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The Fetish for Business Experience


A common misconception about the economy is that we need politicians who have business experience. The thought goes something like this; “These ivy-league politicians are nothing more than failed academics who don’t know anything about business or what creates jobs. We need political leaders who were involved in successful small/big business; they have the experience we need so desperately right now. Because they’ve built and run businesses, they know how to create jobs we need to get our economy back on track. It is all about jobs, jobs, jobs!!”

So, what are the virtues that this experience brings to the table?

They know not to spend more money than they take in!”

And so does anyone who’s ever successfully managed a household budget.

They know how to create jobs!”

So they know that a combination of savings and investment creates jobs? That’s not a very big leap that it takes years of experience in the business world to make. If you truly believe that they can create jobs as politicians, I have a story to tell you called, “What is Seen and What is Unseen.” Also, the entire mantra of “Jobs Jobs Jobs!!!” ignores the entire Structure of Production.

They know how to make the compromises that the country needs!” 

So they know how to make shady backroom deals with big finance fat-cats in order to make the statistics look as though things are getting better come election time?

This is what the heavily touted BUSINESS EXPERIENCE amounts to; the politician in question knows how to maneuver his way around Wall-Street and the big banks in order to make shady deals that are paid for by everyone else.

The greatest virtue a politician can have? No experience.

Do “Infant” Industries Need Protection?


It is a common cry of the protectionist that free-trade hurts businesses that are just starting up. The protectionist says, “If the new industries are not protected, they will be crushed by foreign competition which operates on slave labor and a depreciated currency! Our jobs will be exported overseas and capital will flow out of our country and into theirs, thereby impoverishing us!”

This fallacy, like many fallacies, comes about because the protectionist is not considering both the Seen and Unseen effects. Let’s say a new car manufacturer has just opened shop for the first time, and like any other business, he needs customers as soon as possible to pay the cost of his obligations, but he can’t compete against the foreign car companies such as Toyota. So, he petitions the government with the following plea:

If you will protect my business from competition by implementing tariffs on imported vehicles, at least until my business is well established, I will be able to hire more workers, pay higher wages, and enrich the country with my product. The result is a higher standard of living for my workers, a better material standard of living for the country, and more tax revenue flowing into the national coffers.”

The government passes this proposal, and thus this “infant” business is now protected. It is commonly believed by protectionists that protection increases National Production. In reality however, protection does not increase production by one cent. To illustrate this, consider a typical consumer; suppose he has some money to play around with ($30,000), so he decides to go out and splurge. He buys some books, a new television, a stereo system to go with the television, and a brand new laptop. To show you the money he’s spent so far, let’s put everything into a list. The following numbers are real prices taken from www.tigerdirect.com and www.amazon.com:

Books: “Stephen King’s IT”, “Stephen King’s The Shining”, and “Stephen King’s The TommyKnockers”. Total price is  $21.96.

Television and home theatre system: total price for both is $2,297.98

Laptop: Alienware 14 with a 4th Gen Intel Core i7 processor running at 3.4 GHz, 8 GB DDR3 Ram, 750 GB HDD, Nvidia GeForce GT 750M GPU, 14″ Display, comes with Windows 8, and it’s Silver. This costs $1,199.99.

The total amount of money he’s spent thus far is $3,519.93.

Now, our consumer decides to buy a car. He has a choice of buying from the protected industry, or from Toyota (we’ll just keep his choices there for the sake of the example). He, at first glance, chooses Toyota, and decides to buy a new Toyota Prius for $20,100. He goes into the dealership, and upon reading the contract, he is shocked to discover that his purchase will be subjected to a 35% tax of the amount paid. This means he owes the dealer $20,100, and he owes the government $7,035 to account for the tariff. Outraged, he decides to go with the protected industry who’re selling a car for $24,654. Had our consumer been allowed to buy the Toyota Prius without being subjected to a tariff, he would’ve still had $4,554 to either play around with some more, or invest. Individually, this means that our consumer has suffered a loss of $4,554. This loss also hurts the surrounded businesses who might’ve otherwise acquired his business.

The protectionist policy does not increase production one bit; on the contrary, it diminishes production by hindering voluntary exchange. Ah, but the protectionist is sure to cry out:

That may be true, but if resources are allowed to just flow out of the country unchecked, we will be left impoverished without a doubt.”

Alright, so we shouldn’t be importing anything. What about exporting finished products?

Absolutely! That’s what we need! Hurrah for tariffs!!”

The protectionist doesn’t seem to understand that the entire reason we have exports is to pay for imports, and he doesn’t understand that protection does nothing but harm for those not being protected.

