Archive for the ‘Economics’ Category
The French term ‘laissez faire’ doesn’t just apply to economics. Literally, it translates to ‘let the people do as they wish,’ or a refusal to interfere in other people’s affairs. E.g. I take a laissez faire attitude toward other’s religious proclivities. As long as they don’t pester me about them, or try to get government to impose their dogma on others, what they believe and how they worship is their business, and none of mine.
It also makes a great synonym for the basic original meaning of anarchy – the absence of control by rulers of any sort, would be a laissez faire society. Since the term ‘anarchy’ has been corrupted in the minds of most, to now be synonymous with ‘chaos,’ perhaps I could find readers more willing to consider a government-free society, if I employed the French term, which is considered a positive attribute, by most who are at all familiar with it.
I have found there to be ample valid arguments, to counter all the trepidation usually expressed, by those arguing that at least a minimal government is required to maintain a civil society. Yet, unfortunately, as soon as the word anarchy comes up, most minds snap shut, as they envision ruthless brutes and gangs taking over their communities. The degree to which most sheeple are willing to forego Liberty, for the promise of a little security, is downright shameful.
If I thought that there was the slightest hope that the Federal government could ever again be downsized, and constrained by the intent of the original Constitution, I could live with that hope and work toward those ends. Alas, any rational person would have to agree that will never be. Thus, hereafter, when I use the term laissez faire, it will be my ‘dog whistle’ for expressing my blatant desire to completely abolish the Federal government in America, and replace it with nothing… i.e. anarchy. 🙂 ◄Dave►
Today, I venture to opine on a subject this has been over opined about by people far more qualified to offer opinions than yours truly.
Still, I will offer my own opinions with the hope that my use of simplification and common language might be more palatable than that typically used by the over educated.
In theory, a Free Market, operated in an environment of laissez-faire, is the best, most reliable and most equitable economic model available. So, how could such a system possibly fail? IMHO, partly due to its own accumulated success.
What could I possibly mean by such a silly statement? How can accumulated success lead to systematic failure? Simple, it does so when the economic model (the Free Market) attempts to operate in a vacuum. Said differently, when the economic model operates as if it alone is responsible for long term societal prosperity.
Secondly, this socioeconomic model fails when it is overburdened from without.
Thirdly, a state of “general prosperity” is anathema to those among us who, seemingly unable to control themselves, seek to control everyone else instead.
Still sounds a bit silly, does it not? Not to me.
In the case of the United States of America, a mostly free market economy (what I see as a “free enough” market economy) took a fledgling nation from a condition of national non-entity to super-power status so quickly that it gave us all a mild form of collective whiplash. It also gave us a level of general prosperity never before seen in the world and, by many, thought to be impossible to attain.
Then, almost suddenly, it all seems to be unraveling at the seams.
I have suggested 3 basic reasons for this:
→ Accumulated success
→ Overburdening from without
→ The desire to control acerbated by unbounded greed
Let us now discuss these individually, in simple terms and using common sense language:
In the lengthy comment section of the recent “Iowa Values” post, Chris has made some valid observations about some of my inconsistencies, which deserve a more fulsome response than there is room for there:
I completely understand your viewpoint is strictly based on your interpretation of the constitution as well as your own no doubt studious review of other relevant materials such as federalist papers et al. I’ll not begrudge you your opinion as I for a large part agree. Your even right that in the view as a constitutionalist if your view is correct SCOTUS can’t change that. One thing I am content with is letting the people decide if there is an issue. It appears Iowa doesn’t take your view. It’s possible that farther along the process the citizens of other states will see it more seriously. It’s out there. (I don’t see that happening.) In that case any of the candidates in question will be denied the nomination and the argument will be vindicated. If one of them does win the nomination the argument is defeated and therefore moot.
Well, I certainly am not content with letting the people decide if there is an issue with the Constitution. This is not a democracy. The will of the majority cannot change the meaning of the Constitution either. If folks consider a feature of the Constitution outdated and in need of revision, it has built in mechanisms for its Amendment. As designed, it simply cannot be changed by legislative statute, judicial fiat, executive action, or popular opinion. It means what it says, or it is entirely meaningless, and worth less than the parchment on which it was written.
The simple fact is that the majority of the sheeple in America are too ignorant of the very purpose of the Constitution in our Republic, to be trusted with interpreting the original intent of its 18th century verbiage. Their minds are too malleable by lawyerly disinformation, and susceptible to grandiose concepts like ‘Living Constitution.’ It would seem to me irreverent and rather foolhardy, to decide that since voters are inclined to ignore blatant violations of it, such transgressions don’t really matter.
