Monthly Archives: February 2014

Feb 3 2014

GINI Index Explained


Hard to believe this …

The importance of the GINI index to intellectuals and others of the liberal or progressive persuasion cannot be dismissed. This popular index is used to rank countries as to how good a place to live they are by organizations such as the UN the World Bank and our own CIA. Those of us that believe that the American way of life is the best ever devised by man would place America at the top of any list of countries — American Exceptionalism — is what be believe in. We would however be very, very wrong. The chart below is based on our own CIA’s ratings and it places us way down the list at about 100 out of the 149 rated countries. Places like Cambodia, Uganda, Iran and Macedonia all have better ratings then America. The CIA gives America a GINI of 45.0 and to put that in perspective Kazakhstan has a GINI of 26.7 and that makes them the 9th best place in the world to live (lower is better). How can this be?

gini-coefficient-map1

Most Americans would find this very hard to believe for just using common sense if this GINI index were true why would just about everyone in the world be trying to get into the United States both legally and illegally? For example India with a 36.8 GINI rating is ranked as 59th verses the American ranking of 100th — almost twice as good as America. So based on the GINI rating why would anyone move from a good place to a bad place? If the facts don’t match the theory there is one conclusion that can be made and that is that the theory (rating in this case) is wrong. This should be to no surprise to those of us that have a great distrust of things coming from agencies controlled by those seeking personal power.

One of the core precepts used to make this factious rating redistributing wealth can be understood by looking at what Milton Friedman wrote in his 1962 book Capitalism and Freedom. The answer can be found in Chapter X The Distribution of Income on page 171 of the fortieth anniversary edition. But first before we get into the explanation we must first understand why the rating exists at all. It’s actually very simple those that desire power need to find ways to justify their desires to the common man. Since America was so far above all the rest of the world they had to find some way to make it seem like it wasn’t as good as “we” thought it was. There was one segment of the Boomer generation that thought they knew a better way to run the country and when their revolutionary ideas failed in the 60’s and the 70’s to take hold in the general population they took a different tack.

The Education System and Politics was their path to the power they desired. Previous generations did not have their beliefs so all they had to do was wait till those that believed in America were retired and/or dead. The strategy was to out live the previous generations and manipulate the younger ones through propagandized education while they moved up in the ranks of the government at all levels. Most of us did not see this shift we were to busy living and raising our families. But we awakened after the election of 2008 put a believer of central planning and socialism in as president of the United States of American. The answer was the Tea Party, which changed the complexion of congress in time to stop further damage but not enough to reverse what was already done. The job needs to be finished this November.

Friedman has written many excellent books on the subject of economics and politics and when you read them you quickly find they are well thought out, the arguments logically developed and the conclusions sound. The issues are discussed putting both sides on the table and then he goes on to prove definitively that the only way to get a truly free and just society is to get government out of the peoples life’s. The key here is the fact that government is run by people and people have personal agendas and those are almost 100% self-serving. The founders understood that and that is why the powers they gave the federal government were so limited.

The opposite of what we have is America is central planning and limited freedom and that is what most of the rest of the world has — but we have seen that it just doesn’t work. Hundreds of million of people were killed in setting up these systems all through Europe and Asia over the last hundred years, and where are they now? These systems all had at their core an economy that was run (directly or indirectly) by their federal government, the names of the systems were different but the practice was the same in each case. We understand that and reject the concept but those that want to rule are clever and they found a way to get what they wanted through the back door while we weren’t paying attention. It started with changing our history and even the definition of words so things seemed to be different than what they really were. Keep in mind George Santayana, who, in his Reason in Common Sense, The Life of Reason, Vol.1, wrote “Those who cannot remember the past are condemned to repeat it.”

Starting in 1913 with the creation of the federal reserve and them in earnest with Social Security and quickly running through The Great Society, Medicare, Medicaid, The Department of Education and many other programs and Departments we now have government (federal state and local) running (directly and indirectly) over 40% of the American economy. When the health care system take over with the Patient Protection and Affordable Care Act (PPACA) of 2010, is completed in a few more years the government will be running almost 2/3 of the economy. When that happens we will no longer be citizens we will be subjects of those that rule us.

Now the explanation of why the GINI index is what it is and how it is used to justify the Federal government taking over more and more segments of our country using every trick in the book and even some new ones as those who desire power transform the country into one that is run out of Washington.

The GINI index has many factors but the one that seems to give many counties a bad rating and others a good rating is the one that measures income disparity between the classes. This factor measures the difference between those at the top, the 1% today, verses those at the bottom, the 99% today. For example lets say the bottom segment of country A earns on average $5,000 per year and the top segment earns $50,000 so there is a difference of 10:1 which is low and that gives country A a high rating. Now we have country B where the bottom segment earns on average $10,000 per year and the top segment earns $250,000 so we have a difference of 25:1 clearly this is a great discrepancy between the top and the bottom and so country B gets a lower rating. Based on those earnings numbers and the resulting GINI rating, policy is developed to reward country A for being good and penalizes country B for being bad. But is this even a valid measure and if it isn’t of what good is it?

Friedman gives an example like this in his book and then explains what if country A has a cast system with no mobility between the classes. This is not speculation many countries have de facto cast systems where if you are born poor you stay poor. These countries are almost all poor economically because of their system of no freedom no private property and a strong central governments run by rulers that have no reason to change anything. He goes on to explain that country B has freedom, private property and limited federal government. This gives the people the incentive to work hard and make something of themselves. Sure some make a lot of money and get to the top and some don’t. But all are better off even with this income spread for the bottom of those of country B have twice the earning power as those in country A. But more importantly those in country B can be born at the bottom and through hard work and effort end up at the top. The upward mobility is the key.

But there is another factor here often over looked. When you graduate from high school or college you enter the work force at the bottom. You maybe making a reasonable amount but you also expect to move up and be earning more later in life. So you are in a lower income group when young and in a higher income group when older. The point is that the people in a free society move up and down the income groupings over time. The top today is not made of the same people from 20 years ago and the bottom is made up of different people as well. Those seeking power and using class warfare try to made us think that people stay in a group all there life — maybe they do in some countries but most do not here.

Clearly we are in country B and most of the rest of the world are in countries like county A; the prove of this is not found in the GINI index but with people that come here because of the opportunity they know is here. They voted with their feet and that is the only vote that counts.

Feb 3 2014

The Dual Nature of Mankind


The Mores of the people and Politics

Something that is both good and bad with humankind is our dual nature; the Asian Yin and Yang so to speak. We on the once side we are ruled by our self-interest doing and acting for our personal betterment to the exclusion of others. A politician passing laws where he can personally gain financial which is morally wrong even if not legal wrong. Then we have the other aspect where we act to help others even when there is no betterment to ourselves. For example we have a soldier falling on a hand grenade to save his comrades knowing he will die. Clearly these are very different aspects of our personalities. Many have studied this dichotomy and written their views on why this is true. The reasons matter not here we accept that they exist and deal with them as our founders did when they wrote our Constitution. So to prevent the former and promote the later we have hard limits placed on the federal government with checks and balances and enumerated powers — negative rights as some like to call them. The former was deemed much more important by our founders than the latter based on fine thousand years of political human history.

