D&D was invented in 1974 by one Gary Gygax, whose father was a violinist for the Chicago Symphony Orchestra. (This strikes me as significant, somehow.) Gary moved at an early age to Lake Geneva, Wisconsin, where he founded TSR Hobbies, the maker of D&D.
Although Gygax left the company in the mid-1980s, TSR today continues to crank out D&D rule books, D&D miniature playing pieces, and all sorts of other D&D paraphernalia in quantities that make one wonder about the nation’s mental health. By means of a cunning stratagem (I asked somebody at the office), I managed to get my hands on a couple of those sacred rule books, and let me tell you, R. buddy, this game is weird.
The basic idea in your run-of-the-mill Go Fish-type game is to get all your opponent’s cards or all his checkers or some other readily grasped commodity. Not so with D&D. Here is a quote from Mr. Gygax on the subject: “The ultimate aim of the game is to gain sufficient esteem as a good player to retire your character — he becomes a kind of mythical, historical figure, someone for others to look up to and admire”. If what you’ve been playing up till now is Parcheesi you ain’t ready for this.
To play D&D you need at least two acolytes, who play under the guidance of a vaguely Mansonesque personage called the Dungeon Master (DM). By means of various murky protocols involving the use of charts and dice, each player establishes the persona of the “character” he or she will manipulate in the game, who typically ends up (if male) being an antisocial cutthroat of some sort, or (if female) possessed of large, grapefruit-like breasts. I deduce the latter from studying the illustrations in the book. Admittedly I was looking at a very old edition. Perhaps the newer ones are more PC. It’s always the way. Apart from predictable characteristics like strength and intelligence, players also have to determine such baffling minutiae as their likelihood of contracting communicable diseases or becoming infested by parasites. Why these things are important I have no clue. I’m just telling you what the rule book says.
The preliminaries having been dealt with, the players are led through an imaginary dungeon devised by the DM in search of treasure or some such. On the way, they will encounter various obstacles and evil creatures, which they will have to defeat or evade.
The concept seems simple enough. It’s the application that throws me. There are two main problems: (1) there are one billion rules, and (2) the game requires nonstop mathematical finagling that would constipate Einstein. The rule book is laden with such mystifying pronouncements as the following: “An ancient spell-using red dragon of huge size with 88 hits points has a BXPV of 1300, XP/HP total of 1408, SAXPB of 2800 (armor class plus special defense plus high intelligence plus saving throw bonus due to h.p./die), and an EAXPA of 2550 (major breath weapon plus spell use plus attack damage of 3-30/bite) — totalling 7758 h.p.” Here we have a game that combines the charm of a Pentagon briefing with the excitement of double-entry bookkeeping. I don’t get it.
If you want to know more about Dungeons & Dragons, you can find D&D paraphernalia at many hobby and game stores. For the location of the outlet nearest you call 1-800-384-4TSR. Contrary to what you might think, all calls to this number are NOT immediately reported to the police.
Cecil Adams, “What’s the deal with Dungeons and Dragons?”, The Straight Dope, 1980-09-26.
November 17, 2024
November 12, 2024
“Nice business ya got there, Patreon. Wouldn’t want anything to happen to it …”
Above the paywall, Ted Gioia discusses Apple’s latest attempt to cut itself a nice big middleman’s slice of the indy creator market by putting the thumbscrews to Patreon:
Can Apple really charge a 30% tax on indie creators?
What Apple is now doing to indie creators is pure evil — but this story has received very little coverage. Journalists should pay attention, because they are under threat themselves.
Apple is now putting the squeeze on Patreon, a platform that supports more than a quarter of a million creators — artists, writers, musicians, podcasters, videographers, etc.
These freelancers rely on the support of more than 8 million patrons through Patreon, which charges a small 8-12% fee. Many of these supporters pay via Patreon’s iPhone app.
Earlier this year, Apple insisted that Patreon must pay them a 30% commission on all new subscriptions made with the app. In other words, Apple wants to take away close to a third of the income for indie creators — almost quadrupling their transaction fees.
This is the new business model from Cupertino, and it feels like a Mafia shakedown. Apple will make more from Patreon than Patreon does itself.
The only way for indies to avoid this surcharge is by convincing supporters to pay in some other way, and not use an iPhone or Apple tablet.
This is what happens when Apple decides to treat a transaction as an “in app payment” — as if an artist’s entire vocation is no different than a make-believe token in a fantasy video game.
