Posted tagged ‘Charles Hugh Smith’

Must Reads For The Week 10/1/16

September 30, 2016

Krugman: Obamacare Is Starting To Unravel, at economicpolicyjournal.com. Obamacare is working exactly as planned. It was the next step toward a single payer Government run system.

Doctors Drowning In Flood Of Obamacare Regulations: Cleveland Clinic CEO, at cnbc.com. Cleveland Clinic CEO Dr. Toby Cosgrove said, “The regulation paperwork comes in the form of a 7-foot-tall stack of 16,000 pages.

Feds Force Michigan Cherries To Rot – In order To Raise Prices, at michigancapitalconfidential.com. Who says government bureaucrats don’t understand economics. Constricting supply raises the price. FDR mandated these type of edicts during the great depression. Pigs were killed and buried in pits so the price of pork would remain high (read here), even though people were starving. Central planning isn’t easy!

Sweden Creates 55 “No-Go Zones” As It Loses Control Of Refugee Crisis, at zerohedge.com. The Refugees are trying to implement Shira law and they are succeeding. Police have given up trying to control the violence in the No-Go zones. What’s happening in Europe can’t happen here, can it?

France’s New Sharia Police, at zerohedge.com. If immigrants don’t assimilate into the existing culture, the existing culture will be taken over. This can’t happen here?

In Most States, First-Generation Immigrants Receive More In Government Services Than They Pay In Taxes, at economicpolicyjournal.com. You can’t have open borders and a welfare state. It incentivizes the wrong kind of people to come to America. We need people who want to produce. We don’t need anymore people who want to consume without any corresponding production (welfare recipients).

Confessed Mall Gunman, A Non-Citizen, Voted In 3 Elections In Wa., at tammybruce.com. Do we want non-citizens voting? Democrats do.

FBI Investigating More Dead People Voting In Key Swing State Of Virginia, at zerohedge.com. Do you trust the FBI in the wake of the investigation of Hillary? There is no way the FBI will find voter fraud in a state where Clinton crony Terry McAuliffe is the Governor.

Who Really Lost This Weeks Presidential Debate? America Did, at zerohedge.com. America is an ideal where the individual is sovereign and the government is subordinate. Hillary and Trump are for bigger government. The bigger the government the smaller the individual. The debate was between big Government and bigger Government. America lost.

Are The “Invisible Americans” The Key Players In This Election?, by Charles Hugh Smith, at oftowminds.com. Excerpt from the article: “The gulf between reality and the official happy story of “recovery” spewed by the status quo’s well-paid army of apparatchiks, flunkies, flacks, hacks, toadies, lackeys and functionaries gorging at the trough of the status quo is widening to the point of surrealism. Memo to the D.C. Beltway/mainstream media apologists and propagandists: the 25 million Invisible Americans are no longer buying your shuck-and-jive con job.” This article has great analysis by CHS.

Let’s Take A Break From All This B.S.

Ryder Cup Heckler Has To Put Up Of Shut Up. He Makes Putt He Said He Could Make.

The European Ryder cup guys were great. I like how Dave Johnson didn’t want to take the $100 dollar bill from Justin Rose that Rose put on the green next to the ball before Johnson hit the putt.

Drone Captures Northern Lights Over Iceland

 

Never Follow Your Passion, But Always Bring It With You.

June 8, 2016

In this video from Prager University, Mike Rowe critiques the adage, “follow your passion”. Many of us say this without thinking about the ramifications of following this advice.

Here are some excerpts from the video.

“Why would you tell someone to never give up on their dreams without even knowing what they’re dreaming? How can another person know where your passion will lead you? What happens when your passion and your ability have nothing to do with other?”

“If we’re talking about your hobby, by all means let your passion lead you. But when it comes to making a living it’s easy to forget the dirty truth; “Just because your passionate about something doesn’t mean you won’t suck at it.”

“And just because you’ve earned a degree in your chosen field it doesn’t mean you’re going to find your dream job. Dream jobs are just that, dreams. But their imaginary existence just might keep you from exploring a legitimate chance to perform meaningful work and develop a genuine passion for the job you already have. Because here’s another dirty truth; Your happiness on the job has very little to do with the work itself.”

“Consider the job market right now. Millions of people with degrees and diplomas are out there competing for very narrow set of opportunities that polite society calls good careers. Meanwhile employers are struggling to fill nearly 5.8 million jobs that nobody’s trained to do. this is “the skills gap”. It’s real and it’s cause is very simple. When people follow their passion they miss our on all kinds of opportunities they didn’t know existed.”

“….and while passion is why too important to be without, it is way to fickle to follow around. Which brings us to our final dirty truth; Never follow your passion, but always bring it with you.”

