Archive for March, 2011

Once Broken…

Thursday, March 31st, 2011

Dear Friends,

It seems to me that once something is lost, it is much harder to get it back, than to have not lost it in the first place. I cannot think of a single example where this axiom doesn’t hold true. From the smallest thing like a sewing needle misplaced will cost many times it’s value to replace to the family farm lost to foreclosure the simile seems almost universal. Except that there can be no universals or so more than a few Chinese Philosophers, in classical times, would have us believe.

With the World on fire, the President’s lackeys giving Obama the credit, (or blame), we seem to be on the precipice of a great change in the fabric of the World’s governmental structure. If the dominoes continue to fall, Libya, Syria, Algeria, Yemen, Dubai and possibly Iraq the whole region could fall under the influence of an Al Qaeda affiliate.

If this happens Israel would be in mortal danger. The Muslim extremists, including Mahmoud Ahmadinejad, have made no question about their antipathy towards Israel. The ensuing war will bring untold bloodshed and chaos to the region. With all the usual horrors of war that follow, like the children of Ares, Famine and Disease. With his adopted child Fallout. Radiation sufficient to make ten thousand Chernobyl’s.

With the people of the World completely ignorant of the precarious position the US government is in fiscally. The official debt pales in comparison to the implicit debt. When the US government implicitly backs a corporation or entity (like Fannie Mae and Fredi Mac) and that entity then issues debt, the US taxpayer is on the hook for that debt. If the firm or entity cannot pay back the loan then the US government bellies up to the bar and pays the tab.

With the implicit debt, (unaccounted for debt) is tallied, it comes to a shocking fifty to two hundred TRILLION dollars!!! Seriously! Depending on the source and the bias of that source the number can be quite alarming and quite hard to disprove. With this actual overhang where the US government is spending more than the WHOLE WORLD is producing, (around 70 trillion), there may be a problem with the US spending.

I was reading the other day that if the US stopped producing and exporting food, millions of people around the World would starve to death in less than six months. Africa would be especially hard hit with as much as fifty percent of some countries starving to death in a year. The magnitude of this is hard to comprehend. Hundreds of millions perhaps billions of human beings, people just like you and I, starving to death.

Of course Mao thought starvation a tool of politics. He sent the army into the countryside house to house collecting all the rice. Mao then stored the rice in warehouses. After thirty million human beings had starved to death Mao opened the warehouses and the famine was over. Both Mao and Lenin thought starvation a good tool that would turn the people away from God. Such nice people…

One thing the Bolshevik-anti capitalists were famous for, is taking a person (a kulak), tying their hands, cutting a small incision in the victims belly and pull out a piece of intestine. Then the anti capitalist would nail the intestine to a tree then whip and whip the victim until he or she got up and ran around the tree unwinding their intestines around the tree until they ran out, lay down and died in a few hours. This is typical of how anti capitalists behave once they gain power.

We even have anti capitalists, or Protyranists, in the US openly calling to intentionally capsize the US economy. Openly and overtly. He is backed by many people holding great political power and therefore is above the law. So he works in the open, with only a very few people watching. The unbiased media have bigger fish to fry, ripping into the violent and racist Tea party movement, for example.

If only the unbiased media could find something about them to report. So far, no violence at all in any of their rallies. Well there were a few incidents, when the anti Tea party rallies got out of control but, drats, none from the Tea party itself. The overt violence not only threatened by anti capitalists but acted out is not really news. You see if a man bites a dog, that is news, but if a dog bites a man, that is an average mundane event.

Like a beautiful glass vase, finely sculpted and carefully wrought, by the most skilled craftsmen of all time, cannot be replaced and cannot be duplicated, but is today in the hands of an Lich, with nothing but loathing and jealousy in it’s heart. That Lich is the anti capitalist element in the US government.

It’s time to pick a side and stick to it, not choosing is making a choice, because once broken it can never be replaced…. Especially by a fiend with the track record of this Lich!

Constitutions, Positive Rights and Class Mobility

Monday, March 28th, 2011

Dear Friends,

It seems to me that any Constitution that is a list of “positive rights” is nothing more than Slave Papers. Such Constitutions require that one group/faction is entitled to the labor of another group/faction. No matter if, the group/faction that is entitled, is the aristocracy, or the tyranny of the proletariat (as embodied in the person of one man), it has many pernicious effects on society and the market system.

