Confidence and Ignorance Shouldn’t Go Together

education animal-house-posters[1]

Confidence is a good thing when there is reason for it. Capable people generally are confident and they should be. But should confidence and ignorance be paired together? Most people would think not, but not the American school system.

Knowledge and confidence are natural allies but confidence and ignorance are not.

Knowledge is necessary to succeed. Confidence is also integral to success. Ignorance is an impediment to success. But confidence paired with ignorance is worse than ignorance alone. 

The school system in the US now specializes in imparting confidence to its captives. Self-esteem and political correctness are more important than knowledge. “No child left behind” has come to mean that nobody fails, regardless of whether they learned anything or not. As a result, the country becomes increasingly populated with confident ignoramuses. These people have been taught and believe that their opinion on any matter is just as valid as someone knowledgeable in the field. Isn’t that what democracy is all about?

mark-twain-portraitMark Twain described education as

… that which reveals to the wise, and conceals from the stupid, the vast limits of their knowledge.

The US educational system now specializes in the latter half of Twain’s definition. That is a tragedy. More dangerous is that these people believe they are educated and have been taught to be confident in spite of their ignorance. Ignorance is better served by humility, not confidence.

Schools must get out of the confidence, self-esteem and politically correct mode. Knowledge conveyance, not lock-step behavior and a false sense of one’s self, is required. Convincing incompetents that they are competent puts them on a path that leads to failure and disillusionment. Is there any other industry so cruel and unethical to their customers?

Turning out ignorant people may make it more convenient for the political mountebanks, but it is ultimately destructive to individuals and the society in which they reside. If politicians insist on creating more political pawns through ignorance, the least the schools can do is to stop instilling confidence where it is unwarranted.

Competent people should be confident. Incompetents should recognize their limitations, not be praised for them. Everyone has a right to make a fool of himself. Sadly, the majority of our young cannot even discern when this occurs. The fools don’t even recognize they are fools.


Freedom and Tyranny

Guest Post by Monty Pelerin

freedom (2)

freedom123Freedom and Tyranny

TYRANNY_and_FREEDOMFreedom and tyranny are opposite ends of a continuum. They compete for the same space. More of one means less of the other.

Proponents of big government complain that tyranny is a loaded term designed to inflame. Some are so foolish as to argue that more government means more freedom. These people do not understand the incompatibility between force and freedom.

Thomas Jefferson provided a simple test:thomas_jefferson_presidential_dollar_500

When the people fear the government, that’s tyranny; when the government fears the people, that’s freedom.

By Mr. Jefferson’s standard, few would claim that tyranny does not dominate today. But there are more sophisticated means of judging today. A recent study ranked the United States, the former bastion of freedom, behind more than forty other countries on a freedom scale. This regular survey has consistently shown the US falling against other nations, many of whom themselves are declining in freedom (just not as rapidly as the US).

The issues of freedom versus tyranny are as old as man. James Turk explains:

… authoritarians and other sociopaths seek one thing above all else – control. Some are satisfied with just dominating the local PTA, but others want to dominate the world. It is just a matter of degree, but these people exist. And they will do whatever they can to smother the rights of others, which recurs time and again throughout history.

Philosophers through the ages have grappled with this problem. There has never been a real-world solution that has been permanent. At best tyranny is held in check for some period of time before advancing. Tyranny advancing is tyranny strengthening. Higher levels of tyranny advance faster than lower levels. Freedom is overpowered and eventually distinguished if the process is not stopped.

The rise and fall of nations and civilizations is little more than the battle of freedom versus tyranny. Gains in freedom bring improvements. Gains in its evil opposite, tyranny, bring retrogression — declining standards of living, strife and ultimately collapse.

Solving the tyranny problem is difficult. Describing it is easy: How does one empower a supra-agency and then prevent it from abusing its power? 

Continue reading “Freedom and Tyranny”

Ayn Rand and Murray Rothbard

philosophy

Greek philosophersIn a recent article presented on this website and elsewhere, Brian Wilson presented the case for the impracticality or impossibility of limited government.

Ayn Rand and Murray Rothbard, two great thinkers of the Twentieth Century, both argued for an anarcho-capitalism world, i.e., a world without government. Ludwig von Mises, Rothbard’s mentor and a contemporary of Rand’s, argued for the necessity of some form of limited government.

Great thinkers have taken different stands on the issue of government and what role it should play in society. The following article appeared in the Daily Bell and is from a speech given by Nelson Hultberg. He argues that limited government is a happy medium between extremes. Mr. Hultberg makes some excellent points and serves to illustrate why the issue of government is such a difficult one.

In my introduction to Mr. Wilson’s article I referred to “limited government” as an oxymoron. I still believe that to be the case, although Mr. Hultberg’s discussion provides a good argument for why that may be the best solution to a difficult problem. If the problem of government were obvious or simple to deal with, then mankind presumably would not still be seeking a solution. A proper solution, whatever that might be, would make the world an infinitely better place.

Mr. Hultberg’s discussion is provocative and well-presented. It is drawn from his recent book The Golden Mean: Libertarian Politics, Conservative Values.

Ayn Rand and Murray Rothbard: The Verdict After Fifty Years

EDITORIAL
By Nelson Hultberg – March 07, 2015

Speech given to Freedom Fest, Las Vegas, NV

Good afternoon, ladies and gentlemen. What I will be discussing in my talk today is the crucial role that the ideas of Ayn Rand and Murray Rothbard have played in the defense of liberty and Western civilization.

All Americans well read in political affairs know of these famous thinkers. They were two of the most powerful and revolutionary intellectuals in the 20th century, contributing many valuable insights to our knowledge of philosophy, politics, and economics. As with most intellectual rebels, their major ideas about freedom and government were highly controversial. What I will do in this talk is explain what these controversies are, demonstrating the wisdom and folly of their ideas. As to which is the more prevalent, wisdom or folly, stay tuned.

I will also explain a new way for libertarians and conservatives to look at the political spectrum and the egoism-altruism clash that Ayn Rand promoted so dramatically. This will be done by using the Greek philosopher Aristotle’s famous Doctrine of the Mean and applying it on the macro-level instead of just the micro-level.

In doing so, I hope I can alert you to the immense importance of Aristotle to the cause of freedom and how his philosophical approach compares to that of Ayn Rand and Murray Rothbard.

Continue reading “Ayn Rand and Murray Rothbard”

The Nanny State

Nanny-State

nannystate1The FCC action with respect to the internet is pure nanny state behavior. But it is more than that! It is tyranny!

What does it say about freedom and liberty when five people can, without review of any elected officials, completely alter the internet? What does it say about the operation of government when the Chairman of the FCC refuses to appear before Congress to discuss what he is proposing? Just who is running this country and by what authority?

Does anyone believe the internet isn’t working properly? What is the purpose for this intervention? Are they fixing something not broken or is this infringement more ominous than that?

These questions reflect the imbalance between government and the people. Government no longer works for us. It is a force used to bend us to its will. It believes we work for them. As this decision shows, what we think does not matter. Furthermore, apparently what our so-called elected representatives don’t matter either.

The old USSR appears to have reconstituted itself on a different continent.


Us Against Them

Via Monty Pelerin

tyranny

Anyone looking at current conditions in the United States is struck by the us against them mentality that exists between the government and its citizens. There are no longer two political parties in the sense that they stand for different things. Both political parties stand for more power and control.

