Sunday, May 27, 2012

Bloggin' Be My Life

God, Yes or No Is there a God, or isn’t there a God? Where does Philosophy stand on this question? Who am I? Where did I come from? Why am I here? Where am I going? These are the concerns of Philosophy. That there was actually a whole discipline of education that was concerned with this subject, and that they were going to discuss it in an open, objective manner elated me as a young man. Since then I have never stopped reading or thinking about this subject. I bought the autobiography of Mahatma Gandhi because it was entitled, “The Story of my Experiments with the Truth.” To find the Truth, that was always my goal. In order to have experiments with the truth, one must know the truth. What Truth had this Mahatma Gandhi discovered that he could write a book about his experiments with it? Right now Mahatma Gandhi is sitting on the shelf. I’ve read half of his Autobiography. I lost my enthusiasm for his book because of his statement about God. He said basically; “I was never concerned nor did I get involved with arguments for and against the existence of God, because I had always known from childhood that God existed and I needed no further proof …” Since the beginnings of civilization, mankind’s relationship with Truth has been intimately entwined with the notion or concept of God, and the possibilities of revelations from God. If your concepts of Truth stem from God and His revelation, then it should be of primary importance that you first establish the Truth of God. If you cannot establish God as a fact, then what Truth can be drawn from an unfounded or unconfirmed suspicion? No Truth can be drawn, only more suspicions. Mahatma Gandhi was not a philosopher. He was a religious mystic who placed his belief not in Truth, but beyond Truth. But Mahatma points out to me an interesting phenomenon. There are people who know, without knowing and they need or desire no information to the contrary. But I know from reading my philosophy books that this is not the case with all of mankind. Philosophy is an integral part of every human culture. And those that have been concerned with this subject matter are known to the rest of us as the deepest thinkers that the human race has had to offer. So, consulting the greatest thinkers who have ever lived: “Is there a God or isn’t there a God?” Well, on this subject, the greatest thinkers who have ever lived aren’t much better off than you and I. For everyone who says that there is a God, there is one who says that he is not so sure, or that there is not. If you want to read some pro-God(s) philosophers you can start with Plato, Augustine, Aquinas, Descartes, Pascal, Spinoza, Leibniz, Berkeley, Rousseau, and William James. No God people: Epicurus, Voltaire, Hume, Kant, Schopenhauer, Herbert Spencer, Nietzsche, Russell, and Sartre. Spinoza, Albert Einstein, Tom Paine and Voltaire are often listed in both of the above categories because of their unconventional notions of God. But they are all non-Christians and disbelievers in any conventional religions. What do I think? There are basically three types of God: the Metaphysical God, the Infinite Anthropomorphic God and the Finite Anthropomorphic God. The last two I find logical impossibilities. The first, that there is something that keeps the planets floating in space and living things alive, seems without doubt. But what this thing is, how it operates, what are its qualities or attributes, and how it is connected or related to matter, I have yet to define or determine satisfactorily. Aristotle, Albert Einstein, Thomas Paine, Confucius, Buddha and many others have held a similar belief. So, I feel that I am not alone in my ignorance.

Thursday, May 24, 2012

Bloggin' Be My Life

MAJORITY RULE AND DEMOCRACY I think that most folks here in this country have the above two topics confused. Somehow many Americans have come to believe that these two concepts (majority rule and democracy) are interchangeable or one and the same, or synonymous. In my opinion, nothing could be further from the truth. What is wrong with regards to this majority rule concept? Well, let’s say that there are only three people in the world, me, my one-eyed perverted cousin, Screwy Louie and Bo Derrick. The three of us keep bumping into one another and fighting over all sorts of things. So, we decide to establish a Democracy to facilitate a peaceful co-existence. The first rule of conduct that we discuss and agree upon, is that we will all agree to abide and conform our individual eccentricities to the legal vote of the majority of the participants in this our new government. I agree. My cousin, Screwy-Louis, agrees. Bo agrees. So everything goes fine. But then after a couple of political gatherings, my cousin Screwy Louie suggests that he feels that it is an imposition on the body politic that the members, of necessity, be required to wear clothing. He makes a motion that all governmental meetings be conducted in the nude. Bo votes nea. Myself and Screwy Louie vote yea. Of course, Bo is a party pooper and she argues for a bit. But then in the spirit of freedom and representative democracy, she agrees to attend all future meetings a la naked as a Jaybird. This goes great and proceeds well for a number of meetings. But then Screwy-Louie gets motion sickness again. He suggests that the condition or requirement of nakedness for official government meetings has produced among some of the government members an anxiety or discomfiture, and he makes the motion that government representative, Bo Derrick, be assigned chairperson in charge of “lessening tension” and facilitating a relaxation of political anxieties among and between the other members of the parliament. After considerable deliberation and much consciousness raising, I second the motion. Bo, unfortunately, is the lone dissenting vote. She states her case and gives her reasons and logic, but after a re-count and a roll call, the vote remains the same. Bo then states that she don’t care what government don’t allow, she gonna put her clothes back on any old how. As Bo attempts to re-dress the grievances, the remaining members of parliament discuss the situation and come to the conclusion that the use of force – a pre-preemptive strike – in this instance of clear and pressing danger to national security, is of necessity. They decide that the only way to get “action” in this case of parliamentary impropriety on the part of the minority “wimp” is to call for a red alert. An attack plan is devised. The plan of action will be categorized under the secret file heading “Operation Bo-Banger Diddily-Bang Bang-Wanger” or “I Can’t Get No Satisfaction.” This will be an all out, no holes barred invasion. Any rights to privacy or any other written or unwritten previously agreed to parliamentary crap will be temporarily suspended. And there will be no cameras allowed on the floor or the walls or the ceilings. Well, as you can see, if the rule of the majority is the sole and the utmost principle of fair, honest, representative government some body in this government is going to get miss-represented; or under-represented, or over-represented ... maybe. However you choose to look at it, unless Bo is well skilled in the martial arts, or kung-fu, ginsu, and tofu, she is about to have her constitutional rights violated, assaulted, and circumspected. I think in our society today, we have turned this majority rule thing into a tool of power and domination for which it was never intended. There are certain things that are not subject to a vote of government. Like Bo’s right to govern over her own body, or the right of you and me to determine who, what, where, why, or for what principals or principles we will sacrifice our very lives. These things are not subject to a vote of the majority. Our forefathers recognized this. They even wrote it into the Constitution. They stated that there were certain rights that were inalienable. Inalienable: unchangeable, absolute, immutable, not able to be forfeited, undeniable, unassailable, not suspendable etc. And that among these rights were an individual’s right to his LIFE, his liberty, and the pursuit of his happiness. Most people understand these things when it comes to applying these rights to themselves. The problems seem to come when the other guy expresses his right to these same basic principles. The framers of our Constitution also realized that this language was a little vague and could be manipulated or misrepresented. So they clarified this notion of inalienable rights and listed SOME of the rights that they thought could be taken away under no circumstances. We call this partial list our "Bill of Rights." Now, as far as I am concerned, I have many rights that are not listed in the “The Bill of Rights,” or in the Constitution of the United States. Our Forefathers agreed with my assessment. They included in the Constitution a special amendment stating just that. Amendment IX: The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people. Just because a right is not listed or written into the Constitution, does not mean we don’t have that right. Justice Scalia please take note. The Constitution is not the end-all to political rational thought, or individual freedom, but it is a good guideline or starting point. And I think that is what it was meant to be. It is one of the shortest Constitutions ever written. We should understand the intent and spirit in which it was written. The majority rule principle works fine, and under many, many circumstances works well. But there are some decisions that require a much wiser principle of judgment and should be put to a tougher standard. And what is that tougher standard? I don’t know. You think about it. This is your country and your government also. This majority rule principle is a system or technique that was agreed upon by the participants in this democracy, as a means to facilitate and promote the concept or philosophy of democracy. It is not ‘the’ democracy. Democracy is the philosophy of a political ideal in which the people of a group, state, system, country etc., attempt to rule or govern over themselves. Majority rule is simply a voting technique used, hopefully, to achieve the intended goals of a democracy. If we want to get Constitutional on this point, or try to determine the actual intent of our forefathers with regards to this issue. I think that they were very clear. If they intended that majority rule would be the ultimate criterion in the judgment or enactment of a law or rule within their new society, or government, they would never have bothered to set up two houses for voting – the Senate and the Congress. One house based on population, the Congress; the other based on participation in this new Democracy, the Senate. Obviously this action shows that they were concerned, very concerned, with setting up a more acceptable and representative technique for judgment than the questionable notion of Majority rule. Also, if their intention was to have a country governed solely by the concept of Majority Rule, they would also have abolished individual state government. We should consider it our birthright as Americans to be seeking out these higher, more just, more fair, more tolerant, more understanding standards. We should be trying to make our government more representative of its diverse population … not less. We don’t need less democracy. We need more democracy. It may certainly be true that this country needs less bureaucracy, but we certainly don’t need less democracy. We need more cab drivers, more fishermen, more school teachers; more everybody taking part in our government. This won’t be easy to do, but that is no reason for us to give up. Democracy was a world revolutionary idea back in 1776 and it is still a good idea. Don’t push for less democracy and less representation in your government. Push for more democracy and more multiple and varied representation from all classes of our society. If you think all your neighbors are stupid, my guess is they probably think the same of you. If indeed our neighbors are stupid, then it is our responsibility to educate them. If there are segments of our society that are not represented, then let’s think up democratic ways to get them represented. If the group exists, then they should have representation; rich and poor, upper, middle, bottom and top. Homeless or estate owners, we are all human beings and we have a natural right to be. It comes from the simple fact that we are. Or else, we wouldn’t be, would we? If you want less something, push for less bureaucracy, but never, never stop stretching out for more democracy. It’s this notion of democracy and all the freedoms contained within this concept that has made this country the great nation that it is. Don’t be confused by the babblers. It is not Capitalism, or Socialism, or even Baptism. There is no ‘ism’ involved here at all. It’s that notion of democracy. It’s that feeling that you get inside when you hear those words. “All men were created equal”... We can joke about it and even debate the real world legitimacy of the concept but, deep down inside, we all know what those words mean. We don’t need a clarification or an amendment to the Constitution to explain it. You and I both know what those words mean. And it is this respect for one another and this recognition of these mutual rights; the right to be ... to be free ... and to disagree that distinguishes the United States, our Country and homeland, from all of the others on this planet. So, “You have a Republic ma’am... if you can keep it.”

