Category Archives: Politics/Economics

Conversations With POTUS

Ed:          Good morning Mr. President. Could I have a word with you?
POTUS:  Who the hell are you! And how did you get into the oval office?
Ed:          Well, I just walked in. There doesn’t seem to be anyone around outside.
POTUS:   picks up phone: Security! Get in here NOW!…. What the hell! I’m getting a busy signal!
Ed:          There was no one at the front desk either.
POTUS:   What’s going on around here? Where is the Secret Service?
Ed:           It is ten o’clock after all. They are probably on coffee break.
POTUS:   This can’t be happening! I must be losing my mind!
Ed:           You look alright to me. Could I ask you a few questions?
POTUS:   Why should I talk to you? Who the hell are you, anyway?
Ed:           I’m nobody; just an ordinary citizen, but you are my president.
POTUS:   Did you vote for me?
Ed:          Well…no. But still, you are supposed to represent me.
POTUS:   I don’t think I’m YOUR president.
Ed:           It won’t do much good for me to talk to Mitt, or John.
POTUS:   smiles and relaxes a bit. You have a point there. What’s your question?
Ed:           I can’t believe that a man of your intelligence really believes in this Climate Change     crap.  Why are you pushing it so hard. You must have a good reason. I would like to know what it is.
POTUS:   Aren’t you being a bit condescending, calling it crap? Ninety-seven percent of climate scientists say it’s not “crap”, as you put it.
Ed:          Please! Don’t go Al Gore on me. Ninety-seven percent of scientists could never agree on anything; unless they were being paid to do so.
POTUS:  What about the hockey stick?
Ed:          Pure bullshit, and I am sure you know it.
POTUS:  Don’t you notice that it’s getting warmer?
Ed:          Of course it is! We’re between ice ages, anyway it’s not a big problem. Canada, Russia, and Northern Europe would benefit from a few degrees warming in winter.
POTUS:  What about sea level? Don’t you think that’s a problem?
Ed:          Sea level is rising seven inches per century. And we can’t do anything about it.
POTUS:  You are overlooking all those computer models that are predicting catastrophic Global Warming. The IPCC has spent billions on them. What about them?
Ed:         Garbage in, Garbage out.
POTUS:  Since you are obviously a confirmed skeptic as far as climate change is concerned,
I should point out that there are environmental issues to consider, not to mention runaway population growth.
Ed:          If there is no manmade global warming, the environment is what it is, and what does global warming have to do with population growth?
POTUS:  We have to stop population growth. There are too damn many people.
Ed:          I repeat. What does global warming have to do with population growth? And besides, demographers say that world population will stabilize by 2050. How does abandoning oil and coal solve any population problem?
POTUS :   It will reduce industrial development.
Ed:           Actually, it will destroy the world’s economy. Everyone’s living standards will be devastated. Especially that of the poor people in third world countries. Wait a minute! Is that how you are going to solve the population problem? Starve them out?
POTUS:   Gets agitated, walks around his desk several times. I’m not talking to you anymore. I’ve said too much already. Get out of my office!
Ed:         You have nothing to fear from me. I’m a nobody. No one is going to believe I just walked into the oval office and had a conversation with the President of the United States, much less believe anything I might say about what you might say. I think it would do you good to get a load off your chest.
POTUS:  I suppose you’re right. I can hardly believe it myself. Heaves a sigh, sits down, and stares silently into space for a few moments. Just so you know, it’s not all my idea.
Ed:         Softly, unaggressive now. Whose idea is it?
POTUS:  Have you ever heard of The Club of Rome? Or The Council on Foreign Affairs?
Ed:          Can’t say that I have.
POTUS:   Many have not. They are organizations of the most powerful men in the world.
Ed:           Excuse me Mr. President. You are the most powerful man in the world.
POTUS:   So I’m told, but their wealth and influence is unmatched by any political leader. Among them are those in control of international banking, and therefore, in control of the bulk of the planet’s wealth, as well as in control of the monetary systems of the major nations around the world,  They are quite capable of bringing the economy of the entire earth to catastrophic failure. Beside, in a few months, I will be out of office and just as powerless as any one else.        Ed:          So they are the ones worried about the population?
POTUS:   They’re worried about a lot things. They believe that further industrialization will
destroy the environment, and quality of life, and will use the panic induced by the Global Warming campaign to de-industrialize the world. Many are convinced that Capitalism has created a more contentious world population and believe that a move to redistribution of wealth will make for a more stable world. Above all, they are certain that excess human population growth will render the Earth uninhabitable in the near future, and intend to depopulate the world through the fear of Manmade Global Warming.
Ed:          That doesn’t make sense. You are telling me that these fabulously wealthy and powerful men are against industrialization and capitalism? And they want to redistribute wealth?
POTUS:   Not their wealth, of course, your wealth and my wealth. They have already made their money. Now they just want a stable world with no wars that they can control.
Ed:           I don’t see how they can expect to control a world that they have just impoverished.
POTUS:   That’s the other thing.
Ed:           What other thing?
POTUS:   World Government.
Ed:           You’re saying the Club of Rome is planning a World Government?
POTUS:   Not just the Club of Rome; The Council on Foreign Affairs, several United Nations Agencies, and most of the major environmentalist organizations. They have all come together in order to eliminate sovereign nations. They intend for the United Nations to be in control of all people everywhere.
Ed:          That’s the scariest thing I have ever heard! The United Nations can’t find their ass with both hands. How in hell could they control the whole planet?
POTUS:   Well, current leadership is a bit flakey, and they know that. But once The Club of Rome is in charge, they think they can recruit better talent.
Ed:           Any names mentioned?
POTUS:   Well, I suppose they will be looking to individuals who have experience running large governments.
Ed:           Large governments like, maybe, the United States?
POTUS:   Possibly.
Ed:           I see! Have they made you a firm offer yet?
POTUS:   That’s not the issue. The issue is that in order to preserve civilization, it is mandatory that all sovereign governments are dissolved and replaced by a benign World Government.
Ed:           And you think the United Nations is the place for this World Government?
POTUS:   Well, sure. The basic organization already exists. We don’t have to start from scratch.
Ed:           I notice you said “we”. You are already on board then?
POTUS:   Isn’t it obvious that a World Government is inevitable? How else could the chaos of civilization be brought under control?
Ed:           It seems to me that Hitler, among others, had similar ideas. So far, it hasn’t worked out for any of them. I have the feeling that “chaos”, as you put it, might be better than World Government under the control of egotistical maniacs such as The Club of Rome. And perhaps you should be included among the maniacs.
POTUS:   I suppose ignorant fools such as yourself can’t be expected to understand the importance of achieving consolidated World Government. If you will excuse me now, I have more important things to do. You can show yourself out.

