A Patriots Manifest June 20 2008
William White
While writing I looked around to see what was not available when I was born in 1952 and the list does seem small: computer and peripherals; calculator; screw in fluorescent bulbs; CDs and player; a wireless phone; and a remote for my stereo. In other words I have more computing power than the entire world I was born in. I have more access to better information as well. Since I am not real heavy into computers I did some double-checking in addition to bits of memory/$ increasing at 41%/year there appears to be a 5% /$/year improvement in the software that runs the hardware. In real money, say 1990 dollars, hardware and software has been dropping like a rock all of my lifetime. This has driven quality improvements in other products.
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I have a three piece multi-tool kit with holster that, in theory, contains enough tools to build a house. Next to it are ol d cassette tapes I have not yet thrown away they also didn’t exist when I was born either but back to the multi-tools. Could you have obtained such a kit when I was born? With a second mortgage on your house, sure.18 tools made from stainless steel and small enough to all fit in a hip pocket without crippling and big enough to be used when a hammer and crescent wrench is needed, sure. But instead of $5 at Wal-Mart which I paid only 4 years ago 30 years ago the same sort of “can afford to lose” tools would have run about $50 in 1978 dollars and would have been much bulkier. And you need inexpensive tools when giving estimates because gifts are great sales tools but at the same time you don’t want to win more than about a quarter of non-referral contracts because it means you are bidding too low. That means you need lots of cheap but useful tools to build referral business so you can spend more time working referrals and less time dealing with peop le who don’t know you from Adam. I have no need for the multi-tools I simply bought them because I realized what great sales tools they would have been back when I was in construction. Leaving aside inflation (at least 400% since 1978, 1000% for housing in the same period.) gift tool costs for estimates have decreased by 90%. That kind of cost reduction makes it effectively a new product that was not available when I was born.
If I have all this stuff that kings and Presidents could not get at any price when I was born then by historical standards and pretty recent history I am rich but so is everyone else. My wife sent in the last debt payment in Aug of 1992 so we have a respectable net worth too. But I know people with lower family incomes and much lower net worths that live higher on the hog than me and Gail. So why do so few of those people feel rich today? At least many of my neighbors complain about more month than paycheck. Two weeks ago my wife ann ounced that our real estate taxes were down and I checked and found out that 1% of the houses in our neighborhood are in foreclosure. Spoke to one of my neighbors and told him the good news that within a year it would be possible to pick up rentals at $.10/$1 or less thus lowering the tax bill and he went into shock. Everything east of the intercoastal is supposed to go up by 10% every year minimum and if it doesn’t his home equity loan will bite him in the butt.
The product life cycle is going too fast to be usefully measured: vinyl, 8 track, cassette, CD? Or videotape, DVD, HD DVD? I don’t know what the next stage in these processes will be but I do know to hold off until prices come way down because it’s fairly certain that there will be another stage. Take the internet we are on. Usually the connection is two or three generations older than current state of the art. Will cable, landline and wireless connections recoup their investment prior to something bette r coming along? I don’t know and I suspect your provider doesn’t know either. This is not the economy of Smith, Keynes or even Friedman. Wireless is dominated by Finland, in part, because no one else would touch the technology. Come garbage day look out the window and see how much recent but obsolete technology is being thrown out, not all of it paid off. About 10% of the technology in the original “Star Trek” is available now: video cell phones, anti-matter containment fields in Switzerland and pretty good imitations of phasers such as tasers. Warp-drive, if it is possible, may be seen in most of our lifetimes. In fact the equivalent possibility of warp drive is touched on in “How to Build a Time Machine” by Paul Davies, it can be found in the science section of your library although it may have to be borrowed from another library.
This kind of upside uncertainty is not yet part of our political culture. Cable the old wave of the future ate up a lot of political capital getting the country wired, Satellite dishes ate into market share to force up cable costs to pay for debt and in less than a year digital TV may make 40-80 channels available by rabbit ears. When at least some cable companies go bankrupt what will that do to internet connections? Well fiber-optics construction will go bye-bye for a while. This will floor the politicians. A great deal of inflation was created to fund what they didn’t realize were transitional technologies such as 8-track stereo, the game machines of the 70s and so forth. And many people went out and bought this stuff on credit. Then prior to paying off the wave of the future, the next wave came along and they owed money on obsolete crap. But this time the politicians were more certain and opened up the credit spigot to fund “the final wave” of the future: cassettes and computers by Atari and Commodore. OK that was wrong but Apple and IBM would never disappoint. I had peop le tell me I was an idiot for not buying Microsoft when it had no dividend. I still own no MicroSoft stock. Why? Because improvement in software writing software is so fast and computer hacking so common that an explosion in the number of operating systems is inevitable. MS may do quite well off apps forever but I don’t know that.
