Effort and Value

The definition of the American Dream has been stated in different ways. But, one way or another, one aspect has been boiled down to, “If you work hard enough, you can do anything!” I’m beginning to realize that there’s a level of common sense embedded in that thought. There’s a presumption of the limits of the hard work it speaks of that will see you through. That common sense isn’t so common anymore. No, the days of rewarding effort regardless of accomplishment and the sports leagues where everyone wins have diluted this message into something that is actually destructive. It’s now been watered down to imply that working hard at anything will guarantee a reward.

That difference may seem subtle, but it’s huge. This is the difference between effort and value. If I were to spend eight hours digging a ten foot hole in my backyard, how much would you pay me? Those of us with half a brain would recognize that I’ve done nothing to earn payment. A hole in my backyard has zero value to anyone else, so nobody will pay me for that. But, there is a wide swath of thought in American society that the mere exertion of effort deserves a reward. If I spend eight hours doing back-breaking work, I should be paid! The key link in the chain that is missing is the question of value. You can work yourself to death doing things nobody cares about and you will never earn a dime. The effort is not what pays off, it’s the value of your labors.


How valuable is this to you?

The lack of this knowledge has led to some situations that would be laughable if they weren’t so sad. Some feel they’ve figured out the loophole: work hard at what you love and the rewards will roll in, right? Well, that depends. If what you love is collecting and categorizing Star Wars action figures, then there may be a small minority of people who will appreciate your efforts. And, there may be an even smaller minority of people who will pay for the results of your efforts. But, you have pigeonholed yourself into a “profession” with very little value. You cannot demand that the universe increase the value of your choice. It doesn’t work that way.

Now, if your passion is repairing cars, then you get very different results. If you love working with engines, rebuilding carburetors, and adjusting brake pads, then you are generating great value to society. A huge percentage of people have cars and vehicles that need repairs. Your passion will be in high demand and you can earn great rewards. Work hard at THAT passion and you could very well become independently wealthy! The effort is the multiplier. The value is the starting point. If you start at zero, the multiplier doesn’t do much for you.

Matt Walsh recently had some great insights into the mindset of people who argue that they won’t work hard because they’re paid so little. He points out how the hard work comes before the reward. That’s absolutely true. But, even before the hard work is finding out how you can offer value to your employer or your customer. Without the value, all the hard work in the world is pointless.

Please do not misunderstand me as assigning value to the person involved. We are all equal in God’s eyes and have equal value as human beings. What I’m describing is a matter of economics. The passion you pursue and the work you do has some value to other people in the world. If your work has no value, don’t expect a reward. If your work has great value, expect a greater reward. It is certainly the case that Christians and others may choose to do work that has lower value to society because it has great value to God. That’s praiseworthy and admirable. But, notice, that’s just a different measuring stick for value. At the end of the day, it’s still about being rewarded based on the value of what you are doing. And in every case, the value is determined by someone else. You do not get to determine the value of your own work.

Let me say that again: You do not get to determine the value of your own work.

So, spare me the sob stories of racking up hundreds of thousands in student loans only to find that there are no careers for owners of degrees in Social Justice and Gender Studies. You must have some level of intelligence to enter college, so how hard is it to do a little logical analysis of the value of those degrees? As I entered college, there was still a feeling that any degree would pay off in the long run. The higher starting salary would build over your career and be well worth it by the time the loans paid off. That changed as I was paying off those loans. I would still vouch for the value of my degree, but that’s because I picked a valuable major: Computer Science. I work in an industry where there is a high demand for developers. My skills have value. That same cost for a degree in history or literature would not have made sense. There is a need for teachers of these subjects, but not as much. Again, this is not about the value of people, but the value of your work to the rest of society.

By all means, find your passion and work hard to fulfill your dreams. But consider the value of what you do. If it’s valuable to society, then you can expect to be rewarded, if you work hard at it. If it’s valuable to God, you can expect to be rewarded if you work hard at it. If it’s valuable to neither, don’t be surprised when you find yourself broke. Effort is not the same as value.

