Billion Dollar Business Idea

May 28th, 2015

Dear Friends,

It seems to me, a smart business idea that could net someone millions, and perhaps billions, is a website that reads and posts a simple to read synopsis of every shareholder’s report, briefly describing any changes the board wants to make, the likely consequences to the company and profits short and long term of those changes, an easy to read and understand report on any election to the board of trustees regarding their background, philosophy of corporate governance and work history, those synopsis and reports would be written for every firm with over one hundred million in gross revenue, and for a nominal fee that synopsis could be read by any shareholder of those companies. Companies that are ethical would offer to pay for the service for their shareholders. To get that done, such a company needs to become well known, create simple to read, correct and understandable reports and synopsis, as well as the intellectual capital to make it work. The potential earnings of such a company are staggering.

If there was such a company it could be a paradigm shift in the principle agent relationship. Today the agents have all the power. They send shareholders a several hundred page document that we are supposed to read and understand, that is in arcane language, redundant and actually says nothing of any import pertaining to the question they want us to vote on. That paradigm has created a lop sided power relationship between the principles and agents. That lop sided power in the relationship has allowed many companies to be run against the shareholder’s interests and have enabled senior management to get an out sized portion of the profits. I mean really, what employee is worth tens of millions of dollars, while running a company into the ground?

Empowering the principles to over see the agents can only lead to protecting the principle’s interest and limit the power of the agents to abuse their position. The power differential in the principle agent relationship has been used for over a century to enrich the senior management at cost to the shareholders and customers. Examples abound where shareholder profits and wealth have been undermined by management. One famous case was when J D Rockefeller bought an iron company, converted it into a publicly traded company, sold the shares for double what he paid, and remained as the CEO, reaping even more profit at the expense of the shareholder chumps.

Such a rebalancing of the principle agent relationship would create better run companies that would have a better relationship with their customers. Everyone is self interested, which is to say we all seek to maximize our returns on our investments. Economists call human beings rational maximizers. Clearly, since we are all self interested, if given actionable knowledge, we would seek to increase the longevity of our assets, seek long term profits instead of short term gain, provide excellent quality service and products to our customers while ensuring the company’s business model is consistent with the times. In short, instead of our agents working under pernicious incentives, we could return the entrepreneurial ethos to businesses.

If the principle’s interests are protected and the companies themselves are better run, the macro economy will improve, by potentially starting a new wave of Schumptarian economic expansion. Schumpeter coined the term, “Creative Destruction,” to explain the macro business cycle. In it, he posited… a new idea that improves efficiency in management, production or product, starts the business cycle. In the creative part of the cycle, as the new idea is implemented, the macro economy grows at a rapid pace. Once the idea is mostly implemented and the gains have been mined out, the old firms that have become outdated go belly up, ushering in the destruction portion of the business cycle, (recession). The recession destroys inefficient firms, freeing up capital, space and equipment for the next entrepreneur to begin the cycle again.

When a new firm is started, the more disruption it creates the more profit there is to be had, especially in the financial services sphere, where the sector is awash with other people’s money. As in any innovative idea that is disruptive, starting a business that reads and produces synopsis of every firm’s shareholder reports, board of trustee elections and board of trustee requests, would be a sea change in the way shareholders get information about the firms they own, by leveling the information landscape. In and of itself such a firm would start the creative cycle. Such a firm would need a great deal of startup capital to hire the necessary lawyers, MBAs and knowledge base to make such reports, and do it inside the regulatory framework that has been set up by the agents to protect their interests, or to change the regulatory environment if needed. The initial cost would be high, but the profit over the long term, the benefit to shareholders and the economy at large, would be tremendous.

Sincerely,

John Pepin

Tyranny by Regulation

May 24th, 2015

It will be of little avail to the people that the laws are made by men of their own choice if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood.”
? James Madison

Dear Friends,

It seems to me, no human being ever born could begin to know and understand all the laws, regulations and codes that make up modern American jurisprudence. It would take a speed reader a lifetime to simply scan the Federal Register let alone understand them. Moreover, there are thousands of bureaucrats, people who we have little or no choice in selecting, working diligently eight hours every day, writing more. The amount of laws and regulations in the federal register alone written on paper is a mass of books that boggles the mind. Many of those regulations and laws are mutually exclusive making them incoherent. Add to that the fact that some groups are above the law and others are below the law and what our government has built is arbitrary rule, instead of law.

Examples of people who are above the law are legion, from Tim Geithner chiseling on his taxes, nanny gate, the House banking scandal, Fast and Furious, and the Benghazi cover up to Obama’s many extra Constitutional actions, the elite are increasingly above the limits law sets for the rest of us. any of which if you or I did them, we would be arrested, tried and jailed. Those who fall below the law’s protections are just as numerous, you or I could be arrested and held for twenty four hours without charge or access to a lawyer, there is no way a member of the elite would be subject to such unconstitutional actions. Land owners who have had their land taken for “Eminent domain,” where the property is not used for a road, public works or bridge, but to allow some member of the elite to build a hotel, casino or shopping mall, a business owner who must violate his or her faith else face punishment and you intellectual property can be stolen by the elite anytime they see fit, Eli Whitney being the most famous example. If you are charged by the bureaucracy you might not have the “privilege” of a lawyer, trial or facing your accuser, you are merely charged, tried and punished by the bureaucracy. Examples abound where the people are denied the protections of our Constitution and therefore are below the law’s protections.

