Laissez-nous faire!

The following is an extended quotation followed by a few comments:

Since "economic growth" is today's great problem, and our present Administration is promising to "stimulate" it -- to achieve general prosperity by ever wider government controls, while spending an unproduced wealth -- I wonder how many people know the origin of the term laissez faire?

France, in the seventeenth century, was an absolute monarchy. Her system has been described as "absolutism limited by chaos." The king held total power over everyone's life, work and property -- and only the corruption of government officials gave people an unofficial margin of freedom.

Louis XIV was an archetypical despot: a pretentious mediocrity with grandiose ambitions. His reign is regarded as one of the brilliant periods of French history: He provided the country with a "national goal," in the form of long and successful wars; he established France as the leading power and cultural center of Europe. But national goals cost money. The fiscal policies of his government led to a chronic state of crisis, solved by the immemorial expedient of draining the country through ever-increasing taxation. 

Colbert, chief advisor of Louis XIV, was one of the early modern statists. He believed that government regulations can create national prosperity and that higher tax revenues can only be obtained from the country's "economic growth"; so he devoted himself to seeking a "general increase in wealth by the encouragement of industry." The encouragement consisted of imposing countless government controls  and minute regulations that choked business activity; the result was a dismal business failure. 

Colbert was not an enemy of business; no more than is our present Administration. Colbert was eager to help fatten the sacrificial victims -- and on one historic occasion he asked a group of manufacturers what he could do for industry. A manufacturer named Legendre answered "laissez-nous faire!" ("Let us alone!"). 

Apparently, the French businessmen of the seventeenth century had more courage than their American counterparts of the twentieth, and a better understanding of economics. They knew that government "help" to business is just as disastrous as government persecution and that the only way a government can be of service to national prosperity is by keeping it's hands off. 

Would you believe this is from an L.A. Times column? It was published in 1962, written by Ayn Rand. 

What was true in the seventeenth century was true in the 18th, 19th, 20th and remains true today. Whatever prosperity the U.S. of A. has achieved in its short lifespan has been in spite of the government, not because of it. Though there are myriad examples of "government help" I just want to mention one item to be watching for: The aftermath of the bailout/stimulus spending.

Over a trillion unproduced dollars have been created out of thin air in order to save institutions that are too big to fail. In conjunction with this "salvation," another trillion of "stimulus" has been created in order to keep the people working. The inevitable result of this action will be inflation and even though the Fed will attempt to forestall it, significant inflation will come. In fact, the first harbinger has already arrived and you can see it in the "good news" on Wall Street. 

Here's how it works: At the moment the bogus money is created out of thin air, it has the same purchasing power as the money that is already in circulation. This means that the biggest beneficiary of the phony money will be whomever gets to use it first. Wall Street and the bankers are very close to the top of the feeding chain so they'll get to take advantage of the funny money at full value, or near full value which means that the "fat cats" literally get the fattest prime cuts of the new money. But as this uncapitalized cash begins to trickle down through our economy, inflation begins to take its toll  because bad money (meaning money that is worth less) drives out the good money (capitalized money). 

And who gets stuck holding the worth-less money? You guessed it. . . we, the people. You don't have to believe me -- in fact, I want you to prove me wrong. Here's how to do it: Make some notes about pricing on a couple of dozen of your most commonly purchased items -- fuel, utilities, groceries, clothes -- whatever you think you need in life. Watch as the prices of these items climb. Your paycheck will increase too ( as will your taxes) but it will rise after your expenses rise, not before. In other words, we, the working people get caught with the worth-less money.  Compare your commodity notes in January 2011 and January 2012 and you'll see a significant erosion of the value of your dollar. Usually, this happens so slowly we don't even notice the robbery that's taking place but sometimes it's like an explosion. Either way, as the money inflates, the gap between the Wall Street "haves" and the Main street "have nots" will grow larger and larger. Count on it. As this government assistance progresses you can count on greedy capitalism getting the blame for "oppressing" the poor as the gap grows ever wider. Less prosperity, a bigger difference between the haves and have nots, and the government will say once again: "Hi, I'm here to help."  

