Archive for July, 2012

Politicians Playing Games With Our Economy

Monday, July 30th, 2012

Dear Friends,

It seems to me that our economy is far too important to play games with. Economics is a powerful tool for the politician, to store up power and then to hold that power, making it a bauble too enchanting not to sport with. Not only our wealth is put at risk, when politicians toy with our economy, the future prosperity of our children is also threatened.

Most of the countries in the World today, who call themselves democracies, are actually representative republics. Those who are elected are put in place to represent the interests of the electorate. Unfortunately the politician who gains office, represents his or her own narrow interests, instead of the interests of the people who elected them. In economics this is called the “Principal Agent Dilemma.” The Principal Agent Dilemma is the result of human nature. Politicians, who are human beings and are subject to all the greed, hubris and fear, that all people are subject to, seek first of all, to amass power and then to hold onto that power.

When a politician sees an opportunity to gain power he or she takes it. That is why almost all politicians believe in gun control. It lowers the level of sovereignty of the individual and puts him or her more under the power of the State. No one believes gun control will solve the problems of violence in our society, because criminals will not give up their guns… only lawful citizens will. Lowering the power of the individual doesn’t solve what incentives cause. Politicians love distributive justice by political favor. Especially since it is the politicians who have the most political favor. Although they know that this form of distributive justice is the lease effective at growing an economy, it is their favorite form, because it amasses power for the politicians and lowers the power of the individual.

Amassing power is only one aspect of where the congenital nature of Man factors into politics. Power accumulated is useless if someone else wields it. The astute politician, not only seeks to raise all decision making to the government where they are the arbiters of who gets what, they must then hold power to have that say. Brinksmanship is the currency of perpetual power in the hands of the Elite. That this brinksmanship risks the people’s prosperity does not even enter the thought process of the politician… unless it threatens his or her power.

Distributive justice by political favor is a tool the Elite can use to close off those people who threaten the politician’s power. The example of Chick Fill a is instructive. The founder and owner made a statement of his deep and profound faith in Jesus Christ and his happiness in his marriage to only one woman… is obnoxious to certain politicians. As a result they are using the power of the State to keep Chick Fill a from opening new stores in Chicago… and I suspect, the friction to the expansion of Chick Fill a will be nation wide. There will be none opened in Vermont for example without millions of dollars spent on lawyers and a Supreme Court decision.

The so called fiscal cliff is another example of politicians playing games with our livelihood. They are not effected because they will continue getting rich, without having to meet anyone’s needs… but their own. The people who must meet the needs of their customers to make a living, Ala, “Adam Smith’s invisible hand,” will have their outlooks diminished profoundly. The democrats want to extend the “Bush tax cuts” only for people making less than an arbitrary number the politicians have conjured up to generate class warfare… and only be extended for one year for the rest of us. This is brinksmanship of the highest order. The extension will do nothing to address the uncertainty, it will punish small business by raising their taxes, and it is only a means to change appearances, not rectify problems.

The other aspect of the Fiscal cliff are the across the board government spending cuts that are included in the debt compromise. Lowering government spending, no matter the form, is terrifying to the Keynesian. Keynesian economics being a self serving theory for those that seek distributive justice by political favor. The demand side politician selfishly claims government is the engine of the economy, and it follows that, they will sound alarms at any and all cuts in government spending… (their power). Supply siders, or followers of the Austrian school started by Ludwig Von Mises, have a different view of the economy. We believe that private citizens are the source of economic growth, and government is, more often than not, in the way.

