Sunday, November 30, 2014

The Mind Unused

It's been a while since I've gotten to trot out the Junk Science label. Usually I do it for mainstream media programs, but this evocative headline is currently making the rounds:
It's from a site called "themindunleashed.org". It SHOULD be called "themindunused.org". And let's give credit where it's due: the source of this article is Jim Stone [note 1].  This is the epitome of a conspiracy theorist's article: full of crap, bereft of fact-checking or anything much in the way of facts of any kind. Everything you need to know about the conspiracy theory proposed is pretty much contained in or implied in the headline, but here's "Cliff's Notes" summary:
This car represents the current state of what's practical in automotive technology. It's an affordable, spacious, roomy, heavy vehicle that gets 300 miles per gallon without any real need for exotic lightweight materials. It could be on the roads of America practically "as is" were it not for the intervention of the Big Oil Companies.
Oooooo..... Ahhhhhh.....
What a big, lovely car!
Sure, read the article. Then read a few more, like Car & Driver. Or the USA Today article, which notes:
Barely a real production model, it's made in a factory, but largely by hand. It couldn't meet U.S. safety rules and needed changes in German rules to be on the road there.
This car isn't for sale in America because it's about the SIZE OF A GO-KART + engine compartment, and because it violates innumerable basic safety regulations to get this mileage. This is deftly hidden in the cherry-picked and sometimes-distorted photos, but easily seen in the video and the few candid shots that include people for scale and don't carefully choose the perspective. The XL1 is about waist-high to an average height male, and not much broader. It has no side mirrors. It has no rear window at all: the engine is where the rear window would be. It's not been crash-tested because the result is a foregone conclusion: it has no crumple zones. It's so narrow the seats are staggered. It cannot clear a speed bump.
Wait.... WHAT?

Not a scale model.
Yes, it gets gobs of miles to the gallon. But Honda built a two-seater back in the 70s that did respectably well, too; powered by a motorcycle engine. And the BMW Isetta (a true production car) was hitting 94 mpg using a 250 cc engine in 1955 using the same design mantra: build tiny, build light. The "300 mpg" estimate for the XL1 is in an ideal scenario. The USA Today test drive puts it at 200 mpg, but I'm not going to quibble... that's still a damned respectable rating.  But that's not the be-all and end-all of consumer driving. You still have to carry people and their stuff around, and mass takes energy to move. Contrary to the Stone's rabid ravings, the expensive and exotic materials used are not just "bunk". They are in large part how the mileage is achieved. 795 kg is feather-lite for an automobile though in his ignorance the Stone attempts to make it sound massive. And despite the theory pulled from a tin foil hat, the oil companies have absolutely nothing to do with VW's production line.

VW know their market. This is a great technology showcase and conversation starter, and a limited run of 250 (NOT 2,000) at a price of $150,000 each (NOT $60,000) is just enough so they can lay claim to it being a "production vehicle" for PR purposes. But when the technologies are scaled up to road-worthy, practical-sized cars with safety features like firewalls and airbags and crumple zones, a lot of that mileage disappears. Nevertheless, something's better than nothing, and some of this tech will be applied to cars like the VW Golf. There's certainly no conspiracy going on.

As reported by Autoevolution.com, here's an example of VW using the "production car" label in an actual Volkswagen press release, demonstrating that the value of this exceedingly limited run is for promotional purposes.
Futuristic-looking TDI® Clean Diesel plug-in hybrid nets 261 mpg on the European combined fuel economy cycle

• XL1 can operate as a pure EV for up to 31 miles
• Two-cylinder TDI engine displaces 0.8 liters, makes 48 horsepower
• Best aerodynamics of any production car: Cd of just 0.189
• Super-low weight of 1753 pounds achieved through extensive use of carbonfiber, aluminum, and magnesium
• 250 will be built at Volkswagen’s Osnabr├╝ck factory in Germany

New York - New Yorkers got a glimpse of the future this week, as the Volkswagen XL1 arrived in the City as part of a month-long American tour that took in Los Angeles, Washington D.C., and the Big Apple.

In case you missed it, this is a VW XL1, on the street in New York City.
"Not allowed in America"? Really??
 


In the end, I can't give Jim Stone the Junk Science label because he's a not a scientist. He's just another blogger: one who's really bad at math and science and who chooses not to check his facts. I probably should have a label for that, but in the meantime I'll award him this really bitchin' magnet he can use to deactivate the government microchip in his head.





  1. Yes, I had to wrestle with myself over giving a link and a paltry few views to Jim Stone, Freelance Journalist, but in the end I did because you should know where this crap comes from. Besides, I had to laugh out loud at the page header. The "Jim Stone, Freelance Journalist" title of his blog should really be pronounced like a comic-book logo, with hands on hips.

