Another Hidden Inflation

The discussion about wages has presented many opinions both for and against.  Inflation being only one of them.  What that means depends on who you talk to.

Nonetheless, any discussion about inflation will invariably motivate someone to talk about hidden inflation.  In short, when you pay the same price for a candy bar but the candy bar is smaller.  And there is the other type of inflation.  The added features inflation.  Here, a product has added features of little value but justify an increase in price.  The small cost of the added feature that drives revenue is called revenue enhancement.  

Then we have the inflationary factor that we ourselves create with little notice and no approbation.

This is an Economics Lesson.  

Focus on the Economics Only!!

For dinner, my wife and I have hamburgers with a side order of french fries.  My wife butys the Ball Park ®  Grilled burgers you can fry or cook  in the microwave but we fry because it tastes better.  She buys a package of buns for a dollar and the cheap fries.

I make a little more money  My wife buys the Martin's Potato Rolls ®.   Or, if you're a Republican, the potatoe rolls.

I make a little more money. My wife buys half a pound of Land O' Lakes ®  American Cheese orange and we have cheeseburgers.

I make a little more money and my wife buys a package of Kunzler's ®  bacon. On sale.  I've already done the test and measured the shrinkage of different bacons and do a unit cost evaluation on the results: how much bacon we have after we cook it.  Kunzler comes out cheaper--oops--more cost effective because I measured less, much less, shrinkage. (Op. cit. my comment on hidden inflation.)

Now we are eating Cheese and Bacon Burgers with the Ore-Ida ®  Fries.

The price of burgers did not rise.

The price of cheese did not rise.

The price of buns did not rise.

The price of bacon did not rise.

The price of the fries did not rise.

Still, the cost of dinner did rise.

This increase in spending is a form of inflation.  

This is not an increase in the price of living.  This in an increase in the expense of living.

Yes, we are getting more. Still, we are spending more.  This holds true when you look at the expense of living over the past, say, fifty years.  More things have become available.  Many of these things are new additions--the window air-conditioner.  Other things are upgrades.  A remote control to operate the window air-conditioner.  Features added to the razor for that morning shave, a timer on a the coffee pot.  

We still have an older 4 cup coffee maker.  The on off switch has a light.  The newer one has an orange sticker. That is a cost savings to the manufacturer without a decline in the quality of the product.  However, that older pot keeps the coffee warmer.  The hot plate is hotter.  

Then, there are gratuitous design features.  To keep coffee warm in an older coffee pot, you remove the plastic insert lid and place a bread and butter plate on the top of the pot.  That top has been replaced with a top that has a lever built into the handle.  Yes, you can remove the coffee pot top.  But the design prohibits you from placing a plate on top of the pot to keep the coffee warmer.  

I often wonder, how much would it add to the cost of the pot to create a hotter hot plate and replace the glass pot with a Pyrex pot?  A simple increase in manufacturing costs with a real consumer benefit at a modest price increase.  Right?  Don't bet on it.

Warmest regards,

Slim.

slimfairview@yahoo.com 

slimviews@gmail.com 

Copyright (c) 2016 Bob Asken

All rights reserved.

Disclosure: The mention of products by name is for the purposes of accuracy and realism only.  There is no recompense sought, offered, or accepted.  The opinions are my own and reflect real usage in real life and are not necessarily  a commercial product endorsement.

Rogoff & Merkel & China, Oh, My!

Something is up.  Think back.

Sarkozy tweets, "Merkel is not the problem.

Prime Minister Biden returns from Berlin to announce The Chancellor is our friend.

& More Recently,

Madame Lagarde Praised Merkel

Merkel initiated a phone conference with President Vladimir Putin

And President Obama again praised Merkel & made a grand pitch for Britain to stay in the EU.

What is up?  I may be onto something.

Most recently, Ken Rogoff, the economist and purported architect of austerity in the EuroUnion has taken a conciliatory turn

He appeared on CNBC to say kind things about the success of our economic stimulus success.  Not so long ago, not so much.

the

I watched Dr. Rogoff on three networks: CNBC, BBC, & CNN.  And each time he said basically the same things:

Even if we go back to 2010 jibber jabber blah blah blah.  

Even if we were to wipe out Greece's entire debt...jibber jabber blah blah blah

(I apoligise for slinging around a lot of highfalutin economics jargon.)

