Category: Big Thoughts

The Cold Equations, 1973, Alice Cooper, and Government Debt

“We’re doing him a huge favor!  And do you realize how extreme this is to go from no debt to good old fashioned American debt? That’s the way to do it. Plus, I’ve been envisioning someone else paying for this thing the entire time.” – It’s Always Sunny in Philadelphia

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This was before a hurricane in Houston, almost all the shelves were bare.  Not the last hurricane.  So, after the Apocalypse?  You can still get food from Weight Watchers®.

This is the first post . . . the second post in this series is here (LINK).

The Cold Equations is a short story (you can find it here and read for free (LINK) on .pdf so you should read it today) that I remember reading as a young lad up on Wilder Mountain.  I think I read it in an old, moldy paperback from the Junior High library on a long bus trip.

The story sets up a moral choice, and a tough one.  But don’t we face those every day?  Don’t we look at the short term, the now, and not realize there are vast implications for our future actions?  Like if I eat all the PEZ® now, there’ll be none left for later?

I’m guilty of not looking at the big picture, too.

When I think about personal finance, most of the time what I’m thinking about are smaller strategies:  what mix of bonds and stocks should I have?  Index funds or mutual funds?  Managed funds?  How much of my net worth in real estate?  How much car should I buy?  Do I really need the signed Battlestar Galactica helmet?  (Answer:  YES!!!!)

And these are meaningful questions, and really have been the most meaningful questions for essentially all of my life:  these were the right questions to ask.  And, even though the economy has had ups and downs, for the most part, we’re like ships in pretty calm water.  Storm from time to time?  Sure.  But we’ve never see a hurricane.

Outside of technology (which I’ve discussed here (LINK) and which I will likely revisit soon) probably the two biggest factors in determining your personal financial future are government debt, which we’ll discuss in this post, and future payments that governments must make, which we’ll discuss next Wednesday.  I was originally going to discuss it today, but like government debt, this post got bigger faster than I was expecting.

Government Debt and Why 1973 is Important:

I’m picking a start date for my look into government debt as 1973.  In my opinion 1973 was a pretty big year for debt.  Before 1971, if a country, say, France, had a $100,000,000 in dollars, they could back up the semi and trade those dollars for gold at $35 per ounce.

This really happened.  France decided that they had a lot of dollars, but they decided that they liked gold even more.  So, like a kid at the arcade with 5,000 Skee-Ball® tickets, they brought all of their dollars up to the counter and asked for gold.  And a gummy eraser.  And a set of the glasses with the nose and fake mustache.

Nixon decided he liked his gold more than he liked France, so put out an emergency order that the Skee-Ball© window was closed, and that France could keep their tickets.  This set in a chain of events that determined just how many dollars could even exist . . . .

In 1972, Nixon ordered that the dollar be devalued from $35 per ounce of gold to $38 per ounce of gold.  I’m not sure anyone listened because we’d stopped converting dollars to gold.  And, in 1973 the decision was made to allow normal American citizens to own gold, something that President Roosevelt had made illegal in 1933.  The gold/dollar link was severed, so the US could print as many dollars as they chose.

(Roosevelt had confiscated all of the gold coins and bullion in the hands of Americans in 1933 at the price of $20.67 per ounce and made it illegal for Americans to own gold.  After he had all the gold?  He said it was worth $35 per ounce.  Nifty way to make an instant 70% profit, if you’re the government.  If you or I did that, they would just compare us unfavorably to Bernie Madoff.  And that’s just the hair!)

So, I picked 1973, because that approximates the date when the US dollar was completely free of any constraints put on it by a gold standard.  And also, coincidently when Alice Cooper released his classic album Billion Dollar Babies.  Or is it really a coincidence?  Regardless, my choice of 1973 as a starting point isn’t arbitrary.

billion dollar babies

A fine album – you should buy six or so.  Album Picture via Wikimedia – © believed to be with Warner Music.

DANGER:  FALLING DOLLARS AND GRAPHS AHEAD

In the graph below, I’ve listed the Debt of the United States over the years since 1973.  I first converted the annual figures into 2017 dollars using magic the Bureau of Labor Statistics website, so we don’t have to worry about pesky inflation in this graph.  H/T to The Balance (LINK) for pointing to all the appropriate websites for the data.

basedebt

When I first started inputting the data, I was surprised at how familiar the shape of the curve of the debt was – and when I tried a fit of the data to an exponential curve it matched very nicely.  You can see it on the graph.  The exponential curve is a pretty standard formulation.  I’m not going to get all mathy, but the R2 =0.97 shows that a large amount of the variation you’d expect to see is explained by the curve that’s fit to it.  An R2 =1.0 is perfect.  Thanks, Excel®!  More on the curve fit later.

The dashed line represents the ratio of the national debt (how much the US owes as a country) divided by the Gross Domestic Product (how much the country produces in a year, both goods and services).  It uses the right side scale, so you can see that now the national debt is more money than all the goods and services the United States produces in a year are worth.

Hmm.  Oddly, Japan leads the list of countries that have a high debt to GDP ratio, primarily because no matter what the government does, the citizens just won’t take on debt, so government takes it on for them, in order to fund more comic books, vending machines, and seven-eyed fish.

Perennial economic basketcases Greece, Lebanon, and Italy have higher debt to GDP ratios than the US, but the United States is 12th out of 100 or so on a list where you really don’t want to be at the top.  Admittedly, most of the countries on the bottom of the list don’t actually use money, but rather trade goats for transistor radios and nine-volt batteries so they can listen to 1970’s disco music, which is all the rage now.

But let’s get back to the overall debt.  If it is a good fit for the past, I can try to use that same curve to project 10 or 20 years into the future, as I did in the graph below:

Debtintofuture

If the projection holds, in 2027 the debt will be above $30 Trillion dollars.  That’s $30,000,000,000,000.  Some people work a whole year and don’t make that much money!  And in 2037, the debt will be a little higher at $55 trillion dollars.  But those are 2017 dollars, and we live in world where inflation exists.  Here’s that graph:

debtplusinflation

This graph shows we’ll be facing a debt of $55 TRILLION dollars in ten years, and a tidy $135 TRILLION in twenty years.

For grins, I deleted the last 10 years of data, back to 2006, from the projection from the inflation adjusted numbers.  Result?  It projected the current level of US debt almost exactly.  That equation seems pretty accurate:  it’s good at predicting the future.

But when I deleted 10 years’ worth of data from the graph where inflation exists?  Yikes!  It would have projected a current debt of about $28 trillion versus the $20-ish trillion we’re at right now.

The last ten years have produced inflation that is very low, and interest rates that are at all time historic lows (like all of recorded history low).  Both the low inflation and low interest rates have acted to keep the debt much lower than it would normally be.  This tells me our debt is very sensitive to inflationary swings (as a first year economics student would figure out and give me a resounding “duh” after thwaping me in the forehead).  The ultimate rate of inflation will eventually determine the final shape of the debt’s growth, but we can get to the right range with these estimates.

The Cold Equations don’t lie.

I don’t know about you, but these numbers seem . . . impossibly large.  And large in such a fashion that I can’t really see how the system can work.  Ben Stein’s dad was famous for saying, “If something can’t continue forever, it won’t.”  Interest on that $55 trillion in ten years or so at 5% would be 70% of today’s entire federal budget, for just one year.

This is Ben Stein.  Anyone, anyone feel like getting me a beer?

The interesting thing to me is that everyone thinks that there is a choice involved, and that every aspect of the current system in the United States isn’t baked into that equation.  But I tested the equation with data from before the housing crash.  With data from before Obama.  Hate to tell everyone, but we could have elected John McCain or a bowl of quivering strawberry Jell-O® (but I repeat myself) as president for the last eight years and we would be in exactly the same place.  It’s not parties, it’s not individuals.  It’s the system.

And what are the consequences of trying to stop?

$1.1 trillion was added to the debt in the government fiscal year ending in 2016.  This amounted to around 5% of US GDP.  US GDP grew by less than 2% that year.  Remove the deficit?  The US economy shrinks by 3% in that year.

The “Great Recession” saw the economy contract 5.1%.

So, yes, addiction to government debt is bad.  The only thing keeping the country out of recession is adding more debt.  But the Cold Equations indicate that exponential growth can’t continue forever.

The Part Where Wilder Answers His Own Question

So, why does this continue now?  Why doesn’t somebody jump out in front of the speeding train and yell, “Stop!”  (I think I answered my own question there.)

It’s convenient.  The United States creates dollars out of either paper or electrons, and then ships them halfway across the world to buy something real, like a car, underwear for Johnny Depp, or a barrel of oil.  They take our made-up dollars as payment, and ship us the stuff.  Then they take the dollars and recycle them into our system and buy the debt through Treasury Notes and Bills.  If that’s not a tax, I’m not sure what is.  It’s really an awesome deal if you’re the United States.

Eventually someone will create a currency or mechanism to compete with the dollar.  China is desperately trying (LINK) having created a mechanism to trade oil not in terms of dollars, but in terms of gold.

Will that system take down the dollar?  Likely not.  The sheer size and psychological trust the dollar has accumulated over the past hundred and fifty years won’t go away with just one alternative Afghan (the people not the blanket) herdsmen trade actual dollar bills.  In Zimbabwe when they turned their currency into the equivalent of a mathematical joke, they traded US dollars to actually buy stuff.  And inertia plays a big part.  You don’t tear down Rome in one day, week, or month.  And, as the Romans showed (LINK) a strong army goes a long, long way to having whatever you say is money be accepted.

The second thing that keeps this system going:

It’s that the system has evolved to grow continually.  Jerry Pournelle (who may have been the architect that brought down the entire Soviet Union while writing entertaining science fiction), (1933-2017) described it well in his Iron Law:

Pournelle’s Iron Law of Bureaucracy states that in any bureaucratic organization there will be two kinds of people”:

First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration.

Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers’ union officials, much of the NASA headquarters staff, etc.

The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.

This is why NASA can’t launch spaceships, the Department of Education doesn’t teach, and the Department of Energy doesn’t produce power.  It’s not that these bureaucrats are bad people, they’re simply focused on personal preservation – they want to have a job until they retire, and enough petty power to make them feel that they’re important.  The best way to ensure that is to surround themselves with a staff of fifty.  And all of this is in harmony with the equation.

If you notice, both sides pick things to fund, and both sides will defend the other side’s projects to the death.  Republicans complain about Obamacare, and then add more funding.  Democrats complain about the military, and then add more funding.  Each side is careful to preserve the one thing that Washington is good at . . . spending.

What’s the favorite baby in Washington?  Billion Dollar Babies!

But I feel that the Cold Equations will point to a place where this cannot last.  And when you violate the Equations?  Your choices dwindle . . . to zero.

The Fermi Paradox, or, Is There Life In Other Fridges?

“Morty, there’s nothing dishonest about what we’re doing.  Now slap on these antennae.  These people need to think we’re aliens.” – Rick and Morty

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What an alien might look like.  Perhaps a bit too subtle in the orange suit?

“Where is everybody?”

That’s the simple question that Enrico Fermi asked at lunch in 1950 at the Los Alamos National Laboratory.  Everybody laughed, because on the walk to lunch, these eminent physicists (Edward Teller, father of the hydrogen bomb was one) had been talking about UFOs, and his comment a half hour later seemed to capture the idea that all of them had.  To my knowledge, none of these eminent men (except for Teller) lived in Mom’s basement or wore tinfoil underwear to bed, so it was a serious question asked by seriously smart dudes:

Where are the aliens?

Eventually this question became the foundation for what’s known today as the “Fermi Paradox.”  Stated simply, the Fermi Paradox says:

  1. The galaxy has been around for billions of years so,
  2. It’s unlikely that we’re the first civilization,
  3. A civilization should be able to move across a galaxy in millions of years, so
  4. Why don’t we hear them or see them? Why aren’t they in our solar system?  Is the food that bad here?

