Good Intentions Don’t Equal Good Policy

"There are no solutions, only trade offs." – Thomas Sowell

What if I told you seat belts were used on airplanes long before they were used in cars. 1930's – Airplanes used seat belts. 1950's – Cars start using retractable seat belts. 1959 – Volvo introduces the first three-point seatbelt system. 1966 – Congress passes the National Traffic and Motor Vehicle Safety Act.

The Opportunity Cost of Safety

Reacting to several high-profile crashes in the first decade of the 1950s, Congress passed the Federal Aviation Act of 1958. The legislation began the government’s regulatory march toward better safety requirements in commercial aircraft. The next great seat belt struggle in America erupted over their use in automobiles. Consumer advocate Ralph Nader, whose popular 1965 book, Unsafe at Any Speed, was a brutal indictment of the auto industry’s safety record, based much of his arguments on DeHaven’s work. In 1953, DeHaven and Elmer Paul from the Indiana State Police, founded the Automotive Crash Injury Research Project (ACIR). DeHaven next joined forces with Dr. William Haddon in 1966 to establish the National Safety Bureau. At last, through another act of Congress, Title 49 of the United States Code, Chapter 301, Motor Vehicle Safety Standard took effect on January 1, 1968. The federal law required all vehicles, except buses, to be fitted with seat belts in all designated seating positions. The struggle for meaningful enforcement of the regulation by states, not to mention garnering public support and compliance with the measure, would take another 30 years.

Aviation requirements for basic safety features, including passenger safety belts, were codified in 1972 with occasional updates ever since. Beyond a bit of change-up in the fabric used for lap belts, these passive restraints with their antiquated lift-lever buckles have remained the same for decades.

From the years of 1950s-1960s the average airplane related deaths per year was near 1,200, while car accident-related deaths were an average of 33,000. Years after the enforcement of seat belts on planes in 1960s-1970s the average car related deaths in America grew to an average of 54,000 a year. Over 20k more people died in car accidents each year after seat belts were required on planes. Why is this related?

Economics is why it’s related. When one decision of how to use resources to tackle a problem is made it is usually at the expense of another problem it creates or could have been avoided. We know this phenomenon as, Opportunity cost. When we ask for more safety on the airplanes due to death or injury, the solution was to add seat belts. That solution raised the cost of each airline ticket because you know businesses never see inflation. It is transferred to the consumer at a higher cost of doing business. It is why inflation is at record highs and so are corporate profits today. How does that make sense? Well, there’s your answer. Corporation transferred the cost of installing seat belts through the price hikes of plane tickets. And when the cost to fly became more reasonable than the cost to drive, more people opt to drive instead of flying. And because more people opt to drive than to fly, more cars were on the road, which nearly double the accidents seen in the previous decade.

So, as you can see there’s no solutions to problems, only tradeoffs. As we attempt to save 1,200 lives, we unintentionally caused 20k more to an end. Fast forward to present day issues. In todays time the political environment is more polarized than ever before. And the agendas of a few have the many wrapped into so many delusions that they themselves are exhausted with thinking. There are far more gay conservatives than they will have you believe and far many middle aged white men who are republican enjoy marijuana and their favorite person in the world is some African American whom they share views with. Yes, we are all different but one thing that we should all focus on in today's election season is not what we disagree on but what are the things we have no coils with. I would assume that would be something like saving 1,200 lives to kill 20,000 is a stupid idea to begin with.

Emotions over Economics?

Today we have inflation in every market category. And businesses have transferred the cost to consumers from every corner of the nation. And that’s fine as long as the consumer income is growing fast enough to keep up. So it may be alarming to know that layoffs by U.S. companies over January and February touched the highest since 2009, with the tech sector accounting for more than a third of the over 180,000 job cuts announced, a report showed on Thursday.

In February alone, layoffs in the United States stood at 77,770, more than five times higher than the 15,245 job cuts announced a year earlier, according to the report from employment firm Challenger, Gray & Christmas Inc.

The writings on the wall. The data is out. And one thing for no one we have elected or in authority will tell you what’s about to happen before it does. In fact, they will just ensure that you don’t pay attention. In 2007, the housing crisis deepened. Banks and hedge funds that had invested big in subprime mortgages were left with worthless assets as foreclosures rose. The damage reached the top echelons of Wall Street.

At the Oct. 30 meeting, Janet Yellen, then-president of the Federal Reserve Bank of San Francisco, said the economy faced increased risks. But she hardly predicted anything dire. "I think the most likely outcome is that the economy will move forward toward a soft landing," she said.

SOUNDS FAMILIAR DON’T IT? That was in 2007. Well what did she say just 5 months ago?

As we push for equality in all fields, ask yourself this. Is it more important that the person doing the job looks the way we would like or that the person can do the job? And what would be the tradeoffs? One thing for sure is while they are all focused on having us hate each other, NO ONE'S WATCHING THE ECONOMY! And what happens in the economy affects us all! And shouldn’t that be our priority? Not which affects a few but what issues affect everyone first. Because we can fight over parking at the beach all day and miss the hurricane that’s coming just off the shores.

Lucky for you who may be reading this right now. I am one of the few people who made a fortune during the 2008 crisis and have been preparing for this one for some time. What I did last time is an opportunity that is much larger today. This time let’s get wealthy together. But before you join the webinar remember, there are no solutions, only trade offs. This will require a sacrifice, a decision, an action on your behalf. One that will be well worth it.

“There are no solutions, only trade offs.” – Thomas Sowell