FT116: “Free stuff is rarely good stuff.” -Old Pithy

Posted by PITHOCRATES - May 4th, 2012

Fundamental Truth

Free is Nice but Sometimes it’s just worth Paying for Something Nicer

Often times when someone offers us something for free some of us say, “If it’s free it’s for me.”  Because we like free stuff.  Who doesn’t smile when they see the free samples in a grocery store?  Who doesn’t like getting the free swag from a visiting salesperson?  Sure they have a corporate emblem on them but free flashlights, pens, coffee mugs, baseball hats, etc., are nice.  Because they’re free.  But not everything free is nice.  Those free samples in the grocery store are.  Because they want to get you to buy some of that stuff they’re giving away free.  And if it doesn’t taste delicious that isn’t going to happen.  But the swag is often not high quality stuff.  Or something you would not necessarily buy yourself.  Sure, you’ll use a coffee mug at work with a corporate emblem on it.  But if you have to pay for that mug chances are you’re going to get something you like.  And when you do chances are it’s not going to have a corporate emblem on it.

While traveling in Tennessee once I stayed at one of those hotels that is just a little more than a motel.  One of those multi-floor things that’s longer than it is tall.  One of the hotel amenities was a free continental breakfast.  Consisting of coffee, tea, orange juice, rolls and jam.  Mmm.  Good.  But I passed.  Because within walking distance from this hotel sat a Waffle House.  And if you’ve ever eaten at a Waffle House you’ll know why.  The All Star Special breakfast.  With Pecan Waffles.  And, of course, hash browns scattered ‘all the way’.  Enough to put you into a food coma.  A comfortable food coma.  And I chose to pay for this delicious breakfast instead of eating the free one.  Why?  Because on a scale of 1 to 10 the free continental breakfast is about a ‘3’.  While Waffle House is a consistent ’11’.

I owned a full-size sedan that was pretty loaded.  It wasn’t a luxury car but it pretty much had everything a luxury car had in the way of comforts.  One day I had to take it back to the dealer for some warranty work.  Being a new car under warranty they gave me a free loaner to use while my car was in for service.  Talk about service.  The car they gave me, though, was a subcompact with no amenities.  Unless you call a roof and a couple of doors amenities.  This car didn’t have power locks or windows.  Or air conditioning.  And it only had an AM radio.  Which made for an unpleasant 45 minute commute one way during the dog days of summer.  I returned the free loaner the next day.  And rented a car with air conditioning.  It cost more.  But for me it was worth it.  Because I didn’t like getting drenched in sweat on the drive in to work.  Free is nice but sometimes it’s just worth paying for something nicer.

For-Profit Utilities pay Premium Wages for Electricians to Go Out in Storms to Start Repair Work for Profits

They say you get what you pay for.  They say that because you do.  Things you pay for will always be better than the things you get for free.  As noted above.  But in other ways as well.  Take your electric utility, for example.  Some people would like to get free electricity.  To have the government nationalize our utilities.  Then tax the rich to pay for both the installation and the maintenance of the electrical infrastructure.  So we the people can get free electricity.  But let’s take a closer look at this idea.  And see how free electricity can be worse than the kind we pay for.  By looking at something that happens all too often.  The electric power outage.

Consider two electric utilities.  One owned and operated by the government.  And one by a for-profit utility.  Which one do you think would have a greater incentive in getting that power restored?  The one that pays for that utility with taxes whether you use it or not?  Or the one that will lose money when those electric meters stop turning?  The one charging by the meter, of course.  Because they lose money during an outage.  Unlike the government.  Where the electric utility is just one of the many things they pay for with the taxes they collect.  And if they roll those taxes into your property tax bill you will pay those taxes at most twice a year.  Well, most of us.  Which means there will be no correlation between paying your taxes and using your free electricity.  Unlike with the for-profit utility. 

If the power goes out for a large section of the for-profit utility’s customers there will be an immediate interruption to their revenue stream.  So much so that they will pay premium wages for electricians to go out in storms to start the repair work.  To get those meters turning as soon as possible again.  Because time is money.  And the more time that passes with those meters NOT turning the greater the lost money.  Money that they can never get back.  Because people don’t have to buy extra electricity to make up for the electricity they didn’t use while sitting in the dark.  So people are much better off with a for-profit utility.  Because the for-profit utility and the people both want the same thing.  To restore that power as quickly as possible.  Albeit for different reasons.

