Month: July 2011

First off, I liked this statement of basic, obvious ideas by Marco Rubio: http://www.theblaze.com/stories/marco-rubio-takes-on-hypocrisy-of-debt-rhetoric-and-john-kerry/ As he points out, in large measure we are having trouble now because in their two years controlling the White House and both Houses of Congress they did not see fit to create a budget. This more or less has enabled them to spend on pet projects without, I suspect, risking the public outcry over the details.

We know Obama is spending a LOT, and that he has added hundreds of thousands of bureaucrats to the Federal payroll in conditions of recession. That this would inevitably lead to deficits or large tax increases has been lost on no one. That is why even in conditions of having record amounts of cash business owners have not been investing it to create jobs. It’s unclear if America is even going to be a good place to do business anymore. The record cash is there not particularly because of record profits, but because of record uncertainty and doubt. We’ve never had a Leninist in the White House before. There’s really no way to gauge how much damage he can do.

One thing is clear, if this deficit spending continues unabated: our credit rating WILL be downgraded. This is not in doubt. This means we will have to pay higher interest rates to attract investors, which means more money will get vacuumed out of the pockets of the roughly half of Americans who are economically productive enough to pay taxes–new expenses, that were not present before, will be incurred. As I mentioned earlier, when the bureaucrats are running debt projections over the next ten years, they are assuming more or less constant conditions, and a debt downgrade will NECESSARILY mean higher expenses, and thus higher increases in the debt, meaning that whatever “cuts” are negotiated now will likely be more than balanced by off-setting, unprojected increases.

The Pencil: There is an episode of the Simpson’s where the network is broadcasting the CEO of the State lottery sharing the proceeds of the lottery with some school superintendant. After a tad bit of drama, as memory serves, the super is presented with a pencil. He’s taken aback, and starts sputtering, at which point the video feed is cut.

Folks, this is what we are going to get: a pencil. After several weeks of melodrama we are going to get–over the sound of Democrats screaming like little girls, and serious analgesic use by Republicans–something that is pathetically short of anything serious, much less of what is needed.

It seems likely tax cuts can be kept off the table (and by the way, when we see record low approval ratings for Obama, we need to keep in mind that his supporters can also desert him for not being sufficient to the left, which is plainly happening, so low ratings do not translate to a shoo-in for conservatives in 2012), but that the “cuts” will be largely symbolic, and that no matter how minute they are, that Republicans will be portrayed as big meanie-heads, who take pleasure in the idea of grandmothers eating dogfood, and dogs being relegated to scrounging outside the mansions of fat men in business suits with grease on their chins, going “ha ha ha, we are big and rich and we are making grandmothers eat dog food. We are so smart.” Cartoonish thinking for two dimensional minds: what other sort could there be?

What I want to propose though, is that nothing serious will be possible as long as we have flippant narcissists in Congress who benefit from being the grantors of manna to their unwashed inferiors. In the main, I intend thereby to connote Democrats, although of course I am no fan of RINO’s either.

We need to be content with what Boehner and McConnell can negotiate. We have a boy-child in the White House, with visions of sugarplum fairies dancing in his head, who has not the slightest notions of cause and effect, how the real world actually operates, or how much suffering will attend the medium term continuation of his policies. Given this, anything that does not raise taxes, or which cuts ANY spending, is going to have to do.

We are not in a crisis. We need to be clear about this. Clear eyed people are looking to a COMING crisis. If what you are doing is hurting you–if you are taking small doses of poison daily–then the first thing to do is stop doing it. This is clear enough. For now, we cannot stop doing it, but we are nowhere near a lethal dose. Europe is in much more serious trouble than we are, since they have been doing Obama-esque things much longer, and lack the opposition that, among other things, guns and religion guarantee.

Our task is education and message control. We need it to be shouted from the rooftops that you can’t borrow 40 cents on the dollar forever. This is self evident to anyone who has ever existed outside the sheltered nurseries of our universities, and the cynical calculations of professional politicians who benefit and provide benefit to a chosen few, at a cloaked harm to the many.

We need a conservative in the White House: Rick Perry, Michelle Bachman–even Tim Pawlenty would do for now–and a 60 seat majority in the Senate.

When our credit gets downgraded, there is simply no plausible person to blame but Obama, and the costs of that downgrade will be easy enough to show.

Net: be patient. I do feel our Congressional leaders are doing the best they can within the contraints of the lunatic atmosphere currently prevailing among the Democrats.

This was supposed to be a comment at the Wall Street Journal. It did not allow it through even after I deleted the Weezer lyrics. Who knows why?

In any event, since I typed it and can’t post it, here is a post related to this interview.

