On Blackbird Singing In The Dead of Night - Part 1

This is not how I play it. This is better than how I play it.



Gosh, I love to learn.

Reflections on Site Build It - Part 1

Since January, I have been a paid subscriber to Site Build It ("SBI"), a product that has (according to its promotional materials) delivered a lot of value to a lot of small e-business owners who run a lot of successful websites.

(Click here for some SBI Case Studies.)




I haven't accomplished anything SBI-related lo these many months. But I'm back at it again right now. Working through the "Action Guide" this evening. And thinking more clearly about these matters (I think) than I did this spring when last I tried.

Here's today's reflection ...

According to Day 1 of the Action Guide, the "C"in SBI's C-T-P-M stands for "Create In-Demand Content." This spring that didn't mean much to me. I believed SBI that the "C" was important and accurately thought through (I believed it on authority). But I didn't understand why the "C" is important and accurately thought through. Tonight I think I do:

• if you are creating in-demand content, you are creating information people want.

This is important because one HUGE mistake that I understand lots of sales folks make is they try to sell customers the product that they have to sell instead of trying to figure out what product their customers want and delivering (selling) that product. The former is backwards. Shortsighted. Doomed.

So I was right to believe SBI. Ken Evoy knows what he is doing.

On the Black Hole Sun to the Acid Rain of Government (Austrian Economics) - Part 1

Austrian economics is a black hole sun to the acid rain of government. Which is to say, it is the truth (and the government is not).

Civilization is best ordered in accordance with its principles.

Freedom works.



And the truth will set us free.

This terrific article gets vividly, succintly, and powerfully right to the hearts of the matter.

Some key paragraphs from the article follow (emphasis (bold text, etc.) mine) ...

EXPLAINING MONEY:

• Money is a claim on resources. Where there are resources and productive values, claims can be created on them and there is no problem. But printing more claims does not produce more resources. The government and its printer (the Fed) have no resources except what they take from us. Printing claims enables them to take these resources from us, but it does not expand their amount.

In other words, the bailout can not create wealth. Printing presses (or monetizations of U.S. Treasury debt) can not create capital. The bailout and the printing press can ONLY redistribute wealth. (Which, by the way, is a fancy way of saying "rob Peter to pay Paul." Which, by the way, is wrong (and against the law, unless, apparently, the government is the thief).)

EXPLAINING WHAT GOVERNMENT IS:

• Government is a black hole. It is a field of political power that is so strong that nothing can escape its pull, or so it seems. Once established, it grows.

EXPLAINING GOVERNMENT FINANCE:

• Finance is a final constraint upon a government. When it can no longer finance itself, it fails. When its tax collections fail, it fails. When its printing press no longer seizes enough real capital to sustain the government, it turns to brute force seizure. This brings its political power into the open. As greater awareness of the seizures spreads, capital flees. Capital flees taxes and seizures of all kinds. It goes into hiding domestically. It runs off to foreign havens. This has been going on for many years. It will accelerate. The costs to the government of seizing capital will rise sharply, and this will constrain government.

In other words, people don't like to be robbed. Not all victims will sit idly by and allow government to destroy their accumulated wealth. (As an aside, no one should. The government is not really on your side; there is nothing patriotic about financing evil (theft).)

EXPLAINING THE END GAME:

• According to quantum theory, black holes leak energy (Hawking radiation). [Their] life is finite. Government faces leakage of capital. Capital flees the control of government. The government's life is also finite.
  

In other words, black holes and governments both come to an end because of leakage that, by their very nature, are impossible for them to prevent. Their destruction and failure is inevitable. As the works of Austrian economists - and the principles identified therein - demonstrate.

* * * * *

The Federal Reserve is a castle built on sand. And the acid rain of the government's monetary policy will, inevitably, wash it into the abyss. And then - with God's help - civilization can come on out of the dark and get back to flowering in the light of freedom. [1]

[1] I say "get back to flowering in the light" because this story is very old (see, e.g., 1 Samuel 8 (a vivid account of how a people came to choose centralized government (a king) over God and what a bad idea that was; includes a litany of the kinds of problems this would create, which list, coincidentally, resembles very closely our own Americans' plight under the thumb of our government (except that our tax burden is MUCH more onerous)).

