Credit card exchange fee externalities

This week's Economist contains an article making the argument that credit card points represent a transfer from less affluent to more affluent people because businesses taking cards price in the average 2% exchange fee that includes the points. So those who use cash or loyalty points free debit cards don't get the benefit of the points, thereby transferring wealth to those who do. 

I get that. I've heard the argument before. So far so good.

But what about the benefits of reducing the amount of cash in circulation and thereby the transaction costs associated with securing the cash. All the extra layers of security guards, armored trucks, trips to banks at the end of the day to deposit cash, etc. The diminished risk of a store being subjected to an old-fashioned pistol-toting hold up because crooks know that the risk-reward balance isn't there if a store will have very little cash in the till. There are all sorts of benefits in terms of diminished transaction costs to trimming down cash. Pre-crypto, the traceability of digital commerce made policing it a little easier, so long as institutions lifted a finger on their Know Your Customer efforts, as Morgan Stanley apparently has left off doing.

One could produce arguments that that whole value chain of physical security represents a lot of employment possibilities for working class people, but that depends upon the cynical assessment that these people are so ineducable as to be unemployable in a digital world, which I reject out of hand. In the form of the market and we have just decided that we don't care enough to do the educating.

Alternately, one could argue that, to the extent that the cash-based world depends on higher levels of person-to-person interaction, community of shared interest and mutually acknowledged interdepency than does a digital one, and that all that is preferable. That's a fun thought exercise.

My gut is that digital commerce -- pre-AI -- is less carbon-intensive than cash-based commerce, but that would be a complex thought process.

Undoubtedly, however, the cash-based world provides for a much richer range of dramatic situations suitable for action movies. Office Space pretty muched plumbed the depths of that one and it came up all comedy, no action. But eminently worth revisiting.

Grumpy dad

Natalie has been up early two mornings in a row and I have been a little grumpy. Even on the second morning, when I heard her up downstairs before coming down myself. I have perhaps too much of my sanity invested in the sanctity of my morning routines. When I was listing some of my habits for Leslie when she was visiting a few weeks ago, I realized that it sounded as if I verged on OCD if not worse (worse than verging, that is, not worse than OCD, which is just a thing).

In most facets of life and on most occasions I am able to adjust to changes in plan and get back to some semblance of equanimity. But it's definitely not without effort.

Right about now I am still adjusting to the dramatic shift in fortune brought on by the reelection of Trump and all of his fucking Tweedledum homunculi like Musk. It's just the broad societal validation of masculine destructiveness that is blowing my mind in the moment. Plus the exhaustion of working so hard for an opposite result and, perhaps, the fact that it feels like we have reached the holidays right at the end of summer, based on the weather outside.

The next week promises to be colder. Maybe that will help.

Dream report

Just before waking this morning I had a dream which was pretty disturbing, though probably not to you. Beth had moved to somewhere in the upper Bronx and I had to meet my friend and client C. somewhere across "the river" in Brooklyn/Queens whatever (as usual with dreams, just ignore the geography. Of course it's not gonna make sense). I was planning to cross over the river somewhere to the south and east of Beth's place (didn't really know how or when). Mary was with me and decided to join me on the trip over to whatever ferry I was going to be taking. We set out walking. She was wearing some kind of a nightie, slightly see through. We were way high up in the Bronx, it was kind of rural, and there were no cabs. We kept walking. Mary didn't even have her phone with her and I was starting to get concerned she wouldn't be able to find her way back to Beth's.

Then down to the left (we were on an elevated section of road) I saw Katherine Davis. I don't remember talking to her but one way or another she lent Mary a kind of shiny gold jacket, so at least I didn't have to worry about Mary walking around half naked and perhaps catching a cold. We weren't getting anywhere closer to where I needed to go and it was increasingly clear I wasn't going to get to my meeting with C. on time. Which made me feel very guilty.

Then my alarm went off.

Given that C. died of cancer in 2024 and we/Mary had our first run in with cancer this year too, it doesn't take a rocket scientist to see that there's a lot of mortality being meditated upon here. 

Sorry to burden you with my dreams but it is, after all, my blog.

Boxed in by the day

With the holidays fast approaching, it's one of those Sundays that feels more like a Monday. Today I need to.

