President of the PIIGS?

December 10, 2011

The PIIGS (Portugal, Ireland, Italy, Greece and Spain) countries of Europe continue their economic slide, well past the tipping point and closer to the abyss than ever.  In spite of European Union bail-out efforts, combined with attempts to convince the profligate Socialist governments that they must rein in their unaffordable entitlement programs, little or no progress has been made on solving the underlying, core problem.

Recently, a number of the EU member states have managed to get the International Monetary Fund and its chief contributor, the United States, to contribute (“loan”) more money to try to prop up Italy, along with whatever a few of the EU members can scrape up.  As big a deal as it is to U.S. taxpayers, it’s just another drop into the fire bucket to be poured onto the European Socialist conflagration.  That whole effort may really be just to shame Germany, France and the United Kingdom into deeper financial participation in this unprecedented firefighting exercise.

The root of the problem is, of course, half one of human nature and half one of the known vulnerability that all democracies share.  The human frailty, which we all recognize even if we believe it is impolite to mention it, is our desire to get something for nothing.  Of course, all politicians―even the most dense and inarticulate―know that votes are purchased with promise capital.  Moreover, even that stupidest politician knows that the very best lure is something for nothing and that an ongoing vote-buying program is best of all.  Politicians also well understand that feasibility or deliverability of the promise is immaterial; we want to believe that we will get something free, with no strings attached.

That other part of the cause is a characteristic of democratic governments.  Alexis de Toqueville, a French scholar and philosopher, made an extensive visit and study of the United States.  It was de Toqueville who observed, ”A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years”.  No one has yet discovered a procedural method of avoiding this pitfall; but the United States has managed so far to last only a tiny bit longer than 200 years.

Barack Obama began campaigning for the office of President of the United States around 2002, and in 2008 he succeeded in being elected.  In large part, Obama’s appeal was his promise to be “a President of all the people”.  His “hope and change” slogan resonated even with some number of reasonable, educated and knowledgeable voters.  Over the years since he was elected, however, that promise seems increasingly in doubt.

President Obama seems to be stuck in a rut, ever since his 2012 reelection campaign season began in 2010.  His repetitive speeches are more strident and angry; his nice guy attitude is nowhere to be seen.  The only vestige of the old Obama is his prowess in raising campaign contributions.  He has been delivering Marxist class-envy speeches, filled with trite cold-war-era Soviet phrases, at every fund-raising stop on his current campaign trail.  It seems that Obama would feel comfortable only in a European Socialist government setting.

Obama’s legislative accomplishments also appear to be copies of the European Socialist initiatives that have led those progressive governments into imminent financial peril.  The President has refused to consider any but the most trivial reductions in government spending, and he is obsessed with increasing income taxes.  Taken together, the President’s speeches and his legislative agenda indicate that Obama is more of a President of the PIIGS than he is a President of the United States.  Perhaps it would be best if he abandoned the 2012 U.S. election and instead looked into organizing the PIIGS into their own union, with Barack Obama as its head.  PIIGS voters would undoubtedly be receptive to promises of more and more government largesse.

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Communist In Capitalist Clothing

November 23, 2011

Most of us can visualize “wolf in sheep clothing”:  a wolf somehow draped with a sheepskin to conceal his real identity, with the intent of sneaking up on the unwary flock in order to enjoy a sheep dinner.  In a similar manner, one would think that most of us could visualize “Communist in Capitalist Clothing” and also understand the Communist’s motive.  But in practice, it appears that many of us humans remain clueless as the predator systematically absconds with our life, liberty and happiness.

One of the current reasons for our lack of vigilance is the success of those who have worked diligently to reinvent definitions of Pragmatism, Liberalism, Marxism, Socialism and Communism to make them more ambiguous and confusing.  I know a person who seems to actually understand the minute differences between those approaches to governing; once he volunteered that the label “Marxist” for a politician frequently should be, more accurately, “Marxist – Leninist”.  Although I respect those who have managed to learn these small details, I suspect that most of us don’t see two cents worth of difference across the whole lot.  Collectively, all of those labels refer to a form of government that is all about “coerce and control”, with abhorrence of even a small decision being made outside of the government.

