Tuesday, September 13, 2011
Saturday, August 13, 2011
Economics 202 - Stock Market Price Changes
Economics is a murky topic for many people, but it is really a very simple subject.
Nearly every economic situation can be distilled down to one simple concept – supply and demand.
Or, offer and bid
Or, perceived value verses actual value.
Related to this general template are the price movements of our stock market.
Or any stock market.
You may have heard the the goal in making investments is to buy low and sell high.
Another simple maxim of economics.
But to many (most?) the rise and fall of stock prices is without logic.
Even to many who have some understanding of economics.
I am here to help.
Rather than think of the entire stock market and the millions of transactions that take place every minute or hour of each business day, imagine the behavior of just one share of stock of just one company.
A company has issued this one share of stock in the hope that someone will buy it.
When someone buys this share of stock they, in essence, loan to the company the price of that share of stock for some period of time.
The period of time is determined by the buyer.
It may be a short time – sometimes as short as a few hours, or a long time – years, or decades.
The company, for its part, will use the money received by the sale of this share of stock to invest in the operation of the company.
The hope is that, when invested wisely, this money will help the company grow and become more profitable.
When the company becomes more profitable the value of that share of stock will increase.
When the value of that share of stock increases, the owner may be enticed to sell his share of stock and make a profit from the sale (vs the amount he paid for it).
If the owner of this share of stock DOES sell it, the company can sell it again to someone else.
But since this share of stock is now worth more, the next person who buys it will pay a higher price than the first person who bought it.
Thus, the person who buys this share of stock, will, in effect, be loaning more money to the company than the previous purchaser.
Now, back away from this simple example and take a larger view of the stock market.
Think of it just like a supermarket.
A supermarket sells many kinds of food, fruit, vegetables, soup, meat, milk, etc.
In the same way, the stock market sells stock of many kinds of companies.
The shoppers in the stock market are called investors.
There are two types of investors – long-term and short-term.
Long-term investors buy stocks and hold them for months or years.
Short-term investors buy stocks and only hold them for a few hours or days or weeks.
So why does the average price of stocks go up or down?
Two reasons – investors believe that the price of stocks will go up in the future (near or far term), or they will go down (near or far term)
Remember buy low sell high.
Lets assume you have some money and you want to invest it somewhere where it will grow at a faster rate than a regular savings account in a bank.
You look at the general market situation and decide that stocks will likely increase in value in the next year.
You do not know how much but you think they will go up.
So you buy as many stocks as you can afford.
But you are not the only person who views the general economy this way and you are not the only person buying stock for this reason.
As you and others buy up shares of stock, fewer shares of stock remain for purchase.
The fewer shares left to buy the more valuable they become.
So the price for each share goes up.
Supply vs demand.
Lets say you want one share of stock of company A.
And lets say a guy next to you wants that same share of stock of company A.
You offer one dollar to the agent selling the share of stock.
You offer this much because you believe that this share of stock will be worth more than this in a year or so (your investment time window).
The guy next to you offers a dollar and ten cents for this share of stock.
Now you have to decide if you believe that that share of stock will be worth more than a dollar and ten cents in a year or so, or not.
If you believe that it will, then you offer a dollar and twenty cents for the share of stock.
If you do not believe that the value of this share of stock will be worth more than a dollar and twenty cents in a year or so, then you let the other guy have the share of stock.
This is how the price of shares of stock go up.
They are bid up by buyers (investors) competing with each other in the market.
The reverse is also true.
Lets say you already own a share of stock of company A.
But you believe that the future market conditions are such that company A will not be able to sell as many of its products next year as it did last year.
This will cause the value of your share of stock in company A to go down.
Rather than hang on to your share of stock in company A until the market improves, you decide to sell it.
But there are other people who hold a share of stock from company A and they want to sell their shares also.
They are standing in line behind you.
You offer to sell your share of stock in company A to the agent in the stock market for a dollar.
But the agent has already bought back other shares of stock in company A and finds that he cannot re-sell them for a dollar.
So he offers to buy your share of stock in company A for 90 cents.
The offer is good for only one minute.
You see the value of your share of stock in company A dropping as you stand there thinking about his offer.
You decide it is better to sell now at this price than to wait longer and have to sell your share in company A for even less.
You make the sale and as you are walking away you overhear the agent offer 80 cents to the guy who was in line behind you.
There are two reasons why you would want to buy or sell stocks at any given time – you believe the price will go up or it will go down in the future, or other buyers and sellers believe so.
There are two reasons why the price of a stock will go up or down.
Either market conditions are such that the business of a company will do better or worse, or, OTHER STOCK BUYERS believe that the value of a share of stock will go up or down.
Even if YOU do not believe that the value of the stock shares of a particular company will go up or down, if other buyers and sellers think so, the price of shares of stock will move according to what they do.
So if other buyers bid up the price of a share of stock, your share of that same stock will increase in value, too.
If they sell their shares of stock, bidding the price of the stock down, your shares of that stock will go down with them.
Thus, sometimes you buy simply because others are buying and sell only because others are selling.
Many short-term investors like to buy and sell shares of stock “on the margin”.
Basically, they study the price movements of the shares of stock of certain companies or industries.
They know from experience that certain shares increase or decrease in value by a certain percentage then they stop moving that direction and reverse.
So, for example, the price of a share of stock in company X tends to go up 15 percent over three months, then it stops and starts to go down.
So you buy a share of stock in company X when it is low and hold it until it gains about 14 percent, then you sell it and take your profit.
I does not matter if the stock goes up a couple more percentage points after that, you have made your “safe” money on this cycle.
You may invest your money in another stock that is in an increasing cycle while you wait for the value of the stock of company X to drop back to its expected low point.
When the value of the stock of company X hits its expected low point you buy some more shares and ride its value back up to its expected high point again.
Then you sell it again.
And so on.
Remember – supply and demand.
Price always follows demand.
When there is less demand than supply, the price drops.
When there is more demand than supply, the price rises.
Nearly every economic situation can be distilled down to one simple concept – supply and demand.
