Category: Wealth

Bad Bosses, Part I, Including Garfield as Written by H.P. Lovecraft

“Michael, we don’t have a lot of time on this earth!  We weren’t meant to spend it this way.  Human beings were not meant to sit in little cubicles staring at computer screens all day, filling out useless forms and listening to eight different bosses drone on about mission statements.” – Office Space

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“That’s what she said.”

I had just gotten the greatest performance review of my life.  It was outstanding in every way.  My boss (let’s call him Miller, it goes with the song) went on and on about how I was a stunning example of every possible good quality a person could have, and how I was universally loved, admired, and generally made women fertile just through a fleeting glance, and made men better than they thought they could be through the slightest example.  If the company needed someone to walk across a pond, on the top of the water, John Wilder was your guy.

For about a second, I bought it.  Flattery works because your mind really wants to believe all those nice things.  It’s like a horoscope, keep using nice adjectives, and you’ll find one that the person is already predisposed to agree with.

Then I thought about it – this guy Miller, my new boss, has been with the company about a month.  He barely knows where his office is and he’d only visited my office once.  For him to write a performance review like this?  I didn’t believe it.  As much as I’d like to think of myself in such glowing terms, I rejected his flattery.

Beyond mentally rejecting his praise as an attempt at manipulation, I also made the mental note never to trust Miller.

Why?

Anyone who will be quick to praise will be quick to condemn.  Besides, when I looked at him while he was smiling, he only smiled with his mouth – never with his whole face.  He was smiling because he was “supposed” to be smiling, not because the smile was genuine.  During those smiles Miller had the dead, flat eyes of a predator, like he was attempting to see if you were fooled and really believed the smile.

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I never did meet Miller’s wife – I think her invisibility suit worked pretty well.

I was careful to document every conversation with him.  Always trust your gut, people, unless your gut says socialism is a good deal.  If your gut says that, remember:  never go full Bernie.

I worked pretty far away from the company headquarters, where Miller’s office was.  I set up weekly calls to keep him informed on what I and my team were doing.  I’d done this in the past for my previous bosses.   These calls allowed them to understand what we were doing, and digest it for top management if they needed to.

Except.

Except I found out from a colleague that during these meetings, most of the time Miller was shopping for things online, teaching himself to play the banjo, translating Garfield® into cuneiform (did they even have lasagna in ancient Sumeria?) or, in general, not paying any attention to what I was saying.  My colleague noted that Miller generally wasn’t listening at all.

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If you get the cuneiform wrong and accidentally translate a passage from the Necronomicon© this is what you get.

Normally, that’s not a problem, I ran had been running my end of things for years, and after a few years you get used to the usual problems – and are expected just to handle them.  But my boss had a boss – call him my Grandboss.  When my Grandboss wanted to know about some aspect of what I was doing, he’d ask my boss, Miller.  Since Miller had literally no idea (despite weekly written reports and the phone call mentioned above) what I was doing, he did the simple thing:  he made it up.

Most of the time, it worked fine.  My Grandboss generally had an idea of what was going on, even if the specifics were a bit off.  But when the results my boss made up promised didn’t happen?  The Grandboss got mad.  Very mad.

So mad, in fact, that my Grandboss called me up one day and was yelling.  I explained, calmly, the real situation and the plan, and that seemed to calm him down.  He checked up a few more times to make sure what I said was really happening, and then went away.  But the troubles with Miller continued.  Our conversations became a random affair – one day he would be polite.  The next day, he would be literally yelling over the phone.  What had started out as a bad feeling based on that too-good-to-be-true performance review had morphed into a full-blown sitcom level bad boss.

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I mean, can you imagine such micromanaging?

I had one or two advantages – first, I had been at the company much longer and had several well-placed friends, and second, I wasn’t a deceitful sack of weasel meat.  I’m certain that my boss was lying based on my informants at headquarters, and I’m equally certain that the things Miller was saying weren’t very positive. It’s been several years, and my career is still recovering from his “help.”

I’m ashamed to admit it, but one of the happiest days of my life was when Miller got fired.  “But, you can’t fire me!  You don’t even know what I do!” were his comments as they took away his keys and allowed him to pop his personal possessions in a box and gave him a complementary cement bag (for the weight, dear).  And, he’s right – the Internet sure won’t surf itself.

As near as I can tell, the company didn’t skip a beat in his absence.  I’ll also admit that on the day he got fired, I had one of the best workouts of my life.  The entire time I worked out that lunch, I just listened to Mack the Knife on a loop for 45 minutes of the best treadmill time I’ve ever put in.  I smiled every second.  Why Mack the Knife?  I have no idea.  I rarely listened to it before, and haven’t listened to it even one time since that day until tonight.  As I write this, it’s on a loop in the background.

It may be a song from a Marxist play written by a Leftist, but it makes me happy that it made so much money – after the Marxist author died.  Also?  The most upbeat song about multiple murders.  Bonus trivia:  Lotte Lenya, mentioned in the song, played Rosa Klebb in the James Bond movie From Russia with Love.

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As you can see, she’s the perfect Bond® girl for 2019.

I’ve tried to feel bad about feeling so good because Miller was fired.  Even years later, it’s still a pleasant memory.  Yeah.  I shouldn’t feel good about that, but I do.

Okay, the choice was a single post that was twice as long as this, or this broken into two parts.  I chose two parts.  Next part is on Friday.

Too Big To Fail: Banks, Bikinis, Toddler Throwing and an Amy Schumer Joke

Stan:   I got a hundred-dollar check from my grandma and my dad said I need to put it in the bank so it can grow over the years.

Bank Manager:  That’s fantastic, a really smart decision, young man.  We can put that check in a money market mutual fund, then we’ll re-invest the earnings into foreign currency accounts with compounding interest aaaand . . . it’s gone.  – South Park

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I hear the Slovakian banks moved to digital currency.  They ran out of Czechs.  It’s okay, it’ll be fine.

Last week we talked about the Angle of Repose (The Funniest Post You Will Ever Read About Angles of Repose, Virgin Physicists, Economics, and Population).  The conclusion, stated briefly is that our economy and indeed our civilization can be compared to a sandcastle.  Like a sandcastle, the economy is built out of a myriad of individual particles, glued together by innovation, hope, aspiration, and desire to watch free naught movies on the Internet.  Like a sandcastle, if the conditions aren’t just right, the walls of the sandcastle can crumble in a growing cascade.  An even faster way to make the castle fall is to drop a shot put on it.  It’s especially fun if the five year old that made it is still working on it when you drop the shot put.

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Sadly this Canadian shot putter was disqualified after it was identified she was taking age-accelerating drugs to age more quickly so she could qualify for the Senior Olympics®.  Her only defense was, “I identify as 86 years old.”

Unlike a sandcastle, our economy isn’t made of grains of sand of rough uniformity.  If the average person’s net worth of $97,000 was a single grain of sand weighing 0.011 grams, Jeff Bezos’ $110 billion dollars would be a 28 pound steel ball, the perfect size to ruin a kid’s day.  But even that isn’t large compared to a bank.  JP Morgan’s® $2.5 trillion dollar assets when compared to that single grain of sand would weigh nearly 624 pounds.  If I had to pick between lifting 624 pounds of steel or 624 pounds of butane, I’d choose the butane.  Why?  It’s a lighter fluid.

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I imagine this toddler weighs about 28 pounds.  It’s a perfect competition size toddler, depending on the shape of its head, of course.  Sadly, I can’t throw one farther than about 35 feet.

The size and scale of international banks today is huge, and I’ll admit when I put together the weight comparison above, it was the first time that the vast scale of the international banks was even slightly comprehensible, though mind boggling – it takes me from a weight I don’t notice, to a weight that I’d have to use both arms to lift.  Okay, I’m lying.  Maybe if I put my back into it I could lift it with one arm.

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Thankfully, my net worth actually weighs less than pocket lint.

In the 1984, a bank named Continental Illinois® was failing.  As the cratering price of crude oil hit, the bank experienced massive losses.  Fearing a bank collapse, depositors pulled their money, but of course the bank had loaned it out.  Continental Illinois™ was bailed out through a combination of cash infusions ($5.5 billion), emergency loans ($8 billion), and change the Federal Reserve® found in Paul Volker’s couch cushions.  In congressional hearings about the matter, a congressman noted that Continental Illinois© was “too big to fail.”  The phrase had been used before, but this time it stuck – a Google™ search for “too big to fail” brings up about 5 million pages, most of which are about Amy Schumer.

The reason that they bailed out Continental Illinois© wasn’t that they were good natured.  The reason that the Federal government bailed out Continental Illinois was that they were scared to death – they had no idea what would happen if they just let the bank fail.  Would it bring down the economy?  No one knew – and just like wondering exactly what’s in a hot dog, no one was willing to find out.  And don’t tell me what’s in a hot dog, I’m pretty sure I don’t want to know.

What were people worried about?

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I asked my bank teller to check my balance, and he tried to push me over.  Nah, I’m kidding.  He threw a snake at me.  I should stop keeping my money at the river bank.

A bank failure to most people is nearly risk-free.  The FDIC® (Federal Deposit Insurance Corporation©) extends insurance to cover more money than the average family is worth.  But a small business or farm, even one that doesn’t have a multi-million dollar net worth, might have enough money moving through the account that a bank failure might trigger that small business to fail since its cash was . . . gone.

If that business had debts to other banks, it would then be in default, and cause a loss at the next bank.  If the next bank doesn’t fail, there are still problems.  The next bank will lend out money only to customers that it knows will pay it back – if it has sustained losses it won’t want to make loans that are risky.  A small town farm bank failure is bad and might devastate a community if it causes other businesses to fail.

When Continental Illinois™ started to fail, it was the seventh largest bank in the nation.  No one had any idea what its failure would do to the country, so it was not allowed to fail.  The government looked for someone to buy it, but they had no luck – like a Leftist spending his own money, a buyer for a massive bank that is failing is fairly difficult to find.

But let’s go back to JP Morgan®.  How did it get so big?  If you rewind the clock, the average size of a bank used to be pretty small, operations used to be limited to a single state, and there were no branches – each bank in each town was an independent entity.  Sure, one person might have owned more than one bank; even dozens of banks.  Each bank, however, had to stand on its own.

With that kind of small exposure in both size and location, banks limited the damage that they could do if they failed – over 9,000 banks failed during the Great Depression.  Sure, that was devastating, but I would argue that the failure of just one bank, JP Morgan®, would far exceed the damage that was caused by the failure of those 9,000 banks, each of which certainly weighed less than a toddler.

