Out With The Old In With The New

Out with the old,  in  with the new is what happens in a recession.  Government intervention prevents this process from occurring. When an economy slows down the damage being done is clear and obvious. The in with the new is occurring but it is  invisible in the present. Government  programs are initiated for the purpose of “saving the economy.” Because the in with the new part is stifled, the economy never recovers. There are other issues but efforts at stimulus guarantee a recovery will not occur and that a recession much worse that the one that was supposed to be avoided will occur and will be worse than the initial problem.

The recession that began in 2008 was ostensibly fixed, except that it really wasn’t. The new recession that is beginning now will  be much more devastating.  Economics only deals with simple issues that are  based on incentives and human behavior. The current  situation is simple and that is all there is too it.

Sweet Suzie’s Kool-Aid is a fine Curbside Jimmy tune.

Sweet Suzie’s Kool-Aid

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Accidents Can Happen

imagesVJ3Q2JK7The way evolution works is that some accidents are better than others. When an accident occurs in the biology of a species and it results in a greater ability to survive, it evolves into a new genetic standard. It works the same way with individual and group behaviors.

Notions of democracy had already taken root in England when colonies were established in America. Every time freedom increased, so did economic prosperity. It was the nature of the new land that independent living became a necessity among settlers. Self government evolved naturally. Self government worked better than serving a king but it hasn’t worked perfectly.

Behavior in groups is instinctive. While governments began operating in line with democratic principals, citizens were still mentally comfortable in serving a king. Instinctive behavior can be over-ridden but people are completely uncomfortable in doing it that way. People are willing to elect representatives but they relate to them as if they were kings or queens.  While constituents are charged with controlling government, mentally they are looking for the kindest master.

In 2016, it is extremely important to know what to expect from voters. Intriguing ideas will flourish but votes will be cast in keeping with  instinctive beliefs which are more powerful than beliefs established by intellect. All people will deny making instinctive decisions. All will claim to be thinking individually but they won’t be.

Instinctively, government is seen as having magical powers. According to instinctive reasoning government can fulfill any fantasy. Voters will believe anything they are promised. Instinctive beliefs still determine the outcome of elections.

Despite centuries of failures and not one success in over 50,000 years, voters will trust government to intervene in the economy. Voters will believe that wars are fought to insure their freedom when there is no evidence that this is the case. The worse the economy gets, the more citizens will trust government to fix it. Of course, embracing free market principles would cause improvements by leaps and bounds. But, instinct guides citizens to put government in charge of the economy. This is sad but that is the way it works.

Here is Curbside Jimmy’s Sweet Suzie’s Kiil-Aid.
Sweet Suzie’s Kool-Aid

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God Save The King

Thecrown influence of kings has not disappeared. Kings, queens and chiefs all evolved along the same path. Back in the old days people banded together for protection. In basic societies, the strongest, most powerful and smartest took control. In return for providing protection this person got to live off the efforts of the others in the group.  Kings, for the most part, are gone but the function of the powerful living off others continues.

Today, billionaires are the new kings. I have explained rent seeking on other occasions. Basically it amounts to using political power to privately impose taxes on society in general. In the days when kings did this, they did at least provide protection.  Today government taxes the population but corporations and certain rich individuals also tax to the overall population.  This presents a problem with lowering or eliminating the corporate income tax. A corporate tax of 35% sounds high and it is when compared to corporate taxes imposed in other countries. American corporations have the power to levy taxes as well as bear a responsibility to pay taxes. Obamacare is a good example of a tax imposed by corporations.  Corporations use political power, literally, to extract money out of the people who occupy the country. Make no mistake, when corporations get laws passed to pay them simply because they exist, that is a tax in every sense of the word.

What we are seeing in the 2016 election process are billionaires panicking over the prospect of loosing their king privileges. It has been long observed that human beings will go to greater extremes to hold on to what they have than they will to gain something new. As the fall election gets closer, the efforts of the rent seekers to hold on to power will become totally viscous.  The common word used to describe these folks is “the establishment.” Do not be surprised at attempts on the lives of candidates they cannot control. Should Americans wise up and unseat a large number of incumbents, do not expect them to leave. Chances are just as good that the president will declare martial law for a transition period and then never end up making the transition.

The establishment, as they are called, have no moral compass and will stoop to murder, theft, violence  or any other method to hold on their enormous power.

 

 

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You Can’t Fool All The People All Of The Time

1392172209000-Abraham-LincolnAbe Lincoln famously said, “you cannot fool all of the people all of the time.” He did not say that the number who cannot be fooled are so small in number that they are statistically insignificant.

How long have Republicans believed that subsidizing billionaires is part of free market economics?

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Truth is Killing Trump

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Trump has told the truth a number of times during has campaign.

