Archive for the ‘philosophy’ Category

Radical measures to Improve the Economy

Thursday, June 25th, 2015

Dear Friends,

It seems to me, if you want a car to go faster, it is not a good strategy to push harder on the brakes. Our political elite strongly disagree with me however. They believe with all their hearts that the harder you push the brakes the faster the economy will go. They claim they want more jobs and a faster growing economy, and then say with all earnestness, that to get that result they will push even harder on the economic brakes. Sadly, the result is always a slower growing economy, less jobs and lower wages. To the political elite, this is a conundrum that is unsolvable, it is the Gordian knot of economics. I would like to suggest that perhaps, just perhaps, instead of pushing ever harder on the brakes, it might be a sound strategy to lift up on the brakes and maybe even push the accelerator a bit.

The new class elite say they want higher wages, more jobs and a faster growing economy in every speech, talk and seminar they produce. They go on and on about income inequality, stagnant wages, the evil rich, unfairness of capitalism, social justice, etc… Yet every policy they enact only makes the problems, they so hate, get worse? One must wonder how it is that such good intentions always seem to come to naught? Maybe because the policies they enact are always the same… pushing the brakes on the economy.

Higher regulations is their fall back position. They believe that increasing the friction of regulations in an economy will make that economy grow faster, create more and better paying jobs as well as level the playing field for those trying to get ahead. In fact if you or anyone else brings up the idea that maybe, just maybe regulations are too high, the new class elite will chuckle, look at you like a child who believes in Santa, and tell us the economy must have regulations… everyone knows that. Besides, the dire threat of global warming must be stopped by regulations! They have bought and paid for “scientists” that prove it every day. Therefore then push harder on the regulatory brakes with both feet.

The new class love to raise taxes. The answer to every economic, social and political problem is the brave policy of raising taxes. What courageous people the new class are. In the face of us ignorant fools, the new class elite ratchet up our tax burden to help create more and better employment, but they are only doing it for us. They see government spending as the solution to every problem that has ever plagued mankind since we emerged from caves. If only the hoi polloi was as enlightened as the elite, we would also see that taking ever more of our money and throwing it down the rabbit hole of government spending, helps us far more than if we were allowed to keep the money we earn… and so they raise taxes, every year in any way they can, pushing ever harder on the taxation brake with their whole body.

The new class believes that vilifying those who create jobs will to lower the unemployment rate. Listen to any rich new class elitist and they will assure you that the problem is those evil rich people. Not the one speaking of course! Heavens no! It is the fault of all those other rich people, you know, the ones starting businesses and investing their money in the economy, certainly not those who got rich in politics, or old money that sustains the trust fund class. Any progressive will look you in the eye and with a tear in his eye lament your problems, that are because someone is trying to get rich by starting a company, hiring people and adding value to the economy. If you don’t agree then it is just because you are too simple to grasp the intricacies of their policies. So they crush the brakes on entrepreneurs as hard as they can.

Could I offer a different strategy? Maybe instead of pushing down ever harder on the economic brakes, to get a stronger faster growing economy, it might behoove us if the elite lifted their foot from the throat of the economy and allowed it to get some air, maybe even pushed down a bit on the accelerator? I know that is a radical concept, and most any politician who the new class agree with will agree that is an extremely radical position to take, but since pushing harder on the economic brakes has only slowed the economy, radical measures should be considered. Radical measures like, lifting up the foot from the regulatory brake, easing up on the tax burden or maybe cheering those who start businesses and employ people. I know, I know, such talk is like saying water flows down hill, horses have four legs, fish swim in water or that the Earth is round… absurd to the utmost. Or perhaps, the new class elite know their policies of pushing harder on the economic brakes will slow the economy, and therefore they really don’t want a fast growing economy, creating lots of good jobs and higher wages, in spite of their rhetoric? Or is that too extreme to say?


John Pepin

On The Reaction to the Church Attack…

Monday, June 22nd, 2015

Dear Friends,

It seems to me, if we apply the logic of those who seek to disarm the people, to the actions of government, then to be consistent they would have to agree governments must be limited. Unfortunately the progressives, socialists and Marxists are not consistent. They stand on the graves of victims of random violence, deploring that violence, and call for a situation where the probability of extreme, organized violence, despotism and crimes against humanity… are all but certain. Anyone who has even the most elementary grasp of human history knows, the violence perpetrated by the state against people, it’s own and others, is orders of magnitude greater and more horrendous than all the murders done by random lunatics. Moreover, that violence has been organized and systematic, making it all the worse. In other words, to follow the advice of those who decry gun violence and follow their prescriptions to stop it, would visit exponentially more atrocities on humanity. They seek to solve a bloody nose by putting a tourniquet around the neck of humanity.

