Posts Tagged ‘meritocracy’

Solving Ukraine’s Problems

Thursday, December 18th, 2014

Dear Friends,

It seems to me, Ukraine’s situation is rapidly deteriorating, impoverishing it’s citizens and pushing the breakaway areas with war and the threat of war. What a sad state of affairs for people who, because of their geologic location, have taken it on the chin over and over. The political system is broken beyond repair with whomever is in power crushing any opposition at will. There is no effective protections for freedom of speech, assembly or conscience. The people of Ukraine deserve much better. Every nation on the planet could learn a thing or two, how not to run a country, from Ukraine’s example. There are answers to the thorny problems Ukraine faces, but unfortunately, real solution are being ignored for war and arbitrary power.

Ukraine’s history is one of invasion, violence and tyranny. From the dawn of history Ukraine has been invaded by empire makers. The Mongol invasions were particularly hard on the people, with whole cities raised to the ground, every man woman and child killed, even the dogs, cats and livestock! Tamerlane slaughtered the Ukrainian people with the glee of a demon. When the Soviet union controlled Ukraine, Stalin stole the food the Ukrainians had grown themselves, selling it on the world market, starving to death millions of human beings! The poor Ukrainian people have suffered for centuries under the heavy hand of sadistic invaders and despots. It is past time for those sturdy people to have a measure of freedom and prosperity.

President Petro Pososhenco continues in the footsteps of the man he deposed. Instead of ushering in an era of peace and prosperity he has turned to war and autocracy. While it is only human to want revenge for grievances suffered, when a politician does it, the lot of the whole people is lowered. Today the Ukrainian central bank is broke with all of Ukraine’s gold stolen. The war with separatists sporadically flaring up, and now with US lethal aid going to Ukraine, the likelihood of a shooting war with Russia becomes a real possibility. Crimea is lost to Russia, for now, and the Eastern cities are in the hands of separatists, which would be a blow to any sovereign nation. Sadly, Ukraine is used to blows, and is likely punch drunk.

A better option, in my humble opinion, would be to sign a peace accord granting the breakaway areas autonomy, as long as they don’t formally become part of Russia. This would stop the bleeding, both of human blood and economic red ink. War is never a good option especially when there is an alternative. Of course it take two for peace and only one for war, with the Russian Ruble in free fall, the Russian people looking at hyper inflation and the Russian economy collapsing, war becomes more probable, since war is a traditional way to make patriots of starving people. Nothing rallies a people like a rip snorting war. Granting the breakaway areas autonomy would take the possibility of outright war off the table.

The next thing Ukraine should do is get their political house in order. To that end, I have advocated for all nations, including Ukraine, a NUMA or Fourth Branch. It would chain the lawmakers to their own laws and Constitutional limits. Of course the Fourth Branch option would require a Constitutional rewrite. If done right such a rewrite would have many beneficial effects. The US Constitution should be the basis of any new Ukrainian Constitution… with the addition of a NUMA. A Constitution that strictly limits the role, scope and power of government, would allow the free market to do it’s thing. For a better explanation see an excerpt from my last blog here.

If these two things were done Ukraine’s economy would start flourishing. The Ukrainian people are smart, hard working and risk takers, all of which are essential to a rapidly growing economy. Until the war is ended, and the government retreats to it’s rightful role, the Ukrainian economy cannot possibly get on solid footing. If the economy of Ukraine becomes dynamic, the gross domestic product per person would skyrocket, or in other words, the Ukrainian people would see prosperity they could have only dreamed of before. Once that happens the breakaway areas will almost certainly petition the Ukrainian government to allow them back in. Self interest trumps all other considerations. Ukraine could slowly rebuild itself without the exigencies and ruin that protracted wars always bring on. This would be a peace and prosperity based solution to the fundamental problems of Ukraine. Wise leaders would take the path of peace and prosperity, while foolish ones, war and poverty… Let’s pray the leaders of Ukraine are wise and not foolish.

Sincerely,

John Pepin

What is a Well Educated Human Being?

Thursday, December 4th, 2014

Dear Friends,

It seems to me, our children’s education is the most important factor in sustaining our civilization as a highly efficient, prosperous, healthy and free society, with a growing standard of living. We all agree that these are the attributes of the civilization we want to live in and want for our children. The only way to have and to maintain such a place is by keeping people moral, hard working and informed. Ignorant people can be easily tricked into giving up their liberty, immoral people will rot their culture from within, and lazy people will let society crumble for lack of the energy to speak up. This suggests that education has more facets than merely reading, writing and arithmetic, a truly educated person is self interested rightly understood. Sadly we have ignored this monumental responsibility and allowed our schools to become absurd caricatures of what they are supposed to be. The proof is in the results.

