Archive for the ‘philosophy’ Category

Economic Cancer

Thursday, January 22nd, 2015

Dear Friends,

It seems to me, the economy has cancer, sectors that are supposed to facilitate business creation and operation are now the ones supported and the real economic actors, (firms that build things and provide services) are now facilitators. I am of course talking about the legal profession and the financial sector. Turning the economic incentives against the creation of businesses and capital expansion of their production. This has had the effect of decoupling wages from productivity, drying up capital available to expand production and start new firms, adding extraordinary costs to doing business and lowering profits for firms the create things. An economy reacts organically to inputs from the actions of it’s various sectors, as such, when incentives become perverted firms need to use more and more creative measures to stay competitive, and are forced to do creative accounting to appear more profitable than they really are. All these negative incentives in an economy result in lower economic outcomes for everyone… except those in the financial and legal services sectors.

The financial services sector of the economy is there to be a conduit from people’s savings to firms looking for capital to start or expand their businesses. The way economists traditionally see banks is that they take in the savings of individuals and firms, paying reasonable interest, amass that capital and make it available to businesses to start new ventures, or expand profitable ones. In this scenario both savers and firms win, a win win. However, today the financial services sector has become the be all end all of the elite. Politicians kowtow to the too big to fail banks, giving them special privileges denied to other sectors of the economy, they have out sized power over the policies of government, there is even a shadow pseudo government agency that explicitly protects them… the Federal Reserve. Instead of being a facilitator of business the financial services sector has become the focus of our economic policy. Wall street versus Main street if you will.

The legal services sector is there to allow self interested people to come to agreements that benefit both parties. It is imperative that when people do business they trust each other. That is impossible without verifiable contracts and standards holding all participants to their word. These important factors in facilitating business cannot be overstated. Sadly, the legal system has bent over backwards to undermine this very noble calling and pervert it to serving lawyers, at the expense of everyone else. Today, contracts are only as good as the lawyers who break them on some absurd technicality, the primary role of attorneys is to bankrupt businesses for huge profits, drive up the cost of doing business by a continual threat of frivolous lawsuits, and keep new possibly disruptive products from the marketplace to protect older less efficient ones who have political favor.

The liver is supposed to filter toxins from the blood. As long as it does it’s work the body is healthy, but when the liver becomes distended and cancerous, it ceases to filter toxins. Instead it adds to the toxin load in the body. In that case the liver has ceased being a facilitator of bodily health and instead has become a drag on the body’s ability to function. The financial services and legal service sectors have become like a cancerous liver and kidney. They don’t perform their function in our economy, like a cancerous liver and kidney cease to filter blood, they only serve themselves. In both cases, a cancerous liver/kidney and perverted financial/legal sector, the body eventually dies… and so does the economy. Until the cancer is removed, allowing them to return to their correct function, the body becomes more and more diseased, and the same is true with the economy.

The proof is in the out sized compensation of those in the legal and financial sectors. The wages of the lawyer far exceeds that of the entrepreneur. The bonuses of the “banksters” is exponentially more than the those who create wealth. From this small example we can see that the lion’s share of profits today, flows to those who are supposed to facilitate business, from those who actually do business. The huge percentage of the total economy of these two sectors, that are supposed to be facilitators, is proof they have outgrown their place and, like cancer, have become a threat to the very existence of our economy. Since everyone wants the most profit possible for their actions, it is clear that the extraordinary wages in the financial sector and legal profession, come at cost to the rest of the economy, imply that those sectors have more than their fair share of power, political and economic, because if they didn’t those profits would be instead kept by those who create things and provide other services.

The result is that our economy, the world over, has become dysfunctional. The financial services sector now only serves itself, at cost to the rest of the economy, it doesn’t fund small business start ups or CAPEX, because taking printed fiat money and investing that money in government bonds is more profitable, moreover, it earns the favor of the political elite. This drives up the cost, and pushes down the return, on those bonds. Lawyers get rich by finding ways to break contracts, drive up legal expenses, suing firms and individuals and otherwise undermining the economy. These two sectors have become cancer in the most alarming sense. Most people understand this, at least subconsciously, and hope it will solve itself, but cancer never spontaneously heals, it only grows. If we don’t cut the cancer out with legal and financial reforms, and prevent it’s recurrence… the cancer will eventually kill our economy.

Sincerely,

John Pepin

Should GDP Include Government Spending?

Monday, January 19th, 2015

Dear Friends,

It seems to me, to bring sanity into economic figures and government decision making, government spending should not be considered part of gross domestic product. Gross Domestic Product, (GDP), is a measure of national income. The number is used in a variety of ways… to determine the wealth of a nation, the prosperity of it’s people, it is a way to compare the efficiency of various nation’s economies against each other, ETC… Basically, GDP is a benchmark of a country’s economy. GDP is figured by adding together all government, consumer and business spending, investment, and exports then subtracting imports, and you have the expenditure method of calculating GDP. Which is to say, it uses national spending as an indirect means to estimate national income. Why should you care how it is calculated? Because GDP is used for so many economic policy decisions that directly effect your personal financial well being.

