Tuesday, December 16, 2008

The end of capitalism

Dilbert Blog is probably the best blog I know. Funny, smart, surprising, honest and to the point. It is written by a non-economist with great economic intuition. Adam Scotts' investment advice is based on the idea that you (or nobody else in the long term) cannot beat the market, which is quite well understood by most economists and confirmed by his experience with his own management of money, when compared to Goldman Sachs.

The last post is mostly wrong, however. He claims that we will soon see the end of capitalism because

Capitalism was conceived before the Internet, and before the gears of commerce became computerized. The system could absorb a lot of con artists because they didn't have the ability to steal fast enough to cripple the system. As you know, that has changed. Crooks in expensive suits now have the ability to swindle trillions, collectively, thanks to the efficiency of the system. And idiots in expensive suits can do even more damage.

This is mostly true but the result is not the need to abolish capitalism. It will encourage people (most people) to be more careful. At least I will try. Most smart people will. And the governments should stop caring about stupid people. Not because they don't deserve it but because it encourages stupidity.

Further comments suggests lack of understanding what the money is:

The balance of power has swung to the crooks and the market manipulators. Even if we could regulate away these problems, it's already too late. There isn't enough money left to support the planet under the current social systems, at least not when the boomers start retiring and unemployment starts climbing.

Whether or not the capitalism can support current social systems does not depend on how much money are being printed out but how well it can motivate people to work and how efficient the production can be. The biggest danger then comes from the (stupid)restrictions on trade. The people possess the technology to feed ourselves and to sustain and well increase our average standards of living (even if for some part of the society the standards of living might go down). The question is whether there will be sufficient incentives to use that technology, to keep looking for more efficient ways of producing stuff and to sell it.


But the biggest change could be in what sort of consumption is allowed under the new economy. Most of our problems were caused by people who couldn't control their own spending. Banks could tighten their credit requirements but that won't be enough to stop the spending junkies from depleting their own nest eggs. So you might see some forced savings rules in the new economy.

No, the problem was not caused by people borrowing money they could not afford to pay back. It was caused by people willing to lend them and even more by people who bought such debt or were willing to bet that it was a good debt. Some stupid people will always try to spend more than they can afford to. The only thing the government needs to do to make their life miserable (thought not unbearable), not support them or save them to discourage such behavior.

The interesting question is whether anything can be done with the herding behavior (causing bubbles and their bursting) but most likely not.

Friday, November 28, 2008


So our great president VK wants to leave the party ODS (which he founded more than 10 years ago). Well, when he does that, I will join, or at least think seriously about doing so. Not that this is going to happen anytime soon. He is hoping that the party will consider his threat credible. I don't consider it a threat, it's a great opportunity. Not just for the party, for this country, too.

Monday, November 10, 2008

Tmou X.

The dream finally came true. This weekend I was a member of the winning team (Prahory) in the game (competition) Tmou. The game starts at one place, this time Velodrom. All teams (450teams, 2000 people) receive first code (cypher), the solution of which guides them to the second level, where the next cypher is hidden. This goes on for about 20 hours, during night and cold weather. Tmou is one of many games like this in Czech Republic-probably the oldest one here and the most famous.
We were leading since the third level, even though one team was able to catch up at the last but one level, so we had to run for it.
Apart from happiness, I feel certain emptiness. Winning Tmou was an important goal, and it was really hard to achieve it for a long time. Yet, there is nothing left now. I don't feel like going to another game any time soon. I'm sure other teams can appreciate this. Our team won last year as well, even though I was in San Diego and could not participate.
Our team was created about 6 years ago and made a significant progress since them. Previously, we solved the cyphers in the style "One person, one cypher"-most cyphers were broken by a clearly identifiable individual. Currently, we cooperate so well that we cannot tell who broke any particular code. We talk about the cypher, everybody mentions curious facts and ideas. In a few minutes the procedure (the idea) is clear and what remains is somewhat boring part of actually doing the work that may take an hour or so. While this sounds great (and it is, if you want to win the game), it does not feel so. There is no particular moment to remember, no clear point in the game in which you were helpful/crucial/indispensable.

And the big question at the end is: "What do I want to achieve in my life now?"

Sunday, October 26, 2008

The extent of the crisis

This does not seem like a reliable information but if true, it is unbelievable:

Europe was especially hard hit as previously placed truck orders were canceled. After Volvo cleaned out those orders from its books, the net order intake in the third quarter was a mere 115 trucks, compared to nearly 42,000 trucks in the same period last year.

If that keeps going on, we will live through some interesting times.

Wolrd War III

Imagine that a major war (affecting lives of at least 1 billion of people) happens in the next twenty to fifty years. Which country would you think will start it?

I would bet on Russia and I consider such war quite likely. Especially if the current crisis worsens, the price of oil decreases even further (who would guess that the price of oil will more than halve in a year?), the economic hardship will encourage or force the couple Medvedev Putin to use nationalism deeply rooted in the Russian culture. Russia has (dubious) claims for land of many countries (Georgia is one of them, but there are many more), it has large number of people outside it borders. And it is quite easy to argue that they need protection. Exactly the same way Hitler justified taking parts of Czechoslovakia. Russia has potential conflict with China but it may be equally likely to go west, to re-establish its presence (and former glory) in Central and Eastern Europe.

The big question is whether one can trust NATO and EU structures to stand united behind its members. I would not trust Sarkozy (or any French) a bit. But it was England who betrayed Czechs before WWII. And it may be hard to rely on Americans, unless they have a radar here. So let's build it quickly...

Our president

Our dearest president is an idiot. "His" party lost the elections for finally doing something (in contrast to the time when he was a prime minister-he talked about reforms but haven't done most of them), most notably for their reform of health care system. Some people even mention very unpopular, yet very necessary, end of rent control.
Our president recently said: "If you would ask me if I remember any reform done in the past few years, I wouldn't be able to name any". Well, except the one or two that lost the ODS (his) party the elections, obviously. But those do not count, right?

Well, our president is just using this opportunity to get even with a guy he did not like from the very beginning, who took the position of head of the party from him and whom he tried to "kill" right after he (Topolanek) was elected to lead the party.

I would not bother to write about this, except that the government after 20 years of total failures, finally seems to understand what needs to be done. The quality of their work is not at what most western democracies are used to, but it moved from East to West in the past two years more than ever before. It would be a pity to see such government fail.

Monday, October 6, 2008

Czech Health Care System in Numbers

According to the recent statistics, socialized health care system in Czech Republic spent 17493 CZK on curing the patients and 74 CZK on preventing the diseases, per insured, for the last year.

No, there (probably) is no error in the magnitude of these numbers...

Interesting Times

Terry Pratchett has a book called "Interesting Times", in which is this lovely quote

" They have a curse…

They say…

May you live in INTERESTING TIMES "

If you had no idea what that means, you should right now. Or you better check the news quickly.

Monday, September 15, 2008

How to win the elections

Not much time for blogging but this one is worth linking to:

My favourite blogger and sci-fi writer says:

I’m not suggesting the Obama campaign is comprised of innocent does who would (gasp!) never stretch a truth for political gain. I am suggesting the McCain campaign is the first campaign, certainly in modern political history, that has decided that truth is entirely optional, and isn’t afraid to come right out and say it. And it’s working — and might well work all the way to the steps of the White House.

If it does, that will be an interesting political lesson for the GOP. It will be confirmation of the actual “Bush Doctrine” of “do and say whatever the hell you want, because no one has the will to stop you.”

The whole article is worth reading.

Thursday, August 28, 2008

Benefits from alumni? Think again

Some faculty members or school administrators seem to think that it is enough to produce plenty of graduates to generate income and other benefits from alumni. This logic is flawed - you surely need alumni but they have to be happy to be from your school.
I can serve as an useful example. I'm pretty good student, I will most likely finish among the first in my cohort. My research, while not the best in the world, is well above average. I was even stupid enough to get funding for my mobility - something everyone is supposed to try to do yet nobody does. Even though I have encountered plenty of stupidity among the huge crowds of employees of CERGE-EI prior to my departure, it cannot be even compared what happened when I came back.
The school did not manage to get my entry card working, even after 6 weeks since I came back. I had a prior written agreement over my status for the next year. After I fulfilled my obligations, some people changed our agreement to something that had already cost me about $1500. When I came to a meeting with infamous Mr. Nemec to "negotiate", he told me "This is how it will be". I being discriminated by not getting a stipend when everybody else does - for reasons manufactured by "them". I will not continue, even though I could. It is a long list.
The point of this story is that when your graduates leave you angry and pissed off, they won't be very helpful for the school. I have graduated from Masaryk University and I have much, much better memories for that time. I will be glad to help them (In fact, I already am) whenever they ask. I will not for CERGE-EI. I hope this post does not prevent me from getting my degree, but as you can clearly see I am angry.

