Sitting? Death. Get up. Neal Stephenson says so.

“I have broken a ten year old’s spirit.  Time to reward myself with a fruit on the bottom yogurt.  Plain, plain, plain, plain . . . ooh, fruit.” – The Simpsons

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Not where Soviet goatherders live.

I remember watching a news program when I was quite young and staying over at my grandparents.  A reporter had been dispatched to some part of the Soviet Union to interview a lot of old people.  The story showed a bunch of goat herders who lived in stone and mud houses in some remote mountain valley.  Wonderful television, right?  Well, the kicker was all of these old people lived to their nineties, but still claimed that they could beat the Nigerian cross-country ski team in the Battle of the Network Stars®.  Or maybe it was the Gong Show™?

The reporter earnestly asked a bunch of questions through interpreters about Soviet lifestyles.  We were watching on 27” televisions that seemed normal in size then, but absurdly small today.  Thankfully, they weighed about 1000 pounds each (the television, not the Soviets).  Back then four or five of these televisions cost about as much as a brand new Camaro®, which is the same thing as a new television costing over $6,000 now.  Or a new Camaro© costing about $4,500.  Now.  Don’t know about you, but I’d love to trade five televisions for a brand new Camaro™.

Turned out that goat herders spend their days herding goats.  And walking up and down steep hills to carry water back up to their mud and stone huts.  And chasing goats.  And eating yogurt.  And doing whatever else it is that causes them to lose their teeth and look like shriveled raisin-people.  Heck, the Soviets never learned about sunscreen and I bet their version of dentistry involved a steam engine and a comical series of gears in some fashion – for all I know the raisin-people were twenty three years old.  And they had zero televisions or Camaros®.  Did I mention that they discussed eating only yogurt?

Soon after this story hit, yogurt became available in the local supermarket.  I don’t think this is a coincidence.  I’m guessing that the American consensus was that we could eat our way skinny using yogurt.  And the other bet was that you could live to be as old and leathery as those Soviets.

First Yogurt Purchase on Wilder Mountain by Ma Wilder:

Young John Wilder:  “Ummm, gross.  It looks like snot.”

Ma Wilder:  “It’s good for you.  It has bacteria.”

Young John Wilder:  “SUPER gross!  Bacteria?”

Ma Wilder, flustered:  “These are supposed to be good for you, young comrade!”

But now I’m pretty sure that what kept those goat herders living their long stone and mud hut lives wasn’t yogurt, but was:

  • No access to Ding Dongs®, Twinkies©, or Fruit Pies™, and
  • Having to walk up and down hundreds of feet on that steep, steep mountain every single day of their lives to chase their goats and get their water, and,
  • Great Soviet technology, which was far better than American technology – Americans have car/truck combination that is El Camino? Soviets have tank/car/jet combination called El Gorbacar!  Runs on kerosene and weighs 124,000 pounds.

Okay, my bet it was the low carbs and all the strenuous exercise and not so much on the El Gorbacar.  Same thing with the native Alaskan population – native Alaskans were lean, mean polar bear killing machines before Coca-Cola®, Ho-Hos™ and Doritos©.  After Ruffles®, Wonder Bread™ and mechanized transportation?  Skyrocketing heart disease.

I imagine those ex-Soviets all weigh 450 pounds now and sit around playing GoatHerder3™ on Playstation©.  But they have awesome non-leathery complexions from living in Mom’s basement.

And, all the latest data keeps proving my supposition:  moving around a lot keeps you alive longer.  This is pretty much the same story as 2016.  And 2015.  And every year since 1936, which was the last year that medical science was concerned that vigorous activity would disturb the bodily humours which could only be dispelled by large amounts of opium, radium, and linoleum.

The story is evolving.  Even if you’re fit in all other ways, for the last several years it’s been reported that the data now appears to say that if you sit for long periods of time?  You’re going to die.

Well, die sooner.  We’re all gonna die.  It’s all a matter of if you get to see “Game of Thrones” end, right?  Who needs to see 2019?

