Archive for the ‘Metaphysics’ Category

(I apologize upfront for the grammar and typo issues that may exist; this needed to be released at the soonest without its usual polishing due to the situation on the Hill.  Please assist me in sending this far and wide with the spirit of urgency that this subject deserves.)

The war drums for the statist’s campaign continues to beat. This week’s battlefield: minimum wage hikes. The argument: “…tell [your Republican representative(s)] it’s time to give politics a rest for a while and do something to help working Americans.”[i] If we allow these feckless tyrants to have it their way, minimum wage would be indexed to inflation[ii] – at a minimum.

This plan sounds good if only first order consequences are considered – government forces companies to raise the limit on lowest wages, and those workers get paid more… period. It’s simple, elegant, and desirable but it’s also false[iii]. One can understand its appeal to childlike minds when exploring this fantasy with childlike forgiveness of inconvenient facts. If raising wages is the only effect, why not raise it? Is it the only effect over time though?

It’s easy to make arbitrary claims, which seem desirable. Not much more is required than a positive attitude. In addition, an estimable bonus goes to the proclaimer since their opponents are at an immediate disadvantage. Whether their opponents neglect to respond or address the issue, the statists have gained tempo.

If their opponents do not respond, the statists appear justified in claiming (to whoever will listen) that their opponents have no responds, which gives them a façade of being right. Uncritical constituents will be pressured to support the statist cause in the presence of the vacuum created by the nonexistent alternative.

If their opponents choose to respond, however, the opponent’s response would require more time and energy producing a lengthy – and if the statists are lucky, boring – response than what it took the statists to make your arbitrary claim (no thought, effort and hardly any time necessary exerted by the statists). This prevents their opponents from being on the offensive in advocating for their ideas, since they are now wasting time addressing mirages.

For the above reasons, I admit up front that I am at a disadvantage. At this point you and I have spent already 1600% more time/energy than the statists[iv] on this issue (and more to go), and I may have failed to make this paper interesting (hello? Are you still there? This is important to understand.). This disadvantage, however, is short-lived unless the statists pass a law before the truth has its day in the sun – this is precisely their Standard Operating Procedure.[v] Given time, the truth is impossible to conceal when readily available and when honest people like yourselves simply take appropriate steps to acquire it. As we will see, an honest attempt to ground the statists’ fantasy in reality shatters its chimera of good outcomes.

I intend to demonstrate that minimum wage is at best not beneficial, and at worse crippling. [vi] I will show: that minimum wage is a special case of general pricing, and therefore, falls under its economic laws; that minimum wage amounts to price fixing and that price fixing falls between the range of not beneficial and harmful.

To begin, I will assert that wage earners have customers. You might be asking who they might be. Perhaps this perspective is not yet sufficiently fashionable to gain popular support, but it is on all accounts accurate as best as I can judge – their customers are their employers.

Consider the general relationship between customers and businesses. Customers seek out desired services from businesses and exchange money for those services. Is this not what employers do when they post available jobs listings, interview candidates, and ultimately hire them? Also, businesses advertise their service(s) to attract customers and exchange services for money. Is this not what a resume, an interview, and accepting a job offer accomplish?

The many forms of employment share this essential relationship: the employee sells a service to their employer. The customer relationship between employee and employer, though a bit unusual in these terms, means that the price of the service in question falls under the province of the same economic law that determines the price of any service – supply and demand. This is evident in the fact that if the demand for a certain type of doctor is high, yet the supply is low, then their salary will be higher than other types of doctors[vii] – even though the duration of their education/training might be the same. Now consider low skilled minimum wage earners that have no chance to rise above that legal minimum. Might that have something to do with the oversupply of unemployed workers[viii] ready to jump into that job at the legal minimum? Wages, if left alone by the law makers, are controlled by supply and demand.

You might be wondering “what’s the big deal with setting a minimum wage” since wage minimums have existed for so long.[ix] Well, first and foremost, it is a form of price fixing and price fixing is harmful. Since wages are a type of pricing, then fixing it at the lower limit is fixing employee services at a lower price limit, is it not? The harmful results of price fixing is best understood by contrasting the complex chain of judgments, decisions and actions that ultimately determine the price of services within a free market, and the devastation that is created by short circuiting this process via price fixing.

Consider your favorite technological gadget for a moment, be it a computer, a smart phone, a movie-streaming device, or something else. What do you imagine went into its creation? How much effort and thought was necessary? How many trades occurred between the first purchases of raw materials (e.g., paying the workers to mine the metal used in your device) and the assembly of the item[x]; Or how many occurred between the purchase of raw materials and the fabrication the special tools necessary to assemble the item, before it was made available for your purchase?

Our economy is such a complex network of services and trade that I doubt any one person can possess all knowledge essential to the creation of such an intricate item, especially since that knowledge changes every minute of every day as the conditions of the market change. Suppose that a circuit company discontinues a component. Or suppose a new component is created that is cheaper (or costlier) and higher performing. Or suppose that any component changes within the chain of production for any production item. Wouldn’t that necessitate an adjustment down the line that reflects the change “upstream”? Many historical examples exist to show that it does, but for a present example, just watch the Wall Street ticker tape to see the “downstream” effect of “upstream” changes.

These constant changes are a life necessity. Life requires that the actions of a living organism produce more value (to life) than what is consumed during the process. Life requires profit. Any action that yields less value than what is consumed is a deadly process – over time only death (i.e., non-existence) with triumph. This principle applies from the simplest action to the most complex chains of interactions – no one part may operate at a loss (forever). The gives rise to a need to keep one’s ear to the ground and remain aware of changes that may affect profit.

It may seem overwhelming that so many lives rely on profit to be generated across the board throughout the economy. Not to worry though, no one person needs to perform the impossible and acquire all knowledge of the on goings. It is sufficient that at every stage, two living persons (at a minimum) are free to exchange money for services to mutual benefit, or walk. The potential for competitors prevents businesses from arbitrarily pricing services too high, and the potential for other customers prevent customers from arbitrarily setting prices too low. One simply needs, for any particular transaction, to be aware of their options (which always include no transaction).

If the price of a service would consistently cause one party on either end of the transaction to function at a loss, then the nature of existence does not permit the price to remain this way long term – either the service eventually stops or customers eventually disappear. Each member of a transaction is charged (by the nature of their being requiring profit) to protect themselves and at the same time to meet the other’s interest (by the nature of the other’s being requiring profit).

With this understanding of the complex chain of judgments and decisions that go into transactions, with each member performing a service for profit, one can appreciate the precariousness introduced when non-interested parties establishes laws not subject to (and contrary to) the laws of economics (and nature). The result is a short-circuiting of the living judgments, decisions and actions that existed prior to such a decree. Regardless of the reality of the situation, price fixing established by law ignores all living considerations related to what that price should be.[xi] The price is set even if it is contrary to the needs of life – i.e., contrary to profit.

The consequence of this short circuit depends on where the arbitrary price falls in relation to the price established by supply and demand – i.e., where it is in reference to the market price. If the arbitrary price of any service is lower than the market price, the service tends to disappear. If the arbitrary price is higher than the market price, the customer tend to thin out. If the arbitrary price is equivalent to the market price, there is no harm (for now), but there is also no benefit.

If people less likely to perform a service in producing an item due to price fixing too low, the observable effect is empty shelves within a store.[xii] Does this not make sense as the only logical outcome to low prices? It means someone (or some group) in the chain of production would have to function at a loss. Picture the extreme – forced to give away a service – to grasp that anywhere on this continuum tends toward empty shelves. It is difficult to say exactly who will bear the burden of this loss, but the burden will likely rest with the most desperate and/or unaware party. It is fairly easy, however, to determine who would benefit from paying less for an item – the customer. This combination between some party absorbing a loss and another receiving a greater value causes these items to be scarce.

If the number of customers diminishes due to price fixing too high, the observable effect would be fuller shelves within a store.10 Does this not make sense? The combination of benefiting and cost absorbing is different from price fixing too low, so the result is different. The customers avoid paying more than they would have otherwise and tend to buy other items, while businesses prefer to receive a higher than market value for their item, so they stock their shelves with items that customers are less willing to buy.

If the arbitrary price is somehow just right, the result will not differ from the results of market prices. The items on the shelves will be sufficient for regular commerce with no party assuming an undue loss or unnatural benefit. The result will be good, but not better than letting the market set the price. Since current market conditions are constantly a fleeting moment, price fixing has a major drawback. A stationary arbitrary price, which is correct today, will be wrong tomorrow (or eventually) due to the changes in market conditions, resulting in one of the above undesirable outcomes. The market reacts faster than law makers.

Minimum wage is slightly different in effect than ordinary price fixing, in the sense that it applies a fixed price within a limit and not the whole range.[xiii] In this sense, the minimum could be set to zero and essentially there would not be any fixed prices. If the minimum wage was too low, therefore, we would expect that the market would dictate the price of services that fall between that minimum and the maximum.[xiv] The only harm minimum wage could do, would be to be set higher than the lowest paid worker, which would cause those low skilled workers to tend remain on the “shelves,” which is essentially what we have today, is it not?

When statists determine the minimum wage, they are essentially claiming to know better than the millions of people that judge, decide and act in a free market. We see that this is a form of price fixing, and we see that price fixing can only be harmful in the long run and only not beneficial in the short run. Why maintain a minimum wage? Why not abolish it, and any other form of price fixing statists choose to establish? How much more harm are we each willing to take and remain blind to? Isn’t time past due for us to break their drum sticks and send them home?

—————————–

[i] President Barak Hussein Obama, Quoted in Monday April 28, 2014 WSJ article, Wage Boost Seen as Wedge Issue in November

[ii] Plan expected to be voted on in the Senate Wednesday April 30, 2014, set up by Senate Majority Leader Harry Reid (D., Nev)

[iii] Fallacy of context dropping

[iv] We are at sentence 16 and Statists use one sentence to say “raising minimum wage puts more money in American’s pockets”

[v] Remember Obamacare (AKA Unaffordable Care Act)

 

[vii] Assuming a law doesn’t exist barring the free exchange in this regard

[viii] The Congressional Budget Office (CBO) projects that the unemployment rate will remain above 8 percent until 2014 (cbo.gov). Estimating 230.4 million working age Americans (census.gov) in 2010, that makes 18.4 million competitors throughout the US.

