Category Archives: Economics

Honolulu Car Rental Price Gouging

I got an email about this from my friend in Hawaii. It seems with the return of tourism to Oahu (which had been down 90% for almost the entire pandemic), that the demand for rental cars has gone through the roof compared to availability.

No doubt the car rental offices were selling off their fleets to help cover operating costs during the pandemic. Now that it’s ended, their short sighted move has caught them flat footed. In typical predatory capitalism fashion they’ve decided to charge over $700 a DAY for basic rentals and over $1000 if you want a convertible:

$1,000 a day to rent a car? Low supply, surging demand are pushing up prices in Hawaii (hawaiinewsnow.com)

Normally, I’m quite pro-capitalism. I understand that TO A DEGREE, supply and demand are going to factor into cost. Doing so covers the cost of increasing the supply to meet demand.

HOWEVER… Where do we draw the line in this kind of instance? Where does the law of supply and demand become predatory capitalism? I’m not sure I have an EXACT answer there, BUT, 10x the normal going rate would seem to be across that line. We rented a Mustang GT convertible a year and a half ago for our honeymoon and only paid $100 a day, which is still pricey compared to most other locations.

Wouldn’t an ethical business simply go out and buy some cars from local dealerships to increase their fleet size? At $100 a day rental rate, the car loan note can be paid for on 5 days of rental per month.

Just because you CAN do something doesn’t make it right. Look at the price hikes on insulin as another example. Somewhere along the lines the idea of business ethics got flushed and replaced with the SHORT SIGHTED idea that the only duty a business had was to provide as much short term profit as possible to it’s investors. If one has NO ability to ponder consequences, that sounds great also. In the long term though, it destroys a business’s reputation and customer loyalty. Look at Banks and Airlines as two other examples. They’re both hated.

Worse, these greedy businesses are only fueling the call for Socialism or outright Communism by people who don’t understand these are even worse alternatives.

Economics: The Reality of the Minimum Wage

As much as I try, some news topics are really hard to avoid. The recent debate over the minimum wage is one of them. Shockingly, I see the same arguments every time the topic has come up since I started working back in the 80s.

I swore off of political discussion but this is a social and economic issue that has been turned political via class warfare politics. So, let’s talk the truth.

The biggest flawed argument is that raising the minimum wage doesn’t cause inflation. You can find all manner of jury-rigged charts and stats to support the lie also.

Reality is that any good or service has two main costs associated with it; parts and labor. If you raise the labor cost of labor one of three things is going to happen:

  1. The price of the final product has to be increased to cover it’s increased cost of production.
  2. You cut your labor pool and force more productivity out of each member
  3. You decrease the quality of the materials used to make the product.

If one or more of those things isn’t done, the company loses money and risks going out of business. Few people anymore seem to understand that a business has expense of it’s own that have to be paid for out of their gross profits.

Let’s use a restaurant for example. WAY WAY WAY back in the day when I worked at Burger King, the manager and I used to talk alot. He explained that the restaurant has to charge 3 times what the food costs the store to cover all their expenses. You MAY have heard Robert Irvine say the same thing on episodes of “Restaurant Impossible” when coaching the people he’s helping that episode.

What expenses you ask?

  1. Payroll to employees (Labor)
  2. Local State and Federal Payroll Taxes
  3. Mandatory Employer contribution to employee social security (ie more taxes)
  4. Unemployment Insurance (yes the money that you collect as unemployment is first paid to the government by your former employer)
  5. Employee Health Insurance (in some cases)
  6. Business License Fees
  7. Franchise Licensing Fees if part of a chain
  8. Property Taxes
  9. Mortgage on the building
  10. Upkeep on the Building
  11. Utilities (Electricity, Gas, Water and Sewer, Business Phone, Internet)
  12. The actual ingredients to make the food
  13. The utensils and cookware tom make the food
  14. Dishes, boxes, wrappers; however the food is served
  15. Cleaning supplies
  16. Employee uniforms

And doubtless some other things that I didn’t remember. All of that is why a hamburger that costs $1 in food costs has to be sold for $3. That amount allows the restaurant to cover expenses and make a modest amount of money. Remember the owner needs to pay himself also so he can pay his personal bills also.

The proof of inflation can actually be tracked via the that same hamburger restaurant idea. When I was first hired by right out of high school, the minimum wage was bumped from $2.85 an hour to $3.30 an hour.

What happened right after that? The price of a Burger King “Whopper” sandwich combo meal jumped slightly to $3.35. I cashiered, so the price stuck in my head, LOL.

The price of a combo meal at almost any fast food restaurant has stayed almost the exact same amount as the minimum wage also. The Federal minimum wage is currently $7.25 an hour. What does anything actually worth eating in terms of a combo meal cost? About $7.

Yes, you can get cheaper stuff, like the $5 specials that the low quality fast food places (McDonalds, Burger King, Taco Bell) run, but are any of those items worth eating? Typically, the ingredients are cheapened down to the point the food is barely edible. I joke about the typical fast food chicken nugget being made from ground up beaks and claws for example, LOL. Then they drown the junk in some cheap vinegary sauce and hope you don’t notice.

Reality is most fast food and quick serve places have cheapened all their menu item ingredients because they can’t get anyone to work for under $9 an hour but still have to keep prices down. So to balance profits they’re selling $5 meals for $7 and paying the employee $9 to make it.

