Sunday, November 26, 2006

All In The Family

What's going on with relationships?

Recently reported: 37% of U.S. births are out of wedlock. Not to be outdone, in France 59% of women have their first baby out of wedlock. This is not due to an increase in teenage pregnancy rates, but due to women choosing to have babies in cohabitation with the father rather than in marriage.

Is cohabitation preferred because divorce is so likely?

Divorce rates rose in the sexual liberation of the 1960s and 1970s, hovered close to 50%, and began to decline in the 1990s. These days women without college education have a much higher risk of divorce than those with a degree.
But since 1980, the two groups have taken diverging paths. Women without undergraduate degrees have remained at about the same rate, their risk of divorce or separation within the first 10 years of marriage hovering at around 35 percent. But for college graduates, the divorce rate in the first 10 years of marriage has plummeted to just over 16 percent of those married between 1990 and 1994 from 27 percent of those married between 1975 and 1979. -- NY Times
These trends beg the question: how are humans supposed to have relationships? Do we need a college degree?

In The Ancestor's Tale: A Pilgrimage to the Dawn of Evolution, Richard Dawkins presents a graph (p. 210) of the relationship between testis mass and body mass for various primates. In species like chimpanzees where females mate with many males, there is sperm competition. As the graph shows, chimpanzee males tend to have a proportionately higher testis to body mass ratio, indicating that they produce as much sperm as they can to compete for egg insemination. Monogamous gibbon males, on the other hand, have a smaller testis to body mass ratio because their sperm does not have to compete for egg entry.

As far as primates go, human males fall in the camp of smaller testis to body mass ratio. This suggests that humans tend not to be promiscuous (many males mating with a female). It does not clarify, though, whether males have harems or act monogamously.

Frans De Waal compares human relationship behavior to our two evolutionarily closest kin, the chimpanzee and the bonobo in Our Inner Ape. De Waal doesn't claim that we should act like chimps or bonobos, but comparisons of sexual behavior between the species are enlightening. Both chimps and bonobos are promiscuous, but chimps have a patriarchal (alpha male) society while bonobos have a matriarchal society. If you compare population of humans, chimps, and bonobos, human sexual and social behavior is strikingly successful.

What do humans do differently than other primates?

Alpha male chimps dominate the genetic outcomes of their populations. In fact, new alpha males are known to kill children from predecessor alpha males (this behavior occurs in other species that have alpha males) to enhance their genetic dominance. Bonobo females avoid infanticide by having sex with lots of males. Bonobos are very promiscuous indeed, with sexual activity throughout the day between all members (heterosexual and homosexual). Since the males have no idea who the father is, they cannot kill children for the sake of genetic dominance.

Humans have a different twist. Human males have a good idea who their offspring are. Unlike chimps, human males don't commit infanticide purely for the sake of genetic dominance (though in some societies they have been known to kill first-born females for a variety of seemingly economic reasons). De Waal posits that human females avoid infancticide by including males in the childrearing so that males protect their own children and probably the children of their clan. This may explain a good deal of human social behavior including common institutions like marriage.

Do we need marriage?

An emerging idea is that, with a population of six billion humans, maybe humans are simply adapting to a different environment. Survival of the species depends more on our ability to control our collective impact on the planet than it does on our ability to reproduce.

Modern society turns the table on primal human needs. The likelihood and expense of divorce may explain why more women prefer cohabitation to marriage. Cohabitation achieves the goal of including males in childrearing with a better expected economic outcome. In addition, societies that outlaw infanticide have removed an important reason for females to enlist males in childrearing in the first place. If the father disappears or fails to participate in childrearing, laws protect the life of the child anyway.

The next step in human relationships? Sexual Consent Forms , anyone? (Tip of the hat to Dennis on this video).

Thursday, November 23, 2006

Transparently Expensive

The Sarbanes-Oxley Act , more efficiently referred to as "SOX", was written to make publicly traded companies more transparent to investors.

Turns out SOX created a case-study for the trades-offs between transparency, regulation, and the cost of information.  Looking at how market dynamics have changed since SOX was implemented, it should come as no surprise that the U.S. Securities and Exchange Commission wants to reduce the cost of SOX quickly.

