I'm reading a lot about how the free markets have failed and how we need to change this or that. In order to arrive at that conclusion you'd have to be either intellectually dishonest, ignorant, or possibly both. It's convenient to blame the current economic struggle on the failure of the "free market", however the market we have is neither free nor would it be a failure for a truly free market to experience periods of economic contraction. First of all a free market implies that there is an absence of external manipulation; with Congressional bailouts and the Federal Reserve tinkering with interest rates our market is anything but free. In fact it is the very actions of Congress and the Federal Reserve that led to the economic crisis we are now suffering. Second, in a free market excesses and malinvestment are corrected through a cleansing that comes with a contraction in the economic cycle, any attempt to intervene only postpones and increases the severity of the correction. Third, it is asinine to assume a system as complex as the US economy could be manipulated without unforseen consequences which may be more detrimental than those initially feared.
It's interesting (at least to me) that our grandparents are regarded as the "Greatest Generation"; largely because of their sacrifice during WW2 as well as the subsequent prosperity our nation enjoyed following their victorious return. They also experienced first hand the calamitous consequences of the Great Depression and responsibly saved and skimped for the remainder of their lives in preparation for the next round should it ever occur. Simply put: they experienced adversity, learned from it, and as a result were better prepared than previous generations.
It's understandable to avoid adversity and protect loved ones from the same, one possible concern being that experience is an excellent educator and as a nation we have been skipping classes for two generations. It is precisely this tendency for present day Americans to avoid hardship, demand assistance, and willfully acquiesce liberty that resulted in an economy built on consumer spending and consumption rather than saving and production. Throw in a fiat currency and a government that is willing and able to pass laws to "protect" it's citizens and you have the recipe for an economic time bomb.
Perhaps it's a bit conspiratorial, but I think the chaps in Washington don't want self sufficient citizens, the kind who can't be bribed with handouts in exchange for votes; its better for them to have a bunch of ignorant simpletons who need entitlements to survive. How else would you explain an unlimited annual tax deduction on mortgage interest and an annual cap of $5000 on retirement savings?
Would you rather be and ignorant simpleton or a thinking citizen?
-Joe
Friday, November 27, 2009
Thursday, October 1, 2009
End the Fed...and a related discussion.
Brian sent out an email with a link to this video, I wanted to post it here so that everyone could join in on the discussion that started brewing. I've integrated the disqus commenting system so hopefully it will add the the quality of our discussions.
-Joe
-Joe
Friday, September 25, 2009
the unseen cost of consumerism
The cost of consumerism is more than just the money wasted on unnecessary gadgets, trinkets, and toys. Perhaps the most egregious cost to bear is the misplaced capital, research, engineering, and production that would otherwise be dedicated to more meaningful products. By consuming "junk" we are signaling to manufacturers (both domestically and abroad) to allocate their production capacity as well as research and development to items of questionable value. For every widget that is conceived, produced, and purchased for consumption, valuable resources were expended that otherwise could have been directed to more meaningful endeavors. Initially this shift in resources may seem benign until one considers the absolute cost of such waste. Literally hundreds of billions of dollars are spent annually on products that provide little to no lasting value, are destined for a landfill, and are frequently toxic.
In addition to the misapplication of production capacity there are additional costs as well. Money aside, the hours and mind power spent accomplishing something of little enduring value has to be acknowledged and accounted for. This energy if redirected and focused on some worthy (I'll let you decide what that might be) cause would pay enormous dividends to current and future generations. What if a significant number of television viewers decided to volunteer their time towards a social cause for just an hour a week? How many man hours would that tally to? At some point in history the quest improve life reached an inflection point shifting from a positive reduction in labor and time to what we have today where even the poorest (at least in the United States) will fritter away valuable time on useless gadgets, games, and television programming. At no other point in recorded history have we had the ability to waste the way we do presently. Perhaps some of it stems from ignorance or even apathy; either way the fact remains that millions of people starve to death each year while the developed world throws away cheap toys from fast food kids meals. No mentally healthy human being would allow another human to die in exchange for a (insert useless item here) yet that is precisely what we are doing. Just today I received a request from World Vision asking for as little as $27 to provide medicine for children who will likely die without it. What have you spent $27 or more on in the last week that had the potential to so profoundly impact a life?
We have the capacity to eliminate much of the suffering throughout the world by simply reallocating how we direct our resources. What's wrong with us?
