Category: Uncategorized

“History doesn’t repeat itself, it just rhymes.”  Mark Twain

This old quote is so often repeated that we would think society should have come to terms by now with how to avoid repeating the same mistakes; while Twain understood that events are never identical, he wrote often about society’s repeated behavior in similar situations. Given our historical resources, why does society so often get on the wrong side of history; it’s like failing an open book test, a sure sign of willful ignorance. Cynically, Sigmund Freud dismissed it all as “History is just new people making old mistakes.” When we hear Mamdani, Sanders and AOC speak in support of socialism, they ignore the historical reality of the inevitable failure of centrally planned economies; these are the voices of ignorance using words cloaked in deceptive labels like “progressive” or “democratic” in order to make us think that somehow this time things will be different.

You don’t have to be an economist to understand on a commonsense level that debt is not a good thing, that deficits are unsustainable, and that nothing is free as someone always pays; but here we are with so many politicians telling us the opposite of what common sense, and history tells us is just not so. The legacy media reports about polls that show there are many Americans who think that socialism is a good thing, while at the same time so many are concerned about saving democracy; is this a contradiction or an insight into the relationship between the two? The very word “history” comes from the ancient Greek word for “inquiry”, or “witness”, meaning to know something by investigation or actually being part of it; the former relies on those who have written about being a part of it because we weren’t, and the latter relies on our understanding of what’s going on around us. Thomas Sowell observed that “One of the most important reasons for studying history is that virtually every stupid idea that is in vogue today has been tried before and proved disastrous before, time and again. Do we need to keep repeating the same mistakes forever?”

Is such repetition the definition of insanity as Einstein noted or is there something else at play that brings society time again to the same dismal result when socialism is embraced? Heinlein made a very insightful observation when he said that “A generation which ignores history has no past and no future.” I think he’s really on to something there, although it’s not so much that recent generations “ignore” history, it’s more that prior generations failed to educate them about it, or even worse, to rewrite it in support of some narrative. These narratives are constructed on a very facetious and fallacious concept called “Presentism”, i.e., judging the past based on current standards and values; this creates a very distorted context as it’s not the one that existed at the time of past events, leading to prejudices based on ignorance.

There are politicians who use language to disguise socialism’s inherent authoritarianism with labels like “Democratic Socialism”; this is just to create an illusion that somehow you can have freedom while you destroy it. According to Karl Marx, “Democracy is the road to socialism.”; maybe that’s less an illusion for socialism than a delusion about democracy, a system of government that operates on the premise that your individual rights don’t exist because you are outnumbered. For some politicians, the fear of losing power underlies the anger they direct at those who expose their failure to perform the foremost existential responsibility for government to begin with, which is the safety and security of the citizens they are sworn to protect.

Change is not synonymous with progress. During the 60’s and 70’s, things changed; while we didn’t have ANTIFA or HAMAS, we did have SDS, and the PLO. While free speech was all the rage, there was also rage against those who had a position contrary to whatever group objected to it. Rock was here to stay, while pot was illegal everywhere, like alcohol during the prohibition (now there’s a definite historical lesson to learn with that). Race, sex and the Viet Nam War dominated the social debates, while today we have the race card, gender identity, dominant drug cartels and even more wars; this does sound like a rhyme, and it keeps getting dumber. Consider the choices of running mates that presidential candidates have made starting with Obama, and why; they didn’t want anyone more intelligent than themselves, so Obama took Biden, Trump takes Pence, Biden takes Harris, and Trump takes Vance. This is not going in a good direction considering how many VPs ran or will run for President.

Historically, socialism has always failed because it is not about creating wealth but redistributing it, lasting only as long as there are capitalists around to pay for it; in every sense it’s a parasitical system. There is no virtue in any engineered economic system as they all rely on coercion and so are contrary to the natural laws of humanism, so contrived as to rely on ignorance and envy that all it can do is create misery in the name of equality; historically liberty only exists with equality of rights, but equality of wealth only exists with a government with totalitarian powers.

“The history of the 20th century is full of examples of countries that set out to redistribute wealth and ended up redistributing poverty.” Thomas Sowell

“Republics decline into democracies and democracies degenerate into despotisms.” Aristotle

I came across “hamartia”, which means “fatal flaws”, in reading an article about how Hayek and Mises addressed those delusional developments of modern society that become fatal laws; the concept comes from Aristotle in his analysis of Greek tragedies. The fatal flaws begin with the narcissistic behavior of those who claim to know what is best for everyone; it is pure hubris, a character trait that Aristotle observed leads to ruin.