The People Paying for Free Stuff have no Incentive to Pay for High Quality

Beggars can’t be choosy.  If you’re getting something for free the people giving it to you expect you to be grateful.  And they don’t want to hear you complain.  For however bad the quality is that they’re giving you it sure is a lot better than what you had before.  Nothing.  Worse, you’re now in their debt.  If they ask you for a favor it’s hard to say no after they’ve given you something for free. 

If you’re buying something for your family you’re going to make sure you get the best quality your money can buy.  If you’re barbecuing for your family it may be steaks and Italian sausage.  If your nieces and nephews are coming over it may just be hot dogs and hamburger.  If you’re buying for the kids in little league you may just buy the hotdogs.  Or volunteer to bring snacks.  And show up with one large bag of potato chips.

When it’s free you get what you pay for.  Not great quality.  Which is why free stuff is rarely good stuff.  Whether it’s swag, breakfast, a rental car, electricity or food at a picnic.  The people paying for your free stuff have no incentive to pay for high quality.  Which is why we should never expect high quality for anything we don’t pay for.  Including public education.  Public housing.  And, of course, public health care.  To name a few.  Each of which has a higher quality private counterpart.  For when we pay we have choice.  And because we have choice the private sector competes for us by offering higher quality.  Why?  For the same reason a for-profit utility provides better quality than a nationalized utility.  Because profits make things better.  And making a profit is the only thing that will get an electrician to climb a pole during a thunderstorm to restore our electric power.  Something we’re all grateful for.  Especially if you’re taking care of a sick child in bed.  Or a parent.

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FUNDAMENTAL TRUTH #86: “Smug, all-knowing condescension camouflages a vacuous philosophical basis.” –Old Pithy

Posted by PITHOCRATES - October 4th, 2011

Did the Ivy League make George W. Bush an Idiot?  And, if so, is Barack Obama also an Idiot?

Have you ever been belittled by a liberal?  After getting pulled into a conversation, say, about George W. Bush?  Or Ronald Reagan?  I have.  And often.  So often that I avoid these debates with liberals anymore.  Because you can’t debate with liberals.

I remember after George W. Bush won reelection.  Two liberals were having a discussion near me at work.  They just couldn’t believe how stupid the American people were.  One was a fifty year old hippy who still dressed like she was 20.  The other had a love affair with France.  Even loved Napoleon.  Funny.  As she hated George W. Bush for waging war.  And he didn’t wage half the war Napoleon did.

Anyway, I piped up.  I said why are Americans so stupid?  For reelecting George W. Bush?  They said because George W. Bush was an idiot.  I asked them to elaborate.  They did not.  Apparently, there was nothing more to say.  No specific examples.  No discussion of underlying philosophies.  Just that George W. Bush was an idiot.  Case closed.  An idiot, I might add, that was educated in their beloved liberal Ivy League.  The same Ivy League that educated Barack Obama.  And the majority of the power players in Washington.

Liberals know Everything and can Say Anything no matter how Silly and Asinine it Is

Of course, it didn’t end there.  Because I didn’t accept ‘he’s an idiot’ as an intelligible response to my question why were Americans so stupid, guess what?  I was stupid.  I was one of the great uneducated masses who should not be allowed to vote in their preferred world.  Then the ridicule came.

Their only response to my question was name calling.  Of the president.  And the American people.  No ideological discussion whatsoever.  And they laughed at me with that all knowing condescension.  They were liberals.  They knew everything.  And could say anything.  No matter how silly and asinine it was.  And because I question them I hated the poor.  I was a warmonger.  And a fascist.

The last was rather amusing.  Because I was a conservative.  Still am.  And conservatives hate fascism.  Or corporatism.  Big time government involvement in the private sector economy.  Like they want.  Making them the fascists.  Not me.  From what I could glean they were in favor of the state redistributing wealth.  Taking from the rich to give to the poor.  Like the hippy protestors of the Sixties.  They just wanted to stick it to the man.  Have sex (the old hippy had a bumper sticker saying something about being proud to be an ex-porn star.  I don’t think she was.  She just liked being provocative.  And having lots of sex.  Based on the conversations she had within earshot).  And, of course, decriminalize pot.