We are poorly served when our elected officials act in this way. As they continue in their quest to be the gate keepers… points of GDP growth are shaved off forever. The outlook for us and our children is lowered to pay for the politicians power. Even one point of growth carved from GDP every year, multiplies into a huge diminishment of our standard of living, getting redoubled over and over every year. Is this what we want from our leaders or should we demand something better? Maybe we are too asleep to even notice…


John Pepin

The Means to Tyranny

Thursday, July 26th, 2012

Dear Friends,

It seems to me, when you build a chair in a wood shop, it doesn’t immediately pop into existence, it must be planned, the wood cut, jointed, planed, sawn to size, fitted, assembled, glued, sanded and finally coated with an appropriate finish like polyurethane… the same thing can be said of converting a liberal, capitalist, culture, society and government, into an oppressive, socialist state. The state cannot change overnight unless there is a revolution. Where revolution is impossible, then it is necessary to take the long road to tyranny…. like building a chair.

In both processes there are steps that must be taken. To change a liberal state into an oppressive one, it is critical to change the definition of liberty to oppression… without the people knowing what you are doing. The means to this end is facilitated by control of the information infrastructure. This is the first step to the job. Once control of information is established, in the culture, society, schools and government, this power must be used to inculcate the new definitions, so much so, that they become ingrained in the people. We accept what we are immersed in, without challenge, because we give our surroundings no thought. If we live it, breathe it and hear nothing but it, it is our truth… even if it is fiction. Perception becomes reality.

Once good is called evil, and evil is called good, the would be tyrant is well on his way to molding society and culture closer to his desire. All the incentives in society must be negative and pernicious. Next the would be dictator needs to introduce this new ethos into the workings of government. Since liberal government usually has some controls, in the form of a legislating body and judicial body, they need to be perverted from their original mission, to the task of changing government, from an institution that protects the liberty and property of the people, into one that redistributes, the liberty and property of the people.

The next stage is to make the government the gatekeeper for all that is good. God must be erased as the source of human rights and replaced by government. Distributive justice by political favor must be installed in the people’s minds as the best and most just means to all that is good. Government can then dole out goods to those that are helpful and cut off those that are unhelpful. This makes compliance much easier later in the process.

Liberty has already been redefined by this stage, so the totalitarian simply needs to use some pretext to convolute the Constituted law, to meet his needs. If the legislative body is reluctant to drastically convert the public weal, then the judicial body can be used to do it, by fiat. Since the judicial has the last say in law, it can get away with usurping the power of the other branches of government, without the public lifting a brow. Anyone who complains will be vilified into submission by the information apparatus.

As society slips deeper and deeper into the morass of tyranny some will wake up. They need to be controlled and marginalized by the information apparatus such that the people consider the potential counter revolutionary a kook, a conspiracy theorist, a nut job. The informer can be denied basic goods and services, if that is insufficient, their careers can be destroyed, due to the governments gatekeeper status. If necessary… the provocateur can be charged with some made up crime. The information apparatus will swamp the people in propaganda, and the person who tries to wake up society to the pernicious means of the encroaching tyranny, will be neutralized.

At some point the economy will collapse, due to the burden government imposes on it, creating the perfect conditions for the final usurpation of power. The information apparatus can be marshaled to claim that the only way out is total government control of the economy. The people, who have been thoroughly indoctrinated in the philosophy of state-ism, will fall into line and the tyrant can step into his rightful place… as President for life. The people have become slaves to the state and the liberal, capitalist, free society has been changed to an oppressive, Marxist state, without a shot fired.

Not that anyone would do such a thing, they would be evil incarnate if they did.


John Pepin

Philosphies of Hate

Monday, July 23rd, 2012

Dear Friends,

It seems to me, that the elephant in the room no one is talking about, regarding the latest Colorado shooting, is the extreme level of violence coming out of the Wall Street protest movement. What is it about this movement that generates such hatred of our fellow man, that could push the unstable to kill so many people? How is it that people who engage in this protest have become so violent and blood thirsty? When has a philosophy led to such a disregard for the rights and humanity of others? These questions have great and profound impact on the future of the human race.

The Wall street protest movement has sparked phenomenal violence in our society. There have been horrendous attacks on the people of the United States by those engaged in it. Thank God most have been foiled. The examples are notable in both their callus disregard for human life and human suffering. The bridge bombers, the campaign headquarters bombers are two that immediately spring to mind. The Colorado shooting is just the latest. There have been hundreds of lesser attacks made on the people and the infrastructure of the US by people who subscribe to this philosophy.

