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Archive for June, 2010

Free Market vs. Gov’t

I have liberal friends that choose government over free market whenever the choice comes up because they believe that free market only results in mega-corps that crush small business and people. They think that the only way for small businesses to exist is to have the government protect them from corporations. They believe that free choice results in lower wages and general usury by corporations of the populace. They bring up child workers of the 1900s and monopolies like the Rockefeller’s.

They are wrong.

To explain the differences, I’ll use a company that I helped the owners setup – From Another Planet.

They make clothing that is very stylish and very much on the cutting edge of fashion for their market segment. It is a very small company with just a handful of employees and most of their business is done over the internet since they can’t afford to have a retail center.

For a corporate example, I’ll use Volcom, which makes the same type of clothing for the same market, but is a massive corporation.

For a government example, I’ll use the Army.

For the two free market clothing makers – when a shift occurs in their market segment, which can happen at any time for many reasons, they MUST be able to adapt.

  • FAP deals in small inventories and they have a couple designers, so they can crank out a new design in a week and have the new product line available in just a couple weeks. Their largest concern is being able to market broadly enough, and assuming that works, meeting that demand (which is a problem every business dreams about).
  • Volcom must have a meeting about the possibility of a shift, then they have several designers create concepts that they then put through their QA and once they have a new design approved they begin production, which is comparatively fast; however, the whole process still takes months. Their strength is their massive marketing machine.
  • The Army has a contract that they made previously and they must allow it to expire or break it in order to even pursue a new design.  Unless the current design is so bad that it is causing an unacceptable number of soldiers to die, they will stay with the current design, despite market forces.

As you can see in this example – corporations are not very good at meeting new demand, but they’re better than government and the small business excels at it.

So why are corporations so prevalent?

Once FAP grows to a certain point, it will have more regulations heaped upon it, more costs stacked on it by the government, and at that point either will be unable or unwilling to grow further unless it takes on debt and more risk. If a company does not grow, then it dies. Therefore, it will have to borrow money to expand its operation to a size that can support the expenses imposed by the government. It will also have to begin an aggressive marketing campaign to push out competitors who will not be able to grow large or fast enough to support themselves. So, to summarize, companies either become large corporations or they die, because the government ensures that there is no middle ground.

Categories: Politics

A Real Immigration Reform Proposal

Before I can speak about this, I need to first define my perceptions of the issue. The essence of illegal immigration is that it is an element of a market. That market is cheap labor. The thing about a market is that so long as there are willing buyers and willing sellers, the market will exist. If the market is made illegal, then the market will move underground and become a black market, but it will still exist.

Ok, so illegal immigration exists. Let’s drop all “high-n-mighty” pretenses and talk about it from a business perspective.

What is good about illegal immigration?

  1. Cheap labor. This lowers production costs, increases profits and lowers the cost to the consumer – the legal US Resident.
  2. Helping poor people become less poor. The average worker in Mexico makes about $4.15 per hour (gross), only works 20 hours and pays taxes and bribes regularly. Assuming a deduction of 30%, that comes out to about $58 a week. If the same worker comes here illegally, he can expect about $3.25 an hour and at least 60 hours of work per week with no taxes or other deductions; thus, he instantly is making $195 a week – a 336% increase. Would you go pick melons 10hrs/day 6days/week for a 336% increase in your weekly wage? I would.
  3. Exposure and attainment to/of more and better goods that enrich their lives (i.e. a higher quality of life).

What is bad about illegal immigration:

  1. People who have no idea about our laws and customs are here that may break these laws and customs because they never had any sort of orientation.
  2. The immigrants are beholden to the black market crime lords (the black market version of CEO) that brought them here. Crime lords don’t fight fair, so the immigrant has little or no recourse against the crime lord and may be forced to be a mule for drugs, forced prostitution, or forced to do whatever other dirty work that the crime lord needs done.
  3. Since the illegal immigrant is already in a position that requires him/her to dodge the law, that narrows the possibilities for employment to only employers who don’t care about immigration status – which are few and often are involved in some way with crime.

The effectiveness of laws:

Laws are designed to intimidate. When they fail to intimidate they are used to punish. When the person committing the crime is willing to take the risk, then that means that there is a willing buyer and a willing seller and the market becomes black. Therefore, since this is exactly what the current situation is, we can positively say that the current laws are not effective to stopping illegal immigration. Furthermore, we have absolutely no evidence that would suggest that MORE laws would somehow change this.