Government’s addition to GDP is problematical, because government doesn’t really produce anything, it only consumes. As such, government doesn’t add to national income and does not support the economy… it is supported by it. You can’t say borrowed money should be added to a person’s income, but economists do, when it comes to government spending. Welfare spending is one example. If I take a dollar from you and give it to someone else, does that make two dollars of income? No, it still only one… counted twice. If any government spending is included, it should only be that portion taxed and spent that year, and even that would distort the real picture due to the debt that has piled up, the service on that debt, welfare spending and the negative incentives government largess creates.

If the economy outside government folds, government spending must stop as well, because it is in fact spending and not income, but if government went away the real economy would hum along fine. Oh, government alone can go on a while by printing money and buying bonds, (monetizing debt), essentially stealing the wealth of everyone who holds the currency, but even that extraordinary measure must end in hyper inflation and the repudiation of a fiat currency, as in Argentina, Hungary, Yugoslavia, Zimbabwe etc… If the currency is backed by gold or some other commodity however, government cannot print money to keep up spending, because it would have to create that backing commodity out of thin air, which is why economists and politicians hate gold backed currencies, it limits their ability to fudge the numbers.

GDP is supposed to be an analog of a nation’s economic income and so adding in what should be subtracted distorts the picture. A nation’s real economic growth cannot be effectively measured when a drag is called a boost. In the most simple terms, if you are driving to a place, and want to know how long it will take to get there, normally you would discern the distance and your speed, divide the distance by your speed to get the time it will take to get there. We have all done similar calculations in our heads when the kids in the back seat say, “Are we there yet?” But what if we stop to eat? The calculation then would have to add in the time you spent at the restaurant, what if you subtracted the time you spent at the restaurant instead? Your calculation would be very different than reality wouldn’t it? Adding in government spending is like subtracting the time you spend eating instead of adding it, performing the opposite function than is called for, it gives a very distorted idea of what is really happening.

This provides a pernicious incentive for politicians to spend more to make GDP appear higher than it really is. Let’s say a nation is experiencing a recession and it is an election year. Government officials could borrow money and increase money printing to raise government spending, making the economy appear to be growing, even as it is really shrinking. Moreover, that raise in debt and corrosion of the currency to fund the spending, actually lowers real economic growth! That might help with an election campaign but it is certainly not a real calculation of that nation’s economy or income. Further, it skews the incentive for politicians from helping the real economy with actual reforms, to fudging the numbers with government spending, to make it look better. That is a recipe for eventual economic disaster.

Take GDP per person, a typical use of GDP to figure the income of each person on average. A nation with 10 people with a GDP of $10.00 a year would have GDP per person of $1.00 a year. What if in one year, a country’s government increased borrowing and spending an equal amount to the rest of the economy? Since that spending is included in the GDP figure it would make GDP appear to grow 100 percent in a single year! Would an average person’s income double though? Of course not, they would be poorer, because they would have to carry that debt… and if the scheme went on, that country would sooner rather than later go belly up, destroying all the prosperity of the people.

In the pseudo science of economics the wants and desires of those who do the measuring are included in their measurements. Unlike a physicist weighing the mass of a particle, the economist put’s his or her wishes into the measure, because they lack the perspective, testability and observability of the assumptions of real science. An electron has a testable verifiable charge that is consistent anywhere it is done, while no economic theory can be tested, they cannot be verified and are not universal. We all have egos and want to be more important than we are. None of us have a real perspective on ourselves, it goes back to Jung’s theories, that there is that we know about ourselves, that which everyone knows, that which others know but we don’t and that which no one knows. New class economists want government spending to be included in GDP, because they can effect government spending with their theories and assertions, therefore, adding government spending to GDP makes them more important. It serves their egos and the egos of those in political power. Sadly, it doesn’t serve us at all. That is why government spending should not be included in GDP… it calculates borrowing as income and calls a drag a boost, creating pernicious incentives and distorting the real picture of an economy.

Sincerely,

John Pepin

Obama’s War on Ideas

Thursday, January 15th, 2015

Dear Friends,

It seems to me, the newest war the US and Britain are fighting, the war on extremism, is a very dangerous slippery slope. The bottom of that slope is arbitrary rule. A slippery slope is when doing a thing, leads to another, then another, until eventually you have gone far beyond where you planned to go, like sliding down a slippery slope. A lie is a form of slippery slope. A white lie leads to another, then another, until they are no longer white lies they are bold faced lies… all to cover the initial lie. Once you step out onto that slope, the slide is unstoppable until the bottom is reached, then there is usually no way to get back up. The damage is done. Those who wield political power are many things, but stupid they are not, so the fact our leaders are moving us onto that slope is telling of their diabolical nature.

I would like to remind people that scientific progress, social evolution and political evolution depends on extreme ideas. When Columbus said the world is round he was an extremist, when Kepler said Earth revolves around the Sun and not visa versa he was extreme, when Einstein came up with his theory of relativity it was extreme, when Thomas Jefferson penned our Constitution it was extreme too. Every advance of humanity was called extreme at the time! To eliminate extreme ideas is to stop humanity in our tracks. New ideas are always extreme, to stop all new ideas is a recipe for stagnation and decay of a culture, it’s people and government.

As Clausewitz said, war is politics by violence, since the government has declared war then by definition, they mean to use violence for political ends. State violence is like a Pandora’s box. Once it is opened it cannot be unopened. Once someone is dead they cannot be brought back, (except by Jesus Christ as Lazarus). Therefore, before a government uses violence, it had better make sure the violence is justified. Violence is far more horrible than people realize, especially State violence, (war). So when a state resorts to violence, the enemy must be identified, the threat must be real, the goals set and the exit strategy decided. Else a war gets quickly out of hand and becomes an unending quagmire. The question now is, who will they use violence on?