Increasingly the country is split. Two distinct groups are now at war with each other. It is government versus the people.tyranny1d

Those who voted Republicans in via a landslide in the most recent election now see that it doesn’t matter. There is little difference between Democrat and Republican politicians. The two “opposing” parties might as well be renamed the Bloods and the Crips. They both stand for the same thing and that is bigger government and less freedom. The brands may be different but that is nothing more than marketing. Both parties want the same thing and that same thing has to do with your wealth and freedom. Both will do whatever it takes to be in charge. The country does not matter. Only their position in the trough matters.

We are no longer a government of the people, by the people and for the people. We are now a country of rulers and ruled. We now work for government, not the other way around.

To accomplish this feat, government had to divide us, pitting one group against another. Then they had to define behavior (rights guaranteed via the Constitution) as questionable if not downright illegal. Michael Snyder collected 72 types of American behavior that is now considered dangerous by our government. It is difficult to imagine anyone not falling into one or more of these categories and not being watched by government:

Continue reading “Us Against Them”

John F. Kennedy in Today’s World

Kennedy

John F. Kennedy would be considered a right-wing Republican today. His ideas would not fit well with either Party.

Politics Today

politics1234Politics is vastly different from the politics that I first became aware of. Both parties have abandoned any sense of principle, at least with respect to honoring the Constitution. Instead of acting on first principles, all decisions are made on the basis of political principles. In that regard, both parties honor only one principle — do whatever is necessary to maximize the chance to get, or to stay, in office. 

Democrats seem to have lost their minds in this respect but it has worked well for them up until now. Republicans apparently don’t want them to feel badly or see the use of similar techniques to enhance their own political chances. As a result the notion of “government of the people, by the people and for the people” has been reduced to a cheap and ineffective Madison Avenue propaganda phrase. Every single politician violates his oath of office, knowingly and with impunity.

The most recent example is the so-called “amnesty” that President Obama declared. This declaration is clearly in violation of his Constitutional authority (as have been many of his other executive orders). The Republicans are willing to allow this violation out of fear that protecting the Constitution would jeopardize their chances in the next election. This is itself a violation of their oath to protect the Constitution. Their unwillingness to bring impeachment hearings on the grounds that Democrats would not go along with it is shabby self-interest. Not doing so is ground for their own impeachment. The fact that they seem reluctant to use the power of the purse to restore balance among the three branches rests solely on their concern that they will be blamed for shutting the government down. Contrary to their concerns, most citizens would welcome shutting the government down. All know that it has grown into a Leviathan which threatens the future of the country.

To understand how far government has deteriorated, one does not have to go back very far. John F. Kennedy was elected president in 1960. Examining his positions and comparing them with political practice today is revealing.

John F. Kennedy

kennedy-35th-president-1aJohn F. Kennedy, judged to be one of the great Democrat presidents (he wasn’t but that matters little), was more closely aligned with the ideas and ideals of Rand Paul and Ronald Reagan than with those of Barack Obama or any other current Democrat politician. Kyle Smith laid out some of JFK’s positions:

… Kennedy’s fierce anti-communism, his religious devotion (he gave faith-based speeches of a kind Michele Bachmann might consider extreme today) and his advocacy for low deficits, a strong dollar, free trade, tax cuts, free enterprise and individual responsibility. If JFK were here today, he would either have to renounce most of what he stood for or join the Republican party.

Smith added some quotes by Kennedy:

“I do not believe in a super state,” he said in a 1960 speech in which he declared himself a liberal, with heavy qualifiers that made him sound more like one of today’s conservatives. “I see no magic to tax dollars which are sent to Washington and then returned,” he continued, smartly summarizing the voodoo economics of Keynesianism. “I do not favor state compulsion when voluntary individual effort can do the job and do it well.”

Kennedy was not an aberration, at least in his time. Democrats were still rational, had the interests of the country in mind and adhered to the ideas that made the country exceptional. Today JFK is in the pantheon of Democrat heroes but not for what he believed in. Most Democrats still fantasize about “Camelot,” a fictitious narrative about Kennedy’s time. Almost all are repelled by his ideas and policies.

There would be no place in today’s Democrat Party for John F. Kennedy. If he had a place it would be as a Republican, but he would be relegated to the ranks of the outcasts of that party. His ideas today would reflect those of the disparaged Tea Party.

Just two decades after Kennedy’s assassination, Ronald Reagan was elected president despite the objections of the ruling class of the Republican Party to prevent his nomination. Reagan, arguably, was not as fiscally conservative as President Kennedy who had an economic philosophy similar to Reagan’s but without running up the debt. These were the words Kennedy intended to deliver in a speech in Dallas prior to his assassination:

“by maintaining a more stable level of prices than almost any of our overseas competitors, and by cutting personal and corporate income taxes by some $11 billion, as I have proposed, [we will] assure this Nation of the longest and strongest expansion in our peacetime economic history.”

Today we have two parties running away from the principles of the Constitution and the economic principles that created the wealthiest and freest nation on earth. Today it is assumed that we work for the political class and not the other way around.

Pendulum Politics No Longer Works

Guest Post by Monty Pelerin

Recent polls suggest a possible landslide election for Republicans. That is not good news for Democrats who, until recently, were buoyed by the possibility of retaining the Senate.

The shift toward Republicans results from Obama fatigue and disgust. On virtually every metric the country is seen as worse off as a result of his policies and lack of leadership.

If these findings are real and hold, Republicans will be celebrating on election day. But, should they be? Four years from now, does anyone expect the public to be more satisfied with Republican party performance than they are with Democrats today?

That this question can be asked and suggests its answer. It says more about the state of American government and politics than it does about the Republican Party.

Pendulum Politics

pendulumpolitics__9425918788_a61e4389e5_zObama was elected because Democrats and some Republicans were mad as hell at Bush and his party. Now we are at the opposite end of the pendulum’s arc — Republicans and some Democrats are mad as hell at Obama and his party for their performance. Pollsters are picking this sentiment up in their canvassing and reflecting it in their forecasting.

Pendulum politics refers to the natural inclination to replace someone that disappoints. It reflects quintessential American meritocracy. If America is “apple pie,” surely meritocracy is the secret ingredient in the recipe that made it so special.

The two most recent presidents were perceived as flawed, at least toward the end of their terms. Both had in-the-gutter approval ratings at the end of their terms.

The pendulum view of political replacement is consistent with what is happening today, although it is more likely that other factors are drive matters.

An Alternative View

Political and government aggrandizement has reached the point where the expectations of the public can no longer be satisfied. Government, in the process of grasping power and wealth never intended for it, made claims and promises that exceeded its ability to deliver.  As a result, it must disappoint.

John Kenneth Galbraith wisely observed:

You will find that the State is the kind of organization which, though it does big things badly, does small things badly, too.

No one ever looked at government as a paragon of efficiency. Until recently, government inefficiency was assumed and tolerable so long as government did not do much or waste too much of the country’s resources. As the State took on bigger and bigger tasks, government was increasingly seen as failing and incompetent. The costs of such failures became a bigger burden on the productivity of the nation.

