Archive for July, 2011

My Day at the Bank

Sunday, July 31st, 2011

Dear Friends,

It seems to me that:

The bustling city street glistened from the recent rain. Walking down the lane, the sun was poking out from behind the clouds, and my shoulder, turning on the drops still clinging to the leaves into diamonds. I turned and walked into the bank. The banker had called me and wanted to talk.

His mahogany office smelled of paper and ink. A primitive computer sat on his desk. The Banker sat on a overstuffed leather chair. I strode to the chair opposite and plumped down crossing my legs and leaning back. The Banker looked up and smiled, “Sam,” he said, “I wanted to talk over your finances.” He looked down at some papers then continued, “It appears that you have been increasing your spending at 10% or more every year, while your income has only risen 2-3% a year.” He flicks through some papers and shakes his head, “You even project spending increases at 8% for the next ten years while income is projected even lower.”

Furious I spat, “Are you stupid? In that projected budget I cut spending over ten years!” The Banker was aghast and responded, “Your debt to income ratio is getting so out of control that your credit rating is being effected. Some banks down the road have even downgraded your credit” I immediately snapped back, “Are you threatening me? I have lawyers that will look into your finances and believe me, they will find something, and don‘t worry about them, I have already filed lawsuits…” The Banker sat back, breathed out a long sigh and said, “Well, It’s your call.” I stood and walked out. How could he have the audacity to say such things! I went to my CPA.

He sat typing on his laptop, his phone cradled in his shoulder, the smell of cigarettes in the air. I sat down and looked around. His office was cluttered with papers piled and books stacked. “Ok, I’ll get back to you tomorrow.” The accountant Hung up the phone and looked up, “Well, I guess the Banker talked to you.” I stared at him for a few seconds, “I will just take more revenue from the business.” “But if you talk more from your business, you will diminish it’s yield.” He responded, then went on, “The best answer is to establish a budget that you must live under.” “You are acting childish,” I said, “You keep acting like I can cut spending, too many people depend on me, and the dependants are growing every day!” “That is because you buy everyone a free lunch. Most of your debt today, and projected, is for going out to eat.” The accountant replied dryly.

I sat back, again confronted by an imbecile, and said, “Ok, If I have to cut spending I’ll eliminate the security service.” But the fool accountant said, “You live in the most violent neighborhood there is, if you do that, you will certainly be robbed and maybe even killed!” I responded, “You really are dumb aren’t you, if I eliminate my security service, it will demonstrate to the hoodlums and gangs that I pose them no threat and they will like me.” I went on, “they are just people who are misunderstood.” The idiot accountant said, “But a few of your neighbors are building bombs and claiming they want to kill you.” I responded, “I will never be at war with them.”

The accountant sighed and said, “Whatever, but your business is already straining under the draining your giving it. I project your spending will start to increase exponentially due to you promises of future free lunches to more and more people.” I replied, “You keep singing the same old tune, I’ll cut the security service and take more income from my business, stop being such a child and make it work.” I got up and went home.

When I got home my wife met me at the door. “We have to talk about the finances, I don’t like the idea of shutting off the security service or taking more from the business. I want to establish a budget!” She bitched. I had had about as much as I could take, so I slapped her down, right on the doorstep, to the applause of the people I had been feeding. It made me feel so strong, and the cheers, so good.

Too bad my house was broken into, my wife was killed,, my business failed and the people I was supporting starved to death. I just don’t understand how that could have possibly happened?

The World’s Debt Crisis

Thursday, July 28th, 2011

Dear Friends,

It seems to me that the modern welfare state is showing some of it’s weaknesses in the debit crisis that is engulfing the industrialized World. Winston Churchill is credited with having said, “The problem with socialism is that eventually you run out of other people’s money.” This is proving to be the time when we run out of other people’s money. Which brings up the biting question, What then, if welfare state capitalism fails, or more appropriately, bankrupts us?

What is the fall back plan. It seems there is none. The socialist parties in Europe and the democrat party in the US are hell bent on spending. The ability of the credit markets to fund the profligate spending in Europe is being curtailed. It seems that as a country’s debt gets at or above 100% of GDP the markets start demanding a premium and so the country that exists on borrowed money grasps that it also is living on borrowed time.

