Self-employed, In Place, Now

So, if you took my advice from a week ago and started thinking that your employer is a client, and you are self-employed, no doubt you have come up with some great ideas.  You have gotten three attaboys, and they are saying things to you like “You really have blossomed in the last week...!”

Well, if not yet, then as soon as you have three attaboys for good work, good problem solving (because that is what the self-employed do for money) then do this:  Monday morning, from work, call the owner of your boss’s toughest competitor.  

You call from work because you are self employed, and you think and act like it.  

You reach the secretary of the competitor.  And you say, please give your boss a message:  my name is (you) and I am the (fill in your job title) at the (name the company at which you labor.)  I want to take your boss to coffee and tell him three problems I solved at (name the company where you are “employed,” or I should say “self-employed.”)

The boss either replies, or not.

If the boss replies, since in your mind you are self-employed, schedule the meet during working hours.  If you have to take an afternoon off to drive across town, or 3 days off to fly to New York for the meeting, then do so, take some sick leave. When self-employed, you will often find yourself playing along with the petty rules of your clients (stop thinking “employer”).  Get used to it.

Now you are probably thinking his kind of advice will get you more unemployed than self-employed.  But bear with me... thinking this way is new, it is a transformation, stick with me till the end of this note.  It does not hurt to read.  Let me give you some deep background, to help orient you. There is the esoteric and the exoteric.  The exoteric is the mind frame of almost everyone.  The esoteric is the mind frame of a very select few.  This personal transformation can be tricky, cause you are moving into an esoteric world in which you are not an employee, but self employed.  The rest of the world is acting in an exoteric mindset, where you are viewed as an employee.  When Joseph met Pharaoh, he gave Pharaoh esoteric ideas as solutions to problems. The ideas may have been exoteric among Israel, but they were esoteric in Egypt.  You play it like Joseph.

But do let me address your “employment agreement” that you signed with those people from that exoteric world.  Maybe you signed something stronger, like a non-compete or a non disclosure agreement.  Three things:

1. Bodrin and Levine have laid out where on the east coast courts tend to enforce NDAs and NCAs, and their economies falter under lack of competition.  West Coast judges tend not to enforce NDAs and NCAs, so creativity and the economy flowers on the west coast.  Facebook moved to California because the East Coast is in decline, like Venice in the 1700s.

2. The NDA or NCA was signed as a condition of employment.  You needed the job bad.  So the NDA or NCA or both were signed under duress, and contracts signed under duress are null and void.

3. From the esoteric point of view, you are making a sales call to another potential client.  From the exoteric point of view, the meeting with the other boss will look like a job interview.  In every job interview, in the exoteric world, there is a discussion of what success you had at your last  (or present) job,  You will not get sued or violate any laws by sticking to “what I did for the other boss.”  To all outsiders it looks like a job interview.  No one is going to outlaw a job interview.

My opinion is under the ancient legal principle, lex dubia non obligat, no problem.

Now, so you meet with the boss of the other company. Your view on noncompete is esoteric, but you are talking to someone whose views are exoteric.  The first thing you say is “Thank you for meeting with me.  I have ground rules: 

1.  under no conditions will I disclose any trade secrets of my present associates.”  He hears this as you are honorable and trustworthy in accordance with the law.  Let him.  You say this because you are honorable and trustworthy in accordance with self employment.  Let people think what they want.

2. You say “I see myself as self-employed, and my current “employer” as merely another client.  The world has changed and businesses cannot sustain the level of support that is mandated by the state.  The employee is becoming extinct.  We can die off, or adapt.  I am adapting.  I am sure, as a business owner yourself, like me, you understand.”    Now this is critical, no matter what, this guy will not forget you.  You are at least interesting.

3.  Tell him the three things you did, subsequent to you “going native” and considering yourself self-employed, not an employee, that you did that helped your present client (the boss).

Let him listen, digest, ask questions, whatever.

When the topic is covered, you then say, “Please give me one problem you are experiencing in your business.  The toughest nut you are trying to crack.  And what I will do is think it over, study the problem,  apply my intelligence and experience to the problem, and when I think I have my best solution thought out,  I will give you my best advice, absolutely free.”

Now, what you are doing is taking a page form those heroes of the USA economy, the illegal drug dealers, people who assist those who are trying to be responsible for their own pain management, since our brutal medical system recognizes only a narrow category of pain. Self-medication is something outlawed in USA.  These heroes always offer the first pill free, like a dotcom that offers free trial software.  

The boss you are meeting with either gives you the problem to work on, or not.  if yes, then work on it. If this offer goes well, you may pick up a second client.

Now, since I only deal in real world ideas, in the real world, every industry is a village, this guy is going to tell someone else about the coffee he had with you, and your ideas on “employee is over” and clients and self-employed and so on.  One person talks to another.  Every industry is a village.  Soon enough your boss will hear about your moonlighting on the job.  How should you handle that?

So your client (who thinks he is your boss) calls you into his office.  He says  ”I heard you met with my competitor.”

And you say “Yes... last Tuesday, in New York. I bought him coffee.”

And your boss is starting to get mad.  “You claimed you were out sick.”

“Yes, but it is common practice to take sick time for other purposes, and if I revealed what I was doing, then the word might get out.  You and I cannot have that.”

Now he is really getting mad.

“What did you talk to my competitor about?”

“O We talked about all the good things I have done for you.”