As long as a faction isn’t violent who is to say it is extreme? Extreme is in the eye of the beholder. Many think the Mennonites are extreme, but not at all violent, so does that put them in our government’s sights? What about a saint? No one is more extreme than a saint. In the war on extremism both the US and Briton made sure to inform us that violence is not the defining factor… Extreme ideas are. The founding fathers were definitely extremists, and today, agreeing with them is one of our government’s definitions of extreme. A belief in individual liberties puts you on the extreme list. An anti abortion stance is another position that puts a person on the governments hit list. In fact, anything not in the new class progressive philosophy, is extreme, as defined by our government! Well, except for violent Islamic terrorism, but then again they did tell us it isn’t about violence, it is about ideas. Basically, anyone who disagrees with the government line, is an extremist.

It is the fear of Islamic terrorism that is the foot in the door for government to declare war on anyone who doesn’t agree with their new class philosophy. Yet the US government refuses to name Islamic terrorists as the target, in fact, they are careful not to. The lists put out by the US government and the British government on whom is extreme should make any liberty loving individual’s blood run cold. Throughout the ages, whenever a government wanted to usurp power, an enemy of the state has been the means, and Islamic terrorism provides just that means, and so must be protected, nurtured and husbanded. Now that we have allowed Obama to arbitrarilly decide who should be executed, out of fear of Islamic terrorists, there is no real limit to his power. Yesterday, Obama arbitrarily ordered Anwar Al Awlaki killed, for inciting Islamic terrorism, tomorrow, it will be Joe Smith, for reading the Constitution aloud in the public square.

So what does it mean to have a war on extremism? Simply stated, it means government will do violence to anyone who they disagree with or disagrees with them. Islamic terrorism provides the propaganda, but the real war is against the citizens of the US and Britain. Those governments bend over backwards to kowtow to violent factions within the Islamic community and never miss an opportunity to poke Christians in the eye. Remember Obama’s jailing of a film maker because his film offended Muslims? Last week Obama refused to attend the rally supporting Charlie Hebdo, and do you wonder why the US CIA is sending so much money and arms to Islamic terrorists around the world? Why were Christians forced at gun point to fund Piss Christ and a picture of the Virgin Mary in dung? Feces is the sign of Baal. So, if our governments are fighting a war on extremism, why do they engage in all those counter productive things? Because their war is not on Islamic terrorists it is against their own citizens!

Why would government wage a diabolical war against it’s own citizens? To disconnect us from our founding principles and documents. Obama himself said Our Constitution is too limiting he would like to change it, to empower government, not limit it. His war on extremism is just the bill to do that. Obama, and other world leaders are willing to let a few thousand children be killed horribly, they are willing to accept violence on our streets, rape as a weapon of war doesn’t bother them, they will tolerate the slaughter and even the extermination of Christianity, as well as genocide, human suffering to them is a means to an end, in short, those who will wage war on extremism, (do violence to those citizens that disagree with the elite), have no conscience and no morality, power is their only love. Oh, they will shed alligator tears over the suffering they cause, but that is only propaganda too.

To wage war against one’s own people is a description of truly evil person. In their war on us and our liberties Islamic terrorists are the new class progressive elite’s allies. Moreover, crushing ideas that the elite call extreme, is a certain way to stop humanity’s social, cultural and political evolution. War is politics by violence and by declaring war our government has avowed to use violence on anyone they deem extreme. Since they refuse to call Islamic terrorists extreme, but do call Tea party members, anyone who speaks of individual liberty, constitutionalists, returning US soldiers, gun owners, pro lifers, etc… extreme, it is clear the citizens of the US and Briton are the target of their war. Talk about slippery slope! Now that you know your government is planning on doing violence to you and your loved ones… what will you do about it? Oh, never mind, dancing with the stars is on… go back to sleep.

Sincerely,

John Pepin

Pacifism in the Face of Evil

Monday, January 12th, 2015

Dear Friends,

It seems to me, pacifism in the face of violent evil, guarantees evil wins. The pacifist may believe in his or her heart that they have the moral high ground, and would rather die than fight, but once they have enabled evil to win, they could very well be forced to fight against those very people the pacifist agrees with! This makes pacifism an important way to increase violence and empower evil. The violent usurper convinces his victims that pacifism is Godly even as he plans on slaughtering the pacifist herself. Civilization is not based on placidly allowing evil people to do whatever they want, that is barbarism, civilization is allowing those who mean us no harm full latitude, and stepping on those who seek to install themselves as despots, like bugs. Today in our world, we see those who seek to violently overthrow our civilization and replace it with a barbaric iron age philosophy… are placated, given welfare, protected and their violence is apologized for and even justified. That is a sure way to progress the world to a form of world wide barbarism like our planet has never seen before.

