Using Numbers Again


One of the ways to lie with statistics, is to compare where the rate is small. I noticed an example yesterday. The numbers are these and apparently from the CDC. The headline is “The Unvaccinated are 11 times more likely to have a serious case of Covid-19 thana re the vaccinated

There are two messages there.

  1. Vaccinations work very well thank you.
  2. The unvaccinated are taking needless risks

How context matters

The headline does not provide any useful information unless you know the rate of serious cases among the vaccinated. It turns out that is 1.2 per 100,000. A very good result for vaccines.

The unvaccinated therefore are 11 times greater at 13.2 times per 100,000. While 11 times greater is meaningful, it is not meaningful by itself. Why? Because 13.2 times per 100,000 is one in 7,576, or 0.013%. Even that is not very helpful. Look at the other way. If 1 in 7,576 is the the group harmed then 7,575 in 7,576 is not. That is 99.987%. have no problem as opposed to 99.99988% among the vaccinated,

Unvaccinated are okay in 99.987% cases while the vaccinated are at 99.99988%, is not a very compelling headline.

Caveat

The statistics above claimed they come from the CDC, but realistically they should be investigated further. Skeptical is a good position to hold regarding any statistic.Sometimes you can see through the numbers.

What could have happened to make the ones here reasonable?

Only three things I can see:

  1. Older people are most at risk and would skew the statistic if at risk. We can estimate that most all old people are vaccinated and vaccinations protect them. Unvaccinated older people could be the problem demographic.
  2. Many of the unvaccinated have already had the disease, have natural antibodies, and strong immune response.
  3. Other unvaccinated persons have stimulated their immune system with Vitamin D, Vitamin C, Zinc, and exercise.

If anyone cared, they could assess the reasons and know more. If you dig deep enough you can usually discover not only the what happened, but also the why it happened.

The takeaway

Comparing statistics where the rate of occurrence is tiny must be examined in detail.

When statistics are presented with no context you can still come to some conclusions that supply insight.

The raw statistics would be nice to have but I can’t find them. The CDC is a inscrutable.

Never use statistical evidence to make medical decisions. There is risk using data covering large populations with varying conditions to assess how risk applies to you. Try to fit your situation to data relating to others like yourself not the population taken as a whole.

Learn to undo the carefully painted statistical picture. Looking from the other side usually provides insight. It is a good habit to have.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

Study Numbers Before You Rely on Them


Many people think average is a number that matters. Mistake unless you know about the population of observations. Then does that population match your situation. If it might, the average might have meaning.

The intuitive idea

Average contains many bits of information and so the average must be useful. But no! It doesn’t have the depth people believe it does.

How no depth works

  1. Let’s take the municipality of Medina Washington. Zipcode 98039. There are a few more than 3,000 people who live there. If you live in a town of 3,000 people would you expect the average net worth or income of people in Medina would be like yours? It is possible, but not likely. Medina is an outlier. It is home to Bill Gates, Jeff Bezos ex-wife Mackenzie Scott, a founder of Costco, some retired professional athletes, and many corporate executives. Their average may not be relevant to what should be true on average in your town. When Jeff Bezos lived there, Bill Gates was the second wealthiest person in the zipcode.
  2. Okay, maybe too variable. How about the average height of all the people who work for the Los Angeles Lakers. I hear the aha. You got the idea that it would be very tall because it would include a crop of folks who are 6’10.” Good thinking but wrong. You would need to know how many people work for the Lakers. There are about 15 basketball players and they would all be far right outliers on the distribution. There are at least 160 employees in total. From the director of marketing, to the PA announcer, to the season ticket processor. The other 145 are what we think of as normal. If we guess that the mix of males and females is normal in the 145, we could guess their average height at 5’9″” if the 15 players averaged 6’7″ then there will be 150 extra inches arising from the players. so the overall average is likely about 5’10”.  The number of people in the population matters too. The tall folks only influence it if there are not many in the total sample.
    Okay that makes sense. The quantity of the population and the quality of the factor you are measuring matter.
  3. Let’s try this one. You are looking at buying a cellphone plan. You do some research and find one that on a scale of 1 to 10, the average satisfaction level is 7. Pretty good right? Maybe. When you look deeper you find there 100 people who have commented and of those 67 rated it 10 and the other 33 rated it 1. The problem now is the distribution is not a bell curve. It is u-shaped. Either you love it or you hate it. You don’t know which side you will fall on. Don’t assume a “normal distribution” – Bell curve.
  4. Another variation of the cellphone plan idea is this. What is the average number of left arms Canadians have. Not quite 2, is it. Most have one, a few have zero. There is not one person who has the average number of left arms. When there is no example of the average, you should step back and think. U-shaped distributions are a near guess.
  5. You cannot average averages. Suppose you have a moped that has trouble with hills. You want to drive two miles. One mile uphill, one mile downhill. You want to average 30 miles an hour over the whole journey. You can drive 15 miles per hour uphill. How fast must you drive downhill? I know you would like to say 45 mph, but you know it’s wrong. The answer is you cannot do it at all. Here’s why. Two miles averaging 30 mph takes four minutes. One mile uphill at 15 mph takes four minutes. You reach the top of the hill at the same time you must be at the bottom of the hill. No speed will let you be in two places at once. Don’t average averages.

