Bus numbers

Back before Covid, before the bus reorganizations but after they first started running them to this town, I'd drive to or be dropped off at the bus stop and ride downtown. I never saw more than 15 people on the (rush hour only service) buses, and usually about half that. I liked the convenience--I could use my time much more usefully than I could driving--but wondered just how heavily the town was subsidizing the ride.

The city then expanded bus service, including an in-town only route, which I have used twice. Once again, I wondered: how much was that subsidized?

Budget shortfalls are bringing a lot into public view. Last year Metro Bus+Paratransit had 113,951 riders on this town's lines. Counting weekends as a single day, that comes to about 9 riders per bus run. That's more than I expected, based on what I see through the windows, but OK. To be clear, there are two circulator lines, and one which links to Madison downtown. I just assumed everybody rode the circulator.

The contract with Metro this year is for 2.04 million. That's about 18 dollars per ride, all lines included. Fares were about 2 bucks (and there is some state aid, but that doesn't reduce the cost per ride, just changes who pays), so the city itself subsidizes 600,000 -- a bit over 5 bucks a ride.

Madison Metro got itself a reputation for exploitive contracts with the suburbs, but 18 dollars a ride? You'd have to put 2 people on every seat to make 2 dollar fares alone pay for the contract.

For the in-city short hops, a taxi costs less than the real price for the bus ride. I wasn't expecting that.

Best choice

A puzzle showed up in my Facebook feed. Two doors. One says you get one billion dollars right now. The other says you get a dollar right now, but it doubles every day. Which do you pick?

Three ways to choose come to mind. The mathematically naive will pick the billion right now, figuring that the other would take too long to do anything useful. Somebody with a little more math, but economically naive, knows that in a month the doubling dollar will grow to be more than a billion dollars (except in Feb, where it's only 268 million or 536 million in leap years).

But the third way notices that in 40 days the value of that dollar becomes over a trillion dollars, and in 50 days each dollar will have started to lose value since there'll now be $1125 trillion to chase only $113 trillion of world GDP. A dollar will then be worth 10 cents, and in another ten days a hundredth of a cent. You can safely assume that panicked hyperinflation would cause everybody to just abandon the dollar entirely.

Or you could decide that neither selection would be good for you and be content with what you have. (Is that playing fair?)

Ambitious plans for banking in Liberia

CBL Unveils National Electronic Payment Switch to Drive Cash-Light Economy and Financial Inclusion

The Central Bank of Liberia has officially announced the upcoming launch of a national electronic payment switch, a transformative initiative aimed at modernizing Liberia’s financial infrastructure, promoting financial inclusion, and reducing reliance on physical cash.

What's wrong with this picture?

Yep, electrical power is unreliable, even in Monrovia. And the climate isn't kind to electronics.

“If someone in Liberia can pay for goods in Ghana without U.S. dollars, that’s not just convenience—it’s transformation,” Ngafuan said.

OK, that seems like a nice ambition.

“Digitization helps fight corruption. You can trace every payment,” Balogun said. “We, the banks, are ready to support."

That, if true, sounds like a good reason for the system to never get implemented. Who in the government has an interest in fighting corruption?

Although it opens the door for spying on business rivals, so maybe... And it suggests ways of doing taxation or asset seizure conveniently.

Pennies

Goodby to the penny? FWIW, the argument that it costs more to make it than it is denominated at isn't quite as compelling as it seems--the question isn't how much it is denominated at but how much value it provides to the people who use it. Is is worth more than 3 cents to be able to break prices down to the penny over the lifetime of the coin? If almost everything is going debit or credit, maybe not. OTOH there are good reasons for not wanting every transaction to be electronic: fragility and the risk of 3rd party control of transactions.

Althouse cited a NYT article that noted that although the Treasury is mandated by law to produce coins, the number is at the discretion of the Treasury Secretary, and the number could be 0.

How the mighty are fallen. A penny used to be about a day's wages. But 1600 years of Royal coining dropped the value by orders of magnitude.

I hadn't known that Isaac Newton floated the idea of copper pennies.

Currency defacement

Can you guess what this was about? Nollywood star sentenced for stepping on naira notes. "A Nigerian actress has been sentenced to six months imprisonment for tampering with the currency after she was filmed spraying and stepping on newly issued naira notes last year."

"six months imprisonment with an option to pay $250 fine"

I wonder what would have happened if she'd lit a cigar with a 1000 niara note.

