Pragmatism

Posted on May 13, 2010 by john

Dear Friends,

It seems to me that most people are pragmatists. We have to be. To lack pragmatism is to ensure future insanity. Because when you live in an insane world you must either be pragmatic about it or go crazy.

Since most people are pragmatic we seek to get along in the world with as little interference as possible. As Thrasymachus said. Most people do not want to impose on others. But they are afraid of being imposed upon. That is why most people like the idea of justice… So by his measure most people are good. There are others who are bad. (I.e. They want to impose their will on others).

We are pragmatic in many ways. We add up the costs and benefits to most things we engage in. This is a form of pragmatism. We sometimes don’t fight the good fight because we have determined that it would result in diminishing returns.

To be the avatar of pragmatism one would have to be immune to all the pitfalls that await all of us. Like the sunk cost effect, group think, etc… We all vary in our pragmatism. (Or maybe we vary in our assessment of the cost benefit to a certain action).

Pragmatism breeds happiness. People who are pragmatic give up their anger quickly. They are less prone to hopelessness. These are the antithesis to pragmatism. Because to be angry has a very high cost both in health and relationships. The payoff is not as distinct. So pragmatism says, stop that which give us diminishing returns. To be angry for too long has such diminishing returns that the pragmatist eschews it. Hopelessness is the same. To be hopeless has great cost with no benefit. So why do it?

But pragmatism has costs as well. For example, take a good person living among those who are bad. Machiavelli says that a good man must necessarily come to ruin among so many that are bad. To be pragmatic in such a situation is to become bad enough to fit in. Mencius talked about this very thing.

Mencius said that the “Jen” man (gentleman, lord, Brahman, enlightened man, etc…) strikes the golden mean. When the jen man lives among many that are bad he doesn’t go to the extreme of bad. He seeks the middle ground in that bad land. When the jen man finds himself living among saints, again he looks to the mean of the society that he lives in. Mencius said that Mo Ti would run himself into the ground to help anyone. While Sang Yang wouldn’t pull a loose thread from his cloak although it save humanity. They went too far, claimed Mencius. Aristotle was curiously similar in his philosophy of the mean.

Pragmatic people do the same. Seek the mean in the society they live in. Pragmatic people look at their leaders today (and historically), and see people who make law to benefit their friends, making tax law and don’t pay taxes, regulating banks to make bad loans to people they know cannot pay back the loans then blaming the banks for the failures, have illegal aliens for maids, nannies, gardeners to save money but claim to be hard on illegal immigration, To name a very few examples. A pragmatists may not like what he or she sees. We may not want to emulate the behavior. But pragmatism, Machiavelli, Mencius, and Aristotle all say in unison, “follow the mean.” when the rulers are this corrupt society must be corrupt. Like virtue, corruption flows down from the leaders to the led.

Unfortunately the culture that we find ourselves in is a wretched as it can be. Corruption is endemic in the Elite in government, industry, entertainment and in society. They have been so corrupt for so long it has moved deeply into our society. Political corruption oozes out of government and onto everything government touches. Like a child, the grubbier the hands, the more they want to touch. They even have the gall to call evil good and good evil. Simply by changing the language, abortion becomes choice, freedom of religion becomes separation of church and state, freedom of speech is now too much information, the list goes on and on. I am sure you can think of quite a few I have left out… if you try.

This all adds up to an insane society.

How does this apply to the International Capitalist Party? Pragmatism is the cornerstone of our philosophy. Pragmatic in our view of humanity, pragmatic in our opinions about how to best effect positive change in the human condition, but, not pragmatic in our goal. To be pragmatic about a political goal is, not to fall into the status quo, it is to set a new status quo. Progressives, communists and socialists are pragmatic in their goal, total government, but not in their assessments of people… Unless most people do want to live under a tyranny, in poverty, with no voice or ability to change the situation…

Posted in philosophy, Societal Myth | Tagged , , , , , , , , , , , , , , , , , | Leave a comment

The Three Attributes to Being Human

Posted on May 6, 2010 by john

Dear Friends,

It seems to me, that there are three parts to a human being, Physical, Mental and Spiritual. These three attributes make up a human being. A brute animal, as far as we know, has no spirituality. A brute animal has physical and mental attributes though. So we can say that one of the things that differentiates humans from animals is human spirituality.

