Since No One Went To Prison For NAFTA, Now TPP

NAFTA is a massive bipartisan fraud on the citizens of North America, which has directly precipitated civil war, and since it has gone unprosecuted, the usual suspects are back at it:

“It is incomprehensible to me that leaders of major corporate interests who stand to gain enormous financial benefits from this agreement are actively involved in the writing of the TPP, while at the same time, the elected officials of this country, representing the American people, have little or no knowledge of what’s in it,” wrote U.S. Sen. Bernie Sanders, I-Vt., in a letter to Froman earlier this month. 

O come on Bernie, you know how the game is played.  We set up rules and regulations and policies that benefit big government/big business, then call it free trade.

Expect more poverty and war of this passes.

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Money Community Economies and Credit

An acquaintance of mine, at 92, still lives a throwback lifestyle.  Sharp as a tack.  A recent visit to a doctor had her prescription sent to "the corner pharmacy" which delivered it early that evening.  They added the charge to her bill, which she settles up at the end of the month.

(She found surimi in and among her shrimp in a salad and her notice of it has led to this particular store banning all surimi in all instances.  "Surimi is not shrimp."  "Yes, ma'am." The last dozen visits has been the occasion of a dozen reminders.  Truth in advertising is maintained by a 92 year old.)

Now think about that, and compare it to your doctor visit.  Do you argue with the doctors, and make them back up their diagnosis with science?  If a prescription is needed, is that information communicated to your corner pharmacy which in turns delivers it to you home, and then bills you?  And you pay up at the end of the month?

No, if you are typical, someone you don't know says things about you quickly and leaves you not sure about your condition, or at best hopeful.  Then you have to make time to stand in line somewhere to get  your prescription filled, or try to save money by going to Walmart or Costco or some place.  And here again, someone who does not know you is filling that prescription.

Her pharmacist knows her personally, and will advise her even more fully than the doctor.  Her pharmacist exists still, one of those gift-shop in the front, pills in the back shops, that were in every neighborhood in my youth, largely because they are a "compounding pharmacy."  Pharmacists are free to make any drug they want, and compounding pharmacists do so from scratch when needed.

Most doctors are getting a cut of the prescription action, one way or another, from big pharm, and most pharmacists are simply filling that prescription.  Ka-ching!  But if pressed, doctors can change the formula, and compounding pharmacists can make that up.  And do.  And 50 years ago, this was true of almost all pharmacists.

What changed is banks learned they could lend asset-less backed credit to any and all. With this credit with no rational limits, they needed to find a market for it.  Consumers!

My twenties I regularly received credit cards, loaded with credit, ready to use, unsolicited in the mail.  I believe by 1980 I had some fifty credit cards of various styles.  At the time airlines had their own internal systems, but eventually they found they could switch to United Air Lines Visa, dump their operations, and make more money brokering visa than running their own.

All of this allowed concentration of credit-extension farther and farther away form the transaction, the community, with more and more centralization of transaction, and the ability of the hegemon to peek in on who was spending what with more and more specificity.  Taxing became easier.  Match this massive data flow with computers, and the Center could more and more spot trends and predict outcomes ever further from the transaction.  FICO thrived.  Get big or get out was actualized.  Safeway for food, Gap for clothes, Ikea for furniture, CVS/romneycare for medicine, NFL for entertainment, Fox for info, Ferguson for law enforcement, 9-11 for defense, Comcast for utilities, ad nauseum. The more the centralization the further from accountability to the customer.

Two generations believe their fundamental relationship in the economy is with a bank, instead of the stores one patronizes, and your status is determined by a credit score.  You pay interest depending on your credit score.

Dave Ramsey is anti-debt, and has become a multi-millionaire out of bankruptcy preaching anti-usury, yet he has to give into his audience wanting to buy a home on credit.  So if people take his advice on the one hand and get rid of credit card debt, then they run into a problem on the other, no credit score to get a loan.  Such are called the unscorable.

One of the side effects—or side benefits—of becoming and living debt free is that you eventually fall off the FICO radar. You become one of the 64 million “unscorable” consumers who haven’t had an active credit account for at least six months and therefore can’t qualify for a mortgage with many lenders.

Distraught at losing some potential usury slaves, the bankers come up with a solution.

The unscorable group has grown large enough that it’s getting attention with Experian, Equifax and TransUnion, the three credit bureaus FICO uses to determine its scores. They have developed the VantageScore model that looks at 24 months of credit history instead of six months. It also includes rent and utility payments—even public records when they’re available.

What is happening... they are going local for the credit info...  decentralized.

