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I love the domain.  I’ve had it for over a decade.  But I never post and I’m sure someone could use it more actively.

If you’re interested, please contact me at info@chasingeden.com.

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The Genius of “AND” goes like this:

“If there’s one lesson from our finding to keep in mind above all others, it is this: Clock build your company so that it preserves a passionately held core ideology and simultaneously stimulates progress in everything but that ideology. Preserve the core and stimulate progress.” ~Jim Collins (famous business writer)

The concept is simple:  Don’t choose “OR” when you can have “AND” (both).

I like the idea of “And” thinking; perhaps sometimes you can have both?  It can lead you to new thinking and solutions where you previously did not see options.

“The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.”
~F. Scott Fitzgerald

The Tyranny of “OR” goes like this:

“…the rational view that cannot easily accept paradox, that cannot live with two seemingly contradictory forces or ideas at the same time… [it] pushes people to believe things must be either A OR B, but not both.”  ~Jim Collins (famous business writer)

This concept is simple:  “Or” is overly restrictive.

However…I think there is also great power in “Or”; in fact, I wager “Or” can be more positive than “And”.  Here is why:

“Or” provides Focus. 

As a consultant, I can honestly say companies struggle with this.  When I see strategic plans, they are generally full of great stuff….too full.  They will spread the peanut butter thinly; they will accomplish a little bit of everything, but not too much of anything.  5 areas of focus is too many.  3 might be too many.  Could you get it down to 1 or 2 and stay that course for several years?  That is powerful.

“Or” acknowledges Time.

“And” can be tyrannical in its own way, as each extra item is something that must be tended to…all of which takes time.  “Or” requires making a stand and acknowledging the opportunity cost of time.

“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying no to 1,000 things.”

~Steve Jobs

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Footnote: I understand the Collins had a specific case of “And” in mind, and I have a specific case of “Or” in mind.  In short, the two concepts of “And” and “Or” aren’t mutually exclusive in every case.  However, I stand by the fact that the focus of “Or” is often more valuable than the diffusion of “And”.)

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Pope Francis is doing three things I’ve never seen in religion before (in my lifetime):   1) Being extremely relevant to our daily lives, 2) Potentially offending powerful people , and 3) Leading.  I’m going to focus on his comments on Capitalism because that is my area of interest.

1) Being extremely relevant to our daily lives..

The Pope isn’t just generally commenting on how “love of mammon” is bad.  He is getting specific…arguing against “trickle-down” economics as an “opinion, which has never been confirmed by the facts, and expresses a crude and naïve trust in the goodness of those wielding economic power.”  He has said, “We can no longer trust in the unseen forces and the invisible hand of the market.”  BOOM.

Also, note his reference to “confirmed by facts”.  This is also new for modern religion…the appeal to reason as opposed to faith.

In my life, religion/church is often a limited set of fairly sterile stories that you have to stretch to apply to day-to-day life.  Jesus may turn water into wine, but I don’t.  Judas may have been a betrayer; I am generally too boring to do anything like that.  I’m not saying there is no connection between Bible stories and our lives; I am saying though that you have to draw the connections.  They are not spelled out, and so are indirectly relevant most of the time.

The Pope is starting to spell some things out…lest the rich start to think Jesus would approve of their CDOs and bank bailouts.

2) Potentially offending powerful people..

The Church relies on powerful people to give it money.  The general messages of love, compassion, and morality are compatible with that.

But you start condemning the lifestyles of your patrons?  That is dicey game. No one likes to be reminded they are a hypocrite.

Also, one of our political parties is much more highly aligned with religion and usually favors the rich.  The rich don’t like to be told they are not completely awesome.

I think though the Bible is quite plain here: “And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.”  Matthew 19:24.

Uh…I don’t know how literal this is supposed to be or the definition of “rich” (since even the poor in the US are rich by global standards, and anyone reading this on the Internet would be rich by most any standards…that means me and you)….however, these are Jesus’s words…not some obscure verse from the Old Testament.