We all know on some level that when one part is ignored it becomes wasted. Lack of exercise makes muscles weak. Lack of mental exercise makes one dumb and a lack of religion makes a person susceptible to all sorts of negative ideas. Like moon worship or some other foolish idea. Out of the very human need for spirituality comes a worship of the created instead of the Creator.

These three attributes make up the person. Weakness in any lowering the sum total of the person. We all know someone who ignores one or more of these important attributes. And by this we see what the consequences are.

But as we have said above it is spirituality that separates human beings from the brute animals. So if that is the case we can also say that spirituality is, if not the most important of the three, at least no lesser then any of the others. If being human is the goal.

A person could theoretically evolve into a brain in a glass case. Only thinking great thoughts. But would this be a human end? Of course not. Another could devolve into a beast to rival the strength Hercules. But to regress to the beasts is not a human end either. What about spirituality? What if a person developed his or her spirituality to the point that they became a spirit. They would be an angel.

Which of the three outcomes seems to you to be the best for the actor? We can apply William James philosophy of pragmatism to glean the correct answer.

So why is it that spirituality is the most ignored? Our churches in many cases are full. We (Americans) have traditionally been a strongly religious people. But we seem to be moving the way of Europe. In Europe the most exquisite churches in the world are empty on Sunday morning. I wonder how many Europeans pray daily? I hope many but I fear there are few. Americans seem to be following the European example in more than just economics.

Part of the problem is that States have established State religions. Uniformly in the West the State religion is atheism. The Progressives in the USA have argued for generations, “separation of church and State.” They cannot abide the traditional, “freedom of religion.” Because if they can change the societal myth just enough they can legally codify atheism as the State religion.

Popular culture demeans Religion. Today it is popular, when asked, to claim to be spiritual but not religious. To say that is like saying “I eat… but not food.” It fails logically. But it sounds smart. All popular culture is, is foolishness that sounds smart… but if you think about it…

Of course the Communist Manifesto claims that religion is the opium of the people. Communists, and progressives more than socialists want people to revert to beasts. Beasts are easily herded, bridled and made into beasts of burden for their masters. Remove religion and you have removed that which separates us from the animals. Lowering us to the status of animal. What rights does a guinea pig have?

Probably the most insidious trouble that comes from lack of following an established religion is the threat of some mind bender like Jim Jones. The people who followed Jim Jones and drank the coolaid were people who disavowed established religion and followed a false prophet. There have been many false prophets and there will be many more. They seek to channel good intentions into bad actions. That is the surest way to spot a false prophet.

All these problems and potential problems as well as many more come from lack of religion. It is no more enlightened to be anti religious than it is enlightened to be anti science. Enlightenment involves looking at the world as it is… not as we want it to be.

Posted in philosophy, Societal Myth | Tagged , , , , , , , , , , , , | Leave a comment

Flawed Societal Myths

Posted on May 2, 2010 by john

Dear Friends,

It seems to me that there are no flawed people, there are only flawed societal myths, (philosophies or ethos).

Take any group of impoverished people. There is no deficiency in the people themselves. This has been proven by the fact that many impoverished people have been enriched when they change their philosophies. China for example. The people can be very industrious but languish under an unproductive ethos. Without a proper societal myth any people will falter.

The most destructive ethos a people can have is the mantle of victim hood. No matter the quality of the individual he or she is at a loss if their philosophy tells them that they are nothing but victims. It fosters inaction. Why act if you are only a victim? It fosters anger. Why be happy if you are a victim? It has absolutely no redeeming effects on a people but to make them slaves to their victim hood.

You can judge the ethos of a people by their prosperity. Not the people themselves but the ethos they live under. If they live under a negative ethos then they will live in poverty. Unless some external source of income temporarily disrupts the natural course of their lives. Like oil income for example. If a people cannot sustain themselves it is a sure sign that they labor under a societal myth that makes this so.

Look at the places people have flourished and the places people have floundered. The arctic is an extreme example. The Inuit and Eskimo people have thrived under the most inhospitable conditions the Planet has to offer. Temperature extremes and lack of easily accessible food. No shelter and high winds. Wind chills of over one hundred degrees below zero! No other people on Earth have, not only lived under such hostile conditions, but have thrived doing it!

