Posts Tagged ‘economics’

Two Methods Of Funding Your Civilization

Monday, November 7th, 2016


Associated Press reports on a small city run according to libertarian principles, including this momentary glimpse of clarity on the options for funding a human settlement:

Their use of cash to pay for infrastructure has depleted reserves and left the city unable to produce the kind of investment income that for years helped hold down taxes.

What this does not tell you is that for cities to do this, they must be recklessly in debt. Their entire value is controlled by investments over which they have no control, and this strategy requires them to borrow money and pay it off in small increments instead of having wealth they can apply directly.

This strategy is used by the American government, which is $20 trillion in debt, and many financial managers think it is intelligent. After all, the monthly payments are low, and borrowing enables them to do things today and defer paying for them until tomorrow.

Smarter minds realize that this strategy creates out-of-control debt which, while the cost may be lower now, defers actual costs into the future, effectively passing them down to future residents. It also means that if the investments go south, the city will find itself not only bankrupt but collapsing from lack of cash because it will no longer be able to borrow.

We can see the end results of this strategy through what happened to San Bernardino, California when it declared bankruptcy:

The city filed for bankruptcy in 2012, blaming a loss of tax revenue, high-priced employee pensions, and a city charter that separated the cost of police and fire salaries from the city’s ability to pay. It’s now nearing the end of its time under court protection, having negotiated settlements with its biggest creditors, including pension bondholders owed about $90 million. Final approval on a plan to reduce debt by about $200 million could come as early as next month when the city is due back in court.

San Bernardino is an outside case with a number of other problems, but that shows an acceleration of time scale, not an exception. All of the cities who follow the Leftist tax-and-spend model are forced to borrow themselves deeply into debt, and eventually the bill becomes due. Like the Baby Boomers, most voters prefer to party today and pay tomorrow, but the end result is that when tomorrow comes, it is a cataclysmic crash instead of simply hard times.

The Libertarian suburb may have finally enforced the reality principle. It may not be able to afford all the nice things that make voters happy this way, but perhaps it should not be able to. Maybe government should be smaller and fiscally responsible instead of a “gift-giver” that ends up in bankruptcy.

Similarly, Donald Trump promises to enforce this principle on the world if elected. He will force other nations to pay for their own defense, which means that in turn, they will not be able to afford the luxurious social welfare benefits programs with which they have bought votes for so long. Socialism will finally collapse in those countries.

These realist efforts can help return the world to sanity. No one feels good, existentially, about leaving a vast debt for the future. Once in the debt hold, there is not much people can do to escape it. Our governments have pursued this path to the expense of future generations, and made us bigoted against the possibility of future as a result.

Obamacare is How Leftists Flunk Math

Thursday, October 27th, 2016


Social systems operate on principles that roughly approximate physical systems described by physical laws. The mathematics used to model these systems approximate the mathematics used to solve physical problems.

Like the fictional Theory of Psychohistory proposed by Hari Seldon, physical analogs can be used to predict future events. One example of this is the actuarial mathematics used by insurers to predict the future state of human populations. This can be seen as the application of statistical mechanics to a human rather than a molecular population.

These populations consist of their customers. These customers of health insurers may or may not experience unfortunate life events at certain intervals of time. These events cost the health insurer money. The health insurer establishes prices to cover these events. The prices are a combination of the likelihood of an event and the cost to the insurer should any event occur. So what happens if by fiat you suddenly increase the number of people insured, the number of events covered and the likelihood of an individual member of the population suffering a covered event? Obviously, if you are Barack Obama, the cost curve bends in the right direction from sheer will to power. In nations outside the Magic Kingdom of Equestria, this simply isn’t the case. Even Bill Clinton, bless his heart, accurately describes the Desert of The Real.

“So you’ve got this crazy system where all of a sudden 25 million more people have health care and then the people who are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half,” he said, describing a long-time conservative appraisal of the law.

In other words, covering more people, who get sick more often for a greater number of conditions can only do one thing to the price of a health insurance policy. It can only increase that price. In Liberal Wonderland, this becomes a problem Republicans must solve. Liberals typically say that when the people rebel against their pet schemes. It’s then that the people get told not to believe their lying eyes.

Famous Physicist Enrico Fermi taught at The University of Chicago. He would rather see a fool suffer rather than suffer one in silence. He once famously told a student “That was so bad that it isn’t even wrong.” The HHS has just released a report which deserves a similarly harsh condemnation. Amerikans can now check out all the options, as they tell us below.

“Thanks to financial assistance, most Marketplace consumers this year will find plan options with premiums between $50 and $100 per month,” said HHS Secretary Sylvia M. Burwell. “Millions of uninsured Americans qualify for financial assistance, and so could as many as 2.5 million Americans currently paying full price for off-Marketplace coverage. I encourage anyone who might need 2017 coverage to visit and check out this year’s options for yourself.” Thanks in large part to the Marketplace, in early 2016, the share of Americans without health insurance fell to 8.6 percent, the lowest level in our nation’s history. This year’s Open Enrollment offers the chance to build on that progress and further improve access to care and financial security.

I’m going to do the lovely and talented Sylvia M. Burwell a favor and assume that this content was dishonest rather than wrong. You see, people don’t enter the Obamacare marketplace during open enrollment to improve access to care and financial security. They go in the marketplace to avoid paying fines. Put a gun to the consumer’s head and he’ll tell you loves Egg McMuffins if that is the answer you came seeking. There is a technical name for an insurance policy that you have to buy or else. These are known as protection rackets. They are famously unavailable from reputable firms. The jail sentences combined with the power of the RICO statutes make them a suboptimal marketing strategy. Government suffers no such impediment thanks to the Supreme Court.

