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Truth is Inevitable

“All truths are easy to understand once they are discovered; the point is to discover them.” Galileo Galilei.

When the NY Post first broke the story about Hunter Biden’s laptop in October 2020, I read about it first in the NY Times, who claimed then that the story was Russian disinformation, as did the Washington Post. At that time I discounted the NY Post story given that then President Trump began using it as the grounds for his campaign accusations of corruption against Joe Biden. The only excuse for what is now an obvious error by many, including myself, is that you could not trust what Trump said given his record of deceitful rants.

However, the story simply would not die. It was soon learned that Hunter Biden, in his state of drug and alcoholic abuse, had in fact simply forgotten that he had left his laptop in a repair shop; it eventually wound up in the hands of the FBI. We were then treated to brain numbing by a thousand micro-fact releases until the NY Times in March 2022, and the Washington Post in April 2022 both confirmed that the NY Post story was true as the information on the laptop confirmed the activities of Hunter and the involvement of his father.

How did such legacy newspapers like the NY Times and Washington Post not only fail to get the story right to begin with, outdone by a tabloid sheet like the NY Post, but why did they trash the story as nothing more than Russian disinformation? I admit that I was fooled at the time, and failed to consider that if the NY Post story was based on the information found in the laptop, we are talking about verifiable data, not “disinformation”. Apparently I was not alone as many Americans were also skeptical of a tabloid’s reporting and a known liar’s election campaign rants. It was a clear case of what John Adams said that “Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence.”

The story keeps getting worse as more facts come out. There are emails and other documents on the laptop that address what can only be characterized as influence peddling. With Hunter’s reference to the “Big Guy”, this is no longer just a Hunter Biden story as much as it is more a Joe Biden story. What makes it all the more concerning is who was after the influence, and we get such disreputable players like Ukraine, a notoriously corrupt player locked in a never ending conflict with Russia, and for whom the US is involved in a proxy war sending them billions in arms. There are other countries like China and Saudi Arabia, not exactly friends of democracy.

The story does not end with the laptop. We are now inundated daily by legacy journalism, the administration and much of social media having a meltdown over Elon Musk’s takeover of Twitter; the ostensible reason for this is Elon’s avowed policy to cease the censorship of the prior ownership, as if free speech is now a danger to democracy. As the new Twitter team digs through the past, it comes to light that there was a collusion to suppress the Hunter Biden laptop story on that platform by none other than the FBI, who was tasked to advise Twitter to suppress any posts in reference to it.

Elon had the related files sent to Matt Taibbi, an independent journalist, who then released them.  Elon did so because he was skeptical of how the major media outlets would handle the files based on prior performance; his concerns were confirmed justified given the outrage by mass media and politicians in both parties, who denounced the release as “unethical” and a “distraction”; curious comments considering the historical behavior of those institutions regarding this story. Given the mast head slogans of the NY Times, “All the news that’s fit to print.”, and the Washington Post, “Democracy dies in darkness.”, and the midterm election claim by the Biden Administration that the vote was about saving democracy, the hypocrisy of such reactions is astounding.

It is uncertain where all of this will lead, other than providing a political fire storm; surely there will be hearings, but I think Will Rogers will again be proven right about how congressional hearings are a sure way to get things out of the public’s mind. However, there is another dimension here that is far more important than another case of executive misconduct; we now have the FBI joining the list of politicized agencies like the NSA and CIA, representing a clear and present danger to liberty in America. Hopefully the fact that the top police agency in the US colluded to suppress the facts about this misconduct will not be glossed over in the paper chase of Senate or House investigations.

So now we have all the threats to Elon Musk and Twitter by both the political and media powers. While it’s hard to imagine that the Disinformation Governance Board would be put back in operation, based on the reaction to what will infamously be known now as the “Twitter Files”, the possibility can’t be discounted.  The fact that the NY Times and the Washington Post performed so badly regarding this story is just a continuation of why Journalism in the US is rated so poorly by the Reuters Institute:

“The Reuters Institute for the Study of Journalism at Oxford’s 2021 survey of trust in media ranked the US last among 49countries with a media trust of only 29%. The majority of Americans surveyed responded that they found that the media has embraced advocacy journalism resulting in a quasi-state media where journalists are more bound to the government’s embrace of ideology rather than independent and objective reporting, and anyone questioning that trend risks instant cancellation. They consider current media as an echo chamber rather than a reliable information source.”

How can our “free press” have fallen so low given the role of the very same Washington Post in the Watergate scandal with the disclosure in 1972 of Nixon’s paranoid activities against the DNC, or the NY Times admission and disclosure that the Bush administration’s claim of WMD to justify the invasion of Iraq was false?  There’s another story here as it is becoming ever more apparent that the culture of American society is fractured with most increasingly distrustful of its institutions, and some more receptive of its repression of liberty. Not too long ago there was a president who spoke to this issue:

“Freedom of information is a fundamental human right; for a nation that is afraid to let its people to judge the truth and falsehood in an open market is a nation that is afraid of its people.” JFK



“Thinking is difficult, that’s why most people judge.” Carl Jung

I came across the above quote in an article unrelated to the subject of what thinking is, but as the quote relates to and contains the subject of this post, it seemed to be a good place to start. The quote also implies both an important connection and a difference between thinking and judging; that connection and difference, when you “think” about it, becomes “critical”, especially when everything in recent years is judged according to a polarized agenda.

