Author: White Whale

We can measure intelligence, wealth, and physical capabilities. It is much harder to measure reality testing, which is to say how accurately someone’s worldview describes the way the world actually works, which is to say both a generally accurate philosophy–where accurate is defined as supporting on-going productive physical emotional and cognitive activity–and the capacity to understand the details of the concrete environment within which one is operating. The details of course will vary for everyone.

One would be tempted to suppose that in conditions of freedom success would imply this ability, but the fact is that you can be smart and unmotivated, you can be lucky, and you can be confined.

Self evidently, even beginning such a project involves a normative worldview, a baseline. Such things are implied in attempts to measure media “bias”, which is t say deviation from the way things “really work”. It is of course unsurprising that leftists view ABC and the like as impartial.

Several basic ideas that it seems to me should be present in any tolerably accurate version of the “real world” is that “there ain’t no such thing as a free lunch”, and that “what works for a little, will work more for a lot”. I can mix baking soda and vinegar together and get a reaction. I infer, accuratly, from this that if I mixed a ton of the one and the other together, a similar but much larger reaction would emerge.

We have only had one Great Depression. Not coincidentally, it is the only economic problem which we attempted to solve with Keynesian economics. The simple reality is that those ideas don’t work. If they worked, a small “stimulus” would cause a small effect, and a large one a large effect. As it happens, a small “stimulus” makes things worse, and an even larger one would cause a threat to our national existence, which is of course the whole idea. Keynes wanted a world without money, which of course could only work if people like him were telling us what we could have, and how much.

But I had mainly in mind here the African American communities in our large cities. Some 90% of them voted for Obama. Surely if a little doesn’t work, a lot works even less well? For 30-40 years they have voted for Democrats religiously around the country. What good has it done them? Surely at some point they will realize that if they keep doing what they have been doing, they will get more of what they have been getting?

Nancy Pelosi has done well for herself. Jesse Jzckaon and Jerry Wright have both made small fortunes pretending to help them. The benefits to them are concrete and “spendable”. The benefits to those in areas with 30-40% unemployment among younger people are invisible. How much worse could things get? 100% unemployment? That is the direction they are going.

I will add that one aspect of illegal Latino labor that is overlooked is that they represent a way around the minimum wage. Employers who do not pay Minimum Wage are already breaking the law. But it makes economic sense for both parties to enter into these labor agreements. The employer pays less, and the Mexicans are making what is for them good money. Again, these contracts are entered into voluntarily.

Nobody is asking young African Americans if they would prefer working for $4/hour to their current unemployment. The deal presented is that they “deserve” at least $7.25 (I think it is), and that this basic pricing floor protects them. Who is making this claim? People making $80,000/year or more–some millionaires–on the govermnent payroll, who live nowhere near the ghettoes.

Who is choosing for them? They sure aren’t. They just never see the jobs that are never created.

To be clear, basic economics tells us that if you pay someone X amount per hour, but they only produce X-y in output, you will go bankrupt. Then the job is gone. Kids who dropped out of high school after the 9th grade, and who have been in unstable, unnurturing homes their entire lives do not, initially, do good work. This is common sense. But if they want to try, they are worth something, and that first job is how they learn the skills they need to get a better second job, and so on. They can live with their parents-their mother, statisically, in the vast majority of cases–and help buy groceries, and move out when their skills become such that they can command much better wages.

My first job, back in the 80’s, paid $2.85/hour. I couldn’t live on that, but I didn’t try. I lived with my parents.

Kids that never enter the labor pool generally enter the prison system. As Reagan said “Some of the scariest words in the English language are ‘I’m from the government, and here to help you”.

It is a source of a bit of–I guess I will use the word sorrow, as a way of mourning what could have been and was not–that Milton Friedman and the Monetarists asked so few questions about the validity of a monetary system in which money could be created at will by a small power elite, one completely unchecked by any regulatory process, or answerable in any way to the American people. The project he assigned himself was asking how the system worked, and where it had gone wrong. He did not ask the fundamental question: if the Federal Reserve had the power to create the Great Depression, why do we still entrust that power to bankd who benefit from that power?

