Visiting Iran

All indications are Americans who visit Iran, especially women, are treated respectfully and warmly welcomed.  It is hard to imagine why anyone would want to attack these people.

Even stranger is how come USA has so many military bases around this country.



God willing there will be no wars, and Americans visiting will be to do business, not to bring violence.

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Catholic Argument Against Intellectual Property Rights

Any person of good will intuitively understand "intellectual property rights," something that cannot be found in natural law, is wrong in spite of being enshrined in positive law.  The church obliges the state when the state makes laws, giving the state the benefit of the doubt that the law is licit.  The church is again, as it does ever century or two, rethinking its relationship with the state.  In these times of foment, it is good to review what can stay and what needs to go.

Why the concept of "intellectual property rights" is wrong, from a Catholic moral perspective, is that

1. Intellectual Property Rights allow someone to sell something that does not exist, in reality just an idea.  It is wrong to sell something does not exist.

2. The contract sells something that one does not own.  The actual product, say a book or a machine, is produced by someone else.  It is the capital of that someone else, their management, their sales network that actually produces a good and a customer.

3. It is a business contract in which one partner takes no risk.  The person with the "idea" joins in a partnership and gets paid no matter what happens.  The "idea" person takes no risk.  It is a fundamental requirement of justice in business that all partners share the risk.

4. Asymmetrical contract.  People are forced, under threat of violence to agree.  The only way anyone would agree to this is if, under threat of violence, they are obliged to comply.  And that is the system we have.

The funny thing is there is a voluntary association that is right and just that makes IPR unneccessary.  Just as Apple pays artists whose creativity drives people to buy Apple machines that ease access to such creative works, so a manufacturer may retain a designer on a "royalty basis" to assure access to a constant stream of creativity.

The irony is people working under the voluntary association on average do far better than those who live under an inherently evil regime.

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Just Because

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330 Sales Boeing Will Not Get

Like competing on price, depending on subsidies is a game at which someone else can always beat you.

Boeing is probably the #1 welfare queen in the USA, perhaps the world.  The subsidies, EXIM support, government contracts, tax exemptions, and so on constitute such malinvestment and distortion of its organization that the company could not survive on its own.  Whatever Mitt Romney said about one 47% of Americans, can also be said about another 47%, the Republican welfare queens.

When it comes to subsidies, lean manufacturing, cheap management, the Chinese can always go lower. It has orders for 330 planes, but orders are not sales.  China still has to build these planes, and then they must fly, something Boeing has found challenging of late.

A standing military needs a steady stream of supplies.  Boeing designs for the military, and then tries to adapt for the commercial market. The 747 was designed as a military freighter, and some 25% of the world fleet carries freight only.  Boeing built a hydrofoil for the military, but its commercial application (as well as military) went bust.  (I rode one from Hong Kong to Macau once,  noisy and you cannot see anything.)

With no standing military, Boeing might have been pursuing other business, like mag lev or some other transportation marvels.  But USA's fed policies, tax code and leveraged make-work regulations make outsourcing profitable.  This leads to a disastrous results over time.

USA's advantage is creativity and in order to protect the Boeings of the USA, the rest of us have to stand down.  Government policies pick winners and losers, and it is Government policy to support the losers and punish to productive.  Get big or get out, as they say.

Who knows how things are going to turn out.  The best lifeboat is self-employment.

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Ghost Inventories in China

News reports tell us that in China, after the boom, scams are being uncovered, like we see in USA, with Madoff, et al.

It appears the Chinese government had a program to help domestic industry by subsidizing production.  These preferences will always cause malinvestment, no matter when or where they are tried.  China has programs that "benefit" the steel business.

In this case, the steel companies produced based on state program funding, and others got bank loans to buy the production of steel for some putative project.  Once a company had a warehouse full of steel, they then had assets upon which to get a bank loan with steel as collateral to pursue the business for which they originally wanted the loan.

