# The Spectre of Math

## February 27, 2014

### Numbers

Filed under: Economics,Politics — jlebl @ 12:43 am

When reading news, one should do some quick calculations to test for ridiculousness.  It really makes reading news far funnier.  Let us look at the 19 billion dollar deal where Facebook bought WhatsApp.  It is especially hilarious if we interpret this as how much do we as a society value WhatsApp versus some other things.  These are based on just quick googling, but they are for just eyeballing the thing, not to be taken exactly.

1) Minimum wage hike.  There are about 3.6 million people at or below mimimum wage [1] (2012 data).  If we suppose that they would work 250 days a year for 8 hours a day, the current $2.85 proposed hike ($10.10-$7.25) would amount to $2.85 \times 8 \times 250 \times 3,600,000 = 20,520,000,000$. So about the same. Facebook could have paid everyone on minimum wage the hike for a year. But of course I’ve overestimated I doubt everyone on minimum wage works 8 hours a day 5 days a week. 2) NASA budget is about 16 billion in 2013 [2]. So WhatsApp is actually worth more than all that NASA does in a year. 3) Nominal GDP [3]. Czech Republic is about$196 billion.  Ten WhatsApps is the GDP of the whole country of 10 million people (where WhatsApp has 55 employees, so 10 of them have 550 employees).  Jamaica has nominal GDP of $13 billion or so. WhatsApp is way more than that. OK, you say, that’s just one year. Suppose that WhatsApp (what it does) works out to working for 5 years before it becomes obsolete. That’s 3.8 billion per year. The GDP of Cayman Islands is$3.3 billion.  And that’s where Facebook is taking its profits to avoid paying taxes [4].

## April 13, 2012

### Priorities

Filed under: Economics,Politics — jlebl @ 6:26 pm

Two things I saw recently 1) NASA budget for climate research is 1 billion (for all those satellites and all that), 2) Facebook buys instagram for 1 billion.

Now we can see where our priorities (as a society) lie. What I don’t get is, that instagram has software that a reasonably good programmer could have done in a few weekends of binge hacking. It does nothing really new. You could even take fairly off the shelf things. Perhaps the servers and the online setup might be costlier, but still, nothing all that strange. To think that this is worth to us as much as figuring out where the next hurricane will hit, or when will the ice caps melt is “interesting”.

Though it is not totally out of sync with what else is happening. When the entire UC system which is responsible for several nobel prizes and innumerable new cures for diseases and leaps in terms of understanding the world, not to mention educating a huge number of students, when that system has a budget hole the size of one CEOs bonus, and it’s a huge hit for the university. Something is off in priorities. Actually there is a very good likelyhood that this CEO will die of some cancer that wasn’t cured because we don’t fund science enough.

## February 29, 2012

### Devil’s in the details

Filed under: Politics — jlebl @ 8:40 pm

It seems that not only did some democrats vote in the Michigan republican primary, satan himself also voted. Check the primary results in Mackinac county (e.g. on http://elections.msnbc.msn.com/ns/politics/2012/Michigan/Republican/primary at least this was the data on wednesday)

The final result in that county was very close. It was by one vote for Romney, but you should check how many votes did Santorum get:

Romney: 667 (41%)
Santorum: 666 (41%)

## February 22, 2012

### Exponential growth (and CEO pay)

Filed under: Economics,Mathematics,Politics — jlebl @ 11:17 pm

So CEO salary has increased by approximately 9.7% adjusted for inflation every year between 1990-2005 [1] (that is approx 300% increase over that time, so 4 times what they had in 1990). Anyway, that has a doubling time of $\frac{\log 2}{\log 1.097} \approx 7.5$ years. Now median CEO (among the top 200) made approximately 10 million a year in compensation in 2010 [2]. In 2009 there were about 8.3 trillion dollars in existence [3]. Anyway, approximately a CEO makes a 1 millionth of the money in the world, or in other words, if we had a million CEOs we’d exhaust our money supply. It takes about $\log_2 1000000 \approx 20$ doublings to get a million. Hence in $20\times 7.5 = 150$ years one CEO will make all the money in the world. And this is all inflation adjusted.

But we don’t have to go so far to get into trouble. Now we did talk about the top 200, so when would the top 200 make all the money in the world. Well that requires only $\log_2 \frac{1000000}{200} \approx 12.3$ doublings so $12.3 \times 7.5 \approx 92$ years. OK, so in less than 100 years, the top 200 CEOs will suck out all the money in the universe.

Anyway, the problem is the following: The companies are not rewarding an individual CEO for good performance. They are rewarding all future CEOs. The thing is, that there is no “starting salary.” A CEO that just started is (statistically) making about the same as the one who’s been around for quite a while. If you would start all CEOs at a base salary, then one particular CEOs salary could rise at 10% a year because he’d be with the company only a fixed number of years, the problem would be manageable. Now to whatever extent there is anything like a “starting salary” the increase an individual CEO makes is even higher than 10% a year. Essentially the starting salary is increasing at 10% a year.