In their attempt to make public companies more transparent, legislators and regulators overlooked the costs of SOX.  SOX implementation alone costs a small company over $1M easily, with accounting fees and technology costs usually running well over $5M for a mid-sized firm.  After implementation, it costs companies even more to stay SOX compliant, usually $2M and up for a public company.  With little guidance from the S.E.C. on exactly what constitutes compliance, with accountants having little incentive not to charge as much as possible because their reputation is on the line, and with CEOs accepting personal liability for non-compliance, SOX created a perfect storm to drive up accounting and compliance costs.

Let's do some math.  Let's say we run a company called Acme Socks.  Acme Socks has just passed $100M in revenue.  Naturally, we would like to take our stock public so the company can take advantage of public equity markets for financing further growth.  What will it cost us?  Our accountant says about $5M up front, and then $3.5M per year in operational and accounting costs -- about 10% less than the average public company pays.  Acme Socks has good EBITDA earnings for a fast-growing company at about 5%, or $5M.  Wait!  So, instead of 5% earnings, our company would have about 1.5% earnings if we go public and pay for SOX compliance.  That's too risky for our taste.

One side-effect of SOX, which was supposed to make companies more transparent, is to keep companies from bothering.  The main reason a small company attempts SOX compliance these days is to make it easy for a large company, that already is SOX compliant, to buy the small company.  As a result, Venture Capital funds and Hedge funds, which don't need to provide SOX compliant results to their qualified investors, have become primary investors in small companies.  SOX was supposed to give Joe Normal investor better decision making guidance for his investments, but what it did was take away the opportunity to invest in small-cap equities.  It has also made financing of early stage companies more difficult since, more often than not, investors must look for a larger company to acquire a start-up rather than depending on an IPO for a liquidity event.

Another side-effect of SOX, and the effect that seems to be prodding regulators to re-think SOX, is that the U.S. IPO market as a percentage of the worldwide IPO market has dropped precipitously, so U.S. individual investors have less access to the IPO market.

Back in 2000, our markets handled half the world's initial public offerings. Last year, we handled just 5 percent. Foreign companies are shying away from listing their shares here. And American companies are going undergound. One out of every four takeovers in the past three years have been transactions that take public companies private. -- Glenn Hubbard, NPR Marketplace


Hubbard brings up a third side-effect of SOX, the de-listing of public companies.  Hedge funds and large private equities firms like KKR and The Carlyle Group invest in public companies for the purpose of taking them private and avoiding SOX scrutiny.  While investors in the public entity usually enjoy a gain on their share price in such a transaction, the private equity investors and company management often receive even more gain as they break up and sell off company assets.  Once again, SOX has fostered market conditions that benefit wealthy investors and large investment funds over Joe Normal investor.

SOX demonstrates the power of markets.  What is clear is that SOX, which was supposed to level the playing field for all investors, large and small, ended up tilting the field significantly to the advantage of wealthy investors by depriving small investors access to some of the best investment categories.  Since the impact of regulation is easily measured in financial markets -- in what other market can you see the U.S. give up 45% of IPO market share to foreign markets in five years? -- SOX gives legislators and regulators a clear lesson in the impact of high-cost regulation.

Regulation for the regulators?  Good regulation calculates the true cost-benefit ratio, not its political impact.  An emerging idea for regulators would be a standard for determining the costs and benefits of new regulation.  If such a standard existed, it also would give regulators a way to measure their regulatory performance.  A regulation that failed to meet its cost-benefit objectives would be adjusted or dropped.  Such a process might have kept the Sarbanes-Oxley catastrophe from taking place.

Monday, November 20, 2006

On Display

Emerging display technology and smaller consumer electronics form factors will create sea changes in the way we interact with computers and networks.

The brightest new display technologies? Most of us have heard about OLEDs, or Organic Light Emitting Diodes. Cheaper, lighter, more flexible, and more energy efficient than back-lit LEDs, OLEDs will enable new man-machine interactions. OLED displays can be built on flexible plastic or glass. No need for bulky laptops or displays. OLED manufacturing costs are expected to be much lower than LED costs, so you can afford displays everywhere. OLED displays could go on windshields, on retail glass windows, or on glass table tops. Since OLEDs draw so little power, more displays can go in power-challenged applications like portable or remote computing.

Rapid degradation of the materials that create blue light in OLEDs, as well as some patent and licensing issues, have slowed OLED's market entrance. Nonetheless, Samsung has demonstrated a 40" OLED HDTV display and should introduce OLED HTDV to the market in 2007. We'll have to wait a while for the plastic sheet computer, but it's possible that a touch sensitive keyboard, electronics, and power supply could be integrated into the same plastic sheet that has an OLED display. Voila! A portable computer that folds up to fit snugly next to your Pocket Protector.

