This page has been archived and commenting is disabled.

Martin Armstrong "It's Not the Rich – It's The Total Cost Of Government That Is Killing The Economy"

Tyler Durden's picture




 

Submitted by Martin Armstrong via Armstrong Economics,

LEVY-TX (7)

QUESTION: Do you believe in a fairer system where there is a minimum income cap and a maximum asset cap? We live in an age where productivity has risen through the roof due to technological advancement. Don’t you think humanity is at the stage where it can afford to offer basic income to people so better checks and balances can be set in place to thwart the exploitation of people (see the third world).

A maximum asset cap would also act as a  positive filter in business ownership, don’t you think? The businessmen interested mainly in greed won’t fill those positions, but those who are driven more by other means, hopefully positive ambitions, will fill those roles (CEO,COO, managers, etc.)

Can you form a good argument against an asset cap of, say, $20mm? Can you think of a situation where 1 individual NEEDS more than 20 million, aside from using it to exploit others? If a cap isn’t set, that leads to the development of a tycoon, i.e., exploiter, of an industry. Increased capital permits the further increasing of capital at the accelerated rate. When left unchecked, greed and self-serving goals create a net loss, rather than a net gain.

Remember Martin, everything is connected. You can’t think on an individual level and expect it to not hurt evolution. This is what life is about. Evolution.

We’re headed towards doom, and the enemy is not just socialism, political cronies, and economic mobsters.

ANSWER: The standard of living has collapsed and it now takes two incomes to survive not one. That isn’t because of wages are not high enough. Do not forget, if you raise the wages you raise the cost of production and the consumer will pay that higher level in the end. There is no one-sided solution – you cannot raise wages without prices also rising. People would have more disposable income and would bid up prices by demand. If there was no 30-year mortgage, the price of houses would decline sharply because if people had to PAY CASH for a house, then the price of a house would fall to the point where the average income could afford it. Roosevelt created the 30-year mortgage to try to give people LEVERAGE to buy real estate to raise the price. That LEVERAGE has now impacted prices over the course of decades.

Assbly-Line-Ford

The answer lies in the consumption of wealth not that someone has more assets than another. Eliminate taxation and you will reduce the cost of labor, bring back jobs, and you will also eliminate the lobbying to escape taxes. Henry Ford invented the assembly line and brought the cost of cars down to the middle class at $240. He made a lot of money and expanded his business with it. If there was a cap on assets, you would destroy job creation. It REQUIRED the concentration of wealth to create innovation. If wealth is evenly distributed, you will not get enough people to agree to risk it all. Most small businesses fail after start-up. Some make it while a few really strike it big. That is the risk reward.

Big corporations die because they become eventually run by lawyers not entrepreneurs. I have been called in to many board meetings and watched the process first hand. As soon as a new company becomes public, the bureaucrats enter and the creativity vanishes. This is why they pay huge money for start-ups because they create what the big companies cannot – innovation.

It is not what an individual needs that is the issue. Take all the money away from Bill Gates. How will this improve your life at all? The issue is HOW MUCH is government consuming. But as long as they point to the “rich” they get to waste your money.

Social Security has altered society in ways people do not respect. Previously, family units were stronger because the system was the young took care of the old. Introducing Social Security changed everything. What children today save to take care of their parents?  That’s the state’s job. Welfare altered the system by rewarding women not to get get married. New Zealand nearly went bust on its program that sounded nice that if a woman had no idea who the father of the child was, the state took care of everything and gave her a house. They ended up with the highest percentage of women who had NO IDEA who the father of their child was. What woman does not know that except victims of rape?

China’s one child rule has seriously altered society there as well. Couples are now offering their estate to females to come in from SE Asia if they will take care of them. You cannot create these types of changes without seriously impacting society.

IRS-REV

Pictured above at the beginning is the tax burden upon society back in 1988. Even currently, the top 1% pay about 33% of all income taxes. At the start of 2000, the total amount of revenue collected by federal and state government in the USA exceeded 40% of GDP. This is outrageous and this is why the economy is slowing declining. This has nothing to do if somebody earned $100 million or $50 million as a CEO. That has ZERO impact upon your life – but what government takes out of your pocket REDUCES your standard of living – DIRECTLY.

Taxes

The solution is NOT to raise taxes on the rich, for government will still spend more than it takes in regardless of who pays. This is like fining your wife because the guy next door did not sort his trash for recycling. This is indirect. It is taxes that we must address – not how much someone else makes.

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 04/14/2014 - 20:15 | 4658892 samsara
samsara's picture

Thanks again Tylers for including some of Marty's posts.

This point;

"Social Security has altered society in ways people do not respect. Previously, family units were stronger because the system was the young took care of the old. "

Is very important. I think the idea of wanting to help the average joe who was down on his luck in the 30's Dust Bowl era was noble, But as Marty notes, The structures put in place have altered society in ways most don't discern.

Over a time original feelings change. It's day to day administration becomes a bureaucracy.

Any noble idea for a government, Any time you hear the phrase, "... They ought to have somebody handling that...."

In your mind the picture of it's implementation should appear as you visiting the DMV office. That's who would be carrying out of the paper work. DMV, TSA.

On the other side the "Users" of those safety nets begin over years to look more and more like the EBT, Welfare images everyone has in their head.

So in the end, I don't we are mature enough in aggregate as a race to attempt such things.

We're just humans and reality is so far over our heads...

Tue, 04/15/2014 - 01:44 | 4659698 MeBizarro
MeBizarro's picture

Utter nonsense.  Go back and look at the life span of Americans even in 1950.  Prior to WW2, it wasn't even an issue because large parts of the population especially males dropped dead before they reached 65.

http://www.cdc.gov/nchs/data/hus/2011/022.pdf

Tue, 04/15/2014 - 03:42 | 4659790 Seer
Seer's picture

Could you two work this into a debate?  I'm kind of not sure what points to contemplate here.

And, no, I'm NOT being sarcastic.  I think that this is an interesting topic for debate.

Mon, 04/14/2014 - 20:13 | 4658895 limacon
limacon's picture

More about Optimal Taxation and Social consequences

See http://andreswhy.blogspot.com/2014/03/gini-and-rubble-of-empire.html

 

 

GINI and the Rubble of Empire .

 

Andre Willers .

