Morning Ed: Money {2017.12.18.M}

[$1] Larry Kummer explains why the 1% wins.

[$2] I never thought about it, but in the same sense that UHauls to Detroit from Austin are a fraction of the price of the reverse trip, this makes sense.

[$3] Adventures in regulatory capture.

[$4] Scott Shackleford writes about the cousin of the Jones Act, which may be preventing cruises on the Mississippi. I took a Mississippi cruise once. It was unusual for a cruise in that the servers were all American, which meant that not only were paid 30x what you get on Carnival et al but they weren’t actually as good at or interested in their jobs.

[$5] Wired is mad at the techbros.

[$6] Amazon is apparently pushing its drivers hard.

[$7] If you email while you’re on vacation, you’re ruining everything for everybody.

[$8] David McWilliams argues that even as people have become more productive, wages keep being low due to global competition.

[$9] Ready, AIM Fired. Towards the end, they were serving our troops. It’s interesting to consider how close AOL and Yahoo both were to being a Facebook-like social network, if only they’d had the vision.


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Will Truman is a former professional gearhead who is presently a stay-at-home father in the Mountain East. He has moved around frequently, having lived in six places since 2003, ranging from rural outposts to major metropolitan areas. He also writes fiction, when he finds the time. ...more →

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171 thoughts on “Morning Ed: Money {2017.12.18.M}

  1. S4: OTOH, where would people on the Mississippi stop and what would they see? Viking River Cruises work on the Rhine and in the Danube because there are all sorts of interesting places to stop and see. Many of the historic cities along the Mississippi River have been hit hard by deindustrialization and urban renewal/suburban sprawl.

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    • The MS river cruises are usually on 19th century style paddleboats, a few are steam, and stop at large cities and history related towns like Hannibal, Galena, Nauvoo, St. Genevieve, Vicksburg, Natchz, and St. Francesville. American Cruise lines seems to be expanding, so I wonder about the regulatory issues.

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  2. S1, S6, and S8 are related. If your an orthodox Marxist you might even make an argument about the Iron Law of Wages and how cpitalists will always try to keep wages down so they can have more money for themselves. Credit exists so people can still buy goods while not having the money to do so.

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    • There is a certain kind of person who is attracted to knee-jerk contrarianism for the sake of knee-jerk contrarianism. If a knee-jerk contrarian ends up being financially successful, they always attribute it to their knee-jerk contrarianism (“I’m a free-thinker baby. Not just a sheeple”). This seems to be a form of either hubris or cognitive dissonance.

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  3. I see what you did there but I will not do so:

    S1: This seems a little too pat and I am no fan of the income inequality but yes, money and power go together equally. One thing that makes left-organizing hard is that we are inherently anti-hierarchy and tend to bristle at executive decision making. There are non-profits and co-op businesses built along the consensus model. They take a long time to act because consensus must be made. If you have a more top-down organization, decision making is easier.

    S5: I would posit this. There is an industry/economic sector in every generation that controls an inordinate amount of the overall economy and one where people live off the hog even if they are not really that profitable (or their profits are based largely on short-term thinking and/or lies). In the 1980s, this was Wall Street/Bonds/Finance. Now it is tech. As a non-tech resident of San Francisco, it seems like there are lots of people living off the hog of venture capital and private equity. True tech innovation is hard, long, and very capital intensive (think driverless cars). There are lots of “tech” companies which seem more about solving the social problems of lazy but affluent enough people. “Are you too lazy to walk for one minute and get booze? We will deliver it to you!!!” kind of stuff. I would also posit that there is always an industry that ends up developing a “We are the Masters of the Universe” kind of attitude because of the free-flowing money. Again, this is currently tech.

    So you have a lot of young people who are making money that many professionals won’t see until decades of working. If even then. Plus tech companies still feel the need to offer all sorts of perks that normal companies don’t offer. You don’t even need to be profitable for years on end if your hype is good enough. If I were to start a law firm, I would need to live frugally until I made profit. Tech heads can make themselves rich off others.

    The part always ends but until then, the bubble lives on. It is only ruination that produces contemplation.

    S7: I admit I’ve done this but I am in charge of California litigation and need to keep an eye on things from time to time. But I do think that there is something related to S1 here. There have always been debates about whether we should work to live or live to work. I am largely in the work to live camp but there just some people who seem naturally destined to live to work. The later group is the one the goes up the chain because they believe in work and nothing but it seemingly at times. I don’t know how to stop it.

    S8: Yep and this is a bit of an inconvenient truth for the left possibly.

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    • There are lots of “tech” companies which seem more about solving the social problems of lazy but affluent enough people. “Are you too lazy to walk for one minute and get booze? We will deliver it to you!!!” kind of stuff.

      I’m still trying to figure out why stuff like this enrages people so much. It reads to me like, “Some rich assholes are so lazy that they don’t even want to *turn a crank* to roll down the windows in their fancy automobiles!” OK. So some businesses aren’t curing cancer. I’m just not seeing how this amounts to a tragedy.

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      • My reading of Saul’s comment hinges on the quotes around tech. Making a website with an SQL database backend for facilitating booze delivery hardly qualifies as technical innovation, and the rest of the process, i.e., getting the merchandise delivered, is a problem as old as commerce.

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        • Sure, it’s not going to revolutionize the world, but most businesses don’t. And most aren’t trying. They’re just trying to solve a niche problem that makes something incrementally better for some cutstomers. I’m struggling to see why tech is uniquely bad for that.

          I’ve spent about half of my career working on seriously innovative new technologies and about half in the “making old stuff better” business, and during that time I’ve learned that a lot of what we need is just making old stuff better. Literally slapping a database and simple web app on a lot of things is a major improvement over what was happening before. The world is full of low-hanging fruit and a lot of people seem to be annoyed that tech companies are picking it. In reality, much of our economic growth is just the mundane picking of low-hanging fruit using whatever tools happen to be available.

          To take the booze delivery example, there was a reason booze delivery didn’t exist before. Maybe it’s because it’s not doable. But maybe it’s because trucks and drivers are as efficient as they’re going to get and that’s still not efficient enough for home booze delivery to be economical absent some improvement in resource allocation that simple tech might provide. Yes, making that improvement and enabling home booze delivery is a minor thing, and yes, it benefits mostly rich people (Boo, rich people!), but it doesn’t seem uniquely bad.

          What’s particularly interesting is hearing these complaints from journalists who are presumably saving the world by breaking open scandals and shining a light in the dark but are instead spending column inches telling us that PagersForCats.com isn’t going to end poverty or cure heart disease. It’s almost as though an industry can have a variety of players who solve problems at various scales for various constituencies, and most of those players do fairly mundane things most of the time.

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          • My argument is more there’s a segment of people that believe since some tech nerds can figure out how to more efficiently deliver booze to millennials in a few hipster cities, we should turn the government over to them, lock and key.

            See the worship online for Elon Musk, the various ways cities have been debasing themselves for an Amazon HQ, etc.

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            • There is a difference between “We will employ a modest number of people earning some extra bucks delivering booze part-time at roughly minimum wage, and no infrastructure” and Musk’s “We will build a 2-million square foot factory employing several thousand people, and have $800M in pre-orders” or Amazon’s 8-million square feet of office space and 50,000 full-time jobs at $75K+.

              Vaguely related to the Amazon thing, I was out running errands on the south side of the Denver metro area the other day and drove past a site covered with earth-moving gear with a large sign announcing pre-leasing for the first phase of a new 1.8-million square foot set of office towers. About a half-million square feet currently under construction a few miles east of there on C-470. And on the order of a million square feet being built downtown. Damn. There’s a lot of money being spent.

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            • This seems to be the same fractal wrongness that gives us beliefs like, “Trump is a great business man, so he’ll be able to run the government like a business and everything will be great!”

              Some of it might be that people don’t understand what “tech” or “business” really are. They’re just mystical wizardry that make people rich.

              It doesn’t work if Steph Curry says he should be POTUS because he’s good at shooting thee pointers. We’ve seen him do that TV, so we know what that’s about and we get why it doesn’t apply to running the country. Most people don’t know enough about leveraged buyouts or network programming to come to the same realization about “tech” and “business.”

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          • I think some of the anger at tech wealth is that it seems so disconnected to perceivable work and effort, to where it seems like an arbitrary lottery.

            Like the song “Money For Nothing” people who actually labor all day see people who write a few lines of code or a catchy jingle be rewarded with incredible amounts of wealth, and we are right back in the Garden of Eden, where one sacrifice is given favor by God, and the other rejected.

            Except the wealth isn’t gifted by God. The insane wealth accumulated by tech lords is a conscious choice made by our intellectual property laws, things that could be changed by the stroke of a pen.

            It more resembles how, by a whim of the King, an individual could be gifted with a grant of land, or monopoly on exports of wine or something.

            Why do the Jobs heirs have a government protected monopoly on the name “Apple Iphone” and its supporting lines of code, when we could just as easily put all of that into the public domain?

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            • Why do the Jobs heirs have a government protected monopoly on the name “Apple Iphone” and its supporting lines of code, when we could just as easily put all of that into the public domain?

              You know why, and it has little to do with the power of Job’s heirs, and a lot to do with incentives to create and innovate.

              That said, IP law really needs an overhaul. It is far too heavily weighted in favor of IP owners.

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            • If the fundamental complaint goes back the labor theory of value being untrue, I can see how that riles people up, but I’m not seeing how that’s a real problem with the tech industry. I mean, if we could summarize these editorials as, “Waaah, the labor theory of value isn’t true!” what are we to do to make the writer happy and, presumably, make the world a better place?

              As for people having a problem with intellectual property, I can also see why that bothers people. But again, I don’t really see where the problem is other than that people don’t understand why intellectual property is something we allow to exist and it makes them mad.

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              • what are we to do to make the writer happy and, presumably, make the world a better place?

                Glad you asked!
                The Left would like to have property claims more equitably distributed among the people.

                That is, a more optimum balance between the utilitarian incentive to the creators of new work, and the consumers of it.

                Things like limiting the time period for IP, especially in digital media; Uber for example, has long ago reaped the spectacular benefits of the ride hailing software; time for it to be in the public domain for all to use;

                The creative forces behind “Baby It’s Cold Outside” are long dead, yet the song is still owned by private entity; There is no public benefit to this is there?

                The National Institute of Health funds risky research into pharmaceuticals, yet the final ownership of the resulting invention is given to private interests.

                Mostly there is needed a paradigm shift in how we as a society think about wealth claims.
                We need to better grasp that the existing structure of claims is a collective agreement, rather than a naturally occurring artifact beyond challenge.

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                • You won’t get much argument from me about needing to readjust our IP time horizons (seems like it’s a pretty simple case of adjusting so we maximize total consumption of IP over time), but that seems like a relatively small fraction of whatever the problem is that gets these editorialists so mad.

                  I mean, realistically, tech IP usually becomes worthless long before even the first set of patents expire. The complaint here should be pointed toward Disney and its peers, and I don’t hear a lot from these folks about how the entertainment industry is garbage and everybody should hate them. There’s something very specific to tech that makes their wealth particularly evil to this particular class of complainant.

                  Other people ride the “entertainers are too rich” hobby horse, which indicates to me that different people probably just get ticked off at seeing people earn money for “the wrong” type of thing where “wrong” is defined by their personal prejudices.

                  I can only guess that the same people don’t pour scorn on Taylor Swift or LeBron James for their “easy” money because they’re special and the tech people who make “too much” money for “too little” work aren’t special. They’re average dorks like everybody else, so what makes them worthy of a few tens of thousands a year more per year in material comfort?

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                  • I mean, realistically, tech IP usually becomes worthless long before even the first set of patents expire.

                    Probably would be good to clarify here. Most software IP, so long as algorithms are exempted, becomes worthless before the patent expires. Exempting all algorithms has always been problematic — a person who spends ten years developing a fast DCT algorithm gets no IP rights but someone who designs a hardware circuit implementing the algorithm does?

                    As a fencer, maraging steel is important to me. (It’s also damned important to people who build a variety of military hardware.) Should a person who develops an alloy and a heat-treating methodology — clearly tech patents — that yields maraging steel get protection for the same time as someone in software? More? Less?

                    It’s not the “usually” cases that are the problem.

