NEXUS, The Most Important Word In Economics

Nexus, from the Latin nectere, to bind. Came into the English as annex or connect (to join with or link to).

In economics, we used the principle, if not the word, when we developed the system of Capitalism.  Capitalism borrowed heavily from the human instinct to compete.  Amerinds developed a form of basketball; Orientals developed board games.  We all love to compete.  Capitalism links effort and reward.  In its application, effort is rewarded and extra effort receives extra reward.

The other guys (Communists, Socialists) have a different theory.  Where Capitalism likes to manage and grow businesses that harness and discipline Effort & Reward,  Leftists have a need to CONTROL PEOPLE.  You may have noticed that our Executive builds fines and penalties into their new programs.  Talk about control, the White House is developing a system of feeding our young; taxing and penalizing those who buy the wrong food.  They are even developing a program to tell you how and when to breast feed!  Isn’t this an area where we should say, “Hands off!”

The problem of the day which should cause us to focus on the theory of effort and reward is shaping up in Wisconsin.  What is billed as a labor dispute between Management (the State government) and Labor (public employee unions) is in effect the beginning of the death struggle between Capitalism and Communism.

Having given up on winning by revolution, the left has, for some time been building an army capable of taking control in a relatively peaceable manner.  The plan goes something like this:

1.      Create a permanent underclass where government handouts eliminate any need to rely on effort and reward.  Cradle to grave welfare programs have created cradle to grave indolence.  We are now in the 3^rd or 4^th generation of Great Society beneficiaries who have no memory or conception of working for a salary.  A nice, reliable voting block.

2.      Next, they hire more people to oversee the welfare programs that keep beneficiaries “on the plantation”.  We now need more and more bureaucrats at all levels who create no product but who do control the underclass.

3.      Continue to develop more and larger government programs, with unionized employees to recruit more and more beneficiaries.  Of course, all of the beneficiaries and all of the bureaucrats have a vested interest in the re-election of the leftists who created their own little Animal Farm.

As you can see, the left will attain critical mass which simply means the point at which the underclass and the bureaucrats who manage them plus many well-meaning sympathizers will become a majority voting bloc in our Democracy and they can then take control of the government in an honest election.

The Wisconsin State government is fighting an early, but truly important, skirmish for us.  They deserve the support of all who value Democracy.

American Exceptionalism

American Exceptionalism (AE) is a shorthand term used to describe our impressive record of success in the past 220+ years.  AE does not really exist.  Our past success has been the result of our willingness to rise to any challenge, until now.  It would behoove us to try to understand the various elements that fed our success so that we may have a chance to continue along the same path.  This plank is intended to provoke a discussion along those lines.

Several people have described one or another facet of human development (evolution, if you prefer).  Some examples;

A.      Challenge and Response – British historian, Sir Arnold Toynbee’s opus on the history of the many civilizations that have come and gone showed that the prior civilizations that have graced this planet grew and improved insofar as they responded successfully to various challenges.  As each of his civilizations reached a challenge to which they were incapable of responding, that civilization collapsed, faded away, and was cast into the dustbin of history only to be followed by another aspirant.

B.      Another version of Challenge and Response is the Survival of the Fittest.  This study appears to concentrate on the physical aspects of the evolution of one species or another and does not help us here as it reflects forced choices intra-species and not species v. species development competition.

C.      Economic systems – Humans have developed a variety of economic systems and has seen them compete for primacy.  The system chosen by our American forebears was and is Capitalism.  Effort results either in success or failure.  Success is rewarded and failure is, or should be, punished by exile (the dust bin).  We have heard the phrase or chant, “From each according to his ability and to each according to his need”.  This sounds good as long as you promise not to think about it.  As noted elsewhere, this system works in ant hills and bee hives.  It does not work with humans. 

A cynic might say that it is designed not to actually succeed, but rather to get a foot in the door.  After they are inside, the regulation begins.

Immigration (the old fashioned way) feeds into this and will appear later.

