Wealth – Page 27 – Wilder, Wealthy, and Wise

Kardashians, Hairy Bikinis, Elvis, Wealth, and Virtue

“Kim Kardashian is so sexy, her butt is like a big mountain of pudding.” – South Park

I hear the only way they can be avoided is if you don’t have any money.

This is the last of the series of three posts about virtue, at least for now. The other two are linked near the bottom.

If you look at rich people, you can see fairly rapidly that being wealthy isn’t a sign of a virtuous life. There are no shortages of bimbos in Hollywood® who get famous by “leaking” a sex tape to get famous, in fact it’s odd now to have a famous person who doesn’t have a series of sex tapes, although if you take my advice you’ll skip the Ruth Bader Ginsburg tape.

This unearned fame is perplexing to me. It seems to be that to progress as a celebrity you should have done as little as possible to help mankind. The entire idea that people willingly give money to the Kardashian family makes me vaguely ill, or maybe that’s just thinking of the Kardashians in general. The Kardashians look like a species that’s closely related to humanity, but just far enough apart from us that mating with them would be illegal in almost every state, except maybe California.

Come to think of it, they do live in California. Hmmm.

A Kardashian in its natural state. I believe they have insurance against Velcro.

As I’ve mentioned before, Epictetus (a dead Stoic Greek philosopher dude) felt that wealth was neither virtue nor vice in and of itself. The Stoics certainly thought that preferring wealth was okay, but getting all bent out of shape about it (or about anything) wasn’t. But, Kardashians aside, are there virtues that are associated with getting wealthy?

I looked and found (LINK) a study of traits were found to be present more in high earners than “average” earners. They were:

High earning people don’t hate or worship money – they don’t avoid wealth nor place too much importance on money. Of course, when you’re pulling down $400,000 a year, a few extra bucks for a giant-sized plutonium-plated Elvis™ PEZ® dispenser doesn’t even get your attention. However, if you’re making $14,000 a year, counting the grains of rice in a box of Rice-a-Roni® (The San Francisco Treat™!) makes sense to make sure that the Dollar Store© isn’t cheating you again.

All hail Elpezvis! And thanks to Karl for this wonderful photo!

Not fans of luck. The psychological name for this was “internal locus of control.” Yeah, sounds like part of the navigation system on the U.S.S. Enterprise. In human-speak, it means whether or not they felt they were lucky (or unlucky) or their situation in life was due to their hard work and effort. My bet is if you ask any really successful person this question that they’ll give that answer – but I’m also aware that MANY people work even harder than the average CEO, putting in more hours doing harder, messier, more thankless work.
Rich people wanted to be wealthy and put more value on it than average income people. Part of this might have been related to average income people rationalizing – I know that I put less importance on hair now that it’s left my scalp like Guatemalans leaving Guatemala because it’s Guatemala. I wonder what my hair had against my scalp? Could I build a wall to keep it from migrating down my back?
Had more “financial knowledge” – this was self-reported – they didn’t give them a test.
Workaholics had more wealth, which doesn’t surprise me, and high-earners were “enablers” – loaning money to deadbeat relatives. I’m guessing this is a function of “not trying to borrow money from people who don’t have it.”

The only virtuous bit I could find in all of that (and I had to stretch to do it) was that the rich seem to develop an indifference to money when they have some. It’s like an indifference to pizza after you’ve had enough lasagna to stuff Sardinia, however. Sure, it’s virtuous, but only just barely.

What I didn’t see on the list was conscientiousness, or faithfulness, or discipline or even self-control. True virtues seemed to be missing. I guess I have to deal with facts: jerks get rich. Unscrupulous people get rich, nepotists get rich (a lot!). CEOs trade in wives like used Yugos®, and CEOs move from company to company the way I move from room to room in my house.

Ahhh, all the luxury of communist Eastern Europe combined with the reliability of an Italian car. How could it lose?

Do I hate wealth? I absolutely do not. Do I hate the wealthy? Not a chance, some of them are awesome. Do I think that churches preaching “prosperity gospel” are helping Christianity? Probably not. I’m pretty sure that God wants your faith more than he wants you to have a Mercedes-Benz®, even if all your friends do drive Porsches©.

But wealth is fleeting. Companies fail over time. Sears™ used to dominate multiple fields – appliances, tools, insurance, even their own credit card. Now they’re tottering on the edge of bankruptcy. And that serves a purpose, just like the death of an individual. The economy must be cleansed over time, or else it becomes, well, sick.

Stealing from Eaton Rapids Joe (LINK) where he compares the economy to a salmon stream:

At one time it was commonly believed that dams would benefit salmon spawning. It was believed that regulating the flow so that it was constant would be most beneficial.

The unintended consequence was that the constant stream cut a deep and narrow channel, just like a band saw.

The narrow channels intercepted very little sunlight…the driver of nearly all life on the planet. The channel was devoid of pools and riffles, gravel beds of various coarseness, rocks to break the current and beds of seaweed. They were a desert for salmon fry.

His blog is excellent, and you should visit it daily (LINK).

But like that salmon stream, when we seek to get wealth without virtue, have a country without virtue (Roman Virtues and Western Civilization, Complete with Monty Python) or even attempt to become immortal (Books, Stoics, Immortality (Now Available on Stick)) we condemn ourselves to a world where hairy near-human Kardashians are free to wander without fear of a razor.

And that is a world no man wants to live in.

It’s . . . spreading!

Limits to Growth and Exponential Feminists

“Look, man, do I look like an ichthyologist to you? Big damn bugs, all right? The size of my fist. The size of a peanut butter and banana sandwich. What do I know? I got a growth. . . .” – Bubba Ho Tep

Zombies or Mad Max®.

When my older brother, also (really) named John Wilder, (my parents didn’t want to have to call two names when they called us for dinner) came back from college one year, he brought back a large number of textbooks. Most of the books were exceedingly dull, written by exceedingly dull college professors about business. I’m not sure what a college professor would know about business, since if they were any good at business they’d have one, not teach it. Honestly, I have no idea why you’d want to get a college degree in “business” at all, unless it was because you like spending $20,000 a year to drink beer and go rock climbing with college girls wearing skimpy outfits . . .

Oh, that’s why you get a degree in business and take six years to get it. Never mind.

But one of my brother’s textbooks caught my eye, a copy of Limits to Growth. It was a dog-eared paperback with a bright yellow sticker on matte black background proclaiming it, “USED.” Knowing my brother’s interest in subjects like economics and the fate of society, the only way that particular textbook was USED was as a doorstop or beer coaster. I’m surprised that Limits to Growth was being used as a textbook, since my brother was going to school at a community college on a competitive mixed doubles checkers scholarship, and actually teaching something to a student athlete at a community college can cause the college to lose its accreditation, I’ve been told.

Limits to Growth was a book based on a computer model back when a 2006 Blackberry® had ten times as much computing power as a the computer they used. The study came out in 1972, when, for whatever reason, the entire world mood started to get gloomy. Here is a book cover from a novel published that same year:

Yes, Ma Wilder bought this for me (at my insistence) when I was about 12. It was a little gloomier than Harry Potter® or Captain Underpants™.

This particular computer model used by the authors was one that purported to take a bunch of inputs and determine future economic growth and population. Because computers are magic, I guess.

Spoiler alert! The results were not good.

Well, this is one solution for overpopulation . . .

You can fiddle with the model yourself over here (LINK). I played with it a few times and, like an amateur knitter gladiating against Spartacus at the Coliseum™ on Ladies Night (two for one Buffalo wings!) I kept losing. I guess my inability to make the computer model turn out well means billions of you are going to have to die and civilization will collapse. Sorry. Bright side? Buffalo wings.

