A MarketPlace of Ideas                        

Every generation of people that pass across the face of the Earth feel that they are different in some way from the past waves of humanity.   The politician of today imagines they have tools to control the economy that they did not have in 1929.  They imagine they can stave off bad economic symtoms and diseases using fiscal manipulations of their profligate spending and federal reserve policy.    I imagine in 1929 they thought they were more sophisticated than in 1850 also.

                         Each generation thinks it invented music, sex and the stock market.   With 100 percent certainty we are not different than previous generations.  Only our technology has changed a bit.  Thus is there any possibility that the stimulus bail out package will work?  

The very fact that they are not able to predict economic problems indicates their understanding of the system is insufficient.  When I understand a system I can predict its behavior.   Our government is clueless. Thus our government is performing brain surgery with a 12 gauge gun.  The current financial crisis is causing our government to attempt manipulations on a scale never seen.  However large they may be they are not any different than things tried in the past.  As Einstein said it does not take talent to make something bigger.   When George Bush warned about  "too much government in markets"  he was correct.   He could have used the old phrase "too many cooks in the kitchen" and made his point more effectively.  The government is not only too many cooks but the wrong bad cook that likes to sprinkle arsenic in the soup.

We think we are different.  Everybody in the past has thought the same thing.  Its a natural human mode of thought.    From this perspective it is almost certain the stimulus bail out package will not work.  On the contrary it is likely to slow any improvement in conditions.  In a set of conditions we are under the normal political response is guaranteed to be the wrong one.  If history is a guide whatever the politicians do is going to be the wrong under this set of conditions.

After all is said and done SOMEONE has all the money that the companies needing bail outs lost.  Should we not be following them?  They made the correct moves.  Instead we are subsidizing the losers.  We are wiping the ledger clean for them.  The distributed accounting ledger that is our money system will lose its memory if they dilute our currency sufficiently. 

But politicians do what politicians do.  They have responded reflexively.   I imagine there is nothing that can be done.  It appears to be unfolding unconsciously.  Like a doppleganger zombie they shuffle.  If they were the least bit awake their solutions would have a hint of creativity.  I have spotted absolutely none.

In this situation we are better off doing nothing.  Try telling a political zombie that. 

People are suggesting that by not changing conservatives will fail. As per the book “The 48 Laws of Power” the only way you fail is by not being successful in the effort to feed your armies. In this case voters = armies. We need to architect a type of capitalism that also educates. Thus as the voter learns he prospers. As he prospers others see. As others see it they are drawn in. All movements that grow do this:

1. ancient armies ran on rape, pillage and plunder
2.  In the case of NAZI Germany the business model was to dehumanize Jews and steal even the gold fillings in their mouths to pay the miscreants.
3. The democrats business model is obvious. Plunder where advantageous. Cigarettes were only the devil when in the 1980’s they started contributing to republicans only.  They were then exploitable. 

If you want conservatism to prosper you need a business model. Fortunately we live in an era of fast flowing information. Thus I suggest there is a positive business model that will not include the larceny of the old ways. Its going to require a grass roots internet organization because its almost inherent that a top down model results in distortion of the libertarian capitalist model.  I can feel this is possible.  We are going into an era of technology which will enable many things including engineering of ourselves.  Intellectual property rights along with world wide collaboration should enable this. 

The good guys who play honestly need a gang also.

You want to use mathematics of some type to model behavior of the economy.  How to do this?  A model uses carefully simplified descriptions of systems to attempt to predict the future.

What the economic system is?  I propose a herd of cattle.  Why?

• generally travels in groups - behavior is correllated
• is unaware of the overall trend of movement of the group.  Is it moving east, west, south or north?
• can stampede - a boom
• can be stampeded by fear
• movement can be manipulated by the cowboy - Models the command nature of economy.  Cowboy directs the cows but if the cows only knew they would be in charge.  This day is coming soon.
• cattle are considered property of the cowboy - They direct the work output
• Assume cattle are not slaughtered but rather tied to carts they pull to yield useful work output
• large numbers of individuals results in statistic behavior of the group that can be measure

Linear system behavior

In linear mode small perturbations of the system result in predictable results.  Example: Lower interest rates lead to more business activity investment.  This is the small move results in predictable change in output regime of operation.  This is the one you understand intuitively.

Nonlinear system behavior

 This is the regime of operation that is many times counter intuitive.  How to understand this?  The mathematics of nonlinear systems is very complicated.  However nonlinear systems can be characterized.

