Eric’s Blog

I’m getting more and more agitated. There are two words that are absolutely murdered by propagandists today. Those words are fairness and justice. Now I believe in justice and I believe in equal opportunity. While I don’t believe life is fair or we should expect it to be I know that any time any word is compounded with fairness or justice than it means the opposite. Hey, if you haven’t noticed the most common naming scheme in the world for a bad idea is to name it the opposite. Look at the stimulus bill. We were told unemployment would not go above 8% if we did it and would go close to 10% if we didn’t. It went to 10% and now those same people (Christina Romer) are saying it will hover in the 9s. Excuse the aside, she just said she was totally wrong last time, big surprise for someone who never left the halls of academia to really understand economic factors like why companies do or don’t hire. Just an aside, $1T out of the private sector did more harm that good and I can document and debate easily.

Getting back to fairness and justice. Here’s the simple concept. Let’s start with what is fair. Is it fair that you start out clueless, get acne, get dumped and made a fool of, struggle to get by and just about the time you figure life out your aches and pains signal that your probably most of the way to the grave? In case you’re in your 20s or 30s and your eyes are glazing over I’ll just tell you the answer. No! Life is not fair. If any two people could get everything they wanted out of a deal then half the marriages today wouldn’t end in divorce. Rule one of fairness, life isn’t fair. So that leaves two choices. One choice is to figure out how life works. Let’s say we were to talk gambling. Casinos have a several percent advantage. What does that mean? It means over time you are going to bleed cash until it’s all gone. It’s statistics. Now let’s look at a fair way to deal with this. First the rational way. Don’t gamble… unless you can buy a casino. Now we have adapted to an unfair world with no lose propositions. Now for the irrational way. Complain incessantly as you lose all your money, get drunk and ruin your life. It’s not fair, is it?

Now let’s take our unfair casino model a little further. Let’s say you instead legislate that casinos have to flip their margins and pay a small percentage. That means the longer you play the more you make. There is a problem though. Casinos didn’t get rich being stupid, so now they are doomed to go out of business. So let’s take the richest gamblers and give them different odds in the casino so they pay a lot more and keep the casinos afloat. Sound fair? Well, not really, but let’s call it casino-fairness anyway. It’s fair because we should be able to go to a casino just like rich people, but while they can afford to go to lose money we can’t. That’s not fair. Now it’s fair, but it’s also gotten more popular and the casino could go broke so we need to up the percentage that the rich guys pay. Now all we need is someone, say a high government mucky muck to say that it’s the patriotic duty of those rich people to step of and pay their share. Fair enough?

I’m going out on a limb here and saying that you think my rich person funded casino is not only stupid but really not very fair. The question is whether you are okay with getting the Mafia to hold a gun to some rich guys head and make him spend the money so you can win yours. Well, are you OK with that? The funny thing is my casino example is a lot like the US tax system. Almost all federal taxes are paid by the upper 10% and the bottom 50% not only don’t pay but get money back. in fact it’s approaching 60%. However that merry go round is about to spin out of control because the vast majority of money in this country is in the hands of the middle class. Oh yeah. We’re getting just about all we can out of high earners and businesses and if we took 100% of everything the top 10% earners make we could only run the country a few months. Oops!

So getting back to fairness, how about tax-fairness? What does that mean? We have a progressive tax, which doesn’t actually have anything to do with progress other than stifling it. Progressives are economically descended from Marxists. Try this on. From each according to his ability to each according to his need. Great president? No, the same guy who said the duty of the lessor races was to die. No, not Hitler, Karl Marx. It really comes down to what you want to equalize. I choose opportunity, Marx chose outcomes. If nobody can have a better outcome than anybody else then you have to ask yourself a question about the person living on the street… Is it possible they might actually be there by choice for reasons we can’t understand? It may seem an absurd question but it is only pertinent because the only way to have equal outcomes for all is to put everyone at the lowest level. I’ll simplify here. If people got rich by accident poverty would require a concerted effort.

Equality of opportunity is different. It is the level playing field. Being a musician I like to think of Django Reinhardt. I used to read every guitarist I liked credit him as an inspiration. So I dug up some of his music from the 1930s in the Hot Quintet du France. This Gypsy was amazing, but even more so because his left hand was burned in a fire and permanently deformed. Many people said he would never play, and yet he became one of the most influential guitarists ever. Nobody ever talked about giving him some special musical fairness, best deformed guitarist or anything. I have always liked the saying that we are born with an equal opportunity to produce an unequal result.

So getting back to fairness and justice it is any kind of fairness or justice that bring a discoloration of the pure essence of what is just and equitable. What is fair and equitable is that we all pay the same tax rate so that if we make more money we keep the same proportional amount. It’s possible to lose money if you make just enough to hit the top bracket today. I’m willing to make the concession to give those less fortunate a break, but the worst part of fairness is that it never ends. People are finding more and more things that aren’t fair and the government is making more and more laws and regulations to make it fair. In the end we have so many rules and regulations it becomes nearly impossible to comply and more and more expensive. Our tax code and regulation is all about a nanny state nudging or bludgeoning us in the direction they want.

The problem with seeking fairness is it is rooted in a utopian belief and the problem with government and utopia is that you have greedy powerful unaccountable idiots running it. The United States is a truly amazing creation of government and free enterprise. Our failing has been when our libertarian government and free enterprise system have gotten in bed together. It’s a marriage made in hell, crony capitalism where money and power is given to people drunk on the rewards and ready to prod the masses with a class warfare message branded in fairness and reeking of social justice that soaks those evil rich… You know, the bankers and business people who actually have been honest that the bankers and politicians who are lying to you want to distract you with.