Projector displays also enable different man-machine interaction. High-end projectors use special materials to display cinematic quality images in theaters from digital video, allowing entirely digital distribution of theater quality video content. DLP and LCD technology dominate current consumer projector products. DLP is a relatively recent MEMS device with tiny mirrors that reflect light to the right place, while LCD is a well establish display technology from the 1970s.

When projector keyboard technology matures and works well, it will give users of BlackBerry and other PDAs with tiny keyboards more keyboard real estate without necessarily adding more bulk to a PDA. It's conceivable that your handheld could have miniaturized projectors for both display and keyboard input. Voila, again! Your projector PDA will fit snugly next to your fold-up plastic OLED computer.

If you can't wait for all these new technologies, you can try this at home.


Thursday, November 09, 2006

To Sleep, Perchance To Dream

Dr. William Dement was an early sleep scientist. He set up a sleep lab at Stanford in 1970 and did experiments on sleepers. Building on earlier work on REM (Rapid Eye Movement) sleep by Aserinsky and Kleitmann at the Chicago University sleep labs, Dement showed that dreams occur during REM sleep, and that sleepers have many dreams throughout the night, with later dreams lasting longer than earlier dreams.

Recent experiments with MRI scans of sleeper's brains show that human brains actually reconfigure themselves during REM sleep.

"MRI [magnetic resonance imaging] scans show us that, during sleep, brain regions shift dramatically," notes Matthew Walker, director of the Sleep and Neuroimaging Lab at Beth Israel Deaconess Medical Center. "During sleep, it seems as though you are shifting memory to more efficient storage regions within the brain. Consequently, when you awaken, memory tasks can be performed more quickly and with less stress and anxiety." -- Harvard Gazette

Scientists believe that some of the chemical reactions in the brain that create memory take several minutes or hours to complete. Sleep is a time during which the brain filters out most external stimuli and blocks most motor activity. This may explain why young humans, with much more information to absorb, need more sleep than adults.

Are dreams simply a by-product of memory re-configuration, or do they have symbolic meaning?

Dream research today is torn between two paradigms, said [Allan] Hobson [, M.D., a professor of psychiatry at Harvard Medical School]: the old focus on dreams as interpretable, รก la Sigmund Freud, and the new focus on dreaming as a state of consciousness that helps reveal how the brain is organized.

Dement sees neurocognitive research as complementary to psychological exploration, not a replacement for it. In REM sleep, he asserted, the brain creates a world all by itself. "You can see, hear, smell; you perceive the world around you to be real.

"Although dreams mirror concerns from the day, they are never exactly like the day," he said. "But that they are meaningful is obvious." -- Psychiatry Online

Meantime, Hobson and researcher Mark Solms are debating what parts of the brain are involved in waking and sleeping. Hobson believes that dreams are linked to the parts of the brain that control the REM cycle, while Solms thinks parts of the higher brain start dreams.

In Solms theory, dreaming begins in the higher brain when a particular area of the forebrain is activated, the mediobasal frontal cortex. Here the hunting, seeking, desiring, wanting system is deeply networked with the limbic system (emotions, sensory info) and mesocortical dopamine systems. There are deep connections of dopanminergic cells from this ventral tegmental area to the hypothalamus, the septal area, the cingulated gyrus and the frontal cortex, and amygdala. In other words, this frontal cortex area of motivation connects with many other parts of the higher brain, the sensory brain and the emotional brain. -- Improverse.com

Early researchers like Dement measured dream activity with cameras, EEGs, and patient interviews. Current researchers have added PET and MRI scanners to their measurement arsenal so they can see what happens inside the brain.

To put you, dear reader, to sleep so your memory can reconfigure this article into your brain, here is a gratuitous MRI scan of a brain.



If you're wondering whether you have a sleep disorder, you can take this test. A good night's sleep may be more important than you realize.