It’s not just restaurants though. Everybody’s wages go up, so prices go up across the board. Net result, we have inflation and the little guy has no more buying or saving power despite the increase in income.

You can’t squeeze much more productivity out of the average worker either, so cutting labor and demanding more from those who remain isn’t a viable answer.

“Real” minimum wage in the above chart I’m assuming means the legal minimum wage adjusted for inflation / actual buying power as compared to the past. Note that it’s stayed moderately consistent while productivity has soared.

Some of that productivity is automation assisting jobs (which typically means fewer hands needed to do the same amount of work), and the rest is just employers demanding more from employees. Anybody recall being expected to fill multiple roles after the housing bubble burst, if you were lucky enough to keep a job?

The irony about all of this is that even Investopedia is full of double speak here and it’s typically a decent source of info for basic economic concepts:

With regard to inflation, so-called wage push inflation is the result from a general rise in wages. According to this hypothesis, in order to maintain corporate profits after an increase in wages, employers must increase the prices they charge for the goods and services they provide. The overall increased cost of goods and services has a circular effect on the wage increase; eventually, as goods and services in the market overall increase, higher wages will be needed to compensate for the increased prices of consumer goods.

So that’s what Ive been saying. But the next paragraph down in the article, they argue against that idea and that the only alternatives are cutting workers of quality of goods, BY SAYING THAT’S THE ONLY ALTERNATIVE!!!

According to economic analyst Ed Rensi, formerly an executive at McDonald’s, a higher minimum wage would not only kill existing jobs but also result in closing a substantial number of small businesses, from 15% to 20%. In theory, raising the minimum wage forces business owners to raise the prices of their goods or services, thereby spurring inflation. In actual practice, however, it is not so simple since wages are only one part of the cost of a product or service paid for by consumers. A higher minimum wage can be offset (ie inflation avoided) by heightened productivity by workers or trimming down a company’s manpower.

Are you getting the message yet, folks? You’re being scammed in an effort to buy votes when NOTHING will truly change.

Is There a Real Answer?

This one is harder to answer than it should be. The standard conservative answer is education. However, “everybody deserves a college degree” worked out as well as “everybody deserves a house”. There was so much graft, misrepresentation and sometimes lazy students, that we’re sitting on another economic time bomb with student debt. In an ideal world, education would be the answer. The more you know, the more you make. Flipping hamburgers could be left to kids in school or robots and everybody would go on to make a living wage at a “real job” as my mother used to call them.

Aside from the problem with needing to clean up the system, things are evolving so fast that training and education are often obsolete in 5 to 10 years, even some hard science advanced degrees. How does the average person keep up with that??

Then there’s the whole issue of jobs becoming increasingly replaced by automation as well. New York City has some fast food restaurants that are completely automated now (in response to their $15 per hour minimum wage no less). There’s even efforts to replace lawyers with robots. Good riddance there, LOL

People are becoming obsolete in general. The ultimate answer may be some form of universal income. That’s scary in how much power it gives the government over the lives of it’s citizens. I’m not even sure how it works as the idea goes completely against basic economics. Government doesn’t produce anything to create the wealth it wants to distribute in a universal income situation.

No, you can’t just infinitely print money either. It destroys the value of it. Think of it this way; If everybody had FIVE, (yes five) classic Mustangs like mine:

How much would ANYBODY be able to sell one for? ZERO. Even money itself operates under the law of supply and demand. The more there is of anything, the less it’s worth.

Answers? Wish I had some good ones. Right now, all I know is the dog and pony show in Washington is nothing but smoke and mirrors intended to buy votes. It’ll sadly work too.

How To Fix Capitalism:

(5 minute read)

One of the many things I hear nowadays that frustrates the hell out of me is the rants from the ignorant about the evils of capitalism and how it all needs to be torn down.

Capitalism, by definition, is private ownership and control of business. The proper differences between it, socialism and communism are something that will have to wait for another post. BUT, we have to define what we’re specifically discussing here.

SO, by that definition, there’s nothing inherently evil about capitalism.

The only way that argument can even be made is by someone who blindly believes that government is incorruptible and business is inherently evil. Common sense says that just isn’t true.

HOWEVER… the distorted mess we currently call capitalism definitely has some major issues. I’m going to lay out some ideas on how to set it back on a path that’s better for society in general. I’m NOT saying these ideas are doable without a major fight, OR even a complete solution. They’re simply a start at addressing what I see wrong with the system.

Almost all of these ideas are going against the idea of true “Adam Smith” capitalism also, but then I doubt he ever imagined how the uber rich would be able to exploit the system.

1) Eliminate Commodities Brokers

Most people don’t understand these at all, nor the impact they have on the economy. The Eddie Murphy movie “Trading Places” did a good job of showing what they do though. They’re middle men in the chain between producer and consumer, BUT they serve no purpose other than to create scarcity and drive up the price of a product. They buy up everything from orange juice to gasoline and housing lumber, then horde it just long enough to drive up the price and sell it back to the market.

Plain and simple, my opinion is that the supply chain should not involve anyone that isn’t directly involved in manufacturing the product, selling it, or transporting it to be sold. That means stores (even Amazon), warehouses, manufacturers and shipping companies.

The devil is in the details with this idea. First it would have to be adapted worldwide (as would all these ideas really), and then there would need to be nuances in the laws for collectors and similar people. Never mind the filthy rich will fight like mad to block it.

