Lesson of Egypt

On Fox Business there was a “hollering match” as Neil Cavuto (in his polite way) is “talking past” (D) Rep Johnson from Texas (who in turn won’t hear his questions and “talks past” him with her Agenda)…

One of the points caught my ear. She said, in defending all the government spending “We have to invest to create growth. […] we must continue to invest in education.” (as a fairly close paraphrase).

Well, for me, a fair number of “Red Flags” went up.

The first, and most common, is the minor Bald Faced Lie of calling any old expenditure an “investment”. It isn’t.

I may “invest” in my own education, or I may do it just for recreation. It may, or may not, have any economic return. How many “liberal arts majors” are really going to become published authors or wealthy actors? How many folks who study “auto design” will really get a job at GM or Ford? (At least, designing rather than assembling, cars).

Further, if I “invest” in the education of my neighbor, that is not an “investment”, it is a gift. A donation. It doesn’t matter if I do that “gifting” directly, or if it is through the Moose Lodge, or if my Congress Critter takes my money at the point of gun and gives it away (so they can feel “actualized” and “empowered” while I just feel screwed). It’s still a “gift”, not an “investment”.

But those semantics aside, the other “biggy” for me was The Flash on Egypt… and “How’s that working out for you?”…

What about Egypt?

The Riots.

Who was in those riots?

Disaffected youth with college degrees and no job, with little prospect of one. No hope leads to desperation. No hope from artificially elevated expectations leads to catastrophe.


Egypt’s Revolution and Higher Education
What happens when thousands of well-educated college graduates can’t find jobs?

By Troy Camplin
February 06, 2011

One thing few people have noticed about the revolutions sweeping the Middle East and North Africa right now is that they are led mostly by unemployed and underemployed college graduates. Consider the following facts:

In Egypt, the median age is 24. At present more than 25 percent of the population is attending or has attended university, with about a 50 percent dropout rate. University education in Egypt is free. The unemployment rate in Egypt is comparable to that in the United States: 9.4 percent. Yet, 87.2 percent of the unemployed are between the ages of 15 and 29, and Marcus Noland, deputy director and senior fellow at the Peterson Institute for International Economics in Washington, points out that unemployment among Egyptian college graduates is ten times higher than for those who did not go to college (all this is from a Feb. 1, 2011, Marketplace feature on PBS television).

Is it a coincidence that, as Noland also observes, most of Egypt’s anti-government protesters are precisely this demographic? I think not. Among the things an education will do for you is create an expectation that you will get a better job, make a better living, have a better life than if you did not have a college degree. And what if that does not pan out? What if, upon graduation, you find that you cannot get a job in your field, or in anything that requires an education—or that you cannot get a job at all?

And are WE somehow different? Special?


Educated, Unemployed and Frustrated
Published: March 20, 2011

WE all enjoy speculating about which Arab regime will be toppled next, but maybe we should be looking closer to home. High unemployment? Check. Out-of-touch elites? Check. Frustrated young people? As a 24-year-old American, I can testify that this rich democracy has plenty of those too.

About one-fourth of Egyptian workers under 25 are unemployed, a statistic that is often cited as a reason for the revolution there. In the United States, the Bureau of Labor Statistics reported in January an official unemployment rate of 21 percent for workers ages 16 to 24.

My generation was taught that all we needed to succeed was an education and hard work. Tell that to my friend from high school who studied Chinese and international relations at a top-tier college. He had the misfortune to graduate in the class of 2009, and could find paid work only as a lifeguard and a personal trainer. Unpaid internships at research institutes led to nothing. After more than a year he moved back in with his parents.

Millions of college graduates in rich nations could tell similar stories. In Italy, Portugal and Spain, about one-fourth of college graduates under the age of 25 are unemployed. In the United States, the official unemployment rate for this group is 11.2 percent, but for college graduates 25 and over it is only 4.5 percent.

The true unemployment rate for young graduates is most likely even higher because it fails to account for those who went to graduate school in an attempt to ride out the economic storm or fled the country to teach English overseas. It would be higher still if it accounted for all of those young graduates who have given up looking for full-time work, and are working part time for lack of any alternative.

And / or, I would add, the two “20 somethings” living in my home right now. One contemplating extending her education into a Masters as graduation nears, the other has repeatedly applied for jobs, and got nothing, so is attending the local Community College while getting a bit of a “free ride” from me. (Not my kid, but needed a place to stay. Does a good job on the yards ;-)

By The Numbers


definition: age 15 and over can read and write
total population: 71.4%
male: 83%
female: 59.4% (2005 est.)

School life expectancy (primary to tertiary education):
total: 11 years
male: 11 years
female: 11 years (2004)

Education expenditures:
3.8% of GDP (2008)
country comparison to the world: 113

Compare that with China (mainland):


definition: age 15 and over can read and write
total population: 91.6%
male: 95.7%
female: 87.6% (2007)

School life expectancy (primary to tertiary education):
total: 12 years
male: 11 years
female: 12 years (2009)

Both have about 11+ years of education, average. China has an older population profile, with more forced education under the Maoist government, so a higher total population percent that is literate. Egypt has a stronger skew against girls and women, but better than many other Muslim countries in wide spread education. On the face of it, with a younger workforce and equivalent education, Egypt ought to be reaping more net “return” from its “investment” in Education… Yet it has riots from lack of anything to DO with those educations while China is dominating the world economy with growth rates in the 8% to 12% range.

Then we can compare a very highly “invested” country or two:



definition: age 15 and over can read and write
total population: 93.3%
male: 95.5%
female: 91.3% (2003 est.)

School life expectancy (primary to tertiary education):
total: 16 years
male: 16 years
female: 16 years (2008)

Education expenditures:
4.4% of GDP (2008)
country comparison to the world: 89



definition: age 15 and over can read and write
total population: 99%
male: 99%
female: 99% (2003 est.)

School life expectancy (primary to tertiary education):
total: 18 years
male: 18 years
female: 18 years (2008)

Education expenditures:
4.9% of GDP (2007)
country comparison to the world: 71

Hmmm…. 16 to 18 years in school “expected”. That’s into “Masters Degree” land, on average… Almost 5% of GDP “Invested” in education.

Um, I’m starting to have a bit of an “issue” with this notion of “investment” in blanket education having a whole lot of connection with Net National Wealth creation. Or even an economy that is effective and growing.

It looks to me like “other things” strongly dominate any expected “return” on that education “investment”.

So, Egypt, how’s that money sunk into higher education degrees for your population workin’ out for ya?


Youth unemployment in Egypt and Tunisia was a ticking “time bomb”, IMF chief Dominique Strauss-Kahn told CNBC Tuesday, adding that he had warned of such a situation developing back in the summer.

“I remember that this summer I made a speech in Morocco about the question of youth employment including Egypt, Tunisia, saying it is a kind of time bomb and that one of the main concerns the government may have around the region was to try to fix this problem because it couldn’t last very long,” he said.

His solution, of course, was more social spending to redistribute the pie…


The fact that large percentages of its population are young people who are grappling with that joblessness, destitution, and ballooning food prices adds fuel to the volatile mixture of political and personal discontent that exploded against the government in Cairo.


