Monday, May 31, 2010


Memorial Day is upon us. A day dedicated to the brave that have defended our country and its principles. It also happens to be a day where we can not work and have parades. Now I have never been a big parade person. I can probably count the number of times I have been to a parade on my hands. However, in my limited experience I can tell that parades are probably quite different on so many levels. I am sure there differences across the US and even depending on whether you are at a state, city, or local level. Today I went to a local Memorial Day parade and was rather surprised at some of the local customs.

This particular parade was slated to begin at ten o’clock, so we arrived early, as recommended by the township. Not only did everyone else arrive early, but apparently also called “dibs” on places to sit along the sidewalk. I am not talking about random travel chairs on the sidewalk. There were stretches of folding chairs lined up on the sidewalk. I can only imagine that these chairs belong to the homeowners along the parade route. This would probably never work in a larger city where you are less likely to run into someone you know. People would either sit in your chair or move it.

We did manage to find a nice spot to sit, and in the shade, nonetheless. The parade began, and it was like any other parade you could imagine. You had bands and cars filled with veterans rolling down the street. You even had local teams and clubs showcasing their talents. But then something I have never seen happened. Some people in the parade starting throwing candy out into the street toward the onlookers. They were throwing almost all matter of small and inexpensive candy—Tootsie rolls, Laffy Taffy, Double Bubble, you name it. They were also throwing Jolly Ranchers, Tootsie pops, and Dum Dums. And these were being hurled towards the sidewalks from moving vehicles. And they obviously hit the street first, since you cannot have your parade goers being hit in the face by candy. You can imagine that the hard candy did not fare well with this method of delivery.

While the practice of free candy was new to me, it clearly was not new to the family sitting next to me, who seemed to be at the parade solely to gather loose candy. The mother would actually hoard the candy and stuff it into her pockets. It was not an unfortunate reflection on the state of the economy, but on human behavior these days in general. Of course, more free stuff also was thrown into the street, and it was also gobbled up by the crowd, particularly the family sitting next to me.

The one other thing about the parade that I found interesting was the signage and posters. Most were simple and wished everyone a happy Memorial Day or thanked our troops. One catchy sign read, “Home of the Free Because of the Brave”. The one that caught my eye was a sign carried by a middle school. It was a middle school that had only fifth and sixth grades. But the sign read, “____ Middle School, We Remember, 5th and 6th Grades”. It would seem to me that sixth graders are a little young even to really remember much of the Iraq War, let alone any other battle or even military action. Though I am certain one the teachers made that sign.

And that was my parade experience. Next year I will have to just remember to get there even earlier and bring some Starburst.

Sunday, May 23, 2010


Recently Mega Millions has joined Powerball in my state. It was a big move and there was lots of press to get people started buying tickets. After all, there are not that many multistate lotteries. And that is where you win the big money. You can always expect both lotteries to be in the tens of millions of dollars, and tickets are only a dollar. This is in comparison to many state lottery tickets, which also cost a dollar, but do not have gigantic payouts. Now of course, the payouts are in proportion to the odds of winning, with your simple pick four using numbers zero to nine with odds of winning of 1:10,000, to powerball, where you have six numbers and the odds are 1:195,249,054.

It is easy to see why people get so excited about the lottery when the payout reaches $100 million. Who does not want to win $100 million? And if you watch the lottery payouts over time, when there is no winner for several weeks, the payout climbs and climbs. You will also notice that once it approaches $100 million, it also begins to rise rapidly. The curve of payout over time is exponential. What does this tell us? It tells us that people are more interested in playing the lottery as the payout increases. What that also tells us is how people perceive the odds of winning the lottery as well as risk.

So the average lottery player believes that it is only worth spending one dollar on a lottery ticket if the payout is close to $100 million. There are variations, of course, such as players that buy more than one ticket and more tickets as the payout increases. Or players that only jump in once the payout reaches a certain level and jump in with more than one ticket. But there is an inherent misunderstanding about odds that also causes the payout to rise exponentially.

The classic example was the flipping of a coin. If you flipped a coin four times and it came up heads four times, many people were apt to believe the odds of a fifth head were either better or worse than even odds, depending on their incorrect reasoning. The example has been used so often over time that almost everyone understands that the odds of a fifth head is fifty percent. But is not that everyone necessarily understands the odds, but that they understand the gist or catch in the question. In the beginning many people misinterpreted the question as asking what the odds are of getting five heads in a row. This is a slightly more complex odds problem that, given the state of America’s mathematics comprehension, is difficult for many to solve. And so they make a best guess founded on personal bias.