The treatment of the poor is very, very central to the Bible and Jesus’s teaching.  If the Pope starts calling out the rich, saying that their lifestyle is immoral, that it is sinful to make that much more than others, etc….that can change the world.

3) Leading..

Catholicism is huge; over a billion people align themselves with the Catholic Church.  The Pope is one of the single largest voices in the world.  When people say the U.S. President is the  most powerful man in the world, I have to agree in practice.  However, if the Pope chooses to lead, I would argue he has more influence.  The Pope usually isn’t considered in that light because the church rarely leads; it sticks to well worn, non-polemic topics.  Maybe we are seeing a change?

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A friend of mine, whose opinion I respect, commented on my last post about why I like pensions:

“I think your post opens you up to some pretty serious critique, though. I mean, essentially what you are saying is, “Why should I have to be responsible for my own future when someone else can be held responsible for me?” Who wouldn’t agree with that arrangement when given the option. What’s more, printing currency is an extremely dangerous way to meet the demands of retirees. The ensuing inflation complications punish everyone else. I think defined benefits are great if a company offers them as an incentive for working for their company rather than the other guy, but that’s about it. I think you also omit the key factor that a company may simply declare bankruptcy if the funds run dry. As an educator and one who pushes for equity in the system, I have to say that I can agree with your observation that most people aren’t equipped to handle risk and retirement planning as a rational choice because they are operating with imperfect information. To me the solution isn’t “Let’s recuse everyone from responsibility and put the burden on the market or the government.” Nor is it the hard-line conservative approach of, “My bootstraps worked just fine, so you’re just SOL.” Instead I say the real path of action lies in increasing educational quality for all. We’ve done so little still in closing the larger social gaps in our society. Now, is that completely realistic? Maybe not. But I think it’s a more positive approach than the other two.”

Here is my response:

“I think your post opens you up to some pretty serious critique, though. I mean, essentially what you are saying is, “Why should I have to be responsible for my own future when someone else can be held responsible for me?” Who wouldn’t agree with that arrangement when given the option.”

This dichotomy is setup far too often. The question is not “Government social services vs. our freedom” or “Government services vs personal responsibility”.  This is not a healthy way to look at social issues; there are no good answers when the issue is framed this way (which might be the whole aim of this framing).

How did any of us get fooled into thinking that it is better to have the freedom to die at home from lack of health care than it is to have the freedom to recover and continue to live a productive life?  Why is  the freedom for the elderly to die in the winter from lack of money to pay for heat more valued than the freedom to live out their years in relative peace?

As for personal responsibility, when we are young, we are cared for by others.  When we are old we are cared for by others.  When we are sick we are cared for by others.  No one accuses you of abdicating personal responsibility for your health to the doctor when you are ill.

Our entire lives are a web of responsibility; often with others depending on us, and often with us depending on others.

In short, a government pension has nothing to do with personal responsibility, and that’s why is important to have an savings plan and is when options like the Physical Gold & Silver IRA can be a good choice for this.

Failing to receive an adequate return on a 401k is not a celebration of personal responsibility.  It is an abdication of the responsibility we have to care for those who cared for us when they were able. Let me repeat:  Private retirement accounts that are at the whim of private financiers is a failure of our responsibility to ourselves.  The only winners in a such a scheme will be the financiers.

And to the point of “Who wouldn’t agree with that arrangement when given the option?” Indeed, who wouldn’t?  If that is the case, I am at a loss to understand why government social services, and government pensions, are such an issue.  Is this really controversial?

“What’s more, printing currency is an extremely dangerous way to meet the demands of retirees. The ensuing inflation complications punish everyone else.”

All money the government spends is printed money.  This is not an issue.

“I think defined benefits are great if a company offers them as an incentive for working for their company rather than the other guy, but that’s about it. I think you also omit the key factor that a company may simply declare bankruptcy if the funds run dry.”

A company going bankrupt is not an issue.  Pensions are federally guaranteed through the Pension Benefit Guaranty Corporation (PBGC), just like bank accounts are guaranteed through the FDIC.