That's just one reason why we should be collectively shouting: Leave us alone!

Now THAT is some serious job creation!

Well, it looks like I've been misguided in my disagreement with the socialist health care system that's being crammed down our throats. I should have thought of this before but I must have gotten caught up in the excitement that goes with having the IRS manage my health care (don't believe me? just read the bill and you'll see how much of the proposed health care system is actually managed by the IRS!). After regaining my composure, I've decided that I can live with that minor infringement because the collective health care system will create jobs. Lots of jobs. And we need jobs, right? Here's how it works:

According to the Adam Smith Institute, in the U.K., as of August 2009 the 6th largest employer in the world is the National Health Service - Great Britain's socialist health care provider. Their 1.3 million employees ranks them right up there with China's utility service (1.5 million), China's petroleum interests (1.6m) and China's army (1.6m).   1.3 million employees taking care of 62 million people. That's one health care worker for every 48 or so people. (Apparently it's still not enough since so many Brits choose to go out of country for health services). A similar ratio here in the U.S. of A. (or will we become the USSA?) works out to nearly 6.4 million jobs!  How could I have been so blind not to see the huge benefits for this socialized health care program? Why haven't Reid and Pelosi trumpeted this jobs bonanza? Don't they realize that with the stroke of a pen (along with some serious mangling of the constitution) they're creating over 3 times as many jobs as the world's biggest employer (Wal-Mart 2.1m).  

Just imagine . . . 6.4 million health care workers with the compassion of the IRS and the enthusiasm of the USPS.  It's time for my nightly gram of soma. 

Why the global warming debate matters.

I understand it if your eyes glaze over whenever you hear the term "anthropogenic global warming."  Only geeks and scientists spend time delving into the nuances of solar cycles, CO2, ice cores and the like. But here's why you need to at least a little bit about what's going on.

First, you want to follow the money (hint - look hereand here for examples). But this is just the tip of the iceberg (it's not the melting kind). For example, George Soros wants to get the International Monetary Fund involved. Then, there's a queue of nationswhich want to shake out a few more billions.  But these funds pale in the face of carbon cap & trade schemes which have already fattened Al Gore's coffers.

Keep these in mind the next time someone tries to tell you that skeptics and deniers are "in the tank" for big oil. Big oil has invested a paltry few million for research but if you dig a little further I think you'll find that, like many big corporate entities, they sprinkle a little on both sides in order to have friends in high places no matter who prevails. They're not ideological, just fiscally prudent.

But wait, there's more! Money isn't the sole reason scientists would sell out. Most would be offended if they were even suspected of selling out so cheaply. But give them access to power and now you have a recipe for compliance. If the U.N. prevails in this debate then they get to become the high priest of the world and the scientists get to be bishops. I can't totally blame them for not recognizing the path they're on since they study science instead of humanity.  Many have even convinced themselves that a trace gas like CO2 is enough to force the climate to change which just makes them even more useful as pawns in the hands of the power brokers. 

The bottom line: The earth may or may not warm but it will do so in spite of, not because of mankind (cooling is more likely and far more deadly). But when a world government tries to reduce everyone to the lowest common denominator, the suffering of the people is guaranteed, rain or shine, hot or cold. That's one thing that is "settled science" throughout history. 

Are you smarter than a 6th grader?

Are you smarter than a 6th grader?

Peter, a 6th grader, with the help of his dad, scientifically demonstrates a major problem with our current temperature data collection system. Worth noting: Peter follows scientific protocol in that he explains his sources, and how he arrives at conclusions. Perhaps the CRU can take some lessons from him.

All we need now is some information about which temp sites are being used in the warming alarmists calculations. For more info, visit WattsUpWithThat.

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Climate Simplified

Climate Simplified

We plumbers know that in order to solve a complex problem it needs to be broken down into more clearly delineated steps. Example: 

"I don't have hot water" will start a list of questions. . . is this problem every where or just in one faucet? When was the last time you had this problem? Electric, or gas? Circulator? Have you paid your utility bill. . . .you get the idea. Perhaps we can break down the human induced global warming conundrum into simpler, more digestible bites. 