2) Eliminate Interlocking Corporate Directorships:

This is another HUGE problem that goes unnoticed. Not surprising since the people that control the media are a large part of the problem.

Interlocking corporate directorships are when executives sit on the boards of multiple corporations at the same time. It creates a HUGE conflict of interest, and SHOULD be outlawed by the Stock Exchange and other agencies.

As one fictitious example, mister Jones sits on the board of directors of a corporation that sells cleaning products and a media corporation. The cleaning company makes a defective product that sickens or kills several people, and mister Jones orders the media corporation to bury or white wash the story.

These interlocking directorships are also how competition killing mergers happen so frequently.

Bottom line; if you’re an executive, especially at the board of directors level, you get to work at ONE company only. Anything more is NOT looking out for the best interests of the shareholders or the company since you’re juggling loyalties between multiple companies.

3) Break Up Mega-Corporations:

Amazon is probably the poster child for this movement. They control 1/8 of the U.S. economy and over 50% of all internet sales. They’re hardly the only corporation with their hands in numerous pies however. Even Coca-Cola owns much more than soft drinks and bottled water.

In my opinion, the safest and fairest way to do this is to eliminate the parent company level of corporations. Make the divisions into unique and fully independent companies. In the case of Amazon, for example, break it up into a company for people to list and sell with (ie their affiliate marketing program), a delivery company if they want to retain that aspect, a grocery company and a book seller.

This leaves more room for competition, which encourages growth and innovation.

My own unanswered question here is how to deal with a company like Walmart that is just a giant retailer. With department stores already dying out, it might be time to consider limiting retailers to a single broad category of goods in the hopes that also fosters competition and innovation.

4) Eliminate Government Bail Outs:

Funny and ironic how some of the loudest voices against bail outs are rabid socialists.

Pure capitalism means if a business screws up, it crashes and burns and something smarter and better takes it’s place. That’s the way it should be. Government security blankets only encourage reckless business practices. There should never be any such thing as “too big to fail” or “what’s good for GM is good for the country”.

Bailouts shouldn’t exist beyond unemployment for the workers and perhaps some sort of streamlined process for new owners to take over a failed business. Not sure how that could work without creating a kill and cannibalize mentality within the business community.

5) Eliminate Corporate Raiders:

I’m tired and not sure I’m using ideal terminology. What I mean though is outlawing the practice of buying up a company to just shut it down and sell off all it’s assets. Let’s face it, the only people this benefits are the shareholders, and ONLY in the short term. It eliminates competition, and puts employees out of work.

There is the issue of companies that would have failed anyway, but I didn’t claim to have all the answers to every angle.

6) Make Mergers Harder to Take Place:

I’ll probably get alot of crap on this one from the Far Right, but mergers eliminate competition. They’re bad for innovation and the consumer. Look at the banking industry as an example. After the big five banks pushed the Dodd-Frank reform act through and wiped out almost all their smaller competition via regulation, they jacked up fees on everything and customer service went into the toilet.

How we pull this off and where we draw the line, I’m not sure. Maybe a cap on market share by percentage.

7) Political Term Limits:

What does this have to do with capitalism? Simple. Most politicians go to work for lobbying firms after they leave office. Ergo, aside from limiting political corruption, it limits the ability of former politicians to influence pedal once out of office. I’m on the fence about also suggesting outright banning politicians from being able to work as lobbyists. It seems unfair on one level, but we have laws against people working as other types of thieves, LOL.

8) Outlaw Protectionist Legislation:

This has gotten to be a big but barely covered problem the last decade or so. Did you know for example that Texas car dealers got together and bullied their state legislature to ban Tesla from opening any dealerships in the state? That eventually got overturned, but it never should have happened in the first place.

As I mentioned earlier, the Dodd-Frank Act was largely drawn up by lobbyists from the five major banks in the country, and was deliberately written to make compliance so costly and such a hassle that only those big five could afford it. Ironic since they were the ones most responsible for exploiting the government mandate to loan or else during the housing bubble. Clearly some sort of legislation was needed after that whole disaster, but it should have been done in a way that wasn’t a huge power grab and blatant crony capitalism.

Government regulation should be as minimal as possible, and have the purpose of protecting the public while promoting competition.

9) A Return to Morals:

No political or economic system will ever work without morals in place.

It’s nothing that can be legislated here either. People have to get sick and tired of seeing the world around them treated like some video game where short cuts are cool and there’s no wrong in screwing everyone else. No morals just means more of the same no matter what system we work under.

I will NOT entertain any arguments about religious freedom here either. Morals like not stealing or killing, and treating each other the way you’d want to be treated are universal concepts. They’re just inconvenient to people looking for easy money and power. Forty years ago, people frequently did business based on a handshake and a person’s word of honor. Displaying a lack of integrity was unthinkable.

Now we operate in a world of fifty page contracts full of mice type, gotchas and indemnity clauses. It sucks, and is driven by a business and moral climate that is only focused on how much can be grabbed today. Long term growth? Customer loyalty? Who cares? Gaming the system at the expense of society as a whole should be unthinkable, NOT business as usual.

I’d also add that this need for morals also extends to people who think it’s OK to cheat and steal from businesses, and employees who make a game of seeing how little they can do for their paycheck.