In another place Ramsey notes (and even big banks will do this) a practice called a manual mortgage, in which they study your circumstances based on local experience.  he may not know this, but in banks it is called a "portfolio loan."  That is to say, the bank is keeping the risk on the books, instead of acting as a broker and passing the loan risk off to taxpayers via Fannie and Freddie (which just last week again lowered their standards to restart the housing bubble - as I said, there is no rational limit to lending asset-less backed credit) and keeping the profits, the banks can do what all banks in all instances did 40 years ago, and ran the risk and kept the profits.  Mortgage bankers knew every customer personally.  Not any more.

But to capture the growing group of independent, the usury-free, the banks must return to old practices. But personalization costs more, so will their cheap credit still be so cheap?  Will the cost of duplicating what is already known locally about a customer overwhelm the advantage of EZ cheap credit centrally provisioned?

EZ credit at inexpensive interest allows more people to consume than no-interest credit allows.  The pharmacist is not going to extend credit to someone he knows cannot pay.  There is a pitch-perfect justice in someone who is profligate has that very profligacy checked by the community in which he lives.  The community is strengthened by curbing profligacy.  Interest free credit builds communities.

With EZ credit at low interest, people tend toward eternal debt.  But also deadbeats spend prodigious amounts before they are destitute and cut off.  Their selection of goods and services are items that please deadbeats, and this market is so large, whole factories and industries grow up to serve this mal-investment.  And once cut off, why, does EZ credit stop?  Not at all, they are issued an EBT card in which credit is extended to them with no requirements whatsoever.  By failing to meet commitments at usury, they are returned to no usury loans, but there is no community to curb their profligacy.

A downward spiral.  Cheap EZ credit destroys communities.

Kentucky Fried Chicken, drug dealers and McDonalds rejoice.  The pendulum may be swinging back, since Mickey D saw a 30% cut in profits last quarter since their highly subsidized food is so nasty.  McDonalds will try to turn things around by... wait for it... tailoring their menu to local tastes.  But if they do, how do they take advantage of the EZ credit subsidized ingredients that makes their model profitable?  If they need not buy a billion pounds of reprocessed potato starch to supply the exact same french fries to all locations, and buy a 50 pound sack here, and a 50 pound sack there, how will they compete with a local burger joint whose tiny market for fresh fries is ten times the volume of any one given Micky D unit?  Micky D can't have it both ways, mass volume purchase and localized product. If the EZ cheap credit is not advantageous for what one can do with it, for size no longer delivers what enough customers want, then there is for the corporate welfare queen a downward spiral.  Just like the EBT set.  Cheap EZ credit ruins economies.

One quarter a trend does not make, but it is worth watching.

But with all these movements toward local I think the pendulum is swinging back.  People are sick of getting sick from what they eat.

So as you start a business, recall what once was: extractors fronting processors at no-interest credit, processors fronting manufacturers at no interest credit, manufacturers fronting distributors and retailers at no interest, and retailers fronting Larry Lunchbucket at no interest until the end of the month, when the bills were settled up.  Larry's $100 got passed back from the retailer, 60 to the distributor, 40 to manufacturer, 10 to processor and 5 to extractor.  No banks involved, no interest involved.  Now every step is run through the banks because their credit is EZ and the cost seems ot be cheaper than maintaining your own credit monitoring in house.

And indeed, those small businesses could not compete against EZ credit at low cost to consumer vs credit monitoring of the market at no cost to the consumer.  But, in a mere forth years, the goods and services called forth by the putative winners of this regime, corporate and private welfare, no longer match the needs.  With no real feedback loop except "cheaper" what range of goods and services narrowed over time and through malinvestment and misallocation no longer meet consumer demand to the degree that the economy is stagnant, and six years in has shown no improvement.  This is scary to those picked as winner in this regime.

And those who realize what is up look to gold as a hedge.  Very good.  In times of economic distress, gold is king, it is money that will extinguish debts, and call forth goods and services when no one will extend credit (and no one will accept currency as money, since it clearly is not money.)

But, gold and silver, as money, is a medium of exchange.  Holding on to it to get to the point where the economy is healed and businesses are again extending credit within their communities is a rational plan. But if things get to that point, you'll have bigger problems than if gold will buy things.

Instead of hedging future fears by hoarding medium of exchange, why not invest that money is a business now, in which you extend credit to your customers, the worthy ones, like the pharmacy down the street, and maybe front-run the pendulum which very well may be swinging back, and find you are not a part of the problem, but part of the solution.

Dump the banks and the EZ cheap credit, and square and etc... build a solid customer-based business, not one based on EZ cheap credit.  Be a part of the real economy, not the false economy.

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How Obama Is Right On Business Success

What a strange controversy over Obama's comments.  AS is usually the case, the more controversial, the more he is right.