From a Nigerian source: "It was at a time there was a severe scarcity of Naira notes following the Central Bank of Nigeria (CBN)’s withdrawal of old 200, 500 and 1000 Naira notes from circulation and replacement of the affected currency notes with newly designed versions which were hard to come by at the time." I'm guessing that flaunting wealth that way when the economy was in a mess from lack of currency was what led them to charge her with currency defacement. Not because she'd done anything substantively wrong, just that she'd angered a lot of people...

Wealth

"I give you great thanks. I cannot, indeed, understand the way you live, and your house is strange to me. You give me a bath such as the Emperor himself might envy, but no one attends me to it: a bed softer than sleep itself, but when I rise from it I find I must put on my own clothes with my own hands as if I were a peasant. I lie in a room with windows of pure crystal so that you can see the sky as clearly when they are shut as when they are open, and there is not wind enough within the room to blow out an unguarded taper; but I lie in it alone, with no more honour than a prisoner in a dungeon. Your people eat dry and tasteless flesh, but it is off plates as smooth as ivory and as round as the sun. In all the house there is warmth and softness and silence that might put a man in mind of paradise terrestrial; but no hangings, no beautified pavements, no musicians, no perfumes, no high seats, not a gleam of gold, not a hawk, not a hound. You seem to me to live neither like a rich man nor a poor one: neither like a lord nor a hermit."

I like this passage from That Hideous Strength: it illustrates the absolute and relative aspects of "rich" nicely. "Absolute:" surplus tasty food, useful medicines, comfort, amusements, recreation time. "Relative:" servants, people who envy you or honor you, more stuff than people you know. "When good things increase, those who consume them increase. So what is the advantage to their owners except to look on?"

"Relative" wealth: "To reign is worth ambition though in Hell: Better to reign in Hell, then serve in Heav'n."

"Relative" wealth: Aesop: Avarice and Envy

Since money is a promise, how do you prove to yourself that you have money? Is it numbers on a page, or the stuff and services you get when the promises are redeemed (or dangled)?

For money I suppose you can also read "power," except that there's no balance sheet to measure power--but the action of it is similar. You get people to do what you want.

Inflation robs us all, but hits the "absolute" wealth harder--possibly one of the reasons the powers that be aren't generally worried about it.

Either category can make a needle's eye for us to go through, but I suspect the "relative" is more dangerous.

Security

A largish proportion of the complications in data archiving and retrieval had to do with authentication and privileges (those are not the same animal). I was a little surprised at the bank yesterday.

I'll omit identifiers.

I've been the treasurer of an association for a few years, largely because I was willing to take the not-very-onerous job. A new and more experienced volunteer appeared, and the minutes of the meeting approving a new treasurer were finished. So the old and new treasurer trooped down to the bank.

The bank's small business rep was new to me and I to the rep, but the rep took me at face value, and the minutes at face value. The rep wanted the ID of the new treasurer, but seemed quite content to remove one of the signatories on an account without reference to either my ID or my signature, and add a new signatory without authenticating the minutes.

I pulled out my drivers license anyway, part way through the exercise, to show that I was the person registered in the account and referenced in the minutes. I hope it was a learning experience.

Maybe my honest face was good enough.

crypto

I've been dubious of cryptocurrency.

Aside from its volatility--which makes bitcoin pricing unpredictable ("Nope, the price is now .00457 bitcoin. Plus the tip.")--it wasn't obvious that the tools for manipulating things were either as bulletproof or as anonymous as advertised. The link doesn't quite describe how the feds rolled up bitcoin networks, or under what circumstances they can trace transfers now, though it says some private companies can do some of the work.

But I wonder what happens if some obscure number theorist (e.g. working for the NSA) discovers a new algorithm that, as an unexpected side effect, makes blockchains easier to maliciously manipulate.

If our government endorses a cryptocurrency, I'll be certain that they have backdoors to it. Why would they otherwise? Seriously. The value of the dollar is in the monopoly of its production by and the trustworthiness of the US government. Without ways of verifying that monopoly, it loses a good deal of its value.

Trust

"The love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs."

If money is, at its root, a promise that other people will do things for you, a love of money is like a hunger for promises from people. Granted, it isn't good for man to be alone; we need to be in relationship with other people. But why is there often no limit to this hunger for promises from people? Because you discount them, and need more promises to account for the discount? Because you can always imagine problems greater than the promises will meet? And as your wealth grows, losing some becomes another and greater risk. Because it's the wrong treatment for your fears and doesn't work?

