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Guest Post: What Made America Great Is Now Killing Her!

Tyler Durden's picture


Submitted by Gordon T. Long

What made America great is now Killing her!

What made America great was her unsurpassed ability to innovate.  Equally important was also her ability to rapidly adapt to the change that this innovation fostered. For decades the combination has been a self reinforcing growth dynamic with innovation offering a continuously improving standard of living and higher corporate productivity levels, which the US quickly embraced and adapted to. This in turn financed further innovation. No country in the world could match the American culture that flourished on technology advancements in all areas of human endeavor. However, something serious and major has changed across America.  Daily, more and more are becoming acutely aware of this, but few grasp exactly what it is.  It is called Creative Destruction.

It turns out that what made America great is now killing her!

Our political leaders are presently addressing what they perceive as an intractable cyclical recovery problem when in fact it is a structural problem that is secular in nature. Like generals fighting the last war with outdated perceptions, we face a new and daunting challenge. A challenge that needs to be addressed with the urgency and scope of a Marshall plan that saved Europe from the ravages of a different type of destruction. We need a modern US centric Marshall plan focused on growth, but orders of magnitude larger than the one in the 1940’s. A plan even more brash than Kennedy’s plan in the 60’s to put a man of the moon by the end of the decade. America needs to again think and act boldly. First however, we need to see the enemy. As the great philosopher Pogo said: “I saw the enemy and it was I”.


 The dotcom bubble ushered in a change in America that is still reverberating through the nation and around the globe. The Internet unleashed productivity opportunities of unprecedented proportions in addition to new business models, new ways of doing business and completely new and never before realized markets.  Ten years ago there was no such position as a Web Master; having a home PC was primarily for doing word processing and creating spreadsheets; Apple made MACs; and ordering on-line was a quaint experiment for risk takers.  The changes in ten short years are so broad based that a whole article would be required to even frame the magnitude of the changes. What needs to be understood is that this is precisely what is destroying America. Let me explain.

The process of Creative Destruction is the essential fact of capitalism. It is what capitalism consists in and what every capitalist concern must survive within. America as the birth place of modern capitalism was rooted in a clear understanding of this process and the indisputable reality of survival of the fittest.

"CREATIVE DESTRUCTION: … the competition from the new commodity, the new technology, the new source of supply, the new type of organization – competition which commands a decisive cost or quality advantage and which strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their very lives”.

Joseph A. Schumpeter

From Capitalism, Socialism and Democracy (New York: Harper, 1975) [orig. pub. 1942], pp. 82-85:

In 1997 prior to the ‘go-go’ Dotcom era unfolding, America’s unemployment was less than half of what it is today at 4.7%.  At that time the US added 3 Million net jobs which reflected the creation of 33.4 Million new positions while obsolescing or cutting 30.4 Million old  positions. Job losses occurred in old vocations such as typists, secretaries, filing clerks, switchboard operators etc.  Hired were new occupations such as C++ programmers, web masters, database managers, network analysts etc. 

As the chart above illustrates however, the additions have fallen off precipitously while the job losses have stayed relatively flat. In 2009 job  losses were 31.0M and only slightly larger than 1997 which would be expected with further internet application development. New job creation however was only 24.7M which is dramatically lower than the 33.4 in 1997.

The result is 40.8M people on food stamps in the US, as seen below.

This net creative destruction chart reflects closely the US economic output gap.

Employment levels at 58.5% are now near 30 year lows and do not show any signs of significant improvement. This is despite nearly $13T in artificial stimulus to restart an economy that appears to refuse to restart or unarguably is minimally a ‘jobless recovery’.

Once again Tyler Durden and the folks at Zero Hedge did an excellent analysis of the July unemployment numbers by correctly adjusting for shifts in workforce participation. It is surprising that no one other than Zero Hedge understands how to properly assess the monthly labor rate. Their analysis, using government BLS numbers, is shown below and reflects an unemployment rate of 14.7% adjusted for workforce participation.

Is it any wonder Christina Romer as head of Obama’s Council of Economic Advisors resigned the day before the July Non-Farm Payroll numbers were released, when she once again would have had to spin and justify the unemployment rate to the media?


All the preceding graphics have been labeled with a December 1999 vertical bar. In every instance it shows a major cusp occurring near that point in time. The dotcom market bubble finally popped 3-4 months later. There are anomalies that create some distortions after this period, such as the explosion in both the residential and commercial real estate sectors that temporarily fostered massive hiring from brokers, agents, contractors, trades personnel, developers, etc. Much of this has subsequently been pulled back.


The short answer is the US is no longer innovating fast enough. Innovation needs to sustain its exponential growth to absorb the creative destruction job losses.  It no longer can. Mathematicians would have argued some time ago this was a certainty to happen, but precisely when this would occur however was the unknown.

We have been cutting Research and Development expenditures in the US dramatically. I warned of this in 2009 in my article: America, Innovate or Die! It has only gotten worse since.  Corporations may be reflecting minor cuts on their balance sheets in this area but it obscures the fact that the money is increasingly being re-allocated and spent offshore. Jobs and innovation follow R&D.

The Financial Times in the UK featured this global analysis to the right, which to the best of my knowledge never saw the light of day in any US publication. The rate of growth in research papers in the US is not keeping up.

Total researcher share is shrinking and falling further behind as the chart below demonstrates.

Even more alarming is the number of US patents being filed. Other than IBM and Microsoft the numbers are stunningly small. It needs to be fully appreciated that both IBM and Microsoft now have large numbers of major world class research facilities outside the US and the US filings numbers below are likely reflecting this (see America, Innovate or Die!).

“The numbers of engineering graduates in China and India far outpace that of the United States. In China, it is 600,000; in India, 350,000; in the United States, 70,000, and many of these are foreign students who, more likely than not, will be returning to their home countries.”

Senator Edward Kennedy  -- 10-25-05

Testimony - Senate Record

Let me relate a personal story if I may. In the early 90’s I was a Vice President of Engineering for a S&P 500 corporation in Massachusetts. This engineering facility in Massachusetts consisted of over 900 engineers supporting an enterprise with 28 facilities and over 10,000 employees. Today it is all gone. The towns in the immediate area of this enterprise also had major facilities of two other S&P 500 corporations. They are also both gone. There were companies in Massachusetts at that time by the name of DEC, Data General, Prime, Wang to name but four, that employed hundreds of thousands of highly skilled personnel. They are likewise gone. So where are the jobs to replace them?

Communities in this area now reflect those who have temporarily found jobs as a result of the over building of retail stores and malls during the last ten years in almost every available piece of land that could conceivably be built on. I walked into yet another Home Depot and found one of my former employees working in the electrical department who happened in the ‘90s to be one of the world’s best power supply design engineers. He told me there was one other with him from his old department. Both as I recall had Master’s degrees in electrical engineering.

The new technology in the area is now Bio-Tech. These new Bio-Technology corporations however only employ in the 5 and 10 thousand range of employees. Not the 100s of thousands that the four corporations I mentioned above once did.  These Bio-Tech players additionally have an extremely high percentage of Master’s and PhD level employees. What about the high school and/or college grads?  Few need apply. I personally see this demographic lined up for Dunkin Donuts application forms each morning while relaxing after my morning jog. More also out of work PhDs due to reduced teaching positions is not the solution. This is the state of affairs in R&D that our politicians don’t see nor fully comprehend.


I told you the above personal story as a way of leading into one of my primary goals in the early 90s as VP of Engineering of this particular operation. It was something called Cycle Time reduction. This is the process of shortening the time to market of products from concept to revenue generation. The chart to the right shows a graphical representation of this.

We were so successful at reducing this through computerization such as the implementation of CAAD-CAM-CIM, JIT, Kanban, TQM and a host of other acronyms that we were at levels approaching 80% of the following years revenue being forecasted to be derived from products still on the engineering concept boards. Margins and room for error were absolutely razor thin. The strategy was like the old three legged race at the community picnic. The faster some tried to run the more they tripped themselves up. It was a strategy where speeding up the process left unprepared competitors with a fatal competitive disadvantage. The fight for market share was intense. Though I had moved on, when the internet arrived and supply chain management was reinvented and overlayed onto the previous advancements, the enterprise was rapidly shuttered and moved to the far east. It is one, of no doubt, thousands of similar stories in America.  America’s ability to innovate and adjust to that innovation killed this American based organizational unit. The highly skilled, intense and motivated employees innovated themselves out of a job.


America used the rate of innovation as a foundation for its competitive advantage. Like the tortoise and hare however, the US can no longer maintain this rate and hence the advantage has temporarily shifted to the previous followers who are presently less impacted. America must once again innovate and change but now in a manner more fitting for the realities of this new decade. 

The product today is no longer the widget that comes off a manufacturing line and is stuffed into a box to be shipped to distribution centers for sale. The product today with short product life cycles and hundreds of new products is Intellectual Capital. Intellectual Capital is the knowledge of knowing how to do something. How to design and build something – not the actual ‘doing of it’. Until America forces corporations to account for Intellectual Property properly, the multi-nationals will continue to fully exploit this tax loophole. Even worse, America’s innovation will continue to be used against her. The cost of manufactured products today are less and less in labor & production and increasingly in materials and innovation. Capital is likewise shifting to be more intellectual versus financial. A major overhaul of accounting standards must be driven by our legislators or it will not be changed. It is not to the multi-nationals advantage to allow such a debate and shift to occur.

Unfortunately our law makers allowed this American asset to leave the US unrestricted, untaxed and without recourse. It was America who knew how to design and build a PC. It is fine for the product to be built where it is cheapest as part of free trade, but only when the cost of the knowledge or Intellectual property is priced in. Amortization of research & development must include the Intellectual property value as well. The Intellectual Capital was an American asset, not a corporate asset which left. Massive royalties should now be flowing to the US taxpayer today which would offset many state and local services cuts. Instead we are left with underfunded corporate legacy pension plans that the government in the years to come will no doubt pick up the tab for by likely hyperinflating the currency. Though it is too late to revisit the horrendous US failure of public policy in the past, it is not too late to prepare for tomorrow.


As I said in the beginning the US needs a bold new “Marshall” plan to fight the new destruction of creative destruction. Here is a starting point for public debate:

1 – If we can spend $165B bailing out AIG, then we can spend $100B (4 years of college @ 50K/year X 500,000 students) and guarantee everyone in America a college education to compete in the 21st century. Parents will start to spend immediately instead of presently being almost financially paralyzed with skyrocketing education costs.

2- Obama says we need to be leaders in Energy. OK. Where are the programs? Where are the 50,000 new university teaching and research positions ( 50,000 X 75K = $3.8B)? At $3.8B this is a rounding error compared to the banks TARP program.

3- 99% of all jobs in America are created by small business with less than 500 employees. Stop treating them like they are last on the ‘to help’ list after the banks, financial institutions and S&P 500 but first on the taxation list. S&P 500 paid almost net zero taxes, reduced US hiring, yet received the bulk of the governments bailouts. Small business is the golden goose that every administration seems determine to cook. What has the government done for small business other than burden them with Obamacare and the potential removal of the Bush tax cuts (most small business are directly affected proprietorships)? If you can’t immediately recite what the government has done to help small business as THE US employer (versus what they have done for the bank and financial lobby), then you understand the problem.

4- The number of Government employees, in addition to their salaries and benefits (federal, state & local) can best be described as out of control. According to a new study from the Heritage Foundation, U.S. government workers earn 30 to 40 percent more money than their private sector counterparts on average. So, in essence, the ‘servants’ make substantially more money than the taxpayers who employ them. Isn’t the system great? In fact, according to the study, if you add in retirement and health care benefits, the average federal employee now earns nearly twice as much as the average private sector employee.

5- Make Social Security and Medicare financially sound so Americas can believe and budget that it will be there for them. The public will spend and invest if they know they have a nest egg that really exists. The government is fooling no one. Kids learn that Social Security and Medicare is unfunded before their college freshman year today.

The stark reality of the shift from defined benefits to contributory benefits over the last decade is just now sinking in with the US consumer. They now have no retirement like their parents had. Retirement savings is something when added to college costs is leaving them frightened. Worried people don't spend money and when the economy is 70% consumer spending you have an economic crisis.  Political denial and the government attempting to paper it over with policies of extend and pretend are misplaced and will make the inevitability even more difficult to effectively address.

