Preparedness is Prudence.

August 28th, 2014

 

 

Dear Friends,

 

It seems to me, with the steady news of natural disasters and potential super disasters, along with the ever present threat of terrorism, preparedness is mere prudence. No one knows when or what kind of catastrophe will occur, but the one thing we do know, it that there will be some calamity in the future. The hit or miss nature of natural and man made disasters gives us a false sense of security, but when the reality intrudes into our lives, many times all is lost because, we didn’t take the few minutes to get together a bugout bag, we didn’t have a disaster plan or there’s only a day or two’s worth of food in our cupboards. Think about it, what would you do if power was out for a week because a substation blew up? How would your family eat if the city you live in was cut off? Where would you go if your house was destroyed in a disaster? All these questions can be answered by the person who is prepared, but the person who is not, will panic and maybe die.

 

What is called a bugout bag should be stuffed in a closet somewhere. All it needs to be is some sort of bag or backpack, that has the things you might need if your house was destroyed or you are forced out, for whatever reason. It should have a knife, water bottle, lighter or matches in a waterproof container, a tarp, some food that keeps for a long time, a ball of twine, hand saw, salt, aspirin, First aid kit, extra set of clothes, a book about how to get by in the woods, (topical to the environment you live), along with whatever else you might want to have in it, like a bedroll. This gives you the flexibility to go where it is best for you, like a family or friends house, and avoid the places FEMA tell you to congregate like the Superdome in New Orleans. Such flexibility might mean the difference between life and death of a loved one.

 

A safe room somewhere in your home is critical. Someplace where you can retreat to if there is a natural disaster coming through. A corner of a cellar with two means of escape is ideal in a tornado or hurricane, but in a flood… It is always best to have decided on where to retreat before you need to, to save valuable moments when they count. Everyone should have three months worth of food. Food is so important and today there are so many possibilities that will keep, like canned food, survival food with a twenty five year lifespan, and dried foods as well. We must remember to utilize First In First Out, or FIFO, unless we have survival food as our emergency backup.

 

Speaking of a safe room a safe can also be a lifesaver. Some silver or gold coins can be a preserver r wealth if there is another banking collapse or other credit/money disaster. You shouldn’t get carried away and put all your money into silver bullion, that would be insane, but it is definitely prudent to have some on hand just in case they are needed. In my opinion silver is better than gold. If there were to be some money disaster were people couldn’t purchase food and other needs, anyone who shows up with gold coins is going to draw a ton of unwanted attention. Silver bullion will still draw attention but nothing like gold.

 

The need for a plan for the family in case you get separated is paramount. Where will you meet if there is a disaster? What if the house is destroyed in that disaster? What if the school your children go to is put on lock down, and one of your children escapes, where have you told them to go? Show your family you love them and get them all together, have some snacks available along with some drinks, whiskey might not be appropriate for a toddler, so use discretion… and make a game of it. Have the family brainstorm catastrophes and then plan for them. The time you spend doing this will make the survival of your children in a calamity exponentially better.

 

It is the duty of every US citizen to have, and know how to shoot, a firearm. It is in our founding documents. That doesn’t mean everyone must have an arsenal, but it does mean that even in these modern times, we should all have a working knowledge of firearms. The national reason for every adult to be proficient in the use of firearms, was and is, so that a smaller standing army can be effective, the population being proficient with guns can be called on in an emergency. On an individual level however, even a .22 caliber long gun and sufficient supply of ammo can effectively feed you and your family, if the need arises.

 

Plan for the worst and expect the best and you will never be off balance. If the worst happens we needn’t panic, we have a plan and the stuff we have prepared for it, and if the best happens… hey, we expected it all along. We all hate to think of bad things, and whats more, we have very little time to. Our lives are so busy we barely have time to eat with our family let alone set aside a few nights to come up with a survival plan. Omitting taking the time for this is like claiming you are too busy to brush your teeth, then freaking out when you get cavities, it is a pathetic excuse. This is by no means a perfect list, if everything I suggest is done it still does not guarantee the survival of every member of your family in an emergency, but even doing one or two things on this list, makes it much much more likely you and your loved ones live, where others don’t. Let’s face it, would you rather be the guy that begs, or the guy people beg from?

 

Sincerely,

 

John Pepin

 

 

 

A Positive Attitude and Good Outcomes

August 25th, 2014

 

Dear Friends,

 

It seems to me, an optimistic outlook is as vital to an optimistic outcome, as a negative outlook, is vital to a negative outcome. We unconsciously decide what we want of all things, even life itself, and we set ourselves to get it, be it a good outcome or a negative one. Sometimes it’s because we consider ourselves unworthy of this or that good, perhaps we have fallen below our misery quotient or simply that we hate ourselves so badly we can’t stand to see something go right, that we undermine our success. Thinking in negative terms, in negative ways, expecting negative things… will beget those negative things. While it can also be said to be true that thinking optimistically, acting optimistically and behaving optimistically will bring the best outcome to you, like a magnet does iron filings. This is such an important lesson to learn but is unknown to so many. If we want better outcomes, we need to think, act and expect better.

