I feel terrible today, probably for many reasons.
I may feel poorly because I stayed up all Monday night to reduce some data, and have yet to fully recover.
I may feel badly because it is snowing.
But perhaps the reason I feel most terribly is that, today, I feel I put an impressive individual's feet to the fire.
Ann Druyan, an accomplished co-producer of Cosmos, an author, and Carl Sagan's widow, spoke to our science communication class. She gave a moving testimonial and excellent example of how science can inspire.
My intention was to ask a question about what scientists can do to improve themselves, both as scientists and citizens, independent of the perennial outreach issue. But it seemed like that question was interpreted and restated on both our parts as a science-religion question. She was gracious in her response, and afterward I did my best to apologize for any pointedness, real or perceived, on my end.
But the issue remains, and I will do my best to articulate it here.
My contention was, and remains, that "outreach" implicitly sets a dividing line between scientists and non-scientists. This in itself isn't harmful - differences do exist in terms of knowledge, training, and experience that make such a distinction real and critically important if education is the goal. What is potentially harmful is a frame in which the broader society is viewed as an entity to be changed, and the scientists are the change agents.
I believe Ann, and most scientists, recognize that this is a gross simplification. Being a heterogeneous, complicated, and fundamentally human community, we fall prey to any number of biases -- the availability heuristic being a particularly pernicious one. (This means that what's familiar is more salient, and we make judgments weighted more heavily on our own experience and memory instead of data.) And yet the stakes are so high that I would say that before we focus exclusively on outreach, a measure of inreach is necessary.
I know, to varying levels of certainty, that the individuals in my department have experienced depression, anxiety, familial problems, financial difficulties, and health issues. But I also know they are amazing, strong individuals who, as Jim Bell once said, "draw strength from their ghosts". Before we have any pretensions to being a "scientific community", we may do well to see how well either of those words describe who we are.
Ann, on the off chance you read this, I want to reiterate my comments in our conversation after class. You are an amazing individual who has "it" - the ability to persuade and inspire, the communicator's dream, and the scientist's gold standard. Neil deGrasse Tyson mentioned that the path for science communicators, like himself, was blazed by Carl, and that he paid for it.
In a way, Carl Sagan's story echoes Ben Franklin's - worked his way from humble origins to fame, fortune and international renown, but remained rejected by the very countrymen who benefitted the most from his meteoric rise and visionary work. Ben Franklin was the first American scientist, and the first American scientist to push strongly for changing American higher education from a Latin-based curriculum to an English-based one, opening the doors to public education.
Perhaps, if I had met enough Ann Druyan's in my life, I would not be leaving astronomy... perhaps not. What is clear is that the demands for the 21st century citizen, and the 21st century scientist, are substantial. My time here has shown I am not equal to the former, but I will devote my remaining time to working on the latter.
Ann mentioned that February 20, 1961 was a snow day. She spent it listening, along with her family, to Kennedy's First Inaugural. Two weeks ago, I went to Arlington National Cemetery and knelt by JFK's grave, and read the excerpts of his First Inaugural Address, and cried.
Now, I turn, as I so often do, to the words of his younger brother, Robert.
"Our future may lie beyond our vision, but it is not completely beyond our control. It is the shaping influence of America that neither fate, nor nature, nor the irresistible tides of human history, but the work of our own hands, matched to reason and principle, that will determine our destiny. There is pride in that, even arrogance, but there is also experience and truth. In any event, it is the only way we can live."
Neither fate (religion), nor nature (science) alone will determine our destiny. It will be the fruit of our present labor and indolence, wisdom and ignorance, ambition and contentedness. Our destiny is a hundred-pointed caltrop, dangerous to the touch, painful to grasp, but necessary to bear for a time, towards the future that must be.
And in that effort, we grow to become stronger, nobler individuals, more amazing and impressive than we could have ever hoped, yet recognizable in the mirror as simple, ordinary individuals who found something beyond themselves towards which we strive as best we can, with those who can and will.
I think Ann Druyan is a critical part of that future -- as is Neil deGrasse Tyson, Bruce Lewenstein, the members of the Science Communication class, and the astronomy graduate students I have had the privilege of working with. I don't know when "too late" is, or how one would measure it, so I will work best knowing that, for all times and for all civilizations, there are always challenges that will require the brilliance, talent, and vision of citizens everywhere.