My perception of the subject:

Right now in America the object of this discussion are the Mexicans, and indeed I have used them as the example in this post. Why not have them here in droves? What are people afraid of? I see the same arguments to not let them in that I read about in my history classes:

  1. “They’ll take all our jobs” FALSE. Jose Ramirez who only speaks Spanish, can barely read and write (again only in Spanish), and has maybe seen a computer once or twice in real life is NOT going to walk into corporate America, fire up a computer and start sending e-mails and making conference calls.
  2. “They’ll erase our American culture and we’ll just be another version of <insert country here>” FALSE. This is the EXACT SAME argument that was used to try to prevent the Germans, Dutch, Irish, Italians, Chinese, Vietnamese, Russians, Jews, and basically everyone other than the English, Spanish and French from immigrating here. All these other cultures came and became American – not the other way around.
  3. “They’re all criminals and if we let them in they’ll make every city a slum” FALSE. This is rank xenophobia. Right now many are criminals because that’s the only way they can get a job. The ones who go through the massive run-around to immigrate legally generally do not engage in illegal activities – they can do better by following the rules.

Now, I’m not advocating amnesty here – people who break the rules still need to pay the price for that – but I do feel very strongly about what is written on the Statue of Liberty:

Not like the brazen giant of Greek fame,
With conquering limbs astride from land to land;
Here at our sea-washed, sunset gates shall stand
A mighty woman with a torch, whose flame
Is the imprisoned lightning, and her name
Mother of Exiles. From her beacon-hand
Glows world-wide welcome; her mild eyes command
The air-bridged harbor that twin cities frame.
“Keep, ancient lands, your storied pomp!” cries she
With silent lips. “Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed to me,
I lift my lamp beside the golden door!”

We are the haven for these people. Us. We need to streamline the immigration process and make it MUCH cheaper; as well as reduce regulation on businesses for hiring, wages, and environmental concerns. Let the new workers decide where they are and are not willing to work at, and for what wage. If they are ok with making only $3.25 an hour, then let them make that, and let us consumers enjoy the savings. When a particular worker decides that he/she wants more money, then he/she can move on to another job that pays more. The most important thing is that the immigrants won’t have to consider a life of crime as an option to make a living.

The cost and time necessary waiting on various beaurocracies to review and approve paperwork MUST be less than the black market or else people will not consider legally immigrating. Whether we like it or not – a market exists and we can not extinguish it with laws. We must work within that market and make an outcome that we are happy with be the only logical choice for someone wanting to come to this country.

Categories: Arizona, Politics, The USA

Obama in the Oval Office

Lies, misdirections and most of all WHERE IS THE SOCIAL JUSTICE!?!!?

Here is a copy of his speech. I have decrypted what he is saying and translated where I could. It was really hard to get all the way through this.

0:20 – *LIE* He said he’d bring them home. But he hasn’t.  This is a good start!

0:28 – Battle! The Brittish Oil is coming!

1:08 – Government will fix it.

1:14 – Steven Chu – the Washington Post says: He sought and won the top job at Lawrence Berkeley National Laboratory in 2004, leaving the Stanford University faculty to focus on energy issues. Chu was in London last night and unavailable for comment, but the physicist has been, in the words of his Web site, on a “mission” to make the Lawrence Berkeley National Laboratory “the world leader in alternative and renewable energy research, particularly the development of carbon-neutral sources of energy.”
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/10/AR2008121003681.html

1:28 – BP is going to fix it. *Flip*

1:45 – They say they can stop the leak completely and Obama is going with that!Let’s all celebrate the word “SHOULD”!

2:10 – “make no mistake”: this was Bush’s second favorite propaganda phrase after “stay the course”. Funny that Obama feels comfortable using it.

2:20 – We may not be doing anything about the spill, but we are charging BP.

2:27 – Notice the word “people”. This is a hint for what’s coming!

2:35 – Government is going to fix it. *flop*

3:18 – 17,000 national guard members, yet he can only spare 1200 for the border.

3:25 – they’re ready? If they’re ready why are they not doing it? What’s the hold-up?

3:40 – the governers have been begging for them but they’ve been denied because of bureaucratic nonsense.

3:50 – *LIE* burning and skimming are two methods his administration forbade until VERY recently. Why’d they wait?

4:10 – We have people working on thinking up a solution.

4:20 – we know we will fail, so we want to give ourselves an escape hatch.

4:45 – here it comes!

4:55 – we may not know how to stop the leak, but we can make promises about cleanup.

5:04 – they CAN’T work now. (get ready for who is going to fix this!)

5:26 – where’s the social justice!?

5:37 – Obama will do a magic trick to undo what he said was just done.

5:45 – Government will make BP fix it *flip*

6:03 – A mystery group will oversee it!

6:16 – The setup from 4:45 is coming to fruition

6:25 – where’s the environmental justice!?

6:42 – Government will fix it. *flop*

6:50 – We’ll waste money on something unrelated to addressing the oil spill problem.