The damage to our economy is horrendous. The application of all the regulations we live under cannot but limit economic growth. The damage to our economy from regulation is structural, not cyclical and so cannot be grown out of, lived past or is temporary, they are permanent hindrances to our economic growth. Due to the crushing weight of regulations we now have structural limits to the amount of people who can be employed, our wages are diminished daily by them and our standard of living is dropping. For the first time in US history the growth of small businesses is negative! Virtually every problem in our economy is the result of arcane regulations.

Lawyers must increasingly specialize. Law has become so convoluted, no lawyer could possibly be able to generalize anymore, and actually serve his or her client’s interests. I listened to a radio broadcast the other day where an expert was talking about the rules regarding inheriting a parent’s assets upon their death. In a half hour talk, the only thing that came out that was really understandable, was that you need an attorney to die today, else the government will penalize your children. The rules regarding simply inheriting a parent’s IRA are as counter intuitive as they are absurd. There is no corner of law today where that isn’t the case. Law and regulations have become counter intuitive and absurd.

I have heard that the average person today commits three felonies every day and has no idea they have done it. That statement speaks volumes on how arcane our regulations have become. You might fill in a wet spot on your lawn and have violated the wetlands protection act, you could get all the local permits to build a house and run afoul of some arcane regulation limiting the number of windows you are allowed to put in your house, you might make furniture in your garage and violate some foreign law, you could be having a bad day and yell at some stranger who stepped on your toe, the list of laws you violate every day is as endless at the federal register.

Imagine it, you are going about your daily activities, and without intention or malice, you violate some arcane regulation that would result in a felony if the government wanted to push it. Think about it for a moment, if that is the case, and it is considered truth by many pundits, lawyers and economists, you could be arrested and jailed at any time by a government that wants to shut you up, take your property, or just punish you for the way you vote or think. The slippery slope has become glare ice and has steepened to the point it is nearly vertical.

Madison wrote his opinion of a society where the laws are so complex, no one, even a trained attorney could understand them, in his letters and in the Federalist papers. His argument was that under such a system, anyone could be charged with a crime at any time, and so since it has become impossible to avoid violating such laws, everyone is a criminal. Where everyone is a criminal everyone lives and breathes at the suffering of government. When that is the case, government has become all powerful, and must be arbitrary in it’s appliance of those arcane laws and regulations. By James Madison’s definition, one of our premier founding fathers, thinkers and a patriot, we have become a tyranny.

Sincerely,

John Pepin

The Pernicious Effect of the Principle Agent Dilemma.

May 21st, 2015

Dear Friends,

It seems to me, the way business is done today flies in the face of true capitalism, undermines our standard of living and creates a false idea of what capitalism is. The modern paradigm where firms are owned by stockholders and run by the new class, has created a set of incentives that inevitably lead a business to maximize profits, by making chumps of the shareholders, lowering the wages of employees, poking the customers in the eye at every chance, enriching the new class out of proportion to their worth… while at the same time, providing as little actual value as possible for those profits. The new class has embraced the socialist system for corporate governance. This has led people to negatively associate capitalism with all those bad things, which is a total perversion of real capitalism, such low esteem for capitalism that is produced by the modern corruption of the capitalist ideal can only lead to a lower standard of living, now and in the future.

Economists call this predicament the Principle Agent Dilemma. The shareholders are the principles and the new class CEOs, and management are the agents. In the modern system of corporate governance, the agents have no real oversight by their employers, the shareholders, and so they serve themselves at the cost to shareholders, customers and labor. That is the crux of the dilemma. The principles are not served by the agents but in fact the value of the shareholder’s investment is eroded by the self serving new class that run businesses today.

Examples of the new class poking their own customers in the eye are legion. Walmart has ordered their employees not to say Merry Christmas during the Christmas season, to placate people who hate their business anyway, despite the fact the overwhelming majority of their customers are Christians. United airlines incompetency is legendary and is magnified by the rudeness of their service desk. As I discovered first hand on a recent trip. These are just two examples of the many that we find in our own lives.

A cursory look at the way profits are distributed in a modern corporation is telling of the incentives of those who run them. The shareholders get a pittance for their investment of hard earned dollars, while the CEO gets rich running the company into the ground. This is one of the reasons investors eschew dividends for growth. They understand that the CEO and top management will take the lion’s share of the profits as wages, stock options and bonuses, while paying out nothing to those who own the company… the shareholders, which makes the only way to get a return on investment, to invest for the short term, since the company will be run into the ground eventually by the new class, making dividend investing a loosing proposition, since that is a long term investment strategy.