Thursday, November 27, 2014

Gambling Against Yourself

Note: I wrote this ages ago... before the provisions of the Affordable Care Act (the ACA, a.k.a. "Obamacare") came into effect. I never got around to clicking "publish", probably because I hadn't finished marking it up with links. I'm not going to do that now, but I might at some point. Some of the explanation of "how things are" apply to that point in time and may now be obsolete. I'm posting it now only because I wrote it and I'm taking ownership of my statements. 

The nature of insurance is that people who don't use it pay premiums that are used to pay off the bets of the people who do. 

Waitaminnit.... did you say BETS?

Sure. At its core, insurance is an elaborate betting system.  For instance, take term life insurance... every month you bet the insurance company that you're going to die. They bet you won't. Now, if you don't die then you've lost the bet and your stake (the premium). However, if you do die, you win the bet and the insurance company pays off on the odds, which are usually pretty good. Unfortunately, you're dead, so the payout goes to your heirs (the beneficiaries). The difference between "insurance" and "gambling" is that in insurance you're always betting against yourself. It's always in your best interest not to win. I didn't make that up. If you win and it's determined that you have a vested interest in winning, then you have committed "insurance fraud". For instance, you buy fire insurance with the understanding that the continued existence of the building is worth more to you than the payout. If those values are inverted, then you might commit arson and burn down the building for the insurance money. What was a perfectly legal bet now becomes a crime.

But insurance isn't exactly the same as gambling, though it is a bet. As with all bets, the odds are adjusted in accordance with the likelihood of the event. In gambling events, like horseracing, it's typical to fix the betting amounts: you place a $2 bet at the window. But in insurance it's typical to buy according to the value of the payout: you buy a $250,000 life insurance policy. But the odds are still respected, and serve to adjust the other end of the equation. If your horse is likely to win, the payout will be smaller. If you're likely to die, your premium will be higher. But in insurance this is less likely to reflect the actual odds. People with a very low chance of payout will pay statistically higher premiums so that people with a higher chance of payout will may pay statistically lower premiums than they otherwise would. This keeps the range of premiums within a psychologically acceptable range aligning with peoples' perceptions of equitability or fairness, while still allowing the "house" (the insurance company) to make it an economically viable bet. Basically, they spread the costs around. This is called an "adjusted community rating".

Healthcare 'insurance' is interesting because it typically includes features that have nothing at all to do with the actual insurance (the "bet"). For instance, when you buy auto insurance, it's restricted to specific events: accident, theft, etc. It doesn't include regular maintenance. The owner of the automobile is expected to change the oil, transmission and steering fluids, keep the radiator in good repair, regularly replace the belts and tires, keep the windshield clean and unobstructed, make sure the lights and horn work, etc. These are the owner's responsibility alone. Even though it could be argued that it is in everyone's best interest to institute some form of prepayment, and for convenience's sake tack it onto the insurance policy's premiums to encourage the owner to take advantage of "free" maintenance, this isn't commonly done. Regular maintenance is accepted as a normal and responsible part of automobile ownership. Some companies now offer prepaid maintenance plans that are separate and distinct from insurance policies.

Prepayment plans encourage you to do things in your own best interest that would cause the insurance company to lose the bet. They're literally there to pay for services that you expect to use rather than those you hope never to need. Blue Cross began as a prepayment plan, encouraged by American Hospital Association (AHA) in the Great Depression, so as to maintain a more steady flow of income. At that time, people were not likely to utilize their services, and the relatively painless small payments, coupled with the allure of low-cost visits, encouraged increased healthcare spendingThat's what prepayment was for. It was later marketed as preventative medicine for cost-cutting. http://www.cfeps.org/health/chapters/html/ch1.htm

Blue Shield began as a similar prepayment plan dealing with individual physicians, and merged with Blue Cross in 1982. For a long time both were non-profit and tax-exempt, but that changed with the tax reform of 1986. These use community ratings to spread the costs a single risk pool and thus charge everyone similar rates.

As you could work our yourself from the very concept of an "adjusted community rating", prepayment plans are a really good deal if you're going to be using a lot of healthcare. Not so good if you're very low risk. The yearly costs of a good prepayment plan can very widely exceed the out-of-pocket costs of several routine office visits per year paid in cash. Also, the costs associated with routine visits are inflexible and fixed ONLY when billed through insurance because they're governed by contract. A doctor is free to negotiate payment for those who are self-pay, usually to the patient's benefit. Some doctors set up their own prepayment plans at a deep discount as a means of establishing recurring income and patient loyalty, as well as a nice way of providing for those patients for whom commercial insurance is too expensive (much as the original Blue Shield did). For the young, healthy individual it is almost always cheaper to buy classical insurance at a very low premium for hospitalization and catastrophic events, and to pay out-of-pocket for routine maintenance, as you would with auto insurance. Health savings plans recognize the fact, and encourage their own use by being tax exempt. However, they're often "use it or lose it"; you must use the money in the plan before the expiration of term. The advantage to the term administrators is that they get to confiscate a lot of unused money every year. If you're really not paying out that much in healthcare, you're still economically better off just banking the money and paying the taxes, and using it when it's actually necessary. The one way to make that untrue is to remove the option and force prepaid insurance. That's what the ACA does.

