Category Archives: Economic Theory

Living in the Presence of Evil

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Living in the Presence of Evil.PDF Version

Before reading, it might be good to examine the definition of evil – as the word is used in common language , as well as some more sophisticated thoughts on the subject by Scott Beck who is the well – known author of “The Road Less Traveled.”

Merriam Webster- Definition of Evil.

Dr. Scott Peck, Psychiatrist On Causes of Evil

Mostly in this blog, I discuss economics, politics and natural law – in terms of how it applies to these subject areas. I am not a prophet or an avatar. However, I am a mystic. My method is not to rely only on things that can be seen , touched, felt and watched. I heavily consider influences we can’t see.  One time I heard a man give an answer when asked what made him certain that there was a spiritual world. His reply was, “I can feel the presence of guidance and influence that is outside the physical realm.” Most people can accept that they don’t know they can. Replacing what is real in life with fantasy diminishes one’s ability to interact with the cosmos, so to speak. This is not the same as clairvoyance, for which I have no solid insight. Continue reading →

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New Dynamics Corporate America

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New Dynamics Corporate America.PDF Version

Early in life, most Americans remember the phrase, “the consumer is king.”. This concept began to change in the 1950s. John Kenneth Galbraith, in his book The Affluent Society. coined the term “conventional wisdom”. He explained how what is perceived to be true continues to be deemed to be true long after it is no longer true. Conventional wisdom is that the consumer is king. The consumer is no longer king in the U.S. economy.

In the fifties, Galbraith noticed a change. Sophisticated advertising techniques developed. Demand for goods and services, which had previously sprung up in the hearts of buyers was taking a back seat. Corporations were then creating demand for their products and services by virtue of increasingly sophisticated advertising. The 1950s were only the beginning of the practice of manipulating the public mindset Continue reading →

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Why Does Government Grow?

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Why Does Government Grow.   PDF Version

This is a question I answered on a public forum where I am apparently still welcome and for now uncensored .Government grows every time a bill is passed. Bills get passed as a way of rewarding Americans with political power. Only a few have enough political power to get what they want out of government. Bills are passed as a way to extract wealth and income out of the general population

People without political power are important to the political process only in their imaginations.Conservative echo chambers serve the elite because all of the time and energy of conservatives is absorbed with philosophical discourse. Being of extreme importance in their own minds , they are lulled into believing they are making a huge contribution – by teaching others how to think.

In a democracy – based system, it is the citizens’ responsibility to govern themselves. Governing involves work and since work is a second choice for the human species, messiahs are sought instead of delegates.

Politicians are assumed to run for office because they are good people who want to serve. In terms of goodness, politicians are neutral at best. Politicians run for office as a way of making personal use of rank and file citizens – as they bargain for power, influence and money.

Curbside Jimmy’s Prophetic Song

 

 

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Treacherous Dangerous Times

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Treacherous Dangerous Times PDF Version

This is a question I answered on a public forum where I am apparently still welcome and for now uncensored .This is a question I answered on a public forum where I am apparently still welcome and for now uncensored. American citizens along with the rest of the world’s population are in serious danger. Danger from outright violence is present of course. Economic danger is present, growing and certain to increase. In the face of this there is a genuine lack of awareness of the gravity
of the situation. There is a black out of any relevant non superficial news. There is little concern and little meaningful information available that might make folks concerned. Continue reading →

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Another Silly Recession Headline

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I clipped this headline off of Zerohedge this morning.

So, why is it suggested that the U.S. might be in a recession, when it obviously is to anyone with at least one eye, who is looking?  We have a growing homeless population. Banks are failing. Small banks are losing deposits. Retail stores are closing. Home prices have started falling and so on. 

 

So, why is GDP still o.k. but just might head into a downturn? Continue reading →

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Modern Money Explained

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Modern Money Explained PF Version

Money has always been around. At the time barter was used, whatever was produced in excess of what the producer used, served as money. It was traded directly for something else another person produced, that was deemed worth a trade.

All kinds of commodities have been used for money. Six characteristics of money are:
durability, portability, acceptability, scarcity,
divisibility and uniformity.

Gold served as money for eons because it posses all of these six characteristics. Interfere with any of these six attributes and whatever serves as money functions less efficiently as money.

I use the term natural money supply to describe the optimum amount of money in an economy. The natural money supply consists of money earned by means of work or production plus what can be borrowed based on the credit of borrowers and reserve requirements. But, is that enough money in circulation? It is in a free market economy and constitutes an optimum.

One way to dismantle a free market economy is to increase the money supply by means of introducing political money. Quantitative easing and other such practices amount to political money. Add that money that and the good money attribute of scarcity is diminished. Drop the reserve requirement close to zero and the scarcity of money is eliminated.

All who work possess natural money. That is based on work done and whatever can borrowed and logically be expected to be repaid. Few who work have access to political money.

Access to political money is obtained by way of political power. How do we end up with political money? Suppose there is a basically a free market economy and things are going along as well as possible. The economy is growing but deemed not to be growing fast enough. Never mind that given technology, productivity of labor and resources, everything is being put to its highest and best use. Gee, but given the prowess of our intellectuals, government can stimulate the economy and we can out do the tired old free market system.”

