Archive for June, 2013

Mowing a Lawn is Like Installing Tyranny

Sunday, June 30th, 2013

Dear Friends,

It seems to me, when you mow a lawn, you must start at some point and make overlapping passes, since it is not possible to do it all instantly. Mowing a lawn has to be done in stages. No matter how much the person on the mower wants the chore to be done it takes multiple passes to do the job. There are many things in life that are like this. One of them is going from a state of liberty to a state of tyranny.

No matter how much the hopeful tyrant wants to start oppressing people immediately, he or she must take it in swipes. They cannot be too big, else people will wake up, and they cannot be too small, else the would be tyrant might run out of time. There is an art to moving a people from liberty to tyranny, just like mowing a lawn.

Since neither can be done immediately both activities need a starting point. In both, the best spot to start is the most convenient corner, in the lawn or society. Find some dark corner and pass laws that deny some disliked element their rights. Step on them to the delight of onlookers. Then move on to the next group of politically disfavored people. Move in this way up the ladder of society until all elements have fallen into line.

Like the weekend landscaper uses a mower, the tyrant wanna be, uses the power of government. It is the mower that does the real work, the guy or gal just guides it around the lawn, as it is the mechanism of government that does the real work of oppressing, the tyro tyrant just guides the Leviathan around. This has an added benefit, when taking too big a bite and people start to open their eyes, one can simply point to the bureaucracy and blame it, until we loose interest and return to our distractions again.

The adolescent tyrant even tries to appear as though they want liberty just as a home owner fertilizes their lawn. As power is amassed the tyrantoid bestows extra “rights” on his people, like abortion, gay marriage, assisted suicide and so forth, claiming to be the angelic benefactor who understands real “rights” versus old fashioned Rights, like freedom of, speech, self defense, religion, property and so forth. Even people who have no stake in the society or government are given the very Rights taken from the masses. Groups are turned against groups as each vie for political favor to get the “rights” bestowed by the government, who is… the person who lusts to be tyrant.

It is always wise to create distractions when a tyrantesque is caught. As scandal is raging, forward some absurd law, regulation or initiative, one that will destroy the economy and put thousands out of work. Label it green or for the children and stand under moral grounds. The conversation will be turned from the scandal, to the imminent destruction of the economy, and the tyrantette is off Scot free. Let’s see, some absurd initiatives that could work might be… carbon credits for climate change, or maybe amnesty for illegal immigrants would be another.

No one has ever gone to bed in liberty and awoken in tyranny. The process is always and everywhere done gradually… Unless by revolution. Tyranny is something that has to be done in stages like mowing a lawn. An out of the way corner is chosen to start and the landscaper makes overlapping swathes until the entire lot is done, and a neotyrant does the same thing, but with law and government. Yea, an unmowed lawn may look like chaos, but there is real diversity and productivity in a pasture, while there is total conformity enforced by a periodic mowing on a lawn. So, where do we want to live, as uniform blades of grass in a lawn or as wild flowers in a lea?

Sincerely,

John Pepin

Why Does Government Call Constitutionalists Terrorists?

Thursday, June 27th, 2013

Dear Friends,

It seems to me, there is no more damning thing a government can say about itself and it’s intentions, than to call people who avow support for the Constitution… terrorists. If we all agree on the definition of terrorist, someone who uses personal violence against innocent people to force political change on a people against their will, then we can conclude, the elite believe constitutionalists will have to resort to violence to force the government to follow the Constitution, now or at some time in the near future. Since the political elite know what their future plans are, better than anyone else, it is not illogical to conclude, the political elite plan on abusing the privilege of governing and disregard some element of the Constitution, or the entirety of it. Else why worry about what someone who is an avowed constitutionalist does? That they do, must give us pause.

Since the Constitution, not only of the United States but of every country that has one, defines the nature, role and powers of the government, people who are avowed supporters of the Constitution must, by definition, be supporters of that constitution’s system of government. To claim otherwise is absurd. There are those that do not favor their Constitution for whatever reason, usually they seek unlimited power, rarely do they seek a better standard of living for humanity. It follows then, that those who do not support the Constitution should be considered more of a threat, unless those that do not support the Constitution… are in the government.