The reason the ACA enforces participation in plans that are plainly economically detrimental to the individual is because it is necessary when Adjusted Community Rating is factored in to make it "fair" (by which is meant "equitable", and which disguises the true goal of making it economically sustainable). Such a scheme cannot survive in a commercial environment if you have a lot of people sucking benefits out of a system without a whole lot of young, strapping people pumping more into it than is being sucked out. So for it to work at all they have to make people buy plans that make no sense for them to buy. Now, a friend of mine describes this as follows: "Mandatory insurance, therefore, is just to prevent freeloading or gaming the system." But note that actually paying your doctor real spendable cash and discharging your debts can hardly be described as "freeloading". What he calls "gaming the system" can just as readily mean "making sound economic choices".

But what about the poor?

In a free market system, every doctor does a certain amount of pro bono work. The cost of doing this is borne in small part by the doctor himself, and in large part by his other patients. They pay higher costs, and the increased disposable income allows the doctor the financial latitude to provide that pro bono care. Is this perfect? No. Doctors aren't evenly spread geographically, and those that practice in poor areas have few insured and/or wealthy patients who can offset the costs. Also, doctors are physically limited in the number of patients they can reasonably accomodate. The overflow of patients (with insurance or without) go to hospital emergency rooms. As you can read just inside the door of every U.S. hospital that accepts Medicare and Medicaid funding, the facility is required by law to provide emergency treatment to patients regardless of their ability to pay, and regardless of whether they have insurance of any kind. This has been the case for decades.

But this isn't perfect either. An emergency room is there for emergencies, and they're only required to give you treatment to stabilize your condition so you can find a doctor for your (stabilized, non-emergency) condition. Most reasonable people would agree that a cold or minor ailment isn't really an emergency. After all, a cold is going to go away in seven to ten days no matter how you treat it. Nevertheless, emergency rooms are filled with uninsured patients with minor ailments. Part of this is because they don't have any place else to go, if their local doctors are not taking patients. But part of this is because we force them in there with stupid regulations. For instance, schools require a doctor's note to excuse an absence, though every parent knows what a cold looks like, and that the child shouldn't be in school. Nevertheless, this regulation forces people into expensive medical appointments for no more reason than requiring a rubber stamp approval to stay home. And since (as we've already noted) doctors have busy schedules, they find it difficult to work such appointments in on short notice. Where are you going to go? To the E.R., of course. Thus the educational system, by distrusting parental judgement, causes the cost of healthcare to rise. This is government in action. Almost all multi-symptom cold medications contain the same four-or-so ingredients. Mom didn't need a doctor to tell her which one to buy, and little Johnny is going to be at home regardless. The only thing the school has done is to force someone to drop $100 into the doctor's bank account.

In either event, the number of people who don't have insurance does not represent the number of people who can't simply can't get healthcare even though that's what ACA proponents want you to believe. A large number of them don't buy it because they don't want it; it's not an economically sound bet. Some are small business owners who would rather just pay the doctor cash for service. Some people would rather take the risk and bank the money. Some are foolish, and take the risk, spending the money rather than banking it. And a statistically smaller percentage are people who can't afford healthcare and need the insurance and can't get that either. However, a statistically smaller percentage is still a large number of people, so there can be no shortage of "personal stories" to put on display.

Note that the free enterprise system addresses the problem by shifting costs. The ACA addresses it the same way. The big difference is how the costs are shifted. Instead of doing it at the point of service, where a doctor can determine how much it costs for him to meet his expenses and stay in business, the ACA forces all the people who don't want insurance to buy it. It also forces all of the people who can't afford to buy it to buy it anyway. Of course, since they can't afford to buy it, the government offers "subsidies", which are actually pulled from the premiums of the people who can afford to buy it (meaning that their premiums are necessarily inflated), and in "fairness", to keep the premiums on any tier roughly equal, they pull more money than necessary, in order to meet the inflated premiums caused by the subsidies. So we can expect more money to be shifted than is technically necessary to cover the shortfall. The end result: everyone's premiums go up. Period.

What they'd vastly prefer is a single payer system, where there's one insurer (and that's the government or a government sponsored entity that's indistinguishable from the government) into which everybody pays and which pays every healthcare provider. In this sort of system the costs are fixed. They pay what they pay, and since they're the only legal payer and they write the rules, if you're a doctor who wants to get paid you shut up and take the money. That won't fly politically, so what they have is far from perfect.

