It is true globalisation, as practiced, harms USA consumers and allows for exploitation overseas. The left and right want "free trade agreements" (although misnamed). The right wants USA intervention overseas, and the left wants regulation here in USA. Both are wrong.
The left is correct when they say the right opposes the Kyoto Protocals so they can advance exploitation and degradation of the environment overseas. The right is correct when it says the left wants the Kyoto Protocals to lock down third world development. A pox on both their houses!
With free trade small businesses would encounter small businesses and develop trade on a ration a rational basis, never accumulating the critical mass to harm others. The results may not be as spectacular as what we get with the democrats and republicans, but neither is there the starvation, slaughter and destruction.
Saturday, December 20, 2008
Globalisation
Leaders Betray Labor
Here is a 2008 address to the UC Berkeley law community on the state of the economy and labor law by a top man at the AFL-CIO.
The sad part is he is representing labor. In his article he notes the PATCO strike of 1981 in which Pres. Reagan busted the air traffic controllers union. (Never mind the contradictions of government employees forming a union.) While Reagan was busting that union, I was sitting across the table from ILWU negotiators settling the 1982 Longshoreman's Master Contract. The Longshoremen are considered the most militant union. Indeed, at least two people were killed within the union during these events, and several others injured in violence. I had a newborn daughter at home, so I considered arming myself but the violence seemed to be union-centered.
The strike issue was "unfunded pension liabilities." The unions had done an excellent job of getting labor into the middle class by forcing a cut of the profits from the USA system to come their way. Being the last man standing in a world wide war, USA was bound to experience tremendous growth as outsized tribute flowed to the victor. Labor got their fair share of the flow. (The problem of empire and exploitation of others is not addressed, but at least USA labor got a cut of the action.)
Would that man could control all things, then all would be well. The actuarial tables supporting promises made in union contracts regarding pension funds proved too optimistic (a problem seen today, and we'll continue to see).
It appears to me that as big labor and big business joined big government, they conspired against the rank and file to feather their own beds and steal the hard-fought gains of the rank and file. I persoanlly believe the reasaon Jimmy Hoffa was murdered is that Hoffa saw this happening and was opposed to theft of the workers income. Hoffa had the power to stop it. Thus he sleeps under some Detroit suburb strip mall parking lot. In the decade after Hoffa's disappearance, USA truckers lost a lifetime of gains, and have never recovered. Consumers got the benefit of deregulation, but increase generated was directed to the government in new taxes and big business in profits. With Hoffa there would have been blood in the streets. Without Hoffa, the game plan is being replayed time and time agains. Boom gold, bust Patco pensions. Boom S&L, but truckers pensions. Boom dotcom, bust pilots. Boom housing, bust just about everyone. That might be too greedy, so just in case we now have Marines and Army on patrol in American cities, like in Iraqi cities. What goes around comes around.
The death of the USA union movement came when government workers were allowed to organize. House unions are a contradiction in terms, and when the government forms house unions, you get the double whammy of the people organizing against themselves, which is unsupportable in law and logic. The clear inevitability here is as this system helps ruin the economy, and government repudiates its promises to government labor, the government unions have no one to turn to for redress. Think PATCO strikers.
For the longshoremen the problem was that a wave of longshoremen were retiring by 1975 and finding their pensions were not keeping up with inflation and the pension funds no longer pencilled out to cover future obligations. Thus "unfunded pension liabilities."
This fellow is arguing that laws should be written to benefit labor, and take into consideration: global warming, single payer health care, auto bailouts, you name it, he argues labor should be secondary to the will of the politicians.
How sad. When Pacific Northwest laborers (Washington and British Columbia) volunteered to fight the fascists in the Spanish Civil War, the Soviet agents found their views unacceptable, and their independence of mind dangerous. The powers that be abused these volunteers, at one point going so far as to confiscating the Canadians' passports. Why? It turns out one Canadian looked like a Soviet assassin, so his passport was given to the assassin to gain entry into Mexico to murder Leon Trotsky. Thus beginning a long history of Canadian passports used by state thugs for disguise.
This independence of mind is well reflected in the Seattle area, where two separate longshoreman unions exist, one in Seattle and one in Tacoma, that have materially different contracts with the stevedoring companies, something unheard of in lesser unions.
