Two Legs Good, Four Legs Bad

"The way to crush the bourgeois is to grind them between the millstones of taxation and inflation."

Vladimir Illyich Ulyanov (AKA Nicholai Lenin) 
1870 - 1924

First, we have to define a couple of words.

The word bourgeois, for Lenin, was to help him define society into three players - the workers, the exploiters and HIM.

An exploitative bourgeois did not simply describe the fat, mean, selfish, sloppy, gluttonous man, with money dropping from his pockets and blood dripping from the club he used to keep everyone in his factory working 19 hours a day.  The bourgeois also included the single shop keeper, a baker, or accountant, or business manager.

(The other two players were proletariats, or workers, and HIM.  If you were like HIM, it was important to do everything he said.  One had to truly be like HIM.  Then you could join his party...  In the end, this group really was the exploitative fat, mean, selfish, sloppy and gluttonous, which Orwell characterized in his book Animal Farm as the pigs.)

Second, we need to define inflation.

Inflation is gubment policy!  And so for a number of reasons, the biggest being that gubment derives the most benefit from it. 

How?  First and foremost, the currency becomes further devalued (sound familiar?) such that the national debt is easier to pay off.  The national debt is BORROWED and as the currency becomes cheaper it is easier to keep the scheme going.  While this seems like it will end in economic doom, this has been the gubment's policy for decades.  Very Keynesian, you know...

Second, inflation gives the APPEARANCE of economic "growth."  Economic growth does not necessarily mean economic health!  Was wealth really being accumulated during the real estate boom?  No you say?  You mean that wealth wasn't health?  Those soaring "values" did improve the gubment coffers though!  Didn't it?  Sales taxes, property taxes - you name it.  Why, they needed to hire more people to handle it all! GROWTH!  Which, by the way, builds in future taxes, that do not go away when the "wealth" evaporates.

Third, inflation is a built-in, hidden tax.  Notice how 45% of our family budgets (energy and food) is mysteriously excluded from the gubment's inflation statistic?  Is this a mere oversight?  The gubment says these two things are very "volatile," and therefore not accurate indicators.  What thinkest you?  When the basic family budget is strained because of those two things that really aren't' getting more expensive, don't you know, it is NOT inflation.  Pay no attention to the man behind the curtain...

So, inflation allows the spending scheme to stay afloat, our economy is getting "bigger," and, as people are pushed into higher tax brackets, more taxes are collected without passing new tax laws!  How cool is that!

So, when you hear how we must "PAY" for ever-burgeoning gubment, and borrowing for that can ONLY come from TAXES, remember, remember, remember, brothers and sisters, Vlad's statement - THAT IS HOW YOU CRUSH AND TAKE OVER.

And control.  Two legs good, four legs bad.

VOTE SMART.

Poverty Or Ease?

"I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it."

Benjamin Franklin (1705 - 1790)

Those sound like the words of an adult. They are the words of a leader.

Why would people want to be in an "easy" poverty? What is easy about that?

And why would a leader want people to be in an "easy" poverty? Where is that leading them? It is leading them to a controlled corral. And where is that?

Franklin viewed every individual as a potential entrepreneur, when properly encouraged!

And where does that start? In his view, education.

But Franklin did not have a "formal" education as we would understand it now. How did he get educated?

He educated himself by involving himself in many things. And apprenticing in what interested him the most - like printing. He apprenticed to his brother, James.

But, at 15, and a mere apprentice, Ben wanted to write for the paper. How could this be done by a mere apprentice? Writing was something that brother James would never let him do.

So he began writing letters to the editor at night, signing them the name of a fictional widow of his invention, "Silence Dogood." He slipped the letters under the door to the paper at night. They were printed and became an instant hit. Everyone wanted to know who the widow was! A year or so later, he admitted to writing them. His brother was very jealous at all the attention everyone paid to the "precocious and funny" Ben.

And thus it began for Ben. This style was continued later in life with his "Poor Richard's Almanac."

Ben got himself out of poverty by becoming an all around person!

So, in our fast, tedious, difficult society, how do we lead people out of poverty, especially when so many want to sit on the sofa, as they say, and simply receive a check?

Remember, that check does not get them out of poverty! It simply makes it easier to stay in it! As Franklin said.

Activities that are subsidized (financed essentially) grow. Activities that are taxed do not grow.

As our gubment goes about making life more and more difficult, more and more tedious, condemning, as it were, and driving people out of or away from entrepreneurship, Franklin would do it differently.

