Category: Money Money

African Geography Notes: Comoros

For Day 2 of Black History Month 2019: Black Migrations, I would like to share some facts about about Comoros, a volcanic island chain off the east coast of Africa, between Mosambique and Madagascar. It was settled in probably the 6th century and is mostly Afro-Arab. The dominant religion is Sunni Islam and the legal system is based on both Islamic law and the Napoleonic Code. Their inheritance law is interesting because some types of property and authority pass along the matrilineal line (similar to Bantu practices) and other types pass along the patrilineal line. The island of Ngazidja is particularly matrilineal. Official languages are Comorian, Arabic, and French. Near as I can tell, mostly Comorian is for regular talking, Arabic is for religion, and French is for official government business. It’s a federal presidential republic and part of both the African Union and the Arab League.
As an American, your main interaction with Comoros is probably as a consumer of perfumes. Comoros is the top producer of ylang ylang. Better than 50% of their GDP is made up of sales of spices and essential oils.
The population (I’m going to hedge here for reasons that will become clear in the next paragraph) is about a million people, and the population density is high because there are only so many places you can build a building on a volcanic archipelago. There are significant disparities in standard of living, and significant infrastructure problems in ways that remind me of Hawaii.
Comoros declared independence from France in 1975, but also didn’t. There are four main islands, and one of them, Mayotte, decided it wanted to stay a part of France. So it’s still part of France and has representation in the French senate. But it’s also part of Comoros. The UN recognizes it as part of Comoros. But that one island has French/EU citizens and uses the Euro, and people from the other three islands can’t necessarily work there legally. A lot of them work there anyway, illegally, without legal protections. I can’t think of a perfect paralell for this situation; the closest I get is Hong Kong in the 1980s.
Meanwhile, the non-Mayotte parts of Comoros have experienced at least 20 coups or attempted coups in the last 40 years, often with assassinations involved. Consequently, the people don’t have a lot of confidence in the politicians or political system – there’s been a lot of turmoil, some of it violent. Comoros is one of the world’s poorest countries and is very worried about climate change. It’s had trouble attracting investment and tourism because of the instability, although they’ve developed recent partnerships with China. The current president is working on green energy projects.
I got interested in Comoros last year when I needed a volcanic island chain for a futurist short story about guaranteed minimum income, refugee policy, and the invention of a new battery/fertilizer. (The story is not published yet; I need to revise the third act, which I rushed through in the first draft.) I zeroed in on this particular set of islands partly because in interviews I watched with Comorian laborers, I liked them a lot. I wanted to write protagonists that acted like the people I was watching. My story is not set on Comoros, but it seems to me that one could easily write a lot of SF inspired by Comoros. It seems to contain a lot of the structural elements people try to write into Star Wars, Final Fantasy, etc.
Here is a short BBC video on YouTube with good images of the island of Anjouan.

Another Healthcare Repeal Attempt

Senate GOP paves way for ObamaCare repeal bill” (Jordain Carney, The Hill)

Watch out for this. But also, don’t misinterpret it. Normally, you wouldn’t expect McConnell to bring a bill to the floor of the Senate unless he thought it could pass. However, with this healthcare-killing bill, because congressional Republicans used the budget reconciliation process to try to sneak it through without needing any Democrat votes, they’re in a jam: they can’t use that same procedural trick on any other bill while it’s still up in the air.

The Republican leadership wants to ram through a tax cut package for billionaires. They can’t do that with this healthcare turd clogging the pipe. McConnell is probably trying to flush it. (Maybe you’ve heard some of them grousing about how they “should have done tax cuts first” and wondered why they couldn’t pursue several legislative agendas simultaneously, like normal people. It’s because they have to use this cheat/exploit since their ideas are unpopular, and it’s strictly one-at-a-time. I’ll leave it to you to write a “camel through the needle’s eye” homily on the subject.)

So basically, worst case but unlikely scenario: this repeal passes. Best case but still bad scenario: it fails which lets them roll up their sleeves and start manfully widening the wealth gap so their pitiful wealthy selves don’t have to give up any comforts to feed the detestible poor. (Those housing-insecure kids should really get jobs. Non-voting losers.)