Those who constantly lament the availability of guns to the people, are the same ones who seek to arm every branch of government to the hilt, they approve of seeding the civil police with weapons of war, their theme is that more and better armed government along with less and less transparency is desirable at every turn, in this they are consistent. The gun grabbers stand on the graves of innocent women and children, to propose a system where systematic, organized violence to the extreme becomes inevitable. To say they are merely ignorant or stupid, is to be kind, because they are the most schooled among us, and openly claim that mantle.

History shows that government is always the biggest threat to humanity there is. There is not one example of a despotism that has not visited organized violence on some faction of society. Be it a politically disfavored faction or a despised race the pattern is unchanging. Government, by it’s very nature becomes ever more powerful, pulling in more and more resources until it becomes a leviathan, by that time it becomes psychopathic, and begins slaughtering huge portions of it’s own population, else it starts wars that dislocate huge numbers of innocent people, wound, maim and kill giant swaths of humanity and eventually burn up in revolution, taking even more people to their deaths. That has been the pattern of human government forever.

Those that seek to disarm the people, logically, seek to arm government against the people. They claim to be against violence but a look at their policies and goals show a very different story. They argue that the Right to keep and bear arms is too dangerous for the people and so it must be limited. They will get red faced when their real goal is thrown in their faces… to make all gun ownership illegal, thereby ensuring the superiority of armament of the government over and against the people. No matter how many gun laws are on the books they will call for more until guns are totally illegal. Which shows how truly despicable they are. The inconsistencies of their logic is astounding to anyone who actually thinks about it.

If the Right to keep and bear arms is too dangerous, and therefore must be limited, then what is the precedent they are setting? That a Right that is dangerous should be taken away! What a slippery slope that is! To bring that argument to it’s logical conclusion, the Right of free speech is far more dangerous than the Right to keep and bear arms! A progressive lunatic setting in a German beer hall wrote a book that directly led to the slaughter of over 60 million human beings. No amount of deranged gunmen could ever get near that number. Karl Marx wrote the Manifesto, a book that to date has resulted in mass slaughter, forced famine, sterilization, torture, systematic murder and outright extermination of well over 100 million human beings. It should not be lost on the reader that the progressive philosophy of those who call for limiting gun Rights is identical to that of Hitler and Marx.

Today, politicians trod the graves of innocent victims in the most despicable fashion, calling for limits to the Rights of law abiding citizens to defend themselves from a despotic government. By doing so, they show their utter contempt for the victims, to exploit their untimely deaths for political gain. To say they are merely ignorant or stupid is to be ignorant and stupid. The callousness of politicians who seek total superiority of armament of government over the people, coupled with their stated philosophy, a philosophy that has visited such carnage on the human race, shows their true nature. That nature is evil incarnate, to want a system where organized violence cannot be suppressed by the people is nothing but sinister. That their predecessors did the same thing, made the same arguments, and once implemented have always resulted in untold agony for millions of people, people like you and I, shows the diabolical nature of them and their arguments. Of course, it may not turn out that way this time, but then again, you could jump off a twenty story building and land on the street unscathed… but I wouldn’t bet my life on it. It is true however, that a tourniquet is a sure way to stop a bloody nose.


John Pepin

Quality of Mercy in a Tyranny

Thursday, June 18th, 2015

Dear Friends,

It seems to me, the quality of mercy of our rulers is hard and sharp, but they expect and demand from us a soft and easy mercy, this is the way of a despot and not a human hearted legislator. The adage, “Ignorance is no excuse under the law…” speaks to this truism, in that those of us who don’t write law and have only a very limited access to knowledge of the law, are held to every word and letter, but those who write law, adjudicate law and enforce law, have as a ready excuse ignorance, as a means to escape the punishments of the law. Moreover, the law grows like a Kudzu vine smothering every human endeavor with strings that bind, so that we need permission from our rulers to do anything, yet they have total freedom of action, even to the point of scoffing at our calling for Constitutional limits. This has become so pervasive, even a blind and deaf man could see and hear there is despotism, while the “learned and wise” claim there is ever greater liberty because in our society today, perversions are rife.

