The mechanics of a cult

The word “religion” is derived from Latin roots meaning “to re-bind”. The purpose of religion is to re-bind you to life so that you can go ahead and live it without writhing in existential Angst.

In many respects, humans are unique in the animal kingdom. Most animals don't worry about dying except when they are aware of an imminent threat. We can tell this because we can measure their physiological responses to threats, and watch them dissipate quickly after the threat goes away. Humans are one of the few animals who chronically worry about their ultimate fates: sickness, old age, the possibility of poverty, and death. Part of the reason must be our relatively large cerebral cortex, which is designed to handle abstractions. Another reason might be our ability to communicate abstract ideas; so even if one were not predisposed to existential Angst by one's-self, one might get the idea from someone else. Cetaceans (whales and dolfins) seem to be capable of some sort of communication, which along with their big complex brain is probably why they are the only animals other than humans known to get depressed and intentionally commit suicide.

Do other animals worry? Sometimes humans are slightly amused if concerned to catch their pet dog or cat obviously having a nightmare while they twitch and whimper. I don't think they worry as much as we do, but it is one of those fascinating paradoxes of evolution that the seeds of a revolution are always planted before they are entirely manifest. This is counter-intuitive, and the reason that many people reject the whole idea of evolution.

My purpose in this essay is not to talk about healthy religious sentiment that does what it's supposed to do. I'll do that from time to time in a lot of different essays. Instead, since the over-arching theme of my blog is what went wrong with Western Culture, I'm going to write about what happens when religions go dysfunctional. I'm going to refer to dysfunctional religious sects as “cults”.

There are two kinds of cults. One bears a resemblence to religious sects in terms of ritual and myth, while the other one is harder to identify because the rituals and myths are subtle and modernistic. There's really no substantial difference in terms of impact, but the first kind of cult is easy to recognize, while many people, particularly in Western cultures that accept modernist fallacies without question, are unable to detect the 2nd kind of cult. I will give examples of both kinds of cults.

The basic problem that religions are supposed to solve is that of existential Angst: unhappiness and despair because our lives seem to be pointless, because no matter what we do or how we live our lives, our ultimate fate is always the same. The lie that lures people into cults and cultish behaviors is that if you perform one or more actions and achieve certain goals, then your life will be fulfilled.

Now, the cults can't deliver. I've already written about that, but just for a recap, here it is again: no experience or thing will give you lasting fulfilment. At best, it's like a “recreational drug”: the reward center of your brain is stimulated for a while, but not only does the initial stimulus wear off, but in the futute it takes more of whatever it was that stimulated it the first time to achieve the same effect, until finally you are too jaded to get any pleasure out of the experience at all—though you may end up addicted to the experience anyway (this is one way of thinking of Hell).

True Religion (capital "R") coaxes you (sometimes gently, sometimes brutally) into accepting that fact and learning to live with it. Cults exploit the fact. Because they have to account for your lack of lasting fulfilment, almost every cult has a “bogeyman” to blame for your eventual disappointment. I had to add the qualifier “almost” because a very few cults, such as the notorious “Heaven's Gate” cult, culminate in ritual suicide which effectively prevents the adherents from ever having to go through the disappointment phase!

Another way they account for their lack of delivery is to always emphasize the past or, more commonly in our Modern Age, the future. Paradise is just around the corner...if only you give your all to vanquishing those bad people who stand in our way. Placing the happy time in the future has lead to a number of science-fiction based cults such as Dianetics and the various cults involving space aliens coming to save us.

Cults can mutate with astonishing speed. Marxism spawned Feminism, so-called “Civil Rights” (ie, race-warfare in lieu of class warfare), Gay activism, and a vast number of mini-cults based on personal differences (age, ability, health, et cetera), some of them appearing on or adopted by the Right. Difference-baiting cults derived from marxism seem to take advantage of a vulnerable sweet-spot in the human psyche which they infect as as a mind-virus (meme); this particular mind-virus is prone to frequent mutations as new generations discover differences that can be exploited by a new variant of the virus. It's much like most new computer software virii being nothing but older versions with a few minor tweeks made by people who aren't smart enough to write their own. Marxist cults are, quite frankly, for dummies.

Sometimes cults spawn new cults not for new agendas, but to pursue old agendas under a new disguise when too many people have become disillusioned with the old cult. This is called “revolution within the form”.

There is another aspect of many, but not all cults. Sometimes the cult leaders swallow their own poison and actually believe their own lies. More often, the cult leaders are quite conscious of their deception of their followers. Cults are frequently planted in order to further various political agendas. The “Christian Zionist” cult is a case in point: the people who planted it (and continue to lead it) are neither Christian nor, traditionally, theistic. In these cases of intentional deception, you often find at least 2 different layers of belief and practice: the outer cult for proselytes and the outside world, and the inner cult.

One more aspect of most cults is the cult figure. The whole point of a cult is to take advantage of the need to satisfy egoistic cravings. Who better to lead it than a megalomaniac? Here is a short list of famous cult figures: Sun Young Moon, Kim Il Sun, Mao Dze-Dung (I'm sorry, but that is the accurate transliteration of his name), Vladimir Lenin, Leon Bronstein, Betty Friedan, Karl Marx, Moshe Dyan, Golde Meir, Ayn Rand, Che Guevara, Jim Jones, the “televangilists” (ALL of them), Madaleine Murray O'Hare, Madeleine Albright, Bhaghwan Rajneesh, L Ron Hubbard, and Martha Stewart (the Yuppie Cult).

The cultists often believe that their cult figure has magical powers. Moshe Dayan for example is often claimed to have walked from Poland to Israel when he was 2 years old (actually, he was born at a Kibbutz in Palestine). Rabbi Menachem Schneersohn is said to have resurrected from the dead and is now living in Israel waiting to lead the armies of Israel against the nations. Mao Dze-Dung was the subject of numerous hymns praising his power to protect even when he wasn't physically present, for example, that “when the storm rages and I am frightened, I think of you and everything will be alright”.

By now you should see the pattern. Consider some modern cults and look for the pattern yourself: Feminism, Gaia-worship, Humanism, Modernism, Objectivism (Ayn Rand's own personality cult), Political Activism, Yuppyism, and Zionism. Each one promises personal gratification through ...(insert cult objective here). Most of them promise fulfilment at some future time that never seems to arrive. Almost all of them have someone to blame for the postponement of Paradise. Most of them have a cult figure; a few have several, sometimes simultaneously, sometimes in succession. Many of them involve magic, often while pretending to be “scientific”.

All of them are immensely destructive. Understanding how they infect the mind is the key to resisting them.

One more warning: when someone finally feels disillusioned about a cult, sometimes they flee right into the arms of...another cult! A common mistake is to assume that if a cult doesn't work, it's seeming “opposite” will work. For example, if Socialism and Collectivism don't work (and they don't), maybe Ayn Rand's capitalistic and individualistic Objectivist cult will work (it doesn't). After young American hippies rejected their parent's “crass materialism” in the 1960s, they tried “sex, drugs, and rock-and-roll”. If prodigal Yuppyism doesn't work, try Gaia worship. Sit on the floor in your yurt eating a bowl of cold brown rice and see if it makes you feel whole.

When everything seems to fail, people sometimes finally give up searching for that magic bullet. This disillusionment can lead to depression and hopelessness.

Unfortunately, the cure can degenerate into the disease. The Buddha taught that craving for things and experiences was the cause of suffering, but many people fail to achieve inner peace through, for example, Buddhist practices such as Zazen because so powerful is the ego's desire for gratification, that it can twist the cure for itself into more of the disease. Many people try something like meditation seeking a sense of gratification which they confuse with inner peace, and come out disappointed and disillusioned when they fail to achieve it. It is like antiviral software on your computer: strange as it may seem, there is nothing to stop the antiviral software itself from becoming infected with a virus, and infecting the rest of your software! There's nothing wrong with antiviral software per se. There's nothing wrong with anti-ego as long as it hasn't been infected with ego.

The only cure for existential Angst is to accept the world the way it is—although you are free to try to change it, you must be willing to accept your own limitations. There is no way around this; twisting the practices which are supposed to help you accept the world the way it is in order to to achieve some sort of blissful experience (“Nirvana”) isn't going to work, and it's not the fault of the practices, but of the practitioner who is trying to cheat.

About the advertisments...

Google(tm) usually does a remarkable job of matching keywords to content. The adsense(tm) ads are supposed to be tied to the content of my blog, but I see that occassionally they have more to do with ideas that I criticize than ideas I endorse. I suspected this might happen. No harm done, if you, dear readers, will be tolerant and use your good judgment as I'm sure you will.