In the case of lotteries there is a misperception of odds that occurs as the payout rises. There are two odds in play with any lottery. The first are the odds of you as a player personally winning the lottery. These odds are fixed unless the rules of the game changes, and everyone understands that because they have learned from the classic example above. The second are the odds that someone, anyone, wins the lottery. These odds change and improve as the number of players increases. So as the payout increases, the number of players increases, and the likelihood that someone will win the lottery increases. This is why you rarely see payouts over $300 million. The problem is that many people confuse the two odds.

While it is true that buying more tickets improves your chances of winning, it does not improve them to the same odds of anyone winning, since there are many more people playing with many more tickets than you are proportionately buying. Thus people believe their odds are better than mathematically calculated. This misperception can be corrected by imagining that you are the only player for the lottery. It removes the confounding odds of anyone winning and allows you to see your true odds. Not that you should not play the lottery, since many states use lottery sales to fund state programs, but it will save you a little disappointment when you do not win. Variations on this theme can be applied to the stock market and real estate, but that is another post.

Sunday, May 16, 2010

Garage Sales

I went to some garage sales over the weekend. That would be plural—sales. Although I did also visit several garages, but that is besides the point., Anyways, my last visit to a garage sale was about two years ago, and I only went to ones that were in my development. This time, I went to one held at a church, a random house in a random neighborhood, and several in a development. I do not imagine a lot has changed about garage sales. The art of reselling used items, however has come a long way. We now have eBay, Craigslist, and numerous other websites to allow people to transfer possessions to another person.

Unlike these online methods, where you can certainly zero in on the exact item you desire, garage sales offer an element of mystery. They are and forever will be associated with the random occasion of someone stumbling onto a rare and valuable object. That just does not happen online, because when you are selling online you are obligated to give as much information about your item as possible. Going online is analogous to going to someone’s garage. You should have a very good idea what you are buying before you buy it. This is very true for eBay. In Craigslist you still have the option of examining the item at the seller’s premises before buying.

Another difference between the traditional garage sale and the online reselling is the cost of shipping. You always have to consider shipping online, which ultimately makes the item cost more. At a garage sale if you can move it you can buy it. That is why you see so many people with trucks and SUVs at garage sales. They are making sure they have room for whatever it is they might find. And that brings us to the different buyers and sellers at garage sales.

There are really only two types of buyers at garage sales. The fanatic and the interested. The fanatics arrive at garage sales the minute they are open, usually around 8am (hence the humor behind garage sales that advertise “no early birds” and start at 10am). These buyers are looking for specific items—jewelry, art, antiques. And apparently, as I found out this weekend, children’s toys. You would be surprised how quickly a motorized care can sell at eight in the morning on Saturday. The other type of buyer is the merely interested. These people stroll in after 9am. They tend to not have any specific goal in mind other than the see what garbage other people had once thought was worth buying. If they find something neat, then great. Otherwise it is just fun to get a glimpse into other people’s lives.

On the other side, there are two types of sellers. You have those who are trying to unload old or unneeded items, and those who are trying to make money. The two are definitely mutually exclusive in the context of a garage sale. If you have a signed first edition Harry Potter you are not putting it out at a garage sale. You are listing it on eBay or some auction house. And given that there are only two types of sellers, you can easily figure out who you are dealing with at a garage sale.

For instance, I bought a small slide this weekend at a church garage sale. This slide would typically retail for sixty dollars at Toys R Us. I got it for three dollars. And it was in surprisingly good condition. They lady that sold it to me was clearly trying to get rid of old unneeded belongings and happened to make some money in the process. But when I went to a multihouse garage sale in a nearby development, I found a roller coaster car ride in pretty good condition. This would have retailed for about a hundred dollars. The lady was selling it for forty dollars. As I was examining the toy, the lady’s twelve year old daughter came out to tell her mother something. I knew instantly that the lady was trying to make money rather than clear her basement. I am sure she would have kept that roller coaster car in her basement collecting dust rather than sell it for less than her perceived monetary value of it. Which, of course, was completely discrepant from her reality given that her children were far too old by many years to even play with it anymore. Needless to say, I did not buy that toy from that lady.

