Five More Inconvenient Truths

A tremendous amount of effort is expended to persuade us to buy stuff that we'll never need or may in fact be harmful to ourselves.  That's an intrinsic nature of the free market we live in; after all, not everyone has intuition to build the perfect product.   The Information Technology business in not without it share of ideas of utterly dubious value.  I've on occasion fingered in my blog the usual suspects (i.e. EJB, WS-*, SOA, CMMI etc).

In fact, it is my gut observation IT appears to have a greater propensity or inclination towards dubious concepts than other engineering endeavors.  I guess the barrier of entry is much lower into this profession and thus a greater likelihood of the crowd to be incapable of practicing the fine art of baloney detection.  Couple this observation with the tried and tested techniques of mass psychology manipulation and you'll end up in an never ending uphill battle against ideas bordering on superstition.  This is illustrated to its best effect in the re-election of the current president to a second term.

I just watched Al Gore's documentary "An Inconvenient Truth ".  In it he cites a survey of over 900 scientific studies and every single one of them was conclusive about the existence of global warming.  Interestingly enough, if he surveyed popular literature on the subject, almost 50% of them state that fact of global warming hasn't been proven!  How does urban myth* like this propagate on such a critical and fundamental issue of the ability of our planet to sustain life?  Why is it that even after we've identified the problem and even identified solutions, we seem to be our worse enemy and collectively march towards a doomsday scenario of our own making?  Is this some kind of Prisoner's Dilemma at a global scale that we are doomed to maximizing our own individual payoffs at the expense of the entire planet as a whole?

So this bring up a question; if Global Warming is such a arcane in inaccessible subject matter that we've all just collectively turned off simply because it was not suited to our comfort, purpose, or needs, then are there other 'inconvenient truths' that we are ignoring to our own demise? Well here's a list of inconvenient truths and corresponding blog entries with convincing arguments:

The Nature of Employment
Steve Pavlina makes some solid arguments as to why taking a salary isn't really cut out as one would expect. Steve makes some interesting observations in his entry  "10 Reasons You Should Never get a Job ":

Employee income is the most heavily taxed there is.  In the USA you can expect that about half your salary will go to taxes.  The tax system is designed to disguise how much you’re really giving up because some of those taxes are paid by your employer, and some are deducted from your paycheck.  But you can bet that from your employer’s perspective, all of those taxes are considered part of your pay, as well as any other compensation you receive such as benefits.  Even the rent for the office space you consume is considered, so you must generate that much more value to cover it.  You might feel supported by your corporate environment, but keep in mind that you’re the one paying for it.

 
So for some reason what one earns in a salary is a fraction of what it costs you to be employed.  Something surely doesn't add up, as it appears that despite all the time wasted by many in a company, the value of employment one brings into a company seems to much larger than what is paid in a salary.  In short, are we under paying ourselves by seeking the security of employment?  Furthermore, shouldn't the government be encouraging employment by possibly a subsidy and not the other way around?

I just stumbled upon an interesting article bookmarked by Nick Gall which argues:

When we compare average incomes in rich nations with those in Third World countries, we find enormous differences that are surely not due simply to differences in motivations to earn. Laziness is not a principal cause of poverty. A more plausible explanation for the differences, in fact the explanation that is universally put forward, is that much greater resources per capita are available to some countries than to others. These differences are not simply a matter of acres of land or tons of coal or iron ore, but, more important, differences in social capital that takes primarily the form of stored knowledge (e.g., technology, and especially organizational and governmental skills).

In otherwords the value a corporation derives from your employment is proportional to a large degree your contribution to the shared social capital of the corporation. Corporatons therefore are paying for your acessibility rather the amount of time one puts in the job. Time unfortunately becomes the proxy for acessibility.


