Tuesday, November 16, 2010

Is consumerism essential to a healthy economy?

NO!

Lately, liberal/progressive bloggers got their marching orders from their masters and put out essays declaring that consumption needs to be pushed by all means necessary to jumpstart the economy. Liberals/progressives are clinging to any straw to justify an ever growing welfare state.

The following are some the bloggers' statements and my replies.

"The U.S. economy depends upon steady consumption by working-class Americans."
Looking at it ass backwards. One cannot consume what is not produced. One can eat so much bread, wear no more than 1 pair of pants at a time (so to speak). Product first. Consumption second. People were NOT clamoring for automobiles before the automobile was invented. People were NOT dying for a personal computer before the PC was invented.

If consumption is the engine of an economy then there would not have been any famine anywhere at anytime. But this is evidently incorrect by just looking at the historical record. There is ALWAYS a drive to consume food and drink, and yet famines had occurred and will occur in the future. So what is missing? PRODUCTION. Even a knucklehead like Karl Marx knows the main focus has to be the means of production.

Consuming is easy. Producing is hard.

Returning back to the famine scenario: bad weather is such that production is incapacitated. What part of the economic activity can save the day? SAVINGS and PROFITS, which can be used to buy food elsewhere - which does not suffer famine -and to provide transport of bought food to the hungry. In terms of importance to an economy, PRODUCTION is most important, followed closely by SAVINGS/PROFIT, with CONSUMPTION as a distant third. Any economy where consumption plays a predominant role is a sick economy.

Sweeping the issue of production in order to promote cosumerism goes against human nature. Ask a person who they are and almost always they will announce what they produce: carpenter, plumber, lawyer, mother. Some often identify themselves by what they believe: Christian, Conservative, Progressive. Meet someone who first identifies themselves by what they consume and meet a liberal/progressive idiot.

"Conservative economic theory incorrectly assumes that rich folks buying yachts and vacation homes catalyze the consumer economy."
Ignorance of conservative economic theory is evident. Bill Gates may have a great big house near Seattle but that mansion is nothing compared to the 1,000-odd people who became millionaires and the 100,000-odd more people who are living the good life because of Microsoft. In addition, Bill Gates and most filthy rich people set up foundations for good causes. Bill Gates did not build his mansion all by himself; it took a lot of blue-collar workers to build it.

"Working folks aren't consuming so businesses aren't hiring."
Repeating the same previous inanity but in a different form. Let us be honest here. The libtards such as this blogger want to suggest that giving "free" money to people will make them spend on item X and the business producing item X will hire people. A short-sighted view. First, the "free" money is not free: it is either taxed (and the savers have less disposable income to buy the big-ticket items Y) or is printed, thus devaluing the currency bringing about misdirected spending. So any increase in jobs to produce item X is negated by the loss of jobs producing items Y. In the case of increased taxation, the decrease in spending of the savers is larger than the increase in spending of the welfare recipients. The effect of inflation through fiat money is quite insidious: the individual is forced to live large - spending on inappropriate goods - and go broke: the Weimar Germany is a good example of people buying hundreds of dresses and dishes (and other such items since by then there was no more gold to buy) as a hedge against inflation. Consumer economy run amok. As they say: do not sell the wine before its time. A sustainable economy is one where the consumer buys what it needs and desires in the amount, quality, and at the time which befits the consumer, not some government bureaucrat.

"Every American has the right to a decent job paying a living wage."
A lot of undefined words here. First, does one has a "right" to a job? According to the 1936 Constitution of the Soviet Union, article 118: "Citizens of the U.S.S.R. have the right to work, ..." The article continues: "The right to work is ensured by ... the elimination of the possibility of economic crises ..." The Soviet era was one long, uninterrupted period of economic crisis.

First, what is a "decent" job? Hayek, in "The road to serfdom", looked at this issue. There is always a need for people to clean the gutters and sewer lines. So there is a list of jobs/professions and if the individual has a choice of jobs, no one will take the position of gutter cleaner. Second, what is "living wage"? In the same city/locale, one says: "I cannot live on this wage" and another says: "I can live on this wage". Here is where the libtards can learn from the illegal immigrants.

"If the marketplace won't supply these jobs, then government has to be the employer of last resort."
One word: Cuba. There, since 1960 the non-existant free market cannot (it is not an issue of won't) supply these jobs, the Cuban government was not only the employer of last resort, it was the ONLY employer. Now, the Cuban government has to lay off more than 500,000 people. And that is just the beginning. Under FDR, the WPA and the CCC employed at best 10% of the unemployed but there was a hidden cost: since FDR's government agency clashed with private enterprises in many areas such as construction and power, private companies lost business and layed off people and during the 1930's. Loss of private jobs was greater than the gain in public jobs.