Maximizing profits today while minimizing value is the name of the game. Companies run by the new class seek to provide as little value to the customers as possible, even as they poke the customers in the eye, while raiding the wages of the employees. Employees are not seen as assets but as liabilities and are treated as such. This creates incentives for employees to job jump, ignore customer needs, and have no emotional investment in the company they work for. Today it is common knowledge, that a kid entering the job market will work for perhaps a dozen firms in his or her lifetime, because there are no long term jobs out there where the company provides a pension to those employees who have been with he company for decades. The new class run companies wage war against their employees, stockholders and customers, to maximize the CEO’s profits over the short term.

If you look at the old way businesses were run, and today where companies are run by their founders, entrepreneurs, and even a few shareholder companies where the CEO has an investment in the company, the paradigm is far different. Almost all companies in business today were started by entrepreneurs, once the entrepreneur became too old, infirm, was pushed out or needed to cash out, the business was moved to the modern corporate system, which as often as not, bankrupted the business. Not because of a flawed business model, changing economic circumstances or recession, but due to the malfeasance of the agents. Apple is one such example.

Entrepreneurs provide maximum value to the customers, adore the business and cherish their employees, while a CEO doesn’t have any investment at all, not even an emotional one. That was the business model of the eighteen hundreds and still is today in a few companies. IBM was called the worst run company in the world, when Watson ran it, he valued his customers, and laborers and they all knew it. When the new class took it over they ran it into the ground, almost bankrupting it at a time when the digital revolution was at full swing, the employees that had been cherished by Watson and had terrific esprit de corps under him, are now miserable and hate their jobs, because it is made clear they are not valued, but are mere temps, to be replaced the moment a cheaper employee can be found. Their wages are under assault even as the new class management are enriched at cost to the shareholders. Now that IBM has abandoned their core business for cloud computing the end of that esteemed fixture of our economy is at hand.

These things explain why people increasingly are turning away from capitalism to socialism. As your wages are lowered and your job security is eroded, the value of your savings is stolen and the opportunities for your children evaporate, it is human nature to become angry at what you see as capitalism. But it is not capitalism that is the villain, it is the new class’ predilection for egoism and socialism, that is the real culprit. The new class in government pass regulations enabling more corporate malfeasance, by protecting giant companies from competition from entrepreneurs, who are then enriched by the new class agents who run those rising monopolies, creating a feedback loop of corruption, lower standard of living for most people and a hatred of the capitalist system. All of which explains that the principle agent dilemma is far more pernicious than most people realize.

Sincerely,

John Pepin

The Fear of Our Own Imagination

May 13th, 2015

Dear Friends,

It seems to me, I have heard the argument that religion is the fear of Man’s imagination, if that argument has any merit at all, those who make it, should apply it to Anthropogenic climate change… because it fits far better. How many millions of dollars, Euros and Rubles each year go to investigate the projected effects of anthropogenic climate change, and in what universe does any flood of money not generate a huge incentive to promote the agenda? The government taxes us, they give some of the money to “scientists” to make dire predictions on what will happen, if they are not given dictatorial powers to stem Anthropogenic climate change. They gave up on global warming because it is becoming ever more clear the globe isn’t heating, just like they gave up on the coming ice age in the 1970’s, now it is anthropogenic climate change… because, they don’t know if the planet has a fever or is going hypothermic, nor do they know the reason it is, the one thing they do know for certain is… that you are causing it, and you need to give them absolute arbitrary power over you, to stop you, or else you might someday suffer from the ills the government paid people to predict, if the scientists that do the predicting ever break their perfect score of 100% failure.

Pick up any science based magazine and it cannot but stand out to you the amount of stories on climate change. Even in magazines on astronomy, where you wouldn’t expect Earth news, you will regularly have stories on climate change. Each of those stories is based on a research grant by either a public or private institution, costing millions of dollars and based on other research other scientists have done in those same institution’s behalf. If any magazine you pick up has that many articles on climate change then there is a tsunami of funding going into that research.

Whenever there is easy money to be had, especially where that money comes from government and is considered “free money,” people pile in to get their share of that free money. It is a quality of human beings that makes it so. With a pathetic job market for people with college education, and the huge debt load that education continues to cost them, the incentive to prove climate change is human caused so the agenda can move forward becomes an offer they can’t refuse. They get good pay to do research to prove climate change is real, it will be dire if the predictions come true or to direct attention to the fact it is a hoax to begin with.

The climate change hoax was proven a hoax when the IPCC emails became public where the IPCC discussed how to fudge facts, temps and sway public opinion, yes, the climate change alarmists would have you forget that little episode. Yet it remains in the public record. It takes a special kind of gullible, to remain gullible in the face of direct admissions of the hoax, by the hoaxers themselves. Those college educated people without jobs, who make up the unemployed faction of the new class, are just that gullible. Instead of thinking for themselves and looking at real history, they are so indoctrinated that socialism even dystopian socialism is an advancement over flawed capitalism, that they eat up anything those they consider authorities expel and give them.

