Explaining Economics one 6 Pack at a time.


  • Tag Archives socialism
  • Healthcare from the people who brought you the DMV

    Posted on by drinker

    Deep inside the stimulus bill was a series of rules and regulations relating to healthcare records.  I highly suggest you read this link about the healthcare record system.  Did you read it yet?  Seriously just read the article. 

    Ok now that you are back and hopefully you are scared.  If you are not scared then you did not read the article.  The stimulus package has essentially setup a great big database to keep track of your health records.  The basic idea is pretty noble.  Unfortunately it will not stay that way.

    Let’s start off with the comedic result of this debacle since laughter is still not tracked. 

    Heather recognizes her husband is having a heart-attack and calls 911.  Lucky for her she called during regular business hours so someone picked up.  Unfortunately she was directed to the non-heart related emergencies and had to call back.  When she called back it turned out that it was during a mandatory break period.  Heather gave up and dragged her husband into the back of the car.

    Heather arrives at the Barney Frank memorial hospital but she cannot find a parking place.  She double parks and drags her husband to the emergency room.  With her husband in her arms she goes to the nurse’s station.  There are four people ahead of her.  Two have what looks like broken limbs of some sort, another has a bloody rag on his head, and one other is hacking away. 

    After 10 minutes she moves to the front of the line to let the nurse know that this is an emergency.  The nurse responds that she is helping another patient.  But the nurse’s four inch long neon colored nails are preventing her from efficiently punching in the current patients name and address.  Heather drags her husband back to the end of the line again.

    Forty minutes later she reaches the front of the line.  Shortly after explaining the symptoms her husband has the nurse tells Heather that she is in the wrong line.  The line for heart related emergencies is down the hall and to the left.  Heather exhausted by this point can barely explain the symptoms to the nurse at the heart related emergency counter.  Mid way through the explanation the nurse informs Heather that it is time for her break and walks away.  A new nurse sits down but the new nurse informs heather that she does not have the proper paper work for this emergency and proceeds to call a supervisor. 

    The supervisor comes over to try and help out.  In between taking bites out of his ham and cheese sandwich he punches a few numbers into the computer and then allows heather to drag her husband to a bed. 

    The doctor comes over to see her husband.  Heather believing her husband is only unconscious is relieved to see a doctor.  The doctor lifts up the husband’s wrist, pronounces him dead and walks out the room.   Heather in a fit rage screams at the doctor but he keeps walking away only the words “security please” are heard. 

    Heather is thrown on the curb.  She is crying and gasping and sees her car is now being towed away.  In shock she has a heart-attack.   She is dead too.

    Ok it is not that funny unless you have a dark, dry, and sarcastic humor like me.  In all seriousness I don’t think the system will break down like this quickly.  Instead it will take years for it to happen but gradually it will break down.  If you are one of the truly rich I would not worry as you will still be able to get care.  It is everyone else that will get screwed. 


  • The proper preparation for Rich People Casserole

    Posted on by drinker

    Eating the rich has always been sort of a sport for most of human history. Unfortunately eating rich people is like eating your seed stock or slaughtering your birthing age cows. Sure the seeds make great bread and the cows make for a really succulent steak sandwich, you will starve later.

    If you don’t believe me, when was the last time you worked for a poor person? Ok all of you social workers sit down those people don’t actually pay you. As much as I don’t really like mega-rich people, especially those that did nothing to get it besides win the vagina lottery. They are a necessary evil. They are the only ones that have enough disposable income to invest it into non-consumption based spending. In other words expanding supply by investment.

    During a recession or depression (depending on your own personal employment status) there seems to be an excess supply of goods (and services) and a non-existent supply of money. This is only a short term situation. Soon the excess supply will be sold when the price is lowered enough and new goods will need to be produced. Unfortunately the people who owned the original production facilities were turned from rich producers to a rather succulent casserole by those less fortunate.

    Unfortunately we normally do not see farther than our own noses when it comes to economics. Part of this is natural, after-all when faced with starvation we look to find food first. But if we eat next year’s food crop to eat for today we will only starve worse later. The more we as a people continue to take from those of us who are successful and give it to those that are not successful the more we eat our seed crop. I should also state that in reality rarely to the less successful actually see a bounty from those that are successful. Usually what happens is the money is transferred from the successful to the politically connected successful.
    People have to remember that we are not rich or poor based on the money in our check accounts or stock portfolio but in our relationship to everyone else. And I don’t mean some squishy love crap I mean that if everyone else has the same as you then you are all poor.

    And I prefer my “rich people” with a little butter and a nice merlot reduction.


  • Smoot-Hawley Part 2?

    Posted on by drinker

     A baby of the protectionist in the US is raising tariffs or restricting what can be imported.  I am not against restricting products from some crazy dictator or murdering nut job but usually it restricts stuff from a country like Canada. So is this Smoot-Hawley part 2? 

