Posts Tagged ‘wealth’

Free Market or big racket economy?

Monday, November 16th, 2009

I hate to complain on a blog but…

It is commonly held that in America we operate under a mostly free economy.  Free meaning the consumer can choose which good to buy based on her criterion and the producer is free to produce what she likes.  Our economy is held to be “mostly” free because we the people also hold certain products to be more important than others, so we subsidize them to achieve greater economies of scale ensuring that those goods will always be found in ready supply

I posit however that America does not have such a free economy.  I posit 3 points as evidence.

  1. Recently it slipped my mind that I had a credit card bill due.  We don’t use it very often so it wasn’t on my priority list.  And since this credit card had no “auto pay” feature I was late by 3 days. Thus I triggered an automatic “rate increase” from my previous 3.25% APR to the kindly rate of 29.65% !  What?! Seriously?!  My 5 year loyal customership meant nothing?  My only option was to pay the ridiculous interest rate or cancel the card.  Cancel I did.  If it was a free economy then the amount of pressure to keep me as a customer would be great enough that Capital One could not survive as a business without offering me more than the given two options of pay up or get out.  Instead they would be forced to assess a one time “late-fee” and only when my credit score changes could they move my interest rates upwards.
  2. The cellular phone industry is another good example of why our markets are not free.  The cellular phone industry has figured out how to 1.) lock people in to their service by assigning them huge penalties for leaving prior to the end of 2 year contracts 2.) sell “plans” which either provide excessive usage capacity (1400 minutes) or under capacity plans (700).  If you happen to have the misfortune of exceeding your minute usage then the cost per minute of usage goes up by a factor of 10 to 20.  Under a free market, prices must remain fairly liquid and transparent.  A free market economy would provide the ability for 1.) free transferance between services and 2.) more liquid pricing (i.e. 700, 800, 900, 1000…. etc.) minute plans.
  3. But perhaps the biggest example is that producers are not free to produce what they like and what they are best at.  How many producers and workers are employed at something they are both good at and enjoy?  How many workers have the freedom to take the day off to go look for another job?  How many folks have the freedom to change jobs and not worry about their health care benefits while they change jobs?  How many folks could balk at unreasonably low pay or poor working conditions in a serious enough way to affect a significant change in their working condition?  How many companies are producing top quality goods to meet an unmet demand…how many are producing goods simply to survive?

This is why I beleive that 1.) Credit card regulation 2.) Public option health care will provide a freer and more robust economy.  When the average consumer has choices then everybody prospers.

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Greentheo’s workout plan update

Wednesday, September 9th, 2009

workout

A few months ago I wrote about my plan for working out and getting healthy. It’s been about 2 monhts and I thought that I’d give you all an update about whether it’s been working or not.

First let me say that I’ve not followed my own advice that well. In fact I’d estimate that I only lived up to about 70% of what I called for in my workout, eating and living plan.

However, the one thing that I have done 100% well is allowed myself the freedom to not live up to my plan 100%. This has kept me involved, encouraged and continuing in my effort for progress.

Some stats:

  • Workout Plan Begin Date: June 2009
  • Current Date:  Sept 2009
  • Starting Weight: 194-196 lbs
  • Current Weight: 180-182 lbs
  • # of Times I’ve felt more hungry than usual: 0
  • Stress level June: Medium
  • Stress level now: Low
  • Overall Productivity June: Medium High
  • Overall Productivity Now: Medium Low
  • Workout Frequency June: 3 days/week
  • Workout Frequency Now: 2 days/week
  • Average workout Frequency over the last 2 months: ~1 day/week, ~1 hour per workout
  • Number of 14ers and difficult  hikes this summer: 4
  • Number of meals eaten from my garden: ~20
  • Number of pizza slices eaten in the last 2 weeks: ~15
  • Number of days walking or riding >2 miles:  3 days/week

Along with these stats I’d also like to report that for a period of 3 weeks I went to Costa Rica and didn’t purposefully excercise one time.  Also my non-fish meat consumption has dropped from 5 meals a week to <2 per week.  The prevalance of whole grain rice has increased  greatly and so has the amount of legumes.  Butter intake has increased and other dairy decreased.

