Originally Posted by Freud

This thread is so off base I don't even know where to begin.

Originally Posted by Freud

This thread is so off base I don't even know where to begin.

Originally Posted by makeinu

You're right. I'm sorry for my contribution in the derailling of this thread.

My behavior has been pretty good since I put ILTB on ignore, but this thread just got me going.

Originally Posted by makeinu

You're right. I'm sorry for my contribution in the derailling of this thread.

My behavior has been pretty good since I put ILTB on ignore, but this thread just got me going.

Originally Posted by makeinu

The vast majority of the population agreeing on the nature of the economic/political system is not the same as the vast majority of the population agreeing on everything. Don't you agree that these are different things? Therefore, methods of negotiation would still be necessary.

Moreover, the conditions required to bring such a system into existence (understanding, desire, and action) are not necessarily the same as the conditions required for continued existence. Once the system is in place it could still continue to exist even if the global population fails to completely understand, desire, and work for the system. Understanding, desiring, and working towards the system only at it's inception is a less stringent requirement than understanding, desiring, and working towards the system at it's inception and forever after. Therefore, it is more likely that these conditions would be met only for a brief time at the system's inception (the less stringent case) and that mankind would continue to also have political disagreements thereafter (as has been the case for all of history).

You see, one of the things about capitalism that makes it work is that even if you deviate slightly from the ideal it still works. It's robust. Deviation from ideal scenarios are inevitable. Therefore, any practical system must be similarly robust.

I believe that a socialist democratic system, similar to what you've described, can be robust and practical. However, only if mechanisms are in place to negotiate through all kinds of disagreements. I believe that such mechanisms would require tremendous resources. Fortunately, capitalism has multiplied our ability to leverage resources to such an extent that mankind may actually have the tremendous resources required to make such mechanisms of negotiation a reality.

But what you're talking about is something else. The entire premise of your proposal is that, first, the nature of mankind must change and that deviation from the ideal would be nonexistent. You're presupposing that all disagreement would magically cease to exist. The realization of a global socialist democracy is far fetched enough as it is, but you might as well be talking about aliens.


That's not how I would define overhead. I would define overhead as the resources consumed by an operation below which the operation produces no results. In other words, the minimum amount of resources required before obtaining results (for example, if even the smallest amount of resources produces a result then there is no minimum and, thus, no overhead).

You know, if you're going to be proposing ideas which the world has never before seen, then you'll need to be flexible and generalize your definitions. Saying that the concept of overhead isn't relevant only limits you. You're much better off extending and generalizing the concept of overhead. Take, for example, computer screens. Computer screens aren't actually screens at all, yet we call them screens because of their similarities to the usage of screens with video projectors. If you like, you can stubbornly insist that a computer screen isn't a screen (and, thus, the concept of a screen is irrelevant and inapplicable to computers), but it is much more useful to observe the similarities between the computer screen and the video projector screen and extend the definition of a screen to include a computer screen.

But that's not important, I expressed my question in many different ways so that this kind of misunderstanding wouldn't serve as a distraction. Don't think about it in terms of a generalized overhead (generalized outside the context of business), think about it in terms of resources. Would the total resources consumed by the socialist democracy be less than or more than the total resources consumed by our pseudo-capitalist system?


No. Don't you see what you just did here? You keep doing it. You talked about how much resources the capitalist system uses (including waste). Then you mention the fact that if the capitalist system didn't exist that these resources would be available. Then you conclude that by eliminating the capitalist system these resources could be applied towards the problems of humanity. Your conclusion is a non sequitur. There would only be a surplus of resources available to apply towards the problems of humanity if the new system didn't require these same resources.


No. Another non sequitur. If the resources required by the new system are greater than or equal to the resources required by the capitalist system plus the capitalist waste then there would be no additional resources available. All you've demonstrated is that you can eliminate the waste, but you haven't shown that there would not be a corresponding increase in the actual resources required by the new system. If the difference in resources required by the new system over the old system is far greater than the amount of waste in the old system then there would not be far more resources available.

Once again, you haven't actually made any attempt whatsoever to estimate the resources that would be required by the new system. You estimate the resources required by the old system, observe they are tremendous, and conclude that switching systems would save resources. It doesn't work like that. No matter how tremendous the resource usage of the old system is, you'd only save resources if the resource usage of the new system isn't equally tremendous, but you haven't even tried to estimate the resource usage of the new system at all! It could be more tremendous, equally tremendous, or less tremendous. You wouldn't know because you haven't estimated it.