[ix] “…a long habit of not thinking a thing wrong, gives it a superficial appearance of being right…” – Thomas Paine

[x] To include hiring employees throughout the production chain, the agreements between subcontractors to perform special tasks, and everything in-between

[xi] Refer back to the number of judgments and decisions going into the production of an item, and at every stage, the life of the members are taken into account (so the life of all its members are taken into account), so just imagine what would happen if one member acted towards loss and death

[xii] https://www.youtube.com/watch?v=jWTGsUyv8IE, Observe the comparison on how some shelves are empty while others have a castle of boxes in stock

[xiii] Not considering progressive taxes for a mement

[xiv] All else being equal, but the effects are known to propagate and not to anyone’s benefit – as the cost of the simplest services rise with the minimum wage, so does the cost of the simplest items, which just changed the condition of the market and affects every “downstream” service

This topic is difficult to discuss for many reasons.  The position I represent is not a mainstream idea.  It’s unpopular to most established political figures and news outlets.  In addition, hardly anyone is intimately familiar with this perspective, and most are unaware that it even exists.  My goal here today: to introduce you to the existence of ideas that I believe are necessary to win this unwinnable war.  You be the judge for yourself.

I say unwinnable because that is how this war on terror is approached in action, but not in words.  In words we have redefined winning to the point where one has to take pause and wonder: Winning?  By what standard?

We have established “pro-western” governments in Iraq and Afghanistan at a — and it’s impossible not to under state this — at a colossal expense to ourselves.  Sit down some afternoon and attempt to look-up and measure the total expense in lives and treasure, and the individual rights we’ve agreed to violate here for the sake of these “pro-western” governments.  Anyway, is succeeding in bringing about changes in these countries winning this war on “terror”?

History is helpful in answering this question because of the many cases it offers.  Let’s look at the last American war that resulted in our uncontested victory: WWII.

During this war, were internal security and other inconveniences raised?  They were, remember the Japanese camps here in the US and the rationing for the sake of this war.  Did it stay that way?  No, things returned to normal – and, by that I mean returning to conditions that existed pre-WWII.

During this war the enemy, both the Japanese Imperialists and Nazis, wanted to kill us.  The end of this war was marked by their abandonment of their cause as hopeless — and this is the critical part — this was done in four years counting Pearl Harbor as day one.  This is the only measure of victory that mattered, and only then did things return to normal.

How about today in our current war on “terror”?  If you haven’t considered the parallels between the two wars, let’s do so now.

Were our internal security and other inconveniences raised since 911?  The creation of the Patriot Act, TSA and its policies, and the largest department ever created DHS comes to mind.  The continuing increases in security as terrorist discover ways to circumvent our efforts also comes to mind.  So the answer is obvious, yes.  And by all accounts these security actions are here to stay for our inconvenience, our violated rights, and our security.  Forget about going back to normal.  If you have been paying attention you would have noticed that we are constantly reminded by political figures and news outlets that this is the new normal.

Does our enemy today want to kill us?  I think the answer to this question is equally as obvious, and our enemy shows no sign of getting tired.  They see their cause — and rightfully so up to this point — as achievable.  They have no reason to think their cause is hopeless, so why would they abandon it?  Their cause is as alive today, if not even more so, than it was at 911.

The group that continues to harm us is a speck of dust compared to the two world powers we were facing during WWII.  And just as significant to this equation is the fact that we are more powerful by an immeasurable magnitude than we were during WWII.

So I ask again: by what standard are we winning this war on “terror”?  Certainly not by the standard that brought us victory during WWII.  And that is part of the problem; we have no clear meaningful standard of victory.  We are continuously told that these two wars are so essentially different that you cannot measure them both by the same standard.  I challenge this ridiculous notion and you should too.  If that notion were true then the comparison I just made couldn’t have been made.  But I did make the comparison, which ought to be enough for you to wonder about the validity of that notion.

I am familiar with the greatest objection to making this comparison: we are dealing with an insurgency today and we were dealing with easily identifiable countries during WWII, so our enemy today is essentially different and cannot be defeated in the same way because they are difficult (if not impossible) to identify.  That is part of the problem too; our enemy remains unidentified because we believe him to be these individuals who are practically unidentifiable until they literally blows up in our faces.  Our enemy is more than that.  Have you ever considered the reasons why, in spite of the objection, the enemies of WWII and today are essentially the same and why you should use the standard of victory during WWII for this war?  That’s what I hope to cover today.

So hopefully you are beginning to see the reasons I think — and you should continue to judge for yourselves — why we haven’t demoralized these specks of dust to the point of abandoning their cause allowing us to return to normal. The two obstacles to this total victory can be summed up as us having no meaningful standard of victory and we haven’t identified our enemy beyond its fighters.  This kind of victory is possible once we overcome these obstacles and we don’t have to settle for the results brought forth by 12 years of building “pro-western” nations in the Middle East and the cost associated with it.  This victory is what my topic is about today: winning this unwinnable war.

We have just brushed on the solution to one obstacle that prevents victory: having a standard of victory that is meaningful.  One obstacle remains, however, which is preventing us from completely hurtling over the first obstacle: properly identifying the enemy in terms essentially the same as our enemy during WWII so that we can act in accordance with the standard of victory that brings us back to normalcy.  Most of you are probably wondering at this point, how are we going to properly identify this enemy in such terms?

This subject alone is very difficult to discuss due to the objection I stated earlier, which is deeply embedded into the minds of political figures and news outlets: we’re dealing with an insurgency.   To broach this subject I would like to discuss how not to identify our enemies, to draw out how one does properly identify an enemy.  Then I’d like to use an analogy to show how one goes about properly identifying our current enemy; so bear with me.

To begin, out enemy is not a tactic as most of you are familiar with.  A war on “terror” is one of the worst declarations of wars anyone can make, if defeating the enemy is their goal.  A war on “terror” makes as much sense as declaring a war on “blitzkrieg” — for those who don’t know, it was a German tactic during WWII.  For one thing, a tactic is only a means to an end.  To focus on a means to an outcome without the context of the outcome and those who wish to see it through is meaningless.

If terrorists succeeded in bringing about their ends — achieving world caliphate –without the use of terror tactics, the outcome would be equally as tragic.  Not to mention, some tactics may be of poorer taste than others, but they can be good in the act of achieving something good — e.g., victory over our enemies.  To give a real example, we caused terror to strike the hearts of Germans during the battle of Belleau Wood, to the point where the US Marines received their famous nickname, “Teufelshunde” or “Devil Dog” in English.  Our tactics then were terrifying.  Terror can be good, so declaring a war on something that is amoral until applied to a context is worse than meaningless — it’s confusing.

To consider this in a different light, neither is our enemy solely a group people divorced from their cause resulting in their means of achieving it.  We stopped attacking the Germans and Japanese during WWII once they abandoned their cause, and therefore, also abandoned their means to achieve it.  Why would that be if the Japanese and Germans, as a group of people, were our enemies?  The reason is obvious; people as such are not our enemy.

Some of you may be beating me to the punch, but our enemy, as properly defined, is a group of people whose ends would violate our rights and destroy our way of life.  Regardless of the tactic, or means, they use to bringing about this end, they are still our enemy and we should act to secure our rights through the most efficient means our appointed guardians see fit.  By efficient, I mean the least cost of lives, treasure, and inconveniences possible to secure our rights.  If our enemy wishes simply to spread their goal via words and ideas, then we may simply need to unleash counter arguments proving why they are immoral and wrong.  If they upgrade from dialog to physically achieving their ends, then words are not sufficient anymore in stopping them — we need to act to defend ourselves and speak out against our enemy with moral righteousness.

So lets dive into the analogy in order to help apply this to our enemy in order to help us identify them.  For this analogy there is country X, and a certain group is in power, which we’ll call the Nazis.  Now these Nazis aren’t the Nazis of WWII.  There are a lot of similarities, and a lot of differences between the two groups.

They each have a book that inspires them and we’ll call it, “Mein Kampf” (or “My Struggle” in English).  Now this book in country X has different content than the book that inspired the Nazis during WWII.  Instead of race, this new book targets those who lack a certain set of outlined ideas, and those who hold contradicting ideas.  The old book talked about an Arian race ruling the world in a worldly utopia, the new book talked about a set of ideas ruling the world in a worldly utopia.

The Nazis of Country X support this goal of establishing their worldly utopia by supporting proxy groups representing this interest.  They support them with equipment, money, fighters, training, and most importantly moral sanctioning of their actions.  These Nazis have proxy groups in Lebanon and the Gaza Strip.  They now have officials in Iraq who support this interest.  Since the Nazis took power in country X, they have been staunch supporters of Al Qaeda too.  Other groups have since joined their cause who may or may not have any direct connection other than sharing the same goal, but these other groups view Country X as a shining example of how to act.

Country X and all of these groups have identified the United States as one of the biggest obstacles in establishing their utopia.  Relative to their moral standard the US is irredeemable because our mode of government and the values of our culture are incompatible with the rules established in their book, which to them is the most important thing in the world.  For them it’s either/or, either we go and they establish their utopia or we stay and their utopia is frustrated, which is an easy choice for them — we must go.

In their attempt to get us out of the way they have attacked us on multiple occasions: a US Embassy on 20+ occasions in different countries in 1979 x 2, 1983 x 2, 1984 x 2, 1987, 1998 x 2, 2002 x 2, 2004 x 2, 2006, 2008 x 2, 2010, 2012 and 2013; the World Trade Center twice in 1993 and 2001; Our naval ship, the USS Cole, once; countless occasions during our war in Iraq; and many other occasions foreign and domestic.  Needless to say Country X and those they support have been actively making good on their goals.

Given this analogy, identifying our enemy is a no brainer.  Our enemy is this country X.  Their ends are getting rid of us to establishing their world utopia.  Their means are physical via their proxies.  We need to destroy Country X in self-defense and we have the moral high ground to do so.

To now apply this analogy to today Country X is Iran, and their book is not Mein Kampf, but the Koran.