6- When did the American people decide to fund military operations in over 130 countries around the world? With 40.8M people on food stamps, something is seriously out of balance here but there is no public debate thought to be required by either party.

7- The US has no full scale strategic growth programs being initiated by the present administration. We have only financial stimulus or austerity programs. There is a big difference that seems wasted on Washington.

8- Washington and the lobbyists that control it have taken control of our government. Obama campaigned to stop earmarks which ranged in the area of approximately 10,000 annually prior to his presidency. In his first year they increased to the 11,000 range. This is not the change he promised as more pork increasingly flows.

9- For those that actually read it, Obamacare is not a solution for healthcare. It is a stealth income tax we will all soon get hit with. The Dodd-Frank Act is not a fix to what caused the 2008 financial crisis but rather is the most dramatic shift in centralized US government planning and control since the 1930’s. Both these bills were over 2000 pages compared to landmark bills historically being 25 – 45 pages. Indications are that few of our elected representatives actually read either of these documents. They simply voted party lines. As Sarbanes-Oxley dictates, CEOs must sign their corporate 10-Q reports to the government and are liable for it. It is a felony not to. Every elected official should also sign that he or she has personally read the entire act prior to being allowed to vote on it or it likewise will be a felony.

10- The Supreme Court recently over-turned major elements of the Campaign Contribution Reform bill. Washington and the media have now gone completely mute on this subject as politicians scramble for mid-term campaign money for media expense coverage. Maybe our elected officials should vote with the same urgency on this matter as they are presently on giving billions of ‘candy’ away almost daily to every financial disruption, state budget problem, unemployment benefit problem or sign of increasing housing default and foreclosure rates during this run up to the fall elections.

I could go on, but I think you get the message. America is afraid to be bold! We have no strategy, no plan, no funding and no leadership! In my days as a VP of Engineering you were fired for just one of these shortfalls.

Maybe we the public need to start doing some firing!

“The biggest political change in my lifetime is that Americans no longer assume that their children will have it better than they did. This is a huge break with the past, with assumptions and traditions that shaped us.”

Peggy Noonan: America Is at Risk of Boiling Over

Feature Wall Street Journal Op-Ed article - 08-07-10


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Thu, 08/12/2010 - 22:01 | 519120 New_Meat
New_Meat's picture

5000 Year Leap--Bitchez!

- Ned

Thu, 08/12/2010 - 22:06 | 519123 geopol
geopol's picture

Nice post TD,,but,,


This was America.... When a whale could place a two million $ bet with no ss number....

Thu, 08/12/2010 - 22:12 | 519127 GIANTKILR
GIANTKILR's picture

Nice, but you all fail to realize that this is all going as planned!

Thu, 08/12/2010 - 22:16 | 519135 geopol
geopol's picture

As planned??? I think I have a clue!!! Maybe you haven't observed my posts,,could be, as there are a tremendous amount of new arrivals here.. 14 weeks 1day..

Thu, 08/12/2010 - 22:58 | 519210 Cheeky Bastard
Cheeky Bastard's picture

^ This. Too bad most here dont know who you are geopol. A lot of newcomers who really dont have the slightest fucking idea about, well, anything. You did a superb job in keeping us old-timers up-to-date with your posts over the last year. 

Thu, 08/12/2010 - 23:19 | 519249 geopol
geopol's picture

CB,,,Forget about that....How are you doing? my comrade? I'm in the process of keeping tabs on Christopher Hitchens my good friend,,,He is amazing in fortitude.... as are you.. in the end we all go together...

When I see you,, it's my treat..Glenlivet,, tilt the glass and bring it back brother....


Thu, 08/12/2010 - 23:09 | 519232 GIANTKILR
GIANTKILR's picture

Dumbass! I have been here for some time. I decided to stop lurkin' and star shurkin' because things are getting serious. TROLL!!!!


(Not directed at be old school ZH)

Thu, 08/12/2010 - 23:36 | 519272 Frank Owen
Frank Owen's picture

Let us know when you figure out who that dumbass troll is. "star shurkin'" wtf.

Thu, 08/12/2010 - 23:41 | 519277 geopol
geopol's picture

As I indicated, 14 weeks 1day..of exposure...There is promise for private contention...

Fri, 08/13/2010 - 07:05 | 519494 GIANTKILR
GIANTKILR's picture

Make that 14 weeks 2 days! Long enough to recognize the elitist snots on a freakin' blog!

Fri, 08/13/2010 - 12:46 | 520120 Marla And Me
Marla And Me's picture

If you don't know who geopol is, then you haven't been around long enough.  This is getting to be ridiculous.  If you see Howard, Miles, CogDis, Cheeky, Dead Head, B9K9, MinnesotaNice, MsCreant, Project Mayhem, Chumbawumba (RIP), Gordon, Assetman, (and even Leo), just to name a few, please pay your respects.  You might actually learn something. 

Heck, he just gave you a massive clue as to whom you are actually dealing with below.  You are making yourself look like a fool.  We'd like to keep the likes of geopol around ZH.  Please don't make him regret his decision to post here.  Thanks for all your hard work geopol.

Fri, 08/13/2010 - 15:42 | 520642 geopol
geopol's picture

Marla And Me

My pleasure,

Thu, 08/12/2010 - 23:07 | 519235 Frank Owen
Frank Owen's picture

I have wondered for a while why you keep using geopol instead of your initials at least... Most of us read at least one of your books before stumbling across ZH.

Thu, 08/12/2010 - 23:34 | 519269 geopol
geopol's picture

Now you know... trekking to ZH through my books is the first step in the recovery..


geopol=geopolitical not WGT....Do you have any idea what it's like to fight the NWO??

Be in constant vigilance, like an owl... circling you head not to get must think that posting here is a mild joy to push info for the masses???.. I have a price to pay,,, not with your permission,,,but I put myself and my family in jeopardy in this process..



Now you know....Feel better???



Thu, 08/12/2010 - 23:47 | 519286 Frank Owen
Frank Owen's picture

lol, I've known for a long time and read STC about 5 years ago. I appreciate your work, and respect you - but your cover here was blown long ago.
"you must think that posting here is a mild joy to push info for the masses???" ouch.

Fri, 08/13/2010 - 00:22 | 519299 geopol
geopol's picture

Frank,, please don't think your not exposed here...ZH is no game,,this is now being regarded by the DC oligarchy in concert with Wikileakes,, we have a place to jump from..if the landing is not to your liking then proceed to the exits... My sense is that you might hang in there until we win....God be with you..

As I said ZH is no game..

Fri, 08/13/2010 - 08:10 | 519538 Clancy
Clancy's picture

I don't know who you are but you're scaring me.

Fri, 08/13/2010 - 00:25 | 519315 spekulatn
spekulatn's picture


Now you know....Feel better???


World Golf Tour, huh. Nice to meet you sir. Love the game.

You post some fascinating stuff, geopol. Truly.

Now, who the fuck is cheeky b?

Fri, 08/13/2010 - 10:55 | 519848 bookwurm
bookwurm's picture

Hahahaha,stroll thru the archives....

Fri, 08/13/2010 - 03:22 | 519400 Sudden Debt
Sudden Debt's picture

1 out of 300 people in America has a security clearance and works in a intelligence department.

If you look into this link, you see all the security departments in America. And to be honest... THAT'S A LOT! And companies like google who store all your private information, cell phone opperators... are not included in the list.

This is also a very interesting link. It shows where all these departments are locaded. What raises the most questions is Colorado

And when X marks the spot:,+Eagle+County,+Colorado,+Verenigde+Staten&ll=39.440402,-106.716642&spn=0.011965,0.02738&t=h&z=16


That shit just looks WEIRD! I make a joke. But the X means they took out that picture of the place. Someting they don't want us to see? :) So whoever lives over there I WANT TO KNOW WHAT IT IS!



NOTHING, and I mean NOTHING happens without government officials having something to do with it.

It's like the intelligence networks in the US are becoming more and more like the KGB in old Russia!

Now the washington post was going to publish US spending reports on US intelligence offices, but weeks later, I haven't seen any. Coverup?


Fri, 08/13/2010 - 06:12 | 519469 tgatliff
tgatliff's picture

It would seem you know little about he intelligence community. These guys are equally incompetent as our politicians. Yes, They do hire allot of consulting firms to build their networks, and extract massive amounts of information. Internally, though, only about 5% can put their pants on straight in the morning without assistance.

Thu, 08/12/2010 - 22:14 | 519130 LePetomane
LePetomane's picture

Great.  Now we have to buy the student vote.

Thu, 08/12/2010 - 22:16 | 519133 fearsomepirate
fearsomepirate's picture

Um, no, we're not being killed by creative destruction.  We're being killed by two things:

1. A credit expansion-driven boom that went bust-o.

2. A political class that is using the bust-o crisis as an excuse to stamp the government's boot firmly on the throat of capital.

Since the basis your analysis is bunk, so are your solutions.

1)  Even more federal money shoveled into higher ed is a horrible idea.  Graduating BAs already can't find jobs, showing that economic demand for your typical BA is about nil.  Paying for more BAs is the equivalent of China building cities that no one will live in--a huge waste of resources and an economic catastrophe waiting to happen.

2)  Did we become leaders in IT via government programs?  No.  We became leaders in IT because the industry appeared and expanded before the government could get its shit in gear and strangle it.  The way to become leaders in energy is for the government to stop strangling the energy industry with regulations and subsidies.  Assuming that we ought to be. Obviously, it's not economical for us to be the leader in every industry.  Division of labor, bitches!

3)  Why the hell should the government be "helping" anyone?  Government help for one man means government hurt on another man.  The best way to help small businesses is de-fuck the tax code and end corporate subsidies and regulations that squelch start-ups.

4) No argument.  Fire the entire DOEnergy and DOEducation, just for a warm-up.

5) How about we end both?  The programs have always been Ponzi schemes built on lies.  Dishonest rubbish belongs on the ash-heap of history.

6)  No argument; I agree. Let Europe fund its own defense and stop gloating about their awesome social programs.

7)  Full-scale government-managed strategic growth is a one-way street to economic hell.  How'd the government-managed growth in the housing market pan out?  Green energy in Spain?  How's housing going in China?  Government-managed growth by definition means anti-market decisions, it means the government picks winners and losers.  It means the government robs Peter to boost Paul's profits.

8)  Yup, Washington runs on bribes.

9)  Yup.

10)  Free speech, bitches, but what does that have to do with the economy?

Thu, 08/12/2010 - 22:30 | 519152 Monkey Craig
Monkey Craig's picture

Well said. I think this situation 'corrects' itself via a French revolution-like environment where Dennis Hastert characters get strung up.....tall trees and short ropes. Think of all the people that absolutely hate some of the previous presidents or even the current one (I'm agnostic re: politicians - they are whores at birth).

These problems don't get solved at a voting booth. If you think they do, then watch the HBO special Hacking Democracy. The entire economy is rigged. The middle class took the bait and swallowed it. We'll be lucky to follow the path of Japan. The Japanese had savings. All we have is debt and deficits. We are living in a situation more like the Mississippi Bubble / South Seas Bubble where paper money went kaput and central banks gained massive power. If peak oil, global warming, environmental destruction are as dire as I think they might be, we are so fucked.

Maybe Project Mayhem takes hold?

Thu, 08/12/2010 - 22:35 | 519160 suteibu
suteibu's picture

+ the national debt

Fri, 08/13/2010 - 04:43 | 519435 Seer
Seer's picture

"Since the basis your analysis is bunk, so are your solutions."

Pot calling the kettle black?

We're being "killed" because the system has one huge systemic flaw: that it only operates on growth and it's operating on a finite planet.  People who cannot get this fundamental right should not be allowed to comment on anything (other then the fact that they're cluless [or they are trolls for a failing system]).

Thanks for playing!

Fri, 08/13/2010 - 07:15 | 519498 Monkey Craig
Monkey Craig's picture

that it only operates on growth and it's operating on a finite planet

are you familiar with the Crash Course by Chris Martenson?  this is his premise for some of his investments, including gold

Fri, 08/13/2010 - 10:49 | 519835 fearsomepirate
fearsomepirate's picture

According to Malthusians like you, we should have all gone extinct long ago.  Nice try.

Fri, 08/13/2010 - 11:21 | 519907 AnAnonymous
AnAnonymous's picture

Malthus did not write about going extinct.

