Wednesday, February 24, 2021

Monty Hall and the Convertible

 I am reminded of Monty Hall & the convertible & goats issue in the Marilyn vos Savant column.


Monty Hall shows 3 doors.

One has a convertible. The other 2: goats.

You choose number 1.

Before Mr. Hall shows you door number 1, he reveals what's behind door number 3: a goat.


Now, Mr. Hall says, "Do you want to stay with door 1 or switch to door 2?


The answer was, he should switch to number 2 because door number 1 had a 1 in 3 chances of winning & door number 2 has a 1 in 2 chance of winning.


Try:

The same premise but You pick door number 2.

Should you switch to door 1 because now door 1 has a 1 in 2 chances of winning?


In the 1st question, if door 2 has a 50: 50 chance of winning,

then door 2 has a 50: 50 chance of losing.

& if door 2 loses, door 1 wins


But that is not the linguistic legerdemain.


It's when Monty Hall says, "Do you want to stay with door 1 or switch to door 2?


The real issue: the game.


Game one: You chose door 1. Mr. Hall shows you a goat behind door 3. Game 1 is over.


New game.


You have 2 doors.

Behind one: a convertible.

Behind the other: a goat.

Do you want door 1 or door 2.


Each door has a 50: 50 chance of winning


It's all a matter of the linguistic legerdemain. that guides you to believing you are still calculating odds on game 1.


If door 1 had a 1 in 3 chance of winning in game 1 then door 2 had a 1 in 3 chance of winning in game 1.


If the odds on door 2 change in game 2

then the odds on door 1 change in game 2


This is not a question of mathematics but of gambling & sales.


Sincerest regards,


Slim.


From

The Quotations of Slim Fairview

© 2021 Robert Asken

All rights reserved


Robert Asken

Box 33

Pen Argyl, PA 18072

Friday, January 15, 2021

Decision Making Made Simple



You are babysitting your nieces.


Your sister gives you detailed instructions with one exception.
When it's time for snacks, you get out the cookies & milk
Your one niece says, "I can't drink milk. I get sick."

Is she telling the truth or telling stories?
What do you do?    
View the chart.

 










If she doesn't drink the milk & she's telling stories,
No problem


If she doesn't drink the milk & she's telling the truth,
No problem


If she drinks the milk & she's telling stories,
No problem


If she drinks the milk & she's telling the truth,
Big Problem

By not drinking the milk, there is no problem.


However, by drinking the milk, you have a
50/50 chance of a Big Problem.

The decision: She doesn't drink the milk

When you check with your sister, she tells you
"She makes up stories about the milk making her sick."

Missing a glass of milk is no big deal


Regards,


Slim.


Robert Asken

Box 33 

Pen Argyl,  PA 18072


Copyright © 2021 Robert Asken

All rights reserved.




Tuesday, October 22, 2019

Outrage of Nobel Proportions



If you can believe the Bloomberg Headline


Taxing the Rich to Fund Welfare 

Is the Nobel Winner’s Growth Mantra


You will be enraged by the paradigm of keeping poor people shackled to poverty by keeping poor people shackled to poverty programmes as a pathway to closing the gap.

And I haven't any Nobel Aspirations.  My outrage is a moral one, not a personal one.

And I don't know which is more repugnant.

The economic legerdemain or the linguistic legerdemain.

As the article reads I must focus on two points

1.  Giving tax cuts to the rich to create jobs is a fantasy because the rich have massive funds available and they will only invest the money to make more money.

2.  I never said anything about giving tax cuts to the rich to create jobs.

Years ago I emphasised this.

"Mr. Widget will not hire one additional widget maker until he has an order for one widget more than he can produce when operating at maximum capacity and optimal efficiency."

The Quotations of Slim Fairview © 2019

One of the few things Robert Reich ever said on the topic of economics that I believe makes any sense:

If you want to close the gap, you give tax cuts to the people who spend money.

This was adequately demonstrated by Henry Ford who doubled his employee's wages from $2.50 a day to $5.00 
a day.  And cut the work week to 40 hours.

