Archive for the ‘philosophy’ Category

Today’s Federal Reserve Meeting

Thursday, June 19th, 2014

 

Dear Friends,

 

It seems to me, economists have been predicting three plus percent GDP growth since Obama came into office, and all their predictions have been wrong. The US GDP has stagnated for over five years despite the huge recession we were in when Obama came into office. Today, the Federal Reserve danced around the obvious, and all the economists Bloomberg radio interviewed, provided the dance partners. Yellen claimed the economy will achieve liftoff once we get by this latest slow patch and will exceed long term economic output… next year. This, despite all the previous predictions that have said the same thing, and have been wrong. I guess if they predict it enough, eventually it will come true, like if I predict a solid gold meteor will land on my property making me rich… long enough, it will happen. At some point however, this ceases to be a prediction, and becomes instead wishful thinking.

 

Typically, immediately after a recession economic activity rebounds strongly for a year or two, but the recovery from the 2008 recession didn’t. The reason economies typically rebound strongly after a recession is due to the fact that the units of production become cheap. Labor rates go down, interests rates plummet along with the cost of plant and equipment. The destruction of outmoded firms drives down the costs. Lower costs of the means of production give those with new ideas, the ability to implement those ideas, resulting in the virtuous cycle of economic growth. This is the creation part of creative destruction.

 

This last recession had it’s share of what, at he time, were called “Vee shapers.” They were largely those economists in Obama’s political camp, who eschew the Schumpeter model of the economic cycle, creative destruction, and instead favor the Keynesian, aggregate supply aggregate demand model. They thought that since interest rates had been so suppressed by the Federal reserve, government was spending such tremendous amounts of money, in the form of stimulus, and their man was in, demand would go up and the economy would rebound very strongly, resulting in a V shaped recovery. We found that they were wrong… it was more of an L shaped recovery.

 

The economy dropped like a cow chip. Instead of rebounding it stagnated despite the record amount of stimulus. Trillions of dollars were spent by the government, what is called fiscal tailwinds, spending that drove up aggregate demand, but did nothing for the average man and woman. Interest rates have been extraordinary low for half a decade now with essentially no real GDP growth to show for it. Inflation has been alarmingly low as well despite the record monetizing of government debt that the Federal Reserve has done. Pimco has named the recovery, or lack of one, the “New Normal,” now the term has become the “New Neutral,” but by any name a skunk is a skunk. The labor participation rate has fallen off the table, GDP growth hasn’t even reached normal levels, let alone takeoff velocity, and the Federal Reserve along with most of the central banks of the developed countries have followed along and monetized their debt… to no avail.

 

The one exception is Britain who instead embarked on a policy of fiscal austerity. Economists the world over warned that Britain would suffer economic Armageddon as a result. They were wrong. Today Britain and Germany are the only developed countries that are experiencing real economic growth at all. Since their economies are too small to be the engine of the world’s economy, the world is left with America as the little engine, that couldn’t. The developing countries have stalled as well due to the lack of an engine pulling the train.

 

What everyone in the economic community are dancing around, and trying their best to ignore, is the tsunami of regulation that washed over the US economy in 2008-2009. That tidal wave of regulation continues flowing in to this day. Obama care was a thousand page law, one that has fluffed up to tens of thousands of pages of arcane regulation, hindering economic growth in a myriad of ways. It has driven up the cost of labor dramatically, without a penny of it going to workers. That increase in the cost of labor is still rising even today from Obama care! The incentives of that single piece of legislation has directly resulted in lower wages, terrific job losses and a cost of labor that is unpredictable. Dodd Frank was meant to eliminate the problem of too big to fail but has made that problem even more intractable than ever. It is driving small banks out of business, and pushing large banks to get larger, exacerbating too big to fail. In short Dodd Frank has failed. Environmental regulation has skyrocketed under this administration. But these are only the top waves of the tsunami.

 

These problems that regulation has created cannot be worked through with low interest rates, we have had a low interest rate policy for 5 years, and it has failed. No amount of new regulation can solve the problem of too much regulation, it’s like trying to heal a burn, by burning yourself more. The long term unemployed will not be solved by importing millions of low skilled labor, sopping up the few jobs that are still available, and raising the minimum wage will only drive down the demand for those low skilled jobs in the first place. Dancing is all well and good, but when the elite dance around the problems they created, simply to protect a President and theory they are in love with, all of us suffer. Any alcoholic can tell you, the only way to solve a problem is to recognize it, then roll up your sleeves and actually fix it. Unfortunately, that is not on the Federal Reserve’s dance card.

 

 

Sincerely,

 

John Pepin

 

Bureaucracy, Law and Separation of Powers.