The reason such delusional aspirations and grand plans for humanity invariably end in disaster is that they ignore the realities of human nature itself. Adam Smith was a philosopher and sociologist at the time he wrote “The Wealth of Nations”; economics as a field of study did not yet exist. What Smith did is use his perceptions of society for empirical knowledge of human behavior, particularly in activities involved in what we today call an economy. So many of today’s economists are obsessed with “modeling” how markets should function, when in fact the role of economists is to be objective observers of how they actually function.

Nothing reflects more the nature of a society than its economy, and the measure of its success is its health, freedom, and wealth. When there are free markets, you have an organic and spontaneous economy because people are free to associate and interchange services, goods, and ideas; when government enters the market, you get the parasitic and compulsory behavior of power for sale. Such corruption metastasizes throughout society, affecting its culture, politics, customs, and institutional structures; without free markets, you get less healthy, free, and wealthy people.

I don’t think that Aristotle’s opening quote above necessarily means that he thought that the political evolution he described was inevitable, but as a warning. Mencken knew this and followed through with his observance that “The ideal government of all reflective men, from Aristotle onward, is one which lets the individual alone, one which barely escapes being no government at all.” Aristotle and Menken were empiricists, deriving knowledge through perception in order to understand reality.

There are many examples of current social and political realities that qualify as fatal flaws, most are a long time in the making; we don’t have to go back very far to understand the sources to identify fatal flaws. They all evolve from flaws created when basic principles which safeguard against them are ignored or sometimes even abandoned; for example, constitutionally only Congress can declare war, yet it passed the War Powers Resolution of 1973, intended to limit the President’s authority to use military force while it contrarily defined a process for his ability to do so. It was fatal as it made the President a warlord, just like King George III.

Wars are expensive, so you need lots of money. Income tax was a hard sell for Wilson as he needed to amend the constitution and the marketing for that was the ludicrous idea that a progressive tax system would reduce revenue disparities; the 16^th Amendment was passed, but it did nothing of what was promised other than enable politicians to wage war, and create a lot of fatalities. Oh yes, tariffs are taxes and SCOTUS recently ruled against Trump as the President has no constitutional power to levy them; we hardly need a warlord with also the power of legalized theft, which is reserved for Congress.

The constitution clearly reserves all powers regarding immigration with the Federal government, and current law is clear as to what is required regarding illegal immigrants. The flaws are the near criminal negligence of the Biden administration regarding border security, and the moronic action by some state and local governments creating sanctuaries and inciting their constituents to riot, creating chaos so volatile it borders on insurrection. The last time we had one of those more than 650K Americans died; that’s extremely fatal.

There is no provision in the constitution regarding filibusters; the Founders simply did not anticipate that Congress would actually find a way to do nothing. Both major parties have used it, condemned it, and promised to end it; the closest they came to doing so is the “Cloture Rule of 1917”; now would be a good time to use it as we have another shut down, and while such actions are always fatal flaws, this one is especially dumb given that the demands to cut funds for ICE comes after they have already been appropriated. This shutdown affects agencies like FEMA and TSA that have nothing to do with immigration; the fatal flaw here is putting citizens in harm’s way, a consequence created by those whose job is just the opposite.

If anything reflects badly on the moral fiber of a society it is child abuse, and gender transitioning minors is as clear an example of this as the revolting medical experiments involving children in WWII by the Nazis; so horrified was the “civilized” world it created the “The Nuremberg Code of 1947”, an international declaration of ethical practice. There are legal cases regarding gender transitioning of minors, initiated by the victims of such horribly misguided medical procedures; I remember reading an article about this in which the author James Bradley commented that “Calling sex changes for children gender affirming surgery is like calling serial killing population control.” Well that just about sums up that fatal flaw.

Racism is perhaps the most repulsive form of collectivism, a fatal flaw that deals with humanity in terms of groups, not individuals. The obsession of progressivism with racism is inherently racist as it primitively focuses on biological traits to categorize people’s intellectual, social, and ever more so, political characteristics. Promoting such social and at times political policies like DEI makes apparent that evaluations of people are being made not based on merit, but race, which is by definition racism. This flaw is not limited to any race, it’s a vice that’s very “inclusive”; Thomas Sowell eloquently observed that “Racism has never done this country any good, and it needs to be fought against, not put under new management for different groups.” Racism inevitably leads to violence, like the American Civil War which is still the leading conflict for American casualties.