I say “rulers” because those who hold elected office are no longer republican in spirit, polity in action or human hearted in mind, they rule us as Dionysus did Syracuse. When a legislator is above the law, they are no longer a representative but a ruler in definition even if they call themselves a representative. Like in the days of Rome after the republic ceased to exist, the Praetorian guard and emperor called Rome a republic but like today, to call the Roman empire or Western civilization a republic is like calling a fish a bird, calling it so does not make the fish able to fly nor does the name change the nature of the object.

Mercy is no longer in the vernacular of government the term they like to use is justice while justice is the last thing they seek. Thrasymachus said it best that the “great men” in society are not just and should not be just, they should only claim to be just as a means of controlling the “little people” who only seek to live their lives in peace. Thrasymachus’ great men are the equivalent of our senators, Presidents and judges, they seek to appear just but in reality are not just. This is because justice requires as a prerequisite, mercy. Justice without mercy is not justice but injustice. In other words, justice is an objective good, not a subjective one, our rulers have made justice a subjective good.

Our rulers are daily caught in one scandal or another, when they are, a careful examination of their every excuse is ignorance of the law, and their ignorance requires from us mercy. President Obama claims ignorance of scandal, ignorance of the law and ignorance of our Constitution almost every day. Since he is ignorant of the law we are supposed, and many of us do, forgive his transgressions in supplying arms to Mexican drug lords and Islamic terrorists. When he claimed he learned about this or that scandal from the papers as the rest of us did, he is claiming ignorance of what is going on in his administration and when he calls for us to relinquish our Constitutional Rights for political expediency he is claiming ignorance of our founding ethos. His calls to ignorance are met by our mercy.

If you or I were caught breaking whatever arcane regulation however, no matter how esoteric or absurd, we are held to that regulation by the full weight of the government, no mercy and no quarter is given us. Encroach a newly defined wetland and face severe punishment, ignorance is no excuse for us, but it is a perfectly valid excuse for them. When Tim Giethner and Charlie Rangle were caught chiseling on their taxes they claimed ignorance, you or I would have faced penalization for far less. Hillary Clinton claimed ignorance about the Benghazi terrorist attack on the anniversary of 911, having a private e server for her government emails, FBI records in her possession among a host of other crimes you or I would face jail time for, but was given the mercy she denies you and I. Bernie Sanders claimed ignorance when he became embroiled in the House Banking scandal weeks after his election into that office… the list is endless of examples where the elite claimed ignorance of the law and were given the mercy they deny us.

Growing law and our increasing ignorance of it diminishes our liberty wearing it away like water erodes salt. Every day more regulations are written outside the Constitutionally prescribed means in the dark of the bureaucracy and laws are passed without our rulers even reading them. Darkness is rapidly descending on our government and conceals it’s workings more every day. Today it is impossible for anyone to know all the laws, regulations and ordinances we are subject to but we are held to them by an iron fist, and everyone knows and iron fist lacks mercy, it is naked power.

When a people are held to the law, while the lawgivers are not, it is absurd to claim the people live in liberty. Call it what you will but naming a fish a bird does not make it so, their natures are vastly different. Moreover, to call despotism liberty is merely a Machiavellian scheme to create a system of injustice by deceit. The fact is further proven by the fact our rulers demand our mercy for their ignorance without reciprocal mercy given us for ours, despite the fact they pass the law and we are increasingly kept in the dark of it. When a people are subject to laws they not allowed of know, while those that make the laws are not, in a system where mercy is only given the the elite and the people are denied mercy, when justice is for appearances not universal… the darkness of despotism has covered the land, regardless what it is called. It can be said that the quality of mercy is hard and sharp…


John Pepin

Stupid Capitalism

Tuesday, June 16th, 2015

Dear Friends,

It seems to me, when a company makes it difficult to purchase their services or products, it is clear those that run the company are either stupid or want it to go bankrupt. AT&T is one example. I challenge you to call the 800 number they advertise and purchase new service. After an hour or so in the voice response maze, with no way to talk to a human being, out of frustration you and most people, will give up and buy the services of a competitor. Companies that make it nearly impossible to purchase their products and services are not only abusing the customer and their employees but the shareholders as well. This is another example of the principle agent dilemma. Sadly, AT&T is not the only company that does this.

