Economics: the Dismal are Disgraceful

The profession of economics (mostly American economics) has been getting a lot of bad commentary lately.   The lack of real change in the profession since the onset of our ongoing systemic crisis has put it into the crosshairs of critics, and rightly so.  We all know that individuals can be slackers at science but a  profession's majority that chooses to ignore evidence is a tragedy and a farce.

We all know that Greenspan offered up a mild “I can’t believe we were wrong “ moment and that Krugman did his “it was group think” essay.  But really, is this all we are going to get from them?  

They seem to love their illusions. “Money never lies, but you must learn its language, or chase illusions.  And this is why economics is a disgraced profession, and continues to be so.” Jesse, here.

“A profession that claims to understand economies, and that has gained power over the greater part of our societies, has big responsibilities.  The fundamental responsibility is to ensure its perception of economies gives some useful guidance to the behaviour of real economies.  Here mainstream economics fails utterly, and has been failing for a long time.  Worse, it actively resists alternative views that might overcome its failings.  Ethics do not come much worse than that.” Davies, here

I realize that resistance to change is a very human behavior.   Also, I don’t assume that there is a simple way to motivate them to change.

The profession is part of the status quo that is desperate to stay in power.  We can vote the politicians out and boycott the big banks, but what do we do with self-righteous nihilistic academics and burro-crats?

We need to continue the criticism and shame the mainstream economists for being the shills that they are.  And we must give ear to the fringe economists who likely have better insights on how to correct our problems.  And if we must “end” economics then so be it.   

After all, the economy is nothing more than an expression of culture.

80 is Not the New 65

Here is the type of talk that drives me crazy.

Watch this video (I can’t embed it), here.

The constant hype that people will live forever is so stupid.  And, with living longer, they will also work longer.

Back in 1900 when the average life span was about 49 that argument was likely true because there was extra capacity in the human body.  Today, with average life spans in the high 70s, do you really think you’ll be productive after 70? I doubt it.  Most people can't do it physically, mentally, or both.

A small percentage of the population will do this.  I suggest it will be a smaller percentage than most think, less than 20 percent. 80 percent of the elderly need a lot of care, they live propped up on medications, spend too much time in doctor’s offices, and likely have senior moments when they can’t remember anything. The point is that the body is not genetically able to perform at peak levels after age 70.  Ever play golf with old duffers? They talk about one day of golf leading to two days of rest.  If you watch elderly people, they tend to stair step down in their abilities.

In the book the Fourth Great Awakening and the Future of Egalitarianism Robert Fogel described how in American history our population's health and stature has vacillated between highs and lows.  In the late 18^th century there was a high; people lived longer and stature was robust (eg. George Washington was over 6 feet and not considered overly tall).   By the end of the 19^th century average health and stature had diminished greatly.  Over the 20^th century both longevity and stature rose again.

Now in the early 21^st century I suggest that the trend reverses, stature and longevity will decline.  At the end of recent Apollonian eras (Enlightenment, Modernism) overall health has been better across the population.  At the end of recent Dionysian eras (late 17^th century; Romanticism) overall health has been worse.

In other words, since we are in another Dionysian era, be prepared for a big decline in the overall quality of life for most of the population lasting several decades.   If you take care of yourself, you can be part of that 20 percent who live well longer.

Update April 29, 2012:
see the  essay by Mish which is a response to this.

Wall Street--Occupy This

Someone had to say it.

Watch these videos--are we led by real leaders?

 

update

Well, I obviously wasn't the first to used the phrase.  Google it and there are many more out there.

Here is one I kinda liked:

Risk Free is Buried

Last week I discussed the S & P downgrade and focused on the loss of “risk free” investing, here.

Others have focused on the issue too.  Here are some good examples.

When Risk-Free Became Risk-Certain from Safe Haven

Whatever Happened to ‘Risk Free’? from the New York Times

The Debt-Ceiling Debate: The Death of the "Risk-Free" Investment from Money Morning

Good Luck out there.

