Ted Cruz is announcing a bid for the presidency. From day one, the Republican National Committee will be trying to take him down. How hard that will be to do depends upon how popular he is in the beginning. If his popularity is much higher than that of Jeb Bush, the Republican National Committee might not be able to get rid of him.

Here is what Fantasy Free Economics knows about Ted Cruz.

1.) He is a sociopath.
2.) He is an accomplished liar.
3.) He is completely ruthless.
4.) He has little understanding of the financial markets.
5.) He is a military hawk.

Were he not a sociopath, an accomplished liar and completely ruthless, he could never have been elected to the Senate. Texans won’t vote for a candidate that tells the truth and politics is so competitive that only a sociopath can get elected to high office.

We know from his speeches that he is clueless about economic issues. So far he has been pretty much a military hawk.

This doesn’t sound so good but in terms of potential, but he is way out ahead of the pack. For a Republican candidate, Cruz is the choice of Fantasy Free Economics. Cruz does not seem to be offended at all with the fascist approach that is currently crippling the country.

However, most of the other candidates have helped create the fascist system we are currently suffering under, Jeb Bush especially. Cruz could possibly change and favor a free market system. Probably Cruz’s strongest characteristic is that the rest of the Republican Party hates him.

Just remember, there is no such thing as a good president. Any president will spend as much as is possible, and all since Calvin Coolidge have. Presidents run for office for their own benefit and it is wrong to expect one to work on behalf of voters unless there is constant pressure from citizens.

The plan Cruz has of abolishing the IRS is not as good as it sounds. The fair tax has a fine name but there is more to a good tax code than fairness. One thing is for certain. As long as the current lawmakers are in place, there is no way for the vast majority of Americans to benefit from a change in the tax code. That will help only the 1% who are responsible for pushing Congress to pass laws. No elitist in his right mind is going to lobby for something to help the poor and middle class.

Here is Curbside Jimmy Tune, Just Another Day at the Whorehouse. Its all about day to day life in the USA

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Work is a second choice to living off of others. That little truth is rejected by mainstream economics dogma. So many of these little truths are ignored in mainstream economics, that the discipline itself is completely handicapped.

So, what is the main role government plays in our lives? It provides a formal mechanism for using all resources available in attempting and succeeding at living off the efforts of others. So, who actually ends up living off the efforts of others? Continue reading →

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The purpose of the tariffs is to increase the rate of inflation. Why would Trump do such a thing? Inflation is a tax. Inflation rides on top of the tariffs which are also taxes. There is a unique aspects of the inflation tax. First the overall population will not be aware they are being taxed. Continue reading →

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What is Fantasy Free?

Natures Gift to You

Nature provides all species with tools to survive. Most important of those tools is the ability to recognize opportunities and dangers almost instantaneously. Human beings have this tool also but are somewhat impaired when they try and use it. Human beings are unique. Through the use of their imaginations they can replace reality with something more pleasant. Survival is ruthless. Whatever is living stays alive by consuming other living things. The world is a giant game of dominance and subservience. Rather than stare these harsh realities in the face, imagination kicks in and replaces them with new notions that are more agreeable.

Whatever a human being sees or hears and then interprets what is encountered it passes through a prism of fantasy. Humans have the same gift as any other species except that fantasy must be dispensed with first. The gift of instant discernment is only present for humans when all is seen and experienced without fantasy or euphemisms.

Without the handicap that fantasies and euphemisms place on a person, any first impression is highly likely to be right on target.

Your Gift from Antiquity

The use of natural law is not part of traditional economics. In fantasy free economics natural law is an integral part of the study. What are the sources of natural law? Some natural law is passed down from generation to generation. A good example of that is the saying, “Power corrupts. Absolute power corrupt absolutely. People who have power are more corrupt than people with no power at all. A little power corrupts a little. Lots of power corrupts a lot.

