Wednesday, March 20, 2019

Commentary: 'The Mistakeless vs. Mistakeful Economy' by Aaron Clarey

The Wyoming 3 

Let me explain to you what I call "The Wyoming 3."

Whilst living in Wyoming you could reliably rely upon your fellow Wyomingians to never get it right the first two times.  You would order a chicken sub and the "sandwich artist" would make you a steak and cheese.  You would point out it's not a steak and cheese, return it, only to get back a turkey club.  On the third try the "sandwich artist" would finally get it right, but then you'd have the wrong bag of chips or the wrong type of bread, in which case you'd give up and just accept that you're dealing with a mental retard Wyomingian.

Or perhaps scheduling a dental appointment.  You would originally schedule your cleaning for 11AM on Thursday.  There you are at 1055AM and the secretary then informs you they didn't have you down in the book.  You would reschedule for later that afternoon at 2PM when there was an opening.  But after returning a second time, there was yet another scheduling snafu.  "Come back at 4 and I'll squeeze you in," which you did and the dentist was ready for you this time, though the cleaning job was so poor you knew you'd have to repeat this scheduling dance 3 months later.

I could go on, but the larger point is the amount of time we waste in this economy not doing things right the first ime.  And not just our time, but the time of the businesses we're trying to do business with.  Had the sandwich artist got the order right the first time, he/she would be able to immediately serve the next two customers in the same amount of time, producing thrice the GDP.  Had the dentist had his act together, he could have easily eeked out two additional paying clients.  And who knows what the customer could have done with the hours of time wasted on these peoples' mistakes?  He could have worked some more. Spent more.  Or just enjoy his life.


Now think about this.  Be it somebody getting your order wrong.  Scheduling problems.  Somebody driving slow in the left lane.  Or a woman ordering and returning a pair of shoes she "didn't like," what percent of our time (and thus economy) is wasted dealing with and remedying "mistakes?"  What percent of our time is ACTUALLY DOING NEW, PRODUCTIVE, WEALTH-PRODUCING activities versus merely cleaning up the fuck up of others?  And when you think about this, it's DEPRESSING.

In my days in banking nearly all my time was spent dealing with mistakes.  I didn't spend my time on new loans, for new businesses that had their act together and were about to reliably employ 12 new people as they produced $40 million in annual production at a new factory.  It was dealing with delinquent loans, loans in default, collateral that had never been maintained, dead beat clients, and in general "other people's fuck ups."

For you white collar workers in corporate America, AT LEAST half your time is dealing with other people's mistakes.  Your underling didn't scan the documents in right.  The data in the spreadsheet is wrong.  Your boss forces everybody to attend a meeting that only is meant for 4 people. And yes even YOU make mistakes, as we are human after all.  How much of your daily time is spent simply remedying mistakes.

And manufacturing or the trades.  Oh heaven help you if a mistake is made. The basement gets flooded because some idiot plumber didn't plumb the pipes right.  A fire ensues because a light was wired wrong. Or GM has to recall MILLIONS of cars costing BILLIONS of dollars because some idiot engineer designer never worked on a car, only designed them in his comfy white collar office.  When you add it all up, I'd say at least half of our GDP is merely a broken window fallacy.

There is, however, another problem. An cascading component of mistakes that makes their costs exponential.  For example, allow me to regale you with a tale that will be long and painful, but you'll understand why.

A 2 Second Mistake Costs the US Economy $3,000

I needed to pay a Canadian some money for some services he rendered.  All I had to do was mail him a check and it "should" work.  His Canadian bank would accept American checks.  Three weeks later we are wondering whether it was the US post office or the Canadian post office that lost the check.

Waiting on the mail wouldn't have been an issue, but my Canadian colleague had a rather large bill due that week and he needed the money.  So I decided to cancel the check, and send him a wire transfer.  Thankfully, I was traveling through Arizona at the time and my bank has branches there.  But when I pulled into the Arizona branch of my bank, they were having troubles getting the wire to go through even though I had all the correct information.  Soon it was an hour, then 2, and by the 2 and 1/2 hour that branch had THREE tellers AND the branch manager trying to get my wire to go through.  That's 10 hours of all of our time working on something that should have been done in 20 minutes total time.

I was informed they could not get it to go through so I would have to return to Phoenix the next day because I would have to physically sign the wire transfer.  I was staying in Tucson.  So I drove the 2 hours to Tucson.  Woke up the next day, DROVE BACK TO PHOENIX, and returned to the branch.

They still couldn't get it to go through.

After another hour of the entire branch trying to get the wire to go through, I figured out I could pay my friend via a combination credit-card-to-paypal technique, though it might cost me some fees.  This actually worked (because yours truly was in charge) and I told the bank to cancel the wire, cancel the check, and that I would be reconsidering my banking relationship with them.

But it doesn't end there, because they canceled the wrong check.