“Like what?”  you client asks sarcastically.

This is a good time for you to remind your client (who thinks he is your employer) of all the good things you have done for him, just as he said in all those earlier attaboys.

Now he is well and truly angry, because his frame of reference is exoteric.  He says something about ingratitude, disloyalty, whatever, but in any event, he starts talking about firing you.

And you cut him off and say, “But I did this for your benefit.  “

And he says “And just how did your actions benefit me?”

You say, “Well, in 20 minutes and for a $4.00 starbucks, which I submitted as a reimbursable business expense, I got your toughest competitor to tell me what his #1 problem is, what keeps him awake at night, in effect his competitive weakness. ...  and wait... what? You want to fire ME?  You’ve got a sales manager who is costing us $240,000 a year who is clueless, has no idea what is going on in the market, and has no idea how to figure it out.  In 20 minutes and for $4 I found out your competitors #1 weakness. Aren’t you considering firing the wrong person? Shouldn't you be firing HIM?  You want me to leave and work for the other side?***

He says, “Wait ... what?  You took sick leave and flew to New York to meet with my competitor to find out how we could be more competitive?”

You say... “Well, yes... “

This will give your client (who thinks he is your employer) something to think about.  

It could be risky, but there it is.  You already knew personal transformation takes personal risk.

Now, I’d even make it more risky.  when in the conversation your client (who thinks he is your employer) says “Wait ... what?  You took sick leave and flew to New York to meet with my competitor to find out how we could be more competitive?”

“Well, yes...  I ‘d do that for any client.”

“Client?  What do you mean?”

And then you explain you are no stinking employee, he is your client.  You are self employed.

And explain how the world is changing,  “I see myself as self-employed, and my current “employer” as merely another client.  The world has changed and businesses cannot sustain the level of support that is mandated by the state.  The employee is becoming extinct.  We can die off, or adapt.  I am adapting.  I am sure, as a business owner yourself, like me, you understand.”  

No one will disrespect you, but they will likely want you around for your ideas, in some capacity.

So he says, "Let me think about this."

And you say,  "OK...  should I go fire the sales manager?"

He'll say not, but rock your fearlessness. 

In this way you are liberating yourself at the same time you bring down the evil capitalist corporate structure.  When the people behind the iron curtain brought down the evil communist corporate structure, it was by esoteric thinking that they did it.

Monday contact your boss’s (who thinks he is your employer) number one competitors and set up a meet.  Then email me with how it went.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Vote Messiah 2012

Everyone loves Ron Paul and believes he is a good man and will make things better, but everyone says, "He cannot get elected."  There is no irony there, everyone knows that if everyone voted for Ron Paul, and he neared election, the powers that be would just whack him, Like a Kennedy or a Dr. King.    People don't mean that not enough people will vote Paul to get elected, they just mean if they do, he'll get whacked.  Americans are tired of the political assassinations.

2012 will be, again, a contest between the lesser of two weevils, Romney vs. Hillary.  Now for my part, as a religious man, I find myself always calling on God for divine guidance when I see the ballot.  I look at the candidates and shaking my head I say "Christ have mercy on our wicked souls!"  And this always gives me an idea:  Don't waste my vote, vote for Jesus.  So I always write in Jesus.

So here is what Christians, liberal and conservative, as well as our Moslem friends (whose religion teaches that Jesus, specifically, will be the Messiah at the 2nd coming) should do:  all vote for Jesus in 2012. Write him in.  Why not?  He is constantly campaigning for our vote, although like Ron Paul, He has some campaign supporters attribute things to him he never said.  He even refers to Himself as king.  Let's give him the vote!

As the election nears and Ron Paul is polling in the low 20s, the powers that be will never see it coming.  Jesus Christ will win the election!  There will be serious head scratching among the powers that be.  Who?  Do we have a file on this "Jesus?"  Of course, it is well documented that Jesus was born in Nazareth, so there will be no "birther" controversy, the fact of the matter is Jesus cannot be president. (Jesus, last time it was personal, but this time, really, it's the law.)

Ergo, Ron Paul gets the most votes, and he becomes president.    Let's do it.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Taxation Done Right: No Fight Flight Fraud

A tax lawyer, Charles Adams, wrote a book back in 1982 called Fight Flight Fraud, The Story of Taxation.

He covers the history of taxation, from at least 3000 BC, to his time, 1982.  His thesis is taxation is the price we pay for for a civilized society, following Holmes, but the state almost always gets it wrong.  Taxing is tricky, and he shows, through historical example, where taxes go right and where they go wrong.  Taxes done wrong invite fight, flight or fraud, or some combination thereof.  And his history of the world revolves around tax policy, and its effects.  It is a fascinating trip.

The book is fundamental to any business library.  His study is comprehensive and entertaining.  My first criticism would be general... please, if you have serious content, do not lay out your book like a coffee table book.  Those of us who have the gift of ADD/ADHD get lost in such books.  The book was a gift for my birthday. It is big, 9x`12. .  It has lots of pictures  I spent a month jumping from picture to picture, reading bits here and there, and not making much sense of it.  I finally forced myself to read through from the beginning, and found the book is a treasure.