Another example is Africa. The availability of growing season is unparalleled on the planet. Wild game, nuts and berries abound. There is no end to the opportunities in Africa for an enterprising people. But there is absolute poverty there… as well as no innovation. The problem is the ethos… not the people.

Examples abound of people that have risen in prosperity when they followed one societal myth but have fallen into poverty when the societal myth was destroyed. Rome is but the most obvious example. Ancient China is another example. Many times before and after the warring states period China went from prosperity to poverty then back to prosperity. Confucius explained this as, when people follow the philosophies of the sage kings, Yao, Shun and Yu. What Confucius basically said is that the philosophy of a people determines their prosperity.

So we can rest on the fact that if the same people have been both, impoverished and enriched, it is more dependent on their ethos then the people. To argue otherwise would require a advocate the likes of Daniel Webster.

Thomas Jefferson said in his book, Notes on the Sate of Virginia, that it takes a temperate climate it foster innovation. His argument went like this. If people have it too easy they will not innovate, it is redundant. If people have it too hard they do not have the time to innovate. They must spend every moment surviving. It is only where people have difficulties to force innovation and the time to think about and do innovation. If this is the case maybe innovation in societal myths is best at temperate climates as well.

Now lets examine the societal Myths that foster poverty and hopelessness. As we said before victim hood is one destructive philosophy. Another is decadency. It presaged the fall of every great civilization on Earth to date. Another is dependency of the State. Every time this has been tried it has resulted in the corrosion of societal cohesiveness. Another that has had bad ends is treating barbarians as equals. This has lowered many great civilizations. Groupism is a philosophy that results in the splintering of societies into angry factions. There are many more lessons that we can take from history about good and bad societal myths. The overriding point is that societal myths that reduce people’s reliance on themselves has always had bad results. While those philosophies that have greater reliance in individual actions have had good outcomes in the past.

With this as obvious as I can make it in such a small space, why is it so important for our elected leaders to change our societal myths from the productive ones to the unproductive ones?

Why do you think?

Posted in economy, Group Politics, philosophy, Societal Myth | Tagged , , , , , , , , , , , , | 1 Comment

Elections in the Netherlands

Posted on May 2, 2010 by john

Dear Friends,

It seems to me, that with elections coming up in the Netherlands in June, it would be wise for the people to look at all options. Libertarian ideas like the International Capitalist Party especially.

The socialists and communists call themselves center left and anyone else far right. With control of the media and mass entertainment the Elite has quite a lot of control of trends in thought. The Elite always use their power to enhance their power. They do not want any populist movement to get under way. Especially a movement that espouses liberty and freedom from government intrusion.

Government intrusion is what socialists, communists and progressives do best. They intrude into yours and my lives. They look deeply into our ways of living and if they are displeased… They pass a law. Forbidding or taxing to penalize to stop our displeasing behavior.

I am not surprised that anyone in Europe who wants to install some sane control on immigration is vilified as a hater. They must hate or else they would let unlimited immigration. This is only an underhanded way of stopping debate. Debate over a very important subject.

Like the guy who cajoles another guy into putting a gun in his mouth and pulling the trigger. “Go ahead, we have all done it, you want to fit in don’t you? There is only a one in six chance the gun will go off. Go ahead, it will be the thrill of your life.” Yea, go ahead. Does that seem smart to you? Where is the upside to the bet? There is none. The payoff is proof that you are stupid or the bill is death. Where is the payoff?

With Greece poised to collapse financially, the Euro Dollar is poised to take a large hit, then the entire Euro zone’s economies are imperiled. The default of Greece would certainly bring one of the other piigs nations into the spotlight. The pattern has already shown itself in the collapse of Bear Stearns… If They fall like dominos the Euro Dollar as a store of value will be destroyed. At least for awhile. This puts every nation that participates in the Euro Dollar in a perilous position.