People work hard for their money, those that forgo instant gratification to put some away and invest in companies like AT&T, reasonably seek a return on their hard earned money. Those who run the companies however, look to maximize instant profits, (which maximize the bonuses of upper management, (the new class)), at the cost to the shareholders, (the bourgeois). In this case the virtuous behavior of the shareholders is rewarded with the villainy of their agents. AT&T is no longer the company it once was, perhaps a bit of history would help to enlighten the reader of how pernicious the incentives are for the new class.

In 1984 Judge Greene broke up the Phone company, (AT&T and Western Electric) into the “Baby Bells” as well as AT&T. The Baby bells took over the plant, Central offices, pole lines etc… while AT&T got the most profitable lines of business, Telephone sets, Business telephone systems, bell labs, long distance and the burgeoning computer end of the business. AT&T was also offered the Internet, which the new class that manage the business flatly refused. Management decided that while all the lines of business were profitable, long distance was the most profitable and required the least employees, so they began laying off their employees and shutting down every other line of business to focus on the highly profitable long distance. Back then it cost as much as fifty cents a minute to make a long distance call!

They got out of computers just at the start of the computer revolution, forgoing the tremendous profits they could have had, they flushed the telephone set business down the toilet leaving that line of business to foreign competitors, they mismanaged Bell Labs and walked away from the potentially highly profitable business of telephone systems. They laid off all their employees in those lines of business and gave themselves huge bonuses for it. At every turn they heartlessly eliminated jobs to cut the cost of doing business as they eliminated lines of business. The result? Once AT&T faced competition from Sprint, MCI and a host of others, the competition ruthlessly drove down the profitability of long distance to rock bottom driving AT&T out of business. The employees lost their jobs and the shareholders were ruined. Upper management however got golden parachutes and landed on their feet. The name AT&T was bought by a baby bell, Southern Bell, or SBC.

At one time Verizon offered a product called ISDN. It predated modern asynchronous DSL. It was only marginally profitable however, so upper management decided they didn’t want to sell it, preferring to sell the more profitable T1 service, so they made it hard to get and put in intentional problems making the service difficult to install. Today, it would seem, the same mindset prevails at the upper echelons of AT&T. They are not alone in the short sighted, company ruining, group think, Fairpoint is leading the charge to flush out marginally profitable lines of business. Residential phone service is considered a looser by those managers who seek huge profits without any employees. Maybe that is why they they make it so difficult to purchase their services and refuse to offer services people are knocking down the door to buy.

We all know the effect of the Internet, in fact, you are reading this article on the Internet. For the internet to work however there must be a high speed access to as many households as possible. The demand for high speed access is stupendous and is growing. Some claim over the air is the answer, but anyone who knows the limitations of radio, know that will only be a stop gap measure. Fiber to the premises is the product that will eventually win out. Verizon offers fiber to the premises in a few places and the product is amazing. AT&T refuses to place the fiber necessary to implement the product however, and is abandoning that product, (and the profits) to it’s competitors, as is Fairpoint and a host of other baby bells.

Here is where flushing marginally profitable lines of business is absurd, wire line telephone services are an in to the customer who seeks high speed internet service. Such services as wire line could be considered a loss leader… something a firm sells at a loss, to get customers to buy more profitable products. A lumber store might sell two by fours at a loss to pull in home builders who will later buy the more profitable windows and doors. Plain old telephone service, (POTS), could be that loss leader, pulling in customers who will later purchase fiber to the premises. Those who run companies like AT&T, Fairpoint and other baby bells don’t see it that way. Instead of building for the future, and playing to win, they are playing to lose. Albeit, to lose as slowly as possible, but when you play to loose the loss is guaranteed. But don’t worry, those that ruin the firm will land on their feet, as they always do, those that will take it on the chin are the employees, customers and especially the shareholders… as we always do.


John Pepin

Corporate Attitude Flows From the Top Down

Friday, June 12th, 2015

Dear Friends,

It seems to me, the attitude towards customers shown by the lowest employee in a company, is a direct effect of the leadership of that company. Take Best Western and United airline for examples. They are both in the service industries, they both cater to travelers and as a result both are customer oriented. One, United, is an airline, the other Best Western is a hotel chain. In all human groups the leader sets the example which the people, employees in this case, follow. It should seem obvious to anyone that the attitude of the leadership transmits to the lowest leve of an organization, but sadly, this truism is lost on many if not most in the new class. This has profound implications for those of us who invest our hard money.