But you can easily imagine how almost anything you do with your phone could be subject to similar demands.
I’ve been very critical of Apple in recent months. But this is the most shameful thing they have ever done to the creative community. A company that once bragged how it supported artistry now actively works to punish it.
November 8, 2024
The McDonald’s ice cream machines are always broken because of bad IP laws
Even if you never to to a McDonald’s yourself, you’ve undoubtedly heard that the ice cream machines are always broken. I hadn’t really given it any thought — it’s been years since I visited one of the restaurants and I don’t eat much ice cream — but Peter Jacobsen explains the weird and infuriating reason for the phenomenon:
Image Credit: Magnus D via Wikimedia | CC BY 2.0
How could it be that the ice cream machines at McDonald’s are so consistently broken? It turns out that, until just recently, it was illegal to hire most people to fix them. To understand why, we’re going to have to take a detour into the world of intellectual property.
DMCA Woes
So why has it been illegal for McDonald’s to hire people to fix their ice cream machines? Well, that’s where the Digital Millennium Copyright Act (DMCA) comes in. If you’re familiar with the DMCA, this is probably confusing to you.
Generally the DMCA is a big concern on content creation platforms like YouTube. If someone uses copyrighted music, he or she gets DMCAed. This is slang for when a video gets its monetization redirected to the owner of whatever copyrighted content was used.
DMCA takedowns draw a lot of ire, because the law is clumsily applied and often even legitimate uses of copyrighted content (e.g., fair use) are punished.
But the DMCA extends beyond content creation, as chronicled by Elizabeth Chamberlain of iFixit, an organization dedicated to ensuring that product owners have the right and ability to fix their property. Many machines ranging from phones to ice cream machines utilize copyrighted software to function. Sometimes, this software limits product users more than they’d like.
For example, iPhone software locks users into particular user interfaces. If a user wants to customize past some point, he’s going to have to modify the software more than the company intends. This process, called jailbreaking, involves breaking through “digital locks”. The DMCA often interprets breaking these locks as a violation of the intellectual property of the copyright holder.
The problem gets even worse when you recognize that fixing things — say, McDonald’s ice cream machines — means breaking past those digital locks. This means anyone hired to repair the machine would need an official blessing from the manufacturer.
However, things have changed. As of October 18th, the opening of digital locks for “retail-level commercial food preparation equipment” is now exempt from this DMCA rule. McDonald’s will now be able to hire from a larger group of people to fix their ice cream machines.
DMCA has allowed a lot of intellectual property owners to collect unearned rents while neglecting the needs of the customers who’ve bought, leased, or rented things that incorporate their IP.
Note, this is only an exemption to the rule. The rule itself has not changed. Second, other regulations still hamper McDonald’s franchise owners from fixing their own machines. As Chamberlain points out:
While it’s now legal to circumvent the digital locks on these machines, the ruling does not allow us to share or distribute the tools necessary to do so. This is a major limitation … few will be able to walk through it without significant difficulty.
It is still a crime for iFixit to sell a tool to fix ice cream machines, and that’s a real shame … Without these tools, this exemption is largely theoretical for many small businesses that don’t have in-house repair experts.
So your chance of getting a McFlurry has improved, but you can’t quite celebrate a total win yet.
The battle against these DMCA laws isn’t limited to ice cream machines. The “right to repair” movement spearheaded by organizations including iFixit has already battled for exemptions for medical devices, consumer devices like phones and tablets, vehicles, and assistive technologies for people with disabilities.
November 3, 2024
The end of the “cheap streaming era” is at hand
Ted Gioia explains why your streaming services are going to be jacking up their prices — if they haven’t already done so:
I got a request to explain why streaming subscription prices are so damned high — and getting higher.
This came in response to a chart I shared two days ago:
And it’s not just Disney.
All the streaming platforms are jacking up prices. I still subscribe to five different streaming services—down from six previously. Every one of them raised prices this year, and always by more than the inflation rate.
Here’s what Spotify is doing:
What’s going on? And will it continue?
I recently described this as an “endgame strategy” — but that might be confusing to readers.
Endgame is a term drawn from chess, where it refers to a body of wisdom about the final moves on the board. But business is like chess, so I frequently analyzed endgame situations back in my days at the Boston Consulting Group and McKinsey.
I now see these endgame strategies getting implemented in various media, entertainment, and streaming businesses. But almost nobody inside those businesses wants to talk about it.