Ancient scriptures such as the New Testament and Old Testament contain page after page of models of natural law. The natural law applies independently of any religious messages. The stories in these books are all natural law. Find a story in any of them that parallels a situation today and the outcomes will be parallel also. One reoccurring message in these books is that an act that has an immoral beginning will have a negative outcome. Remember the old communist saying, “The end justifies the means.” Natural law says the it is the means that determines the end. The old communist saying is not true and it has alway produced a disastrous outcome every time it has been tried.

Defining People and Institutions

How people and institutions are defined and how they function are not the same. Standard economics dogma treats both institutions and people as if they are exactly as they are officially defined. Fantasy Free Economics completely ignores official definitions and focuses completely on how the various entities function. The Federal Reserve Chairman is defined as an unbiased individual working tirelessly on behalf of the people of the United States. That is the traditional dogma. To Fantasy Free Economics, the Federal Reserve Chairman is the best politician among the nations economists. He is carrying out the agendas of the entities on which his power is dependent.

The president is assumed to be a stellar individual who makes every effort to do write by the citizens. He is deemed highly esteemed and worthy of respect. Fantasy Free Economics instead sees a sociopath trying to acquire more and more power. Fantasy Free Economics respects no one nor does it disrespect anyone. People and institutions are exactly as they function. Respect or disrespect is not relevant to studying people and institutions. They are simply what they do.

Accept Uncertainty

Fantasy Free Economics starts by accepting uncertainty as the way of the world. I am sorry but uncertainty cannot be disposed of. Insecurity is normal. Persons who live wisely can do smart things to minimize insecurity and uncertainty. Beyond a point, uncertainty and insecurity are always present. Risk is unavoidable.

We are all born facing unanswered questions. We know we are alive but we don’t know what life is. We all know we are going to die but we don’t know what death is either. It appears that everything we think takes place withing our heads but we really don’t know for sure. We can see hear and feel but that is because we we have facilities to interpret light ways and sound. How many other waves are there in the universe that we have no way of detecting? The list of unanswerable question could be endless. Fantasy Free Economics treats all of these uncertainties and doesn’t try to replace them with theories and notions which have no evidence. Uncertainty is accepted and no pretense is made that there is a such thing as certainty. The universe is simply accepted as it is without applying mental gymnastics to make it palatable to our sensibilities.

Fantasy free economics is relevant the aggregate or macro economics. Suppose there was a discipline where high level degrees were offered and honors were bestowed on those who said intelligent sounding words but still the discipline never solved a problem or offered a worthwhile trade off. Would it not make sense to question the basic assumptions on which that discipline was based?
There are a number of disciplines like that. Economics is one of them. Political science is another. Aggregate economics cannot be studied without looking at political science. Almost every aspect of macro economics is influenced by what goes on in government. The corrections I am offering with respect to economics also applies to the study of political science.

Erroneous Assumptions

There are reasons why economists are so seldom right about anything. Many of their assumptions are wrong. Their understanding of human nature is lacking. Fantasy Free Economics starts at the beginning while mainstream economists skip the most basic incentives human beings experience. The study of economics actually is the study of survival. Laws of dominance and subservience determine what people do with their time and energy. All else in economics is rooted in behaviors related to survival.

Standard  economics dogma treats the individual as autonomous. All are assumed to be thinking independently. Representative government is seen as intact and operating flawlessly. None of these things are true. They are so untrue that acting on the basis that they are true guarantees failure. Failure is the most common outcome of economic models and theories. Take a fantasy free look.

The following quote is taken from the Preamble to the Declaration of Independence of the United States.

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable rights, that among these are life, liberty and the pursuit of happiness.“

This was a fine thing to say prior to writing the Declaration of Independence but it is not a law.  It is largely treated like a law but it is a statement. It is true to the degree it works out to be verifiable in real life. Out of this and other writings come ideas that all men seek freedom. Is there any difference between the state of being free and having rights? Traditional economics dogma say the individual is a freedom seeking entity and is free from birth and from death. That sounds fine but is it true?

