The Corruption of a Local GOP

In the 2013 mayoral election for the city of Syracuse, there was no Republican candidate to run against incumbent Democrat, Stephanie Miner.  To give the people of Syracuse a choice, Ian Hunter, a local conservative, and a small group of activists wore out their walking shoes going door to door to collect enough signatures to get his name on the ballot.  The requirement was 569 signatures.  The group was able to collect 680 thereby securing his nomination.  

After their customary review, the Board of Elections ruled that they’d only collected 572 “valid” signatures.  According to people knowledgeable of the process, the BOE will often deem a signature invalid for the tiniest mistake – if the person’s street address is misspelled, a T isn’t crossed, or the name they write doesn’t match exactly to the name on record (i.e. the signator leaves off the ‘Jr.’).  For an institution that is charged with ensuring a fair electoral process, it sure has a lot of power to suppress a voter’s voice.  Still, Hunter was on the ballot with three more signatures than needed.

The Onondaga County GOP leadership, led by Tom Dadey, however; was for some reason afraid of Hunter’s candidacy.  Maybe they were afraid that if elected, he’d actually stand on the limited government conservative principles that his campaign was based on.  Some speculated whether the local GOP leaders are actually double agents for the Democratic Party.  That seems ludicrous, but their actions during the election certainly invite that kind of accusation.

To start, the local GOP never made a serious effort to find a Republican candidate to challenge Miner in 2013.  Tom Dadey, Onondaga GOP “Boss”  (as he pompously calls himself) put his own name in as a candidate, but was knowingly unqualified because he wasn’t a resident of the city.  Next, he put in Kevin Kuehner, who never intended to run, and against whom the Democrats filed a lawsuit to challenge his candidacy.  In response to that lawsuit, Dadey said, the “Democrats are pulling out all of the stops to ensure that this is a coronation and not an election.”  That statement could just as easily be applied to Dadey himself.

When the petitions were filed to put Hunter’s name on the ballot, there were expectations that Dadey would comb through every last signature in order to disqualify Hunter.  When the Board of Elections didn’t succeed in getting the number of signatures below the required amount, Dadey took matters into his own hands.  Dadey took Hunter to court to remove him from the ballot.

The pettiness of Tom Dadey and the local GOP establishment can be detailed by one particular signature they fought to invalidate.  During petitioning, an elderly gentleman answered the door of his house, listened to the spiel, liked what he heard, and was glad to sign the petition.  The problem was that he had a severe case of Parkinson’s Disease and was too shaky to sign his name.  He instead had his wife sign for him.  Dadey and his team of lawyers argued that this was an invalid signature because it did not come from the person in question.

The judge ruled in favor of Dadey on this and in several similar circumstances.  His rulings brought Hunter to below the required threshold and disqualified him from being able to appear on the ballot.  For a so-called democracy, this should give people pause.

Dadey and his cronies won, and Miner ran for mayor unopposed.  For the first time in over 100 years, Syracuse’s mayoral election consisted of a solitary candidate.  Local grassroots activists were able to do what the local GOP establishment could (would) not – field not just a Republican candidate, but a genuine conservative at that.  In response, the GOP establishment went to the extreme in order to prevent that from happening.

The actions of Tom Dadey and his GOP machine should say all that needs to be said about the state of our “representative” government.  If this is the kind of thing that happens at the local level, one can only imagine what kind of shenanigans goes on in D.C.

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Ayn Rand, Rand Paul, and Paul Ryan Walk Into a Bar…

The age of social media has given rise to an increasingly large group of people who believe that a couple sentences, or even just a few words posted on a picture constitute an effective argument.  While in some ways, political and philosophical debate is healthier than ever before, the over reliance on simplistic arguments is creating a “meme world” where an asinine idea can be conveyed in few words and posted in mere seconds.  Proper refutation, however; takes more than a few words.