Is there another explanation, why the political elite in the US today, are so worried about what people, who support the American system of government wholeheartedly, are up to? Perhaps the American people have become disconnected with logic? No, if that were true the economy would immediately breakdown, as logic is a fundamental requisite of the marketplace. Maybe the American people plan a coup against the ruling Elite? That is not likely either, the American people have at the elected elite every two years, why not wait another year and avoid violence and destruction. Perchance the American people have a distorted notion of what the Constitution means? Unlikely, the American Constitution is written in English and the American people are literate, despite a tragically high illiteracy rate, this cannot explain why the political elite fear citizens that honor the Constitution. None of these possibilities will do.

It is not possible for a normal human being to read the intentions of another. Unless there is an actual mind reader found this is not even arguable. I cannot Know your intentions and you cannot Know mine. We discern what they probably are, by words, actions and history. Of the three, words are the most misleading, especially when they are used to target someone. There is an old saw, “When you point a finger at someone else… three fingers are pointing back at you.” The Elite of every caste should take heed. Their making ad hominem attacks on constitutionalists says far more about their own intentions than it ever can about someone else’s.

It would seem the rational conclusion is, at least some in government, those that make these ad hominem attacks on constitutionalists, have intentions to legislate or otherwise rule out of Constitutional bounds. No other conclusion can be reached. This should be very concerning, not only to every American, but to every human being on the planet. If the US becomes a tyranny… how long before every country on Earth is under a despot? How many generations will it take to get another chance? If the political elite show they despise the Constitution, then I say, vote them out and get someone else, someone who doesn’t consider Our Constitution a problem and therefore constitutionalists a threat.

Sincerely,

John Pepin

Bernanke’s Speech

Monday, June 24th, 2013

Dear Friends,

It seems to me, the economic theater we have been watching this last week, is more about what is known but not said than what is said but not known. Bernanke’s speech after the Open Market committee meeting to Congress was as unenlightening as any he has given. The 5 or so percent correction as a result, might have been more about the fact a correction needed to happen sooner or later, or it could have been far more pernicious. Economic forces that dwarf the power of the Federal reserve are winding up that those in the know recognize. These forces have the power to trigger a far larger economic and banking disaster than the 2008 crash.

I heard most of Bernanke’s speech and he didn’t say anything he was not expected to say. In light of the slightly better economic numbers, he said he might consider slowing bond purchases, if the economy continues to improve. That is not heresy, it is economic reality, but the reaction in the media, that seemed to be mirrored in the markets was overblown, considering… Bernanke also said he would evaluate continuing buying bonds, both Treasury and mortgage backed, to the tune of 85 billion dollars a month… if conditions deteriorated. Basically, Bernanke fed the market and the media, milk toast, which they immediately threw up.

Every economist worth his or her salt expected some correction. Markets never go straight up, they go up then down a bit then back up further. This bull market has gone up, but not given any back, behaving more like a bubble than a fundamentals driven up market. So, theoretically, all the market needed for a correction of perhaps 10 percent, was an inducement, and Bernanke’s speech was that inducement. This would hold true if the market is simply an over excited bull market… but if it is a bubble it might go down similarly.

If the money printing is the primary driver of the market rise since September 2012 then any mention of stopping the free ride would trigger a panic. The depth and breadth of the panic would coincide with the scope of the threat to the money printing. Since Bernanke had the audacity to mention, if the economy improved he might taper the printing, this might have caused panic among those who think this way. They would have sold off expecting the masses to catch on too. When we didn’t, the market stabilized, and appears to be a correction instead.

What is known but not mentioned, is that the drop in unemployment is not due to more jobs, but fewer workers. As the grindingly high unemployment figures continue along with the low bar to getting food stamps, disability insurance through Social Security and outright welfare, the incentive for the long term unemployed, is to move onto disability or welfare. This is especially true for the low skilled. As the Congress passes the omnibus immigration reform and introduce 9-12 million new legal low skilled workers into the workforce, the value of unskilled labor will drop commensurate with the supply percent of new workers, exacerbating the under utilization of labor problem in the US.

Obama care is having a deadly effect on job creation in the US. Every incentive in this law undermines the ability of firms to hire and keep labor. The law so drives up compliance costs that every responsible business owner must examine his labor needs carefully, wringing out every worker he or she can, else they risk the real possibility of going belly up, due to their costs being higher than their profits. Large firms get a few breaks under Obama care so they can more effectively out compete small more nimble firms. (The source of real growth in an economy).

