Regulation in Canada and the US

Posted on December 11, 2014 by john

Dear Friends,

It seems to me, the contrast couldn’t be more stark between the policies of Canadian Prime minister, Stephen Harper and the US President, Barak Obama, the difference being their exuberance to regulate. I am of course talking about Stephen Harper’s response to new regulation over Canada’s oil and gas industries. Harper called the idea, “Crazy economic policy…” While at the very same time, Obama is implementing new regulations to limit the amount of potentially explosive gasses in crude, shipped out of North Dakota. The first protects the wealth and freedom of the people while the second corrodes our economy, wealth and liberty. Unless we grasp this fundamental difference between sound economic policy, and poison pill economic policies, we will be forever trapped in an ever downward spiral of poverty and despotism.

Stephen Harper was the only head of state that successfully navigated the financial crisis with his country’s economy intact. Canada didn’t see the collapse of it’s economy like every other nation on Earth did, (including China), and it’s banking system emerged as one of the most stable on the planet. Today, Canada is experiencing a decline in their fortunes due to the floor dropping from commodities prices, because Canada’s economy is dependent on natural resources as the primary growth mechanism. Yet even with the steep decline in commodity prices the Canadian economy is still firing on all eight cylinders. Because of Harper’s policies.

The US on the other hand, was the primary cause of the financial collapse. The policies that led to the crisis had their roots in Congress’ desire for economic tinkering. Democrats had become incensed by what they called “Redlining of neighborhoods.” To rectify that “unconscionable” situation, they forced lenders, via regulation, to give loans to people who the lenders knew couldn’t pay back. Economics is like water, no matter how tight you hold your hands, you cannot squeeze water, and like water those regulation caused the banking and financial system to have untended consequences. The financial system had to create new and innovative ways to mitigate the risks of default by borrowers, through bundling huge numbers of mortgages together, including many good loans with a few bad loans, (a derivative), with the idea that if a few went underwater, the rest would be fine and the underlying security would be solvent.

When the housing market went into bear territory the whole scheme came crashing down. More loans were going into default than projected, due to home owners not only unable to pay their loans, but unable even to refinance, because their principle had now become higher than the underlying asset price, IE, their homes. Many lost their homes and many voluntarily gave the keys to the bank. This caused the whole economic system to become unbalanced, (since no one could determine the real value of those derived financial products). With no one able to fix the value of the derivatives, the banks balance sheets became opaque, leading to them looking to their insurers to re balance their books. The giant insurers like AIG became insolvent with so many claims, and the house of cards came crashing down… all because of the government meddling in the economy to give a politically favored class an advantage in an otherwise free market exchange.

Canada changed course when they elected Harper. They went from an uber progressive state to a conservative one… just in time. Harper has been trying to remove burdensome regulations from the books and standing strong against new economy destroying regulations. This latest statement from Harper is telling of how cagey he is when it comes to economics. He rightly realized that further hobbling an economy that is already being slowed by external forces, (the global slowdown), would be counter productive if Canada is to see economic expansion and an improving standard of living. The difference was further highlighted by the Canadian dollar versus the US Dollar, during the financial crisis, for the first time the Canadian dollar became more valuable than the US dollar!

Regardless of the economic weakness, Obama and his new class progressives are increasing regulations at light speed. The newest regulations on the US oil and gas industries is supposedly to protect people from exploding rail cars like in Quebec. Now, that makes perfect sense, unless you know the facts of what happened in Quebec. The cause of the accident that burned Lac-Megantic to the ground, was faulty brakes that allowed the untended full train to roll seven miles down a hill, and derail near the waterfront. It had nothing to do with any explosive gasses it had everything to do with the brakes on the train. Moreover, if safety is the real concern, then a pipeline could easily be built that would transport the crude more efficiently and more safely, but the downside of that idea, is that politically favored Warren Buffet would loose millions, since his trains are the ones that transport the crude.

Today the US is mired in an economic depression in some ways more pernicious then FDR’s. The reason is the incessant meddling in the economy by the elite to enrich their cronies at cost to everyone else. Thousands of hard working bureaucrats tirelessly writing new regulations to destroy the world’s economy has become the norm. Canada is trying to chart another course, piloted by Stephen Harper, that will enrich the average Canadian. Every time deregulation has been tried, it has resulted in economic prosperity, and every time the elite have become enamored with economic shenanigans, the economy has gone into depression. This time is no different. What I hope will be different, is that we will learn our lesson, that heavy handed regulation of an economy, destroys that economy. Sadly, with all the hard lessons we have ignored in the past, I doubt we will learn it this time, but at least Canada is on the right course… for now.