 

THE COST/BENEFIT OF A COLLEGE EDUCATION

Charles Hugh Smith: It’s Time To Ditch 4 Years Of Costly College For Directed Apprenticeships (read here).

In this article, Charles Hugh Smith, at oftwominds.com, asks the $64,000 questions about going into debt for a worthless college degree. Here are some excerpts from the article.

So it turns out sitting in a chair for four years doesn’t deliver mastery in anything but the acquisition of staggering student-loan debt. Practical (i.e. useful) mastery requires not just hours of practice but directed deep learning via doing of the sort you only get in an apprenticeship.”

“Let’s start by admitting our system of higher education is unsustainable and broken:  a complete failure by any reasonable, objective standard. Tuition has soared 1,100% while the output of the system (the economic/educational value of a college degree) has declined precipitously.”

“The typical graduate of a short, intense directed apprenticeship says “I learned more in a month here than I did in four years of college.” this is a statement of fact, and it is the result of the methods deployed in structured on-the-job training.”

“Our higher educational system has failed so badly that many students are incapable of writing/communicating effectively….To “graduate” students with poor writing skills is completely unforgivable. Yet in the current system, if a student logs the requisite number of credits, a diploma is duly issued, regardless of how little he/she actually learned.”

“The entire “campus experience” should be jettisoned, not just as an overly expensive infrastructure but as a detriment to fast, deep learning that is the foundation of mastery…..the most successful incubators of talent around the world are generally in makeshift of decrepit buildings, not fancy new gleaming buildings of the sort that dot American college campuses. Surrounded by luxury, who feels any hunger to learn anything voraciously?”

“Short, intense directed apprenticeships that teach students how to learn on their own to mastery are the future of higher education. We can continue to squander trillions of dollars on an ineffective system until it finally collapses under its own weight, or we can admit the current contraption is unsustainable and a failure, and move on to a better, cheaper system.

 

Related ArticleYoung People Get Hooked Into Huge Debt When They Take The Student Loan Bait, at austrianaddict.com.

Related ArticleFollow Up To Student Loan Debt Post. Government Creates The Problem, It Isn’t The Solution, at austrianaddict.com.

Must Read “Leftovers”

December 8, 2015

Why The Fed Has To Raise Rates, by Charles Hugh Smith, at oftwominds.com. The US dollar is the worlds reserve currency. This puts the Fed in a situation of trying to control the domestic economy and the international economy. It can’t help both at the same time. An action that helps one, hurts the other. The Fed is trying to use it’s policies to steer the economy. It doesn’t understand that economic laws are trying to correct the Feds steering.

Bernie Sanders Is Right: The US Is Already A Socialist Country, by Ryan McMaken, at mises.org. Money quote, “..if a democratic socialist of the 19th century were to get into a time machine and travel to the modern United States, he’d be forced to exclaim “mission accomplished!”

A Resurgence of Intolerance, by Thomas Sowell, at jewishworldreview.com. College administrators surrender to students storm trooper tactics.

Free Speech, by Walter E. Williams, at jewishworldreview.com. Colleges don’t want diversity of opinion on campus. They want to ban free speech.

Learn Economic Nonsense From The Fed, by Patrick Barron, at patrickbarron.blogspot.com. Print money, print more money, print even more money.

Our Feckless Leader Apologizes For US ‘Role’ In Global Warming, at tammybruce.com. This is not from the Onion. President Obama used a quote from Martin Luther King to stress the urgency of fighting global warming.

Innocent Man Paralyzed After Being Mistook For Suspect By Cops – Struck 50 Times, at copblock.org. HT libertypenblog.blogspot.com.

CARTOONS

Political Cartoons by Glenn McCoy

Political Cartoons by Glenn McCoy

 

Must Reads For The Week 9/26/15

September 26, 2015

Will Feminists And Gender Activists Demand Perfect Gender Equity When It Comes To Workplace Fatalities? by Mark J. Perry, at economicpolicyjournal.com. Aside from what is said in the title, my observation about the list of professions that have the most fatalities was this; police and fire fighters are not in the top ten. There are many people who risk their lives serving mankind by producing goods and services that others want.

Most Popular Names Fro Babies Last Year, at huffingtonpost.com. HT Mark J. Perry at carpe diem blog. The chart shows the top girls and boys name for each state. Emma, Olivia, and Sophia are tops for girls, and Liam, William, and Noah are tops for boys.

The 2015 Economic Freedom Index: U.S. Ranking Falls, by Ryan McMaken at mises.org. Because of the rise in the power of our Federal Government, no one should be surprised at the U.S. dropping in these rankings. We were number 2 in the Freedom Index in 2000, this year we are number 16 in the freedom index.