But having a lot of young people isn’t necessarily a plus. Sure, it’s a good thing when they are either working or expecting to work soon inside a relatively democratic society that they feel gives them a voice.

But what about when none of those things are true? What happens when they don’t have a job; when thanks to corruption, grotesque inequality and overall lack of economic freedom, they aren’t likely to get one; and when there is absolutely nothing they can do about it? Then it isn’t usually so good.

In Qatar and Saudi Arabia, 25% of 15-to-24-year-olds are unemployed. It is the same in Algeria and in Tunisia – where unemployed youths spearheaded the protests. And it is the same in Egypt. Egypt is the Arab world’s most heavily populated country and one of its youngest: two thirds of the population are under 30. However, the young make up 90% of the nation’s unemployed (the official rate is 9.4%, but the real number among the young is much much higher).

So, maybe that “central authority and central planning” approach isn’t so good. Maybe, just maybe, we need more economic freedom and control of our own destiny…

So having a young population, and in particular a young male population, without the infrastructure to give them a good life – or at the very least the hope of a good life – isn’t necessarily a recipe for stability or productivity. Chuck in a downturn in the global economy and a spike in inflation, and the next thing you know, you’ve got tanks in the capital, the banks and the stock market are closed and anyone with a private jet is already on their way to Dubai.

But unemployment doesn’t just spark trouble in the emerging world. Look to the UK. Here we know that “young adulthood” is a vulnerable time. And we know that when they are out of work, unemployed young people are more likely to commit crimes than when they are not. And we know that we can trace much of our own past episodes of unrest to high rates of youth unemployment – the 1981 inner city riots for example. It also drives the young into gangs (if you can’t belong in a work place you still need a group of people to join with every day) and sparks extremism.

We don’t have a gender-imbalanced population thank goodness but, like the US, we have a younger one than most other developed countries. The problem? Our young aren’t working enough. Youth unemployment in the UK (those under 25) has now hit 20.3%. That is the highest since records on this began in 1992. It is also not much below the rates in the likes of Tunisia, and means that there are now a million-odd irritated young people knocking around looking for something to do.

I don’t think I need to quote the CIA Factbook numbers for the UK, Saudi Arabia, and Qatar to show that they have very high levels of “investment” in education… So “How’s that workin’ out for ya?”…

Frankly, it looks to me like a great first step on BOTH the rebalancing of the Federal Budget and political / economic stability is to simply abolish the Federal Department of Education. It didn’t exist before President Jimmy Carter signed it into law in 1979, and my education was rather good (all without a Fed hand in things). It’s been a 30 year boondoggle, and can simply be “shit canned” without much worry. Toss in Baby Bush and his NCLB (No Child Left Behind) for a “balanced ticket”; and hand education back to the States and private families. To quote Nancy Reagan “Just Say No” to a socialization of education at the national level. It doesn’t work.

Opportunity No Longer Knocks, It Ask For A Government Handout

No, it’s not the education levels that matter, it is the opportunity levels. Even if that opportunity is nothing more than the opportunity to give it your best shot with what you have and make the best of it you can. Without the government taking your money to make a “gift” of it to someone else (and pocketing a load for “friends of the government” along the way).

My father made a living in several ways. For a few years he ran a restaurant. I helped him build that restaurant (from an empty shell that had been a failed clothing store). We hauled in stoves, counter and stools, tables. I hung the panelling next to the booths. I assembled the kitchen sinks and helped with the plumbing and electrical wiring (that my Dad did). It was a thriving business for many years. (Since then it was demolished when the town government decided to clear the land for something or other. Last I looked it was still a “waste of space” … but that was long after my Dad sold it at a profit.) He then made a Real Estate Office and sold farms for a living. At the time, the Real Estate Sales Licence exam mostly meant you knew what an acre was and could fill in the forms. So it took him about a day to pass it. He loved farms and sold a lot of them. Made national Salesman of the Year one year for United Farm Agency (a major realtor at the time).

What was his “investment” in education? He did not graduate from High School. He dropped out his senior year to enlist in the Army for W.W.II as he felt that was more important. In the Army, he was a “Combat Engineer”. They figured out he was bright, so he got to design and construct bridges, and rig them with explosives to blow them up, all under enemy fire. He had a gift for numbers that they recognized.

On one occasion, he and a buddy drove 50 miles behind German lines in a “Duce and a Half” truck and picked up a load of steel from a Nazi base to use to rebuild a Nazi bridge that the Nazi’s blew the following day. (While it was written up as an heroic act, he shared with me that they were lost and just “went into the base”, realizing what they had done when the bored guard at the front gave the Nazi salute… which they returned, without slowing down… it was dark at night and captured trucks were frequently used, so they just headed to the steel pile, figuring that to leave empty would raise suspicions… and it worked!)

What did he have, in that post W.W. II period? Opportunity and the ability to keep enough of what you could make to do something with it. He eventually was employing about 4 or 5 non-family staff in the restaurant. When he went into Real Estate, that dropped to 2, but higher paid.

So I look at Egypt, with a load of unemployed and well educated folks and I ask: “What is missing?”

It isn’t “government gifts”. It isn’t someone “giving them a job”.

All that is missing in the opportunity to use what you have to make what you can and keep it.

My Brothers In The Arab Street

This is the story that started the present chaos in North Africa that has spread through the entire Arab world.

It started with a young man who just wanted the government to leave him alone so he could do his best to make what he could:


Tarek al-Tayyib Muhammad Bouazizi (March 29, 1984 – January 4, 2011; Arabic: طارق الطيب محمد البوعزيزي‎), more commonly known as Mohamed Bouazizi, was a Tunisian street vendor who set himself on fire on December 17, 2010, in protest of the confiscation of his wares and the harassment and humiliation that was allegedly inflicted on him by a municipal official and her aides. His act became the catalyst for the Tunisian Revolution, inciting demonstrations and riots throughout Tunisia in protest of social and political issues in the country. Anger and violence intensified following Bouazizi’s death, leading then-President Zine El Abidine Ben Ali to step down on January 14, 2011, after 23 years in power.

The success of the Tunisian protests sparked protests in several other Arab countries, including several men who emulated Bouazizi’s act of self-immolation, in an attempt to bring an end to their own autocratic governments. Those men and Bouazizi were hailed by some Arab commentators as “heroic martyrs of a new Middle Eastern revolution.[…]
He supported his mother, uncle, and younger siblings, including paying for one of his sisters to attend university, by earning approximately US$140 per month selling produce on the street in Sidi Bouzid. He was also working toward the goal of buying or renting a pickup truck for his work. A close friend of Bouazizi said he “was a very well-known and popular man [who] would give free fruit and vegetables to very poor families”.
According to friends and family, local police officers had targeted and “mistreated” Bouazizi for years, including during his childhood, regularly confiscating his small wheelbarrow of produce; but Bouazizi had few options to try to make a living, so he continued to work as a street vendor. Around 10 p.m. on December 16, 2010, he had contracted approximately US$200 in debt to buy the produce he was to sell the following day. On the morning of December 17, he started his workday at 8 a.m. Just after 10:30 a.m., the police began harassing him again, ostensibly because he did not have a vendor’s permit. However, while some sources state that street vending is illegal in Tunisia, and others that Bouazizi lacked a required permit to sell his wares, according to the head of Sidi Bouzid’s state office for employment and independent work, no permit is needed to sell from a cart.