So there you have it… I’ve lost about 15 pounds, have decreased stress but also have lost a bit of productivity which is likely due to my higher contentment with life[1].  Does my plan work?  I think it works for me.

  1. counter to intuition I beleive the happier one is, the less likely long and dedicated hours will be spent trying to get ahead… productivity therefore decreases slightly [↩]

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Greentheo’s green workout plan

Tuesday, June 30th, 2009

A major part of a healthy lifestyle is excersize.   But for every active and healthy person there is at least one excersize and diet philosophy.  I thought I’d contribute my healthy and ‘green’ lifestyle and exercise ideas as well for any who might be interested.

Quick Summary

Over the years I’ve done many different types of workouts.  I’ve spent hours in the weight room (oh come on, we all wanted humongo pecs at at the age of 15 right?), to hours at the dojo and quite a few team and singular sports including football, soccer and basketball.  However, the most effective work-out simply is:

  1. 2-3 hours a week of more intense intense excersize.
  2. Doing only those excersizes that your body (not your narcissistic brain) asks you to do.
  3. Eating those things which your body asks you to eat in order to feed it and energize it to adequate levels.

First things first…

Proper excersize will not be possible without a good diet.  Again let’s keep it simple and natural.  I recommend that the following diet be implimented immediately:

  1. Eat everything your body asks you to eat, no exceptions.  Try to think about it as little as possible.
  2. Okay one exception.  Eat as much USDA organic foods as possible… if you body wants chocolate, feed it organic rich happy chocolate and eat all you actually want… but no more than.  Want 2 plates of spaghetti for dinner?  Eat it… you’ll have a tremendous source of energy for your next workout.  Pizza… do it!  Just make it organic and high quality. Don’t even look at the label on the back it will only confuse your poor brain which in the end has very little on-the-fly analytic capabilities.  If we can’t even hold more than 7 to 9 digits in our minds easily why should we be able to analyze something as complex as all the nutrients we need and want?[1]
  3. For every non-water beverage you consume drink the equivalent amount in plain ol’ water.
  4. When hungry or thirsty, immediately drink a glass of water.

A workout guide

As with my guide to eating right let’s try to keep the workout philosophy simple too.

  1. Listen to your body.  If your body wants less exercise, rest it.  If it wants more, go a bit harder.   The main thing is to do what your body asks, not what your narcissistic and confused brain thinks it needs to do to be the Olympian/model/He-Man it desires to be.
  2. Too much time in the gym is inefficient.  Keep your overall excersize time at about 3 hours per week.
  3. 2 gym workouts per week and 1 playing workout[2] is plenty to keep strong and fit.
  4. Your “playing” workout should always be done with a friend.  It’s just much more fun that way and it builds a bond faster than most anything except well… “working out” with your spouse ;-)   ;-)
  5. For your gym workouts I suggest 1 hour workouts composed of 20 minutes of stretching, 20 minutes of intense cardio, and 20 minutes of upper body weight training.
  6. Stretching is so important it should be#1 on this list.  Always stretch, and always stretch each muscle group for 2 times as many seconds as your age.  Your joints and muscles will thank you when you get to the nursing home one day.
  7. Weight training should be done slowly with 1-2 minutes of rest in between sets, no more than 4 different weight training activities in your 20 minute period should be performed… 3 is ideal.
  8. No long distance running.  Your joints can’t take it.   I know a few long distance nuts who can barely walk these days.  And it’s not even that great of a workout in the end.
  9. If running is desired, try sprinting in the grass… and show some respect for the grass: take your shoes off.  Doesn’t that feel good?  Consider that sprinting 17 x 100 yard dashes at an average time of 15 seconds each sprint is like running a 4:15 mile … seriously … only Ethiopians and horses can run that fast.
  10. Enjoy your activity whatever it is.  If you don’t like it, try something else until you find something that excites you.  Currently I’m really excited about downhill mountain biking… I’ve rarely had so much fun or strength training for my calves and quads!

Last thoughts

When we listen to what our bodies want we will often be surprised by its desire for good things.   Working out and eating are no exception.   We were made to desire the good things of the earth and to enjoy recreation and liesure.  Go ahead… enjoy the good food, excercize and activities that God intended for you!

