Saturday, August 29, 2015

Managing Fisheries in Capitalism

Listening to the travails of pacific northwest fisheries folk, and the conflicts among the “stakeholders”, the sport fishermen were at once lamenting how hard they are hit by the decisions and how little in fact their “give-backs” help the overall problem.  Why don’t the big players give back more?

Well, this is capitalism.  There reason there are big players is that, under capitalism, through usury economic power is concentrated in ever fewer hands.  There may be many “stakeholders” at the table, but ultimately, any route you take to press your case, it is the monied folk who decide.  It may be a judge giving the ruling, or a committee, or a tribe, but finally, it is the money people who dictate.

Once the rivers ran silver with fish, and there was no shortage.  But we decided we needed to have cheap electricity to subsidize Boeing and crowd out any other good ideas in transportation.  Big dams, built with bonds, tax the locals, profits to the bankers. Usury facilitates this.

The Austrian School of Economics proposes a solution: just as there are more forests in the American Southeast than the Pacific Northwest, and as many lightening storms, the Southeast does not get the catastrophic forest fires for a simple difference: the Southeast forests are privately owned.  The Northwest forests are government owned.  Indeed, those Northwest fires all halt when they arrive at the privately owned fruit orchards.

So too the fisheries.  Just as we can plot out the coordinates on a stretch of land and assign its ownership to an individual, so to could we with a stretch of ocean.  “Get off my lawn” will never be heard, but trespassers would be known by radar.  Indeed, we are already there with international patrols of fisheries to keep poachers out of treaty seas.  In private hands expect fish to be protected just as trees and fruit are in private hands.

But the anarcho-capitalists tend to ignore the capitalist problem in their theory. In fact, those orchards are now all huge businesses, as are the forests in the Southeast.  The fisheries now are also in very few hands.  Either way, as long as the patterns and practices of capitalism are enforced as law, then we will have power concentrating in ever fewer hands, people no matter how brilliant still unable to get the policy right, even if they wanted to (and one assumes they don’t, just take it all now.)

No?  Then you tell me why we have expensive, poor food, vast unseen pollution, dwindling resources and compromised ecosystems?  Terrorists?  Wrong person as president?  Chinese currency games?

Once a family could be supported with a fishing boat and the fisheries were aplenty.  Then came the easy credit which allowed those who borrowed first and most the ability to buy up the means of production and swamped the smaller players with subsidized scale and in time prohibitive regulations, regs the small players could not comply with cost-effectively.  Get big or get out, as the Feds say.

Just as the “roll-up” (the capitalists word for it) of the local pet shop, gas station, stationery store, pharmacy, doctors office, grocery, hardware store ad infinitem was capitalized into Petco, Office Depot, CVS, HMO, Safeway, Lowes... so was fisheries and farming.  Now we have farmed fish and GMO corn, both deleterious to our bodies, economy and ecology.  

Fighting back is hard to do, but it starts with neither giving nor taking interest (usury), but starting your own business.  And as a part of that business, extend asset-backed no interest credit to your customers.  Much better than going to war for the capitalists, as is required from time to time (by capitalism).

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Friday, August 28, 2015

Not Usury, Just Predatory

Do they have a choice?
Fingerhut.com targets low-income consumers with damaged credit to sell them extremely high-cost electronics and household goods, the complaint alleges. Items sold on Fingerhut to low-income consumers come with substantial markups. For example, Fingerhut currently sells an iPad Mini 3 for $539.99, although its retail price is $399. According to the complaint, this massive sales price markup is actually a finance charge in disguise—violating the Truth in Lending Act, state consumer protection statutes and state usury laws.
Anyone overpaying for an iPad surely knows a better deal can be had at an Apple store, but the customer in this instance is weak, and is being exploited.  Just like when people sign up for Romney?Obamacare. No law can be written to keep the weak out of the clutches of the exploiters.

This is a job for the preacher man, not for the legislature.  I know personally how hard it is, even if you want to and do so and voluntarily want to eschew finance and exploitation, both sides, of usury.  Getting escape velocity is extremely hard.

