Hard Water Stains

Raising The Capital Gains Tax ≠ Socialism.

2012-01-25T10:04:00.001-07:00

Not to be painted red or anything but: raising the capital gains tax ≠ (does not equal) socialism.

A friend posted an interesting story on Facebook, summarized here, it uses the example of true socialism in the classroom setting. It does a perfect job of showing us the faults of Marxist socialism, and I agree with it completely. But here is where it breaks down: The point of the post was not to warn against Stalin's communism, or Marxist socialism (or perhaps a critique on why you shouldn't live in Cuba), instead the post calls it "Obama's socialism". Now I'm not Obama's biggest fan, by any measure, but I am a fan of the facts.

The facts:
- Democrats, including Obama, want to increase the capital gains tax above its current level of 15%. But haven't yet. Probably because of political consensus and the economy.
- The capital gains tax is a tax on the money you make by the investment/ownership you have in a company (investment income).
- In 2006 President George W. Bush extended the lower capital gains tax.
- In 2010 President Obama also extended the lower capital gains tax.

If Obama were trying to raise it to 100% then I would have my issues, but he isn't. So quit fear-mongering.

Tax example: If I made a cool $2,500,000 (taxable income) in 2011...
- in the form of a CEO salary I would be taxed at about 33.79%, which is about $845,000.
- in the form of an investor/owner, or smart CEO who requests his pay in stock options, I would be taxed at 15%, which is about $375,000.

The everyday working person, who makes their money via wage income and who often has minimal abilities to achieve investor/owner status*, is taxed with a progressive tax. When that person moves up in the world and makes more money, they are taxed more (up to 35%). That makes sense (with some minor reservations). But here is the problem: if you make your money via investment income, then the most you will be taxed at is 15%.

What does this mean? The US tax code favors investment income over wage income. Pure and simple.

As an aspiring business owner and someone who has directly benefited from low capital gains tax, I understand the arguments - but I'm not buying it any more. Our values need to change, we need to show that we value the "average American".

This actually reminds me a bit of a Ted Talks video with the host of Dirty Jobs Mike Rowe. http://www.youtube.com/watch?v=IRVdiHu1VCc

*I know, I know, anyone can get an E*Trade account. Or anyone can get a 401k, IRA, or Roth IRA. Blah, blah, blah.
- Fact is most people don't trade stocks on E*Trade, because they don't have the disposable income to make those kinds of bets (I mean investments, oops).
- As for retirement vehicles such as a 401k, IRA, or Roth IRA, I do believe they should be taxed at a lower rate. These are long-term investments (real long-term, not fake 1-year "long-term" capital gains). The keyword in this case is retirement.

I Did A Guest Post

2011-10-10T11:32:00.000-06:00

My writing skills and experiences are so in demand that I did a guest post about an experience I had on an airplane. You can read it here: http://karinkas.blogspot.com/2011/10/what-not-to-do-on-airplane.html

TEASER: Lets just say people are a bit edgy on airplanes ever since 9/11.

Ok, ok, that may be my beautiful wife's blog - but that does not change the fact that I did a guest post!

Will Money Buy You Happiness?

2011-07-14T23:17:00.001-06:00

A while back ago my boss posed a question: Will money buy you happiness? My answer was: yes and no. That's a pretty lame cop out.

I felt conflicted with the conventional wisdom and my personal feelings. Then I heard a podcast by Planet Money, and (from an economic standpoint) yes it does...kind of. Feel free to give it a listen: http://www.npr.org/blogs/money/2011/03/09/134370052/the-tuesday-podcast-money-buys-happiness

I would say that money makes life easier, not necessarily happier. Having an easier life creates less friction for happiness. So, my answer stands.

Spurned

2011-02-20T10:00:00.001-07:00

Hello Minions,

Karen and I recently made and posted our silly stop-motion short film The Adventures of "The Pepé". The film can be found on YouTube here: http://www.youtube.com/watch?v=N00pBOTCh_o. The blog post can be found here: http://hardwaterstains.blogspot.com/2010/12/pepe.html.