Socialism, the blanket term, was an inadvertent side effect of the industrial revolution, the greatest improvement ever in the lives of ordinary people.  As the standard of living rapidly and dramatically improved in the industrializing western nations, people naturally looked back at the progress they had made from their feudal subsistence past.  As always, after things have gotten better, this retrospection generated anger at those undefinable forces or people considered responsible for that miserable past.  This angst was the catalyst for vast numbers of people to fall prey to Marxist propaganda, believing in its fairy-tale vision, “from each according to his ability, to each according to his need”.

At Thanksgiving time in the U.S. we should remember the earliest experience with failed Socialism in the new world.  The Plymouth Colony began with what we call Socialism today, only to watch it progressively fail to the point where the colony was in serious danger of starvation and extinction.  Governor Bradford, in a brave act of political leadership, mandated a return to the form of economic activity familiar to the colonists—what we call Capitalism now (and it worked so well that Bradford declared a holiday after a fall harvest “to give thanks…”).  The colonists literally learned, or relearned, that there’s no such thing as a free lunch.

But is the U. S. at present meekly acquiescing as a pack of Communists in Capitalist clothing pull our country down into the same black hole that Portugal, Italy, Ireland, Greece and Spain are currently spiraling into?  No Socialist government in history has ever survived even a third as long as that of the United States.  Are we going to cheer our entrance into Socialism and bankruptcy at the same time?  Will we continue to idolize and support the chief wolf in sheep’s clothing, gorged with his easy plunder already and still agitating the pack to binge on everything, down to the last remaining morsel of the flock that used to be the United States of America?

Will we wake up to the same unbelieving morning after the election as have Poland, the United Kingdom, Greece, Italy, and most of the struggling European Union member states?  Will we, too, have to learn the unacceptable cost of the free lunch?  Is the eventual victory of the President Of The Communists inevitable?  Do we have sufficient remaining optimism to believe in the possibility of electing a genuine President Of All The People?

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Barack Obama, Alchemist In Chief

November 7, 2011

Individuals who have convinced sufficient Americans to vote for them to be President usually have carried adequate-to-outstanding academic credentials.  President Obama is no exception, having a Bachelor’s degree, plus a Juris Doctor’s degree (from Harvard, no less).  But a great many of us are wishing he had taken a few science, math or engineering courses—courses where the correct answers are not determined by ideology, opinion polls or judicial interpretation.  President Obama’s technology illiteracy is not just a matter of embarrassment; the cost to all of us is unsustainable.

We humans, like a lot of other animals, learn through experience.  As those experiences have been recorded for posterity, each new generation of researchers, as the saying goes, stands on the shoulders of those who came before.  In ancient times, long before the seeds of modern science were planted, alchemy was accepted as a legitimate scientific pursuit.  The best-known purpose of alchemy was its goal of converting base metals such as lead or tin into noble metals such as gold and silver.  That goal eluded its searchers for millennia, but it was thought to be possible, awaiting only a “right stuff” thinker who could accomplish what had proved impossible for so long.

Today the average person thinks of alchemy as a play toy of the incorrigible ignorant.  Although essentially true, that’s not a totally fair assessment, since alchemy was one of the seeds that lead toward modern science.  One alchemy-like problem we see today is the achievement of controlled nuclear fusion, like the controlled fission used in nuclear power plants.  But, unlike the efforts of those early alchemists, research that some day might lead to controlled fusion (the holy grail of energy sources) is being conducted by the world’s top scientists with supercolliders, supercomputers, and all of our modern research tools.

President Obama does not seem to understand that the alchemy of the middle ages cannot be made to work, in spite of his rhetoric and his desires.  It appears that his ingrained ideology and ignorance of (or contempt for) physics, mathematics and engineering makes him an easy target for confidence men.  It is painfully evident that our President believes that almost instantaneous elimination of fossil fuels is achievable via political fiat.  The President is not alone in his beliefs; many in his administration have the same fuzzy beliefs and the same contempt for those “little people” of science who can’t seem to understand what is wanted of them.

So we see billions and billions of our taxpayer dollars being donated for seed money in economically questionable renewable energy initiatives.  A recent winner in our energy folly lottery is the late lamented Solyndra company that filed for bankruptcy in early September.  At this point there is no evidence of any wrongdoing on the part of Solyndra, aside from poor management and possible lack of due diligence.