For one thing, the penalties are lower than the insurance. So people aren't going to buy in. So everybody else's premiums go up (again) because budget expectations aren't met. You won't get punitive "taxes" (those are really fines, Supreme Court), until about the third year, so you get a couple of rounds of increases before people are actually forced into it, which means that by the time they actually try to buy insurance, the stuff they couldn't afford before is really unaffordable. But in actuality, you don't get punitive fines ever. In 2016, if you're a small business owner making $100 grand a year, your fee/tax/penalty will be $2,500 for the year. Divide it by 12. That's $208 and change per month. After all of the rigamarole and cost increases, it will always be cheaper to remain uninsured. So the only people who have incentive to buy into it are those who can't afford it and are subsidized. Where the subsidies would come from, God only knows, because nobody else really needs to buy in.

So the ACA doesn't just shift the costs, it shifts the entire problem. The "insured poor" become the "how-the-hell-do-we-pay-for-them poor". The "uninsured poor" becomes "the uninsured middle class", and they won't even qualify for subsidies. And the penalties won't cover the amount of the shortfall. And penalizing someone still won't make them insured. And because they're penalized, they are less able to buy insurance than they were before the penalties. Meanwhile, the system still won't be able to afford to cover the people it's intended to cover; but this time, the providers can't adjust the costs, because they're fixed. Goodbye common sense, hello underground healthcare system.

There is nothing "affordable" about the Affordable Care Act. Nothing. It doesn't mathematically add up. There will be some kind of forced change to the system, because as it stands it's just dumb and will collapse on its own anyway. Understand that I'm not saying that people shouldn't have healthcare. I'm saying that this law is just a really bad way of going about it. A system that can't pay for the poor and can't get sufficient money out of the middle class is worse than what we had.

Remember, for the populace this whole thing was a gamble. We weren't allowed to see what was in the bill until it was passed. If insurance is gambling against yourself, our country just rolled the dice and got snake eyes.

Tuesday, November 25, 2014

Ferguson Burns to Prove... Something.

It's amazing (actually it's not) that it's nearly impossible to find unbiased coverage of the grand jury decision in Ferguson. All of the coverage is of the REACTION to the decision, with very little dispassionately reporting the details of the actual decision. THIS is why I dropped out of Journalism... it's not about news, it's about schadenfreude and entertainment.

However, at this point, the story is the reaction. To get you up to date, here's this from NBC: Ferguson: Businesses Ablaze, Bullets Fly in Overnight Mayhem Over Grand Jury

This isn't Ferguson, it's Kiev. I'd show you a pic of Ferguson if I had one
that's covered under a Creative Commons license.
Regarding that reaction, I can spin editorials as well. Here's a Right-wing rendering of what the Liberal commentators won't say:
We have learned that the Black community of Ferguson and its environs feel that they can send a message about one of their own being treated as a thug by demonstrating en masse that they are thugs. To this end they whip out the guns and torches and burn down the buildings where they buy their bread and clothing and other supplies. Tomorrow, they will cry to the government over the lack of bread and clothing and other supplies, thereby demonstrating that thugs are stupid and short-sighted. The Leftist Executive will wail about what a tragedy it is that the innocent people of Ferguson have no bread and clothing and other supplies, while he and other Liberals plan on compassionate relief efforts that will cement these citizens' dependence on government salvation from... er... government oppression.
Meanwhile, the smarter business owners of Ferguson -- those who kept their insurance policies maxed out and up to date in anticipation of this most predictable event -- will take said insurance money and run as fast as possible to some other, more stable area to re-establish their businesses. These will NOT be in Black neighborhoods, and you can be certain that the Liberals will point out that it is despicable Racism and not the blatant brutality of the "victims" themselves that is to blame.
The Boston Globe published this story yesterday: Ahead of Ferguson decision, an education in nonviolence. Rev. Osagyefo Uhuru Sekou traveled from Boston to his hometown of Ferguson to conduct nonviolent civil disobedience training. Obviously, the lesson didn't take with nearly enough people.

For the record, you cannot make a valid argument against an unjust system by being unjust. Gandhi's lesson in non-violent protest makes it clear that you must be obviously right, and allow your oppressors to be obviously wrong in order for such protest to work. Then those who have no interest in the matter other than their desire to see justice prevail will come to your side.

In the present case, a police officer who responded to a call with what the grand jury determined to be prudence, just as many other cops of all races have done in many other jurisdictions in cases that have not been protested. The officer may have been wrong. The prosecutor may have been wrong in not pushing for a particular outcome. The grand jury may have been wrong in their conclusions. All of that may have been wrong, but the end result is that the judicial process was followed. If the outcome is wrong it is not the fault of your grocer or your local cell phone salesman. And one case of injustice against one person... even if that's what it was... does not justify thousands of cases of injustice and violence perpetrated as a result. To do so is counter-productive in the extreme. The cop reacted as if the citizens of Ferguson were inherently dangerous. Today, the citizens of Ferguson proved the officer absolutely right. They didn't have to. It never works. They did it anyway, despite logic and sound reason and education. That's sad.