So "let it go forth that a torch has been passed to a new generation." And let us not drop it, or be burned by it.
Tuesday, February 26, 2008
Monday, February 25, 2008
Personal Finance: Four Calculations That Will Save You At Least $2.5 Million
In recent months, I've been spending my time reading up on personal finance and investing. It's not a new interest-- I was introduced to stocks at the age of 8 by a family friend. Although I had no money to invest, and no real knowledge of how the market worked, I remember periodically following stocks in middle school, listing the closing prices of twenty large-cap companies. My interest it stock cooled somewhat, when through a miscommunication with my mother, I encouraged her to buy the Palm IPO. Well, as it turns out, we bought at about 100, and sold at 3. Fortunately, we didn't put the farm on the investment, but it led to both of us distrusting my financial prowess. (My mom continues to bring up the Palm plunge whenever I encourage her to do something remotely related to personal finance.)
Many of us probably wouldn't be surprised that the average American man lives about 78 years, and that the average American woman will live 83. (The weakness associated with the Y chromosome, and scientific evidence for the eventual "extinction" of men, c. 122000 CE, will appear in a later post.) But it surprised the hell out of me that this translates into 28,470 days for men, and 30,295 days for women. There's a finite finality about those numbers.
These numbers got me to thinking: am I really getting a good return on all this reading? I decided to run some numbers.
I found the following:
1. Reading on saving a fair fraction (~10-15%) of my income probably paid off. ($811,421)
2. Reading on tax-advantaged accounts (IRA) probably paid off. ($850,740)
3. Reading on index funds paid off. ($824,283)
4. Time spent researching/trading individual stocks will likely NOT pay off.
Detailed explanations follow.
A word of caution before we start:
All of the examples below assume about a 10 percent average annual compounded return, based on historical S&P 500 data. However, as Warren Buffet mentions in his 2006 letter to shareholders, there may be reason to suspect that investors should NOT expect that average return. This has implications for the value of actively managed funds, and equity investing in general.
Now, back to the four points.
1. Reading on saving a fair fraction (~10-15%) of my income probably paid off.
This should be a no-brainer. But as evidenced by a negative savings rate in this country, it shouldn't be taken for granted.
Take for instance the example of the "latte millionaire".
Let's say you drink a latte every morning right before work (or in the afternoon). Let's also assume you spend about $5 for each latte, that you drink one a day, five days a week, fifty weeks a year. That translates into $1250 a year. Let's say you kept up your latte habit until you retired 40 years from now.
But wait, there's more! Let's also say you used the compound annual growth rate (CAGR) of 10.4 percent, including inflation, which according to Warren Buffet in his 2006 letter to shareholders is the average rate of return in the stock market. I'm going to simplify this and estimate 10 percent. For this analysis, let's also ignore inflation (roughly 3.2 percent) because it's irrelevant for the purposes of this analysis. (Also, latte prices would also inflate, meaning it wouldn't be a huge factor.)
How much would that latte money be worth in, say, 40 years?
As it turns out, it would be worth $609,815.
Note that this isn't counting taxes - if you wanted, you could probably make a pre-tax contribution into a traditional IRA instead of a post-tax contribution to your local Starbucks. Then the figures go up to $717425 for a $1470.58 pre-tax annual contribution (corresponding to a 15% income tax bracket), $813,088 ($1,666.67 pre-tax annual contribution).
A picture says a thousand words.
The morals of this story are
(1) Think twice about quitting if your company has a communal espresso machine.
(2) Compounded savings do matter.
Potential savings after 40 years: $811,421
At $10/hr (my current salary), worth it if I spent < 81,142 hours on this (= 3381 days, or 9.2 years)
2. Reading on tax-advantaged accounts
Yes, I'd say this helped me. Automatically, I potentially increased my rate of return by 15-25% by avoiding federal taxes. Including state taxes, I've probably avoided an additional 6%. Assuming I didn't spend an ungodly amount of time getting it through my thick skull that I am not morally bound to pay taxes above and beyond my strict legal requirement, then this was worthwhile.
Again, a table to illustrate. I assume I've somehow squirreled away about $4,000 pre-tax in savings.
Additional Notes:
1. Traditional IRAs tend to win if you expect to be taxed at a lower rate after retirement. Roth IRAs win if you expect to be taxed at a comparable or higher rate after retirement.