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I was going to add transparent bikini graphics, but The Boy went off to college so you’ll have live with these. 

Is there an argument for large banks?  Paul Krugman thinks so.  And if Paul Krugman is for it, I’m probably against it.  If Paul Krugman said that Wilder, Wealthy and Wise™ was his favorite blog?  I would argue with him, even if it involved a knife fight, which would probably work out okay for me because he’s old and weak and I smell like hamburger.  Krugman’s argument is, more or less, that bigger banks are more efficient so we should regulate them properly and let them live.

My counter to Krugman’s drivel is that is that the banking regulators are not working for the Federal government, they are working for the banks.  Most banking regulators want to work for the big banks, because that’s where the money is.  Actually regulating the bank would doesn’t look good on your resume.  This isn’t my imagination:  I actually had this conversation with a banker who had been a regulator.  His conclusion was the only real way to get fired as a Federal banking regulator was to do your job.  Come in late?  Go to sleep at work?  Surf porn on the Federal computers?  All that’s fine.  But ask Wells Fargo® to follow the law?

I smell a firing.

Big banks create a risk to the very existence of our current economic system since they have the unique ability to take profits when things are going well, but if they screw up?  You and I are paying.  I rate this risk as not as bad a risk as the drunken sailors masquerading as politicians in Washington, but still a pretty big risk.

From the above, I think it’s obvious what the downside is to having larger banks, since they risk our economy as a whole, and that’s not even mentioning Modern Monetary Theory (The Worst Economic Idea Since Socialism, Explained Using Bikini Girl Graphs), or fiat currencies (Rome, Britain, and Money: Why You Can’t Find Fine China after the Apocalypse).  And, make no mistake – the failure rate for all businesses nears 100% over a long enough timeline.  Just ask Tyler Durden.

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I Am Joe’s Inflamed Uvula.

What’s the downside of breaking banks into smaller units, and perhaps limiting their capitalization to what Jeff Bezos keeps in his “spare mistress” account?

  • First, there’s more overhead. You need competent people to run the various independent branches, but what you get is the resiliency of an inefficient system – the risks that will cause all of the banks to fail are remote.  So, breaking apart banks would lead to more jobs for competent people.  Yes, that would lead to lower profits for the banks.  Yes, I’m a capitalist.  No, that’s not bad.
  • Second, if they’re limited to geographic regions, the banks that are in regions that might become economically depressed would have less money to lend. That’s probably okay.  I’m pretty sure I don’t want money from my state going to those heathens in Rhode Island, so I’m okay keeping it nearby.  Besides, if there are good opportunities here?  Money will flow in.
  • Third, smaller banks could That would make investors more likely to keep an eye on their investment.  And if bad things happened?  They’d be limited to failures that we could deal with, like forgetting to pay the cable bill.  Somebody nag me on Friday.
  • Fourth, it would be harder to borrow a few billion dollars. Okay, this can be solved several other ways for the legitimate requests to borrow a billion dollars, like needing to buy a first edition .

Even with smaller banks, some of the conveniences like ATMs could still remain in business – that sort of networked information exists now, so it could exist in the future.

I brought up the example of Continental Illinois© bank.  The name wasn’t at all familiar to me, but I did look up what happened to them.  Continental Illinois® was sold to Bank of America™ in the 1990’s.  Bank of America© is the second largest bank in the country.

How to solve the problem of too big to fail?

Make the too big to fail banks even bigger.  Is that a problem?  Is dropping a 624 pound shot put on a sandcastle a problem?

Nah, it’ll be fine.

Zen and the Art of Marshmallows, Delayed Gratification, Soviet Tanks, and Russian Motorcycles

“Look, the marshmallows aren’t even toasting!  They remain a comfortable sixty-eight degrees!” – The Tick

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Come on, we know that the real villain in Stranger Things™ should have been Stay Puft®.

Once upon a time when I was a five-year-old Wilder, my kindergarten teacher gave me a marshmallow.  “Johnny, if you can wait five minutes before eating that marshmallow, I’ll give you a second marshmallow, and you can enjoy them both.”  The teacher then walked out of the room, closing the door behind her.

I thought furiously.  This must be some sort of trap, with stakes that high.  I looked around for cameras.  Aha!  There they were, disguised cleverly as a new box of chalk and a pencil sharpener.  They’re monitoring me, just as I suspected.  Little did they know, I had anticipated this entire scenario when I had debriefed my friend Thomas A. Anderson* (known on the Dark Web® as Neo™) the previous day.

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Also?  Keanu never ages – he saves that for the picture in his attic.  He looked the same in kindergarten as he does today.

With effort, I slowed the beating of my heart using a technique I had learned from Master Ginsu® during the years I had spent training in Tibet to be a Fake Purse Ninja©**.  I had trained.  I was ready for this.

Very slowly and subtly I pulled a second marshmallow from the front pocket of my Tough Skins® jeans from Sears©.  I put it in my palm.  Quick as a cobra, I then reached out for the marshmallow the teacher had left, but only appeared to leave it there on the plate.  In reality, I had swapped out the marshmallow on the plate for the one I’d brought in my pocket.

In a practiced move, I pretended to pick my nose while in reality I was eating the marshmallow the teacher had left to tempt me, leaving the imposter I’d brought from home in its place.  I felt the rush of the sugars dissolving in my mouth.  Now I could finally understand what Spot was trying to tell Dick and Jane.  The fools!

But I shook my head to clear it of these deep thoughts.  I had finished my surreptitious swap just in time – I heard the footsteps in the hall outside the room, and saw the two dark shadows under the door, letting me know that the teacher was looming like a monster that had slowly slithered out of the bowels of the Earth and decided to go into elementary education.  My heart, despite all of the training began to race again.  The door knob turned.

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Who knew it was that easy?

The teacher had another marshmallow, and started to place it next to my cleverly replaced fake.  She stopped.  She picked up my marshmallow, the one that had brought from home that had been sitting in my pocket for six hours before I made the swap, and studied it.

“Oh, Johnny.  This is gross.  There is lint in this marshmallow.  And bits of string.  And, is that a BB?  This won’t do, this won’t do at all.”  Drat.  I never counted on the relative filth of my pockets giving me away.

I had been caught.  I knew that this would go in my Permanent Record.  Ruined!  And all at the age of five.  Perhaps I could salvage my defeat and defect to the Soviet Union so I could be closer to Bernie Sanders?

Before I could go to Plan B and steal an F-15E from the nearby airbase and leave the country at Mach 2.5 my teacher continued, “No, this won’t do at all.  Let me get you a fresh marshmallow.”  She left the room and came back with two clean, pristine, marshmallows.

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It also felt like this when I swapped our baby for a baby with a better jawline at the hospital just after “Pugsley” was born.  Those nurses hardly ever look away.

Success.  And she never knew what hit her, which would make this the perfect crime.  I ate the second and third marshmallows.

Maybe I overthink these situations?

Nah.

I left the school and then a helicopter exploded behind me as I got into the school bus for the trip home, because that just looks really cool.  And I didn’t even look back.

Okay, absolutely none of that was true, except the exploding helicopter.

But what is true is that a Scientist did a study where they gave a four or five-year-old a marshmallow and promised them a second marshmallow if they didn’t eat the first.  They then followed these kids for 40 years.  Yes.  40 years.  Here’s a (LINK).  Turns out that those kids that waited for the second marshmallow had higher SAT scores, were skinnier, drank less, got stoned less, generally dealt well with stress and had a lot of friends.

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The best way to win an argument with your wife is if it never happened.  Enough vodka works, too.  Does that make this the “Ketamine Maru” scenario?

To be clear:  they never gave me the marshmallow test, because I would have completely Kobayashi Maru’d*** it.  Besides, they were too busy taking knives away from me.  Yes.  In kindergarten.  That’s how you spell freedom.

The concept of the marshmallow test is that the ability to delay gratification is good, and leads to better life outcomes.  We see this all of the time – the ant and the grasshopper was a famous fable – the ants work all summer while the grasshopper goes to meth parties.  Then winter hits, the ants start to party, but the grasshopper is left all tweaked out, tapping at the window of the anthill.  The ant party then intensifies to drown out the tapping and then everyone cheers when the grasshopper finally shows the good sense to just die already.

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Ahhh, Darwinian fables.  They skipped over the part where the ants eat the grasshopper’s frozen corpse.

There is a balance that defines a struggle between now and the future.  If you’re skewed too far to the now, you can certainly bet that all of your decisions will be made without regard to the consequences.  I want the marshmallow now, dangit!  The teacher might not bring me a second marshmallow.  There might not even be a second marshmallow.  Heck, the teacher might not even come back and I’ll be stuck in this room forever.

For most of my life, I’ve lived the “marshmallow later” life.  I think the biggest example of this is that I buy life insurance.  On my life.  I use money that I could use to pay for buying a vintage Soviet T-34 tank (I found one for sale in Poland) and spend it on life insurance.  Okay, $60 a month won’t buy a vintage Soviet T-34 tank from Poland, but you get the picture.

But for the rest of this post, I’ll use (sometimes) Marshmallow to refer to future orientation, and Anti-Marshmallow to refer to “eat it now” orientation.

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It’s a project car, honey.  The guy who sold it to me swore it was one owner.

Future orientation is spending money on something that pays off ONLY IF YOU ARE DEAD.  You will never, ever in your life receive a dime from your own life insurance, unless you have a comically complicated plot to fake your own death.  Yet, if you’re like me, you pay for it so your family can have the best tier of Internet service after you die, because after all, YouTube® isn’t going to watch itself.  In my mind, life insurance is the ultimate Marshmallow test.

Preparing for disasters is another Marshmallow test (Be Prep-ared) that over 90% of your neighbors don’t do at all.  Sticking to a diet is another (The Last Weight Loss Advice You’ll Ever Need, Plus a Girl in a Bikini Drinking Water) that’s not real popular.  I will admit that I buy my share of silly crap on the Internet.  I have several hobbies worth of kits and tools and stuff ready to build when I retire, and that’s Anti-Marshmallow behavior, but the only real hassle with them is finding a great place to store them until I’ve got the time to mess with them, what with the basement being full of ants, grasshoppers, and empty ketamine argument winning bottles.

A few weeks back I made a joke, “I could either spend it on me now, or spend it on an extra box of Depends® when I’m 90.”  If one were to truly be Marshmallow, one would always pick the future comfort, over the comfort of today.  But life is a balance.  If all you do is pick the future, you become the janitor who worked 80 hour weeks for 80 years cleaning schools to leave Harvard® an extra $20 million to turn liberal rich kids into CNN® anchors.