Despite QE1 and QE2, we still have low interest rates. All along, I have been skeptical that we would see hyperinflation. Hyperinflation is a way for governments to print their way out of fiscal trouble, over a relatively short period of time. Our government is not empowered to print money. A small cabal of banks is. And they don’t benefit from hyperinflation. Their seizure of our national wealth is a gradualistic enterprise, and they have NO interest in giving anyone any reason to look harder at it, at least at this point.

They benefited from the inflation in 1970’s that they seem to have caused very consciously by increasing the M1 supply (I have not studied this extensively, but that is my conclusion based on perhaps two hours research and an understanding of the system). They did this to get more power. Until 1980, if memory serves, their Open Market Operations were limited to the purchase of Treasury Bonds. A law was passed in 1979-80, as a “solution” to the stagflation facing the nation, which gave them the power to buy substantially any security, anywhere, with fiat money. They literally write the check, then own the security, where no money existed before they wrote the check. It also gave them control over most of the nations banks.

Keep in mind here that the Federal Reserve is OOMPOSED of banks, very large, mainly Wall Street banks, so it is the case that small banks are being regulated by their competitors, at least as I understand the matter.

What I am choosing to call primary inflation is the initial creation of money. Relative to Quantitative Easing, it is (we are told: we have no way of knowing for sure; the value of our money is quite literally beyond the reach of the democratic process) the purchase of Treasury bonds held by Reserve members with money created for the purpose.

What do they want to do with this money? Loan it to someone at interest. What is likely happening at this moment is that more optimistic economies around the world are borrowing that money. JP Morgan is making record profits. Why shouldn’t they? They play a role both in creating the money, and deciding who it goes to. They literally create money for themselves at the Federal Reserve, then make profits with it. If you ponder this for a moment it should become clear how monumentally stupid you have to be to go belly up once you are incorporated into this very cozy arrangement (think Lehman Brothers and Bear Stearns).

If they loan it within the US, though, it goes into our fractional reserve banking system. In theory, the bsnk can loan out 90% of every dollar it borrows.

(How the money is borrowed, I don’t know. JP Morgan and others could buy up stock in the banks, or they could “overnight” the money using the Federal Funds system. How exactly they benefit from a 0% target, I also don’t know).

Anyway, a 10% reserve requirement means that they can “clone” the money theoretically in the vault, and send it back into circulation. Since it should have been in the vault, since it should not be travelling around, competing with other dollars, it is inflationary.

Let us assume confidence in the future [which would include a non-Socialist President, and fiscal responsibility in Washington, as well as repealing Obamacare, and many of the other regulations passed in recent years. These things would constitute a cessation of our downhill slide. They would not improve things, but rather stop them from getting worse. If your head hurts because you are banding it against the wall, step one in curing your headache is to stop banging your head.]: the dollar is borrowed by somone to build or buy something.

That one dollar created by the Fed and given to one of its members and sent out into the world to make its way is now $9. And that money gets loaned, say, to a builder, who puts it in his bank. He owes it to Bank one, but Bank two now has real money in his account. That bank now has 90% of the first dollar, and can now loan it out. So the money gets cloned again. 81 cents is created and sent out into the world.

And oh, it gets deposited, and Bank 3 can now loan out 73 cents.

This process I label Secondary Inflation. By far, this is the most important element of inflation. Over and above the monetary policies pursued by the Fed in the late 1920’s and early 1930’s, the money supply will contract if nobody is borrowing money.

That is the condition we are in now. People are holding back. They are not borrowing money. So Bernanke’s Quantaitive Easing won’t even approach relevance until people start inflating our currency by borrowing again. What has happened, though, is that he has planted something like a trillion dollar seeds among very large private banks, who are poised to in effect seize large sections of our economy, when it recovers.

There is more I could say on this, but that will do for now.

Bon: not sure. Difficulty is the vinegar of life.

For me, I like vinegar. It is an essential element in ketchup and most salad dressings. It is in most barbeque sauces and of course all pickles.

How dull would life be if everything were sweet? We all need that kick in the ass from time to time.

