It happens to every pyramid scheme eventually. I salute the American people for having made it this long without getting caught. Charles Ponzi himself (from whom the term "Ponzi Scheme" takes its name) could not have done better.
In fact, it seems to me a natural progression. A Ponzi scheme is one that pays returns to investors from the funds provided by future investment. Such schemes generally have little or no other source of legitimate income. So we promise Paul he can make 5 bucks if he invests 10. He says sure and hands us a ten, with which we buy a pack of baseball cards, a Fresca, and a copy of Cat Fancy magazine. The gum is ok, but we toss the B. J. Robideau rookie card. Paul now wants his money. What to do? Easy. Convince Peter to invest 50 by promising him 75. Having robbed Peter to pay Paul, we spend the rest on that croquet set we've had our eye on. When Pete wants 75, we find a handy Pauline. If we're lucky, we build a track record of satisfied investors that keep the gravy train running like a train full of gravy.
The pyramid scheme is slightly more honest. It sets up a scheme in which new members of an enterprise make money largely by recruiting subordinates. There's often a pretext of selling detergent or timeshares or some such, but basically, it's about getting people to kick up some percentage to the level above them. Eventually of course, there is a level at the bottom that has nothing more to kick upward and the whole thing collapses.
That's where the American government comes in. They eliminated this little problem by legally requiring everyone to pay up. Social Security is the most obvious example; everything it pays out is from the proceeds derived by collecting higher and higher taxes from American workers. If I did anything similar as a private citizen, I'd be convicted of a crime. That's why the aging population is such a concern--the pyramid is bulging at the top and will soon be upside down.
It may not matter though. We're seeing the same phenomenon across the board. Even when the law forces you to contribute to such obviously ridiculous schemes, they can only last as long as there is actual money to contribute. When the government has all the money, eventually the plan will fail--or will have succeeded beyond their wildest mustache-twirling expectations.
We are nearing that point. We are paying off previous investors (bond holders, those who paid social security taxes, etc) with the taxes we collect, often from the same people to which we make the payments. We can increase the tax rates for now; we can maybe put them off a little longer. But ultimately we're going to wind up right where they all do: with an angry phone call wondering why a payment is late. Then a flurry of them. Then the cops. And finally, the liquidation of all our croquet sets, at auction, with the Chinese taking home some great bargains.
Then what? Start over of course. And who does the starting over?
<sigh> You. Me. The exact same people who were paying for it all to begin with.
Friday, July 29, 2011
Wednesday, July 20, 2011
Who is rich? He that is content. Who is that? Nobody.--Ben Franklin
There is a school of thought that capitalism is immoral and that the wealthy are necessarily evil. That school was in session yesterday when Rupert Murdoch was "assaulted" with shaving cream while testifying about how some people who worked for him may have paid to have some phones hacked into.
While hypocrisy is not the focus of this post, it's hard to ignore; there is simply so much of it. And yes, that includes a "captain of industry" suddenly saying, "No, I can't take responsibility for every little thing my company does. I'm just one man," or words to that effect. But it also includes the rest of the media, whose lust for truth knows no bounds, until they don't like the truth, then suddenly the bounds are like an old friend.
And worst of all of course is the government--British, American, whatever--who say they're shocked, simply shocked, that anyone could stoop so low as to hack into a cell phone. This in a day and age when western governments make it their business to eliminate all privacy as a threat to the public good. Interestingly, there seems to be a different bent to things in the EU, where the habit seems to be to trust the government and not corporations, with the theory being that governments answer to the people and corporations are private. In the states, traditionally anyway, I think the feeling has been just the opposite, with the theory being that corporations answer to our wallets and government is unaccountable.
So Rupert Murdoch is called a "greedy billionaire". And the guy with the shaving cream must have really been a principled fellow, to take that brave stand. I'm sure a bunch of guys passed a joint around all night while rewatching the footage, grumbling about the man keeping them down. This is what is known as not a meaningful protest. It changes nothing, convinces no one of anything, serving only to help some misfit climb up the ladder in his revolutionary circle or get some street cred with the cute Marxist who won't give him the time of day.
Churchill said it, "If you're not a liberal at twenty, you have no heart. If you're still a liberal at forty, you have no head." But, sadly, 30 is the new twenty.