We always see these types of constitutions in countries that are sliding quickly to socialism/communism. The same communism that has led to bloodshed every single time it has been implemented. That is because socialistic thinking is incompatible with a functional market system. It is and was intended to supplant the market system as the dominant doctrine on the means of production. As such it requires the execution of, clergy and capitalists, and the reeducation of the masses of people.

Constitutions that list positive rights are a tool, a means to an end, of the socialist/communist/progressive. This tool is to undermine the market system by poisoning the supply of workers. The poison is an attitude of entitlement. This attitude of entitlement is fostered and husbanded by the socialist by such tools. Like a gardener needs a hoe to weed the ground around his seedlings.

Another, maybe the most pernicious, is that such Constitutions create the environment for oligarchal capitalism to appear. Such capitalism is a form of Stupid Capitalism. Under this type of system the regulation in a country is set up so that the families in power are the only people with access to permits, capital, squishy regulation, and other benefits not available to the people at large. This allows a small group of Elite in a country to amass extreme power and wealth that is mirrored by the extreme poverty in the masses such a system creates.

This is another reason the socialist/progressive love positive rights, it undermines the market system in a way that the ignorant can be misled to believe is a fault of the market instead of the poison introduced into the market. The socialist/communist points at the extreme gap, in such a country, between the rich and the poor and claim it is the fault of capitalism! When they have misled in at least two ways.

One is that they are using a faulty metric to measure the justice of a system The fault is that they are measuring the gap between the rich and the poor. Think about the margins on a page. How far they are apart is not as important as how close to the left edge, (if we consider that the side of absolute poverty), the left margin is set. If we set them too close together we loose the ability to do productive work.

So the real measure is the distance from the left edge to the margin. Moreover, the margin if you will, should be set by the aggregate decisions of the people at large not by government. Whenever government intercedes in such fundamental properties of the market it has created imbalances in the markets, such as rent controls, price controls, and the like. But despite using a flawed metric they come up with the right answer.

The other is that by using a faulty means of getting the right answer they can create profound anger that can in fact lead to revolution. They infiltrate the people and sow the seeds of anger. The communist/socialist can then use the conditions they created, with their Constitution of positive rights, to overthrow the government and any market system in that country. If your timeline is generations it is as elegant as it is evil.

We all know the history of Communist tyrannies. They have visited the greatest horrors on Mankind to date. Over 120,000,000 people, just like you and I, murdered by Communists, in the most horrible ways possible. Yet today’s Communist is not even the least bit recalcitrant. No today’s Communists claim the same mantle of ruthlessness as their predecessors.

But if the End is a democratic republic the only means, that has been devised to date, is the market system. A functional productive, lightly regulated market system where every person has access to and no one is excluded the means of production. With all the trappings of a functional market system like the protection of private property, both real and chattel, free hold land rights and personal protection from unreasonable searches and seizures. The list can be discerned in the US Constitution…

As I have said before, a market system can exist under both tyranny and liberty but communism/socialism/progressivism can only exist under tyranny. So if you want liberty, first you must have a market system, then liberty can follow. To have a functional market system you must allow everyone to participate and let there be class mobility. Because in the end it is class mobility that is really destroyed by the introduction of “positive rights.”

Class Mobility being a meta attribute of a functional market system. It must be encouraged and husbanded by a Constitution so that entrepreneurialism can prosper. Even though the Elite despise class mobility and the poor are kept ignorant of it…

Romantically Involved with Revolution

Thursday, March 24th, 2011

Dear Friends,

It seems to me that we all romanticize that which we know nothing of. Those that know nothing of war romanticize it and think they would emerge strong and heroic from one if they were involved. But whenever the real chance to become involved appears we recoil at the stark horror of what war really is. We romanticize marriage… until we are married… We romanticize many things but the reality of them always fails to meet our expectations.

Like the anti capitalists romanticize the worker. To a man, from Marx and Moser through Toonies and Marcuse, they worshipped work and eschewed it at the same time. Not that Moser was lazy like Marx or that Marcuse was the hypocrite Toonies was, but none of them had any real hands on knowledge, of manual labor. Yet they, and today’s anti capitalist like Obama, have never labored and would never labor yet they claim to worship the laborer.

But is it really a form of worship to subject a person to servitude? How many times have the romantic anti capitalists gathered sufficient masses to lever the reigns of government to their own ends. Whenever this has happened it has always resulted in economic stagnation, widespread poverty and outright starvation, but most importantly, political repression. History shows us one thing, that the Market System can exist under both tyrannies and republics but socialism and communism can only exist under tyranny.

