Cobden Center has an interesting insiders view on no where for the rich to hide...  to which I commented..

"And no matter where you hide it governments are eventually going to have to seize it, just remember the better hidden, the easier for your agent to steal it.

There is one option, but it means making money, but not off money: to become a merchant.  Liquidate most, if not all, or your financial assets and buy the means of production.

It can be hard, but it is hands on.  You do take control.  I understand Mr. Baxendale just liquidated his company, but I bet he gets back in somewhere, elsewhere.

We need a wave of debt-free, flexible, innovative disruptive new businesses to replace those tottering or trapped, or both.  Joint venture with some some young thing who is breaking the rules and going forward.

The alternative is to watch your roll shrink, slowly surely, and then... poof!  it is counterintuitive, but the rule is when you are about to be overrun, get out of the foxhole.  Your chances are much better."

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USA Child Labor

When I was six years old I went down to Husky Stadium to sell newspapers with the older kids.  It was  blast. I would make a dollar or two, and blow it on candy. Summers we could pick blueberries and strawberries for a bit of dough, and we got our anti-oxidants on for the year, we ate so much. At ten I got a paper route, and worked seven days a week, Sundays getting up and going out at 4 in the morning.  I did that until I was 14, and then I lied about my age to get a job in a hospital kitchen at 15.  Man I was glad to get the job.  It was voluntary.

Now the newspapers and tv blow up.  Note, most of my child labor was for newspapers, who get an exemption from child labor laws, and many other rules, as long as they keep printing the party line.  These kids are with their itinerant labor parents.  They are not forced to work.  Kids like to work alongside their parents.    Imagine if they were in school... they would grow up to riot.

One problem with the kids, well the only stated problem, is the chemicals in the fields.

""A lot of the chemicals that the kids are around cause respiratory illness, neurologic impairments, contact dermatitis, really severe rashes on their bodies," Ellis said."


I agree.  Stop using the chemicals.  and let anyone who wants to work, work.  Less rioting that way.

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Robert Checks In On Motivation of Biz Start Up

On Aug 12, 2011, at 2:06 AM, Robert wrote:

But to do so requires a psychological shift about what is possible or just a massive kick in the behind and injection of confidence.. as people believe starting a business is too tough to do without experience and contacts. I love the way you've provided the how to, made it simple and given examples of how people have done it, but  I suppose until one has actually done it, we're still unsure about pulling it off.

Actually I have been in a protracted discussion of this for years with very many people...  

I wish I could say it is personality, but it it not, since all of these people run the range.  People devise tests as indicators but they don't hold.

I can't say it is confidence, since we all have no idea where we will be tomorrow, only were are happy doing what we are doing.  So I don't think confidence is an issue.

The massive kick I don't think has anything to do with it, which is why I ask the first night of class, "do you expect starting this business to require a major disruption of your lifestyle..."  (or something like that.)  The answers are yes and no ... depending on the psychology of the person answering.  But the answers are not the "I'll rise to the challenge .." variety.

I wish I could say that circumstances (economic downturn) calls forth the entrepreneur, but no, no correlations there.  I did note in my studies, that during the Napoleonic era, so many men were killed, as well as their male relatives, that widows were allowed to take over their husband's businesses.  Veuve Clicquot, the fine champagne, means the widow clicquot, which means it was legitimate to deal with her.  There are many  veuve- whatever biz to his day.  It seems after this rule was made, widows can do business, very many husbands met untimely ends, and women moved out into the marketplace.  Vive la revolution.

It isn't education that determines, because educational achievement is all over the map too.

I think it has to do with conditioning.  An extreme example of this was a conversation I had with a middle class lad from a banana republic, who said in his country the only problem was finance, and his family class they did not do merchant work, so there is no way anyone would lend him the little money necessary to get started.  I suggested he just wok at a macdonalds for six months, to which he replied "impossible."  That is pure social conditioning.

Conditioning (pavlovian) tells us no.  Conditioning keeps us away from the obvious questions.  We all ask the uncomfortable question, "how come" and generally get conditioned to stop asking it.  It is the "suffering" (passion) that causes each of us to ask the particular question.  As we get our capabilities (experience education) we get to the point where we can act on the problem we perceive.  

There is a segment of USA society that believes in class warfare, and they make war on their target classes.  They do hate the entrepreneur, the disrupter.  They make start-up as difficult as they can in law and culture.  They gravitate to government work.