So, if you need $1 million to open a restaurant, you borrow $2 million from a bank to buy steel for foreign trade, and then warehouse the steel.  With $2 million in steel in a warehouse as collateral, you now can get a loan for a million for a restaurant. Complicated, but it gets the job done.

Well, when a bust comes, frauds get exposed.  It appears at some point in the game, they decided all this steel was just too much trouble, so they did not bother with the part where the steel was made.  It was all just on paper.  Now when the state goes to collect the assets when the borrower defaults, they find... yikes! ... no assets.  No steel.

Now with war drums beating, maybe this is disinformation to mislead the enemy.  But it is probably just typical raw financial shenanigans that takes place in any boom time.

A insider at Washington Mutual bank told me at the height of the real estate boom money to buy up those bundles of mortgages was showing up faster then WAMU could create mortgages.  So if they had $100 million more in money available but not $100 million in loans to sell, at one point WAMU just photocopied the last $100 million in loans and sold that too.  The idea is at some point the would get caught up in originating loans, and had $100 million in guaranteed financing.  Why not?

The damage is done during the boom, the bust is where who pays is decided.  Often in history the powers that be change the subject with war.  And today we are looking at a whole lotta subject -changing.



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False Dilemmas

It does not matter that they are clearly lying, all that matters is we get a leader.

Republican National Convention - How does government build families?

Democratic National Convention - How do mandates bring better medicine?

Jonestown - How does socialism end well?

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Layoffs As More Prisoners Get More Work

The 13th Amendment of the United States Constitution:

AMENDMENT XIII

SECTION 1.

Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

SECTION 2.

Congress shall have power to enforce this article by appropriate legislation.

News on layoffs:

FPI has been around since the 1930s. It provides training, education and employment for inmates in federal custody. With more than 13,000 inmates, FPI operates in about 80 factories across the United States. The company is not allowed to sell its goods to the private sector -- and the law requires federal agencies to buy its products, even if they are not the cheapest.

It's the law.

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The West Philippine Sea

This is what the Philippine govt proposes to call what is on everyone else's map as the South China Sea.   China is in a dispute with Japan over the Sekaku Islands, AKA Diaoyu Islands.

The Spratlys and Paracels are back in the news.  That was a while ago, but the possibility of oil in those remote rocks is why over 50,000 Americans died in Vietnam, not to mention countless Vietnamese.

Just as USA conquered Hawaii, Guam, Truk, the Marianas, and so on along the ring of fire to protect USA interests and exploit resources, so China is now, or at least pushing USA back.  Renaming the South China Sea the West Philippine Sea has obvious implications, and the Chinese are not amused.

This could be worked out as a free-trade, gun-free zone, but the economic boom born of the explosion of usury has created malinvestment, overinvestment in the form of excess production capacity, and historically the solution is a war in which the excess production capacity is lain waste.

In WWII, most of the West did without butter, gasoline, new clothes, repairs, etc for a decade as the war ground on.  But almost no one on the winning side suffered like they did on the losing side.  In that time the economic landscape was reordered.  Forget about "survivalism" or WTSHTF, we are going to have a much more orderly, controlled destruction.  We also call them World Wars.

Small businesses will be critical in this environment, for their ability to quickly meet emergency needs, and best distribute what surplus may fall off the truck, from time to time.

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Hong Kong & Private International Law

It was seems a contradiction in terms, there is a legal term of art called Private International Law.  It has its own office for the International Tribunal at the Hague.  But guess where the office is?  Hong Kong, naturellement.

The term refers to which legal rules will apply when agreements are struck between private actors among diverse regimes.  I can't imagine anyone at the small business level availing themselves of this service, but there it is.  Of all the places in the world where peoples strike deals without state intervention, it must be Hong Kong.

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When Anarchy Ends

When the 100 year old experiment in pure anarchy came to an end in Hong Kong, it was because the Chinese Government ordered it ended.  About 33,000 people were paid about US$10,000 each to clear out.

It would be fascinating to interview those people who were living there and their views of the end of their world.  Here are more views of the place.

It begs the question:  do anarchists need a "place?"

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