Dodd Frank Banking regulation has taken hundreds of bureaucrats years to write. They have only partially finished, with thousands of pages of regulation written for all banks to follow, that is supposed to solve the “Too Big To Fail” dilemma. In truth, it makes the problem worse, as is the true end of all legislation. Dodd Frank makes it unprofitable, and in some cases illegal, for small and medium sized banks to lend to small businesses. Large banks can’t, due to the high costs of leveling the asynchronous knowledge field, that small and medium banks don’t have. Again, small businesses loose out but in this case so do small banks, and Too Big To Fail is made worse.

Lastly, what is unknowable, the tensions building up from the government actions like, Continued low interest rates have driven capital into the market, to try to capture some profit but at greater risk, rental real estate has become a new boom with the low interest rates, small businesses are frozen out of the capital markets, these are but a few obvious examples of how the economy is being distorted by government action. All these tensions are starting to warp the economy in unforeseen ways… which never turn out well.

That Bernanke’s milk toast speech was met with such a reaction, could be proof of a market bubble, or it could simply have sparked a much needed correction. To be rational maximizers, we must ask ourselves, “If there is this much panic over the mere mention of slowing the printing of money… how is it possible for the Federal Reserve to actually unwind all the bonds they have bought to date, let alone what they will buy in the future?” The Obama administration and the Federal Reserve have gotten us into quite a mess. Most probably… historians in the future will use us as an example of what not to do in the case of recession.

Sincerely,

John Pepin

Job Security

Thursday, June 20th, 2013

Dear Friends,

It seems to me, government is the only place where the worse job you do, the more job security you have. Union bosses would be wise to rip a page from the political elite’s handbook. For screwing your employer even the much vaunted unions have nothing on bureaucrats and politicians. Government under their watch is the most inept facet of our civilization. We all know it. We all want better, but all we get is more laws, poorer results and more taxes. Unless we step in and solve the underlying problem… our society and indeed our civilization itself is doomed.

Politicians claim a minor problem is a crisis, they propose some legal “solution” for that “crisis,” the law makes matters far worse, making a new need for another law to rectify the problems created by the first. They pass another omnibus law and lo and behold the problem grows exponentially. Now it actually has become a crisis and lawmakers propose a new comprehensive law… From this simple example we can see that the poorer the results of their governance the more desire we have of their services.

Some might say that a carpenter always sees every problem as needing a hammer, a logger believes a chain saw is the perfect tool for building stuff and a plumber is of the opinion that every problem can be solved with pump pliers. In the case of politicians they see every problem as needing a legal solution. Each seeing problems and solutions through the eyes of his occupation. If the solution doesn’t fix the problem it is because the wrong tool is being used… is the logic. This would hold water better, if laws that don’t function were removed from the books, but once a law always a law. How much is the US government spending this year on the mohair subsidy? You know, the one to protect our vital access to World War One Army uniforms…

I think the problem is more pernicious even than that. If we believe that politicians are human beings, and that human beings are indeed rational in most cases, then we can conclude that politicians are rational. If they are rational then they must see that the worse they make society the more need there is of their services. Unless politicians are the dumbest people this must be true. Since they claim to be much smarter than you and I, with the knowledge that their laws generally make matters worse, then why would they continue to pass them? Self interest, or to be more precise, egoism.

If laws were the be all end all of civil tranquility, then why is society so much more roiled now, with our millions of pages of laws, regulations and ordinances, than it was at the turn of the Twentieth Century, when people self regulated? As the pernicious laws pile up and up, outcomes get worse, the politicians chime in with the old sophist song, “Government has a valid role to play in making people’s lives better.” Knowing in their hearts that every word of it is tripe. Clearly, it is not law that is the source of wealth, happiness or love, law only subtly protects property if it is right and seizes that property, if it is being used by an egoist. Human history shows unequivocally, that law is most often a source of oppression, theft and murder by those who wield it, against those who do not.

We have a system where the worse our leaders do the more we need them, the elite know this and use it against us, and we suffer in a myriad of ways because of it. The answer is not to give the elite more authority, to continue down the road to serfdom… it is to take back the workings of government. Do away with bad laws, that don’t have a function, make matters worse or unreasonably infringe on the Rights of the people. We must think and do for ourselves! To have eyes and not to see is a shame, to have ears and not to hear is a tragedy, but to have a mind and not use it is criminal.