16 Mar 2014

“Grasping all , they lose all” AW

Synopsis :

What we see as the glory of Rome is really just the rubble of the rich, built on the backs of poor farmers and laborers .And things are worse today .

 

Discussion:

1.GINI measures unequal income . It measures desperation in hunger and medicine .

The Gini coefficient is a number between 0 and 1, where 0 corresponds with perfect equality (where everyone has the same income) and 1 corresponds with perfect inequality (where one person has all the income—and everyone else has zero income).

Easy to remember : No 1 has it all .

The rest have nothing except what is doled out in the Camps .

2.Not even the Roman Empire had as high Gini ratio’s as present so-called democracies .

See http://www.photius.com/rankings/economy/distribution_of_family_income_gini_index_2014_0.html

Xx

A short summary of the most important countries .

Where would you like to live if you were (a) rich . Or (b) at the bottom .

This differential drives Revolution and Migration .

 

RSA Gini= 0.63

China Gini = 47.4

USA Gini = 0.45

Russia Gini = 0.417

UK Gini = 40

Japan Gini= 0.376

India Gini = 0.368

Germany Gini= 0.27

 

xxx

Roman Empire (150 AD) : Gini = 0.42

 

This basically means that a Roman slave in 150 AD had a fairer deal than a salary slave in most of the present Western world .

Note the exception of Germany .

 

See Appendix A for Roman Empire Gini .

 

3. Reserve considerations .

See Appendix C on how to calculate optimal reserves ab-initio .

Reserve arguments can be used .

The society should build up reserves . This is usually held in individual hands (your savings) , but it shows up in Gini statistics as lowering the ratio .

The Optimal GINI would then be in the band 0.28 – 0.33 – 0.38 , with the sweet spot at 0.33 .

 

4.Some corollaries :

If GINI < 0.28 , instability ensues . Insufficient reserves. Usually collapse . Cities deserted as the good citizens just walk away .

( See http://andreswhy.blogspot.com/2014/01/evanescence-of-cities.html ) .

Or the collapse of the USSR . See http://www.roiw.org/1993/23.pdf

The 1989 Gini of USSR = 0.275 . It shouldn’t have led to collapse , but they were in an arms-race with USA . Insufficient reserves .

The system went into shock and collapsed .

 

If GINI > 0.38 , instability ensues . Too much reserves in too few hands . Usually revolution .

See Arab Spring , Syria , Occupy Wall st , etc etc .Or any peasant rebellion in history , a-la-France or Russia .

 

5.Where are we now 2014 ?

Every country with a Gini bigger than 0.38 and social media access is a revolution waiting to happen .

Countries with Gini smaller than 0.28 have to be propped up .

According to this argument , Germany appears strong now , but might need aid in the near future . Can this be correct ? Remember verreine . Huge reserves are locked up in the verreine . But how is classified in the Gini calculation ?

 

6.What does this mean ?

Big , top-heavy states will continue to break apart .

Ukraine now , UK (Scotland) later this year .

A big Empire like the USA is showing distinct signs of strain . The tail is attempting to wag the dog . Be interesting to see who is the last man standing in the ruins .

“Better dead than red” used to be the motto . But can get enthusiastic about Donkeys and Elephants ?

 

7 RSA ?

The same story . Another artificial mini-empire tacked together by the British . The extremely high Gini will force a break-up of the provinces . The usual civil war will ensue as the vultures pick the carcass apart .

See Appendix D on Neo-Vikings .

I would have hoped that they go off-planet , but they are too stupid and poor to do that .

https://www.blogger.com/blogger.g?blogID=16105240#editor/target=post;postID=632898708944473552;onPublishedMenu=posts;onClosedMenu=posts;postNum=28;src=postname

 

8. What an exciting future .

Greed and stupidity finally does for the human race .

 

“Grasping all , they lose all”

Regards

Andre

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Appendix A

http://www.stumbleupon.com/su/2d53lE/:Ix!ztvvU:fhbrmqFE/persquaremile.com/2011/12/16/income-inequality-in-the-roman-empire/

Over the last 30 years, wealth in the United States has been steadily concentrating in the upper economic echelons. Whereas the top 1 percent used to control a little over 30 percent of the wealth, they now control 40 percent. It’s a trend that was for decades brushed under the rug but is now on the tops of minds and at the tips of tongues.

Since too much inequality can foment revolt and instability, the CIA regularly updates statistics on income distribution for countries around the world, including the U.S. Between 1997 and 2007, inequality in the U.S. grew by almost 10 percent, making it more unequal than Russia, infamous for its powerful oligarchs. The U.S. is not faring well historically, either. Even the Roman Empire, a society built on conquest and slave labor, had a more equitable income distribution.

To determine the size of the Roman economy and the distribution of income, historians Walter Schiedel and Steven Friesen pored over papyri ledgers, previous scholarly estimates, imperial edicts, and Biblical passages. Their target was the state of the economy when the empire was at its population zenith, around 150 C.E. Schiedel and Friesen estimate that the top 1 percent of Roman society controlled 16 percent of the wealth, less than half of what America’s top 1 percent control.

To arrive at that number, they broke down Roman society into its established and implicit classes. Deriving income for the majority of plebeians required estimating the amount of wheat they might have consumed. From there, they could backtrack to daily wages based on wheat costs (most plebs did not have much, if any, discretionary income). Next they estimated the incomes of the “respectable” and “middling” sectors by multiplying the wages of the bottom class by a coefficient derived from a review of the literature. The few “respectable” and “middling” Romans enjoyed comfortable, but not lavish, lifestyles.

Above the plebs were perched the elite Roman orders. These well-defined classes played important roles in politics and commerce. The ruling patricians sat at the top, though their numbers were likely too few to consider. Below them were the senators. Their numbers are well known—there were 600 in 150 C.E.—but estimating their wealth was difficult. Like most politicians today, they were wealthy—to become a senator, a man had to be worth at least 1 million sesterces (a Roman coin, abbreviated HS). In reality, most possessed even greater fortunes. Schiedel and Friesen estimate the average senator was worth over HS5 million and drew annual incomes of more than HS300,000.

After the senators came the equestrians. Originally the Roman army’s cavalry, they evolved into a commercial class after senators were banned from business deals in 218 B.C. An equestrian’s holdings were worth on average about HS600,000, and he earned an average of HS40,000 per year. The decuriones, or city councilmen, occupied the step below the equestrians. They earning about HS9,000 per year and held assets of around HS150,000. Other miscellaneous wealthy people drew incomes and held fortunes of about the same amount as the decuriones.

