The War on Prosperity

Posted on December 6, 2012 by john

Dear Friends,

It seems to me, Obama is prosecuting a war on prosperity, and it is going along much better than the war on terror. The assault on savers and people who do the right thing has reached a fevered pitch in his all out crusade. Not only savers but anyone who does the right thing, by traditional standards, is in the cross hairs of this administration. The upshot is that our economic outlook is diminished by the day while the power of government is enhanced. The continued attack on all virtue in America today, and around the World, should be at the front of everyone’s agenda, because it will lead to a lower standard of living for us and our children.

The war on savers is reaching it’s fourth year. In his campaign against virtue Obama has some powerful allies. The FED under Bernanke, has undertaken a plan to bankrupt anyone who saves for their retirement, by printing money at the fastest rate ever in US history. Every dollar the FED creates in it’s QE1, QE2, Twist and now QE3, (otherwise known in financial circles as, QE infinity), steals some of the value of every dollar in circulation. The incentives this creates are all pernicious. To save money today is foolish because the value is eroded daily by government intention.

As the fiscal cliff looms ever larger, we see that Obama is positioned to avoid all blame, no matter what. The unbiased media will dutifully point to republican recalcitrance despite their stabbing their own constituents in the back. The republicans are more than happy to attack Tea Party politicians but are totally unable to point out Obama’s failings. Apparently the leaders in that party are fully on board with the war on prosperity and will fall on their swords for it. We the American people have few allies and those we do have are being systematically marginalized by the republicans and democrats.

Now we are looking at a dividend tax increase. This further erodes the ability of Americans to save and prepare for retirement, as well as penalizes those who are retired, and have put sufficient money away for it. The ability of people to get some return on their saved dollars, is not only reduced to zero, the money itself is being stolen by the unending printing, reducing the real return to a negative. Those people who have gone without, so they could get a few dollars in the bank are the obvious victims, but there are far more victims than that.

As government’s policies create an environment where saving is discouraged… there will be less savings. This is obviously true. What the results of the policy to punish savers will be are not as obvious. When money is not saved in an economy the ability of companies to invest in plant and equipment is reduced. This is magnified by huge unending government deficits. Government deficit spending sops up the little capital that is available, especially as government gets the first crack at any money in the system, including investment from abroad. When money is not available for investment in productivity enhancing tools and equipment productivity in the economy will suffer. This will inevitably lead to lower wages for labor. Lower productivity leads to lower wages and lower competitiveness.

Not only are wages in an economy negatively effected the amount of labor required is also diminished. This is due to the fact that as productivity in an economy is lowered the ability of that economy to compete in the global marketplace is also diminished. Jobs move overseas and small businesses fail. The FED and Obama pretend this can be averted by lowering wages through the devaluation of money. The problem with this logic is that every nation on Earth is printing money at breakneck speed to keep up with America. This leads to a race to the bottom, lower wages world wide, and an attendant lowered standard of living for everyone on the planet, along with the very real threat of hyper inflation.

The class warfare rhetoric is the propaganda arm of Obama’s war on prosperity. Whenever a war is fought to win there is a propaganda campaign. Obama’s version of Goebbels is the entire democratic party. They speak in unison about the villainy of the rich. The irony that they are in fact the rich is totally lost on them. But the reality is, the war is not on the rich… it is on virtue. They would have to do violence against their own self interest, to make war on the rich, and psychopaths would never do that. The war is against prosperity and virtue… not the rich.

The spectacular increase in the food stamp program as well as the unheard of rise in Social Security disabilities are signs the campaign is succeeding. They show the magnitude of the war our government is waging on us. Those that work are being squeezed on all fronts. Our money is being taken right out from under our noses, our wages are being lowered even as we get raises, our job prospects are diminished by the results of the war on prosperity… and our children will have a much lower standard of living than we had.

Perhaps the best way to understand what is going on, is to listen to Obama’s hero, George Soros, (the guy on the other side of the teleprompter). It was Soros after all who said, “There must be a managed decline in the west.” The war on prosperity is the manifestation of that decline. The problem with decline is that once it starts it is very hard to stop. Sooner or later the managed decline becomes a full slide to oblivion. Then the full weight of government malfeasance will fall on the heads of our children… But in any war there are casualties.

Sincerely,

John Pepin

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Credit and Blame

Posted on December 3, 2012 by john

Dear Friends,

It seems to me, blame is the property of republicans and credit is the bailiwick of democrats, regardless of facts. A case in point, the democrats will never sign a deal with the republicans to avoid the fiscal cliff, unless the republicans are positioned to take all responsibility for the resultant economic disaster looming in the next few years. To put a finer point on this idea, Obama knows the republicans are terrified of blame, and so will turn on their values, constituents and our country, to avoid it. The unbiased media will dutifully carry the water and blame the republicans for any and all negative outcomes while crediting democrats with any small good economic news.