Or, offer and bid
Or, perceived value verses actual value.
Related to this general template are the price movements of our stock market.
Or any stock market.
You may have heard the the goal in making investments is to buy low and sell high.
Another simple maxim of economics.
But to many (most?) the rise and fall of stock prices is without logic.
Even to many who have some understanding of economics.
I am here to help.
Rather than think of the entire stock market and the millions of transactions that take place every minute or hour of each business day, imagine the behavior of just one share of stock of just one company.
A company has issued this one share of stock in the hope that someone will buy it.
When someone buys this share of stock they, in essence, loan to the company the price of that share of stock for some period of time.
The period of time is determined by the buyer.
It may be a short time – sometimes as short as a few hours, or a long time – years, or decades.
The company, for its part, will use the money received by the sale of this share of stock to invest in the operation of the company.
The hope is that, when invested wisely, this money will help the company grow and become more profitable.
When the company becomes more profitable the value of that share of stock will increase.
When the value of that share of stock increases, the owner may be enticed to sell his share of stock and make a profit from the sale (vs the amount he paid for it).
If the owner of this share of stock DOES sell it, the company can sell it again to someone else.
But since this share of stock is now worth more, the next person who buys it will pay a higher price than the first person who bought it.
Thus, the person who buys this share of stock, will, in effect, be loaning more money to the company than the previous purchaser.
Now, back away from this simple example and take a larger view of the stock market.
Think of it just like a supermarket.
A supermarket sells many kinds of food, fruit, vegetables, soup, meat, milk, etc.
In the same way, the stock market sells stock of many kinds of companies.
The shoppers in the stock market are called investors.
There are two types of investors – long-term and short-term.
Long-term investors buy stocks and hold them for months or years.
Short-term investors buy stocks and only hold them for a few hours or days or weeks.
So why does the average price of stocks go up or down?
Two reasons – investors believe that the price of stocks will go up in the future (near or far term), or they will go down (near or far term)
Remember buy low sell high.
Lets assume you have some money and you want to invest it somewhere where it will grow at a faster rate than a regular savings account in a bank.
You look at the general market situation and decide that stocks will likely increase in value in the next year.
You do not know how much but you think they will go up.
So you buy as many stocks as you can afford.
But you are not the only person who views the general economy this way and you are not the only person buying stock for this reason.
As you and others buy up shares of stock, fewer shares of stock remain for purchase.
The fewer shares left to buy the more valuable they become.
So the price for each share goes up.
Supply vs demand.
Lets say you want one share of stock of company A.
And lets say a guy next to you wants that same share of stock of company A.
You offer one dollar to the agent selling the share of stock.
You offer this much because you believe that this share of stock will be worth more than this in a year or so (your investment time window).
The guy next to you offers a dollar and ten cents for this share of stock.
Now you have to decide if you believe that that share of stock will be worth more than a dollar and ten cents in a year or so, or not.
If you believe that it will, then you offer a dollar and twenty cents for the share of stock.
If you do not believe that the value of this share of stock will be worth more than a dollar and twenty cents in a year or so, then you let the other guy have the share of stock.
This is how the price of shares of stock go up.
They are bid up by buyers (investors) competing with each other in the market.
The reverse is also true.
Lets say you already own a share of stock of company A.
But you believe that the future market conditions are such that company A will not be able to sell as many of its products next year as it did last year.
This will cause the value of your share of stock in company A to go down.
Rather than hang on to your share of stock in company A until the market improves, you decide to sell it.
But there are other people who hold a share of stock from company A and they want to sell their shares also.
They are standing in line behind you.
You offer to sell your share of stock in company A to the agent in the stock market for a dollar.
But the agent has already bought back other shares of stock in company A and finds that he cannot re-sell them for a dollar.
So he offers to buy your share of stock in company A for 90 cents.
The offer is good for only one minute.
You see the value of your share of stock in company A dropping as you stand there thinking about his offer.
You decide it is better to sell now at this price than to wait longer and have to sell your share in company A for even less.
You make the sale and as you are walking away you overhear the agent offer 80 cents to the guy who was in line behind you.
There are two reasons why you would want to buy or sell stocks at any given time – you believe the price will go up or it will go down in the future, or other buyers and sellers believe so.
There are two reasons why the price of a stock will go up or down.
Either market conditions are such that the business of a company will do better or worse, or, OTHER STOCK BUYERS believe that the value of a share of stock will go up or down.
Even if YOU do not believe that the value of the stock shares of a particular company will go up or down, if other buyers and sellers think so, the price of shares of stock will move according to what they do.
So if other buyers bid up the price of a share of stock, your share of that same stock will increase in value, too.
If they sell their shares of stock, bidding the price of the stock down, your shares of that stock will go down with them.
Thus, sometimes you buy simply because others are buying and sell only because others are selling.
Many short-term investors like to buy and sell shares of stock “on the margin”.
Basically, they study the price movements of the shares of stock of certain companies or industries.
They know from experience that certain shares increase or decrease in value by a certain percentage then they stop moving that direction and reverse.
So, for example, the price of a share of stock in company X tends to go up 15 percent over three months, then it stops and starts to go down.
So you buy a share of stock in company X when it is low and hold it until it gains about 14 percent, then you sell it and take your profit.
I does not matter if the stock goes up a couple more percentage points after that, you have made your “safe” money on this cycle.
You may invest your money in another stock that is in an increasing cycle while you wait for the value of the stock of company X to drop back to its expected low point.
When the value of the stock of company X hits its expected low point you buy some more shares and ride its value back up to its expected high point again.
Then you sell it again.
And so on.
Remember – supply and demand.
Price always follows demand.
When there is less demand than supply, the price drops.
When there is more demand than supply, the price rises.
Thursday, August 11, 2011
SOME QUESTIONS FOR THE BRITISH RIOTERS
In the last few days there have been riots, looting and serious property destruction in several cities in Great Britan.
A radio reporter interviewed two female participants and asked them why they were involved in the destruction.
The girls said, “To show the rich people that we can do what we want.”