In total, Schiedel and Friesen figure the elite orders and other wealthy made up about 1.5 percent of the 70 million inhabitants the empire claimed at its peak. Together, they controlled around 20 percent of the wealth.

These numbers paint a picture of two Romes, one of respectable, if not fabulous, wealth and the other of meager wages, enough to survive day-to-day but not enough to prosper. The wealthy were also largely concentrated in the cities. It’s not unlike the U.S. today. Indeed, based on a widely used measure of income inequality, the Gini coefficient, imperial Rome was slightly more equal than the U.S.

The CIA, World Bank, and other institutions track the Gini coefficients of modern nations. It’s a unitless number, which can make it somewhat tricky to understand. I find visualizing it helps. Take a look at the following graph.

 

To calculate the Gini coefficient, you divide the orange area (A) by the sum of the orange and blue areas (A + B). The more unequal the income distribution, the larger the orange area. The Gini coefficient scales from 0 to 1, where 0 means each portion of the population gathers an equal amount of income and 1 means a single person collects everything. Schiedel and Friesen calculated a Gini coefficient of 0.42–0.44 for Rome. By comparison, the Gini coefficient in the U.S. in 2007 was 0.45.

Schiedel and Friesen aren’t passing judgement on the ancient Romans, nor are they on modern day Americans. Theirs is an academic study, one used to further scholarship on one of the great ancient civilizations. But buried at the end, they make a point that’s difficult to parse, yet provocative. They point out that the majority of extant Roman ruins resulted from the economic activities of the top 10 percent. “Yet the disproportionate visibility of this ‘fortunate decile’ must not let us forget the vast but—to us—inconspicuous majority that failed even to begin to share in the moderate amount of economic growth associated with large-scale formation in the ancient Mediterranean and its hinterlands.”

In other words, what we see as the glory of Rome is really just the rubble of the rich, built on the backs of poor farmers and laborers, traces of whom have all but vanished. It’s as though Rome’s 99 percent never existed. Which makes me wonder, what will future civilizations think of us?

Source:

Scheidel, W., & Friesen, S. (2010). The Size of the Economy and the Distribution of Income in the Roman Empire Journal of Roman Studies, 99 DOI:10.3815/007543509789745223

Xxxxxxxxxxxxxxxx

Appendix B

http://www.photius.com/rankings/economy/distribution_of_family_income_gini_index_2014_0.html

GINI in descending order per country where available .

Rank

 

Country

Value

 

Date of Info

1

 

.

 

Lesotho

63.2

 

1995

2

 

.

 

South Africa

63.1

 

2005

3

 

.

 

Botswana

63.0

 

1993

4

 

.

 

Sierra Leone

62.9

 

1989

5

 

.

 

Central African Republic

61.3

 

1993

6

 

.

 

Namibia

59.7

 

2010

7

 

.

 

Haiti

59.2

 

2001

8

 

.

 

Colombia

58.5

 

2011

9

 

.

 

Honduras

57.7

 

2007

10

 

.

 

Guatemala

55.1

 

2007

11

 

.

 

Hong Kong

53.7

 

2011

12

 

.

 

Thailand

53.6

 

2009

13

 

.

 

Paraguay

53.2

 

2009

14

 

.

 

Bolivia

53.0

 

2010

15

 

.

 

Chile

52.1

 

2009

16

 

.

 

Panama

51.9

 

2010 est.

17

 

.

 

Brazil

51.9

 

2012

18

 

.

 

Papua New Guinea

50.9

 

1996

19

 

.

 

Zambia

50.8

 

2004

20

 

.

 

Swaziland

50.4

 

2001

21

 

.

 

Costa Rica

50.3

 

2009

22

 

.

 

Gambia, The

50.2

 

1998

23

 

.

 

Zimbabwe

50.1

 

2006

24

 

.

 

Sri Lanka

49.0

 

2010

25

 

.

 

Mexico

48.3

 

2008

26

 

.

 

Singapore

47.8

 

2012

27

 

.

 

Ecuador

47.7

 

Dec 2012

28

 

.

 

Madagascar

47.5

 

2001

29

 

.

 

China

47.4

 

2012

30

 

.

 

Dominican Republic

47.2

 

2010 est.

31

 

.

 

El Salvador

46.9

 

2007

32

 

.

 

Rwanda

46.8

 

2000

33

 

.

 

Malaysia

46.2

 

2009

34

 

.

 

Peru

46.0

 

2010

35

 

.

 

Georgia

46.0

 

2011

36

 

.

 

Argentina

45.8

 

2009

37

 

.

 

Mozambique

45.6

 

2008

38

 

.

 

Jamaica

45.5

 

2004

39

 

.

 

Uruguay

45.3

 

2010

40

 

.

 

Bulgaria

45.3

 

2007

41

 

.

 

United States

45.0

 

2007

42

 

.

 

Philippines

44.8

 

2009

43

 

.

 

Cameroon

44.6

 

2001

44

 

.

 

Guyana

44.6

 

2007

45

 

.

 

Iran

44.5

 

2006

46

 

.

 

Uganda

44.3

 

2009

47

 

.

 

Nigeria

43.7

 

2003

48

 

.

 

Macedonia

43.2

 

2009

49

 

.

 

Kenya

42.5

 

2008 est.

50

 

.

 

Burundi

42.4

 

1998

51

 

.

 

Korea, South

41.9

 

2011

52

 

.

 

Russia

41.7

 

2011

53

 

.

 

Cote d'Ivoire

41.5

 

2008

54

 

.

 

Senegal

41.3

 

2001

55

 

.

 

Morocco

40.9

 

2007 est.

56

 

.

 

Turkmenistan

40.8

 

1998

57

 

.

 

Nicaragua

40.5

 

2010

58

 

.

 

Turkey

40.2

 

2010

59

 

.

 

Mali

40.1

 

2001

60

 

.

 

Tunisia

40.0

 

2005 est.

61

 

.

 

United Kingdom

40.0

 

FY08/09

62

 

.

 

Jordan

39.7

 

2007

63

 

.

 

Burkina Faso

39.5

 

2007

64

 

.

 

Ghana

39.4

 

2005-06

65

 

.