Poor decision-making and overconfidence are seen from time to time in totally private initiatives, those with no taxpayer money at risk and no political favor rewards (see Diogenes and Technology Breakthroughs).  Such examples just remind us that there is risk inherent in all business ventures.  Venture capitalists understand risk management very well, but still they continue to finance new startups regularly.  However, when the venture capital is taxpayer money (which belongs to no one) due diligence has, or should have, a completely different definition.

The use of tax monies to finance business startups is generally regarded as inappropriate, but there may be room for debate on that subject.  However, no debate should be required about risk management where public moneys are involved.  Most of us believe that investing taxpayers’ money in the finest, invisible, fabric from which to make the President’s new suit should be held up to considerably more scrutiny than its counterpart private investment.

But worse than questionable investments of our money is the President’s belief that if he can starve us of electricity from coal-fired plants, we will be forced to turn to wind or solar.  Unfortunately, our President doesn’t understand or believe that there is no replacement in sight for the electricity currently derived from coal.  Or perhaps he thinks we won’t mind the absence of power at night, when solar cells produce nothing and wind turbines produce little.

We voters are a little late in vetting our President’s technology awareness and competence (and also vetting his candidates for appointment to positions related to technology).  Our recourse at this point is to do our best to make sure that potential future Presidents do not have significant technology blind spots or contempt for technologists.  It would help if we could demand more technology familiarity from the media; technology-challenged reporters and anchors seem to be the norm.

My suggestion is to support candidates for President only if they are on a technology level of George Washington or better (or Thomas Jefferson, or Benjamin Franklin, or…).

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Social Security: The Ponzi Scheme That Wasn’t

October 27, 2011

Rick Perry stirred up a hornet’s nest of media pundits, from both the left and the right, when he casually said that Social Security was a Ponzi Scheme.  Partisan pseudo-reporters, non-thinking political commentators and other dullards quickly formed their defensive square and screamed, “That’s not true; a Ponzi Scheme is illegal!”   And they are technically correct.  Any law duly passed by the House and Senate and signed by the President is legal (although the Supreme Court may subsequently declare it unconstitutional).

But what if Rick Perry had said instead, “Social Security works exactly like a Ponzi Scheme, such as that of Bernie Madoff”.  What would the leftist partisans and their fellow travelers say if the statement were phrased in that manner?  What reference could Rick Perry and others who agree with his view turn to for justification?  How about the Securities and Exchange Commission, the SEC.

On its web site the SEC provides this definition of a Ponzi Scheme:  “A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors“.  This is exactly how Social Security works.  There are no investments providing returns.  There is no actual “Social Security Trust Fund”; it is just an accounting collection of IOUs from all of the various government agencies that have spent almost every penny of Social Security payroll withholding not actually paid out to beneficiaries.

So Social Security is technically not a Ponzi Scheme, but only because what would otherwise be an investment fraud is allowed under U.S. law.  Those who blurt out emotional responses need to hold their indignity in check long enough to think about the real issue.  How can an unsustainable, Ponzi-like scheme be reformed into an enduring program to ensure an adequate retirement income for the largest number of workers?

The path toward a solution begins with a problem definition, which was skipped by the well-intentioned people who brought us the “temporary” Social Security program intended to assist workers who had been economically crippled by the Great Depression during their most productive years.  One critical part of a problem definition is articulating the desired goal that the solution is to create / enable.  The goal is simple:   enable every income earner to establish and make regular contributions to his or her personal retirement income plan that is actuarially adequate; provide strong incentives / disincentives to assure that the maximum number of earners faithfully follow through.

Realistically, that “maximum number of earners” who faithfully follow through will be significantly less than 100%; seventy to eighty percent will  be a more likely number.  Human frailties have no bounds, and there will be innumerable reasons why individuals reach retirement age with far less than enough income.  This remainder will fall into the welfare social safety net, and although there may be a little grumbling, we are not going to let those seniors starve in the dark.

What would make such an imperfect private retirement plan good for our country?  Today Social Security operates not just like a Ponzi Scheme but also operates like a welfare system:  a very large fraction of beneficiaries will take out much, much more than they ever paid in. Those retirement funds (withheld from our paychecks plus an equal amount paid by our employers) are not invested across our working lifetime and therefore grow not one penny larger; all the additional money that taxpayers must supply amounts to plain old welfare.  Reducing that welfare burden by even 50% would be a win for all Americans.

