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August 2011

What do the billionaires think?

In this Op-Ed in the New York Times, Warren Buffett (whose net worth is around $50 billion) admitted to paying under $7 million in taxes last year (17.4% of his annual income).  This percentage is lower than, as he says, "the other 20 people in his office." 

The entire piece is worth a read and I agree with his analysis.  His message is clear, true, and obvious.  But what I find particularly interesting are the Letters to the Editor that followed (in response to his piece).

Several contributors suggest that he's being insincere because, if he really meant what he's saying, he's free to send in more money to the IRS than he does.  But, of course, that argument kind of misses the point...that obviously billionaires should be forced to pay more taxes....all of them, not just him, alone. 

Another individual argued that this would "stifle economic growth", as though Warren Buffet would stop his business activities because his tax rate went up.  Are theoretical arguments really supposed to trump obvous, observable real-world truths?  Taxing billionaires does not stifle anyone's econimic growth except for their own.  Would Buffett spend or behave any differently if he had to pay 40% of this year's income in taxes?  That's an extra $10 million+ for our government to spend on economic growth.  How is that money better sitting in his accounts?  Come on.

Another contributor suggests, "The American people are no longer getting appropriate value for the dollars that they “invest” in their government."  Indeed, this is a core argument of my book, Love It or Leave It: The End of Government as the Problem.  The problem with this argument being applied in this context is that Warren Buffet is not "the American people", he's a fucking billionaire!  Billionaires absolutely benefit from government because it mostly functions to serve their interests (I cover this in great depth in my book).  But that's beside the point.  How can anybody lump billionaires in as part of "the American people?"  As though we're all on the same team?  Come on.

Another idiot from Florida even went so far as to lecture Warren Buffett (and the rest of us) on Capitalism.  What an embarrassment.

What I find most sickening is this endless conversation about "how the rich feel" or "what the billionaires think" about being taxed more.  The real question is this: how many of "the rest of us" do you have to add up in order to equal the feelings and opinions of one Warren Buffett?  I'm serious.

If you add up the wealth of the poorest Americans (I'm talking about wealth, not income), how many Americans would it take to equal the net wealth of Warren Buffett?  Well, first you'd have to take all of the Americans whose net wealth is negative (they owe more than they have in wealth).  What percentage is that?  25%?  More?  So we're starting with a negative number by adding all of that up.  Now let's take those who actually have net wealth (more assets, cash, and investments than debt).  Let's say that the net wealth of the poorest 25% of these individuals makes up for the total dept of those with negative net wealth.  At this point, we're still at zero.  To get to Warren Buffett's $50 billion in wealth, perhaps would require another 10% of Americans?  These are just estimates, but let's say Warren Buffett's wealth is equal to the combined wealth (minus debt) of 60% of Americans.

So, what are we at....200 million people?  My question is this: are the feelings and opinions of 200 million people worth more than the feelings and opinions of one Warren Buffett? 

Why the hell do we care what the top few hundred billionaires think or feel?  Most of them could give a shit what we think and feel.  We are not on the same team.  Just yesterday, Warren Bufffett announced his multibillion dollar investment in Bank of America.  Think about what Bank of America does.  It gets the rest of us into debt and helps turn us into wage-slaves.   How do the rest of us feel about the Warren Buffetts of the world collecting our interest payments?

Now let me ask this: what fucking idiot would argue for or defend Warren Buffett even when he is conceding the point himself?  Are you a billionaire today?  Are you close to being one?  If you answer "no", then I can bet my life savings that you will never be.  You do not and never will have the power to aquire this size of futune.  Can you become a millionaire?  Of course, but that's not what we're talking about here.  If you think that someday you'll be in the Bill Gates or Warren Buffet club, perhaps your most appropriate short-term investment would be time in a mental institution. 

Let's be honest about what teams we're all on.  Let's be honest about what the billionairres are doing to us, how they are enslaving us personally and nationally to the debt that they issue, and realize that the only way out of this mess is 1) for our side to take more of their their money or 2) to default on our debts (their financial loss, not ours).  Either way, stop thinking about what the billionaires think and feel.