In Western civilization pacifism is a vice that seems to have no downside. The pacifist can convince him or herself that they are enlightened and on a higher plane than the hoi polloi. Just as the vegan can be a vegan in the west, to do so any other place, at any other time, is impossible. It is the market system of Western civilization that makes it possible. The vegan has at her fingertips anything grown anywhere on the planet regardless of season. The pacifist can sleep warm, well fed and safe in his house, because there are people willing to do violence to keep her safe. The moment Western civilization is overthrown however, pacifism becomes absurd, as does vegetarianism and a whole host of other Utopian ideas.

The first thing any self defense course will teach you, is that when someone says they are going to kill you, take them seriously! There is almost a quarter of the human population that openly avows they will take over the world and cut the heads off anyone who doesn’t convert to their ideology. They openly call for the overthrow of western civilization and to replace it with their fascist philosophy. They are telling us to our faces they are going to kill us, and enslave us and our children, yet our leaders tell us not to take it seriously. Every time they murder people, we are told not to judge, and that we should accompany one of our future oppressors home, to protect them from the non violent people they plan on killing, raping and enslaving. The first thing we need to do, if we are still sane, is take them seriously!

To fight a war on a tactic is a certain way to loose. Had the Second World War been about stomping out Blitzkrieg, the thousand year Reich would still be in existence. To win a war you have to identify the adversary and kill them before they kill you. That is war, politics by violent means. If one side is willing to use violence but the other refuses, the first will enslave the second, since slaves have no say the master could force them into the army if the he wants. Many have been pressed into military service against their will, and fought against their own families, because they were pacifists in the face of evil. What good is it to be a pacifist, if one merely empowers the very forces of violence he is against, by doing so?

Once you are in the hands of those who have no compunction about torture, killing, slavery and rape, you either die at their hands, possibly horribly, or you fight for them. Some pacifists would rather die, until the time comes to die, then life becomes a better option, even life serving the evil you refused to fight before. The Janissaries were Christian children forced to convert and fight for their oppressors. Once they became inured, those former Christians fought to enslave, kill and rape other Christians. The history of the Janissaries is one of violence and perversion on a grand scale. Once they have won, you and your children will be their slaves, to do with as they choose.

It can be said that it is only the pacifist who chooses their own master. They willingly become the slaves of those who are willing to use violence to seize power, since they were unwilling to use violence to keep those evil men from that power, and in doing so they choose who their torturer will be, because through their inaction, they help their slaver get power over them. Moreover, by their inaction they choose the most violent and evil faction available. In a real war, the pacifist is an enemy of the good, even though they believe in their hearts they are above the fray… and they are, until those protecting them have been vanquished, then those evil men who seek power over others will exercise that power over the pacifist. Then the pacifist will be forced to fight for their master or be beheaded. That is why I say, pacifism in the face of evil, is evil itself.

Sincerely,

John Pepin

QE Insanity

Thursday, January 8th, 2015

Dear Friends,

It seems to me, if as Einstein said, “Insanity is doing the same thing over and over again and expecting different results…” then our Central Bankers are the most insane people ever born. The pseudo science of economics will not be dissuaded by mere real world observed results, that contradict their theory, no, that would be like… giving up! You have to admire their willingness to sacrifice the standard of living of the whole world to prove a point. The United States Federal Reserve has printed trillions of dollars and used them to monetize the debt. The Bank of Japan is doing the same thing with the Yen, as now Draghi is claiming he will do as well to the Euro. Despite the trillions printed and given to government and the big banks, which in a normal economic cycle would result in runaway inflation, there is no inflation as measured by the eggheads at the Fed, ECB, or the seat of Abenomics. Their failures lead to our losses, in our wages, pensions, savings, house values, and yes, our basic standard of living.

Keynesianism is a philosophy in the arena of the Wealth of Nations. John Maynard Keynes was a British economist, who posited that since an economy is driven by the demand for it’s supply, in an economic downturn, which by his thinking was a period of time where supply outstripped demand, then government spending could gin up demand and swing an economy back into growth. Basic and simple to understand, it also had another thing going for it… it empowered government officials to tax and spend more, “for the good of the economy.” What Keynes and later demand side economists fail to understand is… not all demand is created equal. Consumer demand is always the most productive and government demand is actually often destructive of economic growth.

Japan is the poster child for Keynesianism’s failure. When Japan first went into their decades long recession the government was flush with excess reserves. The government of Japan spent huge sums in typical Keynesian fashion to stimulate the economy. It failed. They raised taxes and spent more, the economy floundered, a new party was elected into office on the promise they would spend more. They regulated and spent more, and the economy went downhill even faster. Abe was elected to print more and spend more, he raised taxes, printed more and is monetizing Japan’s huge debt… to no avail.

The southern states of Europe have had a healthy government sponsored safety net for decades. As a result, today the governments of south Europe spend huge amounts of money, keeping able bodied young people out of the workforce. The drag on the economies of those countries is like pulling a three bottom plow through a swamp. No amount of government spending would be enough, to satisfy the demand for free money from government, but the politicians have promised what they have promised. The elite could never lessen their grip on the economy through regulations and taxes, buttressed with graft and bribes. If they had the ability to print their money into hyperinflation they would do it in a nanosecond.

The US Federal Reserve has gone through six incarnations of money printing, TARP, TWIST, QE1, QE2, QE3, Monetary easing, and now ZIRP. Trillions have been printed and handed to the too big to fail banks (TBTF), and government. With all the propaganda that the US government has reigned in spending, the numbers the unbiased media use are compared to the days of trillion dollar stimulus short term measures, not long term averaged spending to GDP. Today the US government spends as much of GDP as anytime in history, 36% of GDP is government spending! That means 64% of the economy is pulling the plow while 36% ride it and claim they are helping. Yet even with all that Keynesian “stimulus” the economic outcome for Americans is getting worse by the day.