What are the nonlinear system parameters?

• trust  versus nontrust
• unduely scarce resource - bottlenecks in the economy
• low inflation - High inflation - currency debasement
• deflation
• Decorrellation of behavior 

What modes of nonlinear behavior are there?

Boom - Grazing cattle move logically from grazed pastures to ungrazed ones.  One cow follows another.   Correllated behavior is in order.  The cows are fat and happy.

Bust - Green pastures within easy walking distance are exhausted.  Chaotic decorrellated behavior is in order because none of the cows know which way to walk.  Green pastures are out of sight.  The cows are scared.

What is happening now?

The system is being flooded with excessive liquidity in a blind attempt to stimulate.  The size of the stimulus guarantees nonlinear results.  As the economy plunges into the deflation region it normally receives a stimulus from price moderation.  It is likely it will not receive this effect now because of the excessive printing of United States dollars.  Oil has come down in price but any commodity would come down further has this system flush not been attempted.  There are only two outcomes.  

1. Reserves of capital will have already been expended.  The prices of goods and services will be higher due to accelerated inflation.  The economy will be at a low level of activity and remain there because the inflation will cause the monetary system to forget who made good decisions.
2. Reserves of capital have already been expended however someone has that money and are saving it.  When economy starts again inflation will restart very quickly due to the liquidity injected into the system with no underlying economic backing.  This will lead to another wave of failures and mistaken attempts at bailouts.

Neither outcome is attractive.   The sole effect of the bailouts are to only to dilute the remaining functioning businesses ability to deploy capital effectively.   At these levels the liquidity with have the same effect as raising taxes. 

Is there a better solution?

This is an inherently nonlinear move in the economy.  Linear methods are inappropriate at this time.  Any moves by Washington are not going to help.  The moves made in Washington will be ones that aggregate power at a time where the failures including the government should be divested of sizable fractions of their power as calculated by the market economy and loss of assets.

We would probably be better placed to just let this recession happen rather than fight it.  We only delay the inevitable.  At the same time it appears we are trying to institutionalize the previous winners in the game.  We are trying to make them "winners for life".  I do not know anyone who would think this is a practical idea.

Old Chicken was invited by Bush to sit in on the economic forum.  He turned it down as its a risk to his power. He wants to play out the rest of Bush’s term to burn up the monthes in between as he waits and hopes for recovery. He does not love this country he loves the power.

Say what you want about Bush he has not been afraid to take the slings and arrows.  In comparison Obama already looks small.   He does not want anything to diminish his precious.  In this lust for power the first symtoms of a gollum are betrayed.   Before its over he will regret this decision.  It is not going to be a short or mild recession.   The steps being taken by the politicians are just going to make things worse.  The market is trying to tell us something but we are not collectively listening yet.    So much like health issues that get ignored its going to fester.

From my personal point of view I am glad he is doing the hot potato routine.  It means less time for him to do anything.  Doing nothing is preferable to what he wants to do.  Indeed it is likely the best strategy.  It has gone beyond the limits of current understanding.  This however does not negate the fact Obama is a mirror gazing coward.

So here is what you are really going to get with a B.O. presidency:

1. Distract you with the talk of the dog the family will get
2. avoid responsibility as much as possible on the economy - when / if the economy comes back take credit
3. try to get more bailout spending so he can direct it the way he wants

What is new about this?  Sounds just like every other democrat.  Worried about the baksheesh and not the country as a whole.

The next boom / bust cycle is already in the cards.  Our wizards of smart politicians in Washington D.C. have insured that with a tanker load of fiat issued scrit paper money.  So what is my prediction? It goes like this

1. Next year … 2009 will be a very slow year for business.  More bank failures.
2. Some time in 2010 probably late in the year the economy will start to pick up
3. mid 2011 the economy will pick up steam.  It will start a powerful wave of inflation ( just as the politicians want! )  This wave of buying will beget more buying as people race to buy in as momentum takes everything higher.  You won’t have any actual more value in your hand for your assets.  You will just have cash that is worth less because of the inflation.
4. The consumer will die out promptly …….more quickly than even this time round in 2008.
5. The next bust will be even bigger.  The government will have less power to affect outcomes.  Foreign nations twice burnt will swear off investing in the USA
6.  The amplitude of the swings have been getting bigger each time we cycle through.  
7. Quite possibly the next downturn will be a depression because of the increasing amplitude.  This will happen because of 2 factors. #1 is that people’s spending power will be decreased. Savings having been devalued so by passage of time with severe inflation.  #2 Interpersonal trust will be so corroded from the debasement of the currency.  People will feel this on an unconscious level because of the corrosion of value of savings / currency
8. The politicians of the left will like it because we’ll all be reduced to feeding out of the palm of their hand. A mere whimper on their part and  you will be left to starve on your own for not being an upright socialist.

