Monty Pelerin's World

Economic, Financial and Political Analysis

Archives for History

Where Is Uncle Jack’s Highway?

rockwelllikeThis video touched me on several levels. I think the most important aspect of the video is that it is about an average American.  Uncle Jack, like millions of other unseen and unknown Americans, are the true heroes of this country. They made the country and continue to make it great. They receive little or no recognition for their contributions. Yet they continue to perform their duty to self, family and country.

rockwells (2)Contrast Uncle Jack with the preening, posing fools who pretend to be leaders. These phonies exploit and prey upon the country. The Uncle Jacks of the world are who make the country run and make it great. They go through life dedicated to duty, honor and country. They earn paychecks, raise families and honor themselves and their country by a commitment to old-fashioned values. They don’t feel “entitled,” demand reparations or other favors. They just do the best they can and deal with what life hits them with.

Uncle Jack provides the perfect contrast between true heroes and the phonies idolized by a current culture. “Uncle Jacks” don’t seek fifteen minutes of fame. They don’t make fools of themselves just to get their faces on TV. They do what needs to be done, do it quietly and do it because it is the right thing to do. They don’t demand rewards or recognition for what they consider to be necessary. Uncle Jack is one of the millions of true American heroes, perhaps a prototype for them.

Watch this video and then compare Uncle Jack with our lying, stealing politicians who commemorate their misdeeds by naming buildings, roads and schools after themselves. History and commemorations are controlled by these charlatans.  It is the Uncle Jacks of the world who make progress possible and do it quietly, relentlessly, competently and unassumingly. They are the heart of this country, not the camera-hungry parasites who destroy the essence of what is good about America.

Where is Uncle Jack’s highway?

Enjoy this short video about Uncle Jack. His, and millions of other silent, conscientious Americans make the country work and will continue to do so unless they are crushed from above. Forget the movie stars, American Idols and blowhards in Washington. Thank your lucky stars for the Uncle Jacks. I hope you are lucky enough to have a couple in your family.

David Stockman Alienates Both Ends of The Political Spectrum

stockmanDavid Stockman wrote an intriguing article which appeared in the NY Times. That it appeared in the Times is noteworthy itself, for it contradicts so many liberal shibboleths the paper has supported (promoted) for many years. Its appearance is less likely to reflect the first steps to Damascus and may be a sign of financial desperation where the need for readership trumps political ideology. Or perhaps it is a return to “all the news that’s fit to print.”

Mr. Stockman has the background and experience to know of what he writes. He was the Budget Director under the Reagan Administration and is familiar with government spending and political excess.

His diagnosis of the problem is reasonable and welcomingly blunt:

… we are now state-wrecked. With only brief interruptions, we’ve had eight decades of increasingly frenetic fiscal and monetary policy activism intended to counter the cyclical bumps and grinds of the free market and its purported tendency to underproduce jobs and economic output. The toll has been heavy.

[snip]

The United States is broke — fiscally, morally, intellectually — and the Fed has incited a global currency war (Japan just signed up, the Brazilians and Chinese are angry, and the German-dominated euro zone is crumbling) that will soon overwhelm it. When the latest bubble pops, there will be nothing to stop the collapse.

[snip]

As the federal government and its central-bank sidekick, the Fed, have groped for one goal after another — smoothing out the business cycle, minimizing inflation and unemployment at the same time, rolling out a giant social insurance blanket, promoting homeownership, subsidizing medical care, propping up old industries (agriculture, automobiles) and fostering new ones (“clean” energy, biotechnology) and, above all, bailing out Wall Street — they have now succumbed to overload, overreach and outside capture by powerful interests. The modern Keynesian state is broke, paralyzed and mired in empty ritual incantations about stimulating “demand,” even as it fosters a mutant crony capitalism that periodically lavishes the top 1 percent with speculative windfalls.

I do disagree with this assessment:

There was never a remote threat of a Great Depression 2.0 or of a financial nuclear winter, contrary to the dire warnings of Ben S. Bernanke, the Fed chairman since 2006.

I believe there would have been a banking system collapse and another Great Depression. Regardless, there should have been no intervention, and that is the point Stockman was making. Instead, the politicians kicked the can further down a road that has an end. The banking system collapse may or may not have been avoided. A currency collapse now appears possible and an even Greater Depression has been baked into the future.

Stockman’s article is worth the read. It is pointed and highly opinionated. It raises anger from both sides of the political spectrum. From the left come criticisms from the likes of Paul Krugman, Jared Bernstein, Kevin Grier, Joe Weisenthal, John Feehery and Matt O-Brien.