Monday, June 16th, 2014

 

Dear Friends,

 

It seems to me, nothing can prove the out of control growth of the bureaucratic regulatory apparatus of the Executive branch, than the fact that now the Legislative branch needs to pass legislation to stop regulation they find appalling. Congressman Peter Welch of Vermont is sponsoring a bill that would stop some new regulations, prohibiting cheese from being aged on wooden boards, or in wooden containers. As with most regulations this one is absurd, makes no sense from a scientific perspective, legal or even a sociological perspective, but it is an example of bureaucrats working diligently in the dark, regulating how we do everything and in every way. Their regulations are not subject to the will of the people, and are not Constitutional, but they have transferred tremendous power from the legislative branch to the Executive, undermining the intent of our Constitution’s foundational thesis, that of the separation of power, all for the dubious goal of efficiency in government. As we move further and further away from Constitutional rule, and into the chimeric bastardization of our government, we can expect our leaders, especially the Executive, to act more and more arbitrarily, until we have arbitrary government in all but name.

 

Constitutions are a concept that was invented as a way to limit the propensity of governments to become tyrannical. History shows that there has never been a government, no matter how well devised, that didn’t eventually become despotic. Rome was a republic for century upon century but eventually became a tyranny. That great republic began it’s death spiral the moment the people accepted arbitrary power in the hands of the Caesar, whether wielded by Marcus Aurelius or Nero, that power corrupted not only the man, and the Praetorian guard who protected him, but the society that became dependent on it as well. This is what Constitutions are supposed to prevent. If they are not followed however they loose the ability to limit and instead provide cover for a would be dictator.

 

Separation of power is the primary means the US Constitution, our Constitution, is supposed to prevent arbitrary rule. History shows that most of the time despotism comes from the Executive. Separation of powers is meant to prevent this propensity of rulers by limiting their absolute power and divesting that power in other segments of government, then pitting those segments, (and political factions), against each other, like using a fire line to stop a fire. Federalist Paper number ten explains this far better than I can. The power of a Constitution to reign in the avarice of a leader depends on it’s being adhered to.

 

The power to pass laws was given solely to the Legislative branch in the US Constitution. Our leaders have evolved the definition of the words in the Constitution to allow for a bureaucracy to take over most of the legislative functions of the Legislature. This has ostensibly been done to improve the efficiency of government to regulate the actions of it’s citizens. While it has allowed government to regulate far more efficiently… that regulation is anything but efficient. It drastically diminishes economic growth, personal freedom and US competitiveness, all for some pie in the sky notion of government efficiency. The truth is, the most efficient government is a tyranny, but is that where we want our government to go?

 

Keeping the thousands upon thousands of bureaucrats busy, as well as the hundreds government adds every year, presupposes that reams and reams of regulations must be written, else the need for the leviathan of the bureaucratic government goes away and the bureaucracy becomes redundant. Making those tens of thousands of high paying government jobs all go away. Bureaucrats, who are the modern equivalent of buggy whip weavers, cannot stand for their cushy, pensioned, well paid careers with government go away, and so they have a self interested need to keep the regulatory bandwagon rolling. The deleterious effect on society, our economy and even the destruction of Constitutional rule is irrelevant, and so our Legislature is taking up the all important question, whether cheese should be aged on wood as it has been for thousands of years.

 

Since the Legislative branch has given up so much of it’s power to the bureaucracy, it finds itself in the uncomfortable position where it has to pass legislation, to protect certain politically favored industries from the negative effects of regulation, in this case the cheese industry. When the legislative branch must pass a law to stop a regulation, it is proof positive that the kudzu of bureaucracy, has outgrown the garden. There was a Supreme Court ruling a few years ago that in effect said, since the Legislative branch had willingly ceded their power to the Executive’s bureaucracy, that bureaucracy has now the same power to pass regulations as if they were law, Constitutionally passed by the Legislature and signed by the Executive. That ruling, along with a host of other absurd rulings by the Supreme Court, has evolved our government away from Constitutional limits on the power of government as intended by the founders, to this bastardized inbred monstrosity we now live under. The real problem here, is the disdain and loathing our leaders hold for our Constitution, from the Executive through the Legislative and the Judiciary branches, all the way down to the lowly bureaucrat toiling away in his or her cubicle, for eight hours a day, making rules for the rest of us to live under, without scrutiny, or oversight… and without Constitutional authority.

 

 

Sincerely,

 

John Pepin

 

 

 

Impeach this Lawless President.

Wednesday, June 11th, 2014

 

Dear Friends,

 

It seems to me, there is no reason Obama cannot run for a third term, or even simply dictate he is now President for life. I am not saying he will, but there has never been such a lawless President in United States history. The scandals of the Obama administration have been so profoundly destructive of our Constitution and the rule of law, without any real outrage by the elite in the media, politics or culture, that our very Constitution has become mere window dressing. There is historical precedent for this, but not in American history, in the history of Rome there is a close example. One that led directly to Rome becoming a tyranny while calling itself a republic. We are on the same road as ancient Rome, with the difference that we have history to teach us where that road leads, and the Romans didn’t. Our republic will certainly end, in all but name, if this level of lawlessness continues. Our elected leaders are too afraid of Obama and his machine to even vociferously call attention to it. Tyranny is in our future unless we stand up and demand his impeachment.