That people follow their leaders was a major tenet of Confucius’s philosophy. He of course was teaching about the people following their leaders into corruption but the paradigm holds true for any aspect of a group of human beings. It is innate to humanity that the leadership leads the followers, in both orders, attitude and intention. When the leadership of a company holds that the customers are the enemy that attitude will permeate every corner of that company. The opposite holds true as well, when the leadership of a company values their customers that attitude will also permeate a comapny.

I recently flew United airlines. That trip was a disaster from stem to cudgel. United apperently forgot to schedule a flight crew and so stranded me for a day. The only person I met that worked for United that was not rude was a manager in that airport. Other than that man the rest of the employees were rude, incompetent and actually seemed to relish in annoying the customers. The second day was even worse than the first. Suffice it to say I will never fly United again. Without question the attitude towards customers at United is that the customer is the enemy. Had I owned any United stock I would have sold it the moment the market opened Monday.

On a more recent trip I stayed at several Best Western hotels. The employees were kind, helpful and courteous. The company allowed my pet to stay and offered a well prepared breakfast. Today people travel with their pets more and more. Such bending to the customer’s needs is a sign that the company takes it’s customer’s needs seriously. Other than a finicky Wi Fi… he experience was uniformly good. Clearly the attitude towards customers at Best Western is that the customer is king. I am considering buying stock of the company that runs Best Western.

If top management of a company has no consideration of it’s customers how much less to their employees? When a company treats their employees horribly how well do you suppose it will treat their customers? Both speak to the attitude of the new class management to other human beings. Companies are built upon a foundation of care for our fellow man as such those companies that are considerate of their employees will probably care for their customers and visa versa.

Of course these examples are anecdotal, but empirical evidence is always based on a piling up of anecdotal evidence. The attitude of the top management of all companies is reflected in their employees. That attitude, either of enmity or care, flow from the top down and colors every decision every employee makes. Since the profits of a company are based on it’s customers perception of value, except in the case of monopoly, the corporate attitude is reflective of the potential longevity of a company. It’s business model, whether to fail or to succeed, is the impression the customers get when they use the services of that company… so when looking to invest your hard earned dollars, look to a company that serves it’s customers well, provides value and treats their employees well and you will be well served by your investments.


John Pepin

Do You Hate the Rich?

Thursday, June 4th, 2015

Dear Friends,

It seems to me, The social contract between those that run our societies, the elite, and the rest of us, has been broken by the elite. The elite have become an oligarchy, the wrong form of aristocracy, and as a result, the average Joe is livid, but doesn’t know what he or she is livid about. Our ignorance allows the elite to manipulate us into doing damage to our own interests while enhancing theirs, which further infuriates us, making it easier to manipulate us… This is why so many people hate the “rich.” Many of us see “the rich” as the problem, but sadly, that is exactly what the manipulators want! We play into their hands when they call for more taxes, regulations and limits on “the rich,” The “rich” never actually get those higher taxes, regulations or limits, we get them instead, which further lowers our standard of living, infuriating us even more…

The contract between the elite in any society and the rest of the people, is the leader gets the best, but has responsibilities for those perks. That is why the chief of a hunter gatherer tribe gets the best meat, his choice of huts, etc… He is the biggest and strongest man in the tribe and if there is a war between tribes, he is expected to lead the other men into battle, at risk to his own life. If a wild animal attacks the tribe, he is expected to fend it off. Those perks of leadership come with responsibilities, those responsibilities are why he gets the extra benefits. That is the paradigm in all human societies everywhere and at every time. The elite get the lion’s share of the goods of society but have responsibilities to the rest for those perks. They don’t come free!

When the social contract between the elite and the people functions, no one has a problem with the tribal chief getting first pick of the meat. When the Chief gets the first pick of the meat, but runs at the first sight of danger, allowing others to die due to his lack of bravery, he quickly becomes loathed. Why should he get the first pick if he doesn’t meet his responsibilities? People get a visceral hatred of him. That is the place our society has got, the elite don’t meet their responsibilities. Instead, they throw the rest of us under the bus at the first sign of trouble, they never lead by example, they protect their interests at the cost to society’s interests, in short they expect us to hold up our end of the contract with no intention of them doing their part. They have broken the contract and so we hold them in utter contempt. The modern elite want those perks for free.

