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Stealth Wealth

Posted by heyrandy on February 21, 2012

The Stealth of Nations, Robert Neuwirth, 2011

The free-market works. This is the author’s observation. I am not surprised. The author travels about the world to find the obvious. People when left alone will find a way to make a buck, even if that buck is a rial. I found the book predictable, but I am a free-market advocate.

All I found interesting in the book is the use of the phrase System D. It is a corruption of a French word use to describe an innovator. System D is everywhere. System D pays no taxes. System D is unregulated, unlicensed and uncontrolled. Indeed it is not capable of being regulated, licensed or controlled. If the governments were to try, they would find the task impossible. System D is the black-market, the grey-market, the informal-economy and the underground-economy. Bureaucrats have been at war with it since forever. The bureaucrats are using hammers to fight ants. Too many ants. Besides, the bureaucrats use System D. The prices are too good not to.

System D gets the job done. We all use it. The kids washing cars to raise money for the cause. The man who fixed the leak. The woman who traded you the cookies for the dress. The system is everywhere, does everything for everyone. System D satisfies customers.

System D is a bottom-up approach to the economy. Consumer demand drives System D. No government has been able to plan a successful economy. System D does not plan. It just does. When government plans bring disaster, budgets are increased because the next time the program will be successful since it will be adequately funded. When a System D vendor plans poorly, he goes broke.

You can read the book, but you will get a better understanding if you buy from some street-corner vendor. You will know more that the author if you become a street-corner vendor. Long live System D. Wait! It already has.

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Occupy upon Others at Their Expense

Posted by heyrandy on January 19, 2012

The Occupy (place-name here) movement has inflicted itself upon my town. Occupiers have pitched their tents in a city park. The city government, acting on orders from the Department of Homeland Security, has once expelled the camper from the park. The park needed “cleaning” was the excuse. The movement, originally called Occupy Wall Street, has spread to many cities. The original idea of the movement was to address what the movement called disparity in wealth distribution. This perceived disparity is expressed in the 1% verses the 99%. These percentages referred to the movement’s claim that 1% of Americans hold most of the country’s wealth. Those in the movement believe that the 1% hold this wealth in detriment to the 99%.

When the movement spread from Wall Street to other areas, the movement’s demands became broader. The movement never said how to redress what it considered an unfair imbalance of wealth, but the movement did begin to make issue of what they considered other injustices. Their demands We Want. This theme is not unique to them, but the Occupiers have a list of specific items. The list includes free health care, free tuition, free student-loan debt payoffs, and free mortgages. This is a free lunch.

The Occupiers are so far unsuccessful, but they remain undaunted. The Occupiers seem to have no obvious plan on how to get the free stuff. So far the movement has been a minor nuisance and a petty public health problem. The movement has been mostly peaceful. The lack of violence is to their credit. The Wall Street Occupiers did one time make some employees of some Wall Street firms late for work, but there was no riot.

The problem with the movement is its lack of understanding of how an economy works. Beneath all the demands is the presupposition that everyone is equal in all areas. The communists tried this (in theory) before. Its results were disastrous. Even if we disregard massive killings in Eastern Europe and China, the misery of state enforced equality in those areas was horrible. The Occupiers do not show any understanding of this history.

Occupy is also built on the envy principle. It is a case of “If I can’t have what you have, neither can you.” This does not lead to wealth for the poor. It only leads to poverty for the less politically connected. Making the rich poor has never made the poor rich. Occupy forgets that money is portable, and the rich are willing to travel. What would you do?

The Occupiers forget that America, and the West in general, is middle class. This is the group that will most suffer. There is irony here. The Occupiers are mostly middle class. You can tell by their stuff. The latest high-tech gizmos are very prevalent among the campers. To make their message heard, the movement uses this technology. They fail to see the obvious.

They also fail on the personal responsibility front. The outrage at the bailouts for the bankrupt mortgage bankers is just, but the other part of that is the personal responsibility of those who took out the loans. There were plenty of naïve people, but no one signed under duress. A share of the responsibility goes to those advocacy groups that militated for mortgage loans for those people who were obviously unqualified. Do you get a pass if you were only trying to help?