 

Of course that is not to say that all Pollianish notions will come true. There must be planning, preparation and follow through, to make an optimistic outlook something other than mere baseless hope. An optimistic attitude makes the preparation, planning and follow through much more likely. If we launch into a project with a positive attitude, we will spend more time planning, if we expect great things we will prepare more carefully and if we are optimistic while we are working on it, we will expend more effort in the process. All of which makes the best outcome more likely.

 

A negative attitude will undermine one’s efforts more effectively than groundwater hollowing a sinkhole in Florida. If we expect failure, our plans will be lackadaisical, if we don’t have hope our preparation will be half hearted and if we dwell on a negative possible outcome our work will be sloppy due to inattentiveness. A negative attitude will attract a negative outcome every time, unless dumb luck intervenes. With a positive attitude we will take more enjoyment in the process which makes the outcome naturally better, while focusing only on the outcome corrodes our enjoyment of the process, making a good outcome less likely.

 

A positive attitude is magnetic for people as well. We all want to be around positive people, it is in our nature, just as we avoid negative people. We seek out people who are fun to be around, those who are full of good news and people who make us feel good. A positive attitude cannot but do these things. If we have a positive attitude we can be complimentary without being deceitful, it is natural to be friendly without over familiarity and we tell stories of our successes and good things while avoiding the negative and bad, without being pretentious. Most people want to be around others who have a positive attitude.

 

A negative attitude is repulsive. Think about it, we all know the gloomy Gus who always has a sob story. They are draining. Ask them how they are and a river of pains, burdens and crosses emerge from their mouths. There could be a ton of good things happening in their lives but they only tell us about the negative. They hold you up for hours, (or at least it seems so), regaling you with their troubles. They have the Job complex. The sad thing is, they are avoided because of their constant complaining, while what they really need is the company, advice and shoulders of others.

 

The trick is to have a positive attitude. A positive attitude is as easy, and as hard, as to will it. Willing a positive attitude is not like willing a paper clip to bend or to force someone your mental slave, it is to make an intentional change in the way we think… then do it. We have to monitor our thoughts for a while until we become accustomed to thinking optimistically. We shouldn’t be vexed when we occasionally do think negatively, instead we should simply stay calm, let the negative thought pass and redirect our thoughts in a positive direction. Changing the way we think can be a very difficult thing to do. Our thoughts gouge deep channels in our minds, but the mind is ductile, those channels can be changed no matter how deep. When a rational maximizer finds a way to improve his or her life, at little or no cost, they take it… it is the best way to rationally maximize one’s outcome.

 

 

Sincerely,

 

John Pepin

 

3D Printing and Creative Destruction

August 21st, 2014

 

Dear Friends,

 

It seems to me, 3D printing is an innovation that has the potential to start a new round of creative destruction. The potential of this technology to make whole sectors of the economy outmoded gives us an idea of the economic impact for the good, then for the bad, this technology will bring us and our children. Whole sectors like, manufacturing, home building, and even retail sales will be changed fundamentally by this technological revolution. Our standard of living can be elevated dramatically or lowered drastically by this technology, depending if government decides to distribute the economic good that will come of it. This will deeply effect how our children live.

 

3D printing is based on ink jet printing, it merely takes the ink jet’s 2 dimensional characters and adds a third dimension to them thus, 3D printing. With it all kinds of amazing things have been made. Things that could not be made any other way. 3D printing allows anyone who has a 3D printer, and they are getting cheaper by the month, the ability to manufacture, in their own home, most of the day to day items one would need. Spatulas, containers, book covers are a tiny speck among the possibilities. Just download the details of the ideal spatula and print.

 

3D printing has other uses as well. If a machine were to be built that could build a house using 3D printing technology, and one be will very soon, the entire home building industry would be flipped on it’s ear. Such a machine is easy to envision. It would use local sand, a polymeric adhesive and diesel or gas to run the thing, so it could be set up away from utilities. The 3D Home Printer would crush the sand into silt or perhaps clay, dry it and mix the dried clay dust with the adhesive and spray layer upon layer until the house was complete. Any detail that can be thought of could be included at little extra cost. A Queen Anne Victorian with all the spindles and detail could be replicated in exactitude… for pennies. Homeless problem?

