Thoughts Aloud

Archive for the ‘Economics’ Category

Today is Flag Day. I haven’t even turned the TV on today, so I have no idea whether any Americans are celebrating it. Increasingly these days, I don’t much care. Watching my country disintegrate all around me is depressing and there is a nagging component that keeps reminding me that the sheeple in this country are getting exactly what they deserve.

I always remember Flag Day because it is also the day I got out of the US Army 43 years ago. It is interesting that now I harbor some pride in my service; but at the time, 14 June 1966 was the happiest day of my life. Three years on a voluntary enlistment was more than enough to convince me that I wasn’t cut out to unquestioningly follow orders given by mental midgets. One sees old veterans decked out in their uniforms on patriotic occasions. All I kept was my field jacket. Perhaps it was the times; but Vietnam era veterans were seldom respected for our service, much less thanked for it. The esprit de corps was cool; they made a man out of me; and I did my duty; but I learned I preferred to give sensible orders to following foolish ones.

I now have a new reason to remember this supposedly patriotic day that is rather sad, when one contemplates it. I got up at 0230 this morning for a mission I generally steadfastly refuse. In my mind, everything from Ventura to San Diego is “LA.” To me, it is a vast urban wasteland sans intelligent life. I eschew all attempts to get me to travel south of Santa Barbara, but I agreed on this morning to take my partner to LAX to catch a plane bound for India. We are exploring a joint venture with an Indian company in the process of franchising Montessori schools there.

She is providing a Montessori Teacher Training Course for them this summer and will be gone at least two months and perhaps twice that. It is somewhat exciting to be able to assist folks seriously interested in a real education for their children, which is not just a government provided Marxist indoctrination. One would think that with California about to go bankrupt, they might reconsider their decision to add universal preschool to their budget, which is devastating the private preschool business here. It is also intriguing to notice that India is growing and modernizing, not crumbling and dying like America. After reading Thomas Friedman’s “The World is Flat” a few years ago, I have had a very different perspective of India.

Thus, I asked her to investigate and look seriously into the idea of emigrating to India to get the hell away from these Progressive fools, who are choking the life out of my country. I have lived in eight countries, and as patriotic as I am about my own, I am always amused by the American mindset that we live in the best place on earth. While I agree that the average American generally has a better lifestyle than the average citizen anywhere else, there is much to be said for being in the aristocracy of a third world country.

An educated entrepreneurial American living abroad has a much better lifestyle than is generally available here. The pinnacle of my life was my time in the Seychelles Islands at the age of 22, literally making more money than could be spent there. My five bedroom mansion on a 30 acre coconut plantation cost me $300 a month. Servants were $10 a month each, so I had five of them. The manager groveled every time I walked in the bank. They put “Esquire” after my name on my bank statements, because nobody could have that much money without a title. I was automatically invited to all the Governor’s diplomatic cocktail parties. The police tipped their hats and said, “Good Morning, Sir” as they stepped aside when I walked down the street. Life has been downhill every since.

I doubt that I will move to India, but the very idea that I am considering it at this age says a lot about my assessment of the prospects of the future of America. It is dim and growing dimmer by the day… and that is indeed sad. ◄Dave►

Forty-eight years later the message is more important than ever; but the GOP long ago abandoned defending capitalism, much less logic and reason. ◄Dave►

“Benefit spending soars to new high“:

The recession is driving the safety net of government benefits to a historic high, as one of every six dollars of Americans’ income is now coming in the form of a federal or state check or voucher.

Benefits, such as Social Security, food stamps, unemployment insurance and health care, accounted for 16.2% of personal income in the first quarter of 2009, the Bureau of Economic Analysis reports. That’s the highest percentage since the government began compiling records in 1929.

In all, government spending on benefits will top $2 trillion in 2009 — an average of $17,000 provided to each U.S. household, federal data show. Benefits rose at a 19% annual rate in the first quarter compared to the last three months of 2008.

I can remember when $17K in annual income put a family into the uppermost tier of the middle class. Then, back then $17K would purchase 485 ounces of gold – do the math.

The safety net is working, advocates say.

“We’re not seeing the hunger we saw in the 1930s because the food stamp program is doing what it’s supposed to do,” says Florida food stamp director Jennifer Lange.
…
• Food stamps. Enrollment hit a record 33.2 million people in March, up 5.2 million from last year. The stimulus law boosted the size of the benefit. Average March benefit: $114 per person.

That is 11% of our population on food stamps! What happens when price increases catch up with the obscene currency inflation and $114 won’t buy a loaf of bread? And $114 per loaf would be cheap by Weimar standards – it couldn’t buy a crumb in Zimbabwe.