More loans to Greece are completely absurd. Raising taxes is almost as foolish. The only way is to cut spending by the Greek government. Cut in a draconian way. Draco was Athenian so…

Another way the Greek government could get the economy going is to, clean up the government, reduce regulation on small business, improve revenue streams to people who want to start small companies, sell national utilities, etc… In short, everything the Greek government cannot do with the large communist and socialist contingent it is burdened with.

Raising taxes slows the economy and puts the Greek economy in a further diminished position. In the world markets but especially the local European markets. The Greek relative advantage will go down worsening the unemployment situation.

But unfortunately the people of the Netherlands have had their horses tied to not only to the Greek wagon, but to Spain‘s, Italy‘s, Ireland’s and Portugal’s as well. Further integration into the Euro zone should be thought out very well and taken very slowly. The crisis we have been discussing is a very bright red flag.

National sovereignty is important for the fact that it gives a multitude of political classrooms to show what works and what doesn’t. Communists, socialists and progressives cannot abide the system they espouse standing up against a capitalist one. The standard of living in the capitalist one outshines the statist vision by orders of magnitude. Let alone the standard of freedom that capitalist nations afford their people.

Freedom is a critical step in a person climbing to his or her potential. Missing rungs in the ladder are only a challenge. No ladder at all is insurmountable.

Posted in Uncategorized | Tagged , , | Leave a comment

Europe and the New World Order

Posted on May 2, 2010 by john

Dear Friends,

It seems to me that Europe is in grave peril. The threat comes from many fronts. Not the least of which is their economic situation.

While the rest of the world is coming out of the recession Europe trails behind. Germany and France are doing most of the heavy lifting but they cannot sustain the social welfare loads of the whole of Europe. The communists and socialists that run Europe will not stand for any diminishments. (Of their power).

Social welfare spending is directly correlated with the power of the State. State power rises as social welfare spending rises. Because as people move from self sufficiency to government dependence they loose their autonomy to make decisions effecting the State. As I have stated many times, in many ways, a dependant has no effective voice. Dependants necessarily take what they are given.

But being a dependant of the State has no upside. There is no long term payoff. Except more dependency. The threat of hunger is always at the door if the State stops providing. There is no way to move up in the social hierarchy. And people who are dependant on the State feel low class. This opens society for many of the ills it has today.

Like crime. When a person has his or her ego damaged they lash out. Making a person a dependant on the State is a slap, followed by spittle, in their face. Regardless of the intentions of the person handing out the largess. Insults are never taken well… even when they are unintended… or are they?

The social welfare state that the European socialists have built is crushing their economies. The weight is a millstone around their necks. The European recovery is thus dragged down by the weight of government taxing and spending.

Germany and France make up for this loss in productivity by subsidizing investment in the means of production. But as in all government subsidies the lion’s share goes to large well established companies at cost to smaller more innovative companies. Hewing the smaller trees to let the big ones grow bigger. But eventually all trees die. With no small trees what will fill the canopy?

Government taxation sops up available capital that could be better used to improve productivity. There are many ways to improve productivity but government has only one avenue.

Open up transportation infrastructure. The mass transit system in Europe is a girdling root. It locks the European economy into the train schedule. This may seem on the outside to be a minor nuisance but it’s effects are pernicious.

If a business can work most efficiently at a schedule that does no coincide with the train it must put it’s workers at a disadvantage to get to work or it must work in a time frame that is not as efficient. In a global marketplace that company is now at a disadvantage to other companies in other nations that are not hamstrung by mass transit schedules.

It is a feature of people who live close together that they are willing to give up more of their liberties to protect themselves from other people. Some cities have ordinances against owning dogs. Some dogs bark incessantly and infringe on the rights of adjacent people. They argue that dogs are a nuisance and cannot be tolerated in such close quarters. Etc…

This is acceptable on a local level because conditions may make such an ordinance acceptable to the people in that locality. But when people from this locality become the national government they will bring their anti dog prejudice to the national stage. The rest of the country may love and revere dogs. But the Elite will none the less ban them. In doing so feel that they are doing a great service to the nation. This local prejudice on a national stage has the effect of creating more friction for the economy to push against.

Europe suffers under this type of pressure as well. The people who run the national governments are from the large metropolitan areas. They have the mindset of people who are used to living in close quarters. This mindset is displayed in their actions in the various parliaments and houses by their tight grip on control.