    I know that most people’s understanding of history is on par with their understanding of particle physics in a singularity but something similar happened during a past round of economic turmoil.  This was brought by republicans in the 30’s.  It was called the Smoot-Harley Tariff Act and a bunch of protectionists thought it was great to just kill all imports. 

    Let me preface this by relating a rule of life “Never screw people who can screw you too”.  This held true through the cold war.  The US and USSR never shot their Nuclear ICBM at each not because they were buddy-buddy but because they knew the other guy would shot back and everyone would lose.  Large tariffs against other-wise descent trading partners work the same way. 

    The current economic “stimulus” package has some rule about only buying US steel which means it is not a tariff deal per-say.  But this spending package is the GDP of many other nations.  So by keeping other countries out of the deal it is working like a tariff.  In addition other countries are going to be doing their own stimulus packages and US goods will be restricted from theirs.  In the end it may just have a very similar effect of smoot-hawley tariff, although not nearly as devastating.

     


  • Some opinions on news articles

    Posted on by drinker

    More Troops for Afganistan

    There is a saying in the military and grand strategy; “Jr Officers study tactics, Generals study logistics”. Before the US commits more troops to an area of the world in which their only ally is about as stable the chick who stalked you in high school, I would ensure that they can get enough food to at least fight their way to the coast.

    Forget the past two years
    Perhaps the only way we are getting out of this mess is to just delete everything that happened in the past two years. I think a Tom Clancy novel did something like this.

    Screw-it Just right the check
    I find the price of this whole bail-out starting to get ridicuous. Who is going to pay for this? And just so you know I only half heartedly supported the first one and that was with the understanding that they were going to buy bad assets, not right blank checks to the banks.

    A little scary
    I am not big on too much from info wars web site. My rule of thumb on government conspiracies is that they are too incompetent to get it done. But doesn’t freak anyone else that Obama is being treated like a messiah? I hope people keep their heads on straight.

    I have a few more posts I have to review for the weekend. Have fun. And don’t play in the street.


  • O’Rourke Had It Wrong. The Legislators bought the banks.

    Posted on by drinker

    P.J. O’Rourke said “When the legislature controls what is bought and sold the first thing that is bought and sold is legislators”.  Well as it turns he was wrong.  Who knew that is was the legislators who would be doing the buying of the businesses?

     I am going to explain how this could work out for the better before I tell you how it will actually work.  The government buys large amounts preferred stocks and can start guiding the bank on the right path. The banks will be required to hold the top executives responsible and start making good solid lending decisions.  The economy would start to pick up and they banks would be profitable.  The banks are able to return a dividend and the stock price goes up.  The economy now on its way to recovery the government can now sell its share of the company and use that money toward paying down the deficit (hopefully no new spending, but this is the positive part of the piece so let us assume that).   

     Unfortunately the preceding paragraph has as much to do with reality as my dreams of winning the lottery, moving to the Caribbean with a sail boat and being known as the drunken American sailor.  What will happen is this; the government will start off making good decisions for the bank.  Much like the preceding scenario where lending is restored and top executives can’t pillage the banks coffers; these actions will get the economy moving.  Once people have moved on to a new dog and pony show the rats will show up. 

     The return of the rats will mean business as usual.  These banks will be used as leverage between legislators to get pet projects financed in the legislators’ respective districts and to get deals for their own private homes.  Employment from the mailroom to the boardroom will become a patronage bonanza.  The legislators unwilling to give up control of this grand candy machine will not, I repeat will not sell their preferred shares. 

     The banks being essentially a department of the DMV will stop making smart business moves; instead they will devolve into a fat tub of immovable flesh. The banks will be so dependent on government money they will no longer be able to function on their own.  The patronage jobs and pet projects will have bloated the bank’s own accounting records so much that legitimate loans will be squeezed out.  They will know their master and their master is some legislator who will be voted into office again and again not because of his actions destroying a bank, which will be too hard to explain in a sound bite campaign, but because of his stance on some other issue that the legislators will not change anyway.

     The only thing left to do at this point is to get a large loan from a non-nationalized bank and then use that money to give to a legislator’s campaign.  Then the legislator can get you a big paying job at the bank.  While at the bank you can make a bid to buy the bank you got your original loan from and then lose the paperwork for your loan in the merger.

     Toast your next good beer to taking advantage of government corruption.


  • Cult of Personality

    Posted on by drinker

    Why is the left (as in the political spectrum) so infatuated with “cults of personality”.  Even Castro at 82 years old is still shown to be vibrant in his jogging suit.   Although the only thing I can think of is a Saprano with bad hair.  I can sort of understand a little bit of the cult of personality for Obama.  I don’t agree with it, I can only understand it.

     

    When was the last time a leader with cult of personality status said “With me in office, you will be free to fix it your damn self”. They haven’t for a very long time.  The cult of personality leader usually says something along the lines of “With me in office, I will fix it for you”.  How do you expect to get anywhere telling people that you will do less for them then the next guy?  It is a wonder that any real conservative gets elected but that’s another post entirely.