Because of "The Pepé" and its runaway success we decided to do another. This time with no tripod, no clear plot, and significantly shorter...BUT! this (very) short film now features sound! As my grandpa would say "You made a talkie" - he's that old. We spared no expense on the voice talent (myself). The title is Spurned. Take a look:

http://www.youtube.com/watch?v=GZcrFkjE8TI

Bah! Humbug!

2010-12-25T08:11:00.000-07:00

Minions, do you think I am a Scrooge? Am I a grumpy person during the holidays? If you ask my wife her response is a resounding "YES!"

I suppose I can't blame her, I do have a number of qualities that stack against me.

I am generally a very temperate person, staying pretty even keel regardless of the season. Juxtaposed my wife, I can see her point. She lights up during the holidays. She can't stop thinking of how wonderful our apartment will look with all the new Christmas decorations or what deliciously amazing holiday foods she could make. Don't get me wrong, I love how creative my wife is and I love to see her excited - just don't expect me to be bouncing off the walls.
As a general rule, I do not like Christmas music. Every year some one-hit wonder says "You know what? White Christmas is in need of my voice." No, no it is not. Not only is your imitation regurgitated and unoriginal crap but it has forever sullied the original. There are few exceptions to this rule.
I really do hate Christmas music. Perhaps I am just restating #2, but does it really need to be played for over a month? Really? Why would I want to dedicate 1/12th of my yearly music listening time to "artists" who I wouldn't have listened to during the other 11 months?

When pressed, my wife confesses that it is my disdain towards the music of the season. In my defense I do enjoy a few Christmas songs. The problem: If I took the time to categorize and determine my ultimate Christmas playlist it wouldn't be much of a playlist - and referring back to #3, I would grow tired of it by the end of the day (let alone a full month).

Postscript: I do appreciate the reason for the season and am thankful for the true gift we commemorate every year. Merry Christmas!

"The Pepé"

2010-12-09T12:21:00.001-07:00

Hello, Minions. Earlier this week my wife Karen and I were hard at work on a fun little short film project. It is titled The Adventures of "The Pepé". It is actually stop-motion movie we pieced together for kicks and giggles. I hope you check it out. (more below the video)

http://www.youtube.com/watch?v=N00pBOTCh_o

This project got me thinking about the brave new world of consumer engagement in advertising. Most forms of advertising is one sided (the TV yelling at you to buy their products). More and more companies encouraging their customers to be engaged and to spread their message for them. I believe what my friends tell me far more than a clever commercial (as witty as it may be).

How easily would it have been if Charmin (the maker of the best toilet paper known to man: Charmin Ultra with Aloe) posted a competition for the highest voted video that focuses on one of their products? The winner would win X (perhaps money, camera equipment, free TP, whatever).
At the very least it would have had the following characteristics:
- Cheap: Charmin doesn't have to do spend millions of dollars. And the prize can be relatively modest.
- Spreadable: People are going to be so proud of the work they did that they will post it everywhere to get votes.
- Increases the bottom line: They'll make money. People will need to buy the product to film it - consider it paid sampling.

What I am saying is this: Charmin, you can make your check payable to: Jason Marrott.

Commitment

2010-12-02T15:56:00.004-07:00

Today a section from Advanced Riskology stuck out:

What is commitment?

Merriam-Webster defines it as “the state of being obligated or emotionally compelled.”

Commitment, in my mind, is the resolution to succeed. It’s the burning desire that absolutely has to be present in order to do your impossible [objective]. It’s the drive that keeps you moving forward when defeat looks certain. It’s your obligation to risk everything for success because living without it seems pointless.

This applies to a lot in my life, but it especially reminds me of the advice I gave a loved one recently. If you really do believe in something (or love someone, or need something) nothing should deter you from it. If it is a worthy enough to believe (or love, or need) then it is worthy enough to commit to (or stand behind, or submit yourself to, or care about). It is not impossible, only hard.

Sorry for the ambiguous nature of this post.

MEMO: Congress shall make no law...

2010-11-19T15:16:00.003-07:00

Below is a list of all the Senators who voted to censor the internet.