These are only a few of the burdens that Europe is suffering from. Europeans should read the history of the ancient Egyptians and the Hyksos… It may be enlightening.

Posted in Uncategorized | Leave a comment

Wall Street Bonuses

Posted on May 2, 2010 by john

Dear Friends,

It seems to me that one of the ways a person gets rich in government, is to create a problem, announce that there is a problem, then claim it is only government that can solve the problem.

The big investment banks have announced their earnings. They have earned enough so that, when Goldman Sachs pays it’s employees 43% of the quarterly earnings, it will amount to around $500,000.00. So we can extrapolate that if $500,000.00 is 43% of each employee’s total value to the company, in that quarter, they produced $1,162,790.00, in that quarter. That is a lot of production.

“They have a printing press in their basement and all they do all day is coin money”- from Bloomberg radio, referring to Goldman Sachs. But whenever a company produces so much profit it’s a red flag. To produce this much profit with so few employees the environment the company exists in must be tempered by government. Or it is a monopoly.

If a company is not a monopoly it cannot charge monopoly prices. Unless there is some strain on the market’s ability to provide the good or in this case service. Because without constraint on supply, from somewhere, others would jump into the market and undercut the monopoly profit forcing the older companies to lower their profit margins to compete. If there were “perfect competition” in that market companies would post very little profit.

The way companies like Goldman Sachs and Morgan Stanly keep competition, especially perfect competition, from lowering their profit margins, is to pay lawmakers to pass laws that limit entry into their markets. Cutting the small trees so the big trees can grow bigger. The bigger the trees the more shade for lawmakers.

Now our lawmakers are rattling their swords over the huge bonus’s that Investment Banks are paying their employees. The government will not stand for it! The rhetoric from ours and other governments borders on vitriol. But one thing we have stressed in our blogs and bbs posts is that it is foolish to look at what a politician says. It is always a lie. Look at the politician’s actions. They show the reality of the who the politician is.

In this case what do we have for evidence… Well, if lawmakers were serious, the people in the crosshairs would certainly fund the opposition to get a better chance. But we see that the democrats have almost exclusively gotten Big investment bank money. In fact Obama refuses to give back the million of dirty money he got from Goldman.

What action do we see on the regulation front? Rhetoric. Nothing but empty words. The threatened regulation will put a clamp on big fat bonuses. But how? The only plan I have heard about is to tax big banks and investment houses at a sliding scale depending on the bonuses they hand out. But let’s think about it for a moment.

Would you argue that an auto mechanic should not get 43% of his production back as pay and benefits? How about a factory worker? In fact a contractor is lucky to make 10% on a laborer let alone 57%. If he did, communists, socialists and progressives would be saying the contractor was exploiting the worker. But the worker at an investment bank is not exploited when the bank he works for gets 57% of his production? Moreover, is it good public policy and right use of government power to determine the rate at which an employee of a private firm gets paid?

No, the real problem is that government coddles and protects the Wall Street Elites as members in the club. Remember the “Bailouts.” When government basically gives you money to loan, free, and you loan it dearly, a simpleton can make a profit like that. But what does it say about Government Elite and Wall Street Elite?

They are both complicit. They are two nuts from the same burr. Corruption in government and on Wall Street have joined to protect both by vilifying one while under the table government cannot give the Wall Street Elite enough money, special regulations and favorable business climate. Look at the actions… NOT their words. No one, intentionally, drops their toast on the ground butter side down…

Government creates the problem of not allowing the market, (in this case investment banking), elasticity to increase the supply of this type of service. Then market forces drive up the profits of the companies that government gives the franchise to. Government decries the bonuses (profits), thus tapping into public anger over the exorbitant profits of that industry. This allows government to fund the corruption, use the corruption to get elected, and get campaign funding from the corrupt actors… What a deal!

The best part, is that the argument for government keeping others out of Goldman Sachs markets, is that customers might get ripped off by shady characters…

Posted in Uncategorized | Tagged | Leave a comment

Addiction to Spending

Posted on May 2, 2010 by john

Dear Friends,

It seems to me that if a person has a problem with an addiction the best answer is not to open up the supply to his or her drug. A heroin addict for example. Is it in his best interests to have unlimited supply to heroin? Of course, it is true, that an unlimited free supply would alleviate the financial problems related to uncontrolled heroin use. But there are other negative results of unrestrained heroin use that would be exacerbated by unlimited access.