First off, we do have a tightly managed economy, which is why it is in such a mess.  It is no secret that the powers that be through taxes and regulations and subsidies picks winners and losers.  How does anyone think Solyndra managed to burn through billions?  Or Washington Mutual?  Or Google?

Here is Peggy Noonan mocking Obama:

"How about that Michael Phelps? But let's remember he didn't win all those medals, someone else did. After all, he and I swam in public pools, built by state employees using tax dollars. He got training from the USOC, and ate food grown by the Department of Agriculture. He should play fair and share his medals with people like me, who can barely keep my head above water, let alone swim."

Well, Peggy,  Phelps does get lots of help because those facilities he trains in cost a lot, and the prizes  he can win are huge, but not available universally.  Taxpayers foot the bill for community pools, Phelps takes home hundreds of millions in endorsements. Notice the Olympics, if the training is capital intensive, USA and the west tend to dominate.  If it is not capital intensive, lesser countries dominate.

How come azerbaijan dominates judo?  But not swimming.

There is an anaology to USA's wars:  if we go against high tech wars we do well.  But if it is actually fighting against foot soldiers we lose.  See Vietnam and Afghanistan.

Our economy is producing a deficit.  That means we are all necessarily losing money.  If you are actually turning a profit, it is because you are being subsidized somehow.  This website costs me nothing, but it costs someone something, somewhere.

When I sell a book, I ship it media rate, which is subsidized, so you pay some of my customers costs.  When I teach a class, taxpayers are footing the bill for the school infrastructure that I get at far below cost to the taxpayers.  You bet my "success" is based on others.

Obama was fed that line about "you didn't build it" by his handlers after it was used by a senatorial candidate, Elizabeth Warren.  It was a loser for her.  So why have Obama use it afterwards?  Why introduce 'class warfare' now, except to put Obama further back.

And note Romney just failed overseas, and he'll be running against Hillary, who has been working overseas the last four years.

One reason to have Obama speak these lines is because when the next president introduces a 90% tax it will be implemented based on the premise "you didn't earn it."  Obama is just taking the heat for what will come anyway.  But not to worry.  A 90% tax rate will hurt employees and landlords.  Bring in lots of money.  Employers don't care how much tax employees pay.  And the self-employed will not pay those taxes, since federal taxes are voluntary.  We'll see a boom in small business activity and hiring is there is a 90% tax, so bring it on, it is better than nothing, and it will pay down the debt.  Or not.  it could.

But this misses the point.  No taxes would be necessary in a free market.  All of those Government services would be provisioned better cheaper.  Yes, you subsidize my shipping of books, but if there was no post office the freight would be much lower because it does not cost as much as the post office charges to deliver goods.  Schools paid too much for too much so when you subsidize my on campus activity, you are paying for overhead that was never necessary to begin with.

The government merely arrogates unto itself at a very high cost, and putting the taxpayers on the hook, for all and sundry things.  The state had much to do with the creation of the internet as we know it, and what a mess that is. 92% of traffic is spam, porn is force fed to 14 year old boys to the detriment of girls for generations, at a very high cost even if we pay nothing.  Someone is paying.

In a free market the internet would be everyone bouncing messages off of any one of the millions of meteors coming at us each minute, with computer controlled probablity making communication impossible to snoop.  Anyone can do it.  Step one: get a FCC radio operators permit.  How come?  Literally the sky is the limit for this cheap and plentiful message distribution system.  But you see, the state has hijacked it.  Only they can use it.  You see, the powers that be cannot possibly track who is saying what when your computer predicts the next thousand meteors and catches one to send your message. No way to snoop on that.

If you use this safe, secure, costless unlimited means to send messages without permission, expect drones.

Sure Michael Phelps and Bill Gates never built anything others did not pay for.  That is not the question.  The question is how come so many people are forbidden to contribute to society?

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American Jews & Foreign Aid

One thing I did learn at a University of Washington colloquy last night on American Jews and foreign aid was the USA has agreed to get nonmilitary foreign aid up to .07 % of our budget, and ten years after this treaty we are at less than .02%  The speaker gave examples of what we already know, that is foreign aid is usually harmful, if not counterproductive.  Nonetheless, we were criticized for not being at the full funding.  Ahem, if we do poorly at less than .02%, we are going to do better with 3.5 times the money?

To be fair, the speakers advised a better way of getting the money where it can do good.  They compared 50 years ago with today, and found things worse.  Yes, we know that.  Every decade or so we are treated to an admission of failure, and then an explanation of how it can be done right.  In a decade we'll be hearing criticism of the present efforts, which will fail too.  Sometimes results reveal intentions.