However, when pressed by Mr. Zakaria on the success of the US stimulus programme, Dr. Rogoff made what I considered to be a sarcastic allusion to the economic travails of Puerto Rico then went back to Europe, "Even if we were to wipe out Greece's entire debt....."

I've said too often, If Britain can't leave the EuroUnion, and Merkel knows it, Britain can't bargain a fair deal.   Witness Tsipras and Greece.  My very plain understanding of the situation?  The more dramatic and hysterical the doom and gloom forecast if Britain [Greece] leaves the EuroUnion, the less substance there is to the proposition that a British Exit will be a disaster.  Hearken the the words imputed to the attorney F. Lee Bailey. "When I have the evidence, I pound the evidence; when I have the facts, I pound the facts; when I have nothing, I pound the table."

Will Cameron be Britain's next Wellington or Britain's next Tsipras?

This, in part, explains why I wrote Greek Proposal and Brit IN Brit OUT.

But more important, and not more importantly, recent comments by Carl Icahn on China reflect what I'd said repeatedly about Europe.

Austerity is a failure.  What Europe needs is Capital Investment, economic development, & growth.  In short, economic stimulus. Shorter?  Fiscal policy.  The same thing Mr Icahn said this morning 29 April on CNBC.   This, in a discussion about China.

In 2013 (2. February) I wrote China will begin a global capital investment initiative.  Today, Singapore is the top visitor to my blog two months running.  Singapore is the purported Headquarters of the AIIB.  The most read article?  Emerging Nation Economic Union.  In other words, Heads Up.

I believe the EuroUnion is about to unravel.  Not due to Britain's or Greece’s possible exit; but because of the efforts to keep them in.

Now? The Conciliatory tone taken by Ken Rogoff on CNBC.  And, of course, the alleged leak of a statement by the IMF to Merkel regarding holding Greece to the terms of austerity. This of course leads me to believe that Madame Lagarde holds the reigns of power. [sic]  Perhaps it is the romantic in me.  Ultimately, I started out in life as an English Lit Major.  But realistically, Madame Lagarde is brilliant, successful, and powerful.  And in a battle between hob-nailed boots and spike heeled shoes, Germany has never succeeded in the Hob-nailed boot approach.  Why not?  From the Quotations of Slim Fairview (c) 2016

The multitude can oppress the few, but the few cannot oppress the multitude. Not for very long, anyway.

The Chancellor, who made the cover of Time Magazine for inviting the refugees in will never make the back cover of Time Magazine for creating a crisis that resulted in the Migrants being thrown out.

China has a plan.  The AIIB is part of the plan.  Europe's embracing of the AIIB is not something I neglected to predict.  

Chinese Investors est Arrivé & 

The Next Challenge is Here

"But don't bother listening to me. Everyone always doesn't listen to me."  The Quotations of Slim Fairview

Warmest regards,

Slim.

slimfairview@yahoo.com

slimviews@gmail.com

Copyright © 2016  Bob Asken

All rights reserved.

Why I Sold My Bazooka--Humour

By

Slim Fairview

Before I tell you why I sold my bazooka, it behooves me to tell you why I bought it in the first place.

In the first place, I bought a bazooka to go hunting. Ostensibly. Now I know what you bleeding hearts are saying. So right up front I will tell you that all I bought was the bazooka.  I did not buy any bullets for it.

I say ostensibly because hunting was  the excuse  I told my wife to explain why I bought a bazooka.  You see I didn't want to worry her.  Of course, I must emphasize that I am opposed to my going hunting.  Not other people going hunting, just me.

Now,  I know there are those who defend hunting by claiming they hunt for food.  And those who reject the excuse by pointing out you can buy food at the supermarket, but let's be serious here: have you ever seen moose chops or an oven stuffer bunny rabbit in your grocer's meat case?

Still, hunting does involve getting up in the middle of the night, pitch dark, freezing  cold, and driving to the middle of nowhere, to get out of a warm car and walk deep into the forest to sit and wait for the Sun to come up.  And when it does, the ground thaws and you find yourself knee deep in mud.  Which brings us to another issue: there are no bathrooms in the forest.

After you set yourself up, you must wait for, say, a deer to go past.  Then you must shoot it.  If  you miss, the deer runs away with all the other deer in the area and you must go home.  Or, you can start walking into the forest looking for more deer.  This where other hunters are waiting for deer and you hope they don't know that you are the reason why all the other deer ran away.