"There must be a jobs-oriented stimulus package that not only supports America's teachers and public safety workers but also strengthens the U.S. infrastructure, in general. (Bring back the WPA!)"
Ass backwards and inconsistent logic. If one goes along with the imbecilic idea of the consumer economy, there is no pent-up demand for more roads so why go on a road-building binge? One may say: "the roads and bridges are in great disrepair!" The roads and bridges were mismanaged during the good times and what makes one think that management will improve during the bad times? Look at the "Big Dig" project in Boston. Let us go back to FDR's public works in hydroelectric: here is where private companies wanted to partner with the federal agencies and FDR refused but the ironic thing is that the hydroelectric works made energy CHEAP where Obama and the enviro-nutjobs want energy to be EXPENSIVE.

"We can pay for the new stimulus package by increasing taxes on both the wealthy and financial institutions."
Yep. You wish. See the tax revenues decrease and capital leaving the country. Sweden has a lower capital gains tax than the US and a higher personal tax rate than the US. Why is that? A swedish economist said that rich people and companies can leave the country much easier than common people.

"The Federal government has to be involved in economic policy."
At best, minimally. Look at Somalia: many parts are receiving foreign investment despite the lack of government in Mogadishu (piracy nonwithstanding).

"It has to intervene and create the jobs that the greedy, shortsighted private sector hasn't provided. (Even if this means restricting trade with countries like China.)"
A lot of ill-defined buzzwords. What is greed? A small business owner has to take a long-term view, knowing fully well that there are times of feast and times of famine: when large profits happen said profits need to be safeguarded for the bad times. For a corporation, the CEO is focused on the stockholders and the CEO's compensation is determined by the board of directors who are themselves elected by the stockholders. If there is anyone shortsighted, its is the stockholders. But who are these stockholders? Many of them are public employee unions who invested their pension funds with these corporations. Given the currently bad economy, the public employee unions are demanding greater short-term returns to meet their pension obligations.

As far as restricting trade with countries like China, the law of unintended consequences comes into play. If China holds back on rare earth elements like neodymium, the US can mine it in the US but then the enviro-nutjobs get all riled up. Even if you sedate the enviro-nutjobs, there is so much red tape few companies want to venture in this area.

Want to produce jobs? Cut taxes. Cut government spending. Cut regulations.

Saturday, November 13, 2010

On Carbon Dioxide as Earth's thermostat.

The climate alarmists are trying to denigrate water and promote carbon dioxide as the main determinant of Earth's weather and temperature. The following is my response.

One cannot really say that CO2 is the thermostat, given that the role of the thermostat is to keep the temperature within a small temperature range. Water plays the role of thermostat: in the kitchen, as long as there is water in the pot, the temperature of the boiling pot remains close to 100o Celcius (if there was some salt in the water, as water boils off, the temperature raises slightly). Water phase changes (solid to liquid to vapor) is essential to the thermostat mechanism. As CO2 level rises, temperature rises. Now the question: by how much? Given historical data, CO2 increases the temperature very slightly.

I see a number of comments on Venus and Mars. First, the planetary greenhouse effect is primarily an atmospheric pressure effect. Mars has a near zero atmospheric pressure, thus little greenhouse effect. The greenhouse effect has nothing to do with the distance of the Sun: the greenhouse effect of Jupiter, Saturn, Uranus - for the upper atmosphere - is about the same as on Earth, and with little co2 and plenty of methane.

Blackbody emission spectrum is independent of the composition (or phase, be it solid, liquid, gas) of the body. Thus a large body of O2 and N2 gas molecules can emit/absorb at all frequencies. But Earth is not at true equilibrium and thus one talks about graybody emission which depends slightly on composition. O2, N2 may have very weak absorption/emission lines in the IR but they can absorb/emit IR via collisions. The point is: if an atom/molecule is a weak absorber, it is also a weak emitter: so if they gain energy, they retain the energy longer. CO2 and H2O are strong IR absorbers so if they gain energy, they release the energy fairly quickly. The denser the atmosphere, the greater the probability that CO2 and H2O transfer the energy (by collision) to O2 and N2, instead of re-emitting. An overall increase in atmospheric CO2 brings about a heating of the lower (more dense) atmosphere and a cooling (less dense) of the upper atmosphere. A greater temperature differential develops and brings about atmospheric current dynamics which dissipates the temperature differential change.