  1. And of course, feel free to go non-organic every now and then, McDonald’s is the devil but I swear it tastes like Heaven! [↩]
  2. soccer, basketball, hiking, biking, skiing, yoga, martial arts… it doesn’t really matter [↩]

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Posted in Green, Miscellaneous | 3 Comments »

What to Invest in?

Monday, April 20th, 2009

With all the economic mayhem happening these days you might be wondering… “where can I put my money so that it will”:

  • never lose 50% of it’s value over night
  • beat inflation and a little more
  • remain highly liquidatable in case of emergency
  • remain usable in case of apocalypse and total societal breakdown

The idea most people have in regard to savings and investment is to develop a security blanket.

The Chinese government is thinking the same thing as it pushes for a new super sovereign currency[1].

So I came across this article which says  to put your money in:

  • 25% in U.S. stocks, to provide a strong return during times of prosperity.
  • 25% in long-term U.S. Treasury bonds, which do well during prosperity and during deflation (but which do poorly during other economic cycles).
  • 25% in cash in order to hedge against periods of “tight money” or recession.
  • 25% in precious metals (gold, specifically) in order to provide protection during periods of inflation.

But I disagree… let’s look at the options.

U.S. Stocks

A diversified and broad selection of US stocks from the S&P 500 (the 500 largest companies in America) is a very safe and prosperous bet over the long term.  American companies have been and will continue to be some of the most innovative companies on the planet.  While some industries wane, others will wax.  Furthermore, the NYSE, NASDAQ and other trading arenas have some of the highest traffic, nearly guaranteeing a buyer for every seller.  My recommendation is to definitely put money in US stocks by purchasing index funds like the S&P 500 index.

The main advantages of US stocks is:

  1. Tracks with the US economy at large thus making the investment a hedge against inflation.
  2. A diversified portfolio does spread risk effectively.
  3. Stocks are not officially govt backed, but as we’ve seen… the larger the company the more likely subsidies and govt. protections will be involved.
  4. In booms and busts stocks can do well (Countrywide in the boom went way up, Netflix in the bust tripled).

To this I’d also like to add that European stock indexes are overall quite similar in advantage to the US.  Essentially, if the US and Europe can’t make it… nobody can.

Long Term Treasury Bonds

These are also very safe investments in the near and far term.  They are extremely safe (if the govt defaults on it’s loans then cashing out your bonds will be the least of your worries), and dependable.

But they have 2 very serious downsides.

  1. Buying a bond today for 30 years locks in an  interest rate.  Inflation may rise, but the interest rate wont.
  2. Many of the ‘worst case scenarios’ possible would render government bonds illiquid (same is mostly true for stocks).

Money Markets and ‘Cash’

Cash and money markets are extremely liquid.  They are not much more than a savings account with a low interest rate.  And even though they are extremely safe, like treasury bills they:

  1. Don’t protect against inflation
  2. Don’t have a very high growth rate
  3. Many of the ‘worst case scenarios’ would render the fiat money in the money market account nearly useless

Gold!

Perhaps the most misleading of investment vehicles is Gold.  It is a widely held belief that in times of great disaster gold or precious metals would be the only ’super-sovereign’ currency.  The belief is supported by the thought that humans assign inherent worth to gold.  They don’t!

Furthermore, it is believed that gold hedges against inflation.  Because of the first assumption, that gold is inherently worth something, we think that gold must track with inflation on a nearly 1:1 basis…. it doesn’t!

Thus gold has the following drawbacks:

  1. It doesn’t hedge against inflation:
  2. Most of the demand for Gold comes from Jewelry and for making into bouillon coins.  In bad times it will become an illiquid commodity.
  3. It’s growth is low on average.
  4. It’s easy to steal ($20k of gold is far easier to steal than $20k of stocks)
  5. In time of great chaos it doesn’t provide the function of a super-sovereign currency…real goods do[2].  Furthermore, if everyone used Gold as currency in the ‘bad-times’  rampant inflation would occur relative to the supply of gold in circulation… thus rendering moot the potential of Gold to serve as a currency.

