Re: [WDDM] Economics and Change

[Joseph Hammer <parrhesiajoe(at)gmail.com>]

There are many other schools of economics, actually. Anyone with a bit of spare time can create one. Any of them that emerge that are friendly to currency manipulation are supported as "good" theories. The Federal Reserve controls the "must publish" journal of economics, and so it mostly controls what is taught in colleges. They fund economists and economic departments that help them maintain the shroud. When I say they "fund", I mean they build entire wings for colleges... endow entire programs, and pay for extra staff. BIG MONEY.

1. Protecting industry through selective high tariffs (especially 1861–1932) and some include through subsidies (especially 1932–70)
2. Government investments in infrastructure creating targeted internal improvements (especially in transportation)
3. A national bank with policies that promote the growth of productive enterprises.

This is Keynesianism/Neo-Classical. It is Keynesianism put forward by someone with good intentions, but Keynes had good intentions, as well.

There are also about fifty other schools of economic thought. Every time the a central bank comes under fire, they duct tape some dogmas onto the old Mercantilist school and call it new. As in the above school, number 3 is always present. Numbers one and two are very malleable, but they ensure a constant stream of unpayable loans to government... a credit card with no limit, handed to the biggest compulsive spenders in history... the American Congress.

I'm going to make this prediction, because it's a fairly safe one... The people that support this theory are pro-central banking... probably well financed and backed by a bunch of people with rich family or bank connections... Alexander Hamilton is probably involved in some way... He ushered in our first central bank, and either he or one of his lackeys is usually involved. Or perhaps the civil war is involved in this one, if it is at a later date. Banks, banks, banks.

Central banks and monetary manipulation create market distortions. Anyone with control over the direction of these distortions (the target interest rate) can effectively tell the stock market to go up or down. Over a long period of time, you could literally steal a nation by adjusting one number up and down.

Central planning does not work. All this, we know... yet we continue to make the same mistakes that have landed every generation before ours in the same mess we now muddle through.

The future is not in the "Government Program" or in the "Benevolent Corporation". The answer lies in the consumer cooperative... or "co-op". A power co-op, a credit union, a farm co-op... these are all free market creations and they surpass the other two in many ways. Compared to Government programs, the co-op is enormously more efficient and friendly to customers. Compared to corporations, the co-op is only beaten by the structure of production... the supply chain. This will be fixed by technology, and the co-op will gain dominance.

We do not need a national system of compulsory taxation and spending... but we DO need a national program to coordinate our resources...

With such a program, someone such as myself could say...

"If 30% of you agree to invest $200, I can build a wireless broadband network across ever city in the United States, including but not limited to Internet and phone service. The maintenance costs after construction will be about $40 per year per investor. The service will be sold to non-investors for $10 a month, or $120 a year. The speed will be 20mb/s. The payments of non-investors will completely offset the maintenance costs, giving free Internet and phone for life... for $200, with a yearly dividend of $80 per investor."

Make no mistake... I CAN do this. Want to talk about a coast to coast magnetic rail system? Evacuated tube, 1200 miles per hour, 20% population buy-in at $400 gets you a share. The line will circle the entire US, getting you to from Los Angeles to New York in about two hours. Want it?

Doing stuff like this is not hard. It requires the kind of coordination of resources that previously could only be managed by a large corporation. It requires the level of funding that could previously only be collected by governments and megacorporations... but that time has passed.

To embrace a system like this, you must either see it work or intimately understand economics.

The economy works ONE way. Regardless of whether we can agree on what that way is... it exists. You are either right or wrong. There are MANY economic theories out there, but I would bet both testicles on the Austrians. I spent two years trying to debunk it (I was a Friedman fan), and there is no aspect of the core theory that is not elegant, simple and vindicated by countless cases in the historical record.

Central banking is morally wrong at its core. The theory is that this theft is REQUIRED for an economy to function. If so, fine... but when you look at the history of central banking, the outcomes are never good.

There are no serious contenders to the Austrian theory... Ron Paul is right... at least on this one.

www.mises.org

Central banks have the most money in the world... (uh, duh)... and they have a VERY good reason to fight direct democracy. A direct democracy will destroy central banking. CB has always been defeated by popular uprisings in the past, and the more popular control you have, the worse they are threatened. They make money from War. Three countries wanted to start trading petroleum for Euros and Yuan... which would collapse any fiat currency dependent on that fixed exchange. Can you guess the countries??? Iraq, Iran, North Korea. The Axis of sound money... weird.

