Saturday, March 21, 2009

Letter to Congressman Maurice Hinchey: Stimulus Plan

Dear Congressman Hinchey:

I have thought of a sure fire economic stimulus plan. The US Congress should shut itself down for 15 years. At the end of the 15 years, America will be in better economic, spiritual and moral health than ever before in its history.

Before you decide to take my advice, though, please do me a solid and abolish the Federal Reserve Bank. And send its chairman to jail, where he belongs.

Best Wishes,

Mitchell Langbert, Ph.D.

Cc: Senator Chuck Schumer, Senator Kirstin Gillibrand

Friday, March 20, 2009

Massive Tax Cuts Will Cure The Economy

The best stimulus is allowing people to keep and spend their own money. During the depression of the 1930s, the Democrats raised taxes. This, along with the range of blithering boondoggles known as the "Faint Squeal" (er, I mean the "New Deal") led to what should have been a 1-5 year depression turning into an eleven year depression. The 1920 depression was one year. In the 1890s there were two briefer depressions, and there was one in 1907.

The difference between the 1930s and the earlier depressions was (1) the election of Herbert Hoover and Franklin D. Roosevelt, big government progressives who both used activist government approaches. As well, part of the strategy of the Faint Squeal was to raise income taxes. In 1936 the Fed tightened, exacerbating the slowdown caused by income taxes.

Cutting taxes to the bone would cause an increase in consumer demand. But it would be demand for what people want to spend money on, not for what they want to finance. It is the tax and spend policies of Democrats, Republicans and Keynesian economists that have caused the intermittent economic fluctuations since the Fed was founded in 1913.

Cut taxes, stimulate the economy. Socialism = economic stagnation.

The Late Great United States


Thanks, Mitch. Sad that mismanagement and corruption have become the norm as population grew. I think that people are outraged as hell and a leader(s) will appear in the mold of a Lincoln with the vision to take back America in its crisis from the charlatans.


I don't think this is possible without a significant restructuring of American federalism. The incentive structures are too entrenched and "a leader" would have to lead 300 million people. Not possible in a diverse republic.


I guess I'm somewhat more optimistic. I see the tragedy of Obama as a positive thing. If the people get mad enough to get motivated and mobilized they can reign in big gov't and successfully decentralize power. I see that happening now with all the tea parties, Rick Santelli, Glenn Beck's movement etc. The arrogance of govt authroty is now reaching the boiling point and people are waking up to the fundamentals of independence and personal liberty that America was founded on. Glenn Beck's 9-12 movement gives people a glimpse of what the real America looks like. On 9/12 maybe if just for a few days, people of all politcal stripes were united under our flag, until the gov't, media, academics and other traitors blew it. That's why I think high moral leadership is critical. With high tech comunications, transportation, the internet, etc. why can't 300 million people be democratically governed? If 3 million were goverend in 1776, and Lincoln led a nation 0f 31 million to unite, can a Lincolnesque figure emerge today? Anyway, just some of my thoughts, hopefully not sounding too niave. I'm interested in what you have written about restructuring American federalism. Interested as always in your thoughts.


Conservatives are mad and that's not surprising. But they were mad in 1980 and government has grown much larger since. Reagan did little to reduce government. Subsequently, Bush did much to increase it. Conservatives should have gotten mad in 2000-2008. But they did not. It could have had some effect. I do not believe that a conservative government would change the current pattern now. The voters are too stupid. Obama's supporters do not care that he is continuing the war in Iraq even though they elected him to end it. The Republicans didn't care that Reagan and Bush did not reduce government or end inflation even though they elected them to do those things. I don't see any change from this pattern. It is futile because the interests are too powerful, the voters stupid and indifferent and the politicians corrupt. There will need to be some pain, and even then it is unlikely that Americans are smart enough to elect a competent conservative. The nation has reached a dead end and has nowhere to go. There is no longer a United States of America. It is not because of Obama. It is because Obama and Bush are so much the same, and there is little likelihood of anyone different being elected. They are marionettes of Wall Street and the banks. That is all Americans are capable of. They watch "Marry a Millionaire", "Oprah" and "Bill Maher" while they drool.


Thanks Mitch. Let's see what happens. Maybe in the log run I'll get a gun license and join you and Freida upstate!

