Bar Stool Economics

From an email:

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.

‘Since you are all such good customers,’ he said,
‘I’m going to reduce the cost of your daily beer by $20.  Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected.

They would still drink for free.  But what about the other six men–the paying customers?

How could they divide the $20 windfall so that everyone would get his ‘fair share?’

They realized that $20 divided by six is $3.33.  But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before.  And the first four continued to drink for free.

But once outside the restaurant, the men began to compare their savings.

I only got a dollar out of the $20,’declared the sixth man.
He pointed to the tenth man,’ but he got $10!’ ‘Yeah, that’s right,’ exclaimed the fifth man.
‘I only saved a dollar, too.

It’s unfair that he got ten times more than me!’ ‘That’s true!!’ shouted the seventh man.
‘Why should he get $10 back when I got only two?
The wealthy get all the breaks!’
‘Wait a minute,’ yelled the first four men in unison.
‘We didn’t get anything at all.  The system exploits the poor!’

The nine men surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him.

But when it came time to pay the bill, they discovered something important.  They didn’t have enough money between all of them for even half of the bill!

And that, ladies and gentlemen, journalists and college professors, is how our tax system works.

The people who pay the highest taxes get the most benefit from a tax reduction.

Tax them too much, attack them for being wealthy, and they just may not show up anymore.

In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of  Economics
University of  Georgia

The Wire

I recently finished season 5 of HBO’s critically acclaimed series ‘The Wire’ and I have to say it’s one of the best shows I have ever seen. Considering the past HBO has a damn good eye for quality TV. In my book The Wire is tied for first with the Sopranos when it comes to premium channel series rankings. Up there with it would be aforementioned Sopranos, Band of Brothers (mini-series), Dexter (Showtime), Weeds (Showtime) and Deadwood.

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Patience is a virtue

Today I saw someone talking about “patience” on Twitter and I was reminded of something my old shop teacher used to day: Patience is a virtue.

Here is what “Random House Dictionary of Popular Proverbs and Sayings” by Gregory Y. Titelman (Random House, New York, 1996) had to say about that particular phrase/quote:

“Patience is a virtue. The ability to wait for something without excessive frustration is a valuable character trait.

The proverb has been traced back to ‘Piers Plowman’ (1377) by William Langland and is similar to the Latin, Maxima enim..patientia virtus (Patience is the greatest virtue) and the French, Patience est une grant vertu. (Patience is a great value.)

Some ten years after Langland, Chaucer wrote in ‘The Canterbury Tales’ (1386) that ‘Patience is a high virtue.‘ Sometimes followed by the wry rejoinder ‘but virtue can hurt you.‘ First cited in the United States in 1724 in the ‘Works of Thomas Chalkley’ (1766)…”

Gravatar: Avatars for Comments

If you look at the comment section of this blog or any number of blogs on the internet you will notice an area that is available for a user image / icon / avatar. The empty space looks like this:

The little gray box with the white silloquette is where the Gravatar goes. What, you ask? [G]lobally [r]ecognized avatar or Gravatar. From Automattic:

A gravatar, or globally recognized avatar, is quite simply an avatar image that follows you from weblog to weblog appearing beside your name when you comment on gravatar enabled sites. Avatars help identify your posts on web forums, so why not on weblogs?

Automattic is also behind the WordPress publishing platform. To sign up for a Gravatar you will need to go to http://en.gravatar.com/site/signup/ and enter your email address. Before you sign up find a nice photo of yourself because you will need it in order to set up your own Gravatar.

Gravatar works by recognizing your email address when you submit comments to blogs. When you set up your account you can register several email addresses. Once you have it all set up you will see comments like this:

Pretty slick, huh. Give it a shot @ http://en.gravatar.com/site/signup/

Cedar Rapids Crowne Plaza: Broke as a Joke

This from KCRG TV9 via Twitter. Apparently if you work at the Crowne Plaza .. you aren’t gettin paid. At least not in real money. My suggestion to the employees.. fill the toilets with lobsters. (inside joke)

UPDATE: [CR Gazette] – Crowne Plaza employees demand payment, answers

Updates – Blogging – Laziness

I’m still trying to get around to continuing my “FAILbill” series. Part 2 should come in a next few days. I have been focusing on building some new servers here at home for my lab which has taken up a lot of my time.

There is some new info out today regarding Barry Obama and his membership in the New Party (aka Socialist Party aka Labor Party) which was strongly denied by the Obama camp. There is new evidence to prove his association with yet another less than tasteful group/person. It seems to be a continuing theme of Barry’s lack of proper characture judgement.