If you become completely Anti-Marshmallow, well, you’re broke.  Those are two extremes.  Maybe this time you want Moderation?

Last week I mentioned that Moderation is for Monks, and Adam Piggott, Gentleman Adventurer added some great thoughts.  You can read it here, and you should (LINK), in fact you should be reading him daily.  Anyone who says, “Be the very best bastard that you can be,” is worth your time.

And he says moderation is good – moderation in having a cigar, and not the box.  Splitting a bottle of wine with your wife on Friday, but not on all days ending in the letter y.  And that’s Discipline, which is very Marshmallow.  But is Discipline moderate in 2019 when the motto of the Western world is if it feels good, do it?  Probably not.

But yet, there’s a time to be Marshmallow, and a time to be (at least a bit) Anti-Marshmallow.  Maybe a T-34 is overkill – I don’t live anywhere near Kursk****.  But maybe, just maybe, I should get a Ural®.  The Mrs. has already signed off on it and said “You should get that.  It looks cool.”  To Marshmallow or to not to Marshmallow.  I guess to be Marshmallow, at some point you have to eat the marshmallows.  Otherwise Harvard© will.

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I hear Elon Musk is including anti-gravity as a new Tesla® feature.  If I bought a Ural®, I’d skip the Russians and the machine gun, because the Russians would drink all my booze and then invade Colorado only to be thrown back by a plucky school Spanish club.*****

Me?  I don’t like marshmallows all that much.  Except on ‘smores®.  And then I roast mine slowly to get the full mushy goodness without it turning into something that looks like a cat caught at Hiroshima.

Which, I guess is the Marshmallow way to eat marshmallows.

 

*The Matrix.  Too bad they never made a sequel to that movie.

**Bowfinger.  If you haven’t seen it, you’re dead to me.  Yes, it’s that funny.

***Star Trek II, The Wrath of Khan.  Really?  Please tell me you already knew this one.

****Sort of like Burning Man®, but for tanks. 1943.

*****Nope.  You can figure this one out.

The Impending End of The Age of Oil. But Not This Week.

“You have raw emotion deep under your surface.  Frack it!” – The Simpsons

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From the movie Sad Max®:  Beyond Soy Latte™.

Energy rules our world.  Advanced civilization depends entirely on the availability of inexpensive energy, and wars have been fought for energy, and lost because of the lack of energy.  Every task you or I do during a day is made easier by the availability of that energy.  Every task.  Even something as simple as a hike in the woods is made easier due the hiking shoes I wear that incorporate polymers and plastics and artificial fabrics made possible through cheap energy and more specifically:  cheap fossil fuels.  Cheap energy gives us fresh strawberries in winter, and baby oil for sunbathers in summer.

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Even though the oil changes are more fun, I imagine the upkeep is more expensive than a Buick®.

I’d even make the case that when energy is cheap, freedom flourishes.  Why have a slave?  It’s much cheaper to have a gas powered weed trimmer.  Slavery is immoral, but cheap energy removes that pesky incentive.  Why have serfs?  You have to feed them, which is a big drawback.  If the Russian Emperor had used tractors instead, he might have lived long enough to be on Dancing with the Czars®.

Cheap energy is freedom.

One of the biggest recurring questions that has popped up (again and again) during my lifetime has been the impending end of the Age of Oil.  If you say “impending end of the Age of Oil” in a really deep, booming baritone like Brian Blessed it sounds even cooler.  The first time the impending end of the Age of Oil reached mass public consciousness was in the 1970’s, and for good reason.  Texas had passed its peak in oil production in 1973, it was thought that every year after would see the production decline.

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True Life Snippet From Stately Wilder Manor:  Whenever I agree with The Mrs. by saying, “Indeed” she says, “Now say it like Brian Blessed.”  And she’s serious.  She won’t let me say the word “Indeed” without impersonating Brian Blessed.

How crazy were we for oil in the 1970s?  When oil was found in Alaska on the North Slope, several major oil companies put together a four-foot wide (16 meters) pipeline that brought oil 800 miles (6 kilometers) from the Arctic sea down to the Gulf of Alaska.  At the time, the project was one of the most ambitious construction projects in United States history, and cost the equivalent of $34 billion 2019 dollars, or about what Elon Musk spends on weed and hair implants in a year.  It was expensive, and even in the 1970’s the lawyers and environmental groups had their knives out.  In 1970, they were all NIMBY – Not In My Back Yard.  In 2020?  They’ve gone BANANA:  Build Absolutely Nothing Anywhere Near Anyone.

Nothing as grand or great as the Alaska Pipeline will ever be built again in the United States.

After the Alaska Pipeline oil started flowing and the United States sweet-talked the Saudis into making oil cheaper than a date with Miley Cyrus, oil concerns continued – with oil companies looking for oil in ever more remote locations, including the a mile under the sea, couch cushions, and the faces of teenage boys.  Billions were invested in both conventional oil (think about a Texas oil derrick) or unconventional (think about the oil platform used by a James Bond villain as a secret hideout).  Exxon© even spent millions trying to learn how to mine shale, crush it, and cook it so that it could be turned into Happy Motoring™ gasoline, but gave up.

These concerns disappeared in 1999 when it became obvious that if you wanted a barrel of oil, in the future all you would have to do is order one on the Internet via Hotmail® after you looked it up on AltaVista™.  At that point The Economist© had a woefully stupid cover proclaiming that oil would be cheap from here on out since it was trading as low as $15 a barrel at that point, even though oil doubled in cost over the year.  In 2008, crude oil would hit its (so far) all-time high in 2019 dollars of $173.

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On a positive note, with her skin Meg Ryan could now do commercials for Jack Links® beef jerky.

The thought in 2008 was that we were certain to have hit impending end of the Age of Oil (indeed!).  How certain?  George W. Bush, an oilman president from Texas, was in favor of creating incentives to add ethanol to gasoline, despite the anguished cries of people who would rather have consumed the alcohol directly.  Ethanol plants appeared throughout the corn belt of the United States, turning seed, sunlight, fertilizer, and diesel fuel into food.  Which was turned into fuel.  Farmers loved this.

This led to yet more investment in energy alternatives – schemes to turn natural gas into ammonia for fuel, yet deeper wells into the ocean, fracking, turning coal into liquid fuels, turning “switch grass” into fuel, and any other silly idea that would could come up.  People even touted the coming “hydrogen economy” because they forgot that hydrogen had to be made using some other form of energy.  The world was needing an energy savior.

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Or, could he be the foretold Anti-Cat?

A Funny Thing Happened On The Way To The Apocalypse

Of course in 2008, the trend was clear:  impending end of the Age of Oil (indeed!) was upon us.  But one of the unlikely saviors had turned out to be real.

In 2012 if you would have asked me, I would have told you that fracking was just a great way to turn money into wasted fuel – it took almost as much fuel to make fracked oil as you got out of it – not a good investment.  In 2015, I would have told you the same thing – the fracking companies were losing money like there was no tomorrow – if you had to invest more energy (think Btu or kilowatts) into getting oil out of the ground than it was worth in energy terms, you were just sinking yourself faster by using that kind of energy – it’s like burning your blankets to keep your bedroom warm in winter.

I was putting together my notes for a Big Energy Post in October of 2018, and had even written the first few paragraphs (okay, 500 words or so) when my research was showing something different.  I skipped the Big Energy Post and moved on to another topic, since it was clear to me that my preconceived notion that fracking was a waste of energy might be wrong.  My research was showing something other than fracking was a waste of energy.  It was showing that fracked oil might actually be  . . . worth it?

It turns out that when anyone first starts doing anything, they suck at it.  And unless it’s me practicing singing, I have learned that if I practice, I’ll get better.  There’s even a curve that describes this – it’s called an “S-Curve” or logistics curve or learning curve.  When you first start walking, you suck.  When you first start driving, you suck.  When you first start, well, anything you’re awful at it.  Over time you get better, and the more you practice, the more competition there is?  The better you get.

If you have hundreds of people practicing something with billions of dollars on the line?  They get better.  Quickly.

And that’s the story of fracking oil in the United States.  Water usage in fracking is down.  Chemical usage in fracking is down.  Drilling costs, energy expended, and labor per barrel are down.  After practicing thousands of times on thousands of wells, companies have figured out how to frack a well to maximize crude oil production and minimize cost (and energy) put into it.  One metric I saw showed that fracked oil was now competitive (with a profit) compared with the cheapest oil on the planet – oil from Saudi Arabia.  Companies have gotten so good at fracking that natural gas in the United States is essentially free.

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I guess I’m not a fan.

Fracked oil is on a trajectory to be competitive with the lowest cost oil produced conventionally any place in the world.  And fracked oil has some other advantages – it’s “lighter” than conventional crude – that means it contains more gasoline and diesel, and less of the “heavier” stuff that is harder to turn into gasoline and diesel – think asphalt.

The United States is the largest crude oil producer in the world.  I never thought I’d type that sentence and it represent a real fact, but in 2019, it does.  The United States is, as promised by every president starting with Nixon, actually, really and for trues, energy independent.

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[Edit – Chart added after Lathechuck’s comment]

Was it alternative energy, like windmills?  No.  Was it the communist fever dreams of The Teen Girl Congress Squad®?  No.

Is it “sustainable”?  Kinda.  It is for a while.  There are an estimated (as of 2019) 1.7 trillion barrels of recoverable shale oil in the world, 293,000,000,000 of them are in the United States.  At 20,000,000 barrels a day in just the United States, using just United States resources, that’s forty years that we have from 2020 – until 2060 – to find an alternative, like, oh, nuclear.  And don’t believe me – here’s an actual clean energy evangelist who finally did that math and discovered . . . windmills are worse than natural gas as far as carbon emissions.

We still face headwinds – economic, exponential growth, two billion people that would love to hop the border to the United States, and communists that want to tear the place down.  But oil?  Oil isn’t the place to look for an apocalypse, at least this week.

And, trust me, if I hear a whiff that any of the above is wrong, I’ll pop it right back up on this blog as soon as I can confirm.

So, at least for today, Happy Motoring©.  We have maybe forty years to fix this, so let’s not waste it.  This has obvious foreign policy implications we’ll discuss in future posts.  Upside?  Why do we care about the Middle East anymore?

