Tag Archives: Orwell’s “1984”

Mar 3 2014

What to do with the Russians?


But the real worry is what about the Chinese?

This president came into office just over 5 years ago with the “Stated” goal of making a “Fundamental” change to America.  Whether the American’s believed him or not he was going to do just that!  Progressives’ like Obama and his appointed minions believe that America is the problem in the world and that our large military scares everyone and that is why they do not like us. I would not agree with this proposition one bit, but but my opinion is irrelevant I’m not in politics either here nor there. However, that doesn’t mean I cannot understand what is going on in the world for I have studied the subject of global politics from both the military and civilian perspectives.

To the rest of the world what has Obama done? Well a partial listing follows: First a world apology tour for “us” being so bad; then he cancels the anti missile agreement with Poland, then he cancels the US manned space program, he does not negotiate a status of forces agreement in Iraq; he does nothing with the green movement in Iran; he begins to cancel DOD advanced weapons programs soon after assuming office; he encourages the Arab spring; he ignores Iran’s nuclear program for all practical purposes; he gives the impression that he does not like Israel; he proposes major reductions in US nuclear weapons; he announces that all American troops will be out of Afghanistan in 2014; he does nothing In Syria or prior to that in Georgia; he was AWOL after the Benghazi terrorist attack, he has his EPA continue to make regulation that start to close down major sections of the U.S. economy; then he announces that the U.S. military will be significantly reduced and more military programs are to be eliminated.

Foreign leaders with real world experience see a U.S. president with no experience dismantling the US military as fast as he can. They will obviously take advantage of this as real leaders always do.  So it’s no surprise that Putin is doing what he is doing which is to attempt to reestablish the old U.S.S.R. as there will be no military action against him; since the EC has no military and is dependent on Russian e.g. Putin, for their natural gas so there really is nothing that they can do other than complain.

The real issue is not Russia reassembling its empire but what will China do?  The logical thing for them is to see how the world acts or doesn’t act to the absorption of at minimum the eastern Ukraine into Russia.  If Putin gets away with this and its hard to see how he will not given the box that Obama has put himself in, unfortunately along with the rest of the country, they will likely make a similar move in their sphere of influence with those disputed islands with Japan or maybe even a much bigger target Taiwan.

The American Eagle has clipped wings and can no longer fly.

Feb 28 2014
Image

Tribute to those that Serve!


PassingtheColors

Feb 20 2014

Does God have a Place in Government?


The Founders Believed that it was Required

We have been conditioned today into believing that in the United States of America there is a wall between the church and the government — “The Separation of Church and State” — as it is now called.  Further we are told that this comes from our founding documents so it must be true — but is it? In searching those documents we find that those words or any derivation of them do not appear in any of the founding documents. But we also know that the use of the words God or the Creator (used inter-changeably here) and a fundamental belief in God was very important to the founders and that they reference God a lot in their writing and God was very prominent in all the public buildings; Federal, State and Local until after World War II. So how did we get from a nation founded on the belief in God to a secular state that can’t even acknowledging the existence of God?

Much, but not all, of this change can be traced to the American Civil Liberties Union (ACLU) and its influence on the legal system up to and including the U.S. Supreme Court.  The ACLU was founded by Crystal Eastman, Roger Baldwin and Walter Nelles (an interesting fact is that Nelles has ties to what becomes the infamous ‘Students for a Democratic Society’  from the 60’s) who were all avid socialists and in all probability, communists at heart, if not in practice.  It could be said that they used their beliefs in what is called social justice today, to destroy the influence of religion since religion was deemed to be bad by Karl Marx, the founder of the principles of communism and the precursor of modern socialism.  Since the communist movement was very strong when these three were growing up this is a likely connection. Why else would so many of the court cases promoted by the ACLU be used to drive a wedge between the religious people of this country and their government; especially in the public schools of the country? The result is that ever since shortly after the end of WW II, we have been moving away from God.  God is no longer “fashionable”.

By what logic could this transformation be done? There must have been something that those wishing to change the American System found to give them an opportunity to make the change they desired. And there was; in a letter written by Thomas Jefferson in 1802 to a Baptist Association he wrote: “… I contemplate with sovereign reverence that act of the whole American people which declared that their legislature should ‘make no law respecting an establishment of religion, or prohibiting the free exercise thereof,’ thus building a wall of separation between Church & State.” Jefferson reflected his frequently as a speaking theme that the government is not to interfere with religion.

Jefferson in his misused reference was of course referring to the national or federal government which was proscribed in the First Amendment to not interfere with religion and specifically not establish a “state” religion.  This Amendment, part of the ‘Bill-of Rights,’ was written to keep the federal government out of the states and local communities where they, the local government could do as they pleased.  Meaning the people there could have their local government participate in religious activities without being dictated to, one way or the other, by the federal government.  Since for almost 200 years this principle held and the federal government used religion itself although non denominational it is hard to see how this has been turned around to what we have today.  We are constantly hearing how some religious item such as the Ten Commandments are being removed from public buildings as being offensive to the citizens. How did they get there then and be there for so long? Further if the founding fathers didn’t agree with how this issue was handled in the first few decades of the republic they would have changed something; since they did not this is prima fascia evidence that the ‘new’ interpretation is false.

However, with the ACLU now in full get religion out of the government mode they used Jefferson’s comments, out of context, to argue a case at United States Supreme Court and they were successful in 1947 by a 5 to 4 ruling in the Everson vs Board of Education case in stopping a state from using public funds for transporting student to a faith based school. The result of this ruling is directly responsibly for all that followed.

This view is absurd on face — since we know that in political theory the belief in a Supreme Being was a major requirement to have a viable Democratic Republic. This view is in all the political writing of the eighteenth century and very clearly stated by those writers for example Adam Smith and John Lock since only a moral (religious) people could vote for representatives to their legislative bodies and end up having representatives that were moral. In most societies dating back to earliest recorded history, people got their sense of morality from religion.  Therefore, if we did not have morality in public life, the representatives we elect would become corrupt and the government would become oppressive.  We see this corruption happening now in our country and it is my opinion that this is a direct result of removing God from the public conscious and in fact making belief in any God a target for ridicule and cheap humor by politicians and certainly those in the media and entertainment industry.

So, that gives us the basis for the rest of this discussion on God and Government and why the two cannot be separated in the sense that it now is; that is if we are to continue to remain a free people.

At the core, there are only two kinds of governments.  The first is based on the existence of a “creator”, or prime mover.    The second is purely secular and proposes a “random spontaneous life” argument. Monarchies, democracies, republics and dictatorships, free markets, communism and fascism all have their roots in one of these systems.  But first we need to understand the basis for where the law used to govern us originates.

After reading many books and other material on government: John Lock, Adman Smith, Benjamin Franklin, Thomas Pain, Thomas Hobbes, Charles-Louis Montesquieu and Jean-Jacques Rousseau to name a few, we find that some basic principles as to God and Government can be developed.  I have drawn my conclusions and beliefs from these writings and present my interpretation below. However, any mistakes in interpreting their views are entirely of my own invention.  Due to time and space restrictions, I have regrettably omitted many others philosophers and scholars that have contributed over centuries to the principle views held during the eighteenth century when our country was founded.  I mean them no disrespect and it’s only my late coming to this subject that prevents me from a more complete listing.