The importance of this issue cannot be dismissed and again as our founders understood a system like they created could not work without a moral base in the citizens. They saw religion as the provider of our moral base and they protected that right in the constitution and first amendment by making it impossible for the federal government to establish a state religion as existed in the rest of the world at that time. Contrary to current popular belief the founders made no attempt to take religion out of the government; in fact the opposite was true. This alone proves that the current drive to take religion out of the government is not valid at any level moral or Constitutional. In fact, it could be said that those that seek power are trying to establish a state religion — that religion being secularism — which is a system of beliefs designed to replace other systems of beliefs. To make that change they need to change the mores of the people and that is being done though the education system and the entertainment industry.

Montesquieu in his The Spirit of the Laws written in 1748 discuses the mores of the people extensively but two sections in particular Book 19 page 308 and Book 24 Page 460 in the Cambridge University Press 1989 translation relate to the peoples mores and their government. The issue of the mores of the people is important in politics because as Montesquieu understood the beliefs and customs of the people must be matched by their system of government. If there is a mismatch then there is conflict and if there is a large mismatch there is civil war. For example after the American Revolution the issue of slavery was not settled. The bulk of American people did not like it and wanted it gone as it went against their mores but because America was a republic the states that had slavery wanted to keep it and the issue festered. The Civil War under the first Republican president Abraham Lincoln settled the issue and the government matched the mores of the people for the next 100 years or so.

In the late 19th century in the heat of the transformative industrial revolution Karl Marx changed the mix of beliefs, mores if you will, with his radical theories now called Marxism or Communism. There was much appeal to what was proposed but not for the reasons that were stated by Marx. The intellectuals saw this as a way to reverse the trend to freedom that was transforming Europe at the time; but convincing the people that there was a better way then what existed then was not going to be easy. Further there was a reinforcing belief structure coming from a different direction that gave additional support to this trend on the intellectuals. This support came form the new Existentialism movement; in particular from Nietzsche, in my opinion, who developed his theories shortly after Marx died in 1883. Nietzsche’s writings were in part the concept that there were two kinds of mores — the mores of power and the intellectual aristocrats who had the right of rule and those of the common man, the mores of slaves as he called them who did not have that capacity and were therefore inferior. His writings were very much against religion and also against anything someone tried to claim as a “truth” of any kind even science and engineering. He appeared to be in support of the aristocrats’ as then existed in Europe for they believed only in themselves as the true sovereign man who made his own rules as only he saw fit.

Those seeking power took Marx and Nietzsche’s’ work and merged them into what is now the progressive movement; but they needed more and they got that after John Maynard Keynes gave then the political means they needed in the late 1930s with his theories expounded in his book The General Theory of Employment interest, and Money now known as Keynesian economics. The core of the progressives beliefs are: based on Nietzsche work that there are those that are born better and have the right to rule; then supported on Keynes work that big government was required; and finally on Marx that there was moral justification for doing this. Their only problem was that to get the power they sought they needed to change the mores of the people to accept being ruled. Most of the world agreed with this so that was not their problem. Their problem was America where the beliefs of Marx, Nietzsche and Keynes never took complete hold — the Citizens here were happy not being ruled.

Using the ACLU which was founded in 1920 by those with this belief — that they, the intellectuals, were destined to rule — a campaign was started to separate the Citizens from their government by changing both the government and the mores of the people. The key to achieving this change was to take over the Education system which was accomplished first when they successfully blocked public funding to bus students to public and religious schools in 1947 with the Everson v. Board of Education case and then it was completed when the department of Education was established in 1979. Once they had control of the education system they thought they could shift the mores of the people to accept a larger and larger government. The legislation introduced and passed by both political parties albeit for different reasons over the last ten years in particular has taken the country to the very edge of this transformation.

While religion was being taken out of the schools and the government an attack on the Citizens was also being waged with Political Correctness (PC) and Multiculturalism which were designed to neutralize religion and to show that there was no differences between anyone we are all the same — and for sure, to them, the American system is no better then anyone else’s system. But the sameness they believe in is Nietzsche’s the mores of the slave for the common man; and the no better, to them, is that we should accept being ruled as does everyone else in the world. The moves and the TV shows are full of this message and have been for a long time. Supporting this was a new curriculum in the schools that taught how bad America was so its no wonder that today’s the kids and young adults are confused — for why are people sneaking into America if this place is as bad as they are being told it is?

This manufactured distrust of our free market system gave the progressives the power to say we are trying to change our ways and be more like everyone else and this campaign of misinformation came to fruitions in 2008 with a new kind of president — one that fully indented to transform the country into a form that he believed was better. The one he was taught in the schools of a powerful central government ruling the people — for their own good of course. Unfortunately during the 2008 election no one bothered to ask him what he was going to transform us into and so we now have economic stagnation as we are neither free market nor central planning. And since the move is toward central planning there is no incentive to do anything as it is perceived that the government will be taking over most functions and then even if you did made some money it will be taken away a part of the redistribution of wealth program.

So where are we? Well to use an old cliché we are between the rock and the hard place. The Supreme Court ruling on June 28th tipped the scales of government to central planning; as the ruling affirming the Patient Protection and Affordable Care Act (PPACA) of 2010 was constitutional under the power to tax gave gives the legislative branch the power to do most anything they want just as Nancy Pelosi stated during the debate on that legislation. The process of changing the government started in 1913 has now been completed with this ruling. Roberts in making this ruling ignored the constitutional amendment process which was designed to adjust the Constitution when major changes were needed. The American people did not want this legislation and it was done by one political party — clearly this was above and beyond what congress had the power to do, and it was not in the spirit of what the founders intended. Roberts will now be known as the person that ended our republic and turned us into just another European style social welfare democracy ruled by a powerful aristocratic few.

It’s never too late but we are now in the 4th quarter down 14 to 10 on the opponent’s 40 yard line; its 4th down, 9 yards to go and 8 seconds left on the clock. Only a Hail Mary pass to a receiver in the end zone can win the game. Who is going to be our quarterback in 2016? — And who is going to be the receiver? We have many good candidates to make our team; Scott Walker, Ted Cruz, Paul Ryan, Marco Rubio or Alan West whoever it is we need stars that can complete what is needed to save the Republic. To complete that pass and save the Republic we need the Presidency and at minimum 51 Senators as well as maintaining control of the house. Than, that team needs to repeal almost everything that has been enacted since the 70’s; starting on the first full day January 21st 2016 with the repeal of PPACA Obamacare. After that the real work begins — to dismantle all the rest of the progressive transformation.

Feb 3 2014

Homeostasis and Civil Society


The Destruction of the American Family

There is a concept that has been applied to this subject before but in my quick review not in the sense that it could be developed, at least not in my opinion. The concept is Homeostasis which is the property of a living entity to regulate its internal environment such that it tends to maintain a stable, constant condition though a process of negative and positive feedback’s. This allows the entity to survive environmental conditions that are not optimum to that entity. All life as we know it has this property to lesser or greater amounts and those that favor the later expand while those with the former contract. To some degree this has been applied to social systems including humans with terms like social equilibrium but I think that is a limiting term and that applying homeostasis to the human society in its fullest sense would allow us to make some interesting observations. In the distant past that human unit would have been the tribe not the individual; today a small town might be better.