This answer seems to have no relationship with the reality of the situation, and it prompted some questions in my mind.
To wit:
1 Who are the “rich people”?
2 Have rich people restricted the activities of the young people?
3 In what way have rich people restricted the activities of the young people?
4 How does destruction of cars and buildings demonstrate freedom from rich people?
5 Will the freedom of the young people be improved by destroying local stores and property?
6 Do the young people believe that the local store owners are “rich people”?
7 If the local store owners are considered “rich people”, is it the goal of the young rioters to cause them to abandon their stores that have been damaged?
8 If the local store owners abandon their damaged stores, will that have a positive or negative effect on the neighborhood?
9 If the rioters cause the “rich” local store owners to leave the area, where will the young rioters shop for the things they need/want?
10 How wealthy does a person have to be to be considered “rich”?
11 Is being “rich” a bad thing?
12 What elements of life are the rioters missing in their current situation?
13 How will this expression of anger improve the lives of the rioters?
14 Do the young rioters believe that the “rich people” are paying attention to them and will take note that they can do what they want?
Tuesday, August 09, 2011
New Car Update
No, I haven't bought one.
Just still lusting.
And have eliminated a few models.
I love this little car.
It is at the top of my list.
The Ford Focus is second. (I can't believe I just wrote that...)
Just still lusting.
And have eliminated a few models.
I love this little car.
It is at the top of my list.
The Ford Focus is second. (I can't believe I just wrote that...)
Monday, June 27, 2011
The Room of Old Men
The chairs that ringed the big room were half filled with old men.
Some had canes, some had roller-walkers, a couple were in wheelchairs.
A couple of them carried an oxygen bottle with clear plastic tubes running from the bottle to around their head and under their nose.
Most of them just walked with a limp.
A few were like me, walking normally (if I do anything normally).
Many of them had the deep, rasping cough of a life-long smoker.
As I sat and observed those around me, I thought, these guys took the bullets and the shrapnel for me.
These are the ones who came back.
Some paid in the jungle or the desert.
Others, like these, came back, but they still paid.
On the installment plan.
Some of them would say that the ones who came back in a box are the ones who got off easy.
And I would agree with them.
I have skated through life because of the lifetime of discomfort and pain they paid for me.
I owe them.
Big time.
I owe each one of them.
There is no way that I can repay or compensate them for the life of suffering (some of them more than others) they have endured so that I could raise my children free from fear and harm, go where I want, when I want, say what I want.
All of this is written on those pieces of paper we call our Constitution.
But the words on the paper aren't worth anything unless some of us defend them against those who want things another way.
I went to the doctor today for my annual checkup.
Because of my short service in the US Army, I am entitled to free medical care from the US Veterans Administration. (thanks to all of you who pay your taxes.)
He said my prostate was down from 2X to 1X. (don't ask me how the doctor was able to make this determination.....)
This is good news.
We are not sure why the change has taken place.
I am taking Saw Palmetto pills but they are not supposed to affect organ size.
But something did.
Not complaining, just sayin.
My blood pressure was good.
They took some of my blood to do a workup including HIV (just to settle the possible question).
Just like last year (except for the HIV test).
I am disgustingly healthy.
Even though I grunt and moan about my little aches and pains, in reality, they are so minor that I do not need to take any chemical substances to diminish their intensity.
The day may (will!) come when this will no longer be true, but for now it is so.
I am blessed.
I can still run three-plus miles each week, and walk three miles twice a week.
Many of those men in the big room can barely walk to their cars.
And while I am most grateful to Yahweh for his illogical kindness and love to me, I also feel a strong sense of gratitude to the old men sitting around the big room today.
Some had canes, some had roller-walkers, a couple were in wheelchairs.
A couple of them carried an oxygen bottle with clear plastic tubes running from the bottle to around their head and under their nose.
Most of them just walked with a limp.
A few were like me, walking normally (if I do anything normally).
Many of them had the deep, rasping cough of a life-long smoker.
As I sat and observed those around me, I thought, these guys took the bullets and the shrapnel for me.
These are the ones who came back.
Some paid in the jungle or the desert.
Others, like these, came back, but they still paid.
On the installment plan.
Some of them would say that the ones who came back in a box are the ones who got off easy.
And I would agree with them.
I have skated through life because of the lifetime of discomfort and pain they paid for me.
I owe them.
Big time.
I owe each one of them.
There is no way that I can repay or compensate them for the life of suffering (some of them more than others) they have endured so that I could raise my children free from fear and harm, go where I want, when I want, say what I want.
All of this is written on those pieces of paper we call our Constitution.
But the words on the paper aren't worth anything unless some of us defend them against those who want things another way.
I went to the doctor today for my annual checkup.
Because of my short service in the US Army, I am entitled to free medical care from the US Veterans Administration. (thanks to all of you who pay your taxes.)
He said my prostate was down from 2X to 1X. (don't ask me how the doctor was able to make this determination.....)
This is good news.
We are not sure why the change has taken place.
I am taking Saw Palmetto pills but they are not supposed to affect organ size.
But something did.
Not complaining, just sayin.
My blood pressure was good.
They took some of my blood to do a workup including HIV (just to settle the possible question).
Just like last year (except for the HIV test).
I am disgustingly healthy.
Even though I grunt and moan about my little aches and pains, in reality, they are so minor that I do not need to take any chemical substances to diminish their intensity.
The day may (will!) come when this will no longer be true, but for now it is so.
I am blessed.
I can still run three-plus miles each week, and walk three miles twice a week.
Many of those men in the big room can barely walk to their cars.
And while I am most grateful to Yahweh for his illogical kindness and love to me, I also feel a strong sense of gratitude to the old men sitting around the big room today.
Monday, June 20, 2011
Life As Plan B
As planned, I ran my 3.5 mile hilly course this past Saturday morning.
It was "planned" because my preferred plan has seemingly become un-achievable.
Running six miles without stopping.
Never mind that the preferred six-mile course is one of the most challenging in the area.
After acknowledging my diminishing strength to complete the 6 mile course without stopping, I have dropped back to my next most challenging path.