Governments in welfare states have stretched Keynesian economics into a physically impossible toroid. They spend in good times and bad, “to keep the economy running.” Keynes did not ever advocate government deficit spending every year under every economic condition. His advice was very specific, that under conditions of a demand generated economic slump, government could deficit spend as a way of kick starting an economy. As a short term stop gap measure.

The truth is, a dollar of government spending is not equal to a dollar of private sector spending. When government needs products or services it has a very defined method. If no half witted nephew provides the product or service it goes to firms that specialize in servicing government. This specialized field does not lend itself to propping up firms that have traditionally served the private sector. Another reason government spending is not as effective is private sector spending is government spending is necessarily reactive not proactive.

Government spends to fix a problem government has created. Often as a make work project. Money spent this way does not improve a person or firms ability to produce a product or service. It is spent on something that will need constant funding. Even the most productive of government spending is hobbled by government bureaucracy. Spending on infrastructure is made by bureaucrats that build in obsolescence. When told that a bridge could be built that would last a thousand years with almost no maintenance at a cost comparable to modern bridges a State engineer exclaimed, “What will people do in twenty years without the bridges needing to be rebuilt?”

The socialist and communists in Europe and the democrats in America claim that money given as a dole is then spent in the economy. That stores are thus propped up and cigarette manufacturers are kept going. That the dole provides a means for those that have none. The dole is the least a prosperous society can do for the less fortunate among us and who could be so mean spirited that they would deny a child food? All strong emotional arguments that make perfect sense as long as you don’t think about them long. They work best if you just let your emotions wash over you and make your decisions for you… no thinking required.

The strongest, logically, is that money given as a dole goes almost directly into the pockets of storeowners. This seems logical… But, as Bastiat said about the broken window, this line of reasoning presupposes that the money would not have been spent otherwise. Of course we know money never just sits around unless someone hides it under their mattress. Money is spent taxed or invested.

If there is a locality that is bereft of job opportunities it is in the interests of the people living there to move to where there are jobs. To use State welfare as a means to hold people in an impoverished area is no benefit to them. Government does no one a service by keeping people unemployed to the point of training them to become unfit to engage in work.

So, I ask the big hearted communists, democrats and socialists, what will become of your dependents when government can no longer borrow the money to feed the starving children? Will the communist, socialist and democrats step up with their own money and give alms? No, it will be the traditional supporter of the poor, the Church. The much aligned Church. Of which the democrats, socialists and communists claim must be separated from government. Even as they seek to bankrupt the Church through lawsuits. Well, the communists, socialists and democrats are always talking about the population problem. Maybe this is their final solution for poverty…

Jobs and Demand

Sunday, July 24th, 2011

Dear Friends,

It seems to me that the one thing that would improve the lives of every human would be to drive up demand for labor. This would have several positive effects, wages would increase reflecting the sliding demand/supply curve, more people would be sucked into the workplace as a result of the lowering unemployment rate, and the increase both in labor participation rates along with the increase in wages would allow people to invest and spend more, all having a net positive effect on the economy.

Rising demand always, at least in the short run, drives up costs, as supply struggles to catch up with new demand. Labor is no exception. Malthus claimed that the masses would reproduce themselves into poverty, thus his “swamp of humanity,” but we see his conjecture has not come to pass. Along with all the many other anti capitalist theories prognosticating the fall of the market system as a means of production. The fact is that the lot of the worker has improved every decade since the inception of the market system. Since the ejection of the Jews from Spain and their immigration into Denmark. So we can safely say that rising demand for labor, no matter the type demanded, increases the rate at which labor is paid.

The participation rate would increase due to the rising wages. As wages rise those that are only moderately comfortable in the dole will change their status from dependant to producer. This has many positive effects on an economy. As participation rates improve, the GDP per person improves. GDP per person is an important measure of the standard of living in a society. Higher GDP per person equates to better standard of living. Look at it this way, if a person is dependent on the welfare state, he or she lowers personal GDP as much as they get in dole. If that person becomes productive their wages are added to GDP instead of subtracted. So we can see a doubling of the effect on an economy of a person moving into the job market.

