Profits and Losses

The terms ‘profits’ and ‘losses’ are common parts of the business vernacular.  However, many people don’t fully understand their role in a market economy.  This has become even more pronounced after the recent financial crisis.  To date, the government has attempted to perpetuate a system of profits without losses.  The problem with trying to build a market economy without both profits and losses is that it will inevitably lead to one of two extremely undesirable results.

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Toeing the Line with Inflation

Inflation is really a secondary form of taxation.  It is caused by government action and acts by eroding the purchasing power of dollar-denominated assets.  This effect happens when the government increases the amount of currency in circulation faster than the growth of real production.  The net effect is more dollars chasing after fewer goods and services.

The inevitable “next question” is to find out what inflation means to us as individuals, and how we can fight against it.

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Something to Learn

The current world is becoming very polarized and divisive.  People tend to think and act as groups.  The subtleties of unique individualism are being concatenated into “black” and “white” or “Republican” and “Democrat.”  The problem with this brand of mass conformity is that people stop looking to learn from people that are not a part of their group.

Ralph Waldo Emerson is known for a famous belief.  Every person possesses some talent that exceeds his own, and that each interaction with another person gave him an opportunity to learn.  I believe that it would be wise for each of us to extend this philosophy to our own lives.  Contemporary culture has created a “cult of success” where people that show their financial affluence are worshiped and followed religiously.

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Optimism – The Power of Seeing a Half Full Glass

There is a famous statement that an optimist will see a glass half that is full, while a pessimist will see a glass that is half empty.  The basis behind these distinctions is that people who practice optimism tend to focus on what is there.Conversely, people who possess a more pessimistic worldview tend to focus on what is missing.

To many people, the color of reality is closer to pessimism than optimism.  After all, life isn’t fair.  The nice guy always seems to finish last.  Vast inequality exists between people and between countries that defy many people’s imagination.  How can somebody possibly be an optimist?  Optimism seems to be the province of a foolish Pollyanna type worldview that fails to comprehend reality.

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The Greed Scapegoat

In the aftermath crisis of 2008, a common explanation is that “greed” caused the collapse.  When thinking about this explanation in some more depth, one must consider that in order for “greed” to be the reason behind the collapse, then people would need to have become abruptly more greedy than normal.

The contrary view is that if greed is a constant function. (meaning that people do not become more or less greedy over time) There are most certainly people who are highly greedy and others who are less greedy.  However, it seems quite unlikely that people would become abruptly more or less greedy than their natural disposition.

Is it possible that greed is being used as an easy answer to distract attention away from what really caused the problems?

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Making it Happen

There is a disturbing trend among both people and politicians to find somebody to blame for each problem.  This phenomenon frequently provides a convenient alibi for failure.  Many people blame an opaque persona such as ‘big business’ or ‘the man’ for their problems.  These ghosts create an excuse to avoid doing what is necessary for success.  However, the realization of our goals, dreams, and aspirations will require many of us to ‘step up’ and make our goals happen.

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A Tale of Two Futures

In his famous novel “A Tale of Two Cities,” Charles Dickens wrote: “It was the best of times.”  Dickens novel is set in the years leading up to the French Revolution.  The struggle of people against the entrenched power structure feels familiar to many.  It seems to describe our current social and political climate.  Despair and opportunity are swirling beside one another.  This is creating a tale of two futures for the US economy. Continue reading “A Tale of Two Futures”

From “If” to “How”

One of the things that we like to do is human beings is to fantasize about how our lives would be different if something were different.  It turns out that this mode of thinking produces two distinctive outputs.  The first is that it allows our minds to drift into a world where events unfold exactly as we would like.  The second is that by using the word if, it absolves our minds of any responsibility for making our dreams a reality.

The effect is very subtle, but it is still very powerful.  By thinking about our life if our dreams became reality, it sub-consciously reinforces the belief that our dreams will stay dreams.  A much more productive mode of thought is to consider how we can traverse the distance from where our current mode in life to where we want to be.  This doesn’t mean that we shouldn’t dream about what life could be like, and use that as a vision to inspire our actions.  It simply means that we should not give ourselves an easy way out of failing to achieve our dreams.

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