2. The 2008 contribution limits for both traditional and Roth IRAs is $5,000, not $4000. The maximum contribution limits for both traditional and Roth IRAs are indexed to inflation, and rise in $500 increments. The limits are the same, meaning you can get additional compounded earnings if you can invest after-tax the maximum amount allowed in your Roth IRA.
Potential savings: $ 850,740 (more factoring in increasing contribution limits)
At $10/hr, worth it if I spent < 85,074 hours to learn this (= 3545 days, or 9.7 years)
Note: This post does not cover other interesting tax-advantaged accounts, like 529 plans (for college), health savings accounts (for medical expenses), and of course, your company's 401(k)/403(b), nor does it cover the other nine or so IRAs that exist.
3. Reading on index funds
This, too, has paid off. According to Motley Fool, the average actively managed fund tends to underperform the S&P 500 by about 2%. How much does this matter?
The reasons behind this are many, including management fees and tax inefficiency (buying and selling securities costs money, and also generates capital gains, which are taxed. Index funds tend to have much lower turnover - a lower fraction of portfolio being bought and sold over a given time period - and therefore generate less taxable capital gains).
Potential gain in 40 years: $824,283
At $10/hr (my current salary), a good deal if I spent < 82,428 hours (= 3435 days, or 9.4 years)
4. Investing
At about this time, you might be asking yourself, What if I don't like being a passive investor? What if I think I can pick stocks, and outperform the S&P 500? What about becoming an active investor?
Obviously, it depends on how good you I am at beating the market.
If you've read Malkiel's A Random Walk Down Wall Street, or more generally subscribe to the idea that the market is efficient -- that is, prices reflect all known information. Note that this isn't quite the same thing as saying that prices will randomly fluctuate around a fair value. Nor is it to say that news doesn't affect stock prices. In fact, given what I'm reading about behavioral economics (and in particular, behavioral finance), there are a lot of features that don't jibe completely with a strong form of the efficient market hypothesis.
But all of that is somewhat academic. Let's stick with a simple question.
Let's say I spend anywhere from 10 to 500 hours a year managing my portfolio (10 corresponds to about 1 hour a month, while 500 corresponds to about 10 hours a week.) How much would I have to beat the market by in order to make it worthwhile? Let's calculate:
Wow. This means that if you are a full-time trader with a $250k portfolio, you need to outperform the S&P 500 (or your index fund of choice) by about 8 percent in order to do better than a $10/hr job. Of course, if you can do that on an annual basis, you could probably make money doing it professionally, while managing even larger amounts of money.
Key Points:
1. The decision between active and passive investing depends on portfolio size. Therefore, if you don't have much, sock it away in an index fund, or an actively managed fund that you are convinced will outperform, even after fees and tax considerations.
2. As your portfolio grows, it might be worthwhile to check in once in a while (say, annually) to readjust your portfolio. This is especially more important as you age, since you will be less able to recover from a sharp decline in the years before you retire.
3. That said, frequent checking can actually be detrimental to your portfolio performance. An interesting study by Benartzi and Thaler explores reasons for the "equity premium puzzle" - that is, why, when the stock market consistently outperforms bonds, would institutional investors, pension fund managers, and endowment managers consistently choose a roughly equal balance of stocks and bonds. (The reason, they suggest, is that these managers, like you and me, are subject to annual reviews, which skews their timeframe and their risk tolerance.) Long-term investors - know yourself, and know BEFORE you invest whether you'll be tempted to pull out of the market when faced with a 20-30% short-term decline (NOT an academic point in 2008).
4. These calculations DO NOT include trading costs and capital gains taxes. Therefore, these figures are conservative - you would have to outperform by a larger percentage than listed in order to make it worth your while.
5. If you like investing for fun, do it, but do it with money you can afford to lose, and with time you can afford to spend.
6. If money is really important to you, and you aren't born rich (with a large portfolio at your disposal), you're best off working hard in a high-earning profession. Be a doctor, a corporate lawyer, or an effective businessperson. If it's less important, but you want to be comfortable in retirement, go do what you like, but start saving now.
A final thought:
There's a hell of a lot more to life than money. In a later post I will comment on the other properties of a person's life that may make him or her happy, powerful, or otherwise important. But money is powerful in that it is a fungible, widely accepted form of power and value. It is important to know how to manage it, and what our time and comfort costs us, at least in monetary terms.
