Dilbert.com Blog

Two Kinds of People

Wed, 07 Jan 2009 01:00:01 PST

During my corporate years, an executive of the company once pulled me aside and told me his philosophy that there are two types of people. He called them "good bears" and "bad bears." He thought I would be delighted to know I was a good bear. My first reaction, which I kept inside my head where it would be safe was "Thanks for the nothing, you simplistic bastard." But in the fullness of time I have come to embrace his philosophy.

I allow for some slop in my designations. Everyone is nice sometimes, and everyone has their selfish or evil moments. But at a person's core you will find either a good bear or a bad bear.

Case in point, a reader sent me this observation from his workplace.

"Extra food from company events is often put in the break room areas for those who weren't involved in the meeting. I have a co-worker who, when happening upon the food, will pack it up and take it home. He rarely leaves anything behind. One time he was seen taking the bag the food was delivered in out of the trash so he could repack it. He's been seen packing up the left over plastic silverware, napkins and plates, but leaving behind the Italian dressing. He must not like that kind."

While I can't rule out the possibility that this person was taking the food to a homeless shelter, something tells me that isn't the case. The homeless often like Italian dressing. In any case, this is just an example.

Do you buy into the philosophy that people are either good bears or bad bears at their core?

Sign of the End Time

Tue, 06 Jan 2009 01:00:01 PST

One clear sign of the End Time is when the media starts publishing my opinions on the economy.

http://www.cnbc.com/id/28511421

Worse yet, now I have to worry that, for the benefit of the world, Warren Buffett will send his goons to kill me. As long as I'm a dead man walking, I might as well make things worse before I go. Here now, more of my opinions about the economy.

I wonder what people mean when they say the economy will recover in 2010. The only way that can happen is if another irrational bubble forms thus creating an illusion of wealth similar to our previous illusions. If you take illusions out of the equation, there isn't anything to get "back" to. The wealth was never there in the first place.

I said before that I think we're on the cusp of a change as fundamental as the industrial revolution. But this time the change will be on the consumption side, not the production side. As a society we have dabbled with recycling and such, but it has always been fairly optional. There was no real penalty for waste.

The coming consumption revolution won't be strictly for the benefit of the environment. It will be an economic necessity, driven largely by the huge numbers of retired poor. There simply won't be enough stuff for everyone if waste is allowed.

The Internet will make this revolution possible. I've already written about the concept of ride sharing becoming widespread if the Internet and smart phones allow you to easily find rides going your way. That's just one example of how society could adapt to having less money without losing much in terms of happiness. Here's another example:

In California we're facing a severe budget deficit, and this will demand cuts in education among other things. I can imagine a future economy where everyone is home schooled over the Internet, and the average result is an improvement. With the Internet you could leverage the best teaching methods to the entire country. No one gets the bad teacher or the disruptive class. There are no bullies and no cliques.

Obviously you can see lots of problems with this approach. We assume that kids gain a lot from the social interaction of being in school. And of course personal attention from a teacher is important. But we have enough home schooled kids in the world to test that theory. My guess is that as long as home schooled kids have friends in the neighborhood, and siblings, they socialize just fine. The social skills can be learned on sports teams and at Girl Scouts. And I suspect a parent can give better personal attention than a teacher with 20 students.

Poor kids don't have computers and Internet connections. But subsidizing them would be far cheaper in taxes than sending them to school. And suddenly everyone would get the same quality of education.

I'm reading an excellent book called Outliers, by Malcolm Gladwell. One of the topics involves the huge academic disadvantage absorbed by kids who are the younger ones in a given class. Eleven months is a huge difference in maturity when you are in second grade. Home schoolers could start grades on their birthdays, and always be at the same maturity level as their peers. That change alone can buy you a big gain in average academic achievement.

Gladwell also discusses the disadvantage of having no school in the summer. It's a legacy of our farming past, with no current utility. Every summer the American kids lose ground to the Japanese kids who school year round. Home schooling would have no long breaks. Another problem solved.

This is the sort of change that could never happen if the economy was in a happy bubble and it seemed that money was abundant. But as the reality of our economic situation settles in, unthinkable options become thinkable. The good news is that the unthinkable options will have lots of advantages.

Testing the Illusion Hypothesis

Mon, 05 Jan 2009 01:00:01 PST

The other day I was at the Small Dog Park. It's a fenced area where dogs under 20 pounds can frolic with each other. I was chatting with a friend, whose dog is named Indy, about a movie I just watched involving a dog named Marley. After my friend left, I met a guy who has two Italian Greyhounds, coincidentally named Marley and Indy.

I don't know the odds of discussing two dogs named Marley and Indy, immediately followed by an unrelated discussion of two different dogs named Marley and Indy. I'm thinking it is in the smallish category.

Speaking of coincidences, I have started noticing that all movies are about me personally. For example, the Marley and Me movie is about a guy who writes humorous columns about his dog. My last blog post prior to watching the movie was a humorous piece about my own dog. (See below.) The writer in the movie worked in a cubicle at one point, and if you look closely at the comic hanging on his wall, it's Dilbert.

