Wednesday, November 4, 2015

Highly Linkable

So Jay Bilas of ESPN and Oliver Luck of Cosa Nostra the NCAA debated paying college athletes at an event hosted by FIRE. Andy Schwartz imagined what it would be like with a toddler included. Andy's version is right on the money--so to speak. And here is the actual debate.

Been traveling on the road again; hence, been listening to make productive the time as I go down the highway. Here are a few that stood out for mentioning:

Russ Roberts (EconTalk) interviewed Michael Matheson Miller on his film Poverty, Inc. I love the line: "Poor people are not poor because they lack stuff. Poor people are poor because they lack the institutions of justice."

James Altucher (The James Altucher Show) interviewed Brett McKay, creator of the site The Art of Manliness. I knew of the site (and liked it a lot), but I didn't know McKay was from Oklahoma and graduated from OU--as did I. I loved the discussion on minimalism.

Trevor Burrus and Aaron Ross Powell (Free Thoughts) interviewed Berin Szoka on net neutrality vs. Internet freedom. Admittedly, this one gets a bit too wonky for some, but I found it insightful. I loved the line: "The fundamental problem here is the FCC is writing rules that have real harms because they ban practices that could be good for users or for a variety of other reasons in order to deal with largely phantom problems."

Thursday, October 22, 2015

Get Busy Living . . .

Sunday evening my grandfather passed away. Today was his funeral. I thought I would post the eulogy I gave as a memorial to him.

Ben Smith Eulogy

My grandfather, Ben Smith, was bigger than life. There is no better way to describe him. If you met him, you didn’t forget him. He was someone who always made a strong impression. This was in part because he was a strong personality but more importantly it was because he was genuine. He was honest to his core. Honest about who he was, who he was not, what he liked, what he did not, what he expected of you, and what you could expect of him. There was nothing fake, artificial, or put on about Ben Smith.

For a few moments I would like to give a small picture of this man relating a story to each of a few words that I believe aptly but not fully describe him. This is itself in veneration for him because he was such a wonderful storyteller. He had an amazing memory and a great ability to tell a story in a compelling manner. His knowledge of local history, immense wisdom, and unique way he experienced life for 93 years will be greatly missed.

FEAR: Like all of us, Ben Smith had his demons, but like him his were bold, and they shaped his life distinctly. Foremost among these demons was the hurt and confusion that came at age five when his father left the family never to be heard from again. He would cling to the few memories he had as the absence haunted him his whole life. Out of this came a principal he would firmly live and promote in his law practice—family was paramount and a man should always standby his family. That he did.

There were other fears. When he was born, he had a heart murmur. The doctors’ and his family’s fears for his health would lead him to be held out of sports, not allowed to “play too hard”, and told he was sickly. Their fears led to Ben developing a fear of imminent, early death. Despite or perhaps in defiance of this, he proved it quite wrong.

Ben Smith . . . He was always “grandpa” to me, but I’ll say his name a lot because he used to put his name on everything he owned, which actually wasn’t a lot. He was . . . frugal. He was very careful with his money. VERY CAREFUL. He was not someone to spend money including on himself. By any reasonable measure he lived a life of material deprivation. Growing up in the Dust Bowl and the depths of the great depression gave him a fear of economic ruin. This was the source of his frugality. He would proudly tell you that he never signed a promissory note in his life. He was never in debt. He never, ever bought anything on credit.

There were other demons he fought. He was a horrible swimmer; so of course he joined the navy. The things he saw in World War II gave him nightmares that would wake him in terror the rest of his life. Despite an upbringing in an era that embraced racism and other forms of prejudice and himself being a child of that era, he grew up to be a lawyer whose clients were among the most vulnerable including racial minorities, single mothers, and disabled veterans. His clients were the poor, the downtrodden. He faithfully fought for the little guy. He showed kindness to those who needed it most.