7:07 – behold the beauty of our witch hunt! BP will PAY!

7:20 – we don’t have enough rules. More rules prevents negligence.

7:25 – I was almost forced into making our energy cheaper, so I am relieved this happened.

7:45 – why did an accident happen? WHERE IS THE SOCIAL JUSTICE!!!?

7:58 – Goverment will investigate it so that we can come up with some more rules, but we need more government.

8:10 – Finally, I have an excuse to stop domestic oil production. I’m putting these people out of business for their own good.

8:25 – Nobody has any clue how to drill in the deep ocean. It’s a mystery.

8:28 – Get the investigation done quickly, but not too quickly. Go about Post Office fast.

8:50 – This agency doesn’t like regulation. It’s their fault… WHERE’S THE SOCIAL JUSTICE!?!?!

9:03 – Regulators got gifts, like when I offered jobs to people I didn’t want running against the incumbant, but since they are private industry it’s WRONG to do.

9:06 – The only people that can write their own regulations are me and Pelosi. These corps actually thought THEY could do that!

9:19 – The corruption was cleared up BEFORE the accident.

9:24 – No wait, the corruption was not cleared up. *flip-flop*

9:27 – the pace of reform was too Post Office fast.

9:32 – clearly, the answer is more government.

9:49 – To recap: more rules, more enforcement… you know, it isn’t even worth drilling for oil, so let’s stop it.

10:08 – here’s an urban myth you’ve been force fed in school. [we can’t actually make oil in a lab from plant/animal material, therefore it is unknown if it is really a product of “fossils”.]

10:12 – *LIE* [We have much more, but current environmental regulations do not allow it to be tapped]

10:18 – *LIE* [They are drilling there because it’s legal and they aren’t allowed to drill in safer areas]

10:23 – *LIE* [Again, only because of environmental regulations]

10:29 – another urban myth you’ve been force fed at school.

10:36 – *Truth* He finally said something true!

10:42 – *LIE* there is no indication that the “challenge” is urgent. Unless, if by “challenge” Obama means shutting down the US economy.

10:52 – prepare to blame Bush!

11:02 – *MISDIRECTION* China is investing in them because people want them and China has much more lax environmental laws and no unions so they are a logical choice as a manufacturing center.

11:09 – Here is the starting line for how much we pay other countries for their oil [this will now go up because of 8:10]

11:17 – where is the social JUSTICE!!! THINK OF THE CHILDREN!!!

11:30 – let me introduce my clean energy agenda NOW!

11:38 – the magical innovation! Workers of the world UNITE!

11:55 – let me tell you about my governmental subsidies.

12:05 – people are doing stuff they were doing back in the bush era, but I’d like to take credit for this one.

12:20 – *LIE* If this were true it would be front page news. So far we have only seen the same 40 year old solar and wind.

12:26 – you need to make sacrifices for the benefit of the collective.

12:33 – *LIE* Spain tried this and it destroyed them. Each green job cost 2.5 regular jobs.

12:42 – don’t think about it. ACT NOW!

12:52 – workers of the world UNITE!

13:00 – I’ll drop another hint: energy indipendance = no economy.

13:12 – *LIE* It is only profitable if subsidies are given out. These subsidies lower GDP and actually hurt our economy – not help it.

13:18 – it’s going to cost you your way of life.

13:27 – *MISDIRECTION* cap and trade hurts all of these things too, but most especially the economy.

13:40 – I’ll listen to any idea that is mine.

13:50 – “some” have suggested more rules.

13:58 – *MISDIRECTION* The two industries have nothing in common other than high tech requires a lot of energy, so why would we expect them to have comparable R&D costs?

14:08 – I am only interested in energy sources that have had billions of dollars poured into them over the past 40 years and have gone nowhere.

14:18 – you must act now! don’t think about it!

14:26 – *MISDIRECTION* WWII has absolutely nothing in common with a “green” economy other than the White House has friends that are communists.

14:32 – *MISDIRECTION* Landing a man on the moon is not in any way similar to changing the way of life of each person living in the US.

14:48 – I understand the reasons people want freedom, but we’re not there yet. By that, I mean we are not a socialist state yet. On the way, yes. But not there yet.

15:07 – Hard times are coming, so start looking into religion. It’s the only thing you’ll be able to afford if I get what I want.

15:18 – I’m done now, so I’m going to waste your time with a pointless story for a bit.

16:28 – What is going to get us through this is faith.

Categories: Obama

Possible Solution to the energy debacle?

I’ve been watching this company for a couple years now, and I’m still not convinced if what they say they can do is real or not, but Italy is going to give it a shot. If this really works as advertised, then this is the way of the future.