-Joe
In addition to the misapplication of production capacity there are additional costs as well. Money aside, the hours and mind power spent accomplishing something of little enduring value has to be acknowledged and accounted for. This energy if redirected and focused on some worthy (I'll let you decide what that might be) cause would pay enormous dividends to current and future generations. What if a significant number of television viewers decided to volunteer their time towards a social cause for just an hour a week? How many man hours would that tally to? At some point in history the quest improve life reached an inflection point shifting from a positive reduction in labor and time to what we have today where even the poorest (at least in the United States) will fritter away valuable time on useless gadgets, games, and television programming. At no other point in recorded history have we had the ability to waste the way we do presently. Perhaps some of it stems from ignorance or even apathy; either way the fact remains that millions of people starve to death each year while the developed world throws away cheap toys from fast food kids meals. No mentally healthy human being would allow another human to die in exchange for a (insert useless item here) yet that is precisely what we are doing. Just today I received a request from World Vision asking for as little as $27 to provide medicine for children who will likely die without it. What have you spent $27 or more on in the last week that had the potential to so profoundly impact a life?
We have the capacity to eliminate much of the suffering throughout the world by simply reallocating how we direct our resources. What's wrong with us?
-Joe
Thursday, September 10, 2009
How to pay for health care
It appears to be fashionable these days to complain about the status and cost of health care in America. At the risk of being labeled an apologist for the insurance industry (yes I despise them too, but I'll save that for a future post) a few inconsistencies struck me as odd. Primarily, I'd like to know how it is that people are unable afford health insurance yet are able to afford some or all of the following items:
Is it really a mystery that people who eat nutritionally deficient food, stare at a television for hours each day, and get little to no physical exertion end up sick?
Clearly health care needs to be reformed, (although it's laughable to think that a bureaucratic albatross like our federal government is going to come up with a cheaper and more efficient system than we currently have) is it too Polly-Anna to believe we would collectively save more money and be healthier by simply changing our own habits first?
It' s easy to complain about the cost of insurance, but much harder (and more effective) to change our own behavior.
-Joe
- cell phones
- large screen televisions
- cable television (the big screen just isn't cool without digital cable)
- high speed internet access
- multiple vehicles
- fast food
- iPods
- computers
- cigarettes
- alcohol
- soda
- candy
- movies
- home theater systems
- vacations
- gym memberships
- video games
Is it really a mystery that people who eat nutritionally deficient food, stare at a television for hours each day, and get little to no physical exertion end up sick?
Clearly health care needs to be reformed, (although it's laughable to think that a bureaucratic albatross like our federal government is going to come up with a cheaper and more efficient system than we currently have) is it too Polly-Anna to believe we would collectively save more money and be healthier by simply changing our own habits first?
It' s easy to complain about the cost of insurance, but much harder (and more effective) to change our own behavior.
-Joe
Sunday, August 2, 2009
consistent men
In an effort to pare down my library of books and make room for new volumes I have been listing duplicates, previously read, and books I no longer want for sale on Amazon. Interestingly enough I came across this passage from a 1st edition 1947 printing of Kenneth Roberts book "Lydia Bailey." Needless to say, it is no longer on the Amazon sell list.
"I'm not over-enthusiastic about books that teach or preach, but I may as well admit in the beginning that my primary reason for writing this book was to teach as many as possible of those who come after me how much hell and ruin are inevitably brought on innocent people and innocent countries by men who make a virtue of consistency.
All the great villains and small villains whom I met so frequently in the events I'm about to set down were consistent men-unimaginative men who consistently believed in war as a means of settling disputes between nations; equally misguided men who consistently believed that war must be avoided at all hazards, no matter what the provocation: narrow men who consistently upheld the beliefs and acts of one political party and saw no good in any other; shortsighted men who consistently refused to see that the welfare of their own nation was dependent up on the welfare of every other nation: ignorant men who consistently thought that the policies of their own government should be supported and followed, whether those policies were right or wrong; dangerous men who consistently thought that all people with black skins are inferior to those with white skins; intolerant men who consistently believed that all people with white skins should be forced to accept all people with black skins as equals. And I know that any nation that cannot or will not avoid the dreadful pitfalls of consistency will be on e with the dead empires whose crumbling monuments studded our battlegrounds in Haiti and in Africa."
It's not often that I read fiction, however I'll be making an exception in this case.
