Category Archives: Politics

Economic Bullies Are Fattening Up: Where are the Monitors?

When at middle school, some few years ago now, monitors would troll the break-rooms, corridors and playgrounds. If a bully or bully-like behavior was observed, a faithful monitor (sometimes of a more diminutive size) would wade in to neutralize the issue. In industry, economic bullies are getting larger and more powerful and the monitors are missing in action.

What we knew was happening in America is now clearly happening in the UK. In this week’s Economist there is an article titled, “More money, more problems” in the business section. The article reports on new research that suggests industry concentration is well established and getting more pronounced; large, dominant firms are getting larger and more dominant. As a result, a greater proportion of economic profits are being hovered up by the bullies and the rest of each industry is sucking on less and less.

If the market was operating efficiently and freely, the opportunity for start-ups to innovate and create the ‘next big thing’ would help foster creative destruction. But public policy has played a key part in (over?) regulating how business start and operate; and lobbying is running rampant such that, more clearly in America, firms with deeper chests can invest in lobbyists to ensure their masters’ interests are protected; putting more pressure in the smaller guys. The monitors have become the employees of the bullies.

There are implications a-many, some reported in the Economist article, touching innovation and its diffusion (or lack thereof), wage rates, productivity and employment. Larger firms tend to achieve higher degrees of economy of scale; this is a large playground where automation can help drive productivity thus helping the bullies get stronger. Other data from the OECD and other sources suggest that diffusion of knowledge and ideas, needed to help firms share in productivity-inducing work, is slowing down between innovators and followers; in other words between those who already have, and those that already don’t. This reinforces industry concentration or the barriers around the OECD’s ‘frontier firms’.

Employment opportunities and where we collectively go to work changes; and who is able to pay a higher wage becomes self evident. So all in all the controlled environment we live in is a far cry from the free market that was operating 20 or more years ago.

It seems the pundits feel that we need more competition. Can we legislate for more competition or can we undo the constraints that put us where we are today? I think that what is needed is:

  • Less regulation overall and particularly on small and medium business, spanning financials, hiring practices, IP development, and so on
  • Increase investment in primary R&D
  • Increase vocational collaboration with education and industry
  • If you want more regulation, point it at the lobbyists: reduce their spend and power
  • Tinker with the tax code to help motivate investment in smaller firms and Tomory for it, tax larger firms more.

But these items are not even popular topics in politics today. It’s much more likely we will talk about fake news and Russians and Facebook, than economics, growth and hard work. Oh well.


The Inconvenient Truth About Charlottesville 

The cout detat continues apace as the establishment, the democrats and an increasing number of republicans continue to resist Trump.  Charlottesville and its aftermath was just what the doctor ordered, in the eyes of the left.  Their arch-enemy was in trouble no matter which way he leaned.  But I have to tell you, after reading the Opinion piece by Holman W Jenkins Jr., in Saturday’s Wall Street Journal, the whole things stinks.  See The Extremist Show is Just Starting.  It seems that the Democrats control the city where the application for the Charlottville demonstration,  against the removal of a civil war statue, was made.  Why didn’t they turn it down?  Did they deliberately set the whole thing up?  

But reading on we find that the democratic city members who voted to remove the Robert E Lee status have all left office.  Two didn’t seek re-election; one did and lost; and one had to leave his teaching job under a cloud due to a “history of bigoted, anti white tweets”.  It seems, according to the article, that the removal of the statue was not a popular item.  It was only popular with a small number activists groups.  The author of the opinion piece lists some of these activist groups and their background is less than savory and full of trouble making social media or principles.  The whole event seems to be a prefect set up by a number of clever inviduals who might have staged the whole thing.  It’s just too prefect and unlikely to have happened without careful planning – on both sides.  And this is the point that the mass media don’t want to talk about.  It takes two to make a fight and both sides turned up looking for that fight.  Yes, Trump took the middle road as Obama did and as explained in “Trump follows Obama’s example of moral equivalence“.

So after reading this opinion piece was I left with sour taste.  It seems that the establishment is gearing up for hard work against President Trump.  Those on the extreme right need to watch their actions.  They may end up falling for the bait and thus damaging the very think they perceive helps their cause (even though Trump does not).  The coffee was strong but with such a sour taste I had no option but to go to the tread mill for an hour to get my frustration out.  