However, if you wound the deer, you must track it until you find it, then kill it, unless another hunter finds it first and kills it, and you must walk back to your car and go home--deerless. If you kill the deer there is still work to be done.

You must now dress it, or undress it, but from the wrong side--the inside.  If you plan to eat it, you must check one of the organs to make sure the deer is not too sick to eat.  You must know which organ, what it looks like, and what it is supposed to look like.  If all is not well, you must walk back to your car and go home. Again--deerless.

That much done, you now carry it back to your car hoping not to get shot by someone who does not mistake your dead deer for a deer, or worse, mistake you for a dear and fires away.

If you get it home without being run off the road and killed by a non-violent, animal lover,  you must take your deer to be butchered.  I emphasize your deer because you might not get your own deer back.  Some deer are wild, some are farm raised, I don't know the difference, and presumably neither will you. But the butcher does and he knows hunters who know, and may switch your deer for someone else's deer.  Oh, and you must pay for this.

Now you have enough deer to feed your family and three other families for two years. But take heart. Etiquette says you must share your deer with others.  However, the only others who eat deer meat are hunters themselves and also have enough deer meat to feed four families for two years.  I will let you figure out the servings per pound, but it's not a pretty number.

This is why I don't hunt.  Nonetheless, I told my wife I bought the bazooka to go hunting.  My wife didn't buy it.  I broke down and confessed.

“I bought the bazooka for protection.  For your protection. To protect you. In case we have an intruder.”

That was when she got me to break down and confess that I didn't actually buy any bullets for the bazooka.

“I'm not having you shooting off bazookas  in my house.”

“But, honey, you don't understand. I just bought the bazooka. I didn't buy any bullets for it.”

“If I may ask, what good is buying a bazooka for protection if you don't have any bullets for it?”

“Easy.  If there is an intruder, all I have to do is to point the bazooka at him. He will see it, get scared, and run away.  See?”

My wife thought for a moment.  I figured I’d won her over when she said, "May I point something out?"

“Certainly.”

What happens if the intruder also has a bazooka.  But his wife doesn't love him as much as I love you and she let her husband buy bullets for his bazooka?

Then I saw the flaw in my otherwise flawless plan.  I agreed to sell my bazooka.  So, I truck on down (actually I have a compact) to the Gun Shop and Firing Range to sell my bazooka.  I tried to get as much for it as I paid for it, but there were few takers.  One fellow did agree to buy it but for much less than I wanted.  He said, "If you had bullets for it, I'd pay you a lot more."

I asked him what he wanted the bazooka for.

He said he was going to buy it for protection, but that he was going to tell his wife he was buying it to go hunting.

I see.  I just took my money and left.  I wasn't happy with what I got for it, but on the bright side, I got more for it than he’s going to get when he goes to sell it.  Come to think of it, that's how I got it for such a good price in the first place.

Warmest regards,

Slim

Copyright (c) 2013 Bob Asken

All rights reserved.

Personal Service Units

How will people relate to people once there is a personal service robot in every home?

   

"Thank you, Thing", from the old Addams Family show will become a social reflex with no meaning.

   

As a tiny robot like the Zumba (R) moves silently throughout the house, no one wll have any issues.  (Except maybe for your cat, but that is another article.)  A PSU (Personal Service Unit) will silently bring you a beer--"Thank you, Thing"

   

Or the Service Unit at the local eatery will bring you a tray

with your order of Whopper and fries--"Thank you, Thing."

with your order of Kentucky Fried Chicken-- "Thank you, Thing."

with your Taco Bell takeout--"Thank you, Thing."

When people do the same job, the relationship won't be the same.

A robot may replicate a human, but a human won't replicate a robot.  This will set the stage for an outbreak of class warfare.  This, the same way the industrial revolution set the stage for the eventual outbreak of the labour movement.  Case in point: The West Virginia Mine wars or the Harlan County Coal wars in Harlan County, Kentucky.  "I was born a coal-miner's daughter" by Loretta Lynn does more to conceal than to reveal the hardship that young Loretta endured.

As more people who are more or less affluent enough to afford a PSU, more and more people will become more and more desensitised to people in any aspect of the service industry.  When this happens, there will become a justifiable resentment directed toward the robots and toward the people who own them.  This push-back will instigate an unjustifiable resentment against the service worker class.  These contentions will spread to those in the tech-class: those who work behind the robots.  Those who build the robots, maintain the robots,  repair the robots, and those who "load the robots".  The people who make it possible for the robots to deliver goods.