Patrick J. Leahy -- Vermont (Democrat)
Herb Kohl -- Wisconsin (Democrat)
Jeff Sessions -- Alabama (Republican)
Dianne Feinstein -- California (Democrat)
Orrin G. Hatch -- Utah (Republican)
Russ Feingold -- Wisconsin (Democrat)
Chuck Grassley -- Iowa (Republican)
Arlen Specter -- Pennsylvania (Democrat)
Jon Kyl -- Arizona (Republican)
Chuck Schumer -- New York (Democrat)
Lindsey Graham -- South Carolina (Republican)
Dick Durbin -- Illinois (Democrat)
John Cornyn -- Texas (Republican)
Benjamin L. Cardin -- Maryland (Democrat)
Tom Coburn -- Oklahoma (Republican)
Sheldon Whitehouse -- Rhode Island (Democrat)
Amy Klobuchar -- Minnesota (Minnesota Democratic-Farmer-Labor Party)
Al Franken -- Minnesota (Minnesota Democratic-Farmer-Labor Party)
Chris Coons -- Delaware (Democrat)

Doesn't anyone understand the First Amendment?

What is this: China?

Original article: The 19 Senators Who Voted To Censor The Internet

"...the end of the republic"

2010-11-02T09:00:00.004-06:00

Benjamin Franklin uttered startling words nearly 200 years or so ago, that undoubtedly has come to fruition: "When the people find they can vote themselves money, that will herald the end of the republic."

Lobbying, special interest groups, campaign contributions, and social entitlement is getting out of hand.

Private prison companies drafted the Arizona immigration law: Prison Economics Help Drive Ariz. Immigration Law. Say what you will about the immigration law, but this type of lobbying has got me worried.

Austerity Plan

2010-10-29T14:03:00.001-06:00

The inner need to look at an issue from another angle (and my friend Jeff's comments) has brought me to another post where I critique myself - as there were a few inconsistencies that need to be clarified.

1. When you increase taxes you are then taking money out of peoples pockets and therefore they have less to spend. They are then not able to buy that flat-screen TV (or at least need to delay it) - then that TV salesman is unable to get a new laptop… As I said in my original post: "GDP will go down."

2. When you decrease spending you are then taking money out of government employees pockets, and, following the same argument as above, taking money out of the system. Once again "GDP will go down."

"GDP will go down." The austerity plan of increasing taxes and decreasing spending will both make GDP decrease. The potential problem would then be as follows: now since everyone earns and spends less money the government collects less taxes (from incomes, goods purchased, etc.) despite the higher tax percentage (no longer assuming that GDP is constant). How much less is debatable - they could actually collect less, or more, or the exact same amount depending on the types of changes made.

I left out the specifics. I didn’t specify how much to increase taxes or who, in our variable tax system, to increase it to (Big or small businesses? Rich or poor people?). I also didn't specify which public services to decrease or how much. I suppose I would leave that to the bickering politics.

Are we at the happy medium in tax rates and public spending? To suppose that we are at the most optimal level of taxes is preposterous. These rates are determined by bickering lawyers turned politicians, NOT economists (to quote Jeff: "I think Democrats will eternally believe we are below that happy medium and Republicans will believe that we are above it."). Because of this, my proposed austerity plan would be whittled down to its bare bones. Perhaps those bones would have enough impact to make a significant impact on the national debt (but still unlikely).

NPR did a follow-up (think rebuttal) story. In it a Mark Blyth, of Brown University, argues that increasing taxes is too hard - so the more likely route for the austerity plan is to decrease public spending. By his logic, this will affect the lower income citizens more (as they use a proportionally larger amount of public services). I do agree with his logic. See the article here.

Deficit: Which way out?

2010-10-21T14:23:00.006-06:00

Definitions:
- Public programs: health care, social security, police departments, national security, border patrol, national parks, etc. More spending on public programs the more in debt we get. Money out.
- Taxes: Income, sales, state, property, etc. In business speak, this is actually the governments "revenue." Taxes pays for the spending (see above). Money in.

Republicans (Center Right): Decrease public programs (decrease money out), decrease taxes (decrease money in). This policy basically comes up as a wash.
[That’s not even including the propensity to increase the National "Defense" budget (increase money out).]