There are some logical solutions to this. The nice guy one involves paring this disaster back and limiting the stealth public option to catastrophic events. Cut the Obamacare requirements back to events that cost above some threshold that most average Amerikans could never afford and only cover events that are more expensive. Then there is the condign human desire to teach these rat bastards a lesson on why the USSR was dumb not just wrong.

So how does this work? The GOP tells the Dems they are expected to write a repeal law that will get rid of Obamacare and the GOP will not bother discussing it with the Dems until they produce a repeal bill that meets the GOP criterion as good enough. Cucks exist. That won’t happen in my lifetime. What a shame.

The solution we’ll get made to eat in a #Hillary administration is the bailout. Something is done to make insurers continue to participate and the individual mandate remains in place. The losses are made up via taxation and the fines for non-participation are ramped up so that enough healthy people get tossed into the parasite pool. In effect, the number of sham policies that “compete” to be “chosen” is irrelevant. It will be single payer by a much goofier name.

Obamacare is how the left flunks math. A significant number of these people actually believed “If you like your doctor, you can keep your doctor.” All of the basic logic I laid out about how actuaries price insurance is mumbo jumbo to them. If Jedi Obama promises to bend the cost curve today is the day the levels of the ocean will no longer rise. Magic fails in math class. It does so in reality. The man behind the curtain knows this well.

Explaining “Trickle-Down” Economics

Friday, October 7th, 2016


The phrase “trickle-down economics” has been flying around the airwaves lately, so it is worth explaining what it is. As with most terms of Leftist invention, this misnomer is designed to imply that the wealthy gain more wealth and small amounts of it “trickle down” to the rest of us.

The idea behind trickle-down economics is to raise the wealth of the economy as a whole, which both lowers costs and increases the actual value of currency (i.e. what you can buy for it). This creates greater purchasing power for the citizen than giving them direct benefits such as welfare, which adulterate the value of currency because its basis is debt or at least, an end-user spending model where those benefits do not create force multipliers in the economy as investments in infrastructure would do.

Your average liberal is shocked by this. People need money; why not give them money? The answer is that money has no fixed value. It is worth only the value of what is backing it, in the conservative view, or what people will do to acquire it, in the liberal view (demand-based economics). Also, time passes. If we spend money now in a way that does not make more money in the future, we lower its actual value.

Think of it this way. Farmers Jim and Joe are both poor and starving. If we cut regulations, unions and lawsuit risk, the companies that make farm equipment will thrive, increasing competition. This consistently drives down prices. At this point, Farmer Jim can take a loan, get the equipment, and then have a thriving farm.

If instead we follow the liberal model and subsidize Farmer Joe, he gets money which he spends immediately on survival, which means that the wealth flows to those at the end of the supply chain, usually retailers. This does not increase wealth substantially as they have no incentive to improve under this system. Further, Farmer Joe is left with no possibility of ever making his farm sufficient.

The Soviet Union collapsed — as have other economies like Cuba and Venezuela, both of whom would be thriving under a halfway sane economic policy — for a number of reasons, but a big one was no investment in its citizens. As a result, nothing improved, and no one had any incentive to do better. A kind of economic and social heat death resulted.

As a third option, classical European civilization had a different idea: entrust the wealth and power to those who are proven to be good leaders of good ability and moral character. That way, they can increase wealth and use it to acquire land, then hire the others to work this land and return money. This model could also work with industry.

Civilization faces constant threat because it must always expand or die, unless it focuses that energy on expansion of a qualitative level instead of a quantitative (i.e. “more”/”larger”) one. This requires concentrating wealth, but by putting it in the hands of the good or at least the competent, everyone benefits. The Leftist model is the opposite, which spreads the money thin and then fails because it cannot concentrate wealth to achieve growth in quantity or quality.

Leftists like to attack trickle-down economics as welfare for the rich, when it really is a cessation of interruption of the process of making wealth multiply. They style it as the big guys crushing the little guys, forgetting that little guys depend on the big guys for jobs, currency value, stock value and products. We can discard the Leftist critique on that basis.

Libertarians often talk about the concept that “a rising tide lifts all boats.” When a society is productive, and minimizes the amount of money it siphons from the productive to the unproductive including government and welfare, its value increases because wealth concentrates and can be applied toward force multipliers such as technology, organization or quality improvement.

The ideal of civilization proposed around here, the four pillars, emphasizes hierarchy for this reason. Socialism dissipates wealth and the ability to apply ourselves. Hierarchy puts the thriving at the top and lets the rest of us benefit, which although it is indirect avoids the boom/bust cycle of regulated economies.

Nothing of this level of complexity will make it into the debate, even at the highest levels of business and academia, because much as they dissipate wealth, Leftists also dilute accurate thinking and make it both taboo and baffling to the normal citizen when it is spoken. You might as well step down out of a UFO and say “Klaatu barada nikto” as advocate trickle-down economics, even if it is the only workable model.

Can Philosophers Keep Politics And Economics Apart?

Saturday, September 3rd, 2016


Organized society mostly promotes separation of Church and State, as well as separation of powers such as between legislative, executive and the judiciary. This separation prevents for the most part corruptive enterprises also known as white collar crime, whereas (in other cases) sometimes the opposite is required i.e. to integrate, coordinate or to provide seamless operations.

An additional function requiring more separation these days is “economics and politics” while another function requiring less separation is “philosophy and politics”.