Gold is perhaps one of the most worthless investments in the market unless you know something about the supply and demand cycle of Gold.

So What’s Left?

The following is a list of investments that I believe have the highest safety, return and hedge against inflation and Chaos.  It’s difficult to say what the % of your portfolio should be in each area… so no percent is given.

  1. U.S and European stocks are highly liquid, move with inflation but are not nuclear-apocalypse proof. A good place to put money.
  2. Housing Rental Income – barring a communist take over (and even with one), people need a place to live.  The income tracks with inflation, but can be depressed in a housing glut or in a very low interest rate time period.  Regardless, housing is the largest purchase that the average person can make.  It’s subsidized by the government in many ways and gives a large store of capital which appreciates with  inflation plus a little.  Add on to that the rents received over time and housing rental income can be a very good, safe and reliable investment.
  3. Education – the bulk of one’s lifetime wealth comes from wages.  It is well established that wage level is tied in with education level.  Plus learning thins like farming, mechanics, and carpentry could either give a little extra cash when needed or provide post-apocalypse survival skills.
  4. Family – Price of going to the nursing home for retirement… $50k/year.  Cost of living with a family you love and who loves you back until you die[3]… priceless.  Blood ties run thick and they’re worth having.
  5. Community/Friends/Civics – Nothing hedges against loneliness, hard times and even financial struggle than friends and a surrounding community.  By involving yourself in Civics you could also have a chance to set policies and change tax codes that directly affect your financial well being.  It only costs time.
  6. Land – As Lex Luther said in Super Man… they only thing they aren’t making any more of is land.  Rather than putting money into gold, put it into arable farm land.
  7. Religion – Hey, this life might not be all there is right?  Better find the truth about the metaphysical world… and supposing that God is an active and personal God then it might not be so bad to have him on your side no matter the circumstance.  I hear it can be good for your health too.

There you have it, the Greentheo plan to fail proof investments that do grow over time.

  1. China has been running enormous dollar surpluses to keep the yuan-dollar ratio low.  This keeps goods flowing to America and it’s economy growing more rapidly in the short term.  It also gave America extremely cheap credit. [↩]
  2. what do starving people need with Gold?  nothing… what they need is food and other “real goods” [↩]
  3. assuming you don’t annoy the Hell out of them in your crotchety old age [↩]

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Posted in Green | 3 Comments »

Marketing Psychology and the new Audi

Tuesday, April 7th, 2009

Have you seen the new Audi commercial? Watch the commercial below: (nope I’m not even getting paid to post it here)

[youtube]http://www.youtube.com/watch?v=l8MTpaBUCpc[/youtube]

I saw the commercial last night and it bothered me until this morning.

Then I put my finger on it.  The marketers do a great job of subtly telling you that only by buying their product will self-actualization be attained.  While for years marketers have been urging us to keep up with the Jones, I had never seen materialism so subtly and clearly expressed.

Here’s the subtext and buildup behind the advertisement which I saw playing during the Championship NCAA basketball game.

  1. It played during a time when many collegiately educated people are watching.
  2. Collegiately educated people generally have a higher disposable income.
  3. Collegiately educated people mainly work in office or ‘white collar’ or corporate jobs.  Large, corporations and group tend to strip people of their indivituating characteristics.
  4. All people desire to be unique, and loved for who they are.  This is self-actualization.
  5. Few people feel that they are really loved for who they are.
  6. As a culture we are shifting many of our values but one thing remains: individualism.

Thus this advertisement gathers a group of people who are by and large indistinguishable from each other at work,  at home,  education-wise and income-wise.  Many characterize this as the suburban lifestyle of ‘quiet desperation’ .

But enter the Audi SUV.  In reality the main distinction of the black Audi SUV and the gold generic SUV’s is it’s color.  But the text says it all… “Identity Theft”.  Contrapositively, the text might have said ‘Identity Protection’. The advertisement thus proposes to those without an identity (or those in danger of losing theirs) that an identity might be obtained or protected by owning the new Audi.  And so, in purchasing a new black Audi SUV, one remains part of the upper middle class pack but is now an individual.  One can remain educated, wealthy, and corporate, but now with a soul, an identity a self.