Spitznagel: If Only The Fed Would Get Out Of The Way, by Ryan McMaken, at mises.org. Here is an excerpt from the article. “The master fallacy underlying so much economic commentary is to imagine that a handful of experts in Washington should be setting the price of borrowing money. Instead, the Fed should set markets free.

What Is Going On With Caterpillar Sales? at zerohedge.com. In a growing economy Caterpillar sales would be increasing, wouldn’t they?

Government Can’t Even Give Stuff Away Properly, by Gary Galles, at mises.org. When government tried to increase home ownership, we got the housing boom and bust. Government made young people debt serfs when it attempted to make college available to more people. How do you think Obamacare is going to turn out?

The FOMC Star Chamber, by Jeff Diest, at mises.org. If we know that price-fixing doesn’t work, why does the Fed think they can set interest rates.

The New Shackle Of Freedom: Clinging to Healthcare Insurance, by Charles Hugh Smith, at oftwominds.com. Here is an excerpt from the article: “Healthcare insurance is the new shackle of serfdom: Americans are forced to cling to whatever coverage they have, lest they loose coverage and risk bankruptcy.”

Government Intervention Stifles Real Job Creation

August 18, 2015

Can government create a job? Yes! Government can create millions of jobs. They could outlaw farming equipment tomorrow which would immediately create millions of farming jobs. But would these new farming jobs be productive jobs?

Government jobs by definition aren’t productive jobs. Does a government job produce more than the cost of the labor? The only way to find this out would be to compete in the market and discover what the price of labor would be according to the law of supply and demand.

High school teaching jobs are examples of jobs that are both free market jobs (private school teachers) and government jobs (public school teachers). What do I mean by this? A private school teacher gets paid considerably less in wages, benefits, and retirement, than a public school teacher. A private school has to provide a quality service at a price that individuals value more than the money they  freely exchange for that service. If they can’t, they will go out of business. A public school has no such incentive to provide quality at a lower price. They receive ever-increasing revenue through local tax levies and state and federal funding. Because of this, teachers unions procure ever-increasing wages and benefits for their teachers who provide a lower quality service. People’s next best alternative,  private schools or home schooling, are considerably more expensive, which is why it is difficult to escape public schools.

Government wages are higher than market wages. The true price a teacher could command if we had a free market educational system, would be somewhere between the monopoly wage of the public schools and the wage paid by the private schools. We can’t know what it would be, all we know is the wage would be revealed through the interactions between individual demanders and suppliers of the service in the market. The true price of a teachers wage can only be discovered through the market process.

GOVERNMENT STIFLES JOB CREATION

Below are two great articles. One is about how Government regulatory costs make it difficult, if not impossible, to create real jobs in the private sector. And the other tells how we must get back to the understanding that the individuals rights as a free person trumps some vague idea of a collective good.

The first is, Our Government Destroyer of Jobs, by Charles Hugh Smith, at oftwominds.

Here are some excerpts from the article.

“Government regulation is supposed to address life safety and exploitation of workers and the public. But unbeknownst to the status quo, it’s supposed to do so with an eye on cost-benefits and diminishing returns.”

“The government’s solution to absurdly high costs of opening a small business is: borrow more money….. we make the rules, you follow them, and if you can’t afford to follow the rules, then don’t open the business.”

“This is how you get an economy of bureaucrats justifying their existence with 500-page manuals regulating private enterprise and abandoned main streets and malls. The government assumes private enterprise will jump through an endless number of hoops to operate a business, and that there is an endless supply of willing entrepreneurs who will volunteer to put themselves at risk of bankruptcy.”

“Back in reality, there is not an endless supply of people willing to jump through an insane number of hoops and risk their capital and health on starting a risky enterprise.”

“Guess what, our government: you forgot that ultimately you live off the private sector. Yes, let’s pile on another 500 pages of regulations–no problem–nothing could be easier for those in secure jobs funded by taxpayers. But if the private-sector jobs go away, who’s left to pay for state employees to shuffle thousands of pages of regulations and enforce countless “improvements”?”

FREE INDIVIDUALS  vs. THE COLLECTIVE

The second is, Agenda For A Freer And More Prosperous America, by Richard Ebeling, at epictimes.com.

Here are some excerpts from the article.

“America must rediscover and reestablish its own founding principles and philosophical ideas…This means recapturing the spirit and meaning of individualism and individual rights. That every human being should be considered a free person, allowed to live his or her own life as he or she wished, guided by their own goals, purposes and ideals that will give their life meaning, value and worth, as they define it.”

