Don’t Worry About the Debt

I had a friend over the other day. He asked me, “Hey G.C., are you worried about the national debt?” I told him, I was not. Right now the debt has not really hurt me, so why worry? “But what about when it does hurt us?” Well, old boy, at that point, what will I be able to do about it that the leaders of this fine country haven’t been able to do?

He continues, “Some are talking about the LIBOR scandal, debt-to GDP being dangerously high, coming austerity, and the need to audit the FED.”

Look, I can’t worry about all of that economic lingo. I can’t fix that myself. Hell, I can’t even understand it and if I did, I doubt Congress will do anything about it anyway.

“So what do you focus on?”

I focus on the obvious invasions to our personal liberty like that damn Chick-fil-A thing, guns rights, Obamacare, and the daily things Obama says to manipulate his base. Things I can understand, maybe have a say, and pressure Congress to fix.

“How do you do that?”

I educate myself. The Internet…YouTube…political sites. Then, you see, you get a big group together and overwhelm Congress with your outrage.

“How does that work?”

I am a student of psychology. All creatures are slaves to reinforcement. We indulge on what we like because it feels good, even if it is not good for us. That is why we smoke – cancer is in the distant future. That’s why we eat bad food – heart disease is in the distant future. The positive reinforcement outweighs the delayed punishment. Punishment has to be immediate and severe or it can’t compete. That is why addicts don’t seek help until it has all gone to hell.

“What does that have to do with Congress?”

Don’t you see? They are slaves to this as well. They are rewarded by going with the flow up there, and by not making waves they avoid anxiety. The only thing they worry about is being punished by the overwhelming, organized voice of their constituents. That is why they stopped the Internet privacy thing and why they took the 2010 midterms.

“Don’t you think the Conservatives up there get that?” “I mean, they talk about it all the time…They know they will be punished…What’s the point of continually yelling about the obvious stuff?”

Others need to be convinced as well. I am sure all the people that are convinced to vote for Obama are open to reason if we just keep yelling and yelling at them. Maybe we can change the Left.

“Really, does that work?”

No, but it seems to feel very good when I can vent it out.

“So if I understand you correctly, you focus on the obvious invasions to individual liberty, educate yourself, get others to voice your concerns, those concerns are well known by Conservatives in Congress, and they know they will be punished if they don’t do something about it.”

Exactly!

“But you won’t focus on the debt because you don’t have the capacity to understand it, haven’t organized others to challenge the Conservatives, and they will avoid it because there is no fear of constituent reprisal. They won’t have to confront the anxiety of making difficult choices or jeopardizing the positive reinforcers they are receiving because there are no immediate or severe consequences.”

Look, I am an American. We are supposed to be in debt. Everyone is in debt that I know. We all have more going out than coming in. That is what credit is all about. If we didn’t buy on credit, there would be a lot more businesses hurting. They rely on us being in debt. That is why the banks need us. They make money off of us needing debt. If we didn’t go into debt, the bankers would be worse off. They couldn’t loan us money for things. That is why we don’t make any money when we try to save. The banks don’t like it when we save. Our country runs on debt.

“But what happens when you are in too much debt… don’t you go broke and have to declare bankruptcy?”

True, but I try not to let it get that far, and hopefully the Government won’t either. I still spend like I want. I have to, to enjoy life a little because all this stress about the country gets to you. You have to have the nice things, the expensive things, to feel good, to impress others, to appease others, gosh to even deal with life.

“But if you don’t save some, you won’t be able to retire in your old age…what about your health in old age, or leaving something for your kids if you don’t have money saved?”

What am I retiring to? The way things are going, I don’t even know if Social Security or Medicare will be around so I can barely scrape by. I am not old yet. I am not sick yet. I am not thinking about my kids. I have not been punished enough yet.

“So you are a slave to reinforcement as well. Spending more than you bring in, avoiding individual austerity now, staying distracted to avoid anxiety, and counting on the Government to be there for you when you get old so you can be a slave to the very thing you hate, assuming it is still even around. Is that not the greatest jeopardy to individual liberty?”

Quite right my friend, but I would be a hypocrite to whine about the Government doing the same thing. I will wait until the country is punished severely for ignoring the debt, like everyone else.

“You’ve been messing with me, haven’t you?”

Yes, but that doesn’t change the fact that I may be a hypocrite.

Originally Published on ClashDaily.com

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B of A: $69 Billion, 0% Interest

Remember the bailout? Want to throw-up all over again? The FDIC recently released the breakdown of the $618 Billion+ payouts.

From Bob English at EconomicPolicyJournal.com, Bank of America received “a total of 1,352 issues totaling $69,205,303,031” at 0% interest. He noted that, “While several other institutions were able to take advantage of 0% rates on a portion of their debt funding (including Citibank, General Electric Capital, Goldman Sachs Group and HSBC), only Merrill Lynch & Co. was able to finance nearly all of its $19,786,359,000 in debt issued at 0%.”