In the 140 character world of Twitter, these types of arguments exist almost exclusively.  This tweet from “Miss O’Kistic” has made its rounds in the online world:

“Ayn Rand, Rand Paul and Paul Ryan walk into a bar.  The bartender serves them tainted alcohol because there are no regulations.  They die.”

It’s the classic, “But if not for the state, how would we…” delusion.  People live in such fear over the possibility of government shrinking just one iota, that when confronted with radical reduction of government, or even (gasp!) complete elimination of government, they lose their minds.  The possibility to engage in rational discussion disappears, and they immediately jump to what they believe to be the only possible scenario, “We’d all die!!!”

For anyone even somewhat knowledgeable of free market economics, it is easy to address these concerns.  The market is more than capable of regulating itself, oftentimes much more effectively than is done by government; if something is demanded by the consumer it will be provided by the supplier.  Unfortunately, the economically ignorant often will not be satisfied with that explanation and will demand to know exactly how, in the absence of governmental regulations, people could be safe from dangers such as “tainted alcohol.”

Ok, fine.

To start, a bar or a liquor company would quickly lose customers and risk going out of business if it became known that they had served a bad product that caused illness.  Word of mouth is a powerful tool – especially in today’s digital age – and something like this would spread rapidly.  Businesses are in the game to make profits, so fear of losing customers and incurring losses provides a strong incentive for them to ensure that the products they serve are safe.

If they accept this premise, their next objection will be that this only addresses the problem after the fact – that there would be no way to make sure tainted alcohol didn’t become a problem in the first place.  Ignoring the fact that government regulations don’t prevent food or drink related illnesses, this objection is still unfounded because the free market would do a better job of that as well.

In any particular city, there are at least several bars that serve food and drink which all compete for customers.  With the absence of universal government regulations, one of them might choose to advertise a ‘guarantee of food & drink safety’ as a method of gaining a competitive advantage.  Their guarantee carries with it a promise to cover any and all medical costs associated with illness contracted by ingesting their products and is backed by an insurance company the bar has contracted with.

To receive the best possible insurance rates, the contract between the bar and the insurance company includes various stipulations.  In exchange for coverage of any potential liability, the insurance company requires the following:

  1. The bar will allow a preliminary inspection prior to execution of the contract, and periodically thereafter.  If the bar is found to be noncompliant of the insurance company’s standards, they will have a reasonable period of time to resolve the issue.  If the issue goes unresolved, the rate of insurance will increase.
  2. The bar will serve only food and drink that is supplied by vendors who are satisfactorily certified.  (The insurance company will provide a list of such vendors as well as contact information for food/drink certification firms that the bar’s current vendors can use if they are not already certified).
  3. The bar will display or otherwise make available to their customers a notice of disclosure with all relevant information pertaining to the contractual agreement between the bar and the insurance company.

Upon execution of the contract, the bar launches a marketing campaign to promote their new policy.  The move garners goodwill from the public, and the bar sees an immediate jump in both clientele and profits.

Other bars and restaurants see this and enter into similar insurance contracts so that they too can advertise safety guarantees.  Before long, such agreements are commonplace.  Competition between bars and restaurants drives up quality and safety standards while also driving down the cost of such insurance policies as the insurance companies compete for contracts.  The number of companies that certify food and drink vendors increase alongside the increasing demand for such services which results in similar quality increases and cost reductions.  Consumer confidence ratings soar.

See how easy that was?  All it takes to see how regulation would naturally occur in the free market without government is a little imagination.

James J. Hill and The Liquidation of Malinvestment

James J. Hill is unquestionably one of the greatest entrepreneurs in American history.  This past weekend marked the 100th anniversary of his passing.  He is best remembered for the successful construction of the only transcontinental railroad to not go bankrupt.  He didn’t accept government subsidies, and argued eloquently against his competitors who did:

“The government should not furnish capital to these companies, in addition to their enormous land subsidies, to enable them to conduct their business in competition with enterprises that have received no aid from the public treasury.”

