Gyroscopic Investing

Posted: **Tue Jun 10, 2014 6:43 am**

Americans now spend over 20 billion dollars a year on bottled water and probably umpteen billions more on water filters and other devices. This strikes me as a stupid free market inefficiency....and I want some clarification on this from the zealots here. I think if the money that individuals spent on crappy plastic tainted bottled water were invested into better public water systems it would be much more efficient. Delivering water on a truck to convenience stores instead of sending it through pipes strikes me as being the height of absurdity and the markeup of 200,000 percent on the product similarly strikes me as asinine. Why don't we just take this money and pipe our public water systems with gold and use the remaining money to filter the water to "bottled water" quality?

Posted: **Tue Jun 10, 2014 7:43 am**

doodle wrote: I think if the money that individuals spent on crappy plastic tainted bottled water were invested into better public water systems

You want individuals to invest in public water systems?

I agree that bottled water is wasteful. I use a Brita filter at home and carry a BPA-free water vessel when I need it.
I love the public bottle fillers that are popping up: http://online.wsj.com/news/articles/SB1 ... reno64-wsj

Posted: **Tue Jun 10, 2014 8:05 am**

Better a zealot than a boobus. Thanks for the insult!

Posted: **Tue Jun 10, 2014 8:11 am**

dualstow wrote:
doodle wrote: I think if the money that individuals spent on crappy plastic tainted bottled water were invested into better public water systems
You want individuals to invest in public water systems?
I agree that bottled water is wasteful. I use a Brita filter at home and carry a BPA-free water vessel when I need it.
I love the public bottle fillers that are popping up: http://online.wsj.com/news/articles/SB1 ... reno64-wsj

No...Im saying that the market is oftentimes an inefficient way to provide basic essential services like water. Individually we spend billions for bottles of water every year instead of collectively pooling the money and resources to construct a system that makes buying this resource in overpriced plastic bottles obsolete.

The market doesn't always lead to the most efficient solutions to basic problems.

Posted: **Tue Jun 10, 2014 8:21 am**

doodle wrote:
dualstow wrote:
doodle wrote: I think if the money that individuals spent on crappy plastic tainted bottled water were invested into better public water systems
You want individuals to invest in public water systems?
I agree that bottled water is wasteful. I use a Brita filter at home and carry a BPA-free water vessel when I need it.
I love the public bottle fillers that are popping up: http://online.wsj.com/news/articles/SB1 ... reno64-wsj
No...Im saying that the market is oftentimes an inefficient way to provide basic essential services like water. Individually we spend billions for bottles of water every year instead of collectively pooling the money and resources to construct a system that makes buying this resource in overpriced plastic bottles obsolete.

The market doesn't always lead to the most efficient solutions to basic problems.

I also notice that water fountains are horribly maintained. I think this is a chicken-egg thing. How many times do you walk up to a double water fountain and they BOTH actually work.

Posted: **Tue Jun 10, 2014 8:27 am**

doodle wrote: I think if the money that individuals spent on crappy plastic tainted bottled water were invested into better public water systems it would be much more efficient.

So you want to remove our ability to make personal choice, and substitute something from the gov't. You wouldn't be left of center politically would you?

"Americans now spend over 20 billion dollars a year on bottled water"
And how much is Obama spending on lawyers for illegal immigrant children? Or PR on Obamacare? Which bothers you more?

Posted: **Tue Jun 10, 2014 8:29 am**

TennPaGa wrote: * I don't think the quality of bottled water is necessarily much different from that of tap water.

Good point which is why it is important to only by reverse osmosis bottled water e.g. aquafina.

Posted: **Tue Jun 10, 2014 8:50 am**

doodle wrote: The market doesn't always lead to the most efficient solutions to basic problems.

The free market has to work miniminally unhindered. When you have no ownership and pricing of scarce resources like fresh water, how are people supposed to price and allocate said scarce resources efficiently? Doh! Bottled water is sort of like market cronyism, rather than political insiders profiting from backroom deals, it is a consumer response to government incompetence along with a healthy dose of marketing fiction.

