Joyce Appleby: Liberalism and Republicanism in the Historical Imagination
Niall Ferguson: The House of Rothschild: Money's Prophets, 1798-1848
Jonathan Israel: The Dutch Republic: Its Rise, Greatness, and Fall 1477-1806
Jerry Z. Muller: The Mind and the Market : Capitalism in Modern European Thought
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The sad reality of the gold standard.
The sad reality of political life.
The sad reality of African economic development
Recent knowledge of African economic history
The five barriers to a thriving commercial society.
Barriers to work for young and old people.
The Senate report on the 2008 financial meltdown completely missed the point.
Several blogs back I summarized my experiences in public education. More recently I looked at a pro-commerce American society that would be 5 times richer than we are today.
I mentioned that one of the benefits would be education that would be as good as the best of our current private schools.
So what makes a private school good?
I identify three elements.
1. Private schools are members of national private school organizations usually focused on their level: high schools, K through 12..... etc.
Because their revenue and survival depends on quality they make a genuine effort to copy the best they see in the industry. (Never true of public schools.)
2. Violence of any form, even a gentle slap, is totally forbidden and grounds for dismissal, even if it occurs off campus. I personally consider this a sine-qua-non of good education at any level. ( Most public schools are hell on earth, for safety.)
3. There are no unions. Teachers do not get insane pay and pensions. They are hired, promoted and rewarded for merit and fired for failures.
Private school teachers teach for pride, honor and respect. Which are rewarded.
While there are good teachers in public schools and good classes that circumvent the unions..... the good teachers are hanging out with zombies and pretending to be like them so they can survive. The union environment is pure unkillable zombism.
Eleven years ago, I wrote a paper about the year 1000 CE. The issue has come up recently several times. First because that was a period of significant global warming.
Secondly, because there were large and stable empires without modern industrial commerce.
The world was significantly different than today if you take one slice of time. Trends become insignificant. Top dog and bottom dog change places and lose their meaning. But Jews were there.
It may be worth a few minutes of your time to read it.
I have been a fanatic supporter of openness in business bookkeeping, compensation and most financial information. I know from experience that it is beneficial to the business.
I have now drawn the line. I see limits to the benefits of wikileaks. particularly when it makes information gathering impossible or onerous.... such as making sure that espionage work can be fatal.
I see the limits in politics. I will not make a donation to a candidate in San Francisco or California because my employment, address, phone number and donation become public. In the heated gay marriage battle, donors on the anti-side were harassed in their homes.... frightened, elderly women were threatened. That is unacceptable.
The line is easily defined. If the disclosure invades personal privacy or exposes individuals to harassment or danger, the openness is unacceptable.
How do you argue the otherside? Unless you are an anti-social socio-path like Julian Assange; who wears three pair of socks and two pair of pants over each other like our local deranged homeless.
Is a 19 month presidential campaign by an incumbent a good idea?
The two traditional explanations of why one would do this, are not really valid. The first is that it will help raise money. That is nonsense for two reasons. An incumbent president can raise money without campaigning. Money is irrelevant to an incumbent president’s campaign. He is running on his record.
Second, an early campaign is designed to drive others out of the race. Since no other incumbent has had such a problem at a Party nominating convention, this is irrelevant.
The downside is much more significant. An incumbent can be accused of making policy decisions for campaign reasons. An incumbent can face demonstrators on a regular basis from all parts of the political spectrum. Without a direct opponent, campaign speeches can look mean-spirited and belligerent.
The most serious drawback to an early and long incumbent campaign is that Americans don’t like campaigns and campaign rhetoric.
From the Wall Street Journal’s John Fund: “When Jerry Brown ran for president in 1992, he …. proposed a flat tax with deductions only for rent, mortgage interest and charitable contributions. … Mr. Brown has since abandoned that idea, grousing recently to a state legislator that "the flat tax cost me the New York Democratic primary." “
No Jerry. No Jerry.
When you were running for president, you announced in December of 1991 that you would select Jessie Jackson as your VP running mate. In January, Jesse repeated an old slur of his, calling New York ‘Hymietown’.
