San Juan Mountains

San Juan Mountains
San Juan Mountains: Grenadier Range

Friday, May 20, 2016

An Economics Test

So you think you are pretty smart, eh?  So you think you are qualified to vote on who should lead the free world the next four years, huh?  So you think you know what makes the economic world go round, do ya?  Well, here is a simple test to see if your self-appraisal is accurate.  Each of the following statements about economic reality is either true or false.  Take the test and then scroll down to see how connected you are to economic truth.  (My apologies for the changing fonts in this post.  I have spent way too much time trying to fix the problem and most of my fixes only made it worse.)
  1. Amerikans are saving too much money and the result of all of this hoarding will be a decrease in the rate of economic growth that could bring on a recession, if one is not already upon us.
  2. Amerikans do not save enough money and the taxpayers will likely be called upon in the future to give money to retirees as a direct result of the fact they are not saving enough for themselves.
  3. Jobs are created by career politicians via the laws they enact and once those jobs are created they become the property of the hard working, middle class families who fill them.
  4. Evil, profit-seeking businessmen immorally destroy jobs by sending them overseas so they can make more money even though the jobs they send overseas were created by the government of the Socialist Democracy of Amerika and owned by the socialist workers who filled them.
  5. Raising the minimum wage is good for the economy because it gives more people more money to spend and, since consumer spending is 70% of Gross Domestic Product, a higher minimum wage will stimulate economic growth as those workers go out and buy lots of shiny things.
  6. The best way for the economy to grow is for the Federal Reserve Bank to create more money, inject it into the economy via loans and the "multiplier effect," and then sit back and watch the magic happen.
  7. If stingy and stupid citizens save too much money the best way to solve the associated reduction in economic growth is for the federal government to step up and create jobs by spending money on infrastructure, thus ensuring that the economy will keep growing as well as improving the lives of all citizens of the Socialist Democracy of Amerika.
  8. Income inequality, the glass ceiling, the disparate net worth between the rich and the poor are all problems created by greedy businessmen and corporations operating in the the free market that can only be eliminated by the creation of more government regulations that will force the evil profit seekers to behave morally.
  9. It is possible for people who are smart enough, generally career bureaucrats in government jobs, to manage the economy so that recessions and boom-periods no longer take place, thus ensuring steady and equal economic growth for all citizens.  
  10. Whenever a recession does take place the one thing we know with absolute certainty is that it was created by profit-seeking corporations operating with too much freedom.
  1.  False.  Hoarding is a term that was utilized by John Keynes (father of Keynesianism) to cast a negative light on personal savings.  Keynes was a worshiper of government who believed that all people except those in government are stupid.  When people were left to their own devices, said Keynes, they would always end up saving their money, thus reducing something he called aggregate demand.  When people do stupid things like save Keynes believed the only way to avoid recession was for the government to engage in deficit spending.  As you can imagine, people in government loved Keynes. They still do.
  2. False.  I put these two questions back-to-back to illustrate how career politicians and their media lackeys knowingly and willingly contradict themselves all the time.  When career politicians want to alarm us about the economy they inform us that we are saving too much.  When career politicians want to alarm us about the teetering social safety net they inform us that we are not saving enough.  Either way the populace becomes alarmed and the mission is accomplished.  We all turn to government as our savior.  There is no such thing as saving too much nor is there any such thing as saving too little.  Each person is free to save as much or as little as he wishes.  
  3. False.  There are actually two falsehoods in the third statement.  Government and the career politicians who run it do not create a single net job.  At the same time, the jobs that are created in the economy are the property of the people who create them, not the people who operate within them.  Every single politician I have ever heard speak takes credit for creating jobs.  Although it is true that government spending can "create" a do nothing job for a period of time, the taxes associated with creating that job destroy more than one job in the private sector.  The net result is that no government program ever creates any real jobs.  Jobs are created in only one way....when profit seeking businesses and corporations expand and need more people to help in their expansion.  When corporations expand the jobs they create belong to the company, not to the person who agrees to do the work.  
  4. False.  This is a partial restatement of statement three.  The new item added here is that profit seeking businesses destroy jobs when they send them overseas.  Clearly this cannot be true.  If a job exists in this country and a profit seeking businessman decides to send that job to a foreign land the job still exists in that foreign land.  No job has been destroyed.  Furthermore, even if the profit seeking businessman decided to destroy the job, it is his job to destroy.  He is free to do what he wants with the jobs he creates.  He is under no moral compunction to employ anyone, especially if the terms of employment cause him to make less money or suffer losses.  Anyone who does not like this truth is free to go out and start his own company.