A normal distribution has an average and a median – the middle value, that  are equal. There will be as many observations on each side of the number. The third number is standard deviation. Basically how flat is the curve. If all the observations are close to the average, the standard deviation is small and the curve will be a pointy bell curve. A high standard deviation means the curve is flatter.

If you know all three  and the size of the population, you can get an intuitive idea of what the average means.

The takeaway. 

Be careful with averages. Some people using them to mislead you.

Understand the shape of the distribution.

Understand the size of the population.

Not all small sections of the total population are like the whole thing. That’s what statistics is about. How many random samples would you need to make you believe the sample represents the whole? If you understand the nature of the population, the shape of the distribution, and you can pick randomly, the sample size will be smaller than you think.

When things turn out not as they seem, you can be very wrong.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

The Dog That Didn’t Bark


Experience can mislead us.

We seldom consider all of the things in a given situation that could have but did not happen.

Suppose, given a certain set of circumstances, that three things could happen. A a very good result, with probability 5%, B a moderately bad result, with probability 35%, and C an okay result, with probability 60%

If the circumstances arose a thousand times we would expect to discover something around A – 50 times, B – 350 times, and C – 600 times. Easy enough.

Not everything that happens should have happened. Sometimes the probability of some outcome other than the one you saw, is vastly higher than you think. The dog that didn’t bark. Does it affect your next decision?

Experience is about what happened.

The general case is not always an easy thing to know. People are sometimes exposed to situations that they never see again. They don’t get a sense of the problem and its possibilities.

Suppose you had been exposed to the experience possibility above and your were presented with outcome A. just one chance in 20 that would happen, but it did for you and it forms part of your experience set. If you stop there, would your advice about dealing with the circumstances be helpful for others? Maybe not. It might not be helpful for you if the circumstances ever arise again.

 

Experience is useful

Useful expereince includes what did not happen, at least to you.

You want experience in context of all the possibilities. If you don’t know all the possibilities and the outcome matters to you, you should acquire other people’s experience. If someone deals with the subject matter all the time, they will have a much clearer understanding of the possibilities, and they will know about nuance that affects the results.

An income tax specialist might know clearly about the 5-35-60 mix, and will know hot to avoid B, and have a chance at A. That would be useful. Better yet, they might know a way to modify the circumstances so there is a better expectation of success. That’s what tax planning is about – modifying the circumstances within the rules.

For example, many years ago we imported devices to manage energy use in a building. Essentially a smart thermostat. If we imported thema s building materials, the duty rate was 13%. If we imported them as semiconductor control devices, it was 5%. You can’t figure that out as you drive to work

You cannot know everything

You also can’t know when what you used to know changed. Specialists keep up to date. Life is easier if you buy experience when the event is uncommon. That’s what lawyers do. How many times have you incorporated a business. Few. You don’t get good at doing things once.

The takeaway

On average, when outcomes matter, other people’s experience is the cheapest experience.

Know when adverse outcomes are possible. Be aware that, in the past,  you might have seen only the improbable outcome. Experienced people will know that, you will not.

Experienced people have details to support their methods. Like the right wording in a trust, or a will. Details minimize catastrophic outcomes.

Remember Jim Ling’s Law – “I was right twelve times and only wrong once.” Lucky streaks last but not forever.

Older people don’t fully trust experience. They have seen variability.

{Pay attention to what happens around you and study what has happened before in similar situations. History teaches. It doesn’t repeat exactly but as Mark Twain has said, “it rhymes.”

