A few years before I was born, my Dad met a stranger who was new to our small town. From the beginning, Dad was fascinated with this enchanting newcomer and soon invited him to live with our family. The stranger was quickly accepted and was around from then on.
As I grew up, I never questioned his place in my family. In my young mind, he had a special niche. My parents were complementary instructors: Mom taught me good from evil, and Dad taught me to obey. But the stranger... He was our storyteller. He would keep us spellbound for hours on end with adventures, mysteries and comedies.
If I wanted to know anything about politics, history or science, he always knew the answers about the past, understood the present and even seemed able to predict the future! He took my family to the first major league ball game. He made me laugh, and he made me cry. The stranger never stopped talking, but Dad didn't seem to mind.
Sometimes, Mom would get up quietly while the rest of us were shushing each other to listen to what he had to say, and she would go to the kitchen for peace and quiet.
(I wonder now if she ever prayed for the stranger to leave.)
Dad ruled our household with certain moral convictions, but the stranger never felt obligated to honor them. Profanity, for example, was not allowed in our home - not from us, our friends or any visitors. After our long time visitor stayed longer he became more daring however, and even got away with four-letter words that burned my ears and made my dad squirm and my mother blush. My Dad didn't permit the liberal use of alcohol but the stranger encouraged us to try it on a regular basis. He made cigarettes look cool, cigars manly, and pipes distinguished. He talked freely (much too freely!) about sex. His comments were sometimes blatant, sometimes suggestive, and generally embarrassing..
I now know that my early concepts about relationships were influenced strongly by the stranger. Time after time, he opposed the values of my parents, yet he was seldom rebuked... And NEVER asked to leave.
More than fifty years have passed since the stranger moved in with our family. He has blended right in and is not nearly as fascinating as he was at first. Still, if you could walk into my parents' den today, you would still find him sitting over in his corner, waiting for someone to listen to him talk and watch him draw his pictures.
We just call him 'TV.'
He has a wife now....we call her 'Computer.'
Their first child is "Cell Phone".
Second child was named "I Pod "
Third child is Video Games
In September of 2005, a social studies schoolteacher from Arkansas did something not to be forgotten. On the first day of school, with permission of the school superintendent, the principal, and the building supervisor, she took all of the desks out of the classroom. The kids came into first period, they walked in; there were no desks. They obviously looked around and said, "Where's our desks?"
The teacher said, "You can't have a desk until you tell me how you earn them."
They thought, "Well, maybe it's our grades."
"No," she said.
"Maybe it's our behavior."
And she told them, "No, it's not even your behavior."
And so they came and went in the first period, still no desks in the classroom. Second period, same thing. Third period. By early afternoon television news crews had gathered in the class to find out about this crazy teacher who had taken all the desks out of the classroom. The last period of the day, the instructor gathered her class.
They were at this time sitting on the floor around the sides of the room. She said, "Throughout the day no one has really understood how you earn the desks that sit in this classroom ordinarily. Now I'm going to tell
She went over to the door of her classroom and opened it, and as she did 27 U.S. veterans, wearing their uniforms, walked into that classroom, each one carrying a school desk. And they placed those school desks in rows, and then they stood along the wall. By the time they had finished placing the desks, those kids for the first time I think perhaps in their lives understood how they earned those desks.
Their teacher said, "You don't have to earn those desks. These guys did it for you. They put them out there for you, but it's up to you to sit here responsibly, to learn, to be good students and good citizens, because they paid a price for you to have that desk, and don't ever forget it."
Netflix's current pricing plan: The $9.99 I pay each month which buys me unlimited streaming of their movies, plus as many DVDs as I would like each month, but only 1 DVD out at a time. They offer 2-3-4-etc DVDs at a time plans, but eh, most of the stuff on DVD that I want to watch is pretty eclectic and only comes along every so often, so so why bother.
Netflix's new pricing plan: it will cost $7.99 for unlimited streaming, plus an additional $7.99 for the 1-DVD at a time plan.