Wednesday, August 13, 2008

Back in Prague

I'm back in Prague, enjoying certain things (like parks, architecture, beer and food, rather few cars), hating others (quality of services, behavior of people to each other, reckless drivers).

I was thinking about a post evaluating my overall experience, maybe even a comparison of the cultures. I don't think I can do that. I just want to say this: You need to go there and return back to make a proper comparison.

I will note one other thing. The distances here are incredibly smaller. If you ride a car for 30 minutes outside of the city, you get somewhere. In the USA, it does not even count as a trip. Within such distance, there are literally hundreds of places worth visiting around Prague (not to mention the hundred within!). There are maybe two in San Diego, if you live in the right spot. It takes 45 minutes even to get to the San Diego Zoo.

Take Climate Change Seriously

There is one thing most of us can do to slow down or stop global warming. It comes for free - it even saves you some money. It increases your welfare or at least economic well-being. It gives you more free time, better social life.

Yes, I'm talking about NOT having babies.

The subconscious urge to spread your genetic material makes you have sex, not to have babies, and you can do that safely and comfortably these days. And you should find a restraint on the conscious level, because you now know you will save plenty of resources and reduce your CO2 (etc.) emissions.

Defend Yourself

How would you defend yourself if you were a small country, say Georgia, against somebody like, I don't know, Russia?

Obviously, raw military power is useless. It is not feasible to build regular army strong enough to defend your country against opponent that much bigger. One would hope that NATO and such organizations could help. But our own pre-WWII experience suggests otherwise.

Other means are difficult to obtain, and if your country signed certain international contracts, also illegal. I'm talking about nuclear, chemical and biological weapons. Such weapons won't help you in a local fight, they won't drive insurgents away but may deter your opponent from a full scale invasion.

As a legal and feasible method I see only special form of military training. You need to teach your people how to use guns, grenades, rocket launchers and explosive in a partisan war. Basically, you need to teach them how to become terrorists. If you opponent comes, your people will be learning it anyway - like Czechs (few of them) did when Germans came. Or even fewer when Russians did.

Let's hope it's not what Georgians are doing these days. It's kind of hard to prevent the people to use this partisan knowledge later in other causes. Like defending Islam, for example.

Anyway, all my support goes to Georgia. I hope their suffering will help others to remember that Russians are not a civilized nation and it seems unlikely they will ever be. Unfortunately, that does not mean that anyone who can do anything will do something. So what, Russians are conquering one small nation, right?

Well, one at a time. That takes Ukraine and Slovakia to get to Czech Republic.

Tuesday, July 8, 2008

Game over

I'm leaving for Prague next week. My stay here is basically over and so is probably this blog.

4th of July

I celebrated the 4th of July at the beach. Swimming just a little deeper allowed me to see a bunch of dauphins very closely. Being closer than 50 meters from them was really cool.
Unfortunately, after I came back to the beach to my stuff, I did not find my new sandals. I hope they serve the new owners well.

Wednesday, June 18, 2008

Happy days

I'm happy to inform you that this information came by mail

Your plans to leave the U.S. on the [July 16] have been approved...

Great! So I'm actually allowed to go home. I should not forget to apply for permission to breathe when I get there.

Graduate Education

So graduate education makes you stupid. I think this is sadly true for everybody. Except for me, of course.

Thursday, June 12, 2008

Question of the day

Q:How stupid you have to be (even for an American) to watch Fox News?

A: Obviously a lot:

Back in the day – you know, when presidential candidates were respectably white – news organizations called potential first ladies “wives.” But now that black folks are running, we can get all funky fresh with the lingo, yo. So it’s basically fine for Fox News to use “Baby Mama” for Michelle Obama, slang that implies a married 44-year-old Princeton-educated lawyer is, to use an Urban Dictionary definition of the term, “some chick you knocked up on accident during a fling who you can’t stand but you have to tolerate cuz she got your baby now.” Because the Obamas are black! And the blacks, they’re all relaxed about that shit, yo. Word up. And anyway, as the caption clearly indicates, it’s not Fox News that’s calling Michelle Obama “Baby Mama,” it’s outraged liberals. Fox News is just telling you what those outraged liberals are saying. They didn’t want to use the term “Baby Mama.” But clearly they had no choice.

This is John Scalzi at Whatever.

Just so that you know. This shit happens here every single day. And Fox News has a motto: "Balanced News" (and variations thereof). Sometimes, I feel like I'm going to spend a long time in the bathroom after just seconds of these "balanced" news.

Tuesday, June 10, 2008

Why revenue sharing failed

It was a nice experiment. Apple sells the phones for almost full price and gets a share of revenues from those who subscribe to AT&T. The AT&T did not suffer badly - it pays only for those who actually use its services. At first, it looks pretty good, especially for Apple. It is a nice example of market segmentation (discrimination). If warranty and safety is valuable (or service provided by AT&T does not seem much worse than others), you pay full price. If you do, you still pay for the phone. Apple gets less, but more than if you would not buy at all.
What did not work well is that more people choose to unlock and jailbreak than anybody expected. In the profit equation, revenue was probably high enough, but the share of people delivering this revenue was too small.

Monday, June 9, 2008

Too good to be true

When something sounds too good to be true, it usually is. New IPhone, 8GB, GPS, 3G, whatever, for $199? This beats every phone in Czech Republic on quality or price and most phones on both. Sure, if you HAVE to subscribe to AT&T for $70/month, total cost to ownership are around $1900 (I pay basically zero for voice), which is way out of my league.

Tuesday, June 3, 2008

Time Inconsistency

There are things I really don't like doing, yet I know I should. And since I know I should, I schedule them well in advance in a way that it is basically impossible to call them off. I don't really mind - it is far away, so it does not seem to be that bad. But as it is approaching, I realize how unhappy I'm doing that particular stuff. Yet, I cannot call it off, so I keep thinking "I won't do it next time". But I know I will...

Friday, May 30, 2008

Americans are babies

Or to be more precise, some Americans have mentality of teenagers. Most flagrant symptom is not being able to deal with things that you need to be dealt with.
Let me give you an example. Mr. W. is responsible for doing thing A. This thing needs to be done so that people XYZ can do thing B, which benefits Mr.W. and that he asked for. They are ready and waiting for Mr. W., yet he says "I'm not willing to deal with it right now". Or even worse "I don't feel like dealing with A right now". So he leaves other people waiting, which costs them time and money.
Other examples are credit card debts ("I don't want to think about it"), mortgage payments and so on. I have seen people to go on shopping spree after they lost their job and thus a significant amount of money and expected revenues.
Of course, you can ignore problems for a while. But they come back and then they are much bigger. In the meantime, the responsible people around you suffer...

Wednesday, May 28, 2008

Worst ever

I was not inclined to talk about Vista without first hand experience. Now I have it, but I'm not able to talk. Basically, it is the most annoying, worst designed operating system ever. Probably even Windows 3.1 were better.
I'm not sure I'm able to go through many details - the pain is too recent. But let me say this: if you can turn something on, you should be able to turn it off, if you provide "Help" button, it would be great if it actually led to the Help. If you say that by pressing X+Y something happens, then it should. And why the hell do you keep asking the programs MADE by Microsoft, on which I just clicked? If you think I might judged that they should not be run, maybe you need to give me some information useful to make that decision!
I could go like this forever, but I won't. I won't also be buying one any time soon...

Tuesday, May 27, 2008

Working Papers at CERGE-EI

There is a plenty of rules for submission and evaluation of Working Papers at CERGE-EI. Most of them attempt to smooth the process and limit its length. It is all governed by one person I will not name, because this person changes and for another reason that will be obvious in a minute.
This person receives the paper, selects the referee from CERGE-EI faculty, usually based on suggestions provided by the author, sends them the paper, collects the reviews etc. The referees are supposed to be done in 3 weeks. There are no limits on how fast they need to be chosen. So check this:

This is a submission email:

Date: Wed, 23 Apr 2008 13:33:33 -0700

And this is an email send by that person to the referees:
Tue, 06 May 2008 12:51:54 +0200

Yes, it took him 2 weeks to send a 3 line email. Given our history, I guess it is personal...

Monday, May 26, 2008


I sent my third paper to my dissertation committee and I'm await comments. Even though I'm probably still far away from finishing the dissertation, I experience a strange feeling of emptiness. I surely have what to do (some magazines and fiction books to read), or I might even work, but I feel strange anyway. I actually did start looking for fourth topic, but I was google old idea solved in a few seconds. But I also don't feel like I need to - I'm not looking for a job at a university, and I don't even plan to continue the research. It's probably time to polish existing texts.
P.S. I'm required to have three papers to finish my dissertation. Thus, I'm quite close, unless my committee rejects the paper.
After two weeks of waiting, first comments came. They are positive. Two more to go...