Economic Bubbles, Knife Juggling Toddlers, and Sewer Clowns

“Well, I don’t think it’s officially called bubble bath if the bubbles happen accidentally, but whatever, Shawn.” – Psyche

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The Four Horsemen of the Wilderpocalypse®, now in living color!

The world is in a weird place.  Very weird.  And that’s just what it says on my performance review.

What’s really weird is money.  Money, capital, whatever you call it, is in a vast oversupply.  How much of an oversupply?

Interest rates on about $15 trillion (not that brightly colored wrapping paper some countries naively use for money, but real dollars) is negative.  Negative.  In my bank account, I loan the bank my money.  In turn, the bank gives me a little extra back each month.  Not much at all, in comparison to historical standards, but a little.

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Alas, there will be no Christmas Goat in Zimbabwe this year.

In Germany, if you loan the government €100 (which is like a metric dollar for feminists) you pay 0.593%, or €0.59 a year for the privilege.  If you think this is a really good deal, come on down to John Wilder’s Toddler Knife Juggling School and Bank®.  I’ll only charge you €0.25 a year.  Plus you get to see videos of all the toddlers learning to juggle knives.  I’ll maintain that I’m giving you the much better deal.  Well, it’s a better deal depending upon what your insurance deductible is and how coordinated your toddler is.

Heck, keeping the cash in a box under your bed is a better deal than paying the Germans to watch it for you.  Why on Earth would you give someone piles of your hard-earned cash and be happy that you got less back,?  Well, some pension firms are required to invest in government securities, and some (probably German funds) are required to invest in German bonds.  In terms of deals, this is the functional equivalent of a Mafia bargain:  “It’s an offer you can’t refuse,” but in this case spoken with an accent like Colonel Klink in Hogan’s Heroes®.

But the shear sum is mindboggling – I could come up with lots of really meaningless descriptions of what a trillion dollars is worth – a football field full of pallets of $100 bills stacked 8 feet high, enough to fill 1.8 miles worth of semi-trucks, almost enough space to hold Charlie Sheen’s spare virus load.   So, we as humans can’t really understand a trillion dollars in any meaningful way – and $15 trillion is how much money that’s parked in government bonds earning negative interest.  This is a travesty while my toddler juggling students are in desperate need of a prosthetics and eyepatch fund.

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Also 50% off vision, but that’s no charge.

When I was just dating The Mrs. (The Mrs. was just The Miss then), we visited her house so her parents could thump me like a melon to make sure I was ripe.  In her bedroom I noticed a box of toys.  On top was a plastic plane that I assume belonged to her older brother.  The plane didn’t look like the one below, but it was of a similar quality – very cheap plastic.  If I were buying that toy today, I’d expect it would be $1 or $2.  Not much, since it couldn’t be more than five pieces of cheap molded plastic.

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I still miss lawn darts.  If you’re going to make a hazardous toy, go all out and make it really hazardous.

As I recall, this particular toy plane still had the sticker on it from when cashiers used to manually punch in the prices – not a bar code in sight.  The sticker had a price of (I seem to recall) about $7.95.  A silly price for a cheap toy today, but in 1978 or so, maybe it was a good deal.

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This is what stickers used to look like before iPhones.  Or before I was old.

Inflation and Led Zepplin® ravaged the 1970’s, but nobody drank a pony keg and toked up to get psyched up for inflation.  A big part of the inflation was the oil shocks as the United States hit (then) peak oil production and OPEC® found they could dictate energy prices.  Another big part of inflation was because Nixon pulled the United States off of the gold standard.  I know people blame Nixon (and I have done so myself) for taking us off of the gold standard, but the alternative was giving all of our gold to the French.  The French.  They would have just spent it all on baguettes, berets, cigarettes, and mime school, so it was for their own good that Nixon said, “nope, no gold for you.”

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Also, he’s missing track shoes to run from ze panzers.

But as the dollar went from being nominally backed by gold to being backed by governmental promises, there was a messy, messy decade as prices adjusted.  I believe this led to many economic horrors.  And disco.  Eventually the dollar became the currency everyone used to trade with – if you wanted to buy Brazilian waxes and ship them to Japan, the Japanese would have to first trade yen for dollars, and then pay the Brazilians in dollars.  The Brazilians would then trade the dollars for more wax, or maybe matches to keep that pesky rainforest burning so it wouldn’t grow back.

The dollar became the required currency for world trade, especially in oil.  In the meantime, we had too many dollars chasing everything in the United States, and prices of everything went up.  So did interest rates.  Pop Wilder once told me that he was going to try to buy a $100,000 Treasury bond when the interest rates peaked back in 1981.  He said that it would have paid him $17,000 a year for twenty years, and then would have paid the $100,000 back to him.  But, his boss wouldn’t loan him the money while he sold some stock and moved some money around – Pop had the money, but he couldn’t get it that week.  That one bugged him for years.  He certainly wasn’t planning on paying the Treasury to take his loan.

After the Great Recession, the central bankers at the Federal Reserve® flew around dropping money by buying up mortgage-backed securities.  How much?  $1.8 trillion at last count – they discontinued the data.  And then the Fed went started buying US treasuries so the interest rates would stay low – peaking at $2.4 trillion from a starting point of less than $0.5 trillion.

This was called “Quantitative Easing” since that sounds much more sober than “panicking and throwing money on the fire to try to put it out.”  The Fed© pumped through just these two mechanisms over $3.7 trillion into the economy from 2008 to 2015.  It’s not like they wanted to keep the party going for a specific president, is it?  Nah.

Anyway, the Fed® pumped money, manipulated interest rates, and what happened?

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See, it’s topical, it’s current, and it’s a scary sewer clown.  Ma Wilder told me these were the three basic elements of humor.  Oh, and toddlers juggling knives.

This time, the world currency reacted entirely different – the money was in the hands of the already rich.  So what did the rich do?  Invested it.  Prices went up, but in this case, it was the price not of cheap plastic airplanes, but of investments.  Money began chasing profits.  As such, the stock market increased a wee amount, going from about 10,000 to over 28,000 today.  For those that didn’t major in math, that was an increase of 2.8x.  During the same time, the economy grew about 33%, or, 1.3x.  Bond interest rates plummeted – that means that bonds were in demand, since it takes a lower interest rate to get someone to buy a bond.

And now you have to pay to buy a bond.

Money has been chasing assets that can be invested in.  The stock market.  Bonds.  Farmland.  San Francisco condos.  Because of the investor money looking for profits, these have all grown much faster than the price of a Big Mac®, though that seems to be heading up now, too.  College and medical costs have gone up as well, but that’s mainly because government gets involved and “helps out” with student loans and generally screws up medical care entirely.

Most of the other things needed for day-to-day living in the heartland haven’t gone up that much – cheaper energy has certainly helped the entire economy.  And housing prices in Modern Mayberry have stayed as flat as your sister for the last decade, if not declining a bit.

But the stock market can’t outpace real growth in the economy forever, and the Fed™ has stopped injecting money into mortgage-backed securities, and investors seem to want to by Treasury notes, so the Fed© can stop buying those for a while.

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I’m thinking she may do better at math than the Fed®.

To me it seems clear that our economy is in a bubble where investors are willing to spend a lot of money to buy a little bit of profit, or a little bit of interest return.  We are in a bubble – a bubble where the assets are those things that can produce income, or at least a return on investment.  In this particular bubble, capitalism itself is the commodity that is over inflated, aided and abetted by bankers that seem to want to keep the economic party going forever.

Hey, it’s still working for Zimbabwe, right?

Scholarships to Avoid, and . . . College Isn’t the Best Idea for Everyone

“Now if Eb needs a diploma, he should go to college so he can become a vegetarian.” – Green Acres

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Please, calm down.  Show me where Bernie tried to touch you.

The Mrs. and I were off to Midwestia State (Home of the Fighting Red-Crested Yaks©) on Saturday to move The Boy into the dorms.  The reality is that he had left hours before us and was unpacked by the time we got there and had already managed to flirt with the girl working the dorm desk and lock himself out of his own room for the first time.  I saw the look in the eyes of dorm desk girl – “cute, but still a dorky freshman who locks himself out of his room two hours after getting a key.”

I was actually shocked they still had keys – I was expecting that they’d be subjected to retinal checks to get back in their rooms.  Until I heard that the floor had a shared bathroom.  A co-ed shared bathroom.  Imagine being in the midst of a growler when the girl of your dreams drops on by to leave the kids off at the pool?  I’ve been married forever, and I like to pretend that’s not something The Mrs. does – at all.

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I was surprised.  I was unaware that the diet of Deadpool® was entirely comprised of burning tires.

The Mrs. and I were there, really, for The Mrs. and not The Boy at all.

When The Mrs. had talked about The Boy moving away, it had started off with a matter-of-fact statement about “. . . when we drop him off at college.”

I had responded with, “Why would we need to go up there to drop him off?  He seems to be perfectly capable of carrying a few boxes to an elevator.  It’s not like we’re dropping off Stephen Hawking.”  This was, apparently, not the thing to say to a mother getting mentally ready to cope with her eldest son going off to college.  It doesn’t help that The Mrs. is also staring down the added mathematical certainty that her youngest child, Pugsley, will likewise be moving out within a handful of years.

She responded with:  “Of course we’re going.”

If you can put “icy” into a tone, this one was nearly at absolute zero.  I saw the molecules in her exhaled breath stop vibrating as they fell to the carpet and form a nice Ice-9 frost (look it up).  I could see that we’d be driving the hours required to get to Midwestia State (Home of the Whimsical Crotch Goblins®) the day the dorms opened.

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When I met Stephen Hawking, he told me that there are an infinite number of universes out there, and maybe even one where I was funny.  I responded, “Here’s a great joke:  Stephen Hawking walked into a bar.”  That one really made him mad.  Now I have to live in this Universe, where Kardashians aren’t fast food workers.

I can understand how The Mrs. felt.  It’s almost always a melancholy time when a child moves out, unless that child is Johnny Depp, in which case his parents were happy to be able to announce to their friends that their house was now aerobics-free as Johnny was now doing Pilates of the Caribbean.  I’m sorry.  I’ll admit that there were uneasy questions floating through my mind.  I thought the questions were about him, but in reality after reflecting, I realized the questions were really about me:

I thought the questions were:  “Is he ready?  Does he have the tools to go out into the world?  Will he make the right judgements?”

It sounds like those questions were about him, but they’re not.  Those questions are really about me.  A more truthful way to write them is:  “Did I prepare him?  Did I teach him enough so that he’ll be competent and safe?  Is he a good man?”