     

    In the book Don’t Think of an Elephant! by George Lakoff (I will put it on my book list soon) he comes up with a theory on why people have liberal or conservative view points.  And I have to agree with him despite being on the other political isle.  Liberals tend to come from strong maternal role households or those that value nurturing.  Conservatives tend to come from strong paternal role households or those that value self reliance.  Think of it this way.  Your mom would tend to the scraped knee while your father would “tell you get up and stop crying”.  Using that understanding it becomes very easy to understand why the left values cults of personality so much.  These leaders are mommy promising to fix stuff for them. 

     

    I don’t know about you but I left my house and parents so I could make my own decisions.  I did not exchange a personal relationship with my real mother for an impersonal relationship with a government acting like a mother.

     


  • Economic Blackholes

    Posted on by drinker

    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.


  • Socialism in Practice

    Posted on by drinker

    If you ever wanted to do a little experiment to figure out why socialism fails do the following.

     

    Get a little lunch group together.  Preferably with a jerk or two.  The second requirement should not be too hard to do, as most people are jerks.  Hopefully you have a group of about 8 people or more. Go to lunch and get one bill.  At the end of the meal just split the tip and bill 8 ways (or how ever many people are in the group). Do not account for who got what.  Just split it evenly.  Note who got what and how much each person spent individually.  Especially note what the experimental jerks ordered.

     

    Do the same lunch again next week.  At the end of the meal again check what people ordered.  The per person expense should have increased.  If not keep repeating for a few more weeks.  It will eventually increase (before the restaurant raises prices itself). 

     

    It should not take a genius to figure out what is going on.  The first few people will see a real benefit to their bottom line by scamming the system, but soon the whole group will be recklessly ordering food.  This my fellow readers is the primary reason that socialism fails.  People figure out the game and very soon they begin to exploit it. Soon everyone is scamming the system and it collapses under its own weight. 

     

    Good luck and there is never a free lunch.  Occasionally government subsidies but it’s never free.


  • Funny Ad from Google

    Posted on by drinker

    One of the ads that google gave me when I was re-reading my post on the death of capitalism was on Socialism vs Communism.   I find it entertaining because the difference is simple.  Socialism is communism with sugar on top.  Its like argueing if its better to be stuck in the water with a bunch of tiger sharks or great white sharks. 

    In socialism the incrediably rich don’t have to change their name.  In communism they have register as part of the communist party.  Anyone not part of the super rich get screwed in either system.  Socialism will legislate the small guy out of business while communism just take it.

    And remember all big corporations started as small business.


  • The death of capitalism

    I think that what will eventually kill capitalism is these moron CEOs.  Capitalism depends on that the people who are rewarded, are also to take the risk.  But the latest issues with these CEOs who have golden parachutes have thrown the whole system to the wolves.

     I have no problem with the money they were paid per se, what I have a problem with is the amount of money they made with little to no risk.  They screwup and are forced to resign, the company is in ruins and they walk away with a multi-million dollar severance package.  That’s like walking into your neightbors house and throwing your feces on the wall and charging them for painting their house.

     This type of compensation for failure just pisses a lot of people who then vote in a socialist who say that they will take care of everything and tax the rich.  PS taxing the rich never really works.  They tax them which just trickles down to the person who put the socialist in office to begin with.  Which in turn brings more taxes on you etc….  I have whole posts on this crap.

     I would love for these guys to be hung out to dry.  Lets be honest most of these guys are not that smart anyway.  They really do not have some grand talent that makes them really deserve this kind of money. Then again they are not that stupid either they were able to set themselves up in such a way that if they succeed they make money and if they fail they make money and get a vacation.  I guess in the end they are smarter then I am.

     How to solve the problem?  I don’t know.  But rewards for failure should not be part of it.  I think the top salary should be limited.  I know it sounds socialist but the guaranteed pay should be limited.  Everything else should be bonuses.  With something nominal for becoming disabled or whatever, but the principle is simple.  Do good get stuff, do bad don’t get stuff.

     There should also be rewards for post retirement kind of like a five year bonus plan.  One bonus for yearly achievement and then more bonuses for two, three, four, and five year achievement.  This way short term actions that kill the company long run will not be undertaken.  It could be a dividend based system or some other method. 

     Think about it this way.  You go into your neighbor’s house (your neighbor had some bad luck).  You promise to make your neighbor more money this year then your neighbor made last year. They agree (we are going to pretend they really don’t know you too well).  Afterwards you sell everything they have including the house.  Take your 50% cut and leave them with the shirts on their back.  You on the other hand get to walk away with your 50% cut. At the end of the year they have more money but the next year does not seem too good for them.

     The only real punishment for these crooks is to empty their bank accounts and sell their assets.  Then force them to live off a janitor’s salary for 5 years with no-contact of their former business associates.  Then again their business associates are the same people giving out the punishment so fat chance there (Politicians are cheap). 

       



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