Thugs: Trust and the Even Playing Field

In the last several posts I've discussed two fundamentals. The view you have of yourself. Your basic instinct to trust yourself, your views and your decisions. The trust you have in friends and family. Your neighbors. Because, chances are, if you are trusting, the likelyhood of your being a Republican increases as your level of trust increases.

In an earlier post I wrote about those times when your trust was misplaced. Whether it was a girlfriend, or a brother or sister, we've all learned lessons over time about trust. Imagine my surprise when I found out why my sister was always the banker when we played Monopoly. She was older, so, she took on the responsibility for me and my little sister. (Heh.)

The other thing we talked about was the Level Playing Field.

We--my sister and I--needed a little leveling of that playing field.

Which is a perfect example for you to utilize when you review the Sherman Act. I caught my sister using her position as banker to give herself direct benefit when playing the game. I believe it was the case--and still may be today--that no where in the rules does it state that the Banker shall not receive remuneration for his efforts. Nor, did it set a level for that need for remuneration. Now, when playing Monopoly with my sister I offer an explicit understanding in the form of a verbal agreement, that no one performing the role of Banker may provide remuneration of any kind, except that explicitely provided for in the rules of the game.

Level playing field.

So it's always been amusing for me to hear reference to Robber Barons and Greed as putative descriptives of Republicans. I would assert the biggest Robber Baron and purveyor of Greed extant today is a toss-up: between legislators and Bill Gates. Quickly, on Bill Gates.

For those of you who have reviewed the Sherman Act, the business model of Microsoft has all the trimmings of a Commodore Vanderbilt, or John Rockefeller. (Microsoft with the trimmings of a Commodore. Repleat with innuendo, neh?)

As a business model, MSN has been a corporate thug. Hopefully, as all thugs must come to account, the roll-out of Vista will seal the coffin on Microsoft. Since anti-trust enforcement has failed, I rely upon the market to make better choices. And for those of you who haven't looked at Apple and Mac, I urge you to do so. If you haven't heard of Parallels, check it out. Imagine running Windows' apps on machines that don't crash.

Now, let's take a brief look at legislators. The ham-handed thuggery of the political class is appalling. Take the ham-handed approach used to mandate ethanol.

In the rush to solve the Problem of Man Made Global Warming, the benevolence of thuggery was made whole for all to see. We had a problem. Thank God we had politicians with the strength to pass the difficult legislation we needed to Save the Planet. The only problem was, there wasn't the ethanol capacity to trigger the mandates. See, unlike gasoline that can be delivered to market via pipelines, ethanol can't. You have to truck ethanol. So, not only did you have a theoretical product--ethanol--that nobody wanted (just check sales of ethanol in Oregon prior to the recent mandates) but even if there were increased demand, there was no way that ethanol would ever replace gasoline. It was too expensive to produce and too expensive to transport.

Like all good Thugs, a fix needed to be put into place. The Level Playing Field was creating havoc on the plans of the communitarian/Socialist/Progressive agenda. (Communism by other means.)

You making choices, for yourself, was impeding the dream. The Level Playing Field was doing its job. As long as you kept making rational choice decisions, the Thugs couldn't win. So, money was taken from you and given to the good friends of the Governor to build an ethanol plant. It was a plant that no rational investor would ever attempt to build. The cost of ethanol is higher than the cost of gasoline. The transportation cost is higher than the cost of gasoline. The energy created by ethanol is lower than gasoline. The amount of pollution caused by ethanol is greater than gasoline.

But still, the Thugs would not be denied. To overcome the Level Playing Field and your rational choice. How would a Thug do it? Let us turn to corruption and the communitarian/Socialist/Progressive.

The Oregon State Lottery. When New Jersey Democrats arrived during the '70's, they, in their brilliance, sought to wipe out illegal gambling. How best to do it? By controlling the games themselves. According to your Oregon Department of Human Services, there are more than 75-thousand problem gamblers in this State. All thanks to the Oregon Lottery.

But, the money derived from bilking the shills in Oregon go toward "good causes". Sure, it's corrupt at its core. Oregon lottery machines aren't "fair". They're fixed to give a certain return to the State. But it has given the Thugs in the Governor's office and in the Oregon legislature unsourced funds that are off-budget to do with as they please.

So, how do you tilt the Level Playing Field? A massive infusion of Lottery funds, under the name of economic development. The guarantees of the state for a massive market, plus funds for investment.

Pretty cool, huh?

A mandate that legislators were told could take years to implement was implemented within months. Because of a new concept in leveling the playing field by the Governor.

