Sunday, February 14, 2016

Unintended Consequences

About 50 years ago, the UN showed farmers in northern Africa how to more effectively farm the land and use fertilizer. It worked great. Farm production doubled and because of the abundant food, the population doubled overnight. There was one little thing that no one noticed. Each family needed firewood to warn their huts and cook their meals. It doesn’t seem like a very big thing, to be concerned about, but the area was running out of trees. Then the rains came. With no trees to control the runoff, the farmland washed away. Starvation ensued.

A solution to one problem can create unforeseen problems. Raise the minimum wage to $15 per hour and you bump into the term “Shadow Labor,” like self-serve checkouts where you ring it up yourself and bag it. I was at Ralphs supermarket a while back waiting for the cashier to ring me up and a store clerk told the gentleman behind me that the self-serve island was open. He must have been a union man because he cracked me up when he said, “No thanks, I already have a job.”

The 15 dollar an hour wage increase was to give the worker a better standard of living, the net result, less employees. Even worse, with mandatory health care, most jobs went to a 30-hour work week. And of course, the employer could move the factory overseas, and not worry about all of the government restrictions and taxes. Last Thursday, Carrier Air Conditioner announced that it is moving to Mexico and 2,100 jobs go with it. I guess moving “overseas,” is a misnomer. Mexico and Canada are right next door.

The newest thing is negative interest rate policy that is being pushed worldwide on the banks. It’s a little like telling hookers that they have to pay guys to have sex with them. The concept doesn’t float at that level for the simple reason, there is nothing in it for them (naturally I’m referring to the banks ;>)).

We have a drought out here and everyone has been asked to cut down on water usage. Our area in San Diego cut their water usage by 25 %. Net result the water company sold less water and their fixed costs did not go down, so our water bills increased as a reward for using less water.

We tried to bomb the dictators out of the Middle East, and give them Democracy. What did we get? Anarchy! Democracy is not something you can pass out at a pep rally.

Changing the school lunch program to be more healthy and force every student to eat whole wheat, and have a fruit with each meal, created incredible waste. Not to mention kids left the school to get something "Real" to eat. People don’t get fat eating food that doesn’t taste good. If it doesn’t taste good, don’t eat it (and that advice is a couple of million years old).

Oil prices have dropped dramatically and we are still adding 10% ethanol to each gallon. Ethanol gives lousy gas mileage, eats the hell out of the fuel system, and makes our beef steaks cost more. You can’t take a well fed car down to a slaughter house and get prime rib or steaks out of it, only easy monthly payments; miss one and pay the rest of your life. Some of our biggest ethanol producers are family of some well know Congressmen. The irritating thing is that everyone whines about gas prices, but most people have no idea of what they pay for steak, they just drop it in the shopping cart.

The great government program to help our kids get a college education has given a lot of them a financial education that will last their entire lifetimes.

Then we have the new health insurance for everyone. If you can’t afford it, the government will want to know everything about you for you to get it free. And when you file your taxes this year, you have a new form to show the IRS, your 1095-B proof of health care coverage.

The national debt is approaching 20 trillion. The average American thinks, government budgets have worked ok so far, the people in charge must know what they are doing. I guess, if you have that sort of faith in government, you don’t need to go to church every Sunday. What you save in church tithes, will make up for the interest lost on your 401k.

Do you get the feeling, that if big government left us alone, we could manage just fine? Of course listening to the election debates, the last thing anyone of them wants to do, is leave us alone, they want to give us something. The only thing that worries me, is that we may get everything we ask for and something we didn't, a Banana Republic.


Sackerson said...


Jim in San Marcos said...

Hi Sack

Your a man of few words. Thank you, you made my day.

Sackerson said...

1. Work crisis.
2. Leave us something to say.
3. Problem is globalisation. Freedom and democracy and small government in one country, works; once the canal locks are all opened simultaneously...

dearieme said...

Universal franchise democracy, plus a welfare state, plus unrestricted immigration can't possibly work.

Anthony Tan said...

Great write up Jim, like the old saying, the road to hell is paved with good intentions.

Jim in San Marcos said...

Hi dearieme

We are in agreement, the problem is, the people in control are burning the candle at both ends. It kind of works until it doesn't.

Jim in San Marcos said...

Hi Anthony

Thank you. I just hope this is water behind the bridge and things improve when your generation approaches retirement.

Anthony Tan said...

Hi Jim,

personally I don't believe things will improve, the golden age of mankind is behind us. We live in a finite world with finite resources, man kind should be looking at sustainability instead of growth and GDP. Our current financial system (usury and debt based money) is simply not in line with reality. It's also why all governments are so obsessed with growth, the moment you can't have growth, it all collapses.

Throughout the world, you'll hardly find a nice, humble and wise ruler/government. Nice people work behind the scene to better the lives of people, they are not interested in the limelight and power. Psychopaths crave it, and will do anything to get into power. For democracy to work, you'll need a well educated, wise and hardworking citizenry. This is not in the interest of the psychopath and they would rather have a dumb down and distracted citizenry and reduce the society to bread and circuses.

Technology will improve, but we've already reaped most of the benefits years ago. An inkjet printer and a car is a good example. After thousands of new improved models, it is still essentially the same as a decade ago. Technology has reached the point of diminishing returns and you won't probably see any major changes unless you are part of the elites.

I recall seeing a scifi show called "Space 1999" in the 70s about a moon base, this is 2016 and a moon base is still a distant dream. At the rate we've burning and wasting resources, I doubt if humankind can ever get their act together to go beyond Earth and spread out to other planets. Hopefully it'll be a slow crash and I'll be long dead before we reach the Max Mad scenario.