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How bad is the economy? My wife and I have been shopping for a vehicle this week, out of necessity. I didn't see another prospective buyer at the dealerships we visited. Not one. It was a hassle trying to test drive vehicles because the batteries were dead, and even the electronic keys didn't work because they hadn't been used for so long.

I think it will be years before many new homes are built in this country. Between the price uncertainty that will linger for years, and the ever-increasing regulatory hurdles, it's no longer rational for a builder to build. My wife and I started building our home before the economy cratered, so stopping the project wasn't an option. But the process has taken over four years to get approval, and even though we do expect to finish on budget (sort of), the market price of the home will be worth maybe half what it cost to build, assuming home values keep dropping. I can't recall seeing any other homes under construction anywhere in this area.

Restaurant business is down about 40% nationwide. That puts almost all of them underwater. No independent operator who has a lease will renew it when it comes up in the next three years or so, unless they can fund the operating losses from some other source. I expect about half of all the restaurants in California to close. When that happens, it will free up enough customers for the restaurants that stick it out.

I think we'll all survive. And we'll find ways to be happy. But I don't believe the economy will roar back in 2010 as the experts are fond of predicting. I think this is the new reality until some innovation comes along to drive another bubble.

One could argue that previous economic bubbles were driven by sex, directly or indirectly. Guys bought cars to attract girls. The VCR business thrived because of porn. So did the Internet. If you want to predict the next economic boom, figure out who is inventing technology that 19-year old boys will crave in order to increase their chances for sex.

Any ideas?
 
Mugs
Mar 2, 2009 | General Nonsense | Permalink
A reader sent this story. It helps explain why your economy is in shambles.

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A new group was formed at my work called the "Business Information Group" using the acronym BIG. The Information Technology department for this group added the initials IT to this acronym. Recently they had mugs ordered with the letters BIGIT. It was only after these mugs showed up on many desks that someone from another department asked "You guys are calling yourself bigots?"

They didn't return the mugs, but they do turn them around so the letters BIGIT are not facing outward.
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This reminded me of a story from childhood. In sixth grade one of the tough kids in the class decided to put on the back of his new leather jacket "Hell's Angels." But he spelled it "Hell's Angles." This misspelling was gleefully pointed out to him by the nerdier elements of the class (okay, me). Unfortnately for him, there was no way to correct it without ruining the jacket. And he couldn't afford a new leather jacket, so he lived with it. I guess he figured most people wouldn't notice. I like to think he was wrong about that.
 
Single people are free to take more economic risks than married people. It makes me wonder if there is a correlation between the average age of marriage in a particular area and its economy.

My hypothesis is that places where marriage happens early, by custom or religion, will also be the places with the slowest rate of development. In such places there might be fewer entrepreneurs and everyone would take fewer risks.

Exceptions would abound since economies are influenced by many factors, so if there is a correlation it would be on average and not apply to every region. And obviously the causation could work the other way too; a good economy provides the option of staying single longer.

On a similar theme, easy access to divorce, and a high divorce rate, might also contribute to entrepreneurial energy. And again this could work both ways because a risk-taking spouse is probably more likely to get a divorce.  

Name three vibrant entrepreneurial countries where people also marry young.

UPDATE: Reader Brant provides a link to statistics that support this hypothesis:

www.un.org/esa/population/publications/worldmarriage/worldmarriagepatterns2000.pdf

 

Every once in a while I get a check for some miscellaneous activity of life. It's usually a rebate or refund, or a friend paying up for some group activity I organized. And every time it makes me angry because I have to take that stupid check to the bank and deposit it. It feels so 1990s.

I am frankly amazed that checks still exist. And you know how happy you are when standing in line and the person in front of you whips out a check.

I will have limited time to blog for a few weeks, so today I'm just wondering what else you encounter in your daily life that seems like it should have gone the way of buggy whips ten years ago.

 
My wife and I are doing our part to stimulate the economy by building a house. The construction will take about a year, but the planning, design, and approval process took about three.

Financially, it's the worst timing in the world because buying an existing house is getting cheaper every day. But we wanted some specific things in a house that just weren't available, notably my studio.

Arguably, this process started back when I designed what was known as the Dilbert Ultimate House. That home only existed as a computer simulation that the user could "walk" through, and it included lots of features that had been suggested to me by readers. I thought you might be interested in some of the ideas that made it from the Dilbert Ultimate House into our own house design.

First, we're building the greenest home in the area, at least for its size. Obviously the greenest home would the tiniest house you could build. But my definition of green isn't about giving up what you want so much as finding the greenest way to do it. Some of the energy-saving features include:

- Solar panels

- Clay roof with lighter colors for best reflective properties

- Thermal barrier in roof

- Windows minimized and shaded on the hot West side

- Lots of thermal mass inside house

- Argon filled windows

- Chimney effect airflow (warmer air goes up and out)

- AC unit on the shady side of the house

- Efficient lighting

- Energy Star appliances

- Heat and AC ducts inside the house envelope


The list goes on. Our goal was to get our use of AC use down to a few days per summer. This design should get us there. (For comparison, my current office is in a townhouse that is only 5-years old and I have to run the AC full-blast for about 9 months a year.)