Sincerely,

John Pepin

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Arbitrary Rule and Great Poverty

Posted on December 8, 2014 by john

Dear Friends,

It seems to me, two of the most corrupting influences on Mankind, are both arbitrary power and great poverty. Both stultify the soul and wither one’s empathy, they lower a person’s thinking to the most base level, reducing him to a mere animal, and both great poverty and arbitrary power give a human being a sense of entitlement, all of which lower instead of raise the individual. Only a saint could remain unaffected by unlimited power or great poverty. Therefore, if we want to live in a virtuous society, if we want mankind to grow in knowledge and wisdom, and if we want our children to live in safety and prosperity, we must strive to mitigate the effects and to eliminate arbitrary power and great poverty.

Arbitrary power has been known to be evil for thousands of years. Solon, the lawgiver of Athens, made even favoring arbitrary power punishable by the ostracism. Such was the threat the ancient Athenians held for arbitrary power. What arbitrary power is, is exactly what the term implies, that a person or group, have total control over a land and it’s people. They can make up laws as they want, they can change laws, they can take the property of others without consequence, they can order citizens executed without trial… basically, there is no limit on their power over others. Essentially, everyone suffering under arbitrary rule, are slaves, in the most draconian sense of the word. There are two kinds of tyranny, legal and arbitrary, a legal tyranny is the better because even the despot must follow the law when he tyrannizes you, but in arbitrary rule the despot’s power is unlimited. Nazi Germany is an example of a legal tyranny.

Great poverty lowers a human being’s thought to basic needs. What drowning man wouldn’t pull down even his own loved one? When living in great poverty a person doesn’t have the luxury of being able to take flights of imagination, the stomach intrudes on the mind. Those who live in great poverty have no means to change their lives because society itself lacks the resources. The starving man has no scruples around a loaf of bread, similar to a despot, who has no scruples at all. Seeing one’s own children starve to death takes away our humanity. How can it not? All of these factors impel those who live in great poverty to join rebellions, and engage in crime, because nothing strips the veneer of civilization from a person like starving to death. Unlike the despot however, once great poverty is lifted from someone their humanity returns rapidly, but the person who practices arbitrary rule is lost forever.

Wherever there is great poverty there is arbitrary rule, and whenever there is arbitrary rule, there will be great poverty. The two go hand in hand. In States where there is arbitrary rule the economy cannot function properly. There is not one example of an economy that survived arbitrary rule throughout history. Marxist nations have all collapsed economically because socialism grows arbitrary rule like a stagnant pond grows algae. Throughout the ages every great civilization that has risen in virtue has fallen in vice, vice that was introduced by arbitrary rule. When Pericles came to power in Athens he perverted Athenian polity and law to his own ends. He built great edifices to his mythical gods, and his ego, he used the ostracism as a weapon to enforce his arbitrary rule, and the result was the subjugation of Athens to Sparta.

In nations with great poverty there is always arbitrary rule. Darfur is an example of arbitrary rule destroying a people and ushering in great poverty. There has never been great wealth there, but the people had sufficient food, shelter and clothing. Once the despot, Al-Bashir, decided the people of Darfur were expendable, and on resources he wanted, he simply took the resources. When the people rebelled, Bashir sent military jets to kill them, he forced them out of their ancient villages and into the desert. The resulting great poverty was on television for all to see. Yet, most took the wrong lesson from that example, most believed the great poverty of the people of Darfur was the result of war, ignoring the root cause of that war, arbitrary power. Many believe Darfur’s great poverty could be alleviated by foreign aid, but the reality is that the warp and the woof of the problem is arbitrary rule.

Unfortunately, the siren call for the leaders of any nation to arbitrary rule is so great that only the most saintly, or the most limited, can resist it… and it is obvious that our leaders are not resisting. Despite the cautionary history of collapsed civilizations, lost wealth, and entire nations enslaved, arbitrary rule is even more of a threat now than ever in history. With modern technology, a despot could control every aspect of the people’s lives, like in the book, 1984 George Orwell. With our market based economies, of the various nations around the world, incipient arbitrary rule has already done great damage. Today we still live in relative wealth, but that is slipping away fast, even as we are told we should turn to socialism, to get an ever larger piece of an ever shrinking pie. In the end, if our children have to live in great poverty, it will be because we allowed arbitrary rule… again.