 

Guinea

39.4

 

2007

66

 

.

 

Israel

39.2

 

2008

67

 

.

 

Venezuela

39.0

 

2011

68

 

.

 

Malawi

39.0

 

2004

69

 

.

 

Mauritania

39.0

 

2000

70

 

.

 

Mauritius

39.0

 

2006 est.

71

 

.

 

Portugal

38.5

 

2007

72

 

.

 

Moldova

38.0

 

2008

73

 

.

 

Cambodia

37.9

 

2008 est.

74

 

.

 

Yemen

37.7

 

2005

75

 

.

 

Tanzania

37.6

 

2007

76

 

.

 

Vietnam

37.6

 

2008

77

 

.

 

Japan

37.6

 

2008

78

 

.

 

Uzbekistan

36.8

 

2003

79

 

.

 

Indonesia

36.8

 

2009

80

 

.

 

India

36.8

 

2004

81

 

.

 

Laos

36.7

 

2008

82

 

.

 

Mongolia

36.5

 

2008

83

 

.

 

Benin

36.5

 

2003

84

 

.

 

New Zealand

36.2

 

1997

85

 

.

 

Bosnia and Herzegovina

36.2

 

2007

86

 

.

 

Lithuania

35.5

 

2009

87

 

.

 

Algeria

35.3

 

1995

88

 

.

 

Latvia

35.2

 

2010

89

 

.

 

Albania

34.5

 

2008

90

 

.

 

Egypt

34.4

 

2001

91

 

.

 

Taiwan

34.2

 

2011

92

 

.

 

Poland

34.1

 

2009

93

 

.

 

Niger

34.0

 

2007

94

 

.

 

Ireland

33.9

 

2010

95

 

.

 

Azerbaijan

33.7

 

2008

96

 

.

 

Kyrgyzstan

33.4

 

2007

97

 

.

 

Romania

33.2

 

2011

98

 

.

 

Bangladesh

33.2

 

2005

99

 

.

 

Greece

33.0

 

2005

100

 

.

 

Nepal

32.8

 

2010

101

 

.

 

France

32.7

 

2008

102

 

.

 

Tajikistan

32.6

 

2006

103

 

.

 

Canada

32.1

 

2005

104

 

.

 

Spain

32.0

 

2005

105

 

.

 

Croatia

32.0

 

2010

106

 

.

 

Timor-Leste

31.9

 

2007 est.

107

 

.

 

Italy

31.9

 

2011

108

 

.

 

Estonia

31.3

 

2010

109

 

.

 

Czech Republic

31.0

 

2009

110

 

.

 

Netherlands

30.9

 

2007

111

 

.

 

Armenia

30.9

 

2008

112

 

.

 

European Union

30.7

 

2011 est.

113

 

.

 

Pakistan

30.6

 

FY07/08

114

 

.

 

Australia

30.3

 

2008

115

 

.

 

Kosovo

30.0

 

FY05/06

116

 

.

 

Ethiopia

30.0

 

2000

117

 

.

 

Switzerland

29.6

 

2010

118

 

.

 

Cyprus

29.0

 

2005

119

 

.

 

Kazakhstan

28.9

 

2011

120

 

.

 

Serbia

28.2

 

2008

121

 

.

 

Ukraine

28.2

 

2009

122

 

.

 

Iceland

28.0

 

2006

123

 

.

 

Belgium

28.0

 

2005

124

 

.

 

Malta

27.4

 

2011

125

 

.

 

Belarus

27.2

 

2008

126

 

.

 

Germany

27.0

 

2006

127

 

.

 

Finland

26.8

 

2008

128

 

.

 

Austria

26.3

 

2007

129

 

.

 

Slovakia

26.0

 

2005

130

 

.

 

Luxembourg

26.0

 

2005

131

 

.

 

Norway

25.0

 

2008

132

 

.

 

Denmark

24.8

 

2011 est.

133

 

.

 

Hungary

24.7

 

2009

134

 

.

 

Montenegro

24.3

 

2010

135

 

.

 

Slovenia

23.8

 

2011

136

 

.

 

Sweden

23.0

 

2005

137

 

.

 

Saudi Arabia

NA

 

NA

Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

Appendix C

Calculation of optimal reserves

http://andreswhy.blogspot.com/2008/04/infinite-probes2.html

 

Wednesday, April 30, 2008

Infinite Probes2

Infinite Probes 2
Andre Willers
30 April 2008

http://andreswhy.blogspot.com/ “Infinite Probes’

From discussing this with various recipients , there seems to be a need for a simpler explanation . I thought I had explained it in the simplest fashion possible . The subject matter is inherently complex .

But , here goes .

How much must you save ?
If you save too little , a random fluctuation can wipe you out .
If you save too much , you lose opportunity costs . If you are in competition , this loss can be enough to lose the competition (ie you die)

Intuitively , you can realize there is an optimum level of saving .

Methods exist of calculating this optimum in very specific instances (ie portfolios of shares ,eg Kelly criteria , or tactics in war eg MiniMax ) .

The General Case
We need to hold a Reserve in case Something goes wrong . But we do not know what thing goes wrong .

Infinite Probes tries to answer the general case . What is really , really surprising is that a answer is possible .

The Infinite bit comes from using the mathematical expansion of the Definition of Eulers Constant e = ( 1 + 1/2! + 1/ 3! + … 1/n! + …)
Where n!= n*(n-1)*(n-2)*(n-3)*…*(1)

This approaches a constant , widely used in mathematics and physics .
(e = 2.718…) .

All we need is a system that can be subdivided indefinitely (to infinity) .

First , we divide by 1
Then 2
Then 3
Then 4

And so forth till infinity .

What is important is not that we do know what these divisions are , only that they are possible . We also do not know which one element goes wrong .

The other critical insight is that it is the relation between elements that is important . (Permutations) (The failure of an element in total isolation cannot affect the whole system by definition .)

We can count the number of relationships where there is failure of one element .
It is n! , where n is number of divisions where only one failure .

Multiple failures are handled by summing :

Our Reserve(R ) is divided by n to infinity and summed .

TotReserve= R*( 1 + 1/2! + 1/ 3! + … 1/n! + …)
TotReserve= R * e

To find the boundaries of our Reserve , we set TotReserve = Cost

Then

R = 1/e * Cost
R ~ 0.37 * Cost

What does this mean?
This method measures the upper boundary of the reserve needed to survive failures in any element of the Cost-Universe . Ie , internal fluctuations .