This paradigm is the history of American politics in the Twentieth Century. Historical examples would fill volumes. Woodrow Wilson escaped all blame for the disastrous economic policies he enacted that put the US into a deeper recession in 1920 than the one Obama inherited. It was only the enlightened policies of Warren Harding and Calvin Coolidge that created the economic conditions that led to the economic boom in the 1920’s. Herbert Hoover, the quintessential republican progressive, enacted typically Keynesian policies after the downturn of 1929. His policies were essentially exactly the same as Franklin Roosevelt, but Roosevelt was called a hero, despite the horrendous economy the US labored under during his entire term. Hoover was even blamed for the lack of rain during the Dust Bowl. Roosevelt was credited as a hero of the people despite his naked attacks on Our Constitution coupled with the poor economic performance of the country under his watch.

The unbiased media can be relied on, by the democrats and progressives, to do whatever is necessary to blame republicans and anyone who proposes a return to Constitutional rule. They leap to the defense of democrats and attack republicans at every turn. In the 1990’s Gingrich ran on a contract with America. It was called the contract ON America by the unbiased press. In it he pledged to balance the budget. For this he was called foolish. Clinton claimed it was impossible. When The republicans won the House of Representatives, for the first time since the Second World War, due to the contract with America, Gingrich enacted every segment of his plan. The result was vitriol piled on by the unbiased media… and a balanced budget. Gingrich was then driven from office and Clinton got the credit for Gingrich’s balanced budget.

Obama is doing everything in his power to drive the US off the fiscal cliff. The unbiased media ignore this fact and set up the republicans for blame if and when the talks fail. Obama has given the republicans a noose to put around their necks, by calling on them to declare what taxes they would raise, knowing they will happily hang themselves to get some credit. This sets up the republicans for the inevitable political backlash that will result from raising taxes, and the negative economic consequences, while Obama has taken all spending cuts off the table. Obama has no fear of receiving blame for anything that happens during his watch because it is the unbiased media’s job to ensure that political outcome.

Republicans are falling all over themselves to reach an agreement with the democrats because they know this too. They seek to avoid blame and garner some credit. They have given up on basic republican ideals like limited government, low taxes, and deficit reduction to try, futilely, to avoid blame. In doing so they guarantee blame will land at their doorstep. They are willing to stab their constituents in the back to get unbiased media praise. Praise that will never come their way. After this they will wring their hands why no one votes for them. Of course no one will vote for a political party that is willing to throw their constituents under the bus to garner favor with their political foes. This is why Romney had such a low turnout. He abandoned his base of 60%, of the US population, for the 10% of undecideds. He got the 10% and lost the 60%.

The upshot is that the republican party will either go the way of the Whigs, a new party rising to replace them, or they will stop seeking to avoid blame, embracing it and cater to their base. The pipe dream of an unbiased media, that gives a republican any credit for anything, is just that… political opium smoke. The future of the American experiment is at stake. The unbiased media have chosen sides, the political establishment has made their decision, it is only the American people who are left in the political wilderness. Our children’s future is put at risk by Obama’s policies, but blame is the bailiwick of republicans, and credit the territory of democrats, ensuring more of the same. To the detriment of everyone on the planet.

Sincerely,

John Pepin

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MF Global, BP and Corporate Malfeasance

Posted on November 29, 2012 by john

Dear Friends,

It seems to me, the concept of a whipping boy didn’t work in the Dark Ages, so I don’t understand why people think it would work today. When someone else is punished for one’s transgressions, the lesson learned is that bad actions won’t result in bad consequences. This seems logical when thought about for even a second. Then why is it, that when a manager in a corporation commits a crime, the shareholders are punished and the actual wrongdoer gets a raise? If we want our economy to grow faster, become more efficient, providing careers and high wages, this is an issue that must be addressed.

When punishment is considered for an infraction one thing that must be taken into account is preventing future wrongdoing. This should be one of the the paramount considerations. Preventing recurrence of criminality is the primary reason punishment is meted out. Why else penalize it? When punishment doesn’t stop wrongdoing, it cannot be said to be effective punishment, and if it creates an incentive to more crime, it is actually counter productive.

This brings us to an understanding of corporate punishment. When a business is reprimanded the punishment generally takes the form of a fine. If an executives steal from the pensions of the employees, the political backlash can result in criminal charges being drawn up against them, but more often than not, the executives escape all justice. This creates a situation where the wrongdoer is only punished tangentially by the backlash of the shareholders of the company. It is the principles, (owners), that are punished, but the agents, (management), who made the decision to violate the law, escape the consequences.