Sincerely,

John Pepin

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What is a Well Educated Human Being?

Posted on December 4, 2014 by john

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

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On The Riots In Ferguson

Posted on December 1, 2014 by john

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

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

Posted on November 27, 2014 by john

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

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Illegal Immigration, Amnesty and Fairness

Posted on November 24, 2014 by john

Dear Friends,

It seems to me, one possible solution to the illegal immigration problem Obama’s policies have visited on us, would be to import one legal immigrant who is on the waiting list, for every illegal that is deported, and if the deported person returns illegally it would be a year in prison, then permanent deportation. All problems in human society exist because of negative incentives. Replace those negative incentives with positive incentives and many of the most intractable problems can be turned from a bad into a good. Change the incentive and you change the behavior. Our standard of living, our children’s welfare and even our very republic are in jeopardy if we don’t do something about illegal immigration.

Everyone agrees legal immigration is one of the factors that has made America great. Just think of how much Tesla brought to the US when he immigrated. Immigrants who take the time to come here legally, bring new ideas, new ways of thinking, they have persistence and have a strong work ethic. The US benefits greatly by legal immigration, illegal immigration however, brings with it many negative consequences. Some of these negative consequences are, an underclass, lowered wages, diminished economic outcomes for everyone, all forms of abuse, human suffering at every stage of the process, etc…

All policies, especially ones that directly impact human lives, must be fair. As I have said before Justice is the golden rule and the golden rule is fairness. The moment a person is treated differently by governmental edict than another – there has been an injustice done. That is self evident. So when someone files the paperwork, jumps through all the hoops and gets in line to enter the US, and another jumps the fence and is caught but allowed to remain, an injustice has been done to the person who is going the legal route. That injustice is magnified if the person who jumped the fence gets amnesty, the person waiting in line’s life is on hold, as they grow old, meanwhile guy who jumped ahead gets rewarded with amnesty.

Our market system, such as it is, requires honest people to function efficiently, therefore we should encourage honest people to come here. If no one could be trusted there could be no commerce. How could you trust a check if it was almost certainly bad? How could you work for someone if it was most likely you wouldn’t get paid? The economy requires, as a prerequisite, a basically honest people. Those who try to enter the US by the legal route, their very actions prove, they are more honest than someone who jumps the fence, who by their actions show, that law and morality are lower on their list of priorities than naked chaotic self interest.

The problem with illegal immigration is that it creates an underclass. The entire American experiment as well as the Western world view is based on all human beings being created equal, in the eyes of God and in the eyes of government. An underclass, especially a tacitly accepted underclass, is the antithesis of that moral foundation. An underclass in a society create a whole host of negative incentives to abuse those in the underclass. Why pay the going wage when you can get what amounts to a slave… to mow your lawn, tend your baby or vacuum your floors? The only ones who benefit by an underclass are those who plan on exploiting them.

Incentives always work, whenever human beings are the actors, incentives are the answers, here is how the incentives of replacing illegal immigrants with legal ones will function. When someone is caught in the US for any reason illegally, they would be immediately deported and someone who is on the waiting list would be given a green card. If someone who has been deported is found in the US again they would go to jail for a year and then be deported without being replaced. If anyone is caught a third time they would go on a permanent banishment list. They wouldn’t even be allowed to come here legally. Lastly, the teeth of Reagan’s amnesty program would be replaced, businesses that are caught hiring illegal aliens would face jail and huge fines. As the list of people waiting to come here legally gets shorter, and the list of those sent home gets longer, the incentives will become clear. People are smart and will take the path of least resistance.

The US needs immigrants, immigration policy must be fair, it needs to encourage honest people to come here, and one of the problems with illegal immigration is that it creates an underclass with all the negative effects on human beings of an underclass. Today, with Obama waiving his magic dictator’s pen, claiming he will give anyone who jumps the fence a free pass, the US has become a giant magnet to millions of iron filings. It has become foolish to try to follow the law to come here legally, all one needs do is get here by whatever means and Obama will grant you amnesty, and so, the US is being flooded by illegal immigrants. The elite that encourage illegal immigration must know the negative consequences to it, and therefore, they must also be accepting of those consequences. Imagine, destroying a nation’s economy, impoverishing working people by driving down their wages, creating an underclass to be exploited and abused, encouraging people to risk their lives and the lives of their children, to be that underclass… all so some multimillionaire new class progressive elite, can get their lawn mowed for a few dollars less.