Romantic anti capitalists have always used, as their willing pawns, the youth. Led by upper middle class youth, (the most dangerous people on Earth). The romantic anti capitalist revs up the youth to rise up and revolt. A few misled but bright young kids killed in smashing capitalism is a small price the anti capitalist is willing to let them pay.

Look at Mao’s cultural revolutions in the 1960s. What was the point of that? To instill in the people the political ethos of the right to revolution? Or to so demoralize the people they expended their will to fight on each other instead of examining their own lot. It was effective at culling the population and terrorizing the people. Mao used the youth, the most dangerous people in any society, to do his handy work.

Because they have no experience. Knowledge without experience to temper it is very dangerous, it has led to the attempted extermination of more then just the Gypsies and the Jews at he hands of the Nazis, communists and socialists have murdered tens of millions of people. Che and Castro praised the willingness of the youth to kill in the name of the revolution. I have read, Che was fond of killing people tied up and begging for their lives, what a big hearted man.

Today the youth of the World have been urged to rise up… demand you be heard, and take back power from the tyrant! They are being wound up to run into the meat grinder of tyrannical politics. For their own good? Or for the mischievous purposes of a few Elite who would be kings. Do you think the kids running the revolutions around the World might be a tad wide eyed?

We all want liberty for the people of the World. Everyone deserves the right of self determination and is sovereign. The only system that has ever been devised that raises the lot of Man is the Market System. The youth who are rising today should instead seek market reform, lifting regulation, stomping down corruption in the civil service corps and strong protection of the property of every person with no exemptions. This would serve to raise the standard of living and more importantly teach the people of the middle East how to live in a republic, (what the unbiased media calls “democracy”).

The recent election in Egypt calling for immediate parliamentary elections and a rewrite of the Egyptian Constitution will certainly bring the Moslem Brotherhood into power to write the new Constitution and rule for the meantime. Does anyone think that regulation reform is on the agenda for the Moslem Brotherhood? Or that the wide eyed youth have the experience to force them to?


Sunday, March 20th, 2011

Dear Friends,

It seems to me that if the Maya had not polluted their own drinking water, with the corpses of their sacrificial victims, they would not have collapsed as a civilization. What we are doing with energy is almost the same thing. People in the future will say, “How could they have been so stupid?” As they burn methane hydrates to power their industry.

We are told that we must not use nuclear energy because it is unsafe. Demonstrably so, in that we have had three nuclear disasters, since the inception of nuclear energy. Three Mile Island, Fukushima and Chernobyl, the total estimated death toll of all three is less than 8000 people over a 65 year span. This death toll is considered to many to warrant the dismantling of all nuclear power stations.

While at the same time children are killed on bicycles at the rate of 300 a year. If 300 children are killed a year times 65 years, there are 19,500 children, killed on bicycles in the same span of time, (in the USA only, the other victims are worldwide, none are in the US). Given these facts, we can only conclude that bicycles are far more dangerous than nuclear power plants, and under the logic of closing nuclear power plants, we must outlaw bicycles. It follows necessarily. The only difference is that the children killed on bikes are spaced over a greater territory and the people effected by a nuclear plant are in the neighborhood of the plant itself.

But given Ohm’s law electricity production must be as close as possible to keep the losses in transmission as low as possible. Each time the voltage is stepped up for transmission or stepped down for distribution there is loss. This loss is magnified by distance. So, regions that are also point draws for electricity need large producers of electricity close, to keep transmission losses under control.

Coal does most of the heavy lifting today though. The USA has more accessible coal than any other country. Hundreds of years worth of coal, but with the increasing regulation, driving up the costs of coal fired electricity production, both in mining and in burning coal, the price of electricity will necessarily skyrocket in the next few years.

Coal to oil is a possibility but environmentalists have labeled it as Nazi oil, because the Nazis used this technique to produce oil for their industry when the Allies had destroyed Germany’s access to the sources of oil. The label seems to have weight because no plant has been successfully permitted in the USA that I know of. But I never hear anyone, except me, calling nationalized healthcare Nazi healthcare, even though it was the Nazis that introduced single payer to Europe.

Natural Gas is also plentiful in the US. With the implementation of a new technique for the extraction of natural gas from difficult strata another hundred years supply has been opened up in a band from Tennessee to Texas. Unfortunately there have already been lawsuits filed to stop this process due to potential environmental impacts.