In a Denver Post article, Denver Mayor Michael Hancock had this to say: "Whatever the grand jury decides in the Ferguson case, my hope is that this community, and our larger American community, will keep in mind that our response sets an example for our children." 

Well, yes. Exactly. One cannot take the moral high ground while acting like a petulant spoiled infant, throwing his bowl when lunch was not to his liking. When my children did this they got nothing to replace it. They quickly learned to eat what they were given and bear disappointment with calm. Imagine what terrible people my children might have grown up to be if I didn't teach them that... if their every disappointment was allowed to be met with a tantrum and violence? I don't have to imagine. I saw it on the morning news.

Obviously this doesn't apply to all the people of Ferguson, Missouri... just those with the torches and pitchforks. It's clear that these protests, or ones like them, would have happened whatever the jury decided. This isn't about Michael Brown, and hasn't been. It's about a political opportunity. And sadly, any positive political change is undermined by the hamfisted way in which this was carried out. They did it as badly as it could possibly be done. They don't have a Gandhi. They don't have a Martin Luther King. And they don't want to hear any of that non-violent message either. The 'leaders' they have don't know what they're doing. There are victims, but they're not Michael Brown, and they're not just in Ferguson, and it's not the authorities who just did the victimizing.

Saturday, November 22, 2014

Digital Dark Age

With apologies to St. Benedict
I've often had the thought that in the distant future, archaeologists who investigate our civilization will be perplexed by the "fact" that at the very height of our civilization, the human race simply decided to do away with writing. As everything gets moved to impermanent media, should our civilization fall into ruin (or simply evolve into something quite different) it will appear to future historians as though writing itself became relegated to ceremonial use only, labeling public buildings and tombstones. Now that someone has invented the digital tombstone, even that use may disappear.

I'm not the only one who's had these thoughts:


There's even a Museum of Obsolete Media. Of course, it's a virtual museum, stored on digital media, so eventually it may experience the ultimate irony when it becomes obsolete.

I'm old enough and came into computing early enough that I've personally used punched cards, paper tape, paper print-outs, magnetic tape, 8-inch floppy disks, 5.25-inch floppies, 3.5-inch floppies, Zip disks, CD, DVD, external magnetic hard drives, solid-state drives, and a variety of USB flash drives to store my data. ALL OF THEM DEGRADE OVER TIME. EVERY SINGLE ONE. The books and the paper documents that we have have turned out to be far more durable than any of the digital media that we've yet devised, and even those pages will rot over time.

Nothing endures. Depending on what happens in our society, in a couple of thousand years, all that may be left are the stone engravings of previous eras... but the kicker here is that our own archaeologists have dug them up, removed them from their historical strata, and entrusted their provenance to the same impermanent media that will render our deeds invisible to future generations. Should we lose our own history then we will have killed the memory of everyone before us.

I'm currently in the laborious process of recovering data from a 2 terabyte drive that recently bit the dust. I'll be doing that for a long time. That is, of course, the impetus for this little missive. But the reason for it is, in the spirit of advocacy, spell out a few important lessons I've learned in the 35 years (or so) that I've been computing. So, in the order that I thought of them...
  1. Back up your backups. When you first get an inkling that a medium is headed for obsolescence, get everything that needs to be saved off of it. I thought that this large-capacity drive would be more reliable than it is. In the future I'll budget for two, of compatible size though different manufacture.
  2. You don't really need to back up everything. Sometimes, programs are truly obsolete. They've been replaced by something far better and you don't really need it anymore. Sure, it may have done the job then, but you haven't used it for years and have no data that requires it. Learn to let go.
  3. Use open formats. In other words, make sure that your data don't require particular programs to run. As an example, ODF documents can be read by any number of programs... StarOffice, OpenOffice.org, LibreOffice, Symphony, etc., and may even be opened and largely understood by unzipping them and reading the XML files. Old WordStar documents are mostly marked-up text, and I've found that they're actually pretty readable on their own. But proprietary formats suck. When the program is gone or can't run on your platform, the data are useless. Free (libre) software require no software keys or activation codes, and your access to those programs will never be cut off. For my personal computing I switched to free software in the late '90s and haven't missed the proprietary stuff at all.
  4. Emulators rock. When you're stuck with data that can be read by only one program, and the program can only run under a legacy system, then emulation may get you there IF you can get the data off of the medium.
  5. Legacy media readers rock. I still have an Iomega Zip drive. AND a 3.5" floppy drive. AND an external CD/DVD reader. I also have a nice, cheap external hard drive dock for SATA and IDE drives. And they ALL are accessible through USB or through a RS-232 to USB converter. While it's a good idea to get the data off of those formats as soon as you can, you have to remember that it's not only your media, but your computer itself that can become obsolete, and it may die unexpectedly. It's a good idea to have an external reader for every ancient format your prior machine could read, just in case.
  6. Disk images rock. Often, a program expects data to be on not just a disk, but a particular type of disk. While the programmers who made those assumptions should have been drowned as children, you're left to deal with that problem. I deal with it by making ISO disk images of the media, which I then mount as a virtual drive. This can be done in a number of ways. In Linux I use a program like AcetoneISO to mount the drive directly to my file system. In Windows I use PortableWinCDEmu for the same purpose. But push comes to shove I can mount the image as a drive in an emulator or in VirtualBox to be read by the (emulated) hardware or OS that supports it. Disk images cannot be scratched or misplaced. They can, however, be lost if the media on which they exist dies, so point 1 above is hugely important. I can't stress it enough.
Up to now I've been a data hoarder. I don't really "do" traditional photos and I've even digitized a great number of my books (and no, you can't have copies unless they're in the public domain, in which case you can probably find them no Project Gutenberg). The record of my life is basically on digital media. But experiences like this have me wondering whether I should just embrace the ephemeral nature of Life and live in the moment. A thousand years from now it may all be gone anyway.