So let me lay it out for you.
The Entertainment Industry Is Adopting an Endgame Mindset
You pursue an “endgame” strategy when demand for your business hits a wall, and it’s hard to attract new customers. The most typical endgame strategy is to cut back investment into new products and services, while raising prices sharply.
You’re willing to accept some loss of customers, because you’re now squeezing more profit-per-user out of your remaining consumers — who stick with you out of loyalty or habit or inertia.
These are your sheep, ready to be shorn.
Profit per customer is now the key metric driving your business. It’s more important than innovation or growth or artistry or any of those old fashioned ideas.
That’s why, for example, Netflix won’t share data on the number of subscribers anymore. They claim this is no longer relevant to their business model — and they aren’t lying.
Price increases are now the engine of their business.
November 2, 2024
QotD: UBI discourages low-income workers
Earlier this month, a cross-border team of North American economists published the results of a landmark study, probably the best and most careful yet done, of how low-income workers respond to an unconditional guaranteed income. Not so long ago this would have been a plus-sized news item in narcissistic Canada, for the lead author of the study is a rising economics star at the University of Toronto, Eva Vivalt. The economists, working through non-profit groups, recruited 3,000 people below a certain income cutoff in the suburbs of Dallas and Chicago. A thousand of these, chosen at random, were given a thousand dollars a month for three years. The rest were assigned to a control group that got just $50 a month, plus small extra amounts to encourage them to stay with the study and fill in questionnaires.
That randomization is an important source of credibility, and the study has several other impressive methodological bona fides. If you have an envelope to scribble on the back of, you can see that the payments alone were beyond the wildest dreams of most social science: most of the money was provided by the AI billionaire Sam Altman. But the study also had help from state governments, who agreed to forgo welfare clawbacks from the participants to make sure the observed effects weren’t obscured by local circumstances. Participant households were also screened carefully to make sure nobody in them was already receiving disability insurance. (Free money doesn’t discourage work among people who can’t work — or who absolutely won’t.) And the study combined questionnaire data with both smartphone tracking and state administrative records, yielding an unusually strong ability to answer difficult behavioural questions.
The big picture shows that the free cash — a “universal basic income” (UBI) for a small group of individuals — discouraged paying work, even though everybody in the study was starting out poor. Labour market participation among the recipients fell by two percentage points, even though the study period was limited to three years, and the earned incomes of those getting the cheques declined by $1,500 a year on average. There is no indication that the cash recipients used their augmented bargaining power to find better jobs, and no indication of “significant effects on investments in human capital”, i.e., training and education. The largest change in time use in the experiment group was — wait for it! — “time spent on leisure”.
Colby Cosh, “Universal basic income is a recipe for fiscal suicide (for so many reasons)”, National Post, 2024-07-30.
October 30, 2024
Zuckerberg’s bad bet on Virtual Reality
Ted Gioia notes the anniversary of Mark Zuckerberg’s worst financial decision — the plunge into virtual reality:
A big birthday happens tomorrow. But don’t expect a celebration.
There will be no party, no disco. There will be no cake, no clown, no bouncy house for the kids. No Marilyn Monroe cooing the birthday song.
Just dead silence. But make no mistake — this is a very expensive birthday.
Exactly three years ago, Mark Zuckerberg placed a huge bet on virtual reality. On October 28, 2021, he even changed the name of his company — from Facebook to Meta.
A new company was born. But that’s now a huge embarrassment.
The name Meta is a lasting reminder of the most foolish decision Zuck ever made — even worse than Facemash or those ugly T-shirts.
Of course, that’s not how he saw things three years ago.
“Meta’s focus will be to bring the metaverse to life,” the company announced. “In the metaverse,” Zuckerberg bragged, “you’ll be able to do almost anything you can imagine.”
There was a catch — the tech billionaire needed to convince millions of people to wear virtual reality headsets.
But they looked ridiculous — you literally had to wear blinders if you wanted to enter Mr. Zucker’s neighborhood.
The very next day, I declared that “Meta is for losers”.
“This will never be cool.”
Zuckerberg was “making the wrong bet”, I warned — and gave my reasons:
The interface looks goofy and cartoonish. Instead of entering the gritty, exciting world of Blade Runner, you’re trapped inside a bad episode of Family Guy …
And users will look creepy too. You need to lock yourself into a headset to get the full benefit of the metaverse — and there’s no way that Zuckerberg can make that look cool. The people who spend hour after hour in his metaverse will be the subject of jokes and mockery …
They will be nerds and incels and the most disgruntled members of society, each desperate for escape.