It's vastly cheaper to buy that mini-RO system I've mentioned several times than spend money on overpriced bottled water. Yet, why do very little people do it? Maybe because they a) don't really care about their health, b) they're lazy boobuses, c) they like to be seen drinking whats a fad de jour, d) they fail at basic math. When this kind of attitude "floats to the top", is it any surprise there's no political will for public infrastructure investment? I bet theres more political will for "a mini-RO system in every pot".

I'm no Enviro-Nazi, but this is so lovely where some of those bottles end up:

Posted: **Tue Jun 10, 2014 8:59 am**

Benko wrote:
doodle wrote: I think if the money that individuals spent on crappy plastic tainted bottled water were invested into better public water systems it would be much more efficient.
So you want to remove our ability to make personal choice, and substitute something from the gov't. You wouldn't be left of center politically would you?

"Americans now spend over 20 billion dollars a year on bottled water"
And how much is Obama spending on lawyers for illegal immigrant children? Or PR on Obamacare? Which bothers you more?

Sigh. Im simply drawing attention to the inefficiencies of a system where a common problem is solved by individual decisions.

Problem: People want clean, safe, accessible water.

Two solutions exist:

1. We put water in BPA leeching bottles and use an enormous amount of fossil fuels to truck it around.

2. We build and maintain a common piping system with state of the art filtration systems and send water around through this.

So you want to remove our ability to make personal choice, and substitute something from the gov't.

The personal choice of whether to drink, bathe, and wash with water or not?

Posted: **Tue Jun 10, 2014 9:03 am**

[url=http://It's%20vastly%20cheaper%20to%20buy%20that%20mini-RO%20system%20I've%20mentioned%20several%20times%20than%20spend%20money%20on%20overpriced%20bottled%20water.]It's vastly cheaper to buy that mini-RO system I've mentioned several times than spend money on overpriced bottled water.[/url]

I would expect to have to do this in a third world country....when I lived in third world countries I drank everything out of bottles. Unfortunately, the richest country in the world is letting our infrastructure decline to third world levels.

I think it is much more efficient to have centralized filtration systems than to have 300 million consumers have to hook one up to all of their faucets and go through the hassle of maintaining them.

Posted: **Tue Jun 10, 2014 9:20 am**

The June 2014 issue of Popular Science is all about water and has some neat ideas. One is from Segway inventor Dean Kamen. It's called the Slingbox Slingshot, rather and it provides fresh water in an environmentally friendly way, unlike reverse osmosis. I think he already has one set up in South Africa.

doodle wrote:
dualstow wrote:
doodle wrote: I think if the money that individuals spent on crappy plastic tainted bottled water were invested into better public water systems
You want individuals to invest in public water systems?
No...Im saying that the market is oftentimes an inefficient way to provide basic essential services like water. Individually we spend billions for bottles of water every year instead of collectively pooling the money and resources to construct a system that makes buying this resource in overpriced plastic bottles obsolete.
The market doesn't always lead to the most efficient solutions to basic problems.

I think there are two different things going on here, doodle. If people buy bottled water, it's largely because of marketing. It's also due to convenience and laziness. People who can't take the trouble to fill a bottle may buy some. And, corporations and conventions always supply them.

U.S. tap water is already pretty good, isn't it? I remember seeing on the news that New York City tap water is better than Deer Park that's been sitting on a shelf for 30 days and has begun to grow unwanted organisms.

In any case, like Tenn said, if public filtration systems need improving, by all means let's improve them. But as *I'm* saying, this shouldn't have anything to do with the market or individual spending. It should come out of some other part of the gov't budget, right? Since when did residents of a capitalist country collectively pool their money for anything other than charitable giving after a catastrophe?

Posted: **Tue Jun 10, 2014 9:26 am**

doodle wrote: I think it is much more efficient to have centralized filtration systems than to have 300 million consumers have to hook one up to all of their faucets and go through the hassle of maintaining them.