It has also been claimed that Bouazizi did not have the funds to bribe police officials to allow his street vending to continue. Similarly, two of Bouazizi’s siblings accused authorities of attempting to extort money from their brother, and during an interview with Reuters, one of his sisters stated, “What kind of repression do you imagine it takes for a young man to do this? A man who has to feed his family by buying goods on credit when they fine him … and take his goods. In Sidi Bouzid, those with no connections and no money for bribes are humiliated and insulted and not allowed to live.”

Regardless, Bouazizi’s family claims he was publicly humiliated when a 45-year-old female municipal official, Faida Hamdi, slapped him in the face, spat at him, confiscated his electronic weighing scales, and tossed aside his produce cart. It was also stated that she made a slur against his deceased father. Bouazizi’s family says her gender made his humiliation worse. His mother also claimed Hamdi’s aides beat and swore at her son. Countering these claims, in an interview with Asharq Al-Awsat, a brother of Hamdi claimed neither his sister nor her aides slapped or otherwise mistreated Bouazizi. He said they only confiscated Bouazizi’s wares. However, an eye witness told Asharq Al-Awsat that he did not see Hamdi slap Bouazizi, but that her aides did beat him.

Bouazizi, angered by the confrontation, went to the governor’s office to complain. Following the governor’s refusal to see or listen to him, even after Bouazizi was quoted as saying “‘If you don’t see me, I’ll burn myself'”, he acquired a can of gasoline (or two bottles of paint thinner) and, at 11:30 a.m. local time (less than an hour after the altercation), he doused himself in front of a local government building and set himself alight.

And no amount of “investment” in “education” will fix that basic problem of lack of freedom.

We are all Bouazizi when we must beg from the government the “permit” to live our lives as best we can and must pay a bribe, even if called a tax, to survive and keep a small part of the produce of our labor.

THAT is what is killing the world. Writ large in Global Socialism, or writ small in one man, one vegetable cart, and one abusive “officer”. The end game is already on display in Egypt, Tunisia, Libya, Syria, Yemen, … the only question is how far it will spread, and how fast.

And no amount of taking one man’s vegetable cart to “invest” in a gift of another man’s government approved vegetable cart is going to make that situation any better.

What is missing is the freedom to use what opportunities you can make for yourself, and if that includes getting an education, well, then folks will do that. All on their own. All it takes if for Government to get out of the way and leave folks alone. That was how things were for my Dad and it worked just fine.

About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
This entry was posted in Political Current Events and tagged , , , , . Bookmark the permalink.

40 Responses to Lesson of Egypt

  1. I read this recently and thought it might make you smile about a serious matter ;) …
    The new government in Egypt has asked the city’s taxi drivers to drive
    around Cairo sounding their horns. It is thought that the familiar sounds
    of the city will induce a return to tranquility and normality. Operation
    Toot ‘n Calm ‘em will last for the rest of the week.

  2. Level_Head says:

    Bouzazzi — Egyptian for bizarre, one could guess. It is a great pity that his case is NOT bizarre for the circumstances and culture.

    The protesters, visible and background, seemed to be saying:

    We have too much education
    We demand some thought control
    No dark allusions to Mohammad
    Dhimmis leave our faith alone!

    ===|==============/ Level Head

  3. pyromancer76 says:

    “What is missing is the freedom to use what opportunities you can make for yourself”. Beautiful essay. Works so well on the everyday level. Works on the level of freedom to develop energy resources. It does become something of a problem, however, when those who have become successful and wealthy continue to buy favors from the government. Almost all of the “robber barons” of the nineteenth century bought their congresspeople big time. This is one of the real gnarly nuggets of success from freedom and opportunity, the American example of which is probably the most exciting and honorable in the world.

  4. R. Shearer says:

    And apparently Obama describes tax increases as, “spending reductions in the tax code.”

  5. E.M.Smith says:

    @Sandy McKlintock:

    How Could YOU! (Do you have another ;-)

  6. Scarlet Pumpernickel says:

    We need Greenpeace to educate us instead

  7. Scarlet Pumpernickel says:

    With Egypt, it’s simple, the Muslim Brotherhood were banned previously, and the old President was democratically elected. Now the Miltiades rule and it won’t be long now, because the Brotherhood is not banned, so soon it will take power :P

    Seuz canal watch out!

    BTW anyone notice the Iran Warships go through the Seuz Canal, the first time in 20 years last month? Came to visit their friends, Syria, dock in their harbour, so the “Allies” couldn’t attack that country too…

  8. dearieme says:

    One of the biggest disappointments of my daughter’s time at university was to discover how few students have any discernible intellectual interests. And she went to one of the best.

  9. David says:

    E.M. states…”Um, I’m starting to have a bit of an “issue” with this notion of “investment” in blanket education having a whole lot of connection with Net National Wealth creation. Or even an economy that is effective and growing.

    It looks to me like “other things” strongly dominate any expected “return” on that education “investment”. “”

    Thanks for the entire post as it well articulates a very large concern I have. The expected R.O.I. of all statist run education is an acceptance and resulting world wide rush into the “socialism shiny thing” in whatever form, progressive left to Islamist.

    The one rebel (Mohamed Bouazizi) who inspired this was calling for freedom from government. The susquent millions of rebels are calling for freedom through government, completely unaware of the difference, just hoping the new goverment does a “better job” of taking care of them, of “giving” them a job. The founding ideals of the United States of America have been forgotten by the world and its own citizens. Our education/indoctronation, primary through PHD elite, is responsible for this.

    All of this is why I posted this comment on your “budget” post; “but everything appears to be going in the direction of the progressive left, a headlong run of billions of souls into dependency on governments, a dependency of needs that government simply cannot fulfil.”

    So my concern is that your observed 5 to 50 year time span of socialism collapse appears to be rushing towards a syncronus world collapse at the same time, and the world wide elitist education/indoctronation will blind the people so that they won’t even know what hit them.

  10. Pingback: the Unseen Load of Government « the Air Vent

  11. David says:

    Scarlet Pumpernickel says
    …”Seuz canal watch out!

    BTW anyone notice the Iran Warships go through the Seuz Canal, the first time in 20 years last month? Came to visit their friends, Syria, dock in their harbour, so the “Allies” couldn’t attack that country too…””

    Humm? Glen Beck did notice, and I have just recently started occasionally watching that “conspiracy nut” and I notice that he notices a lot of things. In retrospect he may not be such a nut. His R2P ideas in connection with Samantha Powers MAY have legs.

  12. pyromancer76 says:

    @David. Of course Glenn Beck’s R2P ideas in connection with Samantha Powers has legs. (I once taught her “human rights” material.) Beck often gets his history wrong, but he certainly is clear about the connections in the present. The current President was “put in place” for R2P purposes, IMHO. I have heard that Beck’s show will soon be off the air; haven’t had time to check, tho.

    E.M. and others. Don’t give up. Cliche time — darkest before the dawn? Continue with the truth as this is one of the best sites for it.

    @dearieme. From my hat as an American historian, when were many Americans interested in intellectual interests? I think it is too easy to idealize the, our, past. When large numbers of any population “go to college”, the material must be “dumbed down” — even at “the best”. This is democracy, the part we might not want. Sounds cynical, but I believe it is simply a truth.