History always has lessons that we, and especially the Elite, are loath to remember. The Wall Street protesters have much in common with other violent movements in the past. Some have led to the worst atrocities ever committed by a government on it’s people. The Nazi movement was just such an event. The National Socialists blamed all the problems of German society on Jewish bankers. The Marxist revolution in Russia is another example, of people vilifying the “rich,” despite the total lack of rich in Russia at the time. The French revolution was another example that was based on a totally callus disregard for the human species and Christianity. The list of atrocities would fill pages and pages, taking all the paper made in the World… for a decade.

These evil and violent movements have several things in common with the Wall Street movement. They all vilify a segment of society, they are all antisemitic, they all call for violent revolution, they all use violent rhetoric, they all dehumanize others and the human race, they all call for a super state, but most importantly they are all based on hatred. To have so much in common, with some of the most violent and hate filled people in history, should be a warning sign of the potential, now manifested, in the Wall Street protests. To utterly disregard the facts and history of these types of philosophies is malpractice of the Elite and the unbiased media.

The normal villain has already been chosen by the unbiased media… American’s access to guns. This is such a knee jerk reaction it has become trite. The Elite and the unbiased media all claim that the rights of the American people, must be diminished a bit, to prevent this type of atrocity from happening again. Of course nothing could be further from the truth. Empirically, we see that where guns are the least accessible, we have the most violence. Our inner cities are teeming with random violence. In Nigeria where guns are banned, thousands of Christians are killed every year, usually by barring the doors to a church and burning to death those inside. Switzerland requires every man to own a gun and they have unusually low levels of violence. Violence precedes guns and if guns go away it will continue unabated.

So we can see, if we open our eyes, that it is not guns that generate violence, in fact, the argument against guns is merely misdirection, it is the violent and dehumanizing ethos of the stateist that is the real culprit. The rhetoric and philosophy that claims that punishing another will make my life better is as pernicious as it is evil. As William James, (my favorite philosopher) said, Philosophies must be judged by their results… not their intentions. The results of the Wall Street protests are universally hate filled as are the intentions. Those that foist this malevolent philosophy on mankind have no love in their heart… only malevolence. Maybe, instead of banning firearms, we should address the real problem and ban socialism, communism and progressivism. All are based on hate.


John Pepin

The Theory of Money

Thursday, July 19th, 2012

Dear Friends,

It seems to me that Milton Friedman’s theory of inflation and money supply presupposes a frictionless plain. A frictionless plain in economics is absolute lasses fair economic conditions. Friedman was a great proponent of lasses fair economics. I think he understood that his theory of money was effected by the economic environment of any given country. If an economy has lasses fair then Friedman’s theory is absolutely true, however, under normal economic conditions… his theory needs to be qualified. This has direct and important implications for the economic theory of money and it’s applicability to present and future economic circumstances. Our economic well being is directly effected by this theory and the qualifications on it.

The first aspect of his theory is, as the money supply is expanded beyond the actual economic growth of a country, the inflation rate will have a one to one ratio. If GDP was expanding at a rate of 1% and the money supply increased at a rate of 2% then there would be 1% inflation in that economy. This is a pretty self evident idea and is verified by graphing economic conditions in several countries over several years.

The other aspect of his theory, is that under conditions of recession where potential capacity is less than full utilization, then an expansion of the money supply may draw the economy closer to full capacity. By pulling in underutilized resources to feed the increase in demand that the additional money creates. Like the US FED has tried to do with QE1, QE2 and TWIST. The ECB (European Central Bank), has begun similar initiatives. These policies by the FED and ECB to expand the money supply, to bring the World economy closer to full utilization, have failed, and in fact have hindered economic expansion. Not due to any deficiency in Friedman’s theory but to an under accounted for facet of economics.

