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Guest Post: Seeking Solutions In An Uncertain World
Submitted by Todd Harrison of Minyanville
Seeking Solutions in an Uncertain World
“We used to play for silver, now we play for life; ones for sport and one’s for blood at the point of a knife.” --Grateful Dead
We
live in interesting times. During the last two years, a financial virus
spawned and infected the economic and social spheres as a matter of
course.
This isn’t just about money anymore. Our civil
liberties, the foundation of free market capitalism and the quality of
life for future generations are dynamically shifting as we traverse our
current course. (See: The Short Sale of American Icons)
I
once offered that Shock & Awe was a tipping point through a
historical lens; as Baghdad blew-up on CNN, I somberly sensed America
would never be the same. That’s not a political statement -- we don’t
know what would have been if we didn’t invade -- it’s simply an
observation. Almost overnight, world empathy turned to global
condemnation.
If we’ve learned anything through these years, it’s
that unintended consequences tend to come full circle. Whether it’s the
moral hazard of bailing out some banks, the gargantuan profits of a
chosen few -- Goldman Sachs (GS), JP Morgan (JPM), Bank America (BAC), Morgan Stanley (MS), Wells Fargo (WFC)
-- the caveats of percolating protectionism, or the growing chasm of
social and geopolitical discord, times they are a-changin’ and it’s
freaking people out.
As speculators are vilified and hedge funds
are perceived as acceptable casualties of war, financial fatigue will
evolve in kind. We’ve already seen the burnout manifest in trading
volume -- upwards of 70% of the flow are the robots -- and we’ve
witnessed it in financial media, with reported ratings of some of CNBC’s
marquee shows down as much as 25% year-over-year. (See: The War on Capitalism)
Sun-tzu
once said, “If your enemy is superior, evade him. If angry, irritate
him. If equally matched, fight and if not, split and reevaluate.” As we
navigate this socioeconomic maelstrom, an increasing number of people
are weighing their options -- and some of the smarter folks I know are
“going dark.”
What does that mean? They’re selling businesses, unwinding trading
operations or otherwise distancing themselves from the capital markets.
The thematic reasoning is straight out of an Ayn Rand novel: “I can’t
compete and when I do, the rules of engagement change in the middle of
the game. I’ll let the powers that be vanquish themselves and return in
three to five years to sift through the remains.” (See: The Last Gasp Bubble)
The
first time I heard this, I took notice. The second time, it piqued my
interest. Now, with four or five savvy seers pulling the plug, I felt
compelled to communicate these observations. I’m often early and
sometimes wrong but I’ll always put it out there; while few are talking
about this, it’s on many people’s mind.
I’ll also share that the
most lucid thought I’ve had since offering in 2003 that we should "sell
tech and financials, buy energy and metals and open a taco stand in
Costa Rica" is to edge away from NYC. While I’m not the panicky type --
heck, some would say I thrive under pressure -- I would be remiss if I
didn’t offer the respect of that honesty. I’m unsure of the genesis of
this particular vibe -- quality of life or proactive self-preservation
-- but the intuition is palpable and ever-present.
As it stands,
I'm not in a position to do that -- this is where we are and this is
what we do -- but my personal choice doesn’t alleviate the overarching
societal shift or the collective tension that seems to be percolating. I
speak with a ton of people in an array of industries throughout the
world and "business is great" feedback is a rarity.
More often
than not with increased frequency, the sentiment skews in the other
direction, as do anecdotal data points such as thinning crowds at
concerts and excess capacity at high-end restaurants and sporting
events. There are of course exceptions -- $10 million plus homes in
Manhattan are well-bid, due in large part to Wall Street bonuses -- but
they’re an outlier in the broader array of our societal fray.
Last week on Minyanville, we shared the following feedback from someone within our community. And I quote:
I read your exchange on “going dark” and wanted to share some
anecdotal evidence. I owned a chemical and manufacturing corporation
that employed twelve people. We sold the company in October, 2009 for
three reasons: expectations of higher future tax rates (income and cap gains), lack of clarity in regulations and the perceived coming wave of governmental policies.Looking
at that last sentence reminds me of why we decided to take our cards
off the table after a successful run; the words EXPECTATION, CLARITY,
and PERCEIVED.All of these lead to one thing -- uncertainty. It
was hard enough to make a dime with the relative stability of the
previous period. Change the operating environment and in my mind, you
change the probability of success. Smart people (being presumptuous
there!) don’t wager in that environment!
Now, I’m not suggesting we cower in a corner, buy guns and butter and
get all Mel Gibson on each other. Further, I understand most folks
aren’t in a position to seize the day and walk away. I’ve written in the
past that if we’re not part of the solution, we’re part of the problem
and that remains true, now more than ever; society, at the end of the
day, is simply a sum of the parts.
As we wrestle with reality
and attempt to operate in the best interests of ourselves and those we
love, some have chosen to extricate themselves from an increasingly
tenuous struggle to focus on the little things in life. I suppose
they’re lucky to have that option and their actions are consistent with a
widespread reprioritization following the Great Recession. I’ve written
about them before; net worth vs. self-worth, having fun vs. being happy
and the caveats of looking for validation at the bottom of a bank account. (See: Memoirs of a Minyan)
For
those motivated to power through to better days and easier trades, the
actions of a few effects the lives of many; we, the people, need
motivated, innovative proactive problem-solvers to remain engaged as the
second side of the storm approaches. While our financial equation is
multi-linear and ever-changing, my sense is that we’ve got four to five
years of perseverance and preservation as a precursor to the profound,
generational opportunities that will emerge thereafter. (See The Eye of the Financial Storm)
Looking
at this emerging trend of “distancing” another way, we know the
opposite of love isn’t hate, its apathy. Through that lens, folks
walking away from the capital market construct may indeed be another
step in the steady migration from what was to what will be. We often say
the leaders who emerge from the crisis are rarely the same as those who
entered it. At the very least, it should be noted that several former
leaders have removed themselves from the running.
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Really?
"If we hadn't invaded Iraq....
The US would already be finished with whatever it is trying to do in Afghanistan."
Now go upstairs and ask your Mom to explain it to you...
wait until your own mother finds out you were on zerohedge last night while you were grounded from the family computer.
Okay there, Mr. Presumptuous, with all the ancillary meanings you attributed to it...
Perhaps it is a bit of a challenge to follow the linearity of this discussion, but the author of this article raised the issue of "Shock and Awe" and how to him it represented a key turning point in US history. That got me to wondering what the US might be had Bush/Cheney decided not to invade Iraq. Though age may have taken away some of my facilities, I checked my facts and am confident one or the other (Bush or Cheney) was President when the US started the war. Thus, I made comments about Cheney, who I know was the driving force, along with the Neocons, behind the useless war. Of course had you taken off your knee-jerkers, which find a "liberal" or worse, a "Democrat" behind every criticism of the war, you would note that Point No. 1 refers to a war in which we are still engaged, in which I suspect we will remain engaged until we can determine why we are engaged in it and what acts, events or situations would constitute the "victory" we would need in order to congratulate ourselves and go home (or more likely on to another war). Correct me if I am wrong, but we have another fellow not named Bush or Cheney calling the shots now. Oh, and if this had been a discussion about the financial mess, I might have wondered about a US WITH Glass-Steagall and WITHOUT an "American Dream for One and All" policy, which would have blamed a different cast of charlatans, oops, characters.
Democrat/Republican? All that labeling bullshit is a redundancy of importance only to Fox or MSNBC viewers, of which I will "presume" you are the former. Maybe presumption makes me as stupid as you, yes?