Another take on inflation, deflation, and the housing bubble

Here is interesting reading from Krassimir Petrov, Ph.D, regarding how monetary inflation plays itself out into either hyperinflation or deflation. This essay covers some of the behavioral aspects of the mechanics of inflation, which I have not written about.

“...an essential prerequisite for controlling inflation is controlling inflation expectations.”—Federal Reserve Governor Ben Bernanke

Not worrying about future price increases is one of several factors which encourages people to use excess money to bid up assets rather than consumer goods. Dr. Petrov explains that this is only the first stage of the game; there are two more to go. The stages are progressing unusually slowly, perhaps because Mr. Bernanke and his associates have been successful in controlling inflation expectations.

Your home equity could bankrupt you

Others more qualified than I have already written extensively about the housing bubble. The only reason for adding my own take is to warn my Internet friends that they might be falling for a trap that could result in their living a life of poverty they never dreamed might happen to themselves.

Many people believe that owning a home is their best investment. Under normal circumstances it's not a bad investment; a house doesn't go bankrupt like a corporation whose stocks or bonds you might own. You can insure it against natural disasters. Housing prices have usually not been particularly volitile—until recently—so relatively few people have suffered dramatic losses from buying and selling houses.

Something that many people don't fully understand is the mechanism by which they put up some money as a down payment on a house, make payments for a few years while they live in it (using money they would otherwise have spent on rent), sell it, and end up with significantly more money than their down payment.

This is called a “leveraged investment”. Suppose that you take $100 of your own money and double it at the casino. Then you have a 100% profit. Now suppose that you take someone else's $100 (that is, you borrow it) and double it at the casino. You pay back the $100 plus some interest, and your profit is...infinite! You started with nothing, and got something. Such a deal!

Usually lenders want you to put some of your own money at risk, so the return is usually less than infinite. Still, leverage is quite powerful. It's how billionaires are made. But they usually have the priviledge to borrow other people's money (often yours) without putting up significant collateral of their own, and their personal liability is limited through incorporation. Donald Trump, who routinely controls hundreds of millions if not billions of other people's money, is a case in point. He's one who lost, but he certainly had his chance.

The problem with leverage is that works in reverse too. Suppose that you put your life savings, say $50,000, down on the purchase of a $500,000 house (this is a reasonable number in my part of the country, but if it's not in yours just adjust the whole equation up or down by a constant factor).

A few years later, your house is said to be worth $750,000. The banking commercials, not to mention incredibly bad advice from your friends, convince you to “put your home equity to work”. You take out a home equity loan for $250,000 to put a kid through college and to remodel the kitchen. The kid ends up with a degree in Humanities and thinks about a Masters in Human Services. Your friends convince you that the kitchen remodel will add value to your house when you sell it. You think of it as an investment.

A few years later, your career is offshored to India and you have absolutely no way to make the payments. Unfortunately, too many of your neighbors are in the same situation. Too many houses are hitting the market at the same time. Your house won't sell for more than $250,000. You have lost your life savings, and are in the hock for another $250,000 plus interest. In some parts of the world, the terms of your mortgage would leave you liable for the full amount (this may someday be true here). And your kid is working as a minimum-wage hireling at a dry-cleaners.

Housing is not an investment, it is a use-asset.

You have been conditioned to believe that the scenario I described can't happen. Actually, it already has, in some parts of the country as a result of regional boom-bust cycles. However, at the moment we are going through a massive boom-bust cycle of international proportions.

The world's central bankers intentionally expanded the money supply by lowering interest rates and monetizing debt, in order to bail out various international banking schemes gone awry. Classical economic theory teaches that increasing the money supply causes inflation. In a sense it does, but there is no such thing as “general inflation”. Because a lot of the new money was invested into productive capacity in Asia, prices for many consumer goods actually dropped as Asia was not yet saturated in $US and the goods were being over-produced.

Much of the rest of the oversupply of money ended up bidding up the price of assets such as stocks, bonds, and real estate. What is odd is that price inflation of consumer goods makes people think they are getting poor, but price inflation of assets makes people think they are getting rich! This was the basis of the so-called “New Paradigm Economy”. Shills like Steve Forbes were calling it “growth without inflation”. Many including Milton Friedman were heaping sycophantic praise on the head of Fed Chairman Sir Alan Greenspan, who was supposed to have orchestrated a productivity miracle.

I don't believe in miracles. I say “look beyond the smoke and mirrors”.

All Sir Alan's miracle accomplished was that Americans bid up the price of housing through debt. Housing being a use asset, they are not really richer, but poorer and much deeper in debt. If you want to buy a house to live in, you must now go much deeper into debt than you would have had to a few decades ago—despite the fact that wages haven't kept up with housing prices. This is being rich? Those who already bought in look at unrealized profits and fool themselves into thinking of it as money in the bank. As is the case in all bubbles, it is impossible for everyone to cash out—EVER. A few lucky ones who get their timing right—serendipitously unless they happen to be privey to priviledged macroeconomic information—will have gotten in and out at the right time to have actually realized a profit. The vast majority of people will lose.

This is not even a zero-sum game, it is much worse. Not only is housing a use asset, but it is not entirely “durable” but is in fact to a certain degree a wasting asset, and it does require a constant inflow of money for taxes and maintenance. Depending on how the bill is calculated, you may have to pay a lot more money in taxes to live in the same house you used to pay a lot less taxes on; the rise in assessed value has the effect of eating into your income—and they call this the wealth effect. Having massively expanded the supply of housing to service the bubble, Americans have also deepened the money-pit that houses are. Many of these houses have been sold to low-income buyers, often with zero-down payments. I predict that there will be no way to maintain all the new houses that have been built in the past 10 or so years; in the near future we will have massive new slums.

What to do? Well, like I said, everybody can't get out of a bubble at the same time. But I couldn't save the whole world if I wanted to. Here's some advice for those who can think independently: whatever action you decide to take, live within your means. That means no more than 30% or so of your income should be going into a mortage, and that under reasonable terms (not zero-down financing and 40 year mortgages). If you are living beyond your means, then you already know what you need to do. Don't tell me about your “needs”, just do what needs to be done.

In a hyperinflation, which is certainly a possibility (sorry, no guarantees), then real estate does have the advantage of not becoming worthless. So I can't tell you to sell and live in an apartment. Especially since I have no idea when the real estate bubble might burst. I don't even know for certain that it will burst: hyperinflation would certainly cure the bubble (in which case we need to talk about your cash reserves). But in no case should you be sitting on more house than you can reasonably afford. That's never a smart move.

All slaves are equal

I watched Michael Moore's "Fahrenheit 9/11" last week, and bought the companion reader a few days ago. I was interested in some of the quotes and wanted to get more information for my own purposes.

I'm not endorsing either the documentary or the book. Michael Moore's problem is that he rushes into false dichotomies. A summary of his reasoning would be something like "We can ignore Al Queda and kill innocent people, or we can do the right thing and vote Democrat". There are better alternatives than either of those!

One of Moore's points in the documentary was that a lot of recruits join the military due to lack of other opportunities. He implies that this puts them at greater risk of being killed or maimed than the general population. So far, so good: those are fairly objective facts.

Mr. Moore seems to be troubled by this problem, but before he considers it in any great detail, he's ready to propose a solution:

The Fahrenheit/911 reader contains the entire text of an editorial by Philip Weiss entitled Here's the new face of the US military: Lynndie England.

The editorial has almost nothing to do with Lynndie England. Here's a quick synopsis: “Oh, if only we had a national draft, those rich spoiled brats in the suburbs would understand what the trailer trash is going through”. There, I spared you reading a tedious rant full of deception and dripping with elitist disdain for the rest of us.

A "bulverism" is is the fallacy of attacking an argument by claiming that the person making the argument is acting on self-interest. The word is derived from the name of a character in a C.S. Lewis book who got the idea from hearing his mother tell his father "you're just saying that because you're a man". We need another word to describe the fallacy of supporting an argument by pretending to be altruistic.

“Come into my parlour said the spider to the fly. I want to help you.”

First I need to commit a bulverism myself to get it out of my system: Weiss'es list of politicians trying to legislate a national draft for the sake of equalitarianism is like a who's who of AIPAC sycophants. What Weiss is really saying is that the scope of Israel's hit list requires an American military conscription. Personally, I am affronted that Mr. Weiss thinks we are too stupid to notice.