    Today we want to help our young people understand that what they want and need is a job, not an education first without any understanding of what job that learnin’ might be for! They might be very, very interested in this outcome if it presented to them as “opportunity”. American freedom for opportunity is one of the headiest truths discovered in the nineteenth century by people (not intellectuals, not elites) breaking all the bonds of class and race-ethnic-origin pigeonholing (look how much blood was spilled to eliminate slavery — for the future of opportunity).

    Find us some leaders who can articulate this kind of hope and change that is grounded in real opportunity and real financial understanding and we are off to the races (with our abundance of natural resources). We have to clear out some cobwebs first, though. IMHO, we are at the end of an era (an old economy and mindset — the rust is showing), and about to begin another.

  13. Adam Gallon says:

    Similar things have occured in Higher Education in the UK. “Trust Me” Tony Blair (You might have heard of him, slimey ex-Prime Minister) and his Government decided that 50% of young people should go to University.
    When I went, IIRC, it was about 5%.
    Other than taking a lot of 18-21 year olds off the “Unemployed” statistics, it’s done nothing, except expand the HE field, sprouting courses to soak up these students, many of whom are on courses in 2nd rate (or worse) “Universities”, the courses are of a similar standard and lead to unwanted (as far as the job market’s concerned) degrees (Media Studies, Social Studies, Theology with Water Management – I kid you not, that was offered by “Oxford Brookes University”, [Not one of the “real” Oxford University colleges, it was originally a Technical College, then a Polytechnic]
    The real cost has been tuition fees and student loans and a lot of students dropping out of University and disillusionment when they realise that their wonderful degree allows them to compete in the job market to flip burgers in McDonalds or stack shelves in a supermarket.

  14. Jason Calley says:

    @ E.M. “We are all Bouazizi when we must beg from the government the “permit” to live our lives as best we can and must pay a bribe, even if called a tax, to survive and keep a small part of the produce of our labor.”

    Yes. Brilliant.

    E.M., even when demands on my time have stretched me far too thin, (as has happened recently) I find that any spare moments spent reading your thoughts are well spent.

    Yes, the problem is lack of freedom, especially the freedom to be left alone. A leech here, a tick there, a mosquito bite now and then — we can all live with that, but who can live when every effort, no matter how big or small, leaves you open to have the fruits of your efforts taken away. Who can be happy when there is a paper and a license and a rule for everything, even how big your door knobs are?

    I am not a big fan of Ayn Rand, but I know from personal observation that more and more of my friends are starting to figure out how to withdraw from the national economy. Nothing illegal, just “why should I work more hours so the tax man will get more money? Why not work less and just fix my own roof, grow my own garden, repair my own car?” Atlas really is starting to shrug.

    Meantime, the young people here in the US are figuring out what the young people of Egypt already know. The system is rigged. There are owners, and there are cattle. The young people are starting to see that all the happy-happy-talk-talk they were told in school was just to keep them from understanding that they are cattle.

  15. E.M.Smith says:

    @Pyromancer76 & David: R2P? OK, I watch Beck from time to time (and generally find he’s got the right dots, and usually connects them pretty well, though sometimes he’s a bit of a ‘rush to judgment’ on them; and his view of history is, er, “cursory”…) but I guess I missed something. So, definition, please?

    The image of cobwebs caused me to “Flash” on a photo of our Congress Critters, some seated, some standing arm raised in protest, one with a gavel about to strike… all stagnant and covered in a thick layer of cobwebs… Ossified where they stand… as for all their motion and noise, they really are “sound and fury signifying nothing”…

    @Adam Gallon:

    Another one of those “repeal the laws of economics via vote” things that politicians keep on trying to do.

    There is an economic job market. It can absorb / utilize some fixed number of folks in any one field. Supply too many of them, the wages collapse and most of them are unemployed. One of my favorite joke lines (that happens to be true) is:

    “As an Economist, the first thing you learn is the Law Of Supply And Demand. The second thing you learn is that there is a very large supply of economists and almost no demand.”

    Social studies, literature, fine arts, media studies, {insert minority here] studies, all are doomed to be employed doing something not in their field. (Other than the few masters and PhDs that get jobs teaching it).

    Even things like Aerospace Engineers if produced in excess..

    In the 1960’s Aviation and Space where the big things. We churned out a load of folks with engineering degrees in those areas. Then a recession hit, and several “Aerospace” companies packed it in (some moving elsewhere, some just ending). I got a part time job pumping gas at a local gas station. It was run by a guy who had been an Aerospace Engineer (I think at Lockheed?) and ended up buying a gas station and fixing cars for a living (as the plant was shut and everyone let go). All those fresh graduates in the same field? Well, they found something else to do. And this isn’t just a historical problem. My neighbor who was selling mortgages had a masters in Aviation Engineering… But just how many of those are needed by the few remaining companies that actually design airplanes? (Boing, Airbuss, some secret defense work by Lockheed/Martin and Northrup, list getting thin… though there is some growth in 3rd world countries…) A couple of hundred? That’s less than one graduating class.

    (One such friend got a job ‘blowing up things on ships’ for some government agency doing R&D of some sort. He liked the job and the money OK, but didn’t get to do any design work; and wished he had taken more courses in “blowing things up” :-) He was sort of ideal for the job though, as he was congenitally deaf. No risk of hearing loss … a “feature” in that particular job…)

    @Jason Calley:

    I thought you would like that ;-)

    But that line about gardens and roofs… OK, I’ve posted about my garden, but how did you know I have roofing on my agenda for this spring? (Honest. I’ve got my ‘shingle hammer’ and I’ve roofed a small shed I built to ‘get practice’. The neighbor paid some guy to do his roof, who tried to “sell me” on a package. I pointed at the shed… He said: “You did that? Nice job. Well, thanks for your time.”

    Had the main water line to the house bust a leak at the ground surface (corrosion max is there). Got to “play plumber” for a weekend. It’s fixed now. Replaced the shower faucettes when they leaked. Do all my own electrical work. Those days learning “trades” with Dad are paying off… Probably need to paint the house soon. Last time I painted a house I was about 12, but I remember how to do it… without expensive equipment…

    I’m actively “moving up the food chain” on things “bought in” to the family budget.

