Saturday, June 18, 2011

United States of America, RIP

I just received this e-mail. Professor Tyler was prescient, but he omits one point. In American democracy the ideology of freedom and the ideology of hard money had to be replaced before the ideology of Progressivism or socialism could replace them. This was done by ideologues posing as experts in fields like economics and sociology.  Also, American socialism does not even benefit the voting mob. It benefits a thin layer of super-rich, who have used Progressive and socialist ideologies to explain their money grab. The e-mail reads:
In 1887 Alexander Tyler, a Scottish history professor at the University of Edinborough, had this to say about the fall of the Athenian Republic some 2,000 years prior:

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy, (which is) always followed by a dictatorship."

"The average age of the world's greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, these nations always progressed through the following sequence:

From bondage to spiritual faith;
From spiritual faith to great courage;
From courage to liberty;
From liberty to abundance;
From abundance to complacency;
From complacency to apathy;
From apathy to dependence;
From dependence back into bondage."
The Obituary follows:

Born 1776, Died 2012 
It doesn't hurt to read this several times.
Professor Joseph Olson of Hamline University School of Law in  St. Paul , Minnesota , points out some interesting facts concerning the last Presidential election:

Number of States won by:          Obama: 19          McCain: 29
Square miles of land won by:      Obama: 580,000    McCain: 2,427,000
Population of counties won by:    Obama: 127 million  McCain: 143 million
Murder rate per 100,000 residents in counties won by:  Obama: 13.2  McCain: 2.1 

Professor Olson adds: "In aggregate, the map of the territory McCain won was mostly the land owned by the taxpaying citizens of the country.

Obama territory mostly encompassed those citizens living in low income tenements and living off various forms of government welfare..."

Olson believes the  United States  is now somewhere between the "complacency and apathy" phase of Professor Tyler's definition of democracy, with some forty percent of the nation's population already having reached the "governmental dependency" phase.

If Congress grants amnesty and citizenship to twenty million criminal invaders called illegal's - and they vote - then we can say goodbye to the USA  in fewer than five years.

If you are in favor of this, then by all means, delete this message.

If you are not, then pass this along to help everyone realize just how much is at stake, knowing that apathy is the greatest danger to our freedom.

This is truly scary! Of course we are not a democracy, we are a Constitutional Republic. Someone should point this out to Obama. Of course we know he and too many others pay little attention to The Constitution. There couldn't be more at stake than on November 2012.

If you are as concerned as I am, please pass this along.

Thursday, June 16, 2011

University Economics Reminiscent of Rowan and Martin's Laugh-In

Those who were old enough to watch prime-time television in 1973 remember Rowan and Martin's Laugh-In.  In the upper clip Goldie Hawn mimics an American economist in explaining time zone differences. The second is a compilation of R&M routines. Rowan was the straight man, Martin the comedian.

American economists are like Rowan and Martin.  Monetarists are like Rowan, Keynesians like Martin.  Neither are scientists.  Scientists are open to falsification of their theories.  If evidence disproves a theory, scientists reformulate the theory. Keynesians and monetarists have both seen their theories fail, and both stick to their theories but look for excuses, many of which are as funny as Rowan and Martin routines.  They are ideologues, not scientists. Ideologues can be funny.

First, Martin opens the act. Keynesians claim that lack of demand causes depressions so we needed to print lots of money and borrow and give the money to George Soros and other Democratic Party special interests. But demand in 2008 was at record levels. No one was saving.  In fact, there had been a lack-of-savings crisis because of excessive credit.  But Keynesian theory says that depressions are caused by insufficient demand, too much saving.  Like a carpenter who only has a hammer and sees everything as a nail, Keynesians then concluded that there needed to be more credit and more debt.  Laugh one. Spending is at record levels, and the banking crisis was caused by insufficient demand. Ha, ha.