The long and short of it is this, modern economies need economically priced energy, without which economies grind to a halt. Energy is a primary input to almost ever aspect of economic activity. From the package delivery guy’s gas price to the heavy steel manufacturer’s price for heat for his steel, the price of energy can be a deciding factor, if a thing is better produced in one place than another.

With the continued and stubborn employment dilemma in the USA, one would think the government would seek to lift barriers to employment, like the price of energy. But this government seems intent on driving up the price of energy to the point of breaking the back of not only the US economy but the economies of every country in the World.

In this case the victims are the Coal, nuclear and natural gas industries and the well is our collective economies. Not much different from throwing the heartless corpses of your victims into your own drinking water is it?

Japanese Disaster

Thursday, March 17th, 2011

Dear Friends,

It seems to me that some politician somewhere said, “You should never waist a crisis.” He meant that a cagey politician should use any crisis that comes along to further their political agenda. Never mind, the crass and pernicious nature of the argument’s premise, the progressives have saddled up and are riding the unspeakable disaster the Japanese are going through now for their political advantage.

Lets examine the premise of the saying before we get into how this present crisis is being used to further a political agenda. This saying requires that the first priority of the speaker is egoistic self interest. Not even a hint at the virtue of empathy or concern from this speaker only blind self interest. Unlike, when people‘s avarices are channeled through the market they are turned to society‘s interests, this speaker seeks to meet his interests outside the controlling mechanism of markets and seeks blatant political power to meet them. To say, and especially mean, You should never waist a crisis is unconscionable.

In as far as the inherent dangers of generating electricity through nuclear fission are well known they hardly need pointing out. .But the constant hype and the undertow of fear generated by the uninformed excitement of the unbiased media creates an irrational fear in society. The unbiased media feed this fear with ever more fantastic coverage of the problems in the Fukushima Nuclear plant. People in the USA are going out and getting iodine pills to prevent thyroid cancer! I wonder how many of those same people don’t wear seatbelts, eat high fat foods, engage in risky sex, take drugs, smoke or drink and drive?

The threat to our lives is so miniscule none of us will have enough time on this planet to be effected. We will be exposed to far more radiation then a million Fukushimas when Iran decides it’s time to move. The nuke they use to take out Tel Aviv will expose us to many times the radiation. Perhaps if the people who are panicking today used reason to predict the exponentially greater risk of radiation from the Persian theocratic tyrant getting atom bombs they could put their energy to some good..

The utter heartlessness in which the unbiased media are vilifying the Japanese government is disturbing. No government has been more careful of nuclear technology or has used it more responsibly than Japan. They have had a mature attitude towards it’s research and implementation. In fact the Japanese government has been far more responsible in the use of atomic technology than the unbiased media have been about being impartial.

We must remember that this was caused by an unprecedented earthquake and tsunami. Entire cities and towns have been erased from the map, the infrastructure in the area effected is decimated and filled with debris, ranging from upturned hula-hoops to hotels, thousands of people have died and hundreds of thousands are homeless, the nation is not in the best position to respond in any adequate way.

But when you get right down to it what are we supposed to heat our homes with? The progressives can’t abide us using nuclear, coal, oil, or anything else that produces carbon dioxide, they decry the looks of windmills on ridges, solar is only just beginning to produce a bit more electricity than it takes to make the panels, so what are we to use? Or do the progressives want us cold and hungry, shivering in a corner waiting for some crumb, to be donated to us, by the munificent new aristocracy.

The thing that amazes me is that the plants stood a five Minuit magnitude nine-.something earthquake, (they are still upping the strength), and it didn’t smash the plants to bits. Without question the safety of existing nuclear plants worldwide should be examined by well trained and led teams. Taking the lessons of this partial meltdown and applying it to other systems. Fantastic assertions in the unbiased press only serves to motivate people to panic not to be prepared.

We will see how the disaster sugars off. As in the case of the BP oil spill the environmental effects of the politically appropriate disasters will be over stated and the results of the natural disaster will be underplayed. But that is the nature of the legacy unbiased media we have. They are still largely controlled by progressives. People who have whole heartedly endorsed the speaker’s words.


I pray for the quick recovery of Japan and the quick return of the Japanese people to their normal daily lives. May the people of Japan live long, healthy, happy lives, find their burdens light and go to heaven when they die…

The Revolution Standard

Monday, March 14th, 2011

Dear Friends,

It seems to me that the major difference, between the American revolution of 1776 and recent revolutions, is that there was a working government in place, that had practiced Republican principles from the start, moreover, the people were, as De Tocqueville put it, self interested rightly understood.