Money is Debt is a great series, btw :) "Money is Debt" is completely compatible with the Austrian school, and it is a great view.

Back to work

Pj

On Mon, Jan 17, 2011 at 1:09 AM, <Martin Jackson> wrote:

Joseph Hammer, there is another school of economic theory,

Georg Friedrich List (August 6, 1789 – November 30, 1846) was a leading 19th century German economist who developed the "National System" or what some  would call today the National System of Innovation. He was a forefather of the German historical school of economics, and considered the original European unity theorist  whose ideas were the basis for the European Economic Community.

http://en.wikipedia.org/wiki/Friedrich_List

Stages of economic development

List theorised that nations of the temperate zone (which are furnished with all the necessary conditions) naturally pass through stages of economic development in advancing to their normal economic state. These are:

1. pastoral life
2. agriculture
3. agriculture united with manufactures
4. agriculture, manufactures and commerce are combined

The American School, also known as "National System",

http://en.wikipedia.org/wiki/National_System

1. Protecting industry through selective high tariffs (especially 1861–1932) and some include through subsidies (especially 1932–70)
2. Government investments in infrastructure creating targeted internal improvements (especially in transportation)
3. A national bank with policies that promote the growth of productive enterprises.

The American School included three cardinal policy points:

1. Support industry: The advocacy of protectionism, and opposition to free trade - particularly for the protection of "infant industries" and those facing import competition from abroad. Examples: Tariff of 1816 and Morrill Tariff
2. Create physical infrastructure: Government finance of internal improvements to speed commerce and develop industry. This involved the regulation of privately held infrastructure, to ensure that it meets the nation's needs. Examples: Cumberland Road and Union Pacific Railroad
3. Create financial infrastructure: A government sponsored National Bank to issue currency and encourage commerce. This involved the use of sovereign powers for the regulation of credit to encourage the development of the economy, and to deter speculation. Examples: First Bank of the United States, Second Bank of the United States, and National Banking Act^[12]

From Money as Debt and Money as Debt 11 Promises Unleashed

System to have:

·        Debt Free Money

·        Self-Issued Credit

·        Steady  State Economics

·        Social Justice

·        Survival

Present System:

·        Money As Debt at Interest

·        An Economic System dependant on Endless Growth

·        Peak Everything

All Banks Should Be Like the Bank of North Dakota

http://www.youtube.com/watch?v=r0rJWnRFUJA

The Secret of Oz: Solutions for a Broken Economy – Bill Still:

is well worth watching.

My thoughts on a few key points

1.      At Present Private ownership of the supply of money verses public-parliament supply of money

2.      At Present Globalisation Systems of economic & free trade verses National Systems of economics and bilateral trade

3.      At Present Power Families, Transnational companies and executive government verses  Direct Democracy, independent parliaments seeking direction from the people  

4.      At Present Mind Control of Religions, where we rely on Jesus or someone to return to fix it for us verses where we take direct action to achieve the change we want to see

5.      At Present Secrecy to serve the interests a few verses knowledge sharing between nations where we lift the living standards of all

Regards Martin Jackson

On Mon, Jan 17, 2011 at 9:53 AM, <Joseph Hammer> wrote:

I hear a lot of stuff from this group that is very, very positive. The focus on transparency, populism, giving the little guy a voice... hedging against corruption... all great.

But I don't like to hear "the market" blasted in imprecise terms, because history is full of destructive revolutions who succumbed to this dogma. When you misunderstand the market, and you craft laws, you destroy the market... and it WILL be rebuilt by those who understand it better. Unfortunately, that is always the group who had control of it before.

If you destroy something that is a naturally evolving consequence of our free action, it will return. If you embrace and understand those... only then can you repair them, and wisely regulate them, if necessary.

There are three schools of economic thought that are taught today. First, there are the Keynesians. Like all of the "government must help" schools out there, they fling monkey poo at the free market. They say...

"There is a glut of spending."

"Spending drives the economy"

"They value of money must be regulated for the good of mankind"

"We must 'prime the pump' with new money to stimulate the economy"

Second are the monetarists. The Keynesians turned two hundred years of economic research on its head in the 1920's. They took the research of Adam Smith and made it friendly to currency manipulators. The Monetarists appeared and tried to fix how central banking worked, because it was obviously broken (The great depression having just ended). Milton Friedman did a lot of great Micro research, and his "Monetary History" is a very valuable tome to read... but the Monetarists started at the wrong place. They say,

"If you have a central bank manipulating money, they must do it at a predictable rate." and

"Inflation is always and everywhere a monetary phenomenon"

The monetarists get a bit closer to the truth...