A market economy’s main function is to improve access to, efficient use of and leverage to the service of humanity, energy. Almost any innovation in production, organization or efficiency follow this paradigm. In some way, if they are successful, they improve access to energy, the efficient use of energy, or to use energy to give people superhuman strength. Another attribute of a market economy is that it is a complex system. A complex system is adaptable. That means a market economy will adapt to changes in the availability of energy, unless the availability is controlled by a cartel or government entity.

Having control of energy is like having control of the throttle in a machine. He who controls the throttle of a machine controls how fast it spins and how much work it can do. The one dimensional thinkers who make up the new class believe that is how their absolute arbitrary control of energy would work. Along with the arbitrary rule over every other aspect of our lives, for our own good of course, would enable them to implement the socialist utopia, or dystopia, since the mechanism of humanity is a complex system and not a machine, control of which must lead to inefficiencies resulting in general poverty.

Sincerely,

John Pepin

Inequality is to a Socialist as Soil is to a Tree.

May 11th, 2015

Dear Friends,

It seems to me, to say Bernie Sanders is going to, (or even wants to) fix income inequality is to say, trees want to eliminate soil. Income inequality is the very source of political power for Bernie Sanders, Hillary Clinton and every other progressive, or in Sander’s case, Marxist. Those who espouse socialism have no difficulty what so ever at the irony they always seek to become wealthy without providing anything of value, but in fact, creating the conditions where an economy will collapse, knowing full well what they are doing! Don’t fool yourself for a minute, that New class socialists care a whit for you or your family, they see you, not as an individual but as an African American, Hispanic, a white racist, capitalist, hater, neo conservative, etc… They only see you and I as the group they pigeon hole us into, as a means of separating us from each other and to weaken our resolve to fight them. To want equality is noble, to use the term as a means of getting more inequality however is as vile as it is manipulative.

If you listen to the words people use it tells you a great deal of what is going on in their heads. Examine my words, and you can get an idea of what I want for humanity, examine theirs and you get a different idea of what they want. We are never I but they. You are a member of some oppressed group no matter your ethnicity, political persuasion, religion or perhaps you are a member of the oppressor group, the reality of your existence is irrelevant to government controlled by progressives, socialists and Marxists, but a cell in the organism or group you are a member of. You are, say, a toe, and if you loose a toe so the face doesn’t have to be scarred…

The New Class, especially the progressive new class, are very well educated. Education is one of the defining factors of the new class. Lawyers, economists, Doctors, CEOs and professors are the leaders of the new class, would you argue they are ignorant? Since they are not ignorant we must conclude they have at least a modicum of knowledge of history. Given, the weight of human history shows, arbitrary rule always results in poverty and despotism, moreover, that socialism has only resulted in starvation and arbitrary rule, then the new class cannot claim ignorance.

Have you noticed every solution to every problem is more government and more power? Income inequality? Create more regulations and taxes insuring the actual rich don’t have to face competition. A welfare state program going bankrupt? Simply increase taxes on those trying to get wealthy while leaving old money alone. Immigration policy creating violent internal friction, (terrorism). Increase surveillance on everyone. Guns sent to a neighboring nations by government causing the growth of violent gangs there? Blame gun dealers and try to shut them down. Big government health care chimera razing the economy, ala Godzilla? Make it bigger and more tyrannical. The solution to every problem government creates, to the progressive, requires more government.

In the Nineteenth century however, (before the invention of the bureaucracy and the implementation of the Federal Reserve and the welfare state), the US economy had huge swings of growth and recession, but on average the economy grew at a rapid pace. There was a long period where the economy grew rapidly in the face of deflation. The dollar’s buying power increased, while the economy grew, which any Keynesian new class economist would tell you is impossible. In the early 1800’s the US experienced a labor shortage! Conditions were such that people could make good money without working for someone else, business conditions were that good. People migrated to the US to the point of a tenth of the European population. They voted with their feet to go from a heavily regulated economy to a free one.

Every example of a socialist government, from revolutionary France, through Nazi Germany, to Venezuela… has resulted the same, eventual economic devastation, tyranny and war. Some examples have been singular in their brutality they will be remembered as long as there are people. The Khamir Rouge in Cambodia was on such example, Mao’s sending the Red Guard house to house taking by force all the food from the countryside, after a few million had starved Mao declared the famine over and distributed the food, he had taken back to the people he had taken it from, the final solution, and finally, Stalin’s Ukrainian famine.

The very source of political power for a socialist is the anger inequality he or she creates in a society. Their policies are designed to create inequality even as their claimed intention is to eliminate it. The test is that in the 1800, until the government started encouraging monopolies, there was little inequality, but since the progressive era, inequality has grown out of control. Eliminate inequality and why do you need a firebrand socialist to restore it? Inequality is to a socialist as soil is to a tree, it provides a place for it’s roots, support and sustenance.