There are certain things that people always put out that I always wonder if anyone ever buys. Things such as old electronics. Now I do not mean antique radios. I mean a CRT monitor, a toaster from the 1990s, a blender that is a shade of brown that was popular in the 1980s, or a television that has knobs. Who actually wants this stuff? And how about clothes? I would think that buying used clothes requires some degree of impersonality and separation between the buyer and the seller. Otherwise it would be like buying someone’s half eaten sandwich in the restaurant. And last but not least, baby car seats. Who is going to buy an old used car seat? I have seen how baby seats were just ten years ago, and the baby seats today are safer and sturdier. What new parents in the this generation are going to put their child in a ten or even five year car seat they bought from a stranger at a garage sale? We are not talking about a rented car seat for a short vacation. Or are we…Still, I have never seen or heard of anyone buying a car seat from a garage sale. I hope it is not because they are all taken by 8:05am.

Monday, May 10, 2010

What Healthcare Reform Misunderstands

So it is finally done. Healthcare reform has not only passed, but it has seemingly survived the first round of amended bills and cries of unconstitutionality. Most importantly, some of it is now in effect. But before the new healthcare bill can take hold and show us what it can do for us, it will have to cut through all the rants and raves about it.

You have the pure Obama Democrat on one hand, who has believed from the very beginning that healthcare was doomed without reform, and that the bill endorsed by the President was the way to solve our problems. These are the blinded, forgetting that it is the goal of every administration to leave a legacy. And given a very rare Democratic majority in both legislative houses, it was clearly the time to create that legacy. So what they did is scare everyone first with overly simplified statements regarding the ensuing failure of the healthcare system. Then they wheeled and dealed to get their bill passed with a once in a lifetime Congressional majority. The rest will be history. This is not how the Obama fanatics see things. The see a President that represents their views in a time when significant policy changes are needed.

On the other hand, you have the hard Republican, who has mistaken democracy for socialism. Anything that forces him to give something for the public good is heresy. The President could repeal all the taxes and still there would be something wrong and Democratically evil about it. They see a President trying to make them pay for something they cannot hold or do not want.

And then you have the rest us, all mixed in somewhere in between. But this is not about whether the healthcare reform was the right thing to do or if it was all smoke and mirrors. This is about the single fact that it unfortunately did not take into account. That fact is that people want more healthcare. They want more tests available to them. They want more drugs available to them. They want more healthcare providers available to them. Seems a simple enough answer—after all, who does not like to have more options? (This is not about whether we do better with more options—that is another post.) But everything with healthcare reform and the debate talks only about an irrelevant fact—that people do not want to pay more for healthcare. Of course they do not. But shifting the cost to the consumer, and trying to make them “see” how much things cost does not dampen the desire for more healthcare. While it may slow the consumption of healthcare, inevitably, there will be a change on the other side, and people will have more money to spend on healthcare. And they will. You can change the price, but one day the income side will change and things will be different again.

You might say that the bill has taken this into account, with the so-called Cadillac tax. This tax is imposed upon high cost policies on the incorrect presumption that these policies carry more benefits and therefore keep the healthcare consumer in the dark as to how wasteful he is of said resources. Aside from the obvious specious reasoning linking cost to overall benefits, the creators of the bill failed to understand that the people who hold these high cost policies tend to be healthy people. The same people you need paying high cost policies, since they also consume the least amount of healthcare. You end up taxing the rich and healthy for what, the poor and sick? Sounds like a twisted version of Robin Hood and Harrison Bergeron.

Another way to look at this overlooked fact is the simple infection. With the reform the patients will see more of the cost of drugs, including antibiotics. That means that penicillin will still be cheaper than Levaquin, but that Zyvox will be essentially unaffordable to most people. (Zyvox is an antibiotic often used for treating MRSA, or resistant staphylococcus.) Though you would think this would steer people towards cheaper antibiotics, it will also steer them towards more ineffective antibiotics. Over time that will lead to more infectious complications and more resistant organisms. But even more likely, it sets up a system where the richer get better treatment for lesser problems than before. You think that open heart surgery will be more available to everyone? Sure, it will be covered. But not the drugs you will need afterwards. Shifting cost to the consumer may curb spending, but it only exaggerates the lack of healthcare when Joe the plumber needs five new medicines after heart surgery to protect his heart, but can only afford two because the costs have been shifted farther over to him.

A lot of people believe that Congress will never have the Republican numbers it needs to repeal the healthcare reform bill. It seems more likely that if healthcare reform is received poorly by the public, we will see a dual Republican majority in the Senate and House, much the same way the current Democratic majorities arose with the policies of the last Republican administration. But as long as you can still get medicines from Canada and surgery in Europe, you can wait it out.

Sunday, May 2, 2010

Are Women More Gullible Than Men?