Thursday, March 19, 2009

Nancy Razik Foresees Riots--Recommends Stocking Food

I just received the following e-mail from Nancy Razik. I live in a rural area in upstate New York which is unlikely to see riots (except by a few horses in West Shokan). But apocalyptic fears do not surprise me. The United States has foresaken its links with the moral and intellectual vision that the founding fathers established. The quack Keynesian theories that reflect banking interests and the opportunism of state-based looting have become the dominant value bases on which Congress and the President govern. Limited government has been replaced by government by subsidy to bank. The banks that dominate the economy are incompetently and unethically run. Yet, America continues to benefit from massive global subsidies via the dollar's being viewed as a universal currency. Despite this advantage, which emanated from the US's being the last nation to drop the gold standard in the early 20th century, the Federal Reserve bank has potentially quadrupled the number of dollars in circulation during the past six months (that's not an exaggeration). Those who hold dollars, CDs and bonds will be harmed, and there is no reason to think that the world's dollar holders will simply accept abuse of this kind. A 75% or more fall in the dollar accompanied by Barack Obama's massive redistribution of wealth to Wall Street and banking interests could result in a rapid inflation, cutting Americans' living standards. This will affect those who hold dollars or who depend on wages the most because wages tend to lag inflation. Contracts cannot be renegotiated quickly enough in a highly inflationary period. Employment relations will become undesirable as employees find that they can profit more from selling apples or pencils on the street than from working for a fixed salary. This occurred in Germany during the 1930s.

For the past year I have heard repeated claims of "deflation". Yesterday I received a renewal from my long term care insurance. The insurance is updated each year for CPI increases. Despite montone media claims of deflation, the Metropolitan Life Insurance Company states that inflation over the past year has escalated to over 5 percent. In other words, the media coverage of this subject has been either (a) incompetent or (b) deceitful. Likely both. The media announcers on Fox (I won't mention CNN or Bloomberg, which are jokes) lack the ability to question the quack claims of university macro-economists. Despite the high inflation rate, network television and the major news outlets continue to claim that prices are going down. Anyone who relies on major news sources is a fool.

Nancy Razik and Lisa Karres wrote the following:

>I am bitterly disappointed that BO got into the White House, even though we had prophecies he would not... but I'm thinking back to one prophecy in particular that stated Bush would be the last president of the USA...

We know that BO is not the president ot the USA... he is a poser... he is, in fact, a usurper...based on his ineligibility... something to consider...

About Wilkerson's idea... he may be wrong also... but, getting a 30-day supply of food can never be a bad investment... because we will end up using the toilet paper, cans of ravioli and peaches, etc., either way, crisis or not... we have nothing to lose by being prepared...

I remember when our island was preparing for hurricane Iniki a few years back... I asked my then husband to please go to the store to stock up on essentials the night before the storm... he refused and blew me off saying the storm would bypass us like so many other storms had... I asked if he could guarantee 100% that we would not be hit... he could not guarantee that...

I said, tonight you can spend 20 minutes buying our essentials which we will use even if the hurricane does not hit us... or you can attempt to shop tomorrow after the storm... with hundreds of others waiting in line for gas and groceries... please do the right thing... I had to beg him and he finally did as I asked...

For those of you who already have your 30-Day food supply ~ Good Job!!!

--- On Thu, 3/12/09, Lisa Karres wrote:

From: Lisa Karres
Subject: RE: Store a 30-day supply of non-perishable food, toiletries and other essentials. In major cities, grocery stores are emptied in an hour.
To: nancyrazik@
Date: Thursday, March 12, 2009, 3:54 PM

Please do not misunderstand what I am about to say. I really have NOT lost my faith. But I think the Lord put it in perspective for me.

During the campaign, before the election, I was hearing from MANY sources (friends, bloggers, strangers, etc.) that the Lord was speaking to them in dreams. In visions. In near death experiences, etc. All with the same message, “Obama was not going to be elected.”

Then it was, “The Electoral College will not vote for him.”

Then it was, “Obama will not be inaugurated.”

Well, I don’t have to tell you, those messages did not happen and here we are in mid March – stuck with an illegal alien who is a Marxist, Socialist, Communist, etc.

I am not going to say that the Lord did not speak to Pastor Wilkerson, that would be too presumptuous of me.

I am just going to start looking towards the Cross and keep in His Holy Word, and keep praying.

I have been EXTREMELY discouraged and disappointed in man’s word.

In those dreams that didn’t come true.

In those visions that didn’t come true.

Thankfully, praise God, I have a very strong faith and I did not lash out to the Lord as breaking His promises.

A weak new Christian would have done that.

I saw this article. Maybe he is trying to reach the unsaved. I don’t know.

I have stock piled enough food for maybe 1 month for my family of 5. Less if my daughter’s family shows up on my door step.

Money and the room to store has prohibited me from purchasing more.

Now here is a question for you . . . is the food that I purchased for us Christians during the Tribulation OR

For the people that will break into my house to live and survive after I am gone with the Rapture?

I was joking with my friend, if it was for other people, then I would have purchased Mexican food.

Keep Well - LISA

From: Nancy Razik [mailto:nancyrazik@]
Sent: Thursday, March 12, 2009 4:48 PM
To: nancyrazik@
Subject: Store a 30-day supply of non-perishable food, toiletries and other essentials. In major cities, grocery stores are emptied in an hour.

Should We Heed Wilkerson's Warning?


When I was a kid, I read about David Wilkerson who took to Gospel to the gangs of New York. I even saw the movie "The Cross and the Switchblade" that was made about him. Many know about that, but most don't know what happened in his church just eight years ago.