Our officials know the connections Iran has with their proxies and their actions. This information isn’t classified; it’s well know and all over the news over the years.  Even knowing this information, when our President declared war on terror, and threatened to take action against anyone who harbors or supports terrorists, he had the gall to ask Iran to join his coalition in this effort.  Of course they agreed in words, but their actions remain largely unbridled and they continue to become more daring, calling us “a paper tiger.”  To date, this name has been accurate.

We need to target Iran, but they are not the essence of our entire enemy in this war; they are only its biggest member and its symbol, much like we are the shining star of western civilization and its values.  Islam, the ideology driving their actions, is our enemy in the same sense that Nazism and Japanese Imperialism was our enemy in WWII.  I refer you to Robert Spenser’s works in understanding Islam as described by the Koran.

The territory of Iran and its people aren’t our enemy as such for the same reasons the Germans and Japanese and their territory wasn’t our enemy as such during WWII.  Remember, our enemy is people acting on their ideas that harm us.  Once they abandon their ideas and goals, they cease to be our enemy.

Muslims as such aren’t our enemy either because most Muslims’ beliefs are inconsistent with Islam.  I refer to them as non-Muslim Muslims and Bosch Fawstin wrote a good article on this subject, which is easily found using Google.

Muslims who are consistent with Islam, and therefore, wish to establish world caliphate, however, are our enemy because implied in this desire is our destruction.  This is identifying our enemy in essentially the same terms as identifying our enemy during WWII.  Our enemies during WWII were Nazis and Japanese Imperialists who wished to destroy us, and our enemy today is Muslims who wish to destroy us.  Targeting Muslims who consistently follow Islam is not racist, as some mistakenly have argued.  It would be just as racist as targeting the Nazis because Muslims and the Nazis are not a race; they are followers of a certain ideology.

Now that we have properly identified our enemies to be Muslims who are consistent followers of Islam all that remains now is to achieve victory against this enemy using the same standard of victory that we used in WWII.  Again, that standard is the complete demoralization of our enemy to the point where they abandon their cause as hopeless.

You may be wondering or even have some ideas on how this can be accomplished.  Again, refer to history to discover the answer.  Victory has been achieved by all out war resulting in our enemy’s connection of their continued action to their failure and destruction.  That means all we need to do is to make good on Bushes promise to take action against those who support and harbor terrorists (or identified now as consistent followers of Islam).

Here’s an example, when Al Qaeda and the Taliban took refuge in Pakistan, the Pakistani government wouldn’t remove them due to their self-professed “impotence” to control the area and they wouldn’t allow us to remove them either so as not to violate their sovereignty.  Pakistan cannot have their cake and eat it too.  Either they have the ability to maintain control over an area to possess sovereignty or they don’t have sovereignty.  In either case we have a right to destroy our enemies in that area without Pakistan’s approval and they better hope we think they don’t know what the word sovereign means.

The tactics and strategies used in destroying our enemies need to be decided by the leaders of our guardians — military leaders.  Their guiding principle, however, should be this: the most efficient means of achieving victory.

A quick word on collateral damage.  Collateral damage will occur, but the moral responsibility for these tragic outcomes rightfully rests on the group who initiates force, and not on those who are defending themselves against the aggressor.

Some strategists have said that collateral damage will create more enemies than we destroy.  Let’s refer to history to see if this assertion holds true.  We nuked two cities in Japan and the collateral damage was the greatest compared to any other attack in the world, and how many more enemies did we create?  None.  The Japanese today don’t hold any resentment, and if you look at a picture of today’s Nagasaki and Detroit next to each other, you’d begin to wonder which city was previously nuked.

There is a reason this action didn’t create more enemies — the utter demoralization of those who believed in Japanese imperialism and then realizing that their goals are hopeless and will lead to their own destruction.  They realized that the act in trying to achieve their goals had led them to this point; they blamed their goals and then rejected them.  That is the demoralization we need to strike in the hearts of todays enemies.

There is no causal link between collateral damage and the generation of more enemies, especially since the glaring example of the largest collateral damage in history not only didn’t create more enemies, but it eliminated all remaining enemies left on the battle field.  Had we not demoralized the Japanese to the point of abandoning their goal, however, you can bet nuking them would have created more enemies.

For these reasons, our major goal in achieving victory needs to be their complete demoralization of our enemy; not worrying about collateral damage.  Obviously we should not indiscriminately create collateral damage for its own sake.  And again such decisions in how to best demoralize our enemies need to be made by our guardians.

This is how we win the unwinnable war on terror.

This Could Be Us

At what point, or what is it going to take to get the uninformed (cons, libs, reps, dems, et al.) to see the gravity of our current trajectory as a nation. Our spending exceeds our revenue, which means we currently barrow money to function. It is difficult to visualize the amount of all three (our nation’s revenue, spending, and borrowing) without a visual aide.

The total debt our borrowing creates is so high that it’s difficult to visualize without the visual aide of skyscrapers.

The law of non-contradictions dictates that we cannot have our cake and eat it too. That means we cannot borrow money to spend it, and also have that money to pay back the debt. This also means there is a limit to how much our government can take from the economy (in the form of taxes) to optimize revenue and any more beyond that point reduces the revenue — we are likely beyond that point. People are hoping we haven’t reached that point and an increase in revenue — by 100% if we want to break even — will solve the issue. There are other options available beside everyone paying double in taxes across the board in return for nothing.

Assuming we want to pay down the debt, the options are as follows: spend less, print money, some combination of the first two which I will not discuss for brevity sake, or continue to do nothing.

If we go with option one, at some point our borrowing must stop and we must pay back our debt. That means our government will need to spend nearly half — if not more– of what it currently spends just to slowly (centuriesish) pay off the debt.

The alternative is to destroy our currency by printing money to pay off the debt. That means money would be worth practically zero, which will make everyone who doesn’t own objectively valued items (like a car, or gold, or a house, etc.) penniless, while the prices for services go through the roof. I’m talking people can’t even guarantee when their going to get their next meal. Any cash left in your hands would have more value as toilet paper or scrap metal than it would as currency — that’s why our government stopped minting silver dimes and quarters in 1974.  Who knows what would happen to our government, but the last time this type of inflation occurred in Germany, they found themselves ruled by the Nazi.  Who could blame them for wanting order from the mass chaos that ensued from a debauched currency?

The alternative to either of the first two choices, which are at least attempts to solve the problem, is to CONTINUE to do nothing. We will reach a point where we cannot physically meet all of the payments on our debt. When that happens our credit plummets like any other person who fails to make payment. That means the chances of someone lending us money at current interest rates drops to zero, if we can find a lender willing to lend us money at all. If we can’t barrow money, forget about it. We will be forced to cut our spending or print money (the first two options). If we continue to borrow at higher rates, this only delays the next time we fail to make payment… again. So if we haven’t lost the option to borrow before now, then the chances just went up — forcing us to options one or two. This process of borrowing and defaulting repeats until we proceed with options one or two or we have no more lenders left to borrow from and we are forced to options one or two.

Now if we have no intention to pay off the debt, we will still need to spend less since it’s safe to say no one will lend us money, or we need to print more money to keep up with spending. The first option will result in a similar outcome as option one above.  The second option will result in a similar outcome as option two above.  The only difference is that certain countries we owe money to may be required to go to war with us due to the impossible situation our permanent default puts them in (survival-wise). It won’t be too difficult to demonize us so that their populous wants our heads on a platter — their government will be all too happy to direct the angry attention of their masses away from themselves and use us as a scapegoat. I cannot guarantee we make it out of such a war since our permanent default will likely cripple both of our economies, and shear masses will mean everything in such a war.

So there you have it.  Without the ability of raising revenue, our choices ultimately are: we pay off the debt by spending less or printing money, or we permanently default and still spend less or print money. Out of the four, three will likely produce an outcome that will lead to our demise, which leaves us with one option that gives us a chance for a future — spending less money in order to pay down the debt.

I’ve suggested as convincingly as I can, for a couple of years now, that we need to limit government to its proper role of securing rights — and that’s it! This limitation is cheap and affordable. If we stayed at that limitation since 1776, the chances of such a state as we currently find ourselves in reduces to near zero — securing rights just ain’t that expensive. This limitation also gives us a decent out of our current situation — it allows us to pay down the debt by spending less money.

If not limiting government to an affordable size, then what is it that you would suggest? And remember, you cannot have your cake and eat it too.

Before you respond I have something I want some of you to consider. If you’re set on raising revenue, what if raising revenue isn’t possible over the long-run? Wouldn’t you want to know that bit of information? If you are wrong, and revenue cannot be raised to sufficient levels for the reason I stated, then you are essentially choosing the do nothing option, which will eventually force your hand anyway.

Fortunately, and yet unfortunately, one man and the philosophy he follows cannot destroy America alone; it is a metaphysical impossibility. This is unfortunate because the body politic of a society, on the other hand, is capable of destroying (or saving) America depending on the general philosophical principles that they hold and act upon. America’s fate is how important this topic and discussion truly is. Americans have a philosophical choice to make and America rests in the balance. Her fate will depend upon the aggregate choices every American makes — making no choice is one option, but that choice will not prevent any undesired or desired consequences. It will simply defer the conscious selection of America’s outcome to those willing and able to make this imperative decision.

To start this discussion, I will outline and describe the four philosophical categories — Metaphysics, Epistemology, Ethics, and Politics — that Barack Obama held during his 2008 Presidential campaign, which the body politic supported at that time as they voted him into office. I will then proceed to highlight the contradiction and provide a non-contradictory alternative. I am hoping that this distinction will aid your decision as to which philosophy to follow; for, man has no choice in possessing a philosophy. Man’s only choice regarding his philosophy is whether his philosophy is consciously weighed and rationally selected, or whether it’s a hodge-podge of random assimilations that his experience happens to expose him to.

Obama begins his belief in metaphysics with a reality that is non-objective. For example, he is quoted as saying, “…[W]e live in a… contradictory world.”[1] This seems simple enough, but Obama further complicates his belief when he says, “Citizens are required to engage in a process of testing their ideas against an external reality (emphasis mine).”[2] If reality is non-objective, then a logical person might ask, “What’s the point of testing ideas against reality”? Obama’s purpose in claiming that we live in a contradictory world seems to be only to describe that sometimes it’s contradictory and other times it’s not. This is convenient when one says contradictory statements and expects others to overlook it.