There is a moral argument for socialism, or, rather, against capitalism. It is rare indeed to hear it genuinely made--that is, argued by someone who has any credibility to argue it. That's not to say I believe it, in any event. Regardless, I'm not going to refute it on any moral grounds for now, since, whether it's "right" or not, it just doesn't work. And it doesn't work because, I believe, at a cellular level, it is contrary to the nature of man. Actually, that's too narrow. I believe it is contrary to the nature of living things.
We are fooled so easily into thinking ourselves so far advanced above the beasts of the fields (and the plants, please, they're so slow). But time and again we learn otherwise. Of course, we laud nature excessively too, imagining that the balance we lack is somehow commonplace in the wild. But life on the plain or in the woods, amongst tundra or tall trees, is often violent, sickly, and short. And extinctions occurred before we came along. We are not the solution, we are part of the problem, assuming you view it as a problem. I view it as a fact of life. Natural selection.
Understand, when we talk about natural selection, we're not talking about a conscious process; we're talking about systems that only work one way. If an organism survives to reproduce, it wins, for another generation. It can do this in any number of ways. The organisms that find a good way, flourish. The ones that do not, will flounder and die. We are programmed to want to be the best, not by society, and not by commercials. It's part of our basic instruction set, like the boot code on your pc.If you think it's easily overridden, drop by a great site called YOU ARE NOT SO SMART and check out any article. The latest, on misattributed arousal should correct that whole "we are smarter than the average bear" thing.
Those who oppose capitalism seem to forget how long it's been around. They also seem to forget that other things have been tried before and failed, miserably. Not just in the 20th century, but long before. Those who practice it, are not given the opportunity to practice it for long. Like religions that don't allow sex, they die out in a generation--indeed, faster, the more successful they are.
There is some consolation, then, at least for curmudgeonly libertarians like me. The kind of liberalism we are flirting with will die out quickly enough. Socialism itself will ultimately do away with the socialists. Because behaving contrary to human nature is bone crushing. It eliminates innovation with desire to escape. In place of genius, there is dissidence. Instead of community, there is contraband. And finally, in place of productivity, there is revolution. That's what happened in the Soviet Union, the more quickly because of their extremes,and the more messily too, with oligarchs who mysteriously managed to emerge from the equanimity of communism with more than a few dollars in their pockets (some animals, after all, are more equal than others). And in China too, though much work remains. There is much freedom to come there, and it will be bought and paid for by capitalists.
Another disreputable revolutionary, John Adams, said something like "We study war so that our children may study commerce, navigation, and industry. They study such enterprises so that their children may study art." In any system which presumes to govern fairness, there will always be loopholes. And we will always find them. Not to do so would arguably be irresponsible to ourselves and our loved ones, especially when you believe the system is rigged.
While hypocrisy is not the focus of this post, it's hard to ignore; there is simply so much of it. And yes, that includes a "captain of industry" suddenly saying, "No, I can't take responsibility for every little thing my company does. I'm just one man," or words to that effect. But it also includes the rest of the media, whose lust for truth knows no bounds, until they don't like the truth, then suddenly the bounds are like an old friend.
And worst of all of course is the government--British, American, whatever--who say they're shocked, simply shocked, that anyone could stoop so low as to hack into a cell phone. This in a day and age when western governments make it their business to eliminate all privacy as a threat to the public good. Interestingly, there seems to be a different bent to things in the EU, where the habit seems to be to trust the government and not corporations, with the theory being that governments answer to the people and corporations are private. In the states, traditionally anyway, I think the feeling has been just the opposite, with the theory being that corporations answer to our wallets and government is unaccountable.
So Rupert Murdoch is called a "greedy billionaire". And the guy with the shaving cream must have really been a principled fellow, to take that brave stand. I'm sure a bunch of guys passed a joint around all night while rewatching the footage, grumbling about the man keeping them down. This is what is known as not a meaningful protest. It changes nothing, convinces no one of anything, serving only to help some misfit climb up the ladder in his revolutionary circle or get some street cred with the cute Marxist who won't give him the time of day.
Churchill said it, "If you're not a liberal at twenty, you have no heart. If you're still a liberal at forty, you have no head." But, sadly, 30 is the new twenty.
There is a moral argument for socialism, or, rather, against capitalism. It is rare indeed to hear it genuinely made--that is, argued by someone who has any credibility to argue it. That's not to say I believe it, in any event. Regardless, I'm not going to refute it on any moral grounds for now, since, whether it's "right" or not, it just doesn't work. And it doesn't work because, I believe, at a cellular level, it is contrary to the nature of man. Actually, that's too narrow. I believe it is contrary to the nature of living things.