Mark Zuckerberg eventually figured this out. But the company lost more than $20 billion over the next two years in a desperate attempt to convince normal people to abandon reality and enter his fake world.
Even as consumers resisted, Meta refused to admit it had made such a colossal mistake. Just last year, Zuckerberg still denied that he was abandoning virtual reality.
“A narrative has developed that we’re somehow moving away from focusing on the metaverse,” he told shareholders. “So I just want to say upfront that that’s not accurate.”
Then he did exactly that — retreating from the metaverse he had spent so much money building.
Fortune warned three months ago that Mr. Z’s metaverse “may finally be running out of cash”. Then in August, Meta cancelled the development of a next generation VR headset.
October 24, 2024
It’s called “piercing the corporate veil” and it’s a terrible idea
Tim Worstall explains why the EU’s latest brain fart is not just a bad idea in its own right, but a truly horrific precedent for the future:
Elon Musk at the 2015 Tesla Motors annual meeting.
Photo by Steve Jurvetson via Wikimedia Commons.
… But now, this, now this is even more important than that. We can deal with free speech by the judicious use of lampposts. This is worse:
The European Union has warned X that it may calculate fines against the social-media platform by including revenue from Elon Musk’s other businesses, including Space Exploration Technologies Corp. and Neuralink Corp., an approach that would significantly increase the potential penalties for violating content moderation rules.
Under the EU’s Digital Services Act, the bloc can slap online platforms with fines of as much as 6% of their yearly global revenue for failing to tackle illegal content and disinformation or follow transparency rules.
In English law that’s known as “piercing the corporate veil”. It’s also something we don’t do. Because that corporate veil is the very thing, the only thing, that makes large scale economic activity possible.
It has actually been said — and not just by me — that the invention of the limited company is the third grand invention of all time. Agriculture, the scientific method, the limited company.
Before the limited co everything was done through partnerships. Every individual involved in the ownership of something was liable for all of the debts of that thing. Which, when you’ve got 5 or 10 blokes trading isn’t that bad an incentive upon them to be honest.
Now think of large scale activity. We want a blast furnace — plenty of folk say Britain should have one after all. £3 to £5 billion these days. OK. No one’s got that much. So, we need to mobilise the savings of many thousands of people to go build it. But without limited liability that means all of those thousands are liable for all the debts — off into the future — of that blast furnace.
“Invest £500 in the new, new British Steel. And if we fuck up then in 10 years’ time they’ll come and take your house.”
Err, yes.
Large scale economic activity depends upon being able to separate the debts of one specific activity from the general economic life of all its backers. If this is not true then no one will invest in large scale economic activity. Therefore we won’t have large scale economic activity. Which would, you know, be bad.
October 19, 2024
The worst month for legacy media … so far
Ted Gioia has a (paywalled) post on the awful, terrible, bad, no-good month for the mainstream media. I think the headline needs an appropriate meme:
These events all happened in the last few days.
They are NOT unconnected:
- SEPTEMBER 24: The Financial Times reports that a Substack launched two years ago by Bari Weiss is now worth $100 million, and has just raised $15 million from investors.
- OCTOBER 1: One week later, journalist Taylor Lorenz announces that she is leaving the Washington Post to launch an online periodical on Substack. She plans to hire other writers and offer in-depth coverage of tech and internet culture.
- OCTOBER 14: Gallup announces the results of a new poll showing that trust in mass media has reached an all-time low.
Source – Gallup
- OCTOBER 15: The Wall Street Journal reports that bestselling novelist James Patterson is launching on Substack. He has sold 480 million books since publishing his first novel in 1976, but now will sell subscriptions to readers at a price of six dollars per month.
- OCTOBER 15: That same day the New York Times reports that the “queen of legacy media” Tina Brown — formerly editor of The New Yorker and Vanity Fair — is now launching on Substack. She is also charging six dollars per month.
Changing gender balance in occupations and in higher education
At Postcards from Barsoom, John Carter ruminates on the likely downward path of many institutes of higher learning as current gender balance changes continue:
An occupation that flips from male to female dominance invariably suffers not only diminished prestige, but also a decline in wages … which, once again, makes sense in the context of sexual psychology. A man’s income is one element (and a big element) of a woman’s attraction to him, but the reverse is not true; if women are paid less, this does not really hurt their value in the sexual marketplace at all, and so they will push back against it much less than men would. This is probably what lies behind the tendency of women to be less forceful when negotiating salaries.