Would there be any losers?  Of course!  The progressive politicians who have been so successful in scaring the ignorant fraction of Social Security beneficiaries and the almost-senile fraction will be forced to come up with a believable rationale why nothing should be changed.  Those politicians will be quite unhappy when they have to earn the votes required for their reelection.

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Wind Gifts And Other Homages

October 10, 2011

Sociologists and legal scholars have written extensively on the elements of a caste system present in the U.S. and its relationship to ignorance levels.    My wife and I have lived, worked and raised our children across a number of states, from the middle of the plains, to the Gulf coast, to the Pacific coast, and on to the Atlantic coast.   Somehow, in all those locations, in all those years, I failed to see or even think about castes.

But recently my wife and I operated a small resale shop, along with our partners.  It was located on a minor but important state highway that traverses most of the width of our state.  Our experience in the resale / collectibles business in a low-population part of a low-population state have enabled a tiny view of this caste system at work in America.  It just took a while to see it.

The distribution of work in our partnership was simple; the women took care of merchandising, pricing, negotiating and handling sales while the men did the routine physical labor.  Upon opening the shop the women were busy opening blinds, turning on lights, moving mobile displays into their locations and all the other things necessary to actually sell merchandise.  Meanwhile the men were putting up the portable signs along our highway frontage, setting out eye-catching banners and flags, and similar deeply intellectual duties.

My last routine, daily-opening duty was to gather the day’s offerings of wind gifts and other homages that had been faithfully contributed by members of the lower castes.  This activity, which is not especially fulfilling nor completely unpleasant, stirs up mixed emotions.  These gifts and little rewards, that people of the lowest castes distribute to those they perceive as belonging to higher castes, are remarkably diverse.

Many of these honorariums must have involved a significant expenditure for those in the lower castes, even before the cost and/or effort of delivery is considered.  Others may have been free castoffs, stolen, or have cost very little money.  Every color in the visible spectrum is represented at one time or another.  They are made from an equally diverse range of materials; however, plastics, paper and glass are best represented.

The specific distribution techniques remain a bit cloudy.  This is mostly the result of the lower castes’ preference for anonymity.  Some are delivered in the daytime, most are delivered after dark, but the majority are delivered clandestinely.  It is as if the Untouchables and other low castes don’t even want to be seen by their presumed higher-caste recipients.  It is quite rare to actually see one of the timid low-caste donors in the act of delivering a gift, and he or she always disappears as quickly as possible.

It appears that differing distribution choices divide these honoraria into two general categories.  The preferred delivery technique, it appears, is a nonspecific-recipient technique that takes advantage of the wind (of which our state is blessed with plenty).  If a gift has a very low total weight, or has a rather large area-to-weight ratio, these low-caste donors have learned to toss them up-and-away into the wind.  Mother Nature’s delivery is efficient, although not particularly effective; only some fraction actually reach an upper-class beneficiary—many just rot away unseen in high grass, weeds, scrub timber and brush.

Our share of that fraction of wind gifts that actually reach a recipient still provide an abundant sample of materials, colors, textures and designs.  They are also sprinkled with well-known brand names, particularly McDonalds, Burger King, Frito-Lay and other food providers.  One category of wind gift producers is especially well represented—tobacco companies.  It seems that low-caste people don’t have the means or education to select innovative or unique gifts for those of us they consider upper-caste.  Therefore, colorful wrappers of all kinds of products predominate—candy bars, chewing gum, and so forth.  Each day reveals a never-ending variety of these simple, inexpensive offerings.

Those gifts which are too heavy for the wind are placed, or possibly tossed, onto the property of a selected recipient.  Those gifts made of glass are in this category; some fraction arrive intact, but the remainder are unfortunately broken in the delivery process.  The variety of colors and designs of the labels on these glass gifts is quite large, but the colors of the glass itself is essentially limited to three—primarily brown, with the remainder divided between green and clear.  Brand names, although well-known, are somewhat limited—Budweiser, Millers, Coors and a few others.