The actual form of government in the Western countries are Republican forms of government, not Democracies. Republican forms of government have, as an attribute usually, some form of democratic representation but republican forms of government also include monarchy, and aristocracy.

Aristotle put it like this, There are only three right forms of government, monarchy, aristocracy and polity, there are three perversions of these right forms of government, tyranny, oligarchy and democracy. Because tyranny is rule for one person, oligarchy is rule for one faction and democracy is the tyranny of the many over the few. A Republic is a blending of two or more of these right forms.

So where we have a call for democracy we actually have a call for the tyranny of the many over the few. This was a very hotly debated item in the founding of the new American Republic after the revolution. They were very aware of Aristotle’s thoughts on this subject, and others, especially Montesquieu’s adding a third branch of government… the Judicial.

Modern revolutionaries have no such advantage. The opposition parties always seek to, replace the tyrant; not overthrow tyranny. They all make the same claims, they call for social justice, they decry violence even as they apply it themselves, they all seek for the benefit of a single faction of society only and seek the submission of all other factions of society. Universally when they come into power they install a more despotic government than the one they replaced.

Especially with the help of the protyranist elements in Western culture. The Michael Moores and the George Soroses epitomize the protyranist faction in Western society. They seek tyranny and believe it the best form of government. They have, at their philosophical core, a firm belief that the masses are only fit to serve. The masses are patently unfit to rule. “Democracy” is only a way to prove it to them.

Once the democratic experiment has failed the people will turn to another tyrant to restore order. That will be the communist or some other savior in name only. They will then reestablish a form of feudal system where they and their children will be the aristocracy and the benefits of society will be distributed by political merit instead of by market means.

There were protyranist elements in colonial days but they were separated by kilometers of ocean and were easily turned against one another. Just as today’s protyranist turns capitalist elements against each other. To reestablish the new fiefdom will take the same tactics as it did to destroy the old feudal system.

But really, who doesn’t want to live under a feudal system… like communism? It is great. You have no decisions to make your lords make them for you. If you are lucky you will be the equivalent of a serf in the new system. Then you will be looked after by your lord, or owner, depends on how you look at it. But really what could go wrong?

Everything. The loss a functional market system under a Caliphate or some Socialist fiefdom would throw humanity back into another dark age. One that I am sure we will pull out of, eventually, and reestablish a functional market but the loss to humanity would be incalculable.

There is a basic Republican system, that provides a standard, for new revolutions to follow in forming their new “Democracies,” it could possibly benefit a few. But, if any are helped, the better for us all. The standard, rarely followed, is the US Constitution, (arguments for and against) and the Manifesto of the International Capitalist Party

The Price of Anything

Thursday, March 10th, 2011

Dear Friends,

It seems to me, that everyone who has grown up in a market based economy, should have a basic understanding of the way supply interacts with demand, to reach a price equilibrium, and that if demand is reduced, cost goes down and if supply is reduced, cost goes up. But I run into more and more people, who profess no knowledge of this economic law whatsoever, and maintain that it is totally the oil companies that set the price of gasoline.

The supply, real and perceived, of any thing, not only commodities, is a factor in it’s economic value. The value of gold is high because the supply is very limited and the demand, for all uses, is great. The value of a thing is not determined by it’s utility, water for example is usually cheap, because it is plentiful, but put a person in a desert for a day, where it is not plentiful, and he or she will pay a fortune for it. This is another example of the relationship between supply and demand.

The Obama administration, has at every turn, made decisions that will lower the supply of crude and coal. From changing drilling regulations and outright bans on drilling to curtailing coal production the administration has proven it’s willingness to raise the price of energy to protect the environment. This is one of the planks of their platform. Energy prices will necessarily rise… To make renewables competitive with dirty energy.

Due to a hoax. The hoax of anthropomorphic global climate change. They changed the name from warming to change, because they aren’t sure if the planet is still warming or cooling, so the name, change. The global warming we have experienced from 1959 to 2008, (or sooner) has been mirrored on Mars with a congruous shrinking of the Martian polar ice caps. The predicted warming has not materialized here however. It seems to have leveled off. But what it all boils down to is this, they don’t know if the planet is warming or cooling, they don’t know the mechanism of it’s warming or cooling, but the one thing they are sure about, is that it is our fault.