As far as the living spaces, we did some interesting things there too. We built a small cat's bathroom for the litter boxes.  And we have a Christmas tree storage closet just off the room where the tree will be displayed in December. Now I just need to talk my wife into using an artificial tree and we're all set.

We don't have a fancy foyer inside the house. That would be a waste to heat and cool. No one lives in a foyer. Instead we have a turret around the front door, so the initial visual appeal comes before you enter the conditioned part of the house.

We didn't want a formal dining room that only gets used twice a year. Our dining area will be relatively informal and just off the kitchen, serving as both the everyday table and where we entertain. I don't want any visitors who feel they are too fancy to eat where we eat.

My office will be in the house. I won't be driving to work every day and adding to the carbon overload.

The back yard will be artificial turf. Water is a big issue in California. The newer artificial grasses are impressive.

Those are a few of the features. Maybe someday you'll see the rest on Cribs.

 
The idea of keeping immigrants out of your country is starting to seem outdated. In many cases you need them more than they need you. Obviously you can't let people cross borders all willy-nilly, but the immigration policy in the United States seems a hodgepodge. I say this not because I have studied our immigration policy but because I wanted to use willy-nilly and hodgepodge in the same sentence.

A better immigration policy would be to make the U.S. as inviting as possible so everyone wants in. Then choose the most worthy applicants based on how much they would contribute to the economy, or how attractive they are. And obviously all applicants would have to pass a physical exam so they don't burden the healthcare system.

I know, I know, it smacks of eugenics. The Nazis gave it a bad name. But every corporation hires employees based on some sense of economic worthiness, or in some cases hotness. Why should a country settle for less. Technically we wouldn't be practicing eugenics if our selectivity was based on what a person can contribute today. Improving the gene pool would simply be a bonus. So get over it.

With this sort of immigration policy our competitive advantage would include anything that made living in the U.S. more enjoyable than living elsewhere. We would focus all of our energy on cleaning the environment and keeping crime low while giving people as much freedom as practical. And of course we would want a top school system and lots of entertainment options to keep our new immigrants happy. Everything we did to attract the cream of the immigrant crop would be good for the current residents. It's a win-win.

Canada is already doing something along these lines. They welcome immigrants who have valuable skills. The U.S. can't match Canada in friendliness, crime rates, personal freedom, or the environment. But no immigrant wants to walk around in a snow suit trying to understand French either. So I think we can be competitive with our buddies to the North.

Game on!
 
Did you hear about the racism controversy over this editorial comic in the NY Post?

http://www.cnn.com/2009/US/02/19/chimp.cartoon.react/index.html


The cartoonist fell into a trap I call a "remindsmeof." His comic was clearly about Congress, since President Obama didn't "write" the stimulus package. But the comic reminds the reader of racism and the risk of presidential assassination even though the cartoonist clearly wasn't addressing either topic. That was enough to get him into trouble.

In my early years of cartooning my editor rejected a few Dilbert comics because they were remindsmeofs. I thought it was overprotective and ridiculous. But I've since learned that you can't underestimate the public's ability to find offense where none is written. Now I recognize (usually) when I am about to blunder into a remindsmeof and I edit the comic myself. It saves time and trouble. When I offend, I prefer it to be intentional.

 
Democracy requires a healthy news media to keep it in check. A healthy news media requires money to pay its top reporters to go investigate stories. The Internet is sucking money away from TV news organizations and traditional newspapers and news magazines.

Unfortunately the free news distributed on the Internet doesn't make much revenue for any individual company. The ad-supported model is too weak, and growing weaker as the amount of content grows faster than the number of advertisers. So eventually there will be no funds to pay investigative reporters. The so-called "news" will be whatever information is cheapest to gather, such as lies from the people in charge. That will doom democracy. Obviously we're more than halfway there already.

Once democracy is completely broken, crazy dictators will find it easier to get nukes and then it's a slippery slope to total nuclear annihilation.

A recent cover story in Time suggested that the solution for creating a profitable news media, and thus saving the world (I added that part), was a generally accepted system for micropayments on the Internet, so news could be purchased as easily as music on iTunes. The technology part is doable, but in my opinion most of the public will prefer free news sources over paid news even if the quality is vastly different. So the Wall Street Journal, for example, could continue doing great reporting as a subscription service but too few regular citizens would read it to make a difference.

The other way things could go is that news media companies will merge until a few moguls control all of it. That would solve the profitability problem. But at that point it won't matter if the few moguls have the money to pay investigative reporters or not because the moguls will effectively control the world. The last thing they'll want is accurate reporting. With any luck the media moguls will back puppet leaders who are benevolent dictators. That's our best hope.
 
I'm learning to train my dog. According to the experts, it all comes down to food. Nothing works as well as food rewards when it comes to getting an animal to do a trick. I assume that's because food is closely associated with survival, so over time you can create an association in the animal's brain between doing a trick and survival itself.