Tuesday, November 04, 2014

Green Eyed Monsters

Inventor Dude has a neat idea. He decides to take a big risk. He invests his own money and time, or maybe borrows, and turns his idea into a product and sells it on TV. You look at it and say, "Hey! That's a really great idea! And it's a bargain, too!" So you buy one at $9.95, get a free slicer-dicer with it and you think it's incredibly fair.

Then a couple of million of other people buy the same product at the same price with the same incentives, and with the exception of a few who got refunds, they all thought it was incredibly fair. The product become wildly successful! That risk... the chance he took... has paid off.


Then somebody looks at Inventor Dude's bank account, notices it has a lot of money in it, and concludes that it's an "unequal share"... despite the fact that the customers were treated fairly and got a good deal; the manufacturers got a good deal, the distributors got a good deal, and the television station got a good deal from selling ads. Everybody on the list is better off, and nobody on the list was forced into it.

Nevertheless, a few of the "99%" start whining and crying and convince others to join them in protest over how badly they've been "cheated".


But here's what they can't explain: At what point in this process was anybody ripped off? At what point is the Inventor Dude's profits not earned? At what point are you owed even a single penny of it? You already got a great product at a great price, and now you want the profit, too? That's easy enough to fix... you go do what Inventor Dude did. Then you tell us how easy it is, and how your profits aren't earned. You give your profits away to make things more equal... because unless you are, "more equal share" sounds a lot like a jealous rant.

What's sad is that you know you got a good deal. Walmart is the largest retail company in the world. They got that way not by being greedy bloodsuckers, but by offering decent products at a price that is affordable for people of modest means, like us. Poor people shop at Walmart preferentially because they're not gouging us. Then having chosen to shop there because it's a bargain, we hypocritically complain about the big ol' greedy corporation! If you want to talk about dishonesty, start with the guy in the mirror!

Some of the people complaining about "obscene profits" are folks like Student Dude, here on the left, who traded $25,000 for a college education that he felt was worth far more than $25,000 at the time of the transaction. He had a choice to attend a lower priced local state-funded university or community college that would quite frankly have done just about as much for his future earnings, but he chose his university and his debt. He applied for it, he stuck his neck out for it, and he made promises for it, despite having lower-cost options. Since he couldn't afford it at the time, he got government-backed loans so he could pay it back over time, after he got the full value of the education and started reaping the rewards. He chose it, and he begged for it. Sadly, the education he's receiving isn't comprehensive enough to imbue him with an understanding of how this transaction works, and why it's not unfair to him; how he is already receiving like value for the value he has promised to return in the future. This is basic economics, and it is the fairest human activity as yet devised. And this guy, right here, in the picture, doesn't appear to understand that. 


THIS IS HOW IT WORKS

Yeah, I know Vince isn't the
inventor, he's the pitch-man.
Guess what? That's the service
he's selling. Understand?
If one guy makes a million people happy and gets only a dollar per satisfied customer, then he's going to have a million satisfied customers and that one guy will rake in a million dollars. He didn't rip anybody off: it's the result of a million fair exchanges. The "equal share" was exchanged at the time of the sale. It just doesn't look that way to you because somebody's hornswaggled you into thinking that all of that value must be expressed in cash to be "equal". Well, it doesn't. You get a lifetime of chopped veggies and Vince gets a one-time payment for the Slap-Chop. If you'd rather have the money than the convenience, then don't buy the Slap-Chop! Sell something of yours instead.