As can be seen, the antithesis of each of each of the above elements of success (Exceptionalism) is the far left celebration of mediocrity.  They don’t advertise it as such.  If you were told to celebrate failure, you might hesitate.  But, if you are told to celebrate non-success, as in celebrating diversity, you may just buy in.  What’s wrong with celebrating someone who wants to be celebrated?  The unspoken part of this seductive line is, any time, effort or other resource that you devote to celebrating something like diversity instead of something like success or personal achievement is time and talent taken away from supporting some manner of success that might benefit your civilization.  Which would you rather celebrate, the kid in your neighborhood who is trying to achieve success in school, athletics, etc., or a kid in your neighborhood who is ‘different’?  It would be nice if we could do both.  In the real world, you often must or should make a choice. 

Celebrating success runs like this;

a.      Approve of or pay the one who does something better or faster.

b.      People who want approval and pay will often work, study and train harder than the next person.

c.       Even if they do not win any prizes, those who train, work and study harder are better off because of it.

d.      The families, communities and employers of those who work, study or train harder are better off because of the effort.

e.      The result of all of the above is sometimes referred to American Exceptionalism. 

We are now faced with a well orchestrated effort designed to divert your attention from the efforts listed above to a celebration of unabashed mediocrity.  Will some of our diverse citizens also try to do something beneficial to the community?  Of course.  But why go through the diversity route and not reward efforts to succeed directly?

Our current age has been referred to as the "Gimme, Gimme, Gimme Generation".  Gimme simply means, “give me something for doing nothing”. 

It is hoped that we do not need to go into a long-winded explanation as to why "Gimme" works and where it leads.  Someone who needs an explanation probably would not understand it.  What we would like to do is open the eyes of those on the cusp and attempt to lure them back from the Dark Side of contented mediocrity back into the fast lane of American Exceptionalism. 

It has been said that many people miss golden opportunities because the best opportunities come described as hard work.  American Exceptionalism is just a bundle of challenges.  Are you up to a challenge?

5 Minute Course On Economics

a.      Capitalism = Democracy

b.      Communism (or its little brother, Socialism) = Totalitarian Gov’t

Anyone who has been conscious for any extended period during the most recent 50 years will recall that every left wing government followed the same game plan.

Step 1.  Change the name of your country to contain a collection of words including some or all of the following; People’s, Democratic, Socialist or Republic.  It didn’t take long for you clever readers to realize that any nation calling itself the People’s Democratic Socialist Republic was, in fact, none of the above, but rather a poorly disguised totalitarian (strong central) government.

Step 2.  Take control of the electoral process.  This could be done by killing off the opposition, control the voting process or simply by lowering control of the voting process and/or stationing loyal thugs at the polling places to make it clear that disloyalty to the Great Leader was frowned upon and potentially painful.

Why control the voting process?  Simple.  Rational people can not be counted on to vote against their interests forever.  And, most rational people understand that, while Socialism works beautifully in ant hills and bee hives, its record among the rational has been spotty.

As Oliver W. Holmes liked to say, “A page of history is worth a volume of logic.”  In this case, a paragraph of history will suffice.

Fortunately for us, our socialist friends made a big miscalculation after WWII.  They took control of Eastern Europe and gave us the Iron Curtain.  All socialists on one side and all capitalists on the other side.  Why was that a miscalculation?  Well, have you or anyone you know, ever purchased a car made in Eastern Europe?  Many of us look forward to the day we can afford a Jaguar or a Mercedes.  I don’t remember ever seeing a Yugo.  There is a similar wall between the two Koreas.  Have you ever purchased or seen an electronic appliance made in North Korea?  The idea of competition between socialists and capitalists is laughable.  The socialist prove to us every day that the only way they can win in any market place is control. 

That brings us back to our current central government.  It was recently reported that our feds were producing REGULATIONS at the rate of 375 pages per day.  Why do you suppose they do this?  The first reason that presents itself is this:

When a government produces 375 pages of regulations every day, you may safely assume that they are not in the business of governing; they are in the business of regulating.