If you have nothing else to do this weekend, try evolving into something beyond a party hack and bobble head for one or the other. If evolution becomes a trend, there might be hope for our species. We can start with political parties, then move on to gods. Clear the whole deck of delusions and start fresh.
Laughable.
My god, you really need to move on. And I don't mean repeat moveon.org wack theories as if they were facts. I mean move on in life. War is over and done, and history will judge Bush correct. There's is not a damn thing you lying liberals can do about it.
I see your laugh and raise you.
"lying liberals" is so terribly quaint, though it is about as intellectually lazy as can be. Perhaps that is the extent of your meager capabilities. I might accept the lying part, being human and all, but the liberal bit is your own simple minded solution stemming from an inability to deal with a world of more than two colors. Please evolve.
Let me give it a try here.....I just saw a milk carton with your picture on it. Seems the Yahoo! Boards have reported you missing.
By the way, what sacrifice did you make for the war you clearly support? And have you ever served on the front lines or are you just a chickenhawk? I served. I believe that entitles me to an opinion, certainly more than buffoons like Limbaugh, Hannity, Feith, etc.
No, I am not Cheeky Bastard, I'm just playing him today on the internet.
chindit,
I admire your willingness to try to enlighten. Your opposite in this case is so deeply entrenched in the left-right thing he/she cannot see straight: anyone who opposes the war must be a left liberal. I advise against wasting any more time.
I can honestly remember the amount of time I devoted to self-education before I extracted myself from the left-right paradigm. It was so deeply engrained that the information contained in almost the first year of reading would have been rejected as impossible, the conclusions needed to accept the text were too radical, had they not been American founding documents.
Chindit, allow me to use this post to suggest reading for trapped left/righties:
Read these documents, THEN read the Constitution in its entirety, THEN read the Bill of Rights, THEN look at what Washington has become and ask yourself if you can support either of the major parties. Then get off your ass and do something about it.
Thanks for the links SWRichmond. Good to have them handy, and always an interesting to read what went into our most important documents.
I also like your advice to do something about it - but color me skeptical. Using our recent addition to ZH above as an example, some people it seems, are not teachable. They are too embroiled and captured by the propagandists braying for their side of the red/blue sporting event. I spent well over a year attempting to rescue some people from their partisan prison - but to no avail - they just want to take sides and act like the idiots they so worship. Even worse, they think they are the only ones telling them the truth. You know the symptoms, as so magnificently spelled out by our very own Cognitive Dissonance’s paper on Insanity. I finally gave up.
You’re a long time poster on here, and one I respect. I came and loved this place because, in the beginning, we all had gotten past the right/left paradigm and was swimming in the same direction. Now it seems, we have been invaded by a bunch of clueless trolls - the kind who will never "get it."
I'll continue to try, but some are not convertible. I think we need to understand, and accept that. Our efforts are best served on people who actually have enough brain cells to ignite an intelligent spark.
Again, thanks for your links, and please continue your efforts. Cheers.
It's impossible to not be skeptical. It's also impossible to not find our predicament motivating, if not frightening, and to want to look for and encourage like-minded people. It really is hard, though, to peel people away from the left-right thing, and it is proving to be so easy to lead the newly-independent back into it. Looking at mass psychology, there seems to be a time frame where folks begin to tire of resisting and start looking for a reason to believe that help is on the way, that the system really can work and things are going to get better. The liberty movement is under a withering constant bombardment by the Sirens of the right (Beck, Palin, Fox) and resistance seems to be fading. I am running around trying to stuff wax in people's ears and / or tie them to masts for the passage. It's not working. The rocks await.
Agreed. We can only try, and our conscience will be good with that. Best of luck in your (our) efforts.
By the way, what sacrifice did you make for the war you clearly support? And have you ever served on the front lines or are you just a chickenhawk? I served. I believe that entitles me to an opinion, certainly more than buffoons like Limbaugh, Hannity, Feith, etc.
All lying liberals use the same old tired argument. I served you didn't (while in reality they never served). Oh "chickenhawk"...how 90's of you. You are clearly a psuedo intellectual who thinks words can bamboozle. How's that working for Obama with Iran. Oh wait it didn't, Iran spit on the offered hand, but "O" was too snooty smart to realize it.
The bottom line is if you truly loved your country you would support the troops in Iraq, but you don't. You are in love with yourself, not America.
Shame on you.
Just as expected. A chickenhawk. Perhaps it's so 90's, but your 'psuedo intellectual' is straight from Spiro Agnew. And call me old fashioned, but some words like chickenhawk just never go out of style.
You are also rather confused about the meaning of America and the principles upon which it was based. Rather than be a land of infallible monarchs or---again I am going to go retro---"my country right or wrong", America was built on the principle that the system would have checks and balances and that all actions of the leadership would be subject to criticism by opposing parties, the free press, or the general population.
Again I will fall on what you conveniently consider a tired argument, but since I have put my life at risk in defense of those ideals, I feel perfectly justified in availing myself of them. One of the beauties of the system is that even people like you have that same right.
When "all of you chickenhawks" are so ready to spill someone else' blood and spend someone else' treasure for things that might make you feel adequate, it is the duty of true citizens to speak up.
My father served during the Korean War, my uncle on 3 Pacific Island invasions fought the Japs (he was still coughing up shrapnel in 2003 from World War II). Another uncle was at Hickam Air Force base when Pearl Harbor was bombed in 1941. He retired as an Army Colonel. My Grandfather spend a year in a French hospital after being machine gun shot twice in the neck and gassed in World War I. I am 53, too young for Vietnam by 5 years and was too old by the time Grenada happened. I have one son now I am trying to get into the Naval Academy here in Maryland. I 100% support what he wants to do.
So you have no understanding of America or who I am.
I will not reply to you again. You are as I stated. A liar, who demands proof, while supplying none of their own.
You sir, are the chickenhawk.
Goodbye and good riddance.
"I am 53, too young for Vietnam by five years and was too old by the time Grenada happened."
If you paid closer attention to the war you support, you would have noticed that American servicepeople as old as their late 40's have lost their lives. When the war started, you fell into that age group, thus your age is no excuse for not having put the rest of your body where your mouth is. You have proven my point. And let me add...there are no generational exemptions granted by the US Armed Forces. What your father and grandfather gave, and what your son hopes to give, reflect on them and them alone. You cannot piggyback off of someone else answering the call to duty.
JLee, you must know that nothing is over in Iraq. We will still be there in force 50 years from now, if there is still a United States and we still have any force. Force is really all we have left now and its rather wearing thin. History may be judging us as an interesting experiment gone badly wrong by then. History has yet to judge Bush correct in that adventure. It may be your opinion that history will judge him correct, but as the old saw goes, opinions are like assholes. As for that liberal/ conservative hate thing, it has been pointed out on this blog over and over again that this is a false dichotomy, a fairly recent construct, a marketing thing. Do you prefer Tide or Cheer? It is an experiment in mind control if you like, effective in dividing the proles and keeping them distracted and preferably at each other's throats. It is a trap and it blinds one to what is actually going on. The policies of the Obama administration are indistinguishable from the policies of George Bush. Someone else or some other group, persons who are not elected and not accountable to your vote or mine, are making the calls. And that is where your resentment belongs, not the "lying liberals."
Bravo! (You have a lot more self control than I can muster for these people.)
The policies of the Obama administration are indistinguishable from the policies of George Bush.
That is the false dichotomy and the trap that has blinded you! Bush understood EVIL and fought it, Obama is EVIL.