Sincerely,

John Pepin

Science, Philosophy and the Elite

Monday, June 17th, 2013

Dear Friends,

It seems to me, as science advances the philosophy of people must advance as well, else a fundamental tension is set up, that must eventually catastrophically snap. When the growth in science outpaces the growth in moral philosophy, it can be said that our ability to do damage grows faster, than our ability to control ourselves from doing it. Moreover, if the ability to do harm is greater than the individual’s ability to not do harm, harm will result. It follows as certainly as wet ground after rain. This is why I find it so puzzling, why the Elite seem so intent to train out the civilization in Men and women, when if even a dimwit such as I, can see this obvious truth, the enlightened must also have access to it as well.

Science, and the way of thinking that science represents, asking what and how, instead of who and why, is itself a paradigm shift in logic. The study of the empirical world is the basis of science, the sensible universe if you will, not the intelligible world or the world as it can be imagined. In being not only a study but a way of perceiving reality, science can be said to be a philosophy itself, a philosophy about measurable reality. As such, it is an amoral philosophy, it is not concerned with the good or the bad, it has no interest in human suffering, it is blind to moral virtue and all morality, science is itself a two dimensional philosophy, it is terrific at evaluating the physical world, but it has huge blind spots where humanity is concerned.

As our knowledge of the empirical world grows our ability to manipulate it grows as well. That ability to manipulate carries with it great power to build, change, and destroy. But, as science takes only two of the three dimensions of human existence into consideration, there must be another philosophy to fill in that missing piece. That missing piece is moral philosophy. Religious philosophies of right living, right acting and human compassion, are nearly perfectly suited to fill the gap. If there is no morality then why should there be self control? The only other way to limit the actions of people, so that society can function, is by fear of the State. History has taught us, if it has taught us nothing else, that laws only effect those who are subject to them. The elite never subject themselves to their own laws, and so, live outside the limitation that fear of the State’s retribution provides, as well as morality.

As the power to manipulate and destroy grow, if those in political power are not held to human morality, and they are not subject to the State’s authority, they have little need of self control. The elite are more free to follow a course that is in their narrow personal interests than the average citizen. They can become so corrupted under these circumstances, they will use science’s power to destroy… to smash civilization. The complex system that is civilization, will produce a long tailed event, and the advances of science and the philosophy of morals will be lowered, perhaps forever.

If we take these things to be true, that if the morality of a people declines even as their ability to destroy grows… their fall will be unavoidable, then why are the elite in our society leading us to just that? The elite in culture show us that the good life is meaningless sex, the capitalist elite show that immediate personal gain outweighs any long term investment that will result in societal as well as personal gain, and the political elite are modeling the most despicable behavior possible. The main thrust of legislation today is mitigating the consequences of negative behavior. Laws lowering access to abortifactants, welfare, and a clear hostility to God, are but a few examples.

The people are not blind to these things, we see what they do, and we follow where our leaders lead us. They are leading us from morality, religion, and being rational maximisers, to become angry, self absorbed, children… with toys that can kill us all. The elite even pass deadly technology to the people on this planet with the lowest humanitarian philosophical growth! Giving the nuclear bomb to communists was a crime against humanity. Allowing such destructive power to fall into the hands of people who have no moral compass, as evidenced by the mass slaughter of human beings at their hands, is an act of anti humanity… Just as today’s political elite are doing in so many ways. Why do you suppose they are doing this, or, do you believe them ignorant and stupid?

Sincerely,

John Pepin

World Verging on Crisis

Thursday, June 13th, 2013

Dear Friends,

It seems to me, the World is melting down, but instead of trying to cool it off our leaders are adding uranium. There is not a corner of the World that is not in some kind of turmoil today. Governments are toppling way too often lately with more teetering. Traditionally stable areas are becoming sources of derision and violence. We see the rise of fascism again… this time with two ugly heads. Economies are failing, a suicidal theocratic regime is on the verge of nuclear capability, and even the US government is embroiled with scandals, a new one breaking daily. The list is as scary as it is long. All these things are being escalated by our political leader’s, incompetence or malevolence, either of which is a malignancy in the tissue of government. Unless we do something to head off this train wreck the cost will be in the millions.

Anger is the result of needs not being met. When a person’s needs are not met anger is the usual result. It can manifest itself as depression when it is turned inward, it can manifest itself as physical pain or even disease, and it is often manifested in anti social behaviors as well. Well aimed propaganda can pick up on societal anger, marshaling these antisocial behaviors into a political tool, one that is advantageous only to the political elite who wield it. Sometimes the manipulators are local, sometimes foreign, but anger is always and everywhere too easy a control button to push, for everyone to keep their greasy finger from it.