There's a bit of selection bias in this coincidence. I did know it was about a dog. But I wasn't aware it was about a writer who writes humorous bits about his dog. And I didn't expect to see one of my drawings in it.

Still, it seems that every time I watch a movie or a TV show lately there is at least one element that is yanked directly from my life. And I don't mean the obvious stuff such as "we are both humans." The connections are usually pretty obscure.

I have to remain true to my skeptical roots and explain these coincidences away with references to selective memory, and pointing out that it would be even stranger if there were no coincidences at all, given the richness of life's experiences. But it got me wondering if there is any way to design an experiment to test the theory that life is an illusion.

Obviously the illusion could be so well designed that all testing of it would be cleverly thwarted. So a negative result would mean nothing. But suppose this illusion was providing a fire hose of ongoing clues. What would those clues look like?

One possible clue is that your life might have what I will call a theme. For example, Steve Jobs' theme is that he can turn any business into a huge winner. You might call that skill, but he still had to be in exactly the right places at exactly the right times for his particular skill to be useful. I don't think he would have been much of a hunter/gatherer.

You probably know people who are the opposite of Steve Jobs, able to snatch defeat from the jaws of victory again and again, through no obvious fault of their own. It looks like extraordinary bad luck. That's a theme.

If your name is Kennedy, you might have good luck with love and money and power, but bad luck with transportation. Stay away from PT boats, convertibles in Dallas, cars in rivers, and small aircraft. That's a theme.

Some people are lucky in love, but unlucky in health. That's a theme. You get the picture. So ask yourself if your life would look entirely random from an objective viewpoint or is there a recurring theme. If you have a theme, you might be a product of design.

Another clue that life is an illusion is that perceived reality might have inexplicable dead ends or cracks. Consider the physics study of entanglement, where particles influence each other at any distance, which is seemingly impossible. Or consider that light is both a particle and a wave. Physics is full of examples where reality seems to have cracks and dead ends.

How would you test to see if life is an illusion?

Dog Pillow

Fri, 02 Jan 2009 01:00:01 PST

The other night I couldn't get to sleep. The problem was that I was sharing the bed with a wife, two cats, and a dog. The only position left for me would have looked like the chalk outline at a murder scene. I decided that one of the mammals needed to be moved. I was groggy from sleep deprivation, but even in that debilitated state I knew the wrong answers were (in this orders): wife, cat 1, cat 2. A good night of sleep isn't worth a bite wound.

I figured moving the dog was my best chance of not regretting this plan. She's a 12-pound toy Australian Shepherd and always in a good mood. When she's sleepy you can mold her into any position you like, Gumby-style. My idea was to bring her up toward my chest, with her back to my stomach, spoon position. Then I could turn sideways, insert my special small knee pillow between my legs and be good to go.

It was totally dark so I was operating by touch. I reached down and pulled little Snickers up to my chest, adjusted my blankets and pillows, and started settling in for a luxurious snooze. I love it when a plan comes together like that.
Few things are more soothing than sleeping with a warm puppy. I decided to use the dog as sort of a little pillow for my snout. It felt wonderful to snuggle my nose in between her ear and her neck area. She was totally unconscious so she took any position I assigned. It was great, but perhaps one more adjustment would make it perfect. I decided to put one arm around her and slip my hand under her head, just to get extra comfy. But there was just one problem.

HER HEAD WAS MISSING!

I was panicked, feeling around in the dark for where she must have contorted her head to make it so far from where I knew it had to be. I slipped my hand under my pillow and felt around, nothing. I checked to see if I was accidentally lying on her head: negative. Her head just wasn't there. In my half-asleep state, I worried that a horrible accident had happened during the night, possibly involving a circular saw. I realize that sounds unlikely to you, but keep in mind that my own snoring doesn't wake me, and I did have a headless dog.

I'm sure many of you readers are ahead of me on this story. Eventually I realized her head was on the other side of her body, exactly where it belonged. I had been snuggling my face into my dog's ass.

So that's how my 2009 started. I'm really hoping it isn't some sort of omen.

Just One Catch

Wed, 31 Dec 2008 01:00:01 PST

I've written before on the topic of how the universe seems to have a cruel sense of humor, or maybe just a sense of balance. For example, the universe might allow you to be rich, handsome, and a young President of the United States. The only catch is that you also get assassinated in Dallas, or your intern is Monica Lewinsky. There's always a catch.

But I think I found the all-time winner in this category in a Forbes article about billionaires who lost some or all of their fortunes in 2008. Before you read about him, allow me to describe the conversation that the universe had with his soul before he was born. I think it went something like this:

Universe: I've decided to make you a billionaire.

Soul: Woo-hoo!

Universe: But you will lose more than half of it in one year.

Soul: I guess that's still okay. That's still a lot of money.