Not that they do not have their facts straight.  The people of these benighted lands are not stupid.  The problem is they are so beset with debt, compliments of leaders who agree to whimsical projects which cannot pay off and cannot be paid off, that the governments are essentially kleptocracies, tributary satrapies.  And should you make any money in a kleptocracy, the government is designed to steal it.  Why make anything nice if it will only be stolen.  Vast swathes of USA citizens will spend the next 30 year at least, possibly 200, pondering precisely this question.  (Regarding your money in MFGlobal, we'll get back to you in six months. It's complicated.)

The speakers noted we flood a country with "free food" which ruins the local farmers.  The farmers are reduced to native handicrafts and textiles to live.  We forbid the importation of their native handicrafts and textiles to the USA.  We are not nice.

One speaker noted just how tricky it is to get charity right, a theme I have been arguing for a while.  Where matters are balanced, and benefit to one necessarily disadvantages the other, relatively speaking.  Only free trade offers equal opportunity, and growth without distortion and imbalance.

You can easily observe what USA does overseas by watching what our government does here.  Look at all the people trapped for life in student loans or home loans.  Look at small farmers run out of business as big farmers get subsidies.  Look at "free" medicines loaded with lifetime disabilities.

One conversant shared that her people in Haiti reported that Haitians don't want shelter or food or public transport, they want jobs.  Sigh, any third rate merchant can tell you that.  Why are there not jobs?  Because there is no freedom.  If you make anything nice in Haiti, it will be stolen by the kleptocrats.  If you try to make change, you will be crushed by the USA-backed powers that be. Sic Semper Tyrannis.

Signs of hope are reported: USAID is now funneling more money through organizations, such as the speakers on the stage.  Here again, the NGOs admit the failure, and say, more government, and just better oversight and just get the right people....  Nonsense.  No matter what configuration we see, he who pays the piper calls the tune.  The new arrangements will fail as badly as the old.

In communism you are so directed that you'll never produce anything good.  In capitalism you are free to initiate but you are so regulated that whatever you make is forfeit to the state. (Regarding your money in MFGlobal, we'll get back to you in six months. It's complicated.) Those who benefit from this system emphasize the 'free" in that last sentence, and ignore the rest.  Those who benefit from the system think you should be killed if you disagree.  The president has a list of people he can kill without any warning or warrant.

Now that seems rash to say, but pause and reflect on the harshness of a regime that has a list of citizens, for whatever reason, it can kill without warning or warrant, extrajudicially.  Note the killings have started, and our system has not, perhaps it cannot, protect USA citizens before the murders start. If congress and the courts cannot or will not respond to the executive murdering citizens at will, then the system has irretrievably failed.  That Obama has not been impeached for this crime, and then tried for murder is a victory for those who manage the comic-book narrative USA citizens consume. Seven of eight Republican candidates want more of the same, and more.  If the democrats claim they will end it, remember Obama's promises to do so, which got him elected.  Waiting...!

Like the Reformation, the bloody conflicts around the world are over turf, and revenue, not religion.  Semites, Jew and Arab alike, have long contended over their lands.  USA exploits that.  We foment and exploit the map we were handed in victory after WWII.  Now vast swathes of humanity want a better way.  The British beat the French, Spanish and Germans (who wants what Russia has....?) in the empire game because they, relatively speaking, shared power and wealth with those they colonized.  With USA as the exception, usually this meant negotiated independence eventually.

China has on offer to the world a better deal than the USA.  The Chinese seem to have learned from their erstwhile overlords it's better to share than to take it all.  Growing economies are more stable than deteriorating economies. Where China shows up there is a new railroad and jobs, with China sharing the risk on investments and the locals sharing the wealth.  Whereas the USA's top three puppets in the last decade have been hanged, gunned down and raped and beaten to death in that order.  Lemme see, railroad or atrocity, railroad or atrocity....  hmmm... inquiring minds world wide ponder the options.

The Arabs may have more than one wife, and they have married both USA and China.  Israel is married to the USA, something at which the world wonders.  People believe it is a matter of Jewish influence on USA politics.  Step back, way back.  Look... on balance does it not seem far more likely it is USA politics directing Israel?

Over a thousand years ago the Jews thrived under Moslems while China was resplendent in its Golden Age of the Tang Dynasty.  Then the barbarians showed up, looking for real estate and loot in the name of Christianity.

The innovation of the United States was an attempt to get it right.  We were doing quite well, but sadly we got off track.  It is no longer working.  Perhaps we can arrive at a restoration of USA freedom.  Our first task is to withdraw our forces, both arms and aid, from the world.  People worry what evils will fill the vacuum of American withdrawal.  Well, it truly cannot get worse.  In any event, it is the problem of people newly free to sort out their freedom.  We did it. And they are all as smart as we are.

After we return home, what experience the people of the world have with USA be in the form of small businesses who come to trade, on mutually beneficial terms, not looking down the barrel of a gun.  Not isolationism, but free trade.  And there is no bar to individuals still offering aid, not that people who trade freely need aid.  Free markets never need bailing out.