 

Even operational machines can be made with this technology. So far relatively simple machines have been made like adjustable wrenches but much more intricate machinery can be made with this technology. Machines so intricate they there is no other way to make them. This opens up the possibility that a car could be made of modular pieces. If any breaks you could simply print the replacement and bolt it on. Moreover this same ability of 3D technology allows anyone to be an inventor! All one need do is imagine a thing, code it with a computer aided drafting system and print it. Voila! Imagine the things that would be invented if every member of the entire human race was given the ability to invent them?!

 

Of course with the creative part there is always the destruction. Today we stand at the starting line of the race to monetize 3D technology and so, if the governments of the world let up on the regulatory brakes, we are looking at a potentially high rate of economic growth along with the jobs, higher wages, more benefits and a rising standard of living such a paradigm carries along with it, all fueled by the implementation of 3D printing Technology. But in 10 to 50 years when this technology matures, (as long as government doesn’t abort 3D technology before it is born), there will be the wholesale destruction of entire industries ushering in an epic recession. One that can be turned around quickly by laissez faire policies or could be turned into a depression with socialist ones. Time will tell.

 

As the future comes at us with faster and faster innovations we should keep our knees bent so we are not knocked over by events. We are rapidly approaching several innovations that could change who and what we consider ourselves to be very soon. 3D printing technology is only one. The rapid advance of robot technology means we now face the possibility that the unit labor cost could fall to zero, with all that entails, and Moore’s Law showing itself to be true the leaps computer technology is taking brings the Singularity closer and closer. The interface of man and machine, coupled with 3D printing could allow us the ability to merely think of a thing and it will be made for us on our printers, or… if it harnesses us instead of we harnessing it, we could be in a world of hurt.

 

 

Sincerely,

 

John Pepin

 

Capitalist Security System and a Zero Unit Cost of Labor

August 18th, 2014

 

Dear Friends,

 

It seems to me, another thing most countries could do to improve their economy, would be to establish a Capitalist Security System (CSS). Such a system would be completely different than the typical social(ist) security system (SSS) we have now. Some of the ways they differ are, CSS would invest and add to the stock of capital available for growth; while SSS steals from the capital stock, CSS would add to generational wealth; while SSS steals from generational wealth, CSS gives every man woman and child a stake in society; while SSS gives people a stake in more powerful government, to take the taxes needed, etc… If a country redirected the funds now going into all the SSS in that country were instead turned to a CSS, that nation’s economy would reap huge rewards, incentive wise, in productivity and capital available for new companies. Everyone would benefit with each successive generation reaping ever larger rewards while contributing to the economic success of their countries.

 

We all know how SSS works but I’ll explain it for those who might not be sure.The Social(ist) Security System is a system, where the government takes money from those young enough to work and the businesses that hire them, then gives some of that money to those who have reached an age deemed too old to work. The money goes through various bureaus of government and some of the money stops there to fund those bureaus. Some of the money gets caught in the sieve of corruption and conniving that surrounds every government bureaucracy and stops there funding corruption. The rest gets to those on government pension. The system is expensive because so many hands are in it, it fuels corruption with government money, it is unsustainable, it takes capital from producers and redistributes it to non producers… among many other problems.

 

A CSS would operate very differently. A Capitalist Security System would not invest in government’s power, as does typical social security, Capitalist Social Security would instead invest in the power of the market through dividend paying stocks. Initial funding would be through legally required investment of a portion of one’s income, or perhaps a .5% tax on consumption, (Sales tax). It would be run by an algorithm that buys dividend paying stocks the world over based on several criteria, one of which would be longevity of the business model and of dividend history. The fund would grow by reinvesting the dividends and selling stocks that under perform via dividends. Once the first generation reached the requisite age, then it would pay out 50% of the dividends to the retirees and reinvest the other half. A person’s portion of the income stream from the fund would transfer to their heirs upon their death as the pensioner see fit. The heir could then start receiving payment immediately or allow their portion to grow and get larger payments later, say when they retire.

 

It would probably be administered by a bureaucracy in government, but it doesn’t need to, it could be administered by some financial firm, the operation of the CSS fund being awarded by competitive bid based on the firm’s fees. There would have to be special tax exemptions for the fund. One tax exemption would be to stop the double taxation of dividend income. Either tax the company or the investor, not both. In the case of CSS the company would pay the income tax, (if there is one) and the fund would face no tax penalty. The investor should not be taxed on the income he or she gets out of the fund, since the corporation already did, and the fund itself is just an agent of the investor. In the case of the CSS fund the investors would be everyone.

 

The economic advantages should be clear for anyone to see. One would be the strong incentive for companies to reinvest in plant equipment and training. Else they run the risk of being sold by the CSS fund which would be the kiss of death to a company’s stock price. The huge fluctuations in the stock market would be diminished due to the fact the CSS fund wouldn’t sell it’s stocks in a panic, the incentive for companies under such a system would be to pay dividends as well as grow the company. Another advantage would be that pay for corporation bigwigs would face downward pressure, because if too much is sucked off today the power of shareholders to demand more of the company’s profits given to them as dividends is far too diluted by various factors, but if a giant fund such as the CSS showed displeasure at the high pay of a CEO the firm would toe the line. Perhaps most importantly, in the real world, SSS must eventually fail, because government will eventually run out of other people’s money to take, but a CSS would be self sustaining and grow organically. The list of economic advantages is endless for a Capitalist Social Security System.