Understanding Trumpism

The Republican Establishment is panic stricken now that Donald Trump has become the presidential nominee. So much so that they are not getting the message that is being given to them (and to Democrats) by his robust performance in the primaries. They rail against his perceived shortcomings without understanding what they signify.

He may be a bit unschooled in FOREIGH AFFAIRS, but he knows that the United States is the most powerful, most successful, economically strongest, most altruistic, generous and moral Nation in the entire world. And that it makes no sense for us to avoid taking the leadership role that is so sorely needed by the rest of the nations; no sense to make self-destructive agreements with the likes of Iran; no sense to apologize to the likes of Cuba, China, or anyone else; no sense to back down from Russia or any European, or Arabic country.

He may be a little out-spoken on immigration and refugee matters, but he knows that it is beyond stupid to allow Muslims to immigrate in large numbers because they do not desire our way of life, or culture. He knows many of them are unwilling and unlikely to assimilate, especially when they are poorly vetted politically. Have we learned nothing from the European fiasco? He knows that the ongoing, economically, and culturally destructive illegal immigration across our Southern border has been out of control for decades, and that prior Administrations, both Republican and Democratic, have been unwilling to do what it takes to bring it under control.

He may be outrageously outspoken on other matters, but he knows the wide-spread, aggressive political correctness with regard to ethnicity, race and gender variation, is over-blown, distractive, and destructive to civil society. He knows that political correctness in the realm of higher education, not only by students, but by faculty and administration as well, is not just disruptive, but threatens to degrade the entire college/university culture. He understands that the ultimate goal of this political correctness is to instill ultra-liberal collectivism into the core of future influential citizens.

He is a little bombastic on the subject of FREE TRADE, but that is because he knows that it makes no sense to gut American manufacturing so that we could have cheaper electronic toys, clothes, notions and so on. He knows that it was not necessary to make it easy and economically attractive for American Industry to move overseas. Free trade could have been handled in such a way that foreign enterprises could be competitive with American companies without giving them overwhelming advantages.

He also knows that much of the above destructive behavior is at the behest of powerful, lavishly funded lobbies, and pressure groups who put their economic and/or political interests ahead of the well being of ordinary Americans. Trump, it should be noted, was self-funded in the primary election process. It is very possible that he believes what he says, and says what he believes. If that is true, he could be the most effective president since Ronald Reagan.

 

 

 

The Twilight of Freedom

Resolved: The collective society of planet earth is on the brink of chaos and anarchy.

  • The population of humans is approaching unsustainable numbers.
  • Human racial, religious, and ethnic conflicts are growing out of control.
  • Democratic forms of government are falling into economic disarray.
  • Authoritarian forms of government are drowning in corruption and ineptitude.
  • Resources necessary to the sustenance of human life are being rapidly depleted.

Therefore: It is our mandate to preserve human kind by bringing order to governance. In order to accomplish this it is necessary to annihilate all incidences of existing authority, to be replaced by worldwide power to which every human must submit and pledge allegiance on penalty of imprisonment and/or death.

The process: The following procedures are to be implemented step by step:

1) Recruit and fund a worldwide cadre of professional activists loyal to the cause. Make special efforts to recruit educators, and university faculty.

2) Break down the authority of existing governance, and administration.

a) Capture leadership positions in each through appropriate subterfuge: corrupt elections, defaming existing leaders, and popular candidates.

b) Incite mass anxiety through exaggerated reports of, or implemented crisis. Climate Change is the most  plausible and widely accepted example of false crisis.

c) Make every effort to instigate civil, and ethnic uprising and conflict.

3) Consolidate leadership in major areas through corrupted elections, managed demographics through immigration policies, aggression, or military overthrow of existing authority.

4) Through this consolidated leadership, impel wealthy areas into bankruptcy by excessive spending on environmental issues, entitlements, and welfare.

5) It is imperative that military and police capability in local areas is discredited, defunded, and degraded. It is vitally important that all citizens are disarmed.

6) Through this leadership, drive impoverished areas into chaos by corruption and civil unrest.

7) Organize a world military loyal to, and funded by, the United Nations.

8) Once bankruptcy and chaos are worldwide, establish World Governance under authority of The United Nations, all other sovereignty declared null and void.

9) Task the World Military to forcefully eliminate any and all dissention.

SO SAY WE, ONE AND All: Club of Rome – United Nations Conference on Environment and Development – United Nations Commission on Global Governance – Worldwatch Institute – Earth Policy Institute – World Wildlife Fund. 

 

Of course, this imagined scenario is not only simplistic, but exaggerated as well. However, looking at current events, much of it seems to be happening right before our eyes.