Tuesday, May 22, 2012

Banking and Money

Banking and Money Despite comments to the contrary by John Kenneth Galbraith in his book, “Money: Whence it Came and Where it Went,” I have found the subject of Money and Banking very perplexing. Mr. Gabraith said that money was very simple and that anyone could understand it. I don’t think so. Not only that, I have come to the conclusion that the whole banking thing was a scam, almost, from the beginning. Let me explain my confusion. In the beginning, there came about the first bank. This first bank was basically a vault. People who had accumulated large amounts of gold, and silver got tired of trying to hide it under the floor boards of their cabins or in a secret place behind the fireplace. So, when they heard that some guy had opened up a bank where they could put their gold and silver and have it guarded and protected, they were very pleased. These wealthy people with surplus gold and silver took their money down to this bank and “deposited” it. The bank owner gave these people a receipt. This receipt was a certificate of deposit. It affirmed that “So and So” had “X” amount of gold or silver stored in this bank. Up until this point everything seems to be on the up and up. The people who had the receipts began to trade these receipts as if they were actually gold or silver. This became accepted as legal and legitimate by most people. To have this certificate of deposit in your possession was as good as having the actual gold or silver. Up to this point I think everything is still legitimate. This next evolution is where things begin to go haywire. The man who owns the bank has a bright idea. He thinks that it is a shame to have all this gold and silver sitting in his vault when there are so many good, trustworthy people out there in the world who could put it to good use and would be willing to pay for that opportunity. He talks with his certificate of deposit holders and suggests to them that if they would be willing to loan out their accumulated assets, instead of paying a service charge for the privilege of having their gold and silver protected in his vault, they could actually receive a dividend. This is, in my opinion, where everything goes coo-coo. Without getting into the obvious problems involved in the recording of assets and debits and who has what and just sticking to the basic principles involved, I see a big problem here. The problem stated simply is this: Mr. Jones has deposited $1,000 in gold. He has a certificate to prove it. Mr. Smith has borrowed Mr. Jones’ $1,000 and he has a loan contract to prove it. But the bank now has nothing in its vault but a promise. Now this all would have been okay if Mr. Jones understood that until his loan was paid back by Mr. Smith, he didn’t have access to his $1,000 anymore. But as we all know, this did not turn out to be the eventual case. So, as time rolled on and people deposited money and others borrowed that money, the bank recorded assets into the millions, and all the while it could really not have a cent or an once of gold in its vault. The bank could have nothing but a ledger full of promises and no gold at all. When you think about all of this it begins to sound like that old Abbot and Costello routine – quick here’s two tens, gimme a five. Was all of this legal? Well, legal or not legal, most people didn’t really understand what was going on. And because of this lack of understanding, we had Jimmy Stewart standing on the top of the counter at his local bank trying to explain to the bank customers that there was nothing wrong in the fact that the bank had no money to give to its depositors. Jimmy explained that the depositors’ money had been reinvested in their own communities. This knowledge satiated the riotous crowd … in the movie. That fact really didn't solve the problem but it made the depositors feel better. Today even this is no longer true. Depositors invest in American banks. American banks invest in the stock market which invests in the global economy or directly overseas. American savings are thus being used to support overseas competitors. Americans are paying for their country's financial undermining. In the movie everyone understood what Jimmy was saying, but in real America nobody got it. They called this phenomenon “The Bank Run.” The bankers tried everything that their cleaver little imaginations could come up with. Nothing seemed to work. The people still didn’t get it and one might ask: “What was there to get?” The banks had to solve this problem and they tried. Banks got together and formed coalitions. They each kept a percentage of their deposits in reserve and if one of their coalitions experienced a “run,” they ran to its rescue with bags of money in temporary loans. This worked for a while for small runs, but when large numbers of people began to panic about the whereabouts of their life’s savings, whole coalitions were “bank-rupted.” At this point, we have a good many problems with banks. This problem could have been solved by not allowing banks to loan out other people’s money; or by turning a bank into some sort of investment fund – like the stock market – where the risks were explained to the depositors and they were given the choice to participate or not participate. I would have to say that what the banks were doing was certainly morally suspect, if not fraudulent and illegal. They were promoting the unsubstantiated notion that they had people’s money when, in truth, they did not. This is similar to the well known Ponzi scam today. Ponzi’s idea was to get people to invest in him today on the promise of a large return on their investment tomorrow. The fact is that he had no investment program whatsoever and he simply manipulated the large sums of money coming in with staggered payments going out. As long as more money was coming in than was going out, Ponzi was rich and his investors were happy. The whole thing became a matter of bookkeeping. Now you might say that the bank is not a Ponzi scam because it has legitimate investments. This is true, but if those legitimate investments prove to be unreliable then you have the same situation as with Ponzi, nevertheless. Then we have borderline elaborations on Ponzi – gold mines out west, swamp land in Florida, the Panama Canal fiasco, and last year’s failed corn crop. Banks have gone out of business, over the years, because they were outright Ponzi scams with no investments at all; because they made false claims about their investments; because they made legitimate investments that failed. But the problem that bothered bankers was not the morality of their initial idea but what to do about banks that made good investments but were driven out of business by a sudden lack of confidence on the part of their depositors – the bank run. How they could have their cake and eat it too. Clearly a bank could not loan out its money to entrepreneurs and still have it on hand to return to its depositors on demand. Now, it is at this point that the system has become an impossibility. It clearly and simply does not work, and there is no solution. You can not loan out the money and still have that money readily on demand for the depositors. This is impossible. One thing cannot be in two places at the same time. But, this sleight-of-hand idea was so advantageous to society because it provided money for investment, expansion and growth that those involved in profiting from this idea wanted to devise an acceptable method for promoting what was clearly an impossibility. And thus has evolved today what we call fiat money, the central banking system – and here in the United States – “The Federal Reserve.” What was established was the advantages of paper money as a medium of exchange over the historical preference for precious metals. Precious metals were subject to the caprice of nature, random placement, and uncontrollable distribution. People who had no claim to wealth could capture it. Paper money put governments in control of the quantity and the fair distribution. Clearly total control over paper money should be under the complete control of governments. But because of peoples proven historically, verified mistrust of governments in general, most nations have developed co-operatives with non-government entities. We call our co-op The Federal Reserve System. All industrialized nations have one type or other of the same type co-op, or Central Banking System. So far this system has served to perpetuate and impossible idea. For example, when Mr. Ponzi had run into his shortfall – the point at which his payments going out were greater than his payments coming in – J. P. Morgan or the Rothchilds saw in his scam enormous long term potential and therefore decided to loan him money to carry him over his temporary cash flow problem, the Ponzi scam may have continued indefinitely. But, it would have finally collapsed when Ponzi had finally reached the saturation point. That point being when there was just not enough money available in the world to make the interest payments on all of his promises. In effect, Ponzi’s system was a “Designed to Fail” system. The Central Banking System is similar but much more sophisticated and self-perpetuating. The Central Banking System does not create money from nothing as many people suggest. If it did then this system would self-destruct when the supply of money exceeded the world’s ability to absorb the funding. Would this ever take place considering expanding populations and expanding economic growth throughout the world, and product diversification and artificial demand creation for wants in addition to needs? Maybe not. Inflation is simply the release valve on this money generating steam boiler. As long as it is allowed to expand reasonably, there would be no problem. But if the supply of money came onto the world or an individual nation faster than the population and the various demand growth factors – you would have an inflation problem. If inflation or the government printing is allowed to grow too fast or without proper regulation then prices would rise uncontrollably. Products would lose proper value coordination and economic instability would eventually result. But this is not the situation which exists with the Central Banking System concept. This present system is based on debt creation. Governments borrow via a system of notes and bonds which are handled for a fee by their Central Banking systems. The central banks collect the vigorish. They handle the sales for the governments for a fee – vigorish. [The vigorish is not the problem when we talk about the National Debt. The problem with the National Debt is the interest being collected by the Bond purchaser. The Federal Reserve Bank is just the salesman for the government bonds. It charges a small “commission” which is negligible.] As I see it this system has more potential points of destruction than does the politically unappealing Creating-Money-from-Nothing System by sole government control. This system can also destruct from the same causes stated in the non-debt creating system mentioned above. But in addition to this possibility this debt system can also self-destruct from other factors. It can also self-destruct when and if the interest payment on the created debt obligations becomes greater than the government’s money supply sources – people or countries willing to buy debt, treasury bonds etc. This would be much the same as if your basic payment on your credit card exceeded your income. Will that ever happen? I don’t know. The inflation safety valve would compensate or, as above, explode due to lack of public confidence. And, of course, there is that same notion of infinite world economic expansion as mentioned above. And then, of course, the government can simply keep creating more and more debt even to pay impossible debt. How long could such a process go on? I don’t know. But paying debt with added debt can only go on for so long, before something negative would happen. The vigorish could also become a problem. In other words the Central Banking fee could become so bloated as to create a debt problem in itself. In other words, the cost of the loan transaction could eventually outweigh any gain from creating the debt in the first place. Right now that fee is 7% as I understand it. If due to inflation that cost escalated to 20% or 30%, this problem could develop. But by that time the monetary system would probably have already collapsed due to inflation. So maybe that is a specious argument. An added problem with the Central Banking System is that it has been partnered with the various national governments of the countries who have such systems – which may be every country in the world as far as I know. So instead of the banking system backing itself up via a conglomerate of banking institutions and becoming the bank of last resort for all banks – as is the claim – the government becomes the bank of last resort. The problem here is that in such a system if the bankers decide that they are tired of making money “the old fashioned” way and they would rather do it the easy way. They can simply steal their depositor’s funds, and loan them out by fraudulent and deceptive transactions and then petition the treasury to fund them out of their financial difficulties. To put this simply, if an unscrupulous banker or group of bankers can figure out a method of divesting their banks of its capital yet still create what appears to be a legitimate paper trail of investments, they can double their personal wealth rather cleverly, simply by ripping-off their Federal or National Government. The same thing can be done on an international basis via the IMF and the World Banking System. And I am of the opinion that this type of thing has already been done several times over – not only in the historical past, but in the recent past. And it can work both ways in a world system. Not only is it possible for the world banking system to bankrupt individual nations if it so chooses; it is equally possible that cleaver national bankers can swindle the world system. [I think that this technique was used in the U.S. S&L failure and the Commercial bank failure; and in the recent stock market crash; and most recently in the real estate boom and bubble. It is my personal opinion that this is the current method for bankrupting the U.S. Treasury. It began seriously under Reagan and has been escalating under every succeeding Republican administration. And what is the answer to all of this? I don’t know.