Trying To "Talk Like An Austrian" - Part 1

My dad emailed me this article (link follows) from Barron's where they're talking to famous smart, rich guy Jeremy Grantham. An email exchange with my dad about it prompted me to want to put this post together in which I'm going to try to "talk like an Austrian" (economist).

Grantham Interview - October 13, 2008



Grantham seems to be pretty shrewd. He was making various dire predictions over a few years. And he’s certainly managing a lot of money - $120 billion (according to the Barron's article) is a pretty huge pile (and assuming he’s on some sort of percentage cut management fee, he’s making a lot).

And a lot of what he says makes sense to me (which means it's consistent with that certain other stuff that I've been reading which I credit for being accurate and helpful for making sense of the present economic environment).

But as with so many of these fellows (smart, rich guys who predicted some sort of general dislocation/crisis in the world's financial markets and economies), there is plenty that he didn't say that I wish he would have said (because it's my view that it would be very beneficial to the human civilization if more smart, rich guys said things like this). Especially towards the end of the article where Grantham is asked how he thinks we (economic actors) got into the mess in the first place.

And he says:

I have a theory that people who find themselves running major-league companies are real organization-management types who focus on what they are doing this quarter or this annual budget. They are somewhat impatient, and focused on the present. Seeing these things requires more people with a historical perspective who are more thoughtful and more right-brained -- but we end up with an army of left-brained immediate doers.

So it's more or less guaranteed that every time we get an outlying, obscure event that has never happened before in history, they are always going to miss it. And the three or four-dozen-odd characters screaming about it are always going to be ignored.

This may or may not be true.

But it's far from the best -- defined as most accurate -- to the question. And I wish he would give the best answer to the question.

I wish he quoted or alluded to Ludwig von Mises and/or Austrian economics.

Specifically on Mises' “cluster of errors” concept (see, e.g., this article by Murray Rothbard expounding on Mises analysis).

Mises says the causes of the “cluster of errors” is the misinformation delivered to capital markets by the Federal Reserve’s monetary inflation, not a right-brain/left-brain problem of executives running financial firms.

That monetary inflation causes entrepreneurs engaged in forecasting to believe that capital available for investment is cheaper than it actually is. This lures them into more capital-intensive projects than is appropriate given the state of the “real” world.

And eventually the investments prove to have been unsound (when losses are realized through an inflation in the costs of ordinary things, including labor and raw materials, etc., and the failure of the revenue generated by the capital-intensive projects to exceed the costs of the projects themselves). And so then the bad investments need to be liquidated (because there’s been real errors in the allocation/expenditure of wealth).

But governments don’t want that to happen (because when prices go down and businesses fail, interest groups scream and cry out for help), so they intervene, try to prop up prices, try to keep the losses incurred in the bad investments from being realized (an impossible task). This is what is happening now. Massive government intervention. Which can not undo the bad investments. (The omelet hath been scrambled. The milk hath been spilt.)

Carried to its logical conclusion, this process will spread the pain/losses of the bad investments made by the entrepreneurs who were deceived by the Federal Reserve's monetary inflation around the entire economy/populace. A process which will take much longer than is necessar and that also will hurt scores of innocent people who had nothing to do with either the monetary inflation or the malinvestments (think poor folks and folks living on fixed incomes (old folks)).

By the way, the government intervention path is also immoral.

So that's a massive double whammy against government intervention -- it won't work and it's immoral.

UPDATED ADJUSTED MONETARY BASE CHART

Here's the updated adjusted monetary base chart from the Federales.



This is some serious holy crikey bonkers mania stuff.

MAP OF BAILOUT VOTES

Thanks to the good folks at the Lew Rockwell.com blog, here is a map color-coding the vote on the bailout.

THE BAILOUT IS BULLSH*T; YOU BROKE IT, YOU BOUGHT IT (video)

This video shows a large group of people gathered on a recent date (2008-09-25) in a single place (Wall Street) to voice their opinion about recent political events ($700 billion big banker bailout).