In the fall of 2001, Pastor David Wilkerson, of Times Square Church in New York City, was warned by God that a calamity was coming. For six weeks they felt an intense burden and enormous heaviness. A critical need for intercession was so profound that Pastor Wilkerson canceled everything on the church calendar – mission's conferences, youth events and every guest speaker.

For six weeks, there wasn't a sermon. Instead, there was intercession for our nation with weeping and repentance. They knew something was coming and that something was bad. And that something was soon. So they prayed. And prayed … and prayed.

Then Wilkerson felt God telling him something that seemed rather bizarre. He felt God telling him to make sandwiches – lots of sandwiches. What were they for? Who would eat them? That part wasn't clear, but his church did what they believed God was telling them anyway.

And on the 10th of September they stayed up all night making hundreds and hundreds of peanut butter and jelly sandwiches. By morning they had about 2,000 sandwiches. At 8:46 a.m. the first plane hit the World Trade Center and Times Square Church was ready to feed and minister to rescue workers and victims of our nation's worst attack.

Making sandwiches all night is a strange thing to do. If someone told me to stay up all night making sandwiches, I'd probably tell them they were crazy. But if David Wilkerson says he's heard something from God today, I think we'd be crazy not to listen.

He now says he feels the same thing he felt leading up to the attack by radical Islam. In an "URGENT MESSAGE" dated March 7, 2009, Wilkerson said:


For 10 years I have been warning about a thousand fires coming to New York City. It will engulf the whole megaplex, including areas of New Jersey and Connecticut. Major cities all across America will experience riots and blazing fires – such as we saw in Watts, Los Angeles, years ago.

There will be riots and fires in cities worldwide. There will be looting – including Times Square, New York City. What we are experiencing now is not a recession, not even a depression. We are under God's wrath. In Psalm 11 it is written:

… God is judging the raging sins of America and the nations. He is destroying the secular foundations.

The prophet Jeremiah pleaded with wicked Israel, "God is fashioning a calamity against you and devising a plan against you. Oh, turn back each of you from your evil way, and reform your ways and deeds. But they will say, It's hopeless! For we are going to follow our own plans, and each of us will act according to the stubbornness of his evil heart" (Jeremiah 18:11-12).

In Psalm 11:6, David warns, "Upon the wicked he will rain snares (coals of fire) … fire … burning wind … will be the portion of their cup." Why? David answered, "Because the Lord is righteous" (v. 7). This is a righteous judgment – just as in the judgments of Sodom and in Noah's generation.


First, I give you a practical word I received for my own direction. If possible lay in store a 30-day supply of non-perishable food, toiletries and other essentials. In major cities, grocery stores are emptied in an hour at the sign of an impending disaster.

… I will behold our Lord on his throne, with his eye of tender, loving kindness watching over every step I take – trusting that he will deliver his people even through floods, fires, calamities, tests, trials of all kinds.

Note: I do not know when these things will come to pass, but I know it is not far off. I have unburdened my soul to you. Do with the message as you choose.

Warren Buffett has said that our economy has "fallen off a cliff." With the election of the most pro-abortion president (and Congress) in history, there's no question that we deserve God's judgment.

Just yesterday, Barack Obama signed an executive order to use children for spare parts. So much for defending the "least of these," as he so often quoted during his campaign. Cannibalizing the weak to help the strong. And by the way, don't believe everything you hear in the news – Obama didn't say he was against cloning. He said he was against "reproductive" cloning. Killing a new life after cloning one is another matter entirely: welcome to Obama's "Brave New World."

The bottom line is that we are economically and morally bankrupt. And it's reported that Iran now has all they need to build nukes.

So, when the guy who made the 2,000 sandwiches on Sept. 10 warns us: "AN EARTH-SHATTERING CALAMITY IS ABOUT TO HAPPEN," I think we would do well to heed it. And follow the words Wilkerson quotes from the prophet Jeremiah and "turn back each of you from your evil way, and reform your ways and deeds."

Mitchell Langbert Joins NRA

As someone born and bred in New York City, the gun control capital of the world, I never went hunting and only used firearms twice in my life in shooting lessons I took in the 1960s at a summer camp near Woodstock, NY, near where I live now.

I have just joined the National Rifle Association and I urge all Americans who are concerned about individual freedom to join me in supporting this worthy organization.

Clintons to Move to Woodstock, NY?