The under accounted for factor is the friction that regulation and political favor play in any economic expansion. To make the point, lets consider two economies that are operating at far less than optimal output. In the first, regulation is at a very high level, and political favor is required to start or expand a business. In this case the increase in money supply will not increase the utilization of that country’s infrastructural capacity. The friction that the regulation creates will keep potential businesses from hiring more employees to increase output to meet the demand.

We saw this happening in the US in the 1970s. The money supply increased, but economic output didn’t, even though the economy was operating far below it’s potential. Unemployment was high but inflation was also high. We can say that the friction, that regulation and political favor generated, stood in the way of utilization of the extra money, and so the increase in the money supply only fed into the inflation.

In the other possible scenario, we have an economic system that has lasses fair… and is underutilized due to recession. In this case if the money supply is increased then it would be easy for firms to hire more employees and increase output. This is because the friction to business is low in a country that allows it’s markets to function unfettered of government interference. We saw this in the 1980’s. After the stagflation of the 1970’s, under Carter’s government centered model of economics, Ronald Reagan instituted more lasses fair economic policies, and the economy regained it’s full productive capacity… and began growing at a fast rate.

This is why I say that Friedman’s theory of money supply is dependent on the economic conditions of the country in question. If the government implements government centered economic policies, then additional money only feeds into the inflationary feedback loop, due to the difficulties of bringing people and productive capacity back online. If however, the economic conditions in a country are such that bringing under utilized plant and workers back into production is easy, then we will see that Friedman’s theory works as stated.

Therefore, if a country’s economy is underutilized due to recession, and an expansion of the money supply is used as a means of increasing GDP, then for it to work, that country must lower the level of government interference or friction, else that expansion of the money supply will feed into an inflationary spiral, or if the economic expectations are too pessimistic, then we will see the money sit in the banking system, until economic conditions are more favorable to economic expansion. Then all of the inflation that has been banked will emerge and lower the value of every unit of currency in the economy. Inflation will appear where there appeared to be none… perhaps even hyper inflation.


John Pepin

The Hidden Option

Monday, July 16th, 2012

Dear Friends,

It seems to me mankind is at a crossroads. We are told the options are, a World government enforcing totalitarian socialism, or World government that enforces a totalitarian Caliphate. There are no other options being promoted by the World’s Elite. They are of one mind… Total World government is the answer. The unbiased media are completely on board with this pernicious notion as are most academics and political Elite. They wish to run headlong into this oppressive societal model they see as a utopian vision of World peace… the peace of the slave to the master. The individual, they see, must be controlled and re-engineered into ants, that merely serve the collective. Both are false options, evil incarnate, and will lead to more human suffering than any dictator has ever visited upon his people… Mao included.

Speaking of Mao, Obama and his allies see him as their ideal model. They have often mentioned Mao in their speeches and revel in quoting him, “Political power comes from the barrel of a gun,” Obama had a Mao Christmas tree ornament on his tree, and so forth. Mao also believed in a World government that is all powerful. Today we have both political parties in the US proposing the total state as a viable option. One wants to race there the other wants a more measured pace. No one proposes the option that was enumerated in the US Constitution… individual liberty and human equality. Mao was an enemy of individual liberty as are the political, cultural and intellectual Elite around the World. Mao championed of economic equality.

This mind set is not only pervasive in the US but we see it around the globe. Europe is racing to that goal in many ways. One is by destroying the economies of Europe. The European model of economics has the roof supporting the foundation. They see this as ingenious… that they could get the government to support the people. The perpetual deficit spending and eroding of the work ethic is another facet of this mastermind plan. The Elite don’t see any problem with more and more people leaving the workforce to become dependent. This is the natural course of economic evolution… according to them.

This model has been so thoroughly discredited by history, one would think it obvious, but the Elite lower the level of education to the point of non education. Non education being the dumbing down of children and convincing them their eyes lie while the self serving utopian politicians tell the truth. Why believe an uncomfortable fact when the Elite claim comfortable untruths as verity? Not only our children are subject to non-education but we are as well. The culture encourages this lunacy on everyone who consumes entertainment.