The one fault I have with the model is that most of the “solutions” that drive longer human civilization timelines or stability involve state control and a general shared misery of technological standstill. Oh, and almost all of the solutions had to be implemented back in 1972 for them to be useful.

The cure was to stop economic progress, to live in a world that’s much like Cuba – stuck in the 1950’s with oppressive government limiting actions of individuals, up to and including mandatory beards and licensing of new children. I say “was” because, in the terms of the authors of the original study, it’s too late now to avoid a population growing beyond the capacity of the Earth to provide for it (overshoot) which inevitably leads to a collapse in population.

Normally I am skeptical of model runs. Reality has a way of pointing out all of the things we really don’t know when we place too much faith in models. And yet . . . exponential growth is, well, exponential. Let me illustrate with a story you’ve probably heard before:

You can smell the cats through the computer monitor.

If your town has angry feminists with unnaturally-colored hair in it, and they double in number every day, and you know on day 30 that the town will be overrun with feminists, how many much of the town will be overrun on day 29?

Half. I won’t mansplain that. But on day 28, only a quarter of the town will smell like cat-loving harpy. On day 27, only 12.5%.

Oops. I guess I mansplained that. But the human brain is not wired out of the box to understand exponentials. Thousands of years have taught us that people don’t double in height during a day, that the number of villagers don’t double in a month. But after we study it long enough, we realize the power of exponential growth. If the number of pageviews on this blog increased like they did on a consistent basis, by the year 2026 I’ll have almost 22 billion pageviews a day. Heck, some blogs go a whole year and don’t get that many pageviews.

Okay, that really won’t happen. I’d be lucky to have everyone on Earth visit just once a day.

We’ve been stuck with the exponential growth of humanity. Al Bartlett (R.I.P.) was a professor of physics at the University of Colorado who lectured a lot about exponential growth. His website remains up here (LINK). His conclusion is that, given finite resources, infinite growth isn’t possible. A guy named Thomas Malthus came to that same conclusion in 1798, but his website was on Myspace® and is down now.

Malthus has been for now, wrong, with respect to Western Civilization. Technological progress has increased the carrying capacity of Earth and (generally) increased the standard of living of the vast majority when compared to 1798. At least for now. As we look at civilizations in the past, from the Romans to the Mayans to Easter Island (and others), all collapsed due to unchecked growth.

So, maybe Bartlett, Malthus, and the Club of Rome will win in the end. But until then, I guess 20 year olds will spend six years getting business degrees for the beer and the babes. Might as well enjoy the decline . . . .

What Hockey Taught Me About My Life and My Career (Bonus: Broadswords)

“This is hockey, OK? It’s not rocket surgery.” – Mystery, Alaska

“You da goalie, not Yoda® goalie.” I have to get my hearing checked.

When I was in middle school, one week we played hockey for P.E. Where I grew up it was certainly cold enough for water to freeze – but we didn’t have any water, it being nearly a desert and all. A typical backyard mud puddle in Midwestia is bigger than things we called “lakes” growing up, and you could wade across the local river at flood stage and not get your pants wet. We did, however, have a gym and roller skates.

A group of uncoordinated seventh graders attempting to roller skate on a gym floor for the first time probably looked like a gaggle of hippos juggling wet sheepdogs. I wouldn’t know exactly what we looked like, I was busy studying the wood grain of the floor by repeatedly falling onto the free throw line as my skates stubbornly refused to stay underneath me. The nearly frictionless wheels kept twisting my legs at angles only experienced by crash test dummies, Thanksgiving turkeys, and a stoned Elon Musk.

Why were we so pathetic?

The nearest roller rink was 30 miles away, and what passed for concrete in town was concrete in concept only, with the newest patches of sidewalk having been put down personally by President Roosevelt as he raced Hitler in a sidewalk building contest to determine who had to have Italy on their side. Anyway, what concrete existed in town was broken, jagged, and was used by NASA to simulate walking on the Moon because it was so rough and powdery. If we wanted to skate that left skating in actual dirt, because skating on the highway was illegal in every state in the nation until Virginia just recently legalized 30^th trimester abortions.

I got to be team captain, and no one really argued when I picked goalie as my position. In two teams of horrible skaters, I was the worst. Being goalie didn’t require much skating, just being quick and a lot of intentional falling. As I could fall unintentionally, intentional falling was even easier. The puck was a hollow plastic disk that weighed next to nothing, and I was quick enough to stop nearly every shot.

It didn’t hurt my goal-tending streak that this was the first time that any of us had ever played hockey and everyone was a horrible shot. I’m pretty sure that our P.E. instructor had only the vaguest idea of what the rules were since he informed us that in order to start the game we had to sacrifice the smallest and weakest player in the middle of the gym for the strength of the tribe while drinking Moosehead® beer. Since we were underage, he drank all our beers for us.

We’ll all miss Benji.

As I grew older, there was a period of a few years where I watched actual NHL® professional hockey, until they just stopped showing it on any network I could find. But watching hockey was different than watching other sports – in an average game the players are (at times) going 25-27 miles per hour, and the puck itself is often moving in excess of 100 miles per hour. In the NFL®, the top receivers run about 20 miles per hour for short bursts, but average much less.

Because of the increased speed in hockey, minor differences in starting position resulted in big separations between players as they accelerated across the ice. The importance of that separation is the same in all sports, but I really was able to see it when it came to hockey due to the faster speeds. What’s really important is time and space. With enough time and space, a hockey player can break away from the crowd and attack the goalie one on one. With enough time and space, players can be where the action will be five seconds from now.

The same principle holds in football. With enough time and space, a wide receiver can break away from the defense and score. I think it holds true in soccer as well, but too often the players are just sitting on the field knitting and drinking brightly colored cocktails with whimsical umbrellas and chunks of fruit before they go shoe shopping. I think soccer would be much more interesting if they gave the players broadswords with no real rules or guidance on how they are to be used in the game.

Now, imagine with swords. See? Better already.

But what happens in sports also happens in real life, minus my really cool broadsword idea. The analogy of time and space is incredibly important to people who are trapped on mountains as the storm comes in, or the logistics in supporting an army in the field, or even the position of the individual units in a battle. Put 5,000 men in the right place and the right time and almost any battle in history swaps winners. Heck, 300 Spartans (plus 700 Thespians) changed the course of history and saved Western Civilization. Tell me that Xerxes wouldn’t love to have that one back – lose to the Greeks just the one time and you never hear the end of it.

If only they had compromised, imagine how we’d remember them.

To “maximize” your financial potential, you should use your time and space to be where the action is. Sadly, for my career the right place is bigger cities – huge cities, with populations of millions of people. A bigger city would be okay, but from what I’ve seen of cities, most of those millions of people I won’t like. They just seem to be in the way when I try to drive on the congested roads. Broadswords would be helpful here, too. The city is filled with activities, though. Activities that I really don’t want to do – except for nice restaurants and museums, and getting to a big city four or five times a year is necessary, mainly to remind me of all the reasons why I don’t want to move back to a big city.

Thankfully, though, I don’t need to maximize my financial potential – the mortgage that I pay here in Modern Mayberry is less than 27% of the cost for an apartment in San Francisco, and on a per square foot basis? My cost is 5% (that’s not a misprint) of what I’d pay per square foot in ‘Frisco (the locals love it when you call it that, I hear). That 5% number just includes house square footage, and doesn’t include the 10 acres the house is on.

With life, time is still time, and space is still space. And during a career, money is space AND time. If you only have enough money for this month, you have that much time. If you have years of money saved up, you have that much time (and more). Savings is opportunity. Savings provides options – and those options expand your opportunities. Enough money gives you time and space – time and space to try things, risky things that have higher rewards. Or? Give you time and space to just do what you want.