About that Downgrade

After the close on Friday the S & P folks downgraded US debt, here.  The ramifications of this are hard to understand but I offer one view of it.

Back in the day when I was studying for the CFP (Certified Financial Planner) the mantra was that people invest in stocks because they provide an acceptable risk/reward rate of return above treasuries.  If you are not willing to accept any risk then put your money into treasuries.  We had to know the formulas for estimating future prices of stocks and one common formula used the basic idea known as the risk free choice, using US treasury bonds of some duration, often the 10 year.  The formula used the current stock price, the current treasury yield, a future date in time, projected earnings per share, and did a time value of money calculation.  So the estimated future price of a stock would be based on some acceptable level of risk above the rate of treasuries.

Now that treasuries have been downgraded, they cannot be viewed as risk free and some other AAA rated instrument should be used.  What it will be, I do not know.

Thus, estimating future returns of stocks is now made more difficult.  Thus, more uncertainty will hit the markets.

Another thought is that all the contracts and loans that require AAA bonds as collateral will now be in jeopardy because that collateral is likely treasuries.  Some bank borrows 100 million and puts down 10 million in treasuries as AAA collateral now has to dump their treasuries and swap in something else.

All this suggests that precious metals will bounce hard.  Maybe that is why they were smacked down last week as the insiders played this game.

It’s the Oligarchy, stupid

Like many in the freethinking community, I have been amazed at the changes in intellectualism in America over the last four decades.  We have gone from a culture that loved science and deep intellectual thought to one focused on fantasy and superficial musings.  Science has become the great scapegoat for many of our ills, as the conservative right encourages.

Is this really true? I don’t think so.

The oligarchic class has been the main driver of the dumbing down of America.  In their assault on progressive individualism, they have created the illusion that most scientists and academics are “lefties”  and used anti-intellectualism as the Red Badge of Courage of conservatism.  There is much support for this view, such as Ferris’ book (The Science of Liberty).  But, I think the issues have been muddled very well.

The real polarization in America is the wealthy versus everyone else.  This class warfare has been hidden for many years by the other big polarization, left vs right or democrats vs republicans.  The oligarchs don’t care about left/right; they use these moral issues as a means to concentrate more power within themselves; they don’t care which political party they have to buy off to get their way.  They encourage the public to be distracted by moral warfare while they steal all the assets and power they can.

There is plenty of evidence that both political parties desire to restrict personal freedoms in the service of oligarchy.  In Wisconsin, the republicans are taking away the right of collective bargaining.  Under Obama, the TSA is patting down children because we are all supposed to be afraid of terrorists.  Taking away collective bargaining allows the oligarchs to divide and conquer, and minimize challenges to their power.  Basically, they want many small oppositions instead of a big one.  Allowing TSA to grope our children continues the military-industrial-surveillance complex’s invasion of our privacy.  The goal of oligarchy is to restrict the number of successful people in the world.  They do that by controlling the small people.

So, I remain frustrated with the scientific community because they continue to argue from the wrong stance.  They are always trying to tell us what the Truth is instead of offering useful, doable solutions in offsetting the gains of the oligarchs.  Moreover, they are rarely willing to fight fire with fire.

An example of this is the book Merchants of Doubt that describes how much of the world of science has been undermined by big business interests and a few scientists willing to corrupt the facts.  The book “exposes how radical think tanks have created a cadre of scientists - motivated by money and ideology - to debunk established scientific facts on threats such as DDT, tobacco, nuclear weapons and global warming” (here, and see here).  Basically, oligarchs use intellectuals to promote anti intellectualism. 

“Merchants of Doubt tells the story of how a loose-knit group of high-level scientists and scientific advisers, with deep connections in politics and industry, ran effective campaigns to mislead the public and deny well-established scientific knowledge over four decades.  Remarkably, the same individuals surface repeatedly-some of the same figures who have claimed that the science of global warming is "not settled" denied the truth of studies linking smoking to lung cancer, coal smoke to acid rain, and CFCs to the ozone hole.  "Doubt is our product," wrote one tobacco executive.  These "experts" supplied it” (here).