The first form of government is that which is based on natural law and natural law is that which man can see in nature, though the use of reason, because the Creator, God, put it there when he created the universe.  Man in the state of nature (meaning there is no government) is sovereign in himself; in that he has made no oath to serve another man nor entered into any compact to share that power so he alone can control what he does or does not do.  This is what gives the meaning to the sovereign which is simply put that there is no law above the person that has the sovereign. Therefore this man in nature has the sovereign power and it must come directly from God.  He is his own master free to do as he pleases within the framework of what the creator made available to him.

In this state of nature with no government all men are therefore equal and they control their own lives, what they do or don’t do. They do everything they do in the belief that it is in their self interest to provide for their existence (food, water, shelter etc).  But men soon found that two could do more than one and three more than two and so they would share the fruits of their combined labor in some agreed upon manner.  This might work for one or two or even three men but in a larger group of men, who would decide on the division of labor and division of the fruits of their labors?  In all probability the strongest and/or the smartest would get the others to cede power and authority.

At that point what is called a ‘social contract’ was formed, and since protection would be one of the primary goals of this contract, that was typically the reason that this person was given the right of leadership.  In so doing, individuals had effectively transferred their sovereign to that leader and he now held ‘only’ what they had given him by consent.  By the early eighteenth century it was thought that once the sovereign was given to a leader, it stayed with that leader or his heirs permanently.  However starting with the Magna Carta and solidifying in the mid 18th century other ideas became prominent and they were very different.  The new belief was that if those that made the laws (called the magistrates) did not serve the people, then the people had the right to take back the sovereign power and form a new government. The historical logic and writing of this is a bit more complex than what I present here but in general that is the core principle. The US War of Independence and French Revolution, although very different, are prime examples.

From this line of thought comes our Declaration of Independence and the first two paragraphs are shown next.  I have added bold to the key provisions.

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

What follows next in the Declaration is a listing of the grievances which aren’t necessary for this discussion, and so we skip to the last paragraph.

We, therefore, the Representatives of the United States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

From this we can state the following, in the Creator based form of governance:

ONE. There is a Creator — a God that created the universe and all that is in it.

TWO. The Creator gives us our rights through natural law, such as: the right to life, liberty and property. These rights being God given cannot be taken away.

THREE. We cede the administration of those rights by our government in return for the government’s agreement to protect us and insure equal justice.

FOUR. The agreement between the People and the government is the social contract and in our case is embodied in the Constitution.

FIVE. The proof of the above is in the oath of office of elected office holders and military personnel, especially the officer corps.  They swear an oath to defend the Constitution, not the government.

SIX. Therefore the sovereign that the people possess resides not in the government but in the Constitution itself.

SEVEN. The People cannot give the government what they did not have and so a government based on the sovereign given by the people cannot do anything that the people did not specifically give the government or that they had in their power to give.

EIGHT. The Constitution can only be changed by the process defined within it and so since a procedure for change is contained in the document there can be no justification for interpreting in anyway other than the way it was originally written.  It is a living document.  However, only the people can change it, not the legislators the executives or the judges. A Constitutional change can be made by a 2/3’s vote of approval of the various States so the people can change their government any time if they desire.

NINE. If a politician does not follow his oath to defend the Constitution and in fact states that he believes that it is no longer valid, he has broken his oath and must be removed from office.  The procedure for doing this is impeachment.

TEN. If the government does not follow the guidelines of the Constitution it is the duty of the citizens either to elect new representatives or to form a new government.

This then is the basis of our form of government which is called a Federal Republic or sometimes a Constitutional Republic.  We are a federation of states with elected representatives and they govern based on the limits of power we have given them as defined in the Constitution and Bill of Rights.  It was assumed that those elected would be believers in God, primarily Christians of any of the various denominations.  Since the country was founded on Judeo-Christian principles for a Judeo-Christian people, The Constitution as written would only work for a society with those values.  If the People’s beliefs have changed then the form of the government would have to change as well — this would be a fundamental change.

The other form of government is very different. This form is not based on a belief in God but is purely secular in nature. This is not to say that the people don’t have religion, only that it plays no part in their government.  In this form the sovereign resides in the government and how it got there matters not.  There may be elections and there may not be, but one thing is common and that is that there is a “ruling class” and a “class that is ruled”.  Those in power come from the historical vestiges of wars, revolutions, dynasties, feudal societies or wealth.  The common man may or may not live reasonably well but he is the common man and a change in class status is uncommon and unlikely.

Typically in these governments the documents that form the government are not fixed nor are they based on natural law.  This means that those that rule can change anything they desire for any reason they desire.  They can do this because there are no real limits placed on them as might exist in a true Constitutional government.  Their usual oaths of office are to swear allegiance to the primary ruler; be it a King, Queen, Emperor or Party Leader.  You can see that if an oath is given to the ruler then there is no recourse available if that leader turns bad.  An oath is an oath and must be honored.

In this form of government the people have no real power, the rulers are hand picked from among those in the ruling class and the government appoints a much higher percentage of the workers in the legislative branches and local administrators in the various functions of government.  This is not to say that these people are oppressed or without any benefits, for that is not the case in most governments today.  But the amount of true freedom they have depends on the exact form of their government which can be a social democracy an aristocratic democracy and or one of the other forms such as would be found in a communist state or even a monarchy or a dictatorship.  Outside the United States this is the form most other people live under.

In any event, they have no God given rights of any kind, only those rights that the state and its ruler allows them to have; today meaning ‘Positive Rights’ as exposed by our current president. These forms of government are not stable.  They may last for a hundred years but few last much longer without some form of revolution or civil war that changes the form of that government. Some would say that we had a civil war so why are we different?

The difference is that the issue of slavery was put aside initially to gain freedom from the British Crown.  Because slavery, which was common in the world, (in fact the word Slave comes from Slav, due to the fact that in the Middle Ages a vast number of Europeans were regularly taken into slavery by raiding Ottomans’ and Arabs and carted off to Africa and the Middle East) was an anathema to a system based on freedom, there was considerable opposition to it that needed to be resolved before the new country could move forward. This was largely resolved by the Civil War, although cultural artifacts remained for years afterward.  Further, the essential form of our government did not change.

From this we can state the following in the Secular form of governance:

ONE. There may or may not be a Creator, but whether there is or not is not material to the governance of man.

TWO. Once a government is formed by a people, that government has ‘all’ the sovereign power and can make any laws that it choices to.

THREE. Therefore there is no ‘real’ limit to the power of this form of government.

Four. Whether there is a founding document or not is not relevant in this form of government since the government has the absolute sovereign which can not be taken back other than by a revolution.

Five. All the rights of the people come from the government and are only what it allows them to have.

SIX. In most if not all cases the public servants swear an oath to the head of the government not to their founding documents.

SEVEN. Further, since there is no direct link to a creator there are no natural laws and without natural laws there are no fixed morals.  This is called moral relativism.

EIGHT. Without a moral base there is no way to measure good or evil and without a way to measure good and evil a leader or ruler can justify any action they desire in that it is only his opinion as to what is good for the country that counts.

NINE. The lack of a frame of reference for the morals of the people in this form of government mean that at some point the government will become oppressive.

TEN. In these kinds of governments there is strong trend to a state of minimum personal freedom.