He would make conditions leading to entrepreneurship easier, thus leading those away from poverty as they are attracted to a better life.

What drives the poor out of poverty? The poor themselves! As they see what is available to them.

Franklin then went about trying to create a society, and an economics therein, that was conducive to and encouraging toward individual development, individual freedoms and liberty, and individual progress.

WE FIND OURSELVES AT A CROSSROADS - DO WE WANT TO GET BACK TO INDIVIDUAL FREEDOM AND LIBERTY OR FURTHER AWAY TOWARD DIFFICULTY AND TEDIOUSNESS? FOR CERTAINLY, WE ARE MOVING RAPIDLY TOWARD THE LATTER.

True Witness or False Witness?

"It should be noted that people in the free market rarely bare false witness; integrity is the rule. The morning milk, phone calls, planes the airlines buy, autos by the millions - no one could list the instances - are as represented. We have daily, eloquent, enormous testimony that the Ten Commandments can be and are observed by fallible human beings. Contemporary politics is the most glaring of all exceptions.

Leonard E. Read (1898 - 1983)

And all the recent talk of civility and not attacking the person but engaging the idea, is all so much fluff! Those who talk about "civility" are the most "glaring exceptions" to the body of those trying to conform themselves to the Ten Commandments!

But what's this about false witness in the free market place?

He is right! There is none!

Well, in the FREE market place that is. The controlled, contrived, compelled market place is FULL, FULL, FULL of false witness!

Such control, contrivance and compulsion is the source of subsidy, and skews the market toward things that are not efficient or profitably viable. Green energy comes to mind. Things that are subsidized for decades and yet still cannot be profitable are not good uses of market efforts. They represent a false witness because the market is controlled, contrived or compelled.

Some forms of "subsidy" really are not. Encouraging home ownership by offering a mortgage interest tax write off is not really a subsidy. Encouraging oil development in certain locations by offering incentives to do so is not really a subsidy. Encouraging the planting of one crop over another by offering incentives to do so is not really a subsidy. Encouraging someone not to work by offering incentives not to do so is not really a subsidy.

But all of these activities skew the market that would otherwise develop more efficiently and profitably. This includes not only things - such as goods and services - but also PEOPLE!

But, under normal conditions, people will respond with their money to something in which they find integrity. And profits will always result. The so-called Better Mousetrap. Money will always flow toward that which is most desired.

And that shows integrity and is TRUE witness!

When gubment money flows toward that which gubment most desires, there is always inefficiency and never profit.

And that lacks integrity and is FALSE witness!

The Swimming Pool

"Unfortunately, it is not in the power of government to make everyone more prosperous. Government can only raise the income of one person by taking from another."

Hans F. Sennholz (1922 - 2007)

Austrian-school economist Hans Sennholz understood that gubment has a lot of power.

But, as an economist, he understood that it only goes so far.

It is not powerful to take. It is powerful to be able to set the rules so that the taking can "legally" happen! Especially under the guise of "doing good."

But what happens when gubment redistributes "wealth" with impunity, penalizing those who would not want to participate but create wealth instead?

IT IS NO DIFFERENT THAN TAKING WATER OUT OF ONE END OF A SWIMMING POOL AND PUTTING IT BACK INTO THE OTHER END - OF THE SAME POOL!

• If money is taken, even if a small but ever-increasing percentage, from working people for, say, the medical care of "the elderly," (and the definition of medical care and "the elderly" changes all the time), and so much is transferred that the "program" is continually going broke, IT IS NO DIFFERENT THAN TAKING WATER OUT OF ONE END OF A SWIMMING POOL AND PUTTING IT BACK INTO THE OTHER END - OF THE SAME POOL!
• If money is taken, even if a small but ever-increasing percentage, from working people for, say, the medical care of "the poor," (and the definition of medical care and "the poor" changes all the time), and so much is transferred that the "program" is continually going broke, IT IS NO DIFFERENT THAN TAKING WATER OUT OF ONE END OF A SWIMMING POOL AND PUTTING IT BACK INTO THE OTHER END - OF THE SAME POOL!
• If money is taken, even if a small but ever-increasing percentage, from working people for, say, their "security" in "supplementing" their "retirement," (and the definition of how this money is set aside, "invested," what and who it is spent on, and and all the rules implemented to get the "program" started are broken, and what "retirement" means, changes all the time), and so much is transferred that the "program" is continually going broke, IT IS NO DIFFERENT THAN TAKING WATER OUT OF ONE END OF A SWIMMING POOL AND PUTTING IT BACK INTO THE OTHER END - OF THE SAME POOL!
• If money is taken, even if a small but ever-increasing percentage, from working people for, say, the "general welfare" of a "needing" sector of the population (and the definition of "general welfare" and the "needing" sector of the population changes all the time), and so much is transferred that this "needing" sector STAYS a "needing" sector for generations and learns to expect such monies in ever-increasing amounts, IT IS NO DIFFERENT THAN TAKING WATER OUT OF ONE END OF A SWIMMING POOL AND PUTTING IT BACK INTO THE OTHER END - OF THE SAME POOL!
• If money is taken, even if a small but time-after-time amount, from working people for, say, the "bail out" of a sector of the economy to "save the world from disaster" (and the definition of "bail out" and "disaster" changes all the time), and that transfer helps to enrich that sector at the expense of the rest of the population, IT IS NO DIFFERENT THAN TAKING WATER OUT OF ONE END OF A SWIMMING POOL AND PUTTING IT BACK INTO THE OTHER END - OF THE SAME POOL!