 

With human like robots coming on the scene sooner than people realize, (20-40 years) this will be a phenomenon that will eventually drive the unit cost of labor to zero. A zero cost of labor will usher in a completely new paradigm for humanity. Maybe for the better and maybe for the worse but it will be different than anything that has come before. For a leader in government to see this and envision a means to stave off the possible starving masses, that such a situation could give rise to, shows vision. A Capitalist Social Security System could be just such a means to keep future generations, who will have lost the ability to sell their labor in the open market for wages, a means of sustenance. A means of sustenance that will grow with each generation. Like I said, “ another thing most countries could do to improve their economy, would be to establish a Capitalist Security System.”

 

 

Sincerely,

 

John Pepin

 

Taxing Production Or Consumption?

August 14th, 2014

 

Dear Friends,

 

It seems to me, if a leviathan government must be built and paid for, it is better to tax consumption than production. Examples of taxing production are, income tax, taxing interest on investments, corporate taxes, inventory taxes etc… Taxing consumption is when government imposes sales taxes and value added taxes. The question of whether or not we build up a leviathan, since we already have, is moot and so, until we tear the edifice to human hubris is torn down, the question of how we pay for the thing becomes paramount. Taxation, being a counter force to whatever it taxes, if we choose the wrong method of taxation and stifle our economies in pernicious ways we lower potential economic output more than is necessary. So this question, whether to tax production, consumption or both, has implications for every one of our standards of living.

 

It is a well know phenomenon that taxes drive up the cost of that which is taxed. As the cost of a thing goes up the demand for it goes down via the supply demand curve. The utility of spending that additional dollar for what you get diminishes… eventually to zero. As demand for a thing goes down the production of that thing will follow. As production drops units of productive capacity are taken out of production from building that thing, and are put back into the system, (people are laid off, machines are idled and plants are closed). Now we can frame our question this way, should we lower productive capacity, or demand, by taxes necessary to maintain the gigantic government we have, while limiting the damage to our economy such necessary taxation will do.

 

Many economists in the Keynesian camp will immediately argue demand must not be stifled by taxation and so production must be taxed. Their mantra is; demand drives supply. They follow the aggregate demand aggregate supply model of economic growth. The aggregate demand aggregate supply model has the advantage of being simple but it has the disadvantage of being wrong. Japan has focused like a laser beam on their economy for over a decade using the aggregate demand aggregate supply model. You know… their “Lost decade.” FDR went whole hog Keynesianism and ushered in the Great Depression with it. There is no example in human history where aggregate demand aggregate supply actually predicted or accurately modeled an economic event, but the faithful are hopeful. So taxing demand might not be such a bad thing as the demand side economists would have you believe.

 

Most who call themselves supply side economists, and so would be against taxing and thus lowering production, don’t have a clue about the basis of supply side economics. To say “supply side” is to focus on too narrow a policy. Supply side economics seeks a dynamic economy while demand siders only seek to increase demand, the source of which, (to them) is irrelevant. As a result, a demand sider is perfectly happy with a stagnant economy where, the older a firm is the safer it is, as long as it reliably grows it’s demand. Those of us who are supply siders seek to make conditions favorable for entrepreneurs to start businesses, grow those businesses and disrupt older technologies. We recognize that it is in the very disruption itself, of new ideas being implemented making old ideas outmoded, that is the fire in the chamber that drives an organic free market system. An organic free market creates new luxuries, makes old luxuries necessities and lowers the cost of our needs, and it does it by implementing new ideas.

 

Taxing production lowers production and so puts people out of their jobs, lowers wages due to the lower demand for labor but most importantly… creates a barrier to entry for entrepreneurs. Taxing consumption on the other hand drives down demand for those goods and services that are taxed, while creating a demand for behind the counter merchandise. Clearly, if we tax both production and consumption, we get the negative outcome of both, so in a sane world the doing both option should be out. If the very thing that powers the market system however, is the introduction and implementation of new ideas, then it follows that the implementation and introduction of new ideas should be fostered at all costs, and not undermined by any means. While taxing production makes it harder for an entrepreneur to start a business, taxing consumption makes capital more available, (since the interest on it wouldn’t be taxed), which would lower the barrier to entry for the would be entrepreneur.