I got your attention with that title, did I not? Do you really think I am going to foray into possibly dangerous and politically incorrect territory? Well, yes, I am. I could have titled this post many different things, but I thought the most generalized and possibly most specious would be the most appropriate.

I was browsing through the Amazon Kindle bookstore (and yes, I also read my Kindle books on my iPhone) and looking up Fletch books. I was quite pleased to find that nearly all of the books in the series are now available for immediate download. It will cost me a hundred dollars but I will not have to buy another book for some time. But then I saw several books touted to be from Oprah’s Book Club. This got me shaking my head. And I shake my head not at Oprah’s Book Club, but at the obvious commercialism that is not even attempted to be thinly veiled.

If you have ever watched Oprah or watch regularly, you are most likely a woman. The men that watch Oprah mostly watch it because their wives/girlfriends watch. (I will retain some political correctness here, at least.) Now let us start with OBC. How many of these female viewers have gone out and bought a book touted on OPC? I would guess at least 90%. How many of the male viewers have gone out an bought a book touted on OPC? Less than 3%, for sure. Why is that? It is not because Oprah picks chick lit, as many of the books are rather disturbing. It is because the women identify with Oprah on that level and trust her judgment in books. The men do not.

Now that is all fine and dandy. Oprah promotes reading and well written books. If she did an algebra segment on her show I am sure we would have more women scientists. But she does not do an algebra segment, and for very good reason. Algebra is not part of Oprah. It is not really a part of many people, but just an example I am using. Oprah is about reading. And she uses her show which is popular to tell her mostly female viewers what she really liked reading recently. The viewers (supposedly) identify with her and go out and read the same books. Subsequently the authors make a lot more money and it is instant success with movie deals if Oprah talks about your book on her show. That does not bother me.

What bothers me is when Oprah begins advertising things on her show that not only prove her ignorance on the matter, but exposes the gullibility of her audience, which incidentally, is mostly female. Let us take two examples. The first is not so blatant. It is Oprah’s enthusiastic backing of technology. I remember an episode of Oprah’s Favorite Things where one of the “favorite” things was a Sony Vaio laptop. And she rattled off a few specs of the laptop on her show. It was completely ludicrous, as though she had any idea what those spec meant and that she did any research into computers before settling on that particular Sony Vaio model. And yet, there is was, as one of her “favorite” things that year, next to an expensive bathrobe made by hand by natives in Peru. At least there was a very good chance she actually wore those bathrobes.

Also on another “favorite things” episode was a pair of washer and dryer. If it were anyone other than Oprah I might have believed the endorsement. But we are talking about someone who stated on television that she has her bed sheets changed at least every other day. I am pretty sure she is not the one washing those sheets. Yet she has a “favorite” washer and dryer. It only demonstrates the commercialism of her show because people are there to get free stuff. And if you are lucky enough to be at that favorite show taping, you hit the mother lode.

Her most recent antic is her no texting while driving campaign. In fact, she has sprung it on unsuspecting guests, who sign the petition out of sheer awkwardness. You might say that it is a good cause. Who should be texting while driving? It is dangerous. Do you know what is even more dangerous and still responsible for far more motor vehicle accidents? DRINKING while driving. But why would Oprah want to promote that? It has already been done to death by MADD, DADD, SADD, and whatever other acronyms you can think up. And it is not even about the cause. If there was someone standing outside the grocery store asking everyone walking in to sign a petition to save the wildlife in the Gulf of Mexico because of the BP oil spill, I will guarantee that less than half the people walking by give their signature.

I know it makes use as a society look bad, but the counterargument is to ask why you do not donate to all the charities? Or at least one for each cause? And if you had a million dollars why would you not? The answer is simple. You cannot allocate your resources (which for celebrities include their name) everywhere. You have to choose what is most important to you. That is why Oprah has to surprise her guests with the petition. What star can risk the bad publicity of turning down a petition for a good cause on Oprah? And yet we do it all the time when charities call us at home and send us flyers in the mail. It is Oprah’s way of using her popularity and poor unthinking followers (which, coincidentally, are mostly women, I say again) to further her own agenda.

What agenda could she possibly have with this no texting while driving campaign? Other that self aggrandizement I am not really sure. She may be the first to declare that she never texts while driving. And do you know who else never texts while driving? People comatose in the intensive care unit because they DO NOT DRIVE. Oprah may have a license but I doubt she drives anymore than she is researching laptops on the web. I could just as easily start a petition about not using plastic bags when grocery shopping, and then ask my wife do all the shopping. Perhaps I can get syllogistic fallacy to work for me as well,