To the point: ever since the 1970s, women have overtaken and gradually eclipsed men within higher education. There is a gap in enrolment, consistent across racial groups:
[…]
Across all programs, at all academic levels, American universities recently reached the threshold of 60% of the student body being female.
This will be a disaster for academia.
Indeed, it’s already a disaster. About a year ago, I analyzed a Gallup poll which revealed that the confidence of the American public in the trustworthiness and overall value of the academic sector had declined precipitously over the course of the 2010s.
In that article I examined several factors contributing to this DIEing confidence in the academy: the explosive growth in tuition fees, even as continuous relaxation of academic standards dilutes the actual value of a degree; the deplorable state of scholarship, with endless revelations of fraud, a seemingly irresolvable replication crisis, and the torrent of psychotic nonsense that passes for ‘research’; the increasingly frigid social environment enforced by the armies of overpaid, sour-faced administrators. Almost all of these, however, are related in some way or another to the feminization of academia.
And it is probably going to get much worse before it gets better.
As discussed in this recent article by Celeste Davis of Matriarchal Blessing, research on male flight indicates that a 60% female composition represents the tipping point beyond which men perceive an environment as feminine, which then leads to a precipitous decline in male participation. Davis appears to be some sort of feminist3, but I want you to look past that and give her article a read; it is very thorough, well-researched, and thought-provoking (and also the direct inspiration for this article).
[…]
Universities are belatedly starting to notice that male enrolment is dropping fast, particularly among white men (I wonder why…), and are starting to make noises about maybe thinking about perhaps looking into ways of trying to recruit and retain more men (albeit, not specifically white men).
This seems unlikely to succeed.
Even if universities are successful in setting up programs to increase male recruitment, they will be fighting an uphill battle against the sexual perception that has already set in. Once something is coded as being a feminine hobby, it is extremely difficult to change that code. While it’s very easy to list examples of professions that have switched from male to female dominance, off the top of my head I have a hard time coming up with examples of the reverse. This suggests that female dominance tends to be sticky. There’s no reason to expect this will be any different with academia, either within individual programs, or across the sector as a whole.
This is an entirely different problem from the one faced by female entryism. In the initial phases of female entry, the primary difficulty faced by women is that it is simply more difficult to compete with men – in the case of athletics, effectively impossible. Women must therefore either work extremely hard, or the work must be made easier for them. In practice, since the 1970s we’ve seen both of these, with “working twice as hard as the boys” predominating in the early years, and assistance from special programs predominating later on.
By contrast, the central obstacle faced by anyone trying to attract men to a female-dominated environment is that men are deeply reluctant to enter. As a third of young men told Pew when asked why they didn’t attend or complete university: they just didn’t want to. It isn’t because they can’t compete with women. They can, usually with ease, but competition is pointless because it will gain them nothing. Special programs to assist men are beside the point; if anything, they work against you, because the implicit message with any special program for men is that they need help to compete with women … thereby making competition even more pointless. “You beat a girl but you needed help to do it”, is going to impress the girls even less than beating a girl unaided.
October 18, 2024
QotD: Californian wine
Lawrence Osborne, The Accidental Connoisseur: An Irreverent Journey Through the Wine World, 2004.
October 12, 2024
Canadians don’t hate their banks enough
In the latest SHuSH newsletter, Ken Whyte follows up on an earlier item thanks to the many Canadians who responded with their own tales of woe in their dealings with Canadian banks:
Since I mentioned a couple of weeks ago that we have published Andrew Spence’s Fleeced: Canadians Versus Their Banks, the latest edition of Sutherland Quarterly, I’ve been inundated with people’s horror stories of their dealings with Canada’s chartered banks. Jack David’s tale in the above interview is a classic of the genre.
In Fleeced, Andrew lays out in aggravating detail how Canadian banks, although chartered by the federal government to facilitate economic activity in the broader economy, do all they can to avoid lending to small and medium businesses, never mind that small and medium businesses employ two-thirds of our private-sector labour force and account for half of Canada’s gross domestic product.
By OECD standards, small businesses in Canada are starved of bank credit, and when they are able to secure a loan, they pay through the nose. The spread between interest rates on loans to small businesses and large businesses in Canada is a whopping 2.48 percent, compared to .42 percent in the US — more than five times higher.
