Monthly Archives: February 2009

atlas shrugged – it never really goes away, does it?

I just read in the Economist that sales of Ayn Rand’s classic, Atlas Shrugged, are spiking again – and have been since Obama’s inauguration.

Like many, I read Atlas Shrugged in college, and, like many, it completely changed my life. It’s one of those rare books that comes along and forever changes the lens through which you see the world.

The premise of the book, in brief (especially compared to the 1,000+ pages of the book), is what would happen if all of the talented, motivated achievers of the world just decided they were done being taken for granted, scorned and unappreciated and decided to all disappear. I don’t think it’s too much of a spoiler to tell that by disappear, I mean they all find a place where they can live together, free from the dependents who continually took from them with no give-back or appreciation.

No book has remained a part of me as much as this one, and I can’t recommend it strongly enough. We’re living the first half of the book right now. What I wonder is if the achievers decided to check out, where would they go? (I’m thinking California will be ripe for the taking, soon… just a thought).

Even if you don’t think you can make it through the entire book, read the first 100 pages. The opening scene on the train will strike a chord with you immediately.

her morning elegance by owen lavie

A friend of mine just sent me this video. The animation is fantastic, and the song is pretty solid, too. Thought this would be a nice way to send you on into the weekend.

Enjoy…

static versus dynamic

Life is not static, it is dynamic. Meaning, all forces are constantly reacting, changing, initiating, driving, etc. Unforeseen events and reactions are constantly occurring – making inaccurate any predictions based on the past.

Take, for example, taxation of smoking. We currently tax each pack of cigarettes sold. If some politician wants to raise revenue, they decide that if they raise taxes on cigarettes, revenue will go up that much.

Put in simple terms, if we have a $1 tax on cigarettes, and we sell 100 packs/year, we get $100 of revenue. If using a static model, which assumes everything is constant and nothing changes, a $2 tax on cigarettes will yield $200 in revenue.

Conservatism, though, understands that society is dynamic and that actions have consequences. By doubling that tax on cigarettes, it will create an even greater disincentive to smoke. Therefore, some will quit.

It will also create a greater incentive to cheat the system. Some some sales will go unreported.

This makes it possible that by doubling the tax from $1 to $2, you could actually lose revenue.

And this is why the notion of “paying for tax cuts” is a wholly inaccurate premise.

Every time we lower taxes, tax revenue goes up. How is this possible? By lowering taxes, you create incentives for people to invest in business or start their own. This sort of investment allows businesses to expand, which creates jobs.

Before you lowered taxes, you may have had 50 million working taxpayers. But after the job creation, you might now have 60 million working taxpayers. So, even though everyone is paying less, there are more people paying, and this is where your new revenue is generated.

Static calculations are almost always wrong because they don’t consider the effects of actions, nor do they predict the unpredictable.

I remember looking at Al Gore’s Inconvenient Truth book at the bookstore. It included a bookmark with three “inconvenient facts.” What made me laugh is that two of the three were facts about the future, i.e., “in the year 2030, blah blah blah.”

Well, you can’t have a “fact” from the future, because that’s not a fact, yet. It’s not a fact that there will be a tomorrow. The greater point, though, is that these “facts” were drawn from extrapolating on things happening at the time the book was written.

This is why climate models are so inaccurate. Few things in the universe are as complex as the earth’s climate. To think we have a model that considers absolutely everything is absurd.

carbon dioxide? a pollutant?

According to those who would have us believe the actions of humans are destroying the climate, carbon dioxide is a pollutant.

You know, we all exhale carbon dioxide.

If we sit close enough to one another during conversations, might we suffer the ill effects of second-hand carbon dioxide?

Evidence shows that carbon dioxide levels rise AFTER temperatures rise. But that not withstanding, if you believe, even remotely in any sort of grand design – or heck, even Darwin’s theory – what would be the grand plan, or survival purpose, of exhaling a pollutant?

Somehow, this one just doesn’t seem to fit.

regulation

It’s not uncommon to hear people talk about how deregulation was the cause of the current economic situation, or that more regulation is needed. Or maybe it’s that our regulations are out-dated.

Never do you hear anyone actually discuss or describe the specific regulations they thought disappeared or that we need.

It’s a nice buzzword, but I’d like to hear some discussion of what regulations should have existed that would have prevented all of this.

how is one worth $1,000,000

I witnessed a conversation yesterday that fascinated me.

One of the two was wondering how one can be worth $1 million when it’s the labor who produces the goods or provides the service.

More specifically, he was approaching from the premise that someone believed they were worth that much and should be payed accordingly.

The other presented this scenario: there’s a specialty retail shop on the east side of town – say a jeweler – with an excellent staff. They’re attentive, they remember the customers and are always helpful.

They are making $10/hour. Say a business owner from the west side shops there and enjoys the experience. After a few visits, he decides he would like his customer service staff to provide the same experience, so he offers the staff a job at his shop.

He offers each of them, in individual meetings, $14/hour. Two accept. One doesn’t because he doesn’t want to travel from the east side to the west every day. But the owner really wants them because of their skills and offers that last one $17/hour.

The last person accepts that offer, and all go on to work there. Another jeweler from out-of-town shops there one day and meets one of the two making $14/hour. They are so impressed, that they want to hire them and have them move to a new state to work there. He offers $22/hour to do this.

This can do on and on, but the point was that these people didn’t just decide they were worth that much. The market decided it because someone was willing to pay it. And they proved, with their skill and talent (which I realize isn’t always the case when one gets promoted – but even that is the market at work), that they were worth more than their original wage.

Go back to the person making $1 million/year. He didn’t just decide he was worth that, although I’m sure he had some idea of what he should get paid based on his degree, experience, the market, etc.

What made him worth $1 million/year is that there was a company who valued his vision, intelligence, experience or whatever so much that they were willing to pay that.

So what happens when the government caps pay in any industry? Those who can make more – usually the more talented – will go somewhere else to make it. This will leave the banks with less-talented people trying to dig them out of a very rough and dynamic situation.

Sounds like a self-fulfilling prophecy of failure, to me. This is why the free market is best able to determine and solve problems like the one’s we’re experiencing right now.

When the government determines pricing, it introduces a virus into an otherwise healthy system, and unintended, negative consequences almost always results.

flight of the conchords on itunes

fotc60s

For you Flight of the Conchords fans out there, I just discovered that after every week’s new episode on HBO, they’re releasing the signature song from that episode on iTunes.

So, if you head over to iTunes now, you can purchase six of their new songs from the current season.

Unfortunately, they’re only releasing one song per episode, so you won’t get this one until the album comes out in the next month or so.

And if you’ve never heard them before, this is my favorite track, and video, from all of their work…

Or this one…