This is the surprising bit . Any society that keeps at least 37% reserves , can only be destroyed by something outside it’s envelope . It is internally stable , no matter what .

Empires like the Ancient Egyptians , Romans , Chinese are possible , as long as there is no climactic fluctuation , new inventions , diseases ,etc . Rare events . Hence the technological stasis of old civilizations . The two are synonymous .

This is true at any scale (except quantal , by definition.) .

Individuals too . Humans can be seen as empires of noospheres .

The upper boundary does not take any double-counting into account . It is true for any system whatsoever .

A truly remarkable precise result from such general axioms .

The Lower Boundaries .
This is where it gets interesting .
Remember , we are just counting the number of ways in which permutations of one element can fail . We then sum them to get the effect of the failures of other elements

The easiest is the business that just starts and is not selling anything . It fails on n elements on every term . It’s floor capital must then be
R=Cost/(1+e)
R=0.27*Cost

This is the initial reserve to get off the ground .
This is true in any ecosystem . This is why it is so difficult to start a new business , or why a new species cannot succeed . Or why waves of pandemics are scarcer .

For the epidemically minded , this 10% difference is responsible for the demise of the Black Death ( smallpox outcompeted bubonic plaque variants for the CR5 access site.Ironically , the reason why we have only a limited HIV plague is the high competition for this site , probably some flu vectors . As one would expect , the incidence of HIV then becomes inversely proportional to connectivity (ie flights) .

A cessation of airplane flights will then lead to a flare-up of diseases like these .
Not exactly what anybody has in mind . )

When we find that we really need the spread of infectious vectors to stay healthy , then we know we have really screwed ourselves .

These are the two main boundaries .
The literature is full of other limits the series can approach . Keep a clear head on what the physical significance is .

Fat
I cannot leave the subject without the thing closest to human hearts : appearance .
Fat and fitness .
Sadly , the present fad for leanness is just that . The period of superfluous food is coming to an end .
Rich individuals can afford to be lean because the reserves are in the monetary wealth Women have to bear children individually , so they cannot store the needed reserves externally . Hence their fat storage is close to the theoretical optimum even in Western societies (33%) . In other societies the percentage is about 37-40% .

Human males have been bred (Mk III humans) for muscle and little fat (8% in a superbly fit male) . He does not have reserves to withstand even garrison duty (even little diseases will lay him low .) Note the frequent references to diseases laying whole armies low .

Note what is left out : the camp-followers . They survived The women and babyfat children . Every army seeded the invaded area with women and children .

The bred soldier has to eat a high-carb food frequently : not meat or fat , his body cannot store it . This is the definition of a wheat-eating legionary .

Ho ! Ho! Ho!
The Atkinson diet .
No wonder it does not make sense in evolutionary terms .
Mesomorphic humans have been bred not to transform expensive proteins and fats into bodymass .

The soldier-class were kept on a carbohydrate leash , which could only be supplied by farming .

The Smell of Horses .

Horses exude pheromones that promote body-leanness in humans . This has an obvious advantage to horses . Horses are breeding jockeys .

The time-span is enough : at least 8 000 years . (400 generations)

Because pregnant women cannot ride horses , there was a selection pressure to breed horses who have a pheromone that block female dominance pheromones , especially since females have to weigh more because of fat-reserve considerations .

Outside a farming environment , horses will sculpt their riders as much as the riders are sculpting them .

Small Mongolian ponies , small Mongolians .

This is why alpha-males like horses and horse-dominated societies were able to conquer and keep matriarchies .

Note the effect of the pheromones on women riders . Androgeny .
On males it becomes extreme blockage of oestrogen . It seems like a surge of male hormones , but it is just an imbalance . (If too much male hormones , the men just kill their horses )

This is why the auto-mobile had such a big sociological effect . No horses , so the men became more effeminate .

Want to be Lean and Mean ?
Sniff Horse sweat pheromone .
Perfumiers take note .

Dogs

The other leg of the human-horse-dog triumvirate .
Dogs accept female pack-leaders and have evolutionary reasons for blocking horse inhibitions of human female pheromones .

While the males are away , the females look after and rely on the dogs .
(The reason why Mongols ride from yurt to yurt: they are too scared of the dogs.)

With dogs around , the male testosterone activity is ameliorated . This is a well known effect , especially if horses are around .

Hence the female love of lap-dogs . They are actually quite ferocious , and exude large amounts of pheromones that soothes the savage male breast .

Your attention is drawn to the Pekinese lapdog , which has had a disproportionately large effect on human history .

If this sounds convoluted , it is because this is exactly how this type of bio-system operates : by inhibitions of inhibitions of inhibitions ,etc .

Andre

 

Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

Appendix D

Neo-Vikings

https://www.blogger.com/blogger.g?blogID=16105240#editor/target=post;postID=632898708944473552;onPublishedMenu=posts;onClosedMenu=posts;postNum=28;src=postname

 

 

Andre Willers

8 Feb 2014

Synopsis:

Raid-or-Trade is coming back in fashion as social orders collapses .

 

Discussion :

1.Climate shifts cause social disruptions .

 

2.This causes degradation in defence capabibilties .

 

3.Opportunistic raiders take advantage .

 

4.Past :

4.1Sea Peoples

http://en.wikipedia.org/wiki/Sea_Peoples

or 

http://andreswhy.blogspot.com/2009/10/ansari-gens.html

 

4.2 Vikings

Essentially , climate change weakened civilized defensive systems and also forced barbarians to go a-Viking .

http://www.ees.lanl.gov/geodynamics/Wohletz/Krakatau_6th_Century.pdf

Modern history has its origins in the tumultuous 6th and 7th centuries. During this period agricultural failures and the emergence of the

plague contributed to: (1) the demise of ancient super cities, old Persia, Indonesian civilizations, the Nasca culture of South America,

and southern Arabian civilizations; (2) the schism of the Roman Empire with the conception of many nation states and the re-birth of

a united China; and (3) the origin and spread of Islam while Arian Christianity disappeared. In his book, Catastrophe An Investigation

into the Origins of the Modern World, author David Keys explores history and archaeology to link all of these human upheavals to

climate destabilization brought on by a natural catastrophe, with strong evidence from tree-ring and ice-core data that it occurred in

535 AD. With no supporting evidence for an impact-related event, I worked with Keys to narrow down the possibilities for a volcanic

eruption that could affect both hemispheres and bring about several decades of disrupted climate patterns, most notably colder and

drier weather in Europe and Asia, where descriptions of months with diminished sun light, persistent cold, and anomalous summer

snow falls are recorded in 6th-century written accounts.”