“This means liberating ourselves from the false notion that the individual is owned and subservient to the collective, the tribe or the group into which they were born, and to which a political and ideological elite asserts they are to be sacrificed and obedient; that their life is not their own, but the property of the collective.”

“As long as the underlying collectivism is not challenged and overcome, real and sustainable freedom cannot be restored. America was founded on the idea of sovereign individuals, who associated with each other for mutual betterment through voluntary trade and consensual association. Government was meant to secure and protect each individual’s right to his life, liberty and honestly acquired property (meaning peaceful production and/or voluntary exchange).”

“Privileges and favors, subsidies and artificial protections for some at the expense of others must be repealed and abolished. There must be an equality of individual rights before the law, not an inequality of government-imposed “entitlements” and redistributive “rights”….”

“Freeing markets under a regime of equal individual right under an impartial rule and enforcement of the law would do far more to help those that “progressives” claim there are most concerned about in society than the entire array of interventionist and welfare statist programs have done in more than a half a century of coerced redistribution since the heady hopes of LBJ’s Great Society programs.

VIDEO FROM LEARN LIBERTY

Below is a video from Learn Liberty, that talks about the ramifications of the new sharing economy. This sharing economy is challenging the status quo businesses that are protected by government regulations.

 

Related ArticleWhy Do People Think The Government Is The Economy? at austrianaddict.com.

Related ArticleI’m From The Government And I’m Here To Help, at austrianaddict.com.

Lessons From Greece.

July 7, 2015

The Greek Government is about to collapse for a couple of reasons. 1) Government debt is greater than what is collected in taxes. 2) Over the last 8 plus years the EU has given the Greek government loans to finance increasing spending. 3) Just like an underwater mortgage, they can’t pay the loans back to the countries who tried to help them up.

That’s the simple version. Now lets look at it from a few different perspectives. 1) Let’s look at the overall picture of what has happened to Greece.  2) Lets look at the Greek government. 3) Lets look at it from the standpoint of the Greek people.

OVERALL PICTURE.

Lets look at the country of Greece as if it were a single person. This person takes in X amount of revenue per year, but spends X plus 1 third X per year. They finance this excess spending by essentially maxing out credit cards that banks have given them. With each passing year this person needs to get more credit cards to cover spending, and pay off the debt on the other credit cards. As long as they are making minimum payments on these cards, banks are willing to give them another credit card. At some point though the amount going out for regular spending, plus the service on the credit card debt, is more than they take in. Now they have to make a decision on either cutting spending, or not paying the credit card payments, or both. When this starts to happen, banks will not give them another credit card to float their debt. At this point the person has to declare bankruptcy. His assets will be liquidated and his creditors will get paid a percentage of what they are owed. He will have to cut his spending and start over.

The Greek government is the person maxing out his credit cards, and the EU is the bank that keeps issuing the new credit cards. The reality is the EU and other countries that financed Greek debt did a disservice to the Greek government (and people) by issuing them the ability to keep their failing financial policies propped up for so long. Now the people in the EU countries, and the people of Greece, will have to absorb the cost of the over consumption that was allowed to go on unchecked by the Greek government, the EU, and the Greek people.

GREEK GOVERNMENT POLICIES

The Greek government’s socialist redistributionist policies have created a class of people who don’t produce anything of value. This group includes government employees, public employees and social security pensioners taking early retirement, people who fake disability, welfare recipients, and politicians. Add to that a 26% unemployment rate, thirty hour work weeks, and the fact that most people who actually produce something of value evade taxes, (which is totally understandable), and the math doesn’t add up.

Government spending is consumption without corresponding production. Government has been using the credit card to prop up consumption by non productive people (including politicians and bureaucrats), as well as paying the service on their previous debt. At some point economic reality wins out as consumption starts to out run production. A liquidation takes place, a bottom is reached, which is the new stating point for the economy. The liquidation is the cure for the Keynesian cancer of thinking consumption comes before production.

THE PEOPLE OF GREECE

The Greek people have gotten used to consuming without producing anything. Debt, financed by European Central Bank money printing gives the illusion of sustainability, for a while. The people have no understanding about Say’s Law which states, 1) A buyer can only demand a good if he supplies a different good. 2) The supply of one type of good constitutes the demand for another type of good. 3) The source of demand is production not money, Money is only a temporary parking place for past production. 4) Printing money does not produce any good or service, it only creates the ability to go into the market and demand goods.