Washington politicians can put up with anything except the possibility of losing power.  And you keep electing so many of the same ones over and over.

 Obama’s ignorance and arrogance is breathtaking.  His plans for abuse of power are manifold.  The twisting of the market all beyond impractical.  He thinks taxing coal so highly will generate money for alternatives. That’s stupid.  It will cripple the economy.  What this will do is bankrupt in the government of the USA. 

Thus I conclude this should be his first step after taking office.  Cripple the government so he can’t implement his bizarre plans.

Obama thinks we need a civil defense force inside the USA as  big and as well funded as the Armed forces of the USA.  I would like to think this is an innocent mistake on the part of liberals.  I would like to think they do not know what they are asking for.  Unfortunately I think they do.   This force would naturally be staffed with correct thinking liberals.  With the 500,000 number I heard Obama bandy about its hard to imagine the recruiting not reaching into cultures and people who are solely in it for themselves and what they can gain.  The abuses will be horrific.  One gets the idea he is calling for the armed take over of the nation by the left and including a large number of blacks.  The violent radicals of the type Bill Ayers is combined with down scale street hood blacks would be a bad combination to lead the country.

No doubt this National Socialist police force of Brown Shirts will tend to help the Obama left’s agenda.  You "progressives" should consult your history books to see if you are really all that progressive.  Likely "regressives" are a more likely term for you.  Remember "Arbeit Macht Frei!".   ALL ABOARD!
 

The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.
Marcus Tullius Cicero - 55 BC

Read the story of Cicero.   mmm….2000 years and nothing has changed.  We’re doomed. 

According to Obama-Black peoples conditions are the fault of White People.  Tax whitey….he can pay for everything. 

The problem I have with black political leaders is:

• Nothing is ever their fault
• Nothing is ever their responsibility
• They never champion hard work
• They always blame the white man
• When given the opportunity they do not push teaching math / science but rather "community organizing"

I am athiest.  I am not my brothers keeper.  I have no moral duties other than the logical ones that keep me out of jail.  I do not care about you.  I care about my friends.   Be truthful and admit that is how you function also.  Its not humanly possible to love 6 billion people.   I am not responsible for the condition of blacks.   They are individually each and every one of them.  The condition of any given black is that blacks responsibility.  Do not even think about sending me the bill.  Don’t expect me to be concerned.  If you do then forward your address so I can send a list of things I care about to you and expect you to be concerned.  That’s reciprocity and unless you are some power mad pyscho you understand that which expect of others, others may reasonably expect of you.

And if you think I owe anyone reparations you are also wrong.  I am owed reparation for my great great great grandfather who died in the Ohio regiments during the civil war.  He gave his life eliminating slavery.  So let’s call it even and forget all the stupid ideas.

In this second video he talks about redistribution of wealth among the formerly dispossessed(read slavery).  If you understand the political speak it clearly expresses that he is in favor of reparations.

There is nothing I hate more than bullshit, bobagem, dissembling or more directly lies.

Colin Powell supposed Republican has endorsed Obama the socialist saying "Its not about race".   Whilst not too long ago he told students "an African American president would be electrifying".    I have to agree if that president was Clarence Thomas.  But B.O?  No way and you’ll find out soon enough how wrong he is if he’s elected.  The presidency is not an affirmative action position and should not be treated as such.

Colin Powell is a charlatan.  His association with the Republican party is based on expediency and self advancement.  Just the type of thing you need to keep out of government.  He is part of the "What’s in it for me?" crowd that is what populates 99% of Washington.  

I do not like being lied to.  You lie to me and you are over as far as I am concerned.   I saw Cry baby Colin Powell in a short where he and others talked about being black.  Excuse my skepticism.  He’s reached to the high levels of government.  Affirmative Action has to end or it will be used endlessly as tears are shed about hardship and our pockets are picked.   And Colin Powell is every bit a racist on this matter of who he endorsed for president.