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The only thing I’m sad about is that he thinks steak tastes like chicken.

I think college is a good idea for The Boy, and I’ll get back to his specifics a bit later after Morpheus is done with him.

But I don’t think college is for everyone, and I think it’s really a horrible idea for some people.  I learned this from my association with a youth group.  I was discussing the future with one young, bright kid – he was a junior at the time, I think.  I asked him what his plans were.

“I’m going to become an electrical lineman.”  An electrical lineman is the guy who fixes the big wires on the electrical poles so you can charge your iPad© and watch Netflix® – it’s like a superhero who can chew Copenhagen®.  It’s technical work – you have to be smart.  It’s physical.  And most line failures happen during big storms.  So when your power goes out for an hour?  It’s a lineman who’s out fixing it in the rain or snow or ice or thunderstorm or temporal rift.

I stopped.  I was getting ready to give him my “you need to go to college” speech, but hesitated.  This young man had thought about it.  He loved being outside.  He hated paperwork.  He was very smart.  The average hourly wage for an electrical lineman is $30 an hour for a journeyman.  With overtime, he could be making $100,000+ a year in just a few years and live in an area near Modern Mayberry where most of the nicest houses are available for $200,000 or less.

It was a shockingly (intended) good choice.

Being an electrical lineman also offered some other benefits:  it’s not a career that you can do online.  You have to physically be there.  This is nice, so you don’t have to compete with a two billion or so people in China and India like you might if you were being a computer programmer.

This job has another advantage – it requires just enough certification that it shuts down people who would randomly try it, mainly because no matter how crispy the body is electrical companies hate to pay to have them removed.  But the young man in question wouldn’t have to compete with illegal aliens, either.

Being a lineman has a third advantage:  it is a basic service that you can’t outsource.  You can ship a factory nearly completely overseas – I’ve heard of just this happening – but the electrical infrastructure required to run the United States has to be in, well, the United States.

One final advantage:  you can start your own company, buy your own truck, and work the hours you want as a contractor to bigger electrical companies.  It’s a business where if you want to be a contractor or an entrepreneur, you can be without too much difficulty investment.

The nice thing about working with kids is they often teach you things, too.  The standard advice you give a bright kid with good values is go to college.  This is clearly the wrong advice for many kids.

A kid growing up today will face more challenges in employment than any generation in history.   Competition will take place in ways that I never had to consider during my career.  And this is after automation removed thousands of jobs from factories as machines replaced skilled workers.  In this new revolution, expertise from “knowledge workers” will be replaced by algorithms and databases that allow, for instance, computers to diagnose skin cancer at a 95% correct rate, versus an 87% success rate by actual human dermatologists.  I know it sounds bad for the human dermatologists, but I got a 0% correct rate since all I would do is look at the picture and say, “ewww, gross.”  Let’s see a machine beat that.

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Okay, maybe I shouldn’t be a doctor.

I’m not sure that there is, in the future, a truly safe job or career to go into, unless we experience Lord Bison’s Deep Fried Econopocalypse® (and if you’re not reading The Bison Prepper, you really should be (LINK)) and then the guy who makes costumes out of leather and football shoulder pads has probably got a good career ahead of him.   Owning a scrapbooking store?  Maybe not so much.

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Okay, I was going for Mad Max Mel, but this works.  I hear they worked out their differences and went to Hooters® afterwards.  Man, Jesus can put down the wings and Coors Light©.

What are the attributes of a safe job?  I mean, assuming Mel Gibson doesn’t show up at your house tomorrow?

  • Local – If you can’t do it over the Internet, that cuts out billions of people from getting that job.
  • Certifications Required – A job, like the lineman example, isn’t something that should be done by just anyone – it requires a minimum intellect as well as training and experience. Many medical jobs are similar.  I hate the way that we have, in my opinion, over-certified our world.  But you can use that to your advantage.
  • Other Bars to Entry – It used to be that you could give applicants for jobs an IQ test, weed out those that weren’t smart enough, and be fairly sure that you were getting someone who was at least smart enough (or not too smart) for the job. Now?  You have to use something that works like an IQ test, like a college degree.
  • Hard to For A Machine to Do – Blogging.   That’s hard for machines, right fellow humans?  I have been told that 93.2% of you like to hear that.

But there are ways that even “safe” jobs might be at risk:

  • Carpenter: Carpentry, in many cases, requires no certification – any illegal aliens have taken many of these jobs in certain areas.
  • Teacher: Why do we need all of these teachers?  We can get a YouTube® lecture up, and have a teaching assistant give the standardized test.
  • Store Associate:   Check out the product features on the Internet – seriously stop.  You’re not my supervisor.  Leave me alone!
  • Checkout Clerk: Self-service checkouts are pretty common now.  I refuse to use them, period, but I can see that I’m rapidly becoming a minority.
  • Johnny Depp’s Sinus Cavity Cleaner: Okay, this one is really a safe job.

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Okay, I’ll admit, she’d be perfectly acceptable working picking strawberries or in some sort of insect control responsibility. 

But there are other problems.  I maintain that too many people go to college.  In 1959, only about 45% of high school graduates went to college, and only 70% of students graduated from high school.  That’s a little less than a third of the US population.

In 2016, 84% graduated from high school, and 70% of those went to college.  That’s nearly 60%.  If you break down the math, almost twice as many people are going to college as a percentage of people in the United States.  There are only two possible conclusions:  either people have gotten smarter, or college has gotten easier.

Me?  I’m betting that college has gotten easier, since if you poke around a bit you can find that the average grade given to students at Harvard© is an A-.  It might just be my opinion, but the only thing competitive about Harvard® might be how much a parent has to pay to get a student accepted.

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See, if you build a new building on campus – not a bribe – call it Skank Hoe Hall.  But having your skank daughters get in because you’ve bribed a coach?  Yeah, that’s a bribe. Allegedly.

I’m pretty sure that the economy has no need of many of these college graduates in any role other than cashiers at Billy Bob’s Wiggle Striptease Hootenanny©.  Many of the degrees granted are not really economically valuable – 5% of degrees, for instance, are in “fine or performing arts.”  Last time I checked, we here in Modern Mayberry had our quota of mimes filled at our historical demand of zero mimes and there was a bounty on any mime caught within 5000 yards (3 meters) of the county courthouse.  There just aren’t very many jobs available in “fine or performing arts” to justify 5% of college students getting a degree in that field.  Thankfully, many of them have experience in their true field, food service.  I hear that Florida will have a degree in Pre-Barista© next year, so there’s hope yet.

One thing I did note in the hour I spent sifting through the data is that many degrees are more helpful, and, potentially more stable.  Health and medical sciences accounted for 10% of graduates, and those jobs are hard to replace with a machine.  You have to have people helping people.  Robots can diagnose, but at least for now, a doctor has to do the cutting, and a nurse the nursing, until Arnold Schwarzendoctor 2000™ arrives.

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That’s a realllllllly long thumb.

I would speculate that we have twice as many people going to college as necessary, and we could replace the expense and time wasted at college for many people simply by allowing employers to give IQ tests.  Yes, doctors and nurses need school.  But we have approximately 1,000,000% more anthropology degrees than required to maintain our civilization, and an infinite amount of Women’s Gender Studies degree recipients than required.

I advised The Boy on how he could take what he enjoys doing, and turn it into something useful.  Don’t compete with billions of people – find ways that you can provide higher value services to people in ways that have to be local and are hard to reproduce.  I think he has a pretty good plan.

Given the accelerating pace of change we’ve seen in the last two decades, I imagine that anyone starting a career in 2020 may have to make multiple changes during their life.  From what I’ve seen so far, I think The Boy is well prepared for school and the changes that he’ll see in life.  I think he’ll do fine.  It’s time to let that eagle fly.

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Unless it’s Putin’s Eagle.

Only 3% of Your Decisions Matter, or, Don’t Just Do Something, Stand There!

“We’re very lucky in the band in that we have two visionaries, David and Nigel.  They’re like poets, like Shelley and Byron.  They’re two distinct types of visionaries, it’s like fire and ice, basically.  I feel my role in the band is to be somewhere in the middle of that, kind of like lukewarm water.” – This is Spinal Tap

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Oh, I don’t need alcohol to make bad decisions.  But it doesn’t hurt.  Just ask Tiger Woods.

Life is filled with events.  Some of them are predictable, some not.  But I generally break the events that will influence the course of my life into three categories because I’m sitting in a meeting and it kind of looks like I’m actually working when I take blog notes:

  1. Certainties

Certainties are just as shown on the label – things that are certain to happen.  These are one extreme of the spectrum, for instance unless a race of aliens is intent on destroying humanity so that Bono™ doesn’t escape the Earth and infect the galaxy and drops a Moon-size batch of anti-matter into the Sun causing a solar flare that extinguishes life, the Sun will come up tomorrow.  Notice I didn’t say that the race of aliens was evil, in fact it seems entirely logical and rational and a good choice – Bono© as a trade for the rest of humanity.  Other examples of certainty:

  • Death.
  • Taxes.
  • Someone saying “Death and Taxes” when they write about certainties (at least every year since Christopher Bullock first wrote the phrase in 1716 in Ye Olde Bloge Poste on the Worlde Wilde Web).
  • Gravity.  Like Bono®, it also sucks.
  • Celebrities flying in private jets to protest global warming.
  1. Impossibilities

Impossibilities are things that cannot happen in this Universe.  Okay, it’s not a creative title, like calling your dog “dog” and your cat “cat” – and we both know people who have done just that.

The number of things that I thought were impossible were nearly zero when I was under age five or so.  Starships were only 20 years in the future.  I would own a tank.  And I’d marry Miss Roberts, my first grade teacher.  About the time I went to high school, the number of Impossible things started to climb.  I think this happens when you start experiencing disappointments in life, like the Space Shuttle.  I mean, why did humanity spend so much time trying to get to space with a ship that had the glide ratio of a brick?

I think my Impossibles peaked in my thirties.  After a divorce and NOT winning a MacArthur© Grant for my incredible ability to sleep on the couch while the kids watched Saturday morning cartoons, my view of what was possible shrank.  But as I grew older, I kept seeing the same pattern – if people tried things, they often achieved them.  There are, however, things that are really Impossible.  What are some Impossible things?

  • A Beatles® reunion.   A living Beatles™ reunion.
  • The molecules of Leonardo Dicaprio spontaneously rearranging themselves to form something useful, like a ham sandwich or a beer.
  • A good, new Star Wars® movie will be made during my lifetime.

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Is it me, or have John and George lost weight?

