WHAT I’VE LEARNED FROM TWO BOOKS I’VE RECENTLY READ

The two books are:
• The 5000 Year Leap by W. Cleon Skousen
• Democracy–the God that Failed by Hans Hermann Hoppe
These books explain our Constitution and often cite the founders of this nation. From their explanations one can only conclude that that the laissez-faire capitalism that the founders had in mind has been entirely ignored by the presidents and congresses practically since the ink was barely dry on that old parchment-paper on which the constitution was written. Instead of capitalism we’ve gone ever more into socialism, even socialism with touches of Communism and Fascism.

With capitalism society as a whole prospers and grows, while with socialism society as a whole withers and collapses. Look at the utter failure of the former USSR and the withering state of Cuba. From Skousen we find that ten or more great societies have collapsed because the citizens have expected their government ever more and more (socialism). Even on this continent in the early seventeenth century socialism failed when it was tried in Jamestown, Virginia where no private property was allowed. It was so bad that Captain John Smith wrote: “In Virginia, a plaine Souldier that can use a Pick-axe and spade is better five Knights.”

If we do not return to laissez-faire, our fate will surely be that of Cuba, the former USSR, or the former East Germany and I do not recall any attempts of people attempting to escape into these areas, but rather many occurences of people attempting to escape from them.

Read the US Constitution and tell me wher is the authority to operate a public utility such as the TVA, or where is the authority of the Federal government to be involved in any way in education, just to name two abuses.

National Bankruptcy??

How does a nation go bankrupt? Has it ever happened?

These are questions which every American should be concerned about. When I hear the other day that the national indebtedness a few year hence would be nine trillion dollars instead of the earlier estimated seven trillion dollars, I wanted to tear out my hair.

You can bet the farm that something will snap.

One possibility is a hyperinflation like the Weimar Republic in Germany experienced in the early part of the twentieth century. In 1914 one American dollar fetched 4.21 marks. By the beginning of December in 1923 a dollar would exchange for 4.2 trillion marks. In less than a decade the mark had sunk to one trillionth of its former value. The winners were those who had large debts because they were repaid with cheaper marks and the losers were the pensioners and others who held monetary assets based on the mark. The hyperinflation continued until the Germans replaced the old mark with the rentenmark at a rate of one billion to one on November 15, 1923.

Could something happen like this in America? I don’t know, but why don’t you google the word AMERO.

A Vow

I made a vow the other week. I made a vow to never again vote for an incumbent for federal office, regardless of any party affiliation. While the current slugs in congress are arguing about placing all of us in a socialized medical care system, they are proposing to keep their gold plated medical system for themselves – at our expense no less. Talk about Machiavellian hubris! The time has come, in fact it is past due, that the Washington “elites” are returned to the dog pile they have created and are creating for the rest of us.

They propose some form of nationalized medical care but surely they are aware of the dismal results it has had in Canada, England, Sweden, and other nations where it prevails. It is expensive and produces long queues for diagnosis and treatment - frequently with fatal consequences.

They do not consider the desires and needs of those who work in the medical community and only focus on the patient’s side of the situation. So as in Canada, young people will be discouraged from entering medicine as a profession or leave the practice prematurely.

Social Security and Medicare/Medicaid are bankrupting the nation and causing the currency to become more worthless with each passing day. Such Ponzi schemes as these dwarf that of Bernie Madoff.

To truly fix medical care what needs to be done is eliminate Medicare/Medicaid and reform the tort laws to be a “loser pays” system like England’s or Australia’s, or at least put a severe cap on nonmonetary “pain and suffering” damages as has been done in Texas. Then they must open the markets for medical insurance by permitting interstate sales and permitting insurance policy customization along the lines of not requiring maternity coverage which is totally unneeded by a woman past menopause.

The government cannot even operate the post office efficiently and you expect them to operate an insurance program or a medical system efficiently; surely you must be joking or you are very naive and foolish!

Did He Say That?