If you've read this in an hour, and follow the above advice, you may have saved about $2.5 million over your lifetime. Please consider making a donation to yours truly for providing you with this information (all of which I got for free from the Internet).
I hope to post at some point about estate taxes, another potential source of financial and personal grief.
Many of us probably wouldn't be surprised that the average American man lives about 78 years, and that the average American woman will live 83. (The weakness associated with the Y chromosome, and scientific evidence for the eventual "extinction" of men, c. 122000 CE, will appear in a later post.) But it surprised the hell out of me that this translates into 28,470 days for men, and 30,295 days for women. There's a finite finality about those numbers.
These numbers got me to thinking: am I really getting a good return on all this reading? I decided to run some numbers.
I found the following:
1. Reading on saving a fair fraction (~10-15%) of my income probably paid off. ($811,421)
2. Reading on tax-advantaged accounts (IRA) probably paid off. ($850,740)
3. Reading on index funds paid off. ($824,283)
4. Time spent researching/trading individual stocks will likely NOT pay off.
Detailed explanations follow.
A word of caution before we start:
All of the examples below assume about a 10 percent average annual compounded return, based on historical S&P 500 data. However, as Warren Buffet mentions in his 2006 letter to shareholders, there may be reason to suspect that investors should NOT expect that average return. This has implications for the value of actively managed funds, and equity investing in general.
Now, back to the four points.
1. Reading on saving a fair fraction (~10-15%) of my income probably paid off.
This should be a no-brainer. But as evidenced by a negative savings rate in this country, it shouldn't be taken for granted.
Take for instance the example of the "latte millionaire".
Let's say you drink a latte every morning right before work (or in the afternoon). Let's also assume you spend about $5 for each latte, that you drink one a day, five days a week, fifty weeks a year. That translates into $1250 a year. Let's say you kept up your latte habit until you retired 40 years from now.
But wait, there's more! Let's also say you used the compound annual growth rate (CAGR) of 10.4 percent, including inflation, which according to Warren Buffet in his 2006 letter to shareholders is the average rate of return in the stock market. I'm going to simplify this and estimate 10 percent. For this analysis, let's also ignore inflation (roughly 3.2 percent) because it's irrelevant for the purposes of this analysis. (Also, latte prices would also inflate, meaning it wouldn't be a huge factor.)
How much would that latte money be worth in, say, 40 years?
As it turns out, it would be worth $609,815.
Note that this isn't counting taxes - if you wanted, you could probably make a pre-tax contribution into a traditional IRA instead of a post-tax contribution to your local Starbucks. Then the figures go up to $717425 for a $1470.58 pre-tax annual contribution (corresponding to a 15% income tax bracket), $813,088 ($1,666.67 pre-tax annual contribution).
A picture says a thousand words.
The morals of this story are
(1) Think twice about quitting if your company has a communal espresso machine.
(2) Compounded savings do matter.
Potential savings after 40 years: $811,421
At $10/hr (my current salary), worth it if I spent < 81,142 hours on this (= 3381 days, or 9.2 years)
2. Reading on tax-advantaged accounts
Yes, I'd say this helped me. Automatically, I potentially increased my rate of return by 15-25% by avoiding federal taxes. Including state taxes, I've probably avoided an additional 6%. Assuming I didn't spend an ungodly amount of time getting it through my thick skull that I am not morally bound to pay taxes above and beyond my strict legal requirement, then this was worthwhile.
Again, a table to illustrate. I assume I've somehow squirreled away about $4,000 pre-tax in savings.
Additional Notes:
1. Traditional IRAs tend to win if you expect to be taxed at a lower rate after retirement. Roth IRAs win if you expect to be taxed at a comparable or higher rate after retirement.
2. The 2008 contribution limits for both traditional and Roth IRAs is $5,000, not $4000. The maximum contribution limits for both traditional and Roth IRAs are indexed to inflation, and rise in $500 increments. The limits are the same, meaning you can get additional compounded earnings if you can invest after-tax the maximum amount allowed in your Roth IRA.
Potential savings: $ 850,740 (more factoring in increasing contribution limits)
At $10/hr, worth it if I spent < 85,074 hours to learn this (= 3545 days, or 9.7 years)
Note: This post does not cover other interesting tax-advantaged accounts, like 529 plans (for college), health savings accounts (for medical expenses), and of course, your company's 401(k)/403(b), nor does it cover the other nine or so IRAs that exist.