Yes, it is a history book, a history of science.  But couldn’t they offer ideas on how to combat the problem of oligarchy?  Can’t scientists run an effective anti misinformation campaign?  Or, is it too late in the cultural cycle and anti intellectualism must prevail for more years?

Scientists continue to be dumbfounded by the oligarchy's anti intellectual campaign and they try to counter it with intellectual arguments about Truth.  Scientists are fighting a war about truth and ideas when they should be fighting about money and power.  Can they offer ways to campaign against the oligarchs? 

The World Monetary Unit

Wax On, wax off.


Krugman today rambles on about a “Trilemma” in which “you can’t simultaneously have free movement of capital, a stable exchange rate and independent monetary policy”.  I suggest he has once again misdirected the issue.  For example, he states “And this [trilemma] creates a problem for emerging markets.  They don’t want their currencies to rise sharply; Brazil, for example, is not at all happy about this.  But not letting a currency rise would be inflationary - that is, Brazil doesn’t want to give up on its independent monetary policy.”

Now, I generally assume that Krugman is a shill for the neoliberal agenda.  He has long backed the general assumptions of the FED and his buddy Bernanke.  He misdirects the discussion through the statement about independent monetary policy.

Since when does Brazil, or any other country that is seriously engaged with international trade, have any independence?  The world is global and trade benefits the masters of the neoliberal agenda.  I’d agree if he mentioned North Korea that has independent policy due to its isolationist policies.

What Brazil and many other countries want is to get out from underneath what they view is the tyranny of the US dollar.  They want status quo change; all Krugman does is defend the status quo.  Brazil and several other nations are seeking a new currency, one in which they have more say in the world.  They want a redistribution of power.  Why can’t Krugman just say this?  I assume he knows it.

We are in the midst of a currency war.  The actions of the FED are debasing the US$ in some convoluted effort to protect the oligarik class.  In the end, they will fail because these people really don’t care about America.  They think they are above and apart from it and other nations; they think they are the puppet masters pulling the strings, if you will.  It is an illusion that someday will be revealed for the silliness that it is, just like the Wizard of Oz.

In the end we will have a new world currency.  One that is tied to precious metals, although I think some base metals should also be included.  Iron needs more love.

The new currency name could be the “World Monetary Unit” or WU.  I briefly considered WMD and the word ‘dollar’ but I suspect that that word will be despised when this all comes about.  The irony about mass destruction, as in the destruction of many currencies, is also all too clear. 


Risk on, risk off.

Disclosure:  long silver

Misc Inflation--Laundromats

I have been using laundromats since 2006.  Typically, I can get by going once every two weeks.  I do two or three loads when I’m there, just my clothes and linens.  Machines only take quarters and I use the smaller machines (usually top load washers and wall mounted front load dryers).

In 2006 a laundry visit in southern Monterey County CA would cost between $5 (using two washers & two dryers) and $7.50 (three each).  The washers were $1.50 and the dryers were 25c/8 min, and it typically takes 32 minutes to dry a load.  When I moved to northern Monterey County in June 2009 the prices were $1.75 for washers and no change for the dryers.

I moved to Island County WA in June 2010.  The city I live in has two laundromats and they both were at the same rates then as N Monterey County.

I recently noticed that prices have gone up.  Washers now cost $2 a load and some dryers have been reset at 6 minute patterns (for a 30 or 36 cycle) or a 6,6,6,8 pattern (6 min each for three quarters then 8 min for the fourth).  So, two loads may cost $7, if 30 mins of drying gets it done.

Comparing three loads, it used to cost me $7.50.  Now, it may cost $10.50, a 40% increase over 5 years.