EVIL is so old testament. It is also rather vague. Of what EVIL do you speak, all in caps, no less. What evil did Bush understand and fight. I saw little evidence of any such thing during his occupation of the White House. I did, however, notice that the man couldn't even be bothered to hide his contempt. Obama is a somewhat better actor.
Not worth responding to.
When the devil introduces himself to you, you'll know it.
You have no answer and so dismiss my question? Cowardly to say the least. Define this EVIL you speak of.
A...X...I...S of ...
Oh, my god, stabbed through the heart! Wasn't the axis of evil a comedy tour?
At least you tried to explain yourself.
You seem like a directionless dumb-ass, but at least you tried. Bravo!
And you also reached the mountain top of presumptuous:
I am a devout, if very failed Christian who mournes your lost soul. But it is never too late!
Dumb ass...
No need to worry, no lost "soul" here. The post is hardly without direction, though you seem incapable of navigation. Maybe you've lost more than your moral compass. Your quick assumptions, then the fallback to "dumb ass" speaks of you more than anyone else. Intellectual failure, perhaps.
Wonderful that you are devout. As one who has had the opportunity to live in countries embracing each of the five major faiths, it always struck me that given there can be at most only one true faith---and more likely none at all---the majority of people are devoting their lives to the teachings of someone who was either a lunatic or a liar. There can be no other possibility.
I would call that "lost". Then again, what does a dumb ass know?
As for your "failed" Christianity, I can see it. I believe one of your failures is where the Bible says, "Judge not, lest ye thyself be judged". Perhaps this is a bit pedantic, but I refer to your numerous spelling mistakes in your comments on this article. Some errors are inadvertent---a slip of the finger here or there---but others ("mournes" "canabalism") demonstrate intellectual laziness or perhaps ignorance. Thus, regarding "dumb ass", you might do well to get yourself a mirror.
You make me laugh, so at least there is that.
You quoting the Bible should be sad, but I find that funny as well; whoops, failed again.
I owe my wealth to pompous idiots like you. Since I am unable to thank all of them in person you can be their representative: Thank You!
"People may boo me, but when I go home and think of my money, I applaud myself."
Oscar Wilde said it better than your poor attempt at a pissing contest. In one of your earlier attempts to show yourself silly, you said that "presumptuous is a nice term for kind of stupid". You have presumed here, and, well, the definition you provided fits perfectly. Take pride in that; you got one thing right.
Reese. Dumb ass? Not really.
Chindit has been a high quality contributor here for quite a while. Many members enjoy his opinions and insights. So to counter your venom, I will thank Chindit for his time/contributions here.
I happen to be a member of the Shakespearean Party, "a pox on both your houses".
I have to ask.
When Obama invades/attacks Iran (or someone else, war is the only chip they have left it seems), then what?
What board is he sitting on?
This rises above Cheney and Haliburton (hey, even though now a foreign owned company, still one of our largest defense contractors, how's that "American Defense" industry looking these days?)
nd, since we have been "fighting" in the MidEast for my entire adult life, plus some and since the MidEast has been fighting amongst the various caliphs for millenia, you really think that lollipops and sunshine would be raining down on us (and them) now? Really?
The hedgies are bored with the beta on beta off world. The quants have run them from the business. It was good when it went one way, like 2009. All the hedges that were long made a boatload, but when the HFT quant trading gurus stepped up the whiplash factor, the "old guys" want out.
But there is another reason imo. The client knows he can't get double digit returns anywhere anymore, but asks the hedgies to provide it. Why would top hedgies head out, just as money wants to pour in from pensions and endowments everywhere.
They know they can't get across "preferred thresholds" in a low return world. I understand it - why not try to make a nice mid to high single digit return on your own money until the asset/investment classes de-correlate.
A bad cliche sums it up, "it is what it is."
I think that was a fair assessment.
Hedge funds generally attract pretty smart people. After a near-death experience in 2008, followed by a suprising ride back above high-water marks in 2009, this year is the thank-your-lucky-stars and wait for real opportunity when markets break.
Investors must feel stupid paying 2% fees for break-even type performance YTD but hedge fund managers are nothing if not great marketers...
I can't take Cramers funk'n face another day. I want to punch my computer screen. Argh!
Click on him, and make some money for ZH. It's the ultimate FU.
many times already, but the fucker does not go away. This ahole never goes away!
Maybe it's like stray cats and dogs - feed them and they never go away!
Cry Baby. We could give a shit about your suffering.
On my Linux PC running Firefox, I see NO ads that you describe.
There are add-ons that make such things into un-persons.
The other side of Chindits thoughts...
The US now has the only fully combat trained military in the world. It also happens to have the majority of it free again. It has just spent the last 7 years developing new technology to hone the edge that combat has given it. The US is now more dangerous than anytime since the Summer of 1945.
It has a massive new re-armor event underway. MRAPs and equivs by the 10,000's. Do the math. The US is preparing to replace its worn out weapons with new better ones.
The US has shown that it still has the ability to show up anywhere in the world, with a supply chain wrapping around the world, and invade a nation, hold it, and make a joke about it.
If you know anything at all about war, its very very messy. The US just showed it has the ability to remove any government it wants, with very little cost in human capital. It has spent 7 YEARS holding Iraq, with total losses barely measurable. Yes, I said measurable. If you think 5,000 dead in 7 years is a lot, you should have seen war when nations lost 50,000 per side, in a day.
The US lost 50,000+ in 10 years in Vietnam. So lets get realistic here. Iraq was nothing more than a training mission. That training now has over 1 million combat veterns. If the US decided to bring back the draft, it could quickly double or triple the size of its standing army, with combat harden troups in all command slots. If you dont understand the reality of that, you dont understand war and how they are fought and won.
Name a single nation or groups of nations, with out US help or support, that could invade another nation that does not share a border. What I mean by that, is that no one but the US can forward deploy a war expedition and hold a victom nation captive.
That is real power. We are not talking nukes, and great threats. We are talking about forward deploying the sharp end of the stick, and poking people with it.
"very little cost in human capital"
1/8th of americans on food stamps, and 10% unemployment is low cost?
"with total losses barely measurable"
I think 1T-3T worth of wealth qualifies as measurable. And then consider that we spent that just attacking one of the weakest militaries in the world, with no functioning air force or navy.
Actually, Condottieri makes a really good point.
Those are separate: Combat deaths (by historic standards) in this conflict are so low as to be not measurable. Your complaints regarding the economy are separate. (Food stamps and unemployment relate to welfare and structural problems in the US economy, not to combat operations.)
I'll accept maybe $1T for Gulf War I & II. We might pretend that's a lot of money over 15 years (and it is), but it's nothing compared to the $100T just for Social Security and Medicare.
The US will sovereign default, and possibly break up, but it will not be through military spending. California, New York, and Illinois screwed themselves, and not through any military spending. It's the exact same problem at the US Federal level.
You make a reasonable point that Iraq wasn't as strong a military, but the point is that the US mobilized in-and-out, and very few other countries can even begin to think about doing that kind of operation nowadays. (I have doubts any nation in Europe, or even Russia could pull that off.)
If it was a "training mission", then Condottieri's point stands: It doesn't matter (much) how strong Iraq was.
What happens if China invades North Korea, and then *South* Korea? Nobody would do anything, and I have doubts any nation *could* do anything.
What happens if China invades Japan? Do you seriously think any nation other than the US could do *anything*, nor would they even *try*?
Talk about poking people! I have been lighting bags of shit by the door of my little Jew Keynesian banker neighbor for the past year, I considered this as my training mission. Next, I start beating up his kids. Hooah!