Obama’s beliefs in metaphysics direct his beliefs in epistemology. If we always lived in a contradictory world, then we could at least be certain about being uncertain, but since the world is sometimes logically consistent, then one cannot even be certain about their uncertainty. Obama says it best himself when he says, “I am robbed even of the certainty of uncertainty — for sometimes absolute truths may well be absolute.”[3] Because Obama believes certainty is not possible, reason must be impotent; therefore, he must reach out for other means to discover truth. It is clear that Obama selects feelings and instincts for discovering truth when he says, “…if I could reach those voters directly, frame the issues as I felt them, explain the choices in as truthful a fashion as I knew how, then the people’s instincts for fair play and common sense would bring them around (Emphasis is mine).”[4]

Obama’s beliefs in epistemology logically ties into his beliefs in ethics. If everyone were uncertain about everything, then how could anyone judge the morality of anybody else or how could anybody judge them? This is the foundational premise for moral relativism, especially when Obama says, “…[I]f… my notions of truth and goodness… are as true and good… as yours — then how can we ever hope to form a society that coheres?”[5] This “non-cohering society” is what Thomas Hobbes refers to as the war of all against all.

Obama’s belief in man’s natural state of war of all against all necessarily leads to his conclusions in politics — government intervention and constraint. Since men would naturally be at odds against one another given moral relativism, then the government must exist to settle this natural antagonism between men. Obama stated clearly several times that he wants government to do more and individuals to do less, to the point that it must be common knowledge by now. I am not sure to what extent his desire to grow government goes, but here’s an indicator: “Economies collapse despite the best-laid plans.”[6] That seems like a willingness to go beyond any limit imposed by reality or economics, because this argument suggests that the fault lies with reality and not the “best-laid plans.”

Obama’s contradiction arises from the very root of his beliefs, which undercuts and voids the rest of the philosophical framework that he follows. Contradictions do not and cannot exist. Nothing can be and not be at the same time in the same respect. The fact Obama thinks contradictions exist is simply his admission to the world that there are errors in his thinking. Contradictions may exist in wording, but not in reality nor conceptually. You will never find one in reality or conceptually and this law of non- contradiction holds true for all true principles. This is what binds ideas to reality.

If we live in a non-contradictory world, then we are free to discover it. Our means to discover truthful knowledge is reason, which is the non-contradictory integration of new information that we acquire through our senses with the rest of our knowledge. Just as our senses can never perceive a contradiction in reality because contradictions cannot exist, the integration of this information should not lead to a contradiction. So if we integrate that information correctly, then our knowledge is also non-contradictory.

Man is not infallible, however, for he is a volitional being. Choice is where the possibility of errors arises. Man is capable of selecting what he believes to be true or not and he can choose the method and standard he uses in determining what is true or not. Errors, therefore, can be made in what man considers true because errors can be made in the method he uses for determining truth. Common experience demonstrates this to all honest inquirers. Fortunately the process of obtaining knowledge through reason is self-correcting if an error is indeed made. The method of correcting errors is to identify and then resolve any contradictions in your thinking.

All knowledge is rooted in observation; therefore, one’s knowledge in ethics, if it is to be rationally validated must be rooted in observation. Our observation of reality and the application of reason force us to see that all living entities under normal conditions act in their self-interest. Plants obtain water, nutrients, and sun in the best proportions suitable for their life to the best of their ability. Unreasoning animals seek shelter, water and food in the best proportions suitable for their life to the best of their ability. As soon as their ability isn’t sufficient they die. Once dead no action is possible to them any longer; their body remains, but their life goes out of existence. Man must discover, unlike plants and non-reasoning animals, what is in his self-interest, and his means of discovery is his rational mind. Just as man may make errors in thinking, so he may make errors in what is rationally in his best interest; however, the process is self-correcting for the same reason all false ideas and principle are self- correcting when using reason.

If reality is non-contradictory, if truth is possible to man via reason, and if a rational ethical framework exists, then by life’s standard men can live harmoniously amongst one another so long as they secure their right to act on their rational judgment.

Rights are the proper ethics for man brought into a social/political context. It is their individual requirement of life, but translated into conditions that involve other men. Men act to secure rights because their wellbeing requires that their rights be secured. The means to secure rights is banding together in self-defense — i.e., instituting a government amongst men.

Rights are unalienable and will remain unalienable because man’s interests will always require that they are un-obstructed in a social/political context. The initiation of force against other men works directly against their ability to act in their rational self-interest and it forces them to act or not to act regardless of what their judgment may conclude. Securing rights prevents the initiation of force, thus allowing men to peacefully reason with one another to achieve common goals. This is the natural harmony between rational men.

Men may make errors in thinking and act to violate another’s rights. If this were not the case, then self- defense would have never been conceived in the minds of men. The police exist to neutralize violators of rights domestically, the courts exist bring those who succeed in violating rights to justice, and the military exists to neutralize the violators of their citizen’s rights that reign from foreign forces.

It is important to note at this point, when comparing the two alternatives, that neither set of ideas are original; some of them can be dated as far back as Plato. These philosophical frameworks, however, when assimilated by a society guides that society in a noticeable direction for better or for worse. For example, the classical Greek civilization was driven by Aristotle’s metaphysics (objective reality) and epistemology (reason), which lead to enlightenment and grand achievements in math, science, and art. During the dark ages in Europe, however, Plato’s metaphysics (man’s mind is disconnected from actual reality so who knows what reality truly is) and epistemology (uncertainty or revelation) ruled that society’s beliefs, which lead towards darkness and deterioration. In the 1400s Thomas Aquinas reintroduced Aristotle’s epistemology into European society; it resulted in the renaissance, which I like to think of as the rebirth of reason, and all the natural consequences that go with such a belief — enlightenment and achievement. Our society at present is at this critical juncture again: it’s either going to be Aristotle, the enlightenment and achievement, or Plato, darkness and deterioration.

This brings us back to the main point — America’s fate and the choice you hold. The choice before you, my fellow Americans, lies in this: will you learn from history and move towards enlightenment and achievement or are you willing to surrender the fate of America to those who think that “economies collapse despite the best-laid plans”?
More Obama quotes that supports conclusions reached in this paper regarding the pilosphy he follows can be found here.

———————
[1] The Audacity of Hope by Barack Obama, ©October 17, 2006, pg. 56
[2] The Audacity of Hope by Barack Obama, ©October 17, 2006, pg. 92
[3] The Audacity of Hope by Barack Obama, ©October 17, 2006, pg. 97
[4] The Audacity of Hope by Barack Obama, ©October 17, 2006, pgs. 17 and 18
[5] The Audacity of Hope by Barack Obama, ©October 17, 2006, pgs. 86-87
[6] The Audacity of Hope by Barack Obama, ©October 17, 2006, pg. 36

I started reading Barack Obama’s book, “The Audacity of Hope: Thoughts on Reclaiming The American Dream,” (TAoH) and I discovered something I did not expect — a logically consistent philosophy. The foundation of this philosophy, however, is based on a false principle. The nature of false principles is that they logically sprout into false corollaries. So Barack Obama’s philosophical framework may be consistent, but it will be consistently false.

It is not one man and his philosophy that’s destroying America; that’s impossible, which is fortunate for mankind in general if you could picture what the world would be like if it wasn’t impossible. It is never one man that drives a nation toward destruction. Take Adolf Hitler for example, he wasn’t the only one in Germany to believe in what he was saying. As for America’s case, the fact that Barack Obama was voted into public office by a majority of voters indicates that the ideas Barack Obama represents resonates with the majority of Americans. A majority of the population holding false principles, in a consistently false philosophical framework, can and will destroy a nation whether it is German or America. It would destroy any nation.

The purpose of this paper is to challenge those false notions that seem to resonate with the majority of Americans in order to break their appeal and suggest an alternative philosophical framework that is based on a true principle and is also logically consistent throughout its corollaries. The method I will use to accomplish this is to quote Barack Obama’s own words in order to describe his philosophy; then I will prove that the principles are false by highlighting contradictions. Finally I will proceed to provide a non-contradictory alternative.

Let us begin with the basic outline of Barack Obama’s philosophical framework:
Metaphysics: non-objective reality, “…we live in a… contradictory world.” (pg. 56, TAoH)
Epistemology: Uncertainty, “I am robbed even of the certainty of uncertainty…” (pg. 97, TAoH)
Ethics: Relativism, “…my notions of truth and goodness… are as true and good… as yours…” (pg. 87, TAoH)
Politics: Bigger Government, “getting more things done.” (pg. 3, TAoH)

Let us continue with a more detailed breakout of the outline.

Metaphysics:
These are quotes from Obama that supports what I have identified as his metaphysical beliefs:

  • “It is precisely the pursuit of ideological purity… that keeps us from finding new ways to meet the challenges we face as a country.” (pg.40, TAoH) Ideological purity meaning logical consistency in this context; logical meaning non-contradictory.
  • “…maturity to balance idealism with realism.” (pg. 42, TAoH) In this context he attempts to divorce ideas with reality. This suggests there can be no logical consistency between ideas and reality.
  • “At times our values [of individualism and communal values] collide…” These “tensions arise not because we steered the wrong course, but SIMPLY because we live in a contradictory world. (emphasis mine)” (pg. 55-56, TAoH) This again highlights that ideas cannot be consistent with reality.
  • President Obama has this to say about President Lincoln’s hard choice in initiating the civil war: it “was a matter of maintaining within himself the balance between two contradictory ideas…” (pg. 98, TAoH) Again suggesting that contradictions are a part of life and reality.

No sane person explains that we “live in a contradictory world,” without paying lip service to a non-contradictory world.

  • “citizens are required to engage in a process of testing their ideas against an external reality.” (pg. 92, TAoH) What good would any test of reality be if the results were contradictory because of a contradictory world?
  • When receiving advice from potential Mentor within the senate, Barack Obama discovers that “Most of the advice [he] found useful; occasionally it was CONTRADICTORY (emphasis mine).” (pg. 73, TAoH) The implicit understanding is that contradictory information is false or useless. So it is clear that Barack Obama understand that the world is not always contradictory and contradictions mean that something is false.

His purpose in claiming that we live in a contradictory world seems to be only to describe that sometimes it’s contradictory and other times it’s not. This line of thinking is useful when one says contradictory statements and expects others to overlook it.