It couldn’t be much simpler to cut off this fat cat wealthy Washington DC money grubbing politician and their big money friends. Simply turn on them with pitchforks and torches whenever they combine any word with fairness or justice. You can be sure when they say that they are trying to divide us to be led off to support their grab for more power and more of our money.

Just say no to fairness.

When I was in the Navy I noticed that seemingly every officer who flew right seat in charge of ordinance was a political science major. I asked if they need to understand this before the bombed the enemy but they didn’t think it was funny. Shut up enlisted peon. Whatever. This is not about political science you study in college. This is about science being replaced with politics and the science of politics.

When I had my revelation about the obvious flaws in global warming I got a few videos, which I recommend everyone do. There is a new one out I haven’t seen called “Not Evil, Just Wrong”. I got Lord Monkton’s “Apocalypse No” and “The Great Global Warming Scam”. The later had a good number of interviews and an extra DVD with more interviews with scientists in the field. It was interesting to see guys like Chris Christy who had been one of the top IPCC guys at the start and had walked away. Christy was all the more interesting because of a common claim of science by consensus. He insisted his name be removed from their summary. He said most scientists gave up and let their remain. (Christy was sincerely interested in global warming and retasked NASA satellites to get the data showing no boundary layer)

This is perhaps one of the most interesting things about such reports. The people in charge of producing an IPCC report are not scientists. They are managers hired by the UN, or as we would say, bureaucrats. Many scientists who originally worked with the IPCC did not agree with their conclusions, but little wonder. I really love Penn & Teller’s Showtime show Bullsh*t. One episode they did was on second hand smoke where they pointed out that the report could find no conclusive evidence as to any health issue. This is not what the World Health Organization wanted in the summary so they wrote a conclusion that was in fact any thing but inconclusive. Here’s the interesting part. They understood that if you have a report that is hundreds or thousands of pages most people are too lazy to read it all and just read a few pages of summary. That means you can commission a report on anything, get whatever data is returned and then say whatever you think you can get people to buy in the summary and you will probably be just fine. Penn & Teller are non smokers BTW in case you want to send them hate mail.

And so we have the assertion put forth of the 2000 plus people involved with the IPCC that they are all scientists and that they all agree completely, every one of them down to a man. Now to sell this really preposterous idea you must present it in a very serious way and with absolute conviction so that nobody smells the undeniable odor of bovine excrement wafting up from the assertion. Think about it. Climate science is a very young discipline. Every year computer modelers get together to see how they did predicting this year’s change and every year they are all 3%-6% off. Compound a 3% error over 100 years and you’re off by 300%. That means in a century what was 70 degrees is now 210, almost hot enough to boil water. At 6% you’re broiling steak at twice that.

It would be great if a fledgling science could somehow suddenly get thousands of selfless scientists who could alert us the the horrible end of civilization only a few short years away that somehow we were all too stupid to know about before Al Gore showed up with an inconvenient message like manna from heaven. On the other hand it took doctors decades to heed the science to wash their hands to stop spreading disease. Granted there was consensus for those decades, but at the cost of many lives for the arrogant educated looking down their nose at real science. But there hasn’t been any dissent on this new idea has there? Funny thing about that. Let’s say that I were to cede that, even though maybe 100 of those people involved in the IPCC reports were scientists instead of railroad engineers or eco-fundraisers, let’s say they are all scientists. We’re talking people with degrees from universities in science, not some knuckle dragging Joe lunchbox out of the public school system. In fact let’s take it a little farther. Let’s say they all had PhDs in some science field. 2,500 PhDs. Now let’s see if we can find any people with the same relative standing to offer a counter opinion.

You know what? Let’s put it this way. You line up your IPCC alarmist fund raiser bozos, the whole kit and kaboodle and I will just see if I can find as many PhDs who disagree. Would that make you think maybe we should revist? Wait… I feel generous. I’ll give you 2 to 1. I need 5,000 science PhDs. Aw what the heck, 3 to 1. If I could show you 7,500 science PhDs who disagree with the IPCC position on global warming then you would reconsider if the science was settled? This is what I thought was so interesting. The petition where each signer was vetted was put together in my home state of Oregon no less by OSU scientists. As of this reading I see 9029 PhDs and 31,486 scientists total. Have a look here.

So let me get back to the politics of science. Al Gore loves to say the science is settled. Doesn’t look settled to me. Does this look settled to you? Let’s consider the politics of science…

When you publish a paper you have to find a scientific journal to publish it. So you have to get to first base with a publishing organization. To be considered peer reviewed you have to submit your paper with your assertion and the documentation. This is given to other scientists who then see if they can duplicate your experiments or verify your formulas and data. The critical factor is that those reviewing cannot have a vested interest in the review. So you can’t have your partner review your new widget you plan to sell to the defense department and say it’s good and expect to have any credibility. So if you could manage to influence the relatively few publishers who wanted your idea to succeed you could in theory keep competing ideas from being published. This was one of the revelations in the climategate emails.

So when the hockey stick graph that persuaded me global warming must be real was published it seemed very interesting to a couple guys in Canada. Steve McIntire has an award winning blog. Imagine contacting the author of the chart and asking if you could have the data to do a review. Remember if a report is peer reviewed than the data must be available, but it turns out that it wasn’t. In fact this data was never fully made available but with some sleuthing they finally came upon what was being done in weighting a mix of data in such a way that you could have mapped your bathroom visits in the last month and got a hockey stick.