It would be simpler though (instead of needing the PBGC)  if the government just issued the pension directly. Companies make products and services.  Why should Apple be great at making iPhones while at the same time being great at providing retirement or healthcare?  It is easy to see that isn’t and can’t be their core competence.

“To me the solution isn’t “Let’s recuse everyone from responsibility and put the burden on the market or the government.” Nor is it the hard-line conservative approach of, “My bootstraps worked just fine, so you’re just SOL.” Instead I say the real path of action lies in increasing educational quality for all. We’ve done so little still in closing the larger social gaps in our society.”

This is an interesting line of thought coming from someone that works in education (which is true of the writer of this quote).    Can you be educated at everything? Even if you are educated, does that mean you will make the right decision?

Can you be educated at everything?

Life is very complicated these days.  There  are so many things to learn that being an expert in everything is not realistic.  I am very good at HR consulting and helping with the people issues of large companies.  I have no illusions that I am also expert at a fixing a car, or operating on cats, or putting out fires, or making cell phones, or saving for retirement.   However, I am smart enough to know that I shouldn’t have to be.  That is a fundamental insight.  We are so interdependent it is silly to think we need to know everything.  We MUST depend on others.  The personal responsibility trope is a distraction.

Even if you are educated, does that mean you will make the right decision?

No amount of education will allow you to predict returns in the stock market (even average returns over extended time periods).  Education cannot be the answer.

So there we go…that is why I still think pensions are a good idea.

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I was reminded today that I have not posted in a year.  Hmm…it seems like my last post was only a few months ago.

I have had another kid in the intervening year, so that has kept me busy to be honest.  The newborn and 2 year old are too much fun, and so I haven’t spent much time writing at a computer (unless it was for work).

Other than things generally being awesome, time is my biggest challenge right now.   I don’t have enough time to meet all my obligations.

Children:  I want to spend time with them, so any free time (or even un-free time) I try to allocate to my kids.

Wife:  Luckily I can kill two birds with one stone here.  When I am with the kids, I am also with my wife.  Not a lot of date nights though.

Friends:  Tough to find time for this.  The only thing that makes me feel any better here is that they ALSO don’t have time.  It isn’t like they are all calling me and I’m having to make excuses why I can’t see them.  They are too busy to call/stop by as well.  It is a reciprocal “I’d love to see you but…”.

Housework:  Uh…we do the best we can.  My wife also works.

“Me” time:  I don’t really have this much anymore; however, I had a lifetime of it in my twenties and can honestly say I don’t like hanging out with myself that much, so I don’t miss it.

Work:   Arghh!!  I’m struggling here.  Unlike with friends, work doesn’t understand that I am busy.  I work in a billable hours industry, which rewards us for more….HOURS. Hours is something I don’t have.  I wonder if consulting (with the travel and long, irregular work hours) is an industry that is built for two income families?  I am unsure I can meet the expectations of the job.  I am unsure I can expect my wife to take care of two kids and work while I am away helping clients with problems that, while important in the context of work, are not nearly as important as my wife and children.  I’m struggling here.

Over the years I have heard many vacant cliches that aren’t all that helpful (e.g. live every day like it is your last, you only live once, speak your mind, follow your passion, etc.), but one that is extremely true and helpful is:  No one ever dies wishing they had spent a few more hours at the office.

Let’s see if I can update again before next year!

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A little high level data/history here, and then we’ll jump into Myths related to taxes for the rich.  I will provide a logical plausible mechanism for why low taxes for the rich do not stimulate the economy.

1.  The GDP growth rates during times of high marginal tax rates on the rich have historically been better than when they were low. Understand?  Growth is BETTER when tax rates are high on the rich.

2.  If tax cuts for the rich were stimulative, we’d be in boom times right now, but we are not.  The Bush tax cuts were largely tax cuts for the rich.  They did not stimulate the economy when enacted, and now the argument is that if they are taken away the economy would be even worse?  Not true.

3.  There was one other time in our nation’s history where taxes on the rich were this low:  right before the Great Depression.