 

The track record of the demand siders should speak for itself as should the track record of the supply siders. Every time demand side economics is blindly followed the economy gets the moniker “Great,” like, Great depression, Great recession etc… When supply side economics have been followed the economy has always flourished. The supply side policies of Calvin Coolidge, who came into the Presidency during a bigger economic downturn than Obama did, ushered in the period of the fastest economic growth in US history. Ronald Reagan, who inherited Jimmy Carter’s economic, foreign policy and Cold War messes, made it easier to do business in the US and the US economy rebounded. So, given their historical track records, taxing consumption and only consumption, would be the smartest move and would have the least negative effect on our economy. Because… If you seek green, blending yellow and blue works better than red and white, no matter how much you might want red and white to make green.

 

 

Sincerely,

 

John Pepin

 

One Step To Improve the Economy

August 11th, 2014

 

Dear Friends,

 

It seems to me, one simple thing all governments could do to improve their economies, would be to create a panel, that would go over the regulations and laws then make an annual list of regulations and or laws that are outdated, redundant, harmful, pernicious etc… The legislative branch would then see to it that these regulations and or laws would be removed from the books. In this way any country could at least grab the low hanging fruit of economic improvement. There is not a country on Earth that would not benefit economically from this approach.

 

Regulations are the nemesis of economic expansion. While a standard facilitates market transactions, regulations are designed to give an economically favored group a leg up, in an other wise free market transaction. Since they give an economically favored group special treatment, they both skew the market, warping it and creating bubbles, and they create pernicious incentives. Pernicious incentives like, it being more economically beneficial to seek political favor than, to provide a good product at a low cost. Regulations undermine economic expansion in other ways as well.

 

Typically the favored economic group are older more established firms. Regulations raise the cost of entrance and extend the time line where a business operates in the red before it starts making money. This allows older more established firms to make higher profits and pay for political favor. Even a seemingly innocuous regulation like requiring a furniture store to have a changing table in their bathrooms, benefits older firms, they have the monetary cushion to absorb the cost, but new firms might be running in the red to hopefully get to profitability, so the extra cost might be the tipping point.

 

Now… many will say, oh well, so sad… but may I put this to you? As I have explained before in prior articles, small entrepreneurial businesses are the engines of growth in a market based economy, so when government regulations hinder the formation and operation of entrepreneurial companies, that regulation or law directly lowers the standard of living for that generation… and that lowering is magnified over later generations due to the effect of compounded growth!

 

Take the negative effects I have outlined and multiply them by the thousands of regulations on the books of every country on Earth, if they were combed of nits, a huge source of friction to the economic machine that is the market system would be removed. Such a panel, given sufficient funds and prestige, who’s ideas were followed through on… actually erasing the regulations and laws the panel suggested, would reward such wise governance with economic success. There would be push back, from those elite who’s sacred cows go on the chopping block, but I’ve heard somewhere, sacred cows make the best hamburger.

 

 

Sincerely,

 

John Pepin

 

The New Class and Our Civilization’s Suicide

August 6th, 2014

 

 

Dear Friends,

 

It seems to me, the West is committing civilization suicide. Not any different than a man who throws himself off the top of a high building, shoots himself or immolate herself. Not everyone agrees we should do this, but those in the new class, the political elite, believe we will be able to fly once we are airborne, so are determined to jump… while the rest of us are doing our best to hold them back. The same debate goes through the mind of someone who is on the ledge. The signs of our impending suicide are all around us. Pick up and read any newspaper and the intention of the ruling class becomes obvious. From the US’ open borders to our lawless government, the writing is there for us all to see, if we would only look. Some, mostly members of the new class and the peasantry, (traditional allies in any communist take over), are fully on board with our destruction, while others, the middle class, working class and some in the new class, are trying as hard as we can to save us all. The trouble is, those who seek the destruction of our culture, society and economic system, are the ones who wield political power, run the media and direct our culture, while those of us who want to preserve those things may be the majority, but our political power is so diffuse it is rendered irrelevant.

 

Why would the new class and modern peasantry want to destroy the greatest wealth creation machine the world has ever known? To answer that we need to plumb the subconscious of the new class. The new class is trained and indoctrinated in our universities and colleges. The higher a professor gets in academia the more they are full blown Marxists and anarchists. That is not my contention, it is the premise of Alvin Gouldner’s book, The Future of Intellectuals and the Rise of the New Class. As a result of their political bent, they detest the west and everything the west stands for, the market system, limited government, wealth, Christianity and people of European descent, (even though most of them are wealthy, claim to be liberal and are of European descent). In short… hate and jealousy are their primary motivating emotions. So when students show up to get an education, they are instead indoctrinated by a curriculum of anti American propaganda, Marxist indoctrination and a ludicrous world view, where everything white people have done is evil and everything anyone else has done is good. If there is any one characteristic of the progressive new class’ mindset, it is their blind hatred of the west.