Aluminum cans used for beverages, both beer and soft drink, have the characteristics of both hand-delivered and wind-delivered gifts.  If a can is completely empty it can be wind-delivered; but if it has more than half a swallow of liquid, it must be placed or tossed.  Therefore it is difficult to tell if this type of gift was intended to be hand- or wind-delivered.  As I collected these pitiful little gifts, I always had a sense of guilt over the knowledge that the low-caste donors are unaware of the potential monetary value of aluminum cans.

But my greatest sense of guilt came about because of our limited means to properly display all the gifts.  Rather quickly I had to start storing them in a 55-gallon drum, and I feared that the donors might see me and think I didn’t appreciate their homages.  That 55-gallon drum could easily be mistaken for a rubbish container, and I certainly did not want to break the hearts of those poor little, miserable people.  It’s bad enough for the low castes to know that they are the bottom of the barrel, and the thought of them believing I would put their carefully delivered gifts in a trash barrel was heart-breaking for me.

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Taxation Theology

August 31, 2011

The correlations between theology and government are striking.  At one extreme are those hard-line politicians who promote government as the peoples’ religion.  An opposite extreme may be represented by anarchists advocating atheism.   In between, we see many other parallels between the faith of individuals and their perception of ideal forms of government.  But nowhere is the correlation higher than in citizens’ beliefs about taxation.  This phenomenon is most often called taxation theology.

It appears that many or most people develop their taxation theology in a manner consistent with the path they followed to arrive at their religious faith.  For many, family tradition sets people on their initial direction of development.  For others, group associations such as jobs, labor unions, schools, and churches are a major causative factor.  Curiously, political associations do not seem to be the causative factor in individuals’ taxation theology (although there is usually a strong correlation between politics and taxation faith; more about that later).  Age appears to have a minor influence; younger individuals (who have probably not paid any personal income taxes yet) tend to adopt a more liberal-left taxation theology and to be more indifferent about taxes in general.

Once an individual’s taxation theology is more or less set, that person rarely questions his or her deep-set opinion.  This seems to be true of most of us, irrespective of our tax denomination—flat tax, fair tax, progressive tax, confiscatory tax, etc.  However, it appears that changes in financial circumstances can trigger some introspection:  “I didn’t realize until lately that taxes consume more than half of my income!”, or “I have enough income and wealth now that taxes are no concern”.  Obviously there are more in the former category than the latter; but indifference to taxation by some wealthy people might have a negative effect on the rest of us.

One fact that is directly related to taxation theology is rarely mentioned:  fifty percent of us in the United States do not pay any income tax.  Does this tell us anything?  Because the House, Senate and President control how much income tax any of us and all of us pay, the answer is “not much”.  However it provides us with a context that may help us to understand how there can be so many opinions about income taxes.  Those of us who pay little or no income taxes might be expected to differ in our tax theology from those who pay anywhere from a fourth to more than a third of their incomes in federal income tax alone.

Some of the tax denominations have arrived at a point where they espouse a combination of class-envy and poison-the-well:  “If you have more than I do, give me the difference.   If you won’t give it to me, then throw it down the government well so no one can have it”.  Other denominations appear to be more egalitarian—a single flat tax for all, with no hidden add-on taxes / withholding (e.g., Social Security, Medicare, etc.).  There are also a few groups of heretics who believe that the government is obligated to prove that each and every expenditure of tax monies is prudent, necessary and useful (even taxation theology has its weirdos).

One example of the correlation between political persuasion and taxation theology is those people of the OPM persuasion, dominant among the most ardent denominations.  To the best of our knowledge, members of the OPM denomination are all associated with the left-liberal political spectrum.

OPM theologists frequently quote scripture in public, usually from the Book of Marx.  Their favorite verse seems to be “The top one percent of income producers don’t pay their fair share of taxes”.  This  scriptural passage actually has a slight correlation to current tax reality—the top one percent at present pay only slightly more than half of all personal income taxes.  But OPM believers are usually reluctant to engage in a debate on how much income tax is appropriate—sixty percent, eighty percent, ninety-five percent?   OPMers must not have heard that the United Kingdom at one point had a top tax rate of one hundred two percent, 102%; otherwise they might have an answer ready to use.

In spite of the range of taxation denominations, it is likely that the balance of power among taxation theology denominations will depend, surprisingly, upon where the taxation agnostics come down.  Tax agnostics generally show more resistance to politicians’ emotional appeals, but they do respond to calls for being “fair” in spreading the pain of taxes.  Perhaps they believe in the mathematics that prove the same tax rate yields a larger amount of taxes collected from upper income earners than from low income people.  They also generally believe that even the poorest of us should pay at least a few dollars per year.

