Layers...

Why do concepts, which seem 'self evident' to me, take so long to get across to others? I asked myself that question a few weeks ago and it has taken me this long to come up with an answer. The fact that it took me a few weeks is itself a hint of what the answer is. Layers.

Knowledge and insight come in layers. Let's say there is a concept that is several layers deep, we'll use 'Non-interventionist Foreign Policy (NIFP)' for an example. In my case, the foreign wars were justified because of the reasons given for their necessity such as

• we would rather fight them over there
• they are trying to kill us because we are free
• they are trying to kill us because of our lack of morals
• to fight them is patriotic

These layers are pretty shallow and easy to get behind, so when an alternate view comes to light, it may be rejected out-of-hand. After all, I have already come to a logical, reasoned conclusion. But then I hear from this person whom I respect for other policy positions, so I listen to these conflicting theories:

• we can't afford to police the world
• we're less safe because our resources are spread out all over the world
• we have no business involving ourselves in the internal conflicts of other countries
• they are angry because we are over there
• our relations would be better with other countries if we would simply trade with them, visit with them, go to their picnics, and keep our nose out of their business

Of course I reject these notions. It's not our fault that they want to kill us. But I do get the one about not being able to afford to police the world, so perhaps I have absorbed one of the layers.

As the border debate heats up, I realize the importance of border security. If millions of Mexicans can cross, then it is not a stretch to think that thousands of terrorists can cross. Securing the border is a duty of the federal government and, politics aside, having our troops deployed overseas means they can't be deployed at the borders. If Al-Qaeda draws our troops over there, large security holes are created over here. Divide and conquer. Now I'm starting to pick up on another layer of the NIFP.

As time goes by, I see freedoms and liberties being yanked out from under me and my government forcing upon me that which it thinks is best. It's a huge snowball, and I saw it coming years before, but it did not look threatening at the time so I went on about my business. Now I don't know how to stop it! Why can't they just perform their enumerated duties and leave this other stuff to the states? If this federal control of my life is upsetting to me, maybe there is something to the idea that people in other countries get upset when we try to interfere in their affairs. Now I'm starting to understand another layer of the NIFP.

So how can these people be angry at us for being over there? We're just there to help! I suppose that an Afghani mother could have misguided anger toward the US if a drone strike inadvertently hits her house and kills her family. She might be angry along with her friends and extended family. The fact that her family was not the target will have no effect on her anger. On a broader scale, we have troops in foreign countries to keep the peace, or perhaps it is a benign presence except for the implicit 'I dare you'. Then we send money to support governments such as Israel, but we also send money to their enemies. We're playing both sides! Perhaps the people of foreign countries think that they are smart enough to determine their own destiny without the help of the US; just like some of us in the US think that we can determine our own destiny without the help of the federal government. I'm starting to understand the motivation of rebels in other countries.

I look at our prior foreign manipulations and conflicts with the benefit of hindsight. We have worked to overthrow Iranian governments (careful what you wish for). We have also armed the Iranians because they were fighting Iraq, and at other times supported Iraq because they were fighting Iran. The enemy of our enemy is our friend. We have been allies with Saddam, then we tried to kill him, allies with Bin-Laden, now we're trying to kill him, for 30 years we have propped up Mubarik, now it appears that our efforts were not appreciated by the Egyptian people. So why not mind our own affairs and leave others to mind theirs? Recent events prove that they are willing and able. I'm starting to grasp another layer of the NIFP.

My turning point was when I watched a video and the question was asked, "What would your reaction be if Chinese tanks were roaming through your city telling you when you could and could not come out, and Chinese troops were busting in to your house at will? Do you think you would retaliate"? That was the light-bulb moment for me.

The theory of layers explains why it can take months and years of repetition before a person's opinions change. Concepts with few or shallow layers can be picked up more quickly which is why sound bites are so effective, they are one layer deep. I've reflected on my own political progression and I have watched the slow, incremental absorption of layers by people around me. I have watched people mature (politically) in areas such as foreign policy, gun rights, and economics and that reflection has led me to this article.

If my Theory of Layers is correct, it proves that my theory is at best incomplete, and at worst inaccurate. Oh my, a recursive theory. I'm so confused!

-- Jim

Ron Paul Predicted The Collapse In 2003 - Morning Joe 5/15/2009

A 2009 interview about a 2003 prediction.

Predictions from April, 2002

Today it's time to go back and see who saw it coming.

Can somebody find me a similar prediction video by other potential candidates such as Mitt Romney, Tim Pawlenty, Mike Huckabee, Sarah Palin, Rick Santorum...? Radio clips would also work. I know Herman Cain has a radio show (in Atlanta I think).

It's time the American people reconsider what a president should be like.

Oh, Lord have Mercy; We Need a Balanced Budget Amendment!!!

This is what many of the new lawmakers and many of the old lawmakers are saying as they try to capitalize on the fervor. The BBA is a different debate for a different time, especially since there is no danger in it passing in the foreseeable future.

If lawmakers were serious about a balanced budget, all they would have to do is stop raising the debt ceiling. KISS! Budget balanced.

