[OT]America. The land of the not-so-free (economy)

Fred puissante at biz.puissante.com
Sat Jan 8 10:45:01 EST 2005


On Sat, 2005-01-08 at 00:58 -0500, Derek Martin wrote:
...
> > My problem with this issue is that it's not as clear cut as either side
> > would have us believe.  Do I believe that I am better equipped to handle
> > my own money than the government is?  Yes.  Are most Linux users (an
> > above average lot in my experience, intelligence-wise)?  Yes.  But is
> > the average citizen?  No.
> 
> Yay!  It always makes me happy when someone displays that they get it.
> 
> The fact is, the average American can't be trusted to manage their
> money.  Case in point: the ever-rising credit card debt owed by
> American citizens...

Hold it right there! What is this "can't be trusted" statement? Can't be
trusted by whom? Why is it even an issue of "trust"?

That one statement is so loaded. It defines the difference between
Libertarians and Socialists. Libertarians feel that everyone should be
responsible for their decisions -- and live and die by the results.
Socialists feel that everyone "must be protected from themselves". Even
at gunpoint, which brings a supreme irony to that view. "I will protect
you from yourself, even if I have to kill you to do it!"

> The other fact is, even smart invenstors screw up -- big time.

So what?

>   Case
> in point: Donald Trump's bankruptcy.  Sure, he's a billionaire again,
> but how many of US could do what he did to recover from his mistakes?
> Well, raise your hand if you're a billionaire today.  Right.
> 
> How many people committed suicide after losing all their money in the
> financial markets during the Great Depression?

So what?

If you go about "protecting" people from themselves, they never learn
how to live. Trump was able to recover *because* he learned a valuable
lesson from having been at the top before and failing. Now, he knows not
to repeat the same mistakes again.

We all must be allowed to fail and fall flat on our faces. Only through
that do we learn to become more efficient at how we handle our affairs.

...
> > I don't really like the current situation, but as with a lot of
> > government, sometimes a bad solution in theory turns out to be in
> > practice much better (in terms of workability) than the others.
> 
> What we need is for the government to stop playing card tricks with
> people's money...  I'm not going to hold my breath waiting though.

Yes, they should return the money back to the people from whence they
stole it. Let the people deal with their own money and do their own
planning, investing, saving, etc. Let them learn from each other and
build their own base. The government's only role should be in protecting
our boarders and protecting us from each other (though it currently
carries that way too far).

> Someone rightly pointed out that the SS fund operated at  a surplus
> until congress, in all its wisdom, decided it would be a good idea to
> borrow the money from the fund.  This is just like paying off your
> credit card debt with other credit cards...

Well, to expect the fox to keep the chickens and not eat them is a
fool's dream.

> On Fri, Jan 07, 2005 at 10:12:40AM -0500, James A. Kuzdrall wrote:
> > 1. The Social Security system is insurance, not a savings account.  It 
> > spreads the risk of uncertain health and longevity over the population.
> 
> Exactly.  Only the insurance companies actuaries do a much better job
> of managing the risks (money outflow) against the premiums (money
> in-flow).  But even that's not a big deal, really.  The problem boils
> down to congress misappropriating money.  As always.

Those darn foxes.

SS is *not* an insurance; it is a welfare state program. In a real
insurance, one has the *choice* on whether or not to participate. With
SS, everyone who is a US citizen (with the exception of the Amish and
perhaps a few other groups who have fought it) is compelled to
participate whether he likes it or not.

Refuse to participate in the Social Security program, and watch what the
government will do to you, your assets, your property, etc.

"I will help you, even if I have to kill you to do it."

If there were individual choice in whether or not to participate, do you
think the powercrats would be able to get away with raiding the SS
coffers? People would simply stop participating and choose something
better!!!!!!!!

I hate being harsh here, but it is simply wishful thinking to assume it
is possible for the fox to not eat the chickens it holds captive. If the
chickens were free, fewer would be eaten by the fox.