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                    • It should be noted that business models are not patentable thus Uber has Lyft with a very similar business model, nothing other than inertia prevents the black car companies from buying/building a hailing app and competing also, (after all for a number of years you have been able to reserve a ride to the airport or other site using the voice based phone system, as well as to hail cabs. Uber et all just provides a tracking system that tells you when the car will arrive.

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                    • Most software IP, so long as algorithms are exempted, becomes worthless before the patent expires.

                      I do not understand this sentence. What sort of patentable software is there besides algorithms?

                      Actually, what sort of software is there at all besides algorithms? I seriously have no idea what you are talking about.

                      And also that sentence is completely wrong, unless that ‘so long as algorithms are exempted’ exemption is supposed to cover all software patents. There are all sorts of expired computer patents that are fundamental to things we do all the time on computer.

                      There are expired patents literally being used to display things on this very website. Here is a random one I have selected:
                      https://www.google.com/patents/US5860073

                      And before anyone goes ‘Wait, MS, had a patent on CSS? How come I never heard about it?’, MS freely licensed it. But the point is CSS is still pretty damn relevant.

                      Note I could do the same thing with HTML or XML, or windowing systems, or GIFs, or pointing at things on the screen, or databases, or MP3, or memory management, or all sorts of things that computers do. The idea that we’re no longer using things described in software patents by the time they expire is absurd…in fact, the exact opposite is often true, and things something don’t even take off until after the patent expires!

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                      • Perhaps we’re using the words differently. Let me give an example from my own tech career.

                        A patent was issued in my name for a test box. The “invention” was the realization that a bunch of software running on commodity PC hardware could be a box useful for a variety of testing of internet-based services. The patent application made no claims for new algorithms — no new sorting, no new compression, no new queueing theory. Could have been done in a custom IC or three, but the preferred implementation of the invention was software.

                        The useful lifetime of the device was about six years. After that point, transmission rates had gotten so fast and routers so big that doing the same sort of testing required custom hardware. (Microsoft paid to have such custom hardware developed for their own use and filed their own patent application; that app referenced my patent, and pointed out what I’d said about the preferred implementation; their patent on a hardware implementation of the concept was granted.) Oh, there were special cases where my software was useful for longer — I heard from a former colleague about such a case a couple months ago — but it was no longer useful for the general case.

                        My experience with software patents suggests that my case is typical: the pace of tech leaves the software behind well before the patents expire.

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                        • The useful lifetime of the device was about six years. After that point, transmission rates had gotten so fast and routers so big that doing the same sort of testing required custom hardware. (Microsoft paid to have such custom hardware developed for their own use and filed their own patent application; that app referenced my patent, and pointed out what I’d said about the preferred implementation; their patent on a hardware implementation of the concept was granted.) Oh, there were special cases where my software was useful for longer — I heard from a former colleague about such a case a couple months ago — but it was no longer useful for the general case.

                          …you do realize that if MS referenced your patent in their application, it was likely because they thought that implementing their patent required using your patented method? Patents are required to reference previous patents they build upon.

                          I.e., that story probably proves the opposite of what you think.

                          (I say probably because it is also possible to reference patents in new patents to explain why the patent is not implementing the previous patent’s method. ‘This previous patent did it this way, we’re doing it this other way.’ But that does not sound like what you described.)

                          My experience with software patents suggests that my case is typical: the pace of tech leaves the software behind well before the patents expire.

                          I don’t understand why you’re talking about leaving ‘the software’ behind. Of course the original lines of code are not useful before the patent expires….almost no piece of code out there in production use is 17 years old, barring certain legacy systems.

                          So yes, if by ‘Most software IP, so long as algorithms are exempted, becomes worthless before the patent expires.’, you actually meant ‘Original lines of code that implement a patent usually becomes worthless before the patent expires.’, well, that is a mostly true statement, if rather hard to get to from your actual statement.

                          But the entire point of patents is that they do not protect specific lines of code (That is what copyright is for.), but a specific method of doing thing.

                          That means later implementations of that method are just as covered by the patent as the original ones. It doesn’t matter if the code is entirely rewritten, or reimplemented via a clean room, or just reinvented completely independently!

                          That’s how patents work. Anything that implements that method is covered by the original patents…although sometimes new patents can be added on top of the original if the new implementation adds some things or does things slightly differently…as MS did to your patent.

                          So if that’s the claim you are trying to make, that a specific piece of computer code rarely last 17 years….well, yes, but I don’t know why you think that’s important.

                          EDIT: Heh, patent expiration is actually now 20 years from application, not 17 years from approval, but whatever. Rewrite my 17 with 20 in your head.

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                          • I say probably because it is also possible to reference patents in new patents to explain why the patent is not implementing the previous patent’s method. ‘This previous patent did it this way, we’re doing it this other way.’ But that does not sound like what you described.

                            My bad, that’s exactly what they were doing. I should have been able to say it better, since I’ve written exactly that sort of letter — that old patent doesn’t cover the claims made in this new patent — to the Patent Office.

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            • Why do the Jobs heirs have a government protected monopoly on the name “Apple Iphone” and its supporting lines of code, when we could just as easily put all of that into the public domain?

              Does the Jobs estate own those rights, or does the Apple Corporation?

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          • Yes, making that improvement and enabling home booze delivery is a minor thing, and yes, it benefits mostly rich people (Boo, rich people!), but it doesn’t seem uniquely bad.

            That’s my, and, I think, Saul’s, point. It’s not bad, it’s just NOT tech. I’m going to guess that a somewhat reasonably adept PHP writer could come up with such a site in a few hours. All that’s been done is enabling a business owner to create a new kind of storefront, and contract out the delivery service to a bunch of 1099 delivery people.

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      • Also, and not to be “that person,” but some of those “make things easier” technologies are GREAT for people with various disabilities. I have a friend who has to do grocery shopping via the “e-mail order in, have them load it in your car at the curb” thing because of limited mobility.

        Also a lot of the ridiculous-seeming “as seen on tv” products are actually assistive with certain disabilities.

        And anyway: I tend to roll my eyes over people who want to make everyone’s life more difficult in the name of “virtue” or something. I don’t need to take my laundry down to a stream and beat it on rocks to be a good person…

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        • It’s also worth noting that there are a lot of regulations on what you can claim is an assistive device for people with medical conditions, so all this “junk” has to do a wink-and-a-nod toward disability enough to cue the market into it without requiring years of expensive testing.

          Also, the “I wouldn’t buy it, so it must be worthless” attitude is why central planning makes people miserable above and beyond the intermittent lack of necessary items. Maybe just let people buy the goods and services that make them happy…

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        • The whole issue of whether you should care what people do behind closed doors winks in and out in the absolute strangest places.

          I shouldn’t care what some weird guy does by himself in his basement so long as he’s not hurting anybody, right? Oh, he bought a Snuggie? Gigglesnort.

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      • I suppose that was a bad example and I see what you are saying but tech has a hubris problem.

        So making fun of booze delivery might have been a pot shot but these guys are living off the hog with VC and private equity money yet still think they are geniuses who don’t need to follow social rules.

        Y Combinator might be a good idea but going against “PC” is just stupid especially when “PC” screeds seem to mean “why are we in hot water for treating women poorly?”

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        • Yep. “Hubris” in fact sums up much of the problem here.

          The thing is, the tech crowd tends to be very “out of touch.” Likewise they are oh-so-precious, by which I mean, they don’t see a need to be more in touch. So fine. They come up with a ton of weird ideas. A few will work out, according to the broken clock theory. Presumably, “the market” (that oh so magical thing!) will get it all right. However, even when it works according to theory, the market needs corrections. One correction might be giving much less money to a ton of “out of touch” smartypants who are good at math but really-really-really dumb about everything else.

          And they are indeed really-really-really dumb about everything else. (Trust me I know.)

          Add to this, free market theory is a nice story that sounds good to white dudes. However, “labor markets” seldom quite work like capital markets, which don’t work quite like consumer markets, and we don’t have to channel Marx to realize that capital means power, and power means the capacity to exploit, and the capacity to exploit will be used, and perfect market conditions never exist like they do in the textbooks, and political processes will be employed to counter this, and — well — here is where we make democracy work or else lots of people die.

          But the SV true believers think we can “disrupt” everything and turn everyone into either “gig workers” or else the “unnecessatariat” —

          — it probably won’t work out very well.

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  4. S2

    I’m surprised someone is discovering now something it’s been obvious to anyone who has ever seen the piles of empty containers rotting in countries that import most manufactured goods (I.e. most of the developing countries). There’s a good chance that any container that arrives to, let’s say, Jamaica, will never leave the island (and Kingston is actually a major maritime hub, but mostly for transshipment to and fro the other islands). Shippers will include in the freight price the risk averaged cost that the container carrying your cargo will be lost to them permanently.

    As an aside, there’s a lot of work being done on ways to repurpose old containers, including as building blocks for low cost housing.

    Anecdote: I rented a car in Charleston SC to be returned in NC. I was upgraded to Top-of-the-line because they had a MA license plates fully loaded SUV that they needed to bring back North. It’s cheaper for the company to let me drive it up one state for free that to have an employee to carry it.

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    • As an aside, there’s a lot of work being done on ways to repurpose old containers, including as building blocks for low cost housing.

      I don’t really know what the point of that is. It sounds like a fun technical exercise that isn’t going to result in anything. Almost all the ‘problem’ in low cost housing is people unwilling to let it near them and blocking it by various means, and shipping containers seem even less likely to be allowed than other stuff, things that look like normal houses.

      Now, in some sort of hypothetical universe where people allowed teh poors to live near them, using shipping containers would be great. They tend to end up in cities anyway.

      Heck, because of the design, it would be pretty easy to make pre-fab modules that can just slip inside. A bedroom piece, a bathroom piece, a living area piece, etc. With some intelligent planning, you can even vary things up…this one gets an extra bedroom, this one only gets one, some of them have the modules turned around so the hall is on the left or the right, etc. Put a real door at the open end, along with something that is basically a ‘window AC’ unit except it has ducts run to it, and make all the plumbing and electrical there also.

      Do it right, you don’t even need to take it off the truck during that, just slide the modules in. (We have machinery already existing to do exactly this sort of thing, in fact.) Once driven off and dropped in place, it’s an hour or so to install and make sure everything is hooked up inside. With maybe some added time to cut out windows from the inside, maybe even cut another door and throw up an awning down the side for a porch area.

      They’re only eight feet wide, so the design would be closer to ‘RVs that don’t move’ than ‘mobile homes’, although the 40 foot shipping containers are longer than any RV (The longest RVs tend to top out at 30 feet, and that’s including a driver area and engine. In fact, the 20′ containers might have more usable internal space than a 30′ RV.) so while it would still be very narrow, you wouldn’t have to double up on space quite as much. You could even fit in a real bathtub.

      But…that’s not the problem low cost housing is facing. The problem it is facing is that no one wants ‘those people’ near them.

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      • Almost all the ‘problem’ in low cost housing is people unwilling to let it near them and blocking it by various means, and shipping containers seem even less likely to be allowed than other stuff, things that look like normal houses.

        It could possibly circumvent some local restrictions. Mobile home parks do this a lot, becoming far more dense than city regs allow any houses to be. And while there’s not enough support to repeal the current restrictions there is often also not enough support to change the restriction to include mobile homes.

        All of this being ironic because mobile homes’ reputation is far worse than that of regular dense housing, but end up being encouraged.

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        • And while there’s not enough support to repeal the current restrictions there is often also not enough support to change the restriction to include mobile homes.

          That seems like a really dumb way to run a country. I suspect it’s because mobile home manufacturers have lobbyists…and ‘build low-income houses for the poor in general’ do not.

          But, hey, maybe that does let us sneak them in, as long as the mobile home lobbyists don’t figure out how to exclude them from ‘mobile home’.

          Anyway, I just googled the legal definition of a mobile home, and the first link I came across said it is defined as: a detached residential dwelling unit designed for transportation after fabrication on streets or highways on its own wheels or a flatbed or other trailer, and arriving at the site where it is to be occupied as a dwelling complete and ready for occupancy except for minor and incidental unpacking and assembly operations, location on jacks or other temporary or permanent foundations, connections to utilities, and the like. A travel trailer is not to be considered a mobile home.

          Assuming that is the general gist of all the various state laws, it sounds like a shipping container with ‘house pieces’ slid inside it would indeed qualify as a mobile home. I was wondering because they didn’t have their own wheels, but it explicitly allows them to be on flatbeds. And even allows some sort of foundation to be put down first.