To begin with, all definitions of thinking contain the word “process”, in this instance of using the mind for reasoning about something, like solving a problem. What gets tricky here is that to be successful in that process it must be objective, meaning done with an open mind so as to see facts clearly and not through the prism of your personal feelings and beliefs, or what is assumed to be conventional wisdom. That’s hard to do because it means subjugating the self so it doesn’t influence thinking with preconceptions; this kind of an unbiased process is called critical thinking, but when you “think” about that, you realize how difficult it can be, and therefore why, as Jung put it, “…most people judge.” 

To judge is to form an opinion or conclusion about something; when the process to get to that point is critical thinking, then that judgement can be considered to be unbiased and therefore correct.  However, as William James once observed, “A great many people think they are thinking when they are merely rearranging their prejudices.” When people allow their innate urge to be right, to be better, to be superior, they are caught up in a binary view of the world around us, necessitating the need to be right or the fear of being wrong, so they tend to base their judgements on beliefs rather than facts.

I choose this topic for this post because it is quite disturbing to see how our educational institutions are failing our youth in the basic subjects of reading and writing, mathematics and science; these are essential learning skills required for critical thinking. This is not a recent trend as it goes back to the late 1970s; around that time US economists became alarmed by a decline in the growth of U.S. productivity which they accounted for by American schools taking a dramatic turn for the worse. After multiple decades of increases, student achievement tests scores declined sharply in 1967, and with few exceptions continued to do so to current times. In the 2021 PISA (Programme for International Student Assessment) results, the US placed 22nd.

Aristotle, considered the greatest thinker and teacher of all time, observed “Youth is easily deceived because it is quick to hope.” Hope is not a process of thinking, but an emotion; we need hope emotionally as an incentive to carry on in the face if adversity, but it must lead to taking action, but action without thinking is counterproductive. Aristotle’s point is that as youth is so impressionable, they can more easily be taught, which places on the teacher a very high standard of ethical conduct and ability in the essential instruction of basic skills, which are far more valuable than lofty ideas.

We hear much today about parent’s concern that children aren’t being taught basic skills but are being indoctrinated by an educational system dedicated to progressivism. This is not a new phenomenon as the same occurred in the 1950’s with a conservativism reacting to the Red Scare, leading to educational “reforms” for an exorcism of Soviet propaganda. Then again in the 1970’s and 1980’s for reforms to achieve racial balance and promote environmentalism, and on to today with wokeism, and tomorrow who knows. Regardless of the motive behind such educational “reforms”, they are a product of the politicization of education, a devolution to indoctrination; that is a very dangerous policy for education because it substitutes how to think with what to think; that is intellectual coercion, eliminating thinking which is the basic tool for a successful and happy life.

Education is about teaching kids critical thinking skills, whereas indoctrination is about teaching them political narratives. The former provides competency, the ability to function as a thoughtful human being, the later orthodoxy, a form of unconsciousness. What parents really need to do is protect their children’s greatest asset, their minds; if they don’t do that, they should not be surprised that “So, in the interests of survival, they trained themselves to be agreeing machines instead of thinking machines. All their minds had to do was to discover what other people were thinking, and then they thought that too.” Kurt Vonnegut, Breakfast of Champions

The Runoff

“Both parties have their good times and bad times at different times. Good when they are out. Bad when they are in.” Will Rogers

With the midterm elections almost over, there are many issues that arose over this past biennial event, one being why it takes so long in the US, supposedly the most advanced democracy, to actually determine who wins an election? Brazil’s recent election was called within hours after the polls closed, yet here in the US it took nearly a week to get many results, and we still have the runoff in Georgia for the Senate on December 6th.  Perhaps there’s some truth to playwright Tom Stoppard’s quip that “It’s not the voting that’s democracy, it’s the counting.”

I was recently asked what I thought libertarians would do in the upcoming Georgia runoff. That is a complex issue to address, as it takes some consideration of both where the LP Georgia is at and what most libertarians think about that issue. Nationally in 20 polls on the topic of party affiliation spanning the last 13 years, Gallup found that voters who claim to be libertarian ranged from 17 to 23% of the American electorate; of that polls found that 22% were Democratic voters, 19% were independent voters and 12% were Republican voters. However, the poll also found that those who identified as libertarian voted variously at any given time depending on the issues involved in an election.

On average, about 40% of the US electorate now claims to be independent, with the balance about split between the two major parties. These statistics account for why elections are becoming increasingly difficult to forecast as they become more closely contested. Republicans and Democrats are increasing upset about this phenomenon, a fact that contributed to NYS revising ballot requirements to restrict third parties, as have some other states. Many on the news this past election day reported races “too-close-to-call”, even days after the polls closed.

As the largest third party in the US, libertarians are often blamed by both parties as the culprits for such things, especially the Georgia runoff. Raphael Warnock got 49.4% of the vote, Herschel Walker 48.5% and Chase Oliver 2.1%; as Georgia requires the winner to have at least 50% of the vote, a runoff is required. Considering that in the runoff libertarians are considered the deciding vote, alienating them with the blame game seems counterproductive for either major party.