The Audi advertisement in short promises to restore selfhood to those who have lost all hope of being loved for who/what they are instead of what they own!   If you can’t be loved for your self, be loved for what you own!

Yes, it is understood then by the audience that being loved for who you are is a fool’s dream.  Only (poor, dirty, weird, lowly) hippies still believe in love!

It even goes so far as to insinuate that by owning an Audi one’s children will again love and respect their parents.  The children exiting the school are bewildered and perhaps angry at their parents for failing to differentiate themselves materially.  But not little Johnny who fortunately has a ‘cool’ dad!

The truth is that by next year, the identity brought about by the new Audi is quite easy to steal.  A new identity will have to be found sooner or later.

I forgot how smart those marketers can be!

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Posted in Green, Miscellaneous, Philosophy | 2 Comments »

What has American done lately?

Friday, April 3rd, 2009

In a discussion of the economy with my Dad recently he asked me a simple question which I was unable to come up with much of answer.

As we think/worry/pray about the economy ask yourself:

In the last 30 years, what has America achieved that has been really remarkable and noteworthy??

In the 1940’s it was the defeat of Nazi Germany and the Nuclear bomb.

In the 1950’s and 1960’s it was going to the moon and back.

Through the 1970’s we had heart transplants, aritificial organs (like hearts), the development of the microprocessor, and the internet[1].

With that question there is another question:

What do we Americans wish to achieve that is really remarkable and noteworthy in the next 50 years?

In my opinion if we don’t work to reshape our economy into one that produces truly remarkable things (instead of get rich quick financial derivatives and personal services to the wealthy of the world) then the history books will show that America peaked 40 years ago and steadily declined.

Let’s not let America go down in history as a could have been.

[note:  I'm not saying that we don't already do many good things... much science, medical research and computer research is really good... but I'm talking about truley great, new and remarkable things]

  1. Technically the internet was developed by DARPA prior to it’s public launch in the late 80’s early 90’s [↩]

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The Post Capitalist Economy

Thursday, January 29th, 2009

Not every bit of news about the current ‘economic climate’ is all that bad.  Consider the proposition that we are entering a post capitalist economy.  What could be so bad about the empowerment of the average citizen and the downfall of the robber barons that have ruled for so long?  Here’s why I believe the day of the capitalist ruler may be coming to an end (for now at least).

Traditionally there have been 3 costs for doing business:

  1. Research and Development – the cost of developing the first of a new technology or product.  Traditionally, R&D is done by scientists and engineers.  Several prototypes would be created and tested in the real world.  But as computers have gotten cheaper (very nearly free these days), simulations have replaced trial and error experimentation.  It is now possible to run through millions of versions of the product before even a single physical prototype is made.  Advances in statistics, AI, and computer science along with open sourcing and crowd sourcing are quickly dropping the time and cost involved for birthing an idea into the world.
  2. Manufacture/Raw goods – this is the actual cost of the inputs for the product including labor, raw materials, and energy required to shape those raw materials.   Traditionally humans were used in all of the stages of production.  From digging up the coal and metals to chopping down and hewing the trees to pounding the rivets and welding the metal, humans did everything.  But humans are not machines.  Humans are living, thinking and creating beings.  With the advent of cheap energy and increasingly intelligent machinery one man can now do the job of 100 men (probably more).   If we continue our progress towards free energy and intelligent machinery, manufacturing will become virtually free.
  3. Transaction Cost -   the cost of matching up the product with a buyer.  Traditionally this cost has been prohibitive for the average home business / individual producer.  In fact, in order to overcome the high cost of finding a buyer for the widget one had to gather the capital required to first oduce the good at the cheapest price and then to reach the largest audience possible[1]. But the transaction cost is dropping more and more as the tools to reach the exact buyer (e.g. Google) are being developed.  The internet and home PC has quickly been revolutionizing the way buyers and sellers complete their exchange of goods.

Amongst other things the sharp decline in the cost of doing business is the reason why the economy is currently faultering… or rather it is shifting.  It’s faultering for the outdated and outmoded companies that have failed to transition to a faster, more agile and flexible market, a market easier for small businesses to thrive in.