  5. False.  Everything about statement five is wrong.  Wages are determined by the free market.  When government gets involved in the process of wage setting it is inevitable that distortions will occur.  When wages are set at an artificially high rate the logically and economically necessary result of that policy will be a reduction in the total number of jobs available.  All companies that are operating on the margin will be forced to reduce the total number of jobs they have if they have any chance of remaining profitable.  Furthermore, the wrongheaded idea that spending is a part of Gross Domestic Product is ridiculous.  Product is product.  Spending is not product, it is spending.  It really is that simple.  Lastly, if a higher minimum wage really could create wealth the government should establish $1000/hour as the required minimum wage.  Then we could all sit back and watch the wealth multiply like never before.  Indeed, we would soon find that we are all spending ourselves to prosperity
  6. False.  To quote Hans Sennholz, "The popular notion that an increase in the stock of money is socially and economically beneficial and desirable is one of the great fallacies of our time.  It has lived on throughout the centuries, embraced by kings and presidents, politicians and businessmen.  It has shattered numerous currencies, inflicted incalculable harm, and caused social and political upheavals."  Adding new money to an economy only devalues the existing money.  No real wealth is ever created.  Real wealth is created by profit seeking businessmen and corporations operating within the free market.  When the Fed attempts to create wealth by inflating the money supply the only result is economic harm.  Always
  7.  False. This is another Keynesian fallacy.  Career politicians love to talk about how they save our economy by sponsoring, voting for and legislating new construction projects on "infrastructure."  These projects are always economic boondoggles that inevitably fleece the taxpayers.   Government spending never aids the economy.  Government spending always has a harmful impact upon the economy.  The reason for this truth is simple:  all government spending is financed either by taxes or inflation, both of which are capital destructive.  Only savings and investment by private citizens and profit seeking businessmen and corporations can keep the economy growing.  However, since we live in a land populated with citizens filled with sinful envy, when wealth disparities come about as a result of the division of labor career politicians come in and pander to the envy of those making less money than the entrepreneurs by demonizing their wealth creative activities and calling for programs of wealth redistribution.  Those programs are always popular with the majority.
  8.   False.  Statement eight is partially true.  Income inequality, the glass ceiling and net worth disparity are most certainly created by the free market.  On that point we all agree.  What makes this statement false is the sinful belief that income inequality, the glass ceiling and net worth disparity are evil.  Income inequality is a good thing.  It gives sinful and lazy human beings an incentive to work.  The same is true for the disparity in net worth found among the citizens of this country.  The glass ceiling is simply the free market's recognition of the fact that, as a class, the work of women is worth less to the consumers of this land than the work of men.  You can allow your sinful emotions of envy, covetousness and hatred take control of you and complain about this economic reality or you can embrace it for what it is and purpose to be one of the more productive members of society. The choice is up to you.
  9. False.   The presuppositional bias that exists in the minds of almost all citizens of the Socialist Democracy of Amerika is that a person who works for the government is altruistic and a person who works for a profit seeking company is greedy, evil and immoral.  This is true despite the fact that, generally speaking, government employees are overwhelmingly filled with avarice and will seize any opportunity to feather their nests at taxpayer expense while profit seeking businessmen are constrained by the free market to behave in the best interest of their customers.  Want proof?  Where would you rather have to go to mail a package, the post office or Fed Ex?  I rest my case.
  10. False.  The Federal Reserve Board was created by the federal government to manage the economy so that the citizens of this God-hating country would never experience another recession again.  How have they been doing?  The number and strength of the recessions experienced since the creation of the Fed are worse than prior to its creation.  You would never know that fact since the government propaganda machine known as the media purposefully and successfully blames the free market for every recession that takes place.  Blame is usually assigned to evil Wall Street bankers or other financial institutions that allegedly only make money by shuffling paper around.  That argument always plays well to envy filled workers who are quick to blame someone who makes more money than they do while, at the same time, giving the government power brokers who really caused the recession a free pass.  This activity is called state worship and it is everywhere in this idolatrous country.