Fascism is simply the system in which business and government are one. And here a top labor advocate is arguing labor should be subservient to government, as though the two have anything to do with each other. A fish and a bicycle would have more in common.
With the lockdown on labor in USA, workers do not have the freedom to organize and advance their cause. AS in business and politics and religion and academia, the top people have irresponsibly sold out, and there is no recourse for those who object.
As in every field, labor action is wide open for innovation.
Nobel Winner Advises Irresponsibility
Paul Krugman won the Nobel Prize for economics this year. He writes econ articles for the NY Times. He says our government needs to be irresponsible.
Irresponsible is his word. He is terribly influential. He is not kidding. He advised this for Japan when they faced similar circumstances some 18 years ago.
The irresponsible are the people setting the policy, these are the people who influence decisions. When I say the problem is lack of freedom and no responsibility, I am referring to the people who are at the commmanding heights. Obama will be heeding Krugmans advice.
The good news is it is rather easy to protect yourself. The bad news is we will all be worse off.
As an aside, Alfred Nobel never funded a prize in economics. That was added later, as the Nobel prize became a political prize.
Friday, December 19, 2008
Pirates!
Check out the Chinese sailor laying in supplies of Molotov Cocktails... The pirates begged for shoes before they were run off, the pirates were barefoot and worried about glass on the deck.
China will be moving anti-pirate ships into the region... getting awfully crowded for so many nations with so much firepower.
Thursday, December 18, 2008
Your Children's Tax Dollars At Work
Take a tour of the homes for which your income is being diverted to preserve. Don't worry, this is only seven of tens of thousands of people in a country of over 300 million people, who can afford to cover, more or less, the irresponsibility of a few. Obama, like Geo. Bush, is for bailouts.
Funny Hats
Has anyone noticed, at important events, or important people performing important functions, a funny hat is integral in the process? At birth, the doctor has a weird hat. In high religions, the clericals wear strange hats. At graduation, the most important event in most peoples lives, the hat is odd. Big sporting events look at what people doff after the contest. How about those chefs and their toques? There is more, but I think since hats went out of style, we have lost something in people not wearing a hat to match the occasion. Kennedy started the trouble by not wearing a top hat to his inauguration. Here is a problem that needs to be addressed, and no doubt a career doing well by doing good for some enterprising passionista.
If Not To Be Popular, Then Why?
President Bush says he did not compromise his soul to be popular. If not to be popular, then why?
There Is No Alternative To Socialism
Here a leading economist tells us we must return to socialism. What I love about Marxists is their rock-solid command of the facts. Their analysis fails to factor in the human spirit, so their policies always bring death and destruction, like capitalism.
Capitalism vs Socialism is a false dilemma, ignoring freedom and responsibility, aka "free markets."
Give Us Deflation Now!
Good news! Travel, hotel, restaurants arre cheap; suppliers are eager... you can rent real estate rent month to month, and even get free rent from owners who cannot sell and but are desperate to have the building occupied to avoid the cost of vandalism. And in winter months, who knows what squatters might show up. many of these building were so constructed that they must maintian a constanrt temperatiure or suffer structural damage. Move in, just pay the utilities!
I walked into a RiteAid to buy my wine the other day, and I see entire shelving runs removed. Is see shelves loaded with seasonal items ordered on a gauranteed sale basis, and the rest loaded up with dog food and tupperware, items you can get 180 days to pay, dirt cheap and take up space. The staff is down to what the fire code will permit.
This is smart retailing, but if there is not enough sales to cover the rent, something has to give. Since these Rite-aids are in strip malls, they go to the owner and renegotiate the rent. The smaller tenants have no idea this is happening. If rite-aid pulls out, the other retailers go under because they lose the anchor tenant traffic. Some 3200 martial arts studios went out of biz in May 08 alone. (I beleive these studios trade on 14 year olds fantasy about being a ninja. I think those free style "ultimate fighting" shows on TV are killing enthusiasm for martial arts. When kids see what a somewhat real fight looks like
Deflation is key to the process of healing this economy. Do your part! Demand a cut in prices. You love that your computers get less and less expensive every year. So it is in a free market.