If we figure out how to deliver that kick in the ass in conditions of peace and prosperity, then we have most of the problems of life solved.

Dale Carnegie once made the obvious point, that is not obvious to stupid people, that the only way to get people to do things is to make them want to do it. If you want sustained activity, you need sustained motivation.

You can point a gun at someone’s head–or that of someone they love–and get work out of them. The NVA regulars who terrorized the South Vietnamese countryside, extracting military service in exchange for not killing young mens families, were able to get work done. But the moment those same young men were able to, they threw them out of their villages. Supporting the natural resentment these villagers felt was the whole point and purpose of Creighton Abrams pacification strategy, which mercifully included many cases of shooting the sons of bitches outright. They richly deserved it.

Economics in large measure is the study of relative motivation. Why do people hire? Why do they work? Economics oriented in the real world understands the WIIFM principle: “What’s in it for me?” You can certainly appeal to people’s moral sensibilities, or their patriotism. But in the end you MUST appeal to something they value. Nothing is more enduring than the needs for security and safety, and those in turn are best met by making enough money for economic stability; through wealth building; through profit, in short.

There is an intrinsic difference between moral appeals “we can’t let the old go hungry”, and principles of sustainable economics.

Let us do a reductio ad absurdum. If it is morally good to take money from the present generation which we don’t have, and give it to people who paid in a fraction of what they are taking out, why not do even more of this? Rather than recognize that we can’t afford the system we have created, why not double down? After all, it is not like you can live comfortably (on your own, in a retirement home, far from the family that in past ages would have kept a room for you and cared for you) on Social Security. Why not double the payments? Would this not be morally right? Why not triple them? Why not quadruple them? Why shouldn’t every elderly person be granted $1 million dollars a year? After all, they are old, and it would comfort them.

Self evidently, this line of thought ignores economic realities. So too do those who benefit from panicking little old ladies in pursuit of economic policies that are designed in no small measure to protect political power, and NOT–categorically NOT–to actually help in a sustainable way the constituencies to which their loyalty is allegedly pledged.

Obama would actually be happy to see urban blight and misery spread. He can claim that this only proves that policies which lead to the creation of massive “poverty relief” organizations–with the massive, Democrat-voting taxpayer funded payrolls that go with them–haven’t gone far enough. Inner city blacks have been conditioned to believe that they are being helped with handouts and minimum wage laws, and can thus be tricked into supporting the very policies which ensure structural unemployment among them, and the corresponding inability for all but a few to rise above their conditions.

Poor people pay, as Thomas Sowell observed three decades ago.

What is needed is not mercy, and not compassion. What is needed is freedom. The more I learn, the more I realize that the only sustainable forms of business abuses are those sanctioned and protected by the government. We the People can sort out everything else on our own.

Would you rather not work at all, earn $600/month for doing nothing, or $800/month working at $5/hour, which is several dollars below the minimum wage? Some would choose the second, some the third, but given a choice, I don’t think anyone would choose the first.

Yet, that is where some 55% of young African American males are in this country at the moment. They are unemployed, and not having worked long enough to draw unemployment, are not able to earn any honest income at all. Small wonder many turn to drug dealing.

This article is illuminating, although of course the basic argument has been in place since at least the 1940’s, and ignored by the people who benefit from pretending they care about the poor.

Since minimum wage laws discriminate against the employment of the least-skilled worker, it shouldn’t be surprising to find 16-to-24-year-old male high school dropouts its primary victims.

Among the white males, the authors find that “each 10% increase in a state or federal minimum wage has decreased employment by 2.5% ; for Hispanic males, the figure is 1.2%.

“But among black males in this group, each 10% increase in the minimum wage decreased employment by 6.5%.”

How does this work? Wages are a function of supply and demand. This is obvious, but I have been pondering it again as I am listening to Thomas Sowell’s excellent “Basic Economics” on CD (educating yourself while driving is a good use of time).

When you enact minimum wage laws in areas with high unemployment, you get a lot more applicants for work than you have jobs. This means that the applicants get cherry-picked. If the owners are racists, this makes it easy to not hire African Americans.