The markers appear to say that if you rest for longer than twelve and a half hours per day, and more than 10 minutes per session . . . you’re going to die sooner.

And the reasons?  All of the reasons:

  • Cardiovascular disease
  • Cancer
  • Depression/anxiety
  • Backaches

Okay, backaches are generally not fatal.  But the rest of them certainly can be.

And, like I mentioned before, absolutely zero of these stories are new – it seems to be a story that the media trots out every September and March.  It might have something to do with when new journalists emerge from their cocoons after their larval stage as sons and daughters of investment bankers who can afford surgery to make them attractive.  My prediction?  Pumpkin-spice latte stories in our near future as the journalists develop into their final glorious form:  commentators.  Ahh, the beauty of the circle of life, from weathergirl to Cokie Roberts.

But I digress.  Actually, the first time I recall reading about the dangers of sitting was around 2000.  Neal Stephenson, one of my favorite authors, wrote about it in an essay in 2012 called . . . “Arsebestos.”

Mr. Stephenson compares sitting to asbestos, since both lead to early death, hence . . . Arsebestos.  He made the point that future employees will be able to sue based on being required to sit all the time at work.  Basis of the case?

Butt brutality?  Heine horrors?

But one of the reasons I love Mr. Stephenson is that he’s got skin in the game.  He put his lifestyle where his mouth is:  he started working on a treadmill desk, which is a big deal, as a loveseat addicted author with a glass of pinot noir in his hand can attest.

Mr. Stephenson’s results are well documented here at this (LINK) of the 416 days he spent working on a treadmill desk at the time he wrote the article.  He did run into some problems with going too slow – the pace wasn’t natural and he lurched from side to side.  When he pushed his speed back up to 1.8 miles per hour, all of the physical problems associated with the treadmill dropped away.

So, the short message of this post?

Get up and move.  Now.  Dance like you’re a crazy fool!  It will save your life.

Unless you’re running a crane at a construction site.  And then?  For heaven’s sake sit down and do your job!  You could kill someone . . . .

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

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

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

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

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

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

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

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

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

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

Government Debt and Why 1973 is Important:

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

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

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

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

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

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

billion dollar babies

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

DANGER:  FALLING DOLLARS AND GRAPHS AHEAD

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

basedebt

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

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

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

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

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

Debtintofuture

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

debtplusinflation

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

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

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

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

The Cold Equations don’t lie.

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

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

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

And what are the consequences of trying to stop?

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

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

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

The Part Where Wilder Answers His Own Question

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

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

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

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

The second thing that keeps this system going:

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

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

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

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

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

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

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

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

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

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

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

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

“Where is everybody?”

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

Where are the aliens?

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

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

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

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

From XKCD.

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

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

Translation:  This result makes no sense.

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

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

From XKCD

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

From XKCD

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

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

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

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

 

Superpowers, Stress, Ben Franklin’s Nails

“I’m not stressed beyond the stress induced by telling you how stressed I am.” – House

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The Boy took this selfie.  Not sure what he was upset about.  Maybe it was the stock market? 

I think too much.  I know, I know, it hurts.  The Mrs. tells me I should just relax and not think so much.  But perhaps my superpower is that I think about the future, so to not think about the future would be like Superman® not flying or Aquaman™ not . . . talking to fish, or whatever it is that he does.

To me, the future is a set of probabilities, branching at intervals.  And what I can do is imagine branches from decisions in the past reaching into the future, starting at the single, solid limb of now, and moving forward, getting smaller, as larger probabilities stay thicker, but smaller possibilities branch out into tiny limbs.

The tiny limbs are real, though, and they represent things that can happen based upon both the choices made today as well as some element of chance (either random or not).

As we’ve discussed in the past, Taleb taught us that all probabilities and all risks aren’t equal (LINK).  And Seneca said it’s always easier for things to come crashing down than to hold them together (LINK).