Last August Bill and Hillary Clinton interrupted my usual workout at the exclusive Emerson Resort and Spa in Mount Pleasant, NY, about 15 miles from Woodstock and about 10 miles from my house. Actually, I took President Clinton by surprise when he opened the door to the gym. He sent a secret service agent to scope out the gym instead. On March 13, the Kingston Freeman wrote:

Speculation has been growing around Ulster County in recent weeks that former President Bill Clinton and his wife, Secretary of State Hillary Rodham Clinton, are buying a home in the community known for its arts and history. The former first couple, whose home is in Westchester County, seems to be enamored of the area — evidenced by multiple visits here — but whether they plan to become local residents is anything but certain...An employee in the Woodstock town assessor’s office said she had heard talk on the street about the Clintons buying a house here but had not seen any deed to prove it....The Woodstock town supervisor’s office also said it had no information, nor did the public relations director at the Emerson Resort & Spa in Mount Tremper, where the Clintons have stayed on two occasions, most recently in December.

Casey Seiler of the Albany Times Union adds:

The Daily Freeman has a piece today about speculation that the Clintons are close to purchasing a house in or around Woodstock. No word from spokesmen at the Clinton Global Initiative or the State Department.

Could anything be more perfect that having America’s echt Boomer power couple — who named their daughter after a Joni Mitchell song, for heaven’s sake — ending their peripatetic late-midlife careers and retiring to the town that gave their generation its pop-cultural watershed moment, or at least the name for it?

Our question for today: Would the Clintons be good, bad or indifferent for the town?

Maybe the Bilderburg Group will start having its meetings at the Emerson. That should be good for the local economy but not so good otherwise! Maybe the Catskills will be become the headquarters of the New World Order...Nah...

Florida Repubs Call Pickpocket Barack Names

Nancy Razik just forwarded this from Ben Smith's blog. Apparently, Florida Republicans have been questioning Mr. Obama's citizenship:

>"Yesterday, State Senator Rhonda Storms refused to acknowledge the fact that President Obama is the President during a hearing in the State Senate. Senator Storms repeatedly called Obama, "Senator Obama," "Candidate Obama," then she called him "The Messiah." And when the Democrats objected, the Republican Committee Chairman just got mad."

The Republicans should keep up the good work.

The Obama Deception

Nancy Razik just forwarded this video, "The Obama Deception". It's worth a viewing. Banks have taken over the American state. The presidency is a facade. I agree, I agree.

Richard Ford's Question for Pickpocket Barack

I just received this e-mail from Bob Robbins:

Dear President Obama,

Thank you for helping my neighbors with their mortgage payments. You know, the one's down the street who in the good times refinanced their house several times and bought SUV's, ATV's, RV"s, a pool, a big screen, two Wave Runners and a Harley. But, I was wondering, since I am paying my mortgage and theirs, could you arrange for me to borrow the Harley now and then?

Richard Ford
Queen Creek AZ

P.S. They also need help with their credit cards, when do you want me to start making those payments?

P.P.S. I almost forgot - they didn't file their income tax return this year. Should I go ahead and file for them, or will you be appointing them to cabinet posts?

Americans Fed Up

Phil Orenstein of Democracy Project has blogged about Glenn Beck's new protest group. Phil writes:

>"When I stood up to speak, introducing myself as a Republican and promoting certain candidates for public office as potential standard bearers for disenfranchised American patriots like us, I could sense the overall disdain for politicians and political parties. I got the idea that they have no use for the Republican, Conservative or Libertarian parties or the corresponding labels that define their alleged principles. They see their elected officials and party leaders mostly as petty, self serving, unprincipled charlatans, except perhaps for Rep. Peter King. Nothing I said regarding translating their anger into action at the polls in November, made any sense to them."

The disenfranchisement of many Americans stems from the excessive size of the Amnerican federal republic. When the nation was founded it had 3 million people and the states had an average of 231,000 people each. In 1995 and 1996 231,000 foreign immigrants came to New York City alone. 231,000 is the population of Plano, Texas. Los Angeles and Chicago alone have populations of about 3 million.

The nation has become too large to govern. The problem is aggravated by the conflicting commitments to democracy and to the welfare state. Both are incompatible with ever-increasing size. Service delivery must respond to local needs so that nationalized programs like Social Security are too inflexible. Democracy requires that voters have some input into electoral processes. But the small effect of a single vote in a nation with 50 states and an average population of six million per state means that voters have no reason to believe that their voice counts. Size stifles voice. Thus, voting rates tend to be low and voting is dominated by people with something to gain from advocacy of state wealth transfers. American government therefore discourages creativity and progress by taxing production. The federal government has become a cancer on the promise of American life to provide increasing improvement in technology and standards of living. For the past 36 years, since 1971, real hourly wages have declined as government spending has mushroomed.

The problem is compounded by practical limits on the size of Congress. In a state with 231,000 people, each Senator could represent 115,000 people. In a state with six million people, each Senator reprsents three million. Each Senator today has the same representation ratio that the president had in 1790. The first House of Representatives had 59-64 members. That is one Congressman for every 48,000 citizens. The 110th Congress had 434 members. That is one Congressman for every 691,000 citizens. The ratio has increased fourteen fold.

The Federalists based much of their thinking on Montesquieu, who argued that democracy was possible only in a small republic. Madison argued otherwise in the Federalist Number 10, that the potential magnitude of the United States would support democracy because factions or special interests would counteract each other.