Where is the Occupy the Federal Reserve? The easy money policy of the Federal Reserve made possible all those bad mortgage loans. Here is where the movement could do real good. Focus upon the Federal Reserve. It is the source of much of the monetary problems we have. The Federal Reserve has been given carte blanche since its 1913 creation.

The Occupy movement is naïve. It lacks focus, has unobtainable goals, is wrong-headed. It espouses the tried-and-failed socialism that made many suffer but made a few powerful. Until the movement offers a coherent, obtainable agenda; until it understands the problem and not just the obvious symptoms of the problem, and until abandons its core tenet of free everything for everyone, its only hope is for martyrdom through heavy-handedness by the local authorities. That and a mild winter.

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Continuing the Conversation

Posted by heyrandy on December 7, 2011

The other day I talked with someone about student loan debt. The several readers of this blog know that I think student loan debt is a bad idea. When I mentioned that I had heard about someone with $120,000 debt incurred while obtaining a liberal arts degree from a prestige university but was now in a low paying job, the person said, “He won’t stay there.” I let the matter drop. But I thought that I would pretend the conversation continued.

Me: Actually, he probably will always be in low-level jobs.

He: Why? Surely anyone smart enough to graduate with a degree from a prestige school will advance.

Me: These days companies are doing credit report checks on applicants. This person’s credit report will be a disaster. Do the math. To pay the loan off in 30 years he will need $333 a month in just principle. There is probably an on-line site where you can calculate this with interest. If not, your bank’s mortgage department can. This debt is like a mortgage without the house or tax deduction. He cannot make this large a payment on his pay. He will go into default. This will sink his credit score. It’s low-level jobs forever.

He: Wait a minute while I work the IBerryPadReaderFirestarter. There, I found one. http://www.interest.com/mortgage/calculators/mortgage-calculator/

Me: How did you do that? I am writing this blog.

He: So am I. It is internet magic. The same person can be two people. I can’t explain it.

Me: Neither can I. They did not teach it in school. That is what I get for going to school before the Algore invented the internet.

He: How will this affect his future? What can he do?

Me: The Algore’s? Not at all. He is cleaning up with the global warming scam. The guy sure knows how to work a con. The debtor? Work two jobs, live at home, eat rice. Maybe he will lose weight. Dandelions are edible. He could munch a few while he does that yard work on the side for cash.

He: You make this sound hopeless.

Me: It is. He is a fly trapped in the spider’s web of debt. He is at the banks’ mercy. They are not in the mercy business. There is no profit there. They are               about profits. He has only one out.

He: What is that?

Me: Marry someone who is as smart as he is but rich.

He: That is silly.

Me: True. Most people who are as smart as he is are not rich.

He: Could he declare bankruptcy? Surely that would erase the debt.

Me: Yes, he could; but that won’t erase the debt. The banks had the law written so that student loan debt is not affected by bankruptcy. That is why the banks like student loans. I don’t know what they think of the students. They are smart enough not to say publicly. It’s bad for business.

He: It seems so unfair.

Me: Life’s …

He: I know, I know. Is there a better way to get an education than to go into such debt.

Me: There is. First, it’s schooling that is expensive; education is cheap, even free. This guy is getting a real education now. Second, when you think school, think cheap. Why shop at Hiprice when Walmart will sell you the same stuff for a lot less. You can even beat Walmart by shopping on-line. A lot of people who manage Walmart have degrees from Prestige. They did not see the internet as a threat. This tells you a lot about a lot. Do a cost of value study. This is a college level assignment without the credit hours. Do not fail this coarse. Is Prestige U really a better value, is it that much better, than Southwest East Central State? If it is, does it justify the cost? Third, you do not have to spend four years at Prestige to graduate from there. Do the local community college for two years. You save on tuition and living costs. Transfer your credits to Prestige and get your degree for half the price. The same agency certifies both schools. This means that accreditation-wise Harvard’s degree is just as good as one from U Mass. Inthewoods. Is that one word difference on the diploma worth what you paid? Fourthly, and lastly because I am beginning to run out of numbers, get a job in your field of study and learn from the inside. This way your boss pays you to learn. Some companies will even pay your tuition. This guy followed the herd. Too bad they were all lemmings.