Whenever you *compel* money out of the pockets of everyone,
accountability goes to naught. It has been true throughout all of
history; it is basic human nature. You get to wretch and complain how
bad things are, but there is little you can do about it since the pound
of flesh is extracted from everyone's hydes at gunpoint.

Money is the control point. Control that, and you control everything. A
lesson our government knows well. It's about time us citizens start
taking that to heart as well.

> > 3. Capitalism depends on growing markets or increased consumption to 
> > give an investor dividend.  What happens when the population saturates 
> > and the natural resources wane?  Might that not happen in your time?  
> 
> I had a really long, cynical, and dpressing answer for this, but I
> decided to spare you.  ;-)  In short, I think Marx was right; in the
> long run, capitalism robs the working people of their value in order
> to reassign it to the capitalist.

I would have to disagree with that. Working people are free to
participate in capitalism. They too can benefit just like the rest of
us, and I've actually seen it.

What robs *all* of us is a government that seeks collective solutions to
individual problems, for all the reasons I explained in a prior post.

> I'm not trying to be the poster boy for communism, here...  As an
> ideal, people working together to ensure the common good of all is
> hard to beat; only in practice it suffers far worse than capitalism
> from the greed and corruption of individuals.  Until we find a way to
> stifle those urges in people, communism can't work.

And just how do you "stifle these urges" in people? Drug them? Feed them
propaganda? Use gunpoint? Put their first born in escrow?

You need a system that works well with human nature *as it is*, now what
we wish it were. And so far, a system of *freedom* seems to me to be the
best option. Free people organize themselves into systems that works.
Free people can handle all the complexities and nuances that
collectivist organizations -- governments -- will miss every time. And
free people will of cours fall down and make mistakes; the difference is
they will learn from their experiences and create even better systems. 

Thus, government's role should only be in protecting the freedom of the
individuals; not in coercing them into some sort of collectivist plan
that gets it wrong for all but a few at the top of the bell curve. And
even then...

> Good post.  Thanks.  :)
> 
> On Fri, Jan 07, 2005 at 07:39:18PM -0500, Fred wrote:
> > Well, I would never criticise *individuals* on their health, of course,
> > but I will speak in generalities.
> 
> If a behavior is bad for a population, then its practice amongst the
> population is detrimental to the population.  Period.  Only the scale
> is flexible.

Your "Period." statement would seem to indicate, on your part, an
unwillingness to acknowledge that there is more to this than meets the
eye. One man's meat is another man's poison. Imposing a collective
solution on individuals will always be sub-optimal. Individual needs
differ *sharply* from collectivist "needs".

I could, for instance, insist that *everyone must* become vegetarian
because that represents the most healthy choice "for everyone". And
maybe that would be true in the abstract. But we are *individuals*; we
are not stamped out of a mold. Even our metabolisms differ. Some are
born with defects; others are born with advantages. There's a myriad of
possibilities that I alone cannot account for, and for this reason I
state that, *in general* a vegetarian diet represents the healthiest
choice. I cannot make that statement for every *individual* out there --
YMMV. So, the decision to meat or not to meat has to be made
individually.

This critical difference between the *individual* and the *population*
is always misunderstood. 

> There is an alarming trend in this country to justify bad behavior.
> Since Fred brings up diet, an example I'll use is what I will call the
> "fat is beautiful" movement.  There is no rational thought process
> that can justify this ideal.  Excess weight is bad for the individual,
> because it causes health problems.  This is a medical fact.

Hold on here. As one who has to deal with "Excess weight", I will speak.

Metabolism is a complicated thing. It is a highly nonlinear system that
was shaped by evolution to maintain survival of the individual in the
harshest of conditions.

As such, many adaptations acquired to human metabolism has that
evolutionary legacy.