Adam Lerrick, economist at the conservative American Enterprise Institute, says the benefits’ explosion will eventually lead to an economic crisis.

“We’ve seen this movie before in many countries. It always has the same ending,” he says.

Natch… one definition of insanity is repeating something that has already been tried and expecting a different result. ◄Dave►

I have been reflecting on of the Pravda article I posted a couple of days ago. I find that doing so makes me pine for the halcyon days of yore, when the burning issue was illegal aliens waving Mexican flags in our streets, in massive protests demanding their “rights.” The biggest problem we political junkies then had, was the incontinence our politicians were experiencing over threats by La Raza to deny them the Latino vote. Can it only be three years ago that we were kept busy calling and writing Washington to demand the Incumbrepublocrats close the border before even considering the amnesty bill that kept being resurrected like an immortal monster in a horror film?

The ignorance and complacency of our sheeple, and the unabashed support of the multiculturalists’ agenda by the MSM, seemed intolerable at the time. Yet nothing then could have prepared me for the reality so bluntly expressed in the Pravda piece. Particularly egregious to acknowledge, is the bitter truth in the closing paragraph:

The proud American will go down into his slavery without a fight, beating his chest and proclaiming to the world, how free he really is. The world will only snicker.

While it has been encouraging of late to see so many of my countrymen awaken, start to study history, and fall in love with the Constitution our founders bequeathed us; we simply don’t have the time that would be necessary to awaken enough of them, and organize ourselves into a viable alternative to the Progressive proclivities of the Incumbrepublocrats. By then, there won’t be anything left to save.

I think it is time to admit that correcting what ails our country cannot be accomplished through our traditional political process. It has gone too far, and the sheeple have been so mind numbed by the Progressive schools that the moochers and plunderers outnumber the producers. Somehow, we have been made to believe that the individual is subservient to the collective, that we live in a democracy instead of a republic, and that the majority has the right to impose their will upon a minority. Tax spenders have outnumbered taxpayers for years now, and their rapacious appetite for unearned “entitlements” and “benefits” has exceeded the taxpayers’ ability to fund them.

Thus, the politicians who pander to the whiners have been borrowing ever increasing sums for current programs, by promising that our future generations will repay them. It was not difficult to predict that sooner or later our kids would wake up, curse us, and refuse to pay our bills. Now, it seems the Piper has come earlier than anticipated; because we have exhausted our credit and the world is realizing that we owe more than our kids could ever repay, even if they wanted to. Alas, rather than take our medicine and reducing our insane level of spending, the politicians and bankers have begun hyperinflation of our currency. There is no turning back now, and as Pravda pointed out, our economic future will be the Weimar Republic at best, if not Zimbabwe.

That is a distinction with little difference; for the prospects of ever returning to Liberty, sound money, and the capitalist economic miracle that was once America, without a revolution to overthrow the Marxists, is the same – nil. It is past time to reset the Federal government and return to the model of our Founding Fathers, as enshrined in our original constitution. In that model, sovereign free individuals have no masters – neither potentates nor the mob rule tyranny of the majority of some amorphous “society.”

Accomplishing that can’t be done by “saving” or “revitalizing” the Republican Party, even if the Progressive “compassionate conservatives” and corporatists could be convinced to let go of it. They are all part of the problem, not the solution. What alternatives does that leave us? ◄Dave►

My world is truly upside down. In my youth, we used to laugh at the notion that Pravda was a legitimate news source. It was considered nothing more than the propaganda wing of the Communist Party in the USSR. By the ’90s we were calling CNN the “Clinton News Network,” because of their blatant bias and advocacy for Progressive causes. Of late, I have regarded MSNBC as the propaganda wing of the Democrat Party and have likened them to Pravda.

That is probably an egregious libel against the Pravda of today. One is far more likely to find honest and accurate reporting in Pravda than MSNBC. Try to imagine, if your head is capable of such irrational flights of fantasy, MSNBC publishing this piece from Pravda, “American capitalism gone with a whimper“:

It must be said, that like the breaking of a great dam, the American decent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people.

True, the situation has been well prepared on and off for the past century, especially the past twenty years. The initial testing grounds was conducted upon our Holy Russia and a bloody test it was. But we Russians would not just roll over and give up our freedoms and our souls, no matter how much money Wall Street poured into the fists of the Marxists.

Those lessons were taken and used to properly prepare the American populace for the surrender of their freedoms and souls, to the whims of their elites and betters.