Governing carries with it responsibility.  Regulating carries power.  Capitalists want to manage businesses.  Socialists want to control people, hence regulations.  And, if I can produce regulations faster than you can figure out what they mean, I win.  The theory is, the regs do not need to make sense.  The only thing that you need to know about their regs is that they are the regulators and you are the regulatees.  Get it?

And, what do the regulators regulate?  Everything and anything that you allow them to regulate.  One recent President described government regulations as harmful to our economy and insulting to our intelligence.  He had a passion for eliminating regulations.  Today, we appear to have a different mindset in the Executive branch.

You may have noticed that a pesky little word has necessarily crept into our discussion.  The word is ‘allow’.   At some point, you must allow them to apply their regulatory tether.  And, you must open your wallet, figuratively and literally.  Please understand, opening your wallet in front of a socialist regulator is like opening a vein in front of a vampire.  Contraindicated.

As bridge to the operative portion of this blog, allow me to introduce a new character. In literature, this character might be called the contagonist.  Simply here to advance the plot for good or ill, our contagonist is better known as the media.  In the past, the news media would merely serve as the conduit delivering news of the government to the governed.  They would satisfy their desire to be heard on the issues of the day merely by their choice of adjectives assigned to the various actors.  The Modern Media found this neutral role to be boring so they have padded their role and we now find them in the middle of the action, passing judgment or pushing their favorite back into the ring.  A recent example of the contagonist was the media reporting on the discussions of certain candidates trying to limit or end Earmarks.  One media contagonist noted dismissively that, “Even if you banned ALL earmarks, you would only save $10,000,000,000.00.”  Surely some readers silently wondered when ten billion dollars became eligible for the adjective, ‘only’.  Also, we are encouraged to note that, ‘Earmark spending is not criminal when a Congressman does it’.  Why does that sound familiar?

The purpose of this rambling narration is not to ramble for rambling’s sake, but rather to make several points in an objective manner.  Some believe that this is the appropriate way to present a platform.  One should avoid being a shill for one candidate or another when presenting an idea.  If you want to find out what this blog is promoting, you may have to read it.

NEXT:   AMERICAN EXCEPTIONALISM

THE OBAMA RECOVERY, OR DID TYPHOID MARY REALLY DISCOVER PENICILLIN?

There are some signs of life in the U.S. economy.  A few tentative economic indicators.  Look for President Obama to take credit and do a victory lap around the National Debt.

If you are told that we should give Pres. O credit for this phoenix routine, you might just seek a second opinion.  Or, just read on.  If you stop twisting my arm, I will explain.

For the first half of his term, Pres. O was given virtually everything he requested.  This included nearly a TRILLION DOLLARS of someone else’s money, to spend any way he chose.  It was called STIMULUS money and was guaranteed to revitalize our economy and secure his place on Mt. Rushmore.  Sadly, it did neither. 

Fast forward.  Now, after being left alone for about a year, our economy is beginning to breathe on its own and take nourishment the normal way.  Miracle of miracles, when the government stopped force-feeding nourishment (cash) into every known orifice, our capitalist economy started to do what capitalism is supposed to do: make a profit, create jobs, make more profit, create more jobs…

Why did this miracle visit us now?  Very simple, or a John Kerry might say, Tres Simple.  I will use small words and write slowly.  Capitalism is recovering, not because of any action taken by Pres. O, but rather because Pres. O and his accomplices (the Pelosi Congress, Public Employee Unions, ACORN, et al.) have backed off.  Did you notice that there have been no major strikes, no significant “Sue the Bastards” activity from our Sue the Capitalist Bastards Liberties Union, A spinal transplant at the House of Representatives (compliments of the U.S. voters) no Cap and Trade, Card Check or other programs like the ones that killed Spain, Ireland and Greece.

In other words, stark reality stalled the Pres. O plan to fundamentally transform the way we do business.  In default, we fell back on basic capitalism.