Why? Because Canada’s banks are a tight little oligopoly, impervious to meaningful competition. Their cozy situation allows them to be exceedingly greedy. Their profits and returns to shareholders are wildly beyond those of banks in the US and UK (and, as Andrew demonstrates, their returns from their Canadian operations are far in excess of those from the US market, meaning they screw the home market hardest.)
Our banks never miss an opportunity to impose a new fee, or off-load risk. From their perspective, small business involves too much risk — some of them will inevitably fail. The banks prefer that publishers and dry-cleaners and restaurateurs either finance themselves by pledging their homes, or use their credit cards to cover fluctuations in cash flow or make investments that will help them hire, expand, and grow. And that’s what entrepreneurs do. According to a survey by the Canadian Federation of Independent Business, only one in five respondents accessed a bank loan or line of credit. Half of respondents financed themselves, tapped existing equity and personal lines of credit, and about 30 percent used their high-interest credit cards.
By severely rationing credit and making it exceedingly expensive, Canada’s banks siphon off an ungodly share of entrepreneurial profit to themselves while leaving the entrepreneur with all the risk. Their insistence on putting their own profits above service to the Canadian economy is one of the main reasons Canada has such a slow-growing, unproductive economy and a stagnant standard of living.
There is much else in this slim volume to make your blood boil: exorbitant fees on chequing and savings accounts; mutual fund expenses that torpedo investments; ridiculous mortgage restrictions, infuriating customer service …
Fleeced: Canadians Versus Their Banks is a stunning exposé of the inner workings of our six major banks — something only a reformed banker and financial services veteran such as Andrew could write. He also explodes the myth that a bloated, uncompetitive banking sector is the price we have to pay for stability in times of financial crisis.
We are in desperate need of banking reform in Canada. Read this book and you’ll be shouting at your member of Parliament for prompt action.
QotD: From conspicuous consumption to junk science
Buck Throckmorton, “Organic Food & Anti-Vaxxers – Does The Fear of Safe Food Lead to Fear of Safe Vaccines”, Ace of Spades H.Q., 2019-12-08.
September 29, 2024
Fleeced: Canadians Versus Their Banks by Andrew Spence
In the latest SHuSH newsletter, Ken Whyte talks about one of Sutherland House’s most recent publications:
I could write about eight versions of this post based on the many revelations in Andrew Spence’s Fleeced: Canadians Versus Their Banks, the latest edition of Sutherland Quarterly, released this week. I’m going to run with the version most relevant to my fellow publishers and small business people in Canada.
Andrew lays out in aggravating detail how Canadian banks, although chartered by the federal government to facilitate economic activity in the broader economy, do all they can to avoid lending to small and medium businesses, never mind that small and medium businesses employ two-thirds of our private-sector labour force and account for half of Canada’s gross domestic product.
By OECD standards, small businesses in Canada are starved of bank credit, and when they are able to secure a loan, they pay through the nose. The spread between interest rates on loans to small businesses and large businesses in Canada is a whopping 2.48 percent, compared to .42 percent in the US—more than five times higher.
Why? Because Canada’s banks are a tight little oligopoly, impervious to meaningful competition. Their cozy situation allows them to be exceedingly greedy. Their profits and returns to shareholders are wildly beyond those of banks in the US and UK (and, as Andrew demonstrates, their returns from their Canadian operations are far in excess of those from the US market, meaning they screw the home market hardest.)
Our banks never miss an opportunity to impose a new fee, or off-load risk. From their perspective, small business involves too much risk — some of them will inevitably fail. The banks prefer that publishers and dry-cleaners and restaurateurs either finance themselves by pledging their homes, or use their credit cards to cover fluctuations in cash flow or make investments that will help them hire, expand, and grow. And that’s what entrepreneurs do. According to a survey by the Canadian Federation of Independent Business, only one in five respondents accessed a bank loan or line of credit. Half of respondents financed themselves, tapped existing equity and personal lines of credit, and about 30 percent used their high-interest credit cards.
(The banks, incidentally, claim they need to keep credit card rates around 20 percent because their clients are high credit risks when their own data shows the risk is minimal. They simply prefer to gouge customers. To a banker, forcing hundreds of thousands of small businesses to use their credit cards to finance their businesses rather than giving them proper small business loans at reasonable rates is great business.)