The claims and promises made to enhance its power only raised the expectations of the public and the impossibility for government to be successful. As a result, government has guaranteed its perceived failure and characterization as incompetent. It has become so big, unwieldy and misapplied that no one is capable of running it well.

Anyone elected is doomed to failure and the ire of the American public. The problem is the system no longer work because it is tasked with things it cannot possibly do well, if at all. Government  is broken, at least from the standpoint of those who it pretends to serve. It works quite well for the political class and their cronies, enriching them in bigger and better ways with each election. Government has become little more than a plunder machine, draining the energy and creativity from the productive, while pretending to solve the problems it creates.

The failure is still reacted to by the public by “changing horses” via elections. But pendulum politics cannot solve the problem of metastasizing government. The majority of the public does not yet realize how fruitless elections have become, but they are beginning to understand. As Rasmussen concluded from his polling:

Fewer voters than ever think either major political party has a plan for the nation’s future, with most still convinced that neither represents the American people.

The End of Democracy

Voting out one party and in the other does little anymore. Government is too big and involved in too many things it is incapable of doing. Yet it continues to grow in size and power.

Both parties are incompetent, corrupt and self-serving, but both benefit from the scam. Every legislative day represents this trade-off:  how much more can be taken before the fools figure out they are being plundered.

Unless power is taken away from Washington, the next election will be a replay of this one. The country will turn on those currently in power and replace them with their opponents in the hopes that things will change. Continuing to repeat this process over and over will change nothing. Continuing to do this and believing that the results will change is merely another example of Einstein’s definition of insanity.

Democracy as we know it is about to end. It should! However, there are only two ways that it can end:

1. Government loses.

2. Government wins.

Government Loses

There is only one way that government can lose or be rolled back. We are past the point where the ballot box can effect such change. Virtually every election, at least at the national level, affords two choices — Statistism Heavy  or Statism Medium. Neither choice changes the continued increase in government growth. One party grows it slower than the other, but that is all.

It is not an accident that the Republican Party did not want Goldwater, Reagan or the Tea Party. They are the party of Statism Medium and any outsider threatens them as much as it does the Democrats. The two parties beat each other up in the attempt to lead, but they come together whenever their great scam is threatened.

The only way that government can lose is by voters rebelling demanding massive rollbacks in the size and power of government. That solution is fraught with danger, including a faster route to dictatorship.

Government Wins

If the current voting  system continues, the government wins. Each year it moves the country closer to totalitarianism, regardless of who is elected. That is ensured because of the candidates put up for office.

Those who hated George Bush six years ago gave us Barack Obama. Those who now hate Barack Obama will give us someone else who will be appropriately despised after a brief honeymoon period.

The horrors of democracy and the abandonment of the Constitution are responsible for the current condition. Democracy is going to end under either solution above.  Unfortunately something much worse could be in store.

As a citizen, I would rather risk everything to save the country. Not taking that option ensures a slow and certain death to what freedoms and prosperity remain.

The Democrats’ and Media’s Obama Problem

Guest Post by Monty Pelerin

obamatrustmeThe Democratic Party and the mainstream media joined to run interference for Barack Obama when he became a national figure. Obama was painted as a charismatic, competent, new kind of politician. The passage of time destroyed this image. Now, the public increasingly sees Obama as incompetent, untrustworthy and unmotivated.

Supporters are now in an awkward position. Do they continue to support what is increasingly seen as an inept president or do they turn against him?

Continuing the subterfuge is dangerous. Lending credibility to an incredible man is a certain way to destroy one’s own validity. Obama, once considered a savior and asset for Democrats, is now a serious liability. Defense of the indefensible was possible and advantageous when the public was unaware of the character and competence of Obama. His failed policies are now obvious, known by too many. If there were ever a “familiarity-breeds-contempt” president, President Obama surely is it.

The Obama Problem — A Decision Must Be Made

economy09-29-10outlookRGB20100929043641The decision to support or abandon a failed presidency is an easy one in an ideal world — the political class and the media should do what is in the best interest of the country. In Obama’s case that would mean wholesale abandonment by both groups. However, such a world doesn’t exist. Honor, integrity and considerations for the greater good are trumped by politics. Political agendas dominate and will ultimately determine how Barack Obama is treated by his once-fawning supporters.

Consensus does not exist with regard to the Obama problem. Democrat politicians and media supporters are convenient classifications, but they are not homogeneous groups. Individuals within these groups will make their own decisions. Unique circumstances will dictate how these individuals choose. Some are running for re-election, others are not. Some are in Red States and others Blue. The media has similar fragmentation of interests with respect to the Obama problem.

The calculus that guides Obama supporters will be determined by self-interest. It guides every vote and position taken by the political class. Crassly and figuratively, each individual will ponder this question: “Is Obama worth more to me dead or alive?” That is, am I individually better off supporting or abandoning him?

The titular head of the Democratic Party and the President of the United States has created such an obvious mess that cutting him loose may be the best option. How individuals in politics and journalism decide this question may very well determine the viability of their individual future success. Deciding incorrectly could truncate or even terminate careers.

obamalieDemocrat politicians and media supporters must make a choice and choosing incorrectly may be fatal.  The president has obviously failed and increasingly is viewed around the world as a laughingstock. I suspect that many will choose to stop defending the indefensible.

obamapractice5In my book Flim Flam Man I speculated on how this decision would have to be faced and how it would affect the media and the Democratic Party. Six months ago it was not hard to predict a continuing decline in Obama’s support and popularity. However what is happening now appears to be a complete and total collapse. For someone looking objectively at Obama’s performance, this outcome should not be surprising. The list of disasters is long – ObamaCare, millions of more dependents, a failed economy, a senseless immigration policy (save political considerations), blatant lying to the American public, a non-existent foreign policy, the Middle East a disaster, Putin openly humiliating him, flaunting the Constitution, and now a prime time presidential speech last night to ask for billions to fight ISIS, dismissed half a year ago as junior varsity, and arm the Free Syrian Army, dismissed only a month ago as a “fantasy” as potential victors over ISIS.

The biggest disappointment in this evolving condition is the corruption of the Democratic Party and the mainstream media. Have they misjudged the public and tried to defend the indefensible too long? Have they overextended their bluff? The 2014 elections will provide important insight regarding these questions.

The big risk with Obama was that there was no “there” there from the very beginning. Surely the leadership in the media and Democratic Party knew this risk. There was nothing in Obama’s background to suggest that he could handle the job of president. Investing in this inexperienced shallow man was a reflection of the low esteem in which both hold the American public.

Now Obama’s incompetence is apparent to all but the dullest of Americans. Just as the media and Democratic Party acted in their perceived best interests when paving the way for this man, they will likely act in their own self-interest by abandoning him to avoid being dragged down with him.

Both the Democrats and the media should concerned about survival. For many, how they choose will be existential. I suspect many will abandon this sinking ship.

The Obama Problem — Some Ominous Signs

Concerns regarding the once Wunderkind mount as the elections approach. Here are a few examples:

1. Economics

economy111The Administration and the media have trumpeted the economic recovery despite the fact there has not been one. A dangerous observation within the economics profession has just surfaced. Brad DeLong, respected Keynesian economics professor at University of California at Berkeley, stated the obvious — there has been no recovery! Furthermore, he actually used the D-word to describe economic circumstances:

By 2011, it was clear – at least to me – that the Great Recession was no longer an accurate moniker. It was time to begin calling this episode “the Lesser Depression.”

