From our Muslim Agent in the Field.
My points, minor and succinct, are thus:
1. "Would drive people to almost get married before having children!"
2. "Would drive people to almost consider (GASP) STAYING AT HOME TO RAISE THE CHIILLLLLDREEEEENNNN!"
3. Notice everything was in percentages of "single mother income" implying the father is not around as well as there should be a government subsidy. Minimalism, gentlemen. Minimalism. Make as little as you can so you are paying nothing in taxes to support other people's mistakes ...errr ..."children."
Friday, August 31, 2012
Before You Major in Finance...
A lot of readers (and people in general) really like economics and finance. They find it intellectually engaging and intriguing. And they should because it is.
Just don't major in it.
I say this because I majored in it and, though, you would think it is a practical degree with mathematical aptitude, the entire industry is a cronyistic, nepotistic, brown-nosing mess that puts a premium on connections over mathematical genius.
And as an aside, yes, there will be a consequence to such a vital component of the US economy being corrupted. Namely, the confiscation/eradication of your precious 401k.
But, again, to quote Michael Savage,
"You don't want to hear about that. No, no, you much rather hear about some guy hitting a ball over a fence."
Just don't major in it.
I say this because I majored in it and, though, you would think it is a practical degree with mathematical aptitude, the entire industry is a cronyistic, nepotistic, brown-nosing mess that puts a premium on connections over mathematical genius.
And as an aside, yes, there will be a consequence to such a vital component of the US economy being corrupted. Namely, the confiscation/eradication of your precious 401k.
But, again, to quote Michael Savage,
"You don't want to hear about that. No, no, you much rather hear about some guy hitting a ball over a fence."
Day 84: Fiscal Policy and the Budget
These tools are:
- Government spending
- Taxation
- Borrowing
Every government specifies how they will make use of these tools in the budget. So - the budget will reflect a government's policy in terms of what types of results they wish to achieve and how they will practically do that. The main points that are given attention within the budget are government spending and taxation. For instance, the government will specify how much funds will be available for education, for healthcare, for military training, etc. - as well as what types of products will be taxed, by how much and how incomes will be taxed. Looking at a government's budget will give you an idea of what the government deems to be important and what not. The budget is in essence a plan in terms of how the government wishes to regulate the demand and supply for goods and services in the economy.
We have already discussed monetary policy extensively in previous blog-posts. The budget and all the tools a government has available are referred to as 'fiscal policy' ('fiscal' comes from the word 'fiscus', which is what the public treasury was called in ancient Rome). Monetary policy - as carried out by the central bank - and fiscal policy are attempted to be carried out in harmony to prevent the one policy from counteracting the other one.
In this blog-post we'll introduce you to the 'general idea' of how governments utilise the tools of government spending, taxation and borrowing - after which we'll discuss each point individually.
What will a government generally do when the economy is in a recession?
Firstly - what is a 'recession'? Recession is when the economy is doing 'bad'. Compare the economy to the human body - where exchanges take place, blood flows, organs interact with each other and each cell has certain requirements in terms of the sustenance that it requires in order to function properly. A recession is when the economy is 'ill' - where fluids don't move through the body effectively and resources/sustenance are not reaching the participating cells in an effective way. Signs of a recession are a fall in income, total production, investment spending, business profits and inflation - and a rise in unemployment and bankruptcy.
So - with the understanding of the word 'recession', we ask the same question again: What will a government generally do when the economy is in a recession?
When in a recession, the government will pursue 'expansionary' fiscal policies so as to stimulate economic activity. 'Expansionary fiscal policy' can be translated into: an increase in government spending and a reduction in taxes. Increasing government spending and reducing taxes are both policies to increase the money supply - eg: increase the amount of money in circulation in the economy.
When applying expansionary fiscal policy, a budget deficit is usually created - because governments increase what they spend, and decrease what they earn. The difference between what is spent and what is earned (the difference between what goes out in the form of government spending and what comes in in the form of taxes) is called the 'budget deficit'.
The opposite can also occur - when an economy, instead of being in a recession, is expanding too quickly. In those cases, all prices will rise (inflation) and industries in other countries will become more competitive in comparision, leading to balance of payment problems (where more money leaves the country than comes into the country). In such a situation, the government will attempt to pursue 'restrictive' or 'contractionary' fiscal policy. This can be translated into: a reduction in government spending and a raise in taxes. The idea here is to withdraw money out of circulation.
This all sounds really neat and simple - but in practicality, it's not that clear-cut. The problem is that there is usually quite a big delay between what happens in the economy (for instance a recession) and the response of the government (for isntance expansionary policy). Sometimes - by the time the government is aware of the recession and starts implementing expansionary policies, the economy may have already started expanding by itself and the governments' measures are pointless, or even make matters worse.
Health Insurance Idiocy
So I'm qualified for COBRA health insurance. I get the letter in the mail and for the low low price of $500/month I can have health insurance. This special rate is available to me for the next 2 years.
I have a question.
Since my catastrophic plan was only $120/month before I was employed, why on god's green Earth would I go with COBRA?
Seriously, I think if people just refused jacked up health insurance "offered" by their employers and said, "you know, just give me the cash instead," and then shopped around for catastrophic plans your little health insurance problem would go away.
But no, oh no. Nothing's "too good" for our little children. We need to flood the market with trillions of dollars to price everybody else out.
I have a question.
Since my catastrophic plan was only $120/month before I was employed, why on god's green Earth would I go with COBRA?
Seriously, I think if people just refused jacked up health insurance "offered" by their employers and said, "you know, just give me the cash instead," and then shopped around for catastrophic plans your little health insurance problem would go away.
But no, oh no. Nothing's "too good" for our little children. We need to flood the market with trillions of dollars to price everybody else out.
The Economics of "Wyoming Hustle"
Several people have asked if I'm moving back to the city and, yes, I am. But allow me to share with you an economic epiphany I developed that was 100% caused by and derived from my experiences here in Wyoming and is 100% the reason I'm moving back-
The Economics of Hustle.
Now I know you people love nothing more than to point out that the epiphanies the Captain has had in the past were already observed and noted by long-dead ancient philosophers and economists. However, "hustle" has NEVER been observed before nor incorporated into economics. So finally at last, your Captain has an epiphany he can claim is all his own. But more importantly I do believe there is some economic merit to "hustle" and may even write thesis about it if I ever get my doctorate.
First, let me start off by stating something that is going to seem insulting, but I NEED YOU TO LISTEN TO ME CLEARLY to realize that is not my intent. And that "something" is the people of Wyoming are by far the dumbest group of people I've ever met. Again, I do not say that to be insulting or to raise the ire of Wyomingites or to use the term "dumbest" as a pejorative. Nor do I say it to make it sound like I'm some arrogant "east coast liberal" that views the center of the country as "fly over states." I say it because that has been my honest observation after living and interacting with the people there for a year. Never have I met an entire population that was so dumb, slow, oblivious and uninteresting.
Were there smart people?
Oh, sure.
Were there intelligent and interesting people?
Of course.
Did I make some friends?
Sure.
But as a whole Wyoming has BY FAR the dumbest population I've ever experienced.
Now, most people don't think about this because they don't observe it from the outside or put themselves into completely different cultures, but you simply cannot escape humans. Humans and humanity permeate every aspect of life. Every interaction you have involves a human. From conducting commerce, to working, to socializing, there are humans everywhere. They are inescapable. So when THE ENTIRE SOCIETY is literally about 10 IQ points shy of the average, it not only shows, but you get to pay a psychologically tormenting price as you live in that society.
