Category Archives: Economics

UBI is not the solution

The idea of Universal Basic Income is like a band-aid on a sucking chest wound, it appears as though the situation is solved, but the underlying problem remains.

UBI tries to solve the problem of inequality but will fail at this. Why? Because the problem of inequality can only be solved by the equalization of wealth. Yes, giving cash — outright — to a select few individuals, or group does, generally, lift those people up out of the mire of poverty, or elevate them enough, give them a glimmer of hope so that the specter of impoverishment is pushed to the shadows.

But, give everybody the same allotment of cash and all you’ll do is inflate the currency and we’ll be back to Zimbabwe or the Weimar Republic. The elites will still be thousands of times more wealthy than the median population.

That’s the inequality that will not be cured. That’s why a full coverage UBI will fail.

But what can we do? Well, we could start with understanding why the wealthy are wealthy. If we figure that out, and universally distribute that — whatever it is — then perhaps the inequality will be reduced, eventually, to a socially acceptable level.

So, why are the wealthy wealthy? No doubt there are dozens of reasons we could cite, but the primary one is that they do not work for their income. As Warren Buffet famously said “If you don’t find a way to make money while you sleep, you will work until you die.”

Okay, so what can we do with that thought? Let’s see, if the wealthy let their wealth earn them money, and if this is predominately done with investments in the corporations, the means of production, the growth and expansion of productivity, then somehow we need to get that into the hands of everyone.

What about this: create a financial instrument which can be distributed — UBI style — to every citizen of the country. Let’s say we create an ETF, an exchange traded fund, which is comprised of the rolling top 10000 companies and utilities, include bonds and treasuries in the instrument – a smorgasbord of components that represent the country’s economy.

We take that EFT and we give shares of it away to every citizen, one share per month, for life. We make investors out of every single person in the country, invested in the country itself, its progress, its future.

Some people will turn around and sell their shares right away. That’s okay, let them. They can use that money like the common UBI that has been proposed.

Others will let their shares sit. Accrue. Gain value and multiply. When they need cash for emergencies or buying a house or car, they can sell them then.

We could label this ETF: USAA — United States of America for All.

This would give cash to those who need cash, but for most, I suspect, it would give them a sense of participating in the wealth growth of the nation. Their investment would be making them money – “while they slept.”

This let’s every citizen participate in the economy just like the elites on Wall Street. This distributes Wall Street level prosperity down to Main Street where it’s needed.



Sure, this is not the whole solution — the wealthy still have thousands or millions of times more wealth than the median population. And there are solutions for that too — namely progressive taxation…

Employee Income Inequality Tax

Scaled Tax Schedule:

Scaled Federal Tax Schedule
Individual Income %Tax $Tax $Net
10000 10 $1,000 $9,000
11000 10.1 $1,111 $9,889
15000 10.5 $1,575 $13,425
25000 11.5 $2,875 $22,125
50000 14 $7,000 $43,000
75000 16.5 $12,375 $62,625
90000 19 $17,100 $72,900
100000 20 $20,000 $80,000
200000 21 $42,000 $158,000
300000 22 $66,000 $234,000
500000 24 $120,000 $380,000
1000000 30 $300,000 $700,000
10000000 40 $4,000,000 $6,000,000
100000000 50 $50,000,000 $50,000,000
1000000000 60 $600,000,000 $400,000,000

End of the boom?

Is the current “economic boom” over?

Although the unemployment rate is 4.4, this chart shows a more telling number:

“The employment-to-population ratio for prime-age workers, which measures the proportion of the population between the prime working ages of 25 and 54 who are employed.”


Not only this, there is another hidden factor, one we do not see even in this chart: what is the ratio of workers vs the TOTAL population? I’d have to say that this is much lower and sinking.

Why aren’t wages going up? Because there are so many people — not tabulated in this chart — those who have given up even trying to look for a job, though they could still work, who, when an opportunity presents itself, step in and go back to work.

If you had a huge inventory of canned peaches in your pantry, what would be the price you would pay for canned peaches in the market place? Pretty much nothing right? If you need peaches you just go into your spare peach pantry and pull out a can.