I’ve been reading economics a lot, and it has taught me to not just look at what did happen, but also for what did NOT happen, and why. Crime is equally an absence of lawfulness, as lawlessness is an absence of order.

Some years ago I was driving to Indianapolis in the winter when it occurred to me that while we can easily imagine degrees of evil, we cannot so easily imagine degrees of goodness. Evil, in the popular imagination, is more or less doing anything other than play fair, and becomes worse quantitatively: the more crimes you commit, the worse you are.

It is this fundamental lack that has made the serial killer a hero in many movies, like Hannibal and the Saw series. He (or she) is non-bourgeois, where normality is being stuck behaving in the a corner somewhere, treading an endlessly dull hamster wheel. Think Steve Buscemi at the end of Conair. Or, as Weezer put it:

I can’t work a job
Like any other slob,
Punchin’ in and punchin’ out and suckin’ up to Bob
Marryin’ a bitch,
Havin’ seven kids,
Givin’ up and growin’ old,
And hopin’ there’s a god.

In any event, this set off a long series of reflections on the nature of Goodness. How do you become “Gooder” and what is the advantage of this, relative to seeking power and sensations?

My short answer is that the stronger pleasure you feel in being alive, and in sharing in the joy of others, the “gooder” you are. Happiness can be exponential. It is a matter of luck, but living right enables you to buy a lot of lottery tickets, up to all of them. The end result of sharing Buddha’s tenet that all of our lives fall far short of what is possible–that life is suffering, in the popular translation–is to further it. I see no end to this path.

For those with an interest, I have published much of my thought here: http://www.goodnessmovement.com

I see few comments or emails. The most obvious explanation is that I have few readers who care enough about what I write to respond. This seems most likely. However, many things are possible on the internet, so I did want to mention that if you have ever emailed the address listed and received anything less than a prompt and suitably courteous reply, an alternative email is [email protected] . Someone is already spamming it, so the cat’s out of the bag anyway.

No matter what eventually passes–and obviously something will soon–it will not go close to far enough. The cuts we need to be discussing should be on the order of a trillion a year. Anything short of that simply isn’t serious, and whatever passes will be well short of that.

The can will get kicked down the road. This is inevitable. If we get a conservative President, and control of Congress, we might see something interesting, but no matter who wins in 2012, the American people will still be getting much of their news from organizations whose sole raison d’etre-outside of using the profits from Capitalism to implicitly and explicitly denigrate free markets–is to propagate disinformation. That we are even having a debate over whether or not we can borrow half the money we spend for the next several decades is farcical.

I just don’t see us EVER having the political will to do what is right. I hope I am wrong, but the stickiness of Medicare and Social Security was built in. Stupid selfish people become old stupid selfish people, and old stupid selfish people still vote. And they have more money.

At some point, we must, must, must grasp the predatory natures of the Federal Reserve and the fractional reserve system. What I have proposed in my series on our financial system really includes two parts. Doing away with the Federal Reserve is not original to me. It has been proposed many times by many people, with Ron Paul being the most articulate modern advocate of this.

What is original to me is using the Federal Reserve positively to eradicate our debt. The link to this proposal is at the end of this post. As I note in the series, this was done by the Germans after World War One. They ran the printing presses long enough to eliminate industrial and government debt, then stopped. Schacht revalued the mark, and poof, the inflation was gone. But it did them a LOT of good in the meantime. What it also did was hurt ordinary Germans, who did not understand what was being done to them. As Keynes said, not one person in a thousand understands the origins of inflation, or who benefits from it. The government and industrialists benefited hugely, though. My goal is to get the pluses and lose the minuses, or most of them. (

I am a conservative historian, so self evidently I grasp the difference between intention and outcome, but that does not mean daring is never warranted. One project I have set myself when I get time is to figure out how to test this proposal in miniature. I’ve been hoping the Europeans would try something like this, since they lead us in their collective finanical woes. Something like this will be needed for them, and ought in my view to result in returns to national currencies, where I have State currencies.)

What I am proposing is doing openly what the Germans did covertly, and in such a way as to harness the benefits and largely avoid the detriments. I am proposing we do in one week what the Germans did over 3 years. It is a large idea. It is an audacious idea. But it is an idea which has been tested in only a slightly different form, and which WORKED.

I am the only one I know of proposing anything remotely like this. Self evidently, this will only get traction in conditions of great difficulty, but it benefits EVERYONE except those who most benefit from the current situation. They obviously have a lot of money, but they are very small in number. These are the actual greedy parasites Marx condemned. They were never the “Capitalists” per se, who do in fact contribute much to society, and who increase our well being.