-Joseph Graves
"I'm not over-enthusiastic about books that teach or preach, but I may as well admit in the beginning that my primary reason for writing this book was to teach as many as possible of those who come after me how much hell and ruin are inevitably brought on innocent people and innocent countries by men who make a virtue of consistency.
All the great villains and small villains whom I met so frequently in the events I'm about to set down were consistent men-unimaginative men who consistently believed in war as a means of settling disputes between nations; equally misguided men who consistently believed that war must be avoided at all hazards, no matter what the provocation: narrow men who consistently upheld the beliefs and acts of one political party and saw no good in any other; shortsighted men who consistently refused to see that the welfare of their own nation was dependent up on the welfare of every other nation: ignorant men who consistently thought that the policies of their own government should be supported and followed, whether those policies were right or wrong; dangerous men who consistently thought that all people with black skins are inferior to those with white skins; intolerant men who consistently believed that all people with white skins should be forced to accept all people with black skins as equals. And I know that any nation that cannot or will not avoid the dreadful pitfalls of consistency will be on e with the dead empires whose crumbling monuments studded our battlegrounds in Haiti and in Africa."
It's not often that I read fiction, however I'll be making an exception in this case.
-Joseph Graves
Saturday, July 18, 2009
Words of wisdom
Excellent insight into the housing/financial crisis, remarkably so given that is was first published in 1946, excerpted from the book "Economics in One Lesson," by Henry Hazlitt
"The Case against government-guaranteed loans and mortgages to private businesses and persons is almost as strong as, though less obvious than, the case against direct government loans and mortgages. The advocates of government-guaranteed mortgages also forget that what is being lent is ultimately real capital, which is limited in supply, and that they are helping identified (person) B at the expense of some unidentified (person) A. Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to "buy" houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in the long run they do not increase overall national production but encourage malinvestment."
Every person in America should read this book, but at the very least all elected and appointed officials. I wonder if it would have made a difference in our economy over the last 50 years?
-Joe
"The Case against government-guaranteed loans and mortgages to private businesses and persons is almost as strong as, though less obvious than, the case against direct government loans and mortgages. The advocates of government-guaranteed mortgages also forget that what is being lent is ultimately real capital, which is limited in supply, and that they are helping identified (person) B at the expense of some unidentified (person) A. Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to "buy" houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in the long run they do not increase overall national production but encourage malinvestment."
Every person in America should read this book, but at the very least all elected and appointed officials. I wonder if it would have made a difference in our economy over the last 50 years?
-Joe
Friday, July 17, 2009
Do you deserve liberty?
We are barely seven generations removed from what I consider to be the "greatest generation." The founding fathers, brothers, and sons who suffered immeasurably; sacrificing their lives, comfort, and wealth to make possible the freedoms that we, their spoiled and ignorant posterity now freely discard.
I cringe each time I hear someone state "I don't get involved in politics" or other similar comment as if it were a display of virtue. I estimate many, if not most Americans spend more time in front of a television on a single weekend than they spend all year learning about government, politics, or just plain thinking. The American dream once stood for the opportunity to pursue happiness, along with the other unalienable rights of Life and Liberty. Our system of government was intended to give people the freedom to live as they wished, provided it didn't impinge on the unalienable rights of others. That opportunity is no longer a reality.
Greed, selfishness, and good intentions have all convoluted the intentions of the leaders who birthed our country. Democracy only works if citizens are both educated on the workings of government and are respectful of the rights of others. Uninformed citizens, or the "mob" as H.L. Mencken referred to them, will almost always regress to the lowest common denominator, electing and voting their way to ignorant oblivion. Which, if not for the rest of the population being taken down with them is not disadvantageous. Alexis de Tocqueville remarked "Democracy in America is doomed when the people learn to vote themselves money from the public trough...", something we've increasingly been doing since the New Deal, plunging our country into deeper debt, and ultimately abdicating our freedoms in the process.
We do not need more laws or regulation, bailouts or cash for clunkers, and perhaps most importantly we do not need to make the world safe for democracy. What would be constructive is for citizens to be responsible for themselves and allow others to do the same. What are you doing (or are going to do) to become a productive member of our country and attempt to slow the devolution of our society. Democracy needs virtuous people to survive, are we too far gone?