Ice Cream

I love Ice Cream (who doesn't?) and America is the country of Ice Cream. But coming from country, where finding chocolate ice cream means you have a lucky day, I'm having troubles. On average supermarket shelf in San Diego, there is about 25 different flavors of Ice Cream, usually from four or five different producers (brands). But, finding the simple chocolate ice cream is not easy. It does not exists. Oh, there are flavors that contain chocolate (chocolate mint, double chocolate cookies fudge, or whatever - I mostly have no idea what the name means), but no simple chocolate.
In large stores, you can find "Best of both", which contains both Vanilla and Chocolate. This is a good substitute, if you like vanilla.
The point of the story is that too much of horizontal differentiation is, uhmm, too much :-)

Thursday, May 15, 2008

Future of the newspapers

Many people seems to be wondering how the future of newspapers will look like. I cannot claim I can foresee it, but some trends seem obvious.
There will be some consolidation. Not necessarily reduction in the number of brands, but possibly in the contents. It seems easy to imagine that New York Times will move to a seller of coverage of general (world-wide, nation-wide) news. Local newspaper will buy these stories and add their local bit - something they know way better than NYT (think San Diego Tribune).
There are probably more things to be said, but maybe later...

Tuesday, May 13, 2008

National Parks

There are plenty of things that simply suck in the US, but National Parks make it up. For a comprehensive set of pictures from our trip, check Katarina's Picasa page. For a special selection, check mine.
The sky was like I have never seen. Grand Canyon is simply unbelievable, and so are Sequoia trees. And Yosemite valley is just beautiful.

Different style

I have overdrawn my account (not completely my fault), for which a significant fine was imposed. One email was enough to get a refund.

Compared to Czech Republic, I'm happy for this, a little different style.

Law and Order

I have always preferred Law and Order to CSI because of more realistic stories and script. However, after watching season finale of SVU, I can't stop thinking how lame the script is. Imagine a no-lawyer self-defending himself who questions basics of standard techniques police uses or a cop, who goes to get his partner who was kidnapped and DOES NOT TELL anyone. More stupidities keep coming, as the story unravels. I guess 18 years is 18 years. But it seems more acceptable that Maggie did not age during that same time.

Sunday, April 27, 2008

Louis Vuitton

I always consider LV as a firm which existence I have to accept, but will never be really happy about. I could not articulate why, but this is one of the good reasons:

An artist named Nadia Plesner recently put together a project to try to raise money for the victims of genocide in Darfur. As part of the campaign, she created a t-shirt with a drawn image of a Darfur victim "pimped" out to look like Paris Hilton -- that is, carrying a designer handbag and a small dressed up dog. The entire profits from the t-shirts are going to help the victims. The handbag drawn in the image is not specifically a Louis Vuitton bag, but the design firm seems to have gone ballistic, claiming all sorts of intellectual property rights it simply does not possess. First, it sent a (admittedly friendly) cease-and-desist, which Plesner wrote about on the site, while responding and telling the company that she would not take down the t-shirt or the image. In response, LV went from friendly to nasty. It sued, demanding $7,500 for each day she keeps selling the product, $7,500 for each day she displays its original cease-and-desist letter and (my favorite) $7,500 for each day she mentions the name "Louis Vuitton" on her website.

Wednesday, April 23, 2008

Czech Academy of Sciences

... is famous again. But not for what you would expect:

But the IFPI says that the research institute was in fact the unwitting host of a server that powered one of the largest pre-release music archives in the world, and with the help of Czech police, the server and its 4TB of data has been shut down.

Given my insider knowledge into piracy at Czech Universities, I'm not sure that "unwitting" is the right word. Still, 4Tb of pre-release music? Even at 700MB/CD (ie, no compression whatsoever), it is about 5700 CDs. There is that much pre-release music?

Tuesday, April 22, 2008

Academic success

Arnold King:

My tip on becoming a successful academic is to be careful how you define success. Any tenured professor has a great life by most standards. However, the default sentiment in academia is bitter jealousy. The folks at lower-tier schools think they belong at top-20 schools, the folks at other top-20 schools think they belong at Harvard, and the folks at Harvard think that they deserve more recognition than the other folks at Harvard.

While this is mostly true, it is hardly complete explanation. Academics are usually pretty smart people and they choose their careers for three main, partially exclusive, reasons.
1. They want to have a big impact (bigger than just a fat pocket)
2. They want to have comfortable, un-stressful life
3. They want the reputation associated with "tenured professor" status.

While 2 and 3 are not really interesting for me, the first point is the key. Money are not all for these people, and wages of professors are not that bad, either. The biggest goal is thus different - to make a difference. To push the knowledge forward. To figure out something nobody knows yet.

However, it is hard to succeed. Chances are that you will end up fifty-something, your published research is in the low-rank journals and/or not cited anyway. This is huge failure - you gave up money and other possible success two decades ago and for what? That only a couple of grad students read your paper?


Coming from highly cynical country, I don't expect law to be followed, I expect them to be circumvent. Thus, I found this funny:

Sen. John McCain's campaign has announced that it is asking individuals to donate as much as about $70,000 to accounts that could help his campaign. The cap on donations to presidential candidates is $4,600 per election campaign.

Wall Street Journal

Responsible politicians

One tends to think that those politicians who create big budget deficit are irresponsible. But it's not that simple. Imagine that you are a responsible politician in power. You probably know how you could use the money and you think that your ideas are better than your competitors, right?
Well, if YOU don't spend as much money as possible, the other party will eventually win and they will spend them.
So it is your obligation as a responsible politician to create as large budget deficit as possible.

Monday, April 21, 2008


Watching Sarah Connor's chronicles and reading about Google, I can't stop wondering whether the first worldwide artificial intelligence will not be a military network, but Google's Cloud.
As this report claims Google has about 1 million computers (other estimates generally agree), plugged into the network, reliable, robust, redundant.

Sunday, April 20, 2008

Carbon tax and cap and trade

Some people seems to believe that there is a significant difference between carbon tax and cap-and-trade when permits are auctioned off.
The idea that

A carbon tax will never be high enough to do the job.
1. Carbon cap is gradually lowered 80% by 2050.

is plain silly.
Price of permits will be equal to the tax that would do the same job. So if the carbon tax will never be high enough, price of permits will have to be astronomical.
It might be possible that increasing carbon tax without limit would not work (politically). But reducing number of carbon permits so that their price is very, very high should be easy to pass?

As a side note - the idea that CO2 emissions can be lower by 80% by 2050 are plain silly. There are very likely to be significantly increasing costs of doing so - to stop emissions won't probably be that expensive, but each additional percentage of a decrease will cost significantly more than the previous. Of course, you can easily reduce humans' carbon emission by 80% - just kill enough of them. Somehow, I don't think this is what people have in mind.


If you ever need a new identity for a while, this manual how to make fake fingerprints comes handy.

I wish I wasn't so lazy and tried to cheat my own computer. So far, the fingerprint reader resisted all attacks, but I haven't tried anything sophisticated.

Thursday, April 17, 2008

New York 2

Second visit to New York was much pleasant than the first. Meeting students from downtown high school, traveling every day from poor district was certainly interesting. Unfortunately, at the end, I caught men' deadly disease - running nose. Despite the popular saying, it does not take one week (or seven days), but more like two weeks. That's why posting was so slow, recently.

Thursday, April 10, 2008

Olympics' logo

If you want to know where the logo of 2008 Olympics in China was created, check this:

Source: Marigold.cz

Tuesday, April 1, 2008


Beginnings of Microsoft are little know in post-communist countries, because first PCs became available about 10 years after their introduction in the US.

Microsoft was so successful not because of the quality of its software (Microsoft does not even know what quality means till today), but because they realized the value of monopoly position and how much money you can make if dictate the standards.

They did not start as a company doing something better. They started by lying about their ability to deliver on time. They announced software 2 years before release just to fend off potential competitors. They underpaid all their employees. They cheated and lied to their customers, and general public. The main "goal" was to get the monopoly position, to "kill their competitors", no matter what. (For example, Bill Gates allegedly said "MS-DOS is not done until Lotus stops working". They used secret API, slowed down or prevented competing programs for running. Netscape story is peanuts against everything else that was going on. Their "mascot" was a Borg half-machine, half-humane with the tune "Resistance is futile".

They succeeded and we pay the price till today. There is no operating system worse than Microsoft and none is more expensive. And no producer of OS makes more money.

So far, it might be a story about a few smart thieves, liars and cheaters, who got rich, no harm done. But we all pay for their wealth and it is not a (economically) harmless transfer. We pay by our low productivity, by the need to patch, protect, anti-spam our computers and networks, by significant amounts of time and energy lost in productivity due to their programs that are sometimes intentionally made defective.

Compare this with Google - a company started also by two guys. They did something better than everybody else. They never asked or strive for monopoly position (and they don't have it). Their motive is "Don't do evil", instead of a pure evil symbol from Star Trek.

It boggles my mind how much money have been lost due to Microsoft in the past and how much will be in the future. Because they have their monopoly position and they are not going to give it up. Voluntarily.