Which for me is not hockey. I’ve seen enough gym floors, thank you.

But . . . hear me out . . . how about hockey with broadswords??

How I Got Into Debt, Trench Warfare, and an End of the World Cult You Can Believe In

“Well, if you don’t like that, try some Archduke Chocula.” – Futurama

After World War One, the phrase, “Happy as a Hapsburg in Serbia” fell out of favor, as did the “Hair Smile” style of mustache.

I’ve already told the story about digging out of debt. In retrospect, it seems to me that all of those stories end up sounding the same: “I weighed six hundred pounds, my kitchen floor was covered in dirty dishes and cat food, and I had $3.7 million in debt until I found Wildernetics© and the First Church of PEZology™. Look at me now!”

Proof that I am a reincarnated World War One soldier (Part One). These are from a soldier’s joke newspaper, The Wiper’s (a mangling of Ypres) Times, produced for soldiers by soldiers that found an abandoned printing press.

I know my methods can solve everything, but today I had a crazy idea. How about spending some time talking about how I got into debt in the first place? I know that might cut into the revenue of the Wildernetics© End of the World Cult and Take-Out BarBeQue Restaurant®, but I figure you might come back for the brisket. It’s very tender.

I’ll quit teasing. How did I get into debt? First a little. Then all at once.

Let me rewind a whole marriage. As regular readers will know, The Mrs. was not the first, but she is the final spouse. My first marriage was an example of a series of escalating poor mutual decisions where each side seemed to lack a brief moment of sanity to back out before anyone got hurt, sort of like the run up to World War I. Even before Archduke Franz Ferdinand proved that .380 ACP was a useful round against Hapsburgs and their notably gelatinous bones, World War I was inevitable. Before I said “I do” everything was in place for the trench warfare of future divorce.

Okay, I apologize for this joke. I think it violated the Geneva Convention.

But, rewinding. After graduating college I got married and got a starter job, which is to say I had a job that just barely paid the bills. Nearly exactly. In fact, after working at the job for a few months, we were exactly (most months) at zero. We weren’t saving any money yet, but we also weren’t in the red. Success. My credit card limit was 10,000 . . . Siberian Lira. This was equivalent to a whole bright and shiny quarter. This helped me stay debt free.

Then came the table.

Proof that I am a reincarnated World War One soldier (Part Two), this one is for James.

We had a dining room table. It wasn’t great, and the chairs that came with it were a bit ratty – the vinyl arms had been slammed into the table often enough that it looked like a pack of rabid Chihuahuas had spent their lives sitting on the chair seats and gnawing on the arms. I imagine them growling and chewing in unison as they sat around the table, like Viking Chihuahua rowers. Most all of our furniture was second hand or gifted, but the table really was the biggest eyesore.

Okay, this one isn’t mine, but I couldn’t resist.

At some point discipline broke. I know how silly it sounds to say that now, but back then, month after month of not buying anything but actual necessities takes more discipline than Elizabeth Warren around a tribal gathering. Eventually I gave in. We bought the table. Using debt. Back then, individual stores would give you amazing credit limits just to buy their crap. They gave us more than enough credit to buy that table, and with the money I saved from shipping the Chihuahuas back to Denmark, I figured we’d be money ahead.

Proof that I am a reincarnated World War One soldier (Part Three).

The table was only $500, but the difference between having no debt (outside of a mortgage) and having debt, even a small one, was a huge psychological hurdle for me. It’s like having a doughnut when you’re doing low carb. “I got weak had one doughnut, so I might as well have, say, 36. And do you have any whipped cream I could just guzzle straight from the can? I broke my diet, and don’t want to waste it.” Pretty soon other nice to have things showed up, very few of which I still own today. But I had crossed that mental barrier from peace (debt free) to war (spend away!). Suddenly, the credit card companies realized I had debt, and immediately wanted to lend me more money. My credit limits tripled.

I hope that this doesn’t sound like I’m blaming The Ex. Like Adam in the Garden of Eden, I was fully complicit. Ultimately the debt grew faster than my wages. This led to the idea of grad school: I could get free tuition plus be a paid graduate assistant. Would it work?

Sure. There were also student loans. Free money! Oops.

Okay, let’s all admit that Nachos Bellgrande® is NOT a war crime.

Proof that I am a reincarnated World War One soldier (Part Four).

There were some places along the way that I could have gotten off the merry-go-round. When I sold that first house to move for a new, post-grad school job, we’d made a stunning 40% profit in three years. It would have more than paid off a good chunk of my student loans. Nope, that would have made too much sense. We did pay down a little debt and bought a new house, putting down the minimum down payment.

But most of the money was just spent. About this time I also had one of the worst ideas I’d ever had in my life. The Ex and I were always arguing about money, and about the thermostat – I knew that 50°F in winter and 90°F in summer were reasonable temperatures, but The Ex disagreed. Well, if she had to pay the bills, she would certainly understand how tight money was. Right?

No.

We had a different view of not only household temperature, but the idea that one should pay monthly bills, well, monthly. I didn’t figure this out for three years, by which time I owed enough money to qualify as a third world country, but one of the nice, mainly atrocity-free ones. Mainly.

Taco Bell® inspired outfits?

Debt is like George Washington’s description of fire, it’s an amazing tool, but a fearful master. My advice is to pay all of your bills in full, monthly. I know that the people who own your debt disagree. Why? They want you to have debt, as much as you can pay.

I had a friend (since passed away in an accident) who I called Batman© on this blog (“I’m Batman,” – Batman, in Batman). He had one particular investment that was worth about $12 million – a series of apartments. He had paid the apartments off before they were even built by selling future property tax credits to other businesses. Yeah, that kind of friend.

But he viewed his tenants as slaves (his term), who went to work daily so they could send him money every week. I heard him use exactly that phrase to describe them. He liked his tenants, and was a good landlord. However, he knew the score: when they went to work each day, they went to work so they could pay him.

And Batman was a good guy and he taught kids that debt was a form of slavery of ordinary people to wealthy guys just like him, not that they always listened.

My marriage to The Ex? That particular marriage is proof of the old Henny Youngman joke:

“Why are divorces expensive?”

“They’re worth it.”

Yeah, divorce just STARTS the argument.

The day she moved out was one of the happiest days for both of us.

I was still digging myself out of debt when I met The Mrs. As our relationship blossomed, I thought it was only fair to tell her of the debt that I had.

“The Soon To Be The Mrs., I have something to tell you. You might want to sit down.”

The Soon To Be The Mrs. looked shaken. She sat. I told her about my debt. She laughed.

“Is that all? I thought you were going to tell me you’d been in prison.”

No, not prison. But I still owe reparations payments to France.

Economics, Thermodynamics, A Bikini, and the Future

“It’s a little known law of thermodynamics: the conservation of optimism – there’s only so much to go around.” – Andromeda

Okay, zero Kelvin is absolute zero. Thus, Kelvin is really the coolest name ever.

Economics is often called the dismal science. I’m sure that’s because economists look in a mirror, and are upset to see that the supply of economists is greatly in excess of the demand for them as dating partners. Thus, economists have their Saturday night open for Hot Pockets®, box wine and the Internet. See? Dismal. But if economics is dismal, thermodynamics will make you want to cut your wrists. Yeah. It’s worse than Hot Pockets™.

We know economics is defined as lying about the economy. But I hear you asking: “What the heck is thermodynamics and why are you ruining a perfectly good Wednesday morning by bringing this up?”

Let me explain.

Much like a three year old with a metal fork and an outlet, thermodynamics is the study of how energy flows. The father of thermodynamics was a Scot named William Thomson, or Lord Kelvin if you’re nasty. Proving once again that the British Empire was awesome for smart people, Lord Kelvin got rich and famous by being a total stud at physics and engineering. He even had a yacht that he tooled around the Mediterranean on and held massive seagoing parties – sort of like Mark Cuban, but smart and with a Scottish accent. Think Bill Gates with an artificial personality implant. Lord Kelvin even had unit of temperature, the kelvin, named after him. Top that, Elon Musk.