I was likely the only Christian in a room of some 200 Jews. The event was uninteresting.  No new ideas.  No challenging thoughts or propositions. That was a first for me, as I have always had at least three opinions on a topic even if there are only two Jewish discussants. Last night was total agreement on status quo. Judaism cannot survive sterility.  It seems to me it is time for Israel to divorce the USA and marry China.  Its security depends on it, better to be allied with a power that constrains Iran in friendship than one which provokes Iran in enmity.

In the USA, Israel's best friends are politicians and Christians whose support is directly linked to a belief in a heresy that claims death is avoided and heaven awaits for those who endure an event in which 2/3rds of the Jews are destroyed.  Nice friends, they. These are not the brightest segments of our society, and they get mean if disappointed. Anti-Jewish sentiment is hard to gauge, which makes it all the more dangerous.

China has no such emotional engagement with Israel or Jews, for the Chinese can match the Jews in length and breadth and depth of experience and culture, and for that matter cosmology.  Israel does not capture the Chinese imagination as it does the Christian's, which is a much safer relationship.  And the Chinese aid on offer comports more closely with the Bible than USA aid on offer.  The Chinese sense of social justice is something the Jews would exercise far more amenably under Chinese hegemony than USA hegemony.

This is not to say the Chinese cannot be every bit as wicked as the USA, it is just to say look at the results.  USA need not be wicked at all, and we are better suited to lead by example rather than leash and whip.  Our democracy permits too few people to arrogate power unto themselves. (Regarding your money in MFGlobal, we'll get back to you in six months. It's complicated.)

The USA needs to work out some internal contradictions.  The world can go on nicely without our tutelage.  Time for USA to come home.

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Government by Campaign

In Communist China, Mao ruled by Campaign.

The Counterrevolutionaries Campaign (1950)

The Three Antis and Five Antis campaign (1951-1952)

Campaign against hidden revolutionaries (1955)

The Anti-rightist campaign

The Great Leap Forward (1958).

Mao came up with "more, better cheaper faster" as a part of one of these campaigns.  I had arrived at it independently observing how free markets work, and was astonished to see Mao had asked for it in Communism.  Just think, if the free marketers had gotten to Mao before the communists, how the history of China may have been different!

The greatest of the campaigns, or worst was the GPCR.


The USA has become a government by campaign.  It started with the depression, and government "doing something."  They did it.  Then there was WWII, then the campaign against communism, then the war on poverty, then the war on drugs and so on.  


We have small  campaigns too, which are the object of great abuse, such as Sanofor's war on cholestorol.


Crowds and campaign sweep people up to do things they normally would not do.  Herd mentality takes over.  Great good can be achieved without these campaigns, but we need to understand that good comes slowly but surely.


As the song says "Battle lines are being drawn..."  Don't join.  Seldom affirm.  Never deny.  Always differentiate.  Think it through.  Campaigns are fun, but the damage is done dring the fun part.  The housing bust is the unfun part of the fun campaign for "home ownership for everyone."

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Secret Medical Experiments

Government officials were exposed running criminal experiments on unwitting subjects in the USA and overseas.  So guidelines were introduced.  At the end of all of the pretty guidelines, exceptions are noted:

(i) Unless otherwise required by law, department or agency heads may waive the applicability of some or all of the provisions of this policy to specific research activities or classes or research activities otherwise covered by this policy. Except when otherwise required by statute or Executive Order, the department or agency head shall forward advance notices of these actions to the Office for Human Research Protections, Department of Health and Human Services (HHS), or any successor office, and shall also publish them in the FEDERAL REGISTER or in such other manner as provided in Department or Agency procedures.¹


So At any point any medical experiments on unwitting subjects such as the poor, or the poor soldiers, it can be done as long as it is noted in the Federal Register.  For all the world to see.  Unless it is done in secret, by rule or executive order.  Then no one knows.

The president can make a secret list of people he wants killed.  He can run secret medical eperiments on people, without them knowing.  Do we want this for USA?

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We Are All Immigrants Now

If you woke up in USA today, you may well believe you woke up in a foreign country, on your own, with nothing.  You left America, the land of the free and home of the brave, for a country where freedoms are much constricted,  you are much spied upon, the people are timorous and the economy has failed.  Look at your property, paycheck and pension, and imagine you left that behind, because it is as good as gone in USA today.  So what would you do?

You'd probably act like an immigrant.  You'll think "I have brains, hands, feet and I am good at (fill in the blank.)"  Say you are a good mechanic, then you'll find the best empty garage for the least money and cut a deal for part of your income in cash for rent.  You'll barter heavily, and save.  Or if you an cook, you'll make a restaurant where no one considered it before, and get folding tables and chairs from GoodWill to seat people.  You'll build from their, one bowl of pho, one taco plate at a time, and work your way up.