The LP Georgia has decided not to endorse either candidate; the official stand is that if the Republican and Democratic parties want to court libertarian voters, they should do so by becoming more libertarian, as opposed to saying “We aren’t as bad as Democrats” or “We aren’t as bad as Republicans”; that just doesn’t cut it because libertarians traditionally don’t subscribe to the lesser of two evils, although that doesn’t necessarily mean none will participate. 

The outcome will likely be inconsequential given that the current count is 49 Republicans, 48 Democrats, and 2 Independents; however, the independents have so far caucused with the Democrats, so even if Walker wins the runoff the Senate will be split. In the event of a tied vote in the Senate we have the constitutional anomaly of legislative action by the executive branch as the Vice President gets to vote.  As this has been the case for the last two years, nothing will have changed with this midterm election should Walker win as Harris is the VP; should Warnock win, there will be a true majority with the Democratic Party in the Senate, so either way it will make no difference.

The issues in Georgia are reported to be abortion, economy, health care, guns, voting rights and veterans, but unclear the order of priorities. Libertarians are pro-choice, free market, anti-war and constitutionalist; neither of the two candidates are very appealing to libertarians on either their principles or personalities so the choice between Warnock and Walker is therefore ambiguous for them. Republicans aren’t very pro-life when it comes to wars, the death penalty, and the state’s murderous drug war. Democrats aren’t exactly pro-choice when it comes to healthcare, education, and guns.

After generations of voting for the lesser of two evils the only difference is how fast we get to the inevitable results. The reality is that there is no such thing as the lesser of two evils, but there is definitely a constant conflict between good and evil. People are imperfect, but that doesn’t mean you don’t strive to defeat evil. One never throws away their vote by voting their conscience; such a position is the hobgoblin propaganda of both major parties and to combat that they will, as they have, strive to eliminate the conscience of people.

In the Georgia Senate campaigns, both parties strove to place their candidate on higher moral ground, when in fact neither one belonged there; for one thing they both lied, Warnock about evicting parishioners from the church he is minister of who don’t agree with him and Walker about his personal relationships. Neither should be a political concern except for the fact that you can’t trust a liar, which would describe many politicians. When it comes to our two major parties, we can see why Will Rogers once observed that “A flock of Democrats will replace a mess of Republicans. It won’t mean a thing. They will go in like all the rest of ’em. Go in on promises and come out on alibis.”


“All governments suffer a recurring problem: Power attracts pathological personalities. It is not that power corrupts but that it is magnetic to the corruptible. Such people have a tendency to become drunk on violence, a condition to which they are quickly addicted.” Frank Herbert

Most people remember Frank Herbert for his famous book series “Dune”. While his work categorically is science fiction, he was also a student of philosophy, sociology and ecology. Like Robert Heinlein, he was immensely distrustful of government, especially the growth of its powers and emphasis on leadership. Much of what the great science fiction writers did was to use the trends of the present to project what the future could become, and all too often, as was the case with Frank Herbert, they were prescient.

As America grew in global stature in the early 20th Century, the Federal government became more and more the domestic focus as political power became more centralized, and consequently more isolated from the people it was created to serve. Its focus became how to use power for the policies its leaders of the day proposed. Such concentration of power inevitably leads to coercion as after all what use is power if you don’t use it? As Frank Herbert so eloquently observed in the quote above, violence becomes an addiction.

The invasion of the Pelosi home by David DePape, a deranged person by any measure of mental instability, is a sad manifestation of a social disorder similar to the attacks on Supreme Court Justices following the Dobbs decision, partisan extremism with the Summer of 2020 Riots following the George Floyd murder and the Capitol Riots of January 6; these are clear indications that the social fabric of American society is seriously damaged.

The question is how do we heal that damage? Biden’s characterization of the Republican Party as semi-fascist is not the way, especially given his campaign pledge to be the unifier promoting bipartisan cooperation; neither is the manipulation of the illegal immigration crisis by Republican Governors, the wrong answer to the admittedly obvious failure of government policies that created this human tragedy. Unfortunately we are exposed to opportunistic demigods that seek more power by cloaking themselves in partisan propaganda, a game of vote harvesting devoid of any principles forming coherent policies.

There is an existential difference between state and society, but without direction as a society the state is emboldened at the expense of its citizens by their politicians; therefore the solution must come from American citizens, not their politicians. When Americans understand that the only way for politicians to control society is to give them the power to do so, they will cease voting for those politicians. All too often when it comes to leadership Americans are left with the proverbial lesser of two evils; wanting less evil is not the same as doing away with evil any more than having less cancer makes one healthy.

For a society to be healthy, people should not be reliant on the state for their welfare, nor encumbered by the state in pursuit of their interests. They need an environment for spontaneous and organic interaction as they see fit, not subject to what the state will permit.  What they need the state and their politicians to do is to keep their oath of office to “…support and defend the Constitution of the United States against all enemies, foreign and domestic…”; this oath of office presumes the existence of some evil that promotes violence, and unfortunately such a presumption is well founded, especially among those seeking power.