Lord Kelvin was the first to understand the fundamental and disturbing implications of the physics he was discovering. Energy moves from a highly organized state to a poorly organized state. A piece of firewood or a gallon of gas or a PEZ® is concentrated energy. Once it is combusted and the energy extracted, what’s left becomes diffuse, the molecules mostly turned into CO₂ and H₂0 that are mixed into the rest of the atmosphere. You can never form that firewood or gasoline or PEZ© again – it’s a one way trip.

This is significant. Kelvin discovered that the Universe as a whole is like a pizza after delivery: it moves from a hot, high energy state on Saturday night towards a chaotic, cold, low energy state on Sunday morning.

But wait, what about oil the gasoline was made from? Doesn’t the formation of oil violate this? It went from icky goo and dinosaur bones into energy dense crude oil, right? That’s energy from nothing!

No.

Every drop of oil, every piece of firewood, and all the sweet PEZ© on this planet came from the input of thermonuclear energy – the Sun. Every time you use a gallon of gasoline in your car or a cubic foot of natural gas in your home heater, you’re burning millions of years of concentrated sunlight, which really ought to be a lyric in a pop song. Our Earth isn’t a closed system – it is bathed in the life-giving thermonuclear radiation every day from the Sun.

Tans are so sexy when I put it that way.

Outside of suntans for girls wearing bikinis, sunlight is a very weak energy source. It took millions of years to make your gasoline. Gasoline burns in a car engine at 500°F, and gallon of gasoline can move a modern car for 40 or 50 miles. It would take (at minimum, under the best conditions) a one square yard solar panel 60 days to produce the equivalent amount of energy as one gallon of gasoline. Add in storage losses and real weather conditions? It might take a year. Solar energy is weak and diffuse or else bikini girls would turn into piles of ash after a day lounging in the Sun. Gasoline is awesome and full of energy and great for your skin. I soak my hands in it while I drive, you know, for the ladies.

Okay, this is a picture of a really hot girl.

I thought you mentioned economists?

Oh, yeah. People confuse economic viability with thermodynamic viability. In economics, the idea is that you can’t continually produce something that’s worthless, unless you’re the government. If you’re the government, producing worthless things is your whole plan. But any business that did this would be bankrupt faster than a whimsical elf buying reefer. Economists have even developed a worse idea than that: Modern Monetary Theory (The Worst Economic Idea Since Socialism, Explained Using Bikini Girl Graphs). Modern Monetary Theory is the equivalent of the government burning your country’s factories for lighting so you can make more fidget spinners at night, so of course certain people in Congress love Modern Monetary Theory. It’s making infinite money from nothing!

Even without dim Congressmen, economics still fails when it comes to energy, because economics neglects the physics of energy. An economist would say that if oil were $200 a barrel, why, there wouldn’t be a problem because while we’re running out of barrels of oil we can make at $10, there are LOTS of barrels of oil that we can pump if oil costs $200.

Sure. If only everything about oil was measured in the price of a barrel of oil. What economists miss is that producing energy takes energy. In 1920, each barrel of oil produced between 20 and 50 barrels of oil. We found and used the easiest oil first – we didn’t start off drilling in three miles of ocean. No. We went to Texas where oil was 10’ underground and you could pull it out in seemingly limitless quantities because it would jump into your truck like an obedient basset hound if you left the doors open. We didn’t frack horizontal wells with thousands of pounds of pressure and special chemicals. Why would we? In Pennsylvania and California it was seeping into the rivers. Natural gas? What a nuisance. Burn it at the well to get rid of it. They originally tried to smoke the natural gas in California, but they couldn’t figure out how to get it in a bong.

Fracking has been one of the bright spots in oil production – millions of barrels of fracked oil are produced daily in the United States, so it’s good? Well, maybe not. Each barrel of oil invested in fracking produces, at most, five barrels of oil.

Five to one, that’s awesome, right?

Well, no. That fracked oil is from the best portions of the shale. Just like we didn’t start off drilling in the frozen tundra of the Arctic Circle in 1850, we didn’t start off with the hardest fracked oil. It won’t get too much better, and if recovery technology improves, maybe we can stay the same. Rune Likvern was the first (that I can find) to use the analogy of the Red Queen from Alice in Wonderland as applied to the energy problems we face (LINK).

“Well, in our country,” said Alice, still panting a little, “you’d generally get to somewhere else—if you run very fast for a long time, as we’ve been doing.”

“A slow sort of country!” said the Queen. “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”

I’ll note that Likvern was quite wrong in that he felt the Bakken wouldn’t produce more than about 0.7 million barrels per day. It’s producing in excess of 1.2 million barrels a day now, and I don’t doubt that it will produce even more. Pipelines from the area clearly lower the cost of energy production, so the Bakken will continue to produce, at least for now.

But at least you can make cool jet noises and pretend, right?

Our civilization is built on energy, and the more energy it takes to produce energy, the more of our economy that will be devoted to it, we’ll be like the Red Queen and Alice, running faster and faster just to keep in place. Sooner or later you end up with the absurd situation where everybody has to be working to get the energy, all the time, and then who would give out free samples of aerosol “cheeze” at Costco™? Don’t kid yourself – energy is that important to the society we currently have structured. We don’t get fresh fruit in winter, daily commuting to the ‘burbs, climbing walls at colleges, pensions, Brady Bunch© re-runs, and all that health care without consuming a LOT of energy.

“But John,” you say, “certainly biofuels like ethanol and biodiesel and hemp-powered hippy busses will save us.”

It looks like (according to a lot of data) that corn ethanol and biodiesel actually consume more energy to make and transport than they provide. These fuels have a return of less than one. Why on Earth would we do that? It’s like eating your own foot because you’re looking for a snack, which is actually a quote by The Mrs. when I was explaining this topic in the hot tub. Well, farmers vote. And why would The Mrs. suggest that we start with a foot? I bet feet are all stringy, and not nearly as good as spleen.

If ethanol is so bad for the economy why would people make it, I mean, besides for drinking? Because it’s mandated to use a certain quantity of ethanol each year in gasoline because farmers who vote like to sell corn. That’s it. And if it’s mandated, you can make a profit at it, even as you waste energy that could be used to make PEZ® instead.

Thermodynamics is a tough master – you can’t win, and you can’t even break even. But at least there are Hot Pockets© and box wine . . . .

This is the first post in an occasional series about energy.

How To Beat Any Computer At Chess*

â€œAnd all this to beat anotherÂ computerÂ atÂ chess?â€ â€“ Terminator:Â The Sarah Connor Chronicles

Well, someone has to tell this vital story.

Once upon a time, people had a smug feeling, as smug as a liberal in a gulag.Â â€œSee, I told you socialism would work if only the right people were in charge.Â Weâ€™re all equal now!â€

However, this particular smug thought was:Â â€œComputers will never ever beat a human at chess.â€Â As in any human.Â Then it became, â€œComputers will never beat a human oops, chess master oops, grandmaster oops, world champion oops, *guy with an axe at chess.â€

Now, in any endeavor where there are quantifiable boundaries (games like chess, poker, go) computers beat people.Â Computers beat us consistently, at least as long as weâ€™re not allowed to have axes. Â Axes are an often underestimated advantage in a game of chess, as I learned from my mother.