And who was the big winner? “Preliminary analysis reveals it is General Electric (GE) Capital, with 4,328 issues totaling $130,850,166,935.”

 Think this is shocking? Just wait until we finally get a look at the Fed’s books, hopefully after the election. Time to read-up on Economics theory.

Read on to see “Who Got How Much.”

You can also visit the FDIC site for the actual source spreadsheet and the issuance interest rates.

Originally Published on ClashDaily.com

 

Workers of America, Unite! (In Philadelphia, August the 11th)

On August 11th in Philadelphia, union members from all over the nation will reveal “America’s Second Bill of Rights.” They have a purpose; “to counter those forces preaching austerity” by exerting pressure on both parties prior to the national conventions.

In a memo to national and international union presidents, AFL-CIO president Richard Trumka is, “encouraging union members and leaders to engage in policy discussions around the convention committees, including the Platform, Rules and Credential Committees.”

They should have less competition and distractions while they work their magic if the Dems follow Pelosi’s advice to stay home and campaign.

The Workers Stand for America site outlines their Second Bill of Rights:

  • The Right to Full Employment and a Living Wage
  • The Right to Full Participation in the Electoral Process
  • The Right to a Voice at Work
  • The Right to Quality Education
  • The Right to a Secure, Healthy Future

Curiously absent were; The Right to a Hot Mate, and The Right to Eternal Bliss in An Afterlife of Your Own Choosing.

Workers Stand for America noted FDR’s “Economic Bill of Rights,” presented during his State of the Union in 1944, was their inspiration: he laid out his vision for a postwar America, “where every American would be entitled to decent work, education, medical care and retirement security.”

 I think most of America would agree that the “Rights” proposed would be great general “Goals” for our country. There is a difference.

F.A. Hayek noted that though two men might exhibit equal effort, skill, and knowledge, “one may be a success and the other a failure” because in a free society it is the “use of particular opportunities” that determines usefulness. When living freely, payment is not to be expected because of the skill we’ve learned but rather by choices of individuals, “our skill for using it rightly.” We are not entitled to any particular position simply due to our talents. To claim that, “would mean that some agency has the right and power to place men in particular positions according to its judgment.” FDR himself proposed to exert just such a power. He recommended to Congress the adoption of a “National Service Law” that, “for the duration of the war, will prevent strikes, and, with certain appropriate exceptions, will make available for war production or any other essential services every able-bodied adult in this nation.”

 The All-Providing Government feeds you, clothes you, then owns you (and may not let the unions strike).

As Hayek continues, “All that a free society has to offer is an opportunity of searching for a suitable position, with all the attendant risk and uncertainty which such a search for a market for one’s gifts must involve.” This founding principle of our country does not mean freedom will be easy, and many resent that.

Regarding the other proposed “Rights.” The right to full participation in the electoral process is already guaranteed to all U.S. citizens. There is a catch, however, you must actually be a U.S. Citizen.

The right to a voice at work sounds fine, unless that is code for preventing their voices to be heard when they vote freely to not be coerced by a union they don’t want to join.

They propose the right to a quality and “affordable” education from pre-kindergarten through college. Our educational system is a failure. Now we are going to make it even more “affordable” and higher “quality” somehow by expanding government involvement in the process?

And finally, they propose the right to Obamacare and perpetual entitlements for all; “the right to a baseline level of health care, unemployment insurance, and retirement security” as well as confronting, “inadequate pension plans.”

There are some things we can agree on. Our economy sucks, things are bad, and there is no real end in sight. Our country would be stronger if we were all employed, making good wages, voting legally, having a voice at work, able to afford and obtain a quality education (if you want one), and being healthy and able to retire. FDR had a great quote (displayed on the Workers Stand for America site), “True individual freedom cannot exist without economic security and independence.”

 My question is, when in the history of humanity, have people become more free and independent, when they became increasingly more dependent on a government that is going broke?

In closing, I do have my own proposal for a “Second Bill of Rights:”

  • The Right to Expect That Congress Reads All Bills Before Voting
  • The Right to Re-read the First Bill of Rights Until It Sinks In

Feel free to offer other suggestions to add to my list – it is your right.

The Hayek quotes come from, F.A. Hayek’s chapter “Responsibility and Freedom” found in, The Constitution of Liberty: The Definitive Edition.

Originally Published on ClashDaily.com

 

Hayek, Like High Explosives

For those of you not as down with the deep economic discourse, this great little video is just the ticket. If economics was this fun in college, I may not have slept thru it.

See more from the fine folks at EconStories.tv

Originally Published on ClashDaily.com

 

Conservatives: More Worried About Wielding Power Than Limiting Power

It is a beautiful, sunny day in Texas and I am proudly flying my Nyberg Three Percenter flag outside my home for the 1st time. I am sure the surveillance drone has already registered my insolence. In the words of Thomas Jefferson, “pardon my freedom.”