If the wrongdoing is not caught by regulatory officials, or worse there is regulatory capture, the resulting profit garners the criminal manager accolades and money. When a company makes such profits, it is always the case that the rewards go to management, and are not distributed to the shareholders. People are human beings, we all seek our good, often without regard for the good of others, this is called egoism. The executive who successfully engages in this type of behavior is the epitome of the egoist… as are the regulators that fail to punish him.

In a situation of poor corporate governance this inevitably makes a negative feedback loop. Bad behavior will not result in negative consequences but only positive ones for the wrong doer. The stockholder is the patsy. Take the example of BP and the Gulf oil spill. The fines are running into the billions of dollars. The shareholders have taken a bath in both falling dividend payments and stock values. They had no input as to how the company would extract oil, place drilling rigs or safety considerations. Their agents, the executives of BP, made those decisions. Yet it is the shareholders that are being punished.

This negative feedback loop, government’s policy creates, not only rewards the guilty at the expense of the innocent, but it actually creates a situation where more wrongdoing is encouraged. More and more we read about a company that has violated some law or another. Even the most egregious offenses like John Corzine and the MF Global fiasco are met with indifference by regulators. Corzine, being politically powerful, has escaped justice for stealing money from his client’s segregated accounts! The shareholders have been punished but had no hand in the thievery, the clients have been punished by loosing their savings, but the villain dances away with his ill gotten gains… free as a bird.

Until this situation is rectified, the problem of poor corporate governance will only grow, as it has over the past few decades. People see the game is rigged and will continue to pull away the investment that economies need to grow. There must be a paradigm shift in the way government’s deal with companies that violate the law. The answer is, of course, to punish the actual wrongdoers… criminally. It isn’t rocket science after all. To reward bad behavior always results in more bad behavior. Punishing an innocent bystander is patently counter productive but punishing wrong doing creates an incentive not to do it.

The main sticking point to a real change, however, is the fact that most governments around the World, engage in crony capitalism. The US is as egregious in this as most… look at GM, GE and Solyndra. Those that have wealth and power, as do those who make millions as an employee of a company they had no hand in starting, have accordant political power. They have the money to contribute to campaigns, they wield the power of the corporations they are supposed to run for the shareholders, they have the ability to hire lobbyists to keep the gravy train rolling, and they have proven themselves to be egoists capable of extreme malfeasance. Politicians are eager to look like honest men, but as Thrasymachus said, they only seek to appear honest while being secretly dishonest. Politicians happily slop at the trough of corporate largess, and corporate big wigs at the trough of government. So, we finally get to the crux of the problem, political corruption. The answer to that is a NUMA. But that is another blog…

Sincerely,

John Pepin

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Egyptian Oppression and Morsi’s Rule by Fiat

Posted on November 26, 2012 by john

Dear Friends,

It seems to me, no one should be surprised that the Islamofascist who now oppresses Egypt, Mohamed Morsi, would decree himself above the Law. Such shenanigans have been the currency of tyrants the World over and throughout time. Dictators and presidents for life have always considered themselves above the law, come to think of it… all Elite have that opinion. Look at the Elite in Europe and the US. They pass laws that apply to everyone but them. They hold themselves to no standards whatsoever. The Elite the World over consider themselves above any Law they write or precedes them. Morsi is just another tin pot dictator cut from the same cloth. I shudder to think of the violence, oppression and poverty, Morsi will visit on Egypt. But then again, it was Saint Agustin who said, people get the government they deserve. This adage is never more true then when the people themselves have elected a tyrant, instead of a President… both in Egypt and the US.

Mohamed Morsi is an islamofascist and makes no bones about it. His speeches are laced with anti Christian, anti Jewish and anti western rhetoric. He himself has called for the destruction of Israel, and his religious leader, for the extermination of the Jews, and Jerusalem as the capital of their World wide Caliphate. His rhetoric is uniformly anti democratic. The reality is that Morsi would be only too happy to deliver the Jews into another holocaust. Someone who is as extreme as Mohamed Morsi can be expected to usurp power every chance he gets.

Egypt’s Muslim Brotherhood led government was elected in a free and fair election. That election delivered the Egyptian people into the hands of the group that spawned Al Queda, Hammas, Hezbollah and every terrorist organization in the twentieth century. This is a crowd that are evil incarnate. They openly seek World domination. Imagine if a capitalist regime sought World domination in their chartering documents and speeches? The unbiased media would be wall to wall coverage about the power hungry capitalists. The media feeding frenzy would never end until those people were driven from power and jailed.