The problem of 2000-08 was an incompetently managed financial system, and an incompetently run Federal Reserve Bank. The Fed lent huge amounts of its counterfeit money to people unable to invest it intelligently: banks, Wall Street, hedge funds and big business. The result was the sub-prime and derivatives crises, the products of excessive demand brought about by an immoral and incompetently run financial system.  The derivatives investment did not involve too little demand. It involved excessive demand and fraud. By "fraud" I refer to the Federal Reserve Bank's counterfeiting power by which it creates new money and transfers wealth to its privileged and generally incompetent clients.  Commercial banking and Wall Street lack the ability to find investments that cause real wealth to grow. They are risk averse and focus on what they perceive as sure bets: real estate and big business lending. Even with the risk aversion, Wall Street's stupidity and greed means that it cannot function without ongoing public subsidy.  The financial system is value destroying. It is a failure.

Enter Rown, the monetarist straight man.  In 2005, right before his death, Milton Friedman boasted in the pages of  The Wall Street Journal of how great a success the 2002-4 monetary expansion under Alan Greenspan and the Bush administration had been.  It was, he said, proof of the success of his ideas.  It would have been interesting to hear him explain the credit disaster of 2008, which also was entirely due to Friedman's ideas, to Greenspan and to Bush.

Next, Martin, the Keynesian comedian, comes up with an idea. Actually it's the same idea because Keynesians only have one idea.  Since excessive credit, bad investment and incompetent management of financial institutions caused an economic crisis, we can still blame the economic problems of 2008 on insufficient demand.  (Audience laughs.)  Even though the $900 billion given to Soros, organized crime-run construction firms and ACORN  did not stimulate the economy, we need to give even more, trillions, to Democratic Party cronies. After all, the fact that the stimulus did not work is proof that it works. 

Rowan, the straight man-monetarist, cocks back his head.  "Give more money to Soros-like crooks?" You're out of your mind," Rowan says. "No, no, that's big government. I'm for small government. Print more money and give it Lloyd Blankenfein, not Soros. Keynesians are irrational and in favor of big government. Soros is big government. Blankenfein is small government." (Audience laughs, then applauds.)

The definition of science is the willingness to falsify hypotheses. Keynesian ideas have never worked. But Keynesians have creatively cooked up stories to explain the failure of their ideas, such as the claim that the spending of World War II ended the Great Depression. In fact, there had been rationing, suppression of wages, many potential workers killed, four years of military pay to 14 million Americans and massive misallocation of wealth during the war.  As well, Europe's and Japan's industrial bases had been destroyed, and the US was a source of supply. Sweden, which also did not suffer damage from the war, saw its economy perform well afterward. That employment grew in the 1940s and '50s after years of frustrated demand, artificially induced economic collapse, and the elimination of most of our international competitors is not proof that borrowing and spending improves the economy. It is simply proof that low wages stimulate demand for workers and that competition is eliminated when competitors bomb each other.

So, dear friend, enjoy the entertainment. Keep voting for Democrats and Republicans who are Keynesians and monetarists, keep printing money and giving it to a failed financial system, keep making yourself poorer and keep destroying innovation. Like Rowan & Martin, the American democracy and the legacy media provide us with a laugh-in.

Wednesday, June 15, 2011

Michailescu to Run for Ulster County Legislature

I received this press release from Manuela Michailescu, who is running for Ulster County legislator.


June 14, 2011

Manuela Michailescu

Town of Rochester Councilwoman Manuela Michailescu enters the race 
for Ulster County Legislature, District 21

Kerhonkson, NY - June 14, 2011   Town of Rochester Councilwoman Manuela Michailescu announced today her intention to run on the Republican line for the seat of Ulster County Legislator representing District 21.

Locked out of the race for Legislature two years ago, Michailescu forced a primary on the Republican line, and was the highest vote-getter in the Town of Rochester. In the election, she won the Republican line in all 18 local districts of the former Ulster County District 1 (Rochester, Wawarsing  and Marbletown).

"I feel I owe it to those who voted for me to run again,” Michailescu says. “By talking to people in our district I understood what they are looking for in a Legislator. I am encouraged and overwhelmed by their trust in me. I will continue to reach as many voters as possible before Primary Day on September 13... My message is simple: I’m eager to listen and ready to work hard for the people of District 21.” 