The Montesquieu effect is that an individual's voice has greater effect the smaller the republic becomes. The likelihood of political action increases with decreasing size because action has efficacy. Personal reputation, public respect, and economic gain are more likely to be achieved. However, crowd emotion threatens democracy. In larger republics, such as the United States in 1790, interest groups form and counteract each other. The nation is still small enough that individuals can influence interest groups. Large size makes communication and transportation difficult. There is less responsiveness due to the larger size than in the smaller democracy. But the large size has the advantage of permitting dissidents to exit and encourages more reasoned discussion by interests. The Madison effect outweighed the Montesquieu effect in 1790 because interest groups can correspond to a legitimate range of public needs.

However, there is no reason to believe that this will be so indefinitely, that size can increase infinitely and the Madison effect will continue to outweigh the Montesquieu effect. It is quite likely that the Montesquieu effect will begin to outweigh the Madison effect when interest groups are too large to motivate individuals to participate or skewness in benefits from organization become marked.

Mancur Olson has outlined this process. When the benefits from organization outweigh the organizational costs to each individual, then organization is likely. Small groups with large benefits tend to be better at organizing. They contribute to politicians and have the most access. Politics increasingly becomes a matter of economic opportunism. Specific financial arrangements that depend on special interest organization, for example the monetary creation powers of the Federal Reserve Bank, governmental privileges of health care providers, laws protecting trial attorneys and the like delineate the contours of power. General public concerns become mired in cross conflict because reward structures are unclear. Interests such as Wall Street arrange $2.5 trillion subsidies while defense, government operations, education, and other governmental responsibilities are botched or co opted by specific interests. Thus, there is a tipping point where the Montesquieu effect outweighs the Madison effect. This began to occur a century or so ago. In 1884 the Mugwumps were still willing to organize a national outcry against supposed corruption of a presidential candidate, James G. Blaine. In 2008, corruption by congressmen occurs with impunity.

There are other factors that modify size effects, specifically the development of technology. It would seem that centralized media changed the Montesquieu effect. This may be why as America grew to large population in the 19th century the republic was able to function. Yellow journalism bound the nation together. This was reinforced by radio, then television. Centralized media made the nation smaller so that its large scale was less of an impediment. The effect of the corrupting influence from centralized economic actors, railroads and other large corporations, led to a Madisonian response: reforms proposed by the Mugwumps, the Progressives and the Roosevelt New Deal. But such reforms were ineffective. They assumed away the scale and rationality problems that confront large organizations. This was because the idea of cognitive limits on management was unknown. The Progressives, moreover, chiefly focused on state reform. By the 1930s, naivete about the management possibilities of large scale had escalated even business enterprise had arrived at decentralizing responses to limits on the ability to manage large organizations. The Roosevelt New Dealers claimed that they could surmount scale impediments to competent management that had stymied America's best managers.

The centralizing trend of the federal government continued unabated. There are numerous reasons why this trend would result in destructive, suboptimal outcomes. The interest group problem becomes exacerbated. Competent execution of programs is difficult. One program after the other has either failed to be discarded; has failed to respond to public needs; has responded instead to particular needs of special interests; and/or has been mismanaged.

Barack Obama on AIG's Payroll

H/t Larwyn. This appeared on Dan Spencer's Examiner blog:

Senator Barack Obama received a $101,332 bonus from American International Group in the form of political contributions according to The two biggest Congressional recipients of bonuses from the A.I.G. are - Senators Chris Dodd and Senator Barack Obama.

Wednesday, March 18, 2009

American versus Swedish Taxpayers

American Taxpayer:

Swedish Taxpayer:

America Has Adopted Swedish Finance Practices--And They Caused The Sub-Prime Crisis

Roland Huntford, The New Totalitarians: A Terrifying Portrait of an 'Ideal' Society That Has Destroyed Democracy. New York: Stein and Day, 1971.

Roland Hunter wrote an excellent book about Swedish society that was published in 1971. In the first two chapters Hunter portrays the Swedish economy as vibrant. He insightfully describes the history of the Swedish people. The Swedes never evolved out of medieval tribalism. Like the Russians, their propensity for collectivism is linked to peasant communism and strip farming, which was not abolished until 1827. The medieval peasant culture continued unabated until the 1950s (not a typo) through the bruk, "an industrial settlement lying away from the towns, out in the countryside...In the isolation of these small colonies, there grew up a powerful sense of was the cradle of the Swedish welfare state. The bruk, unlike the village, belonged to one man. He owned their houses, and tenancy was tied to the job. Until late in the nineteenth century a bruk worker could not change employers without permission...If the bruk worker was not free, he was at least looked after by his master...Within the bruks, ancient Swedish attitudes were preserved without interruption..."