Youths who graduate College and high school have no work ethic. Ask any employer and they will tell you it is much easier to get a foreigner to work than an American kid. Something in our culture and education must have ruined our children’s work ethic. Our parents had a very good work ethic, which shows the destruction of the American work ethic is recent, and throughout US history there has been a strong Protestant work ethic, showing the problem is not native to the American culture. That is the dirty little secret of why the Chamber of commerce wants immigration at all costs – to get some hard workers.

Any and every market system requires a measure of trustworthiness in the people that engage in it. This is not taught in our schools but is perhaps the most critical factor in a functioning market system. Moral people are easier to do business with, so it can be said that virtue facilitates economics, since education is to allow people to engage in the market system, part of a well rounded education has to include ethics. It can be said, the more moral a people are the better their economy will do, and it also follows, the more prosperity there will be. That should be pretty obvious. With every generation people become less trustworthy which is proven by the need for lawyers in every human interaction possible.

Logic is something that is critically absent in our culture today. The whole foundation of the Enlightenment, is the eschewing of authority for logical argument, but today logical argument has given way to emotional rhetoric and calls to authority, more than ever! Everyone who graduates high school should have at least an understanding of logical thinking. Teaching how to think is inculcating logic; teaching what to think is indoctrination.

A society’s likely prosperity could be measured by the percentage of people who are moral, knowledgeable and hard working, against those who are lazy, vile and ignorant. I would also argue the longevity of that civilization, level of crime and violence, as well as the basic well being of a society… could be similarly measured. Therefore, it is in all of our best interests to insure young people get a good education, so they become well rounded, moral, hard working and learned citizens.

To be self interested, rightly understood, is to understand that one’s own interests are tangled up in the interests of the State, their employer, their employer’s customers, the grocer, the street sweeper etc… The interests of all of us are entangled in such a way, that a bad done to someone we don’t even know could do harm to our way of life, and so it is in our interests to protect other people’s interests. Part of being educated is teaching children to become self interested rightly understood, ie, moral, hard working and well read as well as wise.

Education is more than being able to count, read and put down a comprehensible sentence, it is to grow a child into a moral, hard working and knowledgeable adult, who can engage in the market system and bring value to any endeavor they set themselves to. The advancement of humanity would be much faster and scientific progress would proceed quicker if our schools were turning out well educated students. Sadly, the quality of the education in the State monopoly school system is dropping even faster than the cost is rising.

Sincerely,

John Pepin

On The Riots In Ferguson

Monday, December 1st, 2014

Dear Friends,

It seems to me, the fundamental reason there are riots on the streets of Ferguson is the deficiency of clear knowledge of what really happened, magnified by the lack of a fair process for the redress of grievances. That lack of redress could be effectively addressed by the Fourth Branch’s Consumer Protection Bureau, and the lack of transparency, which was the first cause of this unrest, would have been solved by the Executive Ombudsman’s office. All the lives that have been lost, the businesses destroyed and future profits erased, money spent by government to police the uprisings, repair the damage and heal broken bodies, all of it would have been avoided had we had a NUMA. So much of what is wrong with our world today would be resolved, if we only could spread the news about the potential of a Fourth Branch, and then actually succeed in enacting one. Our standard of living would increase every year regardless of the political winds.

The spark of the conflict in Ferguson is the lack of knowledge of what actually happened that night between that officer and that unarmed man. Even the fuel of anger in the air, well above the lower explosive limit, came about because of the lack of transparency magnified by a lack of redress. Everything beyond that point in time is dependent on that lack of clear knowledge. If the police shot the unarmed man, (regardless of his skin color), while the man was pliant and not aggressive, the officer who pulled the trigger must be charged with, at the least manslaughter, and potentially murder one, if the crime was premeditated and so forth. If however, as the grand Jury found, the police officer shot in self defense, there should be no charges and the officer should be reinstated with all benefits and back pay without prejudice. Anyone who disagrees with either of these two possibilities is unreasonable, their opinion is based on prejudice and not on reason, to them there is no conciliatory logic.

