast), financed by bonds with interest rates high enough to take some of the speculative pressure off of commodities. Even if it did nothing but shift the costs from food to infrasture, at least we'd HAVE something useful to look at 10-15 years from now instead of higher prices paid for surplus food that ends up getting destroyed anyway. If we're going to burn money, we might as well burn it on something that won't spoil and be wasted 18 months from now. Right now, both construction and real estate markets are in the shithole, which makes it the perfect time to buy up land for transportation corridors and build roads & rail at fire-sale prices.
> You don't have to put your money at risk because you can just save it in a vault and it won't lose value.
That's *precisely* why small amounts of inflation are a good thing -- it forces wealthy individuals to put their money to work and actively invest it in productive endeavors to avoid having it slowly lose value over time. As fashionable as it might be to cry over poor, frugal individuals whose meager thousand dollar savings are now worth $900, the truth is that 99.9% of Americans have no real savings to speak of. If you have $10,000 "saved" and owe $300,000 on your mortgage & student loans with 20-30+ year payback horizons, your $10,000 aren't "savings" -- they're "short-term cash flow insurance" to keep your credit rating from getting destroyed if you end up unemployed for 6 months.
The truth is, the middle 70% of Americans (those falling between the lowest ~29% and top 1%) would overwhelmingly benefit from inflation, because the majority of their "savings" are negative in the form of long-term debt with fixed interest rates. A few years of relatively HIGH inflation would have the net effect of washing away most of that long-term debt into irrelevance relative to their new, higher & inflated annual salaries. A thousand dollars per month in debt payments are painful when you make $50,000/year. The same thousand dollars in debt payments are almost a nuisance if your income increases to $250,000/year.
My parents aren't wealthy, but I saw the benefit of inflation first hand 10 years ago. They moved to Florida in the late 70s, and bought a house for around $80,000. Compared to the $40,000 their old house in Ohio was worth, the amount was absolutely staggering, and they felt like they could barely afford it since they were only making slightly more in Florida than they earned in Ohio. Fast forward 15 years, when they were making 4 times as much per year (of which maybe 20-30% of the increase was due to career progression, and 70-80% due to 1980s inflation). They ended up paying off the house 5 or 6 years early, because at that point the mortgage payments were less than the electric bill.
Now fast forward to 2011. Their neighbors have $480,000 mortgages on the same houses that sold for $80k circa 1978 and were approaching sales prices of almost a million dollars in 2006, and are now averaging $360,000 today. Even if they can afford the payments, they'll never be able to sell them in a normal real estate transaction for the rest of their working lives, because it'll be at least 15-20 years before they've paid off enough debt to not be underwater on the mortgage and able to sell them normally. Among other things, this means they're effectively chained to their current job market, because relocating would mean having to simultaneously rent in the new location AND try to be an absentee landlord (which, in the current market, is almost always a losing proposition). Their neighbors are hardly unique -- it's the same situation just about everywhere else in America. The fact is, at this point nothing short of 5-10 years of fairly HIGH inflation is going to restore the traditional mobility of America's job markets. When you own a house that you can basically afford, but can't sell, the economics of relocating for a better job get blown to hell unless that new job comes with guarantees that don't exist anymore (like a hiring bonus big enough to cover the losses of having to move back if the company eliminates your position within 5 years).
(In case anybody's wondering, I'm not analogizing myself... my own house is worth slightly more than I owe, though it's mostly due to the home improvements I've made whose costs aren't factored into the mortgage itself).
Deflation is particularly deadly for things where there's a long supply chain or delay between investment and sale of finished merchandise, like auto manufacturing (parts are ordered months, sometimes years, before production begins... GM doesn't just go to amazon.com and order ten million of some part specific to one of next yea