Of course, this massive economic dislocation wouldn't have been possible without the leadership of communitarians/Socialists/Progressives. Because Thuggery in the name of the Vision is okay. After all, what is the tagline for the Oregon Lottery commercials? "The Oregon Lottery, it does good things."

Sure does. And for all the right folks.

The Secret Republican Agenda

Before reading this, you have to give an assurance, albeit a silent one, that you won't tell anybody any of this.

This is the Secret Republican Agenda. Hidden from public view, behind the persiflage of corporate greed and warmongering, behind the clouds of the rape of the earth and the eating of red meat, behind the reverence of religion and the exploitation of the worker; hidden behind code words like "school vouchers" and drilling for oil at ANWR, lies this hidden agenda. It is, unfortunately, insidious in its simplicity. Its acolytes view the world through this prismatic lens. And it is, in short just this simple...

It's up to you to make the best decisions you can for yourself.

Granted, there are a lot of criticisms for this agenda. Some of the funniest are those of the anarcho-syndicalists that can't allow for capitalist anarcho-syndicalism. One of the issues that obviously need to be dealt with is to what degree labour as an input to production needs to be valued. (That is, you hire a guy, what do you pay him? You own the business...you need some cash, too, right?)

Another criticism of this agenda is we can't let people make their own decisions; otherwise we'll become victims of greed. (Not our greed, our greed is good. It's "their" greed that needs to be regulated.)

Which is why I've posted twice on the value of the Even Playing Field. There is a role to play, by the government, in intervening in markets, and the acts of market players. (It's "syndicalism" because there is agreement in social goals. It's not, as the labour types think, simply about ending ownership. But goes back to Rousseau and Smith and Locke. How and why do we organize as a society?)

We live in a time of unprecedented wealth. What should be a national jubilation of our own success and prosperity has turned into a hypocritical, almost shameful (?), gnashing of teeth and rending of fabric over our wealth. We are, as Americans, wealthy, healthy and wi...

Wisdom. Are we a wise people? I don't think so.

I think we are capable of being wise, but wisdom seems to be in short supply. How could this be?

The demand for wisdom is at an all-time low.

When you ask yourself the advice you'd give to your son or daughter, about boys, about dating, about sex and family, you are at a place intellectually that leaves you completely exposed to your own smart or dumb. What would your mom or dad say? What would your friends say? What would be your reaction to your mom or dad if they were giving this advice? Your brother or sister, your friends?

Regardless of your feelings toward your mom and dad--and all those other people--are you going to be honest with your advice? Share your opinion? Say what you truly believe? And, to what degree do you trust your own opinion? Trust and the Level Playing Field.

Do you trust yourself?

The Secret Republican Agenda trusts you, perhaps more than you trust yourself.

Just as the Secret Republican Agenda states that "It's up to you to make the best decisions you can for yourself", the advice you give your son or daughter relies upon you to honestly impart to your children the values that you find within yourself. This isn't a new thought.

"The Fault, Dear Brutus, lies not in our stars, but in ourselves, that we are underlings" (William Shakespeare, Julius Caesar.)

That we are underlings. Well, that's the Democrat view. But when confronted with your child, you are the master. You have control. You will take all of the thoughts and reactions you have ever had and make a verbal reduction (answer your kid). That, at that moment, is the man or woman that can be seduced by the Secret Republican Agenda.

Hold it! Hold it! Hold it!

That is, unless, you are a hippy. Then, all bets are off. Hippies never made sense. The Beat, Hippie, Generation Gap kids are now all middle-aged and older. The agenda of Sex, Drugs and Rock and Roll, or, Tune In, Turn On and Drop Out, is seductive for a dead-ender.

And, the antithesis of the Secret Republican Agenda.

This is, in fact, the "Enemy" of the Secret Republican Agenda. It is the Agenda of the Elitist. Those who view themselves as privileged. Smarter. Educated. (Which has always seemed anomalous to me...how can you consider yourself educated when you know so little?) These are the folks who wear Che t-shirts, even after finding out that Che was a murderer. These are the folks who used--perhaps never inhaled--drugs. Don't take care of their personal grooming. All signs of the new, uber-Elite.

These are the people who push for socialist, community approaches for decision making, even knowing that community/socialist systems are inherently doomed. (Remember the Soviet Union? That was a community-based decision-making political system. Why would you want to replicate that disaster?)

Only now, we don't call it socialism/community. We call it Progressive. Same tools. Same outcomes. Different name. Call a pig a duck, it's still a pig. And is in direct apposition to the Secret Republican Agenda.

"It's up to you to make the best decisions you can for yourself".

For the community/socialist/Progressive movement to work, you have to tell others what/when/why/how to do things. (It's up to us to make the best decisions we can for you.)