 

The examples of lawlessness by Obama are legendary. Fast and Furious was a blatant attempt to undermine the Second Amendment to our Constitution and should have been a fast track to impeachment. Using the IRS against political enemies was so naked an assault on individual liberty, and good government, that everyone involved should go to jail for a very long time, you or I would, for far far less. Benghazi might have been overlooked as incompetence of the highest order, if not for the coverup, a coverup that was broader in scope and exponentially more pernicious than Watergate. Muzzling the media through intimidation is a direct attack on the First Amendment. Giving heavy weapons including surface to air missiles to Al Queda allied terrorist groups is a clear example of “Giving aid and comfort to the enemy.” Which, as defined by our Constitution, is the meaning of a traitor, which is one of the reasons Benghazi was covered up. Releasing enemy combatants to reenter the war against us, in exchange for a deserter, is another example of traitorous actions. Selective enforcement of law is the very definition of lawlessness and is itself impeachable. Now with Obama’s Dream Act he has opened the floodgates to tens of thousands of children crossing the southern boarder, to date over 60,000 children are in custody, with another 120,000 expected in the next year, giving some insight into what our government calls a “secure” boarder… one that is so open even a child can cross it. How many children who were not picked up by the Boarder Patrol, have been raped, murdered or enslaved? I could go on and on but space limits me. Suffice it to say, Obama is not held to any law our Constitution, or even common decency.

 

Rome faced the same problem. There had been intercine fighting for a few generations between the advocates for patricians and plebeians. The advocates for both sides were all members of the patrician class however. When Julius Caesar came into the picture, he handed out money to the plebeians to buy their support, and it worked perfectly. He had the plebeian’s unwavering backing when he declared himself dictator for life. Some of the patricians understood the danger to the republic from Caesar’s lawlessness and assassinated him to protect the republic. That is where the famous saying, “Et Tu Brute,” came from. As we all know from our history books Rome never recovered and it became a tyranny of the worst kind… arbitrary rule. The ascension of Octavius and his institution of the praetorian guard was the death knell of any hope for freedom in Rome. After that, Rome simply declined year after year, until the hordes from the north and the Islamic invasion from the south, destroyed both Western and Eastern Roman empires, the Holy Roman Empire and the Byzantine Empire.

 

History is a great teacher. It can warn those who have learned it’s lessons where a given policy will lead. We have such a wonderful chronicle to understand the nature of human government that it is absurd not to glance at it now and then. That we don’t, is why we repeat the worst parts over and over, and almost never relive the good parts. Those who have political power know and understand the lessons, and clearly by their actions, they don’t want liberty, they want to be dictators for life. To ascribe any human being with altruistic attitudes is foolish, but once a person has shown his complete disregard for our Constitution and laws, it is suicidal to allow his incursions to go on. Our political elite are too terrified of him, the cultural elite are in love with him, and the media elite are effectively cowed by him, as our republic relives the history of Rome. Caesar was only the first, he opened the door to Mark Antony then Octavius… Obama is only the first American President to openly flaunt the law, our Constitution and common decency, he will not be the last, since he opened the door, more will enter through it. God help us if we don’t stand, because even if he doesn’t declare himself President for life, the door is now open, when the next usurper walks through it, we will be forced to sit… for the the next few centuries.

 

 

Sincerely,

 

John Pepin

 

Appeasement of Aggression

Sunday, June 8th, 2014

 

Dear Friends,

 

It seems to me, you cannot appease an aggressor, appeasement only exacerbates aggression. This fact is true in every facet of life, both personal and political, micro and macro. Those who would take from us have already dehumanized us in their minds, and nothing we can do will change that, short of defeating them. In fact, trying to befriend someone who has dehumanized you only proves to the aggressor you are not as valuable as he, nor is your opinion as meaningful as his. This is a fundamental fact of aggression. We are all faced with aggressors in our lives. Those of us that placidly back off and cede ground worsen the aggression, those of us that try to make friends with those who seek to take from us, only prove to the aggressor we are unworthy to have whatever they want. The only two ways to stop an aggressor is to defeat him or her decisively, and that only works as long as you have the plurality of power, or leave the situation entirely.

 

Taking a person’s stuff is bad, but taking a person’s children, or humanity is far worse. Stuff can be replaced, rebuilt or simply done without, but our children and our humanity are fundamental to our person hood. Taking a person’s humanity can come in various ways, slavery is one way, forcing someone to believe something they do not is another… there are many ways to take someone’s humanity, all of them evil. Taking someone’s property is a lesser evil but evil none the less. If an aggressor gets away with taking the property of someone, that aggressor is motivated to do it again, to someone else. The cycle continues until the aggressor is dead or someone stands up to them.

 

Once someone has dehumanized another in their mind there is nothing the victim can do to change the mind of the aggressor. No amount of nice words, kind actions, charity or platitudes will convince an aggressor of the humanity of his intended victim. In fact they will only prove the unworthiness of the victim. Once someone has dehumanized another they must keep believing that, else in their own mind, they are bad. None of us wants to think we ourselves are evil, and so we continue doing things we should recognize are bad… to keep up the fiction in our own minds that we ourselves are not bad. The more someone tries to change our minds, the more resistant we become to change, again, because to change our minds will prove we were wrong in the first place and that is simply not acceptable. It is called cognitive dissonance.