The Federal Reserve Act of 1913 created a central bank that in effect became America’s economic directorate. How this came about despite a long history of American hostility toward such a flawed idea is covered in my blog “Remember Hyde” (09/25/20). Add to this the subsequent policies of FDR and Nixon ending the gold standard, making the US dollar a fiat currency, which is devoid of any intrinsic value with which to protect wealth from the confiscations caused by the inherent inflationary nature of fiat currency. P. J. O’Rourke once observed that, “A U.S. dollar is an IOU from the Federal Reserve Bank. It’s a promissory note that doesn’t actually promise anything.” When inflation becomes a monetary policy, higher prices are a consequence of the bad ones, and fatal if you want “affordability”.

A common example of fatal flaws is perfectionism, an obsessive search by despots for great plans to save the world, even as you make it worse; the reality as George Orwell observed is that “The essence of being human is that one does not seek perfection.”

“Ours may become the first civilization destroyed, not by the power of our enemies, but by the ignorance of our teachers and the dangerous nonsense they are teaching our children. In an age of artificial intelligence, they are creating artificial stupidity.” Thomas Sowell

Unfortunately, Sowell’s observation, while empirically obvious, is not limited to recent generations; that could not be the case simply because there were teachers who preceded those generations who taught children such “dangerous nonsense” to begin with. I’m a “Boomer” so I was not subject to as much of that nonsense as later generations were; it seems that such nonsense is like an annuity in finance where you’re paying dearly but have limited access to its value, which due to inflation is declining. Education is not supposed to be like that; it supposed to be something whose value exceeds what is invested in it with enhanced productivity providing long term growth. This is the metaphorical way I look at one of the most important and sometimes the costliest investments parents make for their children.

Listening to the financial news, I hear that many experts attribute the recent stock and commodity “corrections” to the hyper spending by many corporations investing in A.I., which is expanding corporate debt to dangerously unsustainable levels. While this is causing many investors to pull back on their positions with such companies, few of them can tell you what A.I. is, which I bet is the same for most Americans, me included. Then why is everyone constantly talking about something they know nothing about? I have learned that A.I has been around for decades, but our educational system appears more concerned about gender and race than the sciences that would enable children to know about what may very well be something bigger than the Industrial Revolution or the Nuclear Age.

Another heavy news item is the trend for Americans, especially the younger generations (I can say that now because most generations are younger than me), to think that socialism is something worth trying, you know, like the latest vitamin supplement, protein drink or skin cream. I read in the NYT that recent polls found various levels of support for socialism and capitalism, ranging from 39-43% for socialism and 54-70% in favor of capitalism. In all cases the pollsters also found that few of either group could explain what socialism and capitalism are; how can this be a serious debate at a societal level with such profound ignorance about something as basic as the economy in which in some way, shape or form we are all a part of? How is it that most elementary and secondary schools do not even have a class on economics while the US is supposed to be the largest economy in the world?

However, the prize for the most newsworthy topic of current times is immigration, especially the issue of deportations by ICE; again, the ignorance about the topic is only exceeded by the hysterical level of debate…..check that, there is no debate since name calling does not qualify as civil discourse. Further, violence against civil authority is often the cause for violent reactions. When taken together with the violence from the criminal elements within the immigrant community, we have a triple down effect caused by dangerous nonsense. The US Constitution is very clear that only the Federal government has jurisdiction of immigration in the US, but again it’s apparent that few know and understand that, including same governors and mayors. Is there anyone out there who has ever had a civics class in elementary school (Boomers put your hands down)?

I use these examples of hot button topics because what’s common to all of them, and many others, is the ignorance created by not only the lack of education, but the behavior by those entrusted with teaching our children who substitute basic knowledge with irrational narratives about gender, race, transitioning, climate catastrophizing, etc., leading them to think “…the end is near…”; little wonder we have the highest rates of mental illness among the young in our history, and coupled with ever falling academic metrics. Where A.I. takes us is unknown, yet everyone seems to know, everyone except me and most Boomers; what we do know is that we are we are more and more failing to use our organic intelligence, the kind we are born with but like food, we are being fed the artificial kind, losing our ability to think.