The funner, better question is why?  Why are high taxes on the rich better for the economy?

Myths about taxes and the rich:

More money for the rich creates jobs.

Really? How? Businesses create jobs, not rich people (unless you count their housekeepers).  Giving more money to the rich simply makes them richer.  More money for the rich does not make their businesses richer either (the money leaves the company when they pay themselves).

Payouts to the rich actually make businesses poorer, since that money is not available to fund new projects.  Low capital gains taxes can also produce this effect.  High taxes for the rich are stimulative because it encourages companies not to pay out that money, which the businesses can then use internally to make investments.

But, still, the rich have money, which they then spend, which creates jobs, right? No.  I do agree that demand for additional goods/services creates jobs.  But rich people do not create as much demand as others.  A rich person saves a good percentage of their money, which is a drain on the economy (since that money is not spent to create demand for additional goods/services).

To reiterate:  Extra money for the rich stimulates the economy less than extra money for the middle class because they save a good portion of their money.

But the rich use that savings to invest their money which is good for the economy, right?

Wrong.

The word “invest” is used too loosely.  I wish there were another word.

In economics, Investment is good for the economy.  It is defined as business expense (minus SG&A) and purchase of capital goods.  Businesses generally make investments.  They include purchase of machinery, expansion into a new line of business, improvements on a facility, even education of the workforce.

In finance, Investment is when you buy something and hope to sell it for more later.  This is just speculation.  That is what the rich are doing.  This does not help the economy (unless you work in finance).  Purchasing stock, bonds, mutual funds, etc. IS NOT INVESTMENT.  The underlying companies DO NOT GET ANY OF THAT MONEY (only at the initial sale does the company get money.  The entire stock market is a second hand market.)  The vast majority of business initiatives are funded through excess profit, not equity (or debt).  Even when the rich do spend money on IPOs where companies get the money, this is not a significant source of funding for new business ventures.

In short, the “investment” that the rich make with their excess savings does not help the economy. It encourages speculation or, more to the point, it IS speculation….which is incidentally exactly where we are right now with the financial crisis:  too much speculation.

Putting more money in people’s pockets through tax cuts is a good way to stimulate the economy.

No.  In most cases, taxes are neutral for the overall economy.

As covered earlier, tax cuts for the rich do not stimulate because they save more of their money.  Let’s say the rich spend 80% (which becomes someone else’s income) and save 20% (which goes largely into bank accounts or speculation and is not stimulative).

As an aside here, you may say “Well, then the 20% the rich have in bank accounts is then lent to allow businesses to pursue new initiatives.  It IS still sound economic investment in the end.”

Nope.  Banks don’t need deposits to lend; that money is good for nothing until spent.  Banks can always get the money they need to lend (meet their reserve requirement) through borrowing from the Federal Reserve, which has to lend to them by law (and creates money out of thin air so there is no natural limit).  Lending is limited only by the number of credit worthy people/projects, not by deposits.

If the government taxed away the rich’s extra money, the government would spend 100% of it, not 80% of it (since the government never saves).  So….the government taxing away the rich’s money is actually stimulative.

What about the rest of us (the non-rich)?  We spend almost all of our money.  If the government taxes away our money, it is a wash at an aggregate level….either they spend 100% of it or we spend 100% of it.

So, tax cuts in general don’t stimulate the economy.  What taxes do is allow the government to pick winners/losers.  The government simply takes the money from us and puts it elsewhere.  Sometimes we agree with where they put it (highways, education, etc.); sometimes we disagree (wars, etc.).

To reiterate, tax cuts do not generally stimulate the economy.  They are a neutral.

Although a bit more controversial, there is some data/history and a plausible mechanism to make the case that high taxes for the rich encourage growth, not low taxes.  With high taxes for the rich, the businesses are encouraged to keep the money and make investments to fund new initiatives and the rich  save more of their money (which does not help the economy).  With high taxes on corporate profit, business is also encouraged to spend the money on improvements/investments (which would be pre-tax) instead of taking the money as profit (which is taxed).  Excess profit does not create jobs or stimulate growth.  Demand for goods and services in excess of what the company can provide with current resources creates jobs and stimulates the economy.