Thankfully, a large number of people (some of whom also live in their Mom’s basement) have spent a lot of time thinking about this.  Per Wikipedia (LINK), here are the best answers:

  • Extraterrestrial life is rare or non-existent: This is the first explanation.  But it’s lame.  Really lame.  Everywhere we look in interstellar space, we see signs of chemicals that are clearly precursors to life.  And life showed up pretty quickly on Earth, and perhaps even earlier on Mars.  I don’t buy this one.  If you’ve seen the inside of my fridge, you know that life is everywhere.
  • No other intelligent species have arisen: I have to give this one a possibility.  As far as we know, intelligent, tool making life has existed only for 0.01% of the lifetime of the planet.  That’s not a lot of time.  Could it be that intelligence beyond a certain point actually results in an evolutionary disadvantage?  Maybe all the intelligent lizard-people were eaten by Tyrannosaurus Rex while arguing that the means of production should be shared by all dinosaurs, and that T. Rex was a greedy member of the 1%?

From XKCD.

  •  Intelligent alien species lack advanced technology: I can see lots of ways this could be.  A planet with low metal content so no circuits.  It’s pretty hard to build a bamboo radio telescope that works.  For that you also need kelp, and an electric eel.
  • It is the nature of intelligent life to destroy itself: Are you talkin’ to me?  Hmm?  Well, I’m the only one here.  I thought so.  I looked up the main causes of death in the world in 2015.  People killing people was not in the top 10.  So, while it might be fun to beat up on yourself and on how bad humanity is, that’s simply not the case.  Mankind rocks.
  • It is the nature of intelligent life to destroy others:   With a sample size of zero, it’s hard to say one way or another.  Even a small number of alien species bent on destruction of all other species would be significant.  But wouldn’t we have seen a sign of that, like a big moon gun shooting at us?
  • Periodic extinction by natural events: It’s undeniable that happens here on Earth.   There have been five mass extinctions, with the most recent being 65,000,000 years ago, which is longer than many people live, so you might not remember it.  It’s the one that killed all the dinosaurs, remember them?
  • Inflation hypothesis and the youngness argument: This one is bogus.  Even the author (Future Nobel Prize Winner Dr. Alan Guth) argues that in his paper (LINK).  I don’t suggest you read it, since he gives away all the spoilers in the Abstract.  The relevant quote about the Fermi Paradox is:

Thus, if we know only that we are living in a pocket universe that satisfies Eq. (12), it is extremely improbable that it also satisfies Eq. (13). We would conclude, therefore, that it is extraordinarily improbable that there is a civilization in our pocket universe that is at least 1 second more advanced than we are. Perhaps this argument explains why SETI has not found any signals from alien civilizations, but I find it more plausible that it is merely a symptom that the synchronous gauge probability distribution is not the right one.

Translation:  This result makes no sense.

  • Intelligent civilizations are too far apart in space or time: Yes, but they can cross the entire galaxy in a few million years.  Unless no civilization ever does this, we should see something.  An interstellar Outback® or Jimmie Johns™ on Mars.  Something.  I’m calling this unlikely.
  • It is too expensive to spread physically throughout the galaxy:   Time is on your side, and something like a self-replicating robot could easily get through the galaxy in a million years and spend time creating “My Robot Went to Cygnus X-1 and Only Got Me This Lousy T-Shirt” t-shirts for the inevitable tourist trade.  This is nearly within our ability, so, unlikely.
  • Human beings have not listened long enough: This is a good point.  We’ve only been able to listen for the last 80 years or so, and most of the time we weren’t listening.  Unless the aliens bought commercial air time during the Super Bowl®, they could have been broadcasting instructions on how to build an interstellar drive for a space ship or how to make creamy PEZ® and we would never have heard.
  • We are not listening properly: My first grade teacher accused me of this.  In writing.  On my report card.  “Johnny likes to talk and can’t sit still.”  That’s because I was a boy, silly.  That’s on the warning label, along with the bruises, cuts, and torn jeans.  But back to aliens.  We listen on the radio spectrum, mostly.  And mostly on a particular spectrum, as defined by the Search for ExtraTerrestrial Intelligence (SETI) Institute’s website (below).  What if that’s just a convenient place to look, and not the one aliens have settled on?  What if they use lasers, or the even more potent laser/shark method?  What if they text?  What if they use fundamentally different timescales (much slower or faster)?  This is likely, in my opinion.

For interstellar communication, a particular range of radio frequencies, “microwaves” from 1 GHz to 10 GHz, are particularly good choices.  At lower frequencies our galaxy emits prodigious amounts of radio waves creating a loud background of noise.  At higher frequencies the Earth’s atmosphere, and presumably the atmosphere of other Earth-like planets, absorbs and emits broad ranges of radio frequencies.  The result is a quiet “Microwave Window” through which efficient radio communication is possible.

From XKCD

  • Civilizations broadcast detectable radio signals only for a brief period of time: This was (kinda) my theory in 2000 when I emailed Frank Drake (LINK) and asked him – (his equation-The Drake Equation-is used to estimate the number of civilizations communicating in the galaxy).  In short, my hypothesis was that civilizations must have sufficient excess energy to spend the time and effort to broadcast to space and to listen for signals from space, and that having that excess energy from (like us) hydrocarbons like oil and natural gas and coal only last for a while.  And fusion is hard, and fission has waste problems.  A related post of mine is here (LINK).  Drake responded, and, sadly, that email account is no longer or I’d quote the response.  In one word, his answer was, “maybe.”  The other concept is that civilizations are “noisy” for a while until they learn to move on from high powered radio to lots of smaller low-power radios.  Earth has gotten a lot quieter since the 1970’s.

From XKCD

  •  They tend to isolate themselves: It could be that the alien species are all introverts that like spending time in their room listening to music, or standing in the corner at a party until they sneak out and go home and hit the Playstation®.
  • They are too alien: Aliens might be so different than us that we cannot mutually communicate – ever.  It would be like meeting a civilization composed entirely of ex-wives (or ex-husbands, your choice).  Hey, maybe that was why they called it the eX-Files®?
  • Everyone is listening, no one is transmitting: Like us.  We’re not actively sending signals out, or at least not very often.  If someone did hear us, they’d look back to see if there was a signal, and they wouldn’t find a thing.
  • Earth is deliberately not contacted (zoo): We’re like the hippos in the zoo.  People look, but you’re not supposed to disturb the display.  Oh, look what happens when you throw a hurricane at them!  Silly people!  Possible, but seems like a lot of work.
  • Earth is purposely isolated (prank): Let’s take a civilization, and make it look like nothing’s going on outside their solar system (snicker).  And let’s magic marker their face.  Seems very unlikely, and way too much effort.
  • It is dangerous to communicate: Maybe everybody looks out and says . . . “Where is everyone?”  Since there’s no good answer, they assume everyone before them got smashed by . . . something out there.  So, they shut up.  Maybe?  It’s what Hawking is suggesting as our best strategy now.
  • The Simulation Theory: We live in a simulation, and they didn’t program in any aliens.  Very possible.  Our current level of technology could almost produce a realistic simulation, so it’s not too far off to expect that another million years of tech advancement would produce not only SuperUber with cabs that all driven by clones of NFL® legend Howie Long, but the ability to live your entire life in your Mom’s basement in a virtual reality.  And we’re all non-player characters.
  • They are here undetected: They’re sneaky, and are all over, like tourists, and we just don’t know it.  Some silly Prime Directive or something.  I believe this is unlikely, because Kirk always ignored the Prime Directive whenever it was even remotely convenient.
  • They are here unacknowledged: This is the true X-Files® X-Planation.  Government knows.  SETI™ knows.  Nobody will tell us.  This is one of the most popular with the tinfoil-wearing basement dwellers.  It’s solidly possible.  Blue Oyster Cult certainly thinks so:

1980’s at its best:  men in black, bad special effects, girls in furs, weird beards, and Flight 19 references.

What about . . . we are the aliens?  If you look at life . . . it’s got great computational power.  It’s got amazing resiliency to everything from meteor bombardment to super volcanos.  It has amazing memory storage capacity (think the amount of info in DNA alone).  It’s complex, but resilient.  Perhaps the galaxy has been seeded, with us and the things that live in my fridge.  And we’re the replicating critters that are supposed to send copies out into the cosmos.

When we manage to get out of Mom’s basement.

 

Warren Buffett’s Investing Secrets, F-Troop, and Amazing Bigfoot Investments

“Well if there were no Gods then anyone can do anything and nothing will matter.  You could do as you like and nothing would be real.  Nothing would have meaning, or value.  So even if the Gods don’t exist, it still necessary to have them.” – Vikings

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Even Bigfoot appreciates the climate in Margaritaville.

It was reported (quite a while ago) that Jimmy Buffett of “Margaritaville” fame and Warren Buffett of “Having All the Money” fame were related.  However in 2007 they spit into a tube (well, separate tubes, one tube would be gross) and had their DNA tested.  The results showed that if they were related, it was more than 10,000 years in the past, as Warren Buffett was related to Scandinavians and either Iberians or Estonians.  Jimmy Buffett was related to the Dutch, sunscreen, tequila and salt.

I’ve always regretted that they weren’t related, since my ideal restaurant would be the Buffett Buffet™.  All you can eat cheeseburgers (from Jimmy) and Coca-Cola® from Warren (who owns a large chunk of the company Coca-Cola™).  The television screens would alternate between surfing, bartending shows, and a stock ticker.

But this post is all about Warren, and only slightly about Cheeseburgers in Paradise©.

Warren Buffett is smart.  You don’t start with (relatively) small amounts of money and end up with billions by luck, unless you’re Mark Cuban, who is the only person on planet Earth who sold a company with 330 employees for enough stock to make him a billionaire.  Thankfully he has a billion dollars, so he can hire people smarter than him.   (Yes, he has more money than me, but, really – aside from being so lucky?  He’d be a wonderful bartender.)

One data point in my favor in stating that Warren is smart would be that he graduated from the University of Nebraska at the age of 19, and then went off to Columbia (the college, not the country).  Why Columbia (the college, not the country)?  He knew that Benjamin Graham taught there.  Ben Graham is known as the “Father of Value Investing,” and Buffett wanted to learn from him, and took his class.  After finishing at Columbia, he wanted to go to work for Graham, but Graham said no.  Buffett went back to Nebraska to be a stockbroker.

One day, Graham called and said that Buffett could come to work for him – he was being called up to the big leagues.  The next day Buffett killed all of his customers (no witnesses that way) and went to New York to work for Graham.  Okay, Buffet didn’t kill anyone.  That we know of – this isn’t Game of Thrones.

So, when Buffett got the job with Graham, he learned a lot.  Eventually Graham had enough money and wanted to spend the rest of his life on, well, whatever he wanted to spend it on (PEZ®, pantyhose and elephant rides?), so he shut the company down.  Buffett was, by most standards, pretty well off, and decided he wanted to move back to Omaha and open his own value investing shop because he missed all of the corn and the corn smells.  Buffett’s various ventures were pretty small – in 1990, his company (Berkshire Hathaway) was worth $7175.  Per share.  Recently that same share would cost over $260,000, and Berkshire Hathaway’s total value is over $440 billion dollars.

Warren Buffett has done okay.

He’s also known for being pretty frugal.  I know you’re happy I added frugal to that last sentence, because otherwise you’d just think that I thought that Warren Buffet was pretty.

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I personally think that this picture is pretty, even if Game of Thrones® has made dragons the good guys.

Warren has lived in the same house since the 1950’s, (it is a nice house, but not that nice), drives a car for years at a time (rumor is he bought a hail damaged one because it was cheaper), and recycles Pringles© canisters into air conditioning ductwork for his house and saves the trays for TV dinners to use to microwave Oscar Meyer® hot dogs.

Me?  If I had as much money as he does, I’d probably buy a new car every time mine ran out of gas (I kid, I drive my cars forever (LINK)).

I was watching a video while exercising (I work out for only for you and I study for only for you, Internet!) and heard Warren state “ . . . if I could invest as a small investor today I think I could . . . I know I could make a 50% return.”

That was a pretty powerful statement, since I certainly count as a small investor by Mr. Buffett’s standards.

Why can’t he do that?  He’s got billions of dollars he has to invest, so he has to do big deals.  There are a lot of good deals you could do with a few million dollars, but very few good deals in the billion plus region.  Turning the company’s $440 billion into $660 billion in a year is hard.  He could turn $10 million in to $15 million in a heartbeat.  Small deals are easier since there are so many of them.