The limits on monarchical power that feudalism set in England and France were missing from Sweden as they were from Russia. The Swedes were not Christianized until the twelfth century. They were never occupied by the Romans. Barbarian culture continued in rural areas until the nineteenth century, and its current culture is heavily influenced by the barbaric tradition. Sweden's remoteness served to preserve its medieval mindset. Moreover, Sweden has a long history of rule by bureaucrats. "Since the early Middle Ages, many of the Swedish nobility had been dutiful royal functionaries...The identification of aristocracy and civil service has conferred on the Swedish bureaucrat a unique supremacy." The archetypal bureaucrats were King Gustav Vasa who centralized authority by introducing the idea of the despotic prince, which he adapted from renaissance Italy; King Gustavus Adolphus who organized the Swedish military; and Oxenstierna, the Chancellor under Gustavus Adolphus who organized the centralized bureaucracy. The church also traditionally played a bureaucratic role. Although Sweden became Protestant, it was not Calvinist. The church was tightly controlled by the monarch, and it was authoritarian and intolerant. "The country has always been divided into a mass of peasantry and a thin crust of merchants and bureaucrats at the top, subservient to the monarchy." In this way it parallels Russia.

Sweden nearly conquered Europe when Gustavus crossed the Baltic in 1621, invaded Poland and Germany, and reached Munich. But he fell in the Battle of Lutzen and Swedish military ambitions came to an end at Poltava, when the Swedes capitulated to the Russians without firing a shot (p. 30). Since then, and a similar defeat in Perevelotchna, the Swedes remained neutral, pleading for neutrality in the Congress of Vienna in 1815 and siding with Germany in what they called active neutrality in World War I. Although putatively neutral, Sweden assisted Hitler in World War II by permitting German access to Sweden for movement of troops and supplies until in 1943 it was obvious that the Germans would lose. Then they switched sides.

Swedes define themselves as members of gilds or groups, and Hunter argues that this is one of the many remnants of medieval culture in their society. The Renaissance asserted individuality while the Swedes, like the Russians, abjure individuality because the Renaissance never took hold in Sweden.

Only four or five "aristocratic" families dominate Swedish economic life (p. 81), for instance the Brostroms of Gothenburg and the Johnsons of Stockholm. The most important is the Wallenbergs. Swedish capitalists "have always identified themselves with the State, even after the accession of the Social Democrats...This interplay of bureaucratic control, acquiescence and private identification with the State smooths official control" (p. 81). This would seem to parallel the ambitions of "left wing" American capitalists such as the Ochs Sulzbergers, George Soros and Warren Buffett. There is probably somewhat greater opportunism here, but the aim of establishing themselves as an entrenched elitist aristocracy through punitive taxation of non-trusted estates and high income tax rates of "commoners" who might legitimately pose competition to their inefficient businesses likely motivates them.

Sweden's ideology was influenced both by Marx and Hitler. In particular, Gunnar Myrdal, the socialist economist who shared the Nobel Prize with Friedrich Hayek in 1974, was closely linked to Nazi academics:

"The professor was then a Nazi sympathizer, publicly describing Nazism as the movement of youth and the movement of the future. In Myrdal's defence, it must be pointed out that, whatever his other propensities, Hitler did have advanced ideas on social welfare, and that the social ideology of the German Nazis and the Swedish Social Democrats had much in common" (p. 63).

In contrast, the free market "capitalist" economist Friedrich von Hayek had to flee the Nazis for his life, moving to England and then America. The claim that capitalism is associated with Nazism is inverted. It was the socialist economist Gunnar Myrdal who was closely linked to the Nazis. The capitalist Hayek had to flee Nazism.

Hunter emphasizes that the Swedish economy is successful. He notes that

"Credit is rigorously controlled by the central authorities. Taxation is so designed that companies find it increasingly difficult to finance themselves, and investment and expansion depend on State loans. Since these, in their turn, depend on whatever conditions (and they need not necessarily be economic) the government decides to impose, there is considerable scope for direction."

The Swedish Central Bank "exercises a unique and absolute control over financial affairs" (p. 81) but this is not just due to its "extensive powers, which, in effect, make private banks its branches. It is also a consequence of the quasi-civil servant attitude of bankers."

In other words, the high tax rates that the United States has adopted since the 1960s coupled with Federal Reserve monetary flexibility fully adopted in 1971 directly but incompletely parallels the Swedish model. The Swedes tax at about 70% while the US taxes better than 50%. The Swedish central bank has greater control over private banks (picture the result of this policy on sub-prime lending and other political boondoggles. While Sweden is a small, homogeneous country, the US is a large and diverse one. The operation of special interest groups and lobbying is much greater in the US. While the Swedish finance system has resulted in a dull but operationally efficient economy, the power of special interests in the US, specifically private banks (but also a whole host of lobbies--sub-prime borrowers, Latin American governments and the like) has resulted in a corrupt, inefficient system. The relatively good results in Sweden also reflect the administrative capabilities of the Swedes and, as well, the very limited amount of democracy in Sweden. In contrast, special interest brokerage that has long been noticed in the US results from the Swedish approach to central banking, taxation and credit allocation when applied in the US. In Sweden there are high tax rates but the Swedes use inflation to allocate credit to firms to sustain jobs. In the US the credit is squandered in Wall Street investment schemes like the tech bubble. Institution of greater government intervention in the American setting would increase the extent of special interest brokerage and yield even more corrupt results.