-Joe
I cringe each time I hear someone state "I don't get involved in politics" or other similar comment as if it were a display of virtue. I estimate many, if not most Americans spend more time in front of a television on a single weekend than they spend all year learning about government, politics, or just plain thinking. The American dream once stood for the opportunity to pursue happiness, along with the other unalienable rights of Life and Liberty. Our system of government was intended to give people the freedom to live as they wished, provided it didn't impinge on the unalienable rights of others. That opportunity is no longer a reality.
Greed, selfishness, and good intentions have all convoluted the intentions of the leaders who birthed our country. Democracy only works if citizens are both educated on the workings of government and are respectful of the rights of others. Uninformed citizens, or the "mob" as H.L. Mencken referred to them, will almost always regress to the lowest common denominator, electing and voting their way to ignorant oblivion. Which, if not for the rest of the population being taken down with them is not disadvantageous. Alexis de Tocqueville remarked "Democracy in America is doomed when the people learn to vote themselves money from the public trough...", something we've increasingly been doing since the New Deal, plunging our country into deeper debt, and ultimately abdicating our freedoms in the process.
We do not need more laws or regulation, bailouts or cash for clunkers, and perhaps most importantly we do not need to make the world safe for democracy. What would be constructive is for citizens to be responsible for themselves and allow others to do the same. What are you doing (or are going to do) to become a productive member of our country and attempt to slow the devolution of our society. Democracy needs virtuous people to survive, are we too far gone?
-Joe
Friday, March 13, 2009
cramer vs stewart
my comments are below the video.
for anyone who listened to cramer in the past, his candid 2006 comments should come as no surprise. the guy ran a hedge fund managing billions of dollars for institutions, pensions, and the very wealthy. he did not (and should not) serve the average investor.
stewart presents himself as a man of the people, yet it concerns me how he's directing his anger; at a television channel. a freaking television channel. perhaps more disturbing than stewarts misplaced anger is that people actually took cramer seriously. he's obviously intelligent and in the right arrangement his advice could be of value, but on his television program "Mad Money" he is an entertainer, nothing more. stewart knows as much as anyone what drives television programming; advertising. networks make money from advertisers, the more outrageous cramer acts (or anyone else for that matter), the more people who will watch. if more people watch, cnbc (or any other network) can charge more for advertising, plain and simple. there is nothing in the formula about being truthful or honest or on the side of the public; those are just fringe benefits if they happen to work out.
have we as a nation lost our ability to accept responsibility for our own destiny? i believe the american form of government crafted over 200 years ago was designed to give us just that, the opportunity to forge our own way, to work to improve our station, or not. somewhere along the journey we lost our direction, changed our course and asked a government to take care of us; an ironic twist of serve the servants. perhaps we've lost the skills necessary to navigate life without regulation and oversite, dependent on beauracracy to protect us from ourselves.
next time you hear of a financial scandle ask yourself, "how could the victims have protected themselves"? if the only answer you come up with is government regulation.....we might be too far gone.
-joe
for anyone who listened to cramer in the past, his candid 2006 comments should come as no surprise. the guy ran a hedge fund managing billions of dollars for institutions, pensions, and the very wealthy. he did not (and should not) serve the average investor.
stewart presents himself as a man of the people, yet it concerns me how he's directing his anger; at a television channel. a freaking television channel. perhaps more disturbing than stewarts misplaced anger is that people actually took cramer seriously. he's obviously intelligent and in the right arrangement his advice could be of value, but on his television program "Mad Money" he is an entertainer, nothing more. stewart knows as much as anyone what drives television programming; advertising. networks make money from advertisers, the more outrageous cramer acts (or anyone else for that matter), the more people who will watch. if more people watch, cnbc (or any other network) can charge more for advertising, plain and simple. there is nothing in the formula about being truthful or honest or on the side of the public; those are just fringe benefits if they happen to work out.
have we as a nation lost our ability to accept responsibility for our own destiny? i believe the american form of government crafted over 200 years ago was designed to give us just that, the opportunity to forge our own way, to work to improve our station, or not. somewhere along the journey we lost our direction, changed our course and asked a government to take care of us; an ironic twist of serve the servants. perhaps we've lost the skills necessary to navigate life without regulation and oversite, dependent on beauracracy to protect us from ourselves.
next time you hear of a financial scandle ask yourself, "how could the victims have protected themselves"? if the only answer you come up with is government regulation.....we might be too far gone.