Epistemology:
His beliefs in metaphysics lead to his beliefs in epistemology. If we always lived in a contradictory world, then we could at least be certain about being uncertain, but since the world is sometimes logically consistent, then one cannot even be certain about their uncertainty.

  • “I am robbed even of the certainty of uncertainty – for sometimes absolute truths may well be absolute.” (pg. 97, TAoH)
  • “…all of us are imperfect and can never act with the certainty that God is on our side; and yet at times we must act nonetheless, as if we are certain.” (pg. 98, TAoH)
  • He is very clear that he doesn’t know, “This isn’t to say that I know exactly how to [change our politics and civic life]. I don’t.” (pg. 9, TAoH) Let us take him at his word, and find somebody who does know.
  • “I offer no unifying theory of American government… Instead what I offer is… my own best assessment — based on my experience as a SKEPTIC … (emphasis mine)” (pg. 9, TAoH) Skeptics are historically doubtful of everything. Skepticism is the result of absolute uncertainty.
  • “… [the process of making law in America] suggests that both our individual and collective judgments are at once legitimate and highly fallible.” (pg. 93, TAoH) Is it that difficult to see that such reasoning is driven by uncertainty? Barak Obama continues:
    • “…the process of making law in America compels us to entertain the possibility that we are not always right and to sometimes change our minds;” (pg. 93, TAoH) by what standard should we change our minds? None is given or suggested — just doubt yourself.
    • “[the process of making law in America] challenges us to examine our motives and our interests constantly,” (pg. 93, TAoH) but it does not challenge us to examine the logic within our reasoning?

Because uncertainty is epidemic and reason is helpless to save us, he reaches out for other means to discover the truth. The means he chooses are feelings and instincts:

  • “I find myself returning again and again to my mother’s simple principle — ‘how would that make you FEEL?’ — as a guidepost for my politics… Like any value, EMPATHY must be acted upon. (emphasis mine)” (pg. 67-68 TAoH)
  • “…if I could reach those voters directly, frame the issues as I FELT them, explain the choices in AS TRUTHFUL a fashion as I knew how, then the people’s INSTINCTS for fair play and common sense would bring them around.” (pgs. 17, 18)
  • “the Constitution envisions a road map by which we marry PASSION to reason… (emphasis mine)” (pg. 95, TAoH) Reason is too noble to be influenced and compromise with passion — passion can follow reason, but reason can never follow passion or it ceases to be reason.
  • “[Bill Clinton] INSTINCTIVELY understood…(emphasis mine)” (pg. 34, TAoH)

If I believed such tripe, I would be uncertain about everything too, especially if I had no correct method of thought to guide me and I relied on feelings and instincts. Fortunately we do have a correct method: that method is reason as defined as the non-contradictory integration of information provided by our precepts into the whole of our knowledge and experience.

Ethics:
His beliefs in epistemology consistently ties into his beliefs in ethics. If I was uncertain about everything, then who am I to judge the morality of others and who are they to judge me? This is the foundational premise underlying moral relativism:

  • “…if… my notions of truth and goodness… are as true and good… as yours — then how can we ever hope to form a society that coheres?” (pg. 86-87, TAoH) This is what Thomas Hobbes describes as “the war of all against all,” for which Hobbes proposes a solution — “…men would form governments…” (pg. 87, TAoH) This state of war is the natural state of men, were it not for governments — so says Hobbes (and now Barack Obama).  This belief is the sanction for government’s involvement in all of man’s dealings.

Politics:
His beliefs in ethics consistently lead to his conclusions in politics. Since men would naturally be at odds against one another, then the government must decide. It is fairly clear that Barack Obama wants government to do more and individuals to do less:

  • “…[Americans] wanted clean air, clean water… and… they wanted to be able to retire… children should be able to go to college even if their parents aren’t rich”, and “THEY FIGURED GOVERNMENT SHOULD HELP (emphasis mine).” “…I knew once again just why I’d gone into politics.” (pg. 7, TAoH)
  • “…government spending and regulation could serve as vital ingredients… to market growth, and… could help promote social justice.” (pg. 34, TAoH)
  • “…government has a role to play in promoting opportunity and prosperity for all Americans…” (pg. 40, TAoH)
  • “Sometimes only the law can fully vindicate our values…” (pg. 62, TAoH)
  • “…one of the things that makes me a democrat…” is “this idea that our communal values, our sense of mutual responsibility and social solidarity, should express themselves… through our government.” (pg. 63, TAoH)
  • “…I also believe that our government can play a role in shaping… culture for the better…” (pg. 63, TAoH)

I do not know for sure that this desire to expand government has a limit, but here’s an indicator:

  • “Economies collapse despite the best-laid plans.” (pg. 36, TAoH) That seems like a willingness to go past any limit imposed by reality or economics, because the argument suggests that fault lies with reality and not the “best-laid plans.”

No American politician talks about central planning without paying any lip service to the rights of man — knowing, if not consciously then subconsciously, that central planning requires the violation of rights.

  • Obama quotes part of the preamble of the Declaration of Independence (pg.53, TAoH), but stops short of the most essential part, with regard to the purpose men establish government in the first place: “…That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.” (DoI)
  • Barack Obama claims that the idea of UNALIENABLE rights is the “substance of our common creed.” (pg.53, TAoH) Then he explains that “individual rights are almost entirely SUBJECT to the self-restraint of [government members], (emphasis mine)” (pg. 53, TAoH) thus contradicting our common creed. Rights are either unalienable or not.
  • He clearly doesn’t think much about securing rights as the legitimate purpose of government when he states, “The legitimacy of our government… depends on the degree to which [self-reliance, self-improvement, risk-taking, drive, discipline, temperance, hard work, thrift, and personal responsibility] are rewarded.” He uses this standard of legitimacy to smuggle in “equal opportunity” and social justice, which necessarily snuffs out rights. (pg. 54-55, TAoH) The security of rights and organized injustice — i.e., equal opportunity and social justice as Barak Obama defines them — cannot exist within the same government action.
  • He then goes on to explain that “…laws constraining liberty…” are legitimate so long as they, “…are uniform, predictable, and transparent…” (pg. 87, TAoH) The germ leading to this conclusion is egalitarianism. Equality of misery will be the only thing this accomplishes.

He succeeded in adhering to a philosophy that pays lip service to unalienable rights, and then proceeds to completely eliminate the idea with contradictions. This is very consistent with his metaphysical beliefs. He proceeds to justify his violation of rights with his understanding, or should I say misunderstanding, of the U.S. Constitution:

  • The statement, “…individual liberties… enshrined in our Constitution…” (pg. 86, TAoH), clearly indicates a misunderstanding of the purpose of our Constitution. Take a look at the wording within the Constitution yourself; the object under focus is the federal government. The Constitution was designed and built to form and limit the legal activities of the federal government — not its citizens. Do not confound identifying preexisting rights and limiting the government’s legal actions around them, which is clearly written within the Constitution, with establishing new rights for its citizens.
  • “I have to side with Justice Breyer’s view of the Constitution — that it is not a static but rather a living document, and must be read in context of an ever-changing world. How could it be otherwise?” (pg.90, TAoH) I’ll answer that. Like most contracts the terms of the agreement are between two or more parties — in this case the People, their States and the proposed Federal Government. These terms cannot change until the contract is changed. There is no living and breathing terms of agreement possible here. Do not confound the amendment process with what Barak Obama is advocating — the former is a process for the different involved parties to adjust the contract and the later is the evasion of identifying any terms within the contract.
  • Another error is Barack Obama’s failure to understand why “[the Constitution] provided no protection to those outside the constitutional circle.” (pg. 95, TAoH) The Constitution is a contract between the citizenry, the States and the Federal Government. How can any contract extend beyond its participants? My best guess is that Barack Obama doesn’t know that the Constitution is a contract or he doesn’t understand the use and limits of contracts.
  • He gives examples of the Constitutional text “lacking” context and uses that as an excuse to alter the terms within the Constitution: “The constitutional text provides us with general principle that we aren’t subject to unreasonable searches by the government. It can’t tell us the founder’s specific views on the reasonableness of an NSA computer data-mining operation.” (pg.90, TAoH) Yes, yes, the founders we so smart as to create the best form of government the world has ever seen, but they never gave us a standard for reasonableness. How little he must think of them and their work — i.e., the Constitution. I would alter the context of the Constitution too if I thought like he did about our founders’ ineptness. Well if you read the fourth amendment a little further, then you will see what is considered unreasonable: unreasonable is anything without “probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.” (US Constitution) A few qualifiers for a reasonable search are probable cause, which means any evidence to suggest, along with at least one witness to observe the evidence, and a very narrow or specific location to search for the evidence that was seen. Nothing is lacking here.
  • Here is another Constitutional text “lacking” context provided by Barack Obama, “The constitutional text tells us that freedom of speech must be protect, but it doesn’t tell us what such freedom means in the CONTEXT of the Internet (emphasis mine)” (pg. 90, TAoH). Besides the blatant falsehood surrounding the idea that “the constitutional text tells us freedom of speech must be protected,” the context involving the medium of speech is irrelevant. The first amendment actually says, “Congress shall make no law… abridging the freedom of speech.” (US Constitution) The first amendment clearly limits government action rather than calling it to action regarding speech. That being said, it is clear now that any speech being conducted on the Internet doesn’t change a thing with regard to government action — no action is granted or authorized.

I have no degree in constitutional law, and Barack Obama does — what kind of nonsense is being taught to the “experts” if I have to point out the obvious contradictions in their thinking?

I’ve highlighted the philosophy guiding Barack Obama’s thoughts and actions. I even pointed out some of its falsehood by identifying some of the philosophy’s contradictions. Now, I will briefly point out the rest of its errors and offer an alternative.

Metaphysics:
The errors in this category of Barack Obama’s philosophy go without saying. Contradictions do not exist and cannot exist. Nothing can be and not be at the same time in the same respect. The fact he thinks contradictions exist is simply his admitting to the world that there is an error in his thinking.

Contradictions may exist in wording, but not in reality or conceptually. For example I might say a leaf is all red and all green at the same time. The contradiction is obvious; the leaf is green and not green at the same time and red and not red at the same time. The respect in this case is the color. Though it may be said in written or verbal words, it cannot, however, be the case in reality or conceptually. Can you conceptually think of a leaf that is all red and all green at the same time? All honest people will answer no. You will never find one in reality either.