    One interesting consequence? I put fuel in my car about once per quarter. (I log every fuel purchase in the ‘car book’ with MPG too). It was a bit startling to realize. As a “computer consultant” I was racking up about 40,000 miles / year. About a “tank a week” with two sometimes. Then just “stopped doing it”. At this rate I will never buy another set of tires and my “fuel” costs about $45 over 90 days or about a half a buck a day. I have no car payment and will never buy a new car. That’s one Starbucks Coffee a week. Just sort of left that whole “petroleum thing” behind. And with it all the excise taxes and gas taxes…

    That started me actively driving other things out too. So, for example, I now only buy fresh friuts and vegetables in season and only what I can’t grow myself. Bananas mostly and the odd potato / celery /onion as I’ve not “got it down” enough yet to produce those in quantity. Squash and green beens I grow my own or wait. Still working on broccoli ;-) as my timing of growing it isn’t quite right…

    Clothes? Well, when you spend your day bumming around the house and garden, all those dozens of T-Shirts folks gave me over the years promoting their company and project are just fine… I figure it’s about a 20 year inventory and that’s probably about what I’ve got left in me. Pant’s are a bit of an issue. I have to buy one of “Target’s Cheapest” at $10-$14 about once a year or two… Kind of glad now that I was unable to bring myself to just pitch out those “crap advertizing shirts” ;-)

    Soap? Can’t find lye at the store anymore. As a hobby, I’d made a batch of soap about 20 years ago. (It sits in storage in the garage). Started using it recently. Figure in about a year I’ll need to work out how to make my own lye. (I think I can make a decent potassium hydroxide from wood ashes from the bamboo I cut each year, but I need to “do the homework” first… I’ve got “the directions” for wood lye somewhere…)

    Oddly, doing this “Urban Homesteading” has been remarkably cathartic and relaxing. I just wish SWIMBO had let us move to 20 acres when we could… Ah, well, “Making what I can with what I’ve got”… even if a small urban plot…

    OTOH, she’s gone “vegetarian” with the rest of the family leaving me the only meat eater, so don’t really need the space for pigs, cows, etc… But it would be nice to have enough chickens as to not need to buy eggs… and a goat for milk would save me more than my gas budget… Oh Well…

    At any rate, yes, more folks are just “Shrugging” it off and getting on with getting on…

    And the government wonders why it’s not getting as much tax revenue… “You produce less of what you tax”. We have taxed production, wealth, work, profit. So you get an unproductive poor lazy and unprofitable society. Simple as that…

  16. Brian H says:

    About the soap: get some info on making glycerin soap. It’s a marvel. As is glycerin itself. (As e.g.’s, handled my own cases of psoriasis, and ingrown toenail, and periodontal disease. And much more.)

  17. PhilJourdan says:

    Frankly, it looks to me like a great first step on BOTH the rebalancing of the Federal Budget and political / economic stability is to simply abolish the Federal Department of Education.

    Here! Here! As one who has worked in education for most of the past 20 years (State, local, and now CC), I can tell you the biggest hindrance of getting assets to students are the FEDS! (The second biggest is the state).

    Toss in Baby Bush and his NCLB (No Child Left Behind) for a “balanced ticket”; and hand education back to the States and private families.

    I am intimately familiar with that boondoggle. While I welcomed a relief from the Clinton pecadillo years, that was my biggest disappointment (given that Teddy wrote it, that is hardly surprising).

    (While it was written up as an heroic act, he shared with me that they were lost and just “went into the base”, realizing what they had done when the bored guard at the front gave the Nazi salute… which they returned, without slowing down… it was dark at night and captured trucks were frequently used, so they just headed to the steel pile, figuring that to leave empty would raise suspicions… and it worked!)

    What a fantastic story! having grown up in and around the military, I can tell you that most of the heroic stories really played out like this!

    We are all Bouazizi when we must beg from the government the “permit” to live our lives as best we can and must pay a bribe, even if called a tax, to survive and keep a small part of the produce of our labor.

    THAT is what is killing the world.

    Actually that is why it is called a “revolution” instead of evolution or migration. Once they have enough power, and life becomes this way, then the revolution comes (not from the left, but from the right) and we start over.

    Over all an outstanding application of a situation that may seem like it is far away and a different land, but is applicable to us today. Thanks.

  18. Duster says:

    A point:

    When looking for the source of our economic problems, it would best to understand what money is, and where it comes from. I recommend watching the two videos Money as Debt and Money as Debt 2, easily located using Yahoo or Google. Banks don’t like them and neither do classical economists. They particularly give the lie to the endlessly repeated images of government presses printing money. Of particular interest is the issue of the European central banks, especially the Bank of England, roll in precipitating the War of 1812.

    Watching these videos will not necessarily really tell us where “money comes from” but I guarantee it will seriously complicate you view of how things work, what value is, where it “comes from” and where it goes. You will certainly never see any bank in the same light.

  19. E.M.Smith says:

    @Brian H:

    Glycerine soap starts with making regular soap, so you still need some hydroxide (sodium, potassium, even ammonium can be used…).

    In the ‘traditional way’ you precipitate the soap and glycerine separates in the boiling pan. I used a ‘short cut’ of lye and solid fat mix and let set up then wait…. That leaves the glycerine in the soap. Follow with a ‘few months’ of air cure and any excess lye converts to carbonate. The result is a very nice soap kind to skin, yet effective…

    To make glycerine soap, one starts with the ‘traditional’ and dissolves it in glycerine and alcohol, then lets the whole works “gel” into a transparent soap. Nice esthetics, but not much different from my route (other than mine is opaque and you must be more careful about ratio of lye).

    These folks have sugar in the mix, but that’s not what I remember. OTOH, they are using soap scraps….


    I miss soap making… it was fun… I need to find a source of cheap and easy lye…


    The Dept of Ed at the FED level does nothing of any good. Zero. It was a political creation of Carter as part of his “legacy”. The 2010 budget per the wiki was $56 Billion


    2011 estimate $71 Billion.

    You would save more money than EITHER the Dimocrats or the Republicants are proposing simply by saying “Why do we need a Carter Legacy?”

    Education worked FINE in the 1960s without the feds and I see nothing in the constitution that says it is a federal job to provide eduction.

    IMHO, that example is the MODEL of what ought to be done.

    Pick whole departments and just end them.

    Maybe I’ll do an article or two on that…


    I’m going to be an economist geek here for a moment:

    You will notice that all central banks talk about “currency” and not “money” most of the time the exception being various levels of “money supply” that had the names and definitions set before the era of Fiat “money”…

    This is because “money” includes in the definition ‘store of value’ while “currency” is only “medium of exchange” without the “store of value” part.

    Substantially no significant country on the planet has ‘money’ any more, they all have “currency”…

  20. Jerry says:

    Alternative universe budget :) ?

    Click to access The%20CPC%20FY2012%20Budget.pdf

    Kinda entertaining till you find out these folks are the largest caucus in Congress. Just love that 90% FICA tax. Greece or Egypt – which do we become first? I will just be long 00 buck.

    Lye: http://www.lehmans.com/store/Personal_Care___Soaps__Shampoo_and_Soapmaking___Soapmaking___Sodium_Hydroxide_for_Soapmaking___36240240?Args=

  21. KevinM says:

    Great writing.

  22. E.M.Smith says:


    Thanks! I just write what I feel and think… guess it works ;-)


    I was only able to read a little of it… then I had this intense urge to run away from some unseen threat or danger …. (no no smiley…)

    Thanks for the soap link.

  23. pyromancer76 says:

    E.M., As others have expressed, what a pleasure to hang out at Chiefio.com. Your economist background plus your good mind are enabling you to live as an urban homesteader trader in addition to sharing your varied interests with others. Sounds like a pretty good way to live, although you must spiff up for the misses at times.

    I also wish I had bought 20 acres, or even one, but I too suffer from a small urban plot. Your way of living brought back many fond memories. Grandfather homesteaded in Arizona and they did everything themselves. Other-side grandmother came from a farm background and they made their own soap as well as many other things. Aunt and Uncle ranched (small) and I got to milk goats, play with the babies, slop a pig, take care of chickens, geese, and rabbits, as well as pick the orchard for market and learn canning. They also designed and built two houses. My Dad would help with the plumbing and electricity and he, like you, did it all himself. I hope to rent an “incubator” and hatch chickens from eggs so the grandkids can experience a little of life. And some bunnies would be nice for them, too.