 

When asked by a Roman why he was besieging an Etruscan city the Gaul king said, ‘Natural law, that the strong should take from the weak so the strong may live on…’ We are masters of rationalizing our actions, wants and needs. The aggressor never sees him or herself as bad, they manipulate in their own minds the facts, to show that they deserve to enslave that other, steal from him, or rape her, etc… even the most violent people often believe they are the victims. Their violence is merely the actions of the aggrieved. The aggressor often claims, (believes), he or she is the victim. This helps justify their actions at least in their own minds. Society often feeds into this false meme. When someone who has a violent past beats up someone, people shake their heads and say, “he’s at it again.” But when the victim kills an aggressor the same people who would have merely shook their heads at the violence, now become enraged and ask, “Couldn’t you have just run away?” We unknowingly feed the victim belief of those who are evil in this way.

 

If we want to live in a civilized world we have to start acting civilized. Ignoring aggression by others against others is not civilized it is why bullies get away with bullying. All it takes for evil to get a foothold is for good people to turn a blind eye, and we do that more often than not. When aggression is directed at us we must stand and fight. To back down is not civilized it is barbaric, because it empowers the aggressor to misuse others in the future who, if they back down too, will prove to the aggressor the rightness of his or her actions. Mere thieves must be punished, but those who would dehumanize others must be stepped on, as examples to everyone that aggression is not acceptable in a civilized world. Moreover, allowing the aggressor to play the victim only empowers the aggressor, and dis-empowers the victim. We can stop promoting aggression in our world and thereby live on a civilized planet, or we can keep placating aggressors, and eventually all of us will become victims and the entire world will descend into barbarism. The choice is ours, as it always is, the choice is not easy, it never is, but it is still ours to make, it is the price we pay for free will…

 

 

Sincerely,

 

John Pepin

 

The Lake of Spurious Logic in Which We Swim.

Thursday, June 5th, 2014

 

Dear Friends,

 

It seems to me, we swim in sophistry, every argument we face is steeped in spurious logic and all controversies boil down to politics, in such a society the foundation is rotted away, as the frame it needs to support, gets larger. Examples abound where any question at hand boils down to a political one. Usually where a person stands politically, on even scientific questions, is more informative of his or her position than any other reasoning. It would be enough if most people understood this and made a huge effort to stand outside politics and observe every question with a politically unbiased eye. This is important because politics is almost always the perspective that yields the worse outcomes.

 

There are so many examples of how we are immersed in sophistry, that I could get bogged down listing them so instead, I am burrowing into one. The collegiate system is the epitome of the old boy network. The utility of that paradigm is all but spent but the prerogatives it rewards academia are growing. It is in the system of academia’s self interest, to limit the product and by doing so, using the supply demand model or scarcity value, bestowing a higher value than it might otherwise have. In this they are no different than OPEC, limiting the supply of oil onto the marketplace, keeping the cost high, and their profits high as well. This is one reason the united States is a net importer of Medical doctors, colleges limit the supply.

 

The elite in academia would have us all believe that theirs is the only way, while the market system coupled with the Internet has offered a different solution, private online colleges. These colleges break the mold in several ways, they operate for profit and so are subject to market forces, they give those who have not been identified as above average an opportunity, an opportunity that the traditional system didn’t and couldn’t care less to, and private college’s self interest is to expand production not limit it. Market forces will be an unstoppable power lowering costs and profits until either the market reaches perfect competition or the government steps in and imposes limits that block competition.

 

Some of the spurious arguments, the politicians in the pocket of academia claim, run the gamut of insane to devious. The one I always get a laugh at is, “The dropout rate is higher in private schools than public institutions.” This is absurd in that it denotes nothing. There is no context with which to weigh the sentence, which makes the argument float in meaning. Since the public institutions have the best students from the get go why wouldn’t they have a better graduation rate? Moreover, are they saying that the education at private schools is higher than that of the public institutions, since the public institutions graduate almost everyone who enters and private institutions only graduate those who merit it? Or perhaps the maker of that argument believes certain people shouldn’t even be given a chance? The sophistic echos go on and on.

 

It is not in the interests of those who run academia today to embrace change. In that change coming, their cushy jobs preaching socialism to the youth, while having sex with someone from every graduating class, being revered by other elite, and receiving much better than average pay, the incentives to keep the system in stasis are mighty. Perfect competition might lower the cost of education, so doctorates could be common, but the value of those doctorates would drop commensurately, as would the profit to those who dispensed them. The market would drive down cost and raise quality inexorably. The powers that exist have to get us to believe their spurious arguments because as Milton Friedman argued, When a business faces competition that has a better product at a lower cost, that business can lower it’s price and increase it’s quality, or it can go to government…

 

That was only one of many examples that can be cited as proof that we do indeed swim in a lake of sophistry. Today the question is irrelevant, but who the political patron is, is. Arguments that appear to be logical are actually twisting logic to make truth into a lie and a lie into the truth. We have a whole class of people who have practiced, honed and perfected this feat. It is up to us to rise above the smoke they obscure every controversy with, and be rational maximizers, weigh the costs, opportunities and risks for ourselves. Only in that way, can we truly vote and act in our own best interests, instead of someone else’s.