Sincerely,

John Pepin

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Living While We Are Alive

Posted on November 20, 2014 by john

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

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Balance

Posted on November 17, 2014 by john

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

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The Impending Japanese Economic Implosion

Posted on November 13, 2014 by john

Dear Friends,

It seems to me, Japanese Prime Minister Shinzo Abe, is both strangling his nation’s economy while he forces food down it’s throat. The Japanese Central bank’s decision to monetize their debt is a sure path to economic asphyxiation. The side of the road of history is littered with the wreckage of economies that have tried that hocus pokus. Abe is choking his economy with high taxes, and is planning on raising taxes even more, while he destroys their currency! Japan has endured a Keynesian driven depression for over a decade. Each political party more in love with the welfare state than the other. If Japan wants to remain an economic powerhouse, and thereby it’s standard of living, it must turn away from coddling super giant businesses, and unleash the dragon of entrepreneurship. That would save his economy and restore prosperity to Japan, or France, Ukraine, Greece, Argentina, Venezuela, etc…

It is like the ancient proverb about the old farmer. At the end of the day an old farmer came into the house covered with dirt. His son asked him where the Old Farmer had been all day. “I have been out helping the corn grow.” Replied the old farmer. The son ran out to find the old farmer had pulled up all his corn. Like the old farmer Abe is trying too hard to “help” his economy grow. Instead of printing huge sums of money for the government to spend, the Japanese central bank should be buying gold, strengthening their currency to protect the people’s wealth. Instead of following the example of Switzerland the Japanese are following the example of Argentina.

Argentina has gone through more than one episode of hyper inflation and are headed to another. The middle class in Argentina has been hollowed out by repeated rounds of economy crushing monetary calamity. They have monetized their debt which has always led to hyper inflation. Monetizing a nation’s debt is basically printing money for government to spend. It is usually done by the central bank buying it’s government’s bonds. This cycles the money through the crony banks on it’s way to the government’s checkbook.

Switzerland has always protected it’s currency and has always had a good standard of living coupled with low inflation. The Swiss middle class is healthy. On November 30 the Swiss are going to the polls to decide if they are going to force their central bank to buy gold and repatriate their expatriate gold. That would have the effect of increasing the level of gold backing of the Swiss Franc while also protecting the nation’s gold from third party adverse incentives. Japan would be well advised to strengthen their currency, keep it stable even to the point of deflation, than ruin the credit of the nation as a whole.

When Japan started down the rabbit hole of Keynesian deficit spending, they had a government surplus, now they have a decade of no growth and more than twice their GDP in government debt. Instead of squandering all that money on Keynesian demand side “stimulus” they should have spent it on funding supply side entrepreneurs. More businesses require more employees. The redundancy of labor among many smaller businesses drives up the demand for labor and thus wages. New products that flood into a society during times of rapid innovation, from many entrepreneurs adding to the economic aggregate, improve the standard of living of everyone in those societies. High and rising wages drives up demand, exponentially more than any government program, which can only take from someone who earned it, so they can’t spend or save it. The government then simply throws that hard earned money into the fire of inefficiency that is government spending.

Raising taxes in an already highly taxed nation is insane. Japan is the poster child for crony capitalism. It is highly taxed and regulated, suffocating entrepreneurs with regulations and taxes. All of which is done to protect super giant businesses from competition. Economy of scale is true when it comes to brute force manufacturing, but not in the creation of new products, ways of organizing a business or making existing products more effective. The ability of a small startup to get funding, operate with minimal government friction, (taxes and regulation), as well as operate in a standardized economic environment, are very highly correlated with the long term growth of that economy and a rising standard of living.

The Japanese government needs to cut taxes. Cutting taxes puts more money into the hands of people. It doesn’t matter if they spend that money, put it in a bank, invest it in equities or give it to charity, the money kept by the people will go miles further, per dollar, than it ever could being squandered by government. Allowing a little deflation wouldn’t be such a bad thing. Instead of taxing and spending, government could give back by allowing deflation, in an entrepreneurial society deflation allows innovators to do more with less. Deflation is like a pay hike to everyone in society. The only one who is harmed by deflation is an overspending government. The Japanese government should appoint a panel to find outdated and redundant regulations and laws that can be stricken from the books. Cull the regulations and laws as often as possible and as hard as politically feasible. These pro free market innovations would unleash terrific creative power, leading to well distributed societal wealth, than unlimited government spending on fifty thousand dollar hammers and solid gold heated toilet seats.

