August 31, 2010

Fair Tax, or not Fair Tax

I have made no secret that I support the Fair Tax. It has some really wonderful components that I think would be an overall boon to the whole country. Unfortunately, it really doesn't have support from across the whole political spectrum like I would have expected it to. And, here is the thing. I was originally attracted to the fair tax for five main reasons.

The first reason is the prebate it gives everyone. It isn't a huge amount of money, but enough to make a difference for the poor. Now, for the richest of Americans, what they would get for the prebate wouldn't even be pocket change, but there are some of the poorest Americans who live on not much more than they would be getting in their prebate, therefor it would almost double their available finances. Anyway, that was the first thing I liked about it. It helped those in need, but it helped everyone the same amount without taking away their freedom.

The second reason is that it eliminates the regressive, ineffective, and punitive payroll taxes. Lets face it, payroll taxes suck. And the only people who get out of them are those who make too much. Replacing it with the consumption tax would make it much more fair for everyone and less punitive, especially for those who are self employed.

The third reason was the nature of a consumption tax means that I get to decide how much I get taxed. If you don't like getting taxed, reduce your spending. But, with it being an inclusive tax, you don't have this big add-on at the checkout stand, it is just there, but since it is a standard rate, you know exactly how much you are paying in taxes, but you don't have to file a tax return, and you don't have to worry about some IRS auditors making your life hell just because you added something wrong.

Fourth, simplicity. No tax cheating. You pay by buying stuff. It is the only tax you pay. It gets rid of all those layers of tax garbage that we currently deal with. The tax code is possibly as short as a single page.

Fifth, economic stimulus. Our products are too expensive overseas, so we don't sell as much, and other countries products are too inexpensive here for us to want to buy our own products. If the we sell our stuff overseas, the cost is high in part because of all the layers of taxes that are rolled into the costs. Theirs are cheaper, cause their taxes aren't as much. But with the fair tax, suddenly, they lose the benefit and we gain it. Sure, we still have a higher standard of living, but it eliminates a disadvantage that can be as high as 50% of the cost of goods. We sell ours for about 23% cheaper, and theirs cost about 30% more, and all of a sudden, our goods are much more competitive, if not cheaper for better quality goods.

So, in all of this, I have looked into the fair tax, and understand the economic advantages, and the only thing I couldn't understand is why there was such lopsided support. I decided to write a blog post about how liberals and progressives should be coming out in droves to support this thing. I first decided to do some research. has a calculator that you can use to determine what you would be facing under the fair tax. I have used this to figure how it would have affected me before I shut down my business and sold my house, and again after everything kind of imploded and I lost everything, and based on how much I expect to be making now that I am closer to getting back on my feet. Each time, things are quite a bit better for me under the fair tax.

For my research however, I decided I was not typical in terms of economic conditions, so I created Joe Doe. Single college age kid but not in college, working for $9/hour in a dead end job and not sure what he wants to do with his life, but he is having fun right now. Well, guess what? The fair tax was not as fair to Joe Doe. "Wait a minute," I thought, "That can't be right!" Well, I double checked the calculations, and guess what, if you are really close to the average, it isn't such a great idea for you. Not terribly worse, and in the long run, you would still probably benefit due to the other features, but I thought this thing was supposed to be progressive. Well, what if we give Joe a couple more years, a wife and 2 kids. Well, it got even worse for poor old Joe. That doesn't sound very fair to me. I mean, sure, I benefit greatly, even when things are really bad for me, but us independently minded entrepreneurs don't represent mainstream America very well. Joe is the definition of main stream America, well, the poorer side of it, anyway.

So, am I saying that I don't support the Fair Tax anymore? No. I just don't support it as enthusiastically as I did before. There are 2 or 3 main things wrong with the current configuration of the Fair Tax.

First, the prebates need to be bigger, a lot bigger. Like, try double. If you need to raise the overall rate to cover it, then do it, but first try the other two suggestions.

Second, education (and I work in the education industry) needs to be taxed the same as everything else. Education does not really help people become more productive. That idea is just industry marketing doing its job.