The past is littered with regimes that tried to print and spend their way out of a recession, they have all failed, spectacularly. The ones traditionally cited are Wiemar Germany and Argentina, but there are many other examples of hyperinflation triggered by monetizing the debt. Hungary was the worst ever in 1946, but Zimbabwe in 2008, and Yugoslavia in 1994, were crushing… the examples go on and on. Printing money to stimulate the economy has failed every time it has ever been tried. It empowers the political elite to take more and spend more however, and with that incentive at play, it will be given many more chances in the future as well, just in case it might work sometime.

The egghead economists answer to their failure of money printing… to raise wages, lower real unemployment and underemployment, the lack of small businesses, rising food inflation even as imported goods get cheaper, stagnated housing market, and the multi trillion dollar bond bubble the Fed’s policies have created… is to do more of the same. We are told we must let them print more and blow up more economic bubbles else we would be in for it. They have become like a typical mad scientist. Despite all the monsters they have created in the past, and the destruction those monsters wrought, there is only one way, their way, the consequences be damned because someday it will work… it just has to!

Sincerely,

John Pepin

The Family Unit

Monday, January 5th, 2015

Dear Friends,

It seems to me, the family predates capitalism, and so the family can get along fine without the market system, I don’t believe however, the market system, (and therefore our civilization), can get along at all without the family. The traditional family unit has served the human race for eons. Through famine, plague and ice ages, the basic family unit has kept human beings alive on this inhospitable planet, since Adam gave up a rib. Because the market system tempers people to make all decisions rationally, weighing the advantages versus the disadvantages of a given action, any pragmatically rational maximizer will understand the utility of the family, in civilizing our children and providing a strong thread upon which to weave the fabric of our civilization. To the Fabian/Frankfurt school, new class progressive however, the family stands in the way of progress, and so must be destroyed by whatever means necessary.

The traditional family unit is a cord that is interconnected with the cords of other families to create the fabric of society and culture in which we live. The stronger and longer those threads the stronger and more useful the fabric that can be woven from them. Break up the family and those threads become weak and short. As long as there are sufficient long and strong threads the fabric of society will hold together, but once too many short weak threads get woven in, the fabric easily rips apart.

New class progressivism is based on the philosophies of Marx, Nietzsche, and Freud, both the Fabian and Frankfurt school have as their stated goal, to progress the world to a planetary Marxist government. To that end, the Fabians believe in destroying the system so they can recreate it in a way more becoming to them, while the Frankfurt school is more agreeable to a “rationally guided” evolution from within. They both hold the family in great disregard, understanding that the family stands in their way, as it is the primary source of the societal and economic strength of any society, if fundamental change is sought, then this foundational asset needs to be wiped out.

The new class love to use spurious statistics to forward their diabolical goals, like the fact the prison population in the US is 40% African American males, while they only make up 12-13% of the total population. This is offered as proof of the racist nature of the American judicial system. What they refuse to allow spoken, is the fact that the African American population has largely succumbed to the Fabian and Frankfurt school propaganda and policies, replacing the father with the state.

Today very few young black men know who their fathers are. They don’t come from traditional families they come from broken homes. Those who are born into traditional families with a father, mother, brothers and sisters, have incarceration rates that are in line with general demographics. So the fact is, the high incarceration rate among black men, is due to the policies, plan and goals of the new class, not in any inherent socialization problem of people of African descent or racism from the society as a whole.

For a market system to be efficient it needs civilized people who can be trusted. The ancient Chinese philosopher, Hsun Ching said, “The congenital nature of Man is evil, the civilization in us is a learned trait…” In that we are born barbarians and are civilized by our families. A civilized person can be trusted at his or her word while a barbarian will seek any means to get out of honoring their word. The increasing demand for attorneys is proof we are becoming less civilized and more barbaric. Driven by the continued corrosion of the family.

A market interaction is favorable in some way to both parties engaging in it, unless one doesn’t follow through, or is untruthful about the product or the payment. The more people that have been civilized the more efficiently a market can work, but as the family is corroded and people become less and less civilized, the markets become ever more labored until they freeze up and cease to work. The failure will be blamed on the market itself instead of the loss of the family and Marxism will be the “only logical solution…”

Strongly civilized people create a sinewy thread that can be woven into a robust society, able to withstand anything God or mankind throws at us and our economy requires civilized people, our families provide those civilized people. So if we want a stable prosperous society, able to deftly manage catastrophes and war, we must do everything in our power to protect the family unit. Socialists however, believe so strongly in their goal they are willing to risk any danger, even cutting the very thread of our civilization, to get their one world Marxist government. If only they could evolve us there, by destroying the family unit if need be, then we would live in utopia, which in Greek means… nowhere.