          Except perhaps cutting the windows and any additional doors holes out. I am not sure cutting though metal exteriors would count as ‘incidentally assembly operations’, so maybe do that before it gets there. OTOH, you could just do that ‘later’, aka right after the building inspector leaves…it seems entirely legal to alter mobile homes after they are installed, including cutting additional doors. As long as it legally works as a house when you put it in place (And I am unaware of any legal requirement for windows), the fact there are places that more doors and windows can be easily cut seems unimportant.

          …are mobile homes really exempt from residential zoning? Including things like total square footage? That seems like a really weird law…but, OTOH, I guess it has to be true, because even in my tiny town, a double-wide (much less a single-wide) mobile home is probably under the allowed size.

          Hell, my _house_ is under the allowed size, but obviously that only applies to new houses.

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          • Shipping container-as-low-cost-housing is one of those ideas that sounds better in concept than practice.

            1. Shipping containers are design to ship stuff; to withstand the stress and strain of being lifted, tilted, pelted by salt water, and banged with careless forklifts. As a result, they are made with heavy gauge steel and welded joints to prohibit air and water from easily penetrating them. They are designed to be inert containers and do nothing else.

            2. Houses by contrast are designed to stay in one place and not be tipped, or banged, and need to have openings to let air and water in and out; They are meant to be sophisticated systems that regulate interior temperature, humidity and light, while processing the movement of potable water, natural gas, electricity, data, and sewage in, through, and out of the building.

            3. The biggest expense in a house is in just a few categories- Land, Foundation, Roof, and the above-mentioned Mechanical Systems.

            4. Shipping containers solve none of these major cost categories; They still need land to be placed on, a foundation to support them, they still need a second, sloping roof over the top; In fact, the only connection point between containers and houses is in the walls and ceiling, which are perhaps the cheapest cost categories in building construction.

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            • Though everything you say is true, you are ignoring one of the key elements of containers’ structural design: They can be stacked six or more containers up. The structure to sustain a six stories building is not that cheap.

              I point out that containers are already being re-purposed as offices in construction sites. I was inside one (in Brazil) just last Friday. And yes, they get windows, and doors, and insulation, and light (and even a bathroom). You could almost live in one

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            • 2. Houses by contrast are designed to stay in one place and not be tipped, or banged

              Shipping containers that are designed to survive being tilted and banged, and can be moved, cannot help but randomly tilt and bang themselves while sitting on the ground, I guess.

              and need to have openings to let air and water in and out;

              This is the opposite of how houses are designed. Houses have openings due to design flaws that construction methods attempt to close. Hence things like weather-stripping on doors and whatnot.

              Are you under the impression that shipping containers are completely air-tight? Because they usually aren’t, but, more importantly, they certainly wouldn’t be if the end was left open and a normal household door installed there, much less doors and windows cut in at other places. And if they are one of the air-tight ones, and it somehow is a problem, it is a problem that two minutes with a drill can solve.

              They are meant to be sophisticated systems that regulate interior temperature, humidity and light

              You have just described ‘air conditioners’ and ‘light bulbs’, not ‘houses’.

              Also, air conditioners operate solely based off the current temperature, and, if it’s programmable, the time. Light bulbs mostly operate by humans manually flipping switches to complete an electrical circuit.

              There is no possible way to describe either of those things as ‘sophisticated’. ‘Oh, look at you with your fancy house, throwing mechanical switches to turn lights on and off. What, are bare wires you twist together to get light too good for you, you wimp? Why back in my day, the wires usually didn’t even reach each other, we just licked our fingertips and held both ends!’

              It is possible to buy remote-controllable versions of both of those, and perhaps build some sort of sophisticated system. But…I don’t know what that would have to do with the sort of building it is installed in anyway.

              while processing the movement of potable water, natural gas, electricity, data, and sewage in, through, and out of the building.

              Ah, yes, all those houses ‘processing the movement of data’, by which you mean ‘some wires in it ran to the actual device that does those things, which obviously could also be installed in a shipping container’.

              Same with plumbing, and electricity, and all that stuff, and I can think of no reason why I even have to mention that. Water pipes provide pressure, gravity provides drainage, wires carry electricity. There is no processing, and certainly not at the abstract level of a ‘house’.

              If you have some specific objection, like ‘No room for plumbing under the floor’, please state it. (And the response to that is ‘Shipping containers are eight and a half feet tall. The interior height of a story in a house is generally eight, so there is a minimum of half a foot possibly under there, and another half foot could be squeezed out if needed.’.)

              Your complaint weirdly seems to be ‘To make a shipping container as a house, you would have to do the same thing as finishing construction on a house’. Which…yes, you would. We know that. I specifically talked about it. I even suggested a modular assembly-line construction to keep costs down, which is the entire point of this.

              4. Shipping containers solve none of these major cost categories; They still need land to be placed on, a foundation to support them, they still need a second, sloping roof over the top;

              Shipping containers do not need roofs. They literally are designed to sit in the open for years, often at sea. What exactly do you think would be happening to them?

              And if you do want a ‘roof’, like if the noise in the rain is annoying, the ‘roof’ can just be a slopping sheet of 1/8″ plexiglass, which is a hell of a lot cheaper than actual house roofs, which have to keep water out and stop things from breaking through. Or even just use a cloth awning.

              Also shipping containers do not need foundations besides simple concrete. Technically, they do not even need that, they will survive just fine on the bare ground, but most people want their house to be level and not randomly sinking into the ground.

              In fact, the only connection point between containers and houses is in the walls and ceiling, which are perhaps the cheapest cost categories in building construction.

              In a traditional house, the foundation and roof and exterior walls can easily be half the cost of the house.

              This is one of the reasons that mobile homes are cheaper…they do not have foundations. They do, however, have to construct the entire frame of the thing.

              Or, to put it another way: You do realize I just basically suggested a really big RV, right? Minus both the cost of it being a motor vehicle, and the cost of a lot of the absurd tricks they do to reuse space, so cheaper than an RV?

              And of course it takes land to put this on. That point might be relevant if we had somehow come up with costs for this and compared it houses for sale on the market, but we did not do that. And as J_A pointed out, shipping containers are safely stackable half a dozen deep, so instead of a mobile home park, you can build a shipping container apartment building.

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              • It’s not that they can’t be converted to buildings;

                It’s that the conversion process is usually more expensive than constructing a mobile home the conventional way. Because again, you’re taking something and using it for a totally different purpose than intended.

                A good discussion here
                Another one here;.
                A more favorable opinion here;

                At the end of the day, if you want a house that looks and feels like a cool industrial shipping container, and you don’t mind spending just a bit more to make it happen, it can be work to that end.

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                • “if you want a house that looks and feels like a cool industrial shipping container”

                  I think this is the key phrase, and it comes down to cache. Mobile homes are declasse for much of America, while shipping containers have Industrial Chic. Much like having a teardrop or vintage Airstream vs. whatever is on the lot at the RV/trailer place. Function is fleeting while style is forever.

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                • It’s not that they can’t be converted to buildings;

                  …which is what every article is about, and perhaps it’s even what people are talking about in real life. Those people are talking about the hassles of converting them into buildings, and how they do not actually save any energy.

                  Neither of those is what I was talking about. I was talking about using them as-is by sliding prefab modules into them. Not constructing houses with three decks out of them, or balancing them at weird angles on top of each other.

                  At most, I was suggesting cutting a few holes in them and maybe stacking them, but if you want to assert that cutting holes will not allow them to be stacked without a lot of reinforcement, that is a reasonable point, but _you_ seem to think that means I would go ‘Well, there’s another added cost’, whereas I would instead actually respond ‘Well, we need to not do that then. We have to pick either stacking, or windows’. (And, honestly, if we’re stacking them to actually save on space, they’re probably right next to each other anyway which means windows don’t really make much sense.)

                  I’m not trying to build some damn stupid nonsense shipping-container ascetic house by cutting shipping containers into pieces and/or balancing them on top of each other, which is stupid and expensive. I’m talking about inserting a functional living space inside a real existing shipping container as cheaply as possible. Those two things, at some superficial level, might sound like the same thing, but they really are not.

                  And, as the first article and I pointed out, the problem with low-cost housing isn’t that we don’t know how to build it. The problem, in the US at least, is that we do not allow it to be built, which is why I was initially skeptical of shipping containers at all.

                  But, as was then pointed out to me, pre-fab houses actually have a special exception under the law, and can be build in sizes that real houses cannot, which actually does make them useful.

                  The question isn’t ‘can shipping containers be used to build real houses by dumbasses’, which has the answer of ‘Yes, but it’s stupid and doesn’t help anything’.

                  The question is ‘Can shipping containers be used to build somewhat cheaper mobile homes, which can then be hauled into place as ‘prefabricated houses’ for low income houses to get around idiotic zoning laws’, and the answer is…I still do not see why not.

                  Now, it is entirely possible that the answer to that is indeed ‘no’, but let’s check the only stuff in the articles that would address.First is the claim that ‘It is very narrow’, which, yeah, duh. But RVs are exactly as narrow, and shorter, and yet somehow have living spaces inside them.

                  Another claim is that they would get too hot, which is a very odd claim, and seems to be based on some misunderstanding about how metal heats up in the sun. The ‘deathtrap’ they show would heat up, not because of the metal, but because half the damn thing is glass windows that will let in the sun but not let out the heat.

                  And obviously the metal will need insulation (Although more to keep heat in than out), but of course these articles are rebutting idiots who want a ‘shipping container ascetic’ and thus wanted exposed metal inside. Whereas I was assuming (Because to do otherwise is really dumb) that my prefab modules would have thin walls and ceilings with insulation stuck to the outside to go up against the metal. You know, exactly like how RV walls are? (It’s possible they instead spray foam in those, and it’s possible that would be the best way to do it for what I am suggesting also.)

                  Another weirdly seems to think that even the tall shipping containers, at 9’6″, are not tall enough to do a house in…when in the actual real world, a story in a house is traditionally a total of 10′, and sometimes a few inches under that. So it’s like…4 inches too short? Really? That’s the objection? It’s especially absurd they seem to think ‘ducts’ would be the problem, when in reality, of course, air ducts often go through pretty narrow spaces, like up walls…you just make them wider in one dimension if you made them narrow in another.

                  And, again, weirdly, RVs do not seem to have two entire feet of ductwork and wiring at the top or the bottom or some combination.

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                  • Gentlemen

                    Converted containers ARE used today as offices in construction sites. They are insulated, have windows, doors, HVAC and even bathrooms.

                    Though opening side windows might somehow affect the structural strength of the container, (a) stacked containers only would have windows in the front and back, and (b) containers can withstand being long term with the doors open. Hence, I don’t believe doors and windows are an issue (actually, there are stackable wallless, roofless, crates that share the structural frames of a container)

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  5. S7

    I completely disagree:

    I receive several hundred emails per day. 80% are information only. Of the rest, most require an answers that take between 30 seconds to, if very long, five minutes. Emails that require longer than that can be counted with one hand fingers.

    Commiting to being responsive to emails actually allows me to get more vacation. I can do those anywhere, including queuing in a Paris Starbucks, waiting for my lunch in the Amalfi Coast, or in a taxi from the Bangkok Airport, my boss doesn’t care. Same with being available to taking calls here and there. Hence I get very limited pushback when I want time off. And believe me, I do take a lot of time off.

    Preparing a board presentation while on vacation, that’s a major time commitment. That, I wouldn’t do. But emails? Hell, BlackBerry was the best thing ever happened to me.

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  6. $2 – it’s also why as I understand it shipping containers are practically ‘free’ in many US ports. However

    Standard economic models that economists and policymakers commonly use to analyze trade policy assume that shipping costs are fixed and depend only on the distance between the two countries. They fail to capture the constantly shifting influence that these trade imbalances exert on export costs. Analysis of trade policy overlooks how external shocks, domestic policies, or changing trade patterns might affect trade costs, boosting or crimping net exports—and, by extension, growth.

    This seems like a strawman. From what I’ve seen, economists and policymakers that actually know what they’re doing certainly take all of these things into account. Remember how everyone was so keen on tracking the Baltic Dry Index during the commodities boom that immediately preceded the recession?