The new money that is created in an economy with a rising demand for labor drives up saving and spending. Investment improves the balance of trade of a country. Every Euro, Dollar, Ruble, Peso or Drachma saved goes into the aggregate supply of investment money in a society. If the demand for investment money in a country exceeds it’s native savings rate the investment capital comes from foreign sources. Those foreign monies subtract from the aggregate balance of trade. All demands for capital contribute to this, from a house loan to government deficit spending, they all effect the balance of trade.

Spending creates more demand for products, goods and services. Additional spending in a country drives up demand for everything which drives up demand for labor. Take our long suffering sofa salesman. The sofa he sells had to be made. It had to be packaged, the packaging had to be also made. The sofa had to be shipped to the store. Which requires trucks and men. The sofa has to be shipped to the buyer’s home. Then the packing material must be disposed of. The economic impact of a single purchase goes far deeper into an economy than most people think. So any increase in the purchasing power of the masses translates into a huge economic impact.

Of course all these goods are predicated on an increasing demand for labor. So we must honestly ask, “What gets in the way of increased demand for labor?” Regulation, corruption in the public service sector and too burdensome taxation are the biggies. Notice the first I mentioned was regulation? Regulation is corrosive to the creation of small business. The more rules that a potential small business owner faces the lower the likelihood he or she will take the risk. Every regulation raises the likelihood of a startup failing. Every regulation is a far greater burden for a small business to bear then a giant mega business and regulation drives up the cost of labor subtracting from any increase in wages. All in all regulation is a drag.

If the US government really wanted more jobs and a greater labor participation rate, it would rescind the Healthcare Law in it’s entirety, and to save the dwindling number of small banks, repeal Dodd Frank. These two actions would quadruple the demand for labor in the US overnight. But the Elite prefer to fight over how quickly which side will bankrupt the country. When the truth is, eventually, probably sooner rather than later, the US government will have an auction and no one will come. Then the demand for labor will drop… World wide.

On Somalian Famine

Thursday, July 21st, 2011

Dear Friends,

It seems to me, if the Romans had fed, clothed and housed the civilian population of Carthage, history would not have been written in Latin and we might be worshipping Baal. Had the Allies fed, clothed and provided medical care to the German people during WWI or WWII then we would probably be speaking German. It is patent folly and moreover stupidity to provide logistical support to an enemy in wartime. The side that engages in providing logistical support for the enemy’s civilian population may be more civilized, on some level, but is it really civilized to facilitate barbarians wiping out civilization? I, for one, like civilization!

To be human hearted is noble and civilized. We all seek human heartedness in our lives and the good among us seek to bless society with human heartedness. To have empathy for the suffering of others is the table facet of human heartedness. The suffering of people, is the worldly manifestation of evil, and so it is unconscionable. We should all seek to lower the level of suffering in the World. It is in our personal interest to do so even when that suffering seems far away.

Lets say you have a full water skein. You notice it has a leak. Does it make sense to put your hand in and plug the leak? No, your hand will displace far more water than the small leak will loose in an hour. With dubious results of actually fixing the leak. We can safely say that the repair will do more harm than the problem. If we can adhere some material to the outside, temporarily, we can use the skein until it is empty then we can repair it properly.

The same is true of human suffering. It doesn’t make sense to magnify suffering, to diminish it, especially when it creates much more misery then the original problem would have. The intervention in Libya is an example. Had the war ended months ago, (as it would have), the suffering would be over and the people would be rebuilding. But the intervention, to fix a problem of suffering, has led to far more suffering, now the Elite must save face, so the war goes on…

Lets examine the misery in Somalia today. The war and a drought have led to… hard to believe… a famine. Apparently, a state of perpetual warfare and a people who rely on a mix of subsistence farming and international handouts, is not a path to prosperity. The International community is sending aid. Mostly Britain and the US. But the war with the radical Islamic movement, Al Shabab, is hampering efforts to feed clothe and provide medical assistance to the civilians under the control of Al Shabab.