10) Restore Financial Education:

Almost an afterthought on my part, BUT making things work also requires an educated public who understands finances and economics. If we continue to have a public who believes “profit” is just money gobbled up by the elites, and doesn’t understand how profit is reinvested into supporting and growing the business, we’re in trouble. Right now, most people can’t even explain the difference between gross profit and net profit, or even balance a bank account. That’s in DESPERATE need of change.

OK, that’s enough. Is most of it socialism light? Yes, BUT it’s regulation that’s designed to promote competition instead of kill it. Diversity in the marketplace is good for the economy and the public.

ANY human institution is going to require some oversight anyway, because humans aren’t perfect. I’d prefer to see rules like these as opposed to the socialism that really only results in crony capitalism.

Social Commentary: Let’s Define Some Terms

As I mentioned in my last post, I dropped the ball on defining some of the terms in me What the Elites Fear post. I don’t blame Jyvur Entropy (free blog plug removed for trolling) there. Terms like “Elites” are kicked around by everyone from hard core marxists to conspiracy theorists to libertarians. Everyone has a different definition also; dictionary be damned.

For my new readers, I’m a moderate who leans conservative. What that means in plain English, is that I see the flaws in the extremes of both sides of the political debate. I believe strongly in honesty also. If I see a good idea come from anybody, doesn’t matter if it’s Trump or Pelosi, I’ll give them credit while still holding them accountable for their bad ideas.

Being a free thinker, I’m an acquired taste. People that dogmatically follow any given ideology have a hard time following me and sometimes say I sound like two different people. Such is life.

All of that MAY be somewhat irrelevant anyway. I’m not sure I’m going to continue with social issue posts. I’ve found them a big distraction from my creative writing, and a mood killer as well.

Regardless of if I continue, I do need to go back and define a few terms for readers.

Let’s start with the dreaded “elites”.

For starters, as I was using it yesterday (and in other posts), I was referring to the super rich who have more money than God, and a god complex about what they think that entitles them to do. George Soros is a great example. So are Mark Zuckerburg and a handful of other tech billionaires. Just examples though, NOT the entire list. These people use their money to screw with people’s lives and freedoms, try to indoctrinate others to their ideologies, and generally don’t care who they run over to increase their wealth and power.

There are others as well… Top level executives that sit on the boards of interlocking corporate directorships and are nameless to the vast majority of people. Interlocking corporate directorships are when board members of one company sit on the board of one or more other companies as well.

One great example of how this can create a conflict of interest is when Brand X does something horrible, and Media Company A white washes the whole situation because Mister Smith is on the boards of both corporations. Or maybe “Retail Company A” won’t carry some new start-up’s product because Manufacturer X sees it as a threat to their market share and there are people who sit on both companies’ boards of directors. Note investopedia says interlocking directorships are a COMMON practice too.

Capitalism… PURE capitalism, is a wonderful thing. It’s created more millionaires and lifted more people out of poverty than any other economic system out there. How these people make their money is nothing close to Adam Smith’s idea of capitalism though.

OK, I got off track there BUT I think it’s worth leaving the two paragraphs intact to show you don’t have to be Mark Zuckerburg to screw with the populace. It also shows that one can be a good American and capitalist, and strongly disagree with the way mega-corporations do business.

Then we have the politicians.

Do I really need much explanation here? They’re ALL whores for sale to the highest bidder, even if they come in with genuine good intentions. That’s why I believe in term limits all the way down to city dogcatcher. Get people out before they become corrupted. They spend more time fund raising and campaigning than they do legislating. Ultimately it always becomes about the perks.

Great movie, BTW… If you’ve never seen it, I highly recommend it. The scene pretty much shows what independent thinkers already know; the issues are a smoke screen that enable politicians to keep the base fired up and at each others’ throats while they collect money and laugh behind our backs.

The Media…

This goes beyond trainwreck to “Death Star remnants crashing into Endor”.

First there’s the reality that many journalists are biased. Factor in the power and influence of their corporate overlords and those interlocking directorates, and you’ve got a real mess. My previous rants against the media have been because I can’t find a single story online, be it Fox, MSNBC or NPR without thinking “Where’s the supporting evidence?”, “That’s a blatant lie”, “That’s completely misrepresenting what was said”, or “You’re playing on emotion and not reporting facts”.

Combine that with networks carrying commentary shows disguised as news like Rachel Maddow or Hannity and the waters really get muddy. Call them on something and the reply is almost always the same too; you’re a racist or a marxist.

The Whole Illuminati / N.W.O. Conspiracy Theory

Sadly if you’re a free thinker, this is often the defense used by the corrupt and their (usually) well meaning supporters; you’re a conspiracy nut.

To a large degree, I think the whole Illuminati thing is nonsense. Note I said “to a large degree” however. Just because the vast majority of the stuff on the topic out there is completely insane doesn’t mean it’s all false. Look at the Georgia Guidestones:

courtesy of Wikipedia. Link above.

Somebody spent a TON of money to erect a monument that spells out the New World Order philosophy in plain English, and permanently buy the land owner’s silence on who it was. There’s remarks from Kissinger, Soros, and several other politicians and super rich spouting similar ideas too.

Many of the same ideas show up in the extreme views on climate change and other social issues as well, including a need to drastically reduce the Earth’s population (AKA Genocide).