This was the perfect example of how to lie with statistics. Unfortunately we have to trust some people. If you can’t fly an airplane (and don’t have wads of cash) you’re going to have to trust the pilot. However in the case of peer reviewed data that is in fact clearly not peer reviewed… Congressional hearings ensued and it became clear the hockey stick was a fraud.

So what happens when you disagree with the climate orthodoxy? In Iran if you are found to be against God they kill you. During the Spanish inquisition if someone accused you of being a witch they tortured you until you confessed. Confession is good for the soul. Today in America we have come a long way. Unfortunately one consequence of our constitutional freedom is that the orthodoxy is prevented from disposing of those who inconveniently blaspheme their doctrines. Since they can’t simply kill those offensive knuckle dragging flat earth idiots they simply assassinate their character.

Here is the final bastion of irrational thought. First the deacons pontificate and strut about naked proclaiming their silken robes. Many people fall in line because they said they had clothes on with such convictions. Hey if you’re not too smart why call attention to it by pointing out that the emperor has no clothes? Of course calling it into question gets a stern rebuke. Disagreeing requires something stronger. That’s when the condescending name calling starts. Of course the emperor’s robes are nice. Unfortunately they forget the words of Gandhi, “First they ignore you, then they ridicule you, then they fight you, then you win.”

Here’s the central idea to take away from this. In America our founding fathers had differing ideas on how to construct a government. In the end the back and forth created the most amazing and successful long term government in modern times. No small feat. When you look at all great accomplishments you see that people must come together. They must bring diverse ideas and in the testing and debating the forge a fusion of the strongest elements into something great. No man who possesses a great idea or a worthy proposition is afraid to bring it to the table for debate. The conviction that your idea is worthy, that your discovery is significant, that your research is right… That is something you surly want your chance to prove.

If you are trying to put something over on people you take a different course. You first focus on packaging, because if the content is lacking the packaging had better be great. Then you seek to present where you cannot be questioned or debated. If you are drawn into a one on one discussion where someone can expose the failure of the merits of your assertions it could be your downfall. Most ideally you look to get endorsements from popular voices and finally you present with the confidence that even though this is the first time somebody has heard of it that it is old news and everybody else knows it’s true.

I close with this. Al Gore is a politician. He can say he is heavily invested in carbon trading because of his convictions, but that doesn’t change the fact that he would take pennies on the dollar and become a billionaire. He can say he believes everything he said and that he donated $100,000,000 to charity, a charity he oversees. He can try to tell me that it’s not an awesome tax shelter. The guy debated George Bush on TV when he ran for president. He can debate one of the people challenging him. In fact when the eco-press took the mic away from a film maker asking him an inconvenient question last year it was the first time in four years he had taken a question. Ask yourself, why isn’t Al Gore explaining and supporting his settled science as so many doubt it?

When politicians can deliver science without answering questions and stifling all debate, then ask for the largest tax increase in US history that will make them rich and suggest we need “global governance” I think we can say that is science being co-opted for politics. Not only is the science not settled, the politics aren’t settled either.

I recall the first time I heard this expression. It seemed revolutionary to me and I had to ponder it. It made sense. The economy is a complex and intriguing beast. The very idea of creating wealth is at once obvious and mystical. Adding value into an economy enriches the initiator as well as the consumers. Look at the obvious benefit of industrialization. Goods became cheaper yes, and people were able to buy more, but leisure was also in the offing. Look back a few hundred years and the average rural family spent most of their day raising food and doing the chores it took to run a household. Almost everything they consumed came from within a few miles. Dinner items we take for granted were seasonal, if at all. Just doing the laundry was hours of labor. Many people spent nearly every waking hour just doing what it took to run their families and often the whole family worked together. That’s the reason for summer vacation in school, so children could help on the farm.

When you look at today it’s all different. Our children don’t work to help support the family and instead of working late and doing chores we’re watching TV, playing video games or socializing. Not only do we all have gadgets and cars but we have half a day for the most part to do other things besides work ourselves to death… except of course for crazy self employed people. Most significantly we only introduced federal income tax in 1916 and now those who have been the most successful pay half of everything they make to the massive government we grew.

If you think about it, it’s rather intriguing that our society has been so remarkably productive that we can pay such a large chunk of the wealth we create to an ever swelling tumor on our economy that we know as a government drunk with power and out of control spending… and even as the life is slowly being squeezed out of our economy we still live so much better than before. I’m sorry. Am I being dramatic? I invite you to make your own evaluation of our current and proposed budgets. I thought it was ironic that our president reflected the concerns of the nation and talked fiscal responsibility, then proposed the biggest budget ever.

I plan another post on the wrongs of Keynesian economics and to be fair George Bush also ran up a lot of debt. However Bush can be defended by pointing out the dot com bubble, 9/11 and two wars. That being true domestic spending still went up way too much so it’s not a good defense. However Americans are all too naive as it is congress who holds the power of the purse. In 2006 we got fed up with the Republicans spending too much and put the Democrats in control. I believe a survey showed 18% of Obama voters even knew who was in control in congress The point is for as bad as Republicans did… Democrats are making them look like amateurs.