The whole time you are teaching your kids a valuable lesson, work hard, play fair, get ahead.  These parents know their kids will stand on their shoulders, and do better.  These kids mean old-age security and joy, when they become doctors and lawyers or better yet, businesspeople themselves.

Now, there is one more part of being an immigrant that may militate against you, since in fact you are an American.  Every single USA citizen is on welfare, of one sort or another. For example, I ship books at  the media rate, a 50% discount subsidized by taxpayers, for an organization, the USPS, that just announced it will shut down in November without billions in bail out money.  Most Americans look down on welfare, when in fact it is well woven into their lives, and lifestyle.  Roads, banks, government services, food, housing, clothing... all deeply reliant (and therefore misallocated) on welfare programs.  USA citizens may blanche at taking welfare, whereas an immigrant does not.  Every single USA citizen directly receives welfare from some source, whether they realize or not.  No one is ever dependent on welfare, we merely get used to it. If it went away, we'd adjust.

Let me broadly outline a cross-current.  In spite of being heavily welfare insinuated, yet disapproving of welfare, a US citizen's reputation is harmed if he is on welfare.  To his peers, something is wrong.  For an immigrant, there is no such harm to reputation among his peers.  An immigrant has not been socially conditioned against welfare, and his peers would hardly take a dim view on getting a helping hand.

A welfare-fraud investigator once told me "everyone on welfare is cheating, because no one can live on welfare.  It is just not enough."  Another one gave me a date and time to come to his ffice and sit in the parking lot, and observe the BMWs Mercedes Escalades driven by sharp dressed people, who come in for welfare.

The problem with my thought-experiment, that you woke up as an immigrant, is it does not address the social conditioning of our  conceit that we "play by the rules (generally)" ethic.  As a practical matter, being charged with welfare fraud does more damage on our psyche and emotions than it would on a immigrant, who is struggling to find his way anyway.  Prosecuting immigrants is an awful lot of work and expense, what with translators and little if any recovery.  Prosecuting a citizen carries no such costs, and the citizen can have certain future benefits, income, etc mulcted more easily.  With one's reputation on the line, a prosecutor can squeeze a lot for little effort.

Along with welfare fraud, which is minimal in the big picture anyway, is there is non-enforcement of rules and regs when it comes to immigrant businesses.  Now I have nothing to support this except I know the rules and regs, I see violations rampant where I would be shut down.  Now I am not complaining here, I very much believe anyone who is allowed to ignore pointless rules and regs, who is given a pass on taxes, should take it and exploit the advantage. Doesn't WalMart & Google do as much?  The result is the businesses offer better prices and standard quality, and I am glad to give them my business.

I noted this in Hong Kong, where Hong Kong managers who open factories in China are at a disadvantage to Chinese factory owners who open offices in Hong Kong.  The Hong Kong business people, constrained by reputation and with more to lose, have a hard time against business people whose reputation is outside of impact, and who have little to lose.  It is not to say good business cannot be done, it merely means it is harder.  they way to win in that case is charge a premium for superior management.

 I truly wish the powers that be extended such courtesies, not taxes and pointless rules and regs, to us all. Welfare could be eliminated if we did that, because there would be full employment, as in Hong Kong. 

 That would be freedom, and the powers that be attack us because they hate our freedom.

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So Get Self Employed

A friend of mine asked me last year what I would do in his case: He inherited about $100,000 in BofA stock at $24 a share, and then, a year ago it was about $12, so it was down to 1/2. I said sell it and put the money into gold. He did not. Now BofA is about $6, so he's lost 1/2 again, or 3/4s total. Had he sold the $50k BofA and bought gold, he today would have %75,000 worth in gold, instead of $25,000 in BofA. I bet BofA continues down and gold continues up. But who cares... what to do next?

I wrote a case study on importing, which is also a case study in making your own business teaching writing and consulting. You really can make $100,000 working off your kitchen table, but it will be the hardest money you ever earned. You can have the book for free, here.

If you can self-start, work very hard, you will be able to make money depending on no one else. Read the book, and tell me what you think.

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Conditioning, Section 8, Follow The Money

While blaming Obama is the latest scapegoating in a country founded by men who dressed up like Mohicans to perform the Boston Tea Party (blame it on the Indians) I am noting far more articles portraying blacks in disgraceful habit.  In this episode unruly blacks race to get Section 8 vouchers, a federal program that pays the difference between what rent is and what you can afford.

Because I am wealthy and well connected I pay about $400 a month for 2 bedroom in a garden spot with private access to Lake Washington.  That is the going rate in a free market, one in which connections matter.