So yes, there’s a LITTLE truth there. I don’t believe they’re this all power shadow syndicate running the world, but they wish they could be. The best way to hide what they’re doing is to bury it under a pile of seemingly related crap so deep that no sane person would give it any credit either.

Hey, Big Government and Lockdown Fans!!!

Yep, I’m calling you out. No attacks though. I want to try to get through to you and show how you’re being manipulated and used by would be dictators in BOTH parties.

Kevin Sorbo put this best, so I’m going to borrow part of a post from Laura Venturini’s “It’s NOT for Your Own Good” post yesterday.

Everybody please WAKE UP!!

When the State tells you it’s safe to go to Home Depot to buy a sponge but dangerous to go and buy a flower and when the State shuts down millions of private businesses but doesn’t lay off a single government employee, it’s not about your health.

When the State prevents you from buying cucumber seeds because it’s dangerous, but allows in person lottery ticket sales and When the State tells you it’s dangerous to go golf or fish alone but they can get make up and hair done for 5 TV appearances, it’s not about your health.

When the state puts you IN jail for walking in a park with your child because it’s too dangerous but let’s criminals OUT of jail for their health and when the state tells you it’s dangerous to get treated by a doctor yet says a liquor stores essential it’s not about your health!

When the State lets you go to the grocery store or hardware store but is demanding mail-in voting, ITS NOT ABOUT YOUR HEALTH.

WAKE UP PEOPLE — If you think this is all about your health you’re mistaken! Please open your eyes! Stop being lead like blind sheep.

Kevin Sorbo on Twitter

What some of you are creating, with your blind acceptance of everything the government tells you, is the pathway to a complete dictatorship.

The virus is real. Despite what the lamestream media is telling you, the vast majority of us on the other side accept that fact. We also accept it’s dangerous. We simply believe that social distancing, common sense and perhaps some masks and gloves are enough.

We also do NOT believe in throwing away the freedoms that people have fought and died for since the Magna Carta was signed in 1215. The security you’re offered in an illusion. Only chains await you and your children and your children’s children… All for the FALSE hope that the government will protect you from everything, including nature.

It took over 800 years to get personal freedom and civil rights to the point they’re at now. Before then, people were bound to the land, did what the gvernment told them, and lived or died at the whim of that same government.

Power corrupts, absolute power corrupts absolutely

It’s a story that been told since the dawn of civilization. Shakespeare wrote about it in “The Winter’s Tale” and it’s been retold dozens of times. Even in comic books. Despots always either have noble intentions or fake them very well, but their actions always end up the same.

Take the case of “Injustice” in DC Comic Books. An alternate reality where Lois Lane was killed by Joker, and SUPERMAN of all people went off the deep end and became a fascistic dictator. Criminals and anyone he disagreed with were killed without a second thought… All “for the greater good”. Is THIS what you want?

This is how he later rationalized it all to his own cousin:

Sounds an awful lot like some of those folks who say they have everybody’s best interest at heart, BUT label anyone who questions them as dangerous, conspiracy nuts, fascists, selfish to the point of threatening not just others but civilization itself now, etc… doesn’t it?

Anybody see the irony and hypocrisy there yet? The violence doesn’t stop, it’s just aimed at people who disagree. How many times have you heard climate change deniers have no right to speak, or should be jailed? That they’re all just out to destroy the planet that we ALL live on? easier than finding out if they just question SOME of the facts and think there might be a better option to reach the same result right?

“You’ll either make the right choice, or I’ll make it for you…” Is that what you want for your family and friends? Technology isn’t TOO far from THAT point… Give it a decade.

Comic books have a knack for the grandiose and dramatic. Take away all the metahuman stuff and it’s REALLY not so different from what we’re facing now.

Think about it.

The Problem With Government

Time for round two, and that second big common factor I mentioned. No, it’s not exactly what the headline would suggest either. Unlike extreme libertarians and anarchists, I realize government has a role. The problem *I* see is an unrealistic level of expectation of government, and an unhealthy level of dependence on it.

This really became evident as I’ve watched the news the last few months. People seemed to have this insane expectation that the government was going to wave a magic wand and make it all better. Nobody would die or end up in the hospital from coronavirus. It’s like people have cast away religion and taken government bureaucracy as their god.

How’s that worked out for all of you?

It’s been FIFTEEN YEARS since hurricane Katrina all but destroyed New Orleans. Even after all this time, it’s still not fully rebuilt. All government did was squander the money sent to help rebuild, then blame everyone else for the lingering mess.

In California, we have either the highest or in the top three in the US (depending upon who you listen to) gasoline taxes. The only place I’ve been with worse roads in the entire country is Louisiana. They have the excuse of building on swamps, unlike California. Our freeways are falling apart, our bridges are reportedly unsafe, and they keep increasing the taxes. Nothing improves though.

California spends BILLIONS on mental health and the homeless, and yet our streets are overflowing with both homeless and mentally ill people who are outright violent.

Standard disclaimer as always: I realize the vast majority of “mentally ill” people are quite functional within society and not a danger to others at all. That however does NOT change the situation here.

Let’s Look At the Government’s Handling of the Pandemic:

First, there’s the fact that China’s government lied about the outbreak on multiple levels. Numbers, severity of the disease, who it can impact, etc…

Oh and let’s not forget making whistleblowers disappear altogether also:

There’s even the POSSIBLY that COVID-19 was even manufactured in a bio-weapons lab in Wuhan province. Is there what I consider conclusive proof on that last one? Not quite, but there’s enough to make you wonder.