DeLong’s article was entitled The Greater Depression. For a leading Keynesian (and Democrat sympathizer) to even whisper about Depression is profound. To commit such thoughts to print is blasphemous. Keynesianism economics promised to end wide economic swings. There was never supposed to be another Depression. Yet, Mr. Delong ends his piece leaving few doubts:

When do we admit that it is time to call what is happening by its true name?

Mr. DeLong has not likely had an economic epiphany. He is still a Keynesian and that presents an additional danger for Obama.

The Keynesian religion is stronger than some political Messiah. Those who worship at this economic altar will defend their religion to the end. To successfully argue this conclusion means that the blame for economic outcomes will be directed at the Obama Administration rather than the hokum that passes for Keynesianism. Obama will become their fall-guy.

2. Foreign Policy 

ObamaForeignPolicyForDummiesFew defend Obama’s foreign policy today. Investors Business Daily, no friend of the president’s, provided some of the reasons:

This is not high school, and foreign policy should be conducted by adults. The real JV team is running the White House, led by what Ed Lasky in The American Thinker first referred to as “The Being There President,” one who likes to play golf when he isn’t fund-raising or taking selfies at gatherings of free world leaders.

Yet foreign policy was one of the rationalizations for supporting Obama. He was going to make the world love and respect us. He was not the Cowboy Bush but some Kumbayah alternative that would have us all singing “We are the World.”

3. The New York Times

The New York Times has been the Praetorian Guard for Democrats since Franklin Roosevelt. Articles critical of Obama never appeared when he ran for office. Few appeared during his first term. Now critical articles appear routinely. Maureen Down regularly mocks Obama. (Her Golf Address was clever and devastating.)

Negative articles are not limited to editorials. Here is a portion of a recent article entitled Obama Is Seen as Frustrating His Own Party:

In interviews, nearly two dozen Democratic lawmakers and senior congressional aides suggested that Mr. Obama’s approach has left him with few loyalists to effectively manage the issues erupting abroad and at home and could imperil his efforts to leave a legacy in his final stretch in office.

… what is striking now is the way prominent Democrats’ views of Mr. Obama’s shortcomings are spilling out into public …

NY Times-thumb-331x250-26060Articles questioning Obama’s integrity, intellect, ObamaCare, transparency, executive orders, etc. appear rather regularly. One might believe that Fox News acquired the New York Times given the tone of many of these.

Whether columnists and writers have seen through the man or whether they recognize that too many other people have, is moot. For whatever reasons most seem unwilling to continue to risk their intellectual capital and reputations defending the indefensible. they seem to have decided to stop investing their capital on his behalf.

When you lose the NY Times, who is left?  This bulwark of liberalism now seems unwilling to continue to cover for this failed President.

It will be interesting to see this tragedy play out. It is entirely political at this point. Ironically, it is politics that best protects Obama against an impeachment proceeding.  Obama defenders have been weakened in any defense, but the unprincipled Republicans would rather gain power than do the right thing.

Power over principles is the modus operandi of both parties.

Tulipmania

Guest post by Monty Pelerin

tulipmaniaWe are living through the modern version of tulipmania. For those unfamiliar with this early economic bubble, Wikipedia offers this observation:

At the peak of tulip mania, in March 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftsman. It is generally considered the first recorded speculative bubble (or economic bubble),[3]although some researchers have noted that the Kipper- und Wipperzeit episode in 1619–22, a Europe-wide chain of debasement of the metal content of coins to fund warfare, featured mania-like similarities to a bubble.[4] The term “tulip mania” is now often used metaphorically to refer to any large economic bubble (when asset prices deviate from intrinsic values).[5]

Our Case of Tulipmania

tulipmania1Tulipmania in our case has nothing to do with bulbs. Nor is it limited to financial market valuations. What the government has done has distorted stocks, bonds and non-financial assets. The economic scam that is being perpetuated is not limited to the US. Nor is it solvable in any way, regardless of what government does.

The problems arise as a result of decades of government meddling. Increasing that meddling in order to keep the bubble going solves nothing but the purchase of time for the scoundrels who created the problem. Only continued meddling can perpetuate the fraud — but only for a while.

The condition of the US economy is much worse than the political class wants you to believe.

Gordon T. Long provides his take on financial and economic matters:

None of this should be surprising. A welfare state always leads to economic collapse. Promises always exceed resources. Altering income distribution is not done in a vacuum. The production of income and wealth is not independent of its allocation. As the benefits of not working increase, the producers shift from producing to free-riding. That further worsens a government’s ability to honor unpayable obligations.

All Asset Prices and Allocations Become Distorted

As matters get worse, government (and the Federal Reserve) step up their interventions in an attempt to hide reality. None of this works, at least economically. It may work temporarily to delay the rebellion of the those raped by the policies. Zerohedge states:

… while we have explained countless times why central-planning always fails in the end, we will give the podium to Fred Hickey, aka the High-Tech Strategist, who gives a very poetic summary of what the Fed’s endgame will look like:

The Fed hasn’t made the world a better place with its interventions. It has created moral hazard, encouraged the formation of asset bubbles that eventually pop (leaving economic messes), widened the wealth inequality gap to record levels, discouraged savings and investment, severely penalized retirees on fixed incomes, encouraged spending, funded massive government deficit spending by monetizing the debts, lengthened the recession and likely reduced the number of jobs that would have been created if the economy had been allowed to take its normal course. Eventually the Fed’s policy interventions will also have created debilitating, widespread consumer inflation, the “cruelest tax” against the poor and middle classes.

And the final nail in the failed Keynesian school of economic thought’s coffin, will come when a hundred million current and future retirees wake up one day, realize that the welfare state dream is over, and suddenly realize they have nothing left to lose.

It is only then that the 1% will be truly in peril, as one after another revolution in the history of the world has shown all too clearly.

This economy and the thugs we refer to as government have deliberately engineered this massive Ponzi Scheme in an attempt to perpetuate the most massive plunder and wealth transfer in the history of the world. When the feces hits the fan, Ferguson, Mo. will seem trivial in comparison.

Lysander Spooner — Radical Individualist

Guest Post by Monty Pelerin

LysanderSpoonerOne of the great intellectual treats for many has been the discovery of a man with a very odd name — Lysander Spooner (1808-1887). For any individualist, he is a welcome discovery Spooner was  a legal jurist and an abolitionist. His core belief was that government itself, at least as it was constructed in the US, was illegal. His stand was unusual in that the creation of the United States was considered by most as the most unique experiment in governance in history. He was out-of-step even for his own time. Today, his positions are ignored. Most have never been refuted. They are conveniently ignored.

Spooner recognized government as a shake-down racket. He claimed that the Constitution was non-binding because it was not entered into as a contract by individuals but only by a very small minority of the people who then set themselves up as the government and imposed their rule on the rest.

Today, he is viewed as a kook and that is unfortunate. His logic was sound and never properly refuted. For anyone interested in discovering the world as seen through the eyes (and legal reasoning) of a radical individualist, his work is recommended.

His presence was inconvenient then and likely incomprehensible to most today. To entice your interest, here is a passage of his regarding government. Hopefully, it will result in your discovering a man mostly erased from history.