It will be interesting in November 2012 to see which denominations are most heavily represented at the polls.  Will the current, irrational U.S. income tax law continue to be safe, for one more interval?

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Debt Limit Drama, In Retrospect

August 17, 2011

It’s been two weeks since the curtain rose on The Great  Debt Limit Drama; one of the major political parties has settled on its gleaning strategy; and the media has digested it, with only a low stomach rumble persisting.  The Propaganda Division of the ruling party is drawing down from regiment size to a few precautionary battalions.  Those on the out are still analyzing, trying to figure out who was on what side of this Tet Offensive.  Has the media turned a military defeat into a political victory, as in that other Tet Offensive?  It may be years before a General Giap appears on the scene to give us the straight story.

For those of us who are willing to admit that we are not politically omniscient, we are left with the meager visible facts.  One more time, my nascent opinion rests on a pitifully small number of facts.  The worry, which a number of sideline observers have voiced publicly, is whether the facts in that small quantity were salient and causative factors.

The way it looked to me:

1.  The debt limit “compromise” bill was passed by the House and the Senate and subsequently signed by the President into law.

2.  One of the credit / financial rating agencies rather quickly downgraded The United States from an AAA rating (its highest) to AA+ (one step lower), and added a financial Negative Outlook attribute for good measure.

3.  The amount of the increase in the debt ceiling is sufficient to allow the U.S. to keep borrowing until well after the next presidential election.

4.  Social Security checks went out on schedule, no military personnel missed a paycheck, medical providers received their Medicare / Medicaid payments, the millions of federal employees and contract personnel got paid, and Old Faithful had sufficient energy to keep erupting on schedule.

Now it’s down to somewhat lesser facts:

5.  The President publicly repeated over and over that failure to increase the Debt Ceiling would cause the U. S. to default on its bond holder interest payments.  At a later point he changed the wording to “default on its solemn obligations”.

6.  The President publicly stated a number of times that he “could not guarantee that Social Security checks would go out”  if the Debt Ceiling were not increased.  A few times he said the same for Medicare and Defense Department personnel payments.

7.  The Treasury Secretary also kept publicly iterating his stock disaster warnings, similar to the President’s.

8.  Some number of months before the Debt Ceiling deadline, the Treasury Secretary assured us in a televised interview that “there is no chance of a credit agency downgrade”.

At this point we segue to other minor facts, plus a few “what-if” speculations:

9.  Neither the President nor the Treasury Secretary ever publicly mentioned that the expected monthly income of the United States is sufficient to pay (a) bond holders, (b) Social Security recipients, (c) Medicare claims, and (d) Department of Defense payroll, with tens of billions of dollars left over.

10.  Neither the President nor the Treasure Secretary ever mentioned that there is no legal barrier to prioritizing federal government payments, allowing bond holders to be paid first (about $40 billion out of the expected $165 – $200 billion monthly income).

11.  Did the Treasury Secretary, or other Obama Administration official, ever privately tell the credit rating agencies that there was no danger whatsoever of default and that Administration rhetoric was just “political leveraging”?  It’s unlikely that we will find out.

12.  Did the President really take the Treasury Secretary’s “no downgrade” assertion at face value, without polling other knowledgeable people on his staff?  If so, perhaps he should turn to a better source (like the Tea Party?).

13.  There seems to be general agreement among media pundits that scaring “the old people on Social Security” continues to be an effective Democratic Party tactic.  Is the apparent diminished capacity epidemic among our senior citizens for real?

14.  Did the Republican leadership do a Charlie Brown, falling on its hind side when Lucy (AKA Democrats) yanked the football away from the tee at the last second—again?  Undoubtedly all those Lucys are still giggling.

15.  Did the Republicans learn any lessons from the attempts to scale the Everest mountain of U.S. debt?  It does appear that a sizable percentage have come to believe that it is not possible for our country to continue spending trillions more per year than the country’s income.