There are nuts who say the income tax is unconstitutional, and this lawyer agrees.   Not only was an income tax introduced twice, twice it was ruled unconstitutional and overturned.  Three times is the charm, and there it is.  It is still UNconstitutional for 2 reason he lays out, as a lawyer, but by 1982, USA was no longer  nation of laws.  He outlines the relentless effort on the part of American counterrevolutionaries to undo the constitution, successfully.

It was also fun to read a book contemporaneous to 1982, where many of his allusions come from that era.  A trip down memory lane, to boot.

He does not like our tax system, and his criticism of  the system 1982 would be all the stronger for today.  If you love the state and want to preserve it, then this is a game plan for avoiding revolution while funding the state.

Under Reagan there were some changes to the tax laws, but they only served to make collection wider and more efficient, not better.

A couple of interesting points.  In many cases Jews fled to Moslem safety in the face of Christian ferocity.  In one instance, welcoming Jewish perspicacity, a Moslem potentate declared Jews tax exempt.  The Jewish elders appealed to the fellow to make no such rule, for in time it would invite envy and repercussions.  The Jews have not forgotten the disaster of Joseph and their experience in Egypt.

Liberals love to point to high-tax Sweden as the workable ideal for USA.  What I did not know is Swedes are an aggressive, world class tax avoidance people.  Important detail that.  Their aggressiveness would make an Italian blush.  And on the other hand, their tax collectors would make an SS officer blush.  We can all name famous Swedes, none of them live in Sweden.  As soon a Bjorn Borg started making money in tennis, he got out of Sweden.  Swedes work hard to get way from Sweden.  When speaking admiringly of Swedish polity, that should be noted as a downside to their system.

It is his critique of the USA tax system, in light of all others, that is the harshest.  And he was writing in 1982,  imagine what he would say today.

For my part, I do not buy his thesis that “taxation is the price we pay for a civilized society .. and we can get it right. “  Taxation is one price we pay for a state, but we do not need a state.  Yes, the state can make taxes more tolerable, but since crisis feeds state power, why would the powers that be ever make life easier?  Abusive taxation may invite fight, flight or fraud, but as this history shows, the state has endless ways of countering all three.  And none more prolific than the United States.

Further, his history shows, but he does not note, that when taxes are low, the burden fairly distributed, and the government careful in spending it, we have peace and prosperity.  Well, we see that today in places like Andorra and Hong Kong, where most people have no tax burden whatsoever, becasue people tend to be self-governing when there is no state to cause malinvestment and polity distortions.  The conclusion would be eliminate the state and taxation, but he will not go that far.

But as a lawyer, his livelihood depends on the state, so as a lawyer, he will always prefer the state to his clients. 

When the US was being formed, watchers around the world were observing and commenting.  One such observer, Immanuel Kant noted an internal contradiction, a fatal flaw in our system.  You know that we have a system of checks and balances, the legislative, the judiciary and the executive branch.  Lawyers are officers of the court, that is to say, they are officers in one of the three branches of government.  For an officer of the court to serve in any other brach of government is both a conflict of interest and an abuse of power.  Kant warned such a flaw would bring down our system.  It did.

A supreme court justice, Oliver Wendell Holmes, at the top of the judiciary, is the one who said taxation is the price we pay for for a civilized society. And take a wild guess where the quote is written in stone?  Over the entrance of the Internal Revenue Headquarters, a division of the executive branch! Do we need any more evidence of perfidy than that?

One step in recovering freedom will make the implicit conflict of interest, explicit: no lawyer may serve in the legislative nor executive branch.  I think we would have avoided much grief if we listened to Kant.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Buffett Buys Papers

When the telephone made quick communication easy, it was captured by regulators who turned over to the few.  When the airplane made travel faster, it was captured by regulators who turned over to the few.  When the radio made mass communication cheap and plentiful, it was captured by regulators who turned over to the few.  TV too.  Hitler built the autobahn and the Volkswagen to cruise it, and then shut down the German borders (except for soldiers...)  It is what states do.

Bill Gates has done it, and Warren Buffet it doing it, buying newspapers.  Maybe they are really just buying the ground under the businesses, the real estate.  But Buffett once called newspapers the only megaphone in town.  The internet changed that.  The internet represents a loss of power to the state.  If the internet must be restricted, like German borders, then newspapers will be, again, the only megaphone in town.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Hillary 2012

I know I said Hillary 2008, but I can be so naive about politics.  I had no idea the powers that be would run a "black" on pro-peace, pro-freedom campaign and then continue all odious policies, blaming the black guy.

Hillary is smarter than I am and stayed out.  But she will be back.  these "crisis" will come to a head, and Obama will withdraw, Hillary will save the day, become the candidate and crush Romney.

Hillary will be better because no will be fooled, as with Romney.  We'll know what we are getting.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Deregulation

During the last boom, there was massive misallocation of resources to support the malinvestment in housing and the production and distribution of goods and services to support the boom in housing, and even to furnish the houses created in the boom. There is much unemployment resulting from the bust, among people who await the government to create another boom, in which the unemployed will again be employed. Good luck on that.

People who would have been self-employed were taken up into enterprise directed by misallocation, or otherwise an alternative to self-employment. AS trucks, stores, shopping carts got bigger to match the credit boom, mini-storage companies boomed to store all the junk people were buying. Stores stayed open longer hours and more days to accommodate the traffic.