-joe
Thursday, March 12, 2009
a healthy skepticism
trust. dictionary.com defines trust as the "reliance on the integrity, strength, ability, surety, etc., of a person or thing; confidence".
should we trust our government? if you examine and study the intentions of our nation's founding fathers i believe you will find they encouraged the opposite. why? perhaps because trust relaxes our natural defense mechanisms. if you trust someone or something there is no reason to be defensive or question their motives; trust implies confidence. to follow someone trust is essential, in military applications it's vital, in government it is devastating.
in his final speech as the president of the united states, dwight eisenhower stated "we should take nothing for granted. only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together". (emphasis mine) why would he take the occasion of his farewell address to implore the citizenry of our country in such a way? could it be that he foresaw the disastrous effects of misplaced trust in government? we must remain vigilant, educate ourselves, and hold elected officials accountable, apathy has led to our present state of affairs.
we as americans should mistrust anything coming from government, not as an act of civil disobedience but as patriots. by maintaining a healthy skepticism we are able to combat the special interests and career politicians who have absconded with our democracy. our constitution vests the power with us, the citizens of the united states and we have abdicated our responsibility and authority to the very government designed to serve us. rage against the machine said it best "you've gotta take the power back".
-joe
should we trust our government? if you examine and study the intentions of our nation's founding fathers i believe you will find they encouraged the opposite. why? perhaps because trust relaxes our natural defense mechanisms. if you trust someone or something there is no reason to be defensive or question their motives; trust implies confidence. to follow someone trust is essential, in military applications it's vital, in government it is devastating.
in his final speech as the president of the united states, dwight eisenhower stated "we should take nothing for granted. only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together". (emphasis mine) why would he take the occasion of his farewell address to implore the citizenry of our country in such a way? could it be that he foresaw the disastrous effects of misplaced trust in government? we must remain vigilant, educate ourselves, and hold elected officials accountable, apathy has led to our present state of affairs.
we as americans should mistrust anything coming from government, not as an act of civil disobedience but as patriots. by maintaining a healthy skepticism we are able to combat the special interests and career politicians who have absconded with our democracy. our constitution vests the power with us, the citizens of the united states and we have abdicated our responsibility and authority to the very government designed to serve us. rage against the machine said it best "you've gotta take the power back".
-joe
Sunday, March 8, 2009
the other side of the coin...
what could be wrong with a government stimulus designed to employ people, build infrastructure, and get the economy out of a recession? well just as there are two sides to a coin, there is also a flip side to any money a government proposes to spend, that's what. clearly for those in a direct line to receive the stimulus money there's an immediate benefit. with the income they're able to make purchases and support themselves, which in turn will benefit those businesses and people they patronize. so far so good, more jobs and people consuming again, where's the trade off?
in order to understand the ill effects of government stimulation we need to recall the source of the government's ability to stimulate: taxes. taxes imposed on other citizens and businesses who's income and purchasing power are proportionally reduced. in the best of cases the net effect would be zero, what is taken from one in the form of taxes, is given to another as a "stimulus". no net increase takes place, we are simply removing it from Peter in order to pay Paul. of course we aren't in the best of cases, and 100% of the levied taxes do not pass directly to the "stimulants", rather the government itself takes a piece in order to provide for it's own expenses. real money actually leaves the economic system!
worse yet is what is presently being done: taxes are not being increased to pay for the stimulus. the money is coming from the printing press and ultimately debt issued by the government. those saddled with the burden of paying our debt will be our children and our children's, children. it's like giving money to Paul and expecting Peter's kids and grand kids to pay it back! we are making it a little easier on ourselves and sticking our posterity with the bill.
so why do it? the simple answer is it's easier to ignore the ramifications of our present actions than to suck it up and deal with the problem now. politicians aren't elected when they talk about difficult decisions, as a nation we elect legislators who promise to give us something for nothing!
like most things that sound too good to be true, the governments ability to "fix" an economic recession is dubious. even if it worked (which it doesn't) the citizenry payed the bill not the suits in washington.
i'll finish with a quote from Thomas Jefferson, "If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy"
-joe
in order to understand the ill effects of government stimulation we need to recall the source of the government's ability to stimulate: taxes. taxes imposed on other citizens and businesses who's income and purchasing power are proportionally reduced. in the best of cases the net effect would be zero, what is taken from one in the form of taxes, is given to another as a "stimulus". no net increase takes place, we are simply removing it from Peter in order to pay Paul. of course we aren't in the best of cases, and 100% of the levied taxes do not pass directly to the "stimulants", rather the government itself takes a piece in order to provide for it's own expenses. real money actually leaves the economic system!