Thursday, May 19, 2016

Health Care Is A Right

Yes, health care is a right.  Or at least that is what the title of a letter to the editor of the Denver Post informed me.  Phil Stahl, of Colorado Springs, wrote a letter to the editor of the newspaper several months ago expressing his opinion that health care is a civil right.  If health care is truly a civil right that means everyone in the Socialist Democracy of Amerika has a right to free health insurance.  Of course, nothing is free. What it actually means is that half of the citizens of this envy filled land would be paying for their own health insurance plus they would also pay the premiums for the other half that just doesn't want to pay for it themselves.  I would like to take some time to consider his argument here today.
Let me begin by showing my cards.  I believe there are only three civil rights and health care is not one of them.  You can go here to read my argument in support of that position.  Please don't expect me to be favorable to Phil's opinion in this post, even though he is from the Republican and Evangelical Christian bastion of Colorado Springs. Please don't expect me to be kind to Phil, especially after you see what he has to say about his alleged right to steal my money and use it to pay for his health insurance.
Phil is responding to a previous letter to the editor written by an amiable fellow named James Zordani.  Phil believes that James "misses the point" when it comes to the argument about whether health care is a civil right or not.  James had argued that "health care" is nowhere mentioned in the Constitution of the United States of America as a right, therefore concluding that it must not be a right.  Phil takes exception to James' position.
Here is Phil's complete argument, in his own words, "In fact, as the author and historian Garry Wills has noted, it is a right under the Ninth Amendment of the Bill of Rights.  This embodies what are called unenumerated rights not explicitly stated in the Constitution. The Ninth Amendment states that 'the people retain unenumerated rights.'  'The people' here refers to flesh and blood citizens, not to a bunch of contractual abstractions like states or corporations.  As Wills has written, 'The states have no natural rights. Their powers are artificial, not natural--they are things made by contract.'  This is a point others might want to reference for future discussion."  This is a future discussion and I would like to reference Phil's points.
Phil's argument is both extremely simple and impossible to understand. The simple part of his argument is that health insurance is a right because the Ninth Amendment says so.  Although the Ninth Amendment does not mention health insurance per se, Phil assumes that it is included on the long list of rights that were not elucidated. The Ninth Amendment states, "The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people."  I believe it is fair to say that it is generally recognized that the Bill of Rights was added to the Constitution of the United States to satisfy the desires of a group of people, known as anti-federalists, who believed that the federalists would rapidly expand their understanding of what the federal government could do to the people without their consent.  There was some debate as to whether the Bill of Rights was necessary and the anti-federalists came down on both sides of the issue.  On the one hand they argued that if the Constitution as it was written was strictly interpreted there would be no problem with federal government incursions into the lives of individuals and the various states.  On the other hand they argued that if a specific list of civil rights was not added to the Constitution the federal government would soon inject itself into those areas of life.  As it turned out it was a moot point.  The Constitution was never interpreted strictly and the rights in the Bill of Rights were quickly suspended.  The anti-federalists were correct in their suspicions on both points. 
Does my assertion that the Bill of Rights is suspended sound harsh and idiotic to you? Consider these truths:
The First Amendment states, "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press, or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."  My religion requires me to declare that homosexual behavior, as well as transvestism, are sinful activities.  The law of the land declares me a criminal for doing so.  That means I have neither free speech nor the right to practice my religion free from all governmental interference.  I once went to a political rally and was informed by the jack-booted thugs providing "security" that I could only open my mouth if I was standing in a "free speech zone" that ended up being a cordoned off area so far away from the festivities that nobody could hear my screaming as I railed against the loss of the my First Amendment rights. 
The Second Amendment states, "A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed."  All regulation of firearms, as well as weaponry of any sort, is a violation of this amendment.  All rules and regulations that apply to weapons are an infringement upon my right to own them.  I should be free to own and use any weapon I can find.  I should be free to purchase any weapon I can afford.  Those rights and freedoms do not exist in this land.
The Fourth Amendment states, "The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized."  I have written many times in the past about how the Fourth Amendment has been suspended in this immoral land.  If you want to read some of those arguments go here, here and here.
I am not going to go through the entire list to prove my point.  Be creative!  Conceive of ways in your own mind that illustrate how the Bill of Rights is a worthless piece of paper.  But now, let's get back to the point. Does the Ninth Amendment declare health care to be a civil right, as Phil believes?
The Ninth Amendment simply states that the list of rights found in the Constitution and the Bill of Rights does not exclude the possibility that there might be others floating around that are not found within those two documents.  Phil has to be smart enough to know that it is a non sequitur to simply state that there is a right, other than those listed in the Constitution and Bill of Rights, that the Constitution recognizes that forces me to pay for my neighbor's health insurance premiums.  Even if the right to force others to pay for my health insurance is one of the rights that are not listed in the Bill of Rights Phil still faces the logical necessity of proving that health insurance is one of those unenumerated rights.  Does he do so?  No, he simply presupposes that he is correct.
Phil's argument is obtuse and convoluted.  He seems to be making reference to the Tenth Amendment ("The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.") when he writes that the unenumerated right to health insurance is a personal right and not one retained by the individual states as described in the Tenth Amendment.  I can't see what possible difference any of that argument can make since the Tenth Amendment also says that the "people" reserve whatever rights are still left floating around out there. So we return to the same basic issue, does the Ninth Amendment declare that my neighbor has a civil right to force me to pay for his health insurance?
James wrote that health insurance is not a civil right because the Constitution and the Bill of Rights does not grant it.  Phil responded that taxpayer financed health insurance is a civil right because the Ninth Amendment declares that the people "retain unenumerated rights," without ever explaining what those unenumerated rights might be.  James argument is correct but irrelevant because the career politicians and bureaucrats who rule over us have never obeyed the Constitution or the Bill of Rights.  They have created nationalized health insurance just like they have created the entire welfare state....illegally and immorally.  On the other hand, Phil is completely wrong because there is no evidence whatsoever that the "unenumerated rights" he is discussing include the right to taxpayer financed health insurance.  Most certainly it is true that any historical analysis of the debate surrounding the Ninth Amendment will indicate that nationalized health insurance was not on the minds of any of the delegates to the convention.
This has been a rather long and boring post, I will admit.  I am struggling to stay awake as I write it.  I have posted this for a reason.  The primary reason I have addressed Phil's argument about health care is because it is a perfect illustration of what passes for a sophisticated rational argument in the Socialist Democracy of Amerika these days. Phil is unfocused, irrational, pseudo-intellectual, unintelligible, imprecise and a master of obfuscation.  He writes a lot of words but he says nothing.  Hum.....I wonder if Phil is a career politician?