His endeavors can claim to be largely responsible for the settling and economic development of the upper midwest United States, and for making Seattle into the commercial metropolis that it is today.  For the best histories of the man and his legacy, these two articles (here and here) are unmatched.

Countless business, entrepreneurial, and economic lessons can be learned from a detailed study of Mr. Hill.  One particular economic lesson stems from his entrance into the business of railroad ownership – that of malinvestment and the liquidation thereof.

Hill purchased his first railroad when the Panic of 1873 made purchase of the St. Paul & Pacific line financially possible.  The line had been in steady decline, and eventually made its way into receivership.  With a group of three partners, Hill purchased the line for what he estimated to be 20% of its actual value.  He tirelessly invested in his purchase, extending the line to other cities and connecting it to branches of other lines.

His efforts brought him great success and enormous wealth.  His fortune swelled to an estimated $63 million.  His efforts also led to levels of prosperity for anyone who did business with, worked for, or lived near his lines that had previously only been dreamed of.

The catalyst that started all of this was Hill’s decision to provide the capital necessary to liquidate the malinvestment that the St. Paul & Pacific had succumbed to.  Although much maligned, the liquidation of bankrupt companies or of toxic assets is a good and necessary function of a healthy economy.

Malinvestment, as described by the Austrian Theory of the Business Cycle, is most commonly associated with monetary inflation by central banks.  This malinvestment is the source of bubbles, the cause of economic crises, and must eventually be liquidated.  Of course, the Federal Reserve wasn’t founded until 1913, and there was no central bank in the US in 1873.  That fact does not repudiate the theory as it relates to Hill’s purchase of the St. Paul & Pacific.

Panics occurred prior to central banks whenever governments or “private” banks (with special government granted privileges) artificially create money and credit out of thin air.  The Panic of 1873 was the result of US government monetary expansion to finance the Civil War.  This “funny money” was shoveled towards expanding the railroad network and the iron and steel industries.  Many companies in those sectors eventually failed with 1873 (like the recent 2008 crisis) becoming the year of reckoning.

Many are quick to demonize those who take advantage of these situations to purchase bankrupt companies at “rock-bottom” prices.  Mitt Romney was attacked for his company’s role in just such purchases.  Granted, there is plenty to dislike about Mitt Romney – he’s a politician for Pete’s sake.  But from an economic standpoint, companies like his and that of James J. Hill more than a century ago, serve the public good by correcting the problems of malinvestment.

Corrections as described in the preceding paragraph will certainly be economically painful for some people.  Liquidation of malinvestment can result in job loss, and in financial ruin for those invested in the bankrupt companies.  However, as shown by the history of Mr. Hill, there is much to be gained through these corrections.

Another important point related to the economic pain stemming from liquidating malinvestment is that any pain felt is fundamentally NOT the fault of the companies who purchase or liquidate the financially troubled firms.  The malinvestment was only made possible in the first place by central banks or by a governmentally privileged banking system.  Demonizing those who work to correct – and who subsequently further economic growth – the problems that come from artificial money creation is entirely unfounded.  These people should instead be looked upon as benefactors to all of society.  The true focus of demonization should be the institution that made the malinvestment possible.  As with so many societal ills, blame lies solely with the government.

While the story of James J. Hill provides us with many important lessons, it is unfortunate to note that his story did not have an entirely happy ending.  Hill’s success in the railroad business came as a result of his vigorous price cutting and through setting special rates for his biggest customers (along with an obsession for efficient construction and direct railroad routes).

Because all other railroad companies were on the receiving end of government subsidies, and because they were thus able to avoid the losses they would have suffered through competition in a free market, they provided poor service at high prices.  The public rightfully complained about this.  Of course, instead of recognizing their failures and getting out of the railroad subsidy business, the government chose to correct their poor policies by passing more laws and regulations.