The problem with all this spending is finding more money. Here’s the irony. Wealthy people already pay most of the taxes in the country. The bottom half pays no federal tax, even though you see things deducted that’s not federal tax. The top 5% pay almost all the taxes. The more money you make they more they have foreign and unusual carnal knowledge with your wallet. The ugly little truth though is that there aren’t enough rich people. If you took 100% of those top 1% earners income you could only run the government a few months. Excuse me, I mean that is how it used to be. As it happens now you can only run the government a little over half the year anyway. The rest was Chinese money, but now we’re just printing it like they did in Germany after WW I when they needed a wheelbarrow full of money to buy a loaf of bread.

Here in Oregon, to my shame and disgust, we decided to soak the rich recently. After all the rich can afford it, right? Oregon now has the highest top marginal tax rate in the country, but don’t worry. For years we have made it difficult for business which is why Portland is the leading test market in the country. If you can make money in Portland you should be able to clean up in any other city. However if you happen to make too much money in Portland, however unlikely, you can move to Clark county. You see Washington has no income tax. Right now it’s cheaper to get a residence there for tax purposes if you’re being hit by this new tax. We aren’t yet, sadly, but as of this year we plan to look for property in Washington instead of Oregon. When you add it all up you realize that taking home 40% of your paycheck means looking for ways to suffer less.

So getting to my subject, think of our economy not as a collection of classes. Think of it as the productive element that creates value and wealth and the public sector which inevitably falls into the category of an expense for the productive private sector. We need roads, bridges, water and police among other things government provides. The class distinction makes the appeal that government needs more money so who should pay. From each according to his ability to each according to his need. Well, actually that was Karl Marx who also said it was the duty of lessor races to die. The first question should be why does government need it.

Government needs more money because they get more. Let me explain. The average public sector job pays substantially more than the same job in the private sector and offers retirement 10-15 years earlier with sizable pensions. Government employees see raises several times the cost of living every year. In down economies public sector production goes down. Top earners who are disproportionally taxed earn less money and governments who are dependent on this income lose these high value assets as well as the unemployment factor. Governments budget for optimal economies and are ill prepared for less income. The solution is to tax more out of the economy.

Now go back to what I opened with. Wealth is created by adding value, and those who consume benefit from that value as well as those who provide it. Those who provide ride that demand and expand their business thus providing income to more people. In simple terms adding or taking away money from the private sector will grow or shrink prosperity regardless of where it is done. However the irony is where it makes the most difference. When small amounts of money are given to large numbers of people it makes a small difference in the overall distribution of wealth. However reducing or increasing the tax burden of the wealthy is quite different. Why?

There is an old saying. Serve the classes, live with the masses. Serve the masses, live with the classes. By and large most wealth is accumulated by offering a small value to a large number of people. The more this is encouraged the more the engine of prosperity is stoked. The more wealth and the the more easily accumulated by the common man striking out in a business the more he spends with other businesses and the more likely he is to hire people and support more families with is work. The more families well supported the more spent at various businesses.

In simple terms, pulling money out of the productive public sector for government is essential to a point. Past that point it becomes wasteful. At a point beyond that it becomes such a drag that it threatens, well… to kill the goose that lays the golden eggs. Remember that story? When our economy slows our citizens need to tighten their belt. we need to do with less. Our government, if you think about it, no longer seems to really operate at our discretion. It holds us hostage. It requires us to feed it’s excesses and if we do not then we are hauled before the courts. Occasionally because of restrictions some wise people set on our government they must ask for consent to further consume the bounty of our work. Recently Oregon demonstrated they don’t get it and want a worse economy… soak those filthy rich.

The saddest thing about soaking the rich, aside from those who end up losing their life’s savings as many did recently, is that while the rest manage to get by with less… the people who can least afford to get by with less are now looking for work because they are now too expensive to keep on the payroll. But the truth is that it doesn’t matter whether you are rich or poor when hardship befalls you. It is all difficult, and all the more offensive when it happens because of class warfare and in the guise of offering the essential services we require as a society while in fact disregarding the simple law the rest of us live by. If you can’t afford it, cut back!

Please educate yourself on our economy and become active to preserve our prosperity and way of life. When government attempts to divide us to take some of our money we need to remember that we are all in this economy together and we all need each other to have as much of our money as possible to promote the prosperity of our economy. We need a rising tide. Sinking the lead boats is not going to get ours out of dangerous waters.

I am a history buff. 2000 years ago it was unimaginable that Rome would fall. 1500 years ago it did. When considering great civilizations one cannot help but wonder if we could have the 800 years they did, or longer if you count the Byzantine empire which Rome spawned. When you ask people if they know why Rome fell it is interesting the answers you get. Of course there is the public school educated puzzled look, isn’t Rome still standing? Then there is the old school myth that it was lead poisoning. Finally there is the rightward assertion that it was not protecting their borders. Any explanation of conventional wisdom may have some truth to it, but will be woefully short.

First let’s consider, in condensed fashion, why Rome grew in the first place. Rome came to power at the fade of the noted metal workers from further North, the Etruscans. While they had a lot going for them they were basically only one city and Rome took much of their strong points, as well as absorbing them. Rome took the idea of self rule from Greek Democracy in Athens and was initially ruled by a senate. For all that was good and noble about Rome it was also a brutal culture of conquest. However Rome forged their empire with a wise approach similar to Alexander and Genghis Khan. Most conquerors would set out to dominate those who fell to their conquests. Rome instead, initially, absorbed them into their culture. They followed up conquest by building Roman infrastructure in their new territory. This raised the quality of living for the newly conquered while at the same time providing a uniquely Roman culture. Former enemies could become citizens and in the age of emperors they even had foreign born people rise to emperor. They also assimilated technology in their conquests. They were very tolerant to different religious beliefs making it easy for people to assimilate into their society.

