The Last Christmas?


[This isn’t a normal topic for me, but it seems important.]

Your future may not be what you expect.

Economic theory teaches that the more one has of something, the less value one assigns to it.  That simple premise explains a lot of bad decisions people make.

Wasting time is one of them.  The young see time as virtually infinite, so they don’t start to plan for retirement until they are in their 40s, and have lost 20 years of compound interest in building their funds.  People waste time in others ways.  There’s no sense of urgency until they perceive that time is limited.  Unfortunately, it always is.

“Peace on earth.”  Its a common phrase this season, but there is no urgency behind it.  OK, not this year.  Maybe next year, or the one after, or the decade after, or someday.  It’s like the common Seder phrase, “next year in Israel.”  “Next year” is never really defined.  Someday.

Elon Musk sounded a wake-up call earlier in December, which has gone largely unremarked.  The CEO at Tesla and SpaceX, he’s got a program to establish a colony on Mars.  Unfortunately, he thinks World War III may derail the effort.

While a comment like that could be construed as a self-serving effort to raise additional funds for his program, there are reasons to take it seriously.

(1)  Religious extremism.  There are Christian, Muslim (ISIS) and Jewish sects who believe that an Apocalypse is essential for a Second Coming.  Under this theory, ISIS welcomed Russian intervention in Syria as it increased the risk of a nuclear confrontation between some combination of the US, Russia and Israel.  There are Christian conservatives who would similar welcome a nuclear war for the same reason.

What are the odds of an extremist achieving power in a country that has a nuclear arsenal?  Could the next US election accomplish that?

(2)  A coming lack of critical resources, including clean water.  This could exacerbate conflicts between countries in Asia, South America and Africa, although most of the countries involved aren’t nuclear powers.

Musk’s agenda involves establishing a Mars colony in the next ten to twelve years.  If he feels that might be disrupted by war, that means the war would occur in that relatively short time frame.  That’s actually plausible, maybe even generous.

If one takes that risk seriously, it puts Kerry’s negotiations in the Middle East this year in a very different light.  It may be a highly choreographed dance to avoid the nuclear debacle that ISIS wants.

In any case, the peace advocates had better get busy.

How would you have made this holiday season different if you thought it might be your last one?  Any of the next few could be the last, war or not.

Perhaps the more interesting question:  If you are religious and you have to go meet your maker sooner than you expect, what do you want on your resume when you have that interview?

Your time is finite.  Use it well.

Peace be with you.



Brain Injury and Marketing


Traumatic Brain Injury (TBI) is a big deal in the US, with more than 2.5 million ER visits, hospitalizations or deaths per year (CDC:  The duration of effects from TBI ranges from minimal to permanent.


What we don’t know is the number of “walking wounded” TBI survivors in the population.  That’s due to the uncertainty over how long effects last.  Potentially the walking wounded are in the millions and include children and adults of all ages.  After all, the leading causes of TBI are falls and auto accidents, and those can happen to anyone.   And there there are injured veterans.  TBI is not just about football players.  In fact, it’s mostly not about them.

My wife has TBI from a fall, and the concussion resulted in permanent damage to vision and hearing.  She’s classified by Social Security as permanently disabled, and there wasn’t even a discussion about it.

In fact, damage to vision and hearing is rather common.  One of the effects is extreme sensitivity to sound.  Loud noise becomes very difficult to process and results in severe headaches.  By severe, imagine someone probing your brain with an ice pick.

This affects what we can do.  Concerts and sporting events that we used to attend are off limits now.  Even movies can be a challenge.  If we know a movie has a loud soundtrack, we defer to watching the show on DVD at home.  We tried a minor league baseball game, and she lasted 3 innings before we had to leave.

TBI is another category of disability, but this one requires the management of sound/noise volumes.

There are several categories of business on which TBI can have an obvious impact on sales/receipts:

  • Sporting events
  • Concerts
  • Restaurants and coffee shops
  • Theaters (live and cinema)
  • Retailers  (loud background music, “door buster” sales events”)


If you think a noisy venue adds to atmosphere, its time to rethink.  Certainly, that’s not true for everyone.

If you have long time patrons who are no longer showing up, this may be a key reason.

We need better data to understand how big a problem TBI is, but it has the potential to be huge.



The Fed and the Rate Increase


Timing is everything.  The Fed announces a rate increase today the effects if which will be felt after the holiday shopping season is over.  We’ll see higher credit card rates in January, when people are trying to pay off the debts they have racked up in December.

The Fed could have implemented the rate increase in October or November, but doing it then might have affected consumer spending during the holidays.  Doing it in December is a present to both retailers and to investors looking for a life in stock prices before year end.

There was no economic data mandating a December increase rather than one in the prior couple of months.

Nor is here a need for credit card rates to go up in response to the Fed action.  Card rates are in the stratosphere relative to the Fed discount rate.  But card rates will go up.  You can “bank” on that.

What the Fed is missing is the great economic divide.  Most families have little or no money for discretionary spending.  This will squeeze them further.

Fed rates, including today’s increase:

United States Fed Funds Rate

Credit card rates

The average rate on a variable rate credit card has been over 15.7% for the last three months, while the Fed rate was 0 percent.