3. Reading on index funds
This, too, has paid off. According to Motley Fool, the average actively managed fund tends to underperform the S&P 500 by about 2%. How much does this matter?
The reasons behind this are many, including management fees and tax inefficiency (buying and selling securities costs money, and also generates capital gains, which are taxed. Index funds tend to have much lower turnover - a lower fraction of portfolio being bought and sold over a given time period - and therefore generate less taxable capital gains).
Potential gain in 40 years: $824,283
At $10/hr (my current salary), a good deal if I spent < 82,428 hours (= 3435 days, or 9.4 years)
4. Investing
At about this time, you might be asking yourself, What if I don't like being a passive investor? What if I think I can pick stocks, and outperform the S&P 500? What about becoming an active investor?
Obviously, it depends on how good you I am at beating the market.
If you've read Malkiel's A Random Walk Down Wall Street, or more generally subscribe to the idea that the market is efficient -- that is, prices reflect all known information. Note that this isn't quite the same thing as saying that prices will randomly fluctuate around a fair value. Nor is it to say that news doesn't affect stock prices. In fact, given what I'm reading about behavioral economics (and in particular, behavioral finance), there are a lot of features that don't jibe completely with a strong form of the efficient market hypothesis.
But all of that is somewhat academic. Let's stick with a simple question.
Let's say I spend anywhere from 10 to 500 hours a year managing my portfolio (10 corresponds to about 1 hour a month, while 500 corresponds to about 10 hours a week.) How much would I have to beat the market by in order to make it worthwhile? Let's calculate:
Wow. This means that if you are a full-time trader with a $250k portfolio, you need to outperform the S&P 500 (or your index fund of choice) by about 8 percent in order to do better than a $10/hr job. Of course, if you can do that on an annual basis, you could probably make money doing it professionally, while managing even larger amounts of money.
Key Points:
1. The decision between active and passive investing depends on portfolio size. Therefore, if you don't have much, sock it away in an index fund, or an actively managed fund that you are convinced will outperform, even after fees and tax considerations.
2. As your portfolio grows, it might be worthwhile to check in once in a while (say, annually) to readjust your portfolio. This is especially more important as you age, since you will be less able to recover from a sharp decline in the years before you retire.
3. That said, frequent checking can actually be detrimental to your portfolio performance. An interesting study by Benartzi and Thaler explores reasons for the "equity premium puzzle" - that is, why, when the stock market consistently outperforms bonds, would institutional investors, pension fund managers, and endowment managers consistently choose a roughly equal balance of stocks and bonds. (The reason, they suggest, is that these managers, like you and me, are subject to annual reviews, which skews their timeframe and their risk tolerance.) Long-term investors - know yourself, and know BEFORE you invest whether you'll be tempted to pull out of the market when faced with a 20-30% short-term decline (NOT an academic point in 2008).
4. These calculations DO NOT include trading costs and capital gains taxes. Therefore, these figures are conservative - you would have to outperform by a larger percentage than listed in order to make it worth your while.
5. If you like investing for fun, do it, but do it with money you can afford to lose, and with time you can afford to spend.
6. If money is really important to you, and you aren't born rich (with a large portfolio at your disposal), you're best off working hard in a high-earning profession. Be a doctor, a corporate lawyer, or an effective businessperson. If it's less important, but you want to be comfortable in retirement, go do what you like, but start saving now.
A final thought:
There's a hell of a lot more to life than money. In a later post I will comment on the other properties of a person's life that may make him or her happy, powerful, or otherwise important. But money is powerful in that it is a fungible, widely accepted form of power and value. It is important to know how to manage it, and what our time and comfort costs us, at least in monetary terms.
If you've read this in an hour, and follow the above advice, you may have saved about $2.5 million over your lifetime. Please consider making a donation to yours truly for providing you with this information (all of which I got for free from the Internet).
I hope to post at some point about estate taxes, another potential source of financial and personal grief.
Wednesday, February 13, 2008
Cornell International Affairs Review Panel Discussion on Europe
I was fortunate enough to attend the Cornell International Affairs Review inaugural event. Peter Katzenstein and Hubert Zimmermann discussed their thoughts on regionalism in the 21st century - in particular, the European Union vis a vis the United States.
The two wise Germans both cautioned against overexuberance, though Hubert the Younger did show more enthusiasm and hope for a deeper, more proactive Europe than Peter the Elder. Both were very clear, insightful, and a joy to listen to.