The fact that the income gap is widening is frankly irrelevant, because on the average it still rises for everyone. YES, the entrepreneurs got a bigger slice because theirs is an aggregate slice of millions of transactions as we've described above. That's a million transactions that they made that you didn't. But the whole pie got bigger, too. And in the course of growing the pie the rest of us got gadgets and conveniences and our standard of living improves across the board. After only a few years of exclusivity, Inventor Dude's patents expire and the entire world can use that invention for free. So a few years of market exclusivity result in a permanent rise in the standard of living for all humanity.

Inventor Dude's success in the market does not impact my ability to also be creative and successful. In fact, I can take him as an example or role model and compete with him directly. Or I can take the principles of free enterprise that made him successful and apply them to other products and services in other markets.

The only people who are taking my money and leaving me with "less and less" are the government. For everyone else in a free market economy I have a choice to buy or not to buy. Only the government mandated a tax code where the last time I got a raise I started taking home less money. Only the government mandated a healthcare system where my premiums doubled and my deductible increased by a factor of seven so I could pay more with less. And contrary to popular myth, everybody has a chance at education and betterment. You don't absolutely need college for a decent job... my roof was crowded yesterday with Mexicans who somebody hired because they were willing to do honest labor for an honest wage. Today another batch of Mexicans put up gutters, a decent and respectable blue-collar job abdicated by many Norte Americanos. The plumber who was in my basement last week makes as much per hour as my doctor. And even if it's a college education that you need... and I don't know what state you're in... I have a receipt sitting here in front of me for enough public aid, grants, and student loans to cover my youngest son's tuition with some beside. You don't have to go deep into debt to get a degree. He took on some modest debt that will be paid back with the "betterment" that both he and the lender took a chance on. That's the exact opposite of "no chance".

Remember that the wealthy got that way by making opportunities. They engaged in numerous transactions that you didn't. And it's not just the number, but the type of transactions that they made that are important. All transactions are value-for-value. But they're trading [product or service] for [cash]. Nevertheless it's still value for like value. They're just doing a lot of it, because they're taking chances on opportunities that you aren't.


GREEN EYED MONSTERS ARE GULLIBLE

But "Oh!" you say, "The 1% didn't invent anything! They inherited their wealth and get more by rigging the system!"

Bullshit.

First of all, when someone inherits wealth it means he got it from his parents, not from you. Furthermore, it was a gift, not theft. Furthermore, you are in no way part of that equation, and at no time have you ever had a claim to any of the wealth in question. Don't be a greedy jealous bastard.

Secondly, rich people who don't produce lose money quickly. The list of the world's richest people has new names in it every single year. Every. Single. Year.

Look at Bill Gates. He was born into a rich family, but he invented and produced and grew his own personal wealth much greater than that of his father's. He still started out in a rich family, but he saw opportunities and took real risks, including dropping out of college when he saw that a Harvard education was not as important a factor to his success as the opportunities he could leverage by dropping out. He began with a lot of his own labor but ultimately had no hand in coding most of what Microsoft produces; rather, he hired people who could do that work. He gave thousands jobs in exchange for the use of their expertise and skills... fair exchanges for the most part, though his business practices regarding the marketing of Windows have often come into question in a number of courts. He's now running the Bill and Melinda Gates foundation and gives a shit-ton of money because he has it to spare and he's generous.

Now look at David H. Koch. He, too, was born into a rich family. Like Bill, he didn't sit on his ass and count inherited money. He stayed in college... MIT... and earned bachelor’s and master’s degrees in chemical engineering. He took that knowledge back to his family's company, Koch Industries, and put it to work in a new direction. Koch Membrane Systems efficiently produces clean water out of wastewater. He grew the family business and became an executive vice president and a member of the board. And yes, he had a leg up, because it is a family business... their name is on the door. That means it's not your business. But he took his risks, he came back, added value, continuing to make those numerous transactions that increase cash. Despite not being the richest guy in the world, he's still pretty rich, and didn't wait for retirement to start giving away a shit-ton of money out of generosity.
A long-time philanthropist, Mr. Koch has given generously to a variety of organizations and programs. In his lifetime, he and the David H. Koch Charitable Foundation have pledged or contributed more than $1.2 billion to cancer research, medical centers, educational institutions, arts and cultural institutions, and to assist public policy organizations.  -- KochFamilyFoundations.com
When it comes to your perception of these two men, the biggest difference between them is your personal politics. George Soros is wealthier than the Kochs and gives more to political PACs than the members of the Koch family combined. But that's neither here nor there... it is no more our business to care where these people give money to than it is their business to care where we give ours. But your politics would have you demonize one while lauding the other; though economics insists that their wealth was fairly obtained. Your politics is biased, and so is your perception.