That’s the working economy these days. When new jobs show up, companies don’t compete to pay more for the rare peach who can do the job. They simply go out to the people pantry and pick up one who hasn’t worked for a year or five and start paying them their paltry wage. There’s no reason to increase wages when you have spare people, waiting on the sidelines, anxious to jump back in, if the opportunity is right.

I look at this curve and think: It’s over. Not just for this cycle, but forever. We’ve topped the chart in 2000 and the curve will now oscillate lower and lower. Work, as we knew it, is over.

Trading & gold mining: useless professions

To society gold mining is a useless profession.
The same is true for market traders.

What good is gold? It turns out gold is practically useless. A fraction is used in electronic circuits and an even smaller amount is used on the helmets of spacesuits or the surface of space telescopes. And it’s worn as a decoration, like beads of shell or glass ornaments for glamour and prestige. Other than that it’s pretty much useless.

Yet huge industries have been built, massive migrations of humans have traversed the lands and sailed the seas, all to converge on a location to shred the landscape, strip it of dignity, and tweeze out minute particles of Au. For what? Well, gold is money of course.

Only, it’s not. Gold has no real “value” to society. It’s only so called worth is that it’s rare, like gems, and as such coveted by humanity. You can’t eat or drink it, wear it (as clothing), use it to build structures or vehicles with, or make weapons or tools with. It’s, for all societal practical purposes — useless.

Yet still there are companies that dig for it. People who live for it. Television shows that exploit it. It’s a massive industry.

Hmm. Useless to society but huge investments of time and money and human effort put forth to pursue it. Kind of like market trading.

Market traders: day traders, high-frequency traders (and their algorithms), swing traders, proprietary trading shops, traders of every stripe, traders who don’t care a whit about the underlying trading vehicle, crude oil, or IBM, EURUSD, or VIX, or some derivative of any of these, these traders have no purpose.

Society does not need them. Just like society does not need gold miners. Both are useless professions.

Yet billions of dollars are spent to perfect the process and train the people. Billions of dollars that would be so much better spent for true societal needs. Worse still, thousands of the brightest minds and, like the gold miners — hardest working — people are lured into this emotionally empty and ultimately unfulfilling occupation.

Here’s a simple test to see if your job holds societal merit: if every trader or gold miner on the planet, today, chose to do some other society benefiting occupation, what would happen to the world? Would it stop? Would chaos ensue?

If every trader or gold miner quit today and did something else, something positive with their life, the world would instantly be a better place. Investors could still buy their stocks WITHOUT traders. Companies and farmers and produces could still trade commodities WITHOUT traders. Money would still exchange hands across borders through FX channels WITHOUT traders.

The system is setup to do all of this without the need for vampire like traders sucking drops of money like grains of gold from the machine that is the world market system.

Oh, but traders make it so much more efficient! No they don’t. That’s a rationalization for their existence which frankly just doesn’t work.

Just like gold miners have no real purpose in society, neither do market traders. They just don’t.


Who would love to create an app that keeps drunk drivers off the roads?

Mothers Against Drunk Drivers — that’s who.

We don’t need no UBER to commandeer the entire ride sharing economy. Lyft? Yeah, Lyft this!

What MADD might want to do is build their OWN app and offer DEALS through BARS around the world to get the app onto people phones and to provide a discount for app users IN THE BARS! Alcohol is CHEAP CHEAP CHEAP – and bars can afford to pony up a discount or three to those who use the app and hire MADDrivers to drive them home.

Mobile App for Drunk Drivers MADD!

Never to the stars

Humanity will never reach the stars.

Why? Well, yeah, why? Humanity will very soon be able to exist fully in virtual reality. Once we have perfect simulation of reality, then our imaginations of what might be in the Universe will greatly exceed what is actually there. Our stories will be much more alluring and billions of times cheaper to explore and investigate. As soon as we can “think” we’re exploring the solar system, the galaxy, and the universe, while being immersed inside VR tanks, or suits or neural implants, then why would humanity spend the time and money _actually_ exploring those spaces?