The Nazis lost. Get over it.
Also, if you had more than half a brain cell, you might be surprised to discover that Kynesians supported the Third Reich. Congrats, at least now we know how a loser and fool spends his time.
umm.. we will not sovereign default as you say.. Why would we? the government has a monopoly on the printing press..
China will not invade anyone unless it wants to self-destruct
This is the "inflation v. deflation" debate. The US will default because it is at the end of the ponzi (i.e., for a lot of reasons, it will not be able to service its debt.)
The argument is made continually that the US invades foreign countries in its self-interest, or to maintain grip/distraction/focus on its population. Would not the same be true for China?
China has too many people, soon to be starving. A war solves lots of problems, including the ability to claim "free" resources.
China is controlling North Korea *now*. Look at a map, and then a list of the nations that sent Kim Jong-il a Christmas card last year, and then you'll know why. Everything North Korea does is with the approval of China (mostly as a side-show distraction for the rest of the world). If/when China (as landlord) decides to "occupy" its apartment currently rented by Kim Jong-il, it would take all of an hour. And, the world won't blink an eye (nobody would care).
China never forgave Japan for what it did to them in WWII. Looking at Japan's demographics, it's really tough to see them as a nation *at all* two decades from now. I don't expect China to wait that long.
China will invade for the same reasons other countries invade: It's easy, you get free stuff, it solves your problems, and nobody really cares if you do.
Not to be cynical, but it would also help with their boy/girl ratio.
Ah yes, the old "Comfort Women" ploy!
The US will default because it is at the end of the ponzi (i.e., for a lot of reasons, it will not be able to service its debt.)
If all else fails, we can service debt by printing money.. Do you really think there is much difference between government bonds and money? Both are pieces of paper issued by the government and both are for all intents and purposes are legal tender.. So repeat after me: government bonds and fiat money is one and the same.. Paying down debt is replacing one piece of paper with another.. Just curious what are these "lot of reasons"? Saying "lots of reasons" doesnt prove nor even make a point
China has too many people, soon to be starving. A war solves lots of problems, including the ability to claim "free" resources.
The fact that China has lots of people is not new, isnt it? IT has been making great progress as an economic power and fully relies on trade to grow and employ its restless populace.. If China goes to war - it will destroy its status as an export power.. its not clear what a war will achieve but it will clearly kill the export machine.. why would they want to do that? For what purpose?
It will take some time to get us both on the same page, which I fear is outside the scope of this thread. However, I'll directly respond that no, government bonds are not the same thing as fiat money.
The Federal Reserve Bank issues a Federal Reserve Note that we lovingly call the "dollar" (the fiat unit in the United States). In theory, they could print as much as they want (and for the most part, they do, even in violation of their 1913 charter). In contrast, the US Treasury issues bonds, backed by future tax claims upon the taxpayer. The US Treasury *cannot* issue bonds that are *not* backed by the taxpayer. All these bonds pay interest. Every time the US Treasury issues a new bond, the taxpayer is exponentially liable (for the par value of the bond, plus the interest that must be paid to service the bond). Among other things, it is this exponential taxpayer liability that dictates that the US Treasury cannot print whatever it wants (unlike the Fed).
Further, even for the Fed, too much printing will cause people to lose confidence in the unit (it no longer represents scarcity), at which point it will be repudiated from any transaction (i.e., hyperinflation).
We're just scratching the surface here. We've not talked yet about failed US bond auctions, state insolvencies (the Federal government won't be able to back-stop California), collapse of the $1.4 quadrillion worldwide derivatives market, sovereign counter-party risk from the imminent collapse of the Euro, etc. Like I said, it may take us some time to get onto the same page.
No, but what's new is the fact that China can no longer grow exponentially.
It did in the past. It cannot do that in the present, nor the future. Exports to the US is in broad decline, and China is shifting its exports to European and Asian markets, as long as that can hold out. It will get interesting when there is no European market either.
If nobody is buying, it doesn't matter that you want to provide exports. Then, you become a power by conquering. Spain ruled the world. Then Britain ruled the world. Others ruled the world before them. The Chinese remember that at one time prior to Spain, China ruled the world. Like was said previously in this thread, war grants new resources to the victor and ensures national interests.
I understand the functions and the policy domains of both the Fed and Treasury better than you perhaps.. That doesnt change the argument.. Do yourself a favor and spend some time thinking about what I postulated.. In a fiat currency regime, money and government bonds are practically the same if you dig below the surface as far as the economy is concerned.. It requires some thinking out of the box..
Warren Mosler has an insightful piece that you might enjoy "Seven Deadly Innocent Frauds":
http://mosler2012.com/wp-content/uploads/2009/03/7deadly.pdf
mikla writes:
"Food stamps and unemployment relate to welfare and structural problems in the US economy, not to combat operations."
A friend of mine committed suicide (pistol in mouth) because he couldn't find a job or piece in his life a decade after coming back from Vietnam. He used to hold a rifle in his hand and stare at the ground for hours at a time. Had nothing to do with the war? Of course not. Why don't you take your warmongering, apologist remarks and shove them sideways.
I'm sorry for your loss.
There are many human costs to wars, many not obvious until later, like for your friend.
My remarks in this thread are clinical: Nations go to war because they decide to do so. I'm not making value judgements regarding that decision. (There is a long philosophical argument regarding whether it is possible to have a "Just War" [as opposed to an "Unjust War"].)
For my quote you excerpted, current food stamps and unemployment levels in the US are principally a result of structural economic problems in the US economy (secular manufacturing decline over decades, increasing costs, globalization). However, it is principally through a credit-led recession (too much debt in the system, both businesses and consumers are now deleveraging). This is different from typical recessions, which are inventory-led (too much capacity in the system which is reduced through economic decline).
No, these fundamental problems are not related to defense spending. War may have other (very real, very human) costs, but it isn't the reason for the current US unemployment rates (which will continue to climb higher for the next two years no matter what you do, no matter how much defense spending you have, no matter how much defense spending you had in the past).
'Nations go to war because they decide to do so...'
Not true. They go to war because of a very small group of people that control money, industry and media. With this control they are able to "secure" the will of the nation and twist the logic for the justification of murder. War is murder! It is not a conscience decision by average citizens to kill other average citizens of another country. It is only through controlling consensus through fear do people of one country murder people of a different country.
No, the US can only invade countries that have no modern weaponry. Had we invaded Iran and North Korea instead of Iraq and Afghanistan, it would have been a bloodbath like none ever seen before, likely with millions dead on both sides (given that NK has nukes and delivery systems).
We would have a different plan of attack for Iran and North Korea. I have no doubt we could invade either one successfully without millions dead. The problem, I think, is that both would mount a defense on the soil of a different nation rather than standing on their own soil to protect their own land (creating mayhem in a different country as punishment for the invasion). That presents a problem that I think modern War colleges haven't yet figured out how to deal with. It is a new style of warfare against which no defense has yet been created. Other than wiretaps and airport screening.
I was a combat grunt in Vietnam. I know a lot about military reality. The US military can not hold up under a lot of KIA pressure. The Russian or Chinese military could lose 50,000 men a day and laugh it off.
Our high-tech military is only good for beating up banana and/or oil republics. If we get into a knock down drag out with Russia or China they will kick our wimpy asses.
respect to you sir, a US combat veteran for seeing and saying the truth instead of repeating the mindless "hoo ha" propaganda koolaid style.
the US likes easy (American) blood free "wars" against peasants with sticks, anyhting else gets a bit uncomfortable.
"That is real power."