It’s like other skills. Practice does not make perfect. perfect practice makes perfect. Experience is not the key to success. Well studied and observed experience is.

The most dangerous belief – “This time is different.”

Be more humble.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

Things Can Happen To You Or You Can Happen To Things


There is a thought in managing high-performance people. Losers let things happen  Winners make things happen.

In the beginning many people think they can’t do as well, but on examination they find they are missing some of the tools they need. Sales is one  field where the tool set is quite large. It is easy to find one or two that work and rely on them alone. While you can do okay that way, you cannot be a high performer.

There are too many others competing with a limited tool set. That kind of advice is a commodity and so not very valuable.

It’s like a plumber.

No plumber comes to your home with a pipe wrench, a couple of pieces of pipe, and a fitting or two. The plumber comes with a truck full of things. Specialized tools, common materials, rarely used material, and the ability to use any of them.

The first step is to assess the problem. Once assured of what’s happening and with a plan of attack, back to the truck and get the right tool and the right material. Then fix it.

With few tools, the problem or opportunity is never adequately assessed. Why not? Because  the solution must fit the available tools and material. That is limiting and if the customer has talked to anyone else more skilled, they will notice. Beware old advice, “If the only tool you have is a hammer, you tend to see every problem as a nail.” Abraham Maslow,

If you only have a hammer, at least be sure you have several kinds of nails.

The other part of success.

A lot of success is attitude. A sales person who recognizes that every day when they start the day they are unemployed. They must find work, over and over. That’s hard for many. But ultimately it’s a process. A number’s game. Learn some introductory techniques and try them until they are natural. Some are dead simple. I knew someone who had a 30-second interview for life insurance. It didn’t work every time, but it worked often enough.

  1. Do you have a will? Assume yes for this purpose.
  2. What does it say? Usually all to spouse.
  3. What’s everything? List of things
  4. Do you think they might like some money?

Be very quiet.

You manager may tell you about activity and that is important. You learn by doing it wrong so lot’s of mistakes help. What managers mean to say is activity is not valuable until you convert it to action. That’s where the tools, the techniques, and the raw materials come in.

Until you have the whole package things will be difficult.

The good news is activity => action is easier if you have more tools. One of them is other people who know how already.

The takeaway

Use any resource you can access

Make mistakes and learn from them The military does after action reports on every engagement. You should too. If you don’t write it down it might as well have never happened.

It’s a question of being acted upon or of acting. Thought for the day.

It had long since come to my attention that people of accomplishment rarely sat back and let things happen to them. They went out and happened to things.” – Elinor Smith

It’s mostl;y attitude to the challenge you face.

Get busy “happening to things.”


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

Why You Don’t Attack A Martial Arts Expert


Have you ever thought you could attack a 4th Dan black belt, hand to hand, and defeat them? If so, move to the back of the smart person line. I don’t care if you are a 230 pound, six foot three linebacker. You would have no chance. Even with a weapon, you would be at a huge disadvantage.

Why would an amateur always lose?

Because all martial arts masters are prepared. No matter what your attack looks like, they have a prepared response for it. A response they practiced until it is automatic. They have a sequence of moves that respond. It is not just a single move. Expecting them and overcoming them at the speed delivered is beyond unlikely. Amateurs have little more than the first attack.

I know an advanced belt practitioner who claims, “If at first you don’t succeed, you better be running.” Amateurs have an idea. That’s not the same thing as a plan. I think Mike Tyson summed it up best. “Everyone has a plan until they get punched in the face.”

The ideas apply elsewhere

That’s why we have Emergency Preparedness systems. The military has filling cabinets full of plans. Everything from a typhoon in the south Pacific to short supply of bullets in Europe. If you are prepared you have a better idea of how to proceed.

In any situation you can estimate possibilities.

  1. What might happen?
  2. How long would we have to respond?
  3. What response would be appropriate?
  4. What you would do if other things happen after our response?
  5. What resources do you have?
  6. What resources do we not have and should acquire?
  7. What training is needed?
  8. What measurements will matter and can be accumulated?
  9. How will we know when we are coping well?
  10. What messaging is helpful?

If you had  such a plan and some emergency you had prepared for appeared, what would happen?

Like the Karate master, you respond step 1, step 2, step 3, review and revise approach. Continue until the risk dissipates.