Meanwhile people are starving who are not within the sphere of influence of Al Shabab. Why not simply feed the people who do not support Al Shabab? Why is it so important to provide logistical support for the radical Islamist movement trying to conquer the country and instill Sharia? Why not defeat them first then feed the people who emerge. To provide medical supplies, food, and other essentials, to the civilians under a tyrannical military is not feeding the people, it is feeding their tormentors. The supplies will never get to the people and if some does it will be seized and sent to the fighters extra will be sold to provide ammo and guns.

The food sent to Al Shabab will also be a terrific recruitment tool for them. Join and you will be fed. Not hard to comprehend. No way that could be a bad thing huh? Until the war is over and the country has a functional State, that can protect the property of the people, there will be no end to the famines. Providing logistical support to the civilians within the sphere of influence of Al Shabab will only lead to more war, famine and suffering and perhaps, Al Shabab’s victory. Doesn’t it make sense to provide support for the free people of Somalia and eschew supporting Al Shabab?

In the longer term the answer to permanently ending the cyclic famine in Somalia, is to defeat Al Shabab and establish a stable government. Then keep regulation low, taxes low, and keep a tight grip on public servants and government with a NUMA. If this is done the economy of Somalia will grow rapidly. Industrializing Somalia will break the cycle of famine there forever. What could be more human hearted than that?

When a country or ideology is engaged in an existential war then that ideology or country must engage in war. This is simply the framework of reality we have to work within. Civilized suicide is a sin. The loss of civilization to barbarism compounds the vice and is no virtue no matter the intentions. Clausewitz would be indignant at the notion of providing logistical support to the enemy population during wartime. Hsun Tzu would be clicking his tongue like a school marm at a rascally student…

By the way, “Death to Carthage!”

Politics and the US Debt Debate

Monday, July 18th, 2011

Dear Friends,

It seems to me extremely disingenuous for the politicians to have created this budget problem and are now using it to attack each other. The ramifications, for not only the US economy, but for the World economy as a whole is enormous. We have watched them nail this problem together plank by plank for years, and now they stand astride their creation, claiming it will destroy the universe unless the are given even more power. Taxes must be raised and investments must be made else it is woe to us all!

When George HW Bush was elected he ran on a pledge, “Read my lips, No new taxes!” But the first thing he did, was negotiate with the democrats to control the deficit… and raised taxes. The tax hike lowered the economy a bit, but the greater result was, that his political base lost trust in him. Bush lost the election to Clinton largely as a result of stabbing his base in the back.

The modern analogy is the newly elected republicans, the Tea Party republicans. They were elected on a platform of no new taxes and even pledged as much. To get them to turn on their base and raise taxes is a suicidal to their political careers. Since they are the biggest roadblock to the progressives dismantling of the Capitalist system in the US that is a great motivation to Obama and his progressive friends. So we can see the stakes are very high.

That is why the Tea Party caucus in the republican party are so insistent and the reason the progressive caucus in the democrat party are so insistent, Both side of the political spectrum see this as a existential issue to them. The democrats believe that they can effectively vilify the Tea Party caucus as unreasonable, and responsible for all the economic problems facing the World today, in this way the progressives can regain total power for another election cycle or two, furthering their plan to bankrupt the US and blame Capitalism.

Finally however, the republicans are doing… something. They are supposed to pass a bill and send it to the Senate. The Senate can then reject it, amend it or pass it as they see fit. It is about time the republicans acted spending bills must come from the House. The democrats demagogue the bill as a nonstarter but they conveniently forget they can amend the parts they see as deficient. After all, isn’t that the way divided government is supposed to work?

One side passes something, the next body amends it then the two get together in committee to reconcile their version of the bill. Then the reconciled bill goes to the President for his signature. (That was the gist of the cartoon I watched as a child on bills and Laws). The republicans are supposed to pass a spending bill on Tuesday. Then send it to the Senate. We will see if it gets any consideration at all.