I can’t believe I heard the president on television yesterday say what he said. He was speaking about the high cost of drugs, and suggested that the patents on drugs be reduced from twenty years to seven years so that the generics could reach the market sooner. Either the president has not taken Economics 101 or he was speaking from notes a staff member wrote who did not know the first thing about economics.

Think about it. What would happen if the patent period were reduced?

A couple of things would happen, both of which would be bad. What is the purpose of the patent and copyright laws? Do they not serve an economic purpose of encouraging innovation and inventiveness by providing an economic incentive? So innovation and inventiveness would be less encouraged, and the development of new drugs would for diseases would not be so much encouraged. I saw an example of this lack of economic encouragement a few years after the fall of the Berlin wall. I was at an airport bar in England sitting next to a couple of German businessmen and asked one of them how the reunification of Germany was proceeding. One of the men said that it was a bit rough. Their laws required that the pay workers from the East the same as workers from the West. But whereas the Western workers had progressed over forty some year to the use of computer controlled and automated machine tools, the Easters workers were still accustomed to the hand controlled machine tools of four decades earlier. Their technology had not advanced because there was no profit motive in the state controlled Eastern economy. Their productivity was lower and great expense was incurred in retraining the Eastern workers.

Secondly, if the patent period was reduced and a new drug was invented, the drug company would have to sell the drug for much more during the patent period to recover the development costs. Three times the price, assuming constant value dollars would at least be necessary. But you could double that to cover the burden of inflation. And double it again because the higher price reduces sales, What you would end up with is then one of two consequences:
1. No new drug at all, because it is uneconomical to develop.
2. Drugs that are ten, twelve, or more times or more costly while they are protected by patent.
What is really called for is a patent period of much more than twenty years, say forty, fifty, or even a hundred years of patent protection.

You Can’t Push a String

Any thinking person should realize that this nation has serious problems ahead. Between the current federal debt and the underfunded entitlements of Social Security and Medicare place this nation in the position that my grandchildren’s share of the national indebtedness is about $130,000 before they even enter the workforce. Another way to look at it is they will have a mortgage on a house but no house when they are just getting started.

I do not think that any reasonable person could not see that some combination of events will occur in the near future, none of which will be very attractive. Among these events are: a very high rate of taxation, a severe devaluation of the currency, or possibly even a rebellion; and we’ve already seen the embryo of a rebellion in the recent tea parties and heated congressional town hall meetings.

Now if we’re to have a nanny state where the government is going to take care of everyone as a parent does a small child, we need a responsible parent, not an irresponsible parent; one that can say, “No, Johnny, you can’t have that, we can’t afford it.”

Comments on Socialism

Although the word “socialism” did not enter the lexicon until the first quarter of the 19^th century, it was practiced long before that even on this continent. In 1607 an early English settlement was Jamestown in Virginia. No private property was allowed and as a consequence there soon appeared to be two kinds of men, those who could not work and those who would not so that Captain John Smith wrote, “In Virginia a plaine Souldier that can use a Pick-axe and spade, is better that five Knights.” The preceding is from The Oxford History of the American People by Samuel Eliot Morison, published by The Oxford University Press in 1965 on page 50.

Socialism didn’t work then, it does not work now. You only need to look around at the miserable conditions of people in the failed states of the USSR, or Cuba and much of Europe, Asia and even South America. One must realize that simple socialism, communism, fascism, and Nazism are all variations on the same political theme that tend toward absolute state control or tyranny.

That the people of this nation should return it to the place where the founding fathers placed it is long overdue, for as Thomas Jefferson said, “Government big enough to supply everything you need is big enough to take everything you have ... The course of history shows that as a government grows, liberty decreases.”

The nation was pretty well off until the beginning of the twentieth century when Teddy Roosevelt vowed to take all the power he could and it has been a downhill slide ever since. Just examine some recent history such as the Supreme Court decision in Kelo v. New London, CT in 2005 involving the use of eminent domain to transfer land from one private owner to another to further economic development. It outraged very many people regardless of political stripe. Or consider the more recent situation where the Supreme Court did not hear the case involving the takeover of the automobile companies when the Obama administration placed the interests of the labor unions above the rightful and lawful interests of the bond holders who would normally have first call upon any company assets in liquidation. The ownership of property is a fundamental tenet of capitalism and if such ownership is denied by the state, social chaos will ensue and we will be less well off as a result.