Now to attack his argument per se: since when is equalitarianism a worthy end in itself? In what sense are we any better off if wartime deaths and injuries are proportionally distributed among socioeconomic classes? I could have been lucky enough to have been born into a rich family, or I could get lucky on the battlefield, but how on earth does randomizing the correlation between the two make the world a better place?! The answer, of course, is that it doesn't. Making sure that deaths and injuries are proportionally distributed accross economic lines is like making sure they are “fairly” distributed among people of different blood types. Weiss is simply engaged in difference-baiting, specifically marxist class warfare. Young people who are poor and looking for opportunities could die on a battlefield, or they could die at the bottom of a coal mine or being swept off the deck of a crabbing boat. Is Weiss planning on equalizing the opportunity to die in every other kind of risky profession? I think not!

For that matter, it is the risk that creates the opportunity. If you draft soldiers, you don't have to pay them competitive wages. Mr. Weiss pretends to care about the poor, but he wants to destroy the economic rewards for the risks someone will still be taking! And that, dear friends, is very much the point!

It is astonishing that anyone as intelligent as Michael Moore would fall for Weiss'es mind-poison. Even more astonishing that he's not the only one. A while ago I went looking for websites opposed to involuntary military conscription, and was unable to find a single American site. Not one!

Oh, I found a great many websites purporting to be anti-draft. You can Google "anti-draft" and find vast numbers of hits. But I lost patience after clicking on link after link, only to find yet another website plugging the equalitarianism argument which sounds more like an argument for a draft rather than against. What on earth are these brainwashed lemmings thinking?

Now I need to dispose of another argument that Mr. Weiss mentions only briefly: the title of the editorial is a reference to Lynndie England, poster child for the Abu Ghraib torture scandal. While damning photos I've seen leave little doubt in my mind regarding her complicity, the indisputable fact remains that she was not in charge. Getting into who was in charge and why they permitted atrocities will have to wait for another time; for now we'll leave it at the fact that if Mr. Weiss pursued his argument that the atrocities of Abu Ghraib were the result of not having a military draft, the flaws in it would soon be apparent.

His two main arguments are baseless, hence my questioning of his real motives. I would rather question his intentions than his intelligence because I have more respect for him than he does for his readers.

What does it take to get through the heads of policy wonks that they don't own me and they don't own my children? What does it take to get them to realize that I'm not a willing party to their sleezy little hidden agendas? What does it take to get them to admit that not only aren't we all equal, but they've never come up with a convincing argument why we should be? I will never be Lynndie England's equal, and throwing me or my kids into the hell-on-earth they've created isn't going to change that. In the end, equality is the only thing that matters to them: all slaves are equal.

Caught in their own profit-trap

Whatever happened to penny candy?, by Richard Maybury contains a simple explanation of how monetary expansion causes boom and bust cycles. It is written for young people and makes a good gift to someone between roughly junior high through high-school age, but it is also appropriate for adults who either know nothing about basic economic theory or, worse, went to an Ivy-League school and learned economic theories that aren't true.

What the book does not describe is a mechanism that's subtler than the Keynesian boom-bust cycle, and rather worse. Please read the following explanation carefully and try to understand it, if you are responsible for your own or anyone else's livelihood:

The central banks expand the money supply by lending new money they create at will. "Austrian" economists (who aren't necessarily from Austria, but are so called because the founders were) are right to wonder how the central banks can expand the money supply forever if doing so requires ever more borrowing of money. If business opportunities contract, it would seem that fewer people would be borrowing money to start new businesses.

Members of the Chicago School, which teaches what is popularly known as "Voodoo Economics", seem to believe that they can expand the money supply forever, and furthermore, that the economy can sustain 3% annual growth indefinitely. Obviously, this school is not known for being environmentally-friendly. Furthermore, members of this school of thought-which is dominant among the policy-making class-claim that they can keep the economy liquid independently of anyone's willingness to borrow money, by "monetizing" virtually any type of debt. Federal Reserve governor Ben Bernanke actually threatened to dump money out of helicopters!

I for one always take threats seriously. For the sake of argument, I'm willing to assume that the central banks could possibly keep the system liquid (probably resulting in hyperinflation). But there is a horrible flaw in their sinister plans:

More money does not make more brains. Creating money and loaning it to people who wish to be entrepreneurs does not mean that they actually have a new idea that will make everyone's life better. More likely, the borrowers invest the money into delivering a product (made in China) that someone else is already delivering.

Consider Wal*Mart, the darling of the New Paradigm Economy nuts. It's just a chain discount department store. "Oooh, but it has distribution centers!" I'm not convinced that makes its operation any more efficient; if anything, trying to control too many links in its own supply chain is probably inefficient. Wal*Mart works because it started in a part of the country where people love to drive long distances, the local competition couldn't stand up to the kind of money that was backing it, and the Waltons are politically-connected and able to get free perks from taxpayers.

The New Paradigm nuts claim that driving smaller businesses out of business improves the economy because, they claim, larger businesses are inherently more efficient due to "economies of scale". This is a point worth emphasizing: driving small businesses out of the economy is deliberate policy. I doubt that efficiency is strictly a function of size; there is probably an optimal size for any given type of business, and it may depend on many variables such as location or type of customer served, but in any case whatever that optimal size is, it's finite.

Huge corporations are able to run at a loss long enough to bankrupt smaller competition. The theory is that they will make up for their losses through market share. Why? What's to stop another megalithic corporation from competing with Wal*Mart?

What the New Paradigm nuts either miss completely or don't want to talk about (insofar as they don't) is that a surplus of money to borrow generally cuts into profits of any size of business. Look at the telecoms and especially the airlines. Some of the biggest of them are already under bankruptcy protection-a huge mistake as this only perpetuates the dysfunctional status quo. Our central bankers are fixated on liquidity issues, but their very attempts to keep the system liquid only aggravate what Dr. Kurt Richebäcker calls "the profit carnage"!

How will the system reach equilibrium again? I'm not convinced that it will until it breaks down. I foresee all sorts of possibilities that defy the conventional wisdom that the system heals itself after a bout of either re-inflation or deflation. I suspect, in fact, that the inflation-deflation dichotomy is false; in fact I know it to be false since we have already experienced something called "stagflation" (an inflationary recession). There are other possibilities, and I think some of them are worse than anything we have experienced before.

Russian words to know

The English language rarely uses Anglo-Saxon roots to form new compound words. Latin and Greek words used to be used to form new words, but few English speakers know those languages anymore. Hence we now borrow many new words from other languages.

The Russian language has a particularly rich vocabulary (despite some strange omissions such as not having separate words for “hand” and “arm”). Here are some Russian words, some of them already somewhat adapted into English, corresponding to concepts we need to be able to express in the New World Order:

Agitprop: Agitation and propaganda. Originally referred to the governmental department bluntly referred to as the Department of Agitation and Propaganda; later came to mean any means of manipulation of public opinion.

Apparatchick: Political party rank-and-file.

Dedovshchina: Violent hazing of new conscripts. Frequent cause of death in the Russian military, from either outright abuse or suicide. Derived from “rule of the grandfathers”. While this is a useful word, it's a little too limited in scope because it refers to behaviors that while originating in official policy (to break down new soldiers), are no longer officially condoned (but not stopped either!). I would be grateful if someone could guide me to a word that more precisely refers to systematic ritual cruelty to soldiers as official policy; such a word will come in very handy in the near future.

GULAG: Acronym for “Glavnoye Upravleniye Ispravitelno-trudovykh Lagerey“ = “The Chief Directorate of Corrective Labor Camps”, which were prison camps to which the secret police/internal military (Cheka, OGPU, NKVD, MGB/MVD or KGB) sent their prisoners (similar to modern Camp XRay)

Intelligentsia: intellectuals as a social class, the result of social stratification by IQ as more intelligent people go into research and engineering and less intelligent people end up doing unskilled service jobs. The Intelligentsia are frequently the first to be killed in purges, due to fear among the Nomenklatura that they are the most likely to dissent.

Nomenkatura: The hereditary ruling class. A much better word than English "elites", in that the “elites” usually aren't very “elite” (ie, the best). Derived from russianize latin for “list of names”.

Samizdat: Books that are self-published in order to circumvent government control of the printing presses. The author would distribute a few copies to friends, they would make more copies and distribute them, and so on.

Tamizdat: Books published outside the country from smuggled material, then smuggled back in.

Equally useful are numerous Russian code-phrases that were used in place of names of people, places, and things which either could not be discussed at all, or could not be discussed in certain contexts (for example, critical references to politically-connected entities). I know a few of these, but I'll have to keep them to myself, as they are not politically-correct in the USA either.

The engine of prosperity

The words capital and capitalism have been so badly abused in modern times that many people take them to mean the polar opposites of their original meanings. It's worth setting the record straight if for no other reason than that they are useful concepts.

