The environmental left, which seems to be run by anti-capitalist intellectuals and the general misfits, though the foot soldiers are normal caring people that want to leave the world better, not worse, adopted the Marxist/Leninist ends justify the means, and it blew up in their faces. For example, there is now pretty much incontrovertible evidence that humans ARE causing an unprecedented shift in certain chemicals that tend to correlate with climate change in the past, and evidence that we are causing climate change. However, the champions of this are the same malcontents that championed global cooling, zero population growth because we were going to run out of food, and other problems that do not exist. They BLEW there credibility.
The peak oil analysis is interesting (I don't agree, I think that the Saudi Prince put it best, the stone age didn't end because people ran out of stones), but the market is more resilient than the "keep trends constant" analysis that it does, and ignores that as the long-term price goes up (not short-term spikes), certain fields become profitable and oil flows, in addition, alternative energy sources that weren't viable at $20/barrel are at $40, more are at $60, and at $80-$100/barrel, a whole bunch of technologies championed by environmentalists become economically viable.
However, when you blow your credibility, then people trust you less. Fighting Microsoft on the business communications front is stupid, that is their strongest point. They have never hit their shipment or technology targets, never released innovated software, but they DO put out roadmaps and communicate well. Fight them in software land, and keep nibbling their market. Remember, software is a high fixed cost, zero marginal cost game, every lost sale to them comes directly off the bottom line, weakening them for the next round. It costs the same to develop NT 7.0 whether they hold 95% of the market or 80% of the market, so losing 15% of the market no doubt hits profits by 30% of more. It's a game of inches.
However, if you blow your credibility, its REALLY hard to get it back. Microsoft's Cairo and Longhorn debacles have strained their credibility, which is why both Linux and OS X are making strides, Microsoft's miss-execution invited competition. There is no need to blow your own credibility.
With the move to HD, one of the proposed solutions was HAVi over Firewire. Basically, each device would have a firewire port (well, two so you daisy chain), you run the daisy chain between the devices, and they provide their interface via Java.
The studios HATED it, because it meant their content was moving around the network digitally (in MPEG-2), which was the point. Want to record something to D-VHS or AVHDD, just choose to record it. The devices tell everyone that they record. No more PVR, or if you got a PVR, it's just software, and can dump to an AVHDD system. The whole thing was encrypted for DRM purposes, but the studios hated it. They loved Component/DVI because nobody could make a direct digital copy (too much space needed, would need to compress). The consumer electronics companies hated it, because it meant you'd have a single MPEG-2 decoder in your television (or receiver, then run Component/DVI to the monitor which would have no knowledge), and everyone else made cheap stuff. There is no room for a "better" DVD player if all the DVD player does is read the MPEG-2 stream and send it over firewire.
So instead, we are in a digital domain, we have lots of codecs, and everyone needs to do D/A conversions (to support components). The problems people have with HDMI are short-term (hopefully), but the CE companies know that if all they do is serve the bits off the disc, and don't do anything to make the picture better (quality digital/analog conversions mattering in DVD/component land, but not in DVD/HDMI land), there is no room for higher end models. Moving digital bits around is unimpressive, and there are only two parts of the system that convert to "analog," the receiver (for audio to go out to speakers), and the monitor... and now most of the high end monitors are "digital" devices, so no D/A to upgrade, but how they process the signal matters, because eventually YOU are looking at the analog (light wave) output of your digital set.
Part of the reason that we're seeing a massive drop in CE prices is that there is a decreasing benefit to quality systems. If you look at projectors, Panasonic is playing with smoothing technologies to gain an edge, because the convention edge is somewhat neutralized when digital data comes in and then powers an LCD (or DLP) system. Regarding the devices talking, Firewire was the correct technology. What's PATHETIC is that we carry SO MUCH data on the HDMI cable (up to 1080p video, up to 8 channels of 24-bit audio), but no control information. If you want automation, you're stuck with IR blasters (retarded), macro'ing remotes (slow and annoying), or a central automation control that runs RS-232 cables for serial control. The other option is a DC "trigger" where we have the fancy, high tech solution of sending a small amount of energy from device A to B, and B does "something."
On the plus side with HDMI, and cheaper analog to digital converters, we're seeing more receivers that can "upconvert" old RCA Video, S-Video, and Component signals into digital easily. While videophiles may not want their receiver doing video conversion (on the believe that the monitor should... and high end display devices probably do a better job of handling the signal), we're AT LEAST at the point that if you set the receiver to the right input, the "television" is truly a monitor only needing one input, and the trigger to turn it on and off can work. If you want to avoid the receiver based solution, there are plenty of component video switchers (that also switch digital audio, coax or toslink), that autosense what device is on. My dad used to use a receiver with multiple sourcing because he could record a DVD to audio cassette for the car, while running a VCR through the system for the television/stereo, but I don't know of anyone that does that any more, few people convert to analog sources, and they normally do their copying on the computer, not in the AV cabinet with the asinine inter
The reality is that competition drives down margin, not overall profits (something commonly glossed over in economics classes). The reality is that the labels are in for a future of falling margins... well boohoo, everyone in the world is, that's the point of competition. In an extremely competitive world, profits drop as competition emerges, so one can make profits only via moving fast (before the competition arrives), or be erecting barriers to entry.
The labels are entering a period of lower profit margins. They can bitch and moan, legislate to slow it, litigate to recover from it, but in the end, margins are dropping because of competition from other sources of entertainment and pirated versions of their music.
This is not something that can be stopped, but is a natural economic consequence of what is going on. My suggestion is that they adapt to business models that utilize lower margins, instead of wishing that the government will grant them back their fat-cat status.
The problem for them is that they are SO focused on whining, they have blown and missed several key opportunities because of their terror of digital. Minidiscs: they were so paranoid of people copying, that they avoided this format (by avoiding, I mean not offering cheaper versions that people would buy)... Hell, my Dad routinely copies his CDs to tapes for playing in the car, but the labels sold plenty of tapes to people that didn't want to bother. They could have sold tremendous amounts of minidiscs by supporting them with cheaper priced music. People would have bought minidiscs for walkmen, and I bet Car minidisc players would have shipped, and they might have gotten people to routinely buy extra copies.
SA-CD/DVD-A, they have done NOTHING to promote this high fidelity option, and generally been lazy about introducing music in the format. The music that they released in this format was extremely expensive. Releasing a SA-CD/CD hybrid for a SMALL premium over the CD (say, $2-$4) and people would have bought into the technology. Unfortunately, the idiots in the labels through temper-tantrums about digital copies of their IP, so they wouldn't let the manufacturers transmit the high fidelity audio over the existing toslink solution, and resulted in 6 cable messes, etc. Well, people weren't going to buy new receivers and buy into this attrocity without a compelling reason, and the labels refused to provide it.
Woops, there are two examples of where short-sited fear of piracy (which is a joke, everything is pirated anyway) and people exercizing fair use slowed the adoption of technology that would have let them MAKE A FORTUNE. They could have sold chunks of their archive again.
The other point to my comment on the model is that the days of the megastar making obscene money for their labels is coming to a close. The manufactured one-hit wonder will keep selling fewer and fewer CDs, because people WILL NOT buy a CD for the one song on the radio... for one song, you download it... I hear something catchy on the radio, I check the iTMS, I don't P2P music because I don't steal, but they rarely will sell it to me because they worry about cannibalizing the CD sales... This is a strange way to market product (not sell people what they want), and isn't helping.
There are fundamental shifts in the market, and they need to adapt. There is a LOT of opportunity for them in this market, but they need to get over their fears of people having the ability to use it. CDs being copyable to tape didn't put them out of business. It made the CD more valuable and easier to charge more. The label's perpetual fear of technology IGNORES the fact that they make their obscene profit margins from their archives and people buying new formats. When MP3 took off, decent CD rippers were years off and we all had substandard MP3 collections. If they labels put out PROFESSIONAL grade MP3s, available for download at a cheap price ($5.99/album), they would have sold. Would they be traded? Yeah, but so what, they could
When it came out, it was a cool Mac accessory. My wife had recently gotten her Mac, and was really enjoying using it. I got her a 1G iPod as a present, and she loved it. It was sleak and clean, and OS X was just coming into its own as a sleak and clean operating system. It was something different and fun, and for the tech/gadget freak that was playing with OS X (either techies as a clean Unix, music people enjoying the new operating system, or graphics people complaining about OS X but sitting at Mac's all day, it was a great pick-up. Macs had (and still have) a price premium, which means that their user base likely has some disposable income (I own a bunch of Macs for business, they hold up in production use for YEARS, are priced similarly to similar PCs, but because of a limited catalog, have a premium... i.e. spec a PC, then go spec a Mac that has the same OR better specs, that Mac will have better specs and cost more... if you go the other way, the Mac often costs a bit less, but the Mac forces an "up-sell" because of the limited catalog)...
Basically, wealthy, highly educated, technology-savvy urbanites were the first iPod users. Combine that with their iconic headsets, and they had a brand premium when the Windows version shipped... Without the Mac-first launch, I don't think that the iPod brand would have popped up there... They built a brand premium, and the "available now for Windows" got Windows people that were envious of the Mac/iPod users to buy it... once you got that corner of the market, you had a brand to shift to widespread market adoption.
Remember, it was a premium priced player ($400 was the only model then). Every intro-Marketing course will teach you how BWM had an easier time moving down market with the 3-series than Toyota had trying to move up-market... Toyota had to create the Lexus brand independently to create a premium brand. It is easy for a premium player to create a down-market brand if it is clearly the down-market brand, because people aspiring to the luxury brand will buy-in, if the company keeps their premium separate. Going up-market is REALLY hard.
Look at the Mac vs. PC ads, they are whimsical, but focused on the brand. They push the PC as "an alright solution, and work-friendly," but the Mac is where it is at for creative stuff. To an upper-middle class family, the Mac will make them younger, hipper, and more creative, the PC just lets them get work done. It's a fascinating look at the branding exercise, because for the LONGEST time, the conventional wisdom was "sure, Macs are pretty and good for designers, but PCs are better for getting actual work done." After 10 years of fighting this perception, Apple decided to run with it and say, "sure, PCs are better for getting actual work done, but when you are ready to be creative, the Mac is where it is at." That message appears to be working, because it is positive. Everyone wants to think that they are going to have fun and create things, so the Mac gets pushed up market.
The IP cartels have forgotten how business works: sell people products that they want at a reasonable price, and people will purchase your product. Yes it is "unfair" that you are competing with "free" pirated competition, but sometimes, you draw a string of bad luck. Those of us in software development are competing against Indian and former Soviet states that might as well be free... Open Source development has expanded from infrastructure to more and more of the software market, and client don't understand the need to do custom work when the free stuff now "almost works as they want."
It's the nature of the market, it destroys people that are standing still. The problem for the IP cartels is that technology used to take decades to eat the market (VHS ate the re-released movie market, but created the home Video market, DVD ate VHS rental commissions, but created the home movie collection), now it takes years. However, if you move fast, you can make money.
Napster made it possible for large swaths of the public to become exposed to non Top 40 music, people traded MP3s around, and it was easy to get a file, but a pain to get a CD, so if you liked it, you bought the CD. Killing Napster opened the market to better P2P solutions. Apple created a pleasant way to buy digital music. The only constant is change.
If I were in charge of the music studios, I'd keep my legal teams on a short leash, harassing P2P enough to push people toward Apple and Microsoft solutions, but not enough to make my customers hate me. I'd use sites like Myspace.com to get my bands out there, and I would crank out new artists. I'd focus less on monetizing my archive with DRM, and sell whatever I can sell. I'd increasing touring, push SA-CD / DVD-A as a higher quality solution. Hit the market everywhere, some stuff will sell, some won't.