These functions can be combined in a continuum as follows:

Politics  Philosophy  Economics

Philosophy both separates politics from economy and serves as the balancing point between the two. We can see this in current Western civilization.

Imagine that politics decided to implement the liberal-democratic ideology for all countries. Initially this leads to fair economic growth and most people are happy because one benefit punted by this ideology, was that it will increase the middle-class. This would also lead to stability in the populace that would benefit both lower and upper classes.

But after a few generations, some people became unhappy because the economy is not good. Corporations cannot make money, so economists initiated the quantitative easing “experiment” to see if that will help. Since money was no object for corporations anymore, they promptly attempted to revitalize the middle-class. Then this failed too.
The problem is that the middle-class does not want money. Then pressure on corporations increase even further and that depletes the middle-class even further. Investors get agitated and put pressure on politicians, but politicians do not realize they have to change their ideology, so they go dark.

Disentangling oneself from this mess allows a more focused view. Politicians are feverishly playing their own “system” while economists are feverishly playing another “system.” This is getting so bad nowadays, that politicians become economists and vice versa, while everybody loses.

One way to keep them all honest (and wealthy) is to insert unbiased philosophers inbetween.

Take a specific example such as the European Union. It is a monetary union separated from its political union. Being a monetary union means businesses get priority, this allows for the importation of cheap labor from Africa. However, this is not politically tenable, leading to a serious growth in political opposition that may actually break the monetary union apart.

A philosopher-king can impose a mediating force. Neither economics nor politics alone can solve this situation, since economics will sacrifice all other disciplines for lowest cost and highest efficiency, and politics rewards what is popular at the moment.

Instead, we need a continuously monitored stabilizing factor. Philosophy looks at what is true, not what humans want to think is true or what benefits some but not all aspects of society, as economics does. By virtue of peering into long-term consequences, and their effect on civilization as a whole, philosophy mediates the extremes of politics and economics, which ultimately should be seen as tools toward the ends that philosophy defines.

When we removed the power of the kings, we took away the arbitrary strong power required to say “this is the right thing to do, even if it will not appear that way for centuries or millennia.” This is what philosophy does: it compares truths, and finds the most realistic ones, and matches them up with our rarely-articulated inner desire for greatness, meaning, mystery and significance.

Economics, as a tool and not a goal in itself, has a tendency to burn itself out by dominating the field and then for short-term gain, rendering necessary long-term implements unnecessary. Similarly, politics sacrifices the invisible stability and health of a civilization for panics and trends. Without a balancing factor in the middle, these two positive forces become destructive ones.

This theme appears in all organizations where dark organizational tendencies erupt within. The part stands for the whole, the tool becomes the master, and the short-term obviates long-term needs. Dark organizational might be seen as this process of parasitism, where purpose becomes hijacked by convenience.

As applied to the contemporary Western Civilization, this concept means more than a desire for philosopher-kings: we need a balance, or unison, between the different types of power in our society so they work together toward the same goal. More than fighting political problems on the surface, this promises a saner future by fixing the root of our disorganization.

The Economic Impact of The Reality Deficit

Tuesday, August 16th, 2016

The US Debt Clock measures the extent to which US Government spending exceeds revenues accrued to date. Our current figure is equal to $19,411,632 Million and it will increase noticeably by the time this piece has been published. This is an obvious problem. What is less obvious, is the knock-on problem caused by our government’s current solution. That solution involves our government utilizing an official inflation rate that understates what the common American experiences in daily life. Charles Hugh Smith explains below.

In our household, we measure inflation with the Burrito Index: How much has the cost of a regular burrito at our favorite taco truck gone up? Since we keep detailed records of expenses (a necessity if you’re a self-employed free-lance writer), I can track the real-world inflation of the Burrito Index with great accuracy: the cost of a regular burrito from our local taco truck has gone up from $2.50 in 2001 to $5 in 2010 to $6.50 in 2016.

If we did an Independent Cost Estimate (ICE) on Charles’ favorite burrito under the assumption that the USG was reporting an accurate rate of inflation that applied to all commodities equally, we would believe based on our estimate that the burrito should cost $3.40. If we define the term reality deficit as the delta between an observed cost and a should cost based upon the good faith of the USG annual inflation rate, we get a burrito-based reality deficit equal to $3.10.

Employing some mathematical prestidigitation, we can back out a fourteen-year cumulative rate of inflation equal to 36% for the ICE. The actual rate of increase on the burrito equals 160%. Economists will point out that one data point never defines a trend. Besides, once you’ve added enough Tabasco Sauce, the burrito tastes the same either way. Smith points out that similar reality deficits occur with college education and healthcare. Economists will argue computers and communications systems are cheaper. But as a heckling reporter once told Alan Greenspan; “I can’t eat an iPhone.”

So why would we understate official inflation? To borrow at a lower rate of interest by deliberately underestimating the time preference of money. The lending interest rate will consist of two priced risks. The default risk and the time value of money risk. The US Dollar is the global reserve currency of last resort. This drops our default premium near zero. The US pays the monetary time preference when it borrows internationally. Successfully under-reporting this time preference allows the USG to short customers on Treasury Bond Interest Rates. An artificially low return on Treasury Bonds becomes a form of reverse usury.

So what happens when your paycheck is going up at a notch or two above reported inflation while food and healthcare continue to rise at an accelerated rate? People can’t afford very nice toys anymore. They spend more and more to keep up, so spending diverges from actual economic growth. People also eat their seed corn as their burn rate increases more rapidly than their remuneration. The LA Times cheerleads all of this below.