This law of non-contradiction holds true for any true principle. This is what binds ideas to reality.

Epistemology:
Uncertainty arises out of an uncertain reality, but since reality is certain and non-contradictory then so can be your knowledge of reality. Additionally, an appeal to instinct and feelings are not a means to discover knowledge. Can you instinctually determine a coin flip? No? How about while using your feelings? Again, no. There is a certain means, however, of determining a coin flip: using your own eyes to determine for certain if it landed heads or tails. This is the simplest case, but no matter the complexities leading to truthful knowledge the essentials are the same: if an idea is true, then it must be consistent with reality and experience. All truthful ideas can be reduced back to simple observations because observations are our direct connection to reality.

If we live in a non-contradictory world, then we are free to discover it. Our means to discover truthful knowledge is reason, which is the non-contradictory integration of information, that we acquire through our senses, with the rest of our knowledge. Just as our senses cannot ever perceive a contradiction in reality because contradictions cannot exist, the integration of this information should not lead to a contradiction. So if we integrate that information correctly, then our knowledge is also non-contradictory.

We are volitional beings so we have the ability to choose between alternatives where a choice is possible. These choices range from beliefs to actions. This is where the possibility of errors arises. We can select what we believe is true or not. Errors can be made in what we consider true and errors can be made when we attempt to reason. Common experience demonstrates this to all honest inquirers. We have all made a mistake at one point in what we think is true, or at least the less honest among us will agree that we have observed others make that mistake.

Fortunately the process of obtaining knowledge through reason is self-correcting. Humans are fallible, and if we error, the error is in our integration for we accepted a contradiction somewhere in our thinking. The error can never be with reality or our senses because the process that makes our senses work (or don’t work) and reality itself functions independent of our volition; they cannot accept or produce a contradiction. Therefore, if you think you’re facing a contradiction, then check your previously integrated information — i.e., check your premises. One of your integrations will be wrong — i.e., it will be inconsistent with reality.

Ethics:
Our observation of reality and the application of reason force us to see that all living things under normal conditions act in their self-interest. Plants obtain water, nutrients, and sun light in the best proportions suitable for their life to the best of their ability. Unreasoning animals seek shelter, water and food in the best proportions suitable for their life to the best of their ability. As soon as their ability isn’t good enough they die. Once they die, then no actions are possible anymore. Man must discover, unlike plants and non-reasoning animals, what is in his self-interest, and his means of discovery is his rational mind. Just as he may make errors in thinking, so he may make errors in what is rationally good for him; however, the process is self-correcting for the same reason all false ideas and principle are self-correcting when using reason.

This idea, if true, blasts an irrecoverable hole in notion of moral relativism.  It suggests that an objective rational morality exists for man and can be discovered using reason.  This also eliminates the logical consequence of moral relativism: man’s natural state is war.  This notion suggests that there is no conflict of interest between rational men; they can live in harmony.

Politics:
If, as Barak Obama suggests, men are incapable of being certain, moral relativism reigns and constraint is necessary, then I have a few questions (proposed by Frederic Bastiat) for those men who wish to apply for roles within the suggested authoritarian government:

  1. Has anyone identified a satisfactory form of constraint?
  2. Can that person convince the mass amount of people who give preference to other forms of restraint?
  3. Will all men be able to give into that form of constraint, which in theory runs against all individual interests?
  4. Assuming that men will allow this new restraint to rule them, what will happen if an inventor discovers a different and better form? Are we to remain consistent, knowing our situation to be more vicious than it has to be, or are we to change our organization every day according to the caprices of fashions and utility that inventors’ brains may dictate.
  5. Wouldn’t the rest of the inventors, whose plans were rejected, united together against the one that has been selected? Wouldn’t their success be to the degree that the selected plan ran counter to individual interests?
  6. Last of all, does any human force or capability exist that is able to overcome the antagonism between all men that we suppose is natural and the very source of human action?

Frederic Bastiat continues: “Imight multiply such questions ad infinitum, and propose, for example, this difficulty:

“If individual interest is opposed to general interest, where are we to place the active principle of Constraint? Where is the fulcrum of the lever to be placed? Beyond the limits of human society? It must be so if we are to escape the consequence of your law. If we are to entrust some men with arbitrary power, prove first of all that these men are formed of a different clay from the other mortals; that they in their turn will not be acted upon by the fatal principle of self-interest; and that, placed in a situation that excludes the idea of any curb, any effective opposition, their judgments will be exempt from error, their hands from rapacity, and their hearts from covetousness.

“The radical difference between various Socialist schools (I mean here, those which seek the solution of social problems in artificial organization) and the Economist school, does not consist in certain views of detail or of governmental combination. We encounter that difference at the starting point, in a preliminary and pressing question: Are human interests, when left to themselves, antagonistic or harmonious?” (Harmonies of Political-Economics: Book I)

If reality is non-contradictory, reason is possible to all men and a rational ethical framework exists, then, by the standard of life for rational men, men can live harmoniously amongst one another so long as they secure their right to act on their rational judgment.

Man is capable of functioning in isolation and survives quite well. It is rationally in his better interest to work with other men to achieve common values, which would not be possible otherwise; like building structures, achieving technology, or more generally put: division and economy of labor. Man can achieve more values that further his life by dividing up the work load and trading each other’s achievements.

Rights are the proper ethics for man brought into a social/political context. It is their ethical requirement of life, but while living with other men. Men act to secure rights because their life requires that their rights are secured. The means to secure rights is banding together in self-defense — i.e., instituting governments among men.

Rights are unalienable and will remain unalienable because man’s life will always require them in a social/political context. Initiation of force against other men works directly against their ability to act in their rational self-interest and prevents any ethical actions — it forces men to act or not to act against their reasoning and judgment. Securing rights prevents the initiation of force, thus allowing men to peacefully reason with one another to achieve common goals. This is the connection between ethics and politics. This is the natural harmony between rational men.

Men may make errors in thinking and act to violate another’s rights. If this were not the case, then self-defense would have never been conceived in the minds of men. The police exist to prevent violations to rights domestically and the courts bring those who succeed in violating rights to justice. The military exists to prevent the violation of rights from foreign forces.

To sum up our journey, a correct and consistent philosophy is needed to replace Obama’s so that America can avoid destruction. The one that seems most likely to succeed in saving America is as follows:

Metaphysics: Objective Reality: Contradictions do not exist.
Epistemology: Reason: our means to eliminate contradictions in our thinking.
Ethics: Rational Self-Interest: all livings things must act in their self-interest; man must rationally act in his.
Politics: Secure Rights: governments are instituted by men so that man is safe to act in his rational self-interest in harmony amongst other men.

(Note from author: I have recently been convinced that fractional-reserve banking, though it’s a bad idea, should not be outlawed.  The government should not outlaw bad ideas unless fraud or another for a violating rights is involved.)

 

In order to understand the Federal Reserve (FED), you need to understand credit expansion and the banking systems, which is full reserve and fractional reserve banking.  In order to understand the banking systems, you need to understand the nature of wealth and money, and their differences.

Money does not equate to wealth, or put slightly differently, money is not wealth .  If money was wealth, then why does printing money not increase the total amount of wealth in our society?  Sure, money can be traded for items that satisfy our needs or wants of utility, but as is, the paper is not useful — it’s only potentially useful.  What money represents — e.g., things that satisfy our needs and wants of utility — is useful, which is money’s source of value.

Money is simply a tool of exchange and a means of saving — i.e., the postponement of consumption.   Wealth is the goods you have at your disposal, which will satisfy your needs or wants of utility — i.e., wealth is your standard of living.  The wealthier you are the more you have at your disposal.

The implications behind the meaning of money — as a tool of exchange and a means of saving — are that to possess money you must have produced something of value and passed on your disposal of it to someone else in exchange for an IOU on society — the trade isn’t complete until you trade that IOU for something you need or want.  In essence, you’re bartering and exchanging what you produced for something you haven’t produced — money is simply the median or the “middle-man.”  Money has value but it doesn’t represent a static standard of wealth.

Think of the errors that one might conclude if one equates wealth to money consistently to that end:

1.  Wealth can be produced by reproducing money

2.  Wealth is only as static as the amount of money that exists, which leads some to assume wealth is static

3.  Since wealth is static, then it’s only fair to redistribute it evenly (a common argument)

4.  Profit is exploitation and wealthy people must have exploited the poor (another common argument)

5.  The exchange of money means one benefits at another’s expense

6.  Exporting is good because it brings in money, and therefore, wealth (another common argument)

7.  Importing is bad because it sends money out, and therefore, it drains our wealth (another common argument)

8.  Money just sitting on a table does not multiply; therefore, lending money cannot multiply wealth; therefore, lending money at interest is charging for something money has no ability to produce — more money; therefore, money should be lent at no interest, otherwise it’s exploitation (not an uncommon argument)

People in our society also tend to equate the dollar value of an item as its worth — another error.  Let’s say an item produced was originally $8 per unit.  Now let’s say that half of the items were destroyed — the unit may now be closer to $16.  Instead, let’s say that the money supply reduces by half — the item may now be closer to $4.  In the first case the item’s value relative to demand went up, and in the second case the value stayed the same relative to demand, but the price went down — the value of money fluctuated.  (We are assuming of course that the effects of inflation were instantaneous).

There are many reasons for the value of money to fluctuate.  For example, we could create more money, it can be destroyed, people’s interest in it could change, more things are produced, fewer things are produced, and probably more variables have a play (like foreign currency) than what I have listed.  (A speculator’s sole purpose is to predict these fluctuations and act on those predictions).  People’s desire is hard to predict, which means desire would be hard to predict for any kind of currency whatever; therefore, let’s limit the scope of our study to the aspects that cause fluctuations that can be predicted — like production and the creation of money.

Let’s first analyze what different effects that fluctuating currencies has on wealth.  Gold is a great place to begin our study because, compared to fiat money, gold has a relatively static quantity.  We’ll then shift our focus to fiat money because it contains a lot of the same principles as gold, but in addition to those, fiat money can rapidly multiply.