Weapons added to the mix brings in the possibility of overthrow of the standing institutions. Any foreign power that is not friendly to the native government, even if they had no hand in the anger to begin with, can simply ship in weapons raising the likely hood of all out rebellion. If sufficient anger along with sufficient weapons exist in a country revolution is assured. More violence always results after revolution, as the rebels disunite becoming armed factions, who then vie for power. Those that seek peace don’t ship arms to a conflict. To do so, is to do the opposite of what they say, making the person a hypocrite or liar.

Violence becomes custom under these circumstances. Old governments are washed away and new regimes often usher in new wars from old animosities. Local chaos destabilizes neighboring countries, regional chaos then easily becomes a war. War is a self feeding phenomenon. Like fire provides the heat needed to maintain combustion, war generates hate sufficient to keep it well fed, until the thirst for blood is quenched, or everything is smashed. There are so many simmering grievances in this World that could touch off a regional conflict they couldn’t be counted. From the Kurds, who admittedly got a really bad deal, to the Ryukyu islands, there are plenty of old grudges to start a regional war anytime anyplace.

This is why I am so amazed, our political leaders are fanning the flames of anger, adding the kindling of weaponry and they stand there astonished at the bonfire they have produced! In the Middle East the World’s elite are unanimous that war needs to break out there. If not in speech, in action, they prove it daily. Nothing meaningful is being done about Iran’s nuclear program, while riots in the Muslim sections of every country in Europe are encouraged by placating the rioters, increasingly with a state within a state. How long before that goes terribly wrong? Turkey is in full fledged rebellion and the Islamofascist leader there threatens a brutal crackdown. Will the World’s elite accept his violence where they didn’t Qaddafi’s or even the “ally” of the US, Mubarak’s?

Syria is increasingly becoming the focus of a potential World conflict, with their armed rebellion, chemical weapon stockpile, which lets be real, is most likely Saddam Hussein’s, coupled with the Muslim Brotherhood’s stated goal of a Caliphate, Israel on the southern boarder, Russia offering troops, (setting up a Gog Magog scenario), The Obama administration covering up the weapons shipments from Libya to Syria through Turkey, and Chinese interest in the region’s oil, too much political currency is being anted up for anyone to fold early in the game.

Basically, we have an angry World, that the elite in politics and the media are making madder, these unwashed raging masses are now being armed by the World powers, next Americans will be told we must intervene else things will get really bad, we do, and it does… what do you have? Some call it World War, others might say Arma-something…

Sincerely,

John Pepin

European Union Economic Death Spiral

Monday, June 10th, 2013

Dear Friends,

It seems to me, the European Union and all the countries within it, are in an economic death spiral, and unless they break out of it, there will be a generational depression to pay for it. If you think this is hyperbole, then recall the Greek, Spanish and Italian economic catastrophes. Add to them the Cypriot banking seizure of customer’s assets to pay bank’s liabilities. Take into consideration the negative economic growth in Europe, the festering religious animosity that is rapidly becoming sepsis, the growing welfare state, and the budget deficits that follow, and there is only one conclusion that can logically be reached… Europe is headed for a historic crash… drawing the World with it.

At this point the elite in Europe have only one belief, socialism, in whatever flavor that nation favors. From the two main schisms, the Mediterranean model with one breadwinner and the Scandinavian model where it’s, everyone in… welfare states. There are sub sects of this, Britain’s Labor government is one example of a socialist convention, that fit’s neither the Mediterranean nor the Scandinavian models. Within these governments there are a small sub faction of laissez faire capitalists but they are overwhelmed by the vast majority of socialist factions. Most people in Europe believe in the hands on state, instead of the hands off state.

They all have only one plan of growth, Keynesian, this same plan has failed so spectacularly every time it has been tried, it should be called the Edsel plan. The group think we see in the media, political elites and the academic elites on this subject is remarkable. I am certain that many papers will be written on this phenomenon, in the years to come, but today we have to deal with it. The group’s answer is always to print more and spend more… cut tomorrow. Printing and spending has achieved many notable economic milestones… none of them good. Hyper inflation, stagnant economies, high unemployment, more oppressive government, the list goes on and on. What the Keynesians forget is that not all spending is equal.