 

 

 

4.3 Formosans

http://australianmuseum.net.au/BlogPost/Science/Our-Global-Neighbours-Pacific-culture-ancestry-in-Formosa

 

Something similar happened (from genetic evidence) in Formosa to trigger the population of the Pacific Islands .

Other cultural traits often point to Taiwan as the strong link in spreading Australasian-speaking people and their traditions through Southeast Asia and the Pacific.

Indeed Australasian people migrated via extraordinary maritime journeys as far as Madagascar in the west, Easter Island in the east, Hawaii in the north and New Zealand in the south. These migrants propagated their cultural traditions, often modified to suit local conditions and preferences.

- See more at: http://australianmuseum.net.au/BlogPost/Science/Our-Global-Neighbours-Pa...

 

 

5.Future :

5.1 States lose the control of armed force .

This has already happened . Private security (essentially private armies ) ( cf Condottierry) offers services to wealthy individuals whishing to escape .

 

5.2 The traditional route to escape these troubles is by sea . But with newish technology , you need a fleet . Single ships simply won’t hack it .

 

5.3 Postulated  Scenario :

Social order in RSA collapses .

The region is wealthy . It has a large shipbuilding industry . Also large private security companies.

Armed to the teeth , with very sophisticated logistics .

People flee via ships . They have to survive . They arm . They can only survive in large groups with heavy arms . Funding then has to be done via Viking-type raid-settlement-trade .

 

Do not worry about the primitive Somali pirates .

South African pirates fleets will be much worse , although a bit more professional .

 

I did not expect this .

But should have .

Oh Well .

Andre

xxxxxxxxxxxxxxxxxxxxxxxxxxx

 

 

Mon, 04/14/2014 - 20:33 | 4658978 T-NUTZ
T-NUTZ's picture

geezus.

Mon, 04/14/2014 - 20:53 | 4659029 samsara
samsara's picture

Let me get this fuckin straight. You been here 6 weeks and you do this?

You are either the dumbest fuck posting or you are a fuckin troll.

Tylers Delete this sabotage comment. It's only purpose is kill the thread.

Mon, 04/14/2014 - 22:00 | 4659245 yrbmegr
yrbmegr's picture

Took me longer to scroll through it than to completely ignore it.

Mon, 04/14/2014 - 21:24 | 4659123 Ned Zeppelin
Ned Zeppelin's picture

The government is controlled by the Super Rich.

Next.

Mon, 04/14/2014 - 23:45 | 4659542 Seer
Seer's picture

Yeah, how hard can all this really be to figure out?

Further, if the "economy" is about growth, which I believe is so, and that this is a finite planet, then hardly can the govt and the Super Rich be to blame for the eventual collapse: remove them all and the System is still wired for self-destruction.

Mon, 04/14/2014 - 21:38 | 4659173 frank650
frank650's picture

"Social Security has altered society in ways people do not respect. Previously, family units were stronger because the system was the young took care of the old. Introducing Social Security changed everything. What children today save to take care of their parents?"

 

And in many Northern European countries old people are looked upon as a burden.

Mon, 04/14/2014 - 23:49 | 4659551 Seer
Seer's picture

"And in many Northern European countries old people are looked upon as a burden."

And Eskimo culture would have their elderly set themselves off to die so that they wouldn't be a burden.

Different times, different peoples = different actions.

Mon, 04/14/2014 - 21:57 | 4659237 yrbmegr
yrbmegr's picture

Eliminate taxation?  You're nuts!

Mon, 04/14/2014 - 22:38 | 4659367 mumbo_jumbo
mumbo_jumbo's picture

yrbmegr,

I'm sure he's only referring to millionaires and billion dollar corporations.

i actually had a friend who keeps telling me the corporate tax should be zero, when i remind him that corporate tax as a % of GDP is at an all time low his eyes glaze over...and says, whhhaaaattt?

 

Tue, 04/15/2014 - 00:00 | 4659566 Seer
Seer's picture

Also note all the special subsidies/incentives that local govts give to these entities: more and more of this will happen as US companies lose their security abroad- we'll see more and more "bringing jobs back to 'America' propaganda supporting this).

I don't worry too much about it because it's all just spitting into the wind.  Economies of scale in reverse is going to start knocking off these entities left and right: consumers are maxed out (taxes are only a part), and there are far more debts accrued than can ever be paid back (the fun part of fractional reserve under contraction).

Tue, 04/15/2014 - 01:33 | 4659685 Seer
Seer's picture

Down-voter, care to offer an explaination?

Is it not factual that govt gives corporate subsidies?

Don't think there will be a campaign to increase give-aways for "returning" companies?

Or, do you not think that I don't worry about these nuances if money shuffling (which, in the end, mean nothing)?

Logic pussies...

Tue, 04/15/2014 - 09:12 | 4660289 Jack4952
Jack4952's picture

I believe that President Reagan commissioned a report on federal taxes - I forget the name of the man who headed it.

This commission found that NOT ONE PENNY of federal taxes collected by the IRS went into the U.S. Treasury to pay for expenditures by the U.S. government. Instead, it ALL went to the IRS (headquartered in Puerto Rico), then to the IMF and IBS to pay for interest on debt - primarily to the mega-banks.

So how does the U.S. government pay for its purchases? Through the various OTHER taxes, fees, etc. that it collects - and of course, by issuing more bonds as debt.

In short, federal incomes taxes pay for NOTHING in America!!! They all go toward paying off debt.

NOTE:

United States Government Attorneys DENIED via sworn affidavits in a court case that the Internal Revenue Service (IRS) is agency of United States Government. 

 Source: http://www.usavsus.info/IRSnotAgencyOfUS.htm

 

Mon, 04/14/2014 - 22:26 | 4659326 Seer
Seer's picture

Hey, Martin, the economy is based a a false premise: perpetual growth on a finite planet.  The economy is killing itself!  Govts et al are no more than components that play in this dead-end game, they are not the CAUSE of the end.