We can’t seem to entice much interest in discussing more weighty matters beyond the Incumbrepublocrat kabuki dance; but I’ll try one more time. When I wrote my “Dark Ages II” essay nine years ago – around the time that some of us first met online – much of it was partially inspired by my recently having read Mark Steyn’s, “America Alone.”
He has just posted a thoughtful 10-year followup article on the subject, “It’s Still the Demography, Stupid,” which is well worth reading and pondering:
Ten years ago this month – January 2006 – The Wall Street Journal and The New Criterion published my first draft of what would become the thesis of my bestselling book, America Alone. The Journal headline sums it up: “It’s the Demography, Stupid.” Opening paragraph:
“Most people reading this have strong stomachs, so let me lay it out as baldly as I can: Much of what we loosely call the Western world will not survive this century, and much of it will effectively disappear within our lifetimes, including many if not most Western European countries. There’ll probably still be a geographical area on the map marked as Italy or the Netherlands–probably–just as in Istanbul there’s still a building called St. Sophia’s Cathedral. But it’s not a cathedral; it’s merely a designation for a piece of real estate. Likewise, Italy and the Netherlands will merely be designations for real estate. The challenge for those who reckon Western civilization is on balance better than the alternatives is to figure out a way to save at least some parts of the West.”
Hmm… it seems that I can’t nest quotes, so I will put the passages he is quoting in his recent article in italics. It is well worth going and reading the whole thing anyway. 🙂
In the comment section of Robert Ringer’s Post on Trump a couple days ago, one Charles Garret remarked:
You are right. This is going to be a wipe out with Trump. I am 85 and we understand Trump. We are fed up with what’s been going on in our government for the last 50 to 60 years.
This elicited a curious reply from an anonymous ‘Guest’:
Based on your name and age I think you will enjoy (or know) Garet Garrett, The People’s Pottage, available online to read for free.
Mildly intrigued, I did a search and found the book available as a free PDF download from one of my favorite sites, the Mises Institute. It was originally published back in 1953, and their blurb stated:
A time came when the only people who had ever been free began to ask: “What is freedom?”
Who wrote its articles — the strong or the weak? Was it an absolute good? Could there be such a thing as unconditional freedom, short of anarchy?
Given the answer to be “no,” then was freedom an eternal truth or a political formula?
The three essays brought together in this book, entitled respectively, The Revolution Was, Ex America, and Rise of Empire, were first published as separate monographs by The Caxton Printers. They were written in that order, but at different times, as the eventful film unrolled itself. They are mainly descriptive. They purport to tell what it was happened and how it happened, from a point of view in which there is no sickly pretense of neutralism. Why it happened is a further study and belongs to the philosophy of history, if there is such a thing; else to some meaning of experience, dire or saving, that has not yet been revealed.
“What is Freedom? … Could there be such a thing as unconditional freedom, short of anarchy?” Is this in my current mental wheelhouse, or what? 🙂
Well, well, well… Trump has issued a statement on Ryan’s budget deal:
(New York, NY) December 17, 2015 – “If anyone needed more evidence of why the American people are suffering at the hands of their own government, look no further than the budget deal announced by Speaker Ryan. In order to avoid a government shutdown, a cowardly threat from an incompetent President, the elected Republicans in Congress threw in the towel and showed absolutely no budget discipline.
The American people will have to absorb higher deficits, greater debt, less economic liberty and more corporate welfare. Congress cannot seem to help itself in bending to every whim of special interests. How can they face their constituents when they continue to burden our children and grandchildren with debts they will never be able to repay? Our government is failing us, so we must do something about it. Who knows how bad things will be when the next administration comes in and has to pick up the pieces?
The only special interest not being served by our government is the American people. It is time we imposed budget discipline by holding the line on spending, getting rid of waste, fraud and abuse, and by taking on our debt. To do these things, we need a President who can lead the fight to hold Congress and the rest of government accountable. Together, we can Make America Great Again.” – Donald J. Trump
I don’t know how anyone could describe the situation any clearer than that. Like Putin says, he is a smart guy… and I reckon he knows precisely what he is doing. Let’s see how well this gets reported, because it will go over very well indeed with the fed-up grass roots fiscal conservatives of either wing of the Incumbrepublocrat Party. ◄Dave►
I have long thought about prices, wages, and values in terms of gold, as in my post on Money. Trying to track down an article Troy suggested we read in a comment, I stumbled across a useful website, pricedingold.com, which has various financial charts plotted in grams of gold, rather than U.S. Dollars. This takes the currency inflation and manipulative volatility out of the picture, allowing real long-term values to emerge. It is remarkable how relatively stable prices remain when measured in gold, instead of a depreciating fiat currency. The site is a very useful resource. If one thinks in ounces, instead of grams, just multiply oz. by 31, or vice versa, to convert.