But Milton takes central banking as an unavoidable axiom, and tries to fix it. The fixes don't work. It is too broken.

And then there are the Neo-Classicals, who agree with Friedman more on micro stuff (unemployment effects, tariff effects, etc), but they are ambiguously between the Monetarists and Keynesians on issues of printing new money, fractional reserve lending, etc.

For 28 years, these are the only schools of economics that I had even heard of. I have a curious mind, and I have been programming computers that whole time. I know from countless hours of programming that there is a "CLICK" that happens when you finally get something... I mean, REALLY get it. It's not like the Micro-Clicks that keep happening when your arrogance tells you... "Okay... you understand that well enough... you can say you've mastered it."

That is the "Interview Click"

You think, "I could answer questions about that in an interview and appear confident. I could probably even convince the other person I had some level of mastery in that topic"

But then, each of us has something we have mastered, or several things. Each of us have something where we put in the necessary thousand or ten thousand hours to really reach an extraordinary level. We know what the "Real Click" feels like, but we whore ourselves out mentally when we are faced with a subject that we want to understand, but do not.

If you were presented with the above theories of economics, and that was all you were given, you probably "clicked" on one of them. All three, Keynesian, Monetarist, and Neo-Classical are mash-up, bastard theories which do NOT produce predictions that match what happens in the real world. They predict incorrectly. For a theory, that is a nail in the coffin.

There are many nails in the coffin of each theory. Questions that cannot be answered. Arguments full of holes, and above all, a consistent steam of inaccurate predictions from each.

You cannot "Click" on a theory that is wrong. You "thud" over and over and then you give up... and you pretend that the last thud was a "Click"

That is our arrogance, manifest.

Socrates, Martin Luther King, John Stuart Mill and even a carpenter from Nazareth wrote and spoke extensively about the value of humility, and its crucial role in understanding. We don't like to admit we are wrong or that we do not fully understand... but there is something huge at stake here...

Everything.

The fourth theory is the Austrian theory of the business cycle. It is unmentioned in grade school, and even most colleges. It is the only that has consistently had accurate predictions... for over a hundred years. They predicted the great depression, stagflation in the 1970's, the interest rate rollercoaster of the 1980's, the stagnation of the Japanese economy in the late 80's, the collapse of communism, the 90's tech bubble, the 2000's real estate bubble.

It is a beautiful theory, and it "Clicks".

In 1776, economics was called the "Philosophy of Political Economics". Adam Smith, the guy who wrote wealth of nations was a professor of moral philosophy. The reason is that the prosperity of man, the governance of a state, and the happiness of individuals are interconnected. From Aristotle to De Toqueville, philosophers were the advisers to kings and statesman. Philosophy and economy are the same thing. Economy is not about math, it is about "Human Action", which is the title of the book by Ludwig Von Mises that closes the holes in classical economics.

It is IMPORTANT to understand money, markets, regulation and trade.

If you do not, then your revolution will end with the route to the next already paved. Knowledge is power, and ignorance will always give others power over you. If we do not construct a system that obeys economic law, we are not constructing a system for human beings... we are constructing a system for our egos.

So many revolutions have handed the reigns back to those who corrupt. It is not enough to fix voting, if you allow monetary abuse to continue.

Beware of those such as Amschel Rothschild, who said, "Give me control of a nations money, and I care not who crafts her laws".

Make no mistake... when you say things like, "private property is bad", you are succumbing to a lie that will leave you in the palm of the 'elites'. If you do not understand economics, you are just a cog in the machine that always hands us back to the same power brokers... in arrogant ignorance of our own self destruction.

www.mises.org

If you have an idea about how goods should be exchanged, and how the structure of production should be aligned... it has probably been tried. Get rid of money? Get rid of property? Been tried. History is full of lessons that must be learned.

We must evolve.

PJ

Tens of millions of people are learning about Business Cycle Theory right now. It is a hidden gem, and it is crucial to the movement. I'll quit beating this dead horse now.

Peace.

Economics in one lesson - Hazlitt

America's Great Depression - Rothbard

Human Action - Mises