For example a "normal" sandwich artist at a Subway can knock out a sub in about 1 minute. But it takes about 5 minutes for the average Wyomingite sandwich artist to put together your sub WITH the tripling of the chance they goofed up your order. It got so bad your Captain would actually prefer to COOK HIS OWN FOOD than go to a Subway. It was just not worth the hassle and blood pressure.
Speaking of blood pressure, go to the grocery store and you can observe, quite clearly the costs of this lower-IQ society. Almost like witnessing the forming of a perfect storm, the variables for an insufferably and unnecessarily long wait in line start to conspire and collide. Idiots who are in line, but not done shopping, darting out of line to get more food. A 38 year old man PAYING BY CHECK. Tilly decides to converse with the check out lady for 3 hours. Poor staff management as it becomes obvious the check out clerk should have called for back up or opened a new lane 20 minutes ago. And this is the LUXURY grocer. You want to slum it, go to the local Wal-Mart in Wyoming. That IS where the "people of Wal-Mart" are photographed.
Another example is banking. You ever hear of a "truck equity loan?"
Of course you haven't. Because you're not a moron and would never imagine somebody so stupid enough to "take money out of his truck" let alone a bank stupid enough to agree to such a thing. But truck equity loans are just part of "the Wyomin' Way." Along with 8 pieces of collateral for one loan (true story), $300,000 loans on a car wash in the middle of the state (ie-nowhere), and people late 36 times on their loans (but we'll never repossess on them).
Do you like teenage, single moms? They got plenty! And you get to pay plenty too when they go to the WIC office. This did vary by town, but it seemed if you were in any of the larger towns of Wyoming (bar Cheyenne) then there was a commensurate increase in the chances you were mandated to have children before graduating from high school.
But forget fornication, let's just talk about socializing. If you are a guy and merely want to hang out with girls on a platonic basis (for say like hiking, motorcycle rides or ballroom dancing), forget it. The fine, upstanding, and infinitely secure men of Wyoming will have none of it. They really do view women as property there. One gal that was kind enough to help me move, I offered a motorcycle ride. We couldn't drive on main street as she was afraid her boyfriend would see her. Dance classes I offered were populated with women who only showed up once until their husbands forbade it OR would show up as a chaperone. NOT TO DANCE, but to watch and make sure she didn't start having an affair with some stranger right there on the floor in front of everybody. I was threatened twice by men for "talkin' to their women" when both men were declared ex's. And a 68 year old grandpa gave me a mean look and said "No" when I asked his 65 year old wife to foxtrot.
And finally, let's not forget health. YOu have some of the world's greatest mountains and terrain. Hundreds, if not thousands of miles of trails to go hiking on. What's the number one physical activity in Wyoming?
Drinking.
"Wha!? The mountinnnnnz? Wha we hiked dat back in hiiiiskool. What we want to hike dem mountains fer?"
They take the insane beauty and nature for granted and never avail themselves of mountains that are only 15 minutes away.
Now I could go on and on, but you get the idea. The population is slow. It is not terribly intelligent. Alcoholism is the new power-walking. ie- there is 0% hustle in this state. Presumably then, with these things going against it, the economy would stink. Unemployment should be high. Government dependency should be high. GDP growth should be low.
Turns out its the opposite.
Wyoming has a much lower unemployment rate than the rest of the nation. 4.6% vs. 8.2%. It's gross state product has grown faster than the US average. AND it is ranked 48th I believe in government dependency. It is an economic success.
So what factors are overcoming this lack of hustle and this intellectual handicap?
Two simple factors - energy and low taxes.
Wyoming has no state income taxes and thusly people do move to the state, incorporate there, etc. Also, Wyoming is enjoying an energy boom. An interesting observation I had while living in Casper is you could tell the years the economy boomed and busted based on the architecture in the town. There was the founding of the town (1870's or so type of western mainstreet architecture) and a notable influence of ugly, brown 1970's early 80's architecture (another energy boom). Today the entire east side of Casper is all new construction attributable to the energy boom today.
Now if it seems like I'm rambling, I'm not because I'm trying to combine several points here at the same time. So let me point out another state and hopefully you'll see the lesson I'm trying to make about hustle.
Compare the "hustle factor" of Wyoming to say California or New York.
Whereas there is literally no hustle in Wyoming, New York City or LA is nothing but hustle. Spend one week in Casper, WY and then move to New York City and you'll get whiplash at the acceleration in the pace of life. People are on a mission in the city. They got to get stuff done. No, don't bother me now, I don't have the time. TALK IN THE CHECK OUT LANES??? Are you kidding me? New Yorkers would beat you in the alley.
There is no doubt the people of New York, California or just any major city are faster, have more hustle, and (yes, I dare say) are more educated and intelligent (wisdom, however may be another thing).
Regardless, these states and cities have a more motivated population, a faster population, they just have more hustle.
So how are their economies doing?
We all know poorly. Both New York and California I believe still have double digit unemployment, their public finances are in the toilet. We don't need to rehash it.
So how can this be? Also, why would I shoot my own theory down about hustle? Hustle you would THINK would correlate positively with economic growth and standards of living, so why do we see the opposite occurring.
Three points.
1. The lack of economic performance by the likes of New York and California does not so much speak to the failure of hustle to translate into economic growth as much as it is a harsh condemnation of their socialist policies. I have never seen a society move as fast, as smart and as quick as New Yorkers, Chicagoans, and the west coast. Also, much as I hate California, there is no more innovative place than Silicon Valley. All that hustle and flow for naught because it's been mooted by socialist policies. On the other side of the same coin is Wyoming. A state whose people, once again, in my experience are the slowest people on the planet. No hustle, no flow, no care, no fire in the belly. But despite (what I would have previously considered) a crippling handicap, the pro-capitalist policies of low taxes and free markets overcome this to deliver very low unemployment, higher standards of living and increased economic growth.
2. Wyoming could be considered the "Votech" or "tech school" state requiring real skills and trades. While New York and California could be considered "academia" states requiring, well, no really pliable skills or trades at all. Just a sheepskin.
3. We haven't looked at economies or societies that have BOTH hustle AND pro-capitalism policies. Places like Hong Kong, Singapore, the Cayman Islands, etc. I don't have the time today, but just by recollection knowledge about these economies, they blow Pro-Capitalism/No-Hustle countries/states out of the water.
The larger point is not my hatred for Wyomingites. Nor is it my loathing of the liberal coasts. It's to merely demonstrate the power of free-market economics and capitalism and what it can overcome. We all don't need to be doctoral students in electrical engineer slaving away 80 hours a week to increase our standards of living. We just need to leave people be, let the free-market work its magic, and "even Wyomingites" can succeed. About the only thing that can stop the free market from being successful is simply replacing it with a more socialistic model.
Then again, we all knew that. Just don't try to explain that to the CCC's (a little inside joke there for the Wyomingites).
Post-post - from a reader. IQ by state. I challenge the data (not the reader of course).
The Economics of Hustle.
Now I know you people love nothing more than to point out that the epiphanies the Captain has had in the past were already observed and noted by long-dead ancient philosophers and economists. However, "hustle" has NEVER been observed before nor incorporated into economics. So finally at last, your Captain has an epiphany he can claim is all his own. But more importantly I do believe there is some economic merit to "hustle" and may even write thesis about it if I ever get my doctorate.