Sincerely,

John Pepin

Friction

Thursday, January 1st, 2015

Dear Friends,

It seems to me, a bearing is designed to reduce friction so the shaft it holds can rotate with as little loss as possible, adding sand and thus more friction increases loss to the point the shaft fails in service. We all intrinsically understand that friction makes machines break and work less efficiently but for some reason we don’t correlate that effect to our economy. Just as the friction from sand, rust or a failed bearing reduces efficiency and eventually causes failure in a machine, economic friction from taxes, regulations, corruption and having interest rates set by unaccountable people with dubious alliances, all cause an economy to function less efficiently and eventually fail.

Economics to many seems like magic, giving economists the gravitas of Merlin, but like Merlin’s magic, economics is mere pseudo science. Economics tries to explain how an economy works, and prove it understands by correctly predicting future economic conditions, given present circumstances. A tall order by any standard. It’s fatal flaw is that one of the underlying functions of economics is the human being. We are instrumental to economic outcomes. Clearly, in any area of “science” that involves the human being our science is woefully inadequate, especially as compared to our grasp of physics, mathematics and lately astronomy.

It is our lack of perspective about ourselves that makes our research into ourselves, our nature and emotions, reactions, decision making, etc… so difficult. Without comprehensive knowledge of ourselves we cannot ever really call economics a science. Our lack of dispassion concerning ourselves results in our self interests driving our observations. It is self evident that every politician always wants more power, to do whatever she sought power for in the first place, therefore, given a choice of several options she will always choose the option that results in increasing her power, it is in her self interests. Each time this happens the friction to our economy is increased. The effect on the economic outcome of each person is small individually, but the cumulative effect is huge, and the friction adds up.

Money flows through the economy like hydraulic fluid, mechanical energy or electricity flows through a machine. In a machine the engineer strives to limit the resistance to the flow of whatever the energy the machine is processing. In an economy, the engineer is the government the blue prints, government policy. The engineer builds a machine to do it’s function as efficiently as possible but a bureaucrat builds the economy as inefficient as possible. That is because the engineer is using mathematics and physics to build her machine while the bureaucrat has only his self interest to guide him. No matter how schooled in economics he may be, the bureaucrat’s incentives are in the end, self interest. The same hold’s true for politicians only to a much greater extent.

Every tax, license, regulation, requirement, zoning law, etc… requires an entrepreneur to get a lawyer, which costs money and time, multiplying the friction of the initial rule. Where an engineer puts in a bearing a bureaucrat puts in a clamp that he can tighten at will. The politician has hands to grease, and his ability to grease those hands, is based on his ability to effect changes in economic friction. He can tighten down the clamp a bit, so only the largest company in an industry can turn a profit, returning hundreds to one to his corrupt backer, for her campaign donation. At every level of government, friction to economic operation is piled on, and our politicians lament the gap between the rich and the poor.

This is only one of the fundamental problems with the “planned” economy, and why the laissez faire economy does so well… friction. The planned economy is nothing but friction, bribes, restrictions, permissions, the list of impediments to operating a business efficiently, even with virtual slaves as workers are so pervasive, that instead of adding value at each stage of the manufacturing process the system actually destroys value. In other words, the cost of labor and other inputs become so high due to friction, the value of the manufactured good is less than the original cost of the raw material. All due to friction imposed by politicians, because economics is a pseudo science, in the hands of self interested politicians.

We all want a well functioning economy. A well functioning economy produces general prosperity, low crime, advancing standard of living as well as other social advantages like less racism, more virtuous people and a return to the nuclear family as the primary family unit, that is because in a well functioning economy, we are too hard at work getting ahead, to commit crime, if we are selling sofas we could care less if the buyer is African, Asian or space alien, it is the color of his money that counts, the effects of a well functioning economy are many and positive. The way to a well functioning economy then… is to remove friction from our economy.

Sincerely,

John Pepin

Ideal Government

Monday, December 29th, 2014

Dear Friends,

It seems to me, ideal government would be invisible to those “governed.” Imagine bringing up your children in a place where politics doesn’t matter because the government is limited the way the founders intended? Under such a system you and I would go about our lives not having to interact with government at all. No bribes, no political favor, no licenses, no taxes, very limited legal code, well, you get the picture. If we lived in that way, with only the most limited amount of government possible to provide for common defense, and standards to facilitate commerce, our interactions with government would be few and far between. Moreover the ability of a faction to seize control of government and drive their agenda down our throats would be eliminated. Prosperity would be the norm and the wealth gap would naturally contract under such a system, but then again, that is exactly why it would never be allowed, and anything like it is so hated and vilified by the elite.

Under such a system, where government is strictly limited to national defense, protecting the property rights of the people and providing standards, (not regulations), to facilitate commerce, people would have little need to engage government. Most people wouldn’t even know where the town clerk’s office was because there would be no need. But that is exactly the rub, isn’t it? If that were the case, government officials would not be able to make such large amounts of money, their ability to enrich themselves through crony capitalism, graft, bribes, and outright theft would be eliminated, if we didn’t need government permission for everything.

Every time you have to go to the town clerk’s office to get the government’s authorization to engage in some activity, the role of government is enlarged and power of government is enhanced, with a commensurate increase in the status and wealth of those in government. The cronies of government officials would have to work for their wealth instead of having it bestowed to them. Regulations create the conditions where some people, those with the right connections, can become immensely rich while those without the connections must stay in the station they were born into, regardless of their abilities and virtues.