He: Mass Inthewoods is two words. Shouldn’t that be course? I have heard that lemmings do not….

Me: Yes, You are an educated person, degreed even. I put that in there so you could get some value. If the lemmings don’t like it, have them sue me. They lost the last time.

He: Can’t this guy get a lawyer and have the lawyer do something.

Me: I am sure he could find a lawyer. Remember, the banks have lawyers too. When this guy goes into default he will find out about this. The banks did not have the laws written in their favor for no reason. The banks will pursue legal action against any debtor who is in default. I imagine it will resemble a pack of wolves ….

He: What can the banks do those who default?

Me: I don’t know. I am not a lupine lawyer.

He: His future is bleak.

Me: Especially bleak when you consider the non-financial effects. He is unlikely to marry. He will never be able to borrow money. (This is not a bad thing. But he will be paying cash for the clunker he drives.) He is going to get to take close care of his parents so he can save on the rent. He will be creative about hiding money from the collectors. He will configure his taxes so he always has to pay. This will deprive the government(s) of the free loan many people give them. (Tax refunds go to the loan holders. The banks got their money’s worth from their campaign contributions.) He will return his empties. Actually, he will return others people’s. He probably won’t have too many of his own. Water is cheaper and more healthful. It will help get the rice down. I can already imagine the decrease in litter. I don’t want to think about his health.

He: What is his hope?

Me: Hyperinflation of the currency. It will help all debtors but destroy the lenders.

He: He wins, the banks die. Is that so bad?

Me: You die, I die too. That is bad.

He: How likely is hyperinflation?

Me: The answer is in the bottom of you tea-cup. I drink coffee. That is my excuse, and I am sticking to it.

He: That line is tired.

Me: So am I. Good night.

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Sales Lines

Posted by heyrandy on December 6, 2011

There are words and phrases that help sell ideas. Most of these words and phrases are emotional. They load the issue with feelings. I have collected them. Here are some with definitions and discussion.

Clean. Clean things are good. This means dirty things are bad. We have clean-burning natural gas. We also have coal. Coal is not clean.

Family. We hear of “family farms.” A local politician sent around a survey that used “family liquor stores.” That was a new one. “Family values” is trite.

Fight terrorism. Phrase used to justify repressive measures. It is now the case the those fighting terrorism are becoming the real terrorists.

Protect the children. You can’t keep the little one too safe.

Strong schools. An euphemism for more money.

Reform. Usually just talk but sometimes there are superficial changes.

Transparency. A repainting in a new color.

Accountability. The matter caused great bad publicity, so some small fry got fired. Reform usually follows along with promises of transparency.

Fight/get tough on crime. Small-time crooks go to jail. The politically connected thief who stole billions keeps most of the money.

Clean up corruption. My guys get the graft, not yours.

Will/man of the people. He is in someone’s pocket.

Terrorist. Any one the government wants to kill.

Supporter of terrorism. Usually a head of state that has fallen out of favor with our government.

Rogue state. They won’t do what we want.

Regime change. What happens to a rogue state that does not have nukes.

Nukes. Things rogue states use to prevent regime change.

Allies. Countries that go along with us because they will get a share of the loot.

Standards. Important things that are not important.

Good government. Ordinary government with transparency.

Social justice. When government, good or otherwise, takes from those who own and give most of it those who don’t.

Fair share. Class envy; you pay for what I want.

Soak the rich. Tilting at windmills.

Switzerland. A small, land-locked, anomalous country in Europe that is neither ally nor a rogue state.

Good education. Paper certification.

Israel. Majority shareholder of the United States Congress.

TSA. Successor to the Keystone Cops but not as funny.

There are many more. I will leave it to you to add your favorites in the comments.

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I Checked My Spam

Posted by heyrandy on April 21, 2010

I just checked what was in the spam queue for this site. I approved many comments. I think some have been automatically deleted. If your comment is lost, please post it again. I will be checking my spam more frequently to avoid losing valid comments. I apologize to all those who commented but failed to see what they wrote.