If we apply homeostasis to a human town (also known as a township or county) and use the definition described in the first paragraph of a stable system then we must have these things: first and foremost the ability to reproduce and maintain the system; then we must have the ability to exist in the environment; and lastly we must have a social system that maintains the family unit. The family unit is the key for the individual by him/her self can not fulfill the first requirement and the town can not exist without stable families. All these systems must work together to maintain the town in a form that resolves differences and promotes behavior that is acceptable to the town, the family and the individual. The highest social unit, the town, is maintained by having stable families and the families are maintained by having responsible individuals. Each must understand its purpose in the social structure and work to maintain that structure while adapting to changes in the environment.

To maintain this system in equilibrium there must be a regulating body or bodies and in this case it’s the town’s government. Many terms have been used for the systems used to regulate and resolve issues but we’ll use today’s terms of a Mayor and a Town Council as the most common. Sub systems needed are a means of maintaining order the police; and education system schools; a way to maintain the health of the individuals, medical services; a system of maintaining roads and bridges, public works and lastly a means of providing utilities such as power, water and waste management. Much more is required but the rest can be provided by the members of the town themselves. In the not to distant past small towns could exist almost completely by themselves, obviously today that is not possible but the principle of the town (township back then) as the key human social unit is the justification that was used to form this country and is what resulted in our constitution which limited the federal powers in essence hands off the local communities. These towns, back then, were in a Homeostasis State.

Those born after the late ‘40s and early ‘50s will not remember the “communities” that existed back then — it was a very different world then what came after. The people in those towns took care of themselves with very little help from outside (this discussion is for the social system not the goods and services that are required today and can be provided from outside the social system without destroying the local social system). The schools the police the town council all had one thing in common and that was protecting and nurturing the community — in particular the children. It wasn’t perfect we are human after all but the results were less strife less crime and a moral people. This system worked very well from the time the first settlers got here till say the late 1950’s which would be about 300 years give or take.

However, these towns didn’t exist in a vacuum larger structures were formed first states and then the community of states the country. The establishment of the U.S. Constitution giving preference to local control was the key to the success of this endeavor and that maintained the stable social system that had been developed in the towns. Alexis de Tocqueville understood this when he wrote Democracy in America first published in 1835 after his visit to America. This book is by far the best work ever done on the uniqueness of the American social and political system. Unfortunately, these larger political structures gave a means for those seeking power to game the system using today’s vernacular. These power seekers did not like the true power to reside in the Towns for there were too many for them to control. But there were fewer states and only one federal government so work was begun to move the power from the local communities to the national level. De Tocqueville saw that this could be something that could happen and it did although not for the exact reason he talked about and it took longer then he envisioned.

Because the system of limited federal power the founders established in the Constitution was so strong it was not easy to move the power to Washington. To move that political power would require a change of the people’s mores and that would upset the stable homeostasis social system of the towns. Some would say this was a planned change by those that wanted to rule and to some degree that might be true; however, my opinion like that of Thomas Jefferson is that the concentration of power is a natural thing and will occur on its own without some sinister master plan. This does not mean it is right it just means that the citizens must be educated and vigilant to prevent it. The one thing, in my opinion, that allowed this power shift to happen was a result of the formation of the movie segment of the entertainment industry about 100 years ago in Hollywood. This means of communications was something new to society and therefore no defense to it yet existed, if it were to be used for other than entertainment, which it soon was. Interestingly the possible corruption of the citizens morals by the arts was a serious concern for Plato and Socrates as discuses in “The Republic” in classical Athens almost 2400 years ago.

The key to rising children is a stable family preferable with a mother that stayed at home at least until the children were out of high school. Obviously that can not be done in all cases and many times the husband could not earn enough to support the family to the level the family wanted and the town expected. So many women did have to work but most took part time jobs that allowed them to be at home when the children were home from school. In this system the Children were under supervision almost all the time either at school or at home with their parent or with other relatives. This method of rising children was not perfect but it was better then any before and certainly much better then what we have now with growing government interference at all levels.

Feminism changed all this in the 70’s and much for the worse as women were convinced they should not have children and they should be in the work place just like the men and what children they did have could be placed in day care. This did two things number one it put more people in the work force so that put downward pressure on the pay rates. Number two it implied that rising children was demeaning work not worthy of a progressive woman. But worse the federal government got involved with equal rights laws that dictated that women and other defined minorities be fairly represent in all jobs. Companies had to report to the federal government how many females and other “official” minorities they had employed.

This was a drastic change in the mores of the people and the entertainment industry went into full support of this mores change. Within a few decades there wasn’t a movie being made that didn’t directly or indirectly have this message embedded in it. Worse these changes helped to break up the family structure since women were now independent of men and no longer needed their support (in the movies). And again the federal government stepped in with programs to support single mothers, Aid to Dependent Children (ADC) was started in 1935 within the Social Security system but it exploded under President Johnson and was soon under fire for promoting women to not get married and have lots of Children. Many poor families split up with the man becoming a “live in” boyfriend and to maintain the scam he would work in the underground economy for cash and often turned to crime. Within a short period of time the entrainment industry picks this up and now it would be very unusual to see a movie with a traditional family structure. Most show single profession (college educated) women living alone with one child from a failed relationship and their working as managers or executives, often in the government. If a man is even shown it’s in many cases in a derogatory role.

We could go on with the current change to define what a marriage is but that is more discussion then we need. The bottom line is that the traditional family structure that has existed for thousands of years in now in danger of disappearing. If that happens then the mores of the people will have been destroyed and replaced with a belief that only the federal government can properly raise children. We are very close to that now and, in fact, the change has gone far enough that homeostasis of the town is no longer stable we have exceeded the feed back mechanisms that allowed a community to exist. What will replace the family is unknown but if these changes aren’t reversed soon there will be no way to go back to what worked so well in the past.

Today many cities have central cores comprised only of poor single mothers as the head of the home. The live in boy friends are gone leaving the children in such horrible living conditions such that few can even get through high school. Most of the boys turn to crime such that it would be hard to find a young man in a central city that did not have a criminal record. Today there is talk of passing laws that would, in effect, hide past criminal records so these neglected children now young adults could find jobs.

This is a sorry state of affairs for a country like America and I place 100% of the blame for this in the elitism of the intellectuals that wanted power so badly that they were willing to kill the American family so all would be dependent on the federal government. And we are almost there right now.

Feb 2 2014

Movie Review, Forbidden Planet


A movie with a real and significant message

This is a Classic movie that was entered into the Library of Congress’ National Film Registry in 2013, being deemed “culturally, historically, or aesthetically significant.” This film directed by Fed M. Wilcox from a screen play by Cyril Hume had many firsts and was a precursor to what was to come much later in this kind of film. The film stars Walter Pidgeon, Anne Francis, Leslie Nielsen and it featured Robby the Robot the first robot actor. Goggle Forbidden Planet and check out the Wikipedia write up. But that’s not why I am writing a review of a 58 year old movie. Back then I was very into science and engineering and I read every science fiction book I could get my hands on.  When I saw this movie I was impressed by both the special affects the plot and the hidden message which bears revisiting today for many reasons. As you may see after reading this review.

Set in the 23rd century, the United Planets Cruiser C57-D travels to the planet Altair IV, 16 light-years from Earth, sent to discover the fate of an expedition sent 20 years earlier. Soon after entering orbit, the cruiser receives a transmission from Dr. Edward Morbius played by Walter Pidgeon, the previous expedition’s master of languages and their meanings. He warns the starship to stay away, saying he cannot guarantee their safety; he also states further assistance is not necessary. The C57-D Commander John J. Adams, played by Leslie Nielsen ignores the warning and after receiving coordinates lands the starship.