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  7. S7: I was musing the other day why a couple people I knew who taught during my schooldays (in particular, the French teacher at my old prep school) seemed so much HAPPIER going in to work in the morning than I did. I have a memory of seeing him walking up the sidewalk, swinging his briefcase and whistling. Whereas I drive in, wondering what fresh hell of e-mails are waiting for me that came in overnight. Not just student e-mails, but YOU NEED TO DO THIS NOW e-mails from someone who forgot something that was sitting on their desk for weeks, or notifications of mandatory meetings we will have to rearrange our schedules for….

    It’s also been quietly suggested here that “if you get up in the middle of the night, maybe you check your e-mail to see if anything’s come in” or even “why not let students text you?” (on our personal phones. Not just no, but hell no: if something goes really wrong, your whole phone, with all its personal stuff, COULD be subpoenaed. And that’s even ignoring the fact that there are still a few Luddite holdouts like me that don’t have a smartphone)

    I remember when smartphones came out and people said stuff like “What a luxury to be able to work when you’re out of the office” and I kind of quietly said “In the future, the real luxury will be being able to leave the office and NOT be expected to work” and I stand by that.

    I’m not important enough, and they don’t pay me enough, for me to be responding to e-mail on holidays or when I’m traveling.

    Work already expands to fill the time you give it. It’s not uncommon for me to put in 55 hour weeks when you include time at home spent grading or reading stuff to keep up with what I’m teaching. The people-wrangling part is my least favorite part of my job so I like walling off some of my time and saying “No, you can’t reach me then. Sorry.”

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  8. [$5] Seems like the pendulum has swung to the other side….wait a while…it’ll swing back. We might get to equilibrium eventually.

    [$7] I can say with any doubt that I’ve never had a manager that sent out work email while on vacation—ever.

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  9. $2 is a big “well, duh” for me. It’s something we constantly deal with in trucking. It’s called “deadhead” and it’s just how far you have to drive to pick up your next load from where you delivered your last one. Less is better of course but anything up to 100 – 150 miles is unremarkable.

    Some places have a lot of traffic going in but not so much out and vice versa. We also do a lot of “drop ‘n hook” so we have about 3x as many trailers in our fleet as we do tractors and the geographic placement of those trailers can get out of balance.

    So I’ve gotten runs with truly epic deadheads at times — 500 miles or more. Sometimes I get paid just to reposition trailers or myself. The most awesome was the time a couple years back when freight was tight coming out of SoCal and they routed me 1500 miles empty to my home terminal in KC rather than have me sit for a few days.

    And, yes, these geographic disparities definitely affect freight rates.

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  10. $8:

    This is a typical conversation all over the West. How many times do we hear people in Ireland ask, “If things are going so well, why am I not feeling it?”

    Maybe because only some things are subject to globalism. The price of consumer items that can easily be shipped around the world have fallen, while the cost of things that can’t, like land and healthcare have risen.

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  11. $1 This really glosses over the simplest reason they win is that they have a much easier time with the coordination problem. Getting a majority of 1% of the population to operate in single direction is hella easier than getting any significant percentage of the rest to do so.

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  12. S9 – AOL basically was Facebook before Facebook. So was Myspace. Facebook will come to an end soon too. Hopefully Twitter as well, and we can all go back to having intelligent conversations on blogs with long-form essays.

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    • I wouldn’t mind being wrong, but I suspect you are wrong about Facebook, in any short or middle term. There clearly is a market for social media platforms. Or rather, a market for one platform with dominant network effect. Facebook, for all its imperfections, is the one that was on top when that market matured. At this point any plucky challenger with a bright new idea can easily be bought out or copied by Facebook. As for trying to do essentially the same thing, but perhaps a bit better, see Google Plus.

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        • No more than Google, or Amazon, or Microsoft. What they have that the others don’t is a billion people/organizations in the user base — Richard’s network effect. I’ve had at least a half-dozen friends who have said, “I’m done with Facebook, I’m going to XYZ, follow me there.” In anywhere from three weeks to three months they’re back using Facebook because their friends don’t follow them to the alternate platform.

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      • Facebook is useful in one specific way — it lets you keep up to date contact information on scattered family and friends.

        You can, in general, find them, send them simple messages, and keep rough tabs on their life (married, divorced, sick, etc) — whatever they feel like sharing — without anyone having to devote a lot of time to it.

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      • Digg was the best thing ever until it wasn’t.

        Reddit currently has a handful of issues with moderation but they pale in comparison with the egregore running the readers. (SSC gets into it here in section III.)

        When the egregore moves on, we’ll get a new hotness.

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        • It’s a matter of scale, though. Too big to fail and all that. Digg at it’s height probably doesn’t do 1/10th the traffic that Reddit does on it’s worst day of 2017.

          I mean, the grognerds did try to build something new – but it turned out they only people who cared you could no longer be an open asshole or creeper on Reddit were, well, creepers, assholes, and a few absolute free speech advocates who seem to be continually confused why they’re always around Nazi’s and weirdos.

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          • Well, Twitter is doing some light cleanup of creepers, assholes, Nazis, weirdos, and absolute free speech advocates starting today.

            Perhaps when all of them end up on the same site (Gab?) then we can get rid of that site and, hey, no problem.

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            • Well, Twitter is doing some light cleanup of creepers, assholes, Nazis, weirdos, and absolute free speech advocates starting today.”

              Sometimes I wonder if the list just kept getting bigger and moving closer and closer to the middle if Twitter would create out of nothing, Anti-twitter.

              And would Twitter and Anti-Twitter be better for their purity or would the creation of Anti-Twitter end them both.

              [I should note, I have No-Twitter]

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              • Every single major leap was pre-dated by a revolution in communication technology.

                Speech to writing to moveable type to the telegraph to the electronic age.

                Now we have the internet to allow every single person to connect to any other single person in real time and also be connected to pretty much all of human knowledge to allow for real-time fact-checking/narrative correction.

                How long was it between the movable type printing press hitting Europe and the Reformation? From 1440 to 1517?

                We’re speeding up. I wonder how far away Enlightenment II: Electric Boogaloo is from where we are now.

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      • Facebook will be around, but I suspect unlike Google and Amazon it will not occupy nearly as prominent a place as it does right now.

        I suspect it will be around and *just like* Google and Amazon it will be something different than what we thought it was. Now, what they want to be when they grow up, I’m not sure…but the data, skills and opportunities are practically limitless.

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          • True enough… but consider the fact that totally falling flat in major enterprises like email, SMS, and smartphone hasn’t caused them to go belly up – that’s a lot of entrepreneurial capital they’ve got stock-piled.

            If your comment is that Facebook leadership is as short sighted as, say, RIM, then yeah… hard for me to say… I’m assuming that Zuckerberg has hired real talent to surround him; but if he’s the bottleneck and weak-link then that’s a pretty specific argument to make (and maybe the right one).

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            • My theory of Facebook is that they lack vision and imagination. The areas where they have tried to expand to were things they were told by all the commentators that they should. I struggle to think of any one effort that is comparable to Amazon on the Kindle. Nor do they have the Googlesque tendency to try 100,000 different things to see what they can do better than the incumbents.

              This is, of course, just a theory. If I’m wrong about Facebook’s prospects, the above is probably what I’m wrong about.

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              • (The Oculus Rift struck me as something that had potential to do something really interesting but, so far, it’s not even a wet raspberry. Instead it feels like they bought something so that they could squash it before it ever left the nest.)

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              • Yeah, my prediction might be more like… if they fail its because they were too enamored of Facebook to recognize that it isn’t about making Facebook better. Like Amazon realized it had storage/compute capacity and expertise and created AWS – which now generates over $15B/yr and is actually profitable.

                My guess is that Facebook’s next iteration has less to do with social media platforms and more to do with AI/ML and digital images… whatever that might be.

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                • There are exactly two things that could dethrone Facebook, as far as I can see, and neither of them are social media going away…which it’s not.

                  The two things are mostly the same thing: An easier way to find and link to other people. This is about the only way that _anything else_ could grow a user-base faster than Facebook.

                  Of the two I have thought of, one would be some sort of government created ‘internet ID’ that actually ties people to their real identity and is used to officially communicate with them. But more important, instead of logging into places, you log into devices, and that device logs into places. Sorta like ‘Login via Facebook’, in fact. This could also be some private organization that does this, a non-profit that verifies IDs.

                  The other is some sort of augmented reality linking. Where we can send messages to people in our sightlines, without particularly knowing them. I am not entirely sure what this system is going to look like, or what the anti-spam safeguards are going to be, but there really is going to be some point where where we can (at least try to) send a message to ‘that guy over there’ and he might get it, and we get menus when we walk into restaurants, and all sorts of things based on physical location.

                  Note both those things take down Facebook only if Facebook rejects them. It’s worth mentioning that Facebook is _already_ trying to do the second. And, honestly, it has no reason to reject the first.

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  13. [$1] (From cnbc) “to be in the top one percent nationally, a family needs an income of $389,436.”

    Two doctors married to each other might manage it every year. Someone cashing out a business (or 401K) might also manage it. Churn is important, taxing someone on a one in a lifetime event as though it’s a yearly event seems unethical.

    More importantly, I don’t understand what “economic opposition to the 1%” is supposed to mean, much less whether it’s good economic policy. Mathematically, by definition, the 1% has existed as long as money has existed.

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      • Yes, nobody will want to be rich if they’ll only have hundreds of thousands in income after taxes!

        This quickly becomes a discussion about economic activity and marginal taxation.

        For example, say those doctors have the choice of working 4 days rather than 5 a week. Every day lost would be a 10% hit in their before tax income, but high marginal taxes means it’s a lot less of a hit in their after tax income.

        Is it really a good idea to tax extra hard society’s most productive people? To make becoming a doctor less attractive?

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        • What makes anyone think high income people are “more productive” to begin with?

          As discussed above, the legal regime of property rights and rentseeking is what produces the wealth enjoyed by software creators and professionals.

          Its a bit of chutzpah for people to distort the economy to redirect the firehose of wealth in their own direction, then loftily claim their wealth shouldn’t be taxed because they are so “productive”.

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          • the legal regime of property rights and rentseeking is what produces the wealth enjoyed by software creators and professionals. Its a bit of chutzpah for people to distort the economy to redirect the firehose of wealth in their own direction, then loftily claim their wealth shouldn’t be taxed because they are so “productive”.

            You’re pointing to IP issues (i.e. government disfunction), and then claiming all high incomes are similarly dysfunctional. The way to fix ‘rentseeking’ is to end it, not to take everyone’s money with the idea you can redistribute it “fairly”.

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            • The higher the income, the more it is a function of dysfunction.

              In Leftist-Speak, “Behind every great fortune is a great crime“.

              The reason for this is that there are limits to how much wealth can be generated by human labor, no matter how skilled.

              Aside from the Taylor Swifts and Lebron James’s of the world, there is almost no skill that is so rare and precious that it produces a wage sufficient to be above a million dollars or so.

              We know this by seeing the effect of free and open competition in the labor market, when it is thrown open to the global market.

              If doctors and lawyers had to compete without restriction against their counterparts from Bangladesh and China, how many could still charge $500/ hour (1 Million total wage per year)?

              To create a great fortune of wealth requires a massive amount of labor input in a similarly massive sized organization.
              But to claim an outsize portion of the wealth created, requires an ever-more contrived and preposterous explanation of why one single person in that organization was somehow deserving of it.

              Usually that explanation is “The government gave me a piece of paper saying so!” in the form of a patent, land deed, or similar document.

              For example, did Steve Jobs personally invent the Iphone? Did he write its software? Did he design its hardware? What did he actually do, with his own labor, that causes his estate to be justified in claiming even a penny of Iphone sales?

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              • For example, did Steve Jobs personally invent the Iphone? Did he write its software? Did he design its hardware? What did he actually do, with his own labor, that causes his estate to be justified in claiming even a penny of Iphone sales?

                In practice from a policy standpoint you’re suggesting Apple should have been set up in a different country, that we don’t want the like of Jobs here.

                It seems a misuse of gov power to force Apple to flee the country because it’s owner is facing confiscation of his wealth. Jobs created a lot of wealth, a lot of jobs.

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              • The number of people who earn a wage of $1M a year or more is pretty damn small. However, the number of people whose income is well over $1M a year, thanks to investment income, is much larger.

                That said, is right that most people making salaries in the upper 6 digits or higher are probably not doing anything significant to actually generate that value by themselves*. A lot of the ‘value’ they bring is not directly related to the daily labor, but is more along the lines of brand recognition, or networks/relationships. This is very similar to the value of big name entertainers.

