The Year in Review

By Dave Barry Sunday, December 28, 2008; W10

In case you haven’t read it already, you should. It truly is the best summary of 2008.

Have a happy new year!

Needy Schools Turn to Parents For Funding – WSJ.com

A survey by California PTA, a statewide group, of about 500 PTA presidents in the state showed that nearly two-thirds of the groups have been asked by schools this year to pitch in more money for basic supplies and programs, from pencils and books to arts programs.

“One of the things we’ve always said to our members is, ‘Your purpose is not to be a cash cow’” to cover regular school expenses, says Jan Harp Domene, president of the National Parent Teacher Association, an umbrella organization. “But we know they are playing a critical part in making sure children still have services that were once part of the budget, from music programs to adequate custodial supplies. These are not frills.”

This is probably one of the biggest surprises I’ve encountered since moving to California – basically all Californian schools are needy. Frankly, I’m quite surprised at how much parents have to donate to schools, even in Cupertino and Palo Alto (some would argue that it is because of the amount that parents donate, that the schools are among the best in the Bay Area [though some get confused and note that they are the best in the nation - which is not quite the case]).

But then again, perhaps I have skewed expectations. Where I come from, 25%-32% of teachers make $100k+. In Great Neck, where I went to school, the median salary is $85k. The NYTimes had an article on this phenomenon in 2005. In Mountain View, it’s possible to make $100k+ ($118,684 to be precise), but just eyeballing the salary guide it seems rather challenging – not to mention this is for teaching high school. This is especially ironic considering the fact that houses apparently run for $382 per square foot in Great Neck, versus $622 in Mountain View. Property tax policies, and the priorities of the citizens are the only explanation for this.

Where I came from in Long Island, the citizens generally supposed the school district budgets and the tax burden was shared equally. On the other hand, Proposition 13 has resulted in oddities like this:

8XX Arroyo Road, Los Altos, CA

2008 Property Tax: $1,586

8YY Arroyo Road, Los Altos, CA (next door to 8xx)

2008 Property Tax: $20,166

In California’s future, I see an ever increasing burden on the cost of public education placed on families who have children. Effectively, California will have three tiers of schools: private schools, public schools which are funded partially like private schools, and very poor public schools in very poor communities. Parents who move to California and have children will be expected to pay for their children’s education – unlike the community based approach in the years before. And that’s just K-12 – a recent interview I heard with the Chancellor of Berkeley pointed out that public funding for the UCs is also at an all time low.

I suspect that won’t help this problem very much:

California is suffering a “brain drain,” they said, losing educated residents to other states. With expensive housing making it difficult to attract and retained skilled workers, the state should not rely on college graduates from other places, they said.

It “is extremely unlikely that the projected need for highly skilled workers will be met mainly through the increased migration of college-educated workers,” wrote researchers Hans Johnson and Deborah Reed. “However, increases in college participation and graduation among California’s residents could help meet these future demands.”

The researchers found that California would need to attract nearly 160,000 college graduates from other states and countries by 2025 to meet economic demands.

One of my colleagues in Redmond once observed about California: “What happened to children being the future?”

I’m not quite sure.

Recently I read these two pieces in the NYTimes. I find the contrast of action to be rather remarkable.

First, some key snippets from “How India Avoided a Crisis”:

Unlike Alan Greenspan, who didn’t believe it was his job to even point out bubbles, much less try to deflate them, Mr. Reddy saw his job as making sure Indian banks did not get too caught up in the bubble mentality. About two years ago, he started sensing that real estate, in particular, had entered bubble territory. One of the first moves he made was to ban the use of bank loans for the purchase of raw land, which was skyrocketing. Only when the developer was about to commence building could the bank get involved — and then only to make construction loans. (Guess who wound up financing the land purchases? United States private equity and hedge funds, of course!)

Then, as securitizations and derivatives gained increasing prominence in the world’s financial system, the Reserve Bank of India sharply curtailed their use in the country. When Mr. Reddy saw American banks setting up off-balance-sheet vehicles to hide debt, he essentially banned them in India. As a result, banks in India wound up holding onto the loans they made to customers. On the one hand, this meant they made fewer loans than their American counterparts because they couldn’t sell off the loans to Wall Street in securitizations. On the other hand, it meant they still had the incentive — as American banks did not — to see those loans paid back.

Seeing inflation on the horizon, Mr. Reddy pushed interest rates up to more than 20 percent, which of course dampened the housing frenzy. He increased risk weightings on commercial buildings and shopping mall construction, doubling the amount of capital banks were required to hold in reserve in case things went awry. He made banks put aside extra capital for every loan they made. In effect, Mr. Reddy was creating liquidity even before there was a global liquidity crisis.