So in summary, we have the first model of governance which allocates power in this order: God, the individual, then government. We have a second model, Secular Governance, which allocates power first to the government then to the individual.  In the first form God is the primary source of power and in the second form the government is the primary source of power.  Since we know from thousands of years of history that men can be corrupted, and they often are, why would anyone want a government based solely on the wishes of what a man would want?

Some would say today that we are an enlightened people now and the old ways of the founders and the restraints of our constitution are no loner needed.  To them I say they are wrong.  History has repeated itself many times with great republics formed and then lost to the corruption of men and their government.  There can be no rational basis for this belief other than one of our ignorance of history.

We can either believe in the ways of Christ, which were non violent in the New Testament and can be summed up in the statement, “Do onto others as you would have them do unto you” or you can have a belief that men can make better rules of living and behavior then those of nature’s Creator.  You can either believe in God or believe in man as the source of understanding, but not both.

The Founders believed in a Christian God as found in our Bible.  The government they established was one that had those beliefs at its core.  Being men we are not perfect and so neither was our conduct neither in the formation of the country nor in the application of our government.  However, despite our faults and misdirection in our Constitution we formed the best system yet devised by man.  And, during the debate on the form of that document, a major impasse came to be with arguments back and forth and hard positions being taken.   With no compromises possible Benjamin Franklin proposed that they all pray to God for guidance.  They all went to a nearby church and did as he suggested.  Coming back the mood was completely changed and compromises to the things that separated them were found.  In short order thereafter we had the Constitution; so was this the work of God or do we want to believe that it was pure chance?  Given the results of what that divinely inspired document produced, at least until now, it is clear that we were destined to be a force of good in the world — the Beacon of Freedom that all looked to for guidance.  We do not need to be fundamentally changed.

Ronald Reagan, “You and I have a rendezvous with destiny. We will preserve for our children this, the last best hope of man on earth, or we will sentence them to take the first step into a thousand years of darkness. If we fail, at least let our children and our children’s children say of us we justified our brief moment here. We did all that could be done.”

Feb 20 2014

Justification of a Modern Government


From Aquinas to Rousseau

This is a very brief summary of the basis of our government and in my opinion this process started in earnest between 1259 and 1264 in Paris France when St. Thomas Aquinas (1225 -1274) wrote Summa Contra Gentiles (The Summa Against the Gentiles) which is considered to be a seminal work perhaps the best of the middle ages.  In this work he blends the then newly discovered works of Plato and Aristotle, which had been lost to Europe since the fall of Rome, along with Roman law and the teachings of Christianity into one work. There is no doubt that he was a man of very high intellect and even today, 750 years later, his work should be read by anyone interested in the foundations of and the justifications of law and government.

He left no stone un-turned discussing theology, ethics, politics, just war, sexual ethics including birth control and abortion and even property rights.  Although many of us today would take exception with some of his views we can all agree that his writing on the subject set the tone for what was to follow between then and July 4, 1776 over 500 years later.

This blog is not about historical political theory so we’ll skip forward almost 400 years and look at three great thinkers that shaped the modern state. First to Thomas Hobbes (1588 – 1679) and his LEVIATHAN, or The Matter, Forme, & Power of a COMMON-WEALTH Ecclesiastical and Civil Published in 1651.

Then John Locke (1632 – 1704) and his Essays on the Law of Nature (1663-64); An Essay Concerning Human Understanding (1671- 90) and The Two Treatises of Government in the former, The False Principles and Foundation of Sir Robert Filmer and his Followers, are Detected and Overthrown The later Is an Easy Concerning the True Original, Extent, and End, of Civil Government (1689).

Then finally to Jean-Jacques Rousseau (1712 – 1778) who is best known for his Discourse on Inequality (1755); Discourse on Political Economy (1755) and On Social Contract (1762).  The writings of these men are instrumental to the logic and basis for the writing of the Constitution of the United States.

Hobbes wrote in Leviathan his support of a constitutional monarchy and that it was the natural order to have a strong authoritarian monarchy. He proposed that man had agreed to this in a ‘social contract’ wherein man acknowledged the monarchy in return for the protection that gave him.  This view was based on the premise that without a strong government man would be no more then a lone individual living by his own wits and subject to no law or rule; therefore he could do solely as he pleased.  He called this being in the state of nature.  The following quote from Leviathan “Chapter XIII.: Of the Natural Condition of Mankind As Concerning Their Felicity, and Misery” is one of the best known passages in English philosophy; it describes the ‘natural state’ that mankind would be in, were it not for the political community.

“In such condition, there is no place for industry; because the fruit thereof is uncertain: and consequently no culture of the earth; no navigation, nor use of the commodities that may be imported by sea; no commodious building; no instruments of moving, and removing, such things as require much force; no knowledge of the face of the earth; no account of time; no arts; no letters; no society; and which is worst of all, continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short.”

So according to Hobbes:

In this state, people fear death, and lack the things necessary to commodious living, and the hope of being able to work to obtain them. Therefore, man accedes to a ‘social contract’ and establishes a civil society to avoid this.

Society is a population living beneath a sovereign authority, to which all individuals in that society cede some of their rights for the sake of protection. Abuses of power by this authority are to be accepted without question as the price of peace. There is no separation of powers in this view as we know them.

The sovereign must have total control over civil, military, judicial and ecclesiastical powers.

Locke writing twenty or so years after Hobbes came to a very different view developing what would be called today a liberal republicanism and a foundation for a republic.  He was probably the biggest although not the only political theorist to influence those that wrote the U.S. Constitution.

Locke takes a more optimistic view then Hobbes writing that in the state of nature man is characterized by reason and tolerance not always brute force as could be inferred from Hobbes. However he also believed in the social contract between men and their government but in a more limited sense where the government had a responsibility to the subjects and that if exceeded actually gave the subjects the right to rebel.  Locke went on to state that in a natural state all were equal and independent and they all had a right to defend themselves.  This was the basis for the words in the 1776 American Declaration of Independence, “life Liberty, and the pursuit of happiness” in the preamble.

Locke believed in the right to private property; the accumulation of wealth (qualified); and in the principle that labor was the basis of property.  He also developed the principles of money and monetary policy and the relationship to trade.  His views on money probably had an influence on Adam Smith and his seminal work The Wealth of Nations published in 1776.

Lock also wrote that education was very important stating that, “I think I may say that of all the men we meet with, nine parts of ten are what they are, good or evil, useful or not, by their education.”  In that same line of thought Locke wrote that “the little and almost insensible impressions on our tender infancies have a very important and lasting consequences” then he argued that “associations of ideas” that one makes when young are more important than those made later because they are the foundation of the self.”

One other thing that Locke believed in was ‘religious’ freedom and equal rights.  Further Thomas Jefferson used Locke views when he wrote a bill for religious freedom in Virginia.  Locke like Hobbes believed in Natural Law which was the belief that there were moral principles that were set by nature (God) and were therefore valid every where.  Natural law is not to be confused with common law or case law which are laws which are not universal and are based on ‘local’ judicial recognition.

One of Locke’s more controversial ideas was that because of the ‘social contract’  between the people and the governing body the legislative branch of government that if those representatives went against the wishes of the people that the people had the ‘right’ to rebel against their government.  What is new about this is the right of the people to withdraw from the ‘social contract.’ However, Locke did not take this to go as far as overthrowing the monarch unless that monarch had broken is obligation to defend the country.