 

But we are active in creating our future.  I can place myself (mentally) in that future to understand what that situation looks like.  I can imagine a future where I cooked a cherry pie.  I can then map it out and see what I can do now to make a better then.  Like buy whipped cream for the top.  And I can imagine a future where we’ve all forgotten about Warrant:

Is it wrong that sometimes I sing the lyrics “She’s a hairy guy?”  I swear this isn’t about Jenner.

My Superpower is a little like chess, but with more showering than the last chess tournament I was in.  Also, the variables are not as well-known as chess, but in most cases I’ve done really well with at work and at life with this ability, though I cannot yet hover or make adamantium claws spring out from my knuckles, which would be even better superpowers than fish-talking.

But when we finally get to a decision point, most of the time it’s like coming home to a place I’d already been on my imaginary branch so I’m generally not surprised.

One advantage to this power is that I look at the risks around me on a regular basis and try to figure out ways around them, measures that mitigate them, or better yet, insurance that I can get that allows someone else to take the risk (insurance is not always an Allstate® product, sometimes it’s a contract where somebody else owns a risk, which can often be gotten for asking).

Of the things I do at work (besides being snarky and obscure), this is probably the best one.  Way better than my coffee consumption skill, though I’ve been told that’s legendary.

And frankly, I like the pressure when the ball is in my hand and I have the ability to think, to perform and to achieve.  I like the odds on me performing well, because I think like this:

 Diz ſagent uns die wîſen, ein nagel behalt ein îſen, ein îſen ein ros, ein ros ein man, ein man ein burc, der ſtrîten kan.

-Freidank (Which is a dude’s name.) via Wikipedia

I know, a knee-slapper, right?

The English version of that is:

The wise tell us that a nail keeps a shoe, a shoe a horse, a horse a man, a man a castle, that can fight. – Now a translated Freidank, still via Wikipedia

And, know that Freidank lived in 1230 A.D., long before Ben Franklin collected a version in his book “The Way to Wealth” that most of us are more familiar with:

For the want of a nail the shoe was lost,
For the want of a shoe the horse was lost,
For the want of a horse the rider was lost,
For the want of a rider the battle was lost,
For the want of a battle the kingdom was lost,
And all for the want of a horseshoe-nail.

Thinking this way is stressful, but not the bad kind of stress, but rather the excitement, the exhilaration of having a real problem, a meaningful problem to be solved.  Are there exciting challenges?  Sure!  Are there horrible, frustrating setbacks?  Also, sure.  But when everything comes together and we light up the cigars to celebrate, it more than makes up for anything “stressful” along the way.

A Stanford® professor (LINK) has been doing research and agrees.  “Good” stress is . . . not bad for you, and, in fact, may help you perform at your peak.  It’s a challenge.

That same article noted that stress was bad mainly if you thought it was bad.  If you thought it was okay, exciting, just a challenge?  It tended to not have the bad long-term consequences we associated with stress: the heart attacks, the stress hormones, the late night peanut butter and tuna sandwiches, etc.

But for me, the downside of this thinking was still this thinking.

I can see bad things.

My job (in many cases) has been literally looking at the worst case and pulling back from there.  I once looked at tornado frequency in the Midwest, and made a half-hearted attempt to quantify the likelihood of civil war changing our government (this was only for about six months of my career, but it was an interesting six months).  Since that was my job and I got paid to do it, it tended to bleed over into home life, so I thought about worst case scenarios even when I was off the clock, and related them to myself and my family.  The upside?  The last time we needed duct tape, paracord, a socket set, and a knife on a family trip (this really happened) we had it in the emergency kit in the trunk.  I only wish I had packed the goatskin – we could have used that.

So I think.  It used to be worst at night when I was ready to go to sleep.  The possibilities would branch out and I would end up going down decision/probability trees (of my own personal life) and, being night and all, often end up in some dark places.  I’d start with, say, needing to pay the mortgage, and then end up penniless and panhandling to pay for new shingles after a storm that never happened.  Yeah.  Silly.  Now I play the radio so other people think and I can listen – it distracts me so I don’t end up on paranoid rabbit trails.