Hong Kong has a population more diverse than USA, with fewer resources yet five times the billionaires of USA.  They have almost no taxes, in fact most people pay no taxes at all.  Their government is negligible, relegated to ribbon cutting and fine speeches.  I saw an ancient man on a stool on a corner fixing ancient electric fans.  It was so hong kong.  he goes to a corner and sits and begins fixing a fan.  Some Mom (they shop 3 times a day) saw him and next pass dropped off a fan herself.  By the time I got to him he had six fans to fix. People throw nothing away.  Anyone can start a business any time doing anything.  Anyone who wants to work can.

Just how different is it?  Walmart failed and withdrew in Hong Kong, the only place it ever has (it is yet to turn a profit in Japan, so it may fail there).  Carrefours (Euro version of walmart) failed too.  I have no beef against walmart, I'm just saying there are alternate universes in which USA education and experience counts for nothing.  Hong Kong is of a vintage that USA once was; we changed, they did not.

What it is, is division of labor.  USA is woefully unbalanced between big and small companies.  For whatever reason, we no longer have enough people saying "I don't like this, I can do it better..." or whatever, and then proceeding to start a business.

So in effect I do believe it is a psychological shift, maybe a process that one covers, that one was pulled out of by our system.    I try to address this to some extent in the class, sort of taking people through the process of experience problem, devise solution, test with customer, advance to samples, test with customers... etc... and show yes they can do it.

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Hypersonic Plane "Lost"

It probably landed safely in China, where it is being studied.

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Violence - Not A Market Phenomenon

Since the free market is defined, in part, as free of force and fraud, violence is something the market cannot deal with.  It is to be dealt with outside the market, like love and altruism.

Certainly you have an inalienable right to self-defense, but like love, it is foolish to delegate this to someone else.  The state pretends it offers security, that it will fight your battles for you.  What the state offers is security up to what you can easily handle for yourself.  if the job gets tough, you are on your own.

If you believe violence is warranted in self-defense, up to and including killing, then you must act on this belief.  But it is an error is to assign your right to self-defense to others.

Here in USA, when things get dicey, the cops run away.  Police in USA have a general obligation, according to the US Supreme Court, to respond, but not a specific obligation.  They can decline any time they like.  Officer safety first.  They ran away in the Rodney King riots.  They failed in the WTO riots in Seattle, and many other times.  If the police cannot bring overwhelming resources to an incident, they do not respond. Then what?

In the UK, the shopkeepers are not allowed to defend their stores from the outside, only within their stores, and under no circumstances with a gun. That is a bit late.  Note the commentary, "The more police arrive, the more aggressive the crowds are becoming..."  Just so. Note the police withdrawing.

In USA you can defend your stores from the outside.  In the same LA riots above, the Korean section of LA was assaulted, but the rioters moved onto easier targets.

That is sociology, too.  If you believe in lethal self-defense, then it seems you have an obligation to prepare for that, but also an obligation to be expert in their use. A growing business would be the selling of arms and training therein. Gun training tourism, where you bring people from overseas to train in gun use in USA, and send USA citizens to train in weapons not allowed, yet, in USA.

 Macchiavelli noted the Swiss were the most armed and the most free.

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June Imports and Exports

It looks like it is 2008 again in trade data, and on Wall Street, and everywhere else.  I hope we get it right this time, and let the banks default, THEIR economy crash, and we clear the decks, settle the debts, and restart, this time with private banks, not the federal reserve system.  Now would be worse than 2008, but if we wait the problems get far worse.  WE simply are not producing, progressing, because of the bad debt sitting on paper.

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The End Game

To protect houses from falling prices  (why?!) Obama admin is considering converting foreclosed properties  into rentals.  Of course these will be means tested rentals, that is you will be obliged to stay where you are and pay 25% of your income.  You may pay $1500 a month, the yahoo next door, $100 per month.  If you get a raise, your rent goes up.

Your pension will be allocated to your house... all of this is so predictable.  To whom will you turn?

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London Calling

The chaos in London highlights, in flame, the difference between capitalism and free markets.  If the UK were a free market, all of those people would be working, not looting.  In capitalism, power is aggregated by trapping people in usury payments on goods and services, wherein the the principle debt will remain constant, but the value of the asset may drop, trapping the borrower.