So the basic problem is the lack of clear, unambiguous knowledge of what really happened, that everyone can agree on. If Darren Wilson was wearing a camera that night, recording everything that went on, and the video was available for anyone to see, there would be no reason for the protests, except as a violent means of sedition. One of the basic tenants of a Fourth Branch, or NUMA, would be that everyone in government would be monitored at all times, (like the checkout girl at Walmart). Internal Affairs in police departments would be handled by the state NUMA. More specifically, the Ombudsman of the Executive’s office, would monitor the Executive branch and all it’s employees. The police would be equipped with body cameras, turned on at all times when they are on duty, to protect them and the public. National police like the FBI would be similarly equipped using the same practices. Every interaction with the public would be available immediately upon request of any person involved or at the request of the Consumer Protection Bureau of the NUMA.

If someone had a disagreeable interaction with the police, or their son or daughter was, God forbid, killed, in an interaction with the police, or any other agency of government, that grieved or even an involved person could file a complaint against that officer, department, or agency, and the complaint would be looked into by the Consumer Protection Bureau. The complaint would get sent to an adjuster who would make the initial investigation within a month. After the initial investigation, if cause was found, the case would be assigned to an investigator, otherwise the results would be posted on a government website set up for that purpose. A case that gets appointed to an investigator would be exhaustively investigated, all the findings would become public record available on a government website, free of charge. If the investigator found cause for criminal proceedings the offender would be prosecuted to the full extent of the law.

Since the fundamental reason for the riots was a lack of clear knowledge, and a NUMA would have provided that clear knowledge, as well as a fair mechanism for redress of the grievances of family and friends, we can safely reason that if there was a NUMA in place in Missouri, this whole violent, expensive and bloody affair would have been averted. The lives that have been lost would not have been lost, the human beings wounded need not have suffered nor lost the use of limbs, the property destroyed would be available to enhance someone’s life, the businesses razed would still be providing paychecks to hard working people and the money not spent could be used to cut taxes, harden our electrical grid against solar flairs and EMP, provide incentives to entrepreneurs, or a whole host of other things to improve the lot of humanity, instead of on trying to get back some of what was lost. This is just one example of how a Fourth Branch, or NUMA, would make our lives better. How many more can you think of?

Sincerely,

John Pepin

You Cannot Control or Plan an Economy, It Can Only Be Ridden…

Thursday, November 27th, 2014

Dear Friends,

It seems to me, an economy is an organic thing, like a horse or a flock of birds, as such it cannot be controlled it can only be ridden. Control is a science and riding is an art. Science can only be applied in a scientific, (controlled) setting. An art can be plied in the real world, where everything is messy, and where “control” is a relative term. This is one of the fundamental reasons communism and socialism cannot work with human beings. Socialism and communism require an economy to be controlled. An economy cannot be controlled. Whenever someone tries, the economy explodes, destroying lives, fortunes and families.

The economy of even a tiny nation or city state, is far too complex to be tightly controlled, and if control is attempted, a long tailed event always occurs, destroying the economy. The random inputs to even a small fruit business are too many to be controlled. A small business person will tell you that he or she does everything possible to control costs, monitor employees and maintain quality, while satisfying the customer, but that it is impossible to control everything. That is where intuition and experience come in, a business cannot be controlled it must be managed, or in other terms, ridden.

Riding a horse is an art, as is, managing a business, herding cattle, painting a picture and running a government. What do arts have in common? All these endeavors seek only a portion of control. They take elements that are disparate, and keep just enough dominance over them that those elements work together, but not so much it breaks the system. If a cowboy tried to control every single cow, the herd would immediately scatter, if the rider tried to control the placement of the horse’s feet, the horse would quickly fall, if a manager tried to micro manage every action of every employee, the business would rapidly fail, an art requires domination of that which can be mastered and accepting that those elements that cannot be mastered will look after themselves. Only those things that can be completely manipulated with absolute mastery over every input and reaction can be controlled, everything else must be ridden.

To control something one must have a way to control any unforeseen exigency. In a complex system control is impossible because there is no way to have a mechanism in place to deal with any possible emergency. The universe of potential emergencies are too vast to be thought of let alone controlled for. Only when someone has total power over every facet of a system, process or reaction, can he or she be said to control it, and even that level of control is subject to God’s laws. In fact that is the scientific method. It is the way scientists have gleaned out the nuances of God’s laws in Physics, Mathematics, and Chemistry… Economics, sociology, psychology and even history are pseudo sciences and while subject to God’s laws they escape humanity’s grasp due to their complexity.

A pseudo science is a field of study that approximates a science but in fact is an art. History for example is written by the victors and as such cannot be a perfect illustration of the facts. A Periodic Table of the Elements would not be science if large portions of it said, “Dragons be made of this…” It would not be chemistry it would be alchemy. Chemistry is a science where alchemy is mere pseudo science. Economics cannot be a science in the true sense until sociology, psychology and a whole slew of other pseudo sciences become real sciences, because economics depends on them for many of it’s theories and assumptions, if an assumption is that “dragons be made of this,” then it is not scientific. Someday, economics may become a science but until then, it is only a pseudo science approximating science.