After landing they are met by Robby the Robot, played by himself, who takes Adams, Lieutenant Jerry Farman played by Jack Kelly, and Lieutenant “Doc” Ostrow, played by Warren_Stevens to Morbius’s home. There, Morbius explains to them that an unknown “planetary force” killed nearly everyone and then vaporized their starship, Bellerophon, as the survivors desperately tried to lift off the planet. Only Morbius, his wife (who died of natural causes later), and their daughter Altaira, played by Anne Francis were somehow spared. Morbius fears that the C57-D and its crew will meet the same fate and they should immediately leave.

That night after posting sentries, equipment aboard the C57-D is sabotaged. Adams and Ostrow confront Morbius in the morning; where they learn he has been studying an extinct highly advanced native species, the Krell, a race that mysteriously all died about 200,000 years before, just as they were on the verge of achieving their crowning scientific triumph leaving no trace of their existence on the planet’s surface. Admitting to Adams he hadn’t been forthright Morbius shows Adams and Ostrow a secret Krell laboratory that he found, within it he shows them a device he calls a “plastic educator”, a device capable of measuring and enhancing intellectual capacity; he puts it on and uses it to display a three-dimensional, moving thought projection of Altaira.

Morbius tell them that the Bellerophon’s captain tried the machine and was instantly killed. Morbius also tried using this machine and he barely survived; later after recovering he discovered his intellect had been permanently doubled. His increased intelligence enabled him, along with information from a stored Krell library, to build Robby and the other “technological marvels” in his home. Morbius then takes them on a tour of a vast cube-shaped underground Krell machine complex, 20 miles (30 km) square, still functioning and powered by 9,200 super powerful thermonuclear reactors. Adams demands that the knowledge of the Krell be turned over to Earth supervision, but Morbius refuses, citing the significant danger that the Krell technology would pose to mankind if it were to fall into the wrong hands and misused.

While this is going on Altaira never have seen a man, other than her father, is becoming romantically attracted to the captain. Going back to the starship Adams orders a defensive force field fence set up around the starship for protection. Despite the precautions Chief Engineer Quinn is found dead the next morning. The next night, the C57-D’s crew is prepared they quickly discover that the creature is invisible as its roaring Lion like image becomes visible as it stands within the fence’s force field, further enhanced by the crew’s directed high-energy weapons fire. None of these precautions matter as the monoester kills several of the crew, including the ships navigator Jerry Farman. While the battle in the starship is going on back in the Krell lab, Morbius is startled awake by Altaira’s screaming; at that same instant, the large creature suddenly vanishes.

Returning to Morbius’s home Adams confronts him demanding an explanation, while, Ostrow sneaks away to use the Krell educator; where he is fatally injured. Before he dies Ostrow explains to Adams that the Krell Machine was built to materialize anything the Krell could imagine, projecting matter and energy anywhere on the planet. Then with his dying breath, he also tells Adams the Krell forgot one thing: “Monsters from the Id” and before he can say more he dies. Adams now understands what happened and asserts that Morbius’ subconscious mind, enhanced by the “plastic educator”, utilized the Great Krell Machine, recreating the Id monster that killed the original expedition when they tried to leave; Morbius steadfastly refuses to accept this conclusion.

By this time Altaira declares her love for Adams in defiance of her father’s wishes, and Robby detects the Id creature approaching the house. Morbius commands Robby to kill it, but Robby knowing it is a manifestation of his master develops a conflict with Morbius’ command since he his programmed to never harm a human and Robby shuts down. The ID creature power by all the thermonuclear reactors melts the indestructible metal doors of the Krell laboratory where Adams, Altaira, and Morbius have taken refuge. Morbius not accepts the truth: the creature is an extension of his own mind, “his evil self”.

He is fatally injured trying to stop the creature, which then disappears but before he dies Morbius directs Adams to activate a floor switch and warns them that all the Krell thermonuclear furnaces will now overload and destroy the planet; they must be 100 million miles away within 24 hours. Adams and Altaira along with Robby escape the lab and get back to the starship and leave later from deep space, with the C57-D safely on course back to Earth, they witness the destruction of Altair IV on the ship’s viewscreen.

The reason this movie is so significant is the message that to advanced a technology developed without understand of all the ramifications can destroy even the those that mean no harm. Maybe because if was so young at the time I was moved by that message and today as we move into genetic research where we will soon be able to modify are genes we had better make sure that we “really” know what we are doing or like the Krell we could destroy ourselves.

Feb 2 2014

Book Review, Extortion


Congress makes the mafia look tame

A very reveling and believable book, written in 2013 by Peter Schweizer who does a very convincing job of presenting a very “out-of-the-box” analysis on how our elected politicians and their staff extract your money, buy votes and line their own pockets; instead of doing what they were sent to congress to do.  Conventional wisdom had it just the opposite with all the special interests buying the politicians votes on pet legislation with campaign contributions. After reading this book you will see how very wrong that concept was.

The concept that Schweizer presents to us is that it is the politicians themselves that have concocted a legislative system designed not to produce good and beneficial laws but to use the legislative process to extort money from the private sector. The grid lock and what we think of as a dysfunctional system is intentional, it’s the means that the leaders in congress use to generate a cash flow of contribution to their various campaigns and to their personal accounts.

“It’s one of the oldest and most effective forms of extortion: the protection racket,” he writes in one chapter. “Pay me money and I will promise not to make your life miserable. Fail to pay and bad things will happen to you.” This sounds like the syndicated crime “protection” game that has been the “bread and butter” of organized crime for centuries, but that “the Permanent Political Class in Washington now plays the protection racket, too. Failure to pay will not get you killed—but it could kill your business.”

Schweizer describes various maneuvers throughout his book sighting multiple examples to make his case that politicians engage in a form of legal extortion (they make the laws after all) to extract campaign contributions from business or other special interests. He identifies the colorful terms he uncovered that the politicians use for these maneuvers, such as “toll-booth” requirements, “milker bills,” “double-milker bills,” and “juicer bills.”

Each of these methods is designed for one purpose only to extort money from some group or industry.  The methods that the politicians use take many forms but two are easy to explain. The first involves past legislation such as Medicare and Medicaid where doctors are paid a certain amount for a particular service that they provide to their patents. The reimbursement over time becomes too low to provide the service so during budget negotiations the various committees in congress hold “Fund Raisers” for the various lobbyists representing doctors for the purpose of getting contributions so they can fight the opposition to raising the fees. Once they collect what they need they put in a one year fix so they can use the same ploy the next year.

The other method is to introduce a piece of legislation in a committee for some purpose, the purpose is not important but it will be designed to adversely affect some industry.   The members of the committee will then hold “Fund Raisers” where they invite that industries lobbyists and they tell them they need contribution to stop the legislation.  Even if the lobbyist knows they are being played, just like in the mafia protection racket, what choice do they have but to go along.  However, unlike the protection racket this is much worse as it is perfectly legal.

Although at first it’s hard to believe that this process could not be true, and what I just described is only the tip of the iceberg, but it all makes perfect sense when you think about it. The way the process in congress works would make no sense if what is described in this book were not true.

