The 6 Pack Economist

I just wanted to put something out there because I am getting tired of the argument that the “public option” would just add much needed competition to the healthcare market.  For those liberals who now, after deriding competition in every other portion of their lives, have found a love for competition.  Then again when you are playing for the team that that referees bet on before the game, competition seems great.

Do these people really think that the public option will compete on a level playing field? Of course it will not.  The public plan will be able to run at a severe loss and just ask for more tax payer money.  The private plans will not be able to do this.  Ironically the profits the private companies will be making will be taxed, and this tax will go to help the public plan undercut the profits for the private company.  In addition, because current private insurance will be taxed as income, the private insurance companies will have to drop the prices of their plans to account for increased cost of the plans. 

I think many of the regular Joe’s pushing for the public opinion are primarily looking at this through hate filled eyes.  Much of this is probably warranted as the private insurance companies have pulled some very dirty tricks on people.  Issues from pre-existing conditions, dropping people for minor infractions, and just charging too much are all valid reasons.  I think in this case the cure is worse than the sickness.

I am sure that Black Beard, Blue Beard, and Jack Sparrow are rolling over in their grave watching these poorly styled amateurs pretending to be pirates.  I mean what happened to pride.  These guys are running around in Uncle Billy Bob’s dingy.  I want frilly shirts and Eye patches damnit!

I am happy to see that a ship full of American merchant marines fought off a group of these poor excuses for pirates.  But then you have some jerks stating that they should have just hung around and waited to be ransomed like a bunch of …..  Well place your favorite nationality here.  

The International Maritime Bureau basically wants the crews of these ships not to take any action once boarded.  Even prior to boarding they do not want the crews to take any lethal force just speed up and spray water on the attackers.  Unfortunately the people making the rules do not understand basic animal instinct.  And these guys are just animals.  Rule of the jungle states that “the weak and easy targets are eaten first”.   

I think (for whatever the hell that is worth) they should immediately change the rules.  The crews of these merchant vessels should be instructed in how to repeal invaders.  Ships should be equipped small arms and the crew should be trained in their use. 

This will immediately increase the cost of being a pirate.    Remember I believe in the whole risk and reward ratio.  This pirating business has become such a boon because there is no cost to the pirates.  They show up in a boat that seems to be something you would rent to go fishing while vacationing at the sea shore.  The crews of ships just stepped aside while the pirates took over ship and made the call to the company for ransom.  I think the call went something like this.

Somali Pirate: “Hello, Damnit a god damn machine”
Corporate Computer Answering Service: “Press 1 for English, Pora Espanol dos” (I don’t speak Spanish sorry)
Somali Pirate: “I am going to go with English is just makes everything easier with the banks”
Corp Comp: “If you know your parties extension dial it now or press 1 for more options”
Somali Pirate: “What is that guys extension.  Damn it where did I put that number.  Oh here it is”
Corp Comp: “Now transferring you to:  Ransom Department”
Somali Pirate: “I hate waiting on hold. This is the problem with the ransom business.  So much competition that I have to wait on hold now for 30 minutes.”
Corp Comp: “Your call is very important to us please continue to hold”
Somali Pirate: “What bull shit.  If it was that important you would pick up the phone”
30 more minutes later.
Ransom Department: “ Hello may I help you”
Somali Pirate: “Yes I took control of the ‘We are big Wussies’ cargo ship and would like to be paid.”
Ransom Department: “Do you currently have an account with us?”
Somali Pirate: “Oh yes of course, I am not an amateur.  Account number is  ‘1231######’” (I have to protect the Pirates identity)
Ransom Department: ”Is your TaxId still the same.  And you are aware that this money must be reported as income per the IRS”
Somali Pirate: “Everything is still the same.”
Ransom Department: “And how much should we pay this time”
Somali Pirate: “I am running a special this week.  Since I have two of your ships I will give them both back to you for 15 million”
Ransom Department: “Seems reasonable,  you will see the money in about 12 hours”
Somali Pirate: “Oh thank you very much.  Nice Doing business with you”
Ransom Department:  “Please do not hesitate call for your next ransom, good bye”

These guys have set up a smooth process oriented business around this ransom business.  Well until recently that is.  This small act of defiance, despite the danger, will force the pirates to think twice once it is known that someone might fight back.  It won’t deter many, unless more crews fight back.  The turning point will be when some pirates actually get killed in trying to take over the ship.  The escalation will continue as both groups begin a little arms race and more people will die.  In the end though the pirates will be forced to take more precautions and the gold mine of pirating will decrease.  Those that stay in the business will have to up-gun themselves.

The act of up-gunning themselves will be the undoing of the groups.  Primarily the reason why they could not take these rinky dinky boats out to go do pirating is they would not stand up to the job.  They will have make or modify boats specifically for the purpose of raiding ships.  These ships will be more easily spotted and chased down.  The boats will be spotted at the bases of operations and then one night a squad of SAS or Seals leave a bunch of dead bodies.

This brings everything back to a very simple point of life.  If you don’t fight for yourself you will get walked over.  Once you are known as someone who will not fight back, then everyone else around you will also walk over you too.  On the other hand if you are known as not taking peoples crap then those around you will not give you any crap.  They will even think twice about giving you crap that you deserve.  Why, because it comes with a cost, the cost of you fighting back.

Orginally Posted in September 2008

 I have gone through a change on immigration.  I used to be a “kick em all out and close the borders type of guy.”  I have now changed to “work, pay taxes, and speak English” and you can stay.  I have changed because of personal experience.