As for the democrat plan to cut some perks for the “rich.” The most advertised example is the corporate jet “loop hole.” It is vilified as a way CEO fat cats can get a corporate jet at taxpayers expense. While it may be true that a corporation that pays a 25% tax rate would have 25% of a corporate jet covered at taxpayers expense the rest would be at the shareholders expense. This argument misses the fact, however, that there is an industry that derives it’s income from the purchase and sale of corporate jets.

The effect on this largely US industry is never examined. The possible effect on the well paid jobs is not even considered. How many fewer jets will be sold if the ‘Loop hole” is closed? How many jobs lost? But, is it even really a loop hole? For it to be a legitimate loop hole it must not have any reasonable purpose except to enrich a few at the expense of the many. In this case the question we must ask ourselves is, “Is there a legitimate corporate reason to have a corporate jet?” Because if there is, then it is no a loop hole at all, but if there is no legitimate reason for a corporation to ever have a corporate jet, then it is a loop hole and should be closed.

We have to examine these questions in the light of the fact that the people that run the show are responsible for the outcome. They love to create a problem and then blame others. If we want to really decide what party or faction is working for the benefit of the people or are merely egoists we can ask ourselves this question, “What side or faction is taking political risks by voicing their ideas and writing them into bills and actually voting on them, and which party or faction is only making speeches, threatening old people and simply demagogue any idea they hear?” The answer to that question will clarify this one, “What is the actual goal of the progressives?”

“rights” vs Rights

Thursday, July 14th, 2011

Dear Friends,

It seems to me, many people believe that food, clothing, shelter, and healthcare are human rights. While it is absolutely a fundamental human right to have access to them, it is not a right to have someone else pay for them, unless the payers so will it i.e. alms. The difference is not only important because it has implications for meeting the needs of people but it has even deeper implications for liberty in a society.

The right to access all the things that are necessary for life, is fundamental in that, for one thing, if anyone is denied access to them, it is always for a wicked purpose. From racism or religious intolerance to mere larceny it is incompatible with a civilized society. If a person who has every history of careful use and responsible citizenry tries to purchase a good, product, service or rental, in a true capitalist society, one that values the rights of Man, they must be serviced. There can be no other way in a civilized society. Civilization being the operative concept in any true consideration of our fundamental human rights, ie whether a “right” is fundamental or serves a nefarious purpose.

Take the generally recognized right to freedom of religion. It is a right that need not conflict with anyone else’s liberty or actions. If a group gathers for mass they do so as a group. No one is forced to attend, (accept for a few impish kids). No person who is not of that flock is forced to pay for the heat, water, air-conditioning or priestly pay. Those that follow pay and society is enriched at their expense.

Take the “right” to food. The person who holds up his fist and demands others pay for his food or he will muster an army and take what is “rightfully” his is a criminal (unless the food was taken from him or her in the first place, but that is a different blog…). Demanding then taking for his pleasure what is not his makes him no different than Jeffrey Dahmer. There is no difference between a single robber in an alley putting a gun to your back and taking your wallet, a mob beating you because you are, a Jew, Black, White, Asian, a capitalist, a communist or a Presbyterian, an army confiscating your food, or a tyrant simply taking your home. As Tzu Ssu basically said, for a person to see a black dot and call it black but to see many black dots and call them white, well, that person’s eyes must be aflutter.

Take the generally recognized Right of freedom of speech. It demands nothing of anyone else. A flyer I post may be read, or not, at the will of the passersby. I can speak to my friends of whatever we feel like without imposing on anyone else. If our voices are too high and we are asked we can lower them to keep within the civilized norm. The Right to freedom of speech does not require the government to rifle through my things looking for anything I may have hidden from them. Freedom of speech actually requires the government to stifle it’s predilection to impose on it’s citizens.

Take the “right” of clothing. In order to have all people clothed in a society requires, as a prerequisite, a means to provide the clothing, for those that will divert that income to fun instead of needs, letting the system intercede to cloth them at the level that is appropriate for the society in which they live. This necessitates whatever system that is set up to gather substantial income, to pick up the slack for people who will see that it is in their self interest, to have others pay for their necessities and use their income for frivolity. Substantial Income, no matter the source, comes from the common font.