Sincerely,

John Pepin

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Pseudo Wars

Posted on November 10, 2014 by john

“No nation could preserve its freedom in the midst of continual warfare.”
? James Madison

Dear Friends,

It seems to me, all the “wars” the US has engaged in as of late, are nothing but pseudo wars, not wars at all but a way to take away the liberty of the people. I am of course talking about the war on drugs, the war on poverty, the war on terror, the war on obesity, and so forth. These cannot be termed wars anymore than any other policy a government enters into to meet a non corporeal problem. War is violent, terrifying and expensive way to defeat a corporeal threat. Moreover, calling such things wars, lowers the brutal reality of what war is, and creates a situation where the elite can keep a nation in a state of perpetual war. The appointing of “Czars” to oversee these “wars” is more proof they are overtly a means to evolve us to tyranny, war has generals, Czars are despots. If we want to stop the slide to tyranny we must examine the ways the elite evolve a nation to despotism and demand they be stopped.

Let’s face facts, a war on fatty food is an unwinnable war, like a war on terror or a war on poverty, by their very definitions they cannot be won. It is impossible to eliminate fat from foods. Fat is an essential nutrient that provides the calories we need to live. Like anything that is good, when overused, like the term war, it leads to all sorts of bad consequences. To fight a war on the strategy of an enemy, so as to avoid naming that enemy, is as certain a way to loose the war with the unnamed enemy, as it is to loose the war on their strategy. Imagine how the Second World War would have turned out of the allies fought a war on Blitzkrieg instead of the Nazis. Poverty will always be with us it is a human condition. The definition shows how absurd it is to fight a war on poverty, poverty is the lowest ten percentile of a people, economically, it is a relevant statistic. Even if a government were to execute the poorest ten percent there would still be a poorest ten percent. Even if ninety nine percent of the population were executed there would still be relative poor!

Embarking on fictitious wars has the propaganda value of claiming the government is doing something about a perceived problem. The term war focuses the mind and implies all a nation’s might will be brought to bear on the problem. The leader who coins the war will be thought of as really caring, to be so adamant about fighting such and such a problem, that they go to war with it. The value is only to the politician who names it… not the people, government, society or culture, they are damaged by the “war” effort. Everyone but the politicians must give up some sovereignty, money and liberty to the politicians during times of war, and so a fictitious war is a way of prying our liberty’s and largess from us, not to achieve some excellent goal.

War cannot be fought against an idea, tactic, class or food, it can only be fought against an enemy nation by killing and maiming real human beings, and destroying the infrastructure that supports their war effort. Von Clausewitz said that war is politics by violence. No one wants our government to do violence to the poor, we already do violence to our food simply by eating it, and ideas cannot be suppressed by violence. Look at the Second World war again, it was supposed to be against fascism, but how many fascists nations did the US and Europe support during the Cold War? WWII was against the Axis powers of Germany, Japan, Hungary, Romania, Finland and Italy. Four of which were not fascists at all! The war was against those nations, not the tactics they used, not the food they ate and not the political systems of their various governments… the war was against those states, period.

War against an idea, tactic or some other nebulous “enemy” is an absurd distraction from solving a real problem. It gives the people the idea something substantial is being done, but in fact what is really being done is, the liberty of the people is being stolen. The propaganda of a war against a non corporeal enemy is effective at reducing a country to despotism through the costs of continual warfare and a war mindset. It does nothing to solve the problem the elite are ostensibly waging war against, but through a constant chipping away it destroys the wherewithal of a people, saps our resolve to meet actual existential threats, and the lack of any possible victory corrodes our self esteem. War can only be fought against corporeal enemies that can be killed, maimed, impoverished and thereby forced to knuckle under. Further, to wage war against an enemy’s tactic, to avoid naming that enemy, is a sure way to loose the war with that enemy. It is time to complain loudly and forcefully whenever our leaders claim we should launch into another war against a non corporeal enemy and stop the ones our leaders have pulled us into already. Else our lot and the lot of our children will be despotism and poverty.

Sincerely,

John Pepin

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