The downside of this is that thinking down chains of causation, I used to build up a big amount of worry in a hurry about personal stuff.  It’s not that I’m scared of the future, it’s that the future can be so uncertain – understanding that a risk exists doesn’t tell you very much about the risk.  For that, experience and mathematics are key, but we’ll have that on a Monday post some week.

One thing leads to another, and I ended up with?  Stress.

Not the good kind.  I’d worry about aspects of my future that were difficult to control.  Research indicates that the key to removal of stress in life is having control.  In psychological speak, believing that most outcomes depend on things that you can do and control is called an “internal locus of control” and is just a fancy way to show that you like having the ball in your hands on a 4th and five with 30 seconds left on the clock.  You believe you control your own outcomes.

So I turned parts of that into challenges.  I challenged myself to have enough money so that I didn’t have to worry about next week’s mortgage, or even next year’s mortgage.  I took my money stress and put it in my hands, and thankfully had the opportunities to make sufficient money that I’m not scared about tomorrow.  I did my best to take what was a (bad) stress and turn it into a good pressure to achieve.

Tough times along the way?  Yeah.  But way more wins than losses.

I think that’s why it’s exhilarating to quit a job – it’s the ultimate demonstration of control when you can move to a situation where you think you’ll be happier.

I think that (in part) is what Jordan Peterson means (LINK) when he says “clean your room” – take control of some facet of your own life so that you feel you’re able to fix your own situation before you burn out.

I’ve switched from being fixated at looking down long dark halls and now I see the light coming in from the side rooms.  And I like to think that I take some time to play there – because on a long enough timeline, all of our mortality rates are 1.0.

And I’m committed to taking control and ownership of my issues.  Like Mark Twain said, “Worrying is like paying a debt you don’t owe.”  And, as I noted on an earlier post, that’s at least part of what keeps me writing.  I’m taking control, taking the garbage out, and making sure I have enough nails.

Somebody might need that horse after all.  Better yet?

Let’s saddle up Ben.

For heaven’s sake, if you’re really stressed out, go see a doctor, not an Internet humorist!

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

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

DSC03968

Even Bigfoot appreciates the climate in Margaritaville.

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

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

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

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

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

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

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

Warren Buffett has done okay.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Alone, however, P/E tells you nothing.

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

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

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

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

Simple, right?

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

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

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

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

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

What about . . . Tesla?

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

And Honda?

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

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

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

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

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

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

ftroop

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

Source- mycomicshop.com

Profitability

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

Leverage, Liquidity and Source of Funds

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

Operating Efficiency

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

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

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

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

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

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

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

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

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

End of Empires, PEZ, and Decadence

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

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

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

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

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

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

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

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

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

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

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

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

-Glubb

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

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

Okay, my criticisms first.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Decadence is due to, per Glubb:

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

I’d argue that Glubb’s “reasons for” Decadence are subject to argument, but they’re not out of the question.  I’d argue to add the increasing coddling of children so that we don’t ever let them experience true hardship, at any costs.  My parent’s playground had a merry-go-round that cut a kid’s legs off when he fell down.  My playground put planks over the spot where he fell through.  My kids?  Soft fluffy pillows are under the swings, and games like “tag” are unapproved, whereas games like “competitive sitting while quiet” are looked on with approval by the school’s cadre of lawyers.   I could take live ammo to school and once found a live tear gas grenade on school property.  Today’s kids?  Plastic knives are out of the question.

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

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

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

pez

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

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

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

What happens on the other side of Empire?

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

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

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

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

What does this portend for the United States?

If the Roman model is in play, we’ll end up with a Caesar – a ruler that will follow many of the previous forms of government, but also be a more despotic ruler.  The courts and legislature will exist to support him.  A leader of this type would reinvigorate and replace the current pessimism, materialism and frivolity with a renewed focus on maintaining and expanding the power of the empire at the expense of freedom and liberty.  After a rough patch, most people will be okay with this.  Good points?  Cool buildings and triumphal arches.  Bad points?  Purges of people who believe that President for Life Carl XV isn’t tall enough.