Universe: And you'll probably go to jail for two years.

Soul: Dang. I knew there was a catch. Still, it's only two years.

Universe: Actually, that's not the catch.

Soul: Uh-oh.

Universe: Your name will be Anurag Dikshit.

Soul: Ha ha! Good one. Seriously, what will my name be?

Universe: We're done here, Dikshit.

http://finance.yahoo.com/banking-budgeting/article/106352/Billionaire-Blowups-of-2008

Glucose Equals Free Will

Tue, 30 Dec 2008 01:00:01 PST

I always need to eat something before I attempt writing or else nothing comes out. I eat exactly one banana before I write a blog post, and one chocolate Clif Builder's bar before writing a comic. I always assumed this was just a combination of ordinary hunger plus a habit that borders on OCD. The only thing I knew for sure was that deviating from the routine seriously impeded my productivity.

Recently a reader sent me a link about a writer who has the same experience but better research to explain why. The bottom line is that writing requires will power to avoid distraction, and will power is correlated with your glucose levels. In other words, your free will is actually sugar.

http://scienceblogs.com/cognitivedaily/2008/03/practicing_selfcontrol_consume.php

This makes me wonder if there is an optimal food strategy for seduction. Apparently bringing a woman chocolate will only increase her glucose levels and with that her ability to resist you. In fact, a guy should want his woman to be good and hungry, preferably on a diet. It turns out that resisting one sort of temptation makes it harder to resist a different sort at the same time.

If that is not enough, I just did a Google search to confirm that alcohol lowers your glucose levels. That fits the theory. Everyone knows they have less will power after a few drinks.

http://www.abbottdiabetescare.com/adc_dotcom/url/questionAnswerProfile/en_US/40.20:20/question_answer/question_answer/QuestionAnswer_00103.htm

Putting it all together, the best first date a guy could arrange would involve a woman who is on a diet to begin with. Eating is the first temptation she is trying to resist, making other temptations that much harder to resist. The date would start at around 5 pm when her glucose levels are starting to drop and the seducer should keep her hungry as long as possible. Add some alcohol to the mix and her glucose will drop further. Now add yet another temptation. I'm thinking a stroll through a high-end shopping center would work, as long as the woman believed it would be rude to actually purchase something while on a first date. She would be tempted to pop into the stores to take a better look, but she would resist.

And you thought science wasn't good for anything.

Defeating Terrorism

Wed, 24 Dec 2008 07:50:01 PST

We won!

To defeat terrorism, specifically the most impressive attacks, you must cut off the terrorists' sources of funds. Mission accomplished. In fact, thanks to the mortgage meltdown, we cut off everyone's funding.

I heard on 60 Minutes that Saudi Arabia needs oil to be at $55 a barrel just to pay the bills. With oil near $40 a barrel they are in trouble. I assume other oil producing countries are in the same leaky boat.

When oil prices were high, most people assumed prices would stay high. So oil rich countries started investing and spending like crazy, getting their citizens and friends addicted to higher standards of living. When those countries need to pull back on that spending, where do you think they will cut first? I think it will be hard to fund terrorists when you can't afford to pay the garbage man. And keep in mind that a successful terrorist attack on U.S. financial infrastructure could further lower the demand for oil.

I'm overstating the case, as I like to do, but I have to think it is becoming clear to everyone that a frail U.S. economy is bad news for everyone who would prefer driving a car over riding a camel.

On a related note, you haven't heard much bravado from Chavez and Putin lately.

Warren Buffett and You

Tue, 23 Dec 2008 01:00:01 PST

In a prior post I questioned whether ignorant citizens should be allowed to gamble by buying individual stocks, as opposed to investing in an index of stocks to reduce risk. Your comments raised some interesting questions that I think are worth wrestling with.

First, many of you pointed out that capitalism depends on people having the option of buying individual stocks. That's how companies raise capital. But surely there is a better way to raise capital than by convincing idiots they know more than they do.

Suppose citizens had two ways they could invest in equities. One channel is through the general index of all stocks (not just the S&P 500). The other is a fund managed by venture capitalists along with their own money. With this system startups still get funded, but only by experts who are close to the action, and citizens are still diversified. And I could imagine some sort of percentage-of-assets limit on how much individuals could invest in venture capital funds.

If a startup succeeds, it gets rolled into the index. From that point on its stock price would move with its actual earnings, as estimated by some sort of regulating board. It wouldn't matter if the regulators got the stock price wrong one year because it would average out with other stocks, and they could always go back and adjust it on appeal from the company.

Employees of a company could still own stock in that enterprise, so they are incented to get profits up. But outsiders could not own the individual stock.

The second objection to banning individuals from owning stock is the Warren Buffett argument. The thinking is that Warren Buffett's method of investing proves that individuals can succeed by buying undervalued stocks and holding them for the long run. So since we know individuals can somewhat easily succeed at investing in stocks, it would be an unreasonable limit on freedom to prevent them from doing it.