The Next Phase

On June 2, 2010, we will be celebrating the transition to a new chapter in the life of our family. David will officially graduate high school. I believe this is an even bigger family transition than most others might experience because it feels like Stefanie and I will be graduating, too.

From the day we first decided to homeschool David, we had always planned to do so through high school. Sure, we had moments when we questioned our abilities or wondered if he was missing something crucial. But, each time we came to the conclusion that this was the best situation for him and our family. We have no regrets about being his primary educators for thirteen years. But, we have no illusions that we would have done as well without God, either. It is because of His strength and wisdom that we stuck to it and were able to guide David to where he stands today.

The result is a mature, bright young man who is ready to take the next steps into adulthood and to start building his own life. He will be going to Portland Community College in the fall while continuing to learn and grow as a musician and sound engineer with the fantastic staff at our church that has taken him under their wing.

The training wheels are coming off, but we will continue to offer advice and guidance as he needs it. We can’t wait to see what happens next.

Congratulations, David. It’s time to begin your own adventure.

The Worm Has Turned

Okay, so I lied. I don’t have more time. I don’t have the ability to write more frequently. In fact, my job change has only encouraged me to take on more projects and fill every nook and cranny of my schedule. Yep, that’s right, I’m nuts.

So, let me make a deal with my handful of hardy readers. Instead of writing frequently, I will write more deeply. I have a hard time writing short updates with a bunch of links anyway. You don’t come to read here to get redirected to other places. Instead, I hereby promise to write on those things that are important to me, but with a little more depth into my personal opinion. Think of this as a monthly essay rather than a regular update. The truth is that’s about all I can muster now, but I still need the outlet.

To kick off this new plan, let me dive in to a subject that I’ve commented on frequently: Anthropogenic Global Warming… and the lack thereof.

I’ve been consuming and digesting a prodigious amount of material on the drama around the global warming discussion over the past few months. I have firmly believed for years that while the planet may have had measurable warming over the last decade or so, it was most definitely not the result of man’s activities. I flat out deny that we are the cause of any climate change on a planetary scale. And, in fact, the temperature graphs have plateaued for the past few years. It simply isn’t shooting up like we were warned it would.

For those not reading alternative media, you may not be aware of the event now called Climategate. In mid-November of last year, a large cache of reports, software code, emails, and other electronic documents from inside the East Anglia Climate Research Unit were leaked to the public. This is significant because much of the evidence used by the UN IPCC (United Nations Intergovernmental Panel on Climate Change) came from this group and some of the biggest names in arguing for AGW either worked in this group or were closely associated with them. This was a glimpse in to the inner workings of the primary engine of the AGW claims. It wasn’t pretty and, in some cases, it appears to be illegal.

There is some debate over whether these released items contained smoking guns or not, but at the very least it cast considerable doubt on the objectivity and the desire for good science by all of those involved. There was discussion of molding data to hide or show the results to achieve a desired outcome (the classic molding of data to fit the theory). There were emails clearing asking or admitting to destruction of original data and efforts to avoid complying with Freedom of Information requests. There were clear statements about keeping any alternative studies or theories out of respected journals or, if necessary, trashing the journals themselves so that no alternative ideas could gain traction. The obvious question is why would otherwise respectable scientists engage in such behavior.

In any large endeavor, you can usually find the motivations by following the money. These scientists realized that there was grant money and influence to be had by documenting an impending disaster and suggesting remedies. Once the ball got rolling, it became the biggest bandwagon in science. In short, this is a hideous breach of public trust and climate science will have a cloud over it for years to come. They brought this upon themselves.

Since November, there has also been revelations about authoritative claims being made by the IPCC regarding Himalayan glacier loss that were based on nothing more than a phone interview and a Master’s thesis. The bad news for the IPCC and their supporters seems to have gone from drips to a constant stream.