First, let me start off by stating something that is going to seem insulting, but I NEED YOU TO LISTEN TO ME CLEARLY to realize that is not my intent. And that "something" is the people of Wyoming are by far the dumbest group of people I've ever met. Again, I do not say that to be insulting or to raise the ire of Wyomingites or to use the term "dumbest" as a pejorative. Nor do I say it to make it sound like I'm some arrogant "east coast liberal" that views the center of the country as "fly over states." I say it because that has been my honest observation after living and interacting with the people there for a year. Never have I met an entire population that was so dumb, slow, oblivious and uninteresting.
Were there smart people?
Oh, sure.
Were there intelligent and interesting people?
Of course.
Did I make some friends?
Sure.
But as a whole Wyoming has BY FAR the dumbest population I've ever experienced.
Now, most people don't think about this because they don't observe it from the outside or put themselves into completely different cultures, but you simply cannot escape humans. Humans and humanity permeate every aspect of life. Every interaction you have involves a human. From conducting commerce, to working, to socializing, there are humans everywhere. They are inescapable. So when THE ENTIRE SOCIETY is literally about 10 IQ points shy of the average, it not only shows, but you get to pay a psychologically tormenting price as you live in that society.
For example a "normal" sandwich artist at a Subway can knock out a sub in about 1 minute. But it takes about 5 minutes for the average Wyomingite sandwich artist to put together your sub WITH the tripling of the chance they goofed up your order. It got so bad your Captain would actually prefer to COOK HIS OWN FOOD than go to a Subway. It was just not worth the hassle and blood pressure.
Speaking of blood pressure, go to the grocery store and you can observe, quite clearly the costs of this lower-IQ society. Almost like witnessing the forming of a perfect storm, the variables for an insufferably and unnecessarily long wait in line start to conspire and collide. Idiots who are in line, but not done shopping, darting out of line to get more food. A 38 year old man PAYING BY CHECK. Tilly decides to converse with the check out lady for 3 hours. Poor staff management as it becomes obvious the check out clerk should have called for back up or opened a new lane 20 minutes ago. And this is the LUXURY grocer. You want to slum it, go to the local Wal-Mart in Wyoming. That IS where the "people of Wal-Mart" are photographed.
Another example is banking. You ever hear of a "truck equity loan?"
Of course you haven't. Because you're not a moron and would never imagine somebody so stupid enough to "take money out of his truck" let alone a bank stupid enough to agree to such a thing. But truck equity loans are just part of "the Wyomin' Way." Along with 8 pieces of collateral for one loan (true story), $300,000 loans on a car wash in the middle of the state (ie-nowhere), and people late 36 times on their loans (but we'll never repossess on them).
Do you like teenage, single moms? They got plenty! And you get to pay plenty too when they go to the WIC office. This did vary by town, but it seemed if you were in any of the larger towns of Wyoming (bar Cheyenne) then there was a commensurate increase in the chances you were mandated to have children before graduating from high school.
But forget fornication, let's just talk about socializing. If you are a guy and merely want to hang out with girls on a platonic basis (for say like hiking, motorcycle rides or ballroom dancing), forget it. The fine, upstanding, and infinitely secure men of Wyoming will have none of it. They really do view women as property there. One gal that was kind enough to help me move, I offered a motorcycle ride. We couldn't drive on main street as she was afraid her boyfriend would see her. Dance classes I offered were populated with women who only showed up once until their husbands forbade it OR would show up as a chaperone. NOT TO DANCE, but to watch and make sure she didn't start having an affair with some stranger right there on the floor in front of everybody. I was threatened twice by men for "talkin' to their women" when both men were declared ex's. And a 68 year old grandpa gave me a mean look and said "No" when I asked his 65 year old wife to foxtrot.
And finally, let's not forget health. YOu have some of the world's greatest mountains and terrain. Hundreds, if not thousands of miles of trails to go hiking on. What's the number one physical activity in Wyoming?
Drinking.
"Wha!? The mountinnnnnz? Wha we hiked dat back in hiiiiskool. What we want to hike dem mountains fer?"
They take the insane beauty and nature for granted and never avail themselves of mountains that are only 15 minutes away.
Now I could go on and on, but you get the idea. The population is slow. It is not terribly intelligent. Alcoholism is the new power-walking. ie- there is 0% hustle in this state. Presumably then, with these things going against it, the economy would stink. Unemployment should be high. Government dependency should be high. GDP growth should be low.
Turns out its the opposite.
Wyoming has a much lower unemployment rate than the rest of the nation. 4.6% vs. 8.2%. It's gross state product has grown faster than the US average. AND it is ranked 48th I believe in government dependency. It is an economic success.
So what factors are overcoming this lack of hustle and this intellectual handicap?
Two simple factors - energy and low taxes.
Wyoming has no state income taxes and thusly people do move to the state, incorporate there, etc. Also, Wyoming is enjoying an energy boom. An interesting observation I had while living in Casper is you could tell the years the economy boomed and busted based on the architecture in the town. There was the founding of the town (1870's or so type of western mainstreet architecture) and a notable influence of ugly, brown 1970's early 80's architecture (another energy boom). Today the entire east side of Casper is all new construction attributable to the energy boom today.
Now if it seems like I'm rambling, I'm not because I'm trying to combine several points here at the same time. So let me point out another state and hopefully you'll see the lesson I'm trying to make about hustle.
Compare the "hustle factor" of Wyoming to say California or New York.
Whereas there is literally no hustle in Wyoming, New York City or LA is nothing but hustle. Spend one week in Casper, WY and then move to New York City and you'll get whiplash at the acceleration in the pace of life. People are on a mission in the city. They got to get stuff done. No, don't bother me now, I don't have the time. TALK IN THE CHECK OUT LANES??? Are you kidding me? New Yorkers would beat you in the alley.
There is no doubt the people of New York, California or just any major city are faster, have more hustle, and (yes, I dare say) are more educated and intelligent (wisdom, however may be another thing).
Regardless, these states and cities have a more motivated population, a faster population, they just have more hustle.
So how are their economies doing?
We all know poorly. Both New York and California I believe still have double digit unemployment, their public finances are in the toilet. We don't need to rehash it.
So how can this be? Also, why would I shoot my own theory down about hustle? Hustle you would THINK would correlate positively with economic growth and standards of living, so why do we see the opposite occurring.
Three points.
1. The lack of economic performance by the likes of New York and California does not so much speak to the failure of hustle to translate into economic growth as much as it is a harsh condemnation of their socialist policies. I have never seen a society move as fast, as smart and as quick as New Yorkers, Chicagoans, and the west coast. Also, much as I hate California, there is no more innovative place than Silicon Valley. All that hustle and flow for naught because it's been mooted by socialist policies. On the other side of the same coin is Wyoming. A state whose people, once again, in my experience are the slowest people on the planet. No hustle, no flow, no care, no fire in the belly. But despite (what I would have previously considered) a crippling handicap, the pro-capitalist policies of low taxes and free markets overcome this to deliver very low unemployment, higher standards of living and increased economic growth.
2. Wyoming could be considered the "Votech" or "tech school" state requiring real skills and trades. While New York and California could be considered "academia" states requiring, well, no really pliable skills or trades at all. Just a sheepskin.
3. We haven't looked at economies or societies that have BOTH hustle AND pro-capitalism policies. Places like Hong Kong, Singapore, the Cayman Islands, etc. I don't have the time today, but just by recollection knowledge about these economies, they blow Pro-Capitalism/No-Hustle countries/states out of the water.