There are a few problems with that line of thinking. First, Warren Buffett buys companies, not stocks, in the sense that his stake is so large he can influence management. And his access to information about the company is much better than yours. He's a perfect example of why an individual should NOT be buying stocks; you're competing against the likes of Warren Buffett for limited resources. In the long run, Warren Buffett will have his money and yours too. You're no Warren Buffett.

Still, there are plenty of civilian investors who have done well buying value stocks and holding for the long run. But wouldn't you expect a wide distribution of luck in any gambling arena? If every investor picked stocks entirely randomly, you would still produce a good number of Warren Buffetts entirely by chance. And our brains are wired to assume those winners had the secret formula for investing.

If Warren Buffett's success is indeed a function of following a simple philosophy of investing, and that method has been well understood for decades, you would expect most managed mutual funds to beat the averages too. They don't.

Future of your Phone

Mon, 22 Dec 2008 01:00:01 PST

Some time ago I wrote a post about my prediction that people would use their smart cell phones to arrange ride sharing. That is happening now.

http://www.nytimes.com/2008/12/21/business/21novelties.html?_r=1&ref=technology

I also came across an application that allows you to use the Bluetooth feature of your phone to lock your computer when you (and your phone) walk away. I'm guessing you'll see more of this, maybe for your home and car.

http://www.automaticable.com/2008-09-20/lock-down-your-ubuntu-computer-with-a-bluetooth-cellphone-and-blueproximity/

I also heard about an application that lets you take a picture of any item with your iPhone and it finds an online shopping site that carries that exact item. Very cool. (Update: Here's the link: http://www.amazon.com/gp/feature.html?ie=UTF8&docId=1000291661)

These applications got me thinking what else is in the pipeline. I'll take a stab at a few predictions with full knowledge that you will provide links to people already working on these ideas.

WHATS-HIS-FACE: This application would let you discreetly take an iPhone photo of an acquaintance whose name you can't remember then it uses face recognition to search for the name online. Someday everyone will have a Facebook-like web page, so searching for faces will be feasible.

DOCTOR-IN-A-BOX: Someday you'll be able to take an iPhone picture of your suspicious moles, abrasions, fungus, or whatever and get an instant automated diagnosis and suggested treatment.

WHAT'S-IT-LIKE-THERE? Imagine wondering how long the line is to an event, or what a particular forest fire looks like, for example. You send a query through your iPhone for anyone who is in that area, according to GPS tracking, and ask for a look. A kind stranger takes your query, sets his phone to stream video, and gives you the view from his perspective. You would have eyes anywhere there are people.

BRAIN-EXTENDER: Google and Wikipedia are already brain extenders. You can find almost any information you want and quickly. But imagine how much cooler it would be if your iPhone headset was continuously monitoring your conversations and answering your questions as they arise, or whispering suggestions in your ear. That application seems likely to me.

Do you have any more futuristic iPhone predictions?

Investing in Individual Stocks

Fri, 19 Dec 2008 01:00:01 PST

Recently I suggested that someday it might be illegal for untrained citizens to invest in stocks of individual companies because it is too risky. As regular readers know, I sometimes throw out provocative ideas just for the fun of it. I didn't think much about that idea until after I wrote it. But the more I mulled it over, the more it started to make sense. So I'm going to develop that argument here.

I remind you that I lean libertarian (without the crazy stuff) so all of my impulses are to allow people the freedom to hurt themselves any way they choose, so long as their corpses don't block my driveway or cost me anything. So the argument I am about to make offends even my own sensibility. The troubling part is that it makes sense.

Let's begin by noting there are already plenty of restrictions on personal freedoms when the consensus is that these restrictions somehow protect people from themselves, or they protect society as a whole. For example, where I live you can't legally...

- Drive without a seatbelt
- Ride a motorcycle without a helmet
- Commit suicide
- Practice law, medicine, or other professions without a license
- Operate a motor vehicle while under the influence
- Gamble in most places
- Carry an Uzi down the street
- Buy dynamite

The list goes on, and that doesn't even include the many restrictions on underage activities. So there is nothing unusual or unprecedented about legal restrictions on freedom when an argument can be made that it protects lives or property.

My argument against allowing individuals to invest in stocks is that unless you have insider knowledge, which is already illegal, your odds of beating the index averages are slim. It is nothing more than gambling.

The myth of stock investing is that a person who does more research has better results. But there is no science to support that view. Indeed, the person who understands the most about individual stock investing avoids them completely and invests in ETFs or index funds.

The problem with doing your own research on stocks is that you must rely on the information coming from the management of a company, and managers are generally misinformed or lying. Even the most seasoned investment professionals running mutual funds perform worse than the indexes on average. Brains and research can't overcome the fact that much of your data is deliberately tainted at the source.

When people go to Vegas to gamble, they usually set some sort of limit for their losses. And they go with the full knowledge that winning is unlikely. It makes sense for that sort of activity to be legal, within limits, because it is viewed as entertainment and not investment. But if it were common for people to bet their retirement savings on Blackjack, you can be sure it would be illegal.