… this theory of our government is wholly different from the practical fact. The fact is that the government, like a highwayman, says to a man: Your money, or your life. And many, if not most, taxes are paid under the compulsion of that threat.

government theftes (1)The government does not, indeed, waylay a man in a lonely place, spring upon him from the road side, and, holding a pistol to his head, proceed to rifle his pockets. But the robbery is none the less a robbery on that account; and it is far more dastardly and shameful.

governmenthelpThe highwayman takes solely upon himself the responsibility, danger, and crime of his own act. He does not pretend that he has any rightful claim to your money, or that he intends to use it for your own benefit. He does not pretend to be anything but a robber. He has not acquired impudence enough to profess to be merely a “protector,” and that he takes men’s money against their will, merely to enable him to “protect” those infatuated travellers, who feel perfectly able to protect themselves, or do not appreciate his peculiar system of protection. He is too sensible a man to make such professions as these. Furthermore, having taken your money, he leaves you, as you wish him to do. He does not persist in following you on the road, against your will; assuming to be your rightful “sovereign,” on account of the “protection” he affords you. He does not keep “protecting” you, by commanding you to bow down and serve him; by requiring you to do this, and forbidding you to do that; by robbing you of more money as often as he finds it for his interest or pleasure to do so; and by branding you as a rebel, a traitor, and an enemy to your country, and shooting you down without mercy, if you dispute his authority, or resist his demands. He is too much of a gentleman to be guilty of such impostures, and insults, and villanies as these. In short, he does not, in addition to robbing you, attempt to make you either his dupe or his slave.

Spooner’s work is widely available on the internet. A good source for him and other champions of liberty is the Online Library of Liberty. Twenty-five of his titles are on line and can be gotten to directly by clicking on this link.

Expand your mind at the great risk of getting angry at what has happened to this country.

Has The President Quit?

obamagolfThere are indications that the president may have given up, quit while still on the job. That is, he may no longer be interested in doing the job but merely in playing out the string.  According to Peggy Noonan,Obama appears to have quit. As she describes it:

It is weird to have a president who has given up. So many young journalists diligently covering this White House, especially those for whom it is their first, think what they’re seeing is normal.

It is not. It is unprecedented and deeply strange. And, because the world is watching and calculating, unbelievably dangerous.

Ace of Spades provided another source in Mathew Continetti who may have been the first to have spotted this behavior:

He has decided to relax. He has decided to fill his remaining days getting the most out of his presidential experience. The free travel and lodgings and security escort, the access to good tee times, the ability to get a reservation wherever and whenever he wants, the chance to meet VIPs who will flatter and ingratiate themselves to him—he is enjoying these perks and privileges to the utmost. His motto is not YOLO. It is YOPO: You’re only president once. Why not savor it?

Obama is golfing more than at any point in his term. In March, as Vladimir Putin launched the newest phase of his quest to recreate the Russian Empire, some in the White House had the temerity to suggest that it might not be a good idea to fly to Key Largo for a long weekend of golf and relaxation. Obama disagreed. “Obama sticks to Florida vacation schedule,” read one headline. This was one commitment on which the president would not renege. “I needed this,” he told guests, including his new friend Alonzo Mourning, over dinner at the Ocean Reef Club. “I needed the golf. I needed to laugh. I need to spend time with friends.” I am sure the Ukrainians understand.

Actually, the disinterest and willingness to quit was dealt with much earlier on this website. When the polls looked like Obama would be defeated in his bid for re-election, an article was posted here on October 10, 2012 entitled “How Does A President Say ‘No Mas’?” (The article was simultaneously published on American Thinker under a similar title.) As it turns out, the polls turned for the President and the question was not answered at that time. Now, as things turn tough, the same question applies and Noonan and Continetti try to address it.

The 2014 mid-terms are apt to make things more uncomfortable fop the Messiah. The job is no longer fun when people question your ability and veracity. For someone who has never been in this position before, it is difficult to try to forecast a reaction. The problem with being President is one that doesn’t (or hasn’t) allowed the excuse: “I’m leaving to spend more time with my family.”

If/when a president reaches this point with more than two years remaining in his term, how does he leave?

Apparently in Obama’s case, he  just quits trying to administer and adjusts to maximizing his personal pleasures at the expense of the American public, at least those who pay taxes. In many respects, that means no change whatsoever in his behavior.

Immigration — Another Scandal and Another Reason For Impeachment

Guest Post by Monty Pelerin

HighCrimesThis Administration is a scandal machine. Everything they do is close to the line. Much of what they do is on the wrong side of this line.

In my recent book, twenty-six scandals were enumerated. Some  might be considered minor, but all show blatant disrespect and disregard for the Constitution and Rule of Law. Several are serious enough to represent valid  impeachment processes without consideration of others.

In comparison, Richard Nixon looks like an angel rather than a devil. Looking what is happening today versus the charges brought against Nixon is enough to understand how far this nation has fallen. Bring back the good, bad times!

Immigration Law Enforcement Scandal

scandal1The latest Obama Administration scandal is immigration. By my count that raises the number of scandals to 27, unless one wants to count this one more than once. Deciding unilaterally that immigration law will be ignored and not enforced should itself be an impeachable offense. No president has the power or right to arbitrarily choose which laws will be enforced and which ones will not, although Obama has ignored this constraint with respect to much more than immigration law.

Allowing such behavior is a threat to the balance of power  intended to protect citizens from tyranny.  George Will stated:

Obama, however, has perpetrated more than 40 suspensions of laws. Were presidents the sole judges of the limits of their latitude, they would effectively have plenary power to vitiate the separation of powers, the Founders’ bulwark against despotism.

Each violation of law provides  precedent for future presidents. It will be easier for successors to ignore the law than it is for Obama. Overlooking these infringements invites the move closer to dictatorship. That road is a one-way street. A return to previous conditions is rarely achieved without bloodshed.

Congress must act if this country is to survive in its current form. To the extent that Obama is guilty of violating the law, so too is Congress for ignoring these violations. The oath taken to uphold the Constitution is being violated every time Congress fails to act in these situations. This in itself is an impeachable offense, or at least was intended to be.

Is Immigration Part of a Bigger Scandal?

It appears the immigration mess may be worse than an unwillingness to enforce the laws of the country. A “smoking gun” apparently has been discovered that  indicates that the overrun of this country with immigrants, particularly the influx of children, may have been planned and orchestrated by government. If so, it is as serious a scandal as any of the other major ones. Furthermore, the “smoking gun” cannot be hidden. It is out in the open or soon will be.

In January of 2014 a DHS advertisement appeared seeking bids from vendors on a contract to provide assistance for “unaccompanied alien children.” The contract requested assistance for a specific number, 65,000, of unaccompanied children.  Curiously, that approximates recent numbers. Yet, DHS and ICE claim to be “surprised” by the current situation. Furthermore, in January the problem was much smaller.

Thomas Lifson provided additional detail and opinion on the bid.  His conclusion:

This stinks to high heaven. It is time to subpoena the people who placed the ad to give testimony in Congress. We may have a Cloward-Piven strategy on illegal immigration underway.

Joe Guzzardi provides additional detail and concludes:



Obama’s ongoing, unconstitutional refusal to enforce immigration laws plus his commitment to, as Fallon said, encourage more illegal immigration are likely impeachable offenses. On the behalf of Americans citizens whom Obama has sworn to protect, Congress has the moral responsibility to end this border surge immediately. 