There are many and diverse reasons for violence but in the context of this post it is the acceptance of coercion to promote political ends that causes societal violence.  When the rule of law as a deterrent against violence is compromised by either diminishing protections against compulsion or using it as a means of compulsion, society will experience an increase in violence and a loss in its sense of security.  The intrusion of the state into society with laws that provide for preferential benefits causes disequilibrium in that society by sowing resentment among its citizens. As will Rogers famously said during the Great Depression “Everybody nowadays is suggesting ways of getting prosperous on somebody else’s money.”

Political leadership that promotes such policies is inherently toxic to society; by lying and being tone deaf, by being arrogant in the face of its own incompetence, valuing its hierarchy over the welfare of its citizens, discriminating in favor of its voting base, showing self-interest over national interest, we have a leadership that can only thrive in an environment of the violence it has itself created; such is the state of play in American politics for more than a century now.

Thomas Hobbes wrote some three hundred years ago that “The social contract to surrender powers to the state was based on the promise of protection from the violence and intimidation of others.” This is the reason for being for the state. Now the state has become a monopoly of legitimized violence, often by decree as the Constitutional role of Congress regarding war powers has been usurped executively; it’s violence concealed by lies, like making the world safe for democracy, a lie to further maintain and justify violence, both foreign and domestic.

The use of violence is a sign of incompetence, the inability to understand and accept that others have the right to their beliefs as long as they do not confuse compulsion with compassion; should that occur, you have the initiation of violence, an act that is ultimately self-destructive. As another great science fiction writer put it “Violence is the last refuge of the incompetent.” Isaac Asimov


“When the big nations quit meddling then the world will have peace.” Will Rogers

Principally known for his acerbic wit, Will Rogers knew well from his own experiences about why peace was so elusive. As a Native American of the Cherokee Nation, he had firsthand knowledge of how the big nations treated the little ones. The quote above was not his usual humor, but a serious reflection of the trauma caused by big nations meddling with disastrous results in the affairs of others in order to achieve dominance, often under the guise of doing good while actually doing their worst.

The foreign policy advocated and practiced by Washington and Jefferson was friendly neutrality, avoiding involvement in treaties that could create enemies or dubious friendships. They correctly reasoned that alliances that could draw the US into armed conflict while providing little if any security presented no value and unnecessary risks. It was a foreign policy of peace as an assurance for prosperity; it did not represent fear of foreign relations, but a means to have them peacefully.

Unfortunately, this policy did not last long. Political transformation followed the War of 1812; the Federalist Party virtually disappeared, and from what became known as Jacksonian Democracy, we see the beginning of the Democratic Party, and over time, through various iterations and coalitions of anti-slavery movements, we have the Republican Party. What we also have is the development of “Manifest Destiny”, a concept that was anything but peaceful, and led the US on a path of conquest including the genocide of Native Americans and territorial seizures from Mexico and Spain. So violent did factions within the nation become that the Civil War was the bloodiest conflict in American history, with approximately 650K dead, more than WWI and WWII combined.

There came a period after the Great War where the public and Congress realized that it was questionable alliances that drew America into that disastrous event. They rejected ratification of the treaty to join the League of Nations out of fear that it would again draw the United Sates into international conflicts. The term “Isolationists” came to describe those who expressed a renewed appreciation for the friendly neutrality policies of Washington and Jefferson. Unfortunately the Treaty of Versailles and The Great Depression combined against that sentiment with a global trend of populism, militarization, and expansionism.

Post WWII saw the US and USSR become the two global powers, meddling bullies, each vying for world hegemony. The United Nations did little to mitigate the antagonism as the world formed into three factions, the Soviet Bloc under the Warsaw Pact, the US and its allies under NATO, and what was called the Third World, with some of the latter either victims of meddling by the two super powers, or falling into their respective spheres of influence. The US and USSR pursued infiltration and militarization of emerging nations following the collapse of European colonization in Africa and Southeast Asia. While China was also involved, the Sino-Soviet dispute, based on differences regarding the correct interpretation of Marxism, caused a rift between the two that weakened China’s influence. Its intervention in the Korean conflict was a disastrous adventure that led to destructive Maoist policies causing widespread famine and societal collapse. Calling this period the “Cold War” given an estimated 25M casualties related to various conflicts, civil wars, interventions and genocides, making it the 9th deadliest “war” in world history, seems odd at best, but peaceful it was not.

Under the guise of protecting democracy, that panacea meant to intimidate dissent, the US meddled in the affairs of Korea, Viet Nam, Laos, Thailand, and various African and Latin American countries, with debilitating results for its economy, societal cohesion and political coherence. Despite the negative results, one administration after the other embraces interventionism as a foreign policy, meddling as an international doctrine. Eventually the US jumped into that rabbit hole we call the Middle East conflicts which brought the US into the Afghanistan and Iraq debacles.

America had become a Warfare State; how could peace arise under such conditions? Well it can’t, and despite that we continue meddling, today in Ukraine, tomorrow to be determined. We continue to form unconstitutional alliances with which we find that, for any one of them to involve us in war, it is necessary only for the executive power to decide that its defense is somehow essential to the security of the US. While it is obvious that the rise of central banking combined with the development of the military industrial complex over the past century is no coincidence, the bi-partisan support for this odious cabal is economically unsustainable and morally depraved.