Yeah, I’m doubtless banned in China now, LOL. Shame as it’s an amazing country and culture. I just don’t trust it’s government. THIS is what you get from a totalitarian regime though. Be careful what kind of government you’re wishing for people.

That’s China though. Can’t happen elsewhere, right? Well, how about the World Health Organization helping China with their coronavirus cover up?

Don’t like Fox, hit Google. LOTS of stories out there on this if you dig a little. The WHO is SUPPOSED to have the job of helping protect the world from diseases, not covering up one and helping it spread.

Want further proof? Check out this interview with a WHO official:

China hates that Taiwan considers itself a free and separate country. Mr Aylward shows himself to be a complete boot licker there too.

Here in the US, the Centers for Disease Control and others were basing reports on that same info (instead of fact checking) and were responsible for that bad info being passed on to the President, Congress and the Media early on.

Reliance on the government would also require said government to come together during a crisis. All Congress and some state and local governments have done is trash the President’s efforts. Trump put a travel ban in place with China on January 30th. He was called a racist, xenophobic, a hate monger, etc… for doing so.

New York’s governor has spent the last couple of months trashing Trump for not giving him ventilators and other equipment. He was warned back in 2015 by a state task force that the state needed thousands more ventilators in case of a pandemic. He blew them off, spent the money on pet projects and told them to figure out how to ration the 2000 the state did have in reserve. Yep, government is the answer.

All government is usually good for is blaming others when it screws up and then asking taxpayers to cover the cost of their ineptitude.

Don’t think flooding the market with new money will fix things either. At the rate Congress is going, we’re going to devalue our currency faster than post world war 1 Germany. The more there is of anything, the less it’s worth. Makes it easy to pay back all the money we owe China if the entire deficit total is now equal to the cost of a loaf of bread. Yes, that DID happen in Weimar Germany also.

It’s private industry that’s stepped up and is mass producing ventilators, masks and other protective gear, 5 minute test kits, a couple of possible vaccines, and the malaria drug that’s been around for decades that shows repeated signs of curing COVID-19.

Only 3M really failed to step up at first, and a boot in the ass by the President fixed that.

Where Else? Has government assistance done anything meaningful to lift people, especially black people out of poverty? No, they’re too busy splitting up families to make people qualify for benefits and then telling the people they’re “helping” that they can’t get ahead on their own.

The Proper Role of Government:

I’ll start with the classic Libertarian definition. Government exists to protect citizens from loss via force, fraud or negligence. Doesn’t matter if that loss comes from another country or a fellow citizen. That’s why we have a military, first responders and courts.

Beyond that, or more appropriately as a part of that, government should also act as a reasonable check on business. Anti-trust laws for example. In my opinion, those should be expanded to break up mega-corporations like Amazon and Disney that have WAY too much political influence and control over the marketplace.

As I’ve said in previous posts also, I think social programs belong as a part of government nowadays too. Private charities can’t do it all, and people no longer have relatives with farms that they can go live on if life in the city falls apart like in the 1930s.

What I would do however, is structure those programs to help people become more self sufficient than programs currently do. Better job training options, education where needed, etc… Give people a sense of self respect and purpose instead of devaluing them and keeping them trapped in a broken system.

BOTTOM LINE:

The current craze of expecting big government to solve everything is only going to lead to slavery and dictatorships. People need to realize that the proper role of government is to make sure you have every reasonable opportunity to do or earn for yourself, NOT provide it for you. EVERY thing that government gives you is something they’d deprived you of the ability to do for yourself. It always comes with strings too. Nothing in life is free. Period.

Those of you who still prefer giant government, consider this: Private business can be boycotted, competed against, etc… at least until the near monopoly level. Government, on the other hand, has the unique ability to use force to make you use it’s product and follow it’s will.

“Never Let A Good Crisis Go To Waste”

I’ve thrown that quote from Rahm Emanuel around a few times in this blog. While it would be nice if we could put political BS aside and concentrate on helping each other, some people are just such scum they can’t help themselves.

Case and point: California Governor Gavin Newsom.

Anybody that’s followed this guy for a while knows he’s a sleaze. He’s been making the rounds on social media and the mainstream media promoting the idea of exploiting this crisis though. Newsom answered a recent question by a reporter about the outbreak creating political opportunity for liberals as follows:

“There is opportunity for reimagining a progressive era as it pertains to capitalism,” Newsom said. “Forgive me for being long winded but absolutely we see this as an opportunity to reshape the way we do business and how we govern.”

Yeah, screw the democratic process and the will of the people, let’s just seize dictatorial power

Maybe somebody should remind our extreme socialist governor that it’s the private businesses that he’s planning on screwing with who are the ones stepping up to fight this outbreak.

Government, on the other hand, was warned about this for ages, and sat on their thumbs instead of preparing. Personally, I’ll put my faith in those businesses, their owners and the people that they employ to rise to the occasion.

Setting politics aside, MAYBE Gavin Newsom should treat this crisis as a chance to help the sick and keep the economy afloat instead.

THAT would require MORALS however.