You won the Super Tuesday primaries in March, then Illinois, Michigan, and Connecticut. You were leading the field until you lost New York by 41 to 26%. You lost in 'Hymietown'.
Maybe your buddy, Jacques, confused your memory. It wasn’t the flat tax that has kept you from being president... It was run-of-the-mill black anti-Jew bigotry. When Jews got a chance to vote.
Over several decades I have compared sole proprietor businesses to small multi-person firm’s.
My observations are shocking and hard to believe. What I have found is that one person working alone with the help of other contract suppliers can produce as much as a firm with six employees.
That is hard to believe.
I have seen a designer, working alone, out-produce, on a consistent basis, six times the output of a six person design firm. The same with the survey research business. The same with a transcription and translation business. The same with a lawyer in the general business field compared to a small law firm of six people.
If a sole proprietor can be this productive, and business is increasingly making use of contract employee’s, who can be added and subtracted at will with no dismissal costs.... I would not be surprised to find that the productivity increase in our society has resulted in millions of unemployed people who have been replaced by hundreds of thousands of self-employed and contract workers.
Is that too much of a stretch?
How rich would we be today if we lived in a pro-commerce society. I have explained in an earlier blog the barriers to a pro-commerce society.
I believe we would be 5 times richer today than we are. That is significantly richer.
First let me say why and second what it would mean.
I knew my grandfather but he did not know his grandfather who was still living in Europe, born in the 1820s. In the brief period of my life plus two earlier overlapping lives, the industrialized parts of the world have gone from common starvation, rampant death producing disease for infants, children and mothers to the death-free, safe, modern world.
I have personally gone from a kibbutz in a new undeveloped country (1959) where we only ate a dozen different foods, to modern Tel Aviv 50 years later with world class cuisine.
That pace, it seems to me, is geometric and I would not be surprised that we could today be 5 times richer if we were a pro-commerce society.
What would that mean? It means that an ordinary middle-class person would have the travel luxuries equivalent to a first class airline ticket and private jets; equivalent to today’s best private education; abundant recreational facilities readily available for swimming, tennis, golf etc; and a large and stable investment portfolio for old age.
We should have that now, but we are not yet a pro-commerce society.
A few months ago I lost my wallet including credit cards and drivers license.
The credit cards were replaced within days as were the bank cards.
The drivers license replacement is still being processed and will have taken five months by the time I get it back. The Department of Motor Vehicles budget was cut four years ago. It is not just bureaucracy it is the government deliberately trying to punish us voters.
I just took a trip to LA and had to go through security. Outbound was no trouble but coming back I was passed up to the third level of supervision and still couldn’t get a decision that one old, invalid drivers license and three credit cards were sufficient ID.
Solution: On my smart phone I found this blog, that you are looking at, with the photo of me on the upper left. That was finally sufficient to convince Mr. Level III supervisor to let me through.
-------------------------------
Bad joke. On the outbound leg, I was standing in the security line behind a handsome, prosperous, business woman. She was sidetracked for extra security and got back in line behind me.
I whispered in her ear “Did you get extra security because of that dynamite perfume you’re wearing?” She laughed and thanked me.
You don’t often read about me being sick of some current phenomenon.
Today’s blog is an exception. I find it disgusting that all chanting in picket lines and mass complaints are of the form: “hey hey we won’t go, our opponents ought to know.”
There was a wonderful communist labor school in Tennessee run by Quakers with money from the CIO (Highlander). Nearly all civil rights activists in the 1950 were trained at Highlander. They were trained to use a wide range of songs and chants in the demonstrations that they organized. This made picketing and protesting more fun and more effective.
Every protest that I was involved in from 1958 to 1988 used songs and protests from Highlander. After that, protesting entered a period of musical deafness.
So how did this knowledge get lost between 1990 and today?
I have recently seen a few new cars painted yellow.
You would have to be beyond retirement age to know what a yellow car meant in the 50s and 60s.
A yellow car meant that the car was a lemon... a car that came from the manufacturer with some significant defect. It was an effort by consumers to intimidate the big three auto manufacturers into correcting the serious defects they were selling.
The big three auto manufactures were as immune to public pressure then as they are now.