Democrats (Center Left): Increase public programs (increase money out), increase taxes (increase money in). Another mainstream policy, another wash.
[Now no Democrat will openly admit to increasing YOUR taxes, but they are willing to let Bush's tax cuts expire, thus allowing the tax rate to increase.]

In our political space no one is stepping up to offer a viable solution that will actually have a meaningful effect on our deficit.

Enter the United Kingdom. Thanks NPR for reporting on this.

The Austerity Plan: Decrease public programs (decrease money out), increase taxes (increase money in). This plan is the "tighten their belts and deal with the negative consequences" in my I'm Good For The Money post.

It will not be popular. It will not be easy. It will suck for a few years. GDP will go down. This is the tried and true way of paying off debt - increasing your revenue, and decreasing your spending.
[It is also the method the International Monetary Fund (IMF) uses when they help a country on the brink of bankruptcy.]

I'm sure some of you will say "Why not just decrease spending?" That is an option, the only issue is that its not fast enough - debt this size is not going to be fixed overnight. And yes, it MUST hurt!

Limited Budgets

2010-10-20T11:57:00.002-06:00

I am in the business of selling advertising space. I approach businesses and say "Hey, place your ad in our product." (my exact words...perhaps I could change my wording...)

Seth Godin made an amazing point (albeit 19 months ago) in his post Do Ads Work?

How Will You Measure Your Life? by Clayton M. Christensen

2010-10-18T16:03:00.002-06:00

Great inspirational talk by Clayton M. Christensen from the Harvard Business Review.

Great quote: "Think about the metric by which your life will be judged, and make a resolution to live every day so that in the end, your life will be judged a success."

I also like the bit about staying out of jail.

YOU Benefit from Govt. Spending

2010-10-14T14:11:00.005-06:00

Minions, my last post painted me in a way I refuse to be viewed. The devils advocate in me compels me to see and give an alternative view - as there are merits on either side.

The problem with cutting spending is that we all benefit from it.

I challenge you to tell me that you don't enjoy:

these nice paved roads. Then you complain when there is a pot-hole: "That’s what you get with government spending!"
public education system. Someone has to get those brats out of your hair.
firefighters. They weren't originally government jobs, they were paid by the insurer of the burning house. No fire insurance? They would just pass on by your burning house.
police. Despite those dang speeding tickets.
public detention centers (prisons). You have to do something with those who wish to take away your unalienable rights (looks funny spelled out).
public libraries. ~~The wife~~ My beautiful and amazing wife and I have recently taken advantage of this resource.
public parks. I hear Central Park is nice...
the natural beauty of national & state parks. We should all thank John Muir for his activism toward the "nationalization" of America's beauty.
museums. I hear things get interesting at night...

A few of my favorite touchy ones:

national security. At least I don't fear a missile attack leaving my house.
Medicare. Old people pop some expensive pills.
Medicaid. Say what you will, but if you are down on your luck you would be thankful.
Social Security. Well I certainly wouldn't want them breaking a hip while mowing my lawn.

I'm sure there are plenty more.

Yahoo News spells out the real problem: Everyone hates the deficit - but likes the spending. My favorite quote: "Cut spending, but not if it takes money from what's nearest and dearest to me."

I'm Good for the Money

2010-10-05T14:27:00.003-06:00

Fictitious Case Study. Facts:
1. My name is James Smith.
2. My yearly income is about $14,600 a year.
3. I owe $13,500 in debt.
4. This basically means that I owe about 92% of every paycheck.
5. I use new credit sources to pay down old debt.
6. I have no reason to expect a strong increase in my income anytime soon.
7. Thinking the market had bottomed out, I invested heavily in real estate, and risky stocks.
8. A few of these risky stocks are going down in flames - so I invested more borrowed money to prop them up.
9. I expect my kids to tighten their belts and deal with the negative consequences of my reckless spending habits.
10. I expect this, despite knowing that the outlook is bleaker than 40 years prior.
11. I don't know why, but I still get about 5 credit card offers sent to me in the mail everyday - I just keep filling them out.

