Category: economics

U.S. Currency War with China?

This short piece is on News Hour introduces us to the politics of currency manipulation. A government who keeps its currency artificially low is in essence dumping their goods and services on every other country, thereby taking jobs from those countries.   The hard part is determining when prices are really artificially low.  While it is in the end a political opinion, we have some hints as to when the price of a currency is really lower than it should be.  One of those is when per-capita income is higher than another country’s and yet there is still a net export of goods and services.  According to the International Monetary Fund, for 2010, the U.S. had the 7th highest per capita income of $46,860, while China came in a distant 94th with $7,544 per person.  China’s trade surplus for that same year was $190 billion.  Were we to attribute all of that to the United States, that would add about $680 to the U.S. per capita income.

On the other hand, Perhaps, on the other hand, the U.S. currency is too high. After all, the U.S. trade deficit for 2010 was $498 billion.  But then what do we do about it? To lower the value of the dollar you simply print more. Of course that risks inflation. And if you do print more, why shouldn’t another country respond by printing more of its own currency?

It’s a messy business, and given the amount of money to be made or lost in speculating on currency, the U.S. Senate should be very careful about the sort of laws they pass, particularly ones that in some way ties the Treasury Department’s arms in dealing with currency crises.  Thar be dragons here.

 

Is Google Green or Wasteful?

Google Smoke StackToday’s New York Times has an interesting article about how Google uses enough electricity on its own to power 200,000 American homes.  Google claims that it’s using that energy so that consumers don’t have to, and that in fact they do so more efficiently than consumers in aggregate would.  There’s some small merit to the argument they’re making, but it isn’t obvious at first glance.

Google’s argument is that they’re saving you a trip to the library when you do a search.  That might be true sometimes, of course, but the chances are you didn’t go anyway.  For one, you might have instead picked up your local yellow pages, or an Atlas, or written a postcard.  But yes, sometimes you might have gone to the library– with your car.

Often times we the consumers get tricked into thinking that all big numbers are meaningful.  Let me give you an example from the networking industry.  It is not unheard of for a high power Internet router to suck a lot of power.  A fully configured Cisco CRS-1 uses about 8Kw of power.  These are big pieces of hardware that can each serve the needs of thousands of customers.  Perhaps there are 2,000 of them and their ilk in America, and probably less.  And so at any moment that’s about 16 megawatts worth of power.  Big number, right?  And so let’s say that we found a way to cut their power consumption by 10%.  Per box, that’s 800 watts.  That’s a lot of power, right?

Now let’s look at a consumer router.  You know the ones- Linksys, D-Link, etc.  They use about 8 watts of power.  Of course there are about 89 million of those devices out there[1][2].  That means that savings of a single watt of power in those devices saves 89 megawatts.

Why do I mention all of this?  Who cares about how much power Google consumes?!  The real issue is the computer you’re reading this post with.  There are orders of magnitude more of those than there are of the computers that Google uses to return a search result or your email.

But what do you get for that energy usage?  Well, you don’t have to have your bills sent to you in paper copy, and you don’t have to use the ink to write a check, and you don’t have to have as many checks printed, and you don’t need to receive paper copies of the TV guide, and you might not even use DVDs any more if you’re using NetFlix.  In fact, you probably didn’t read the New York Times article on printed paper!  You don’t need to fax, because you can email, and you probably don’t even know how good your handwriting is, these days, because you’ve been typing.

This is not to say that the technology sector shouldn’t do a better job at recycling or energy use.  And it’s good that we look at the total cost of what we consume.  But let’s also recognize the benefits.

Android Phones the next security threat?

Take it as an axiom that older software is less secure.  It’s not always true, but if the code wasn’t mature at the time of its release- meaning it hasn’t been fielded for years upon years- it’s certain to be true.  In an article in PC Magazine, Sara Yin finds that only 0.4% of Android users have up to date software, as compared to the iPhone where 90% of users have their phones up to date.

This represents a serious threat to cybersecurity, and it should have been a lesson that was already learned.  Friend and researcher Stefan Frei has already examined in great detail update rates for browsers, a primary vessel for attacks.  The irony here is that the winning model he exposed was that of Google’s Chrome.

What then was the failure with Android?  According to the PC Magazine article, the logic lies with who is responsible for updating software.  Apple take sole responsibility for the iPhone’s software.  There are a few parameters that the service provider can set, but other than that they’re hands off.  Google, however, provides the software to mobile providers, and it is those mobile providers who must then update the phone.  Guess which model is more secure?  Having SPs in the loop makes the Internet more insecure.  Google needs to reconsider their distribution model.

Airline Profits? Peter asked about airline profits

Here’s some data from Q3 of 2010:

U.S. Airline Profits for 3rd Quarter, 2010 in Millions $


Note that United and Continental have merged, but they provided a profit split in their report.

Frequent Traveller Nightmare Part 2: Traveller heal thyself

As I wrote, some people are not in a position to slow their travel.  Sales people need to see customers, and indeed there is a different social dynamic that occurs in person versus remote.  However.

If one visits a site like flyertalk.com, where one sees the sheer mountain of complaints against the airlines, there must clearly be a better way for many people.  There was a person at my company, for instance, who would commute to his customer in New York from the middle of England – on a weekly basis.  Apart from what that costs in terms of dollars to our company and greenhouse gas emissions, it costs the individual too.  Why didn’t the management hire someone in the New York area to do the job?  Why didn’t they insist that he use TelePresence?

Well, watch this space: video is really coming into its own.  Cisco has led the way with TelePresence, and is doing its level best to bring people closer together through introduction of new products and services like ūmi.  If video can be made cheap enough, it hopefully means an end to at least some routine business travel.  Better placement of resources would mean an end to much more.

But beyond that, all of these people who complain about business travel on that web site look at it as if there is nothing they can do about it.  Really- to read someone who travels over 100,000 miles a year and took the time to complain leads me to ask the question I asked myself when I found myself miserably traveling: why travel if it is so miserable?  How about not traveling?  Or at least not flying?  Or at least reducing the amount you fly?  You’ll make yourself happier, spend less money, and reduce carbon emissions.

Here’s one reason not to stop flying: sending a message to the airlines.  They don’t care.  Not only don’t they care, but they’ve learned how to make money no matter what passenger demand they have, through the ability to easily adjust their fleet size, furlough employees, and cancel flights.  Load factor is the only thing they care about.  You can’t affect it.

By the way, people might think I find the airline industry uninteresting.  I don’t.  I think it’s fascinating, how planes are designed, how they’ve learned to make money in the worst of times, and how they’ve consolidated themselves into an oligopoly.  But I’ll watch from a distance as best I can, thank you very much.