The unbiased media report partial truths, untruths and outright propaganda. Like the sophist redefining of human equality into economic equality. The media is filled with nonsense like, what entertainer is running around on their spouses and fiction about global warming, that has to be renamed global climate change, because no one knows if the climate is warming or cooling, or how it is occurring… just that it is evil capitalism and freedom causing it. The unbiased media withhold real truth because it doesn’t promote the party line while the movies almost universally show goodness as bad and badness as good. Look at the lionizing of Che in The Motorcycle Diaries.

History is white washed except where it backs the totalitarian program. We are regaled with every evil that the West has visited on mankind without a word to the evils every other civilization has visited on humanity. The one sided story is promoted as profound truth further promulgating the non education we are subjected to. Colonialism is preached as total evil, (which it was), while the horrors Mao visited on his people, starvation as a political tool, mass murder of dissidents, reeducation camps and so forth, are glossed over… because he believed in economic equality. Pinochet’s atrocities are given full light, while the inhumanities of the communists that he was fighting, are ignored. Tamerlane’s murderous rampages, the destruction of religious monuments, wiping out of the Egyptian language, subjugation of people, Dhimmi status of other religions, abuse of women, the invasion of Europe and all the other atrocities of Islam are forgotten. The list of misdirection, erasing history and red herrings are endless.

We are being taught to be subservient to the State. We are being told anyone who seeks individual liberty and individual sovereignty is evil. That we are bad in our hearts and that it is only the total State that can rectify our sins against mother nature. We are bombarded with the pernicious notion that God doesn’t exist and we are to worship the created, or a man… instead of the creator. All this has one possible outcome… A new World order, where we are controlled by a very tiny cadre of self serving Elite, that have total power. Our willing ignorance feeds directly into their plans.

The question is, do we want one of those futures for our children? Maybe we should wake up, and give them liberty and prosperity instead, or are we going to deliver our children into the hands of these megalomaniacs? As I said in the beginning, we are being told there are only two options, but in fact there is another. It is up to us to take the hidden option. I hope and pray we do else or children will pay a heavy price.


John Pepin

Scandal and Tyranny Go Hand in Hand

Thursday, July 12th, 2012

Dear Friends,

It seems to me that capitalism is based on trust. Without trust markets close down and money becomes just a bunch of paper. Trust is the lubricant that allows our modern market system to function. It is built by years of honest dealings of market players. Trust takes years to establish but merely seconds to destroy. Today we are seeing the destruction of trust, that will lower the standard of living of men, women and children all over the World… and possibly leading to a new world recession.

Most people work very hard for their money. After all, money is as much a representation of labor, as it is a unit of exchange and a store of value. Those who have worked hard and seek to store up that labor, so they can use it when they retire, to buy the means of production or even just as a source of insurance against the exigencies of life, are personally damaged when it is stolen. This is a strong disincentive to save and leads to a whole host of economic problems.

The banking system in our modern economies have a fundamental role in the growth of GDP. Money can be said to follow a circle. Wage earners work and then save some of their money in banks. Those banks amass that capital then lend money to people, who want to buy a home, start a business, or upgrade plant and equipment. Those companies then hire workers and the circle is complete. This entire system rests on trust in money, institutions and government.

Keeping trust in our financial institutions is a valid role of government. If we look at countries whose governments have coddled wrongdoers and recoiled at punishing their oligarchs, we see that they, universally, have very low standards of living coupled with overly powerful governments. GDP growth in countries is drastically reduced, when government is in bed with a small cadre of Elite, that are above moral behavior.

Lack of trust in institutions is a strong incentive for people to elect socialists and communists to government. This is another fact we see in third world countries. The people have lost trust in their institutions and government. It is ironic then, that the people turn to an oppressor, to stop the financial oppression. But the fact is, when someone is drowning, they will turn to anyone or anything no matter how dangerous. If nothing can be trusted, grasping for anything, we turn to the cult of personality. The cultish figure claims to have the answer, in our terror, we believe him. We ignorantly and foolishly run into his open arms… and right into the embrace of tyranny.