Yet are unemployed people better off working for little, or not working, for nothing? What would you prefer?

Leftist idiots ASSume they know what is best, so they insist on “fair” wages, that have the effect of increasing systemic unemployment. Most seriously, they make it so that high school dropout kids can’t get jobs of any sort, to get the sort of experience needed to get better jobs, and eventually to rise up into the middle class. The whole process is short-circuited.

You see, employers hire people for what they are worth. If they hire people for more than market value, then they eventually suffer business losses and go bankrupt. And they CAN’T hire people for less than they are worth, since no one will take those positions.

It is quite clear that much of urban blight is due to Minimum Wage laws. They are great for those with jobs, at least relative to those who can’t get a job at all.

Yet the simple fact is that if wages were allowed to drop to their natural level, then jobs that are now going to the Developing World would stay here. There are very poor people in both the cities and countryside who would work for what people in other nations are working for. To be clear: they have NOTHING now. They might get in unemployment the same paltry amount they would have received working for $4/hour. But that money teaches them NOTHING, and makes them less employable in the future. It makes things worse.

So it is no surprise that as Minimum Wages increase, so too does umemployment, in a more or less linear fashion that is MOST damaging to poor blacks.

Sitting there, eating frozen yogurt with my littler people, in a really nice strip mall in a nice section of town. Stream of consciousness: this is too nice, something bad is bound to happen. I hope we don’t get attacked by zombies, ha, ha.

It’s a joke of course. Preparing for the zombie apocalypse. Reading Pride, Prejudice and Zombies.

So of course I zone out like I do, and start thinking about the disconnection between all the things we consume and who creates them. Everything we do is made somewhere else. We don’t make shoes, clothes, food, highways, computers, cars, or anything but some very small part of the economy.

Maybe you are an electrician: you wire some very, very small part of the world at large, and not normally your own home. Electricians never get their own ceiling fans installed, just as plumbers never get the new kitchen sink in. They are too tired from doing it for other people, for money.

In a subsistence economy, life is simple: once you have enough to satisfy the needs of life, you are done. You can relax. For us, though, how do we know how much is enough? When do you stop, and why? If we were content with the medicine of the 1970’s, we would be having no issues with healthcare costs. If we were content to live solely in homes the size of our grandparents, we never would have had the housing boom and bust.

I feel sometimes this vague dread in really nice places–air conditioned, beautiful, and everything is plentiful and everyone is attractive. It seems artificial, like it is hanging on the edge of a cliff, like it can’t endure. Yes, we can get this happy, happy, happy world for some short period of time, but if it can’t last, then it is doomed. Death follows life just as taxes follow income and lies follow excessive regulation. Order is followed by disorder.

The zombie myth “holds” this anxiety, I think, for many people. It is the disaster over the turn of the hill that we just can’t quite see yet. Zombies are unreal enough that we can project onto them this fear without consciously connecting it with our own innermost thoughts.

This is simply one path through the zombie forest, but I think an interesting one that might at some point benefit from more exploration.

Did John Maynard Keynes or Paul Krugman ever run businesses? No, of course not. Keynes made his fortunes as an academic and currency trader–he understood inflation quite well, which is the only thing that permits profits in currency trading–and Krugman has been a lifelong academic.

The latter speaks to the psychology of business. He rejects the idea that a socialist-in-chief who has passed a law–Obamacare–for which it is impossible to budget, but which–along with the tax increases that will be necessary at some point, if not this year–will certainly be expensive.

Does he even know what a profit and loss statement is? Or that business owners, not unreasonably, prefer not going bankrupt? Krugman simply doesn’t care. They are an aggregated, undifferentiated mass for him. Treating people as abstractions in this way is no different in principle that claiming that general statements could be made about “the Jews”.

I will grant that he is not motivated by literal bloodlust–although at some point he could perhaps be made to feel the attraction, especially if mass death were also abstract due to his physical distance–but he has no love for the people who take the risks to create the companies that create the jobs that create the wealth in this nation. This is because even though he arrogates to himself the right to speak for “the people”, he has never been one. They are the ones down there on the street: why sully himself?