The ability of potential despots to seize power would be eliminated. If government is limited so it is not allowed to monitor it’s citizens, pass reams of laws and regulations that empower the state over the individual, control the people with military power, seize the property of individuals, or practice arbitrary power, a would be oppressor could not oppress. There is not one case in human history where a power given to government has not been abused, no matter how much the people agreed when that power was given, that power has always been abused. That is because giving power to government is stepping out onto a slippery slope.

Without the friction that regulations, licenses, fees, taxes, and political favor create, the economy of a nation would operate at maximum efficiency. Without the elite controlling who can get ahead by rewarding their friends with favors, the ability of people to become uber rich would be lessened, and the wages of the bottom rung of the economic ladder would be increased… such that the gap would naturally become narrowed. The resulting rise in demand for labor would drive up the wages for that labor. The supply demand curve would swing to the advantage of workers, instead of management, because rapid economic expansion that such a system would encourage would keep the demand for labor high.

The power and prerogative of the elite would be limited as well. Which of course would be unacceptable to them. Those who wield power are always loathe to relinquish that power. They take, they never give, that is why the natural progression of every government, political system and republic that has ever been constituted, has been eventual tyranny. The elite convince us that if only they had a little bit more power… oh, the good they would do for us. Conversely they claim that any small taking of their power would result in calamity. Anyone trying to limit the power and role of government therefore becomes a de facto enemy of the state.

The goal of limited government is not a pipe dream, it has been achieved in the past, it is the limiting of government absent violence and revolution, that eludes humanity. People vote with their feet whenever they are allowed to. No one flees to Cuba, people flee from Cuba to the US, Canada and Europe. No one is migrating to North Korea, people risk their lives escaping that tyranny. Venezuela doesn’t have a problem with people from other South American nations rushing their border, people are trying to get out. Yet the elite in the media, government and academia fill the airwaves with propaganda that if only we could become like North Korea, Venezuela, or Cuba, life would be a utopia.

Every human being yearns to be free, prosperous and moral. That is why people vote with their feet, fleeing despotism to places that are only marginally more free. Despite that reality, anyone who seeks to limit the power of the elite are enemies of the state, and are treated harshly while those who seek to unshackle the power of government are hailed as heroes… like Che Guevara. We could achieve near universal prosperity, if only the friction to the economy was removed, by limiting the ability of government officials to decide who gets what. Limited government creates the conditions where a despot cannot amass the governmental might he or she would need to usurp power, by eradicating arbitrary power itself. Yes, limited government would be a boon to humanity, that boon would come at cost to the elite however, and as such, will be fought at every turn, but the gain by winning the battle, even engaging in it… ideal government, is well worth the effort.

Sincerely,

John Pepin

Hope

Thursday, December 25th, 2014

Dear Friends,

It seems to me, of all the things Christians are called to do, hope is one of the hardest but the most rewarding. Some of us live in the past, where all our failures and misfortunes drag us down. Others live in the future, a future that promises great things that always seem to be just out of reach, but to actually have hope one must live in the present. The past tells us where we have been, and the future shows us where we can go, but it is in the present that we have the power to make the future. That power is based on hope. It is human nature to see a looming problem, like war, famine or tyranny, and to loose hope. We are overwhelmed by the magnitude of our problems, and to hang onto hope seems childish in the face of such overwhelming odds, but it only through hope that we have a chance at a better future. We as Christians, are called to have hope against all odds, put our problems in God’s hands and work in the present to save the future.

Our pasts have a great deal to teach us about what works and what doesn’t. It is the past that allows us to enjoy today and succeed tomorrow. Our past is full of lessons on how to have relationships, how to navigate the world, what gives us happiness and what takes that happiness away. The past is a terrific resource for us, but it can also be a bog that we get caught in, holding us fast and dragging us down. If we dwell on our past mistakes, instead of learning from them, we get stuck in a morass of self pity. Those who are stuck in their past mistakes or misfortunes cannot get past them and stagnate. Hope allows us to move beyond our failures to a better future where we can use those lessons to improve our lives.

Those who live in the future are never happy today. Their minds are filled with all the good things that will happen tomorrow and as such they miss all the good in their lives today. Often the future is a place to escape those things we find overwhelming today. We retreat into our Utopian vision of a future where we are smarter, richer, wiser and more attractive. But in doing that we undermine our ability to get wiser, smarter, richer and more attractive, because to get those things tomorrow, we must work for them today. The future is a great place to plan for but living there undermines that future. It is only in living today that we can effect our futures in a positive way.

Today, we may not be the the smartest man or the richest woman, but if we work to improve ourselves we can get there… powered by hope. It is the lack of hope that discourages us and stymies our efforts. Why struggle if there is no hope? The reality however, bolstered by the entire history of the human race, is that there is always hope. People miraculously go into remission from deadly cancers, tyrants fall at unexpected times and our loved ones get off drugs. There was no possible way Timoleon could have singlehandedly overthrown the tyrant of Syracuse, but he did. The problems facing Athens when Solon was elected were insurmountable, threatening the very existence of Athens, but Solon solved them. When Rome itself was burned to the ground and occupied by the Gauls, there was no possibility Rome could be retaken, but it was. The history of the human race is a story of hope against all odds. Even our very existence is a story of hope.