Monday, May 21, 2012

Nothing Is Important

Bloggin' Be My Life Nothing

Nothing has been on my mind, ever since I can remember. As a child I often thought about nothing, day on end. As a teenager it was a constant pre-occupation. Little did I know that nothing was really that important.

I have since discovered that nothing really matters.

“Nothing” is a key concept in Philosophy, Religion and Science. If you believe that nothing is possible, religiously speaking, you can be a Jew, a Catholic, a Protestant or a follower of Islam.

If you believe that nothing is impossible you can be a Hindu, a Pantheist, an agnostic, possibly some type of Protestant or an atheist.

Followers of Confucius, Tao, and Buddha don’t really care about nothing. They care about other things but not about nothing.

In Philosophy John Paul Sartre wrote a whole book about nothing. It was entitled Being and Nothingness. I’ve never read any book about anything that was more confusing than Mister Sartre’s book about nothing.

Trying to figure out nothing isn’t easy.

There is more to nothing than meets the eye.

Lots of Greek philosophers thought about nothing - Empedocles, Zeno, and Epicurus to name but a few.

In Philosophy all of those who believe in nothing believe in God. In fact, they believe that God is nothing. If God were something, He could be defined, and God is beyond definition.

Christians are the most devoted followers in their belief in nothing. To say that nothing is impossible would be to deny the divinity of Jesus. Because If God were something, He would have to be all things. He cannot be one thing in particular. If He were all things, then all things would have to be divine. If all humans were consequently Divine then what would distinguish everybody else for Jesus?

They had a big vote on this at the council of Trent or Nance or someplace.

At this council the Pope and all his Cardinals voted strongly in the favor of nothing.

The Roman Catholic Church has played a big part in establishing nothing throughout the world.

Martin Luther once proclaimed that God was busy cutting rods from birch trees for those who persisted in asking questions about nothing.

Science is in a big ta-doo about nothing also.

Lavoisier came to his notion that matter could neither be created nor destroyed. This is now called the law of the conservation of matter. Julius von Mayer came to a similar conclusion about energy. Now we have the law of the conservation of both matter and energy. But these laws or theories give confirmation to the impossibility of nothing.

Both Lavoisier and Mayer had established that something is always something and can never be turned into nothing.

But then came that famous war correspondent and part time scientist, Albert Einstein.

As a part of his theory of relativity he proclaimed that Space and the aether are nothing. He claimed that space and the aether are a mere attribute of matter.

This is confusing but as long as matter and energy are still indestructible and only convertible, science is still Hindu.

But recently some folks are talking about anti-matter and matter and the notion that when they collide they annihilate one another and turn into nothing.

If all the matter in the Universe could be annihilated then nothing can be possible.

If nothing is possible then science is no longer Hindu but Judeo/Christian. God would be nothing and something would be His unexplainable miracle.

