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jamesaltucher.com

Everything You Need To Know About

Economics
8-10 minutes

I cheated on every economics exam. I was majoring in

economics. But so was my girlfriend and she was smarter than
me. So cheated off of her tests.

But then it turned out she wasnt so smart and we both failed.

My parents were so happy I wanted to major in economics. They

thought this meant I would be good at business. You will
succeed at everything! they promised me.

To be good at business you need to start with two things:

1. know how to help people.

2. know how to bribe people.

Theres no economics in there.

I switched majors to Computer Science.

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This is a polite way of saying dont listen to me.

A) Warren Buffett Is a F***king Liar

Warren Buffett says the WORST thing is deflation. In other

words, when prices get lower, he thinks, the world is over.

I have a saying, theres always a good reason and a real

reason.

Good Reason: if prices are lower, people will stop buying

because they will wait until prices are even MORE low.

This leads to a death spiral until nobody buys anything ever

again and the world, I guess, shuts down then. Puts up a Were
Closed sign.

That is stupid. If Im hungry, I buy something to eat. If I need

shelter, I rent an apartment. I dont starve in the cold until prices
get lower.

Some people argue prices have been inflating for 100 years.

This is BS also.

100 years ago, the first school for Dental Hygiene started. The
Fones School of Dental Hygiene, in Connecticut.

Amount of bad smelling breath per dollar has gone down 99%
since then. Thats deflation.

Try kissing a man or woman with bad breath. Thats more

important to me than the dollar.

ALWAYS look for Warren Buffetts real reason.

Real reason:

He doesnt like prices to get lower because he has

$50,000,000,000 invested in stocks and those stocks only make
money for him when prices go higher.

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Thats 1 good reason and 50 billion real reasons.

(Related: 8 Unusual Things I Learned From Warren Buffett)

Price is determined by situation.

If you want to buy a house and you look at two exact houses in
the same area you would think they have the same price.

No.

What if one house had an owner that just died. Now his or her
three children dont want to own the house.

They want to dump it so they can split the money up. So the price
is cheaper than the house next door with the stable family with 2
kids and a dog.

If you want to make money, look at situations more than supply

and demand.

The reality is: we dont know the supply of an object. Nor the
demand. Nobody ever does. Maybe its a rough guideline.

Death, divorce, debt lead to cheap prices. Those are three types
of situations.

And price is determined by many more factors:

I was shopping for a coat the other day. In one high-end store, a
nice coat was $7,280.

In the store next door a coat that seemed just as good was $150.

Whats the difference? Not supply. Marketing.

Sixty years of marketing have created artificially high prices

(inflation) because marketers have figured out the science of
mass hypnosis.

Thats why good marketers get paid a lot of money. Because their
slave owners make even more money.

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If there was never any marketing, then prices would be 1/50 what
they are now.

Unless a coat was made out of solid gold its not worth $7,280.
Or unless you personally slaughtered the cow and then crafted
the leather to make the coat its not worth that either.

This is a hot-button issue.

I dont care about the difference between the richest and the
poorest. This effects 1% of the people in the United States.

The other 99% lives on my street.

Believe it or not, the name of the street I live on is Main Street.

The street I lived on before this one was Wall Street.

I mean this very literally. I lived on THE Wall Street on the corner
of Wall and Broad, right across from the stock exchange.

And then I moved 70 miles north. Now I live on 24 Main Street in

a town of population 1000 along the Hudson River. I live three
houses from the river.

If the rich are taxed more I can guarantee you my neighbors on

Main Street wont make that extra money.

Some of them are illegal immigrants. Some of them are mentally

ill. Theres been two suicides on my street in the past five years.

But the river is beautiful. And I walk by it and my mind drifts when
I wonder, are ducks really monogamous?

I do care that money I worked really hard for is taken from me

and used to buy bullets. Lots of bullets.

When the local high school goes on a class trip to Washington

DC, my money is being used for half those kids to lose their
virginity.

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I do care that Kevin Spacey takes my money and throws Katie

Mara in front of a train. That happened.

Democracy is rule by majority. But Im in the minority and I also

hope my opinion can be validated but it isnt.

The way I can be validated is if I vote with my money where I

want it to be spent.

For instance, Id rather use money to hire people or invest in

platforms like prosper.com to help other small business owners
hire people and innovate and be successful.

Or Patreon to support artists I believe in. Or kickstarter, to

support projects by broke but extremely creative and exciting
innovators. Or gofundme to support my friends charitable efforts.

I dont want my money to buy a bullet for some 18 year old to kill
some 14 year old. Another kid in Africa who just wanted to live.

And yet I have no choice because Im in the minority and

probably always will be.

This is the most important thing in this post by far. Ignore the rest
of this post. But please PAY ATTENTION to this part.

I should have put this first because its the only issue I care
about. And most people arent aware of this issue.

United States companies have $2.5 trillion in cash sitting in other

countries.

Apple, for instance, has $158 billion overseas they are afraid to
bring back.

They are afraid to bring it back to the United States because then
it will be taxed.

Think of it: $2.5 trillion being left out of our economy because of
fear, just sitting in foreign banks, making those banks money.

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Thats $2.5 trillion that can be used to hire people, create

innovation, fund educational programs, start companies, etc.

If the money comes back it can be taxed as high as 50%.

So the answer is simple:

Tax holiday. Bring all the money back and you only get a 5% tax.

Thats an extra $125 billion to the US government for basically

free.

And then theres something VERY IMPORTANT. Its called the

money-multiplier.

When you have a dollar, you buy a donut. Now the donut man
buys a newspaper for the same dollar. The newspaperman buys
a coffee. The coffee man buys a hooker.

One dollar is used on average ten times, equals about $10 in

economic growth.

$2.5 trillion dollars equals $25 trillion in economy growth. Thats

about $12 trillion in taxes, almost wiping out the entire US debt.

On top of that we can forgive all the student loan debt, stop wars,
and give everyone free healthcare.

BAM! THIS SOLVES ALL THE PROBLEMS IN THE ECONOMY.

So why dont politicians do this rule.

Because the bottom one percent will say the top 0.000001
percent are making more money, which may not even be true.

Politicians, as usual, are afraid.

I can tell you: most of the top 0.00001 percent are not very happy
people anyway.

Id rather have the $25 trillion in economy growth.

My girlfriend broke up with me so I couldnt cheat off her tests

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anymore and I had to switch majors.

She lectured me on what love is and walked out and I never

saw her again.

Then I was a horrible computer programmer. And then a

mediocre businessman. An ok hedge fund manager. A better
writer. A horrible husband. An ok father. And I dont like being told
what to do.

I dont know why I just wrote that paragraph. Perhaps its to say, I
dont have a clue.

I hope I know a little more about what love is.

Or at least kindness. And tenderness. And gratitude.

And when I talk to you, I hope I make you laugh, and I hope we
like each other. But Im nervous.

This is more important to me. I think I love you.

And THIS is how introverted people can really scare people at

cocktail parties.

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