Today, in this land of plenty -- of food everywhere that can be had for
cheap, those adaptations that served our ancestors well have now become
a problem we have to deal with in this new and recent land of plenty.

I thus find your "Excess weight is bad for the individual, because it
causes health problems.  This is a medical fact." statement to be overly
simplistic. It ignores the complexity of the issue; it also ignore
individual variation. 

Despite being of "excessive weight", I am relatively healthy, and have
few of these "health problems" of which you speak. Others at my mass
levels have far more health issues to contend with. Managing these
issues is also something that must be done at an individual manner.
Doctors tend to get it wrong too often for my tastes. They are not
properly trained in matters of nutrition and metabolism.

>   In turn,
> this is bad for society, because it must shoulder the burden of the
> cost of that health care.

Individuals must shoulder the costs of healthcare. Healthcare insurance
is elective, and those in poorer health tend to carry a higher premium
than those of us who are more healthy.

But keep in mind that healthcare insurers are their to *make money*.
Just like everyone else is.

Looking at this from a blanket "society" point of view does nothing to
address the needs of the *individual*. It also misses some key issues as
well, such as the *food industry* pushing its bad products on the
consumer which leads to many of these health problems in the first
place.

So, where do you whack? Do you whack people over the head for making
poor dietary choices? Or do you whack Kraft, Kellogs, and the meat
industry over the heads for encouraging overconsumption of the very
products they are raking in the money on?

Well, whack away if you like, but I will always lean towards individual
choice and education. For the individual makes choices on the basis of
what is bad for *themselves*, not what is "bad" for this nebulous
collective called "society".

>   Both of these lead to resources being
> consumed needlessly.  That is bad for everyone, except perhaps for
> capitalists who are concerned only with their own personal immediate
> gain.

Again, "bad for everyone" is not exactly an exact statement that is
workable.

> Now, don't get me wrong...  I'm not suggesting that we should all
> become vegetarians and kill all the fat people,

!!!!

>  or anything so extreme. 

I would most certainly hope NOT!

>  But as a society, we should be nudging people in healthy
> directions (for themselves and for society), NOT justifying our vices.

People have to nudge themselves. You can lead a man to knowledge, but
you can't make them think.

Also, assuming all were to become vegetarian next week, or Bush began a
roundup of all fat people to be reduced to fuel (I think he's much more
likely to start with the Intelligentsia first!), I don't think that
would change much, except the profit margins of the insurance companies.

> Government should have a hand in this -- this is among the best
> reasons to have "leaders" rather than true representatives. And in
> this regard, our government has failed miserably.

Actually, it is Government's hand in this that is a large part of the
problem. It allows itself to be lobbied by all the special interests in
the food industry so that it enacts policies and so forth to favor
*their profits*, not our health concerns.

Do you think the healthcare industry wants to loose money due to people
in general becoming more healthy? Of course not. So, it will lobby
against any such plans that it think might actually work.

Politicians are controlled by money, not by votes. Elections in our
country are largely popularity contests. Corporations will fund both
parties just to make sure it has a foot in the door *no matter who
wins*. 

As Ross Perot says, "follow the money." All else is a fool's dream.

> Another great way the government should lead the people is by
> requiring the use of open-source computer code to run all critical and
> security-sensitive systems, and encouraging its use elsewhere.  Oh my,
> an on-topic comment.  What has come over me?  ;-)

There should NEVER be a *requirement* by the government to use open-
source! That would threaten the free and open nature of open-source
software. Various agencies should just freely elect to use it as they
see it as solutions to their needs. If you centralize the use of open-
source software in the government, you are begging for trouble big time.

> But the sad fact is that our government isn't interested in doing
> what's right; it's only interested in what keeps rich people rich, up
> to the point where public outcry is insufficiently great to distract
> them from that goal...

You and I differ sharply on what is "right" for our neighborhood
"friendly" government to do.

