Rickshaw Arithmetic

My first journey to Dhaka, Bangladesh is nearing its completion and soon I’ll be landing in snow covered and frigid Columbus, Ohio. But today, while I’m still in Dhaka, I want to share with you some interesting socioeconomic rickshaw arithmetic. You’ll have to bear with my assumptions, but humor me, please.

In the metro Dhaka area there are approximately 12.8 million people (according to Wikipedia), let’s assume that half of those people are male. Every rickshaw driver I’ve seen in almost 2 months has been male, so I think it is a fair assumption. Let’s also assume that the ages of those 6.4 million males are distributed evenly from ages 1 to 60 (60 is the average life expectance of a male in Bangladesh). Most rickshaw drivers are between the ages of 16 and 35 (based solely on my observations and conversations with these gentlemen); I know I’m stretching here, but just go with me.

So what does all this mean? Well based on a recent number I read, there are approximately 500,000 rickshaw drivers in Dhaka. That means that 23.4% of the working males, ages 16-35, are contributing to society by peddling a rickshaw. Even if my math is dramatically off the mark, assign a significant margin of error and the number is staggering.

Now ask yourself, with the proper education and the “luxuries” we have access to in the developed world, how many of these men should have been engineers, doctors, poets, teachers, or consultants in the energy industry. Now imagine a nation with gender equality and think about the societal contributions that would be recognized as human capital is maximized.

I’ve discussed these thoughts with a few people prior to writing this blog and some have said I’ve painted a pretty bleak picture. I however, argue that there is a very bright future for all of us.

For me it is a simple reminder that the world has come a long way; and we have a long way to go.

Until tomorrow…     -bag

Red, White, and Blue

Veterans Day, or as some refer to it, Armistice Day, is celebrated on November 11th each year and honors the nearly 25 million veterans in the United States. I was curious what the significance of November 11th was for this day and after a brief bit of research learned that World War I officially ended on the 11th hour of the 11th day of the 11th month in 1918.

A year later, in 1919, President Woodrow Wilson declared the day Armistice Day, referring to the armistice treaty between the allies of the United States and Germany. It wasn’t until 1954, when President Eisenhower signed a bill to expand Armistice Day, that the name of the holiday officially changed to Veterans Day.

As a Nation we have since fought tirelessly to defend our freedom. We slip through many days without mention of the men and women around the world weathering harsh conditions and facing hatred to protect our great Country. Today as you drive down the road search for an American flag pounding in the wind and let yourself relish in the blood stained red stripes, the purity of the white stripes, and the perseverance of the bold blue holding together the individual 50 stars.

Thank you to the Veterans that gave us today and God bless those soldiers tending to us tomorrow.

Until tomorrow… -bag

Side note: according to dictionary.com, an armistice is a temporary suspension of hostilities by agreement of the warning parties.

Global Recovery or Crisis? (revisiting last Thursday’s blog)

Last Thursday, October 29^th, my blog discussed an economic recovery in 2010. I stated my concerns of long-term issues related to the bailouts, but didn’t go into great detail.

Yesterday, I was reading the following article at WSJ.com (http://online.wsj.com/article/SB125729703390626817.html?mod=WSJ_hps_LEADNewsCollection) and thought that it addressed issues similar to the anxieties I raised, but expanded my concerns to a global scale. The article certainly provides additional statistics, which focus on the distress of cash-saturated markets, not just in the United States, but in many recovering economies around the globe.

If the bubble bursts in Asia prior to the U.S., how will our markets react? Will we slide below 6000 on the DJIA if it happens? Tonight I’ll just take comfort in my mother’s notorious line that “only time will tell”.

Until tomorrow…     -bag

The Gambler

Earlier this week, billionaire Warren Buffet made the biggest bet in his acclaimed career: a $44 billion wager on Burlington Northern Santa Fe, a railroad company. Many have rendered an opinion on his unique bid of an antiquated business, so I too will share my thoughts — you nailed it again, Mr. Buffet!

For the past 10 years I’ve preached, but only to a handful of close friends, that I’d love to own a railroad. Having visited Europe and witnessed firsthand the potential of an efficient, well-run railroad system, we’re missing the boat (or in this case the railcar) here in the United States. Notorious for his ability to snatch up deals and put mass amounts of capital to the test, I’m a thrilled share holder. My only regret is that I haven’t accumulated enough B shares to “upgrade” to an A class share. I wish I had prior to the upcoming 50-1 split.

Nonetheless, I’m anxious to see the future of railroads in the United States. The engineer running this locomotive is first class and I look forward to following my small Berkshire railcar from Fort Worth to Omaha.

Until tomorrow…     -bag

I Love Election Day

Getting the opportunity to cast my ballot this morning still sends a tingle of excitement through my body. The opportunity to participate, the right to direct the future, and the obligation to make government the will of the people happens when you exercise your vote.

It’s easy to bash and be a cynic, “my vote doesn’t really matter, politicians do what they want anyway”, but that’s an excuse to be lazy in my opinion. The men and women that paved the path for us to walk into a voting poll and cast our vote, or better yet to show up at the board of elections and simply ask for and receive the documents to enable yourself to be a candidate, should inspire us all to exercise that wonderful freedom.