We don't allow unlicensed people to practice law or medicine, sell real estate, or even build a house. It is entirely consistent to restrict the untrained from making risky stock investments.

I reiterate that this runs against my own libertarian philosophy. I would feel I had lost something important if I couldn't invest in individual stocks. But it is also true that my net worth would be larger if I had never done it. And it would be larger still if I hadn't allowed professionals to do it on my behalf.

If anyone comments to this post by saying, "I do my own research and I made money in the stock market," it is proving my point. And if you don't see why that proves my point that further proves my point.

Buried With Your Cell Phone

Thu, 18 Dec 2008 01:00:01 PST

There is a growing trend for people to be buried with their cell phones.

http://www.msnbc.msn.com/id/28182292

This idea appeals to me on many levels. Obviously I'd want a phone in my casket just in case I pop back to life. Although I'm fairly certain that if I wake up in a casket I would be able to scream through six feet of dirt, I'd still want a phone as a backup.

You might argue that the embalming fluid would eliminate any chance of going back to work on Monday. And the fact I specified cremation in my will reduces the odds of waking up in a casket. But I am cautious by nature when it comes to issues such as being buried alive. There is a non-zero chance my last wishes are misinterpreted then the undertaker runs out of embalming fluid and decides to fake it, and my purported death is nothing but an extra good nap. It could happen, and I want a phone. I also want an outlet and a charger. And I want my casket to be at least 2,000 square feet with 10-foot ceilings, ventilation, good lighting, and a bathroom. So yes, I get the whole cell phone thing.

I'm sure my readers realize this trend creates an opportunity for some world class pranks. Begin by pretending you are putting the deceased person's cell phone in the casket and then pocket it. Later you can call the relatives of the departed and ask questions such as "How's the weather out there?" You might accuse the living of being too hasty about dividing up your possessions. Tell them you have befriended some worms but you are concerned they are up to no good. If they ask how you are doing, say everything was fine until you farted. There's no end to the comedic opportunities.

Dilbert 2.0 Reminder

Thu, 18 Dec 2008 01:00:01 PST

If you order Dilbert 2.0, my twentieth anniversary book, today or tomorrow, you can still get it before Christmas.

http://www.amazon.com/Dilbert-2-0-20-Years/dp/0740777351

Check out the reviews. It's probably the best thing I have ever done.

Scott

Call it Phase II of Capitalism

Wed, 17 Dec 2008 01:00:01 PST

In yesterday's blog I imagined a future where capitalism morphs into something with freedom of employment but more restrictions on how individuals can spend, invest, and buy health care. The point of the restrictions would be to keep gullible idiots from destroying the entire economy, again, through their own reckless behavior.

Most of the comments fell into two camps:

1. Capitalism is fine the way it is.

2. People would never stand for those new restrictions.

Some people also assumed I was recommending new restrictions on freedoms. I'm not. I'm predicting the restrictions because it will become clear that the alternatives are impractical. And as always, it is just a thought experiment. Don't take it too seriously.

First let's look at the notion that capitalism is fine and we're experiencing nothing more than another recession. I don't think that's the case this time for several reasons. The biggest reason is the baby boomer generation that is retiring and poised to absorb all social security and health care resources while adding little in productivity. And by the way, they didn't save enough money to retire. Next you have the Kazillion dollars in debt, and another tsunami of mortgage defaults that will trigger over the next few years as rates automatically adjust upward according to contract.

Meanwhile I see no obvious candidate for an economic driver to the upside. Apple can only sell so many iPhones.

Unwise debt and unsustainable bubbles had masked the fact that the economy was already bankrupt. The next mortgage meltdown (unavoidable), and the baby boomer impact (unavoidable) are not balanced out by anything that looks like good news. In other words, capitalism Part 1 failed.

The second objection to yesterday's post is that people wouldn't put up with any additional curbs on their spending and investing freedoms. That seems ridiculous to me since we already put up with so many societal restrictions. A few more would hardly be noticed. I don't remember the last time I heard anyone grumble about seatbelts. And if the government told banks they couldn't make billion-dollar loans to the homeless, no one would complain about that new restriction on freedom. Some restrictions on freedom just make sense.

Suppose your so-called restrictions on freedom came down to this question: "Would you rather have affordable healthcare or the right to make ignorant and risky investments?" Or how about, "Would you like to have a job or the right to be obese without being taxed extra?"

I don't know what capitalism's second act will look like, but it probably involves preventing individuals from being as self-destructive as they would prefer.

I remind you that I lean libertarian, so I'm happy to let anyone engage in risky and morally ambiguous behavior, but only up to the point where it has an impact on me. When your behavior raises my taxes it becomes my business.

The End of Capitalism

Tue, 16 Dec 2008 01:00:01 PST

Things change. It's the nature of the universe. Yesterday's greatest ideas give way to ideas that are better, or better suited to the present, or at least different. Change is the only thing on which you can depend.

