this is the perfect place to get jumped

Month: December, 2016

Favorite Books 2016

Economics is a tricky subject. First, it has an identity crisis. It uses methods of gathering hard data to reveal trends of unpredictable human behavior. Next, it comes under attack becasue, just like the weather, an economist’s predictions, though based on hard data, can’t always be accurate. Third, not everyone can agree on the best ways to nurture an economy because everyone is affected differently. (Weather just happens.) Some of this is due to its unfair proximity to politics, which exacerbates everything.

But in the time before the economy was given her name, times of constant war, strong leaders were needed to defend their lands from attack. A civilization needed a leader to protect its economy so that their people could thrive. In modern times elected leaders focused less on defending their lands and more on protecting their economies from itself and others. They do this by regulation and treaties.

In the USA, traditionally, Democrats are the mommies and Republicans are the daddies. The Dems wants to ensure the economy plays nice with everyone by checking in on its growth and giving it strict guidelines to follow. They can’t trust the economy not to be a mischievous liar when they turn their back. Republicans treat the economy like a pretty teenage daughter. She is so talented that they trust her to learn from her mistakes. It’s the other international economies they don’t trust.
Elected leaders know that they can get a powerful job influencing the economy by appealing to their constituents. They promise to change the economy to benefit their targeted group more, because everyone knows that the economy cannot help everybody equally.

In 2016, the economy was once again targeted by warring politicians, each promulgating fallacies that trade faster than stock.Venom thickened in the first world, muddling democratic conversation between individuals. Politics criticizes the struggling economy for getting dirty as it works hard to get back on its feet. So cruel. Without nosy government supervision the economy can probably function just fine.

The best books that I read gave me a greater understanding for economics, and the mindset of individuals.

1.    Atlas Shrugged by Ayn Rand
2.    Economics in One Lesson by Henry Hazlitt
3.    Economic and Social History of Medieval Europe by Henri Pirenne

If any Bernie bros read Hazlitt’s Economics in One Lesson (or any issue of The Economist) they would stop screaming about inequality, cry in a cold shower then drop out of liberal arts school to make friends in high places. Politicians have proudly never read it and don’t need to. Politicians don’t really need to know anything.

The lesson is simple, and its not meant as an introduction; it is meant as a framework for understanding economics:

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group, but for all groups.

Think of all economic policy like steroids. When used properly, steroids can give the user unholy gains in a short time. However, in the long term there is a cost to the overall health of the body, especially the genitals, which shrivel. Keep in mind that not everyone wants to shoot steroids in the first place. Some people prefer to stay fit with cardio, which makes the thighs stronger but decreases time that can be spent with friends. Every policy will effect the economy and the people who make it differently.

Some politicians believe that raising the minimum wage will improve the lives of unskilled workers and the economy. In reality it will do neither:

A wage is another way of saying that labor has a price. $15/hr is what the labor costs the business.

An industry can charge a higher price for the items they are selling to offset the increase in the price that they pay for their labor. But a higher price might cause consumers to buy less of the item. This may cause an industry to lose business and sac employees they deem not worth the price they are paying for their labor. This would keep the unemployed from working legally. They are not allowed to work for less than $15/hr, so they may be unable to find an employer that will pay them less. Competition for the job will increase, eventually driving down the wage.

Some politicians believe that protectionist policies like tariffs will keep an industry in business by protecting employment. If a consumer has a choice between two cars of the same quality, they will choose the car that is cheaper. If that car is foreign made, a tariff is applied to its cost so that it matches the price of the car made domestically. This decreases competition and protects the industry from tanking, saving domestic jobs.

If the tariff was removed, and the industry tanked, people would lose jobs. But what can’t be measured are the long term benefits. The money saved by buying cheaper goods would give people more money to spend on other industries. Additionally, it would give foreign products more ability to sell their goods, which gives them more money to buy goods. They are forced to buy if their dollar balances are surplus. By letting goods in we are selling more goods. Countries eventually benefit one another by doing what they do best.

These are only two of the partisan fallacies that Hazlitt beautifully dismantles.

Atlas Shrugged is about the struggle of the human spirit to overcome obstacles, using economics as its foundation. There are two mindsets in Atlas Shrugged. One mindset is creative. The other is not. Instead, it wants to police the creativity of the former. Which one is the victim? Typically, the group that is represented as the unfortunate victim of industry are the workers.

Revolutions have been waged in central Europe for the worker. In peaceful countries, workers are represented by unions to avoid bloody conflict and systematic overthrow (which Hazlitt proves does not spark economic growth).

Rand takes the premise of victim and reverses it. Instead of the working majority victimized, it is the business executive minority that is victimized by government regulation. The similarities to real life makes Rand sound like a mystic.