We are fooled so easily into thinking ourselves so far advanced above the beasts of the fields (and the plants, please, they're so slow). But time and again we learn otherwise. Of course, we laud nature excessively too, imagining that the balance we lack is somehow commonplace in the wild. But life on the plain or in the woods, amongst tundra or tall trees, is often violent, sickly, and short. And extinctions occurred before we came along. We are not the solution, we are part of the problem, assuming you view it as a problem. I view it as a fact of life. Natural selection.
Understand, when we talk about natural selection, we're not talking about a conscious process; we're talking about systems that only work one way. If an organism survives to reproduce, it wins, for another generation. It can do this in any number of ways. The organisms that find a good way, flourish. The ones that do not, will flounder and die. We are programmed to want to be the best, not by society, and not by commercials. It's part of our basic instruction set, like the boot code on your pc.If you think it's easily overridden, drop by a great site called YOU ARE NOT SO SMART and check out any article. The latest, on misattributed arousal should correct that whole "we are smarter than the average bear" thing.
Those who oppose capitalism seem to forget how long it's been around. They also seem to forget that other things have been tried before and failed, miserably. Not just in the 20th century, but long before. Those who practice it, are not given the opportunity to practice it for long. Like religions that don't allow sex, they die out in a generation--indeed, faster, the more successful they are.
There is some consolation, then, at least for curmudgeonly libertarians like me. The kind of liberalism we are flirting with will die out quickly enough. Socialism itself will ultimately do away with the socialists. Because behaving contrary to human nature is bone crushing. It eliminates innovation with desire to escape. In place of genius, there is dissidence. Instead of community, there is contraband. And finally, in place of productivity, there is revolution. That's what happened in the Soviet Union, the more quickly because of their extremes,and the more messily too, with oligarchs who mysteriously managed to emerge from the equanimity of communism with more than a few dollars in their pockets (some animals, after all, are more equal than others). And in China too, though much work remains. There is much freedom to come there, and it will be bought and paid for by capitalists.
Another disreputable revolutionary, John Adams, said something like "We study war so that our children may study commerce, navigation, and industry. They study such enterprises so that their children may study art." In any system which presumes to govern fairness, there will always be loopholes. And we will always find them. Not to do so would arguably be irresponsible to ourselves and our loved ones, especially when you believe the system is rigged.
Sunday, July 17, 2011
We thank the jurors for their service, but they are now obsolete.
Casey Anthony walked free today, disappearing on a chartered flights to parts unknown. Unknown for now, anyway, but such things are seldom mysterious for long. Ms. Anthony needs money too badly to remain a recluse longer than a few weeks. Her story is her only means of support it seems, so, alas, we've not heard the last of her.
Comparisons to OJ abound, but I think they're inapt. OJ, was, after all, famous, wealthy, a symbol of success and the recipient of a great deal of admiration. He was also, arguably, a recipient of the benefits of jury nullification. Did the jury really doubt his guilt? Were they convinced his long ride in that Bronco was intended to bear him away from persecution? It is possible, perhaps, but I don't really believe that.
Casey Anthony, on the other hand, had little to recommend her. The recipient of no awards, she showed no particular promise, and her fall was only from the curb to the gutter. Perhaps I exaggerate--I say this with no detailed knowledge of her background and rely rather on my impression of such bits of the trial as I have seen. But the death of her child is the source of her only celebrity, certainly. No cause could have been served by her acquittal save her own. Her jury therefore should be taken at their word when saying that they did not believe her guilt had been proven beyond a reasonable doubt.
So, reasonable doubt. That's what the talk has been about since. The words do not appear in the constitution. They were only finally given genuine authority by the Supreme Court in 1970, and then only by the way, not as the central focus of the case. They were hung upon the "due process" clause of the Fifth Amendment to the Constitution. As standards go, this strikes me as a good one. The jury system is, like all human beings, not flawless. We can only ask that juries conclude within the limits common to all reasonable persons.
But alas, we live in unreasonable times. We've not heard a lot from the jurors; for the sake of argument, I'm going to extend what little we have heard to the rest as representative of their view of things. In short, they feel sick, just sick, about all of it. They believed Casey Anthony guilty but felt the prosecution didn't prove it sufficiently. They wish the prosecution had done a better job, so they could hang her as she deserved.
So, they believed her guilty. Were I able, I would ask them: how did you come to that conclusion? Was it what you heard in the courtroom during your weeks of listening and observing? If so, do you not count yourselves as reasonable?