It prodded me to think again about how it is only wages that have not kept pace with the deliberate inflation, which the oligarchs (bankers and lawyers/politicians) use to steadily steal our wealth. I have thought of a couple more examples to add to my part time job in high school, which I offered in the Money post. When I was discharged from the Army in 1966, my final pay scale as an E-5 over 2 years of service, was $246 per month, plus room and board, full medical and dental coverage with zero co-pay, cheap discounted prices in the PX, 30 days of paid leave a year, the GI Bill for post-secondary education (usually college, but I used mine for a pilot’s license), and a very lucrative fully funded pension plan, if one wished to make a 20 year investment in an Army career. I was in a critical MOS, so they offered me E-7 stripes and an $8K reenlistment bonus, if I would re-up. Since a brand new car averaged $2,400, and a gallon of gas averaged 32 cents, that was a lot of money; but I knew I could do better in a civilian job, and took a pass.
Now, let’s convert those numbers into gold. At $35 an oz. at the time, setting aside all of the valuable benefits, my paltry pay scale was almost precisely 7 oz. of gold a month. At the current price of gold ($1,340) that is the equivalent of a monthly salary today of $9,380. Yet, an E-5 with two years of active duty today, is only paid $2,304; ten time what I earned in dollars, but nowhere near what I earned in gold. The $8K reenlistment bonus, would have bought 228.5 oz. of gold at the time, which equates to $306,286 today. I wonder how much they are offering these days? Yet the car at 68.5 oz. of gold, is not that far off from what one would have to pay for a full-sized full-featured American car today, when converted back to $92K at the current price of gold. Similarly, a gallon of gas at 32 cents, equates to 109 gal. per oz. of gold, which at today’s gold price would be over $12 per gal. So, the cost of producing automobiles and gasoline has actually gone down. If wages were keeping up with inflation, and everyone was making at least a lowly sergeant’s pay of $9k+ a month, perhaps we could all notice that. Then, perhaps folks would be appreciative of ‘Big Oil,’ for their efficiencies at reducing prices on a necessary commodity. 🙂
Read the rest of this entry »
I find myself weary of trying to awaken sheeple, to the perils facing our nation. Most don't want to hear it. I am bored with reading about and commenting on the latest outrageous corruption and scandals emanating from Sodom by the Potomac. They are now coming so 'fast and furious' that it is impossible to keep up with them in any depth anyway.
Yet, I find it impossible to just give up and let the
Pro Retrogressives win a total and final victory, which would bind our posterity in the ancient chains of serfdom, in the land our forefathers fought and died to keep free. I think we need a positive project to focus our energy on, which would at least attempt to save our country for our grandchildren.
It is they, the children, who are the future of America. Yet, presently they are ever increasingly and deliberately being dumbed down. They are indoctrinated in our public schools, to be ashamed of America's past, and view a Marxist utopia as its inevitable future. If we really want to save America, first and foremost this trend must be reversed. Read the rest of this entry »
I just stumbled across an incredibly lucid post, by the ‘Administrator’ of a blog I had never heard of called, “The Burning Platform,” which I look forward to perusing further. It is simply entitled, “Available,” and I would implore anyone with the slightest interest in (and ability to handle) the stark truth, regarding the condition and future of our economy, to read it. Although lengthy and chock full of facts, figures, and charts, it is easy reading, and anything but boring. The author (I couldn’t find his name) uses some quotes that are keepers, starting the article with:
“Facts do not cease to exist because they are ignored.” – Aldous Huxley
He then proceeds to offer them in abundance, during his sobering analysis. Along the way, he injects another keeper:
The mainstream corporate media that is dominated by six mega-corporations (Time Warner, Disney, Murdoch’s News Corporation, Comcast, Viacom, and Bertelsmann), has one purpose as described by the master of propaganda – Edward Bernays:
“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. …In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons…who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.”