The larger point is not my hatred for Wyomingites. Nor is it my loathing of the liberal coasts. It's to merely demonstrate the power of free-market economics and capitalism and what it can overcome. We all don't need to be doctoral students in electrical engineer slaving away 80 hours a week to increase our standards of living. We just need to leave people be, let the free-market work its magic, and "even Wyomingites" can succeed. About the only thing that can stop the free market from being successful is simply replacing it with a more socialistic model.
Then again, we all knew that. Just don't try to explain that to the CCC's (a little inside joke there for the Wyomingites).
Post-post - from a reader. IQ by state. I challenge the data (not the reader of course).
Thursday, August 30, 2012
God Bless Gina Rinehart
Woman after my own heart.
You poor people who like whining and complaining all the time would do well to listen to her.
That is of course, unless you like being poor your entire life.
You poor people who like whining and complaining all the time would do well to listen to her.
That is of course, unless you like being poor your entire life.
Never Trust a Public Sector/Non-Profit Economist
I had a request from a reader to dissect this.
But Vox Day does a decent enough job.
The only thing I could add to it is the ridicule of the authors of this "girlyfesto."
Did any of you idiots ever work for a living? Did any of you ever work in the private sector and have to adhere to reality and efficiency? Or did we just float on through life with daddy's credit card and enroute to a doctorate in economics and thus a cushy non-profit position in academia or Non-Profit-LaLa Land? AND with the added bonus of lecturing people who live in the real world what needs to be done.
I think we need an "Economist MMA" where nerdy skinny economists like myself duke it out physically in a ring.
Not because it would prove anything.
But because it would feel so great to pummel the ever-living-crap out of these DB's.
But Vox Day does a decent enough job.
The only thing I could add to it is the ridicule of the authors of this "girlyfesto."
Did any of you idiots ever work for a living? Did any of you ever work in the private sector and have to adhere to reality and efficiency? Or did we just float on through life with daddy's credit card and enroute to a doctorate in economics and thus a cushy non-profit position in academia or Non-Profit-LaLa Land? AND with the added bonus of lecturing people who live in the real world what needs to be done.
I think we need an "Economist MMA" where nerdy skinny economists like myself duke it out physically in a ring.
Not because it would prove anything.
But because it would feel so great to pummel the ever-living-crap out of these DB's.
Day 83: Nationalisation and Privatisation
Nationalisation
Nationalisation refers to the transfer of ownership of an industry/sector/company to the government. It then becomes publicly owned. Most 'conservative' economists have a consus that nationalisation most of the time works as a synonym for 'economic failure'. The reasons why will become clearer as we look at the point of Privatisation.
Privatisation
Privatisation refers to the opposite of nationalisation, where the transfer of ownership moves from the publict sector to the private sector.There are several points economists usually refer to in support of privatisation:
1. Selling off public enterprises to the private sector will give the government an influx of money which they can use towards financing their expenditure or any debts/deficits they may have. This way for instance, instead of using tax money, they could use this 'new money' to finance their expenditure and lower tax rates.
2. The second point refers to the well known 'government is inefficient' opinion, whereby economists always see the private sector as more efficient than the government. Accordingly, it is thought that the government should only involve in those industries where there's little to no profit involved and let the private sector handle the rest.
3. The third point refers to the idea that since government owned enterprises are inefficient, that they run losses and that these losses are an important source of budget deficits and other fiscal related issues.
4. As part of 'government inefficiency' state-owned enterprises are seen as bureaucratic, ineffective, not meeting consumer wishes and a burden to the taxpayer. Due to lack of competition they are also seen as lacking creativity, bad investment decisions, poor financial management, low levels of productivity and a lack of accountability to the public.
5. Since private enterprises are more profit motivated, they will attract foreign direct investment and consequently increase the country's foreign exchange reserves. Additionally, due to increased investment, privately owned enterpises will be more easily able to adapt to the ever rapid changing economic/business environment.
6. Since public enterprises are state-owned, they do not pay any tax. So another reason which gets put forward is that the government can increase its income throught selling off its enterprises as they than become part of the tax base.
7. The money the government receives can be used towards increased spending on hoising, education, health, transport and so on.
There are also some cons which are considered:
1. Enterprises which have been privatised are not necessarily going to find themselves in a more 'competitive' environment, and thus not become more 'efficient'
2. Publicly owned firms usually have to take into account possible external costs or benefits (since they are working with a bigger sphere than just 'the one company' that they own). Privately owned firms won't do this since their 'sphere' is quite limited.
3. Publicly owned firms will usually be more 'public' driven than 'profit' driven -- so they will for instance make sure that there are particular infrastructures in place in poor areas, even though these areas aren't "productive" in the sense that the people who live there have little money to offer. Privately owned firms would not make such 'bad business decisions' and will go where the money is. Since they are 'profit' driven instead of 'people' driven, they will work within those areas where there is money and where people can pay for their services. So either privately owned companies will 'move away' from those areas or 'up the prices' -- both which will affect those with little money in a negative way.
4. Trade unionists are generally against privatization. This is because within the whole 'government is inefficient', how the government employs people is also seen as inefficient. Privately owned enterprises want to 'squeeze the most' out of everyting and so they will try to have the least amount of people employed to do the same amount of work (as this results in higher profits since less wages need to be paid out). As such, when enterprises get privatised, one of the first things that happens is massive job cuts.
Privatization often forms part of one of the basic components of Structural Adjustment Programs. This will be further expanded on in blogs to come.
The Power of Capitalism
Though this does NOT benefit me (it actually hurts), I am happy to see this.
The PRICE OF EDUCATION DROPPING. From my e-mail.
Normally the price of these classes is around $100-$120. Apparently the internet and the free delivery of education is forcing people to lower prices.
If you love the Captain (and you do) you can always take his two classes and benefit from his Super Awesome Economic Genius!
Stocks, Bonds and Investing: Oh My!
And
The Analysis and Valuation of Stocks.
I STRONGLY recommend the latter as it is a REALLY good class culminating all my experience and schooling on fundamental analysis.
Besides, you don't want the Captain to starve, do you?
The PRICE OF EDUCATION DROPPING. From my e-mail.
Normally the price of these classes is around $100-$120. Apparently the internet and the free delivery of education is forcing people to lower prices.
If you love the Captain (and you do) you can always take his two classes and benefit from his Super Awesome Economic Genius!
Stocks, Bonds and Investing: Oh My!
And
The Analysis and Valuation of Stocks.
I STRONGLY recommend the latter as it is a REALLY good class culminating all my experience and schooling on fundamental analysis.
Besides, you don't want the Captain to starve, do you?
"It's a Post About Nothing"
Tam gets a Seinfeld post. A post about "nothing."
On a somewhat related note (on account I'm pilfering other people's posts while I drive across Wyoming, South Dakota and Minnesota to move my meager worldly possessions), if anybody Cappy Cappites live on Hwy 212, contact me. I'm pretty much guaran-freaking-teed to be driving through your town!
On a somewhat related note (on account I'm pilfering other people's posts while I drive across Wyoming, South Dakota and Minnesota to move my meager worldly possessions), if anybody Cappy Cappites live on Hwy 212, contact me. I'm pretty much guaran-freaking-teed to be driving through your town!