Laundromats I use have also started switching machines to more eco-friendly ones.  The small washers are being replaced by water efficient top loaders, row by row.  These all come with increased rates, about $2.50/load.  But it is hard to compare as they also have different volumes.  When I have had to use them, I still do two loads but not three.  As these new machines get installed I suspect my visits will cost between $12 and $15.  They also offer owners more flexibility as they are digital.  I expect they can be reset for different rates and cycles.  Heck, soon, they will be taking debit cards.

These costs are not that bad for me, I easily afford them.  Eventually the quantitative changes will force a qualitative change.  I may be tasked soon with doing a cost benefit analysis on owning/not owning a set of machines.  I prefer to own things that I can move by myself so I’ll hesitate at getting machines.

I do feel bad for those families that do 7 or 8 loads a week in laundromats.

ZSL Fail

The other day I was going to rant about the security ZSL that is a double short silver ETF.  The rant died because Blogger was not available for inputs (you could read my page but I couldn’t post anything on my end due to their maintenance work).  Thus, the energy to rant faded.  But, the moral is still there so I will discuss it. 

I made a lot of money this year playing the rise in silver using several ETFs, especially PSLV and AGQ.  I was feeling good too since it had been a while that I had a run of such good luck in the markets.  I sold out and went to cash at the top and watched the carnage in silver as it dropped the week of May 2^nd.  See the SLV chart.

I often use Elliot Wave ideas to plan my moves.  So, I figured the move down had to be done in three or five waves. Thinking that there should be a dead cat bounce I traded the first bounce up in May with success.  Then I went short thinking that there was more downside in silver.  That’s where I fell into a bear trap.

I bought ZSL, a double short silver ETF, on May 12.  It popped up early and I waited for that first nice v shaped dip, and bought it.  It then bounced a little and then dropped like a rock.  I was down 10 % in a few heart beats and was stopped out.   At that time I also noted that Yahoo Finance data was wacky.  ZSL and AGQ (the double long silver) were down at the same time.  WTF was this?  That relationship was clearly shown on charts that day but now you see that Yahoo shows it a little different. The May 13^th chart shows it again briefly in the 12 pm hour.  Also, note that AGQ ends the week down about 18% and ZSL is flat instead of being up 18%. (That's the ZSL bear trap I got into).  Why would they be that far apart?

Both ZSL and AGQ are advertised as being the mirror images of each other. One is double short the silver index, the other is double long.  A close look at the weekly comparison shows that they don’t really mirror one another all that well.  ZSL has more quirkiness about it, often being 5 or 6 % out of sync from the other funds that are tied to the ‘same’ index.

 

And that is the moral.  Index ETFs are just as likely to be autonomous securities; they don’t always do what they are supposed to do.  It is well known that they have price slippage and don’t track the indexes as closely as one would ‘expect’.  More importantly, they can become wild cards, trading independent of their stated purpose.   I suspect this last week ZSL was a rogue fund for the days May 11 through the 13^th.  It traded tens of millions of shares a day when AGQ was four or five times less.

I suspect that the great conspiracy theory about banks controlling the silver markets could be brought into this discussion.  For what ever reason, it sure seemed as if someone didn’t want silver to get below 33.30/oz.  Or, was this just an opportunity to unload large short positions?

All I know is that a little guy like me got played.  If pushing silver prices up will hurt the big banks I’m all for it.

Update: Here is a discussion of ETF manipulation for AGQ/ZSL on May 13th

http://www.youtube.com/watch?v=DDJ1DfYKBDM

While you're living beyond all your means

So, we averted the great government shutdown.  Meaning, I go to work on Monday.

Meanwhile , everyone is broke, especially the US.  See here.  Gold has made a move to the upside and it is killing the bankster’s plans of ruling the world.  Screw them.

Here is some old music that seems prescient, The Low Spark of High Heeled Boys from the 1971 album of the same name (lyrics; wiki).

If you see something that looks like a star
and it's shooting up out of the ground
and your head is spinning from a loud guitar.
And you just can't escape from the sound
don't worry too much, it'll happen to you
We were children once, playing with toys.