More hard cold facts and cogent analysis follow, leading to his closing quote, by one of my favorite sages:
I haven't thought this through nearly enough, as it only just popped into my head while reading a comment to a post about reforming the Federal Income Tax, so I decided to blog it so we can kick the idea around a bit. It just might be an elegant solution to funding a properly limited Federal government. A basic truth is that taxes are often more about control than revenue. To encourage behavior, governments subsidize it; to discourage something, they tax it. Punitively taxing income and savings is counterproductive to a free market economy; if anything we should be taxing consumption. This is why I have long been an advocate of the Fair Tax; but even that is convoluted and messy in its implementation.
I would like to do away with the IRS, or at least its interface with individual citizens in any way. How much income we have, how we earn it, and how we choose to spend it, is none of the Federal government's business. What if we were to fund it entirely with excise taxes instead of income taxes? What if banks and all other financial institutions that provided banking services, were charged a small excise fee as a percentage of every transaction on the debit side of their ledger, and permit them to pass that cost on to their customers as a transaction fee? That way, depositing earnings and other income from whatever source would not be taxed. Only the act of withdrawing funds, one way or another, to spend them for whatever purpose, would be effectively taxed. No exceptions or deductions would be necessary or desired.
The United States of America has long been considered a Capitalist nation. That is to say, the primary nature of our national economy is (or was) based (to some degree) on Capitalism. OK – fine. But, in saying this, what are we actually saying (or implying)? To begin with, what is Capitalism?
The generalized classic definition, this one taken from Dictionary.com, says:
an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth.
We are also told that Capitalism means Free Markets and/or Free Enterprise and/or laissez-faire (which is a fancy way to say “free from government regulation or interference”). Whatever terminology you prefer, the operative words to remember are private and free. By implication, a Capitalist system can only flourish within a system of government that accommodates private property and freedom of individual action.
There is another, slightly different point of view, taken from CAPITALISM.org (which I prefer) and which says:
What is Capitalism?
a social system based on the principle of individual rights. Politically, it is the system of laissez-faire (freedom). Legally it is a system of objective laws (rule of law as opposed to rule of man). Economically, when such freedom is applied to the sphere of production its’ result is the free-market.
Historically, Capitalism has created more wealth for more people than any other economic system in human history. Indeed, it made the USA what it once was – and did so in a fraction of the time historically required for a nation/state to achieve greatness. Yet, despite all its positive attributes and demonstrated success, many people have been taught to hate the very notion of Capitalism. Why is that? The reasons are many and varied. Let us discuss just a few of the more significant:
This should be interesting. I have myself done a fair amount of research into the background of Obama's acknowledged mentor, Frank Marshall Davis, who he refers to just as “Frank” or “Pops” in his ghost-written autobiography, “Dreams From My Father.” Because he was a prolific author himself, I had already learned that he was a radical, unAmerican, subversive, card-carrying member of the Communist Party – a bi-sexual pedophile, a pornographer (including the now ubiquitous photos of Obama's naked mother), and all around miscreant.
After watching him address the National Press Club in the video below, which shows Dr. Paul Kengor to be a very mild-mannered college professor – not a partisan bomb thrower – I have just preordered his apparently well-researched biography, “The Communist.” It should automatically pop into my iPad's Kindle app this coming Tuesday, at which time my bank account will be debited only $12.99, tax-free. Isn't modern technology just amazing, and incredibly cheap? $13 is the equivalent of about 35¢ when I first started buying books, and my iPad would have cost less than $10 in real money back in the early '60s.
In a discussion below, there was a question regarding whether we should go back on the gold standard. We more or less already are on a gold standard, when it comes to international trade. First, let’s get some of our terms defined, to avoid sloppy thinking and miscommunication. Money, currency, note, dollar, $, ¢, wealth, and capital, are all distinctly different terms for very different concepts, yet people often conflate many of them in their minds and discourse.
- Money is a tangible, durable, commodity, used as a medium of exchange between traders, and/or a storehouse for wealth. It must have intrinsic value itself (desirable and useful for other purposes) to be real money, or a value for value exchange could not be completed. Any commodity could be used for money, and all manner of desirable things have been so employed over the ages. It just happens that gold and silver have always been popular, because of their utility, durability, and scarcity, which maintains a consistent high value on a small quantity of either.