When good things increase

those who consume them increase. So what is the advantage to their owners except to look on?

How many cabins can you sleep in at once? If the sea is a trifle too heavy, or the sunset a hair too bright, you have your choice of suites on different levels and sides. Maybe the boat is steadier in high seas.

There's room to bring along each specialist masseuse--even the one for your big toes. You can bring along an orchestra for live music. And a film crew to record your every gesture. Your harem, of course, just in case your favorites don't suit you one evening. And cooks and cleaners and doctors and police to manage that mob. And... give me a hand here ...

You can't spend quality time with as many passengers as could fit on that thing, so you must want them to enjoy themselves without you, or give that impression to others. So you're "looking on," just as predicted.

Financing great art

"Gambling saloons supported the great Italian opera houses, from Naples' St. Carlo to Milan's La Scala. These were vast halls of roulette and faro-tables adjoined by the theatres. Rossini, the most famous composer at the time, got 200 ducats a month as musical director of San Carlo, but received 1,000 ducats as his share from the house tables."

Banknotes

Spare a moment to think of the problems in a cash economy with a cash shortage. (Don't joke about digital money. Please. Just don't.)

Liberia has a shortage of cash. Within living memory people have made change by tearing a bill into pieces. When banks dispense cash, they often hand out those mutilated banknotes, which are worth ... what?

But there's more. The banks are complaining of a nonperforming loan rate of 56%, which of course means that when someone comes to get money out it puts a strain on the bank. A few years ago several banks started repaying deposits made in US dollars in a mix of US and Liberian dollars. That caused quite a stir at the hospital when payday came.

They are also complaining that:

Governor Tarlue named several reasons behind the money shortage which he said was exacerbated by COVID-19, the high demand of money during the festive seasons (July 26 and December 25), the limited ATM machines in the country (157) and the December 8 Special Senatorial Elections. Chief among them, he said, include the circulation of huge quantity of money outside of the banking sector. As of December 2020, he said L\$25.3 billion was in circulation in the Liberian economy, and of that amount, the currency outside of the banking sector was L\$22.5 billion, representing 89.4 percent of the money in circulation.

Except where is the money? Hiding under mattresses? You'd think that some of it would have to creep out from time to time to buy groceries and cell phone minutes and fabric and other everyday items. How actively is money really circulating in the markets? I can't find out, but reports say business is bad.

The government bought some fresh bills last year--or maybe they didn't--at any rate there weren't any fresh bills when they went looking. They want to print 27 billion new L\$, but they don't have the money to do it (about \$21 million).

The exchange rate isn't helping--imports cost more.

I can't speculate with any certainty, because news is unreliable at best. I doubt that foreign speculators have been buying up Liberian dollars (as one rumor has it)--I haven't thought of a way they'd make money that way. Maybe I don't have a dishonest enough mind. Probably this is an unintended consequence of something else.

Lockdowns haven't helped cash flow. FWIW, Liberia has had 84 deaths attributed to coronavirus--malaria dwarfs this by orders of magnitude.

Public health expenditures

You will be shocked (Shocked!) to learn that there may have been some mishandling of COVID-19 (Wuhan 2019A ?) funds in Liberia.

The headline says that millions vanish into thin air, but of course the story itself differs: A bit less than a million in earmarked funds was "co-mingled" with Department of Health funds and some of the spending isn't properly accounted for.

They allotted US $1800 for "Rumor Management." That's either way too much or way too little for Liberia. Be that as it may, look at some of the approved expenditures:

I suppose a lot of people from out of town have to come to Monrovia to work on the project. I don't see Thinker's Village in that list. I wonder if they're still open.

A giant scam

BBC has an interesting story about OneCoin--how it started out as a blockchain currency without a blockchain, got hyped by a multilevel marketer, and is still selling despite the disappearance of the founder.

Bjercke would get an apartment and a car - and an attractive annual salary of about £250,000.

"I was thinking: 'What is my job going to be? What are the things that I'm going to have to do for this company?'" he recalls.

"And he said: 'Well, first of all, they need a blockchain. They don't have a blockchain today.'

"I said: 'What? You told me it was a cryptocurrency company.'"