Did India’s bankers stand up to applaud Mr. Reddy as he was making these moves? Of course not. They were naturally furious, just as American bankers would have been if Mr. Greenspan had been more active. Their regulator was holding them back, constraining their growth! Mr. Parekh told me that while he had been saying for some time that Indian real estate was in bubble territory, he was still unhappy with the rules imposed by Mr. Reddy. “We were critical of the central bank,” he said. “We thought these were harsh measures.”

“For a while we were wondering if we were missing out on something,” said Ms. Kochhar of Icici. Banks in the United States seemed to have come up with some magical new formula for making money: make loans that required no down payment and little in the way of verification — and post instant, short-term, profits.

As Luis Miranda, who runs a private equity firm devoted to developing India’s infrastructure, put it: “We kept wondering if they had figured out something that we were too dense to figure out. It looked like they were smart and we were stupid.” Instead, India was the smart one, and we were the stupid ones.

That must’ve been a hard call, but that’s what leaders are supposed to do – make the difficult decisions so as to lead your people in the right direction. You can’t change the world around you without changing yourself first.

And now, some key snippets from “Chinese Savings Helped Inflate American Bubble”:

WASHINGTON — In March 2005, a low-key Princeton economist who had become a Federal Reserve governor coined a novel theory to explain the growing tendency of Americans to borrow from foreigners, particularly the Chinese, to finance their heavy spending.

The problem, he said, was not that Americans spend too much, but that foreigners save too much. The Chinese have piled up so much excess savings that they lend money to the United States at low rates, underwriting American consumption.

…

But American officials eased the pressure. They decided to put more emphasis on urging Chinese consumers to spend more of their savings, which they hoped would eventually bring the two economies into better balance. On a tour of China, John W. Snow, the Treasury secretary at the time, even urged the Chinese to start using credit cards.

This plan does not seem to be working so well.

steve clayton: geek in disguise : Vista: poor man’s NetStumbler
Nice tip from Josh on doing a bit of war driving with Vista. Go to a command prompt, type netsh and then

wlan show networks mode=bssid

I found this helpful in improving the performance of my wireless network.

It looks like this particular gas pump at Shell in San Carlos wasn’t feeling so well. At least it wasn’t a BSOD like I saw on one of those giant LED panels on 880 last Friday!

Wow. I am exhausted. On Saturday, I wrapped up my first semester here at the Evening and Weekend program at the Haas School of Business at the University of California, Berkeley. Between work, school, and a flurry of personal life stuff that’s been going on, these last few weeks have been brutal.

One day I calculated that this program was costing me about $2.23 per minute of class time. However, in reality, I’ve spent closer to about 18 hours total per week on class related things, so perhaps the real cost is about $1 per minute. Either way: is it worth it? Absolutely.

To date, I’ve taken:

• Economics for Business Decision Making [aka Microeconomics]
• Organizational Behavior
• Financial Reporting [aka Financial Accounting]
• Marketing Organization and Management

Already I’ve used some of the concepts I’ve learned in class, at work – hence, the benefit of doing this program part time. I was skeptical at first, but it really does happen.

Some other observations:

• I significantly underestimated the amount of time necessary for homework and group projects.
• Gas is cheaper in Berkeley.
• I’m very glad I picked the Saturday option – though this means I don’t really have much in the way of weekends, I spend less time commuting.
• It’s very refreshing to talk about something completely different other than software, and other work-related things. Very refreshing. Sometimes it feels like I’m living two lives!
• I hope to attend more extra-curricular events next year. There are constantly so many interesting talks going on, especially with this current financial crisis. But getting to Berkeley by 6pm is sort of hard!
• 238 between 580 and 880 is scary due to construction and very narrow lanes. A tractor trailer big rig almost ended my career last Friday.
• I’m glad I work for an employer that allows for a more flexible work schedule.
• I’ve met a lot of great friends through this program. And they’re not all engineers!

Well… now a 6 week break until the Challenging Semester begins. The classes are very quantitative heavy. The fact that there’s a review class for one of the classes next semester is a sign – so has the flurry of e-mails explaining the tutoring policy.

A friend of mine asked me: “How do you manage to go to school, go to work, and stay married?”. My answer: “They’re all graded on a curve.”

I still find it hard to say “Go bears!” with zeal though… this has been quite the change from being at Hopkins… working on it!