The fed is supposed to fight deflation, foster just a wee bit of inflation, yet bring "monetary stability" of which a side effect is denying the poor access to the material goods and services the free market has to offer.
Innovators introduce the not very good, the expensive, the hard to get with no choices. Over time with market feedback the innovation gets ever improved, the innovator/entrepreneur does well while doing good. At some point the conservator takes up the item, applies its economy of scales, lowers the price until it is more better cheaper faster, and everyone has access to the material good or service. This is what a free market does. No need for redistribution of wealth to the poor as called for in socialism, no need to concentrating capital in the hands of the elite, which capitalism calls for. Trillions of decisions each day by all players creating a balance with countless adjustments as needs arise.
If an economy is not constantly in deflation (using the incorrect meaning of prices falling) the there is some criminal (in natural law) conspiracy afoot.
Wednesday, December 17, 2008
Excessive Wealth
Bill Gates became a billionaire cooperating with the government. Marc Rich became a billionaire working contrary to the government. Either way, excessive wealth cannot be gained without government intervention. Click to read on...
I define excess wealth as more than you can handle yourself, or your family if you are so situated In natural law, what you work becomes yours: your land, your tools, your live- and rolling-stock, and so on. As the government grew exponentially in the 1970’s and 80’s and 1990’s, Gates sold software that was issued to every government worker.
As a customer, the government is a strange, unnatural, unhuman creature. What is developed for the government is, well, good enough for government work. Engineers designing to govt spec are not artists designing to human yearnings for the good the true and the beautiful, which is the heart of a free market.
Most of us love the internet. The internet was formed in the 1960’s by a private company, BBN, when such a proposition was illegal, unless perhaps, the Defense Department is behind it, as was the case. The government wanted a resilient communications system to network research computers.
If the internet had any value, it would have evolved in a free market. The phone system was put in lock down in the 1920’s, and in this managed milieu the internet was formed. Yet there are countless people who believe, if it were not for the government, or in the favorite phrase “funding basic research” we would not have the internet, nor anything else good for that matter. The fact is without govt intervention we’d have better and it would cost less.
Most large technology companies are monstrous distortions of what would be, as are their products. Cisco fed the phone companies, Oracle started as a CIA database project, Sun microsystems built computers for govt data analysis, Ross Perot became a billionaire computerizing Pres. Johnson's welfare plantations.
Since their products have no relation to natural customers, what they offer is very bad. Operating systems that provide net loss of productivity, applications that cost too much to do too much, a business model that fails to distribute scarce resources rationally, and a fundamental architecture that is insecure (MSIE announces yet another fix http://news.bbc.co.uk/2/hi/technology/7788687.stm for Christmas 2008), and cannot be secured. Spam and fraud are are only 2 clear and present dangers of the web. Proliferation of porn and other vices is the bailiwick of the preacher man, but they are alarmed at what the destruction of families due to internet porn is doing to the collection plate!
For a glimpse of what might have one can observe Apple Computer, whose orientation has been on the consumer, and is informed by the pursuit of the good and the true and the beautiful, as one might expect from a love child/LSD connoisseur such as Steve Jobs. (From the descriptions, some of us already have what LSD offers without tasking the drug, others can benefit mightily from doing so: http://www.futurehi.net/archives/000693.html)
Nonetheless, the government workers issued copies of Microsoft Office or Works or both played all day at making regulations and requiring reports of those who produce and pay taxes. These regulations required reports delivered in MS operating systems. and PCs. Gates became a billionaire since the govt actually buys licenses for software. Those companies and institutions most allied with govt, law, schools insurance, banks, stock markets, medicine, housing, say all big biz, bought the software required to make reports and the usually paid the license fees as well. (Taxpayers foot the bill for “law enforcement” that hunts for software pirates.)
Make-work for government made Gates and many others billionaires, countless millionaires, and innumerable 100,000 -aires. Then the govt did Bill Gates a huge favor in return. The consent decree of 1994: Gates promised to stop his marketing strategy, one inspired by Rockefeller. Now, no one could get rich the way Gates did, since it was illegal. The govt saw to it Gates had no effective competition.