 

There is no such thing as a Debt-Slave!


The term “debt-slave” is heard primarily in conspiracy circles, but every once and a while, you’ll hear the term thrown out (albeit rarely) in mainstream discussion. The term itself shows a total lack of understanding as to what debt is. Debt is, at its core, nothing more than an obligation. Let me give you an example.

Suppose a person goes to a bank and asks for a $5,000 loan to take a trip to Disneyland, and after the bank determines him to be a worthy borrower and factoring in all of the risk, decides to charge an interest rate of 25%. The borrower, if he accepted the loan, regardless of how he pays it back, is obligated to pay back the $5,000 plus the 25% interest. So, a little bit of arithmetic shows that the borrower is liable for $6,250.

Is the borrower somehow a slave to the debt? Not at all, but let’s anticipate the objection that a proponent of the “debt-slave” myth is sure to raise, and point out that even if the bank had pulled a fast one on the borrower and made it to where the interest on this loan accumulates over time, and it got to where the borrower could barely pay the interest on the loan, the borrower can still hardly be said to be a “debt-slave.”

First and foremost, it is important to remember that banks don’t loan out there own money, they loan out the money deposited by their customers in savings, interest-bearing checking accounts, etc. Banks are directly responsible for the loans that they make, as mistakes cost their depositors, and thus their business dearly. When the bank makes the above loan, the bank must replace the $5,000 of depositor money that it loaned.

Now, our “debt-slave” conspiracy theorist would say, “Ok sure, the bank should be paid back the principle. Of course. But what about the interest!? There’s no reason to charge such high interest rates, and look at the profits the bank makes off of the interest of these! They should be limited in the interest they can charge!” Before I move to another paragraph, I’d like to point out two things about the former statement in quotations. First, some of the “debt-slave” advocates go a step further and say that interest should be outlawed completely. All interest is “usury” and should be abolished. Secondly, there is a very fallacious assumption in the last sentence of the quotation; namely, that banks are in fact limited in what they can charge for interest.

Sure, a bank could charge me an interest rate of 100% when I go to take out a loan, but would I take out that loan knowing full well that the interest on that loan is 100%? Of course not.

But, to the second half of our example, regarding the interest. Banks are, first and foremost, a business, and like any business, they have to make a profit. Now, it would be a VERY big mistake to think that interest rates exists for the sole reason so bankers can profit off of them. I won’t get into the important function interest rates themselves play, since other writers far more intelligent than I have already done just that. Instead, I’ll merely point out to you that the function of loaning liquid capital is a very important function. They make it easier for entrepreneurs to start businesses, which provide jobs for the otherwise unemployed, and to make it easier for those like the borrower in our example to enjoy leisure.

Now, we have already covered the principle of the loan, which takes care of the depositors, but what about the bank itself? Where is its remuneration in all of this? The bank provided the borrower the loan after considering everything to be considered, and the most it should get back for its service, according to the “ban interest” people, is to have the principle repaid?

Let me change the picture a bit in order to show you how silly this is. Suppose you have a department store that sells wrenches. The wrenches on the shelf are, let’s say for simplicity’s sake, $5 per wrench. The department store doesn’t make its own wrenches to sell, instead it buys them in bulk from another company at what comes to $4 per wrench. Now, if the department store were forced by law to lower their asking price of wrenches to $4 per wrench, what do you think would happen to wrenches? The department store would cease to buy them and cease to sell them.

Why? Well, let me show you. When wrenches were at the price of $5, $4 out of every $5 purchase of wrenches went to the department store’s supplier, while the $1 was kept by the department store as remuneration for their work in making it available to you. In other words, when you bought a wrench for $5, you remunerated two groups of people at once; the department store’s supplier of wrenches, and the department store itself. But, if price controls are implement and as a result the price is forcefully lowered to $4 per wrench, then the only one being remunerated for their work is the supplier of wrenches. The department store is, from their perspective, essentially selling wrenches at a loss because assuming every wrench that they buy sells, the department store doesn’t make any money. To make matters worse, the money that it fails to make off of selling wrenches is money that can’t be paid out in wages or in hiring new workers, or modernizing equipment, or negotiating with other suppliers in order to bring more goods to sale, etc..

The exact same thing applies to banks and interest lending. In the case of the $5,000 covered earlier, assuming that just the principle is paid and not the interest, how is the bank supposed to pay the interest on its interest-bearing checking accounts and saving accounts? The only way it could possibly do so is if it started charging its depositors storage fees, but the fee itself would have to be outrageous in order for the bank to make enough money to pay all of its obligations plus a profit. So, the banks only other option is to loan at interest. The interest that is paid on each loan remunerates not only the bank, but also the depositors as well (some of them the bank has to pay interest to.)