Fast forward a week later and a vendor of mine is wondering why my check had been canceled.  I said, "Your check shouldn't have been canceled!"  Panicking I looked up whether I had enough funds in the account.  He wasted his time going to the bank to deposit the check, and now I shamefully probably didn't have enough money in the account.  After looking up my balance, no, there was plenty of money in the account.  It was those incompetent bastards in Phoenix who canceled the wrong check.

Now, after all that, let me ask you this:

How much in total wasted time, money, and lost economic production did the ONE mistake of the post office not delivering ONE letter cost?

It's impossible to measure, but it's easily within the thousands of dollars.

One dipshit moron at either the US or Canadian post office made a 2 second error, and that 2 second error destroyed around $3,000 in GDP.  And when you consider this cascading effect, it makes you wonder if damn well near 85% of our economy is merely cleaning up other people's broken-window-fallacy-mistakes.

There's Good News

There is, however, a silver lining to this "The-Economy's-Full-of-Morons" cloud.  Because while politicians, democrats, republicans, socialists, and producers all focus on how to grow the economy and divvy it up, "mistakes" present a non-political opportunity to help grow and boost the economy.  We needn't talk about lowering taxes, or increasing spending.  We don't have to worry about deficit spending or debts.  If we can just get people to make less mistakes and do things right the first time, I argue we could make the economy boom well beyond this paltry 3-4% RGDP growth everybody seems to get excited about.

There are other examples of this where there are "non-political" ways to boost the economy.  Making American women thin again (no matter how distasteful you might find that...though men won't) would seriously make the economy boom.  Men would wake up invigorated, work more, create more, perhaps colonize Mars next week.  Eliminating worthless degrees from colleges and universities would free up trillions in spending from young people, not to mention prevent them from crippling their financial futures.  And employers allowing everybody to telecommute from home who can would save us billions in unnecessary travel, inflated rents, and money spent on bridges and roads.  But mistakes are so universal, so atomic, so endemic to the American people and American society, that if you can just get people to make 20% less mistakes, I'd argue real-non-broken-window economic production could easily go up by 40%.

And There's Bad News

But while I've just given you this glimmer of hope, this potential chance that we could solve all our economic problems by focusing on mistakes AND IT WON'T COST US A PENNY, let me snuff out that hope as I pull the rug out from underneath you.  Because while we may like to whittle the Wyoming 3 down to the Wyoming 2, or the national equivalent of "The US 2" down to "The US 1.25," the truth is our country is going in the opposite direction.  We are making more mistakes and will continue to make even more mistakes in the future.  And the reason why is that your average American is becoming dumber, lazier, and less moral.

First, dumb people breed more than smart people.  We are seeing Idiocracy in the making.  You could also look at it as "smart people are removing themselves from society," resulting in a dumber average future labor pool overall.  But whichever the case, with a dumb population comes more mistakes.  Alas, I predict the US national standard will become the "Wyoming 3" (while Wyoming no doubt will have decayed to "The Wyoming 7").

Second, immigration.  Immigrants are predominantly coming from more corrupt countries.  I understand why immigrants would like to escape corrupt countries, they themselves may not be corrupt and would like to escape the corruption for a better future.  But how did those countries become corrupt in the first place if they were democracies?  Low economic growth, high birth rates, poverty, corruption, crime are at least a partial reflection upon the culture and the people from those countries.  And when immigrants reflect their native population in terms of crime, welfare fraud, corruption, etc., in the US, well you've merely imported more mistakes.  You can expect this demographic shift to cause more mistakes in the future.

Finally, the domestic population.  Don't think that just because you were born in the Whitey-McWhite-White suburbs that you are somehow competent, sharp, and mistakeless.  Matter of fact, you're probably worse.  You're spoiled.  You're pampered.  You're lazy.  You never worked a real job in your life.  The millennials are the epitomal example of a mistake, wasting their youth on the most spectacularly stupid degrees and careers.  Worse, they're more likely to sue you for "an unsafe working environment" or false sexual harassment accusation.  You'll WISH they merely scanned the documents in wrong as you're facing a $50 million sexual discrimination suit.  And you'll beg to make all you're employees Wyomingians.

In the end my economic spidey senses put the chances of a "Mistakeless Economy" on par with American women getting thin again - zero.  You can fully expect a "Mistakeful Economy" where the US starts to represent a dysfunctional South American democracy where the people, on the granular level, are just too stupid, making too many mistakes,  for anything to get done.  You can expect corruption to increase, bribery to grow, traffic to increase, single moms to breed, talent-reality shows and everything else that comes with being California a solid, corrupt 2nd world country.  And keep in mind, none of this can be prevented through taxation, spending, or any other traditional political-economic solutions.  It's cultural and biological.  It's doomed to happen.

So I suggest you kick back, pour yourself a drink, get yourself a vasectomy, and Enjoy the Decline, because that's all you're going to be able to do.

_____________________

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Editor's note: This article was originally published at Captain Capitalism and has been rerun with permission.

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