• World temperature is complicated. If we're going to get good answers we need good data, right? And the more questionable the data, the less confidence we have in the answer, right? So, the fact is, nobody really knows what the Earth's temperature is. The job of sorting out thousands of data sources, some less reliable than others is just as much of an art as it is a science. If you want to see some of the artist's work, check out HARRY_README.TXT file. Mind you, I'm not throwing rocks at the programmer of the temperature calculating program. I've done enough programming of my own to know what  nightmare it can be to try to match up data from many differing and evolving sources. My main point here is to observe that there is an error factor in the data that climatologists are using when they scream "the Earth is warming, the Earth is warming!" How big is the fudge factor?  I don't know. Pick a number 1or 2 degrees? 5 degrees? I think your guess is as good as theirs but after all the data manipulations they're claiming a fudge factor of about 0.18 degree.  (I'm really trying to keep a straight face here. Don't make me giggle!)
• Just how big is the so called 'warming trend?'  Using this mishmash of data, the UN climate folks are claiming that the earth has warmed about 0.74 of a degree (give or take 0.18, or a fudge factor of over 24%). Whatever. So, let's stipulate that they're right. 0.74 degrees is supposed to be 57.88 degrees(c). So as a percentage, our temp would be just a shade over 1% higher over the past century. Hold that thought.
• Carbon (Atomic #6) is supposed to be the 6th most plentiful element in the universe. If you believe in the law of conservation of matter then you know that we have the same amount of carbon now as we've ever had. That's why we refer to "releasing carbon" rather than "creating carbon" when you fire up that SuperDuty diesel of yours. Carbon dioxide is great plant food and it's even very important to proper respiration in humans. It's considered to be a green house gas because it allows sunshine in but reflects radiated heat -- meaning that it helps our planet capture and use solar energy.  Carbon is said to make up about 0.038% of our atmosphere.Mankind is supposed to be responsible for about 3% of that 1/3% so figure our contribution to the pie to be somewhere around 0.0011% of the total greenhouse gases. But let's put that carbon foot print into perspective. . . 
• Water vapor is not counted as a greenhouse gas but in fact, it makes up about 95% of the whole greenhouse effect. I'm told the oceans evaporate about 92 quadrillion gallons a year (please don't tell congress about quadrillions!  In 2050 that will be our new budget!!). My calculator spits and sputters but I think what this means is that our supposed 28 billion tons of carbon is being dumped into almost 35 trillion tons of water vapor. In other words, try as we might, the best we can do is to spew less than one tenth of one percent of the total greenhouse gasses into the atmosphere. Makes you feel pretty insignificant huh?

So, here's my question: If we nasty humans are only capable of contributing less than a tenth of a percent of those nasty greenhouse gasses to the atmosphere is it really reasonable to give us credit/blame for the whole global warming issue (if it exists at all?). Let's be reasonable. Perhaps there's another reason the earth is warming? The Arctic icecap thawed a hundred years ago. Where were we then? What about the sun?  I'm just saying that there's a good reason to be skeptical about what the U.N. is trying to foist on the world. But that's a whole other entry. To be continued?

 

Victory Garden Update II

Victory Garden Update II

We're gonna starve.

Yep, that's the prognosis. Getting a suburban garden to produce a meaningful amount of grub is just plain daunting. Perhaps it would be different without work, soccer, school and every other distraction you can imagine ('09 will go down as our worst year for distractions, that's for sure).

This is not to say that the garden isn't valuable. This experiment is an excellent way to observe how lifestyle choices affect our economy and ecology. Rather than get my hands dirty in the soil, I pursue other, more profitable work. This is the division of labor which Adam Smith refers to. But if the economic bubble bursts, our household will face a transition to different sorts of work, part of which will include more gardening. It's unrealistic to think that the garden would be enough but if the distribution system is struggling, it's very likely that a garden's return on investment will be significant.

I just hope the distribution system doesn't break too badly!

How's that Obama thing working out for you?