Now let’s consider their fall. The assertion they suffered from lead poisoning is true as they considered it a useful soft metal. Lead was used for water pipes until a few hundred years ago. It was also used for cooking utensils. The ruling class were more susceptible because they got even more in the food, like sapper which was cooked down grape juice used in many dishes. Many became sterile and it is reasonable to attribute some of the apparent insanity of emperors to this. While it was a contributing factor it was not the cause. Likewise the argument about borders ignores the fact that Rome became strong by welcoming in a great many more people inside their borders. The element of truth here is that at the end of their empire people were coming in to enjoy the fruits of being Roman, but not being assimilated into their culture. The military also fragmented.

It is interesting that the United States and Rome both rose to power through welcoming foreigners and tolerating religious views. Paradoxically religious intolerance a few hundred years ago was from the vestiges of Roman power a millenia earlier. One key difference between then and now is that Rome was built on conquest. That’s very different from our economy, which was built on manufacturing and trading durable goods. For instance when you look at the remains of the Coliseum you are seeing emperor Trajen’s spoils of the complete annihilation of the people in what is modern day Hungary. Early Roman legions were absolutely unbeatable because of training and equipment. They had superior armor, large shields and the short deadly Spanish gladius sword. They had the pilam spear which had soft metal at the head of the shaft. It would get stuck in enemy shields leaving them useless. They could form the testudo (tortoise) to shield against arrows. They would march forward six deep killing with minimal effort in short stabs as their opponents swung violently to no effect. Then they would rotate a fresh man to the front every few minutes. It was the ancient equivalent of being the sole nuclear power.

Their military was one factor in their fall. When they were on the offense through around 100 AD they were unstoppable. By 300 AD they were only a shadow of their former glory. They moved from an offensive to a defensive posture and suffered the consequences. Their armor was less effective as were their weapons. Where they once forced their will on their enemies and struck fear in their hearts they had become impotent and by defending now had to spread that defense everywhere. Of course the loss of income from ceasing conquest was compounded by losing territory and taxes. Effectively they lost their economic will and began to recede. Repeated civil wars further drained their treasuries which were getting thin by the time they were paying tribute to barbarians like the Huns.

However the most stunning fact to me was Rome’s social programs. You see the coliseum and the great bath houses and markets were the way the emperors appeased the masses. Appeasement seems to know no ends as ever larger projects threatened to bankrupt the nation. Nero and Caligula were killed for their spending. As Rome conquered North Africa they took over farming grain there. Ships laden with grain would sail to Rome and bread would be baked. Every citizen of Rome was given free bread. Imagine a right to free food. When the Vandals could not find a home in Europe from Germaina to Espana they crossed over to Africa and conquered Roman provinces there. Then they informed Rome there would be no more free bread. It was one of their mercenary generals who was attacked while negotiating with an inept emperor who finally allowed his men to sack the city. The emperor listened to stupid advisers who arrogantly thought they could treat real threats as impudent annoyances… and Rome fell.

The important point is that Rome fell because they had arrogant and incompetent leaders who believed they were invincible simply because they were Rome. They lost their national identity and became internally a collection of disparate groups with different interests. They spent themselves into oblivion on social programs while ignoring their economic engine. They weakened their military. They failed to recognize threats. In roughly 800 years they were only defeated in the peak of their power by one civilization. Ironically their one foe who beat them also captured two emperors. Consider the hubris of a Roman emperor riding into battle thinking his presence will assure victory. It was the Persians who humiliated the Romans and kept an emperor to entertain their royal court. They had the superior military advantage of cavalry armed with exquisite bows and consummate skill. Their warriors could ride in retreat and turn and fire to the rear with deadly accuracy, from which we get the expression of the “parting shot”. Persia by the way is modern day Iran.

The great irony is that Rome, much like Greece, really is Western civilization today. Our languages and cultures are all rooted in Rome. Our medical knowledge did not begin to advance beyond theirs until the 1600s, and even that is only part of the story. In fact the Romans were doing brain surgery, a feat not repeated for over 1900 years. Even more amazing they had piston water pumps and steam powered spinning wheels 2000 years ago. Had they put the two together they could have had locomotives 1800 years earlier than we did. We tend to think we are somehow smarter, but we’re not.

Perhaps the most alarming thing is how we seem to be following the lead of Rome. Our economy is not grounded in conquest, but our military strength is no less essential to our security. With 320 million people in a world of 6.6 billion our only way to invoke fear in those who would threaten us is through superior weaponry. I read recently the assertion that we could have not stopped the USSR in the late 1940s from rolling through Europe without nuclear weapons. It’s tough to dispute, but our president is ready to get rid of them, and he seems to believe that he can succeed with Iran where all others have failed… simply because it’s him. French president Sarkozy intimated Obama is arrogant and naive. Our culture is splintered by ethnic and other factions by self serving politicians who want to leverage and perpetuate political power and financial favors. We are so in love with social programs we have several going broke, Social Security going into the red in 2010. Still we fight over adding adding the largest program ever in health care and the largest tax ever in cap and trade. You don’t need to be highly educated to predict financial collapse without making tough decisions about spending yet this year we gleefully added a trillion dollars to out deficit for no purpose other than to perpetuate our problems. In 2009 congress will spend $44,000 for every household in the country and borrow 40¢ on every dollar. For what? Now we are looking at threats from “small countries” and missing the point. The first world war was started over a single assassination. What might happen over a full blown attack in the most volatile part of the world?