It was wonderful to watch the preceding Friday to listen to Scott McNealy talking sense on CNBC’s Squawk Box.  He took Andrew Ross Sorkin to town over the mass media mess.  He explained to Mr Sorkin that everyone in their right mind stands against Nazis and extremeists – Trump included – and to use the argument of the change in tone, or the sequence of speeches the president made, as an proof he was defending Nazis is stupid.  Mr Sorkin was taken aback and not able to get his point over since he was pushing the establishment’s arguments.  See the video here. Mr McNealy affirms that Trump did not say or imply that any Nazis or white supremacists are “fine people”.  Trump was referring to the likehoood that on both sides, there were some there who were going to protest peacefully and some others were going to peacefully protest the protesters.  But Trump’s words were construed since it played into the establishment’s plans.  The cout detat is gathering space.

My Second of Three: The Lies of Communism and Capitalsm

Three articles came across my desk yesterday – and I noted them with a blog on the first concerning Trump/Obama.  Today my “second of three” looks at a comment by Martin Sanbu of the Financial Times, titled “From Lenin to Lehman – the big lies“.  Let me restate the lies Mr. Sandbu explains.

Communism promoted two lies:

  1. A society organized by communism would lead to widespread equality trough collective purpose.
  2. Central planning would lead to a more efficient economic system

These two lies came crashing down as we all know.  We are all human, and despite our best efforts, when you put some of our number in charge of others, they tend to pay themselves for the pleasure.  Absolute power corrupts absolutely.  The second lie took a while longer to fail but some economists nailed it.  We are all enterprising and creative individuals that seek to improve – that is a natural tendency.  Communism flew in the face of this and ignored a basic human need.  It also created a massive information problem.  The economy is so big that no amount of method or information can be gathered and analyses centrally.  There are more efficient systems to help organize resource allocation.

So far, so good.  Now let’s look at the authors’ lies of capitalism.

  1. The market values of financial and other assets accurately reflect the economic value they represent
  2. The future will always offer more opportunities for a better life than the past

Mr Sandbu has tried to make an argument in order to write a column.  His arguments are manufactured and simple, probably because he assumes you would not understand the realty.  Let’s look at them.
The first lie is explained with the argument that prices measuring wealth that people thought they had did not in fact exist.  This a massive misunderstanding of the price mechanism and what happened in the financial crisis. First, weath is always and everywhere a relative measure.  As such we need something to compare one to another – price fits the bill nicely.  Howeve, justbecause  the price of assets go up does not mean you are more wealthy.  Yes, press articles told us that as house prices went up we could therefore monetize the increase in value.  But that extra cash is not wealth – since we incurred a debt (increase in debt).

The second problem is that prices were not set efficiently.  There were several failures in the system that meant risk was not correctly priced into the asset price.  This is not a failure of price per se.  It was in part a failure of living and cheating individuals (that didnt go to jail) and incompetence by others.   If we had more transparency (and accountability) in the pricing systems that worked together, more folks would have seen the risks sooner and the bubble might have been nipped in the bud.  

The second lie is totally made up.  The author argues that we are now poorer than we were before the crisis and that our future prospects are negative such that the young are now dissalusioned.  This is fallacy.  This is not a failure of capitalism.  We do not live in a free market.  We live in a massively over regulated and over taxed econonmy.  Never before has the US government taken so much tax and spent so much (e.g. Debt) on social transfers.  The number of rules we have to follow has never been higher.  The number of rule-making bodies writing those rules, and rule-making bodies managing the rule-making bodies, has never been higher.  Over 51% of Americans receive a social transfer of some kind from the governance (see A Nation of Takers).  

If the central bank had raised interest rates sooner private industry would have returned to normal investment practices.  If the central bank had collapsed its balance sheets sooner, private funds would not have been crowded out and instead redirected to stock buy-backs and uncompetitive M&A, which has now created yet another stock-market bubble.  We need a good dose of natural, healthy, honest hard work that is rewarded and encouraged. We need to stop talking about how we are all owed a debt by the government and they should give is all that we need.  We need to take responsibility for our own success.  