                It’s an interesting question of ‘value’, but also one that is so deeply tied into our society and culture that changing it is not something that government policy will be able to accomplish quickly (mostly because of capture, but also because people won’t demand it).

                *Let’s be honest, people who are able to trade on their name for huge financial reward are very rarely uniquely exceptional people. They may be talented, but they are/were able to benefit from a confluence of supporting events that helped to elevate them above others with equal, or even better, talent who did not benefit from fortuitous events/opportunities. I don’t begrudge them their success, but let’s not kid ourselves that they are somehow uniquely qualified to do the job and earn the pay**.

                **Idea for a fictional society: Society has a hard ceiling on success in any given field, and when a person hits that ceiling (measured by total income in that field, or some other easy metric), they are forced to retire from the field. They can keep their rewards, but they are put to pasture. They can either live out their lives in idle splendor, or they can change fields and attempt to ascend again.

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                • Idea for a fictional society: Society has a hard ceiling on success in any given field, and when a person hits that ceiling (measured by total income in that field, or some other easy metric), they are forced to retire from the field. They can keep their rewards, but they are put to pasture. They can either live out their lives in idle splendor, or they can change fields and attempt to ascend again.

                  But I love my career. I want to write software and do math. I plan to continue to do that, as long as I meaningfully can.

                  This would be a terrible structure.

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        • There’s some strange math i’m not following (perhaps a number I hadn’t seen before, Cue )

          The doctor is forsaking 20% (not 10%) of his gross revenue. But even if he’s taxed at the marginal 39%, he’s forsaking 61% of 20% of his after tax income by not working Sunday. at the end of the day, he’s 12.2% worse off

          No matter the marginal tax rate, you always have more after-tax income if you have more pre-tax revenue

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          • Yes, it’s more money, but the cost-benefit analysis changes. My wife has never made a major decision on the basis of the marginal tax rate, but it’s something we’ve talked about. Similarly, the inconvenience to my wife of any job I take is weighed against the fact that any income from that job starts at our top marginal tax rate. It’s a (very small) part of the calculation that I was/am more use at home.

            Physicians as a whole tend to be workaholics. My wife had a semi-retired colleague (the one who delivered our daughter, actually) who would work up to a particular tax bracket and then stop. That’s pretty rare, though.

            Where you might see it have the most impact is with female physicians married to male ones. It’s not uncommon for the wives in those cases to work part time. I’ve not heard of a case where it has played (or been purported to play) a major role in that decision, but I’m sure it’s on the ledger somewhere.

            Anyway, long story short, I doubt it’s having an effect. I don’t think any of the rates that have been realistically discussed in the US would have a big effect. But raise taxes enough and it would.

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            • Anyway, long story short, I doubt it’s having an effect. I don’t think any of the rates that have been realistically discussed in the US would have a big effect. But raise taxes enough and it would.

              And after that we probably need to have a discussion if this effect, if real, is harmful, or in fact helpful.

              Pushing someone who is making, for example, $100,000 to work 10% less does not seem to harm anyone.

              Yes, it hurts if we have some sort of shortage in the field, which is why I suspect that doctors were used as an example, but income tax that has nothing to do with the doctor shortage there (Or in fact any shortage, as evidence by the fact that employment is almost completely unrelated to income taxes.), and cannot possibly fix that problem. And if we switch the job to ‘lawyer’ where there are arguably too many, and suddenly it’s looking a lot different.

              Extremely well paid people at the top of a job market leaving, or even reducing their hours, will result in other people moving upward. If we actually have some way to convince someone who makes $100,000 a year to voluntarily work just half their hours, and get paid $50,000, and someone else, who is hypothetically otherwise unemployed, to work the other half of the hours and get paid the other $50,000, we’re actually better off. (And, yes, it wouldn’t be an unemployed person taking that particular job, but it would be someone moving up and someone else moving up, and someone else moving up, etc.)

              Now, there is a problem if they are not making enough to live on. But we are talking about people who might, hypothetically, choose not to make that much due to their income taxes, which almost certainly means they don’t need to make that much, unless they are very bad at decision making.

              The idea that extremely well paid people, people who can afford to take a cut in work and pay, _must_ be incentivezed to keep working as much as humanly possible, is nonsense, and part of the ‘Cult of the Highly-Paid’ that seems to have been started in America.

              I am not saying we should actually try to encourage them to work less, because I am fairly sure that taxes do not work that way and the Laffer curve is utter nonsense.

              I’m just saying a lot of people seem to have automatically bought into the assumption we desperately need to keep the rich from working less without any evidence, or even really any logical reason why that would be true. This despite the obvious fact that reducing the supply in the labor market by the rich wandering out of it will cause wages to go up.

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              • If we actually have some way to convince someone who makes $100,000 a year to voluntarily work just half their hours, and get paid $50,000, and someone else, who is hypothetically otherwise unemployed, to work the other half of the hours and get paid the other $50,000, we’re actually better off.

                The first problem is “share the work” hasn’t worked well in practice. The second is “half” of $100k is hardly $50k in practice.

                There are government taxes and other costs of employment carefully hidden from employees. If both the employes get full benefits (which I assume you want), and those benefits are roughly 30% of his total income+benefits package (link below), then that $100k job actually is a $130k job, which split becomes two $65k jobs, but since each need $30k in benefits they’re both actually $35k income.

                https://www.bls.gov/news.release/ecec.nr0.htm

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                • The first problem is “share the work” hasn’t worked well in practice.

                  That’s…not actually my problem to solve.

                  Let me put it bluntly:
                  I do not care if some organization would becomes ‘slightly more efficient’ if lower income taxes caused someone to work more hours so they can spread the workload over less people. That is, frankly, absurd.

                  Organizations are also more efficient if they do not offer breaks or days off, yet I don’t think we should in any manner incentives that. In fact, we ban doing that because it is harmful.

                  Someone working more hours, with the limits applied by law, is not harmful per se to the person, but it’s not something we should worry about making it happen by lowering taxes.

                  There are government taxes and other costs of employment carefully hidden from employees. If both the employes get full benefits (which I assume you want), and those benefits are roughly 30% of his total income+benefits package (link below), then that $100k job actually is a $130k job, which split becomes two $65k jobs, but since each need $30k in benefits they’re both actually $35k income.

                  Aaaaaand?

                  Having two people getting $35k a year in salary and $30k in benefits, instead of one person getting $100k a year in salary and $30k a year in benefits, and the other being unemployed, is _still_ better for how the economy works on average.

                  But you want to argue that $30k is below some sort of threshold, and people should not be paid that little, okay. (Although I think you’ve failed to notice that one person in the original scenario was getting paid nothing.)

                  That example was absurdly unrealistic anyway, no one can just decide to not come in from half their job. (Also, we literally do not have that many people.)

                  In reality, for the people who are actually do reduce their workload due to taxes, we would be talking about people decide not to work another 5% or 10% of their time, via unpaid vacations and declining business trips and new clients and whatever makes sense in their business.

                  Which is going to result in 5%-10% more employed people, not double. Via averages, I mean. Maybe not at that particular company, but in general.

                  And also, in the actual tax brackets, the top bracket is $500,000.

                  I.e., this entire line of argument against taxes is stupid. There are indeed a lot of behaviors we should be concerned about incentivizing or deincentivizing via taxes.

                  ‘Highly-paid people might slightly reduce the amount the work they do because they are making less per-hour’ is _not_ one of the things we need to worry about. Assuming it does happen, which it doesn’t really seem to, it wouldn’t necessarily even be a bad thing, despite everyone somehow already ‘knowing’ that.

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              • If we actually have some way to convince someone who makes $100,000 a year to voluntarily work just half their hours, and get paid $50,000, and someone else, who is hypothetically otherwise unemployed, to work the other half of the hours and get paid the other $50,000, we’re actually better off.

                I am reminded of a conversation, long ago, with a consultant on software staffing, on an airplane. When I asked what his toughest problem was, he said it was convincing hiring managers that a single $20K/yr programmer might well be worth more than two $10K/yr programmers (the scale of compensation says something about how long ago this was). Why? In many cases, no number of $10K/yr programmers will have the insight into the problem that allows it to be solved — that’s what you pay the $20K/yr for.

                If the $100K person has the insight that make a tens or hundreds of millions dollar business possible, how much did we lose by having two $50K people instead? It’s not impossible that the $100K programmer, working half time, will still have the insights and iron out the details and make the revolution happen, but it’s not the way I would bet.

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                • If the $100K person has the insight that make a tens or hundreds of millions dollar business possible, how much did we lose by having two $50K people instead? It’s not impossible that the $100K programmer, working half time, will still have the insights and iron out the details and make the revolution happen, but it’s not the way I would bet.

                  Assuming I am the person who got hired, we got a job, that’s what we got! Except there’s just one of me.

                  Oh, am I supposed to be both the guy who asked to have his hours cut back due to not wanting to make income at a slightly reduced post-tax rate _and_ the guy who got hired? I don’t know how that joint viewpoint is supposed to work.

                  Or…wait, am I the company in this? I’ve never considered things from the point of view of a corporate entity, because they literally do not have one. But I can try looking at it as their stockholders. Here is what appears to be the question:

                  As a stockholder, how much did we lose when a tax hike made the company’s super-programmer say he didn’t want to work his previous hours at his slightly-reduced post-tax pay, and asked to have his hours cut in half?

                  Well, it depends. If he just wanted his hours cut and used that tax hike as an excuse, well, there was nothing the company could do.

                  If he was serious about being bothered by the additional income tax of a 3% or whatever on his income, it really sorta sounds like the company should have offered him the raise he was clearly angling for, and it seems like poor management to me if failure to do so has harmed the company.

                  Alternately, the company could have tried to find single person who was willing to work at that level, hired them, and then let the first guy with his half-hours nonsense go.

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              • I’m just saying a lot of people seem to have automatically bought into the assumption we desperately need to keep the rich from working less without any evidence

                As an example of how ingrained Vulgar Lafferism is, an anecdote:

                Mrs. Daniels worked for a time at the Magic Kingdom Of Minimum Wage Service Workers.

                She relayed numerous times, stories of her coworkers emphatically insisting that working over a certain number of hours would result in your paycheck being reduced “because of taxes”.

                Never mind that these people were all part of the 47% who earned so meager a wage that they really would net out to never pay federal income taxes at all.

                But they had an unshakable fear of the Tax Bracket of Death drummed into them by decades of cunning lies.

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                • I remember that myth. Here is why it worked:

                  Minimum wage workers (and folks in that ballpark) are less concerned about how much they pay in taxes on an annual basis, but rather how much of their paycheck they can take home every two weeks. I remember working overtime at the stone works and very quickly figuring out that the amount extra that I would take home that week was pretty damn small, because most of the overtime pay was eaten up by taxes. It didn’t matter that I’d get thousands back next year, because I needed the extra cash now (because I was living paycheck to paycheck), and it’s not like Uncle Sam is going to pay me interest on that loan I gave him.

                  It was many years later before I learned how to game withholding such that I could maximize my paycheck and minimize my refund/tax due.

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          • The doctor is forsaking 20% (not 10%) of his gross revenue.

            My example is that of two married doctors. So if they give up one day that’s 10%.

            But even if he’s taxed at the marginal 39%,

            We need to combine all marginal taxes and phased out benefits. So that’s income(federal+state+local) plus whatever. 50% is probably closer to the reality (although with enough complexity it can get higher). So at the end of the day they’re 5% worse off from a money standpoint but they went from 4 free days to 5.

            The issue becomes how important is that extra 5% compared to whatever else they might want to be doing.

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        • I mean, for instance, as a society, we would’ve been far better off for the past 30 years or so if half the people who went to Wall Street and were so “productive” they destroyed the economy and ended up with basket weaving degrees and worked at Old Navy, so there’s that.

          As far as doctors go, I’d rather just have them go to college tuition free and also reform things so we don’t have doctors wearing 100 hour weeks, which seems not great.

          Plus, all evidence even among right-leaning economists shows the Laffer Curve doesn’t kick in until 60-70%.

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  14. An alternate take on $1:

    I’m not sure what it means for the 1% to win. Once you’re in the 1%, haven’t you already won? If there is any coherent meaning above and beyond that, it’s more likely that the 1% wins because they constitute a group of people who are very good at doing whatever it is that they do, whereas the opposition to the 1% is largely composed of people who do things like write nonsensical blog posts that assert non-existent class solidarity, allege simplistic conspiracy theories, and display a general disinterest in understanding political economy.