Power we can no longer afford to deploy! The accountants will serve a massive helping of entropy to our military. Only a matter of time.
What about the sanctions and 1/2 a million dead iraqs, mostly children? You're proud of this? F*&^king @ss.
How absurd. We've made little to no progress in our nation's longest war in Afghanistan, and 'held' Iraq for years but made no infrastructure or political progress at all. IMHO we left with our mighty tail between our legs declaring 'victory' - as we will do in Afghanistan in 2-3 years. In the meantime we've spent trillions of borrowed dollars. Our friends/enemies are laughing as we sink ourselves as a corrupt and declining empire.
I've got some Chinese solar stocks to sell you.
traderjoe
I just watched 9 Rota, 9th Company, about the Russian experience in Afghanistan.
Fucking Jesus.
I did notice there was this single longhaired unturbaned 'Ghost". I fucking swear it was a dig at Rambo3.
In 1945 the US Military was honed to fight but by 1950 and the Korean War what happened to that keen edged military?
Many fighting in Korea were WW2 Vets but the Korean War ended in a stalemate and Korea was partitioned at the 38th parallel.
In Viet Nam the outcome was even worse.
But we kicked ass in Granada and Panama!
The outcomes in Iraq, Afganistan and Pakistan are not yet decided. If the books were kept as in a traditional empire we might find that the wars in those countries are a huge loss in treasure. We sure as hell don't run an empire the way that they used to be run.
It's no longer "Politically Correct" to rape and pillage, let alone salt the earth.
Everything you say is true, but all of it is 100% dependent on the rest of the world's tacit and fragile support of those little, green, faith-based, paper tickets that are nonredeemable for anything tangible and are being conjured into existence at an exponential rate.
Will China lend us the money that we would need to invade it?
The Roman Legions were also the most powerful force the world had ever seen. Think about it.
"A lasting order cannot be established by bayonets." -- Ludwig von Mises
Just a tangent. A German tribe called the Franks used Roman style weapons, fighting techniques, organization and strategies to conquer France. This tribe defeated the Moorish Jihad as well.
exactly, against no army, and you couldnt even win that. try it against China.
dont delude yourself, they were in training to keep the American people under manners (or FEMA camps) for the next 10 years
In 1972 the dems told me I should give up Apollo and pay for welfare checks and cheese from Wisonsin. The Reps said I should give up whatever the gov might do and keep my cash. It was an easy choice.
In 2010, the dems still say I should pay for welfare checks and cheese from Wisconsin. The Reps say I should cut Bill Gates' taxes and borrow money to go kill people far far away. I never thought I would like William Proxmire.
Todd Harrison,
You really ought to sell and flee. Take your own advise. If you are in NYC your families security should be more important than any money you might make.
Every indicator I see says disaster ahead.
Canned Heat's Alan Wilson wrote, "Going Up the Country." I would be playing that tune in the bus on my way out of town.
"Food stamps and unemployment relate to welfare and structural problems in the US economy, not to combat operations.)"
Hahaha! Thanks for the laugh! I'm assuming you were telling a joke and aren't actually so lacking in common sense that you believe that vast amounts of money can be wasted without harming the economy. And military costs are far from negligible. See here: http://www.informationclearinghouse.info/article25206.htm - "More Than 53% of Your Tax Payment Goes to the Military"
Of course, if you are a weapons manufacturer or defense contractor, it's windfall.
Wikipedia: http://en.wikipedia.org/wiki/United_States_federal_budget
Of course, this does not reflect "liabilities" of some $100T for SS and Medicare (currently "off-the-books" as an intra-governmental transfer). Defense spending doesn't account like that (the money is spent the year it is allocated).
That red part of the pie chart should in all honesty be broken up as follows:
Defense: 1%
OFFENSE: 22%
There, fixed it.
Na they changed the name of the war department to the department of defense. It was fixed a long time ago.
Great post full of simple wisdom
Having caught up on this thread that provides the author with little feedback I say this:
"I once offered that Shock & Awe was a tipping point through a historical lens; as Baghdad blew-up on CNN, I somberly sensed America would never be the same."
Spot on. I mean I am an extremist in some ways; e.g. I believe Islam is an instrument of evil in the world, and I'm entitled to my opinion. But I was ashamed of the "Shock & Awe" moment as well. Bravado while taking human life showed stunning stupidity. Harry Truman may have slept like a baby after giving the go ahead for Hiroshima but he didn't name it "Here's Your Rising Sun."
"...to edge away from NYC. While I’m not the panicky type -- heck, some would say I thrive under pressure -- I would be remiss if I didn’t offer the respect of that honesty. I’m unsure of the genesis of this particular vibe -- quality of life or proactive self-preservation -- but the intuition is palpable and ever-present."
Also spot-on to me. e.g. I live and work in Manhattan and have grown uncomfortable with my elevator garage. I can't put it any better than that but there is the sense that the "pressure" is building.
"...some of the smarter folks I know are “going dark"...The thematic reasoning is straight out of an Ayn Rand novel..."
I am guesing "going dark" must now mean leaving the country? And where exactly is this mythical safe haven?
But all-in all a thoughtful piece that obviously hit some serious nerves with me.
Thanks.
Switzerland, New Zealand and Norway. Maybe Canada.
If the shit gets deep, Fiji or Papua New Guinea.
Reese Bobby
I guess we all forgot about the Invasion of Panama, or Grenada.
And Clinton blowing up that drug factory, to take our minds off Monica, which cost thousands of people their lives from lack of medicines.
Iraq was only for those youngsters out there.
No one recalls the Highway of Death from Gulf war 1.
Short memories.
Hey, I am not a pacifist. It is a tough world. What I object to is Reality TV War: "Cue the Shock and Awe on 3...Ready...Action!".
Highway of Death? Once we pull the trigger our troops stop when the other side surrenders. No moral hazard there for me. But I respect your opinion.
God Bless and Good Luck.
A corrupt leadership does not mean a nation is corrupted,just corrupted enough to think that the leadership could get away with it.Smoke and mirrors was all that was needed to gain resources for the end game,so what if a few military lives were lost think of the economic power.When the one superpower is out of control the results down the line are catostrophic but its the man in the street who picks up the pieces.
Anyone who was ashamed of America on Shock and Awe day is not an American. Period! And the first 43 Presidents of the United States would agree with me!
YaHoo! Especially Jimmy Fuckin Carter! WooHoo!
Not to Mention George Mother Fuckin Washington! BooYa!
Now where's my sister? I'ma horny!
If by "American" you mean a conformist, unthinking, shallowly materialistic, gadget-obsessed, blindly pro-establishment, warmongering, clueless zombie in thrall to the military-industrial-medical-financial complex and its sham two-party political manifestation (which actually holds a monopoly on power and illegally stomps on any challengers to its political hegemony), then I agree with you.
I am proud to not consider myself an "American" on your terms.
1. This is conscious and reminiscent of Atlas Shrugged.
2. This is unconscious and looks like rats leaving the proverbial ship.
Either way the outcome is the same.
Long time reader. First time commenter. I apologize in advance if this reads like a tout. However, as for alternative asset class, I recommend to check out domain names as an alternative asset class:
- Domains can be priced and traded in any currency.
- Domains can be operated from anywhere.
- Domains can be owned by anyone, and even via anonymous proxy.
- Domains have essentially no counter-party risk.
- Domains produce recurring, passive income, particularly when developed.
- There is a rapidly maturing secondary market.
- Unlike physical PMs, domains are weightless.
- And unlike physical PMs, if they "disappear", you can find them.
Simply described, domains are the raw land of the Internet. And while the offline economy is shrinking, the online economy is not.