 

 

 

 

 

What I want in a Presidential Candidate

 

  • The ability to win the election.
  • Determination to abide by, and enforce the Constitution of the United States; especially the tenth amendment.
  • Determination to appoint Supreme Court Justices who will also enforce the Constitution.
  • Is dedicated to systematically reducing the size and scope of the Federal Government.
  • Is willing to reverse the excesses of so-called “Free Trade”, and return American industry and jobs to the Homeland.
  • Recognizes that his first obligation is to the citizens of The United States, rather than to his political party, or other countries.
  • Is willing to do whatever it takes to secure the borders and stop illegal immigration.
  • Recognizes that allowing legal immigration of people who are unlikely to integrate, and adopt our way of life, is unwise and must be minimized.
  • Understands that America has enemies who are eager to destroy us and our way of life, and is willing to confront them on their home ground rather than on ours.
  • Understands that there are factions within our own population determined to transform our government into a collective, socialistic, utopian form, that have infiltrated our Federal Bureaucracies, Political Institutions, Educational Institutions, the main stream media, as well as State and Local public institutions; and is determined to counter these factions through vigorous promotion of American History and education in the core values of the American way of life.
  • Is determined to: make Social Security and Medicare fiscally sound, completely overhaul the tax code, work towards eliminating public debt, and toward living within our means.
  • Will severely reign in the excesses of Federal Agencies such as: EPA, Department of Education, Forestry Service, Bureau of Land Management, Fish and Game, Education, Internal Revenue, FEMA, Corp of Engineers, NASA, NOAA, ect.
  • Will choose a like minded Vice President and work to support his election to President at the end of his term.

 

 

 

 

 

 

Foolish Free Trade

The irrationality of excessive free trade is coming home to roost. Nonetheless, the promoters of the free trade agreements that have destroyed much of Americas industrial power are still clinging to their failing vision of worldwide riches. In a sense, they have been correct. The big money investment class, the business executive stock options class, and the international banking class have all prospered handsomely. But the rest of us should have saved our money for a rainy day, because excessive free trade is killing the goose that lays the golden eggs.

It must have seemed a good idea at the time: exporting labor costs to third world countries where competent labor could be bought for a fraction of the cost of American labor, not to mention the mounting costs of protecting the American environment, the incessant demands of overly aggressive labor unions, and the ever increasing costs of dealing with the endless stream of regulations imposed by countless government agencies. But now, they should be having some misgivings. The unforeseen side effects of emasculating America’s formerly unrivaled industrial power are emerging in a number of unpleasant ways.

First, and perhaps foremost, the mindset of a great mass of the American population is altering, and not in a good way. The lack of well paying, meaningful heavy or light industry, commerce, and middle management jobs, a very significant number of which have been exported to Asia, has had a deeply depressing effect on young people. At the bottom of the cultural ladder, many young men and women feel that it is hopeless to try to live even a modest version of the American dream. As a result, many turn to dissipative life styles, indulging in street gang activities, participating in civil disturbances such as Black Lives Matter, and Occupy Wall Street, as well as drug use, thievery, violence, alcoholism. Those in the next cultural step up are convinced that they must have a college degree in order to secure satisfactory employment. Because of the Governments push for Student Loan Programs, the cost of higher education has skyrocketed; those who do achieve a degree are burdened with outrageous debt. The quality of the degrees they achieve is, in many cases, greatly diluted. This because of reduced academic standards necessary to accommodate excessive numbers of students who are academically or culturally challenged in the world of higher education. Many are left with nothing to do except attend unruly rallies to protest Income Inequality.

Secondly, worldwide economic well being is facing a crisis. The enormous industrial growth in China has outstripped the Government’s ability to manage productive capacity. Unlike Capitalist governments, which depend on market forces to regulate manufacturing capacity, the Chinese Communists depend on the government bureaucracy, and they have grossly mismanaged this critical economic element. Asian, European, and to some extent American growth has slowed substantially, while the Chinese industrial capacity continued to expand. The result is a worldwide glut of goods and commodities. This will likely result in serious recession, business and banking failure, and wide spread unemployment.

This, coupled with Middle Eastern turmoil, and the problems caused by millions of refugees, means the whole world is in for some tough times ahead. Perhaps this disaster cannot be blamed entirely on Foolish Free Trade, but it played an important part.

 

Hoffer on Government

Eric Hoffer was a San Francisco Longshoreman/Philosopher. His masterpiece of the nineteen-fifties, The True Believer, in my opinion is the most insightful analysis of the motives behind mass movements ever expressed. In The True Believer, he solves what has always been a mystery to me: the rationale of Socialists.

If the criterion for successful government IS the highest standard of living for the most people with greater personal freedom for each citizen, free Market Capitalism is the clear winner in modern civilizations. This seems irrefutable to me, and it is irrefutable. So what are Socialists, Social Democrats, Progressives, Communists, and other collectivists thinking?

It’s very simple, Eric Hoffer explains. In the view of Socialists, the above IS NOT the criterion for successful government. As he further elaborates, to a large, and growing segment of the world’s population, the criterions for successful government are: freedom from competition, the opportunity to blend in, to go unnoticed and un-judged by society, to be relieved of the necessity to plan their lives, to be led unthinkingly through a safe, secure, unremarkable existence. Creativity, innovation, industry, invention are unvalued compared to personal security and unanimity. Prosperity, affluence, fame, personal freedom, challenging occupation, all are far down on the list of desirable realities. Equality is everything; even if it means empowering the foolish, enriching the idle, penalizing the industrious; even if it means equally impoverished, and equally powerless.