Monday, March 31, 2008

Google Sets

Even though it is close to 1st April, this is no joke. New service by Google, Google Sets, is just unbelievable.From even two words in Czech, ie. obscure language spoken by about 10 mil. people, it generates large set of similar, logically related words. I was not able to find an example that would not work (I'm sure there are some).
Apart from Google Translate, this is another step closer to "mechanical understanding" of human language.

It feels comfortable to know that Google's 16000 (give or take a few thousand) work on problem like that, while I enjoy the results for free.

There will be blood

There will be blood is "A story about family, greed, religion, and oil, centered around a turn-of-the-century prospector in the early days of the [oil] business."
I did not expect much, so I was not really disappointed. The movie is certainly not interesting. It is basically story about greed only - in the movie, almost everybody is greedy, including a priest. The story would be significantly more interesting if there was at least one not greedy person. If the main message should be "Everybody is greedy", why do you want to spend more than 2 hours to make your point?

Predicting future

Predicting future is hard, even in the short term. Yet, it is fun to read about old predictions. This one is 40 years old and quite interesting.
It would be great to see how the world will look like in 400 years, but I hope 40 years or so will have to be enough. For this generation

Runaway health care costs

Health care system in the US is extremely expensive. Yet, it seems that quality does not necessarily reflect these costs. For example, it is sometimes argued that incentives are poorly set: doctors do unnecessary test of *insured) patients, who don't have many reasons to care about the costs.
Yet it seems at least possible if not plausible, that the US bears disproportionate share of research costs that lead to (significantly) higher prices of new treatments. I'm not sure how significant this can be, but maybe European systems are cheaper also because these system free-ride. Well, other reason can be that doctors cannot afford a Porsche in Europe (at least in Czech Republic).

Sunday, March 30, 2008

Public Transportation

This is why I like public transportation.

Saturday, March 29, 2008

Sweet deals

Sweet deals at Wal-Mart suddenly turned bitter. For those in a hurry

JACKSON, Mo. -- A collision with a semi-trailer truck seven years ago left 52-year-old Deborah Shank permanently brain-damaged and in a wheelchair. Her husband, Jim, and three sons found a small source of solace: a $700,000 accident settlement from the trucking company involved. After legal fees and other expenses, the remaining $417,000 was put in a special trust. It was to be used for Mrs. Shank's care.

Instead, all of it is now slated to go to Mrs. Shank's former employer, Wal-Mart Stores Inc.

The rule of law is such a wonderful thing.

Thursday, March 27, 2008

When money don't matter

... you can afford to get a $1 salary.

Tuesday, March 25, 2008


You can read about pollution in China, but it's hard to comprehend. A simple question from a friend from China makes it easy

And can you see stars in Europe?

Because they can't.

Teaching Scinece

Why didn't they show us experiments like this

in our science classes?


Isn't technology making us stupid?

Well, it probably isn't always making us smarter.


Teenagers have fun in Chile.

To spoil their fun, I would say that the party ends earlier than their think.

News about US 08 elections

Monday, March 24, 2008

Religion in Czech Republic

I don't link to blog posts in Czech, but I will make an exception this time. Patrick Zandl talks about religion in general, but with some connection to Czech Republic.

First, let me give you some background. US Department of State writes about Czech Republic

the vast majority of the citizens do not identify themselves as members of any organized religion. In a 2001 opinion poll, 38 percent of respondents claimed to believe in God, while 52 percent identified themselves as atheists.

This makes Czech Republic one of the least religious country in the world, something most of us are proud of. The reason is not, however, 40 years of communism (as USDoS claims), but the whole history of Czech people.

One of the most influential events was a protestant movement in early fifteen century. The movement was started by Jan Hus, who is now considered a national hero. Why? He was promised him a peaceful negotiation in Kostnice and then burned by catholics alive. Then the "Czech Kingdom" was conquered and population forced to catholicism. We have been oppressed for a few hundred years, catholic church hand in hand with royalty.

Czech National Revival and the first World War put an end to it. Czech Nation was free for about 20 years before Hitler came. Don't even ask what was the official policy of the church. You probably should not even ask where current pope was at that time. After the WWII, we were free for about 3 years and than the communism came. Unsurprisingly, they were no friends of the Church either.

So after the turmoil where Czech people believe in something, were punished for it, were forced into something, then were betrayed and prohibited from doing something, their lack of enthusiasm is understandable. Well, the story did not end there. Till today, Catholic church is negotiating with Czech government how much property they will get back (including schools, hospitals, houses, farms etc.). To a laymen it seems that they care more about their political power and wealth than about anything else. Churches are empty and rotting.

Somewhat surprisingly, many people have religious believes and most of them believe that there is something beyond our lives. Many people believe in God. They just don't believe that any church represents him. Priests and especially higher level officials are so far away from our lives that when they speak, most people think that they are just crazy. Czech society is naturally liberal and mostly cynical. Czech kids drink beer from 15, if not earlier and they have sex from about the same time. They are not being forbidden, but they are taught about condoms, diseases. They know about the dangers of interruption (physical, not moral) and surprise, surprise, the number of interruptions in Czech Republic declined from 100,000 in 1990 to less than 25500. (Numbers reflect artificial (induced) interruption, not naturally occurring one).

When "church" occasionally tries to propose rules that would forbid interruptions (they probably have to do it by order from Rome, because it really does not have any chance in Czech Republic), they try to force their own believes on other people, who don't share their views. It's hardly a reasonable way how gain the trust.

Sunday, March 23, 2008

Poverty and living costs

Megan McArdle asks an interesting question "When do you stop being poor?". In other words, what kind of living standard should poor people have (paid from "our" taxes)?

The difference between what Europeans and Americans would answer define the differences between societies. My impression from first months in the USA was that poverty is much more prevalent and much more severe than what I was used to. For example, most people struggle to live off their pension in CR, but they have the pension even if the firm goes bankrupt before they retire. They have free health care, no matter what.

I'm coming from poor (by US measures) or (lower) middle class family (in Czech standards). This means that we were never really poor, but we were always very careful with our money (my parents never had a holiday by the sea, or any holiday outside their home for the last 10 years). It made me conscious about spending money. I know they may not be here in the future. It also made me live rather modestly (by my parents standards, I live in luxury, by standards of my friends with similar income, I live like a monk).

When leave for San Diego, I knew I will get only the minimum stipend. I was curious how much money I will spend and what I will be able to afford. I knew I will spend much more than I'm used to for accommodation (around $700). I also knew I could not afford a car. Fortunately, I live reasonably close to to school, and I wanted to focus on my research anyway.

On other living expenses (food, clothing, and other basic stuff) I spend around $300 a month. For that, I get better food than in CR for the same amount, couple of books (reading is fun for some people, you know), and other things I need. I cook for dinner, but eat in school cafeteria (about $4) and sometimes go to a seminar with free lunch.

It's not trivial to keep expenses that low, but it is possible. I buy things when they are on sale, I have a membership card (for discounts). Since I don't have a car, I have to shop in the local shop, which is not the cheapest, but as you can see, if you pay attention to prices, you can save. I buy (infrequently) clothes in Wal-Mart. I don't go to movies, I don't buy coffee in Starbucks, I choose the cheapest brand when several choice of equal quality are available.

I consider my quality of life higher than in Czech Republic (in material sense). It costs $300 + rent. I could probably save a little more, but this is where I would define the poverty line. If you think every person should have a right to have a car to get to work (bike is way cheaper), then you need to add a couple of hundreds (I think about $300 should be enough). Since I pay probably higher rent than necessary (around $500 is a lower end price for a room), I would put total costs of "reasonable life" to $1000-1100. Note that San Diego is rather expensive region, even though not as expensive as New York as the rent goes.

This sum of money gives a single person a living standard that I consider acceptable for a human. It may seem like a lot, but it's not. For a $7/hour (about minimum wage), it is less than 160 hours a month, which requires 8 hours a working day, standard shift. Minimum wage are plentiful, but not pleasant.

The analysis misses something. First, there is health insurance and pension. I believe that there is Medicaid and Medicare, but this does not cover everything. Moreover, there is no pension like in Czech Republic, where the money you get from the government almost do not depend on your wage before retirement (and thus is relatively higher for poor people). You may not even get anything, just some minimum living standards support (if any, I don't really need to know).

Second part is the non-material life (culture, hobbies, etc.) These things are very often available locally in Europe, and are rather cheap. It seems to me that you have to travel farther and pay more in the USA. But some things are free - library, parks, beach.

To come back to the opening question. I define poverty level as a minimum amount of money I need to live reasonable life. Since I like reading more than drinking and driving car, it is pretty low.

Enron, corporate america and savings

This movie about Enron opens plenty of interesting questions:

I don't want to ask the obvious ones. People steal and those who can steal a lot, steal a lot. Mr. Lay died before sentencing, Jeff Skilling is serving 24 years sentence. And it's great it is so, even though it cannot help the employees who not only lost their jobs, but their health insurance, lifetime savings and pensions.