Wednesday, August 29, 2012
Day 82: Government Failure
In terms of government failure, let's discuss three major weaknesses of governments and how they attempt to manipulate the economy, namely:
- Politicians
- Bureaucrats
- Rent-seeking by interest groups
Politicians
Politicians are those who are elected by a population to represent their interests in government. However, in most democracies, people only get to voice what they want politicians to do on their behalf at the moment of election. After that, politicians can pretend to represent the people, but they can pretty much make decisions that suit their personal interests. Due to the desire for power and wealth, they wish to remain in their current position or progress their careers for more influential positions and do this, they need people/more people to vote for them. Therefore, politicians will have a tendency to take the limited time they are elected for to satisfy their voters in the short-term in order to 'prove' that they are the right choice - without considering long-term consequences. They'll implement programs and organise interventions that have clear benefits to particular people, of which the costs and disadvantages are vague or ignored. Another tendency is to make decisions that will give a small group a whole lot of benefit, while a large amount of people accrue relatively small costs.
Bureaucrats
Bureaucrats are not even elected by the population. They are 'civil servants' and are responsible for the supply of goods and services by the government. They, thus, have quite a lot of power and, just like politicians, often use this power to pursue personal gain. They'll attempt to maximise their salaries, power or prestige. For instance, the defense establishment often exaggerates the military threat so that a lot of money is allocated to this department and this, obviously, allows them to increase their salaries.
It is claimed that bureaucracies are often inefficient because there is no competition to keep each other in check. In terms of simply overseeing the efficiency of bureaucrats, it is claimed that this is mostly impossible and for some reason it is very difficult to fire inefficient bureaucrats.
Rent-seeking by interest groups
Due to politicians' sensitivity towards buying votes, they are easily manipulated. Interest groups will attempt to pressure/persuade/seduce governments to use their ability to intervene in economics in a way that benefits them - and these attempts are often successful.
Tuesday, August 28, 2012
Day 81: The Role of Government in the Economy
In one of the previous blogs, we explained how there's different degrees of government involvement in different economies.
The information within this blog will specifically relate to the role of government within the context of a free market system approach.
Supporters of the free market system see the private sector as way more efficient than the public sector/government because of its 'competitive nature'. So keep this in mind when reading the blog.
The role of the government within the economy is considered within four points:
- The first point is that the government should not get involved in the production of good and services lol.
- The market system / economy does however need the government in terms of providing a form of stability and certainty through laws, rules, regulation, monitoring and enforcement. These points need to be in place for firms and consumers to make contracts. Also think about for instance property and copyright laws.
- Markets do not always produce efficient outcomes, and sometimes the government requires to intervene to 'correct' the market failure (think Bailouts)
- It's generally acknowledged that markets produce relatively efficient outcomes but not equitable ones. So when society wants a higher level of equity as for instance in the form of a more equitable distribution of income -- then this requires government intervention. This is seen as a controversial topic within economics as our system is designed in a way where there is mostly always a trade-off between efficiency and equity
There are generally five ways in which the government can intervene within the economy:
- A first way is through public provision of goods and services such as infrastructure and 'national defence'. This is done through either public ownership or by public financing within the production processes of the private sector (eg subsidies). In recent years it also has become more popular for the government to hire the private sector for the provision of public goods.
- Another way in which the government can intervene is within its position as a market participant. The government is the largest employer of labour within the economy and as such it can through for instance its wage policies and other practices achieve certain objectives.
- The government can also influence the economy through its expenditure/spending. Besides influencing the economy through its spending patterns of goods and services, it can also engage in something called 'transfer payments' -- these are basically payments where the government doesn't receive anything in return. Examples are subsidies, child support grants, disability grants
- Another method is through taxation. Although taxations' primary purpose is that of government income, it can also be used to manipulate the economy (eg sin taxes on tobacco, alcohol or lower tax rates for smaller businesses). In those cases taxes function as incentives.
- As mentioned before, the government is important to the economy for a rule of law point of view. Through laws and regulations the government can also impact the economy. Here consider minimum wages, anti-tobacco laws, minimum prices, etc.)
Whilst Packing and Driving My Motorcycle Back
Greetings Cappy Cappites,
In the middle of packing and moving so send your QUALITY posts to me. To start the day we'll start with a university that has too much money.
In the middle of packing and moving so send your QUALITY posts to me. To start the day we'll start with a university that has too much money.
Monday, August 27, 2012
12 Hours of Driving
So I'm on the road executing a logistical plan than rivals the D-Day invasion (3 vehicles, a minimalist amount of stuff, transported over 800 miles, in 3 or less trips, under $800 in expenses, with one driver and a regional airport, you do the calculus, I figured it out due to my SAEG(TM)).
Regardless, at my old job I could check in every 4 minutes to see if there was a new post, approve it and then get back to looking like I was working... that or doing the problem loan report for yet another chromosome-challenged Wyoming hick we lent money to for a 4th trailer home equity loan to put his sister and daughter (same thing out here) through salon school. But don't worry, that "double wide" is going to appreciate in value. I heard they're puttin' a McDonald's nearby!
Sorry, inside humor between me and the other 4 non-retarded people in this state, 2 of which have left.
ANYWAY, back at my old job I could check in every 4 minutes and approve comments.
Well 12 hours in the middle of nowhere SoDak, not a lot of internet access. I finally pull into town, fire up the computer, magically get internet access in "these hayere parts" and BLAMO!
38 comments.
Keep spreading the word lieutenants. I appreciate it. Besides, I did some calculations and I can now officially live off of the money I make on this here pathetic blog you've all grown to love and hate.
More on that later, but it is good news.
Regardless, at my old job I could check in every 4 minutes to see if there was a new post, approve it and then get back to looking like I was working... that or doing the problem loan report for yet another chromosome-challenged Wyoming hick we lent money to for a 4th trailer home equity loan to put his sister and daughter (same thing out here) through salon school. But don't worry, that "double wide" is going to appreciate in value. I heard they're puttin' a McDonald's nearby!
Sorry, inside humor between me and the other 4 non-retarded people in this state, 2 of which have left.
ANYWAY, back at my old job I could check in every 4 minutes and approve comments.
Well 12 hours in the middle of nowhere SoDak, not a lot of internet access. I finally pull into town, fire up the computer, magically get internet access in "these hayere parts" and BLAMO!
38 comments.
Keep spreading the word lieutenants. I appreciate it. Besides, I did some calculations and I can now officially live off of the money I make on this here pathetic blog you've all grown to love and hate.
More on that later, but it is good news.
Day 80: Monetary Policy - Part 3
I commit myself to see through the charade and assist others to see through the charade of the apparent generosity of banks in trying to 'help you out' by giving you a loan - where something that doesn't belong to them is lended to you and where you, on top of that, have to pay a fee for their apparent generosity because they're taking 'such a big risk' in giving a helping hand - instead I commit myself to show how, if each puts in the effort, with many willing and committed hands, we are able to provide each one with all necessities and commodities that are required for each one to attain their fullest and most absolute expression as life.
I commit myself to design an economic system based upon life, for life - where, if a mistake is made - it is realised that it is just that: a miss-take - and that the necessary support and assistance requires to be provided for a person to learn to make more educated and informed decisions that will adequately support them and their families - where it is common sense that a person cannot be judged on missing a take, but requires to be forgiven and requires to receive another chance - so that with each miss-take, a person sees and realises the opportunity to grow and expand themselves - instead of seeing mistakes as something that must be avoided and something that causes each one to live in continuous fear - because one cannot 'afford' to make mistakes due to the mercilessness of of greed.
I commit myself to stop considering myself as an individual being that only has to think about his/her own needs - but to realise that I am part of the human race, part of this world, part of life - and as such, I am not only responsible for taking care of myself, but of taking care of my fellow human beings and all fellow life-forms that we share this Earth with - and thus I commit myself to push for a new world of equality and not stop until all beings are taken care of and provided for in a way that allows them to discover and realise their full potential as an inhabitant of this physical planet.