Now that I have a glimmer of understanding of the liberal/socialist mindset, I find their goals somewhat admirable. After all, a large part of their efforts are intended to support the less fortunate, less gifted; that is altruistic, to be sure. I can appreciate the urge to relegate competition to the world of sports, put aside worries of promotions, advancement, job security, unemployment, the need to conform to society’s notions of a normal lifestyle, avoid having to plan for, work for, and save for medical care, higher education, retirement, funeral expenses. In short, let someone else worry about the necessities of reality, and just enjoy the pleasures of life. The problems with this form of government are that it is contrary to the human nature, evolved over thousands of years, and it is economically illiterate.

The first problem with human nature is that someone has to take the leadership roles, and plan for the necessities of reality. But most self chosen leaders are just as flawed as the rest of us. As these leaders strive to deal with planning our lives for us, mistakes are made; intrusive, ineffective and excessive programs are instigated, and when they fail, additional plans of action are invented and implemented until, finally, the solutions are more burdensome than the issues they are intended to address. In addition, it is human nature for those who choose to be leaders, to protect, enhance, and expand their roles. Bureaucracies, government agencies, departments, once established have a life of their own and are with us forever. The government grows, expands, doubles and redoubles until it is unmanageable, impossible to administer and so expensive that it sucks up all wealth available. If this sounds like the government we are now living under, it’s because we have been drifting into SOCIALISM since the nineteen hundreds, and we are already halfway there. Currently, we call it PROGRESSIVEISM, and it only gets worse from here.

Economic illiteracy stems from the fact that government is not productive, just the opposite. Government is consumptive. Government does not know how to manage, innovate, design, produce, sell, service; in short government is inept at providing the goods and services we all want in our lives. When government is controlling the processes that private enterprises should be doing for us, chaos is the result. The Soviet Union and North Korea are the current bad examples, but over time, there have been many more.

The antithesis to PROGRESSIVE SOCIALISM is not “government by big business” or “government by and for the wealthy”, as liberals would have us believe. The solution to “incompetent, runaway, excessive, wasteful, intrusive, inefficient, bloated government is to dilute government. Our Constitution says that powers not explicitly vested in the Federal Government, are to be the responsibility of the individual States. This stipulation has been consistently, and brazenly ignored for decades.

10th Amendment
The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

If the Federal Government were restricted to the Constitution, things would be very different. Hundreds of Federal Departments, Committees, Bureaucracies, Agencies , and Boards would not exist. Most local problems that actually need to be dealt with by government, would be managed by individual States. Many problems would just disappear along with their hapless Federal Bureaucracies. A State Agency that had gone astray, like so many Federal Agencies have, would surely be more susceptible to correction, or dissolution, than one buried in the folds of Federal Bureaucracies. Individuals would begin to understand that it is to their advantage to deal with, and solve personal and local problems on their own, rather than to trust to some government bureaucracy to provide a cost-effective and sensible solution. Private charities would deal more effectively with social welfare problems.

With an overbearing Federal presence removed, citizens would cease to think of State Government as weak and ineffective. There would be more attention paid to the activities and effectiveness of State Government, and a higher quality of leadership would begin to prevail. I would expect that fifty high quality State Governments would cut the waste and invasiveness of government overall in half. For sure, we would have much more freedom and control of our lives. With fifty State Governments searching for better solutions, the best solutions are more likely to be found.

The most important beneficial effect of reduced government might be to our national character. The unambitious would soon find that a comfortable life requires at least a moderate work ethic. The foolish would find fewer activists willing to do battle for shallow, self-serving, politically correct absurdities. The industrious would be motivated because they could keep more of what they earned. The non-political would gain more interest and trust in a State Government in which their vote actually had meaningful effect. Hard work would become fashionable once more. Without the bad example of a Federal Government driven by partisan political corruption, we might regain respect for honesty and integrity.

Sinister Motivations

  • There is no scientifically credible reason to conclude that Man Made carbon dioxide is controlling global temperature.
  • There are no credible data supporting the claim that increased carbon dioxide is increasing global temperature.
  • There is currently no global warming. A slight cooling has occurred over the past 17 years.
  • There is nothing unprecedented or extraordinary about temperature changes, atmospheric carbon dioxide increases, or other climate variations or weather events over the past 50 or 100 years.
  • It is not certain that the climate is going to get warmer; it is just as likely to get cooler in the near future.
  • The rate of sea level rise is not increasing. It has been rising a small amount per year for 20,000 years.
  • The only certainties are that climate and sea levels will change, as they always have.
  • It would be useful to keep in mind that all the hyperbole about global warming is derived from a 7/10′s of one degree global temperature increase and a 1/10,000th increase in atmospheric carbon dioxide over fifty or 100 years.
  • The United Nations IPCC is not about climate science. It is about social engineering.

 

All of the above statements are true, and yet the drumbeat of Global Warming continues unabated. Why?

Some, but by no means all, adherents seem to actually believe that Carbon Dioxide is going to cause disastrous temperature increases, a contention easily and often refuted. Others believe that industrialization is destroying the Environment, and quality of life, and hope to use the panic induced by the GW campaign to de-industrialize the world’s societies. Many are convinced that Capitalism has created an unjust world society and believe that a move to Socialism and redistribution of wealth will make for a happier world. Others are certain that excess human population growth will render the Earth uninhabitable in the near future, and hope to depopulate the world through the fear of Manmade Global Warming. Some are simply misanthropic to an extreme and would destroy all humanity if they could.

I believe that the most insidious of all are those who long for One World Government. And in most cases, they believe that that Government should reside in The United Nations. The form of this desired Government would be ECO-FACIST, wherein human needs and desires are subjugated to Environmental concerns as perceived by a ruling faction . By its nature, this Government would be authoritarian to the extreme. It is no coincidence that the main impetus of the Climate Change Movement is within The United Nations bureaucracy.

How likely are these motivating goals to be achieved? 

