Video Response to TEDTalk by Niall Ferguson on The 6 Killer Apps of Prosperity

To listen and view the talk I'm discussing you can view it here.

 

The 6 killer apps are: 

1.) Competition

2.) Technological Innovation

3.) Property Rights

4.) Modern Medicine 

5.) Consumerism

6.) Work Ethic

Niall compares East and West nations and their implementation of these values or "apps" and the results that follow. 

I appreciate the thought behind this but end up ranting about social injustices these often create. Does the use of these 6 killer apps result in a zero sum game? i.e. The success of one nation means the determent of another. If a nation becomes wealthy, does that mean the individuals are wealthy? So what is wealth? Adam Smith said its not money but the exchange of goods and services to meet the needs and wants of the people. 

If all of our needs are met then what is left? Our wants. Marketing fuels our wants and turns them into "needs" which helps drive economic growth through the exchange of more products and services. Is this necessary though for society to function? And, more importantly is this a good idea? Scarcity drives prices and we aren't short of people or wants but natural resources are scarce. 

Are patent laws and intellectual property rights limiting economic growth? If innovation and the creation of spreading ideas, goods and services fuels true wealth creation how do our laws assist in this?  Is there a point in which our need for jobs to supply exchanging of goods and services is greater than our ability to create new ideas? Are great nations of wealth built on the backs of the poor. Does it have to be this way? Are we focusing more on building wealth by just creating jobs or are we pushing forward to a better tomorrow? As great as these values may be could they truly be "killers" in the long run? 

Video Response to Freakonomics podcast on "The Folly of Prediction"

To listen to the podcast I'm discussing you can download the mp3 here.

My thoughts on Freakonomics podcast on The Folly of Predictions. Television, the markets, intellectuals, so called "experts" are incentivized to make wild predictions. No one holds people accountable for when they are wrong. If you'll listen closely they'll use words like "may" or "could" or "should" as a defense from being held liable (as if they would be held liable).

Economists argue things like futures markets are good because it forces people to put their money where their mouth is. They say this controls speculation but that seems hard to believe when we see how volatile oil futures are. If you feel confident enough you can even put your knowledge and best guesses to the test by betting i.e. "investing" on a whole range of topics on InTrade. They also suggested policies or ways to track the accuracy of people's predictions might help.

Video Response to Common Sense with Dan Carlin's "Looking for a Left Hook" podcast

To listen to the podcast I'm discussing you can download the mp3 here.

My thoughts on Dan Carlin's Common Sense podcast on bringing back jobs to the US. Why is it we allow American corporations to off shore labor under conditions we would never allow here in the US? Because we don't like "those" jobs and we like cheap stuff. Ending trade agreements would certainly bring back jobs but would "cheaper" jobs raise income in the middle class? Where have all the "good" jobs gone?

How does a non-tangible asset bubble burst?

The ERI Economic Research Institute, Inc. released this past years largest salary increases by profession. We all know that health care is expensive and is continuing to be more so but is it any wonder why when of the top 20 largest increases 70% of them (14) relate to the medical profession? Not so surprising 3 others relate to academics (fortunately 1 was a non-magement role). I can understand these increases in the medical field to a degree since they are concerned the new health care bill will eventually cap their salaries at some point (much like how insurance companies are franticlly trying to raise premiums). If the caps do hold (which they never do) then I guess it wouldn't be so bad but its unfortunate that we narrowly focus only on the money instead of the reasons why costs are so high. Sure doctors are highly educated and are worthy of their wages but many regulations exist that force up healthcare costs. Release the AMA and other governing bodies abality to control how many doctors are allowed into the field, end the war on drugs and drasticlly drop the price of drugs and peoples need to get a perscription are just two examples of how the government could restore freedom and lower costs and flip side is people will then have to be resposible of their new found freedom(s).

The Economic Collapse in Easy to Understand Language

Jon Stewart explains the reason for the economic collapse and what Sen. Dodd is trying to do to prevent it in the future (good luck with that).

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
In Dodd We Trust
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The Story of Stuff

There is a movie that is making headlines on the interwebs on a topic that is becoming more popular. If you haven't seen it yet it's called "The Story of Stuff." Here it is in case you are interested:

In my opinion the author makes a good presentation on a very important topic but the video would be more effective if not politicized and was backed by sources. While although it never references a political ideology specifically the resulting conclusion is capitalism via corporatism is evil and socialism by means of equitable distribution of resources (including labor) is the answer.

I fully agree though that we must develop a sustainable framework but we must do so while limiting infringement on personal liberties. What would such a framework look like? The author suggests community farming, zero waste initiatives, and overall environmentalism and consumer reduction but this neglects a glaring problem, our need for jobs. The real question is what can we do to replace the jobs?  That is where you will find that we already live under a socialized society. You need only look to our monetary system to see it. My question then is "was this planned and if so why does it suck so bad?". My answer I'm willing to bet is through conflict of interests and greed by political leaders and wealthy individuals we got a half baked system that is unsustainable and unchangeable. 

The System

So banks are back to their old ways again but I have to wonder, is this really a surprise to anyone? It always irks me when news report headlines like "results were more or less than analysts expected" or something along the lines about how "results weren't as expected." Why it irks me is I do believe we have a bunch of really intelligent people in charge of things but the media dumbs things down to a few talking points which results in a horde of ill-informed strongly opinionated drones to do the bidding of the leaders they appointed. How backwards is that!