- Currency is a token representing the concept of money, which is employed as a convenient interim medium of exchange, when completing the trade with actual money, is inconvenient or impossible. It has no intrinsic value itself; it is merely a slip of paper, ledger entry, or digital representation of the concept of money. Accepting currency in exchange for something of value, represents an unfinished exchange. Not until this interim currency is traded again, at some future time for something tangible, is the value for value exchange completed. A prudent seller only ever accepts as currency, tokens he is reasonably sure will be readily accepted by traders in the future, in exchange for something he deems of equal value, to complete the trade.
- Note is a legal term for an instrument of debt, such as a promissory note or an IOU. It is a promise to deliver a value at some (often indeterminate) future date. It can be used as currency, only to the extent that one is convinced that future traders will accept it in turn, in exchange for something of actual value. It is far riskier as currency, than is a ‘deposit certificate,’ guaranteeing immediate conversion to real money, to the bearer on demand, at the depository (bank).
- Dollar is a term for a unit of measurement, akin to cup, quart, gallon, etc. It is entirely correct to speak of a dollar of beans or a dollar of nails. When offered a number of dollars [or quarts] in exchange for a value, the proper response ought to be, “A dollar [or quart] of what?” In America, the quantity of wealth assigned to this measurement is established by Congress, in relation to gold or silver money. Originally, one U.S. Dollar was established as the equivalent of one ounce of silver or 1/20th of an ounce of gold. Thus, a dollar of donuts, is the quantity of donuts a baker would be willing to trade, for one ounce of silver money; but it would be entirely legitimate to offer to trade a dollar of rice for them.
- $ & ¢ are symbols that once represented a finite quantity of money; but they have devolved to now represent highly fluctuating quantities of fiat currency. $ represents one unit of Federal Reserve currency in circulation, and ¢ represents 1/100 of said unit. Due to the frequent devaluing of this currency, by the deliberate inflation of its quantity in circulation, any relationship these symbols have to current values or prices is highly transitory, and not to be depended on for future planning.
- Wealth is tangible evidence of past production and/or labor expended, beyond that necessary for immediate survival. Property and money are forms of wealth; currency is not. Debt-based currency is at best, a precarious claim on future wealth.
- Capital is previously produced wealth, available to be employed in the production of more wealth.
In many articles in this blog, we rightly bemoan the fact that we have far too many people in our society who take much while offering little or nothing in return. From most perspectives, this is an appropriate complaint because our liberty, to a very great extent, is little more than an extension of our free-market economy. As we drift toward the bottomless pit called “socialism”, this becomes ever more apparent because a top-down planned economy offers freedom only to the planners.
This is important because a free-market economy depends on a free exchange between two willing participants. Such a free-market economy cannot survive in an environment where some of the participants simply take with little or nothing offered in exchange. The obvious reason such an economy cannot survive is that the makers must cease to pump goods and services into the market if they do not receive the exchange of corresponding values that incents / allows them to continue or even increase their production.
So far, so good. But… to what point? Possibly to this point: what if we have reached that point where the combination of science and technology have raised human productivity to a level where we actually need more consumers than producers (that is, more takers than makers)?
(Dear readers, please forgive me if I seem to be supporting a point of view that the Obamanation recently used to try to justify his job-killing policies (ATMs replacing bank tellers) – I assure you I am not intentionally headed for the same conclusion – that being that anti-poverty programs becoming our largest “growth industry” is acceptable.)
This is insanity. The global economy is about to crash into a deep depression over all the phony liquidity held by financial institutions, and gold is dropping? There must be a lot of traders selling their gold to make margin calls. This is a golden opportunity for anyone who is still holding paper assets of any sort, to cash out of them and buy physical gold or silver. Take the hit on your 401Ks even, get out of paper – NOW! ◄Dave►
I enjoyed reading an “Exclusive Interview With Diapason’s Sean Corrigan” about the world economy, which I highly recommend for the insights provided. Then, near the end, his answer to the following question was so profound that I wanted to memorialize it here for future reference:
We here at Zero Hedge are labelled as fringe lunatics who thrive on bad news. We only take issue with this to the extent that the label allows “others” to dismiss us out of hand, while not debating us on the merits of our ideas and opinions. Central to our platform is the debunking of generally accepted conclusions of mainstream Wall Street Economist and Strategists. We do so, not only because it is sometimes fun, but because we want to encourage our readers and ourselves to think beyond what we are all being spoon fed. We are interested in what advice you would give a 25 year old graduating from University about the future. How should they think about money, how should they be investing, and what do you think their future will look like (10 year time horizon) in a developed nation? Would you give different advice to a 25 year old in an emerging nation?