I think one of the really neat things about being human is the curiosity and creativity that allows us to think of things that could never, ever happen, like Johnny Depp learning to read.  It’s a great day to be alive!

 

  1. Things That Might Happen

Most things in life are neither Certain nor Impossible.  They fall into that grey area of possibility that makes life interesting.  I find it fascinating that so much of life consists of these contrasts – in between the chaos of fire Venus and the stasis of icy Mars lies, well, us.  The other day I heard an astronomer state if you take average star weight and the weight of an atom, you end up at about 50 kilograms©, whatever that is.  But the average human weighs . . . 62 kilograms®.  It’s almost like this place was made for us.

Hmmm.

Anyway, while not everything interesting happens in the middle, most interesting things happen in the middle.  But, in the interest of continuing to subcategorize, I see two types of events in that sweet middle region:

A.  Events You Can’t Influence

Sometimes, whatever’s going to happen is beyond your control.  Despite what you want or any action you might take, the outcome will be the same.  You can’t change a thing.  Call it fate.  It’s not certain that the event will happen, mind you, it’s just that you can’t control it.  Some examples are:

  • How much Oprah will weigh tomorrow morning.
  • Collapse of the global financial system.
  • Whether Ilhan Omar will join the Hair Club for Men.

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Baldness – I hear it’s more common if your family interbreeds too often . . . oh.  Sorry. H/T WRSA (LINK).

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So, this is a record – my first back-to-back meme.  Is that not MacArthur Grant® worthy?

B.  Things you can influence or control

Here is where it gets interesting.  In my option (and in my experience) most people can control more about their lives than they want to admit.  Personally, it’s scary how many things that I’ve tried to do in my life that I’ve accomplished, which makes me wonder if I haven’t aimed too low.  I’ve recently changed one of my goals to be horribly unrealistic (learn how to make a tasty pizza, or at least buy a tasty pizza) so I’ll keep you updated on the progress on that stretch goal.

But what sorts of things can you control?

  • Your weight.
  • If you shower.
  • If you smoke.
  • Your psychic power to make Taylor Swift love you using only your mind.
  • If you go broke.

Now, I didn’t say you have total control of your life, but some actions you take (not decisions you make, mind you, but actions that you take) can influence most things about your life, including how you die and when you die.

But even as beautifully written as the preceding was, it’s not the where the post is going to end up.  The point I’m getting to is, how many events that occur in your life, choices that you make, should you really worry about.

I’m thinking about 3% or less.

From my vantage point, most things don’t matter.  Examples?

  • Yellow or blue Post-It™ notes?
  • Romaine or iceberg lettuce?
  • Tom Brady’s 2015 clone or Tom Brady’s 2018 clone.

Most decisions that you make simply do not matter at all.  My personal difficulty is that I sometimes don’t process a decision like that.  I want to make the right decision so I’ll spend time researching and learning online about a purchase I’m going to make . . . of something I’ll use exactly once and then toss into a closet.  Heck, as an example tonight I’ve spent about half an hour trying to decide between one type of laptop and another.  Does it matter?

Probably not.

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What I did with the flowchart was just start with a random decision or event.  Does it matter?  I pulled out Pareto’s rule, and off the bat, 80% of decisions in your life . . . don’t matter at all.  Paper or plastic.  .556 or .762.  Drilling a hole in your head or spending time with five year old children.

That means that 20% of the events matter.  Cool.  How many can your actions influence?  I’m betting 80% of that 20%.  That’s a huge number and from my experience it seems about right.  You’re rarely a complete victim.  That’s 16% left.

Is it the effort worth it.  I came up with . . . 80% of the time, no.  The time and effort to manage every event, even just 16% of them, is a lot.  You have to let some things go, since even if it matters, it’s not worth your time to influence everything around you.

The math is simple.  97% of decisions in life you should make with either no care or minor care.  They just don’t matter.  The good news is that means if you manage and select the decision you make, you can live, more or less, the life you want by only dealing with 3%.

Why?  I find that things we think are important, that society tells us are important decisions or important actions are not.  Here’s what I’ve found:

  • We bought Stately Wilder Manor© about a decade ago. The Mrs. was living in Houston, and the house that we’d fallen in love with had cheated on us and was purchased by two doctors.  I was working outside of Houston, but we still needed a place to live, because we were going to move.  I kept looking.  I found a house.  Given that (then) the market was hot, I put in an offer.  The Mrs. had never even seen the house until the day we moved in.

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How do you get the dead hooker smell out of carpet?  Asking for a friend.

  • The last care I bought was a replacement for The Mrs.’ MUV (Mrs. Utility Vehicle). I was passing through a large city in Midwestia, stopped off at a car lot, and bought a car.  They delivered it to Modern Mayberry the next day.  Again, The Mrs. hadn’t driven or seen the new car.

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Okay, it’s not that bad.  But while The Boy was driving it some woodland critter ran straight into the side of it.  The dent does not look hooker related.

Within relatively broad parameters, most decisions, even decisions that society says are “big” decisions, don’t matter.  Which house we got didn’t matter all that much, we just needed a house.  Admittedly we are horrible neighbors, so it’s best if there are no pesky homeowner associations.

And I wasn’t like that on the first house I bought.  We must have seen dozens of houses over months until we found . . . the one.  The first car I bought, I agonized over the decision.  Until I found . . . the one.

Strangely, I didn’t spend nearly enough time selecting my first wife she who will not be named and that had a much larger impact than any house or car ever could to my life.  There’s a joke in here about test driving and rentals, but I’m just gonna skip it.

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It’s all the aftermarket add-ons that get you.

The point is not that I was young and stupid, although I really was young and stupid.

The point is:  Don’t worry.  Plan?  Sure.  Prepare?  Absolutely.  But like Pop Wilder always said, “Don’t pay interest on money you haven’t borrowed yet, son.”

97% of actions you take . . . don’t matter.  Don’t sweat them.  And don’t spend a second worrying about things you can’t change or influence.

But on those things you can?  Strike hard, like the fist of an angry god.  Never give up.  You can move mountains that way.  Feel motivated?  Good!

Now go out and get it done!  Oh, it’s Friday?

Kick back and get it done Monday.

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Okay, I did once upon a time pretend my toy Thompson submachine gun was a phaser®.  Once.

Financial Advisers, Christianity, and Elon Musk’s Hair

“It’s getting exciting now, two and one-half.  Think of everything we’ve accomplished, man.  Out these windows, we will view the collapse of financial history.  One step closer to economic equilibrium.” – Fight Club

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My financial adviser checked my balance – she didn’t manage to push me over. I’m sturdy and built low to the ground, The Mrs. says.

One of my biggest joys of having children is giving them unsolicited advice.  For example, my daughter, Alia S. Wilder texted me the other day:

The Unsuspecting Alia S. Wilder:  “ . . . also, Lars Úmlåüt (her boyfriend) and I met with a financial adviser about retirement and investment portfolios.”

The Evil John Wilder: (I Swear This Was My Actual Text Answer) “That’s like talking to a mechanic about your Gulfstream® jet.  You don’t have any money.  And this will be in next week’s blog.”

Yes, I really said that to her.  The idea of needing a financial adviser when you don’t have any money is like buying flowers when you don’t have a girlfriend, at least until the restraining order expires.  And The Mrs. was the one that christened Lars.  After he cuts his hair, we’ll have to think of another name.  Although if they get married, Alia S. Úmlåüt does have a ring to it.

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It’s rare that a picture describes a concept so completely.

But the financial conversation continued.

The Still Hasn’t Seen It Coming Alia S. Wilder:  “We have very little (money) but the financial adviser will help get us going in the right direction.  Life is going to suck financially, but you gotta live like no one else wants to, so you can have the future everyone dreams of.”

The part that I’ve italicized above is the part that scared me when I read it in her text message.  That’s nothing but pure sales pitch.  It’s a good sales pitch, too.  It sells the virtue of sacrifice now for future rewards.  And it is a philosophy I fundamentally agree with.  Deferred gratification is the key to most success – work hard now, and the benefits accrue over time.  I wrote about that here (“Be so good they can’t ignore you.”-Steve Martin Plus? A sniper joke.).  Steve Martin spent a decade learning and four years refining before he ended up in wild success.

To be great, you have to put in the time.  You have to work.  But the very best sales pitch will be like a virus – it will work into your brain.  When you have your potential client quoting you?  You have an effective sales pitch.  Back to the texting.

The Sage of Wisdom John Wilder:  “Get a 401k.  Invest in stocks.  Don’t mess with it.  Ten words.  It’s all you need to know right now.”

Alia and I had already talked about other investments – having a month’s worth of food around the house.  Being prepared for emergencies.  Having a set of jumper cables in the car.  These are small things, but they can do everything from making your life more convenient when you accidentally leave the lights on, to saving your life when that first aid kit pays off.

The Probably Getting Irritated Daughter Alia:  “We have a 401k.  We are starting the stocks.  And we’re treating investments like an expense.”

Investments like an expense?  Where did I hear that before?  Just from every financial adviser that tried to convince a Young John Wilder Who Had No Money to sign up for some sort of financial product.  Strong the sales force is in this one.  His sales technique was so good he’d managed to get a second slogan injected into Alia’s mind.

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The force commissions are strong in this one.

Not Going to Let it Drop John Wilder:  “No.  Just the 401K.  No other stocks.  Pay off your debt first.”

As someone in the “Alia owes money to” category, I think I’d be a bit irritated if my loan wasn’t being paid back while Alia was investing in Elon Musk’s latest venture, a time machine that only Elon Musk’s hairline uses.  But investing in stocks when you owe money (outside of a mortgage) is, well, silly.

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Or was it the future?  Musk’s mane mangles moments in the multiverse.

A 401k is different.

Why?  Many employers match some percentage of what you put in one.  The most common amount I’ve seen is a 50% match up to 6% of your wages.  Said differently, if you put in 6%, the company will put in 3%.  This is a good investment – you make an immediate 50% return.

Irritated As A Yak That Just Got Called A Weasel Noggin Alia S. Wilder:  “That’s what (Financial Adviser) is there for.  He works for (Company Name).”

Cool Voice of Experience John Wilder:  “No.  Don’t trust him.  No individual stocks.  Just 401k, and pay down your debt, until the debt is gone.  Then add more to your 401k.  Financial advisers are salesmen.  And this company (After Looking It Up)?  Whole Life Insurance?  STAY AWAY.”