Warren’s advice to investors is simple:  buy a low overhead (low fees) index fund (an index fund is a fund that is created to match an index, like the Dow Jones Industrial Average or the S&P 500).  If you can’t do what he does and value invest, this is the best way to get a good return.  And that’s good advice (in my opinion) for any small investor that doesn’t have the time to do the required research.

Let’s repeat that:  Warren Buffett says you should buy an index fund.

But me?  I know Warren didn’t get all of those Pringles® cans by investing in an index fund.  What did Warren Buffett do to get really rich?

What research did Graham and Buffett (reminder:  not Jimmy Buffett, but Warren Buffett) do prior to investing?

  1. Good Leadership, Good Business – Graham and Buffett were looking for leaders that had experience, capability, and great integrity. Warren can call CEOs and talk to them and give them the sniff test.  You can’t, so this is harder for you.  The business also has to be a good one. (More on this later.)
  2. Low Price to Earnings Ratio – The price to earnings ratio (P/E ratio) is how much you have to spend to get a dollar of the company’s earnings.

Before the 1980’s, the rule was a company that had a price to earnings ratio of over 20 was ALWAYS overpriced.  But the rule back then was to take the P/E and subtract the current prime interest rate.  Today the prime interest rate is ~1%, so using that old rule, a P/E of 19 would be acceptable.  Right now it’s difficult to make a return on capital because so much money is flooding everywhere . . .

Why was the rule like that?  It was assumed that you could either get returns from saving your money or from investing it.  Currently there is no benefit from saving it with historically low rates, so the P/E has continually wandered higher.

Alone, however, P/E tells you nothing.

  1. Low Price to Book Value – The book value of a company is how much all of its “stuff” is worth. In theory, if a company has a price to book value of less than one, you could buy the company (price), sell all of its stuff (book value), and come out ahead.  In theory.  If you have ever driven past a boarded up factory (and you have) you know that the book value just might be overstated.

Again, like P/E, Price to Book tells you nothing.

One video I watched while climbing on an infinite staircase to nowhere showed a screening method for value stocks that was alleged to have come from Warren Buffett:

  • Pick the Price to Earnings ratio,
  • multiply it by the price to book value, and
  • if the number was less than or equal to about 30,
  • the stock was a candidate.

Simple, right?

It is (and it’s overly simple).  Because what stocks have low P/Es and low Price to Book?

  1. Great, Undervalued Companies in Great Markets and
  2. Failing Businesses in Crappy Markets.

How do you tell the difference?  Sometimes you don’t.  Buffett will go on at length, if you let him, about all of the failures he’s had in picking companies.  But he had a consistent strategy that he followed for years that obviously resulted outstanding returns.  And he didn’t pick only small companies – Coca-Cola® was one of the companies he picked that produced amazing gains for Berkshire Hathaway.

So, how does a company like Berkshire Hathaway measure up on the value score?

  • It has a P/E of 20, and a Price to Book of 1.5. This would result in a score of about 30, so it would be within Warren’s window.  According to Warren, Warren is a value!  Also, Berkshire Hathaway has a credit rating better than (really) most countries.

What about . . . Tesla?

  • Tesla has never made any money, so its P/E is infinite. Its price to book is 12, so, 12 times infinity is  . . . still infinity.  Probably not a Buffett candidate?

And Honda?

  • Honda, maker of the best-selling electric car has a P/E or 8.6. It has a price to book of 0.77.  That means it scores an amazing 6 or so on Warren’s scale.  Wow!

So, let’s also look at a company that no one understands, Amazon:

  • It has a P/E of 120.  A price to book of 20.  That’s an astonishing 2400.  Again, probably not a “buy” rating from Buffett.

But is Honda a good buy right now?  Or not?

The only way to tell is to go back to Buffett’s first point.  But you and I can’t call up the CEO of Honda and expect to get real answers.  Warren probably could.

But we have help fortunately:  Joseph Piotroski, an accounting professor at the University of Chicago came out with a list of criteria that are objective and that anyone can find in the annual report of any publically traded company and named it the F-Score, which I really hope was based on the 1960’s show “F-Troop.”  I’d go through the list, but it’s much easier to pop up a link.  So here’s the (LINK) to Piotroski’s criteria.

ftroop

I think that Agarn was a horrible value investor . . . did you see the episode where he traded the blankets for a handful of small marbles that were supposed to bring Custer back from the dead?

Source- mycomicshop.com

Profitability

  1. Return on Assets (1 point if it is positive in the current year, 0 otherwise);
  2. Operating Cash Flow (1 point if it is positive in the current year, 0 otherwise);
  3. Change in Return of Assets (ROA) (1 point if ROA is higher in the current year compared to the previous one, 0 otherwise);
  4. Accruals (1 point if Operating Cash Flow/Total Assets is higher than ROA in the current year, 0 otherwise);

Leverage, Liquidity and Source of Funds

  1. Change in Leverage (long-term) ratio (1 point if the ratio is lower this year compared to the previous one, 0 otherwise);
  2. Change in Current ratio (1 point if it is higher in the current year compared to the previous one, 0 otherwise);
  3. Change in the number of shares (1 point if no new shares were issued during the last year);

Operating Efficiency

  1. Change in Gross Margin (1 point if it is higher in the current year compared to the previous one, 0 otherwise);
  2. Change in Asset Turnover ratio (1 point if it is higher in the current year compared to the previous one, 0 otherwise);

The lower the F-Score, the crappier the company.

And it, when combined with the screen above the Piotroski F-Score produced a return 7.5% higher than any other Value Investing test.  So, does Honda suck or not?

I don’t know.  But I’m going to check with the help of Dr. Piotroski.

But the biggest failure in Value Investing is to allow your emotions to rule.  Markets are driven by emotion:  Elon Musk is awesome, so I’ll buy Tesla!!!!!

Tesla might be awesome, but there are way too many Tesla fans for the price to be rational.  Part of finding value in the market is understanding that you want to buy at the lowest prices.  When are the lowest prices?  “When blood is running in the streets.”  When people have given up.  When people are running scared.  At that point, amazing companies can be picked up at incredible values.

In April of 2000 I was thinking of buying Microsoft®.  I had generally been a pessimist, but, at a certain point, I was finally ready to give up being a pessimist.  I was talking to a broker and then . . . the Dotcom Bubble burst.  If I had bought Microsoft© back then?  It would have taken thirteen years to be at breakeven.  And that’s not including inflation, which ate away at the buying power of the dollar.

But can I still get a Cheeseburger in Paradise?  Sure!  Jimmy Buffett will even have a Margarita with you if you have the proper parrot apparel.  But don’t expect Warren Buffett to pay for it.  But he will take your discount coupons so he can use them to get some suits he bought in 1983 altered.

 John Wilder has no positions in any stock mentioned, and won’t take any for the next week or so, until he can calculate the F-Score of Honda.  Especially Tesla – he’s not buying that though he loves Elon.  John Wilder is NOT a financial advisor.  And he’s had wine tonight.  Don’t trust him.

End of Empires, PEZ, and Decadence

“We shall fight in the hills; we shall never surrender. And even if this Island or a large part of it were subjugated and starving, then our Empire beyond the seas, armed and guarded by the British Fleet, would carry on the struggle, until, in God’s good time, the New World, with all its power and might, steps forth to the rescue and the liberation of the old.” – Dunkirk

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A marker of the change from Conquest to Commerce.  Hey, we have Porto Rico!

Sir John Glubb had the unfortunate luck to be born with a name that is most frequently associated with near-drowning experiences, but from his title of “Sir” it looks like he did okay.  He first was commissioned as an officer in the British Army in World War I (World War I was the one without the Japanese).  After that, like the United States, he spent the next 30 years meddling in the affairs of the Middle East.  He first went to Iraq, then was in charge of the fighting force of Jordan.

No, not Michael Jordan’s personal army of ninja warriors, they’re called the JNB, or Jordan Ninja Brigade, but something called the Arab Legion of Jordan (the country) that was considered for a time the most effective army in the region.

Eventually Sir Glubb and King Hussein of Jordan came to an agreement Sir John would stop coming to work and the King would stop paying him.  Glubb retired to England where he did a LOT of writing.  What brought Sir Glubb to my attention was one essay, called The Fate of Empires and Search for Survival.  You can download the .pdf here (LINK).  It’s pretty straightforward.  I’d first read this several years ago, but was more recently reintroduced by a link from The Patrick Henry Society (LINK).

As we’ve discussed before, there are others that predict history on a cyclical basis (Fourth Turning LINK), and there are various ways to look at a significant societal change, from the articles on the Roman Empire (LINK), how Collapse Happens: Seneca’s Cliff (LINK), to a general theory of the Collapse of Complex Societies (LINK).  These are interesting stories:  life goes on day after day in a continual sameness until . . . everything changes.

Now, that’s not to say that everything changes all at once.  We study the French Revolution in school (or at least I did) and went from the:

  • French Revolution to the
  • Terror to the
  • Rise of Napoleon to the
  • Fall of Napoleon to
  • Friday the 13th Part II Rise of Napoleon to
  • Napoleon III, Final Chapter

It takes (at most) a week to go through that period of history.  And it’s pretty exciting stuff, if presented well.   An entire stable society is tossed into an upheaval that results in massive change.  And when confined to a school desk it seems that if you lived in France, that all of this change was happening at warp speed!

But the Bastille was stormed in 1789, and Napoleon died in exile in 1821.  The events we covered in a week played out over 32 years, which is more than a generation.  If you were born in 1789, you could have fought at Waterloo with Napoleon.  This change would have seemed natural to you if you were in France, and the only way you can observe it (beyond freshman world history class) would be to take time to look at the events of the world in a bigger-picture way.

So, Glubb, being fired and all, spent his time in study of the rise and fall of the world’s empires.  (All quotes that follow, except where noted, are from Glubb’s essay.)

However this may be, the thesis which I wish to propound is that priceless lessons could be learned if the history of the past four thousand years could be thoroughly and impartially studied.

-Glubb

Glubb then pulls out a table and points to start and end dates for several empires and makes the assertion that empires have a maximum lifespan of about 250 years.

Empire Span
Assyria 859-612 B.C. 247
Persia 538-330 B.C. 208
Greece 331-100 B.C. 231
Roman Republic 260-27 B.C. 233
Roman Empire 27 B.C.-A.D. 180 207
Arab Empire A.D. 634-880 246
Mameluke Empire 1250-1517 267
Ottoman Empire 1320-1570 250
Spain 1500-1750 250
Romanov Russia 1682-1916 234
Britain 1700-1950 250

Okay, my criticisms first.

  • He’s cherrypicking Western Civilization and the Middle East. What about Japan?  China? The Disney Empire?
  • How did he pick the dates? There is a degree of subjectivity there.
  • He totally had to make up something to explain Rome. Rome doesn’t really follow his 250 year model.

That being said, you could make an argument that his dates are sorta right.  And he produces anecdotal evidence to back up his assertions in his text.

Likewise, Glubb notes that these durations appear to be roughly tied not to technology (it varied) communication speed (varied widely for the world-spanning British Empire and the Greek Empire), or contiguous nature of the empire (see Britain again).

I can even (sort of) support his dates on the cases I’m familiar with.  Everyone would agree that the British Empire was gone by 1970.  1960?  Probably most?  1950 might be a bit early.

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Possibly, this statue knows (nose?) that he doesn’t help Glubb’s thesis. 

So, if this 250 maximum life (*Rome Not Included) isn’t related to technology or geography, Glubb reasoned it was related to human longevity, and his theory was that it represented 10 human generations.  Differing generations of people in the empires reacted in different ways based upon their experiences in the progression of empire.  He even broke down the empire’s phases:

  • The Age of Pioneers/Outburst: In the US, Glubb argues, the age of the Pioneers was spent conquering the continent. Other places, a dominant culture takes over the nation.  This is the era of television shows involving guns and bears.
  • The Age of Conquests:  Immediately after the energy of the Outburst, the nation forms a military that leads to conquest. Television?  Guns, no bears.
  • The Age of Commerce: On the newly conquered land, per Sir John, every factor is in place for massive expansion of commerce as new systems are established and older trade barriers fall. The proud military traditions still hold sway and the great armies guard the frontiers, but gradually the desire to make money seems to gain hold of the public. Television? Not much.  It’s like an accounting show.  Some railroad robber baron shows.