Given our study, the only real means for gold’s value to fluctuate is a change in the production of goods.  If production increases, then deflation takes hold, which means the value of gold goes up (relative to goods) because you can buy more with the same amount of gold.  If goods and production are destroyed, then inflation takes hold, which means the value of gold goes down (relative to goods) because you are able to buy less than before.

What happens to the treatment of gold as its value decreases? People tend to exchange more of it for goods because a certain amount of gold does not go as far as it used to; therefore, people pay more to receive the same about of goods.  The less gold is worth, the more people prefer goods over gold.  One can anticipate a threshold for the use of money — i.e., men in society have to reach a certain level of production, which isn’t much, to warrant the use of money over barter.

Who are the winners and losers if the devaluation of gold occurs?  The wealth in savings decreases along with gold — savers lose.  The total amount of goods decreases, and therefore, so does the standard of living  — everyone loses.  Because the standard of living decreases, people are less able to store their money in banks — the banks lose.  Does anyone win in this case?  I don’t think so; I can’t think of anyone who benefits.  Maybe those who take out loans benefit by paying back the loan with less valuable money than they borrowed, but that’s isolating a particular situation of the borrowers whole life; his standard of living will decrease with everyone else’s.  Even if someone ends up better off than before, they would be even better off if devaluation did not occur.

What happens to the treatment of gold as its value increases?  People tend to exchange less of it for goods because a certain amount of gold goes farther than it used to; therefore, people can buy the same things with less gold leaving them with change in their pocket.  The more gold is worth, the more people prefer gold over goods.

Who are the winners and losers if the value of gold increases?  The wealth in savings increases along with gold — savers win.  The total amount of goods increases, and therefore, so does the standard of living — everyone wins.   People are able to save more money and borrowers pay back loans with more valuable money — the banks win.  (Sure, borrowers need to work harder to pay back the loan, but that’s no different than paying interest).  Some people will lose, but only on their own efforts and risk to capital.

To sum up, a gold currency will tend to guide self-interest people towards production and savings making everyone a winner.

Shifting our attention towards fiat money; it has all the fluctuations of gold (as mentioned above) except in addition to those fluctuations, its value can fluctuate easily by reproducing or destroying it.  Since the destroyer of fiat money is the sole loser, however, we can assume no one is that self destructive; therefore, we can limit our focus solely on situations covering the production of fiat currency.  In order to isolate the effects of printing money, we need to consider a scenario with static production, meaning the same products are produced every year.

To begin, as one spends freshly printed money, he removes from society the product of their labor without reciprocating.  This causes more money to exist than what goods have been produced; therefore, the more money you print and spend, the lower its value will become due to inflation.

Inflation is not instantaneous because it takes awhile for its effects to propagate.  The information only propagates as the money exchanges hands.  For example, one can print a pile of money in their basement, but until they spend it the effects will be contained in his basement. Why is this?  Because the printer of money hasn’t made a claim on society by spending that money; it’s not until he removes goods from society without producing goods that society finally begins to realizes there are less goods than before (relative to money).  T he first recipient of freshly printed money may not know the money he’s receiving is printed, but after several exchanges people will adjust their prices when more demand for goods (relative to money) increases.  On the other side of the exchange, the first user of freshly printed money extracts its full value before inflation, but as the exchanges continue, the value extracted decreases as inflation increases.

Who are the winners and losers when money is printed?  The printer of money obviously benefits by being able to consume goods without producing them; however, this causes a strain on everyone who does produce equal to or more than they consume because the printer of money consumes what they have produced — everyone else loses.  The individuals who save money lose wealth in their savings as the value of their money is redistributed into the new total of money — they lose.   Those who take out loans benefit more than savers in the short run because the money they use to pay off the loan is worth less than the money they borrowed; however, in the long run their standard of living decreases with everyone else’s.   There is a point where the standard of living suffers so much that one is unable to pay off a loan and buy sustenance — i.e., their life is no longer self-sustaining. These borrowers go bankrupt, thus consuming the goods of society (spending the loaned money) without producing (not paying off the loan) — they join a similar status as printers on money.  So those who benefit the most are the printers of money and the borrowers of money  (for the short term) — neither of which produced anything for the privilege of spending money– while everyone else suffers.

We now know the different causes of fluctuations in the value of money that can be controlled, which means we discovered enough context to continue onto the banking process; and after that, the Federal Reserve.

Given a static value for currency, let’s see what purposes or value a bank provides.  If men had the ability to keep all their money on their person, then the necessity of banks goes down.  If men could secure their money better than banks, then the value in using a bank goes down.  Since men have trouble keeping all of their money on them securely, banks have value.  This is why men uses banks; for security and ease of use.

The first banks that were used kept money in a vault, and they never lent any of that money out; that type of system is called full reserve banking where 100% of the deposits are kept in their reserves (AKA their vault).  Banks were able to stay in business because they earned money for securing its members’ money — people would pay the banks to secure their money.  The banks would also lend out money that they owned at interest.  At times, they even acted as middlemen between one of their depositors and a borrower and earned some sort of commission on that money.  Full reserve banking does not cause the value of money to fluctuate because it doesn’t reproduce money nor does banking in and of itself produce enough goods to change the value of money — it just secures the principle of property rights ensuring property owners keep their property.

A second system of banking is called fractional reserve banking, and, as the name sounds, the bank is able keep less than 100% of their deposits in reserve, which means the banks can lend out depositors’ money at interest without their knowledge.  The depositors no longer have to pay banks to secure their money because the cost is paid by the interest earned on the lent money; in fact the bank earns so much money that they pay the members for storing their money in their bank.  This banking system causes the value of money to fluctuate, so this warrants further analysis.

The essential difference between the two systems that causes the value of money to fluctuate under fractional reserve banking, but not under full reserve banking, is that for full reserve banking the lender losses access to their money when a loan is created.  For fractional reserve banking, however, loans are made without any lender losing access to their money .  It is important to understand this difference and its full implication because without doing so would mean increasing your risk of making bad evaluations in your conclusions based on this information — like people often do after they equate money to wealth.  First let’s further understand the difference before we get into its implications.

For full reserve banking, when a loan is made the lender sees the money leave his account along with a place holder (or an IOU) for that money; the person taking out the loan has the money along with a negative place holder.  Each place holder and money, or lack of money, counter balances each other — i.e., money with a negative place holder, and lack of money with a place holder cancel each other out.

For fractional reserve banking, however, the bank sees the lack of money along with a place holder, while the person borrowing the money sees the money along with a negative place holder — seems equivalent to full reserve, doesn’t it?  Well, not quite.  Where does the bank get the money to lend?  Is that their money?  It can be, but more than likely that money comes from a depositor.  (It doesn’t matter if the bank uses $100 from one depositor or 10,000 pennies from 10,000 depositors — the essentials are the same regardless of the break down).  What place holders or money transfers do the depositors see?  The answer is none — they see 100% of their money in their account.  Is this a problem?  You bet it is — it’s the root contradiction which causes secondary and tertiary effects down the road.

A contradiction follows the formula of something that is and is not at the same time in the same respect.  Well in the fractional reserve bank’s example, the depositor’s money is his (as displayed in his account) and is not his (as displayed in someone else’s account) at the same time (from the initiation of the loan until it’s paid off) in the same respect (as seen in an account) — the very definition of a contradiction.  It is inessential that the banks have not named one depositor they’re taking from when they take from the pool of money in their vault  — that money came from somewhere and doesn’t eliminate the contradiction.  It is inessential that the lender puts collateral up against the loan to counteract the risk of default — it doesn’t eliminate the contradiction.

The contradiction is the single piece of essential information because contradictions cannot exist and every attempt to bring a contradiction into existence has resulted in some sort of annihilation.  For example, think of the results of carrying out polices based on equating money to wealth — e.g., you seek to print more money, you wage war to confiscate money, you eliminate trade as people attempt to sell their products and boycott yours and vice versa, etc.  It eventually results in the annihilation of whatever value you were trying to create — i.e., money and societies lose their value.  In the case of fractional reserve banking, as we will discover, the results are the same — i.e., the retardation of wealth at best and destruction of wealth at worst.

(This particular contradiction within fractional reserve banking is also a violation of property rights, where property is necessarily singular ownership — i.e., one thing one owner.  For fractional reserve banking, multiple owners exist for a single thing — i.e., depositors and borrowers own the same dollar.  Of all the economic reasons I’ll go over in explaining the perils of fractional reserve banking, it is the argument for securing property rights that should be sufficient to a free society, that has any interest in remaining free, in ceasing the act on moral grounds and making it illegal).

In full reserve banking, the amount of claims (potential claims) on society are never greater than (and are actually equal to) the amount produced — i.e., the producer lends his claim on society in exchange for interest, which is paid by the borrower.  In fractional reserve banking, however, you have greater claims on society than what has been produced because you have producers who do not lend their claim on society, and you still have borrowers who acquire a claim; this creates a lag effect, where claims on society increases faster than what is produced.  Where did the increase in claims come from?

So how did the banks succeed in creating a contradiction if they cannot exist?  How is it that the depositor’s money is and is not his at the same time in the same respect?  I’ll I’ve you a hint, a contradiction cannot exist.  When you think you’re facing a contradiction, check your premises; you’ll find that one of them is wrong.

Our essential premises are that the depositor still has access to his money and that the money supply did not multiply.  We know that bank runs can occur, which leads one to suspect the former.  We also know that the depositor can use his money (under normal conditions), which leads me to suspect the later.  The truth is that both premises are false under different contexts, and both are never true at the same time.  The double contradiction only serves to further conceal the contradiction — it allows most to accept the lie that both premises are true, which is only half of the truth when in fact both are never true at the same time.  The reason that two contradictions seem to exist is because the respects (remember “…in the same respect”) change subtly making it hard to track.  In one respect, the money is owned on paper, and in another respect the money is owned physically.  On paper the money supply multiplies and physically it does not .  So when the money is owned in one respect, let’s say physically, then the money supply premise is true, while all depositors having access to their money is false.  If money is owned in the other respect — on paper — then all depositors having access is true, while the non expansion of the money supply is false.  (I suggest rereading the arguments surrounding the different respects of ownership until it sinks in).