When a person is born a process of bargaining away freedom for comfort and security starts and continues through life.  So a person engages in freedom for comfort deals throughout life. Freedom is more like collateral than it is a permanent way of existing.

Upon birth a human being enters a huge game of dominance and subservience and starts learning to how to play. It is a human instinct, just as it is in other animals to, try to live off the efforts of others before doing any work. This is clearly an adaption to make for efficient survival. Some people prove to be better at the dominance and subservience game than others. Once a person has moved as high as possible withing a group by dominating, that person trades his freedom for comfort and serves at that level. Serving at a high enough level can be quite rewarding. Once a person is well seated in a situation and the probability of surviving is about optimized the dominance and subservience game is put on hold. In mainstream economics, work is a first choice. In fantasy free economics, which is grounded in reality, work is always a second choice.

Living off the efforts of others is always the first choice. That is not always bad. More often than not, employers live off the efforts of others by paying employees. Slavery is not so good. Lobbying government is another way of living off the efforts of others. Stealing is another. The worlds most productive societies are arranged so that living off others is very difficult to do without paying them.

 The Animal World

Economists normally don’t study the animal kingdom.  Mankind is treated as a special entity bordering  on Divinity. Laws of nature are deemed to apply only to lower animals. Fantasy Free Economics does not accept this limitation.  Aggregations of human beings are studied exactly like all others would study packs of dogs herds or herds of horses.

How are People and Institutions Defined?

An Ivy League economist would treat the chairman of the Federal Reserve as a brilliant intellectual, full of honor whose only goal is to serve the country. Fantasy Free Economics defines people and institutions exactly as they function and ignores their official definition. While standard economics dogma says the Federal Reserve chairman is their on behalf of the citizens of the country and respects him as the countries most seller economist. That is not what he is. In truth, the chairman is the best politician among the countries economists. The Federal Reserve chairman is assumed to operating as an unbiased public servant. Nature provides only one universal incentive, self interest. Do public employees have an incentive to serve? No, the incentive to serve is purely imaginary. Self interest is part of nature. Service as a primary motive is a fantasy.

How it is that such smart people can be wrong day after day and year after year? One problem is that graduate level economics courses are economics in name only. What is really studied at these levels is actually accounting and has nothing to do with economics. Students leave college convinced that one number causes another, then go out into the real world and stumble all over themselves. Firm is the belief that if it is taught by a credentialed professor with a 165 IQ it is the gospel. Conventional economic thought assumes that decisions, both private and public are made in keeping with intellect. In the real world instinctive impulses drive most political decisions and contribute greatly to economic decisions. Leaders in government are even more controlled by instinctive drives than is the general population. People have an instinctive drive to serve a master and a bias toward giving government a significant role in allocating resources. Individuals are not capable of behaving in the ways necessary for a market economy to function efficiently. I am nothing close to an expert on human instinct but just recognizing that it is a constant influence, gives me a real edge in figuring out where the economy is headed. All of the esteemed who are oblivious to the relevance of instinctive behavior in economics are completely limited.

Today the public sector accounts for a huge portion economic activity. There is a huge misunderstanding concerning why government has grown so large. Of course, because of instinctive biases, growth of government is always hard to contain but there is more. After a long time there are dynamics in a democratic system that no one anticipated. Democracy provides a stage on which the 5% or so of the population with insatiable thirsts for power can compete. In the old days a person had to be born into royalty to be a king or a queen. Today the power hungry promise to have government do things for you that you can’t do for yourself. Politicians promise to use government to take resources from groups who have no political power and give the resources to constituents who support them. The competition for power is now so intense that you are even being promised things that government cannot do.
These are the types of dynamics that are determining economic outcomes in the modern world. What a person gets with an economics degree is an abridge version of the economic arena where the most significant influences are left out. A Federal Reserve Chairman can’t do anything right not because he isn’t smart but because he isn’t looking at anything that makes a difference.