I commit myself to living in this physical reality and stop entertaining fiction such as thoughts, beliefs and opinions - so that I can realise what truly MATTERs and so that as I, within this realisation, take responsibility for all of the physical reality - make sure that it does not suffer under the dominion of mind-creations of personalities, opinions, self-definitions, desires and wants - but to instead focus myself and my entire beingness within the physical as the true God - who, despite continuous abuse and despite our slaughtering of its children, has never stopped supporting us, has never abandoned us and has kept on taking the hits and blows of our delusions.
I commit myself to educate people in understanding real care and real love by pointing at the Earth that is here, still waiting for us to realise that we are a part of it - and not stopping until it is entirely destroyed by human kind - and thus, I commit myself to face my fears and stop my selfish desires so taht I can assist in avoiding the disaster of the end of Earth and the destruction of our chance to manifest Heaven on Earth.
I commit myself to show people that we are not in fact waiting for God, that we are not in fact waiting for saviours to ascend us to heaven - but that we are only waiting for ourselves to leave our selfishness behind us and work together towards the creation of a real Heaven - not somewhere up in the clouds or in a different dimension - but right here on Earth - with that which is already here, already available, but waiting for us to be seen, to be realised.
Sunday, August 26, 2012
How to Shop for Groceries, Bachelor Style
I had the great misfortune of being in a Trader Joe's this weekend. The experience and my observations of the people are enough to merit their own post, but there is something much more important to write about -
How to go grocery shopping "bachelor style."
And by "bachelor style" I mean "the most efficient and correct way."
Understand BOTH men and women have no strategy or organization on how to go shopping for groceries. They merely enter, follow the way the marketeers of the grocery store have laid out your path for you, and dare you leave that path you wander aimlessly, down aisles, looking for something.
So let me help you save time and money doing things "The Bachelor Way."
First, stop it with lists. The only people that should have lists are chefs because they're making something specific and need ingredients. Even if you ARE a chef, the Bachelor Way is still most efficient. Besides, true bachelors don't do lists.
Second, get rid of the coupons. Yes, I know you save money. But you will lose that money in time nitpicking around looking for that 32 oz box instead of the 27 oz box not to mention holding up the entire US economy, double dipping us into another recession as you hold back 40% of the local labor force in your check out lane.
Third, your goal is TIME. Most specifically, efficiency. To get ALL the groceries you need in the shortest amount of time.
Fourth, employ the "Cappy Cap Method" of shopping.
This is a method or technique I developed in college when time was of the essence.
You grab a cart.
You place that cart at the end of an aisle. You RACE up one aisle, looking right and then left, grabbing everything you need in that aisle. You then U-turn into the adjacent aisle and do the same thing as you head back to your cart.
Drop all the items into your cart that you picked up in the two aisles.
Move the cart down to the next two aisles.
And repeat the process until in (what should be) 5 minutes you have covered ALL the aisles in the ENTIRE grocery store with EVERYTHING you need. (I will permit you to get a Red Bull as a treat whilst in the check out lane).
The main point of the Cappy Cap Method of shopping is NOT to bring your cart into the aisle along with the rest of the obese 50 year olds scanning each square inch of the shelving as you create a grocery store traffic jam. You cover as much ground as quickly as possible, positioning your cart at a strategic drop point which allows you to get everything you need and get out.
This has been a public service announcement from Cappy.
How to go grocery shopping "bachelor style."
And by "bachelor style" I mean "the most efficient and correct way."
Understand BOTH men and women have no strategy or organization on how to go shopping for groceries. They merely enter, follow the way the marketeers of the grocery store have laid out your path for you, and dare you leave that path you wander aimlessly, down aisles, looking for something.
So let me help you save time and money doing things "The Bachelor Way."
First, stop it with lists. The only people that should have lists are chefs because they're making something specific and need ingredients. Even if you ARE a chef, the Bachelor Way is still most efficient. Besides, true bachelors don't do lists.
Second, get rid of the coupons. Yes, I know you save money. But you will lose that money in time nitpicking around looking for that 32 oz box instead of the 27 oz box not to mention holding up the entire US economy, double dipping us into another recession as you hold back 40% of the local labor force in your check out lane.
Third, your goal is TIME. Most specifically, efficiency. To get ALL the groceries you need in the shortest amount of time.
Fourth, employ the "Cappy Cap Method" of shopping.
This is a method or technique I developed in college when time was of the essence.
You grab a cart.
You place that cart at the end of an aisle. You RACE up one aisle, looking right and then left, grabbing everything you need in that aisle. You then U-turn into the adjacent aisle and do the same thing as you head back to your cart.
Drop all the items into your cart that you picked up in the two aisles.
Move the cart down to the next two aisles.
And repeat the process until in (what should be) 5 minutes you have covered ALL the aisles in the ENTIRE grocery store with EVERYTHING you need. (I will permit you to get a Red Bull as a treat whilst in the check out lane).
The main point of the Cappy Cap Method of shopping is NOT to bring your cart into the aisle along with the rest of the obese 50 year olds scanning each square inch of the shelving as you create a grocery store traffic jam. You cover as much ground as quickly as possible, positioning your cart at a strategic drop point which allows you to get everything you need and get out.
This has been a public service announcement from Cappy.
Day 79: Monetary Policy - Part 2
I forgive myself for accepting and allowing myself to think that the story of the money supply is really as simple as it is as how it is presented in economic textbooks - while, in actual fact - money doesn't just 'get created'. Because when a loan is given and some positive number is written in a person's account - at the same time a negative number is created: as debt - and thus, even though it seems that money was created, it did not, because the debt must be paid - and the debt must be paid to those who created the money out of thin air: the banks.
I forgive myself for not accepting and allowing myself to see and realise that the apparent 'generosity' of banks in 'wanting to help you out' with buying a new house or a new car, is attached to a day of reckoning, where outstanding funds are collected and if the moneys can't be paid - the bank will take everything you own and you are left with nothing - and herein there is no mercy or generosity - only the actual reality of the situation: Greed.
I forgive myself for not accepting and allowing myself to question a world where each one apparently has the right to a decent life, but where, if one is unfortunate or has made a bad decision in life - one can end up in a situation where one's house, car and all valuable assets are taken away, becaues the bank is trying to mitigate its losses and what that means to you is really irrelevant as you are just one little player in their big money-making scheme.
I forgive myself for not accepting and allowing myself to realise the absolute abhorrence of the nature of the human race if we think it is okay and acceptable and normal that wealth and money come before each one's basic human rights - and where we don't even stop to think what it means if banks have the ability to take away people's houses just because a person doesn't have enough money - instead of realising: who the fuck cares how much money a person has - each person needs a house to live in - as a human being, it is a simple common sensical point to take care of one another and make sure each one has a fucking roof over there head - who the fuck are we if we can't even fulfil such a simple, basic point?
I forgive myself for accepting and allowing myself to define a person's worth according to the number in their bank accounts, instead of realising that a number is just that: a number - it doesn't even refer to anything real, it is just a digital picture - instead of realising the value of the person as a physical human being and treating each person as such - an equal - because we all breathe, we all shit, we all eat, we all piss - and therefore no-one can say that they are better than another from a physical stand-point - we are all the same - and therefore, any value system must consider our actual physical reality and recognise the equality of reality - instead of entertaining the inequalities of all the fictional parts that we perceive to form part of reality, such as money, opinions, thoughts, beliefs, etc. - because if our value system only considers fiction, then we disregard the physical reality - and this can be measured in fact, as we see the status of the physical world deteriorating each day, with more species going extict, with more air and water being polluted, with more land becoming unarable, with weatherconditions increasingly becoming more erratic, with natural habitats being destroyed each day.