Consumer spending remained strong in June, increasing 0.4% as incomes continued a slow but steady increase, the Commerce Department said Tuesday. Last month’s spending increase matched May’s, as did the 0.2% growth in personal incomes.

With spending outpacing incomes, Americans saved less in June. The percentage of disposable income saved decreased to 5.3%, the fourth-straight monthly decline.

That difference between spending and economic growth? That’s a negative impact of our current reality deficit. We spend more, get paid less and receive less in real value. We wind up saving less just to live today at the same level of expenditure. So the differential between what the Government admits to in inflation and what we experience in our daily lives is effectively a tax that covers the difference between what the government pays and what the government should pay to borrow money it does not have to cover current year spending.

Unlike the national deficit that will never be paid in an honest fashion, the reality deficit will always be paid in full until such a time that it becomes unaffordable. Once this reality dhimmitude becomes unpayable, the system will collapse. This has recently happened in The Soviet Union, North Korea, Zimbabwe and is currently ongoing in Venezuela. Only a historical illiterate would assume that it will not eventually happen to Amerika as well. Reality reacts really poorly when you fail to pay up the vigorish.

The West abandons competitiveness

Friday, February 19th, 2016


Recently an economist asked whether American productivity was actually in decline as reported, because there was some suggestion that measurement criteria may be faulty. In theory, since US competitiveness has “improved,” productivity should also have improved. But this takes us into the woolly world of globalist economics.

The World Economic Forum defines competitiveness as follows:

…the set of institutions, policies, and factors that determine the level of productivity of a country.

The World Competitiveness Report is actually a very interesting, intensive document and I would appreciate philosopher kings reading it. Apart from our paradoxical world where economic modelling of productivity contradicts with competitive measures, it appears that quality itself is also deteriorating. Measurements simply do not tally up anymore because of a lack of Quality Assurance and Control.

For example, take how Donald Trump polls before Iowa differed from the actual vote outcome. In addition Trump’s non-PC approach seems to contradict the generally accepted norms of the GOP; in fact, it exposed the lies of the some incumbents currently supporting the same party. Clearly there is a total lack of quality control in how polling and political parties work.

his has even gone so far that people accept “fact-checking” as the “norm.” In other words, independent fact checking has now been accepted as the “new” quality norm obviating the need for politicians to apply their own quality policies. This sad state of affairs can be seen in companies too –- despite companies having registered their ISO standards –- it has become a marketing tool only.

Another aspect of competitiveness can be seen in the changing assessment of Syrian competitiveness. According to the Global Competitiveness Index (GCI) of 2007 and 2011, Syria fell from its position at 80 (out of approximately 150 countries participating, with lower scores being more competitive) to 98. This is clearly a serious drop requiring further evaluation.

The GCI process measures and allocates all participating countries into three competitive groups as follows:


All together there are 12 pillars distributed between these three groups which allows the “judges” to fairly accurately allocate a country; for example, Syria was allocated to the “Basic Requirements” group because of its good merits in the first four pillars and bad merits in the other eight pillars. Obviously it is not a problem but in fact is intended to provide assistance (free of charge) to politicians in Syria to bite the bullet as it were.

In the 2016 report Syria appeared to have disappeared, most likely caused by their inability to even participate. This is where things become interesting. Clearly the World would benefit by encouraging Syria to improve (as it were), so why drop them from the GCI Report?

Before I answer that, let’s take a detour to what the GCI Report thought about 9/11.


From the above, three interesting paragraphs emerge:

  1. “This Report makes a key implicit assumption that economic integration will continue in the years ahead”
  2. “In the longer term, the terrorist attacks will have a lasting negative impact if the policy responses trigger a reversal of the global economic integration that has characterized the past twenty years”
  3. “market uncertainty have the potential to raise costs of cross-border business to levels not seen in decades”

Despite enormous losses suffered from the 9/11 terror attacks, globalists really want to have an integrated economic system in the world with no borders because it will reduce their costs. Even a two trillion dollar loss is unimportant to achieve this goal. This is why Bush never killed Osama –- (it is unimportant) and Obama killed him (because it’s unimportant).

This is only one aspect we learn from Syria and Competitiveness. Syria fell off the report because cross-border trade to/from Syria is not an issue anymore.

Another aspect from the GCI report assesses the migrant world. Migrants appear to like moving to Germany and France as a lot of people have noticed. In other words, people from number 98 are moving to live with people at number six or 18. If one considers that Syria only performs well in four out of 12 pillars, imagine the re-education Germany will have to implement in order to educate Syrian adults and children on the additional eight pillars.

The last jewel the GCI report provides in this short evaluation relates to debt. Based on the latest trend to incur debt by simply flooding the marketplace (banks) with money (this is undoubtedly good for Globalists), it points out quite emphatically the following:

The accrual of public debt can enhance competitiveness if it is used to finance investments that raise productivity, such as upgrading schools or supporting research. However, if debt is used to finance present consumption, it burdens the economy in the long run with little tangible benefit.

General feedback regarding quantitative easing is that banks did not lend it to borrowers. They apparently used it via stock exchanges across the world to make money.

If one takes how much was spent to “fix Iraq” or Afghanistan, then one can imagine what it will cost to fix Syria. However, since that investment did not come from Syrians themselves, but from “across” the “cheap” border, the productivity of Syria will not improve, and neither will the economy of America because it is all a bubble.

Clearly globalists do not want quality measures because those increase costs (e.g. Iraqi buildings were never even finished), they do not want borders because those increase costs, but they do want countries with taxpayers to socialize those costs because that will be very productive for the globalists.

