In this episode, we discuss how we need to have the ability to look behind the current so that we know what’s going on and can take advantage of the situation.
Full Transcript
Hi Everyone, welcome to the You’re Daily Cup of Joe Podcast, with your host Joe Bautista. In this podcast, my goal is to give you quick lessons that you can reflect on in your journal so you can grow yourself physically, mentally, emotionally, and spiritually and have a better career, better relationships, and better personal finances while you enjoy your morning cup of coffee.
I’m also the author of the book “More You Know, More You Grow: How to Get Better Every Day”. In this book, I wrote down over 30 tips to help you grow in those four cornerstones. I’m also the founder of Grow With Joe, where I combine self-development coaching and financial planning for Latino Professionals.
In today’s episode, we are going to talk about one of my favorite books “Freakonomics: A Rogue Economist Explores The Hidden Side Of Everything,” and how this book changed the way I view the world.
This is a very eye-opening book because it caused me to rethink my values and beliefs and taught me a very valuable lesson that causation was no correlation. You need to look at the data to formulate an opinion. For most people, they are argument strong, but data weak in their opinions. It’s fine to have an opinion, but the opinion starts to lose ground when it’s based entirely on Fairness. Yes, it would be nice if everyone got what they wanted out of life, but Nature is not a very nice place.
Animals still have to survive using their various techniques, and I believe people need to do the same thing. If everyone on this planet was to consume at the same rate as an American, we would need to have all the land space on the world to be covered by solar panels. I heard on a podcast that 100 football fields are being removed every minute to plant cocoa bean plants for chocolate production. And there are plastic islands in the Ocean that are the size of Texas. For most people, we don’t see these things because they in another part of the world, but I feel like we do things, we should consider our actions.
Me alone, I can’t tear down an entire rain forest, but 7 billion people who want chocolate at the same time can get rid of the entire rain forest, but nothing was done to stop it and people wouldn’t find out until the price of chocolate goes up. Now there are many factors to consider and people might come up with a solution in the future to mitigate the harmful effects tearing down the rain forest.
Then there is the conversation of helping people make a living as well in these developing countries. So things are not as simple as saying don’t do this. And this is what I liked about the book, Freakonomics because it opened up my eyes about how we can actually be causing more harm than good. In the book they talked about how Wade vs. Roe was the biggest thing that slowed down crime in New York in the late 80s and 90s since there were less unexpected pregnancies, this caused fewer people who would be more prone to criminal activity in the 80s and 90s, which would then cause the crime to go down.
I believe there are other things in life that can contribute to this decline, but this example was very interesting to me that caused me to ask what happened in the past to cause us to get where we are today.
If you look at tax rates in the 1930s, the highest tax rates were in the 90s during world war 2. Then in the 70s, the highest tax rate went to 70%. Now the rate is 37%. Now during this time, the government budget has never been bigger and we pay for a lot more things and as a nation, but when it comes to government spending dollars, they spend their money about 75% of their budget on three things, social security, medicare, and military spending.
So before we raise our taxes, you might want to ask why are these three government projects cost so much money? Can we do something that makes these three programs more efficient before we just start throwing more money at them? Just because you raise taxes doesn’t mean more of your tax dollars goes to things that you actually want to fund, they will just go to these three programs the most. And social security and medicare, are expected to face shortfalls in about 15 years.
So reading Freakonomics causes me to question correlation and causation. Just because you raise taxes doesn’t mean it’s going to make things better. There are probably government programs that would help society, but these needs are put up against other needs. I don’t understand why we’re still making tanks. Tanks so slow and modern weapons can take them out faster than you can build them and pay for them.
Bigger and stronger doesn’t always win the fight, but after reading about how defense contractors like to lobby military officers to buy these defense contracts and then all of a sudden we spend billions of dollars on waste technology that will never be used because when things are bigger and stronger, they typically cost more money to produce and defense contractors get more money for their contracts.
You will hardly ever meet a consulting group that doesn’t tell you that you need to spend more money on consulting services because they are in the business to add things so they can justify why they get paid.
This is just one of many different areas where people need to question what is going on around them and try to see the hidden side of everything. This will require us to do research and not follow the headlines and sound bites. If your hearing that you need to buy a house, ask yourself what are the hidden agendas for the people saying that. A realtor makes money by helping people buy and sell their homes. A mortgage broker makes its money by offering mortgages for home buyers. You could afford a $300k home, but would a $150k home suffice? So just realize that you might be under someone else’s influence and you’re not seeing the entire picture and the best way to see the entire picture is just to ask why a couple of times. Then once you get to the absolute truth for yourself, then you can start making decisions with actual impact and prevent a lot of waste.
And that’s it for today’s episode, to summarize it, there is a hidden side to everything. The actions of today will affect something else either now or in the future. You also might be experiencing the effect of a decision made a hundred years ago, and so we have to remember that correlation is not causation. Just because you see it’s cloudy outside, doesn’t mean it’s going to rain that day. Things depend on the circumstances for that day. Also, realize that the preferences that you have today come from a lot of outside influences in your environment. This could be a good thing, a bad thing, or it could just be a neutral event, but if you want to be least wasteful with your life, make sure you’re understanding the hidden side of events and decisions. There can be unintended consequences that people are not aware of, and these can be good consequences or bad ones, but the key is we want to minimize the bad ones and we can do this by knowing how to make better decisions in our day that help us out and the world out as well. So read the book Freakonomics and start expanding your horizons.
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