Write a rule against this, and the two will be back at it in another form soon enough.  It is a matter of personal commitment, not legislative action.

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Thursday, August 27, 2015

Trade Shows: IBM v Start-up

This fellow is ex-IBM sales, once the model for all serious sales professionals, indeed, Ross Perot was an ex-IBM top performer.  So when he talks of trade lead management, time to listen, here is his summary:
Here’s a paraphrasing of the 5 best practices:
  • Follow-up FAST
  • Focus on the most promising prospects
  • Do your homework before qualifying
  • Don’t rush the buyer
  • Squeeze more out of each show’s list

Now this is all good stuff if you are selling the known standard, the IBM computer.  We are not selling that, we are selling a market test, initially, of a new item.  So the differences are:

There will be no follow-up, sell on the spot or if not, find out why not.  (You can save the "no's" for later to make a sales approach again later IF you change your offer to respond to valid and reliable objections.  So any follow up will be delayed by design.

Everyone at the show should be buying, and the focus is on those who either place and order or offer reasons why not.  At the show you are quickly working through prospects to get feedback.  All encounters should be brief and focussed.

Do your homework on the buyer only after they reorder.

Rush the buyer.  "I came here to sell, why did you come to the trade show?"  They either place the order they need, or if not, why not?

The "yes, but no reorder" and "no's" can be reworked, but only if and when their collective response offers valid and reliable science upon which you might base change.

Passion gets you oriented, joy gets you going, and science gets you accomplishment.

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USA/Australia Trade for China

Stockman makes an interesting point on China/USA trade:

With respect to its non sequitir that China accounts for only 1% of US exports would it not occur to a reasonably alert observer that Caterpillar did not export its giant mining equipment to China; it went there indirectly by way of Australia’s booming iron ore provinces.
Likewise, the US did not export oil to China, but China’s vast, credit-inflated demand on the world market did artificially lift oil prices above $100 per barrel, thereby touching off the US shale boom that is now crashing in Texas, North Dakota, Oklahoma and three other states. And is it not the fact that every net new job created in the US since 2008 is actually in these same six shale states?
Similarly,  US exports to Europe have tripled to nearly $1 trillion annually since 1998, while European exports to China have more than quintupled. Might there possibly be some linkages?

Read the whole story to understand why deflation is inevitable.

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Tuesday, August 25, 2015

Damage Done By Interest Rates

For all the talk of economic chaos, all are agreed that the interest rate is a key factor, if not the key factor, causing the problem.  There is no debate as to whether it has an effect, only two sides to the debate:

1. How to set it "right" so policy makers get the desired results (specifically, if not explicitly, the right people benefit).  Within this group is the debate as to what is the right right.

2.  The other side is that the state should not be in the business of setting and manipulating interest rates, it should be a free market matter.

(My argument is interest should be like gambling debts, never enforceable in any way).

Now, from the capitalist side is a good litany of harms done by government manipulated interest rates:
  • Conservative investors by nature come under increasing pressure with respect to their investments and take on excessive risks in light of the prospect that interest rates will remain low in the long term. This leads to capital misallocation and the emergence of bubbles.
  • The sweet poison of low interest rates leads to massive asset price inflation (stocks, bonds, works of art, real estate).
  • Structurally too low interest rates in industrialized nations due to carry trades lead to the emergence of asset price bubbles and contagion effects in emerging markets.
  • Changes in human behavior patterns occur, due to continually declining purchasing power. While thrift is increasingly mutating into a relic of the past, taking on debt comes to be seen as rational.
  • As a result of the structurally too low level of interest rates, a “culture of instant gratification” is created, which is among other things characterized by the fact that consumption is financed with credit instead of savings. The formation of wealth becomes steadily more difficult.
  • The medium of exchange and unit of account function of money increases in importance, while its role as a store of value declines.
  • Incentives for fiscal discipline decline.
  • Zombie banks are created: Low interest rates prevent the healthy process of creative destruction. Banks are enabled to roll over potentially non-performing loans practically indefinitely and can thus lower their write-off requirements.
  • Newly created money is neither uniformly nor simultaneously distributed amongst the population. This results in a permanent transfer of wealth from later receivers to earlier receivers of newly created money.
  • But those are exactly the problems of all interest rates!  The only difference is which schmucks get nailed and how bad.