Fictional times (podcast episode)

Click on the gray box to listen

Abscondo Podcast - 37 - Fictional Times

We have been living in fictional times of denial.  Nothing about this way of life holds up to any serious thought or questioning because our present course is unsustainable.  To cope with our day-to-day lives, we naturally cling to plastic, meaningless forms of entertainment and shallow thinking.  Anything that deviates from the current "normal" is shut out because it fails to prop-up our belief in the fictional world around us.

But our social structures, our economic systems, and our entire way of life has already begun to change in a disruptive way.  In the coming years, what we now think of as normal will come to be recognized as fictional.  Will we watch our lives slip away by clinging to the past, or will we embrace the future?



The word that few are talking about

The word is future and maybe its time we get real about it.

During more stable times, it is enough that our thinking about the future extends maybe a few months, maybe into the next quarter, or perhaps into the next election cycle.  During these times, we can feel confident simply going to work, attending school, taking on a little debt, maybe saving a little, buying a house, and going shopping when we need something.  During these times, worries pretty much concern questions like, "Can I pay my bills for a few months if I lose my job?" or "What kind of career would make me happy?"  This way of life depends very much on economic and social stability; where well-established rules exist, we learn them, we follow them, and we are rewarded fairly.  This is the world that most of us grew up in and the world that most of us want to believe still exists.  But something very different has already begun and most of us don't see it.

In times of disruptive change, so much of the conventional wisdom we've built our lives upon begins to shift beneath our feet.  The old paradigms die and the new paradigms are either undeveloped or are not yet properly understood.  A clear example of this, in our lifetime, is what happend in Eastern Europe and Russia after the fall of Communism between 1989 - 1991.  Citizens of these regimes grew up understanding quite clearly how their society functioned, which kinds of behaviors were rewarded or punished, which kinds of thoughts were accepted and which were suspect.  Watching this transformation from the outside (in the Western World), most of us failed to perceive how unexpected and difficult this transition must have been for the average person at the time.  In just a few short years, most professions (and the social status associated with them) disappeared or had become irrelevant, the education that a person had earned was widely acknowledged to be worthless, a lifetime of money saved became nearly worth much less, and entire societies became nothing more than a memory or a butt of jokes.

We, in the West, watched this process with so much happiness and optimism.  How wonderful it was that the borders were opened (though few could afford to go anywhere or do much of anything at first), that Western products were flooding into these markets (though very few could afford them for some time to come), and that real freedom was possible (though with free-market capitalism comes ruthless consequences for those who cannot compete).  We easily ignored the fact that many lives -- perfectly happy lives -- were destroyed or thrown into turmoil for years to come (some never recovered).  Of course I'm not arguing that Communism should have continued just as it was; I'm only describing the reality of this drastic change to Democracy and free-market capitalism.  But I use this example because I believe it is directly relevant to what is happening in our world at present.

So come with me back to here-and-now.  The disruptive transition we are starting to witness is being caused by the following trends:

  1. The Debt Bubble (enormous debt that mostly cannot be repaid)
  2. Demographic trends in nearly all prosperous countries (disproportionately aging populations that cannot keep earning and spending as they have been)
  3. Asset bubbles everywhere (except, arguably, gold)
  4. Technological innovation (disrupting the traditional employer / employee model, radically changing social relationships, and making new kinds of revolutionary movements possible)
  5. Extreme economic injustice (2% of the world's population owns 50% of the resources at a time when an economic crisis is coming into focus...a crisis that can very easily be solved by taking some of that money from the rich)

These 5 trends have been happening for some time, but the first clear signs of the new reality ahead started to become apparent with the real estate / stock market / bank crashes of 2007 and 2008.  These crashes came about because the bubbles cannot be maintained forever.  Every bubble eventually has to burst, however hard politicians and businesses decision-makers deny this and try to fight it.  How were US real estate prices supposed to keep going up when wages were not (due to technology and extreme economic injustice)?  How were all the bad loans made by banks ever supposed to be repaid (they couldn't, which is why the banks passed them off to unsuspecting entities to blow-up at some point in the future)?  How can governments continue solving these problems when they are already stretched to near-bankruptcy (too much borrowing and low taxes through good times and no spending capacity left now that we need it)?   