Greek politicians have brainwashed their people into believing that a world of scarcity has been abolished by the magic of the printing press. Politicians have framed the argument as a battle between the Greek people vs. the EU and creditors, with the Greek government baring no responsibility for what has happened. Politicians have cleaned up the DNA evidence that points to them, and planted evidence that points to the EU and its creditors. Having been given the perp on a propaganda platter, the people have no intellectual curiously to seek the truth. That truth is that socialism, central planning, the welfare state, increasing debt, borrowing, and money printing,  incentivizes consumption and constrains production.

Put differently, More corn is being taken out of the bottom of the grain bin for consumption, than is being produced and put in the top of the grain bin. At some point no corn comes out of the door when consumers demand grain. This is where Greece is. But the people, who have been propagandized by socialist politicians, don’t understand this. They voted for the EU to give them more money so they can continue their consumption. If that happens, these countries are stupider than when they loaned them the money in the first place knowing that they couldn’t pay it back. But don’t be surprised, because politicians make economic decisions through the political process, and it never turns out well.

LESSON

Can this happen here? Lets see! The Federal government is in debt up to its ears. The Federal Reserve can print money to fund government consumption activities. There are 93 million working age people not working (not producing). There are more Americans on disability and food stamps that ever. The Democrats have an avowed Socialist, Bernie Sanders, running for president.

U.S. Debt Chart

You tell me. Can this happen here? Yes, if we keep traveling down the “consumption comes before production” road.

Related ArticleThe Global Template For Collapse: The Enchanting Charms Of Cheap, Easy Credit, by Charles Hugh Smith, at oftwominds.com.

Related ArticleAthens On The Potomac – It Could Never Happen Here, Right? at zerohedge.com.

Related ArticleSay’s Law And The Permanent Recession, at austrianaddict.com.

 

 

 

 

 

 

 

 

 

Why Has Classical Capitalism Devolved Into Crony-Capitalism, by Charles Hugh Smith

September 16, 2014

In this article, Why Has Classical Capitalism Devolved Into Crony-Capitalism, Charles Hugh Smith, (oftowminds.com) makes the point that the Elites, consisting of ; people in Government and central bankers, lesser institutions that are closest in orbit around Government and central banks, and organizations and individuals who are orbiting these lesser institutions, think the economy will eventually “heal itself” even after all they have stolen through zero percent interest rates, electronically printed counterfeit money, and Government debt. These three legs of theft are, quoting CHS, “crippling the market’s self-healing immune system: Price discovery. Thanks to ceaseless interventions by central banks, the price discovery mechanism has been shattered: want to know the price of risk? It’s near-zero. Yield on sovereign bonds? Near-zero. And so on. Prices have been so distorted (the ultimate goal of Central Planning everywhere, from China to the EU to Japan to the U.S.) that the illusion of stability is impossible without more intervention.”

Here are his six factors of how, “...free market capitalism becomes state-cartel crony-capitalism, a Ponzi scheme of epic proportion...”

1. “Those who control most of the wealth are willing to risk systemic collapse to retain their privileges and wealth. Due to humanity’s virtuosity with rationalization, those at the top always find ways to justify policies that maintain their dominance and downplay the distortions the policies generate. This as true in China as it is in the U.S.”

2. “Short-term thinking: if we fudge the numbers, lower interest rates, etc. today, we (politicians, policy-makers, money managers, etc.) will avoid being sacked tomorrow. The longer term consequences of these politically expedient policies are ignored.”

3. “Legitimate capital accumulation has become more difficult and risky than buying political favors. Global competition and the exhaustion of developed-world consumers has made it difficult to reap outsized profits from legitimate enterprise. In terms of return-on-investment (ROI), buying political favors is far lower risk and generates much higher returns than expanding production or risking investment in R&D.”

4. “The centralization of state/central bank power has increased the leverage of political contributions/lobbying. The greater the concentration of power, the more attractive it is to sociopaths and those seeking to buy state subsidies, sweetheart contracts, protection from competition, etc.”

5. “Any legitimate reform will require dismantling crony-capitalist/state-cartel arrangements. Since that would hurt those at the top of the wealth/power pyramid, reform is politically impossible.”

6. “Understood in this light, it’s clear that central bank monetary policy—zero-interest rates, asset purchases, cheap credit to banks and financiers, QE, etc.—is designed to paper over the structural problems that require real reform.”

 

CHARLES HUGH SMITH INTERVIEW

If you want to hear an interesting and in-depth explanation about the rise of crony capitalism, listening to Charles Hugh Smith’s interview with Gordon T. Long would be well worth your time ( it also has some great graphs and diagrams).

Related ArticleCentral Bank Monetary Policy Enables Us To Put Off Real Reforms, by Charles Hugh Smith, at oftwominds.com.

Related ArticleIs There Capitalism After Cronyism?, by Charles Hugh Smith, at oftwominds.com.