“We are all born ignorant but one must work hard to remain stupid.” Ben Franklin

“The most dangerous man to any government is the man who is able to think things out for himself, without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, and intolerable.” H.L. Mencken

From the ancient Greeks we have “kleptocracy”, the name for governments ruled by corrupt leaders (kleptocrats) who abuse their power to exploit the citizen’s wealth for their own advantage and enrichment; this need not be done outside the law as laws can be created to facilitate the deception that it’s all in the cause of the greater good. Once such a cause is established under law, what remains is for the bureaucratic process to move the money along the path to where it can be used by those politicians who created those laws for their benefit.

It is not so much that Mencken is being cynical about the inevitability of such corruption, but observant both historically and regarding the current circumstances of his time; he lived through a very chaotic and transformative era in America from the end of the Great Frontier to the Cold War. While it was a period of huge economic development, it was also a period of wars, depressions, revolutions, and the growth of extreme political partisanship; in it all he saw the rise of statism, both home and abroad.  What he also observed were the failures of “democracy” to preserve the liberties so essential for the health of the Republic.

The recent news hysteria about all the fraud being found in so many government welfare programs would not really have surprised Mencken because as a journalist, essayist, satirist, and cultural critic he had written and spoken often of the same problems of his time; what I believe may have shocked him is the magnitude and conspicuous nature of such corruption of our time. It’s not only the huge amounts of money involved in the cases found in Minnesota, California, etc., but the declared ignorance of the problem claimed by those responsible when in fact it was known to have been going on for some time.

There’s another word that comes down to us from the ancient Greeks, this about willful ignorance, i.e.,     agnotology; they saw this as a cultural or societal phenomenon where the ignorance of a people provides their leaders with the political tools to manipulate and deceive them. The most vulnerable are those that suffer from economic and financial illiteracy; it’s not an affliction limited to “developing countries” but prevalent in much of the so called developed western countries, in whose societies so many lack the knowledge necessary to make sound decisions about their personal finances or understand the economic consequences of their governments policies.

The common vehicle used by those that wish to deceive people about the corruption inherent in the nature of government welfare programs is the ignorance of the people themselves; when there’s opposition to such proposed laws, there is a default response mechanism we have come to know as “Virtue Signaling”, cloaking the self-righteous as advocating against racism, capitalism…or whatever label works to shame the opposition and avoid transparency. The unfortunate combination of ignorance about economics, finance, and virtue signaling is that all too often it actually works in favor of corruption…until it doesn’t!

Will Rogers once observed that “The United States Senate opens with a prayer and closes with an investigation.” When schemes such as those discovered in Minnesota, California, etc., are exposed, we get the scandals, the investigations, along with the obligatory and mind numbing endless news coverage, full of partisan posturing and “expert” analysis; what we never get is all that money back, accountability and an end to the policies and programs that caused these problems to begin with.

“Beware of altruism. It is based on self-deception, the root of all evil.” Robert A. Heinlein

“If you look at the drug war from a purely economic point of view, the role of the government is to protect the drug cartel. That is literally true.” Milton Friedman

Good old Milton was way ahead of his time as his above quote is truer now than it was in his day as we have entire countries whose governments are the cartels, like Venezuela, Mexico and Columbia. The Mexican cartels remain the largest organized drug lords in the world. Consider the fact that the “War on Drugs” is more than 50 years old, and the cartels are still winning; talk about waste, fraud and abuse and you have to include this failed policy that keeps on taking tax payer money, and keeps on failing.

Politically Mexico is divided into 32 federal entities, actual sovereign states, each with their own constitution and governing bodies; such a structure not only makes it difficult to exist as a federal republic, which in one sense should mean governance closer to and by the people, but in reality has enabled the societal gang cultural to flourish. This primitive political environment has produced the powerful cartels that rule most of these states.

While the US/Mexico border is now secure, at least in comparison to the prior administration, there is still a huge trading economy between the two countries, including considerable tourism. While President Sheinbaum has proven to be a very popular politician, Mexico’s cartels have proven to be highly resilient criminal enterprises. I recently read the New York Times article “The Hidden Cost of Your Avocado”; Mexico is a major agricultural producer, and not just drugs. It exports most of the avocados, limes and other foods that are in high demand in the US; the cartels have targeted such products with their own “taxes”, i.e., extortions from the growers with the inevitable result of higher prices at our grocery stores.