By getting rid of interest lending, not only would you stop banks from receiving remuneration for their work, but you would also stop the remuneration of the depositors who invested their capital to be lent, and you would also stop loans being made to businesses, as well as entrepreneurs.

But, some of the more sophisticated advocates of the notion that we’re all “debt-slaves” would say, “Of course we don’t want to get rid of interest or money, we just want to get rid of debt.” That’s fine enough on its own, but they go further, “but how can we get rid of debt when compounding interest prevents people from getting out of debt? Some people have paid the principle of their loans back plus more, and still can’t get out of debt. How can you say that these people aren’t debt-slaves!?”

Easily. I can say that these people aren’t “debt-slaves” for the same reason that banks aren’t “debt-slaves” to the people that they’re obligated to pay interest to; namely, those with saving accounts, interest-bearing checking accounts, etc.. If it is true that those who’re in debt are in fact “debt-slaves” to the bank, then by the same logic, the bank is a “debt-slave” to the people who open up depositor accounts that compound interest. Of course, no one would ever say that the bank is a “debt-slave”, but if no one is willing to call the bank, which is contractually obligated to pay compounded interest to certain people a “debt-slave”, then it makes no sense to say that the average person who can’t pay off his debt is a “debt-slave.”

If we dissect the term, “debt slave,” then we find that the term merely means at its core, “Slave to obligation.” The question should then be, “Why does this person have this obligation?” The so-called “debt-slave” is obligated to pay the principle PLUS the interest precisely because he agreed to pay it. If he didn’t know what the terms or the implications of those terms were before he signed, then the borrower has no one to blame but himself.

Idolatry in America


Idolatry is a sin considered to be very grave in the mainstream religions of America (Christianity, Judaism, and Islam). Idolatry is the practice of worshipping an idol (especially physical objects such as statues carved or molded in specific images of a particular deity or god). Now you may be thinking, “Who could accuse every-day Americans of worshipping idols? Surely this is a practice reserved for savages in some third-world country. We live in a country built upon Judeo-Christian laws! Surely we would be smarter than to worship carvings of stone and clay!”

Well, Idolatry is a sin that is sometimes not fully understood. The main problem with the common conception of Idolatry is that it’s assumed (wrongly) that you need to be worshipping a physical object of some kind in order to be accused of Idolatry. In fact, institutions are even more powerful as idols of worship than physical objects of worship (especially in this day and age). An appropriate example of this is to look into the writings of the old Socialist writers. Bossuet, for example, says the following.

“One of the things which was the most strongly impressed upon the mind of the Egyptians, was the love of their country…. Nobody was allowed to be useless to the State; the law assigned to everyone his employment, which descended from father to son. No one was permitted to have two professions, nor to adopt another…. But there was one occupation which was obliged to be common to all, this was the study of the laws and of wisdom; ignorance of religion and the political regulations of the country was excused in no condition of life. Moreover, every profession had a district assigned to it…. Amongst good laws, one of the best things was, that everybody was taught to observe them. Egypt abounded with wonderful inventions, and nothing was neglected which could render life comfortable and tranquil.”

Louis Antoine de Saint-Just provides us with another example.

“The legislator commands the future. It is for him to will for the good of mankind. It is for him to make men what he wishes them to be.”

These men believe that the State is what gives life to all men; it is the State that gives men their form and teaches them virtue. There are many politicians here in America who, while they haven’t admitted so outright, believe in this nonsense, and cannot be convinced of their error. How could they believe that it is the State that gives men their form and teaches them virtue instead of God Almighty!?

Lepelletier provides us with yet another example.

“Considering the extent of human degradation, I am convinced, of the necessity of effecting an entire regeneration of the race, and, if I may so express myself, of creating a new people.”

What!? How can these men be considered great men, and these horrendous writings be taught to our children in the universities!?

The idol being worshipped by the authors of these quotes is the State, and what an impressive idol the State is! It can create the laws of civilization at will; it can tax, subsidize, imprison, legalize, and criminalize whoever and whatever it wants!

You wouldn’t think the State to be an idol. “What!? The State an idol!? What nonsense! The State isn’t some lifeless piece of stone or clay, the State has life, and shows its life in its management of the affairs of civilization!”

The Prophet Mohammed (on whom be peace) pointed out that the idols the Arabic people worshipped had neither the power to help them, nor to hurt them. If you picked up a stone or clay idol, and threw it across the room, could it save itself? Of course not, so how could this same stone or clay idol be of any use to you?