The most important thing to learn from the fall of Rome is that the Romans first stopped seeing themselves as great but never thought their civilization would fall because it had once been great. Once they could eliminate the possibility of failure from their minds they no longer had to consider the consequences of any action and turned to mad self indulgent political suicide. I imagine hundreds of years from now when people look back that if history is preserved the conduct of the leadership of the U.S. at this time will be required reading on arrogance and foolishness in the face of danger. Neither man nor nation can ever be immune from the consequences of terrible policies. Rome is now a legend for the ages. The United States can resume being the fabled shining city on a hill or recede into history. To fail to learn the lessons of Rome is to edge ever closer to it’s pathetic end.

I was astonished by something I heard Judge Andrew Napalitano say today on Neil Cavuto’s show. I should preface this with a thought I had about the bill Senator Max Baucus is introducing. Senator Baucus plans to require every American to have health insurance. Now pragmatically if you are a young self employed person who doesn’t see a need to spend $4,000 a year for decades before you have any real need he is proposing tax incentives. So someone who can afford health care and may well need it can help you buy yours. My point is that when your state government requires you to have liability insurance to drive on state and federal roads it is completely reasonable. It is a requirement that if you access public roads you certify you are responsible to pay for any damages you may cause others. I agree. I recall state exemptions if you could prove a net worth of a high enough value in years past, though that is not at issue. The point is that there is no requirement for you to have full coverage, only liability. So if you get in an accident that is your fault you still have to pay your medical bills and pay for the damage to your vehicle. I guess your lost income and tax revenue aren’t much concern there.

The problem I thought initially with the Baucus plan is that the government doesn’t own health care, at least not most of it. By what justification does the government insist you have insurance? Then again they do insist a business owner carry unemployment insurance. I recall a guy I knew who worked road construction. Over the winter the company he worked for would lay the work force off. They collected unemployment until the company was ready to start back up and they hired people back. It seemed perfectly fine to him. I can’t lay myself off, but I don’t want to anyway. It just bugs me that people work the system. Another thing I heard Judge Napalitano say once was that Social Security was the biggest Ponzi scheme ever. When I was young I remember the fight in congress to end the practice of using surpluses in Social Security to pay for general fund items. In the corporate world they call that embezzlement. I’m 52. I neither expect nor want to see a dime from Social Security and if you are 30… LOL But I digress…

I hadn’t looked at the constitution for a while, but the other day I did. After what I heard the judge say today I did again. It was particularly interesting after I read an article about the first amendment and that we tend to err and say congress grants the right of free speech. Read what it says.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

In case you missed it it says congress cannot restrict your right to free speech. It is considered natural law, that you were born with a right to free speech and the government has no right to take it away. That is why McCain-Feingold is headed back to the Supreme Court. It is perhaps exquisite irony that Senator McCain lost his bid for the presidency while his savvy opponent opted out and outspent him 2 to 1. That’s just an aside, but cash remains the greatest mandate in politics. Again, I digress…

Article 1 Section 8 of the constitution enumerates the powers of congress. What the judge said was that there is no right whatsoever to legislate health care. To be clear consider the 10th amendment from the bill of rights.

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

When the United States was being formed there were years of arguments between those who thought states should have power and those who favored a strong federal government. They compromised. Compromise often proves wise. I should point out that some people interpret “providing for the general welfare” or other statements to mean we have a right to health care. Any such broad interpretations would necessarily mean a right to groceries, a nice house, etc… And for many that might be fine, but they tried that in the Soviet Union and it didn’t work so well.

The commerce clause though is where most extra-constitutional law is justified. As the judge pointed out seeing your doctor hardly constitutes “interstate commerce” and the point of the clause was Madison’s wanting to prevent states from creating tariffs and blocking interstate trade. Ironically this is precisely what congress has done with health insurance! Again as the judge pointed out, removing this highly questionable regulation would quickly drive down health insurance costs. He’s got a point. Does every man in New York need to insure for breast enhancement?

I often talk with my European friends and think it odd that after an election they assemble a government. We have constitutional government and consistency, a consistency that is unmatched in modern history. Yet when I look at the constitution it suddenly seems illusory. Every member of congress, the military, the president and I suppose other offices of the government takes an oath to uphold and protect the constitution. Is that now somewhat quaint and dated? Do a search on “negative rights” and you will see a popular view now is that the bill of rights is “negative” because it says what government can’t do to you. It doesn’t say what government must do for you. I have seen videos of our president talking about this idea.

If congress wants to make whatever laws it wants and let the courts decide if they are constitutional then are they upholding their oath? The president seems happy to wade into murky waters. Do we even care about our constitution any more? Here is a simple question. If those in the highest offices in our land are picking which parts of the law they wish to uphold and which parts to ignore than can we still say we are, in the truest sense, a nation operating on a solid legal foundation?

I am concerned that our current fiscal irresponsibility is putting our economy and thus our nation at risk. What we put at risk cannot begin to exceed the value of our principles and our character as a nation. Therein lies the rub. The greatest nation and success story on earth can only hold to that claim as long as it holds to the wisdom and principles of it’s founders… The power of government is granted by the people. They work for us! I close with a quote from Thomas Jefferson. “Any government big enough to give the people everything they want is big enough to take everything they have.” We should decide whether to throw out or keep the constitution.