Bankhead Parkway is a relatively steep road that gains about 200 feet in less than a mile.
I ran up the hill, bopped along the relatively flat Tollgate Road for a quarter mile then down the heart poundingly steep Mountainwood drive (walking).
Mountainwood drops (or gains, depending which way you are going) about 90 feet in about 1300 feet.
It is so steep that one can easily slip and fall if it is wet. (BTDT)
Anyway, did the whole circuit without a mishap.
The party was physically challenging and I can still feel a few pokes of pain around hips and hammys.
But the psychological sense that this is but a sad substitute for the distance my heart desires to run is buried somewhere near the surface of my conscious mind.
It is time to stop whining and suck up whatever endorphin-induced ego expansion I derived from going the longer distance.
Those days are over.
It is time to stop whimpering and learn to love what is left of life.
But the sad fact is, this is not the end of seeing physical and mental abilities diminish.
This is just another brick falling out of the wall of my life.
More are sure to come.
In fact, hardly a week goes by without some additional reminder injecting itself into my perception that I cannot do some small task as well/long as I used to.
I honestly get tired of seeing this.
From this, I can see why old people become depressed.
And it gives me a better insight into the value of visiting rest homes.
But I have never been good at relating to people.
Especially old people.
And increasingly, that is me.
.
It was "planned" because my preferred plan has seemingly become un-achievable.
Running six miles without stopping.
Never mind that the preferred six-mile course is one of the most challenging in the area.
After acknowledging my diminishing strength to complete the 6 mile course without stopping, I have dropped back to my next most challenging path.
Bankhead Parkway is a relatively steep road that gains about 200 feet in less than a mile.
I ran up the hill, bopped along the relatively flat Tollgate Road for a quarter mile then down the heart poundingly steep Mountainwood drive (walking).
Mountainwood drops (or gains, depending which way you are going) about 90 feet in about 1300 feet.
It is so steep that one can easily slip and fall if it is wet. (BTDT)
Anyway, did the whole circuit without a mishap.
The party was physically challenging and I can still feel a few pokes of pain around hips and hammys.
But the psychological sense that this is but a sad substitute for the distance my heart desires to run is buried somewhere near the surface of my conscious mind.
It is time to stop whining and suck up whatever endorphin-induced ego expansion I derived from going the longer distance.
Those days are over.
It is time to stop whimpering and learn to love what is left of life.
But the sad fact is, this is not the end of seeing physical and mental abilities diminish.
This is just another brick falling out of the wall of my life.
More are sure to come.
In fact, hardly a week goes by without some additional reminder injecting itself into my perception that I cannot do some small task as well/long as I used to.
I honestly get tired of seeing this.
From this, I can see why old people become depressed.
And it gives me a better insight into the value of visiting rest homes.
But I have never been good at relating to people.
Especially old people.
And increasingly, that is me.
.
Sunday, June 12, 2011
End of an Era
Sigh....
The Saturday morning plod along the Cotton Row course did not go very well.
Again.
My breathing was more-or-less okay (better than last go-round... but that is not saying much), and my strength was somewhat better.
But I had to stop and walk in both mile five and six.
Not good.
And not according to plan.
At least, not per Plan A.
As if to punctuate the situation, my left knee developed a nice jabbing pain in the ligament just below the kneecap early in mile five.
This was just after my second walk.
It was not the sharp ice pick kind of pain, it was more like someone whacking me with a tire iron just below the kneecap.
It got my attention.
And it forced Runner, Coach and Running Central to have a meeting to decide what to do and when.
The decision was quickly arrived at as left knee continued to squeak loudly – keep going and see if the problem fixes itself.
So I did.
And it did.
But it took a while.
I tried modifying my gait this way and that to take some of the pressure off the complaining ligament, but nothing seemed to help.
But as I kept going, I noticed that the pain seemed to diminish.
After a couple of minutes or three, the pain was down to a nuisance level and I knew I was going to be able to finish.
Or, at least, my left knee was not going to be the reason that I did not finish.
My overall strength was another matter, as I was forced to stop and walk again near Courthouse Square.
But I knew what this meant.
After my poor performance last week I made a promise to myself that if this session did not go well, I would stop running the six-mile distance.
“Well” means, run the whole distance without stopping.
As much as I love it, I have to face reality (I hate that....).
I cannot run this distance any more.
So, life is what it is.
Thus, next week I will return to my 3.5 mile course on the back side of the CR course.
Sigh.....
.
The Saturday morning plod along the Cotton Row course did not go very well.
Again.
My breathing was more-or-less okay (better than last go-round... but that is not saying much), and my strength was somewhat better.
But I had to stop and walk in both mile five and six.
Not good.
And not according to plan.
At least, not per Plan A.
As if to punctuate the situation, my left knee developed a nice jabbing pain in the ligament just below the kneecap early in mile five.
This was just after my second walk.
It was not the sharp ice pick kind of pain, it was more like someone whacking me with a tire iron just below the kneecap.
It got my attention.
And it forced Runner, Coach and Running Central to have a meeting to decide what to do and when.
The decision was quickly arrived at as left knee continued to squeak loudly – keep going and see if the problem fixes itself.
So I did.
And it did.
But it took a while.
I tried modifying my gait this way and that to take some of the pressure off the complaining ligament, but nothing seemed to help.
But as I kept going, I noticed that the pain seemed to diminish.
After a couple of minutes or three, the pain was down to a nuisance level and I knew I was going to be able to finish.
Or, at least, my left knee was not going to be the reason that I did not finish.
My overall strength was another matter, as I was forced to stop and walk again near Courthouse Square.
But I knew what this meant.
After my poor performance last week I made a promise to myself that if this session did not go well, I would stop running the six-mile distance.
“Well” means, run the whole distance without stopping.
As much as I love it, I have to face reality (I hate that....).
I cannot run this distance any more.
So, life is what it is.
Thus, next week I will return to my 3.5 mile course on the back side of the CR course.
Sigh.....
.
Friday, June 10, 2011
Economics 201
Lets get something straight – governments have no money.