Take fracking, an alternative energy practice that has been used for 65 years. On the forefront of technology, its aim was to provide natural gas for customers at a cheaper price, and to reduce the US reliance on foreign oil. Some people are afraid of it, claiming that it contaminates drinking water. They protest its use with cheap signs on lawns. Fracking isn’t a conspiracy to destroy families or farmers. The men most at risk to the dangers of fracking are employed by the frackers! Just like oil drilling and construction are dangerous professions, these men understand the risks and are compensated.

The new technology in Atlas Shrugged is demonized by a government that did not invent it. Then when the government sees it succeed, they force the creator to use it on their terms. The government men collude with some corrupt business executives who have created cartels to ensure ‘fairness.’ Once these two groups join forces to equalize the economy they create a cabal of unelected decision makers. The results of their altruistic policy is disaster, and the onus to fix this disaster falls upon the most productive members of society, who must adhere to the counterintuitive rules enacted by the cabal. When they are pushed to their limits, the Atlas’s protagonists go on their own strike.

Rand is kind to her bumbling antagonists, but fair. They are delusional, not power hungry. They really just want to help the world, and think that wealth shouldn’t be concentrated in the hands of those who have earned it. However, this is an evil mindset. Wealth can only be created by individuals. Some will be more successful than others. But successful or not, what one makes is their property, and no matter the intentions, any measure to steal the property of another is wrong. Her antagonists, having essentially destroyed the world by meddling in the business of others, destroy themselves with their own mindset.
Atlas Shrugged’s antagonists are not held responsible for the destruction they wreaked. Unfortunately, reality is not. fair. In reality the men who come to power with altruistic intentions don’t give it up when they see the damage they have caused. They hold onto that power until they die or are killed.

The protagonists, however robbed, become stronger, even after leaving behind their possessions. It is their mindset that keeps them strong. In the beginning they don’t understand what Rand coins ‘Objectivism’. They are too busy running railroads and developing new technologies. Objectivism is first explained to them, then they accept it when they see what the opposite of Objectivism is: feeling entitled to the work of others.

Objectivism is often derided by critics who do not offer a compelling argument or alternative. Minds as great as Christopher Hitchens have nothing but surface level remarks to make about Rand’s character development in a book that is over 1,000 pages in length. My book club wanted to read it, but suggested putting a brown bag over the cover to avert snobs from snickering while reading it in public. We decided to choose something shorter.

Rand does not use coined economic terms to describe anything in the book. Her focus is the mindsets and the environment each one creates. The ideals discussed in her book will always be relevant, but the exclusion of fashionable terms makes it timeless.
Economies exist beyond definition. No economy has been strictly laissez-faire or communist. Similarly, the economy of the middle ages is not defined in Henri Pirenne’s Economic and Social History of Medieval Europe. This story begins with the disappearance of commerce after the fall of the Roman Empire in the West. The book covers the rise of commerce from the Middle Ages around 900AD until the 1500sAD.

Environment played a large part in the growth of commerce in the Middle Ages because Western Europe had slunk back into a rural state. Everyone lived off their own land, and consumed what goods they produced. Government was replaced by the Church, which did not believe in usury, or interest. The Church also believed that land was bestowed upon men so that they could live with a view of their eternal salvation. Labor was not intended for the creation of wealth, but to maintain oneself in the position that they were born. Seeking riches was a seen as greed, a sin. The Church, was the first to benefit from the fruits of labor, and was very well off financially. Land was bestowed to lords as sovereignty, not as property.

However, the ruthlessness of the environment forced men to rely on their neighbors to trade goods, or else perish. Trade was a result of the practicality of survival. The Church against this business ideal, could not prevent human nature as men sought to better their lives.

Merchants were not defined by the land of others. They traveled to towns from cities with goods for trade. These travelers gave opportunity to the many men who the manorial system could not support. Men who did not leave the manor because of war or famine, but instead left on their own initiative, to seek a livelihood elsewhere, were many.

The holders of lands outside the manors took advantage of these manorial defectors, settling them in exchange for a rent as they sought labor. Soon, peasants devoted labor to their own land, sometimes paying dues. This liberty of the peasants was still limited by the lords, but in the long run the land became the peasant’s as they paid rent to the lords. Labor was in demand, and wastelands became occupied. Markets grew. Only the Venetians ruled supreme in commerce, thanks to their lucky location on the Mediterranean Sea. In Venice the first banks were developed as commerce spread in every direction, creating a desire for new goods.