Wednesday, May 18, 2016

"Middle Class" Mythology

Last Friday's Denver Post featured a front page headline story entitled, "The Shrinking Middle."  The story was designed to inculcate fear in the minds of those who read it about an alleged sociological problem known as the "shrinking middle class."  This problem, which is certain to destroy life as we know it, can only be fixed if wise career politicians spend billions of taxpayer dollars on new programs designed to curb income inequality and revitalize the middle class.
There are lots of reasons given for why this horrible thing is happening to us.  Some groups say that profit seeking businesses have destroyed the middle class by shipping their jobs (how they came to own those jobs is never described) overseas.  In a similar vein some argue that manufacturing jobs, the backbone of the middle class I am told, have been destroyed by greedy corporations who move their manufacturing plants to countries where the labor is cheaper, thus increasing their immoral profits.  Others say that the tech boom has destroyed the middle class by creating an upper class populated with tech nerds and eggheads while leaving the common man behind.  The only way to solve this alleged problem is to raises taxes on the income of techies.  Still others, usually strident feminists, claim that the middle class is disappearing because women do not earn equal pay for equal work.  I like to dismiss them offhand since it gives me the opportunity to hear them shrieking in their shrill little voices about what a misogynist I am.  Boo Hoo.
All of the hand-wringing about the death of the middle class is an utter waste of time.  What the propaganda really boils down to is nothing more than various groups using the erroneous concept of a shrinking middle class to petition government for protected and privileged positions, all at taxpayer expense of course.  Let's consider the mythology of the shrinking middle class for a moment today.
The graph below illustrates income distribution in the Socialist Democracy of Amerika as of 2010.  Please note that the two bars at the extreme right of the graph represent a much larger slice of income than the remaining bars.  I suspect the graph was prepared in this fashion simply to keep it from running off the page to the right, although some suspicious folks believe it was crafted to make it appear as if the super-rich dominate the rest of us.