Monday, November 06, 2006

Windshield Wipers

It's not something you give much thought to. I was driving an Audi A3 in the rain last week. It was an annoying rain that ranged from drizzle to downpour every five or ten minutes. And suddenly I was noticing the windshield wipers.
Prior to the manufacture of Henry Ford's Model A, Mary Anderson was granted her first patent for a window cleaning device in November of 1903. Her invention could clean snow, rain, or sleet from a windshield by using a handle inside the car. Her goal was to improve driver vision during stormy weather - Mary Anderson invented the windshield wiper. -- about.com
In car technology, the high-end cars get fancy new features like tiptronic before the econoboxes. However, as in the computer hardware market, quality of parts in the final product improves as part volume increases and prices drop. Before long, all the econoboxes have the same cool features as the luxury cars. In fact, in some ways, car manufacturers are suffering the same difficulty in differentiating their products as computer makers. In both industries, manufacturers must build products more and more from the same building blocks as their competitors in order to optimize cost and quality.
Robert Kearns claims that he invented the intermittant windshield wiper (in 1967) and that all automakers installing this device should pay him for use of his patent. He settled with Ford and Chrysler, but recently had the suit dismissed against GM and all foreign automakers. He claims he will refile. -- Univ of Texas
So, as I was driving through the variable percipitation and forgot to toggle off the windshield wipers, I realized the wipers were turning themselves on and off, not at a set interval, but according to the intensity of the rain. Like magic. All possible because of a new optical rain sensor embedded in the windshield.

The sensor projects infrared light into the windshield at a 45-degree angle. If the glass is dry, most of this light is reflected back into the sensor by the front of the windshield. If water droplets are on the glass, they reflect the light in different directions -- the wetter the glass, the less light makes it back into the sensor. -- How Stuff Works

The first tiptronic transmissions showed up around 1999 and were available in econoboxes by 2003. I expect everyone will get optically controlled wipers by 2008 or so. If not, you can always buy a used Audi.

Sunday, November 05, 2006

Feeling Connected

We hardly think about having electronic connections with the rest of the world these days. 150 years ago, though, connecting America to Europe instantaneously was an emerging idea. PBS has an informative documentary on Cyrus Field's trans-Atlantic commercialization of Samuel Morse's invention of the telegraph.

As a study in commercialization, the formation of the New York, Newfoundland, and London Telegraph Company illustrates how ideas turn into valuable innovation. Working with Frederick Gisborne, Field raised money to lay the first cable across the Atlantic. Although the first cable failed, Field's persistence paid off as improvements in other technology (notably, ship building) made it easier to lay a second cable.

As Field's initial failure came under government scrutiny, the nascent electronics industry was required to develop better nomenclature, measurement, and standards. The terms "volt," "ampere," and "watt" came into existence around 1870 to describe units of potential, current, and power, respectively.

When Field finally got his second cable to work between America and Ireland in 1866, users paid $10 per word, or about $120 per word in today's money, to send information instantaneously that would take two weeks to travel by boat. That's roughly a $1,000 per byte premium to ocean travel.

How has the market changed in the 140 years since? If you use a satellite, you can wirelessly connect almost any two points on the globe. If you use all the bandwidth available on a satellite, you could transmit about one billion times faster than Field's trans-Atlantic operation at about one trillionth the price.

Friday, November 03, 2006

GPS Phones

Prices for GPS circuitry are falling, so more and more devices can integrate GPS functionality. Typically, GPS devices have been standalone devices designed to slap on a dashboard or fit in a hand, and they have some map technology to help you get to your destination.

Here's a video that shows a Nokia N95 with integrated GPS. Since your phone knows where it is, you can send your coordinates to someone else. Instead of having lots of small conversations like, "Hey, I'm under the umbrella," or "If you're at 12th Street, you went too far," your friends can find you at your current longitude and latitude.



Integrated with the Internet, GPS technology can help you find stores, restaurants, taxis ... practically anything you might need. And they can find you.

Wednesday, November 01, 2006

Video Voting

Many U.S. voters have wondered about how fair voting is since the voting debacles in 2000 (Florida) and 2004 (Ohio). Here are examples of new technology that help both the voting process and the monitoring of the voting process.

Sites like Can I Vote help you find out if you're registered to vote, something you might want to do a few days or weeks before an election. Other sites like Election Line provide resources for election reform. They point out that lots of new election technology being introduced in the 2006 mid-term election may cause new categories of election problems as many voters and election workers learn to use voting machines for the first time.

If you have a video camera, you can take part in election monitoring, too. Check out the Video the Vote project video to find out how.




UPDATE. Well, here's some technology that doesn't help the voting process. Voting machines in some counties in California allow voters to vote more that once:

The notice went out on Monday, just eight days before the election. It tells election officials to keep a close eye on voting machines sold by Oakland-based Sequoia Voting Systems because a yellow button on the back of each machine can be pushed and potentially allow someone to vote more than once.