However, my biggest change would be my contracting of artists. The current solution, lose money on 9 bands but make a killing on 1, giving everyone giant advances to live like rock stars, playing the celebrity gossip game, etc., isn't working. The one-hit wonder who gets famous flashing the papparazzi is a dead strategy because P2P eats you, but bands with a following make you money. I'd lower advances, increase the artist cut, and get the artists to think like music creators, creating more CDs, and less time playing celebrity. When a band gets discovered, give them money to produce albums, not party it up. There are more music channels (XM, Sirius, HD Radio, etc.), most outlets for videos (Myspace.com, Youtube.com, Google Video, etc.), and more ways to introduce people to music.
Sure, piracy will eat some sales, but it will expose people to more music. Some people may never buy music, but others will if you make it easy. Get product out there, sell what you can, and keep the legal team on enough of an offensive to keep the pirates at bay... however, forget the idea that you can STOP piracy.
Also, STOP making the technology suck. HDMI has proved to be a colossal disaster, it doesn't work right. Havi over Firewire was the easier solution, multiple cables suck (component + firewire or optical audio), but the HDMI situation causes SOOOOO many problems. The technical hurdles affecting your high end customers are killing you. If you want to move discs, get people to WANT higher quality. SA-CD and DVD-A presented a way to make downloaded MP3s of questionable quality less valuable, but you never supported them, and required people to run 6 audio cables because you didn't want digital solutions to take off, WTF!
Stop screwing around, you're missing the fact that pirates attack your low-end, move up market, and just rattle the pirates a bit. You've lost site of your business, and became engrossed with piracy. Put out music people like, and sales will take off... even if the piracy rate hurts somewhat, you can move product. With a minor harassment game, high school and college kids may not buy CDs, but they will after school when they have money, if you have created bands that they love. The market is changes, adapt with it... but in the end, SELL product EVERYWHERE, stop navel gazing and running in fear.
Well, if you figure that the Xbox 360 is 1 year into a 4 year lift span, it's 25% over (if it really sells well, it'll get a fifth year, overlapping with the Xbox-3). Getting XNA games out now, for hobbyists, let's them tweak and expand their development tools, get paid doing it (the subscription fee probably covers the cost of supporting the project, not much of a profit center, but should make it a bottomless pit of costs), and does so without the expectation of the pro shops.
The big development shops wouldn't tolerate things being imperfect, hobbyists will. For the next generation, expect some XNA derived system to be one of the main development environments for the console.
There is a long tail effect with gaming. People buy consoles for the oddest reasons. If you are a niche system like the Xbox was last round (people wanting HD games, or the absolute most powerful system, not looking for bulk of games like the PS2 was), you can suffer. If you are a shop making an innovative game, that won't sell HUGE numbers, only the PS2 had the volume (unless you were using a Nintendo character license, then the Gamecube was a compelling system) to sell.
Things like puzzle games are popular, light on the graphics, and can be implemented cheaply. If Microsoft figures out a way to sell $20 games online (taking $5-6 as the publisher cut) without involving retailers, then independents will flock to the system, Microsoft will make tons of money, and they'll position themselves for huge market-share gains.
However, the XNA, at this point in the Xbox 360's lifespan, is simply a test. Real development houses with 1-year + dev cycles wouldn't adopt a new system now, but hobbyists and indies will, and what works will roll into the Xbox-3's dev kit.
It's kind of an interesting example of a theoretical economic model happening in reality.
One of the models is a natural monopoly with no monopoly pricing power. This normally doesn't happen in reality, but Craigslist MIGHT be the perfect example of it.
It assumes that because of economies of scale (where the point of diminishing returns from increasing marginal costs exists on the curve outside of full market... essentially, fixed costs get spread out, but we assume that marginal costs decrease for a point, then increase... this historically happened because you first farm the best land, or get the easiest raw materials, but in technology terms, building a site for 100 users is easy, 1000 not to bad, 10000 a bit harder, etc., as you grow beyond a "single shared server with MySQL" to a dedicated machine, to a server farm, the complexity ends up making the cost/user increase at a certain point... when your theoretical website goes beyond what a mainframe can power, the costs of growing become higher). So we know that the natural market will yield a single provider, because their costs will ALWAYS be lower than if there are two players.
However, in this scenario, the market is still competitive if barriers to entry are 0. If the monopoly player collects a monopoly rent by increasing their price, a competitor would enter and undercut them. In that case, we see a market where there is a single monopoly player, but pricing that is the same as the free market would provide.
Take Microsoft in the DOS 2.x - 3.x days. Microsoft was the only provider of operating systems for IBM-compatible computers, but their prices were very low... what you would expect in a free market situation. Once they attempted to collect monopoly rents, you saw the emergence of DR DOS undercutting them. In fact, Microsoft bundled Windows 4.0 with DOS 7.0 BECAUSE the emergence of competition in the DOS space was forcing their prices to stay low enough that they weren't able to collect monopoly rents on the DOS side. It was only in Windows-space, where the complexity was sufficient to prevent a competitor from introducing an identical product, that Microsoft was able to extract monopoly rents and grow into a large, profitable company. There was no technical reason to not ship a Windows 4.0 that ran on top of DOS (purchased separately), in fact, you could boot in DOS mode, then run WIN.EXE (or WIN.COM, I forget, I just typed WIN) which would launch Windows. There was no reason that you couldn't use DR DOS with Windows, other than Microsoft bundled them to push competition out. By making MS DOS "free" by including it with Windows, they eliminated competition in the DOS space, and therefore there was no reason to buy DR DOS instead of Windows 95 with free MS DOS, which is how Microsoft FINALLY got people to migrate from DOS to Windows, which let them create a migration path to NT.
If Craigslist were to start charging monopoly pricing, a new, free competitor would enter immediately. This is part of why even for the listings that they charge for, they only charge a small, nominal fee. If prices were to reach a sufficient level, a new, Joe's List, would take over their market.
The press isn't anti-government... it's gotcha and headlines. It sometimes appears anti-government, but it's equally anti-corporation, anti-America, anti-suburbs, anti-trade, anti, anti, anti...
It doesn't have a "liberal agenda," it's just a bunch of small minded idiots that think that they are smarter than the rest of the country. Think back to college... did you ever think that the journalism majors were the impressive brains? I bet they all thought that they were.
Being distrustful of government isn't even helpful. Being trustful of government isn't helpful. Intelligent, investigative reporting is helpful. As Reagan said, "Trust... but verify..." Don't assume that the government is lying (or telling the truth) but do your own investigation... OTOH, that would require not shutting down investigative reporting and foreign offices... I guess it's cheaper to repeat what government spokespeople say and the "opposition" party and call it a day...
I'm a fascist? Did I say that freedom of the press should be curtailed? Did I question the rights of the press to do what they are doing? I am suggesting that post-Watergate, the press's attitude with respect to government SUCKS.
I don't want gotcha, I want factual reporting. I don't want blind faith in the government, or blind faith in opposition. My point is that I find the gotcha games unproductive in peace and dangerous in times of war.
If the press's freedom to question the government is valuable (which it is), it is no more valuable than my right to say that they are a bunch of imbeciles that aren't investigating usefully. Alternating between parroting the government's PR and then challenging everything to play gotcha is not balance, it's idiocy. We don't need a press to parrot the government's PR, give the White House a dedicated channel and call it a day, and save everyone the effort. We also don't need the press to value "gotcha" at the expense of the government's success.
The Pentagon, like all large organizations, is so tied up in red tape that its massively inefficient. It may need rules to manage at that level (large organizations value reproducability over creative but inconsistancy...) it weeds out the good and the bad and guarantees mediocrity.
The world is not about "conservative vs. liberal viewpoints," but about situations and their needed solution. Ideology gives one a framework and philosophy to evaluate those situations, but situations must be evaluated.
Your post put words in my mouth to have a straw man to attack, then started calling me a fascist, which is rather rude. Stop watching talking heads spew garbage, and learn to evaluate the myriad of problems facing you, your family, your community, and your country.
Does our press corp believe that it is their job to report what is going on, or look for examples of stupidity to attack. Try watching the Daily Show, which is the most brilliant satire of the way news works. His clips out of context (and often outside of cronological order) demonstrates the absurdity of how our news media operates. While it's more extreme (because it is satarizing the media), it illustrates how finding ways to attack people isn't "questioning government," it's taking the easy way out for ratings.
Look at your method of arguing with me... you ignore my points, and try to paint me into an ideological box so that you can attack the box with pre-prepared talking points. Your attack on my post illustrates how bad discourse has gotten, because you're mimicking our awfully poisoned debate.
And if the officers sent in a requisition, and someone pushed it through, I can see the headlines:
Pentagon spends millions on children's toys Military awards no-bid contract for toys Millions of cans of toys bought, unable to track Military fails to provide tools to troops, uses toys instead
You are 100% right about the edge of irregulars being able to use whatever works. However, clearly our troops are just as smart and figured out how to improvise, and away go the cans of silly string. So it's being done voluntarily by people on the home front, so what, that just makes them wonderful patriots. What is with the statist notion that it is only okay if it goes through taxes and government procurement.
The biggest problem is that we have two generations of reporters that believe their job is to undermine the government, and that that is an example of freedom of the press.
Take the body armor issue... Our troops have some older body armor, and there is a dispute as to which ones to replace. If the government replaced EVERYTHING, we'd be screaming about waste from throwing out our perfectly good 2 year old body armor that we spent billions on. In addition, the guys in the cities don't want the bulkier armor, and were refusing to wear it, so the Pentagon, sick of the bad PR, REQUIRED the use, even for units that didn't want it.
The anti-government press goes beyond reporting problems so that they can be fixed, and tries to play gotcha with our government. So government officials play CYA, instead of doing the right thing. It's a HORRIBLE mess, and it will take more than an emergency requisition of silly string to fix it.
Dada21 wrote, "My recommendation? Have one day a week with NO technology -- no TV, no radio, no iPod, no laptop, no cell phone. Try it.
Careful with your recommendations on this forum, you might get attacked for being a religious person advocating things like then...
From Exodus, "But the seventh day is a sabbath to the Lord your God; you shall not do any work--you, your son or your daughter, your male or female slave, your livestock, or the alien resident in your towns. For in six days the Lord made heaven and earth, the sea, and all that is in them, but rested the seventh day; therefore the Lord blessed the sabbath day and consecrated it."
Just teasing, your suggestings regarding burn-out are on target. A day away from technology (cel phones, email, etc.) and with the family is awesome, and I couldn't function without it... just pointing out that it's NOT a new idea... it's an idea as old as the universe...:) 2 days to go this week...:)
Check out my agent, 2hsa.com. They had a bunch of options for small businesses, etc. Basically, they recommended a PPO that was like you said, 20% copayment... a la traditional insurance from the 1980s. However, we hooked up for an HMO, with a max out of pocket. When I did it two years ago, there weren't many plans like mine, and people weren't really liking them... hated the idea of the restrictions of the HMO while paying out of pocket. Any year now I'm going to look into better options, but my primary concern was NOT having a scenario that wiped me out... so that's what I found insurance that covered.
You're right in that wealth is created by people actually doing the process. Providing a good or service that someone finds valuable creates wealth. In addition, certain commodities are inherently valuable, so the extraction of them creates wealth by the amount exceeding the cost of extracting them.
Ayn Rand makes a lot of good points on where wealth is created, but the simplification that I made was true to a point... Wealth is the increase in your assets over your liabilities.... your Net Worth on a personal balance sheet. If through selling my labor for $100, I only need to spend $80 to continue, I have added $20 to my wealth.
Sure, you can do it on your own, come up with something unique, and create your own wealth (we're not following GAAP, value your own business assets using whatever fair metric you can), but that's not the point of this exercise.
The point I was making, is that there are SEVERAL types of retirement accounts for businesses and self-employed individuals, all with different contribution limits, and it's not clear what public service these tax shields provide. The goal of the tax-incentives for retirement investment into publicly available commodities is the social benefit of not having a bunch of indigent elderly people that choose to vote themselves wealth at the expense of the Republic.
