A Few Thoughts on Web Surfing

The first usage of the term “surfing the Internet” was around 1992, and as one who was surfing around that time I can tell you that the idea that you could surf from page to page with interesting content was a great idea, but in practice rarely happened. Instead, it was more like constant clicking on hyperlinks trying to find anything worth reading. In surfing parlance I guess you could say the Internet was just a bunch of close outs. Wikipedia was a step toward the surfing vision, where at least the content was reasonably good and the hyperlinks had a good chance of being interesting, but I was still in search of the perfect wave.

The wave has arrived, and it’s called Business Insider. The headlines and format are perfectly designed to grab your attention and break down the article content into a specified number of points (“25 hidden gem real estate markets”, “the highest paid player on all 32 teams”), with a picture for each point. Then, at the end of the article, a link to another article, with another catchy headline, that you’re almost guaranteed to like (because they use all the page view data to figure out interest graphs of other people like you). In find myself clicking, and reading, and clicking, and reading and it just seems like the interesting content never ends. Business Insider is the Banzai Pipeline, with a tube that covers you up completely and never breaks.

It took about 20 years, but the Internet surfing dream has finally been realized.

Delta (Effectively) Eliminates Roll-Over Miles

As part of my campaign travels I regularly fly on Delta Airlines, and have achieved “Medallion” status in the past. A few years ago they implemented “roll over miles” which would allow you to roll over the excess miles (over a given Medallion level) towards the next year’s status. Today they rolled out a new policy called “Medallion Qualification Dollars” (MQDs) that require you to not only meet a mileage threshold but a dollar expenditure threshold to achieve elite status. Of course the MQDs cannot be rolled over, and are calculated such that they are effectively eliminating the effect of roll over miles while simultaneously eliminating frequent fliers who travel on the lowest fares. Talk about killing two birds with one stone! While this probably means yours truly will spend even more time sitting in coach, from an economic perspective it makes sense to just move the whole program onto a dollar spent basis. However that will probably not sit well with the masses who make a hobby out of frequent flier mileage arbitrage.

Cost of Climate Change

From http://www.cnbc.com/id/100912062:

The rapidly melting Arctic is an “economic time bomb” likely to cost the world at least $60 trillion, say researchers who have started to calculate the financial consequences of one of the world’s fastest changing climates.

I’m on record with my position on Climate Change which is, essentially, that there is no policy fix for this. But I couldn’t help but notice the fear mongering in this article reminding me of the demands of a certain Doctor…


On Privacy, and Control of Disclosure


The problem isn’t so much that we haven’t set up a legal architecture to preserve our online privacy from the government; it’s that we haven’t set up a legal architecture to preserve our online privacy from anyone at all. If we don’t have laws and regulations that create meaningful zones of online privacy from corporations, the attempt to create online privacy from the government will be an absurdity.

I think that creating a narrative of “privacy” is confusing the issue. Privacy sounds like some abstract concept about remaining anonymous or something. The issue is not the disclosure of information but the control of the disclosure of information. When you tell your friend that you have diabetes, then some personal information about you has been disclosed. Has your privacy decreased? Well, yes, absolutely. But we are not trying to protect privacy only the control of the disclosure of information. So, when you send an email via Gmail or make a purchase at Target with your credit card, you are clearly sharing information with another individual or group of individuals. Your “privacy” was clearly diminished. But you had control over that. Even if Google tells you that they will mine that data and sell it to third-party advertisers, you chose to share that information with them. So, the question is not whether or not individuals should have privacy, but whether or not they should be forced to disclose information about themselves to parties that they choose not to. Should an individual be forced to disclose information to a party, like the NSA, unwillingly? Well, control of the disclosure of information is valuable property. Should that property be forcibly taken from an individual?

How valuable is this property? Well, it is worth billions of dollars. Consider just this example. The NSA program collects information on credit card transactions:


But people familiar with the NSA’s operations said the initiative also encompasses…purchase information from credit-card providers.

Now consider how much money Google is spending to try and collect this same information:


The company has dedicated hundreds of developers to Wallet and spent about $300 million to acquire digital payment startups to help develop the app.

For Google, the goal wasn’t to generate fee revenue from the transactions, as banks, PayPal (EBAY), and other companies do. The idea was to collect data on consumer habits and target ads to them. Google pays such high fees to the credit-card companies it works with, though, that it loses money on every transaction

Bedier, a former PayPal executive who joined Google in 2011, says the streamlining is a big shift and that he was encouraged to spend freely to develop Google Wallet.

Jason Gardner, the CEO of loyalty-card startup Marqeta, says brick-and-mortar payment information is too lucrative a possibility for Google to ignore. “The amount of data at the point of sale is so significant that they’re not going to throw in the towel,” he says.