Capital refers to savings which will be allocated to future production. It might be lent or borrowed, but contrary to modern American (ab)usage, capital does not necessarily mean borrowed money. It never refers to credit created through creative book-keeping by the banks.

In the modern world, new businesses are almost always started using credit created through the banking system. I don't mean that the banks aggregate the savings of many individuals, which was how classic capitalism worked. I mean that when someone deposits an amount X into the bank, the banks can take that money and loan out roughly 9X, creating the difference through a fiat money system kept liquid by the central banks.

Hence Capitalism no longer exists, and hasn't since roughly 1913, and certainly not since Bretton Woods after World War II. Contrary to popular usage during the Cold War, Capitalism is not the default alternative to Communism. Unfortunately, during the 1960s and 1970s, a lot of left-leaning pseudointellectuals kept confusing the issue by referring to despotic regimes such as the Philipines, El Salvador, and Paraguay as “capitalist” when in fact those economic systems (Capitalism is an economic system, not a political system) were not capitalistic, but more like neo-feudal.

Now, why this matters:

Suppose that you run a small farm in a primative time and place. Suppose that land is still plentiful and quite sparcely-populated. You would find, then, that land is not the limiting factor for how much food you can grow.

For example, suppose that you plant an orchard. You won't get any benefit out of it for many years; your children and grandchildren will get more benefit out of it than you will have in your lifetime (I'm assuming we're not in the tropics where things can grow rather fast). But plant it you do, and eventually you get some crops, small at first.

Loosening the soil with a stick is hard work, and your trees aren't going to grow very well. Suppose that you sell your entire first harvest, and buy some proper digging tools. Now you can plant trees much faster, and they'll perform better.

Eventually you end up with more bearing trees. In fact you have as many as you can possibly harvest before they start rotting. So this time you sell most of your crop and save the money. You take your digging tools, and plant more trees. When they come “on-line”, you take your savings and buy tools to harvest faster (you know, those fruit-picking do-dads attached to a pole, so you don't have to go up and down a ladder).

You can keep playing this game a long time. Each time you invest in your fruit production, you get a larger harvest. I didn't say that this would work forever: there are theoretical limits based on the total amount of resources on a finite planet. However, strange as it may seem, total resources have never up to now been the limiting factor of productivity. Other limiting factors, notably lack of tools and technology, make it possible for people to starve to death in resource-rich parts of the world like much of Africa.

Contrary to the book Guns, Germs, and Steel, by Jared Diamond, the only significant advantage that Europeans used to have over other peoples of the world was that they had developed several cultural habits which promoted capital accumulation. These lasted until World War I, which shifted the balance of power to central banks. Europe and North America progressed a little more from sheer momentum, but are now in decline. Asia is rising. By the way I strongly recommend NOT wasting your money on that book and especially not rewarding the author for having written it if you haven't already; there are too many good books and never enough time to read them all without reading mind poison.

Now I have a book to recommend: The Richest Man in Babylon

It makes me sick that the name “Babylon” has become a synonym for an irredeemably wicked kingdom through one of the biggest smear jobs in history. The Babylonians were no worse than any other ancient people and a great deal more civilized and orderly than most. Now that their decendants are being unjustly slaughtered at the rate of over several hundred a day it's time to stop the slander and put the shoe on the foot it fits.

Now a warning about the book's message: it is still by and large true, but it was written back when tax rates were much lower than they are now. At this point it is hard to save and even harder to invest wisely. Some of the ideas in the book won't work at all anymore because inflation eats up the value of savings faster than interest payments suplement them—and we are taxed on the interest anyway!

One of the side-effects of rapid growth of fiat money is that too much money goes into over-production. It becomes hard to make a profit; in fact most of our largest corporations are not profitable, but are simply rolling over debt over and over again. Anyone who buys their stock may be in for a nasty surprise; either the “Plunge Protection Team” loses control, or the stock prices simply go nowhere until finally each over-endebted corporation goes into bankruptcy protection (so much for your bonds, too).

The key principle of the book is still sound; just keep in mind that the game has gotten a lot harder due to cheating. The capitalist virtuous circle really works—which is precisely the reason that our central planners tax and inflate. They are preventing the rest of us from accumulating capital so that the whole world economy is dependent on their monopoly on fiat money to borrow.

It's a short book and it's easy to read. It is suitable for adults as well as young people from about 11 or 12 or so up. Notice the coptic eyes staring at you from some of the pages. The author was probably a Freemason. More on secret societies later...

Social engineering through taxation (first part in a series)

“Initiative Measure No. 884 concerns dedicating funds designed for educational purposes.

This measure would create an educational trust fund for smaller classes, extended learning programs, certain salary increases, preschool access, and expanded college enrollments and scholarships, funded by increasing retail sales tax by 1%.”

This initiative is so full of deception I don't know where to start. First of all it's not an increase in the retail sales tax by 1%. If you read the fine print, you discover that the state sales and use tax is intended to rise from 6.5% to 7.5%; 1 ÷ 6.5 ≅ 15.38%. So we are actually talking about increasing sales and use tax by over 15%, not just 1%.

1% doesn't sound like much. This initiative might pass by means of deception regarding its financial impact.

There's more deception: the advertisements for this initiative claim that it will turn failing public schools into “charter schools” (sic), complete with “parental oversight” and “accountability”. Is that even possible? I think not! Schools are very highly regulated at the federal level.

If enough gullible parents fall for this line, it would put real private schools out of business—which quite frankly I suspect is one of the action items on its secret agenda.

That's not the only type of business it will destroy. State sales and use tax is currently 6.5%. Counties and cities add their own sales tax on top of that, so the actual sales tax most of us pay is over 8.9%, very nearly 9%. Let's round it to 9% to make this easier. That means that only 91% of the money we spend on retail purchases actually goes to the merchant (before subtracting other taxes!). Now take an additional percentage point, and calculate the impact to the merchant: 1 ÷ 91 ≅ 1.2%. In other words, the merchant's share of the gross sale procedes will drop by 1.2%, before other taxes and overhead. Total profit loss will depend on profit margin, but assuming that profit margins are probably below 50% for most items, this will take out a significant chunk of profit.

But won't merchants just raise prices enough to compensate? Probably, but the consumers' bank accounts don't magically fill up with extra money; instead the customers will have to cut back on spending (or go deeper in debt, which has its own undesireable consequences), so the merchants' profit falls any way you slice it.

But it's not just a loss of business spread out accross the whole retail sector, because purchases vary in the degree to which they are discretionary. Most shoppers will continue buying just about as much food as they did before the tax increase, but some items will drop off their shopping list. Some of them may be gourmet food items that the stores will simply stop selling—putting the producer out of business. Retail businesses specializing in highly-discretionary items will go out of business.

This isn't a prediction; it's an observation. Many decades of creeping taxes and inflation have already put many small businesses out of business. A lot of seemingly useful but not ubiquitous products and services are no longer sold in the USA. Just try finding replacement parts for a lot of appliances. Any retail market not big enough (most people don't bother repairing appliances) falls off the edge. This process has been going on for decades.

Now, which businesses suffer the least? Those selling the cheapest (shoddiest), most general products. In other words Wal*Mart. It's getting hard to find a can opener that works reliably in the USA, but you can still find imported garbage at Wal*Mart. Taxes and regulation wipe out the little guy (the competition) first. I call this social engineering through taxation.

Is that a problem? According to a certain former money-center banker I know, it's not a problem, it's a solution. She says (we've had this conversation before) that bigger businesses putting smaller businesses out of business promotes efficiency due to ostensible economies of scale. Now I will admit that there are some real economies of scale, but closer examination reveals what's really going on. For one thing increased size results in decreased manageability. A lot of “efficiency” is wasted through the inefficient flow of information through a company that is too large and too complex to manage.

Wal*Mart isn't a major success because members of the Walton family are geniuses—like nobody ever thought of discount megastores before—it's a big success because it receives massive public subsidies (more on that later).

The supposed economy of scale argument is an excuse to justify shady deals involving massively leveraged-upon-leverage financial schemes and corporate-government partnerships that should not exist. In a free market, the size of companies would actually tend to vary MORE not LESS over time. There would be mega-corporations, yes, but there would also be little holes-in-the-wall run by one old Granny—as is still the case in Asia where there is more economic freedom than in the corrupt West.

OK, but isn't it still the right thing to do to sacrifice small businesses “for the greater good”? Well, I am not a particularly moral person but I am very practical, so I will still answer NO!