Rousseau is the developer of the liberal democracy principles which is a third way of looking at the ‘social contract’ and ‘natural law.’  Rousseau born in Geneva which was a Republic had a different view and took what Lock had developed and went further eliminating the monarchy at least in part.  Rousseau published his The Social Contract in 1762 fourteen years before the American Declaration of Independence. The work begins with, “Man is or was born free, and he is everywhere in chains, One man thinks himself the master or others, but remains more of a slave than they.”

Rousseau argues that the sovereignty (or the power to make laws) should be in the hands of the people. The terms he used then are different today but what he said was that the power to make laws rested in the people and the people allowed the legislators (that represented them) to make the laws.  This would be a true Representative Democracy but Rousseau stated that this system would only work in a small city state like the Geneva he grew up in.

Rousseau also wrote, “…that the general will exists to protect individuals against the mass, not to require them to be sacrificed to it.” This was a recognition that a pure democracy would not work.

Rousseau was one of the first to propose developmental education dividing the process into three stages.  The first stage is from birth to the age of about 12 when Children are guided by the emotions and impulses.  In the second stage from 12 to about 16 reason starts to develop.  Lastly from 16 onward the child develops into an adult and should also be required to learn a manual skill even if high education is pursued. He also states that at the age of 16 they are ready for a companion of the opposite sex.

An explanation of terms due to language change:

The ruler of a territory could be the Monarch the Prince or today the President

The legislative body could be an Assembly the Magistrate or a Delegate today a representative or senator

Democracy is where all eligible voters vote directly on all issues

Representative government is where the people elect a person to represent them on legislative maters

Feb 18 2014

Unintended Consequences


Politicians should never make technical decisions

It has been very popular for many intellectuals to adopt the view of Malthus that the planet’s resources are limited and that there are way to many people on the planet.  A good portion of the environmental movement is also based on these same views.  Unfortunately most of these “intellectuals” and “do gooders” are not knowledgeable in the science and engineering that relate to energy production and development. What we do know is that the generation and control of large amounts of cheap energy is critical to maintaining a high standard of living.  We also know that when the need for large families is eliminated that the people will have fewer children.

The solution therefore is to raise the standard of living which then results in fewer children being born.  How many people the planet will support is unknown for it depends on the technology we have and how much energy we can control.  If we assume that the politicians want the citizens to lead happy and productive lives (which is not certain) then we know the only way that can be done is through having cheap and abundant energy available.  This is the opposite of the current directions of those in positions of power mostly because they do not have the education, intelligence or the vision to see the real solutions.  Most of them operate on a zero sum game where it’s all about the distribution of the pie not the making the pie bigger.

What we do know is that if zealots are left unchecked and the environmentalists are zealots then they will destroy civilization.  For example, the banning of the incandescent light bulb in the United States starting with 100 watt incandescent lamps in January of 2012.  The replacement lamps for now appear to be mostly compact florescent lamps (CFL) which produce more light per watt of electricity. LED lamps are the same with slightly different numbers. This is being done for only one reason and that is to use less energy.  But is what is being said about less energy a true fact, well let’s find out.

A 100 watt incandescent lamp will produce when turned on 90 watts of heat and 10 watts of light. A 100 watt CFL replacement lamp will produce when turned on 50 watts of heat and 50 watts of light.  These numbers are not the actual numbers but they are reasonable estimates used for discussion purposes.  So we can say that for every five incandescent lamps we only need one CFL lamp.   So lets say we have 10 incandescent lamps and we replace them with 2 CFL’s that reduces the electric load from 1,000 watts (10 x 100) to 200 watts (2 X 100) and we save money.

Maybe, maybe not those 10 100 watt lamps that we replaced were helping to heat your home in the winter.  When they were replaced by the 2 100 watt CFL’s we removed 800 watts of heat which is where all the energy that the incandescent lamps used went.  They are hot to touch remember.  The difference between the two types 800 watts will need to be made up for by the furnace in the winter so depending on the rate one pays for power you could be spending more for the heating then you were saving from the electricity.

In general the addition cost of heating in the North could be higher then the savings if air conditioning is not used. And in some cases the higher cost of the lamps even with the offsetting longer life and with air could make this a bad investment.  In the south with little heating the CFL’s would save money especially with the reduced air conditioning load.  The point to this is that the savings will not be as advertised. And if it isn’t did it really make sense to shift 100% of lighting manufacturing to China along with all the jobs.

In Summary

National policy should be determined through independent private sector research and development, and outside the political system to include funding.

If Governmental is involved it should be used only to recommend general policy and never to actually provide any services.

Business should be responsible for all goods and services

Costs should be allocated as closely to the user as is practical

Feb 14 2014

The American Dream


In danger of being eliminated

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 they always want more.  Machiavelli’s the Prince is probably the best book on that subject ever written. 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), Multiculturalism, Class Warfare and the cradle to grave welfare state are  the tools that are being used and they have erased from our history the knowledge of all that allows us to be free, which is knowledge.  The promise that was instilled in the young was that with just a little 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?

Much of what is being put in place in America now is being allowed because of the way the last two or three generation we taught. Few today much young than 50 would not be able to have even a basic discussion on limited government and big government and on central planning and free markets. This post is not and cannot be 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 my 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 one others who has 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 Keynes: 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 in his work.

The third period was that of Karl Marx and his view that all production belonged to Labor and that land and capital should be 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 or minimal 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 enduring.  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 free neither 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.

Unfortunately, Economics is a complex subject and the politicians depend on that to keep the public misinformed.  Six books that go a long way to showing where the problems lie are now listed. But keep in mind that a full study of the issue would take much more then just these few books.

A Monetary History of the United States, 1867 – 1960 by Milton Friedman and Anna Jacobson Schwartz published in 1963. One section in the monumental book shows how the newly created FED caused the Great Depression.

Free to Choose, Milton & Rose Friedman first published in 1979. Milton and Rose Show how the welfare state cannot exist in the long run, indirectly it explains the collapse of the old Russian U.S.S.R. ten years after the book was published.

The Five Thousand Year Leap, by W. Cleon Skousen first published in 198, an excellent book on political philosophy written for those without a degree in this subject showing how things are not what we may think they are..

The Ruling Class, By Angelo M. Codevilla published in 2010, excellent contemporary book explaining the current push in American to set up a Ruling Class.

Reckless Endangerment by Gretchen Morgenson and Joshua Rosner published in 2011, Very well document analysis of the 2008 house bubble collapse and what caused it — and it was not the banks it was the US Congress aided and abetted by the FED.

Extortion, by Peter Schweizer published in 2013, an absolutely devastating description of the rampant corruption in the US Government.  The founding fathers are turning over in their graves right now and I would not be surprised to see them come back to get rid of the entire crop of obscenity that now resides in Washing DC.

There are a few other books that would help the argument but they get technically complicated and so the last two are enough I think.  The line of though developed here is that we started with a Constitutional Republic without universal suffrage and the purpose of that was to place “strong” limits on the federal government.  Those limits we needed because of the failing of human nature and that if they were not here a ruling class with arise and the republic would be gone.