The common font is the national money supply. No matter whom the money the common supply of money for investment, demand or new supply cannot be made if it is taken from the common font. Someone might say, “the money is put back in in the purchasing of garments and the other money is used to promote a lighthearted lifestyle.” – That is absolutely true, that the money is put back in purchasing garments, but, the money is not best spent on allowing people to divert income from necessities, to enjoyment. It is better invested in efficient demand, investment or new supply. Money that is probably better, (more efficiently) spent is diverted to the egoist.

The efficiency of a dollar spent in an economy is important to the increasing standard of living. The less efficient a dollar is spent the less it improves GDP. If a dollar is sufficiently misspent it actually diminishes GDP. A dollar spent buying a slave is an example of money spent that actually diminishes GDP. Money spent to purchase the means of production is generally the most efficient money spent. Money spent to purchase the production of the machine earlier purchased is well spent in terms of efficiency, (as long as it meets an actual need).

It seems clear that what is a “right” and what is a Right can be determined in several ways; if it requires, enlarging the powers of government, someone else paying for it without their consent, forces another to cede an actual Right, makes the receiver of the right dependent, gives people stuff, requires government intercession into the lives of it’s citizens or violates civilized behavior then it is not a right at all, but a trap. If however it, gives people power over government, stifles governments negative predilections, gives people freedom of (action, thought and values), demands nothing of others but tolerance and/or protects people from persecution, they can be rightfully called, Human Rights.

The US Debt Ceiling

Sunday, July 10th, 2011

Dear Friends,

It seems to me that the US debt problem is secondary to the jobs problem. The continued loss of jobs has a tremendous effect on workers today but the effect magnifies over time. If you are a worker or know a worker this effects you deeply. The debt negotiations, while extremely important for mid term problems, are overwhelmed by the oceans of new red tape this administration, along with the last Congress passed, has effectively chained the economy and small business.

Regulation effects small business much more than large business. A small business owner has all he or she can handle keeping it from flying apart. Payroll, taxes, workers comp, accounts payable and accounts due are only a small fraction of the headaches of the small business owner. When this enterprising individual is also loaded up with new and changing regulation it effects this profits, time management and overall profitability. The regulatory ground literally moves beneath his or her feet. This is profoundly impacting the job gain and loss in the US. But the political rhetoric goes on. So here’s some…

President Obama claiming the Republicans are obstructing real negotiations on raising the debt ceiling is like a guy walking up to you in a crowd, then demanding your wallet, with the treat of shooting a random person in the crowd, you refuse and he shoots someone, then he charges you for obstructing him and causing the bystander to get shot. Obama holds the gun… Congress the wallet…

The Democrat argument about taxes on the rich ring hollow to me. What they really mean, is they want to raise taxes on those that are trying to get rich, not on those who are rich. The difference is that those who are rich derive their taxable income as trusts which are taxed at 15%, the people the Democrats are proposing raising taxes on, are the entrepreneurs of our society, taxes on their productive income are 33%, the administration wants them higher. How, may I ask, is punishing the job producer going to lower the unemployment rate? It is apparent the entrepreneur is the real enemy of this administration. With war being waged on them on two fronts.

The one thing everyone is talking about is taxes and spending but the more important one is regulation. Every time the Congress passed a two thousand page bill in the last Congress, it fluffed up into ten thousand or more pages of regulation, once it came out of Cass Sunstien’s office. Regulation is not threat to the uber rich. (The enemy according to Obama). They produce nothing, and to most of them there is a total disconnect from the US economy, as their investments are global and they often have assets of real value like gold as a backup. Usually held in banks not subject to US confiscation rules. But they uber rich have done very well under this administration while the entrepreneur has done poorly. The economic numbers lately have reflected this fact.

Stores and businesses that cater to the uber rich are extremely profitable in this business cycle. While stores and businesses that cater to the average person are struggling. So empirically we can say,, the rich are doing great under this administration, but those that are workers or people trying to run businesses are struggling. (unless their business caters to the rich).