I thought about what that flag symbolizes and how our Republic exists because of the bravery of a very small minority of the colonists. Then I wondered, how many of that minority would actually call themselves, “Conservatives” if they were alive today? Would they be proud of the rules the “Conservatives” have followed and are following; given the growth of our government, national debt, and continued erosion of individual liberties both before and after Obama?

The rules Conservatives follow.

One of my favorite lines, from one of my favorite movies, comes from Cormac McCarthy’s psychopathic killer, Anton Chigurh in No Country for Old Men. Just before dispatching one of his victims Chigurh asked, “If the rule you followed brought you to this, of what use was the rule?”

Months ago I asked myself, what rule have I followed in regard to my political beliefs and actions? Being a Texan and former Air Force Captain, I always considered myself to be very conservative. Naturally I believed that the left was evil, they must be blocked by any method possible, and the Conservatives up in Congress will take care of that for me while I go about my business.

Increasing alarm about our country, coupled with quite a bit of self-education has led me to realize my rule needed to change. I have to become an active part of We The People. The first step was becoming a delegate to the Texas GOP Convention. I witnessed lots of “Conservatives” there. As a matter of fact, I think everyone there believed they were a “Conservative.”

As I tried to answer this question about what it means to be a “Conservative,” I turned to F.A. Hayek and I was amazed at how someone writing so long ago could actually tap into what I knew reflected my current political state of mind. He argued about the existence of three distinct groups, progressives, conservatives, and the variously named old-school Continental liberals (i.e., Libertarians, Old Whigs…). Below are a few of his points on the subject.

Hayek’s “decisive objection” to conservatism was, “that by its very nature it cannot offer an alternative to the direction in which we are moving. It may succeed by its resistance to current tendencies in slowing down undesirable developments, but, since it does not indicate another direction, it cannot prevent their continuance. It has…been the fate of conservatism to be dragged along a path not of its own choosing…the tug of war between conservatives and progressives can only affect the speed, not the direction, of contemporary developments.” Though there needs to be a brake on the progressives, he noted, “I personally cannot be content with simply helping to apply the brake.”

 “The conservatives are inclined to use the powers of government to prevent change or to limit its role to whatever appeals to the more timid mind.”

He noted the better way was realizing that “self regulating forces of the market will somehow bring about the required adjustments to new conditions, although no one can fortell how they will do this in a particular instance. There is perhaps no single factor contributing to people’s frequent reluctance to let the market work as their inability to conceive how some necessary balance…will be brought about without deliberate control. The conservative feels safe and content only if he is assured that some higher wisdom watches and supervises change, and if he knows that some authority is charged with keeping the change ‘orderly.’ This fear of trusting uncontrolled social forces is closely related to two other characteristics of conservatism, its fondness for authority and its lack of understanding of economic forces.”

“He (the conservative) believes that if government is in the hands of decent men, it ought not to be too much restricted by rigid rules…his main hope must be that the wise and the good will rule not merely by example, as we all must wish, but by authority given to them and enforced by them.”

Those espousing the better way deny, “that anyone has authority to decide who these superpeople are. While the conservative inclines to defend the particular established hierarchy and wishes authority to protect the status of those whom he values, the (Continental) liberal feels that no respect for established values can justify the resort to privilege or monopoly or any other coercive power of the state in order to shelter such people against the forces of economic change.”

“Like the socialist, he (the conservative) is less concerned with the problem of how the powers of government should be limited than with that of who wields them; and like the socialist, he regards himself as entitled to force the value he holds on other people.”

“The chief evil is unlimited government and nobody is qualified to wield unlimited power.”

Reading Hayek left me with more unanswered questions to ponder:

  1. If everyone on the right running for office claims to be a Conservative, what does that even mean?
  2. What does a “Conservative” stand for? Doesn’t conservative mean, “Tending to oppose change”? Is that good given our current state?
  3. Do they actually agree with the GOP platform and if so, how do they prioritize the platform issues?
  4. How do we reconcile their profession of beliefs vs. actual actions once elected?
  5. If they say they want to balance the budget, are they willing to actually take on reduction of Medicare, Social Security, and Military spending as there seems no way to really balance otherwise?
  6. Are they more interested in playing the game, doing as they are told, not making waves, and bowing to the hierarchy to stay in office?
  7. Are they more interested in simply battling the left as a diversion rather than attacking the debt and risk angering their constituents?
  8. Is the debt really even the priority issue for them?
  9. Though it looks like they want to audit the FED now, what will they actually do with what they find? Are they just pandering to the Libertarians and Tea Party groups?

10. Are they well read in economics? What are their views on Keynes and Hayek’s theories?

Hayek’s criticism of the Conservatives and modern-day Liberals and Progressives seems to fit well with my general disgust aimed at most of Washington.

The Hayek quotes come from, F.A. Hayek’s chapter “Postscript: Why I am Not a Conservative” found in, The Constitution of Liberty: The Definitive Edition.

Originally Published on ClashDaily.com