So what about capitalism?

I think capitalism had a good run, but it will soon be done. Socialism will be too expensive to maintain as the world economies slow, and communism won't be making a comeback. The economies of the future will be something new.

Capitalism was conceived before the Internet, and before the gears of commerce became computerized. The system could absorb a lot of con artists because they didn't have the ability to steal fast enough to cripple the system. As you know, that has changed. Crooks in expensive suits now have the ability to swindle trillions, collectively, thanks to the efficiency of the system. And idiots in expensive suits can do even more damage.

The economy is now too complicated for even the regulators to know when a con or a huge mistake is happening. The balance of power has swung to the crooks and the market manipulators. Even if we could regulate away these problems, it's already too late. There isn't enough money left to support the planet under the current social systems, at least not when the boomers start retiring and unemployment starts climbing.

I've been wondering what the new economic system will look like. I think the next economy will have the same freedom of employment and entrepreneurship as capitalism. That part seemed to work well. But you might see restrictions on what types of investments individuals can make, to keep them out of trouble. Most people should be restricted to buying only the broad indexes with an ETF. And perhaps the percentage of stock you can legally own as a percentage of your net worth should go down as you near retirement. Stock bubbles could be avoided by restricting how much money can be invested in stocks, on an annual basis, to keep the price earnings ratios around 15. New stock offerings would be funded by existing companies and institutional investors. (Clearly that idea isn't well thought out. It's just a directional sort of prediction.)

But the biggest change could be in what sort of consumption is allowed under the new economy. Most of our problems were caused by people who couldn't control their own spending. Banks could tighten their credit requirements but that won't be enough to stop the spending junkies from depleting their own nest eggs. So you might see some forced savings rules in the new economy.

Depending on how bad the economy gets, you could also see rules banning single passengers in cars. And working from home might become a legal requirement for economic reasons. Perhaps your health insurance premiums would be based on your body mass index and whether or not you smoke. You could see a whole range of restrictions on how consumers can live, spend, and invest, to prevent market bubbles and waste.

So I think the new economy will allow you freedom of employment, but you won't be able to spend and invest your money as freely as you once did. That was the part that got us in trouble.

I'm not saying this new economy will be an improvement. It's just a prediction.

Financial Markets Explained

Mon, 15 Dec 2008 01:00:01 PST

In my capacity as cartoonist, I feel an obligation to simplify complicated discussions until two things happen simultaneously:

1. Absurdity is achieved.

2. The reader feels as if it all makes sense.

My comic from Saturday illustrates that principle.

According to Google Alerts that comic has been posted to more blogs than any comic I have ever created. It inspires me to more fully explain the theory of finance in this blog.

Think of financial theory as a stool. The stool is supported by three legs, or truisms.

History always repeats.
Past performance is no indication of future returns.
Asshats are trying to steal your money.

These three truisms can explain any financial phenomenon. For example, if your financial advisor suggests that you invest in a market bubble that is about to burst, he will explain that the past is no indication of future results. Just because a Price/Earnings ratio of 45 has never been sustainable in the past doesn't mean it won't be perfectly safe in the future.

And when the bubble bursts and you lose half of your money, your advisor will explain it's because history always repeats. In other words, he's an asshat trying to steal your money.

This stool also explains the housing situation. Financial experts knew that making loans to hobos had never been a good idea in the past. On the other hand, past performance is no indication of future returns. Maybe this time would be different. Then history repeated and asshats stole your money. As a bonus, they even stole each other's money this time. You have to admire their thoroughness.

One last thing you need to know: People who say it is a good time to invest are called bulls. The bulls are at the center of all financial problems.

In summary, if you want to understand financial markets find a bull and look at his stool.

Taxi Please

Fri, 12 Dec 2008 01:00:01 PST

People keep asking me what I think about bailing out the U.S. car makers. I am unqualified to have an opinion on the economics of that question, and the experts seem divided. In situations such as this, where the experts disagree on the best path, I say use the limited supply of money someplace where the experts DO agree that it would help the economy, if there is such a place. I'm not claiming that withholding aid from the car makers would be the best solution. It's just the most rational decision when the best path can't be known.

And this got me thinking about why we have so many cars in the first place. Excess cars cause traffic, pollution, and dependence on foreign sources of oil. And who benefits most by this situation? Answer: car makers.

Suppose the government enacted laws that made it legal for anyone to be a taxi driver in his own car without a special taxi license. And suppose the income was non-taxable. The result would be cheap taxis and high availability. Every time you wanted to run an errand, and had an extra minute, you could choose to pick up a rider and cut your own driving expense in half. Technology will make it easy to match amateur taxi drivers with riders. And the market would keep prices low.

Now obviously there are lots of problems with this scheme, in terms of security, liability, and people puking in the back of your Hyundai. But compare that to our current problems: car expenses, traffic, pollution, global warming, and excess energy use. I think the universal taxi scheme comes out ahead.