I do not mean that they are broke – insolvent – I mean they have no internal means to finance themselves.
You and me, we can go to work for someone who is willing to pay us for our labors and we earn money, with which we buy food to feed ourselves and pay our bills, etc.
The government – be it on the local level, the county level, the state level, or the federal level – must take money from someone else in order to finance its operations.
The government is basically a service organization, invented to handle tasks that we as individuals cannot, or choose not, to do.
Services such as provide protection from criminals, or put out fires at our homes while we are away working, of control traffic on the roads so everything runs in a safe and orderly manner.
To do all these things for us, government collects money from the people it serves by collecting taxes.
Since some taxes are more burdensome on some people than other people, there are many different kinds of taxes.
All of these taxes are of two basic types – taxes on income received, or taxes on things purchased or owned.
The government is not us and they.
The government IS US.
WE ARE the government.
This is true even of totalitarian governments.
This may not seem true but think about this for a moment.
“Government” was the creation of people to supply a needed service – protection.
You may have heard the phrase “might makes right” and to some extent it is true.
It is often the case that the stronger of two people will prevail in a conflict.
It is also true that the stronger of two groups will prevail in a conflict.
Thus, if one group is threatened by another group, it will seek to become as strong as possible to defend itself against the group that is challenging it.
Think about the organization of a basic group of people.
Start with a primitive community – just three or four families living near each other.
Each family might be mostly self-sufficient and go days or weeks or months without contact with the other members of the community.
But at some point, for some tasks, someone will seek or need help from one or more of the other families.
It could be that the men decide to go hunting for a big animal for food, and one of them knows where some are or have been.
The others may not know this information.
So the others will follow his lead in the hunt.
Another man may be better at making arrowheads or stone knives than the others, so soon, the others either learn from him how to make better tools, or they just trade for new tools from him.
Over time, a single person or family will rise to become the “leader” of the group/clan/tribe.
Other members will look to the Leader to organize them in a way that will best protect them from outside threats - whether from wild animals or other groups of people.
They did not know it, but they just invented “government”.
As time passes, the leader would require some form of commitment from the subjects/followers to allow him/her to perform the leadership functions without having to spend as much of his/her time doing the everyday things that the other families do.
This may be a commitment of time for service – tending the leader's crops a few hours each week, for example, or each family bringing some of their crops/meat to the family of the leader to compensate for the fact that he/she does not have time to tend to such tasks – or both.
They did not know it, but they just invented taxes.
As the community grows protection of the group will become important.
Any community – even primitive ones – need real estate – territory – to hunt animals for food and/or grow crops.
Even in totalitarian governments, both elements need each other.
It may be that the common people are not treated fairly and suffer hardship under the policies of the government, but they need some of the services the government provides.
And the government needs the people.
It needs some of them to staff the army and police – the very organizations that may be mistreating the people.
It needs the food the people produce.
It needs the products the people build in the factories.
If the practices of the government become so harsh that the people begin to die or revolt, then the government will have to adjust its policies or be overthrown.
It has happened before, it will happen again.
It this point you may be asking, “what is the point of this?”.
Fair question.
The point is (ta da) government has no money of its own.
It must fund its operations from money it collects from the working people.
But consider this – there is only so much money in a country at any given time.
It ALL belongs to the people – not the government.
So the more money the government takes from the people, the less money there is left over for the people to spend on the things they want.
Yes, new wealth CAN be created, but it takes time.
So the total pie can and does get larger, but at any given moment, that pie is only so large.
Government does not create new wealth.
Government does not make the pie grow larger.
Only private companies make the pie grow larger.
The more money the government takes from that pie, the less there is left in that pie for everyone else to spend.
Government can only take money from one person and give it to someone else.
Government only moves money around in the current-sized pie, it does not and cannot make the pie larger.
Why?
Because government does not invest the money it takes into enterprises that will grow and create new jobs or new wealth.
Thus, any dollar that the government spends or gives to someone, came from someone else.
So the unemployment payment the government gave to John Jones this week, came from all of Mr. Jones' neighbors who are still earning a living by working.
The salary that the government pays to Suzi Smith who works in the unemployment office, which pays Mr. Jones his weekly check, came from Ms. Smith's neighbors who are still earning a living by working
Every dollar that the government takes from its working citizens is a dollar that those citizens cannot spend themselves.
Those dollars taken by the government are not as useful – or “valuable” - as dollars paid to people who earn them by working.
Why?
Because the persons who earn the dollars do not get to make the decisions on how or where (or whether) to spend their dollars.
Which is more useful to you, you spending your money on things you want/need, or your neighbor spend his money on things he wants/needs?
It is the same with the government.
The government MAY spend that dollar in a way that is acceptable and useful to the person that the tax dollar was taken from, or the government may spend that dollar on a study of the mating habits of fruit flies.
(by the way, someone ASKED the government to pay for that study of mating habits of fruit flies)
If we, as citizens, do not pay attention to what our elected representatives do with our money, and call them to task on spending that we disagree with, we will have out of control spending by our government.
Oh, wait.....
.
I do not mean that they are broke – insolvent – I mean they have no internal means to finance themselves.
You and me, we can go to work for someone who is willing to pay us for our labors and we earn money, with which we buy food to feed ourselves and pay our bills, etc.
The government – be it on the local level, the county level, the state level, or the federal level – must take money from someone else in order to finance its operations.
The government is basically a service organization, invented to handle tasks that we as individuals cannot, or choose not, to do.
Services such as provide protection from criminals, or put out fires at our homes while we are away working, of control traffic on the roads so everything runs in a safe and orderly manner.
To do all these things for us, government collects money from the people it serves by collecting taxes.
Since some taxes are more burdensome on some people than other people, there are many different kinds of taxes.
All of these taxes are of two basic types – taxes on income received, or taxes on things purchased or owned.
The government is not us and they.
The government IS US.
WE ARE the government.
This is true even of totalitarian governments.
This may not seem true but think about this for a moment.
“Government” was the creation of people to supply a needed service – protection.
You may have heard the phrase “might makes right” and to some extent it is true.