 While working on a buddies house we took a break and had beer on the porch.  A few Mexicans came over asked if there was work to be done.  At the time we were pretty much done but even in their broken English they kept asking for work.  They all had jobs for during the week but if there was work to be done on the weekends they wanted to do it.  I have to say I was very impressed with their initiative.  And that if anything embodied the American can do attitude it was this.  Sure it increases the size of the labor force and there by decreases the wages for this labor, but nothing was stopping the rest of the born in this country Americans from working. 

 Of course many large corporations take advantage of this in rather unfair ways but when I see people with limited skills complain about the lack of work available for them I can’t help but think they merely need to ask for the work.

 If you are a highly skilled person and you can not find work in the field that you trained in I feel for you.  You put a lot of effort into acquiring a skill and can not find work in that.  On the other hand if you have no skills and you will not work for whatever you can get I can’t help you nor do I want to. 

 I also believe that the less you work the more apt you are to work even less.  Simply put you are used to sitting on your ass and refuse to get off it.  Aside from temporary unemployment I believe people should pull their weight. 

 This brings me back to the immigration issue.  These people have so many things going against them.  They don’t speak the language, the culture is alien, and they have no connections.  But the work they do merely requires a strong back and a work ethic. 

 I also believe that we have created this situation ourselves.  We have so much in this country.  We have gone soft.  From high school kids to high school drop outs.  Perhaps this is a symptom of the hand out society that people expect something for nothing I am not sure.  It seemed to happen to those about 4 years younger then I.  I remember being in high school and fighting the other dishwashers for extra shifts to make more money.  Later towards the end of college these high school kids would show up to work late if they even showed up.  This was about the same time these same jobs started to be taken by immigrants. 

 It was not the wage.  It was more then what I made when I did the same job and we did not pay the immigrants any less.  It was all under the table by the way.  So it was not a case of the immigrant making more because he did not have taxes taken out. 

If you are expecting something about throwing our money down the blackhole of failed investment banks and such I am sure there are plenty of other posts like that.  This one is different as I am going into the “too big to fail” theory and how it is similiar to the physics of blackholes.  The short version of this is that when companies or organizations get too big the sheer mass of them failing pulls so many other companies with them that the standard rule of markets breakdown.

In physics blackholes start breaking traditional rules of physics.  Rational explantions of what goes on in the world simply do not apply (yes I know about how they work but try explaining it to a regular non-phd holding person and all they here “weird stuff happens).  This happens because they become some ackin to there own self-fulling prophecy.  Each piece of mass they pull in allows them to pull in more mass.  Something similiar has happened in our economy except instead of physics breaking down, the free market breaks down.

 Under normal cercumstances a company that has failed as miserably as those in todays market would just be allowed go into bankruptcy and either recover or close it’s doors.  In smaller companies this might cause a few other companies to fail that normally would not but nothing too severe (unless you are the one who lost their job).  What made this different is that many of these investment banks have swallowed each other up over the years that these massive institutions would essentially cause an economic blackhole by their collapse.  They would suck all those nearby into their collapsing mass.  The resulting devastation would end much of the economic progress people have made through their life. 

Do I like it. No.  I freaking hate that these miserable failures have to be saved.  I just wished that these damn mergers that the FCC authorized over the past 30 odd years may have been better scrutinized.  That way a bunch of little failures could occur.  We could take our medicine and recognize that that way of doing business does not work.  Those CEO’s and upper excutives can face financial ruin for dumb decisions and other savier business leaders could prosper.  Instead we reward failure.

So the Big 3 American Auto companies look like they are screwed.  I have mixed feelings about this.  First off I think they put themselves into this situation, from the CEOs to the UAW.  On the other hand I always like my Fords, Dodges, and Cadillac (I drive two GM products right now) so I would hate to think that they would be gone.

 I do believe that the big 3  treated their customers like a bunch of dumb hicks for way to long especially from 70’s to late 90’s.  In the late 90’s even GM realized they may have to put money into research and development.  In addition they had to at least compete with the imports (Japanese, the Germans have never been too much better then the domestics) on the issue of quality.  The Japanese put out a very reliable automobile in most segments.  By the time the 1990s came around the Japanese cars have established a reputation for reliable cars (sure the wheel wells rusted out, but it still ran).  Meanwhile GMs, Fords, and Chryslers were making a reputation for inferior quality.  The market began to change and the big 3 refused to recognize this.  Unfortunately once your reputation for long-term reliability is lost it takes a long time to get back. 

 The only thing that saved the big 3 or at least staved off this problem for a few more years was the low-gas prices, OJ Simpson making Ford Broncos famous, and a series of bad winters in the north east.  The SUV and Big Trucks ruled the road and the Big 3 were good at making them.  Even during the dark days of the “80’s crappy domestics” the American companies were good at rear wheel drive V8s. 

 In what has become typical of American corporations all emphasis was on short term profitability.  R&D and marketing went into SUVs while the lower profit cars languished.  The Japanese were able to make steady gains within in the car market which was virtually ceded to them by the domestics.  Other then ford, which had a few nice cars in the late 90’s, looking for a domestic car was pretty disappointing.  All of their money or profit was going to marketing SUVs.  These short sighted fools held onto a belief that gas prices will never rise or that the imports will not start making some fine SUVs to compete with the domestic golden goose.

 In late 2006 the weather forecast was in and a perfect storm was coming.  Gas prices were rising, imports were making better SUVs, and a recession was on the horizon.  The big 3 had all of their eggs in one basket and that basket was smashed.  The innovation and quality improvements that they made in their product came too late, the well they poisoned for so long was going to take a lot longer clean up. 

 
My next post will go into what the UAW did to help cause this.