Whereas GMC needs loans of billions to stay afloat, specialty electric car company Tesla has a back order of hundreds of cars.  Whereas Lehman Brothers and AIG are collapsing under their own weight, Paypal, community lending sites and internet banks like ING are thriving.   The New York Times and similar news papers are folding across the nation, but there have never been so many journalists (bloggers are journalists too right?).

Even scientists who have previously been restricted to working only for governments and corporations wealthy enough to afford the hundreds of thousands of dollars of computational and laboratory equipment can start their own enterprise with Amazon’s EC2 and the latest ‘labs on a chip’.  If the business model is correct, the scientist could potentially scale his company over night, especially with services like Amazon’s EC2 computational time sharing service.

It is in this business climate that the behemoths are starting to fall.  They’re not quick enough, and their products are not good enough.  For too long they’ve relied on the muscled advantage that large amounts of capital brought them.  Now as the barriers to entry lower, and more competition arises the only outcome can be cheaper better goods produced exactly for those who want/need them.  In other words, this downfall indicates that we are moving towards a more open and efficient market (the downfall also indicates that massive greed and corruption can in fact bankrupt an industry).

And that’s great news, unless, of course, you are a robber baron!

  1. Seth Godin calls this the ‘average product for the average person’ way of business [↩]

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Posted in Entrepreneurship, Miscellaneous, Utopian Politic | 3 Comments »

Linux = Silvio Gessel in Action

Monday, December 15th, 2008

Silvio Gesell was an economist concerned with the prosperity of the working class. Unlike Karl Marx,  Gesell did not believe in taking back the capital resources from the rich by force. Gesell instead believed that the capital of the wealthy was only valuable because it was in limited supply.  Therefore empowering the working masses could be achieved simply by producing surplus capital.  Surplus capital drives down the demand for capital, and as demand drops so too does price.  As price drops and demand drops, interest and rent on that capital drops.

For instance, rent is high on houses because there are a limited supply of houses.  If one can control a large amount of houses in a limited supply market, he can set the price for rent as he wishes.  Karl Marx proposed to take the property back from the landlords and return it to the people.  In Eastern Europe and Russia this socialization of capital was achieved, but with disastrous consequences: nobody aspired to be a landlord; nobody wanted to take responsibility for the upkeep and maintenance of housing.  When profit is decoupled from individual

Under Gesell, the better solution would be for the working class to unite, pitch in, and build a hundred new houses such that the overall rent market either could not be controlled or had excess capacity[1].  In a housing glut rent drops to zero, freeing up a significant portion of worker’s wages to be used elsewhere.

Money can also be considered capital.  Under Karl Marx it is the job of the government is to redistribute wealth from the rich to the poor.  Money in this case is seen as a limited supply good.  Under Gesell, no redistribution is necessary.  The government simply taxes or devalues money (not wealth) periodically so that it is not worth hoarding.   Money must be spent or invested in order to obtain value.  Under Gesell the supply for money in circulation increases drastically, and interest rates must go down.  As interest rates go down general prosperity increases and the divide between the rich and poor decreases.

At the beginning of the 21st century we are now facing many challenges similar to the beginning of the 20th century.  Capital is in short supply, lending rates are low, and there is a sense of general panic in the market.  But, there is a bright spot in the economy which can’t be ignored: open source.

In the 1970s and 80s as computer programming was becoming more and more popular and accessible to the masses, a movement was started to provide hobbyists, academics, and enthusiasts with free software.  These innovative thinkers were responding to a perceived threat by the capitalists to their hobby and passion: computer programming.

At the time, a UNIX operating system computer cost around $10,000.  Hardly anybody could afford to buy a personal computer.  And so the free software foundation was started.  Today the largest legacy of the free software foundation is GNU.  At the same time Linus Torvalds created a UNIX like operating system which is now known as Linux.  Linux and the GNU software were given away completely free with the only restriction being that one could not capitalize on the it[2].  The price of the same system running Linux dropped by 80% to an affordable $2,000.  Today more than 12% of the commercial server market runs Linux, while an undoubtedly large percent of the non-commerical server market prefers Linux to the main alternative Windows Server.[3].