In so doing, Henry Ford made it possible for his employees:

To buy a Ford
To buy a washing machine
To buy an ice box
To buy a radio
To buy a Sears Roebuck house. Some assembly required.

He, in effect, launched the middle class.

Needless to say, the African American community was left out.  Racism, segregation, and discrimination were operating in full vigor.  And still are.

Robert Reich is also the fellow who extolled the virtues of the 93% tax rate.  He told of how well the country was doing. Peace, employment, factories humming away....

What Reich did not say about the 93% tax rate is another example of economic smoke and mirrors.

When the tax rate was 93%

A Black man earned half of a White man's wage.
Women were kept barefoot and pregnant.
Mexicans and Filipinos were picking lettuce and grape for pennies a day.
There was no EPA and those factories were polluting the environment.
We were rebuilding Europe after WWII.

The 93% tax rate is a celebration of 
Racism
Sexism
Xenophobia
Pollution
Imperialism

Throughout the Obama administration, we heard about creative, innovative, high-tech entrepreneurs.

Richard Nixon had a plan for promoting entrepreneurship within the African American community.  Congress would not fund it.

Not too long ago, a Black civil rights leader said, "When White people die, they leave their homes to their children. This keeps the wealth in the family."

So, too, "When White people retire, they leave their businesses to their children. This keeps the wealth in the family."

A solution to closing the wealth gap is to close the income gap. Help the disenfranchised start their own businesses. Make profits. Grow their businesses, Buy their own homes, and, ultimately, keep the wealth in the family.

You can't leave Public Housing to your children.


Let's now focus on Slim's Paradigm:

Capital Investment + Economic Stimulus =
Economic Development + Growth

When people who spend money buy things
People who make things must make more things.
To make more things, they must hire more people.
They make more money.
At this juncture they can afford to pay hire wages. That or end up subject to competition, regulation, institutional investors dumping their stocks.

This is the paradigm established by Henry Ford.

When China elevated 700 million people from poverty to the middle class, China 
Created a consumer class.
Created an investor class.
Gave the Chinese people a buy-in.  A vested interest in the success of the Chinese Economy.

The alternative would be for big business to continue as it has with stagnant wages and ultimately triggering a backlash. Routinely at the polls. 

However, before you worry, there is little evidence that Congress ever raised taxes on the rich. Or that they will.
The ruling party notwithstanding.  

Conventional Wisdom: The Democrats don't want to tax the rich. They just want to blame it on the Republicans.
~ Slim Fairview

Well, how do we move from here?

If you want to close the gap you redistribute the money.
Henry Ford did not redistribute his wealth.  He redistributed the money.

Wealth is what you have.
Money is what you make.

One idea, which needs some economic modelling, runs like this.

A corporation gives its employees an immediate $5. an hour raise.  In exchange, the corporation takes a $10. write-down for labor costs.

The benefit to this is the multiplier effect.  
The multiplier effect is NOT trickle down economics.

In the illustration on PowerPoint on SlideShare, I created such an illustration.  Caveat: This has nothing to do with an $800. coat.  The $800. coat represents all the small purchases of the middle class, the working class, the working poor, in a one month period to coincide with that $5. an hour raise. 

(40 hours a week x $5. an hour = $200. x 4 weeks = $800.)


There are several other articles on the matter.







Sincerest regards,

Slim

If you find anything here to be helpful, please don't hesitate to send me a really tricked out Mac Laptop and, in lieu of a Nobel Prize, tuck a few dollars as a gift into the envelope along with the thank you note.  Slim

Bob Asken 
Box 33 
Pen Argyl, PA 18072

Copyright © 2019 Robert Asken
All rights reserved.



Tuesday, July 16, 2019

Knowledge V. Understanding



What is knowledge without understanding?  It is like having the pieces to the puzzle in the box.  You can rattle the box and make a lot of noise, but to no avail.

It is only when you fit the pieces of the puzzle together do you see the complete picture and understand.

This takes time.  And this takes patience.

About 50 years ago, my Dad told me a fable.  I have yet to locate the source.  I believe it originated in Turkey because it contains wisdom and a rope woven from sand.

For want of a title I call it

The Business of Wisdom in Global Affairs.


How do you solve problems?