The agent replied that this was correct. It was a cryptocurrency company, and it had been running for a while - but it didn't have a blockchain. "So we need you to build a blockchain," he went on.

and then

In May 2015, already a very successful MLM seller, Igor Alberts was invited to a OneCoin event in Dubai, where he met lots of people, all apparently making fortunes with this new currency. Dr Ruja herself made a powerful impression too, with her "princess's dresses" and her vision of a financial revolution. Igor returned with a new mission - and gave new instructions to all the salespeople in his downline: stop whatever you're doing, and start selling OneCoin. "We gathered the teams together and we started to work like crazy," he says. "We made in our first month almost €90,000 out of nothing. Bang!"

After Ruja disappeared, people started trying to track the money

I went to see Oliver Bullough, an expert on what he calls Moneyland - the shadowy parallel world where criminals and the super-rich hide their wealth. The problem, he explains, is that following the money isn't as easy as it sounds, because criminals structure their companies and bank accounts in such a way that their assets seem to disappear. "They still exist", he says, in his garden near the village of Hay-on-Wye. "You can still use them to buy things, you can still use them to buy political influence and nice houses and yachts. But when it comes to someone trying to find them - whether that's a journalist or a police officer - they are invisible."

...

Ruja bought a very large property in central Sofia. Technically it was owned by a company called One Property. One Property was owned by another company called Risk Ltd. Risk Ltd was owned by Ruja, but was then transferred to some unnamed Panamanians, but it was still managed by another company called Peragon. And Peragon was owned by another company called Artefix, which was owned by Ruja's mother, Veska. And then in 2017, the ownership of Artefix was sold to an unknown man in his 20s.

...

I show his results to Bullough, who immediately notices how many British companies there are. "British companies are the companies of choice," he comments. "They're very easy to set up and they look legitimate."

...

"This is supposed to mean that you can no longer use a British company to hide behind," he says, as he scrolls down the page. "Oh, hey presto, they haven't filed a person with significant control. That's illegal… That is an anonymous shell company, as anonymous as anything that you can buy anywhere in the Seychelles or Nevis or the Marshall Islands or Vanuatu."

So much for following the money. In an interconnected global economy, assets can simply vanish, and you end up chasing shadows.

And there are some hints that some Eastern European crime mobs got involved too. And several billions went astray--and not just from first-world investors. It turns out that multi-level marketing reaches all the way to poor farmers in Uganda.

Devil in the details

In the story about new monetary policy of the Central Bank of Liberia you find these two comments:

“It is becoming increasingly difficult for a cash based economy to contribute on a cash based. the sooner we put that in the back of our minds and look for options using electronic works, using other digital financial tools, increasing the numbers of ATMs and increasing the numbers of points of sales, the better it becomes for all of us,” he said.

and

“Whenever we go the bank, they give us tear (torn) money. And when we want our money, they will say system down. It should not be like that. The system should not be down for us because when we go there to deposit our money, they can’t (never) tell us system down. This system down English (talk, excuses) is not doing well for the marketers. Let the system be up for us this holiday season,” she said.

Universal electronic transactions when the bank's systems are either down or lied about? That has got to inspire confidence.

One little change was that for the month of December, they are suspending the 25% policy--25% of all remittences into Liberia have to be converted into Liberian dollars, but for December you can keep your hard currency. A little something for their 25'th.

Teenage money

During a conversation with my Better Half, she suggested that the 50's and 60's had a sea change in entertainment, teenagers had money and entertainers were eager to flatter them.

Which led me to wonder: where did they get their money? From the number of economic illiterates who litter this county I incline to a sneaking suspicion many just got it from their parents' miraculous money well, but apparently the same sort of confusion was popular back in the 20's and 30's.

Some teenage money was earned, but at least since the 70's that's been dropping assuming the years selected are representative: from 1974 to 2014 the proportion of teenagers with a summer job dropped from about 57% to about 33%--a bit over 40% decline. I'd like to know what it looked like from the postwar era on--I'd be interested in seeing if it rose. Since a lot of students didn't finish high school, I'd think it started pretty high--the graph at the link mixes students and the self-supporting.

It may be hard to tease out the information--maybe the details exists for married vs unmarried teenage employment. Before I go diving, does anybody know an easy place to find out?

(I think the decline in summer jobs is terrible. Education isn't just sitting through classes and taking tests.)