The contradiction is that having quality processes and borders is actually good for the middle-class. We have to instruct our elected representatives to represent their electorate (or get prosecuted) and not their donors, simply because it improves competitiveness (the correct way). This is important because bad economy correlates with increased mortality (Syria and Zimbabwe).

One simple improvement may be proposed here (for evaluation): Implement a system manager in each country to perform the necessary loss-benefit analysis of any national policy for its own tax-payers and then implement an enforced quality assurance process that will follow that investment through to its predicted outcome.

This is what Trump intends doing IMO: like a good manager, to run America with its own quality-assured, competitive system. No more “competitive or productive measurements from foreigners” will be necessary after that. They can keep all of that for themselves (especially the incorrect measurement parts).

The economy is managed by the Left to keep you from what is rightfully yours

Thursday, January 28th, 2016


Do you know what really makes economists sad these days? Do you know what scares them? $10 per Blue Barrel Oil. I’m looking at this and wonder how these doomsayers turn chicken salad into something considerably less savory that comes out of a different part of the fowl.

Cheaper oil means cheaper motive power. Until John Galt invents the perpetual motion engine in his secret mountain hideaway, cheaper oil is the most effective and efficient way to make it easier for the masses to heat their homes, get from point A to point B, and save money on their food and entertainment that anyone could think of. Knock gasoline to $1.00 a gallon and my world gets about a $2,000/year pay raise. If you have your kids in a private school to avoid the gawdawful public ones, $1.00/ gallon gasoline is a 5% coupon towards the tuition.

But when we look at how the prospect $10 per Blue Barrel oil gets written up, you would think most of the people in the oil and gas exploration industry were cheering for M. King Hubbert’s Peak. So what happens when shale oil technology gives us Hubbert’s Lush, Green Valley instead?

Many oil exporters have already been put under pressure by the slump in prices. Among them, Russia and Latin American countries such as Venezuela, Colombia and Ecuador. Gulf states have also come under strain, with Saudi Arabia unveiling a record budget deficit of 367bn riyals (£67bn) for last year. Bank of America Merrill Lynch economists said the oil price slump meant that “the era of [Saudi’s] material overspending is likely firmly behind us”.

So let me see if I can wrap my little, stunted brain around the pissing, moaning and angst I hear before me. We have to stop fracking. We have to reduce crude oil production. We have to cut back on all the partying or else! Or else what?

  1. Saudi Arabia could lose lots of money. Where would ISIS go for its oral fatwas and monetary donations? I’d be deeply saddened if the university that gave Abu Bakker Al Baghdadi a PhD in theology had to shut down.
  2. Venezuela could afford far less socialism. That’s a bit like an alcoholic bum no longer being able to afford another bottle of Wild Irish Rose. I’m still failing to grasp the fundamental crisis here.
  3. Russia can’t afford the antacid tablets it needs to comfortably swallow the Ukraine. Cry me a river of vodka tears, Ivan.

But couldn’t domestic producers also suffer. I mean British Petroleum is laying off 4,000 people in Scotland over this. Couldn’t this do the same thing to Exxon and Occidental petroleum in the good old US of Amerika?

Sure. Bring it. These are corporations that have deliberately aided and abetted the lies that were recently told in Paris about the deadly impacts of global climate change. Why would Exxon throw in with the Warministas? For the artificial scarcity and regulation that would be imposed.

Surely you jest, JPW! Corporations hate regulations and artificial scarcities. They fund lobbies to prevent this stuff from happening. It’s the gravamen for the existence of Conservative Inc.™ Oh if only it bloody were, you Simpleton Mutts!

Artificial scarcities rock if you partially corner the market in the artificially scare item. Hubbert’s Peak was a gift from the heaven to any major petroleum producer fortunate enough to own the mineral rights to several large fields. Prices are a partial function of scarcity. They move inversely with commodity supply. If you can’t come by scarcity honestly, you can still kill abundant supply it if you buy a Barack Obama and get it shut off by disingenuous fiat instead.

As for regulations. Major corporations love them. Ma and Pa Middleton, Thomas Edison in his cozy, little lab and anyone else who moves product in basketfulls rather than truckloads gets killed by them. The impact of a regulation gets mitigated by scale. If the regulation in question imposes a unit cost that damages a business’s competitive pricing strategy, it imposes far less of one if that number of units in the denominator has a long a vapor trail of zeroes behind the lead digit. This doesn’t even impose a fly bite on Exxon. It potential kills a small fracking outfit. Thus, through the magic of Barack Obama’s hope and change, we can regulate all of Exxon Mobil’s competition out of existence and prevent large parasitic corporations from ever having to face the impact of improved technology or intelligent business strategy. It’s no big riddle why Exxon Mobil is deeply worried about Global Warming.
So why do the big corporations and major petroleum plutocracies cry about $10 per Blue Barrel oil? Because simple people like me are getting enough wherewithal to not have to put up with Vladimir Putin or Barack Obama’s raft of crap. We don’t have to keep our kids in public schools that are staffed with ignorant teachers if we can more easily afford the drive to a private school. We no longer have to live in hell-holes like Detroit or Chicago if the commute from the ‘Burbs is affordable. With our assets goes the tax base that people like Jesse Jackson vampire off of.