Significant Reduction of Carbon Dioxide Emissions

Most economists and independently knowledgeable scientists and political leaders agree that reducing CO2 emissions to a level that would have measureable effect on the climate (assuming that CO2 has noticeable effect on climate) is not realistically possible in the foreseeable future. Many Environmental activist leaders admit that it is too late, in their estimation, to avoid seriously detrimental Global Warming. Yet the pressure to take radical, costly, and futile measures to reduce carbon emissions intensifies daily

De-Industrialization the Demise of Capitalism

The hope of the Climate Change Movement is that enough propaganda will terrify the general populations to the extent that they will rise up and demand that their Governments defer to The United Nations. My hope is that will never happen. It would result in an overthrow of Capitalism along with Democracy and self-determination in all developed nations of the world; surely this is an impossibility without Authoritarian One World Government, to which China, Russia, Germany, Great Brittan, Japan, and hopefully the United States and Canada would never agree without a Third World War. A war instigated  by whom? Greenpeace? World Wildlife Fund? Earth First? The Club of Rome? Sierra Club? The United Nations Army?

Yet Maurice Strong, said to be the primary power behind the UN throne, writes “Isn’t the only hope for the planet that the industrialized civilizations collapse?  Isn’t it our responsibility to bring that about?”

Depopulation

Hitler tried this and it turned out to be very unpopular. China had a drastic birth restriction scheme in place for decades with little effect. War has been the most efficient means of reducing populations throughout history, but the side effects are very disruptive and  nobody wants to do that anymore. The only hope is for someone to let loose a manmade super virus that could spread and infect people around the globe. Believe it or not, there are environmental radicals who propose this very atrocity.

So, while it seems unlikely that the Climate Change Movement will reach its ultimate goals, it is already causing serious damage to the rational world, and it is sure to get worse before it gets better.    

 

 

 

 

 

 

 

 

 

Housing Crisis

The news media churns out tens of thousands of words each day covering what they have termed the “Housing Crisis,” but no one actually explains the true nature of the situation. The problem is simply that the price of homes becomes too high. This is not a new or unusual event. Those who work in the housing industry over time, see a housing bubble mature and burst about every ten years. The causes are well known and the bubble bursts are somewhat predictable and entirely inevitable. Reporters, investors, and politicians seem unable to grasp the simple truth that there is a price above which buyers cannot continue to buy. At the high point of the bubble, prices are so high that the only sensible reason for buying a house at all is the expectation that the buyer will be able to sell it for even more than he paid in a year or two. When that expectation proves invalid, the housing market fails.

That critical expectation becomes invalid when the price of the lowest tier of the housing market begins to exceed the financial capability of the first time buyers to qualify for a mortgage. First time buyers are people of modest income who buy older, smaller, modest homes. When the first time buyer can no longer buy, the second time buyer, who purchases newer, larger, less modest homes, cannot sell his first time home and therefore cannot buy either. When that happens, the third time buyer, who buys new, large, more opulent homes, cannot sell his second time home and so cannot buy. The market is now in full stall. The Developer of the new, large, opulent homes finds himself stuck with multimillions of debt tied up in homes that he cannot sell. He has no choice but to drop the price of his unsold new homes, hoping to unload them for enough to bail himself out.

But once the price of new homes begins to drop, the expectation becomes that the price will continue to drop. This is a self fulfilling expectation. Now, few if any of the three tiers is willing to buy because any purchase that he makes now may be worth less in a few weeks or months. And so the market continues in full stall with the price of all three tiers of homes dropping alarmingly, but still not selling. The banks and mortgage companies are now major contributors to the continuing stall because they are reluctant to take on mortgages for the same reason that the buyers are reluctant to buy. Eventually, the prices drop to the point that the first time buyer perceives that a bargain price has been reached and he can now easily qualify for a loan; historically this occurs at about 20% to 25% below the bubble bursting prices. With median prices at four or five hundred thousand dollars at peak, this is a value loss in the neighborhood of one hundred thousand dollars on each of millions of homes. Crisis.

While this is a much simplified analysis, it is essentially what happens every decade or so in the housing market, at least it has happened so over the past forty years. This time, however, it is an unusually severe “Crisis”. Several factors have made it more difficult. First of all, banks and savings and loans are no longer the only providers of mortgages. Many mortgages are now written by Mortgage Brokers who initiate the loans and then sell them to a secondary market such as Fannie Mae or Freddie Mac. The secondary market has expanded as well. Now, groups of mortgages are bundled together and sold as financial instruments similar to bonds. These mortgage backed investments, or securities, are bought by a variety of entities such as hedge funds, investment banks, and even individual investors. Thus, the formerly close relationship between buyer and lenders is broken. The broker who originated the mortgage is not that worried about either the buyer or the ultimate holder of the mortgage. His self interest is in making as many loans as he can sell to the secondary market. The result has been the financing of homes beyond the capacity of many buyers to sustain in the face of any economic slowdown. Secondly, all of this is compounded by the explosion of variable interest loans. Even if an economic slowdown is mild, an unaffordable increase in interest, therefore in mortgage payments, is often built into the so-called sub-prime loans.

Some politicians are calling for the government to bail out home owners who are overextended, in some way. This would be a fundamental mistake. The result would be the prolonging of the correction of the original problem, which is over priced housing. While we can sympathize with home owners who are losing equity in their homes, it should be realized that much of this equity is only on paper. Home owners who bought upscale (or refinanced to get cash out of their homes), were usually taking advantage of excessive appreciation of their former home. In the long run, the most important element of the housing market is that families should be able to buy a home at an affordable price that does not consume all their resources.