In an automated warehouse, people receive products, and deliver them to the stocking stations. Here is where people sort products into the cubby-holes of the unit that delivers the goods to the picking stations.

Picking stations are where people remove the products and place them in the shipping boxes.

Robots deliver the boxes to the checking and sealing units where people check and seal the boxes,

Robots bring the boxes to the shipping dock.

This is a discrete process out of the public eye.  The Burger King, or Taco Bell, Or Kentucky Fried Chicken....the presence of the robot is revealed to the public.

People with their own PSU, will see, or not see, the people involved as "invisibles".

At first, poor people will be excluded from the PSU class.  The same way Civil Rights Advocates fought for the phone booth because poor people had no other option. However, now that the cell-phone is ubiquitous, the fight ended.  The same will happen with the PSU.

Simple, affordable PSUs will be developed to perform simple tasks.  This will be to create a buy-in among the less affluent. This will become the New Normal.  It won't be new for long. And neither will it be normal.  Once this happens, the working class will never be able to enter the job market with any sense of dignity.

Soon, our homes will be structured like the automated warehouse.  The work will be done by contract workers who, say, stock pantry shelves to accommodate the service robot.  The human will have no direct contact with the employer.  In substance, the human will be working for the robot.

As we watch society move to personal devices--eg, the smart-phone--everything will become a personal service unit.  The demand will become insatiable.

Solar panels on roof-tops will provide electricity.  Natural Gas will power personal electric generators.

Food orders will be placed over the phone, prepared by ingredients delivered by robots who will cook them, then be turned over to a robot that will deliver it.

Personal Service Unit

Personal Energy Unit

Personal Utility Vehicle

Personal Entertainment Device

Plastics and solar power will give rise to the Personal Utility Vehicle.  Solar powered plastic cars that drive themselves (or not).

Somewhere between Les Bicycles de Beijing and Mercedes Limousines, Millions of Chinese people will be driving pollution free personal utility vehicles.  No Yugo this, but rather mass produced, solar powered, 4-seat, pollution free vehicles many of which may well drive themselves, and operate at the most minimal cost.  Cheap to make, cheap to operate.

Soon, the Personal Service Unit will be just another gadget in the store that moves individuals to an individual, personal world that will have a very serious encroachment on those business that either cannot adapt, or become irrelevant.

Warmest regards,

Slim.

slimviews@gmail.com 

slimfairview@yahoo.com

Copyright © 2016 Bob Asken

All rights reserved.

Social Eugenics

by

Slim Fairview

Social Eugenics, in its most benign form, is the attempt to study a productive group or team, analyse it, replicate it, and reproduce similar results.

This, of course, is based on a faulty premise and on a well-intentioned but ultimately evil paradigm.

"Social Eugenics is the dehumanising field of study that reduces people to a list of component traits in order to organise them into groups to achieve a desired result." ~ Slim Fairview

Also From the Quotations of Slim Fairview

1. "Leaders are defined by their followers."

2. "Look behind you. If people are following you, you're a leader. If they're not, you're not."

3. "You can't lead if you can't manage."

The entire initiative is based on reducing individuals to individual components.

Various individuals are defined by isolating social genes--or demographic DNA.  Each may be valid and defensible in its own right. But it is not the skills that are being called into question. It is the end to which they are employed.

Such may include but are not limited to

Sympathy

Empathy

Listening skills

Validation

Etc.

Others may have more objective criteria--math skills, for instance.

There are reasons why some people become accountants and other people become artists.  One and perhaps most significant reason is that "They Want To."  Similarly, some people work better in groups, others work better alone, still others in pairs.

When used, however, to create a perfect team or group, even when the goal is to organise people to work together to be successful, they have dehumanised the people and have created a contrived arrangement.

Some of the tools are

Teach Consensus Building.  Aside from my having defined consensus building as group-think built by a consultant, Consensus Building is really influencing the members of a group to embrace a shared value or a shared vision to validate a preconceived ideal.

Leadership Training.  This is a series of exercises (where there are no right or wrong answers) to teach people presumed to have management skills how to lead people in such a way that will justify blaming the employees for any failures to meet standards or to achieve goals.

There is still the observer effect.

When a man is at the checkout at the supermarket sees an attractive young cashier, he stands up straight, sucks in his gut, and smiles.  When his wife is with him, not so much.  The observer influences the behaviour of the observed.