People can talk all they want about entrepreneurs, but one cannot be an entrepreneur w/o physical resources.  The pressures are building because the available physical resources is rapidly declining (courtesy of the exponential function.

Tue, 04/15/2014 - 05:54 | 4659867 ebear
ebear's picture

Earth is not the only planet in our solar system. 

Tue, 04/15/2014 - 08:31 | 4660097 Seer
Seer's picture

Are you being sarcastic?

Mon, 04/14/2014 - 22:35 | 4659358 mumbo_jumbo
mumbo_jumbo's picture

"Big corporations die because they become eventually run by lawyers not entrepreneurs"

 

yep, just like GM, Chrysler, JP Morgan, AIG, Goldman Sachs......oh wait....but that is the capitalism we have in the USA....BUT YOU BETTER NOT PAY MORE IN WAGES CAUSE THAT IS BAD BAD BAD!!

Tue, 04/15/2014 - 00:25 | 4659608 Seer
Seer's picture

It ALL fails because it's predicated on perpetual growth on a finite planet.  We spend so much energy pointing fingers and laying blame and it never would/could improve because we fail to understand what the REAL underlying source of the problem is: some are just plain ignorant, while others use all this as cover for deceptive actions ("profit" off of a crisis).

Mon, 04/14/2014 - 22:43 | 4659385 mumbo_jumbo
mumbo_jumbo's picture

"Social Security has altered society in ways people do not respect"

 

correct, i do not repect the fact that i will never get back the $200K i've contributed.

damn, this guys sure has an agenda and don't you love how he brings Henry Ford into the discussion yet never mentions that Ford did the exact opposite of what this shill is says you should never do, raise wages...WHICH WAS HOW THE MIDDLE CLASS CAME TO AFFORD HIS CARS!!

 

Tue, 04/15/2014 - 03:00 | 4659763 Seer
Seer's picture

BUT... it ALL breaks down when growth collapses.

Think things through here...

At some point there's an over-saturation.  When everyone is driving a new high-quality vehicle then who is going to buy the next ones off the production line that you're working at?  Trade-ins?  Again, then where do the used vehicles go?

The early auto days were part of the oil boom days.  The supressed consumer activities during WWII delayed the boom, but the boom DID come.  As Kunstler would inform, it's been one big boom orgy based on fossil fuels.

As long as everything is predicated on perpetual growth the game ends the same no matter how you're slicing things up.  The "Middle Class" existed on the growth bubble.

"i do not repect the fact that i will never get back the $200K i've contributed."

Never rely on anything that you have little control over...  easy come easy go.  Promises made, promises broken... have I ever mentioned that humans are naturally deceptive? (if you know the fundamentals then you're a lot less likely to find yourself perplexed)

Mon, 04/14/2014 - 23:05 | 4659452 Raging Debate
Raging Debate's picture

I liked Limacons thread of data. For those with an ear. Anyways, there are ways I can test the latter ratios of the thread regarding reserves and sustainability. GINI coefficent is more widely understood by at least a portion of investors, but worthy bringing up here.

I liked it because it tells of probabilities of the population reacting a certain way based on these ratios. We all do come here to hedge do we not? But if no world war I believe we will see more people checking out like the Soviets did. Why work for 50 hours a week and never get ahead as it gets robbed? In fact the laws set up corral 50% the population into this very lifestyle. As stated, quantul computations are not factored in. However, even with 99.7 predictibility humans are not machines, they will evolve beyond the gaming.

Tue, 04/15/2014 - 03:50 | 4659796 Seer
Seer's picture

"Why work for 50 hours a week and never get ahead as it gets robbed?"

You know, sometimes I have to ask myself what world people are looking at...

My wife is from the Philippines.  Grew up DIRT poor.  She is the antithesis of "entitled."  Her old world (which she lived in until she was 45- no, I didn't go robbing craddles- I was looking for a partner in life) knows little of "retirement," yet, some of the most wonderful people can be found there.  So, you ask, why "work?"  What else are you going to do?  What does nature do?  I'm thinking that we're trying to fix/make sense of something that's based on a false premise (and refusing to question the premise itself).

"However, even with 99.7 predictibility humans are not machines, they will evolve beyond the gaming."

99.7, as though we can trust ourselves that we aren't decieving ourselves.  Human hubris... we do all we can to pretend that we're NOT animals...

Tue, 04/15/2014 - 01:37 | 4659688 U4 eee aaa
U4 eee aaa's picture

I don't think it is jobs that will be affected if you cap the rich. I seem to recall most jobs are created by small businesses, not the billionaires. I think most billionaires buy whole companies and then lay off people for 'efficiencies' and assert cannibalization

Tue, 04/15/2014 - 04:02 | 4659802 Seer
Seer's picture

Ever look at what those small businesses are?

Not that many are responsible for manufacturing.  Most are service-related or retail: selling and servicing what the billionaires are responsible for producing/promoting.  I'm a REALLY small farmer: I KNOW small.  However, and whether I like to admit it or not is not the point, I have to rely on things that are tied to those billionaires.  I don't like Big Corporations, but, I'm a realist/pragmatist...  NOTE: I am pushing away from BIG not necessarily because I find it revolting, rather, I KNOW it's going to fail, in wihich case there's only one direction to go...

"I think most billionaires buy whole companies and then lay off people for 'efficiencies' and assert cannibalization"

Assets are not going to be cannibalized if they are functioning well.

As to laying people off, yes, sometimes it's necessary to reduce bloat (from previous management/owners who were too kind).

Not defending anything other than logic.  And the bottom line is the bottom line: what else can be used to best determine efficiencies? (and, striving to be inefficient just doesn't seem like a viable approach)

Tue, 04/15/2014 - 16:06 | 4662481 U4 eee aaa
U4 eee aaa's picture

Monopolies are perfectly efficient for their owners. Some people would rather close down a business, throw thousands of people out of work, destroy as many lives in the process and make two dollars profit than they would keeping those companies running (that requires work after all), those families fed and only make one dollar profit. That is how some people think. If you don't believe me, then tell me why all those jobs vacated America and are now operating in China (but first, they parked in Mexico for a few years)

Tue, 04/15/2014 - 01:48 | 4659703 MeBizarro
MeBizarro's picture

Supply-sider says we need tax cuts! We should borrow heavily to pay for them too!