The truth has no utility in politics! It isn’t used. Voters won’t put up with it. Politics is about people using government to get what they want. Voters vote for fantasies. Donald Trump began his campaign by telling the truth a few times.

After that he joined the others and focused on lies. “Make America great again.” is a lie with lots of appeal. Go back in time and try to find that golden era of greatness and you will never find it. No such time existed. The process of citizens losing freedom and government serving only those with enormous political power goes back to before the American Revolution. Corruption began early and has continued unabated to the present. Trump knows this is dishonest but guess what. People love it.

Trump gets in trouble when he is truthful. The other politicians are experienced so they stick to the lies they know people want to hear. Trump’s remarks on abortion were right on and they hurt him badly. Voters punished him just as is to be expected. Anyone can see the folly of passing a law and then administering no punishment. Voters fantasize about getting what they want without experiencing any inconvenience. Voters fantasize about government using its “magical powers” to seamlessly make abortion go away just by making it against the law.

The truth is not good enough. Sometimes it is harsh. Politicians who get elected come up with stuff that sounds better. If Trump has learned his lesson and sticks to lies, he can still get the nomination on the first ballot.

Here is Curbside Jimmy’s tune. It Seems Like All M Friends Are Dogs These Days.
It Seems Like All My Friends Are Dogs These Days.

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Dangers of Rent Seekers and Slavery

rent_seeking_corporate_welfareSlavery was so common just 300 years ago hardly anyone raised any objections. For the human species, work is a second choice. Efforts to live off the efforts of others have been ongoing for all of recorded history.  The simplest way to gain from someone else’s work is to own another human. Most Americans have ancestors who were slaves. Africans became slaves after becoming prisoners of war in their own continent.  White Europeans were serfs, bound to the land and were slaves to the land owners or landlords.

Early economists used the term rent seeking to describe the activities of the land owners on their European countries. They received rent off of the land they owned and always had owned. Their land was not bought with earned money. The land was passed down for countless generations.  The landlords produced nothing and contributed nothing towards the growth of the economy.

Modern rent seekers are the financial institutions and individual wealth holders who through their enormous political power dictate government policy. With the cooperation of congress, the wealthy pass laws that force the public to buy their products and services. Federal Reserve policy elevates profit margins that would not exist in a free market setting. Prices consumers pay remain high. In the modern world, this process is a substitute for slavery. No, in the United States, human beings cannot be owned outright. Humans can be forced, by the use of government, to work for less than they are worth. They can be forced to pay higher prices due to monetary policy that is carried our for the purpose of artificially elevating profit margins. They can be forced to buy certain goods and services.

In the old days, at least slaves knew they were slaves and wanted out of the situation. Today Americans are completely unaware of what is being taken from them.

 

 

 

 

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Just as Smart as a Dog

golden-retriever-am-i-smart-dog-wallpapers-tHuman beings can forecast the future accurately only if they think like dogs. Human Beings unwittingly use statistics and complicated models in attempts to determine what happens next. This method gives miserable results. The reasons are many but the people making the models end up being studied by others who are smarter than they are.

Dogs make forecasts by studying reoccurring patterns and they are seldom wrong. They can predict when their master is coming home. Dogs observe history as it applies to them. The K9 mind is many times more active than that of a human. They constantly scan the environment for input that is relevant to their survival.

Human beings can also observe reoccurring patterns and behaviors and they do a little bit but not enough to be helpful. The time line humans need to observe is centuries long and most humans are ignorant with respect to history. A typical American passively learns an abridged history so they know a few facts about what has happened lately and isolated events from further in the past.

Any American who is adept as his dog can compare the mentality of the American population today with that of the Germans in the early 1930s. Most will be completely confounded when the country breaks down into chaos. We can’t predict exactly what will happen but we can know that danger is just over the horizon. Ignorance and stupidity are expensive attributes.

Here is Curbside Jimmy’s tune. It Seems Like All M Friends Are Dogs These Days.
It Seems Like All My Friends Are Dogs These Days.

 

 

 

 

 

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Banning Abortion the Republican Way

To understand the difficulty in banning abortion one must first realize that there are in fact no genuine conservatives in the political arena.  The posture of being conservative is for appearance and being accepted by members of the group. The people think of themselves as conservatives provided there are no actual conservative things that take place. Evangelical Christians are no more righteous than atheists.  Conservative is all about self esteem and being perceived as being on the right side.

All Republican presidential candidates are pro-life but that is only as long as abortion remains an issue only. For conservatives a law banning abortions would serve only as a social statement. Not one in a million would have any interest enforcing the a law that bans abortion. A pro life conservative uses the  issue only as a way to declare “I am a good person.” Banning abortions would require punishing offenders. Is a $5.00 fine too much punishment? How about just a good finger wagging?