At the same time as government grew, the backfilling of rules and regulations written by thousands of government workers, in turn enforced based on the whims of millions of government inspectors was in effect salting the earth so new businesses rarely formed, or could form as the big biz model capitalism applauded people wrote rules and regulations that served big business, but crushed small business, not that anyone particularly noticed, since there were too few people to object. (And the worse rules always contain a "grandfather clause" meaning the new regs only apply to new businesses. That would be you.)

We live off the farmer and fisherman, with division of labor making us wealthy, in the sense of access to goods and services. Until we can clear out the excess capacity through bankruptcies and rule of law we will not get out of this.

The bailouts were to save the system.  Or more to the point, save A system.  If that system were to fail, a better system could emerge.  Out of the ashes a better economic system would emerge (as long as violence is not involved.)

We have such a clear example of this in progress.  In 1980, there was a perfectly good telecommunications system, although monopolized, in place and functioning.  No apparent need to change it.  It was changed  It was deregulated. And then we got competition.  Then we got innovation, hooking up computers to telephones, then we got the internet.  Then we got Apple and Facebook and google.  And not a shot fired.

We need to deregulate something, anything.  Banking.  Law.  Defense.  medicine.  Education.  ANYTHING.  Mass transit, which spends over 50% of the money to move 3% of the people...it is goofy. Free markets will give us what we need.  As in telephone deregulation we have no idea what good will come, we can know it will come.

We need it now.  We'll know we are out of the woods when toasters are made in usa again.

Bookmark this post --- Email this post

Jury Nullification and You!

In another exceptionally indecent act, FBI agents lied to an old man in an attempt to trap him in violation of a federal law.  Subsequently, federal prosecutors attempted to have the old man imprisoned, in essence for life.  The crime?  Teaching the ancient law on jury nullification.

"No legal system could long survive if it gave every individual the option of disregarding with impunity any law which by his personal standard was judged morally untenable," they said.

Here is the problem.    We've always had jury nullification.  With jury nullification, the system has lasted a long time.  The prosecutors are either evil or stupid for saying this.  I think evil, since obviously the old man was not disregarding with impunity any law which by his personal standard was judged morally untenable, and jury nullification does not provide for anyone disregarding with impunity any law which by his personal standard was judged morally untenable; it provides for that ultimate judge in our USA constitutional system, an entire jury of citizens, to disregard with impunity any law which by its personal standard was judged morally untenable.  That is precisely the check on the state the architects of our constitution had in mind.

It is not jury nullification that is a threat to our system, but systematic abuse by state functionaries of the criminal justice system.

That people sworn to uphold the constitution would try subvert the constitution to imprison a man in essence for life for attempting to teach the constitution shows just how corrupt the FBI and federal prosecutors have become.  Add jury nullification to the list of ways that the USA is unique, and the state wants to eliminate:

Conscientious objection.

Posse Comitatus

Bounty hunting

habeas corpus

free markets

pro se court appearance

federal tax exemption

state tax exemption

freedom to contract

freedom of religion

homeschooling

private attorneys general

stand your ground laws

right to arm

freedom of press

freedom to travel

property rights

among others....

Each and every one of these is under assault by state minions.  In the degree any of these cause you to squirm a bit, is the degree to which you have been socially conditioned to hate your freedom.

Happily one federal judge knocked all those wicked boys on the state payroll back into line.  Atta girl, Kimba!  And here is one good ex-federal prosecutor talking about you running afoul of federal law, entitled Three Felonies a Day (what you commit just by being alive).



Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

ExImBank Roundup

Although I've been long aware that "journalism" today is a matter of being on the PR distribution list for a government agency, cut and paste the content into an article and then slap a byline on it.  All over America "journalists" are writing the same story, surprisingly like the ExIMBank press releases.


I should be fair, each writer does emphasize one point of the original release, which I suppose takes some creativity.


So lets see...

North Dakota -
“It’s very good for us. If you’re not guaranteed financing, you don’t want to risk producing a product for a foreign country and then find out the money is not available,” said Boer. “We’re just very pleased that it was passed because it allows us to be more competitive in the international market.”

Sure beats having to do your job, and use letters of credit to get paid.

New York -
The Export-Import Bank “is one of the only tools manufacturers in the United States have to counter hundreds of billions of dollars in export financing that foreign governments offer to their exporters,” the National Association of Manufacturers said in a letter to senators.

O, they have another tool.  And that is buy up what is dumped into USA market and distribute it themselves, making money.   Next detail their excess productive capacity in next step up higher order needful things.  Naw, this is America, just take welfare if confronted with the slightest challenge.

Washington -
Senate reauthorizes Ex-Im Bank in victory for exporters

That should be "Senate reauthorizes Ex-Im Bank in victory for Some exporters, at expense of others."


Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

ExImBank and TXT

The taxpayer-funded pro-ExImBank self-serving PR juggernaut rolls on, this time announcing taxpayer backed loans to TXT, the maker of small airplanes and helicopters.

As opposed to NAV, the other ExImBank poster child, TXT seems to be a moderately well run company.  Nonetheless the stock price is less than half of what it was a few years ago, and insiders are unloading stock.  But just like NAV, TXT pays to play.  Here is the summary of contributions to politicians who make possible EXIMBank taxpayer support to Textron.  Raw.

How about companies who are backed by ExImBank have their insider transactions impounded until the taxpayers are off the hook for the loans?  Naw, the game in Capitalism is to take the profits and socialize the losses.