Whole life insurance has two components – life insurance and some sort of investment.  It costs a LOT more than regular “term” life, but has the benefit of paying you back if you don’t use it.  How can I tell that whole life is a bad deal?  The salesmen get huge commissions.

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For the record, he’s also sad he got caught.

The Feeling Like Napoleon Retreating from Moscow Alia S. Wilder:  “No.  They do more than investments.  They look at the whole picture.  He said he was going for more investments if we moved forward.”

The Not Needing to be a Psychic John Wilder:  “No.  Stay away.  I’m sure he’s a nice guy, good sales patter, but you will regret dealing with people like that.”

Now As Defensive as the Maginot Line Alia S. Wilder:  “It doesn’t hurt to get information and a direction on our future.  (Company) is a Christian company for Christians to help with money management on all fronts.”

Rolling Like a Panzer Through The Ardennes John Wilder:  “Sure.  Just don’t give them any money or sign anything.  He’s not doing this for his own health or because he’s a Christian.  He’s doing it so you can help make his car payment.”

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Enough of this Nonsense Now, Has to Go Back to Work Alia S. Wilder:  “I appreciate your advice, Dad.  I love you lots.”

Won’t Let It Rest Because Apparently She Kept Thinking About It During Lunch Alia S. Wilder:  “So why are you so against investments?  If you don’t mind me asking.”

Sweaty Back from the Treadmill And Smelling Like Teen Spirit John Wilder:  “A 401k is an investment.  I’m in favor.  Paying off debts.  Also an investment.  Investments are smart, but individual stocks aren’t an investment, they’re speculation.  Stock funds before your debt is gone?  Stupid.  Using Christianity to sell a service?  Awful.”

What is an investment?  When you’re young and paying off debt, pay off the debt.  You need a financial adviser like you need a staff for your private lair underneath the volcano in the South Pacific.  And for most people, buying individual stocks is similar to gambling.  I heard one person make the comment – “I only invest in individual stocks if I can change the outcome.”  As I recall, he was on the board of several companies, so he yes, he really could change the outcomes.

The overall market is different.  It has had up years, and down years.  If I’m going to invest in stocks, I’m going to invest in aggregated stocks, like an index fund or a targeted fund, which is what I have in my 401k.  Yes, I have bought individual stocks.  And, yes, I’ve lost money on them – not enough to change my life, but enough to change my philosophy.

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There’s an eternity of good deals!

I’m not against Christian businesses – not at all.  I’m not even against Christian financial advisers – Dave Ramsey (at least on radio) talks about his faith, but doesn’t use it to sell his products.  Heck, the guy gives away his ideas on the radio daily.  Does he make money?  Absolutely.

What about Chick-fil-A©?  I love Chick-fil-A®.  The chicken sandwich is the best I’ve ever tasted, and it amuses me how people get bent out of shape that they give up a day’s worth of revenue every week because of their principles.  When I’m in a big city do I go to Chick-fil-A™ because they’re Christian?  No.  I go there because the food is great.  I go there because the employees are uniformly polite and neat.  I go there because the stores are spotless.

I’m not even against financial advisers in general – but when a financial adviser is attempting to “help” people who don’t have money invest?  I’m not a fan.  I’d prefer they charged a fee like other professionals – that’s upfront, and I think those people really are on your side.

I later called up Alia.  “Did you sign anything?”

“No.”

I relaxed.  The world isn’t short of people who want your money.  In some cases, they work really hard for it, like Chick-fil-A©.  In other cases, well, commissions are powerful motivators.

I’ll stick with the chicken sandwiches, they’re better with mayo.

Dang.  Now I’m hungry.

John Wilder is not a licensed professional adviser and you should probably think twice about taking his advice and consult with a competent adviser.  Unless you’re his kid, which you’re probably not.

Black Swans, Cute Girls from Poland, and Sexy Bill Gates

“All I want is peace – a little piece of Poland, a little piece of France . . .” – To Be or Not To Be

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These are Polish sports fans.  They were photographed at . . . oh, I’ve lost you already.

I went to seventh grade in a very small school district, I think there were, perhaps, 40 or 50 kids in my grade.  We were fairly remote, and the area wasn’t particularly well off economically so looking back, this was the end of the road for the teachers that weren’t locals.  When I was in seventh grade, I saw that my science teacher was reading a book.  Since I had ample time to read on the bus going to school every day, (Pa Wilder picked me up after football practice) and I was a pretty voracious reader.  I was always looking for a good book after I’d rolled through the science fiction section in the school library.

Young John Wilder:  “What’s that book?”

Teacher:  “Oh, this?  It’s called The Shining.  It’s pretty good.  Want to borrow it after I’m done?”

I’m sure he’d get fired today for allowing a seventh grader to borrow a book that only included cis-gendered characters in a heteronormative patriarchal un-handicapable-positive environment.  But it did start me reading Stephen King, and I read everything he wrote until he stopped snorting whiskey and drinking cocaine.  After that?  King’s nosebleeds decreased, as did the quality of his writing.  It’s probably in bad taste to suggest we start a “Get Stephen Stoned Again” movement, but if it gets him away from Twitter® I’m all for it.

Given all that, today I was amused when I got this in a text from my friend:  “The reason your writing is scarier than Stephen King is that your writing is more likely to come true.”

But reality is scary.  The future is scary.  And even though we can’t predict exactly what will happen, it’s fairly clear that we live in a vastly more interrelated society that exhibits technological wonders while it faces the challenges of a huge planetary population.  The paradox is, although humanity is more connected than ever before in history, that connection seems to have sharpened the divisions between peoples and ideology.  The dream was that communication would unite humanity.  The reality is that we don’t seem to like each other all that much.  Apparently the ultimate conclusion as we communicate in a superhuman fashion at the speed of light across the planet is that “those other guys are hooter-weasels.”  Hooter weasel wasn’t my first choice, but turd-yak© and rump-stooge© were already copyrighted by Disney™.

But back to scary:

The other day I was working out, and listening to a YouTube® video on the Polish Resistance during World War II.  Why?  I like history, and in some ways you can learn a lot about today from looking at the past, it seems that just like Albanian strippers attempting to fix a copier at an all-night hardware store, we just never learn.  I haven’t quite finished watching this video (since I ran out of treadmill) but will probably finish it tomorrow.  But one question struck me as I was listening:  what sort of change had the Polish people endured?

Warning, this video is over an hour long.  I enjoy watching stuff like this on the treadmill at lunch, because it makes me think and ignore the pain weakness escaping my body and how the English have no idea how to pronounce certain words.  Your mileage may vary.

The economy of Poland before invasion in 1939 was growing.  Like the rest of the world, the Polish income had dropped during the depression, but by 1939 it was higher than it had been in 1929.  Beyond that, between World War I and World War II Poland had greatly increased the number and quality of schools and had started flossing regularly.  Poland was doing okay.

Of course, being stuck between Nazi Germany and Soviet Russia is a really, really bad place to be.  Both countries invaded in Poland in 1939, and it was split up like a Hollywood couple’s kids, except Hitler and Stalin were mom and dad.  Yeah.

Immediately, the Poles buried rifles.  They didn’t plan for this, and didn’t have much time to prepare, so when they went to dig the rifles up later, they found that they had rusted and were useless.  As the economy of Poland was absorbed first by the Germans and the Soviets, and then by the Germans alone, Poland’s economy was shattered.  Poland’s labor was taken to make armaments, and Poland’s food was taken in large part to feed Germany and German troops.  Food became scarce.  What could be worse?  Oh, yeah, the war passing right over your country again.  When the Soviets invaded Poland the food situation eventually got better, but, let’s face it:  the communists have never really figured out the whole “feeding your people” thing.

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This is a real picture of a store in Poland during the communist years.  They actually told the people that they didn’t produce too much food, so that they wouldn’t be wasteful like the Westerners.

This post isn’t about Poland or Stephen King’s coke-filled sinus cavities.  This post is about change.  The Polish people were doing well, but then this big steam roller then proceeded to crush them, eliminate 20% of the population, and then oppress them over the next fifty years.

Did anyone in Poland predict that change?  Nope.

Massive, unexpected catastrophic change regularly occurs.  In society, the stock market, companies, and even personal reputations are built slowly, but lost in a flash.  This phenomenon is called Seneca’s Cliff, and I wrote about it here (Seneca’s Cliff and You) a long time ago.

Are there other examples of extreme catastrophic change beyond Poland in 1939?  Sure.

  • The Russian Revolution, which led directly to the Holodomor (In the World Murder Olympics, Communists Take Gold and Silver!).
  • The Depression and Housing Bubble were both examples of market crashes.
  • Myspace®. Not the company, that was bad.  But my page was just awful.
  • I could start on reputations of people, but, really, where would I end?

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Funny how times have changed.

Nassim Nicholas Taleb wrote about this phenomenon in his (quite excellent) book The Black Swan.  The really short version of his book is humans lived for tens of thousands of years in a linear world.  You could look around, and see that the height distribution in the tribe was a bell curve.  So was running speed.  Yeah, everyone who runs the 100M (3.2 miles) dash at the Olympics® can run it faster than I could when I was young.  But I could run a 40 yard dash in 4.9 seconds.  So, let’s say I could run 100 meters in 11 or 12 seconds at my peak being while pretending to be chased by a rabid Albanian stripper.  11 or 12 seconds is probably average for a high school athlete while not being chased by an Albanian.

The world record in the 100 meter dash is 9.58 seconds.

Yeah, my best time sucks compared to the world record, but the world record isn’t that far away from what I could run.  Now let’s take a look at wealth.

The average (which is pulled up by wealthy people) net worth of a family in the United States is about $700,000.  But the median (half the families above, half below) is $100,000.  But let’s use the higher figure for grins.

The best sprinter is about 25% faster than me.  Bill Gates is 14,285,000% wealthier than the average family.

To get the same percentage in a sprint as Bill Gates has in the pocketbook would require that I finish the 100 meter sprint that the world’s fastest person finished in 9.58 seconds in . . . 15.9 days.  (That’s 15.9 in metric days.)  People are simply not equipped to think about life like that, although Pugsley (my youngest spawn) does move that slow when I tell him to take out the trash.  Huge numbers and exponential quantities are not what we spent tens of thousands of years thinking about.

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What does it take to make Bill Gates the richest man in the world?  Jeff Bezos dating a floozy.  Sexy Bill Gates is for James at Bison Prepper (LINK).

How did Taleb define his Black Swans?