Fri, 08/13/2010 - 05:19 | 519453 lost in the usa
lost in the usa's picture

Thanks I thought I was nuts. All his cures are coming from an elitist stand point, not common sense.

One of the problems most have on this site is that everything is doom and gloom, not to say that it is not one of the best sites out there but still, not everyone has to grow to the moon and without an all powerful gov we would both grow at a natural rate, not on steroids up to a bust and all have a better life.

If you take out the force of the gov and just make force and fraud illegal and property rights supreme most of the rest of life will work itself out.

Everyone has different needs and wants, those that want to join the rat race and grow to the moon can, and the slackers could work for whatever it took to support themselves and still live a great life just because of general progress.

When you add the gov in constanatly raking off the top and growing faster is when we come up with the must grow scam just to keep the beast feed.


Fri, 08/13/2010 - 09:00 | 519597 stollcri
stollcri's picture

"If you take out the force of the gov and just make force and fraud illegal and property rights supreme most of the rest of life will work itself out."

If property rights are supreme, then innovation will eventually stop (I think this is one of the arguments against communism where property rights are supreme ... the people own everything). Companies will sit on their existing property rights, it is much cheaper than innovation. Capitalists, not innovators, like strong property rights because it gives them the ability to buy technology that they are not themselves capable of producing and profit from it indefinitely. Property rights are limited so that people cannot rest on their laurels, it forces innovation that is good for society.

Fri, 08/13/2010 - 10:52 | 519843 fearsomepirate
fearsomepirate's picture

In communism, there are *no* property rights. 

You know what happens to companies that sit on their existing property rights?  Disruptive competitors destroy them.  While not innovating is certainly cheaper than competing, it doesn't win new customers, or, in the long run, keep the existing ones.  People's needs and desires are constantly in flux, which is why the equilibrium that the old classical economists of the 18th century predicted never actually happened.

Fri, 08/13/2010 - 12:00 | 520017 WaterWings
WaterWings's picture

I hope you live in my current FEMA region so when this whole thing Balkanizes I'll have some solid hope for the future.

Great posts.

Fri, 08/13/2010 - 13:44 | 520269 lost in the usa
lost in the usa's picture

Sorry private proerty rights not the fake ones that are taxed away.


Fri, 08/13/2010 - 07:26 | 519501 Sean7k
Sean7k's picture

+10 This piece is a piece of crap. 

The government is the PROBLEM, not the SOLUTION.

You don't spend money you don't have unless you can show a return on investment.

Ask all the tin horn dictators we supported and thrashed in the third world with "development" projects how that worked out.

Schumpeter? Please.

The Federal Reserve and fiat money are the cause of EVERY economic problem in America today. Eliminate the FED and create sound money and you will create a sound economy.

Minimize or eliminate government and you will create a sound economy.

Oh yeah and as an added bonus: Liberty!


Fri, 08/13/2010 - 09:17 | 519618 DudleyDoRight
DudleyDoRight's picture

Minimize or eliminate government???  Hmm...going back to the 1890s, is that margarine really margarine?  Howz about present day: Lead paint on your kids toys???  What about fracking the marcellus shale with a solution of the most toxic carcinogens that seep into groundwater ruining wells for miles around.

No.  These examples demonstrate that the market needs the government because the market will seek to externalize costs, with the result that goods are overproduced because of the subsidy. Only governmental power has a chance at preventing cost externalization. The trick is to find the right balance.

Fri, 08/13/2010 - 13:53 | 520300 lost in the usa
lost in the usa's picture

What we have now when we incorporate and walk away after the problem, The gov lets you expand to infinity if you have to protect your own shit and get big there is a natural point somewhere where growth stops and you spend more time protecting you stuff where as with the gov they do it for you and the poor ones pay for it.

Lead paint that the gov let in, toxic waste from all the nuclear testing, FDA drugs that cost 500M, I would rather take my chances with consumer reports.

Fri, 08/13/2010 - 16:10 | 520713 lost in the usa
lost in the usa's picture

Open your mind and try a different thought process, take a class and see what you can learn or unlearn.

Fri, 08/13/2010 - 16:33 | 520777 DudleyDoRight
DudleyDoRight's picture

So I went to your website and read: "The vision of a truly free society, in which no one can legally violate the property rights of anyone, is one of the most exciting topics in libertarian analysis."

Let me ask, if I say you can't frack for natural gas on your property b/c your fracking will ruin my groundwater, am I violating your property rights? IOW, whose property rights prevail, yours to frack for gas or my property rights to clean water?

Love the junk, btw.

Fri, 08/13/2010 - 16:51 | 520809 lost in the usa
lost in the usa's picture

Did not say I had all the answers but the ones we have right now are not working, I frack and mess up your ground water I am violating your property rights which are possibly insured in a free society or I have enough energy to clean it up cheaply, or there is a covenant against it.

Sorry not the expert but the protection we have is not worth the waste and freedoms we lose.

Fri, 08/13/2010 - 08:53 | 519587 stollcri
stollcri's picture

"We became leaders in IT because the industry appeared and expanded before the government could get its shit in gear and strangle it."

Didn't DARPA fund the research that led to the Internet? What company would have taken the huge risk required for it to be implemented? Just like capitalists take roads for granted, this infrastructure would not exists without government. Furthermore, if this was left to companies (e.g. AT&T) then there would be not internet as we know it today ... the reason we had to pick up a receiver and place it on a modem in the early days of computing was because AT&T would not allow integrated modems (or answering machines, etc.) on its network. If we let companies rest on their patents then they will not innovate and they will inhibit innovation in the competition.

It is easier to inhibit the competition than to innovate, and that is what companies will do without intervention.

Fri, 08/13/2010 - 11:08 | 519874 fearsomepirate
fearsomepirate's picture

Defense technology doesn't turn into widespread consumer technology until the government gets out of the way and lets entrepreneurs do their thing.  So yes, the military-industrial complex invented both the digital computer and the Internet, but the technology wasn't going to go anywhere as long as the government exercised 100% control over it.  In other words, there's a reason Apple, Microsoft, Google, eBay, etc aren't government-sponsored enterprises.  But assuming neither the computer nor the Internet would have ever happened without the military is a huge assumption.  The science for a computer was already there, and analog computers were already in business use, so I doubt it would have been put off much longer.  Local networking developed rapidly in business contexts, and it was just a matter of time before national and international networking would have been tackled.  Japanese companies were already working on networked video game machines in the 1980s (Nintendo did some interesting things with the Famicom in Japan).  AT&T's monopoly was a government creation, but even if it hadn't been broken up, history already suggests Comcast would have been happy to jump on the opportunity to make more money from its infrastructure.

Lots of infrastructure is privately built, both in history and I'm not sure what you're getting at with that one.

Patents are government creation.  At least they have limited duration.

Thu, 08/12/2010 - 22:19 | 519134 Miles Kendig
Miles Kendig's picture

If federal employees make twice what private sector employees do then why isn't the author a public sector worker since talent follows the money.  I can only surmise this is the reasoning behind the line of folks looking to depart Wall Street and give up their partnerships at GS or MS to work at the SEC or the CFTC.

Thu, 08/12/2010 - 22:19 | 519139 geopol
geopol's picture

His corruption has bounds....//limitations..I feel bad for him..

Thu, 08/12/2010 - 22:20 | 519141 Miles Kendig
Miles Kendig's picture

Or perhaps the author is an SEC or CFTC employee that got rejected by the street....

Thu, 08/12/2010 - 22:28 | 519151 geopol
geopol's picture

Fuck the street,,,have ethics or cash in the chips....Who are we talking to?, fucking children?? STREET=SEC,,,,,CFTC=STREET


Fri, 08/13/2010 - 12:08 | 520035 fearsomepirate
fearsomepirate's picture

Because getting a federal job is about connections, not talent.

Thu, 08/12/2010 - 22:36 | 519136 Monkey Craig
Monkey Craig's picture

Where is RobotTrader with the posts of hot chicks that make America great? On a more serious note, what made America great was a government that allowed the private sector to function. Ever since the Fed's creation in 1913, we have been subject to central planning mandarins.

Fri, 08/13/2010 - 04:48 | 519437 Seer
Seer's picture

I agree with the need for RobotTrader's presence, but...

What "made America 'great'" was the fact that it had vast amounts of untapped PHYSICAL resources to exploit, and that as time went along that which it didn't have it was able to coerce from others.

The reentry into the long dive occured in the early 70s when it went off the gold standard AND peaked in its production of oil (resulting in an inverted cash flow from an all-important energy standpoint).

Fri, 08/13/2010 - 07:27 | 519500 Monkey Craig
Monkey Craig's picture

Seer - (two things completely unrelated) Let's not downplay the role that freedom played in America's rise. However, right now we are seeing fiscal and monetary recklessness. In fact, my belief is that we are headed full speed towards a currency crisis. This will undoubtedly change the new world order. 

I still think we have untapped resources in the US and Canada...of course these are destructive to the environment and expensive (use large amounts of energy) to extract.



Fri, 08/13/2010 - 07:38 | 519508 Sean7k
Sean7k's picture

You might want to define freedom. The majority of Americans never saw freedom. The only freedom that existed was the freedom to create sweatshops and crush the workers with militias when they complained. 

The freedom to exploit resources with no concern for environmental damage or health threats. Resources gained by government bribes and influence peddling.

Please read alternative histories that portray a different America. One that abused its' Native Americans, Blacks, Women and a parade of immigrants brought in to maintain a continuous downward pressure on wages.

Finally, look around you at the police state you now live in. The Two party fantasy/ one party reality of state socialism. 

America is distinguished only in having changed one type of elite structure (monarchy) for another (democracy). Do consult Socrates- he will tell you democracy is worse than monarchy.

Just because the leaders portray themselves as philosopher kings, doesn't mean you cannot pierce the veil of illusion.


Fri, 08/13/2010 - 10:08 | 519718 DonnieD
DonnieD's picture

What also made America great was at the end of WW2 the entire developed world was obliterated except for us. The next 20-30 years were generally prosperous. Then we started dealing with the fallout from the entitlement society. Now we have entered decline if not outright collapse.

Fri, 08/13/2010 - 17:27 | 520871 jakoye
jakoye's picture

We have the energy we need. The US has the largest coal reserves of any country in the world. Coal can be turned into diesel fuel. We have the resources to achieve energy independence, we just don't have the leadership or the will to do it via coal.

A lot of the resistance comes from the environmental lobby. I understand their point of view, but the well-being of my country is at stake here. We must develop the resources we have in abundance. Cheap energy is the base upon which our economic growth is derived.

Thu, 08/12/2010 - 22:18 | 519137 faustian bargain
faustian bargain's picture

I saw nothing in his list of 'changes' that even mentioned the Federal Reserve. He totally ignores monetary policy in his proposals.


full scale strategic growth programs

??? really? More spending and control? Where is this growth going to come from? Taxpayers? Or maybe the Fed is going to bankroll it with printer cartridges?

I don't think he understands the nature of the problem.

Thu, 08/12/2010 - 23:05 | 519228 Bartanist
Bartanist's picture

A comment on the Fed. The Fed and the bankers are more powerful if everything and everyone else in America is weaker. Mission accomplished.

There was a time in the US when "payback period" meant something. I never hear that term anymore. All you hear is coverage ratio.

In a class that I took at Wharton they brought up the Marriott case study in which the lesson was that: Yes, a company could show greater profit with a higher leverage ratio, but there is more risk associated and the risk adjusted cost of capital should be higher ... taking this "risk adjusted cost of capital" into consideration, risk adjusted profit is no higher.

No one even thinks in these terms anymore. No one thinks about paying off the cost of an acquisition (or a move to China). It is all about whether you can cover the interest and how much more it will be worth when you sell it (Ponzinomics).

Fri, 08/13/2010 - 05:01 | 519440 Seer
Seer's picture

"Where is this growth going to come from?"

Growth comes from extraction and application of wealth-producing resources in excess (amount exceeding maintenance of existing systems).  Since we're in decline in nearly every physical resource category, one would have to conclude that growth is dead.  But...

If you mean growth not in the aggregate, then yes, "growth" can happen, though really what's going on is just a shifting of existing "wealth."