Lets take another example. A person who is addicted to gambling. Would it be in his or her best interests to give that person unlimited access to credit? Is it possible that unlimited access to credit could possibly not be in the person’s best interests?

If you had a friend who bought some foodstuff to extreme. Say… meat. They spent every penny on meat. So much so that almost all of it spoiled. They bought so much meat that they went into deep debt. You intervene and say, “stop buying so much meat, it is bankrupting you.” But they reply, “But I have to eat.” Then borrow money to buy more meat to replace the meat that has recently spoiled. Would you secure a loan for 60 billion dollars of credit? Would that really solve their problem? What if they promised not to buy so much meat. Would that make you feel secure enough to co sign a loan with them?

This is exactly what Greece is doing. Some government is necessary to prevent chaos. Or the perpetual state of warfare man versus man. But socialists, communists and progressives cannot see an end to the growth of government. When you try to argue that they have bought so much most is going bad they react as if you want to chose the doors of parliament. Striking and calling for the continued unlimited growth of government.

Communists and socialist have weekly general strikes. Shutting down society and lowering Greece’s GDP. They have no remorse about lowering the lot of the Greek citizen to advance their aims. The only thing that makes them toss at night is the thought of a baby escaping the abortionists knife.

In this instance does it make sense to cosign on a loan to Greece for $60 billion dollars? Does this really make sense to you? They have a problem with spending… not revenue. If their revenue is hurting they have only to look in the mirror to see the culprit. They have no one to blame but themselves for building such a burdensome State. A State so heavy that crushes the economy it rides on.

Giving Greece that money is no different than dropping atomic bombs on Greece. At least that would be quicker. Giving the heroin addict unlimited access to heroin will only kill him slowly and painfully.

But the European socialist States cannot allow Greece to fail. Greece’s failure would be their failure. Greece is on the same road the Elite in Europe and America have put us on. Greece is just one or two stops down the line. We will be there before you know it. When we do…

People will lament, ‘how could this possibly have happened?’ Ignoring the lessons of Greece, FDR’s America, and the Stagflation Jimmy Carter and the Democrats visited on the USA in the late 1970’s, etc…. Lessons unlearned must be taught again, and again and again… if necessary.

Nature is as unforgiving as she is predictable. Let go of a ball and it will fall. To lament that it does so is foolish and childish. Children stop and carry on when they stub their toe… then do it again the next time they pass that way. Adults say ‘ouch,’ note the danger, and move on.

Hopefully our enlightened economists and lawgivers will learn the lesson this time… But I am not hopeful.

Posted in Uncategorized | Tagged , | Leave a comment

Rational Maximisers

Posted on May 2, 2010 by john

Dear Friends,

It seems to me that most people are rational maximizes. But there are a few who are not. Zealots, tyrants (who and sociopaths) are not.

When we are dealing with an average person we are dealing with a rational maximizer. A rational maximizer is a person who rationally adds up the pros and cons of a given purchase, decision or action, and chooses according to the outcome of the equation…. Maximizing the benefit to him or herself. This is the way economists think of people.

Once we know we are dealing with a rational maximizer we know there are bridges they will not cross. We also know they seek to get the most from any transaction we have with them… Consciously or unconsciously. There is a pattern to their actions and decisions that we can have some comfort in. They are rational…

However when dealing with a person who is not a rational maximizer we are in a tenuous position. We have no reference points. They are capable of unthinkable actions… But is it their fault if we deal with them as rational maximizers… or is it ours?

Take for example North Korea. It is plain that Kim is a sociopath. All tyrants are sociopaths. It is a necessary attribute of being a tyrant. So when Clinton, Bush, or Obama deal with him as a rational maximizer they are being foolish. Kim doesn’t fear sanctions. Sanction only hurt the proletariat. They are expendable. Kim gets what he wants regardless of sanctions.

He now wields nuclear tipped missiles. He has nuclear bombs for his bombers. Regardless of all the sanctions and all the saber rattling. Today he is churning them out as fast as he can. He even has press releases about it.