Today we see a constant barrage of Elite financial institutions gaming the system and no real negative consequences for them. Government regulators have dropped the ball in the US on the Madoff scandal, Enron, MF Global and now the LIBOR scandal and PFG Best. These scandals have one thing in common, they all should have been seen by the regulators but were overlooked. Remember that the SEC was asleep at the switch when the 2008 financial crisis hit. In the case of Enron, there were jail sentences passed out, but in the case of MF Global, Jon Corzine is walking free in the Hamptons. Not only free to enjoy his ill gotten gains, Congress, his fellow Elite, expressed sadness, that such a good man was damaged by the scandal. Now, with the LIBOR and PFG Best, we see that again our government has dropped the ball.

The poor showing of the world’s stock markets is in part a reflection of the pernicious corruption in our institutions and markets that has led to our distrust in them. The answer of government is to increase regulation, but there were regulations on the books… that were ignored. Had they been followed, and effectively enforced, the scandals wouldn’t have happened in the first place. But the SEC and other oversight agencies failed miserably. The upshot is, the Elite, who fail us time after time, will ask for more and more power to regulate, regulations that will, doubtlessly, not be enforced. This will lead to greater and greater oppression of us, and lowering of our living standards, with no positive outcome… for us.

The answer is not to give those who keep failing us more power, but to replace them with people who will do their job… and make them answerable to us. Giving a corrupt man more power to fight corruption is like trying to put out a fire with gasoline. In this case, it is not only our prosperity that provides the tinder, it is also our liberty and posterity. But the eyes of the Elite glitter as they douse us with gas and the reality is ugly to behold. The heads that should roll are the ones on the officials who never fail to choke in the clutch. If they don’t… tyranny befalls the foolishly naive.


John Pepin

Glittering Lies and Ugly Truths

Sunday, July 8th, 2012

Dear Friends,

It seems to me that people are easily deceived and difficult to enlighten. We are surrounded by this reality yet are mostly blind to it. People fall into traps every day and no one is immune. Not only are we constantly deceived but there is not a one among us who can deny it. This is the normal state of affairs when it comes to human beings. Our lives and our children’s lives are profoundly negatively affected by this truth.

The primary means a scammer uses to deceive us is by telling us a lie that we want to believe. It may be so attractive that we want it to be true to the point of warping our underlying sense of disbelief. The effective cheat will use this propensity against us. They know that we have this weak spot in us and they use it like a wedge to separate us from whatever they seek to gain. We willingly bite the bait like a fish a lure.

Reality is, more often than not, unattractive. In our ignorance we hope that reality is not true and so we disbelieve it. This is the reason enlightenment is so hard for us to grasp. True enlightenment is not soft or attractive it is hard and repulsive. We want to have goods without working for them, we want to be enlightened without embracing the spiny truth, we want respect without giving it and we want fame without consequence. This is the other side of the coin of how easily we can be deceived

Mankind has grown powerful by the scientific method yet we eschew it’s use in matters of humanity. We instead turn to false hopes given to us by scammers and con artists. We are deceived not by others as much as by ourselves. It is not the con artist that fools us, he only facilitates the process, we fool ourselves. We fail to use the scientific method when we weigh good and bad. Yet if we applied the scientific method we would quickly discern the truth and we would laugh in the liar’s face.

The scientific method uses trial and error, applies the law of reproducibility and disregards the possibility of magic, having anything to do with the outcome of a certain chemical reaction or physical process. When we apply the scientific method to our investigations of the world around us… we are enlightened. Our material welfare has been greatly enhanced by this method, which has uses other than exploring the world we live in, however.