However, why on earth is the SIMPLE IRA capped at 10k, but the 401(k) at 15k? This used to be because of the compliance costs of the 401(k) and the means testing to avoid being top-heavy, but now the "safe harbor 401(k)" let's small businesses run a 401(k) with 401(k) contribution limits and no means testing if they follow the same guidelines as the SIMPLE-IRA, only the 401(k) requires lots more paperwork that is a pain for any business that can't justify an HR person or enough HR time to handle it.
Why do we have strange accounts without a contribution cap in dollars, but percentage caps, but are designed to only work for the self employed (have to put the money in for ALL employees pretty much eliminates doing a 25% retirement plan, and others only are allowed for family-run businesses, no employees other than spouse or children).
A simplified retirement system (Bush's proposal or trial balloon was consolidating all the IRS code into two accounts, Individual and Corporate, each with a 15k limit I believe, and there was also a lifetime savings account that had a smaller limit of around $5k/year, but could be taken out whenever, basically to encourage additional savings because you could use it to save for a house, or a car, or whatever). The idea was to provide standardized guidelines for businesses, to eliminate top-heavy testing and all the other garbage to encourage small businesses to take on retirement accounts, and large businesses to stop needing to spend a fortune on compliance.
The public markets allow people to invest small amounts of capital into the ventures of others, who take that capital and invest it (true the public markets are a secondary market, when you buy a share of IBM, no money is actually placed with IBM, but IBM raised money through their IPO and secondary offerings at a higher level because of this public market, so it's abstractly the same thing, and when you buy shares off other investors, this money is freed up to be deployed elsewhere). Most people don't have the willingness to create wealth independently, but by leaving below their means, can create a small stock of capital that can be invested in small amounts into the businesses of others, helping create wealth by deploying that capital effectively.
The issue with social security... even if we pretend that the trust fund is real and you are contributing to your future retirement (which on an accounting basis is sort of true, but isn't true in a cash manner), it doesn't create wealth because you have no ownership of that capital. While you get an annuity benefit of sorts at retirement from the SSA, it has no cash value because you're not allowed to sell it. It isn't
FSA is a flexible savings account. It's a corporate based account, where you put money aside, and can spend UP to the FSA limit and get it back. However, it's a company account (not personal), and if you don't use it, the company keeps the difference. That's the incentive for the company to offer FSAs...
The HSA is a personal account. It's yours. You put money in, your employer can match, but it's your account. There is no use-it-or-lose it. It's like an IRA, only you can take money out tax free for medical. After retirement age (I believe the same 59 1/2 that IRAs have, but it might be different), then you can take the money out, pay taxes on it, and use it however you want.
The weird thing is combining the two. You CAN do it, but the laws are supposedly tricky. My wife and I were considering the option of her hopping on my insurance, putting the 4400 family amount in the HSA, and then putting $1k or so into her FSA through work. In that case, on our first $1000 of the year, we pay cash (not withdraw from the HSA), and get reimbursed from her FSA. That way, we can keep the HSA as an extra IRA unless we need it.
However, you have to be careful if you are doing it, but I think that it's because of double-dipping. The FSA can cover un-reimbursed medical, as well as child care and some other things. The problems would lie if you pay with your HSA debit card, and then claim it as un-reimbursed medical.
There are a lot of tricky tax games with health care... the thing that I find stupid, is if the feds want medical to be tax free, why not just make it a schedule A write-off, instead of a schedule A write off exceeding 7.5% of AGI (or MAGI, whatever). I don't really get why I can write off 100% of my health costs if I fill out a lot of paperwork, but it's done with post-tax income otherwise. Similarly, why the hell can I not write-off health insurance on schedule A, (or schedule C for the self employed... I don't think that you can, but who knows), but a C-corp or S-corp can... the whole system is overly complicated.
Okay, I had my deductible/HSA contributions off, it's $2200, not $2400. I also have the HMO plan, not the PPO, which means jumping through hoops for referrals for specialists, but also means 100% coverage. I checked my benefits, and my max-out-of-pocket is my deductible of $2200. After that is met, I have $0 copays on everything (except non-routine equipment, which has another $2000 deductible).
In addition, on prescription drugs, I get the Aetna negotiated rate (and the same things for medical visits, I pay the HMO negotiated rate). So, I do have coverage for the bad situation. However, drugs don't count against my deductible, as I went without the drug plan to keep costs down.
I'm sure that in a bad situation, some stuff will be uncovered, and I could end up with a higher bill. However, knowing that I have $3500 currently in an account for medical purposes (money that was essentially free, because the high deductible plan + monthly contributions to the HSA was about the same as the same HMO with normal co-pays/deductibles), makes me more comfortable than I would with a plan with a $500 deductible and something that I need to track.
Basically, my concern is the major event. It's not just cancer or heart attacks, it's ANYTHING non-routine. However, the cheaper premium COMBINED with my placing those savings in an HSA leave me MUCH more comfortable that if the unfortunate arises, I am financial prepared for it. If I carried more traditional insurance, I would be LESS prepared.
Basically, I accept the routine care risk, and in return, I have a much larger financial cushion for the non-routine. That to me is a happy tradeoff. Sure I'm on the hook for a few hundred dollars if I need medical care, but that to me is a much easier scenario to cover than the major situation.
OTOH, one of my former employees decided that she hated our package (despite that I matched contributions to the HSA, which everyone did), and complained that she had to put off medical care because it would have cost her $100 or so because our "crappy insurance" didn't have a $15 co-pay. I stared at her and asked about the thousands in her HSA that I had deposited since we established the plan... well, she didn't want to use that.
She was like the other poster, she couldn't handle the idea of shelling out for routine care. Never-mind that she would have shelled out $450 or so in the time she put $2200 in the account, she couldn't handle spending that kind of money. I think that its irrational, but I understand why people respond that way. OTOH, our small business was able to GIVE everyone insurance (small groups need to have 100% participation, so they paid $0 for the coverage), which I could NOT have done with a traditional plan. And, by matching the HSA contributions, everyone did that to (to get free money), and I knew that my employees were covered, except the woman who wanted to be mad at me.
You are right, things change over time, and my health care needs will change over time. But in my late 20s, I don't have routine costs. The thing with the high deductible plans that I like is that I KNOW my downside risk (the high deductible), and the paired HSA (part of the medicare debacle was the HSA creation) is that I have a debit card in my wallet that as more money in it now (after two years) than my deductible.
I carry insurance not to regulate my expenses (like the other poster does), but to shield my downside.
In fact, I propose that this insurance is BETTER for managing costs. A traditional medical plan cares 80% coverage, meaning if I have something bad happen to me and end up with a $40,000 medical bill, I'm on the hook for $8000. With my high deductible plan, I'm on the hook for $2,400.
The question is, is routine medicine an insurable event? Should it be. I suggest that regular things (for example, birth control, which is controversial when plans DON'T cover it), isn't really an insurable event. We've basically decided that the insurance companies should regular our medical costs, and we'll hand them $500-$1000/month and they are on the hook for our costs. This makes insurance much trickier to price.
I agree with you that in 10 years, my medical needs will be VERY different. However, what is nice about this plan is that my "medical expenses" are $1400/year for insurance, and $2400/year in my HSA, which means out of pocket $3800 (all pretax, because it's done through my company), but at the end of the year, I have $2400 in my account. If I cared traditional insurance, I'd be spending about $3600/year on insurance, and in these healthy years, it all gets kept by the insurance company. If I roll snake-eyes, I just lose my $2400 that is socked into the HSA, but in other years, I keep most/all of it. Ten years from now, I'll have a stockpile of medical related cash in the HSA, that I can use to cover all these medical related expenses.
I really don't see a downside to the high deductible, HSA compliant plans. They are cheaper because the insurance companies are running normal actuarial tables, and only charging me for their "risk" of something catastrophic, instead of what they expect me to use.
Right, there is a convenience of not having to worry about it. I have a lot of accounts to track, none of which are that big, because I try to take advantage of these tax sheltering opportunities. It's a real headache, and makes it harder to figure out what is going on. The net effect is that we're leveraged to hell, our "net worth" isn't that high because huge liabilities that almost match the assets. The theory being that in the long run, my assets are returning a few points more than my liabilities, so I keep the spread.
The problem with Bush's ownership society push was that people want, set it and forget it. All these accounts (IRAs, Roth vs. Traditional), 401(k) (Roth vs. Traditional), 403(b), SEP-IRA, Simple-IRA, Keogh, etc., confuse people, so they do nothing. There was talk of a simplified retirement planning system, where you would have a business retirement account and a personal one, and consolidate this big mess, but nothing came of it.
The fact is, most people would prefer the "good ole days" which only really applied to the WW II generation, where you work for a company for 40 years, pay your 30 year mortgage off by retirement, had health care covered, and when you retired, collected your pension and social security. When you died, your house was sold and your kids split the sale, and life continued.
The odd effect of this was that nobody obtained "wealth" because they simply had lifetime income streams.
The idea of the ownership society was that instead of just getting payments, you'd accumulate wealth. People would earn returns off this wealth. The problem is, during your lifetime, there is no benefit to this, you just get more headaches. The difference is that when you die, your heirs would receive the wealth, because you owned assets, instead of getting a stream from the pension fund.
One of the things that the right-wing think tanks were proposes was this "neo-conservative" (economic policy, not foreign policy) idea where the government would encourage you to build wealth, but support things like annuities to make it easy. If people convert all their wealth into an annuity at retirement, they keep their "paycheck," which makes things easy for them, but then they didn't really get any wealth because it all goes to the insurance company. Which is why you're seeing the business publications running models where people annuitize part of their wealth at retirement.
The fact is, people will glad trade some "expected return" for a stable return, which leads to no wealth creation. Of course, the politicians turned it into wedge issues, on the theory that the more people had in the stock market, the more they were likely to vote GOP, so the GOP pushed for replacing government guarantees with stock ownership, and the Democrats opposed it. The social security debate was such a travesty because it ignored the actual effects on people, and was only based upon the GOP wanting people to own stocks so they'd become more conservative, and the Democrats wanted people to not own stocks because it would cause them to vote GOP. The joke of the matter was that since it required buying an annuity at retirement anyway, there was no wealth being created, it was simply moving it off the government budget.
For people to acquire wealth, they have to own assets. But people don't want assets, they want the income that the assets generate. So somehow, the market will need to capture this, which you are seeing, as more and more 401(k) plans offer automatic "annuitization" at retirement. In addition, for people to gain these benefits (individual investments with a historic return of 10%, compared to pension funds with a historic rate of return of 8%), they had to take the risk. Even though the average person would be better off, and some would be much better off, some people would be losers.
How much potential "gains" would you trade to know that you never have to worry about housing, food, healthcare, and education. For most people this is a lot, which is wh
No question, free flow of capital leads to creation of wealth. As the article pointed out, establishing banking in poor countries would help. How much of middle class wealth is tied to home ownership? A generation ago, you financed 80% of the house, 10 years ago, 90%, now, 97%-100%. The existence of a banking system that establishes credit gives people the ability to finance assets. If assets will generally grow faster than the interest on the credit, then the people gain wealth simply by having access to capital.
The collective wealth (whether rich individuals investing through hedge funds, a pension fund, or individuals in their 401(k) mutual funds) gets invested. It's no direct (rich guy loaning me money), but out secondary markets reduce transaction costs and make these transactions occur. Take home loans? Banks used to loan money and hold the loans, which meant that a local economic downturn resulted in a housing correction, caused loans to become upside down, people to default, and the bank to collapse. Now, mortgages are "securitized" and sold off in bundles to investors. This diversification makes the overall risk lower, which has dramatically reduced interest rates... The difference between a 30 year prime mortgage (around 6.5% +/-.25%), and the 10 year treasury note (4.5% +/-.5%) is only 2%... That's not a huge premium for random guy compared to the federal government.
This access to capital creates the massive wealth in the US. For fun, Google's market cap is $150 BILLION dollars... that's a lot of wealth created "out of thin air." All the wealth creation that goes on in the US is truly staggering.