For the Secret Republican Agenda to work, you have to make the best decisions you can. There will be no committees. There will be no reviews. You're on your own.

For the non-Republicans, there's only the decision of someone else, codifying our thoughts and actions. So, if you're a non-Republican, who are the decision-makers?

We call them philanfropups, er, philanthrosupths...err, we call them do-gooders. And what do we give do-gooders? We give them testimonials.

Which, in fairness, is what they deserve.

But somewhere along the way, just as the non-Republicans have decided to walk away from Christ, and rename the Road to Tarsus the Do-Gooder Expressway, we have decided to allow our testimonials to their Do-Goodery to become a Raid On Our Pocketbooks. Now, we all are philanthroferpsts. And it's not even our money. Which is a cheap way to be a hero. And a cheap way to be an elitist.

Every time you allow someone else to make a decision for you, you encourage elitism. Every time you don't kick and scream when somebody else imposes a decision upon you, you encourage elitism. Every time you fail to stand up to the current of public opinion, when, in your heart, you know that the tide of public opinion is wrong, you are encouraging elitism and elitists. Every time you allow the Do Gooders to raid the pocket-book of another--to do good--you are a thief.

The Secret Republican Agenda is out there. It offers you a chance to improve yourself. It offers you a chance to improve your children. It offers you a chance to pursue happiness, for yourself and for your progeny. It doesn't seek the approval of others. It is what the community/Socialist/Democrat hates. It relies upon the trust you have in yourself. In your own, personal sense of truth. Regardless of political vogue or fad.

Will the Secret Republican Agenda succeed? Of course. Any political system that distrusts the individual will at certain measure seek to suppress the individual. And in the history of Mankind, no political system based upon the suppression of the individual has ever succeeded. Whether it was monarch, slavery, voting rights, economic rights, equal rights, the Secret Republican Agenda has been there. And will continue to be there. Because truth is irrepressible.

Just a final note. Will there be a collision between community/collective/Socialist/Democrat elitism and the rights of the individual? Sure. It's happening every day. There are those who want to tell you how to live your life. My advice is taking a look at their kids. If you want to be like their children, by all means, follow their path. But the Buddha didn't tell you to follow his path, did he?

Trust and the Even Playing Field, Two

In Trust and the Even Playing Field, One, I point out that there are problems with trust. Even end the piece with a pun on anti-trust. Sorry, couldn't help it.

In this session, we're going to take a closer look at trust and what it means. Included below is a great link to a discussion on trust that is worth anyones time. I found it amazing. Please, click the link. (BBC Reith Lectures, below. Go ahead and read this. The link will be there. I said "below".)

Why do you trust me? Or, not?

It is far easier for you to distrust me, than to trust me. If you trust me, you are compelled to read my words, listen to my speech. And if I choose to talk about subjects that you are either unfamiliar with, or that challenge the view that you hold on a particular subject, it is far easier for you to ask yourself “why bother?” than to bother.

This is a conditioned response.

I’m a reader. I read a lot. To be a reader means that your mind is accessible. If you choose to offer that accessibility. No trust? I’m blocked. Trust? Access.

Trusting me is a risk because I can abuse that trust. As we stumble through life, more like a blind man with a cane than some bright, eager hero carefully climbing steps to your ultimate destiny, we have at turns been lied to, robbed, disappointed and frustrated by trusting someone (or, if you’ve had a series of bad patches, a lot of people!)

When you give me your trust there is no known commitment—by me—that I will do nothing to violate that trust. I mean, how much do you trust a guy who says, “Really, I’m not lying!”?

It’s one of those precarious moments in life, giving someone trust. Much like Harry Mudd’s androids, trust and lying are alpha and omega of the human condition. You get it wrong and you can have your circuits blown. To Harcourt Fenton Mudd this was, it seems to us, a trivial matter.

So, unlike the Mudd androids, who had no conditioning to hear the “truth of the lie” and move on, they listened and were doomed by the logical inconsistencies of the statements they were given. Silly androids.

Being much smarter than androids—and a lot of people have put a lot of time into understanding the different types of thinking people commit on a moment to moment basis, to process the information we receive from our senses and interpret with our minds—we allow our conditioning to take over. Tab me as a Republican? Don’t need to listen. Can’t trust a Republican. Tricky Dick. Dumb as W. Tool of the _____(fill in blank)______ industry.

Because you’ve been conditioned to have a certain and constant distrust of Republicans, there is little or no chance for me to have an impact upon anything you may say or think. To do so would require a “leap of faith”.

Are you willing to do that? Make a leap of faith that I’m trying to neither deceive you nor trick you? (For a great discussion on trust, head over here.)