You Can't Fool the Lion

Let's say you tell everyone you're a lion tamer.

Everyone believes you.  They have no reason to doubt you.

Anyone with questions about lion taming comes to you.  You answer their questions with confidence and authority.

Then, one day, a lion walks into the room.

Everyone panics.

They run to you to save them.

And you panic.

Why?

Because you can't fool the lion.


Other insights:

The Bug and the Bird

Five Apples

Mr. When's Chicken

How Mr. Yakamoto Saved Face


Regards,

Slim.

Bob Asken
Box 33
Pen Argyl, PA 18072

Copyright  ©  2019  Robert Asken
All rights reserved.

Wednesday, July 10, 2019

Powell Testimony House Financial Services




Wow!  What a day.

Powell did a good job of answering questions, unlike those who do a lot of talking to run down the clock.

Okay, The Phillips Curve doesn't mean what it did 50 years ago.  Back then, however, labor had more clout.

The one thing Robert Reich said that was halfway sensible was "If you want to stimulate the economy, give tax cuts to people who spend money."

That causes a problem with revenue.

The next solution is the old canard, the 93% tax rate that Reich propounded.  However, as his article extolled the virtues with full employment, factories humming, and everybody was happy, he omitted that when the tax rate was 93%

A Black man earned half of a White man's wage.

Women were kept "barefoot and pregnant."

Mexicans & Filipinos picked lettuce & grapes for pennies a day.

There was no EPA

We were rebuilding Europe after WWII.

This is a celebration of Racism, Sexism, Xenophobia, Pollution, and Imperialism.

Need I tell you where those revenues were spent? 

Now, this is no longer the age of JFK.  And I will address the remarks by President Kennedy to the New York Economics Club.

"In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now."

Again, this is not 1962.

However, as the Republicans and the Democrats have opposite views on solving economic problems, I am compelled to say that "because this is Congress, it is not ironic that they are both wrong."

You can neither cut your way nor tax your way to prosperity.

Slim's Paradigm.

Capital Investment + Economic Stimulus = 
Economic Development + Growth.

Merkelism and the Economic Crisis of Europe proves spending cuts don't work.

President Kennedy, quoting Nikita Khrushchev on Russia surpassing the US in production proves that tax hikes don't work.

President Obama touted 
Creative, Innovative, High-Tech Entrepreneurs.

Entrepreneurship means capital investment and Economic Stimulus. Two factors absent among the poor.

I wrote the article

Tax Policy to Increase Wages $5 an Hour. Now!

To demonstrate how the important factor is to put money into the hands of people who work for a living.  However, this burdens business as the tax write-down does not prove to be a sufficient incentive.

The American Widget Company will not hire one single additional widget maker, until it has an order for one widget more that it can produce when operating at maximum capacity and optimal efficiency.

The explanation on how to make it work

The Multiplier Effect (Don't dare call it trickle down economics)

Increased government revenues (properly) are all included in the article.

There are three ways for the Government to raise revenue.

1.  Increase taxes
2.  Increase the number of tax payers
3.  Increase the wages of the tax payers.

Number three is best.

An illustration of The Multiplier Effect

There are other factors to consider that were raised at the hearing.

Michigan.

I think of Detroit and Battle Creek.

If Americans choose to buy foreign cars and stop eating cereal, Michigan is in trouble.  This is something the Fed cannot fix.

If Americans choose to move to the coast for the surf and the sand, and leave Iowa, this is something the Fed cannot fix.  Other efforts are necessary.

Closing the Gap


Remember, "Grow the Pie" is only a slogan. And a bad one.

If Archie Bunkers gets a promotion and a raise to a management job, he gets a bigger paycheck.  A bigger piece of the pie.  But he must take his suit to George Jefferson's Dry Cleaners.  George Jefferson also gets a paycheck.  However, he also makes a profit.  Why? Because he owns a piece of the bakery that bakes the pies.  Entrepreneur.  And he creates jobs.


Warmest regards,

Slim.

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. Slim.

Bob Asken
Box 33
Pen Argyl, PA 18072

Copyright  ©  2019  Robert Asken
All rights reserved.