So yes, wealth is created, and those that have wealth benefit from it, so the wealthy benefit disproportionately from a stable society. The question however, is which of these taxes are going to "creating a stable society" and which are going to "buy votes from dependent people." One of the reasons that the GOP pushed so hard for welfare reform was that the effect of the old system was a permanent underclass. Since this underclass had a higher birthrate and shorter generational times (first child @ 16 compared to 26) was causing this rapidly expanding class that wasn't going to get out (if you are one of 5 kids born to a single mother on welfare, you have a bunch of strikes against you... while some will make it, the overwhelming majority will stay in that underclass)... However, it was creating a dedicated group of Democratic voters (at least that's the political theory, in reality they didn't vote in large numbers).
The concern is that a good chunk of our tax dollars go to buy votes or campaign dollars... Both sides do it, the corruption of the GOP was staggering, where $1 in campaign contributions had an expected return of $20.
Roads, law-and-order, sanitation, etc., these are all costs of a stable society, but these are costs generally provided by local governments off of property taxes. The collective security is a big chunk of the federal budget (as is interest payments), but large chunks go to strange items. Social security was designed to get old people out of the work force to lower unemployment (weird situation was economic activity decreases massively as unemployment goes up, where as you would assume it was a factor of employment and wages, not number of people in the work force). There is a lot that taxes go to that DOES NOT contribute to the stable society that the wealthy benefit from, and in some ways goes to tearing it down (NEA, the bizarre helium storage for our non-exisant balloon fleet, and other strange parts of the budget).
That is where some of the objection comes from. I haven't seen anyone complain that property taxes (that mostly fund police and schools) hit the rich to hard, it's generally the income tax. Also, thinks like income and capital gains taxes don't hit the "wealthy" (who make their money off muni-bonds, etc.), but rather the upwardly mobile middle class.
I carry a high deductible plan. My deductible for the year is $2400, I don't have a prescription drug plan, etc., but my monthly premium is $119. My wife and child are on her insurance with reasonable copays, etc., and it's over $500/month for the two of them.
For me, I never go to the doctor because I'm healthy, I should start going for annual checkups, but never remember to. However, even with annual visits (which are free or cheap, I forget, because they want you to stay healthy), I don't pay much for it. Why do I carry insurance like this? I don't want a health maintenance plan, I want insurance. If something bad happens to me and I need to be hospitalized, my downside risk is covered. It's much cheaper because I am responsible for routine stuff... My car insurance doesn't cover oil changes, why should be health insurance cover routine medical care?
The nice thing with the high deductible plans is the HSA incentive. I can put up to my deductible into an interest bearing account (I put pre-tax dollars in) that can be used tax-free for health care costs. So I am insured for expensive stuff, and I have already saved up to cover the deductible if I need to use it. It's a win-win for me.
Insurance is expensive because people with insurance get a lot of medical care that they might skip, but once you are paying $800-$1000/mo for insurance, there is no way you aren't getting EVERYTHING looked at.
The question with the cheap coverage is what did it cover. You said it didn't cover what you needed it to, but now you're paying an extra $120/month. Do you really go to the doctor's enough to cover that extra $1400/year in premiums? Would you be better off with a cheaper plan and paying for "what you need"? Something like 80% of Americans use less than $1000 of medical care each year. Would that $79 plan cover you if something bad happened?
I think that people worry to much about the small parts of health care, and don't focus on what they are really insuring against. What's great for me is that this HSA that is building up can be used if I need something expensive down the road, and that to me makes it reasonable to pay $50-$100 if I need routine coverage.
Having grown up in South Florida, Hurricane panics always seemed amusing. In the almost 20 years I was in Florida before leaving for school, we had 1 decent Hurricane hit the area. Then, when I was away, the state got smashed in one year with 4 storms, and 2 the following year.
All of a sudden, when I moved back here, Hurricane season was serious, and people acted like a "normal" year had 2 Hurricanes hitting us.
The fact is, we don't have much data on Hurricanes. People made a big deal about hitting the Greek Alphabet, but the reality is that so many storms get named now that wouldn't 10 years ago. We've only had satellite coverage over the Atlantic for about 45 years, and how much attention we paid to storms out there is questionable.
Normal 15, 30, 50, and 100 year cycles (I assume that there are a bunch of things operating on normal cycles) are undetectable until we have more data. The problems that I have with the climate change debate is that it is really hard to separate out what is human caused vs. natural cycles because we don't have much data.
If we had 30000 years of satellite data, then sure, this would be easy. However, we have WAY MORE data on the past 35 years than we do on the past billion years. It's very easy for alarmist psuedo-scientists to take scientific data, find a peak and a valley in the data, and draw alarming results. The biggest concern with climate change is the possibility of positive feedback loops, those are scary. However, it is very likely that there are MANY negative-feedback loops that will help mitigate things.
To construct a scientific experiment, whether mathematically or otherwise, requires holding other variables constant. In the real world, these variables are NEVER constant.
We had TWO years of increasing Hurricane activity, and then by plotting a line, we saw WORST SEASON ON RECORD... however, an unrelated system, El Nino, caused a below average season... There is simply too much operating for any predictions to be worth anything.
The worst part is confirmation bias... Hot day, bad storm season, etc., and liberals blame global warming... Never mind that Global warming refers to a 1 degree Celsius historical shift and a 1-5 degree shift in the next 100-150 years... however, this again assumes that current trends continue. If temperatures raise, other things will kick in that may be positive or negative feedbacks... people will shift their actions in warmer environments, and we'll see what it does. Predictions suck, because external factors pop up.
In fact, if things get hotter globally, areas that people go to to experience heat will likely decrease economically (Florida tourism will take a hit), which may make the economic costs of hits to that area MUCH smaller than predictions would say because other things are NOT equal.
In the 1970s, car seats were small and compact. In the 1970s, pre FMLA, there was no generally accepted 3 month maternity leave, so normally really small kids had their mother at home.
In the 1970s, airbags didn't make it dangeous for kids under a certain age/weight to right in the front seat. In the 1970s, carseats could ride in the front OR back... now it is back only, and facing backwards with little kids. In the 1970s, putting a carseat in the back-middle didn't block the two seats on the side, now it will.
The fact is, the car manufacturers and child safety manufacturers have adapted to A) a change in the legal requirements, B) more litigation, causing car seats to be slightly safer, but 85% of them are installed incorrectly, so they are on average less safe for the kids, but safer from law suits, C) adapt to a decrease in family size.
In the 1970s, 3 kids was normal. In the 1980s and 1990s, 2 kids was normal. Although family sizes are inching back up, anyone with 3 or 4 children will struggle with current cars unless getting a mini-van.
Gaming involves viewing output on the screen, and doing things on the input device. A different input device means a different game. Making a game for PS2, XBox, and GC (a la Madden Football) is just a matter of porting to the different hardware (straight-foward, regardless of how time consuming) and remapping controls.
Making a game for the Wii requires rethinking the game because the way the user interacts is very different. Just like Console and PC ports require some fine-tuning (keyboard + mouse is different than controller... you couldn't straight port World of Warcraft to the console), a Wii game will require a different gaming process to take advantage of the hardware... including the controller.
Porting to different chips is "easy" because you just throw programmers at the problem and it goes away. Porting to a different interface system is difficult because you need to rethink elements of game design.
I agree that Nintendo is smart on this system... keep out of port-land with a different controller, keep the system simple to lower development costs, and stay out of head-to-head competition.
Companies that wrote games for any of the last-gen systems could release them for other systems simultaenously or after exclusivity ran out, the Wii requires that the Nintendo version be unique. That gives Nintendo a unique value proposition. Deciding between Xbox + Madden or PS2 + Madden comes down to "cost" (or benefits of having the system later). The Wii is so different that people that want that system will need to buy a Wii and the Wii games.
That said, if the Wii shipped with a "game cube" controller and made it a way to build games for both, they might have been able to snag more by being the uber-system (both types of games), but that might have discouraged Wii-style games, so who knows.
I remember reading about the "victory" of the pro-science anti-religion crowd, where they got a school board to not only fight back the religious assault on evolution, but to actually prohibit any questioning of evolution in the classroom... I wanted to cry...
Science REQUIRES questioning. Elevating scientific theories to dogma isn't science, it's religion. Prohibiting the questioning of a scientific theory undermines the whole point of science.
While I'm not terribly approving of the Church's historical stands on research that contradicted their religious views, I think that the anti-religion crowd has adopted scientific evidence that undermines a fundamentalist reading. Interesting, in Genesis and the Big Bang Theory and MIT educated scientist and Orthodox Jew, has been working to reconcile the teachings of the Torah with scientific knowledge, based upon the assumption that the two are in-sync, and whenever you think that they aren't, one is being misinterpreted.
The fact is, the religious world isn't as one-sided as Slashdot portrays it, but the anti-religious crowd is risking turning themselves into what they hate, a close-minded society that is as dogmatic as the medieval Church.
Sony has a built up brand, people want it... (I've normally only owned Nintendo systems, but I can appreciate that the PS1 and PS2 had HUGE markets)... but they can't get product out the door. To win the marathon, Sony needs to make as many sales as possible to people willing to pay high prices, and figure out how to get manufacturing costs down as they lower price to sell more units... first sell to everyone willing to pay $500, then $400, then $300, then $200, etc.
However, Sony will be able to keep selling units for top dollar, which will help them, because demand is so high... but they can't supply the market.
Nintendo appears to have figured out how to get units out the door. It doesn't matter that 2x to 3x the people want a Sony system as a Nintendo system if Sony can't get them off the line and into stores. Nintendo will sell there demand, and some will substitute a Wii for a PS3. Sony blew this launch BADLY. They may win this round, they may make money, they may pull off a lot (they have a LOT of Brand Value), but they screwed up manufacturing.
If Nintendo keeps manufacturing units and selling them, they will sell games and make money. Some third parties may sign up (if you want to launch a game for next Christmas, if Sony doesn't fix its manufacturing problems by mid-year, Nintendo may be a real option for them). The interesting thing is that Nintendo's system is SO different, it isn't straight ports that will work. Last generation, game companies could switch their target system around without much re-jiggering, but Nintendo's system requires a completely different approach because it is so unique.
However, Sony blew the manufacturing... marketing did its job, but they didn't get product out there. I expect Microsoft to be the BIG beneficiary of this, as Sony and Microsoft are much more substitutable (similar hardware, similar controllers, similar target markets), but Nintendo will find itself fighting in the normal market, not just a niche...
Interesting thing as well, Nintendo didn't overspec their system, they may have underspec'd it. That means that they may be able to get costs WAY down. If Sony's botched launch delays games (because nobody wants to sell games to a dead market), Nintendo may be able to keep moving systems and get the costs down fast. If that happens, expect Nintendo to start selling to hardcore gamers because if they can get a $200 package with 2 games out within 24 months, hard core gamers may pick one up to augment their Sony/MS gaming with Nintendo's unique offering.
Nintendo executed, Sony didn't. Kudos to Nintendo. Sony, get your divisions back in sync.
Top selling Xbox game, Halo 2, 7.55m units, next top selling game, Halo, 6.44m units.
While the top sellers of all time are classic Gameboy and NES games in general, that was when Nintendo monopolized the market and restricted the variety of games.
The top selling Gamecube Games are: Smash Bros Melee, 6.1m Mario Kart: Double Dash, 6.01m Super Mario Sunshine, 5.56m
So, the Halo franchise moved almost 14m units in two games, and the Mario Franchise moved 17.57m.
Granted, the Mario games used 3 games to do it, and Halo only 2, but my point remains the same. While the two Halo games outsode the top Mario games by between 10% and 25%, Nintendo clearly did better with their top franchise than Microsoft did (and that's without counting all the other Mario derived games on the list).
The Xbox outsold the Gamecube by a long shot, and the Gamecube's top games were competitive for top games. I think that it demonstrates that while Nintendo can't print money like they could in the NES games, they still have a model that moves a LOT of units.