To conclude, I do not understand the tax cut for the rich argument.  Data and history do not back it up and there is no logical plausible mechanism for it.

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Zombies are really popular these days.  The story goes that some virus transmissible by the bite of an infected person could transform us into an ugly, bleeding, aggressive, cannibalistic, slow walking/limping, strong,  sleepless shell of a human who is somewhat resistant to gun shot wounds and generally hard to kill.

The background here is that I studied microbiology in college, and while I’m not a virologist, I do have some knowledge of the subject matter.

So let’s take the “symptoms” of zombification one at a time:

Ugly: Can a pathogen make you ugly?  Yes.  Leprosy, The Plague…any general Necrosis.  It is possible for a pathogen to transform appearance over time.  Even the flu makes us look rougher than usual.  I will draw a line though:  If you look as bad as zombies generally do on TV, you’re about dead and bedridden….not likely chasing people around trying to eat them.

Bleeding:  Yes.  Pathogens can leave us with open sores.  No objections here.  Though we will come back to this one…because bleeding along with some of the other symptoms are not likely to go together.

Aggressive:  Not likely, though possible.  When we get sick with a pathogen we are generally listless and tired, not aggressive.  If we are bleeding and parts of our body are dying, then we are not aggressive…we are bedridden.

Cannibalistic:  No.  I do not know of any infection that makes us want to eat other people.  Rabies (which is active on the brain/nervous system) is not transmitted person to person.  Also, rabies kills us.  It does not reanimate us into zombies.

Slow walking/limping:  Not likely.  Any pathogen that works on the nervous system, as the zombie pathogen would have to, could cause difficulty with motor skills.  Parkinson’s disease (though genetic and not caused by a pathogen) is an example.  However, I know of no pathogen that would cause a limp and then stop progressing without treatment.   The fake zombie pathogen would be smarter if it left motor skills fully intact; easier to hunt down people and eat them (like vampires).  Infections generally progress; if it progressed to a limp then presumably it would later progress to completely shutting down the nervous system.

Strong:  I think generally on TV zombies seem to possess some kind of extra strength, though I’m not sure.  If so, then this is not possible in real life.  Infections don’t make us stronger; they make us weaker.  Also, extra strength and a limp do not go together.  If our nervous system is impaired and we are generally bleeding…we are unlikely to have extra strength.  This one is simply not feasible.  Zombies, if they existed, would be weak as shit.

Sleepless:  Sure.  Pathogens cause sleeplessness.  Also, I’m not sure whether zombies sleep or not.  It is not clear from watching TV if they need sleep (or food).

Shell of a human:  Yes, sort of.  Alzheimer’s disease can basically erase a person, so this is possible…however, Alzheimer’s takes years, not minutes like the potential zombie pathogen.  Bear in mind Alzheimer’s patients are pretty weak as well, not bleeding, extra-strong cannibals as zombies are.

Somewhat resistant to gun shot wounds and generally hard to kill: Uh….no.  If we are sick we are not generally hard to kill.  The young and healthy are as close as we get to “generally hard to kill”.  The immunocompromised are not resistant to gun shot wounds.

Let me make a few other points:

Incubation period:  It seems the zombie pathogen comes on quick, which is possible.  However, the moment of transition is often shown as being within seconds.  The veins go blue; the eyes glass over…almost instantaneously.  That is not likely.

Undead:  This is flatly impossible.  I am assuming the zombie pathogen is infecting us while we are alive.  There is nothing that kills us and then brings us back from the dead.  That is not the way pathogens work.  If there were to be a zombie virus, it would have to work on us while alive.  Re-animation is not possible.