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You Pay Them to Vote for a Living

Posted by heyrandy on December 19, 2009

There are a large number of people who are dependent upon some level of government. This is because the government has become so present in our lives. It is now impossible for these people to live without some support or permission from the government.

The government is now keeper of all records of property ownership, birth, death and marriage. The government taxes and regulates everything. It grants licenses to medical care providers, hair cutters, taxi cab drivers, gun owners, business owners, and pets.

You cannot drive the car you own on the roads your taxes paid to build unless you have the proper licenses that you must pay to obtain.

You cannot build any building without a government issued permit.

The government also provides people with money. There are myriad government agencies to issue those permits, enforce those regulations, and collect those taxes that pay for all of this. Those agencies are full of employees. There are also the welfare recipients. There is the defense industry that provides jobs directly through military bases and indirectly through defense contractors. Every congressman claims that the base in his district is vital to national defense; besides, “that base is the heart of the community.” “Pork” is something the other guy votes for.

The elected ones know all of these people are potential voters.

Few people vote against their money. This is what is  makes it difficult to reform the government system. Too many people are eating because of the government. All of these people, their relatives, and the entire advocacy industry that has grown up to plead their cause will likely vote to retain their priviledge. They vote for a living. You pay them to.

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God’s Work

Posted by heyrandy on July 27, 2009

Opus Dei: An Objective Look Behind the Myths and Reality of the Most Controversial Force in the Catholic Church, John Allen, Doubleday, 2005, 403p.

There is no more controversial force in the Roman Catholic Church than Opus Dei.  Founded by Spanish priest Josemaria Escriva in the late 1920’s, the organization has spread throughout the Roman Catholic Church.  There is even an Opus Dei branch in Japan.

The organization is vilified by its detractors, praised by its supporters and misunderstood by everyone else.  Allen, a staunch Catholic but not a member of Opus Dei, tries to give a reasonable picture of the organization.  I think that he does a fairly good job.  He has engendered in me a kind of sympathy for the organization.

Allen spends a lot of time dealing with members and former members of the group.  It is always easy to find horror stories, and he does give some of those, but Allen goes beyond the superficial anecdotes to deal with the core principles of Opus Dei.

Those principles are not the least controversial.  The principles are nothing the typical Catholic priest or layperson would not recognize and agree with.  So why the controversy?  The cause is misunderstanding, ignorance, and some errors on the part of some members of Opus Dei.

The core principle of Opus Dei is “secularity”.  This is the idea that one is a Catholic in all areas of life.  One is to work in one’s profession with all one’s diligence.  One is to strive for excellence.  This not controversial, even non-Catholics can see the merit in this.

How then does this give rise to the strong feelings, the antipathy, against Opus Dei?  The charge of being a cult is usually the first one leveled at the organization.  It is not, but some of its practices for it upper lever members do cause some to question what is going on.  The members who live in Opus Dei residences are the major case in point.  The people, called numeraries, are required to live in celibacy and perform certain spiritual practices, disciplines.  In Catholic practice this is not unusual.  Many of the religious orders were founded on similar principles.  The numeraries are mere following a well attested path.

The two most controversial of the required disciplines of the numeraries are the using of a small rope whip and the wearing of he cilice.  The whip is used once a day while reciting a Hail Mary or Our Father prayer.  It is more of a reminder, a token really, of what Christ suffered rather than a serious flailing.  No bodily injury is expected, but a mortification.  It is an attempt to suppress sin.

The cilice is also not controversial in Catholic practice.  The cilice is a barbed chain worn on the thigh for two hours a day.  The barbs poke you to remind you of the suffering of Christ. Opus Dei buys the cilices from a group of Catholic nuns that are not related to Opus Dei.  The cilice Opus Dei buys is the one with only one row of barbs, not the two or three row models the nuns also sell.

Opus Dei does have legitimate status within the Catholic church.  It members include several bishops, two cardinals, and over a thousand priests.  The Pope granted the organization the status of Personal Prelature, the only one in the church.

Opus Dei members do not withdraw from the local diocese, rather they are still under the authority of the local bishop.  So are all the priests associated with Opus Dei.