The accumulation of excess wealth that we've witnessed (much pretty bogus) can be attributed to energy.  The ability to do work is the real engine: and that's what govt bases its debts on, the ability of future generations to perform work (once this meant actual labor, then it was replaced by ability to obtain stockpiled energy [fossil fuels], only to eventually revert back to human labor).

Fri, 08/13/2010 - 05:40 | 519462 lost in the usa
lost in the usa's picture

We do more with less all the time, If we are truly stuck on this little world then you are right at some point we run out of energy, but that would be political not technical, the earth is 8000 miles to the core we get lucky and dig down 1 mile in one area of the earth and think we are out of resources. We do not know shit yet and who knows what we will find.

Go to space and there are trillion dollar asteroids out there, just get the gov out of the way and another greedy capitalist will figure out a way to get it here.

Go nuclearand we have more power then we need at the moment, hell just build a giant water turbine, wind mill and stick in a hurricane and one or two of them put out as much energy as the world uses in a year.

It is not resource or just technical it is capital and freedom to use it. Case in point would be Africa lots of capital --- oil, gold and diamonds, for capital and technology from the rest of the world but no freedom or property rights= most people starve or live like dogs.

Fri, 08/13/2010 - 07:29 | 519504 Monkey Craig
Monkey Craig's picture

 the earth is 8000 miles to the core we get lucky and dig down 1 mile in one area of the earth and think we are out of resources. We do not know shit yet and who knows what we will find

well said!

Fri, 08/13/2010 - 10:08 | 519719 trav7777
trav7777's picture

NO.  Complete bullshit.

Fri, 08/13/2010 - 10:50 | 519839 AnAnonymous
AnAnonymous's picture

Not only lost in the USA.

Go to space and there are trillion dollar asteroids out there, just get the gov out of the way and another greedy capitalist will figure out a way to get it here.


This one for example. You know, the official story that the US went to space to beat USSR hides the primary cause.

Expansion is nothing new in human history. People knows how it works. How it ends. Expansion works wonderfully well until there is no room to expand in.

It's been 500 years people know the world is finite. It's been 300 years since people admitted that expansion would hit the wall.

Fact: in spite of this, in the west, people opted to expand because they could and have to stop expanding because they must.

So back in the 1950s, space was perceived as a way to bypass the Earth's limitations to expansion. It was all about space conquest, id est expanding into Space.

But various studies yielded that it was a pipe dream. People wanting Space have to funnel Earth's wealth into manage it. The end result is that you make Space wealthier and Earth poorer.

Of course, after this massive failure, instead of telling that expansion could not go through Space, people prefer to masquerade it as a big victory over Communism, USSR or stuff like that.

The primary concern was about continuation of expansion through Space and the answer returned was that it would yield the reverse effect to the one expected.

Africa is wealthy as the Moon was thought to be wealthy in the 20th century.

Quite a lot of people  tried their luck in Africa for food.The Europeans, the US citizens, the Russians, the Chinese... None of them managed to produce food on terms that would not require importation of matter from outside of Africa. Not one of them. All of them only managed to put up a system of subsidized food production.


Thu, 08/12/2010 - 22:19 | 519140 TooBearish
TooBearish's picture

Very bold - suggesting Amerika have an industrial policy is almost as logical as having an energy policy, which we haven't for 40 years.

thanks for the suggestion - until the lobby $ from the all powerful financial and defense sectors are outlawed the political power elite will continue to firmly entrench themselves.

Sarcasm button on mute now.

Thu, 08/12/2010 - 22:22 | 519145 Apostate
Apostate's picture



Thu, 08/12/2010 - 22:30 | 519153 Rotwang
Rotwang's picture

If Eagles were pressed into circulation, and allowed to be accepted at face, true devaluation would arrive immediately. FRNs would be treasured for their legal tender tax offsetting function.

Not likely to happen. Yet.

Thu, 08/12/2010 - 22:33 | 519154 papaswamp
papaswamp's picture

Well that pretty much covered it. Though I would have to say the consumers desire for huge credit and the home is a bank really helped screw things up. Coupled with ever massive regiulations and restriction forcing jobs over seas...there would have to be a whole sale clearing of congress and completely new blood with new mentality brought in...realizing their decisions will be political suicide...even though it needs to be done. Noone wants to cut the leg off even though it is pinned under a boulder.

Thu, 08/12/2010 - 22:32 | 519155 wesa
wesa's picture

Good post with some good ideas.  There are definitely a lot of ways to spend $Billions more effectively.  No real changes will occur unless we (the voters) elect a whole new category of people to represent us. 

Thu, 08/12/2010 - 22:36 | 519161 Troy Ounce
Troy Ounce's picture

Are there any Americans on this site?



"The biggest innovation would at the moment be a strong 3th option for the november election. But nothing is happening? Why?

How are you going to show them all your middle finger?"

OK, that's 2 questions

Thu, 08/12/2010 - 22:47 | 519177 geopol
geopol's picture


Fidel Castro Warns of Imminent Nuclear War; Admiral Mullen Threatens Iran; US-Israel Vs. Iran-Hezbollah Confrontation Builds On Multiple Fronts
On July 21, the present writer offered the evaluation that an attack on Iran by the United States and Israel was now emphatically back on the agenda after a two-year hiatus.1 More than two weeks after issuing that warning, it is possible to offer a second installment of evidence to buttress the original finding. The author considers that this evidence is now sufficient to confirm the July 21 analysis. The contours of the coming conflagration are becoming somewhat more distinct, and give us reason to fear not just a Middle East regional war, but possibly even a world war, with increasing danger that nuclear weapons will come into play. Fidel Castro Convokes Parliament, Issues Dramatic War Warning

The most dramatic and outspoken confirmation of the views expressed here on July 21 comes from Fidel Castro, the first secretary of the Cuban Communist Party, and the de facto head of state of Cuba. During the spring and summer of 2010, Castro has referred several times to the growing war danger among the United States, Israel, and Iran. On August 8, Castro took the unusual step of convening a special session of the Cuban parliament to discuss the nuclear war danger threatening the peace of the world. Essentially, Castro called for the worldwide mobilization of peace-loving forces to avoid the worst, and included a special personal appeal to Obama.

Castro: Hundreds Of Millions Of Deaths

According to the Cuban News Agency, this war avoidance agenda ‘was the purpose of the Cuban Revolution leader’s address to the Cuban parliament summoned for an extraordinary session in Havana, due to the urgency of mobilizing the world, faced with the danger of a nuclear war that would be triggered by a US-Israeli led aggression on Iran.’ Castro said that Obama, ‘in the instant he gives the order, which is the only one he could give due to the power, speed and countless number of missiles accumulated in an absurd competition between powers, he would be ordering the instant death not only of hundreds of millions of people, including, an immeasurable number of inhabitants of his own country, but also the crews of all US ships in the seas near Iran.” “Simultaneously, the war would break out in the Near and Far East and across Eurasia,” said Fidel. Otherwise, if the war breaks out, the current social order will abruptly vanish and the price will be much higher, Fidel warned.’2

Whatever one may think of Castro personally and politically, he is unquestionably one of the longest-serving national leaders in today’s world, and brings to the table his experience during the Cuban missile crisis of October 1962. Castro knows, in short, what a nuclear confrontation looks like from the inside. The American public would do well to put aside the arrogance and impudence of the US mass media and pay attention to why this sick old man is putting so much of his flagging energy into an attempt to alert the world to a danger which is being widely ignored.

US Media Blackout On War News Like Summer 1914

Not surprisingly, the controlled Wall Street news media in the United States did everything possible to trivialize, denigrate and ridicule this dramatic warning. Frivolity and inanity rule US news coverage this summer. The National Socialists had a word for this – Nachrichtensperre, the embargo of real news. To the extent they noticed Castro at all, the US networks focused on the state of Castro’s health, and on the soap opera rivalry between Fidel and his brother Raul, who had replaced him in the presidency several years ago. The account posted on CNN, in particular, avoided any direct reference to the questionable looming nuclear war until an oblique allusion in the final paragraph. The Time magazine article gave the war issue half a sentence, with no elaboration and no explanation. Many newspapers relied on the Associated Press wire account, which did everything possible to downplay the urgency of Castro’s theme. This policy was typical of the attitude assumed by the US media starting several months earlier, which was to assiduously avoid the troubling hard news being generated in the Middle East in favor of an exclusive focus on domestic social wedge issues, including the New York City mosque, gay marriage, and the Arizona immigration law. The result is that the American people, somewhat like many Europeans of August 1914, are essentially living in a dream world, even as the momentum for global tragedy builds up in many corners of the globe. When the shooting started in August 1914, many in Europe were surprised, having thought that the Sarajevo incident of several weeks earlier was no longer a current concern. For those Europeans, the shock of reality came in the form of declarations of war and mobilization decrees. For today’s world, the shock may be even more abrupt.

A Flurry Of Incidents Along The Main Fronts

The clash which is materializing pits a group of countries including most probably the United States, Israel, the United Kingdom, Saudi Arabia, the United Arab Emirates, and perhaps some others against a rival coalition including the government of Lebanon, the Hezbollah organization, Iran, and Syria, joined by guerrilla forces in Yemen, Somalia, Iraq, Afghanistan, Pakistan, and elsewhere. During the past two to three weeks, unusual military incidents have occurred at the main flash-points where these rival coalitions are likely to collide

Israel-Lebanon Border Shootings: A Warning From Hezbollah?

The tense border between Israel and Lebanon is clearly one of these flashpoints. Here the Israeli forces confront a combination of the Lebanese national army along with independent units of heavily armed Hezbollah fighters. On August 3, this border was the scene of the most serious shooting incident since the Israel-Lebanon war of four years ago. A firefight started after the Israeli army began pruning a tree along the border. An Israeli lieutenant colonel was killed, an Israeli major severely wounded, and several Lebanese soldiers and a journalist killed. The casualties among Israeli officers suggest that this incident was a warning delivered by Hezbollah against the Israelis in the general context of rising tension. According to the Chinese news agency, ‘Israeli Defense Minister Ehud Barak on Wednesday said the “unplanned” border clash on Tuesday between Lebanese Army Forces (LAF) and Israel Defense Forces (IDF) soldiers would not widen into a real crisis. An Israel Defense Forces (IDF) officer and four Lebanese were killed on Tuesday during a border clash, the fiercest one since the fighting between Israel and the Lebanon-based Shiite group Hezbollah four years ago.’

According to press accounts, the United States quickly intervened to prevent the Israelis from making this clash the detonator for military operations against Lebanon and possibly Syria on a larger scale: ‘The United States … voiced “greatest concern” over the deadly military clashes along the Israel-Lebanon border, urging both the Israeli and Lebanese sides to exercise “maximum restraint.” “We deeply regret the loss of life; we urge both sides to exercise maximum restraint to avoid an escalation and maintain the cease-fire that is now in place,” State Department spokesman Philip Crowley told reporters at the daily press briefing.’3 The shooting may have been connected to the imminent delivery of a United Nations report on the assassination of former Lebanese Prime Minister Rafik Hariri, which is expected to accuse Hezbollah. In a sign of continuing tension, Israel on August 8 fired warning shots at a Lebanese fishing boat in the eastern Mediterranean.


Middle finger exposed... can you see?


Thu, 08/12/2010 - 23:02 | 519221 jdrose1985
jdrose1985's picture

Thank you, Geopol. Really informative stuff, I appreciate your work. I take it the Tarpley site is yours, I have bookmarked it accordingly.


Thu, 08/12/2010 - 23:49 | 519287 geopol
geopol's picture

Thanx my friend...jdrose1985, we will win,,,,was 85 your degree date?? if so my congrats...

we live in a fucking whirlwind of delusional gulag..



Fri, 08/13/2010 - 04:15 | 519421 THE DORK OF CORK
THE DORK OF CORK's picture

How about the engineer / scientists of the late 1950s.

These guys had imagination and the ambition to think beyond the conventional.

George Dyson on Project Orion | Video on 


Fri, 08/13/2010 - 08:33 | 519552 Treeplanter
Treeplanter's picture

Such brilliance.  Castro?  No, fool, you lost a long time ago.  Good timing that this coming collapse is coming after Castro-Mussolini style socialism has been thoroughly discredited in the USA.   You want a revolution that takes out the corruptocrats?  The Constitution is still the ticket.  More radical for liberty and justice than anything in a commie's wildest dreams.