What hassle? In the four years I've had a mini-RO system, I've yet to replace a single filter. And I do have a TDS meter to check the levels of solids so I can see when it is time. And I think this is testament to the high quality of clean water provided by the municipality less all the toxic chemicals I choose not to ingest (flouride, solid rocket runoff, etc.).

Posted: **Tue Jun 10, 2014 9:34 am**

doodle wrote:
Benko wrote:
doodle wrote: I think if the money that individuals spent on crappy plastic tainted bottled water were invested into better public water systems it would be much more efficient.
So you want to remove our ability to make personal choice, and substitute something from the gov't. You wouldn't be left of center politically would you?

"Americans now spend over 20 billion dollars a year on bottled water"
And how much is Obama spending on lawyers for illegal immigrant children? Or PR on Obamacare? Which bothers you more?
Sigh. Im simply drawing attention to the inefficiencies of a system where a common problem is solved by individual decisions.

Problem: People want clean, safe, accessible water.

Two solutions exist:

1. We put water in BPA leeching bottles and use an enormous amount of fossil fuels to truck it around.

2. We build and maintain a common piping system with state of the art filtration systems and send water around through this.

So you want to remove our ability to make personal choice, and substitute something from the gov't.
The personal choice of whether to drink, bathe, and wash with water or not?

I knew you thought water contributed to global warming

I just had not thought of this connection. WE NEED MORE REGULATION ... NOW!!!!!!!

On a more serious note, where are you on Pampers? Convenience or crappiness? Regulate poop or go freely where no man has gone before?

... Mountaineer

Posted: **Tue Jun 10, 2014 9:54 am**

Wait, hold up.

Let me get this straight: Government-constructed water infrastructure is lousy, and water companies that are either government-owned (like mine) or so heavily regulated as to be government-owned in practice deliver lousy water… and this is the fault of the market economy that provides people with alternatives to the poor-quality monopoly service? Am I missing something? It seems to me that if the private sector is providing alternatives to poor-quality monopoly-provided products, we should be be thanking private industry, not scorning it.

Right? Am I just crazy?

Posted: **Tue Jun 10, 2014 10:01 am**

doodle wrote: Americans now spend over 20 billion dollars a year on bottled water and probably umpteen billions more on water filters and other devices. This strikes me as a stupid free market inefficiency...

What free market? The govt enforces monopolies on piped water. So not surprisingly, that piped water often can't even compete with bottled water trucked in under a freer market model. This is typical of anything the government touches.

doodle wrote:I think if the money that individuals spent on crappy plastic tainted bottled water were invested into better public water systems it would be much more efficient. Delivering water on a truck to convenience stores instead of sending it through pipes strikes me as being the height of absurdity and the markeup of 200,000 percent on the product similarly strikes me as asinine. Why don't we just take this money and pipe our public water systems with gold and use the remaining money to filter the water to "bottled water" quality?

Agree with you there. But what do you think would happen if you and I tried starting a business which pipes better water to people than what public utilities currently offer? I imagine we'd be shut down pretty quickly by the government.

Pointedstick wrote: Wait, hold up.

Let me get this straight: Government-constructed water infrastructure is lousy, and water companies that are either government-owned (like mine) or so heavily regulated as to be government-owned in practice deliver lousy water… and this is the fault of the market economy that provides people with alternatives to the poor-quality monopoly service? Am I missing something? It seems to me that if the private sector is providing alternatives to poor-quality monopoly-provided products, we should be be thanking private industry, not scorning it.

Right? Am I just crazy?

Right.

Posted: **Tue Jun 10, 2014 10:06 am**

My water quality is very high. It's provided by the city.

Some are crap.

I really question the ability of the free market to provide efficient water to homes, not because the "free market sucks," but because of the issues of maintaining competition.

Is there an example of a competitive free market water delivery system out there?