If lawmakers were serious about lowering the debt, which a balanced budget DOES NOT DO, they could simply vote to lower the debt ceiling. KISS!

Perhaps this should be a separate post, but the prior debates are irrelevant in our current system where all our currency is borrowed from the FED. This debt can never be paid back!

Check this out:

Say we open a little country and start from scratch. We decide to have a central bank to furnish and manipulate our currency. To run this new country, we need to start with $100, so we create a bond worth $100 and pay 5% interest on the capital.

We issue no more bonds and thus receive no new currency from the central bank.

Now let's say after one year we change our mind and want a different currency. How do we pay the central bank back? Including interest, we now owe the central bank $105 but there is only $100 in circulation in the entire country! Our little government does not have the money to pay its debt once the first penny of interest has accrued!

This is a grossly oversimplified description of our current system, but it shows that the system was set up to take the power from the government and put it in the hands of a few unelected decision makers, and it was set up in a way that will make it very difficult to overturn.

By simple arithmetic we have shown that payment of the national debt is not possible under the current system. Any attempt to pay down the debt will cause a contraction of the money supply, which is not a bad thing but it will cause economic corrections and it will look like a bad thing.

The only way to deal with the national debt is to first eliminate the current central banking system.

Jim

America Swings like a Pendulum do...

The concept of rational expectations is not an oxymoron. Rational expectations would lead workers and firms to make predictions about the effects of monetary policy and there would be no effect on unemployment. You wouldn't have to worry about losing your job (except for the peripheral effects of other people not using rational expectations as a basis of their negotiations).

This concept helps me make a point about cause and effect. If you help Peter, you hurt Paul. Monetary and fiscal policies cannot effect long-run economic changes. Therefore, these policies are bandaid policies that cover up the injury and postpone its natural return to equilibrium. If you use iodine on a cut instead of a bandaid, your cut will heal faster but the initial pain will be greater.

In order to achieve equilibrium and have a stable economy, we need to abolish the Fed and get the government out of economic policy. Economic data has shown time and again that equilibrium will be achieved despite what the Fed or the government does. Their actions change the short-run dynamics and exacerbate the problems; extending the length of economic downturns.

Think of a swinging pendulum. If you leave it alone, it will eventually come to rest pointing straight down; its point of equilibrium. If, instead, you give it a push toward the center when it has almost reached the left or right end of its swing, thinking that this will help it reach its equilibrium point faster (because you are pushing it toward the center), the actual effect will be to increase its swing. It will then move farther the other direction than it would otherwise have traveled. The more you try to help it, the wilder its swing will become.

It may be true that you can help achieve equilibrium faster if you push the pendulum to the left just after it has started moving to the right, but in economics, that point is hard to predict. Or impossible. The reason is that the data used to determine the swing of the economic pendulum is not available until the pendulum has moved to a far different position.

Keynesian economics is bandaid economics. Hayek economics is iodine economics. Unfortunately, almost all politicians follow Keynesian economics because the bandaid feels better and has colorful cartoon illustrations on it.

Jim

Simple is the Solution... now what's the question?

Capitalism is not the problem. The problem is corruption and lack of law enforcement. DC and Wall Street are so intertwined it's like they are two divisions of one entity, each helping the other to do their job in a manner that is mutually beneficial. Who was helped by the bailouts? Wall Street executives. Who conducted the bailouts? Ex Wall Street executives. Who was complicit? Blatantly, two congresses and two administrations, but there has been less blatant collusion for a century. Due to their corruption, Government is the problem.

Capitalism is the methods used to capitalize on situations available in the environment that has been created in which to operate. However, though the environment is technically the same for all, some are allowed to operate outside that environment and operate in a manner that would be illegal for you and me. It is illegal for them too, but they know they won't be brought to justice, and if they are, the justice will cost less than their profit. Government is the problem.

Capitalism is not the problem. Government's original role was to protect individuals' rights. To intervene when other individuals or entities violate those rights through fraud, theft, physical harm, or whatever. Transactions can be freely undertaken by and between individuals and other entities. Each party can know the details of the transaction and decide to enter into it or not. When one party does not uphold its end of the bargain, the government must intervene, otherwise the government has no business in the transaction. Instead, the government tries to legislate transactions and alter the environment under which these transactions can take place. Government is the problem.

Take, for instance, health insurance. The government and the insurance industry, along with the AMA and the pharmaceuticals industry, set up a system that would dictate how people would get medical treatment. The AMA said, "No chiropractic, no Eastern medicine, no homeopathy". The pharmaceuticals said, "Vitamins are bad, drugs are dangerous and need to be prescribed". The insurance industry said, "We need to create an environment that causes all insurance purchases to go through employment so we can sell big policies to large groups instead of small policies to little people. It must be tied to employment since that is where most of the healthy people are". The government said, "Ok. We'll regulate drugs to increase the cost, we'll disallow treatments not approved of by the AMA in order to create a monopoly, and we'll give tax breaks to people who buy their insurance through work". Government is the problem.