The author concludes that we now need a mix – of communism and capitalism to get out of the mess we are in.  He is mistaken.  We exist today in a mixed model.  Socialist has been creeping up on us for years – and this is the analogy to communism.  No, we are not let by Leninist’s or Trotskyist’s but we are led by socialist policies that align with the lies of communism above.  We need more honest work, and honest pay, in a freer economy.  We do need regulation – but we need less so we can see where the real wood for the trees lays.

Everything Comes in Threes: Trump/Obama, Capitalism/Socialism, and Britain/Germany

There were three articles in today’s US print editions of the Wall Street Journal and Financial Times. One highlights what the mainstream media does not want to admit about Trump; one looks at the so called lies at the heart of capitalism and communism, and the last looks at Brexit and Germany’s view of its neighbor. This blog looks at the hot topic of Trump and Obama vis a vis racism.

In “Trump Follows Obama’s Example of Moral Equivalence“, Jason Riley highlights how President Trump has repeated the same method employed by President Obama when criticism torrid and unforgivable acts by extremists. The opinion piece highlights how Obama took side swipes at racist policemen in the same dialog concerning those who killed such cops. Two examples are given – Dallas last year where 5 cops were killed and then again i. Baltimore. In both examples the killing and killers were correctly vilified, but the implied unfair and even racist references to the police and judicial system implied that the killings were justified. This is the exact same “identity policies” (Jason Riley’s words) that Trump employed this week when criticizing both sides of the Charlottesville situation.  

Clearly there were extreme right-wingers and new-Nazi’s that turned up for a fight. But someone had to stand up and return that fight. That was just as clearly the extreme left. It takes two to tango. You can’t fight yourself. And better, Trump did call out racism and Nazism, but he is standing up against the left who want to push their agenda. For example, the NAACP want to ban more souther statues related to the Confederacy. This is seen as an attack on the white’s. As such it feeds into the KKK’s plans. If the NAACP focused on the future, the KKK would have little to do.

When Obama was president he was attacked by the smaller right-leaning press for his remarks. Now Trump is also being criticized but the scale tells us that the press is, in general, more left leaning.  I dont think anyone that matters endorses the white supremacists.  Trump certainly does not.  And I assume that democrats do not endorse the extreme left that seeks to promote black supremacists.  I give Trump and Obama the benefit of the doubt.  But anyone on either side of the devide that claims to be open minded, than attacks the other side by removing statuses or saluting Hitler, is not worth talking too.

The Problem with American Politics is that we Don’t Understand Each other

Left or right? Democrat or Republican? White supreme year or Black Lives Matter? These are all labels that incite a certain response, and that response tends to be negative. If that response is only marginally negative, in about three more seconds it becomes impossible to explore the meaning of the labels, to debate any issue openly and fairly, and so find any possible grounds for agreement. I saw this so clearly on Sunday morning, reading my Wall Street Journal.

In the Review section on the front page was an article by Mark Lilla, based on his upcoming book, “The Once and Future Liberal: After Identify Politics“. It is an interesting article that explores what has happened with the left-leaning side of American politics and the so called liberal wing lost its way by focusing too much on specific social goals by flouting them in front of every other policy and voter. But this is not the main point I wanted to call out.

In the opening sections of the article Mr. Lilla so nicely expresses the very reason why our politicians, even our own colleagues, are unable to discuss politics without it becoming an emotional or charged issue. The author introduces a way to look at democrats and republicans as follows:

Ronald Reagan almost single-handedly destroyed the New Deal vision of America that used to guide us. Franklin Roosevelt had pictured a place where citizens were joined in collective enterprise to build a strong nation and protect each other. The watchwords of that effort were solidarity, opportunity and public duty. Reagan pictured a more individualistic America where everyone would flourish once freed from the shackles of the state, and so the watchwords became self-reliance and small government.

This explanation of what happened at this pivotal time in US history clearly unmasks the misunderstanding that is actually reinforced and even peddled by those that want to emphasis a difference – real or imagined – between our political parties. Let’s look at this perspective for a moment. First Roosevelt. The New Deal was basically a Keynesian expansion of public sector spending. It was designed to drive economic recovery in America after the terrible challenges of the Great Depression, itself brought on and exacerbated by Congress’ unwillingness to forgive World War I debts. The New Deal of public works indeed worked substantially, and it brought with it social services to help the less-well off. However, the watchwords chosen are misleading. Opportunity is a word the right tends to see ownership of: the left tend to focus on equal outcomes, the right tend focus on equal opportunity.