Most of them could not prevent the loss of job or heatlh insurance, yet most of them could have prevented the loss of savings and (some?) pensions. They shouldn't have put these money into Enron stock. It surely sounds obvious from hindsight, but if there is anything that economics 101 should teach you, it is this.

Don't put all eggs into one basket.

If all people learned that from the Enron story, at least something good would come out of it. But I don't think that's the case. Bear Stearns suggests that it is not - allegedly, many employees had most of their savings in the stock of the BS.

(H/T to PCh for the video)

Friday, March 21, 2008

Universities and bureaucrats

Some of the reasons why I'm considering business career instead of academic one is the bureaucracy I found so far in every university (UCSD has a b., but it seems to work better than usual). Most of the bureaucracy is self-inflected (ie., created by the institution itself), but not all. The sheer stupidity of most administrative workers, though, is clearly not necessary and drives me crazy. I will give you an example based on a real story - my first grant.
My boss told me to apply for a GAUK grant (Charles University grant agency, grants for its students). I did not need the money - I'm doing theory, I need a pan and paper (or steamy bathroom with mirrors). Yet, it is good to have a grant on your CV, especially if you apply for a grant, and one needs to start somewhere.
I really did not need the money, so I wrote it carelessly. My colleagues needed the money, so they wrote it carefully. I won. I got the money for calendar year 2007, and they were available in June 2007. Quite late for summers school of summer conference, especially because I was leaving to San Diego in September and had to be present in Prague in August for visa and (an)other paperwork.
Nevertheless, I was able to use the money. The thing is that there are always strings attached to the grants, so you can't really use the money the way you want (or you consider moral). But you certainly have to use it all, no matter what.
The "fun" part comes now. I have to write final report (which I knew) and so I did. The deadline set by university is April 1, by faculty March 25th and I was informed about the latter. However, the CERGE-EI decided that it's students are stupid and thus they need to submit the final report a week earlier to CERGE-EI (it's not a faculty). It did not really tell anybody - they posted information about new round of grants (for 2008) in October 2007 (five months ago!), to which they attached a Word document, at the end of which they posted one line saying that the deadline for final reports of the previous round is March 17.
In contrast to the faculty (FSV), they did not bothered to send an email about that. Instead, they waited till the deadline was over and then they sent a threating email to us who missed the deadline (AFAIK, all of us).
Moreover, they required that we submit three copies in print and a CD/floppy disk in person. This is not only impossible (I'm in San Diego, and I really don't have $2,5000 to spare to get right now to Prague), but utterly ridiculous. The report for faculty and university is to be submitted via very simple web form, it is about 2 pages of text. If you send it by email, they can print it by pressing "Print", they don't really need you to bring it.
So I'm supposed to fulfill deadline I wasn't told about, that has no standing in the grant contract, that is utterly stupid and I'm being threatened that if I don't do it, something bad happens.
I don't want to be bothered in my life with things like this. I will have to deal with government, which is equally stupid and similarly inefficient, I don't need to meet another group of useless people (ineffective administrative workers) and their stupid rules.
P.S. Why am I so sensitive about a missed deadline? I don't know. I probably think that the world would be a better place if all people did the things they are supposed to do in time. I certainly try hard to do that. But it requires that I'm told about the deadline.

Thursday, March 20, 2008

Number of the day

The number is 900,000. It's the estimate of the number of US citizens on the "US Terror Watch list." Source: ACLU.

The Crisis

It keeps getting better and better. First reports of negative repo rates, today. Another good question by Paul Krugman.

On more optimistic side (with a inflation warning), Jeremy Siegel, via Megan McArdle :

Wednesday, March 19, 2008


The USA is infamously known for its love of litigation. The reason obviously is that there is no rule "the loser pays" which we have in Czech Republic (probably EU in general). Moreover, if you are poor enough and cannot afford a lawyer in a civil suit, well, bad luck, you lost. It is easy for a corporation to threaten you, because they can have 15 lawyers for a few hundred thousand of dollars. Your only "protection" is that there is no reason why they should do it.

It reaches levels I could not possibly ever imagine. Read this:

"Voting machine manufacturer Sequoia has sent well-known Princeton professor Ed Felten and his colleague Andrew Appel a letter threatening to sue if New Jersey sends them a machine to evaluate. It's not clear from the letter Sequoia sent whether they intend to sue the professors or the state — presumably that ambiguity was deliberate on Sequoia's part. Put another clipping in your scrapbook of cases of companies invoking 'intellectual property rights' for bogus reasons." Sequoia seems to be claiming that no one can make a "report" regarding their "software" without their permission.

Phishing attacks

There has been a huge wave of phishing attacks again the largest bank in Czech Republic. I'm on the list and it certainly interesting to monitor them. Some of them are in English and thus doomed to failure. Others are written in perfect Czech and their content makes them appealing. For example, their warn against other attacks (yes, I know that this is not an official message).
But the best are translated by machine. Note that Czech is very difficult and machine translations are ridiculously funny. The latest email is probably the best

"Drahoušek Zákazník,

Ceska Sporitelna docasný prerušit tvuj úcet."

Which is something like

"Sweetheart customer

We temporary account yours suspend" (hard to translate, I exaggerate).
I have to say that I'm still looking for a bank to call me sweetheart in a mass email.

Tuesday, March 18, 2008

Krugman Story

Paul Krugman, in an old article talks about a beautiful (for an economist) story (originally published by Joan and Richard Sweeney in the Journal of Money, Credit, and Banking in 1978).

The Sweeneys tell the story of--you guessed it--a baby-sitting co-op, one to which they belonged in the early 1970s. Such co-ops are quite common: A group of people (in this case about 150 young couples with congressional connections) agrees to baby-sit for one another, obviating the need for cash payments to adolescents. It's a mutually beneficial arrangement: A couple that already has children around may find that watching another couple's kids for an evening is not that much of an additional burden, certainly compared with the benefit of receiving the same service some other evening. But there must be a system for making sure each couple does its fair share.
The Capitol Hill co-op adopted one fairly natural solution. It issued scrip--pieces of paper equivalent to one hour of baby-sitting time. Baby sitters would receive the appropriate number of coupons directly from the baby sittees. This made the system self-enforcing: Over time, each couple would automatically do as much baby-sitting as it received in return. As long as the people were reliable--and these young professionals certainly were--what could go wrong?

Well, it turned out that there was a small technical problem. Think about the coupon holdings of a typical couple. During periods when it had few occasions to go out, a couple would probably try to build up a reserve--then run that reserve down when the occasions arose. There would be an averaging out of these demands. One couple would be going out when another was staying at home. But since many couples would be holding reserves of coupons at any given time, the co-op needed to have a fairly large amount of scrip in circulation.
Now what happened in the Sweeneys' co-op was that, for complicated reasons involving the collection and use of dues (paid in scrip), the number of coupons in circulation became quite low. As a result, most couples were anxious to add to their reserves by baby-sitting, reluctant to run them down by going out. But one couple's decision to go out was another's chance to baby-sit; so it became difficult to earn coupons. Knowing this, couples became even more reluctant to use their reserves except on special occasions, reducing baby-sitting opportunities still further.

In short, the co-op had fallen into a recession. Since most of the co-op's members were lawyers, it was difficult to convince them the problem was monetary. They tried to legislate recovery--passing a rule requiring each couple to go out at least twice a month. But eventually the economists prevailed. More coupons were issued, couples became more willing to go out, opportunities to baby-sit multiplied, and everyone was happy. Eventually, of course, the co-op issued too much scrip, leading to different problems ...

The story is interesting on so many levels, so reading the whole article is probably a good idea. You can probably use the story to defend the idea that all current problems are monetary and that issuing more coupons would help. Since the story is so cute, someone might buy it.

But I won't. The current problem is not that we all have too much money we prefer to hold. As far as US citizens are concerned, it is exactly the opposite. Let's continue with the babysitting story: there are two groups of people. One of them (US) spent all their coupons and borrowed some more and spent those, too. The other group of people took this coupons and baby-sit for them. What the second group now wants is the opportunity to make the first group baby-sit. Printing more coupons and giving them to that group won't solve the problem, it will merely postpone it. Without coupons, first group cannot trade inside (monetary problem), so more coupons help them. But most of all, they will eventually need to repay the second group. Pilling some more debt may make things go smoothly for a while, but will also make the hangover much worse.
I think USA is looking for a big crisis. Fed may postpone it for a few years, but when it comes, it will big. It will be needed to teach Americans that savings account is not a joke.
P.S. I'm probably wrong. Maybe Americans consume appropriately (based on their expected life-time income), in which case it should be OK. Maybe weak(er) dollar will help the export and industry in the US so that no big crash will be needed. Maybe

Monday, March 17, 2008

Bear Sterns and JPMorgan

For those who don't want to read all the details, here is the picture that summarizes what probably happened:

Notice two things. First is the green little text in the left upper corner (yeah, 10% is nice) and the jump in the graph. Well, this happens if you buy what cost $170 two month ago for $2.