    Definitely, we all vote for eliminating the department of education, completely, absolutely, get the feds out. How many elites will that throw out on the job market, I wonder? Maybe they can take up urban homesteading, too. I look forward to your future essays on each department. Evaluating the various departments and proposing cuts and eliminations is something I planned to do once upon a time, but the task is enormous. I think your energy and aspie focus is exactly what is required. I’m sure your readers will expand exponentially and you will help the next presidential candidate figure it out.

    Many who are older might be opting out of the opportunity market — we can because of skills we have learned and smarts to put them to work, but young people (enough young people to matter) hunger for opportunity if it is dangled in front of them. They don’t all buy the marxist line. I worry when too many good people become pessimistic.

  24. E.M.Smith says:


    Well, we can all “chip in” on ideas of what to cut from the budget… It doesn’t have to be all one person ;-)

    Dad was raised on a farm. We had 5 acres outside of town where he had a ‘toy farm’ and raised the beef we ate. In the back yard (our house was on a 1/4 acre lot…) we had a well and a very large garden. About 80 x 20 feet most years. Also oranges in the front yard and an an apricot tree and apple tree.

    We even had an old antique “push plough” that had a metal front wheel with metal rod spokes and wooden handles behind the blade… Oh, and rabbit hutches…

    So while I didn’t grow up “on a farm” i did grow up “on a very large garden” near a farm ;-)

    My Dad and I drilled the well with a post hole digger (the ‘turn” kind) and extension pipe. At 10 foot we hit ‘hard pan’ that is like clay based cement… and at 13 foot broke through it. We stopped at 14 foot as we had water up to the 10 foot level after the “punch through” and did about 25 GPM IIRC (I don’t think the pump would go much faster than that ;-)

    We had “city water” that was unmetered (at least until a dozen years later). As near as I can tell, my Dad wanted to put in the well just so I’d know how to do it… and instill that “self reliance” aspect. That, and I think he wanted to make a bit of a complete “toy farm” out of things. Worked too ;-)

    BTW, I do still have the white shirts, ties, tweed coat etc along with dress shoes, for when the Mrs. tells me we’re going somewhere…

  25. Richard Hill says:

    EM, you will never get rid of the DoE. Das Buro stet immer… (Bismark?) Bureacracies live for ever… (Reagan?). How about a practical idea. re-purpose? merge?

  26. pascvaks says:

    Won’t be surprised if Egypt and a few other Arab Countries start building pyramids again. Got’a do something with all those folks with nothing to do. Seems there’s also a potential problem brewing in the ballot box. When people get excited about the way things are and get bright ideas about the way they ought’a be, they always seem to pick a big mouth looser as “Leader” and things just get a lot worse.

  27. pascvaks says:

    PS: As ‘we’ all know, when you want to take apart (and strengthen) a House of Cards, you take the cards off in reverse order – last on, first off. It’s also the least nervewracking.

  28. David says:

    on 14 April 2011 at 5:51 pm E.M.Smith
    @Pyromancer76 & David: R2P? OK, I watch Beck from time to time (and generally find he’s got the right dots, and usually connects them pretty well, though sometimes he’s a bit of a ‘rush to judgment’ on them; and his view of history is, er, “cursory”…) but I guess I missed something. So, definition, please?”

    Please consult “Watchingglennbeck.com”, March 24, 2011, “Is America on the Wrong Side”.
    Keep in mind that Obama sees the Israeli/Palastinian conflict as the conflict to be resolved in the Mideast. BO did not immediately commit himself to the “salvation” of the 100% innocents from the 100% evils until Hillary Clinton and Samantha Power confronted and convinced him. Power is one of his top foreign policy advisers. She wrote a work on genocide (which book was read by BO and led him to hire her). This book was transformed into manual form by a Soros foundation and has become the “new”, brandnew, UNO doctrine which bears the acronym R2P, the “Right to Protection” and became the normative justification of BO’s non-congressional decision to wage overwehlming war against Gaddafi

    Powers, with the help of Soros, has gotten the UN to accept, though I note selectively applied, said docrtine. The doctrine states that any government that shoots at its civilian people (or that of another nation) is committing a massacre and that means genocide. (Power was and is very upset about the Rwanda massacre and the non-action of other countries, e.g. Clinton’s administration — which led to hate battles between Power and Hillary, not soothed with Hillary’s conversion.)

    This R2P doctrine has been applied by Power to the conflict between Israel and the Palastinians. Power has made clear many times her disdain for Israel (re Gaza) and in one interview I have looked up and listened to (and mostly played by Beck March 23) indicated her solution to the Israel vs. Palistinian conflict is to stop payment of all 3 billion dollars of military aid to Israel each year and give the money to the Palastinians — which includes specially Gaza — and send a massive army to police both sides. This army must by implication be more powerful than any potential aggresssor, which in a stand off between Palastinians and Israelis has to mean Israel as the main object of the doctinal discipline!!! Power notes that this would require accepting the loss of political support by a powerul group (which implies that BO, if he follows her, will surrender the Jewish vote — I would guess in his second administration). The point of Power’s is that a solution must be imposed by threat or use of enormous miltary strength. This is according to her a sad fact, but it lies in the very nature of stopping massacres by imposing a solution! Following Beck a bit further I would suggest that Obama’s, at first “reluctant” and then Hillary/Samantha inspired, applied the doctrine to Lybia, Lybia being a good test and an “object” against which BO could martial support, e.g. UNO resultion and the ego hungry Sarkosy and a swell as McCain/Lieberman, and others. Obama’s point is not to remove Gaddafi or not, rather to estabish a presedence for any future such undertaking, be it Israel the “object” or not. Given Power’s desired imposed solution, it is hard not to assume Israel as the ultimate telos.

    And that is the thesis presented.

  29. Jason Calley says:

    @ Richard Hill “EM, you will never get rid of the DoE. Das Buro stet immer… (Bismark?) Bureacracies live for ever… (Reagan?). How about a practical idea. re-purpose? merge?”

    Ain’t it the truth!

    I think Reagan was the last major politician to call for the abolishment of the Department of Education; it used to be (back during the days when dinosaurs roamed the Earth) one of the recurring planks of the old Republican Party. Of course the joke is that the Dept of Ed has already been re-purposed as a social engineering group having almost nothing to do with actual education. Similarly, the Department of Energy has little to do with energy, but much to do with development, manufacture and storage of military atomic weapons. Just as FEMA spends most of its budget not on emergencies but on continuity of government projects. Even the federal battle against drugs started as a re-purposing (after the end of prohibition) of the FBI mission to stamp out alcohol.

    Mission drift is not just a bug, it is a feature!

  30. David says:

    BTW I have heard of nothing Congress is doing to enforce the war powers act on Obam’s imperial dictate which has thus far ignored congress entirely. If Congress ignores this it is a terrible mistake and historical precedent.

  31. PhilJourdan says:

    You would save more money than EITHER the Dimocrats or the Republicants are proposing simply by saying “Why do we need a Carter Legacy?”