Factual case study. Facts:
1. My name is the United States of America.
2. My national "income" (Gross Domestic Product or GDP) is about $14.6 trillion a year.
3. I owe $13.5 TRILLION in debt (let me say that differently: I owe $13,500,000,000,000.00).
4. This basically means that I owe 92% of ALL transactions made in the US in a year (GDP).
5. I use new credit sources to pay down old debt.
6. I have no reason to expect receiving a strong increase in my GDP anytime soon.
7. To stem another potential depression, I invested in real estate (Freddie Mac, Fannie Mae), and risky stocks (GM, Chrysler, AIG, Citigroup, etc.).
8. A few of these risky stocks are going down in flames (AIG) - so I invested more borrowed money to prop them up.
9. I expect future generations to tighten their belts and deal with the negative consequences of my reckless spending habits.
10. I expect this, despite knowing that the outlook is bleaker than 40 years prior.
11. I don't know why, but when people get scared of losing money in bad investments - they always invest in treasury bonds (basically extending my credit limit).

Sounds like a safe bet to me...

US Debt Clock

Insight on the Prius

2010-09-28T11:20:00.004-06:00

I have wanted to post on this subject for some time (sorry for the delay).

Toyota executed a supreme (yet ugly) job on the Prius. Toyota found a way to engineer and profit from hybrid cars.
Essentially, Toyota saw that a type of consumers needs were not being met. Namely: people who are open to a hybrid AND people who liked hatchbacks. There aren't a whole lot of that type of consumer out there, but that doesn't matter because Toyota hit that combo out of the park.
Along comes Honda: "Hey, we want that success too!" Then comes their execution…or lack there of. They release a fake Prius with a Honda symbol on it (well actually they released the Honda Insight, but it is essentially a carbon-copy of the Prius). Take a look at the image below. Just try to tell them apart.

Honda could have said: "Ok, well Toyota has the hybrid/hatchback lovers, lets go after the hybrid/[insert: sedan, coupe, mini-van, SUV, crossover, truck, motorcycle, etc.] lovers." No. Instead they decided to play catch-up and try to steal market share from Toyota's Prius. Honda could have made its own mark in the hybrid wars by differentiating from the competition, but it took the easy (not to mention the less successful) way out.

My personal preferences: I wouldn't mind having some of the benefits of a hybrid (fuel efficiency, decreasing our oil dependency, etc.), but I HATE hatchbacks. There just aren't enough good sedan hybrids out there (or perhaps auto makers haven't done a good job marketing them to me).

[Image: 2010 Toyota Prius (left), 2010 Honda Insight (right)]

The Block went Bust

2010-09-23T09:42:00.001-06:00

Today we saw an industry leader fall prey to new comers (who were still wet behind the ears). Blockbuster has filed for Chapter 11 bankruptcy protection (CNN news story).

What does Chapter 11 mean? Basically, it’s a way to decrease your debt and restructure the business quickly. They will now owe the people who lent them money a lot less. Does that mean Blockbuster will go the way of the dinosaur? No, they could make a strong recovery (depending on their leadership).

What happened? Blockbuster was the titan of movie rental after all. No one else came close (Hollywood Video, Shmollywood Video). They got too comfortable, they felt indestructible. Competition saw an opportunity (two opportunities actually) to give customers added value that they didn't even know they needed. They saw something that Blockbuster could have easily seen, but neglected and overlooked.

Lately, I have read a number of blog posts by Seth Godin (an amazing and insightful writer). Upon hearing the news this morning, one in particular blog post stuck out. The post is titled Learning from Singer. To sum it up: "The best marketing strategy is to destroy your industry before your competition does."

Question Everything (part 3)

2010-03-28T17:46:00.003-06:00

Opinion (or was it news, I always forget)

Opinion is hard to see at times - because it is often sold as truth. Perhaps that is why I don't like watching the talking heads on 24 hour news networks. Lets be honest, when a channel has to turn 86,400 seconds everyday into riveting genius, its a tough sell - on over 11 channels mind you (C-SPAN1, 2, & 3, CNBC, CNBC World, Fox News, Fox Business News, CNN, CNN Headline News, MSNBC, Bloomberg - to name a few). So, what do they do? They throw in a healthy dose of speculation, political beliefs, and greed under the guise of news - it sells a lot better than facts. Check out this Harvard study (long).