The treatment the Islamofascists get is far different however. Obama gave up on a Middle East summit to keep weapons of mass destruction, (WMD), out of the Middle East. He capitulated because the evil men that run that part of the World are determined to get WMD. They see Nuclear weapons as their means to World domination. A very few electro-magnetic- pulse weapons could easily overturn the World’s power structure. Sure, billions would die in the ensuing wars and famines, but the World could then fall under the total arbitrary power of a Caliph. The results of Obama’s miscalculation in the Middle East will inevitably lead to human tragedy.

What would have been surprising is if Morsi had been a President instead of dictator. That would have upended the normal paradigm of Middle East politics however. That outcome was as unlikely as space Aliens landing, and giving the governments around the World trillions of dollars, to maintain their welfare spending. To say that Morsi has no mercy would be an understatement. The crucifixions of Christians that took place, shortly after Morsi came to power, might have been a wake up call that this man is evil. But the unbiased world media remained silent, until it came out, then the Islam apologists called it a hoax! It was no hoax! Especially to those who suffered a slow, painful and unmerciful death.

Would they have remained silent if a Christian, Hindu, Buddhist, Shinto or a member of any other religion were crucifying protesters? Of course not. But then again, news is, by definition, something that is out of the ordinary. Since this is the case, a newly elected Islamofascist crucifying people, being normal for them, is not news. Those poor people, who live under the jackboot of an Islamofascist regime, have plenty of torture, hunger, oppression and lack of religious freedom, to look forward to. To expect anything good from the election of an Islamofascist, or a socialist, is just plain stupid. Apparently the Egyptian and the American people have that in common too.

Sincerely,

John Pepin

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Meritocracy

Posted on November 22, 2012 by john

Dear Friends,

It seems to me, the best possible society to live in, would be a meritocracy. Such a system would have no idle hands. The people that implemented it would soon be the richest nation on the planet, due to the efficient use of labor and production, this type of system creates. People would vote with their feet, flocking there from around the World, to participate in the prosperity and freedom a meritocracy would necessarily produce. If you agree when you have finished this page, that meritocracy is the best societal system, bar none, then meritocracy should be your goal for every government program and societal initiative. To do anything less would be to do violence to our own self interests.

Meritocracy refers to a system that is organized by the merit of the people that make it up. Those with the most merit get the best jobs. Everything is distributed by merit. Meritocracy is not however the system that Aristotle would have said it was. His vision of the meritorious man was far different from our definition. Our definition is; Merit is the just ownership of something. If a person picks up a stick. Then takes out a knife and whittles a flute. The flute is that persons property because they merit that item. The source of their merit is the labor they expended fabricating the item.

The free market is a form of meritocracy. Unfortunately, modern society has so broadened the definition of free market, the term has no real reference to the fact anymore. What I mean by free market is, a lasses fair economic system that forbids any form of monopoly, crony capitalism, oligopoly, price fixing and has strong incentives against negative externalities, with rewards for positive externalities. These bans would be accompanied with real teeth to back them up, a NUMA, else the Elite will bypass their own rules and enrich themselves at the cost to the country, as has been done so often.

The other systems of organization that have been dreamed up, have stumbled along, or failed outright. The feudal system was one. Being aristocratic in nature it stifled innovation by anyone but the aristocrat. Such a system seeks distributive justice by aristocratic fiat. The Sovereign owned everything… even the bodies and labor of others. The feudal system stumbled along in Europe for hundreds of years, but eventually gave way to the free market, and now, the free market has given way to the welfare state, or simply put, capitalistic socialism. This new incarnation of “free market,” is bankrupting the whole of Europe and the US, but that is another blog…

Socialism, or distributive justice by political favor, is another system dreamed up by men to control men, pretending to be compassionate. It is a system that necessarily contains negative incentives. Many things have been tried to contain these negative incentives but they have all failed. This is because, in the absence of personal self interest as a motivating factor, the only thing left is fear. Stalin’s chicken was how he motivated people, and has always been the fall back of socialists, everywhere and every time. Fear is, of course, an unhuman hearted method of marshaling human beings. Not only is fear unhuman hearted it is inefficient. People seek the easiest path from the fear and seek mediocrity as the means. Stand out, whether for good or bad, and you are executed… eventually.

So we see that it is meritocracy, and the free market that is it’s natural outgrowth, that is the best system ever devised. If you think about it, it was God himself who devised it… aren’t environmental incentives all merit based? Take Darwin’s theory, if an organism is unsuccessful, it is quickly replaced by an organism more able to compete… Meritocracy mimics Maya. It is then self evident that we seek to make society as meritorious as possible. It follows then, that if we do, our economy will rebound, our societal ills will diminish and our angst with the state of affairs will ebb away. What do you suppose your government could do… to make your country more of a meritocracy?