I believe the house of cards is beginning to fall. It may take a few years for the true believers to be convinced, but the public is no longer buying it. Polls continue to show climate change at the bottom of the list of important issues for the American public. It’s even beginning to fall rapidly in Europe where governments were the first to sign up for carbon limitations. After years of being berated about how little we care for the planet, we are finding that those looking down their noses at us were just doing a bunch of hand-waving to cover outright deception. Hand-waving was not a sufficient proof in my college courses, and I certainly don’t think it should be enough to upend the world’s largest and most influential economy. It makes no logical sense to try to dramatically remake the economy of the US based on unclear and shaky science that seems to be crumbling as we watch.

So, you can explain the second wave by pointing to the money and influence, but how does something like this get started when there’s no bandwagon to join? What’s the first handful of snow that turns into the snowball? It’s all about freedom. Those who think they know a better way to run society are looking for was to do just that, for your own good. The problem is that central planning by imperfect people will always be a disaster. The twentieth century had more than a few examples of just how bad those societies can be. We have a few that have made it into the twenty-first century in Cuba and North Korea, but they are on their last legs.

Forcing the public to use energy technologies not yet ready for prime-time will drive successful businesses out of the marketplace, prop up businesses that cannot yet support themselves, and limit the spending power and freedom of the public in the meantime. Increased cost of anything always flows to the consumer. Making businesses pay extra for anything is a joke because those costs will just be passed along. The only way to for a business to pay more without changing their prices is to tilt the playing field, and that is not capitalism. That is something else. But, when the public cannot afford the only available options, they will go to the government for help. And, the government that can supply whatever you need can take whatever they want.

I’ve long agreed that the most rabid of anthropogenic global warming supporters fit the description of being watermelons: green on the outside and red on the inside. The love of the environment was sheep’s clothing for the wolf of central planning and socialism. Thankfully, the truth was revealed in time to avoid any further damage.

Now, please, can we all move on to more pressing matters and leave this boondoggle in the dust? I fear that it will be some time before I’ll have nothing to talk about in this arena. But, it seems clear that the worm has turned.

Update 2/9/10: An article on point from the The Globe and Mail. Thanks to Todd S. for the link.

Annual Update

If you didn’t notice, there’s a new tab at the top of the blog labeled 2009 in Review. This is the electronic version of our annual newsletter. Feel free to read about our year if you find that sort of thing interesting. If you don’t, well then I’m sorry to have wasted your time.

Missing the Obvious

This past week the unemployment numbers were released and shocked many talking heads that it had broken 10 percent. 10.2 percent is the highest unemployment we’ve had since 1983. What blows my mind is that nobody, and I mean nobody, is asking what seems to be an obvious question: How did we recover from the 1983 recession? Are there any lessons to be learned from that robust recovery?

This paragraph in an AP article was the first thing even close:

The economy soared by nearly 8 percent in 1983 after a steep recession, Greenhaus said, lowering the jobless rate by 2.5 percentage points that year. But the economy is unlikely to improve that fast this time, as consumers remain cautious and tight credit hinders businesses. In fact, many analysts expect economic growth to moderate early next year, as the impact of various government stimulus programs fades.

The implication here is that the economy just righted itself with no external adjustments in 1983. Since we have stimulus running out, we can expect growth to actually flatten further next year. Why no investigation into what helped us drop 2.5 points of unemployment? Why no investigation into what caused 8 percent growth?

Simple. Tax cuts. A dirty word to Democrats especially when the evidence shows they worked.

In 1981, President Reagan signed a tax cut that dramatically lowered the marginal rates and other taxes. It let the country keep more of its money, which it promptly spent and invested kicking off one of the longest sustained periods of growth in the country’s history.

So, what are we planning on doing this time around? Oh, we’re spending like madmen! A huge stimulus bill that didn’t really stimulate. Attempting a huge health care bill that will only succeed in creating a huge bureaucracy. Attempting a cap and trade bill that will increase energy costs for everyone. But, what about tax cuts? Oh, they’ve talked about those, too. There are those Bush tax cuts that they will allow to expire next year.