One of my favorite Benjamin Franklin quotes is “Love your enemies; for they shall tell you all your faults.” There are many so called friends that fail to speak the truth to the US as they desire its support toward their own questionable ends, a situation that best serves the interest of our enemies. The fact is that if you want peace, you don’t need to talk to your friends but to your enemies as therein lay the path to achieve that. While the American people may not have these insights regarding peace, it is apparent that they are emotionally and financially exhausted by the lack of it. The leadership of our country reminds me of Will Rogers’ quip about his grandfather:

“When I die, I want to die like my grandfather who died peacefully in his sleep. Not screaming like all the passengers in his car.”

Threat to Democracy

“Remember Democracy never lasts long. It soon wastes, exhausts and murders itself. There never was a Democracy yet that did not commit suicide.” John Adams

While the US is in an inflationary spiral, an imminent recession, immigration and crime crises, legacy media and politicians obsessively claim Americans should focus on the threats to democracy, both here and in Ukraine; these are deflections away from what really matters. Neither the former president’s delusional behavior nor a conflict between two authoritarian thugs should merit our attention away from what we should be focusing on.

Here at home we have Congress pretending it’s going to do any better in shackling a populist thug than it did when he was under impeachment. Now they are in the process of prosecuting him for insurrection, and possibly the theft of classified documents. While the evidence presented appears daunting to any credible defense, we’ve seen this movie before and it didn’t end well; there’s no reason we should believe Congress has the competence or conviction to do any better this time.

Ukraine is not a democracy by any stretch of the imagination, but a festering sore of corruption from the moment it declared its independence from Russia. Ukrainian leadership has always been relentlessly authoritarian as Selenskyy has demonstrated again despite his claims of being a democratic reformer. There’s no legitimate reason for the US sending him billions in arms and munitions as if he’s our ally and Ukraine is a security issue for the US.

Encouragingly, polls have shown that Americans are focused first on inflation and recession, then on crime and immigration. While Trump’s egregious behavior has done irreparable damage to his popularity and party, it is not seen as an imminent threat, and Americans are becoming increasingly frustrated with the huge costs and risky escalation of our proxy war in Ukraine in the face of more pressing needs. 

What John Adams was addressing in his quote above was his reasoning for a republic because democracy inevitably devolves into mob rule which leads to populism. It was the sentiment that evolved out of the revolution that it was essential to protect liberty to insure the sovereignty of the individuals in society and not the state. In order to safeguard against majoritarianism, the Electoral College was incorporated into the Constitution to assure political equality among the states and avoid the populism inherent in a direct democracy; it’s a system that expresses both the will of the majority while protecting minority rights, providing for a national debate inclusive of both.

It’s important to distinguish the various elements of what we call a nation. The essential element is society, meaning the natural tendency among people to relate to each other. Without the need to consider culture or politics, they cooperate with each other in an organic and spontaneous way in order to produce not only what is essential to survive, but to thrive. We have come to call that the economy. Then we have culture, which is simply beliefs and customs that evolve within groups in a society over time given regional characteristics such as geography, ethnicity and resources. Then we have politics, the civil organization under which a nation’s state is created.

None of the above is stating anything new, but historically the development of nation states has seldom been encouraging in protecting the liberty of its people. In most cases we see monarchial structures with a caste system categorizing people into useful elements for the preservation of power. At times these have evolved through wars, epidemics, famines or revolutions into various systems of democratic rule. Most people today believe that democracy simply means a government by elected representatives. However, if the process of electing representatives is majoritarian, it essentially becomes a popularity contest; this inevitably leads to populism, a political phenomenon revolving around a charismatic leader or leaders who appeal to and claim to embody the will of the people in order to consolidate their own power. Populism is the most obvious form of ochlocracy, which means mob rule.

When this occurs, politics becomes personalized, almost religious in its zealous appeal; political parties lose their identity as the principles that compelled them are replaced with an overriding addiction to power, a means to control the mob. Elections serve merely to confirm and consolidate the leaders’ authority rather than to reflect the different allegiances of the people; as Adams states, democracy commits suicide. The cleverest authoritarians are adept at upholding the illusion of democracy while destroying it; such civil organizations provide for the intervention in a society in order to manipulate its functions culturally and economically, erasing the distinction between the state and society, eroding liberty behind the curtain of democracy.

When politicians and their followers call everybody who disagrees with them a “threat to our democracy,” they actually want people to believe that only they can be trusted to preserve it, an illusion that cloaks them with virtue and their opposition with vice. They are not presenting an argument for considering them for office but a slogan to dismiss any argument objecting to their election. What is essential for the preservation of liberty is for Americans to understand, as Floyd A. Harper observed in 1949, that “The citizens of a democracy have in their hands the tools by which to enslave themselves.”


“The stock market is filled with individuals who know the price of everything, but the value of nothing.” Phillip Fisher

This quote by one of America’s famous investors is actually an adaptation of Oscar Wilde’s definition of a cynic, spun in economic terms. In economics the simple definition of price is the amount of money people are prepared to pay for goods and services and therefore represents a measure of value. While everyone values things according to what they decide is in their own best interests, the aggregate of those decisions represents the price mechanism in markets.

What Fisher was lamenting in the above quote is that investors had gotten used to artificially low interest rates which in turn caused unsustainable price-to-earnings ratios and were ignoring fundamentals such as value. The principal cause of the recent stock market declines is the now artificially high interest rates. The one positive effect, at least for the moment, is that stock evaluations will more depend on company merit. The truth is that the bull markets of the recent past were dependent more on the Federal Reserve’s generosity than sound fundamental investing.