People know it, even if most of us cannot put it into words. So, when some affluent member of the elite calls for more taxes on “the rich,” many people stand and cheer, when an out of control elite politician tells us he or she will control “the rich” with regulations many hold up their fists in support and when a multi millionaire socialist shouts the government must seize the assets of “the rich,” many people rush to the exits to get a share. The actual rich elite never get those higher taxes, regulations or have their assets seized, that os for the people, the non elite. Again, the elite avoid fulfilling their role in the contract and manipulate the people into forwarding an agenda that is counter to the people’s interests, by shirking their responsibility.

When Warren Buffett went on national television, announcing his secretary was paying a higher tax rate than him, there was outrage. The elite solved the problem by raising his secretary’s taxes more, and giving Warren Buffett a billion dollar kickback by vetoing the Keystone Pipeline. That evil oil is still getting to Texas refineries, but on Warren Buffetts trains! Who cares about the added danger of transporting oil by train, Lac Magantic be damned, or the additional cost. In the case of Warren Buffett’s train windfall, courtesy of the US government, he was rewarded for being instrumental in manipulating the people into calling for higher taxes… on themselves! We were made chumps!

Because the actual rich, the elite who are moguls, wield political power and control the means of production, only seek to keep the rest of us down. Joesph Schumpeter argued, the moment someone gets rich, they immediately turn around and close the door behind them. Today the new class, the intelligentsia, control the means of production, have taken the lion’s share of profits, and are the power behind the government, but have abdicated their responsibility to ensure wages grow, the standard of living increases and liberty is maintained. Instead, they work to lower wages at every opportunity with unlimited immigration, enacting by law the Malthusian idea, wages can never grow because there will always be more workers than jobs, they raise taxes on “the rich” but the rich never pay those higher taxes, only those trying to get rich pay them, (you and I) and the elite squander our resources while protecting theirs.

Have you ever wondered why when the tax rate on millionaires was ninety percent in the US, the number of millionaires didn’t go down, only the number of new millionaires did? It was because the elite were using their political power to keep people from getting rich. Holding the rest of us down to protect themselves from competition. By doing so they abdicated their responsibilities to us and society for their own gain. Then they blame the nebulous “rich,” for all the troubles we face because of their shirking their responsibility.

We are angry because we know a scam is being played on us. Most of us, only understand the power contract in human affairs on a gut level, and so can be manipulated by the elite to act against their own interests. I for one, don’t care at all how much a factory worker gets paid, in fact, the more she makes the better, in my view. If a factory worker gets one million dollars an hour, that is no skin off my nose, if an entrepreneur becomes a multi billionaire, I cheer for him, or is an inventor gets millions and acclaim, I am ecstatic for her. When a CEO makes tens or hundreds of millions of dollars a year in bonus’s, wages and perks, while at the same time, making chumps of the shareholders, screwing the workers and poking the customers in the eye, forcing his political, religious and social perspective down the rest of our throats, I become irate. He has avoided his responsibility, the responsibility that comes with those perks to run the company for the interests of the shareholders, provide value to customers and pay good wages to the employees, and that is unacceptable.

Beware of falling for the trap that calls you and I the rich, and thus degrades our standard of living, with our acquiescence. Aim your anger where it belongs, at the new class who shirk their responsibilities, while feeling entitled to the perks they get. Demand they live up to their end of the contract! Else fall for the illusion and become a slave.


John Pepin

Lawless Government

Sunday, May 31st, 2015

Dear Friends,

It seems to me that the US government has become utterly lawless. We the people are supposed to follow all rightly constituted laws, passed by the legislative branch and unless overridden by the congress, signed by our President. Our government is supposed to follow, to the letter, our Constitution, the contract between the governed and the governors, strictly enumerating the power we give up to government, to ensure our property is secure, establish standards, and control criminal behavior as well as protecting us from foreign powers. The US government increasingly seeks to control every aspect of human behavior, while at the same time totally ignoring, not only the intent of our Constitution and it’s limits on government, but are now actively urinating on the text. Examples abound, from their abdication of both tenets of the First Amendment, the total destruction of the second amendment, government living by rapine, we are no longer safe in our personal papers, government can seize any of our property at any time, to the crushing of State’s Rights in every way possible. To make the system work, increasing amounts of violence must be used against us, even as we behold our government ignoring the basic rules they are supposed to follow. We stand naked before government while they hide behind a wall of guns, woven together with red tape, aimed at us.