And by garbage I mean Micheal Moore. How uncouth do you have to be to make a movie capitalizing on the Columbine tragedy? Remember when he tried to ask if powerful people would send their children off to war? His assertion was that Bush would never send his child or go himself, but being a monster he would send children of those less well connected. I thought it was interesting in the last election that of the presidential and vice presidential candidates three of the four had children in the service going over seas. The exception being Obama for the obvious reason his children are too young. Funny how Moore wasn’t there and nobody talked about his stunts.

Now he’s back with a new film. Why? Maybe it’s the adulation, though I can’t think who still respects him. He has one schtick and it’s getting older than Robin Williams hamming it up non stop for two hours. As an aside I think Robin Williams is brilliant when forced to act. I digress. Maybe Moore just got addicted to all the cash of his initial success and as recent films haven’t done as well it’s time again to fill the coffers.

His new film asserts “Capitalism is evil” and what does he say it should be replaced with? “Democracy”. Now if you’re old school like me no doubt this is confusing. Don’t we live in a democracy? Technically no, it’s a republic, but it’s a democratic republic. Without getting into that civics lesson or arguing if we have become an oligarchy or flirted with fascism I’ll explain. It is best illustrated by the bastardization of democracy, democratization. Let’s use it in a sentence, shall we. The glorious and benevolent Argentinean leader Hugo Chavez is democratizing dozens of radio stations that disagree with him.

Now I know what those of you educated before our national education system made us a joke around the world are saying. This sounds anti-democratic. Here is an explanation. I’ll paraphrase. These evil businesses that had all that money didn’t speak for the people. The government is the people so by returning all speech to the government it is therefore once again democratic speech… That is whenever the government decides to begin broadcasting again and decides what speech is acceptable. See? Conversely with capitalism broadcasters would sell advertising at prices based on the popularity of the programming and the number of people reached. If broadcasts were unpopular they would be pulled and if broadcasters were unpopular they would go out of business. Therefore you would be stuck listening to programming that was the most popular from broadcasters that people chose. What a horrible failure that would be!

Some of you must be saying this is nuts, but I remember the 60s and 70s. Okay, some of them anyway. There were the Students for a Democratic Society (SDS). They spun off the Weathermen which were domestic terrorist bombers. You know, our president used to hang with William Ayers, one of the founders in Chicago and another, Jeff Jones, worked on the stimulus bill with Van Jones. BTW the SDS is back! Check it the sanitized info at Wikipedia. Okay, I’m not making the point very well.

The point is that public ownership of everything is to these people democratic. I’m reminded of the saying that true democracy is tyranny. The meaning of course is that a mob is very democratic when doing things like lynching people, but only in the heat of the moment. Of course the idea that we as citizens would actually have any power over that which is in the public purview can easily be illustrated by looking at congress. They exempt themselves from everything they lay on us and instead of seeing themselves as public servants see us as an annoyance lately.

There is an old saying you may have heard. “Power corrupts and absolute power corrupts absolutely.” To my mind that was the greatest wisdom of our founding fathers. They intentionally created a government designed to be dysfunctional and gridlocked. Bless their hearts! Jefferson said it so well. “Government governs best that governs least.” Let’s see if we can come up with a phrase for democratization, shall we. I have one. “From each according to their ability to each according to their need.” Sounds grand, doesn’t it? It just happens to be Karl Marx, the inspiration for Lennin to start Soviet communism. As I recall that regime decided at least 30 million of their own people should stop breathing for the good of the state.

Capitalism and the United States started as what was termed the “grand experiment” because free enterprise and self government were unheard of since Julius Ceaser crossed the Rubicon two millennium ago. Every nation on earth has been impacted and most transformed. From an age of royal despots to a world of freedom we should be an international hero. Our country and system is certainly less than perfect as is to be expected of all human endeavors, but is hardly ready for the trash bin of ideas like communism and fascism and doesn’t deserve an apology tour. I submit capitalism is best, but I’d stipulate it is at its very best when an educated public stops giving Michal Moore money. In these difficult times if anyone deserves to be “democratized” it’s him!

One of the most amazing things to me recently has been the level of outrage over government spending. However some people think it is just nuts. Rather than take a political approach let’s try to look pragmatically at rational fact. First a look at the two sides in opposition. On the one hand those on the left support the Keynesian arguments regarding spending that the government can spend it’s way to prosperity. I saw a youtube video of the president’s head economic adviser, Christina Romer, arguing that FDR failed to keep spending enough to prove it. (It may have been removed) Look up New Deal spending and see if you agree. On the flip side would be the total libertarian view of small government. FYI you might consider founding father Thomas Jefferson, the lead author of the Declaration of Independence, a bit libertarian as he said “Government governs best that governs least”.

Now let’s consider a rational evaluation. I saw former head of the DNC, Howard Dean, say on the news today that the president inherited deficit problems and has been working on it with the stimulus. Ummm… Wasn’t the stimulus $787B in deficit spending? I have learned to develop the skill of active listening. My reason is simple. The easiest person in the world to lie to is yourself. I believe the most natural thing in the world is to repeat those lies to others when the subject of the conversation comes up. That’s how I learned to market our products, by addressing the misconceptions we all have. We have those misconceptions by registering information without properly applying the scientific method. For those unfamiliar the scientific method says you take a hypothesis and thoroughly test it to see if it is true. What Mr Dean said demonstrates mixed metaphors while shuffling talking points and the absurdities that result. Issac Newton posited the scientific method with the assertion that an idea could not be trusted until it had been demonstrated to be supportable in testing. No matter how good an idea sounds I look for evidence to support it before getting behind it.