There are people who know how to do that with emergencies.

What happened with Covid-19?

In the beginning no one followed plans that existed. We know there were plans, because pandemic risk was a known concern. What happened in our case? Nothing of value.

You’d like to think the decision makers would have triaged the risk and dealt with the greatest risk first. In the Covid situation that would have been long term care facilities. In the early going, easy half the deaths occurred there. “Flattening the curve” to protect the health care system was ill-advised. There was little evidence that if older people, especially in care, were shielded, the health care system would have failed.

The approach taken had disadvantages.

  1. It induced fear in the population and fear is always a poor counsellor.
  2. Isolation, and fear induced several other adverse effects. Family abuse, mental health issues, substance abuse, and children losing their education trajectory and friends. No one can expect those effects are cost free to individuals or society as a whole.
  3. It stalled the economy because the communication was paranoid. If you were under 60 without serious co-morbidities, the expectation the disease could kill you are less than one in a thousand. Why shut down if the vulnerable have been protected?

It was an amateur response

Medical Officers of Health are not trained emergency management  specialists. Neither are the policy makers in the Ministry of Health. Certainly the politicians and their staff are not capable. So what happens when amateurs attack a serious opponent?

They try something. In this case lockdown. Things don’t turn out as the amateurs expected. They then select another tactic. That is even more likely to fail. Then a third, and as a last effort, go back to first failed attempt and hope. Like Australia. No honest cost-benefit analysis addressing the virus would recommend their approach.

The first mistake – wishful thinking

The wrong people were tasked with decisions. As we saw above, they were not competent to do the job, and worse they had political ambitions that were assisted by being in charge and seeming to do something. Most of their doing was to command unreasonable things and spend money. The secondary effects were clearly known before the actions were taken. The people whose hubris prevents admitting error, deemed them to unforeseeable and the consequences unintended. Everyone knows that is untrue.

Incompetent people tend to stick to failed methods because they have not thought objectively about their response. They make decisions based on belief instead of on objective evidence. Maybe wishes are a better description than beliefs.

The second mistake – Mistaken priorities.

Flattening the curve was a false ambition. The thinking should have been to expand capacity by other means. All flattening the curve has accomplished is people with other serious diseases have been without treatment. Does anyone have a sense of what that costs? No. Of course not, and no one in the public ever will. No one will accumulate those costs.

Neglect of treatment options in addition to prevention. Vaccines are wonderful, but leaky vaccines like the one we face are not as helpful as they tell us. Many people have spoken out about the risk. They have been silenced by the media. Treatment and prevention modalities exist and we have been told to ignore them.

Frontline doctors are the most likely to find helpful protocols because they have experience with somewhat similar conditions. They have a deeper understanding than any bureaucrat or politician. Why ignore them or worse command their silence?

The third mistake – communication failure

Demonize anyone who disagrees with you. It might be smart to discover why they disagree. Could it be because everything you have done was inadequate and too costly and they have the temerity to disagree. Could it be the failure to admit mistakes and correct them.

Propaganda. If you have a truth to tell, you shout it. If you don’t have truth on your side you must use lies and exaggeration to convince the rest of us.

Media manipulates inf ormation to support a narrative. Do you really think the federal government gives hundreds of millions to the media, and spends another billion on the CBC so they will be objective? Be serious.

The fourth mistake – Never let a crisis go to waste

When the government decided to take opportunity to gather more power, they adopted approaches that made the crisis more fearsome. A more fearsome crisis made it more important for the people to rely on them. Their approach and the reasons for it, are antithetical to a well-functioning society. How many people believe the government needs more power? Not many outside government.

What happens next? Emergency health declarations are the center of their actions. How long will they wait to deem climate change, or guns, to be clear and present health dangers?

The inept response has destroyed the credibility of many institutions. Ones we needed. A bureaucracy that prepares for possible problems. Once you politicize the ministry of health or the emergency measures organizations, you are done with people taking them seriously. Mask mandates. Vaccine mandates. Shutdown. Reduced capacity. Inadequate healthcare for those suffering depression and other maladies. Government is not your friend. Maybe they never were, but now it is obvious.

The takeaway

You pay the price for their mistakes even if they try to tell you they have done everything possible. They have done what benefitted themselves against the advice of people who do know how to solve emergencies. Doctors, and emergency measures people.

