Let me make something crystal clear.

There are costs associated with every single manufacturing process. If the tooling produced in these processes is sold below those costs, money is effectively being burned.

In almost all circumstances, it’s better to not sell the tooling at all than to sell it under cost. And also to not produce tooling in such small quantities that the costs threaten to overwhelm the remotest possibility of making a profit.

Businesses exist — in the end — to make profit. If there was no profit, there would be few businesses. What we do is almost tangential to the fact that there must be a profit. If there is no profit, things must go, such as jobs and perks and eventually the business itself. If you cannot understand the costs associated with production, understand this: when you sell tools below cost, you’re effectively robbing yourself of your job. You’re robbing your heart to spite your little toe.

This seems, to my mind, pretty elementary. Yet I’ve found many, many people who simple can’t grasp the idea. Look, a multi-million dollar machining centre and what it produces don’t just appear out of nowhere. They have to be bought. And in order to be paid for, they have to break even. And in order to pay for all the other surrounding things such as lights and air and employees and heating and material and computers and all that stuff it has to do more than break even. And at the end of the day, after all those stakeholders are paid, the profit is that little bit of fat the people who worked hard to create the company get to do with as they wish.

Simplified? Yes. Yet, it’s still too complicated for some people.

I want to say something about genetics and the film Idiocracy, but I won’t.

On of the reasons that US is producing ethanol from corn is the huge install base (if you’ll pardon the comp lingo). Another reason is the awesome power of the agricultural lobby, what with their massive subsidies and whatnot. And though the install base of corn is awesomely huge, the amount of ethanol needed is also awesomely huge, leading to exactly what the agricultural lobby wants: higher prices for corn.

This is all fine and good, except that corn is in absolutely everything these days, what with the pervasive use of high fructose corn syrup in the place of good old cane sugar.

Why don’t they use cane sugar, you ask? Why do they use corn? The answer is, again, the agricultural lobby. There are huge tariffs on cane sugar, tariffs originally designed (iirc) to protect what is now a minuscule but still powerful US sugar cane industry.

Now, with all the shooting of feet that’s going on here, I have a way to solve the ethanol problem, lower the prices on corn (which is good for the economy), and keep the price of cane sugar high.

You people simply drop the tariffs on cane sugar and use that cane sugar to produce ethanol, something Brazil has already shown to be radically more effective than making it from corn, which happens to be one of the worst possible crops to produce ethanol from.

The rise in demand for cane sugar would keep the price of cane sugar high, the nation would keep feeding its insane addiction to HFCS, corn prices would stabilise, and pretty much everyone would win, including those sugar cane producers in marginally poor countries (and if you believe in trickle-down economics (a giant crock of shit, imho) this makes sense, right?).

So, using my genius and applied game theory, we advance the game (US corn production, sugar cane prices, the economy, the environment) from negative-sum (right now, everybody is losing) to positive-sum (they could be winning!). Not a win according to the expectations of the US agricultural lobby, certainly, but let’s not be selfish.

Here’s a link on how to save money on petrol.

I found it via Lifehacker. Which reminds me that the next time I purchase a vehicle, I am definitely going to buy smaller and more efficient. My Focus isn’t horrible, of course, but it sure wasn’t built with economy in mind; I want one that is.

The problem with that is this: if everyone cuts their fuel consumption in half, the price of gas will go down to the point where cutting consumption will no longer be economically viable. A free market, problem if you will. A tragedy of the commons. I hate to say it, but the only way to curb fuel dependency seems to be keeping prices high, even if that has be achieved artificially.