While price mechanism is simple in concept, it is also sorely misunderstood, not only by many in Wall Street, the Federal Reserve, the US Government and our society in general, but throughout history. One of the principal reasons for the failure of socialist regimes was the absence of the price mechanism. When you substitute the free market with a controlled one, you eliminate the functions created by it. Even tampering and regulating it distorts price mechanism functionality.

It’s price mechanism that determines what goods are to be produced, in what quantities, how they are produced and who gets them; this is an existential economic mechanism by which goods and services are distributed, indicating the strength of demand and enabling producers to respond accordingly. Further, only by allowing prices to move freely will the supply of any given commodity match demand. When supply is excessive, prices will fall and production will be reduced until prices begin to rise. Likewise if supply is inadequate, prices will rise, production will increase until prices begin to fall. This is the price mechanism providing equilibrium in the market.

The problem arises when prices are artificially controlled. The monetary mismanagement by the Federal Reserve, feeding into and coupled with the fiscal mismanagement by the US Government has created artificial and dangerous inflationary pressures on prices. Adding to the problem recently was the government’s pandemic lockdowns coupled with the various stimulus programs. The net results are inadequate supply and excessive demand, but unhinged from the market’s price mechanism. All this produced too much money going after too little goods and services fueling an inflationary spiral.

This problem actually started more than a century ago. Since the creation of the Federal Reserve, the US Dollar has lost about 95% of its purchasing power. There were two primary reasons for this, one being the boom and bust cycle created by the Fed’s interest rate manipulation and money printing, the other the slow death of the dollar itself as it went from commodity money to fiat money.  Both fed into an inflationary spiral, all due to failed monetary policies. Despite what Modern Monetary Theory believers tell us, there’s only one thing we need to understand, best expressed by Milton Friedman when he said that “Inflation is always a monetary issue.” The really bad news globally is that the dollar is so strong now compared to other major currencies because they’re in even worse condition.

There are some economists who blame Supply-Side Economic Theory for our current inflation and price dilemma. That theory is a modern but inaccurate interpretation of Say’s Law, which states that the production of a product creates demand for another product by providing something of value which can be exchanged for that or any other product. In the absence of distorting government behavior, Say’s law should hold true. However, if the government causes credit booms and busts through artificially changing interest rates, this can cause disequilibrium.

Interest is that word so much in the news today as the Fed seeks to control inflation by stunting growth with high rates. In economics, the rate of interest is the price of credit, and as Benjamin Franklin famously cautioned “Remember that credit is money.” So we have yet another case of causing disequilibrium by artificially increasing interest rates; it’s artificial because the price mechanism by which the market would determine the time preference for money is substituted with another fiat. Among other negative effects this has an unfortunate impact on bonds, including USTs. As the interest rate on bonds increases, the prices of bonds fall.  With USTs, this means not only does the US get less money for the debt issued but at a higher cost of servicing that debt.  About a month ago the US national debt went over $31T, the highest of any nation in the history of the world.

In his famous 1949 book “Human Action” Mises presciently stated that “The misinformed observers blame the bust rather than the boom for economic misfortune. The average person does not blame the authorities for having fostered the boom. He reviles them for the necessary collapse. In the opinion of the public, more inflation and more credit expansion are the only remedy against the evils that inflation and credit expansion have brought about.” 

The price we pay for not allowing the free market function of the price mechanism is that the U.S. national debt is so high that it’s now greater than the annual economic output of the entire country, in effect making the US incapable of ever paying down that debt without a huge increase in economic output. The question is can Americans get informed and motivated to change the viscous cycle that our government created or are we doomed to remain those misinformed that Mises describes?


“Humor is the good natured side of a truth.” Mark Twain

When we’re in a good mood, most of us love a good joke, even if it’s on us. When we’re in a bad mood, but open minded, it will change our outlook for the better. When we are full of ourselves, we react badly because the truth hurts. Humor is difficult to explain, especially to those that take themselves too seriously. For this reason comics and satirist are either loved or reviled, we either laugh or rage.

These are difficult times for comedians because everything is subject to a new code of acceptable speech, which changes daily like fashion, with no reason other than what someone, seemingly anyone, finds offensive. I can’t imagine George Carlin being successful in our current cultural environment.  This hypersensitivity has become so pervasive that we need to understand where it comes from.  It is said that humor is the window to the soul. If true, then the lack of humor closes that window and the soul becomes isolated. I am talking about the human spirit, that intangible element that defines personality. We know a positive personality when we meet them, and we surely have experienced the negative personality that brings us down.

There are some telling indicators where this negativity is generated, principally in education; if children are constantly taught that the world is on the verge of extinction, that nothing should lie in the way of their demanded gratification, that there is no value in free expression, that their race determines them to be either a victim or oppressor, that they need not take responsibility for themselves, that motivation is selfishness, then why would we be surprised that they have a negative view of the world and their future in it? Such an environment breeds narcissism, and you will seldom find a narcissist with a sense of humor. You have to have empathy to understand and appreciate humor because without it you can’t understand anything about the human condition of anyone else but yourself. One of the objectives of true humor is to do what Mark Twain said in the quote above, to expose the truth. Narcissists lack responsibility and will always deflect blame on to others due to their sense of entitlement; truth is harsh and to be avoided.