With a hoax in hand they have sought to shrink the ability of the market to meet short term supply interruptions. Take bobby pins, say there are 4 factories running at 50% capacity, meeting the demand for bobby pins. Now take one factory down, perhaps from a fire, what will happen to the price of bobby pins? Probably nothing… the remaining factories can ramp up production to meet the increased demand.

Take the same example but the 4 factories producing bobby pins are now running at 100% of capacity. Take 1 out, from a fire, and now what happens to the price of bobby pins? The price necessarily skyrockets. It is necessary because, the factories remaining cannot ramp up production, they were already at 100% of capacity. So the price will rise to a new equilibrium. Higher then you would think due to the perception that the supply of bobby pins is now at risk…

The result, of the administrations decisions, is that the US is producing far less oil and coal than it could. If the US was producing even 10% more, than it is now, there would be a dampening effect on global prices. But with a hold on US oil sands, coal to oil, intractable permitting for coal, nuclear and most of the US’s coastline off limits, the US government, under this administration, is intentionally lowering the ability of the US to produce energy. This puts not only the citizens of the US at risk but the citizens of the world.

Economic production is tied to energy prices. The single biggest factor in the rise in the economic production of the worker, since the industrial revolution, is the leveraging of his or her productivity, with mechanical power. This leveraging has led to the rise in the standard of living in countries that participate in a market economy. The application of mechanical power makes the price of energy a major portion of any economic player’s cost structure.

Now that the ineptitude of this administration, has set the Middle East and North Africa on fire, like a child with a matchbook, the supply of oil in the world is being interrupted. Overtly undermining Momar has led to him setting oil wells on fire, even a hint of unrest in Saudi Arabia will drive the price of crude to $200.00 a barrel, (from Bloomberg Radio) and the continued unrest in Egypt and Tunisia is leading to a possible flood of refugees. How will that effect the world economy?

But people keep insisting it is all the oil companies…

US Budget Woes

Monday, March 7th, 2011

Dear Friends,

It seems to me that the US government must get it’s spending under control or else the spending will get the government under control. US government debt is projected to grow so fast it will outstrip the ability of the economy to pay for it in under ten years. (If the bond market holds out that long). No matter if all discretionary spending is eliminated. The pending economic disaster, which is clear for anyone looking, is due entirely to Social Security, Medicare and Medicaid. These three entitlement programs will go down in history as a warning to any other nation that would be so foolish as to implement them.

That is not to say that US government doesn’t throw gobs and gobs of hard earned taxpayer money away. Aid to China is one example. The US government giving foreign aid to China is like you getting a loan from your bank and then giving money to the bank to help them ‘make ends meet‘. While you are in debt to them an entire years salary. But the real problem is entitlements.

No matter if these entitlements are addressed or not they will not exist in a few years. Once they outstrip the economies ability to pay for them the economy will either collapse or the entitlements will collapse. When that happens the people thrown out of the entitlements, no matter which scenario plays out, will be destitute. They will suffer all the more for our lawmakers lack of grit.

Members of Congress in the US are just like children who have a term paper due. They play video games and “debate” what they will write about. Procrastinating until the paper is over due and complaining they didn’t have enough time. Then acting the exact same way on the next assignment.

There is a reason entitlements are the third rail of politics; if anyone has the grit to come close to touching it, the masses of dependents rise up and swarm like wasps. The buzzing keeps anyone sane away. But touch it, not only they must, but to wrestle with it is requisite.

Place another system under the old so that people will actually have a “safety net.” That safety net would be some form of Capitalist social security.

This would be a system where people could invest money into the system. Their money would be pooled and invested in dividend stocks and AA or better bonds. The fund would grow until the participant reached an agreed age. Then the plan would pay out fifty percent of each year’s gain, on the participant’s portion, to the participant. The other fifty percent would be reinvested. When the participate dies, his or her portion of the fund goes to their heirs, apparent or cited, and so on and so on…

This fund would grow generation after generation and there could be several funds to ensure competition. If our wise lawgivers could be asked to keep the interest of the fund(s) itself untaxed, and protect the fund(s) with legislation, from seizure by lawsuits, the fund would not only help the working man immensely, in many ways too numerous to go into here, but would provide a steadying hand for the various exchanges and economies around the world.

As people are moved into the new capitalist system their well being will be more safely entrusted and the well being of their children will be protected as well. But Social Security is the smallest of the big three. The entitlements, Medicare and Medicaid, are bigger and more intractable.