Wealth and choice

More money usually brings more opportunities, which is always good until it isn't. Too many choices and you wind up wasting time context switching, not to mention the bright ideas that never go anywhere. Remember Toad of Toad Hall? If you haven't read The Wind in the Willows, do.

I have 4 major projects I'm working on. That is probably 3 too many. I can flip a coin, or ask which is more likely to be finish-able, or rotate a week between each--but it needs a choice.

Sometimes being "spoiled for choice" becomes "failing to choose." I look at some of what our forebearers did, and sometimes they seem amazingly productive, especially given the relative size of the population and the fewer opportunities available then.

Maybe the impression is wrong--perhaps we have the same proportion of Jefferson's now as then, but the centralized nature of our society means we only see the best and luckiest of them, with the rest lost to view.

Or maybe we're swamped with a-muse-ments in the full sense of that term, and lose much of our creative time to passive entertainment.

Or perhaps we find it hard to choose, and do too many trials and too few commitments. Clint Smith said "Beware the man who only has one gun. He probably knows how to use it!"

I have known very few rich people (and them not very well), and no very rich people at all. I discount stories about them, but one thing crops up over and over--the heirs generally lack the concentration of the ones who formed the fortune. Is that a natural side effect of the increase in opportunities, as well as the result of a comfortable existence with nothing to goad them? (I know about regression to the mean, but if that plays a role you also expect to still see greater ability than average.)

Authenticity in China.. and money

This Aeon article claims that Chinese ideas about original and copy differ substantially from Western notions--that if something is made in the spirit of the first creation, and I gather (perhaps wrongly) with the same materials and tools, it effectively is a new original. It sounds nice and plausible, and it looks like there is a history of this attitude. I don't have the scholarship to confirm or deny, but I think I can claim that the rule Byung-Chul Han proposes isn't universal. (In the process I got sidetracked.)

It certainly didn't apply to paper money -at least not from the point of view of the Emperor, who prescribed execution for copying it (although in eras when the money was badly depreciated and deprecated, the penalty might only be a fine). And if the provenance is culturally important--this belonged to Duke Zhou--I'm not persuaded that a buyer would be as satisfied if the piece were more recent. (The artifact would no doubt still be valuable, if Han is right.)

Read the Aeon article--and the one about paper money is interesting too:

A most original solution to the counterfeiting problem occurred in Sung times after a large shipment of counterfeit money had been seized. During the discussion as to what should be done with the counterfeiters, one court official stated that the current policy of beheading the criminals and destroying their money was a mistake. He proposed instead the following: “If you put the official imperial stamp on the counterfeited paper, it will be just as good as genuine paper. If you punish these men only by tattooing them, and circulate these notes, it is exactly as if you saved each day 300,000 copper cash together with fifty lives.” It is said that the proposition was adopted.

and

I have concluded, therefore, that the representation of only nine coins, or 90 cash per string was deliberate. But how can 900 cash be the same as 1000 cash? The explanation, I believe, lies in the fact that during the Hung-wu reign 900 cash passed for 1000; just as 770 cash represented a string in Sung dynasty times and 800 during the Chin dynasty. In other words the government’s financial arm, the Board of Revenue, must have set the relation of cash coin to the value of a string by decree. Thus the official value of cash in the marketplace would vary from time to time.

why?

When emperor Shin Tsung of the Posterior Chou ascended the throne in 915AD, he was in great need of funds. He seized over 3350 monasteries and then gave orders to melt all Buddhist bronze images found there so that they could be turned into cash. The emperor declared that Buddha himself would raise no objection, having in his lifetime given up so much for mankind. The shortage of money also caused the emperor to send a fleet of junks to Korea to trade silk for copper with which to mint cash coins.

Bitcoin

Lubos Motl takes an interesting approach to thinking about Bitcoins: think of them as stock in a company that doesn't pay any dividends. Or hold any assets.

Dexterity

I can't remember when I last saw the old large dollar or half dollar coins, and I haven't seen any of the new dollar coins in several years. With half-cent coins gone the way of the passenger pigeon, that leaves a very simple mix in the pocket--quarter, dime, nickel, penny--and loose cough drop. I can shuffle around for a moment or two and bring up what's need for change, plus maybe a little bit extra that came out in the same grab.

Now double the number of coins.

It is much faster to pull out my wallet for some paper than to try to get my fingers to remember what those odd sizes mean. I think that was about \$19 worth of change there.