Black Light Power Inc

If anyone knows anything about this – particularly as to if it is a hoax or not, I’d love to hear about it! Put something in the comments.

Categories: Climate Change

BP: Shifting Gears?

Greenpeace gave BP the Emerald Paintbrush in recognition of their greenwash campaign. However, one thing that is interesting is that BP invested $1.5 Billion last year in “green” technologies. They also have adopted a logo that is very similar to the Green Party of Canada. They also spent $16 Million to lobby congress in 2009. They are mentioned right along with GE whenever “Green Investing” and “Green Initiatives” are involved.

So what?

Well, here’s what I think: they will drag out the leaking oil as long as they can to make things look as bad as possible in the hopes that the USA will not produce any oil of its own – thus relying more heavily on OPEC for oil, which would better create the environment of a monopoly. By doing this, the price can be artificially raised; thus, BP can make more money while producing less oil.

In the meantime, BP will come out with a mea culpa once they’ve leaked enough oil to completely ruin all domestic production of oil in the USA. They will announce more “Green” initiatives and push for EPA cap and trade. They will be doing this to “repent” for their crimes. Meanwhile, they’ll quietly start gouging us on the oil we import.

Too conspiracy theorist? Well, the groundwork is there.

Categories: Climate Change, Politics

A story in memory of Milton Friedman

This man loved his laissez faire, so here’s a story that I hope he would approve of.

With a totally open market like laissez faire, money is being moved around in incredibly chaotic ways and quantities like minnows zipping around a dock. If you compare a worker to a fisherman with a little dip net, then that fisherman could dip his net virtually anywhere and catch a few minnows. He probably wouldn’t catch a whole lot, but it wouldn’t matter where he dips that net. When the elected overseer of the dock – government – comes along and sees all these fishermen on the dock dipping their nets, he might occasionally see some fishermen argue over a spot on the dock, or maybe one fisherman has a bigger net than others, and this causes disagreement; however, the disagreements remain civil because they know government is watching and will send them to jail if they get too rowdy.

Government, out of a misplaced feeling of wanting each fisherman to have an equal chance and being too myopic to see that each fisherman already has an equal chance, then forces rules on the fishermen about how much dockspace each can have and the size of the net. This causes the minnows to congregate where the fishermen can’t get to, which in turn prompts the fishermen to form corporations so they can pool their space and resources. These corporations start hauling in far more minnows than they need and in this way they destroy the market for the single fisherman who still can’t get anywhere near  as many minnows and now is going hungry. Government sees this and begins forcing these corporations to hand over some of their minnows to the single fishermen.

Corporations don’t want to do this, so they begin bribing government to look the other way and they look for new ways to get out of giving the small fishermen free fish rather than concentrate on catching minnows. Government sees this and wrests all the nets from all the fishermen and now there is only one fisherman – government – trying to catch enough fish for everybody; except government isn’t very skilled at it and doesn’t have enough nets. Government then hires all the fishermen to catch minnows – so now government is paying fish out to fishermen to do what they would do anyways if government would just leave them alone.

The fishermen still fight over space and nets, but now government can’t see it because government is too busy trying to catch minnows. This causes unrest because the fishermen have grown to expect government to fix everything like an omnipotent parent and the fishermen all blame their boss – government – for not “fixing” the “problem” that prompted government to take over the fishing business in the first place; and the fishermen are all hungry now too. In their rage, they tie weights to government’s ankles and toss him off the dock. Now nobody is watching anybody to make sure that the arguments don’t escalate and madness ensues, which of course is the next step now that the fishermen are accountable to nobody but themselves.

Violence breaks out amongst the fishermen and one charismatic, strong and skilled fighter (or fighters) rises to power as a dictator(s). Now, only one person (or group) has any say in how the dock is used, for if the fishermen argue the fighter(s) will strike them down. Since they are stuck with this situation – the fishermen are stuck with two choices: suffer under the despotic regime or immigrate to a different dock.

Despite the seeming chaos at the beginning – the system was ordered in the way that a herd of cattle or a flock of birds are ordered and this system produced the maximum number of minnows per capita. We, as fishermen, need to have the courage to tell government to stay on the shore and not get involved with our business.

People like Pelosi, Obama, Boxer and Kerry (all of whom represent government, obviously) want to come onto the dock and do all the fishing for us. It isn’t going to work – we know best how to do this; not them. Keep them on the shore with the rest of government. If they refuse – fire them and then find new people that will stay on the shore to replace them. After all, we aren’t desperate, starving and mad just yet.

Categories: Obama, Politics, The USA

CHANGE: Obama just found his!

Enjoy!

Categories: Obama, Politics