Economics, social interactions, governmental processes, and law, are a few of the things we should be applying the scientific method to… but never do. We hate to look at the reality of the world when it comes to our personal lives and decisions. Take law for example, we never look at the logical outcome of a law, we only look at the behavior we seek to curtail when it is passed. As a result, we are constantly bombarded with unintended consequences, which require more laws to rectify, which have more unintended consequences… and so on. Leading to the overgrowing of our garden by the kudzu vine of law.

Economics is another area of human existence we fear the use of the scientific method. We have empirical evidence of what works, and what leads to human suffering, yet we usually choose the path to want and need. Moreover, it is those that claim to be scientifically minded, who espouse the means to poverty instead of the means to societal wealth. As I have shown, it is not out of evil that we do this, it is because we believe what we want to believe… and disbelieve that which we want to disbelieve. In the case of economics it is a result of what we mischaracterize as a sense of moral outrage and indignation, that we must allow freedom for those who have merit, to become wealthy, and thus we all gain a measure of wealth. It is more attractive to believe, against all historical and empirical evidence, that we can simply proclaim the poor into a state of wealth. Even though history shows us the misery and human suffering this results in… every time it is tried.

Attractive lies are more believable than ugly truth. Until we understand this fact we are doomed to visit want, misery and need on those we love most.


John Pepin

Why Are We In The Ditch Again?

Wednesday, July 4th, 2012

Dear Friends,

It seems to me, when a car goes into a ditch, to blame the car manufacturer, passengers, bystander or gas station, that changed the oil a few weeks ago, is ludicrous. Today, the unbiased media claim it is everyone but the driver, that put the car into the ditch. We pull it back onto the road, he puts it right back into the ditch again, and the only one who escapes all blame is the driver. The first time it went into the ditch they might have had an argument, economies go into recession it is a matter of economic reality, the second time it went into the ditch, their argument was getting weak, the third time their argument mimics the theater of the absurd. Now we are in the ditch a fourth time and the driver is pointing at the people who paved the road. At what point do we take the driver’s license away from this incompetent nincompoop? The damage to the car gets worse every time he puts it into the ditch… and we all must ride in it.

I am of course speaking of Obama’s handling of the US economy. He subscribes to the command and control theory of economics. This theory was proven wrong in Cambodia, the USSR, China, North Korea, Cuba, and now in Europe, Venezuela, and Zimbabwe. As I have pointed out many times in this blog, commend and control, or top down economics, is fundamentally inefficient. The complex system that is an economy doesn’t lend itself to one man or a small cadre of powerful officials ordering it. Too many decisions must be made every second for this model to work. Not to mention the proclivity of people, who are merely flawed human beings, to misuse the inordinate power to enrich themselves and their political allies, at the expense of everyone else.

Someone should tell Obama the blamer, that when he points the finger at someone else, three fingers are pointing back at him. No one likes a blamer. They smash everything they touch and blame someone else for their actions. Blaming is not a viable way for a President to run a country. It is the primary way socialists channel credit for a ruined economy from themselves however. This is as pernicious a means of avoiding fault as any. It was highlighted in Orwell’s book, Animal Farm, when the pigs blamed Snowball for all the negative repercussions of their policies.

Obama is the most powerful President the United States has had in my lifetime. The only two Presidents that came close were FDR and Wilson. These imperial Presidents, Obama, Wilson and Roosevelt had the same economic policies, IE top down command and control. In the case of FDR and Wilson the theory was new and hadn’t been so thoroughly disproved. Today with all the history against it, you would think that even a fool who had a modicum of education, would clearly see this fact. Unfortunately our school systems in the US and Europe white wash the reality of this economic sophistry.

When the initial downturn happened economic circles broke into two factions. There were the V shapers and the U shapers. The V shapers claimed the downturn would quickly turn around, and the economy would go into a time of high GDP growth, the U shapers said the economic downturn would take a bit longer but after a longer bottom, would go into a period of high growth. Both were wrong, this economic down turn has been characterized by an economic cycle that bumps along the bottom, like a fishing lure. Unfortunately there are no fish willing to bite anymore. We can rightly call this an L shaped recession… a drop with no recovery.