Sincerely,

John Pepin

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Why Republicans and Romney Lost the Last Election

Posted on November 19, 2012 by john

Dear Friends,

It seems to me, the reason the republicans have lost in the last few elections, is as simple as it is obvious. The powers that be in the republican party, the Elite, will steadfastly refuse to see the obvious as they have election after election. The Elite in the republican party today have the same macro viewpoint as the democrats. The difference between them is so slight you can’t fit a newly printed dollar bill between them. The base of the republican party is far more libertarian, and at the same time more conservative, than the republican Elite are. This creates a tension within the party. The Elite in the republican party jealously guard their power and prestige against all comers. The reality that there is no difference, between the republican Elite and the democrats, is not lost on the American people. When confronted with a democrat, and a democrat, the people will reliably choose the democrat every time. This has critical importance to the American republic, and the standard of living not only in the US, but the World over.

The republican Elite are universally progressive. They agree with the progressive democrats all the time. They disagree with the conservative democrats as much as they disagree with their own base. They feel they can run a bloated, overly bureaucratic system, better than the democrats, and they have the hubris to believe, they know better than everyone else about everything else… like I said before, they are progressives with an R after their name instead of a D. As such they look only in a certain direction. That direction is not based on truth or reality it is based on politics and perspective. That is why they cannot see the obvious so often.

The republican base is far more libertarian, in that the people that make it up, who are independent minded and self reliant people. They have the mindset, it is from the people that all innovation and good comes, and that government, more often than not, is the font of evil. Ron Reagan said as much and won in a landslide… twice. History bears the libertarian viewpoint out. The republican base is more interested in limiting the role and scope of government than the republican Elite. The base is also far more conservative than the Elite.

Take the issue of abortion. The base is much more agreeable to limits on abortion, than the republican Elite, who are universally pro abortion. They only claim to be pro life during the campaign season. Even the most libertarian of the republican base believe that partial birth abortion is evil and wrong. The only way a reasonable person could be for this procedure is ignorance of what it entails. The upshot is… the base is far less trusting of arbitrary power than the Elite are. Obviously, since it is the Elite who wield that arbitrary power, and the people who are the subjects of it.

Everyone who is a member of the Elite is loathe to give up the power, money and prestige, that comes along with it. It is the nature of human beings to enjoy power over others. Adam Smith said that a man would rather order a slave than negotiate with a free man for his free labor. It is in our nature. One of the beauties of the capitalist system is that it mitigates this negative aspect of our nature. No one dislikes money. We all lust after more of it. Whether it is for power, to buy serenity, to purchase the luxuries in life or just as a hedge against life’s exigencies, money is something we all desire to some degree. Do you know anyone who doesn’t like praise? Is there one among us, who doesn’t revel in being waited on, and have his or her boots licked? It is self evident that the Elite are loathe to give up their status.

And so it is clear that the republican elite are incapable of recognizing the facts right in front of them. They disagree with their base and so they must go. The Elite cannot understand that the people who elect them would actually be so unselfcentered, they would believe in the sanctity of life, the Elite are incredulous that their base actually wants limited government, the whole concept is alien to an egoist. The Elite seek the opposite of what their very voters want and they shake their heads that they cannot get elected. In the last debate Romney went after the 1% who were undecided, and in doing so put off the 70% of the population that makes up his base, while Obama energized his base. Some were so off put they voted for Obama. After all, if there is no difference, why vote for the democrat wanna be when there is a bona fide democrat in the race? Obama went after his base and got them to vote, and Romney turned off his base, so they didn’t come out to vote. It is no more difficult to understand than that.

Romney had no problem attacking, Herman Cain, Newt Gingrich, Fred Thompson, and any other conservative that stood in his way, but gave Obama deference, as had McCain. Romney spared Obama the negative ads he pelted Santorum with, further proving the point. The republican Elite despise their base, even to the point of abandoning Tea party republicans and even undermining their campaigns. While the democrat Elite, who also loathe their base, are better at pretending they don’t.

Don’t expect the republican Elite to wake up though. They have already rolled over for the democrats, they share the same goal after all, it is only the path to it they disagree on. The republican Elite are only too happy to compromise in the destruction of the American Constitution, as well as the death of our economy and culture. They agree with the democrat progressives more than they disagree… guaranteeing their eventual extinction. The only question left is; will they take our society with them?

Sincerely,

John Pepin

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Impulsive vs Considerate Society, Which is best?

Posted on November 15, 2012 by john

Dear Friends,

It seems to me, we are all well aware of our immediate good, our stomachs growl when we are hungry, we sweat when we are warm, shiver at cold and we feel our immediate desires. From this immediate want for good we have varying degrees of ability to put off immediate good for long term gratification. Some of us think only of the hour’s pleasures, while others dwell on good, or bad, years in the future. This variability in the nature of Men, is both a strength and a weakness, as are all attributes of humanity. With this understanding, if we consider what is the best average, or put another way, what is the best mean, for a functional society, and is it the same to get positive economic results?