Notice that the median household income was $50,00.  Even a cursory glance at the above graph shows that income distribution in this immoral country is hardly along the lines of the classic bell curve.  That being the case, how is a person expected to define what the income parameters for the middle class should be?  Even slight adjustments to the right or the left derive vastly different numbers for who makes up the mystical middle class.  From a purely statistical perspective it would make sense to define the middle class as that 50% of the population that sits in the middle of the income population, regardless of the amount of income earned.  That would guarantee that the middle class always makes up 50% of the population while the upper and lower classes, where I generally find myself, would each have 25% of the income population assigned to them.  Then it would be a simple matter to determine the total income in each class by adding together the percentages for each group.
Applying that principle to the above chart shows me that the lower class goes from $0 to $25,000 in income, the middle class goes from $25,000 to $95,000 and the upper class goes up from $95,000.  But this simple statistical interpretation of income figures does not make for good propaganda.  For example, the newspaper story I mentioned above said, "Middle income households in metro Denver shrank from 58 percent of the population in 2000 to 53 percent in 2014....That shrinkage did not come primarily from households moving into higher income brackets but rather from more households moving into lower income ones."  How does the article define the middle class?  Household income between $42,000 and $125,000 is how the middle class is defined in Denver.  In a typically alarmist fashion the author of the article interpreted the statistics and concluded that, "one of the most disturbing findings in the study is even though the bar needed to enter the middle class dropped from 1999 to 2014, a smaller share of the population was able to cross it."  That observation can only be made if the interpreter first makes the decision to not use the middle 50% of the income population as the middle class.  In other words, the conclusion is already derived from the presupposition made at the start.
A elitist government economist is quoted responding to the new data about the shrinking middle class.  He said, "The middle class is shrinking, suicides and drug abuse are up, fertility has dropped precipitously, millions of college graduates are stuck at places like Starbucks, and home ownership is at a 48 year low."   Well there you have it.  The death of the middle class has brought about the death of us all.  The only way to solve the problem is to petition our rulers to create programs that will stop suicide and drug abuse, cause people to have more babies, give college graduates high paying jobs (and forgive their student debts) and force people to buy homes rather than rent.  Hummmm.....isn't that what Bill Clinton tried to do with his sub-prime mortgage scam?  How did that turn out?  Anyone recall the Great Recession?
Those who bemoan the death of the middle class love to tell us that the income earned by the remaining members of the middle class is shrinking as well.  That lost income is always described as moving upwards, to the evil and greedy members of the upper class who use their wealth and political power, as Bernie likes to describe it, to keep their boots on the throats of the workers beneath them.  One of the more popular graphs used to indicate this alleged reality is from the Federal Reserve.  Here it is:

This graph clearly illustrates that the median household income, in real dollars, has declined since it peaked in 1999, over sixteen years ago.  Surely the middle class is in serious decline.  What is not shown in the above graph is the fact that the reason for the decline in real median income per household is entirely due to the decline in the number of people that make up a household.  With more people choosing to live alone and more people choosing to live in sin (and file tax returns as singles) the number of people per household has declined.  The less people there are in a household the less income that the household will report.  A more accurate way to gauge the real income of the citizens of the SDA is to see it as a "per capita" figure.  Here is that graph:

Real income per capita has risen significantly since 1999 according to this graph.  I guess that is why nobody uses it.  Yes, it is true, the upper class earns a disproportionate share of that increase but, as they say, a rising tide lifts all boats.  Everyone is better off when real income rises.  It is only the sinful act of envy that takes good news about rising incomes and turns it into bad news about disproportionate shares of increase.
Another factor never considered by those who believe the middle class is dying is the fact that the population is aging.  As more and more people enter the retirement years the share of income earned by those formerly middle class folks often goes down, sometimes dramatically.  A family or person that previously was a member of the middle class is now listed as a member of the lower class and socialists clamor for politicians to do something about that fact even though the net worth of those retirees is often greater than those who remain in the middle class.  If a truly accurate picture of the middle class were to be created it would combine both income and net worth statistics, thus giving us a full picture of the financial status of each group.
Ultimately the middle class is a nonsense concept.   There is no reason why the middle class should be sacred.  There is no reason why the members of that class should see their incomes go in any particular way.  It is all just number crunching of one sort of another.  The only thing consistent in all of the smoke and mirrors about the shrinking middle class is the call for anointed government rulers to take money from the members of the upper income cohorts and give it, less 10% for handling, to the members of the lower income cohorts.  That, of course, has been going on for years.  There is a reason why the top 49% of the income population in this sinful country pays 98.5% of all federal income taxes.  Praise Bernie!