As for the whinging corporations? Can you imagine how the evil villains in the movie Solyent Green would have made out if I had set up JPW’s Chicken Shack right in the middle of their marketplace and gotten away with it? Innovative business strategies are an anathema to major corporations. So is technological progress and individual success by anyone not in the corporate boardroom. These corporations therefore buy leftwing political influence to prevent intelligent thought from being rewarded and to tamp down on any personal success that gets attained through the use of anybody else’s products. Moldbug basically screwed up when he failed to include The Forbes 500 in the membership rolls of his Cathedral. This is why all of the people I have written about above will massively intervene and thoroughly screw it up before any of us get to enjoy the positive and life-enhancing benefits of $10 per Blue Barrel oil.

Collectivism versus Capitalism

Thursday, November 26th, 2015


As you sit down to your Thanksgiving dinner, you will be full of thoughts of what you are thankful for. The most important ones you will not mention because they are invisible to you. You cannot see them because you enjoy them every day.

First on this list might be stability of your civilization, unlike every other human civilization which like Italian cars and German soap operas seem to be non-stop screw-ups from the start. Most people live in disorder, filth, corruption and incompetence. We here in the West do not, although the gap has narrowed over the past few decades, and not by the acts of others.

What got us this way are two things generally considered opposites: capitalism and collectivism. Both have been replaced by modern, inferior variants that are useful to our society only because they do not offend our leftist ideology.

Capitalism in its raw form is the idea that economic decisions should be made by those who will face the consequences for them. In other words, a bakery must make the choices that determine if it lives or dies, and citizens must make their own spending choices and thrive or flail accordingly. Keep in mind that despite those radical opposites, most of us fall somewhere in the middle.

Collectivism, in its original form, meant that we understood ourselves as a society and kept its interests front and center. That meant that we took care of people who helped that society, in accord with Plato’s “good to the good, bad to the bad”: people who do good should be rewarded, and people who do bad should be driven away. It is natural selection in its social form.

These two offended leftists, naturally, because leftism is based on a single idea: “I deserve to be included for society no matter how little I contribute or how delusional I am.” It is freedom not to be accountable to reality. That is why it is eternally popular; accountability to reality determines who thrives and flails, and so it is not a popular reminder among humans. Using social control, which is peer pressure plus the assumption of goodness, they can banish reality and replace it with equality.

(That summarizes leftism from nose to nethers as far as its essential ideas; it is subsequently draped in layers of theory, studies, facts/interpretations, emotions, etc. that are mostly gibberish and always taken out of context. If you see a leftist, watch their hands instead of listening to them speak. They are most likely lifting your wallet.).

Both capitalism and collectivism have now come to mean something else through the transformative powers of leftist ideology. If our society has one disease, it is the use of a broad and simple idea to replace all other ideas, and in this case, liberal egalitarianism has replaced the original meaning of these terms.

Traditional society liked capitalism because it was efficient. Capitalism has never existed without restrictions because, before modernity replaced the idea of having a goal as a civilization with the notion that civilization existed solely as a means of empowering the individual to be a precious snowflake, capitalism was always subordinate to goals, values, social standards and practical demands. There were also legal restrictions placed on it, usually to protect the consumer but just as often, to prevent the boom/bust cycle where something makes a lot of money so everyone does it, neglects everything else and in the process bankrupts themselves. Crazes, trends and fads are as destruction in markets as they are in society itself, and just as vapid.

But the traditionalists had a different approach to regulating it. Instead of writing a million laws, they allowed organic forces — culture, religion, superior individuals, and social standards — to regulate demand instead of supply. Where moderns tell businesses what they can manufacture, the traditionalists tuned in their people to certain ideas of what is good, and regulated products through that. As a result, things were built to last, more elegant and often far more effective than their modern variants.

In the same way, collectivism has been spoofed. Once it meant that we were all in it together working for the same goal, so anyone who was trying to do that was welcome. This offends the leftist idea of universal inclusion, which has its roots in individualism: the individual wants to always be included, so he desires the removal of any restrictions on who is included so that he always makes the list. After leftism, collectivism means that we all work and throw money into the pot to support everyone else, no matter how useless they are — or how much we dislike them.

A healthy society needs both of these forces. A civilization cannot exist by economics alone, and by making the choice to use solely an economic system — capitalism or socialism — the society signals to its people that it will not have a values system, competent leadership or purpose, which turns people into miserable drips who feel correctly that their lives are without meaning. A society cannot exist without some sense of guidance, direction, and purpose, which is why traditional collectivism is needed and not its modern variety, which obliterates all of those with a single guilt-ridden imperative to be uncritical, non-discriminatory and in other words oblivious in choice of the people surrounding you.

While I admire the French New Right, I find their continued embrace of socialism to be problematic. Once you create benefits, you create an all-powerful state to enforce them, and you destroy the idea of regulating inclusion by who is useful. No society with standards that low can exist, and it imposes on people an immoral duty to spend their time, which translates into money, supporting those who they would not otherwise support. For this reason, socialism is the great evil that destroys societies and rightists should never support it. Under socialism your entire society becomes contorted to fund the bennies and justify them, even at the expense of society itself.

By the same token, I find the reliance on absolute capitalism as a motivator to be unworkable, which is why I am not a libertarian. Libertarianism always shifts leftward because it is based in the egalitarian idea of “Everyone do what they want, and the best will magically rise to the top.” This is far from true, as any look at the most popular movies, music, art and novels will show us. Instead, pure capitalist societies are a race to the lowest common denominator and, like socialism, they replace the idea of a purpose to the civilization with the idea of it facilitating individuals. This is also bad.