Obama is inebriated with his own press and power. His rhetoric effects the Supreme Court, he wins Nobel Prizes without accomplishing a thing, the unbiased press love and protect him, and he is fawned over by the cultural Elite. He has fallen victim to his own hubris. The unbiased media are claiming the economy was back on the road in the first quarter of this year but now is back in the ditch. They bend logic pointing at everyone and everything… but the driver. It seems to me that it is time to take the license from this drunk before he kills more people.


John Pepin

The Politicization of Everything

Monday, July 2nd, 2012

Dear Friends,

It seems to me, everything in our society, civilization, and media, are being politicized. Every action, attitude and assumption by the individual and or group, is characterized politically. As we all know, to politicize something takes it out of the realm of personal freedom and individual choice, and brings it into the arena of political favor. This trend has profoundly negative consequences for America and the World.

Government lives and dies by politics. Everything government does is driven by politics. Those that are in government are, by definition, good at politics, and so it is in their self interest to politicize everything. This is simply human nature. Those who have some advantage seek to leverage that advantage into personal gain. Some do it, by providing a service or good to make a living, others use politics to take from those that produce. We see this empirically proven, by politicians who have never produced a thing, but regulation… yet are millionaires. This is obvious yet overlooked. We are angry at at politicians for it but we are so mesmerized by politics we fail to see it.

Healthcare is one aspect of the total politicization of human existence. Sophist assumptions are made by politicians daily. Some include, but are not limited to… everyone must be covered, that government interference in the market would yield positive results, that rent seeking on the part of insurance agencies is a benefit, that the only way to stop moral hazard is to create incentives to moral hazard, the list goes on and on. These are all spurious arguments by politicians put forth as logical and echoed by the unbiased media.

Healthcare is an avenue for the Elite to get politics into the most intimate areas of our lives. When government, a fundamentally political institution, is the primary decision maker in our healthcare choices, then, by definition, our healthcare will be decided by political favor. When this is the case, it is those people who have political connections, that get the benefit, and those who have no political power, subsidize the gain the others receive. The freedom of the market is an impediment to this outcome and so is characterized as a problem.

The US Constitution has been politicized to an amazing degree. This is clearly shown, by the violent fights those people who believe in the politicization of everything, put into vilifying appointees to it. Everyone understands that the definition of the Constitution depends on who is on the Court instead of what it was supposed to mean. The split decisions that come from that august body are further evidence of this. The argument that the Constitution is a living breathing document, shows how strongly politicians feel about changing the Constitution, which was originally a non political structural document, into a political one.

Regulation is another example of the politicization of everything. Regulation only goes up, never down, (unless it benefits some politically favored group). It is never winnowed of old, unneeded, incompetent, burdensome or blatantly political rules. It is only expanded to give hard working bureaucrats more work. The role of regulation is supposedly to fix market failures but, as a matter of fact, they only serve to damage the interests of the people at large, and further warp markets creating more market failures, while delivering profits to those few who are politically connected. Regulation protects companies and individuals, who would rather not face market competition, from having to improve their product, service or actions.

These are by no means the sum total examples of the politicization of everything but space limits us. The logic of collective action is the primary force at work here. Those who get the goods from the politicization of everything, unabashedly protect their interests, while those who pay the price, are vilified as selfish, if they try to defend their right not to be coerced by government to subsidize the politically favored. This leads to the lowering of the national wealth, increasing political faction, a diminishing standard of living for the masses, structural inefficiencies in the market, and most perniciously, the incentive to become politically favored, instead of providing the best good or service to capture a larger part of the market. The negative consequences are cumulative. As they accumulate our comfort and security are consumed. But our loss is a gain for those who are politically favored.

Is this a profitable and benign state of affairs or a pernicious and evil one? Will it lead to an improvement in the lot of Mankind or a diminishing standard of living? And so, should it be allowed to continue?


John Pepin