Yesterday my slightly over two year old LG Versa gave up the ghost and I hurried to the Verizon Store to select a new phone. I’ve gone over to the dark side and gotten a smartphone, in my case a Motorola Droid 2 Global. Fortunately, I was able to save the contact list from my LG which had suddenly become insane.

I was pleased to find that there’s more standardization among phones than there was a couple of years ago, in particular I was pleased that the charger for my LG (which I dearly love for its USB connection) may be used on my new Droid. Same car charger, too, of course.

The features which made the Versa stand out a couple of years ago happily appear to be standard now. Android hasn’t proven difficult to learn or use. A bit clunky in some ways, I think. Most important of these is the apparent willingness of apps to hang around in limbo indefinitely. I downloaded and installed an app to manage tasks which appears to be a necessity under Android.

I also downloaded and installed a miniaturized version of the Opera browser—I prefer it to the built-in one.

I found the app store absurdly difficult to negotiate.

My Droid 2 Global expends a charge with alarming rapidity, so much so that I’m thinking of taking it back to have it looked at. Sitting idle overnight was enough to discharge it almost completely which doesn’t sound right—the old LG didn’t need charging for several days, even a week.

I haven’t tried the camera yet. I found the Versa’s camera horrible. Honestly, I haven’t been satisifed with any of the digital cameras I’ve had since my old Agfa (which I loved). But that’s the subject for another post.

Use of Botox may have deleterious long-term effects:

The study found that animals injected with Clostridium Botulinum type A neurotoxin complex (BOTOX, Allergan, Inc., Toronto, Ontario, Canada) experienced muscle weakness in muscles throughout the body, even though they were far removed from the injection site. The study also found that repeated injection induced muscle atrophy and loss of contractile tissue in the limb that was not injected with the toxin.

The use of clostridium botulinum type A neurotoxin complex makes some sense when it’s for a serious, therapeutic purpose, e.g. cerebral palsy. Use for cosmetic purposes? Not so much. Especially when it’s being used by the young. See also here.

Tyler Cowen has a piece at The American Interest on income inequality that’s worth reading. Here’s the snippet that jumped out at me:

The use of micro-data now makes it possible to trace some high earners by income and thus construct a partial picture of what is going on among the upper echelons of the distribution. Steven N. Kaplan and Joshua Rauh have recently provided a detailed estimation of particular American incomes.6 Their data do not comprise the entire U.S. population, but from partial financial records they find a very strong role for the financial sector in driving the trend toward income concentration at the top. For instance, for 2004, nonfinancial executives of publicly traded companies accounted for less than 6 percent of the top 0.01 percent income bracket. In that same year, the top 25 hedge fund managers combined appear to have earned more than all of the CEOs from the entire S&P 500. The number of Wall Street investors earning more than $100 million a year was nine times higher than the public company executives earning that amount. The authors also relate that they shared their estimates with a former U.S. Secretary of the Treasury, one who also has a Wall Street background. He thought their estimates of earnings in the financial sector were, if anything, understated.

Many of the other high earners are also connected to finance. After Wall Street, Kaplan and Rauh identify the legal sector as a contributor to the growing spread in earnings at the top. Yet many high-earning lawyers are doing financial deals, so a lot of the income generated through legal activity is rooted in finance. Other lawyers are defending corporations against lawsuits, filing lawsuits or helping corporations deal with complex regulations. The returns to these activities are an artifact of the growing complexity of the law and government growth rather than a tale of markets per se. Finance aside, there isn’t much of a story of market failure here, even if we don’t find the results aesthetically appealing.

And, of course, over the period of the last two years we’ve been subsidizing the financial sector with all our mights.

The entire article is worth reading but be aware that Tyler does a bit of bait and switch. While his characterization of the problems posed by rising inequality highlights the top 1% of income earners:

The numbers are clear: Income inequality has been rising in the United States, especially at the very top. The data show a big difference between two quite separate issues, namely income growth at the very top of the distribution and greater inequality throughout the distribution. The first trend is much more pronounced than the second, although the two are often confused.