And all of these wondrous "programs" are scammed and scammed and scammed to the point of ridiculousness!

I could go on with the above bullets, now couldn't I!?

What we need instead is to be released and unfettered from the "wisdom" of the gubment takers so that we, as a people and creative operators can create wealth, and make the pool larger and deeper, with more and more for all.

GUBMENT DOES NOT CREATE WEALTH. GUBMENT DOES NOT ENLARGE THE POOL. GUBMENT DOES NOT MAKE THE POOL DEEPER. IF ANYTHING, IT DOES THE OPPOSITE. ONE WONDERS IF THAT IS NOT THE GOAL OF THIS CURRENT GROUP IN POWER. TO MAKE THE POOL SMALLER AND SHALLOWER, WITH MORE AND MORE PEOPLE TRYING TO SWIM IN IT?

Wealth transfer IS NO DIFFERENT THAN TAKING WATER OUT OF ONE END OF A SWIMMING POOL AND PUTTING IT BACK INTO THE OTHER END - OF THE SAME POOL!

Get real people. Vote smart.

A Better Mouse Trap 2

Remember last week's Ralph Waldo Emerson quote?

It was something like, "If you build a better mouse trap, the world will beat a path to your door."

That wasn't Emerson's real quote, as we learned.

You can read the entire, and correct, quote here.

And it is true.

What is going on in the photo?

What is the company? How do you know what the company is?

I took this photo at one of this company's two local retail establishments. This photo was taken, by me, at around 2pm. I intentionally went in there at that time to see what it was like. Why? Because I have been there just after dinner and there is a wait time to get in.

I want to ask some questions:

1. What is the company? I see no name, only a logo.
2. What is the logo saying?
3. Why are some people wearing the same blue shirts?
4. Why are there so many of those people?
5. What is that hanging around each of their necks?
6. What are all the tables and stations for?
7. The screens on the walls are not signs. They are similar to TVs. The pictures change often. Why?
8. Where are all the signs that advertise the latest sale? The percentage you can get off if you buy now? The "special" offer(s)? The latest fad product?

9. What you can't see is that there are two purchase stations in the rear, each with a line. People are buying the products!

This company does not just invent and sell better mousetraps. They sell them in a way that nobody else does. You can see the services being provided here. You can see the interactivity of customer and product. You can see the interactivity of customer and certified sales PRO. You can see the interest those certified sales PROS have for the customer.

EVERYTHING IN THIS PICTURE IS A BETTER MOUSETRAP!

You should know that both of the stores beside this one are empty. What do they sell? Each of the stores could have a marquee sign that says, "Crap-From-A-Foreign-Country-Sold-To-You-As-Local-Stuff Store."

Each has so many signs on the windows that advertise 60% OFF! and 70% OFF! that you can hardly see inside the store. No matter, you don't really need to anyway. What they sell is cheap junk. What they sell does not improve lives. What they sell is faddish and will not be used for long.

EVERYTHING IN THOSE STORES IN NOT, NOT, NOT A BETTER MOUSETRAP!

It is the same old same old. And they will be out of business soon and the next SIMILAR store will move in. You see it every day. And the windows will be blocked off and the sign above that says, "COMING SOON!"

It looks to me like a path is being beaten to this better mousetrap. This company has created its many in-demand products without gubment subsidy, without gubment demands about where they locate, without gubment demands about what kinds of people to hire or how to organize them, and without laundering money to grease local or national politicians.

Where does this company manufacture its products? Some place with comparative advantage and outside all the gubment influences mentioned above. Why? Because more can be made more cheaply and more customers can be served. The other why? Profit.

