Word of the Day: Prolegomenon

Here's a word for you: prolegomenon. It is an introduction to a larger body of work. The best example is the essay you skip over at the beginning of classic works by some long-winded, self-important professor who wants to make the subject as dry and dull as possible. I found this word as the first heading in a technical white paper that was supposed to be about a cyber security tool. At the first blink, it appeared to be pretentious. But I was unfamiliar with the word and my first impression was replaced by curiosity and perhaps slight admiration. 

Now that I've looked it up, I am torn. Is the author guilty of grandiloquence? Did his marketing team shrug, knowing his fondness for sesquipedalian loquaciousness and the rimbombante  tantrums of a prima donna when his pretension is called out? Or should I feel grateful that he has expanded my vocabulary and added an intellectual flair to a writing style that discourages creativity? 

Like most humans when faced with a person I do not immediately understand, I assumed he is like me and tried to determine his motives based on the contents of my own heart and conscience. This projection bias often gets us into trouble when the other person is not like you (probability=99.999%). However, lacking additional information about the author's personality and history, there's no harm in trying my shoes on him. 

If I had been exposed to the word and then chosen to introduce my white paper with it, I would probably had done so as a smartass. Without malice, of course. It would have been my way of winking at you through the black-and-white text, hoping you didn't mistake me for a grandiloquent, pretentious twit. I would have hoped that 80% of the readers skipped that arcane word and dug into the meat of my paper, that 10% of the people would have looked up the unfamiliar word and found themselves edified, and the final 10% would be familiar with the word and assume (in error) that I am at least their intellectual equivalent.

Fortunately, I was exposed to the word through the aforementioned white paper. Now, I not only know what it means but I know one way to not use the word: in a white paper. I am sure there is a time and place for that word just as there is for everything else. But if you want to be read, you must consider your audience. For example, this blog is mostly read by spambots and Russians seeking to sell penile enlargements, if the unpublished comments are any guide. And technical white papers are read by young, overworked people who may only have a high school diploma and a certification or two. 

The final result in my case was that I paused at the first word: Prolegomenon. That word distracted me, and I have since researched the word and written this blog post. I'm not sure if I can find the white paper again--I doubt I will find time to read it now. Other readers may have overlooked it or judged the paper as a waste of time based on the prominence of such a pretentious and abstruse word. 

I'm glad that I learned a new word, and that I have this fresh reminder to seek to be intelligible more than intelligent. Unless you hold to the wisdom of Oscar Wilde who warned, "Nowadays to be intelligible is to be found out."

I leave you with a new favorite quote from an old favorite wordsmythe, William Shakespeare:

He's winding up the watch of his wit; by and by it will strike. (Sebastian in The Tempest)

Russian Macroeconomics

Every American knows that our national debt is unbelievably high; how convenient that it is a number that is difficult to imagine. When I think about the balance of my mortgage, it is a number that is easy to imagine. When I research a company for investment purposes and find their debt to be measured in 8 or 9 digits, I can compare that number to their assets, their income, and to the debts of similar companies. But the debt of the United States is almost inconceivable: according to the CIA's World Factbook, the U.S. debt stands at $10.04 trillion! I have held thousands of dollars, I can calculate millions in my head, I have worked for multi-billion dollar companies. However, I have no frame of reference for 10 trillion dollars. I suspect most Americans also have no way to conceptualize that amount. Therefore, trillion dollar debt sounds bad, but our brain never calculates how bad it is.

Now, let's talk about Russia. I think most Americans conceptualize Russia as backwards, depressed, poor, crumbling, corrupt, and economically ignorant. To be sure, Russia has many problems and many of them are economic. However, like the communist, socialist black hole of China, Russia is in a pretty good place when you look at macroeconomic fundamentals. Again, I am using the CIA World Factbook as a source. They have run a budget surplus since 2001. Their GDP grew an average of 6.7% since 1998. They have pre-paid all Soviet-era sovereign debt to Paris Club creditors and the IMF (over $22 billion). They have a stabilization fund of $89 billion, and the third largest foreign exchange reserve (after China and Japan) of $315.5 billion. Their debt in 2006 was $287.4 billion. In other words, if they didn't have to cover the value of the Ruble, they could payoff all of their debt and still buy a few fighter planes!

Since the 1980's most Americans have been aware of the United States' trade deficit. Americans have piles of disposable income to waste on junk food and trinkets, and goods in other currencies are dirt cheap when purchased in dollars, so we import more than we export. And here's the rub: The more we spend on foreign products, the less money in the U.S. economy, generally speaking. At some point, if you ship out more money than you bring in you end up bankrupt. I am not an advocate for tariffs and quotas, I am just pointing out a math problem.

How is Russia doing? Very well, thank you very much. Russia's imports were $171.5 billion in 2006 and their exports were $317.6 billion. For the same period, U.S. imports were $1.869 trillion and our exports were $1.024 trillion. Therefore, Russia gained $146.1 billion from trade and the U.S. lost $849 billion.

Let's talk budget again for a second. In 2006, the U.S. had revenues of $2.409 trillion and expenditures of $2.66 trillion. For the same period, Russia had revenues of $222.2 billion and spent only $157.3 billion. So for one year, the U.S had to finance $251 billion dollars, while Russia was able to pocket $64.9 billion. And this has been going on for years!

Russia has had negative population growth for a while now, suffered from inflation and emigration, their infrastructure is still in shambles, corruption is rampant, the rule of law is often laughable, and they have some major political issues to resolve. However, when you already have a powerful economy, these other problems are easier to solve.

I hear people in America making noise about abortion, stem cells, social security, immigration, health care, line item vetoes, steroids in baseball, and gay marriage; as if any of these things really mattered. Look, you can neither allow nor prevent gay marriage when your nation is broke. You cannot provide health care or social security when we are begging China for money.

If we don't fix our macroeconomic fundamentals today, we will have potholes in our interstates, the White House will yellow from neglect, the Capital dome will crumble, and all our best doctors and scientists will leave our institutions for greener pastures. Men like Bill Gates and Warren Buffet will cash in their dollars and hold assets in a more stable currency, in a more stable country.

Our debt can be easily conceptualized, but not in units. Here is how: What comes after trillions? Quadrillions? No. Bankruptcy.

Who would have thought that we would need an economic lesson from Russia?