This is done by legislation which gives us a large bureaucracy with has the power to write regulations, create rules, make fines for non compliance and set up permits for almost everything. All this is done for our benefit of course but every one of those things takes away a bit of our personal freedom and at some point, not far off now, the freedom is all gone.

Feb 13 2014

Free Market or Central Planning?


No Justification for a Ruling Class

The justification for having or for creating a ‘ruling’ class be it secular (wealth) or an aristocracy (heredity), as it has been historically called is that this class of people are very intelligent (the best families) and well educated (only the best schools) so they should, by their very nature, be given the right to make the economic and political decisions for us.  They can do this because besides those qualifications they have the time and inclination since they come from wealthy families and have no need to work for pay like the rest of us do.  Aristotle, Socrates and Plato wrote about how to get these people the proper education and motivation so they would become good rulers; and much of political philosophy ever since has been devoted to this concept.  So we are lead to believe under these assumptions, proper education and motivation, that this group of people will do what is good for the country and the Citizens even if it is not in their best interest.  This is what is really believed, believe it or not.

That last part, in particular, is a bit much to believe as everyone always does what is in their own best interest but for now we’ll ignore that part and go to the heart of the argument which is that its their intelligence and education that make them so qualified to legislate and run the country.  Because we have the Constitution and there is technically no ruling class they, those that lust for power, are handicapped and they will try to establish themselves here by other means. Those are though legislation and regulations that will be enacted to control business to prevent those businesses from doing things that would not be good for the Citizens.  On the surface this sounds reasonable however the reality is that is will give them the control of those businesses and allow those in power to accumulate wealth as written about in Peter Schweizer’s 2013 book Extortion..

Implicit in this argument, that the government needs to protect the citizens, is the principle that the Citizens, being of lesser intelligence and not as well educated, do not know what is good for them. For example recent legislation in California that bans ‘Happy Meals’ because the parents are not smart enough to know that their kids can’t actually live only on ‘Happy Meals.’

Well let’s look at this and see if it makes any sense that a select group of people could run the country better then the Citizens could.  There are 435 Representatives in the House of Representatives and there are 100 Senators in the Senate for a total of 535 elected representatives.  Then we have the President and the Vice President and his appointed Cabinet of advisors numbering 15 for a total of 17.  Lastly we have the 9 U.S. Supreme Court justices.  Granted that these are not all elected positions but they can logically be said to be the ‘head’ of the Federal Government and the group that sets the policy of the country.  This group totals 561 people. We could add the Obama administration appointed Czars and their staff’s here if we knew who they all were, but we don’t so we’ll skip them in this analysis.

Now each in that group has a core around them let’s say a couple of dozen key staffers so 561 times 24 equals 13,464 people that are the ones running the country, could be a bit more could be a bit less but it’s a reasonable guess.  It is this group of super intelligent and well educated people that we are told should be running the country.  Today under this administration this group is comprised of mostly by progressives and they believe they will be able to make all the decisions for us and thereby we will all be better off.  For reference we will say this group of leaders has an average IQ of 150.

Now there does seem to be some logic here for we do want the best and the brightest right, but is the logic valid?

The country today, that this group of 13,464 is to manage, is in round numbers almost 320,000,000 citizens. But some of those are children and some are retired and in nursing homes so their economic activity is limited.  Let’s say that 68% of the population is economically active so that gives us ~217,000,000 citizens and they will have by definition an average IQ of 100.

Now we have the basis for the rulers and the number of subjects to be ruled. Let’s make this into a computer problem of solving an economic problem.  We can define that problem as how fast can we analyze a block of data, in this case the GDP of the country which is just under $16.0 trillion dollars (2009 dollars) today, 2013. We can then say that we need to process 16.0 trillion bits of information to give us a result.  But let’s break it down into a more reasonable number by dividing it by the number of days in a year, 365.25 days; to give us how much must be processed each day. And that would be $43.8 Billion bits of information per day that represent everything we do each day (actually the number is much greater but will use this for sake of discussion).

So now we have our problem which can be thought of as analyzing a distributed network of multiple computers and how fast can they solve a problem.

So we take our elite group of 13,464 top government officials and say they are 13,464 CPU’s running at 150 Hz (150 times a second) Then we take our 217,000,000 Citizens and say they are 217 million CPU’s running at 100 Hz (100 times a second).  The question is can the 13,464 CPU’s at 150 Hz process 43,800,000,000 bits of data faster then 217,000,000 CPU’s running at 100 Hz.  But let’s be fair and say that this elite group because of their education is faster by a factor of two.

That then gives us the government on the one end with the ability to process 43,800,000,000 data points divided by 4,039,200 (13,464 times 2 times 150 = 4,039,200) which is 10,844 seconds or 3.0 hours. Not bad!

On the other end we have the Citizens with the ability to process 43,800,000,000 data points divided by 21,700,000,000 (217,000,000 times 1 times 100 = 21,700,000,000) which is only 2.0 seconds which is 5,364 times faster and therefore is significantly better the first group.

Clearly the Citizens are significantly faster and therefore better at processing economics data.  Further the Citizens at their level are the ones directly involved in the transactions unlike the government which is removed from the actual transactions by several orders of magnitude.  That means that there are significant time delays and processing errors that can not be avoided so the government is working with “faulty” information and working on a solution to a problem that existed sometime in the “past.”  There is no way for this not to be true.

The planners find that the result of the previous plan was not what they expected so they make an adjustment in the new plan to correct, in the future, for something that was thought to have happened in the past.

To know why something didn’t happen as planed when there are hundreds of millions of transaction is not easy, actually it’s impossible.  For example lets say thin the master plan there was one place that called for 25,000 items X (they are small) to be made and shipped from location A to location B.  When the plan was implemented the truck on the way from A to B had an accident and they were all lost.  The planer sees months later that the output of B was not what was planned so he increases the quantity of X from 25,000 to 50,000 in the next cycle to make up for the loss.  This time they all get there but the plan for B still only calls for a need of 25,000 X and so they just put the difference in stock.  In engineering terms this is a positive feedback where the result of the action is that things get progressive worse.

In a free market system the market place gives both positive and negative feedback. The positive feed back increases the output and gets the planer a raise. The negative feedback allows the planer to find out what is really wrong and fix it or he loses his job when the firm closes down.

 In the United States over the past 20 years there was feedback on job loss going on in the economy as production left the country for China and India. The problem was the high cost of doing business here and it was not all labor. Washington elected officials ignored that and continued to pass laws that were not beneficial to business which resulted in positive feedback and the process accelerated.  The politicians did nothing because of all the money that was coming in to buy T-Bills which then gave them more play money to feed the Citizens that were loosing their jobs.

Back to the example, the planer keeps having A make 50,000 of X to get 25,000 of product at B until B is so full of X that they start giving away or throwing them out, absurd you say that would never happen.  Well this simple example combined with the lack of motivation of the workers in the old U.S.S.R. is exactly what led to their collapse. Further, since in collective systems all jobs are political jobs, there is no incentive to work efficiently.  Therefore there is a misallocation of resources inherent in this systems (meaning it can’t be removed) that makes these economies very un-competitive.   The only thing that kept the U.S.S.R. going as long at as it did was the motivation of a few of their motivated Citizens that worked hard because they knew it was right (to work).

