Saturday, February 28, 2009


the Econ Review

On reviewing this image from a link in the previous blog entry, I noted something. The author has noted the date of freezing wages and prices with a red bar. Look before the preceding point and see if you can find March, 1964. I know you can. That is the point where the minor dance of values makes an abrupt first turn up. It happened almost immediately on the end of anchored currency. There was an instinctual reaction in the Market. People knew even if they didn't realize they knew what was happening to them.

This illustration is borrowed from the Econ Review, a publication of Professor of economics William R. Parke at the University of North Carolina, Chapel Hill. I hope he will forgive me for this uncleared use of his work.

On the Law

The United States of America. Had a nice ring to it...
It was a unique place. It was a place where the law applied equally to all ... Or at least it was supposed to.
Those men who met in Philadelphia in 1788* made us a republic (not a democracy)where no man was above the law;
and the purpose of the Constitution was to ensure that the government serve us, and not we it.
The city/district is now occupied by people who not just believe that we are indentured to the Federal Government but truly believe that laws do not apply to themselves. They have gotten away with ignoring the 10th Amendment to the US Constitution for a long time.. They are currently trying to circumvent the First and Second Amendments. Through inadequate government schooling and illegal immigration by design - stuffing the ballot box with ignorant voters - they may well accomplish their goal. But there are other laws that will not so easily be thwarted. There are laws of nature and nature's God that are immutable. Just as the Law of Gravity, and Newton's Laws will not be violated, the Laws of Economics are observations of Nature and not creations of a committee or government.
One may think that Obama is now overturning the Laws of Economics, it is not so. He may believe it if he likes, but he is merely diverting them temporarily from which they will spring back with full equalization like a seventh grade algebra problem ... Both sides must match. In some way shape or form there must be balance. It may not be a return quid pro ante, but it will satisfy the equality.

There is precedent. I am neither a fan of Jimmy Carter (despite having been to his home before he was President) nor an enemy of Richard Nixon (my first Presidential vote). But sometimes one must call a spade a spade. Jimmy Carter gets the blame for the massive inflation of the early 1970s, but the truth is that he just had the misfortune to be holding the position when the dam burst. On March 25, 1964, President Lyndon Johnson through Treasury Secretary C. Douglas Dillon (childhood friend of the Rockefeller boys) demonetized the Dollar; releasing it from being bound to scarce Silver starting us on the road to inflation. Nixon then compounded the error through two actions. Because Charles De Gaulle saw our Gold prices as the bargain they were and made a run on redeeming his holdings in our currency (remember, this despite still owing us a tremendous amount of war debt). Nixon reneged on our Gold Standard - Totally freeing us of any real limit on our monetary supply. And when the inevitable resulting inflation hit, he did a very Liberal and un-Conservative thing. He froze wages and prices. It was ostensibly a ninety-day action, but Nixon had other, frankly trivial**, political problems and the ninety days continued for one thousand days through the term of Gerald Ford, and into the term of poor Jimmy Carter who thought (and apparently still thinks) that good intentions are more important than rational thought. Jimmy thawed the freeze, and the rest was inevitable, as the laws of Economics rebalanced the equation. President Carter was followed by President Ronald Reagan who could truly do little but improve the situation. The tools were all there. The economic equation was rebalanced albeit with terrible interest rates. Reagan chose a Chairman of the Governors of the Federal Reserve bank, Alan Greenspan, who cautiously lowered the interest rates a little at a time over the next 18 1/2 years so as not to jar the economy again with a sudden rush of inflation. But he was aided by restraint on the part of the US Congress and/or President through that time. For most of that time, it was a stalemate with one or the other being controlled by a fiscally conservative party. In the last quarter of the George W. Bush presidency, the Congress was taken over by very liberal Democrats, and since President Bush himself was no fiscal conservative, and since both Greenspan and his tactic of reducing the interest rate to control money flow were gone, there was no check to the results of Government tampering with the Laws of Economics.
Just like Doctor Elisio Colli who treated my Penicillin reaction in the days before the allergy was widely known with another shot of Penicillin, our Government has tried to cure the economic ills of our country caused by tampering with and restraining the Free Market by tampering more with and restraining more the Free Market. They do not understand that I, and You are the Free Market.