Most members of Opus Dei are not numeraries.  The vast majority of members are supernumeraries.  These are Catholics who do not live in Opus Dei residences, but live on their own.  Often married, they practice the idea of secularity in their lives, trying to live out church teachings.

This is what Opus Dei says it is about.  The organization does not tell its members what to do, other than to obey official church teaching, or how to do it.  Rather, it insists that its members find their own way in life and apply their religion as they best think they can.  In matters of ethics and doctrine the organization stands ready to assist.

Allen give a detailed analysis of the organizations financial status.  The myth says that the group is wealthy, but the reality is that the U.S. branch is doing OK, but he UK branch is deeply in debt.

This financial analysis also indicates that the organizations reputation for secrecy is overblown.  Allen said that he had no trouble in getting the information for which he asked.  Organization officials were willing to talk to him on the record about all aspects of the organization and its activities.

Allen did not join the organization, but he does give the impression of respecting it.  If Allen tries to follow Escriva’s teaching of secularity, Allen’s Jewish wife may respect it as well.

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Are You a Member?

Posted by heyrandy on July 22, 2009

The Survivors Club, Ben Sherwood, Grand Central Publication, 2009.  373p., index

Will you survive in an emergency?  What will you do?  Ben Sherwood explores the world of survivors.  Drawing from the experiences of survivors of such desperate situations  as the Nazi death camps and air plane crashes, the author seeks to know why some people survive and others don’t.

The reason some survive while others in the same situation in not the result of any one factor.  Dumb luck plays only a minor role in determining who survives.  Other more tangible factors are the key.  Most of these factors are under human control.

Survivors have many thing in common.  Regardless of the situation, those who survive disasters are those people who want to survive.  It is a odd fact that many people who could survive do not because they do not try to survive.  Sherwood cites a London, England subway fire in which many died because they did not simply walk out of the underground station.  Even more amazing, many people walked into the station despite the obvious smoke and fumes.

It is this kind of crazy behavior that Sherwood explains.  Not everyone can survive even if they did everything right. Some situations are hopeless for some people.  What can be done to improve the odds of survival is done by survivors.

A telling example related by Sherwood is that of a survival expert on a plane trip.  When seated, the man looked beneath his seat for the life preserver that was supposed to be there.  It was missing.  The man called the flight attendant, and she got him one.  The man suggested to the woman in the next seat that she check for hers.  She refused.  The attitude is that plane crashes are not survivable, so why bother?  She was not a member of the club.

Anyone who has flown on commercial airlines knows the emergency procedure demonstrations put on by the flight crew.  One also knows that most of the passengers ignore the demonstration.  Survivor club members do not ignore anything.  They pay attention and have a plan.  They know where all the exits are.  They have a greater chance to be part of the the 95% of airline passengers who do survive an airplane crash than do the inattentive.

Sherwood divides those who experience a disaster into a 10-80-10 percentage groupings.  The first are the 10% who know what to do and do it.  These are the key survivors.  The 80% are most of us, like the author, who don’t know what to do, have no plan, and tend to freeze in an emergency.  This is not necessarily a fatal condition if it does not continue.  People do overcome this.

The last 10% are the dangerous ones.  They panic and often make the situation  worse.  These people seldom survive and frequently prevent others from surviving.

The book offers a web site where you can go to take a test to see which of the five survivor types you are and how  many of the twelve survivor skills you have.  You need the code number from the book jacket, so us library borrowers are out of luck.  This is OK because luck has little to do with survival.

Why did I list the author in the 80% grouping?  He relates a incident that happened at his house when he was almost done writing the book.  At 2:30 am the house burglar alarm went off, waking the author and his wife.  They froze.  Overcoming this they called the alarm company.  They had to look up the number in the phone book.  The alarm company did not call them because the alarm company had the wrong contact information.  The alarm company  told them to lock themselves in their room.  Sherwood insisted the alarm company send the police.  Sherwood does not say why he did not call the police.  It turns out that all was well.  It seems that the kitchen door was not properly shut, and the wind blew it open.

I appreciate the author’s honesty.  He was not a club member, but what about you?