How about no ExImBank funding at all so companies are either well run or go out of business, allowing better run companies, like Cirrus, to grow by hiring and better managing the talent made unemployed from a failed Textron?  How come nobody in government or big business believes in America?

Stand up for America!  Get rid of the ExImbank now.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

How ExImBank Harms Small Business in USA & Overseas

In my book I talk about the export sales agent, a person with a strong background in a narrow field, a sort of semi-retired (as in from corporate America) position matching buyers and sellers. It is not for everyone.  Here is a company that seems to fit that mold.

This one comes to my attention because of the monster relentless tax-payer funded PR campaign, ImExBank is using him as localized fodder to gin up support for itself.  

The press release/article says in part

Skelley founded the company after years of traveling to hospitals throughout the world as a consultant to learn about their medical equipment and repair needs. About 15 years ago, he left that work to found Skelley Medical with the goal of reducing health care costs and increasing access to affordable health care around the globe.

A side observation is how readily media will accept an email from the ExImBank, slap a byline on it and call it news.

Anyway, two claims in the article I challenge:

1. Skelley’s used medical equipment export business idea is something new.  Nonsense.  In China in the 70s I met people trading in such, and in the 80s there was a show in Shanghai specializing in it.  In the hundreds of seminars I have done, often there is someone desiring to go into this business.

2. Used Medical equipment export sales is helped by ExImBank loan guarantees.  Nonsense.  Export business is funded by the buyer overseas by means of letters of credit.  Everyone else in the business is doing fine without ExImBank funding.  How come Skelley gets it?  How come now?

ExImbank funding is unnecessary, and demonstrably causes several problems at once:

A. There are countless other USA citizens selling used medical equipment overseas from USA to wherever. Let’s call them Free Market MedEx.  How come Free Market MedEx does not get support too?  How come only this ex-GE employee?  

B. By preferring Skelley to the others, ExIMBank offers Skelley the opportunity to give better terms over other USA exporters already in the business like Free Market MedEx. Why is a government agency picking winners and losers?  Why is a government agency burning through money to pay for a infrastructure that just moves business around from one business to another?

C. ExImBank’s preferences for Skelley pose a problem to Free Market MedEx’s established customers overseas, who we will call Buyer X. Buyer X can buy from their established supplier of used medical equipment in the USA, Free Market MedEx, or buy from Skelley. Skelley has a government-backed advantage over the people who built a business without government backing, Free Market MedEx.  With Skelley, financing is easier, looser by virtue of ImExBank backing.  That is attractive to Buyer X. Nonetheless, since Skelley is new, Buyer X will probably stick with their regular supplier in USA, Free Market MedEx.

D. If in fact Buyer X sticks with Free Market MedEx, then the overseas competitors of Buyer X will set up with Skelley and compete with an unfair advantage against the established business of Free Market MedEx and Buyer X. By these means, less capable companies overseas, ones not creditworthy, get an advantage over more capable businesses, the creditworthy, compliments of the US taxpayer. 

One way or another, ExImBank not only harms businesses in USA, it harms businesses overseas as well.

Prediction:  there will be a wave of losses that the taxpayer will have to pick up when the current crop of PR-motivated fundings and wild expansion in loans backed comes crashing down. Give it about 2 years.

How come Skelley?  Could it be that GE, a bailed out company whose CEO advises Obama on economic recovery, and has a massive amount of used medical equipment in USA, would like to have one if its execs backed by the government to move this equip overseas?  Could it be that by getting ExIMBank backing, Skelley’s past employer will see GE used equipment advantaged in the market? And the more shipped out of USA, the less there is, and the higher the prices on what new and used remains in USA.

Skelley has been awarded 2012 New Hampshire Small Business Exporter of the Year and New England’s Exporter of the Year by the Small Business Administration.  If you harm other businesses by taking taxpayer backing, you'll get government awards. Nice!

***John Spiers will be offering an all-day seminar on small business international trade start up at Orange Coast College, Los Angeles Area, June 29, 2013.  Full info here...***

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

All Hail Price Gouging!

Probably the most critical event in the effort to alleviate suffering in the course of a natural disaster is for the merchant to begin the practice of price gouging.  This is the only means available to at once rationally allocate scarce resources and to send out a signal as to what is most needed.

No state intervention can match price gouging for efficiency and efficacy in disaster relief.

Say potable water is in terrible shortage after a tornado.  The stores that do have what little is available begin to charge prices so high that demand slows.  The merchant is careful not to set it so high he sells none, not so low all is gone in minutes.  This benefits the community in two ways: 1. the merchant defends the community from the hoarder, he who would buy it all and hide it. 2. The merchant sends out a signal as to the going price of items in shortage.

One buyer at the exorbitant price is the charity, who would be securing some supply in order to meet the needs of the desperate.

As this is going on, the price signal goes out, and countless truckers in unaffected areas hauling bottled water to another destination get word of the going price of water in the disaster area, and they turn toward the fantastic profits.  Water comes rolling in.  The merchants buy high and sell higher.

Others begin to organize around the market at that price.  Say natural gas is still plentiful after the disaster.  People begin boiling bad water to make it safe, and selling that, meeting demand.  Poor people with access to cheap and plentiful natural gas earn tidy sums to begin reconstruction.