As you may know, I wanted to give this president the benefit of a doubt. It is beginning to look like I was being more charitable than many who succumbed to his smooth talk only to be disappointed by 'The One'. The fact is: Mr. Obama is a one term president. I suspect he will make Jimmy Carter look good (I voted for Carter, which then led to my entry into the conservative politics game).

Please understand: Mr. Obama will not be ousted because of his skin pigment. He will be ousted because of his poor leadership,  leftist ideology, his "politics as usual," and because he is just plain out of touch with the majority of the U.S. population (before you retort with "He won the election" remember that he ran the best presidential campaign in history against the worst presidential campaign in history. This doesn't mean he was elected because he was a better choice. He simply played the game better -- sort of like how MS Windows became the ubiquitous operating system of the nation).

I don't consider Mr. Obama to be evil any more than I consider FD Roosevelt to be evil. FDR had good intentions when he tried to manhandle the economy by controlling prices, wages and production. But his policies ended up destroying wheat in one part of the country while other parts of the country had food shortages. Good intentions with an evil outcome.

Which brings us to this current mess: We're still trying to recover from FDR's socialist security program which spawned medicare which spawned medicaid which spawned subsidized drugs and etc. And now, the D's are frantically trying to pass another health care power grab in a well intentioned but ignorant attempt to fix the problem spawned by the previous socialist policies. As long as we're on this path, the fixing will never end. I can't wait to see the economic power house created by a 70% income tax!

Back in the 1930's and 1940's there was an economist who predicted the outcome of FDR's policies. His predictions will also apply to the outcome of Mr. Obama's and the Democrat party policies. His name is F. A. Hayek and his seminal work is "The Road To Serfdom," first published in the U.S. in 1944. His book is fairly heavy reading but it is filled with quotable paragraphs. Here's an excerpt which demonstrates the futility of the path our Democrat leadership is attempting to foist upon us:

"Once government has embarked upon planning for the sake of justice it cannot refuse responsibility for anybody's fate or position. In a planned society, we shall all know that we are better or worse off than others, not because of circumstances which nobody controls, and which it is impossible to foresee with certainty, but because some authority wills it. And all our efforts directed toward improving our position will have to aim, not at foreseeing and preparing as well as we can for the circumstances over which we have no control, but at influencing in our favor the authority which has all the power."

What Hayek figured out is that the path of planning has only one possible route to take: Planning leads to totalitarianism. It's really simple to understand. Let's use the health care debacle as an example: A government plans to cover the entire population with a health insurance program. If the government allows people to choose which program to sign on to, there will inevitably be some who choose 'none of the above'. Most likely, those who choose 'none of the above' will be currently healthy, not needing health care at the moment. This causes problems to the plan because without healthy people in the pool the risk factors increase for the rest of the pool, driving up the cost of insurance.

To remedy the disparity, the planners pass a law requiring that everybody buy into a policy. But another problem pops up: Now that this new group is in the pool, they will begin to use more health care resources. "After all, I'm paying for it, I may as well use it." This makes perfect sense doesn't it? But with more people seeking services the planners are now faced with a shortage of health care providers. More laws, more policies are required in order to encourage or goad more people to become providers. The cost of doing all this recruiting and incentives pushes the cost of health care higher. Keep in mind that in financial terms, health care providers fall more into the expense category than in the asset category, meaning that health care providers don't produce much. Moving producers into health care reduces the overall production capacity, a cost that it much more difficult to calculate. More planning, more control is required to make the plan work and then, one day, we begin to realize that we are no longer in charge of the government, it is in charge of us.

The "free market" solution is to allow society to determine what it values most. We will vote with our pocket books and accept the outcome. The market doesn't work because it is morally superior to planning. It works because it pits individual greed and desires against one another, achieving a better equilibrium, a better distribution of resources. It's not perfect but personally, I prefer an imperfect free market over totalitarianism.  Planning seeks to achieve equality among the people but the only way to achieve equality is to lower the standards of all to the lowest common denominator. I prefer to allow those who rise to the top to enjoy their success, knowing that those who linger at the "bottom" are still better off than they would be in an egalitarian society. The debate, it seems, will never end.