And so, if all the inputs, the wants, reactions, fears, hopes, desires, knowledge, work ethic, illness, cheating husbands and wives, etc… for every human being in existence cannot be controlled, an economy cannot be controlled. What is the next best thing then, if we don’t want a chaotic economy that doesn’t do what we want it to? To ride it, control what we can and accept that which we cannot, set the parameters and incentives such that most of the economic actors stay in the herd, go after the strays and bring them back into the fold, establish standards, eliminate micro managing regulations, and accept the truth that total control of the economy or in other words, the planned economy, is impossible. Only when we give up trying to control our economies and instead ride them, can we have better functioning economies that do what we all want them to do, create widespread prosperity, keep our nation’s militarily strong, (to protect that wealth), and provide a rising standard of living to our children and their children.

Sincerely,

John Pepin

Living While We Are Alive

Thursday, November 20th, 2014

Dear Friends,

It seems to me…

 

There once was a little worm named Phil.

Dig all day in the dirt, and the clay, but never could get his fill.

On everything he would chew, then digesting it too, he ate anything he will.

Master where he roam, in his kingdom of loam, he summered in pure glacial till.

 

I knew a little bird named Zat, well Zat was actually a bat.

Flit here, then flit there, he always knew where he was at.

His pride shown right through, it was clearly true, and he lived the life of the phat.

Wintering with a frown, he hung upside down, became a smile when he was flipped like that.

 

The tulip lay dormant in it’s frozen cell of torment.

While spring start above, bright sun beams love, the ground warms to wear it’s first garment.

Green shoots into the sky, the sun pulling it nigh, now the tulip is no longer in confinement.

Grow fast as it may, there soon will be a day, it’s flower will become an adornment.

 

Working all night and all day, just toiling away, there was Steaver.

Stocking his pantry, repairing the pond’s gantry, there were none who worked hard as that beaver.

He knew that this fall, his gamble would pay all, if only he worked with enough fever.

His pond tripled in weeks, and without any leaks, he had no equal in felling nor as a weaver.

 

Four living things breathe, they rest and they eat, at once proving that they’re alive.

A larva, a bat, or a bulb… a beaver and everyone all, we are called to push and to strive.

Each ascendant in our season, no one knowing when or the reason, but we all have that heavenly drive.

To be who we are, without worrying ourselves ajar, and living while were alive.

 

Sincerely,

John Pepin

Balance

Monday, November 17th, 2014

Dear Friends,

It seems to me, balance is paramount to a prosperous, safe and upwardly mobile life, just as it is to a flourishing, secure and advancing society. To keep balance, religion, science and politics should not intermingle, being different in kind they are like water, iron and salt. It is self evident that religious people should not decide who can run for politics, the same as scientists shouldn’t make decisions of religion, politicians shouldn’t interpret science or religion, etc… Each in it’s own field is a good that uplifts the human condition, but when one becomes supreme or is crushed by the others, the whole of society suffers. Societies have three parts just as each of us have three parts to our psyche. Our rational mind, our emotional mind and our spiritual mind have their doppelgangers in a society… science being the rational, politics being the emotional and religion being the spiritual. Balance being the way to keep society advancing, prosperous and moral. If we see our society becoming corrupt and needy, it is because the balance is off.

Our emotion is like an elephant, it has power to do a ton of work, but it has the potential of getting out of control too. Our rational mind is the rider of that elephant. The rider can steer but it is the elephant that does the work. Our spiritual mind lets the rider know what is right and what is wrong, what work the elephant should, and should not do. Working together, the rider guided by his morality, driving the elephant, is how societies get great works done. The grandest advances of the human race have been accomplished by societies that had this balance. Great works of architecture, art, philosophy and the mechanical arts have all sped ahead in times of balance.

Balance is never long kept. Power being so seductive, any faction that has got a chance to become supreme or to advance their power at cost to one of the others, will do so. It is human nature. The moment this happens the balance is upset and society precesses. It is hard to discern at first, and the faction that has gained power is in the best position to see it, but their egoistic interests collide with their self interests rightly understood. Sometimes even a small disturbance to the balance can result in a large tailed event, because when dealing with human societies that are complex systems, the likelihood of outcomes is on a power scale not a bell curve.