But the same is true for every business in Mexico, including a thriving business in human trafficking, starting with kidnapping and ransom. Despite the “efforts” of the Mexican government (the capital Mexico City being one of those federal entities…?!?!?) the problem persists; while the US focuses on drugs, the cartels focus on everything. While Trump threatens tariffs (which of course will increase the cost of already cartel taxed goods), the cartels are becoming a more diverse criminal enterprise.

But there is one thing that the American people can do, both for their own well being and a way to hit the Cartels where it hurts; I’m not talking marijuana as that’s now mostly grown domestically. Tourism accounts for nearly 10% of Mexico’s GDP and increasing annually, and the cartels know it and have acted predictably; resorts operate only at the pleasure of the cartels. Before we take that cheap trip, we should understand where much of that money goes.

While it’s true that Columbia and Venezuela are significant players with sizable cartels, Mexico remains the center of the cartel universe, and they are right on our border, and our main trading partner in Latin America. While Trump plays war games with Maduro, Americans can still eat their avocados and drop their limes in Tequila, but should just go south to the Caribbean if they want a vacation in the sun; what we should not do is support the parasitical thugs that rule our neighbor…and maybe eat fewer avocados and limes.

“A sword never kills anybody; it is a tool in the killer’s hand.” Seneca

The violence over the last few months has been a dominant content of the news, the other being affordability; later regarding the latter. The victims vary; a corporate exec, evangelist, students, scientist, Hollywood icons, soldiers…what also varies are the weapons used, which really is the least important issue as Seneca points out in the opening quote, or as the police often say, “It’s never the gun, it’s always the gunman.”

The common sense about focusing on the human element and not inanimate objects gets lost in the political narratives.  In Australia, after the Bondi Beach Massacre, the Prime Minister goes on about more gun and speech controls to address violence, ignoring of course that criminals and terrorists are what they are because they live outside the law; such policies put citizens who obey the laws such policies create even more at risk.

Excluding self-defense, which is a moral imperative, violence is the greatest evil humans commit against each other. The choice of tools is ultimately irrelevant, and the progress of technology will always provide better tools. The fact that gun control laws do nothing about controlling guns except to limit the ability of the law abiding to protect themselves against the lawless, who always have access to guns because they do not live within the law.

The reality of life is that there are good people and there are bad people, and as Aristotle so wisely observed, “It is our choice of good or evil that determines our character, not our opinion about good or evil.” The role of the police is to preserve and protect. Once violence is committed, the weapon of choice can provide forensic information to help the police get the bad guys, but no longer prevents the violence already committed; for that to happen, defense falls on each individual, and for that very reason we have the second amendment.  

Those that think that gun control laws will prevent violence, or censorship can control hate are getting things all wrong; as if cars are the issue and not drunk driving, or pens misspell words and not illiterate people. Everything man can make is inanimate without the use of it by humans; divorcing humans from the equation is like transferring the responsibility of human action to things, instead of people taking on responsibility for their own actions. Government overreach on constitutional rights does not exactly endear us to their good faith in our wellbeing, contrary to the narrative spin.

“Never trust a government that doesn’t trust its own citizens with guns.” Benjamin Franklin

“Tariff policy beneficiaries are always visible, but its victims are mostly invisible. Politicians love this. The reason is simple: The beneficiaries know for whom to cast their ballots, and the victims don’t know whom to blame for their calamity.” Walter E. Williams

While I have in the past called Trump a narcissistic grifter, perhaps worse than calling him a king, which may be construed as a compliment of nobility, I can’t deny his successes such as the release of the hostages from Hamas, immigration, borders and taxes. However, I deplore his tariff tantrums that are nothing more than punitive taxes on Americans; they are also unconstitutional since only Congress can legislate a tax, a decision the Supreme Court should come to soon.

The Trump tariffs are not the first instance where a president has claimed emergency powers to do so; we have McKinley, known as the “Tariff King”, and Hoover, Nixon, Reagan, Bush, and Obama. Curiously, FDR lowered tariffs that he correctly thought made the Great Depression worse; unfortunately, he also continued policies and programs that prolonged what is still the worst economic depression in US history.

When we hear the Trump administration’s arguments against a likely Supreme Court decision against executive power imposing tariffs, we are told that the revenues from tariffs will have to be returned, depriving the American people of all that money. This is absurd as it was the American businesses and people who paid the tariffs that were “…depriving the American people of all that money.”