It is often the case that the stronger of two people will prevail in a conflict.
It is also true that the stronger of two groups will prevail in a conflict.
Thus, if one group is threatened by another group, it will seek to become as strong as possible to defend itself against the group that is challenging it.
Think about the organization of a basic group of people.
Start with a primitive community – just three or four families living near each other.
Each family might be mostly self-sufficient and go days or weeks or months without contact with the other members of the community.
But at some point, for some tasks, someone will seek or need help from one or more of the other families.
It could be that the men decide to go hunting for a big animal for food, and one of them knows where some are or have been.
The others may not know this information.
So the others will follow his lead in the hunt.
Another man may be better at making arrowheads or stone knives than the others, so soon, the others either learn from him how to make better tools, or they just trade for new tools from him.
Over time, a single person or family will rise to become the “leader” of the group/clan/tribe.
Other members will look to the Leader to organize them in a way that will best protect them from outside threats - whether from wild animals or other groups of people.
They did not know it, but they just invented “government”.
As time passes, the leader would require some form of commitment from the subjects/followers to allow him/her to perform the leadership functions without having to spend as much of his/her time doing the everyday things that the other families do.
This may be a commitment of time for service – tending the leader's crops a few hours each week, for example, or each family bringing some of their crops/meat to the family of the leader to compensate for the fact that he/she does not have time to tend to such tasks – or both.
They did not know it, but they just invented taxes.
As the community grows protection of the group will become important.
Any community – even primitive ones – need real estate – territory – to hunt animals for food and/or grow crops.
Even in totalitarian governments, both elements need each other.
It may be that the common people are not treated fairly and suffer hardship under the policies of the government, but they need some of the services the government provides.
And the government needs the people.
It needs some of them to staff the army and police – the very organizations that may be mistreating the people.
It needs the food the people produce.
It needs the products the people build in the factories.
If the practices of the government become so harsh that the people begin to die or revolt, then the government will have to adjust its policies or be overthrown.
It has happened before, it will happen again.
It this point you may be asking, “what is the point of this?”.
Fair question.
The point is (ta da) government has no money of its own.
It must fund its operations from money it collects from the working people.
But consider this – there is only so much money in a country at any given time.
It ALL belongs to the people – not the government.
So the more money the government takes from the people, the less money there is left over for the people to spend on the things they want.
Yes, new wealth CAN be created, but it takes time.
So the total pie can and does get larger, but at any given moment, that pie is only so large.
Government does not create new wealth.
Government does not make the pie grow larger.
Only private companies make the pie grow larger.
The more money the government takes from that pie, the less there is left in that pie for everyone else to spend.
Government can only take money from one person and give it to someone else.
Government only moves money around in the current-sized pie, it does not and cannot make the pie larger.
Why?
Because government does not invest the money it takes into enterprises that will grow and create new jobs or new wealth.
Thus, any dollar that the government spends or gives to someone, came from someone else.
So the unemployment payment the government gave to John Jones this week, came from all of Mr. Jones' neighbors who are still earning a living by working.
The salary that the government pays to Suzi Smith who works in the unemployment office, which pays Mr. Jones his weekly check, came from Ms. Smith's neighbors who are still earning a living by working
Every dollar that the government takes from its working citizens is a dollar that those citizens cannot spend themselves.
Those dollars taken by the government are not as useful – or “valuable” - as dollars paid to people who earn them by working.
Why?
Because the persons who earn the dollars do not get to make the decisions on how or where (or whether) to spend their dollars.
Which is more useful to you, you spending your money on things you want/need, or your neighbor spend his money on things he wants/needs?
It is the same with the government.
The government MAY spend that dollar in a way that is acceptable and useful to the person that the tax dollar was taken from, or the government may spend that dollar on a study of the mating habits of fruit flies.
(by the way, someone ASKED the government to pay for that study of mating habits of fruit flies)
If we, as citizens, do not pay attention to what our elected representatives do with our money, and call them to task on spending that we disagree with, we will have out of control spending by our government.
Oh, wait.....
.
Thursday, June 09, 2011
Confession Time
Okay, it's time to fess up.
My six-mile run this past Saturday was a disaster.
Well maybe not a disaster.
It just did not go as planned.
Given that I had such a good run the week before, I was expecting an equally good session this time, as well.
Not.
The goal is simple – to run the six mile course without stopping.
Never mind that my time to accomplish this task is longer than in my younger days.
I can live with that.
I just want to run the course without stopping and with nothing broken.
In that respect, this last session achieved half of my goal.
As I have said in past blogs, because of the hilly terrain of the first three miles of the course, I can tell in the first half mile how I am going to do in any particular attempt.
And it was so this past Saturday as well.
I did not feel “strong” early on.
I did not feel weak exactly, just not at my best.
So that set me to wondering if I would have to cut the session short or what.
In times past I have found myself with diminished breathing capacity that reduced my running ability, but that has not happened in several weeks – and may be fixed for good.
This past session, I just felt less strong, and to my surprise, my breathing was never a problem.
But by the time I got to the first serious little hill early in mile three, I knew I was in for a difficult journey.
I pondered whether to turn around and limit the party to four miles, but ego got the best of me.
I wanted to go the whole way, thinking that early in mile four the course is virtually all down hill.
So I kept going.
But I stopped and walked that first hill.
When things leveled out a bit, I started running again.
Then I walked The Hill at the end of mile three, as planned.
But I had to walk a few hundred feet in mile four, and another few hundred feet in mile five, and a hill in mile six, just over a half mile from the finish line.
I finished discouraged and perplexed (and running).
Why was I so “weak”?
I could think of no reason.
I had gotten a nominal amount of sleep the day/night before.
I had done a normal chest workout Friday morning with no signs of weakness.
I did not “feel” tired or sick.
So, why did I bomb so badly on my favorite course?
Surely, I am not too old to run this distance any more.
Or am I?
I am 66.
Is it time to face the reality of my age?
In the last six or eight weeks I have run this course only twice without stopping to walk at least once.
