What's Broken?

There is a line of reasoning that claims that the economy is all in our heads. According to the subscribers bad news breeds fear which negatively affects investment patterns, which leads to more bad news. Good news works in precisely the opposite manner...

The people would have you believe that you can walk into a burning building and ask, "Fire? What fire? Everything is excellent!" and suddenly... poof... the buildign would cease to burn.

I can hardly imagine a more childish or... simplistic... view of the world around us.

But... since it is simplisity that is desired... I have desided to provide it. Tonight... I should very much like to take the opertunity to explain what's broken in terms everyone can grasp.

Imagine if, you will, an island. On this island are several cast aways. There is japanese man, a chinese man, a french man, a german, an indian, and an american.

Each morning the Japanese man goes fishing. He fishes all day. The chinaman gathers fruits and nuts. The german crafts utensils. The indian hunts wild game for meat. The frenchman cooks all day.

At the end of each day... all of them present their well crafted products to the American who has done nothing all day. The American eats virtually all of it... leaving only the barest scraps for the others.

The next day it starts over.

Now... Keynesian economic theory... or... as you may prefer to think of it... American economic theory... the economic theory that our government has used to make all of its decisions for the last hundred years or so... would have you believe that the American is vital to that island's economic stability.

I mean... Look at all the jobs the American is creating by providing all that consumption.

Only a harvard educated politician would actually believe such insanity... but believe it they do. With such faith that they risk the very survival of their nation upon it.

Any idiot can see the American is a drag on the economy of the island... The other castaways would be far better off without the american at all. There would be more for them. They would have more wealth... and more free time.

And you wonder why the world loathes Americans?

The problem is not perception. The problem is not in our heads. We are not facing tough economic times because we're not happy enough.

We are facing tough economic times because we've stopped producing. No. The problem is not in our heads.

Its in our hands.

Blame Harvard Business School

"If its Not Growing, Its Dieing"

You want to know whats to blame for your current economic crisis? Greed you say? Harvard Business School says I. Its that theory.. that wretched buzzword style catch phrase... so often repeated... its impregnated every fascit of american economics.

Its a deplorable, loathesome, and ultimate suicidal business theory. Its one that eventually damns and destroys everyone and everything that adopts it... from a business, to a school, to a city or town. But why? Why is it so destructive?

Several different ways actually.. and I'm going to provide some fairly varied examples from completely different, and seemingly unrelated, areas to demonstrate them.

I want to explain the mechanics of why this theory is so wretched. The theory mimics greed. It creates a strip mining mentality. 10% profit is good. Its not bad. But see... 10% profit 2 years in a row... is not seen as consistant performance... instead when you apply this Harvard Business School Abortion of a Theory... its actually viewed negatively. Its illness and death. Its not growth... therefore its "death". So... 10% isn't good enough in year 2. In year 2... you have to have 10.1%... and you'd much rather have 11% or more.

Now compound this attitude with the hype driven world of Wall Street trading. More profit is more hype. More growth is more hype. More hype is more money... more money is more infrastructure... more aquisitions... more growth... and remember.. If its not growing... its dieing.

You ask were the greed comes from? It comes from that mentality. It is the direct result of the application of that mentality... to every aspect of business.

So... Lets look at specific examples...

Lets start with sports... and there is no more obvious example than NASCAR. The drive for growth has driven NASCAR to sacrifice its soul to appeal to "new" markets. This is seen by NASCAR pulling races from traditional south eastern tracks and giving them to California... or Las Vegas... where no one gives a damn. More than that... its seen in the ultra PC turn we've seen in NASCAR bigwigs over the last 10 years. Driver quarells are crushed immediately. Any show of fire and emotion is squashed immediately... all in the hopes to repackage the sport to appeal to new markets. Never mind the fact that the repackaging has pissed off the loyal fans who've been around forever.

NASCAR has found itself in a crisis. For the first time in decades it is boring... and people are ignoring it. Blame the Car of Tomarrow...but the real culprit was their idiotic attempts to market the sport by removing all the aspects that made it marketable in the first place.

Lets look at the housing market. Its all "greed" right?

Let me suggest that much of the Fannie Mae / Freddie Mac contraction can be directly attributed to Harvard Business School thinking. Look.. if everyone that qualifies for a home has one... and has recently financed... you really have a problem. You have to grow... if you don't grow... you die. So what do you do?

Duh.

You do the same thing NASCAR did... you go find a new market. And if there aren't any new markets... you better damned well create one. After all... its a matter of survival.

Do the math.

And all the while I find myself thinking of that little store up in Oark. The Oark General Store in Arkansas has operated continuously since 1890. Its the same general store today that it was 100 years ago.

It has not grown.

And look at that...

It has not died.

That's because 10% profit... over and over and over again... is successful business.

10% profit... followed by 20% profit... followed by 50% profit... followed by 60% profit.. followed by bankruptcy and collapse... Well we have a word for that to... We call that failure.