This book is a must read if you are interested in how and why congress actually works and it goes a long way to explaining why some bills are thousands of pages long. But don’t take my word buy the book and find out for yourself.

Feb 2 2014

Book Review, Reckless Endangerment


The Story of Affordable Housing

This book written by Gretchen Morgenson and Joshua Rosner and published in 2011 is about the housing bubble that caused the financial meltdown in the fall of 2008, how it was started and who was responsible. “The American people realize they’ve been robbed. They’re just not sure by whom,” write Gretchen Morgenson and Joshua Rosner in their superbly written book “Reckless Endangerment.”

Those that take the time to read this outstanding and well documented history of the financial crisis will understand when they are finished, exactly who created the meltdown of 2008 and how they did it. Morgenson and Rosner show us in great detail, “…what happens when Washington decides, in its infinite wisdom, that every living, breathing citizen should own a home.”

It’s now been over 5 years since the bubble burst in October 2008 and almost 3 years since this book was published so why write a review now?

The answer is simple we learned nothing from the experience and hence it likely that a similar situation will occur again, and in fact with the new financial regulations and laws made along with the Affordable Health Care act that is now being implemented there is an almost 100% certainty that a new and maybe even worse situation will occur. The reasons that I make this statement are an extrapolation from the concussions in this book and so further discussion is warranted. But the reader should definitely read this book

The story of this situation begins in the Carter administration and ends in the Obama administration a period of over 30 years and six presidents. Along the way there were multiple signs of the developing problem but no one cared neither the politicians, the financiers nor the public; since everyone was getting something out of this in essence Ponzi scheme. However since the situation started with the government the blame must be placed squarely on them for none of this would have happened if the politicians had not interfered in the housing market.

The issue to be fixed was the low home ownership rate of blacks; and it was assumed that this was the result of discrimination.  To a point it was but it wasn’t so much racially motivated as economic.  Back then it was required to have 20% down to buy a home and to be able to support the payments.  Those requirements meant you had to have saved some money or borrowed it from family (like my wife and I did) and have a steady job making enough that the banks could expect that you could make the monthly payments.  This policy did, in fact, discriminate against those that could not make these standards’ and since poor people could not and black were proportionally poorer their participation rate in home ownership was lower.

For some reason the politicians decided it would be easier to force the banks to make bad loans then get the poor people (blacks) jobs and this started the ball rolling.  Like all government programs they take time to be felt economically and the new “federal” rules on giving mortgages were no exception.  By the end of the Clinton administration all the payers were engaged and the end was inevitable.  The problem was that the banks were expected to have a certain percentage of mortgages given to blacks that were equivalent to whites and if they didn’t the federal government put pressure on them. The banks complied by lowering their standards and the government aided them by buying some of the issued mortgages in Freddy and Fanny. This relieved the banks of the potentially bad loans and now more blacks had homes.

Early in the first Bush term the congress continued to make changes to this system to make it easier and easier to get a loan.  By the start of Bush’s second term an entire industry wide system was in place to generate loans to people with no income and no down payment. How anyone in power thought this would ever work is beyond me.  The system that was developed and explained in detail in this book was that the bad loans were being generated to supply the investment banks with packages of mortgages that could be broken in to what they called tranches and sold as investment grade securities. The details can be found in the book. Now everyone was making money on giving loans that could never be paid back and the end happened in October 2008 as the investors and then the banks holding those bad securities began to fail.

All of this is well documented with names dates and places where all the bad decisions were made, no one escapes. Then after the dust settled a congressional review blamed in all on the Investment banks and proposed no stricter laws on them.  No mention was made on how this all started with affordable housing the federal governments interference in the housing market.  So the bottom line was the federal government interfered in the privet market, created a major problem, then blamed the private sector for doing this and then passed new laws that made them stop giving bad loans.

Now with the Affordable Health Care act that was sold on giving health insurance to poor people without jobs we are finding the exact same thing occurring taxes and fees and fines are in place that raise the cost to those that are paying for insurance to allow for those that can’t pay to have insurance.  Unfortunately the laws rules and regulations will do to the health care industry exactly what was done to the home mortgage market; and probably a lot quicker since this was a very comprehensive piece of legislation.

Read “Reckless Endangerment” and see what will happen to health care in a few years as the Affordable Health Care Act is implemented.

Feb 2 2014

Why have so few jobs been created especially since 2008?


Comparative Disadvantage

Over the past 30 years maybe even a bit longer there has been a steady and growing shift of manufacturing based jobs out of the country and into the Pacific Rim countries for example; Japan, Korea, Indonesia, India, Vietnam and China. We were told not to worry about this as those old obsolete factory jobs were being replaced by new service jobs in accounting, finance, health care, legal services and tech related development.  We were told that this was no different then when the United States shifted labor out of agriculture into manufacturing. Therefore don’t worry about it, things will work out and be even better.  We were told that this was called globalization and the free trade between nations was the way to prosperity for all.  And according to Adam Smith in his book The Wealth of Nations this was, in fact, true and was explained by the principle of comparative advantage which we must understand first before we can understand the opposite of disadvantage which is what we have.

Comparative advantage is a result of one group, or person, doing one thing very well and another group, or person, doing something else very well.  They then strike a bargain between them to trade some of each of their product or production to the other at some ratio that they both agree to.  The result of this is that both groups, and/or both people, have more then if they had tried to make or produce everything themselves, as in jack of all trades master of none. This is a key concept and for it to work properly there must be a “free” movement of goods and services between the two groups, or people, and no “interference” between the bargaining that sets the exchange ratio.  Meaning no outside influences like government and regulation which will always distort the process either some or a lot.

Today we find that the manufacturing jobs are gone but we also find that the service jobs are gone as well, in fact some of the service jobs left faster then the manufacturing jobs.  Try calling for any tech support or customer service and you will, in many cases, end up talking to someone in India.  Although it must be said that there has been some blowback on this as it was very hard to get someone to understand you. So what happened — what went wrong? Was it evil greedy business men looking to make a few cents more on a product because labor was cheaper someplace else?  Was it labor unions driving up the cost of labor?  Was in Health Care being to expense?  Was it Wall Street financiers finding ways to manipulate markets?  Was it the evil Oil companies ripping us off?

Actuality the answer is none of those! The question can be best answered by using a line from an old comic strip “Pogo” created by Walt Kelly from comments he first made in 1953 where he said, “We have met the Enemy and he is us!” So the answer is that we the citizens are the problem!

That is actually a parody of a message sent in 1813 from U.S. Navy Commodore Oliver Hazard Perry to General William Henry Harrison after the Battle of Lake Erie, stating, “We have met the enemy, and they are ours.” Kelly was a master of satire and parody and produced Pogo in syndicated form from 1949 to 1973 when he died from complications from diabetes. The strip was carried on by Kelly’s wife and son for two more years before it was stopped.

The reason that we the “Citizens” is the answer to why this happened is that we the “Citizens” let the politicians convince us that what was going on with globalization was OK and we should not worry.  We believed them even though it didn’t sound quite right to us. But they told us they were the “best and the brightest so we believed them. And there were some good times originally until the dot com bust and then 9/11 and Enron after that the cancer took hold with a vengeance and the jobs were soon almost all gone.  But there were signs early on like Billy Joel saw in his song Allen Town from a 1982 Album ‘The Nylon Curtain’.  Then there was the 1987 movie Wall Street Directed by Oliver Stone starting Michael Douglas, Charlie Sheen and Daryl Hannah, with its warnings about breaking up companies for profits.  And we can throw in Disclosure a 1994 movie also starting Michael Douglas which is about the games being played in Silicon Valley with all the production (a side issue) in Indonesia.