  • The odds would say that they’re extremely rare. Stock markets don’t collapse all at once when investors are rational, right?  Well, the odds are wrong.  Nonlinearity happens.  Investors panic in a herd.
  • Black Swans have huge consequences. The Great Depression likely led to World War II.  That’s a huge consequence.  These consequences are huge mainly due to overlapping failures – one part of the economy shuts down which pulls another with it.  And the longer a system has been forced into “stability” and not allowed to fail?  The greater the consequence.  An avalanche isn’t a single snowball – it’s a massive wave of snow.  It’s funny, but it used to be a joke that someone just making a big noise could cause an avalanche . . . and yet . . . at some point that individual snowflake is just enough weight to bring the whole mountain of snow down.
  • In hindsight, people believe it was obvious the Black Swan would happen. Why didn’t evil terrorists pilot a plane into a building sooner?

The Polish being invaded was a Black Swan.  Sure, it looks obvious now, but Britain and France guaranteed that they’d go to war if Poland was invaded.  Britain and France were completely unprepared for war.  But in hindsight . . . oh, that was the point.

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Javelin jokes?  Please spear me.

We have to live in this world of Black Swans.  Well, Bill Gates doesn’t, but you and I do.  How do we cope?

  1. Be awake. The world wants to lull you to sleep with Doritos® and Johnny Depp movies and food delivery boxes.  Don’t fall for it.  Look at the world through clear eyes.  See beyond your surroundings.
  2. Be honest. You can’t cheat an honest man.  Be honest with others.  Build real relationships. Be honest with yourself.  If you don’t understand that 40 year old you couldn’t beat 18 year old you in a 100 meter dash, you’re not being honest with yourself about your strengths and weaknesses.  Plan accordingly.
  3. Plan for what?  Don’t know.  Everything.  Anything.  Start small.  Three days.  Then Three months.  Then?  Three years.  But start.  The basics of financial survival and the basics of physical survival overlap.  Plan.  Think about what could happen.  You won’t be right, but you’ll be ready to react when the unthinkable really does happen.
  4. Remember, higher consequences are less likely. A fistfight is more likely than a gunfight which is more likely than global thermonuclear war.  Hurricanes are more common than civilizational collapse.  But the odds of civilizational collapse might be much higher than you think.
  5. Understand that the inevitable is . . . inevitable. You’re going to die.  The sun will come up tomorrow.  The Cubs® will never win the World Series™.  Oh, they did?  2016?  I must have been sleeping.
  6. Have a rainy day fund. The rainy day fund isn’t always in dollars, though dollars are super nice.  It can be a pantry full of food you eat.  It can be a massive safe filled with rare PEZ® dispensers.  It can be gasoline in gas cans in your garage, propane in your propane tanks.  Pop Wilder always said, “It doesn’t cost anymore to run off the top half of your gas tank.”  Build slack in your life, in your time, in your supplies.

Even in the darkest days, there is hope.  For Poland, it was an electrician who wanted workers to be treated well, and who also didn’t like communism.  Lech Walesa founded the labor union “Solidarity” in Gdansk, on September 17, 1980.  A year later over 30% of the Polish workforce belonged to Solidarity.  In the end, Solidarity forced the Polish government in 1989 to allow the first free elections since the 1930’s.

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Never underestimate the power of the ‘stache.

Shortly afterward and absolutely related to Walesa’s work?  Another Black Swan, the collapse of the Soviet Union brought about in part by Lech.  A Polish electrician helped bring down a superpower.  Okay, let’s be honest, a Polish electrician and $10 million in covert funding from the CIA.

Thankfully the CIA got that $10 million – the Pentagon would probably have bought, what, 16 hammers with that?  The Pentagon spending wisely?  Now that’s a real Black Swan.

Social Security Won’t Sink Us. But The Ship is Still Going Down.

“Here comes an overweight cat with dollar signs for eyes and a hat that says “Social Security” pouring a bucket that says “Alternative Minimum Tax” over a sad Statue of Liberty holding a “democracy” umbrella.” – Family Guy

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There’s this joke I heard about Social Security, but no one will get it.

When I was in junior high, our history class ended up with a long-term substitute teacher, Miss Vargas, for over a month.  Most substitute teachers just handed out word-search puzzles where you tried to pick out names of conquistadors, Thanksgiving foods, conquered Mayans, and famous cats that belonged to the Mayflower Pilgrims.  Since Miss Vargas had us for weeks, however, she actually had to teach.  Thankfully, she had a lesson plan.

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Not an original.  I could not resist.

She was a nice substitute teacher so our class didn’t beat up on her that much.  We could tell, however, that, whatever her degree was in, it wasn’t history.  Given the time and place I was going to school, it seemed like she was likely a chemically-damaged refugee from the 1960’s, and likely a former Leftist hippy.  Since we had caught her on some (rather) basic mistakes about American history, we weren’t shy about questioning the things she said.

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Not to mention when Abraham Lincoln “freed the penguins, dude” after signing the Treaty of Ghent at Woodstock.  At least class was interesting.

The lesson (at some point) took us to the New Deal.  The format of the homework should be familiar to anyone who was in school when mimeographs were a thing (look it up).  There was a term, and then the student was supposed to write down the definition.  It was a fancy way to force eighth graders to learn to skim texts for key words written in bold.

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But the smell . . .

One of the terms was Social Security.  I dutifully looked through the text until I found the boldface words Social Security.   In it was the definition that it was (more or less):  An insurance program founded to provide benefits to retired and disabled people.

The teacher, not feeling like grading the homework, decided to go through the definitions with us.  After Social Security she wrote on the board, A program created to redistribute wealth in the country.

With all of the righteous indignation an 8th grader who had fully consumed the Kool-Aid® of the Official Story™ of the Government-Approved© textbook, I proceeded to correct Miss Vargas.

She didn’t back down, and maintained that was the purpose.  Obviously, the event was significant enough that I still remember, and as I grew older I realized that, well, the burned-out hippy was right.  Social Security is a wealth redistribution scheme.  Heck, you can tell the program is socialist – it’s right there in the name.

The program was started in the depths of the Depression and rewarded those who hadn’t paid in with benefits they hadn’t earned.  I’d whine more, but that happened 80 years ago, so it’s like Madonna complaining about her virginity – that ship sailed a LONNNNNNNG time ago – nearly as long ago as when the Japanese bombed the Nina, the Pinta, and the Santa Maria at Pearl Harbor.  I know that you’re expecting that this is some sort of rant about how Social Security needs to be taken down because it’ll wreck the economy.  It isn’t a rant, and Social Security won’t wreck the economy.

According to the latest data I could find (there’s probably newer, but 2013 was close enough and I’m travelling) but an average couple, making an average wage paid in about $600,000 in Social Security taxes during their career and would receive roughly $600,000 in benefits – the system was in balance.  Of note, it’s kind of cute because the graphic assumed it was a man married to a woman and not an immigrant trans-porpoise which I understand is now required in California, as long as the porpoise signs a pledge to drive a Prius® and not to use straws.

Ahh, nostalgia for simpler times.

Social Security was roughly in balance in 2013, and could be put back into balance fairly easily with minimal effort, even though we’re facing a demographic bulge as the boomers retire.  As long as we can convince them all to take up chain smoking and they decide that anti-chemo is the new anti-vax, we’re fine.  Theoretically, there are the accumulated savings that Social Security has had during all of those years it was in surplus, but the reality is that all of those funds are just IOUs from Congress sitting in a filing cabinet in West Virginia in a converted National Guard Armory behind Buddy’s Chicken and Black Lung Shack®.  Doris has the key.

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It might look nice, but it still smells like the DMV and low motivation.

Yeah, the money going out of Social Security has already exceeded the money going in to Social Security, but it’s manageable.  A few tweaks to the tax, and a few tweaks to the benefit (two-for-one coupons at Burger King™ instead of money every other month) and it will work out.  Social Security, despite being a piggy bank continually raided by Congress for my entire life, won’t hurt us, at least not by itself.

That’s the good news.  I fully expect that if the only major obligations that the government had were defense, transgender reassignment surgery, and Social Security, we’d be fine.  Heck, even welfare for dachshunds that can’t find a job because of terrier privilege wouldn’t break us.  Even if Congress approved the Ocasio Cortez Guided Missile©, which is designed to approach every target from the Left, has a warhead that does nothing but make babbling sounds, and costs a billion dollars a missile, we’d be fine.

What will break us?

Medicare® and Medicaid™.

Those are the M&M®s that will crater our financial system.

From the 2013 data, the average couple could will pay in about $110,000 in taxes during their lifetime for Medicare, but will take out nearly $400,000 in benefits.  Where does that benefit come from?  I’d say our tax dollars, but let’s you and I be real – not one dime of deficit spending has ever come out of your pocket or mine directly in taxes.  It’s all borrowed into existence at this point.

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I was going to save this graph for Halloween, since it’s scarier than most zombie movies. 

From this projection, you can see that by 2024 Medicare plus Social Security will make up 12% or so of the GDP.  Add in 2% for Medicaid costs, and you’re up to 14% of the GDP.  Add in 4% for the projected interest payments due on the national debt, and that’s 18%, folks.  That leaves 2% at most for all of the rest of the spending on the economy before we run out of tax dollars.  But the rest of the spending (on things like defense) generally runs about 10% of GDP.  Through the magic of math, that means that we’ll need another 10% of GDP.  Just raise the taxes, right?

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Even during the “90% tax rate” 1950’s, the proportion of the GDP taken in taxes wasn’t any higher than today and resulted in more loopholes than there are bacon-wrapped shrimp at a congressional lobbyist’s party.

That means the Federal government spending alone will consume 30% of the GDP, of which at least 10% will be deficit spending.  Given a projected GDP of $26 trillion in 2024, that is an annual deficit of $2.6 trillion.  The deficit this year is projected to be $1 trillion or so, which is more money than some people make in their entire lifetime, so imagine one 2.5 times larger.

Through some sort of magical incantation worthy of Houdini’s proctologist, money has been pulled out of somewhere (The Worst Economic Idea Since Socialism, Explained Using Bikini Girl Graphs) and hasn’t created massive inflation.  Yet.  I guess that in Zimbabwe they managed to just print money like we’re doing now to get out of the problem.

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See, you too can be a trillionaire!

So, in the end, Miss Vargas was right.  Social Security was the start of a program that will do a great job of income redistribution, from a wealthy and prosperous society, to a society where everyone can be a trillionaire, and a good nickel cigar only costs a few hundred billion dollars.

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Thankfully Lincoln posed for this after getting back from Woodstock and before he retired to Gettysburg to make movies with George Lucas.