News:

- is "just the facts."

- is unbiased.

- is fair and balanced (for reals).

- allows the viewer the ability to make up their own opinion.

- is not being spoon fed opinion, while being told it's news.

Don't get me wrong - opinion is important. Perhaps this is why Mohamed El-Erian's father (from part 1) chose to read from 4 different newspapers a day. So that he could glean truth from all the distortions and formulate an opinion of his own.

I have my opinions on health care, freedom of speech, the second amendment, abortion, the economy, business regulation, etc. It comes from my personal beliefs and how I view the world. But it is mine, and it is not to be manipulated by salesmen (or as we like to call them, pundits & correspondents).

"But you don't have to take my word for it…"

PS: The shows I REALLY like are the ones who pit two talking heads from opposite political spectrum's against each other. Let the loudest and rudest one win! Unless the host cuts them off....

Question Everything (part 2)

2010-02-28T18:13:00.000-07:00

"But what of faith?"

From part 1, you may have suspected that I am advocating relative morality - that whatever a person believes is good and right for them but what I believe is good and right for me. I assure you that I am not. I strongly believe there is a right and a wrong, truth and error. But as you may recall, I advocated "questioning everything" - and therefore if everything is open for discussion and debate there must be no universal truth. Lets separate "everything," in my "question everything" mantra, into two categories: truth and opinion.

Truth

Truth is unchanging, it stands the test of time, and often times it is not seen but felt. I'd like to specifically talk about religious/eternal truth. I believe that questioning and seeking after faith will lead one to this truth. I have been raised in a religious home where I was encouraged to question what I was taught, search for answers, and to believe in things that I found out for myself (not just what my parents believed). Most importantly, I was taught that the only true answers I would ever receive was from the source of all truth. I believe that there is absolute truth. The bickering amongst religions is due to man's opinion getting intertwined with truth.

Opinion to follow...

I'm selling my car

2010-01-19T21:35:00.003-07:00

Hello minions, I know I have not posted in a while. I've been busy.
I just graduated, got a real job, and am now trying to sell my car.

It saddens me that I must part ways with it, it is a very nice car. But its time to let go.

Minions, you know I don't ask you for too many favors...but I need you all to pitch in and purchase my car - OR you could just tell everyone you know and have them buy it. The choice is yours.

I WILL eventually write real posts, but first things first.

"Please buy my product."

http://saltlakecity.craigslist.org/cto/1561250918.html

Question Everything (part 1)

2009-07-25T12:10:00.005-06:00

I have always tried to live by a certain standard: "Question everything." This stance has raised an eyebrow or two. In fact, even my wife dislikes my "devil's advocate" stances. So I will defend it here.

While reading a FORTUNE magazine article titled The Best Advice I ever got (here) I was reminded of how important and powerful this stance can be. Fortune interviewed titans of their spheres (Warren Buffet, Bill Gates, Tiger Woods, Colin Powell, Eric Schmidt, etc.) to glean wisdom from their experience. One such interviewee was the CEO and Co-Chief Investment Officer of PIMCO, Mohamed El-Erian, a man you would have never heard of unless your into finance. PIMCO runs the worlds largest mutual fund, and a total of $756 billion of assets under management. Basically ... he's a big deal.

The advice El-Erian gave was this:

"We were living in Paris, back when my father was Egypt's ambassador to France. Each day we used to get at least four daily newspapers, from Le Figaro on the right side of the political spectrum to L'Humanité, which was the newspaper of the Communist Party. I remember asking my father, Why do we need four newspapers? He said to me, 'Unless you read different points of view, your mind will eventually close, and you'll become a prisoner to a certain point of view that you'll never question.' … There's a tendency for everyone to operate in a comfort zone and to want to read what is familiar to them. But if you are just used to following one person or one newspaper, you will miss these big shifts."

He applied this advice to understanding the financial markets, but I think we can internalize it in a broader sense. I have known many people in my life that subscribe to only one point of view (or newspaper) and refuse to even consider the merits of another view. Views may come in the form of politics, religious convictions, future financial performance, self-esteem, whatever. If we stay open and aware of all views within that sphere we are more apt to make better, rational judgments and avoid becoming "a prisoner to a certain point of view."