When the three legs of a society are in balance even if there is a collapse, as when the grains of sand exceed the angle of repose and settle to a new equilibrium, the slide lands with most people much better off than they would in a totally chaotic reset. The new societal equilibrium is more stable as well. Based on a balanced foundation, a society can stand a great many imbeciles for rulers and villains for advisers, but where society lands unbalanced, it lands with voids that weaken the whole, leading to social sinkholes to fill those voids, sometimes leading to a total societal collapse and reset.

A balanced society where religion is respected, science is allowed to flourish and politics is well disciplined, will naturally be prosperous, have a growing standard of living and it will be safe. We all want to live in such a society but we cannot let go of our prejudices. The despotic politician wants total control over everything, as does the religious zealot, and the mad scientist. If we want a safe, advancing and prosperous society, where our children can be expected to live better, longer and healthier than us, we have to start in our own hearts.

Once we get ourselves in balance we need to get our societies in order by electing people who are in balance. We have a tendency to elect mad scientists, despots or zealots to power. They have the most charisma and elections are nothing but a charisma contest. A perfectly spinning top is not dramatic and has no charisma, but a top that is so unbalanced it hops cannot help but catch the eye, and move our heart. We then vote with our emotions. We would like to think we use our logic to choose, but most of us don’t at all and none of us are immune to emotion, or our blind faith, and even logic itself without passion and the golden rule can lead us astray. The sad outcome is that we happily elect the very worst people to power because of their unbalance.

A well tuned car runs most efficiently, but to keep a car well tuned, one must understand how a car works. On a macro scale, when societies keep a balance between science, politics and religion they enjoy prosperity, safety and a rising standard of living. When a society attacks any one of those legs and one or two of the others become ascendant, that society experiences crime, poverty and a crumbling middle class. The way to become a balanced society is to become balanced ourselves. Nurture the scientist in us with education, feed our inner cleric with prayer and engage in the politics of the day. Balance ourselves, elect balanced people to office, often against our emotional inclination, and balance will return to society. Balance is the answer.

Sincerely,

John Pepin

Election Integrity

Monday, November 3rd, 2014

Dear Friends,

It seems to me, for the democratic element of our republic to function, as democratic, first there must be honest elections, barring that there is no democracy only the tyranny of the powerful over the powerless. If someone wants to become a despot, all that is needed is to give the appearance of free and honest elections, but in fact so undermine the election process with fraud and vote rigging that there is no honesty to the election process at all. Of course to do such a thing is villainy of the highest order. History shows however, and we all know from experience, that people can be counted on to do whatever they can to get advantage, in this the political elite are far worse than the average man or woman, because there are almost never consequences to their wrongdoing. Elections that are rigged are not elections at all but coronations.

Since the democratic element of the United States is the essential means for our governors to get the consent of the governed, us, the integrity of the election process is essential. The United States is a republic, a mixing of Aristotle’s Right forms of government, despite the pervasive propaganda that the US is a democracy, one of Aristotle’s wrong forms. Aristotle’s right forms are, monarchy, aristocracy and polity, while his wrong forms are tyranny, oligarchy and democracy. His best form is a republic, a blending of two or more of the right forms. What the right forms have in common, is that they serve the needs of all people, and what is wrong with the wrong forms, is that they each serve the people with the power. Tyranny serves the monarch, oligarchy serves the aristocracy and democracy is the tyranny of the majority over the minority.

Perverting the democratic element of our republic turns the aristocratic element of our republic, the legislature, into oligarchy, it perverts the monarchical element, the President, into a tyrant, eliminating altogether the democratic balance. All this mischief is done by degrading the base of our system, which is democracy. It should be obvious that corrupting the foundation makes the edifice unstable. Each part of the government must necessarily change from serving all the people, rich, middling and poor, to serving themselves only. The President becomes a tyrant who only serves him or herself, the legislature becomes an oligarchy that seeks only more power and wealth… and the people follow their leaders and become self serving egoists as well. Clearly, no society or government no matter how constituted, can survive such depravity for long.

Those who might agree with what the corrupting faction is doing today, should take heed that no matter how much you might agree with them today, you may not tomorrow, but then it will be too late you have given them the power to do it, and given up your power to stop them. Many know there is blatant vote fraud but spuriously argue there is none because they want their guy to have power. They might believe their guy will do good with that power, but there is no case in history or in the future, that power gained by such means has led to anything but ruination for the people and the society. This is because power is like cocaine or heroin, in small doses they help with pain, but as the doses get ever larger, they fog the mind and corrupt the soul until the drug is all consuming. The addiction of the elite to power never leads to a good result, it can only lead to all of us loosing all that we have, our grace, our wealth and our children. All great civilizations have fallen thus.