Appearance of Science.  With the rise of Social Eugenics, people attempt to portray opinions as facts so they can challenge facts by defining them as opinions. (SF.)

Who's to Say What's Right or Wrong?

"Circumstances if not consequences will determine who's right and who's wrong--too often when it's too late to benefit from the answer."

In an article I am writing about "personal robots" I pointed out that people who are affluent enough to afford a PSR (Personal Service Robot) will become desensitised to people in the service industry.  A robot can replicate a human, but a human won't replicate a robot.

Social Eugenics is based on an analogous principle.  That people are components in a group; and by analysing those individual traits, people can organise the component people into groups or teams that will become successful at achieving the desired results.

If you find anything here to be helpful, please don't hesitate to send me a really tricked out Mac Book and to tuck a few dollars into the envelope along with the thank you note. Sincerely, Slim.

Bob Asken
Box 33
Pen Argyl, PA 18072

Warmest regards,

Slim.

Slimfairview@yahoo.com 

Copyright(c) 2016 Bob Asken

All Rights reserved.

Oil's Future

With the US Government and governments around the world investing heavily in solar power Mr. BigWell founder and CEO of BigWell Oil Company LLC. better come up with a plan B.

I have little doubt that oil prices will rise.  $50, $100, $200.  When? I don't know;  but when it does, don't get happy.

As my cat, Trygg, has said on many occasions, "There are no unintended consequences. Only unwanted consequences."

If oil prices soar,. it may be a precursor of a rapid drop in oil prices and in revenues for US companies.

If oil prices stay down,many companies in the oil industry including support services will go out of business.  Fewer companies will have a larger share of the available market and may reap the benefits, but not for long.  True, greater control will allow oil companies to moderate prices to avoid a push-back if not a backlash, but this is not likely. And not a long-term option.

Needless to say, higher prices generally invite new entrants into an industry.  This, moderated by the high level of start up costs.  However, this moderation does not apply to Oil Producing Nations globally that don't always operate entirely within the old B-School Paradigm.

Start up costs,

Cost of borrowing money

Rising demand curve,

Cost of production

Competition

Market penetration &

Market share

And so on.

In 2013 I said that Saudi Arabia will act to protect revenue.  Not profits, not return on investment, but revenue.  They did. They maintained production. This, to maintain market share.  Remember?

Of course, I did ask this question in a previous article, "Why would US oil companies maintain or increase production with a declining global economy and the incumbent decline in demand for oil?"  Indeed. What is the Oil Strategy?

The only viable strategy is to drive prices down to a level where competitors must go out of business.  This creates a metaphorical tag sale for gently used oil companies and companies in support or related industries.  This reminds me of the study of the Vertical Monopoly.  A strategy taught in marketing class 40+ years ago.

Now, however, the same governments that ignore the B-School Paradigm that private industry must adhere to are investing in solar power and other forms of renewable energy.

As other countries develop, say, a solar power industry, any oil they have will be a strategic bargaining chip.  Increase production to depress prices and create havoc on those countries that rely on oil or with little or no development of alternative energy.  This, of course, creates investment opportunities.

Several years ago I wrote "Energy Independence" subtitled, "Then what?"  I warned that Saudi Arabia will seek other customers.  Eg. China.  And when that happens, the other customers/countries will also become strategic allies in the global political and economic arena.  This appears to have happened.

Emerging nations with no oil resources will be motivated to develop alternative energy. Countries with oil resources will operate at a level where they can move forward with lower prices and profits while developing a solar power industries in co-operation with other countries (China) and industrialised nations will lose the benefits of either high oil prices or low oil prices. China will continue investing Globally.  In fact: Chinese Investors Arrived

This is why I wrote "OIL: The real outlook"  To encourage Mr. BigWell founder and CEO of BigWell Oil Company to develop a Solar Plan B.

At the moment, Singapore and Germany are vying for the top spot on the visitor list to my blog.

The article: Emerging Nation Economic Union  is the most read article for the day, the week, and the month and the second most read article of all time.

"You can't stop the arrival of history, you can only delay it. History is coming." ~Slim Fairview

"If you find anything here to be helpful, please don't hesitate to send me a really tricked out Macbook and to tuck a few dollars into the envelope along with the thank you note.

Thank you, Slim

Robert Asken
Box 33
Pen Argyl, PA 19072
Etas Unis

Warmest regards,

Slim.

slimfairview@yahoo.com 

Copyright (c) 2016  Robert Asken

All rights reserved.