 

 

Sincerely,

 

John Pepin

 

Ignorance in the Information Age

Sunday, June 1st, 2014

 

 

Dear Friends,

 

They say we live in the “Information Age,” but it seems to me, we live in an Ignorance Age. We have access to heretofore unimagined volumes of information, we have the ability for very little money to put up a page and speak to the world, we can even create an app that improves the lot of Mankind and get rich. Yet in our most important duty we willingly remain ignorant. The suffrage is the only way we can protect our liberty and standard of living. Most everyone agrees about the importance of the vote, but in the US, the people feel so disenfranchised by the system, most of us don’t even bother to vote! The last few elections have been decided by 26% of the electorate! One quarter of the people eligible to cast a vote decided who we would have for President. One quarter of the people decided who would run Congress and who would serve on their local boards. We have access to all the information in the world, economics, politics and philosophy, yet we remain ignorant enough to have given up the power to hire and fire, to our and our children’s detriment.

 

What good is access if we don’t use it? There are egg producers who can legally advertize their eggs as coming from “free range” chickens. The chickens are supposed to have a better life because they were allowed to wander about the yard. When in fact all that is legally required, is for a door to be opened in the coop for a certain amount of time, if the chickens “feel” they would like to roam around they can. They never do… but that is irrelevant to the legal question of “Free Range.” We are no different than those chickens! We are allowed free range but we choose to stay in the coop.

 

The same holds true of voting. We have the Right to vote, yet so few of us use that Right it can be subverted by a faction, and we see that it has. That faction is the one that strenuously opposes any protection of that Right from fraud and abuse. They bigotedly accuse anyone who seeks to protect that fundamental Right as a hater or someone who wants to take away voting Rights. In this they show their hypocrisy, every instance of fraud disenfranchises 2 voters. and so are doing what they accuse others of. Since elections are decided by fewer and fewer people and the decisions are made by slimmer and slimmer margins, a tiny amount of fraud can turn an election, and we see that it has in the last few election cycles. Since the faction in charge is the beneficiary of the fraud they won’t do anything about it, so the only way to mitigate the pernicious damage to the moral of voters and disenfranchising voters with fraud, the only avenue open to us is to vote en masse. The greater the percentage of voters the less fraud can vex the outcomes.

 

What good is it to vote if we remain ignorant of the deeper issues making us easy to manipulate? Moreover, if we can be easily manipulated to vote for whomever the elite want us to, do we really have the suffrage? It is up to us to use that vast storehouse of information, while we can, to ferret out the truth. It is incumbent upon us to read and study economics. We live in a pseudo capitalist society and as such it is necessary for us to understand what makes the clockwork tick. Without that knowledge we cannot discern truth from fiction when the elite preach socialism to us. The history of Mankind is there for anyone to see. Plutarch’s Lives is free online, is the definitive work on human nature in situations of power, and should be read by everyone 18 and over. There is a new version of the Federalist Papers available for sale that is written in modern English or the original is available free online. The Federalist papers should be read by all US citizens.

 

With a bit more research a person can get up to snuff, on why we are in the predicament we are in for jobs, wages and liberty. Let’s become rational maximizers, by incorporating foundational knowledge, so that we can avoid being manipulated into voting against our best interests, we have to exercise our Right to vote, if only to limit the damage of vote fraud and ballot box stuffing since the elite won’t, and most of all we must stop acting like free range chickens. Now that the door is open we have to go through it and find out what is on the other side. To protect our Rights, save our Jobs and raise our wages. Willful ignorance in the information age is irony writ large.

 

 

Sincerely

 

John Pepin

 

 

 

Deflation and Deficit Spending

Monday, May 26th, 2014

 

Dear Friends,

 

It seems to me, the real reason economists, politicians and Central Bank Presidents are so terrified about deflation, has nothing to do with any pernicious incentives deflation would introduce into the economy, but actually because it would hamper the ability of governments the world over, to deficit spend. Deficit spending has become so entrenched in our political systems that most people don’t give it a thought, and when they do, they grumble but consider it a necessary evil. The ability to deficit spend gives politicians extraordinary power, over the economy, our lives and political evolution. The political elite exploit their ability to spend huge sums of money, to reward their political cronies aka crony capitalism, they “stimulate” the economy with deficit spending and they get and hold office, by promising this or that constituency a hand out if they get elected. All of which are pernicious and destructive of our economies, our Rights and our personal standard of living.

 

John Maynard Keynes aggregate supply aggregate demand model of economics gives politicians an imperative to deficit spend. In the aggregate demand aggregate supply model, if aggregate demand exceeds aggregate supply the economy grows, but if aggregate demand falls below aggregate supply then the economy shrinks, resulting in recession. Keynes made no distinction between consumer demand, business demand or government demand. In fact, he is famously known for saying, if the government buried money in the bottom of a mine, and let firms use the market system to get it out, that would stimulate the economy. This shows he made no distinction between productive uses of money, and schemes that use money to draw people into non productive actions, actions they otherwise wouldn’t engage in.