So credit has been inflated to finance the wave of the future only those waves have been endless and so has the debt. Also some of that debt was spent on other things such as the housing boom. Any and all government economic policies should be pay for performance and leave the money supply alone. But also there are downsides that are not obvious. Take for example government specie currency.
Should the US government be in the banking and currency business? Let’s say this fall the Constitutionalist candidate takes office and LP, CP and paleo-conservative candidates gain control of congress and establish a goal of US currency equal to $20 /oz gold or $1.29 for silver. Where is it written that silver is worth 6.45% of gold by weight? Starting at $1,000/oz getting gold and $64.5 silver sufficient to maintain the money supply is not a problem what is a problem is the possibility of hard currency hyperinflation. Mining and refining technology is also continuously improving. The possibility of mining the sea and space could drive the free market price of gold and silver well below $20 and $1.29. Isn’t simpler to have metallic warehouse receipts and government supervision of the warehouses? It’s one thing to promote the industrialization of space or ocean mining through an offer to buy the fist billion ounces of gold from these sources at $1K an oz. it is a totally different matter to set a treasury price. Just let supervised warehouses issue receipts on any metal they want and simply denominate prices for tax purposes in gold until the market chooses some other metal as its standard. Most people realize the Fed isn’t and earlier the first and second banks of the United States weren’t perfect but don’t realize that it has gotten increasingly hard to define what money is or the value of the goods and services that they can buy. A few years back “The News Hour” ran a piece on the computation of the CPI. At that time the commerce department had not figured out how to work in prices from big box stores much less Sam’s Club or Costco. Internet prices may not make it into the price index until 2020. Plastic money is, or at least was, not considered part of the money supply. More importantly it did not exist during the specie era. So why not just go with a consumption tax: FairTax or VAT; with prices denominated is gold and bypass this mess? If the government does not need to do something then it needs to not do it.
One of my ideological disagreements with Mike, my publisher here, is that I am of the firm opinion that the constitutionalist movement underestimates the self destruct ive paranoia of the modern internationalist establishment elite. Whether it is the first or second Bush, either Clinton or whoever, they either come across as somewhat goofy: the Bushes, Ford and Carter or bloody, barking bonkers: the Clintons, LBJ (actually Johnson straddled the fence between the two modes but it was mostly bonkers) and Nixon. This lunacy is perhaps best illustrated by the Global Warming debate. Don’t get me wrong I consider letting pollutants get on or in someone else’s property whether it be “greenhouse” gases or not a crime. Whether the damages are bad enough to fight over is something for the courts to decide but that is not my problem with global warming. The basic idea that weather is or even can be measured with sufficient accuracy to make it possible to figure out whether global warming/cooling/whatnot was going on was disproven in 1961 by Edward Lorenz an MIT meteorologist. This proof was so simple that it created a whole new branch of mathema tics: Chaos.
Without an infinitely long number registry rounding error will compound and not cancel out. This is a counterintuitive conclusion but the proof is very simple. Take a number X, X must be divisible by at least one prime number other 0,1, 2 or 5. 1 is divided by X then multiply X times the written or displayed quotient and here’s the catch when numbers are transmitted to a single computing center the recipient has no idea what is or isn’t rounding error. Wysiwyg is the only rule that makes sense in this case .333333(8) looks the same as .333333(….) with six decimal transmission. This is true with a calculator too. Whole numbers don’t cause big trouble fast but whole numbers don’t exist in weather measurement. So there is grave doubt as to how much the margin of error in measurement is for the past. Worse yet greenhouse gases occur in minute quantities. 0.0016% is the most common figure I hear for total man created CO2 in the atmosphere which mak es measurement tricky. All other sources of possible warming such as the sun, Mars and Jupiter appear to be warming, tend to be disregarded. And for that matter meaningless but seemingly significant trendlines can be found in any Chaotic system. The certainty of Global warmers is clearly delusional even though some of the recommended remedies strike me as relatively sensible precautions to take in order to create energy independence and a more sanitary and healthy environment.