And the thing that you're hearing is only the sound
of the low spark of high-heeled boys.

The percentage you're paying is too high priced
while you're living beyond all your means.
And the man in the suit has just bought a new car
from the profit he's made on your dreams.
But today you just swear that the man was shot dead
by a gun that didn't make any noise.
But it wasn't the bullet that laid him to rest
was the low spark of high-heeled boys.



Yes, the low life's of our society always try to appear as being above us.

And, this one needs no introduction

Enough said. 

How to Create Jobs and Have Austerity Too

It seems that we always live in a world of either/or.  Paul Krugman recently (here) chided the Inside-the-Beltway folks for focusing too much on austerity measures and not on creating jobs.  He tells them that “slashing spending in the face of high unemployment is a mistake.“  Well, maybe he is correct.  I think not because I don't care for his linear view; I prefer the fractal approach.  He then goes on to discuss setting priorities correctly, as he determines them, by jobs first and austerity later.  But, why do we have to have austerity only for governments?

Why not austerity for corporations too?

We live in a world of excessiveness, as this website has described several times.  We all know that corporations exist to make money.  But, really, should corporations always try to make obscene profits?  Does every corporation have to strive for 20 percent margins? What is wrong with 3 percent?

What happens if we expect corporations to make modest profits?  Maybe they will be a little slower at cutting everything to the quick.  Being lean and mean is functional at times but is it always a good business model?

If everyone expected less then austerity would be the norm.

In our so-called free market culture, what really has happened is that growth has become more important than competition.  Through M & A activity, we have terminated thousands of corporations and millions of jobs. 

To reverse this trend we need to:

1. Place a ban on all M & A activities for fifteen years for private and public companies

2. Place a ceiling on corporate size; do not allow companies to get big.

3. All companies currently above the ceiling have two years to break up voluntarily; after that, the government comes in, takes over, and busts them up, like AT&T and Standard Oil.

4. Example:  B of A could be broken up into 50 companies, one for each state.  This would mean 49 new CEOs and new headquarters.  Think of all the new VPs it would create and all the new support jobs needed to run a business.

All of this would mean that profits would be shared across more businesses; few would be able to concentrate power; healthy competition would be restored.

Jobs are created by creating corporations.

Energy: An American Cartel?

With the Arab world in turmoil, OPEC is ready to be lit up:  the price of oil is going much higher, and, the chances that the cartel breaks up are high.  If the House of Saud goes into war then Americans have to assume that oil supply will likely be cut.  West Texas Crude could go to $147/barrel again or much higher.

And, as T Boone Pickens continues to argue, “We don’t have an energy plan” (here, at 5:40 into it, after an inane beginning), much less a clue about what to do.

Thus, I suspect we will do what we have already done, pick a fight for oil.

My point here is that if a status quo has to change then we should be planning the replacement.  Set up our own cartel with a few select friends and we control the price of oil. Otherwise its looks like we are the status quo that needs to go. 

We are an empire with significant needs.  Do we fight for our interests or do we remain suckers paying high prices and suck it up?

I know that polls show that most Americans think we should stay out of other nation’s business.  I find that to be mostly posturing.  Makes us feel good to say we respect the rights of others.  

When we get desperate at $5 or $6 gas, we will get greedy for foreign oil.  If we are not willing to get off the oil teat and stop driving our muscle cars, then the answer is pretty simple folks, we fight for resources.

And Feudalism for Everyone Else

The Rich v Them war is well under way in the US.

One thing that bothers me most is when some democratic right is being taken away.  The Wisconsin revolt is about as clear as it can be.  The rich are out to take away the rights of the little people and steal as much public property as they can.  It’s more than pushing back against the abuses of the unions, it is about taking away the right for collective bargaining (and steal some public land on the side).

Currently, anyone can bargain collectively, with or without unions.  We have the right for free assembly in this country.  Now the rich are out to take this away from all of us.  I say Screw Them.