Let’s look at even a more realistic example of how quickly do we get into trouble. The CEO salary can easily be even 1% of the revenue for the company [4]. In fact some small private colleges are paying 1% of their budgets to their university president, a group where similar thing has happened. Well, now think about this doubling. If it is 1% now, it will be 2% in 7.5 years, 4% in 15 years, 8% in 22.5 years, 16% in 30 years, 32% in 37.5 years, 64% in 45 years, and we get 100% at less than 50 years. So in less than 50 years the entire revenue would have to support the CEO. Now you say, well but the revenue is also growing. Not so fast, the 10% pay increase is overall, that includes companies that did badly and those that did well. One would think that the growth of revenue on average (including failed companies) is not that much more than inflation. And this is adjusted for inflation. In any case CEO is definitely growing a lot faster than the economy (and hence your average revenue), and hence you hit the wall sooner or later. Even if we lob off another 2% to adjust for growth, the doubling time for CEO pay is still 9 years.

Of course a problem would appear a lot earlier than in 50 years. So it’s not only the “rich get richer” and “things are not fair” argument. This state of affairs is actually unsustainable even in relatively short period of time (within our lifetimes). I think people don’t understand that exponential growth is really really fast. That’s why pyramid schemes never work. It’s why Ponzi schemes usually fail far quicker than the perpetrator hoped. 10% increase a year does not seem like much (just like 10% return on investment doesn’t seem like that terribly much).

[1] http://www2.ucsc.edu/whorulesamerica/power/wealth.html (better sources exist, but I am too lazy to search further).

## January 21, 2012

### When will the beheading start

Filed under: Economics,Politics — jlebl @ 10:40 pm

It is always good to know when will other people want to cut off your head. Let us look at when were most heads cut off: that was probably the French revolution. OK, what made people want to cut off other people’s heads? Extreme inequality. OK, what was the Gini coefficient? Well, one estimate is 59 [1]. OK, so if we look at the US Gini coefficient it seems to be rising approximately linearly since 1980. In particular, US Census Bureau (via Wikipedia [2]) has the following data:

 1980 40.3 1990 42.8 2000 46.2 2009 46.8

Let us do linear regression to obtain:

 2020 50 2030 52.4 2040 54.8 2050 57.1 2058 59 2060 59.5 2070 61.9 2080 64.3

So, I guess people will start trying to cut other people’s heads off around 2058. We’re all safe till then.

[1] Christian Morrison, Wayne Snyder The income inequality of France in historical perspective, European Review of Economic History, 4, 59-83.

[2] Wikipedia.org, Gini Coefficient.

## June 27, 2011

### We have to kill you to save you

Filed under: Politics — jlebl @ 10:01 pm

This is funny in a very dark sort of way. Let’s do some numbers: Suppose that after some time about 100 people a year die from extra radiation exposure due to all these scanners. That’s a fairly low number, it would be impossible to even notice this number from the cancer statistics. Given the millions of people that get scanned every year and that spend sufficient time near those scanners, that’s a tiny percentage. Now let’s see, let’s suppose we take the last 50 years of plane travel before 2001 and we notice that number of people killed in terrorist attacks including 2001 is a little more than 3000. That’s about 60 a year. Let’s suppose that no terrorist attack ever happens again (yeah right). Still we’d be killing almost twice as many by our security measures.

I wish my granddad were alive, this is what he did (nuclear hygiene). It would be nice to ask if 100 is a reasonable estimate.

## January 28, 2011

### Wrong dictionary

Filed under: Politics — jlebl @ 11:43 pm

I must be using a wrong dictionary. Apparently Mubarak is not a dictator. I thought the whole, election-with-only-one-candidate trick didn’t work, but apparently … (sorry my mistake, in one of the elections others were allowed to run, but only he was allowed to win, big difference!)

## January 11, 2011

### Assasinations, rhetoric, blame

Filed under: Politics — jlebl @ 6:02 pm

So everyone is in the “who’s to blame” mode now. On one hand there is the “It was all Palin’s/Beck’s/Limbaugh’s fault” camp, and on the other side there is the “no it was just a deranged lunatic” camp. Can’t the truth be somewhere else. Why do we need a single direct cause for everything. Could it be that he was a lunatic, and could it be a combination of factors? I am sure that the political vitriol is definitely somewhat to blame. That doesn’t mean it is entirely to blame. But if I am insane and all the time on the radio/tv I hear hyperbolic rhetoric about hiltler this stalin this, communist that, reload, death panels, spilling blood, etc… then perhaps I will just be reinforced in thinking that I may be right about the government doing mind control rigging elections and taking away my rights and blood must be spilled. To a deranged person watching some TV shows it might seem as if the hyperbolic nonsense is actually completely mainstream. I mean most of the media seemed to sometimes believe some of the hyperbole was mainstream. During all the “death panels” talk, the media really did make it sound like most of the country thought that the government wants to kill our elderly.

My other point has to do with a czech saying about the “duck that was shot (who you can always hear).” If Palin thinks that the gunsights had absolutely positively nothing to do with what happened, than why did she take them down so quickly. If she topought about it, they would have been taken down right about the time the original controversy arose. She could say “I didn’t mean those to be gunsights, but if people are misrepresenting it that way, I’ll make it something else.” Instead she kept the graphic on in spite. That doesn’t mean that those gunsights did have any effect on the shooting. But it means that Palin knows that a connection can be made. If so many sane people made the connection to gunsights and shooting … why are we thinking that insane people won’t. That doesn’t mean Loughner did, but someone like him might.

Does it matter if Loughner was primarily motivated by right or left violent hyperbolic political rhetoric? If he was or wasn’t doesn’t mean there can’t be somebody else like that. What he proved is that there are people out there that are capable of an act like this. For whatever reason. If there are people that are capable of doing this, why are we egging them on?

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