New class progressives cannot claim ignorance of history, yet their every action is to move the world to tyranny, albeit they would argue benevolent tyranny, regardless of the lessons of history. Those like Bernie Sanders, Elizabeth Warren, Hillary Clinton, Francois Holland, Hugo Chavez, Barak Obama, Ban Ki Moon, Bill Deblasio, Alexis Tsipras, and many more know exactly where they are taking this planet, and their power is derived directly from inequality and the anger they gin up for it. They will ride it to wealth, fame and power, but their names eventually will go down in infamy, when in a hundred years they, and we, will be remembered as the fools who left paradise for slavery, had every opportunity to change direction but didn’t, and should have known better.

Sincerely,

John Pepin

The Progressive Reaction to the Attack in Texas Says More About Progressives than Terrorists…

May 6th, 2015

Dear Friends,

It seems to me, the recent attack on a free speech rally in Texas and more importantly, the reaction of the progressive unbiased media about it, show the depths progressives are willing to go to forward their agenda of total societal, economic and cultural collapse. Sounds nuts to say progressives seek the collapse of our civilization eh? It might… if you never listen to their rhetoric, observe their actions or understand the historic results of their policies, sadly, most people don’t. As I have written before, most people would rather believe a glittering lie, than an ugly truth, and many will actively try to shut up those who speak an ugly truth. So what we have is a people who are unwilling or perhaps unable, (due to the absurdly indoctrinating school system), to comprehend the very real danger our elite pose not only to us, but to our very civilization.

The progressives in media maintain a constant diatribe vilifying the victims of Islamofascist attacks for a decade now. Britain denies Pamela Geller a visa, because they claim her message is dangerous, but the message of Islamofascists… calling for the violent overthrow of Britain and the West, the subjugation and eventual extermination of Christians, Jews, Hindus and Buddhists, isn’t? Today the call has gone out that those in Garland had it coming, which is essentially the same as claiming a rape victim had it coming, because she wore a short skirt. They demand we must not criticize those who openly avow the slaughter of Christians and the destruction of the West, and call for climate change deniers to be jailed for their opinions, which is clearly a direct assault on free speech, all the while proclaiming their love of free speech! Anyone who claims others cannot criticize a philosophy, by definition, must be allied with that philosophy, and so they too must also want those measures. Their rhetoric tells more about them and their intentions, than all the articles ever written, if only people would actually listen and comprehend their words.

Fabian socialists have as their foundational philosophy, that the world needs to be heated to the point of melting down, so they can reform it in a way that more suits their desires. That is not hyperbole but their own doctrine! I ask you… what would heat the world to the point of melting more than the resulting clash of religion, culture and society, the Islamofascists, (and progressives) advocate? The modern progressive movement is based on the Fabian socialist model. They don’t believe in the revolution to usher in socialism, which is where they break ranks from the Marxists, but a slow progress to socialism. They care nothing that socialism has always resulted in millions of deaths by starvation, death squads, and war. In their minds, the ends justify the means, moreover, most don’t believe that socialism has ever really been tried. The bloody history of the twentieth Century be damned.

The rhetoric from progressives in the media, government and academia are uniform in their condemnation of western values, western economics and western history. They despise our morality and attack it in every way and at every chance. To be ignorant of that requires a person be intentionally blind to what is right in front of them. Progressives hate free speech, but know they cannot openly say it, so they hide their intentions by saying, they love free speech but… you can’t offend certain groups. They love freedom but, it has its limits, they love the poor and hate the wealthy, even though they are the wealthy and their policies create more poor, free republics are run by imperialists and empires are run by freedom loving tyrants… the list of newspeak is endless. Their duplicitous rhetoric would make INGSOC blush.

Most people only want to live their lives in peace and make a buck or two to save for old age. Most are too busy to really observe what is actually happening around them, and so, whenever someone tastes an ugly truth, they spit it out and when someone else offers them glittering lies, they gobble them down. Glittering lies are like lead oxide however, it tastes sweet, but is poison. Moreover, to believe those ugly truths requires action, and who has time for that? What truth could be more ugly, than to hear the elite actually seek the destruction of the western way of life, to be replaced with a world wide socialist tyranny?

Those in the media that calls itself unbiased, and progressives in all political parties, love to claim anyone who listens to their words, comprehends the results of their actions and understands the historical precedents of their policies, is a tin foil hat conspiracy theorist. Yet they make the most absurd conspiracy theories up, like Hillary Clinton’s vast right wing conspiracy, conservatives hate the poor, anyone who disagrees with them are haters, the Koch brothers are evil, aliens started life on Earth, etc… Progressives have the most insane ideas, and if you think of it, wouldn’t the ideas of anyone who seeks to destroy our civilization, the civilization that has resulted in the most prosperity for the most people, unprecedented technological growth, coupled with the most liberty the world has ever known… have to be nuts?

