The Logic of Programs for the Poor

As long as people are comfortable they believe what they are told, never protest and support authority. That is the logic of programs for the poor. Do the poor benefit? Of course they do but the programs are of far greater value to folks who administer them. Those who benefit the most are corporations which feed off of the programs.

The poor would be better of without government assistance. The poor never lobbied government to get these things started. They take what is offered just as do the rich, Unlike the rich, mostly the poor would not complain if the programs were discontinued.

Never make the mistake of thinking politicians have good intentions with respect to programs they support and push through. Government programs make recipients more manageable.

Laws are passed to serve those with political power.

On another note, politicians who think Mexican Immigrants are suckers for big government don’t know many Mexicans. I do. In Mexico, dealing with the government is an art. To the politicians I say, Mexicans know you a lot better than you know them. The unofficial economy in Mexico may be bigger than the one the government knows about and taxes.

Here is a nice Curbside Jimmy Tune, A Dead Man’s Credit Cart, Music for the Hard Times Coming.

Posted in Daily Comments | Leave a comment and Today’s Earnings has been trading for $300+ for a while with a price earnings ratio of around 600. In a real world setting AMZN would be trading for under $5.00. Common Sense Economics knows that for the human species, work is a second choice. Bragging about work ethics and personal initiative is a staple in human to human conversation. Make no mistake, rent seeking for the elite is the preferred method of making a living. For company insiders, goosing a stock price by hook or crook is the best and most lucrative way get paid.
Countless elites rejoice as a stock like AMZN moves into the stratosphere. Chests are pounded and the virtues of hard work and capitalism are proudly proclaimed. But, stock prices are managed politically and the elite are really just on welfare, although not officially.
Government economic policy extracts countless dollars from the poor and middle class every second and transferees it to the billionaire class. Folks don’t seem to mind, especially those who identify as conservatives. QE keeps profit margins up and wages down and rank and file conservatives relish in the role of paying tribute to their role models.
In the end, government policy destroys the whole economy, elites and everyone else. But, the elites don’t care. They have already eaten their lunch.
Perhaps, the real economy is too weak for AMZN to avoid losses anymore and hype is working less well as a promotional tool. Consumers are getting less impressed with playing the role of sucker.
It turns out that despite the finest hype money can buy, AMZN has reported a loss. Buybacks won’t help a company that can’t report positive earnings because fewer shares magnify losses just as they magnify profits.

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Fantasy of Economic Models

It takes a high I.Q. and lots of hard work to get a PHD in economics, especially from an Ivy League School. Yet a third grader with common sense could debunk almost anything that comes of their mouths in thirty seconds are less.
Economic models and forecasts fail for the same reason chain letters fail. Erroneous assumptions are made about human behavior and character. Also, provisions are never made as to new incentives that will be created and old incentives that will be destroyed. Government is always assumed to make economic decision when it is impossible to for it do so. Does self interest disappear when government takes on a task? Only in the minds of learned economists do government agents work towards the best interests of ordinary citizens.
Fantasy is a major cause of happiness. Some fantasies continue throughout life without interruption. Those that deal with money and survival cause great sadness when they collide with reality and cause misery and poverty. Where there are fantasies about economics, there is always a reckoning day and a sad ending.
There is nothing ignorant about the American Public. Most work to many hours and have too much responsibility to keep up with the numerous ways they lose money due to economic policy. Still, there will be great distress when average folks discover just how much Quantitative Easing has cost them. The price has not yet been paid.
As a political initiative Quantitative easing has been successful in transferring massive wealth from the politically naïve to the politically powerful. As an economic initiative it has destroyed the economy.