Slashdot Mirror
The environmental left, which seems to be run by anti-capitalist intellectuals and the general misfits, though the foot soldiers are normal caring people that want to leave the world better, not worse, adopted the Marxist/Leninist ends justify the means, and it blew up in their faces. For example, there is now pretty much incontrovertible evidence that humans ARE causing an unprecedented shift in certain chemicals that tend to correlate with climate change in the past, and evidence that we are causing climate change. However, the champions of this are the same malcontents that championed global cooling, zero population growth because we were going to run out of food, and other problems that do not exist. They BLEW there credibility.
The peak oil analysis is interesting (I don't agree, I think that the Saudi Prince put it best, the stone age didn't end because people ran out of stones), but the market is more resilient than the "keep trends constant" analysis that it does, and ignores that as the long-term price goes up (not short-term spikes), certain fields become profitable and oil flows, in addition, alternative energy sources that weren't viable at $20/barrel are at $40, more are at $60, and at $80-$100/barrel, a whole bunch of technologies championed by environmentalists become economically viable.
However, when you blow your credibility, then people trust you less. Fighting Microsoft on the business communications front is stupid, that is their strongest point. They have never hit their shipment or technology targets, never released innovated software, but they DO put out roadmaps and communicate well. Fight them in software land, and keep nibbling their market. Remember, software is a high fixed cost, zero marginal cost game, every lost sale to them comes directly off the bottom line, weakening them for the next round. It costs the same to develop NT 7.0 whether they hold 95% of the market or 80% of the market, so losing 15% of the market no doubt hits profits by 30% of more. It's a game of inches.
However, if you blow your credibility, its REALLY hard to get it back. Microsoft's Cairo and Longhorn debacles have strained their credibility, which is why both Linux and OS X are making strides, Microsoft's miss-execution invited competition. There is no need to blow your own credibility.
With the move to HD, one of the proposed solutions was HAVi over Firewire. Basically, each device would have a firewire port (well, two so you daisy chain), you run the daisy chain between the devices, and they provide their interface via Java.
The studios HATED it, because it meant their content was moving around the network digitally (in MPEG-2), which was the point. Want to record something to D-VHS or AVHDD, just choose to record it. The devices tell everyone that they record. No more PVR, or if you got a PVR, it's just software, and can dump to an AVHDD system. The whole thing was encrypted for DRM purposes, but the studios hated it. They loved Component/DVI because nobody could make a direct digital copy (too much space needed, would need to compress). The consumer electronics companies hated it, because it meant you'd have a single MPEG-2 decoder in your television (or receiver, then run Component/DVI to the monitor which would have no knowledge), and everyone else made cheap stuff. There is no room for a "better" DVD player if all the DVD player does is read the MPEG-2 stream and send it over firewire.
So instead, we are in a digital domain, we have lots of codecs, and everyone needs to do D/A conversions (to support components). The problems people have with HDMI are short-term (hopefully), but the CE companies know that if all they do is serve the bits off the disc, and don't do anything to make the picture better (quality digital/analog conversions mattering in DVD/component land, but not in DVD/HDMI land), there is no room for higher end models. Moving digital bits around is unimpressive, and there are only two parts of the system that convert to "analog," the receiver (for audio to go out to speakers), and the monitor... and now most of the high end monitors are "digital" devices, so no D/A to upgrade, but how they process the signal matters, because eventually YOU are looking at the analog (light wave) output of your digital set.
Part of the reason that we're seeing a massive drop in CE prices is that there is a decreasing benefit to quality systems. If you look at projectors, Panasonic is playing with smoothing technologies to gain an edge, because the convention edge is somewhat neutralized when digital data comes in and then powers an LCD (or DLP) system. Regarding the devices talking, Firewire was the correct technology. What's PATHETIC is that we carry SO MUCH data on the HDMI cable (up to 1080p video, up to 8 channels of 24-bit audio), but no control information. If you want automation, you're stuck with IR blasters (retarded), macro'ing remotes (slow and annoying), or a central automation control that runs RS-232 cables for serial control. The other option is a DC "trigger" where we have the fancy, high tech solution of sending a small amount of energy from device A to B, and B does "something."
On the plus side with HDMI, and cheaper analog to digital converters, we're seeing more receivers that can "upconvert" old RCA Video, S-Video, and Component signals into digital easily. While videophiles may not want their receiver doing video conversion (on the believe that the monitor should... and high end display devices probably do a better job of handling the signal), we're AT LEAST at the point that if you set the receiver to the right input, the "television" is truly a monitor only needing one input, and the trigger to turn it on and off can work. If you want to avoid the receiver based solution, there are plenty of component video switchers (that also switch digital audio, coax or toslink), that autosense what device is on. My dad used to use a receiver with multiple sourcing because he could record a DVD to audio cassette for the car, while running a VCR through the system for the television/stereo, but I don't know of anyone that does that any more, few people convert to analog sources, and they normally do their copying on the computer, not in the AV cabinet with the asinine inter
The reality is that competition drives down margin, not overall profits (something commonly glossed over in economics classes). The reality is that the labels are in for a future of falling margins... well boohoo, everyone in the world is, that's the point of competition. In an extremely competitive world, profits drop as competition emerges, so one can make profits only via moving fast (before the competition arrives), or be erecting barriers to entry.
The labels are entering a period of lower profit margins. They can bitch and moan, legislate to slow it, litigate to recover from it, but in the end, margins are dropping because of competition from other sources of entertainment and pirated versions of their music.
This is not something that can be stopped, but is a natural economic consequence of what is going on. My suggestion is that they adapt to business models that utilize lower margins, instead of wishing that the government will grant them back their fat-cat status.
The problem for them is that they are SO focused on whining, they have blown and missed several key opportunities because of their terror of digital.
Minidiscs: they were so paranoid of people copying, that they avoided this format (by avoiding, I mean not offering cheaper versions that people would buy)... Hell, my Dad routinely copies his CDs to tapes for playing in the car, but the labels sold plenty of tapes to people that didn't want to bother. They could have sold tremendous amounts of minidiscs by supporting them with cheaper priced music. People would have bought minidiscs for walkmen, and I bet Car minidisc players would have shipped, and they might have gotten people to routinely buy extra copies.
SA-CD/DVD-A, they have done NOTHING to promote this high fidelity option, and generally been lazy about introducing music in the format. The music that they released in this format was extremely expensive. Releasing a SA-CD/CD hybrid for a SMALL premium over the CD (say, $2-$4) and people would have bought into the technology. Unfortunately, the idiots in the labels through temper-tantrums about digital copies of their IP, so they wouldn't let the manufacturers transmit the high fidelity audio over the existing toslink solution, and resulted in 6 cable messes, etc. Well, people weren't going to buy new receivers and buy into this attrocity without a compelling reason, and the labels refused to provide it.
Woops, there are two examples of where short-sited fear of piracy (which is a joke, everything is pirated anyway) and people exercizing fair use slowed the adoption of technology that would have let them MAKE A FORTUNE. They could have sold chunks of their archive again.
The other point to my comment on the model is that the days of the megastar making obscene money for their labels is coming to a close. The manufactured one-hit wonder will keep selling fewer and fewer CDs, because people WILL NOT buy a CD for the one song on the radio... for one song, you download it... I hear something catchy on the radio, I check the iTMS, I don't P2P music because I don't steal, but they rarely will sell it to me because they worry about cannibalizing the CD sales... This is a strange way to market product (not sell people what they want), and isn't helping.
There are fundamental shifts in the market, and they need to adapt. There is a LOT of opportunity for them in this market, but they need to get over their fears of people having the ability to use it. CDs being copyable to tape didn't put them out of business. It made the CD more valuable and easier to charge more. The label's perpetual fear of technology IGNORES the fact that they make their obscene profit margins from their archives and people buying new formats. When MP3 took off, decent CD rippers were years off and we all had substandard MP3 collections. If they labels put out PROFESSIONAL grade MP3s, available for download at a cheap price ($5.99/album), they would have sold. Would they be traded? Yeah, but so what, they could
When it came out, it was a cool Mac accessory. My wife had recently gotten her Mac, and was really enjoying using it. I got her a 1G iPod as a present, and she loved it. It was sleak and clean, and OS X was just coming into its own as a sleak and clean operating system. It was something different and fun, and for the tech/gadget freak that was playing with OS X (either techies as a clean Unix, music people enjoying the new operating system, or graphics people complaining about OS X but sitting at Mac's all day, it was a great pick-up. Macs had (and still have) a price premium, which means that their user base likely has some disposable income (I own a bunch of Macs for business, they hold up in production use for YEARS, are priced similarly to similar PCs, but because of a limited catalog, have a premium... i.e. spec a PC, then go spec a Mac that has the same OR better specs, that Mac will have better specs and cost more... if you go the other way, the Mac often costs a bit less, but the Mac forces an "up-sell" because of the limited catalog)...
Basically, wealthy, highly educated, technology-savvy urbanites were the first iPod users. Combine that with their iconic headsets, and they had a brand premium when the Windows version shipped... Without the Mac-first launch, I don't think that the iPod brand would have popped up there... They built a brand premium, and the "available now for Windows" got Windows people that were envious of the Mac/iPod users to buy it... once you got that corner of the market, you had a brand to shift to widespread market adoption.
Remember, it was a premium priced player ($400 was the only model then). Every intro-Marketing course will teach you how BWM had an easier time moving down market with the 3-series than Toyota had trying to move up-market... Toyota had to create the Lexus brand independently to create a premium brand. It is easy for a premium player to create a down-market brand if it is clearly the down-market brand, because people aspiring to the luxury brand will buy-in, if the company keeps their premium separate. Going up-market is REALLY hard.
Look at the Mac vs. PC ads, they are whimsical, but focused on the brand. They push the PC as "an alright solution, and work-friendly," but the Mac is where it is at for creative stuff. To an upper-middle class family, the Mac will make them younger, hipper, and more creative, the PC just lets them get work done. It's a fascinating look at the branding exercise, because for the LONGEST time, the conventional wisdom was "sure, Macs are pretty and good for designers, but PCs are better for getting actual work done." After 10 years of fighting this perception, Apple decided to run with it and say, "sure, PCs are better for getting actual work done, but when you are ready to be creative, the Mac is where it is at." That message appears to be working, because it is positive. Everyone wants to think that they are going to have fun and create things, so the Mac gets pushed up market.
Alex
The IP cartels have forgotten how business works: sell people products that they want at a reasonable price, and people will purchase your product. Yes it is "unfair" that you are competing with "free" pirated competition, but sometimes, you draw a string of bad luck. Those of us in software development are competing against Indian and former Soviet states that might as well be free... Open Source development has expanded from infrastructure to more and more of the software market, and client don't understand the need to do custom work when the free stuff now "almost works as they want."
It's the nature of the market, it destroys people that are standing still. The problem for the IP cartels is that technology used to take decades to eat the market (VHS ate the re-released movie market, but created the home Video market, DVD ate VHS rental commissions, but created the home movie collection), now it takes years. However, if you move fast, you can make money.
Napster made it possible for large swaths of the public to become exposed to non Top 40 music, people traded MP3s around, and it was easy to get a file, but a pain to get a CD, so if you liked it, you bought the CD. Killing Napster opened the market to better P2P solutions. Apple created a pleasant way to buy digital music. The only constant is change.
If I were in charge of the music studios, I'd keep my legal teams on a short leash, harassing P2P enough to push people toward Apple and Microsoft solutions, but not enough to make my customers hate me. I'd use sites like Myspace.com to get my bands out there, and I would crank out new artists. I'd focus less on monetizing my archive with DRM, and sell whatever I can sell. I'd increasing touring, push SA-CD / DVD-A as a higher quality solution. Hit the market everywhere, some stuff will sell, some won't.