MP3 of Interview
If you missed the interview and was interested, you can download my interview with Leslie and Silvio here.
If you are a parent or just have a kid in your life you care about about to enter college, I STRONGLY recommend they listen. "Worthless" is a book after all, if your kids were like me when I was a kid, they very much dislike reading. This is much shorter, but gets some of the key points in there.
If you are a parent or just have a kid in your life you care about about to enter college, I STRONGLY recommend they listen. "Worthless" is a book after all, if your kids were like me when I was a kid, they very much dislike reading. This is much shorter, but gets some of the key points in there.
Saturday, August 25, 2012
Boo Freaking Hoo, Eh?
From our Canadian Agent in the Field:
"Please share my pain and read and share this appalling article.
http://www.xojane.com/it-happened-to-me/it-happened-me-i-am-31-and-still-school
She contributes nothing. She creates nothing. And despite decades in school, she can't even craft a sentence above a fifth-grade level.
Notice the "action figures" on the shelf behind her head in the photo. A 31-year-old woman! And why doesn't she work? She says, in a barely-literate reply to a reader comment:
I have left school twice and only managed to get those jobs mentioned above. I have not been graced with good "business connections" merely hard work and decent grades. This doesn't always lead to lucrative careers. Furthermore, simply having a BA coupled with being a woman (in a still uneven employment market) doesn't bode well for jumping into a career after an undergraduate degree. I'd say it's starting to become the norm for people to do graduate degrees. I would love it if employers could see the value in the Humanities but sadly, this is not always the case.
"Coupled with being a woman"! I am crying with laughter. She lives in Ontario, because she mentions OSAP."
"Please share my pain and read and share this appalling article.
http://www.xojane.com/it-happened-to-me/it-happened-me-i-am-31-and-still-school
She contributes nothing. She creates nothing. And despite decades in school, she can't even craft a sentence above a fifth-grade level.
Notice the "action figures" on the shelf behind her head in the photo. A 31-year-old woman! And why doesn't she work? She says, in a barely-literate reply to a reader comment:
I have left school twice and only managed to get those jobs mentioned above. I have not been graced with good "business connections" merely hard work and decent grades. This doesn't always lead to lucrative careers. Furthermore, simply having a BA coupled with being a woman (in a still uneven employment market) doesn't bode well for jumping into a career after an undergraduate degree. I'd say it's starting to become the norm for people to do graduate degrees. I would love it if employers could see the value in the Humanities but sadly, this is not always the case.
"Coupled with being a woman"! I am crying with laughter. She lives in Ontario, because she mentions OSAP."
Day 78: Monetary Policy - Part 1
Note that there are several policies, but we limit the discussion here to the accommodation policy.
Accommodation policy
In The Demand for Money - Part 1 it was mentioned how the interest rate will influence the demand for money. If the interest rate goes up - and thus, loans become more expensive - the demand for money will go down and, in turn, the supply of money will go down as well. Why do I say that the supply of money will go down if the demand for money goes down? Because money is mostly created through loans and loans are only created when there is a demand for it. We therefore speak of a 'demand-determined money supply'.If the interest rate of individual banks has such an influence on the money supply - then what influences the interest rate? What influences the interest rate is the repo-rate.
The repo-rate
What is the repo-rate?When banks are having liquidity problems - meaning: they don't have enough cash - they will usually borrow funds from other banks on 'the interbank market'. However, if all the banks are simultaneously experiencing liquidity problems, they turn to the central bank. We say that the central bank acts as 'lender of last resort'. Borrowing from the central bank is done by means of repurchase agreements. A repurchase agreement is the sale of securities together with an agreement that the seller will buy the securities back after a specified period of time - for instance, 7 days. So, in terms of banks requiring liquidity: they will sell securities to the central bank - with the money obtained from the sale, the individual banks relieve their liquidity shortage. However, the indivudal banks must agree to repurchase those same securities from the central bank after, for instance, 7 days. You can see that repurchase agreements are in essence the same thing as a loan - where money is given to the individual banks (in exchange for securities) and the individual banks have to pay this money back after a specific amount of time (after which they also get back their securities).
Now - in the same way as individual banks charge a 'fee' for their lending services by charging interest, so does the central bank make use of the repo-rate. The repo-rate is basically the interest rate that the central bank uses. It means that the amount at which the individual banks repurchase the securities from the central bank, will be higher than the initial amount. And this higher amount is determined by the repo-rate.
So - what does the repo-rate have to do with the money supply?
Well - we're dealing with a domino-effect. If the repo-rate is high, it means that it costs a lot for individual banks to get funds.If banks are faced with higher costs, they will 'pass the cost down' to their clients, by making their interest rates higher as well. And if the interest rate is higher, the demand for money will go down, as it becomes less interesting for individuals to get a loan at a bank, knowing it will cost more to pay the loan back.
On the other hand - if the repo-rate goes down, individual banks can afford to lower their interest rate as well and will do so to become more competitive. With lower interest rates, the demand for money will go up, and thus also the supply for money, because it is more interesting to take out a loan at a low cost (low interest rate) than at a high cost (high interest rate).
So - the accommodation policy refers to the decision of the central bank to make the repo-rate higher or lower. Because - if the repo-rate changes, other interest rates will follow and if the interest rate changes, the amount of money in circulation changes.
For instance, if the central bank wishes to avoid inflation - it can raise its repo-rate, which in turn raises interest rates, which will refrain people from taking out loans and increasing the money supply to a point where all prices increase and keep on increasing.
"Networking" Cannot Replace Skills
The day will come historians and archeologists will do their research and discover "LinkedIn." They will point to it and say,
"There, THERE! Look there! We have found why the US collapsed."
So allow me to explain "networking" and why I and any intellectually honest person loathes it.
"Networking" is not a skill or a trade. It doesn't produce anything of value and ultimately, it is destructive. It is, however, the perfect "skill" for a population too lazy to learn real skills but still wants to make it look like they're working. I'll even admit right now, people with good "networking skills" and the most "LinkedIn" connections do command higher salaries, but it is a temporary phenomenon. A "linkedIn" bubble if you will, because in the end networking is nothing more than kissing ass instead of kicking ass. Talking, instead of producing. Planning, but never executing.
Because of this networking has no real economic value. All the time people spend going to "after-work socials," "conventions," and "happy hours" to hobnob, establish contacts and "network" produces nothing. The salaries, wages, not to mention money spent on booze and food are all sunk costs, with no return. If anything, networking is nothing more than an excuse to spend the company's money on booze, food, travel and other personal expenditures with the secret understanding that it's "for business" *wink wink*. But it's precisely because that's what networking is, that makes it so palatable to its participants and lodges it securely in America's business culture.
While it is at minimum unproductive or has zero economic value, I will take it a step further and contend it's actually destructive. The reason why is that is it nulls the efficiency of the labor market. Not just in terms of employing people, but what people you do business with, who you promote, who gets contracts, etc. etc. These spoils of business do not go to the best or most qualified candidate, it goes to the best networker - i.e.- the best charlatan - who is usually not only not capable as others, but is usually dishonest. Allow me to provide you an example.