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        • I disagree.

          whereas the opposition to the 1% is largely composed of people who do things like write nonsensical blog posts that assert non-existent class solidarity, allege simplistic conspiracy theories, and display a general disinterest in understanding political economy.

          You are spot on here, taking to task a person who is portraying themselves as having found the answer to why the 1% are able to maintain power and influence, and this is the person who has the answer to solving that problem, if only the 99% would listen to him.

          It’s at the very least, a variation of the theme. Lots have people have sold themselves as oh so very smart for the simple act of identifying a collective action and coordination problem, but they rarely have the intelligence to offer much of a solution beyond, “if you all only do as I say”.

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          • I’ve worked in jobs where you could take one person out and replace with any other person and after a countable-on-one-hand days of training, the only difference between this person’s output and that person’s output was enthusiasm.

            I’ve worked in jobs where 80% of the work was done by 20% of the people and the other 20% of the work was done by the other 80% of the people and it wasn’t enthusiasm that made the difference there, it was ability. (Management’s desire to make a “monkey in a space suit” procedure notwithstanding.)

            The part of the 1% that got there after spending time in any other percentile strike me as being very likely to be part of the group of people who are the good 20% and figured out how to leverage that sort of thing.

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            • I think this is mis-threaded, but whatever.

              The part of the 1% that got there after spending time in any other percentile strike me as being very likely to be part of the group of people who are the good 20% and figured out how to leverage that sort of thing.

              Which says to me that there are another 19% who, if given the same opportunity, could do just as good a job, which fits my definition of, “the 1% are not imbued with unique skills that make them especially deserving of the reward”, but rather represent the percentage of people with a somewhat uncommon skill set who happen to have made it to the top. How a person in the 99% envisions the mechanism of ascent of the 1% says a lot about the viewer.

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              • Well, the whole “ability to leverage” thing is important too.

                It’s not that any given skill is unique. It’s that there are a lot of skills that have multipliers found in other skills.

                It’s not that somebody is a good programmer, it’s that somebody is a good programmer *AND* a good tech writer. If all you’re looking for is a good programmer, sure, that’s merely an uncommon skill set. It’s when you get someone who can do two things well (or three things) that you’re finding people who cannot just be replaced like cogs in a machine.

                At that point, management is in the weird predicament of competing for their labor.

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                • Yes, it’s uncommon, perhaps even rare, but what I am saying is let’s not pretend it’s unique, or so rare that it is deserving of vast sums of money ($1M+/yr).

                  If we were to extend this to, say, CEOs, or actors, it’s important to recognize that they make the big bucks NOT because they are uniquely talented, but because they are a safe bet, and the people paying the money are not willing to spend the effort and/or take the risk on finding a cheaper person who can do just as good a job.

                  This is why I wrote out my fiction idea. Imagine a society where an actor, or athlete, or CEO tops out and is immediately removed from the field. Safe bets/sure things are constantly taken out of play, forcing a certain amount of churn in a field. If wants to remain a software developer until she is 65, she has to be careful about how much compensation (if compensation is the metric) she is willing to accept so as to avoid maxing out. I could see a corporation finding ways to game that system so as to avoid their executives from being head hunted too eagerly. A person could have fun with that idea.

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                  • Safe bets/sure things are constantly taken out of play, forcing a certain amount of churn in a field.

                    Ouch. I know this is a thought experiment, but you’re encouraging (even insisting on) risky behavior and the elimination of “have seen it all” safe hands. I’d expect to see a lot more Enron style flame outs.

                    let’s not pretend it’s unique, or so rare that it is deserving of vast sums of money ($1M+/yr).

                    I see three general categories for this.

                    1) Fame, i.e. monetizing a name or embodying a brand. The latest James Bond actor can command $50 mil a movie because he’s that good and that safe. He’s replaceable but at a high risk. On the other hand the Kardashians or Taylor Swift are not replaceable. Hollywood doesn’t have the ability to transform a TS fan into a fan of “whatever”.

                    2) Skill.

                    Example: Very high level players in winner take all games really do have enough influence on who wins the game to be worth a piece of the result. For basketball players result is measured in Billions so that’s still a lot of money.

                    The problem is “winner takes all” games also extend in certain instances to lawyers and some others, including the occasional CEOs. A point of growth to a 100 Billion dollar company is worth $1 Billion. Exxon is worth roughly $350 Billion. Similarly Enron’s CEO had something to do with it’s fall.

                    3) Ownership

                    The vast bulk of level money comes from ownership, not salary. That’s what drives the numbers, I’m not sure what’s left if we exclude it but my guess is not a lot.

                    Note “eating the rich, Venezuela-style” is way more destructive than just sacrificing the Kardashians. The richest guy I know is a Plumber who owns his own shop (starting from nothing), the richest gal is a Dentist who owns hers (ditto).

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                    • I wholly disagree with regard to fame. Fame is massively fickle, and people who are irreplaceable today are suddenly on a VH-1 special tomorrow.

                      Regarding Skill, see my comment to jr.

                      However, in my fictional, each profession has a known limit. As long as you are careful of that metric, one could keep operating in that profession for a long time. For instance, if the metric is professional compensation, one could accept a reduced pay and insist that anything above that be paid to a charity instead.

                      Ownership would be a tricky thing for my fictional society, but I could handwave that away by saying that ownership is not a profession, merely a state. So your plumber could work as a plumber until he maxed out, then work as the owner of a plumbing business (as the head of a business) until that maxed out, then merely exist as the owner, while the day to day is handled by someone else (reverting to a silent partner).

                      Again, it’s a fictional society, it’s meant to be played with. The goal is maintain a degree of churn and prevent rarefied networks from forming and enriching themselves (e.g. the collection of CEOs who are all board members of other companies, whose CEOs are board members of their companies).

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                      • Fame is massively fickle, and people who are irreplaceable today are suddenly on a VH-1 special tomorrow.


                        Yes and no. Replaceable isn’t the same as “replaceable by you” or “usefully replaceable”. Seinfeld was #1, clearly something else would be #1 after Jerry moved on. However Seinfeld was owned by NBC, and from their point of view, replacing him was somewhere between highly risky and impossible.

                        This is the “safety” argument on steroids. The Kardashians’ fan base who watched last episode will probably watch next episode. There are networks of advertisers, show producers, and owners who all depend on this.

                        Regarding Skill, see my comment to jr.

                        I like your comment a lot and agree with the bulk of it… one quibble however is, yes, the opportunities need to seriously align to be successful to a certain degree, but there’s a tendency to think that path of success was the only possible one. You had opportunities which opened the door to other opportunities, but you’re totally unaware of other opportunities which would have opened up if you’d taken a different path.

                        I needed an absurd number of things to line up for me to get the job I have. However that was also true for my previous job, and the one before it. In each case I’d have kept looking for work until I found it. There’s been a number of jobs I’ve applied for over the years where I’ve failed to get it.

                        The odds of any individual person are more than 2^46, but that’s looking backwards.

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                        • But somehow Seinfeld went off the air and was replaced (although through the magic of syndication…). Still, you are right that it’s all about safety. But safety, such as it is, isn’t necessarily a good thing. A ship in port is safe, but that’s not what ships are for.

                          But I’m not looking at a specific thing, I’m looking at things in general. To wrap in ‘s comment as well, it’s important to not get lost in the specific instance.

                          Could Apple have been a successful company without Steve Jobs at the helm? Absolutely! It might not have found success through the iPod/iPad/iPhone, but that doesn’t mean it couldn’t have made just as much money in some other market, or with some other product. Jobs brought a specific vision to the company, but that is really what was unique about him. His management style, etc. was nothing revolutionary. From what I hear, you could find similar styles in any backwoods religious cult. I don’t think he was even very inspiring to his workforce, beyond the always reliable inspiration that paying people well tends to inspire them to work hard for you[1].

                          We tend to overemphasize just how much a given leader contributes to the overall success of an organization[2], such that we buy into a myth that a given leader, or top performer, is irreplaceable.

                          They are all replaceable. Sure, not by anyone, you can’t just grab Joe or Jane Public and drop them in the CEO slot and expect excellent results. But for any given job, there is a population of people who are perfectly capable of getting the job done, and doing it well, even excellently. They have the skills, the talent, and the drive to make it happen, they just need the opportunity. That population has probably already done more than enough to demonstrate that they can succeed.

                          In the end, a lot of this boils down to the fact that almost everyone sucks at risk management. How often do we read the news that a company has selected a CEO who has one or two big successes, one or two spectacular flame-outs, and a string of “s/he kept the place afloat’, and they are being hailed as an inspired choice because of that one success! Or a sports team recruits a player that is a train wreck, or a movie production hires an actor that is a hot mess, all because there is an element of ‘bankable’ to them. It’s bad risk management – focusing on one positive, and downplaying all the negatives. It’s like buying a Ferrari for a family car because you read that it has great resale value.

                          So equally capable people are denied an opportunity to succeed because someone else has name recognition, and people who should know better make the ‘safe’ choice, even if the safe choice isn’t that safe.

                          2 final points, because I’ve rambled on enough as it is.

                          1) Opportunities – Yes, my success is less about the specific list of opportunities I had and more about which ones I took and what I did with them, but it still requires that I had opportunities to take. This leads us back to risk management, every opportunity is also a risk. Taking advantage of opportunities requires two things: being able to assess the risk inherent in the opportunity, and being able to recover from an opportunity that fails. If I had to identify a quality that is present in most highly successful people, it is this. People who can’t asses the risk will jump on any opportunity, or none at all, depending on their nature (impulsive or cautious). People who can’t recover will be unable to take new opportunities because they will be strapped for resources. It doesn’t matter how hard you work, or how well you hone your talents, if you can’t asses risks, you are going to struggle to succeed[3].

                          2) This is more toward jr and his comment elsewhere about sports teams. The key thing to remember about teams that form during a strike is that it’s still a team. Teams need time to train together and learn to work together. I would expect that it would take at a minimum a year for a fresh team (all rookies) to reach peak performance. Maybe less if they happen to gel together nicely. This is also probably the amount of time the members would need to move from being amateurs (who can only train in their free time) to professionals (who get paid to train all the time).

                          What separates the people who succeed at those levels from the people who have or had the potential is that the people who succeeded got up every morning and executed.

                          This is one of the reasons people in the military can be such top performers, because they aren’t having to get up, and work 9-5, then find the time and energy to practice or train. Practice and training are part of their job[3]. If you take a person who has the potential, remove distractions, and offer them an incentive to get better, they will. The small percentage of people who ‘get up every morning and execute’ despite distractions are commendable, and uncommon. It’s fine to rely on such people to rise to the top on their own when the need for them is very limited (such as with professional entertainers), but for jobs that are in demand – someone picking themselves up by their bootstraps is a compelling narrative, but it leaves an awful lot of wasted potential laying about[4].

                          [1] With the caveat that he also worked to prevent other companies from head hunting his people by conspiring to keep wages low.

                          [2] While at the same time we downplay how much a leader contributes to the failure of an org – we really need to pick one, either they own it, or they don’t. I’m on the side of ‘they usually don’t’, except in very specific cases.

                          [3] This is why the Navy is having trouble right now, because they seem to have forgotten that sailors have to train and practice full time to get good at things. When you insist that they practice and train only in their off-duty hours, they are only going to get good at the tasks they do regularly while on-duty, because they have way too much other stuff to do (besides sleeping) to keep up with the necessary training while off-duty.

                          [4] I’m not saying we should go full-on Great Plan here with regard to children’s futures, but again, let’s be realistic about the myths we like to tell ourselves. The person who succeeds on their own despite the odds is inspiring, but it means there are a whole mass of people who fail because of the odds.

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                  • Yes, it’s uncommon, perhaps even rare, but what I am saying is let’s not pretend it’s unique, or so rare that it is deserving of vast sums of money ($1M+/yr).

                    If we were to extend this to, say, CEOs, or actors, it’s important to recognize that they make the big bucks NOT because they are uniquely talented, but because they are a safe bet…

                    The question of who deserves what is way to complicated to tackle in a comment, so I’ll put that aside except to say that being talented or being successful is not necessarily an indication of moral worth. What should be obvious, though, is that people just don’t generally end up in positions of great wealth by accident. These people almost always are uniquely talented. And there’s no better way to illustrate this than when you expanded your examples to include athletes.