    My biggest disappointment with Reagan was that he did not carry through on his promise to eliminate the agency. The longer it exists, the harder it will be. That coupled with the inborn trait of liberals to lie (even when the truth will suffice) and the laziness of the populace in thinking for themselves means it will probably be his legacy until the next iteration of the US comes about.

  32. Jason Calley says:

    @ E.M. “how did you know I have roofing on my agenda for this spring?”

    Just a lucky stroke on my part, but the truth is, I have some home roofing repair on my own list as well. I’ve done three roofs over the years, two with shingles, one with sheet metal. The sheet metal is MUCH easier, in my opinion, but I was just doing a good-enough job on it, no fine finish, deep woods style.

    “Had the main water line to the house bust a leak at the ground surface (corrosion max is there). Got to “play plumber” for a weekend. It’s fixed now. Replaced the shower faucettes when they leaked. Do all my own electrical work.”

    This gets to the crux of the issue, and if you would, allow me to get a little abstract. You, and I, and a lot of the other posters here have commented on the increasing bureaucratic overhead of earning a living. Not just the unending fees and taxes, but the also unending permits, licenses and paperwork. Every bit of that is a disincentive for people to produce wealth. As bad as that is, there is a worse factor; all those individual pay-offs to the powers-that-be distort the pricing mechanism of the marketplace. Suppose my widget has a production cost in a free market of one dollar; in a regulated market, the price is two dollars. The only way to stay in business is to sell for two dollars plus. At some point I find that no one wants a two dollar widget and I go out of business. Even if the price distortions are relatively minor, they will still close businesses if the distortions are unpredictable. Bit by bit, the division of labor is destroyed, and THAT ends the ability of a society to generate surplus. It is only by having an accurate and dependable pricing mechanism that any business is able to stay in business, and it is only by having the production and service factors specialized that we can create goods efficiently and predictably. We are losing that.

    I can fix a car – but it takes me longer than my friend the mechanic. I can fix a roof – but I don’t have a pneumatic nail gun or a super long ladder. I can grow a garden – but not as efficiently or productively as a man with a tractor. And yet, I find myself under the truck changing oil, or in the garden pulling weeds, or on the roof with a hammer. (Side note; I do not have a long ladder and my old house has a VERY steep roof that is about 35 feet above ground level. Solution? Cut a hole in the roof with a chain saw. Build a removable hatch. Put a chain around the chimney for an anchor point. Leak in the roof? Go through the attic and the roof hatch. Get out the climbing rope, put on the harness, clip rope into the chain. Rappel around the roof with tar bucket and hammer in hand. Never ending amusement for the neighbors to watch.) So anyway, why do I do something so inefficient as climb around on my roof? Am I so crazy that I freely choose to do things the hard way? Well, yes, I may actually be that crazy, but that is not why I choose to do these inefficient things. I do them because the pricing structure of the free market has been damaged; it has been distorted by men with guns who are selling me a product called “we will not kidnap you or arrest you when you do business”. It is not a cheap product to buy, neither in time nor in dollars. Every time I buy a product or a service, these men interject themselves into the transaction, and now the division of labor is breaking down because of it. We are seeing at least a part of society drift backward into subsistence living because at some point, that becomes the smart thing to do.

    Oh well…we must take what is on the plate in front of us. For now – but the system as it is presently constituted is not stable as it plunges deeper and deeper into collectivism. Ironically, it is only the surplus accumulated under the more free markets that allow for the initial seeming success of various Great Socialist Programs. Once the granaries that free markets filled, are emptied by the bureaucrats, once the seed corn is eaten, we will see what the result of our national experiment in neo-socialism brings us. As von Mises said, “The choice is not between capitalism and socialism. The choice is between capitalism and chaos.”
    And in the meantime, I expect to smell the roses and enjoy the sunsets. :)

    By the way, personal choice on my part (due to a freely given commitment to those I love), but I just wish I could get by with as little gasoline as you use. Nice set up!

    “Can’t find lye at the store anymore.”

    No, it has all but disappeared around here also. Apparently one of the various home drug manufacturing techniques uses lye, so now many stores do not choose to carry it. Another victim of the war on Drugs. As I remember, the old Foxfire books had good info on making your own lye.

    “OTOH, she’s gone “vegetarian” with the rest of the family leaving me the only meat eater, so don’t really need the space for pigs, cows, etc…”

    I know that you have personal and very much legitimate reasons for not inviting your rabbits to dinner – but have you considered guinea pigs? I understand that they are still a staple of the Andes diet where they originated. Also, they have a convenient package size.

    “At any rate, yes, more folks are just “Shrugging” it off and getting on with getting on…”

    And not just more folks; the folks with a clue, the productive folks, some of the brightest folks, the 20% who generate 80% of the profits.

  33. pascvaks says:

    “In the midst of chaos the wise wait… and wait… and… eventually, they get tired of waiting and… well the rest is history, pure and simple history.”

    Someone else (from New England, I think) once said, “You can’t get there from here, you’ll have to go around.”

    Life’s a beach!

  34. E.M.Smith says:


    I can see it now, the “New Egypt, just like the Old Egypt”!

    Odd, I was looking at the budget and thinking the same thing. I’ve started making a list in reverse presidential order of what did they “do” at the depeartment level. If all you do is “unwind” their “legacy” one at a time (or sometimes in couplets like DoE and NCLB) it’s not that hard to get to a whole lot less government “right quick”, and without too much disruption…

    FWIW, while *I* was driving in New England ( I think it was New Hampshire, but could have been Vermont. It was 35 years ago and we were just passing through headed to New York via the scenic route…) I stopped in a small town.

    Asked about another small town where we had been told there was a good chowder house ( I love Milk Chowder…)

    Was told, after a long pause and “Weeellll… I hauve t’ say. Ya caan’t get theyer from heyar, you’ll have to go round the othar waay.”

    Yes, they really do say that there.


    Oh My God. So perpetual “police power” anywhere in the world any time any government shoots at someone? And who polices the police?

    What happens to the notion of a sovereign nation?

    What happens if the “police power” is the evil?

    That is just so broken.

    The only good news is that Russia and China will never go along with it (though they will sit back and watch as long as it doesn’t touch their ox…)

    @Jason Calley:

    I vote for “repurposing” to “go look for a real job”…


    What I’ve observed is that folks don’t think. At least, not enough of them or in depth enough to matter. So make a law that demands the killing of millions and call it the “Health and Education Act” and it will pass and be supported. (As a, hopefully, ficticious example). Then any attempt to remove it is simply met with “YOU are against ‘Health and Education’!!!” and it gets dropped. As this works, there is ever greater push to bigger and longer lies.

    @Jason Calley:

    My favorite example of that effect is the loaf of bread.

    It takes a fair amount of hand labor to make it. About one staff hour. That would be a $100 loaf of bread at my old billing rate. But of that billing rate, most of it went to various “overhead” things; a lot of which was “government”. At the end of the day, I got more like $40 / hour. Half of which was then given over to other government costs (California was 11% income tax added to the Fed level). So now I’m at $20. OK, bread is $3-$5 a loaf at the “convience” places I had to shop when I was working 12-15 hours a day to make the company run, so that’s about 4-6 loaves of bread. Still sort of a “winner”, but the “real price” to my end customer for me to buy that bread was roughly $250 – $175 a loaf.