 

One of the fundamental reasons the aggregate supply aggregate demand model is deficient, is that it doesn’t make distinctions between productive spending, where productivity is increased by upgrading plant and equipment or where someone’s needs or wants are being met, and schemes where money is wasted to draw in other money, which is then also wasted, to increase aggregate demand. When government spends money to stimulate the economy, it takes money that otherwise would be used for productive purposes, and wastes it.

 

The more money that is wasted the lower real economic output will be. Every government today counts government spending as a part of Gross Domestic Product. Therefore, as they deficit spend to draw in other money to gin up the economy, using aggregate demand aggregate supply, the money that is wasted feeds a system where government must have more deficit spending, to offset the loss of market efficiency that is the inevitable result of government “stimulus.” In other words, government spending is increased, to increase GDP, where the market has been so damaged by deficit spending and stimulus, it cannot increase GDP itself. Where government doesn’t deficit spend sufficiently to raise GDP, outside of actual economic growth, economists call it fiscal headwinds.

 

Crony capitalism around the world is fueled by deficit spending. The political elite use it to reward their half witted brother in laws and political backers. In many countries it is impossible to get a permit to do business unless you have political backing. No one can get licensed in those countries to compete with the political hacks. If the power to deficit spend were limited, that would also limit the ability of the politically favored, to reward their backers and half wit relations, for their own illegitimate purposes.

 

The first goal of any political party is to get and hold power. Deficit spending allows the faction in power at any time to hold that power. Further, it allows that faction that is willing to damage the interests of society as a whole, by deficit spending, to get that power they so covet. This is a pernicious incentive for political factions each trying to out promise the other. The party offering the most rewards to the people will be the one to get and hold office. This has the tendency to ratchet up deficit spending to ever higher extremes while lowering outcomes. Simply because, that party which has the least scruples to protect the public purse is rewarded, while the party that practices the most fiduciary responsibility, is punished.

 

All of these things rely on deficit spending and deficit spending needs inflation. Inflation is a hidden tax on the accounts of savers. As a government’s deficit gets ever larger, if the value of the money that the deficit is counted in gets smaller, that deficit also shrinks. If however, the value of the money a deficit is counted in goes up, savers and consumers are rewarded, but government deficits become more problematical. Therefore, governments, central banks and their dependent economists cannot allow any deflation. Deflation would explode the huge deficits governments have built up over the years… to reward their cronies, buy power and “stimulate” the economy. Deflation would show in stark contrast the fiction that deficit spending can go on indefinitely and the system of political favor would come crashing down. Make no mistake, they couldn’t care less about the good to society, in fact the ability to deficit spend rewards those who care the least for the public good, so next time you see a central banker weep at the possibility of deflation remember, those are crocodile tears.

 

 

Sincerely,

 

John Pepin

 

Stagnationist Economic Policies

Thursday, May 22nd, 2014

 

Dear Friends,

 

It seems to me, we have learned nothing from the stagnationist policies that created the Great Depression, and so are repeating it. The policies that kept the US, and indeed the entire world, in recession for a decade led directly to the Second World War are being mirrored today, with the only exception being unprecedented monetizing of US debt by the Federal Reserve and aped by most of the rest of the economic powerhouses around the world. The economic stagnation has been only slightly mitigated by the flood of printed money flowing into the world’s economies, but the potential for economic disaster is greatly magnified. Had our economists learned a thing from their history books, they would be decrying the stagnationist policies of the US government, for causing such stagnation in the US economy and by extension the entire world’s. Our jobs, wages, retirement, children’s future and our very lives are all put at risk by the stagnationist policies of the US government.

 

When FDR was elected he ran on a platform similar to Calvin Coolidge’s laissez faire policies. Once Roosevelt gained power however he turned to the policies of Hoover instead. FDR increased regulation by orders of magnitude, just like Obama, taxes were raised by Roosevelt higher than they had been under Wilson, the same as Obama raised taxes on everything he could and is still raising taxes today, Roosevelt vilified business and the free market exactly like Obama has. The only place the policies of Roosevelt and Obama have differed are the price fixing that Roosevelt was so in favor of, and the money printing Obama has had the “benefit” of.

 

In US economic history there have only been three recessions that led to stagnation. The Great Depression, Stagflation of the 1970s and Obama’s New Normal. All of them had Progressive Presidents and all of those Presidents taxed, regulated and attacked the free market. They all poured sugar into the gas tank of the economy and then claimed the fault was the economy’s. All had a willing media to muddy the water so the American people couldn’t see what the real problems were. The policies of those three President’s, Roosevelt, Carter and Obama are the epitome of stagnationist.