The State has this same problem, with a twist. The State is unlike any other idol in the since that it is, effectively, a living entity as the would-be critic pointed out in the quotation above. The problem with the critic’s analysis however is that he doesn’t address how the State manages to have life in the first place. Does it have life and form on its merit of its mere existence?

The truth is that no collective has a will, or even an existence independent of the individuals which make it a collective. While it is true the State has life, this life has come from the individuals which give it life. Without the individuals of society, the common man, the State could not even exist. He gives life to the State through his compliance with its laws, and his advocacy of its importance.

This in and of itself would not be a problem normally. We need a police force, a military, and courts of law. The problem arises when far too much importance is placed on the State, as in the quotations above, and I must emphasize to the reader that while no politician in this day and age would openly say such things, their actions speak differently. Take for example, Montesquieu, and his belief that the laws, and therefore the legislator, should divide up the fortunes accumulated by the whole of society in order to make the rich poor and the poor rich. Montesquieu says the following on this:

“To sustain the spirit of commerce, it is necessary that all the laws should favor it; that these same laws, by their regulations in dividing the fortunes in proportion as commerce enlarges them, should place every poor citizen in sufficiently easy circumstances to enable him to work like the others, and every rich citizen in such mediocrity that he must work, in order to retain or to aquire.”

Thus, according to Montesquieu, one of the functions of the law, and thus the legislator, and thus the State, should be to commit theft in order to pursue equality!

It is my belief that when you violate one Commandment of God, you are bound to violate another unless you repent. These writers went from worshipping the State as the force that gives life and form to civilization, in direct violation of the Commandment, “Thou Shalt Have No Other Gods Before Me”, to advocating the law to steal from one group to give to another, in direct violation of another of God’s Commandments, “Thou Shalt Not Steal.”

How can it be that a country built on Judeo-Christian laws could commit these sins on a collective scale? The answer lies in the fact that religious faith is fading, for reasons I will not discuss in depth here, but it is enough to say for now that the main motivation for the denunciation of religious faith in the Western countries is due to the blatant hypocrisy of the Preachers, the Imams, the Rabbis, the religious scholars, and the people who follow them.

Those who either do not have faith in the teachings of God, or don’t know how to apply them to society are in manifest error! They violate, knowingly or unknowingly, the Commandments of God!

The legislators of today act as though they are indeed God, and while some challenge these actions by the legislator, the vast majority of the opposition to these transgressions are skin-deep. Many of them challenge the actions of the legislators/politicians because they would rather have their plans enacted and not those of another man.

A prime example of this today is Paul Ryan, who said of the president’s economic plan, quote;

“By failing seriously to confront the most predicable economic crisis in our nation’s history, the President’s policies are committing us and our children to a diminished future.”

He goes on further to say;

“Are we interested in treating the symptoms of poverty and economic stagnation through income redistribution and class warfare, or do we want to go at the root causes of poverty and economic stagnation by promoting pro-growth policies that promote prosperity?”

But what does Paul Ryan advocate in the place of the current plan? Well, looking at his voting record, he voted YES to making the Patriot Act permanent, YES to $15B bailout for GM and Chrysler, YES to $192B additional anti-recession stimulus spending, YES to extending unemployment benefits from 39 weeks to 59 weeks, and YES to providing $70M for Section 8 Housing vouchers, among other things.

The current president is doing all of these things to a greater extent. If anything, he should be patting the president on the back, but instead, he speaks of values that he himself clearly doesn’t hold, and advocates a plan which differs from the current president only in degree of intensity. Indeed, at their core, the current president (Barack Obama) and Paul Ryan aren’t different at all. We can see quite clearly that the only real problem Paul Ryan has with the current president’s course of action is that it’s the president’s plan and not Paul Ryan’s.

The president (the position, not the person) is yet another idol the general public worships. They expect the president to plan for millions of differing micro-economies, as if anyone but God Almighty could do such a thing! If you don’t believe me, turn on the news and listen very carefully to the commentators and pundits. You’ll hear things such as, “This president’s plan is doing such a great job,” “This president’s plan is failing horribly,” “This president doesn’t have a plan for this or that,” etc. Turn on a presidential debate, and you’ll hear the moderators ask questions such as, “What is your plan for the economy? What is your plan for healthcare?”

How can anyone but God Almighty plan like this!? This is lunacy, and to think that a reasonable person is expected to support this nonsense!

Idolatry is truly an evil sin, and we have to watch the way we conduct ourselves very carefully, especially in this day and age.