Boromir gets a footnote!
See the postscript
It amazes me how political hacks can prey upon your insecurities and jealousy and bring out the very worst in you. Rather than being inspired by success to try to emulate it and become successful in your own right, you're encouraged to believe that the rich could only have gotten that way by cheating: obviously no one who plays fair (like you) could have amassed that kind of money fairly.

(Corollary: you're never going to be rich. So they shouldn't be rich either. Except for accident of birth, the money could have been yours, it should be yours, it is yours. You need to take it back because you can do so much more with it.)

I know. You don't think you're like that. But you are.


ROBIN HOOD WORE GREEN

Instead, I'm sure you think you're more like Robin Hood. There's actually a "Robin Hood Tax" that's seriously proposed by the "Occupy" crowd. The allusion is of course, to the famous character who "robbed from the rich to give to the poor". Except... you probably haven't really thought much past that. Here are some things to remember about that story:
  • The upstart government is clearly depicted as "the bad guy".
  • Robin Hood inherited his money (he's the Earl of Loxley, or in some versions Huntingdon), and the government confiscated it. This is clearly depicted as unfair.
  • Robin Hood fights the government to return to the people that which was taken through burdensome taxation. The people that he robs aren't merely rich; they're cronies of the government. In those days taxes were privately collected by those who managed the estates and taxes were always transported as cash and goods.
  • At the end of the story, the old guard returns, undoes the evil of the upstart heavy taxers, and returns private property even to the landed gentry like Loxley, who championed the idea that people should retain that which is theirs. This is clearly depicted as a happy ending.
Remember, Robin Hood fought to relieve the people from the onerous burden of taxation. He didn't rob due to some socialistic ideology, and he wasn't living in Sherwood Forest by choice: his house was confiscated by the government of Prince John. Story aside, in the real world it is this same John (called "Lackland") who succeeded Richard I ("the Lionheart") and was so ingloriously reigned in by his own rebellious barons, who forced him to sign the Magna Carta, to limit the power of government and assert the rights of the people.

Maybe the story of Robin Hood doesn't mean what you think it means.



Postscript: a commenter on Facebook took issue to my usage of Boromir to illustrate my point. To wit:
Boromir wasn't motivated by envy. he was motivated by fear-- for the fate of his people-- and the promise of survival if he compromised and used the corrupting power of the Ring
To which I respond that I don't pick my metaphors lightly.

Motivations are not so simplistic as that. "This is a gift," says Boromir of the One Ring. At his core Boromir wanted the survival of his people. He also wanted their adulation. He also wanted his father's approval. He also wanted power and independence. "Gondor needs no king," he disdainfully announced to Aragorn. All these things at once, and more. But given that complex mix of motivations, my Critic seems to think that it was his choice to compromise. It wasn't. The One Ring was already exerting influence upon him and his human weaknesses in an attempt to rejoin Sauron, and surely this was more likely in the hands of emotionally torn Boromir than in Frodo's hands.

Envy is the nature of the corruption exerted by the One Ring upon him. It tempted him with the promise of all he needed. Boromir saw an object of great power that he felt was being wasted in the hands of others. Surely Boromir thinks he himself could wield it better.

Here is the incident (link to YouTube) as depicted in Peter Jackson's movie adaptation. Note Boromir's statement (and I'm quoting here from J.R.R. Tolkien's book, The Fellowship of the Ring):
"'It is by our own folly that the Enemy will defeat us,' cried Boromir. `How it angers me! Fool! Obstinate fool! Running wilfully to death and ruining our cause. If any mortals have claim to the Ring, it is the men of N├║menor, and not Halflings. It is not yours save by unhappy chance. It might have been mine. It should be mine. Give it to me! '
Here, Boromir is deceived into believing that the one viable course to action is folly. He will not extend his thinking to encompass the solution that addresses root causes, and is deluded into thinking his plan to attack those symptoms that directly affect his own immediate interests is the better way. From there, he rationalizes he has the better claim, despite the fact that this is a claim to power that belongs to neither of them and should never be used. From there, he concludes that his claim is proven and beyond argument. This leads to jealousy and anger that others are keeping him from "his" due. This is the very thought process utilized by every advocate of wealth redistribution, ever. They sometimes, though very rarely, express it more eloquently but underneath it all, this is always what we find.

Don't imagine that those who want to redistribute wealth or power do it out of mere envy. I'm sure that they honestly believe they are better qualified to use the power represented by the money, despite being ill-equipped to earn it. They do truly believe that their way is better. Like Boromir, they are deluded. However, Envy is at the heart of every "Occupier" and precisely what is deliberately cultivated by every populist panderer who would prey upon them for political gain. Envy is the tool with which they gather the power they crave.