From the right, Forbes has an article entitled David Stockman Brings New Meaning To ‘Flawed Economic Analysis’ which concludes with this advice:

It’s time to divorce ourselves from the myriad fallacies of the moment that are suffocating our present and future. But in doing so, we would be wise to not follow Stockman down a similar, fallacy-littered path.

I don’t know what it means when you anger both ends of the political spectrum. I suspect the left is upset with his interpretation of the effects of liberal policies, most notably The New Deal. The right appears to be displeased with his proposed remedies. 

The Death of Civilization

apocalypsesesss (2)As the long, slow death of economies and countries plays out there will be many twists and turns.

Cyprus was a shock to those who didn’t believe that the sanctity of private property and the rule of law could so easily and brutally be cast aside. It should not have been. History is replete with similar examples.

When history is written fifty or one hundred years from today, Cyprus will likely be, at best, a footnote. Archduke Ferdinand’s assassination preceded World War I just as Cyprus preceded the coming worldwide turmoil. Neither caused the events that followed (will follow). Both were effects rather than causes. Had neither happened, history would not have been altered.

monstGovernment has no conscience, but it does have a monopoly on violence and plunder. When its position is threatened, it protects itself. No incentives or barriers prevent it from unleashing violence when it is in its interest to do so. We are at just such a point in history. Government is increasingly seen as responsible for the mess we are in. Likewise, it is increasingly seen as inept, corrupt and self-serving. 

Like a cornered, wounded animal, government will do anything to survive and retain its spoils. The brutality of this survival instinct is beginning to become obvious. Cyprus was a minor, first example.

Benevolent government is nice when things are going well. There are limits to how far the carrot of bread and circuses can go. When those limits are reached, the powerful stick is all that is left. Violence, death and destruction are all tools (or results) that government resorts to when it has no other way to survive. Recorded history is little more than governments cycling through carrot and stick periods. 

The world is now going through a painful economic and financial crisis. Governmental cronyism and interventionism are largely at fault. Government is unable to solve this problem in a way satisfactory to itself. Nor is it able to fund the coverup of the problem much longer. It has about run out of the resources which enabled it to do so thus far.

As government continues to intervene, future decades of suffering and cruelty are only made worse. Law, private property and common sense, the DNA of civilization and social cooperation, are under attack. As seen in Cyprus, when these principles get in the way of government they are ignored and reduced to academic, philosophical concepts. 

hitleres (2)When government feels threatened, raw unmitigated power is unleashed. Oppression and tyranny result. Benevolence, even if the resources were there to continue it, is displaced with oppression. Rulers adopt the despicable but effective styles of Hitler, Stalin and other despots. The world is entering this phase of the governmental cycle. A new era of government savagery is just beginning. 

The road to tyranny is complex. It is long and has many twists and turns. The civilized world traversed the least uncomfortable part of this journey over the past seventy years or so. Now, it enters the phase where the speed and pain are about to accelerate.

The developed world is heading toward a future that looked like the old Eastern Europe. The concept of freedom, often treated as an academic issue, is about to become a practical one. The potential horrors of government no longer will need to be described by quaint quotes from our Founding Fathers or warnings from individuals like Lord Acton. These horrors will eventually become a daily part of the routine. We will see a threatened beast attempt to protect itself by ignoring anything that hinders its ability to survive a bit longer. Concern for collateral damage to citizens or other countries will not matter.

The concept of freedom, now so dear to the Eastern Europeans who did not have it for so long, will be cherished as a result of its absence for future generations in the US and much of Europe. The pain of our current economic crisis will seem mild in light of what follows.

Simon Black outlined what is likely to occur in eight distinct steps. There is nothing original here as they are part of the rhythm of history. These depredations have been repeated for more than a thousand years. What may surprise is that they are coming to what we thought were civilized, developed nations. Even that is not new. Arguably, Germany in the 1930s was the most civilized and refined culture in the world. Civilization, culture and refinement were no defenses against the raw force, power and horror of Adolph Hitler.

Here is Mr. Black’s outline:

Expect these eight steps from the government’s playbook

by SIMON BLACK on MARCH 26, 2013

To anyone paying attention, reality is now painfully obvious. These bankrupt, insolvent governments have just about run out of fingers to plug the dikes. And history shows that, once this happens, governments fall back on a very limited playbook:

  1. Direct confiscation

    As Cyprus showed us, bankrupt governments are quite happy to plunder people’s bank accounts, especially if it’s a wealthy minority.

    Aside from bank levies, though, this also includes things like seizing retirement accounts (Argentina), increases in civil asset forfeiture (United States), and gold criminalization.