A fair number of people see that both premises are false under different conditions, but fail to understand the implications or severity in accepting the contradiction.  They obviously understand from history that bank runs are bad, but think they can be avoided and see no negative repercussions for expanding the money supply.  We understand, from our discussions of inflation, why expanding the money supply is bad.

Who are the winners and losers under fractional reserve banking?  Savers find that the money they saved loses value over time more than the interest they earn on that money — they lose.  More consumers than producers exist at any one time   — everyone loses as the standard of living suffers.  Bankers are able to earn a ton of money from interest on money they didn’t own — they win, but only for the short term because their standard of living suffers more than it would have if the money supply didn’t expand.  (It’s would be difficult for bankers to understand this because they can potentially make 45 cents on the physical dollar every year).  The borrowers win in the short run by paying off the loan with less valuable money, but like the bankers, their standard of living suffers in the long run for the same reasons as bankers.  There is a point where the standard of living suffers so much that one is unable to buy sustenance and pay off their loan — their life is no longer self-sustaining.  Unlike full reserve banking, however, where the lender would lose his money along with the person he lent money to, no depositor “loses” theirs under fractional reserve banking.

A limit exists for how much banks can lend out, under fractional reserve banking, and still function.  If they keep 100% in reserves, then it’s no longer fractional reserve.  If they lend out all of their reserves, then they default on any withdrawals, which results in a bank run.  What number, between 0% and 100%, allows a bank to function and allows depositors to have access?  It really depends on how much people need money.  The ability for people to save increases as the standard of living increases; and vice versa as the standard of living decreases.  In addition, when people borrow money, they use unconsumed goods — i.e., what would become savings — to pay off the principle and the interest.   There is a point, therefore, like there is in the use of money, where the standard of living needs to reach a certain point before fractional reserve banking can exist because people need to save money in order for fractional reserve banking to function and people need to earn enough to save.

Let’s assume that we reached the limit of credit expansion, what happens when we reduce the amount of credit by paying off loans?  Deflation occurs.  Is this a good thing?  We discussed earlier that deflation is good, but in this case, it is good only under a certain context.  The savers benefit because the value of their money increases — they win.  The standard of living increases as more goods are consumed when people start to pay off loans — everyone wins.  The borrowers suffer because they need to pay back the loans with more valuable money than they borrowed — they lose, but they would pay interest anyway.

Deflation is bad under fractional reserve banking, however, if it occurs rapidly.  For example, the faster deflation occurs the harder it will be for borrowers to pay off the loan and buy sustenance, which increases their likelihood of bankruptcy.  Borrowers lose the ability to pay off the loan because they now need to work several times harder (up to 10 times) to pay off loans — they lose.  The more borrowers that go bankrupt, the less money the banks will have to pay depositors their interest.  The less the banks have to pay depositors, then the more likely they will go bankrupt — they lose.  If a bank manages to avoid bankruptcy, they will still be unable to return to full reserve banking; that equates to lost value.  The bigger the gap between what the banks have in reserves and what the depositors have in their accounts, then the more value is lost — savers lose.  The more value that is lost, then the more the standard of living suffers — everyone loses — e.g., the market crash of 1929.  The trend of fractional reserve banking is to resist returning to full reserve for that exact reason — everyone loses.

So at the limit of fractional reserve banking — meaning the reserves are at their lowest and the expansion of the money supply is impossible — is it better than full reserve banking?  Under full reserve banking production matches or surpasses claims to consume, the standard of living matches advances in production, and property rights are protected.  Under fractional reserve banking at its limit, production lags behind claims to consume (remember there are more claims to consume than what people produce due the fractional reserve banking contradiction), the standard of living matches advances in production, and property rights are violated.  All being equal, if my evaluation is correct, a full reserve banking society would improve their standard of living at a similar rate to that of a fractional reserve banking society; however, there would be a period of time, for the fractional reserve banking society, when the standard of living would lag behind until the limit of expanding money is reached.  The icing on the cake (sarcasm), however, is that everyone’s property in banks are constantly at risk because they are relying on others not to make a physical claim on their money.  As our standard of living continues to drop, how much longer to you suppose people can live without making that physical claim?

We talked about the nature of money, the ways in which it can fluctuate, different systems of banking, and the implications of each; now we have a great base of knowledge to discuss the FED.  Every fact you read about the FED is true, but not the evaluations.  For example, they do control the money supply by setting the interest rate for loans, but that is not in the long term interest of anyone, and only serves the short term interests of very few people.  They don’t print money and loan it out, they simply loan money in the form of electrons, and fill their reserves with printed money that the US Treasury Department printed — essentially the same thing as loaning printed money.  They actively strive to cause inflation, between 3% and 5% every year, which continually increases the limit   of fractional reserve banking; thus, avoiding the system’s natural limit.  The FED is able to loan money even if there are no depositors to back it up.  Depositors become an old fashioned notion when the production of every dollar carrying person is backing up the freshly printed bills.  This leads us to our next question: is fractional reserve banking better than full reserve banking if the natural limit placed on fractional reserve banking is removed?  The question reduces to, is steady inflation better than steady deflation?  You have the information; you be the judge.  I suggest starting with the lagging of production behind consumption that we discussed in fractional reserve banking, which would necessarily continue and become greater.  Is that good?  Do you think there is a possibility where the increases in claims to consume would surpass the advances in production?  And finally, do you benefit?

The FED is convinced that their actions are in the best interest of the country, and therefore, in your best interest — that is their evaluation.  What is yours?

In response to The above video advocating consumerism, specifically as it applies to job creation:

I will begin by saying that propagating false principles and ideas that cater to the fashions of the time is easy in that it can be brief; it takes length to root out the error(s) by catering to people’s reason.  The initial advantage goes to the fashionable, but in the end reason is what “sticks” if people are willing to make the effort to discover what is true and why.

Life is a process of self-generating and self-sustaining actions — look at anything that is alive today and you will see this to be a true principle.  This action translates into human action as production — the self-generated action of man to the production of goods that he requires for sustaining his life.  It is self-sustaining if he produces more than what it costs to produce — i.e., his actions are profitable.

If left alone, man must produce for himself, but once he has a neighbor there can be a division of labor and trade — there “CAN be”, meaning it’s an option.  Both traders can now neglect a certain action that they will trade for; they can now focus on producing more of what they will use to exchange for what the other will make.  This is the formation of the most basic job — of neglecting one thing and creating more of another, in order to exchange at a net gain (or profit) than otherwise would be possible.  Both traders increase their activities in one area — creating the option of a certain action in exchange for wages.  This principle applies throughout a free economy: division of labor and production reorganizes as a trade to the profit of all.

It is true that demand creates an incentive for production, and demand creates an incentive for creating jobs to support production, but without rich entrepreneurs and the super rich, most of those demands would go unfulfilled.  Neither a sea of tears nor an army of guns will create any value that is demanded.

When the rich are starting a business, he creates the option of work that wouldn’t otherwise exist in exchange for wages; and he creates an option to buy a product that wouldn’t otherwise exist in exchange for payment.  It is also true that without others to make use those options, then those options would go unfilled or unbought.  It is safely assumed that people choose, to the best of their ability, the best options for themselves; and if they take a job or buy a product, then it is the best option for them according to them.

If entrepreneurs lack the capital to start a company, they CAN look to others who have capital (the super rich) and create an exchange to the profit of both.  The super rich lending their money is providing a service.  They worked or their relative worked and saved — i.e., withheld their consumption — to acquire that capital.  They earned it, and that is their property by right.

Where entrepreneurs and the super rich get the credit for creation is creating the production and job opportunities that would otherwise not exist, and on top of that they do it in a fashion that is consistent with life — in a self-generating and self-sustaining fashion — i.e., at a profit.  Consumers filling the created job opportunity or consuming the resulting production is not and can never be a function of creation; it can only be the consumption of something that has been created.

It is also said that people create the value that is demanded by demanding that value — demand creates value.  True, things are of value because of demand; however, assuming that individuals want to live, then there will always be demand and a need to produce — the nature of reality and life requires this.

To give credit to people for creating demand where the nature of reality and life is responsible is worse than a contradiction; it’s an evasion of reality.  It amounts to saying that consumers created demand where it would otherwise not exist, and they alone hold power over demand and can turn their demand on or off, instead of realizing that the nature of reality and life is the true source of demand.  The former leads to the fallacy of consumerism and the primacy of consumers, and the later leads to a correct framework for analyzing economics and the primacy of reality.  

Prove me wrong consumers by stop demanding, and with your ceasing of demand goes your ceasing of consumption — do it, stop consuming if you can!  Alas!  A false principle never fails to betray itself.

With a false principle, sprouts false and destructive ideas — like the video suggests.  If consumerism is assumed to be a correct framework, then I agree with the video that it logically leads to taxing the rich and giving it to the middle class and those who consume.  They would be the true source of the value given to production after all.

What would taking from the rich and “investing” in consumers do (analyzing it through a correct framework)?  It violates our first principle that life is a process self-generating and self-sustaining action.  Taxing the rich is a forced acquiring of their profit (remember that profit is the result of their self-generating and self-sustaining action), and giving it to consumers will simply allow consumers to consume in exchange for that money.  The result is the feeding off of self-sustaining and self-generating action to support a “sink hole.”  The ratio/percentage of this siphoning has it’s limit before the entire system cannot be self-sustaining!  Why, in the name of life, would we ever want to move in that direction!

The last objection I have of consumerism is the argument that the rich getting richer will result in a lack of consumers because people will have less money to buy things.  What a tragedy that existence has in store for man when he harms himself buy producing and selling more of what other people want!  We are doomed!  We are doomed to do little for our fellow man or to harm them, and we are doomed to harm ourselves in both cases!

Fortunately existence doesn’t have it out for man and has provided a mechanism to avoid destruction.  The solution is simple — the price mechanism.  The nature of pricing dictates that if the production of goods are up and the amount of money in circulation is down, then the prices of products will necessarily drop provided that trade is left alone by the government or those who would like to initiate the use of force.

Do not get fixated on money — it is deceitful when analyzing economics because it is easy to confuse money for wealth.  Money is a medium of exchange only.  An exchange involving trading a product/service for money is incomplete until that money is in turn exchanged for a product/service.  It is products and services that are the ends and it is production and money that is the means to self-generating and self-sustaining processes — i.e., to life.