The link to my proposal–and thought process leading up to it–is here: http://www.goodnessmovement.com/Page14.html

I was a bit fatigued last night, so I cut that post short.

Question: why is it that Communists hate the bourgeoisie so much? Culturally, of course, they are presumed to be banal and uninteresting, to pretentious unemployed “thought esthetes” (my term for intellectuals).

Politically, though, the problem is that the bourgeoisie stand between them and their revolution. The way it is supposed to work is a very neat, tidy distinction between “us” and “them”, where for the sake of intellectual congruence, if not honesty, thought esthetes conflate their own interests with those of workers they neither understand nor respect.

The middle class, the “bourgeoisis”, sits in the middle. These damnable human beings make it much harder convincing “workers” that their best option lies with following silly people who read a lot of books into a violent and uncertain future, rather than with trying to join the class of the comfortable.

The naked fact which makes leftists squirm is that Capitalism works. By “work” I mean that the workers become middle class in conditions of growing wealth, which inevitably follows free markets, property rights, and political liberty. Our “workers”–pipe fitters, factory workers, welders–drive Ford F-150’s, have boats, and own homes. They are not being “exploited”. They are being enriched by the system.

The leaks in our system are twofold. First, socialists make everything worse by retarding business investment, which costs jobs, through punitive tax rates and abusive regulations. Second, the Federal Reserve sucks the value out of our money, and gives it to the already rich.

That the first should at times join the second, or vice versa, seems likely.

I was sitting in the lobby of a very nice, large corporation the other day, looking at the art they had chosen to showcase, which like so much of such art seems calculated to not offend, and to blend obnoxiously, if I might be permitted an apparent oxymoron. It almost seems like the intent is to connote taste, but not too much taste. Aesthetics by committee.

Be that as it may, I got to wondering about the provenance of this piece. It was likely painted by some artist who needed the money. That person somehow amassed enough money for paint, a canvas, brushes. He or she painted something, then found a buyer. This person was a Capitalist. That is all Capitalism is. If that person had hired two friends to paint with him, and managed the sales channel, so they had reliable markets, even more so.

Capitalism is nothing but getting money somehow, making something useful, and selling it. If it isn’t useful to someone, it won’t sell, so usefulness is built in.

I believe strongly that our global goal should be self employment–Capitalist status–for everyone.

There are many good Muslims out there: I can feel them. There are also many cruel ones, who derive great satisfaction from sadistic violence in the name of God. Such a God is indeed not great.

That Islam can be turned to Goodness was shown by the Sufis. If it is a Goodness which wants to be insular and left alone by the world–a partial Goodness–I am fine with that. As long as they leave me and mine alone, we can share this planet happily.

TError as a political tool has of course been used many times in history. If memory serves, it was the Chinese Qu regime that tried to destroy all learning not originating with their state, and which burned many scrolls and buried alive many scholars to accomplish this end.

In the modern world terror has been used most often and perfected by the creed which calls itself “Marxist-Leninism”. As I understand the matter, Islamic terrorism can credibly be claimed to have originated in the minds of Soviet-bloc agitators. There is nothing in the Koran to justify it, and for his part Mohammad is at pains to denounce violence between Muslims. If the House of Peace becomes a House of War, then the point of the religion vanishes.

As I see it, over the long haul the best way to curb Islamic extremism is to build and build empirical understandings of the nature of the afterlife. This is certainly possible, and in a rational culture would be the subject of tremendous and well funeded investigation. It does not fit the ideological bigotries of those who control the money, however, so it languishes.

That I am the only one I know of saying such a thing explicitly speaks volumes to the idiocy on this planet.

If you could reduce the sensation of freedom to a smell, what would it be? You need not pick only one: they can rotate. Hamburgers? Cold beer? A flower scented breeze? The smell of diaper powder?

What if you could physically create a substance that smelled different to different people, adapting itself to their happiest memories? That idea has potential for good and harm. No doubt someone has thought of it, so there should hopefully be no danger advancing it.

What I am getting at here is that freedom means different things for different people: they USE it in different ways. For some, it means being able to pick up and move whenever they want. For others, the ability to stand up in town halls. For some, being left alone.

How much would you pay to increase your freedom? How much would you pay to opt out of the “Social security” system? You know, lump sum now for not making payments down the road. How much would you pay to consume drugs legally that are now illegal? If your town decided to legalize prostitution, but the price was an added tax for some socially noble goal someone had, would you do it?

How much would you pay to be able to drive any speed you like, a sort of premium drivers club? How much would you pay to skirt zoning laws?

In many parts of the world, this is more or less how things work. The system is called official corruption, and the method is bribes.

Just throwing some ideas out. Need to do some cleaning.