What happened is that Congress passed the Lemon Law, which required automobile manufacturers to warrantee their cars for several months for manufacturing defects.
That and the introduction of reliable cars from both Volkswagen and Toyota changed the new car market and eliminated the yellow cars.
It is only in jest that I suggest a warning on savings accounts.
The warning would read something like: “Once you start saving it is a habit that is very hard to break.”
The reason I bring this up is that I know, and have known, several people who were superb savers; but these people, in their old age, were unwilling to spend money on themselves for pleasure or useful benefits.
Somehow, my mother communicated a different lesson to me. On occasion she would buy one extravagant item. That might happen once every three years.
Now I do that myself, to the surprise of people close to me and to my own delight.
I have started several movements myself and I have advised half dozen people who also started movements.
Under the term movement, I include ideas such as my idea of random selection of legislators, I include original designs in art, fashion and music; and movements such as employment of minorities and changing the direction of court decisions.
What is particularly interesting about starting a movement is the surprise. We never know that we have started a movement.
I will use one example. Carol Rae, a weaver, introduced a range of hippy elements into her classic woven wall sculptures. She included raw wool, driftwood and non-woven fabrics.
About two years after Carol started producing and selling these woven wall sculptures, she saw several in a store that looked like hers but she hadn’t made them. Her first reaction was to try and see if the artist had copied her work and stop it.
A more measured response followed. In her case as in nearly all other cases, it is impossible to connect the initial duplicates with the original (except for the priority in time). Much like flowers in the spring the duplicates begin springing up everywhere. You have a movement, for which you can personally take credit, but can never stop or reverse.
I have also watched people do their best to stop all duplication, including lawsuits and legal threats..... generally to fail.
The latter people who try to stop the movement are usually people with one idea. The former people, who are generous and willing to live with the fact that they started a movement, usually have many ideas and are creatively prolific.
The two real dangers for creative generous people who start new movements are (1) they succumb to the idea that they should be in business.... which then consumes their life. (2) they make so much money from the initial creation that they get stuck duplicating the creation forever.
So why is a business blog dealing with friendship?
Because my friend Alex pointed out that friendship has changed because of the nature of business.
We have gone from an environment where people worked physically together in an office to an environment where many people are working from home or some other non-office milieu.
The office physical familiarity seems to make trust and communication effective. Moreover, there is great effort to keep personal elements out of the work environment and consequently friendship is rarely a key connection for working people in offices.
The opposite seems to be true for the non-office working milieu. When people work together without physical contact they seem to improve communication and trust while simultaneously generating friendship. The non-office environment is where friendship is generated by the exchange of personal information.
In one sense, the new friendship structure is instrumental.... We are friends because we work together at a distance.
When I look back on my own personal friendship history, which I can do by looking at telephone lists that go back 40 years, I find that my vast number of friends in my 20s and 30s have dwindled to a tiny number of people with whom I maintain a working relationship.
Friendship for me has changed.... One element has been the nature of changing business relations.
I particularly want to single out two men who have written books and are out on the lecture circuit. These men have made it their life goal and intellectual accomplishment to prove that America and its commercial allies are important and powerful because of historic luck.
The two blind mice are Ian Morris and Jared Diamond.
Morris ascribes Western success to the trade routes in the Mediterranean and the later Chinese success to the development of water routes in China. He also blames the Atlantic Ocean for being small and the Pacific for being big. He didn't notice the Vikings and the Danes who were successful traders on sea and land. He didn’t notice that China had many ocean neighbors it could trade with from Japan to Arabia and did very little.
Diamond focused on the flora and fauna and illness generating microbes as being beneficial for Europeans and the biological isolation of the Americas being a negative. He was bothered by the Spanish conquest of the Americas, but not the English conquest of India.... He doesn't know England and India are on the same land mass is Europe.
Both of these men are trying to explain the 400 year global suzerainty of northern Europe and the US. Being lefties, anti-commerce, they cannot see the simple reason.
The success of northern Europe and the US over the past four centuries is due to the emergence of a democratic republic in Holland, that was the beginning of the industrial era.