It is clearly impossible for Central Planning run by a Ruling Class (which is what this is all about) to work better then a free market system with de centralized planning.  Further central planning will always make things worse not better since everything is a plan done by legislation and in most cases no one even knows what the plan is.  An actual case can be shown that some of us a bit older may remember.  In 1972 David Halberstam published a book titled The Best and The Brightest which was an account of how we got into the Vietnam War. Halberstam blamed it on the intellectuals and academics (The Best and the Brightest) in the Kennedy administration and after the assassination of Kennedy by the Johnson administration which kept them on. The book is a very interesting read and anyone who has read it would be horrified that anyone would think the government could do anything right.

de Tocqueville in his writing thought that it might be possible for an American Aristocracy or ruling class to form out of the formation of large businesses.   His thinking was that the owners of the businesses would be like the old land owners and they tenant farmers.  In this case the business owners would own the means of production instead of the land and the workers would have no place to go except to the factories to work.  Just like the tenant farmers that couldn’t leave, where were they going to go except to a different land owner?

de Tocqueville was not the only one to see this as Karl Marx certainly had this view and he wrote his Communist Manifesto only 8 years after Tocqueville finished his Volume II of Democracy in America.  It would be hard to believe that Marx’s did not read Tocqueville’s work since they were both in Paris from 1843 to 1845.

 

 

Feb 11 2014

Currency Manipulation


The FED, IMF, China and the Wold Bank 

Going along with the Comparative Disadvantage theory that I have previously posted here we also have currency manipulation going on to help support that deceit.  The main player, and the one with the most to gain, in this game, is China; however they would not be able to play this game if it weren’t for the social welfare policies that America and Europe have been following since the end of WW II.  As the war was coming to an end the Allies held a conference in Benton Woods New Hampshire to establish the monetary system that would be used in the world after the war had ended.  By this time, July 1944, the Allies knew the end was near for the Axis powers and that there would need to be a way to manage the rebuilding.

The United States as the driving economic and military force for the allies and as the one country that was still intact was the only one capable of supplying the currency for rebuilding. The currency would be the U.S. dollar backed by gold. The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar and the ability of the International Monetary Fund (IMF) to bridge temporary imbalances of payments between the members.

From then on the dollar was therefore the Reserve Currency of world commerce and virtually all goods traded internationally were priced in dollars.  Then on August 15, 1971 President Nixon took the United States off the gold standard because of complications between the gold standard and the United States being the reserve currency and at that point the Dollar’s value was solely a determinant of the United States government.

Although that system worked reasonably well for a while there was a hole in the system that was used first by the Japanese and then more currently the Chinese.  For various technical reasons there was a way to manipulate the exchange rate between currencies to give a country a trade advantage with the United States.  Japan being a small country was only able to use this method for a short time and it was mostly played out by the late ‘80s.  However that manipulation was what allowed several Japanese companies to become the dominant players’ in a number of the world’s consumer markets.

The Chinese after Mao was gone and the U.S.S.R. (Russia) fell realized that since central planning didn’t work they were going to have to do something or the U.S.S.R.’s fait would soon be theirs.  I think they saw how the Japanese conducted their trade with the United States and they set up a similar system to be used by them.  This system, in time, allowed them to run up a huge trade deficient with the United States as described in the previous section.  Also in that section we saw how our politicians allowed that to get out of hand creating the situation we are now in.

The United States was not alone in the imbalances of government spending Europe was also a player only in a different manner.  Europe banded together forming the European Union (EU) in November 1993 probably has a result of the breakup of the USSR in December 1991 thereby eliminating them as a security military threat.  The Europeans thought that by forming this Union they could become an economic power house.  However that was not to be as they twenty years later.

Between 1995 and January 1999 the majority of the countries in the EU adopted the Euro as their official currency.  Why this was done I don’t know since every economist knows that you can’t have one currency and multiple fiscal policies being conducted by the member states.  Could the 50 American states each have their own state national bank that could set internal, to the United States, policies — well the answer is no the Dollar could not stand that for long and the Euro didn’t either.

Some countries like Greece went on a spending binge but they were not alone Spain, Portugal, Ireland to name just a few all conducted themselves recklessly and ended up forcing their internal banks to buy sovereign debt from them as well as other member states.  The monies generated were given to the various citizens groups such as the Unions and various social welfare benefits programs.  By the mid 00’s many of these former impendent countries had run up sovereign debt well in excess of their Gross National Product (GDP).

After the financial collapse in the fall of 2008 and the weak recovery in the next few years the problem with the EU debt became worse mainly, but not limited to, Greece as they got closer and closer to default.  Various austerity programs were tried but as of this writing no real solution has yet been found. Worse the Greek citizens’ not liking the austerity have begun to strike and riot in protest.  The EU is trying desperately to solve the Greek problem but since the Greeks are only the worst of the lot the EU governors may not be able to succeed.  The past reckless spending on social programs is exacting to great a cost.

Foolishly we elected many naive politicians in United States over the past 20 years and they embarked on a program to transform the American system into the European system, because we were told that our system was broken.  However the fact is that the European system is not working as advertised; or they would not be having all the problems that they have. This is of no consequence to these intellectuals’ politicians and they are going full steam ahead with their program for internal changes here.  The result of these new programs has been massive deficit spending averaging about $1.6 trillion per year for the last 40 months and by the end of the government FY, September 20, 2012, total federal deficit for the full 4 years will probably top $6.4 trillion.  We are averaging about $133.3 billion per month of deficit.

So we have both the Europeans and the Americans spending on give away programs like there is no tomorrow, and there probably isn’t, and the Chinese not liking this situation have embarked on a plan to take over the world financial system as a result.  This brings us to the description of what is going on now — under the table so to speak and this is the reason that the financial markets have been so erratic of late. Even though many in the financial markets do not see the big picture they do sense the undercurrent of instability and that causes the markets to move first one way and then another as rumors and facts point first one way and then another.

The result of what was just described is that there are three currency wars being waged as you read this. The European Union (EU) is fighting to prevent Greece from bringing down the EU (the latest deal is not enough). The second battle is being waged by the Federal Reserve (FED) in America to prevent a second recession.  The third is the war the Chinese are waging against both the EU and America over western devalued currencies. The signs can be seen in the movements in the commodities, stock, and the gold markets e.g. gold moving in the same direction as the Dow Jones Industrials (DJI) when they normally move opposite of each other.

The players in the game are the FED, the International Monetary Fund (IMF), the Bank of England (BOE), the European Central Bank (ECB), the Peoples Bank of China (PBC) and The Chinese State Administration of Foreign Exchange (SAFE).  Of course the political leaders in these countries are the puppet masters for these agencies. This list can be put into two groups the Western Countries, the WC, (America, England and the EU) and China.  The WC with their excessive entitlements spending and resulting debt needs to inflate their currencies to prevent collapse. China holds much of the WC debt and doesn’t want that. They seem to be in the driver’s seat but the vehicle is speeding down the road and the bridge just around the bend is out.

The Chinese think that they have found a way out of their dilemma; by manipulating their currency using the PBC and SAFE as their tools to achieve their goals. It works like this, when a Chinese company receives payment from the U.S. for goods supplied to a company there the dollar denominated payment goes first to the PBC and then from their it’s turned over to SAFE so SAFE ends up with the dollars. But the PBC gives the company that sold the material payment in Yuan in lieu of the dollars that were sent to them. However the Chinese not wanting to lose control make this a conversion at a fixed exchange rate set by the PBC.  The Chinese company gets paid and yet the Chinese government still has the dollars so in effect every dollar payment coming into China is doubled there; the company gets paid and the government holds the real money which it invests in the world outside China.