I have said in the past that if people were to look more deeply into mainstream conservatism, they would find a way of life more radical than their ideologies and economic systems could ever be. That is because the roots of mainstream conservatism — now buried under layers of lies by 75% leftist “neoconservatives” and “libertarians” — are extremely radical. In that view, most people are scatty little monkeys who will if the whip is not cracked simply engage in every venal behavior possible. No matter what economic or political system we use, the truth of humanity remains and never changes, so we must first look toward producing healthy individuals. That requires the opposite direction from egalitarianism and infuriates liberals, but it explains why conservatism is less formalized.

The idea from which conservatism arises is traditionalism, which has been around in many forms over the ages. It is basically thus: over the centuries, we have found some things that work and some that do not. These do not take the form of ideology, but of knowing our world and its logic, so instead of being individualists, we submit to natural order and find our place in that. Then we are known by how well we rise to that challenge and what it reveals of our moral character, which is the most important part of an individual. By applying this rigorously, we can breed ourselves into a better class of people and make a civilization as great as that of the ancients at their height.

Naturally, this is not a popular message. 5% of the population can understand it, so to the rest it sounds like gibberish and they hate it for making them feel dumb when they desire the pretense of intelligence (they do not understand the Dunning-Kruger effect either). Even among those 5%, traditionalism is controversial because it places limits on the individual, and they have been raised in a civilization that thinks the ultimate good is liberating the individual from limits, even — especially — reasonable ones. This is why people always look for an ideological solution, and choose variants of capitalism and collectivism as the answer when they need a more nuanced approach.

The importance of a nuanced approach is that it avoids collapse. Rigid, sharp-corners thinking like leftism and libertarianism will run a society into collapse as paradoxes emerge based on the attempt to impose a square form over an organic topography. This will force people to deny reality so they can keep ideology intact, and will then cause massive internal friction. On the other end of the pendulum’s swing, however, it is important to remember that both collectivism and capitalism — in their original forms — are vital, and trying to stop the decay brought on by liberalism by limiting them will also lead to failure.

The Economics of Metapolitics

Tuesday, July 19th, 2011

Since the middle of the nineteenth century, much of the history of the Western world has revolved around the clash of different economic theories. First you had David Ricardo and Adam Smith who laid the groundwork for the principles of the Capitalistic system, meaning free enterprise and private ownership under the market-mechanism of supply and demand. Then you had Marx and Engels who declared that the a specter was haunting Europe; their Socialism was said to be a mixture of German philosophy, British economic thought and French spiritedness for revolution. The idea was that the Capitalist system in its desire for profit would create a hoard of unruly and deprived workers that would tear down the Capitalist rule. And then of course everything would be equally divided.

These two economic theories soon drew in all sorts of intellectual notions and thus developed into full-blown ideologies. Throughout the twentieth century the two schools fought each other all the time, resulting into the Russian Revolution, the Red Scare, and the Cuban Missile Crisis. Due to the rise of nuclear weapons both sides became so powerful that the whole world would be destroyed if they openly fought, thus began the era of the Cold War. Oh yes, there were also Hitler and Mussolini and their economic systems, which seemed to do really well for a while, but nobody knew what those were really about. Thus they were regarded with suspicion by both of the Big Schools, and quickly disposed of, so that the conflict that really mattered could continue.

However it what soon revealed that people always work harder and more readily when they work on that which is their own, since they learn to love the very soil which yields in response to the labor of their hands, not only food to eat, but an abundance of the good things for themselves and those that are dear to them. And in the Socialist system everything belonging to everyone and thus to no-one. Hence the end of the Socialist regimes, weathered down by the economic inertia of the masses and the strangling government bureaucracy. Francis Fukuyama wrote in The End of History that Western man had left the primitive Germanic quests for honour and glory behind him, and that all he really wanted now was to drink cola and eat fast food. And watch “beer-drinking-buddies sitcom style soaps”, as Brett Stevens might say.

1-0   for Freedom.

Or so we thought.

Let’s look closely; what happens under Capitalism? Do men learn to love the very stock certificates which yield cold cash, in response to the labor of someone else’s hands? For the original Humanist economists like Ricardo and Smith, the justification of private property had always been tied, at least as an ideal, to ownership and labour going conjoined. I mentioned that Capitalism and Socialism started out as economic theories, but quickly drew on all sorts of intellectual notions. This is why the majority of Americans think that a victory for Big Business, since it is a victory for Capitalism, is also a victory for Patriotism and Christianity. What people usually don’t take account of is that:

  1. The original economic philosophers of Capitalism saw labour as a self-elevating, maybe even ‘sacred’ activity that helped to develop a man into a more complete person, by honing his talents, crafts and skills. They never worshiped Capitalism as what it is today; reverence for supposedly ‘smart’ individuals, who got rich through playing around with stock-shares and currency speculation, who have never done an honest day’s work that produced something actually useful for someone.
  2. The idea was that one should earn good money for good quality work, meaning by producing something beautiful or functional to others. The founders of Capitalism didn’t envision Capitalism for what it is today; call-games on television, tricking people with fishy contracts. I’ll always remember the story of cousin Ricky (not my cousin though): His job was to call people up to remind them to pay. However he wasn’t to call at the last two months of the year. Since the contract said they had to pay one month at the time, except the last two months, these had to be paid simultaneously in November. If they failed or forgot to do so, they had to pay another year extra. The contract simply ‘hoped’ that people would forget this. Today, Capitalism is a system that destroys common human courtesy. And so much for Patriotism, because those men in Big Business really don’t care whether they’re working in the U.S.A.,Mexico or Thailand. They move their factories to where production and shipping costs are lowers.
  3. Usury – has nothing to do with hard labour. Borrow 100 dollars from a bank, and pay 120 back. The bank vouches for your 100, where do you get the other 20 from? From another guy. Now ask yourself how the other guy got his money to pay you. Hopefully you get it. If you do, ask yourself the question why monetary theory isn’t taught at school. I’ll lift a tip of the veil for you; your currency is confidence. And the stronger the threat of confiscation and being thrown on the streets, read; the more debt, the better, because you’ll produce goods and services by working. It’s not the money that the economy depends on. It’s on you providing goods and services. Because that’s what keeps people alive. Now you may understand why that debt counting billboard thing in Los Angeles keeps going up despite Obama’s promises that it will go down.