Sweden can hardly be called a democracy. The chief decisions are made by appointed directorates who are most responsive to the Social Democratic Party. Cabinet ministers do not need to be approved by the diet, and they do not have any operational control over the directorates. Thus, "experts" run Sweden in a way that is (a) not democratic because it is not elected by nor responsive to the public and (b) socialist because most important economic decisions are made by the state. The claim that Sweden offers a third way is nonsensical. More than 70% of income is government owned. This does not include extensive state owned industries. Likely, Sweden is more socialist than either Cuba or China and almost as politically and personally suppressive as either.

Swedes do not care about politics (p. 77) but rather about efficient administration. Therefore, the diet has almost no power and almost all power is executed by the bureaucracy.

The Swedes go beyond punitive taxation levels (similar to the federal, state, local and social security taxes that punish many middle class Americans) and credit allocation in other ways. An additional feature of Swedish socialism that is missing from the American Federal Reserve-based one is that the Swedish government has representatives on the boards of banks and major corporations. One can imagine the quality and competence of Pickpocket Barack's or Bailout Bush's appointees to such jobs. Much as central planning-style Congressional pressure initiated and caused the sub-prime crisis, so would increased federal scrutiny over corporations politicize corporate decision making, as it has in Sweden but to an exponentially greater degree in the US. The absence of democracy in Sweden means that government functions more like a business.

Punitive taxes and fast monetary growth in the United States make capital formation largely a function of Federal Reserve Bank policy as it does in Sweden. But instead of allocating credit to functioning corporations, the Federal Reserve Bank has over many decades recklessly allocated credit to various bubbles--the Mexican debt crisis, Long Term Capital Management, the stock market bubble of the 1920s, the technology bubble of the 1990s, and on and on. It has done this by electing to allocate most reserves to money center banks that are closely linked to Wall Street. This is a policy choice of the Federal Reserve Bank. The Fed could allocate credit to all Americans or to state governments. It chooses to allocate it to special financial interests instead. This results from the functioning of special interest groups in the US that do not operate in a small nation like Sweden. Even so, Hunter points out that in Sweden economic decisions are frequently made for political rather than efficiency reasons, resulting in an economy that is less productive than it could be. If the United States and England had not existed, I would venture to guess that Sweden primarily would be engaged in strip agriculture to this day.

Left-wing advocates of the Swedish model might be surprised to learn that the current United States financial system pretty well mirrors Sweden's already. Credit allocation is governmentally determined and, although taxes are not as punitive as in Sweden, they are punitive in the US to a smaller degree. The difference in taxation in the two countries is the difference between the American stock and the Swedish burning at the stake. The socialist Federal Reserve Bank approach has repeatedly failed, caused economic dislocation, inflation and drastic misallocation of wealth since 1913 because of the same kind of corruption which President Jackson attributed to the Second Bank of the United States in the 1830s.

The point of Hunter's book is not to discuss the Swedish economy but rather to show how a nation with medieval, communistic values and centralized planning has repeatedly violated civil liberties and become a totalitarian state. I am only up to page 70 at this point.

Tuesday, March 17, 2009

Sweden Is A Backward, Authoritarian Land

Someone brought up Sweden recently. The socialist American media is biased in its reporting on Sweden so it is difficult to find factual information. You won't find it in the New York Times, written on the sixth grade level of the American left. A number of years ago Roland Hunter's book entitled The New Totalitarians described the suppressive nature of the Swedish government. In 2006 the sadly now-defunct New York Sun, commenting on the lies and propaganda that appeared in the Economist Intelligence Unit about Sweden, noted:

"Dissent is powerfully discouraged. In Sweden, whose murder rate is currently twice that of America...the Swedish press routinely depicts America as crime-ridden. Polls show that the majority of Swedes are deeply disturbed by their country's dramatic social changes and highly critical of the policies that brought them about. Yet the crime and violence generally go unreported, so only rarely does any of the criticism seep into the press."

In other words, Sweden is a country run like New York City, where lies are taken for truth and school children are indoctrinated in left wing propaganda (as in the New York City school system) and, I add, new ideas are forbidden.

Moreover, Sweden is not immune from the nationalist hatred and bigotry that frequently characterizes socialism:

"Instead of reporting on such worrisome findings, politicians and the press alike focus on the evils of America and Israel."