By severely rationing credit and making it exceedingly expensive, Canada’s banks siphon off an ungodly share of entrepreneurial profit to themselves while leaving the entrepreneur with all the risk. Their insistence on putting their own profits above service to the Canadian economy is one of the main reasons Canada has such a slow-growing, unproductive economy and a stagnant standard of living.
There is much else in this slim volume to make your blood boil: exorbitant fees on chequing and savings accounts; mutual fund expenses that torpedo investments; ridiculous mortgage restrictions, infuriating customer service …
September 26, 2024
Glimmers of hope for lower taxes on US taxpayers
J.D. Tuccille welcomes the discussion among the Presidential candidates about lowering the taxes Americans have to pay, and points out that the economic distortions of the current tax code (including “temporary” measures introduced during WW2) make everyone less well-off:
Three months after proposing to end federal taxing of tips — an idea promptly confiscated without compensation by Kamala Harris’s campaign — Donald Trump doubled down by saying “we will end all taxes on overtime” if he’s elected president. Without a doubt, millions of Americans who resent government’s ravenous bite out of their paychecks immediately began contemplating just how much of their income they could shield from the tax man that way.
Tips and Overtime for Everybody!
“Can someone get paid in primarily tips and overtime?” quipped the Cato Institute’s Scott Lincicome. “Asking for a few million friends.”
On a more serious note, the Competitive Enterprise Institute’s Sean Higgins thought exempting overtime pay “wouldn’t necessarily be a bad idea … but, overall, it is not likely to make that much of a difference to most workers because overtime isn’t that common”. He’d been more strongly supportive of exempting tips because that “would put more money directly in the pockets of working Americans without either costing employers more or raising prices for customers”. He also liked that freeing tips from taxation would “keep tipping out of the reach of the regulatory state”.
But what if overtime pay becomes more common precisely because it’s not taxed?
The people at the Tax Foundation expect that’s exactly what will happen, just as Lincicome joked. Thinking through the implications of exempting overtime pay from taxation, Garrett Watson and Erica York warned that “exempting overtime pay from income tax would significantly distort labor market decisions. Employees would be encouraged to take more overtime work, and hourly or salaried non-exempt jobs may become more attractive if the benefit is not extended to salaried employees who are exempt from Fair Labor Standards Act (FLSA) overtime rules.”
The Tax Foundation’s Alex Muresianu had a similar reaction to the proposals to exempt tips from taxes from both Trump and Harris. He thinks “the proposal would make more employees and businesses interested in moving from full wages to a tip-based payment approach”. He foresaw “substantial behavioral responses, such as previously untipped occupations introducing tipping”.
Of course, a world in which more Americans receive their pay beyond the reach of the tax man is a welcome prospect to many of us. If politicians want to phase out income taxes, even unintentionally, who are we to complain? Hang on a minute while I set up my virtual tip jar. In fact, there’s precedent for government policy around wages to cause major unintended consequences. Take, for example, employer-provided healthcare coverage.
Government Policy Has Distorted Compensation Before
“One of the most important spurs to growth of employment-based health benefits was — like many other innovations — an unintended outgrowth of actions taken for other reasons during World War II,” according to the 1993 book, Employment and Health Benefits: A Connection at Risk. “In 1943 the War Labor Board, which had one year earlier introduced wage and price controls, ruled that contributions to insurance and pension funds did not count as wages. In a war economy with labor shortages, employer contributions for employee health benefits became a means of maneuvering around wage controls. By the end of the war, health coverage had tripled.”
Given that health benefits became a substitute form of compensation to escape a wage freeze, it’s not difficult to imagine the United States moving toward a situation in which a lot more people receive the bulk of their pay from untaxed tips and overtime pay.
September 18, 2024
QotD: Freelancing
A wage slave gets time off in lieu. A freelancer fits swing shifts between the daytime work.
You always have to keep a Plan B ready in case you need to fill gaps in your schedule. From the start of my freelancing career, I was a sub-editor SLASH writer. This evolved into journalist SLASH author SLASH print production. Then journalist SLASH trainer SLASH digital publishing. Plans C, D and E have proved most valuable.
It’s a pain in the arse. You have to get multiple business cards printed. You have to keep multiple career histories and CVs updated – something that LinkedIn, which itself accelerated the fad for wankers inventing dipshit slasher job titles, cannot handle at all.
Alistair Dabbs, “Multitasking is a myth: It means doing lots of things equally badly. Some people just like to take the p*ss”, The Register, 2019-09-27.