Fri, 08/13/2010 - 09:57 | 519687 jdrose1985
jdrose1985's picture

Birth date. No degree besides what fine men such as yourself and many others have afforded me at very little cost to myself.

My sincerest well wishes, ride this out till the wheels fall off.

Fri, 08/13/2010 - 07:03 | 519308 Mercury
Mercury's picture

I can't take Castro seriously, sorry. 

And I can only imagine how sorry many others were who had to sit through his latest three hour stem-winder in the middle of July on the 23rd parallel.

This is the guy who once provided a platform for nuclear missiles 100 miles from the U.S. and now he's throwing out a kumbaya to all the peace loving peoples of the world, warning about dangerous escalation toward nuclear war?  That's rich.

If that evil fucker actually cared about anyone but himself he'd be gearing up the Cuban economy to take full advantage of the heavy healthcare rationing coming down the pike in the U.S.  I bet Indian hospitals wish they were 90 miles away from Florida.

Fri, 08/13/2010 - 07:31 | 519506 Mentaliusanything
Mentaliusanything's picture

As a person approaches Death they invariably look back into the past to make peace with the things that they have said or done. Castro is realising that Truth remains after the powerful pass. He, as he approaches his final moment has come to see that the answer to life is no longer confrontation but reconciliation for a life lived boldly but without connection with those who had an opinion that was viewed from a different prospective.

He know accepts he was wrong in some things but confirms he was right in others.

perhaps this might explain it - better

Do not go gentle into that good night, 
Old age should burn and rage at close of day; 
Rage, rage against the dying of the light.

Though wise men at their end know dark is right, 
Because their words had forked no lightning they 
Do not go gentle into that good night.

Good men, the last wave by, crying how bright 
Their frail deeds might have danced in a green bay, 
Rage, rage against the dying of the light.

Wild men who caught and sang the sun in flight, 
And learn, too late, they grieved it on its way, 
Do not go gentle into that good night.

Grave men, near death, who see with blinding sight 
Blind eyes could blaze like meteors and be gay, 
Rage, rage against the dying of the light.

And you, my father, there on the sad height, 
Curse, bless me now with your fierce tears, I pray. 
Do not go gentle into that good night. 
Rage, rage against the dying of the light.

when you understand you can speak

Fri, 08/13/2010 - 10:09 | 519723 Mercury
Mercury's picture

Yeah, Fidel is just full of contrition these days.

Fri, 08/13/2010 - 10:00 | 519696 obelisks
obelisks's picture

Being non- American i have been fortunate to travel to Cuba and North Korea and its quite enlightening to hear the " other side of the story " other than what USA tells the world .Open your mind !

Fri, 08/13/2010 - 10:28 | 519770 Mercury
Mercury's picture

I think yours just fell out onto your neck wallet and is now dripping over your open-toed footwear.

Robert Mugabe is probably just misunderstood and underappreciated too.

Fri, 08/13/2010 - 05:07 | 519443 Seer
Seer's picture

Neither side has power unless it has an enemy.  It's all a play to keep us occupied and allowing our hard work to be extracted from us to hand to the pols and defense contractors.

It's a real simple game, why people have to make it complex I don't know...

P.S. Yes, there ARE actual wars, but these are almost always against decidedly inferior forces (can you say Grenada? Afghanistan?), and are meant to hoist victory trophies on the mantle so that the large expenditures can be rationalized, that and so upper ranks can pin another one on their chests.

I think the word is hobgobblins...

Thu, 08/12/2010 - 22:48 | 519187 jdrose1985
jdrose1985's picture

A 3th option?

Can you please dumb that one down for me, I didn't attend an elite American luxury knowledge packaging institution...


Fri, 08/13/2010 - 05:53 | 519465 StychoKiller
StychoKiller's picture

I believe the poster was referring to a 3rd choice, other than the Decepticrats and Republicons.

Fri, 08/13/2010 - 06:08 | 519468 Seer
Seer's picture

It's the System!

"You never change anything by fighting the existing. To change something, build a new model and make the existing obsolete."

- Buckminster Fuller

Fri, 08/13/2010 - 08:36 | 519554 Treeplanter
Treeplanter's picture

Fuller's geodesic domes leaked pretty bad, like his views on politics.

Thu, 08/12/2010 - 22:38 | 519168 barthezz
barthezz's picture

Does anyone have a link to the labor force participation rate or a hint where to find it? thanks.

Thu, 08/12/2010 - 22:40 | 519169 Oh regional Indian
Oh regional Indian's picture

Very comprehensive telling of the story. But the solutions?

Actually even the telling of the story is a rose-tinted glass version.

What made America great was WAR. And if you look around you, it seems as if the "leaders" are trying to succeed through even more WARS.

That is THE elephant in the living room.

Take away the war aspect and suddenly everything looks more manageable.

But that is a pipe-dream.


Fri, 08/13/2010 - 05:56 | 519466 foofoojin
foofoojin's picture

I'm sorry. I love watching humans ripe each other apart just as much as the next guy.  but war for economic profit is just the broken window fallacy at a larger scale.  here a link.

The telegram, The phone and even TNT where invented with out war funds. Now the Internet would never of come into itself with out the NAVI and DARPA. so you get a point there.  but a bunch of hippies turned giant warehouses computers into desktops. and sure the GUI is Palo Alto research facility. But Palo Alto was not just military. 

I do not think the military industrial complex is providing innovation and growth, I think good old American greed is driving innovation into the military. you can be selling an idea or creating a product in a competitive market or you can be selling the idea to a war monger and have virtually no competition and they'll protect your intellectual property for you with a gun.  what would the rational person choose?

Fri, 08/13/2010 - 06:18 | 519470 Seer
Seer's picture

"war for economic profit is just the broken window fallacy at a larger scale."

Don't agree.  First you have to understand what drives ALL wars.  The common function is that of resource acquisition (either directly, or indirectly): I'd also add that the reason why the masses accept war is because it helps them to stay in denial that their resources are insufficient to maintain their lifestyles.

There IS economic gain, but it's just to smaller and smaller groups of people...

I WOULD agree, however, that destruction isn't productive, esp given that all such force tends to be via non-renewable energy.

Thu, 08/12/2010 - 22:42 | 519170 Atomizer
Atomizer's picture

We have cancer patients on life support

With only five years left until the 2015 deadline to achieve the Millennium Development Goals, UN Secretary-General Ban Ki-moon has called on world leaders to attend a summit in New York on 20-22 September 2010 to accelerate progress towards the MDGs



World Bank

Thu, 08/12/2010 - 22:41 | 519173 Misean
Misean's picture

"It turns out that what made America great is now killing her!"

HORSE SHIT!  What's killing the host is the parasite called the Feral Government. 

What pure unadulterated twadle.

Thu, 08/12/2010 - 22:56 | 519208 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

What is killing America is its leaders selling their own citizens out to the world. I believe that is known as treason.

Fri, 08/13/2010 - 06:26 | 519471 Seer
Seer's picture

And what's killing this planet is America: 4% of the population consuming 25% if the world's resources.  Yeah, how long do you think That can go on for?

Parasites are in our mirrors...  Always easier to pick something else out than look inward.

Thanks for playing!

P.S. Yes, the govt is a parasite, but it is, after all, "of, by, and for the people"

Fri, 08/13/2010 - 06:47 | 519482 Oh regional Indian
Oh regional Indian's picture

Well said seer. But fear not.

The consumption contagions is running fast and free here in the east too.

We're all in it together.... omission/comission and everything in between.



Thu, 08/12/2010 - 22:44 | 519174 Paladin en passant
Paladin en passant's picture

Paladin's five points for change:

  1. Nothing will change until everything collapses, so forget all your "points for change" (the political system is too corrupted to change on its own; and as noted above, most of your solutions involve more government interference in our lives.  The exact opposite of what's needed.)
  2. After the collapse, limit the government, at all levels, to no more than 20% of the PREVIOUS year's GDP
  3. Offer a constitutional amendment to require a balanced federal budget unless 80% of congress agrees by recorded vote (i.e. no "voice vote") to over-ride the limit for that year only
  4. Require the federal government to sunset any new law (including tax laws) after five years. Sunsetting laws may be renewed in five-year increments, but only by a new recorded vote with passage by 80% margin
  5. Elected officials and the top-paid 10% of permanent government officials must keep available to the public online, audited financial statements accurate to IRS accounting standards for up to ten years after they leave the employ of the government. Citizens and citizen groups who can prove fraud or malfeasance in these statements are entitled to 50% of the penalty and forfeiture. Individuals who are convicted under this law of fraud/malfeasance will be imprisoned for one year for each $100,000 of public money they will have been convicted of misappropriating or not reporting.
Thu, 08/12/2010 - 22:44 | 519176 jdrose1985
jdrose1985's picture

You had me until here...

1 – If we can spend $165B bailing out AIG, then we can spend $100B (4 years of college @ 50K/year X 500,000 students) and guarantee everyone in America a college education to compete in the 21st century. Parents will start to spend immediately instead of presently being almost financially paralyzed with skyrocketing education costs.

Uh, how about we try bringing kids out of high school with better skill sets than holding a spatula or wiping the ass of a person who would rather be dead, before we start talking about handing out even more college degrees certifying total lack of creative abilities or critical reason.

Thu, 08/12/2010 - 23:59 | 519297 Chump
Chump's picture

This.  Of course, doing this requires less government involvement and the capacity to let failures fail.  Sorry, some kids just don't give a shit, will never give a shit, and ruin the learning environment for kids who do give a shit.

Guarantee four years of college, free of charge, for half a million kids?  Way to ensure continued sky-rocketing of college tuition by creating false demand.  Then we get to deal with yet another influx of burger-flipping Art History or Communications majors.

While this article makes some good points, quite a few of the author's proposed solutions are painfully myopic.

Fri, 08/13/2010 - 10:17 | 519744 trav7777
trav7777's picture

Yes, but we can't have black kids failing and ending up by the tens of thousands in riots/waiting for Sec 8 handouts.

HS, therefore, had to be changed so that we didn't have a racial disproportionality to "failure," then we use college to remediate.  The problem is the legions of kids who end up in the latter not knowing that they really are mediocre and do not belong there.

College *now* is the result of parasitic drag trying to mediate the fact that 25% of our population is 3rd world stock with 3rd world IQ and 3rd world culture.  The cost of it all really IS the cost of trying to paper this over with diplomas.

Fri, 08/13/2010 - 10:40 | 519812 ATTILA THE WIMP

It's time to cull the herd.

Thu, 08/12/2010 - 22:47 | 519182 DarkMath
DarkMath's picture

I could have boiled this guy's article down to a few sentences. Allow me to do just that:

The Greedy MBA/Wall Street/CEO types decided to fuck domestically grown engineering talent by introducing and growing the H1-B Visa program. They figured out how to hire engineering labor at a small fraction of it's real cost. As a result the pay for engineers and scientists has been artificially suppressed so that no one wants to go into those fields. As a result America produces a huge annual crop of Lawyers, Physical Therapists and Yoga intructors. Well guess what? When you artificially suppress the costs with a Third World Labor Pool your country will rapidly become Third World. Ok, maybe just Second World. Either way it's too late now BITCHEZ!


See that wasn't too hard now was it.

Fri, 08/13/2010 - 00:07 | 519307 redarrow
redarrow's picture

What would you rather do? Use higher paid labor locally and compete globally?...See how far that would take you. If you want to sell globally you must hire globally.


Fri, 08/13/2010 - 09:22 | 519624 DarkMath
DarkMath's picture

Ah, no. That's not how it works. If you hire locally wages go up and more creative, productive people are attracted to engineering and the sciences. Those people produce goods that the world wants. Just look at Germany for how a large domestic investment in science and engineering produces growth.

Sell globally? How much medical software does India, China or Russia buy? How much CRM Software or supply chain management software? Answer: not a lot.

How many pharmeceuticals do India, China or Russia buy? Not a lot compared to the domestic market here in the US. Why? Because our higher standard of living enables us to buy more high end products.

Conclusion: Greedy MBA/Wall Street/CEOs suck cheap labor from abroad and pay it back with toxic US Treasury debt. Guess what? You all are getting played like chumps to let some asshole buy a 6 million dollar vacation home in Jackson Hole Wyoming. The last time I check the top %1 of American income earners control own about %70 of America. That ratio goes up every year. America is returning to the Feudal roots from whence it's first settlers escaped.