As always, I was also struck by the tremendous charm and intelligence of the undergraduate population here. They are more than drunks on Wednesday nights, or vain trust fund babies snorting away their fortunes and heritage one line at a time. These individuals, of varying strengths and weaknesses, are the flower of youth, the idealized embodiment of why we fight. Yes, the men were handsome and the women breathtakingly beautiful. But more than that, there was a quiet optimism that I had forgotten - that here, in the presence of some of the greatest minds in the world, there would emerge, if not answers, the beginnings of the right questions.
It is this issue that I tried, and failed, to articulate in my question. Each new generation faces a challenge, brought about by competition and technology and biology, to redefine itself, frequently in opposition to its predecessors. How then, given demographic trends, would an Old Europe deal with the natural tensions involving changing of the guard, compounded with the fact that the youth would, increasingly, consist of immigrant Muslims from the Middle East and North Africa? Similarly, how would the United States redefine itself as the Hispanic population grows, and the American WASP ceases to become the face of Main Street?
Hubert responded by suggesting that the European Muslim population was much smaller than was often supposed - 20 million out of roughly 500 million total citizens, or on the order of 4 percent. This, by the way, is roughly the proportion of total US population that is of Asian descent - for this reason, and many others, I contend that he underplays the importance of this demographic shift, in conjunction with declining populations in absolute numbers of white Europeans.
Peter suggested that the key issue is what system would be better equipped to embrace the change and use what he calls the "positive cultural capital" of immigrants to advance in the 21st century. He argued that European identity, while secular, is culturally rooted in Christianity. The discussions concerning the expansion of Europe, and what would happen to Yugoslavia after Tito focused on Croatia being Catholic, but Serbia being Orthodox and therefore "outside" of Europe. By contrast, he felt that the United States has been, and will continue to be, more comfortable with multiculturalism than Europe, and therefore will be able to capitalize on the demographic shift more readily.
Ceteris paribus, my ultra-simple, assumption-ridden equation for economic power is output = population x productivity. American population grows because of immigration. That, our less comprehensive social safety net, lower taxes, higher productivity gains, and other socioeconomic/cultural features (real and constructed) help explain the difference in growth trajectories between the EU and US.
The CIAR Executive Vice-President made allusions to The Audacity of Hope, Barack Obama's memoir. Peter Katzenstein also suggested that Obama represented the face of America's future. I have not yet endorsed a candidate for the presidency, but do have some thoughts to share on the expectations associated with the 2008 election.
Hope is indeed audacious. For hope, as it is often branded by pretenders to the throne, is fundamentally a willingness to break with the past, to tell the older generations that their ways were at best good enough for their time, or, more typically, that they had brought ruin and destruction. It is to say to the old, "You are guilty of political and economic Alzheimer's, which struck too early for you to be wise, and too late for you to be harmless."
It is also incredibly seductive to we young, relatively powerless students who have always chafed with impatience under authority and tradition. (I highly recommend Stanley Milgram's classic text, Obedience to Authority, to anyone seeking to understand the fragility of our lauded civilization, and the recipes for both obedience and revolt. History tells us that we need not substitute one pied piper for another who plays melodies more harmonious. (This is not being quite fair to the candidates, but bear with me.) Rather, the inconvenient truth of what it is to be an adult, women and men in every sense of the word, is that we must give away some of the toys of youth, and realize that no government ever known on Earth can absolve us of our individual responsibility as human beings to do well and do good.
"When I was a child, I talked like a child, I thought like a child, I reasoned like a child. When I became a man, I put childish ways behind me." (1 Cor 13:11)
Europe struggles to define itself. America struggles with our identity and place in the world. The struggles are, in practice, led by the educated, the powerful, and the charismatic, with not much input from anyone else. I think it's fair to say that a careful analysis of both sides of the Atlantic reveal plenty of the oft-muttered "democratic deficit".
But at its best, the struggles represent the struggle of individuals in each nation/region. We define ourselves through our art, our commerce, our votes, our travel. But all of these are surface - the substance is the struggle with rough-hewn stone to build our character and multifaceted identity.
Peter made an important comment that Barack Obama represented in some ways the face of America's future. I believe he was referring specifically to the fact that he is African-American, but let me extend the thought a bit further.