Some of the walking can be attributed to building up my running strength to handle the course distance from the three-and-a half mile distance I was running previously.
But which is the exception and which is the rule, running the six miles without stopping, or running the six miles with a walk or two mixed in?
Part of me does not want to know the answer.
We will try it again next week and see how we do.
I fear I may have to kiss my favorite running course goodbye.
I can remember my great grandmother, her long white hair pulled back in a neat bun, sitting in her old wooden rocking chair in her big, nearly empty living room, looking out the tall front windows of her old house (which was long ago demolished in downtown Sacramento).
Just sitting silently and looking out, watching the cars and occasional pedestrian go by.
It did not register at that time how lonely and empty her life must have been then.
I was just a kid about 8, maybe, self-centered and focused on playing with things, too shy to want to interact with people I did not know very well.
I remember us talking - she asking me questions, me answering, me asking questions, she answering.
I fear I was a bit terse in my comments.
But I did not know what to say to her.
I remember feeling very disconnected with my great-grandmother.
I did not know much about her, her childhood, where she was born, where she had lived, if she worked, where she had worked, etc.
And, frankly, I did not care then.
I was too young to appreciate the value of wisdom and perspective of older people then.
Some days I feel very close to that scene.
But the person in the rocking chair is me.
My six-mile run this past Saturday was a disaster.
Well maybe not a disaster.
It just did not go as planned.
Given that I had such a good run the week before, I was expecting an equally good session this time, as well.
Not.
The goal is simple – to run the six mile course without stopping.
Never mind that my time to accomplish this task is longer than in my younger days.
I can live with that.
I just want to run the course without stopping and with nothing broken.
In that respect, this last session achieved half of my goal.
As I have said in past blogs, because of the hilly terrain of the first three miles of the course, I can tell in the first half mile how I am going to do in any particular attempt.
And it was so this past Saturday as well.
I did not feel “strong” early on.
I did not feel weak exactly, just not at my best.
So that set me to wondering if I would have to cut the session short or what.
In times past I have found myself with diminished breathing capacity that reduced my running ability, but that has not happened in several weeks – and may be fixed for good.
This past session, I just felt less strong, and to my surprise, my breathing was never a problem.
But by the time I got to the first serious little hill early in mile three, I knew I was in for a difficult journey.
I pondered whether to turn around and limit the party to four miles, but ego got the best of me.
I wanted to go the whole way, thinking that early in mile four the course is virtually all down hill.
So I kept going.
But I stopped and walked that first hill.
When things leveled out a bit, I started running again.
Then I walked The Hill at the end of mile three, as planned.
But I had to walk a few hundred feet in mile four, and another few hundred feet in mile five, and a hill in mile six, just over a half mile from the finish line.
I finished discouraged and perplexed (and running).
Why was I so “weak”?
I could think of no reason.
I had gotten a nominal amount of sleep the day/night before.
I had done a normal chest workout Friday morning with no signs of weakness.
I did not “feel” tired or sick.
So, why did I bomb so badly on my favorite course?
Surely, I am not too old to run this distance any more.
Or am I?
I am 66.
Is it time to face the reality of my age?
In the last six or eight weeks I have run this course only twice without stopping to walk at least once.
Some of the walking can be attributed to building up my running strength to handle the course distance from the three-and-a half mile distance I was running previously.
But which is the exception and which is the rule, running the six miles without stopping, or running the six miles with a walk or two mixed in?
Part of me does not want to know the answer.
We will try it again next week and see how we do.
I fear I may have to kiss my favorite running course goodbye.
I can remember my great grandmother, her long white hair pulled back in a neat bun, sitting in her old wooden rocking chair in her big, nearly empty living room, looking out the tall front windows of her old house (which was long ago demolished in downtown Sacramento).
Just sitting silently and looking out, watching the cars and occasional pedestrian go by.
It did not register at that time how lonely and empty her life must have been then.
I was just a kid about 8, maybe, self-centered and focused on playing with things, too shy to want to interact with people I did not know very well.
I remember us talking - she asking me questions, me answering, me asking questions, she answering.
I fear I was a bit terse in my comments.
But I did not know what to say to her.
I remember feeling very disconnected with my great-grandmother.
I did not know much about her, her childhood, where she was born, where she had lived, if she worked, where she had worked, etc.
And, frankly, I did not care then.
I was too young to appreciate the value of wisdom and perspective of older people then.
Some days I feel very close to that scene.
But the person in the rocking chair is me.
Friday, June 03, 2011
Ticked Off By Judicial Stupidity - Again
Re the following tidbit....
http://www.foxnews.com/us/2011/06/02/prayer-prohibited-at-graduation-ceremony/?test=latestnews
To which I respond-
Welcome to Canada.
Or China.
Chief U.S. District Judge Fred Biery in Texas has ordered Medina Valley Independent School District to not do or say certain things during its graduation ceremony.
One of the things prohibited is prayer.
Imagine that.
Some of the words that are prohibited are, “in [diety]'s name”, “bow their heads”, “amen”, and “prayer”.
So much for free speech.
As you can guess, this suit was brought against the school district by a single atheist family, with the help of the ACLU.
So, just as in the Ten Commandments case in Alabama a few years ago, a single person or family can stand the entire nation or community on its head with the help of a sympathetic federal judge.
So, what would be some possible reactions to this judicial absurdity?
Here are a few:
1 Comply with the order.
Pretend God does not exist and that the entire community has no interest in acknowledging Him in any way in public/civic events.
2 Kill the judge.
This is the Taliban method of handling local civic disagreements. It works but there are some risks and consequences.
3 Kill the atheist family.
The Taliban method again. Since they are the cause of the problem; eliminate the problem and go back to praying at graduation ceremonies. Again, there are some risks and consequences to this response.
4 Hold prayer meetings in the street in front of the homes of the judge and/or the atheist family. Say the prohibited words just loud enough to be heard by the target individuals.
5 Have the Valedictorian READ the judges order at the graduation ceremony, thus, saying all the words the judge has prohibited to be said at the ceremony.