What is bizarre however is that instead of encouraging the private funding of carbon neutral/minus energy production through biotech (At least two firms have created critters that produce fuel from waste. That may or may not make commercial sense but it is more than what DOE has come up with.) or nuclear power or mining the Moon for He3 or any other defensible position what do we get? Wind mills, solar cells (solar thermal can make economic sense but for most uses solar cells do not d ue to expense.), screw in fluorescents (LEDs are more efficient and less hazardous) and similar not so bright ideas. These lunatics are setting themselves up like bowling pins. Which brings me to an important question: if our opponents are doing their level best to destroy themselves why are we interfering?
No one in the minarchal constitutionalist movement can possibly do more damage to the internationalists than what they are doing to themselves. However we can do great damage to our own cause by making unsubstantiated claims such as the free market is so self-regulating that it can never cause major damage to the economy and its citizens. How about the rate of innovation is uncontrollable in any real sense? The fall of communism showed that. But let’s go back to my claims about Global Warming for a second . In math between predictable order and disorder is an area of bifurcation or doubling of cycles that led to Feigenbaum’s constant, 4.6692016090, an irration al number. Any type of activity that is cyclical and can easily be made disordered is prone to bifurcation. Oversimplifying Feigenbaum’s constant demonstrated why any economic or weather trendline is effectively meaningless. The reason it is meaningless that such measurements intersect one or more imaginary axes. I don’t know enough about meteorological measurement to identify any of the imaginary axes. However when it comes to economics I can identify at least three imaginary axes that intersect supply and demand: Government regulation, Innovation and demographic cycles.
Government regulation and taxation as a source of economic instability has been known forever and studied and quantified scientifically for more than 230 years. Innovation as a source of upside instability that creates a downside with market saturation has been studied for at least half that amount of time and is associated with names like Juglar and Kondratiev. Demographic cycles on the o ther hand are just now maturing because comparable census data only goes back to about 1750 in Finland and Sweden, 1800 in the US (the 1790 census was a guesstimate) and other fairly recent dates for other countries. Strauss & Howe in “Generations “ and subsequent other works have argued for an 88 year 4 generation cycle. Similar arguments have been made by others as well and while the details do matter the basic model is three generations of limited reproduction followed by a baby boom such as the most recent 1943-64 boom. This cycle can be derailed as happened during the US Civil War but the cycle did reassert itself in the period 1890-1910. There is also a 111 year cycle that should have started a great depression in 2004 and there may be a 400 year cycle that should lead to a constitutional restoration of some sort in 2020 around the 400 year anniversary of the Mayflower landing. This cyclical reinforcement may have also occur red in the Mexican revolution of 1911, Poland’s post-WWI reemergence as a nation, Ireland in the 1920s and Bolivia in 1950. However there is not enough data to be certain that there is a 400 year cycle.
The 111 year cycle is probably demographic as well. The 10% or more unemployment of 1893-8 was measured and is listed by the census bureau in “Historical Statistic of the United States from Colonial Times to 1970” in hardcopy and presumably online as well. The two coups in the US in the 1780s: 1783 and 1789 were caused by currency collapse and mass unemployment that followed effective victory in 1781. The 1672 stop of the Exchequer led to Nat Bacon’s Tidewater republic of 1676. While the great depression cycle has been traced back to Sumer (“A Short History of Interest Rates” originally by Homer Lindsay and now revised by a successor made the claim of great depressions going as far back as can be measured. There are two depressions per 111 year cycle and the non-cyclical great depressions are just that. 1931-41 was rough, so was 1837-42, the 1721 South Sea Bubble and 1637 end of the Tulip Craze but where is the regularity of a cycle?) there is insufficient regularity to claim as Kondratiev to claim there is a single cycle. In any case the standard Hicks-Hansen model of the economy does not deal directly with regulatory drag, innovation or demographic changes.
Claiming the economy is totally self-regulating is unnecessary. It is simple enough to say that of the known economic destabilizers economic regulation is the only one without an upside
The views expressed by William White are his and his alone and may not be the views expressed by A Patriots Manifest. Thank you .... Michael Roller...