The Terrible Ten (years of investing)

Let's say, purely as a hypothetical example, that you finished college in 1994 and went to graduate school for 4 years, and so you first started making enough money to be able to start seriously saving for retirement late in 1998.  And let's say that, starting in January 1999, you've maxed out your Roth IRA every year, invested in an index fund that tries to match the S&P 500 because your retirement horizon is 40 years off.  By the end of 2008, you've put $32,000 into the fund and it's worth... about $25,558.83 (using these numbers for the S&P 500 returns and assuming my math is right).  By contrast, if you invested the same amounts from 1929 to 1938 -- you know, just before the stock market crash and through the Great Depression? -- your account would be worth $44,274.25.  Arrrgh**.  

Thank goodness this is just a thought experiment.


** it's true that the market bounced back in 2009, but even if we take this exercise through 11 years, the account begun in '99 is worth $38.8K (on $37K invested) while the one begun in '29 is worth $50.7K.

Solar-Powered Microhouse

We've seen this at the Farmer's Market (which is also in City Hall Park).  It's really too bad they don't actually have someone living in the house for the duration of the exhibition.  That would make for a more convincing demonstration, though getting the permits might have been dicey.


Part of me thinks this would be a neat solution for graduate student housing, especially at places like Stanford, where the housing is really expensive.  Part of me thinks that it's one thing to have a building to live in that costs less than a small car, and quite another to have a safe and secure place to put it.

Another reason to love VT

Spending ARRA money on projects, not signs: http://blog.tomevslin.com/2009/08/where-are-the-signs.html

Historical higher fares for overweight passengers

I've seen some of the articles about overweight passengers having to pay higher fares to fly, but the ones I'd read had given me the impression that this was some sort of new idea. Imagine my surprise while reading Anita Loos' excellent Gentlemen Prefer Blondes, which mentions at the beginning of Chapter Six that Mr. Eisman "decided not to bring them [his starving relatives in Berlin] to America because there was not one of his starving relatives who could travel on a railroad ticket without paying excess fare for overweight."

U.S. expenditures on children through age 17...

… as estimated by the USDA. I think there’s a big problem with assuming that each child has their own room if housing accounts for a third of the cost of raising a child. Thanks to the Motherlode blog for pointing to this report.

How government can "safely" invest in the venture market?

Tom Evslin recently touched on the dangers of government dumping money in the venture market, which is something he's done before and will no doubt do again, but it's really hard to stop the government from spending money, so I wonder if it might be easier to at least try to spend it (more) wisely.  For example, instead of saying, "we're going to spend $30 billion on funding a green energy alternative, and we choose to spend it on so-and-so companies that work on the such-and-such alternative" the government could instead set up an X prize or Netflix prize-style contest that sets up the parameters of a problem to be solved (generate so much electricity at such-and-such a cost) and allows individual business to figure out the solution to the problem.  

Taking out the trash

A recent article in Seven Days (the local "indie" paper) reported on the debate over a bill that would add a dollar to the cost of each tire sold in Vermont, which would then go towards the costs of collection and disposal. An opponent of the bill is quoted as complaining about why tires are singled out. “It’s computer stuff, couches, TVs, shopping carts, all kinds of things. Do we now tax a dollar on every TV that’s sold . . . on and on? Or do we try to enforce the current laws?”

Well, actually, putting the costs of collection and disposal up front, when the consumer buys the item, and providing "free" disposal when the consumer wants to throw the item out, makes a whole lot more sense than collecting fees at disposal time and spending money trying to enforce largely unenforceable laws against illegal dumping. Simply take away the "rational" incentive to illegally dump (boy, it's expensive for me to properly dispose of these tires/tvs/etc; I'm just gonna dump 'em in the river/woods and no one will know the difference), and you'll just be left with the vandals (heh-heh, wouldn't it be cool to push a shopping cart down this hill?) to try to catch and prosecute.

The challenge of creating a system in which the costs of collection and disposal are put up front (without creating a more horrible bureaucracy) is left as an exercise to the reader; given the existence of state sales taxes, the collection aspect isn't particularly important. Instead focus on the problems of proper assignment of the cost of disposal for items -- clearly a tire costs more to dispose of than a plastic potato chip bag, but how exactly should you assign costs? (a straight percentage might work; then again, a $40 dvd player probably costs as much to properly dispose of as a $300 one, and a lot more to dispose of than the packaging for $40 worth of organic green tea) -- and the problem of out-of-state and online purchases (solve this latter problem, and you've also solved a similar problem for sales taxes... good luck).