With four years experience in local government, Michailescu was exposed to a wide range of town issues, and is familiar with the impact county issues can have on town's residents. 

"I am proud of my work on the Town of Rochester’s Town Board and as Liaison to the Historic Preservation and Youth Commissions. I've grown a lot in the last four years, staying involved, getting things done in a non-partisan manner. I've learned from the difficult issues we faced, from our accomplishments, from attending training sessions, from my fellow town board members, and from the people I was in touch with...

I'm a principled fighter for what is right and I hope I can continue to serve the people in the Town of Rochester as well as those in east Wawarsing."

Manuela Michailescu, 61, born in Romania, immigrated to the United States in 1980 and moved to Kerhonkson in 2001. Manuela has a MA in Theater and Film Critique and an MBA in Marketing / Advertising from Baruch College, City University of New York. She won the First Prize Award in the 1987 Philip Morris Marketing / Communications competition. Manuela is the co-owner of two small businesses: Point Blank Inc. (an advertising agency specialized in tourism marketing) and Old Brick House Antiques.

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Stock Market Spells Boomer Trouble

A double top is a bearish signal. The above is the 23-year S&P 500 chart. 
I am not a technical analyst. In fact, I do not know the first thing about it. But I do know that a double top spells trouble.  The above chart looks suspiciously like a double top. There is a struggle for a triple top, but if you've been following the stock market over the past six weeks, the Democratic stock market of '08-'11 seems to have followed the same pattern of the Democratic stock market of 1932-40: Keynesian policies and more government regulation have done nothing.  Like many stripes of ideologue, Keynesian economists say that their ideas are right, but reality is wrong. They say that nearly a trillion dollars in borrowed money is insufficient.  If Keynesian economists were physicians they would be in jail.

Keynesian economists do not mind their failure because they have tenured jobs in universities and so do not suffer from their own incompetent economic advice, which is helpful to big bankers and the Ochs Sulzbergers, the owners of The New York Times, but harmful to the average American.

I was just reading Murray N. Rothbard's Case Against the Fed.  The book was written in 1994, and Rothbard mentions (p. 23) Milton Friedman's use of the "helicopter" metaphor for printing money. Thus, "Helicopter Ben" simply talks as a good Friedmanite monetarist. Rothbard writes:

Milton Friedman's more modern though equally magical version is that of his 'helicopter effect,' in which he postulates that the annual increase of money created by the Federal Reserve is showered on each person proportionately to his current money stock by magical governmental helicopters.

The helicopter analogy is superstition. There is no uniform distribution of printed money.  The printed money is handed to hedge fund managers and Wall Street stock jobbers. The distribution of wealth, according to policies of both the Democrats (Paul Krugman) and Republicans (Milton Friedman, Ben Bernanke) is to print money, give it to banks, who give it to Wall Street and the Ochs Sulzbergers, and to Princeton's endowment.

That said, until now I have been optimistic about the stock market because new money boosts it. That is the only reason for long run secular stock market increases (and flattening real hourly wages) that we have seen since 1932 (in the case of wages, 1970). But eventually the inflation from the money printing awakens the public to their having been made poorer by the money printing's not having been distributed by a helicopter but by money center banks who have given it to wealthy Wall Street, real estate and corporate interests and stockholders.

A double top might be signaling that the market expects an inflation. That would force the Fed into tightening, with a resulting stock market collapse. The stagflation of the 1970s required a massive downturn, somewhat larger than the '08-'09 one in terms of unemployment and with much higher inflation. This time, though, after eight decades of economic mismanagement by Washington, by the followers of Keynes and Friedman, the downturn may be worse than the 1970s. 