The reality of disaster price gouging is the top price ever paid lasts for no more than about 15 minutes.  And here the merchant, who up to now has been gouging, is now buying ever lower, and may even overshoot demand, and end up selling water for less than he paid.  Condign punishment for any merchant that gouges for greedy motivation, instead of purely altruistic motivations, as is usually the case in price gouging.  (In reality, the merchant will closely monitor prices and make sure there is no injustice in the process.)  In any event, the community in which the merchant operates, will exact precisely the right retribution for any merchant who goes too far.  No state need be involved, because in this matter the people are able to govern themselves.

As truckers find the profits diminishing because diverted supply is sufficient to meet demand and the market is normalizing, as communicated in price, then the supply begins to match demand.  Take this phenomena across all needful things in any given disaster, and you have the free market as the best response in a natural disaster.

The state, on the other hand, makes a murderous, chaotic hash of disaster relief.  Hurricane Katrina went even further, as the powers that be used the disaster to dispossess americans of African ancestry of their extremely valuable land and reorder New Orleans and Louisiana's unique arrangements regarding oil revenues and taxes to something more amenable to Texans.

Merchants are also the best at responding to more limited disasters, when the question is emergency.  When a train crash happened near a Costco in California, the store, employees and customers immediately organized to bring relief to the victims out of store inventory and personal generosity.  Can you imagine if the crash occurred outside of a FEMA office?  O! The horror, the horror!

Disaster relief starts with the merchant.  The more widespread the disaster, the more the need for price gouging.  All hail the merchant and the benefit of price gouging!

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Lagerfeld & Janelle

Karl Lagerfeld praising a young artist in Moscow

The same artist LIVE in Glastonbury

It's good to see talent emerging in spite of the creative lockdown...

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

The Economy, China, & What's Next

Here is a wonderful summary of where we are and where we are going...

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

How To Play "Intellectual Property Rights"

As we all know, the concept of intellectual property rights is a criminal activity, one of many, that the state engages in, by virtue of the fact that the practice is contrary to natural law.  Further, the regime is ultimately enforced by violence, which is in violation of revelation, "thou shalt not kill."

Now be that as it may, we in fact do labor under an intellectual property regime.  Truly no getting around it.   In Romans 13 St. Paul says obey your government.   Jesus said render unto Caesar...   Some evil preacher men say this means you should get with the program, and join the bad guys.  Nonsense!  Later the same St Paul says never use the government court systems.  So which is it?

Saint Paul explicitly says the way to overthrow the bad guys is to treat them well, which will heap burning coals on their heads, following Jesus who said love your enemies.  When Jesus was faced with a tax, which the bible teaches is odious to God,  Jesus' response was to pay it so as not to give offense to the evil power-mongers.  

And we have no enemy more lethal than the state.  Just ask Jesus.  And for that matter, St. Paul.  Both of whom were whacked by the state for teaching "love your enemies."  Jesus and Paul are not teaching "the state is evil, it is good to join them!  Intellectual property is wrong, let's join in!  The state kills people.  Let's join in killing Jesus and Paul!"  They are teaching the counter-intuitive means for working ones way out from under the evil of the state. Does heaping burning coals on someone's head strike you as cooperation? They are teaching how to free oneself from slavery.  The starting place is recognizing slavery exists.  Understanding is not agreement.  But understanding is fundamental to the process of liberation.

So we do want to understand how IPR works, but we do not want to participate in it.  How can we do that?

First understand how IPR harms the economy.  The best introductory book on the topic is Against Intellectual Monopoly.  You can read the whole thing for free online, compliments of the authors.

You can also buy it on amazon, which you will want to do, because the book is that good, you want it in your essential library...  either kindle or hardcover.

Hardcover:

Kindle:

The book is wrong on trademarks, but who cares?  It is 99.9 % right on.  Saint Paul said no one has the entire picture.

Once you've read the book you'll be able to begin to overthrow the system.  Here are the specifics.

1. Gain IPR on anything you can.

2.  Open source whatever you have granted as IPR.

Done.  The system falls apart.  No bloodshed in the face of implacable evil, just the free market.

IBM is the number one patentholder in the USA.  They have open sourced their patents.  How come?  Because when some 19 year old genius sees an cool new thing to do with IBM source code, the kid is free to do so.  The kid sells the idea to his uncle, who uses it, and saves money in his business.  The kid got $500 from his uncle, and is deliriously happy.   IBM sees it, and mature sober IBM people assess it for merchantability. IBM then, through its monster network of customers, makes money on the 19 yo kid's idea.  IBM makes tens of millions.  Each uses their labor mixed with natural resources to produce something valuable in the market.  Everyone is happy, peace and prosperity is justly distributed.  No Jesuit peace and justice committee necessary.

Even if the kid made ten million on his idea based on IBM code, IBM could care less.  The business the kid found was never IBMs business anyway, since they would never have thought it up.  What IBM gets is market on the scale that IBM is tied into, and that is the hundred of millions.  So what we see is the free market, in spite of being saddled with odious state violence-based economic rules, can still operate.  People can be free from the evil slavery of IPR.

Bezos claims he patented oneclick ordering to keep anyone from gaining IPR and forbidding one click ordering on Amazon.com.  Attaboy!