However, my biggest change would be my contracting of artists. The current solution, lose money on 9 bands but make a killing on 1, giving everyone giant advances to live like rock stars, playing the celebrity gossip game, etc., isn't working. The one-hit wonder who gets famous flashing the papparazzi is a dead strategy because P2P eats you, but bands with a following make you money. I'd lower advances, increase the artist cut, and get the artists to think like music creators, creating more CDs, and less time playing celebrity. When a band gets discovered, give them money to produce albums, not party it up. There are more music channels (XM, Sirius, HD Radio, etc.), most outlets for videos (Myspace.com, Youtube.com, Google Video, etc.), and more ways to introduce people to music.
Sure, piracy will eat some sales, but it will expose people to more music. Some people may never buy music, but others will if you make it easy. Get product out there, sell what you can, and keep the legal team on enough of an offensive to keep the pirates at bay... however, forget the idea that you can STOP piracy.
Also, STOP making the technology suck. HDMI has proved to be a colossal disaster, it doesn't work right. Havi over Firewire was the easier solution, multiple cables suck (component + firewire or optical audio), but the HDMI situation causes SOOOOO many problems. The technical hurdles affecting your high end customers are killing you. If you want to move discs, get people to WANT higher quality. SA-CD and DVD-A presented a way to make downloaded MP3s of questionable quality less valuable, but you never supported them, and required people to run 6 audio cables because you didn't want digital solutions to take off, WTF!
Stop screwing around, you're missing the fact that pirates attack your low-end, move up market, and just rattle the pirates a bit. You've lost site of your business, and became engrossed with piracy. Put out music people like, and sales will take off... even if the piracy rate hurts somewhat, you can move product. With a minor harassment game, high school and college kids may not buy CDs, but they will after school when they have money, if you have created bands that they love. The market is changes, adapt with it... but in the end, SELL product EVERYWHERE, stop navel gazing and running in fear.
Well, if you figure that the Xbox 360 is 1 year into a 4 year lift span, it's 25% over (if it really sells well, it'll get a fifth year, overlapping with the Xbox-3). Getting XNA games out now, for hobbyists, let's them tweak and expand their development tools, get paid doing it (the subscription fee probably covers the cost of supporting the project, not much of a profit center, but should make it a bottomless pit of costs), and does so without the expectation of the pro shops.
The big development shops wouldn't tolerate things being imperfect, hobbyists will. For the next generation, expect some XNA derived system to be one of the main development environments for the console.
There is a long tail effect with gaming. People buy consoles for the oddest reasons. If you are a niche system like the Xbox was last round (people wanting HD games, or the absolute most powerful system, not looking for bulk of games like the PS2 was), you can suffer. If you are a shop making an innovative game, that won't sell HUGE numbers, only the PS2 had the volume (unless you were using a Nintendo character license, then the Gamecube was a compelling system) to sell.
Things like puzzle games are popular, light on the graphics, and can be implemented cheaply. If Microsoft figures out a way to sell $20 games online (taking $5-6 as the publisher cut) without involving retailers, then independents will flock to the system, Microsoft will make tons of money, and they'll position themselves for huge market-share gains.
However, the XNA, at this point in the Xbox 360's lifespan, is simply a test. Real development houses with 1-year + dev cycles wouldn't adopt a new system now, but hobbyists and indies will, and what works will roll into the Xbox-3's dev kit.
Alex
It's kind of an interesting example of a theoretical economic model happening in reality.
One of the models is a natural monopoly with no monopoly pricing power. This normally doesn't happen in reality, but Craigslist MIGHT be the perfect example of it.
It assumes that because of economies of scale (where the point of diminishing returns from increasing marginal costs exists on the curve outside of full market... essentially, fixed costs get spread out, but we assume that marginal costs decrease for a point, then increase... this historically happened because you first farm the best land, or get the easiest raw materials, but in technology terms, building a site for 100 users is easy, 1000 not to bad, 10000 a bit harder, etc., as you grow beyond a "single shared server with MySQL" to a dedicated machine, to a server farm, the complexity ends up making the cost/user increase at a certain point... when your theoretical website goes beyond what a mainframe can power, the costs of growing become higher). So we know that the natural market will yield a single provider, because their costs will ALWAYS be lower than if there are two players.
However, in this scenario, the market is still competitive if barriers to entry are 0. If the monopoly player collects a monopoly rent by increasing their price, a competitor would enter and undercut them. In that case, we see a market where there is a single monopoly player, but pricing that is the same as the free market would provide.
Take Microsoft in the DOS 2.x - 3.x days. Microsoft was the only provider of operating systems for IBM-compatible computers, but their prices were very low... what you would expect in a free market situation. Once they attempted to collect monopoly rents, you saw the emergence of DR DOS undercutting them. In fact, Microsoft bundled Windows 4.0 with DOS 7.0 BECAUSE the emergence of competition in the DOS space was forcing their prices to stay low enough that they weren't able to collect monopoly rents on the DOS side. It was only in Windows-space, where the complexity was sufficient to prevent a competitor from introducing an identical product, that Microsoft was able to extract monopoly rents and grow into a large, profitable company. There was no technical reason to not ship a Windows 4.0 that ran on top of DOS (purchased separately), in fact, you could boot in DOS mode, then run WIN.EXE (or WIN.COM, I forget, I just typed WIN) which would launch Windows. There was no reason that you couldn't use DR DOS with Windows, other than Microsoft bundled them to push competition out. By making MS DOS "free" by including it with Windows, they eliminated competition in the DOS space, and therefore there was no reason to buy DR DOS instead of Windows 95 with free MS DOS, which is how Microsoft FINALLY got people to migrate from DOS to Windows, which let them create a migration path to NT.
If Craigslist were to start charging monopoly pricing, a new, free competitor would enter immediately. This is part of why even for the listings that they charge for, they only charge a small, nominal fee. If prices were to reach a sufficient level, a new, Joe's List, would take over their market.
The press isn't anti-government... it's gotcha and headlines. It sometimes appears anti-government, but it's equally anti-corporation, anti-America, anti-suburbs, anti-trade, anti, anti, anti...
It doesn't have a "liberal agenda," it's just a bunch of small minded idiots that think that they are smarter than the rest of the country. Think back to college... did you ever think that the journalism majors were the impressive brains? I bet they all thought that they were.
Being distrustful of government isn't even helpful. Being trustful of government isn't helpful. Intelligent, investigative reporting is helpful. As Reagan said, "Trust... but verify..." Don't assume that the government is lying (or telling the truth) but do your own investigation... OTOH, that would require not shutting down investigative reporting and foreign offices... I guess it's cheaper to repeat what government spokespeople say and the "opposition" party and call it a day...
Alex
I'm a fascist? Did I say that freedom of the press should be curtailed? Did I question the rights of the press to do what they are doing? I am suggesting that post-Watergate, the press's attitude with respect to government SUCKS.
I don't want gotcha, I want factual reporting. I don't want blind faith in the government, or blind faith in opposition. My point is that I find the gotcha games unproductive in peace and dangerous in times of war.
If the press's freedom to question the government is valuable (which it is), it is no more valuable than my right to say that they are a bunch of imbeciles that aren't investigating usefully. Alternating between parroting the government's PR and then challenging everything to play gotcha is not balance, it's idiocy. We don't need a press to parrot the government's PR, give the White House a dedicated channel and call it a day, and save everyone the effort. We also don't need the press to value "gotcha" at the expense of the government's success.
The Pentagon, like all large organizations, is so tied up in red tape that its massively inefficient. It may need rules to manage at that level (large organizations value reproducability over creative but inconsistancy...) it weeds out the good and the bad and guarantees mediocrity.
The world is not about "conservative vs. liberal viewpoints," but about situations and their needed solution. Ideology gives one a framework and philosophy to evaluate those situations, but situations must be evaluated.
Your post put words in my mouth to have a straw man to attack, then started calling me a fascist, which is rather rude. Stop watching talking heads spew garbage, and learn to evaluate the myriad of problems facing you, your family, your community, and your country.
Does our press corp believe that it is their job to report what is going on, or look for examples of stupidity to attack. Try watching the Daily Show, which is the most brilliant satire of the way news works. His clips out of context (and often outside of cronological order) demonstrates the absurdity of how our news media operates. While it's more extreme (because it is satarizing the media), it illustrates how finding ways to attack people isn't "questioning government," it's taking the easy way out for ratings.
Look at your method of arguing with me... you ignore my points, and try to paint me into an ideological box so that you can attack the box with pre-prepared talking points. Your attack on my post illustrates how bad discourse has gotten, because you're mimicking our awfully poisoned debate.
Alex
And if the officers sent in a requisition, and someone pushed it through, I can see the headlines:
Pentagon spends millions on children's toys
Military awards no-bid contract for toys
Millions of cans of toys bought, unable to track
Military fails to provide tools to troops, uses toys instead
You are 100% right about the edge of irregulars being able to use whatever works. However, clearly our troops are just as smart and figured out how to improvise, and away go the cans of silly string. So it's being done voluntarily by people on the home front, so what, that just makes them wonderful patriots. What is with the statist notion that it is only okay if it goes through taxes and government procurement.
The biggest problem is that we have two generations of reporters that believe their job is to undermine the government, and that that is an example of freedom of the press.
Take the body armor issue... Our troops have some older body armor, and there is a dispute as to which ones to replace. If the government replaced EVERYTHING, we'd be screaming about waste from throwing out our perfectly good 2 year old body armor that we spent billions on. In addition, the guys in the cities don't want the bulkier armor, and were refusing to wear it, so the Pentagon, sick of the bad PR, REQUIRED the use, even for units that didn't want it.
The anti-government press goes beyond reporting problems so that they can be fixed, and tries to play gotcha with our government. So government officials play CYA, instead of doing the right thing. It's a HORRIBLE mess, and it will take more than an emergency requisition of silly string to fix it.
Dada21 wrote, "My recommendation? Have one day a week with NO technology -- no TV, no radio, no iPod, no laptop, no cell phone. Try it.
:) 2 days to go this week... :)
Careful with your recommendations on this forum, you might get attacked for being a religious person advocating things like then...
From Exodus, "But the seventh day is a sabbath to the Lord your God; you shall not do any work--you, your son or your daughter, your male or female slave, your livestock, or the alien resident in your towns. For in six days the Lord made heaven and earth, the sea, and all that is in them, but rested the seventh day; therefore the Lord blessed the sabbath day and consecrated it."
Just teasing, your suggestings regarding burn-out are on target. A day away from technology (cel phones, email, etc.) and with the family is awesome, and I couldn't function without it... just pointing out that it's NOT a new idea... it's an idea as old as the universe...
Alex
Check out my agent, 2hsa.com. They had a bunch of options for small businesses, etc. Basically, they recommended a PPO that was like you said, 20% copayment... a la traditional insurance from the 1980s. However, we hooked up for an HMO, with a max out of pocket. When I did it two years ago, there weren't many plans like mine, and people weren't really liking them... hated the idea of the restrictions of the HMO while paying out of pocket. Any year now I'm going to look into better options, but my primary concern was NOT having a scenario that wiped me out... so that's what I found insurance that covered.
Alex
You're right in that wealth is created by people actually doing the process. Providing a good or service that someone finds valuable creates wealth. In addition, certain commodities are inherently valuable, so the extraction of them creates wealth by the amount exceeding the cost of extracting them.
Ayn Rand makes a lot of good points on where wealth is created, but the simplification that I made was true to a point... Wealth is the increase in your assets over your liabilities.... your Net Worth on a personal balance sheet. If through selling my labor for $100, I only need to spend $80 to continue, I have added $20 to my wealth.
Sure, you can do it on your own, come up with something unique, and create your own wealth (we're not following GAAP, value your own business assets using whatever fair metric you can), but that's not the point of this exercise.
The point I was making, is that there are SEVERAL types of retirement accounts for businesses and self-employed individuals, all with different contribution limits, and it's not clear what public service these tax shields provide. The goal of the tax-incentives for retirement investment into publicly available commodities is the social benefit of not having a bunch of indigent elderly people that choose to vote themselves wealth at the expense of the Republic.