1. Get the leaves off the roof (with Mary)
2. Submit my Obamacare application for 2025, since I know that next weekend Natalie and Graham will be around and it will be even worse than this weekend and I'm sure not going to let this slide towards the last weekends of the annual enrollment period
3. Play a league tennis match in the afternoon against Eamonn, who smoked me in the spring
4. Get to the pet store for food for Leon (don't ask why I will draw this straw)
5. Hit my 500 daily pont quoate on DuoLingo

I apologize for laying down what is essentially a task list. But all this makes it feel an awful lot liek a work day.

This after going to Snapper Hackney's memorial service yesterday. I'm glad I went. It was another reminder of just how much a segregated school within a school I was in when I was younger. As I'm sure I said before, I knew the black guys at some very superficial level through trying (with varying, mostly low levels of success) to play basketball but really knew almost none of the black women. The problem by now is that the black guys are dying at younger ages than the black women (Snapper, Chris Tate, Freddy, Alton and Elton Harris, Russell Dula, Ivan McClam, Harry Alston, to name a few that come to mind off the top of my head). The women are hanging on.

It was a very traditional black southern Gospel service. I won't expand deeply on that, save to say there were many moments where I -- and even Lisa and Amy -- didn't know just what to do (Ellen Weaver gave us some guidance at one crucial moment). My overarching impression was that there were a lot more people I knew there from high school than I'm used to seeing at funerals and that what remains of the Chapel Hill African-American community seems admirably tight.

The first thing

My pre-breakfast routines are pretty well-formed and consistent. I won't belabor you with all the detail, but it all culminates in a period of reading on the couch with Leon sitting to my left and a cup of coffee on the table to my right. There were times when Rascal sat to my right, and in the last few months of her life she took to perching behind my head and, at times, climbing down onto my shoulder.

What remains constant is the reading. I reserve this time for very long view reading. For a while it was Al Anon daily readers, followed by a variety of stoics, rabbis, neo-Hindu/meditation gurus, and then the Bible. The Good Book had me feeling I had maxed out on expressly spiritual reading, and my eye was caught by Annie Proulx's Fen, Bog & Swamp, which Natalie had picked up for Mary for her birthday to help her dig deeper into the thought process around her Gamelands series. So I set to it.

This is a very good book, not unlike McPhee, but somewhat less distracted, a testimony to what a lifetime concentrated on reading, reflecting and recording can create. I will keep going.

The story of abuelita

There were a number of shows going on at the Center for Documentary Studies the other day when Mary's was opening. I could have done a better job perusing them, but was caught up with a combination of hosting/talking to friends who showed up (thanks to all of you!) and also reverting to my graduate school days and feasting on the food that was brought. Somehow even after all these years away from grad school the economizer in me cannot resist the clarion call of free food, particularly when it includes a rather serviceable (if surprising) mac and cheese, as Thursday night's spread did.

In the kitchen there was an installation called "my grandmother's kitchen." A very nice young Latina (she preferred Latina with an a to Latinx) woman had decked the kitchen out with a wide range of decorations and foodstuffs to recreate the atmosphere of her grandmother's kitchen back in Texas. We talked for a while about a range of stuff, including baked goods. I told her I had never settled on a preferred item in Mexican bakeries (my polite way of saying I had never been impressed with anything in them) and asked her what her go-to was. She indicated a cinnamony brown item and said it was particularly good with coffee with a little whiskey in it. I took one of those home and toasted it for breakfast the next day. It was fine with a little butter on it.

After most everyone had left, Mary went in and talked to her. In short order Mary heard the story of her grandmother or perhaps great-grandmother, whose picture was on the fridge. Apparently she had been abducted by a white guy and forced to bear his children. When she learned that this wasn't the first time he had done this, and that he had killed her predecessors, she was fortunate to get away.

It seems to me that the moral to my story here is that, instead of pumping her for info about baked goods and snacks (she told me other stuff) I might have asked her about her installation as a whole, or noticed the pictures of the family members on the fridge and asked about them. Then she might have told her story. 