When it comes to the first trend, the share of pre-tax income earned by the richest 1 percent of earners has increased from about 8 percent in 1974 to more than 18 percent in 2007. Furthermore, the richest 0.01 percent (the 15,000 or so richest families) had a share of less than 1 percent in 1974 but more than 6 percent of national income in 2007.

his analysis is primarily of the top .01%. As I’ve documented here before, honing in on the top .01% is taking your eye off the ball. The next .99% of income earners pose as much of a threat to an equal society as that top .01% does and there are a heckuva lot of rent-seekers in that next .99%.

Yesterday I wrote about bankruptcy as a solution to the fiscal problems of the states. Today Bruce Krasting has a timely post on the potential for bankruptcies among cities:

Here is a (surprising to me) chart of both state and municipal revenue for the past few years. Of no surprise is the sharp drop off of revenue at the state level. But the municipal revenue has continued to increase. Given the foregoing discussion on the sources of muni revenue it would seem certain that their income is going to decline in 2011.

I don’t know about city and county governments in other states but in Illinois cities and counties face a serious conundrum. By state law they’re primarily dependent on property and sales tax revenues—they can’t levy income taxes on their own. And the income streams on which those things depend, real estate values and retail sales, are both contracting or torpid.

Not so their expenses. Payrolls are up. Local governments’ share of pension contributions are up. And, worst of all, healthcare expenses, the greatest source of cost increases among local governments, are up.

As I’ve documented here previously, local governments are able to weather the revenue shortfalls resulting from an economic downturn but not the precipitous increase in healthcare costs they’re experiencing. There is no practical way that they can increase revenues to meet those costs.

More Krasting:

Over the past 30 years of the 18,400 muni borrowers only 54 have defaulted on their debt. An admirable track record. One that is unlikely to be continued over the next few years. Not a pretty picture for a muni investor. To top it off BABs (the last pillar of support for munis) is gone. I wouldn’t be at all surprised if some big Muni became the Greece of America in the near future.

I strongly suspect that 54 over a period of 30 years will be looked back on as the good old days.

There’s no shortage of talk about the dire budgetary straits that state governments are in these days and even some talk of states declaring bankruptcy:

Imagine a time a year or two into the future. A large American state has reached the limit of its ability to raise taxes and cut spending. It then is unable to roll over its debt. It defaults.

Imagine also that a hedge fund has bought a good deal of that debt in the distressed debt markets. It puts all that debt in a newly formed limited liability company, or L.L.C., and when the state in question defaults on the debt, the L.L.C. files a Chapter 11 petition.

And then the debtor (the L.L.C.) seeks to enforce that debt, as it is the only asset in the debtor’s bankruptcy estate.

“Impossible!” you say, since states enjoy sovereign immunity. Well, outside of bankruptcy they do. But in 2006, the Supreme Court held that the Bankruptcy Clause to the Constitution represents an exception to the normal rule of sovereign immunity. So maybe this little scheme might work, at least if the L.L.C. were given a few other assets to make the scheme a little less obvious.

There is one teeny, weeny little problem with this: the federal courts have exclusive jurisidiction over bankruptcy and there are no provisions under the federal code for a state declaring bankruptcy. Municipalities specifically have the ability to declare bankruptcy (if authorized by their states) but there is no mention of states and it seems to me that a federal judge would be far more likely to take other actions, e.g. forcing a state to raise taxes under mandamus, than he or she would to allow a state to go through bankruptcy proceedings.

In my view it would be extremely imprudent to extend bankruptcy to the states. The current system provides a sort of subsidy to a state’s bonds in the form of confidence that the state won’t simply abrogate its debt. Were bankruptcy to be extended to the states would it provoke a loss of confidence in state bonds? That doesn’t seem like a good thing to me.

A consensus of economists is predicting higher growth next year:

Economists have grown more optimistic about the outlook for U.S. growth next year, predicting the expansion will accelerate as 2011 progresses, according to the latest Wall Street Journal forecasting survey.