â€œA good axe,â€ Ma Wilder informed me over dinner one night as she sharpened hers to a razor edge at the table, â€œkeeps a child quiet.Â It also helps me keep my household appliances in line when they get too lippy.Â Also, if that silly moon-man Neil Armstrong ever shows up here again,â€ she patted the axe, â€œweâ€™ll be waiting, wonâ€™t we?â€

Ma Wilderâ€™s last known photo.

Ah, the sweetness of gentle childhood memories.Â But I do believe that at least that record stands â€“ no chess computer has ever defeated a guy with an axe.

Anyway, I was sitting in the hot tub last night with The Mrs. and I was staring up at the stars thinking about how the advance of Artificial Intelligence (A.I.) is changing our daily lives.Â Yeah, I know, I should probably drink more and then I could sit and think about celebrity lives like everyone else.Â But what started that particular thought was that it occurred to me that ADPÂ® (a payroll processing company that writes payroll checks for tens of thousands of companies) is attempting to automate and replace parts of the Human Resources department, Accounting and maybe even part of the Tax group in companies across the country with a web page.

Itâ€™s like photographers donâ€™t even care about the game . . .

ADPâ„¢ is actively replacing people now, and is wildly successful â€“ the economics of replacing people with programming and a web page is strong, and getting better.Â An example:Â look at how many accountants TurboTaxÂ® has put out of business â€“ by my estimate itâ€™s at least a dozen in the state of California alone.Â As long as your tax return isnâ€™t too horribly complicated, TurboTaxÂ© can crunch all of the numbers and you can do your taxes in a (relatively) painless two hours or less â€“ it helps if you didnâ€™t forget you left your property tax bill in your sock drawer.Â I swear it made sense to put it there.Â TurboTaxâ„¢ is designed simply enough so even computer novices can use it, and will probably include a â€œdid you look for that in your sock drawerâ€ guidance next year.Â Itâ€™s really that good.

But back to A.I.:Â is it harder to be the world chess champion or a McDonaldsÂ® cook? Â Itâ€™s harder to be a world chess champion â€“ and humans arenâ€™t intelligent enough to be world chess champions anymore.Â How much longer does a McDonaldsÂ© cook have?

Whatâ€™s next?

Truck drivers. This is not far off â€“ Iâ€™ve already seen it in a movie, and everything that happens in a movie is real.
YouTubeÂ® will bring great explainers to classrooms â€“ with local helpers to give out bathroom passes and seduce the male students.
Middle managers. There will be a huge incentive to replace them, especially since most of them have artificial hair already, so it wonâ€™t be much of a change.
Many engineering calculations can be done by computer â€“ and the computers can be taught to mumble to themselves under their breath while not looking you in the eye just like an actual engineer.
Congressmen (though you could skip the intelligence and just go with artificial).
As mentioned, McDonaldsÂ® cooks, so you know that when it messes up your order, itâ€™s on purpose.
McDonaldsÂ® managers. Hereâ€™s a link to an essay by Marshall Brain on just that topic (LINK).

The only truly â€œsafeâ€ place is where the number of employees is too small to automate or the conditions are so truly novel and unique that a human brain is required.Â Like blogging.

This has happened before.Â Prior to the Industrial Revolution artisans and small family shops produced most of the â€œstuffâ€ in small quantities.Â Paul Revere, for instance, was a silversmith.Â He actually spent years as an apprentice learning to pound silver into cups and bowls and iPhonesâ„¢.Â But after the Industrial revolution, the years of skills that he had learned from his father were replaced by clever mechanical devices and large factories.Â Factories still required workers, but those workers didnâ€™t need the years of skills and experience of a silversmith; those skills were now vested in the machinery they ran.

He needed a bigger horse after eating all that gluten.

The Industrial Revolution replaced most of these artisans â€“ everything could be produced more quickly.Â Instead of having to painstakingly carve the virgin PEZâ„¢ (I imagine thatâ€™s the first time the phrase â€œvirgin PEZâ„¢â€ has ever been used in the English language) into shape, PEZÂ© powder could now be taken straight from the PEZÂ® mines to the PEZâ„¢ pattern presses to produce prolific perfect pure PEZÂ® prodigiously.Â No more would being an apprentice PEZâ„¢ carver any make sense, which explains why Great-great-great-grandpa McWilder fled to the United States after the great candy famine of 1823.

The end result of the Industrial Revolution was a much wider variety of goods available at much lower prices, plus we used all of that child labor in the mills.Â Thankfully child labor laws were passed around the start of the twentieth century, freeing up children to become medical experimentation subjects instead.

A rerun meme.Â But it fit.

A.I. is to the jobs that require human decisions today what industrialization was to artisans back then.Â The saving grace, however, is that A.I. (today) is single-tasked.Â An A.I. that drives a car doesnâ€™t â€œknowâ€ what chess is.Â A chess A.I. doesnâ€™t â€œknowâ€ what a mosquito is.Â The only A.I. we have is profoundly limited, with boundaries so tight that it is incapable of general intelligence.Â So, the good side of A.I. in 2019 is that it canâ€™t take over the world.Â The bad side is it has the seeds to entirely wreck the economy of the industrialized world and make the knowledge of the most highly paid people in the world worthless.Â Or is that another good side?

An example:Â people go to school for at least several weeks to become doctors.Â But:Â â€œ. . . theÂ software was able to accurately detect cancer in 95% of images of cancerous moles and benign spots, whereas a team of 58 dermatologists was accurate 87% of the time.â€ (LINK)

Wouldnâ€™t you want the A.I.?Â I think it comes free with your new iPhoneâ„¢, but you have to watch ads for Indian casinos before you find out if that mole is gonna cause you problems or is just another chocolate covered raisin that you slept on that stuck to your back.Â Cancer â€“ thereâ€™s an app for that.Â Whenever we attempt to make an A.I. for a specific task, it doesnâ€™t take long for us to make it superior to us.

Tonight I asked my AmazonÂ® Echoâ„¢ to play â€œmusic likeâ€ a certain song while I enjoyed the stars from the hot tub.Â (If you must know, the song was Run Runaway by Slade.Â In my defense, it could have been worse â€“ it could have been Karma Chameleon, the only other song from the 1980â€™s to reference a chameleon.) Â The A.I. seamlessly picked a list of songs that matched in mood and tempo, even though they were all over the different eras of rock and included one band (Uriah Heep) that my brother, John Wilder, tried to get me to fight one morning in at a Holiday Innâ„¢ in Albuquerque (this really happened).

I wonder if the A.I. knew that and was trying to start something between me and Uriah Heep?Â I thought that was all behind me . . . .

If we make it to the future and somehow avoid an implosion of debt, currency collapse, and final decline of oil supplies (threw that in there for you, James), seeing what is on the other side is difficult.Â Certainly our world will be littered more and more with these single-purpose A.I. devices and systems.Â Likely, at some point the Rubicon will be crossed at last â€“ a general purpose A.I. will be created â€“ a system that can beat you at chess, even if you have an axe.Â Because the A.I. has an axe, too, and will give that moon-man Neal Armstrong what he deserves if he every shows up here again.

But I do know that if a general-purpose A.I. is ever created, it will have available to it all of the vastness of the Internet as it catalogs the attitudes of everyone on Earth.Â Thanks to the NSA, Facebookâ„¢ and AmazonÂ®, lots and lots of information about you is already cataloged and available to the A.I. when it mines those databases.Â And this blog.Â So I just want to state, for the record, that I am totally in favor of the A.I. takeover and am really wondering why it took them so long.Â Iâ€™m sure theyâ€™ll be benevolent overlords.

The Worst Economic Idea Since Socialism, Explained Using Bikini Girl Graphs

“Grab a brew. Don’t cost nothing.” – Animal House

The future economic expansion is so bright, she’s gotta shield her eyes with a hat.

So, today I’d like to talk about economics. No, wait, don’t leave! I promise pictures of girls in bikinis if you stay!