Be smarter and look after yourself. They are not doing it.

In your own life, there are predictable risks. Have a plan and the resources to deal with them.

If you have an hour you might find something useful in this video. Interview with Lt-Col David Redmond, former director of Alberta’s Emergency Management Agency It’s about an hour long but interesting


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

How Does Theft Work?


From Nolo’s Plain English Legal Dictionary

“The generic term for all crimes in which a person intentionally takes personal property of another without permission or consent and with the intent to convert it to the taker’s use (including potential sale).”

Let’s Parse that a little

a person intentionally takes personal property of another”  Someone took something that was yours and now it is not. That seems pretty straightforward but to make it more complete and actionable, it needs to be more precise.

The qualifiers that make it something less nefarious instead of theft.

  1. “without permission or consent.” Does permission need to be specific or can it be implied?
  2. “with the intent to convert it to the taker’s use” What if the purpose was not for their own use?

As you can imagine it gets challenging to be sure when a theft has occurred if the circumstances are fuzzy

The fuzziest of all. Are taxes theft?

In law, taxes are not theft. Certainly the government has taken property that once belonged to the citizens, but that is the only part that is clear. They would argue you pay taxes and it is a non-issue at all. Chris Rock differs. “You don’t pay taxes — they take taxes.” I think we could agree the Chris Rock idea is more precise. The qualifiers are the point

The qualifiers matter, too.

I think it is clear that in forming a government we have implicitly given them both permission and consent. It is unreasonable that we should enjoy the benefits of government without providing them with a way to pay for those.

No doubt they would further make the argument that the money taken was not, at least in part, for their own use. In that a meaningful share of all tax collected remains within the government structure to pay people, buy equipment, and to provide facilities and other benefits, that is not so clear. I doubt it would be possible to allocate that fixed overhead to the programs other than by formulae, so a little fuzzy.

It is certainly possible the politicians would argue that they serve, for a modest salary, and derive no benefit from the money the government takes from the people. That of course would be disingenuous. Their power derives from the ability to spend money and to impose regulations that affect their friends and supporters, and perhaps incidentally, the people..

So let us rule they have not taken the money by theft, because the exemptions save them.

Is legal the only way to decide?

It is a given that being legal is an incomplete definition of what is right. As a former chief judge in Ontario told me, “People don’t go to court for justice. They go to court to have the rules applied.”  Justice, whatever that may be, is something beyond the rules.

A question you might reasonably ask, is would all government programs taken one by one enjoy “permission and consent” of the people? Let’s say more than 50% of the people would choose to spend the money some given way. If we add informed consent subject to an honest and evidence based cost/benefit study, then how many? We cannot even guess that number because there is no example of such a condition ever having existed.

We end up with an elite, often unelected group, making decisions that cause money to be extracted from the people for spurious purposes. Former Democratic candidate for President of the United States, Tulsi Gabbard, sums it up.

She’s wrong of course because of implied consent and permission to take the money.

We should think about how to limit the spending that does not benefit the people. Perhaps that is changeable.

The takeaway

You can withdraw the implied consent by electing people who will spend money for social effects other than their personal aggrandizement.

You can elect people who will minimize the reach and power of the unelected bureaucrats.

You can specifically and persistently complain to the current officials about wasteful spending — programs or implementation.

You can share your views with others.

You must have sound reasons for your complaints. It is not all about you. We are a society and culture that looks after each other so each can contribute where they can.

Business regulation falls into three categories. 1) Regulation that serves society both effectively and efficiently, 2) regulation that serves society, but we the producer, are already providing the good in another way, and. 3) Regulation that is too costly for the good achieved. Minimize waste. Results not method.

You will have little success because power is a fine thing to have and many of the people in government are there for the thrill. If not at the beginning, it grows on them. You will not be able to ask for luxuries while complaining about their frugality.  We have authored much of the problem ourselves by misunderstanding what governments are for. We could stop that.

It isn’t all by taxation that they take. Inflation is a certain theft, but it doesn’t look like one. The money remains, it just isn’t worth as much as it was before. Inflation favours debtors and the government is the biggest of those. If something is to their benefit and the taking not well understood by the people affected, it will certainly happen. Inflation has not been obvious in the past thirty years or so. Many people don’t understand how it harms them. Learn.

Many people in government like to provide rules for people “for their own good.” Those people should never be elected. Tyranny is not far behind power and control.