If there were a zombie virus, where would it come from? The aggression and super-human strength, which are not really attributes of pathogens, suggests if there were such a thing it would come from military research gone wrong, not nature.  (As an aside, some TV shows/movies have suggested the zombie virus comes from longevity research.  I don’t think so.  There is already a set of cells that are immortal: cancer cells.  I would think a runaway longevity virus would cause cancer, which would kill us, not turn us into zombies).

Are zombie’s biologically possible?  No.  The combination of symptoms is not possible.  The body is designed to work best when it is healthy; any deviation from that will make the body less effective.  It is the extra strength, ability to take bullets, aggression, tirelessness, etc. that I take issue with.  The zombie virus seems to me like it would simply kills us.  If you describe a bleeding, physically altered, limping shell of a human…I say that person is on their death bed.  They will not rise up and chase after us.

Food for thought folks!  Sleep safer knowing the zombies are not coming!

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As a consultant, I am a paid expert.

What does it take to be an expert?

A few things.  There is subject matter specific lingo/vocabulary that experts use; if you know the lingo you somewhat self-identify as an expert.  Experts are sometimes published.  Experts know frameworks and the history of their subject matter.  They are knowledgeable, and can demonstrate that knowledge to others.

How do you demonstrate knowledge?

You can answer questions about your subject…lots of them; pretty much any question a layman can think of.  You know of stats and research.   You can be helpful to people regarding your subject matter/industry.  You can talk about your subject in such detail that a layman could scarcely follow the conversation.  If you can talk about something in so much detail that others can’t understand you, people assume you know a lot.

One thing I have not mentioned: You don’t necessarily have to be right about your subject, just informed.

Most important questions in life do not have right answers, just trade offs.  Experts always provide their “expertise” from a certain point of view.  The assumptions that underlie their advice are not stated, and sometimes the experts themselves do not realize their underlying assumptions.

Experts are sure of themselves.  We believe people who are confident.

This is one of the main issues with experts:  As long as a certain person knows more about a topic than you do, they can sound like an expert….even if they know little or are completely wrong.

When I was a few months into learning Spanish, a new student was listening to my conversation with someone else, and said, “Wow, you are so fluent.  How long did that take you?”.  She didn’t realize my vocabulary was limited, my verbs were conjugated wrong, and the person I was talking to probably thought I sounded like a child….as long as my Spanish was better than hers, she identified it as correct.

It is like that with experts.  Only a real expert can identify another expert.  The rest of us will identify an expert as anyone who knows more than we do about a given subject.

A real expert is very unsure.  They know they are informed; however, the “right” answer is very elusive and they know it.

The only experts I hear that admit to this are academics, since their jobs are secure and they aren’t really leading people who need to believe in them. Anyone who is sure of their knowledge is either putting on a show for some other reason or they are foolish.

The issue is that very few people want to put forward an expert who is so unsure of their ability to give the right answer (after all, aren’t experts supposed to be right?)….so by definition we are advancing experts who are not expert.  They might be knowledgeable; however, they are misleading us as to the extent of their knowledge and how transferable  it is to other areas they might be opining on.

The deeper your knowledge in one specific area, the less breadth you generally have across areas…you’re a technician of a sort.  We want general experts we can ask questions that apply to real life, not someone lost in the minutiae of a single subject.

The worlds foremost expert on human cell membranes or mammal fat metabolism, cannot tell us why people are getting fat.  If they might opine on why people are getting fat (with some unuseful answer about too many calories) , I don’t think they would be able to answer what to do about it.

The fact is that we are unable to identify the right person to ask why we are getting fat…if there even is a person.

Why do we need experts?

The world is increasingly complex, and the store of human knowledge is increasing. It is hard to know everything, so we must increasing rely on others.  If we don’t believe anyone, then we are overly cynical and unlikely to help move anything forward (naysayers usually aren’t much help).

Additionally, I believe our concept of “right” has increased in specificity as science has advanced.  If someone 100 years ago were asked the “right” diet, I think they would answer something vague about enough to eat, or good balance of fruits/vegetables, etc.  With the concept of calories and FDA percentage of vitamins and minerals the “right” diet now might be some very specific combination of foods (calories, vitamins, minerals, fat, cholesterol, carb content etc.) designed to optimize total health (measured by homone levels or BMI or something).  In short, it is getting more difficult to find the “right” answer.