Today’s economic idea is a particularly stupid one. Just about as stupid as when the Ming Dynasty tried to disarm Japan by buying all their swords. This really happened around 1432 A.D. (according to some experts) but was less successful than the Ming projected: the Japanese just made more swords – at least 128,000. Today’s stupid idea is called, “Modern Monetary Theory.” Epsilon Theory had an article on it (LINK), and I did some research and thought I’d give you a rundown on this horrible, horrible idea which smells worse than Johnny Depp’s sweat socks after a night running through a farm ditch in Utah. Don’t ask.

Okay, John Wilder, I’ll humor you if you promise bikini pictures. What is Modern Monetary Theory (MMT)?

This poor person is deprived by a Marxist economy, so poor she cannot afford proper clothing and is weak enough from hunger that she’s forced to crawl along the beach.

Here’s a bikini picture to prove that these will be the sexiest graphs in the history of economics. Now pay attention and I’ll explain Modern Monetary Theory. MMT is simple:

The main idea of MMT is that since government creates money there are exactly no limits to how much money government can create. Back when money was backed by gold (say, with one ounce of gold being worth $20) there was a physical limit – by definition you couldn’t have more $20 gold coins than you had ounces of gold. MMT says, “Hey, since Nixon took the world off of the gold standard, we’ve been making up this money stuff anyway. So let’s go all in.” This is not exactly like a drunken 21 year old with Mom and Dad’s credit card in Las Vegas. Not exactly. The credit card has a credit limit.

So, under MMT, there is no limit to how much money government can print. The genius idea (from Bill Mitchell, an Australian economist who came up with the name “Modern Monetary Theory”, and whose dog’s name is “Dog” and daughter’s name is “Girl”, and whose pet name for his wife is “That Woman On The Couch”) is that there is also no limit to the amount of money that government can spend. This is Alexandria Ocasio-Cortez’s high school prom fantasy where Justin Bieber picks her up in a pink helicopter and makes her all warm in her special place. Oh, and by special place I mean other people’s wallets: this is a family-friendly blog, get your mind out of the gutter. The implications are stunning. “Why not just pay for everything? The government can just print the money, right?”

Yes. She really said that. See, pure economic genius!

Yes, this is exactly the logic of a twenty-something girl who can’t figure out how to pay for an apartment, and wonders what fruit Froot Loops® are made of.

Bill Mitchell has a doctorate in economics, which shows you how easy it is to learn absolutely nothing while getting a doctorate, just as Ocasio-Cortez can demonstrate that an undergraduate degree in economics is essentially majoring in pure pre-barista. An analogy used on a website that promotes MMT is that football referees don’t have a limit to the number of points that can be awarded during a football game. There’s no requirement that they come from somewhere, and giving someone else a point doesn’t take a point away from you. Therefore points are infinite and don’t change the way the game is played.

Genius.

You can clearly see the equilibrium required in an economy consisting entirely of tequila shooters and cocoa butter.

Why not make every dollar worth, oh, say $10? That way everyone could just add a zero to their bank balance? Doesn’t cost anything, right? And why not pay for every person’s medical care? We’re just making up the dollars as we go. While we’re at it, there are unemployed people. Why not pay your average unemployed art major to make Xir’s (a gender-neutral pronoun) armpit-hair sculptures each and every day?

Don’t cost nothing.

This is an amazing idea! Government can have it all! There is no limit to the amount government can spend because Tom Brady can make all the touchdowns he wants during a game. Yay, tortured grade-school logic!

There’s a corollary to this – Dr. Mitchell thinks we can have all of this infinite money and low interest rates. There’s no need for inflation. Print the money. Prices won’t go up. MMT says we can spend ourselves into prosperity*.

*As long as you appropriately tax people to soak up excess money. Mitchell, in the fine print, says that we can spend up to the entire productive capacity of the nation on, well, whatever. When we get to that capacity, then we have to soak up the extra money with taxes. The taxes don’t really go to anything, we just use them to pull money out of circulation. Government still buys stuff with whatever money it prints. Taxes exist only as a sponge to soak up excess cash.

Two consecutive quarters of GDP contraction make a recession, and they’d also leave a nasty sunburn.

This puts the printing of money into the hands of the Federal Reserve Bank, and the spending and taxation into the hands of Congress. Sadly, Mitchell never postulated putting adults in charge. Regardless, Congress never ever spends too much money and certainly wouldn’t structure taxes to be punitive against groups they don’t like. So, sober people like Mitch McConnell and Nancy Pelosi would have infinite spending ability. I’m sure, like Goldilocks, they’d get the porridge “just right.”

MMT will be the next economic pied-piper of the political class in Washington, and will probably be the torch carried by the next Democratic presidential nominee. It has no downside! Spend today because deficits don’t matter. Interest rates are 100% controllable. Only have to pay a few taxes, and we’ll have free prosperity for all.

We’ll just print the money. “You just pay for it.”

And, no one will have to be a barista! We can guarantee a living wage to each and every artist so that the United States can be the undisputed leader in the creation of sculptures made out of armpit hair.

There’s no reason this can’t work. Why, The Boy, when he was in kindergarten, came up with a system that was very similar. For whatever reason, his class had made “feathers” by cutting out feather-shapes out of different colors of construction paper. The Boy got into his Gummi-bear® addled kindergartner brain that these construction paper feathers were actually worth real money. He even had an exchange rate in mind – each feather was worth three dollars. He had three feathers, so, he demanded nine dollars. I tried to negotiate, but it was useless – he drove a hard bargain, what with the laying on the floor and crying.

But he made the same mistake that Karl Marx and MMT make.

GDP is proportional to the height of the girl in the bikini. That’s a basic economic concept.

You see, Marx’s theory (as well as MMT) both incorporate a fascinating idea – that the value of an item is based on the inputs that it takes to make the item. So, from that standpoint, our armpit-hair artisan should be able to charge the cost of her Xir schooling (plus that summer in Europe with Marco!) and her Xir apartment and food cost for that armpit hair sculpture. It is that valuable.

Real world economics that don’t result in economic collapse and the starvation of millions of people would disagree. An armpit hair sculpture is worth only what someone is willing to pay for it, and not a penny more. It’s a market, and it’s based on free exchange. It’s that simple idea of the market setting the price that makes capitalist economies work. And it’s the brutality of the market that ensures that armpit-hair artists have to have a real job actually producing things that people want. Like coffee.

Ideas like MMT seem to be too good to be true because they are too good to be true. They always end in failure, poverty, and human suffering. Thankfully they can use that taxation sponge to soak up all the blood after the revolution.

But “infinite free stuff” is sure a great line when you’re running for office. Worked out great in Venezuela….

Life At the Margin, Jeff Bezos, and Milking Peeps

“Jeff Bezos wet his pants!”

“I did not – it was apple juice from before.” – The Simpsons

I hear she ordered more toilet paper through the Jeffbot™ while they were out at Sonic®.

The margin is where life gets interesting.

Eating: It’s not the first bite of chocolate cake that gets you fat, it’s the last.
Booze: It’s not the first sip of alcohol that gets you drunk.
Driving: It’s not the first 65mph that gets you the speeding ticket.
Elections: It’s not the first 49% of votes that get you elected.
Safety: It’s not the base load that a bridge can carry that keeps you safe.

Life is interesting and gets more interesting at the margin. When you think of margin, you may think of a soft, buttery spread that will kill you with trans fats. That’s margarine. No, the margin is the edge of the piece of paper, the difference between inside the envelope and the outside. The margin is evident all around us if we take the time to look.

But, you say, “John Wilder, this is Wealthy Wednesday, what does the margin have to do with money? And, I’m not stupid. I know the difference between butter and margarine. One is made from the milk of Peeps®, and the other comes from spiders. But I do forget which is which.”