Over the last 20 years Linux has attracted millions of computer programmer-hours… all for free.  Many of these programmers collect a wage from installing and maintaining the software for a client, but they don’t make capital gains on the software.   This has allowed hundreds of thousands of workers to make a fair wage.[4]

In contrast Microsoft has kept their software closed, and therefore capitalized.  While its thousands of workers do make a fair wage, the real gain of Microsoft resides in the 1% of the company that benefits from the capitalization.  Furthermore the cost of Microsoft Windows is high enough that it excludes potential participants in a business that requires numerous licenses of Microsoft Windows from entering the market.

Aside from Linux, there are thousands if not millions of open-source software packages providing many of the daily services that an increasing number of people use.

The open source movement is not limited to software.  Imagine an economy where even jobs like engineering, teaching, construction, architecture and even restauranteering are open source, where those who most want to participate can contribute in the ways in which they are most skilled.  20 years ago few thought Open Source software engineering could ever be a profitable business model for anybody.  Now a very large portion of businesses rely on the Open Source software model to make it at all.

Open Sourcing and decapitalizing large pieces of our economy would truly be democracy in action at an unprecedented scale and it would provide prosperity such as we’ve not seen before for the average and lower class Americans whos main source of income is wages.

Go Linux!

  1. it’s not that they give the houses away necessarily but perhaps they build them Amish style, a prerequisite for living in the community is to help raise barns or houses [↩]
  2. without making significant modifications of their own [↩]
  3. http://en.wikipedia.org/wiki/Linux#Market_share_and_uptake [↩]
  4. It should be noted that some Linux companies do make a capital gain on their modified versions of Linux, though the free price of a nearly equivalent Linux package keeps their overall profit down. [↩]

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Posted in Entrepreneurship, Green, Philosophy | No Comments »

Working from Home

Wednesday, December 10th, 2008

Having worked at home for the last 8 months or so I thought I’d give my top 10 reasons to work at home.

  • The daily commute is about as good as it gets.  From my bed to the kitchen (for coffee) to the office my total commute is about 50 steps.
  •  Really great coworkers.  My two dogs Tommy and Nelly are always there for moral support. Few coworkers will ever be as cheerful and carefree as two young black labs.
  •  I can wear fuzzy slippers and no one will give me a speech (or dirty look) about unprofessionalism.  For the record I have regular and not fuzzy slippers.
  •  Productivity.  It really has increased.  Without having to check on hundreds of emails, or attend hours of phone or in person meetings my productivity has drastically increased. It’s possible to increase productivity at the office by taking control of your schedule and placing limits on email checking … but it wont be easy…
  • The view.  I used to work in a semi-dungeon.  It would have been decades before I got a window.  Now I get plenty of sunshine throughout the day, and a tax break that goes along with the fact that it’s in my spare bedroom.
  • No politicking.  Being judged strictly on results is rare and refreshing.  Tommy and Nelly only know how to politic to see who gets to be pet first … also a plus.
  • Lunch with my wife.  I get to eat lunch with her just about everyday now for about 30 minutes.  I also don’t have to go out for lunch or pack a lunch anymore.  It’s surprising how much time/productivity/cost this saves/increases/decreases.
  • Ability to multitask with thinking and small chores at the same time.   A surprising amount of key insights in my work lately have been achieved while doing the dishes, plucking weeds or going to Vitamin Cottage.
  • Living locally, Living Green.  I can now walk almost everywhere that I need to go on a daily basis.  Freedom is not just the ability to “roam about the country”, but also the ability to stay exactly where you are.
  • Freedom.  As long as the bills are paid (i.e. the obligations of the contracts you work on) you really are free to work on the jobs you want to work on, the way you want to work on them, with the schedule that you desire (as long as it doesn’t negate the contract).  You are also free to choose your own insurance, your own vacation time (subject to paying your bills of course), your own equipment and most of your coworkers.  What’s better than working at home?  Working in that foreign country you’ve always wanted to live in but never had the cash or courage to do so.  What’s better than quitting your job?  Quitting a small portion of your job and finding another contract to replace it without suffering a monumental shortfall in income (make sure you have an escape clause in your contract!).