While the country was being dismembered one company and one job at a time we the Citizens were worried about all the really important things in life like; gay rights, abortion rights, civil rights, the environment, women’s rights, animal rights, handicapped peoples rights, emigration rights, affordable housing, breaking the glass ceiling, not offending anyone (Political Correctness), taking God out of everything, and not teaching anything of substance in our schools so that no one would feel bad because they couldn’t learn.  So today we have all those rights in spades but no jobs. Which was really more important?

Having lived through the 1980’s as a businessman in production related industries in a senior management position the effects of the political policies of the 1980’s were very apparent.  No one seemed to care about what was happening to business their focus was solely on all those issues listed in the previous paragraph which by the way is not a complete listing it’s just a sample.  But why would these social issues matter to businesses and job creation? And what does any of this have to do with comparative disadvantage?

First we need to discuss business and its purpose which is to make a profit so that the investors can be paid back for making their investment in time and/or money.  If a business can not make a profit that it can “keep” then the investors will either not invest or they will sell their position (at a loss) and the business will close. Therefore no business can stay in business without making a profit. So by simple extrapolation profits are good not bad.

They are the reward for doing a good job

The lack of them is the penalty for doing a bad job

So how does a business make a profit?  Well there is really only one way and that is to sell a product for more then what it costs to make the product and in addition cover all the costs of being in business.  A key point here that most people do not appreciate is that the only thing that matters to an investor is the net cash left after the deduction of all expenses; which includes production costs, operating costs and all business taxes.  So it’s easy to see that to have anything left over to pay the investors, the price of the product or service has to be greater then all the costs of providing that product or service, including taxes.

Anything that raises any part of the cost of doing business “must” be passed on to the consumer in the form of “higher” prices.  Even Adam Smith knew this, it’s in his book.

Therefore if society determines that businesses must include social costs as for example in complying with OSHA, EPA, NLRB rules and providing HEALTH CARE (a complete listing of rules and regulations would fill this entire paper) as well as property taxes and income taxes the costs of doing business are by definition driven up.  And therefore as the costs are driven up the businesses must raise their prices or go out of business. Their revenue must always be greater then their costs, to stay in business. Or one other is by government subsidies (additional revenue) but then the government needs higher taxes to do that. And the government also gets the right to participate in that business.

Now we get to comparative disadvantage for we in America do not have a closed society we allow others to sell goods and provide services in this country.  Discounting transportation cost which are minimized by huge cargo container ships we have goods coming into this country from countries that do not have the same social cost structure that companies here have.  American companies are therefore at a comparative disadvantage.  And to be honest the actual direct labor component, even with unions, maybe the smallest element in their high cost structure.

For example the hard push today to “Green Energy” which costs more to produce as any technical person will agree to.  According to the International Energy Agency (IEA) in 2005 the average cost of electricity in the United States was $.052 per kWh and in China it was $.032 per kWh. This is before the big push to renewable sources which will drive up the cost of electricity here even higher. For example, according to the U.S. Energy Information Administration (EIA) in their report of H.R. 2454 (the clean energy act) electric rates $ per kWh could easily double during the time frame of the report if that law was ever enacted.  If the business in China were paying on average only 55.2% of those of their U.S. competitors now, that is a major Comparative Advantage that they have.  Further it would seem that that advantage will get bigger as the EPA pushes to implement its clean energy agenda. This is being done through rules and regulation by the EPA even without the passage of any carbon reduction legislation being passed.

If we add to that all the other social costs of doing business here (we are not considering the social merit here only the costs) from say worker safety and pollution for example we quickly find that it would be almost impossible for any U.S. company to produce anything in our country that could not be produced and delivered here cheaper from a foreign source.  It does not require a degree in economics or finance to see that this is just not going to work. Common Sense alone tells us that the system our current leaders have put in, because we told them we wanted these social benefits, welfare programs and regulations, and this will continue to drive production related business out of this county.

Walt Kelly, “We have met the Enemy and he is us!”

However our politicians, although they gave us the rules and regulation we asked them for, didn’t explain to us the consequences of those rules and regulations as they became apparent. As we saw in the songs and movies of the 1980’s even the entertainment industry saw what was happening.  So why didn’t the politicians do something — well it was really very simple.  As the trade imbalance increased and cheap goods poured in, through Wall-Mart initially, the countries that were flooding the U.S. with cheap products elected to buy U.S. treasures bonds (T-Bills) rather then products and services that were too expense to buy from the U.S.

So what most of us would say?  Well as it turns out this is the most critical element of the predicament that we are now in.  Our elected officials being from the best schools and being very educated (that’s what they tell us and is the reason we are supposed to listen to them) knew what was happening but since the countries that were giving us the cheap goods were buying T-Bills the politicians had more money to play with and so to them having those extra funds meant they could pay for things that they otherwise could not provide (to us).  This made them look good and got them re-elected. And they could always blame the job losses on the evil businesses that just didn’t care.

There has been a lot of talk by economists that claim this is of no concern as eventually those countries will have to move out of T-Bills so it doesn’t matter.  Although technically that may be true in “economics,” in the real world its nothing but farm pollution.  For example we are told that foreign purchases of T-Bills hold down the rate of interest which is good.  True yes, but rather then use that low interest rate to build infrastructure and promote business investment we used it to finance our social programs. The problem with that was that the social transformations increased the cost of doing business which made the situation worse.

It was an absolutely perfect positive feed back situation working like this: as the foreign purchases increased the government had more funds to make social changes which then raised the cost of doing business, which drove more business out, which then resulted in more imports, which then result in more money for the government to play with. There was just no incentive to stop this from happening in the government; it would have stopped the money flow to them.

In addition as the businesses closed or moved operations out of the country there were both fewer businesses to pay taxes and fewer employees to pay them as a result.  So with fewer and fewer workers the tax burden per worker was forced higher and higher. Fewer workers meant the government needed to provide more services and therefore the government needed more funds and the resulting growing deficit was financed increasingly by foreigners.

In simple terms the foreign purchases of T-Bills represents the hidden social cost of U.S. policies compared to those in the rest of the world that is bringing us our products.

In the study of economics one quickly learns that in the “long run” most everything works out.  The artificially induced distortions by governments and rulers are never sustainable for very long.  Look what happened to the workers paradise the U.S.S.R. it only lasted 70 some years before collapsing. China lasted even a shorter time maybe only about 50 years before making a major change and letting a private sector develop there. Although to be fair they did see what happened to the Russians and so making a change was the only way to avoid a similar collapse for them. They did stay in power which was the really important part to them.

We can not by law or regulation overrule these three things: human nature, the laws of physics and engineering or the principles of economics.  An economics professor of mine one told us in class that the only thing any government can do is to create “shortages” or “surpluses” and he was 100% right.

We have the Department of Energy and a shortage of energy

We have the Department of Heath and Human Services and we have a surplus of poor

We have the Department of Labor and a shortage of jobs

We have the Federal Reserve and that has given us both a shortage of and a surplus of money.