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July 26 2018

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Work is a second choice to living off of others. That little truth is rejected by mainstream economics dogma. So many of these little truths are ignored in mainstream economics, that the discipline itself is completely handicapped.

So, what is the main role government plays in our lives? It provides a formal mechanism for using all resources available in attempting and succeeding at living off the efforts of others. So, who actually ends up living off the efforts of others? Continue reading →

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Facing Life’s Difficulties
Do we know what life is? No
Do we know what consciousness is no?
Do we know why we are alive?
Throughout history when something has been accepted as true, it turns out that the picture is not complete. Up until about 100 years ago Newtonian physics was thought to be all there is to physics. It turned out that sub atomic particles obey a different set of laws. Coffee has been deemed bad for health and then good for health over and over again. What we know applies very well sometimes given certain circumstances. That makes what we think we know appear to be true. Rather than say this is true and that is false, lt makes sense just to say based on our circumstances this is what appears to be true.
Principles of mathematics appear to be well founded as do the principles of chemistry. I do not know chemistry so I won’t comment on chemistry. In math there is much we use and rely on but don’t understand. The complex number system is one of those areas. In the complex number system for those who don’t know there are square roots of negative numbers. The square root of (-9) is 3i. In our physical world this makes no sense but the complex number system is used constantly to study the mathematics of waves. How do we build relationships using something that is completely imaginary?

Perhaps complex numbers are actually not imaginary but part of a system we don’t yet know about. Quantum physicist often believe in parallel universes. What if there is a parallel universe that is exactly opposite the one we live it. Ours could be the positive universe. The other could be a negative universe. What are called imaginary numbers within the complex system could be normal in a negative universe. Perhaps at zero there is no universe at all. Regardless of what we are studying there is always more that we don’t know than what we do know.
Finding out what is not true is many times easier than discovering what is true. It makes sense to focus on that. By what we know, we may or may not be able to help ourselves. Knowing what is not true is always quite helpful in helping us survive and flourish.
Fantasy begins as we try to cope with having no answers to life’s basic questions. Then fantasy develops further as we try and separate ourselves from the harsh realities of survival. We all like to think of ourselves as being above the fray in terms of what we must do to stay alive. Mankind can only survive be consuming living things just like the lower animals. This activity gets euphemized so that we all feel positive about ourselves.
Over many eons humanity has come to completely detach itself from the harsh realities of existence. Who wants to be a ruthless predator? The mind organizes thoughts in such a way as to never think about the harsh behaviors necessary for survival. A very small percent of any population actually takes part in the dirty work. Lofty explanations and definitions are given to ourselves as we keep a distance from knowing what it actually takes to stay alive.
The universe, at least our part of it, provides a system of dominance and subservience under which all living creatures live. Replace that fantasies and euphemisms and the dominance and subservience system continues, whether it is replaced by fantasy or not. Is reality so brutal that mankind invents ways to make it seem more friendly. You bet. That can be great for reducing stress but if you have reason to want to know the probable outcomes of what individuals and groups are doing, not dealing with the world exactly the way it is is a sure way to never get it right.
It turns out that what passes for economics these days is based on fantasy and thus gets very poor results