                    For instance, I believe that the NFL has colluded, has in some way made a collective decision, to keep Collin Kaepernick off the football field. What’s my evidence? The number of human beings who any NFL owner, GM or fan would want playing starting QB for their team is infinitesimally small, maybe 10 or 20 out of 7 billion people on the planet. If you change the list to number of human beings that a GM could safely sign as starting QB and not be immediately fired, the list expands perhaps to maybe 40 or 50. The fact that Kaepernick falls somewhere in the middle of that list and doesn’t have a job, while many who are further down the list do, is pretty good proof of collusion.

                    All of that to say that the idea that people who are so phenomenally successful at what they do (world class athletes, CEOs, physicians, etc.) so as to end up in the top 1% of either income or net worth, just kind of ended up in those positions by mere luck is kind of absurd. No one just wakes up and finds themselves a world class athlete or box office superstar or Fortune 500 CEO or a neurosurgeon. Yes, some people were just born into circumstances of great wealth, but that only happened because one of their ancestors did something incredibly successful to create that wealth.

                    Again, none of this has anything to do with who deserves what? I’m not even sure that we could come up with a meaningful and robust definition of what deserves means in these circumstances. Obviously, there is a great deal of luck that plays out in the genetic lottery, but those physical and mental attributes still need to be cultivated over a lifetime of training and preparation. We don’t do ourselves any favors by pretending that this isn’t the case.

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                    • “Yes, some people were just born into circumstances of great wealth, but that only happened because one of their ancestors did something incredibly successful to create that wealth.”

                      Looking specifically at wealth, I think you may be underselling this.

                      I agree that it is rare that an individual can earn large fortunes without doing something (or, more likely, some things) very well. But I think it is probably fairly common among those who posses large fortunes that they came into possession for reasons unrelated to their own talents.

                      I think the bigger thing we need to be careful of — and I don’t believe you are doing this — is conflating, “Most 1%ers are 1%ers because they are talented,” (almost certainly true) with, “Most 99%ers are 99%ers because they are not talented (almost certainly false).

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                      • “Most 99%ers are 99%ers because they are not talented (almost certainly false).

                        It’s not an issue of “talent”, or even “opportunity”.

                        The lottery is a massive experiment on what happens to “unearned” wealth. Something like half the winners go bankrupt in 5 years. “Not destroying yourself financially in five years” isn’t close to a good definition for ‘can handle wealth’. We should be looking at what percentage of people can be handed wealth and expand their money over a longer time horizon.

                        Similarly the various athletes and actors who are handed large amounts of money from tallent which doesn’t involve money often make headlines in “what not to do”. Worse, it’s so bad and so common it doesn’t much make the news any more. With basketball/football the expected result is a mess, and that even with lots of institutional support, experience, and attempts at training.

                        Handling great wealth is HARD. Much harder than we like to think.

                        On the other side, i.e. earning great wealth, there’s research suggesting it’s a lot easier than we like to think.

                        Stanley and Danko are researchers who profiled enough millionaires to see what ‘typical’ means for the breed and then turned their research into a series of books starting with, “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy”. It’s 20 years old now (so having a million meant more) but it’s still worth a read because it describes how people think and function. It’s actual data and not just ideological speculation, the results are counterintuitive.

                        https://en.wikipedia.org/wiki/The_Millionaire_Next_Door

                        The bulk of the 99% are in that group because they spend tomorrow’s money today. The bulk of the 1% are in that group because they don’t. There’s going to be exceptions on both sides but there aren’t enough lottery winners and professional athletes (etc) to significantly change the statistics.

                        The 1% are outliers mostly because of their behavior, not because of their luck. We lose sight of that because the 1%, as a class, are boring. Because the media focuses on interesting people who are anomalies our intuition says these anomalies are average.

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                    • Yeah, I’m not saying anything about what a person deserves as compensation. I would prefer to stay far away from that. If you can convince someone to pay you $1M/yr or more for your efforts, more power to you.

                      What I am saying is that the higher up the pay scale one ascends, the more likely their compensation is disconnected from the value their labor adds, and more connected to other factors, such as name recognition, risk mitigation, or less savory things like ‘old boys club’ or corruption and graft (or other factors disconnected from actual labor on the part of the individual that I am not thinking of).

                      Now, of course, in any such set, you will have true top performers. People at the very far right of the bell curve. The Michael Jordan’s of the world. People who have that unique combination of intelligence, discipline, talent, and effort that allows them to ascend to a pinnacle of human achievement. The kind of people you would literally have to kill or severely disable (significant physical and/or mental impairment) to prevent them from being wildly successful.

                      But such people are at the far right tail. They are the outliers. And they are the truly ‘unique’.

                      Most highly successful people are highly successful because opportunities aligned for them and they were smart enough to take them. This is not to suggest that such people are undeserving of their success, or had things handed to them without having to put in effort (although we know such people exist, they too are an outlier and a very small percentage of the < 1%), but rather it's to say that there is always a healthy amount of luck involved in success. Having an opportunity open for a person, and recognizing that opportunity, and being able to act upon that opportunity at the time, all involve some amount of luck.

                      For instance, I joined the Navy. Conscious act on my part. Taking that action opened up opportunities with the Navy that did not exist for me before. I signed up at the start of December in 1992 and I was slotted to enter basic training the following April as an Aviation Apprentice. Ten days later, I got a call that another recruit had failed his physical and his slot was open. It was a contract for a ships engineer, Gas Turbine Tech, starting basic in three days. I took it.

                      At the time, I was living at home, having moved back in anticipation of entering basic, so I didn't have to break a lease, or quit a job, or drop out of school. I didn't have a dependent I would have to make arrangements for while I was gone for 2-3 months. I had the ability to jump on that opportunity. Taking the contract meant I would leave Gas Turbine 'A' school with a rating, which meant I would be able to get directly on the promotion path. I ran with that and made E-4 in 18 months (damn near as fast as I possibly could). Making E-4 was tough, but luckily I had crew mates who worked with me, spending their free time to prep me for the exam. Getting to E-4 that fast opened up other opportunities, and on and on.

                      I was lucky to be offered the contract, I was lucky to be able to take it, I was lucky to have generous crew mates, I was lucky to survive my motorcycle wreck, I was lucky to be medically retired with full benefits, I was lucky to get into a public Ivy, and on and on. Yes, I busted my ass in the Navy, and in school, and in my career, and that hard work certainly helped to make my own luck and opportunities, but hard work is merely a necessary, not a sufficient, condition of luck[1].

                      Luck plays into our success in myriad ways, and except for those folks at the very far end of the curve, we should not kid ourselves that anyone who is successful is uniquely suited to it. There are many, many other people who have the ability and talent[2], but who, for whatever reason, just weren't as lucky to have an opportunity open for them that they could jump on.

                      [1] One of my peers in my LCAC detachment worked just as hard as I and was way, way smarter than I. He was also black. One of the senior petty officers in our detachment was a nasty racist, and did everything he could to stymie the careers of African Americans and Hispanics. He managed to bump my peer out of my testing cycle and forced his career to stall for 6 months. It was a minor setback, and I know that my peer rocked his advancement exam in the next cycle, but it's indicative of how hard work can still fail if someone wants to hold you back, or just really wants to make sure an opportunity goes to someone else.

                      [2] I am sure there are lots of people out there who have the intelligence, talent, and discipline to be medical doctors, but the number of doctors is kept in check by various PTB. This doesn't mean that everyone with an MD is uniquely qualified to be an MD, and everyone who isn't, couldn't possible have what it takes; but rather that they are the people who happened to be allowed to ascend to that position. The same goes for professional athletes. There are only so many slots on a given team, and only so many teams. That doesn't mean that there are only X many professional grade athletes in the world, only that those who are professional athletes are the ones who were able to get noticed by a scout, or find an opening on a college or minor league team, etc. You also have to acknowledge that once selected for a team, a pro athlete is able to focus all their attention on becoming a better athlete. No more working a 9-5 job, or going to class, etc. In short, if every single pro football player decided to retire on the same day, the NFL would easily find sufficient qualified athletes to fill the teams.

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                      • What I am saying is that the higher up the pay scale one ascends, the more likely their compensation is disconnected from the value their labor adds, and more connected to other factors…

                        I won’t say that this is untrue. I will say that it posits a not particularly accurate theory of labor value and it’s also misses the point. Sure, luck is a big part of anyone’s story, both good and bad luck, but luck tends to be distributed randomly and, more importantly, there’s not much that we can do about luck. What we can do is to help people to get into positions where they can weather bouts of bad luck and exploit good luck to maximum effect. When you look at the lives of people who have done well in life, that’s what tends to make the difference. As points out, there is a relatively simple formula for getting into the 1%: avoid life-alteringly bad decisions, maximize your income, consume less than you make, use what you don’t consume to acquire productive assets.

                        As for performance at the highest of high levels, the 1% of the 1%, it’s not about whether people have what it takes or not. Having what it takes is the minimum. What separates the people who succeed at those levels from the people who have or had the potential is that the people who succeeded got up every morning and executed. No doubt they got some lucky breaks, but again, that zeroes out over the course of a career.

                        Your NFL example is a little weird, because there have in fat been NFL strikes and lockouts, as well as in other professional sports, and there is always a noticeable decrease in the quality of play and a fall in revenue.

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                • To be clear, you are focusing on “the part of the 1% that got there after spending time in any other percentile.”

                  I’m curious what percentage of the 1% that is. And, further, which percentiles they hailed from.

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                  • Well, the biggest problem with working with the various deciles is that you can’t put more people into any given decile without either moving people out of that decile or making all of the other deciles equally bigger.

                    I think that the goal is to make it so that people start out in one decile, move up to another in their late 20s, move up to another one in their late 30’s, move up to another one in their 40’s and 50’s, then start sliding down into retirement, making room for those in the deciles below.

                    When I did research on the minimum wage a million years ago, I found out that a pretty hefty majority (like 75%) of the people who made minimum wage were 25 or younger. Which, I think, holds with that.

                    But I don’t have harder numbers.

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                    • We should also always keep in mind the difference between the percentile in terms of income vs the percentile in terms of wealth.

                      For the top 1% they are perhaps largely congruent (esp over a multi-year avg)

                      But probably not congruent for say, the top 20%.

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                      • If we’re talking about wealth, we’re suddenly in situations where everything is a lot stickier.

                        (The weird thing is that the wealth that is simplest to create and distribute (i.e., education) gave most of its benefit due to a scarcity premium so the benefit that it bestows remains hugely beneficial on a societal scale but, on an individual scale, it ain’t worth as much as it used to be. Well, without getting into the whole issue of whether a degree in underwater basket weaving qualifies as “wealth” in the same way that a degree in STEM seems to.)

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                    • I’m not asking about moving people between deciles. In your original comment, you specified that you were talking about people who got to the 1% after spending time elsewhere along the spectrum. And there is probably lots of interesting stuff we could learn by looking at that group.

                      But how much of the 1% is comprised of such people? 50%? 90%? 1%? Trying to understand the 1% by learning about the people who made their way into the 1% might not be very helpful if they only make up a small percentage of the overall group.

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                      • I have no idea how many of the 1% are people who used to be members of the 2%, 5%, 10%, or 25%.

                        People point out stuff like how Bill Gates had parents that were upper middle class. It’s probably a lot easier to jump to “richest man in the world” from “upper middle class” than it is for someone who is “upper lower class” to jump to “lower upper class”… but, as you said, you’re not talking about jumping between deciles.

                        I think, ideally, we want the top 1% to not be particularly sticky. That is, it’s a percentile that people wander through and then leave in order to allow others to wander through it.

                        But the more of that there is, the more churn that that indicates and I don’t know how good that sort of thing would be.

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                      • Trying to understand the 1% by learning about the people who made their way into the 1% might not be very helpful if they only make up a small percentage of the overall group.


                        If memory serves, roughly a third of the 1% are new in there the one year I found data, implying that some of this is fueled by rare events or choppy income.

                        Thing is I don’t trust my memory and that was based off one year so it’d be one data point.

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                          • I was thinking about how the “mid-range” of the wage scale would be like way, way, way out to the right, probably in the .1% or .01%. Which is more trivia than anything. Probably?