 

Two of those periods of stagnation took the unseating of the President and new policies to be adopted to break the cycle of stagnation. Roosevelt’s Great Depression took the Second World War to shock the economy and the American people out of the malaise that builds up during extended periods of economic stagnation. When Roosevelt died and Truman took over, the policies of over taxation and regulation were backed off, and the economy roared to life. In the case of Jimmy Carter’s Stagflation, it took the laissez faire policies of Hayek, and put into action by Ronald Reagan, to get the economy going again. The economic rebound of the 1980s were in stark contrast to the economic malaise of Carter’s Stagflation. Obama’s New Normal is still underway and will take the removal of Obama and a wholesale overturning of his economic policies to get us and the rest of the world out of stagnation.

 

The Second World War was largely a result of the Great Depression. The economy was bad in the US but it was much worse in Germany under the Wiemar Republic. The blatant socialist policies fueled by money printing, coupled with the draconian reparations from the armistice of the First World War, destroyed Germany’s economy. The result was poverty, hopelessness and famine, which always leads to social unrest. In such a climate, the conditions are ripe for an autocrat to seize power, and in Germany in the 1930′s one did. Adolph Hitler used his Brown Shirts to distribute food to the hungry, medicine to the ill and hope to the hopeless, (just like Caesar did a few centuries earlier). This gained him the good will of the masses and they ignorantly flooded to him. The people of Germany didn’t take seriously Hitler’s rhetoric about world conquest, they only saw the fattened faces of their children. The result was the war and all the misery it visited upon the world and Germany.

 

The conditions are becoming ripe for a replay of that tragic war because of the stagnationist economic policies of Obama and the world’s leaders. The policies of Obama, like Obama care, eliminating tax deductions to businesses for plant and tool upgrades and burdensome regulations that make it impossible to make a profit, unless the firm has political favor and doesn’t have to compete in the marketplace and instead get’s it’s profits from the taxpayer… the list goes on and on. These are all stagnationist policies similar to Carter’s and Roosevelt’s. Stagnationist policies always lead to stagnation and stagnation always leads to social unrest. In a climate of social unrest the conditions are ripe for a maniac to seize power. Where the next psychopath will rise is only known to God, but that one will unless we change our path, is certain. With the proliferation of weapons of mass destruction the next world war will make the last look like a walk in the park. So, isn’t it time to stop the stagnationist policies, and return to economic policies that lead to growth instead?

 

 

Sincerely,

 

John Pepin

 

Our Lack of Outrage

Monday, May 19th, 2014

 

Dear Friends,

 

It seems to me, I wouldn’t be surprised to find out the US, or any other government, is placing subliminal messages to conform and obey in the media. I am not saying they are, or that they have any plans to manipulate us in that manner, I sincerely hope not! I am saying that if I found out they were, I would not be shocked or surprised, and neither would anyone else. That is the problem, no one would be surprised or even outraged if such a thing were going on, considering the out of control actions the US and other governments have been caught in. What a sad statement on the level of corruption in our governments isn’t it? After all we were only slightly outraged at the NSA spying program that gets worse every day as the diabolical reality of it comes out in dribs and drabs. We have become so accustomed to our governments lying to us, conniving to take our stuff and stepping on our human rights, we have become calloused. That is a big problem, because it shows how far our governments have moved away from acting in the interests of us all, and to acting only in the interests of politically favored groups.

 

In Nicomachean Ethics, Aristotle defined right forms of government and wrong forms of government. The attribute the right forms had in common was that they all sought to benefit the interests of the whole nation state or in his time the city state. What the wrong forms had in common was that they only sought to benefit the ruler’s interests. History shows us all too clearly that the latter is more common than the former. Most nations have been ruled by connivers who only have their own best interests at heart. The rest of us are merely tools to be exploited to get what the political elite want.

 

This paradigm has only been overturned a few times in history and has never lasted long. Those few times are illustrative of what a nation can achieve, when the leaders seek the benefit of the whole of society, instead of one or two politically favored segments. Rome in her Republican years was given wealth, freedom and military prowess. Before she became corrupted by the intercine fighting manifested by Marius and Sulla, she never invaded a neighbor, but only met force with force. There have been times in most countries around the world where this was the case. In every instance, where those nations who were blessed with rulers who ruled for the benefit of all of the people, those nations were also blessed with prosperity and freedom. History in unambiguous on this point.

 

History is also adamant that those nations who were cursed with selfish rulers who ruled for their own egoistic self interest have been damned with poverty, famine, war and tyranny. As the rulers get more selfish the fortunes of those states diminishes. They keep falling until the government is overturned from within or from without. There is not one instance in history where a nation state or city state was virtuous and was demolished. In every case, invasion or revolution, the state itself had become so corroded by corruption, cronyism and political favor, that a fall became inevitable.

 

In the very best cases of virtuous government, where the state ruled for everyone’s interests, the leaders lead by example. If they wanted the people to be less greedy they eschewed avarice themselves, where they wanted the people to be more industrious the rulers worked harder themselves, and where the governors wanted the people to have fidelity to the state, the leaders were more dutiful to the people. This is an example of self interest rightly understood. When people are given good role models in the form of virtuous leaders the people become virtuous themselves. The same is true when our leaders are corrupt, we follow them into corruption. It is human nature.

