Our Economic Entropy

While it's certainly true that we're in an economic downturn, I question whether the conditions before last summer were really all that great either.

Yes, the housing industry and other sectors were (or seemed to be) booming, and doubtless many did well as a result.

However, recently I was discussing the economy with a friend, and I mentioned the pervasive tendency to cut costs by cutting services, and I got to thinking: why is that? Why is it that cutting costs has become the primary management strategy, rather than increasing value? Airlines offer less and less, including smaller seats, fewer meals, more expensive meals, or no meals. Food and other product packaging gets smaller, while the price continues to rise. Services are outsourced to third parties who may not have the same commitment to quality as the parent company. Fees go up. I don't know about you, but I can't remember the last time a "cost of living" increase actually matched inflation.

As I look back, I remember this happening for more than a decade; way before 9/11, which was the first major economic downturn of the millennium.

A permanent state of cost-cutting is not the hallmark of a healthy economy, it is economic entropy. Cost cutting as a means of surviving a temporary downturn is one thing, but it seems like it has become the norm and the primary means of maintaining profitability. It should be a temporary, emergency survival tactic, or one of several techniques, not a permanent overriding policy.

This is often ascribed to intense competition, but cost-cutting is only one way to compete. The fact of the matter is, many businesses seem unable to increase the value of products offered. Instead of providing more value to customers, many businesses are struggling to maintain existing levels of service. It is an exception when a business provides additional value for the same price. This seems to happen a lot in technology, where advances enable quantum jumps in the level of product or service provided.

The causes of this have been discussed at length among Objectivists and other advocates of capitalism, but fundamentally it is because the "free market" is not really free, and success is not our society's goal.

The economy is laboring under an ever-growing yoke of prohibitions and burdens that aim to destroy value and enshrine failure. The recent overextension of credit (to those who can't really afford homes, for example) and the bailouts (rewarding failure) are obvious examples, but things like taxation, minimum wage, antitrust, etc. all have the same effect: they all punish success and make it more difficult for successful businesses and successful people to flourish. And quite logically, failure is what we are getting.

When Raccoons Attack Part 2

In an apparent follow-up to the October nocturnal assault, I was under attack again tonight, this time from the balcony. I heard odd scraping sounds, and I had a pretty good idea why. Sure enough; when I investigated, I found wood siding was removed and the fireplace vent was torn off. And above me on the roof, I caught sight of the guilty raccoon staring down at me.

As I said last time, I'm on the third floor of an apartment complex! Ninja raccoons!

I went back into the house, found a couple of big rubber bands and some paper, which I rolled up and bent into a "V" shape. I used it like a slingshot to ding the raccoon on the head. I don't think it quite expected that (!), and it turned tail and scrambled up and out of sight. I walked around the building looking for it, and spotted it on the roof, peering down the sheer side of the building where there are no balconies, trying to make its escape. Ha! Sucker!

Hey, I love marauding mammals on my rooftop as much as the next guy, but next time, I'm going to have the pepper spray ready. I guarantee that will be its last visit to mtnrunner2's place!

Denver .NET Dev Jobs?

If any reader has a lead on a senior .NET developer position in the Denver area, I'd be interested to know about it, since I am beginning a job search. I'll be checking job postings and contacting recruiters, but it's good to pursue every possible avenue, including word-of-mouth.

I can provide excellent refs from my former bosses and principal project manager, as my job ended due to a planned phase-out of our .NET group within a larger Java-based department, and I left on very good terms.

My email is: jeffmontdev at hotmail dot com. Thanks!

My Apple XP Laptop

Here's a shot of my new laptop, a replacement for my Dell desktop PC, which was getting a bit long in the tooth. This is a stock Apple MacBook Pro 15" (2.4 GHz Intel Core 2 Duo), happily running XP Professional SP3, using Apple's Boot Camp. I'm a professional Windows programmer, but I've wanted a Mac for a while, and this way I can have both in one package. So far so good; aside from a couple of minor driver issues, I don't even notice the difference; I simply choose which OS to boot into. Performance is excellent. And worst case scenario is, if it doesn't work out, I have a nice new Mac laptop :)

After a couple of weeks on the new system I'll do a write-up on my experiences. While researching how to do the install and setup of Windows, I found the existing info to be a bit sketchy and scattered, and not necessarily applicable to the current MacBook Pro and currently available software.