Blacks in USA, as they begin to develop separate but equal circumstances, find their worlds destroyed. Compensating programs appear to benefit groups, in this case Blacks, but that would be misleading.   Section 8 is landlord welfare, wherein if a landlord is experiencing a 40% vacancy rate, he need not cut rent to fill his building, he merely gets fed vouchers to put poor people in at full rent, so 100% occupancy at the highest rent rate.  This means the people in the building are subsidizing, on top of taxpayers, the landlords profits.

Now Section 8 can also be used for blockbusting purposes.  Say there is an apartment building district, nice upscale, with one building for sale.  An enterprising landlord will buy the building and load it up with section 8 tenants.   As the neighborhood goes down, the landlord can buy up the other buildings cheap, and load them with section eight too.  There goes the neighborhood.

If you are about to rent, always ask if the building accepts section 8.   The landlord will not know if you are pro or con, and will likely tell you the truth.  (If he hangs up on you, call back, it is not section 8)  If it is a section 8 building, expect more disease (I was renting once in a building where they began accepting section 8, within 2 weeks a memo went out, please do not leave garbage in hallways, it attracts rats...) and crime, and you'll be paying more.  Avoid Section 8 buildings at all costs.

It is not unique to Blacks that agitating leaders are bought of and the masses behind them continue to languish.  In USA as Pat Buchanan notes:

Though 10 percent of the U.S. civilian labor force, African-Americans are 18 percent of U.S. government workers. They are 25 percent of the employees at Treasury and Veterans Affairs, 31 percent of the State Department, 37 percent of Department of Education employees and 38 percent of Housing and Urban Development. They are 42 percent of the Equal Employment Opportunity Commission and Pension Benefit Guaranty Corp., 55 percent of the employees at the Government Printing Office and 82 percent at the Court Services and Offender Supervision Agency....that 44 percent of Fannie employees and 50 percent of Freddie's were persons of color.

Every government needs its despised class, India the Dalit, Japan the Ainu, China the Hakka (among others), communism the Kulak, and capitalism has the Blacks.  And in every system they buy off the agitators.

There is nothing said about blacks today that was not said about the Irish a century ago.  O! But there is a difference: skin color!  Then you do not know how easy it is to spot an Irishman, if you are looking, and how socially conditioned the elite were to recoil in their presence, just as we are socially conditioned regarding Blacks today.

When a people allow power, sought and unsought, to aggregate in the hands of a few, those suffering from libido dominandi will strive to positions of leadership, and then exercise their terrible power.  I know a cop whose stated reason for joining the force was to hammer blacks.

Although I regret the unfairness and indecency shown Blacks in USA, it is no problem of mine.  I am sure there is even grace behind their suffering. Louis Farrakhan has demonstrated Blacks can live a separate but equal life in America, like the Amish, and what problem they have they can work on, like the Irish.  But that is no solution, because I am still denied the benefit of competing with blacks in business.

(There is a wonderful film clip, I watched the original, circa 1964, American Bandstand, where the Rolling Stones followed James Brown.  Mick Jagger stared offstage at James Brown, trying to mimic Brown's moves.  Jagger's trademark spastic moves are compliments of Brown's dynamism.)

We ought not be limited to competing with blacks in showmanship, imagine the benefit if blacks were allowed in architecture, science, medicine and so on!

I would note that the Black elite makes much of the N word, to the extent that using the word "niggardly" can cost you your job (one of the few words to come to English from Swedish.)  Reflect that the really damaging word is "black" as though there is such a thing.  Black implies a homogeneity, a group of people similar enough to have necessary leaders. No such group exists, any more than "white." We are all unique, and no leader can represent us in any way.  Of course no "black," then no black leaders.  Like all people forming groups and demanding a leader, the leaders get bought off and the followers are targeted.

Of course, in a free market there are no leaders, just commercial transactions... the colors that matter are gold and silver.

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Natural Law Solution To The Housing Crisis

I am reading Norman Cantor's Medieval History and came across a trend he points out from the violent 900s...  as Europe began to organize, churchmen with large holdings (read the book to find out how they got them in the first place) would rent out lands the churchmen could not profitably work themselves to peasants.  Cantor suggests this practice gave an idea to the dukes and kings, who in turn perfected the practice into enfeoffment. (I have his 1969 edition, which is not available on amazon, but his updated edition is.  Read the reviews.)

Natural law says what you can work is yours.  The flipside would be what you cannot work is not yours.  That is to say if you have something to which you have title, and you cannot profitably work it, it is free to be homesteaded by someone who can.  Now the law does not work that way, but perhaps it should.