“Now come on,” someone might argue. “why would this administration and the rich hate the entrepreneur?” I would argue that Joseph Schumpeter made a much better argument then I could ever muster. Boiled down it is: the entrepreneur is a threat to the established rich. He causes the established rich much fuss, the established rich must improve their products lest they go out of business, they must stay up late to keep up with the hungry entrepreneur, profits are lowered and in the end… he is usually supplanted by the entrepreneur.

So, armed with taxation and regulation, the established rich slam the door of prosperity shut behind them. ‘There is no sense anyone else becoming rich, to want to do so is to be greedy, but to be born rich is to simply live in the state of affairs as they are.” This self serving logic is the reason the unemployment rate is so high.

But most of us are workers. We have the political power in the form of the suffrage. We suffer those who rule us to rule us. If we want different results maybe it is time to try different tactics. Tax and spend has always worked… to keep the established rich, well rich, but never to expand an economy. Maybe raising taxes, spending more and increasing regulation may not help with the job numbers… but don’t we hate those rich people. Er. Not the really rich, only the guy who gives us our job…

By The way, I just read that the government is looking into new regulation on the US chemical industry. I expect a few thousand pages or so of new regulation will ramp up competition and hiring in that industry as well…

Self Interested Voting

Thursday, July 7th, 2011

Dear Friends,

It seems to me that what the people of the Middle East need, far more than democracy, (if what they want is liberty), is a functional market system. Not only the Middle East but all over the World. People are better served to have a functional market system than to be given democracy. It is like giving someone with no experience… a loaded gun. If you grew up with a gun in your home then you are familiar with safe gun handling but if you have never held a gun it is pretty dangerous.

Democracy is the same way. Safe in hands that are used to it but dangerous in hands that are unskilled or simply negligent. Capitalism trains people to handle democracy safely. If you grew up in a capitalist society and have had access to historical information, you know that to vote for the communist party is absurd and patently not in your personal interests or the interests of society.

But if you grew up in tribal society and lived by subsistence farming with no knowledge of the historical precedents then a vote for the communist party seems to be a self interested vote. Not much different from scratching your back with a loaded gun… it may go off and blow out the back of your head, it may go of and blast a passerby or it may not go off at all, but the best thing that can happen, is you get an itch scratched…

When a person lives in a market based society he or she learns at an early age to weigh costs and benefits. This type of pragmatic philosophy is emblematic of a capitalist mindset. The cost of a given action are weighed against the potential benefits. People who never lived under such a system have a totally different means of weighing up actions. What is in the individual’s interests is the same as the tribal interests there is no distinction made.

To live in a democratic republic an enlightened citizen must be pragmatic. To vote for the lunatic fringe is to pull society towards lunacy. History shows us unequivocally how that turns out. Only free market capitalism has made people free. Free by also giving us all a measure of independence.

Independence! An anti capitalist might yell. You are dependent on the market for your goods, food, clothing, even water and waste removal. – But is not everyone at every time and every where in exactly the same circumstance? Even the subsistence farmer is dependent for his needles, dishes, clothes etc? No one can produce everything he or she consumes unless he or she is willing to retire to a stone age existence.

The worker in a capitalist society is independent because we earn the money we spend. We add our productive capacity to the aggregate and we are compensated with money. That money can be then used to purchase our needs and wants. The person who gets his or her needs met by someone else’s labor is dependent. Dependent, on that person or people, but what if the dependent’s supporters loose their ability to work for their masters. If that happens the dependent hopes to find another supporter else all is lost.

If that supporter is a tribe then the dependent supports the tribe even when it is not in his or the societies best interest to do so. The Hutu massacre of the Tutsis would not have been possible had not this been the case. People have their allegiances where they believe their interests lay. Today in Libya we have the international community getting into what is largely a tribal war. Attacking the only Middle East tyrant who gave up nuclear weapons. Interesting incentive there don’t you think?

Ataturk had the right idea, institute a market based liberal society, and freedom will follow. No matter that he was a tyrant. He considered the World as it was an astutely summed up the reason his people were backwards. He set himself to rectify the situation. It is unfortunate that his heirs, modern Turks, lack the wisdom he showed and are turning from free markets and liberty towards theocratic socialism and theocratic tyranny.