Reversals of fortune

Veritable oceans of ink have been spent speculating on how we got to a reelection of Trump. One of the favored theories is that it was the inflation that consumers suffered through that brought Biden down, the proverbial "price of eggs." Inflation was undoubtedly a major cause, but it's not because it was so bad. Our brief period of pretty bad inflation fairly pales in comparison to real instances of inflation, like Argentina's for much of the last few decades, or Venezuela's, or Rhodesia's, or Weimar Germany's. Or even our own inflation through the 70s and into the 80s.

The problem was to not so much the inflation under Biden as such but the presence of meaningful inflation at all after the end of the "Great Moderation," the period of successful central banking ushered in by Paul Volcker after his appointment by Carter, carried forward by Greenspan (the financial crisis notwithstanding) and his successors Bernanke, Yellen and Powell. People have been spoiled by stable prices and don't know how to think about or cope with inflation. 

In his 1965 classic The Anatomy of Revolutions, which looked at the American, French, Russian and Chinese revolutions, Crane Brinton pointed out that revolutions don't start because things are really bad, but when things have been pretty good and then do downhill a little. People unaccustomed to adversity get riled up and go around a break things. Compound generalized displeasure with a pressure cooker of social media and you have a recipe for disaster. And here we are.

All I can say is thank God the central bankers were able to keep us clear of the deflationary threat that hung over our heads coming out of the financial crisis. If you think inflation is bad, try a few years of deflation and then get back to me.

The damned leaves

They just keep coming. There's no escaping the fact that I'm gonna have to get up on the roof and push the ones up there down by this weekend. In fact, with rain approaching tomorrow, I should probably do it today.

The last place I usually attend to is the steps coming down to our front door. Relatively few people ever come there, mostly just deliveries. But that's why I should clear them.

A few weeks ago when our soccer team was announced as inductees to the CHHS Athletic Hall of Fame, a co-inductee was John J. '82, who starred for our football team as a running back. John told me he's been living in Carrboro all these years and working for UPS. He also recited the litany of injuries he's suffered over these years, knee, elbow... Obviously a bunch of wet leaves don't help with that.

Still obviously numb

Like a black hole, the question of Trump's victory and its implications continues to suck in all too much of the world's energy, including my own. This will go on for a long time. Democrats do need to transition from thinking not just about how we got things wrong and what we did wrong to how we are wrong. That's a factor.

But we're not and have not been wrong about everything. One interesting thing here is how close the election actually was. As the California votes continue to come back Trump's lead in the popular vote continues to narrow. It's now at just about 2% and could settle much closer to 1.5%. Moreover, with a shift of around 250k votes in Wisconsin, Michigan and Pennsylvania Kamala could have won without the popular vote. This was closer than we all thought. Trump's mandate is not as thumping as it has been made out to be.

Though he did win and perhaps his voters will back off on their attacks on the election integrity. That would be a win for all of us.

Here in our home, we are also still processing the loss of our cat Rascal, though ironically Leon seems the least affected by it. But what do we know about his internal state? Cats are not great communicators. By now we have returned all the rugs to the main part of the house and we are allowing Leon to roam freely. Some are more free, even as others have died.

The economy, stupid

Today in the Journal there's an article about how inflation was the number one issue on voters' minds. Some thoughts on this.

1. From the very beginning Biden and Kamala's line of reasoning and attack on inflation was stupid. They blamed greedy corporations and promised to crack down on them. Idiocy. Companies need to pass their costs through to customers to stay in business. Consumers can then make consumption choices. Why don't we trust the populace to be more intelligent and say "we printed more money during the pandemic. It's supply and demand. Supply creates demand and raises prices. We couldn't reduce supply through taxes so high supply created demand." Yes it's complicated but we have to let people think for themselves if we want them to be intelligent. 
   
   Oh yeah, on the labor supply side immigration helped bring inflation down. Particularly when we lost >0.4% of the population to COVID.
   
   
2.  One of the people in the Journal article was a mid-American hairstylist who wouldn't pass higher costs through to her customers out of consideration for how hard things are for them. Which is lovely from the community standpoint. But shitty business. Then it turns out her husband is a YouTube content creator who home schools their two kids. And they wonder why they can't buy a house. 
   