If we are not free, we are by definition slaves.

There is a clique in Washington right now, who believe that they can comfortably ignore the Laws of Economics due to having seduced a bunch of willing slaves, many even the descendants of slaves whose ancestors cherished their newly granted freedom in the days after the Civil War. But that does not mean that Economics is moot.
It does not mean the the Law of Supply and Demand is no longer valid. It does not mean that the other Laws of Economics have been repealed. And it most assuredly does not mean that any adjustment on one side of the equation will not be met with an equal and opposite reaction on the opposite side of the equation. So, Nancy, Harry, Barack, and even you, Barney Frank, whatever yoke you put on us will not fix the Economy -- not because of anything we chose to do to thwart you. It will not work because you cannot fix freedom by control.

* Yes, it was 1788. The true Bi-Centennial was 1988, not 1976. But that was just one more political distortion from those in Washington who scorn the Constitution that they have sworn to uphold. Treason in Washington, DC is a way of life.
** Trivial in that the Watergate scandal was typical behavior of both parties prior to that time, and if the actions of Al Franken are any indication, still are. Just like the bias of the Liberal Press in the 2008 elections, the anti-Nixon bias of the 1970s Liberal Press foreswore accuracy and truth for political reasons.

John Galt, Where are you when we need you?

Friday, February 27, 2009

Insufficiency Is Not Economy

A thought came to me as I dressed this morning.In true John Galt style, I work a simple honest workman's job, but one that requires me to wear a uniform. This morning I put on one of my newer uniform shirts. The manufacturer and my employer saved money by the imitation economy of making the shirt-tails an inch or so shorter than they used to be. This has the result of afflicting me with maintenance-man syndrome. Or at least it would if I didn't wear a tee shirt and maybe if I had an ass.

But as a country, we no longer know the difference between quantity and quality, and especially, we no longer know the difference between price and value. This accounts for the success of WalMart and the nation of the People's Republic of China. It also accounts to a large extent for our current economic problems and unemployment.

In keeping with this trend, you can expect Mr. Obama to take one more office of the US Department of Commerce (along with the Census)and put it directly under the White House. The National Bureau of Standards will be made a direct report to the White House and Rahm Emmanuel. The standards of weight volume and distance will be be adjusted so that we will produce more. Where currently we produce a million gallons of orange juice in a given time period, now we will be able to produce 1.5 million gallons. The textile industry through no more plants will be able to produce the number of yards of fabric that it produced in 1960. There is currently one small problem, New York will be more miles away from Washington, DC, but a blue ribbon panel of Chicago Democratic Machine members is working on that problem and expects to have it worked out during the second or third terms.

A similar adjustment is planned for the value of the dollar.

Monday, February 23, 2009


ABC News 07:06PM 2/23/09

Charles Gibson to female reporter: "It's almost like you're saying nationalization [of the banks] would not be a good thing."

Boil the Frog Slowly

Nations are not ruined by one act of violence, but quite often, gradually, and almost imperceptibly, by the depreciation of their currency, through excessive quantity.

Nicolas Copernicus 1525

Thursday, February 19, 2009

Open response to a self-congratulatory request for donations from the AARP

On Thursday 19 February 2009 10:47:17 am Barry Jackson, AARP wrote:
> On Tuesday President Obama signed legislation that
> will provide some crucial relief for older Americans.

Hidden in the massive Government spending bill which is euphemistically called a recovery bill is a seed. That seed is a little discussed medical records system. That seed will grow into a system of evaluating the cost/benefit analysis of medical treatment that will ultimately deny older people, the ones that AARP is supposed to represent, health care that would save their lives.

Thanks, AARP, for helping President Obama throw us older Americans under the bus.

Tuesday, February 17, 2009

Greenland Ranch

Greenland Ranch

Originally uploaded by luxomni
No politics or ironic meaning, just a picture that I was pleased with.