The wild card in this plan is that China does not allow many foreign made goods into their country because they need to create lots of jobs.  At least they have the creating jobs part right. So they buy things like gold mines, and other minerals and energy related mines and resources and — sovereign debt.  This is an economic system from the past but well discuss that later.

It’s now estimated that SAFE holds $3.2 trillion in foreign currency (almost half of that in U.S. Treasuries) and as previously stated China is worried about the WC countries resorting to inflation; as in the FED QE programs and the ECU write down of Greek debt. So they have gone, under the table, on a gold buying spree.  China probably has 2,000 tons of Gold now and is expected to take that to 5,000 tons in the next few years. Their plan is to make the Yuan a gold backed reserve currency. Unfortunately for both them and us the Chinese leadership being Marxist don’t understand the free markets and their real knowledge of world finance is limited and so this plan of theirs will backfire on them.

This currency battle can’t be hidden much longer. The trigger that brings this problem into the light could be a Greek full or partial default, a 2nd U.S. slowdown or recession, or the recent FED announcement that they plan to inflate the dollar by 33% over the next 20 years (2% a year).  Or it could be something else; the reason doesn’t really matter what matters are what actions, on the world stage, will be taken. If we aren’t prepared and make the right choices the results will likely be counter productive and those results will be very, very bad.

The problem we now have is that if the U.S. dollar fails the Chinese Yuan can’t replace it for two fundamental reasons. The first reason is that in any monetary system based on gold, A Gold Standard, the gold “must” be free to move between countries. The second reason is that in economics there is something called the Triffin dilemma which states that the country with the reserve currency, the U.S. right now, has to be a net importer of goods and services. By importing goods we supply dollars into the world market and this is how the world economy works. In essence we are exporting dollars and importing goods.

China will not let gold out of the country
China is a major exporter of goods

Therefore the Yuan can’t replace the dollar and the system that China is putting in is the very system that was in place in the eighteenth century prior to Adam Smiths Wealth of Nations being written — it was called the mercantile system.  This system tries to make all transaction favorable to one country and to horde gold at all costs.  Spain in its quest for gold created sever internal inflation that eventually destroyed their empire.  Smith proved conclusively with inductive logic that the mercantile system hurt trade and everyone was worse off and that it was one of the reasons that there were so many wars.

The pedal is to the medal, the bridge is out and it’s almost in sight.

Feb 11 2014

Why do People Do What They Do?


The Hierarchy of Needs

Abraham Maslow, a very famous mid twentieth century psychologist, developed a concept referred to now as Maslow’s “Hierarchy of Needs” in 1943 in a paper he wrote A Theory of Human Motivation. Maslow’s concept was that humans would react to their environment in a particular and structured order to satisfy their internal drives or needs which he called the self-actualization theory.  He further showed this as a pyramid with things like air and water at the bottom and things like personal gratification at the top on the pyramid.

His logic is that air is required for life above all else and therefore that need must be satisfied first.  Next, we must have water and food and then an environment that’s not hostile to us.  Once these basic or core needs are met we get into more personal needs such as love and respect.  These personal or social needs always come after the physical but can become very important if we feel secure that the others have been met and are not in danger of being taken away.  There are the five levels to Maslow’s self-actualization theory.

Level 1 Physiological needs, such as hunger, thirst, and sex

Level 2 Safety needs such as security, stability, and order

Level 2 Belongingness & love needs e.g. affection, affiliation, identification

Level 4 Esteem needs, such as needs for prestige, success, self-respect

Level 5 Self-actualization needs, such as realizing potential

The first two levels of Maslow’s Hierarch of Needs go a long way to explain basic human nature.  For example the movement of Mexicans into the American southern boarder states with Mexico.  The reason being, that differences in the first two basic levels are the reasons for the occurrence of immigration.

From the forward of this book is the fact that the individual will always do what his or her best interest. The logic and theory for this was adequately proven in the book Wealth of Nations first published in 1776 by Adam Smith. And further this is supported by Level 1 & s from Maslow’s work. All attempts to disprove the theory of free markets a central feature of the theories proved by Smith have failed.  They all fail, including the works of Marx and Keynes, because all the examples that are used are not ones where there is a real “free” market.

The second fact, also discussed in the forward to this book is that after many centuries of trying just about every conceivable kind of political or governmental system imaginable we find that there are really only two basic kinds.  The book The Five Thousand Year Leap written by Cleon Skousen gives an excellent explanation on the reasons for this.

The first based on the rule of a single party usually through the leadership of a strongman.  This person could be a King or a President for life and has immense personal power but still must have the support of a group of close confidants that carry out this dictates.  Historically this form of government appears to be the most “common” form of government that has every existed. In this form of government the people exist, only, to support the government, they are subjects.  This form develops from either an attempt at Democracy or form anarchy after the collapse of a government which was until the formation of the United States with its Constitution the only other possibilities there were.

Today the only other form of government that is possible is something new and it is a system based on a set of laws and principles that form the basis for the legitimacy of the government, a fixed constitution.  The U.S. Constitution is the best example of this form being the one that has lasted the longest, so far, since it was designed to be very hard to change. In this system the federal government is there solely at the will of the people and is there solely to protect the people not to rule them. However, there is a great risk here for if this system does not have very strong, not just adequate, checks and balances the politicians will over time turn this system into the government of a strongman, backed by a ruling party.

Why these previous paragraphs are so important is that the principles identified can totally explain the reason for the movement of people from one place to another, be it from one side of town to the other or from one country to another. The movement occurs because of either economic or political restrictions or both on the individual where he or she is and that the individual see’s that he or she can live better someplace else.

If there are no restrictions on movement then the movement will be quick and if there are restrictions the movement will be slowed.  But in either case unless there are significant and insurmountable physical barriers be they natural or man made the movement will not be stopped.

Being a person with a strong technical background it would be logical to be able to put this into a set of principles much like those that are used in science and engineering.  In this case we will use the form used for the explanation of the laws of thermodynamics (which is about the movement of energy – heat).  There are three laws of thermodynamics which we will not go into this is not about engineering. The engineering form (Three principles or laws) used to explain thermodynamics by scientists and Engineers does seem to fit well when also trying to explain the motivation behind the movement of people so that is why it was used here.

The First Law of Motivation can then be stated that the principle factors determining the core of human behavior are predominantly genetically fixed. This is adequately explained in Maslow’s theory of the hierarchy of needs so further discussion here is not needed.  Therefore it can be stated that we are dealing with basic principles of motivation that apply to all humans.

The Second Law of Motivation can then be stated as individuals will move to the place that satisfies the greatest number of their needs in the order explained by Maslow.  Or stated a different way we can say that individuals will always move to a place that allows them to move up Maslow’s pyramid. That flow will be from the least to the most and will be inversely proportional to the strength of the resistance to that flow be that resistance natural or man made.