Fri, 08/13/2010 - 11:25 | 519921 trav7777
trav7777's picture


The executives outsource labor to increase PROFITS, NOT LOWER COSTS to consumers.

Prices DID NOT go down as a result of moving production...profits went up.  As the executive class has hijacked all corporations, they are making the business decision to pay themselves all the profits.

Back in the 50s, unions and shareholders kept profits flowing in larger shares to rank-and-file employees and owners (dividends).  At some point in Raygun years, the executive class did a takeover of the entire corporate world (inc union leadership) and it is at this point that their executive payscales began their meteoric rise, dividends evaporated, and employees started getting fucked.

You are not part of this class.  You would know if you were.  Because your dad would be.

Once the pressure from owners to deal favorably with employees and owners abated, executives decided to run corporations as their own personal Disneylands.  Toga parties, jets, multimillion $ offices, free living and vacations.  Nothing is too good for them because it isn't THEIR MONEY.  It's OWNERS' money they're spending.

Thu, 08/12/2010 - 22:47 | 519184 Gully Foyle
Gully Foyle's picture

With legal planning of their lawyer-advised banking leaders, the "haves" have now succeeded in cornering all the world's monetary gold as well as the preponderance of the world's petroleum resources - along with their refineries and world-around petro-delivery systems together also with acquisitions of all the atomic power-generating plants, originally paid for by the US taxpayers - and thereafter in severing the monetary system from the wealth system while marking up the negotiable equity value of gold and petroleum tenfold.

They also have contrived their own game of international monetary banking of international balances of trade and credit accounting, greatly aided by the priorly established existence of 150 "sovereign" nations around planet Earth.

That division of world political power into 150 sovereign nations is a consequence of thousands of years of successive and individually independent contriving of history's most powerful leaders. The number-one strategy of the successful leaders of history's successively established supreme socioeconomic control systems has always been to induce the spontaneous self-divisioning of those designed to be conquered and to keep them spontaneously self-dividing and their divisions lethally interarrayed against one another in order to keep them conquered.

The longer the self-divisionings can be self-perpetuating, the more spontaneously are the divisions accepted institutionally by the successive generations as being "natural" divisions ... The prime vulnerabilities of humanity, which make it subject to spontaneous self-dividing, are those of different speech patterns, skin color, religions, social customs, class or caste systems, political preferences and all varieties of individually unique "troubles", suffering and discontent.

The historical consequence of this aeons-ago-commenced employment of this grand strategy of 'divide to conquer and keep divided to keep conquered" accounts for the "natural" acceptance today by world peoples of the seemingly "God-given" existance of 150 sovereign nations of the world and their respective geographical division of all the world's dry land. ...

The plotted curve of the rate of gain for increasing proportions of all humanity being thus swiftly advantaged by the doing more for more people with less and less matter and energy per function - all accomplished with computers, satellites, alloys, etc. - indicates that 100 percent of all humanity will be thus advantaged before 2000 A.D. In less than twenty years (less than one generation) all humanity is scheduled by evolution (not by any world planning body) to become physically more successful and,metaphysically more interestingly occupied than have any humans ever been in all known history-provided that humanity does not commit ignorance-, fear-, and -panic-induced total-species suicide.

Why might they panic? All the present bureaucracies of political governments, great religious organizations, and all big businesses find that physical success for all humanity would be devastating to the perpetuation of their ongoing activities. This is because all of them are founded on the premise of ameliorating individual cases while generally exploiting on behalf of their respective political, religious, or business organizations the condition of nowhere- nearly- enough-life-support-for-all and its resultant great human suffering and discontent.

Reason number two for fear-wrought panic is because all of the 150 nations of our planet are about to be desovereignized by evolution; that is, they are about to become operatively obsolete - about to be given up altogether. There are millions in the U.S.A., for instance, who on discovery that their government was about to become bankrupt and defunct would become activist "patriots," and might get out their guns and start a Nazi movement, seeking dictatorially to reinstate the "good old days." If people in many of the 150 nations succeeded in re-establishing their sovereignties and all the customs-barrier, balance-of-trade shacklings, it would soon be discovered that the 150 nations represent 150 "blood clots" imperiling the free interflowing of the evolution-producing metals and products recirculation as well as of the popular technical know-how disseminating.

Fri, 08/13/2010 - 06:34 | 519475 Seer
Seer's picture

Concentration of power = FAIL  Yes, power is colluding (e.g. OWG), and yes, people will get sacrificed, but in the end it will fail: not enough energy to fuel the dead weight.

Thu, 08/12/2010 - 22:51 | 519190 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

This is symptomatic of the problems in America. Why work hard when you can pay someone a lot of money else where to solve your problems? Throw money into the casino known as the stock market. It will make you money. Wait.....there is a problem here. Our economy depends on producing things and innovating. Hmmmmmm. It is going to crash. Societies that consume more than they produce die! This is just another symptom of our leaders' out-of-touch understanding of reality.

Thu, 08/12/2010 - 22:50 | 519194 Atomizer
Atomizer's picture

Who was elected to aid in transition?

Who just passed a bill for education??

Achieving the Millennium Development Goals: Education is the Key Missing Link

Again, follow the rabbit hole. You will see the truth. Whether you like it or not.

Thu, 08/12/2010 - 22:56 | 519206 Bartanist
Bartanist's picture

I agree and yet disagree. The drive for ever increasing profit has killed the US. It is not innovation that killed the US. Innovation continues, but the profit mongers decided they could make an extra 3% by moving manufacturing to China.

Engineering follows manufacturing and R&D is paid for by manufacturing. GOVERNMENT GRANTS TO UNIVERSITIES WITH NO WAY TO COMMERCIALIZE THE PRODUCTS AND VENTURE CAPITALISM do not create jobs. Venture does not fund R&D. Venture tries to exploit existing R&D, looking for the BIG SCORE.

With no manufacturing base, there is no way to fund Innovation and no way to put it in practice. Creating employment without competitive advantage just does not happen. Virtually ALL of the competitive advantage now resides in Asia/China. The drive for profit expelled it from the US and now we are pathetically dependent on China for (almost) everything new. The exception might be military tools and financial gimmicks.

Fri, 08/13/2010 - 06:42 | 519476 Seer
Seer's picture

You got the fundamental right:

"The drive for ever increasing profit has killed the US."

But then fell in the "if we just roll up our sleeves and take back <blah blah> it'll all be better" trap.

Again, re-read your statement.  Key words: "ever," "increasing."  The thing to focus on is that profit is generated from increased output, and increased output cannot grow indefinitely on a finite planet.  You can shift around the pieces all you want (R&D, manufacture, whatever) between countries, but as long as the aggregate (world) profit (and output) is growing then that means growth in resource extraction, and on a finite planet This Will Eventually Cease, not because of any political action, but because of the physical world.

Thu, 08/12/2010 - 22:59 | 519214 lynnybee
lynnybee's picture

What happened !?   What happened you ask !?   THE COUNTRY HAS BEEN LOOTED, THAT'S WHAT HAPPENED !    Do the names Phil & Wendy Gramm or Robert Rubin or Larry Summers or Greenspan or Clinton or Hank Paulson (blah) remind you of anything bad happening to US TAXPAYERS !   Tax revolts will probably happen by the year 2012, it's got to be a total revolution & back to colonial days or we're all serfs.    

Fri, 08/13/2010 - 06:46 | 519480 Seer
Seer's picture

News flash: The Money (wealth) Was Never Really There!

All that has happened is that these folks led us to believe that increasing the consumption of non-renewable resources meant a better future.  Yes, better until it's not (when we've trashed the planet and exhausted resources).

Thu, 08/12/2010 - 23:08 | 519234 Atomizer
Atomizer's picture

Alice Bailey the founder of Lucifer Trust


Plan B

Who is Maitreya

I don't make this shit up folks


Thu, 08/12/2010 - 23:14 | 519244 Atomizer
Atomizer's picture

I figured by now.. Atomizer is just some tinfoil asshat. LOL

Addressing the United Nations Millennium Development Goals

Thu, 08/12/2010 - 23:25 | 519258 The Answer Is 42
The Answer Is 42's picture

Such excellent analysis and proposal is a very rare find!

I do have a few counter-points, tho.

1. "Give everyone in America college education". It's a nice sentiment but, sorry, it's just not realistic. If it's artifically forced down, then it'd cause similar disaster/destruction as "make everyone a homeowner".

2. And this brings the question of labor supply structure. The way it's been going, through globalization, is that US migrates up the value chain (hi-tech, finance, and service) and EM takes up the labor-intensive, polluting, low value-added manufacturing. The problem for US in this set-up is that the population cannot possibly be all in high value-added sectors, not unless we get to cherry-pick from the entire human population. Economic polarization and shrinking middle-class are inevitable results of an economy over-focused and over-reliant on high value-added industries. Broad participation is impossible in such a setting. Here one could argue that it's the nature of capitalism. It is in fact of the same nature as what happened at the early stages of industrial revolution when a few with the know-how and access to capital got richer and richer while vast majority of the populace quickly fell into urban poverty. Such ill effect of capitalism was eventually contained through a combination of anti-trust laws and organized labor, both of which had the effect of forcing broadened participation.

Now we're at the beginning of a second industrial revolution. How do we balance between innovation, profit seeking with broad participation to maintain a healthy, sustainable economic structure? This is huge issue and articles like this are excellent starting points.

3. Treating IP more like traditional assets is a great idea. But IP, unlike hard assets, has its own unique characteristics, like its tendency to spread and leak out and gets replicated with relatively little cost. The traditional patent-based regime probably needs some radical redesign.

4. Similar to laborers during industrial revolution, should hi-tech workers unionize? I'm very aware of the ill effects of labor unions growing too strong. But the flip side of the coin is that  hi-tech workers in this country has had no job security or collective bargaining power and stand completely helpless as big corporations outsource their jobs.

5. The root cause of the self-destructive effect of US innovation, as implied above, is not innovation per se, but rather the lack of balancing force against profit-seeking big corporations. Big corporations must be forced to retain the fruition of innovation done here, and allow broader participation in this country. Without such constraints, they'll only continue exporting more and more, and higher and higer-end jobs. Besides white-collar unionization, some kind of legislation is probably also necessary.

it's extremely unfortunate that the benefit of the last round of bailout has gone almost exclusively to big corporations. This is self-destruction.

Fri, 08/13/2010 - 12:24 | 520080 trav7777
trav7777's picture

IP is stolen.  We have laws to protect it as well as international treaties.  China chooses to ignore them and we choose to let them do so.

As far as IT  So long as the policy structure of the USG is to encourage offshoring, labor has no pricing power.  This situation is management's dream.  The problem is that management is no longer ownership.  Ownership are all of us and our 401ks and pensions.  They need to tell management to FUCK OFF and die!  Management took corporations, cut dividends, pocketed profits, and gave a share price ponzi to owners which collapsed.  Time to find new management.

US corporations have been wildly profitable but those profits have gone to managers instead of owners.  This is why we really need a stock market collapse to drive decisionmaking back towards dividends.  Dividends prove profits as they can't be faked once a company cannot raise capital.  But the orgy allowed managers to borrow money to pay themselves bonuses, which is exactly what they did.

America became the Bamboo Lounge

Thu, 08/12/2010 - 23:26 | 519259 Frank Owen
Frank Owen's picture

" chain management was reinvented and overlayed onto the previous advancements, the enterprise was rapidly shuttered and moved to the far east. It is one, of no doubt, thousands of similar stories in America."
Is this not a triumph of free markets? Free markets get the lowest cost per unit and social effect is not a factor. Who cares if nobody has a job other than selling i-phones and big-macs as long as I can get my widgets for a tenth of the price at fucking walmart?

Fri, 08/13/2010 - 06:51 | 519483 Seer
Seer's picture


Fri, 08/13/2010 - 12:31 | 520103 trav7777
trav7777's picture

You're a complete fucking idiot if you think the savings in labor costs goes into consumers' pockets.

Profits go to MANAGERS these days.  Not consumers.  Not owners.

Earlier smartphones were built in Korea or Japan usually from components made there too.  Then, production moved to China.  Did YOU see a massive price drop?  Nope.