You want to fix the economy?

You can start by razing Harvard Business School... and salting the earth.

Dave Ramsey = Idiot

Now... let me preface this public flogging. Dave is not wrong about personal debt. By all means... work to become debt free. Cut up your credit cards. The spanking I'm about to administer is purely related to his column... a mailbag of sorts... where in he responds to a question about inflation. A woman emailed him and ask him to explain what inflation is. This is his answer:

"Basically, inflation is the increase in the cost of something. For example, if the inflation rate of gasoline is 10 percent, that means the cost of gas went up by 10 percent.

There are a lot of variables involved when the price of a product increases. One of these is simple supply and demand economics. This means that if there's a shortage of a product, it's perceived to be more valuable. The result of this is almost a bidding war of sorts, and it will cause prices to go up.

The opposite is true if there's an over abundance of a product or item. If you've got 10 people wanting 100 items, then you've got a soft market, and the prices will go down. That's called "deflation."

That's a pretty simple factor, but the variables can get complicated and interconnected. If you're buying food from another country, that particular country's economic situation affects our economy because it's a component of our economy.

Or let's say you're building a house, and shingles for the roof are more expensive than they used to be. Well, there's oil in singles, and the price of a box of shingles may have gone up because the price of oil went up. So then, you're looking at a scenario where oil caused housing prices to rise."

Ridiculous. Utter idiocy. Pure unadulterated bunk. Ramsey describes perfectly natural and normal changes in supply and demand and then calls it inflation.

This confusion is pure Keynesian stupidity.

Prior to 1930 everyone knew that inflation had nothing to do with individual prices. Inflation is related to money supply. Price increases are symptoms of inflation. They are not the cause. When governments print to much damn money... that is inflation. Yes... prices go up... because the individual dollars in your bank account are worth less... because... as I said before... The government printed to damned many of them.

Ramsey has an enormous audiance... and its made up almost completely of the economicly illiterate. They trust him implicitly. So when he writes stupid crap like this... they believe him. They now know that any time a price goes up... you call that inflation... and any time a price goes down... its deflation.

No doubt they are all scratching their heads wondering why on earth massive deflation would be a bad thing. After all.. if everything were cheaper... they could buy more right?

Dave should be punched in the face for writing this. He is perpetuating a deadly ignorance. He is fascilitating the fiscal suicide of the nation he claims to love, by disarming the public of the information necessary to prevent it.

Not that preventing it is necessarily desirable of course.

Diversity Training

One of the more amusing experiences I've had whilst perusing the blogosphere came when I stumbled onto a local lefty blob... I mean... blog. The girl was fretting over her siblings chirens.. because you see... they apparently we're making fun of some Mexicans.

The girl was ringing her hands... and fretting... "its starting" she worried. "Is there anything that can be done?"

She was worried of course because the diversity curriculum just hadn't taken. I thought about linking so you could see for yourself... but do you really want to? Nah.. I didn't think so.

But let's examine this shall we? I mean what is a good priestess of diversification supposed to do? Well... let's see... How about we start by examining what's already being done.

It starts in daycare. Kids are punished for describing other kids in anyway that may refer to race. When a teacher see's a crying child she may ask, "What happened?" the blubbering child will then say something like... "that boy hit me!"

"Which boy?"

"That black boy over there."

The teacher... then confronted with a whole new problem deals with it swiftly. The boy who was hit is punished for "seeing colors", and the other boy isn't punished at all. Think I'm making it up? Think again. This scenario came straight from the day care next to the mortgage company I used to help run. This is brainwashing... and its very powerful. Unfortunately the results are exactly the opposite of those intended.

Fresh from daycare these kids now move on to school where their education in the theology of diversity is stepped up even further. Any mention of race is dealt with severely when the authorities are made aware. Blacks are treated different than whites... but no one dares speak of it. PC propaganda is rammed down their throats 7 hours a day.

And what does it teach them?

It teaches them that adults are stupid.

They know their school is 80% white and 20% black... and they know that their basketball team is somehow 90% black... and the football team is pretty close to that too. They also know that their Calculus class has 30 kids... but only 2 of them are black... and one of them is getting a D. They know that their AP physics and AP chemistry classes have no blacks at all.

Kids aren't stupid. Kids simply observe. Their brains haven't been deluded by ideology yet. But they have by now learned to regurgitate the required party line.

But back to our liberal friend... What is she to do? The question she's really asking of course is, what is left to do?

The answer?

Nothing. There is nothing left to do. Political Correctness is forced upon these kids hours upon hours each day. It just does work for the vast majority of them. Why? Because kids aren't stupid. Kids observe.

All it does is convince kids that authority figures are idiots and cannot be trusted. It actually fosters authority complexes and emboldens the racism that already exists in everyone.

Every once in a while the liberals are confronted with a small dose of reality... invariably it scares the shit out of them.