For this to happen there must always be an adequate supply of new homes for sale at reasonable prices. In order for this to be realized, developers must be able to buy land at reasonable prices and acquire the necessary permits in a timely manner. Cities and counties must find other ways to finance capital improvements rather than imposing all the costs on new housing. Developers must avoid offering more and more incentives to cities and counties in order to gain approval for their projects or to change zoning and permit home building in areas where it is not wanted. In the 1940’s and 50’s, the utility companies would often install water mains, power transmission poles and wiring, gas mains and other infrastructure in subdivisions at their own expense and recover the cost in the new business. Cities and counties would often construct sidewalks, curb and gutter, street paving, and storm drains in the expectation of recovering the cost in the property taxes of the new homes. Now, developers of new housing must pay all these costs, and many more, often at excessive prices. If a developer needs to move existing power poles for his project, the power company will often charge as much as ten thousand dollars per pole. Most of the utility companies charge excessive fees to developers of new housing.

No one actually has much incentive to resist higher and higher prices on new home construction. Developers know that they can jack up the prices of the new homes to cover the excessive costs. Cities and counties force the price of new homes up by requiring developers to pay for capital improvements often unrelated to the new homes and then levy taxes in accordance with the supposed value or selling price of the new homes. New home buyers offer little resistance to higher prices because they have made a killing on the excessive appreciation of their last home and they expect to do the same on the new home. The higher prices of new homes brings the price of existing homes along in lock step. And so the cycle goes until the next housing bubble burst.

Since it is unlikely that land owners, developers, cities, counties, utility companies, and new home buyers are going to change their ways anytime soon, the best the government can do is to mitigate the severity of the inevitable housing bubbles by restraining the secondary mortgage market. Perhaps regulations could require minimum standards for all mortgages that banks are now required to honor indirectly through banking regulations. Elimination of zero to fifteen percent down payment loans would help by restraining first time buyers until they are financially able to handle a mortgage through slow economic times. Outlawing mortgage insurance would help secondary lenders focus on the true value of the mortgage they are buying. Variable interest rate loans are especially pernicious. They entice unqualified buyers to overextend themselves by offering low initial payments. The enticement works because the buyer expects that his purchase will always appreciate so if the interest goes up too much, he can sell or refinance. Making mortgages harder to qualify for will indirectly restrain unwarranted appreciation and therefore prices as well.

All this flies in the face of the notion that, since everybody should be able to own their home, financing should be as liberal as possible, an idea blessed by conservatives as well as liberals. Possible, is the operative word. A proper goal would be: everyone should be able to buy a home at an affordable price as a place to live rather than as an investment. As long as everyone is speculating, landowners, developers, mortgage brokers, and new home buyers, the housing “crisis” will continue to occur periodically.

Basic Economics

The various forms of government are fundamentally philosophies of economics. Some forms are more successful than others are. If success is defined as the highest standard of living for the most people, then Democracy/capitalism/free market/free enterprise is the most successful by far. The reason is simple: capitalism conforms to human nature. It takes advantage of our greed and our altruism. It harnesses our greed by driving us to work hard, use our ingenuity, invent, create, save, conserve, accumulate, and cooperate with each other in order to satisfy our material desires and our craving for entertainment and leisure as well as for security. It harnesses our altruism by revealing to us that prosperity is not a zero sum game. The better off our friends and neighbors are, the better off we are. The better we understand our friends and neighbors, the better we understand the world we live in and we use that understanding to prosper ourselves, and so the better we work together, the more we prosper. In addition to harnessing our greed and altruism, Capitalism takes full advantage of our natural, inborn competitiveness. While we want others to be well off, more than anything else, we want ourselves to be even better off. As they say on Wall Street, greed is good.

Successful as it is, capitalism does have some down sides. Those who are incapable of competing, who are handicapped mentally, emotionally, or physically, fall behind. Most prosper according to their abilities. Because abilities vary greatly, some become excessively wealthy and some unacceptably poor. Luck and happenstance play a part in relative wealth. Inequalities occur. Capitalism also has a strong tendency to promote materialism to the detriment of aesthetics. The beauty of our world and life itself can sometimes be overshadowed by the compelling drive of capitalism to sell each other things that will enhance our own affluence. It is the great challenge of modern society to control capitalism/free markets/free enterprise so that inequalities remain tolerable and so that we maintain as much of our humanity as possible.

This control of capitalism, while necessary and desirable, must be applied carefully because, in spite of its seeming power and robustness, capitalism is also fragile and corruptible. Many of the economic problems we face from day to day are the result of unwise attempts to control capitalism’s flaws. Most of the problems caused by attempted controls result from misunderstanding the fundamental rules of capitalism. These rules are not especially complicated or hard to understand, but some of them are counter intuitive and they are all immutable. Controls based on wishful or intuitive thinking, which attempt to change or challenge these rules will always result in corrupting the system, sometimes beyond repair. The basic rules are as follows:

1) The going price of any product or service is primarily the result of demand and modified by supply, not by the cost of producing the product or providing the service as would be expected.

2) The cost of producing the product or providing the service eventually rises or falls to approximate the price.

3) In the absence of price competition and buyer resistance, both price and cost will rise to consume all funds available to pay for the product or service.

4) When a product or service is paid for, not by the consumer, but by a third party, buyer resistance is rendered ineffective and price competition is severely compromised.

5) When a product or service is perceived as essential to a minimum quality of life, or as an entitlement, and is paid for by third parties, both price competition and buyer resistance are nullified. As a result, both price and cost will rise to unsustainable levels.

6) In economics, perception is reality and cannot be overcome.
The above rules lead to the following conclusions:

a) Cost can be controlled only by controlling price.

b) Price can be effectively controlled only by price competition and/or buyer resistance.

As a result: Regulations must always be conducive to maintaining pricing competition.

1) The quantity or availability of a product or service must not be restricted by regulation. Regulation can control quality, safety, environmental impact, mode of distribution and unfair business practices. These types of regulations, uniformly applied to all competing providers, may impact price, but not pricing competition.