Wisconsin started the process of denying this democratic right, here.  Basically, they are trying to allow a power grab to take place.  Krugman, for once, gets it right.  It’s about taking away rights from the little people, here & here, and giving more power and capital assets to the wealthy class.

The Koch brothers, billionaires, partially funded the Wisconsin governor’s election; they think they are buying democracy.  They also think that they are under attack and so will fight to the bitter end for their rights (to screw everyone else) here & here.  Screaming “rights for me but none for you” is a standard redneck behavior.  Not all rednecks live in trailers.  Trash with cash is still trash. 

Victor Davis Hanson, the faux democrat, tries to re focus the debate on the abuses of the unions.  They have over done it, he says.  Well, yes they have.  That does not mean doing away with unions. It means forcing them to compromise on pay and benefits.  If we do away with the right for collective bargaining then what is next?  Doing away with class action law suits?  Are they going to stop protest marches?

If they can, they will.

Meanwhile, in Virginia, they are striking at abortion by passing legislation that increases the rules and standards that abortion clinics must abide by.  It’s still legal there but the new regulations will force most clinics to close as they likely won’t be able to comply.

The conservatives don’t mind passing heavy handed laws when it achieves their goals.  I assume that if a daughter or wife of a billionaire got an abortion it would be done at home under the most pristine of conditions without any rules hindering the social engineering of their genetic line.

My father has long believed that his mother died due to complications arising from a back alley abortion.  Like it or not, legal or not, women will continue to have abortions.  It is best that a doctor does it with modern technology under sterile conditions rather than some schmuck with a rusty clothes hangar.  I hope that the clinics in VA will be able to adapt and comply.

When the capitalists capture all the politicians, here, so that they can hide their crimes and rule by proxy, we have oligarchy.  When they also steal our homes and public lands, here, we have feudalism.  Take away our right to free assembly, they believe they can live in their big houses and not worry about the growing unrest.  Hire a few more thugs and guard the gate. Let there be no rules for the leadership class; let there be lots of rules for the peasants.

In America, the capitalists are doing their best to recreate all the unfair conditions that Marx once wrote about.  When the peasants get tired of escapism via their computers and idol shows, will they, naturally and 'freely,' assemble at the gates of the Big Houses?

I suspect they will.  Stay tuned in for the next American Revolution.

Until then enjoy some political satire.  In this scene, no one lives in the Big House.

Credit Unions: Bend Over

OK, the rant for today is about the F*&^%$# big banks and their damn bought off politicians.

Over at Zero Hedge there is an essay about a bill passed in CONgress Dec. 16 that appears to be the first step toward taking out credit unions (CU).   The CUs are regulated by the NCUA and the new legislation redefines what the NCUA can do to help struggling CUs.  Basically, they won’t do much.  And, now CUs can transform themselves into little regular banks that could be then bought out by big banks.  Currently regular banks can’t own a CU as a subsidiary.  So, just change the law such that CUs can stop being CUs.  Screw You.

This will become open season on CUs by the big banks.  Get ready to put your money in your mattress.  

Mortgage Fraud as Carpet Bagging

     Today there was a good essay by Gonzalo Lira posted on the Zero Hedge website.  It told the story of a retired American couple who are a “kind, upright, not to say uptight 60-ish white semi-upper-middle-class couple who follow every rule, fill out every form, comply with every norm. In short, they are the backbone of America.”

     I feel the pain and frustration of the couple as they get jerked around by Wells Fargo.  You want to hear them say “screw you” to that bank and they eventually do.  Good for them.  I also did that a year ago when I canceled my WFC credit card and closed my bank accounts. My sympathies are with this seemingly nice couple.