I went to a wedding this summer. The guy getting married was in sales. All of his co-workers were tall, good looking younger men (23-28). All of them drove BMW's, Mercedes, and had tall drop dead gorgeous girlfriends. I overheard that the groom would not hang out with people unless they made at least $70,000 per year.
It comes time for the best man to give a speech. He gets up, and this moron is wearing sunglasses indoors. He then proceeds to deliver the typical, DB, fratboy speech that had nothing intelligent, nothing clever and nothing witty in it. Just blathering on about the good ole times and drinking and lame attempt at humor (which I'll leave out to prevent from ID'ing this guy).
He was the type of guy Stewie from Family Guy would "just have to kill." You had a natural urge to beat the crap out of him.
But this guy could outsell me in a nano-second. This guy could network beyond my wildest dreams. This guy had the Beamer and the tall girlfriend.
This guy had no problem lying his ass off.
I can't prove it, but I KNEW he was fake. I knew all those Beamers were financed to the hilt. I KNEW none of these guys owned their own home or had a positive networth (in part because I knew this was the case with the groom). But just like their girlfriends, they didn't know the difference between debt or equity spending, they just had a Beamer, went to fancy clubs, so they were "rich."
But let me ask you a question - who is more likely to be promoted to CEO in today's corporate America?
The smooth talking DB who wears sunglasses in doors and is fun?
Or is anal retentive, boring economist counterpart that insists on looking at the figures?
And now you see why networking is destructive.
Putting such an emphasis on "people skills" and "networking" only takes the focus off of what really matters, the numbers and profits. Hiring "nice" and "charming" people merely masks and hides the cold, blunt truth of the company's finances and future. Everybody likes the "fun guy," nobody likes the "party pooper." And as long as the boat isn't being rocked, everybody is happy right up until the nano-second the Titanic sinks because nobody bothered to look below decks.
Of course, not all companies are infected with this disease. There are companies that do focus on profits, want to maximize them, and increase shareholder value. But none come to mind right now. However, a limitless number of companies I know are infected with this disease. Heck, entire industries. And they account for the vast majority of companies in the US.
Again, rip apart the public sector all you want. The private sector is just as hopelessly corrupt and impaired. Thankfully, just like a person on welfare or a trophy wife spending more money than he husband makes, when the Chinese stop loaning us money, those all-star "networkers" will go the way of the dinosaur.
"There, THERE! Look there! We have found why the US collapsed."
So allow me to explain "networking" and why I and any intellectually honest person loathes it.
"Networking" is not a skill or a trade. It doesn't produce anything of value and ultimately, it is destructive. It is, however, the perfect "skill" for a population too lazy to learn real skills but still wants to make it look like they're working. I'll even admit right now, people with good "networking skills" and the most "LinkedIn" connections do command higher salaries, but it is a temporary phenomenon. A "linkedIn" bubble if you will, because in the end networking is nothing more than kissing ass instead of kicking ass. Talking, instead of producing. Planning, but never executing.
Because of this networking has no real economic value. All the time people spend going to "after-work socials," "conventions," and "happy hours" to hobnob, establish contacts and "network" produces nothing. The salaries, wages, not to mention money spent on booze and food are all sunk costs, with no return. If anything, networking is nothing more than an excuse to spend the company's money on booze, food, travel and other personal expenditures with the secret understanding that it's "for business" *wink wink*. But it's precisely because that's what networking is, that makes it so palatable to its participants and lodges it securely in America's business culture.
While it is at minimum unproductive or has zero economic value, I will take it a step further and contend it's actually destructive. The reason why is that is it nulls the efficiency of the labor market. Not just in terms of employing people, but what people you do business with, who you promote, who gets contracts, etc. etc. These spoils of business do not go to the best or most qualified candidate, it goes to the best networker - i.e.- the best charlatan - who is usually not only not capable as others, but is usually dishonest. Allow me to provide you an example.
I went to a wedding this summer. The guy getting married was in sales. All of his co-workers were tall, good looking younger men (23-28). All of them drove BMW's, Mercedes, and had tall drop dead gorgeous girlfriends. I overheard that the groom would not hang out with people unless they made at least $70,000 per year.
It comes time for the best man to give a speech. He gets up, and this moron is wearing sunglasses indoors. He then proceeds to deliver the typical, DB, fratboy speech that had nothing intelligent, nothing clever and nothing witty in it. Just blathering on about the good ole times and drinking and lame attempt at humor (which I'll leave out to prevent from ID'ing this guy).
He was the type of guy Stewie from Family Guy would "just have to kill." You had a natural urge to beat the crap out of him.
But this guy could outsell me in a nano-second. This guy could network beyond my wildest dreams. This guy had the Beamer and the tall girlfriend.
This guy had no problem lying his ass off.
I can't prove it, but I KNEW he was fake. I knew all those Beamers were financed to the hilt. I KNEW none of these guys owned their own home or had a positive networth (in part because I knew this was the case with the groom). But just like their girlfriends, they didn't know the difference between debt or equity spending, they just had a Beamer, went to fancy clubs, so they were "rich."
But let me ask you a question - who is more likely to be promoted to CEO in today's corporate America?
The smooth talking DB who wears sunglasses in doors and is fun?
Or is anal retentive, boring economist counterpart that insists on looking at the figures?
And now you see why networking is destructive.
Putting such an emphasis on "people skills" and "networking" only takes the focus off of what really matters, the numbers and profits. Hiring "nice" and "charming" people merely masks and hides the cold, blunt truth of the company's finances and future. Everybody likes the "fun guy," nobody likes the "party pooper." And as long as the boat isn't being rocked, everybody is happy right up until the nano-second the Titanic sinks because nobody bothered to look below decks.
Of course, not all companies are infected with this disease. There are companies that do focus on profits, want to maximize them, and increase shareholder value. But none come to mind right now. However, a limitless number of companies I know are infected with this disease. Heck, entire industries. And they account for the vast majority of companies in the US.
Again, rip apart the public sector all you want. The private sector is just as hopelessly corrupt and impaired. Thankfully, just like a person on welfare or a trophy wife spending more money than he husband makes, when the Chinese stop loaning us money, those all-star "networkers" will go the way of the dinosaur.
Friday, August 24, 2012
Day 77: The Demand for Money - Part 3
I commit myself to expose that Economics is not scary at all, as all it is, is a bad joke using foreign terms -- which in itself are also jokes -- as this economic system we currently live in and as, is not real -- as it values illusion over reality and is willing to sacrifice what is real as the lives of plants, animals, humans and the planet to chase an unsustainable dream
I commit myself to the development and establishment of a Down to Earth Economic System -- which deals with REAL ISSUES such as PEOPLE STARVING
I commit myself to the establishment of an Economic System which can be taught in school since it won't be a failure as it actually achieves to eliminate poverty, starvation and War -- as this is the only honourable type of economic system worth teaching as passing on to our children
I commit myself to expose that our current Economic System is a complete failure and should, just because of that, be withdrawn from being taught until we have a proper Economic System in place which we can be proud of
I commit myself to show that our current economic system only cares about humans as far as the thickness of their wallet goes and will forsaken everyone else
I commit myself to show that our current economic system is completely inadequate and that we do not have to put up with its inadequacy
I commit myself to the establishment of an Equal Money System so all may be Equal Participants within the Economy -- as it should be since the Economy affects each and everyone of us
Cast your Vote @ EqualMoney.org !
Related articles
Subscribe to:
Comments (Atom)