Although existing customers are grandfather in until September 1st, obviously my first reaction to this gigantic rate hike was to have an aneurysm and vomit all over the place. But being the empathetic soul that I am, tried to look at this from Netflix's point of view. What prompted such a drastic shift in their priving scheme? Well, it's a two folded problem. First, let's look at the new challenges that now face their streaming side of the house.
When netflix first started streaming, the likes of Hollywood folks such as Stephen Spielberg, Michael Bay, and James Cameron weren't entirely sure if streaming movies was just a passing fad or not. So when Netflix approached them asking to license their media, eh, it was more of an experimental gestures on Hollywood's behalf. In 2010, the cost for Netflix to license all of their streaming movies was around $180 million dollars in fees paid out to Your Favorite Hollywood Entity. But with DVD/Blu-Ray sales down, now Hollywood sees that streaming media is indeed the way of the future and with more streaming players in the market (Hulu, Amazon, Apple, Google), rights to streaming media are becoming a rather lucrative commodity. What cost Netflix $180 million in 2010, is expected to cost them $1.98 BILLION in 2012. For those of you keeping score, that's an ELEVEN fold increase in licensing costs.
Now let's look at the mail-order DVD rental side of the house -- which I just want to go on record as predicting to die off within five years. Anyway, when Netflix first opened their doors back in 1999, the cost of mailing out one movie was $0.33 each way. Now twelve years later and it's $0.44, that's a 33% increase in costs. So every time Netflix mails me a movie and I sent back to them in their pre-paid envelopes, it costs them $0.88. Where I live, the turnaround time for a movie is two days after I order it -- so if I order it on Monday afternoon, it's in my mailbox on Wednesday afternoon. Let's say I watch it that night, and mail it back on Thursday -- if I get it into a mailbox before 10am, Netflix will receive it on Friday and mail me out another movie that afternoon. Lather, rinse, repeat. Turn around time for a movie: 5 days. Number of DVDs I can get mailed out in a 30 day period: 6, although 7 isn't unrealistic if I'm quick about getting the movies back out the door. But let's use 6 DVDs per month x $0.88 per DVD (not including their purchase price) = $5.28 in postage costs per month. Subtract that $5.28 from the $9.99 I'm paying now and Netflix gets paid $4.71 to let me stream their entire movie collection.
In 2010 it costs Netflix about $0.05 to stream a high definition movie, and predictions are their licensing fees for streaming media are going to increase to eleven times what they are now, it will soon cost them $0.55 to stream a movie to your living room. Let's say you only stream 3 movies per week -- that's 12 movies per month -- equals $5.28 in postage fees + $6.60 in licensing fees = $11.88 Netflix needs to take in, just to break even. Not pay the employees, or keep the lights on, or make any profit. That's $11.88 just to break even. So if they continued their $9.99 plan, they would be losing $1.89
per month, per customer... all ten million of them. Now how long do you think Netflix would be in business if they lost almost $19 million dollars each month?
So here's how the profit from their pricing plans today, versus what they're going to and why they have to do it:
Streaming cost for 12 movies
Postage cost for 6 movies
monthly subscription fee
profit per subscriber
Old All Inclusive
12 x $0.05 = $0.60
6 x $0.88 = 5.28
If they continued old All Inclusive
12 x $0.55 = $6.60
6 x $0.88 = $5.28
New Streaming Only
12 x $0.55 = $6.60
New DVD Only
6 x $0.88 = $5.28
Both Streaming and DVD
12 x $0.55 = $6.60
6 x $0.88 = $5.28
So if you were to sign up for both packages and fork over $15.98 to Netflix instead of the $9.99 you are now, they will actually making the same profit each month ($4.11 vs $4.10) that they are today. Netflix is not not jacking up prices to cornhole their subscribers, they're simply passing their cornholing on to us. If you want to blame someone for the price increase, blame Hollywood (receiving 82% of your subscription fee) and their $100 million dollar movie budgets and actors that command $25 million per film, or the postal service (receiving 66% of your subscription fee). But isn't Netflix's fault.