If there were no CO2, would Earth remain solid ice? No. The weather in the troposphere will be about what we have now. All of life resides within the troposphere whose behavior is dominated by water. The role of CO2 is to accelerate the pace from going from an (supposed) initial solid-ice-planet to the current state of affairs. An absence of CO2 would delay reaching the current state by no more than a million years. From direct impact of sunlight, water will vaporize and sublimate, transferring a good part of its energy to O2 and N2 which hold on to the energy for a long time. Energy is accumulated - slowly - by the O2 and N2 molecules. Water may precipitate out as liquid or solid but not before it has transferred most of its energy to O2 and N2 molecules. Heck, if we had Argon (monatomic gas) instead O2/N2 (diatomic molecules which - unlike monatomic gas - emits readily in the microwave region), the weather - as the pattern of air currents and solid-liquid-gas behavior of water - would be quite similar to what one has now. Keep in mind that atmospheric currents bring water up to about 10-20 km above the top of the troposphere. In the stratosphere, water exists in a very fine, very diffuse body of microcrystals.

The science is not yet settled.

Thursday, June 10, 2010

Belief is not knowledge.

One knows - not believe - that one plus one equals two.
One believes - not know - that God exists.

Those who claim they know or prove that God exists are not religious, just delusional, demonstrating lack of faith. Whatever "proof" they show, they demonstrate that they found some of God's doodoo, not God itself.

People who believe that the Revealed Books (Bible, Koran) are all about literal truths show a lack of faith and thus not religious.

The study object of Physical Science is the Secondary cause, not the Primary cause - cause of Secondary cause and cause of itself. Religion, especially revealed religion such as Christianity or Islam, are attempts to connect the Primary cause to the Secondary.

The atheists who claim that Reason is their only guide had, have and will be hitting many walls. In mathematics, the only area where Man is a virtual God - any object can be created in the mathematical world - the Godel theorem states that there will always be a question the answer to which forces an introduction of another axiom to the previous set of axioms. Axioms are just guesses as to what may be evidently true. How do axioms come about? Through divine anguish, divine intuition.

Bertrand Russel, an atheist, tried - with many others - to come up the Mathematics to end all Mathematics and failed. Godel showed that they were on a fool's errand.

A corollary to Godel's theorem is the Church's theorem: one cannot build a mathematical robot - which cranks out theorem after theorem - which can provide all possible mathematical knowledge. Such robots have been built and some have came up with non-trivial theorems but one has no illusion that such machines are the ultimate in mathematical reason.

One finds parallel dilemmas in Physical Science, the laws that we know currently are just postulates: mathematical representations which fit - within current range of perception - our measure of physical phenomena. To think that there are only 4 forces (gravity, electricity, strong, weak) are delusions given that - currently - no one has a clue as to the internal structure of the electron (a relatively massive particle compared to, say, the neutrino).

How do postulates come about? Through divine anguish, divine intuition.

The atheist is no closer - and not approaching any faster - than the religious faithful to the Primary Cause.

Monday, March 1, 2010

On Haiti and on internet comments about the 2010 earthquake.

Reading the inane comments on Huffington Post and other blogs such as flipcollective, here is my take on these things.

Right after the earthquakes, liberal-retard (a redundancy) commentators scream about historical events in theearly 1800's, thinking the misery of today was caused by events more than 200 years ago. Haiti was given an effective "reset" by the US occupation Haiti from 1915-1934. During that time, all but 2 currently existing bridges were built; the Peligre Dam (source of 1/2 of the electricity) was started; Port-au-Prince was the first city in Carribean/Latin America to have an automatic dialing phone system; General Hospital of Port-au Prince was built; 1000 miles of roads were built; the first and still main Agricultural College was established in Damiens; etc.. When the Americans left, Haiti was not a bad place; of course, it soon started to slide down.

From "Testing global interdependence: issues on trade, aid, migration and development", by Ernest Aryeetey,
Natalia E. Dinello:

In 1950, Haiti was 36% richer than South Korea, in 1998 South Korea was 16 times richer that Haiti.
In 1950 the Haitian economy was more or less at the same level as the economy of the Dominican Republic.
2009 per capita income, of Haiti = 1,340; of Dominican Republic = 8,672.
Per capita GDP was nearly twice as high in Haiti as in Bangladesh back in 1950--but by 2001, per capita
output was higher in Bangladesh than in Haiti (by about 15 percent).