Monday, February 16, 2009

Lest We Forget:

One of the rights which the freeman has always guarded with most jealous care is that of enjoying the rewards of his own industry. Realizing the power to tax is the power to destroy, and that the power to take a certain amount of property or of income is only another way of saying that for a certain proportion of his time a citizen must work for the government, authority to impose a tax upon the people must be carefully guarded.... It condemns the citizen to servitude.
President Calvin Coolidge, 1924

Wednesday, February 11, 2009

The End of the World ... And Where was the AARP?

I have been predicting this for a long time, but frankly, I thought that there would be discussion first and outrage. But they swept it in with the "Economic Stimulus" Bill and no one looked any further than the title. We have just killed our medical system off in the United States, and with it our Senior Citizens en mass. Keeping them alive is just too expensive. Why should I care? I won't be one for a few years yet.

Maybe we actually ought to read this evil, evil law. H.R. 1 EH, (pdf version)

But I being lazy and pressed for time (my flight leaves for Atlanta from Denver in a mere Four hours) have to get this out any way I can. So I will excerpt the very best article on this subject by Betsy McCaughey in Bloomberg.

There are three main problems:
1) The national treatment registry, which in addition to keeping records approves treatment.
One new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective. The goal is to reduce costs and “guide” your doctor’s decisions (pgs. 442, 446).

2) Eliminating experimental treatments as uneconomical. (Where do they think new treatments come from? The Government?
The stimulus bill does that, and calls it the Federal Coordinating Council for Comparative Effectiveness Research (190-192). The goal, Daschle’s book explained, is to slow the development and use of new medications and technologies because they are driving up costs. He praises Europeans for being more willing to accept “hopeless diagnoses” and “forgo experimental treatments,” and he chastises Americans for expecting too much from the health-care system.
3) Limiting care for elders as uneconomical.Daschle says health-care reform “will not be pain free.” Seniors should be more accepting of the conditions that come with age instead of treating them. That means the elderly will bear the brunt.
Medicare now pays for treatments deemed safe and effective. The stimulus bill would change that and apply a cost- effectiveness standard set by the Federal Council (464).

More from Atlanta.

Tuesday, February 10, 2009

Thanks, Glenn

A very interesting presentation and graphic, but read my caveat afterward.

Glenn refers to Richard Nixon demonetizing* the Dollar, and then the Great Society taking off. Actually, Glenn has his order wrong. Lyndon Johnson was the President responsible for both the Great Society and demonetizing the Dollar. President Nixon removed the backing of international redemption of the Dollar in gold after Charles de Gaulle of France realizing the gold was undervalued began a run on it**. Ironically, the die for runaway inflation was cast several years earlier in March of 1964 by C. Douglas Dillon, Secretary of the Treasury under LBJ. It was the demonitization of silver that allowed the runaway printing of Dollar notes as they were already not redeemable in Gold, merely Silver. And as I have pointed out in previous editions of this blog, a Silver Certificate was a reciept or certification of an amount of Silver. That formed a natural drag on the amount of currency in circulation. The Federal Reserve Note has no such limitation - hence the problem.

Alright, that puts me firmly in the column for metal backed money, right? Not entirely. Previous Depressions (Yes, there were Depression prior to 1929) were caused by the lack of circulating currency, not by lack of wealth. Hoarding, if you will. The Government or someone needed to insert some liquidity into the economy. This was solved by several kinds of unique, not as easily hoarded currency - The United States Note and the Federal Reserve Note. A note is a loan backed by the assets of the issuing agency.
They were uniquely marked and easily distinguishable. They could be removed from circulation when there was excess liquidity. The amount in circulation could be controlled. That used to be what we did in the days when the citizens knew and understood the basic laws of Economics. Now we have had two Presidents in a row who believed the laws of Economics were just suggestions, and a population that believes they can achieve wealth by only destroying someone else's wealth.

* Does anybody else see the similarity between 'demonetizing' and 'demonizing'?
** Despite the fact that they never repaid their war debt from World War II. Always the double standard.


Mother told me avoid 'ultimate' words. You know, words like all, everyone, never, no-one, and always. These words will get you into trouble, as one exception will make will make your statement invalid. Not 'all', Newsweek, you missed me - I'm not a Socialist.