Then there’s the argument that there will be a return of production by American businesses and the relocation of production by foreign businesses to the US to avoid tariffs; that will happen provided the tariffs are big enough to offset the higher cost of labor and materials, plus the cost of building the infrastructure to accommodate domestic production. In the cases where that will happen, those goods will become more expensive, and in the cases where it doesn’t, Americans still pay higher prices because of the tariffs.

We also have the age old argument about creating more jobs in America, which could happen with that production that comes to the US, but that still means higher costs of the goods produced, which will affect all Americans, including those with the related jobs; when that happens, it will put upward pressure on all labor costs to offset the increase in prices. The jobs argument fails to address the consequences, a bad habit of most administrations.

What tariffs historically tend to do, immediately and eventually, is alienate the foreign countries who lose that production, including those we consider allies; some will immediately retaliate with tariffs on US goods, and some will eventually do that and legislate restrictive trade practices with the US. The increase in production from tariffs may have some immediate benefits, but as this works through the economy, it will decrease trade that will slow growth, eventually lowering employment.  

There are some good things in Trump’s Big Beautiful Bill that was passed regarding taxes and regulations that will contribute to growth, but it also creates a deficit, something that Republicans rightly criticized prior administrations for, and said they wouldn’t do. Starting a trade war which the administration claims will offset deficits is punishing people, both foreign and domestic, who had little to do with those deficits, other than being burdened with the debt it creates.

“The primary reason for a tariff is that it enables the exploitation of the domestic consumer by a process indistinguishable from sheer robbery.” Albert J. Nock

“The first step to knowledge is a confession of ignorance.” Ancient Chinese Proverb

Thanks to all those that read the prior post where across all four platforms where it was posted there were about seventy views, but not so many answers to the questions provided; I think it was perhaps a little presumptuous in asking too much of viewers’ time to do so. The intent was to illustrate what Thomas Sowell said about definitions of words, i.e., “While the fact that the word is undefined is an intellectual handicap, it is a huge political advantage.”

The ancient proverb above illustrates that giving the quiz right from the start of the course forced students to understand our degree of ignorance; the reaction was energizing and made the course that much more informative and enjoyable. Here are the “correct” answers per the professor together with his explanations, which were technical, not political, i.e., he was not advocating, merely providing definition; they are followed by my comments:

1. Is money an asset or a commodity?

Commodity – it is something of intrinsic value used to facilitate a trade for another commodity, commonly known as a medium of exchange.

Most students and viewers got this one right, but some said it was an asset; back then we were still on the gold standard, which doesn’t exist anymore as all money has become fiat currencies, so the context has changed. Today it’s no longer a commodity, but remains a medium of exchange, but only to the degree its source is trusted, i.e., good faith. On a moral and ethical level, good faith could be an asset, but not a commodity.

2. Is capital money or any asset?

Any asset – while money is an asset, capital is something with a broader economic utilization like land, natural resources, stocks, bonds, buildings, tools…anything of value to society at large.

Nearly all the students and viewers got this one wrong; understandable as in most financial news the word capital is used for funds required for the expansion and purchases of a business.

3. Is trade the essence of an economy?

Yes – as a society progresses it develops divisions of labor, essential for the level of production required to create trade, without which there is no economy.

Most students and viewers got this one right as you can’t have an economy unless there is the exchange of goods and services.

4. Is inflation monetary or fiscal, or both?

Monetary – the cause of inflation is an increase in the money supply, which affects its value, and depending on other factors, may affect prices.

Most students and viewers got this one wrong; again, the context was a prior time when money was a commodity and not fiat. The confusion arises given the manipulation of fiat money which now always affects prices.

5. Is capitalism a cause or an effect?

Effect – it was not invented but observed that the less a society is controlled, the greater the level of production which creates higher levels of capital, hence its name.

Most students and viewers got this one wrong, perhaps because the word evokes political emotions; again, this is a definition, not an advocacy.

6. Is deficit the same as debt, yes or no?

No – when consumption exceeds income it’s called a deficit; if a loan is taken as an alternative to cutting consumption it creates a debt.

Most students and viewers got this one wrong, likely because the media and politicians conflate the issue due to ignorance, which can be contagious.

7. Is the maximization of efficiency and the minimization of cost profit or production?

Production – providing goods and services by nature is a competition for the consumer; there’s no guarantee of profit.