The downturn will be enhanced by the medical system's failure. This will occur on two fronts. First, medical innovation has faltered because of misallocation of investment. Large pharmaceutical firms invest in drugs that have short run return, such as anti-erectile dysfunction drugs. New antibiotics are more difficult. Innovative scientists have much more trouble obtaining capital under Progressivism than under a free market system. Thus, innovation in new directions is squashed by the current monetary system and by Keynesian and monetarist monetary polices and by taxes and regulation.  The result is that the past 80 years' vacation from the worst results of infection is coming to an end. Thanks to Democrats and Republicans, thanks to Progressivism and big government, no innovation with respect to anti-infection drugs is on the near term horizon.  I hope you enjoyed voting for Democrats and Republicans because having done so will help cause you to die.  The baby boomers are the first American generation not to be wealthier than their parents. They will also be the first generation to die younger than their parents.

Second, the medical system has become mismanaged due to government intervention, which has accelerated since 1965.  The result is a system that rewards waste.  Additional federal intervention in the micro-management of hospitals and physicians' practices will add to the waste. 

The situation is as bad with respect to retirement. The boomers have not saved because of the federal income tax, high state property taxes, inflation, especially in areas like education and health care, and low wages.  Wages have been artificially low for the past 40 years because of the money printing in which both parties have engaged. The claim that deficit spending stimulates the economy has turned out to be pap. There has been deficit spending for the past 80 years, and the economy is crap.  The economics profession, a pack of frauds, and both parties are to blame.

Prior to the abolition of the gold standard real hourly wages went up two percent per year. Since 1970 they have not gone up.  But Wall Street has grown exponentially.  New York was a manufacturing center until the 1960s. After the abolition of the gold standard in 1970 it became, over 20 years or so, a playground for the super-rich.

So the stock market now shows a double top and the massive monetary expansion which monetarist Bernanke and his Keynesian colleagues believe will provide new antibiotics and an innovative economy has failed. The gold market has reacted predictably.  Gold has gone up six-fold in the past 11 years. Silver has gone up more than 10-fold.  They are not cheap and seem to be at a rational price given what has been done so far. There is a risk of a commodity market collapse, but there is also a risk of a dollar collapse. Take your pick.  Not that I am an advocate of increasing the stock market. The stock market is a measure of profitability, not of human welfare. Firms can be profitable for good reasons, such as innovation, but such reasons are fleeting in a free economy.  In general, the stock market goes up because of monetary inflation, that is, money printing.

How can boomers think about retirement when the Democratic and Republican Parties have screwed them financially? Putting your money into risky gold and silver or risky dollar equivalents is hardly an encouraging prospect. The stock market may not do much and may collapse altogether. Thanks to monetarists and Keynesians, the dollar is crap.   I hope you've enjoyed the Department of Education and the sub-prime mortgages, because they are ruining your life financially.

Sunday, June 12, 2011

Salafi Islamacists Cut Off Christian's Ear

The Wall Street Journal reports a gruesome tale of the Arab Spring.  It mentions that Egypt's Christians, the Copts, have come under increasing violence as Egypt has become freer.  In other words, freedom involves murdering and maiming minority groups, according to the Obama administration.  The Journal reports that Salafi Muslims burnt a Christian's apartment and then amputated his ear.

I wonder if The Journal will now be banned from college campuses.

43 Year Reunion

We were all wondering what happened to Helen Chin. (Photo courtesy of Donald Brichta.)

Three friends from my days at PS 83 and Oliver Wendell Holmes Junior High School 204 in Long Island City were in New York for their Stuyvesant High School reunion.  They gave me a call (even though I attended Stuyvesant's rival for most nerdy high school,  the Bronx High School of Science) and we met at the Bel Aire Diner in Astoria (we grew up in the neighborhood near the Bel Aire that is on the border between Long Island City and Astoria).  I hadn't seen these guys in 43 years, so it was a wonderful reunion. Clockwise from front left:  Donald Brichta is a PR executive in Massachusetts, Me, Marty Siegel is a realtor in the Twin Cities whose son is going to William and Mary, and Arthur Henick, also a PR executive and former PR aide to Governor Lowell Weicker. We were all wondering what happened to Helen Chin! It was well worth the 2.5 hour drive!