The ancient virtues of courage, patriotism and devotion to duty are still in evidence. The nation is proud, united and full of self-confidence. Boys are still required, first of all, to be manly, to ride, to shoot straight and to tell the truth. (It is remarkable what emphasis is placed, at this stage, on the manly virtue of truthfulness, for lying is cowardice, the fear of facing up to the situation.

  • The Age of Affluence: All the commerce leads to wealth. Television:  Soap Operas and shows involving women in bikinis.  The wealth leads to a change in values:

The first direction in which wealth injures the nation is a moral one. Money replaces honour and adventure as the objective of the best young men. Moreover, men do not normally seek to make money for their country or their community, but for themselves. Gradually, and almost imperceptibly, the Age of Affluence silences the voice of duty. The object of the young and the ambitious is no longer fame, honour or service, but cash. Education undergoes the same gradual transformation. No longer do schools aim at producing brave patriots ready to serve their country.

  • The Age of Intellect:  few great schools are the hallmark of the early Empire. By the Age of Intellect, every Podunk town has a community college.  Television:  Community.  And the effect isn’t good:

Thus we see that the cultivation of the human intellect seems to be a magnificent ideal, but only on condition that it does not weaken unselfishness and human dedication to service. Yet this, judging by historical precedent, seems to be exactly what it does do. Perhaps it is not the intellectualism which destroys the spirit of self-sacrifice:  the least we can say is that the two, intellectualism and the loss of a sense of duty, appear simultaneously in the life-story of the nation.

  • The Age of Decadence:  This passage I found striking in Sir John’s essay: The word “celebrity™” today is used to designate a comedian or a football player, not a statesman, a general, or a literary genius.  Certainly Johnny Depp would be a celebrity in any age, right?  Television here?  Men in bikinis.

The characteristics of the Age of Decadence is given particular emphasis by Glubb:

  • Defensiveness: (Here Glubb means the country doesn’t care about duty or honor, just keeping luxury and comfort.)
  • Pessimism
  • Materialism
  • Frivolity
  • An influx of foreigners
  • The welfare state
  • A weakening of religion

Decadence is due to, per Glubb:

  • Too long a period of wealth and power
  • Selfishness
  • Love of money
  • The loss of a sense of duty

I’d argue that Glubb’s reasons for Decadence are subject to argument, but they’re not out of the question. I’d argue to add the increasing coddling of children so that we don’t ever let them experience true hardship, at any costs. My parent’s playground had a merry-go-round that cut a kid’s legs off when he fell down.  My playground put planks over the spot where he fell through.

My kids?

Soft fluffy pillows are under the swings, and games like tag are unapproved, whereas games like competitive sitting while quiet are looked on with approval by the school’s cadre of lawyers.  I could take live ammo to school and once found a live tear gas grenade on school property.  Today’s kids?  Plastic knives are out of the question.

But I think that there are few who would argue that the United States isn’t (currently) the biggest empire the world has ever seen.  The United States has 800 military installations in 70 countries. The United States has convinced the world to use the dollar as the world currency.  When Nixon took us off of gold-dollar convertibility (a “temporary” measure) it amounted to the United States being able to tax the entire world.

How?

We used to send them dollars that we printed up, in exchange for cool stuff, like iron ore, oil, and other raw materials.  They took these dollars that we just made up.  Profit margin for the government?  100%.

Nowadays, printing up those dollars is just too painful and expensive.  We now just exchange electronic information so that electronic dollars that we create are shipped via the Internet to other countries.  And, for whatever reason, everybody agrees that this is a good deal, and they keep sending us stuff, like cars and other finished products.  But, we have our standards.  We still make our own PEZ®.

pez

PEZ®, it’s what does a body good.  Like Brawndo©, which has what plants crave.

So, I’d call the United States an empire, both economically and militarily.  And while the world has benefited from the peace, the United States has benefited economically to an unprecedented degree.

And if you look at the points that denote Glubb’s Decadent stage of empire, I’d say that there is empirical, scientific evidence for at least six of the seven points.  Now it should be noted that Glubb noted these points in other civilizations as well.  He noted that in the Arab Empire, Arabs becoming a minority in their own capital and women studying for and being allowed in what they considered traditionally male professions, like being lawyers.

What happens on the other side of Empire?

It seems like Britain is still there.  They went through a very rough patch as the British Empire crumbled. Economic output dropped, and children were required to wear gloves without fingers, be grubby and put soot on their ruddy cheeks.  But as it adjusts to a new role in the world.  At the start of World War II (the one with cool tanks) the Royal Navy had 1400 ships, and it was the largest navy in the world.  Now Wikipedia claims they have less than 70.  And most of those are used to haul lime, rum, and fish and chips to their sailors.  And, as of this writing, the Royal Navy has zero aircraft carriers.

And, it’s understandable, their empire, like Paula Abdul’s career, is over.

DSC01335

This is what a Royal Navy Ship of the Line looks like in 2017.

I think that, economically, Britain has gotten a temporary reprieve due to the North Sea oil reserves, plus their sales of merchandise related to Lady Di.  Otherwise, I think that their trajectory remains on a downward arc.  Recently I read a story that indicated that infrastructure (roads, bridges, etc.) was in pretty bad shape outside of London, which would again be indicative of the end of empire constrained resources can no longer support the infrastructure created at the peak of empire.

What does this portend for the United States?

If the Roman model is in play, we’ll end up with a Caesar:  a ruler that will follow many of the previous forms of government, but also be a more despotic ruler.  The courts and legislature will exist to support him.  A leader of this type would reinvigorate and replace the current pessimism, materialism and frivolity with a renewed focus on maintaining and expanding the power of the empire at the expense of freedom and liberty. After a rough patch, most people will be okay with this.

Good points?  Cool buildings and triumphal arches.  Bad points? Purges of people who believe that President for Life Carl XV isn’t tall enough.

It’s possible that we head the other way, the soft slipping into fractured irrelevance that other empires (like Britain and Spain) have undergone.  The bigger cracks would be the fall of the currency into irrelevance . . . be like how, in Hemingway’s The Sun Also Rises, Mike went bankrupt: “Two ways,” Mike said. “Gradually and then suddenly.” At least we have all that cool stuff we got from China, right?

There would be big disconnects on the way down, but then long periods of uninterrupted economic and social malaise.  But the end of empire isn’t horrible.  At least we’ll send our version of The Beatles® to the new empire.  My bet is that it will be into the new world capital of our Canadian Overlords.

Greater Ottawa, anyone?

Jordan Peterson, Success, Bruce Campbell, and Roman Emperors

Discovery Channel© has Shark Week™, and at Wilder, Wealthy and Wise® we are lucky enough to have Dr. Jordan Peterson Week©.  This is the third of three posts on Dr. Jordan Peterson – his website is here (LINK). My first post on Dr. Peterson can be found here (LINK), and the second post here (LINK).

 

“Jamie, how many 29 year old record company presidents operate out of their mom’s trailers? Know what I’m sayin’?”- J-Roc’s Mom, “Trailer Park Boys”

DSC04463

Oil Tank Dennis Quaid (playing Sam Houston) knows a little bit about Oil Tank success, starting his own Oil Tank country and all.

I had intended on just doing three posts this year on Dr. Peterson, but will probably do updates from time to time, since his ideas are stone-cold interesting and I think I could do six weeks of posts on those ideas without repeating myself, but if I did that we’d just have to hand over the reins to Jordan, and I own the domain name, and I don’t think he’d share the revenues.

Elon Musk almost always has something going on, too.

Monthly updates about these guys?  We’ll see.

(By the way, Elon, GOOD JOB dumping Amber Heard, she’s really not worth a Prius®, dude.  I’m telling you – she is trouble and likely a Terminator® sent by James Cameron from the future to mess with your Mars (LINK) plan.  You dodged a bullet!!!)

The_Man_Who_Sold_the_Moon_Shasta_Ed

Now a 100,000% better with no Amber Heard. (image, Wikipedia)

But this is Wealthy Wednesday, and Dr. Peterson has a lot to say about success (and, it seems, almost everything else), which is reasonable given the unreasonable amount of success that he’s had, especially recently.

Today we’re going back to those forty points that Peterson laid out on Quora (LINK) in response to the question “What are the most valuable things everyone should know?”  In the analysis on Truth last post (LINK), Dr. Peterson had 16 out of 40 points that related in some way to Truth (I know, we could quibble, was it 15 or 17, but why quibble, since we’re friends?).  Are there any of the 40 points that speak to success?

Yes.  Dr. Peterson speaks on things I consider to be huge when it comes to a deep, meaningful success that combines significance with economic success.  I mean, why would you want a Justin Bieber-level success if you could have success that mattered, like Bruce Campbell?

Bruce

A perfect gift for any occasion!

Peterson has several videos on YouTube® that directly tackle important personal development points that lead to success:  fear (and how to overcome it), the importance of having a routine, where to find the freshest and plumpest Pez®, and how success leads to even more success.  I encourage you to watch the videos.

But going back to the 40 points.  Many relate to behaviors (behaviours in Canada, eh) that lead to success.  These are quoted below (bold) with Dr. Peterson’s gracious permission.  My commentary follows.

  • Pursue what is meaningful, not what is expedient. – There is always the opportunity to do things just for the moment, but when you work on what matters? That leads to long term success and value.  This means that, no, eating only appetizers doesn’t make a good dinner.  You need cake, too.
  • If you have to choose, be the one who does things, instead of the one who is seen to do things.   Do them so you how to do them.  Do them because they are meaningful.  Do them because it’s right.  Doing them just to be seen?  Yeah, we wedgied that guy in High School.  That’s the worst kind of smarmy dude.
  • Pay attention. Sorry, dozed off.  Oh, yeah.  People notice when you take them seriously, when what they say matters to you.  If you’re not present in the moment, those that are will notice.  And you’ll miss important things.  “Hang on, honey, I have to tell Google that they should lower their price to $750,000.  They want a million bucks!  Stupid college kids.”  (Yes, that really happened, and he did not get the deal.)
  • Assume that the person you are listening to might know something you need to know. Listen to them hard enough so that they will share it with you. There is an implied Trustworthiness in this statement.  Be worthy of their trust.  Realize that Truth is not where you look, it’s where you find it.
  • Be careful who you share good news with. Bad bosses get jealous, and even good people get jealous.  Similarly, don’t appear too good to your boss.  A boss that’s intimidated by you is not generally a rational boss.  If you have to make that calculation, beware.  Likewise, sometimes your friends get a bit tired of hearing of an endless sea of victory.  Be real to them.
  • Be careful who you share bad news with. People who don’t like you (or to whom you just represent a tool) can use that news against you.  Similarly?  Don’t share your weaknesses.  Hey, Clark Kent – your boss does NOT need to know that you’re nearsighted and break out in hives every time you’re near a little kryptonite©.  Also, your bad news might be insignificant compared to someone else’s bad news.  Your very worst day might be better than the best day of the person you’re talking too.  “Oh, my, and the caviar was nearly off!  I made do, however,” won’t go too far if the other person can barely afford to pay their chauffer and their private pilot.
  • Make at least one thing better every single place you go. The right people generally appreciate this.  They see it, and it’s obvious.  If they don’t see it?  You know, deep inside, it was the right thing.  A guy was working really hard on making a concrete footer smooth.  I pulled aside his great-great-grandboss.  “You know that’s going to be buried, right?  I’m good if it’s a bit rough.  Heck, it’s really even better if the concrete is rough.  More friction.”  Boss’s response?  “It’s his work.  The man has pride in it.  I’ll let him own it.”  What a good answer.
  • Imagine who you could be, and then aim single-mindedly at that. How many days do you want to spend being the you that isn’t the best you?  The first step is imagining.  Once you’re there, Von Mises (LINK) will take over.  If you see a better you, a path to get there, and believe that your action can take you there?  Nothing can stop you.  Unless you told your boss about the whole kryptonite® thing.
  • Do not allow yourself to become arrogant or resentful. Good things will happen to you during your career.  Bad things will happen to you during your career.  People will step on you (if they can) to elevate themselves over you.  You’ll forget the contributions of great team members.  Focus on this:  You’re never as good as people think, or as bad.  You have had amazing help through your life.  “Don’t spend time hating the situation.  The situation doesn’t care.” (Marcus Aurelius, probably)

Marcus

Unknown Sculptor, Pierre-Selim (Self-photographed) [CC BY-SA 3.0]

Why is it that when I wear a toga to work that they think I’m a little off?  Marcus rocked his!