Commerce is the one and only source of wealth and power on the planet earth.
The proof is so obvious that only a lefty could ignore it. Three of the greatest ancient civilizations that survived to our time, applied a dose of commerce and promptly joined the top ranks of the modern world.
First was Japan in the 1870s, then came China and India in the 1990s. Like magic, add a dollop of commerce and you get a global rank for your country.
The same was true for Taiwan and South Korea, but I have already won the argument that these two public buffoons are blind.
The Senate has spent two years studying the 2008 financial meltdown. The results are pathetic. The basic finding was an absence of fraud.
What is needed is an effort to understand what happened and to legislate corrections.
What happened is that the financial system, which is always wildly chaotic, had a direct effect on bank assets. The impact on bank assets communicated the financial volatility directly to the commercial world. Banks called in their loans, reduce their lines of credit and stop making new loans.
The credit crunch meant serious trouble for the commercial world.
What is needed is a recognition that the financial system is always going to be chaotic. We need to insulate the commercial system from the financial system.
There are many ways to do that. In earlier blogs I suggested assigning specific banks to maintain all outstanding loans. These banks might have higher loan interest rates, but they would not be allowed to call their loans.
I have also suggested an FLIC that will guarantee loans and lines of credit against being called.
I have recently realized that such an FLIC could specifically designate loans and lines of credit that would be protected from recall. For a fee.
There are many approaches, but the fundamental need is to recognize that the financial system is very volatile and it needs to be separated from the commercial world.
I could blame it on my father. When I was 12, a few years after the second world war, my father directed my interest to small towns. He felt that most small towns needed to be revived after they had nearly disappeared. Soldiers were not coming back to small towns.
My father was wrong; he was a lefty liberal always looking for some underdog cause. Those post war small towns died.
Nevertheless I have maintained some interest in the survival of small towns. I wrote a piece a few years ago after visiting small towns in Iowa. It turns out that surviving World War II was not enough, surviving the onslaught of high quality Japanese cars was also required.
For the past five or 10 years small towns have had a new chance at revival with Internet contractors who work at home and can live in small towns in the middle of nowhere.
Last weekend I was at a swim meet in Morgan Hill, a town south of San Jose. Morgan Hill had squandered state and federal funds in trying to revive the downtown.
Terrible waste of money. The downtown has a four-lane street in the middle. It can have no future.
What a small town needs in its downtown are good restaurants, interesting shops, boutiques, coffee shops, bars and a whole package of national chains. With good offstreet parking, offices and residential second and third story locations, a two lane street, activity for teenagers, bike riders.... such a downtown has a chance of vitality.
To attract all of this I suggest requires two things: one is a subsidy for rent at vacant retail locations... Starting at free for two months and increasing to free for six months based on capital investment; walking streets also need interesting windows. A small town can hire a window dresser for free use, one time, by existing retail stores.
The current idea of making main street looked like Disneyland is flat out absurd and doesn’t work anywhere.
Recently Jerry Brown, the governor of California, has been comparing the current public division of opinions to the divisions in the Civil War.
I have made a similar case in my blogs ( here, here and here).
The big difference is that I consider the Democratic party to be on the same side as it was in the Civil War..... the side of slavery and the status quo.
On the state level, the Democratic party is totally in the pocket of the government labor unions. These unions are opposed to merit raises and they don't care how much employees hate their job. They support permanent employment with paternalistic retirement and health care. The Republicans refuse to support this anti-commerce, zombie-like, taxpayer funded regime. That makes the Democrats the same today as they were one hundred and 50 years ago. Slavery is good and respectible.
On the national level, the Democratic Party favors a paternalistic health-care system that is the status quo in Europe. The Democrats voted to create such a system despite public opposition. The Democrats also have been unwilling to significantly reduce the role of government and government spending.
This parallels the Confederate Democrat's demand that government return runaway slaves to the South and that new states be slave states.
The Republicans objected to government supporting unpopular slave-based paternalism and favored new states being free vote on the slavery issue.
Similar issues today and the Democrats are on the same side as they were one hundred and 50 years ago.
A hit piece is what an editor requests when they are angry at some subject or book.