The problems are global and the crash will be (is?) also global.  Here are some more important questions that I think should prove that we are approaching some fundamental, disruptive changes to our world-order:

  • How can consumer spending continue when most of it was done on credit and on rising property values?  Wages have been flat for some time in the US.  Spending was a result of second-mortgages made possible by rising real estate values.  Middle-class wealth (and consumer spending) in Eastern Europe and so many other places was also based on their real estate price bubbles.  So what is the new economic paradigm if it cannot be primarily based on consumer spending?
  • How can there be a middle class with money to spend if unemployment is high, wages are flat, and the wealthy 1-2% control most of the world's wealth?  Who are businesses supposed to sell to?  How can they hire more if they can't increase sales?
  • How can the GDP grow when the population is aging and shrinking?
  • How can low taxes on the rich be maintained when the requirements for elderly pensions are increasing and the cost of healthcare is increasing?
  • Why should employers take on the expenses and burdens of hiring employees when work can so easily and productively be outsourced over the Internet?
  • How can a world-order based on cheap, available oil continue after oil starts to decline?
  • How can debtor nations avoid defaulting on their loans when they are running at an annual budget deficit with a flat or shrinking economy?
  • Why should a population continue to tolerate impossible circumstances if the rules governing society are not just and no realistic ideas are being brought forth to solve the obvious problems we all understand?

Of course there are other similar questions, but I'll stop there for now.  Let's remind ourselves that the USSR collapsed because it wasn't feasible to continue under the prevailing economic model and social structure. Let's also remember that it took a long time.  For how many years and decades, during Communism, did the leaders know that the system could not continue indefinately?  For how long did they project "normalcy" to the population even when eventual failure was all but inevitable?  In the end, the collapse was mostly peaceful because leaders knew they had no real choice.   So they did not fight it.

This is what will happen to our current form of economic world order.  In future posts and on the Abscondo Podcast, I'll begin to describe what I think the next world-order will look like.  More importantly, I'll try to tie this back to what it means in our real lives.  I'm not interested in proving whether the crash will happen.  That's going to happen with or without my analysis. :-)  Instead, I'll be talking about practical solutions now and into that next phase.

Structured discipline, controlled chaos, and the in-between

As a follow-up to my last post, it should also be said that too much productivity can make you a miserable drone!  Then again, too much chaos and a lack of focus can suck up your time, your energies, and your life's meaning just as fast.  So there must be some sort of ideal balance. 

In my ideal world, there's structured discipline (focused work with a purpose) and then there's controlled chaos (going crazy for a limited time and trying to stay within some reasonable, self-imposed limits).  Time spent in either of these two states is what makes life successful, thrilling, and happy.

Then between these two states is something safe, boring, no fun, unproductive, and truly a waste-of-time.  This is where most people (including myself) live if they do not force themselves to the polar opposites (which I've just described above).  It is the "in-between" that should be minimized or even avoided because this is where you waste time and even waste your life!

How to avoid the in-between?  Schedule the extremes and force yourselve into them.  How else would one hope of swinging back-and-forth between these modes if not through structure and scheduling?

Life productivity

Friends often ask me how it is possible to get everything done that I do.  I don't believe in false humility, so I can say that I'm quite satisfied with this partial list of what I've gotten done this year so far:

- I left one job with a company in Boston and two weeks later found a better one with a company Canada.  In my first quarter, my measurable sales output was equal to the other 7 individuals on my team combined.

- Wrote and published my book, Love It or Leave It: The End of Government as the Problem

- Gave 16 radio interviews

- Recorded an album

- Lost 20 pounds by changing diet and exercising up to 6 times per week

- Spent 3 weeks visiting my family in Wisconsin with my wife and child

- Went to Greece for a few weeks, visited Budapest for a weekend, and spent a few weekends in the High Tatra mountains in Slovakia.

- Improved my guitar and vocal skills by practicing up to 5 times per week

The larger point is, it is possible to accomplish things like this even if you have a 1-year-old.  Furthermore, it is possible to accomplish all of this while spending plenty of time with your family or doing whatever else it is that you value.  All of this is possible if you can work from home and do so in a highly effective, efficient way.