I maintain copyrights on my books, so that I am free to give my books away.  If I did not maintain the intellectual property rights, I could not give the book away for free on google or amazon, nor sell them on amazon, because IPR is positive law and to play we are obliged to make positive representations of our legal status.  If someone else owned the IPR, they could forbid me from giving the book away for free.  Giving my book away for free is critical to the success of the book, critical to the achievement of having it sell consistently on Amazon.com for ten years now.    Rarely do bestsellers last that long.  I am up there with Shakespeare for consistent sales.  My book sells well (ok, let's just say far in excess of what any promotional efforts would yield) because I give it away for free on googlebooks to anyone who wants it.   (It is also free for the reading on amazon, but google search engine actually drives people to the book. Amazon does not have that push.) Enough people who find the information in my book for free on googlebooks want to buy the book.  Therefore, giving it away makes it sell.  Finding the book finds me, and people contact me directly. It is the modern version of the book signing event. It is counterintuitive, it is paradoxical, but it is reality.

This is only possible because I know IPR is evil, and I know how to beat it.  By giving my book away for free on googlebooks, it is so widely accessed that I get sales otherwise not possible.  Yes, people "steal" my book on googlebooks.  But if they "steal" it, they were never my customers anyway.  How have I lost anything by not enforcing the violent provisions of IPR?

Now, if I did not "own" these evil IPRs, then someone else could, and forbid me to give the book away.  Under our system, if IBM did not own the IPR on their patents, they could not make them free.  We do not own the IPR so that we can benefit ourselves by visiting violence on our neighbors under the system,  we own the IPR so we can free our neighbors and ourselves from the system.  We recognize the system.  We overthrow the system, using the system.  This is the nonviolent, free market way.

Saint Paul was not saying slavery was a good thing, he was saying slavery needs to be overthrown. Killing government workers will not do the trick.  To free a slave may very well result in re-enslavement by someone else, manumission is always tricky business in states that constitutionally provide for slavery.  We see this in USA 2012, the only modern state whose constitution provides for slavery.   By "owning" a slave, one may protect a slave's human rights and freedom.

This thinking can be applied to any and every field in which IPR is doing its harm: medicine, movies, music, agriculture, automobiles, you name it, we can be free of it.  But the problem is so many people prefer to enlist state violence to ensure a sinecure, and prefer not to serve people or make an effort to meet other peoples needs.  They love the state.

When Michael Lewis wrote Liar's Poker to explain just how wicked the practices were on Wall Street and the utter abuse of the USA investor, he hoped to effect some change and improvement by his expose.  He was perplexed to get an overwhelming number of letters from the best and brightest at Harvard, Columbia, Stanford, Yale... Christians all, inquiring as to how they could get such jobs themselves ripping off their fellow man.

IPR lawyers, who are all state workers, know the system is dead, and know that smart people are moving away from the regime, so they are now in a death-struggle to rewrite the laws to make themselves relevant and to maintain the stream of what they mulct from the productive sector of society.  We all love a system that will feed us.   Most IPR lawyers love the IPR system.  Some patent attorneys are honest, and admit the system is evil and harmful, and advocate the system must be abolished, in fairness.

The trick is not find a way to change human nature, the trick is to withdraw the consent for the state to aggregate power.  As I pointed out 1 Samuel 8 is the first of many instances where people clamor for oppression for themselves.  Part of our work is to undue the damage done. We can take heart observing places like Switzerland, Hong Kong, Andorra, Singapore, San Marino, Iceland, the Vatican, etc, where the state is nearly non-existent and in that measure malefactors find little purchase from which to leverage their evil designs.

 AS the capitalist system continues to disintegrate, mustn't worry.  This is good.  Simply review reality, and understand that a better system is largely in place already, and the sooner the malefactors bring their system down upon themselves, the better for the rest of us.  Just be well versed in how the free market works, so you may thrive as those who have aggregated exceptional property find their world crashing down around them.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Happy Mother's Day - in America!

Here is a heartwarming slideshow of kids with their moms, view it, click the link, I promise you will be moved.

Reuters, from above link

These moms are in prison largely for violating state drug laws.  How come we have such laws?  Why, look at the top five contributors to marijuana criminalization laws.  And to think the left worries about corporate America!

Happy Mothers Day, moms everywhere!


Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Usury and Interest and Loans

Usury is still condemned by the Catholic Church and Islam as a grave evil. Before we can look at the question, there is a particularly knotty problem with definitions.  First there are the exact definitions of the terms in religious discourse, and then the loose and different definitions in common modern usage.  This leads to much confusion.

In religious discourse, usury is defined as charging anything on a loan.  And what makes someone culpable of sin is the desire to gain from making a loan.  Intent is required.

Usury is defined as 

To demand or receive or even to lend expecting to receive something above the capital is to be guilty of usury; usury may exist on money or something else; one who receives usury is guilty of rapine and is just as culpable as a thief; the prohibition against usury holds for laymen as well as clerics but, when guilty, the latter will be more severely punished.

Usury, outside of religious discourse, is commonly defined as "charging an exorbitant interest rate."  Interest rate is commonly defined as whatever percentage you must pay on a loan over whatever time.  Intent is explicit. 

Let's look at the word interest and how it is commonly used in finance.  I might say:

I have an interest in a timeshare. I have an interest in a movie theatre. I have an interest in a gold mine.
I have an interest in a loan arrangement.  Anyone will understand what I mean, even though it is vague as to what the interest is.  The interest is explained in the contract establishing the interest.