So let’s begin with our hypothesis. How does the economy work? We create a product. We use innovation and design, apply labor and transform raw materials. This is the “value added” proposition where we produce a higher quality catnip and then add further value putting it in a toy. The “value added” strategy is what made Japan the second largest economy in the world because they don’t have much in the way of raw materials so everything must have value added before reselling. By marketing our product we create wealth… Okay, not so much in our small case, but as a model when this is done on a large scale it does create wealth by adding value into society. Think of houses, cars, gadgets and our infrastructure and businesses. This is the private sector creating wealth we can buy and sell.

Now let’s look at the public sector. Again, let’s not get sucked into constitutional or morality arguments. Let’s take a centrist perspective that there are a number of worthwhile essential things done by our government. Government funds what it does through taxes on the private sector. Again, not to say all taxes are good or bad, the fundamental truth here is that the public sector must balance against the private sector. (This is where economist Art Laffer proved brilliant with his “Laffer Curve”.) If the government is unable to fund vital services all the wealth of the private sector is risked as plunder to those who might wish us harm. Such enemies can be internal. For instance it is estimated that because so little is spent to police Medicare that $70B-$120B a year is lost to fraud. However if too much is extracted from the private sector it affects the supply of money to loan to businesses and individuals and tax burdens could be so oppressive as to stifle growth.

Now without getting political let’s just consider a simple illustration. Let’s say the private sector economy grows at 2% per year and the government grows at say 9%, which is where some programs have been set. If we were to start in 2008 with a $13T private sector and a $3T public sector and put it on a spreadsheet we would add 9% every year to the public sector. To the private we add 2% and then we subtract out the difference in the current public year from the last. In 2015 the private sector is $12.3T and the public is $5.5T. In 2030 private drops to an alarming $378B and public skyrockets to $19.9T. In 2031 the private sector goes negative. Let me be clear, this illustration is a gross oversimplification and there is no possible way for these numbers to follow linear progressions. They are merely an illustration of a principle.

On to reality. If you look at spending under George Bush you will see huge increases. Before you argue they were defense related and expected consider that non defense spending moved at an alarming rate. Okay, now consider that George Bush is not in office so there isn’t much we can do about it. But his last year deficit was $455B and we’re projecting $1.6T this year. Actual spending for the federal government is closer to 33% than it is to 9%. We also shrank our economy by about $1T in the last year. While we list unemployment currently at 9.7% total underemployment (including those who gave up, ran out of benefits or took part time work) is probably approaching 17%. One in six Americans. That has lead to a 17% decrease in tax revenue. In fact our economy has been shrinking, not growing at 2%. On top of that social programs like social security are headed for insolvency in a matter of years. A more sunny and detailed explanation can be found on Wikipedia. Keep in mind many elements of projections rapidly devolve into the unknown in a matter of a few years.

I thought that the arguments on public sector spending creating wealth were so totally disproved they would not be tried again. What does the government plan to do? Many are saying there is no choice but to raise taxes. Meanwhile it is estimated that only 1% of the so called stimulus has gone to “shovel ready” jobs. What has it done? It has helped shore up state governments that are also short of tax money. In short it is making government bigger and more expensive for the most part. With the top 1% income earners paying 95% of all taxes in this country every new spending idea is met with the suggestion they need to pay more of their fair share. Unfortunately the vast majority of these so called rich are small business owners employing most of the population… which explains why there are no new jobs and won’t be for years. Do you think truly wealthy people even pay income taxes? No, they have trust funds and private jets, which you can’t afford on a mere $250K a year.

What the government needs to do is cut their spending to reflect current tax revenues. It’s called living within your means. It’s what people like us have to do. It’s all the more important when you consider that the US is hardly the only fiscally irresponsible government in the world. There just isn’t anyone with a few trillion dollars extra laying around every year and I haven’t even gotten into what happens when governments print that kind of money. Let’s just say Warren Buffet was late to the party warning we could become a banana republic. I believe it’s because the truly rich can make lots of money in economic crisis… but it’s hard to spend if your country goes under. Thanks Warren for warning us we may go too far and wreck it for you!

Don’t trust the pundits! Do your own due diligence. Most importantly we should demand our government use the same fiscal responsibility that each and every American has to. It’s only reasonable in a government of the people, for the people and by the people.

I can’t remember what I was searching on Google late the other night but somehow something came up about making money online. Interestingly the link looked like a posting from a California news site and linked to another domain where for the paltry sum of less than $2 you could get a certified kit to make money on Google placing links or something. It was right at the top in a paid ad and it was compelling. Our of curiosity I tried to look at the main page of the news site to validate it. It was the exact same page! Why scam for such a paltry sum?

It didn’t really come together until I read about problems on Facebook where some people were seeing as much as 90% of their click through ad traffic as obvious fraud. Huh? I read the piece on Mashable and it didn’t really make sense. Basically it said that there was too much motivation for people to commit fraud for leverage or pricing. Honestly the whole thing was so convoluted. The point is that to effectively eat someones ad revenue you need to have real people visiting the key words you are trying to spike from different IP addresses. You can’t just have a bot do it. Thus it is not only worth paying someone hundreds of dollars a week to click through links, it seems that the consensus is you are nuts if you don’t do it to level your playing field.

Don’t ask me to explain. Just remember the old addage. If it sounds too good to be true it probably is, only this time instead of you getting hurt you could unknowingly hurting small business people. How exactly did the moral fabric of our society become so amoral?