 

Since the new class primary motivation is righteous hatred of the west and therefore themselves, they feel justified in their intentions to rid the world of such bad things as limited government, the free market and the wealth capitalism bestows on humanity. They justify their actions like any other criminal would, by holding that other people are less than human, while they themselves stand above the hoi polloi and are “enlightened.” They reason that if only they could get rid of the evils in the world, as they see them, there would be universal peace, prosperity would sweep the world, the lion would lay with the lamb and justice would finally be born. Of course, to usher in this new era of utopia requires as a prerequisite, the total destruction of the west and all it stands for.

 

The only way to stop this madness is to take back our schools, colleges and universities, from Marxists, anarchists and all those who detest the west. Begin teaching our children and young adults the truth, that yes, the west has done bad things but there is not a people, civilization or society that has not. That what makes western culture, society and economy so noteworthy, is the good it has bestowed on the human race… prosperity to anyone willing to work and take chances, class mobility, liberty of the individual brought about by limited government, an increase in the standard of living of the average person the world has never seen before, the near eradication of ancient plagues like small pox, polio and measles, and that the United States is the only nation in the history of humanity, that has been attacked by another country, successfully defended itself conquering the attacker, and instead of annexing it, gave the people of the attacking country their liberty.

 

Like a person who so detests themselves they seek to take their own life, the new class clearly seeks civilization suicide. To that end they pervert our culture, ignore the rule of law (unless it furthers their agenda), undermine the US Constitution in every way, destroy the market system with crony capitalism, taxes and regulation, punish work and reward indigence, use the power of the government purse to break up the traditional family unit (rendering fathers irrelevant), promote anything that lowers human beings to mere beasts, wage a global war on Christianity, side with those who openly call for the genocide of the Jews, thin out the populations of whole European countries with people who also loathe the west… and change our history and traditions to suit their wants. The Georgia Guide stones show their plan more clearly than I ever could in such a short article. In their hate filled minds, they have no concept that if they succeed, humanity will enter another thousand year dark age with all that implies, but when a mind is blinded with loathing and hatred, it becomes immune to logic and reason. Like the fool who so detests himself, they douse themselves with gasoline and set themselves ablaze, immediately regretting what seemed like a good idea at the time, but once that match is lit… it is too late.

 

 

Sincerely,

 

John Pepin

 

 

 

The Destruction of Our Standard of Living.

August 4th, 2014

 

Dear Friends,

 

It seems to me, government policies are destroying the middle class in America, and unless the political elite are drooling idiots, the destruction is intentional. From the prices we pay for our needs, to the wage suppression government policies encourage, we are under assault from every direction. While our government scoffs at our Constitution and ignores their own laws we are held to every word of arcane regulation. The veil of secrecy around government and it’s actions grows while every facet of our lives is being recorded for prosecution at a later date. Our taxes are increasing at an alarming rate and the money is sent to Hamas to kill our only real allies in the region. The New Class political elite have been on a crusade to lower the standard of living of the American worker for years, and now the results are showing up for all of us to see, but many refuse to look and blindly follow the elite like lemmings. If we are to turn this around, giving our kids hope for a better life instead of a perpetually lowering standard of living, we must force the political elite to follow their own laws and our Constitution, returning the US to Constitutional rule upon which it was founded, else America will inevitably become a third world hell hole.

 

The business and economic elite claim there is no inflation. As the price we pay for food, housing, heat, electricity, gasoline, clothes and cars gets ever higher, the smartest people in the room claim that because I pads are cheaper, the substitution effect, and wages are stagnant, there is no inflation. The absurdity of their opinion is lost on them. I don’t buy and I pad a day but I have to eat every day, moreover, I can’t substitute an I pad for a loaf of bread. No matter how low the price of a computer gets I will only buy one when the one I am using breaks, but I have to get around, and so I have to pay for gasoline. The reality is, inflation can be driven by wages or regulation but the definition of inflation is an increase in costs, not in wages.

 

Speaking of wages, have your wages kept pace with the price of hamburger? Why do you suppose that is? Because government policies are destroying jobs while the government has opened the flood gates to illegal immigrants. As the number of jobs declines and the number of people looking for those jobs increases, while at the same time the cost of labor increases from regulation, there will be increasing pressure driving down wages, it is basic supply and demand. Raising minimum wage only fuels price inflation and in fact lowers everyone’s real wages, thus lowering the standard of living for everyone, without the benefit of a single person being helped. At least the elite can claim they have done something, something that has hurt instead of helped, do you suppose they are so stupid they don’t know that?