Now Gates and his billions were safe from competition, but competition and innovation was now stalled in USA, like a high flying airplane. Here comes the crash. Gates might lose his billions if left idle and unprotected, so what to do? Form the Bill and Melinda Gates Foundation!
The law in USA is the government protects the wealthy from having to be responsible for the wealth they hold. In essence, the government will not tax or otherwise molest the money if they spend 5% a year of of the foundation money on charity. Of course, the balance of the funds are invested and no doubt return better than 5% per year, so the funds grow and live in perpetuity.
Of course, these funds take talented members to manage, such as your family members and wives and children of politicians. That’s the law.
And of course, you can make that 5% by donating to nonprofit think tanks who advocate for your favorite political causes, or some other research or project of your pet interest. That is the law.
The Foundation can donate to a state initiative to impose an inheritance tax on anybody who dies with assets over 2 million, thus destroying small family businesses. A side effect is big city newspapers fold for a reduction of the profitable small and medium business ad revenue. The foundation can then turn around and buy up newspaper assets cheap, further controlling the information flow.
Lest you think there is something terribly undemocratic about all of this, rest assured that such foundations would never fund something that any given sitting congress would not fund. To do so might raise some ire, and as we all know, the power to tax is the power to destroy.
In turn, the government charges taxpayers for the cost of an army of regulators and law enforcement to protect these assets. And if it should come to pass that any of these “charities” lose money, due to some criminality, the govt will step in and make whole the losses. Privately, I do not know how we taxpayers can afford such a system.
In natural law what you can work is yours... There is simply no way the Gates family can manage the billions they received cooperating with the government. They would lose it in weeks if not protected, protection paid for by taxpayers (Yes, Bill Gates pays taxes, but did you notice the point of putting the billions in the trust is not only to protect it, but to avoid being taxed?)
In a free market and natural law excessive wealth, that is to say, more than you can manage yourself gained through unnatural cooperation, is criminal. If we removed the protections and taxpayers subsidies Gates receives, then his $29 billion trust would be exposed. Trying to establish relations, monitor agreements, fight off the competition, he would soon lose what he has, down to what he can manage himself. No doubt Bill Gates can mange much and lead a full life doing it. I would guess he could manage 3 or 4 millions himself! Imagine how the world would beneft if Bill Gates had to go back to supporting his family.
What should he do if tomorrow he learned he no longer enjoys the subsidies and restrictions that protect his wealth... well if he really wants to give it away, let him bail out the USA auto industry!
But what about all of the people in the world helped by the Gates Foundation? None of those people need handouts, they need freedom. Freedom to contract, freedom from oppression, usually in the form of their own governments. They need the benefit of people taking responsibility, and a system that holds people accountable for their actions. Then they would take care of themselves. Also, in a free market, it is clear who is in a true disaster, so charity becomes all the more immediate. Also, tin a free market there is far more people with more to share with those in distress.
I am not against people earning billions, if they can in a free market. I am against rules that force the rest of us pay for his security and maintenance, and for a system that allows him to keep that which might be more equitably distributed through free market transactions to higher and better use than is dreamt of even in Gates’ philosophy.
People say getting rid of these structures would lead to chaos. But we have chaos now. We have a system is falling apart, although this point is unimportant, since so few people actually benefit from this system. If the powers that be want peace and prosperity, there is an easy route to that goal. The powers that be wish to keep their power base intact, so they will sell our futures and our children's to keep their system going.
The Sikh, the orthodox Jews, the Amish decided long ago to have none of it. They expressly reject government in their lives. I agree with their sentiment, but not their response. There is still much creative work to be done in philosophy on how to operate a business in this milieu, and how to work towards truly free markets, grounded in natural law.
Consulting With Everyone Who Agrees
This is funny... the incoming Obama admin is discussing a "stimulus package" with economists "across the spectrum." Only one questioned whether a stimulus package was a good idea (probably a wrong number...)
We are in trouble because we borrowed and spent. We will live below our means because we have lived beyond our means. The solution of those who brought us this disaster is to do it some more. They have lined up the psychophants that brought us this disaster and asked them what they think. Who they have not asked is those who predicted this disaster and know how to get out of it.
The struggle the Obama Admin has is "how big" the package should be. Maybe a trillion. better safe than sorry. Except, it comes out of the futures of all of us.