It is by small steps that we race to Hell and by small crimes that great societies crumble. Voter fraud is by far the most corrupting form of small crime. Each instance may seem small but cumulatively they add up to great evil. Dishonest politicians can be dealt with, common crime can be cleaned up and foreign attacks can be beaten back, but rot from within hollows out the very center of a civilization. Once the center is gone collapse is imminent and nothing can stop it. Accepting vote fraud and election rigging is the surest sign a civilization is rotten from within. In 25 AD Titus Livius told the Roman people that unless they changed their ways Rome would collapse. He was called an idiot by the patricians and plebeians alike. Rome had lasted a thousand years and would last a thousand more. History showed Livy correct and everyone else wrong.

What Livy did have wrong however, is that it is never the people that corrupt a society, it is always the elite that introduce it, then pass it down to those they lead. Tolerating rigged elections guarantees corruption of the most pernicious sort… no matter how much you agree with the party doing it. That is because government must serve all else it is one of Aristotle’s wrong forms and will become despotic. Since democracy is the base of our system of government, election fraud that pulverizes the foundation, weakens the whole of our society. Therefore, if we don’t stand up to our leaders and demand vote fraud be eliminated, requiring those engaging in it be punished severely, our complacence will sow the seeds of our own destruction, enslaving our children to whomever rises in our place.

Sincerely,

John Pepin

A Positive Attitude and Good Outcomes

Monday, August 25th, 2014

 

Dear Friends,

 

It seems to me, an optimistic outlook is as vital to an optimistic outcome, as a negative outlook, is vital to a negative outcome. We unconsciously decide what we want of all things, even life itself, and we set ourselves to get it, be it a good outcome or a negative one. Sometimes it’s because we consider ourselves unworthy of this or that good, perhaps we have fallen below our misery quotient or simply that we hate ourselves so badly we can’t stand to see something go right, that we undermine our success. Thinking in negative terms, in negative ways, expecting negative things… will beget those negative things. While it can also be said to be true that thinking optimistically, acting optimistically and behaving optimistically will bring the best outcome to you, like a magnet does iron filings. This is such an important lesson to learn but is unknown to so many. If we want better outcomes, we need to think, act and expect better.

 

Of course that is not to say that all Pollianish notions will come true. There must be planning, preparation and follow through, to make an optimistic outlook something other than mere baseless hope. An optimistic attitude makes the preparation, planning and follow through much more likely. If we launch into a project with a positive attitude, we will spend more time planning, if we expect great things we will prepare more carefully and if we are optimistic while we are working on it, we will expend more effort in the process. All of which makes the best outcome more likely.

 

A negative attitude will undermine one’s efforts more effectively than groundwater hollowing a sinkhole in Florida. If we expect failure, our plans will be lackadaisical, if we don’t have hope our preparation will be half hearted and if we dwell on a negative possible outcome our work will be sloppy due to inattentiveness. A negative attitude will attract a negative outcome every time, unless dumb luck intervenes. With a positive attitude we will take more enjoyment in the process which makes the outcome naturally better, while focusing only on the outcome corrodes our enjoyment of the process, making a good outcome less likely.

 

A positive attitude is magnetic for people as well. We all want to be around positive people, it is in our nature, just as we avoid negative people. We seek out people who are fun to be around, those who are full of good news and people who make us feel good. A positive attitude cannot but do these things. If we have a positive attitude we can be complimentary without being deceitful, it is natural to be friendly without over familiarity and we tell stories of our successes and good things while avoiding the negative and bad, without being pretentious. Most people want to be around others who have a positive attitude.

 

A negative attitude is repulsive. Think about it, we all know the gloomy Gus who always has a sob story. They are draining. Ask them how they are and a river of pains, burdens and crosses emerge from their mouths. There could be a ton of good things happening in their lives but they only tell us about the negative. They hold you up for hours, (or at least it seems so), regaling you with their troubles. They have the Job complex. The sad thing is, they are avoided because of their constant complaining, while what they really need is the company, advice and shoulders of others.

 

The trick is to have a positive attitude. A positive attitude is as easy, and as hard, as to will it. Willing a positive attitude is not like willing a paper clip to bend or to force someone your mental slave, it is to make an intentional change in the way we think… then do it. We have to monitor our thoughts for a while until we become accustomed to thinking optimistically. We shouldn’t be vexed when we occasionally do think negatively, instead we should simply stay calm, let the negative thought pass and redirect our thoughts in a positive direction. Changing the way we think can be a very difficult thing to do. Our thoughts gouge deep channels in our minds, but the mind is ductile, those channels can be changed no matter how deep. When a rational maximizer finds a way to improve his or her life, at little or no cost, they take it… it is the best way to rationally maximize one’s outcome.