 

Our government is building a huge data storage facility in Utah to keep their illegal and unconstitutional recordings of our personal phone conversations, emails, and any other digital communications the government sweeps up in the NSA spying operation. Meanwhile, the actions of our government get darker and more hidden. As we drive down the street we are videoed, our license plates are recorded along with our location and the time we were there, but try to record the police and you or I would be incarcerated. Moreover, why are there 28 pages redacted from the 911 report? According to congressmen who have read them, if they were to become public, they would force every American to rethink what we know of the history of that day and who our enemies really are. So why are we being kept ignorant? Government seeks to hide their actions in the dark, but we all know what grows in the dark, mold and corruption.

 

Taxes and government fees go up constantly. As our government drives down wages and drives up the prices we pay for our needs, it is also raising our taxes to absurd levels, increasing the strain on our standard of living. Warren Buffett complained he was paying a lower tax rate than his secretary, so the government stepped in, raising his secretary’s taxes. No matter how high our tax burden gets our government always spends $2.00 for ever $1.00 they take in. As a result, the higher our taxes get, the more our government goes into debt. Couple this with what they spend our money on like, making indigence a career choice, buying rockets for Hamas to attack our allies with, funding every third world dictator’s Swiss bank account and giving economic aid to China, etc… and even a blind man can see why we are in such debt.

 

The New Class promotes the economic assault in every way, in the media, academia and culture they are unanimous in their adoration of government power and prerogative. The New Class sees nothing wrong with bringing in millions of illegal aliens to suppress our wages by creating a permanent underclass, passing thousands of pages of regulations that promote crony capitalism, keeping the actions of our “democratic” government in secrecy, while monitoring us to the nth degree, and they have no problem with arming Islamic militants against our allies. We have to face the fact that the elite, who make up the new class, are totally on board with the sinking of the US standard of living, and are the real problem.

 

All the actions our government is doing to destroy our standard of living could not happen if the political elite were held to their own laws and our Constitution. The entire regulatory structure of the US is based on one flawed ruling, Wickard v Filburn. That one flawed anti Constitutional ruling by the Supreme court has allowed this absurdity to grow like an aggressive cancer in our government and our economy. It needs to be overturned as badly as Dred Scott did. The only way to stop the trend to total economic separation between the rich and poor in America, like we see in third world countries, is to force the elite to follow their own laws, and our Constitution as it was written and intended. I offer one method in my book, The Fourth Branch, but there are others that might work as well. The point is, we must start holding government and those that serve in government accountable before it’s too late, if it isn’t already.

 

 

Sincerely,

 

John Pepin

 

Tesla, Crony Capitalism and Creative Destruction

July 31st, 2014

 

Dear Friends,

 

It seems to me, an excellent illustration of political favor at work, the type of political favor that is destroying our economy… is the scuffle between Tesla Motor Cars and the Dealerships in New Jersey. Everyone agrees it is about politics and we also tacitly agree the question will come down to which side has the most political favor. Free market consideration is not made at all. This small set to, between the dealerships and Tesla over whether Tesla can sell it’s cars directly to consumers, is all about stopping the free market from innovating and to protect the profits of politically connected dealerships. The best interests of the consumer is not even at question! No one in the media cares if the consumer is hurt or helped by direct sales, only which side has sufficient political favor to push their argument through the New Jersey legislature, because that is all that really counts. This is very damaging to our economy, because the interest of the people is not even a factor, simply the will of the political elite. This shows how far from free market principles we have strayed. Your job, wages, benefits and standard of living are in the balance, but bear no weight on how it turns out.

 

Tesla wants to sell it’s cars directly to the consumer, bypassing the traditional dealership network. The dealerships have asked a court to force Tesla to sell their cars through dealerships and as a result Tesla doesn’t sell cars in New Jersey. Tesla has gone to the New Jersey legislature to get a law passed allowing them to sell their cars direct to consumers. Of course, politics came into it as soon as the smell of money wafted around, and justified by the fact Tesla wanted to do something different then is traditionally done. Because, as Milton Friedman said… when a firm faces competition that sells it’s products at a lower price and better quality, the firm can increase it’s quality and lower prices, or it can go to the government to force the competition closed. That is exactly what the car dealerships have done, they went to government to force Tesla to use them, to protect their profits.

 

The problem is that this strategy always results in stifling innovation, which has a profoundly negative effect on present, and especially future GDP growth, due to the compounding effect of past growth, or lack of it. Schumpeter coined the term, “Creative Destruction” to explain the cycle of growth under the capitalist mode of production. He explained that, as a new idea is implemented, units of production are drawn into realizing that new idea. This results in GDP growth, as more labor, productive facilities and ingenuity are utilized. As the innovation matures, the old systems that are rendered redundant go bust. They go out of business and the recession part of the cycle comes in. As the cost of the units of production become cheaper due to the recessionary pressures, a new idea becomes possible to implement, starting the virtuous cycle again… unless it is short circuited by well meaning but pernicious government programs to protect older more established firms from competition, (like is done in Japan…).

