The Corporate Surveillance State

A completely creeptastic article from the NY Times on how Target can figure out that your 16 year old daughter is pregnant before she’s willing to talk to you about it, based on what she’s buying and when.  Big Brother isn’t a mustachioed Stalinist, he’s a mild-mannered statistician attending corporate board meetings and sending out personalized coupon books that purposefully camouflage just how much his computers know about you and your so-called “private life”.

Automotive Death Revealer

We hide many of the financial costs of our automobile culture, such as the exorbitant true price of parking, but just as much, we hide the cost in human lives.  By far, the most common source of violent traumatic injury and death in the developed world is our beloved motor vehicle.  In the US alone, every year 10 times as many people are killed by cars than were killed in the World Trade Center attacks, 10 times as many as have been killed in the Iraq war.  Every two years we kill more Americans with vehicles than we did in all of the Vietnam war.  Every three years, more than WWI, every ten, more than WWII.

Why do we deem these losses acceptable?  They aren’t inevitable.  The UK, Iceland, Sweden, Japan, the Netherlands, Germany, Ireland and Switzerland all have vehicular death rates less than half of our 12/100,000 people per year (which puts us on par with Bangladesh…).  We can re-design and re-build our cities and our streets to avoid this carnage, for a fraction of the cost of our ill-fated War on Terror, and many other governmental actions supposedly undertaken in the name of keeping us safe.  Safe from threats which do not really exist, in a statistical sense, but which loom large in our monkey minds.

Would it be different if we left the corpses out on the roads to rot?  If we hung the out skeletal remains as a ghastly reminder?  Some software developers in Moscow are trying to do just that, with a mobile augmented reality app called the Death Revealer:

(via Copenhagenize)

On the Economics of Mass Transit and the Value of Common Sense

Nate Silver of FiveThirtyEight thinks about what we ought to measure when comparing public transportation options.  Does Modesto, CA really have better public transit than New York City?  There are a lot of measurable quantities, but only some of them are interesting.  In particular, it’s not the absolute convenience of public transit that matters — rather, it’s transit’s relative convenience compared to driving alone that determines how people get around.

Links for the week of February 26th, 2010

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An Introduction to Retirement Investing for Scientists

After spending a number of afternoons and evenings with friends and family over the last few months reviewing their retirement planning and investments, I’ve gone and done something a little bit crazy: I suggested to the GSC at Caltech that maybe I could give a talk on retirement investing to the grad student/postdoc population.  Incredibly, they thought this sounded like a good idea, and so now I’m scheduled to give a talk in a couple of weeks.  I’m going to try and write it up here in prose form first, to get it organized.  It’s gotten to be a bit long… so I’m going to break it up.

Main Points:

  1. Taking responsibility for funding your own retirement is arguably more important now than it has been for a couple of generations.  100 years ago we had much more in the way of traditional (family, community) support in old age, and the systems that we put in place after the Depression (corporate pensions demanded by organized labor, social security) show few signs of being fixed any time soon.  Generally today you do not even have the option of signing up for a “defined benefit” plan.  It’s a 401(k) or the highway.
  2. Investment returns are for all practical purposes random, unpredictable events, and because of this there’s really no such thing as an “expert investor” in the sense that most people selling their investment management services try and imply.  Nobody can reliably beat the broad markets, but you can do a perfectly good job of managing your own retirement funds if you’re willing to spend about 4 hours per year on it, say the other half of the day you spend doing your taxes.
  3. To maximize your chances of success, you must habituate yourself to spending less than you earn, making investing as automatic as possible, starting early and aggressively, and continuing throughout your entire career, regardless of what life and the markets throw at you.  Because returns are exponential and not linear, the difference between starting to save at age 23 and age 32, assuming roughly an 8% rate of return, can be on the order of a factor of two in the final value of your retirement funds.  Being comfortable living well below your apparent means makes it possible not only to save money now, but also reduces the amount of money you need in order to have “enough” in retirement, where “enough” means about 25 times your expected annual withdrawals, as you can take about 4% of your money out each year indefinitely.
  4. Maximizing the returns on your investments largely comes down to managing investment costs: how much you pay the people doing the actual investing (i.e. the mutual fund companies), and how much you pay in taxes.  The difference between paying 0.2% and 2% in fees and taxes each year might not seem huge, but over the course of 35 years of investing, it makes roughly a factor of two difference in the amount of money you end up with.
  5. The two most important tools you have in managing investment risk are diversification and asset allocation.  Diversification reduces the overall impact of many kinds of unpredictable events (high oil prices, the demise of the newspaper industry, war between India and Pakistan, collapse of the Icelandic currency… etc.) reducing the overall volatility of your portfolio.  Asset allocation (mainly the split between stocks and bonds) allows you to choose what kind of financial risk you are exposed to, and to shift it over time as you get closer to actually needing to live off your investments.  With stocks, you get the potential for future growth, at the expense of having to put up with wild fluctuations in their value.  With bonds, you get less price fluctuation and less potential for growth, but the ability to draw a reliable income stream.  With cash you get little to no price fluctuation, but essentially zero potential for real (inflation adjusted) growth.

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Links for the week of September 25th, 2009

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Links for the week of September 4th, 2009

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