 

 

Sincerely,

 

John Pepin

 

Capitalist Security System and a Zero Unit Cost of Labor

Monday, August 18th, 2014

 

Dear Friends,

 

It seems to me, another thing most countries could do to improve their economy, would be to establish a Capitalist Security System (CSS). Such a system would be completely different than the typical social(ist) security system (SSS) we have now. Some of the ways they differ are, CSS would invest and add to the stock of capital available for growth; while SSS steals from the capital stock, CSS would add to generational wealth; while SSS steals from generational wealth, CSS gives every man woman and child a stake in society; while SSS gives people a stake in more powerful government, to take the taxes needed, etc… If a country redirected the funds now going into all the SSS in that country were instead turned to a CSS, that nation’s economy would reap huge rewards, incentive wise, in productivity and capital available for new companies. Everyone would benefit with each successive generation reaping ever larger rewards while contributing to the economic success of their countries.

 

We all know how SSS works but I’ll explain it for those who might not be sure.The Social(ist) Security System is a system, where the government takes money from those young enough to work and the businesses that hire them, then gives some of that money to those who have reached an age deemed too old to work. The money goes through various bureaus of government and some of the money stops there to fund those bureaus. Some of the money gets caught in the sieve of corruption and conniving that surrounds every government bureaucracy and stops there funding corruption. The rest gets to those on government pension. The system is expensive because so many hands are in it, it fuels corruption with government money, it is unsustainable, it takes capital from producers and redistributes it to non producers… among many other problems.

 

A CSS would operate very differently. A Capitalist Security System would not invest in government’s power, as does typical social security, Capitalist Social Security would instead invest in the power of the market through dividend paying stocks. Initial funding would be through legally required investment of a portion of one’s income, or perhaps a .5% tax on consumption, (Sales tax). It would be run by an algorithm that buys dividend paying stocks the world over based on several criteria, one of which would be longevity of the business model and of dividend history. The fund would grow by reinvesting the dividends and selling stocks that under perform via dividends. Once the first generation reached the requisite age, then it would pay out 50% of the dividends to the retirees and reinvest the other half. A person’s portion of the income stream from the fund would transfer to their heirs upon their death as the pensioner see fit. The heir could then start receiving payment immediately or allow their portion to grow and get larger payments later, say when they retire.

 

It would probably be administered by a bureaucracy in government, but it doesn’t need to, it could be administered by some financial firm, the operation of the CSS fund being awarded by competitive bid based on the firm’s fees. There would have to be special tax exemptions for the fund. One tax exemption would be to stop the double taxation of dividend income. Either tax the company or the investor, not both. In the case of CSS the company would pay the income tax, (if there is one) and the fund would face no tax penalty. The investor should not be taxed on the income he or she gets out of the fund, since the corporation already did, and the fund itself is just an agent of the investor. In the case of the CSS fund the investors would be everyone.

 

The economic advantages should be clear for anyone to see. One would be the strong incentive for companies to reinvest in plant equipment and training. Else they run the risk of being sold by the CSS fund which would be the kiss of death to a company’s stock price. The huge fluctuations in the stock market would be diminished due to the fact the CSS fund wouldn’t sell it’s stocks in a panic, the incentive for companies under such a system would be to pay dividends as well as grow the company. Another advantage would be that pay for corporation bigwigs would face downward pressure, because if too much is sucked off today the power of shareholders to demand more of the company’s profits given to them as dividends is far too diluted by various factors, but if a giant fund such as the CSS showed displeasure at the high pay of a CEO the firm would toe the line. Perhaps most importantly, in the real world, SSS must eventually fail, because government will eventually run out of other people’s money to take, but a CSS would be self sustaining and grow organically. The list of economic advantages is endless for a Capitalist Social Security System.

 

With human like robots coming on the scene sooner than people realize, (20-40 years) this will be a phenomenon that will eventually drive the unit cost of labor to zero. A zero cost of labor will usher in a completely new paradigm for humanity. Maybe for the better and maybe for the worse but it will be different than anything that has come before. For a leader in government to see this and envision a means to stave off the possible starving masses, that such a situation could give rise to, shows vision. A Capitalist Social Security System could be just such a means to keep future generations, who will have lost the ability to sell their labor in the open market for wages, a means of sustenance. A means of sustenance that will grow with each generation. Like I said, “ another thing most countries could do to improve their economy, would be to establish a Capitalist Security System.”