You might be Republican, a Democrat, liberal, conservative, or maybe even just floating somewhere in the middle, but do yourself and your children a favor and cast a ballot today. When you walk away and they hand you a sticker that shows you voted, don’t cast it aside, wear it and remember the medals that others are wearing that give you that freedom.

God bless America.

Until tomorrow…     -bag

Economic Recovery in 2010?

We’ve all felt the effects of the economic downturn in some capacity. We’ve read the despairing articles of the housing market, questioned the integrity of the banking industry, debated government bailouts, and compared this crash to the very worst in recorded history. A world economy has been shattered and certainly none of us know for sure if, when, and how it will be repaired.

As we look towards closing the door on 2009, with great anxiety of what retail markets might or might not experience on a quickly approaching black Friday, should we buy or should we short sell in the next year? Many economists have argued that recoveries usually begin prior to anyone noticing and only in retrospect are we able to see the initial trends ticking upward. Are we currently riding an artificial bubble with a correction looming yet again prior to year end?

I say not. Foolishly optimistic am I? Actually, I’m concerned not about the next few years, but rather an artificial bubble that lasts three to four years, and as those freshly printed bailout dollars begin to crinkle we will fall again into economic woes. Enjoy the roller coaster ride; it’s going to be a big hill. The experts preach, don’t try to time a market. I say don’t be greedy and you’ll find excellent guidance in making market decisions.

Until tomorrow…     -bag

America and Capitalism, I’ll Have Some of Each Please

One of the best definitions of capitalism that I have found reads: an economic system based on a free market, open competition, profit motive and private ownership of the means of production. Capitalism encourages private investment and business, compared to a government-controlled economy. Investors in these private companies (i.e. shareholders) also own the firms and are known as capitalists.

As election time draws near this definition is something that I want to make sure our elected officials, Republican and Democrat, align with. It is with growing concern that I question what our government views as “their” responsibility. Whether it is an auto manufacturer bailout or a Brad Gibson bailout, our system is designed as a risk and reward model. The failure of some provides opportunity for others, while short-term pains prevail with long-term prosperity.

Please let the invisible hand of the market guide us through these uncertain times and not the devaluation of another printed dollar.

Until tomorrow…      -bag

Heads or Tails: Gambling in Ohio?

Issue 3 in Ohio seems to be getting lots of steam heading into November’s election. I’ve been trying to dig my heels in to the topic and find out, “why not?” Aside from a moral conviction that gambling is wrong, where is the downside?

I’ve searched high and low for reasons that seem to make sense and so far nothing hits home for me. Some argue that the proposed tax rate of 33% is much lower than other gambling institutions. Personally, I believe that a lower tax rate might attract a larger investment from a more upscale casino. Others have argued that because it is a constitutional amendment it will be more difficult to change than if it were law. Constitutional amendments are easier to pass and give the voters the opportunity to cast their votes and directly impact policy. Gambling is an issue most elected officials would rather keep their regulatory paws off of for a variety of reasons.

So far I’m for issue 3 this November. Can anyone produce a solid argument “why not?”

Until tomorrow… -bag

Yea or Nay: Marysville Tax Increase

Marysville, Ohio 43040, the center of the earth for some of us, will have a half of a percent income tax increase on the ballot this coming November. It has been communicated that the funds will be used to improve safety services and there is no doubt in my mind that safety services deserve dramatic improvements. I would also agree that these types of improvements don’t come without a cost.

However, the inner core of my personal belief system leans slightly to the right on our political scales. Tax increases aren’t normally something that the political right pride themselves on bringing to the table, nor would I personally jump up and down in dramatic fanfare to support government spending more of my money.

For me, the issue is not whether or not safety services deserve better; they do, take the tour offered by the city and you’ll most certainly agree, the question is whether funding should come from a tax increase. Where then should the city get the money, you are probably asking. I would argue that a robust local economy, finding efficiencies in the city government, and providing Marysville with evidence that money is currently being spent wisely would go a long way in convincing me that the city deserves more of my families hard earned income.

As the national, state, and local economies recover the tax base will increase, giving the city of Marysville additional dollars to work with above their current budget. This doesn’t provide the instant gratification needed today, but it might help the city make some difficult decisions that will have beneficial long-term implications. Has the city explored outsourcing current services to reduce costs and overheads? Has the city released three to five year projections for revenue increases based on anticipated economic conditions improving? These are questions I don’t know the answer to and hope that residents will get more information on prior to Election Day.

I will use the example of the 7^th street repair and resurfacing project as an example of finding efficiencies and spending money wisely. I have never seen a street project executed so poorly, which most certainly didn’t save the tax payers money and has left local residents with a ridiculous street. If you’ve got a 4×4 I’d recommend taking a stroll on this street that is yet to be completed. Examples like this don’t send me to the polls saying, “Yeah this is a system that deserves more of my money, they’re doing a heck of a job with what I’m giving them already”.

I’ve yet to decide how to vote on this issue come November 3^rd and I’m hoping my comments will generate some positive conversations among Marysville residents. Your input, facts, and concerns will help me and hopefully others make the correct decision.

Until tomorrow…   -bag