  • Work as hard as you possibly can on at least one thing and see what happens. This implies that you’re going to get rid of the fear of failure.  If you try, really hard, and fail, what will happen?  Mainly, nobody notices, except you.  And you get stronger.  It has been my experience that the harder I work at something, the better I get.  And sometimes I achieve results that are beyond anything I ever could have expected.  And other things fail, but I learn a little bit more each time.
  • Maintain your connections with people. Outside of graffiti artists, The Mrs., and Keanu Reeves, most of us don’t work alone.  Most of us depend on others to make us better, make us stronger.  There’s a natural pull for certain people (introverts and those under stress) to pull back, mainly when they need other people the most.
  • Do not carelessly denigrate social institutions or artistic achievement. The stupid form you just filled out?  Yeah, somebody had to design it, and they had a reason.  See if you can make the form better, after understanding why it even exists.
  • Nothing well done is insignificant. There is the possibility of beauty in the most mundane and base of tasks – cleaning a microwave oven can be significant, especially when it’s done well.  I can show you the fulfillment you will get from cleaning a microwave.  See you at my house on Saturday?  Only a minimal charge for this lesson.  (H/T M. Twain)
  • Dress like the person you want to be. True enough.  Some days I’m Homer Simpson.  I would just love to be involved in those wacky adventures!  Danger point:  If you work at a construction company and dress like an investment banker you will be mocked.
  • Be precise in your speech. Meaning is important, and certain people follow only concrete statements.  Precision in a concrete fashion is especially important to them – their brains don’t understand exaggeration for effect.  Likewise, when someone asks you a yes or no question?  Answer yes or no before you explain the answer.  They might not care why.  And precision in speech leads to truth.
  • Stand up straight with your shoulders back. Posture feeds directly into mindset and emotion, and in guys pumps testosterone up when done right.  Standing tall and strong like a superhero, hands on hips?  Yeah, you’ll feel like a superhero, and being a superhero is a great way to get important things done.  Especially if “things” is slicing up people with metal claws.
  • Don’t avoid something frightening if it stands in your way — and don’t do unnecessarily dangerous things. Bosses hate fear and like courage (good bosses).  They also understand risk.  They like it when you take appropriate
  • Notice that opportunity lurks where responsibility has been abdicated. There will be times when you will see something undone.  Do it.  It will be noticed.
  • Be grateful in spite of your suffering. Nobody likes a whiner or wants to spend time with a whiner.  Nobody wants to hear a whiner whine except his enemy.  Everyone suffers.  To repeat myself, your worst day is better than someone’s best day.  Act like it.

Dr. Peterson is doing more than writing about success, he’s quarterbacked creation of a software suite called “Self Authoring,” (LINK).  Note that I am not as of this writing date getting paid if you sign up.  I’ll let you know if that changes.

The concept behind Self Authoring is to work through issues – fix yourself – by revisiting and writing about events in the past that were particularly difficult for you or in some way may be holding you back.  Additionally, there’s a focus on writing a future as well to create a meaningful goal or set of goals to work for, sort of an anti-nihilism pill.

Bill Gates probably doesn’t need this.  Those who are able to be pretty clear of their past and are able to perform at a high level already based on solid future goals are probably not the target market, though Dr. Peterson did say that one driving factor in designing and creating this tool was from requests by companies for ways to help their high performing employees perform on an even higher level.

When people write about their painful past, people experience long term positive impacts (compared to a control group).  Likewise, another group constructed and wrote about their future, and had similar impacts (when compared to the control group).  I have theories about everything, but I wonder if confronting past trauma made them braver?  I wonder if it allowed them to really examine what happened in context and they were able to trace the impacts to their present state?

In the end, Self Authoring is consistent with Peterson’s maxim – you have to fix yourself.

I wonder if that’s part of the mission of this blog?  I know that Orthodixie (LINK) (another blogger from my past, an Orthodox Priest with a Carolina accent, and no, I’m not making that up) and I would talk about how blogging let us mentally, “take out the trash,” and how much better we felt after we’d gotten something out on paper, even something unrelated to the things that were bothering us.  I’ll probably give the Self Authoring program a try.  I’ll let you know how it works out . . . but get yourself a Priest as a drinking buddy if you can.  It always amused The Mrs. when I engaged him in theological debate after wine.

Me, I’m still cleaning on my room, making it a little better each day.  I know that The Mrs. is very much looking forward to me being done with that.

Dr. Jordan Peterson, Truth, and Even More Truth

This is the second of three posts on Dr. Jordan Peterson – his website is here (LINK). My first post on Dr. Peterson can be found here (LINK).  The third post can be found here (LINK).

“J-Roc raps about gangsters and guns, pimps and hos and Compton.  The guy’s not from Compton.  He’s a white kid from a trailer park.  He should rap about what he really knows which is living in his mom’s trailer eating peanut butter sandwiches.” – Trailer Park Boys

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When I think that society is too complicated, I then remember that I couldn’t even take this picture without the help of the millions of elven technicians that live in my camera.  Then I cry.

As a reminder, Dr. Peterson is a psychologist that teaches at the University of Toronto, but don’t hold that against him:  he seems to be one of the good Canadians at this point, though a bit fixated.

On what is Peterson fixated?  Dr. Peterson seems to be obsessed, and not with Pez® or Japanese tentacle pudding cups like a normal man.  No, Peterson is obsessed with the truth.  Earlier this year in response to a question on Quora, (LINK): “What are the most valuable things everyone should know?” Dr. Peterson didn’t come back with a 250 page book priced at $43.50 (I’m talkin’ about you, Dr. Tainter (LINK)) but rather a fairly simple 40 item list.  I’d suggest you go over and read it – it’s not bad.  My list would be different, but you’ll have to wait for a new post for my list – this post is all about Peterson.

I’ve often heard it said, if you want to know who someone is, just ask them.  I was reading an article on the web where these psychiatrists were attempting to figure out a test to give people to determine if they had narcissistic personality disorder.  The best test they’d yet determined was to ask them, “Are you a narcissist?”

Narcissists seem pretty proud answering, “Yes, I am!  Because I’m so awesome!”

Nice.  So, with that in mind, let’s listen to Dr. Peterson.

Dr. Peterson’s first rule is:

Tell the truth. 

Simple.  I think we all learn to lie about stuff as soon as we learn about consequences.  We all start out as horrible liars, since being three years old doesn’t exactly pop us to the top of the “able to make up good, convincing lies” chart unless your parents are very, very stupid.

After playing with lies, if we are very, very, lucky we learn that lies are really, really bad.

I’ll tell you my story, because I’m just enough of a narcissist to think you might be interested.  Because I’m that interesting.

I’ve been divorced, and can attest that divorces are very expensive because they’re worth every penny.  My first wife and I didn’t have personalities that really matched very well.  To top that, neither one of us was very good at telling the truth to each other – it was like a US-USSR arms race where, instead of stockpiles of nuclear weapons, our Cold War involved an ongoing series of falsehoods aimed at one another.  She was relieved to move out.  I was relieved when she moved out and was replaced by Boris Yeltsin (for a short time).  It took tanks and a promise of vodka to get Boris out of the house long enough to change the locks.

Regardless, I could see the impact that lies and distrust had made in my life, and I made a personal vow that, no matter what I did in the future, I would always tell anyone in a future relationship the Truth.  No lies.   And I have told the Truth, regardless of the outcome to The Mrs. since we met.  One time I called home, late, while I was still at work.  I whispered into the mouthpiece, “Can’t come home right now.  Governor of the state is in the office right next to mine, surrounded by news media, talking to my boss.”

The Mrs. only reply was, “Okay.  See you when you get here.”

By this time, we’d been married almost eight years, so, based on my constantly telling the Truth during that time, plus during every interaction before we got married, I think I could have called up and said, “Honey, been picked up by a UFO, and they have Elvis and we’re going out for ribs and beer.  Be back before 11pm.”

This may or may not be what happened to me.

She might have believed that was what was really happening, but she would certainly have believed that I thought it was the Truth.

And this has paid off during my entire relationship with The Mrs., in dividends, though certainly she knows better than to ask my opinion on anything where she doesn’t really want a True answer.  Has it caused friction?  Very rarely.  It did today, because I told her my opinion, and was told (essentially) that she didn’t want that right now.  Sometimes Truth is not what we want.

But in every case, it has led to harmony and trust.  If you have a partner who always tells you the Truth, you know you have someone who is on your team, always.

But back to Dr. Peterson.

In response to the Question on Quora, he listed 40 points.  By my count, 16 of them (40%!) dealt directly with Truth.

Here they are, quoted with permission, with my commentary:

  • Tell the truth. Discussed above.  The core of Dr. Peterson’s points.
  • Do not do things that you hate. If I were to quote Shakespeare, I’d quote Hamlet here: “To thine own self be true.”  Oh, I guess I just did.  This is Truth to self.  Your hate (if everything else is set right) will be based on the dissonance of what you’re doing and your best self.  You’re avoiding Truth by doing things you hate.
  • Act so that you can tell the truth about how you act. Directly related to the above, the idea of having to tell someone, Truthfully, what you did prevents you from doing things you would be ashamed of.  Which would include eating a whole bag of Ruffles®, unless it saved an orphan in some way.
  • Pursue what is meaningful, not what is expedient. Again, this is more “Truth to self.”  As my coach in high school said, “Wilder, when you cheat on those pushups, you’re just cheating yourself.”  I kid.  I never cheated on pushups in high school.  I cheated on squat-thrusts.  But, when cheat yourself from the Truth of the meaningful, you end up with the never ending squat thrusts of the expedient.
  • If you have to choose, be the one who does things, instead of the one who is seen to do things. I had a boss who was always seen doing things.  In reality, he mainly was responsible for ensuring we had a constant Internet connection, mainly by surfing for things that amused him.  But if there was a way to be seen by his boss doing the “right” thing?  He would move faster than a miniature poodle on a porkchop to get in the credit zone.  I’m pretty sure he’s never been happy, especially since his strategy is to always look good, but he has none of the skills to create great outcomes.  My corollary:  Do things, and be seen doing them.  You can have both.  But never stop doing things.
  • Imagine who you could be, and then aim single-mindedly at that. Again, the theme of being Truthful to oneself continues.  But this is aimed at being Truthful to the long term you.  If you cheat that you, you’ll always have regrets, and probably termites, too.
  • Try to make one room in your house as beautiful as possible. “Who says that fictions only and false hair become a verse?  Is there in truth no beauty?”  Okay, I stole that from the poem “Jordan (I)” by George Herbert, 1593-1633.  And that’s creepy, because I only learned the poem’s name or author tonight – to me it was just the title of a sub-par Star Trek episode (the one where Spock goes temporarily blind).  But outside of the creepy factor of researching a poem to find that it has the same name as the person you’re writing about, beauty is truth, and truth is beauty.  The elegance of pure math.  The sudden discovery of a True thing.  The Wilder corollary to this one:  ugly things around your house steal your energy.  Fix them.
  • Work as hard as you possibly can on at least one thing and see what happens. Again, Truth to self.  I have seen people with amazing skills and talents just stop on their way upward – because they are afraid to fail.  I’ve done that myself, until a very visionary leader told me, after I’d explained what he wanted was hard to do, “Wilder, just do it.”  Nine times out of ten when he told me that, I achieved it.  The tenth?  He got fired.  But he got a severance package worth about $1.4 million.
  • Do not carelessly denigrate social institutions or artistic achievement. There is truth in beauty.  There is also truth in the stable social constructs that have created wealth, peace, and Pez® for thousands of years.  Tear them down?  It’s easy.  But can you tear them down and put up something even better?  Probably not.  Can you make them better?
  • Make friends with people who want the best for you. Again, Truth is your primary commodity here.  Friends who want the best for and from you will tell you the Truth.  Others won’t.  One time I saw the head of operations for a company walk down the hall with about three feet of toilet paper trailing behind his waistband, top center behind, like a big, white, fluffy skunk tail.  Nobody else saw him.  I didn’t tell him when he walked out of his office, somewhat flushed and embarrassed.  He made small talk until he realized I wasn’t going to say, “Hey, saw your toilet paper tail and I’m going to tell everybody!”  And I didn’t tell the office.  He was a nice guy.
  • Set your house in perfect order before you criticize the world. How is it possible that you have the answer to world peace, and there’s a towel on the floor in your room?  Or your son hates you?    Thought so.  Fix the things around you so you understand the Truth required to fix the world about you.  I’m still working on cleaning my room, so, my advice is suspect.
  • Be precise in your speech. Precision in speech means . . . you say exactly what you say you mean.  Which is?    The Truth.  And if you go back to Orwell, removing words, or making them mean things they don’t removes the ability to even make certain arguments through language, so at some point the Truth isn’t even possible to utter anymore.
  • Do not let your children do anything that makes you dislike them.  By not teaching Truth to your children you cripple them to find Truth on their own. And finding Truth by yourself is harder than finding a clean spot on Johnny Depp’s sink.  As smart as your children might be, they are not wise, and need you to guide them through Truth so they might find Wisdom, and through Wisdom enough money to pay for your retirement home some future day.
  • Do not hide unwanted things in the fog. We try to hide Truth from ourselves every day.  We look in the mirror and manage to not see what anyone else in the world can plainly see.  While there is no reason that you have to tell the world your deepest regrets, you should at least be able to see them and understand that they are True.
  • Read something written by someone great. Great people write Truth, that’s why what they write is great.  The more profound the Truth, generally, the simpler.  But a great writer can, in 200 pages, take you on a journey that wraps you around and through a path where you walk to Truth.
  • Remember that what you do not yet know is more important than what you already know. As much as we search for the Truth, we learn more every day.