6 Pray, and/or say all the words the judge has prohibited.
Pretend this order was never made. Just do what you planned on doing. This response will likely result in jail time for those involved, including the school administrators. I say, tough noogees. Send them to jail. Send everybody to jail.
Let the judge and the judicial system deal with a massive civil disobedience movement.
7 Have the crowd chant the prohibited words during the graduation ceremony.
Of course this would just be a spontaneous gesture of protest/free expression, which is "protected" free speech.
8 Boycott the graduation ceremony.
Just don't go there. Find someone who has a large enough field or pasture and hold the graduation ceremony on private property. Charge a one penny admission as a token to make it a private event.
.
http://www.foxnews.com/us/2011/06/02/prayer-prohibited-at-graduation-ceremony/?test=latestnews
To which I respond-
Welcome to Canada.
Or China.
Chief U.S. District Judge Fred Biery in Texas has ordered Medina Valley Independent School District to not do or say certain things during its graduation ceremony.
One of the things prohibited is prayer.
Imagine that.
Some of the words that are prohibited are, “in [diety]'s name”, “bow their heads”, “amen”, and “prayer”.
So much for free speech.
As you can guess, this suit was brought against the school district by a single atheist family, with the help of the ACLU.
So, just as in the Ten Commandments case in Alabama a few years ago, a single person or family can stand the entire nation or community on its head with the help of a sympathetic federal judge.
So, what would be some possible reactions to this judicial absurdity?
Here are a few:
1 Comply with the order.
Pretend God does not exist and that the entire community has no interest in acknowledging Him in any way in public/civic events.
2 Kill the judge.
This is the Taliban method of handling local civic disagreements. It works but there are some risks and consequences.
3 Kill the atheist family.
The Taliban method again. Since they are the cause of the problem; eliminate the problem and go back to praying at graduation ceremonies. Again, there are some risks and consequences to this response.
4 Hold prayer meetings in the street in front of the homes of the judge and/or the atheist family. Say the prohibited words just loud enough to be heard by the target individuals.
5 Have the Valedictorian READ the judges order at the graduation ceremony, thus, saying all the words the judge has prohibited to be said at the ceremony.
6 Pray, and/or say all the words the judge has prohibited.
Pretend this order was never made. Just do what you planned on doing. This response will likely result in jail time for those involved, including the school administrators. I say, tough noogees. Send them to jail. Send everybody to jail.
Let the judge and the judicial system deal with a massive civil disobedience movement.
7 Have the crowd chant the prohibited words during the graduation ceremony.
Of course this would just be a spontaneous gesture of protest/free expression, which is "protected" free speech.
8 Boycott the graduation ceremony.
Just don't go there. Find someone who has a large enough field or pasture and hold the graduation ceremony on private property. Charge a one penny admission as a token to make it a private event.
.
Monday, May 16, 2011
Good News - Bad News Run
Saturday morning was cool and wanting to rain.
I wore my rain cap for the first half mile of the six-mile ho-down but it proved to be too hot.
And it was not raining.
But the clouds looked like they wanted to. (in fact, it did rain in other parts of town)
Usually, by the first half mile I can tell how I am going to do on these longer runs, and it was true this day.
I did not feel as weak as I have in the past, but I did not feel "strong" (a very relative term for me).
So I prepared myself mentally to have to walk sometime in the last half of the party.
And it was so.
Early into mile six, I felt I needed to stop for a minute or two and walk.
There was not a lot of argument between Coach, Runner and Running Central.
Runner did not want to, but mostly for self-esteem reasons.
Coach knew how hard Runner was working.
Running Central was monitoring the situation silently.
This was a close call.
If this had been a race, I would not have stopped.
But it wasn't, so I did.
The walk worked as planned.
I finished the last mile or so with nothing out of the ordinary.
But I was glad to be finished with this one.
That is the bad news. (not so bad, really.)
There were a lot of runners out that morning.
I thought it might be because of some organized practice for the Cotton Row race coming in two weeks.
Not.
At least, not entirely.
It turns out there was a race that morning.
The I Love Music race, or some such.
That is a new one here.
And as I finished my six-mile jaunt, I saw a hundred runners passing one block away.
The good news?
Nothing broke.
Again.
No hip, knee, ankle joint issues.
No connective tissue issues - tendons, ligaments, muscles, etc.
There was some vague whinings around mile four from left knee and right hip support tissues about how hard life is, but these mumblings were drowned out by the chirping of the birds and my accelerated breathing.
Amazing.
Life is good.
Very good.
.
I wore my rain cap for the first half mile of the six-mile ho-down but it proved to be too hot.
And it was not raining.
But the clouds looked like they wanted to. (in fact, it did rain in other parts of town)
Usually, by the first half mile I can tell how I am going to do on these longer runs, and it was true this day.
I did not feel as weak as I have in the past, but I did not feel "strong" (a very relative term for me).
So I prepared myself mentally to have to walk sometime in the last half of the party.
And it was so.
Early into mile six, I felt I needed to stop for a minute or two and walk.
There was not a lot of argument between Coach, Runner and Running Central.
Runner did not want to, but mostly for self-esteem reasons.
Coach knew how hard Runner was working.
Running Central was monitoring the situation silently.
This was a close call.
If this had been a race, I would not have stopped.
But it wasn't, so I did.
The walk worked as planned.
I finished the last mile or so with nothing out of the ordinary.
But I was glad to be finished with this one.
That is the bad news. (not so bad, really.)
There were a lot of runners out that morning.
I thought it might be because of some organized practice for the Cotton Row race coming in two weeks.
Not.
At least, not entirely.
It turns out there was a race that morning.
The I Love Music race, or some such.
That is a new one here.
And as I finished my six-mile jaunt, I saw a hundred runners passing one block away.
The good news?
Nothing broke.
Again.
No hip, knee, ankle joint issues.
No connective tissue issues - tendons, ligaments, muscles, etc.
There was some vague whinings around mile four from left knee and right hip support tissues about how hard life is, but these mumblings were drowned out by the chirping of the birds and my accelerated breathing.
Amazing.
Life is good.
Very good.
.
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