16.  Did the Democrats learn any lessons from the country’s unfettered credit-card spending?  The rhetoric of Democratic leaders indicates no!  But could it be that our President is smarter and more clever than most of us give him credit for?  Might he be just executing tactics from Alinsky and Marx, taking advantage of de Toqueville’s excellent hint about voting the treasury in a democracy, as keys to his Grand Strategy, whatever that might be?  If the debt escalation continues as at present, all of us will know for sure in five years or less.

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Governmental Aphorisms

August 17, 2011

We humans have had forms of government longer than we have had writing.  So it is not surprising that quite a number of aphorisms about government have accumulated.  Three of the small fraction to which I have been introduced come to mind fairly often.

One bit of government truth is possibly the best-known aphorism in the category, while being at the same time the least-heeded.  Thomas Jefferson observed, “That government which governs least governs best“.  However, a nineteenth century “philosopher / economist” later composed siren songs advocating governing most and governing everything; sadly, a large percentage of 20th  and 21st century politicians have fallen prey to those deadly tunes.

Another bit of Jeffersonian truth is prominently engraved in the Jefferson Memorial in Washington, D.C., “Eternal vigilance is the price of liberty“.  It is clear that he meant vigilance of our own government and not of imminent invaders.

Alexis de Toqueville, a French scholar and philosopher, made an extensive visit and study of the United States and later observed, ”A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.”   Alexis de Toqueville’s perceptive quote remains timely, especially during the last seventy years:  is the U.S. now running on borrowed time (as well as borrowed money)?

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New U.S. Civilian Medal

August 15, 2011

The United States has created over the years a large number of military decorations which recognize service and personal accomplishments while a member of the U.S. armed forces.  The government has also created many awards, bestowed by various agencies of the government, for sustained meritorious service or for significant contributions to the country.  But in spite of all the awards defined, it appears that there is a niche area of significant civilian performance that has been overlooked; I’ll throw out a suggestion for that area.

For military personnel, the best-known decorations are those for gallantry and exceptional performance under fire.  At the top, of course, is the Congressional Medal of Honor.   The Service Cross Medals of the Army, Navy and Air Force are somewhat less well-known.  Most of us have heard of the Distinguished Service Medals of the various branches of the military.  Probably most people are familiar with the Silver Star Medal, which can be awarded to a member of any branch of the military for valor in the face of the enemy.  Past the Silver Star are quite a number of other awards for meritorious service, personal accomplishments, and unit awards for various branches and for many different situations of service.  Of course, one of the best-known awards is rarely, if ever, desired by its recipients—the Purple Heart Medal for being wounded in action.

In the civilian arena the best-known awards are the Presidential Medal of Freedom and the Congressional Gold and Silver Medals.  But there are also very many other civilian medals for service within the huge number of government branches and agencies.  In fact, there are so many awards it’s difficult to understand how the important niche mentioned above could have been missed.

The reason that there are so many civilian medals and decorations is that it is important to recognize excellence and consistency of individuals in an almost infinite combination of circumstances and types of meritorious performance.  In general, awards for different actions in different situations cannot be compared, nor would we want to try.  For example, how could we compare National Park Rangers to those who issue passports—both perform important functions that many of us need.  Perhaps that is why one high-impact performance area might be overlooked.

High-impact seems to be a warranted description of performance that directly affects 60% of the entire United States budget, year in and year out.  In addition to its monetary impact, this performance area has also been a major factor in the success of at least one political party for at least 80 years.  One bit of irony is that while there is no official civilian medal authorized, the media manages to publicly honor individual performance in this area from time to time.

A few of our elected Representatives and Senators also point out instances of people who have performed “above and beyond”.  Such ceremonies usually do not include or identify the principals involved, probably because of privacy concerns.  However, these elected officials do bring to light the collective impact of these honored persons upon the national budget and national self-esteem.  But no action has yet been initiated to officially define appropriate medals and awards for these civilian stalwarts.

It is about time for Congress and the President to define a civilian award appropriate for individuals whose service is clearly distinguished from that of ordinary civilians in this area.  What the country needs is a Ward of the State Medal, to honor meritorious service in soliciting, obtaining and consuming state largesse.  Undoubtedly President Obama and quite a number of Senators and Representatives would support such an effort.