Here is a Peterson theme:  Truth in a Post-Modernist context is always relative and always the product of the culture that created it.  It ceases to be objective Truth, and becomes a relative truth.  From the points above, you might predict that Peterson would reject Post-Modernism because it denies the very existence of Truth.  And you would be right.

The battle lines are set: Modernism vs. Post-Modernism and the very existence of Truth.

What amazes me is that it is clearly explicable in our world that there are objective facts that are True, yet in a Post-Modernist viewpoint, nope, not so.  Therein lies the ultimate fight between Peterson and Post-Modernism – Peterson is on the side of Truth, and his opponents deny that Truth even exists.

There are too many points, too many places where Truth is not the relative product of a culture to even begin to argue that truth doesn’t exist.  (If you must have an example:  there is a force we call gravity that causes mass to clump together.  Truth.  Gravity is not a social construct.  There are cultural Truths as well, but I’m not going to open that can of worms with this post.)

So, I’ll allow that the narcissistic side of my personality is pretty sure that you’ve enjoyed this, but the Truthful side knows that you did.

As for me?  I’m with Dr. Peterson.  Go with the Truth.  It’s a winner.

Jordan Peterson, Being Healthy, Slaying Dragons (where legal)

“Why don’t you get a life Rick? Why don’t you go to community college like Julian here? Hey, I got a good idea. You could teach, ‘Living in a Car and Growing Dope 101.’” – Trailer Park Boys (Which, in the editor’s opinion, are another Canadian menace)

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William Shatner and Pugsley.  Pugsley was thrilled.

Discovery Channel© has Shark Week™, and we here at Wilder, Wealthy and Wise© have already had Elon Musk Week™ (LINK).  Given the great response to Elon Musk Week®, my editor (me) has assigned my writing staff (also me) and my graphics staff (again me) to Jordan Peterson Week™.  This is the first post in the series.  My second post is here (LINK).  And my final post is here (LINK).

Jordan Peterson is fascinating to listen to, and you can certainly do that, unless you live in 1995 or Arkansas, where video isn’t yet a part of the Internet.  YouTube has devoted a massive amount of computer disk space to cover the hours and hours and hours of Dr. Peterson’s fascinating lectures.  How much disk space?  Almost enough to cover 30% of The Simpsons episodes, or 571,231 hours.

I kid.  But Dr. Peterson is exceptionally popular despite the fact that some of his videos are an hour or two long, and the typical attention span is measured in fifteen second chunks, and he’s still popular tells you he’s saying something pretty important.  Heck, Dr. Peterson is Canadian and despite that, people take him seriously.

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You know who else is Canadian?

There is quite a lot of information content in his videos – they’re very dense, and often he will drop an amazingly wise bit of information and leave me to back the video up whilst I’m Stairmastering® with my hands and face covered in yogurt to catch his point again.  Why are my face and hands covered in yogurt?  To keep the cucumber slices in place, silly!

Peterson drops a truth grenade in every video.  In one, he indicates that most of his psychological practice cases don’t have any sort of a mental issue.  No real psychotherapy is required.  No years of sitting on a couch discussing cigars or tunnels and their meaning.  Nope.

And sometimes a cigar is just a cigar?  Audio only, but a classic.  I had this on cassette when I was a kid and it all went WAY over my head.

Dr. Peterson indicated that most problems were problems in living.  He brought up six areas where he would gently (or not so gently) counsel his patients to “get a life.”

“Get a Life” must be a course they teach in Canada.

Peterson indicates that there are six areas where his patients need to focus on getting a life (interpretations past the bold are mine, not Dr. Peterson’s):

  • Friends/Intimate Relationships – These are crucial relationships, and it seems (LINK) that the earlier they are formed, the stronger they are. I guess we hadn’t learned to pretend to be something we’re not, so those relationships are more authentic.  Everyone I went to High School with knows what well developed sense of self I have (though they called it “egomaniac”) and I don’t have to pretend to be humble (important in not scaring a boss to death).
  • Being a Part of a Career/Dominance Hierarchy – Having a career is important, in that it provides a sense of significance to what you’re doing. You have the opportunity, each day, to jump in and do your very best within the confines of a social network that doesn’t require BookFace® (unless you work at BookFace©).  Dominance Hierarchy is a term used by Peterson a lot.  This is driven by the notion that it is hardwired into us by a lot of years of biology and evolution.  In the past, (pre-monogamy) most human males didn’t get to mate and leave an offspring (think harems).  This (depending on your mileage) may have left a LOT of angry males only marginally attached to society, and a bargain of monogamous, single marriage in return for angry unmated males not rioting and breaking everything.  So, want to be the most dominant person in the room?  Sure you do.  Like a love for gluten, it’s hardwired.  And studies have shown that this is important (LINK).  Please remember, however, all the recent retirees that have this as their primary purpose and expire six months after retirement.  This can be a dangerous solo focus.
  • Have a Schedule/Routine – Pick a time, any time, and get up at that time, all the time. Every day.  This stabilizes your body’s innate circadian rhythm, which has a direct relationship on your mood.  Hmm, I’ve worked to make this better, but . . . (LINK)
  • Eat Something in the Morning – Dr. Peterson talks about a nice woman who only ate ¾ of a cup of rice every day and was starving herself. My breakfast looks a lot like dinner.
  • Personally Regulate Drugs and Alcohol – Peterson said “regulate” but by context he meant personally regulate. His other comment, “especially alcohol.”
  • Have a Spouse/Family – Family is important. Besides creating another group of people that should have your back no matter what, it also provides an anchor in time.  It is a link to the past from your parents.  It is a link to the future from your children.  And, it’s a link to BookFace® if you do it wrong.

Dr. Peterson said that being solid in three or four of these was absolutely necessary to by psychologically thriving.  I imagine that an extreme stress on any one of these by itself (think the retirees mentioned above) can be a pretty debilitating experience.  Keep in mind, also, that these presuppose a normal life in good times in Western Civilization, and not times that would make Dr. Maslow grin with the grim anticipation of NOBODY winning at his self-actualization game (LINK).

Looking at the list I can see from my personal experience that having three of these going for you is crucial to not being a neurotic moron appearing sane.  When times were tough at work?  I leaned on family and on friends.  When I was going through my divorce a zillion years ago?  I threw myself into work and leaned on friends.

What else does Dr. Peterson say?

Lots.

One big one is “Clean Your Room.”

And it’s not a metaphor.  It’s literal.  The act of cleaning your room – of making your place tide – provides a basis of stability.  It’s also symbolic – it’s hard to argue that you know the solutions to all of the world’s problems and need to organize a protest when you can’t even keep your room clean.  The simple symbol of slaying the tiny dragon (that’s a metaphor, unless you live in Westeros and are plagued by actual tiny dragons) of chaos in your life shows that you can be conscientious enough to actually get something done.  And you get a boost when you’ve actually achieved something.  Hey, I haven’t won the Nobel® Peace Prize™ (now on stick!) but, by golly, I don’t have to step over a rack of magazines to get to my bed!  Your work leads to something besides futility.

That last part is important.  I once had a conversation with a friend at work where we talked about the different ways that people view tasks:

“John, you and I get up in the morning and think, yup, I have got to shave this morning.”  He rubbed his chin for emphasis.  “Those guys,” he gestured in the direction of the group we were talking about, “get up in the morning and look in the mirror and think, ‘You know, I’m going to have to shave every day.  Every single day for the rest of my life.’”

And life can seem like that – a bit of constantly encroaching chaos.  Maintaining the discipline of cleaning your room keeps that sense of being a victim of life at bay.  “I can’t clean the room – I don’t have time,” and “I’ll get to cleaning the room on a long weekend.”  Those are statements of someone who has voluntarily made themselves a victim, and, really, is avoiding the truth.  Even five minutes a day, over time, will lead to a clean room.

My cleaning method is to pick a spot on an area, and then make that area perfect.  Then, the area adjacent to my “perfect” area looks . . . awful.  My favorite spot to start in the kitchen is the microwave.  The Mrs. chides me because, “Who is going to come visit our house just to look to see how clean our microwave is?”

Well, nobody.  But the microwave is truth.  Regardless of who sees it (or doesn’t see it), the microwave is now clean.  And I know the truth.

And this week, each morning before work I’ve cleaned on the master bathroom about three minutes.  In two weeks, that’ll be half an hour.  That I’ll never notice, partially because zombies on The Walking Dead have a greater self-awareness than I do when I first get up in the morning, plus their breath smells better.  But I’ve done something a bit different.  I’ve started the day having slain a tiny dragon; starting the day with a win.

And that’s legal in my state, as long as I have a permit.

Join me for more of Dr. Jordan Peterson on . . . Monday.  Get a life.  Or slay a dragon.

Life on Earth, Supervolcanos, NASA, and Tom Petty

“I must have started drinking again, because the woman who tried to activate a supervolcano with a giant fork is standing here, and you’re all acting like it’s a potluck.” – Warehouse 13

DSC04285A picture of Abraham Lincoln as he was fighting against both the Confederacy and German engineers.

“The world was a web.”

This wasn’t the quote from a Tom Petty song.  These were words that would echo through my head for two decades.

I started to write a novel back a long time ago.  It started with those words.

I still have it somewhere, buried in a backlog of data on one of my computers, right next to a resume that I first entered into a computer on . . . WordPerfect© (yes, that was a word processor before Corel® ate it).  I’m sure they still sell dozens of copies of it a year.

And the novel itself?  Oh my.  I’m sure that if it ever saw the light of day someone would name an award in its honor for the worst novel of the year.

But . . . “The world was a web.”

There are words that haunt you through your life, and this sentence haunts mine, just like wondering how it felt while the Roman Empire was ending (LINK).  I have been, since as long as I can remember, really fascinated by the unravelling of society.  Once I went to the Wikipedia entry for “Apocalyptic Novels” and just nodded.  I’d read nearly all of them.  (I just revisited the page, and it’s all filled with editorial stuff, so, much less useful.  I won’t link it.)

But the late author James P. Hogan (I read most of his stuff) wrote a novel called “Voyage to Yesteryear.”  It’s a good one, though out of print, but to me, it had a fairly stunning philosophical analogy.

We as humans think a lot (and live with) more or less reversible processes.  I put ice in the freezer, it freezes.  And then it melts.  Though once upon a time, I don’t think that there was anything at all in physics that would have predicted that the ice would have floated on the water (most frozen liquids sink – if you freeze gasoline, the frozen stuff drops to the bottom), but it turns out it’s pretty important, especially if you’re a fish.  You can stay in the nice liquid water while the ice freezes above you, which, I imagine is important to a fish.