It is beyond time that Congress step up and act against the obvious illegalities and corruption of this Administration. The President should be impeached and there is no shortage of grounds upon which charges can be brought.  That should be followed by the mass resignation of the cowards and lawbreakers in Congress whose inaction allowed this behavior to develop to such outrageous levels.

The country is close to not having an option against tyranny.  The threat  is far bigger than any individual scandal attributable to this Administration.

How A Country Dies

Guest Post by Monty Pelerin

death of a nation A country dies slowly.

Those living during the decline of Rome were likely unaware that anything was happening. The decline took over a couple of hundred years. Anyone living during the decline only saw a small part of what was happening and likely never noticed it as anything other than ordinary.

Countries don’t have genetically determined life spans. Nor do they die quickly, unless the cataclysm of some great war does them in. Even in such extreme cases, there are usually warning signs, which are more obvious in hindsight than at the time.

Few citizens of a dying nation recognize the signs. Most are too busy trying to live their lives, sometimes not an easy task.  If death occupies their mind, it is with respect to themselves, a relative or a friend. Most cannot conceive of the death of a nation.

A Country Dies Slowly First

For those interested, signsor symptoms precede death for a country often as they do for a person. There is a pattern that involves the following:

1. The Economy

Economically, people become poorer. It becomes harder to feed a family. Economic growth stalls and then reverses. Work opportunities decline. Disincentives to work rise as government tries to ease the burden on the unemployed and lower skilled. These efforts require more revenues which means higher taxes or debt financing. Disincentives to create jobs are magnified by attempts to address the problem. Higher taxes and other burdens are imposed on the productive making work less attractive.

The response should not be surprising. Capital flees first. It goes to areas where adequate returns are still available. Jobs are created but not in the host country. Finally a “brain drain” begins. Talented people leave the country for places that offer greater opportunity. In the case of the US, to escape US taxes these people must renounce their citizenship. Citizenship renouncements are currently at the highest levels in the history.

The flight of capital, both real and human, further  lowers standards of living. Signs of stagnation become more apparent. They may begin as seemingly benign as roads which have too many potholes. “For rent” signs are seen more frequently. Classified job ads  decrease. “Going out of Business” sales are no longer marketing gimmicks.

Initially, people dig into their savings or begin to borrow in order to retain their standard of living. Most believe it is a temporary situation. Eventually bankruptcies increase. Strip or full malls close. Large areas like Detroit become close to uninhabitable.

These conditions characterize the beginnings of the decline. As the decline continues, things get much worse.

2. The State

The State is threatened by a decline. Generally it moves into full pretend mode. Three behavioral traits characterize its behavior. The State must convince citizens:

  1. things are not as bad as they seem.
  2. the State is not responsible for the situation.
  3.  the State must do more (grow bigger) in order to solve the problems.

Statistics issued by the State are fudged to convey a false image of well-being. Government spending soars in an effort to juice reported economic activity. Much of the spending is unproductive in terms of providing things that would have otherwise been bought. It is also counterproductive to a proper functioning economy as price discovery is disrupted and consumer and investment decisions are based on false signals.

Incentives are  provided to encourage people to live beyond their means.  Debt appears nearly free and readily available. Bubbles occur and then burst. New bubbles are necessary to replace old bubbles. People and businesses are encouraged to make imprudent decisions, all in the attempt to make the economy appear better.

The State has one objective and that is to remain in power. Laws and regulations  multiply at ever faster rates. Tyrannical rules and legislation are passed under the pretense of protecting the people against some threat. In reality, these laws are passed to protect the leaders against the public when they finally understand what has been done to them.

“Bread and circuses” increase to divert peoples attention from the developing problems. Dependency increases reflecting an attempt to placate the masses. A “wag the dog” war or crisis is often used as a means to rally the public against some phony enemy.

3. Society

Society becomes coarsens as this process progresses. People increasingly are unable to provide properly for their families. Some desperately turn to unethical behavior, even criminal acts.   Common decency declines.

The regulations imposed from above reduce the sphere of voluntary interactions between people. The government decides more and more what you must do, when and how you must do it. What you can say comes under attack. Finally how you must live is increasingly determined.

Free markets are slowly replaced by a command and control ordering of society. Coercion displaces freedom as the coordinating force for society. People increasingly do what they must rather than what they want.

Interest groups, i.e. politically preferred constituents, created in good times don’t demand less when there is less available. The inability to meet their demands creates political strife and eventually civil problems. Honoring their demands divides society even more. Not honoring demands may produce rioting and civil unrest.

Societybecomes increasingly divided in terms of the “makers” and the “takers.”  As the takers grow in numbers, the makers shrink in numbers. Soon the parasites overwhelm the productive. Society collapses at that point.

Are The People Aware?

The United States, the once beacon of freedom and wealth, shows advanced deterioration  in all three areas above. The rate of deterioration is accelerating. To paraphrase Ernest Hemingway’s response to a bankruptcy question:

How did your country die? Two ways. Gradually, then suddenly.

Do people understand what is happening to them and their country? I suspect they are not aware of the full consequences. Most people are not trained to think in these terms, nor should they be. For most of us, it is a chore to get through each day. That is true of the dullards and the brilliant, for most of us end up at levels that tax our abilities.

People sense there is something wrong even though they may be unable to identify what that something might be. Many probably believe that whatever is happening is temporary, sort of like an economic slowdown that reverts back to normal. For them, it is tighten the belt until the good times return.

The results from a recent Gallup poll are interesting and illustrate the increasing dissatisfaction:

polldata

Numerous observations could be made regarding many of these institutions. All have decreased in favorability. Gallup was definitive in this regard:

The current 7% of Americans who place confidence in Congress is the lowest of the 17 institutions Gallup measured this year, and is the lowest Gallup has ever found for any of these institutions. The dearth of public confidence in their elected leaders on Capitol Hill is yet another sign of the challenges that could face incumbents in 2014′s midterm elections — as well as more broadly a challenge to the broad underpinnings of the nation’s representative democratic system.

The  poll is not a direct measure of the health of the nation. However, it provides a very negative composite of public satisfaction.  People know they are unhappy even if they don’t know the cause of their unhappiness.

This confusion and distrust always  precedes the death of a nation.

Obama — Alfred E. Newman or Dorian Gray

Guest Post by Monty Pelerin

My take on President Obama is that he is one sick puppy. But what if that assumption is incorrect?  What if there is method to his madness, a brilliance unseen? What if he is actually a genius, at least in terms of achieving his objectives? That possibility, to the extent true, presents serious issues for anyone trying to make sense of what is going on in Washington.

An interesting opinion regarding Barack Obama and the devolution of politics and freedom under his term is provided by Brian Wilson of Libertas Media. Brian is a  friend and commentator on the madness that is disguised as wisdom and civilization:

dorian grayalfred e neuman(2)A Different Take

From the Internet to the blog-o-sphere to E-zines to TV and radio chat shows, there is no shortage of opinions criticizing, ridiculing, psychoanalyzing our Fearless Leader. While taking different routes of reason, within acceptable boundaries one could conclude all of them accurate inasmuch as they share synonymous conclusions: Obama is a stumbling, bumbling fool, in over his head but with such a colossal ego or other psychologically dysfunctional handicaps is unable or unwilling to see the folly of his ways, much less accept the disastrous reality that he has created.