We actually recognize people legally assuming unused real estate in USA property law, what we call adverse possession.  Say you and I have contiguous lots, and one day I put a barn on your lot, which you cannot and do not use.  I do not have your permission.  Everyone can see what I am doing, and you should notice.  Well after ten years (in most jurisdictions), that portion I am using is mine, it is not yours anymore.  In fact, even if you continue to pay property taxes, it is not yours.

Adverse possession developed in common law to settle the problem of title disputes, it is not a means of land reform or redistribution.  But why not use it as such?  For example, banks are sitting on a large portion of 19 million empty homes in USA, make a law if you live in a house for a year under adverse possession, it is yours, free and clear.  Of course this would introduce chaos, but we have chaos now.  What it would do is allow taxpayers to get something for the bailout money we forked over on these houses, and lower property values and taxes possibly enough to clear the decks enough to restart the economy.

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India Moves Ahead In Science

Global Warming, like the Global War on Terror, is simply a ruse to advance imperialism and hold back third world development. Since a consensus among USA scientists is without imperialism, their grants will dry up, USA scientists promote Global Warming, comforting themselves it is less violent than the Global War on Terror. Being against Global Warming puts a halo on oppression.

The problem with habitually subscribing to bad science is one becomes second rate. Indian scientists have rejected Global Warming claims, which is consistent with the science. On these trajectories, USA will fall behind in Science, India will move ahead. China is already moving ahead, since they have already rejected Global Warming as science.

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Overcapacity

Mish Shedlock is reporting on a story of a chicken farm that is being shut down driving a county into a depression. The kicker is the large outfit that owns the operation does not want to sell, since excess chicken capacity is suppressing prices. This is another example of damage done during the boom, with the bust merely sorting out who loses, who pays.

You might check out ECONOMICS FOR REAL PEOPLE by Gene Callahan for a good overall explication.

I was teaching at San Francisco State last weekend and a fellow asked why if Austrian economics is so obviously correct, why do so few people embrace it? My first answer is, there is a tiny minority of Americans who wonder at "while baseball is so fun, why do so few Americans follow the game?" People follow what they follow. A first rate plumber cares nothing for economics, and when I want my pipes right, I don't care about his economic views. They don't matter. Everyone knows organic food is better for you, but Wonder Bread is still America's number one brand of bread.

In the instance of chicken ranches, we have excess supply of those chickens that become tender nuggets at KFC. During the boom, loans for everything, including chicken ranches, were cheap and easy. The big boys expanded and "modernized" (think less nutritional value, but less cost) leaving a swatch of perfectly good chicken farms redundant.

The heart of all of this is our economic system, and the Federal Reserve System. There is a move to audit it, and perhaps get rid of it. I doubt it will come to that, although I agree it should go.

If it does go there is a problem. The Fed system distorted the marketplace to the point where less than 100 years ago we had some 75% of Americans live on farms, and to day it is something like 7%. The fact that the government could control the economy, enforce "get big or get out." From there USA policy could use big ag to dominate the world by shipping cheap food overseas, in return for even cheaper resources from the countries we exploit. The Fed allowed us to become imperialistic.

But here is the problem: if we get rid of the Fed, then our system begins to fall apart, and to feed America most Americans will have to back into farming, or many Americans will starve. Does anyone see that happening?

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It Costs Too Much To Be Poor

I have two teenaged daughters, the elder of the two has just crossed some $400 plus in bank fees cumulative. She has only a debit card, but it seems she is destined to make one of each possible mistake that generates a fee. The first one was the most obvious, a simple overdraft. The most recent was trickier, a Friday post 4pm deposit still had not shown up Monday at 5pm. Ding!

We make her pay these things but in the big scheme of things this house earns enough money for which these are mere annoyances. It is not so for most other people.

For a young struggling family a $35 ding can be a week's groceries. (Yes, it can!) The fees went up during the boom. When the busy-body do-gooder regulators "review" these fees they find the fees reasonable. Of course they are. What with the cost of employees, the physical plant of marble and granite offices, the management overhead, regulatory compliance, a $35 fee for a computer-noted $2 overdraft is reasonable.

There is no real good technological solution to this problem. There is cash, and there is self-control, either of which would solve the problem of overdraft fees.

But there is the other aspect, where people unfamiliar with the banking system, find it overwhelmingly unfair, relatively speaking and thus are alienated by banking.

To become banker, you have to get a charter and follow certain rules. The big boys can do it, cheat steal lie and still make money, if nothing else through bailouts. Small guys cannot. There are those who know how to make money a the small bank level, and could make money on $2 overdraft fees, if the costs of compliance were not so huge.

In a free market fees would always be going down not up. Banks' overhead would be lower so costs would not be so high. Alienation from the system would not be so widespread. Just because banks spend so much does not mean that it costs that much.

We need a free market in banking too.

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