Pirenne goes on to describe the development of credit, loans, monopoly, protection, guilds etc. Amid unpredictable factors of the time (Black Plague, Holy Wars, Famines) the economy still grows and flourishes along the Mediterranean. Curiously, as it advances, we begin to see the trade policies of various protectionist quality that Hazlitt dissects in his book.
The problem will always be competing interests, domestic and foreign. No nation or politician can completely control their economy; it is much too complex. Secondly, the economy is shared between all of the people that contribute to it and benefit from it. It is not owned by anybody.

An economy is molded by a country’s government, culture, history and environment.  Diversity of individuals that make an economy add to their an economy’s overall strength. The more an economy grows the more it can buy/sell goods from/to other countries, and the wealthier the entire world becomes.

The economy is an ecosystem of imagination.  Judging from these books, human nature has stayed constant with two mindsets: a producer and a meddler. One will try to improve his situation, the other, in a position of power, will tax and hamper his methods. There are more contributors than meddlers, the government can only employ so many people. Every American citizen is privileged to be living in the world’s richest country surrounded by allies and oceans.

As a bonus, I recommend Working by Studs Terkel gives modern economy a human element. Oral interviews with ordinary and extraordinary people on what they do every day and how they feel about what they do. It is as much a time capsule of the social and political 60s as it is a therapy session for the overworked, the unseen, and the average man. Some of the jobs are dated, but the sentiment will remain forever.

This book is for anyone that has worked, is working, or will work someday.

Other  books I read:

books-2016_4 books-2016_3 books-2016_2 books-2016_1

venezuela v scandinavia


Socialism v Social Programs

2016 misconceptions do not end at ‘fascism.’ Socialism, and specifically “democratic” socialism are also tossed around by the left to mean things that they are not.

Vermont Sen. Bernie Sanders (RIP) has brainwashed my generation into adopting the naive ideology of ‘democratic socialism’ for the noble and just cause of economic equality. This brand of socialism, coined for the sake of his campaign, is supported by the Scandinavian countries as a symbol of a beneficial government; one that provides services regardless of income.

Industries sell services and commodities to customers. Duh. But Bernie and his bros hold healthcare and education sacred because they represent our lives and our collective futures. Therefore, they should be considered ‘rights’ and provided by the government without the taint of an industrialist’s profit. But real rights are free and guaranteed, not forced upon the population by the taxation of a ‘social democracy’. Scandinavians may enjoy the hallmarks of Bernie’s campaign pleas, but they pay high taxes for it.

It could be argued that the USA is already a ‘social democracy’, with social programs like  Social Security, Obamacare, Affirmative Action and Medicare. But no system is perfect, so what do Democratic Socialists want? Why would higher taxes be a priority for this group? Have they ever received a paycheck? Darling Sweden has lived the problems of a government run healthcare system, so why does Bernie want to dismantle the entire system, only to rebuild it with the flaws we already know exist?

And if Scandinavia and her free market aren’t ‘democratic socialism’ what is?

  1. Socialism is a state run economy.No profit, No private property.
  2. Democracy is a state of government that is elected by the people.

Usually, political parties are created to represent people’s distinctive interests. In a theoretical socialist state ‘the people’ would be represented by ‘the party’ which would control the economy in their best interest. To elect a party that believes in a free market would not be socialist, so it would have to be run by a single party, and that party would  pose questions to the people for a democratic vote on how to run the state enterprises.

Socialism assumed that every worker would have the same viewpoint, or close to it. What happens when hardworking people disagree with the benevolence of socialism? Ask the single party states of China, Cuba, USSR and North Korea.

When the democracy of socialism demonstrates its inefficiency, the first thing the socialists take away is democracy, or natural rights.

Democracy assumes that there are more viewpoints than a government can predict. Greece, Britain, and France all have ‘socialist’ political parties. If that party is elected  (God forbid) they do not become a socialist government overnight; they still have a free market. Democracy is open to fresh ideas, and all voices can have a say. Socialism is not as open minded.

Look no further than the democratically elected socialism of Venezuela:

After leaving the military, Hugo Chavez attempted to overthrow the government in a coup. He failed to capture the president, and offered surrender in exchange for televised address to his co-conspirators. He was imprisoned, but the charges were dropped by the president due to his growing popularity, and Venezuelan’s dissatisfaction with the government. In 1998, Chavez won the presidency after capitalizing on that dissatisfaction, while uniting his socialist party.

A new constitution was drafted, oil wealth was redistributed, and social programs were expanded. Chavez’s new constitution called for a new election, and he was re-elected in 2000 to a 6 year term. An enabling law was passed that gave him the power to implement new laws by decree. As his agenda became more radically socialist, he was met with resistance.

Venezuela is an oil rich country, and a member of OPEC. 80% of its revenue is accounted from its state run oil company. As oil prices surged, so did Venezuela’s revenue (or Chavez’s). He spent more money on social programs, and his approval rating soared.