How do I identify experts?

The short answer is that to identify expertise you must have some yourself….or put faith in someone who selects expertise for you.

It isn’t a hard answer for me:  I attempt to educate myself (which is time consuming); or I ask someone I trust (friend of family member).

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The concept of 5 Whys is generally applied in process improvement to get to the root cause of a failure; though the practice of asking why is generally useful if you want to get to the root of an issue.

I saw in the news recently more talk of cold fusion, thorium reactors and other means of cheap, clean energy.  Cheap, clean energy would transform our world forever.

Before we take a look at what cheap energy would do, let’s think about what expensive energy does.  The most common example is an increase in the price of oil, which affects all energy prices (and all prices in general as energy is always an input).  The price (of oil) often goes up when supply (of oil) goes down; demand is pretty constant in the short term….then what happens?  We wait in line at the gas station, all prices go up, economic activity goes down (since more money is being spent on energy and less leftover for other items), and anxiety goes up.  We get a recession/depression.

So what about the opposite?  What if energy suddenly became very cheap, and to boot it was non-polluting? That would be great right?

Well, the economy would boom everywhere (except oil dependent nations).  We would usher in a new era of prosperity.  Everything would become cheaper to make.  Prospects for nearly everything would look great; capacity would expand, companies would hire and grow.  Negative energy shocks very predictably create recessions (economists can at least agree on that); the opposite would create a boom.

Is there a drawback?  Yes.  Even if the energy was non-polluting it would be bad for the environment.  Why?  People all over the world would suddenly be able to buy things they couldn’t before because all things would be more affordable as the price of the energy inputs used to make them decreased.  In the US, we already have most of the material goods we need, but for the majority of the planet an increase in buying power means they want STUFF.  They want a house; they want clothes; they want a TV, a car, etc.

All of these things require environmental resources to make.  If a billion people could suddenly buy TVs and cars; we’d need to the extract the raw materials to make that stuff.  What if it weren’t 1 billion; what if it were 2? 3 billion? How many TVs and cars could we make without running out of stuff?  Is there enough asphalt to make the roads for those cars to drive on?

I guess the question is:  What is the current bottleneck to making all that stuff?

Is the price of energy a bottleneck?  Is raw materials already a bottleneck? Are skilled people the bottleneck? Is land the bottleneck? Are capital goods (machinery) the bottleneck?  Finally is demand the bottleneck?

Let’s take them one by one:

Is the price of energy a bottleneck? I would say somewhat yes, since cheaper energy will surely cause more production.  Energy might be the primary bottleneck.  Put another way, price of inputs is one of the bottlenecks.

Is raw materials already a bottleneck? I would say no.  I have never heard of a company not making something because the raw materials aren’t there.  I’ve heard of the raw materials being too expensive (which cheaper energy would help), but I’ve never heard of them not existing.

Are skilled people the bottleneck? Perhaps this one has some merit.  If the world were filled with more productive individuals that had excellent skills in their area, production would become easier.  This is a tough one, since governments must be stable, infrastructure must exist, etc. for people to be able to use their skills.  That might be a bottleneck to more production.  This is an issue nations often deal with.  People don’t produce because the nation is corrupt, there is no infrastructure; it isn’t worth it to produce.

Is land the bottleneck? Not land period, but perhaps land rights, which is somewhat a question of stable governments and private property.  I do think this is a peripheral bottleneck, but not the main, systemic one as it is localized.

Are capital goods (machinery) the bottleneck? This is related to the infrastructure question.  I think in many countries this is an issue.  The capital goods don’t exist to facilitate production.  It is quite the loop huh?  Which comes first, the chicken or the egg? In general I would say no, this is not the bottleneck, since making more stuff would create the demand to make the capital goods.  Capital goods are an effect, not a cause.