So our leaders have dealt with a non rational maximizer like he was a rational maximizer. To their (and our) folly. Now a sociopath has atomic bombs to threaten the World with. That he is dieing is a hope. But look at Bashir of Syria. He was an ophthalmologist in Britain when his father and brother, (who was heir to the throne) died. Now Bashir is as much a tyrant as was his father. The machinery still works… even after the creator has died.

So even if Kim dies we are not out of the woods. His kid may be better or he may be worse. With atomic bombs in the mix we are in far more peril from the question.

Now take Iran. They are chugging away at getting the enriched uranium to build a bomb. The Elite in Iran are zealots. They have shown their true colors in the way they handled the riots after the rigged elections. The government even intimidated Iranian citizens outside the country by threatening their relatives inside the country.

Almost every day the Iranian Regime calls for the annihilation of Israel. The Iranian regime even claims it will wipe Israel from the map. In no uncertain words. There is no question about the threat, who it is aimed at, and who the victims will be. The explicit threat is at Israel, Europe and the US. The implicit threat is to Saudi Arabia, China, Russia and India. The victims will be everyone who needs to breath. Radioactive dust will fill the air. Imagine a nuclear exchange between Israel and Iran.

The crude weapons the Iranians would launch would produce a mighty cloud of radioactive isotopes. A cloud that would then rain down on everyone on the planet. What fun. Much of the worlds oil supply would be contaminated with radioactivity. Even if the oil in the ground remained untouched the fallout so close to the exchange would contaminate the wells and related hardware. Not to mention the gut wrenching loss of human life.

We know where the road ends. We know who we are dealing with…

Why is it that our leaders keep pretending they are dealing with rational optimizers?

Posted in Uncategorized | Tagged , | Leave a comment

Real Font of Economic Growth

Posted on May 2, 2010 by john

Dear Friends,

It seems to me that the real source of growth in any economy is the small startup company. These companies hire most of the workers in an economy. They drive most of the innovation and they reseed themselves.

Take a forest. When the trees are fully mature we say the forest is old growth. Most of the flora are extremely large trees overshadowing everything else. Unless some disturbance comes along to break up the canopy they will continue to dominate.

When large mature stands of trees flourish they do so at others expense. Old growth forest cannot sustain as much fauna as growing forest. They provide food only in certain seasons. There is necessarily less diversity in the flora. It is dominated by large mature trees. Beautiful to look at and majestic to behold but almost a desert.

Disturb the old growth however and you introduce a plethora of new flora and fauna. Diversity explodes. Fringe animals like deer move in. Everything from berries to apple trees can only exist in disturbed forests.

Lets apply this to the economy…

When government protects old mature companies it does so at cost to small entrepreneurial companies. Since old mature companies tend to have flat hiring curves they are poor generators of jobs. The jobs they do provide are usually well paid jobs. Being mature companies.

Here is one of the rubs. It is counter intuitive for government to allow well paid jobs in mature companies to churn into smaller less well paid jobs. But that “creative destruction” is what allows a fleet footed economy to thrive in any condition.

When the economic landscape is dominated by large mature companies there is little innovation. Less diversity in thought. But the beauty of small companies is that the decision making is spread out among many players. The more decision makers the better. As more people are brought into the decision making process, necessarily, people that would not be looked at if the demand for decision makers was so high will be chosen.

These people are the ones who usually come up with the grand slam ideas. Of course they also strike out much more than they hit homers. But that is another of the advantageous of distributed decision making. Risk is distributed as well. Too big to fail is never in the equation.

How can a nation apply this thought to their economy?

By starting at the top and cleaning government of corruption. Government corruption is the biggest source of friction to an economy there is. Every type of government corruption from simple graft in licensing to bribing Senators has a corrosive effect on an economy. For an economy to work efficiently people must have some level of trust in one another. Government corruption undermines that. See NUMA.

Every impediment to starting a business should be ironed out. Nothing should stand in the way of risk takers in starting a business. Impediments like licensing and regulation should be scrutinized carefully. Eliminated where they can be, without undue risk to public safety, and streamlined at the very least.