Chavez nationalized electricity and telecommunications and tried to change the constitution again in 2007: the popular 6 hour workday, the ability for the executive branch to control the central bank and seize property, and the indefinite election of the president. It did not pass.

Chavez died in 2013, and Venezuela has suffered from his policies and his corrupt government. After the price of oil dropped in 2014 and economies around the world tanked, the Venezuelan economy became an emergency. Today electricity is rationed, and people are starving. Government issued vouchers have replaced currency due to hyperinflation. Murder is on the rise, and there are shortages of the basics; grocery stores are empty, so people eat wild dogs.

Socialism becomes authoritarian even if it is democratically elected.

Much like North Korea acts as China’s younger brother, Venezuela acts as Cuba’s. Chavez, visiting Havana in 1999 said, “Venezuela is traveling towards the same sea as the Cuban people, a sea of happiness and of real social justice and peace.” After the failed coup of Chavez in 2002, Cuba exchanged their military presence for barrels of oil.

To put it kindly, actual human rights, (freedom of press, religion and speech), are not strong points of Venezuela or Cuba. Yet Bernie Sanders, ideologically blind, commends dictator Fidel Castro for the healthcare and education he provided to Cubans. He ignores Cuba’s military presence in Africa to prop up dictators, or brainwashing young Cubans and using them as shock troops in Soviet military efforts. Bernie proves himself to be the socialist he claims he isn’t, while contradicting himself and living it up in a new mansion. Then again, Chavez’s daughter is worth $4 billion. Is this all just a ruse for your money? Nah…

Bernie’s followers pretend to be champions of democracy and this ‘democratic’ kind of socialism, all while silencing disagreeable speech and charging others as racist etc. The rhetoric of democratic socialism puts ‘people ahead of profits,’ simplifying and demonizing the role of bankers and businessmen in a free market economy. Hm. Scapegoating a class of people to revolutionize a just and fair government sounds eerily familiar…to something….

It is frightening to hear Bernie supporters admit that they wouldn’t mind a ‘benevolent dictator’ as he spearheads a misnomer movement. But one has to appreciate their honesty. It is seldom.

Fashionable Ism

Fascism is going to be the most looked up word in 2016!

When throwing the term around as a political slur, people were forced to look it up to see what it actually means! (Before writing think pieces to support their accusations with cherry picked historical evidence!)

It certainly has an ugly ring to it. Calling someone a communist is so 1955! Calling someone a Bolshevik sounds ridiculous. Calling someone a Nazi, with the weight of genocide behind it, must be taken with a bucket of salt.

And so in 2016 ’Fascist’ was a two-for-one: used as an insult by the left (and occasionally the right) and making its user sound credible.

But as with all political systems, context is key.

Economically, fascism has its roots in the left. Like socialism it was meant to combat the unpredictable nature of the free market by centrally planning the economy. It was not meant to be democratic; it was meant to use the people to strengthen the state. When he created it in 1919, Mussolini learned that people were more loyal to their country than their class. He could use this loyalty to mobilize nationalism, instead of stoking a class war from inside. In this way, fascism broke with traditional socialism.

What makes fascism slightly less extreme than socialism is its corporatism. Where socialism abolished all markets, fascism kept the appearence of markets by nationalizing industries that once belonged to property owners, requiring them to use their property in the national interest. Competition was eliminated, and prices were fixed. Revenue was used towards public projects like roads, buildings. Political representation was not based on geography or population, but trade and industry. Unlike the extremity of socialism, there was still a profit incentive for corporations, which aimed to be self-sufficent and not trade outside the country’s borders. When necessary resources were unavailable in the homeland, conquest was the line fascists took to secure them.

Due to the unparalled tension of the time, (there is a castrated European Union today) when combined, fascism and nationalism lead to war. Spain, Portugal and Greece were fascist dictatorships, but did not enagage in straightforward warfare like Germany and Italy.

It is argued that elements of fascism have been used in democracy. FDR’s New Deal had tendencies of a corporate state. Backed by taxpayer money, programs like the National Industrial Recovery Act and the National Labor Relations Act granted government control over all aspects of manufacturing, commerce and labor relations.

Interpretations for fascism can vary, because it has taken so many forms across so many countries during historically signifigant times. However, accusing modern politicians of fascism can only be done as a smear tactic. For America to turn fascist would require a revolution, not an election. Ironically, the fascist accusers might prefer fascism themselves, and not just for the bigotry definition, but because those that appeal to emotion by shouting names are usually the revolutionary types that prefer the collectivist economic planning in the trending, oxymoronic “Democratic Socialism.”

Calling someone a fascist because their rhetoric sounds hateful is a terrible argument to make against their economic policies, but I prefer it to the historical Fascism of the 20s & 30s.