On October 3, 2007, Barack Obama was hitting the stump in Iowa. As he was fielding questions on policy and the economy, one question was asked that was particularly unusual. An audience member asked, "What would you say is the most painful and character-building experience of your life that puts you in a position to make important decisions of life and death and the well being of our country?”
As reported by the NYTimes, he paused for a couple seconds, then said: "It's a terrific question."
His answer, as reported by the NYTimes:
“I would say the fact that I grew up without a father in the home. What that meant was that I had to learn very early on to figure out what was important and what wasn’t, and exercise my own judgment and in some ways to raise myself.
My mother was wonderful and was a foundation of love for me, but as a young man growing up, I didn’t have a lot of role models and I made a lot of mistakes, but I learned to figure out that there are certain values that were important to me that I had to be true to.
Nobody was going to force me to be honest. Nobody was going to force me to work hard. Nobody was going to force me to have drive and ambition. Nobody was going to force me to have empathy for other people. But if I really thought those values were important, I had to live them out.
That’s why it’s so important for me now, both as a United States senator and as a president candidate, but also as a father and a husband to wake up every morning and ask myself, am I living up to those values that I say are important? Because if I’m not, then I shouldn’t be president.”
Europe will not build itself. Nor will America. Nor will China emerge democratic and free without individual action, individual responsibility, and individual character. It matters not that we had no father to guide us. We have living examples in Barack Obama and, less visibly, Harry Reid, of men who recognized the value and necessity for us to transcend what we are given - in this case, the fathers we have - , and become stronger, more just, more wise, though the world tells us to go home, give up, and embrace a somnambulant stupor that is a half-life.
Progress, and civilization itself, depends upon the desire and ability to do better. For this effort, we rightly look toward Peter and Hubert for guidance. For the hands that will build this new world, we must look to our own, and our peers in every walk of life.
On the eve of Valentine's Day, I can say that no woman ever broke my heart as badly as America has. But hearts will mend, through many stitches, softer words, and time.
Better get started.
The two wise Germans both cautioned against overexuberance, though Hubert the Younger did show more enthusiasm and hope for a deeper, more proactive Europe than Peter the Elder. Both were very clear, insightful, and a joy to listen to.
As always, I was also struck by the tremendous charm and intelligence of the undergraduate population here. They are more than drunks on Wednesday nights, or vain trust fund babies snorting away their fortunes and heritage one line at a time. These individuals, of varying strengths and weaknesses, are the flower of youth, the idealized embodiment of why we fight. Yes, the men were handsome and the women breathtakingly beautiful. But more than that, there was a quiet optimism that I had forgotten - that here, in the presence of some of the greatest minds in the world, there would emerge, if not answers, the beginnings of the right questions.
It is this issue that I tried, and failed, to articulate in my question. Each new generation faces a challenge, brought about by competition and technology and biology, to redefine itself, frequently in opposition to its predecessors. How then, given demographic trends, would an Old Europe deal with the natural tensions involving changing of the guard, compounded with the fact that the youth would, increasingly, consist of immigrant Muslims from the Middle East and North Africa? Similarly, how would the United States redefine itself as the Hispanic population grows, and the American WASP ceases to become the face of Main Street?
Hubert responded by suggesting that the European Muslim population was much smaller than was often supposed - 20 million out of roughly 500 million total citizens, or on the order of 4 percent. This, by the way, is roughly the proportion of total US population that is of Asian descent - for this reason, and many others, I contend that he underplays the importance of this demographic shift, in conjunction with declining populations in absolute numbers of white Europeans.
Peter suggested that the key issue is what system would be better equipped to embrace the change and use what he calls the "positive cultural capital" of immigrants to advance in the 21st century. He argued that European identity, while secular, is culturally rooted in Christianity. The discussions concerning the expansion of Europe, and what would happen to Yugoslavia after Tito focused on Croatia being Catholic, but Serbia being Orthodox and therefore "outside" of Europe. By contrast, he felt that the United States has been, and will continue to be, more comfortable with multiculturalism than Europe, and therefore will be able to capitalize on the demographic shift more readily.
Ceteris paribus, my ultra-simple, assumption-ridden equation for economic power is output = population x productivity. American population grows because of immigration. That, our less comprehensive social safety net, lower taxes, higher productivity gains, and other socioeconomic/cultural features (real and constructed) help explain the difference in growth trajectories between the EU and US.
