MPCSS

It is important to know what your principles are and to act in accordance with the same. I have determined that I need to establish certain plans for future events that, if left unplanned, may lead me against my principles; these plans will be laid out in a series of posts, starting with this one.

Social Security
My principle rule regarding Social Security is that no able-bodied person should receive more Social Security benefits than what he has paid into the system, with an allowance for a reasonable rate of return. Therefore, when collecting information to decide when I should retire, I will calculate the current value of my Social Security payments by treating it as a stock portfolio into which I have invested each month one-twelfth of the total Social Security payments for that year and which earns an annual return of 8% with total annual expenses of 1%. At the time that I choose to begin accepting Social Security payments, this value will be the starting value of a portfolio with a smaller rate of return (to account for safer, lower-return investments made during retirement). I will deduct amounts paid to me by Social Security and continue to calculate the return and expenses on the remaining balance. When that calculated balance nears zero, I will contact the Social Security Administration and direct them to stop my payments as of the date that the balance would return to zero. In this way, I will have consumed less Social Security income than I have paid in, because of the expenses. These expenses are provided for the administration of the program and for the benefit of non able-bodied individuals who may not be able to provide for themselves. Thus, I will not place any burden on the working-age people of my retirement years by receiving more money from Social Security benefits than will be rightfully mine on account of my “investments” in Social Security over my working career.

Some will say to me that since the system exists I should take full advantage of it and take payments for as long as I live, even if that means taking out more than I am rightfully owed according to the investment analogy presented above. This attitude is the source of many of society’s current problems. Such thinking encourages thoughts of entitlement and builds within our society an expectation that the government should provide for the living expenses of the citizenry. Fortunately, our economy is not built on government-owned enterprise but rather free enterprise and we are able to make the best of our abilities in this free economy. Along with that freedom each of us has a responsibility to provide for our own current and future obligations with respect to living expenses. The governments of the United States, with a few minor exceptions, do not actually produce anything. Therefore, the only possibility for the government to acquire enough money to take care of the retired citizens is by taxing the working-age citizens. As I wish I were not burdened with such a load, I must resolve myself not to place that load on the working-age people of my retirement years.

Calm the fuck down!

Did Captain Blackbeard take time off from pillaging on the high seas because of a little rain? No?

Then be like a pirate and quit bitching about the rain.

ABC News is reporting that a recent poll indicates 63 percent of USians feel the secret NSA program to document the calling habits of every person in the United States is justified; 44 percent feel “strongly” that it is justified. Only 35 percent feel it is unjustified.

The program’s intentions are to help the government prevent terrorist attacks by looking for patterns in the calling habits of the users of U.S. phones. However, as with all government programs, we cannot be sure of such “innocent” intentions in the future. If this program was intended to be secret, then other uses of the information will be kept secret as well. There is no guarantee that this information will be used only for catching those who would commit terrorist acts. It could be used as a source of information on groups that oppose government policy, oppressing them by instilling a fear in the general populace that they will be flagged for their contact with these groups. The suppression of opposing viewpoints is obviously bad for society, but aligns strongly with the government’s self-interest. That the citizenry approves of such power being wielded in secret indicates an unhealthy level of trust in the government.

CNN is reporting that the U.S. Department of Defense is currently considering ways to use the U.S. military to help defend our borders against a new threat. Are Mexico and Canada suddenly potential attackers of this great nation? No, of course not. Then what gives? Illegal immigration, a current hot button in Washington, is overwhelming border patrol agents “stretched thin” by the war on terror. The solution? Use highly trained and highly deadly military personnel in yet unspecified roles related to border security. I suppose that when the immigration problem is under control the military units will be recalled. Right. If we need more border agents then hire more border agents; train them to do the job that needs to be done and give them the bare minimum of responsibility and power necessary to do that job. Do not adapt military units, designed to defend the country against enemies with advanced warfare technology and the backing of nations, to the purpose of deflecting generally unarmed and non-violent people from entering the U.S.

Why do I worry about this? I worry about this because governments rarely give up the ground that they are temporarily given. If this role of the military is established, sometime later someone will want to use the military in the war on drugs, the war on privacy, and eventually the war on civil rights. They are coming for the immigrants, and I am saying something because sooner or later They will come for me.

Here’s the deal, Exxon Mobil (NYSE: XOM) is actually less profitable than General Mills (NYSE: GIS). In 2005, Exxon has earned about 9.75 cents on the dollar in profit while General Mills kept 10.93 percent of their revenue as profit. That’s right, a cereal company is “worse” than the biggest of “Big Oil,” and yet we’re not talking about a windfall profits tax based on strong sales of Rice Krispies. If you really want to complain about excessive profit margins, take a look at Microsoft (NASDAQ: MSFT); in 2005 they kept 31.59 percent of their revenues.

To put it another way, imagine that last year you brought in $370 billion through your business. Wouldn’t it be nice to keep a little less than 10 percent of that for working hard all year?

It’s good that Congress is starting to consider the looming energy problems, but they’re really out in left field with this “tax the massive oil profits” business.

Yesterday, Jennie was asking me how I pronounce certain words when the following exchange occured:

Jennie: How do you pronounce New Orleans, “New Orlins or Nawrlins?”
Isaac: I pronounce it “OWNED.”

We had a good laugh at the expense of others.

I pine for the unfettered days of my kittendom, whence I had neither care nor worry.

• National Education - Schooling in the U.S. turns out wave after wave of good employees, able to follow orders and generate profit for their employers. A 9-5 job with a large corporation is considered a good thing. Critical and creative thinking are not encouraged.
• Energy - The price of oil continues to rise as demand grows and supply stays mostly constant. The amount of energy available each year from renewable sources is almost certainly less than what we currently consume, and so we are in for a major shakeup when we run out of rotten dinosaurs.
• Poker - I need to work on my Hold’em game and start playing more 7-card stud. I aim to become proficient enough in all forms of poker to play profitably in the best game in a cardroom and not just the best Hold’em game in the room.
• My Education - I’m accepted to the Ph.D. program in ECE at WPI. Unfortunately, I haven’t yet found funding for next year. I am plagued by thoughts that there is something better I should be doing with my life.
• Jennie - She’s great.
• Politics - Wow have we ever fucked up Iraq. The Israel-Palestine conflict might blow up soon. Iran wants nukes and the U.N. says no. Domestic budget deficits are bad, particularly for whoever is elected president in 2008.
• Economics - Fiat currencies are bad. Inflation as price increases is bad, inflation as money supply increases is worse. Deflation as price decreases due to productivity increases is fine, deflation as money supply decreases is bad. Gold standard!

As a poker player, I make money by capitalizing on the mistakes of the other players at the table. My profit comes from my ability to detect these mistakes and make decisions with a positive expected value.

It occurred to me the other day that the same concept applies to driving. I typically will not exceed 75 MPH on a 65 MPH highway. This is because I feel the reward of arriving at my destination a few minutes earlier is not worth the risk of a speeding ticket, and the probability of being stopped for driving 10 MPH over the speed limit in such a situation is very nearly zero.

However, if there is another driver on the road who is willing to travel faster than 75 MPH I will follow him at whatever speed he travels up to about 85 MPH, which is a reasonably safe maximum speed for my car. I have exploited his mistake (taking on the extra risk of travelling more than 10 MPH above the speed limit) to obtain a reward (arriving at my destination more quickly) without assuming much, if any, extra risk.