So I guess even if you grew up in a market based society it is no certainty that you will not willingly vote in tyranny. The sirens song of tyranny is lovely as it is self destructive. It is only those that are not negligent in their duty to vote and studious in their duty to vote well that protect the rights of those the are not. If too few do, tyranny is the wages, for us and our children.

American Societal Myth

Monday, July 4th, 2011

Dear Friends,

It seems to me that the only Societal Myth, that is not in fact a myth, is the US Societal Myth. A Societal Myth is an underlying foundational ethos or philosophy that is a primary motivator of the individual to transmit the society largely intact to the next generation, saving and protecting the few gems of wisdom the society has got. It is called myth in that it is mythical in scope, i.e. the Roman, death in battle is the most glorious or the Mongol’s invincibility myth, that once shattered led to the total collapse of the society. Of them all, it is only the US Societal Myth, that is mythical in scope but factual in function to philosophy. The original US Societal Myth was, of course, “Liberty of the individual is the best means to societal prosperity; limited government being the means to liberty of the Individual.”

As I said “was,” the new Societal Myth, that a faction of the Elite are trying to supplant the original with is, “only government can guarantee just distribution of wealth.” I hear it every time I listen to NPR. They keep up the drumbeat that government is the best corrective for every situation. The thrust of every piece is how the Democrats are correct and the Republicans are wrong. No doubt excellent journalism in the eyes of Politico or Media matters, the “unbiased” arbiters… Makes me wonder what NPR stands for National Progressive Radio maybe?

We can clearly understand that limited government leading to individual liberty has led to the greatest standard of living the World has ever seen. No society on the face of the planet, in the history of mankind, has ever had as a problem of the poor, obesity. It is unheard of in the annuls of time that the poor in a society must suffer the ill health effects of obesity. Yet in the US today obesity is a major problem facing the poor.

Some would argue that this is because of the modern welfare state. That the goods of society would not be so “fairly” distributed if not for the power of the welfare state to redistribute wealth. – But if not for the tremendous advances in the productive capacity of man, (due to the market system), the ability of so many to remain idle would be impossible without mass starvation. It is only in the fact that the modern market system has so raised the productive capacity of the individual that society is able to support a large and growing faction of the people under it’s care allowing them to remain indigent and obese.

Limited government giving rise to individual liberty create the conditions for the market system to function. By engaging capitalism or the market system, individuals see a very human need and fulfill it. By doing so they earn a living or get rich. As the large needs are met, the smaller needs become more pressing, and someone steps in to help us meet them as well. Prior to the invention of the automatic washing machine people didn’t change their cloths daily it was at least weekly. The invention of the washing machine didn’t actually lead to less work for the housewife of the time but to the better hygiene of the general populace.

The advantages to the people and to society when the societal Myth is that liberty is the best means to universal opulence can be seen everywhere. In the need for diversion the market system has provided us with every form of diversion possible given our level of technology. From remote controlled model dirigibles to Dungeons and Dragons online the options available to the individual are endless. Actual wealth is created thereby.

The options for enlightenment abount under limited government. The great works of the ancient World are freely available online, as are the works from the Enlightenment and Aquinas, through Bastiat to Hayak and Alinski. The individual, allowed his or her liberty, has at his or her disposal the ability to become a sage or a villain, it is only at his or her discretion. The market system makes available the means to satisfy every human need be it noble or foul. Therefore the US Societal Myth is in fact true in that it leads to universal opulence and actual liberty of the individual.

But if the Societal Myth of the US is changed then what can we logically expect? What has happened before when power has been amassed in government is the first place to look. Some examples are, the Bolshevik revolution of 1917, the National Socialist Workers Party election victory of 1932, Mugabe’s revolutionary victory or the Khmer rouge in Cambodia. History is unambiguous about the results of government, (politics), being the adjudicator of the just distribution of the goods of society. History is also unambiguous about the results of individual liberty from limited government…

So, why would anyone fall into the trap of government arbitrating the just distribution of the goods of society? Especially when the original Societal Myth has been so fruitful.

But moreover, wouldn’t it behoove countries and societies to change to the American Societal Myth, and reap the rewards for themselves?