In societies where people have only immediate gratification on their minds we expect to see a high crime rate. This seems to be the case. People who are incarcerated have higher rates of impulsiveness than people who have never been. In the case of a society that has no savers, the banking system cannot function, because capital cannot be amassed, to improve the means of production or create new production. Call this a 0 society. But impulsiveness is not all bad…

People who have long time horizons for good tend to be savers. They save for the rainy day or their retirement. Such people are necessary for an economy to function. People who have long time horizons must necessarially forgo immediate gratification for long term gratification. They do not drink from the font of what’s new and dazzling. They don’t feed the market economy’s need for innovation. This would stunt market capitalism’s growth since it is based on creative destruction. Let’s call this society a 10.

From this we can surmise that the mean should be between the two extremes. A functioning society needs impulsive people, and considerate people, else the economic model of capitalism doesn’t work well. Where, within the parameters we have set for our thought experiment, should we set the meter, for the most effective point at which society should aim? Let’s consider further…

Take a society that has a few impulsive people but most are savers. This society would be an 8. Innovation won’t see the enthusiastic acceptance that it would in a more impulsive society, but there will be far more money available, for improvements in the means of production and new businesses. Perhaps this would lead to a lower economic growth rate, once this society reaches parity with it’s economic competitors, but the means to reach that parity will be more at hand in such a society.

A society that is made up of many impulsive people and a few considerate people will wallow in ills and troubles, and would be a number 2 on our scale. While they will lust for whatever is new and fascinating, their society will have a horrible crime rate, teenage pregnancy will be rife, marital affairs will be commonplace and the poison ivy of the legal system will be well nourished. Moreover the nature of impulsiveness itself will render them blind to the source of their societal afflictions.

Their use of the vote will suffer as a result too. The many spenders will seek government to subsidize their extravagant lifestyle. Why pay for food for your children when the new I Pad is out? The politician who offers more for less will get the vote. Lies, coverups and incompetence will be forgiven and quickly forgotten, unless the unbiased media keep a scandal alive. This society will suffer, both from poor economic performance, and from the weight of the people’s impulsive behavior. Such a society will misuse the democratic process, to take from the savers and redistribute it to the spenders, maybe even taking it secretly by printing money. Someone has to fund the impulsive profligacy.

It seems clear, that our set point for the best mean, for society’s good time horizon, is more to the considerate than the impulsive. Perhaps, on our scale, 5-7 might be an ideal, for both societal ordering and economic growth. Those poor people who live in impulsive societies… They are lost and yet don’t have the sense to know it.

Sincerely,

John Pepin

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Energy Revolution

Posted on November 12, 2012 by john

Dear Friends,

It seems to me, there is a new technology coming online, that will revolutionize energy and food production, and dramatically change the political equation between the oil producing countries and the rest of the World. That revolutionary technology is… methane used to produce gasoline or diesel fuels. I was listening to the radio the other day, and they mentioned that there is a company starting up, that will implement this technology on an industrial scale. The basics have been done. It has been proven on an experimental scale and the profit margin should be steep, given today’s cost of energy. The potential of this technology to improve the lot of Man is stupendous, and our lives may be far better than we ever thought possible, if this actually pans out.

I have been pondering this myself for some time. That is how synthetic lubricating oil is made after all. If it can be done industrially, to produce a heavy hydrocarbon, it can be used to produce a lighter one. This is self evident, the sticking point in my mind was, at what cost? According to the article I heard, they estimate that refining synthetic gasoline and diesel from methane will be cheaper, than refining it from crude oil! Of course gasoline and diesel refined from methane will have no heavy metals, no sulfur, and no other extraneous pollutants to damage our land and waterways, it will be almost pure hydrogen and carbon.

This cost savings is extremely significant. The input stock for this process, methane, otherwise known as natural gas, is at an all time low in price. The drillers have stopped drilling for natural gas due to the low return on the dollar because of it’s deflated price. The supply of natural gas on the market is increasing faster than demand however. When people drill for oil they often hit natural gas. That gas is then sold on the market, or the well is sealed for later sale. This combines with the huge stockpiles of natural gas, that hydro fracking has opened up, to drive down the price of natural gas.