Third, all investments need to be taxed, but at a much lower rate, something like 3% to 5%. Not so much that it becomes a bad thing to invest, but enough so that it takes most of the vampires out of the system and causes the stock market and other investment systems to become much less volatile. Then you wouldn't have non-productives leaching on the rest of the economy. Those making long term investments would hardly even notice it. Day traders, on the other hand, would have to go find real jobs.

These changes would make for a much more "fair" tax, and be supportable by more of those who are not on the extreme right of the political spectrum.

August 24, 2010

The resurgence of the local community?

Today, I was reading an article that referenced "the widespread 'work at home' phenomenon". When I read that, I pictured in my mind a neighborhood, well, actually, the neighborhood where I currently live. I pictured all, or almost all, of the people who live here working from home.

In such a scenario, who would their personal interactions be with. Well, first of all, they would still be with their co-workers, but at a more formal, less personal level. Sure, there might be those who "hit it off" virtually, but I have found myself, after working in a digital nature at least in a small degree for more than 10 years, that the virtual friend phenomenon is wearing thin. So, I actually spend quite a bit of time, when I am not working, out in my neighborhood. Unfortunately, most of my neighbors do not work from home or are still mesmerized by the whole virtual friend concept.

But, imagine with me, a few years down the road, a majority of people are working from home, at least part of the time. When they are done with work, what are they going to go do. Go to the most local stores, restaurants, theaters, and parks. In doing so, they will begin to see more of the same people all of the time. I can also see that, as the virtual and extended world becomes increasingly complex, people are starting to desire to simplify their lives more and more. They don't want to chase all over the place. At the same time, they have spent all day in the house, so what might they do? They go outside. They work in their yards or go to the park.

I almost never go anywhere anymore. I go to the store or the bank a few times a month, but most of my personal transactions are handled online. What do I do to get out of the house? Well, we have a really nice park down the road a bit. I go there almost every day. If not there, I love to sit on our deck and enjoy nature. We have a really shaded back yard and it can be very relaxing and therapeutic. My wife and kids are getting to where they like to do many of the same things. We had water fights in the back yard many of the hottest days of the summer. Not sure what we will be doing here during winter (we didn't live here last winter), but I hope the trend continues. Unfortunately, I don't know a lot of the other people around me, but I have met a couple. Most people haven't uncluttered their lives to the point that they spend much time in their neighborhoods, but I am seeing what could be an early trend.

It is probably being too optimistic, but I can picture most people staying closer to home and spending their free time with more of their neighbors. We could get a resurgence of traditional local communities even though most people don't work "locally". They still would work from home, and so who they interact with will be their local community. Sure, just as local communities in the past had complications and all the fun features whenever you have a lot of interaction between people, such new local communities will sometimes be frustrating, but they will offer a richness of relationships and interaction that has been too rarely experienced in the modern world.

August 20, 2010

Industry Acceptable Innovation

A while back, I was talking with a friend of mine that is almost always got his fingers in some form of disruptive innovation or other. Since then, I have thought a lot about some of the things he told me, and I think I have come up with a new (or at least, new to me) concept, relating to innovation and what could be successful or not. In any industry, there are major forces at work fighting innovation. I am not talking about incremental evolutionary changes, I am talking about the big, in your face, revolutionary innovations. There are many of these forces, some of them from somewhat surprising sources.

Lets say you were to invent a megawatt wind power generator that cost less than say, $5,000. That would be a very disruptive development. Why? Because it would require changes on the part of almost every other aspect of the energy industry. The current cost of approximately $1Million per 1 megawatt wind power generator unit tells you that things would change immensely. In this case, no longer would the investment for such generation unit be limited to major power players, investors, and idealistic billionaires. At that cost, they would be springing up all over the place, putting thousands and tens of thousands of people in the current energy industry out of work. Not that the industry would stand idly by. They would refuse to connect them to the power grid, and even then, they would require new wind generator users to pay for costly upgrades to the power grid. If that didn't work (and they probably wouldn't wait to see if it did), they would seek all sorts of legislation to make it both much more costly to own and run such a unit, and much more difficult to produce. It would be in their interest to make your supplies and manufacturing process much more costly and inefficient. They also would want a piece of the action as a way to hedge their bets, but with this much disruption, they would be more encouraged to buy up the technology rights and hide them (maybe use them, but only to the degree that it doesn't negatively affect their bottom line). What most innovators seem to forget, is that energy companies are not in the business of making energy, but in the business of making money.