Similarly, the book publishing industry in Sweden serves as a mouthpiece for the authoritarian state:

"Swedish book publishing is similarly unbalanced. Recently Michael Moynihan, an American writer based in Stockholm, toted up the English-language political books that had been translated into Swedish since September 11. His long list included several works apiece by Noam Chomsky and Michael Moore, plus volumes by the communist historian Eric Hobsbawm, the anti-American journalist John Pilger, and the 'Holocaust industry' critic Norman Finkelstein. On the entire list, only one author was not a leftist."

There is only one independent television station, and the Swedish government has attacked it for failing to adopt the government's views:

"When voices of dissent do break through in Sweden, they're often punished. During the runup to the Iraq war, the Swedish government censured the independent TV channel TV4 for running an "Oprah" episode that presented both pro- and anti-war arguments. TV4 was charged with violating press-balance guidelines when in fact its offense was being too balanced — it had exposed Swedish viewers to ideas from which journalists had otherwise shielded them."

The opposition party, Sweden Democrats, are repeatedly attacked by the Swedish government and their speech suppressed:

"Earlier this year, for example, the government closed down the Sweden Democrats' Web site because it had published a cartoon of Muhammad. Stig Fredriksson, head of the free-speech organization Publicistklubben, complained bitterly. But the incident was hardly reported in Sweden — and, of course, barely caused a ripple abroad. If the Bush administration had closed down a Democratic Party Web site¸ there would be scare headlines and editorials thundering about dictatorship — and rightly so. But when Sweden's rulers did it, it was apparently acceptable — because they did it in the name of political correctness."

Opponents to the Swedish government's policies are routinely fired from their jobs:

"a few weeks ago, a junior diplomat was dismissed when it became known that he was a member of the party and had criticized his country's immigration policy. On several occasions, thugs loyal to the ruling parties have broken up Sweden Democratic meetings and beaten up party leaders. And this is a nation in which a party led by an admitted communist was, in recent memory, part of the ruling coalition."


"Swedish elections aren't really secret — other people at the polling place can look at your ballot and see which party you support."

I have not looked at Swedish banking practices but if the banking system is state controlled, I wonder how open to new and innovative ideas it might be. Sweden has never been an innovative country. Its industries are imitative. It is able to survive on small beer because it has a small population. Should the world adopt a Swedish model, suppression and stagnation would follow.

Monday, March 16, 2009

Socialism in Action

Socialism is such an inspiration. The AP's Eliane Engeler's description of North Korea on Yahoo! reminds me of the New York City subway system under Mayor Ed Koch.

>GENEVA – A U.N. human rights investigator accused North Korean authorities Monday of committing widespread torture in prisons that he called "death traps."

Life in the reclusive communist-ruled country is "dire and desperate," said Vitit Muntarbhorn, adding that people are denied enough food to survive.

Muntarbhorn told the 47-nation Human Rights Council that whole families are routinely sent away for the crimes of one member. Once imprisoned, they suffer greatly.

The Concept of Fiduciary Duty in Business Administration

Business schools have been in existence for more than a century, but they have failed to articulate a meaningful explication of the concept of fiduciary duty as it applies to managers. This omission is striking because the primary duty of management is to serve shareholders. The subject of economics, specifically information economics, has developed an attenuated image of fiduciary duty as alignment of two utility functions--that of manager or agent and that of principal or stockholder. However, the practical ramifications of such alignment are not explicit and remain a sphinx-like riddle.

Do managers owe a duty of disclosure to shareholders, and if so, what competencies are required to exercise such disclosure?

Do managers owe a duty to act in good faith toward shareholders? If so, what is the ethical make up required of managers?

Must managers be capable of explaining bad news in a balanced way? If so, what competencies are required?

Are managers expected to act on behalf of shareholders? If so, to what degree does an understanding of economics, incentives and accounting serve as a pre-requisite to competent managerial action?

How far are boards expected to go in assessing personnel standards and systems?

These questions are not asked in management courses. Nor are they answered. They are not asked in business schools at all, nor are they answered.

It is not surprising that American business has become a spectacle of bad ethics, incompetence, mismanagement and waste. Corporate boards have not been required to develop standards of competence. Little is expected of boards. Managers are compensated on the basis of stock market trends that do not reflect managerial skill.

Howard S. Katz's Poem for March 8

Howard S. Katz has preceded his current newsletter with this poem:

A sadder man you’ll never see
Than Don Quixote Bernanke.
The only thing that he does know
Is how to print a lot of dough.

He’s striding all about the town
Not knowing whether up is down.
He fights “Depression” it is said.
“Depression” is all in his head.

Dear Bernanke, may I be bold?
Suggest you view the price of gold.
The thing to know, before you sup,
The price of gold is going up.

And that’s a signal, if you’re wise,
That all the prices – gonna rise.
And then the country will be poor,
No goods to buy at local store.

You’re bailing out the ultra-rich
And leaving country in the ditch.
I’ve said to you, you are a cad.
Cause printing money’s very bad.

No, this is point you do not know.
One can’t get rich by printing dough.
So turn your policy around
And give us money that is sound.