Tshirts.com sold for $1.25 million in New York on Wednesday. Slots.com sold for $5.5 million earlier this year. Yet, every day, about 80,000 domains are abandoned by their prior owners.
Opportunities abound for speculative gain and capital preservation. A balanced investment portfolio could easily justify having 10% of holdings in income-producing domain names.
Educate yourself: http://www.youtube.com/watch?v=Z2HwPgmcvEM
Not sure why someone junked that. Interesting concept actually. I think I read a headline not long ago they are running out of them too. At first blush, I kind of like the idea. I've had a couple names I let expire and would love to have back, and I would be willing to pay for them.
The downside, again, at first blush, is the Wall Street fraudsters getting their hands in it.
There's only one little catch....there wouldn't be any free IPv4 addresses left to allocate them to by 2012. For the sake of coining a popular headline let us call it the 255.255.255.255 crash, a name which should make it go popular in mainstream media outlets.
http://upload.wikimedia.org/wikipedia/commons/c/cf/Ipv4-exhaust.svg
If there was a way to short the RIR pool that would have been the online trade of the century, alas these things do not trade, but dark pools of IPv4 liquidity with OTC characteristics may emerge to resolve the situation.
Capitalism requires a normal relationship between risk and return. In a low growth environment, why would those with stored up surplus capital risk it (capital expenditure and hiring) without a reasonable expectation of a return? Central planning or government intervention makes private planning extremely difficult - too much change creates uncertainty and shuts down private decision making because of too many unknowns. If someone takes a large risk for a low return and then is taxed at 50% on any gains, there is no incentive to risk the capital. It is that simple.
This is extremely dangerous because if investors and producers all become risk averse (2 trillion in cash on corporate balance sheets?) and cut costs to benefit themselves individually it creates a death spiral. Without an incentive tax revenues drop dramatically and reach a tipping point where the welfare state can't be supported. Eventually everyone is unemployed except those with access to the printing press as the businesses keep cutting costs to survive until there are no consumers left. Policy here is so important regarding taxes and offshoring as well as enforcing laws. If one organization is allowed to break the spirit of the law, most companies will be forced to do the same due to competition on relative profitability or be replaced (mortgage securities on NINJA's for example - everyone's doing it).
Money velocity is extremely low, SS COLA was 0% while government employees received a 2% wage increase. No inflation, no money velocity yet but since we are no longer on a gold standard there is no limit to printing - the only question is appropriate capital allocation instead of crony capitalism with the big banks getting all the loot and main street going broke. The helicopter Bernanke bucks are going into mattresses having no effect. I see the biggest threat from social order due to unemployment.
Todd is probably more intelligent than he is coming across on Iraq. Iraq was about both oil and the petro dollar, as it should be clear now it was not about WMD. It is very important that the folks here understand true power, a few bloggers get it. Ron Bloom is the Manufacturing Czar. He recently stated, “We kind of agree with Mao that power comes largely from the barrel of a gun. Debt can continue to increase as long as the interest rate continues to go down (interest remains the same and debt can go to infinity to buy time). If gold is the achilles heel of the financial system, the barrel of the gun can always go to a country with a nice vault full of gold. Fiat can be useful in that it is so flexible, while gold provides individual sovereignty - the shabby secret of the welfare state.
At some point they can change the system to carbon credits or some other system - fiat is just as surreal. The transition can be very tricky for those with surplus savings due to the buying power that could change going from dollars to carbon credits, rubies, hub caps, or whatever else you want to call the new system. We could save the system if we eliminated much of the debt - at some point it will become impossible to service. Another option is to allow supply and demand to settle - allowing housing prices to drop without shadow inventory.
It is ridiculous that banks now own more houses than people. Let me repeat that, BANKS NOW OWN MORE HOUSES THAN PEOPLE. It is a takeover as I have been saying, a system that converts ledger paper loans without deposits into physical real assets in foreclosures that go to the banks by default. I would gladly trade paper for real assets forever when back stopped by the government (big banks TBTF). If you still don't understand that the central banks are a private bank franchise working in concert and more powerful than individual governments, then you don't get it. When you are not audited and can print all the paper you want, the game is to exchange or trade that paper for real things - think monopoly.
Twenty years ago nobody thought the US could exist with trillions in debt. At one point people thought Y2K would create complete chaos, what did they do? They added another digit, just as they did to the debt clock. But nobody will buy our debt? We are already buying our own debt. It seems we can do what we want as long as we have access to natural resources and maintain social order (internally unemployment is a big problem).
Don't focus too much on the fiat system believing it can't possibly be X whatever. They are digits and could be whatever. Just like the market, it could be 15,000 dow tomorrow or 5,000 by TPTB through HFT, quote stuffing, round tripping, and 40-1 leverage. These operators are creating volatility not supplying liquidity, and it is ruining the market due to high volatility/uncertainty with hot money flows cross country.
I care most about maintaining my standard of living, buying power, and exercising my right to life, liberty, and the pursuit of happiness with a representative republic. If we transition to a new financial system, physical gold would most likely be a good transition store of wealth based on history. If it is an RFID chip with carbon credits, then all bets are off and it will be enforced with power in a police state "for your safety". They want a cashless society with everything tracked - facebook, ,gps, google, medical records, and financial records. 1984, minority report, brazil, etc...I am hoping for a triumph of individuals over the collective, but it looks like we are outnumbered.
Property rights are the foundation for all human rights, and I am concerned about our direction on many fronts. The whole of the law should be to protect property and prevent plunder.
The whole of the law should be to protect property and prevent plunder.
I assume that was a rushed statement that you didn't think through carefully? A law that protects only property owners, and serves only to protect the few haves from the many have nots? That's a great society you would end up with there. The vast majority having no access to the law. That's a situation to yearn for.
Is it plunder when the rich steal from the poor? Or does plunder exist only when the poor steal from the rich? Which should get the largest share of profits? Capital, without which labor would not be paid? Or labor, without which, nothing would get made? Age-old question. Oh to have universal robat coverage, so no wages would need to be paid. There's the makings of an excellent economy for you.
The French Revolution comes to mind.
Actually, Apololypse Now makes a great point with his statement. In a representative republic that protects the individual against the collective, it can be asserted that protection of private property (including oneself) and the enforcement of contracts is the *only* legitimate function of government.
This is a big topic, probably off-thread. However, you're touching on Hernando de Soto Polar's work, (Peruvian, champion of the "little guy"), whose entire premise is that the share-cropping poor all over the world only exist because they *do not* have access to capital, and *do not* have property protection, and *do not* have the ability to enforce contracts (more at: http://en.wikipedia.org/wiki/Hernando_de_Soto_Polar )
Bill Gates and Warren Buffet get old and die. Capital turns over (they are donating their estates). Three generations is enough to wipe out most every dynasty.
In contrast, when you *cannot* protect the gold watch given to you by Grandpa, and when the state can rewrite (or capriciously ignore) any contract, you have no protection whatsoever. You live in tyranny, where the plunderer is your government.
If nothing can ever truly be yours (including yourself), you are a slave.
. . .if only "three generations" were enough to wipe out the globalist agenda. . . Gates & Buffet donating their massive fortunes to "charity" really needs to be investigated more carefully, and understood. . .
Bill Gates funds stealth vaccines and poisonous "foods" - ostensibly for "third world" countries, but if you think they're not world-wide agendas then you need to do some more re-search (and I mean "you" in general, not you, Mikla - I like your posts, just loathe Gates!)
These men "donating" their fortunes to "charity" is bogus, the monies go to FOUNDATIONS with agendas, and the elite continue their works.