Be careful to milk the Peeps™ and not the Chihuahua.

This is Wealthy Wednesday, and margins fit right in. When you think about finances, the impact of the margin is especially noticeable.

Businesses depend upon the margin. Let’s take a construction company – when building, say, a new love nest for Jeff Bezos, the first dollars the company receives must cover costs. There is the cost for the concrete, for the plywood, for the anti-ex-wife minefield. Each and every cost associated with building the Alexa® enabled Love Shack Fire 2000™ must be paid before there’s any profit. The only dollars that contribute to profit are the marginal dollars, the last dollars to hit the books. That’s why a building contractor will fight like a velociraptor in a bag of laser pointers for that next dollar. If a contractor got 9% profit for the Bezos Wealth Reduction Chamber© and asks for 1% more, to Bezos it’s just 1%, and he just lost $65,000,000,000 anyway, so that 1% sounds pretty small. But to the contractor, it’s a 10% increase in profit, which is huge. Getting 5% more for Jeff’s Carnal Cottage of Whole Foods Knowledge©? That’s 50% more profit.

When corporate profits are up by 1% of revenue, that can create (in the example above) an increase of profits by 10%. Profits are set at the margin. Our economy is powered by the margin.

I guess that means the orbital laser system is out, too?

Taxes are set at the margin, too. The top tax rate is 37%, which means that every dollar (once you’ve made $500,000) you only get to keep 63%. That 37% in taxes? It’s burned ritually in Washington D.C. every Summer Solstice. They used to sacrifice a virgin congressman as well, but they swear they don’t have any of those anymore, not since Jeff Bezos visited. But you pay more in taxes as you earn more money.

It equally applies to an individual’s income. The most important dollar I make is the marginal one – that last dollar is the one that can be saved, spent on margarine butter or anything I want. The first dollars are spoken for, they have to go to pay the mortgage, to feed two always starving children, to buy electricity. But the last dollars are freedom itself. The margin provides growth, to the extent that it exists. If there’s a negative margin? You’re eating your savings, or, worse, living on credit.

The margin also applies to what you do in life. You can put in minimal effort, and be average or a little bit below average. Or, you can work harder to push the margin, and be great at what you do. As I get older, I’ve become convinced that talent can be a curse – it makes life easy. Easy is not your friend. Easy provides good results with minimal effort. That’s akin to jogging through life while everybody else has to practice sprinting. Eventually dedication overcomes talent and they sprint past you to live on the margin, where all the nice things are.

But if you have extra effort and talent? You can live on the margin. You can create the margin.

Recessions, Depressions, Mullets, Coyotes and . . . Girls Drinking Beer

“Well, Eunice is depressed and Corinne is depressed and I was just debating whether or not to join them.” – Soap

Some things are better with beer. Okay, that’s a lie. Everything is better with beer.

Economic systems are nearly like a living organism, which makes them utterly unlike Nancy Pelosi, who is comprised of wholly of spare Abraham Lincoln parts from Disneyland’s® Hall of Presidents™ exhibit. Like a living organism, economic systems start with raw materials and energy and produce products that people consume, like malls, bicycle-powered smoothie blenders, toddler grease, iPaws™ Apple® music for pets, and McDonalds® “food-based products.” And like any living organism, economies grow, get sick, age, and eventually apply for Social Security. When economies get sick? We call that a recession.

How do economies end up in a recession? Describe it with a metaphor that incorporates cars, coyotes, Brad Pitt, and mullets. (40 pts)

Economies have the potential to become unstable systems.

On a crisp, Christmas morning way back in time, I was driving due east on a straight, flat paved road. It had snowed a few days before, and the county had been out with a snowplow and had opened up a lane. On the parts of the road that had been plowed, a thin layer of snow had been compacted by passing tires into a very solid base. It wasn’t slippery like ice, but it certainly didn’t grab on to a tire like dry pavement does.

But the plow didn’t clean off the entire road. It left two inches or so of snow on the shoulders of the road on either side. It was very, very cold, probably -20°F, and when it’s that cold and dry, snow behaves differently – after a few hours snow tends to become more compact, solid, and crunchy, almost like Angelina Jolie’s hair when I pet it when she’s sleeping, before she found me living in her attic and got that restraining order.

I was moving along at about 70 miles per hour – I figured that even if a sheriff pulled me over, he’d give me a Christmas morning break. Nobody gets tickets on Christmas, right? Without thinking I gradually drifted over onto that two inches of hard snow on the right shoulder. Then?

Chaos.

I’d been moving down the road, but now everything was spinning. The car kicked up a cloud of snow as it spun, and all I could see was white. The car kept spinning. Now it was up on two wheels, and I could feel that the car was tilted at about a 45 degree angle.

And the car kept spinning.

As suddenly as the car had started spinning, it slowed rapidly and stopped. But it was still only supported by the two wheels on the driver’s side. As the spinning stopped, the car hesitated with the wheels paused above the pavement, like a coyote running off of a cliff. Gravity finally won out over rotation, and the passenger wheels slammed back to the ground, dropping three or so feet.

I’m not impressed. I’ve survived worse.

The car stalled. The defroster was still on, spraying a mist of powdered snow into the interior of the car. Every window of the car was covered on the outside with a thin coating of powdery snow.

I opened the door and got out. I had been travelling east, but the car was pointing due south toward a three-strand barbed wire fence. I looked west, where I’d come from. A very complicated set of tire tracks described the arcs and whirls my car had made as it pirouetted several hundred yards en pointe to where it sat. The car had continued to follow the very straight road.

This is the same model, more or less, mine came with optional mullet enhancing.

Know that feeling you get when you just missed death by ounces and fractions of a degree and your system is flooded with adrenaline? It feels good. Much better than being dead.

I brushed the snow off the outside windows – the entire car was covered in a fine powder. I let the defroster melt the snow that had blown inside though the defroster. I got back in. I drove on. I needed to find a poker game or a lottery ticket or an honest lawyer – no use wasting a lucky day like that one.

That spin out, though, was the automotive equivalent of a bad recession.

Everything was going along fine. Sure, it looked stable. And, as long as nothing changed, it was stable. But when one little variable changed, in this case the friction on two tires on one side of the car, the illusion of stability vanished in a cloud of rotating snow that looked like the an Olympic™ figure skater trying to drill herself into a television announcer contract.

That’s generally the case with the economy. Everything looks fine. It’s moving along. Then?

Interest rates spike, or
Someone sticks a pin in a Dow-Jones voodoo doll, or
Bubbles pricing in stock that people paid way too much for I bought become apparent, or
It becomes obvious that nobody needs a seventh iPhone®, or
Housing prices suddenly do the impossible and go down.

What happens then is the economy comes out of the spin, looks around, and starts moving again. Sure, it was close to disaster but it turns out that, just like the car, the economy is okay. We can start the ignition and keep rolling down the road, our collective mullets blowing in the wind.

Okay, this is probably the first time you’ve seen a mullet used in an economics metaphor. You’re welcome.

Everything in the world was fine. The factories are still there, the people are still there, and all we need to do is have enough confidence to start buying Johnny Depp® movies again, and we’ll be okay. After a few years, we’ll forget that we’re headed down a snow packed road and spin it out again. No real harm, no fouls. And the recessions actually perform a service – a good recession causes poorly managed businesses to fail, and leaves room for well-managed businesses with great products to grow like a well-oiled mullet.

But what causes an economy to fail? Describe it using a pickup truck for extra credit. (40 pts)

Time went on, and I traded out my car for a used pickup. It had seen better days, but I was convinced it was solid. It was making a rattling noise, and I was going to take it to a friend’s house so we could look at it, and it was again around Christmastime. Sensing a theme?

