The Black 16GB iPhone 3G Economic Experiment

I came home this evening slightly tired and in a playful mood. I decided it was finally time to sell the old iPhone I've had sitting on the dresser since I upgraded to 4G in October 2010.

I knew there was a crazy resale market. When we went to the local Apple store, we were approached by a high school student who wanted to give us $120 cash. He had come to the store hoping to get an iPhone, only to find that his lack of credit meant no-can-do on the contract that was required.  Only one small problem. I wanted to sync the phone to the computer one last time, transfer everything to my new phone, and get all the personal information removed from the older phone.

A few months passed and I heard an advertisement from a sponsor of one of my favorite podcasts This Week In Google. I started listening to Leo LaPorte and his gang while broken in Djibouti for two weeks last August. And I could write for some time about what I have learned from his show...but for the purposes of this post, one only needs to know that I heard him mention an electronics recycler/reseller named Gazelle. I was very impressed with the site and quickly received a quote for my phone...$93--which sounds very exact. Since this was lower than the $120 I knew I could receive at the mall from someone outside the store, I held onto the phone.

But now the New Year has come, and with it the urge to clean. This urge is especially overwhelming in pack rats such as myself. The year of 2010 brought home many treasures from all over the world. Therefore, I have no room for a fully functional but never used iPhone!

Tonight I perused the "Wanted" section of Craiglist, looking for anyone pining for an iPhone. I love CL! (Read more about this phenomenon that started in 1995 in the Bay Area.)  I found four individual numbers to send texts that offered quotes. The following is what I sent and received.

The second message was sent after the first three responses generated the following bids: $140, $130, $120

Within seconds of sending, I received this bid of $140, no questions asked. But the motive, as you can see...is unclear.

Lots of questions. Personal use. Lowest offer, but I like!

I guess the impulsiveness scares me into thinking the motive is sketchy.

Straight shooter.  Must just fix broken screens and somehow magically fix water damage??

 I haven't decided what to do just yet. But this iPhone has got to go!

Pondering Income Inequality

Most of the time I'm on the road, I have a book to read. The common theme that has emerged from nearly three years of temporary shelter around the world has been economics. More specifically, I've developed a great interest in income inequality. Why my own interest? There is no good explanation. I don't consider myself to be chasing the Joneses, and remind myself how fortunate I am with Global Rich List. But perhaps being the 43,497,837th richest person didn't make me feel any better because I know that means a handful of people above me live a life the other 6-plus billion souls below me could only imagine.

And I don't think it's fair. I'm not claiming that income disparity should be solved by taxes. In fact, in terms of tax policy, I favor value added taxes--or whatever name one wishes to call taxes on consumption versus income. The reason I don't think the income disparity in the world is fair is because those who reached the top in the capitalistic struggle seem to have forgotten how much of the ascent happened because of luck and how much occurred because of individual talent.  I'd like to sit down and remind these folks, "Never ever mistake your talent for your luck."

Yet I don't blame the individuals who have conquered the game and reached the top. I blame the structure of the game and the glamorization of winning it at all costs. I first came to truly believe this tenet of life after completing Malcolm Gladwell's work "Outliers." I was particularly struck by the story of Bill Gates and Bill Joy.  It spawned my belief that if not for the infrastructure present, their computing advances would not have been possible individually.  But *someone* would have made the advances. If both of these men had been hit by cars, I believe deeply that someone else would have come forward to advance the ideas. Sure, these men had talent...but there is more to success than raw talent.

This, in turn, led me to analyze many of the paths to economic success. And I continued to find examples in other fields of the dependence on community infrastructure. Nowhere was this reliance greater than in any field where the "Hollywood Effect" comes into play. As technological advances have allowed individuals to reach a wider and wider audience, compensation skyrockets. But not from the amount of talent, but the larger size of the population supporting the activity. Entertainers aren't any better now than in days gone by, they just have a larger audience.

And what of evidence demonstrating the luck component? There is no example better than one straight from Hollywood itself. "The Curious Case of Benjamin Button" has Brad Pitt eloquently narrate a sequence that shows how the path of any individual's life is affected by strangers. All of those "dancers" who "safely crossed the street" never realized how lucky they actually were. I only ask those at the top of the economic game to acknowledge those who helped them safely reach the other side of the street.

My reading on this trip didn't focus on a book, but on the latest articles I could find on income inequality. I was shocked by the sheer rate of separation between the have and have-nots.  This difference is detailed best in a Slate Article that was written as a series.

I was also surprised to find that Ben Bernanke's worry on the subject was available in a public speech given in Omaha. Bernanke's acknowledgement made me realize that while the problem had been identified by the top level of our leadership--no plan was in place to do anything about it.

And finally the Reuters link 22OCT2010 I felt justified my feelings that inequality in America is increasing each day that we do not address the issue. Quoting directly, "In 2009, inequality was at the highest level since Census began tracking household income in 1967. America has one of the largest wealth gaps among advanced economies. Based on an inequality measure known as the Gini coefficient, the United States ranks on a par with developing countries such as Ivory Coast, Jamaica and Malaysia, according to the CIA World Factbook."

What should we do? I don't have the solution. I do know that this problem, left to fester, will eventually solve itself--most likely violently. And that the accumulated suffering will be unleashed in a fury upon those who failed to take a moment and acknowledge their luck.