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Behind the Bank

Posted by heyrandy on January 10, 2009

The Crimes of Patriots A True Tale of Dope, Dirty Money, and the CIA, Jonathan Kwitny, W.W. Norton, 1987. 424 pgs, index.

How do banks begin?  For what purpose do banks exist?  Why use an obscure bank?  These question are seldom asked by most bank customers.  We tend to assume that all banks are much the same.  It is only a matter of convenience as to which bank to use.  There is a  lot more to banking than we know.  There is the operations of banks that we see, but beneath the surface there is in some banks operation that you are not allowed to see.

The Nugun Hand Bank was one such operation.  Founded in Australia by Frank Nugan, an Australian, and Michael Hand, an American, the bank was curious from its inception.  Kwitny, a reporter for the Wall Street Journal, traces, what he can, of the banks origins, operations, demise, and aftermath.

The bank, it seems (no one knows for sure) was designed to enable people to evade taxes, evade currency export restrictions, and to launder money.  Almost all the bank’s operation outside of Australia were illegal.  Record keeping of deposits and loans often consisted only of a slip of paper kept in a file drawer.  The morning after Nugan’s 1980 suicide, the key officers of the bank went through the files and destroyed and carted off large quantities of records.  They didn’t need to hurry:  the police did not bother to show up at the offices until several days later.  This is just the beginning of a series of bungled attempts to investigate the bank.  There would be two more

Kwitny raises many questions regarding the bank:  Why were so many retired high ranking U.S. military officers involved as officers of the bank, yet they all claim no knowledge of the illegalities?  Why was the bank able to operate for so long and in so many countries without government authorities taking notice?  Why did so many depositors fail to file claims to try to recover some of their money?  What was the relationship of the bank with the Australian Intelligence and Security Organization?

These are all intriguing questions, but Kwitny does not answer them, at least not directly.  He hints at money laundering–the bank had a branch in the Golden Triangle are of Thailand–but doesn’t give the proof that shows the bank was actually helping the narcotics trade (although it is difficult to see why this branch existed, illegally under Thai law, if it was not to move around drug money.)  Kwitny also tries to implicate the CIA, saying the bank was a conduit for CIA funds.

The issue of the retired military officers is quite odd.  Were these men that naive?  Didn’t they investigate the bank and its principals before joining?  Why were they so willing to lend their names and prestige to this nascent operation?  Many of these men tried to lie their way out of any responsibility but changed their story when they were confronted with documents and, in one instance, a tape recording of a company meeting.

The bank was a magnet for former (?) intelligence operatives.  One especially colorful character was an expatriate American who operated a sleazy restaurant and bar in Sydney’s red light district.  There is nothing unusual about this until it is pointed out that the place is frequented by most visiting U.S. elected and appointed officials.  As Kwitny notes, no one goes the for the food.

The Nugun Hand Bank is a dead issue.  Nugun is dead–this was reconfirmed by an exhumation!–and Michael Hand has disappeared.  From my one internet search, it seems that Hand is still missing.  This may be the way everyone wants the situation to remain.

The book concludes with an after word by Earl Yates, USN (ret.)  Yates was President of Nugan Hand in the U.S.; the operation was nothing but a mail drop near Washington, DC.

I found the story interesting, but the unanswered questions are a major weakness in the book.  The book’s strength is to alert us to the sub rosa world of international banking.


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Get in Line, Again

Posted by heyrandy on November 7, 2008

It is time to answer that all important question:  What will I do when I get my free government money?  Ok, it really isn’t free, and it really does not come from the government.  You pay for it in your taxes.  In fact, if the tax forms were honest, there would be a line indicating how much you had to contribute to fund everyone’s free money.  But tax forms are not honest; the politicians keep it that way, because if the forms were honest, you would be angry.  And the politicians might be unemployed.

The other day at work I told this story:  A man is handing out dollars.  You ask the man if you can have one, and he says, “Sure, just get in line.”  You do, and shortly you are handed a dollar.  You say, “Thanks.”  Now what do you do?  Put in you pocket and spend it later?

If you are a giant, mismanaged corporation with serious political connections what you do once you get that free money is get in line again.

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