Winston Churchill always called World War 2 the “unnecessary war”, for the obvious reason that Hitler announced his intentions early on, and acted on them–in flagrant violation of the Treaty of Versailles–not once, but repeatedly.

The Depression of the 1930’s was likewise unncessary. Leaving aside the willfulness of the economic crimes committed by the Federal Reserve–they plainly deserve the blame for starting it, and in some measure for continuing–FDR and Hoover manifestly pursued counter-productive policies. In conditions of price deflation and business stress, they insisted on fixed, nationally determined wages for those workers who could get jobs. In conditions of deflation, this amounted to forced wage increases, which of course saddles business owners with greatly added costs, which meant they either went out of business, laid people off, or simply refused to hire more. France has this problem today. Under existing laws, their chronic unemployment will NEVER ease.

Maybe the slogan of the Tea Party should be “Economics education NOW”: “What do we want? FACTS. When do we want them. NOW.”

I have not seen a responsible treatment of this anywhere, although I have been busy, so I may have missed it.

As things stand, the plan is to borrow something like 40 cents of every dollar we spend forever. There is literally no point, under any scenario under active contemplation, in which the amount of money the Federal Government spends is equal to the amount which it takes in in taxes.

As I understand the matter, you can go out 40 years, and the math still won’t work. To point out that this is unsustainable and stupid does not require any particular intelligence. Presumably that is why the naked facts of the matter are not made clear by most Democrat apologists. Even the Republicans are doing little but try to slow down the pace at which things get worse. The boulder is still rolling downhill, though.

Obviously, a balanced budget amendment would force this process to stop instantly, but we will need to cut our spending nearly in half. To do this, we are talking about massive cuts not only to entitlements, but Defense. And that is just to STOP BORROWING. That says nothing about the annual payments on our current debt, which amount to some $250-$400 billion a year. This is money taken by our government in taxes, and given to foreign investors and domestic banks. Put another way, it is wasted money, just like paying interest on credit cards. If we posit the number at $350 billion and our population at 350 million, which is about right, then we get EVERY AMERICAN paying about $1,000 a year just to pay interest. Since almost half of all Americans don’t pay income taxes, this means that most of us productive sorts pay $2,000 or more.

[On one point here I am unclear: if Quantitative Easing consists in buying Treasury bonds, where does the interest go? As I understand it, the Fed refunds all profits, AFTER ITS EMPLOYEES GET PAID. How much do they get paid? Excellent question. There is no way of knowing. We don’t get their financials. They just control the value of our money. It’s not like that affects anything, right?]

Now, the baseline increase in our debt is somewhere between $7 and $10 trillion. How much to “cut” from this is the debate now. But this assumes economic stability. Obamacare is going to force massive new cost increases to most American businesses (it won’t affect the places Nancy Pelosi likes to eat, get her hair done, and where she gets here botox injections), which will be very economically damaging. All American businesspeople know this, and are planning for it now, in part by delaying expansions they could otherwise afford, to see what happens politically.

But if we can’t get this monstrosity reversed, then the amount paid in taxes will go down, since that is what happens when the economy declines (self evidently, given fixed tax rates, the opposite happens when the economy expands). This will mean the gap between income and expenses will widen, making even, say $9 trillion a low number. The real number may be $15 trillion.

Everyone who understands basic business and economics knows this. Moody’s (if you think about it, Moody and Standard and Poor are both interesting names, given what they do), the rating agency, knows this. This is why they are talking about a downgrade of our debt. There is a point you reach where it is likely that you will continue making interest payments, but at which over no timeline short of centuries that you will be able to pay off the principle. Add economic shocks to this, and you get uncertainty, which is bad.

What a downgrade will mean is simply that the national “stock” of the United States is worth less. This will mean that we pay higher interest rates, which in turn will mean, what? HIGHER ANNUAL EXPENSES.

So you have this loop where higher interest leads to higher expenses, which leads to more borrowing, which leads to more interest. None of this can be stopped using normal economic principles unless we stop spending more every year than we borrow. This is so self evident that one could accuse most journalists covering this poorly of failing professionally, either in perception or integrity.

As I say often, though, the pig with lipstick on it stinking up the room is the Federal Reserve and the fractional reserve banking system.

At some point it is my hope that some professional economist or politician will read and understand the basics of my plan to both end our financially abusive system, and propose a solution in the ballpark of what I have proposed. I assume I have missed something, but feel strongly the broad outline is correct. I never have the time to study these things to the extent I like–I need to be somewhere right now, actually–but I think my basic thought process, my use of facts and logic on a complex system, is sound.

Again, the link to that series is here: http://www.goodnessmovement.com/Page14.html