Archive for the 'Economy' Category

What we’ve become

Published
by
cdeagle
on October 9, 2008
in Business, Economy and Life
. 2 Comments

“It isn’t like it used to be” I said, “You can’t just get an IT job because you have a ponytail and a Unix shirt.”

There was a bubble several years ago, fueled by the misapprehnsion that the internet was a magic portal to riches.  Companies created a visionary product that they would deliver over the internet, they pitched this idea to investors who knew it would make a killing, and invested heavily.  They put real money into an idea because they thought that the future of that idea was profitable.  Venture Capitalists, people who risked money for a living, did this.

During that era, we’ll call it the DotCom bubble, it was easy to be in IT.  In fact, for a period of time the mythos of the “IT Guru” rivaled that of the Lawyer or Doctor.  To say that we had ‘arrived’ would be an understatement.  I say “we” because this time was validation for a subculture which had been broadly and harshly denigrated up to that point, and with which I freely identify: the computer geeks.

It isn’t that we hadn’t been respected in our fields prior to the dotcom bubble, but the width and breadth of our desirability knew no bounds between 1998 and 2000.  We were rockstars.  No expectation was out of reach, no demand went unmet for the expert who knew everything and could get your idea on the internet.  Armed with a Dungeons and Dragon player guide, a witty and incomprehensible t-shirt, and a hairstyle nearly as surly as the affectations of it’s arborist, the Guru’s will was law.

But it wasn’t just the dedicated in our field who benefited during this time.  In conjunction with enrollments in nearly every collegiate Information Technology program increasing, anyone who knew how to turn on a computer was able to easily land a job as an “IT” guy.  

This situation was fueled more by ignorance than the Law of Supply and Demand.  It isn’t that there weren’t enough IT people to get the job done, but that no one knew exactly what kind of IT person they needed to do the job they wanted done.  Lacking clear direction, businesses hired the smartest person they could, allowed that person to set the agenda, and then hired several less competent (sometimes completely incompetent) people to shore up any possible holes in their infrastructure.  

And they should have known better.  Business ought not to allow any support personnel to set its agenda to the extent that IT people were allowed to call the shots during the Dotcom bubble.  That’s not why the bubble burst, but it is a lesson to be learned.  We exist to serve business, business does not exist to fuel interesting ideas, convoluted technologies, or hobbies that we couldn’t otherwise afford.  I digress.

The outrageous pay, the wide respect, and the perks lead even more people to declare themselves Computer Science majors.  Maybe we should have put up signs, but probably it wouldn’t have helped if the gateway to MIT and Rensselaer Poly-Tech said “Abandon all hope, ye who enter”.  The lure of promising, well paid positions in a new, exploding field was too much for some people.  They went, they got degrees, invariably they were given jobs that they either loved or hated, and either did well or failed at.  Because they came to the game late, because their motives were not “pure”, should they be dismissed?  That’s ridiculous.  And it is, again, beside the point.  The point is this: For a period of time, IT was the field to be in.  People flocked to it.

We know what happened next.  The dotcom bubble burst.  Suddenly, it wasn’t enough to have unfortunate hair and know how to work a computer, or say nonsensical things to your boss.  From 2000 to 2002 it was as if corporate America woke from a deep sleep, shook its head to clear its thoughts, and realized that it was being ridiculous.  Information Technology was standardized.  Expectations were laid down.  The attitude of entitlement was no longer accepted.  The technical workforce, no longer the golden child of industry, was forced to grow up and become professional.  

There are fewer of us now, because hundreds of thousands of people couldn’t cut it, or didn’t want to cut it.  Those who never really understood their jobs, or who felt that they were being treated appropriately during the ‘boom’, were the first to go.  Who was next and last are irrelevant, but who stayed matters.  The sharpest, the most reliable, those who integrated well with the business side of the shop, those who had a degree of professionalism, took their jobs seriously, and were committed to the work of Information Technology.  Oh, we still have our laughs.  Though we’ve gotten haircuts and wear ties, we haven’t changed all that much.  We still get more excited about technology than anyone should.  We still feel more alive in a humidity controlled room that’s 68 degrees fahrenheit, and too loud to converse comfortably in, than anywhere else.  And the ties carry the encrypted inside jokes that the t-shirts once did.