If you'll step back with me and take a view from 30,000 ft you'll see things much different in regards to our current economic mess.  Many easily jump to short term solutions but lets look at our economic system. People often wonder "why are we having a recession?" The talking points (depending on your source) are: greedy bankers, incompetent government forcing bad policies on banks, and greedy individuals buying more than they can afford. All these may be true but is their an underlying system that supports such activities?

I feel there is. Our economic system is designed to be a risk-taking environment that encourages greed. Many cry this is why socialism is necessary but I'll save that for another topic. I want to focus on the US economic system. The US has to keep growing or else it collapses. There can be no stagnation. Since we are a debt economy if we stagnate just for a little, loans start to default. It doesn't matter if the loans will get a return or not in the long run. The point is to get the money circulating again as quickly as possible which is why the FED pump so much money into banks and then expects them to loan it out. The FED criticizes banks for making "bad" loans but in order for the economy to grow, loans have to be made, period. So the FED also criticizes banks for not making loans because the FED gets heat from the politicians because everyone is losing jobs and income. In order to succeed in this system you take "risks" by getting a loan and doing something with it. It doesn't really matter what because if there is enough money in the economy someone is going to buy whatever it is you are selling for whatever price they can afford.

What we are experiencing in our generation is an adjustment in the markets due to the limitations of natural resources. We have an unlimited supply of money and an unlimited supply of labor, and the last ingredient for a market to work is resources which unfortunately we can't artificially create. What has been good for a time has now set us on a course of unsustainable growth. Fiat currency enables rapid growth and corporations provide for a more efficient means of collecting money for wide spread market penetration and possible research and development. All good things but the consequences are amoral entities that damage our environment and treat humans as if they are pieces in a machine. For deeper thoughts: going back to the gold standard and the idea of ending corporations would certainly set us on a sustainable growth path and reduce moral hazard since someone is forced to be held accountable for the actions of a private business. Unfortunately, such a dramatic shift in the economy would wipe out a vast majority of those currently employed resulting ultimately in the collapse of society. There has to be some way to transition from our current system to another slowly or else we will experience an ever greater deterioration of living standards or greater imbalance of living standards (depending on which country you live in).

We need much more thought into our global economic direction to avoid further wars which will ultimately result as resources dwindle or as economic disparity increases and resentment builds. The likely outcome as the world "flattens" is everyone becomes more "equal" unfortunately that means equally poor. You see, everything is tied together in a way. I hope you see it too. I wonder how many of our leaders see it? I have a feeling many do and those that do can (and probably do) exploit it to their benefit while maybe a few are simply pawns used by those who do understand the system. Now, the only real question left is can you change the system without becoming a part of it?

Those Who Don't Learn History Are Doomed to Repeat It

"We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty or profusion and servitude. If we run into such debt, as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our calling and our creeds...[we will] have no time to think, no means of calling our miss-managers to account but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers... And this is the tendency of all human governments. A departure from principle in one instance becomes a precedent for [another]... till the bulk of society is reduced to be mere automatons of misery... And the fore-horse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression." -Thomas Jefferson (see full quote and context here). See modern context here.

It's Offical, America is no longer American

Today Anheuser-Bush sold out to Belgian brewer InBev taking the last American beer giant down. It's just a matter of time before the smaller ones get picked off. The day Samuel Adams sales out will be the day the antichrist returns.

Did You Know? (DYK): Miller is owned by SABMiller based out of South Africa. Coors is owned by Molson Coors Brewing Company based out of Canada.

Wachovia better not sell out

Rumors are Wachovia the 4th largest bank and my bank of choice is looking to sell out. If true, then the housing market has hit even this great giant. I really hope this doesn't come true because AmSouth and Regions was a good example that banks shouldn't merge. I left Regions shortly after their merger and I'm so glad I did. It was like they had chimps managing their IT departments and do you want chimps playing with your money? I didn't think so. Maybe they wouldn't have had so many problems if they hired my company? :-)

UPDATE (7/22): It just keeps getting worse for Wachovia. Looks like the rumors might soon become realty. I'm still hoping they can hold on as I really don't want to change banks again.

UPDATE (9/29): Oh well. I'm just glad they didn't go belly up. Hopefully the integration won't be too painful.

Why Blog?

Wow. My first entry on my blog. I've been keeping a personal hand written journal for years but have never gotten around to posting stuff on a blog. The reason being, I could not see the use but now that I've embraced web 2.0 I understand why this means of communication is so great. Over my years of surfing the web I've come to find myself reading other people's blogs more than the main stream websites. Mainly because people post stuff that you won't find on the big websites. Microsoft is a good example. As great of a software company as they are everyone will agree that their understanding of users is pretty pathetic. When I upgraded to Office 2007 I wanted to keep 2003 but despite Microsoft's attempt to make it easy there was/is several bugs that users have had to suffer through. Luckily a guy who worked at Microsoft had a personal blog devoted to helping users make the switch.

As an IT guy, political enthusiast (thanks to Ron Paul), economic theorist (thanks to Adam Smith), and religious/philosophical/theologian fan (thanks to many but mostly to John Piper & Ravi Zacharias) I hope to share my thoughts and findings with the rest of the world.