The school system doesn't work because it's dysfunctional to the very core, not because it is impoverished. I am aware that teachers' salaries have dwindled away from lower starting salaries and salaries that don't keep up with inflation. Nevertheless, giving a raise to a teacher who supposedly teaches reading by having the class recite the weekly word list (this doesn't work) isn't going to improve reading ability. You need to stop using teaching methods that don't work. Similarly, creating new after-school programs will not help profoundly innumerate students who are given lessons such as “the blue rectangle is next to the green square” in fifth grade (unforunately I am not exaggerating; this was an actual assignment at a local public school).

Money also won't solve the problem of a significant ratio of the students in the Seattle Public Schools being the offspring of crack cocaine addicts. They are obviously brain-damaged, and there is no way that they will ever be able to achieve the rediculous goals that are being set for them under programs such as "No child left behind". These were problems caused by foolish social welfare spending; they will not be solved by more of the same.

Job loss

Job Cuts in Tech Sector Soar, Report Finds

Mon Oct 18,10:47 AM ET

NEW YORK (Reuters) - The U.S. technology sector suffered another round of widespread layoffs during the third quarter, with computer firms slashing jobs most aggressively, a report said on Monday.

"High-tech job cuts are on the way up as the end of the year approaches," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas. "Behind this trend is the fact that technology companies have virtually no pricing power,"

Job cuts in technology jumped 60 percent between July and September to 54,701, compared with 34,213 layoffs in the second quarter. Computer companies alone saw job cuts jump 127 percent, to 30,624.

...

A few comments are in order:

• The Nanotech Industry that people like Steve Forbes keep promising has yet to arrive. So far the extent of the industry is the ability to print on a molecular level—but I haven't heard of any actual commercial applications in the market as yet. I'm not sure who would even sign up for the jobs as there are not a lot of college graduates who look like obvious fits. The computer and software industries had long run-ups before they took off; nanotechnology hasn't had enough time to build up a critical mass.
• The promised medical revolution is also hype without substance. Whose going to pay? The medical industry is in a huge mess; even the nurses (my wife) are losing their benefits.
• With capital destruction in the USA and capital flight from Europe, and a demographic catastrophe as birth rates plunged far below replacement levels precisely among those who could actually afford children (though we have plenty of grown-up crack babies now), and this largely due to social engineering to lock more educated women full-time into tax-paying careers (whether that's what they wanted out of life or not), the next technology revolution won't happen in the West; it will happen in Asia.
• The only political aternative offered for higher taxes is deficit spending. George Bush instead of Bill Clinton. Angela Merkel instead of Garhardt Schroeder. This is not a real choice. Capital destruction is destroying us one way or the other.
• Americans probably are under-educated as Greenspan hints and Patel sneered a few posts ago. But who gutted our education system by promoting the educational theories of John Dewey and Benjamin Bloom? Wasn't it the Rockefeller Foundation, started by the same man who lobbied for conditions to make offshoring happen, that paid to promote their theories? Who promoted mainstreaming, “disproportionate burden of impact” (in other words you have to admit certain students to programs for which they are obviously not qualified, thus gutting them), bussing, and other unqualified policy disasters that wrecked the school system in the name of “equality” (all slaves are equal!)?

Bottom line, the jobs are gone, they're not coming back, and nothing comparable will replace them. Instead of waiting for our supposed “leaders” to “do something”, we need to take action to defend our own interests. Keep reading my posts and get ready!

Economic starvation by design

“The real problem is that so many people are so used to living comfortably off the work of others that they can't even imagine going hungry or sleeping in the cold. For many Americans the purpose of work isn't to survive, but to provide luxuries...”

Lazy Americans, by Michael Williams
January 26, 2004
http://www.mwilliams.info/
Funny, I can barely make my kid's tuition (Greenspan says we need more education), and this guy says I only have to work for luxuries. Is eating a luxury?

---

“Americans generally do not want to work hard and the statistics bare [sic] this out by the fact that the construction trades are severely hampered, unable to find enough good people to fill available positions. There is a 35% and higher shortage of skilled tradesman with no end in sight!

What is it? These jobs too far beneath everyone's dignity? Every body wants to go to college so they can leave and make $100,000.00 dollars a year doing next to nothing for it. For all the college and technical school trained people we have in this country, positions for high-tech careers still go unfilled. Many of our remaining employers have to go overseas to India and other countries to fill these positions!.”

AMERICANS A Fat, Lazy, and Arrogant Crowd?
http://www.tpromo.com/gk/mar02/032902a.htm
Someone tell me what that guaranteed $100,000.00 job is and maybe I'll go back to college. Software engineering certainly isn't paying that these days. If high-tech jobs are going begging, I wonder why so many American companies laid off domestic staff?

---

“...none of us, including myself, want our children to grow up being roofers, construction workers, people who work picking fruit/vegtables, all these jobs none of our LAZY Americans want to do. If it were not for these people, where would we be?.”

Posted by: Alina on January 2, 2004 01:29 PM
TalkLeft.com
Speak for yourself, Alina, most guys I know are willing to do construction. Too bad city governments openly give hiring preference to “minorities”.

---

“News flash: immigrants aren't taking anything from Americans....If WalMart paid a company to hire immigrants to do the job over Americans then there's probably a good reason for it. I'm sick and tired of lazy gluttonous Americans bitching about immigrants "taking" our jobs. It's not like they can literally come to America, ambush us in the parking lot and take our jobs.

If you lose your job to an immigrant, it's probably because he or she was willing to work harder for less money. Don't want to pay them full wages? Then don't hire them. If they do equal work, then they deserve equal pay..”

http://maddox.xmission.com/c.cgi?u=walmart
Well, not only must American employers hire illegal immigrants (with no reciprocal right on our part to jobs in Mexico), but someone else will tell us how well they are doing and what they are to be paid.

---

“Texas Agriculture Commissioner Susan Combs, along with a group of Texas state legislators have announced that they are supporting the invitation of Mexicans to come across the border and do jobs that Texan Americans seem to consider beneath them. Perhaps Americans have simple grown too used to their air conditioned offices, but whatever the reasons, the result is a labor crisis in rural Texas. It's becoming inordinately difficult to get Americans for outdoor labor.

...

Just because an American is unemployed doesn't mean he or she is ready or willing to take on work..”

Migrant Worker Program Gets Support by Jennifer Peter
http://immigration.about.com/library/weekly/aa013101a.htm

---

“All of this talk about india [sic] taking American jobs. My friends, this is not the truth. Indians are better educated, and work harder than fat lazy American [sic]. Don't blame Indians for your loss of job..”

posted on f_edcompany.com by Patel

Of course due to overvaluation of the $US compared to the rupee, which isn't the fault of fat lazy American programmers, Patel can live handsomely on $11,000/year, which wouldn't even pay rent in a decent apartment in Redmond, Washington, USA. We fat lazy Americans want a roof over our heads and regular meals.

---

“Some contractors say they prefer to Hispanics because they are hard workers and are willing to work for minimum wage.

'Many white kids just dont want to work the way Hispanics will', said Jack Neuman..."

Zeal for work, low labor cost make Hispanics attractive hires as firefighters, Peter Prengaman, AP, Seattle Post-Intelligencer, June 19th, 2003
Reverse the position of the nouns and listen to how it sounds:

“Some contractors say they prefer to Whites because they are hard workers and are willing to work for minimum wage.

'Many Hispanic kids just dont want to work the way Whites will', said Jack Neuman..."

Zeal for work, low labor cost make Whites attractive hires as firefighters
How fast do you think the EOC if not BATF stormtroopers would shut down the Seattle-PI and set up hiring quotas for firefighters?

---

“There are great misperceptions that immigrants are a drain on our economy, but many studies have confirmed that the opposite is true. Even undocumented workers - commonly referred to as 'illegal' contribute more than their fair share to our great country.”

Alan Greenspan, Federal Reserve Board chairman, congressional testimony, July 2001

---

“This is America, the 'land of opportunity'. Foreigners risk their lives and the lives of their children, running across the highway stretch of 10-lanes of 70 miles per hour traffic with the hopes of gaining entrance into a country that promises them economic success. Others are drowning in large bodies of water because they were convinced that 'making it to America' would be a better life for them. Thousands are dying enroute to come and become prosperous in a country who has citizens that haughtily declare "there simply are no jobs".

The sad thing is, many of the immigrants here have more work ethic than the average ninny, city-bred American. It always amazes me how people who came here with 'nothing' can establish more wealth in 20 years than many Americans can in their whole lifetime.

...the immigrant population of America realizes a principle for survival that natives are either too dense, too lazy, too arrogant, too spoiled, or too forgetful to understand: if you don't work, you don't eat. Work can be defined a number of ways. Work does not equal 'a job'. Anyone can create their own work if they are hungry enough (literally and figuratively). Which often leads me to believe many Americans aren't really hungry.”