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The seven or so major news organizations have no problem with coordinating their coverage so as to black out certain news stories. Sometimes like back when the bailout of 2008 was being proposed they blocked all disagreement. Today the major news organizations are blacking out coverage of the Occupy Wall Street Protests.
A recurring sentiment of the protestors is concern over too much greed on the part of corporations. The protestors are young and lack experience in identifying the causes of problems. They are absolutely right that a great injustice is being done. They can feel it in their bones but they honestly don’t know what the problem is.
Self interest and greed are not the same thing. Greed is stronger than self interest and breaks moral and ethical boundaries that society puts in place. A business that sells as much of a product as is humanly possible is no more greedy than the consumer who buys gas at the station with the lowest prices. In economics, folks who expect others to act any way other than in self interest will always be disappointed.
When businesses cheat by breaking laws, that is greed and outside what is allowed in a free market. When businesses use the legislative process to create demand for their product or to create markets, that is greed also. When businesses convince the Federal Reserve to increase the money supply as a means of bolstering profit margins that is greed. When monetary policy holds prices up when they would otherwise fall, that has the effect of reducing the real wages of working Americans.
Corporations do in fact use government to steal from the general population. News organizations benefit greatly from the status quo so they black out news that will upset their apple cart. News organizations present themselves as being objective. Fox News constantly claims to be fair and balanced. Publicly claiming to be one thing when you are another, for you own profit, is immoral and thus constitutes greed.
The protestors are on to something but don’t yet know how their accusations apply. When a country faces a severe financial calamity, the knee jerk response is to blame it on capitalism and free markets. The problem is always actually caused by the corruption of capitalism and government failing to maintain a fair playing field.
The act of blacking out news stories is incredibly destructive. The civil discontent is real and thinking it just needs to be stifled will only make it worse and possibly result in violence. The naïve protestors remind me of the anti war protestors of the 1960’s. They were naïve and inexperienced but sensed something was wrong. Like today’s protestors they were not getting any unfiltered information. They hit the streets, stayed there and eventually the truth started coming out. These protests are just getting started.

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When candidates propose new and better plans to collect taxes this means no effort will be made to reduce spending. No matter what, the biggest burden of taxation is going to fall on the group with the least political utility to the person proposing the new system of taxation.
Identifying the burden of taxation is not that simple. Half of the people pay no federal income tax so they say. That is only if FICA is not counted as a tax but FICA is a tax. It is said that employers pay half of FICA. That is true if you believe employers don’t pass their half on to employees in the form of lower wages. The rich already pay more than their fair share so you say. Well, the rich get more benefits from the government. In many cases the taxes the rich pay are close to being investments. The rich use government to create, protect and manage markets. The upper echelon of rich could not maintain their status without using government to gain an unfair advantage.
There are a number of truths where taxation is concerned.
1.)
More tax revenue generates more spending
2.)
Lower taxes generate more spending. People want more of what costs them less.
3.)
Taxes keep voters in touch with what government costs.
4.)
Higher taxes result in smaller government an in the long run lead to lower taxes.
When a politician comes up with a new idea for collecting taxes, the true message is, “Spending is not coming down but this new tax plan will make the cost of big government less painful for my supporters.”

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My forecasts are not infallible but they are highly dependable. Forecasts made by mainstream economists are more likely to be completely backwards with respect to what actually happens. Usually the higher the I.Q of forecaster; the more inaccurate will be the projection. In economics, raw intelligence dazzles students and impresses politicians and constituents. For making forecasts and coming up with economic policies, high raw intelligence is more of a detrirment than an asset.
My I.Q. is only high enough to allow me to do basic things that a minor league academic needs to do. An economist like Federal Reserve Chairman Ben Bernanke surely has an I.Q. somewhere in the high genius area. Yet, I am consistently right and he is consistently wrong. What accounts for the difference in results?
For a human being my level of awareness is extremely high and for explaining economic issues and making forecasts this gives me an unfair advantage over my much smarter counterparts. Awareness is a gift nature seems to gives to various creatures and this enables them to figure out what the truly brilliant among the earth’s inhabitants are going to do next.
Do you have a dog? Dogs have a much higher level of awareness than their masters. Your dog has what seems like an uncanny knowledge of what you are about to do next. The dog studies your every movement. Children are highly adept at gaming their parent’s moods and behaviors. Kids reason, “Dad is in a good mood, I’ll ask for some money.” Children lose their awareness when they get older. Awareness is a survival tool. Really smart people don’t need it so they either lose it or don’t have it.
Academic economists make poor forecasts because they do not consider any criteria that make a difference. In their minds one number causes another but numbers cause nothing at all. Human behavior is what causes numbers to change, so a good forecast is focused on human behavior and changes in incentives.
Keynesian theory is based on the notion that one number causes another. All fiscal and monetary theory is quite complex and out of reach for ordinary people. It is also completely useless for anything other than tracking what is going on with numbers.
When fiscal and monetary theories are used to formulate government policy any decision is a political decision and constitutes central economic planning. Resources are inevitabily allocated inefficiently. When government guides economic activity over a long period of time the result is an economic depression. Over time resources become so inefficiently allocated that the economy can no longer grow.
This is all one needs to know in order to conclude the world economy is about to collapse. The magnitude of the calamity will be much greater than can easily be fathomed at this point. All of the major economies around the globe have been severely handicapped by central economic planning. Economies cannot perform well enough to generate enough tax revenue to cover their debts. Every country in the world is facing a crisis at the same time.
For the most part the unsuspecting public has an unshakable faith in experts and government solutions. The writing is on the wall here. No asset class is safe to invest in. I am even reluctant to keep money in the bank. The time period we are entering is going to be nothing but every man for himself. The best I can come up with is is to compile a portfolio of short positions in stocks. This is the opposite of holding assets. I will benefit when assets lose value. So far, I am up 35% for the year.