I can't find other name than "theft", but opinions obviously differ.

P.S. I accept that it is very hard to know what to do, given the "success" of Northern Rock. So maybe this is not that bad after all. Yet it still looks like JPM get itself a pretty good deal.

Dog's life

Simple hearing test reveals what I knew all along:

Or maybe you are a mosquito, you certainly can't be human.

The highest pitched ultrasonic mosquito ringtone that I can hear is 21.1kHz
Find out which ultrasonic ringtones you can hear!

Well, either that, or there is something wrong with my computer/headphones.

Sunday, March 16, 2008


If you visit Prague, this is the most important information you will need:

Sanity Check

Writing a dissertation is difficult for many reasons. Primarily, it is very independent, very long-term work with uncertain outcome. It is very hard to evaluate progress or lack thereof. And even if you notice lack of the progress, it is hard to really know why.
You may be doing progress faster then usual yet fail to notice, you may be working on the wrong idea/topic, or you may be simply too stupid to produce anything original and useful.
I wasn't happy with my progress from the very beginning and it was driving me crazy for a long time. I'm still not happy, but finally I found a way how to keep myself sane. Here it how it works. Remind yourself that

1. You are (among) the best. Yes, you are - no matter how do you feel about it, you are easily in top 1% of the world population in terms of education, intellectual ability, knowledge and/or future income.

2. You can do it. Seriously, most people finish and you probably know plenty of those whose research is appalling by your standards. No matter what you produce it will be better than that, which is more than enough.

3. End is close (this helps if you are at least in the middle). It does not seems so right now, but you can probably think of steps you need to take to finish. Split the task into small pieces, make sure that the timing is reasonable and get to work. It will be over sooner than you think. Remember, the time is running faster in the second half.

4. Quality matters, but you need to choose the right scale. You have read hundreds of papers, most of them published in the best journals or written by the "gurus" of your niche. Don't expect that your first paper will be as good or produced as fast as papers written with 20 years of experience. Strive for quality, make sure that your work makes basic sense, but remember that most than 1/2 of the publish research is never referred to.

5. You are living the worst and the best time of your life. On one hand, you are totally independent. If you take a day off, most likely (depends on your field) nobody notices. Even if you take a week of, it would be OK. On the other hand, you are your own boss and you can be pretty tough, can't you? Also, you don't have any money. Don't worry, there is probably plenty of money waiting for you in the future, but you will have no time to enjoy them.

6. It is enough to finish just this part and the rest will be easy. Choose a specific goal, finish it and then choose another one. It will be getting easier and easier. First paper is the most difficult.

7. Find a co-author, ideally not your adviser. Dissertation committees don't like papers co-authored by your adviser, but other students as co-authors are welcomed. Find one for at least one paper, possibly (depends on your school and your job market goals) two. If you get stuck, they will help you to move along and produce something. If they are more experienced than you, even better. You will learn by doing and finish a part of your dissertation along the way.

8. Visit presentation by other graduate students. It helps to keep you informed how they are doing and you never know when you meet even bigger looser than yourself and thus improve your self-esteem.

Thing I did not do but that can help a lot.

9. Finish first paper as soon as possible. Nothing helps more than to know that 1/3 is over. Seriously. If you have 3 papers in various stages of progress, but none of them published, it feels like you have nothing! (I know, I live it every day). Focus on publishing one paper, if it is possible (and makes sense).

Repeat the previous points to yourself as often as needed, focus on those that help you most. And relax, it's fun. Or perhaps, it will look like fun when you will be 60 years old.

Saturday, March 15, 2008


It is widely believed that religion has a positive impact on society. Allegedly, people who believe in God behave nicely to each other.
Does it imply that people need somebody to tell them to behave and threaten them (weekly) with Hell?

Number of the day

Since 1999, Chinese imports of soybeans and crude oil grow 35 times. (By The Economist, March 15, p.4. of special report on China's quest for resources).


UCSD catering is now serving drinks in the plastic cups made from corn. This makes the aluminium cans with sodas the only thing NOT made from corn.

EU and Czech Republic.

IDnes - Czech news website has decided to completely ruin its already poor reputation by publishing this piece called "End of the old times". Author, Petr Kostka, claims to be an economist and seems to aim to join a group of "economists" around Vaclav Klaus (he will appoint couple of Board Members of Czech National Bank, so it's good to be a member of such group) by his article that tries to criticize European Union.
Unfortunately, the author does a very poor job at what he is doing and some of his claims seem to reach level previously rarely found even in the worst articles. For example, he claims that EU resign on military power and that USA, who twice sacrificed millions of its soldiers and citizens may not do so again. (I leave this pearl of wisdom without further comment).
He is weak in other arguments as well. He criticizes strong over-bureaucratic center, which is not unusual (and may be even correct), but does not tell us anything else. He also criticizes that the internal market is not free enough.
It is not clear what Petr Kostka actually wants. Part of the article seems to want EU to do more, some of it want it to go away.
And this is the core of poor Czech criticism in general. We are there, EU is not going away. Plenty of things are wrong (some of them are great), so let's fix them. Occasional proclamations like "too much bureaucracy" without any additional detail certainly won't help.
P.S. Those who know me probably remember the time I was criticizing EU. I still disagree with many things it is doing, yet I have come to accept the good things. Thus, I want to criticize to improve it, not to destroy it. Because that would be the return of old times we certainly don't want to see.

Thursday, March 13, 2008

The best sentence of the day

Czech politics edition. A mistress of current prime minister* has some bodyguards and a car with a driver, paid by Czech taxpayers. She does not have a right to have them, so it has a special category. When asked why she has these benefit when she does not deserve them, a boss of security at the Government (Bureau of G?) replied

"Jde o prevenci. Lidé by ji na ulici pořád obtěžovali s různými otázkami," řekl MF DNES ředitel ochranné služby policie Lubomír Kvíčala.

which could probably be translated to
"It's a measure for prevention (precautionary). People would bother her with questions on the streets." told MF DNES a boss ...

Yeah baby, if you are a politician, people might ask you something on the street. Surely this is the reason why we pay a couple of thousand dollars a months to protect you.

P.S. A mistress adds to your political weight in Czech Republic, so at some point, president, prime minister and the boss of main opposition party had one. It did not help much.


Daniel Docekal, a Czech IT journalist (of sorts), does not like Google. He also does not like Google and DoubleClick deal, ie., the fact that Google both No.2. firm selling banner to complement its business of contextual ads.
He does like it because the deals might allow Google to be able to "identify" us, to say exactly who we are. Sadly, he does not explain why, except for the fact that when more websites are monitored, more is learned. DoubleClick is too small to make a difference, anyway. But there is a more important question (two of them, actually) which DD does not ask.
First question is what the identity is and how it can Google (or Microsoft, - I believe Google more than Microsoft, but substitute for Google name of any larger IT firm in the following text) learn. In the non-IT sense, identity is simple - it's the proof that you are who you are. I have to do this whenever I need from Czech government and it requires my ID, which was issued by government. It has some information about me and my picture. Such identity does not exists online. For some transactions it could be replace by electronic ID (secret key/token, which allows you to sign documents you intend to send to the government who has the public key), but that's not what the Google is after. They want to know "who you are". It means what you like, where (approximately is enough) you live, how much money you have/earn, what makes you spend them (and when). For meta-analysis, it might be useful to know to what kind of advertisement you react or even know that you don't is useful (special price could be offered to you).
The ultimate goal of all this is to offer you a perfect ads (by Google) and make you pay as much as possible (by producers/sellers). Surprisingly (for some), "as much as possible" may be less than the list (usual) price - if you can't or don't want to buy Porsche at current price, maybe 5% discount will make you change your opinion. If this discount is aimed just at you and it is worth doing for the seller, you purchase the car and both sides are happy. Eventually, very well aimed ads could replace general price discrimination tools (like coupons, annual sales etc.), but that's long future.
Right know, Google wants to know as much as possible to serve you the ad you are most likely to click on. In the near future, Google wants to serve you an ad that will make you do something on the advertised sale (register, compare products, buy them...). He does not need to know who you really are to do that. Your name, precise address, your Social Security Number ("Rodne cislo") and plenty of other characteristics are irrelevant. Most of the characteristics are irrelevant for most of the advertisements, at least for now. But even if all these characteristics (all websites you visited, content of all mails you sent) identifies you as a very specific person, is it a bad thing?
That's the second big question. Should you be afraid? Well, some politicians certainly want you to be afraid (so that they can offer you a great solutions if you just vote for them), but you probably should not. But it depends.
If you read all my email, you can probably easily identify me. If you check all websites I visit, you will have harder job, but you still can do it. But what do you actually learn? My name, school, possibly address, occupation, age, financial status... All these things are on my homepage. You don't need to do a sophisticated analysis. This may be atypical, but plenty of people post many things about themselves on Facebook, MySpace, YouTube or their blog. By reading these sources you can learn more than by checking websites I visited last year.
Still, somebody (something) out there can link your online activities with a real person and thus find out it's hobbies. So what?
I can imagine couple of evil uses of this information if it ever reaches Googles hands or G. turns evil. For example, one could tailor spam using this information (spam seemingly coming from a friend from high school would get more attention). One could launch a real-life scam by using this information to choose you. Somebody might store this information and blackmail you with it later.
All this might happen, but it does not really scare me. I expect people that rarely know me to try to scam me and I don't think one should be any more trusting in real life than online. I don't think I can be successfully blackmailed (surely not now). One certainly get's some exposure that moves him from anonymous person to somewhat know person (like not-well-know politician). But your blog or homepage does much more damage. The information that Google has is mostly useless for anything else than the advertising and it is highly guarded secret. Your blog and Facebook page reveals your tastes, hobbies and friends to everybody.