The answer to these problems is to, regulate health care insurance federally, deregulate the options and standardization of the insurance industries paperwork. There are many other ways within that government can strongly impact the growth rate of healthcare costs. Simply slowing the rate of growth would stave off economic disaster, from these two entitlements, for awhile. This was the underlying thrust of Obama care. To grapple with these two entitlements like a sniper. Without seeming to. But his way would have drowned us all the quicker.

Getting government spending under control would drastically help the economy, but it is not the only thing government does, that effects the economy and the natural rate of unemployment. Regulation and the aggregate cost of legal representation, to start and operate a firm, are other examples. Tackling these could help the job market quicker and more effectively in the short term than spending reform. But spending reform must be done; else it will do itself…

Nothing Grows in the Dark but Mold…

Thursday, March 3rd, 2011

Dear Friends,

It seems to me that any capitalist enterprise is always held to a much higher standard than any governmental or public entity. This seems to be universal as far as I have looked. If anyone knows of a confounding example please let me know. The more I look however the more the theorem appears proven, but, just because I look to no avail for black swans, that doesn’t necessarily mean there are no black swans, there may be an example, of a public entity being held to some standard, in history.

One recent example is the appearance of for profit colleges on the scene. They fill a valuable niche for non traditional students, (who are far more at risk of defaulting on student loans). The government has recently passed regulation that applies to them only, not public universities. The government seems to be in the process of, ensuring many people stay unemployed or under employed by regulating this sector of the economy, with the intent to wither it on the vine.

Cost is one argument against for profit colleges. But they are a new sector in the economy and as in all things new, patents, copyrights and new ideas, there is value in being the first with new innovation… monopoly profits. As new people enter the new market they naturally drive down the profit until, if lasses fair regulation has been implemented, the sector will reach perfect competition and the cost will approach close the cost of production.

How, you may ask, did the government do that? Because the government guaranteed loans that for profit college students have, government claims, make up 50% of the defaults, while they constitute, less than 50% of total student output. Some students claim, that they cannot get the job they studied for, because the school has not been accredited. No one has claimed, to my knowledge, that their education is in some way was or is inferior, just that government will not recognize their degree as being valid.

With no means of testing to see if the requisite knowledge in the applicable fields, government effectively closes the doors for those graduates, then when the older graduate, who is more at risk to default for many factors, cannot get employment at the career he or she studied for then inevitably goes into default, the government has something to point to and scan then subject one, politically disfavored segment of the education sector, to onerous regulation, while ignoring the other, politically favored, sector.

To complete the government’s, behind the scenes play, was that, last year, the government nationalized the tuition loan segment of the banking and loan sector of the US economy. Creating a whole host of pernicious incentives, that mirror the government’s, unexamined, hands in the home loan debacle that so recently hobbled the American economy and is still holding the ankles of the US economy at an unnatural angle.

But government never comes under examination. It’s like government’s, politically favored groups and segments of society, have an invisibility cloak. They simply swoosh it over themselves like Dracula and do whatever they want… because they are invisible. Anyone who questions them is called crazy, a conspiracy theorist and a kook. Ridicule and vitriol are heaped like dung in a barn.

Take Fanny Mea and Freddy Mac’s role in the recent housing crisis. It was government regulation that required loans be given politically favored groups regardless of their ability to repay. Those that formulated the policies must have believed that the bad loans would be absorbed by a less politically favored sector of society. Redistributing wealth underground so to speak.

The resulting tidal waves of bad loans grew in frequency and magnitude until the financial levees were overcome. Many very old and cagy institutions fell and many people lost millions of dollars. Government immediately pointed the finger of greed at the banking executives who were the politically unflavored group that was supposed to absorb the bad loans in the first place.

We have had Oscar winning examinations into the actions and motives of Wall Street executives but not a single one about Fanny Mea and Freddy Mac’s roles or especially government regulation or the proponents of those regulations. But don’t worry… we won’t. The Elite cover for the Elite. There will be no peering documentaries about the role of regulation in the financial crisis.

Because government, while criticized daily, is never actually critically examined, but capitalism, which is the font of our prosperity is constantly poked and prodded to find even the smallest fault. Like a Dane who examines his levees with a microscope, while the dams holding back the sea are pouring rivers in behind him. I wonder… Is it the Dam’s fault of the Dane’s his land is being lost to flood?