The Bush admin was staffed by people who would not make the same mistakes in Iraq that were made in Vietnam. They made the exact same mistakes. Bernanke promises to not make the same mistakes as the great depression. Both Bush and Obama admins are making the exact same mistakes. This time only bigger.
I have been busy interviewing old timers who lived through the depression, asking them for advice on how to live through another. Not many who were adults then still left. If you get a chance to ask any, why not let us know what they say.
Tuesday, December 16, 2008
SEC "All Over It"
Here is a Swiss Banker dumbfounded he could be taken...
Arpad ‘Arki’ Busson, chairman and founder of Swiss investment firm EIM SA.
“I knew the SEC was all over this shop. As a broker-dealer, you file quarterly statements,” he said. “The main reason we got comfort is that it was SEC-regulated, and it was doing 10 percent of the volume on the New York Stock Exchange and Nasdaq.”
How is it this sophisticated Swiss banker did not know the system is rigged, but I did? I guess it is just survivorship bias.
I do not believe this is limited to just banks and wall street, this rot is in academia, labor, religion, manufacturing, naturally politics, and in every other field. This is good to know, since one can adjust accordingly.
Extremism
A Sense of entitlement disappointed and the stress of economic downturn gives people an excuse to misbehave. Main thing, keep a cool head. Read the psychologists.
"Charities" Hit hard In Scam
One of the good aspects of the Madoff scandal is so many "charities" have been harmed, some will fold. In USA these charities largely fund programs that support the status quo, or worse. Outside of paying for education or health care for people in crisis, charity is extremely difficult to do right.
Under our tax systems, the wealthy set up "charities" which fund their pet-projects and hire their friends and relatives to execute. The system retains power in few hands, and leverages wealth and privilege while suppressing innovation. The solution is to get rid of the tax breaks and the 5013c (or whatever it is called) "foundation" laws and let people donate what they will when they want, and dynasties protect their fortunes in a free market.
Did You Buy Real Estate In the Last Ten Years?
If you did, and your Loan-to-Value ratio was over 80%, you were obliged to buy mortgage insurance against default (with rare exceptions if you were wealthy.) Of course anyone who cannot put 20% down is probably a poor credit risk, hence the requirement.
Now, this mortgage insurance for these risky people was concentrated largely into one big insurer, called AIG. The reason AIG folded is largely its inability to to cover the losses of all those defaulting loans. AIG also took premiums for title insurance, liability, and many other consumer protections. AIG certainly collected tens of billions in premiums, and spent those premiums on, what, massages and politicians... but now those who paid the premiums have a failed company as their safety net.
In a free market, consumers are more skeptical and look a little closer at offers.
In a free market, insurance companies refuse risky business, which dissuades people from engaging in risky acts. When govt regulates insurance, the insurance companies understand that ultimately the government will assume all risk, and in the case of AIG, this is true. Party On!
Here again, no responsibility or freedom. No one has to take responsibility for their risky behaviour (the results are called 'tragedy") and no one has the freedom to cut a side deal that avoids false hope. Try buying a house without title, flood (in flood zone, another amazing scam...) or homeowners insurance... ain't gonna happen (if you ain't rich).
The heart of the problem is lack of responsibility. The inability to get out of this is lack of freedom.
Regulators were Informed of Ponzi Scene 10 years Ago
Govt workers, regulators and Wall Streeters are shocked, shocked that Madoff got away with this scam. Why? They were told TEN years ago what was going on. Of course it was a private citizen who figured it out and alerted the authorities, who of course, did nothing. Why do we pretend that the govt can effectively regulate, when they cannot. Why do we pretend private citizens can't regulate effecxtively, when they can, and do. The reason I have not been burned in this market, indeed, the reason I am making money, is I do not trust the regulators but do trust private citizens analysis.
"Financial analysts raised concerns about Madoff's practices repeatedly over the past decade, including one letter to the SEC as early as 1999 that accused Madoff of running a Ponzi scheme, but the agency did not conduct even a routine examination of the investment business until last week, The Washington Post reported on its Web site Monday night."
Pres. Obama will fix everything with propoer regulation.
Not.