What’s the point?  After the dotcom bubble sorted itself out, there was another bubble, fueled by the misapprehension that home values would increase indefinitely, and that it was safe to buy a home of whatever price you could get a loan approved for.  During that era, it was easy to be a Realtor…

 

Hands-Free Cellphone law…Wow.

Published
by
cdeagle
on June 27, 2008
in Economy and Life
. 2 Comments

File this under “waste of taxpayer dollars” and/or “useless legislation.” Effective July 1st, 2008, California vehicle code prohibits the use of cell phones while operating a motor vehicle. There are several exceptions, but the only one that’s pertinent for most people is the “Unless you’re using a hands-free device” exception. The vehicle code reads as follows:

23123. (a) A person shall not drive a motor vehicle while using a wireless telephone unless that telephone is specifically designed and configured to allow hands-free listening and talking, and is used in that manner while driving.[1]

Why is this law stupid? There are so many reasons. All this law says is that if you’re talking on the phone while driving you must use a handsfree device (a headset, or on- or in-ear piece). The implication is that the act of holding up the phone, not the conversation itself, is what distracts drivers and causes them to be dangerous.

False, according to the University of South Carolina:

“We measured their attention level and found that subjects were four times more distracted while preparing to speak or speaking than when they were listening,” said Almor of the 47 people who participated in the experiment. “People can tune in or out as needed when listening.”[2]

And that makes sense. It’s not really distracting to hold your hand up to your face. It’s also pretty easy to listen to things without crashing. Talk radio has been around for a while, and hasn’t caused many major accidents, I’m sure. Here’s an easy test: Next time you’re driving, turn on your radio, then put your hand on your cheek. Continue to drive. Did you crash? Good.

While this law prohibits something that categorically is not dangerous, it also fails to prohibit things that are very obviously dangerous. What does it not prohibit?

  • Texting while driving
  • Checking your email while driving
  • Using a laptop while driving
  • Playing with your GPS unit while driving
  • Using a typewriter while driving
  • Kneading dough for a pizza crust while driving

    You get the idea. Any law that goes through the legislature costs California money. Pushing through stupid, ineffective laws that do nothing to improve quality of life or safeguard the community might be how the legislature stays busy in the slow season, but it shouldn’t be acceptable to those of us whom they work for.

    [1] Vehicle Code Section 23123
    [2] Talking Distractions: Study Shows Why Cell Phones and Driving Don’t Mix

    Economic Recession: ORLY?

    Published
    by
    cdeagle
    on April 16, 2008
    in Economy
    . 0 Comments

    I’m no economist.  I’m just a lowly consumer.  Because of that, I’m obviously not qualified to have an opinion about the current state of the economy.  However, I take issue with some of the things that the media is saying.

     

    1. Consumers are being hit hard at the pumps

    Sure, gas is up anywhere from 40 - 60 cents above what it was this time a year ago…Which, on a 10 gallon tank, is about an extra $6.  I think most people will agree with me: an extra $6 at fill-up every week and a half isn’t going to break my bank.  Seriously.

    2. Increased costs of Rice and Flour are greatly affecting shoppers at supermarkets.

    No?  I think I pretty much fit the description of the average consumer, and…I’m gonna go out on a shaky limb here and say that I’m not detecting an appreciable difference in the cost of groceries.  Certainly not enough to make me wince.  Certainly not.

    3. Because of the shaky economy, consumers are reluctant to spend.

    This seems to be largely based on three things.  The two points I’ve discussed above, and some sort of data that every media outlet but me has access to.  I haven’t seen any stastical data to back up the media consensus of a downturn in consumer spending.  Is there data like that?  Probably.  Will we ever see a full report that actually means anything?  Probably not.