The Third Law of Motivation is that if there is no individual freedom and there is no opportunity where the person is and there is therefore no way to move then there is no motivation to work or be productive as there is no personal advantage.  This will create a stagnant society where people will only do the bare bones necessities to survive and no more.  Further it will take prodding by the government to get even that done.

The Second Law of Motivation explains why there is and has always been a movement of people into the United States.

The Third Law of Motivation explains why the old U.S.S.R. collapsed when its work force could no longer be coerced into being productive citizens.

The Second Law of Motivation explains why U.S. Citizens almost never move out of the country even when that are extolling the virtues of other political systems.

The Third Law of Motivation explains why in a welfare state there is no incentive for those at the bottom to move out.  All their first level needs are taken care of by the state.

The issue that we face now with immigration legal or illegal is one where the standard of living in the United Sates combined with the higher level of personal freedom that we have makes for a powerful magnet to those not so fortunate.  This is especially true at the border between Mexico and the United States where the disparity is large.  The only thing that has prevented a title wave of Mexicans to enter the country is the desolate land that must be crossed over much of the southern border.  Even still and despite the dangers a high percentage of the hundreds of thousands that start the journey eventually make it across.

The U.S. Mexico border could have been sealed long ago if the government had wanted to.  Would it have been expensive, of course it would have.  That isn’t the question the question is why it wasn’t done.  Three reasons prevent a barrier from ever being built.

One the Democrat Party sees the Mexicans as a source of future votes since they will vote at some time in the future in a higher percentage to them then to republicans’ because of entitlements. 

Two the Republican Party sees the Mexicans as a source of cheep labor and that they could be used as leverage to hold down labor costs for companies. 

Three both saw them (the documented and undocumented) as a cheep source of personal servants to do their menial work and take care of their children. How many politicians have been caught not paying taxes for having au pairs, nannies and other domestic help?

Under President Ronald Reagan an attempt at solving the problem was tried with amnesty and a promise of better broader security. The border security never happened and without securing the border the flow is never going to stop as the Second Law of Motivation explains.  The lure of moving up Maslow’s hierarchy of needs was too strong since they, the Mexicans, were on the bottom in Mexico and there was no way they could move down any further, they were already on the bottom, and they also didn’t believe they had any chance to move up where they were.

To stop the flow is not possible but there are two ways to significantly slow it down. One is with a very solid and formidable barrier that makes it very difficult to make it across.  In addition we would need cleared zones, on the U.S. side, that are off limits to everyone so that anyone in them can be detained.  This would require relocating Americans and a significant military presence.  Something like the barrier between the east and west in Europe after WW II is what would be need, only keeping people out not in.  We also know that, that was not 100% effective.

The other method would be to change the differential in the standard of living between Mexico and the U.S. Raising that of Mexico reduces the incentive just as lowering that of the U.S. does. Lowering the U.S. standard is the more practical since raising the standard in Mexico is not what the politicians there want. Either or both minimizes the flow in accordance with the Second Law of Motivation.

If we don’t build a barrier or if we don’t lower our standard of living to be more in line with the rest of the world then we are faced with the problem of having created a very unfair system of immigration.  The reason for this is not enough Mexicans (we’ll use that term for all of Central America) are allowed in nor could there be as we would need to allow many millions in to stop the illegal flow.  And Mexico is not interested in helping with the problem as the flow of people north is a pressure relief on them politically. And besides with the growing Mexican influence Mexico City has a growing influence on policies being established in Washington.

Feb 10 2014

Universal Suffrage


Good or Bad?

Suffrage is the term given for the right to cast a vote.  In a pure Democracy everyone of the established voting age or any other qualifier can cast a ballot.  Then all it takes is for one side to have one vote more then the other side in order to win, which is majority rule.  In addition in a pure democracy all the citizens with the right to vote would vote on all issues directly.  Rousseau wrote about that kind of Democracy in his The Social Contract since he was very familiar with this kind of government from Geneva where he grew up.  Obviously this system only applies to a small area or town.

That direct voting by the citizens on everything has always been considered to be both bad and impossible especially at the Federal level and so when the Constitution was written only men (predominately white) with property were allowed to vote. But that restrictive view was not universal and so a few years later under President Jackson, who believed that voting rights should be extended, they were. Therefore by 1840 universal white male suffrage (and some blacks) was the norm, and nearly all requirements to own property had been dropped.

This expansion of the voting franchise continued unabated until 1971 when by that time all Citizens over 18 male or female and of any race could vote.  Whether that was good or not it was the law of the land through the amendment process to the Constitution (14th, 15th, 19th, 23rd, 24th and 26th Amendments plus various legislative acts).  The United States was the first major country to have full suffrage for women starting with a few states as early as 1869 and completed when the 19th amendment was ratified in 1920.

The problem with this expansion of the franchise was not with any of the various groups that were added but with an ever increasing lack of understanding by the voters on whom or what they were voting for. There were two parts to this:

The first problem was the education system which stopped teaching the principles of government.  This was by far the worst problem for if the Citizens no longer understood their system of government then they could be manipulated by those seeking power.

The second problem was the formation of political parties that took advantage of this and created block voting where it didn’t matter who was running or what the issue was — it was a vote cast only for the party.

With the very lose voter registration process and vote manipulation (this maters a lot when the vote is close) going on today we have created a system where the winner is chosen more by popularity and money then anything that really counts. Who has the best “spin” and/or the most money gets to win today with the TV, radio and the web (social media) as powerful means of communication. An interesting tidbit about the entertainment industry, Plato in his Republic understood that the Arts could influence elections and that therefore they must be strictly controlled so as not to corrupt the Citizens, he would be appalled at what comes out of Hollywood today..

But there is more as we have a representative system of government as the Citizens with the right to vote do not vote directly they vote for Representatives. In the Federal system as originally setup the Citizens voted for someone to represent them in the House of Representatives known as the Peoples house, for obvious reasons.   The House with the Constitutional mandate to prepare an operating budget for the Federal government was given this task so that the Citizens could control the spending since it was their representatives that were responsible for the budget.

This was a much debated system with concerns that the Citizens would find ways to have the federal government find ways to spend money on them, the citizens.  So to counter this tendency the Senate was established (for other reasons as well) and they had to concur with the House on spending bills.

Now the Senate was originally set up to be filled with appointed Senators two from each state.  The logic being that the several states would appoint seasoned and experienced Citizens to these positions.  It was probably assumed back then that these would be wealthy land owners and they would represent the upper class of the country while the House was for the common man.  A check and balance system again.

So with this system both ends of the Citizens were represented the common man and the wealthy man. And they had to work together to get anything done.

But over the last couple of elections cycles this system has been subverted by the Democratic Progressives and the current occupant of the White House Barak Husain Obama the first president that actually instructs the Senate to refuse to bring up House passed Budgets. So instead of doing their job they demand that their spending ideas be taken and no debate is allowed.  The president approves of this process since he does nothing to stop it and instead demands that the House Republicans give him what he wants. This is probably unconstitutional but since the Public education system has produced several generations of students with no real understanding of the process and so the media can blame the House for not giving Obama what he wants. Which is absurd since the House is the peoples House and it is their main responsibility not the Senate nor the Presidents to produce a Federal Budget.

James Madison, “We have staked the whole future of American civilization, not upon the power of government, far from it. We’ve staked the future of all our political institutions upon our capacity…to sustain ourselves according to the Ten Commandments of God.”