Perhaps not. Too many episodes of CSI where chemistry yields all. At the moment we enjoy more information, more easily accessible, than at any time in the history of the planet. My phone holds more than all the scrolls at Alexandria. So if a thing is a fact, it is recorded; it is deduced; it is cataloged. It brooks no doubt whatsoever.
I think it is fair to ask whether, whatever standard these jurors applied, it could result in a conviction anywhere at anytime. After all, if there is no room for a simple human estimate of guilt, then the entire adversarial system can henceforth be replaced, with a simple review of the chemistry.
Comparisons to OJ abound, but I think they're inapt. OJ, was, after all, famous, wealthy, a symbol of success and the recipient of a great deal of admiration. He was also, arguably, a recipient of the benefits of jury nullification. Did the jury really doubt his guilt? Were they convinced his long ride in that Bronco was intended to bear him away from persecution? It is possible, perhaps, but I don't really believe that.
Casey Anthony, on the other hand, had little to recommend her. The recipient of no awards, she showed no particular promise, and her fall was only from the curb to the gutter. Perhaps I exaggerate--I say this with no detailed knowledge of her background and rely rather on my impression of such bits of the trial as I have seen. But the death of her child is the source of her only celebrity, certainly. No cause could have been served by her acquittal save her own. Her jury therefore should be taken at their word when saying that they did not believe her guilt had been proven beyond a reasonable doubt.
So, reasonable doubt. That's what the talk has been about since. The words do not appear in the constitution. They were only finally given genuine authority by the Supreme Court in 1970, and then only by the way, not as the central focus of the case. They were hung upon the "due process" clause of the Fifth Amendment to the Constitution. As standards go, this strikes me as a good one. The jury system is, like all human beings, not flawless. We can only ask that juries conclude within the limits common to all reasonable persons.
But alas, we live in unreasonable times. We've not heard a lot from the jurors; for the sake of argument, I'm going to extend what little we have heard to the rest as representative of their view of things. In short, they feel sick, just sick, about all of it. They believed Casey Anthony guilty but felt the prosecution didn't prove it sufficiently. They wish the prosecution had done a better job, so they could hang her as she deserved.
So, they believed her guilty. Were I able, I would ask them: how did you come to that conclusion? Was it what you heard in the courtroom during your weeks of listening and observing? If so, do you not count yourselves as reasonable?
Perhaps not. Too many episodes of CSI where chemistry yields all. At the moment we enjoy more information, more easily accessible, than at any time in the history of the planet. My phone holds more than all the scrolls at Alexandria. So if a thing is a fact, it is recorded; it is deduced; it is cataloged. It brooks no doubt whatsoever.
I think it is fair to ask whether, whatever standard these jurors applied, it could result in a conviction anywhere at anytime. After all, if there is no room for a simple human estimate of guilt, then the entire adversarial system can henceforth be replaced, with a simple review of the chemistry.
Monday, July 4, 2011
Happy 235th, big guy!
Ha! 235, sure, but we both know the real story, right? 235 years since we started counting. More like 525 if we go back to Columbus. And don't get me started on the Vikings!
But hey, no skin off your nose either way right? Sure, you look still look great in a suit, nobody's denying that, and you pull off the stove pipe hat, but nobody expects you to look like like a spring chicken anymore. I mean you're not Jack Lalanne (he should rest in peace). On the other hand, Rome fought off an invasion from the Gauls at your age. Though Rome also demonstrates that nobody lives forever, and you gotta take care of yourself.
No, you're showing some wear and no one begrudges you that. And experience counts for something. But it is maybe time to take stock. Don't get me wrong; there's still plenty of time to fulfill all that early promise. But you may need to pay a little more attention to the clock. And would it kill you to exercise a little self determination? All that entitlement has left you a little soft around the middle. Not sure how well you'd fare if things really got tough.
And I don't like bringing it up on your birthday, but your spending problem...its getting out of control. I know we've talked about it before, and there's always some good reason: The Great Depression, World War II, the War on poverty, spending the Soviet Union out of existence. But you have to admit the excuses are getting a little thin. Encouraging home ownership? By giving a mortgage to anybody with a check stub and a copy of Martha Stewart Living? And don't give me that bit about how Fannie and Freddie are private, those punks wouldn't make a move without you--if you tell them everybody gets a house everybody gets a house.