I have been watching a lot of television news and reading a lot of internet coverage about this event. Didn't see this discussed anywhere. Seems newsworthy to me.



These folks are chanting the following (which I really like; it's perfect, I think):

• The bailout is bullshit; you broke it, you bought it.

Awesome.

Thanks to http://tikilounge.blogspot.com/ for the link.

ADJUSTED MONETARY BASE CHART

Americans, your unelected overlords (e.g., Fed Chairman Bernanke) have achieved liftoff (and I'm afraid their destination is Dollar Destructionville).

This chart gives me the heebie jeebies. I could not BELIEVE it goes up that fast that far as it has in the past couple of weeks. And that is BEFORE the chart reflects the US$600 billion plus Bernanke flooded into the capital markets last week.

This is a very important statistic. I'm not competent to explain why, but I'm confident that that is a true statement. I look at this chart a few times a week, definitely every time it is updated I see it within a day or two.

By the way, they publish this chart here:

http://research.stlouisfed.org/publications/usfd/page3.pdf

SENATE PASSES BAILOUT + VIDEO REACTION

Senate passes bailout (report from CNN).

And here's a music video which will hopefully turn out to be inappropriate (but which I am concerned is one of the things that is going to happen here as a result of this government meddling):



One interesting side note ... I just tried to send another message to Ted Poe, the House of Representatives fellow for my district here in the greater Houston area (who voted "NO" on the bailout on Monday, thankfully). And the server at house.gov is not responding. Maybe it is getting crushed by concerned citizens trying to get their message through that the revised bailout is no more acceptable than the version rejected Monday?

I hope so!

Another Letter to Senator John Cornyn

So I saw on the news that the U.S. Senate is planning to pass a version of the bailout that will include a bunch of tax cuts because this is intended to tempt enough of the House Republicans who voted no to the bailout on Monday to vote yes because they want the tax cuts more than they are scared to vote no on the bailout.

I hope this plan doesn't work.

And in any event, it did give me a chance to fire off a follow-up message to my Senators. For your pleasure, my follow-up note to Texas Republican Senator John Cornyn (pictured below - he's the one to the left of Vice President Cheney) follows. Again, I'm sure this note will make the difference.



Senator Cornyn:

I am a registered Republican voter living in Texas.

I saw a report on the news Sept. 30 that the Senate may vote on a modified "bailout" proposal on the night of Oct 1. So I am sending you this message as a follow-up to the message I sent you over the weekend to let you know that I hope you are planning to oppose any "bailout" of the banks, etc.

As I indicated in that other message, the two primary reasons I am against the bailout are (1) it won't work -- which is to say, it will not generally improve conditions for Americans and instead will almost certainly make conditions generally much worse for Americans (except for the bankers who stand to receive the windfall and be "bailed out" of the consequences of the bad investment decisions they made over several years) and (2) it is immoral -- which is to say, a bailout would be a massive forced redistribution of wealth from regular taxpayers to bankers and redistribution of wealth by force is akin to (the same as) theft. Congressman Ron Paul can explain item (1) by the way, if you are not already convinced that it is accurate.

To put it bluntly - in my opinion, a vote for the bailout is an attack on the value of the U.S. dollar and a vote to reduce/diminish the standard of living of ordinary Americans.

Please also be assured that I am not in the least persuaded by any of the doom and gloom talk flowing so freely from the mouths of people pushing for the bailout. I am not at all afraid of what will happen to "the economy" if the banks are not bailed out. On the contrary, I very much AM afraid of what will happen to "the economy" (and ordinary Americans) if the banks ARE bailed out.

This is because socialism doesn't work. Nationalization of businesses that made bad investments does not prevent the losses those bad investments deserve.

In any event, if the measure comes to a vote in the Senate, I hope you vote against it. And I will check to see whether you voted in support of the measure or against it.

As I indicated in my message this weekend, this is a "make or break" item for me in terms of supporting your next candidacy for Senate.

Thank you for your time and for your service.

Garrett