Billfold Essay About Italian Austerity

New essay by me at The Billfold, “Social Trust in a Cash Economy” — a collage of cultural anecdotes about Italy and money, and the way a very calm Austerity crisis feels. It’s about a six-minute read. It starts like this:

There is a recurring bill I pay in Italy, in person, with a credit card. When I finish the transaction, the secretary makes a handwritten note in a small book. She makes the same note on a card-sized piece of notebook paper which I carry. One time, I forgot to bring the card-sized piece of paper. The secretary urgently retrieved an identical card and wrote down the entire history of our financial transactions, so that if she ever tried to cheat me, I could say, no, look here, in your handwriting it says I paid, because this ballpoint numeral is more meaningful than a credit card statement.

Something I didn’t know when I wrote the essay (because I just found out about it today) is that Italian banks get robbed a lot. A lot a lot a lot. (In the essay, I don’t write about banks at all, which probably wouldn’t have changed. But by coincidence, the essay came out the same day I knew this new thing.) Between 2000 and 2006 (the last timeperiod for which there is comprehensive data), Italian banks were robbed an average of 2771 times a year. That’s “walked in with a sack and robbed” robbed. For comparison, Germany’s number is 838. Spain’s is 523. Greece’s is 144. It is a pain in the ass to go into an Italian banks, with lots of, essentially, nested delayed airlocks you have to pass through solo. I figured this was the usual Italian security mania, but in this case it seems warranted

How the Stock Market Works, or the Myth of the Active Investor

Y’all, whenever I talk about the stock market being passive income, some bro shows up to valorize how much time an active investor spends on research.

This active investor is mostly a fiction.

The vast majority of individuals with stock holdings are buying ETFs or Mutual Funds, or received shares through an employer. (Or they’re indirectly invested through their insurer or pension.) They are not reading whitepapers and intensively researching investments in individual companies. What they are doing is not dissimilar from putting money in the savings account with the best interest rate and the lowest fee.

I know we’ve all seen exciting movies with people shouting on trading floors. But I know a lot of people (and I bet you do too) who have tried active investing, and almost all of them talked openly about how it was their “playtime” and treated it like going to the casino, clicking to buy things that were going up or down or had cute names, only risking money they were willing to lose. For money they were serious about, they’re in ETFs and Mutual Funds because they know they can’t beat the market and prefer a diversified portfolio.

Which is managed by someone else. Maybe a computer program.

So, you know, if you have a dream that through your insight and research you’re going to turn $100 into a fortune and the prettiest girl in town is going to swoon (maybe because she’s you! you can be a pretty girl and this fantasy still works!), that’s all well and good. But it’s not representative of most investors. Who are passive. Whose money does not come from working harder at understanding money.

Most of them don’t even fill out their own taxes, gosh.

(I’ve offered anecdotal evidence here as a kind of “search your feelings; you already know this” but my statements about the extremely low percentage of active investors in the market are data-driven. Look up any chart you want.)

Got To Look Out For Our Own

Really good to see all those “keep the refugees out and save those resources so we can help the poor and sick people who are already here” folks mobilizing hard to make sure endangered American citizens receive healthcare and other humanitarian aid like food and safe housing.

Great “band together and protect our own” hustle, everyone!

P.S. The taxes that have been funding expanded medical coverage are mostly on capital gains – on money people make by owning stock, not by doing anything. Stock market is doing just fine despite this 3.8% surcharge – doing historically wonderfully, making stockholders loads of money. Investment has not been constrained. But, sure, we need to protect those investors from the pain of passively accumulating free money that could be slightly more free money if it weren’t for those darned asthmatic kids.

Karl Marx, pivotal cultural critic and economist

Happy Cinco de Karl Marx’s 199th birthday!

Rahul Maganti says:

Mihir Shah, former member of the Planning Commission and my professor at Ashoka University once said, “You can’t understand modernity and capitalism without understanding Marx. If you don’t understand them, you can’t understand yourself.”

Happy Birthday, Comrade. 199, and counting.

Now read this to understand how much Marx’s philosophy influences your thinking (in a good way!) even if you think communism is ridiculous:

A Non-Marxist’s Gratitude for Karl Marx” (Avijit Pathak, The Wire)

Pre-Existing Conditions and Incentives to Conceal Information

I support single payer, because all the data I’ve seen tells me it’s what works. But that doesn’t mean I have contempt for people who want to find market solutions. Problem is, the recent Republican bill doesn’t remotely do that. And small-government conservatives should be as mad about it as I am. Here’s why. (This essay is by me.)

How Would You Lower Healthcare Costs Through the Free Market?”

Hint: The Republican bill doesn’t do it.