The reason I ask is this; you hear so much each and every day that is ludicrous and simply bereft of reason, but, because you hear it from a Democrat you simply hear it and move on. Take for example, the latest from one of your Democrat candidates for the presidency:

“I think a lot of people don’t understand my plan,” she said on CBS’s “The Early Show.”

“I want the oil companies to pay that $8 billion this summer instead of having the money come out of the pockets of consumers and drivers.” (Hillary Clinton, “Democrats Battle Over Gas Tax and Iran”, The New York Times, May 6, 2008.)

Now, if you can’t see the basic distortion of truth in this proclamation by the Democrat candidate…I just don’t know what to say. This is sheer connivance. If you react to this “offer” from the Senator with happiness in your heart, there exists such a gap in your understanding of how markets work that you might want to put your voting rights up on a shelf for a short period of time. It’s not a question of your being able to trust me…I know that I cannot trust you. And that’s disturbing to me. Because you do this to me, time and time again.

If you feel that somehow making the company that provides for your gasoline paying your taxes will encourage them to produce more gasoline, in greater quantities and for a lower price, you’ve got some ‘splainin’ to do. What is this miracle of economics that the Senator has revealed today? Can I use this on my electric company? That portion of what I pay for corporate taxes by paying my electric bill will be reduced by that tax on my monthly bill?

How much further can this train of thought go? When I buy groceries, the funds that cover the taxes on my grocer must be deducted from my food bill?

This is a great new way of saving money for the family pocket-book. Imagine your employer never having to pay you the amount you use to cover your personal tax liabilities. His cost of your labour goes down…and maybe he’s more likely to hire new people, vanquishing the demon of unemployment. Modeled upon the famous Ouroboros Dragon, perhaps the senator has also found a source of perpetual motion.

So let me ask the question: if, after examination you find the Senator's proposal ridiculous, do you trust her? Is she really ready to lead from Day One? And do you trust her more than you trust me?

Trust and the Even Playing Field, One

There is a reason for viewing the normal curve at the start of some of my posts; I want to underscore the value of normal. It is an attempt to show that there is a middle way in policy. That is to say, after thousands of years of development, governments have important duties to perform in the maintenance of our society.

Our society is a service, a public good, in the way we talk about the private sector providing us with goods and services. Just like the goods and services provided by private persons and private companies, government goods and services are provided us on the basis of our demand for these services, usually through the legislative activity of our various legislative agencies. Among the goods supplied by our government are water, streets and sewers. In the past two hundred years these goods have expanded to include baseball stadiums and airports. When it comes to the problem of capital formation governments have a tool that simply doesn’t exist in the private sector; coercion.

If a group of local investors decide that they want to build a baseball park, there is nothing in law preventing them from moving forward, raising investment funds, buying property and building the facility—capital formation.

It is set of voluntary associations that stand behind capital formation in every private endeavour.

Coercion is the tool of capital formation for every public endeavour.

It is the coercive power of the state that demands your attention. When I volunteer to bring a good or service to market, you are under no compulsion to purchase that good or service. I think of it the way Drucker does, that profitability—far from being the reason to undertake any economic activity—is a report card on how useful your good or service is to the market.

Economists talk about “limited entry” markets. These are markets where entry into the market for the goods and services provided by the particular market is limited, either by legislation, limited resources or high marginal costs. No matter how much I want to bring to market a better good or service, there are barriers to my being able to become an economic player in that market.

An example of limited entry created by legislation would be Oregon state laws providing that only certain types of nurses may be employed by certain agencies or health providers. The Oregon Nurses Association found itself in the pickle of being able to provide a certain level of employment and wages in the face of competition for jobs provided by certified nursing assistants. The answer to this challenge, to provide higher costs for health care and to provide for featherbedding of registered nurses, was to claim that it was necessary to limit CNA hires in the name of “patient safety”. Improved patient care. Etc. Nothing could be farther from the truth. It was an RN employment law. Period. Now, perfectly qualified CNA’s cannot be hired to perform the work for which they are trained, without the concomitant hire of an RN to augment that hire.

The next case of limited entry is the case of the diamond miner. Having the goal of mining diamonds may or may not be socially desirable—although the high price of diamonds would tend to suggest that diamonds are very desirable. But going about owning a diamond mine is going to be dependent upon locating a diamond mining site that is currently unclaimed, and I would suggest, a daunting proposition.

The last case, of high marginal costs limiting entry, relates closely to the problems associated with economies of scale. I love to hear O’Rielly talk about oil companies. His populist criticism is that oil company profits are too high, and that if they were somehow “more decent” they would lower those profits by lowering their prices. It would be more worthwhile, in my opinion, to look at the opportunity suggested in his populist criticism and the costs associated with that opportunity.