Sincerely,

John Pepin

The Fiction of Unending Economic Growth

May 3rd, 2015

Dear Friends,

It seems to me, the desire of economists, government officials, the media and brainiac 2000’s, that the economy grow in a straight line is as absurd as it is ignorant. Unending economic growth has been the siren call to economists, politicians and business elite for ever. They all want only economic expansion, (as do we all), and they will do anything in their power to get it, even destroying the engine of economic advancement, if that is what it takes. The desire for unending economic growth without recession has led our policy makers to take us down paths that can only result in perpetually lower economic growth. Such measures as fiddling with the interest rate to stave off recessions, bailouts, the ever increasing size and scope of monopolies as well as regulations designed to control the economy, are the norm. To paraphrase an ancient Chinese philosopher, (Mo Ti)… they spend that which they have too little of to gain that which they have too much of…

First lets define recession versus depression. A recession is a period of time where an economy shrinks and a depression is a period of time where an economy grows at less then it’s normal growth rate. A depressed rate. The effect of a recession is to eliminate inefficient businesses from the economy freeing up resources to be used in more productive enterprises. There is utility in a recession. A depression however, where an economy grows at less than it’s normal rate, has no utility. That lower growth rate lowers the economic lot of the people drastically and that lowering is multiplied over generations. Look at it this way… Let’s say you have a savings account and are normally getting five percent. One year in ten you get negative two percent. Now look at the same initial savings in another account where you get two percent. The first account will out earn the second by orders of magnitude. That difference is exaggerated over time, the longer you get the depressed rate, the lower the actual total returns.

Economic suicide has come to fruition in the modern welfare state. Japan is the poster child for a failure of welfare state economic policies but does the government of Japan change it’s policies? No, of course not, instead, they double down and claim they just need to pass more regulations, raise taxes and print more money, all so the government can spend more money on five thousand dollar toilet seats and thousand dollar swizzle sticks. If only the government had a bit more money they would fix the economy and everyone would be richer than rich. That line of argument is so transparent it shouldn’t fool a toddler but it seems to work exceptionally well on the highly educated new class.

Meanwhile the rest of the developed world follows Japan’s example of lost decades. The US has been in a depression since Obama took office and the government has done everything in it’s power to ensure it stays that way. The Federal Reserve has printed trillions of dollars and handed them to the monopoly banks, lowered interest rates to essentially zero when you factor in inflation, they under count inflation to make the economy appear to grow and the Obama administration has ushered in a tsunami of regulations and taxes that especially stifle small business growth. Not to seem unfair, they have even regulated the Internet, to protect the titans like Google and Facebook, from competition from small businesses. Economists sing the praises of Obama because the unemployment rate has dropped and there are no soup lines. Well, the unemployment rate has dropped because a record number of people are no longer in the workforce, and the soup lines have been replaced by EBT cards. Those measures have changed from that which is seen to that which is unseen…

The economy of any nation is like an organic system. An organism grows for a period then stops growing, even shrinking for a small time, then grows again. That is the way organic systems and complex systems grow. Rapid growth creates instabilities and inefficiencies, those sub par hindrances can only be addressed by short periods of rebalancing, in organisms and recessions in economies. Without those short periods of rebalancing, structural deficiencies grow out of control until the organism gets cancer, or an economy becomes inefficient to the point of depression. Like the illustration earlier in this article… that less than ideal growth rate drives down the economic standard of everyone. That lowered economic outcome is more obvious at the bottom of the economic ladder and less visible at the upper end.

That lowering of economic outcome for those at the bottom of the economic scale, creates conditions where hate, envy and jealousy flourish, but the fix the elite propose is always more of what caused that lowered economic outcome in the first place. There are never enough jobs, wages, savings or start ups in an economy but they are spent to create more welfare, monopolies, taxes and regulations. So we can say with certainty… the elite spend that which we have too little of to get that which we have too much of. The question is, how long are the rest of us going to fall for the flim-flam?

Sincerely,

John Pepin

A Corrupt People can Never be Wealthy

April 29th, 2015

Dear Friends,

It seems to me, when the people of a nation become so corrupt their word is no more valuable than a turd, business cannot be done. When business cannot be done the economy collapses like a popped balloon. Any economy requires, as a prerequisite, that people be trustworthy, even a socialist economy. In a socialist country, or a country turning to socialism, the morality of the people is eroded until they become utter reprobates like their leaders, and is why socialism fails every time it is tried. Which brings us to the thrust of this article, that one of the major problems in the US economy, (and economies around the world), is that people have become so immoral, such reprobates, lazy and liars that even if the government got out of the way, the economy wouldn’t start growing again until the people got back a tiny bit of their morality and human heartedness.