I should mention that at first I believed that I could meet the requirements for this new medal.  I thought my service in a couple of the covered areas might have qualified me for not just the basic medal, but possibly even an Oak Leaf Cluster.  I am an official, card-carrying participant in the National Ponzi Scheme (A.K.A. Social Security) who has successfully completed my Payroll Confiscation Phase and arrived at my Government Largesse Phase (I thank the specific 2.6 or so American workers from whose paychecks my reward is deducted each and every pay period).  Membership in the National Health Scare Scheme (A.K.A. Medicare), however, might not actually warrant an Oak Leaf Cluster (and I have to admit that my participation has been sporadic and lackluster due to good health beyond my control).

Upon reflection, I realized that I am not fully qualified for the medal because of my continuing doubts about these programs.  Social Security is about the same age as I am, but for some unexplained reason I came to realize at an early age that it amounts to a government-approved version of Charles Ponzi’s (and later, Bernie Madoff’s) business scam.  I am also forced to confess that I never truly believed that Medicare was “insurance” nor that it had very much to do with “health care”; I was just too lazy or too preoccupied to stand on the rooftop and scream at the top of my voice.  I like to believe that, had my unlikely career entrance into a niche of business problem-solving come about a few years earlier, I would have been prepared and taken action to present the logical reasons, to anyone who would listen, why Medicare was doomed to eventual financial disaster.  I also wonder if my great-grandchildren would ever want to show their friends “Great-Grandpa’s medal from The Great Socialism Upheaval”.

However, I don’t want to  rain on anyone’s parade; my negative and somewhat cynical outlook should not deter our government from presenting Ward of the State Medals to the millions of well-qualified and deserving citizens and countrymen, as well as the tens of millions who will soon also be qualified.

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Posted by thedrake01

PIIGS: Blame Not George Bush, Blame Karl Marx

August 5, 2011

PIIGS ALERT:  The European Central Bank, commenting on the high probability that Italy (the world’s eighth largest economy) will need a Greece-style bail-out, said (paraphrased):  “At this point there is nothing we can do for Italy, Portugal or Spain”.

In the absence of sustained handouts from the European Union, the PIIGS countries are faced with very difficult economic decisions.  Italy, whose Socialist “Noble Experiment” preceded  that of Russia by about ten years, has apparently pushed the progressive government envelope beyond the ability even of Other Peoples’ Money to save.  Silvio Berlusconi,who may be just keeping up appearances, denies that Italy will need a bail-out.  In fixing the blame for Italy’s situation, the Prime Minister has not invoked the name of George W. Bush; perhaps he believes that U.S. President Barack Obama has used up that excuse.  Or perhaps his experience with increasing doses of Socialist Workers’ Paradise has provided him with a wisdom that has evaded a number of European politicians.

Karl Marx has been described as a “philosopher”, an “economist” and a “political rabble-rouser”.  But he may have thought of himself as a “physicist”.  He believed that wealth, like matter, could not be created nor destroyed—it just exists (remember, he wrote “Das Kapital” before Einstein was born).  Any money problems, then, can be solved simply by redistribution.  In the zero-sum wealth game in his mind, redistribution of wealth would make everyone happy.  Politicians the world over have found Marx’ argument essential to getting elected, and reelected, and reelected, and…

Prime Minister Berlusconi may actually be faced with convincing his electorate that governments, like most families, must learn how to live within their means.  Those of us who have kept up with the bellwether PIIGS member, Greece, do not envy Mr. Berlusconi his job.  The small, timid reductions in Greek government extravagances were quite similar to the recent debt limit tiptoeing in the U.S.; Greece  has made it this far only because the European Union and the International Monetary Fund had sufficient cash in hand.  But the European Union is almost as broke as the U. S.  So in Italy, push may really come to shove; the country has enough political parties to form armies of opposition to having to earn their own way.

As tempting as it might be to excoriate George Bush, Mr. Berlusconi will more likely come down on Saint Marx, the patron saint of Socialists.  The Prime Minister can point out that other sacred stars of the Socialist galaxy, such as John Maynard Keynes, have been advising Socialist governments around the world to keep the faith, that the bread, peanut butter, and jelly will come out even if only enough time is allowed.  But the truth keeps popping up all over the leftist world:  it only works when there is a sufficiency of other peoples’ money to pay the progressive bills.

As the PIIGS’ economic drama plays out, we may actually hear, “Karl Marx caused this whole mess”!  Will leftist politicians in the U.S. hear those words?

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Posted by thedrake01

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