To virtually all the pundits, the Embarrassed on the Left and Giddy on the right, the upcoming midterm elections will be the left cross to the right uppercut in 2016 that does away with every socialist program and its stench that has engulfed and threatened the very existence of America.

In a recent article, some learned friends of mine tracked the significant events of the Obama administration – from the so-called “stimulus “in 2009 to the most recent scandal cum embarrassment, the instantly infamous “Saving Private Bergdahl” (MAD Magazine) and the 5-for-1 “Wow! What-A-Deal!” deal. With each individual event, my friends concluded

Every act, every initiative, every landmark development is the same. They all have enormous production value. They all carry massive price tags. And they all fall flat, to say the very least. Everything is for show. Nothing of substance is accomplished.Yet everything comes at a steep, steep cost.”

Who could successfully argue the point? For that matter, who could successfully argue against any of the boat load of opinion pieces that condemn the president for acting like a king – only in this case, the King of Hubris?

Well…I can.

What if they’re all wrong? What if we are the ones suffering with hubris? What if we are the fulfillment of Pogo’s observation: “We have met the enemy – and it is us.”?

In a recent discussion, I raised this question: What if all that we are witnessing, discussing, condemning is, in fact, the sum total of the Obama 3 Ring Circus? In fact, to P. T. Barnum’s famous “there’s a sucker born every minute” line, isn’t it possible – even probable – Obama & Company are playing us for the “Sucker” role?

Think about it….

While certainly fitting the diagnosis of blowhard, narcissist, incompetent, sociopath… Couldn’t the reality more accurately be: “No, Sucker, you got the part foolishly thinking we were just out of our league. Fact is this has been the game plan all along. You remember Alinsky, Cloward, Piven et al? Didn’t I tell you we were going to ‘fundamentally change America’? Didn’t I tell you my plan to shut down the coal biz and raise your utility bill? Don’t you remember ‘you can keep your doctor and health care plan. Period.’? Transparency? Hell, I’ve been telegraphing every one of my punches since my first stump speech. The ones that didn’t land? OK…a little embarrassing…but, hey – I just shrugged it off, said SQUIRREL! and my friends in the press did the rest…along with your own ADD, of course”

So why isn’t that the plan? Not part of the “popular narrative”? Contradicts the All-American Rule  of Law Paradigm? For someone who routinely complains about a recalcitrant Congress and then rips off a few executive orders circumventing it, why would a reasonably objective analysis not lead to the conclusion this guy has a lot more unpleasant surprises up his sleeve? After all, who is going to stop him? Congress doesn’t have the necessary body parts or legal apparatus to effectively move against him. Even if they did, any substantive legal action would have to be taken by Attorney General Eric “Waco Whitewash” Holder. When you consider Klapper, Sebelius, Lerner, Clinton and the rest of the Obama outlaws flipping off Congressional subpoenas and Contempt charges, roaming the streets with impunity, would you face palm yourself bloody in surprise if the AG was just “too busy to get around to it”? Even if Boehner/ Pelosi/Reid/McConnel allowed the Congressional process to move accordingly?  Well? Anyone? Buehler?

Between Bush’s Patriot Act to the NDAA and now Holder’s just announced  “war” on “domestic  terrorists” via The Domestic Terrorism Executive Committee, what Congressional committee, law, rule, regulation or any legal plumbing  would prevent Obama from declaring martial law at the drop of an ASP Baton? Black swan event? Acid indigestion?  By using the Administration’s patented “Ignore Button”, all the lousy ratings in all the public opinion polls have not adjusted his course one wit. So “public opinion” is a big nonstarter. Petitions? Face Book pages? Letters to Congressman/Senators/Editorial Boards? All as deadly and effective as a water balloon on an elephant hunt.

With everyone unilaterally tossing in the towel by chalking up the demise of America to a former “community organizer” with a lousy personality, psychological dysfunction and superior incompetence, I think there is ample proof for a contrary and, yes, accurate conclusion. People are indeed connecting the dots but the picture that’s coming into their focus is Alfred E Newman.

I’m seeing Dorian Gray.

Mr. Wilson’s hypothesis is as consistent with observed outcomes as the alternative “bumbler-in-chief” meme.  As one who has actually used Alfred E. Newman as a prototype for this president, I had interest in the Dorian Gray alternative.

Behavior and Motivation

Human behavior is purposeful. It represents action intended to attain goals.  Behavior is observable;  goals are not. Goals and motivation must be inferred.

The distinction between behavior and motivation is important. When we characterize someone’s behavior as “senseless” or “crazy,” it is in reference to the achievement of some goal or goals. We usually assume that these goals are similar to our own and that such behavior has no chance of attaining them. But, what if our goals are not the goals of the actor we are judging? If this person is pursuing different goals than we assume, then his behavior may be entirely rational and effective.

It is the unknown goal(s) that make the judgment of someone’s behavior dubious.

Alfred E. Newman or Dorian Gray

Those of us who view President Obama as incompetent and likely to be viewed as our worst president yet, assume his goals are consistent with our own. That is, we assume that he wants to improve things in line with traditional American values. Beginning with that assumption as his goal, we conclude that he is an Alfred E. Newman character. His actions and behavior have no chance of attaining these goals. Hence we assume that he must be hopelessly inept.

If, however, we viewed Obama’s goal as destroying the country (at least in terms of traditional ideals), then our evaluation of his actions would be different. While we might no approve of his goals, the effectiveness of action must be judged as to whether it advances the football closer to the goalpost. In that respect, Obama’s behavior no longer looks inept but calculated and advancing his agenda.  If the first approach might be termed the Alfred E. Newman one, then this second one would be the Dorian Gray approach.

Depending on what you assume his objectives are, you have vastly different assessments of his competence and success. In pursuit of the goals you believe are important, he appears to be a  bumbling, incompetent fool. In the other case, he has achieved rather significant successes.

The Alfred E. Newman inference implies incompetence rather than different goals. The Dorian Gray hypothesis infers goals not consistent with the perceived interests of the country, at least as defined by most citizens. Alfred E. Newman is assumed to be seeking the proper goal. His incompetence prevents him from being successful.  Dorian Gray is pursuing goals that are different from those normally assumed. The pursuer of wrong goals can still be an Alfred E. Newman in terms of capabilities. One would hope that would be the case.  In such an instance, the law of unintended consequences actually works for the country.

My guess is that we have a bit of both at work with Barack Obama. He is Dorian Gray, but he is also Alfred E. Newman, at least in terms of administrative and managerial abilities. Regardless of what goals are being pursued, incompetence is not an aid to attaining them.

Death Rattle of a Country

Guest Post by Monty Pelerin

 

What Is A Death Rattle?death-spiral-states

Wikipedia defines a death rattle as the sound often heard before death:

death rattle, known clinically as terminal respiratory secretions or simply terminal secretions,[1] is a sound often produced by someone who is near death when fluids such as saliva and bronchial secretions accumulate in the throat and upper chest.[2]

Economies do not utter sounds in any stage of existence. But the health of the economic body can be measured via economic assessment(s). Youthful and vibrant economies grow rapidly, usually producing growth rates in excess of high single digits. Mature economies grow less fast, but do grow at rates fast enough to keep resources fully employed and the living standard increasing. Dying economies stagnate. This last stage is followed by a death rattle.