Ben Smith wasn’t ruled by fear; he wasn’t conquered by demons. These stories aren’t about fear; they aren’t about demons. They are about defiance. Ben Smith was defiant.

DETERMINED: Visiting a wounded friend in the hospital during the war, he saw a beautiful nurse. She had recently lost her fiancé and had no desire for a relationship. But he was determined and told her he would sit on the stairs outside the building refusing to leave until she went out with him. She did. He was married to this nurse, my grandmother, for 66 years.

Determined . . . One might say hardheaded. At times that was indeed true. Once he set his mind to something, it happened—one way or another. He had a saying that he tried in vain to live up to: If at first you don’t succeed, try a few more times and then quit—no sense making an ass of yourself. Like, say, when the city was tearing out the interurban streetcar lines, he decided a piece of rail standing vertically in his yard would look nice. So he went down to the construction site, cut a 25-foot section of rail, tied it to the bottom of his car, dragged it 10 miles scrapping a gash in the street the whole way. Then he had to get it to stand up in the eight-foot hole he had dug. As he struggled to get this several-ton piece of iron into position, he decided to call a wrecker to help. The wrecker itself tipped over getting the rail into position. He cemented it into place, built a planter around it, put a weathervane on it, and it stands to this day. Ben Smith was determined.

HARD WORKER: Work was his drive and his lifeblood. He hated sports. He hated fiction. He hated television (except for Sesame Street, All in the Family, Louis Rukeyser’s Wall Street Week, and perhaps a couple of others). He wasn’t interested in watching other people do things because he was a doer. He wanted to make things.

He built a house, basically by himself with the help of his wife, young daughter, and the occasional mailman who always just happened to be walking by when he needed to raise a wall. He built a law practice, a tax practice, and a real estate office. He built flower planters and storage barns. He carved wooden sculptures. He grafted pecans. He grew an orchard. He must hold the record for the most entries in the county and state fairs because he had no fewer than 100 blue ribbons.

And of course he had his farm where when most men are slowing down in life, he was just getting started. At age 63 he embarked on a series of projects at his Coal County getaway that included three log cabins, a stone cabin, several rock-retaining walls, and four stone bridges including one Roman-arch bridge strong enough to allow construction trucks to cross. All of them built by hand with no more machinery than a pickup truck and a chainsaw. I remember many trips as a child to those fun, spooky, challenging woods. I remember helping him on those many projects. I remember the dedication and expertise and incredible hard work. Ben Smith was a hard worker.

DARING: He was his own man. He charted his own course. This is a quality he had his entire life. At the age of 13 or so he would drive his grandmother from their home to downtown Enid. After he would drop her off, he was always to wait for her in the car. One day he decided he wanted to “see what this baby can do”. Imagine the sight of a young Ben Smith barreling down Main Street going 100 mph. Such was the way he lived life.

In the early 1980s inflation and interest rates were at all-time highs. Where many saw fear, Ben saw investment opportunity. They told him he was a fool to buy long-term U.S. Treasury bonds when 2-year interest was 17% and high-inflation looked permanent. We are now 35-years into the great bull market in U.S. Treasury bonds; Ben rode it all the way up. He still has bonds purchased at par value that command 50% premiums. Ben Smith was daring.

I’ll leave you with one story that he loved to tell that gives a glimpse into how he looked at the world. He would begin, “Let me tell you a story about my law school rival. He was always the sharpest guy in the room. The guy had always been great at whatever he did, and it always came easily for him. He was good looking, charismatic, smart, and humorous. He always got the top grade in the class and the girls always loved him. He was the big man on campus, and he knew it.” Ben would then ask, “Do you want to guess what happened to him after school was over and he got out in the real world? We’ll let me tell you: he got rich! He worked hard and was a big success. Won lots of big law cases. But do you want to know one other thing? I saw his obituary in the paper a few years ago. I OUT LIVED THE MAGNIFICENT SON OF A BITCH!”

Ben didn’t have to be the world’s greatest anything. He was his own world’s greatest doing great by his own measurement—not anyone else’s.