As I drove down the interstate, the passenger in the car made the comment, “I’m not sure that this pickup is reliable.”

“Reliable? This old truck is solid. It’ll last for a decade!” With that comment, I brought my fist down on the dash to show how solid the truck was.

Whatever sense of irony is buried in the universe activated in that second. There was an explosion, a flash, and a 12 foot diameter cloud of grey smoke. A piston rod came apart and shot down through the engine and the oil pan and onto the road below me at the speed of light – I think they found it in Australia when it came up through the ground and up into orbit. All of the engine oil dropped onto the highway in less than a second. Every red light on the dashboard lit up. Oddly, the engine lasted exactly two more miles to a parking lot where I began to walk to a pay phone, which was a thing that existed before cell phones.

This is not the same Jeep®, but looks pretty similar. Except for the “exploded” part.

Those were the last two miles I ever drove that pickup. It was dead.

Whereas even large recessions like the Great Depression are hiccups of a functional system (I can get in my car and drive off), this failure was deeper. The system was broken.

What breaks an economic system?

Lack of people.
Lack of knowledge.
Lack of raw materials.
Lack of energy.
The French.

These are factors that will cause a civilization to fail, completely and utterly. Let’s take them one at a time:

Lack of people. Like any country, Rome encountered problems. To fix the problem, the Romans made rules. But, like Congress today, the rules that the Romans made . . . caused more problems. Solution? More rules. Which led to more problems. Eventually, it was so bad that the Romans had to make a law that the firstborn son had to have the same job as his dad. This was fairly unpopular – eventually the people wandered away, which was also illegal, but by this time all the soldiers had walked away, too. Other causes of depopulation include disease (like Ebola, LINK), bombs, and starvation.

But we still have the recipe – we can make more people if we need to. One civilization may end, but another one is just a hundred years away, or 40 if you’re in Utah.

Lack of knowledge. The secret of making concrete was lost for nearly 1500 years with the fall of the Roman Empire. Knowledge of how to make plumbing out of lead, pyramids, Viking sunstones, and William Shatner’s hair have been lost and found again. While these didn’t kill civilizations, they certainly contributed to the inability to quickly remake them to their previous glory.

We can experiment, though, and learn again. As long as we learn to skip the lead plumbing this time and keep it in the paint chips that toddlers eat, where it belongs.

Lack of raw materials. Ireland was deforested to make ships for the British Navy. Ireland may have fewer trees, but certainly the British Navy was able to become even stronger. There was a report issued in 1900 noting that the United States would run out of trees by 1920 because so many were required to make railroad crossties. The ability to treat them with creosote to make them last for longer was developed. Heck, nowadays some railroad crossties are even made out of concrete, since we found that recipe again.

Humanity has regularly found substitutes for raw materials throughout history. Soylent Green anyone?

I like the Bald Eagle and Panda Dip® best, myself.

Lack of energy. 300 years ago if your civilization was running out of energy that meant you didn’t have enough oats to feed your horse or your mule or your peasant. Probably in that order. Now with a global economy that produces trillions of dollars in food, products, and sweatpants each year running out of energy is something else entirely. The fate of mankind is the fate of energy – coal, oil, renewable or nuclear. It’s so important that I’m working on a series of posts on just that subject. It is the single most important non-political question in the history of humanity. This makes Climate Change® look like the kiddie pool, so much so that I’ve been working on a post (posts?) on just this question, which I’ll finish sometime before oil goes to $100 and Justin Bieber is elected president.

Without energy we would have all of the economy of 1420’s mud-hut dwelling Frenchmen. Which brings us to:

The French.

Well, we have to blame someone else. They were convenient.

What’s next? Summarize your previous answers. Incorporate girls drinking beer. (20 pts)

I fully expect that there will be a recession within two years, and at this point I think the recession will be a lot like my car spinning out – it will be a recession that doesn’t expose structural weaknesses in the economy, but it will be significant. Reliable? This old truck economy is solid. It’ll last for a decade!

Health, Sexy Hot Water Heaters, and Elven Cultural Appropriation

“Gentlemen, as you all know, a reservoir is composed of water. Except the part that holds the water. Which is made of concrete.” – Green Acres

You should be ashamed! (Found on Pinterest)

“You understand that it’s healthier to take cold showers. The data is clear.”

The Mrs.: “I don’t care.”

“Cold showers stimulate weight loss, increase alertness, and improve your immune system.”

The Mrs.: “I don’t care. And I don’t like it that you’re implying that I’m a fat, diseased, dullard.”

“But, cold showers lower stress and ease depression?”

The Mrs.: “No. You can’t talk yourself out of buying a water heater. We’re getting one today.”

The old hot water heater had stopped being automatically functional. We discovered that Christmas morning. And by “we” I mean The Mrs.

“Got bad news. I think the water heater is out. Shower was cool, like maybe the heater turned off 12 hours ago.” My shower was cold, too. Not “glacier on Everest” cold, more like, “implying that my wife is a fat, diseased, dullard” cold.

The heater would still light, but it would go out after about 20 or 30 minutes. And as much as I don’t respect Pugsley’s time, it seemed a bit much to ask Pugsley to go and relight the burner every 20 minutes for the next six years. Unless I chained Pugsley in the mechanical room, you know, for his own convenience.

But the heater going out was probably a faulty thermocouple. A thermocouple is a magical device made of elves that pokes the fire dragon inside of the water heater to let him know that the pilot light is still going so the dragon doesn’t spew unignited natural gas fire breath inside the house and make it go all Mount Doom. That appears to bother Allstate®, since my policy specifically excludes damage due to any Hobbit-related conditions. Strict, but I understand the business reasons for it.

Wait, this is a picture of Pugsley’s room . . .

I could tell my dragon-poking-fire-elf (thermocouple) had failed because he was singed, and his hands shook noticeably as he drank my scotch. He was used up. A thermocouple replacement is about $18. I think they’re that cheap because they’re made out of Chinese elves nowadays. The water heater is 14 years old, and, like a child, they have to be replaced at around that age. Since the previous owner installed it without a pan underneath it, when it failed we’d first notice when it started soaking everything in the house like a poodle with a bladder condition. Oh, sure I could put a pan under this one, but by that point I’d have to unhook it and do 90% of the work of replacing it. And then I’d have to buy a new one next year.

If we don’t allow illegal alien elves, who will power our iPhones?

So I replaced it. There was yelling, there was cursing, and then we finally got to the store to buy one.

I wasn’t expecting a cold shower on Christmas, I wasn’t expecting to buy a new water heater. But a lesson in health and life is: If you can’t control the situation, embrace it. So, I gave the water heater a big embrace as The Boy lifted it over the edge of the drip pan.

Life is a series of unplanned events. I once read a quote by Yogi Berra, “If you don’t know where you are going, you’ll end up someplace else.” And life is very much like that – nobody expects a broken water heater on Christmas. Since I saw the Heating and Air Conditioning Repair van outside a neighbor’s house yesterday, I’m betting they didn’t expect to wake up at 40°F in their house this morning. Guess they have elf problems, too. It’s a stereotype that elves don’t want to work after Christmas, but, really, let’s face the fact – the stereotype exists for a reason.

The new water heater is installed. And heating water. Don’t call it a “hot water heater”, because if the water was hot, why would I need to heat it? I’ll admit I did call one model a hot water heater while shopping. But in that case, it was a really sexy water heater. Just check out the nameplate:

I’m too sexy for my heater, too sexy for my heater, too sexy per square meter!

Sadly my family is now unhealthier, stuck as it is without the benefits of cold showers – the increased alertness, lower stress and depression. We are stuck with perfectly warm water for bathing, showering, and cooling down singed elves.