Neither the shortage of energy nor the surplus of poor nor the shortage of jobs nor the swings in money existed as a major problem prior to the creation of these agencies.  Each of these government departments was created to fix a problem that at the time was a short term problem not a structural problem.  And each time this happened we lost a little bit of our Comparative Advantage for each of these changes added more rules and regulation that had to be followed.

So now these and many other government actions and social issues have eliminated most all of the Comparative Advantage that the U.S. once had.  The options for getting it back are slim to none unless we take drastic action — and very soon.

So where has this taken us then what have all these really smart and educated politicians given us with their politics?   Well it a very easy thing to answer — no jobs!  Americans want to work and take care of themselves and their families they don’t want some big government telling them what they can or can not do.  The Citizens can develop a feeling in them collectively when major shifts occur;.how this occurs is not the subject of this post but the facts are that the public, the Citizens, know that things are not right.  They may not know the details because they have been hidden but they do know that the country is in deep trouble.

One last comment in this post is that there is a fix for at least a part of this.  The process of other countries buying U.S. Treasurers in lieu of buy things here is the main reason we have lost so many jobs. In a free market this would not have happened but since there is no true free market we need some way to compensate for this.

There are two ways this could be done although neither would never be done, and it’s relatively simple.  The first method would be that Congress could pass a law that would state: Starting immediately U.S. Treasuries will no long be sold to anyone that is not a U.S. citizen or a U.S. corporation.  And if a Corporation then it must be at least three fourths’ owned by U.S. Citizens.  All Treasuries that are now held by non qualifying entities will be held to maturity but will not be refinanced.  This will force the money into product services or other non government equities of some kind.

This will raise the interest rate for government securities but that will only put the cost of this kind of borrowing in line with where it should be to begin with.   The effect of this will be to raise stock prices and force the government to be more realistic with its expenditures.  Obviously the change will be traumatic but it will be better then other alternatives as described elsewhere in the book.

The second method would be somewhat easier to implement but it would be just as confrontational.  This method is one of tariffs but not as we presently know or think of them; we add a different twist to them.  If we agree that the various social costs in the United States are in fact driving up business costs and if we agree that the corollary to that is many of the countries that import to us do not have those same costs then there is a way to fix this.

We would set up two tariffs the first being a Social tariff and the second an Environmental tariff.  A task force would be set up consisting of the countries Business and Unions but no politicians.  They would determine what those two non business (not related to producing the product or service) related costs are.  They would also look at the various countries that ship goods here and estimate what each of those counties costs are.  Once that has been accomplished a comparison can be developed between them and two tariffs established one for social costs and one for environmental costs.  A particular country could have none, one or both applied and they would be administered separately.

It would not be reasonable to implement something like this all at once and so it would be phased in over time, say ten years, at 10% of the total differential added each year.  Offsetting this would be an annual review of the tariffs such that if a country got worse of better vis-a-vis the United States the numbers would be adjusted up or down.  A system like this would force countries doing business with us to either clean up their countries or pay the penalty through the tariffs. Over time the comparative disadvantage would be reduced and that would allow some of the lost jobs to be brought back here. The offset to this is that the costs of goods would go up and that must be understood itf we are going to protect our jobs.

Neither of these solutions is desirable in themselves but the alternative of continuing the present system is much worse.  We must have jobs in this country commensurate with the abilities of the citizens and that means there must be a range of jobs available that encompass the full range from manual labor to university professors. Obviously those are the extremes and the bulk must fall in the middle such that the average person can hold a full time job that pays a decent rate.  If we as a society do not provide that then we have failed both as a society and as people.

Feb 1 2014

A Constitutional Republic


Our Form of Government

When the American Revolution started there had been a 500 year debate going on within political theorists that was having the effect of undermining the prevailing validity of the heredity based monarchies’ that predominated Europe and most of the rest of the world at that time.  Therefore western civilization was ripe for a change and that change came from the British colonies in America. Residing there was a group of very special men: Washington, Jefferson, Franklin, Adams, Madison, and Hamilton to name but a few of those that created this new system.

An interesting fact is that if we look at science and engineering for the period 50 years before and 50 years after 1776 we find that is the heart of the industrial revolution.  Mostly in England but also in the Americans we have the perfection of the steam engine, the flying shuttle loom, the crucible process for making steel, the small pox vaccine, the first machine tools, interchangeable parts, the battery and photography all being invented. From there things moved faster and faster resulting in the standard of living that we have today.

Since this was also the period of political economic and legal writing that included the likes of Adam Smith, William Blackstone, John Locke, Jean-Jacques Rousseau and Thomas Paine it is safe to say that we are today the result of these men and what they did during that period.

But back to politics and government to find out what was created after the end of the American Revolution with the signing of the Treaty of Paris on September 3, 1783.  A few years before that on March 1, 1781 the newly freed colonies begin operating under a loose form of government called the Articles of Confederation described in the first section of this book.

But there were problems with that form of government and so a few years later in 1786 a conventional was called to make changes as was allowed by the Articles of Confederation.  That quickly lead to the writing of the United States Constitution that we now have and that was ratified and put into effect on September 13, 1788.  By April of 1789 the elections had been held the 1st congress convened and Washington sown in as the first President.  The rest is history in the making.

We know most of that and most of us know a little about the form of government that we have but few know why we have what we have.  That is sad for the why is the important part, especially today when some wish to make changes to the form of government that we have that will basically make the Constitution we have an obsolete document.

We know from historical records that there was a significant debate between those wanting a relatively strong central government (Federalist) and a weak central government (Anti-Federalist).  The compromise that allowed for the ratification was the Bill of Rights which was the name given to the first ten amendments to the United States Constitution.  The purpose of these amendments was to ensure that the power (for the serious readers the Sovereignty) stayed as much as possible with the people and the states.

Most of the first eight years of the new government were taken up in forming the government and forming the operating procedures for how it would actually function.  There was little historical help to those that wrote the constitution and those that were elected to run it.  And since the system was specifically set up to be cumbersome in operation with all kinds of checks and balances this was not an easy task.  So why was our government set up to be hard to get things done?

To get that answer we need to look at the forms of government and what you know about them is not necessarily what the first impression is.  If we go back to Locke and Rousseau we see that the power resides in the people and that they, through the ‘social’ contract give some of that power to the government.  The purpose of this ‘social’ contract is primarily for the protection of the people.  But it’s also to set up a system of governance that gives the people the rules (statutory and common laws) that determine the legal basis of how society operates day to day and year to year.

We can see that if there is no government and therefore no law that all the power resides in the people and they are free to do anything that they want.  This is called anarchy.  If we move to the other end as in a monarchy we have the opposite with all the power resting in the Monarch (king, emperor etc).  The people here are subjects with no rights except those that the Monarch grants them.  Today we hear about the right and the left or communism or fascism as forms of government but they are all really the same thing.  Oh there are differences but the important thing is that they all have as their base a strong central government. Which makes them little different than the heretical monarchies that ruled the world for so long.  Different titles and different procedures with or without voting but they all had at their core a ‘ruling class’ that governed the country some with almost absolute power.

Historically most countries ended up with a group that supported the monarch since it would be impractical for one person to run an entire country.  These people ended up being the royalty with a whole range of titles to establish a pecking order.  But even that wasn’t enough to affectively rule as the size of the countries increased and so councils were formed mostly of educated but not always aristocrats mostly with blood lines to the crown, so to speak.  There were various names for these councils such as the parliament in England generally the rule makers served at the Monarchs’ pleasure and were called magistrates.