Liberals hate Corporations, Bankers and Republicans

They were your quintessential liberals.  Ignorant.  They hated Republicans because they want to take their freedoms away.  Because it’s Republicans that keep drugs illegal.  It’s Republicans that want to criminalize abortion.  Take away your welfare.  Who refuse to raise the minimum wage to a living wage.  Who let people get rich.  And refused to confiscate rich people’s wealth when they get rich.

They hate Republicans because they are too friendly to corporate America.  Who think more of their shareholders (the corporation owners who hire people for the express purpose of making a profit for them).  Than the American people.  And enslave the American people to maximize profits.  By charging high prices for expensive goods.  Charging interest on loaned money.  And tricking American people into living beyond their means and accumulating debt.  That they charge interest on.

Liberals hate corporations.  And Republicans.  They would like to abolish interest.  And all debt.  From sovereign debt.  To credit card debt.  Just make it go away.  And let the evil bankers just write it off.  They would like to have free health care for everyone.  And a minimum living wage for everyone.  Whether they work or not.  That’s their kind of freedom.  Of course, to have it they’ll have to bring back the institution of slavery.

Liberals Created an Aristocracy for themselves by Taxing the Productive People to Excess

Yes, you heard right.  Their freedom is another’s slavery.  For they want a welfare state.  Where the poor get everything they could ever want from cradle to grave.  And how do you pay for all of this free stuff?  By taxation, of course.  Before the government redistributes any wealth someone has to create it first.  People with jobs.  Or who own businesses.  People that have value that trade with others who have value in the free market economy.  We are traders.  And you can’t trade with someone who doesn’t produce anything of value.

Money came into being as a way to make this trading things of value easier.  People traded their things of value (goods and/or services) for money.  Then traded that money for other things of value they wanted.  It made going to the market a whole lot easier.  You didn’t have to find people to trade with who had what you wanted while having what they wanted.  You simply found what you wanted.  And paid for it.  With the money you had from selling your things of value.

Government grew from taxing these productive people.  At first just enough to provide the public goods of society.  Then liberals created an aristocracy for themselves by taxing the productive people to excess.  For liberals don’t create anything of value.  They get worthless college degrees and get worthless jobs.  In the public sector.  Or in the private sector that survives on public sector funding, i.e., crony capitalism.  They are parasites.  Living off of the productive people.  Who pay for the welfare state.

Houses are Built when Productive People Trade different Sets of Skill for Money

So let’s play make believe.  Let’s say the liberals get their way.  Like the old hippy and France lover.  Let’s say they take all the wealth from the rich.  They abolish all debt.  Make it a crime to loan money.  What will that do?  Make home owning a thing of the past for one.  Because most Americans could never buy a house without a mortgage.

Wait a minute, the liberals will scream.  That won’t happen.  Because government will just give houses to the people.  Really?  But who will build them?  If people can’t get a mortgage to pay a builder, how will the builder pay the carpenters, electricians, plumbers, roofers, etc., who build these houses?  People don’t work for free.  You see, these skilled trades trade their skills (carpentry, electrical, plumbing, etc.) with builders.  Builders trade their skill (financing and construction management) with skilled trades.  Banks trade their skills (mortgage banking) with builders.  This is how people build houses.  Productive people trade different sets of skill for money.  The end result is that people can get a mortgage and buy a house.  With the money they earn from trading their skills.

So if the liberals get their way and get rid of the things they hate then there is only one way to build houses.  Slavery.  Forcing carpenters, electricians, plumbers, etc, to work for the state.  For free.  Like a slave.  So the state can redistribute their wealth (i.e., their skill) to others.  Because people won’t willingly give their skills away for free.  That’s why they join unions.  To get the best deal they can get for their skills.  Which is another thing liberals will have to get rid of to live in their utopia.  Unions.

Liberals are about as Ignorant as they Come and have no Understanding of Basic Economics

Liberals have a smug, all-knowing condescension for people who don’t share their views.  In their minds they are brilliant people.  Because they parrot what other liberals say.  Because in their minds they think that makes them sound brilliant.  But they’re not.  They are about as ignorant as they come.  They have no understanding of basic economics.  And their pretentious airs only camouflage a vacuous philosophical basis.

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