As an addendum to my list I would also like to point out that the number 1 reason most people do not work from home, or for themselves (as a contractor, consultant or entrepreneur) is fear: fear of failure and fear of the risk of unemployment or varied employment.

However, in the last 8 months since leaving Google two conclusions have been solidified for me:

  1. Mathematically you are far less likely to suffer a catastrophic loss with a diversified portfolio of income.  For example, working 4 contracts is far less likely to result in the loss of all 4 contracts at one time than working 1 full time job is to result in being laid off.  Self-employed diversified income is usually more variable, but long term it is far more dependable.
  2. In the United States all employment is ‘at will’, mostly meaning at the will of the employer.  You may leave your job any time you wish, but more importantly your employer may ask you to leave at any time.  When it suits the company they will have absolutely no loyalty to you no matter what you’ve done or how much time you’ve put in.

Here’s to freedom for the working class!

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Federal Reserve and govt hard at work concentrating power into the Hands of the wealthy…part 2

Friday, September 26th, 2008

Awhile back I wrote about how the Federal Reserve is busy concentrating power in the hands of the wealthy.  Then WildDerrick wrote about how the govt. was taking over Fannie Mae and Freddie Mac.  I responded with a post on how powerful the Federal Reserve really was.

bankers.jpg

Now if you’re a quasi political participant like myself you may or may not have noticed that President Bush recently proposed a bill giving the government the authority to purchase 700 billion USD in subprime mortgage loans from the largest banks which are likely to collapse otherwise.  As I understand it, there will not even be any stipulations on that money.  It is more or less a blank check to the faultering banking industry.

Aside from the fact that such a bailout is plainly and obviously wrong, unfair and unjust it is further evidence that if we don’t watch out the federal government and the federal reserve [which is not part of the government, but is in fact a privately chartered bank) will even further concentrate the wealth of this country into the hands of the ultra-wealthy.

In the most likely scenario a 700 Billion USD buy out of rotten subprime mortgages will play out as follows:

  1. Bad mortgage securities bought by some extension of the govt. in the amount of 700 Billion USD.  The banking industry doesn't learn from their mistakes, and is allowed to continue on without cleaning out the dirty corners of their business[1].  They understand now that risk is spread out amongst the citizens of the US[2] while the financial gains are simply theirs to keep.
  2. A few years later, those securities will be auctioned off on the market.   Managing thousands of homes is not in the interest of the govt, it would simply be too expensive.
  3. The glut of houses for sale will only be able to be purchased in cash as houses at auctions almost always are.
  4. The only ones with large amounts of cash[3] are the ultra-wealthy who will pick up the mortgages and the houses for pennies on the dollar, perhaps as little as 30-50% of what they are really worth.
  5. A few years later those same houses will likely be flipped back around for their true value, albeit less than 2007’s inflated prices.
  6. The wealthiest folks, like Warren Buffet, will have now aggregated even more wealth under their belts.

What can we do about it?  Write to your congressman (yes it’s still possible) and tell him to vote no on this bill.  If he/she votes yes, simply refuse to vote for him in the future.

It’s time we hard working citizens and taxpayers refused to be the risk reducers for the ultra-wealthy.

Links (Thanks Nathan):

Dave Ramsey’s synopsis http://www.daveramsey.com/etc/fed_bailout/economic_cleanup_10887.htmlc

How you can write your senator:  http://www.senate.gov/general/contact_information/senators_cfm.cfm

update:  At today’s T-bill rate of 4.4% (20 years) the total cost of a 700 billion dollar bailout would be about 1.67 trillion USD.  This averages out to be about $16k per household in the US.

  1. as Nathan says, they won’t even have to miss any of their yacht payments [↩]
  2. 700 billion USD = 2k USD per man woman and child in the US, or more about $300,000 per tax payer according to Dave Ramsey [↩]
  3. like Warren Buffet who is one of the few wealthy enough to insure insurance companies against catastrophic loss [↩]

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Posted in Entrepreneurship, Green, Utopian Politic | 5 Comments »