On How a 5 Percenter in Los Angeles Does Money

@aetataureate @jfruh has a great summary above. The administration of government programs, determining eligibility, audits, etc. adds tremendous overhead to social benefit costs. When you provide everyone with a basic income, this cost is nonexistent.

Posted on February 18, 2015 at 3:56 pm 0

On How a 5 Percenter in Los Angeles Does Money

@Intravenus de Milo OK I admit that I expressed it lazily. The simple proposal of “just give everyone a basic income” will be unattractive to the left because it’ll give money to people who don’t need it (e.g. Warren Buffet, Bill Gates) So in order to prevent this, they will need agencies determine need and eligibility, etc. But placing all these additional checks will increase the organizational infrastructure that is needed. This will kill any efficiency of direct payment. The left will never go for a true Basic Income Guarantee because it’ll violate its sense of fairness. But the desire to impose fairness will make the system inefficient.

Posted on February 18, 2015 at 3:49 pm 0

On How a 5 Percenter in Los Angeles Does Money

@jfruh You’ve identified the problem with Basic Income, Minimum Income, and all other such concepts. From a theoretical perspective, both left and right can appreciate the benefits. Left leaning folks can appreciate that the neediest citizens are cared for and the right leaning ones can appreciate the efficiency argument leading to smaller government. This is also the built in argument against an actual implementation. The left will be reluctant to allow anything that could potentially shrink the influence and size of government and the right will be against letting anyone have “something for nothing.” Ideology based objections from both sides of the aisle will snuff out this idea in its infancy anytime it comes up for a serious discussion.

Posted on February 18, 2015 at 2:51 pm 0

On How Living at Home at 31 Taught Me Nothing and Everything About Saving

We in the US seem to have a cultural hang up with multi-generational households. I've noticed that this is primarily in the middle class. The upperclasses (Kennedys as an example) don't seem to have much problem with it...

Posted on January 20, 2015 at 2:34 pm 0

On Working in the Fast Food Industry for a Minimum of $20 an Hour

Unfortunately for U.S. fast food workers, the capital structure in the (American) fast food industry will keep them from making anything close to a living wage. McDonald’s, the corporation makes profit consistently, no disputing that. The franchisee motivation is where things get twisted. For most franchisees, the margins are paper thin, allowing them to mostly barely pay the operational expenses, debt service, and improvements over time. Who in their right mind would buy a franchise for $2.5M? That’s where things get twisted. A franchisee may invest $1.4M of their own money, finance the remaining debt for 7 years. At the end of the 7 years, the debt is paid off and the franchisee has an asset worth $2.5M. This works out to about a 9% rate of return. The problem is that the franchisee is really in the real estate flipping business. He/she is not making money selling burgers and fries but rather the business itself. The restaurant is really inside a black box as far as capital is concerned. That is why the food is absolute rubbish and it doesn't matter. And the employees get treated like cattle. Fast food business model is terrible for labor because almost any increase in the cost of labor causes the disinterested capital to simply not invest. Even a small increase in labor cost causes the capital to shift to another equally heartless investment (payday loans?)

Posted on October 28, 2014 at 10:34 am 0

On The Billfold Book Club Discusses Helaine Olen's 'Pound Foolish'

@HelloTheFuture <> I was in my mid 30's before saving for retirement (or anything else for that matter.) Leaving grad school, getting married, and expecting a baby in the span of 2 years really motivated us to save and invest. We've maxed out the 401(k) and Roth (when eligible) for most of the past 18 years. Luck was a big part of the equation: 1) we were healthy for the most part. 2) No long term unemployment. 3) we were able to build a trusting, caring, supportive marriage. BTW, my wife is a SAHM. The first 3-4 yrs were difficult as neither my wife nor I had discipline financially but it did get progressively easier through the years. We have friends who are in similar situations as us, others who never quite got started, and some others who struggle to stay afloat financially because of job loss, divorce, or health issues. No matter what anyone says, luck plays a hugh component in finacial well being. You have to be lucky AND play your part.

Posted on July 24, 2014 at 11:12 am 0

On "Money Can't Buy Happiness; It is Happiness": A State-By-State Analysis

@Ester Bloom Fascinating indeed. Your point about Oregon being unusual is also manifested in the numbers. Oregonians need 95% higher income to be happy as opposed to neighboring Washington which needs just 36% higher income to be happy. I guess the Seahawks really did make Washingtonians happier...

Posted on July 18, 2014 at 10:38 am 0

On "Money Can't Buy Happiness; It is Happiness": A State-By-State Analysis

Alaska had the second highest median income in 2011 at $67.8K vs US median at $50.5K. So Alaska had median income which was 34% higher than the US median. $98.9K is 32% higher than $75K so it seems in line.

Posted on July 18, 2014 at 10:07 am 0

On Crop Tops Cropped from College, Education = Reparations?, Academic Rejection vs Other Kinds

@apples and oranges No doubt we live in a racist society. The writer was making a case that STEM education does not help blacks. I was pointing out that in fact it does, and by a significant factor. Since black STEM graduates have 181% (.58/.32) the rate of employment of black non STEM graduates, it is irresponsible to say that STEM education does not work for blacks.

Posted on June 6, 2014 at 2:30 pm 0

On Crop Tops Cropped from College, Education = Reparations?, Academic Rejection vs Other Kinds

STEM does work for Black people. STEM grads have employment rate of 58% vs 32% for non STEM grads (not counting underemployment.) That's pretty significant. Underemployment of 32% vs 56% comparing STEM to non STEM. It may not be "Magic" but something significant is at work.

Posted on June 6, 2014 at 11:57 am 1