Monday, May 14, 2012

A Brief History of Time

A Brief History of Time By Stephen W. Hawking Book Review
By Richard E. Noble I read this book several years ago and since that time I have read it several more times. Since my first reading, I have not been able to get this book off my mind. On that account I should give it five stars. But the things that I can’t get off my mind are all negative criticisms. On that account I should give it one star. My criticisms start before I even get to the author. In his introduction Carl Sagan speaks of “Einstein’s famous question about whether God had any choice in creating the universe.” Unfortunately Mr. Sagan paraphrases this one of Einstein’s many famous questions incorrectly, as my memory recalls. If there were a God why would he not have a choice in creating the universe? This paraphrasing makes no sense. Einstein’s question as I recall it was whether or not God had any choice in his own existence. Now that is a big question. Mr. Sagan’s incorrect paraphrasing makes Einstein’s “famous question” no question at all. Asking whether God had a choice in his own existence is a subtle way of stating the impossibility of the God concept. If there is a God he could not have had the choice to exist or not to exist. He either was or he wasn’t. If he wasn’t, he could never have been because something cannot come from “nothing.” The answer to the rhetorical question is that he had no choice and therefore was lacking in freedom. God cannot be God and be lacking in freedom. Therefore the concept of God is untenable. The above is not my opinion; it is simple philosophic logic that can be found in any philosophy book debating the God concept. This was really a rhetorical question in my opinion on the part of Einstein. He was expressing his dubiousness on this subject. If there is a God whether or not to create the universe is no problem at all; God can do as he pleases. He can create it or not create it. Who or what is going to make him do it or not do it? What logic says he can’t do it? Sagan’s question makes no sense. There is a second interpretation of this question. Could God have made the universe in any other way than the way that it is? This question was already asked and debated vigorously. Gottfried Leibniz presented this notion in 1710 Essays on the Goodness of God, the Freedom of Man, and the Origin of Evil. Leibniz’s point was that this is the best of all possible worlds. Of course, if this is the best of all possible worlds, God could not have been all that bright according to Voltaire. Voltaire mocked and ridiculed this notion in his popular play Candide. Einstein certainly was aware of all this. I doubt he would have asked the same foolish question once again. Did God have any choice in his own existence, is a much bigger question. This question is more of what I would expect from Albert Einstein. And this is Einstein’s question as I have read it in biographies of Albert Einstein. Albert was not a believer in any anthropomorphic God notions. He proposed a cosmic concept of the universe based on physics and science. Now we come to Mr. Hawking and friends. Unfortunately there is a lot of sloppy language going on in the scientific community. Mr. Hawking is just one of many who “slop” around terms to the point of meaninglessness. One such term is the word “universe.” The universe is defined briefly as, “all that is.” I am sorry but there cannot be two “all that is.” All that is covers everything. It follows then that there can be no multiple universes, parallel universes or competing universes. There can only be one universe. Scientists are obviously using the word “universe” with a different understanding than “all that is.” Somebody should explain to readers how the scientific community is defining the word universe. Other improperly used words are infinite and annihilate. The universe cannot be at the same time infinite and limited. An infinite universe cannot expand. It is already infinite. It can’t get no bigger than that. A particle cannot be annihilated and at the same time transformed into something else. If a particle is annihilated it not only disappears, it ceases to exist. It doesn’t just disappear. As far as I know annihilation is impossible. Therefore if a particle turns into light and/or energy, then it hasn’t been annihilated. It has been transformed. It can only be annihilated if it has been turned into nothing – and this is an impossible theoretical state. A state of “nothing” does not exist. Space is also something. Its influences may be so minimal that they are not necessary to mathematical equations but space is more than a state or condition fabricated by gravity and other magnetic forces. There are scientists who are presently working to discover exactly what space is and what its influences are on the universe. Light travels in straight lines in all directions infinitely – but it also bends. This is impossible. It does one or the other. It either travels infinitely in straight lines or it bend and wiggles its way through space. If light bends and wiggles its way through space then it certainly cannot be used as a measurement of the distance between planets or galaxies. Unless someone can measure the exact amount of wiggle at every distance in space – which I doubt very much is possible. What the heck are these scientists talking about? An ellipse is an extended circle? Then I suppose a circle is a square with rounded sides. I know these guys are trying to dumb this stuff down for folks like me but if they dumb it down too much they are me and then we are all going nowhere. I’m not a Big Bang guy and neither was Mr. Hubble. I have read that Mr. Hubble who established the notion of red shifts and blue shifts said that he in no way concluded from this observation that the universe is actually expanding or that any Big Bang was involved. I think the Big Bang notion is comparable to “the world is flat” notion along with the Ptolemaic universe and phlogiston. It is being challenged by plasma theorists and others. The whole concept seems to be imploding in favor of an infinite, self-evolving universe. I am reading a book at the moment by Eric J. Lerner The Big Bang Never Happened. It is making some sense to my way of thinking. Question posed in Mr. Hawking book: What was God doing before he created the universe? Answer provided in book by St. Augustine: Time did not exist before the beginning of the universe. So then where was God? He obviously did not exist before the universe either. Is God not a part of “all that is”? Does he exist? If so then he must have existed within the concept of “all that is” – the universe. No universe, no God. And if the universe had no beginning – and the Big Bang cannot be construed as the beginning of “all that is” – then St. Augustine may be right. Time began when the universe began; the universe always was and always will be (in one shape or another) therefore time always was and always will be. Mr. Hawking, Mr. Sagan and others in the scientific community I don’t think are/were big on philosophy. They know their math but seem short on logic and semantics. This book to me is pretty much an exercise in scientific madness (time going backwards, the universe collapsing, parallel universes, universes that are cone shaped, or infinite but finite and limited) but it is not just Mr. Hawking who has gone mad. He has a whole bunch lined up to jump off the edge of the universe and splatter on the nothingness below following eagerly behind him.

Saturday, May 12, 2012

DuPont, Old Hickory, Tennessee

DuPont, Gunpowder, and World War I “Old Hickory” Tennessee
By Richard E. Noble

The DuPont family is an American saga but it’s the World War I gunpowder factory established in Tennessee that has caught my interest at the moment; but before we go there let’s briefly hit on the DuPont’s.

As you have probably guessed the DuPont’s were from France. The old man was a supporter of the American Revolution and democracy but when “revolution” hit France he and the wife and kids had to blow Dodge.

They landed in the Colonies and settled in Delaware.

Papa DuPont had one boy who had a pretty good job in France before the hasty departure. E. I. DuPont was working with Lavoisier, known today as the Father of Chemistry, at the national arsenal making gunpowder for the French government.

Lavoisier knew his stuff and E. I. DuPont learned all the details. Thomas Jefferson was actually the one who put the bug in DuPont’s ear about a gunpowder plant. And in 1802 E. I. DuPont started to manufacture black powder in Delaware.

Lavoisier who had been moonlighting as a government tax collector on the side got his head chopped off.

The gunpowder business had its ups and downs – not to mention an explosion every now and then but there was one industry that helped this business along considerably – war.

The War of 1812 was good for the DuPonts and then the Mexican War in 1842 moved things right along.

The Civil War was just what the doctor ordered and the Spanish American War put the frosting on the cake.

But by the time World War I came rolling along the gunpowder business is “exploding” big time. Gunpowder is being used everywhere; in mining, in bridge building in railroad construction – the gold rush and the 49ers didn’t hurt anything either.

Then there were the Panama Canal and various Dams and whatever.

By this time the DuPont gunpowder business didn’t really need World War I. But World War I needed the DuPonts.

When the European Allies had exhausted and pushed all their powder manufactures to capacity they came to the DuPonts. But the DuPonts had learned about the trials and tribulations of the warring business.

War was good business but it also had its problems. There are two big problems with war; wars often start without much notice and they stop in the same manner. As a business you can’t afford to stock up for a possible future war and then stop production on a dime. Having steady business with consistent sales and a predictable growth rate is better than the boom-boom and bust of a war economy. And by this time the DuPont civilian business was great – lots of money, good steady growth. The DuPonts were fat and happy. So when the Allies came along and asked them to increase their plant and production by about ten to thirteen times – and do it now – the DuPonts were hesitant.

The DuPonts told the Allies that they didn’t have the money to expand their facilities to about thirteen times their present capacity. Colonel Buckner, DuPont vice president, said; “We can produce the explosives you need and we think that we can produce them in time, but only if you assume the financial risks of an emergency expansion. You are asking us to build costly plants that will have value only as scrap when the war ends. You are asking us to contract, on your behalf, for raw materials that may not be needed next month, or even next week, and which may never reach the stage of finished goods. I repeat, it’s your war and the risks must be yours.”

The Allies had no choice. They started loading the DuPont’s treasury up with money. They paid a fifty percent advance on powder and agreed to pay a price per pound that would cover the cost of building new plants.

DuPont then really started rolling. Engineering and construction employees went rapidly from 800 to 45,000 and then to 100,000; 8 million pounds of explosives went in one year to 200 million pounds and by the war’s end they were producing 893 million pounds of explosives. In the four years of war nearly 7 million was destroyed in accidental explosions and 347 men lost their lives. But in 1917 the United States wanted to get in on the action. The U.S. didn’t have a single world scale munitions plant in the country. They contacted DuPont. They wanted the DuPonts to build a plant that could produce 900,000 pounds of powder per day. The DuPonts really, really didn’t need any more business. Colonel Buckner was at it again; “The Ordnance Department of the Army has already asked to reserve for the Army our entire unsold capacity, and we feel confident that the Allied Governments will require large additional quantities of powder ... How this large amount of powder is going to be supplied to the United States and their Allied Governments we do not know, unless all the Allied Governments confer upon the subject and determine upon a plan of procedure which will involve the construction of increased capacity.”

On Oct 3, 1917 the U.S government asked the DuPont Company to submit a proposal. Five days later the proposal was in the hands of Major-General William Crozier, Army Chief of Ordnance. The estimated construction costs were for 90 million and the operating costs for a twelve month period were approximately 180 million.

This was the largest project the War Department had ever considered. The government agreed to pay for the whole works. The plant would be in Tennessee and it would be called Old Hickory. But then Pierre DuPont received a telegram from Newton D. Baker, secretary of War, “Have just had presented to me the details of the proposed contract with regards to increased capacity for powder production. The matter is large, intricate and important. Do nothing until you hear further from me. Stay all action under the order until I can acquaint myself thoroughly with all features of the matter.” Robert S. Brookings, a member of the War Board, had been looking over the contract and had decided that the DuPonts were making too much money on the deal. The DuPonts agreed to step aside. The War Board then appointed D.C. Jackling of San Francisco to handle the operation. The first thing Mr. Jackling tried to do was hire the DuPonts’ chief engineer, Harry M. Pierce. Harry said; “You can’t do it that way, Mr. Jackling. You need an organization of trained men, not just one man.” He told Jackling that they had to hire the DuPont Company and their whole shebang or do it themselves. Jackling tried here and there and was then back at the DuPont Company. The DuPont Company then said that they would and could do the job but only if the government agreed to stay out! The government agreed.

In ten months they built Old Hickory from miles of vacant fields. It was a city of 30,000 people. It contained 3,867 buildings – homes restaurants, schools etc. During the ten month building period DuPont hired over 250,000 workers. They built seven and a half miles of single track railroad; they built a 540 foot suspension bridge and the whole works cost two and a half times the maximum rate of expenditure for any year on the Panama Canal – a total of 85 million.