The Interstate Commerce Act was passed in 1887.  The Hepburn Act was passed in 1906.  These laws forced all railroad companies to charge set rates for all customers, and effectively ended Hill’s price cutting endeavors.  He eventually began shrinking his business operations, switching his focus from expansion to preservation of what he had built.  An untold number of economic growth opportunities were lost forever.

Answers to economic hardships can always be found in the shrinking of government and in the freeing of markets.  Liquidation of malinvestment will be necessary as long as governments make possible artificial monetary inflation.  Once liquidation takes place, the only way to prevent malinvestment from taking hold again is a return to sound money.

James J. Hill worked to liquidate malinvestment.  That his efforts were eventually undermined is a tragedy.  His story should serve as a lesson in economics for us all.

The Secret to Success

The phone on my desk at work rang.  Looking at the caller ID, a rush of adrenaline hit when my company’s owner’s name appeared.  He really only ever spoke to me in passing, and had never called me directly like this.  Him and I did, however; have a lengthy conversation at our most recent annual Christmas Party during which we discussed free market economic principles, the negative incentives and effects of welfare programs, and governmental hindrances put upon businesses and upon commerce in general.  Afterwards, he remarked to me, “you and I, we’re on the same page.”  It was a proud moment.

When I answered, he asked me to come to his office saying that he had something he wanted my help with.  Sitting down in his office, he began to explain what he was looking for.  The company had recently acquired a new property, and he wanted me to create a spreadsheet that could easily capture costs and predict revenues.

As we were discussing the concept of real estate investment in general, we quickly got off topic.  He mentioned how the company had lost a property they had purchased in Jersey City to eminent domain.  Shaking my head in disgust, he continued, “They stole that property from me.”

“That’s the exact right way to describe what happened – they stole it from you,” I said.  He shrugged, looked a little irritated and said, “Well, they gave me a little money for it, but it was nowhere near what I would have been able to get for the property on the open market.”

I continued his thought saying, “And you would have never voluntarily chosen to sell it in the first place.”

“No, I wouldn’t have.  Certainly not for the amount of money they gave me,” he replied.

Continuing our conversation, something must have triggered a memory in him, because he delved into telling me a story about a time he had been asked for advice.

He was attending a relative’s wedding in Ireland.  While mingling at the reception a younger male relative approached him and asked if he could ask a question.  The two of them walked off to the side where it was less noisy so they could talk.  According to the re-telling of the story that my company’s owner regaled me with, he had no idea what to expect.

“What’s the secret to becoming successful?” the relative asked.  

“He was clearly hoping for some kind of trick, some magical strategy,” he said to me, laughing.  “So I said to him, ‘I’ll tell you exactly where success comes from’,” he continued, “first you wake up everyday at 5 or 6am, and you go to work.  And you work until 6 or 7pm.  And you do this 6 or 7 days a week for 10-15 years.  Then, once you’ve done that, and you’ve built up a little bit of money, and if you’ve been smart with your money – only then will you be able to take a bit of a step back and maybe start having your money work for you.”

Still laughing, he continued, “I’ll never forget the look on his face after I answered his question.  His eyes lowered, he got this dejected look on his face, and he just walked away shaking his head.”

“I guess I didn’t give him the answer he was looking for,” he said to me.  We both laughed and then continued on with the business purposes of our meeting.

As I was driving home later that day, reflecting on the meeting we had had, I couldn’t shake the thought of what good, profound advice this truly was.  Yes, becoming wealthy and successful is extremely difficult.  Yes, it takes a lot of hard work, long hours, persistence, perseverance, smarts, and discipline.

There is no trick or magical strategy to making oneself successful.  No state intervention into the economy can produce prosperity.  No “basic minimum income” or other mystical proposal can produce the advertised results that so many of their proponents push.

If you want success for yourself, or if you want to improve your standing in the world, you’re going to have to work for it.

$250 CASH Bonus to Drive for Uber

Uber is a great way to make some extra money in your spare time, and can even , now is the time to give it a shot.  Sign up before using my invite code, k78ypue, complete (50) trips, and I’ll send you $250!  After you sign up, send me an email at uberguy3000@gmail.com and I’ll send PayPal or another reasonable method of payment once the criteria are met.