That’s right. At a time of double-digit unemployment and a flattening economy, Congress has deemed it fit to increase income taxes. Wow. Brilliant.

Leave it to a Democratic Congress to ignore what works in favor of what gives the government more control.

I’m Baaack!

Well, if anyone is still checking our blog, I apologize for checking out. A few things have changed in our lives since I last posted here that have changed the available time I have to write.

First off, in the middle of August I quit my comfortable, salaried job to do contracting. Why in the world would I choose to do such a thing? A couple of reasons, actually.

First, I will be doing all my work from home. With a more flexible schedule and being home, that means I can more easily fit my part of the homeschooling into David’s schedule. I am now able to work with him after lunchtime instead of trying to squeeze in between the end of my work day and dinner. This has turned out to work pretty well.

Second, I am spending ninety-five percent of my time writing software again. I enjoy managing developers, but I really was getting disconnected and feeling like I was losing my touch. The team I had been managing was working the Adobe Flex which was a technology I had never used myself. Now, I’m writing Mac and iPhone software all day. I’m gaining skill and knowledge in technologies that are vastly more interesting to me and it’s making my work fun again.

The downside for my faithful readers is that I only get paid when I’m writing code and I don’t think it’s write to charge my customers while I blog about my opinions. So, my available time is shrinking. While I will be posting less frequently, I hope to continue commenting on current events and any geeky thing that strikes my fancy.

The other event that changed my free time was that I was made a Deacon at our church. This simply means that they’ve noticed how much I was volunteering and made it official in front of the entire body. I can’t quit now! The day we were officially announced as Deacons, we were all prayed for by the congregation at each service. That meant I got to attend four services that Sunday! Anyway, here’s the video of one of them:

So, God is moving and things are changing and we’re loving every minute of it. Thanks for being patient while I figured out my new schedule and how I’ll be able to share my thoughts.

Twenty Years Ago

I have several specific memories of twenty years ago on this date. I remember laying by the pool at my parents’ home with one of my groomsmen who had flown in from out of town. I remember getting slightly lost on the way to the bed and breakfast where we were to spend our short honeymoon. But, most of all, I remember standing at the end of the aisle feeling vulnerable while I waited for Stefanie to step into the sanctuary. I was nervous. Oddly enough, I wasn’t nervous about getting married, I was just nervous that I would screw it up. The truth was that I wasn’t terribly concerned about the details of the ceremony or the reception. I just wanted to make sure we actually closed the deal and I didn’t ruin the moment for years to come.

Needless to say, it went off without a hitch (aside from the slightly longer-than-planned trip to the B&B). It’s been a fantastic ride for twenty years. I would have been terrified if I had known what was coming, but I wouldn’t trade it for anything. I also know that the adventure isn’t nearly finished and I’m looking forward to where God takes us next.

Stefanie gave a good summary of the events leading up to our wedding day on her blog here. So, I’ll just mention a very recent story that seems to sum up what a fantastic woman I’ve married.

I’ve been planning for well over a year to buy Stefanie an anniversary band to celebrate our twentieth. I’ve been held up by the fact that I didn’t know her ring size. I started with subterfuge in attempting to get the size, then moved to gentle nudges, and finally resorted to outright requests for her ring size as the date neared. At the same time, we’ve had another big event in our lives form. I will be changing jobs next week to one that’s better for our family, but will mean a lower income. Furthermore, there will be a gap of about four to six weeks where we’ll be living off of savings before my new income starts to appear. This led Stefanie to resist any large purchases, including the ring I had planned. So, she came up with a brilliant idea. She suggested that we buy new Bibles as anniversary gifts for each other.

After just hearing a sermon on understanding the real value of your actions and being good stewards with what God has given you, this suggestion floored me. She had hit the nail on the head. As our lives lead us into closer communion with our God, I’m realizing how blessed I am to be walking side-by-side with my amazing wife. I couldn’t ask for a more perfect partner in navigating life.