A different kind of example, the Department of Education. "We think all children should be vaccinated; if you don't get all your students vaccinated, we can't line the pockets of the pharmaceuticals and we won't send you any of that money your state sent us in taxes, so DO IT!". "We want all kids to be in school, regardless of their ability, their desire, or their demeanor. Therefore, we will pay you for each child you can get to say 'present' each day. The more you get, the more we pay. If you expel Big Bad Billy Bob, we will pay you less. Go ahead and let him disrupt class and terrorize other students, just MAKE SURE HE GETS TO CLASS!". "We decided that we want no child left behind. The way we will accomplish that is to ensure that you allow no child to forge ahead, thus leaving others behind. We will implement this plan with certain tests. Your job is to teach the kids how to pass these tests; if they learn something along the way, great. If you don't do what we tell you, we will close your school, so DO IT!". Question. Once we achieve 'No Child Left Behind', and everyone gets a college degree, who will pluck chickens? Government is the problem.

The more laws our government passes, the more corruption we can (and do) have. These laws that are written to guard against these capitalists are aimed toward the little capitalists to keep them from competing with the big capitalists. The big capitalists are nice people; they volunteer their time to help government by actually drafting these laws against themselves! They even help congress to create the loopholes they need in order to operate unencumbered. How nice is that! The more laws our government passes, the less freedom we have to make our own choices. They help us by telling us we can't buy Penicillin without their permission. They help us by giving us a tax break on insurance, as long as we buy what they allow, from whom they allow, with the terms they deem appropriate. Politicians allow this to happen. Government is the problem.

If government had little power to control people or economics, she would not have any currency to bargain with when the lobbyists come knockin'. Corruption must have a currency or it can not be transacted. If we lessen government's power, we lessen corruption by the same degree.

Using one of the examples above, what if the federal (and state) government did not collect or distribute tax money for, or make rules for schools? The county would have to collect money for school funding and it would directly affect those who are paying for it. It would be much more efficient, right now we send $100 to DC and get $60 back. If this were all done at the county level, it would be $99. Then, if Johnny is a bad kid, we could kick him out of school and send him to chicken-plucker school, or carpentry school, or whatever would work best for him. Simple is the solution.

Jim

Deficits are illeagal, immoral, and unethical

I read this question (the actual question is the last sentence):

"History is unfolding right in front of our eyes, in excruciating slow motion. Economic and financial records are being broken every day, it seems. Consumer prices plummeting. An unprecedented housing market collapse. Huge companies going out of business overnight. Dizzying price movements in the stock markets. The old saying "Who'da thunk it"

In case the previous question was not hypothetical:
Two answers are Ron Paul - as far back as 2002, and Peter Schiff - as far back as 2006 (find the videos on YouTube). Paul was laughed off the Presidential debate stages and Peter Schiff was laughed off the Financial shows (before the tanking economy).
I appreciate this person's discussion of the causes of economic calamity and the result of money printing (not shown), but this is not an 'iced tea on the porch' conversation; in the words of Joe, "This is a big f*$^@ing deal"! Think of it like this. For all intents and purposes, this started in earnest with Reagan, enabled by Nixon:
* Nixon removed the last vestiges of the gold standard from our currency ("We are all Keynesians now"). He installed the air pump on the giant jumping balloon for the kids to play in, but he did not turn it on.
* Reagan turned on the air pump by borrowing gobs of money (by '80s standards)
* Bush Sr. cranked up the voltage
* Clinton left it alone (He had a negative deficit, but not from spending cuts. That was the dot.com boom)
* Bush Jr. cranked up the air some more. That helped for years, but then we started running out of source air, so he added another pump then said Bye Bye
* Obama said Hi Hi and added another pump, two capacitors and a turbo-charger. The atmospheric pressure on the outside of the tent/balloon went to 0.1; which is not a vaccuum. So if matter exists in the source, it can be extracted but it takes a lot of pumping to extract that last bit of air out of the fed.

So now the balloon is aired up, even if precariously so, and the economy is functional for most. But what happens when the tent starts to deflate again and there aren't enough pumps to keep it pumped up? That's when the inflation will really kick in because their solution is to print money (pump air). A teaspoon of sugar in a cup of coffee makes the coffee taste sweet. A teaspoon of sugar in Lake Superior makes an empty teaspoon. Dilution will happen for dollars, and when that happens, the tent is coming down on the heads of the cute little children and they won't be nuthin nobody cin do bout it. (What to do about it on request...)

Will it happen this year? Not before December at least. Turns out, President Obama has an extra pump hidden in his trunk! Come September, he's going to pull it out and hook it to the tent, then it's pedal-to-the-metal! The extra pump I speak of is the rest of the $787B stimulus. Elections hinge a lot on the economy, so I expect the economy to get one last boost in September. Then our source air will be completely extracted and the dollar will fail next year.

Deficits are illeagal, immoral, and unethical, and those who don't understand that are deficient in basic arithmetic. Or corrupt. Someday I may break down a transaction to its simplest terms and explain it; but not today.

Jim