So, in answer to our opening question, Typhoid Mary did not invent penicillin, but rather, the threat she posed stimulated others to take whatever action was necessary and doable to stall her economic plan, oops, I mean to stall her type of epidemic.  We suggest that the unfettered growth of the new Axis of Evil and the miraculous rise of Pres. O have brought us close enough to the brink that all but the most compassionate among us are willing, as a last resort, to consider a course correction.

Now, if Pres. O or some member of his crack economic staff read this, they will realize that there is a gem lurking herein: If Obama can control himself and leave the economy alone, he will be re-elected in a landslide.  A simple right turn onto Capitalism Avenue.

Epilogue

As noted supra, Pres. O and his accomplices will try to take credit for the modest recovery.  If you are still shopping around and kicking a few tires before you decide whether the current economic activity is the result of inevitable capitalism or the result of Pres. O’s maiden voyage on the sea of grown-up economy, do yourself a favor and look back at the promises and predictions this administration made when they requested the TRILLION DOLLAR pull-toy.  If you find any original promises/predictions which actually came to pass, or any recent promise/prediction which could explain the uptick that tickles us so much, please let me know.  I will pass it on.

Affirmative Action-A Magnificent Failure and The Reb Nachum Syndrome

AFFIRMATIVE ACTION – THE MAGNIFICENT FAILURE THAT KEEPS ON FAILING

This needs no detailed background report.  We should give credit where credit is due. Affirmative Action (AA) is not simply a failure: It is a magnificent failure.  I defy you to name another program with such universal approval, government support, total lack of opponents, unlimited financial backing and, finally a complete and absolute lack of success.

From day one, rational persons who approve of AA in principal, have tried to bring attention to the simple fact that, as presently tasked, AA is a classic case of irrational behavior.  Consider the following proof:

A.      Two men apply for a job; a black man and a white man.  The black man is better qualified but the white man gets hired.  This is wrong.  We all it racial discrimination.

B.      Two men apply for a job; a black man and a white man.  The white man is better qualified but the black man is hired.  This is equally wrong, but we applaud the decision and call it Affirmative Action and we are proud of ourselves.

We have appeared to have achieved a result that every educated person recognizes to be a logical impossibility.  We have taken two wrongs and we claim to have made a right.  Of course, we have done no such thing.  We have convinced ourselves that we see a right because it is politically correct to do so.  Like ingesting a small dose of some controlled substance, we have deluded ourselves into thinking that we have reason to feel good.

What have we really accomplished?  I don’t think that you want to know, but I will tell you anyway.  Let’s see how many wrongs we have actually committed in our misguided search for a right.  We have:

1.      Shown both applicants that fairness doesn’t apply to them.

2.      Lowered the quality of work to be expected from the anointed also-ran.

3.      Convinced the employer that maybe out-sourcing is the way to go.  China doesn’t have Affirmative Action.  They simply hire the best qualified applicant.  Case closed.

4.      Convinced the employer that, if he can’t hire the best qualified, maybe he should avoid black applicants altogether.  One of them may, in fact, be the best qualified.  We may never know, because the employer may have been required to hire a lesser qualified person before the good guy shows up.  One black businessman told me, (in confidence, of course) that, “When I am ordered to discriminate against white people, I am also being ordered to discriminate against myself and my business.  Of course, the Congressman assured me that I should not worry about quality because she will get me a minority set-aside grant.  Should I be happy being a profitable, unfair failure?

5.      How about the simple concept that someone in this scenario should be trying to advance that concept of right and wrong?  Nah!  Too old fashioned.

I could go on, but we all know that truth in O. W. Holmes’ observation that, “A page of history is worth a volume of logic.”

Let’s glance at the history of AA.  It has been around for 60 years.  How many of us can say the same thing about ourselves?  This means that we have been following this illogic for our entire lives.  Is there any way to get off this merry-go-round of absurdity?  Can we just stop it?  The dog says, “GRRR!”  I guess this means that we can’t. 

Are we being told that white employers are irredeemably evil?  Or are we saying that blacks are genetically inferior and will never be able to compete on a level playing field?  The first has been proven to be invalid.  How?  Look at the other non-whites among us.  They have accepted that the rules are stacked against them and they have succeeded incredibly well.  So much for the “evil” argument.  As much as we dislike saying it, the blacks are the only ones claiming to be discriminated against. 