Subsidized Soy and Corn
"Super Size Me" graphically illustrated the fast food problem to great effect.  With two thirds of the American population overweight, and even more terrifying statistic, one third being obese, it isn't hard to to see that the ultimate health costs could bankrupt our health system.  The main oversight here is that these foods are cheaper because the government actually heavily subsidizes the production of ingredients that are slowly killing us.   The Ultrametabolism blogs sums it up:

Unhealthy food is cheaper because our government's policies support its production. We're spending nearly $30 billion a year to subsidize corn and soy production. Where do those foods go?  Into our food supply as high-fructose corn syrup and hydrogenated soybean oil (trans fats), that's where!  

Since the 1970s -- when our agricultural policies where changed to support corn and soy farmers -- we're consuming, on average, an extra 500 calories (mostly in the form of cheap, artificial high-fructose corn syrup) per person.

Corn and soy are also used to feed cattle for the production of meat and dairy. In fact, 70 percent of the wheat, corn, and soy farmed in this country is used to feed animals used for our food.

The world's cattle alone consume a quantity of food equal to the caloric needs of 8.7 billion people -- more than the entire human population on Earth!

So, when our government helps pay for these foods -- well, of course they're cheaper!

In short, our taxes subsidizes the farmers who cultivate the very substances that contribute to our obesity.



Financial Dependency
Money is truly quite an illusive entity that's hard to pin down.  See the organization that can print money (i.e. the Federal Reserve ) isn't even a public institution.   In other-words, it is not part of the U.S. government that is beholden to its constituents (i.e. the citizens of the USA).  The Federal Reserve is actually owned by member banks, the ownership of these bank in turn may be of foreign origin .    Furthermore,  U.S. Treasury statistics, at the end of 2004, show that foreigners held 44% of U.S. federal debt.  Now, I've got nothing against foreigners controlling U.S. monetary policy or foreigners owning almost half of our government's debt, after all its an increasingly interconnected world.   Unfortunately, what we pay in taxes increasingly is used to service our government's debt.   The lending banks (foreign or local) of course are more than delighted to have a steady source of income from the citizenry of America.

The banks would rather base their income from steady sources like the U.S. Treasury or from Mortgages than to base it on the stock market.  Treasury bills and mortgages are the banks conservative holdings that are sourced from the individual citizen, albeit treasury bills are done in a indirect way by virtue of the government's debt.  The government furthermore attempts to make the acquisition of otherwise large mortgages affordable by allowing tax deductions on interest.  Of the hundreds of tax breaks for corporations and individuals in the nation's tax code, the largest are the subsidies for homeowners :

 
...a wealthy corporate executive is more likely to receive a homeowner tax break—and to get a much bigger one—than a garment worker, a construction worker or a schoolteacher. The current system subsidizes the rich to buy huge homes without helping most working families buy even a small bungalow.

 
So, tax money that isn't used to subsidize farmers is used to service our government's excesses and the promotes the idea of purchasing larger and more costly homes.


The Stock Market Ponzi Scheme - The problem with most stocks is that is based on the greater fool theory. Mark Cuban sums it best in his entry "The Market is for Suckers":

 The stock market is by definition a ponzi scheme. As long as money keeps on coming in, then there is someone to take the stocks from the sellers. If the amount of money coming in is reduced, the stocks, indexes, et al go down.
...
 a stock that doesn't pay dividends is valued like a baseball card. Just whatever you can sell it for. The concept that you own "your share" of the company is a joke. You are completely at the whim of the CEO and board who will dilute you on a daily basis with stock options, then try to buy back stock to cover it up and push up the price, rewarding the shareholders who get out, rather than those that continue to hold the shares. Meaning you.

Now being a San Antonio Spurs fan, I usually hesitate to agree with Mark Cuban, but I can't beat his experience on this matter.  After all his claim to his billions was a result of his uncanny move to 'diversify'  his portfolio right after selling broadcast.com for 5 billion USD to Yahoo.  The observation however by itself is interesting, the stock market as a whole requires continued investment to prop it up.  The fact that the baby boomer population outsizes the generation after it is problematic.  Who is to going to act as the greater fool to buy the stocks the baby boomers are liquidating as part of their retirement? 