Originally Posted by Freud

Aaron, I am sort of doing the same. I have a really nice specialized MTB that I was commuting on. But as I started getting more into cycling decided that I would like a road bike. I picked up an old Schwinn Super Le Tour from ebay and have done a lot of the wrenching myself. A great way to learn about the bike I am riding as well as save some money over going out and purchasing a new $700+ road bike.

I just wish I new more so that it wasn't taking me so long.

Originally Posted by makeinu

I'm not interested in the probability of this event. I'm interested in the risk of loss (the probability multiplied by the money invested). No matter how small the probability of the event is, the risk can be made significant by increasing the size of the investment. For most people, a year's worth of housing expenses is a relatively sizable investment.

Originally Posted by makeinu

Comparing investments at different risk levels is not a simple matter. That's why fund managers make a lot of money. That's also why I prefer to invest in FDIC insured accounts. I figure my time is better spent saving/earning money elsewhere than analyzing my exposure to risk and my expected returns.

All I'm looking for is recognition that you can't directly compare your rate of return from prepayment with your rate of return in an FDIC insured savings account (and I would hope that no one is investing their monthly housing money in anything more risky than an FDIC insured account). I'm not saying it's a bad idea to do the prepayment. In fact, I will most definitely be mentioning it next time I'm negotiating a lease, thanks to you. But when I mention it I'll be sure to keep in mind the additional risk involved (perhaps I would get renter's insurance to hedge some of the risk...but of course that would eat into my discount).

Originally Posted by Platy

There was once a place where money was for all practical purposes forbidden, all citizens were equal, life was frugal, and the prime social values were honor and virture.

Sparta

Maintaining that society required a large slave population and cultural isolation. Ultimately, their system did not survive contact with the rest of the world.

Originally Posted by gwd

From Plutarch:"For five hundred years, Sparta kept the laws of Lycurgus and was the strongest and most famous city in Greece. ". They won the Peloponesian war and gave aid to other Greek states in fighting non-Greek invaders such as the Persians right? If I read my history right the Spartans had contact with the rest of the world for the entire 500 years. Their system lasted longer than ours has so far. We have been culturally isolated and are trying to maintain it by making "English only" laws and exporting our culture. A modern Sparta could replace many helots with machines. We keep our slaves overseas or deny them full citizenship and keep them in line by deporting the unruly ones. I would like to learn more about the Spartans. Plutarch makes them seem dour but I wonder if they were more unhappy than other contemporary cultures?

Originally Posted by Freud

Nooooooo!!! We were just starting to get this thread back on track.

Originally Posted by vulpes

Sorry, I don't mean to be a drag. Somebody, please, just shoot me.

Originally Posted by vulpes

Sorry, I don't mean to be a drag. Somebody, please, just shoot me.

Originally Posted by Highcyclist

I wouldn't feel bad about it, if I were you. I'm always very impressed when someone (I'm including TimJ here) takes the time and effort to speak some sanity in this world that's basically burning down...

Originally Posted by Artkansas

Yep, it's hard to buy fresh veggies and fruit in bulk if you are single, espcially bananas.

Originally Posted by gwd

You expect a higher rate of return for a riskier investment right? I figure that the before tax rate of
return for a one year rent prepayment with 7% discount is %20 using a 15% tax rate to make it
comparable with a mutual fund dividend.

Originally Posted by gwd

Once a frugal liver saves a sizeable chunk of money he or she
should put it in non-correlated risk categories.

Originally Posted by gwd

Once you start doing that you are naturally comparing
safe low risk with more risky investments. The first step in comparing different expected cash flows
is to make them comparable. Computing an annualized rate of return is one of them. When you have
the cash flows layed out you can then look at probabilities of loss. As I recall the leases I've made the
issue of lease breaking is covered- you're responsible for the total amount except as noted. A lawyer friend tells me that you can negotiate terms of a lease just like any contract. I suppose he means within limits imposed by law. It occurred to me that as long as you're negotiating a payment schedule you could put something in the lease about getting your money back if the place becomes uninhabitable. Wiith the people I dealt with it just seemed too improbable to worry about.

Originally Posted by makeinu

According to my calculations it's more like 17% before tax (excel sheet attached...the extension says .zip, but it's really .xls). However, even your number is assuming you'll be able to get the same return on those monthly contributions as you would with a lump sum investment at the beginning of the year, which:
1. Probably isn't true.
2. Depending on the kind of investment, probably incurs more risk as the market is always fluctuating.
3. Would take more of your precious time to properly invest, as the market is always fluctuating.


Sorry, I don't mean to be so argumentative, but although I think you're suggestion is a good one to consider, I don't agree that it's a no brainer.