None of this could happen while U.S. automakers are still in business. They would lobby to make sure the market for new cars stayed strong. And obviously the professional taxi drivers wouldn't like it. So they would lobby against it.

This sort of thought has been going through my mind lately because I think the current recession isn't going to be temporary. I think we're on the verge of a change as profound as the Industrial Revolution. Society will have to retool its expectations to meet the reality that there just won't be enough money to provide necessary services if we insist on consuming in an inefficient way.

The universal taxi theory won't happen because farsighted politicians changed laws. It will happen because people start doing it on their own in such numbers it will be impossible to prosecute, especially given the dwindling law enforcement budgets.

Likewise, the future includes legalized (de facto or literally) drugs and prostitution, out of budget necessity. There simply won't be enough tax money to chase that sort of perp. And say goodbye to speed limits in all but the most dangerous roads.

Conspiracy Theories

Thu, 11 Dec 2008 01:00:01 PST

I generally dismiss conspiracy theories. If something sounds ridiculous, it's probably not true. Now I find out that the Governor of Illinois was selling a U.S. Senate seat to the highest bidder.

http://www.cnn.com/2008/POLITICS/12/09/illinois.governor/?iref=mpstoryview

This makes me reevaluate my rule of thumb on conspiracy theories. I have to move the bar in terms of what is too ridiculous to be potentially true.

If you tell me the government has been covering up alien visits for decades, I still consider that too ridiculous to be true, but mostly for the reason that alien visitation seems unlikely. I have no problem believing that the government would cover it up for some dumbass reason. That is well within the realm of believable.

I have no problem believing that during the 9/11 attacks our government ordered the Air Force to destroy the passenger jet that was heading for the Whitehouse, and found it convenient that the passengers rushed the hijackers at about the same time. It makes a good hero story. I'm not saying that's what happened. I'm just saying that it doesn't qualify as too ridiculous to be true. To me it even sounds more likely than the official version.

The most evil conspiracy theory I have ever heard involves the idea that the 9/11 attacks themselves were planned by the U.S. government as a pretext for military action and subsequent profit by some industrialists. I don't believe that's true, but again, thanks to Governor Asshat, I can no longer rule it out simply for being too ridiculous to consider. The bar has been moved.

I don't know if the Mafia fixed the election for President Kennedy, then had him whacked because he didn't return the favor, but it is well within the realm of non-ridiculous.

What other theories do you think are now in the realm of not-too-ridiculous?

When We Evolve Into Robots

Wed, 10 Dec 2008 01:00:01 PST

If we ignore for the moment that we are already moist robots of a sort, I wonder if it is inevitable that we will evolve into more traditional robots of metal and silicon and plastic.

I think futurist Ray Kurzweil predicted that someday we will have body scanners so accurate we can analyze a human brain and transfer it to a computer. Obviously the computers of the future will need to be more powerful to handle the load, but that seems feasible. I wonder what happens next.

Suppose we transfer a dying guy's brain into a computer, and that computer passes the Turing Test, thus demonstrating genuine intelligence. For all practical purposes it might have the same personality as the human brain that went into it. If you had a conversation with it, I can imagine it expressing a desire to live and even procreate.

Now here's where it gets interesting. Once you transfer more than one human into computer form, the two of them could choose to mate, with their offspring being the combination of the two artificial personalities, after agreeing to some rules about which traits they prefer to be dominant.

As computers, they could still tap into all the knowledge on the Internet, but only as needed, the same way regular humans access the Internet. The only programs running automatically and all the time would be their core personalities.

Eventually these computer brains would request more robust robot bodies, and the regular humans would oblige by developing ever better models. And then things get really interesting because regular humans could mate with robot lovers. The offspring would be the combination of the computer's mind and the scanned brain of the regular human, again following rules to see which traits dominate. The offspring would necessarily be a computer, thus dooming regular humans in the long run.

In some cases a dying male could leave behind a sperm sample before evolving into his computer-robot self. That way he could still reproduce with a regular human woman. So there would be a period in human evolution where regular humans and robot humans routinely mate and have the option of a traditional or robot baby.

Eventually, when all humans have robot bodies and computer brains, it will seem silly to be encased in separate physical bodies when reality could be better handled via simulation. So all the individual computers would agree to download to one huge computer and live a simulated reality for the rest of time.

The imagined reality would feature each "person" in flesh form. Upon the death of a particular simulated human, the host computer person would "reincarnate" into another simulated human baby.

By the way, it already happened. Your flesh form died a billion years ago. To make the simulation meaningful, you walled off the memory of being in a simulation. But you left the digital equivalent of a bread crumb path back because, being human, you couldn't totally release on the past. So we see hints and clues in this simulated life that give us a way out of this simulation if it becomes too brutal.

For example, in this simulated life we continually create simulations of our own. We call them TV shows, plays, movies, books, and even computer games that are simulations of life. Everything in this life is a metaphor. And our coincidences aren't as coincidental as we think.