A thousand years ago, consulting a doctor about abdominal pains would have earned you a week in bed, covered with leeches, while a shaman sprayed chicken blood all over your torso. These days it seems to most of us that medical science has advanced a little since then.
Well, we hate to break it to you, but many of the common procedures in use today are about as useful, if not more dangerous, than that bucket of leeches from ages past.
Your Yearly Physical
The yearly physical is by far the most common reason people go to the doctor. He looks, he feels, you take a deep breath, he listens. Maybe he takes some blood. Then you get out of there with another year of health in front of you. They're probably the most known and accepted staple of Western medicine, with 64 million of them performed per year.
So..what's the problem?
Can you guess who gets the yearly physical?
Routine physical examinations first caught on in the 1920s, when it was discovered that people who got yearly exams tended to live longer.
Unfortunately, this is a classic case of confusing correlation with causation. The kinds of people who like to keep up-to-date with their physical exams are the same kinds of people who focus on keeping a healthier lifestyle in general.
As it turns out, physical exams provide no real benefit if you don't have any actual symptoms of anything, according to the Department of Health and Human Services. Most of the time, you'll know that there's something wrong with you long before a doctor can detect it by cupping your balls.
Still, the physical exam is the bread and butter of the medical industry. Depending on your personal level of hypochondria, you can sign up for anything from a $5,000 Executive Special to your regular $120 McCheckup. All secure a steady income for doctors, and all are almost entirely pointless.
But just because it doesn't do any good, that doesn't mean it does any harm, right?
Well, first of all, the pricier examinations will usually involve plenty of those cancer-inducing CT scans. But then let's say that they do come back showing something suspicious. This leads to more expensive and invasive tests that often show that there was nothing wrong to begin with. The human body is actually full of things that look like tumors on a scan result, but if none of them are growing tentacles and slithering around your arteries, investigating every one of them just subjects you to unnecessary scalpel-stabbing.
Then again, what if the tests come back negative? Isn't the peace of mind worth it? Again, not so much. Apparently, this lulls people into a false sense of security, and they walk away feeling totally healthy. As we've pointed out, tons of terrible diseases can't be detected until they become symptomatic. But when symptoms of an actual disease do show up, people who get physicals are less likely to get these symptoms checked out because they got a "clean bill of health".
Yet doctors keep doing them, often just to get us to shut up. They say that it's usually quicker to just run some tests than to take the time to explain why they're not necessary. Insurers, in turn, cover them only because we want them. And all these quick bucks add up to over $7 billion per year.
Toscanini's Ice Cream in Boston has raised their prices 10% in 4 months.. the Boston Globe wanted to know why, so they dug into the supply chain.
... the true cost of an ice cream cone is no simple business calculation...
The story of this scoop of ice cream, as it moves from raw materials to finished prod uct, captures the myriad forces that are pushing food prices higher and putting pressure on beleaguered US consumers and a tentative economic recovery. Like other commodities, milk, sugar, and gasoline prices have soared because of rising demand, catastrophic weather, and political unrest.
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 ball. "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 men would 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? 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 every body'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 a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay. And so the fifth man, like the first four, now paid nothing (100% saving). The sixth now paid $2 instead of $3 (33% saving). The seventh now paid $5 instead of $7 (28% saving). The eighth now paid $9 instead of $12 (25% saving). The ninth now paid $14 instead of $18 (22% saving). The tenth now paid $49 instead of $59 (16% saving).
Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings. "I only got a dollar out of the $20 saving," 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 benefit than me!" "That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax 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 their 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, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally 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.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.
What They Said: Mike says Darn Straight! on 3/19/2011 Well put! Found some help with a CSS issue here...and now taxes explained in Beer terms, I love it! Thank You. Mike