Couple this with the social isolation imposed during the pandemic, which caused so much damage to the psychological wellbeing of our youth. According to the CDC, social isolation is linked to poor outcomes with about a 50% increased risk of dementia, a 29% increased risk of heart disease and a 32% increased risk of stroke. There was a 22.3% spike in ER trips for potential suicides by children aged 12 to 17 in summer 2020 compared to 2019. In 2021, emergency rooms in 38 children’s hospitals saw a 47% increase in the number of suicide and self-injury cases in the first nine months of the year among children 5 to 8, and a 182% jump among kids ages 9 to 12, compared to 2016.

We first see real comedic theatre in ancient Greece; in fact Greek tragedies and comedies were similar as they both emphasized observation and logic for understanding. In other words, in order to get the message you have to have perspective, experience and above all else empathy or the joke will likely go way over your head. You will not have the ability to understand humor if you lack any of these things.  The context alone will be beyond your grasp unless you’re alive in the moment, the here and now, or you’re left with someone trying to explain the humor to you, and we all know how that goes. A good comedian gets an immediate feedback from his audience, or it becomes embarrassingly obvious that his joke flopped, failing to communicate the immediate essence of the issue he brought to the audience, and that after all is what good humor is all about.

Take for example a humorous definition of inflation I heard recently that it’s being broke with a lot of money in your pocket. This kind of humor is irony or a paradox in that the statement is seemingly contradictory but in the context of its time and place immediately understood and a clear insight as to the true nature of inflation. We’ve all been there lately, so what can you do but laugh. While I’m not much of a fan of rap music, there is this guy who goes by the name Zuby who says some very insightful stuff, and relevant to this post, “This is a brutal time to be a human without a good sense of humor.” So be of good cheer, throw off the myopic views of our time, seek understanding of what’s really going on, but be courageous and learn to laugh at it all because nothing changes until we open our minds to the truth, and humor is the window through which it can come.

“My way of joking is to tell the truth. It’s the funniest joke in the world.” George Bernard Shaw

Hurricanes Don’t Care

“Men argue. Nature acts.” Voltaire

Ian, like so many phenomena over the last few decades, did not bring out the best from what passes for leadership lately. The major difference though is that war, famine, disease, economic failure, etc. are for the most part either created or made worse by human stupidity. Hurricanes don’t fit anyone’s narratives as to either their cause or effect; they’re simply a force of nature and they just don’t care what we say about them. We can learn from what has been said about Ian over the past few days regarding our lack of intelligent and caring leadership.

The partisan virtue signaling has been anything but inspiring, filled more with venom than virtue. There’s the lambasting that Governor DeSantis was subjected to as if he invited Ian to visit Florida. Regardless of what anyone thinks about the Honorable Ronald, he appears to be handling the event well.  He was accused of convenient fiscal tolerance for Federal funds contrary to his criticism of the administration’s spending frenzy; however, FEMA funds are a routine budget appropriation since the agency was founded in 1979. He was also accused of climate change denial, which is not true; he has consistently recognized its reality but does not agree with those that favor the “Green New Deal” as a way to address it, which in the immediate situation is an irrelevant political issue. Unfortunately, the DeSantis bashing is the least of the grotesque statements we hear.

Social media is full of some rather viscous comments, one in particular from a truly twisted individual stating that “Florida is getting what it deserves.” Another malicious individual claimed that apparently this is karma, a way for Mother Nature to punish all those he considers evil for living in a state having a majority of people he considers deserving of death and destruction. Regrettably, there were many sympathetic voices to these sentiments; while it would be wrong for the platforms on which such things were posted to censor them, it was curious given their inclination to do so that they did not.

While President Biden was slow to reach out to Governor DeSantis to pledge assistance, the two eventually spoke and pledged cooperation in the interest of the people affected; that would have been a good sign except for the fact that Biden then went on a press binge about all that he’s doing to address the disaster as if he were the governor and not DeSantis. The primary role of the President in such disasters is to get FEMA to act, but the actual emergency management is by the Governor of the state affected. All that though is relatively benign; what was truly malevolent came from Vice President Kamala Harris when she announced that the administration will be giving hurricane resources “based on equity” by directing funds to “communities of color.” Not only is such an action unconstitutional, it is blatantly racist, proving again that racism is not dependent on one’s race.

Regardless of anyone’s views on climate change, maintaining as some have that Ian is proof that hurricanes are now worse than ever before as a result of that is historically inaccurate. Looking at the North Atlantic/Gulf-Caribbean region only, in terms of loss of life, we have the “Great Hurricane of 1780” with 22-27K deaths; there was no “carbon footprint” to speak of then.  More recently we have Flora in 1963 with over 7K deaths, and Mitch in 1998 with more than 11K deaths. While Katrina and Sandy come to current memory more readily, they were not as deadly. As far as property damage is concerned, we can rebuild but we can’t bring back the dead. Comparable storms in other parts of the world, particularly around the Indian Ocean in the 18C through early 20C, were far more horrific, often tallying over 200K deaths.