Entrepreneurs Take No Risks
One reason to look at things realistically is "life can be harsh, and that is good to know..." The good part is when you have a rational, realistic view of what is happening, you can adjust accordingly.
Had you already started your business, you would be in the information flow about your industry. You would hear about who is thriving, and who is failing. Although we taxpayers' children will have less material benefits and services in the future since the government will be bailing out billionaires, there will be no help for small business. (Why should they help small biz, and of course we do not need it anyway...)
The only reason a business should fail in these times is that the business took on too much debt, defined as more debt than can be serviced by reduced revenues. The business likely invested in means of production, infrastructure, perhaps even an expensive advertising campaign to gain market share. In any event, a failing company that fails has assets available for dirt cheap, or even free.
Although we have no idea what is coming next, the best and brightest are placing bets which reveal what they believe. Many people say "buy stocks now, we've hit the bottom, soon the markets will start back up... don't miss out." Predictions are for a recovery in late 2009, or 2010. Warren Buffett has encouraged stock buying. At the same time though, Warren Buffett has made a huge bet the stock markets will not recover until 2019. That is right, Buffett acts as though the markets will not recover probably until after he is dead.
Most people have no idea what they are up against (Madoff appears to have confessed to keep his sons out of prison, how many more are out there?) If you have not started your business, according to Buffett it's not too late to get into the flow and take advantage of the circumstances.
If you are planning any business acquisitions, renting space, buying equipment or furniture, anything... feel free to email me with a rough outline of what you are contemplating and I will argue for some nice reality-based hardball negotiation points and strategies.
As Drucker said, entrepreneurs do not take risks. In this economy, there is absolutely no reason to take any risks at all. Everything should be pay-as-you go, if you pay at all. Starting a business now, you are doing enough and the free markets will provide all the subsidies you need.
Anthony On Export Oppty
The Amish have no credit history, no FICO score, and no Driver's License, yet this banker has never lost money lending to the Amish. The bank's customers are 95% Amish and the bank has made $100 million in Ag loans.
Anthony
PS, I like the description of the buggies. 2008 model with retractable carved maple cup holders. Could there be an export market for Amish buggies?
Anthony,
With the busting of the USA economy, I believe the USA will consume all of the buggies the Amish can produce.
I know a used car dealer who is slow to extend credit to whites but is quick to do so with Mexicans. She has never lost money with the Mexicans either. There is a question the adults in this communities ask themselves: "What are our children learning from our behaviour?" This makes for profound differences in cultures.
Anthony Checks in On Design
Tom Kelley of IDEO fame mentioned in his book, The Art of Innovation, a few more cultural issues/barriers with product design. I thought about your apple juice and Japan example. Here are a few excerpts from Kelley's book.
Japanese like their vacuum cleaners quieter and less powerful with smaller motors than American vacuum cleaners. Americans think if the vacuum cleaner is not noisy it's not working.
European car makers were slow to adopt cup holders. The makers assumed their cars were such a pleasure to drive that no one would possibly want to compromise their performance or spoil the experience by taking one hand off the wheel to hold a cup of coffee. On a side note...My brother drives an old Volvo 240 Wagon. I call it the worlds toughest station wagon, a real Swedish brick with 300,000 miles on it. Very rugged and it has taken him all over remote parts Mexico and the US. His biggest complaint...no cup holders.
Betty Crocker tried to peddle its moist cakes in England. They didn't fly. The English like dry cakes and cookies with their tea.
The fax machine, invented in the mid 1800s, had no advantages over the telegraph so it never took off. However, telegraphs cannot easily handle the ideographic Japanese language while faxes can. Japan became the world leader in fax technology.
Finland has had a long tradition of communications expertise, once boasting of having over 800 telephone companies. They quickly became leaders in cell phone technology.
If you grew up in the 50s and the 60s you tend to rinse off the dishes before you put them into the dishwasher. This has been rendered totally obsolete by modern dishwashers according to Kitchenaid. What's the lesson? Often you've got to work especially hard to overcome rituals or superstition.