Stefanie, I love you more than I have ever been able to put into words. I can’t believe you put your faith in a cocky teenager twenty years ago, but I hope, with God’s strength, I’m providing some justification for that decision. I can’t wait for the next adventure as long as I get to share it with you.

I love you.

P.S. I think I’ll still buy you the ring next year.

Worse than Doing Nothing

During this health care debate, it’s become clear that a very large number of Americans are unimpressed with President Obama’s plans for reform. Despite what he and his spokesmen say, it’s hard to believe that we can make things better by involving more government and more money. In fact, I believe that proper reform is actually in the opposite direction. The value is not in hiding away the cost of health care, but actually in removing the middlemen.

Arthur Laffer made this point better than I could in this Wall Street Journal column. Economics is based on the dynamic tension between consumers and producers. The producers want to be able to charge more for the product. Consumers want to pay less. It’s this tension that drives free markets to produce better products at lower, but sustainable, prices over the long term. If you detach either end of this equation, the tension is broken and it begins to break down.

Although we’ve all come to love it, medical insurance itself is part of the problem. We pay a flat fee every month and we’re able to consume as many services as we can get approved for. By removing the patient’s concern about cost, we allow the producer (the doctors and hospitals) to charge more with no immediate effect. Maybe our premiums will go up next year, but that’s too far removed from the action that drove them. If I had to pay for each doctor’s visit, each diagnostic test, and each prescription at full price, I’d become a much pickier consumer. I’d look for better deals. Those providers would have to compete for my money. Services get better and prices go down.

Now, add another level of indirection when the government funds the medical insurance. This means some folks getting free insurance (no cost at all!) with no concern for the cost of the services they consume. When the prices go up in this scenario, the government foots the bill. There isn’t even an increase in premium prices for the patient. How does government solve this problem? By setting prices. They declare they will only pay so much for services. So, the service providers either refuse to accept patients on the government plans or they make up for the lost income by pushing the costs over to those still paying for their own insurance. Which continues to increase those premiums! And, if there are no other kinds of patients (in a single payer system like Canada or the UK), then the fix is to simply ration the care.

Distancing the payer from the service provider causes breakdowns in the benefits of free market economics. The solution here is to bring them closer. Mr. Laffer calls this the wedge. The wedge is the difference between what services cost and what the patient actually pays. The bigger the wedge, the worse the problem. The key is to shrink or remove the wedge.

Thus, health-care reform should be based on policies that diminish the health-care wedge rather than increase it. Mr. Obama’s reform principles—a public health-insurance option, mandated minimum coverage, mandated coverage of pre-existing conditions, and required purchase of health insurance—only increase the size of the wedge and thus health-care costs.

According to research I performed for the Texas Public Policy Foundation, a $1 trillion increase in federal government health subsidies will accelerate health-care inflation, lead to continued growth in health-care expenditures, and diminish our economic growth even further. Despite these costs, some 30 million people will remain uninsured.

Implementing Mr. Obama’s reforms would literally be worse than doing nothing.

Put more emphasis on Health Savings Accounts to give taxpayers a tax-advantaged way to pay for these services, but make them pay for them themselves. Put the costs in front of the consumer and he will begin to shop. When people feel ownership and control of the costs, they will manage the money better than any government agency ever would.

Fantastic Claim

Fantastic can mean “amazing, wonderful, and good” and it can also mean “impossible, beyond reality, and of fantasy”. I’m going for the second meaning here as I discuss the claim by the current White House that massive intrusion of the federal government into health care will reduce costs. That’s fantastic (again, in the “beyond reality” kind of way).

This article in Investor’s Business Daily makes the point cleanly.

The idea of expanding the federal role in the medical arena is truly fiscally irresponsible. The claim that money will be saved through government competition with the private insurance system (with government setting the rules!) is the height of fantasy.