The scientific community would, one suppose, continue to pursue exploration and discovery, building bots that traveled as fast as they might to other star systems. But the billions of commoners who were more than happy to just sit back and imagine they were on another planet, eating exotic foods, speaking and interacting with bizarre aliens — why would they ever want to risk actually traveling to such locations?

They wouldn’t. And the funding for such actual excursions will dwindle as VR sims become more and more real. The economic reason for exploration of other star systems will fail to compare to the economic reason for delivering an even better virtual world here. And face it, the human imagination is nearly inexhaustible. It’s unlikely that the universe can beat us in the extraordinary portrayal of diversity of life and systems. (Unlikely, not impossible.)

If humanity lives through the next fifty years (no CMEs that destroy civilization, no plagues, no nukes, no asteroids or super volcanoes) then by the time we could actually GO to Mars, we won’t have to, or want to — at least not to experience it. We’ll be able to do that right in our Almost-There-Capsules.

This is one of the solutions to the Fermi Paradox. And, really, humans are almost there.


Gun problem cure

Three types of gun ownership:
• hunting / recreation
• self-defense
• [other]
I would posit that the [other] type of gun ownership is economically driven. Such a gun can get you prestige or rank but more importantly, enhanced economic possibility.
So, why not address this last point in true economic fashion — buy [other] type guns at economically enabling prices.
For a one week period, in high gun-crime areas, offer to purchase (through philanthropic or government largess) guns at unprecedented prices. $10k for a handgun. $12k for a shotgun, $15k for an automatic rifle. During this time, all gun stores in a wide area will be closed.
The fallout for this program will be considerable. Those who want to keep their guns for hunting or self defense, will do so. But a gun is now worth nearly as much as silver or gold — so it would be prudent to keep them in concealed locations — or better yet — locked up in a safe.
Those would would benefit from $10 or 20k influx of cash — this amount of money will change peoples’ lives.
Guns are removed from those areas where they most likely will do the most harm.
This program should be repeated, around the country, randomly, to extract the most dangerous guns from circulation.
2nd Amendment? Leave it intact. But make gun ownership an expensive proposition. Those who are economically challenged will know what to do with their firearms.

Misery != Profit

Industries which profit from misery should not be profit seeking.

Here’s an ugly thought, and although it would never be stated as true, is true none-the-less:

• If every person on the planet became diabetic, Novo Nordisk, Sanofi, and Mannkind (among others) share holders and board members would be thrilled (they make insulin).

• If every person on earth contracted cancer, Genentech (the leading cancer drug company) and its shareholders and board members would be equally energized (despite having cancer and diabetes).

• If you STOPPED getting sick, were healthy all your days until you died of old age these pharmaceutical companies would all collapse and die AstraZeneca, GlaxoSmithKline, Merck, Pfizer, Roche, Johnson & Johnson and many others (representing nearly $500Billion in annual revenue – they MAKE that much money off of our misery every year).

There are other industries, like the entire health care system, HMOs and insurance industry. The healthcare system only makes money when you are sick or dying. The insurance industry only makes money when you THINK you are going to be sick or dying.

Lawyers who specialize in malpractice litigation are another foul industry — they only make money when you’re ill or dying AND you claim your doctor or hospital made you sicker or killed you.

For them your misery = their livelihood.

This is EVIL.

How do you fix it? It’s obvious I’m afraid. Many progressive countries have made the switch over to cure this egregious misanthropy: socialized medicine.

What entity does NOT want you to get sick, or be unhealthy causing you to be unproductive and becoming a costly burden on society? Society of course! And what is the central representation of society in every country on the planet? Government.

In a socialized healthcare system government loses money when you’re sick and can’t work, when you can’t be productive in society. So, government and the offices they create will try and make sure you are cured as quickly and effectively as possible. They’ll advance medicine and care systems to try and keep you healthy and reduce costs not increase them.

Society wants its citizens to be healthy and productive. Corporations want citizens to be sickly and profitable. Novo Nordisk does NOT want your diabetes cured — they want you to be forced to buy insulin for the rest of your life. Novo Nordisk loves the booming trend of obesity – get fat and get sick is their mantra.

That is EVIL!

Industries that make money off of our misery should be severely regulated and taxed or better yet – nationalized.