Nykola.com, 9/21/2004

---

I gleaned a few sources from both the political Left and Right; I don't think this is a partisan issue but more of a class issue. The policy class is pretty unanimous that the rest of us are fat, lazy, and deserving of economic starvation.

I can't speak for all of us, but I am NOT fat, and I am not lazy. I'm not entirely unemployed either, having several small streams of income, but my career has been effectively ended by offshoring. I realized a long time ago that the big money wouldn't last, so I saved and invested. Now I live by my wits.

Unspoken are several relevant facts:

• Americans who have to work for a living are generally not subsidized with free or below-market-rate housing, free medical services, allowances for free food, and free childcare. The rest of us can not compete with labor that we as taxpayers are subsidizing.
• Even if we tried to compete with welfare-subsidized labor, we couldn't, because we're not welcome to apply for a lot of the jobs. I don't think a lot of people realize that a great many corporate service jobs (precisely the ones that are hard to offshore) are filled through referrals from social welfare agencies. This guarantees racial and gender bias and subsidy of corporate labor costs by the taxpayers. There is a major scam going on here.
• We can't compete with people living in countries where the cost of living in terms of $US is far below ours. Telling us we're fat and lazy because we can't is outrageous.
• we can't create our own opportunities, because the nature of a rapidly-expanding fiat money base is that big corporations can put small businesses out of business by perpetually running at a loss and buying out competition—something small businesses can't do.
• It's probably true that we do not have as many educated people as India. Now then, try reforming our school system. Teach phonics and real math. Try. You'd be shut down in a heartbeat. Who decided to dumb down our schools, and why? There is a vested interest in keeping Americans poorly-educated.

Those of us who are being starved out of the economy will have to find our own way if any is to be found. It is a horrible mistake to wait or hope for the government to “do something”. A full analysis of what happened to our standard of living is beyond the scope of this essay, but I hope to cover it bit by bit in future installments.

More important is coming up with a strategy for playing the hand we've been dealt. I've already mentioned one strategy: have multiple streams of income coming in, so that if any one of them runs out, you still have others. This also allows one to pursue business niches that are too small for corporations to take over.

Another strategy is this: you have more control over expenses than income. Unfortunately there is a limit to how much money you can save, but like it or not, living on much less than you are probably used to is a necessary sacrifice at this point. The Indians have had to deal with an inefficient socialist government and economy that was a severe obstacle to capital accumulation—and yet they accumulated capital to start their businesses. We will have to do the same. This will come at some social costs (you may lose friends) but I do not see an alternative. In future installments I'll talk about how to save money. It might even be worth a separate blog, though I may have difficulty selling advertizing space on a blog convincing you to resist unnecessary purchases.

More strategies for dealing with the New Economy will trickle in. One of them may be to leave your native country. Unfortunately we are even less welcome in most of the world than we are in our own native countries, but there are many countries in the world and at any given point in time one of them may be opening up.

Killing Afghan women to liberate them

Suzanne Fields is a feminist allied with the Neoconservative cabal—really not surprising given the common marxist roots of Feminism and the right-wing trotskyites known by endearing names such as “neo-crazies” and “neo-Jacobins. Someone who is upset about her male-bashing diatribes forwarded me her latest editorial, A long way from Kabul, Baby, which was recently published in the Washington Times.

I won't bother linking to the article; her opinions are not worth reading. I just want to point out that Feminism is not and never was what it claimed to be. All quotes are what she wrote in her editorial; I've added a few photos of Afghan women and girls along with some comments:

“...a remarkable victory in the war against terrorism and the struggle to establish democracy in a backward part of the world...”

Backward? Ms. Fields can barely contain her contempt for the Afghan people, female or otherwise. Just so we're clear regarding what the people of Afghanistan ever did against Ms. Fields: the answer is “nothing”. They were invaded first by the Brits, then by the Soviets, and then by the Arabs (Taliban)—with CIA help—who harbored someone who could have been extradited under international law. The Afghans themselves had nothing to do with 911 or any other acts of international terrorism.

“...a breakthrough for women struggling to rise above narrow male chauvinism embedded in a particularly backward version of an ancient religion.”

(you'd almost think that male chauvinist Afghan cared about his little girl more than Ms. Fields ever did)

“The emancipation of women in the Middle East, as Bernard Lewis, the distinguished scholar of Islamic culture, observes, 'is the touchstone of difference between modernization and Westernization.'”

(“distinguished scholar”? What makes him distinguished much less a scholar? That he has the same hostile, bigoted opinions about middle easterners as other pseudointellectuals? What kind of “scholar” has so little sympathy for his supposed subject?)

“Americans can take a certain pride that we have contributed to their emancipation.”

“You've come a long way, baby.”

Fields and her ilk think I'm evil because I'm a 200lb, hairy-@ssed, correctly-gendered, heterosexual male. From her point of view I suppose I am: I broke down and cried each time I saw those photos.

Don't believe what people say. Look at what they do.

Binary illusions

In earlier essays I have talked about how our ideas about reality don’t correspond exactly to reality. There are two closely-related inaccuracies that are so common they are worth warning you about. One of them is to think that one sees boundaries when in fact none exist. The second inaccuracy is to imagine that virtually all the attributes of anything in the universe come in pairs of opposites. I don’t know physics very well so I hope you bear with me here: as far as I’m aware, boundaries occur only at the level of quantum physics—and even there they are scarce. My understanding is that electrons jump from orbit to orbit in discrete jumps, without passing through an intermediate state, so we can say that the orbits of an atom have boundaries (conceptual, at least). That’s about the only example I can think of; subatomic particles don’t even seem to have discrete locations. Zoom close enough to anything bigger and boundaries are practically impossible to find; they are all “fuzzy”. Physical boundaries of conceptual entities are just as hard to find. No matter how carefully you define “chair” and “sofa” I could show you something that would be hard to decide whether it was a chair or a sofa. This is true of anything that is defined into existence. Nature knows nothing of chairs or sofas or even apples and oranges. Take an apple and watch it over a long time. When it starts rotting, is it still an apple, or just garbage? If it stops being an apple when you can no longer recognize it (for example when its just a lump of unidentifiable carbon compounds), when was the exact instant it went from apple to non-apple? There’s nothing wrong with concepts—for example, the concept of an apple. The mistake is to think that the concept itself exists outside of your head, complete with tidy little boundaries that correspond to some exact definition of a thing. It’s as if people expect to see national borders drawn on the earth when they fly overhead. Ancient Greek philosophers wasted a lot of time and neural connections trying to figure this one out, and came up with nonsense about “ideal chairs” and “ideal apples” that exist in the universe of archetypes! The other mistake is similar. It is the tendency to see things in terms of opposites such as good and evil, light and darkness, hot and cold, male and female, when in fact true opposites are about as rare as boundaries. Opposites exist mostly only in the form of abstract ideas, like +1 and –1 being additive opposites which precisely cancel each other out. Take the case of hot and cold. Are they really opposites? Is the “opposite” of 10,000 degrees Celsius minus 10,000 degrees Celsius? There is no such thing as minus 10,000 degrees Celsius. Cold is not the opposite of heat; cold is lack of heat—which is relative. Thinking of hot and cold as opposites is a mistake of modeling quantitative differences as qualitative. This is a common mistake. A frequently-heard expression that grates on my ears is “opposite sex”, meaning that male and female are opposites. They are not! Put a man and a woman together and they don’t cancel each other out—poof—then nothing! A man (ideally) has two eyes. A woman (ideally) has two eyes. Men breathe using their diaphragms and lung. So do women. They have the same average body temperature—despite their average size difference! Not only are they more alike than different, but the differences between them are essentially quantitative not qualitative. A man has a little broader shoulders than a woman. A woman has wider hips. Men are nurturing. Women are courageous. Even what people think of as being differences of having and not having are more quantitative and less qualitative than most people imagine—make this a little bigger, tuck that in, and the parts pretty much all correspond. Seeing opposites where there are none is a mistake that makes people dupes for malicious gender-baiting. Here is an interesting case: aren't “rest” and “activity” polar opposites? Mutually-exclusive even? And yet our bodies need both rest and activity! They don't cancel each other out! Our brains are probably hard-wired to model processes as pairs of binary opposites, because binary systems correspond to the most basic binary choices: Opportunity or danger. Fight or flight. The most basic systems are the most reliable; start getting too fancy and you end up like the fox in Aesop’s fable who was killed by the hounds because he couldn’t decide from among all his clever schemes for getting away which one he would actually choose. The cat, who only knew to run up a tree, got away. So there is a good reason why we are susceptible to seeing things in terms of binary opposites instead of seeing them in terms of their true complexity. The problem happens from not being aware of our tendency to oversimplify things. Those who are malicious will try to corner other people with ready-made binary choices. These are called bifurcations and are also known as either-or fallacies. They are one of the commonest sorts of tricks used to try to deceive others. Before the invasion of Iraq, the US media cast the debate in terms of “must we invade now to save time, or should we wait for the UN, so that French and German taxpayers will foot the bill?” Other options such as minding our own business were completely off the table. The British author C.S. Lewis was so concerned about the use of fallacies to deceive that he proposed making logic and debate basic subjects for school-age children. That’s probably an idea worth pursuing. Not all bifurcations are malicious: sometimes we deceive ourselves. Our brains are wired to look for patterns. They could not do otherwise: if the universe were completely chaotic, intelligence would be impossible. Intelligence is a sort of pattern-matching. Unfortunately despite millennia of civilization too many people have a massive bias for seeing the binary opposite pattern where it leads to two bad choices—when there are much better solutions outside of their binary system. Unless the situation really does lend itself to a binary choice, such as one of those life or death situations where you really don’t have time to consider all possible choices (though it might help if the 2 choices you come up with are good ones), then it’s usually worth the extra neural connections to model the situation a little more accurately and coming up with an optimal choice. In future installments I will frequently be exposing fallacious bifurcations and propose alternative models for what is going on. When you are faced with a dilemma, keep in mind that there might be more than two choices, and that the two choices you are considering might both be poor choices.