The 55 respondents, not all of whom answer every question, raised their growth projections for gross domestic product for nearly every period, including the current quarter. On average, the economists now predict GDP will grow 2.6% in the current quarter at a seasonally adjusted annual rate, up from the 2.4% growth they projected in last month’s survey. The economy grew 2.5% in the third quarter.

The economists now see stronger expansion in the first half of 2011, with growth picking up speed as the year progresses. For the year, they expect GDP will rise 3%. Meanwhile, they have reduced the odds of a double-dip recession to 15%, the lowest average forecast of the year, from 22% in September survey.

It’s a bit hard for me to identify the basis for such predictions. I would think that improved economic growth would require improvement in one or all three of energy prices, home prices, and unemployment.

Energy prices

LONDON—Crude-oil futures gained more ground on relief that China, one of the world’s global economic motors, refrained from hiking interest rates over the weekend despite rising inflation.

Stronger equities markets also provided some support to oil futures.

The front-month January Brent contract on London’s ICE futures exchange recently was up $1.48, or 1.6%, at $91.96 a barrel. The front-month January light, sweet crude contract on the New York Mercantile Exchange was trading up $1.24, or 1.4%, at $89.03 a barrel.

Home prices

NEW YORK (CNNMoney.com) — U.S. home prices fell 2% in the third quarter after having gained steadily since early 2009.

The S&P Case-Shiller Home Price Index has recorded gains in four of the previous five quarters, including a 4.7% jump between April and June 2010. That leaves national home prices down 1.5% year over year and off 2% compared to the second quarter, according to the Index, which was released Tuesday.

David Blitzer, chairman of the Index Committee at Standard & Poor’s, attributed some of the decline to the end of the government program that paid tax incentives to homebuyers but he pointed to other problems weighing on the housing market.

Unemployment rate

The unemployment rate edged up to 9.8 percent in November, and nonfarm payroll employment was little changed (+39,000), the U.S. Bureau of Labor Statistics reported today. Temporary help services and health care continued to add jobs over the month, while employment fell in retail trade. Employment in most major industries changed little in November.

On top of that employment has declined through the year.

I can only speculate that economists’ views reflect the Wall Street/Main Street divide that we’ve seen operating for the last couple of years. It’s quite possible for the financial sector to grow as the remainder of the economy stalls or even contracts. And we’re about to hit a wall—we’re nearing the point at which (hat tip: Calculated Risk) those who lost their jobs at the trough of the now technically over Great Recession will exhaust their unemployment benefits and the bills before Congress do nothing to alter that. The current proposal extends the program, not benefits.

The Navy has test-fired a novel weapon:

A theoretical dream for decades, the railgun is unlike any other weapon used in warfare. And it’s quite real too, as the U.S. Navy has proven in a record-setting test today in Dahlgren, VA.

Rather than relying on a explosion to fire a projectile, the technology uses an electomagnetic current to accelerate a non-explosive bullet at several times the speed of sound. The conductive projectile zips along a set of electrically charged parallel rails and out of the barrel at speeds up to Mach 7.

The result: a weapon that can hit a target 100 miles or more away within minutes.

It’s estimated that about 2/3s of the world’s population lives within 100 miles of the coast.

A railgun uses bullets rather than explosive charges—it’s a kinetic weapon rather than an explosive one. Its bullets should be significantly cheaper, easier to store, and less dangerous to the crews of the vessels that use the weapon than explosive charges. At the sorts of energies and speeds being discussed it would be enormously destructive, doing damage radially.

Presumably, the weapon is intended for Zumwalt-class destroyers. The Navy confirms this:

In terms of capability, a future tactical Electromagnetic Railgun will hit targets at ranges almost 20 times farther than conventional surface ship combat systems. A 32-megajoule shot, for example, could reach ranges of more than 100 nautical miles with Mach 5 velocity, said Dr. Elizabeth D’Andrea, ONR Electromagnetic Railgun program strategic director.

Additionally, the two industry competitors, BAE Systems and General Atomics, will showcase their advanced composite prototype Railgun launcher systems at NSWCDD, a tenant command to Naval Support Facility.