When the war ended tens of thousands of employees had to be let go, whole factories were immediately shut down, wages cut, and economic unrest swamped the nation. All over the world investigations were opened by governments and newspapers into Arms profiteering. The bookstores were flooded with accusations against “The Merchants of Death.” DuPont and Old Hickory were not immune. A story in a Tennessee newspaper accused the DuPont Company of as much as $100,000,000 in fraud and overcharging of the government.

An investigation ensued that went on for years. DuPont was finally cleared of any profiteering. But that was not the end of it. There were those who thought that DuPont and others had been let off the hook by the unscrupulous politics of the time.

Investigations into the Munitions Industry were reopened in 1934. The committee was headed by Senator Gerald P. Nye a Republican from North Dakota. It is interesting to note historically that one of the examiners on that committee was none other than Alger Hiss of future Cold War fame.

The World War I veterans were one group who were very upset after learning about the enormous profits earned by munitions companies during World War I. The emphasis of the committee was on how to take the profits out of War. Much of the New Deal’s ardor was prompted by resentment of the corporate greed that had preceded and in part precipitated the Depression,” says Mr. Hiss. It is interesting to note that Alger Hiss was the Senate Committee’s examiner on the Nye committee. “... it was normal practice for an aviation salesman to use actual or potential purchases of warplanes by one South American country to impress upon its neighbors their need to make matching or superior purchases so as not to be faced with an arms “gap.”

Use of the fear factor proved to be an effective way of bringing about spiraling military budgets. Bribery copiously supported the implanting of fear. The resulting picture was of American business stirring up tensions in an already unstable area and corrupting friendly governments in our hemisphere. One salesman’s letter complained of a U.S. Foreign Service officer as “fomenting peace.”

In the Committees vigorous attempt to regulate the arms and munitions industries one big question kept returning; “Who will regulate the regulators?” The Committee turned its focus to the DuPont Company and the Old Hickory plant. “This factory (Old Hickory Plant) was paid for by the government on the basis of contracts that called for payment of the costs, plus a percentage of those costs as a fee to repay the company for its efforts. Contracts of this kind provided little incentive for keeping costs low – the higher the costs, the bigger the fee. The urgency of wartime need adds to the mood of prodigality and greed that seems always to accompany such contracts. These twin specters haunt all military procurement. The monopoly position of DuPont played a large part in its ability to demand huge amounts either as costs or as compensations. The company was, to be sure, not alone in its insistence on being paid what it wanted. The government had no alternative. At times the threat was clear: Pay what we demand, or we won’t produce. The Nye Committee likened this to a strike by capital, noting that, in wartime, strikes by labor were forbidden. The issue of wartime profiteering was the one that most concerned labor as well as veterans, who felt their contributions to the war effort had been inadequately reimbursed when compared with corporate profits.”

Alger Hiss did not make any friends on this job – including the DuPont brothers and Bernard Baruch – and it may serve to explain somewhat what happened to Mr. Hiss in later years. But he continues: “Examination of the extensive records of the board (Nye Committee) including its voluminous minutes led the committee to discern that the general public’s impression of profiteering during World War I was correct.”

Hiss also states that the acclaimed Bernard Baruch and the War Board of which he was a member had not really done much to protect the interests of the “people” in supervising the actions of the arms and munitions industries. “Not long after Baruch’s appearance, the committee issued its report on wartime profiteering, emphasizing that the imperatives of wartime demand made control of profits impossible. In other words, Baruch’s efforts were ineffective in preventing “the strike of capital,” In the committee’s parlance, the only way to take the profit out of war was to avoid war ... Not surprising, therefore, the Nye Committee switched its main interest to ways to stay out of war. “Pursuing this tract, the committee after some months, devoted its hearings to the huge American loans made to the Allied Powers before our entry into the First World War. These loans by J. P. Morgan and other bankers had enabled the Allies to purchase from us armaments and other vital goods. In the committee’s view the loans gave the American bankers a vested interest in seeing the Allies emerge victorious and able to pay their debts, even if this required our entry into the war. And, they reasoned further, the huge, profitable trade with the Allies tilted our economy towards their side. The hearings on our economic ties to the Allies furthered the prompt passage of the Neutrality Act of 1935.”

Interestingly enough the FDR administration did take steps to curb the profits during World War II. FDR put enormous taxes onto the super wealthy and placed extreme excess war profit taxes onto the business community who would all benefit from the war.

These tactics did not prevent World War II nor did they stop greed and selfishness or profiteering but they certainly spread the wealth created from the war around a little more equitably. These tactics during the war did not endear the rich and wealthy to the FDR administration – the DuPont’s in particular. I read one account where it is alleged that the DuPonts actually fomented attempts on Roosevelt’s life along with a domestic revolution to overthrow the U.S. government. So much for all of those who believe that the country was “united” during World War II.

Books used in this essay include: “DuPont – One Hundred and Forty Years” William S. Dutton; “Alger Hiss – Recollections of a Life” Alger Hiss; “The Rich and the Super Rich” Ferdinand Lundberg; “Great American Fortunes” Gustavus Myers; “Merchants of Death” H.C. Englelbrecht and F.C. Hanighen.

Friday, May 11, 2012

Bloggin' Be My Life

The National Debt With a “Noble” Solution Richard E. Noble

A few presidents ago the National Debt was the most pressing thing that our political leaders and political hopefuls had on their minds. Ronald Reagan in his campaign for the presidency in 1980 told us all about a stack of dollar bills stretching from the planet earth to the moon. This stack of paper money was to represent the one trillion dollar mark in our advance to national bankruptcy. Our National Debt had not yet reached this benchmark in fiscal irresponsibility and Ronald Reagan was to be our knight in shining economic armor who would stop this catastrophe from happening.

Today this stack of dollar bills is probably bumping up against the planet Pluto but we hardly hear a murmur of the once prophesied impending catastrophe. I wonder why?

Was the National Debt not really a legitimate problem? Was the Great Communicator merely communicating greatly or grandiosely? What the heck is the National Debt anyway? The National Debt is the total amount that the government currently owes from all of its past borrowing. I guess that we could safely say that it is the mortgage that our governments, past and present, have borrowed on the United States of America. A budget deficit, on the other hand, is the amount by which expenditures exceed receipts in a single year.

Today there is a simple way for the lay person to distinguish between these two things – the deficit is tabulated in Billions and the National Debt is now tabulated in Trillions.

In the two hundred years B.R. (before Ronald Reagan) the entire accumulated debt of all of our previous presidents amounted to 909.1 Billion dollars. So B.R. our country’s National Debt had not yet reached one trillion dollars – that stack of dollar bills had not yet reached the moon. Now, remember, that figure included all the debt accumulated from George Washington through Jimmy Carter.

That 909.1 Billion dollars included all the monies borrowed for the American Revolution, the Civil War, World War I, World War II, Korea and Vietnam. By the time that Ronald Reagan left office in 1988 the National Debt was 2,601.3 Billion or 2.6 Trillion.
In just eight years Ronald Reagan had more than doubled what all the previous presidents from Washington through Carter had accumulated in the prior 200 years. Okay, let’s give Ronnie a break. Let’s kick it up a notch. Let’s go to George H. W. Bush, Number Forty-One, as he is so lovingly referred to today.

Number Forty-One is the Yale graduate who accused Ronald Reagan of advocating Voodoo economics. By the time Number Forty-One left office in 1992 the National Debt was 4,002.1 Billion or approx. 4.0 Trillion dollars. If Ronald Reagan was practicing Voodoo, one must hesitate to ask what Number Forty One’s economic principles were based on. And, you know, these presidents today have a Council of Economic Advisers.

The only problem with the Council of Economic Advisers is that when a Council member disagrees with the president or speaks out publicly against a president’s economic policy, he suddenly finds himself in search of a new Council to counsel. But this is all beginning to sound like Republican bashing. Let’s go to B. J. Clinton. In my neighborhood B. J. stood for something other than Billy Jefferson, but we won’t get into that. So B. J. came into office in 1992 and by the time that he left, the National Debt was 5,606.1 Billion or 5.6 Trillion dollars. So Reagan gave us 2.6 Trillion, Number Forty-One gave us 4.0 Trillion, and B. J. gave us 5.6 Trillion. Everyone says that what B. J. accomplished was good. Well, when it is compared to what Ronnie and Number Forty-One did, I suppose? Sounds to me like saying; Well, my Grandfather was hanged, my Daddy got the electric chair and now I’m serving life in prison. Guess that I am doing better than they did, huh? Well, I suppose, but most of us wouldn’t consider life in prison all that much of an accomplishment.