   Often the cultural right will criticize kids for taking impractical courses of study like Women's Studies, English, blah blah blah and then complaining they can't pay the bills. There is some substance to the critique that the public purse shouldn't have to subsidize that. Though to restrict support would restrict these areas of study only to rich kids. 
   
   But nor should some home-schooling YouTuber expect a bail out.
   
   
3. Time is running short so I need to hustle but one more couple in the Journal article were Northern NJ folks with low 6-figure jobs who could only afford one kid. So they voted for Trump. I am going out on a limb here but I wonder if part of what's going on here is that as progressively more of the profits in America are flowing in to the mega tech companies (including Musk, the great proponent of baby birthing) that other companies are less able to compensate people. This is complete speculation but I wonder...
   
   

Butterflies

It would just be dishonest of me to fail to note that today is an anxious day. The polls have led us to feel good about Josh's chances, though I have worn my knuckles out knocking on wood.

But the fact that the world-historical monumental jackass Trump is as close as he is to returning to the White House fills me with shame. How do I live in a country, nay a world, where something like 50% of the population thinks that's OK. Where people are so susceptible to disinformation that they will believe anything he says, seemingly reading directly off a teleprompter put there by the GRU.

Kamala Harris is far from perfect. Joe Biden's belated dropping out the the race and the backroom way in which we elevated her to the top of the ticket was not the greatest, though admittedly it spared us the necessity of going through a gut-wrenching set of debates where Democrats attacked each other viciously. But nor is she horrible. We can work with her and trust her to acquit the office honorably. If she is elected, she will need to up her game to act as a meaningful counterweight to Xi and Putin on the world stage, and she will need allies of greater stature and weight than are on offer at present.  

Then there's the issue of Michelle Morrow and Mo Green. Fingers crossed.

Rascal moves on

I have been remiss this week in failing to note the passing of our cat Rascal. We got her and her "brother" Leon from the Goat House Refuge down by Pittsboro not too long after coming to NC, somewhere around 2009-10. 

She was always the more social of the two. So much so, in fact, that she was known to upstage even Josh. One time at a fundraiser at our house he was standing on the stairs, addressing the assembled crowd, while Rascal went back and forth along the bannister, pretty effectively upstaging him. Thankfully it did no harm to him politically.

She was always happy to be petted, especially if you would scratch her haunches. She loved in particular to perch on the pillows on the back of our couches when we were watching something or reading. Sometimes, in fact, she was even willing to play the role of pillow herself, letting me put the entire weight of my head back on her while I watched TV. That was pretty awesome. She loved to hop into any box that crossed her path and also bags, if they were laying on their side. She also had this adorable way of hanging a leg or two off of a couch or table, as in this classic photo where a sleeping Graham unconsciouly pays tribute to her.

In her last few months things went downhill. She lost more than half her body weight. She started leaving various types of presents around the house, often on the rugs or couches, so we swathed the couches in blankets and towels. It was a bit of a pain for us but we had no indication that she was in pain. We were happy to let her live out her days as long as made sense. She is missed.

The thin line between small talk and oversharing

On the way back from Cleveland today I was picked up at my hotel at 5:15 for a 7am flight. Actually the driver was early, so it may have been 5:10.

A very nice guy, to be sure. But super chatty. When I told him I was from NC he paused and then was telling me about a trip he had taken to an AA convention in Myrtle Beach with a friend who is a recovering alcoholic. I told him I was in AA. He was quiet for a little while then he recounted about how awesome the lazy river was at a neighboring hotel. "It was much better than the one at our hotel, so we snuck in over there." Then he started telling me about the guy who made the omelets at his hotel, who was named Omelet Ray for his complete mastery of his craft: "I'm pretty simple, I just like bacon, sausage and cheese," he told me. 

It was like this pretty much the whole way to the hotel, just a ton of detail. Oversharing.

Which made me wonder. Am I like that? When does one reach the edge of making light chit chat to pass the time and venture into the realm of inane and excessive detail?

Certainly the night before at dinner with four members of the firm that was courting us only the CEO had much of a gift for small talk. I did have to wade in with a story or two, lest the conversation should die out.

And I had to pick the apps and the sides since, for some reason, everybody else was afraid to make suggestions. I picked pretty well.