The proliferation of lawyers in a nation is not a sign an economy is mature but that the people cannot be trusted. Attorneys themselves are largely to blame since the incentive for them is to break contracts, stab others in the back, create the conditions where no one can be taken at their word, and the moral get molested by the immoral, calling it serving their client’s needs. The collapse of integrity is a windfall for lawyers and so they push it. Today you can’t buy a cup of coffee unless there is legal paperwork in triplicate and signed by a third party… explaining the dangers of hot coffee, the terms and conditions of the sale, refund policy, ingredients, limited liability, potential health concerns from drinking coffee to access, and the specifications of the cup.

As people get screwed over by unscrupulous connivers they will increasingly turn to government to protect them. The government is always too happy to become more powerful, and never gives up a whit of power, so a corrupt people wratchet their government to despotism. More regulation makes it harder for a person to make money legally, and so more will turn to stealing, cheating and conniving to get ahead. Why work when that option is all but closed… and business is done by larceny anyway? In such a country the government will take advantage of the people, the strong will abuse the weak and the family will turn against itself.

Of course corruption starts at the top and flows down the social ladder like sewage. The leaders are never held to the same standards as everyone else, that has always been the case everywhere and at all times, which shows there has never been a standard but only arbitrary rule. Human history is nothing but a list of corrupt kings, emperors and Presidents. The more corrupt and evil the larger their name is in history texts. I have maintained for years that it is impossible to live in a cesspool without smelling like it. The very few people who have held positions of power, who were not so utterly corrupt they stank like a cesspit, have pushed against this paradigm of arbitrary rule. Most of them were murdered as reward for their singular service to humanity.

In the few times and places where the people have not been fully corrupted by their elites, those nations in those times have seen unbounded prosperity, social harmony and civil justice. When a man or woman holds themselves to their handshake, profit is based on value, not getting a line in a contract past an unsuspecting chump. When value is the basis of profit everyone profits. Those who provide the most value, profit the most, simply by being honest because honesty is value. The butcher gets money to provide for his family, the buyer gets meat for her table…

The market system’s superiority is based on the fact that value is traded not goods and services. Goods and services are the currency but value is what is actually traded. When people get value for their money both parties win. When both parties to a transaction win the economy of that nation is improved a little bit. Magnify both parties winning, over the tens of thousands of transactions a day in a populous country, and the economy is improved drastically every hour of every day.

Honest people can negotiate hard terms, but when the negotiations are done, they both stick to the terms they negotiated, the conniver, despot and confidence man trades in lies however. Those who trade in lies, not value, create the conditions where people will turn to government and lawyers to protect them from their own butcher, car salesman, Realtor and haberdasher. The more a people must turn to those in power to protect themselves, the more corrupt society will become, which in turn creates more corruption creating a feedback loop that can only end in despotism, poverty and endemic violence.

Look around the world, those places that are hell holes are all characterized by corrupt governments, corrupt people and corrupt courts. See for yourself, where the government is despotic, where the people are connivers, where the courts only enforce arbitrary power, aren’t they always unsafe, poor, and prone to social upheavals? Then ask yourself, what nation on this planet would you want to raise your children, one where the people are corrupt, the government is tyrannical and the courts serve the powerful… or one where the people can be trusted, the government is limited and the courts serve justice? You can make a small difference, be honest, trade in value and hold yourself to the same, or better yet, a higher standard than you do others. Lead by example.

Sincerely,

John Pepin

Exploiting the Suffering of Children for Political Ends…

April 27th, 2015

Dear Friends,

It seems to me, everyone’s goal should be… to have every child brought into this life, loved unconditionally, nurtured to reach his or her full potential and have their material needs met to present US standards, no matter the situation one is born into or where they are raised. All human hearted people want this to be a universal paradigm. Those who argue, as a matter of course, anyone who doesn’t agree with the path they call for to meet this laudable end, is against children, is being ignorant at best and conniving at worse. This should be obvious to everyone, but the lie propagated by the media that calls itself unbiased, that if you disagree with new class socialists you want children to suffer, is as much in vogue today as it was when Marx made it. Such a viciously underhanded argument is simply a means to shut down debate, and in fact creates the conditions where children will be born into poverty, lack opportunities and grow up unloved.

It is patently evil to want any child born into poverty, unloved and without opportunity. Only the most vile human being possible would want that, yet progressives use that argument in a myriad of ways, to discredit those who honestly seek to improve the lot of children across the planet, showing progressives, socialists and Marxists to be people who are willing to exploit the suffering of children, to meet their political goals. If you exploit the suffering of someone to meet your own ends, by definition, you cannot care about those you exploit, you only care about the suffering you are exploiting. I would think anyone with the reasoning ability of a house fly could figure that out for themselves but such spurious arguments have worked wonders for decades.

This fallacious argument, that libertarians and conservatives seek the suffering of children, is everywhere. False analogies fill the press, Facebook and Twitter. The convention is simple, point to some sad statistic about children then draw a false analogy to some action the new class wants to stop. “Childhood homelessness has increased X percent in the last five years and the republicans are doing Y…” where X and Y have no logical correlation, only an emotional connection, is a perfect example. If you think about it even for a moment it should become obvious… the person making that argument is exploiting the suffering of children for a political end.