    OK, time passes, and that $20 turns into $10 as business hits a “California Economic Collapse”. And I’ve got a bread maker. It makes bread with about 5 minutes of my time. Ingredients cost is 25-40 cents bought in bulk at COSTCO. So I can work 15 minutes to get a loaf of bread that costs $2.50 (and still costs my smaller client base $250 to support…) or I can turn on the bread maker and get it for 25 cents. I can dump $2.25 of “crap costs”, get 10 minutes of my life back, and have very fresh bread.

    Labor cost? Actually, even for the materials it turns out to be negative. All that driving around, hustling for contracts, burning gas, needing suits and shoes and 101 other things NOT in the simple billing anaysis cost more than the bread ingredients. Heck, just the Starbucks to stay “pumped” all the time costs more…

    So in the end, it’s cheaper AND I get a fresher product to make my own bread. $2.50 ( yes, I can get it down to $1 at Walmart, but it isn’t a very good loaf, the $2 loaf at Walmart is much better, IMHO) for “store bought” and I have to run around a lot, vs “dump jar in machine, turn on”.

    (I make up “jars of bread” with all the flour, salt, etc. already in them. To “make a loaf” I just dump the needed water into the machine, spoon in the yeast, dump in the jar [and any oil if desired] and turn it on.)

    There is a similar “story” for all the rest that is directly in line with your analysis.

    In economic terms: There is a specific “economy of scale” to each production technique. You can only tax up to the limit of those economies of scale before it is more economical in total to simply make your own and avoid the taxation burden.

    As a side bar: Somewhere I heard the metric that “No govenment long survives once 50% or more of the national product is devoted to government”. As the Feds were at 35% and the California tax was 11% that’s 46% right there, then you get a 9%+ (varies by local uplift…) sales tax on top of that, it’s 55%.

    And what is happening in California right now?….

    BTW, take a Chevy at $25,000 and pay a 9% sales tax on it? $2250 just to drive it off the lot? I bought my last Mercedes for less than that. (Actually it was one gold coin…)

    So not only does the State not get that tax income, but the company doesn’t sell a car and all the social costs of all the retired folks don’t get slammed onto me either.

    I still have a car (and a very nice one) and all my motive needs are met, but at very close to zero per mile costs. (This was for the wife, it’s her daily driver, so gets about 20 miles / day on it as she still does ‘the work thing’. The car will last at least a decade so about 150,000 miles. About a ‘penny a mile’ for the actual car purchase). AND she gets to drive a very nice Mercedes station wagon.

    The rest of the costs are “variable costs” so get assigned to the “Making money” budget…

    You can repeat this process right down the line.

    And yes, at some point things like “making your own steel” become way to uneconomic to be worth it. On the other hand, scrounging your own steel is very economical.

    The end point is Cuba. All those lovely 1950’s cars kept in great working order by shade tree mechanics. Why I’m keeping my very old easy to work on cars. That my Diesels can go 1/2 Million Miles without needing major engine parts is gravy.

    Yes, I think this system of taxation and government will collapse unless the Tea Party and related folks manage to get it trimmed back. It’s on the edge now (heck, I’d say it’s stepped off the edge and is doing the “running in air Wiley Cayote trick” and might be able to grab a limb from the cliff and pull itself back if it tries really hard right now. But all I hear from most folks is “My, what a wonderful view we have from up here”…

  35. P.G. Sharrow says:

    The cost of bureaucratic regulation and monkey danceing is what really is killing off everything. pg

  36. David says:

    E.M. Smith says @David:

    “Oh My God. So perpetual “police power” anywhere in the world any time any government shoots at someone? And who polices the police?”

    I had to smile as reading this made me think of Jane Russel in Gentlemen Prefer Blondes …”Dorothy Shaw: Now let’s get one thing straight, Gus: The chaperone’s job is to make sure nobody else has any fun. But nobody chaperones the chaperone. That’s why I’m so right for this job.”
    Not that Obama belongs in the same universe with Marilyn Monroe and Jane Russel.

    I was curious of what you thought of Samantha Powers influence and the possibility of this R2P doctrine being used in the Israel/Palestine conflict.

    And, while I am requesting information from you if you ever get a R2it I am curious as to your thoughts here as well…https://chiefio.wordpress.com/tips/#comment-16398
    No problem if you can not. Sometimes we posters play the game of seeing how many N.Ts it takes to overload you. (-;

  37. David says:

    The danger of an Islamist take over in Egypt should not be dismisssed. Yet the Obama admiinistration appears to have done just that. http://www.zoa.org/sitedocuments/oped_view.asp?opedID=2025
    “Could the Egyptian population vote in the Muslim Brotherhood? Polls show they could. A 2007 University of Maryland survey shows that 67% of Egyptians favor all Arab countries untied as one Islamist state. A 2010 Pew poll indicates that 74% of Egyptians favoring the imposition of strict sharia (Islamic) law. The death penalty for those who convert out of Islam is supported by 84% of Egyptians. So a Muslim Brotherhood takeover is possible.”

    The Obama administration claims of M.B. moderation are of concern. The general goals and strategic plans of the MB are found in Arabic documents. One for Europe called “The Project” was found in 2001 in Switzerland, another for North America was found in 2005 called the “General Strategic Goal for the Group in North America.” An evaluation of this Memorandum was made for the US-Congress and for the Pentagon. Their influence is fast growing, especially in Europe, but not easy to trace partially because most active members, the Ikhwan, keep their membership secret.

    One citation from the sized document “General Strategic Goal for the Group in North America” makes the objectives of the MB clear:
    “The process of settlement is a ‘Civilization-Jihadist Process’ with all the word means. The Ikhwan must understand that their work in America is a kind of grand Jihad in eliminating and destroying the Western civilization from within and “sabotaging” its miserable house by their hands and the hands of the believers so that it is eliminated and God’s religion is made victorious over all other”

    What the Arab world says in English, is not the same thing as what the Arab world says in Arabic, this includes Al Jazeera.
    What Obama’s plans are for Israel is not clear, but his actions are embolding to Terrorist groups.

  38. David says:

    I saw a post in another blog and it fit so well I modified to my circumstances.

    I am curious if anyone has EVER done an economic study on how much all the Fed student loans and all scholarships contribute to the costs of education as well as the salaries of professors, etc.

    My daughter for instance is stuck in the middle. White female, pretty smart (98% HS GPA in Honors courses), middle class family (two working parents), did very well on SATs, good in soccer, volleyball, but not great, etc.

    So for her, No race based scholarships, no gender based scholarships, no academic scholarships, no, or very small sport scholarships, no financial based scholarships, etc. Her Mom, we are divorced, takes her to vist Stanford, USD etc, places we can never afford to send her. What are her real options.

    1. Community college for the first 2 years and then transfer?
    2. ROTC? (not offered at her school)

    There are not many options for someone in the “middle”…

    Well I have the last four consecutive comments in this post. I have heard that talking to one self is a sign of intelligence, but I think it is mostly those who talk to themselves who say this, (-;

  39. It turns out there is a theory of history that predicts education bubbles to result in violence:


Comments are closed.