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Truth About Fiat Money

Common Sense Economics as of October 7 is recognizing the most recent record highs as marking the end of the bull market that started in 2009. Unlike all other bull markets in history this one was politically created and maintained with organized support.
The bear market we are about to experience will be far more destructive than most are currently able to fathom. The coinciding depression may be worse than the one during the 1930s.
Guaranteed, all will hear about the evils of fiat money. Don’t believe it isn’t true. There will be calls to return to the gold standard. Few realized that gold certificates were fiat money also. How is that? They were redeemable in only one commodity and government controlled the price. Regular fiat money is also convertible into gold but government doesn’t control the price. It can also be converted into anything else. It is more accurate to call it deregulated money.
So, what is the problem? Governments cannot maintain stable currencies. Why? Governments can’t make economic decisions. They make political decisions so the amount of money in circulation always reflects the needs of the politically elite. The gold standard was constantly tampered with politically. The asset bubbles of the 1920s were directly caused tampering with the gold backed pound following WWI.
Money creation gets out of hand because citizens are unwilling to control government. Chances are good that within the next 50 years a new currency will emerge in the private sector. There is no chance a government will sponsor a trouble free currency. In all of history it has never been done.

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How the Biggest Lies Are Told

Suppose person A want to tell a lie to person B. It is hard to get someone else to believe a lie unless they are already lying to themselves. One common denominator among all people is that of believing one is special. The best liars know how to nurture and exploit this universal false belief.
Notice when a politician begins a speech, the first order of business is to acknowledge and patronize the “special” nature of the audience. Tell a man what he wants to hear and it registers as the truth. Who would lie to a person who is held in such high regard?
There are over 7 billion humans on the planet. Below is a link to a world population clock. There are special people being born almost faster than they can be counted. Each one of these people is born with a sense of being special.

One staple in the science of lie telling is that once a person believes the first lie, the ones that follow are believed a lot easier. The trick is to tell a lie the person already believes and start adding on. With election day coming up in November, take note of the technique.

The Grazin’ is Good is a Curbside Jimmy tune is focused on human behavior in the modern era.

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Bull Market Over

During the 1980s, while Ronald Reagan was president, government began tampering with the financial markets. In the spring of 2003 government started working aggressively with Wall Street to elevate asset prices. In spring of 2006, when asset prices were showing signs of weakness, Henry Paulson was named Treasury Secretary for the purpose building a larger and more active consortium to keep housing and stocks on an upward path. When this effort failed, TARP was passed partly as a face saving effort and partly to save the remaining assets of the politically privileged upper class.
Quantitative easing first under Ben Bernanke and now Janet Yellen provided unlimited funds for stock purchases. Laws prohibiting manipulation were not enforced. Friends of the Federal Reserve have traded risk free for three years. The U.S. Government has been reduced to an income redistribution engine. All laws that come before congress are for the purpose of rigging one market or another.
The poor and middle class have been robbed blind. Most are still clueless as to how the process has worked.
One by one the pillars of our free market system have been discarded. Central economic planning has allocated the nation’s resources so inefficiently that genuine growth is no longer possible. Government at all levels requires a high rate of growth in order to produce enough tax revenue to continue operating.
The bull market that began in 2009 has been politically engineered without much regard for the consequences. A hand full of billionaires has benefited and will never have any regrets. For all others, their financial futures have been destroyed. Most who haven’t already are going to lose everything they have.
But, it does look as if all efforts by all of the governments in the world are no longer enough to keep the market from falling. I do believe the bull market is now over.

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War Tax and Myth of Self Government

It is hard not to be at war when hardly a soul cares. American citizens eventually absorb the burden of a war  even if they are unaware it is being fought. Since embracing the mercenary army concept it is easy to drop bombs or deploy troops to support the agendas of large financial interests.

Americans would be wise to insist congress pass a war tax that would be extracted out of each paycheck of every American. The war tax would be listed separately along with other payroll taxes. I would be surprised if even half of Americans even know we are involved in a new military adventure in Syria.

One of the ways self government is circumvented is to limit the information citizens have for making decisions.  A war tax would keep folks abreast of what a war is costing them personally.

Most people believe citizens are in charge of government when they are not.

People in China love the song “The Grazin’ is Good.” It is about the American mindset and modern values.