Each morning, I get up with little Isabella and spend a few hours with my family as we have breakfast.  I see her and Sofia from time-to-time as I get coffee, take a break, or have a shower after a workout.  I see my family at lunch, am available most early evenings to have dinner with them, and we manage to get our 1 1/2 year old to bed by 7:00 every night (part of the reason I believe she is so well-adjusted is that she gets plenty of sleep).

I spend almost every night away from my computer with Sofia (we also get a baby-sitter and go out at night once or twice per week).  Weekends are spent either going to festivals in the area, visiting Sofia's parents (eating and drinking way too much of course), going on mini-trips, or sometimes just hanging out on the balcony listening to music and playing with Isabella.

I'm grateful for this lifestyle I have designed, but I'm not entirely satisfied yet.  My goal is to work even less, make even more money, and establish a larger audience for my music and writing.  I've been reading the 4-Hour Workweek by Timothy Ferriss.  I found out that there is one other person out there who has come to so many of the same conclusions as I have...well, not philosophically, but in terms of how to structure and live your life.  I recommend this book to anyone who wants to maximize the potential of their life.  Some of what he says and does is a bit crazy and extreme (even to me), but if anyone wants to live a fuller, more successful life then I would certainly recommend this book.

Of course there is no standard, cookie-cutter way for anyone to design a life that is right for you.  Your ideal lifestyle is as unique as you are.  Your profession and work skills are different from mine (though inside sales is a pretty good profession if you want to escape the office), just as your idea of what you want to do with your days is different from mine (Tim Ferriss mostly likes travel and competition while I like to use my time for creating and searching for truth / meaning).  The goal is to cut out all of the crap you don't want to be doing (work) and make time for doing everything you actually want to do.

When I told friends, 5 or 6 years ago, that I only work 2 hours a day (though I had a full-time job), they thought I was lazy, crazy, and that I was sure to get fired.  What they didn't know is that, if you do only what actually gets the results, it only takes 2 hours a day!  The rest of it is done out of habit or guilt!  When I cut out all of the bullshit that goes on in the office, I found myself far more effective and successful in the same job I had when working in the office (though I had just moved across the world).  The trick is to make sure your boss doesn't know your hours, and the only way to do this is to work from home.  Better yet: start a business and avoid having to justify yourself to a boss at all.  That's next on my list.

I just wanted to share this because I think that anybody's life could be better if they found ways to eliminate the crap or to outsource it to India (I'm only half-joking).  Your time is precious, your life is short, your dreams are real and possible.  There is so much you can actually accomplish and become in your actual time...with persistence and intelligence.

Defining God as ignorance (repost)

I'm reposting the following article from my archives because, when I did just that on Daily Kos the other day, it generated a fascinating follow-up discussion.  Click here to read the comments.

The longer one is free from the influences of religion, the more clearly one is able to see it.  I was watching a discussion on Slovak television last night between 5 scientists, from different fields, who all agree that science cannot explain everything and so, therefore, there must be a higher power or God.

Of course I've heard this argument before.  After all, it is probably the least controversial, most non-committal position on religion to say that you believe there "must be some sort of higher power".  While such a position on the matter is safe and non-offensive, it is equally absurd.

Next time a person says something along these lines, ask them exactly why they believe there "must be a higher power".  The experts I mentioned on this panel have apparently thought long and hard on the topic.  They explained that, while science can explain how things work down to the most intricate detail, science cannot explain why.  Imagine a child asking a question such as, "Why does the light bulb make light?"  You can explain all the details about electrons, circuits, etc., but you will probably only have the same question repeated, "But I still don't understand why the light bulb makes light."  Why light?  It's an interesting question that demonstrates nothing other than ignorance.  In this case, I'm not using the word ignorance as a negative thing.  To the contrary, to ask that question shows a sort of humble respect for the fact that we don't really understand space and time completely.