Manufacturing petroleum based products is based on a technology called “cracking”. For those of you who had Professor Orzech for Micro, you know that when he was in a good mood, he’d share his “oil days” with the class. Crude oil is an amazing resource, and the amount of products that can be produced from a barrel of oil is amazing. We tend to think of gasoline as being the end product of crude. It is an important by-product, but far from being the only product at the end of the refining process.

You don’t get a barrel of oil and somehow boil it and condense the steam…well, you do, but it isn’t that easy. There are a lot of different things happening to crude as it is processed. And given the variety of products that can be processed out of a barrel of oil, the choices of what products to refine at any particular moment are driven by price and profit motives. While the demand for gasoline will drive the production of gas available at your local gas station, the demand for Pampers will drive the price of production of plastics for the diaper industry. High-speed lubricants markets help determine the price and production of high-speed lubricants. The demand for cell phones and television sets will determine the demand for plastic cases for you I-pod and your Gameboy.

All of which is lost on a populist—O’Rielly—as mentioned above. The issues of price and profit motive determine resource allocation. (For a man of Mr. O’s reach, you would think he has a sense of responsibility for his pronouncements. But, he carries on incorporating a one-process, static view of gasoline production, which refuses to include important information in the production processes that occur at a refinery. Simple solutions require simple thinking, and Mr. O remains intact in his simplicity.)

This brings us back to the question of trust. For those of us who use derivative petroleum products as inputs in the production of the goods and services we provide, in the form of finished products, we trust that the price mechanism will allow us to continue to purchase those byproducts as affordably and in such quantities as is necessary for us to continue our business activity.

If you don’t trust the market system to determine the allocation of resources, you’re tempted to use state power—coercion—to achieve the allocation that you think is the correct allocation. Let us take a minute and see what the possible effects of this coercion effect:

The easiest way to thing about this is to view the effects of weighting in a dynamic system. A simple dynamic system is your bicycle. When it is at rest, there aren’t a lot of dynamic forces at work…just one force, gravity. We can make a lot of adjustments to our bicycle while it is in this static state that may seem like good ideas. As a youngster, you probably experimented with playing cards on the spokes, butterfly handlebars, and the ever popular sissy bar with banana seat. But to capture the effects of legislative coercion on a dynamic system, we’re going to mandate a change in the weighting of the system. By adding a one-pound weight to a single point on the wheels of our bicycle.

By imposing this weight arbitrarily, we create a whole new set of problems for cycling the moment we take the bike out of static mode and put it into dynamic mode. Getting from point A to point B now becomes a dance of unnecessary, mind (and butt) pounding oscillation that makes biking less than easy, more impossible. At slow speeds the bike is ridable, but coming down Scholls Ferry from Sylvan, heading to Garden Home, would be impossible.

Government based solutions tend to do this. Market based solutions tend to not. Governments fix weights. Markets adapt to imbalances. The imbalances are cured by price. Fixed mandates are impervious to price. Markets give you greater balance and higher velocities. Mandates create structural imbalances and slower velocities. Markets give you lower prices. Mandates create higher prices…unless supply is mandated, in which case mandates create shortages.

Now, that’s a lot to be said in just one paragraph, so I’m going to leave and come back. For those of us who trust markets, the greatest role that government can play is to assure us that the playing field is level. Perhaps it’s important to take a quick look at one of the more, in my humble opinion, important pieces of legislation of the past 117 years. A piece of legislation proposed and passed by Republicans. A piece of legislation that has tended to level the economic playing field, allowing for greater balance and higher velocities. A piece of legislation that I use as the greatest example of why libertarians are wrong. Does this legislation impose costs on the market? It certainly does to individuals in the market place. To them it imposed costs because they weren’t able to dictate market conditions. Reading about this legislation should open your eyes to the set of market conditions preferred by Republicans, as a counterpoise to the legislative intentions of Democrats.

Far from removing pricing as a mechanism for economic activity, this one act of legislation has done a lot to balance the wheel of economic activity, and allowed for some pretty explosive growth of the national economy. I, of course, refer to the Sherman Act.

If you have an interest in another view of the issues I have brought up, I recommend you to Dr. Robert H. Nelson’s amusing “What is Economic Theology?” (Robert Nelson, "What is Economic Theology?", The Princeton Seminary Bulletin, Vol. xxv, Number 1, 2004, pdf.)

And leave you with a paraphrase of Christ, Matthew 26:11, “For ye have shortages always with you”. Enjoy your day.