First, the population was dumbed down through a politicized and substandard education system based on pop culture, rather then the classics. Americans know more about their favorite TV dramas then the drama in DC that directly affects their lives. They care more for their “right” to choke down a McDonalds burger or a BurgerKing burger than for their constitutional rights. Then they turn around and lecture us about our rights and about our “democracy”. Pride blind the foolish.

Then their faith in God was destroyed, until their churches, all tens of thousands of different “branches and denominations” were for the most part little more then Sunday circuses and their televangelists and top protestant mega preachers were more then happy to sell out their souls and flocks to be on the “winning” side of one pseudo Marxist politician or another. Their flocks may complain, but when explained that they would be on the “winning” side, their flocks were ever so quick to reject Christ in hopes for earthly power. Even our Holy Orthodox churches are scandalously liberalized in America.

The final collapse has come with the election of Barack Obama. His speed in the past three months has been truly impressive. His spending and money printing has been a record setting, not just in America’s short history but in the world. If this keeps up for more then another year, and there is no sign that it will not, America at best will resemble the Wiemar Republic and at worst Zimbabwe.

These past two weeks have been the most breath taking of all. First came the announcement of a planned redesign of the American Byzantine tax system, by the very thieves who used it to bankroll their thefts, loses and swindles of hundreds of billions of dollars. These make our Russian oligarchs look little more then ordinary street thugs, in comparison. Yes, the Americans have beat our own thieves in the shear volumes. Should we congratulate them?

These men, of course, are not an elected panel but made up of appointees picked from the very financial oligarchs and their henchmen who are now gorging themselves on trillions of American dollars, in one bailout after another. They are also usurping the rights, duties and powers of the American congress (parliament). Again, congress has put up little more then a whimper to their masters.

Then came Barack Obama’s command that GM’s (General Motor) president step down from leadership of his company. That is correct, dear reader, in the land of “pure” free markets, the American president now has the power, the self given power, to fire CEOs and we can assume other employees of private companies, at will. Come hither, go dither, the centurion commands his minions.

So it should be no surprise, that the American president has followed this up with a “bold” move of declaring that he and another group of unelected, chosen stooges will now redesign the entire automotive industry and will even be the guarantee of automobile policies. I am sure that if given the chance, they would happily try and redesign it for the whole of the world, too. Prime Minister Putin, less then two months ago, warned Obama and UK’s Blair, not to follow the path to Marxism, it only leads to disaster. Apparently, even though we suffered 70 years of this Western sponsored horror show, we know nothing, as foolish, drunken Russians, so let our “wise” Anglo-Saxon fools find out the folly of their own pride.

Again, the American public has taken this with barely a whimper…but a “freeman” whimper.

So, should it be any surprise to discover that the Democratically controlled Congress of America is working on passing a new regulation that would give the American Treasury department the power to set “fair” maximum salaries, evaluate performance and control how private companies give out pay raises and bonuses? Senator Barney Franks, a social pervert basking in his homosexuality (of course, amongst the modern, enlightened American societal norm, as well as that of the general West, homosexuality is not only not a looked down upon life choice, but is often praised as a virtue) and his Marxist enlightenment, has led this effort. He stresses that this only affects companies that receive government monies, but it is retroactive and taken to a logical extreme, this would include any company or industry that has ever received a tax break or incentive.

The Russian owners of American companies and industries should look thoughtfully at this and the option of closing their facilities down and fleeing the land of the Red as fast as possible. In other words, divest while there is still value left.

The proud American will go down into his slavery with out a fight, beating his chest and proclaiming to the world, how free he really is. The world will only snicker.

Stanislav Mishin

The article has been reprinted with the kind permission from the author and originally appears on his blog, Mat Rodina

Ouch! Does he nail it, or what? I went to his blog and found:

Thus, it is quite obvious that we, the Russian people are not, have never been, nor ever shall be, a part of the West.

Thank God – we are Russians!

We can well coexist with the West peacefully and profitably. We can even make friends with you, but please do neither lecture us, nor interfere with our affairs.

Fair enough!