You Won’t Hear It On The News:

Yes, in the midst of all the high drama, there IS good news out there that’s barely being reported. For instance, the stock market had two nearly 100 year record gains in the last three days:

The economy is NOT going to implode, leading to the zombie apocalypse. Recovery speed is still uncertain, but recover we will.

Let me explain to readers what happened with the stock market the last few weeks.

As the virus started to spread, we had a stampede of lemmings start. It was a combination of paranoid whackadoos, automated sell orders set to occur if the trading company’s computers detected a drop, AND yes, a few savvy yet ruthless people who sold high knowing that the panic mongers would be running amok. The vast majority of it was just paranoia and automated trading systems.

When the market hit the low it did a few days ago, rich folks with available money, and those few savvy investors all jumped back into the market. There’s NO vast conspiracy here. All that’s going on here is people following the basic rule of “buy low, sell high”.

Rich people buy when something is a bargain, and sell when the price has risen and may show signs of going down.

Most middle and lower class people simply don’t take the time to learn basic economics. To be fair, it’s not all their fault either. The banks and government count on financial ignorance to get away with the things they do. It’s no accident that financial education disappeared from schools ages ago. Investment companies make everything sound overly complicated so that it’s intimidating to the average person as well.

The end result is that while wealthy people buy real estate and stocks when the prices are low, the average person sits on the sidelines scared. They wait until the price has gone up, feel like they’re missing out and then jump on the band wagon too late. Then they ride the crash all the way down, panic sell and take a loss.

That pattern leads to the uneducated person having less money to invest next time, and the educated ones having more money to apply to the whole buy low sell high pattern next time. Financial literacy is vital.

RECOVERY RATES:

Also not being mentioned in the fear monger media. As of late Wednesday, over 113,000 people have completely recovered from the coronavirus. With a known infected total of roughly 461,000 at the time of the article, that’s about 25% already recovered completely. That MSN article actually has some other fairly positive stats worth looking at.

The one stat I did extrapolate from the article which was NOT mentioned is that the death rate (20,000 out of 461,000 infected) equates to 4.3% Note the decimal point there also. That percentage is actually UP from when I first started blogging on the outbreak. It was .9% at that point. Most of that spike is occurring in Spain and Italy, as the article shows.

Pray for those folks and people in general.

My point with highlighting that stat is to counter the “it’s all a fake” crowd. This virus is NOT the 1918 Spanish Flu. It may not even turn out to be as serious as the H1N1 outbreak of 10 years ago. It IS serious though.

Saying social distancing is not needed is like the government banning… Let’s take an extreme example here and say hand grenades. THEN critics turn around and scream “See?!? Nobody died from hand grenades! This ban is stupid!”

The steps in place are working if they seem to be complete overkill. Yes, it’s a balancing act with civil rights, but individual rights have to be balanced with social responsibilities. Neither exists in a vacuum.

I’ll be blunt. With all the morbidly obese people, diabetics, people with hypertension, and other secondary conditions that make COVID-19 much more dangerous, I’m surprised we haven’t had more deaths here in the U.S.

That’s NOT a judgment BTW, just a statement of the reality that the U.S. is NOT a healthy nation. I hope people will use this mess as motivation to improve their health.

A Case Study in The Abuse of Statistics

I was asked about the recent “record number or CEOs quitting” conspiracy theory, so I’m doing a post on it. Primarily because a little research shows how this is cherry picking data and a complete abuse of statistical data.

I hope all of you will pay close attention to this post. The analysis I give here can be used to punch through the complete BS that’s thrown around so much of the internet nowadays. As tough as I was on the media yesterday, they look like paragons of virtue and honesty compared to social media, Reddit and the fringe “media”.

OK so the latest conspiracy theory is that CEOs have stepped down in record numbers the last year, and the pace has been increasing since the start of the year. This is ABSOLUTE PROOF to the delusional that the CEOs were all part of a vast conspiracy of the evil rich to kill off the great unwashed.

THE BASIC FIGURES:

The only figures I saw thrown around a few articles were the base numbers for last year and this year. We hit 1480 resignations last year, and had 219 just in January this year. Apparently no stats yet beyond January. Both are RECORD HIGHS!!!

THE ACTUAL BAR GRAPH SHOWING THE TREND:

Here’s the information that’s NOT being said. The case quickly falls apart if it was shared as part of the story:

As you can see from the tweet, the info wasn’t tracked at all till 2002. While the last couple of years DO show a spike, they’re not THAT far out of line with previous years. 2005 through 2007 in particular came fairly close.

NUMBERS IN A VACUUM:

The biggest abuse of statistics is that people will quote a statistic completely on it’s own; ‘in a vacuum”. That’s ALMOST never accurate, and is usually accompanied by the infamous “everybody knows” as a substitute for facts.

“Everybody knows” is actually just an effort to get people to avoid critical thinking, and an almost guaranteed sign that what you’re hearing or reading is complete bullshit.

For statistics to have any meaning, they have to be looked at in terms of what may be impacting the numbers. Let’s look at the possible influences that were NOT discussed relating to this issue in any article I saw:

1 Has the number of corporations grown in equal proportion? If the percentage has stayed the same even though the number has gone up, the only thing that’s changed is the number of players in the game (so to speak). IF there’s an even higher proportion of corporations, then the percentage of CEOs “quitting” would have actually gone down.