The goal of the Electromagnetic Railgun program is to develop a new surface ship weapon that will use a projectile driven by kinetic energy. This new munition will eliminate the need for a high-energy explosive warhead and traditional gun propellants, ONR officials said. Removing explosives and chemicals will improve safety for Sailors and Marines and reduce the munitions logistics chain.

The Railgun is being developed for use on a wide range of ships, whether the vessel has an integrated power system, such as DDG 1000, or a non-integrated power system, such as a DDG 51, ONR officials said.

The system would be capable of a rate of fire of six to 12 rounds per minute and guided to targets with a high degree of precision. Improved accuracy should result in minimizing collateral damage, ONR officials added.

The technology is still in its infancy—it will be a long time before there are actual deployed weapons. Among the problems that need to be solved are preventing the weapon from destroying itself: the energies involved are such that the bullet can melt the rails on which it travels.

The Washington Post’s Colbert King makes a point very similar to the one I made yesterday with an added fillip:

Warning: If the Democratic left does to Obama in 2012 what it did to incumbent President Carter in 1980 via Ted Kennedy’s damaging Democratic presidential primary challenge – or what the Republican right did to incumbent President George H.W. Bush in 1992 with Pat Buchanan’s entry into the GOP primary – the Democratic party as a whole will find itself paying a steep price for years to come.

That’s a promise, not a threat.

[…]

Make no mistake, however: If the left costs Obama his presidency in 2012, the Democratic Party as a whole will lose out.

Sabotage the nation’s first black president and the Democratic Party might as well bid farewell to its most loyal base of supporters: African Americans.

A recent article in Current Anthropology provides some interesting evidence and speculations on the near prehistory of the ancient Middle East. Science Daily elaborates:

A once fertile landmass now submerged beneath the Persian Gulf may have been home to some of the earliest human populations outside Africa, according to an article published in Current Anthropology.

Jeffrey Rose, an archaeologist and researcher with the University of Birmingham in the U.K., says that the area in and around this “Persian Gulf Oasis” may have been host to humans for over 100,000 years before it was swallowed up by the Indian Ocean around 8,000 years ago. Rose’s hypothesis introduces a “new and substantial cast of characters” to the human history of the Near East, and suggests that humans may have established permanent settlements in the region thousands of years before current migration models suppose.

In recent years, archaeologists have turned up evidence of a wave of human settlements along the shores of the Gulf dating to about 7,500 years ago. “Where before there had been but a handful of scattered hunting camps, suddenly, over 60 new archaeological sites appear virtually overnight,” Rose said. “These settlements boast well-built, permanent stone houses, long-distance trade networks, elaborately decorated pottery, domesticated animals, and even evidence for one of the oldest boats in the world.”

But how could such highly developed settlements pop up so quickly, with no precursor populations to be found in the archaeological record? Rose believes that evidence of those preceding populations is missing because it’s under the Gulf.

I find the possibility of a “Persian Gulf Oasis” interesting on a number of grounds. The origins of the Sumerican people have always been elusive. They appear to have been ethnically, linguistically, and culturally different from the neighboring peoples who derived so much from them. A settlement of long standing and established culture in the area now covered by the waters of the Persian Gulf would provide a tantalizing explanation for these origins. The timing is very good—the earliest known traces of Sumerian culture are separated by just a few hundred years from the timeframe of the “Persian Gulf oasis”.

There have been suggestions over the years that the Sumerian language, a language with no established linguistic relatives, might have been related to a Proto-Dravidian language. Settled land where the Persian Gulf is now might provide stronger evidence for such a connection.

There have been suggestions that the Flood Legend is based on a catastrophic orehistoric flooding of areas now covered by the Black Sea. It seems to me that a similar catastrophic flooding of areas now covered by the Persian Gulf would provide an even more compelling explanation.

Update

See also this post on the same article which includes a great map of the Middle East c. 75,000 BP.

Note, too, that mitochondrial DNA studies suggest migration patterns from East Africa to South Asia for which this “Persian Gulf Oasis” theory provides a little more texture if nothing else.