Most students and viewers got this one wrong, again because the media and politicians conflate efficiency and cost as negatives inherent in a free market environment.

8. Is labor part of work or the same?

Part of work – in economics, work includes everything involved in production, including capital, labor, management, investment, resources, etc.

Most students and viewers got this one wrong, perhaps assuming that anything involved in production is “labor”, something physical, an assumption based on poorly defined terms.

9. Is interest the time preference of money, yes or no?

Yes – time is an asset with a variable shelf life, i.e., you either spend your money for immediate consumption, or defer it for future use as in savings and investment, in return for which you are compensated, which is interest.

Most students and viewers got this one right; we all have the choice of either spending or saving, and how we save varies, some in bonds, stocks, CDs, etc.

10. Is an asset’s price depressed by high interest rates, yes or no?

Yes – all asset prices are dependent on both current and future time preferences; the buy or sell price is subject to the cost (interest) of money at any one moment.

Most students and viewers got this one right; high interest rates reflect the high cost of buying any asset, increasing the preference to save rather than spend, consequently depressing demand.

In summary, only a third of students and now viewers got the “correct” answer according to my economics professor, whose explanations were technical, not political, although there was some change over time in context. As a subtext of sociology, economics is a science of observation of human actions. In all sciences it is necessary to establish clear definitions to avoid confusion when communicating ideas; this will lead to an understanding of what is fact and what is fiction, enabling knowledge and a way out of ignorance. In politics there is a tendency to avoid such clarity as definitions get in the way of narratives, an emotional substitute for knowledge, a deception enabled by ignorance.

“It is usually futile to try to talk facts and analysis to people who are enjoying a sense of moral superiority in their ignorance.” Thomas Sowell

“Underlying most arguments against the free market is a lack of belief in freedom itself.” Milton Friedman

When I was in elementary school, which was a long time ago, we were taught “social studies”, a general topic which included basic history, economics, political science, and civics. It was factually based, without much discussion of theories and not all that much on current events in order to avoid conflicts with what parents thought. This was when schools were K-8 programs; then there was high school, and for those fortunate enough college, where these subjects were focused on separately.

My initial major was political science; it also required a curriculum in history, sociology, and economics. I remember that my economics professor on the very first day gave a quiz; it consisted of various questions that included either/or answers, some of which I still remember because myself and most of the class got so many wrong. The professor did not count this quiz in the grade aggregate, and explained that he was trying to make the point that most people have a very poor understanding of basic economics despite the fact that it is the essence of a society’s existence as in one way or another we are all a part of the economy in our daily lives. He was a good teacher who made this point very clear, much to our embarrassment.

This is even more disappointing today given what I have learned since, and because there seems to be even more economic ignorance than ever before; most high school graduates have never even had an economics class. While I eventually got an associate degree in political science, I later changed my major to engineering, but I have always kept my interests in these subjects and find that they are so interrelated as to be inseparable. I think that Friedman’s quote above makes the point about the inseparable nature of politics, sociology and economics very clear; it is not something that is understood in our society today, and that is the fault of our educational institutions, resulting in such ignorance, and providing an environment that makes deception that much easier.

The more I have come to realize how ignorance makes us more susceptible to deception, the more I think back on that economics professor’s quiz and thought it would be interesting to repeat some of those questions and ask readers to provide their answers; then in a follow-up post I will summarize the answers received. I will also provide the professor’s “correct answers” with his explanations, and my retrospective on them after all this time. I request that the answers be limited to those contained in the question without explanation as to why you chose them, which is how the quiz was given initially; there were more questions than these, but limiting them to ten provides an easy way statistically to summarize the answers:

1. Is money an asset or a commodity?
2. Is capital money or any asset?
3. Is trade the essence of an economy, yes or no?
4. Is inflation monetary, fiscal, or both?
5. Is capitalism a cause or an effect?
6. Is deficit the same as debt, yes or no?
7. Is the maximization of efficiency and the minimization of cost profit or production?
8. Is labor part of work or the same?
9. Is interest the time preference of money, yes or no?
10. Is an asset’s price depressed by high interest rates, yes or no?

Hopefully we can have some fun with this rather than the disappointment I had back when I got so many wrong. Please note that the word “ignorance” in the post is not meant to imply stupidity; ignorance simply means not knowing something whereas stupidity is an inability or unwillingness to learn.