The Needles From Durango Mountain

The view from Durango Mountain ski resort of the West Needles Mountains is one of the nicest I've seen from a Colorado ski area, and I couldn't stop taking pictures. Photos only convey a slight suggestion of the real-life sensation of these mountains rising up in a vertical wall across the valley. The jagged and more remote main Needles group is visible on the right.

Obama's Recovery Plan

A quick note on Obama's recovery plan, as stated in a radio address. It's mostly bad, with a sprinkle of good.

1. Double renewable energy production and make public buildings more energy efficient.

I am not aware of barriers to market entry imposed by government the area of renewable energy, which are somehow preventing a massive demand for renewable energy from being satisfied (if there are any, I'd like to hear about them). Therefore, the notion of increasing renewable energy production inevitably means the government plans to introduce market distortions to encourage said increase. This means ignoring existing opinion and forcing new opinion. In other words, the creative minds of industry and those who have investment capital have not deemed it necessary to bring about the state of things that Obama envisions. In all likelihood it is regarded as unprofitable. Obama wishes to ignore the opinions of such professional investors and energy producers, and use the force of law to bring it about anyway. That is categorically wrong, both morally and economically. The government does not have the moral right to determine on which economic ventures money is spent. It is the right of those who own the money to do so. Economically, such an approach inevitably ignores existing demand and produces unprofitable ventures, further destroying value in our economy; the exact opposite of what we need to recover.

Any public buildings we do need should be energy efficient, so I'm in support of that, in principle.

2. Rebuild crumbling roads, bridges and schools.

All of these things are necessary, but they are not the reasons for our economic problems. And ultimately every one of these things should be handled privately, not by government.

3. Computerize the health care system.

This has the same problem as #1. If it has not already happened through private means, the government should not divert resources towards doing it. And if Obama is referring to government computer systems, well, the government should not be in health care to begin with, so whatever system he is referring to should not exist.

4. Modernize classrooms, labs and libraries.

Same problem as #2.

5. Provide tax breaks to American workers.

This is a good idea, but workers are not the ones who have the capital to make real change in the economy. It is the wealthy, those perpetual whipping boys of people like Obama, who despise individual gain. It is only the wealthy who are in a position to drive innovation in the economy, yet they are constantly under moral and economic attack. It is the wealthy who should be getting tax breaks, especially the largest corporations. The larger the better.

This alleged recovery plan is nothing more than a wrong-headed expansion in government control and spending. To me, is seems like he is laying the plan for government health care with #3, and the other items are either minimal or destructive. Not a very good start. It will accomplish nothing but market confusion, unfulfilled demand, and further stagnation. It will delay the economic recovery.

A real recovery plan would facilitate the absorption of failed businesses by solvent ones, something government is loath to do. An increasing number of businesses are tagged as being "too big to fail". Actually, the opposite is true: the bigger the business, the more important that it be allowed to fail. Leaving bad businesses in operation, tying up capital that could be better used elsewhere, is a terrible idea. A real recovery plan would help the housing market by getting homes sold, perhaps by offering a tax break for home purchases, or by removing any market barriers to trade that may be bogging down that market. One such barrier is our government's hemming and hawing on bailouts; it should state clearly that it will no longer intervene to bail out businesses, ever. That's the kind of confidence the markets need.

Up For Air

Phew! The past 2 months have been some of the busiest of my career, and it's finally over. I've had energy for work, and recovering from work, and that's about it. My current job has also ended, so I plan to take a break and enjoy some time off, before a beginning a job hunt in the worst economy in decades (courtesy of the altruistic affordable housing movement and advocates of loose Fed credit). Time to relax, and do some blogging again.