What is needed to improve economic outlooks in any nation is, a total overhaul of the regulatory, taxation and standardization schemes, (Japan should take heed by the way). In the last part, standardization, Europe is way ahead of it’s rivals. Unfortunately in the areas of taxation, and regulation Europe is strangling itself. If, for example, Budgets must be balanced and could not be in deficit for more then three years in a row and that the debt must be paid back within three years, taxes could be lowered. If that were done, taxes could be simplified to a Europe wide percent sales tax system, (or value added system), each country collecting it’s own taxes, and then paying a portion to the European Union… taxation would become less a barrier to business. If regulation were simplified and overhauled, regulated sick time, vacations, hiring and firing rules, etc, the friction these laws impose on doing business would be lifted. Lastly, if the welfare laws were limited, more people, who are perfectly able to work, would move into the workforce, generating even more extrinsic economic growth and cutting the need for high budgets.

The death spiral can be escaped but it will not be easy. Today, the group think way to lower the huge debt burden the welfare state has imposed on Europe, is by “austerity.” Which is, cutting spending and raising taxes. Cutting spending is what they need to do, raising taxes will inevitably undo any good the lowering of spending accomplishes. Moreover, it makes the public believe that taxes will be higher in the future, (Because they will be), and the people will react accordingly, to protect their assets instead of spending or investing them. Cut spending, simplify and cut taxes, simplify regulation and move immigrants from welfare to work. To accomplish these goals, commissions could be set up to pour over every line of regulation on the books in Europe, then, every month submit a suggestion paper of those that should be removed, to the various parliaments. In America, when we make ad hoc committees for this type of thing, we call them blue ribbon panels, this one should be a permanent fixture in every government. Maybe in Europe you can call them red tape panels. Nevertheless Europe has a great deal of work to do to become more of a Meritocracy. Let’s pray and hope they get started, before it’s too late.

Sincerely,

John Pepin

The Next Killer App…

Thursday, June 6th, 2013

Dear Friends,

It seems to me, there is a huge opportunity for economic innovation. This opportunity is not only game changing, in the way it could lower the overall cost to run a company, but the efficiency that would be gained in reacting to new opportunities, agility that could enable much larger companies to have such nimbleness, would increase the longevity and profitability of any company. This game changing, fountain of youth for corporations, could stabilize and drive stock markets to paying a larger percentage of profits out as dividends, instead of bonuses. This innovation stands at the very edge, within our reach, but at the very limit of our grasp… it is, innovation in corporate governance. It would generate as much growth as the internal combustion engine or the transistor.

There is not a one who is reading this, who has not heard of a family business or solely owned company that was sold to Wall Street, and shortly after went into bankruptcy. Stories abound of this business or that firm who made the best wing wang there ever was. The owners were called stupid and the management style of the founders was universally criticized. Then, the owner retired or died, and the company went public. The buyers immediately take out a huge loan in the business name and give them selves a fat bonus. Some then move directly on, leaving the business and stockholders, with the debt for their bonus. A few years later, struggling to cover the loan debt for the bonuses, the company fails, the stockholders loose their hard earned money and the workers loose their jobs.

A few of the companies that come to mind, IBM, Apple, Digital, and Orrick, along with thousands of others. They were run by families and entrepreneurs. The founders were ridiculed by the apparatchiks of finance and business, all of the firms were profitable and grew extrinsically, by getting new customers and intrinsically, by meeting those customer’s needs more efficiently. When each of those companies was sold to Wall Street they were run into the ground. In the case of Apple, when the founder came back, he took the company from bankruptcy to the most valuable company in the World, IBM only just survived total collapse, Digital is history.

Since this paradigm plays out over and over in the corporate cycle it would seem a logical place for innovation. The underlying problem is… the principle agent dilemma. The principles, the stockholders, own the company, the agents, the managers of the company, are supposed to work in the agent/owner’s, the stockholder’s, interests. They often don’t. The individual stockholder is limited in his or her knowledge of the company, how it is run, the direction the senior management is taking etc… and thus his or her power to protect their own interests. Due, legitimately, for protection of the company’s assets, this necessarially sets up a further problem… asynchronous knowledge.

Even if the individual stockholder has such knowledge and seeks to make change he or she sees fit, it is exceedingly difficult because each of their voices is very small, due to the widely distributed ownership. Unless a sufficiently large group of them get together, their voices are irrelevant. Moreover, the system as it now exists is set up so that a small group of people can give themselves fat bonuses, at someone else’s expense. The incentives in this system, are for those that are profiting by it to keep it in place, at all costs.