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Some Things to Remember

Given the assumptions mainstream economics makes about human nature, economic outcomes such as are experienced today could not occur. Rid your mind of these fantasies and all that transpires in the economic and political arenas make perfect sense.
Mainstream economics assigns such attributes as industrious, independent minded, autonomous and morally upright to each human inhabiting our planet. In real life, work is a second choice. Were the motive to live off of others not so great, economies around the world would not be so over financed.
Because the U.S. is defined as a republic, academics act on the basis that it is. They also treat the economy as if it were free market based.
There is no way to come close to understanding behavior when the very basis of all observations are false from the beginning.
Because all people bargain away freedom as comfort seekers, self government is not practiced. The value of voting is rendered impotent by the more powerful right to manage public opinion. Individual voters have never shown an interest in controlling the activities of those they elect. Instead they search for messiahs who will champion good causes. Of course politicians run for office out of self interest and end up working for those who help them achieve their personal ambitions.
In a free market government cannot be used to rig markets. Today, governments around the world are used for nothing else.
How can so many people be fooled. It is actually simple. It is all about living fantasy based lives. There is one fantasy that seems to be the basis of all others. That is the fantasy of being special. Every one of the more than 7 billion people in the world feels special. Not one knows what life is or why he is alive, but feels special of course.
I estimate that about three percent of any population has sociopathic personalities. Sociopaths become world leaders and rise to the top of other large institutions as well. They are adept at nurturing ordinary people’s sense of being special. Once assured of being special folks are more than happy to give money, life and limb to any number of “noble” causes. After all, who would lie to someone who is special? Notice that when a politician visits a city, the speech always starts out by acknowledging how special all of the local people are. Tell someone what they want to here and it gets accepted as the truth.
Given the human instinct to worship leaders, this is a bad combination.
I encourage everyone as an experiment to give up the fantasy of being special just for a day. It is really hard to be a sucker and rightfully humble at the same time.
Curbside Jimmy has a tune out called Euphemism Mountain.

We all love our homes on Euphemism Mountain but sometimes it makes sense to be realistic for a while, especially on the eve of a giant economic collapse.

Music For The Hard Times Coming

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Definition of Economics

Investopedia defines the study of economics as follows.

“A social science that studies how individuals, governments, firms and nations make choices on allocating scarce resources to satisfy their unlimited wants.”

This definition is typical but it is not exactly right.

A better definition is the study of survival. The commonly used definitions are right but they are incomplete. The most critical economic behaviors occur outside of what is normally deemed a market. The first transaction everyone born makes over and over throughout life is to trade freedom for comfort.
This is one reason why economic models do not work. The decision making process does not occur as it is popularlly explained.

Human beings are all capable of individual thought but they default to herd thinking. Most of what passes as a personal opinion is a notion the mind hears and records. The notion is only a notion but it is mistaken for a self generated idea.

One of the ingredients of a free market and a high standard of living is freedom. What throws mainstream economists off is that the rank and file in any economy trade their freedom for comfort out of instinct. A political system based on democracy is assumed necessary to support free markets. In order to have genuine self government it would be necessary to impose freedom on a population faster than the individuals can bargain away their freedom.

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What Would Adam Smith Say Today?

What is known and understood is often discarded out of convenience. Adam Smith was an economist. Janet Yellen and Ben Bernanke are accountants and economists in name only. Adam Smith understood incentives. Ivy League economists are lost on the subject of incentives.
Below are some quotes from Adam Smith that are highly relevant in today’s world.

“Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.”
Adam Smith

No society can surely be flourishing and happy of which by far the greater part of the numbers are poor and miserable. ”
Adam Smith

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
Adam Smith, The Wealth of Nations: An Inquiry into the Nature & Causes of the Wealth of Nations

Free market economics is a discipline that must be imposed on a society if a land is to be prosperous. The good of free markets cannot be noticed in the present moment but the good is always there. The role of government is to enforce free market discipline and of course government must not be allowed to be used to rig markets.

Music For The Hard Times Coming

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