    It surprises me how people can well perceive the damage done, but limit the criticisms only to those whose participation is with a certain narrow range of damage done.  All usury causes damage, as described, more or less.

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    Monday, August 24, 2015

    Do You Have an Export Program?


    On Aug 24, 2015, at 8:59 AM, LN wrote:

    John,

    Before we reach out to suppliers by letter, would you recommend we call first and ask about an export program? Or always send a letter first? I just picked up some nice stationery and envelopes...

    Cheers

    LN

    Hey LN,

    I suppose you could cold-call and ask if they have an export program and learn what it is, especially if you have five potential suppliers and want to approach the one with no interest themselves in export.  But never ask the question in your introductory letter.

    At farmers' markets if I see something I like, I always ask first "do you have an export program?' and usually no, but when yes, it is usually very interesting information.

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    Start-up Trade Show Advice

    Finally a trade show advice article that is spot on!  I'll expand on two points:

    “The main trick is to be able to judge body language and to listen,” Kate stresses. “If a customer says no verbally, or their body language says no, then thank them for their time and move on to the next potential customer or client.”

    No to what?  The sales process is approach, qualification, agreement on need...  body language is fine, but you can elicit specific responses to find out if this is a buyer (ready willing and able) and if not, get rid of them.  If so, then they either place the order, or if not, for what valid reason?  Anything less than this is a waste.
    To get the most out of your time at trade shows, always set targets that you and your staff can work towards, whether that’s data collection, PR, sales, or sampling targets.
    The point of a trade show is trade, sales.  Your targets should be sales, and if not why not.  Sales and market feedback.

    Incentivize the press?
    “We offered VIPs and press members free spa treatments and VIP goody bags at the show. If your company does not have physical products to give to VIPs, you could always consider buying in gifts from third parties that fit with your brand,” Kate recommends. “For example, if you are a travel agent you could put together a beach bag gift with travel essentials in it, like a branded beach ball and sun cream.”
    Write a half dozen articles, unsigned, about your company and line.  The news is your LCL MOQ FOB.  Put a $50 bill in the envelope with the article.  Hand the 9x12 envelope to the writer visiting your booth and say there is another one of these if this gets published.

    The writer will figure it out, put his name on your article, and you get invaluable press for $100.

    Who wants swag? People need money.  Writers aren't paid much at all.

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    Sunday, August 23, 2015

    Checklist for Business Start-up

    By definition, the USA is a political entity in which the state and business is one, the word is fascism, after the Roman symbol of the fasces, a bundle of sticks around an ax.  This symbol graces both sides of the deis in Congress and is prominent as the president offers the State of the Union Address.

    In spite of the fascism, there are rogue self-dealers, working within the system to advance their own entrepreneurial thing, making things happen without congressional oversight.
    Earlier this year, FDIC chairman Martin Gruenberg told Congress that Choke Point was over, but many business owners believe the FDIC and DOJ has passed enforcement duties along to a newly created independent agency: the Consumer Financial Protection Bureau (CFPB), the brainchild of progressive senator Elizabeth Warren (D-Mass.). The CFPB operates under the guidance of the Federal Reserve and doesn't rely on Congress for funding, which critics say allow it to operate without any meaningful checks on its power. 
    Banking in USA is no more banking than medicine is medicine.  Both are redefined by government into something meaningless.  And like medicine, starting up your own business, you must come up with alternatives to what government sanction offers.

    So on your business checklist, is "start a bank."  Of course, first you have to define what is money, what is credit, and then what benefits the bank should bestow.  You'd have to shed all received learning about the work bank, start over with a definition from about 100 AD (or 700 AD for an Islamic definition) and then start up.  You'd be so far from what banking is, I doubt any regulators would be able to discern a mission.

    The Swiss came up with the WIR.  That is along the lines of what I mean.

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