Ever-increasing prices.  Unpredictable availability.  Inability to effectively match supply with demand.  Filthy cars.  Aggressive and unsafe drivers.  Anonymous and sometimes dangerous passengers.  We all know the problems with the traditional taxi system.

The problems can often be racial in nature, too.  If you’re a black man trying to flag down a yellow cab in NYC, chances are that none will stop for you.  Ask to be dropped off in a “sketchy” neighborhood, and you’ll likely be refused service and asked to get out of the car.

Uber (and ride-sharing in general) solves all of these problems.

The best way to demonstrate the obvious superiority of ride-sharing services over traditional taxis is through simple comparison:

  • Uber has announced several rate decreases while traditional taxis have consistently raised prices.
  • Uber’s surge feature brilliantly and effectively matches supply to demand.  The traditional system has no such feature.
  • Because Uber’s payment system is entirely digital, there is no cash involved.  Thus, potential for crime and fear of robbery is greatly diminished.

Clearly, ride-sharing services have made the taxi system more effective and more efficient for passengers.  As an Uber driver, I’ve heard from many of my riders how much they prefer Uber’s service and that they’d never go back to traditional taxis.  Their reasons are numerous, including vehicle cleanliness, driver courtesy, and the provision of “extra” amenities.

But Uber isn’t only great for riders.  It is great for drivers as well:

  • Most importantly, compensation ranges from decent to exceptional.  As a driver in the very busy region of Northern New Jersey, surge is frequent.  Driving during the busiest times (weekday rush hours & weekend nights) will push compensation toward the exceptional end of that spectrum.    If I drive for 2-3 hours after work 3-4 days a week and the occasional weekend shift, I can average $15 – $25 per hour.
  • Uber’s “App” makes the whole process of being a driver markedly simple.  It is constantly improving and offering new features.  When I first started driving, trips came one at a time.  Then, the next trip could be accepted while still driving the first trip.  Now, carpooling has been added.  Each of these improvements has cut down on “down time” between trips when you’re not getting paid.
  • The “App” also allows you to see where surge is taking place, so that drivers can focus in on the most lucrative driving opportunities.
  • Uber sends regular text notifications and emails to help maximize money earned.  These include data showing the busiest hours of the week when drivers can expect the possibility of surge earnings, and your personal driving statistics in comparison to other drivers.
  • Additional benefits include discounts on cell phone plans, gas, vehicle maintenance, and much more.  The more you drive, the more you get.

If you’ve ever thought about becoming an Uber driver, now is the time to give it a shot.  Sign up before using my invite code, k78ypue, complete (50) trips, and I’ll send you $200!  After you sign up, send me an email at uberguy3000@gmail.com and I’ll send PayPal or another reasonable method of payment once the criteria are met.

Apple vs. The FBI

Recently, Syracuse’s Post-Standard published this article railing against Apple for their opposition to an order from the US government to build a “backdoor” into the iPhone. The article lists 5 reasons why Apple’s concerns are misplaced “in this case.”

The Post-Standard is wrong. Apple is doing right by the American people, their customers, and their own company. Technological expertise is not this author’s forte, but this article from Slate does a great job of diving into the associated technical weeds. This article will instead focus on the economics and civil rights that comprise this issue.

The Post-Standard’s article ignores entirely the fact that Apple has already been complying with all of the government’s requests which they are able. It also ignores very real constitutional issues. For years, Congress has been pressured to revise the Communications Assistance for Law Enforcement Act to deal with the increased use of encryption in internet-based devices. Thus far Congress has refused to do so. It would be wrong for the FBI to use the courts to go around Congress. Congress is the constitutional body charged with writing law, the courts are charged with interpreting law. This is the way the founders designed the federal government, and this is the way it should remain.