  2. Taxes

    Just another form of confiscation, taxation plunders the hard work and talent of the citizenry. But thanks to decades of brainwashing, it’s more socially acceptable. We’ve come to regard taxes as a ‘necessary evil,’ not realizing that the country existed for decades, even centuries, without an income tax.

    Yet when bankrupt governments get desperate enough, they begin imposing new taxes… primarily WEALTH taxes (Argentina) or windfall profits taxes (United States in the 1970s).

  3. Inflation

    This is indirect confiscation– the slow, gradual plundering of people’s savings. Again, governments have been quite successful at inculcating a belief that inflation is also a necessary evil. They’re also adept at fooling people with phony inflation statistics.

  4. Capital Controls

    Governments can, do, and will restrict the free-flow of capital across borders. They’ll prevent you from moving your own money to a safer jurisdiction, forcing you to keep your hard earned savings at home where it can be plundered and devalued.

    We’re seeing this everywhere in the developed world… from withdrawal limits in Europe to cash-sniffing dogs at border checkpoints. And it certainly doesn’t help when everyone from the IMF to Nobel laureatePaul Krugman argue in favor of Capital Controls.

  5. Wage and Price controls

    When even the lowest common denominator in society realizes that prices are getting higher, governments step in and ‘fix’ things by imposing price controls.

    Occasionally this also includes wage controls… though wage increases tend to be vastly outpaced by price increases.

    Of course, as any basic economics textbook can illustrate, price controls never work and typically lead to shortages and massive misallocations.

  6. Wage and Price controls– on STEROIDS

    When the first round of price controls don’t work, the next step is to impose severe penalties for not abiding by the terms.

    In the days of Diocletian’s Edict on Prices in the 4th century AD, any Roman caught violating the price controls was put to death.

    In post-revolutionary France, shopkeepers who violated the “Law of Maximum” were fleeced of their private property… and a national spy system was put into place to enforce the measures.

  7. Increased regulation

    Despite being completely broke, governments will dramatically expand their ranks in a last desperate gasp to envelop the problem in sheer size.

    In the early 1920s, for example, the number of bureaucratic officials in the Weimar Republic increased 242%, even though the country was flat broke from its Great War reparation payments and hyperinflation episode.

    The increase in both regulations and government officials criminalizes and/or controls almost every aspect of our existence… from what we can/cannot put in our bodies to how we are allowed to raise our own children.

  8. War and National Emergency

    When all else fails, just invade another country. Pick a fight. Keep people distracted by work them into a frenzy over men in caves… or some completely irrelevant island.

Happy Saint Patrick’s Day

stpatricksday123 (2)Happy Saint Patrick’s Day! On this day everyone, at least everyone who likes beer, is Irish. But the real story of Saint Patrick should not be forgotten: Tribute to Saint Patrick

 

Give Me My Country Back

obamarobberA free and open society depends on tradition, customs, culture and law to maintain its condition. For a couple of hundred years the US came closest to achieving the near-perfect balance of freedom for its citizens. Slavery was an obvious and major flaw that eventually was overcome. There were other imperfections of course, but no other country ever approached the success achieved in the United States.

The US was not perfect, but actuality never equals idealism. No other episode in human history came as close. The accompanying results were impressive. The US achieved unparalleled success and prosperity in a short period of time. No one has approached this achievement over any period of time. Internal peace and prosperity were the by-products of nearly true freedom.

angerToday, much of what the country was is gone. Freedom has been drastically curtailed and continues to be disappear. Government can no longer be confused as being  ”of, for and by” the people. It has become an oppressive master, not a servant.

Government is willing to punish anyone who stands in its way. Rights and freedoms receive lip-service from the political class but actions defy the pretty words. The Rule of Law and the Constitution are nearly irrelevant. The work of politicians is considered too important for time-honored and proven principles to stand in the way.  Principles no longer matter. Political expediency does. Practical and expedient, aided by a manufactured crisis here or there, have swept away principles.

Government schools and an imbecilic press ensure that most citizens are kept in the dark regarding the rape that is being inflicted on the country. Corporatism rules as the political class buddies up with corporate chieftains to bilk ordinary citizens. Favors are granted and received within this oligarchy. Profits accrue to the oligarchy, but losses are socialized and paid for by the sheeple. Trillions went to the criminals running the banking industry, but not one banker went to jail. Jon Corzine, the poster child for the oligarchy cannot account for billions of dollars of investors’ money. Oh, never mind, he is one of the power elite so doesn’t have to answer for his malfeasance, incompetence, criminality or whatever it may have been.