Originally Posted by gwd

I don't see a consistant approach in your spreadsheet. Cell A2 is wrong. If you get a 7% discount your
initial cash outflow is .93 times the yearly rent so it would be 11160 not 12000 right? Then, it looks like
you are finding a monthly rate that makes cell E2 equal 0.07 right? I don't understand why you do that but when I rework your spreadsheet to make E2 0.07 look what happens, you get a 30% rate of return. With A2 at 11160, we agree on columns A and C because those columns represent cash flows. Columns D and E are mysterious to me.

Originally Posted by gwd

The way I do it using the internal rate of return makes the result comparable to the statements that mutual funds put out when they say something like "You got x dollars this month and that translates into an annualized yield of y%." It is also comparable to present value methods because that is essentially what Excel's IRR function does. It finds the periodic rate that makes the present value of the cash flow series equal the initial cash outlay, or if you adopt a sign convention IRR finds the rate that makes the present value of all the cash flows zero. I learned this stuff with paper tables but OpenOffice and Excel and other products put the tables in functions. I would say that if one of the Excel or OpenOffice functions isn't doing the job for you, you are either making a mistake or getting too fancy for typical financial decision making.

Originally Posted by gwd

When I approached landlords about prepayment discounts I did the "stupid renter" routine. Since they were both real estate professionals I knew they had a low opinion of renters. I mentioned that I had managed to save some money and was all confused about stocks bonds and CDs and mentioned the rates of return. They both in their ways began to give me the know it all talk about investments. So I'd say something like "Well I'm not ready for the stock market and real estate would you be interested in giving me a discount if I used my savings to pay the full year now?" Then the one said to me "Of course, years ago it was common to do that." At those times 7% was a lot less than the return on the stock market but a little higher than bonds, so that is what I suggested and they both went for it. The second one continued with the savvy invester act and pulled out his big real estate calculator, furrowed his brows and punched some numbers before he agreed to it. A third real estate agent who I didn' rent from but asked about prepay discounts advised me not to mention it until the landlord had agreed to rent to me because he thought it might make me seem like a person with a shady credit history.

Originally Posted by makeinu

Gee, I guess Socrates and I are just plain fools.

You know, just because some supposed expert wrote a book saying something is true it doesn't make it so. Fact checking is an important and useful skill and one that doesn't lend itself well to noninteractive forms of communication. If, for example, I pointed out the fact that there are studies refuting the notion that cavities are caused by processed foods, your earlier post would be discredited. As a participant in an argument you have an opportunity to produce alternative evidence to demonstrate that your idea is still true. As the author of a book, you simply become a quack spouting erroneous information (and there's always some bit of false information in a substantial work, like a book).

There is truth, but you'll never find it if you take what people tell you at face value.


The problem is you don't know what you're talking about. Everything is interconnected. No matter how much you think you know about a topic, there is always a related piece of information which you don't know about. Knowing 99% of everything there is to know about something doesn't give you the right to say that someone who only knows 1% doesn't know what they're talking about, because if the 1% that they know just happens to be the 1% that you're missing and also just happens to be the crux of the matter then they'll know what the fact of the matter is and you'll know ****. Although you'll vehemently contest that knowing 99% implies you know 100%, you'll be wrong.


Unfortunately, nobody knows everything (not even you). So that's the boat we're in.


Wow, you are so off base here I don't even know where to begin. Let it suffice to say that the bike mechanic who insisted that my 1/4" pitch chain was a 1/2" pitch chain was in fact wrong. But what do I know. He's the bike mechanic, right? Right?

Many times experts are so consumed with their own expertise that they neglect to think. Sadly, this neglect of thought often magically transforms them from experts into jackasses. Sounds like you're one of them.

Originally Posted by TimJ

you guys always, always make my points better than I ever could. It's like I'm plugged in to some super-intelligent computer that takes my input, distills its essence, and produces a reponse that perfectly illustrates the raison d'etre for the whole spiel. I laboriously describe a phenomenon or a meme or some other nebulous state of being, and BAM!- the computer creates a persona that embodies what I've been talking about perfectly and effortlessly, making my description a pale ghost by comparison.

I love you hyper-intelligent quantum computer from the future!

Originally Posted by ModoVincere

(In my best sarcastic Dr. Evil impersonation) Riiiiight.

Originally Posted by TimJ

I know this thread is dead, I haven't seen it in a couple days, not starting it back up, but I got to say...

you guys always, always make my points better than I ever could. It's like I'm plugged in to some super-intelligent computer that takes my input, distills its essence, and produces a reponse that perfectly illustrates the raison d'etre for the whole spiel. I laboriously describe a phenomenon or a meme or some other nebulous state of being, and BAM!- the computer creates a persona that embodies what I've been talking about perfectly and effortlessly, making my description a pale ghost by comparison.

I love you hyper-intelligent quantum computer from the future!