Further, with the rise of cyber-security issues such as those listed here, consumers are demanding greater protection from those who would want to steal valuable information. Apple’s latest operating system (iOS 8) has taken a significant step forward in meeting this demand. To create a “backdoor” into this system, Apple would effectively be creating security vulnerabilities that do not currently exist. Their customers would again demand that these vulnerabilities be remedied, and Apple would be compelled to oblige or risk losing customers. A main attraction of Apple products is continual increase in quality along with continual decrease in cost. If the government were to force Apple to create a backdoor, the need to remedy the subsequent vulnerabilities would undoubtedly add cost to their production process. This cost would necessarily be passed along to the customer. Apple doesn’t want this, and their customers certainly don’t want this.

Another problem that the Post-Standard overlooks is the setting of a very bad precedent. If Apple were to be compelled to unlock this particular phone, where do the requests end? Recently, the Manhattan DA stated that his office had collected (74) iPhones over a 6-month period that it had been unable to unlock. Extrapolate those numbers across the entire US, and Apple would have to open a whole new division just to keep up with the prosecutorial demands. Again, this would vastly increase Apple’s internal costs which would have to be passed along to their customers.

Benjamin Franklin is quoted as saying, “those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.” Mr. Franklin certainly was a wise man. Fear should not compel people to give up Liberty so quickly, for as has been seen throughout history, once Liberties are given up, they are immensely difficult to get back. Complete security is an illusion. We will never be 100% safe. If people desire complete security, they should allow the government to lock them in a concrete and steel-barred cell where no one could ever get to them. Of course, no one wants this because they would be giving up precious freedom.

The best way to reduce the threat of terrorism is not through giving government all-seeing, all-knowing powers. It is for the US government and the US military to cease its constant militaristic interventions overseas. These interventions create more terrorists than they kill and inspire blowback like we saw at San Bernardino. While that attack was tragic and sorrowful, the only way to truly honor the victims would be to attempt to understand what led to it in the first place. It would be wrong to double down on hate and fear-inspired militarism that results in scores of completely innocent people being killed at the hands of the US government. It would be right to imagine the shoe on the other foot, and to live by the Golden Rule.

Public to Private: How City Water Could Work in the Private Sector

Public to Private will be a recurring series in which we will use imagination and brainstorm to come up with theoretical private sector alternatives to existing public sector services. Below is Article #1 in which we will apply this method to the supply of water:

Larry the socialist, a recurring character in my writing (see here, here, here, and here), cannot conceive of how the free market could possibly supply water. He believes that such a service is a “natural monopoly” that can only be provided through the oversight of a central authority. This in spite of the Flint water crisis, and evidence that “every major city east of the Mississippi” is deceiving their residents about the level of contamination in their water. When confronted with the idea of privatizing water supply and taking it out of the hands of governments, he had this to say,

“…we can also not convince every household to set up 15 pipes if there are 15 water providers.”

Larry is certainly not alone in his beliefs. This lack of imagination permeates mainstream thought, and is a common rebuttal of those who would seek to have private businesses compete to provide these necessary services.

The truth is just as is seen in the technology sector and in the sectors of healthcare which are largely unregulated (i.e. LASIK eye & cosmetic surgeries), the free market always does a better job of providing high quality, low cost goods and services than central planners ever could. This includes the supply of water.

New York City, with its nearly 8.5 million residents, would be a great place to test this hypothesis:

Imagine that those who hold political power in NYC had a revelation, admitted that they are corrupt, do a generally terrible job, and are incapable of managing not only the city’s finances, but also its vital services. That they too, like Flint, have been deceiving residents of the city about the quality of their water supply. They announce that they will be systematically transitioning sovereignty away from government towards the individual. They announce that they will immediately be cutting taxes, spending, and auctioning off government property and services. All revenue from these sales will go towards paying down the city’s debt and buying out former government employees’ pensions.