worse yet is what is presently being done: taxes are not being increased to pay for the stimulus. the money is coming from the printing press and ultimately debt issued by the government. those saddled with the burden of paying our debt will be our children and our children's, children. it's like giving money to Paul and expecting Peter's kids and grand kids to pay it back! we are making it a little easier on ourselves and sticking our posterity with the bill.
so why do it? the simple answer is it's easier to ignore the ramifications of our present actions than to suck it up and deal with the problem now. politicians aren't elected when they talk about difficult decisions, as a nation we elect legislators who promise to give us something for nothing!
like most things that sound too good to be true, the governments ability to "fix" an economic recession is dubious. even if it worked (which it doesn't) the citizenry payed the bill not the suits in washington.
i'll finish with a quote from Thomas Jefferson, "If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy"
-joe
Friday, February 27, 2009
fire up the printing press...
thanks to dan for passing this along...
it is possible to actually make money from the collapse of the dollar. more on this later.
-joe
it is possible to actually make money from the collapse of the dollar. more on this later.
-joe
Thursday, February 26, 2009
a little insight on the federal reserve
thanks to jay for this link...it's a little sensational but gets the message across: The Biggest Scam in History
obviously you don't understand...
i found this on bencasnocha.com apparently there are others having difficulty understanding how re-inflating the credit bubble is a solution to our economic woes.
this is how Ben introduced the video to his readers:
"Congressman Peter Stark (D - California) represents all that is great about American politicians: humility, wide-ranging and mature vocabulary, and a genuine warm-heartedness towards those interested in political issues.
Take his must-watch interview with libertarian Socratic Dialogue devotee Jan Helfeld discussing the national debt. Congressman Stark, tripped up after saying that a country's wealth increases as its national debt increases, tells the interviewer to "shut up." He then tries to end the interview by telling Helfeld to "get the fuck out of here or I'll throw you out the window."
-joe
"
this is how Ben introduced the video to his readers:
"Congressman Peter Stark (D - California) represents all that is great about American politicians: humility, wide-ranging and mature vocabulary, and a genuine warm-heartedness towards those interested in political issues.
Take his must-watch interview with libertarian Socratic Dialogue devotee Jan Helfeld discussing the national debt. Congressman Stark, tripped up after saying that a country's wealth increases as its national debt increases, tells the interviewer to "shut up." He then tries to end the interview by telling Helfeld to "get the fuck out of here or I'll throw you out the window."
-joe
"
Monday, February 23, 2009
home prices still too high according to...
Yale Economist Robert Schiller that's who. I was especially amused by the reminisce at the end of the video about the actions FDR took during the great depression to support agricultural prices.
-joe
-joe
Sunday, February 22, 2009
so that's the problem...
While listening to a podcast some time ago I heard the following comment: "the economy is suffering from a global savings glut", what struck me as odd was the use of the terms suffering and savings in the same sentence. I can think of many things I (we) suffer from, but a savings glut is not one of them. As I began to ponder that statement a few thoughts stuck in my mind:
I came to the conclusion that saving is only bad if your entire economic system is based on the expansion (artificial inflation) of money and credit (which ours is), but this is only partially true as someone will eventually benefit from all the spending and end up accruing some savings. In fact this does happen and it has a name: The Cantillon effect after economist Richard Cantillon. It turns out that the people who get the newly minted money and credit first are disproportionately benefited over those at the bottom of the barrel, in other words inflation hasn't set in for the first few recipients of the money (typically the politicallly well connected), however by the time the average citizen receives the money prices have already increased and at best any raise that may come from inflation will be to break even with the already inflated costs. Either the leadership of our country has been incredibly stupid the last 80 years or it was known that through the artificial expansion of credit and money supply, an increasing number of people would become dependent on the government. As it stands right now the primary political parties have no incentive to make the necessary long term corrections, especially if the citizenry remains largely ignorant.
The time for action is at hand, being a passive citizen will no longer suffice. We need to:
-Joe
- America doesn't save so our suffering must be limited to the effects of other nations saving.
- if we are in fact suffering because other nations saving their money, why?