Posted: **Tue Jun 10, 2014 10:11 am**

Let me quote a passage from the book I'm working on:

Other services pose more problems—those where there is a “natural monopoly”? such as a water company; today it is not considered feasible to plumb the streets with multiple separate sets of pipes and have a selector valve for each house. But why not? It is not inconceivable that in communities of any reasonable size, the road companies would actually be eager to have multiple sets of water pipes buried underground, ready to be rented out to aspiring water companies. In this manner, there could even be multiple competing plumbed water companies, with homeowners able to choose their water company using a valve at the edge of their property that connects the various pipes to their homes. The same could be said of companies offering electricity, natural gas, internet service, or anything else commonly considered a “natural monopoly”? due to a requirement for buried infrastructure. The road companies could actually make a tidy profit breaking up these “natural monopolies”? by building and renting out infrastructure suitable for multiple competing firms.

In fact, even today there is absolutely nothing preventing governments from plumbing the streets they own with multiple sets of pipes, electrical conduits, and even tunnels, and then inviting multiple competing firms to rent the infrastructure, pocketing the rents and extra tax revenue. Why have politicians and government administrators not picked up on this incredibly obvious and lucrative opportunity that would benefit everyone? Again, it comes down to the lack of a profit motive. Governments do not need to earn a profit by selling products, services, or real estate; with their taxation power and printing press, they can simply take money by force or create it out of thin air. As a result, there is no systemic incentive for governments to come up with clever win-win propositions that make money for themselves the way individuals and firms have.

Posted: **Tue Jun 10, 2014 10:16 am**

moda0306 wrote: My water quality is very high. It's provided by the city.

Some are crap.

I really question the ability of the free market to provide efficient water to homes, not because the "free market sucks," but because of the issues of maintaining competition.

Is there an example of a competitive free market water delivery system out there?

My water is sourced and piped by a private company. Water quality is the best in the area. I'm not sure how competitive it is as it is the only one that supplies my area.

http://www.artesianwater.com/about-artesian

... Mountaineer

Posted: **Tue Jun 10, 2014 10:32 am**

moda0306 wrote: I really question the ability of the free market to provide efficient water to homes, not because the "free market sucks," but because of the issues of maintaining competition.

Could you elaborate on this?

Posted: **Tue Jun 10, 2014 10:39 am**

Stewardship wrote:
moda0306 wrote: I really question the ability of the free market to provide efficient water to homes, not because the "free market sucks," but because of the issues of maintaining competition.
Could you elaborate on this?

The fixed costs associated with getting one person water to their home is quite high (if you ignore the ability to use wells). In an industry with good competition, often, every competitor must duplicate fixed costs rather than share them. Most often this is worth the disadvantages. Sometimes it's not.

Gotta go! Tour of Tyranny isn't over yet. All-hail the state.

Posted: **Tue Jun 10, 2014 10:45 am**

moda0306 wrote: The fixed costs associated with getting one person water to their home is quite high (if you ignore the ability to use wells). In an industry with good competition, often, every competitor must duplicate fixed costs rather than share them. Most often this is worth the disadvantages. Sometimes it's not.

Gotta go! Tour of Tyranny isn't over yet. All-hail the state.

Like I said in my imaginary example, it would be simple for the owner of the road (government or no) to duplicate the infrastructure and then rent it all out to utility companies. If they're already digging a hole, putting three pipes in there instead of one isn't that much of an additional cost (most of which is in the excavation), and the profit from these rental agreements would easily pay for the higher one-time cost.

Posted: **Tue Jun 10, 2014 11:23 am**

Pointedstick wrote:
moda0306 wrote: The fixed costs associated with getting one person water to their home is quite high (if you ignore the ability to use wells). In an industry with good competition, often, every competitor must duplicate fixed costs rather than share them. Most often this is worth the disadvantages. Sometimes it's not.

Gotta go! Tour of Tyranny isn't over yet. All-hail the state.
Like I said in my imaginary example, it would be simple for the owner of the road (government or no) to duplicate the infrastructure and then rent it all out to utility companies. If they're already digging a hole, putting three pipes in there instead of one isn't that much of an additional cost (most of which is in the excavation), and the profit from these rental agreements would easily pay for the higher one-time cost.