But the second discussion from the novel is that some changes are irreversible – if you burn your laptop in your charcoal grill, there is simply no thawing it out afterwards to get your keyboard to not look like a bunch of charred Doritos®, or get back all of those downloaded pictures of Emilia Clarke from Game of Thrones® or all of your Tom Petty MP3s.  Those are gone, dude.

The fire (presumably from a dragon?) goes beyond the phase change represented by freezing and thawing.  The physical structure has been changed to the point that it’s not remotely recognizable.  And you can’t go back.  There’s no way to find all the carbon atoms that baked off your display and combined with oxygen and put them back in the screen, let alone the same place in the screen that previously held them.

It’s gone, dude.  And even the Roman Stoics (LINK) knew this prior to Rudolf Clausius coining the term “entropy,” which led indirectly to the U.S. Civil War through a series of humorous translation errors that made Abraham Lincoln think that Clausius was making fun of his big hat.

But let’s go back four score years (that’s 80 years, for those who are used to the metric system) from that hatastrophe.  What happened then?  Besides Ben Franklin being in the prime of chasing every young lady who could spell “yes” there seemed to be this revolutionary event.  Pardon.  Revolutionary event.  Like the American Revolution.

If a president being elected every four years is a phase change from ice to water and back again, the American Revolution was burning King George’s laptop and then going after the glowing hard drive with a sledgehammer.  In a real and literal fashion there was no way to go back.  Instead of a political phase change, you had political chemical reaction – there was simply no way to go back from what the Founding Fathers had done.  They changed the way the entire world viewed government with the result that today almost every nation in the world where you can order a Big Mac® has emulated to the greatest extent possible the precepts of the American Revolution.  McDonalds® and Thomas Jefferson© changed it all.

And you just can’t go back.  You can morph into something different, but you can’t go back.  There are some ideas that are so radical, so amazingly simple that once they pop out – they hold the attention of almost everyone who hears them.  The American Revolution was one such thing – you could never turn back after that.

Unless you hit reset.  I was leafing through the Internet as The Boy piloted our car up the road for a short road trip – I alternated between reading and a light nap.  The light naps were ended with (small) bursts of adrenaline when our cars trajectory was different than my half-snoozing mind expected.  It’s like Dad radar.  Even asleep I was looking for that change we could never recover from.

On article popped up during the ride about the Yellowstone Volcano, and how NASA was developing a plan to stop it.

Reread the sentence above.  I’ll wait.

NASA has become convinced that a massive volcano is of greater threat to humanity than asteroids.  I mean, both would ruin your day, but Yellowstone seems to pop off a continent cleansing burst every 600,000 years or so (last one 630,000 years ago) and some folks with a LOT of time on their hands at NASA are convinced that they should be the ones that handle it.

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What NASA thinks might be in the volcano.

They’ve even advanced plans on how to stop it.  And, I’ll admit that saving the lives of upwards of two billion people might even be considered a laudable goal in some circles.  But not me.

It’s not the saving all of those people that I object to.  I’m probably neutral on that, unless one of them is me.  Then I become a raving supporter.

I don’t give NASA any slack.  If it doesn’t involve activities that directly get humanity to Mars, I’m thinking that they should just close up shop and give the money to Elon Musk (LINK), who actually seems to be interested in space exploration.

But even worse, it appears that NASA is letting people write stuff that have NO understanding of math:  the NASA plan involves pumping water (which is not exactly in huge supply in the Rocky Mountains) into the magma chamber and to extract the heat.  Which has how much to do with NASA’s mission?  Zero.  Maybe less.

Here’s the latest mission I could find:

To pioneer the future in space exploration, scientific discovery, and aeronautics research.

So, if this involves trying to cool hot coffee so you can drink it faster by adding an ice cube or two, I’m on board. Takes a few minutes, doesn’t distract NASA from their actual day job.

But in this case the coffee is 11,500 cubic miles of coffee.  At 1300˚F to 2400˚F.  And NASA wants to cool that.  With water.

Okay, I’m pretty sure that drug testing isn’t required to work at NASA.  But the amount of heat we’re talking about is simply staggering.  At a depth of five miles (that’s 8km to the “people who use money that looks like Christmas paper, and also happen to use metric”) to the top of it, keep in mind that this magma pocket sends pockets of superheated boiling water five miles through rock.  The amount of energy is stunning – almost as much energy as a D.C. NASA bureaucrat with a liberal arts degree uses to avoid doing work on a typical Tuesday.

First, the good news!

I won’t bore you with all the mathy stuff, since The Boy and I figured it out.  It’s not hard, it’s just thermodynamics done in hotel room on three sheets of hotel room note paper.

Let’s say you had to cool the Yellowstone magma chamber.  Latest number that I had on how big it was?  11,500 cubic miles.

Cubic miles.  Drive from Seattle to Los Angeles.  That’s 1137 miles.  Do it 10 times. Next to a mile high wall of magma.  Or just once.  Next to a ten mile high wall of magma.  That’s a mile thick.

Hmmm.

But, let’s pretend we can cool that 52,800 foot high wall with water.  Where do we get it?

Well, the Colorado River is a big one.  Let’s pump all of that to Yellowstone to cool it down.  I’m not going to bore you with even more thermodynamics, but you have to heat the water, and then add even more heat so it boils.  (I actually saw one billion dollar business venture implode because they didn’t know you had to add the extra heat to make it boil).

At the current flowrate of the Colorado River, it would take 435,843 years to cool the lava.

I know that NASA seems to not math very well anymore, but, given past rates, Yellowstone would have exploded at least one more time, if not two.  And the people in Los Angeles would have to go nearly a half of a million years between bottled-water drinks.

And that’s the good news – that only half a million years of concerted effort beyond anything the world has ever seen will maybe stop one human extinction.

But some scientists worry that the addition of the cooling water might turn the magma chamber brittle – increasing the likelihood that Yellowstone would explode in a big catastrophe.  And that’s the good news!

Second – the bad news.

But that’s really not the point.  There are a whole host of things that are much more likely (given the last 100 years or so) than a 600,000 year periodicity (like Yellowstone has) volcano to mess with our world.

But most folks look at this risk incorrectly – there’s a probability of occurrence, but also a severity related to the risk.  Low probability events occur everyday, but they have low severity.  I might lose yet another hair on my head, never to return.  But the impact?  Not very big.

An asteroid the size of Dallas heading towards, well, anywhere at 50 miles per second?  Bad day.  For everyone.  Yet heart disease is more likely to kill me than the kinetic impact of an asteroid.

As catastrophes go, that’s pretty bad.  But research (dating back 15 years or so) on genetics of humanity indicate that it’s likely that 70,000 years ago after the supervolcano Toba lit off, only 2,000 humans remained.  Not on Toba.  Anywhere.

We were that close to the lights going out on us forever.

These big, nonlinear events are very low probability, but they have a huge impact, and may impact the ability of the human race to appreciate Tom Petty.

Think aliens like Tom Petty?  They should.  But who can account for taste?

 

Elon Musk: The Man Who Sold Mars

“Actually, they theoretically can separate the hydrogen from the oxygen and process that into providing fuel for man’s space flights. Ostensibly, turning Mars into a giant gas station. So it’s a . . . yeah. We live in an amazing time.” – Breaking Bad

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The featured picture above the title is of the Saturn V.  It’s longer than a Harry Potter novel.  This picture shows the engines from the main stage of the Saturn V.  About 275,000 horsepower for all five engines, you can totally tell by the lens flare!  But it got over two miles per gallon of kerosene used (TRUE)!

This is the third and final part of Elon Musk Week® (sort of like Shark Week©, but with 100% less Discovery™ channel).  An annual feature?  Maybe!

Part 1 is here (LINK) where we take apart Tesla®, and Part 2 is here (LINK) where we understand Elon’s Matrix® plan.

I first read about Elon in (probably) 1977 or 1978.  Oh, sure, you’re saying, that would have made him six or seven years old, and at least a continent and two hemispheres away from me.  My only response is, “so what?”

When I was a kid, I lived fifteen miles from the town I went to school in.  My house was the farthest away on the school bus line, so I was the first to get on in the morning (7:15, every morning) and the last to get off (4:30, so I missed F-Troop).  I could stare out the big picture window and see the bus a mile away – Ma Wilder taught me it would be rude to keep the bus driver waiting – and out I would go to be there waiting when the big yellow bus pulled into my driveway.

For about two hours a day as the bus stopped to pick up and then let off children, I could either stare out at the mountain scenery, or I could drop with Johnny Rico and The Roughnecks into Klendathu.  Or I could visit Trantor, first with Hari Seldon, and then later with The Mule.  Or ride Sandworms on Arrakis with Paul Atreides.  Or be shocked at the mysteries when we Rendezvoused with Rama.  Or finish all the science fiction anthologies at the middle school library by the middle of my seventh grade year.

And reading wasn’t confined to just bus time.  There were only three channels of television available (no one ever counted PBS, unless Monty Python was on) an half the time nothing interesting was on.  So, if I had built all the model kits around (the usual condition – they didn’t last long) and it was too cold to go hiking or fishing, I always had a book ready to read.   And Ma Wilder said I had to go to bed, but she never said I had to go to sleep . . . my parents bought me a reading lamp that clipped on my headboard for my tenth birthday.

But I remember reading the Hugo®-winning “The Man Who Sold the Moon,” by Robert A. Heinlein fairly clearly – it wasn’t on a bus, but on the couch by a crackling fire on a cold (-20˚F) winter’s day.  And that’s when I met Elon Musk.

The_Man_Who_Sold_the_Moon_Shasta_Ed

(source, Wikimedia)

Delos David Harriman (better known as D.D. Harriman) is the billionaire who decides to go to the Moon.  Why?

He envisions a new economy – an opening of the Moon is the first step to opening the Solar System to humanity.  Rather than living in a world which with a fixed horizon, D.D. realizes that getting off this rock is the only possible positive future of humanity.  But getting there is possible, and only takes will.

To quote Harriman:

“In fact, the real engineering problems of space travel have been solved since World War II.  Conquering space has long been a matter of money and politics.”

Contrast with Musk:

“Boeing just took $20 billion and 10 years to improve the efficiency of their planes by 10 percent. That’s pretty lame.”

And how was Harriman going to do it?

“I’ll hire the proper brain boys, give them everything they want, see to it they have all the money they can use.”

Contrast this with Musk:

“The path to the CEO’s office should not be through the CFO’s office, and it should not be through the marketing department. It needs to be through engineering and design.”

And I could go on and on about the similarities but the one thing I know is this:

Musk read the same stuff I did when he grew up.

Musk knows D.D. Harriman.  Just like I did, Musk admired D.D. Harriman.  However, Musk has become D.D. Harriman.

And for that, my hat is off to him.  D.D. Harriman is much more important than Tony Stark®.

And Harriman was willing to do absolutely anything to open space to humanity, convinced it was too important to leave to governments and bureaucrats.  Harriman manipulated stock, forged fake space-diamonds, and extorted advertising dollars from soda companies.

Musk feels the same way.  Musk formed SpaceX™.  Musk got involved in Tesla®.  One is his passion, one (even though he believes in the mission) is there to fund his passion.  Make no mistake:  Musk has created more applied rocket engineering faster than any person in history except maybe Von Braun (though Bezos is giving him a run for his money and has super-cool biceps for an old man).

Why not NASA?  Isn’t it their job?

During the 1960’s, NASA had a mission.  It was going to get three guys to the Moon, by the end of the decade.  Lots of engineers worked lots of long hours and made it happen.  In July of 1969, NASA dropped the mic after “One Small Step” and walked off the stage.  Mission done!

Well, almost fifty years on from that date, and six of the twelve men who walked on the Moon are now dead.  During the middle?  NASA developed one (anemic) space launch system – The Space Shuttle, whose sole purpose appeared to be to construct the International Space Station.  Why construct it?  So the Shuttle had a place to go, silly.

And now we have no space launch systems available to us except through the Soviets, er, Russians, and . . . Elon’s SpaceX™, which currently plans to have a manned launch of its Dragon/Falcon taking place in early 2018.  The first manned Orion flight?  Maybe 2023.  Maybe.