If 45 million Americans are now uninsured, that means 265 million are insured privately, and the government should not disrupt that. If the government becomes the insurer of most Americans, the impact on the budget would be absolutely awesome. Rationing of medical care that is so often mentioned would surely result.

Again, I believe the author is using awesome with a negative connotation.

It seems the height of fantasy to argue that the feds can make something cheaper by trying to control the market centrally. It is the height of arrogance to make that argument with a straight face.

Not Sold

I’m sorry. I just don’t buy it. I read President Obama’s comments from his press conference last night (sorry, I just have a hard time listening to him) and I am shaking my head. The language is sounding near-Orwellian. Just last week, we heard Vice President Biden say this:

“Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’ The answer is yes, that’s what I’m telling you.”

Then, the President said this last night:

This debate is not a game for these Americans, and they can’t afford to wait any longer for reform. They’re counting on us to get this done. They’re looking to us for leadership. And we can’t let them down. We will pass reform that lowers cost, promotes choice, and provides coverage that every American can count on. And we will do it this year.

Now, remember that the President is discussing a plan that, as currently described, will create this (click the image to see it full-size):


How does any coherent human being describe an organization like this run by the US government as a way to “lower costs” and “promote choice”? The whole argument is based on the idea that central planning of the entire health care system of this nation will make the system more efficient and more cost-effective. I seem to remember another superpower that thought central planning was the way to go. It didn’t work out for them. I just find it hard to believe that any government agency can cause something to get cheaper. You can’t legislate the laws of economics. The costs have to get paid. Prices only go down when there is choice and competition. Government can only limit choices and lower competition. It cannot artificially improve either one. It’s best bet is to get out of the way and let the market provide the solutions.

When I get this deep into a complex issue, I usually back up and start at the beginning by asking, “What problem are we trying to solve?” It’s easy for the solution to take on a life of its own and lose track of the original problem. So, what is the problem here? Well, according to the President it’s about providing coverage for the “47 million Americans” who are currently uninsured. Who are these people?

Professor Dominick T. Armentano summarizes the myth of the 47 million pretty well here. Let’s turn his numbers into raw math:

  • 47 million uninsured according to the US Census Bureau
  • Approximately 10 million of those are illegal aliens who should not be covered in any case.
  • Approximately 17 million are people making more than $50,000 a year who choose not to purchase insurance. So, it’s not an availability problem, but an issue of liberty.
  • Also, people who lose their jobs are recorded as uninsured, but most individuals changing jobs will regain insurance within four months. This is a temporary situation.
  • Furthermore, there are millions of Americans who qualify for federal or state-offered medical benefits who simply don’t sign up or who are considered uninsured because some government agency is already taking care of things.

Professor Armentano concludes that, with some reasonable estimates, the number of chronically uninsured is closer to 8-10 million. This is roughly three percent of the population. Is it really worth radically disrupting the entire industry and the vast majority of the population that is sufficiently covered to try to gather up that small number? Sure, these are people who need help. Sure, the industry as a whole needs help, but central planning, higher taxes, bigger deficits, more debt, and decreased liberty are not the solution here.

Human nature is to do what benefits yourself. Instead of building a huge bureaucracy to force people to do what isn’t their natural inclination, it is better to make it financially beneficial to do the right thing. Make the payment and the services more closely related. That will cause the patient to shop for the best deal. Remove the danger of a good doctor being wiped out by a lawsuit, and he will make better decisions about what tests and services are necessary and which are not. Further separating the service from the payment will incline people to overuse the services because they feel “free”. That will not lower costs.

The kicker here is the vast damage this kind of legislation can do to the industry. With some legislation, the laws can just be repealed and society can return to its previous state. This legislation will likely drive private insurance companies out of business, or at least change them dramatically. So, even if this monstrosity is repealed, the landscape will be changed and we could be in a world of hurt for some time.

This is something that needs to be prevented now. We can’t afford to “wait and see” and hope to clean it up later.