AND MORE PEOPLE ARE BUYING THE STOCK THAN SELLING. HENCE ITS PRICE IS GOING UP. WHY ARE THEY DOING THAT? TO GET IN ON THE ACTION. WHAT IS THE ACTION? PROFIT.

A Better Mouse Trap

"If a man has good corn or wood, or boards, or pigs, to sell, or can make better chairs or knives, crucibles or church organs, than anybody else, you will find a broad, hard-beaten road to his house, though it be in the woods."

Ralph Waldo Emerson (1803-1882)

That is the real quote. There is a similar one, attributed to Emerson, but probably not really said by him. It is just as descriptive, and says:

Build a better mouse trap and the world will beat a path to your door.

The mouse trap is the most oft-accepted patent request, with 4,400, more than any other product the US Patent Office has issued patents for. About 400 people still apply for a new mouse trap patent annually.

Any new mouse traps lately?

A new one was put on the market just Friday, March 16. It has sold a million units each day since.

Was it a new product? Not really. It is the third generation of a new product. The famous I-pad.

Does Apple need to have fabulous holiday sales to get its product out? Does it sell its products in discount stores? How about outlet malls? In roadside stop offs, selling them along with pecan logs? Is it sold anywhere in the woods?

No? Why not?

Because it is a product with a new idea, a new way of doing things. All of which it does very well.

It is a product in demand because it not only works, but also because it changes the way people USED to do things! It created a new paradigm!

It is truly a better mousetrap.

THIS IS FREE ENTERPRISE AT ITS BEST!

As such, people are truly beating a path to the doors of Apple locations, worldwide, to participate in what they consider to be a privilege to buy one. They will pay pretty much any price Apple decides to sell it for. Everyone wants to get into the act of owning Apple stock! Why? Because they see that more people will be buying the stock than selling it. They want to get in on the action.

When more people buy a stock than sell it, the stock price will go up. Always. And people will reap profits.

Along with Apple's profits.

Is Apple reaping windfall profits?

NO! Windfall profits are those earned when somebody or something has nothing to do with the idea, product development or product sales, yet reaps rewards. In this context these rewards can be called pure profit.

When gubment taxes and increases taxes and earns "rewards" on something toward which it has participated nothing, it is earning WINDFALL PROFITS.

You and I have to take a risk.

And when was the last time you beat down a door to buy a crucible?

Part 2 of this post will come out next week!

Necessity

"Necessity never made a good bargain."

Benjamin Franklin (1705-1790)

You ever notice that this is how gubment works?

Here is the process:

Gubment creates a disaster.

Let's take banking. It happens slowly. Centuries of successful banking practices, proven through experience and data, needed changing. It was a necessity.

First came "racial steering." Realtors and brokers could no longer steer prospective buyers to or from certain neighborhoods. Civil rights laws were "changing," crime statistics were "changing," and there was no longer a need to promote or prevent certain people to or from neighborhoods.

Of course people's attitudes had to change too, hence the steering laws. It was a necessity.

Then there was the new gubment mandate called "redlining." The gubment said you can't draw a "red line" around a neighborhood on the disadvantaged side of town and refuse to lend money to borrowers there.

But what if it's a bad risk? No problem - there will be no discrimination based on location, race or income level. It was a necessity.

And the gubment needed to help people buy houses and start businesses! Laws and agencies sprung up like a garden of flowers. For decades.

Then in the 90s it was suddenly discovered in the Constitution that housing was a right! This engendered and promoted a "national home ownership strategy," as "the American dream." And if banks didn't play right with the other kids, they would face - the gubment! It was a necessity.

(Don't get this wrong - the banks were finding plenty of opportunity here to make money, despite these non-market "techniques" they were using... and all with a wink and a nod by gubment...)

This of course all continued until recently, with a Congressman for years screaming, "We mutht pwovide houthing fow evewy perthon, no mattah what! Theah aw no banking pwoblemth! We don't need no thtinkin documentathun!" It wath a nethethity.

And the bubble eventually burst! OUT OF NECESSITY!

Was this the only financial problem gubment had created during these decades? Obviously not. It was only a part! But look at how the gubment has responded in the past few years just to this one. At every step, something had to be done out of necessity or the world would collapse.

Have we the people gotten a good bargain? I say no! Franklin would certainly say no!

Watch all the programs we will need coming up to "fix" the various messes that somehow happened while "fixing" the other messes. It will all be out of necessity and a very bad bargain.

Well, for everything but gubment.