The argument works though. Even though it is clearly exploiting the suffering of children for political ends, and therefore shows the arguer to be vile, hateful and power hungry, it works wonders to shut off debate, allowing the vile, hateful and deceitful to have their way. For this to work however, the lot of the children must never get better, only deteriorate. If we glance at the results of those who have made this argument, that libertarians and conservatives must hate children because they don’t support the usurpation of Constitutional rule, you see that the longer progressive policies are in place the more children are born into poverty, suffer little or no opportunity and live unloved. But then again, those who exploit the suffering of children for political ends, don’t care at all about children, only power and wealth, and the more the children suffer the stronger their spurious argument.

The evil of socialists, Marxists and progressives, is shown clearly for anyone with their eyes open. Variations on the theme are used to justify a plethora of evil policies, abortion for example… because would you want to be born into a life where you are unloved, abused and have no opportunities? If you are against the evil of abortion then you must want children to suffer… and the lot of humanity is lowered another notch, while the socialist amasses more power. Those who lower the standard of living of children, then claim anyone who stands against their policies hate children, are a special kind of evil. Heartless, greedy, lustful and gluttonous people, they prove it every day, by their policies and their arguments. To fall for such scams is not only ignorant and shows a lazy mind, but since the sophistry is so obvious, it also takes a sort of complicity that blackens the faces of those who accept it. Do you?

Sincerely,

John Pepin

On the Xenophobic Violence in South Africa

April 23rd, 2015

Dear Friends,

It seems to me, the xenophobic attacks that are happening across South Africa are the result of socialist economic policies, not actual xenophobia. The news has been all agog about the attacks against foreigners in South Africa by poor South Africans, creating the conditions where the government has to crack down on those caught beating up foreigners. It has got so bad many governments have recalled their citizens in an attempt to protect them from being the victims of those attacks. Everyone is looking at the symptoms, the attacks, but not the illness, socialism. Any doctor will tell you that treating the symptom and not the disease is a recipe for the death of the patient. In the case of socialism, it is the disease that no one dare speak it’s name, else face the wrath of the new class elite who worship at the feet of Marx. The reason this story is so important for the world, and is the same reason the illness is being overlooked, is that when socialism is finally fully enacted everywhere… the results will be the same.

The government of South Africa has embraced Marxism. It has the Constitution Ruth Bader Ginsburg said new republics should follow. The hammer and sickle adorn the tee shirts of the ANC and even Nelson Mandela wore a hammer and sickle shirt at many rallies. They have enacted socialism throughout the nation and economy. I am certain they planned on creating an economy where everyone would be equal and prosperous, but while a laudable goal, the results, as they always are, have gone the other way. First the economy crumbles, then the government must resort to greater and greater authoritarian means to maintain stability, until by gradations, it has become despotic. That has been the end of every nation that has taken that path.

People become angry when their economic circumstances diminish. It is mere human nature. We become angrier and angrier requiring an outlet. When people have no job, no hope of a job and a foreigner has a job, especially a good job, that anger gets focused on the foreigner. No one wants to blame themselves for their circumstances so the other becomes the target. As the economy rots away, anger gets more heated until it flares up as violence. During the 1920’s in the US the KKK almost disappeared, because everyone had a job, how can you maintain hate in your heart if your life circumstances are going well? Where do you have time to burn a cross on someone’s lawn when there is unlimited overtime? Once the progressive Herbert Hoover destroyed the economy with Smoot Hawley the KKK was reborn. FDR’s new deal cinched the deal and the KKK became a power to be reckoned with through most of the twentieth century. The same thing holds true in South Africa.

South Africa should be a paradigm of wealth and prosperity. It has enormous natural resources, it is the darling of the world community, it’s infrastructure is still pretty good, it’s farmland is amazingly productive and it has a great deal of well educated people. These are the basic inputs for a good economy, yet South Africa’s economy is pathetic. Huge amounts of people are unemployed and cannot find jobs, the farms are becoming less and less productive as they are seized from the farmers and redistributed to poor South Africans, while the infrastructure crumbling. The debt is growing fast, as is anger in the streets… at the results if not the policies that led to those results.

The violence we are seeing in South Africa is the direct result of socialist economic policies. They are failing there as they have failed everywhere they have been tried. This example will be ignored, explained away and apologized for, by the new class elite, as have every other catastrophe visited on mankind by socialism in the last two hundred years. The people need a villain and foreigners are a handy scapegoat. It cannot be, the people voted for a party that has destroyed the economy, that would require taking responsibility for one’s own actions! Now the government is clamping down, else the teetering economy will be utterly razed, when all the foreigners flee the violence, and the results of the policies of the ANC are exposed for everyone to see. This same play will be shown to everyone in any nation that travels the same road… economic collapse, anger from that collapse turning to violence, government crackdowns and eventually tyranny. The road to Rome always leads to Rome… no matter where you enter it or how fast you travel down it.

Sincerely,

John Pepin