One more example. Lets say I created a new ERP system that increased productivity by 10 times for those implemented it. Lets say I created it in such a way that it was 10 times easier to install. Now, lets say I price it very closely to the existing systems. Sounds like a no-brainer, right? Well, maybe. Most companies love increases in productivity. They especially like it in little bites. 10 to 40 percent productivity gains make a company just thrilled. But what would it mean to have 1000% productivity gains. Well, they are either producing 10 times the product or need 1/10th the workforce to produce it. The might decide to produce only twice as much with only 1/5th of the workforce, but the changes are extreme. People, and companies, do not like that much change. It hurts. It is uncomfortable. Not to mention, existing ERP providers wouldn't like my creation of such a new disruptive presence in their market. They would scramble to develop enhancements of their products to make them more competitive, but again, as we are talking about dollars being the main purpose and not product effectiveness, it would probably come to an attempted buy-out situation or extensive use of legislation, courts, and negative marketing.

Beyond the items listed in each example, I have heard that some companies or executives (but not most) get even dirtier, and do things like economic or social or even literal assassination to get the people involved to stop ruining their party. I have never been shown any incontrovertible evidence that this has happened, but I have heard at least one businessman say that he had taken out a contract on the life of someone they found particularly troublesome. Now, whether or not this is a common consequence of radically disruptive innovation isn't really the point. The point is that there is a limit to how radical an innovation can be in any given industry and any given point before it is too radical for acceptance by the industry and consumers. It therefore follows that there might be an optimal level of innovation for any industry at any specific point in time, and that the more that optimal level is exceeded, the more difficulty there will be in turning the innovation into successful products. Most industry sponsored innovation will usually be well within that acceptable innovation limit, and generally moves much slower than that.

August 19, 2010

Better news service.

I just got a CNN Breaking News email. The subject of the breaking news really doesn't matter, but it brought to mind some ideas. Some years ago, during some political something or other, I signed up with CNN to get their Breaking News email updates. They come in this nice little string of text with just enough information to let you know what is going on. I have learned that a Breaking News email update usually means that they now have a great article on their site for me to read if I want to know more. Most of the time, if it interests me, I want to know more.

If you are not familiar with their Breaking News emails, you might guess that it would include a nice little link to the related article or maybe a stub or topic page that links to all the related articles if it is an ongoing story.

Nope. Nada.

They have an unsubscribe link. They have links from the ads that they stick in them. But nothing to get me to their site so they can do their job of getting me to read more of their content. Come on people, my kid could program that. The whole concept of hyperlinks in emails is almost as old as the web. This should have happened 15 years ago. Think of the change to readership and the bottom line in terms of ad revenue.

I should probably thank them, though. If I clicked off to CNN every time I got an interesting Breaking News update, I would probably spend a lot more time on their site, and consequently, less time actually trying to be productive. That brings me to another point. More than half of the Breaking News updates I get, I don't care about. For some, yeah, I am sure they are interested, but different people have different interests.

Let me pick my interests. Please. I don't care about sports, or entertainment, and there are only a few sub topics that interest me in travel, health, and living. Come to think of it, I really don't care about most of criminal proceedings under the justice section either. Constitutional law, business law, and patent law, yes, but the rest of the stuff, just let me opt out of it.

Make a general list of subject tags, arranged categorically, and let me pick whole sections, sub-sections, or even individual subject tags, and only send me the links on those. If you did, I can promise I will click the link much more often. Yeah, that link that doesn't exist yet. I figure, if you can tailor my content to me, you certainly can make it easier for me to get to.