“The first step to knowledge is a confession of ignorance.” Ancient Chinese proverb

“There are twenty-seven specific complaints against the British Crown set forth in the Declaration of Independence. To modern ears they still sound reasonable. They still sound reasonable, in large part, because so many of them can be leveled against the federal government of the United States.” P. J. O’Rourke

We recently witnessed the absurd event “No Kings Day”, a panorama of the ignorant who confuse themselves about how Trump became the 47^th president, and how Harris didn’t; it’s called an election, and Democrats are still trying to convince themselves that it didn’t happen as if it was instead a coronation, just like Harris’ nomination as the 2024 Democratic Presidential candidate. “No Kings Day” included multiple very well organized and orchestrated performative events with mass produced placards, chants, and marching routines, like a band at a college football game. What it didn’t have is anything that would inform us as to why we should consider Trump a king and not a president.

The opening quote from P. J. O’Rourke, while humorous, is factual; when it comes to our chief executive, “We the people…” have made the office of the president a monarchy. I doubt that the participants in the “No Kings Day” possess a shred of historical perspective; instead, they’re acting out a partisan narrative we have come to recognize as “Trump Derangement Syndrome”, more commonly and simply called TDS. Every time we hear from politicians and the media about some crisis, we should take a step back to learn and understand what that crisis is; then we need to determine if that crisis is real or imaginary. If we learn that it is imaginary, we should then understand what James Madison meant when he said, “Crisis is the rallying cry of the tyrant.” If we learn that it is real, we should then understand what Obama’s Chief-of-Staff, Rahm Emmanuel, meant when he said, “Never let a crisis go to waste.”

This has happened with the Great Depression, the 9/11 attacks, the Financial Crisis of 2008, Covid, immigration, trade…there’s always something as if our existence is now just a series of crises that become opportunities for yet another power grab. This is not a new phenomenon however as in 1832 Andrew Jackson was so vilified for his tyrannical behavior that he was called “King Andrew”. It is said that nature always fills a void to reach a state of equilibrium; unfortunately, the same is not the case in politics that always fills a void with chaos. This has happened with both major political parties, but with two different outcomes.

The Democrat Party (I was recently advised that I have in the past erroneously used the name Democratic Party) has fractured into competing groups since Obama was elected; the media uses terms like the left, the far left, progressive, socialist, moderate, radical, centrist…sounds more like biological descriptions of the animal kingdom, which is how some of these groups behave. What binds all these factions together is not policies or ideas, but an ethos of hate, mostly directed at Trump, but also Republicans in general.

In the meantime, ever since George H. W. Bush became president, The Republican Party also similarly  fractured, although into fewer competing groups; some were already extant at the time, like the “Tea Party”, and conservative, and then we get neocons, Christian Right, moderate, Never Trump, Maga…sounds more like corporate entities, which is how some of these groups behave. What binds them all together is something that they do not have, and that is the Democrats’ support for a deplorable social ideology regarding immigration, sex, race and religion. For more details tune into mass media for a “Ground Hog Day” like repetition of events.

Both these two major political parties, through the fracturing that occurred created the void that became filled with chaos, like hyperinflation, disease, war, violent protests, broken borders, assassinations…they actually did start the fire! Historically, chaos leads to populism, a tipping point which can lead anywhere because it absorbs the energy of the chaos created to become the person seen as a path to “normal”; the electorate yearns for policies that will get them there and whoever convinces the people that they have them, becomes their leader.

The Democrat Party has become leaderless, with no tangible platform of coherent policies, relying instead on partisan narratives; the problem with narratives is that they lack the factual content common sense people can trust, causing the American People to be apathetic and/or ignorant. This creates even more chaos and as the old saying goes, “…we’ve seen this movie before…”, but with a difference, i.e., we don’t know how it will end because the chaos hasn’t.

As a society we are losing our cultural heritage as a constitutional republic, devolving into populism. In order to stop the chaos, we need to fill the void it comes from with the principles that created our republic, a shared sense of values from which civil discourse replaces partisan narratives; we should start with a more careful examination of who we choose as leaders.

“Anyway, no drug, not even alcohol, causes the fundamental ills of society. If we’re looking for the source of our troubles, we shouldn’t test people for drugs, we should test them for stupidity, ignorance, greed and love of power.” P. J. O’Rourke