I want to call your attention to two hit pieces. One was in the New York Times and is a bad hit piece. The New York Times book editor was very offended by Bernard Henri Levy’s, known and loved in France as BHL, book Traveling America. So the editor assigned Garrison Keillor to be the American expert and debunk BHL’s book.
I cite this as a bad hit piece because I immediately bought the book to see what was so offensive to New York lefties. BHL is himself a strong lefty, friends with Hillary Clinton and most of Hollywood but he is honest. It turns out, his offense was to describe American evangelical churches accurately. That is high crime to lefties.
Carefully reading the review I also came to know that Garrison Keillor is a low level empty headed party hack with nothing more than good writers for his radio show and a nice voice.
The good hit piece was by the brilliant Joseph Epstein in the Wall Street Journal. This is a review* of a book by a woman who married Susan Sontag’s son. The book is treated as reasonable, but Susan Sontag gets several thousand words to put her in her place as an empty headed, good looking, Marxist, publicity seeking, windbag.
Sontag died at the same time as Yasser Arafat. I wrote a blog at the time about how much they deserved each other in an hypothetical afterlife.
Epstein wrote a brilliant hit piece. His language is eloquent. He precisely destroys the monster using subdued quotations by others and has vivid descriptions of Sontag’s degradation. Wonderful job.
*(Remove "?gwh=numbers" from the URL to get around the paywall)
Many decades ago, when I was spending much time in Sweden, I read most of the Viking sagas.
I particularly loved the Vinland sagas that included Eric the Red. Eric sailed to Newfoundland and stayed there several years. It was in the 10th or 11th century.
The entire area from Newfoundland through much of Greenland was habitable and comfortable. What are today ice fields were then wheat and rye fields. This was a 200 year period of global warming when apples and oranges were grown in England.
It is my view that the story of a Northwest passage, a polar route to China, which became an obsession 300 years later, was based on word of mouth and private maps made by the Vikings of Eric the Red’s time.
This is not a far-fetched hypothesis; is it?
As people in the workforce get older, there are increasing barriers to employment. The same is true at the entrance level to employment for teenagers.
I often wonder why the United States isn’t 10 times richer than it is.
Commerce probably has no upper limits on wealth for a country as long as it can militarily defend Itself.
A good example is Israel. In the shortest possible period of time, it has turned a desert into a rich thriving country. If all overseas Israelis were counted as part of the Israeli GDP, Israel would be one of the three richest countries on the planet, surrounded by abject desert poverty. Purely the result of commerce.
I think the five greatest barriers to unlimited commerce are:
1. Family structure. Anytime a family member has preference over someone else who has greater merit, commerce is thwarted. Most of the planet, Africa, Arabia and the Latin world suffer from overly rigorous family structure.
2. Religion. While Max Weber has pointed out the exception, most religion preaches status quo and economic equality or near equality. That is a serious barrier for most of Europe, India and South Asia. (American leftism is a religion.)
3. Unions. While unions are only 400 years old they had been a perpetual barrier on every front to commercial growth. Unions abhor meritocracy, hard work and reward systems.
4. Personal xenophobia. Social diversity, the primary definition of a city, is a key source of innovation, skill differentiation and economic vitality. Most people prefer to be friends with other people like themselves. This is one of the remaining barriers to commercial growth in the United States.
5. Sentimentality and ideology. These are intellectual shortcomings that leave people attached to the past. Not necessarily productive elements of the past, simply attachment to the past. Commerce requires a welcoming of the future and appreciation of technological change. All peoples in the world suffer from this backward looking shortcoming.
* Remove "?gwh=numbers" from the URL to get around the paywall)
Photos---Spitzer's favorite hooker. He often used state funds to pay Kristen.
Today's Wall Street Journal has a chart that I couldn't resist reproducing.
I have often mentioned that the hierarchy of power production costs has been roughly 4 cents a kilowatt hour for natural gas, 12 cents for coal and oil, 15 cents for wind, 18 cents for solar and 24 cents for nuclear.
This chart is based on different calculations but the ratios remain the same. Remember natural gas, wind and solar have storage problems,
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