A friend of mine asked me once whether I consider myself "smart" and I answered "No". She explained to me that it means that I'm very smart. Allegedly, people smarter than average but not really smart consider themselves very smart and are proud of it (why not). Very smart people are aware of the fact that they are smart but also realize that there is a plenty of people much smarter then them.
After that explanation, I'm ready to answer the question about my intelligence by saying something like "yes, but not much". Nobody asks anymore.
I have recently discovered another measure of intelligence. It makes me look smart so why not to write about it. It relates your intelligence with the number of people you know who are so much smarter than you that you hardly understand them.
I did not know anybody like that till I came to San Diego (That's the part that should make me look good). I of course knew plenty of people smarter than me. With those people, however, I was able understand their reasoning, even if I was not able to think that fast or clearly myself.
This is different - you hear someone saying something, it makes perfect sense yet you know that the person means more than you understand. It's a strange feeling. I would like to have an opportunity to see whether I will eventually be able to understand or whether the difference is so big that I have no chance.
P.S. The guy I have in mind is probably the only person who (I think) qualifies or will qualify for a Nobel prize and did not get it yet. He is too young.

Wednesday, March 12, 2008


When I was leaving Czech Republic, about 6 months ago, you can get a dollar for 21CZK. You need about 16 CZK right now. If I was getting my stipend in Czech Crowns, I would be getting about 25% more dollars. I, of course, am not. Still, it feels like getting a 25% discount.
I still remember that I though that the dollar cannot get any weaker. How wrong I was teaches me that you can't really tell what the markets will do next. Right now, I'm quite certain that the correction has to come.

House of dreams

Many people in Europe dream of living in a house. Most people in the USA do. After living in both worlds for a while, I think I understand why.
In cities in Europe (from which I know mostly Czech Republic, but it is similar elsewhere as far as I can tell from traveling around), there is a plenty of public spaces. The forests and hills in the countryside are mostly open to public (not true in UK, for example) and there is a plenty of historical places to visit.
In Czech Republic in particular, I takes me 20 minutes on bike to get to a forest, where there are no cars, no people and basically no rules (no signs every 20 meters). It takes an hour by train to get basically to anywhere around Prague, with trails for hiking everywhere. There are historical things to see (castles, churches,...), hills to climb, just things to do. If I need to get out of the city, I does not take much effort. Of course, since there is so many of them, the density of people is low. If you have one (Central) Park in the City (there are more, but you get the point), no surprise it is full of people. Since there is so many of them, there does not need to be special rules (more people, more rubish) and some of the people in Europe have to habit to take their trash with them, not to drop on the ground, which limits the need for the rules.
Thus, the need to have your own private place is not nearly as strong. Everybody would prefer to own a house, because you don't need to think about neighbors, it is even closer to the nature, air is cleaner and it is less hot in the summer. But you don't need the house as a place where you spend most of the time because there is nowhere else to go.
In the US, it is rather depressing if you don't have a house. There are no places to go - most places are private, only parks are accessible and there is plenty of people and rules. You want to have your own place without any rules, where you can hang out outside.
Of course, there is more space in the US, which makes it possible for everyone to live in a house, and people are richer so they can afford the house (mostly, of course not in NY). Since so many people are able to afford a house, almost nobody lives in an apartment. In Czech Republic, most people do (about 2/3, if I can remember correctly).
The consequences of this difference are enormous. First, you cannot provide public transportation for low density areas at reasonable costs. Which means everybody needs a car, which means you need plenty of roads. Even poor people need cars because they cannot get to work otherwise.
You need car to visit public offices, to shop even at a grocery store (till I was 25, I never went to a grocery store by car and I was shopping for my family till I was in fifth grade). Car is a luxury in Czech Republic, used over the weekends to get out of the city. It is a pure necessity in California.
Low population density makes other things more expensive and harder to do - elections, services (like cable TV, internet connection, garbage collection and recycling), mobile phones. It makes it much harder for police and firedepartment to cover large areas.

After this experience, I will still dream about my house. But I know that the fact that I (and the rest of the citizens of Czech Republic) spend 2/3 of our lives in apartments is not such a bad thing.

Tuesday, March 11, 2008

Why CEOs are paid so much?

This question comes back every now and then and there does not seem to be an easy answer. The ratio of CEOs pay to workers wages is increasing (this guy is not probably trustworthy, but claims it grown 12 times over the last couple of decades), one might say escalating.
Presumably, this should be bad, but I don't really see why. Anyway, there IS a simple explanation:
Now, more than anytime in the history of the world, there is both plenty of capital and unskilled labor force. There is probably also plenty of skilled labor force. What is scarce is the ability to manage this resources effectively.
Maybe there are some obstacles in entry (education, manners, persistence, pragmatism are obvious candidates), but I'm more and more convinced that most people are simply bad at management.
That's why Scott Adams has such an easy life making jokes of the managers - most of them are indeed bad, but there is nobody better!
So if you think you've got the potential, go for it. The rewards are unlimited.

Public transportation

I have already written about public transportation in San Diego. It is pretty depressing reading and today's trip to get a drive license documents it well.
First, the line has changed, so it does not stop where it did before, but nobody bothered to cover the number on the bus stop, and nobody told Google. After finding the right stop, it took me about 20 minutes of waiting for a bus with 15 minutes intervals. On my way back, it actually took 30 minutes of waiting. Then two of them came. Both were unsurprisingly empty.
The drivers in general (and this one in particular) cannot drive. That's an interesting (side?) effect of a regulation. If you want to get a permit to drive a bus in Czech Republic, you need to drive a large truck (lorry) for a couple of years. Not so in the California. Anybody can get a license pretty easily and it is not unusual to see students driving (UCSD) school buses. The outcome is tragic. Moreover, the buses are probably not well suited for local roads and they have to fulfill rather strict conditions, which is good because they don't smell, but it is also bad because they are terribly noisy.
But that's still not the worst. The biggest problem is that there is very few lines and intervals are long, so traveling anywhere is a hassle. Thus, nobody rides a bus. Thus, it does not make sense to have buses (or PT in general).
I was wondering whether there is a way out of this vicious circle (no) and what is its cause. The cause is surprisingly simple - low population density.
Even in a largish city like San Diego, there are virtually no apartment buildings as we know them from Europe. Everybody (except students and tourists) lives in a house. It does not matter how small and badly build is the house, how small is the parcel (1m stI have already written about public transportation in San Diego. It is pretty depressing reading and today's trip to get a drive license documents it well.
First, the line has changed, so it does not stop where it did before, but nobody bothered to cover the number on the bus stop, and nobody told Google. After finding the right stop, it took me about 20 minutes of waiting for a bus with 15 minutes intervals.
The drivers in general (and this one in particular) cannot drive. That's an interesting (side?) effect of a regulation. If you want to get a permit to drive a bus in Czech Republic, you need to drive a large truck (lorry)ripe around the house is ok).
I will explain in later posts why I think this is so. The point is that in low density area it is extremely (prohibitively) expensive to have a reliable public transportation. And that's why there won't be any in California. (Yes, even LA looks like houses randomly placed between highways).

It's coming

And it looks big: Merrill Lynch: Recession to Be Worst Since 1970s.

So, are you ready?