                            And then that had me thinking about how much that was connected with there being a lower bound for wages ($0) but no upper bound.

                            Which then got me thinking about whether people have negative income/wages.

                            And I thought of people who took use losses of one kind or another to offset income, possibly to the point of having negative income.

                            And I thought that seemed like BS.

                            And then I thought that, consequently, treating positive income that come from those same mechanisms as something other than BS was probably hypocritical.

                            I decided to stop thinking about all that then.

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                            • Which then got me thinking about whether people have negative income/wages.

                              Yes. Oh yes.

                              And I thought of people who took use losses of one kind or another to offset income, possibly to the point of having negative income.

                              It won’t take you to negative income, but it will to zero. However those loses were real and hurt a great deal when they happened. My small company failed, it did not grow, it caused a lot of personal economic damage. My economic activity was negative, same as if I took bundles of cash and set them on fire.

                              That’s the really nasty part of entrepreneurship.

                              Comparing Bill Gates (or someone like him) to the bottom 1%, or the bottom 10% or whatever is rhetorically intended to suggest that Bill is too successful. Bill had an insane positive economic impact, he created vast wealth, jobs, etc. Prevent him from being created and some other country assumes that role and that vast wealth gets created there.

                              Let me repeat, my economic activity used to be negative. Doing *nothing* would have been better that that. I would have been better off, and the country would have been better off, if I’d dug a hole in the back yard and hidden the money for a few years.

                              Bill’s wealth is actually fair, the problem is on the other end. If you want to make the country better off, figure out how to help the bottom X% more productive.

                              Eliminating the rich is just an effort to hide that we don’t know how to do that. The bottom X% will look less unproductive if the top X% don’t exist.

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                              • My small company failed, it did not grow, it caused a lot of personal economic damage. My economic activity was negative, same as if I took bundles of cash and set them on fire.

                                I feel ya. I’m in the process of sweeping a bunch of those cash ashes up into tidy piles so I can do regular work again myself.

                                Of course, if had gone the other way, I can’t help but wonder how many of the people who genuinely empathize and say, “Bummer, dude,” would be saying, “Fuck that guy. What did he do to make that pile of cash?”

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                              • he created vast wealth, jobs

                                This phrase needs to be buried, or at least sufficiently mocked that it becomes a punchline.

                                The correct version of it is:

                                Gates had a series of novel ideas, and was a skilled manager of other skilled managers, at the top of a massive organization of highly skilled and clever people, all of whom worked together cooperatively to create a valuable product.

                                The ideas occurred in a highly prosperous society of middle class people who used their middle class disposable income to purchase these products, creating a feedback loop of jobs and wealth.

                                What makes this important, is that asserting that Gates “created jobs and wealth” disconnects him from the entire massive machinery of consumers and prosperity that Microsoft depended on.

                                If Gates was truly a disconnected genius, magically churning out Jobs and Wealth singlehandedly, then it follows that we could parachute him into Haiti or the Congo, and his miraculous Job-Creating Machine would bring prosperity and happiness to the natives there.

                                The “Imma take my genius to Galt’s Gulch where folks appreciate me!” schtick ignores the fact that wealth creation is only possible by the very society that these folks complain about.

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                                • wealth creation is only possible by the very society that these folks complain about.

                                  If you want people like me to be willing to burn most of my life savings to risk creating wealth, then you need to let me keep it if it works.

                                  Taking my money and setting it on fire is insanely risky but only somewhat rewarding. Getting rid of the reward will cause problems.

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                                  • If you want people like me to provide police protection for your business, we have to believe that there is a benefit to us somehow..

                                    See how this works?

                                    Its like society consists of a negotiated set of norms and agreements and mutual interdependence. Everyone has a stake in the outcome, and a legitimate demand to be fulfilled.

                                    Societies that can’t successfully negotiate the various demands and factions, are poor.
                                    Those that can balance those needs and interests, create jobs and wealth.

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                                    • There is a segment of people that don’t want you to provide police protection for their business; they’ll just pay them directly and cut out the middlemen. (And the ‘police’ will like the deal because of potentially greater pay and definitely fewer rules)

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                                      • I don’t believe that.

                                        That is, while I believe there are people who carelessly say that, but like the drunk at the end of the bar, they aren’t actually willing to get up the next morning and carry out that idea.

                                        As evidence, I submit that there are countless places in the world where they could easily put that into practice, yet they always find reasons why they need to stay put in the warm comfortable confines of civilization.

                                        I suspect what they really imagine is that the government and police somehow vanish but (magically and mysteriously), the rest of the order and structure of modern prosperous peaceful civilization would remain intact.

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                                    • If you want people like me to provide police protection for your business, we have to believe that there is a benefit to us somehow..

                                      See how this works?

                                      Yup, I see exactly how it works. Strange though that in our popular political discourse, this counts as the progressive, enlightened and charitable viewpoint, while folks who want the government to let people keep more of their money are labeled selfish and greedy.

                                      Personally, I’m happy to pay for police protection services regardless of whether I am personally benefiting, because I believe that police protection is one of the things that government ought to be doing. Less crime is a good thing, irrespective of my personal feelings about the potential victims of crime.

                                      It’s kind of fun to think about what a similar thought process would look like if filtered through different ideologies. Like:
                                      “If you want people like me to provide police protection for your neighborhood, we have to believe that you’re not all a bunch of thugs killing each other and disrespecting police officers.” or
                                      “If you want people like me to fund social services in your community, we have to believe that you’re not all a bunch of lazy, drug addicted welfare queens.”

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                                    • Where are you going with this? You’re trying to portray Gates as a very small part of his own success, perhaps even a bystander, and you’re also apparently pushing back on the idea that there should be a reward for risking your own money beyond what society gives everyone.

                                      Creating companies, jobs, and wealth is tremendously important, and hard, and risky. I wouldn’t have put my life savings in harm’s way if “society” was waiting in the wings to claim credit for my success and take the wealth I was trying to create.

                                      You tell me what the rules are, I’ll tell you what my actions are. So what are you suggesting the rules should be?

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                                      • As I said elsewhere, the rules should be shorter and more tightly written IP laws, and more progressive taxes.

                                        The fear that innovation would fall is IMO, greatly overstated.

                                        I’m imagining Gates and his friends back in the day when they were writing DOS.
                                        The Ghost of Christmas Future visits and tell him:

                                        “I bring you good news and bad news.
                                        Microsoft will become the most wildly successful company ever, transforming the world, making you an icon of achievement written in history forever;
                                        However, a radical named Chip Daniels will make it such that your maximum personal net worth will never be more than one billion dollars.”

                                        And Gates throws up his hands and walks away in disgust.

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                                        • a radical named Chip Daniels will make it such that your maximum personal net worth will never be more than one billion dollars.

                                          You really think you can implement a 99% taxation rate and no one will change their behavior? Seriously?

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                                            • What do you think would happen? If let’s say, we instituted a maximum personal net worth of a billion dollars, with everything above it forfeited to taxes?

                                              There are 540 billionaires in the United States, with a combined net worth of $2.399 trillion, according to our 2016 list of the world’s richest people. (Google)

                                              I think about 2 Trillion dollars flees the country(*), and we’ve just eliminated an entire ecological-species in the economy. This isn’t a group of Scrooge McDucks with piles of money just lying around waiting to be taxed, so there’s going to be a lot of economic damage. I think that money is being used for things like startups right now, angel investors, that sort of thing.

                                              I remember a guy who professionally invested in wild-ideas-which-might-become-the-next-Google and he said the hardest part of his job was finding a Billionaire who could/would finance the setup. The Gates Foundation also just disappeared.

                                              (*) I also think we find out what kind of “loopholes” 2 Trillion dollars can buy in terms of political influence so the odds of the money successfully fleeing the country are pretty high.

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                                              • …after thinking about this, it gets worse.

                                                Future Microsofts, Facebooks, Apples, etc would face UGLY choices. Flee the country, only invest overseas, engage in weird restructurings, or something else.

                                                We’re getting rid of the most productive people in the economy, there’s going to be nasty consequences.

                                                And yeah, I know you object to calling Gates (etc) “the most productive”, or think it’s luck or something. But if you’re not allowing Gates to have his 90 Billion dollars then the expectation should be that money never gets created, and there’s a lot of other Billions which are piggybacking on his Billions.

                                                I think Microsoft stays a medium sized company and something overseas takes its place, so all of Gates “missing” wealth is created and taxed overseas. Fun fact, Microsoft paid $3.11 Billion in taxes in 2011 alone, this doesn’t count the taxes paid by any of its employees.

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                                                  • To where?

                                                    Facing a 100% tax rate? Probably “anywhere” is the answer. I get the feeling you think this is hard to do and unusual. It’s actually easy and common, it’s why Ireland makes the news as a tax haven and why so many Fortune 500’s have some kind of presence there (note that’s with only a 35% tax rate, you’re suggesting a much higher one).

                                                    Let’s go over an example.

                                                    My Fortune 500 company makes investment choices. Sometimes we purchase a company, sometimes we purchase technology, sometimes we expand a plant or other type of building, sometimes we move stuff around.

                                                    All of this can be done internationally, none of it HAS to be done locally or even inside the United States. For that matter the CEO doesn’t HAVE to be an American, and our corporate headquarters doesn’t have to be in the US. We already make overseas investments, we already have overseas employees and management.

                                                    You’re putting a 100% tax rate on the guy who decides where investment happens if his investment is in the United States.

                                                    And what is keeping them from going, right now?

                                                    Let’s put it this way. If I paid you ten million dollars, would you move to England? 100 Million? 1 Billion? 10 Billion?

                                                    How about if I also told you I was going to confiscate every asset you have over a thousand dollars?

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                                            • What happens on capital gains outside of my control? The stock market pushes me up to where I owe $100M in taxes this year, to drop me back to the $1B limit. Then next year it drops my net worth to $750M — do I get my $100M, or some fraction thereof, back?

                                              I am opposed to things that privatize profits and socialize losses. I’m probably also opposed to things that excessively socialize profits and privatize losses.

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                                        • If you knew that your investment would pay off wildly, you would do it regardless of taxes.

                                          The reality is that your investment may or may not pay off, and it almost certainly won’t pay off wildly. In fact, if the expected payout significantly exceeded the expected payout of just working for somebody else, everybody would be doing it. Instead, it’s more like, “How well does this need to go in order for it to be worth more than sticking with my safe job that pays a salary with 100% certainty?” If you need to factor in that you’ll get to keep 80% of the proceeds vs 50% vs 20%, the calculus changes pretty dramatically.

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    • “…it’s more likely that the 1% wins because they constitute a group of people who are very good at doing whatever it is that they do…”

      More likely than what?

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      • More likely than the present state of things being the result of some guy writing a secret memo in 1971.

        But look, I am being a bit facetious here. The first paragraph of that article is much more insightful than my comments give it credit for being. That said, he starts with an admission that the 1% general have a clear view of the economy and then, ironically, goes on to posit his own decidedly fuzzy view.

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  15. @will-truman

    I am excited to report that, because I have an account with UPS (nothing I pay for), I was able to re-route a package that was accidentally sent to an old address. I could have it sent to a new address of my choosing for $5 or a UPS store around the corner for free. I opted for the latter and will get a text when it arrives.

    I’m not sure if the sender (Barnes and Noble) had to authorize that somehow. They claimed they couldn’t reroute the package, but that just might mean they aren’t willing to reroute. It is possible they authorized UPS to give me that option if I jumped through the proper hoops. Or maybe just UPS now allows that. In going through the process, it did seem like it was an option that wasn’t available in all cases, but when I realized it was available to me, I was happy to avail myself of it and didn’t probe further.

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      • I’m also somewhat amazed that the GOP candidate and the Virginia GOP are accepting this one vote victory as a fait accompli.

        (I mean, I think they should accept; I’m surprised they are actually doing so without additional court challenges. I’ve always thought that an incumbent should have to win by some discrete amount over merely ‘more’ votes)

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        • I’ve often wondered how this works. I assume that a recount is a recount and that’s it. Otherwise, with a margin that thin, they’d just keep doing recounts and flipping the result with roughly a 50% probability every time forever.

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  16. Good news: CHIP renewal won’t happen this year. Maybe at the start of the next year. Some states will stop accepting new children. Funding ran out at the end of September but priorities have to be set and health care for children doesn’t stand a chance against all those hearings about the tax bill.

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