Now looking at Reagan and you again would be confused. Reagan did not dismantle the New Deal. The reality is that social services and the entire continued transfer f public funds to the population continued (and continues today – see A Nation of Takers). But Reagan did ask of us all a question: Are you not first and foremost responsible to yourself? This is a key point since it presupposes that you are not, in the first instance, owed a thing. You are supposed to try your hardest to help yourself. That is why self-reliance is a good watchword, it it is portrayed as something alien to the New Deal or democratic values.

I think there is a lot more common here than meets the eyes but media, press and writers like Mr. Lilla want to paint a murkier picture since it stokes spending on their wares and it drives eye balls and voter emotions who have nothing better to do with their time (#WhileRomanBurns). Here is where the common ground exists:

  •  We are first and foremost individuals. We should be proud of our ability to stand alone, fend for ourselves, and play a key role in society, our family, and wherever and whatever we call home
  • Second we have a responsibility to our fellow man. This means we should respect her needs, her wants, much as she should respect ours. Everyone is equal under the eyes of God or the sun, which influences you most.
  • Third we have a civic duty to help others who, through bad luck and ill fortune, have need of assistance until and if they are able to again stand up and live as equal among us. We should work together to better our opportunities and the world around us. We should create civic services to serve the wider community; to educate, to serve, to heal, to protect.

These are all common ground issues. What they do not say or imply are any of the following:

  •  Minority preferences should not be flouted and used to subvert the way the majority behaves. Respect and support for minority needs will be supported, in their place
  • We are all owed an equal outcome. There are no such things as differences between sexes, creeds, religions, and secular groups. Though we all start from different places we are owed a common experience.
  • It is our right to be given a job, good health, entertainment, and all that would otherwise come to us by hard work, clean living, and honesty.

I would agree with Mr. Lilla’s premise that the Liberals lost their way. Sometime in the 1960s’ this “identify politics” become a legitimate goal in its own right. Each and every minority cause was celebrated, then promoted, then sold, as a national concern that should alter everything for everyone. Instead of mutual respect, and yes uneven experiences, liberals and left-leaning “progressives” adopted a national platform for change which resulted in a splintered view of the world, yet with the cloak of uniformity.

Likewise the right has failed too but for different reasons. The individualism that was at first a message of responsibility resulted in example after example of selfish acts, groups and even organizations. Responsibility gave way to greed. It turns out that this was not a fault of capitalism or right-wing politics. This was a failure that came about because we are all human. It is human to want, to greed, to collect. You only have to understand our history to know this. Worse, no amount of legislation can change this.  

So left and right made mistakes but rather than any third force see those mistakes and call them out, they have become hidden in the shroud of politics and now represent some underlying, simmering reason for arguing for why the other side is wrong. If we could start all over again, with no preconceptions of what is right or wrong, what is left or right, we might get past today’s current blind spot. The only trouble with that idea is that we would destined to are the same mistakes all our forefathers have made over and over again.

So for now we need to message the common ground – call it a New Bargain. Over time members from the left and right can join; but they cannot join with a message of, “I join because the other side is wrong”. They just have to forget their identity politics and remember who they are: individuals first, responsible for their own success, working together to help all have the same opportunity.

The More Educated You Are the More Liberal You Are?

Heather McGhee, President of DEMOS, was on “Meet the Press” (MSNBC) Sunday and she Implied that the more educated you were the more likely you were liberal. Apparent ly you would be more exposed to US and world history and therefore you would see that we in America have fallen short with dealing out fairness and justice and equality and so you want to work harder towards those goals. Oh what a lie we have wrapped ourselves in!  

I have read world and US history widely, and I note that in year’s past our forefathers felt that they were owned nothing; that they had to get on their bike to find work; that you didn’t complain to others if you were down trodden; that what you earned should be yours and we each had responsibility first, and government second.  That is not what Ms McGhee is referring to though.