The blood of the economy

Imagine that you live on a simple subsistence farm at the same economic level as existed at about the dawn of civilization. Your kinsmen break the ground with ploughshares they have to shape themselves. They also have to build the harness themselves. Your kinswomen make their own baskets from reeds they collect on the riverbanks, and they gather their own firewood for cooking. Weaving takes some specialized tools. Some of the women trade food or baskets for ready-made cloth. They are bartering. It's already a step up from doing everything themselves, because it allows a certain amount of specializing to take place. Only a few women need looms, and yet the whole village benefits from their weaving. The funny thing about free exchange is that unless there is some sort of deception involved, both parties benefit. It seems like it should be a zero-sum game, but it isn't. One woman has extra baskets but wants some cloth; the other woman doesn't want to spend time gathering reeds and making baskets when her cloth is in high demand. Both parties to a free exchange get what they want. Now suppose that you notice that my Pomegranate trees are just loaded with a bumper crop of pomegranates. You would like some to give to your sister. You have extra meat to trade but there are two problems: I don't want it (I am, in fact, a vegetarian), and my pomegranates aren't ripe yet! So you talk to your cousin. He'll take the meat now and trade you some metal for it. Metal is always in demand, and unlike meat it keeps indefinitely. You'll trade me the metal when the pomegranates are ripe. I'll accept the exchange, because even if I don't need the metal I can exchange it to someone who does. Eventually bits of metal are universally accepted as a means of exchange. Now standardize the size, shape, alloy, and weight of the metal so that we don't have to weigh it every time we exchange it, and you have coins. In some parts of the world the metal was made into other standard shapes, but the concept was the same. In the New World and Oceania, metallurgy never developed among the native populations, so they traded other tokens of value such as beads and seashells. On Yap Island the token was in the form of large stone wheels. The important point was that they developed similar ideas on their own in order to facilitate trade. Money facilitates trade. Trade facilitates a division of labor, which in turn makes more efficient use of tools and resources. Here's how it works: if all of us do everything for ourselves, then we all need a plough, a loom, an oven, and a few other tools that are hard to build. Once we start trading, then we can stop arguing about who gets to use the plough, the loom, and the oven when and how often. The farmer gets the plough all the time, the weaver gets the loom, and the baker gets the oven. They specialize in one product, and keep the tools needed to make those products busy the entire workday. If not, then a new specialty will spin off. For example, rather than the wheat farmer grinding his grain, or the baker grinding the grain, a great many farmers may send their wheat to a single miller, who can supply a great many bakeries. This is the same principle that makes a factory work much more efficiently than a cottage-industry operation: every process is going at roughly its optimal rate. Instead of stopping a process to let a slower process catch up, tasks are divided up among many different people, with slower jobs being assigned to more people. The entire economy operates somewhat like a huge factory. The equipment itself can be traded. The farmer who is too old to push a plough and has no sons can sell his farm, live off the proceeds, and leave the remainder to his next of kin when he dies. The farm remains in use because it is tradable. In pre-civilized societies, assets are likely to be wasted when the owner can't make use of them. Money makes possible not only efficient scheduling of land and equipment, but also efficient use of resources. If there is an oversupply of wheat, it doesn't have to rot just because the baker can't use it all. Someone else may buy it to feed her chickens. If the wheat supply drops again, the price of wheat will rise and she'll go back to feeding her chickens scraps. Alternative uses for resources (that no one person could know about or be able to implement) make it possible to deal with surpluses and shortages in an efficient way. Money makes it possible to not only decide who can make the best use of resources, but to schedule them according to when they are needed. Someone who has saved up money to support herself in her old age can loan money to the weaver whose loom is broken and needs to be repaired. The weaver will pay back the money with interest from proceeds of her business when the loom is back in operation. Both women benefit from the exchange. Unfortunately, this idea is subject to abuse. Suppose the village weaver's loom breaks down, and no one has enough money to lend her to have it repaired. What if someone just wrote on a piece of paper "This note is worth 1 ounce of gold", and loaned her that? Well, there are several problems, including that letting a privileged someone collect interest on money that is created at will isn't honest. It isn't honest because it hurts the rest of us. If anyone is willing to accept it at face value, then it dilutes the value of our real gold. That's bad enough, but something worse is going on. When there isn't enough money to lend to everybody who wants to borrow, it's because resources really are limited. If there is not enough to lend to the weaver, it's not just a matter of having fabric or not; it might be a choice between having new clothes and starving. Consumption must be balanced against production, and choices must be made to allocate resources according to what you care about most. Increasing the money supply above and beyond the increase of goods and services in the economy doesn't make anyone richer. It simply diverts resources away from future production and towards current consumption. When money breaks down, all the organization that money makes possible breaks down. Money that loses purchasing value over time encourages over-consumption and discourages savings. Money that is subject to sudden illiquidity causes trade--the big factory--to cease operations. It wasn't until roughly the 18th century, that anyone became fully conscious of how money makes civilization possible by facilitating organization of people on a scale far larger than any one person could organize. Unfortunately there are a great many people who still don’t understand this today, and some of them are in positions of power! The Roman Emperors who debased the money supply blamed "greedy merchants" for the hyperinflation they themselves had caused. Many historians blame the fall of the Roman Empire on the invasion of northwestern Africa by the Visigoths, which cut off the Empire's supply of wheat. But why was wheat grown on the very edge of the Empire, and not in the heartland that was easier to defend? The reason is that the money supply increased in the heart of the Empire, and spread from there outwards to the fringes. Prices rose along with the money supply, meaning that they were always highest in the heartland and lowest on the fringes of the Empire. It was always cheaper to import from the hinterlands into the heartland. The same thing is happening today. Production has fled from the Imperial homelands where dollars and pounds sterling are created, to the lands outside the control of the Empire, which are the last to get them. The contemporary Empire will probably collapse the same way the Roman Empire did: when it loses its supply of critical products it can no longer produce because of dysfunctional money. Money facilitates organization of an economic system too complex for a central leader or committee to handle. It does it without coercion and without the need for consensus that would be impossible to achieve. When money breaks down, so does the organization it made possible.

Iraq is not Vietnam

Bad paradigms can lead to bad choices. Too many people are comparing the Iraqi situation with Vietnam in the 1960s and 1970s. What they have in common is guerilla warfare. The differences, however, are more important than the similarities:

1. Vietnam had no apparent strategic value to the USA. Iraq is the 2nd-biggest petroleum producer. This means that our masters will try to hold the position to the last man.
2. The USA still had a few industries left during the Vietnamese War. It has almost none left. Having intentionally gutted their own industries, the entire Imperial Axis is dependent on foreign capital to prop it up. The value of Imperial currencies is based on control of petroleum.
3. Iraq was never marxist, and hence does not appeal to the Left. Former Vietniks can without lying that while they were opposed to the Vietnamese War, they support the war on Iraq. The Iraqi War is one the whine-and-cheese set can truly embrace. The complicity of silence from the rest of the mainstream Left is truly stunning.
4. The Vietnamese were never demonized by over 600 Hollywood movies depicting "Middle Easterners" as crazed monsters. As I have noted in earlier essays, conditioning influences opinions more effectively than facts do.
5. The biggest opponents of the Vietnamese War in terms of numbers of individuals were members of churches. These same groups are conspicuous by their absence as a significant antiwar presence. Since the Vietnamese War, the churches have become entangled with partnerships that came with strings attached.
6. Constantly reminding the Imperial think-tanks that they don't know how to fight guerilla wars isn't getting the rest of us anywhere. Vietnam was somewhat of a learning experience for them; now they are anxious to try out some new moves: the use of U.N. economic sanctions to weaken targets for invasion, false flag operations intended to keep the local population divided among themselves, the use of torture to crush morale and extract confessions for propaganda, and the wholesale replacement of untrustworthy locals by foreign replacement workers.