 

 

Sincerely,

 

John Pepin

 

Taxing Production Or Consumption?

Thursday, August 14th, 2014

 

Dear Friends,

 

It seems to me, if a leviathan government must be built and paid for, it is better to tax consumption than production. Examples of taxing production are, income tax, taxing interest on investments, corporate taxes, inventory taxes etc… Taxing consumption is when government imposes sales taxes and value added taxes. The question of whether or not we build up a leviathan, since we already have, is moot and so, until we tear the edifice to human hubris is torn down, the question of how we pay for the thing becomes paramount. Taxation, being a counter force to whatever it taxes, if we choose the wrong method of taxation and stifle our economies in pernicious ways we lower potential economic output more than is necessary. So this question, whether to tax production, consumption or both, has implications for every one of our standards of living.

 

It is a well know phenomenon that taxes drive up the cost of that which is taxed. As the cost of a thing goes up the demand for it goes down via the supply demand curve. The utility of spending that additional dollar for what you get diminishes… eventually to zero. As demand for a thing goes down the production of that thing will follow. As production drops units of productive capacity are taken out of production from building that thing, and are put back into the system, (people are laid off, machines are idled and plants are closed). Now we can frame our question this way, should we lower productive capacity, or demand, by taxes necessary to maintain the gigantic government we have, while limiting the damage to our economy such necessary taxation will do.

 

Many economists in the Keynesian camp will immediately argue demand must not be stifled by taxation and so production must be taxed. Their mantra is; demand drives supply. They follow the aggregate demand aggregate supply model of economic growth. The aggregate demand aggregate supply model has the advantage of being simple but it has the disadvantage of being wrong. Japan has focused like a laser beam on their economy for over a decade using the aggregate demand aggregate supply model. You know… their “Lost decade.” FDR went whole hog Keynesianism and ushered in the Great Depression with it. There is no example in human history where aggregate demand aggregate supply actually predicted or accurately modeled an economic event, but the faithful are hopeful. So taxing demand might not be such a bad thing as the demand side economists would have you believe.

 

Most who call themselves supply side economists, and so would be against taxing and thus lowering production, don’t have a clue about the basis of supply side economics. To say “supply side” is to focus on too narrow a policy. Supply side economics seeks a dynamic economy while demand siders only seek to increase demand, the source of which, (to them) is irrelevant. As a result, a demand sider is perfectly happy with a stagnant economy where, the older a firm is the safer it is, as long as it reliably grows it’s demand. Those of us who are supply siders seek to make conditions favorable for entrepreneurs to start businesses, grow those businesses and disrupt older technologies. We recognize that it is in the very disruption itself, of new ideas being implemented making old ideas outmoded, that is the fire in the chamber that drives an organic free market system. An organic free market creates new luxuries, makes old luxuries necessities and lowers the cost of our needs, and it does it by implementing new ideas.

 

Taxing production lowers production and so puts people out of their jobs, lowers wages due to the lower demand for labor but most importantly… creates a barrier to entry for entrepreneurs. Taxing consumption on the other hand drives down demand for those goods and services that are taxed, while creating a demand for behind the counter merchandise. Clearly, if we tax both production and consumption, we get the negative outcome of both, so in a sane world the doing both option should be out. If the very thing that powers the market system however, is the introduction and implementation of new ideas, then it follows that the implementation and introduction of new ideas should be fostered at all costs, and not undermined by any means. While taxing production makes it harder for an entrepreneur to start a business, taxing consumption makes capital more available, (since the interest on it wouldn’t be taxed), which would lower the barrier to entry for the would be entrepreneur.

 

The track record of the demand siders should speak for itself as should the track record of the supply siders. Every time demand side economics is blindly followed the economy gets the moniker “Great,” like, Great depression, Great recession etc… When supply side economics have been followed the economy has always flourished. The supply side policies of Calvin Coolidge, who came into the Presidency during a bigger economic downturn than Obama did, ushered in the period of the fastest economic growth in US history. Ronald Reagan, who inherited Jimmy Carter’s economic, foreign policy and Cold War messes, made it easier to do business in the US and the US economy rebounded. So, given their historical track records, taxing consumption and only consumption, would be the smartest move and would have the least negative effect on our economy. Because… If you seek green, blending yellow and blue works better than red and white, no matter how much you might want red and white to make green.

 

 

Sincerely,

 

John Pepin