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Tag Archives: 1% Versus 99%

An Essential Rule For Not Being A Fool

Engineers know that measured data points require context to be meaningful. For example, the total miles that a car can travel on a tank of fuel is not economically useful knowledge, unless you also know how many gallons of fuel the tank holds, and the cost of the fuel per gallon. If you know all this, you get a meaningful metric: miles traveled per dollar spent. In addition, there can be supplementary but important considerations such as safety, pollution, styling, and reliability. Therefore, to properly evaluate economic alternatives, all important factors must be converted to a baseline of total benefits per dollar.

GOOD DATA = BENEFITS per $ SPENT

FOOL’S DATA = $ SPENT

Here are some examples of meaningless data that are commonly used to try to fool people:

Dollars spent per pupil. (The important metric is how much a student learns per dollar spent.)

“On Sale” dollars spent for a car, lipstick, sports equipment, or any consumer purchase. (The important question to ask is, “What benefit will I get from spending the dollars?” rather than concluding, “Wow, the on-sale price is much less than the normal price therefore it must be a good deal.”)

Benefits of taxing the rich 1% on behalf of the 99%: (This example is a case where both benefits and dollars spent (extracted from the rich) are difficult to properly define and determine. For example, how do you define “rich”? Is this a person or a corporation? How much money = rich? Is that earned income, or investment income, or total assets, or a combination? And should everyone who is in the 1% group be taxed more? Why not 2% or 1/2% or some other %? Also, since rich people often become poor, and the poor often become rich, how long does one have to be rich before you would say they are truly rich? Or what about someone who invents something that benefits society? What about someone who’s been poor and wins the lottery? How about an athlete who’s paid a lot of money for their physical talent? Even assuming you can arrive at a rational and moral definition for “rich 1%,” the proper question becomes: what benefits are obtained for every dollar extracted from those folks? This is a complex question not easily answered by the simplistic 1% versus 99% “fool’s chatter” that one typically hears.)

Government dollars “invested” in green energy (or education, or bridges, or whatever). (The important metric is the benefit provided per taxpayer dollar spent, where the benefit to all of the taxpayers is honestly defined and measured.)

AN ESSENTIAL RULE FOR NOT BEING A FOOL:

Don’t Make Decisions or Listen to Arguments Based Only On $ Spent

A useful corollary to the above is: don’t make decisions or listen to arguments where benefits and expenditures are not clearly defined, or are distorted by appeals to envy or other emotions.

-Ed Walker

 

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Are Vitamins Useless?; Is US Health Care The Best?; Is The US Becoming A Police State?; Should Our Fellow Citizens Be Our Slaves?

ET’s END OF YEAR BITS and PIECES

Study Stating Vitamins Are Useless An Example Of Junk Science

Reports on the Iowa Women’s Health Study (e.g., “Multivitamins no fountain of youth for women,” 10 Oct 2011, Reuters) hit the major media outlets recently, trumpeting the study’s claim that vitamin supplements are useless, or even harmful. Based on the numerous problems with the study (e.g., “Findings from Flawed Study Used To Discredit Multivitamin/Mineral Supplements,” Life Extension), it should be ignored.

US Health Care The Best In The World? Hardly

As mentioned often in ET, proper economic evaluations require the use of ratios; i.e. what you get for each dollar you spend. To evaluate health care, for example, one metric would be: how long do you live for each dollar spent for health care services? In the US, the answer is not good. “The U.S. healthcare system is more effective at delivering high costs than quality care than other developed nations.” (Ref. “What’s killing America? U.S. ranks 28th in life expectancy (lower than Chile and Greece) while it pays the MOST for health care,” 24 Nov 2011, Daily Mail Online.)

Is The US Becoming A Totalitarian State? The Signs Are Ominous

See “Government Forces Private Citizens to Pour Bleach on Home-Grown Organic Food.”

Atlas Shrugs: The Consequence Of Trying To Make “The Rich” Our Slaves

Engineers spend a lot of effort in designing reliable control systems for autos, aircraft, telecommunication centers, etc. One of the hallmarks of a good design is that it can’t “leak”; i.e. there are no sneak paths which can prevent the control from achieving the desired system response.

When humans try to control the behavior of their fellow humans, however, they often forget that–unlike machines–humans object to being controlled, and will find a way to “leak” around the controllers.

For example, there’s a lot of talk these days about “the rich” paying their “fair share” of taxes to support government services (also see “More Thoughts On Forcing The Rich To Pay ‘Their Fair Share’“). Regardless of your personal beliefs in whether or not those sneaky rich folks are pulling a fast one on the rest of us, it would appear that our government can force them to pay up (by threats of fines or imprisonment), except for one thing: they can leave.

And they are, in droves. But they’re not just the bling-laden cigar-smoking jet setters and corporate titans that you or I typically think of as rich. No, this little-reported but major exodus is composed of a lot of middle-class folks like you and me, who are simply fed up. As stated by a reader in Sovereign Digest #44 (a newsletter of The Sovereign Society):

“My wife and I have already voted with our feet. We moved to South America in May. We do not like the way our country is headed at all by the politicians — Since I have it so good here in a beautiful country filled with kind loving people, and I live for 65% less than in the States — why would I want to go back? Also, as one over the age of 65 I am treated with great respect and dignity here … PLUS, they reimburse me for the 12% national tax every month since I am a senior citizen — Also, my medical care here is just as good, if not better, than in the States for up to 80% less – and I can be seen almost immediately.

“Why would I even consider going back? I’ve been screwed enough by my government, and I was smart enough to get out!!! I worked hard for my money, put my kids through college, played by all the rules, saved my money – and now they want to take that away and give it to people who just expect to live off me and others. No way!!”

The Big Gorilla is the fact, like it or not, that people want to decide for themselves how best to spend their own money. They may be compassionate and caring people, or they may be self-centered and selfish. It doesn’t matter. If we try to make them our slaves they can simply leave, taking their talent, money, investments, and jobs with them.

Corollary:

A Society That Forces Some Of Its Citizens To Support The Rest Of Its Citizens Will Eventually Result In Either (a) A Totalitarian Society, or (b) A Poor Society

-Ed Walker

 

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