Today we have Bush Number Forty-Three. Number Forty-Three has the debt up to somewhere between 7 and 8 Trillion. It is estimated that by the time that Number Forty-Three leaves office the National Debt will be somewhere around 10 Trillion dollars – give or take a Trillion. Like some famous politician once said; “A billion here and a billion there and pretty soon you’re talking some real money.” Billions no longer matter, it’s trillions now. So there you go.

And what does this all mean?

I was listening to one economist on the TV the other day and he said; “Economically, we are like the man who just jumped off the top of a one hundred storey building. The falling man passes the eightieth storey and a guy sticks his head out of a window and screams to the falling man; ‘How’s everything going?’ ‘Everything is O.K. so far,’ the falling man replies.”

But, let’s not be pessimistic about this. You know … is the glass half-empty or is it half-full? Let us be “half-full” about all of this. It does no good to be half-empty because we are a lot worse off than half-empty. If we were only half-empty that would mean that we would still have something in our glass. At 10 Trillion dollars in debt we don’t even have a glass anymore.

But whatever, let’s be positive. Some politicians claim that the National Debt doesn’t really matter because it is money that we owe to ourselves. So even when the federal government just pays the interest on the National Debt it is infusing dollars into our economy – like giving a tax cut to the rich. But since Reagan, unfortunately, this is no longer true. Before Reagan our government’s borrowing was financed by Americans.

After Reagan our National Debt became so enormous that Americans didn’t have enough money to finance the Government’s borrowing. So we borrowed from foreign countries. Or would it be more economic to say that we sold our debt to foreign countries. In other words, we sold the mortgage, or foreigners bought our mortgage. Now countries like Saudi Arabia, Japan, China, the U.K etc. own a good part of our mortgage. If in the last few decades, it has appeared to you that your government has been acting like a foreign country, this may be a part of the reason.

But certainly, one day, we will pay off this mortgage and the American people will once again own their country?

This does not even seem to be in the realm of possibility. Politicians talk of balancing the budget as they did in the year 1999 for the first time in many decades. By the way, this supposed surplus that we had, momentarily, was only accomplished by pilfering money from the Social Security Trust Fund. Excess monies had been accumulated in the Social Security Trust Fund because of an increase in the Social Security tax in 1983. An increase was mandated to compensate for the baby boomers. From that year on, the Social Security had a surplus but everybody from Reagan to Clinton used the Social Security surpluses for other general fund spending purposes. Balancing the budget – or having a year in which the government does not produce a deficit by spending more money than it receives –only manages to pay the interest on the National Debt. A balanced budget pays nothing on the principal or the debt itself. In order to pay down the debt itself, the government must create a surplus – spend less money than what it takes in every year. And then use those surplus monies to buy back Debt (treasury bonds).

Is this a possibility?

Seems not.

I have never heard a politician in my lifetime talk of paying down the principal on the National Debt. The political answer to the National Debt seems to be like our one time policy towards gays in the military – don’t ask; don’t tell. So, I was thinking, why don’t we sell all of our mortgage to foreign countries and then claim bankruptcy. The only way these countries could get their money is if they have a bigger army than ours. Or maybe these foreign countries who own our debt would forgive our debt like the World Bank sometimes does for under-developed countries. Like we did after World War II for a number of countries.

But, of course, this is all ridiculous. We’re the richest country in the world, remember?

Well, if we are the richest country in the world, why don’t we just pay everybody off? Because we don’t have the money. So we are the richest country in the world but we don’t have the money to pay our debts, our mortgage anyway.

I have many friends who are rich in a similar manner. How can we be rich and, at the same time, be the biggest debtor nation in the world? Are we rich, or aren’t we?

But don’t despair; I have more realistic solutions to this problem than depending on the charity of the rest of the world. I wouldn’t expect or hold my hope out for a European Marshall Plan for the U.S.A. either folks. My solutions are dynamic and they don’t involve raising taxes.

Today we have approximately 200 million working people, or tax paying people in America. These 200 million people pay about 1.2 trillion dollars in taxes each year. If we can increase the working population of the United States about 10 times its present number and we tax them all at the present rate, we would have a national income of 10 or 11 trillion a year. So then, if we could get our government to put one trillion aside each year, we could pay off the National Debt in about 10 or 11 years. I admit, this solution has its problems but, come on – is the glass half-empty or is it half-full? This would take care of any Social Security short fall also, I might add. My second idea is even better. We don’t need any new taxes or new workers.

This idea is a classic.

We simply continue with Number Forty-Three’s borrow and spend policies. As all of us economists know this can do nothing but increase the rate of inflation. But that’s good. If we can get the inflation rate to rise faster than the rate at which Number Forty-Three and his successors can borrow, one day we will have more pieces of paper with pictures of dead presidents on them than we have debt to pay.

This is that same idea that they told you about a few years ago. Remember they said; Buy yourself a big house that you can barely afford now, and pay off your balloon mortgage, twenty years later, with cheap, inflated money from your naturally escalating high paying job.

The Germans tried this print-more-money idea after World War I. It worked real well. They had a few minor problems. Like trying to figure out how many wheelbarrows full of paper money it would take to buy a loaf of bread.

But so what, I mean, look at Germany today? They’re doing all right. So there you go. Is the glass half-empty or is it half-full? What me worry? Just call me Alfred E. Newman.

To tell you the truth when I look at the past illegal immigration rate and the true rate of inflation over the last few decades, I think that my two suggestions are the government’s plan – or has been anyway.

In 1974 I bought a Chevy van for $3,400, today a similar van sells for $34,000. I think that the inflation rate has been somewhat greater than the presently claimed 2.2%. My advice to the next two generations of Americans is – buy wheelbarrows.

I have one other idea. When the government spends more than it collects every year – it borrows. It prints up Treasury Notes and Bonds etc. Then it has the Federal Reserve – its personal banker – sell them to Americans and foreigner investors and foreign countries, at a specified interest rate. This is what makes our National Debt. This puts the government in a catch-22 situation. It can’t raise taxes; nobody likes that. It can’t charge tariffs on products coming into the country and put the cost of our government onto foreign countries and foreign manufactures. It could do this, especially when one considers that we now import 80% of what is sold here domestically. But it can’t, because we believe in “free trade.” Free for foreign importers but extremely costly to American taxpayers. Besides, most of our imports are from American based companies who went overseas to avoid paying taxes and hire cheaper labor in the fist place. Raising tariff rates would spoil their whole plan.

So then how else could the government earn some money to pay its bills? It could rent out rooms at the White House – but that is how we finance our political campaigns.

So what can the government do?

Well, how about just printing up so much money every year and buying back some reasonable portion of our debt, without going through the debt making process of selling Treasury Notes, Bonds and Bills etc. via the Federal Reserve?

The first thing that everybody yells and screams about this idea is that it is inflationary.

Yeah? And borrowing and creating more debt via the Federal Reserve and selling our country to China is better and un-inflationary?

I suggest that we pass a law allowing only a certain percentage to be printed up in this manner – taking into consideration GNP and Inflation and the predictable population and economic growth.

The second problem with this idea is that it is against the Constitution.

Yeah! So who gives a flying flip? This hasn’t stopped the last five or seven administrations from doing anything. Why should it stop us on anything as important as this?

Besides, the Constitution on this particular point could very easily be reinterpreted. We wouldn’t even be forced to change anything or seek a Constitutional Amendment.

The next complaint with this idea is that when the American people and the other nations of the world find out about these shenanigans they will lose faith in our government.

I don’t think so.

No one understands economics anyway. And if you think that will be the case, don’t tell them. As the debt miraculously goes down gradually every year, just tell everybody that it is because of good business management on the part of that particular administration – cook the books; or just add it to the total of taxes collected, nobody will know the difference; or tell everybody that it is a miracle. Everybody believes in miracles these days. When the press investigates and discovers that what is happening is economically impossible, just lie to them. Like we do on everything else. What is the problem here?

As for the American people? What the heck do they care? They’re too busy trying to make a living to start trying to comprehend economics – least of all the Federal Reserve System. And need I point out that at this point in world economics – if the U.S. currency fails – the entire world economy fails.

U.S. dollars are now used around the world in place of Gold.

The U.S. dollar is today’s gold.

The bottom line is this: Printing money and skipping the Federal Reserve will no doubt create some inflation. But, using that money to buy back Treasury Bonds (Debt.) will be anti-inflationary. On the one hand, we are printing money to put into circulation, but using it to take money out of circulation by reclaiming debt on the other. If it is done properly – with due diligence – the one will cancel out the other and America will one day be debt free and it will cost nobody anything. This will not be a loss or gain. It will simply be a monetary transfer. We will transfer a bunch of one type of paper for another type of paper. If it is done right, nobody will know the difference. And if we want to add an additional check on inflation, when we start buying back our treasury bonds from the Federal Reserve with our “free paper,” temporarily raise the required reserve security demands. In other words, if the banks are required to hold 10% in reserve – raise that requirement to 12% or whatever. Then as time goes on and we see that inflation is under control, lower the requirement.