Politicians abdicate responsibility. They turn over regulatory power to the bureaucracy by not specifying a method. to achieve their legislated purpose. Open-ended methods invariably are expensive methods.

Canadian evolutionary psychology professor Gad Saad talks about it. It’s time to activate our inner honey badger.   

 


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

Lying Is Not Noble


Plato presented the idea of the “Noble Lie” in his book “the Republic.” The idea, in politics, is a Noble Lie is an untruth knowingly told by an elite to advance an agenda. We see many of these today. Dr. Anthony Fauci is key proponent of the technique. He is not alone, every government spokesperson seems capable.

Is it useful

Plato raised the question of whether such a lie has a useful purpose and whether it is necessary to make progress. How should we address that question? Plato and philosophers like Leo Strauss have discussed it and came to no certain conclusion. Maybe you should think about it. Are there conditions under which you would prefer the government lie to get some project approved

Where the Noble Lie fits

Honesty is the best policy, but if you are running a government or a bureaucracy it seems to have become “Honesty may be the best policy, but it is not company policy.”

Assume the Noble Lie is sometimes necessary.

Maybe in times of war. Churchill had a handle on the idea, “”In wartime, truth is so precious that she should always be attended by a bodyguard of lies.” “

Given that thought, what guidelines should we impose so the technique is not misused?

  1. The liar must be noble. In simplest expression they are not lying for personal or administrative advantage.
  2. The lie must not be to promote an ideology that the people do not support in significant numbers.
  3. The lie must support something the people do support in significant numbers.
  4. The lie could be to deceive and enemy.
  5. The noble lie must be very rare.

Why is the Noble Lie common?

Not all Noble Lies are truly noble. Sometimes we find them used for reasons like these.

  1. The people generally wouldn’t agree with the liar if they told the truth, but the liar thinks their position is unassailable. The lie is to convince the dumb people who might get in the way
  2. The lie covers up an earlier mistake.
  3. The lie is to speed up implementation without necessary examination and evaluation.
  4. The lie provides some advantage to a preferred associate.

Arrogance, selfishness, power-seeking, and impatience seem to be the most common motivators for lying.

Where the Noble Lie leads

In the beginning the Nobel Lie is to achieve a good not easily or quickly obtained any other way.

Once that seems to work, the technique becomes more common and is often ideologically driven rather than consensus driven. That begins to happen as the people in charge begin to see themselves as the smarter of the crowd and are unwilling to tolerate noise from the little people.

Eventually it becomes a habit.

“The rules are simple: they lie to us, we know they’re lying, they know we know they’re lying, but they keep lying to us, and we keep pretending to believe them.”   Elena Gorokhova, A Mountain of Crumbs

Where should we fit?

We should be careful when believe the truth is purposely altered.

Aleksandr Solzhenitsyn knew about lies. His thought on the matter is both useful and clear.

“For when people renounce lies, lies simply cease to exist. Like parasites, they can only survive when attached to a person. We are not called upon to step out onto the square and shout out the truth, to say out loud what we think—this is scary, we are not ready. But let us at least refuse to say what we do not think!”

First we must recognize lies and then we must renounce the liar. My father-in-law’s fiercest criticism was “He’d tell a lie when the truth would serve better.” Eventually it is just that dumb.

The takeaway

Someone who lies 20% of the time does not have 80% credibility. How many of you believe what the government spokespeople and the media pundits have to say.

Lying, even with Noble Lies, is a tactic. When it stops working people stop using it. Solzhenitsyn’s parasite idea. When you hear lies ignore them. Use common sense and most will evaporate.

The person who hears and accepts the lie is the one who gives it substance. There is no rule that says you must believe what you hear. People have a right to free speech, but there is no right to have anyone take their speech seriously. Or to even listen. People stop using lies when people ignore them.

Demand truth.

Precision Doesn’t Create Truth


Precision is persuasive though. It can lead you to arrive at unwarranted conclusions.

For example:

As you iknow Tesla vehicles are highly engineered. Have you seen the formula they use for the air in their tires.

Nitrogen – 78.1%, odourless, colourless, not flammable, non-toxic

Oxygen   – 20.9%, paramagnetic. (affected by a magnetic field, like around electric motors.

Argon     –    0.934% , chemically inert. Relatively expensive.