Monday, March 10, 2008

Sinful behavior

I'm happy to announce that there are seven more deadly sins. It makes a nice comparison to the "old" seven deadly sins.
I'm fascinated by religion in general - it's very well thought-through mechanism how to achieve and sustain control over large mass of people(who may even be smart) and how to keep the previous fact (reasonably) secret.
Occasionally, however, the pope (yeah, the guy from Hitlerjugend and former inquisition) or his subordinates, slip and do something and reveal their true intentions. They have a huge team of people who make sure that this does not happen too often or too visibly, but it does happen.
Like in this case - birth control is bad, so girls, you better risk pregnancy (that may ruin your life) or sickness (that may kill you) that a deadly sin by using - oh G., a thin layer of rubber. Or even worse, you scientists, don't you dare using a tissue from adults (not sperms, not eggs) to treat blindness, Alzheimer, heart diseases etc. What would the religion be good for if you eventually treated all of them?!
This is probably more sinful than anything in this post yet (even though I think free speech is on their secret list at the top, too), but I cannot resist: I don't believe there is a God, but I hope there is one and that we will have a long, entertaining talk (hopefully after I die) what is this (bible, Jesus, Pope) all about. I think we both could learn something new.
P.S. It turns out that the "news" were somewhat distorted. My apologizes.


There are people who are in it for a big surprise ( Story in Czech only). I'm wondering which ones.

P.S.My posts sometimes don't make sense intentionally. However, chances are they will, eventually.

What's wrong with these people?

There is an interesting story going on here (in NY, to be precise), where a long-time fighter against prostitution was proved (and he eventually admitted) to have a sex with a prostitute. (See summary and a nice comment here.)
Of course, this starts the (usual) debate whether the prostitution should be illegal (it is in the USA) and whether it is a private matter of a politician who fights against it (not).
What is much more fascinating to me is the need to use a prostitute in the first place. He has a wife, he is not eighteen (or twenty something), he could probably get a date or something, so why does he need to pay couple of thousand dollars for a girl, several times?
I could understand him watching porn (that's legal anyway), or have an extra-marital affair. But I don't understand getting a prostitute - the gap between these things seems so huge to me.


When the cat creeps into the basket with your dirty cloth, lies down comfortably and begins to pour loudly, you know you are being loved.

Saturday, March 8, 2008


There are good reasons why I don't like Microsoft, but I don't want to turn is forum into M$ bashing site. But when you read something like this

Exploiting a little known feature built into Firewire port specifications, Adam Boileau released the source code to a utility authored in 2006 that allows anyone to bypass the Windows Authentication dialog box on any PC with a Firewire port.

Wait, it gets even better

Boileau says he decided to release the script now, two years after it was initially unveiled, because Microsoft had not acted to patch the vulnerability. Boileau considers his tool a “party-trick demo script thats been lying around my [home folder] for two years gathering dust,” and considers it “a pity to write code and have no one use it.”

I'm not sure why but "Open Source" sounds pretty loudly in my head right now.

Friday, March 7, 2008

Eating healthy and bacteria

There are two pieces of a puzzle that finally fit together. First, there was a public debate (in Congress) following widespread use of anti-biotics in home cleaning products that followed reduction of price of this anti-biotic due to the end of patent protection. Second, Danone have started to advertise its "Activia" and DanActive, which are products widely used and advertised in Europe as containing healthy bacteria. I was surprised to notice that the word "bacteria" does not appear anywhere in the commercials.
Then I realized that most products sold here are "anti-bacteria", so nobody knows that bacterias can be good as well as bad. The idea that you voluntary eat something that contains those horrible, invisible bacterias is clearly unimaginable and would certainly bad way to sell.
P.S. I just saw another ad offering "living cheese" or something like that.
P.P.S. Most of the yogurts sold in the USA are really "dead" - there is nothing living in them (and I doubt that there ever was).

Limits of patriotism

I came to the USA expecting high levels of patriotism, emotions usually not publicly expressed in Czech Republic. Yet, I was not really expecting to see that "USA" written on the road that is about to be repaired.

To explain: before the road is being fixed (or dig into), signs appear to mark the beginning, end, where some utilities (gas, water etc.) go and so on. Almost every single sign ends with "USA". I'm not sure what this is supposed to mean. Probably it has some meaning I'm not aware of. Or people are just crazy.

No comment

“A primary purpose of the educational system is to train school children in good citizenship, patriotism and loyalty to the state and the nation as a means of protecting the public welfare,” the judge [in California] wrote.

Hat tip: Fey Accompli

Quality of Czech Journalism

I prefer not to comment on most cases of mistakes Czech Journalist make, mostly because there is too many of them. In this case, I have to make an exception.
Background: Czech Ministry of Education is preparing so called "White Book" of tertiary education (i.e, universities, colleges...) Part of the proposal is deferred tuition, which is generally a great idea: every student can study for free, accumulates the debt that he has to repay only when his income is bigger than a threshold (e.g, 1.5x average wage). If he never exceeds that, (s)he studied for free. He can always pay in advance (and save) or he can repay faster. The idea is better than regular tuition for risk averse population (probably very usual in EU), because if you get sick and can't repay, no big deal (plus you get a free health care anyway).
The White Book proposes general mechanisms of this idea. I was somewhat involved (yet prefer not to discuss the details) in preparing it and it was pretty intensive for a short period of time. I re-read it about 6 times during 5 days or so. As I said, the idea is still rather general, so there are no specific numbers, interest rates, thresholds etc. proposed, just "almost random" examples are given.
It's kind of surprising to read then that the limit on the tuition is fixed to at most 30 000CZK (per year, about $1600). Well, I guess the journalists know more than the authors (and their teams). I hope if they knew the truth and bothered to report it.

Thursday, March 6, 2008

Cultural differences No. 2.

One Czech cabinet member proposed a law that will make slapping a child illegal. Later, she had to apologize (or "soften her stance") by saying that occasional slapping of a child is OK.
In case you didn't know, it is a "best practice" to sometimes slap your child in Czech Republic*. And as you can see, politician should not even suggest that it should be made illegal. (Physical abuse/violence is of course illegal).
I cannot possibly imagine any politician admitting that occasional slap on the face is OK. Usually, the cultural differences are understandable / comprehensible. But in this case, we are so far away that one cannot even talk about it (in person, it's ok on blog).

* I vividly remember the discussion we had about physical punishment on high school. We ALL agreed that physical punishment were the most pleasant ones. You do something stupid, you get slapped, in 10 seconds (or earlier) it's over and everything is forgotten. However, if you did something REALLY stupid, there was no punishment, your parents were angry for days or even weeks and you felt much, much worse. The "psychical" punishments were significantly worse.
I guess our parents knew that increasing the severity of physical punishment. One cannot hope to expect members of a nation that need to be warned about putting cat into microwave oven to be able to make that distinction. And it probably saves some kids' lives if it is considered totally unacceptable to punish your children even a little. But I know that none of my friends will raise their children in the US. For what is OK back home, you can easily end up in prison here (no, I don't meet weed).

Quality rules. Not.

One of my colleagues from UCSD office came to me with question whether I know anything about Stata. Yes, as a theoretical micro economist, I know (very) little* about Stata. And the reason why she asked was that she is going to teach a course in econometrics, heavily based on Stata, in two weeks.

I have to say that this was the last piece necessary to crack my mental health today. Why should I even try to write a decent paper/dissertation? The world is probably ruled by people like this lady, who are paid (and will surely embellish their CV) for doing something they have no idea about, who cannot possibly do a good job for the students yet do it anyway. When the rule "If you want to teach something, you should know something about it!" lost its power?

More broadly (and depressingly) - what I'm doing here? Why didn't I go to the beach (or National Park) like a friend from unnamed Central European country, who came as a grad student with a finished PhD. and who keeps complaining how little opportunities we have here in San Diego "to socialize". (BTW: he even complaints about how much people from his country complaint.).

I hate days like these...

* There is no field further away from Stata then theoretical microeconomics.

Tuesday, March 4, 2008

Fairy tale

Let me tell you a fairy tale about one not-so-poor family. There is a husband, who makes gizmos and sells them to other families. His wife cleans his home, cooks etc. They are a strange family so they pay each other money for everything they do. Wife gets money for cooking a dinner from husband, he gets money from her when she uses a gizmo etc.
Both of them are buying lot of crap - new large HD TV, new Ipods, IPhones,Italian shoes, French wine cars and other rather useless stuff they just have to have. They spend much more than they earn. But it was not a big problem because other families believed that the gizmos the guy was developing will be selling well and so he and his wife was able to borrow a lot. Because they were a rich family, they had their own money unit (say dollars). So all their outstanding loans were in dollars and they were able to print more, if necessary.
They lived happily and borrowed merrily until a crisis came - there was nowhere to borrow!
They had two options - stop spending, start saving. It would not be easy, because if wife does not uses a gizmo, the husband does not have money to pay for her cooking. So it would hurt a little.
But since they could print the money and borrow them, there was a second option that seemed so much better - just borrow from their own little printing machine and keep spending. Some might say that those money circled a little and left their happy family for some larger HD TV, but that would ruin this fairy tale. Instead, they kept borrowing from their printing machine, until ... It's time to go to bed, kids!

If you don't understand what this fairy tale is saying, you have probably lived on a remote island for a last year or two. Or you study economics. In any case, read guru Krugman. If you think spending will get us out of the mess it get us into, you should get a PhD, too. Honoris causa.