If the refining price is lower as well, this implies that the overall cost will be far lower for high grade gasolene and diesel produced from methane than for low grade fuels made from crude oil. Since the feed stock for this new process, natural gas, is plentiful in North America, the implementation of this technology would make the US and Canada, energy independent. That energy independence would come with coincidental goods as well. You could say… positive externalities…

The World political and economic paradigm would be upended in favor of the US and Canada. As the price of oil dropped due to lower demand there would be a incidental shift in the distribution of the World’s resources. The Middle Eastern countries would get far less of the World’s capital to spend on war and oppression, the air would be taken from the nuclear programs of terrorist sponsoring nations, the economies of Europe, Russia, China and India would dramatically improve from the overall lower cost of energy and the entirety of the Third World would experience the possibility of a dramatic increase in their standard of living as well. The entire World would see an economic boom.

Farm land, that is now in production to produce corn for ethanol, would be returned to food production. The positive impact would be slightly muted because, the mash that is left over from ethanol production is a source of high protein feed for animals, like beef cattle and pigs. The land need not be put back into corn production. This highly arable land could produce almost anything the World’s population hungers for. Lower cost of food for the starving people would be another positive externality.

The phenomenal amount of labor that would be needed to produce and man the infrastructure, to be energy self sufficient via this method, would lower the unemployment rate in North America while driving up demand for products around the World. There would be demand for labor to build the infrastructure, manage the infrastructure, as well as deliver all the goods necessary and the final product. The implementation of this break through would dramatically improve the economic growth of the World in general but especially the US and Canada.

Lest anyone be concerned about running out of natural gas, it is a proven scientific fact that there is over 100 times as much natural gas off shore North America, in the form of Methane hydrates, than there is on land. This equation is magnified around the rest of the World. There are thousands of years of, off shore natural gas deposits, in our oceans.

As I said in the beginning of this article, there is a new technology coming online that will revolutionize energy production, food production and dramatically change the political equation between the oil producing countries and the rest of the World, but, this is only if our elected leaders don’t get in the way. They stood aside and let the internet revolutionize information. If they step aside and let this new technology revolutionize energy, it will improve the lot of Mankind forever.

I am not of the opinion, however, that this bunch will allow that to happen. Look at the knee jerk banning of hydro fracking, popping up around the US in progressive controlled States, it is only the first step in regulating this technology away. I hope and pray I am wrong, but, I think this technology will be aborted by regulation. Abortion being a sacrament of the progressives that run the show today. To the detriment of all Humanity… in more ways than one.

Sincerely,

John Pepin

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Dion

Posted on November 8, 2012 by john

Dear Friends,

It seems to me the story of Dion is pretty interesting. I’ll recount it as best I can from memory…

In ancient times, when Greece was in full bloom, the island of Sicily had more than it’s share of political scandals. The government of Syracuse was the tyrant Dionysius. He oppressed the people, not only of Syracuse, but the whole of Sicily. His tyranny was well known throughout the Mediterranean World at the time. Dion was his sister’s husband… and Dionysius’ General.

Dionysius had a taste for philosophy and invited Plato to come and enjoy Dionysius’ lavish company. Plato came to visit and was immediately put into “protective” custody. Dionysius went to Plato and debated philosophy daily. They became fast friends. But Plato, always at the suffrage of Dionysius. As time went by, Plato fixed upon a scheme to escape back to Athens, and elude the clutches of Dionysius. In this he had the help of Dion.

Dion arranged for Plato’s flight to Athens, behind the back of his brother in law… Dionysius. Plato made his escape and got safely back to Athens. Dionysius was furious. He searched long and hard for the traitor who had helped Plato, his personal philosopher… escape. Finally, he happened upon information it was Dion, who had been the wheel man to Plato’s escape. He sent dudes to pick Dion up.

Dion, constantly wary that Dionysius would find out, discovered his arrest had been ordered. Given Dionysius’ penchant for torture and the death penalty the outcome was pretty obvious. Dion slipped out of Syracuse by night and made his way to another Sicilian town. I don’t remember which. He lobbied to get a few men to follow him. The leaders were afraid of the repercussions… were Dionysius to find out. On the other hand Dion was proposing the overthrow of Dionysius! It turned out to be too tempting and they threw in.

Dion slipped back into Syracuse with his men. They sneaked past guards and into Dionysius’ chambers. The small cabal jumped Dionysius. They captured him and his guards, then declared themselves masters of the city. The people were convened and consulted about what to do with the deposed tyrant Dionysius. The thing was put to a vote and Dionysius was banished from Sicily. He was sent to Italy to live out the rest of his life. Dion then arranged for free and fair elections to take place.

Dionysius’ other generals asked if they were to be ostracized as well. Dion, feeling merciful, plead their cause to the people. The people voted to allow the former generals of Dionysius to remain. And in fact participate in the upcoming elections.

Once the elections got underway the generals spread rumors about Dion… that he favored arbitrary rule, he was undependable. After all, they would say, didn’t he stab Dionysius in the back by helping that foreigner, Plato, escape his sovereign. Dion’s reputation was abused in every way.