It's his money. He can use it get politicians elected, to pursue pet projects, to start a company, to chase butterflies, buy "massages", or even send it up his nose. I wouldn't bother investigating anything (from a government standpoint). Of course, I *always* welcome investigative journalists actually doing their jobs. (I hear that happened sometime in the past.)
I'm not a Gates fan either. He's not a genius, but *did* benefit from being in the right-place-at-the-right-time, with a $1M gift from Dad, a gorilla-arm business attitude, and a moron vendor that granted him all the rights. However, it's still his money, and he'll be dead soon. His foundation intends to be liquidated upon 50 years of his death (the capital will turn over). Perhaps most satirically, there's a chance his fortune is wiped out even before he dies.
I understand your point that his efforts may be harmful to society. However, I assert that other "charitable groups" actually promote things one might find quite offensive and harmful to society also. Those groups don't need to be investigated (by the government) either: It's their money to support the causes they have a right to advance.
I don't mind anyone standing in a field shouting whatever they want, with their own money. My resistance comes when I am forced to contribute towards something I fundamentally don't support. While Gates may be a jerk, he doesn't force me to do anything (nor does he have that power).
Statistically, yes, three generations and the money is gone. (The first generation earns, the second generation enjoys, and the third generation blows it.) What's interesting with Gates and Buffet is that they are actually *designing* their foundations to do that liquidation. However, I wouldn't care no matter how they structured them, because after they die a foundation's board will merely rape the coffers to undermine the mission anyway.
For the most port, the Gates foundation is in the "noise". It's a blip, like many other foundations, that will try to push society around for a relatively short period of time in the name of promoting an ego (i.e., a "legacy").
However, the other part of your quote, "the globalist agenda", is a bit more problematic. The monetary system is physically designed to be a ponzi, destined to enrich a few at the expense of the many, and destined to blow. On the bright side, we're at the "destined to blow" conclusion: You will happily be able to look back upon these times and tell great stories to your grandkids about the Greater Depression, walking uphill to school both ways, etc.
well, what can I say. . . if you believe that the uber-wealthy can fund "foundations" that target whole populations with their "perspective" (since agenda is not a good word for you), if you think Gates funding such "innovations" as the:
. . .that this is compatible with your value system, stealth drug delivery to whole targeted populations. . . then yeah, we're not on the same page at all, but best of luck to your grandkids - I chose not to have any. . .I'm not disputing your concerns. I share them. I am intimately familiar with what's going on in nanotechnology, bio-science, and drug delivery systems.
Specifically, your reference to stealth drug delivery to mass populations has tremendous potential for abuse (abominations at a currently inconceivable scale). Yes, these things are real. And yes, I accept the word "agenda" in discussing this topic.
However, I don't attribute them specifically to the Gates foundation: They are not a government agency, and won't make the call on deployment. I concede they may be called an "enabler", but there would be another enabler if it weren't for the Gates foundation. Rather, these are "current pushes" in the science, some for noble purposes, some more dubius. Who is backing these pushes mostly doesn't matter until we see who is deploying these "solutions". I don't have a remedy. I don't know how to stop these advances.
Similarly, I have concerns over artificial proteins that humans cannot process in genetically engineered food (leads to all kinds of maladies and hormonal imbalances), artificial and synthetic life forms, new amino acids worked into the genome, and most especially lab-created chimeras that open the door to diseases that jump species in a manner never before seen on planet earth (such as existing sheep and mice with 99% human DNA). Again, I don't have a remedy.
This isn't the Gates foundation as much as it is human hubris tinkering with things for which the implications are not understood.
I share your concerns. The threats are real. I'm merely amazed that citizens all over the planet defer such control of their lives to centralized governments that feel empowered to use such things en-masse without fear that the citizens will storm the halls of government with torches.
Yes, I fear the government far more than I fear the Gates foundation.
thank you for the above post, even though it makes me even more unsettled, agitated even. . . and, for what it's worth, it's not the "Gates Foundation" that concerns me as much as his Monsanto funding, and the monies spread round to those who do not bear his name / legacy. . . but you are correct, it is not just Gates who is behind this - he is just someone I can "link" to information posted, when there is so much more beneath the "surface" - from your words, I gather you are ahead of the (my) curve. . .
the existence of biowarfare, & all those who covertly fund it, can undermine my sense of equilibrium faster, and more thoroughly, than any financial collapse scenario written about here. . . if the poisoning is so deceptive, and so pervasive - how can one really prevent the undermining of body health / integrity? some of what I read is astonishing to me, even after years of research.
when the deliberate manipulation, poisoning of the sky, the atmosphere & air we breathe, is done so frequently as I witness now, it is absolutely crazy-making.
we do share a fear of government, nationstates with "official secrecy" acts to protect their underhanded actions from the populations, who, at this stage, are in no state to comprehend what is being done to them. . .
sigh. best to you mikla.
@ mikla above
Hernando de Soto did indeed write a great book showing what the poor can do to better themselves when they are unchained from government red-tape, etc.
Freedom works! And, a good general rule to note, the BIGGER the government, the LESS freedom and wealth we tend to have.
I have no problem with protecting property - ignoring for now the issue of how it was acquired, which is actually the most important issue. I was pointing out that Apocolypse Now's contention that the whole of the law should focus on the protection of property and the prevention of plunder would lead to an unstable society. Those with the means to plunder would end up with most of the property. The world has had societies like that before (and does now). Our constitution was created, in part, as an effort to help the U.S. avoid becoming one of those societies. For a while anyway, we have suceeded in making sure that capital did not end up with the lion's share of the profits, and so purchasing power was spread around. The evidence suggests that we have recently turned our backs on making sure capital and labor share profits equitably. As a result, purchasing power is becoming concentrated into fewer hands. That won't be good for the U.S. in the long run.
By definition, "protection of property" is the same thing as "prevention of plunder".
If my property is mine, then you can't plunder it.
Of course, I could spend my property however I want. If you are good providing value propositions, it could be that many people want to trade their property for what you provide, and I have no problem with you having lots of property. (After all, you'll get old and die anyway, as will I.)
IMHO, these are separate things. The US Constitution protected the individual from the mob. That's its sole job. It worked when it was in effect.
It *never*, "succeeded in making sure that capital did not end up with the lion's share of the profits, and so purchasing power was spread around". It had no distributive role whatsoever. Rather, healthy and productive societies have great social mobility (which the US had), and a massive middle class (which the US had), and great productivity (which the US had). What you describe as a positive goal in capital distribution is merely an example of what happens in a healthy society.
The Constitution promotes a healthy society. That is all. It has no redistributive role. None. By definition, any redistributive role leads to an unhealthy society (for a lot of reasons, principally because the human re-distributors are themselves imperfect, or more commonly, corrupt.) There is ample historical and current evidence of this: Societies with the greatest redistributive behavior have greater stratification of wealth, lower social mobility, and lower productivity.
The evidence suggests we have an unhealthy society. For all practical purposes, the Constitution is not in effect (e.g., states are no longer themselves sovereign, the Commerce clause ensures the Federal Government can intervene in any contractual obligation, and citizens are now legally the property of the Congress.)
As a result, you're seeing nothing *but* redistribution (both through welfare programs, and through a corrupt financial system). The middle class is being annihilated.
We agree.
The US Constitution ... *never*, "succeeded in making sure that capital did not end up with the lion's share of the profits, and so purchasing power was spread around".