 

Today we live in societies so corrupted by our leaders that we don’t bat an eye when we hear a politician was caught in anything. We have become so jaded by the trampling of our rights and our constitutions that we wouldn’t be shocked to find out our politicians are using mind control on us. Our governors have so exploited, manipulated and lied to us, we merely rolled our eyes when we found out our government was sending weapons to drug lords and blaming it on honest gun dealers, we are not outraged when we discover our President lied to our faces about our very healthcare, we are sanguine when we learn an ambassador was left to die by our government to cover up arms dealing with our existential enemy, and not even slightly worried when we are told our government targeted people for audits and additional IRS scrutiny based on their political affiliations! Our leaders have so corrupted our governments by narrow self interested egoism, they have become in fact and in definition, the wrong forms that Aristotle talked about. The proof is in our lack of outrage at an ever increasing tsunami of corruption, cronyism and incursions on our basic rights. This can only lead to violent upheaval. Isn’t it time to be outraged, and demand our leaders follow their own laws, our constitutions and simple morality?

 

 

Sincerely,

 

John Pepin

 

Crying Wolf

Thursday, May 15th, 2014

 

Dear Friends,

 

It seems to me, the elite should relearn the old fable of the Boy Who Cried Wolf, else they run the risk of falling into that trap. Name calling is such a fall back position of the new class that it has become knee jerk. Anyone who disagrees with those who overtly seek to bring on a Brave new world, or the alternative 1984 George Orwell, are called racists. The term has been so overused it has lost much of the punch it should have. The elite pretend to be above bigotry while they are in fact the biggest racists there are. Their heroes are, to a man and woman, evil people who are the epitome of bigots, while they ignore their own roots and personal feelings, they point their filthy finger at others never thinking that three fingers are pointed back at them. This would be comical except that the world our children will live in is profoundly effected by their socialist policies.

 

The fable of the Boy Who Cried Wolf is simple. A shepherd boy was watching his flock and was bored. He thought to himself, “If I run into town and cry wolf the townspeople will run here and it will be fun.” So he ran into town crying, “Wolf! There is a wolf after the sheep.” the townspeople ran to the fields and found no wolf but the little boy laughing at the gullibility of the townsfolk. They trudged back to their duties. Awhile later, the boy came back shouting, “Wolf, there really is a wolf now!” The people dropped whatever they were doing, running into the field only to find the boy laughing even harder this time. Exasperated the townspeople walked back to town. Later chuckling to himself the little boy saw a real wolf. The wolf killed a ram. The little boy ran into town yelling, “Wolf! There really is a wolf this time! Please help!” The townspeople laughed and went back to work. No matter how the boy cried and cajoled the people they wouldn’t come help. When the boy returned alone to fight the wolf, his flock they were all dead, and it killed him.

 

The elite have been crying wolf for so long people barely even look up unless they have a political reason to promote the fiction. This is all well and good but it gives actual racists a pass. Like the New Jersey Representative (a Democrat), who was caught saying her city would become an “N” word town. Even our President, Barack Obama, has made racists remarks when he called his grandmother, “a typical white person,” that statement would have destroyed a conservative had he or she said it. Obama derided White Americans as, “bitter people clinging to their guns and religion.” Imagine if a Tea Party member were caught saying that about African Americans, Muslims or Latinos! The media would claim that proves all Tea Party members are racists… but calling all Tea Party people racists, is itself bigoted. The definition of bigotry is to hold all members of a group as having the same characteristics. By this definition, grouping people is itself bigoted… and what political faction favors grouping people? When the unbiased media are faced with real racism and bigotry by the new class, they turn a blind eye, because it doesn’t forward their agenda.

 

The heroes of the progressives are uniformly racists of the most despicable order. Woodrow Wilson openly avowed racial and sexist remarks that would make even Adolf Hitler shudder. Margaret Sanger, the founder of Planned Parenthood, wanted abortion as a means to exterminate blacks! World depopulation is a theme of the progressives the world over. The Georgia Guide stones openly say it. They want to kill nine tenths of the human population lowering our numbers to five hundred million. Do you suppose they mean to kill themselves or their own children? No, they mean to kill those people who don’t conform, to their vision of the perfect people. Do you suppose that could include races they consider, lesser?

 

We live in a time where logical debate about facts and outcomes has given weigh to circular reasoning about who is a bigot and who is not. The bigots are the ones who claim victim hood while those of us trying to have a conversation are labeled with epithets more suited to Margret Sanger, Woodrow Wilson and even Barack Obama. The elite cry racist whenever they are met with a question they cannot answer while they drag us into their dark vision of a Brave new world. In the movie or the book by Aldus Huxley, did you notice any Asians, American Indians, or Latinos? No, of course not, they were to be excluded from that nightmarish vision of the new class. Ad homonym attacks and name calling, belong on the playground of ignorant children’s taunting, not in our political debate. Crying wolf only lowers us to the intellectual level of children and is as dangerous today as when that fable was written.

 

 

Sincerely,

 

John Pepin