The good news?

1. Good riddance to both the "Vietniks" and the Kulturkampf folks who planted drugs and dangerous ideas among them, which then spread like a cancer. The damage done to our culture as a result of the Vietnamese War was catastrophic, and we have never recovered from it.
2. Cross-pollination between the anti-war faction of the Left and the non-interventionist small-government faction of the Right has produced a much more sophisticated antiwar alliance than existed during the Vietnamese War.

Be a lesbian! Eat Aero chocolate bars!

One of the recurring themes of this blog will be deceptive subtle conditioning. Dr. Henry Makow spotted an interesting example advertizing Aero chocolate bars. He's even got a link to a website where you can see the commercial for yourself. I'm not sure it's so much a corporate conspiracy as poor judgment on the part of management regarding whom they hire to decide what’s good for women.

The soviet prototype

On March 23, 1917, a mass meeting was held at Carnegie Hall to celebrate the abdication of Nicholas II, which meant the overthrow of Tsarist rule in Russia. Thousands of socialists, Marxists, nihilists, and anarchists attended to cheer the event. The following day there was published on page two of the New York Times, a telegram from Jacob Schiff which had been read to the audience. He expressed regrets that he could not attend and then described the successful Russian revolution as "...what we had hoped and striven for all these long years." In the February 3, 1949, issue of the New York Journal American, Schiff's grandson, John, was quoted by columnist Cholly Knickerbocker as saying that his grandfather had given about $20 million for the triumph of Communism in Russia.—G. Edward Griffin, The Creature from Jekyll Island Jacob Schiff was one of several agents for the Rothschild banking consortium. Don't confuse the “Russian Revolution” with the so-called “October Revolution” that happened a little later the same year; the “October Revolution” was actually a coup involving reputedly about 200 armed men who seized the major government buildings without resistance. The real crime of the Tsars and of the Russian people was to leave their resource-rich country wide open to attack. Let's back up just a bit. Socialism first showed up in the aftermath of the French Revolution. The first Socialists were the last remaining Jacobins and their disciples. The French Revolution signified that feudal agrarian heirarchies based on control of the land were no longer viable. The prospective new ruling class aimed for control of the cities and their factories. The revolutionaries (in particular the Jacobins) tried to maintain their power through sheer cruelty. which they openly referred to as "La Terreur". Anyone suspected of disloyalty to the revolution was killed. According to official decree, so much as grieving for someone who had been executed by orders of the new government was itself punishable by death. The problem with La Terreur was that the stakes were much too high: the revolutionaries couldn't trust each other! It wasn't long before the radicals all started ending up on the scaffold themselves. One faction known as the Thermadoreans arrested Robbespierre and his associateson the council floor and dispatched all of them on the guillotine within 2 days. The Thermadoreans in turn lost power through economic crises and setbacks in the revolution's wars of conquest. While still in power, some of the Jacobins including François Noël Babeuf had proposed radical economic changes such as abolition of private property and equalization of incomes. After the revolution, these ideas survived as both history and socialist theory. The essense of socialism is to offer a certain amount of economic security in exchange for—quite frankly—your life and your property. This strategy was more condusive to the longevity of the elites than La Terreur. “You are ruling over us for our own good,” he said feebly. “You believe that human beings are not fit to govern themselves, and therefore—” He started and almost cried out. A pang of pain had shot through his body. O'Brian had pushed the lever of the dial to thirty-five. “That was stupid, Winston, stupid!” he said. “You should know better than to say a thing like that.” He pulled the lever back and continued: “Now I will tell you the answer to my own question. It is this. The Party seeks power entirely for its own sake. We are not interested in the good of others: we are interested solely in power.” —George Orwell, 1984 The socialists aren't adding anything to the equation; the same workers are responsible for the sum total of economic output as occurs without socialism. My guess as to why anyone falls for this is that it sounds plausible. It seems a little like an insurance scheme—spreading risk around so that no one person has to bear devastating personal economic loss by himself. The problem is of course that once you sign your rights away you can kiss that money-back guarantee good-bye. Early 20th century Russia looked like a good target. The property at stake was the biggest chunk of dry land on earth, a lot of it containing strategic mineral resources not to mention timber, wheat, rye, and flax. Average Russians were uneducated peasants living in squalor; socialism probably sounded promising to them and in any case they were in no condition to give it much opposition. The middle class was small (and largely foreign) and the aristocracy weak. The soviet slave-state was created to seize natural resources (in particular, Caspian oil, which the Rothschild family was selling by way of their agent Samuel Merchant, founder of Shell Oil Corp.), centralize control of the industries, and turn the population into a minimally-paid serfs kept under control with promises of economic security. Americans and Brits died to save it from Hitler's army. Roosevelt and Churchill willingly turned over the spoils of war including half of Europe to the soviet slavers. Many people are confused by the twisting plot of history. The Anglo-American alliance with the soviets fell apart (and the Cold War began) not because of Anglo-American opposition to Communism, but out of fear after it became obvious that what was supposed to be a client state was in fact completely out-of-control—and it had thermonuclear weapons. Even so, the American government kept the Soviet Union propped up through “permaloans” and sales of strategic resouces and commodities—even at the height of the Vietnamese War! Many American men were killed with weapons that could not have been made without US shipments of iron to the Soviet Union. As long as the US government was able to maintain a vaguely stable relationship with the Soviet Union, it never pulled the economic plug that would have freed 2/3 of the world's population from slavery. Many people credit President Ronald Reagan with having begun an arms race that bankrupted the Soviet Union. This is nonsense. The free world could have bankrupted the Soviet Union at any time at will by simply cutting off their loans and wheat shipments. The problem with Communism, as our global elites quite well realize by now, is that central economic planning not only doesn't work in practice, but it is quite impossible in theory. If a government sets price levels and production quotas, the economy is certain to collapse. A complete explanation is beyond the scope of this essay; the short version is that the problem has to do with information overload; the central economic planners run into combinatorial explosion of possible allocations of resources. Make a mistake (as probabilities indicate you will), and a critical component of your economy goes missing, for example your tractors might be severely short of spare tires and the wheat crop rots in the field waiting to be harvested, causing more shortages downstream, and so on... The evidence from soviet history confirms what was predicted by theory. Now take a moment to absorb what this means: Keeping the masses impoverished is not the only goal of the global elites; there has to be enough wealth produced that they themselves don't end up in poverty. Our lords and masters did not pull the plug on the soviet slave states because they love us and want us to be free. They gave up because economic central-planning doesn't work, and they know it. The fall of the Berlin Wall was cause enough to celebrate, but now we need to prepare for the scheme that is already unfolding. It seems to look like a combination of Socialism and Fascism. In an upcoming installment, I'll write about various types of income distributions and how it fits in with NWO action items.

Seed corn

Yesterday I had an interesting exchange with a self-described “Liberal”. It's worth mentioning today because it exemplifies a certain naively imperious mindset. I won't bore you with the details. Here is a short version of the argument: Him: It's wrong for you to invest your money to make money. You should only live off of wages and pay more in taxes so that poor children will be taken care of. Me: Where do shoes come from?
Him: China. Me: Where do the Chinese get them?
Him: They make them in their factories. Me: Where do factories come from?
Him: Community leaders, with representation from people of color, women, gays and lesbians, single mothers, community elders, and otherly-abled people, get together and say "It is not right that our children have no shoes for their feet. We will start a people's initiative to make shoes. We will gather signatures and put it on next year's ballot". Then the initiative passes, and they will build a factory to make shoes. For now I won't bother arguing about how well the government takes care of any of us; that is plain enough. The ground is not littered with products and services just waiting to be harvested and equably distributed by the government; someone has to buy the tools and raw materials to make them, and then do it. Before you can have consumption, you must have production. It doesn't matter if we are talking about Billy and Cindy and little Bobbi Sue; arguments from emotion won't convince reality. If you allocate resources to consumption, those resources are not available to allocate to production. This is called "eating your seed corn".