If you carry balances on your credit cards, you’re actually paying a fortune for those airline miles.



The NFL, Concussions and Life Expectancy –the right to “informed decisions”


My wife and I met a young man on a plane recently.  He was charming and well-spoken, and as we talked we learned he plays high school football.

We also learned that no one is telling him the full truth about what he’s doing or the risks involved.

Now, I don’t have a problem with someone engaging in risky behavior — as long as doing so doesn’t put a third party at risk.  If you want to talk your sailboat out in a hurricane, go for it.  Just don’t expect anyone to come to rescue you.  They shouldn’t have to do that.  You need to accept responsibility for your actions.

However, risk-taking should be informed.  The sailor has weather reports.  If he chooses to ignore them, that’s his problem.  At least the information is available.

This young man had heard about the risk of concussions, but knew nothing about the debate over life expectancy.  He had never been knocked out of a game, and didn’t know he still could be at risk for long term damage without that happening.

What really shocked him was the length of a career in the NFL.  For players able to make the roster, the NFL says the average length of career is 6 years.  The Players Association says its 3.2 years.  Third party analysts have estimates that fall in between these numbers.  Bottom line, if you make a good college team, get drafted, and make starting spot on the team, the odds are your career will end by age 29.  Then what?

The young man was shocked.  That’s a lot of risk for not so much money.  And the risk may be understated.

First there’s the question of life expectancy.  Various reports suggest that pro football players have a life expectancy that is 20 years shorter than typical adult American males.  Various critics and apologists for the sport have been trying to discredit those numbers.  That’s where the debate over football and the health of players becomes similar to the 1970s debate over cigarettes and cancer or the current debate over global warming — the sides are more interested in “winning” the debate than in finding out what’s true.

(There’s a huge hole in the critics’ argument having to do with the relationship between life expectancy and income — see below.)

Then there’s the matter of “Health Life Expectancy”, a metric developed in Europe and calculated by the World Health Organization.  It appears that nobody in the US likes to talk about that metric, because it reflects badly on the US government and US medical community.

You see, Americans give up an average of roughly  9 years of their life to illness and injury.  That’s everyone, not just those playing football.  Life expectancy from birth for US residents is 78.8 years; Healthy Life Expectancy is 70 years.

However, sports stars are highly paid, and the life expectancy for affluent Americans is much longer than for everyone else.  A high income male in the US can expect to reach 89 years of age — and almost no one in pro sports is doing that.  Adjusted for income, sports stars actually do sacrifice life expectancy.

The truth is that a lot of pro sports stars die young, often from drug or alcohol behavior that may be concussion-related.  The ones who live longer (Frank Gifford comes to mind) have their lives affected materially by brain damage from concussions.  Their “Healthy Life” is much shorter than the number of years they lived.  Hopefully the Harvard study will tell us how much shorter Healthy Life Expectancy is for pro footballers.

So, the young man had been fed only a small fraction of the truth.  That’s  not right.  How can anyone make an intelligent decision about their future if they don’t know what the choices really mean?

College programs and the NFL have no more right to hide information on risks from prospective players than homeowners have to hide information about defects from prospective buyers.  People are entitled to know.

What they do once they are informed is up to them.  If they want to accept the risks and play, go for it.  If they decide to do something else, that’s fine as well.  I’m sure there will always be a line of candidates at the door.

[Sources:  CDC, New York Times, Atlantic Monthly, NFL,]




Gun Control: Manipulating the Public for Profit


Sometimes the best advertising isn’t advertising at all.

Every time we have a mass shooting in the US, there is a cry for reform of laws allowing access to guns.   The clamor increases gun sales, but doesn’t result in any changes in public policy.  It can’t.

Why not?  It’s simple.  No one on any side of the gun control issue has made concrete proposals for any changes in public policy.  The entire discussion has stayed at the high level of symbolic politics.  Unless there is a proposal on which to act, nothing will happen.  Period.

So why the clamor if there’s no substance.  The Economist points out that the only winners in the gun control debate in the US are gun manufacturers, whose sales and stock prices have risen with the “controversy.”   The stock of these companies has outperformed consistently the S&P 500 index for the last several years.

Without the controversy, gun sales would have flat-lined.  After all, there are more guns than people in the US now.   How many guns does someone really need?

“Need” is probably the wrong term.  Blacks and Hispanics are more likely than whites to be victims of violent crime.  However, as Pew documented in 2014, most households with guns are white, conservative and Republican.   The people buying guns appear to be those at the least risk of needing them for protection.

From a devil’s advocate point-of-view, inciting and maintaining a gun control controversy is a brilliant advertising strategy for gun manufacturers.   The manufacturer can reach more people through the controversy than it ever could through any media ads.  Chasing  consumers into gun shops or outdoor stores is the first step.  The sales people in the store will get them to the manufacturer.  That’s the way gun sales have worked for decades.  The “gun control controversy” is one of the most effective programs for getting consumers flocking into stores ever invented.

Of course, you can quibble with the morals of companies marketing this way.  However, as has been said many times, money has no morals.

(Note: an earlier version of this blog appeared on Linked-In today)