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

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

Greater Ottawa, anyone?

High Carbs, Harvard, Insurance, and Avoiding Doctors

“Undercover insects?  Talking iguanas?  This isn’t a research station, it’s a three ring circus.  You should charge admission.” – Star Trek, Voyager

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Pugsley bravely researching a high-carb diet. The Sugar Research Foundation® thanks him for his bravery!

In 1967, a member of the Board of Directors of the Sugar Research Foundation® (yes, that was a real thing) published a statement that noted there were significant flaws in studies that linked high sugar consumption to heart problems.  The Sugar Research Foundation© paid for the work that went into backing up the statement.  No problems, right?

Perhaps the Official Song of the Sugar Research Foundation™?

The statement came from (in part) the Chairman of Harvard®’s Public Health Nutrition Department, and was published as research in the New England Journal of Medicine©.  From what I’ve read, his position at the Sugar Research Foundation™ and their funding of the study wasn’t mentioned.  Surely no bias from a Harvard© man?

This study resulted (at least partially) in the Low Fat/High Carb craze, and increasing amounts of obesity and heart disease.  So, to recap history:

  • 1967: Carbs Good
  • 1972: Atkins – “Not so fast.”
  • 1978: Carbs Good
  • 1981: Atkins – “Really, dudes, you’re wrong.”
  • 1980’s and 1990’s: WE SAID LOW FAT.  Oh, and bread works like sugar, so have as much sugar as you want.  A Milky Way® is like six pieces of bread.  Or a potato.
  • 1999: Atkins – “Dudes, not working.  Chill and have a steak.”

I could keep going.

Is it just me, or does medical research follow the model shown in the video?

Right now it seems as though the tide has finally turned in Dr. Atkins favor, probably for good, though the Wikipedia for “Atkins Diet” reads like the ghost of the Sugar Research Foundation® lurks over it to this very day.

Let’s think about cows.  Hmmm, first time I’ve ever written that sentence.

Prior to being turned into tasty steaks, cattle are taken to a feedlot, which is just that, a lot where they feed the cows.  A lot, as in mass quantities.  A cow will enter the feedlot weighing 700-800 pounds, and exit 400 pounds heavier in 4 months.  That math is easy – 100+ pounds a month (that’s like 6,000 kilograms an hour).  What do they feed the cows?  Lots of high energy grain, combined with a little bit of protein and a little bit of fat.  And they gain massive amounts of weight.

Had Harvard™ (a location where they seem to be confused) just checked the Hereford (a cattle breed) heifers (a specific cattle descriptor) then they would have known that it’s clear how to make someone gain weight, and it’s precisely the diet he suggested is better than Grandma’s steak and eggs.

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What cows might look like to a Chairman of Harvard®’s Public Health Nutrition Department.  At least they’re mammals?

Let’s talk about salt.  Here are two headlines about salt consumption health effects from August, 2017:

  • High Salt Diet Can Double Risk of Heart Failure
  • Pass the Salt: The Myth of the Low Salt Diet

There are Similar debates on statins (do they do anything but mess with your muscles OR are they a miracle?), B vitamins (generally good for you OR increase risk of cancer) and eggs.

Eggs used to be a miracle food.  Then, in the 1970’s?  Evil death in the full shell.  Now?  The kind of cholesterol in an egg isn’t the kind of cholesterol in your body.  Eggs are eggsactly what a body needs!  Today, anyway.

This has led me to two conclusions:

  • Journalists will write up anything for a Friday deadline if it gets them to Bennigan’s© faster so they can have a Bloomin’ Onion® and a scotch and soda before going to the fedora store. (I may have messed this metaphor up, but I’m working on a Friday deadline . . . .)  If they read the medical studies, most of them don’t remotely have sufficient background in biology or statistics to understand it, because the tough math tests at journalism school allow them to take their socks off so they can use their toes for counting.
  • Medical research is (shudder) even worse than journalism about medical research.

I’ll concentrate on the last point.