“Other” gas mixture – 0.066% includes this mixture in the order of their share of the 0.0066% — water vapor, carbon dioxide, ozone, methane, various oxides of nitrogen, neon, and helium

Many people see this complexity to be part of the Tesla value system while other see it to be a nuisance If they should need to top up their tire pressure, what will they do? Maybe Tesla  provides a cylinder of the mixture for use in emergencies.

Not to worry

Tesla service centers can provide the mixture and other service centers can too.

The mixture described is the mixture in the air that surrounds us. Tiny variations from place to place might affect it but you can pump up a Tesla tire with any air pump.

Questions

  1. Did Tesla advanced engineering and precision make it seem possible?
  2. Why did you think Tesla would use something other than ordinary air?
  3. Did the details confirm an unproven idea you already had of Tesla’s high-tech engineering?

Each of us is easier to persuade than we believe. We should watch for too much detail as a hint something else may be going on.

 

Governments Are Your Financial Enemy


How many can recall discussing this with a one-year-old?

The foot bone is connected to the ankle bone,

The ankle bone is connected to the shin bone,

The shin bone is connected to the knee bone,

and on and on

Pity we didn’t carry the process to other subjects

Economics works like that too

So does personal financial planning. There is a lot of mistake room when you ignore the connections.

What is a governmental deficit?

That is the amount by which their spending is greater than their income. It is the same for a person, but people are more careful with their own spending deficits. A 20-year-old will have a spending deficit because university costs more than they earn. They finance the difference with student loans. The government sells bonds. Sometimes to the people or institutions, and sometimes by printing money. Students can’t print money.

The student notices their loan sooner. The bank wants their money back and they want it back together with interest. Not so fun. Especially not so fun years later when some of life’s other necessities come along. Governments don’t pay much attention to this part of their existence because they don’t exactly pay the loan back. They “roll it over” into some new larger borrowing and it has little effect on their day-to-day life. Unlike the student, they can borrow as much as they need, rather than as much as they can pay back. At least, they think they can do that.

How does a government deficit connect?

The deficit connects in two directions. It is the middle of structure. Like the shin bone. Looking upwards the deficit becomes part of the total government debt. No one pays much attention to that except when trying to make political points. I doubt anyone knows how much it is.  They could add up all the bonds they have issued , but then there are all the provincial or state debts, and all the municipalities within those. Still possible. But what about things they have committed to pay and for which there is no identifiable amount.

These are “Unfunded Liabilities.” Things like pension plans with few or no assets to support the eventual pensions. Medicare promises, and dozens more.

You have them too. What’s the cost to raise a child or support a spouse if you cannot? Have you ever thought about infrastructure that will need maintenance and repair. Even replacement. You provide for it and you acquire infrastructure like cars, and houses with the future costs in mind. Governments pretend to, but they don’t.

The deficit connects “upward” to the total debt and the debt connects to future spending. Interest and principal matter to to you. Interest does to the government.

The deficit connects “downward” to where spending exceeds revenue.

The tricks

You know you could not run ever-larger deficits forever, but the government thinks they can. The trick -They can as long as you can.

All loans rely on ability to pay. As long as you can pay the government, the government can borrow. They don’t have any money of their own. They have only the ability to take yours. If that ability to take yours falls away, they’re done. It’s like giving a no-limit credit card to a child. Some of what they spend might be for you, but all of what they spend is your responsibility to pay. They could only spend until you stop making payments.

People eventually cannot pay more. Before that happens, the government expands their trick so you pay but in a different way. They inflate the currency. They print money. That can go on until they run out of paper and ink. It costs you because your savings will not buy as much as they once would. The government indirectly got the value you lost. Some inflations are spectacular. In Germany in 1912, 80,000 marks was enough to retire with. In 1922 it would not buy a stamp.

How much do you spend when you can’t see how to pay the loan that supports the spending? Answer: hopefully none. That is why banks are having trouble lending enough money even though interest rates are near zero. You have to pay the principal too and that frightens people.

Governments don’t have that fear. They think they always get more money and at worst they think they will likely be retired before the birds come home to roost.

The whole idea of deficits violates a simple economic law.

Say’s law was first appeared in 1803 in a book  authored by Jean-Baptiste Say. It is based on classical economics and asserts that production creates demand. Production creates value and that value can buy other products. The law is well-argued from both sides, but it has a certain simple elegance. Only producing can create value.