But it is a very long and absurd leap to say that, because I do not or cannot fully understand this matter, there must be a God in the sky who is watching us, who sent his only begotten Son, the Lord and Savior Jesus Christ, down to earth to save us from our sins.  A complex mind, a humble mind, is able to accept the fact that we don't know everything...we cannot know everything.  This doesn't make us weak, it makes us humble and respectful to nature and our place in it.  A simple mind arrogantly makes up or believes ridiculous stories in a desperate attempt to provide comfort by pretending that complete truth and wisdom can be obtained.

Another interesting example was discussed.  An environmental scientist discussed the idea of photosynthesis.  He described the perfection and elegance of this process.  He talked about how there is perfect balance, no waste, no externalities.  He concluded that only a Higher Power could have designed such a thing.  What he demonstrated was an embarrassing lack of understanding about the principles of evolution.  In fact, evolution explains photosynthesis quite well.

Evolution explains everything life is and everything life does.  Evolution involves living organisms competing for resources.  The sun is a resource and plants take advantage of it.  They also take advantage of water and CO2.  What they produce as a byproduct is oxygen.  But one organism's waste is another organism's resource.  Animals breath oxygen and can eat plants.  The net result looks like perfect balance, when in fact it is the result of a process.  That process is evolution.  Where there isn't enough water, plants don't grow.  Where there aren't enough plants, animals don't exist.  What we see is a state of balance, but it isn't because it was designed that way; rather, it is because some organisms died and others succeeded...some species lived and others went extinct.  While we humans might perceive a perfectly designed balance, it is only because we are biased by the perspective of our existence in a single space and time.  What some people can't comprehend is that billions of years led up to this moment and a lot of stuff had to happen to make things the way they are.  To fail to understand this is to fail to understand evolution.  Evolution is the most basic principle of science.  You cannot call yourself a scientist if you don't understand it thoroughly.

On a side-note, it cannot be true that both evolution is true and religion is true.  If you understand evolution as everything life is and everything life does, if you understand that every idea, every word, every thought is a product of the process of evolution (not just the biological aspects of life but also the behavioral), then you understand that our notion of religion is, itself, a product of evolution.  You understand that The Bible, The Koran, or any other religious work is simply a product of the process of evolution.  Evolution explains it perfectly.

One of the survival traits of being human is the desire to understand and explain.  It is this very important impulse which has led us to survive and thrive in a harsh natural world.  But we have to be honest about the limitations of this impulse.  The simple fact is that we will never know whether anything happens after death.  We will never comprehend the concept of infinity or understand what was before time.  We will never understand exactly how something may have come from nothing.  There are concepts we are probably not able to understand.  We have to find the courage to resist our egotistical need to feel that we know everything.  We need to stop "plugging-in" the concept of God whenever we encounter something we do not, and cannot know.  It is perfectly acceptable to be at peace with the idea that some things cannot be known.  The alternative (making up stories to explain the things we don't know or cannot know) makes a person look really silly.

Look at it mathematically:

(What we do know) + (What we don't understand, or "X") = (Complete and perfect knowledge)

Are we going to plug in religious stories and pretend we have complete and perfect knowledge, or are we going to find peace in letting "X" be "X" (which it always will be, regardless of how hard we try to explain it away)?

The morality of the London riots

Despite the breathless shock and the pleading rationalizations of TV news anchors, I don't believe that the rioters, looters, and vandals in London over the past week have any  responsibility to explain or to morally justify their actions at all.  These are angry, frustrated people living under a national and global system that, itself, cannot be morally that is designed to exploit its citizens economically, indiscriminately murder them in wars based on lies, rob them through slick financial instruments, and systematically loot the world of all of its natural resources.  This is a system that is designed and run to destroy lives and destroy the world for the benefit and pleasure of the elite billionaires.  How dare they ask the rest of us to morally justify anything.

When the world is, indeed, run by entirely selfish elite bankers, big oil, big defense, big pharma, etc., and no real democracy exists which would give its citizens the opportunity to instrument any real, fundamental change in the system (at least in the US or UK), when the government itself is clearly corrupt and illegitimate, then any action that involves the looting or destruction of property is probably not unjustifiable at all.

If individuals exist who are willing to risk enormous consequences (prison) to go out there and express this anger and frustration, then so be it.  When you oppress, sometimes people get fed up and fight back.  It is what it is and it should be totally expected.