He is a smug priss. I don’t like him. I don’t like anyone who inserts ideas of hatred, or ideas that lead to poverty into our national dialogue.

I have not run the numbers, but I suspect we could confiscate the wealth of the wealthiest 10,000 Americans and it wouldn’t pay our bills for a month. And it would, of course, lead to the eradication of millions of jobs, and very, very deep depression, from which we would never emerge; at least, until private property rights were again respected, as they had to be, to some extent, in China and elsewhere, for any development to happen at all.

We do need to raise taxes. Far, far more, though, we need to cut off the oxygen to the cancer that is the swollen horde of taxpayer funded parasites in the Federal Government. We live in its shadow–but the sun is still out there. We need to find it.

Be thou an oasis in the darkness.

I saw the last Harry Potter. I really enjoy these movies. They work well on deep mythic levels. Here, we even had a resurrection.

Clearly, a fictional series that succeeds this much has tapped a cultural nerve. This is a complex phenomenon, but I wanted to submit what I view as the primary component.

Joanne Rowling (surely we can admit by now she is a girl?) created an intact culture. The word “muggle” serves the same role as Goyim, or its countless equivalents in culturea the world over. We are told implicitly–it is explicit, but the full terms of the deal never discussed–by cultural relativists, most of our thought leaders, that the cost of global peace is the sacrifice of our identities. Consumerism is a gradualistic way of accomplishing that goal; the rejection of religion–normally the core component of any sense of identity–a more direct one.

To put it in a perhaps strange way, we need funny hats. We need funny shoes. We need some way of saying this person is this and not that. We have to be able to differentiate one another. “Emo” is simultaneously a recognition that our culture is dying, and a solution to that, by creating what we call a “subculture”.

Hogwarts is a subculture. It is quirky and appealing, and the fact that it “breaks the rules”, by existing unapologetically by its own rules, is cloaked by the fact that it is filled with fantastic and unexpected elements. Rowling shows great creativity in distancing them from us in this way.

We see, there, what we want, here, but cannot find. In my view, culture develops naturally and organically, if not STOPPED. There is the problem: all incipient cultural formations that exist outside of the leftist egalitarian creed to which so many of our thought leaders desperately cling–and that is the word–are opposed by them.

The war of one against the other is to be replaced, in their view, with the permanent victory of one class over another, with peace maintained by violence and thought control. Few lack the vision to see this clearly, but not all. Those are the nasty ones.

We also need this concept of Evil and the noble crusade. By combining all of these elements, Rowling surrepetiously–likely unconsciously for her as well, since whe appears sentimentally attached to purported humanitarian activities–inserts back into our shared mythic life medicine many, many people desperately need.

Down the rabbit hole:

No, the government shouldn’t budget the way families do; on the contrary, trying to balance the budget in times of economic distress is a recipe for deepening the slump. Spending cuts right now wouldn’t “put the economy on sounder footing.” They would reduce growth and raise unemployment. And last but not least, businesses aren’t holding back because they lack confidence in government policies; they’re holding back because they don’t have enough customers — a problem that would be made worse, not better, by short-term spending cuts.

For any reader I may have who do not salivate at the prospect of a permanent eradication of unemployment at the cost of permanent poverty and a totalitarian government enforcing it–like Krugman must, as it is otherwise hard to see how anyone with an IQ over 100 could be so stupid–I suggest education.

Start with Henry Hazlitt’s “Economics in One Lesson”.

Then read either “The Fatal Conceit”, or “The Road to Serfdom”, by Friedrich Hayek.

Then read “FDR’s Folly”, by Jim Powell.

Then read anything that appeals to you from Thomas Sowell or Paul Johnson, both of whom have written a lot of books.

Here are the net truths: the ideas proposed by Krugman will cause economic malaise; they will hurt the poorest Americans the worst; they will decrease our economic and political liberty; they support totalitarianism; and they are supported by totalitarians.

There is nothing nice about this man or the empirically discredited notions he spends so much time–and let’s be clear, makes so much money–hawking to ignorant and gullible people.