Dion was of the opinion however, that the people would be smart enough to see through these obvious lies. After all, hadn’t he, Dion, deposed the tyrant? Hadn’t Dion put everything to be done, after Dionysius’ overthrow, to the popular vote? Even to the point of arguing for his very opponents in their trials!

The vote was taken. The generals won. They immediately brought back Dionysius from banishment and put him back on the throne. Dionysius took terrible revenge on the people who had voted to banish him. Their families were punished too. The people of Syracuse had voted themselves a far worse oppressor than they had labored under before. Dion was caught, tortured, and killed horribly. Blood flowed from the gates of Syracuse for a month.

The next time the people of Syracuse were delivered from Dionysius, through no virtuous action of their own, was when Timoleon smashed Dionysius’ army and established a democracy there. The people erected a statue to Timoleon. I don’t know if it is still there.

Take of it what you will. The thing I take from this story is… Not everyone is as lucky as the ancient Syracusians…

Sincerely,

John Pepin

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Socialism or Free Market, the Choice Will be Made Tuesday

Posted on November 5, 2012 by john

Dear Friends,

It seems to me, on Tuesday, the United States of America will be making a decision between two competing economic ideologies, socialism and, the traditional American way, free market capitalism. I say this because, once you boil off the campaign rhetoric, media spin, and personal likes and dislikes, this is what the choice sugars off to. Even as the modernizing world is moving away from the socialist model the US is tipping dangerously near the precipice of socialism. History shows anyone open to it, the results, the fruit, to put in William James Philosophical formula… of the socialist model. The acmes of every country that has gained prosperity in the last five hundred years, has done so using the free market capitalist model, but perhaps this time socialism won’t create human suffering… Probably will though.

The French revolution was the first notable example of the socialist ideal put into political practice. The barbarism of the French Revolution is partially the result of the socialist mindset. The socialist sees his or her fellow human beings as chattel for their whim. They, in their hubris, believe they stand above and astride humanity, twisting us to their tune. They set up regimented austere rules for us to follow while they themselves live as emperors. Even a cursory look at the French Revolution shows this to be the case. The modern examples, like, North Korea, Cuba, and Venezuela show this to be incontrovertible fact.

The economic results of socialism have been universally pathetic. There has not been a single time socialism has resulted in a rising standard of living. (An argument could be made about Nazi Germany, but if we look at the case more closely, we see it was Hitler’s refusal to pay WWI reparations among other things, not socialism, that led to Nazi Germany’s economic rebound under the socialist model). As I have iterated many times, the entire incentive system within the socialist model of economics, is pernicious and counter productive. It inevitably leads to diminishing returns. Add to this, that people are never as judicious, or as smart about taking risks, with someone else’s money, as they are their own. This, in and of itself, is sufficient reason for the socialist model to fail. More importantly however, why the socialist model is doomed at the outset, is, looked at, through the lens of distributive justice, it is distributive justice by political favor.

To believe that political favor is the best means to distributive justice is a valid point of view. (If you have no merit, the last thing you want distributive justice to be based on, is merit). There are no invalid points of view, as a person’s point of view is a intrinsic thing, thus not being subject to extrinsic nullification. If someone has this as their point of view, openly thought out, then they should state it aloud and for everyone to hear. Obama always couches it in rhetoric and double entendre. Make no mistake however, regardless of the rhetoric and obfuscation, Obama is a supporter of distributive justice by political favor. If you are, then he is your man, but if you are not, he certainly is not.

Every time free market capitalism has been implemented it has exceeded expectations. In fact, Marx himself went on and on, about the improvements in the productivity of labor that capitalism had brought about in his day! When Denmark liberalized it’s economic and political laws, (what today is called “trickle down” in the US), it saw a huge jump in wealth creation. They allowed Jews to come there from Spain where they had been recently ejected. They allowed corporate innovation that led to the Dutch East India Company. Their liberalizations directly led to the free market.

The examples of free market capitalism improving the lot of Man are too many to tick off. There are no examples of where socialism has ever led to anything but, death marches, killing fields, holocausts, politically enforced famines, war and perpetually lowering standard of living. The choice, it would seem, is obvious. To choose the path of failure, will lead to failure and to choose the path to success, will lead to success. William James philosophy of pragmatism looks at the results of philosophies, to garner their actual worth to humanity, by this metric, socialism falls far short of free market capitalism. The fly in the ointment is, Will Romney really be a free market capitalist, or will he lead as an oligarch? Obama is certainly a socialist, he has said as much many times, and proven it by his actions in office. Romney is probably a free market capitalist, at least he claims to be…. The one is known, to definitively answer the other, requires a vote. Lets pray the choice is made wisely. For the sake of the whole World.

Sincerely,

John Pepin

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