     However, Lira makes a comment that I do not agree with.  He states “When the backbone of a country starts thinking that laws and rules are not worth following, it’s just a hop, skip and a jump to anarchy.”  This is wrong.  When people start thinking that way what you get is full blown Dionysian culture, an era when the Rule of Man controls the Rule of Law.  Widespread capricious and arbitrary behavior is exerted by those with money and power to push around those that are weaker.  The Rule of Law is used to protect the powerful, not the weak.  All the weak can do is post signs that say “Trespassers will be shot on sight” and make sure the local sheriff gets a donation.  When the Rule of Man dominates a culture order does exist, it is just very Machiavellian.  (In an era when the Rule of Law is dominant average people use rules to circumscribe the minor outbreaks of capricious and arbitrary behavior).

     Lira seems to think that anarchy is the absence of or disregard for the Rule of Law.  He is wrong.  Anarchy is the breakdown of society, when there are no rules or any sense of order (aka, a Mad Max scenario).  We are far from that.  Over the last 40 years America has switched from a culture that believed in the Rule of Law (and its associated concepts of absoluteness and normal distributions) to one that is embracing the Rule of Man (and its associated situational and relative senses of order).  That is, from an Apollonian culture to a Dionysian one (see this.)

     When the Rule of Man is the dominant perspective, The Rule of Law has not been abandoned—it becomes secondary and subservient as people in power use it to their advantage to gain what they want, and that may be against You.  What is interesting is that the couple was forced to abandon some of their Apollonian Modernism (follow every rule, fill out every form, be normal) and adopt an intuitive and situational sense of order.  Their quiet f***you is very Post Modern Dionysian.

     The ongoing mortgage fraud is a horrible process and many good people are getting screwed by powerful corporations.   But it is hardly new in our history.  Let’s briefly visit the land grabs of the 19^th century, our last era of Dionysian culture:

• ·         Claim jumping in the mining camps was common,
• ·         Range wars between large ranchers and homesteaders are the stuff of movies,
• ·         The railroads took vast swaths of land from ranchers and homesteaders,
• ·         Spanish land grants were cut up for use by “Americans”
• ·         Native Americans were pushed onto reservations only to have much of that land swindled from them, and
• ·         After the Civil War carpet baggers cleaned out whole towns in the South.

 It’s this last category that the mortgage fraud seems to resemble—slick opportunists using paper and pen to screw the rest.  Wall Street screws Main Street.

   People, such as the banker fraudsters, who are in the midst of a huge power-play, cannot be swayed by “reason.”  Only power can offset power. Our politicians could do it with paper and pen.  But, they would have to be coerced by something more intimidating than the idea of losing their bankers. Threats from the little people to vote the bums out will work on some; on others…

Well, they used to hang carpet baggers didn't they? Vigilantes may have to step in and right some wrongs. I'd settle for tar and feathers as that would be more fun.

Munger’s Senior Moment

A couple of weeks ago I wrote my brother that if the wealthy elite ever tell us to “eat cake” then we will know it is time to pull out the guillotines and have ourselves a revolution.   The cake is, of course, unemployment checks, American Idol, and food stamps.  My, they are so generous to provide these handouts to all us commoners.

While I savor the sentiment I suspect such a thing would not happen today.  The French Revolution was very different than the kind of crisis we are in now.  That was an Awakening which is fundamentally different from our current Secular Crisis.  Both are similar because they are inverses of one other.  Awakenings are cultural transformations steeped in the confidence of self awareness and proud arrogance.  Secular crises expose deep rooted lack-of-confidence and a loss of social identity.  The question before us now is Who are we as Americans? What kind of nation are we today?  Living on legacy and bravado doesn’t really cut it now.

Charlie Munger of Berkshire Hathaway came out today and told all of us to “Suck it in and cope.”  He told us to eat cake.  And most everyone just took it like wimps.   There is no confidence in America anymore; our leaders expect us to just take whatever crap they give us.  My point here is:  without self awareness Munger's proud arrogance is just greed and crap.  Sorry Munger, no one has any confidence in you either.

Reference:  http://www.bloomberg.com/news/2010-09-20/berkshire-s-munger-says-cash-strapped-should-suck-it-in-not-get-bailout.html