Ben Smith, my grandpa, went to sleep last Sunday night . . . I like to believe he woke up in his cabin to a bright dawn, kissed his wife, and walked down the hill to work on his bridge.

Tuesday, October 13, 2015

Highly linkable

I'm back from the dead . . . been watching from the hollow moon, as they say.

Detroit is beautiful and mesmerizing. Chicago is pretty damn awesome. The whole series (Little Big World) is hypnotically good.

Angus Deaton won the economics Nobel. Alex Tabarrok sums up his work nicely.

It is (past) time to recycle our thinking on recycling.

Just like so many of us want to believe recycling works, many want to believe in alternative medicine. Too bad some of those believers were in government.

Closing out a trifecta of wishing that things were not as they are, Steve Landsburg shows more folly in minimum wage policy.

And here is something way too few know or believe.

Saturday, August 15, 2015

Wine: It's More Like Art Than Real Estate

I just returned from Sonoma--so I'm an expert on all things wine for the next month or so.

One could really get used to a life out there: beautiful weather, wonderful entertainment and dining options, friendly and interesting people. What was it that Kurt Vonnegat didn't actually say? "Live in Northern California once, but leave before it makes you soft. Travel."

As we all know, not all wine is created equal and price is NOT the way to tell the difference.

I was enjoying our first tour and tasting at Far Niente when it fermented in my mind how people tend to not understand how to think about wine. The wines at Far Niente are superb . . . in my opinion. Fortunately, I don't find them so superb that it spoils less expensive wine for me. I can appreciate both the difference and that it is a difference rather than a superiority.

Many people don't understand this. They want to think about it linearly: good to bad = expensive to cheap. But wine is not something so simply categorized. The evaluation is multidimensional. Comparing wine is not as simple as comparing soft drinks. Soft drinks are much more a commodity (both in supply as well as demand). There are taste preferences, but the taste dimension has much tighter bounds in soft drinks than with wine.

Doesn't price correlate with quality, you ask. Yes, but quality is in the eye of the beholder. People want wine to be like real estate where quality tends to be relatively linear in definition. Larger dominates smaller. Most people tend to agree most of the time on location preferences. Elaborate dominates simplistic. And so on. There is of course a lot of room for personal taste differences in real estate. It is just that these are muted relative to the linear factors.

Instead of real estate consider wine to be like art. Here there are vast differences in personal taste and these tend to be overwhelming. It is a lucky man who can get as much joy out of his child's painting as he can a Picasso. I look at wine the same way. Our very sophisticated yet down-to-earth guide at Far Niente is perhaps cursed with a high appreciation for fine wine.

Adapting the analogy to hit closer to home, consider the differences in football appreciation. For some only the NFL will do. For others watching the same college team when good and even when not so good is the top preference. Still for others even any small college game gets the job done. Is devotedly liking OU or Texas or Alabama superior to having the same devotion to Kansas or Tulane or Indiana? Of course not. Sitting in premium seats to watch OU beat Texas is consuming an altogether different product as compared to casually watching from home or listening on the radio while you work on your car. It is essentially a coincidence that these three things involve the same sporting event facts and outcome. My meal at Bouchon and your meal at McDonald's share only the coincidence that both involved digestion.

There is one other aspect to consider when it comes to the price of wine: namely, budget constraints matter. One factor that determines consumer responsiveness to price changes (the technical term is elasticity) is how much of a consumer's wealth the price represents. Pencils are a classic example as they are usually so cheap that a large increase in price does not cause a large decrease in the amount purchased (price inelastic). Wine is not an inelastic good for me. So to ask if a bottle that is 10x the price of another is 10x as satisfying is relevant to me. But it is not relevant for a billionaire. So understand that the price dynamics in part of the wine (and art and sports attendance) market is simply not relevant to many of us.

PS. Here are some pictures from my trip. Random thought: How less popular would wine be if it were produced in less amazing places?