I Will Harm

2009-03-31T12:12:00.002-06:00

In the last post I ended by asking: can our minds deliver a negative reaction to sugar pills? The answer, interesting, is yes. Its called the nocebo reaction (Latin for I will harm). This is an even more confounding notion.
Think of it this way, you take in a sugar pill thinking its some sort of medication - and your mind, essentially, wills and creates a negative reaction. TO SUGAR!
Often times these negative reactions, or side-effects, are associated with the side-effects of real treatment. A strong example of this is that of hormone replacement therapy for menopause. The study (here), conducted by the Women's Health Initiative, had given a large group of women either correct hormones or a placebo for years (an average of 5.7 years!). They then took them off the pills. Upon discontinuing the treatment, moderate to sever withdrawal symptoms were reported by 40.5% of those who were taking the placebo compared to 63.3% of those on hormone replacement.
Think about it! You are taking a pill that they said was a hormone replacement pill, but unannounced to you, you have been taking a sugar pill for nearly six years - the whole time thinking that this little pill are replacement hormones and is helping you cope with your menopause. You stop taking it, and you begin to feel the very same withdrawal symptoms as someone who actually had the chemical hormones flowing through their blood for nearly six years.
My guess is that these women knew of the withdrawal symptoms and figured that the same would happen to them. That is when the mind then takes over and turns it into reality.
Minions, after reading these two posts (placebo and nocebo) you should see that your mind has incredible control over your body and, as an extension, the way you view the world.

"We do not see things as they are; we see things as we are." - Talmud

I Will Please

2009-03-23T12:36:00.003-06:00

Minions, I am going to break from my recent economic kick with a subject that I know very little. That subject is the mind-body connection. I've picked it because it perplexes me.
Let’s talk about the placebo effect (Latin for I will please). Think about it, you give a person a sugar pill (or some other inert substance) and suddenly their depression is gone. What does this tell us? It tells us that our mind has an incredible amount of control over our bodies, despite what some people think.

Here are some enhancing factors to the placebo effect:
* Color. Red, yellow, or orange worked better as stimulants. While blue, green, or purple worked better as depressants. (here)
* Big rather than small capsules.
* Two tablets are more effective than one.
* Branded proprietary tablets are more effective than unbranded ones. (here)
* The higher the price the more effective. By telling patients that a drug cost $2.50 rather than 10 cents pain relief increased from 61% to 85.4%.
* Injections have larger effect than pills. (here)
* Devices (like sham acupuncture) are more effective than inert pills.
* If administered by authority figures.
* If inert substance is pre-associated in past experience with a real effect. (here)
* Regularly taking placebo pills as opposed to forgetting to take them sporadically. (here)
* Enthusiastic supportive attitude of the doctor about their effectiveness. Example: the response of a placebo increased from 44% to 62% when the doctor gave the placebo with "warmth, attention, and confidence." (here)

All of these enhancing factors help us understand just how much our mind can influence our bodies’ response. The placebo effect happens when your mind delivers a positive reaction to an inert substance. The next question you should be asking yourselves is: do our minds ever deliver a negative reaction?

Baby You’re A Rich Man, Too?

2009-03-16T09:30:00.005-06:00

I am a huge fan of NPR's Planet Money and This American Life podcasts, and I encourage all to start listening to them. Anyways, recently This American Life did a collaborative story (Bad Bank) with Planet Money - it was a very well thought out story on the economy. One part really stuck out to me and I felt that I should share it:

Alex Blumberg (host): ...But beyond the balance sheet, David Beim [Columbia Business School Professor] has a much more profound reason why banks shouldn't lend. He shows me something on his computer.
David Beim: Ok, so here is a picture, a graphic, and a chart that goes back to 1916 and up to…
Alex Blumberg: We’re in his office, and we’re looking at a graph, and it's, basically, a measure of how much debt we the citizens of America, are in. How much we all owe--on our mortgages and credit cards and auto loans--compared to the economy as a whole, the GDP. And for most of history, the amount we owed was a lot smaller than the economy as a whole. This ratio, household debt to GDP bounces along around between 30 and 50 percent, for most of the '30s and '40s 50s, 60s, and 70s, right into the 80s. Then it breaks through 50 % in the 80s, starts heading up in the 1990s. And then ..
David Beim: From 2000 to 2008, it just goes, almost a hockey stick, it goes dramatically upward.
Alex Blumberg: Like a rocket.
David Beim: It hits 100% of GDP. That is to say, currently, consumers owe $13 trillion when the GDP is $13 trillion. That’s a 100 % of GDP owed by individuals. That is a ton.
Alex Blumberg: I'm going to ask a leading question, because I’m looking at a graph right now. Tell me professor, has there ever been a time where we owed that much before?
David Beim: I’m glad you asked me that. And guess what? The earlier peak, which is way over on the left part of the chart, where debt is 100% of GDP, was in 1929. This is a map of twin peaks. One in 1929 and one in 2007.
Alex Blumberg: Does that chart scare you?
David Beim: Yes. That chart is the most striking piece of evidence that I have that what is happening to us is something that goes way beyond toxic assets in banks, it’s something that had little to do with the mechanics of mortgage securitization, or ethics on Wall Street, or anything else. It says the problem is us. The problem is not the banks, greedy though they may be, overpaid though they may be. The problem is us. We have over-borrowed. We have been living very high on the hog. We are, our standard of living has been rising dramatically over the last 25 years, and we have been borrowing much of the money needed to make that prosperity happen.
Alex Blumberg: And so, when you see Congress, sort of saying we need more, we need to make sure there are strings attached to this money, to make sure the banks are lending it out, that doesn’t make any sense.
David Beim: It makes, not only no sense, it makes reverse sense. It’s nonsense. Because what the banks have done is already lend too much. The name of this problem is too much debt. I really think that's the heart of what's wrong with this. We have over-borrowed, and we have done that over many, many decades. And now it’s reached just an unbearable peak where people on average cannot repay the debts they’ve got. In the face of that, it is no solution to try to lend more.

I don't mean to get on a pulpit or anything, but those who belong to the same religion as me (The Church of Jesus Christ of Latter-day Saints) have heard this over and over again. The quote oft heard is "live within our means." The earliest I could find it in print was in an April 1957 General Conference Talk by Ezra Taft Benson (here). Fifty-two years ago. Perhaps its time we start listening.

You Only Give Me Your Funny Papers

2009-03-05T12:59:00.004-07:00

Now that we have completed the Show Me The Money series, lets focus on you, my minions. How can you get paid more? How can you avoid getting laid off? How can you get promoted? In troubling economic times sometimes mere survival is the name of the game. To receive positive answers to those questions we must identify what management values (additional reading - Show Me The Money: Economics of Exchange) in order to increase your value. Answer these questions:

• Do you add directly to the companies bottom line? How much?
• Do you directly make (or save) them money? How much?
• How good are you at what you do?
• If you quit today…
○ how long will it take to find a suitable replacement?
○ how long will it take to train this replacement?
○ how much would the company lose in profits in that time?
• How often do you actively use your brain while at work?
• Are your job tasks easy to learn?
• Are the requirements for the job in great supply (high school diploma)?
• Do you consider your tasks easy or difficult? Note: time consuming is not difficult.
• Does management think that every time they hear from you that they are going to have to put out a fire for you? OR, do they know that you have already put out the fire and redecorated while you were at it? Management wants solutions, not problems.
• Are you an asset or liability to the company as a whole? To your management? To your customers/clients? To those you manage?
• Do you make your management look good?
• Are you good for your word?
• Are your managers aware of your abilities and accomplishments (work related)? Note: Tread lightly on this issue, it could backfire.
• Do you play well with others?
• Are you indispensable to your manager as a person? Employee? Contributor?

These questions will help you determine your value within the corporation. If you feel that your value is low, increase it! Ask for more responsibility, seek out problems and solve them, be the best [insert job position here] in the company, and make your manager look good. Do what it takes to get the better position, increase your pay, or avoid the chopping block.

One final question for you to stew on:
Think of a top paid professional athlete (Michael Jordan, Tiger Woods, etc.). Why are/were they so successful? How would they answer those earlier questions? How can they do better?