2) Excessive consolidation of suppliers of products or of services must be regulated. The number of independent providers must be such that pricing competition is maintained.

3) No provider of products or services can be allowed to gain control of raw materials or sub-suppliers.

4) Providers must not be allowed to conspire to control prices or create false shortages.

Regulations must avoid subversion of buyer resistance and price competition through insurance.

1) Primary or full payment by a third party must be discouraged.

2) Buyer must pay an initial percentage of the cost of any product or service.

3) All insurance must have a substantial percentage deductible. Full coverage should not be allowed. Supplemental insurance undermines buyer resistance.

4) The incentive for insurance companies to drive prices to unaffordable levels should be recognized and controlled.

5) Collusion among insurers must be controlled.

Misunderstood Motives

This morning, I was listening to a television news commentator, Stuart Varney, explaining why, in his opinion, Barak Obama is pushing the Global Warming agenda to the extent that the economy is suffering unnecessarily, and is opposing needed development of oil and gas resources in the face of growing problems in the middle east. Stuart opined that it made no sense to appease the environmentalists to this extent because they represented only a modest voting bloc, and that just as much campaign funding could be obtained from oil interests. His conclusion was that Obama is a true believer in the Global Warming nonsense, and expects to save the world from catastrophic climate change through undermining the oil and coal industries. I was appalled that someone of Varney’s stature and sophistication is apparently clueless regarding the far left’s long term agendas. Obama, the nominal leader of the far left and modern progressives, is indeed, a witting proponent of the transparent propaganda of the UN’s IPCC. Neither Obama nor the IPCC believe the climate change propaganda; they only invented the global warming sham to further their own much broader agendas.

Alternately, Stuart speculated that Obama sees himself as a transformative President; transforming the world from fossil fuels to green energy sources. He is partly right about that; Obama’s goal is to transform The United States, but from a free market democracy into a socialist, redistributionist government. The first step in this transformation is to bring the government so close to bankruptcy that entitlements and public debt can be repudiated. The second step is to achieve governmental control of energy sources through carbon tax, environmental restraints, and regulations, thereby gaining control of commerce, industry and transportation. The public, first brainwashed through the fear of climate change can then be brainwashed into compliance with, in effect, a benevolent dictatorship government.

I understand that, in these broad terms, it is difficult not to dismiss this idea as right wing paranoia. I do not claim that this is a fully developed and mature strategy, agreed in detail by all participants. It is more a general direction in which many statist philosophies are inclined to look. The sinister aspect of this generalization is that well financed and extremely motivated individuals, and organizations, while small in numbers, are having powerful influences on the political beliefs of the general populace.

These individuals and organizations have intentions to take statist policies far beyond most liberal and leftist ideas of proper government. If these intentions were to be fully realized, we might see the end of Medicare and Medicaid, first phased into a single payer, universal medical system, then dissolved into a government operated medical bureaucracy with doctors and other medical professionals working on salary directly for the government, similar to the Veterans Administration. Social Security might go away, replaced by government provided housing for seniors, including government provided food, clothing and burial expenses. Population reduction will be an important agenda, as will deindustrialization, deurbanization, and centralization of government and law enforcement. Private pensions may be confiscated and public pensions refuted.

One of the masterminds of this new world is a man named Maurice Strong. He has been the most powerful leader in the United Nations bureaucracy for many years. He is behind the UN’s IPCC (International Panel on Climate Control), whose mission it is to control public thought and political policy through the threat of disastrous Global Warming and Climate Change. The ingenious (and false) pseudo-scientific proposition that Carbon Dioxide controls the world’s climate and that the burning of fossil fuels by humans is radically changing the world’s climate has already gained wide acceptance in private and political thinking. It is extremely troubling that an idea so much in opposition to geologic history, main stream scientific knowledge, and common sense could become accepted as fact. It reinforces the idea that a large population of humans can be convinced of any lie, no matter how unlikely, if the lie is repeated often enough by supposedly credible sources.

Maurice Strong, and many like-minded, and powerful individuals have become convinced that world population is about to spiral out of control and that free market capitalism has created an unsustainable civilization that is destroying the worlds environment. They strive to de-industrialize, and depopulate the civilized world, returning the planet to near prehistoric conditions before rebuilding in their vision of a perfect, socialistic society. That is not to say that any of these individuals (including Barak Obama), or organizations believe this can be achieved in one lifetime. These are long term goals to be accomplished by like-minded descendants.

This might not be the world you would prefer that your children and grandchildren live in, but at this point, it seems inevitable. If Stuart Varney couldn’t see it coming, what chance is there that a voting majority ever will.

Quote by Maurice Strong, a billionaire elitist, primary power behind UN throne: “Isn’t the only hope for the planet that the industrialized civilizations collapse? Isn’t it our responsibility to bring that about?”
Quote by Ban Ki-Moon, UN Secretary General: “A deal must include an equitable global governance structure. All countries must have a voice in how resources are deployed and managed.”
Quote by Jacques Chirac, former French President: “For the first time, humanity is instituting a genuine instrument [Kyoto Protocol] of global governance,”…”By acting together, by building this unprecedented instrument, the first component of an authentic global governance, we are working for dialogue and peace.”
Quote by Hans Joachim Schellnhuber, architect of the new Germanic masterplan, the ‘Great Transformation’: “Either the Earth System would undergo major phase transitions as a result of unchecked human pressure on nature’s capacities and resources or a “Great Transformation” towards global sustainability would be initiated in due course. Neither transitions nor transformations will be manageable without novel forms of global governance and markets…
“Quote by UN’s Commission on Global Governance: “Regionalism must precede globalism. We foresee a seamless system of governance from local communities, individual states, regional unions and up through to the United Nations itself.”
Quote by Club of Rome: “…the resultant ideal sustainable population is hence more than 500 million people but less than one billion.”