People should know about government’s attitude to business and starting one. Give the public an interest in business. Foster an appreciation for businesses in the people. If people see the government promoting business they will be more inclined to start one. If they have no interest they will be disinterested.

International trade should liberalized. Every economic study that has ever been done on the subject shows unambiguously, that increasing trade leads to increasing economic development. To continue to slow trade with tariffs and regulation is like tying your legs together and being outraged that someone else can run faster.

Don’t worry about international aid. Get people working on their own. No one needed international aid until it was invented. Everyone got along. Some better and some worse. But since the invention of international aid the countries that have taken it have seen their GDP per individual go down. Not a good sign that aid bears good fruit…

Protect property rights. The greater the protection of all property rights government provides the faster the economic growth. Why build wealth when some elite will take it if he becomes jealous?

There are many other ways a nation can build an entrepreneurial ethos in it’s people. They all involve lowering impediments to starting a business. There are many that I am far too dull to think of. You on the other hand…

Of course all poor countries do the exact opposite of these things. Of all things to do to drag down the economy it is of the utmost importance not to vilify business and especially small business. Fear in the people crushes entrepreneurial sprite like water quenches flame.

Posted in Uncategorized | Tagged , , | Leave a comment

Value Added Tax

Posted on May 2, 2010 by john

Dear Friends,

It seems to me this idea about instituting a value added tax in the US is insane. The economic recovery is shaky at best and may be faltering. To add more tax burden to the American citizen is a recipe for disaster.

2011 will amount to the biggest tax increase in history when the Bush tax cuts expire. The marginal tax rate for almost everyone will go up. Not to mention the taxes the new healthcare law will institute over the next five years. The tax burden of the American citizen will go up at an unprecedented rate.

While at the same time we productive citizens, who pays taxes, have seen our income go down. We have witnessed our ability to change jobs or simply get a job evaporate and we are poised to go into a huge inflationary cycle, (especially when it comes to energy). Raising taxes will only further denude us of the largess to fund any possible economic recovery.

Small business is the main driver of job growth anywhere. We see empirically that where there are road blocks to getting into business there is less economic growth. The more impediments to starting a business the higher the natural rate of unemployment, lower GDP growth and decreasing standards of living.

We have Greece as a model to conceptualize an economy where the people have become dependant on government. There is no real GDP growth in Greece. The only industry there is Government and some agriculture (that is subsidized by the State). Greece exports nothing. Greece builds nothing, it only taxes and spends. It is apparent that, using the Greek model, it is not feasible to tax and spend into wealth. Every nation every time it has been tried has failed.

The Roman empire was taken down by the dole. The dependant proletariat was the destruction of Rome. The Weimar Republic was crushed under the weight of runaway inflation caused by foolish monetary policy. The Soviet Union collapsed under the mass of spending without GDP growth to back it up. The list is endless. These are only a few of the strongest to succumb to the siren call of taxing and spending. But the Obama administration is determined to try it again.

One thing we can always count on is that politicians are liars. They lie like we breath. It is natural to them. Those that don’t quickly have to find other employment. People simply will not tolerate an honest politician.

So when politicians say, they want to create a new tax to offset some other, I know I am being lied to. To believe otherwise is to deny reality. Fantasy can be fun but is not very productive. Today politicians are claiming they want to create a new tax in the US to offset some other taxes. Knowing their nature only a fool or an accomplice would believe it.

The moral to the story is… Watch and see. History will have another fallen nation to add to the list of nations that have been caught in the trap of government spending. Maybe this time people will learn from history… but probably not.

I have never seen a science teacher apologize that I would be dashed against rocks if I stepped off a cliff. I have never seen a math teacher apologize that 6 divided by 2 equals 3. I have also never witnessed a shop teacher apologize that a spinning chain saw cannot be safely dragged across a person’s throat. But I have seen many economics teachers apologize about economic principles.

In a few hundred years people and economists will open their eyes. Maybe then they will see that it isn’t evil that if a person steps off a cliff they will fall. Or if they spend all their retirement of jelly beans they will be broke.

God holds both to their actions but Society lets the one be responsible… but not the other.

I am sure the administration feels it has more wisdom on the subject…

Posted in Uncategorized | Tagged , , | Leave a comment