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When Americans elect a president, they are of the same mentality you would expect them to have if they were voting for scoutmaster of the year.

How does one become president of the United State? The candidate they vote for, in their minds, is a messiah who will go to Washington and champion the causes that are dear to them. What people are doing is voting their fantasies.

Who actually becomes a president or for that matter any world leader including senators and members of the house? How ordinary are these people? Lets look at any competitive profession, the NFL for example. Is there any reason why Pee Wee Herman cannot earn a spot as an NFL quarterback? The job of NFL quarterback takes certain size and skill the average person doesn’t have. As a matter of fact the athlete who becomes an NFL quarterback has to have more of those skills than than thousands of others who try. Only a handful make make it. Almost none even come close. Making an team in the NFL is one of the world’s most competitive processes in the world. Still, it is nowhere near as competitive as the competition to become the most powerful man in the world which is the United States.

A successful presidential candidate, knows never to tell the truth, just because it is the truth. Why? His opponent will deviate a little from the truth to make it sound a little better. The truth ends up being just one of the tools in a candidates tool box. The tool to use is the one to get votes and that is not the truth. The race for president is completely brutal and ruthless. It is so ruthless that a successful presidential candidate must be a sociopath. The competition is so stiff, the truth and goodness are completely morphed out of the equation.

When Donald Trump ran for president his opponent Hillary Clinton was as ruthless as Donald Trump. Although she already had plenty of political skills, Donald Trump had enough in natural skills to win the race. Donald Trump is o.k. with dropping an average of 120 bombs every day on people in other countries. How hard would it be for you to drop bombs out of the sky knowing they were going to kill many people, many of them being babies? Perhaps you would have no problem with it. You may be a sociopath also, just one lacking the other skills it takes to become president. It takes a hybrid person do do these things. Any person who becomes president is a sociopath because there is no other way to get the job.

One of the important aspects of a sociopaths personality is a sense of entitlement. As odd as this seems to a person with a normal personality characteristics distribution, it is the natural mindset of a sociopath. If you own something, in the mind of a sociopath, it is as much yours as it is theirs. They just don’t have it yet.

To a president the country is like a big apple tree and all of the apples are his for the taking. In our form of government it is the job of citizens to collectively ride herd over their president. Together they can keep him under control. The country is in a sad state today because citizens don’t do that. I am telling you they better learn how quickly. The president is honestly never like someone who would be voted scoutmaster of the year.

The truth is a hard sell. Fantasy Free Economics gains readers one at a time. Major search engines simply do not list blogs which disagree with their political agenda. As long as folks share the link to this blog and others speaking out against the grain, the truth will at least trickle into the public consciousness.

Fantasy Free Economics recommends the following blogs.

Of Two Minds Liberty Blitzkrieg Mises Institute

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