The iPhone4 is still $600 like the original iPhone.  The economies of scale and competition have driven costs downward for most devices such as this, meaning you get more phone for your dollar, but this is *natural* deflation via increases in technology.  The point is that there has been no decrease in price due to the consolidation of labor usage in slave camps like China.  It's just meant more profits for corporations which meant larger bonuses for management.

Fri, 08/13/2010 - 15:10 | 520544 Frank Owen
Frank Owen's picture

I think you missed the sarcasm, and the point - which was how we got where we are. Kinda like how genetically modified foods were justified in the beginning - less losses to pests, higher yeilds for the farmers, cheaper food for the consumer - feed the world's poor. Of course it ended up with monsanto becoming the seed broker, pesticide seller and broker of the end product (not 100% sure on that last one). They reduced the farmer to an employee, the prices haven't changed, and Monsanto has a near monopoly and a shitload of money and power.

Thu, 08/12/2010 - 23:33 | 519266 TBT or not TBT
TBT or not TBT's picture

Not agreeing here.   Innovation is a side effect of Freedom, and particularly of Independence, and the search thereof.    We won't see more of it by doing item number one in the list, which is making Other People's Money available (via coertion!) to help further pump up the education bubble.     Had a good chuckle reading the chart showing Europe having more researchers than the U.S.   Sure it does, mostly funded by Other People's Money, directed by hierarchical hidebound government administration and subsidy, to no great innovative effect in the real world.   The higher education systems over there are "free", but serve mainly to mop up excess labor supply(of which socialism always generates a lot) and divert it into pathetically long studies of mostly economically fruitless matters.   Some of those fruitless matters are higher educations in more or less technical fields, to doctorates and beyond, that lead mainly to government paid careers as "researchers", i.e. lecturers.

Not even going to bother to go beyond point number 1.

What we need to restore innovation is a restoration of freedom itself, a corrollary of which is restoring the incentives that taxation and regulation are crushing out of existence.

Bill Gates dropped out of Harvard.   That was the serious, responsible thing for him to do.   (OK, Al Gore dropped out too, but you get my point)

Fri, 08/13/2010 - 02:59 | 519379 DrLamer
DrLamer's picture

"Innovation is a side effect of Freedom,..."

Agree, but ... when Billy Gates started to write not-his "Operating system", called MS-DOS, simply re-writing others-people-code (he was in California that time) God Creator warned USA by eruption of St.Helens mount near Seattle (where Billy Gates come from and where he will later place the HQ of Microsoft). It was exactly on that time: spring-summer 1980.

Later Billy Gates wrote "prophetic" books, "predicting" the bright computer future of USA and the world. Books were sold a lot around the world. But unfortunatelly for USA, Billy Gates is a false-prophet. Almost nothing described in his books came true.

Later it was figured by DOJ and IN A US COURT, that Billy Gates built his "innovation" company by illegal methods, by hidden illegal contracts with Intel. Later the same thing were figured with Intel itself.

And USA's society is still considering Billy Gates as "innovator" and prophet.

Guys, which "god" should help you, if your socity follows the false prophets *for decades*, including Billy Gates and Alan Greenspan?


Fri, 08/13/2010 - 06:56 | 519487 Seer
Seer's picture

I once lived and breathed hi-tech.  Now I see it as mere childs' play compared to sustainable farming.  Nature is the true marvel, man's toys are just that, toys.  The word "innovation" is nothing more than hedionistic talk...

Fri, 08/13/2010 - 07:06 | 519495 THE DORK OF CORK
THE DORK OF CORK's picture

I generally agree with your Malthusian analysis at this present juncture yet you seem to fail to recognize the effect that the rejection of big science and the boffin ideal had on future growth on this planet.

In the late 60s something major happened - the monetarists seemed to have turned something that looked almost unstoppable in a damp squib.

If capital could be directed back into large scale scientific and applied scientific endeavours we still may be able to pull this plane out of a terminal dive.

Thu, 08/12/2010 - 23:33 | 519270 Sherman McCoy
Sherman McCoy's picture

Fearsome Pirate and Paladin en Passant nailed it. Most of the other posts are junk. The solution is simple, starve the beast! If every American claimed 20 deductions  on their 1099, then paid their penalty in pennies, AFTER filing for all extensions, we could asphyxiate them.

Fri, 08/13/2010 - 07:02 | 519490 Seer
Seer's picture

It is said that the greatest form of defiance is in growing your own food.  For those who can really see why the infrastructure that the elites control is set up the way that it is it is quite clear: centralized food production- means that you're no more than an organ monkey playing for peanuts.  So, go ahead and crank up the virtual "deductions" and "starve" the "beast," but unless you're able to actually produce food it will be YOU who will be starving...  But, as is usually the case, most people operate in the "it's someone else that needs to change" line of thinking.

Fri, 08/13/2010 - 11:03 | 519862 AnAnonymous
AnAnonymous's picture

Dont take it back but I really hope that you start to recognize that the US government is less and less dependent on the US people to gain actual power.

 The USD strength does not come for US government power to tax the US people. Over the course of years,more and more US people  have been relieved from taxation obligations. The USD strength comes from the very fact that without USD, countries over the world could not get an access to world ressources. For a Chinese to buy Ghanan gold, the Chinese has to get USD etc...

The US People have no power to starve the beast as the beast does not feed on them exclusively. The US citizen matters less and less in terms of gaining power for the US government.

Ironically, the people who could asphyxiate them are also people that would be vilified by US people if they were to try.

Thu, 08/12/2010 - 23:45 | 519285 mpolito54
mpolito54's picture

I just googled Gordon T. Long. Here is what I found:

"Gordon T. Long is a former senior group executive with IBM & Motorola, a principle in a high tech public start-up and founder of a private venture capital fund.

A Canadian he has worked internationally before locating his activities to the Boston area of computer, communications & networking technology leadership. He is involved in International private Equity Placements for new technologies.

Mr. Long additionally conducts private proprietary trading applying breakthrough software technology utilizing proprietary Chaos Theory and Mandlebrot Generator algorithms. "

Well Mr. Long, I think you are part of the problem. When CEOs in this country need to explain why their R&D expenses are so much every 3 months to people like you and their Board Member, who the only thing they care is the price of the stock, how on earth do you expect innovation in this country? How do you expect innovation when Venture Capitalists expect at least 25% ROI in 3 years?

I was also part of a great organization back in early 80's, Bell Labs, which was broken up and eventually destroyed because it made no sense to Wall Street to spend 1 billion USD a year on research. Well, you should not be surprised that the rest of the world picked up on USA mistakes.

There will be no change in this country as long as people are paid for the “value” they produce with their labor and definitely your labor Sir, like the rest of “experts” that have flooded the media and Wall Street’s traders, is not worth a single penny.



Fri, 08/13/2010 - 02:25 | 519373 DrLamer
DrLamer's picture

Yes, I agree with users "mpolito54" and "TBT". While Mr. Gordon T. Long wrote a good artice here, which is far ahead of other "research papers" on Ter-net, the problem is deeper. These modern problems are wider than only "structural changes".Unfortunatelly, the liberation of US will come only when CEOs *and* ordinary people admit "We all been wrong. All our so-called "computer innovations" and "technology revolutions" are nothing more than a lie, shifting (with the help of mass media) our society to a computer idolatry".

Until that no plan will work. It will hurt a lot.



Fri, 08/13/2010 - 14:35 | 520447 trav7777
trav7777's picture

Bell Labs FTW.  I mean, transistor??? Scoreboard.

T. Long is a ponzi player.  Execs care about the share price because share price = bonus.  So they will fucking fire everyone, goose the EPS, take a huge bonus and watch the company die.  They get their golden BK parachute and to retain "top talent" during reorg. 

All the owners of corps got drunk with the ponzi instead of being satisfied with CASH FLOW.

Now, T. Long is a fuckin speculator doing HFT.  How droll; wtf is he gonna say about innovation if that's his idea of it?

Thu, 08/12/2010 - 23:54 | 519291 b_thunder
b_thunder's picture

Bachelor degrees from most universities are worthless!  Most graduates with BS in math cannot solve problems that are given on the ENTRANCE exams in top Chinese, Russian and indian universities.  Other than top 10 (maybe 20) engineering programs, the rest are a joke (sad to admit i have one of them.)

Higher education is not a right,a nd is not supposed to be one.  It's for those who want to  learn, and can learn. I'm soory, but not everyone can be a scientist. The goal shoudl be to encourage everyone to try it, and those who are both willing and able - the should have every opportunity to study. 


Fri, 08/13/2010 - 06:17 | 519397 DrLamer
DrLamer's picture

Yes, having a degree with USSR's university on math, economics and computer science, I can confirm this.

But another problem is that the old-fashined newcomers from USSR were ... mostly christians, and now the newcomers to USA from India or China are ... not. This "feature" does not make them "bad" in any way, but the USA were built as MOSTLY christianic country, with christianic moral principles in official law.

Newcomers from India or China are now trying to establish their mafia in US Universities (and companies) (you can call it "community" or "culture").  This is not a christianic principle. And US establishment allows them to do that. This is not fair.

As an amazing result you can clearly see the shift of US law into talmudic (multi-multi-pages) law, without the real law enforcement. You can ask why? Simply because the bridge between printed law and the law enforcement is governed by the very moral principles of a society.

You see? Your society is paganistic. And you are all pagans, barbarians. You are watching babrbaric movies, playing barbaric paganistic computer games. The heroes of the young people - are not Benjamin Franklin or John Adams, but imagined barbaric warriors from computer illusions. Now your society is going into illusion.

Fri, 08/13/2010 - 11:09 | 519878 AnAnonymous
AnAnonymous's picture

Funny one. Actually, the US founding principles went largely against Christianity.

Freedom of religion is not a Christianic principle. On the very contrary.

Equality among men is not a Christianic principle. The Bible supports inequality in rights.

You can list most of the principles of the US foundation and see that they were not Christian when not against. 

Fri, 08/13/2010 - 12:01 | 520011 DrLamer
DrLamer's picture

ZeroHedge is not a place for a -discussion- on this.

USA *was* a christianic country, and that was even proclaimed in a couple of US court decisions/rulings.

USA has no time  to start discussion on this matters.

You are living in a state of a Court, not in a discussion club.

Fri, 08/13/2010 - 14:44 | 520473 trav7777
trav7777's picture

oh yeah, the chinks, dots, and russkies are all so much smarter than we.

That explains their societies versus ours...right?  I mean, it's how the Soviets landed on the moon and chinese invented the iphone.

Fri, 08/13/2010 - 01:11 | 519343 Caviar Emptor
Caviar Emptor's picture

"It's not cyclical, it's secular" was very astute, and clear to those paying attention. But there's something to enlarge and expand on: The secular downturn does not just date back to the post-dot com era. It actually dates back to the 1970s and 1980s, when the fateful decision to "Outsource" American manufacturing and industry first took shape as part of an economic rescue package. That's when America's massive twin deficits were allowed to run wild also in the name of economic rescue and engineering to compensate for losses in the productive economy. 

Unsurprisingly, when policymakers took the decision to outsource US industrial and manufacturing might they also unwittingly outsourced an entire army of support and logistics jobs, satellite industries, and associated R&D and engineering jobs too. 

But most significantly of all, when you outsource industries you are outsourcing the engine of innovation within that industry and all associated industries. So we've gutted material sciences, machine tool design, chemical engineering, mechanical engineering, and electronic engineering to name a few. That's where lots of American innovation has gone. 

Instead we focused the economy not on science and technology, IT or even the internet: 1980s supply-siders focused the economy on Financial Services (The FIRE sector). Nice quick fix, but extremely short sighted and long term destructive to the economy. What was lost was the logic that for the US to remain competitive you need the long view. Financial services, aka bean counting, is a useful and helpful adjunct to the productive economy, not a substitute for it. Because ultimately you can't export the service, other countries figure out how to count their own beans soon enough. And ultimately you can't have an economy based on pushing papers back and forth to one another. What the supply-siders got wrong was that government always and inevitably seeds great leaps forward in science and technology: The Manhattan Project, The Space Program, DARPA (the 1st internet), ENIAC (First electronic computer), Bell XP-59(First US jet), The Human Genome Project, The National Institutes of Health (source of most US medical research funding), The Hoover Dam (Thanks for Vegas, Uncle Sam), The Louisiana Purchase, The Lewis and Clark Expedition, The Homestead Act, The Golden Gate Bridge, The Panama Canal..........So we're now left with an economy that consumes much and produces precious little. If you think small and greedy you can't live large for very long. Game set match unless we wake up out of our slumber. From the way things look today, that's still a long way off. 