August 13, 2010

Big Water Projects

I am not a nature freak, and do not consider myself environmentally active. I see a lot of the environmental propaganda, and it usually ticks me off that they are so slanted and usually are either flat out dishonest, or leave out the full story. However, I do believe that we are stewards of the world we live in and will be held accountable for how we treat it. Furthermore, I think we as a species often do things that are less then optimal, simply cause we don't want to take the time to figure out the optimal or because we just can and we don't like anyone to tell us that we can't.

One such activity that can be handled this way are the building of huge dams and reservoirs. I can understand that we often have a need to collect and store water, and that a reservoir is often the best way to go about it, but too often, we are building these things for electricity and not for water storage. There is a better way. What brings this to mind are some articles I have read about the Belo Monte Dam Project in the Amazon. It is a hydroelectric dam, and not intended for water conservation. Unfortunately, it will destroy millions of acres of amazon rain forest. More so than that, the indigenous locals are completely against it. If they were all for it, well, even though the amazon is the lungs of the earth, it is their home, and really their vote should matter more than anybody else's vote.

Here is a better way, that won't cost as much, will be more resilient, won't take as long to start providing benefits, would destroy hardly as much amazon rain forest, and might even be well liked by the locals. In-stream generators. A large series of small dams or dikes which then sends the water through small hydroelectric turbines each involving a vertical drop of only a few feet, not more than 5 or 10. Yes, there would still be some forest loss, but a tiny percentage of what the current plans entail. Each dam or dike would be a small separate project, but would be able to be put in much faster. You still get the hydroelectric benefit, but now you have much smaller localized generation units, but in a mass quantity. If one has a problem, the others are still fine. They could also ensure a more regular flow without the flow stoppage involved in the larger dam. River wildlife would be virtually unaffected in the long run. Sure this is different, but wouldn't it be better than destroying so much precious rain forest? It would be a lot easier to replicate lots of other places, and could be scaled out to meet demand on a much more continual basis. How about it folks. Who is in favor of a better way?

August 12, 2010

Health mess continued

The health care debate has nothing to do with health care, but everything to do with money. Mostly, it deals with insurance coverage. It does nothing about the quality of health care and very little about the accessibility of health care. It doesn't address the problems with our pharmaceutical industry or with the FDA or with the shortage of medical professionals, or with any of a myriad of other health issues, except abortion and euthanasia, which aren't about health care, but religious and moral issues instead (we are not going there on this post).

I have seen many instances where the medical treatment offered was not the best available for the situation, but was instead based on how much money the practitioners would make. The bigger the size of the organization, the worse this seems to be, in general. I have however seen a fair number of cases where they practitioner is a small operation and they still push everything based on what is best for their finances rather then what is best for the patient.

I have had people tell me that the answer to this situation is insurance, but I believe it is just the opposite. I think that the insurance industry is the primary cause of this greed. Sure, there would be the small time medical scam operators that push their patients into something that either they don't need, or that is the most costly of the viable alternatives, but for the most part, before our insurance industry did their takeover of the health care system, practitioners did seem more concerned with the actual health and well-being of their patients.

Part of the problem is that the insurance industry has been making health care choices for all of us. The doctors don't really get the choice of the best treatments, just the choice of the best treatments the insurance covers. The patents don't get informed of their options, cause usually there is only one covered option. It no longer is about the best care for the situation, but about what the coverage is for the situation.

There are lots of examples where offshore clinics have far better care at a much lower cost, using much more advanced techniques. We don't have those options here, because even if the techniques are approved by our almost non-function governmental agencies, the insurance plans don't allow those treatments. They say they are trying to save us money. I have a hard time believing it. I have seen a system wide case where the US health care industry continues to do thallium treadmill tests to gauge arterial blockage, when other tests exist that are more than twice as effective, cost less than a fifth and often less than a tenth of the cost of the thallium test, and are usually up to five times faster. I say system wide because I have seen it happen to multiple people, in multiple states, in multiple hospital systems.