> > The healthcare costs in this country are so enormously high. And I fear
> > that part of the reason is due to the prevalence and deep pockets of
> > insurance. 
> 
> Bingo.  The insurance people have the biggest scam going in the
> history of time...  They've taken something that should be nearly
> free in a "civilized" society, and made it one of the most profitable
> (for them)  and most expensive industries we have.  What exactly do
> the insurance companies sell?  For most people, the answer is nothing.
> If you're healthy, you (or your employer) pay insurance companies
> thousands of dollars a year so that they can pay your doctor a couple
> of hundred dollars a year in fees.  And they wouldn't be anywhere near
> tha much if it weren't for the fact that your doctor's medical
> practice  has to pay 3 full-time people to handle all the insurance
> claims of its patients...

Not to mention the doctors' *own* insurance costs, which have been
soaring higher and higher.

> In large part, of course, you're buying health care for elderly and
> unusually sick people, in exchange for the promise to have it paid for
> when you're elderly or unusually sick.  But mostly, you're paying to
> line the pockets of the insurance people.

Well, here's a thorny issue for you -- healthcare of the elderly. I
don't think any other nation on this planet spends as much money per
capita on its elderly. 

Does it extends the life of the elderly? Not much. Is it really worth
spending tens of thousands of dollars just to live a few extra weeks?

> > >    c) How long do you plan to live?  With bad luck you will live past 
> > > your savings.
> > 
> > The idea is to build cash flow, thus you do not deplete your savings
> > over time, but build them up. How to do this is an exercise for the
> > student. :-)
> 
> Right, an exercise that the vast majority of students aren't up for.

And why not?

> Most people can't even manage to figure out how to calculate
> anualized return rates.  I'd bet a fair percentage of people on this
> list can't, and probably more than a few don't even know what that
> means...  That doesn't make them stupid, and it doesn't make them bad
> people, but I think it does make them unqualified to manage their own
> retirement plans...

I'm not talking about managing the money you already have, though that
is an important subject in its own right. I am talking about brining in
more flows of cash using various means. This is where a lot of
creativity comes in. It's not easy, but then if it were, it would not be
worth anything anyway.

> > >    d) It is recommended that you have a minimum net worth of $300K per 
> > > person plus own your house outright to get through retirement with SS 
> > > as it is.  How many of you wise investors are on track to have that 
> > > money tucked away?  Going to make it all in the last few years?
> > 
> > If you have not planned ahead *early*, no, you won't have it. But no one
> > plans ahead because they have this dim expectation that the government
> > will be their for them when they need it. 
> 
> Maybe, but I don't think so.  I think most people don't plan ahead
> because, for one reason or another, they can't.  Lack of income, lack
> of knowledge, what have you.

Sounds like more excuses than anything else. Even a young person who
flips burgers for a living could put away *some* of the money. Perhaps
it means one less night out on the town, or one less pack of cigarettes.

And if they don't plan, they should meet up with the consequences later.
Why protect them from their lack of foresight? How are they to ever
learn if they are not allowed to fail?

> > I think about that all the time. My "greater fools" theory states that
> > in any zero-sum or near-zero-sum situation you *will* run out of
> > "greater fools" to take the market higher. For every dollar you gain,
> > someone *somewhere*  or at *sometime* must also loose that dollar. Since
> > the supply of fools is finite, you *must* run out someday.
> 
> Nah, we just keep making more...

I know you're being facetious, but really, even given that, your market
growth would be limited to your supply of fools growth *and* how much
money they have in their pockets they can be departed from.

And even *that* money must come from somewhere, even if it is being
printed out of thin air by the banking industry.

> > I'd say ditch Bush's plan and create your own. 
> 
> And the country will, as a whole, be a lot worse off, both now, and in
> the future.

Will it? How so? Seems to me the country is pretty bad off as it is.

-- 
-- Fred
"Don't let IE happen to YOU!"
- My daughter, who designs web sites for everything BUT Internet
Explorer.





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