Some of the elements of socialism that have come to be accepted so that we don’t even consider them socialism:

· Social Security – the return you get is less than you would have from a bank and many other nations have already privatized their public pension systems, the first being Chile some thirty years ago where the workers now retire relatively well off.

· Medicare and Medicaid – Ponzi schemes that are bankrupting us and selling our children into a life of slavery to the tax collector.

· Public schools – are often ineffective and costly. Statistics indicate that generally our children lag those in other nations after about the sixth grade with the gap becoming wider each year the child is in the public school. There are exceptions, especially in the more affluent areas where the folks agree to tax themselves more and pay more attention their child’s education.

· Price controls and minimum wages – these distort the economy and lead to violent corrections as we are now experiencing in 2009. While not technically socialism, they are primary ways the state interferes with laissez-faire capitalism. If a man agrees to work for another for $5 an hour why should the government insist it be $6 an hour when they are not the employer or the employee? Doesn’t make sense to me.

In the words of Earl Pitts: “WAKE UP AMERICA.” You are on a fast sled going downhill, jump off now before you crash!

The Impossible Dream

What is an impossible dream? Well, for one thing the classless society is an impossible dream. At least it will be impossible in the current direction of this country and most of Europe as well.

Today we have more or less three classes: The political class of legislators and their bureaucrats is a class on one end of the scale. On the other end of the scale is the poor. And in the middle of the scale is the vast “middle class”, the class of workers, inventor, and producers.

Now this middle class produces all of the world’s wealth upon which the other two classes depend. So when and if the socialists achieve their impossible dream, what will you have? Answer: You will end up with two classes: The politically elite class which is still dependent upon the now lowly slave-laborer class. So there appears that there is a dilemma

Or is there? To truly achieve or even approach the impossible dream, the power of the elite political class must first be diminished. This means returning to the world of the framers of the constitution vision. This ultimately means reducing the federal government’s role to protecting the citizens from invaders and criminals. The federal government should not attempt to rescue an automobile company, nor a bank, nor any other business. The laws should be rolled back to what they were in the middle of the nineteenth century. That means getting rid of a lot of unproductive laws such as: The Wagner (labor) act, Social Security act, the minimum wage, welfare, and a whole plethora of “social” engineering laws which are destructive. Then the lower “dependent” class will have to go to work and join the middle class

Win-Win or Lose-Lose

The current political-economic environment seems to be very similar to that of Russia at the beginning of the 20^th century. Using the labor unions and a very favorable government, the proletariat has assumed, at least for now, the upper hand.

It disturbs me that the American people have a disdain for “big” business and favor instead “big” government. That seems to be a backward way of thinking.

Consider the role of capital: Were it not for capital investment, where would we get the expensive machinery to manufacture such modern marvels as the electronic micro-chips from which our computers, televisions, and digital cameras are made? You can assemble a computer in your home work shop, but you cannot make the parts from which it is made. You can put up a jar of canned tomatoes in your kitchen, but you cannot manufacture the glass jar.

The capital supports the jobs on which we rely and if it cannot receive a return here in America, it will flee to where it will receive a higher return. The labor unions would have you believe that they are “protecting” the average worker, but in reality they are destroying the opportunity for a job in the long run. Just look at the current situation with Chrysler and General Motors. Will Ford soon follow? The unions are forcing upon the American brand auto manufactures a labor cost much higher than the foreign brand auto manufacturers and we will all be the worse off because of it.

On the other hand “big” government brings us higher taxes if we pay now or higher inflation if we defer the payment along with the paralysis of burdensome regulation as unelected bureaucrats write the rules that press upon us all.

There is a calamitous disaster on the horizon that may be too late to avoid.