So to summarize, the money we're able to save (after being short changed) is being used to prop up investments to support the retirement lifestyle of the generation that came before us.  


Oil Dependency
Over half a trillion dollars was spent on securing Iraq, that's not counting the number of servicemen killed or maimed in the process.  If Iraq had been a country without oil somewhere in the middle of Africa (see Darfur ) then it would be non-strategic and therefore would have been ignored.   I cannot fathom the original reasons why America went to war, however I could at least say with a bit of certainty of the primary motivation.  The motivation was pure and simple greed, not necessarily from the leaders in the executive branch, but more likely from its supporters at the grass roots level.  There certainly is a lot to be made providing services to support not only the invasion, but also in the occupation of Iraq.  The U.S. military just like U.S. corporations before it, are increasingly outsourcing their service requirements.  That's because military pension plan is increasingly becoming untenable and what better way to cut cost is there than to hire temps.

So the Haliburtons and the Bechtels of the world had a real interest in pursuing an outsourcing arrangement (incidentally, Cheney and Rumsfeld both served as CEOs of these companies respectively).  The defence industry certainly had the arms and ammunition to sell.  Strangely enough, it's not clear how the oil companies would gain.  After-all, the oil companies made considerable profits (Exxon earned 10 billion last quarter, the second biggest ever) primarily from the fear of a destabilized region.  How is it that the oil companies continue to break earning records in a region that continues to appear unstable?  Does destabilizing Iraq's production have anything to do with profits? 

My point however, it that there's the maintenance of the status quo, that is our continued dependence on foreign oil is somehow strategic enough a goal to expend men and treasure on.   It's mind boggling why the opposite strategy would not take higher importance, that is reducing our dependence on foreign oil.   The government seems to be aligning itself with the desires of enterprises rather the interests of the citizenry.  One can speculate that there's money to be made on innovative alternatives, however, what better way to ensure profits than to protect the status quo? 

Maintaining the status the same reason why the internal combustion engine continues to be prevalent.  The science and technologies to build alternative means of propulsion have been established for years, however the automakers (U.S. automakers in particular) fear innovation in this space.  Hydrogen and fuel cells technologies that are simpler, safer, and cleaner.  Unfortunately, it is not only the automakers that fear innovation, it's the incumbent fuel distribution system that would most likely be jeopardy.  Imagine a world where from home, you could either recharge or refuel your car.   I wonder then if the oil industry would use its considerable resources to prop up ailing U.S. automakers.  I wonder if the two industries would work in concert to influence the government to maintain its status quo?




The nice thing about maintaining the status quo of a monopoly is that its much easier to make money than innovating into new kinds of businesses.  The key to maintaining this status quo is to ensure the continued dependency of one's customer base.  One can do so by ensuring affordability or ensuring that alternatives don't mount a credible challenge.  So therefore, one can expect the convenience of secure employment, fast food, a rising stock market, affordable and accessible loans and cheap fuel to be a mainstay of American society.  It is easier to accept the security and comfort of a dependency no matter how harmful they may become in the long run.

Of course all of these pale in comparison to the problem of global warming.   The truth is, just like a reptile in water slowly made to a boil, we can't seem to have the capacity to react collectively in the absence of a easily identifiable cataclysmic event (one wonders if Hurricane Catrina was cataclysmic enough).  Maybe we were able to collectively solve the Antarctica ozone hole because it was false color visualizations of the problem was something we could see.   You can't beat a good visualization to bypass one's faulty cerebral cortex and hit you directly at the brain stem to move one into action. Al Gore's film may potentially be that visualization.

^{* See CEI misrepresentations this advert illustrates how the truth can be masterfully mistrepresentated to obfuscate the real issue:
Unfortunately, too many folks will miss out on the flaw in the argument. So here it is in plain speak "CO2 per se isn't harmful, the problem is too much CO2". Also read " Smoke, Mirrors and Hot Air" for more details on disinformation campaigns.}