As I said, my world is upside down. I spent most of my life despising the Russians and fearing a confrontation with them. Now, I would gladly trade half of my whimpering countrymen with them for an equal number of Stanislav Mishin’s. Alas, I get the distinct impression that he wouldn’t take a Green Card if we offered him one. I can’t say as I blame him… and that is the most profound insight of this mornings trip around the world. America is not what it once was, and the prognosis for it ever recovering from the insidious slide into Marxism is not good. ◄Dave►

This is the chart Glenn mentioned on-air this morning, which is part of the American Thinker article, “Barack Obama and the Strategy of Manufactured Crisis” by James Simpson published eight months ago today. It is one of the links I referenced in my “Obamacoup” post. He said Bill O’Reilly will be on his show tonight to discuss ACORN, which they have been discussing quite a bit off-air lately. He is begging a legitimate investigative journalist to go for the Pulitzer Prize that is waiting for anyone breaking this story wide open, who can’t be dismissed as partisan kooks as he or Bill will be. Tonight’s Glenn Beck show should be interesting. ◄Dave►

Glenn Beck has been poking at ACORN of late. On this morning’s radio program, he is finally getting around to the truth about the genesis and purpose of the organization, which I reported on back on March 8th at: “The Obamacoup.” He says he is going to get into “The Cloward-Piven Strategy” on his TV program tonight. Now, if he can get O’Reilly interested in it we might actually wake a few people up to what this nonsense is all about. If you haven’t read the linked articles in my Obamacoup post, I highly recommend them. ◄Dave►

There is an interesting comparison between the conditions leading to the hyperinflation in the Weimar Republic and those we are currently experiencing, by Ellen Brown in “The Weimar Hyperinflation? Could it Happen Again?:

Some worried commentators are predicting a massive hyperinflation of the sort suffered by Weimar Germany in 1923, when a wheelbarrow full of paper money could barely buy a loaf of bread. An April 29 editorial in the San Francisco Examiner warned:

“With an unprecedented deficit that’s approaching $2 trillion, [the President’s 2010] budget proposal is a surefire prescription for hyperinflation. So every senator and representative who votes for this monster $3.6 trillion budget will be endorsing a spending spree that could very well turn America into the next Weimar Republic.”1

In an investment newsletter called Money Morning on April 9, Martin Hutchinson pointed to disturbing parallels between current government monetary policy and Weimar Germany’s, when 50% of government spending was being funded by seigniorage – merely printing money.2 However, there is something puzzling in his data. He indicates that the British government is already funding more of its budget by seigniorage than Weimar Germany did at the height of its massive hyperinflation; yet the pound is still holding its own, under circumstances said to have caused the complete destruction of the German mark. Something else must have been responsible for the mark’s collapse besides mere money-printing to meet the government’s budget, but what? And are we threatened by the same risk today? Let’s take a closer look at the data.

Brown goes on to make a case that it was short selling currency speculators who destroyed the German Mark, not seigniorage. She suggests that massive government inflation of the money supply need not cause price increases if the money is spent into existence for productive efforts like infrastructure projects, instead of being loaned into existence by bankers; and it can be kept within the borders isolated from the currency speculators. She cites early American Congressional regulated money and Lincoln’s financing of the civil war. I am not sure I agree with her premise; but it seems to be a moot point for several reasons.

Obama is a tool of the bankers, not an adversary of them. Besides, the last two Presidents to try to go around them, Lincoln and Kennedy, ended with abbreviated careers and much speculation that crossing the bankers was responsible for their demise.

Moreover, our currency is still the world’s reserve currency, and the speculators will always have access to it. Besides, the international speculators perform a valuable service. Fiat currencies can in fact be inflated or deflated without much notice within the borders of a country initially. It is the job of the speculators to keep track of such things and create a value for value international exchange rate in a global marketplace. This drives the governments / central banks to distraction over the way it thwarts their devious seigniorage; and that is a good thing.

The only reason we are not already in a currency crisis, is that we are the world’s reserve currency and other nations are inflating theirs too. It won’t stay that way, and sooner or later, the world will give up on our lack of discipline and abandon the dollar. When that happens, it will be all over. The dollar is already worthless, and the only reason anyone will take one in exchange for their labor, goods, or services, is their expectation that they will be able to turn around and exchange it for their own needs.

The moment there is the slightest fear that one cannot get a “dollar’s worth” of what they need spending FRN’s, nobody will want them and they will become very expensive toilet paper. There is not much point in dreaming otherwise. Gold is still massively undervalued. Think about it. ◄Dave►

Am I humor challenged, or something? I don’t find this funny at all:

Waxman himself acknowledges that he is not familiar with everything in the bill… Well, why the hell are you voting on it then, Congressman? The Texan didn’t impress me either. This is not a joke, it is a massive tax increase. These clowns are mocking us for being critical of the fact that they didn’t read the Stimulus bill a couple of months ago before signing it. Folks, we need to stop voting for incumbents, no matter which party they are in. We need a whole new bunch of Congress-critters. This lot has forgotten who their boss is. ◄Dave►