Does all of this mean that I worship some sort of anti-Capitalist ideology? No. I only follow whatever combines Truth with Power. I’m simply putting the objective facts before you on the table.

Economic Productivity is this:

  1. People who produce the needs of basic living to keep themselves alive.
  2. Have a group that is sufficiently large to provide the needs to sustain themselves. And then a bit extra.
  3. This ‘extra’ can be used to allow people to exist who exercise professions that enrich the general quality of life.

Globalist Economy is this:

  1. Have banks that people have confidence in.
  2. Let people spend money in the name of these banks, regardless of whether this money exists or not.
  3. Have an economy of people who are paid to do the administration of using this ‘money’ to attract the goods of life necessities from elsewhere. Hence, our economy has been almost completely severed from the actual requirements for sustaining a human life. Our economy has become a self-serving bureaucracy. The fact that it produces pointless administrative labour that doesn’t feed or clothe anyone is irrelevant – people are paid in wages of bank money. They can use this to buy the actual products they need from elsewhere. People who produce goods and services believe in the banks, and owe money to the banks. Thus they work.
  4. You probably do administration somewhere and lost touch with the thing your line of work is producing. If you could see what you had made from beginning to end, that it was a good quality product that would make someone’s life better, then perhaps you could have been proud of that product and of your job. You are a gear in some administrative system somewhere. You do what you’re told and don’t overstep your strictly delineated eligibility / authorization. You’re effectually interchangeable with a Russian bureaucrat stuffed away behind the Iron Curtain.
  5. Work is essentially organized occupational therapy. This can go on as long as (a) money can be rented out without limit, and (b) people who create the goods of basic life necessity accept the money. However the monetary system itself is flawed since there’s an infinitely greater amount of rent that must be paid over money than there is total money in the money pool.

It’s really this simple: A country can never go bankrupt if the basic life necessities of people are provided for. YOU can’t go bankrupt as long as you are capable of providing your own basic life necessities. Therefore I suggest you buy a piece of land and start an orchard. I’m serious though; you just keep your eyes fixed on that board in Los Angeles. The only way America can be saved is if this post is printed, put in an envelop and sent to the White House, so that Obama can read it in front of the cameras as his speech to the nation. (Except then this last sentence shouldn’t be read out loud – so that we can see if he reads his speeches first before he speaks them openly.)

I suggest that the economically unproductive are summoned from time to time to do labour, by herding animals, growing fruits and weaving cloth at special sites. They won’t be paid in money but they will be paid in the products produced in other of these sites. In exchange for growing fruits they’ll receive meat and clothing, for example, or other products if they choose so. This has the benefit that their existence can be provided for independently of the monetary economy. Therefore there will be a disentangled economy, so that the second half of the economy, the monetary part, can fall back upon the first part. You see, the second layer of the economy, what we’re all focused on right now, is all play (stock-shares, administration, internet-marketeering). The economy that provides for our lives is what should be any sane government’s top priority. Ask yourself the question: ‘How come that can exist at this very moment?’

Some have argued that the best system is a mixture of societal Darwinism, tribalism and monarchy, leaving the individual to succeed . . . AND to fail on their own abilities. However I fear that most people are too whimsical, whishy-washy and/or irrational to be truly left to themselves without direction given to their lives by others. Leaving them on their own might destroy the worth of life since it would probably lead even more of an MTV-society, which is really what we have right now regardless of all the government economic intervention and welfare programs.

People have not been instructed in Freedom – they have been taught entitlement which is something quite different. And with an MTV-society I mean people being only interested in one another in so far as they have happy clappy feelgood stories to offer that make teenage girls giggle. They feel lonely and miserable, because others wont listen to their inconvenient stories of pain or suffering, won’t help them out of their emotional isolation – but when others have a comparable problem they’re suddenly not home.

And whose fault is that? Ignorance is to blame. Lack of principles, lack of discipline, lack of reason. This really comes back to it that we are living in a service-industry driven economy, not production – almost no-one makes stuff. We only service others; we’re employed by banks and stores.

People could be great if they are taught the right ideas. The idea that their labour is something they can take pride in, if they do it good. But instead people see their labour only as something they do to get their next quick fix; some sort of consumption thing which leads to an empty and unfulfilling life. This unfulfilling life gives rise to triviality to fill this emptiness. This leads a cheap infotainment industry which drowns out any form of cultural greatness. So that man has nothing left to live up to, and thus he sinks into fatalism.

Why Europe is in better economic shape

Wednesday, April 30th, 2008

Europe…has high domestic savings rates and balanced trade accounts with the rest of the world. Europe, unlike the United States, is not increasingly in hock to China.


A senior French banking official told me, “If a banker promoted these subprime mortgages here, he would go to jail.”


In a recent interview, Germany’s Gunter Verheugen, vice president of the European Commission, told me, “We need a strong and competitive industrial base in order to have a strong service economy. Don’t try to be cheaper. Try to be better. Don’t try to compete on low social standards.”