Lincoln and Obama

Unlike Lincoln who freed the slaves. Obama will, if allowed, enslave the free. What is high taxation, but slavery? He vowed he wouldn't raise taxes on the poor and middle classes. Instead he will raise taxes on businesses. Does he not realize that businesses do not pay taxes; they pass them on to their customers in the form of higher prices or to their employees in the form of less salary or to their owners in the form of less dividends. Either way ONLY PEOPLE PAY TAXES.

So raising taxes on businesses is a way to get more money from us all, rich or poor.

Going Galt anyone?

I'm going Galt. Are you?

What is “Going Galt?”

• “Going Galt” doesn’t simply mean getting angry. That would be “Going Postal.” It means having righteous indignation at the injustice of a political system that bails out individuals and institutions for irresponsible behavior and at the expense of those like you who prosper through hard work and personal responsibly.

• “Going Galt” means asking in the face of new taxes and government controls, “Why work at all?” “For whom am I working?” “Am I a slave?”

• “Going Galt” means recognizing that you’re being punished not for your vices but for your virtues.

• “Going Galt” means recognizing that you have a moral right to your own life, the pursuit of your own happiness, and thus to the rewards you’ve earned with your labor.

• “Going Galt” means recognizing that you deserve praise and honor for your achievements rather than damnation as “exploiters.”

• “Going Galt” means recognizing that you do not need to justify your life or wealth to your neighbors, “society,” or politicians, or bureaucrats. They’re yours, period!

• “Going Galt” means recognizing that the needs of others do not give them a claim to your time, effort, and achievements.

• “Going Galt” means shrugging off unearned guilt, refusing to support your own destroyers, refusing to give them what Ayn Rand termed “the sanction of the victim.” It means taking the moral high ground by explicitly rejecting as evil the premise of “self-sacrifice” that they sell to you as a virtue— in fact “self-sacrifice” is an invitation to suicide.

The role of government vs. its practice

The role of government is to protect its citizens. To protect them fro those who would do them harm from those within, the police function; and from those from afar, the military function. In practice however, it often serves to destroy wealth.

The government takes money from the citizen it pretends to serve and spends it wastefully on things which the citizen would not otherwise spend it on for himself thus destroying the citizen's wealth.

I observe this phenomena here in Hillsborough County as the government is involved in replacing bits and pieces of sidewalk that have been cracked or pushed up slightly by tree roots. A section of sidewalk in front of my house was replaced yesterday because it was cracked. It has been cracked for nearly thirty years and did not seem to be bothering anyone. This is done at a time when we are suffering from a deep recession, and is not what I would consider a wise use of finite resources.

The Selection of a Supreme Court Justice.

Senators hold hearings and question prospective judges before they may be seated on the bench of the supreme court. All too often these Q. and A. sessions are little more than grandstanding by the senators. I'd like to see them get down to the basics in some of their queries with such questions as:

Have you read the constitution?

Have you read the Federalist Papers?

On December 5, 1947, Albert Einstein, the physicist, and Oskar Morgenstern, the economist, accompanied Kurt Gödel, the mathematician to his U.S. citizenship exam, where they acted as witnesses. Gödel had confided in them that he had discovered an inconsistency in the U.S. Constitution, one that would allow the U.S. to become a dictatorship. Einstein and Morgenstern were concerned that their friend's unpredictable behavior might jeopardize his chances. Fortunately, the judge turned out to be Phillip Forman. Forman knew Einstein and had administered the oath at Einstein's own citizenship hearing. Everything went smoothly until Forman happened to ask Gödel if he thought a dictatorship like the Nazi regime could happen in the U.S. Gödel then started to explain his discovery to Forman. Forman understood what was going on, cut Gödel off, and moved the hearing on to other questions and a routine conclusion. Do you know what inconsistency in the Constitution Kurt Gödel claimed to have discovered?

The commerce clause in the constitution has been used to justify much meddling and interference by the Federal Government in the affair of the citizens by such things as setting minimum wages and controlling prices. These laws by the Federal Government cause distortions in the economy by creating shortages and surpluses. How should we proceed to correct the situation?