Doug Altman wrote an article for The BMJ.  What is The BMJ?  It used to be called the British Medical Journal, but the password got hacked and it was renamed by a group of 12 year old boys.

Back in 1994, Altman wrote an article for The BMJ called The Scandal of Poor Medical Research.  It’s behind a paywall, and I think it’s better if I just make up the content anyway.  Actually, Richard Smith gives a pretty good synopsis of the article in The BMJ Blog (LINK).  Much of the research was bad because “. . . of inappropriate designs, unrepresentative samples, small samples, incorrect methods of analysis, and faulty interpretation.”  And, presumably, he thought that medical research had an ugly, fat mother, too.  And that’s the positive news.

It gets worse.  Career interests (like our Harvard Sugar Daddy) influence research.  And, to quote an article in The Lancet, “85% of medical research dollars are wasted.”  Presumably that ($240 billion in 2010) would pay for a lot of pantyhose and elephant rides.  I think in layman’s terms that means the researchers either evil, stupid, or evil AND stupid.

And remember, medical research isn’t Scottish . . . it’s crap.

So, medical research is horribly broken.  What about medicine?

My general theory when it comes to doctors is to avoid them.  I got sick for the first time in about eight years last month.  Rather than go into a doctor (respiratory thing that was moving into my lungs) for a prescription, I was able to log onto a website and talk to a doctor.  My wait time as I was sitting in my basement in a fever-induced cold sweat?   Five minutes.  Visit duration?  Five minutes.  Cost?  $60.  The amoxicillin that cured me?  $20.  Genius.

What about hospitals?  Don’t go there – people die there!  And my theory is backed up by data.

What does the data say?

That some facets of medical science are getting to be amazing:

  • Trauma medicine, such as treating car accident victims, firearms victims, et cetera has saved tens of thousands of lives.
  • Medical imaging has allowed better diagnosis, and antibiotics have saved millions.
  • Bandaids® are much more colorful and have cartoon images on them.

However:

More people are killed by doctors than by guns.  Not on a rate basis, on an absolute basis.  It appears that the best estimate that the Internet has of those killed in the United States accidently by their doctors is somewhere between 250,000 and 400,000.  Every year.  Since only about 10,000 deaths a year from guns are not suicides, that means doctors kill 25 to 40 times more people than guns every year.

Wow.  And I thought that Clint Eastwood was tough.

Young Doctors in Love, yup, the urine sample scene.  Bonus?  Sean Young before the crazy hit her.

I know, these are accidents, the people were sick, and some of them might not have made it anyway.  Sure.  But for numbers this big to exist there really is a problem in the system.  And I’m pretty sure that all of the things we’ve done over the last twenty years have made it worse, not better, with a medical system that pits insurance against doctor against malpractice attorney in a constantly escalating struggle of money and power.

Is there another model?  Sure.  Canada, with rationed care?

Also, there are places like the Surgery Center of Oklahoma (LINK).  They don’t take insurance, but they have a fixed price list on the Internet.  Need a pacemaker?  $11,400. (Average cost after Medicare?  $20,000+.)  Knee replacement?  $15,499.  (Average cost after Medicare?  Hard to tell.  Probably $10,000 to $15,000.)

Downside?  You have to visit Oklahoma.

I know that our current system of insurance was driven by government wage and price controls during World War II – you couldn’t offer someone more money to come to work for you, but you could offer them insurance and pensions.  Note that these are precisely the systems that are exploding right now and distorting our economy to the point where they are consuming more resources in both the private sector and the public sector.

The Mrs.’ solution?  Outlaw insurance.

It sounds better and better every day.  Have a steak while you’re waiting.

Note That John Wilder is NOT a doctor so for heaven’s sake, DO NOT follow my advice without talking to your doctor.  Or Shaman.  Or whatever groovy stuff you do.  Also, I am long a company that makes Statins, but they’re not gonna be helped by this article.  I don’t plan on selling it anytime soon since the yield is pretty good (this is NOT investment advice, I’m just sayin’ and disclosin’).  I don’t plan on taking any positions in any company over the next four or five days, and haven’t recently.