Donald Trump has no understanding of the true incentives that govern human behavior. If he did he would never suggest punishing women for terminating pregnancies. The conservatives he is trying to impress only want to be on the right side of the issue for self esteem purposes. Is there a way to ban abortion and keep it punishment free for women?

Conservatives are fine with the conservative identity. They disappear when it is time to do an actual conservative thing. Notice that Republicans never mention the fact that Trump has suggested closing government agencies starting with the Department of Education. Genuine conservatives would move to the Trump camp like a tsunami upon the very suggestion of closing a government agency. There simply are no conservative Republicans.

 

Just Another Day at the Whorehouse is a timely Curbside Jimmy Tune.

Just Another Day at the Whorehouse

 

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Bernie Sanders Looking Better

WASHINGTON, DC - MARCH 28:  Sen. Bernie Sanders (I-VT) addresses a rally in support of Social Security in the Dirksen Senate Office Building on Capitol Hill March 28, 2011 in Washington, DC. Sanders and four other Democratic senators, including Senate Majority Leader Harry Reid (D-NV), said the Republicans' entitlement reform plan will "dismantle Social Security, delay distribution of benefits to seniors."  (Photo by Chip Somodevilla/Getty Images) *** Local Caption *** Bernie Sanders

A traditional Socialist is not as destructive as a fascist.

There are five candidates running for president. Four are top down socialists and one is a traditional socialist.  That is Bernie Sanders. In all types of socialism money goes to the top where there is the most political power. Any of these candidates will destroy the country if citizens allow them to. Bernie Sanders will destroy it more slowly and there is a good chance none of his liberal agenda will ever materialize.

Trump is the next least destructive because he would break up the billionaires club and force them to reorganize. But don’t mistake trump as a free market guy.  Trump would like to cut corporate taxes down to 15% and appoint Larry Kudlow as Treasury secretary. While that sounds conservative enough, it is not conservative at all.  Corporations completely control government as it is.  Lobbyist for corporations write all of the legislation and get to borrow money interest free. While corporate taxes are lower in the rest of the world, only in the U.S. do corporations get to use government as an employee.

A tax rate of zero would actually be an ideal tax rate, but only if corporations gave up the special privileges they posses. Corporations are constantly lobbying to increase government spending. With a super low tax rate, government spending would accelerate to an even faster rate.  Corporations are the only net beneficiaries of government spending.

Trump has come out in favor of closing some government agencies but has no plans to reverse the fascist path government has taken.

Clinton, Cruz and Kasich are big government Republicans, fascists. Clinton is a Democrat in name only. No, Cruz is not a conservative. Conservatives are defined by their approach to economics. With respect to economics Cruz is either clueless or dishonest. Clinton simply never tells the truth unless by accident.

The entire political arena is likely to change before the election. The whole globe is a house of cards. It is looking like Bernie is the best choice because he would do the least harm.

In all of history, ordinary citizens have never had a net benefit from government and they are not going to benefit this time around. With modern Americans, politics is about feeling good about oneself. In politics, people are motivated by fantasy and instinctive behavior. The feeling is what counts. Conservatives are interested in conservative rhetoric. Actually reining in government to a citizen is terrifying.

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Stock Market Heads Up

032315s&pSomething changed today. The news media ran some stories that focused on underlying weakness in the economy and the stock market. The media doesn’t normally report news that might cause investors to sell stocks or position themselves for a general economic downturn.

Informing the public is an old world function of the news media. Modern news organizations are now behavior and opinion management services. Cooperation with government is at an apex. There is one circumstance under which important news is actually reported and reported actually. That is if the news is on the verge of becoming apparent from an uncontrollable source.  Major news organizations cannot afford to appear unaware or uninformed.

The long awaited collapse of the economy and the stock market may be at hand.

Notice the intermediate uptrend circled in red. Do not be lulled into believing this rally has been fueled by Americans investing money. It has all been caused by algorithms drawing in short sellers and running the stops and the Fed trying to guarantee the profitability of buybacks with a wink and a nod.  The news media participates by reporting only upbeat financial stories. The Fed also gives advance information to institutions which help elevate asset prices.

As nice as the rally looks on a chart, it has not been good enough. The public has not been drawn in and neither have honest institutions. Back in the fall, I forecast a dip in early 2106 during which the appearance would be that a bear market had started. The elite would try to draw in as many short sellers as possible to use as fuel to launch a new up leg. My take is that all efforts were not good enough and now stock are ready to collapse. All the kings horses and all of the kings men can no longer save the stock market.

When a fascist system collapses the damage is staggering. Every American is in danger of losing everything he owns.

As to my stock positions, I have added a few shorts in companies with huge debt to equity ratios and have closed out no bear etfs. Of course I don’t place stops. There is no way to  profit from short sales in a rigged market if stop orders are used.

 

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