If you are not convinced of the one-sided nature of this silly program, let’s go back to the 60 year time frame.  Let’s suppose that you are asked to evaluate the program in the context of “continue or end”.  To do so, it would be necessary to establish a parallel situation where we do not have the same level of hysteria.  Let’s suppose that you are selling a medication to hospitals.  You have a good sales pitch and the hospital gives you a trial order.  They then try your medication on appropriate patients and notice no marked improvement in their symptoms.  You tell them to try it a while longer and longer and longer.  After 60 years, the buyer for the hospital says, WTF.  How do you convince him to try for another 60 years?  Can you really conjure up a need for your nostrum?

Actually, you don’t have to demonstrate a need.  Remember, you are the dog with a bone.  You don’t have to convince anyone of your need for the bone.  You simply growl at them and they will leave you alone.  The argument is settled (as long as you back off).  The other side has accurately gauged your cowardice.  Case closed.

AA forever!!  How about a cabinet level department of AA?  How about an AA political party?  Oh, wait.  We already have something better.  We have the NAACP. 

AA fans should not read any further. 

How about we simply do the right thing and tell everyone that they will be required to take the same tests and live by the same rules as everyone else?  Did you ever dream that you would like to see all people judged by the content of their character and not by the color of their skin?  I have.  And, I admit that I am not the first person to do so.

Unfortunately, some of our friends believe that such dreams are racist.

Think about it.  Let us know if such a dream will ever become a reality.

The Reb Nachum Syndrome

Watching C-SPAN recently, I was treated to a real live example of the Reb Nachum Syndrome in action.  In case you have forgotten, Reb Nachum is the name of the Beggar in the great Fiddler On The Roof.

The eponymous syndrome describe’s Reb’s economic theory.  His method of supporting himself consisted of wandering the streets of Anatevka, presenting an empty palm to one and all.  His compassionate fellow citizens usually deposited a coin or two.

It happened one day that Tevye, the hero of Fiddler, was having a variety of problems.  He tried to explain to Reb that he, Tevye, was having a very bad week.  Reb replied, “So you’re having a bad week.  Why should I suffer?” 

Thus, the Syndrome:

“If you are having difficulty paying your bills, that does not excuse you from your civic duty to pay mine.”

Sound familiar?

The C-SPAN discussion involved a Congressional effort to apply a modest reduction to a long-standing hand out program.  Just reduce it a bit.

The reaction from several members of Congress was borderline hysterical.  ‘How dare you try to reduce this program that we have come to rely on?’  Not up to Reb’s standard of eloquence, but Reb had better writers.

The argument against reducing the give-away program was the classic, “such reductions will fall disproportionately on the poor.”  Well, duh – oops – strike that.  With all due respect, Gentle Congressperson, we should remember that, that which is coming down, once went up.  What I mean is this: When we are discussing a give away program created specifically to benefit poor people, any and all prior funding, by definition, disproportionately benefited poor people.  Any reduction in funding, to be fair, must mirror the previous increases in funding.  That is, any reduction will disproportionately be detrimental to the poor.  Does anyone, rich or poor, fail to understand that?  Put your hand down, Congressperson.

As you can see, the problem that we are facing (that is, the real problem - A permanent underclass) is not something our current Congress or current Executive is even considering.  We suspect that they will make their arguments on the current budget on C-SPAN and then go into some back room and come out with a compromise which does nothing but kick the problem down the road.  

As noted elsewhere, politicians worry about the next election while public servants worry about the next generation.  The gentle Congresspersons opposing reduction in Pell grants or any giveaway program will doubtlessly be re-elected.  The constituents who survive only by reason of ‘entitlements’ will continue to beg and will become increasingly impatient with working people who want to keep some of the money they earn. 

The Gimme, Gimme, Gimme generation is not a fad.  It is a permanent and ravenous underclass and it is well represented in Congress.

I think I should sign off now.  I am beginning to scare myself.