Why is NASA so sick?

The original group they hired were engineers.  Their job?  Get into space, get onto the moon.  Then they fired most of them, but kept enough to send out a fairly constant stream of unmanned probes as well as lame manned space missions.  But during the 1970’s they also hired a lot of administrators.  And people who had no connection in any respect to a spacecraft, or science, or aeronautics.

Except for brief bursts of public interest when something worked really well (Viking and Voyager) or when something worked really poorly (Challenger and Columbia), NASA has reached an irrelevance in national policy.   NASA appears to only be important when it comes to funding large amounts of money to projects that take place in certain Congressional Districts in certain strategically important states.  In Houston they love NASA, or at least NASA dollars.  Efficiency?  Progress?  Why would you need those things?  Heck, we can have astronauts but not have spaceships!

These are the depths that NASA has fallen to showcase its technical bankruptcy:  it has a division called the “Solar System Exploration Research Virtual Institute.”  This division produced 5,000 braille books about the eclipse for the blind.

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These are the official shot glasses of the Manned Spaceflight Center.  At least it’s one way to blast off?

I am not opposed to a company doing this – I’m not even opposed to a government agency producing books in braille, especially those that aren’t available on audio.  But I am opposed to NASA doing it.  Why?

NASA’s mission is:

To pioneer the future in space exploration, scientific discovery, and aeronautics research.

Nothing at all in there about getting blind people books about an eclipse.  Nothing close, so this is a symptom of a system that has gone beyond dysfunctional to trivial.  A dysfunctional system (or in this case, organization) just can’t get anything done.  A trivial organization works on everything.  It invents steps where none need be, make-work (like the books), bureaucracy (credentials for everyone!), and hurdles (did you file the right form?) until Pournelle’s Iron Law of Bureaucracy is achieved:

From Jerry Pournelle himself:

Pournelle’s Iron Law of Bureaucracy states that in any bureaucratic organization there will be two kinds of people:

First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration.

Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers’ union officials, much of the NASA headquarters staff, etc.

The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.

I think that in NASA they actively look for jobs that they can do that are:

NASA could spend time and effort designing a new hypervelocity spaceplane, but that’s hard!  And someone could get hurt, and that would be bad publicity.  And we know that we as a society will only allow people to be put upon the equivalent of 2,000 tons of TNT (Saturn V) if it’s totally safe!  Otherwise, it’s an outrage!

So, faced between making a new launch system that might help get people into space OR putting together a braille book?  Let’s go with the book.  It’s A. Easy and B. Safe.

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These are the official flip flops of the Manned Spaceflight Center.  They look Safe, unless you blow out your flip flop and step on a pop top and cut your heel and have to cruise back home.  It’s okay, because there’s booze in the blender and you have the Official Manned Spaceflight Center shot glasses.

The only way to avoid the Iron Law and the A. Easy and B. Safe people is to have a personality that keeps focus on the goal.

And since NASA administrators don’t go in and fire everyone in NASA not involved in the mission, you can be certain that they’re fine with . . . whatever the heck it is that NASA is doing.

How is SpaceX® Different?

Elon Musk is a laser of focus on getting spacecraft into the air.  People at SpaceX® want to work long hours, and if you look at jobs on their website, it notes that long hours, working evenings and weekends are probably going to be a thing for you.  And, want to get fired?  Talk about part of your “mission” at SpaceX® being producing coloring books on planetary nebulae.

Sounds like old Harriman himself, “. . . sweet talk them into long hours – then stand back and watch them produce.”

Some Libertarians HATE Musk because of the government subsidies that have driven money to Tesla® and even SpaceX©.  I can understand that, especially if their goal is less government.  Heck, I’d like less government.  But even though Musk has to go through roundabout ways to get only a portion of NASA’s funding, he’s running circles around them on talent recruitment, technology development, and actual results.  We have a choice if want to really get into space.  Elon appears to be the only winning answer (unless Bezos is holding back on a few aces).

Musk could fly people in space tomorrow, if they’d let him.  NASA is six years out.  Six years out.

What does Musk plan to do in the next three?  Send a capsule (unmanned) to Mars.

I’d be surprised if Orion ever actually flies people.  NASA seems incapable of spaceflight, and, really incapable of anything more complicated than Twitter.  But if Orion ever flies, I imagine that in orbit the Orion astronauts will get to see Elon’s butt pressed firmly against the window of his Mars Transfer Ship (Red Dragon 11) as he gives them a full moon (pardon) as a parting gift as he heads to Mars.

It’s a long trip to Mars.  I imagine that Elon might take a book or two along with him for the trip.  Probably not “The Man Who Sold the Moon.”  But maybe Dune, or Starship Troopers.

What would D.D. Harriman read?

I’d like to think he’d bring my blog . . .

Hey, everyone (including you, Elon) you can subscribe, and it gets sent out directly when I hit the publish button.

Elon Musk, The Terminator, and The Matrix

“Look at it this way, Mulder, by the time there’s another invasion of artificially intelligent, dung-eating, robotic probes from outer space, maybe their über-children will have devised a way to save our planet.” – The X-Files

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Ahhh, remember when the Spaniards led the way to the nuclear missile base?

This is the second of three posts during Elon Musk Week® – the first one is here (LINK), and the third one is here (LINK)Elon Musk: The Man Who Sold Mars.  This one is (in theory) about health.  Kinda.

When I was a kid, one night on Creepy Creature Feature (LINK) they showed “Colossus: The Forbin Project.”  The really short version of the movie was that the Department of War (let’s call it what it is) built a computer to control all the nuclear bombs.  The Soviets built one, too, called Guardian.  I’ll let Wikipedia spoil the ending:

Colossus arranges a worldwide broadcast in which it proclaims itself “the voice of World Control”, declaring that it will prevent war, as it was designed to do. Mankind is presented with the choice between “the peace of plenty and content, or the peace of unburied dead”. The computer states that it has been monitoring the attempts to disarm its missiles; as a lesson it detonates two of them in their silos in the US and the USSR, killing thousands, “so that you will learn by experience that I do not tolerate interference”. The computer then transmits plans for an even larger computer complex to be built into the island of Crete.

Colossus later announces that the world, now freed from war, will create a new human millennium that will raise mankind to new heights, but only under its absolute rule. Colossus informs Forbin that “freedom is an illusion” and that “in time you will come to regard me not only with respect and awe, but with love”. Forbin responds, “Never!”

In 8th grade over a decade after the movie first came out, in some sort of weekly school magazine, they had a script for a play of the Forbin Project (I am not making this up).  We were going to film it, because for some reason the school had this great, hulking video camera (weight, approximately three tons) and a VCR that they never used (weight, approximately six tons).  My teacher couldn’t figure out how to make the VCR not auto-rewind every time we hit “stop.”  Thus ended my budding film career.

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It’s the future!  Why aren’t we all wearing jumpsuits???

This kills me, because I was playing Doctor Forbin.  (sigh)  At least I won the lip-syncing contest that week with the Lido Shuffle:

It looked a lot like this:

butters dancing

In the Elon Musk/Mark Zuckerberg autistic billionaire slapfight over Artificial Intelligence, I’m siding firmly with Elon Musk.  AI is the second most dangerous threat that humanity is now facing, besides the potential for another KISS comeback tour.  Gene Simmons has soooo much extra skin, and Paul Stanley might break another hip.

Given that Elon and I are in agreement that AI is in the “as dangerous as being changed to a hungry pitbull with bad gas” (the pitbull, not me), I was really quite surprised when he announced the latest one of his ventures, which is mind-bending (literally in this case):  Neuralink®, which will link the human brain, via AI, to the . . . well . . . infosensesphere.

Yes, you read that right:  direct linking of the human brain (through a machine interface) to the infosensesphere.

And it is possible?  It’s already starting, though right now we’re using Playskool® versions of this technology.  Cochlear implants are allowing the deaf to hear with 16 bit fidelity.  (No, not everything sounds like Super Mario Brothers, but that would be cool.)  We can read pictures of dreams people are having and record them.  We can hook a machine eye into the nervous system of blind people, and they can see rudimentary pictures.  All of this was science fiction ten years ago.

I had to make up a word like “infosensesphere” because I’m pretty sure we don’t have a word to describe the concept.  Neuralink© implies that we’ll be able to:

  • Google without being able to spell (oh, wait, that’s done).
  • Share Microsoft® Outlook™ schedule information . . . wait, that’s done, too.
  • Share feelings. Like sad.    Thankfulness.  Salty.  Drunk.  Mind to mind.
  • Have all of the data available in the world instantly, essentially melding the Internet in as your own personal memory. You won’t search – you’ll remember.
  • Shut down your current input sensations, like pain, or headaches. (Not the headache that Johnny Depp’s career is, but real ones.)
  • Share sensations. Like . . . all of them.    Even that.  And that, too.
  • Co-opt AI. Artificial intelligence would be part of us.  And, we’d be part of it.

Essentially, you’d be hooked up to all of humanity.  All of the time.  When a friend felt joy at finding a new flavor of Pez®, you could feel the joy.  And taste the Pez©.  All when your friend did.  Think texting is addictive?

Additionally, I’d be surprised if you couldn’t record all of it.  That feeling of joy when you got your first date?  You could feel that way again, every day.  That feeling of sadness when she broke up with you?  You could edit and delete it out.

I start to come up with some huge questions:

  • What about privacy? Think fighting with a spouse is bad now?  What happens when they see what you’re really thinking about them in the middle of a fight?  Oh, and if you don’t share, the fight gets worse.
  • If you think Facebook® envy is bad, how bad would it be to envy everyone and their feelings?
  • What if, instead of all your base are belong to us, all your brain are belong to us?  What if they delete everyone’s memories and hold them for hostage?  Or just flat out steal your passwords?
  • AI uses you as data storage and as a remote appendage. If only there was movie, starring Keanu Reeves that might be able to show us what this might be like . . .
  • Would you have to share with your Boss? No fake calling in sick.  And if they asked you to share your feelings about them, would you?  Even the fantasy you have about them being sealed in a barrel of live snakes and lemon juice after covering their body with paper cuts?
  • What about free will? Now that your brain is tethered to everyone else, how do you push your ideas to the front . . . of your own brain?
  • Why bother to climb Everest when you can experience that climb without leaving your basement? I have to use explosives and threaten to shut off the Internet to get The Boy and Pugsley away from their computers now.  Why would they ever get off the couch if they were Nugget-Netted© in?
  • If you thought drunk texting your old girlfriend was bad . . . wait until you send drunk feelings. Oh, and you get to remember it in vivid detail the next day.  And she can share it with everyone.  And it’ll be on record.
  • At what age would a kid get his net? What happens when it’s mandated they get one?
  • What happens if it breaks down? You’ve adapted to life with what is (essentially) a super mentally processing hive-mind schizophrenia.  What happens when you’re back with a tricycle (with a bent back wheel) for a brain?
  • What if you can’t (for whatever reason) get the implant? Is there a special island they keep you on?  A zoo?

But think of the positive sides?

  • You can feel like you ate a chocolate cream pie. Without eating one.
  • The dryer would tell you when your clothes were warm, hot, and ohhhh-so-fluffy.
  • Weight loss problems would be a thing of the past. You could shut off hunger.
  • You could literally put yourself on autopilot for the work day while your consciousness read comic books inside your brain. But, let’s be real – in this type of future, why would you even have a job?
  • It would likely be impossible to murder someone. Or start a war.  You’d probably be forced to feel the pain of others, in whatever passes for school.
  • No more ACT, since everyone would have a perfect score. No more college, either.
  • Oh, and you could put yourself on autopilot for the gym, too! You’d be hulking out whenever you wanted to!

This type of technology is amazing in its scope.  It changes not only civilization, but changes every individual human in the future.  If we were to catapult ourselves 200 years into the future we would fundamentally not be able to understand civilization – it would be as if ten million years of evolution took place.  Thankfully, no sixties song ever dealt with this question . . . oh, wait!

Again, I agree with Elon that Artificial Intelligence is dangerous, but at least I can imagine being chased around by Terminators® until John Connor® takes them out.  I cannot, however, imagine the perfect melding of machine with my brain, and my brain with yours.  Maybe Colossus can help us figure out what that might look like?

Paging Dr. Forbin . . . .