Finally is demand the bottleneck? So this is an interesting question, one that economists grapple with: Would we produce more if more were demanded or are we at maximum capacity already? If we are at maximum capacity, what would increase capacity? If you think demand is the bottleneck what you must really be saying is that money is the bottleneck, since if you asked someone if they wanted a car, surely they would say yes (except perhaps if you lived in a desert)?  The theoretical demand is there; it just can’t be back up with buying power.

Scratch all that.  Here is what I think is the bottleneck:  Technology…more specifically ease of production.  Hear me out.

When we invented the printing press, we saw a boom in books, because they became easy to produce.  Anything that becomes easy to produce, becomes relatively cheap and widely available.  Cars are not widely available because they are hard to produce.  If cars were as easy to make as pencils, more people would have them.  Same with computers; if computers were super cheap and easy to make….we would all have them (even people in deserts).  If we could invent a 3D printing technology that could make anything for which a blueprint was available with a few raw materials…most things would get really cheap.

Anyone see an issue with this logic?

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Tahrir Square ended in revolution in Egypt.  “Occupy Wall Street” probably won’t.  Why not?

What is similar?

They are both demonstrations protesting general disaffection with the current state, with the economy, etc.

They are both using social media.

They are/were both disorganized somewhat at first, but growing in clarity and numbers.

In short, they are about the same things thematically; why did it end in revolution in Egypt, but not here?  What is different?

Numbers:

Tahrir started with about 50,000 people and ended with about 300,000.

“Occupy Wall Street” has about 5,000 now; 700 were arrested over the weekend.  The numbers are growing.

So…Tahrir had more people (especially when you consider Egypt’s population of 82M people). “Occupy Wall Street” would need about 1.1M people to converge on Manhattan to achieve similar numbers per capita.

Income inequality:

The US’s income inequality is actually worse than Egypt’s by a fair bit. We are near the Ivory Coast and Uganda.  Egypt is more in par with the U.K.

Unemployment:

Unemployment in the US is about 9%.

Unemployment in Egypt was about 20% at the time of the revolution, concentrated among the young and educated.

So…I don’t consider this a ton different.  Our unemployment numbers are usually understated, and this is relatively small difference, not an order of magnitude different.

Hmm….I don’t see the general conditions as all that different; certainly somewhat different, but not an order of magnitude different.

Let’s make a few hypothesis as to why so many people showed up at Tahrir square, and so few show up at “Occupy Wall Street”.

1) The US is geographically distributed.

Even if we would like to show up (and it is largely young unemployed males that do something like this); we are pretty far from NYC.  All of Egypt is just a train ride away.  Most people live just a few hours from Cairo.

2) In the US, we can get married, even if we are poor.

As long as people can have a family and put food on the table, they will let the rich play their games and the government do what they want.  The Middle East in general could take a lesson here.

Stable societies are ones where men and women can have families.  If you have polygamy, some men will get zero women.  If you have restrictive socializing between men and women, men feel like they can’t get women.  If you have dowries, some men can’t get women.

And if you have a bunch of unemployed men who can’t get any women, they have nothing to lose…and so are apt to fight for revolution….so they can have a family in peace.

3)  In the US, we can still mostly put food on the table.

Income inequality is worse in the US, so relatively we are worse off than Egypt.  However, in an absolute sense, the poor still have more money in the US.  In Egypt food inflation had made it so that some people couldn’t eat.  That is a recipe (no pun intended) for revolution.

4) In the US, we have a democracy?

I actually don’t think this makes a ton of difference; it is a perceptual difference perhaps and gives us an outlet to say “I’ll just vote someone else in next time instead of staging a revolution”; however, in the end it is not democracy that keeps us from revolting; it is the ability to live our lives in relative peace.  Democracy or not, if that condition isn’t met, the government is in trouble.

So, there you have it.

If you want to keep people from a revolution, follow this recipe:

Make sure there are not a bunch of single, unemployed men around who cannot afford food.

If boys have too much time on their hands, they usually chase women.  If they can’t chase women, they eat.  If you take both those options away, they get really mad.

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