- aren't we supposed to "save for a rainy day"?
I came to the conclusion that saving is only bad if your entire economic system is based on the expansion (artificial inflation) of money and credit (which ours is), but this is only partially true as someone will eventually benefit from all the spending and end up accruing some savings. In fact this does happen and it has a name: The Cantillon effect after economist Richard Cantillon. It turns out that the people who get the newly minted money and credit first are disproportionately benefited over those at the bottom of the barrel, in other words inflation hasn't set in for the first few recipients of the money (typically the politicallly well connected), however by the time the average citizen receives the money prices have already increased and at best any raise that may come from inflation will be to break even with the already inflated costs. Either the leadership of our country has been incredibly stupid the last 80 years or it was known that through the artificial expansion of credit and money supply, an increasing number of people would become dependent on the government. As it stands right now the primary political parties have no incentive to make the necessary long term corrections, especially if the citizenry remains largely ignorant.
The time for action is at hand, being a passive citizen will no longer suffice. We need to:
- Learn. Education leads to awareness.
- Share. Contribute to the knowledge of others.
- Unite. Together we can stimulate change.
- Act. 1-3 are irrelevant unless something happens.
-Joe
Tuesday, January 27, 2009
Saturday, January 17, 2009
Life's lottery
Warren Buffet once remarked that we (Americans) won life's lottery by being born in the United States, and while it is true we are experiencing significant economic turmoil there are very few places in the world where life is as easy as we have it. I'm willing to criticize the .gov as much as the next guy (or gal) but let us not forget how we got in this situation; we took out the mortgages and saddled ourselves with crippling debt under the delusion that real estate prices would appreciate in perpetuity. We voted for the laws and politicians that made promises of something for nothing. Our elected officials are adept at giving the citizenry what they want (i.e. home ownership for everyone facilitated by easy credit and artificially low interest rates) if not what they need. The truth is the majority of Americans are ignorant and apathetic towards government unless there is "something in it for them", a sad reality that has gradually allowed the founding principles of America to erode beneath our feet weakening the very fabric of our society. Like it or not our government was not designed to provide bailouts, ease the pain of recession, provide you with a comfortable retirement, or to spread "democracy throughout the world", yet all of these are considered by most people as it's responsibilities. We trifled away unconcerned with the goings on in Washington D.C., outraged only when it had an observable undesirable impact on our daily lives. It is our native responsibility to be aware or our governments actions, notions, and plans at all times. It's too easy to blame the government for our current predicament but it's also un-American.
WE ARE THE GOVERNMENT.
We elected them to office, and we are getting what we deserve. Sometimes the truth hurts, and it makes me angry to think how long I wallowed in my own ignorance, followed the madness of crowds, and that I was not instructed from childhood on my responsibilities as a citizen in a republic. What will I, we, you do now?
Changes to our lifestyle will unavoidably need to be made, what we don't yet know is whether they be voluntarily and gradually applied or violently cast upon us? In the midst of these changes it is essential that we allow our rights to be trampled upon to relieve discomfort. We (and our parents, and their parents, and our parents, parents, parents) allowed this to happen; but today, right now we must also decide to make the necessary changes, to plot a new course and to support others interested in doing the same. Our task will not be easy nor our burden light, but then again neither was the revolutionary war that painfully birthed the freedoms we now take for granted.
I'll finish with a quote from Benjamin Franklin: "they that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety".
Enjoy the weekend.
-Joe
WE ARE THE GOVERNMENT.
We elected them to office, and we are getting what we deserve. Sometimes the truth hurts, and it makes me angry to think how long I wallowed in my own ignorance, followed the madness of crowds, and that I was not instructed from childhood on my responsibilities as a citizen in a republic. What will I, we, you do now?
Changes to our lifestyle will unavoidably need to be made, what we don't yet know is whether they be voluntarily and gradually applied or violently cast upon us? In the midst of these changes it is essential that we allow our rights to be trampled upon to relieve discomfort. We (and our parents, and their parents, and our parents, parents, parents) allowed this to happen; but today, right now we must also decide to make the necessary changes, to plot a new course and to support others interested in doing the same. Our task will not be easy nor our burden light, but then again neither was the revolutionary war that painfully birthed the freedoms we now take for granted.
I'll finish with a quote from Benjamin Franklin: "they that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety".
Enjoy the weekend.
-Joe
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