This made me wonder if humans can be similarly trained with food rewards. And it made me wonder if we do it inadvertently all the time. It seems to me that human brains must associate food with survival the same way a dog does. And like most other animals, we don't need to be starving to want a food treat.

When I grew up, my family ate dinner at 5:00 pm every night. If a kid was late, there was some risk that the best stuff was gone. So there was a food reward every day of my life that was associated with punctuality. My hypothesis predicts that I would be a punctual person, and that is very much the case. When I feel even the possibility of being late for any event or deadline, I experience an intensely unpleasant physical reaction. It is as if my very survival is at risk and I want the feeling to stop. My brother and sister, who are in other ways very different from me, are just as punctual. Were we all trained by food?

I start work earlier than most people and always have. But I didn't always like it. I grew to enjoy it over time. I realized recently that I developed a habit long ago of eating something within minutes of waking, such as a banana. Did I train myself with food to become a morning person?

If my hypothesis about training humans holds true, it has huge implications. You could easily mold human behavior over time by associating good habits with food. And you wouldn't have to starve a person to make the plan work, any more than you need to starve a dog to make him do tricks for tasty treats. It's a bit frightening to think about the power this method might hold.

This hypothesis might explain why movie theaters are popular even though most movies are bad. I will drive across town and watch a movie with bad reviews if there is some popcorn in the deal, even though I have a home theater and all the food I want at home. I tell myself that some movies are better with the crowd experience, or that it feels good to get out of the house. But I can't rule out the possibility that I am simply trained by food treats to go to the movie theater.

Is there anything to the hypothesis that humans are easily trained by food? Let's do an unscientific survey right here. Think of your own eating habits and consider when there has been a consistent pattern of a specific activity followed by a food reward. Then ask yourself if you are addicted to the activity that generally preceded the reward.

For example, if you have a habit of reading a physical newspaper every morning, do you generally eat something or have coffee while doing it? If so, my hypothesis predicts that it's the treats that make you love the routine more than the newspaper itself.

Any other examples from your life?
 
The common notion about entertainment is that the better the quality, the bigger the audience. There's some truth to that. But what I find more interesting is that it works the other way too: You need popularity before you have the luxury of developing quality.

There are plenty of examples of popularity creating quality. The first season of The Simpsons, for example, was awful in terms of quality. The writing and animation were primitive. The voice actors hadn't found their groove yet. But because it was so different - an adult cartoon with an edge - it gained an immediate huge audience, mostly from curiosity and buzz. This audience allowed them to stay on the air, develop their show through practice, and hire highly talented writers. Within a few seasons The Simpsons became arguably one of the best TV shows ever aired.

The TV show Friends had a similar path. The first few episodes were awful in terms of writing and acting. But because the actors had charisma, and the concept of young, single friends was appealing, the ratings were immediately high and the cast and creators had time and money to develop it into a phenomenon. Quality followed popularity.

Dilbert was a bit like that too. The first few years of Dilbert were so poorly drawn and written it seems a miracle it found a home in any newspapers at all. But there was something different about it, and people saw just enough potential that I was given the luxury of years to learn how to draw (better) and learn how to write for my audience.

You can see this phenomenon work the other way too. Lately I've been watching on Hulu.com a cancelled TV series called Firefly. The show is part science fiction, part western, part action, part comedy. That makes it nearly impossible to explain, and evidently harder to market. When it originally aired on TV, I never saw a commercial for it or a mention of it. Yet in my opinion it was one of the best TV shows aired, and that was its first season right out of the gate. Quality wasn't enough to find a mass audience. It needed the curiosity factor, or some other appeal to get an audience.

Entertainment gets a chance to find an audience only if the concept is so simple it can be understood in a few words. Examples:


Friends: It's about some young, single friends


The Simpsons: cartoon about a dysfunctional family


Dilbert: Comic about a nerd and his dog


Garfield: About a cat


When you find an exception to the simplicity rule, it often proves the point. For example, Seinfeld was famously "about nothing." That should have been a recipe for failure, and indeed it had poor ratings for the first few dozen shows. I forget the details, but somehow it ran below the radar at the network because it was financed or produced in a different division than usual. That difference allowed it to stay on the air and develop quality, and an audience, while other shows with low ratings came and went.

So here is the key learning. If you are planning to create some business or other form of entertainment, you will need quality at some point to succeed. But what is more important than quality in the beginning is some intangible element that makes your project inherently interesting before anyone has even sampled it. That initial audience will give you the luxury of time to create quality.

I have a twofold test for whether something can obtain instant popularity and thus have time to achieve quality:


1. You must be able to describe it in a few words.


2. When people hear about it, they ask questions.


I saw this at work with my restaurant. We recently started what we call after hours dancing. (See how easily explained it is?) And as soon as we started talking about the idea, everyone had lots of questions. Was it live music or a DJ? What kind of music? What time does it end? Is there a cover charge? And so on. Rarely did anyone say, "That's nice. Good luck with it." Something about the idea makes people curious. And sure enough, it has been a solid success with no advertising, just word of mouth. And this immediate audience has allowed us to improve on it every week. Quality followed popularity.

 
 
 
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