Fri, 08/13/2010 - 07:28 | 519503 Seer
Seer's picture

Nope.  Goes back to the dawn of capitalism.  From its very inception it was doomed to collapse, as is anything else that strives for overshoot in a finite environment/medium.

"The Manhattan Project, The Space Program, DARPA (the 1st internet), ENIAC (First electronic computer), Bell XP-59(First US jet), The Human Genome Project, The National Institutes of Health (source of most US medical research funding), The Hoover Dam (Thanks for Vegas, Uncle Sam), The Louisiana Purchase, The Lewis and Clark Expedition, The Homestead Act, The Golden Gate Bridge, The Panama Canal.........."

The Manhattan Project, yeah, it's responsible for unleashing the genie: tons of radioactive waste that we'll never be able to manage, let alone all the weapons systems that will one day either rain down on us all or will suffer entropic decay (and fuck us up).

"The Space Program" aka NASA, bootstrapped (initial staffing) by ex-Nazis, and with the REAL aim of militarizing space.  Yeah, another "innovation!"

DARPA - was good for a while, but now (internet) it allows the govt to mine tons of information (read "spy") from us with little work/effort.


Bell XP-59 - enabled us to kill lots more people (bombers, not to mention bombs themselves- 9/11); and also consume MASSIVE amounts of fossil fuel

Human Genome Project - has done what, exactly? will provide insurance companies with the means to exclude coverage; also will provide mechanism for instituting massive eugenics program

National Institutes of Health - see Human Genome Project (in concert with)

Hoover Dam - lost land, fish declines (but I have to admit that I am a consumer of hydro power)

Louisiana Purchase - how many natives were sacrificed in this "purchase" (as though it really did belong to the French in the first place!)

Lewis and Clark Expedition - see "Louisiana Purchase" (sacrifices of natives)

Homestead Act - yawn, repeat of above two

Golden Gate Bridge - another tribute to the unsustainable automotive age, which will eventually fall into disrepair (see external references to faliing automotive sectors and bankrupt State of California)

The Panama Canal - hm... Manuel Noriega? :-) (unsustainable shipping- centralization of control of food distribution)

It was all a big jerk-off, and now that we've blown our collective wads that's it!  We're heading toward reversion to the mean: that mean is visible in the 2/3 of the world's population, which lives on $3/day or less; it's also living standards resembling the dark ages  But, damn! you are right, it was a really cool/fun run while it lasted, too bad that we fooled ourselves into thinking that it could last...

Fri, 08/13/2010 - 14:50 | 520493 trav7777
trav7777's picture

what the fuck are you doing posting on the internet?

go live in a cave, Luddite

Fri, 08/13/2010 - 11:33 | 519945 AnAnonymous
AnAnonymous's picture

The man has it wrong. The structural part of the crisis is the following one.

Depending on initial options, when people participate to the process of enriching an area, some of the people can not afford the final product despite them participating.

Innovation wont change a dime to that structural problem. The guy is simply selling the pipe dream escape plan named "escape by the top" in which you sell to people that if they keep bettering themselves, they will have a chunk at the final product. Wrong. It will only ensure their participation is longer and helps the place to grow richer without providing them a share of the pie. 

Fri, 08/13/2010 - 01:08 | 519355 haskelslocal
haskelslocal's picture

Excellent and introspective post.

The "Brain Drain" is in effect. Harnessing ingenuity and capitalizing it can be our national savior. No different than U2 or Metallica protecting their respective copy rights and wanting fans to buy the  music and not burn it.  Doing the same, protecting our domain, is the new mainifest destiny.

Fri, 08/13/2010 - 01:14 | 519359 Segestan
Segestan's picture

It is good that some are thinking of what best to do for America and not the world.. bravo.

But America has to fall off the cliff before any real work on recontruction begins.. no will exist.

 After the crash we than can debate with whatever tools America still has left. Heck we might end in a civil-war, revolution or WWIII first..... we shall see.

 But If we could start on redevolpment best to secure the borders and jobs we still have first, than we can start rebuilding industry.

Fri, 08/13/2010 - 01:24 | 519366 Caviar Emptor
Caviar Emptor's picture

If we can successfully transition back into "Innovation Mode" and out of "Senescence Mode" we'll be fine. But if greed remains good we'll fail since the most powerful will just get greedy and fat at everyone else's expense. And once fat and in charge they sure as hell don't want "Innovation".

Fri, 08/13/2010 - 07:34 | 519507 Seer
Seer's picture

"It is good that some are thinking of what best to do for America and not the world.. bravo."

WTF?  Yeah, right, we've NEVER thought about just US, no, not with all those war-torn countries that we've manage to decimate in order to steal resources from.  The nerve of those fuckers to think that we should somehow think with their well-being in mind!

Barbarians at the gate.  This white-man's seige mentality is going to end just like it's always ended.  Clearly people are doomed to repeat history...

US population = 4% of world's total

US consumption = 25% of world's total

Pitty the poor US people!

Fri, 08/13/2010 - 01:47 | 519377 LuxuryMode
LuxuryMode's picture

"It needs to be fully appreciated that both IBM and Microsoft now have large numbers of major world class research facilities outside the US and the US filings numbers below are likely reflecting this." Doesn't this weigh in favor of arguing that total innovation is higher than the low US filings might indicate? Who cares where the filings occur? So long as innovation occurs, there will be or arguably could be growth in the US as the innovation creates new jobs. Its irrelevant where the filings occur.

Fri, 08/13/2010 - 02:36 | 519398 Sudden Debt
Sudden Debt's picture

Go long on food stamps!

Who prints them? Who ships them? Who supplies the paper?

So many questions, so many opportunities!

Fri, 08/13/2010 - 02:56 | 519399 JR
JR's picture

The Intellectual Capital was an American asset, not a corporate asset which left.  Massive royalties should now be flowing to the US taxpayer today which would offset many state and local services cuts. – Gordon T. Long

It was the bankers and CEOs that orchestrated the hostile acquisitions and mergers of America’s manufacturing base and intellectual capital in the 70s and 80s that paved the way for the outsourcing of American innovation. And it was in the 80s that the current wave of offshore outsourcing got underway.

It was President James A. Garfield who warned, “Who ever controls the volume of money in any country is absolute master of all industry and commerce.”

It is not anti-Semitic to say that many of the international bankers and CEOs who are Jewish have a worldview that differs from a nationalist view. And, as Jeffrey Blankfort pointed out in “The Israel Lobby and the Left”:  “Jews played a central role in American finance during the 1980s, and they were the chief beneficiaries of that decade’s corporate mergers and reorganizations.”  Richard J. Hernstein and Charles Murray wrote in “The Bell Curve” in 1994, “The CEO of 1976 was still disproportionately likely to be Episcopalian but much less so than in 1900—and by 1976 he was also disproportionately likely to be Jewish…”

America’s greatness cannot be recreated while her national sovereignty is at stake. And, as Kirk MacKenzie notes in “Money: Defending Your Prosperity”: “It takes only a little research to reveal the correlation between the names of the international banking elite and the names of those pushing for subordination of all nations to a federal World Government.”

In short, Gordon Long’s “starting points for change” cannot be engaged until Americans fix their political system.  His top ten suggestions are generally good, but unfortunately, are not likely to be implemented until the primary cause of America’s innovative crisis is addressed. No “bold approach” can be accomplished until representative government is restored and the people reinstitute a government that acts for their best interests. America’s political party apparatus is broken and under the control of the same private banking cartel that owns the currency, manages the Congress, picks the president, and selects the world’s corporate winners and losers.

Under this enriched and empowered elite, the Fed, the world’s richest country has become the world’s largest debtor nation. She is in a depression with 22% unemployment.  Her jobs, technologies, and industries have been offshored.  Her American Dream has vanished under an economic system that was created by bankers for the enrichment of bankers.  As MacKenzie says, “The System serves their interests, and not those of the People.”

The idea that America’s crisis was caused by “creative destruction” is inadequate.

Fri, 08/13/2010 - 03:48 | 519411 Segestan
Segestan's picture

True.. but all those Oil dollars American industry created came back as foreign interest and hatred for all things American. All those American business' seeking foreign markets,  without ever a regard for American interest. Profit before nation.

Fri, 08/13/2010 - 04:45 | 519405 -273
-273's picture

This chart also goes a long way to explain Americas success and where it is heading. It is also unlikely to be coincidental that US wages peaked in real terms in 1973 around the same time as us oil production peaked, and have been declining ever since.


Fri, 08/13/2010 - 07:47 | 519515 Seer
Seer's picture

BRAVO!  Finally!  Someone who actually gets to the ROOT of the problem (rather than flailing away at the branches).

Energy = (ability to perform) Work

Work = Productivity

Productivity (in excess) = Wealth

To prove a point that "innovation" is really nothing without physical resources, consider that Saudi Arabia does NOT have a trade deficit and the US does? ( Hint: one has more key RESOURCES than the other (which has more "innovation")

Fri, 08/13/2010 - 12:58 | 520168 -273
-273's picture

Thank you sir.


Left unaddressed during the past 3 years in most of the debates between economists has been the problem of energy. The reason is simple: post-war economists don’t do energy, except as an ever-expanding resource that the credit system and technology makes available. For the post-war economist, the supply curve of energy–save for brief lags–is always coming back into rough equilibrium with the economy.

Only an economist could wonder in their leisure now, whether energy played a significant role in our current crisis. Indeed the public remarks of Ben Bernanke on the matter of energy, during the 2005-2010 period, were at least as clueless as his embarrassing commentary on the historic bubble in housing and credit. As the nation’s chief economist, Bernanke saw no problem with credit, with derivatives, with the fast inflation in housing prices, or with energy prices. And as an American economist, he was not alone.

As state’s see their budgets collapse and start a new round of layoffs, we should consider the fact that house price inflation masked the lack of wage growth in the United States. And now that house prices continue their descent for a 5th year, American workers are more fully exposed to the decade-long march higher in energy costs. They can experience this individually through energy prices, or more generally through the overall energy cost to the economy.

Fri, 08/13/2010 - 04:12 | 519422 Hephasteus
Hephasteus's picture

I tried co-creating with America but it's against the EULA, and corporate policy and it's a sin in the church and nobody teaches how to do it in school. Calling america creative is like calling McDonald's food.

Fri, 08/13/2010 - 04:31 | 519425 The Alarmist
The Alarmist's picture

"Math is Hard!"

Let's blame it on Barbie, because like "Math is Hard" Barbie, millions of Americans realised at some point that there were easier ways to get what you want out of life. 

The problem is not the US Universities, which are still pumping out hundreds of thousands of the world's finest engineers and researchers, so pumping yet more billions into them only serves to further subsidise the growth and development of other countries.

And 40m people on food stamps could just as easily (if not more properly) be attributed to a decay of the American spirit and values ... why work harder, when you can get a subsidy?  Everyone else is being subsidised, so why not me?

Same with the riots near Atlanta for Section 8 housing ... why work harder for a nice house, when you can get one cheap from Obama's stash?

There is anectdotal evidence that college grads who twenty years ago may have started out answering phones and fetching coffee now won't do these things because they have been told that they should not accept work beneath their education level.  New hires joining the firm who think they can jump right into writing the marketing plan for the Company because they took a marketing class in college. Or they will graduate from State U and get a job at Goldman Sachs (which, the last time I looked, tends to hire only the chosen or connected few who breeze through the revolving doors of the Ivy League)

And there is plenty of other anecdotal evidence that, given 99+ weeks on unemployment pay, people are turning their noses up at work they consider to be beneath them.  They can do this because the US has become the fattest country on earth.  A little less UI and Food Stamps and maybe these people might do things like cut grass and clean toilets rather than importing millions of undocumented workers to do this instead.

You make it sound like the rest of the world is running past the US even though it is running as hard as it can.  Truth is, somewhere in the 90's it slowed to a walk, then to a crawl in the 00's, and now it is  simply sitting on its fat a** with a hand stretched out, for cheap labour to do the "undesirable" work that needs to be done and for cheap credit from the rest of the saving world.

My top 2:

1) Grow up, because life is hard and requires some effort; and

2) Get a job, any job!





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