Friday, December 08, 2006

Toolmaking and Loans

My latest obsession is -- I've lent out some money, and am aiming to make 10-11% annual interest (so far, I've made about $130 in interest, but have $150 in loans that haven't been paid in a couple of months).

I've given myself a crash course in statistics in the last month or so, taking data on Prosper listings and loans and running it through the "R" statistics package. I've been working on seeing if certain words make it more or less likely for listings to get funded, but needed a way of factoring out all the numbers associated with the loans (for example, how likely is it that a "B-grade" borrower asking for $5,000 at a 13% interest rate will get their loan funded?).

The results turned out to be interesting, even without doing the text analysis, and I've created an online tool to help borrowers improve their loan listings.

Sunday, November 12, 2006

Zero, One, Infinity.

When thinking about solutions to problems, there are three interesting numbers: zero, one, and infinity.

Take the issue of gay marriage. In most states, the answer is one: there is one case where marriage is OK-- a couple consisting of a man and a woman.

In Massachusetts we currently have the infinity solution-- any two people, regardless of sex, can get married. Two men, two women, two transgendered people, two hermaphrodites, or any "one plus one" combination works.

But there's another possible answer: zero. If you can get away with it, zero is usually the best answer; it's as simple a solution as possible ("do nothing"). For marriage, the zero answer is get the government out of the marriage business. Why the heck is government involved in marriage in the first place? "Marriage is a sacred institution" say the fundamentalists, and they're right!

Churches (of all flavors) are the realm of the sacred, not government.

Thursday, November 09, 2006

Minimum Wage... yee-haw!

The democrats wanna raise the minimum wage. Sigh.

They complain about the destruction of Main Street and the rise of Wal-Mart, and then go and pass laws that hurt small businesses and help MegaBusiness. Like raising the minimum wage (Mega Retailers use fewer employees to sell more stuff, so they're hurt less when the minimum wage goes up). Or passing Yet More Regulations (National Retailer has a fleet of lawyers on staff to figure out how to comply).

Here's an experiment you can try at home: Pretend you're a poor-but-motivated entrepeneur, and you decide to stop working at Mega-Mart and instead start a small business in your apartment-- maybe cutting your neighbor's hair.

Ok, now go figure out: a) is it legal for you to cut hair for money in your town/city/state? b) what tax forms are you required to fill out? c) are you breaking any zoning laws?

Pretend you don't have a few hundred dollars to ask a lawyer and an accountant what the answers are...

Friday, November 03, 2006

The Lunatic Fringe

It seems to me a lot of libertarians reason themselves into the lunatic fringes of politics.

I'll use gun control as an example, because it's an issue a lot of libertarians love to debate.

The extreme, lunatic fringe position is "anybody should be able to own any sort of weapon they want, and should be free to do whatever they like with it as long as they don't physically harm somebody else (or somebody else's property) with it."

BUT: I believe there are some weapons that need to be regulated because allowing joe-random-person to own them poses a significant risk to the well-being of me and my family. You gotta weigh that risk against the benefits of the weapons.

Take shoelaces: There's a risk there. You might decide to take off your shoelaces and choke me to death. I'm willing to live with that risk (heck, even our "chicken-little" government still lets your shoelaces onto airplanes). Pocket knives are maybe a little riskier (I bet you can kill somebody as easily with a shoelace as a pocket knife, though). Carving knives, axes, chain saws, crossbows, muzzle-loaded muskets, rifles, revolvers, machine guns, dynamite, hand grenades, shoulder-fired surface to air missiles, Sarin gas... there's a fairly continuous range of weapons that vary from "useful tools that can be dangerous" to "weapon of mass destruction."

I don't want my neighbor to keep a nuclear warhead in their basement. Even if she's the sanest person I know, there's a very small chance she'll go nuts and blow me up. That tiny risk, multiplied by the huge consequences, outweighs any benefits she might get from owning such a dangerous weapon (I have no idea what the benefits might be, but I don't collect things-- maybe it would be a status thing, and if owning nuclear weapons was legal you'd have rich collectors competing to see who had the biggest nuke...).

It seems to me most libertarians don't see that gun control is an argument in the middle, grey area between outlawing personal ownership of shoelaces and outlawing personal owernship of nuclear weapons. Most non-libertarians don't see that, either, but I think it would be really helpful if libertarians were more honest in acknowledging that there IS room for argument, and that reasonable people will have different tolerances for risk and different ideas about how much weight to give to the benefit of individual liberty.

Footnote: Personally, I'd say regulating anything that can kill more than, oh, 6 people in a short period of time is perfectly reasonable. That would include cars (plow your car into a crowd of people and you can probably kill a dozen or two), but wouldn't include small handguns or shoelaces.


I'm mostly a libertarian.

I used to be mostly a Democrat, but I've become both more cynical and more optimistic as I've grown older.

I'm cynical about the ability of Government to solve our problems. Most of the really big problems (wars, genocides, environmental destruction) are either the direct or indirect result of government.

I'm optimistic about people, though. Most people are good, and most of the really good things that happen in this world are the result of good people doing great things (how cool is penicillin? Or the Nature Conservancy? Or Wikipedia?).

I'm also optimistic about our future. Soothsayers have been predicting worldwide doom for thousands of years, but overall things are getting better all the time. We know more than our parents did, and learn from their mistakes, and we're getting better at remembering and learning and sharing.