However, why on earth is the SIMPLE IRA capped at 10k, but the 401(k) at 15k? This used to be because of the compliance costs of the 401(k) and the means testing to avoid being top-heavy, but now the "safe harbor 401(k)" let's small businesses run a 401(k) with 401(k) contribution limits and no means testing if they follow the same guidelines as the SIMPLE-IRA, only the 401(k) requires lots more paperwork that is a pain for any business that can't justify an HR person or enough HR time to handle it.
Why do we have strange accounts without a contribution cap in dollars, but percentage caps, but are designed to only work for the self employed (have to put the money in for ALL employees pretty much eliminates doing a 25% retirement plan, and others only are allowed for family-run businesses, no employees other than spouse or children).
A simplified retirement system (Bush's proposal or trial balloon was consolidating all the IRS code into two accounts, Individual and Corporate, each with a 15k limit I believe, and there was also a lifetime savings account that had a smaller limit of around $5k/year, but could be taken out whenever, basically to encourage additional savings because you could use it to save for a house, or a car, or whatever). The idea was to provide standardized guidelines for businesses, to eliminate top-heavy testing and all the other garbage to encourage small businesses to take on retirement accounts, and large businesses to stop needing to spend a fortune on compliance.
The public markets allow people to invest small amounts of capital into the ventures of others, who take that capital and invest it (true the public markets are a secondary market, when you buy a share of IBM, no money is actually placed with IBM, but IBM raised money through their IPO and secondary offerings at a higher level because of this public market, so it's abstractly the same thing, and when you buy shares off other investors, this money is freed up to be deployed elsewhere). Most people don't have the willingness to create wealth independently, but by leaving below their means, can create a small stock of capital that can be invested in small amounts into the businesses of others, helping create wealth by deploying that capital effectively.
The issue with social security... even if we pretend that the trust fund is real and you are contributing to your future retirement (which on an accounting basis is sort of true, but isn't true in a cash manner), it doesn't create wealth because you have no ownership of that capital. While you get an annuity benefit of sorts at retirement from the SSA, it has no cash value because you're not allowed to sell it. It isn't
FSA is a flexible savings account. It's a corporate based account, where you put money aside, and can spend UP to the FSA limit and get it back. However, it's a company account (not personal), and if you don't use it, the company keeps the difference. That's the incentive for the company to offer FSAs...
The HSA is a personal account. It's yours. You put money in, your employer can match, but it's your account. There is no use-it-or-lose it. It's like an IRA, only you can take money out tax free for medical. After retirement age (I believe the same 59 1/2 that IRAs have, but it might be different), then you can take the money out, pay taxes on it, and use it however you want.
The weird thing is combining the two. You CAN do it, but the laws are supposedly tricky. My wife and I were considering the option of her hopping on my insurance, putting the 4400 family amount in the HSA, and then putting $1k or so into her FSA through work. In that case, on our first $1000 of the year, we pay cash (not withdraw from the HSA), and get reimbursed from her FSA. That way, we can keep the HSA as an extra IRA unless we need it.
However, you have to be careful if you are doing it, but I think that it's because of double-dipping. The FSA can cover un-reimbursed medical, as well as child care and some other things. The problems would lie if you pay with your HSA debit card, and then claim it as un-reimbursed medical.
There are a lot of tricky tax games with health care... the thing that I find stupid, is if the feds want medical to be tax free, why not just make it a schedule A write-off, instead of a schedule A write off exceeding 7.5% of AGI (or MAGI, whatever). I don't really get why I can write off 100% of my health costs if I fill out a lot of paperwork, but it's done with post-tax income otherwise. Similarly, why the hell can I not write-off health insurance on schedule A, (or schedule C for the self employed... I don't think that you can, but who knows), but a C-corp or S-corp can... the whole system is overly complicated.
Okay, I had my deductible/HSA contributions off, it's $2200, not $2400. I also have the HMO plan, not the PPO, which means jumping through hoops for referrals for specialists, but also means 100% coverage. I checked my benefits, and my max-out-of-pocket is my deductible of $2200. After that is met, I have $0 copays on everything (except non-routine equipment, which has another $2000 deductible).
In addition, on prescription drugs, I get the Aetna negotiated rate (and the same things for medical visits, I pay the HMO negotiated rate). So, I do have coverage for the bad situation. However, drugs don't count against my deductible, as I went without the drug plan to keep costs down.
I'm sure that in a bad situation, some stuff will be uncovered, and I could end up with a higher bill. However, knowing that I have $3500 currently in an account for medical purposes (money that was essentially free, because the high deductible plan + monthly contributions to the HSA was about the same as the same HMO with normal co-pays/deductibles), makes me more comfortable than I would with a plan with a $500 deductible and something that I need to track.
Basically, my concern is the major event. It's not just cancer or heart attacks, it's ANYTHING non-routine. However, the cheaper premium COMBINED with my placing those savings in an HSA leave me MUCH more comfortable that if the unfortunate arises, I am financial prepared for it. If I carried more traditional insurance, I would be LESS prepared.
Basically, I accept the routine care risk, and in return, I have a much larger financial cushion for the non-routine. That to me is a happy tradeoff. Sure I'm on the hook for a few hundred dollars if I need medical care, but that to me is a much easier scenario to cover than the major situation.
OTOH, one of my former employees decided that she hated our package (despite that I matched contributions to the HSA, which everyone did), and complained that she had to put off medical care because it would have cost her $100 or so because our "crappy insurance" didn't have a $15 co-pay. I stared at her and asked about the thousands in her HSA that I had deposited since we established the plan... well, she didn't want to use that.
She was like the other poster, she couldn't handle the idea of shelling out for routine care. Never-mind that she would have shelled out $450 or so in the time she put $2200 in the account, she couldn't handle spending that kind of money. I think that its irrational, but I understand why people respond that way. OTOH, our small business was able to GIVE everyone insurance (small groups need to have 100% participation, so they paid $0 for the coverage), which I could NOT have done with a traditional plan. And, by matching the HSA contributions, everyone did that to (to get free money), and I knew that my employees were covered, except the woman who wanted to be mad at me.
You are right, things change over time, and my health care needs will change over time. But in my late 20s, I don't have routine costs. The thing with the high deductible plans that I like is that I KNOW my downside risk (the high deductible), and the paired HSA (part of the medicare debacle was the HSA creation) is that I have a debit card in my wallet that as more money in it now (after two years) than my deductible.
I carry insurance not to regulate my expenses (like the other poster does), but to shield my downside.
In fact, I propose that this insurance is BETTER for managing costs. A traditional medical plan cares 80% coverage, meaning if I have something bad happen to me and end up with a $40,000 medical bill, I'm on the hook for $8000. With my high deductible plan, I'm on the hook for $2,400.
The question is, is routine medicine an insurable event? Should it be. I suggest that regular things (for example, birth control, which is controversial when plans DON'T cover it), isn't really an insurable event. We've basically decided that the insurance companies should regular our medical costs, and we'll hand them $500-$1000/month and they are on the hook for our costs. This makes insurance much trickier to price.
I agree with you that in 10 years, my medical needs will be VERY different. However, what is nice about this plan is that my "medical expenses" are $1400/year for insurance, and $2400/year in my HSA, which means out of pocket $3800 (all pretax, because it's done through my company), but at the end of the year, I have $2400 in my account. If I cared traditional insurance, I'd be spending about $3600/year on insurance, and in these healthy years, it all gets kept by the insurance company. If I roll snake-eyes, I just lose my $2400 that is socked into the HSA, but in other years, I keep most/all of it. Ten years from now, I'll have a stockpile of medical related cash in the HSA, that I can use to cover all these medical related expenses.
I really don't see a downside to the high deductible, HSA compliant plans. They are cheaper because the insurance companies are running normal actuarial tables, and only charging me for their "risk" of something catastrophic, instead of what they expect me to use.
Alex
Right, there is a convenience of not having to worry about it. I have a lot of accounts to track, none of which are that big, because I try to take advantage of these tax sheltering opportunities. It's a real headache, and makes it harder to figure out what is going on. The net effect is that we're leveraged to hell, our "net worth" isn't that high because huge liabilities that almost match the assets. The theory being that in the long run, my assets are returning a few points more than my liabilities, so I keep the spread.
The problem with Bush's ownership society push was that people want, set it and forget it. All these accounts (IRAs, Roth vs. Traditional), 401(k) (Roth vs. Traditional), 403(b), SEP-IRA, Simple-IRA, Keogh, etc., confuse people, so they do nothing. There was talk of a simplified retirement planning system, where you would have a business retirement account and a personal one, and consolidate this big mess, but nothing came of it.
The fact is, most people would prefer the "good ole days" which only really applied to the WW II generation, where you work for a company for 40 years, pay your 30 year mortgage off by retirement, had health care covered, and when you retired, collected your pension and social security. When you died, your house was sold and your kids split the sale, and life continued.
The odd effect of this was that nobody obtained "wealth" because they simply had lifetime income streams.
The idea of the ownership society was that instead of just getting payments, you'd accumulate wealth. People would earn returns off this wealth. The problem is, during your lifetime, there is no benefit to this, you just get more headaches. The difference is that when you die, your heirs would receive the wealth, because you owned assets, instead of getting a stream from the pension fund.
One of the things that the right-wing think tanks were proposes was this "neo-conservative" (economic policy, not foreign policy) idea where the government would encourage you to build wealth, but support things like annuities to make it easy. If people convert all their wealth into an annuity at retirement, they keep their "paycheck," which makes things easy for them, but then they didn't really get any wealth because it all goes to the insurance company. Which is why you're seeing the business publications running models where people annuitize part of their wealth at retirement.
The fact is, people will glad trade some "expected return" for a stable return, which leads to no wealth creation. Of course, the politicians turned it into wedge issues, on the theory that the more people had in the stock market, the more they were likely to vote GOP, so the GOP pushed for replacing government guarantees with stock ownership, and the Democrats opposed it. The social security debate was such a travesty because it ignored the actual effects on people, and was only based upon the GOP wanting people to own stocks so they'd become more conservative, and the Democrats wanted people to not own stocks because it would cause them to vote GOP. The joke of the matter was that since it required buying an annuity at retirement anyway, there was no wealth being created, it was simply moving it off the government budget.
For people to acquire wealth, they have to own assets. But people don't want assets, they want the income that the assets generate. So somehow, the market will need to capture this, which you are seeing, as more and more 401(k) plans offer automatic "annuitization" at retirement. In addition, for people to gain these benefits (individual investments with a historic return of 10%, compared to pension funds with a historic rate of return of 8%), they had to take the risk. Even though the average person would be better off, and some would be much better off, some people would be losers.
How much potential "gains" would you trade to know that you never have to worry about housing, food, healthcare, and education. For most people this is a lot, which is wh
No question, free flow of capital leads to creation of wealth. As the article pointed out, establishing banking in poor countries would help. How much of middle class wealth is tied to home ownership? A generation ago, you financed 80% of the house, 10 years ago, 90%, now, 97%-100%. The existence of a banking system that establishes credit gives people the ability to finance assets. If assets will generally grow faster than the interest on the credit, then the people gain wealth simply by having access to capital.
.25%), and the 10 year treasury note (4.5% +/- .5%) is only 2%... That's not a huge premium for random guy compared to the federal government.
The collective wealth (whether rich individuals investing through hedge funds, a pension fund, or individuals in their 401(k) mutual funds) gets invested. It's no direct (rich guy loaning me money), but out secondary markets reduce transaction costs and make these transactions occur. Take home loans? Banks used to loan money and hold the loans, which meant that a local economic downturn resulted in a housing correction, caused loans to become upside down, people to default, and the bank to collapse. Now, mortgages are "securitized" and sold off in bundles to investors. This diversification makes the overall risk lower, which has dramatically reduced interest rates... The difference between a 30 year prime mortgage (around 6.5% +/-
This access to capital creates the massive wealth in the US. For fun, Google's market cap is $150 BILLION dollars... that's a lot of wealth created "out of thin air." All the wealth creation that goes on in the US is truly staggering.