All other courts in America exist only because of permissions granted in the Constitution. Some of these courts sided with labor and allowed them to lay claim to a more fair share of profits. As a result, purchasing power was expanded in the population. The Constitution made it all possible. That was my point. I'm not quibbling about any of the detail.
No. Article III of the Constitution established only the Supreme Court.
All other courts exist at the whim of Congress. Congress is free to disband all other courts. Indeed, it is Congress' job to exercise discipline over the court system (all but the Supreme Court), and they do an abysmal job (they do absolutely nothing).
For some strange reason, the three "co-equal" branches, with the court system intentionally the weakest of the three (because they are not elected, and thus are not accountable to the people), has perverted into an unquestioned authority within a single political institution known as the court system that has no review whatsoever as they spend the public's money and legislate over the citizens' lives (with no accountability of any kind).
You might be pleased with the redistribution and legislation provided by these courts, but it is outside their charter, outside the Law, and absolutely independant of anything in the Constitution.
You might be pleased that we have un-elected "philosopher kings" in robes that do whatever they want outside the bounds of the Constitution and the Law, taxing and spending and coercing behavior by citizens without any citizen representation, but such things have inspired revolution in any empire.
All other courts exist at the whim of Congress.
What document created the Congress? So, ultimately, what document is responsible for the courts coming into existance?
I did not say the Constitution created all other courts. I said the Constitution made all other courts possible. All other courts in America exist only because of permissions granted in the Constitution.
This discussion is getting far afield of the original point. I won't restate it here because it is clearly laid out in what I wrote above.
So-called Free Enterprise never results in an equitable distribution of profit between Capital and Labor all by itself. That equitable distribution must be forced. In our history, that forcing has been done through the courts in the form of labor agreements. Left to itself, capital will seek to keep most of the profit for itself. This is not good in terms of widely-distributed purchasing power in America.
Capital is now turning to extremely cheap labor in foreign countries in it's never-ending quest to keep most of the profits for itself. If the courts do not intervene, capital will succeed in doing this. And this will be even worse re. the goal of widely-distributed purchasing power in the USA. The profits paid to foreign labor will not increase the purchasing power available in the USA. The standard of living will rise in the foreign country, as more of its people find employment. And in the grand scheme of things, this is good for the foreign country. But we are not citizens of that foreign country. As citizens of this country, our interest should be in seeking the greater good for this country. Being populated by large corporations with their labor pools mainly offshore is not the greater good for this country. But that is the equilibrium that will be reached when Free Enterprise is allowed to operate unchecked by the courts. We are then left with this question: Which is more appropriate for Americans to do - seek the greater good of the corporations (by allowing our jobs to be exported to where labor is cheapest), or seek the greater good of the American people (by keeping jobs here)?
For better or worse, the courts are created by Congress, and Congress was created by the Constitution. The goal of that document was to bring about the fulfillment of the lives of Americans, not the fulfillment of the lives of cheap foreign labor. For a while, it worked.
In the difficult conversation about protectionism or not, it is useful to ask whose lives the Constitution was written to enhance. We have discussed elsewhere the logic of why a less-efficient system might end up being a more stable system. That same thought process works here. Being less efficient at maximizing corporate profits might lead to a more stable purchasing base. If we can recognize and acknowledge that the ultimate task of Americans is not to maximize corporate profits at all costs, we might just end up making America a better place to live. I'm still holding onto the idea that the Constitution was written to protect the American people, not corporate profits.
I write this as the owner of a business with worker-bees attached. Every penny I pay them is a penny that does not go into my pocket. So I know the drill.
Good to see you drop by again. I do not always agree with your arguments, but they generally make me question my own views, which is the point of a good debate. The site benefits from your presence.
oh FFS - whoever anonymously junked this needs to stand up, pull their panties out of their a@@ and get over themselves. . .
dejunked, and a thankyou for your posts here chindit13 - we may not always agree, but your words here are always thoughtful.
In a similar vein, I owe my wealth to pompous idiots like chindit13. Since I am unable to thank all of them in person he can be their representative: Thank You!
ReeseBaby, I find you to be both a boor and a bore. It would make for delightful homophonous irony if you happened to be a Boer as well --- then we need not worry about the fine phonemic distinctions between them all.
What’s your point?
That you have earned a status where I could care about your opinion?
That you find money boring but still favor ZH?
That you are a simple suck up who protects the people you perceive as your intellectual superior?
I have always risen or sunk to other people’s level depending on the circumstances.
I’m getting way down there with you girls…
Posted again for your reading pleasure, Bobby Two Bits:
"People may boo me, but when I go home and think of my money, I applaud myself."
Oscar Wilde said it better than your poor attempt at a pissing contest. In one of your earlier attempts to show yourself silly, you said that "presumptuous is a nice term for kind of stupid". You have presumed here, and, well, the definition you provided fits perfectly. Take pride in that; you got one thing right.
[doppleganger removed]
+ 2 Trillion AN
I wonder who you consider "they"...
If the war on capitalism is on, then "Keep your friends close and Enemies closer", A new term OMITI... Just make your cash, we all know that the political punks will be around, the key is to use them to create new forms of investment(s) ideas, which keeps the cash flow coming.....
By that time humans will be all over the universe and all that will be left on earth are the poor and criminals to fly into the sun on earth.
We are seeing the implosion of government run societies and possibly, the end of the worlds fiat currencies. Fiat currency is the real cause of this mess. However, this change will not be catastrophic, unless you are tied to the government, nor will this happen overnight. And, with just a few political changes, the tides will turn and you will see confidence again. It will also make for some interesting trades. However, the real question is how long can the political elite hold on without printing, borrowing, or taking others people money.
"Debt can increase so long as interest rates go down."
the bus is has gone off the cliff and it doesn't matter what seat your in. change to the left or right. go to the front or the rear of the bus, it doesn't matter. the person driving the bus is no better off than the people in the back seat. relax. breath deeply. own as little as possible. simplify and smile. enjoy the flight, because busses aren't very aerodynamic. if your not extremely rich, might as well have very little, because anything in between and your fucked. never let them take your smile and you win. your welcome
Come on people, focus on term limits. The rest of this is bitchy crap. It is the only way this country will be saved. 6 years for Pres, Sen, Congress. All 1 term. Understand the huge difference this will make. No Pelosis. No Stevens. No Rangels. No Boehners. No etc. etc. Just people coming in to make a difference with no pressure to get re-elected. Media circus every two years replaced by a serious 9 month (campaign to begin no earlier than 9 months prior to the election and will be public financed and, candidates have to take a basic exam) campaign every 6 years. Stop Whoretown.
Next, focus on cutting the budget by 25%. Everyone gets into the Chamber and does not come out until it is done. Sure, it will hurt but the markets will like it.
The current President can advocate these two agendas, sacrifice his re-election as part of the deal (or perhaps get one more year for transition out of it) and have a far better legacy than the one his handlers are going to give him at the current rate. And at the current rate, you ain't lookin too much better than W, which aint sayin much...
So, have the balls, sir.
George Washington stepped from power when many thought he might declare a dictatorship. That guy had the balls, for sure, and if saw what was going on right now in his town, he'd being doing a lot of deserved bitch slapping...as a matter of fact this will be the Bitch Slappers Party.
How to you propose to protect the naive one-termers from the slickness of the lobbyists? Under a one-term system, the lobbyists would probably end up sponsoring the candidates - in spite of your public-financed campaigns. How would you guard against that. At least now, the long-termers are experienced enough to know what to avoid if they want to avoid it. One-termers wouldn't stand a chance of knowing what to avoid.
Thanks for such a great post and the review, I am totally impressed! Keep stuff like this coming!...
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