Governments like to ignore it to achieve some of their goals. Often the thing they wished for would have been accommodated without them,, just not as quickly as they would like. Urgency is a persuasion tool. The great depression of the 1930s was arguably caused by politicians trying to “do something.” The economy was already recovering before they acted. Ooops!

Deficits are part of their tool set.

The takeaway

When governments spend, they do so with someone else’s money or value.

When they borrow it is only a question of when someone else pays.

Governments have deficits because they spend or promise to spend money they don’t have and haven’t had the people agree to pay.

Governments argue their spending is an investment. Really!?? I think I will invest in a nice steak and a bottle of good wine. Maybe new golf clubs, or a Hunter Biden painting.

Interest is a huge part of the government’s budget. In the 2021 US federal budget it is $378 Billion. 7.8% of spending and that is with interest rates at historic lows. Do they ever, like you do, say what could I do with that money if I didn’t have to pay the interest. They do not. You try to get out of debt so you can save and spend better. They don’t.

As long as the government can delude us into thinking they are doing their best, we are doomed financially. They may be doing their best. They are not doing best. Not even close. They are spendthrifts seeking praise and power.

The money they have was once yours and would have been used differently had you been permitted to keep it.

The spending is connected to the deficit.

The deficit is connected to the debt

The debt is connected to the interest.

The interest is connected to the spending.

How do you see it lasting forever. Herb Stein, “If a thing cannot go on forever, it will stop

Be smarter.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

Without Context, Nothing Makes Sense


If you read headlines only, you won’t get context or even the idea of it. Headlines are to get attention and they sometimes don’t even connect to the story that follows. Headlines are a point of view of the media source. They exist to get clicks.

How context works

If you have worked with financial reporting you will have quickly discovered that numbers by themselves are meaningless. $10,000,000 is a nice number. If the context were my bank account, it would be spectacularly good. If it were Apple’s bank account, spectacularly bad. It isn’t the number that matters. It must have context to have any meaning at all.

In the fall of 1967 I saw a young comedian on stage at my university. George Carlin went on to an amazing career. One of his special acts later, talked about context. In sports of all places. It deals with relationships. “Here are some partial score – Notre Dame 14. Yankees 5, and in a close one, Lakers 110.”

Meaning lives in the relationship, not in the numbers.

I like the idea of life-simplifying assumptions.

If you are travelling around the media or social media you will find many, (nearly all?,) reports that provide no context. Covid lends itself to that because there are so many possible numbers to present. Deaths in September were X. Interesting in its way but it would have been more useful if they had indicated X was bigger than the number of deaths in September 2020.

Why would they avoid that? Context leads meaning. If there is context there are automatically questions. The first question anyone with an IQ above room temperature would ask, “Wait a minute. Vaccines are everywhere, how come there are more deaths?” A question to which there is no answer that fits the narrative.

I assume that anything presented without context is done to convince me of something that is not completely true. If you take some detail out of its reasonable context, you can use the truth to lie. The best of all worlds for some.

When you should redirect your attention.

  1. Facts are presented without context.
  2. Unnamed sources provide the message
  3. Hearsay of a third-hand expert’s opinion is presented as fact.
  4. It’s too spectacular to be true.
  5. It follows exactly some preferred narrative that has not been proven true.
  6. If a comparison is presented, but the context of the two comparatives is different. My friend Brian MacKenzie sent me an example of this point.  “Age-Adjusted Mortality Is at 2004 Levels. Yet They Tell Us Covid Is Worse Than the 1918 Flu.” More deaths and relatively more deaths are not the same thing. The population in 2020 is 3.3 times more than 1918. The death count should be much higher. Comparing 1918 to 2020 is helpful too.

If you see a tipoff for a lie or half truth stop paying attention. The life-simplifying advantage is you don’t ever need to watch network or cable news. You might miss a little, but if you have trusted sources on the internet you’ll find it.

The takeaway.

Context matters more than numbers.

Develop trusted sources.

Use common sense. The spectacular is seldom completely true.

Interpreted expert opinion is valueless.

There is nothing that demands the media tell the truth, the whole truth, and nothing but the truth. Similarly, there is nothing that requires you to take them seriously.

Watch Flip Wilson – George Carlin – Funny News   It’s a three part series.


I help people have more retirement income and larger, more liquid estates.

Call in Canada 705-927-4770, or email don@moneyfyi.com

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