So yes, wealth is created, and those that have wealth benefit from it, so the wealthy benefit disproportionately from a stable society. The question however, is which of these taxes are going to "creating a stable society" and which are going to "buy votes from dependent people." One of the reasons that the GOP pushed so hard for welfare reform was that the effect of the old system was a permanent underclass. Since this underclass had a higher birthrate and shorter generational times (first child @ 16 compared to 26) was causing this rapidly expanding class that wasn't going to get out (if you are one of 5 kids born to a single mother on welfare, you have a bunch of strikes against you... while some will make it, the overwhelming majority will stay in that underclass)... However, it was creating a dedicated group of Democratic voters (at least that's the political theory, in reality they didn't vote in large numbers).
The concern is that a good chunk of our tax dollars go to buy votes or campaign dollars... Both sides do it, the corruption of the GOP was staggering, where $1 in campaign contributions had an expected return of $20.
Roads, law-and-order, sanitation, etc., these are all costs of a stable society, but these are costs generally provided by local governments off of property taxes. The collective security is a big chunk of the federal budget (as is interest payments), but large chunks go to strange items. Social security was designed to get old people out of the work force to lower unemployment (weird situation was economic activity decreases massively as unemployment goes up, where as you would assume it was a factor of employment and wages, not number of people in the work force). There is a lot that taxes go to that DOES NOT contribute to the stable society that the wealthy benefit from, and in some ways goes to tearing it down (NEA, the bizarre helium storage for our non-exisant balloon fleet, and other strange parts of the budget).
That is where some of the objection comes from. I haven't seen anyone complain that property taxes (that mostly fund police and schools) hit the rich to hard, it's generally the income tax. Also, thinks like income and capital gains taxes don't hit the "wealthy" (who make their money off muni-bonds, etc.), but rather the upwardly mobile middle class.
Two upper midd
I carry a high deductible plan. My deductible for the year is $2400, I don't have a prescription drug plan, etc., but my monthly premium is $119. My wife and child are on her insurance with reasonable copays, etc., and it's over $500/month for the two of them.
For me, I never go to the doctor because I'm healthy, I should start going for annual checkups, but never remember to. However, even with annual visits (which are free or cheap, I forget, because they want you to stay healthy), I don't pay much for it. Why do I carry insurance like this? I don't want a health maintenance plan, I want insurance. If something bad happens to me and I need to be hospitalized, my downside risk is covered. It's much cheaper because I am responsible for routine stuff... My car insurance doesn't cover oil changes, why should be health insurance cover routine medical care?
The nice thing with the high deductible plans is the HSA incentive. I can put up to my deductible into an interest bearing account (I put pre-tax dollars in) that can be used tax-free for health care costs. So I am insured for expensive stuff, and I have already saved up to cover the deductible if I need to use it. It's a win-win for me.
Insurance is expensive because people with insurance get a lot of medical care that they might skip, but once you are paying $800-$1000/mo for insurance, there is no way you aren't getting EVERYTHING looked at.
The question with the cheap coverage is what did it cover. You said it didn't cover what you needed it to, but now you're paying an extra $120/month. Do you really go to the doctor's enough to cover that extra $1400/year in premiums? Would you be better off with a cheaper plan and paying for "what you need"? Something like 80% of Americans use less than $1000 of medical care each year. Would that $79 plan cover you if something bad happened?
I think that people worry to much about the small parts of health care, and don't focus on what they are really insuring against. What's great for me is that this HSA that is building up can be used if I need something expensive down the road, and that to me makes it reasonable to pay $50-$100 if I need routine coverage.
Alex
Having grown up in South Florida, Hurricane panics always seemed amusing. In the almost 20 years I was in Florida before leaving for school, we had 1 decent Hurricane hit the area. Then, when I was away, the state got smashed in one year with 4 storms, and 2 the following year.
All of a sudden, when I moved back here, Hurricane season was serious, and people acted like a "normal" year had 2 Hurricanes hitting us.
The fact is, we don't have much data on Hurricanes. People made a big deal about hitting the Greek Alphabet, but the reality is that so many storms get named now that wouldn't 10 years ago. We've only had satellite coverage over the Atlantic for about 45 years, and how much attention we paid to storms out there is questionable.
Normal 15, 30, 50, and 100 year cycles (I assume that there are a bunch of things operating on normal cycles) are undetectable until we have more data. The problems that I have with the climate change debate is that it is really hard to separate out what is human caused vs. natural cycles because we don't have much data.
If we had 30000 years of satellite data, then sure, this would be easy. However, we have WAY MORE data on the past 35 years than we do on the past billion years. It's very easy for alarmist psuedo-scientists to take scientific data, find a peak and a valley in the data, and draw alarming results. The biggest concern with climate change is the possibility of positive feedback loops, those are scary. However, it is very likely that there are MANY negative-feedback loops that will help mitigate things.
To construct a scientific experiment, whether mathematically or otherwise, requires holding other variables constant. In the real world, these variables are NEVER constant.
We had TWO years of increasing Hurricane activity, and then by plotting a line, we saw WORST SEASON ON RECORD... however, an unrelated system, El Nino, caused a below average season... There is simply too much operating for any predictions to be worth anything.
The worst part is confirmation bias... Hot day, bad storm season, etc., and liberals blame global warming... Never mind that Global warming refers to a 1 degree Celsius historical shift and a 1-5 degree shift in the next 100-150 years... however, this again assumes that current trends continue. If temperatures raise, other things will kick in that may be positive or negative feedbacks... people will shift their actions in warmer environments, and we'll see what it does. Predictions suck, because external factors pop up.
In fact, if things get hotter globally, areas that people go to to experience heat will likely decrease economically (Florida tourism will take a hit), which may make the economic costs of hits to that area MUCH smaller than predictions would say because other things are NOT equal.
In the 1970s, car seats were small and compact. In the 1970s, pre FMLA, there was no generally accepted 3 month maternity leave, so normally really small kids had their mother at home.
In the 1970s, airbags didn't make it dangeous for kids under a certain age/weight to right in the front seat.
In the 1970s, carseats could ride in the front OR back... now it is back only, and facing backwards with little kids.
In the 1970s, putting a carseat in the back-middle didn't block the two seats on the side, now it will.
The fact is, the car manufacturers and child safety manufacturers have adapted to A) a change in the legal requirements, B) more litigation, causing car seats to be slightly safer, but 85% of them are installed incorrectly, so they are on average less safe for the kids, but safer from law suits, C) adapt to a decrease in family size.
In the 1970s, 3 kids was normal. In the 1980s and 1990s, 2 kids was normal. Although family sizes are inching back up, anyone with 3 or 4 children will struggle with current cars unless getting a mini-van.
Alex
Gaming involves viewing output on the screen, and doing things on the input device. A different input device means a different game. Making a game for PS2, XBox, and GC (a la Madden Football) is just a matter of porting to the different hardware (straight-foward, regardless of how time consuming) and remapping controls.
Making a game for the Wii requires rethinking the game because the way the user interacts is very different. Just like Console and PC ports require some fine-tuning (keyboard + mouse is different than controller... you couldn't straight port World of Warcraft to the console), a Wii game will require a different gaming process to take advantage of the hardware... including the controller.
Porting to different chips is "easy" because you just throw programmers at the problem and it goes away. Porting to a different interface system is difficult because you need to rethink elements of game design.
I agree that Nintendo is smart on this system... keep out of port-land with a different controller, keep the system simple to lower development costs, and stay out of head-to-head competition.
Companies that wrote games for any of the last-gen systems could release them for other systems simultaenously or after exclusivity ran out, the Wii requires that the Nintendo version be unique. That gives Nintendo a unique value proposition. Deciding between Xbox + Madden or PS2 + Madden comes down to "cost" (or benefits of having the system later). The Wii is so different that people that want that system will need to buy a Wii and the Wii games.
That said, if the Wii shipped with a "game cube" controller and made it a way to build games for both, they might have been able to snag more by being the uber-system (both types of games), but that might have discouraged Wii-style games, so who knows.
Alex
I remember reading about the "victory" of the pro-science anti-religion crowd, where they got a school board to not only fight back the religious assault on evolution, but to actually prohibit any questioning of evolution in the classroom... I wanted to cry...
Science REQUIRES questioning. Elevating scientific theories to dogma isn't science, it's religion. Prohibiting the questioning of a scientific theory undermines the whole point of science.
While I'm not terribly approving of the Church's historical stands on research that contradicted their religious views, I think that the anti-religion crowd has adopted scientific evidence that undermines a fundamentalist reading. Interesting, in Genesis and the Big Bang Theory and MIT educated scientist and Orthodox Jew, has been working to reconcile the teachings of the Torah with scientific knowledge, based upon the assumption that the two are in-sync, and whenever you think that they aren't, one is being misinterpreted.
The fact is, the religious world isn't as one-sided as Slashdot portrays it, but the anti-religious crowd is risking turning themselves into what they hate, a close-minded society that is as dogmatic as the medieval Church.
Sony has a built up brand, people want it... (I've normally only owned Nintendo systems, but I can appreciate that the PS1 and PS2 had HUGE markets)... but they can't get product out the door. To win the marathon, Sony needs to make as many sales as possible to people willing to pay high prices, and figure out how to get manufacturing costs down as they lower price to sell more units... first sell to everyone willing to pay $500, then $400, then $300, then $200, etc.
However, Sony will be able to keep selling units for top dollar, which will help them, because demand is so high... but they can't supply the market.
Nintendo appears to have figured out how to get units out the door. It doesn't matter that 2x to 3x the people want a Sony system as a Nintendo system if Sony can't get them off the line and into stores. Nintendo will sell there demand, and some will substitute a Wii for a PS3. Sony blew this launch BADLY. They may win this round, they may make money, they may pull off a lot (they have a LOT of Brand Value), but they screwed up manufacturing.
If Nintendo keeps manufacturing units and selling them, they will sell games and make money. Some third parties may sign up (if you want to launch a game for next Christmas, if Sony doesn't fix its manufacturing problems by mid-year, Nintendo may be a real option for them). The interesting thing is that Nintendo's system is SO different, it isn't straight ports that will work. Last generation, game companies could switch their target system around without much re-jiggering, but Nintendo's system requires a completely different approach because it is so unique.
However, Sony blew the manufacturing... marketing did its job, but they didn't get product out there. I expect Microsoft to be the BIG beneficiary of this, as Sony and Microsoft are much more substitutable (similar hardware, similar controllers, similar target markets), but Nintendo will find itself fighting in the normal market, not just a niche...
Interesting thing as well, Nintendo didn't overspec their system, they may have underspec'd it. That means that they may be able to get costs WAY down. If Sony's botched launch delays games (because nobody wants to sell games to a dead market), Nintendo may be able to keep moving systems and get the costs down fast. If that happens, expect Nintendo to start selling to hardcore gamers because if they can get a $200 package with 2 games out within 24 months, hard core gamers may pick one up to augment their Sony/MS gaming with Nintendo's unique offering.
Nintendo executed, Sony didn't. Kudos to Nintendo. Sony, get your divisions back in sync.
Alex
Top selling Xbox game, Halo 2, 7.55m units, next top selling game, Halo, 6.44m units.
While the top sellers of all time are classic Gameboy and NES games in general, that was when Nintendo monopolized the market and restricted the variety of games.
The top selling Gamecube Games are:
Smash Bros Melee, 6.1m
Mario Kart: Double Dash, 6.01m
Super Mario Sunshine, 5.56m
So, the Halo franchise moved almost 14m units in two games, and the Mario Franchise moved 17.57m.
Granted, the Mario games used 3 games to do it, and Halo only 2, but my point remains the same. While the two Halo games outsode the top Mario games by between 10% and 25%, Nintendo clearly did better with their top franchise than Microsoft did (and that's without counting all the other Mario derived games on the list).
The Xbox outsold the Gamecube by a long shot, and the Gamecube's top games were competitive for top games. I think that it demonstrates that while Nintendo can't print money like they could in the NES games, they still have a model that moves a LOT of units.
Alex