Trapped borrowers are unproductive, trapped capital is malinvested and misallocated. The genocidal welfare/warfare state is designed to keep elites in power while reducing the undesirables.  In a free market, gainful self-employment is easy enough, becoming financially elite is difficult.

Yes, people willingly agree to those debts, so they are blameworthy, but it cuts both ways.  We have an inalienable right to be free to slavery, of any sort, so we can neither trap people nor allow ourselves to be trapped.  We have to power to do so, but not the right.

Power, aggregated by the financial industry and allied with government, decides who wins and loses.  In a Free Market, such power cannot be aggregated, for free competition trims every success by inviting innovators to cream off customers with close imitations.  Capitalists call this theft.  Consumers see this as choice, differentiation, division of labor, specialization.  Consumers call it good, and support it with their hard-earned money.

The funny thing is Hong Kong was a British Crown Colony for 200 years, and is one of the top three free markets on planet earth.  Hong Kong will not go up in flames, because of the free market basis the Scotsman who organized Hong Kong established.  Anyone and everyone who desires to work in Hong Kong can and will.

On almost every corner in Hong Kong is a lunch counter, selling just about the same thing.  Except everyone has a slight difference, which attracts its regulars.  Everyone benefits.

Walmart and Carrefour failed in Hong Kong, spectacularly, because in a Free Market, such a business could never succeed.

Hong Kong does have five times the billionaires, per capita, than the United States, but those billionaires are heavy in China-based international biz.

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There's Goes Your Pension

Never let a crisis go to waste, and the best crises are pretend ones.  One government policy failure, monetary, is wrecking another government policy, pension plans.  No need to look at the carnage on wall street, the answer will be more government policy, in this case they will take control of all of the pensions to  keep them safe from speculation.  it is only a matter of time.

The way out is freedom, but that is not an option on the table.  Freedom from dairy industry rules that say you must make ice cream their way.  We must be free from all of these rules.

But we cannot have deregulation without a return to property rights.  Morton Horvitz in his book Transformation of American Law shows, court case by court case, among other things, how USA legal system eliminated property rights so that big business could pollute and steal with no restraints.

Deregulating without the property rights rule of law will lead to even more chaos.  That is too tall an order for the people of USA.  Probably the best thing is for the country to break up into smaller units, so people can fix the problems.

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Fun With Food

In Japan it is not enough to grow good food, they must do it artistically.  Check out these pictures.

One of the arguments for intellectual property rights is if no one could control every cent to be made off of creative effort, creative effort would die.

Here is an example of what really happens, tremendous effort goes into creative effort, where everyone involved knows there will not be  cent forthcoming.

In fact, almost all creative effort in life is done out of love, not a desire for money.

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Teach For America, Destroy Teacher Pensions

Teach for America is a program where taxpayers cover the $10 an hour to send college kids into ghetto classrooms, for now, and teach.  As more college graduates find no work, more will take the $10 an hour.  slowly but surely, teachers will be overwhelmed by these "volunteers."

I know several teachers, all with 20-plus year experience, either being forced out, are under disciplinary action, or find their work being constrained to an intolerable degree.  Wait, every teacher I know is experiencing this.

Govt pensions are ponzi schemes.  When the money stops flowing in, the scheme comes crashing down.  When the teach for america kids becomes a critical mass, the education pensions will falter, and fall.

If you escape teaching, and start your own business, you will learn the hard part is not taxes, but regulations.  Here a teacher is crushed after developing a product the market likes.

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War and Delicacies

My my my, it has the sophisticated bitterness with the heavy cream and brown sugar notes I add. What makes it better is chicory, which was added during the war between the states, when coffee ran low.  It is one of those many delicacies that enter the food chain in times of distress.

Wars got people stealing truffles from pigs, eating sea anemone roe, and trying cheese and beer.

Marc Faber sees war coming, the real kind, where USA citizens in general suffer, a draft, and all that kind. It does tend to undo the damage of the boom times, by destroying the excess production capacity, misallocation and malinvestment created in the boom times.  (The damage is done in the boom times, the bust is just where the politicians decide who pays. You.)

Being self employed you'll be constantly trying to work with what is available to meet the needs of people generally going without.    Who knows what wonderful thing you will introduce into the marketplace.

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