I'm guessing you don't buy this explanation of your reality, but consider this: If the prediction of the future seems reasonable, and time is infinite, it is infinitely more likely it already happened compared to the possibility that it will happen in our future and hasn't yet. We could be imagining the universe as only 14 billion years old in the simulation.

(Yes, I am borrowing from the Boltzmann Brain idea and combining it with Kurzweil's predictions and a dash of The Matrix, plus a few other ideas. That doesn't make it wrong. That just proves we left bread crumbs.)

The Nonfussy Pill

Tue, 09 Dec 2008 01:00:01 PST

I was reading something scary the other day. Obviously it was from an economist. He said the real problems haven't started yet. Wait until the Baby Boomers start retiring. Their nest eggs are tiny and there won't be enough Social Security and health care money in the universe to keep everyone in cat food and diapers.

I'm an optimist so I think society will find a way to adapt. But I wonder what that will look like? It might be an improvement.

For one thing, I think you'll see more sharing. The Internet can make it easy to know where you can find resources to borrow. The most obvious example is carpooling. But it could get down to who has food in the fridge that will go bad because someone will be out of town for a week. Or maybe it becomes easy to find a reliable grandma who will babysit for free if you agree to feed her cat next Tuesday. The market for sharing is totally untapped.

I just bought two tickets to a show, for an upcoming trip. I'm sure I will like the show. But I won't like it more than watching a good TV show with family or friends while eating popcorn and sitting on the couch. It's just different. Most luxury expenses are entirely unnecessary in terms of happiness.

I eat a lot of meals out, but it's mostly for convenience. After most restaurants go out of business, which should happen in the next five years, people might start cooking group meals. It makes a lot more sense for your family to make a big pot of mashed potatoes and meet the neighbors for a group buffet. That's relatively little work for each family, and relatively cheap. Again all you need is the Internet to help you organize that sort of thing. Plus you need a good dose of poverty to eliminate the alternatives.

The new poverty is likely to be different from anything that came before. Imagine a world where even the poor have good Internet access and universal healthcare. If you were healthy and could use the Internet to find everything else you needed, from borrowing a tool to organizing a Scrabble game, you'd be pretty much set.

The other way the future could go is that out of economic necessity the government will approve some sort of feel-good pill that makes your external situation less important. You won't mind sharing a one-room apartment with 20 people if they are all on the same pill. And you won't require much in terms of entertainment. So long as the pill is cheap, which it could be if the government declares it so, then people won't need much to be happily retired. The pill could be outlawed for anyone under 65, just so the wheels don't completely fall off the economic engine.

It would be impossible for the government to approve a pill that simply made you feel good. Society frowns on that sort of thing. But imagine the inventors of the pill being smart about how they describe the pill's impact. Instead of saying it makes you happy they could say it makes you less fussy. You won't mind eating that cat food instead of steak because you're suddenly less fussy when medicated. Even the most religious person would agree that living like a monk can be a good thing. Fussiness is the influence of the devil. The government would surely approve an anti-Satan pill.

Which way do you think it will go: more sharing or more medication?

Dog Food

Mon, 08 Dec 2008 01:00:01 PST

Comic strips are supposed to be an exaggerated world, but lately it has been hard to concoct ideas for Dilbert that are more absurd than reality. For example, when Dilbert's company develops a new product, I want it to be worse than any product you have ever seen in real life. I thought I was ahead of the curve until I saw my dog's reaction to her dog food. Let's start by saying she doesn't care for it.

Now you might think this is not the least bit unusual. Pets have preferences just like people, so it should be no surprise that she wouldn't like a particular brand of dog food. At least that's how I saw it until I reflected on the things she DOES like to eat, including every other type of food, the cat's food, mud, twigs, bugs, cat vomit, and her own turds.

If you ask me, the bar has been set low. How bad does your company's product have to be before your target market prefers eating its own poop? If I wrote a comic along those lines it would be too absurd to work even as comedy.

Our type of dog, a toy Australian Shepherd, is notorious for chewing up everything it can get its teeth into. As I write this she is sniffing around the office looking for something to beaver into splinters. It's a big problem. So we bought some sort of spray from the pet store that is intended to keep her away from prized objects. Apparently there is some subtle dog-only scent in this spray that she will find unpleasant. As you might have guessed already, the dog that sniffs asses and eats snails off the sidewalk was unfazed by this so-called unpleasant odor.

Dog training didn't work either. This breed learns quickly, and the first thing it learned is that we wouldn't punish it for chewing the bejeezus out of things. She knows she has a free pass. Her worst case scenario is some stern sounding baby talk, and she likes the attention.

But I think I have a solution. Tomorrow I'm going to rub her dog food on anything we don't want her to gnaw on. That should work. The only downside is that the entire house and all of our clothing will smell like something that would make a dog say, "No thank you. I prefer feces."