 

The best way would be to let the free market sort it all out. If Tesla’s plan results in angry customers then Tesla will retreat to the traditional strategy of using dealerships to sell it’s cars. Considering the recalls recently on Tesla cars, this might have proven the dealerships argument, without having gone to court and enriching lawyers for nothing. We’ll have to wait and see how the consumer reaction is to how the recalls are handled. If Tesla’s plan does work however, it will have staked out new ground undermining the market reason for dealerships to exist, which would incentivize other companies to stop using dealerships. Either way the market will show the efficiency of the present system or the potential innovative efficiency that could result in creative destruction. With the oceans of paperwork, regulations and political favor that is needed to cross before an innovation can be implemented, the innovative part of the business cycle is drowned.

 

As government policies smother innovation creative destruction is stymied. Lower present GDP growth can be expected, and will be magnified over time due to the effect of compounded growth. That damage to the innovation process by government derails the creative part of the creative destruction by protecting the firms that would face destruction, and so to keep the old inefficient crony capitalism going government destroys the very mechanism of growth of the capitalist system, and by doing that, they lower everyone’s standard of living… but the political Elite get a ton of money and power by doing it.

 

 

Sincerely,

 

John Pepin

 

The Common Core Catastrophy

July 28th, 2014

 

Dear Friends,

 

It seems to me, a standard means nothing, if you keep changing it. Should be common sense but the logic of this thinking is lost on the educational elite. The educational system in the US has become so politically oriented, to the progressive new class way of thinking, it has failed it’s primary role as educators to the next generation, and instead become indoctrinators of the children. The total failure of the educational system, and by extension those that have run the educational system, has to be covered up, because people would be outraged to know what a pathetic job the new class has done, with the billions of dollars we have given them from our hard earned money, to educate our children, and instead we get back kids who are incapable of operating in the market system! That is why the new class progressives, who have had a monopoly of control on the school system through the NEA, Boards of education, the bureaucracy and by a hundred other subtle ways, have introduced Common Core, the curriculum that teaches to the absurd test… and therefore teaches absurdity.

 

True, our children will not have the critical thinking, adaptability, work ethic, self control, moral character or wherewithal to compete effectively in the market system, but they will be good little automatons. This fits very well with the progressive’s program to progress the economic systems of the world to communism. Self starters and individualists, those who have the character traits making them ideal to operate in a market system, are the worse kind of people in a Marxist regime, while mindless sloths who are only interested in bread and circuses are perfect. If the progressive agenda is true to their founding, propaganda and promoters, they would have motive to change the educational curriculum to meet their needs, instead of the needs of the children we are paying them to educate.

 

The Common Core curriculum, as it is called in most but not all places, is nothing but the old teaching to the test. In this case a test that has been so politically washed the facts have been bleached out. No one who gets the math portion of this “system” will be able to give two fives for a ten, with out ten minutes, some paper, a pencil… and a calculator to check their work. The history has been watered down to politically favored facts, taken out of context, what good is it to know the orders of battle of every battle fought, land and sea, during the Second World War, if the reason, the context, it was fought in the first place is left out? Isn’t that glorifying the war, and neglecting to teach why it happened, and therefore how to keep it from happening again? The science has been reduced to mere global warming scare mongering and bashing any theory the new class finds dangerous. No sense teaching the scientific method, if we applied it to things we are supposed to believe, we probably wouldn’t believe them.

 

The only way to break the stranglehold the new class progressives have on the educational system is with a non excludable voucher system. Since we as a people and society, have made the decision our children’s education is to be paid by all through the tax system, I accept this parameter, but I dismiss the argument that the government should have a monopoly on education, as a logical result. Give each student a voucher to go to whatever school they and their parents choose. The voucher would be for the full annual cost of the local public school, if the school they choose is more, they pitch in the extra and if it is less, then they get half the savings. People will want the best for their own children, as a result people will put their child into the schools that get the best results. Schools will compete for children on their outcomes for past graduates. Let people be rational maximizers and people will be self interested rightly understood.

 

One last thought, changing the test is the definition of a non standard, not a standard. The only real way to compare students year to year is to have them all take the same test. This is impossible now because the test has been changed so much. Changing the SAT to bend to political pressure has ruined it as a standard. It has become a guide at best and a poor one at that. Moreover, the SAT only looks at only one narrow facet of the human being. I would say it would be better to test a range of attributes, knowledge of course, ability to adapt, a mental stress test would be good, ability to learn and apply, MMPI as well as physical tests, would be better at identifying people’s various merits, like big firms do before they hire. That is… if we actually want to test, sample, study and quantify our children in a standardized way at all, along with the pernicious incentive to teach to the test that a education standard creates, but that is a different article.

 

 

Sincerely,

 

John Pepin