Fail to follow any arcane regulation, law or ordinance and the full weight of the US government will fall on you. Disagree? Try withholding taxes because they go to something you are morally against, like funding abortions, and see if armed men don’t come to your door and arrest you. We are held to the highest standard possible, to the point of being monitored by camera while driving down the street, our emails are scanned and saved on some government computer in Utah, our homes are peered into by the government with infrared and other sensors, our computers can be seized at any time, banks record our cash transactions and send them to the government, our credit card transactions are available to government for any purpose, etc… Every aspect of our lives is open to our government, but our government hides even the most mundane things from us.

The recent internet regulation was hidden, and even now that we are supposed to follow it, most of it’s intricacies are covered in arcane wording and red tape. Despite being called Net Neutrality, it does the exact opposite it was billed as. It creates a market web which players pay to play and the old internet which is free, so I ask you, which will get the funding? The one where companies can make a profit, (and is regulated as to their content and political correctness)… or the one where financial loss is guaranteed but is open to anyone to say anything? I submit to you, Net neutrality was and is designed to wither the open internet on the vine, creating a system where government can increasingly control the flow of information.

The Amendments are ignored and given less and less lip service every day that passes. If you are stopped by a police officer, make the mistake of talking to him or her, and you are carrying cash, they can simply take that cash, your life savings perhaps, and you are out of luck. How is that different from a highwayman? Moreover, it is a direct violation of the Fourth Amendment, but isn’t the only violation of the Fourth Amendment by far. Your church may be forced to provide abortions, pay for blasphemous art, limit what they teach or marry gay couples. You are limited in your speech in a myriad of ways, all the government has to do is label whatever you say as “hate speech,” or you as an “extremist” and you are now a criminal subject to prosecution… which are blatant violations of the First Amendment.

The Second Amendment has been eviscerated. Today States pass whatever law restricting our Right to keep and bare arms they want without a peep from the Judicial branch. The right of the People to keep and bear arms shall not be infringed… seems simple enough to understand, but the learned members of the new class have a hard time understanding what infringed means. It is no coincidence that those places where guns are outlawed, have the highest violent crime rates, the highest murder rates, and the most government tyranny as well. Look at Chicago’s murder rate, violent crime rate, and secret prison for example.

The interstate commerce clause has been so perverted government can regulate every and any aspect of your life. That perversion is based on Wickard v Filburn. In that case, (which still stands), the government can force you to plow under crops you are growing for your own consumption! Because you won’t buy that food on the open market and therefore effects the prices of food across state lines. In other words, the government has the power, as yet unused, to regulate you and your family to starve to death! Now, I can hear some innocent Pollyannas saying, “They would never do that!” But only a few decades ago, it was unthinkable that a human being could be executed by dismemberment, simply because he or she has been recategorized as a fetus.

The US Constitution makes no provision whatsoever to allow for the bureaucracy. Yet the bureaucracy has become the largest part of government today, and is totally unconstitutional. It too is based on Wickard v Filburn. The bureaucracy bypasses the Constitutional legislative process, creating unconstitutional regulations that stymie economic growth, erode what Constitutional liberties remain and most perniciously, move us from a limited representative republic to an administered despotism.

Our government has been disconnected from the limits the framers built into our Constitution. The new class elite claim the Constitution is a “living breathing document,” and thereby unshackle themselves from the limits put on them by it’s original intent. The Tenth Amendment says – “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.” In other words, if the Constitution doesn’t say government can do a thing, government is forbidden from doing, and those things the Constitution says government cannot do, it cannot do. Sadly, government does whatever it wants today, there are no limits, they have broken the contract over and over.

Today, those powers that are not bestowed on government, are regularly done, and those powers the Bill of Rights strictly forbids, are commonplace. We stand naked before an all powerful government while they hide behind a wall of guns aimed out at us. We not only have to worry about a robber taking our hard earned money, the government itself has become the thief, government undermines economic standards whenever a politically favored group wants, it encourages an invasion of people who seek to change our way of life, and the list goes on. Government hides everything they do, as they tell us, if we have nothing to hide then we should stand naked before it. Can there be disagreement we don’t live under a poorly concealed despotism? Isn’t it time to reign them back in?


John Pepin

Billion Dollar Business Idea

Thursday, 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.


John Pepin

Tyranny by Regulation

Sunday, 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.


John Pepin

The Pernicious Effect of the Principle Agent Dilemma.

Thursday, 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.


John Pepin