Tue, 04/15/2014 - 04:04 | 4659803 Seer
Seer's picture

If you can see that one side doesn't work then how can you believe that the other side can?  It's the same (perpetual-growth-based) coin.

Tue, 04/15/2014 - 03:29 | 4659781 RECISION
RECISION's picture

It is partly the Rich.

and...

If there was no 30-year mortgage, the price of houses would decline sharply because if people had to PAY CASH for a house, then the price of a house would fall to the point where the average income could afford it.

Bollocks - it is not a linear equation.

 


Tue, 04/15/2014 - 03:57 | 4659799 object_orient
object_orient's picture

But I thought all those Chinese investors paying cash for houses were pushing prices up, not down.

 

Whatever.

 

Free Jon Corzine! Cut Social Security! Give the oligarchs a break; they worked hard for those ill-gotten gains.

Tue, 04/15/2014 - 04:06 | 4659804 luckylongshot
luckylongshot's picture

So according to this jackass the Rothschilds having accumulated $100 Trillion through their control of the right to create money has nothing to do with the resultant struggling economy and we should be blaming the government....what total BS.

Tue, 04/15/2014 - 04:33 | 4659827 The Abstraction...
The Abstraction of Justice's picture

A revolution that does not begin by confiscating the assets of the arch-oligarchs is a fake revolution that exist to enrich the arch-oligarchs. That is a given, but the means by which these potentates got their power was the overspending of governments, and the need to borrow what could not be collected in taxes. So we need to take the wealth from the Rothschilds, but also to sanitize our governments, to stop some other aristocratic usurer taking their place.

Tue, 04/15/2014 - 07:52 | 4659974 Seer
Seer's picture

Not in defense of the Rothchilds', but even They are not the biggest problem we face.  Clear all our debts (toss out/hang all the bankers), toss out all the politicans and appoint saints and we're STILL facing BIG problems: increasing population sizes and decreasing resources.  I have no answer on how to "fix" this, I only know what it means, as well as what it doesn't mean.

Tue, 04/15/2014 - 08:10 | 4660015 The Abstraction...
The Abstraction of Justice's picture

The solution is to do nothing. When populations outgrow their resources, they diminish. Just let things take their natural course.

Tue, 04/15/2014 - 08:30 | 4660094 Seer
Seer's picture

Yes, that's really pretty much it.  And that'll be the reason why we'll see wars...

Tue, 04/15/2014 - 05:12 | 4659841 falak pema
falak pema's picture

Beg to disagree.

As I have posted here since the beginning, its the Reaganista Mantra-- elaborated by the two catholic Kings of Supply side Neo-liberalism that has created the MINDSET, hubristic and elitist to the extreme; coupled to the subsequent NWO dogma and the outsourcing "slave arbitrage" labour meme; all under  the aegis of NWO WTO architecture; --- that has blossomed venomously into Bubbleonomics : the derivative fed, Frankenstein Global fiat spaghetti economy.

Aided and abetted by the US MIC gun, from Mossadegh days to Nam and Iraq-Afghan plays; the legacy of Dear Henry's Metternichian Cambodian, Chilean-Condor and ME shuttle diplomacies; the very heart of Pax Americana's hegemonical construct of the 60-70s.

Thank you Maggie and Ronnie and all those shamans from Friedman to Greenspan to Robert Rubin of GS that built the Empire on the moving sands of Nixonian revoke of BW and the start of the Euro-petro dollar financial scam propagated from Citadel CITY of London town.  WS/City, Twin pillars of the Anglo-saxon takeover of the world economy.

And now, as thieves fall out, and rival hegemonical Empires raise their ugly heads-- just like when Pax Britannica started to implode in 1910-1914-- its PAYBACK time; from Kiev to Crimea, from Libya to Syria to Tehran and Afghanistan, from Peking to Fukushima to those Islands in the South Sea tsunami land. 

What Pax Americana has spawned, under its Post Aldous Huxley day traumatic morph in Dallas,  it must now assume as its natural legacy to future generations. 

To come back to the Financial thread, read what French Economist Thomas Piketty has to say about the causes of past-- and present-- financial crises and how the neo-liberalism Mantra of the Oligarchs, time and again, brings CRISIS AFtER CRISIS through inordinate accumulation of RENTIER and unproductive wealth. 

Its not the FDR taxation of the rich that causes financial crisis, its the speculative economy of financially fed empires, which is in essence the slothful and corrupted child of rentier Oligarchy spawning that creates the delusional mindsets of repeated disasters concocted in Hubris. 

...The main driver of inequality--returns on capital that exceed the rate of economic growth--is again threatening to generate extreme discontent and undermine democratic values. Thomas Piketty's findings in this ambitious, original, rigorous work will transform debate and set the agenda for the next generation of thought about wealth and inequality....

Capital in the Twenty-First Century eBook: Thomas Piketty, Arthur Goldhammer: Amazon.fr: Boutique Kindle

Tue, 04/15/2014 - 08:26 | 4660077 Seer
Seer's picture

falak, all well and good, but the PRIMAY cause of these cycles of decline is GROWTH, rather, the inevitable slide down the other side as resource connsumption can no longer be satiated.

Sir John Glubb's wrting "THE FATE OF EMPIRES and SEARCH FOR SURVIVAL" pretty much documents that empires don't die due to ideological reasons.  I really wish that more people would read this!

Tue, 04/15/2014 - 09:44 | 4660426 falak pema
falak pema's picture

thats the longer term trend : moving away from the consumerista frenzy model and rebooting the economy away from the asymptote of fossil fuel fed industrial model of 19/20 th century.

We missed that bus in 1978, when peak cheap/conventional world oil was cleary heralded; but there again Reaganomics required that the Saud spigot be WIDE OPEN. 

And NWO globalization did the rest.

Now we have to rethink the whole paradigm; when the US  Oligarchy decides if they want WW3 or scrapping the Reserve fiat cum consumerista age of Bubbly NWO. 

Wed, 04/16/2014 - 05:21 | 4664301 theprofromdover
theprofromdover's picture

Its all about the pensions, stoopid.

Oh, and the SS

Oh, and the MIC

Oh, and the pork

Oh, and the wastage

Oh, and the failure to collect corporation taxes.

Plenty of slack in the system still, without taxing the folks some more.

Do NOT follow this link or you will be banned from the site!