The economy is crippled as a result of years of government meddling and interventions. Central planning squandered billions on asinine, impractical dreams like solar power and ethanol. Fiscal and monetary stimuli have been even costlier, distorting prices and interest rates and encouraging improper economic decisions and investments. The economy is now so riddled with inefficiencies that it is no longer productive. The lives of US and world citizens have been made harder and poorer as a result. But the political boondoggles served their purposes by providing subsidies and payoffs to supporters and interest groups.

The internal peace of the country has been placed at risk as the country has changed from one of citizens cooperating with one another to one where they are at odds with one another. Deliberate conflict is encouraged among interest groups. A large portion of American society has no understanding of economics and the need to produce. The yearning for freedom and success has been sucked out of them, actually bribed away from them via food stamps, cellphones and large screen TVs. Goodies are exchanged for votes. As part of this bribery, any chance for self-respect and a meaningful life has also been taken.

The new zombie class does not know cooperation or achievement. They know only entitlement. They are the new slaves of the State. They survive at the pleasure of the ruling class. Whatever talent and drive they might have had has been stifled by politicians pretending to care about them. So long as they remain compliant and vote the right way, they will be taken care of. But what happens when leaders are no longer chosen by a vote. Then this helpless class is of no use and will be abandoned by their masters to fend for themselves in a world for which they are ill-prepared.

To support the zombie class, the productive class must also be enslaved. Tax rates increasingly take larger shares of the fruits of their labor. Being forced to work for nothing, or at least for less than what the work is worth is a form of slavery. At what tax rate do we recognize it for what it is? 30%? What about 60%? It doesn’t have to be 100% to qualify as slavery. Even in the old true days of slavery, slaves were allowed to have food and shelter. Then, as now, a 100% tax theft cannot work.

The internal peace and tranquility of the nation is threatened by interest group politics. One group is painted as an enemy of another. Meaningless words like “fair,” “fair share” and “equity” are used to fan the antagonism. Demagogues use this interest-group politics to gain votes. In the course of doing so, they divide the country and create envy and animosity. In a serious economic crisis, these manufactured animosities will surface.

The inherent goodness of the American character still exists, particularly in the older generations. Too many in the younger generations have not developed character and values. They have been raised to believe they are entitled to a living, whether they provide it or not. This generation lives in an economic fairyland, encouraged by politicians to do so. They believe government has wealth and that it is government’s responsibility to provide a standard of living. In this juvenile and convoluted world, work is optional.

For many, the world is zero-sum in nature. If they have less, it is only because someone else has some of what they should have. Such a belief system separates wealth from work. No one fails because of lack of effort. Failure doesn’t even exist because everyone is assumed equal. If you are not, it is not your fault but the fault of someone that exploited you. With such beliefs, how can it be considered unjust to right the previous wrong?

Politicians began and encourage these beliefs. Dividing people into classes is a means to gain votes. Divide and conquer is a despicable political strategy, but it works. And that is all that counts for politicians who have no morals, ethics or integrity.

Envy and jealousy have replaced admiration and respect when looking at others’ success. Indeed, success itself has become pejorative. Too many believe it is only achieved by dishonesty or exploitation. The zombies are taught that success has been stolen from them and others. Work habits, education and ability are not factors in success. The system is corrupt, or so they are convinced. Hence, anyone successful is to be despised rather than respected.

In the highly politicized economic world of today, cronyism is increasingly the means to success. Great wealth is no longer achieved by producing goods and services that others can use. It now comes from knowing someone in power who can open doors for you and throw government subsidies (taxpayer money) your way. Wealth is increasingly unearned and associated with Washington, DC. The power structure acquires wealth the easy way — by plundering ordinary, productive citizens.

To understand how bad our situation has become, a handful of statistics is all that is needed. The per capita income in the Washington DC area is the highest in the nation. So too are housing prices. On the other hand, the unemployment rate is below 4% while the rest of the country is near 8%. But nothing is produced in this cesspool on the Potomac. Nothing but grief and interference for everyday citizens trying to feed their families.

I am disgusted by what has happened to this country. The future is bleak and getting bleaker. America is no longer the home of the brave and the free. It is now the home of the connected and the corrupt. It is nothing like the country I knew. It has become the home of the grifters, con artists and crooks. This description fits our political class. They are no longer bound by rules or laws.

After two hundred plus years, power has escaped its box and now runs rampant in the US. The current Administration shows no concern for tradition, law, truth, ethics or decency. The delusional messianic quasi-dictatorship of Obama is emboldened by citizens, the media and fellow politicians who refuse to call him out. The harsh methods of the Chicago street gang are becoming evident. Anyone in their path is the enemy and must be destroyed.

I want my country back, not for myself but for my offspring. You should also. No two-bit imitation of Hugo Chavez should be allowed to do what is being done. We the people must put a stop to the tyranny and destruction of our civilization.

 

 

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