Economic Realities and Obama Care

1) While the price of any product or service is primarily the result of supply as modified by demand, the cost of producing the product or supplying the service always rises or falls to approach this price.

2) In the absence of price competition and buyer resistance, both price and cost rise to unsustainable levels.

3) When a product or service is primarily paid for, not by the consumer, but by third parties, buyer resistance is rendered ineffective and price competition is severely compromised.

4) When a product or service is perceived as essential to a minimum quality of life, or as an entitlement, and is paid for by third parties, both price competition and buyer resistance are nullified and both price and cost will rise to unsustainable levels.

5) In economics, perception is reality.

6) When a product or service is perceived as essential or an entitlement, is paid for by a third party and the price and cost have risen to an unsustainable level, it is difficult or impossible to significantly reduce the price and cost without severe disruptions to the availability of the product or service. Therefore, if more funds and taxes are applied to Health Care, they will be quickly absorbed by increased costs; stability will not be achieved by increased funding.

Just understand, I am not supporting Obamacare for several reasons. It is far too large and invasive for any government bureaucracy to implement and manage. Like most governments programs, it tries to do too much too quickly. Like all governments programs, it starts with good intentions, then over manages with detailed regulations. It was intentionally misrepresented to the voting public, and to many members of congress in order to gain support.

Having said that, I think The Affordable Care Act attempts to address the two most critical problems that are causing the cost of Health Care in America to spiral out of control. These problems are: lack of pricing competition, and lack of buyer resistance. Price can be effectively controlled only by price competition and/or buyer resistance, and cost can only be controlled by controlling price.

Obamacare attempts to address pricing competition in several ways. By including all medical services in all insurance plans, eliminating prior condition considerations, and keeping only co-pays and deductibles as variables, insurance providers are more directly competitive so that premiums will be based more on the size and health of the population they can attract as subscribers, and the prices they can negotiate with medical providers (doctors, hospitals, laboratories, and drug providers). This gives insurance providers more incentive to pressure hospitals to find ways to reduce prices, and to price premiums to attract as wide a cohort of subscribers as possible. Obamacare also mandates a larger population of subscribers making it feasible to lower prices.

Buyer Resistance is almost completely eliminated in the present system because most people have insurance paid for by their employers and with minimum deductions and co- payments. The Affordable Care Act discourages minimum deductions and co-payments, and encourages subscribers to lower premium payments by accepting higher out of pocket costs. This reduces risk and costs to insurance providers, and more importantly, it provides incentive to subscribers to shop for lower costs (lower out of pocket outlays), and to avoid unnecessary medical procedures and doctor visits. This last could, by itself, reduce overall Health Care Costs to a very substantial degree Some will argue that these policies will be detrimental to the health of some people, but I reply that any lack of health care will be self imposed. I submit that people desperately need to become more self reliant and less dependent on government. In any case, something has to change. Health insurance is now mostly unaffordable and it is rapidly getting more so.

Presidential Aspirations

As I watch the Alice in Wonderland like dramas of the Obama Administration play out day to day, I wonder at the blind ambition that compels any man to seek the Presidency of the United States. It’s not as if being elected President is the result of thoughtful assessment of the candidate’s character and intellect, or his wise political philosophy, by a discerning majority of sincere and dedicated voters. Instead it is the result of an enormously costly popularity contest in which any deception or outright lie is expected and accepted so long as it is beneficial to the prejudicial inclinations of some of the voters. The voters often elect the most artful liar, or the most free spending candidate, usually to the detriment of wise self-government. I see little to enhance a person’s self esteem in this shoddy process.

Once elected, the President typically is forced to articulate ever blacker and more outrageous lies in order to appease the disparate cohort that financed his campaign and voted him into office. But now, his lies are parsed down to the last syllable by a loyal opposition who are expert in portraying the slightest deviation from the iron clad TRUTH as flagrant and deliberate prevarications of the most dangerous and un-American kind. Not only that, but what he does not say is similarly analyzed and construed in any way that will be perceived to his detriment. Even when he attempts to tell the exact truth, the opposition will find a way to interpret his remarks to his disfavor.

When a President has a good idea or policy, it is usually rejected by the opposition merely because it is his idea and to welcome it would seem to support him, a perception to be avoided at any cost. The opposition we speak of includes all of those who did not vote for him, and some who did, which often means a majority of the population.

From the above, it would seem that I consider Presidential lying to be an avoidable evil. In fact I believe that, while lying may be evil, it is also unavoidable if anything is to be accomplished. A majority of the President’s supporters as well as of the general population will not agree to any policy or proposed legislation if all the facts, warts and all, are accurately presented. This is because it is impossible to invent a policy that is acceptable to every, or even most, political factions.

The most powerful example of this conundrum is the Affordable Care Act, or Obamacare. So many lies, half-truths, and misrepresentations were presented by the President on nationwide television for the purpose of attracting enough votes to pass it have been exposed as the ACA was implemented, that the public is understandably disheartened. The President’s opponents have left no stone unturned to insure that every voter who has access to television has personally witnessed the President telling bald-faced lies.

As if this were not enough to completely discredit the President, the inept, amateurish, and premature implementation of Obamacare has exposed the incredible lack of foresight and planning supporting this intrusive, massive, camel-like piece of legislation. Much of this failure can be attributed to the need to get this controversial revision of healthcare fully implemented before the next election, after which the required congressional votes may no longer be forthcoming.

Another indication of the haste with which Obamacare was cobbled together is the inordinate expense charged to the construction of the failed website, which was to be the key access to the insurance companies. The cost of this website has been reported as 400 to 600 million dollars, an unbelievable amount to spend for an internet portal which is less complex than those operated by Amazon and many other retailers.