Shortly after WW2, many Jamaicans immigrated to Haiti since - at the time - Haiti was more promising. At least 2 became millionaires there; 1 of them became a Haitian citizen but was forced - in 1964 - to hand over more than $5 million (US currency) to the Duvaliers. Many Jamaicans left Haiti in the 50's and 60's; some went back to Jamaica.

The main problem is land property rights, thus the peasants cannot build credit and sustain any enterprise.
Now, one builds temporary shelters, and then what?

The second main problem is deforestation and attending water problem. Most of the rivers are dry. The biggest river, the Artibonite has its source in the Dominican Republic (DR); if DR was as bad as Haiti, the Artibonite would be dry. There was an area of Port-au-Prince where mud flowed down the road after a heavy rain; then, a few years later, no more mud but rocks were then washed down the road.

Culturally, the elite focused too much on the past and wax nostalgic about the War of Independence (it is indeed a glorious story). Indeed, out in the countryside many Haitians have Greek or Roman names because slaves cannot have Christian names. The French colonial legal system had 16 racial grades, going from pure white to pure black. Some intermediary grades: mulatto, grimeau, quadroon, octaroon, etc... The fine racial distinctions are still pertinent today socially.

Is voodoo a cause of Haiti's poverty? Do not think so. Voodoo did play an important role in Haiti's independence and it is one of the few cohesive organization in Haiti. Although Jean-Francois (papa Doc) Duvalier was born and raised in Haiti, his parents were from Martinique: he was an outsider. In order to have any political future, he allied himself with the voodoo association of hongans and mambos: he would still have won the 1956 election without the fraud.

One commentator (not liberal): "Neither the U.S. nor any other nation wants to take over the governing of Haiti." Back in the 70's someone asked the Cuban ambassador to the UN why Castro did not send any communist agent to Haiti. Haiti is about 100 miles away, more than 50,000 Haitians were trapped in Cuba when the OAS embargo against Cuba was established. The ambassador replied: "We do not want to inherit the problems of Haiti."

One commentator (liberal): "Tariffs that allowed Haitian agriculture to compete with imports were removed, "
Nope. Tariffs on ALL imports increased, never decreased. What Haiti had and still have is crony capitalism, where a business man make a deal with the government (the president and selected others getting their piece of course) and have a nation-wide monopoly on some imported commodity, usually meaning a tariff often as high as 100%. Sugar in Haiti suffered because of tariffs in the US, so the canefields cannot be harvested (loans are based on next year's harvest and are used to pay the workers; so loans cannot be repaid and has a cascading effect). Rice in Haiti suffered because of drought and also corruption: the electricity is supplied by the Peligre Dam on the Artibonite river which irrigates the rice fields. Often the oil to be used for the lubrication of the turbomachinery is sold and the machinery grinds to a halt. No electricity. No harvest.

Let us revisit some of the rants of socialist denialist commentators on the 19th century reparations demands by France on Haiti. One would think that Haitians shit gold, piss honey, and fart perfume and that mean evil
bloodsucking caucasian capitalistic industrialists want all that gold, honey, and perfume. For a country burdened by France's indemnity demand of 150 million francs (lowered to 60 million francs, something the revisionists will not tell you), it did not stop Haiti from occupying the Dominican Republic, something the socialistic revisionists will not tell you either.

Haiti occupied the Dominican Republic from 1821 to 1844; Haitian president Boyer confiscated all church property, all lands owned by caucasians, and deported all foreign clergy. Oh, but that was the second invasion by Haiti; in 1805, the Haitian Army invaded the Dominican Republic, reached Santo Domingo, and made a fast retreat using the destroy and burn tactics.

The revisionists and socialist liberal/progressive idiots have the same affliction as many Haitian elite:
stuck in the 1800's. In 1950, about 25 percent of Haiti was covered with forest. By 1994, it was down to 4 percent. Events more than 200 years is irrelevant to Haiti's current problems.

Jamaica, Haiti, and bauxite. Reynolds Metals (now Jamaica Bauxite Mining Limited, in Jamaica) had bauxite deals with both countries. In Haiti, the bauxite site at Miragoane is one big open pit. In Jamaica, the site at Discovery Bay has the land rehabilitated: you would not have known mining took place. The ecological safeguarding is the citizens' responsibility, not the foreigners'.

In Haiti, they have a saying: we need 2 white winters (i.e. snow): the first is lesson, the second is examination.

Well, this earthquake will have to do as lesson. The second earthquake will be examination.