Those who don’t believe must do everything themselves. As the quintessential American Philosopher, William James taught, the philosophy of Christianity allows people to be calm in the knowledge that in the end God will sort it all out, but the atheist has no such hope. The poor atheist must take all the responsibility upon him or herself while a Christian can rely on God. To the atheist there is no hope, only struggle and pain, then a dirt bath. To choose hope over despair is not a cop out, it is the definition of wisdom. It is pragmatic to choose hope, and impractical to choose hopelessness, because it is hope that improves our lives and hopelessness that diminishes them. Regardless, God gave us free will, to choose hope or hopelessness.

The Christmas season is the time for hope. Christ came to save us from our own sins giving every one of us hope we can transcend them. He didn’t hang out with the Pharisees, he hung out with Prostitutes, Tax collectors and laborers. His message of hope was for everyone, not just the wealthy and powerful. Those with temporal power usually don’t lack hope what they lack is humility. Those of us who make up the mass of humanity however need hope. We are humbled every day by our demons. There is not a soul among us without some demon or two hounding him or her. It is through hope and the diligence that hope allows that we escape them and move to a better place. To a Christian there is even hope in death, the hope that we are saved by the actions of Jesus, hope that his life, death and resurrection brought into the world.

On Christmas eve, it is essential that we understand the message of hope that Jesus taught, accept the gift of hope he gave and live in that hope. Of course we fall now and then, what child has learned to walk without a bruised knee? It isn’t in giving up that we succeed, it is in giving in, to the hope Jesus gave us, and using that hope by working to make our lives and the world a better place, while relying on God to get the details we can’t, that is how we advance as human beings. The message of the Christmas season is one of hope, not every problem we face will be solved, nor that every tyrant will be overthrown, but that in our personal lives, even in death, Christians have hope. It is the legacy of our Savior.

Sincerely,

John Pepin

Incalculable Value

Monday, December 22nd, 2014

Dear Friends,

It seems to me, almost anything can be assigned a value, in fact, that is one of the basis of the market system, but we often assign value inappropriately. There are some thing that have incalculable value. Value is often based on scarcity, sometimes on utility and occasionally on vanity, but to have incalculable value is to transcend all other considerations. When we don’t understand value, we often destroy that which has incalculable value, for something with temporal value. How much of a loss is it to loose that which has incalculable value to get something of temporary value? The loss is magnified by the ignorance, because the loss comes directly from our hearts and souls. So many people diminish their lives, harden their hearts and darken their souls by misallocating value, that I thought it time to write about it, to help improve the lot of Mankind.

Intrinsic value is hard to come to grips with. A thing is often said to have intrinsic value if it is widely desired, like gold, diamonds, platinum or other pretty bobbles. The lust in men’s hearts for gold is often used to argue gold has intrinsic value. But does gold really have intrinsic value? It has utility as a metal for it’s conductance, luster, durability, malleability and resistance to corrosion, gold can be a store of value protecting us from devaluing fiat currencies, moreover, gold and gems are scarce. Sadly, the thirst for gold has driven men to kill each other with the blood lust of a cuckold, but do those attributes give gold intrinsic value? No, the value in gold, precious gems, art and other pretty things that touch the heart with lust, is simply vanity.

Water and air are perhaps the most utile things we know of. There is not one among us who could live five minutes without air and our bodies would die without water in less than two days. Therefore we can say that water and air have utility and are valued for that utility. But water and air are usually plentiful and being commonly obtainable they have little value due to scarcity. Make them scarce however, and a drowning man will give all the gold in the world for a breath, drop a woman in the desert without water and within a day, there is not a thing she would not exchange for a sip. The value of those things we need to live, are based on utility and scarcity, but don’t have incalculable value.

The value of a car is it’s ability to carry us from place to place, the value of money is it’s ability to be traded for those things we desire and need, while the value of furniture is in it’s ability to give us a place to set down. Our televisions have utility in their ability to inform us, divert us and entertain us, but there is no intrinsic value to furniture, televisions or cars. We value them and consider them precious, but in the end, they can be replaced. Too many of us value our things as if they had intrinsic value instead of for their utility. When we do, we often ignore or devalue that which has incalculable value, to our great loss.

Things have temporal value, in that their value is temporary and based on their utility, scarcity or our vanity, but only a being can have incalculable value. A being that loves us unconditionally like a dog or cat, a child that looks up to us with adoring eyes, the person who completes us, the mother or father who would gladly lay down and die for us, and the friend who will drop what he or she is doing and help us in our time of need… all have incalculable value. That value is not based on utility, the dog may make us feel good, and that is a form of utility, but the value of a dog far exceeds it’s utility. Our parents lives are temporary, since they are not immortal their value could be said to be based on scarcity, but to do that would be as soulless as a rock. Our children are an extension of us, but to value them as such is to base their value on vanity. The value of those who we love is never based on scarcity, utility or vanity, the value of our loved ones is always incalculable because they are irreplaceable and permanent.

It is in loosing sight of that with incalculable value by holding precious that which is temporal we diminish ourselves. What good is it to gain the world and loose one’s soul? What benefit is it to us to so value a car that we alienate someone with incalculable value over a scratch? To what end do we send someone’s child to die in a war over an insult, land, power or prestige? We loose that which has incalculable value for something with mere temporal value. What do we gain if we loose that which has incalculable value for that which has mere temporal value? To value scarcity, utility or vanity over the sacred, is to be unwise in the most profound way.

Sincerely,

John Pepin