When the United States Constitution was being written the founders did not want to establish a system like existed elsewhere for they had just finished fighting a long war to get rid of that kind of system.  But what else was there?  Well that is why the work of Locke and Rousseau were so important.  This is not to say that many others didn’t contribute to the thinking of that time but only that these two gave a theoretical basis for a different form of government.

So the task that those attending the constitutional convention in 1787 faced was to come up with something that was not a monarchy and not anarchy.  Something in-between the two that would give the people soon to be called citizens their freedom but yet allow for the protection of the people through a federal government. To get a better understanding of this process one of the best books written is The Five Thousand Year Leapwritten by W. Cleon Skousen.  First published in 1981 and then again in 2009 by American Documents Publishing.

The system that was set up here was deigned to fall between anarchy and a monarchy and be anchored there with strong controls and limits on what power the various governments’ power centers had.  There were Local, County, State and Federal systems each with a defined and limited ability to make laws.  Further, since their biggest concern was the Federal system it was broken up into many sections to defuse the power for they knew that the tendency would be for power to concentrate and once that accrued the form of government they had set up would be lost.

The purpose for all the checks and balances and splits in power and states rights and individual rights and the electoral system of determining the president was to prevent the concentration of power in the federal government which would inevitably lead to the Citizens be turned once more into subjects.

John Adams, “Liberty cannot be preserved without a general knowledge among the people, who have … a right, an indisputable, unalienable, indefeasible, divine right to that most dreaded and envied kind of knowledge, I mean the character and conduct of their rulers.”

Feb 1 2014

Special Forces Creed


Americas Best

I am an American Special Forces Soldier!

I will do all that my nation requires of me.
I am a volunteer, knowing well the hazards of my profession.

I serve with the memory of those who have gone before me.
I pledge to uphold the honor and integrity of their legacy
in all that I am – in all that I do.

I am a warrior.
I will teach and fight whenever and wherever my nation requires.
I will strive always to excel in every art and artifice of war.

I know that I will be called upon to perform tasks in isolation,
far from familiar faces and voices.
With the help and guidance of my faith,
I will conquer my fears and succeed.

I will keep my mind and body clean, alert and strong.
I will maintain my arms and equipment in
an immaculate state befitting a Special Forces Soldier,
for this is my debt to those who depend upon me.

I will not fail those with whom I serve.
I will not bring shame upon myself or Special Forces.

I will never leave a fallen comrade.
I will never surrender though I am the last.
If I am taken, I pray that I have the strength
to defy my enemy.

I am a member of my Nation’s chosen soldiery,
I serve quietly, not seeking recognition or accolades.
My goal is to succeed in my mission – and live to succeed again.

De Oppresso Liber

Feb 1 2014

Book Review, The Big three in Economics


An Introduction to Economic

The Big three in Economics Adam Smith, Karl Marx and John Maynard Keynes is a book written by Mark Skousen, and is an excellent primer for those interested in economic theory. Although it is economics its written such that one doesn’t need a degree in it to get the points. Unfortunately, our politicians have used our lack of understanding of economics to miss lead us for their own nefarious purposes. There will be more posted here on economics, this is just the beginning.

There is a current movement of social change that has been put into play by those politicians wishing to make changes that will give them more power.  There is no other way to say this for it is and has always been that those that rule are never happy with some power that always want more.  This need for absolute power is not related to left or right political views both of these artificial categorizations want the same things each for themselves and only with a different twist.  This has always been the case since recorded history begins and from that we can assume before that to the beginning of mans rain on earth.

This drive for power and wealth is a fundamental aspect of our very nature and it can result in both good and bad if not properly channeled.  The problem arises when we allow those with the desire for power to manipulate the education system and change the way our children are taught.  This is easy to do if the Citizens are not vigilant and we have been asleep for a half century now.

Political Correctness (PC) and multiculturalism were the tools that were used and they have erased from our history the knowledge that allows us to be free.  The promise that was instilled in the young was that with more government and less private sector that all the people would be better off and have more.  We just need the government to make things fairer by asking those with more to share what they had with the rest of us.  What could possibly be wrong with that?

This Blog is not an economics text but never-the-less the basics must be understood if we are to discus government so based on the excellent book written by Mark Skousen The Big three in Economics Adam Smith, Karl Marx and John Maynard Keynes we will quickly introduce the reader to those three plus two others who have had a big impact on the way we view our world.

Skousen, a gifted writer, takes the reader through six phases of economic development starting with the man that started it all Adam Smith and ending with Milton Freidman (my interpretation of his work).  These six phases are the first six chapters in Skousen’s book:

One, Adam Smith declares an economic revolution in 1776
Two, From Smith to Marx: the rise and fall of Classical Economics
Three, Karl Marx leads a revolt against capitalism
Four, From Marx to Keynes: Scientific economics comes to age
Five, John Maynard Keyes: Capitalism faces its greatest challenge
Six, A turning point in twentieth century economics

The first period is the world’s first formal development of economics principles by Adam Smith where he declares that we will ALL be better off if we are free to produce and sell goods and services as we see fit. That competition in the market place will lower the prices and improve the products.  And that for this to work there must be honest transactions monitored by a fair and just legal system.  This can be boiled down to two principles being “natural liberty” and “laissez-faire.”

The second period is one where questions arise over Smith’s writings that result in the basic principles being questioned.  Smith did not develop equations and formulas his work was one of logical development based on empirical evidence.   Since this was the period of rapid industrialization in Europe and America there were dislocations that were occurring that appeared to disprove what Smith had developed.

The third period was that of Karl Marx and his view that all production belonged to Labor and that land and capital should placed in the collective for all to use.  Marx believed that the workers were being oppressed and that a new system would be developed based on the principles of Hegel’s Dialectic where a thesis caused an antithesis to develop and that lead to a synthesis (a new order).  Marx’s view was that his Communism was the new order.

The Fourth period was where Smith’s views were proved correct by many others when mathematics resolved some of the problems that had developed in Smith’s principles which until now were verbal descriptions not mathematical formulations.  This period ended in the thirties with the great depression.

The Fifth period was dominated by Keynes and his theories of deficit spending, no private savings and government intervention in the market place.  Keynes developed his theories in response to the great depression that was causing much hardship in Europe and America except for Germany and Russia which had turned to a powerful central government albeit for different reasons.  This economic growth under a strong government gave credibility to Keynes views.

The Sixth period is that which we are now in.  Additional work especially by Milton Freidman shows that Keynes was not correct in his views — his work was distorted by the events of those times when he lived which lead him to make assumption that have now proved to be false.  Then there was the fall of the communist states and/or their embracing free market principles in portions of their economies has proved that Marx was wrong as well.  So with both Marx and Keynes both disproved Smith’s views of a free market and laissez-faire were now proved to be true once more.

Skousen’s book was published in 2007 before the housing bubble burst and we elected a very socialist President in 2008.  Those in Washington today believe in Keynes or at least in his big government e.g. like in China.  This view is false as over the past several decades congress has passed legislation here in the United States to the point that our market was neither free in its conduct nor in interference from the federal government.  We therefore find ourselves once again in a period where the politicians that have wrecked the economy are telling us that they need more power to fix the problems.  Since they are the very ones that created the problems this transference of power to them must be avoided at all costs.