The last criticism that I can think of is that this idea would be putting trust in our government to do the right thing and keep things under control.

In other words, somebody has to be sure that they don’t print up too much money every year.

So set up an oversight committee – with the Federal Reserve Board, if that will make you happy. They will not like the basic idea in the first place – but they will just have to deal with it. As it is now, they (the Banks) are the only ones who profit from this National Debt business, so they like it; but if the debt is allowed to continue growing, it will mean possible bankruptcy for them and everybody else. As it is now the only hope for the world economy is continued projected economic growth, coupled with reasonable inflation. Today we have inflation and debt. With this suggestion we will still have the inflation – but we will eliminate the debt. And it is the Debt that will eventually kill us, not the inflation. The world can live with a controlled inflation. It has for centuries. And if this is done correctly we will have no more inflation than what is currently being created. Besides, there aren’t any good choices here; you can trust your government or you can trust the Federal Reserve and the International Banking community.

As I said earlier, facetiously, Germany did this but failed and bankrupted their country after World War I. But the Germans wanted to bankrupt their currency. They didn’t want to pay off their war debts and the smart money wanted to turn the middle class against the occupation government. So they simply printed up paper until it filled wheelbarrows. They did not use due diligence and have proper controls. They didn’t care. What they did was not an accident. It was a planned bankruptcy.

You can be sure that the big boys in German currency had all their cash in something other than the Mark.

Of course, there is the possibility that our National Debt is also planned.

The design of the plan being to keep the general population thinking that they are broke, so that they won’t be suggesting any “free” social programs for the “welfare” state. I mean, you must have noticed that no matter how large the National Debt, we always have enough money for another war.

Post Script: Quantitative Easing If I understand this concept correctly, the FED is now “creating” debt free money and using it to buy back interest bearing notes from China and elsewhere. So the FED is doing what I suggested in the above article that the Government do. Now, the FED should burn these interest bearing notes that they are purchasing with this FREE money. Eventually the entire National Debt could be done away with in this manner with no cost to the government or the taxpayers and no budget cuts.

My guess is that the FED will not do this. It will hold those notes and then resell them at a better time, thus giving any possible profits to the banking system and not the taxpayers.

I don't think the FED is allowed to collect interest on its purchase and sales from the government. It collects a fee to cover its expenses. But buying Treasury Notes with cash or increased non-interest bearing currency and destroying them would reduce the debt burden of the country but the increase in currency will be inflationary (initially to China or whoever). But as long as we are in a deflationary cycle this should be fine. But if inflation raises its ugly head (if China dumps the cash on the market for example) the fractional reserve rate could be raised or the money supply tightened here at home or by others with an economic stake in U.S. Dollars.

But inflation is not a problem at this point in time and the current tight bank policy is guarding the inflation more than necessary. None of this though helps create new jobs here at home. This all saves the banks and increases their credibility. The banks are doing what is necessary for the banking industry but whether or not what is good for banks will be good for America is not clear.

Of course, putting Americans to work at living wages or better and guarding a full employment system for the folks here at home would eliminate the above discussed problems entirely. Give Americans good jobs at good wages and keep it that way and the debt problem is solved … excepting outright, criminal, anti-American negative behavior on the part of the American Government. A possibility that must be considered at this point in the game.

Remember, it is not only just a paper moon but a paper monetary system too. Paper unlike energy and matter can be created and destroyed.

Wednesday, May 09, 2012

"Bloggin' Be My Life"

The Hobo Philosopher Dollars and Sense By Richard E. Noble
There is a popular journalist who wrote recently about the collapse of the dollar and consequently the Great American Empire. Here’s how it will supposedly happen: The world at large is suddenly going to realize that the U.S. dollar is worthless. Countries like China and Russia and whomever are then going to grab up all of their treasury bonds and run to the Federal Reserve demanding payment. The Federal Reserve will then start the printing presses rolling in order to pay off the demands of these frightened Chinese and others. The increase in the marketplace of all these new dollars will bring about a hyper-inflation. The United States of America will go bankrupt. The American people will panic and starve to death. And all that will remain of the once late and great American empire will be their bloated and overly aggressive military. I have since read other journalists who are quoting this journalist and confirming his economic “logic.” I don’t agree. First of all, the United States doesn’t have to redeem anything and certainly not if it means bankrupting itself. That would be crazy or should I say the obviously stupid. The countries who have these notes will have to keep them or sell or trade them on the “open” market. Second: If China loses faith in our treasury bonds or certificates why would they run to the Federal Reserve to get more of the same? Why would the Federal Reserve redeem their certificates? What would they redeem their certificates with? If our, interest bearing, paper treasury notes are no good, why would anyone in their right economic mind want to cash them in for more worthless paper but of smaller or different denomination or texture? If you think the dollars in your pocket are worthless would you run to the corner bank and cash them in for more new worthless dollars that are maybe a different color or printed on new and different paper? I don’t think so. You would spend them as fast as you can; buy whatever you could get. What China could do – and has already threatened to do – is cash in their U.S. currency for some other country’s currency. Trade their U.S. Treasury bonds on the open market. But why would they want to exchange one country’s paper for another country’s paper? And who out there in the economic wilderness has better paper? Besides these creditors have so much American paper they can’t deal with a little country. No matter which country they chose or if they choose every country, they are still going to have paper. Paper that is backed by more paper. Europe has as many problems, if not more, than the U.S. Trading paper would be a political move not an economic move. There is still no currency out there that is a better economic bet than the U.S. dollar. Some creditors were threatening to buy up Euros awhile back – probably until they took a good look at the Euro and all of its intrigues. In any case, they will have their vaults filled with European paper as opposed to American paper. They already have lots of European paper in their vaults. China has been the biggest exporter in the world for decades. It has piles of everybody’s money. And if they start buying European paper, that will create a shortage of whatever brand of European paper that they choose. Then those countries will be forced to print up more of their paper to make up for what the Chinese have bought – more inflation problems everywhere. Initially the more franks, or marks the Chinese buy the more expensive those currencies will become and the less currency will be circulating within the borders of that country. China’s purchasing of large amounts of any other country’s currency will cause that country big problems. They will then be forced to print up more of their currency to make up for the drain. The problem remains the same for the Chinese no matter where they try to peddle their paper – paper of whatever nation. The fact is that no country’s paper is any more valuable than American paper – even now. When others buy American bonds or treasury notes, they have made an investment (read gamble) in the country of America. If they try to sell short, they will lose their investment. Other countries will buy up our notes at reduced prices and reap the rewards that the sellers are forfeiting. All they have to do is sit and wait and they will eventually get their agreed upon return. They’re getting their interest payments right now. No one is reneging. If the world all feels the same about dollars, as our journalist friends contend, then the entire world will be busted because everybody still has and is still using dollars. All the free world is invested in dollars. They use dollars in Russia and Cuba and everywhere. When Saddam Hussein was caught, he had a suitcase of American Dollars. He could have taken diamonds or jewels or gold or Euros or whatever. But he chose dollars because dollars are good all over the world. China uses our treasury notes as collateral for their money. Our treasury notes are their gold. And the same goes for numerous other nations. The Chinese might not be able to buy any other country’s paper with American paper because nobody will want U.S. interest bearing treasury notes? Maybe they will have to auction our treasury notes off for half or a quarter of their value? At that price, I’m sure they will sell. The U.S. could manipulate the money exchange marketplace also and buy back its debt for a fraction of what it is worth in future dollars. The Chinese and others have billions and billions of U.S. notes. If they rush to the money marketplace buying other national currencies, they could bankrupt the countries of many European nations – including the home nations of these journalists who are spreading the “panic.” When these countries realize that China or any other country is buying up their currency they will have to put a stop to it. In fact, they may have to put a stop to currency trading altogether. It is a bad deal for any country to have speculators playing with their nation’s medium of exchange. They may have to make new rules on all commodity trading – and futures too. Small purchases and fluctuations in a country’s paper money supply are fine but large manipulation would have to be stopped. The fact of the matter is that it is a paper world. Playing with paper on the world market is fun and games for the small time world money hustlers and speculators. But countries like China and the U.S. can’t play that game. They are all in on it. They can’t play against the “house” when they are the house. To do so would be to bankrupt themselves, that ain’t going to happen. Unless everybody running these countries is even dumber than I am. What China and any other nation can do with their treasury notes, is cash them in for commodities. They can buy stuff. They could buy gold. But gold is no more valuable than paper. It is also a faith based medium. And it is subject to chance, loss and gain, just like the paper. If one country had all of the world’s gold, what would it do with it … buy paper? The U.S. has vaults filled with Gold and so does Russia. So what? If they dump all the gold on the market as Britain threatened to do a few years back, they could bankrupt all the gold bugs overnight. There is way, way too much paper out there to even be considering gold. The gold standard is over. One grain would be worth millions. The world is dealing in trillions. Paper is the most acceptable medium of exchange. And every country’s paper is backed by everything they have and are. The problem is not the paper. It is those who are handling, managing and manipulating the paper. These people need watching and regulating. America’s money is backed by its people, its land, its businesses, its military, its financial institutions, everything we own or possess. When the world loses confidence in us, our dollar goes down. As the world gains confidence, our dollar goes up. At the moment the U.S. dollar is the only game in town. The Euro has big problems. China is decades, maybe a century, away from having a paper that will exhibit the world confidence in the U.S. dollar. China’s Communist government has a big problem. Communism is looked at suspiciously internationally. It will take a bunch of positive international propaganda to clean up that image worldwide. A dubious and maybe impossible goal. Before any country or group can replace the American dollar, they have to create a group that will win the world’s confidence. All money in today’s world is “faith based.” Pick a nation that you think can win the world’s trust to a greater extent than the U.S.A. Who do you trust? Who would you trust? Not for just a couple of weeks or a month, fast enough to get a quick return, but over the long haul. America needs to clean up its act but it is still number one around the world. Possibly all of Asia combined could develop a unified currency to compete with the dollar. But it would be a hard sell right now and my guess is it will never be negotiated – too many animosities between Asian nations to even consider such a thing. It will take a lot of cooperation and financial success for a new currency to compete with the dollar. If any country tried to back its money with a precious metal it would be swamped and out of business before it got started. There isn’t enough metal of any kind out there. Countries would have to re-invent paper or something like it or the world will be back to barter and the problems of trading a quarter of a chicken for two pounds of butter. It doesn’t work. That day is over. It is “faith paper” or it’s no more trading and a world collapse. A tractor or land mover is more valuable than gold or silver to a country like China. They can buy things or places. They can come to America with their American dollars, as the Japanese have, and start up businesses to make and manufacture things they can sell to the world and use to help themselves. They can use their money to build up America and enhance their holdings and their investments. They can buy American products or anybody’s products. They can use their foreign money to invest in things around the world. They can do the same in other countries but China has enough problems of its own. They need to invest in their own country. They need to use their money and other capital they have to make and produce goods to sell to their own people and put their own people to work. They need more rice and hoes in their domestic market and fewer Hula-hoops and Reeboks for the world market. China has 1.3 billion people. They have the largest potential commodity market in the world. They should start feeding their own consumers. They should take a tip from Henry Ford and start building a middle class by paying their own people better wages. The value of their money is in their people, their country and their natural resources. And it is the same for the U.S. and everywhere else. Countries have to reevaluate and start reinvesting in themselves. Start building, start paying, start designing, start producing NEW things and old things that their people need. China should start worrying about China and not the Global marketplace. That is what America and the rest of the world has to do too. If everybody competes to just see who can produce the same old goods and services at the cheapest price, then the games will come to an end shortly. The world needs NEW energy, NEW games, NEW ideas, NEW markets, more products, fair wages and higher wages for the middle class so that people all over the world can buy all these new things. Individual nations have to increase their own market base and start selling to themselves. They seem to have forgotten the basics of economic growth – self interest. And national interest is self interest. Adam Smith’s touted invisible hand may once again come into play as the “individual” nations of the world start pursuing their own self-interests in fair and moral ways. It is time to Come Home America as author William Greider says. Think American, buy American, be an American. And China and everywhere else can do the same thing and watch the global community grow. Charity begins at home. Stop fighting and start selling. Start buying. Start producing. Stop hiding. Stop sneaking around. See no evil, hear no evil, and speak no evil. Just do it! And do it by good example, positive persuasion and a smile and not bulletproof vests and AK-47s, and armed personnel carriers. Let’s make a new capitalism – a positive, ethical, moral capitalism.