True, the economic loss to Floridians, and to a lesser extent some other areas hit by Ian, is devastating; but why do so many people insist on living in areas prone to such repetitive natural catastrophic events?  While I was surprised to learn that this area on the West Coast of Florida has not been hit by a significant hurricane in over a century, look at all the issues with flooding in the Mississippi River states, the fires in California, and the droughts there and the Southwest. The latter is definitely more a manmade issue as that area has been prone to drought way before the population explosion of the Post War Era which literally drained the scarce water resources of the region. In the case of flood prone areas like Florida, the huge population explosion was facilitated by the National Flood Insurance Program (NFIP). Not only do taxpayers get saddled with the cost of such subsidies, but then again with the claims on top of the FEMA relief. While there will always be those who will insist on living in such areas regardless of the risks, providing the means to insure such decisions only exacerbates the problem.

While Ian doesn’t care about any of this, we really should. While it’s inevitable that we need to harness alternative means of energy, we can and should immediately end such programs as NFIP that only direct population growth where nature shows people are at the greatest risk. While we can’t really control Mother Nature, we should be able to control ourselves and avoid partisan bias in the face of such disasters as that is irrelevant. To seek some level of political gain, or evaluate human suffering based on race is an evil we can live without. 

As far as Ian is concerned, we can’t bring back the dead, but we can help the living, even if they live in Florida and regardless of their race or politics. “Nature knows no indecencies; man invents them” Mark Twain

Soft Landing

“Inflation is always and everywhere a monetary phenomenon.” Milton Friedman

When Milton Friedman said this in 1963, most Keynesian economists, and they were the majority then as they are now, criticized him as being illogical. But Friedman was not proposing an economic theory, although such a thesis had already been proposed by many “classical economists”; he was speaking empirically, meaning from observation. Over the next few decades Friedman’s observation won out, even convincing many of those that initially criticized him that he was ultimately correct.

Friedman, and his associate Edmund Phelps, had observed that no central bank and its government could maintain higher inflation for lower unemployment for very long without risking prolonged inflationary periods, and when higher interest rates were imposed to combat inflation without a recession and higher unemployment. They demonstrated this phenomenon with what became known as the Phelps curve; again, this was not a thesis, but an observation. Obviously, the dual mandate for the Federal Reserve to do the opposite was shown to be problematic, but that was a political mandate, not one based on empirical facts.

Fed Chairman Jerome Powell has been criticized for calling the onset of inflation “transitory”, but he was simply joining the progressive economic narrative along with Treasury Secretary Janet Yellen and a host of other economic experts in the administration and academia. Now he’s being cautioned that the Fed’s aggressive moves on interest rates may push the economy into a recession. A free market should be dictating interest rates, but we don’t have that; what we have is a central bank with a political mandate. So given where inflation is at the consequences of not raising rates would be worse; besides, we are already in a recession despite the political attempts to redefine what that is.

The Fed says they will continue to raise rates until inflation is brought under control and they reach their target rate of 2%. Putting aside the bewildering concept that any inflation is a good thing, consider that with today’s increase of another 75BP the Fed Fund rate will be around 3.25%, and real, or “headline” inflation is at 9.1%, the gap between target and inflation is about 7%.  There is speculation that when and if inflation falls to 5%, the Fed will ease off the rate of rise in rates to effect a “Soft Landing”, the definition of which is a bit sketchy; the concept is that eventually the higher interest rates and the inflation rate will meet at a point without the need to raise rates further and cause a recession, or at least avoid a deep one. That sounds more like a hope than a policy, and historically has seldom been achieved; as F.A. Hayek called such ideas, it’s more like a “fatal conceit”.

The correct policy, given the still relatively low interest rates and the increasing inflation rates, is for the Fed to continue rate hikes for some time, likely well into 2023; it is true that will make the recession we have already begun more apparent, deeper and prolonged. However, that assumes that the Fed has the perseverance to follow their stated goal on the face of what will likely be strong political opposition. The administration has shown no common sense and restraint in its disastrous fiscal policies, which has led to a U.S. national debt over $30 trillion as of January 2022; that debt is now greater than our GDP, the annual economic output of the US, which has only happened once before in our history, and that was during WWII.

At the current Fed rate, interest on that debt is about $500B, clearly a debt service way beyond the ability of this country and its economy to bear, especially given the levels of expenditure the administration’s policies call for; something has to give, and assuming that the administration will not now practice the economic good sense to cut expenditures, things will get ugly. The Fed and the Federal government are caught in the exact dilemma that Freidman and Phelps forewarned of back in 1963, forced into an economic paradox of their own creation. The last time the Fed waivered was back in 2019 when they began to raise rates; Trump went bonkers, as he was want to do, and Powell and the Fed caved, cutting rates under intense political pressure. The likelihood on that happening again is extremely high as we have entered the era of perpetual political campaigning; the result, should that happen, will be as it was prior to Paul Volker, with ever higher inflation coupled with a deep recession. The word we boomers remember all too well is “stagflation”.

We seem to have entered another of those points in history where it repeats itself, but it often does so with ever increasing tenacity and ferocity when its lessons are so egregiously ignored. “The Fatal Conceit” that F.A. Hayek spoke about in his book by the same name had to do with the lessons we should have learned; “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”