Then there is a specific kind of interest, a perfected security interest, which is used in innumerable ways to protect a given interest:  a bank may take a floating interest in a business to block out any other banks from making any loans, one business owner may take a perfected security interest in the other owner's portion to prevent the stock from being sold to a third party, to name just two. In any event it is designed to protect a party who has an interest of some sort in a deal, and we have not even begun to talk about how interest is commonly thought of, and that is a percentage to be paid back above a loan amount.

Interest is the term we use for whatever one rightfully has as participation in a deal.  So how did we get from rights in a deal to interest as a charge on a loan?  The etymology of the word is:

Middle English, from Old French, from Latin, it is of importance, third person sing. present tense of interesse,to be between, take part in : inter-, inter- + esse, to be; see es- in Indo-European roots.]

The common use of the word interest, that is the amount you pay for a loan above the stated principal, is sloppy and thus leads to confusion.  A bank has an interest in your home as collateral since they lent you money to buy the home.  As a part of the deal, you agreed to pay 6%pa on the money you borrowed.  It did not take much time for us to shift the meaning of interest from rights in a deal to the amount you pay on a loan.  This amount can be an interest in the deal (I have an interest on a 100K loan that also carries 6% pa charge on the loan amount) but the 6% is not "an interest,"  the 6% is just a condition of the deal, and more precisely called usury.

In religious discourse, money charged on a loan is usury. All usury is forbidden, whether it is a penny on a billion dollars over a million years, or 100% on a dollar overnight.   Why it is forbidden you'll have to study the theology, for my purposes I am just getting definitions straight.

As we see above, interest is a very good term to identify the general phenomena of participation in a deal.  One such participation, that theoretically may be allowed, would be if making a loan were to cost you money.  Say someone desperately needed a hamburger Thursday, for which they would gladly pay you Tuesday.  You have a pending deal where you can sell some spinach tuesday for $10, but if you sold it today, you could only get $5.  If lending the money actually caused you a loss, then you may make a deal in which you sell your spinach today for $5, but the fellow who borrowed the money must pay you $10 on Tuesday.  Since you took a loss being charitable, since you have no intent of making money on your money, your interest in this deal in which you lend five and get ten back is legitimate, kosher, halal.  This particular interest is not usury.  You are helping someone out and not coming out ahead.

I will note, the loophole is aided by the fact that in contemporary ordering of economic regulations, what you are borrowing is not money, but tallies and credit, not money.  In this case, the deal itself is forbidden, since it is based on fraud.

If someone makes a loan with no percentage above the loan amount to be paid back, then the lender still has an interest in the principal to be paid back.   The lender is not looking for a return ON his money, he is merely looking for a return OF his money.  Nonetheless, this lender has an interest in this loan, an interest in the principle.

Now, note something interesting in the etymology, "to take part in."  Islam has the exact same teaching on usury,  the total prohibition. Perhaps since their prophet is a merchant, they highlight a particular aspect of usury, and that is "the lender takes no risk."  He gets his principal and the usury, no matter what.   This highlighted aspect is forbidden.  Not only is usury forbidden, "no risk" participation in a deal is forbidden.  That is to say, if Abdul lends Ibrahim $100,000 on a business deal, and the deal goes bad, Ibrahim is out the $100,000.  We call these "no recourse" loans.

The idea is wealth is something to use beneficiently,  not to abuse and entrap others. It also mean loans are a means for the more successful to help the less successful and teach them how to do better.  Moslems have an interest in a deal, and that is in the sense of "to take part in."

You were all counseled in your youth to save money and the magic of compound interest.  A young man putting aside a few hundred a month in his youth will come out at retirement far ahead of the 50 year old putting aside tens of thousands a month.  The other side of that equation is the person paying out the interest.  It can be a heavy burden indeed.

And that is the reason religion forbids usury, it is that usury is how the bad guys aggregate power in order to capture the commanding heights of society and take away the freedom to exercise your own will.  Think what the student loan does to the young.

Just as we have no right to enslave ourselves (the power yes, the right no) we have no right to charge or pay usury, even if it is cloaked in the term "interest."

At the small business level, there are so many legitimate ways to be financed, that paying interest is simply not necessary.  The ideal is to be self-financed.  But there is vendor financing and factoring (assuming the factor can lose) to name two.

Certainly eschewing usury makes it more difficult to get financing, but not too difficult.  Certainly usury can facilitate gaining more money from business, but more is not necessary.  Participating in usury certainly is necessary to arrange matters so that war and poverty and misallocation and malinvestment may occur.  The point of business is lifestyle, not stacking up medium of exchange.

Usury militates against wealth in the sense of general prosperity (the extent to which all have access to all goods and services) and it facilitates the economic divides and the exceptional aggregation of money that militates against peace and prosperity.

Under no circumstances should usury be outlawed.  Just as the rest of us ought not be forced to pay taxes to have usury agreements enforced, we ought not be taxed to enforce a prohibition.  The proper response to usury is for the rest of us to look upon it as we do say gambling debts.

If someone owes a gambling debt, we are unlikely to get excited about the "victim," the winner at cards who is not paid back.  And so with loans and interest.  if there is a dispute between two people oer a loan and interest, or either part, the rest of us ought merely note the participants in the dispute, assess culpability, and adjudge whether we would ever deal with either party.  That is necessary and sufficient to the task of keeping the market orderly and efficient. That is all the 'government" we need.  We need no state involvement.

Bookmark this post --- Email this post