Coca-Cola, Nestle, and Pepsico engage in a bidding war to take over the city’s existing water supply, with Coca-Cola ultimately winning with a $1.85 billion offer. Initially, they are (like the government before them) a monopoly, and are able to charge high rates to supply water.

Nestle, seeing the opportunity for profits, and knowing that NYC’s vast underground sewer and subway systems would make laying new piping relatively easy, decides to invest $1.5 billion towards a competing system. They sign a lease with a nearby water supply, rent space in the sewer and subway systems to run supply piping, and build a brand new state-of-the-art water treatment facility. Less than a year after the government sold the existing system to Coca-Cola, Nestle enters into the market and provides competition.

To gain market share, Nestle sets their prices 15% lower than Coca-Cola’s, offers to cover the cost of connecting the buildings of new customers into their supply lines, and guarantees water quality. Their guarantee includes a promise to cover the health care costs of anyone who gets sick from consumption of their water. Nestle hires Marc Edwards and his Virginia Tech environmental engineering team to verify the quality of their water. Nestle also publishes a list of more than 100 other private laboratories that customers can use to independently verify the cleanliness of the water they provide.

Customers start switching from Coca-Cola to Nestle in droves. Soon, Coca-Cola’s monopolistic profits are disappearing, and the company comes to the brink of losing money on their operation. In order to win back Nestle converts, Coca-Cola offers a similar quality guarantee, undercuts Nestle’s prices by 10%, and hires the same Virginia Tech team (which has by now become the Underwriters Laboratories of private water supply).

Pepsico, having chosen to forgo the large initial investment of installing new water supply infrastructure, instead markets home delivery of drinking/cooking water in 5-gallon containers. Their prices are significantly less than Coca-Cola’s and Nestle’s, but since they are unable to supply toilet, shower, and bath water their market share doesn’t become large enough to truly threaten Nestle and Coca-Cola. Still, their low prices convert a number of individuals over to using Pepsico for drinking and cooking water. Pepsico, with its small market share, is still able to earn significant profits.

Over the next few years, Coca-Cola and Nestle enter into a fierce competition to steal customers away from each other in their desire to increase profits. They decrease internal business inefficiencies, improve the quality of customer service, and lower prices all in the name of winning customers and increasing profits. Pepsico is greedy, though; and dreams of winning a larger share of NYC’s massive market.  While Nestle and Coca-Cola compete amongst themselves, Pepsico hires a team of the finest engineers that MIT, Tsinghua University, UC Berkely, RPI, and other top universities have to offer. They vigorously pursue an efficient and cost-effective method of water desalination.

After much hard work and investment, Pepsico’s engineers achieve a breakthrough in desalination technology. Using the capital they had saved from forgoing water supply piping infrastructure along with profits from their water delivery service, Pepsico purchases land on Long Island’s north shore and constructs a first-of-its-kind desalination facility on the banks of the Atlantic Ocean. With an unlimited supply of water to provide, Pepsico couples their desalination plant construction with the installation of supply-line infrastructure in a portion of the Queens Borough. Now competing directly with Nestle and Coca-Cola, Pepsico slashes the price of water supply to never before seen levels, and quickly steals customers away from their competitors. As their profits increase, they expand their supply line infrastructure into the rest of NYC. Before long, Pepsico has gained a market share of nearly 90%.

In order for Nestle and Coca-Cola to compete, they hire their own desalination engineers, poach existing engineers from Pepsico, and copy Pepsico’s business model of providing desalinated ocean water at ever decreasing costs.

Less than five years is what it took for NYC’s water supply system to be completely transformed, and less than ten for life-changing technological breakthroughs to take place. Residents of the city are now drinking water directly out of the tap without having to first run it through filtration devices. They have the highest possible quality water, and are able to purchase it at ever decreasing costs. They have the peace of mind of knowing that if one company stops living up to their expectations, they are free to take their business elsewhere.

People all over the country, seeing the transformation of NYC’s water supply system demand that their own local governments do the same. The problems that came to light through the Flint Water Crisis become a distant memory.