So the main pipeline would be government owned...then there would be three pipes coming off main branch which would all connect into homeowners plumbing?

Im not picturing how this works....

What is the private company doing in this scenario besides providing 1 5 foot long connection between primary water lines and homeowners house? Who is running the water treatment plant and how is it getting from there to my neighborhood? You aren't proposing triplicating water, sewage, and electric lines are you?

Posted: **Tue Jun 10, 2014 11:39 am**

Yes. The actual pipes are only a very small percentage of the total cost; it's really not that crazy. Here's how I'm envisioning it: the government/road owner digs one trench and puts three parallel water pipes in it, and at each house they meet at a selector valve, allowing the homeowner to choose which water pipe he wants to supply his house. Presumably there would be wireless meters immediately before the valve that transmits usage information. The government/road owner provides aboveground inlets where these buried pipes can be supplied with water from. It then invites multiple water companies to set up shop and attach their output pipes to the inlets of the buried pipes. In this manner, homeowners can choose from among a number of competing water companies equal to the intersection of the number of buried pipes and the number of water companies that are interested in using them. If more water companies spring up later, it could expand the infrastructure the way contemporary governments expand roads when congestion becomes high.

The government/road owner could do the same for sewer pipes, electrical lines, natural gas lines, coax cables, you name it. Rents from charging for usage of the infrastructure would offset the higher fixed costs and result in a recurring income stream.

I don't see any particular reason why this arrangement wouldn't work well and benefit everybody.

Posted: **Tue Jun 10, 2014 12:42 pm**

That would be hilarious: roadside stand Poland Spring??

The problem isn't so much the water, it's how people feel about drinking out of a public water fountain...I've seen people in Central Park buying water from a food truck parked not 5 feet from a public water fountain in perfect working order. And maybe also a level of distrust as regards what goes into the water (fluoride, chlorine, etc). None of these issues would be solved with bigger pipelines.

There's also the issue of needing to plan ahead to bring a water container with you. Plain and simple, it'll never happen. I once had a delightful experience with this type of conservation while traveling in the Soviet Union: I bought a bottle of water and discovered that my money only bought the water, not the bottle. You weren't allowed to take the bottle out of the store. Lacking a container, I had to drink it all on the spot. In retrospect that was kind of dumb because it was probably just tap water.

Posted: **Tue Jun 10, 2014 1:23 pm**

TennPaGa wrote:
Pointedstick wrote: Here's how I'm envisioning it: the government/road owner digs one trench and puts three parallel water pipes in it, and at each house they meet at a selector valve, allowing the homeowner to choose which water pipe he wants to supply his house.
...
I don't see any particular reason why this arrangement wouldn't work well and benefit everybody.

I don't understand what problem would be solved by such an arrangement.

What do I have to gain by offering me a choice of my water supplier? What does my 83 year old father gain?

Also, water is (for now and the forseeable future) the commodity of all commodities. In a commodity market, low cost wins every time, so you'd end up with one supplier. You'd eventually have Republican Congressmen cursing you for wasting all that money on two extra pipes.

Then again, I could foresee stealth polluters manipulating/decommoditizing the market. Kind of like what we have now in the medical/pharmaceutical/food industry (whoops, wrong thread ).

I suppose the marketing frenzy might provide entertainment value.

I don't understand it either....

All Im saying is that it seems to make more sense (to me) to spend a tiny fraction of the 30 billion + Americans spend on bottled water and filters every year to just upgrade our public water systems to provide high quality water so that we don't have to go through all the effort and expense of filtering our water when it comes out of our taps or buying water in bottles that has been trucked around to various locations.

As far as the "forgetting to bring a bottle with you" and the convenience factor. Im sure stores could sell empty bottles for like 10 cents that you could fill up in the water fountain.

Gyroscopic Investing

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