The CIAR Executive Vice-President made allusions to The Audacity of Hope, Barack Obama's memoir. Peter Katzenstein also suggested that Obama represented the face of America's future. I have not yet endorsed a candidate for the presidency, but do have some thoughts to share on the expectations associated with the 2008 election.
Hope is indeed audacious. For hope, as it is often branded by pretenders to the throne, is fundamentally a willingness to break with the past, to tell the older generations that their ways were at best good enough for their time, or, more typically, that they had brought ruin and destruction. It is to say to the old, "You are guilty of political and economic Alzheimer's, which struck too early for you to be wise, and too late for you to be harmless."
It is also incredibly seductive to we young, relatively powerless students who have always chafed with impatience under authority and tradition. (I highly recommend Stanley Milgram's classic text, Obedience to Authority, to anyone seeking to understand the fragility of our lauded civilization, and the recipes for both obedience and revolt. History tells us that we need not substitute one pied piper for another who plays melodies more harmonious. (This is not being quite fair to the candidates, but bear with me.) Rather, the inconvenient truth of what it is to be an adult, women and men in every sense of the word, is that we must give away some of the toys of youth, and realize that no government ever known on Earth can absolve us of our individual responsibility as human beings to do well and do good.
"When I was a child, I talked like a child, I thought like a child, I reasoned like a child. When I became a man, I put childish ways behind me." (1 Cor 13:11)
Europe struggles to define itself. America struggles with our identity and place in the world. The struggles are, in practice, led by the educated, the powerful, and the charismatic, with not much input from anyone else. I think it's fair to say that a careful analysis of both sides of the Atlantic reveal plenty of the oft-muttered "democratic deficit".
But at its best, the struggles represent the struggle of individuals in each nation/region. We define ourselves through our art, our commerce, our votes, our travel. But all of these are surface - the substance is the struggle with rough-hewn stone to build our character and multifaceted identity.
Peter made an important comment that Barack Obama represented in some ways the face of America's future. I believe he was referring specifically to the fact that he is African-American, but let me extend the thought a bit further.
On October 3, 2007, Barack Obama was hitting the stump in Iowa. As he was fielding questions on policy and the economy, one question was asked that was particularly unusual. An audience member asked, "What would you say is the most painful and character-building experience of your life that puts you in a position to make important decisions of life and death and the well being of our country?”
As reported by the NYTimes, he paused for a couple seconds, then said: "It's a terrific question."
His answer, as reported by the NYTimes:
“I would say the fact that I grew up without a father in the home. What that meant was that I had to learn very early on to figure out what was important and what wasn’t, and exercise my own judgment and in some ways to raise myself.
My mother was wonderful and was a foundation of love for me, but as a young man growing up, I didn’t have a lot of role models and I made a lot of mistakes, but I learned to figure out that there are certain values that were important to me that I had to be true to.
Nobody was going to force me to be honest. Nobody was going to force me to work hard. Nobody was going to force me to have drive and ambition. Nobody was going to force me to have empathy for other people. But if I really thought those values were important, I had to live them out.
That’s why it’s so important for me now, both as a United States senator and as a president candidate, but also as a father and a husband to wake up every morning and ask myself, am I living up to those values that I say are important? Because if I’m not, then I shouldn’t be president.”
Europe will not build itself. Nor will America. Nor will China emerge democratic and free without individual action, individual responsibility, and individual character. It matters not that we had no father to guide us. We have living examples in Barack Obama and, less visibly, Harry Reid, of men who recognized the value and necessity for us to transcend what we are given - in this case, the fathers we have - , and become stronger, more just, more wise, though the world tells us to go home, give up, and embrace a somnambulant stupor that is a half-life.
Progress, and civilization itself, depends upon the desire and ability to do better. For this effort, we rightly look toward Peter and Hubert for guidance. For the hands that will build this new world, we must look to our own, and our peers in every walk of life.
On the eve of Valentine's Day, I can say that no woman ever broke my heart as badly as America has. But hearts will mend, through many stitches, softer words, and time.
Better get started.
The Perfect Woman
There's a Sufi story about a man who sought the perfect woman. Every woman he met fell short of perfection, until finally he met the one paragon, a truly perfect woman. He bragged to his friend about how wonderful she was and how they would live happily ever after together. But the next time his friend saw him, the man was subdued and very quiet. "What happened?" his friend asked. "Oh, but it is very sad," the man said. "She wanted the perfect man."
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