The next clear opportunity in today’s system, ripe for innovation, is how to run the company, after it is sold into the public market. Assuming the company has not been looted because of some other new innovation in corporate governance, or even if it has… the people who take over at the top always come in with big ideas. Well, I am a big believer in big ideas, but they are only big ideas if you yourself are willing to put your own hide at risk, like the founders did. When gambling with someone else’s money one’s risk tolerance goes up considerably. At the same time as big ideas are implemented, rigid structures are put in place, to shore up the sloppy ones that existed before. The one two punch is devastating to the corporate ecosystem, and in the case of where the firm was looted beforehand and has a high debt load, the third punch is a sure knockout blow.

This problem translates into lost jobs, lost opportunities, and the lost earned wages that make up most of people’s retirement funds. Everyone in corporate governance knows the problems, but no one seems to be fond of catching the wrath of the power brokers, who get fat from the system. Remember, under a truly capitalist system, anyone who is making overly high profits quickly meets equally high competition for those profits. In cases where this does not happen, it is usually government regulation that stands in the way. Regulation that was supposed to fix some other problem, that was caused by other regulation that was supposed to fix some other problem, and on and on… Adding a regulatory element to the question. Perhaps what is needed, is not more regulation but… a company constitution for new firms? What do you think it should say?

Sincerely,

John Pepin

Crime Reporting’s Effects

Monday, June 3rd, 2013

Dear Friends,

It seems to me, we are being trained to fear that which is less dangerous, and to embrace that which is more dangerous. Just as, to so fear water… that you turn and face a lion, is a sure way to a short life, turning from a mundane danger to an existential threat is suicidal. Rational people don’t readily make this type of emotional and intellectual move unless we are tricked into it. Our own sense of self protection, inhibits us from putting ourselves and our children into greater danger, to avoid a lesser danger. Yet if we continue following the elite without even glancing around, that is exactly what we are doing… embracing lava, for fear of hot wax.

Every time the unbiased media show a news story of a civil murder or other violent crime our perception is that our fellow man is dangerous. The more often these stories are shown to us the more fearful we become of our brothers. This holds true even if the actual amount of violent crime is down both as a percentage of population or in totality. The more we are told, other people are dangerous and only want to do us harm, the more we believe it. This is not to say that other people cannot be dangerous or that crime never happens, it is to say, our perception of the frequency is heightened when we are shown it more often. Since there is always violent crime there will always be some to show.

We are told both explicitly and implicitly that the answer to all the violence in our society is more regulation and more laws. If only this or that law was passed crime would go down. But, as I have explained above, even if crime does go down, but we are shown more examples, we will become more worried about it and more pliant to greater government intrusions in our lives, “to keep us safer.” The unbiased media don’t have to be explicitly involved however their complicity can be implicit. As the old saw goes, “if it bleeds it leads,” shows why violent news stories are always so prevalent, they are in demand. We have a prurient interest in societal violence. This is used against our own liberty whether we know it or not. So it is best to know it.

If a business has a camera on it’s premises to prevent theft or even predict what a consumer will want, is no intrusion on privacy because it is on private property, which you and I can boycott if we find it obnoxious. The private property owner has an economic incentive to have people at his or her business, and providing a safe, helpful environment is part of meeting that incentive. Government however, cannot be boycotted, it is everywhere all the time. There is no escaping government. The pro government argument goes… If only we had a government camera on every street corner crime would go down. The media shows murders happen often in front yards and… we take the next step down the slippery slope, why not at everyone’s front door… Eventually leading to, why would the honest citizen care if his phone is listened to by the government, it is for his own good.

Statistically, over the last thousand years, you and I are far more likely to be killed by our own or another government, than by any common criminal. I have seen one example where it is estimated 20 people are killed by their own governments, whether by famine, genocide, war or a myriad of other imaginative ways, to 1 person killed by a jealous husband, armed robber or other common criminal… in the last century. Yet, despite these facts, most people are more in fear of our neighbors and passersby, than we are of government. In that irrational fear we turn from the less dangerous to the more dangerous.

We are being trained to fear the mundane menace and to embrace the existential threat. Crime reporting is the propaganda arm of this effort. The more we see violence on television them more we fear each other. Our increasing fear of one another makes us emotionally react, turning to government, as a way to be safe. By doing this we loose sight of the fact we are in far more danger from our government than we are from crime. Our unmeasured emotional reaction makes us run from possible crime to certain oppression. A measured reaction however…

Sincerely,

John Pepin