By increasing the money supply, it is assumed that we can have more of everything faster and on a win win basis. So, the Federal Reserve is commissioned to create political money in order accomplish this. Wow, it works, lets do even more of it.

When I was driving a taxi, I picked up an air force pilot at the San Antonio International Airport. I took him to Randolph Air Force Base. We had a pleasant half hour long conversation. He was here to fly a jet back to Colorado Springs. He wasn’t looking forward to it. It would be a boring four hour flight. I naively asked him why it would take him so long since the jet he was picking up could easily make the trip in 45 minutes. He said that his mission required him to optimize fuel usage and if he went at maximum speed, there might not even be enough fuel to finish the
trip.

Stimulating the economy works in a similar fashion. Initial results may be stellar but that is not going to last. First, the stimulus goes to those with enough political power to demand and receive it. Second, the money is used by the receivers to make the most money in the shortest period of time. Expectations are that the money will be unselfishly used to promote a national interest. Instead, resources become inefficiently allocated because the out with the, old and in with the new aspect, of free markets eliminated. Wealth is transferred from the bottom of the economy to the top. A severe recession or depression ensues to correct the imbalances created by the stimulus. GDP numbers can look good for years, but like the jet plane, the economy runs out of
fuel. In the end the economy would have been better off at the end of economic hard times, had stimulus never been used.

Mindless stimulus, both monetary and fiscal stimulus. have been used constantly since the Reagan Administration. Keynes, the father of economic stimulus, was clear in insisting that his theory should seldom be used and that complete objectivity must be used when it is. Since government, can only make political decisions and Keynes methods require economic decisions. His theories are guaranteed not to work as intended anyway.

There is no objectivity in government decisions. Constant stimulus has destroyed our free market system. Political power has replaced price in its rationing role. Our economy has been destroyed. So, the economy will crash, just like the pilot’s jet would have crashed had he flown full speed on his flight from San Antonio to Denver.

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The Case For Deflation

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Inflation is the current fear. That is fine for mainstream economics. But, thinking is not allowed in economics. First, deflation is not bad for an economy. Inflation favors the wealthy, government and others who have borrowed. Deflation favors the working class. In a free market, economic power naturally shifts back and forth from one sector to the other.

Deflation occurs naturally when the productivity of labor increases. Inflation is created politically.

When power starts to shift in the direction of the working class, the upper class can and does create inflation politically as a means of maintaining its advantage. During the period between 1873 and 1879, prices dropped by nearly 3% every year, yet real GDP growth was around 7% during the same time period. However, despite this economic growth and the rise of real wages, historians have called this period “The Long Depression” because of the presence of deflation.” Investopedia

Prices dropped profoundly during the 1870s during a long period of economic growth. Real wages increased significantly. At this time procedures for enhancing economic activity by way of “stimulus” had not yet evolved. A degree of economic power did shift to the working class for a while.

In our modern era, the Federal Reserve has been fighting deflation since the Reagan
administration. Increases in the productivity of labor have been monumental. Yet, real wages have stagnated. Profit margins of corporations have increased. Prices have been very stable until recently. This is no accident. The working class has been robbed of the productivity bonus it would have received had prices been allowed to fall. This has all been accomplished politically.

Now it is politically expedient to create inflation as a means of shrinking the debt size of heavy borrowers.

Deflation has been defeated for 40+ years but deflationary forces are still present and have increased. Unlike other economies where runaway inflation has taken hold, the United States has massive production capabilities which can be used. An enormous amount of demand has been in non essential goods and services. There are also plenty of substitutes for all we buy and consume. Creating ever rising prices will be an enormous task.

One of the many negatives with respect to stimulus is that resources become more and more inefficiently allocated over time. Recessions occur because businesses are not getting the profits they expect from what they are currently producing. Recessions disappear and business finds more productive ways to use its resources. Inflation prevents this from happening.

In economics, if we prevent what will occur naturally, what would occur naturally occurs
anyway eventually. Notice, I am not citing numbers or pointing to lines on charts. I don’t need to. Instead, I think things through and as always am focused on what causes numbers to be what they are instead of thinking the statistics just happen to fall into place the way they do.

So, I am expecting things to reverse. Inflation will give away to deflationary forces and the overall price level will fall. Lets see what happens.

We are facing a depression, not a recession. Deflation, honestly is more likely.

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Stimulus The Political Tool

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Stimulus The Political Tool PD Version

Many times, I have written that whether it is monetary or fiscal that stimulus is a political
tool. It has no honest application. It is and has been a big lie from day one.
Why is it impossible for stimulus to to have a net positive effect on the economy? I can give all kinds of explanations as to why, both abstract and down to earth. That is nice and perhaps would be entertaining but it is not necessary. Human nature does not allow these programs to work.

Keynes, the father of stimulus, certainly argued that objectivity and non-bias were completely necessary. Keynes did not grasp that objectivity and non-bias are not possible in government. Government cannot make economic decisions. Governments make only political decisions.