So, Google is willing to spend hundreds of millions of dollars to entice people to disclose credit card purchase information. I would say that that property is pretty valuable. Politicians, appreciating value like everyone else, naturally want acquire this value.  Will we protect it? It doesn’t look like it.


You should not think that recent events will simply cement a previous status quo in place, rather it moves us down a very particular path and probably makes the entire problem worse.

This whole post was basically a complicated way of saying, “Unprotected property is lost.”

Suppose a homeowner witnesses a burglar sneaking out of his house holding his toaster. After some contemplation, he chooses not to put a lock on his front door. A few days later he is outraged to find his laptop stolen. What happened? The homeowner either:

  1. Thought that burglar was only interested in low-value items.
  2. Didn’t think that burglar knew that there were other valuable items in the house.
  3. Didn’t think that the burglar knew the value of the other items in his house like his laptop.
  4. Thought that the burglar was satiated with capturing only a little value.
  5. Didn’t value his laptop.
  6. Thought protecting his valuables was not worth the hassle of having to unlock his house when he got home.

We seem to not be attempting to put a lock on the tremendous value that we have in controlling the disclosure of information that we possess. For which of the above reasons?

Just Give the People Their Money

It seems like just about every day I read an article about Apple’s cash hoard and what they should do with it. Yesterday they announced that they would be executing a stock buyback, or, put another way, require that just about everyone buy some AAPL stock at $400 or so. Seriously – when one considers mutual funds owning Apple stock, I would bet that just about everyone in the U.S. who owns any kind of company equity owns some.


And how have the results been with Apple’s existing stock buyback?

Apple’s existing buyback program was launched October 1st of last year. Since then, the company has spent $1.95B buying shares at an average cost of $478. The stock has fallen more than 40% since the buyback went live and shares purchased have lost 15% of their value.

Wouldn’t it be nice if Apple would just give us our money in dividends, instead of “investing” it for us in Apple stock? I understand there are tax implications, etc, etc but when we buy Apple stock we fundamentally want the company to produce earnings for us. We shouldn’t be forced to re-invest those earnings in the company.

A New Long-Term Unemployed Entitlement?

The Atlantic published an article about the problem of long-term unemployed. Apparently there is something magical about being 6 months unemployed such that a person becomes almost unemployable from that point on.


The author concludes with a policy prescription:

It’s time for the government to start hiring the long-term unemployed. Or, at the least, start giving employers tax incentives to hire the long-term unemployed. The worst possible outcome for all of us is if the long-term unemployed become unemployable. That would permanently reduce our productive capacity.

The government should start hiring the long-term unemployed – I’m trying to figure out if that is a serious proposal? The author leaves the implementation details up to the reader to imagine, so let’s imagine them:

What work will they do? Will these be fulfilling jobs? If not, why not? If so, who in the world would ever take an unfulfilling job in the private sector if all you have to do is wait 6 months and become entitled to a fulfilling job working for the government?

How long will the job last? Will it be short term or long term? If short term, it’s hard to see how that is going to “trick” private sector employers into looking at the participants’ resume again. Hiring manager thought process: “I see you were unemployed for 6 months, then employed by the government for 6 months, and now you’re unemployed again. Remind me: why am I more likely to hire you now?” If long term then how will we ever afford this, and why would anyone, once hired, ever look for work in the private sector or anywhere else?

How will the participants be selected? I can envision a couple of options:

1) Everyone gets hired – so this is a true, new entitlement. Anyone and everyone who is unemployed for more than 6 months gets hired by the government.

2) Political process – people unemployed greater than 6 months get hired according to who has a friend or family member working for the “Department of Long-Term Unemployed”. Although, if you had a friend working for such a department wouldn’t you have an in for one of our existing government jobs?

3) Merit-based process – the government will review the resumes and hire only the best and brightest of the long-term unemployed. Because I’m sure the government is better at picking out those diamonds in the rough than 6 months worth of private sector resume reviewers.

4) Lottery – random draw for government jobs! Woo hoo!

Note that (2), (3), and (4) don’t solve the problem which this program was initially designed to solve, which is “the long-term unemployed become unemployable [and] permanently reduce our productive capacity” – it just reduces the number by a few.

How will these new employees be organized? Will we set up a new organization in the government, with some hired as managers, and others worker bees? Will we hire one executive long term unemployed per one hundred worker bees? Or are we going to just randomly plug these people into existing government organizations? If there were a match with their skills to the mission of the organization they probably would have already been hired. The point was that we are hiring them as an entitlement so it doesn’t matter what their skills are at all.

I’m not questioning that employers discriminate against long-term unemployed, and agree that it is a problem for the macro economy, and especially for the individuals who cannot find work. However, starting a government program to hire the long-term unemployed is a not a solution.