Economies and countries do not have biological clocks like real living species. Nature is not in control, man is. Man is responsible for all stages of an economy.

How Does an Economy or Country Die?

badtimesThe last stage of an economy is stagnant or even negative growth. Unemployed and underemployed human and physical resources characterize this stage. So, too does a declining standard of living.

Two factors are always responsible for this stage — economic quackery and political interventions. Any economic slowdown is seen to be solved by additional economic stimulus and political intervention. More government is always the solution, or at least has been since the 1930s. Both economists and politicians are too happy to accommodate because each accommodation improves their condition.

This modern day witchcraft is considered effective because “it has always worked in the past.” Surely it will work again and save us from any pain. What is not seen is that every intervention weakens the economy. While the economy rebounds, mostly as a result of self-corrective price adjustments but also likely sped up by the stimulus, some harm has been inflicted. This harm is cumulative, building up over the years until the economy becomes so distorted and dysfunctional that the price system becomes dysfunctional and capital is so badly misallocated that it becomes unproductive. At this stage no amount of stimulus can restore or save the economy.

An analogy to this process is drug addiction. Early on a hit or high is achieved via the administration of a drug. As the hit wears off, the user feels worse than he did before the drug. To regain the euphoric state, another hit is necessary. It is easy to justify additional hits on the same basis quasi-economists use for more stimulus: “it has always worked in the past.”

The addict doesn’t realize (or care) that each dose weakens the body, making it less capable of functioning. At some point, dosages need to be increased to produce the desired effect (as do economic stimuli). The drugs are not  a cure although they may appear so to the junky. Eventually the body itself becomes dysfunctional. End doses are usually massive and eventually kill an already weakened and hollowed-out person.

How Does This Apply?

The US economy has now reached stage three of the process — stagnation. People continue to discuss a “recovery” five years after the recession was declared over. It is possible something can be labeled a recovery eventually, but the issue is the economy is dysfunctional. Seventy years of interventions, regulations and foolish legislation have seriously harmed the economic body in the same manner that drugs have on a junkie. The country has been reduced from the greatest growth and wealth-generating engine in the world to a sick, old man.

It is politically incorrect to point this out because the blame leads back to Washington and their sycophant economists.

Real-Life Example

For many people, the term economics causes their eyes to glaze over. Let me put our condition into terms that they can easily relate to.

My life has been substantially better than my parents. My children, who are approximately fortyish, may or may not be able to make such a claim. It is even less likely for my grandchildren. In America, except for relatively short periods the expectation of a better life than your parents was considered almost a birthright.

Sadly, that is no longer the case. Subsequent generations are likely to be poorer than their parents. They will not do as well. That is what a stage three, stagnant, dying economy means.

One doesn’t have to be an economist to sense that things have changed for the worse. Almost any time series of data loosely associated with progress provides evidence.

Compounding our self-imposed problems, the world has become one big market and our children now must compete against billions instead of millions. Our educational system is a disgrace and has not prepared them for this competition. When your honor student comes up against the twenty countries in the world producing better science, reading and math graduates than us, how is he going to fare?

It is difficult to find data to simply convey our condition. Perhaps the following table provides a good picture :

millenials

Is this chart indicative of early murmurs of a death rattle?

Bully Meets Professional Bully

Guest Post by Monty Pelerin

What happens when the biggest bully around gets confronted by someone who refuses to be bullied? Usually the bully backs down and avoids a confrontation. But what happens if the one doing the confrontation is himself a bully? What happens if he won’t allow the other to back down?

The answer to that question is playing out between Barack Obama and Vladimir Putin. Obama is the first bully and Putin the second bully. Ukraine provides the convenient vehicle for Putin to ridicule and embarrass a man Putin considers all form and no substance.

Vladimir Putin is hardly a perfect man. There is little to like about him. His history and his methods are those of the old Soviet Union. He competed, survived and thrived in the rough and tumble world of the KGB. He was tested and hardened by that process. He understands the cost of being wrong. He is tough and a no-nonsense guy who believes the Soviet Union should rise again. He achieved and won in competitive environments most of us probably don’t want to imagine. He is a man of substance even though his methods or achievements may not be pleasant.

Barack Obama is also imperfect. He is everything that Putin is not. He has never been tested. His life has been soft and pampered. His position was not achieved via accomplishment or ability, unless you associate fooling a majority of Mencken’s booboise with ability. Obama lacks substance, qualifications and experience. He is weak. And he is arrogant.

Weakness combined with arrogance is a dangerous combination. To a man like Putin, the former is to be exploited. The latter, when not backed up with abilities, only increases animosity.

The two men are polar opposites. Obama represents everything that Putin detests. Personal relations between the two men are non-existent, which is apparent in joint appearances. Putin resents having to deal with what he considers a weak, overbearing phony.

No one doubts who would win in a martial arts contest between the two men. That is not going to happen, but that doesn’t mean that Putin will not find other ways to humiliate, perhaps destroy, his opponent.

Obama is the bully who was called out. He wants to leave the scene, but Putin is a bigger bully who wants to publicly dismantle him. The boy who pretends to be tough has met the man who really is tough. The professional bully is out to expose the pretender. Putin is unwilling to let Obama retreat.

Richard Fernandez describes the situation:

Obama has been yelling ‘stop! stop!’ and still Putin is twisting his arm. The president made yet another plea to Putin according to Carol Lee in the Wall Street Journal: “White House Tells Kremlin Diplomacy Is Still an Option Despite Escalation”. Putin is making Obama crawl to lick his boots.

Mr. Fernandez doesn’t use the bully analogy. He believes the contest is one between a narcissist and a sadist:

One reason why Putin has made a special effort to humiliate the president is that his profilers may have pegged Obama as suffering from narcissistic personality disorder. Putin the secret policeman must be thinking: how do you get a narcissist to melt down? Answer: by personally and publicly shaming him, thereby provoking a narcissistic rage.

That rage can take either of two forms: a reckless act or a withdrawal into a fantasy in which the narcissist remains invincible in some universe of his own.

The narcissistic disorder that seems to plague Obama has been speculated about openly. Putin has access to experts and strategists that mere laymen do not. Doesn’t he have geopolitical and personal motives to exploit what he considers a weak and undeserving leader, especially one who foolishly pretends to be superior to all others?

Regardless of what happens in Ukraine, it is a sideshow to the personal interplay between these two men. Obama is in this game, whether he wants to be or not. He is the hunted and not the hunter. Putin is unlikely to stop before he gets what he wants. At the moment that seems to be the complete humiliation of Barack Obama.

In one sense Americans should be grateful for Putin. He is providing a public service to the majority that elected our mountebank. He is revealing the empty suit that sits in the White House. He is doing the job that the media should have done six years ago.

On the other hand, games played by at least one sociopath (the jury is still out on Putin) can easily spin out of control. When Obama says “Uncle” and Putin refuses to acknowledge his surrender, what then happens? Does Obama give away strategic assets or fly into a rage? Our man-child does not appear stable. Putin seems to know that.

This personality clash will not end well. In terms of the two players, the US is at a distinct disadvantage.