I have also seen and heard of many instances where the doctors (the good ones) pull people aside to a corner and whisper that what they recommend is some kind of do it yourself homeopathic or over the counter treatment, but that they have to issue this prescription or that. I even had one doctor explain that they have a quota that they have to meet in prescription writing in order to keep their license. I don't know the validity of this claim, nor the mechanism it would work by, but just the very mentality of the industry pressuring doctors to always prescribe the latest drugs in the maximum of situations leaves me thinking that the whole thing is just another corrupt system of greed.

We need some kind of impartial informing diagnosis web based system, perhaps not to be required use for doctors, but freely available so individuals can at least see what their options are and to get a non-biased second opinion. Sure, such a system would not be able to write prescriptions, nor would it recommend courses of treatment, but it could show possible diagnoses with all the known courses of treatment and what forms those treatments take. It could even show experimental treatments and list locations where different treatments are available. It could also show how reliable various treatments are shown to be. To put this together would require the input of many people, but if it were built correctly, it would be a learning system. Therefore, it's diagnoses would increase in accuracy over time. I can even picture it being a valuable resource to doctors, regardless of their expertise, experience, and training.

August 10, 2010

Seatbelts and Freedom

I wear my seat belt when I am in a car. I think you should wear your seat belt when in a car. But I don't think I have the right to tell you to do so. In our country, and across the world, we have a lot of concerned individuals. They, like I, think it is just tragic when someone dies or is badly injured when it could have been easily prevented. However, are we going too far in making every safety precaution a legal obligation? Benjamin Franklin is known to have written "They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety."

This is exactly what is going on. We decide that we need temporary safety when we get in a car, so we mandate that individuals no longer have the choice to use a seatbelt, but that they have to or else... (they get fined, etc.). They now have temporary safety. What they have given up is freedom. According to Dr. Franklin, they therefore deserve neither. Is freedom really that important. History has shown that without it you get tyranny and oppression in unequaled severity. Is that what we are heading for. As a student of history, I have to conclude that yes, we will get to that point. Sure, it probably won't happen overnight. But it will happen.

That sounds bad, but if we shouldn't mandate intelligent behavior, what then can we and should we do? Also, what is appropriate in terms of laws so that our society functions. Since we are using traffic laws as an example, lets continue with them. Should we have speed limits? Why or Why not? What about required stops at stop signs and stop lights? How about lane changes? What should we do about them? Obviously, there has to be some kind of regulation to ensure that our traffic system functions, but does that logically extend to forcing people to wear their seat belts? Perhaps we call out the difference in that it doesn't affect other drivers or passengers in other cars if I don't wear my seat belt, so therefore, it shouldn't be a law.

Seat belt usage still is desirable, though, cause it certainly has a positive outcome for society. So what should be done about it? How about public education and encouragement programs? How about seat belt billboards quoting the smartness of it, or the statistics of how smart it is? I think much of our mandated laws could be converted to educational programs. No force, but it would be something that people would know. Then we could have both freedom and safety, and be deserving of both.

August 6, 2010

Back from the dead

Ok, I admit it, I have dropped off the face of the earth. Well, actually, life happened, and I keep meaning to get back here to post some more. Well, amongst all the other things going on, like a lot of trips to the hospital due to my wife's preterm labor, I finally have a new job. I am now working as a content developer for a company called Socratic Arts. I was supposed to start as a project manager for them, but that project fell through, and the next one needed someone local to the New York City Metro area, so I got the content developer role instead.

Well, in the mean time, I have added another blog that comes from the president of my new company. He is a really incredible thinker. I also added a list of recommended sites for further reading. Really, you should read those sites. Well, at least as much as you have time for, but the information is quality. I have only read the free chapter of the startup book site, and I figure, once I have done everything in that first chapter, then I can worry about the rest.

Well, that is the latest update from me. I hope to get back to making regular posts on here so you have more to think about. After all, I am sure you of all people wouldn't be suffering from information overload. That is just for the rest of the folks. :)