A kid with $5 in a candy store makes an economic decision. Congress or the Federal
Reserve make political decisions. That being the case, there never has been and never
will be a case where an economic decision is made with respect to stimulus. It is a
contradiction and impossible. Keynes called for non bias, but there is no way to get a
non – biased decision – where stimulus is concerned.

So what we have , is stimulus applied one way or another every year. Leaders always find it necessary. Stimulus is very good for those who get it, but that is not you. To benefit from stimulus takes massive political power. I do mean massive and that amount of power is what it takes to dictate policy to government.

Lets see, who has massive political power? Is it the rich or the poor? Look at how the
income distribution has changed since stimulus was virtually made mandatory with the
Full Employment Act of 1978. What percent of the nation’s income went to the upper 1% in 1978? Find the answer
online. Use 5% instead of 1% if that is easier.

What you will notice is a massive income increase for the upper 1 percent who have
massive political power and an impoverishment at the bottom who just pay taxes.

The question students need ask their economics professors …. is why it is deemed good to teach students theories when there is a genuine guarantee that they will never be used at the right time?

James Quillian an economist, political analyst and teacher of natural law. James is the originator of fantasy free theory and author of the Fantasy Free Advantage.
View all posts by jamesq →
Many times, I have written that whether it is monetary or fiscal that stimulus is a political
tool. It has no honest application. It is and has been a big lie from day one.
Why is it impossible for stimulus to to have a net positive effect on the economy? I can give all kinds of explanations as to why, both abstract and down to earth. That is nice and perhaps would be entertaining but it is not necessary. Human nature does not allow these programs to work.

Keynes, the father of stimulus, certainly argued that objectivity and non-bias were completely necessary. Keynes did not grasp that objectivity and non-bias are not possible in government. Government cannot make economic decisions. Governments make only political decisions.

A kid with $5 in a candy store makes an economic decision. Congress or the Federal
Reserve make political decisions. That being the case, there never has been and never
will be a case where an economic decision is made with respect to stimulus. It is a
contradiction and impossible. Keynes called for non bias, but there is no way to get a
non – biased decision – where stimulus is concerned.

So what we have , is stimulus applied one way or another every year. Leaders always find
it necessary. Stimulus is very good for those who get it, but that is not you. To benefit
from stimulus takes massive political power. I do mean massive and that amount of
power is what it takes to dictate policy to government.

Lets see, who has massive political power? Is it the rich or the poor? Look at how the
income distribution has changed since stimulus was virtually made mandatory with the
Full Employment Act of 1978.
What percent of the nation’s income went to the upper 1% in 1978? Find the answer
online.

What you will notice is a massive income increase for the upper 1 percent who have
massive political power and an impoverishment at the bottom who just pay taxes.

The question students need ask their economics professors …. is why it is deemed good to teach students theories when there is a genuine guarantee that they will never be used at the right time?

 

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Organized Crime Owns Your Government

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Organized Crime Owns Your Government PDF Version

Benjamin Franklin was terribly misguided when he made that quote. Democracy had never been thoroughly tried, so he can be forgiven for not foreseeing that there were more serious issues with the abuse of democracy than what originates with ordinary people. So, the United States is organized as a republic and that is supposed to keep the masses from voting everything in the treasury into their own pockets.

Over the years, new sophisticated systems of exploiting weaknesses in democracy have evolved and are now used. Experience shows that the poor do not have the wherewithal to petition government. The poor have not actually tried to take anything from the rich.

The unwashed masses actually have presented no threat to any moneyed interests in the United States. They have proven to be a constituency worth buying by providing a few benefits to them over the years. But, no money has ever been voted out of anyone else’s pockets based on any actions by the poor. Instead, democracy turns out to be an incubator for crime, especially of the organized variety.

Organized crime, by financing campaigns and running its own candidates has taken over government. Why would they not? Who is to stop them? Suppose an organized crime syndicate is worried about the FBI. Why not just buy the FBI? Why break a law? Just pass a new law legalizing a previously illegal activity. What do they do to keep the keep the public on their side? They buy all of the media outlets and make sure citizens only hear what they want them to hear.

Americans get confused. They see a massive group of migrants marching towards the border. The march is reported on as if it was some kind of organic event that has just sprang up? The migrants are presented as if they are no different than any other people coming to the United

States looking for a better life. But they are different. The march is orchestrated and masses of poor people entering the country have great economic benefit to the elite who finance and organize these events.

The founding fathers were right, that with democracy, some potential threats would have to be
addressed. They did not anticipate that organized crime would take over the country. There is
talk about “the shadow government.” There really is no such thing. It is organized crime that dictates policy to congress. It is organized crime that causes senators and congressmen to step down, when their re-election is a sure thing.
But, many Americans benefit from the things organized crime does. That is temporary but some

Americans will always benefit and that makes it difficult to re-establish law and order. The founding fathers, like all historical figures were not at all like they have always been popularly portrayed. They were motivated out of self interest like all living entities are. The founding fathers did not provide a method for testing the constitutionality of laws. They may very well have purposefully left openings for the exploitation of ordinary people. The Supreme Court, a political body, ended up with the role of deciding constitutionality of law

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