Anthony
Monday, December 15, 2008
New Trade Lead Oppty
Pres. Bush dodging a protester's shoes has now been viewed worldwide, and will be iconic. Expect people to hold up a shoe when a politician is bloviating on the stump, or when some official is laying down a line of manure. I am looking forward to a means to silently protest when in the presence of politicians. Especially now that there is talk that the billionaires who lost money in the Madoff scam may be compensated by the taxpayers. (Will your retirement account or pension be made whole by the taxpayers?)
A product that would probably do well would be a very lightweight (styrofoam?) shoe on a flexible post that can be attached to a car, or even just the automobile antenna. As people drive down the street others will know the driver is protesting official politics.
I would carefully follow the gameplan here, enough orders to cover suppliers minimum and then do frequency because this IS an item that will get copied quickly (or more likely plenty of others have thought of it too...)
Still, for someone in the novelty biz, this is an easy home run...
Chairman Mao's Goal
Here is a wee bit of historical evidence of Chairman Mao desiring "more better cheaper faster." a poster for a 1960's campaign... too bad he did not know free markets deliver exactly that. I hope someday USA leaders learn from Deng Xiao-ping on this point.
Redefining Tragedy
When the government does not do its job, the damage is called a tragedy, since no one is responsible. Regarding the Madoff crimes:
“This is a tragedy,” said Sorkin, a ... U.S. prosecutor and SEC enforcement lawyer. “We are going to fight through these events and try to minimize the losses as much as possible.”
The Feds are doing for investors what they did for blacks after hurricane Katrina.
Again, a false sense of security comes with government regulation:
"Since 2000, he has given at least $100,000 to the Democratic Senatorial Campaign Committee and more than $23,000 to the party’s candidates, including Senator Charles Schumer of New York and Senator Frank Lautenberg of New Jersey, who leads a charitable foundation that invested with Madoff. "
The good news is Lautenberg's charitable trust is ruined (These are key to avoiding responsibility and limiting freedom in USA).. The bad news is he has the power to firce taxpayers to refund his losses, and probably will.
What % Of Economy is Empire?
As the hamiltonian empire fails, that part of our economy which is supported by empire will shrink. Calculating that is probably impossible, but it will have an effect.
Sunday, December 14, 2008
Fraud Vs. Closed Redemption Window
The Madoff fraud was so easy not in spite of SEC oversight, but because of SEC oversight. Since we pay for oversight, people believe all is on the up and up, and well regulated. Once the investors have been conned into believing their money is safe, it is so very easy to "take them," as Madoff has done. (Con artists NEVER try to make you confident in the con artist, their aim is to make you confident in yourself.)
Here again we have people believing that the government can regulate and oversees something, when they cannot. And people believe the players cannot regulate themselves, when they certainly can and do.
In a free market, Madoff's competitors would study his success and copy it. Some did, and discovered he must be cooking the books, nothing to copy. (If anyone squealed, the SEC did nothing. In any event the SEC did nothing.) At which point, the competitors would "out" Madoff, in a free market, natural law competition. Since the
power of enforcement is monopolized by the government, those who know keep quiet.
Now to my point: why did Madoff not just say "redemptions are running too high so I will suspend withdrawals" like so many of his peers have done?
Or, since no one at the SEC could tell the Madoff was running a Ponzi scheme, how can anyone know if any (or all for that matter) other hedge funds are Ponzi schemes.
Look how often withdrawal suspension is happening...
Scooter Imports and Beef Exports
Since Europeans do not care for USA Beef, the USA government seeks to harm European manufacturers and USA consumers of motor scooters. It is good this Hamiltonian system is failing.
Study Incoterms Here
"Incoterms" are definitions of terms used among traders in international trade. Banks need these terms defined since the banks are usually moving the money from the buyer to the seller. Before the bank does so, it asks under what conditions do we, the banks, transfer payments?
Interestingly, the banks arrived at these definitions among themselves, and require their customers, the traders, adopt these terms in doing business worldwide.
In essence the terms define what is included in the price. Does the price quoted include the goods sitting in the factory overseas, the goods sitting on the docks overseas, or perhaps on the ship? The goods sitting on the docks in the importers home town? The terms will define this.
As an aside, these terms are used worldwide, all cultures all places, and are completely voluntary. There is no government oversight or involvement. It is a good example of spontaneous order coming from peaceful commerce among diverse groups.