Saturday, February 7, 2009

Pass the Stimulus Package Now Or ...

"Pass the stimulus now or we may never recover". Barack H. Obama
We may never have another chance.

It it just me? That talk radio guys were all over that one on Friday, but every one of them missed an analogy. I know where I have heard that tone and urgency before. I know exactly where I was sitting when someone spoke at me with that now or never urgency. It was in the clutches of a timeshare salesperson. Don't think it through. I have given you all the information. Just sign on the dotted line. "You will never have this opportunity again."

Nevermind that the immediate economic stimulus won't hit for nearly two years and will cost forever. Nevermind that the stimulus is targeted at benefits for the various (nefarious) Government agencies.

Vote now. Vote now! VOTE NOW! VOTE NO.

Thursday, February 5, 2009

CEO Salary Limits

For once I disagree with Neal Boortz and agree with Barack Obama! It must be the end of the world. Lions will lie down with lambs. The sky will open up and we have to be up to at least the sixth seal.

Obama wants to limit the salaries of CEO receiving bail out money to a mere $400,000 per year. That is the least that should be done. I say limit their meeting expenses and make every flight on the old corporate Gulfstream require prior approval from the GAO.

People, including Boortz, tend to forget that these are not successful CEOs that we are bailing out. These are gamblers who lost.

You don't think that you can work for just $400,000 a year? Don't take the bailout. If you take my money, it should come with conditions that you use it responsibly.

Wednesday, February 4, 2009

Some People Are Above Taxes

Tom Daschle has withdrawn from consideration as Cabinet Secretary of Health and Human Services because of controversy about not declaring all his income (and some imputed income from limo rides). Daschle has a history of being a proponent of confiscatory taxation and redistribution of the fruits of our labor.

Timothy Geithner
is our new Secretary of the Treasury. He is the man to whom your taxes flow. He was previously the head of the New York Branch of the Federal Reserve Bank. But prior to that he worked for the International Monetary Fund. You know he had 'some tax problems' that troubled his confirmation. Did you know what they were? He did not pay taxes on his employment with the IMF ... even though they had given him the money to pay the taxes with. Even had he paid the taxes I do not understand how that itself would not be additional income. Does your employer pay your taxes for you? Could they do it and not have it be considered income? No to both of those questions.

And I am supposed to send him 28% of my income? Taxes are just for the little man - like you, and me.

Armed Robbery By Proxy

"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others."

Ayn Rand


The purpose of our Government as proposed by our founding fathers was not keep our banks solvent. In fact, our founding fathers opposed having any kind of National Bank, feeling that the control of our money was the control of our lives.
Nor was the purpose of our Government the prevention of poverty. The 'welfare' of general welfare is that which benefits us all, not that which benefits individuals. You do not want to be poor. Live right. This is also applicable to bailing out companies. Waving the truth that bailing out a company is wrong to begin with, bailing out one company and not its competitor is even worse. Do not reward a company for its bad choices and do not reward a person for bad life choices.
The Constitutional purpose of Government is certainly not to provide cheap medical care. Medical car is often the product of sowing wild oats and praying for crop failure. Enslaving the taxpayers and the medical community was never a goal of our Constitution.
No, the purpose of our Government is to protect us from enemies, foreign and domestic. A thief would be our enemy. A politician using my money to buy his votes is a simple thief. And since taxes are collected under threat of violence, that theft is armed robbery.

Every national elected position is sworn in with a promise to 'Protect and Defend the Constitution'. Most politicians have little or no intent to do that. There is a word for that - treason. Why is this the least prosecuted crime in the whole Federal Government? It is because integrity is rarer even than honesty. And neither are appreciated virtues in our society.

Sunday, February 1, 2009

Open Note to Joseph Lowery

Andersonville National Cemetery

On this the first day of Black History Month, I would like to remind you that you do not have to wait for "White to do right". Many have paid a higher price than just the ultimate price to set your ancestors free. These men did more than just die for the end of slavery, they suffered mightily for it.

Have you ever thought to make an appearance here and thank them?