2 Have these CEOs truly “retired” or have they just jumped ship or shifted to an advisory role? Job hopping has become both trendy and big business (pardon the pun) for corporate executives, just like it has for professional athletes. Cash in a severance package, jump to another company for a better package and even higher pay. Rinse, wash repeat in a few years. It’s all about the game here for some executives.

Until you have meaningful statistics about who has both truly retired AND also run for the hills, there’s absolutely NO rational way to establish a link between CEOs resigning and some sort of global conspiracy regarding the pandemic.

3 What are the ages of the CEOs retiring? There’s likely a huge difference in motivation for a 70 year old CEO retiring and a 30 year old one doing so.

4 How many of those retirements were due to the company being eaten up by a larger one? It’s a legitimate factor in the numbers, especially with companies like Disney, Google and Amazon gobbling up more and more companies out there.

5 How many CEOs retired due to real health issues?

6 How many CEOs retired due to personal or corporate scandals?

7 How many had specific clauses in their contracts that made it a benefit for them to retire recently. 2020 is a nice round number to use as a deadline for receiving stock bonuses, etc…

8 How many simply had their contract expire this year?

Are you readers getting the idea here? 🙂 It’s only when you can show both a pattern of increase AND a proven pattern of causes after accounting for all potential influences that you’re close to the truth.

Let’s shoot down one specific example used as proof in the stories; Bill Gates. He’s got more money than God so he HAS to be part of some now proven conspiracy!!

Reality: The man is 64 years old. He’s been running Microsoft for almost 40 years. He stepped down as Chairman years ago already, signaling he was transitioning towards retirement. He’s also heavily involved with the charity he started and been saying for years he wants more free time with his family.

I’d say there’s also an unspoken likelihood that given his age, etc… he’s possibly feeling a little overwhelmed by all the latest advances in technology and realizes the company might be better off in younger, more innovative hands as well.

Vast evil conspiracy or just an aging man wanting to finally take it easier?

CONSPIRACY THEORIES IN GENERAL:

So, as you see, what we have here is a conspiracy that looks good at first glance, but quickly falls apart under any real analysis. The same is true of most conspiracies really. My opinion is that even in most legitimate cases, the “conspiracy” isn’t some cabal that sets in motion dastardly deeds. They simply make sure to exploit and capitalize on the situations once they occur. Remember my Rahm Emanuel quote a few days ago?

“You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.” – Rahm Emanuel

Once again, “could not do before” really means couldn’t get away with before. He’s recently reprised that saying also as he makes the rounds on TV trying to exploit the coronavirus situation to make himself relevant again.

I could further point out that a good way to potentially hide a legitimate conspiracy is to bury information about it under layers of complete crap that’s supposedly connected to the conspiracy. …At least until the whole diversion tactic reaches a critical mass. I think we’re at that point too. People see conspiracy theories in their breakfast anymore.

CONCLUSION:

So there you have it. As my college statistics teacher pointed out; “Numbers don’t lie; people do”. Sometimes it’s out of ignorance and lack of analytical skills. Sometimes their personal biases and need to blame others blinds them. Sometimes people just try to blatantly manipulate others with partial truths.

Knowledge and critical thinking skills are the only defense against it all. We live in a world of unprecedented access to information. Unfortunately the vast majority of it is tainted or outright false. Without a basic understanding of the kind of analysis I put forth here, you’re doomed to be led around by the nose by people manipulating you for their own gain.

Talking Down the Economy

Anybody care to guess what the biggest real flaw of capitalism is?

NO, it’s not greed (a legitimate topic for another time), or some of the things you hear from socialists or communists.

It’s quite simply that a capitalist economy is almost totally driven by consumer confidence in that economy.

This is a little bit of an over simplification. Tax levels and bad moves by companies certainly can impact the economy. I won’t deny that. At the same time, the reality is that most times, the economy will recover quickly or continue right on track IF people believe it will AND keep spending.

Crashing chart

Likewise, all it takes to trigger a massive sell off in the stock market (ie causing a crash) is people believing that one is coming and then rushing to sell. With automated trading systems, it’s now built into the network. A few lemmings jump off the cliff and everyone follows.

What’s the point beyond a little trivia?

It’s that I’ve sat back for decades and watch people in the media and in politics try to trash the economy. This is NOT a Right vs Left thing either. Both sides do it when they’re not in power in an effort to undermine the side that is in power. I watched Republicans constantly trash the Obama and Clinton economies, and I’ve watched Democrats talk down the Reagan, Bush and Trump economies. It’s politics at it’s worst as politicians try to ruin lives and businesses to gain votes.

The media? They’re just into hysteria for ratings, as the Covid-19 coverage shows.

If you’re worried about the economy, TRY not to be. Reality is, this is a new situation and nobody knows for sure what will happen. If people remain paranoid, stay home after the all clear is given, and are too afraid to spend, we may be in trouble. If people breathe a big sigh of relief and are eager to get back to living life, things will likely return to a pre COVID situation pretty quickly. Life will be fine if that’s the case.

The point is, we don’t know for sure and we can only control our own little piece of the economy (our personal finances). Anybody that tells you otherwise is lying. Period.

Do NOT worry about what is out of your control. Stay calm, hope for the best and please be aware that when you see politicians trashing the economy, especially if the numbers say different, they’re only trying to make hay at the risk of your financial well being.

That’s your basic economics lesson for a COVID Wildcard Wednesday.