Thursday, May 03, 2012

The Soul of Capitalism

“The Soul of Capitalism” By William Greider Book Review By Richard E. Noble As a practicing freelance philosopher, I always begin with a definition of terms. In “The Soul of Capitalism” my first questions are; What does Mr. Grieder mean by the word “soul” and how does he define Capitalism? We want to be on the same page here. The sub-title of this book is, “Opening Paths to a Moral Economy.” So I interpret the Soul of Capitalism to be concerned with its fairness – the fairness of the economic system. We already know from reading “Who Will Tell the People” that the fairness of the Political System has been corrupted and marginalized to say the least. We also have learned from reading Mr. Greider that the two are impossibly intertwined. Capitalism, as we all know, has never been much on fairness. George Will, staunch free market Capitalist stalwart, has stated publicly that he would not allow his children to even use the word fair in his home while they were growing up. Capitalism has always been considered more like Mother Nature – the way it is; not the way it should be. It’s like mathematics. It’s supply vs. demand; it’s guns or butter. Its operation, we are told, cannot be denied or interfered with, without deleterious effects. There are many who consider this to be “fair.” If that is the way it is, that’s the way it is. I would guess that there are many who because of the title of this book will not even bother to pick it up. Because, they believe that Capitalism is the way it is and that by its very nature it is soulless, as is a machine or a hurricane. But in picking up on this discussion Mr. Grieder is continuing an old philosophical discussion among “The Worldly Philosophers” as Mr. Heilbroner refers to them; Ricardo, J. S. Mill, Marx, Veblen, Henry George, St. Simon, Godwin, Smith, Maithus etc. Economics was once discussed as “Political Economy.” There are those radical fundamentalists today who claim that there should exist a “Separation of State and Economics.” And that only if this separation is maintained will the natural economic evolution of proper events take place. Any interference by the government will result in disaster. Those on the other side of this argument claim that the above theory is impossible to substantiate since 1) no such state or condition has ever existed to substantiate the argument 2) when, in the past, such a condition was approached, collapse and failure were invariably the inevitable results 3) and failure and collapse will always be the case with such a scenario because of the basic fallacies of the fundamental principles of the Free Capitalist dogma. Supply vs. demand (even in regard to human beings) and unfettered destructive competition, are the two most obvious in this case. Mr. Greider on his website refers to his promotion of this book as; Trying to sell hope in hardback. I’m sure that I am not going to be the first to inform Mr. Grieder that this book does not fill one with a great deal of hope. On the other hand it is encouraging me to think, ever so slightly, in a more egalitarian and economically positive manner. It is nice to know that there is at least one other human being who is still concerned about these matters. Mr. Grieder tells me that there are many, many more and he provides some of their names and email addresses. I have not entertained such utopian thoughts since my junior college days in the 1960s. Mr. Grieder does suggest in this book that he hopes that it will inspire the younger generation. I hope so too, because I am well aware that this particular member of the older generation is very difficult to inspire. But if you are looking for positive, practical and sensible economic ideas that are currently working and in practice by a few folks as we speak, Mr. Grieder has pages full of them in this latest book “The Soul of Capitalism.” My problem is that I have and even deeper cynicism than Mr. Grieder … or Tom Paine or even Karl Marx. I struggle to believe that the problems of mankind are merely systemic. Sometimes, I think that they are endemic – endemic to all of humankind. I must say that I sometimes believe as did Jesus, Buddha, Confucius, Gandhi and others that first we must find our own soul and then put the seed of that soul into humankind. If we can do that, almost any system will work. When I said that to my wife, she said: “Yeah right! Tell that to your buddy Adolf Hitler and his Nazi Germany. I think your philosophy is a good rationalization for not doing anything. Hummm? So with my wife’s criticism in mind, I recommend reading Mr. Grieder’s book. At least he is trying to do something and actually doing something is better than philosophizing about the virtuous self-righteousness of doing nothing. One other thought occurs to me with regards to Capitalism. When J. S. Mill was analyzing this particular problem in his “A Theory of Political Economy” he said something to this effect: So if we admit that the fundamental rules of economic dogma cannot be denied and that we must conform to them in our attempts at earning money and operating our businesses – competition, supply and demand etc. – well so be it. But after we have conformed to these demands and made our fortunes we are then free to do with our incomes and our wealth as we please and so too are governments who gain their wealth after the fact. There are no economic rules or dogmatic restrictions on how we must spend our money after we have earned it. We are once again in command and fate is once again in our hands. This being the case, can we not redistribute or spend this wealth in any manner we choose? Who is to say that now that we have our wealth and have earned it according to the rules, we cannot dispense with it in any manner we now choose? We can give it to the poor; we can buy land for the landless; we can cure the sick; or we can use it to conquer the world; or gamble it away at a Casino or a stock market. At this point we are once again in control of our economics and our economics are not in control of us. So then if governments and individuals choose to use their economic wealth to compensate for what are the obvious inadequacies of our hard and fast and oftentimes cruel economic system who is to say otherwise?