    These are the reasons that the economy is, allegedly, suffering (that’s what makes 3 so interesting, it is a cited as a reason for the economic woes, while simultaneously being described as a response to them.  This is fine, and it works out, but I think it’s also a little Chicken-Egg-Black-esque.(for all you Wilco fan(s))).  But what are the signs that the economy is suffering?  Where is the evidence?  The media seems to be keying off of a few things.

    1. In the last 14 days, one airline has gone bankrupt, one has filed for bankruptcy protection, and two have initiated a merger, all in response to economic pressure.

    Delta had a complete Reorg a little over a year ago, invalidating a few million dollars worth of stocks in the process, to avoid completely shutting down.  Didn’t know they could do that?  Neither did I.  Airlines struggling is not a new thing, and while it may be related to profit margins, I submit that it has a lot more to do with poor management and the necessity to cut prices to the absolute bone, brought on by stiff competition without innovation.  What do I mean?  The checkin process is essentially not different than it was 20 years ago, and it probably costs just as much from a human resources standpoint, but ticket prices have come down over 200%.  I think this is indicative of the airline industry…they have lowered costs substantially without making any sweeping changes to the way they do business that allows for these cuts.  What do we lose, then, if we aren’t becoming more efficient?  Quality.  We’ve seen a significant decline in airline service, timeliness, and quality in the last two decades.

    Of course, I’m not an industry insider, and this is all wild speculation, but I don’t think you need to be an industry insider to know that spiraling costs with no change in production methods cannot result in increased profits or improved customer experience.

    What I’m saying is, Airlines have been troubled for years.  It’s not a surprise that a few of them are going out of business. We’ve seen it in the past, not coupled with the other “signs of the times”, and had no major panic over it.
    2. The Sub-Prime mortgage implosion.

    First, lets clear the air.  Do I feel bad for people who are losing the homes that they can’t afford and shouldn’t have bought in the first place?  Yes.  I do.  Losing your home must be a terrible, awful, horrid feeling.  Do I think they deserve a bailout?  I’m sorry, no.  Do I think the responsibility for their woes lies at the feet of the mortgage companies who issued them dangerous loans?  No.  If you take a loan and make your payment contingent on a continual increase in property value unlike any seen in history, you’re setting yourself up for financial ruin.  I don’t care if your mortgage broker told you that you were qualified, and that it would be fine.  Your finances are your responsibility, not his.

    So we have a handful of homeowners (and mortgage companies!) that risked their financial lives on a really, really stupid idea of house futures.  Now a large group of those homeowners are losing their homes, and the market is being flooded with foreclosures, which would SEEM to lower the value of homes.  In fact, value isn’t changing at all.  Value did not change while the bubble was inflating, only perceived value did. 

    This normalization is always seen after a bubble bursts.  Property values will return to a level at which they can be supported by their local economies.  Some people will lose their credit ratings and have to start over.  Is this the end of America as we know it?  I sincerely doubt it.

    The government has already shown a willingness to help large financing companies keep their heads above water.  The government is taking steps to protect the core economic foundations of the country, and they have indicated that they will continue to do so.  A decline (to the correct level) of home costs, and some people being turned out, is NOT an economic downturn.  It is a market correction.

    3. Home sales are down

    Duh?  Do I need to address this?  Loans are becoming sane again, and there isn’t a frenzy of people who are buying and selling homes from each other, climbing some imaginary money-ladder built on debt.  Little known secret: imaginary money-ladders built on debt invariably lead to pain.  Nolie.

    But home sales being down in the wake of a housing bubble bursting ALSO isn’t surprising.
    What would convince me that a recession was starting?  Home prices dropping below the floor that the local economy should, and naturally does, create.  Irvinehousingblog.com did the math for me, so go there for the charts.  There are formulas for this stuff, it isn’t witchcraft.

    What else?  National unemployement rate rising appreciably.  At the end of 2007 it was 4.8.  In March of this year it was 5.1.  This is not significant.

    One more?  Sure.  ANY sign of recession that I can see with my own eyes in my day to day life.  Well established businesses downsizing, stores closing, successful companies stock prices declining…Am I seeing this stuff?  Not really. 

    So…if there’s a recession, and I can’t see it anywhere around me, and no one that I know is feeling it…where’s the recession?