If I look at my neighbors and peers, yes the majority are ‘educated’ and yes the majority are left-leaning. But I think that there are two types of ‘liberal’ out there that Ms McGhee is lumping together. There are those who first believe that the individual has responsibility to themselves and the community; and the others who think the community owes the individual. The former are actually real people I get on with and who can debate; the latter are folks mislead and confused by politicians and left-leaning progressives who want to further their success.  The problem is the left has hidden the differences between these two “liberal” sects (i.e. classic and modern) and dressed themselves up as helpers of the repressed.

I am well educated and am most certainly not left leaning, as Ms McGhee is. I prefer to relay on my own gumption and assume others should do the same. I expect the government to help out after all else has failed. Go to China, India, Singapore, and show me where the poor people are.  They are there for sure- but they are out working for a pittance and not complaining about it. They don’t sit on their butts, arguing that the government owes them a living or asking for a hand out.  

I do want my fair taxes to go help those in need. But many who take government hand-outs are not in real need. Let’s fix that. I do want a safety net to help those who cannot fend for themselves. But many claim benefits who should be means-tested. Somewhere back in the 1950s this whole gravy train was put into motion: socialism by design was embedded in our ‘free market’ systems and the left has now made it standard practice. Now we cannot even debate this- if you do you are pilloried as racist, sexist; marginalized since your beliefs don’t comply. It’s about time the silent majority spoke up. Where is our Nixon now?

Later in the program Ms McGhee argued what the democrats need to do to unite and take the battle to Trump. The odd part of her dialog was that she repeated Trump’s message yet she didn’t understand what she said:

  • Work that would drive increasing wages (meant to be central to Trump’s agenda, if only we can get regulation and taxes out the way)
  • Fairer trade (again, apparently central to Trump’s agenda – he is not about trade barriers but fair trade and free if free on both sides of the trade)
  • More investment in education (all forms of eduction, not just university)
  • Justice and law and order (first we need to establish trust and credibility, not attack the establishment)

It’s amazing how different we are yet similar in goals.  And the last comment made at the end of the program? American is ‘coming apart’ and self segregating; and we all need to assert our own individual responsibility. Amen to that.

At Issue with The Collapse of Conservatism

In the week’s Economist, the Lexington article (see A Republican senator revolts) praises senator Jeff Flake for a book, written in secret, that laments the decline and failing of conservatism. and the mistakes made by siding with, and electing, Donald Trump.  On first blush the well-written article leads me to conclude I want to read the book. But the author lets slip their own political views and so I’ll now give Mr. Flake’s book a pass.

What is conservatism?  It seems, if you read the article, that a ‘put your country second’ perspective is equitable to free trade. Why is a, ‘put America first’ not consistent with fair trade? Really, if you ever look at global trade and international supply chains, every organization, every country, looks out for their own benefit first.  They may not always say this – as it is all part of the negotiation.  But no one actually puts their own interests on hold for the other guy.  Only when satisfied or when satisfaction is in reach do sides negotiate closely and come to a ‘free trade’ agreement. And note, there is virtually never ‘free’ trade. There is almost always some cost, tax, cover charge, buy-back, duty etc.  

Mr Trump’s ‘put America first’ is not a call for nationalist policies; it is not a call for tariffs and duties.  It is a call to those that negotiate for their country that the US will now negotiate more fairly and not keep helping others out.  If you put a tariff on imports from the US, so the US will put tariffs on imports into the US.  That is fair trade – it is not protectionism.  When will the media, even the fair media, get this right?  Mr. Trump is making a political statement that says the obvious: this country needs to fair, as every other country is fair, in trade deals. Trump does not disbelieve the benefits global trade; all smart business leaders grasp the principles and see the benefits. Mr Trump believes in trade- period!

So we are left with asking why is his rhetoric picked on? We can only assume that such complaints and criticisms pander to a political sore that came about from losing the election; an institution and establishment that wanted to feed its own bloated cause: more government begets more government. Left and right have played this tune for years. Trump just happened to take the Republicans with him but in truth he needs his own part: New Deal Republicans.  

I get the feeling that Mr Trump is more conservative than many give him credit: freedom of the individual; responsibility of the individual over government; the expectation that the individual is not owed anything; that hard work and merit will be rewarded. And yes, that a safety net will be provided for those that need it.  However we live in s society today that assumes other owe them a living; that it is their right to sit on that backsides and be given everything the need and want.  We have become a A Nation of Takers.