All I'm saying is that there's always an excuse, and, up till now, I've accepted them, because you always manage to pull a rabbit out of your hat. See, Americans are pretty good at innovating even as things get worse. That means we've been able to keep growing, even while you kept skimming off the top.
Come on, don't look so shocked. We all knew you were doing it--heck, you even stopped pretending after the first few hundred years and took it right from our paychecks. We didn't say much. We like living here and you kept the place nice. But frankly, a lot of us are starting to wonder what we're getting for our money.
No, its not about your intentions. I know you've got a heart of gold and you hate to see anybody poor or tired, especially the huddled masses. And the wretched refuse...well, they could always count on you. The problem is--well, its embarrassing to say this after this long--well, nobody really expects you to pay it back at this point. I was talking to China and they told me how they saw you at the Drop Inn and you hit 'em up for another 20 bucks "just until payday". China says they're through, no more, and they sound like they mean it.
Ok, no more crying. We've been down this road before. Remember Gramm-Rudman-Hollings? Remember all that talk about a balanced budget amendment? Even a line item veto, that was gonna fix everything. Well, I'm not buying it anymore. Get your credit cards. We're cutting them up.
What? No, I don't know what you'll do if you have car trouble. Guess you better get a bus pass. You should have thought of that before you went to Libya. Seriously, another war? Now? Shouldn't that tell you that you have a problem? What are you going to do with another war? You never even finished Vietnam and Korea!
Stop crying! C'mon, your colors are starting to run...ok, ok. Look, I'll give you another couple of months. Ok? Just a few months. To get your car fixed. But don't let me catch you using those cards at the minimart! And after that, its down to business. We really mean it this time.
But hey, no skin off your nose either way right? Sure, you look still look great in a suit, nobody's denying that, and you pull off the stove pipe hat, but nobody expects you to look like like a spring chicken anymore. I mean you're not Jack Lalanne (he should rest in peace). On the other hand, Rome fought off an invasion from the Gauls at your age. Though Rome also demonstrates that nobody lives forever, and you gotta take care of yourself.
No, you're showing some wear and no one begrudges you that. And experience counts for something. But it is maybe time to take stock. Don't get me wrong; there's still plenty of time to fulfill all that early promise. But you may need to pay a little more attention to the clock. And would it kill you to exercise a little self determination? All that entitlement has left you a little soft around the middle. Not sure how well you'd fare if things really got tough.
And I don't like bringing it up on your birthday, but your spending problem...its getting out of control. I know we've talked about it before, and there's always some good reason: The Great Depression, World War II, the War on poverty, spending the Soviet Union out of existence. But you have to admit the excuses are getting a little thin. Encouraging home ownership? By giving a mortgage to anybody with a check stub and a copy of Martha Stewart Living? And don't give me that bit about how Fannie and Freddie are private, those punks wouldn't make a move without you--if you tell them everybody gets a house everybody gets a house.
All I'm saying is that there's always an excuse, and, up till now, I've accepted them, because you always manage to pull a rabbit out of your hat. See, Americans are pretty good at innovating even as things get worse. That means we've been able to keep growing, even while you kept skimming off the top.
Come on, don't look so shocked. We all knew you were doing it--heck, you even stopped pretending after the first few hundred years and took it right from our paychecks. We didn't say much. We like living here and you kept the place nice. But frankly, a lot of us are starting to wonder what we're getting for our money.
No, its not about your intentions. I know you've got a heart of gold and you hate to see anybody poor or tired, especially the huddled masses. And the wretched refuse...well, they could always count on you. The problem is--well, its embarrassing to say this after this long--well, nobody really expects you to pay it back at this point. I was talking to China and they told me how they saw you at the Drop Inn and you hit 'em up for another 20 bucks "just until payday". China says they're through, no more, and they sound like they mean it.
Ok, no more crying. We've been down this road before. Remember Gramm-Rudman-Hollings? Remember all that talk about a balanced budget amendment? Even a line item veto, that was gonna fix everything. Well, I'm not buying it anymore. Get your credit cards. We're cutting them up.
What? No, I don't know what you'll do if you have car trouble. Guess you better get a bus pass. You should have thought of that before you went to Libya. Seriously, another war? Now? Shouldn't that tell you that you have a problem? What are you going to do with another war? You never even finished Vietnam and Korea!
Stop crying! C'mon, your colors are starting to run...ok, ok. Look, I'll give you another couple of months. Ok? Just a few months. To get your car fixed. But don't let me catch you using those cards at the minimart! And after that, its down to business. We really mean it this time.
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