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You can’t create a twenty-first century society based upon an educational system promoting the myth that you can be all you can be — by just showing up; enforced by an mediocre bureaucracy – which essentially just shows up; built on a twentieth century industrial model to create workers for factories — that no longer exist; and enforced by a geopolitical financial establishment — totally hedged against any risk.
— Jerry Bannon, The Wonder Springs Chronicle, 25 January 2012, Publisher and angry American citizen

By attempting to pick up where we left off last week and close out this brief series, this article runs significantly longer than I normally like, but I think the context helps provide a cogent framework to build toward a positive future economic path. Borrowing the outline, and placing it in a totally different context from what was presented in a Monday evening presentation I attended, the conclusion is: Make wine, not argument, and definitely not war.

When your first job after graduating from college is in military intelligence, the one universal law is to: Never believe anything you are told without verifying it from at least two other independent sources. Through experience, even in the more communications side of the spy craft, like the National Security Agency, contrasted with the real spooky dudes, you quickly learn that the real world does not operate as it is generally hyped and anything approaching the real truth is hard to come by.

This of course can quickly make you cynical, if not tempered with the most powerful force in the world — which is truth. Truth always comes with a cost and most of the time untruth grows not so much from its power, but from the naïve perception we do not possess the resources to dismantle the presuppositions of these lies.

One such untruth fostered through the media, especially at this time, is that we live in a global capitalist system of markets. This whole myth supports inductive extreme views that in order to move toward the shining city on the hill, we need either to restrain capitalism or unleash capitalism and markets will work their magic.

Neither view is able to grasp the reality that the industrial consumer age we experienced during much of the twentieth century is unsustainable, because all the productivity gains we have been able to achieve, especially in the last thirty years, have been offset with decreasing efficiencies and centralization.

Tags: capitalism, high marginal tax rates, Laffer Curve, Collectivist Elitists, Laissez Faire Scoundrels, Reagan Revolution, Glass-Steagall, debt, Alan Greenspan, GDP, globalism

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This is econ 101: when a family is richer, its older workers demand higher wages to stay in work and its younger workers demand higher wages to take a first job. The dynamic contracts available jobs unless offset by an equal or greater rise in productivity.
— Edmund Phelps, Financial Times 11 January 2012, 2006 Nobel Laureate in Economics

Late in last week’s article I used an archaic word, which at the time I had not noticed. But shortly thereafter, I wondered if any American still understood what I was writing about and even if they had an inkling of its meaning, if they could at all grasp the implications of what that word, if really put into practice, would actually do to the economic muddle we now find ourselves. Dear readers that word we don’t hear anywhere anymore is: decentralization.

In my lifetime the United States of America, has become really the federal government unitasker of the world and its current and potential prosperity. There was some talk within the early days of the Tea Party and the talking points of Republican candidates for the presidency, about states rights; and of course Ron Paul and his libertarian base speak of smaller government and in favor of individual rights, sometimes bordering on anarchy. The word decentralization however is to be found nowhere in anybody’s conservative lexicon.

As far as Barack Obama, the liberal-progressive-left and the Democrat Party, it seems that they think there is no problem that more government spending will not cure, particularly if it originates within the federal government unitasker, an then forces the un-sovereign states to fund what the federal government doesn’t have the political will or the constitutional power to implement.

Furthermore, like all elitists of their persuasion, they believe that new wealth can be created, as do most Republicans, through tax incentives to crony capitalists, which through mergers and acquisitions, will provide the economic basis for the continuing growth of government programs, including entitlement programs and wealth redistribution.

Late Sunday we posted a short video from CNBC last Friday with Edmund Phelps, whose quotation above, from a recent article in the Financial Times, begins our discussion this week. In that video he speaks of the role of particularly southern European governments who sponsored wealth creation for their citizens through entitlement programs, yet through unintended consequences are linked to both a decline in national productivity as well as a significant cause of the euro crisis.

Tags: economics, Edmund Phelps, productivity, wealth, efficiency, USA, liquidity, Business Ecology, Great Depression, Collectivist Elitists, Laissez Faire Scoundrels

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Neither a borrower nor a lender be,
For loan oft loses both itself and friend
And borrowing dulls the edge of husbandry.
— Polonius, Hamlet Act 1, scene 3, 75-77

Well shucky darn and slop the chickens!

It seems Friday’s long sought solution to the European debt crisis is just another in the series of now over used “kicking the can down the road, (until it is kicked off the cliff) metaphor is back. The whole shebang lasted over the weekend. Thankfully we have the French to praise for the five-day workweek, for God only knows what would have happened without that break.

But at least the Eurocrat elites are hard at work at their misadventure, the American federal government’s political class, both the President and the Congress, seem to like their adventure into the lazy-fairy world of the historic continental work ethic.

At Wonder Springs we have no hesitation to say that on both sides of the Atlantic, the elitists across the political and economic spectrums, seem immersed in trying to create a new and better Babylon, ignoring that Biblical story, as not even a myth, but a children’s boogie-man piece of fiction.

We are beginning another winter, like in the C. S. Lewis’ Narnia Wardrobe tale, “where it is always winter, but never Christmas” which is playing out in reality for far too many subjects, or serfs, or peasants, or lowly evolved talking animals. This is occurring within the grand scheme to make a world of prosperity, based upon a faux world of finance, completely divorced from nature and natural law.

So to cut this string of allegory and metaphor, we shall exit, stage right, with a Palin: How’s that hopey changey, thing workin’ out for ya!

Tags: finance, Babylon, jobs, C. S. Lewis, risk, Collectivist Elitists, Laissez Faire Scoundrels, Entrepreneurial Pioneer Area, Business Ecology

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She named the boy Ichabod, saying, “The Glory has departed from Israel”—because of the capture of the ark of God and the deaths of her father-in-law and her husband.
— 1 Samuel 4:21, Daughter-in-law of Eli, Israel’s High Priest

The glory has departed – the whole world.

“What’s up Doc?” said Bugs Bunny.

“Bugs, sad to say, things ain’t that peachy keen, all over the globe, it has simply become Ichabod’s world!” replied Elmer Fudd.

Sadly, we are forced to live in a real world; the cartoon financial fantasies of the twentieth century have forced us to look at the twenty-first. To take off the rose colored glasses and not only look at a real three dimensional world, but for the first time, in a very long time, to question some of the assumptions that have guided our make-believe world of that epoch.

I realize that this rather a stark way to look at the world and the nation, especially this week when the nation celebrates its Thanksgiving Holiday. But when you seriously look at what is happening Ichabod seems like a just description. This week besides tomorrows thanksgiving feast, we are marketed the hype that this will be “Turkey Day and Professional Football,” the nation’s pseudo religion. That followed by Black Friday when it has become the practice of feeding the god of consumer gluttony.

Lest we forget today was the day when the American Congress, Democrats and Republicans, were supposed to begin to act like adults and make a true token gesture in beginning to reign in some of the federal government’s excessive spending, in a somewhat controlled environment.

The $1.2 trillion in savings, however was really way less than a token, the real work would have been to make those savings on an annual basis. A real functioning republic would have seen it within reason, to make those cut to one percent of GDP, so that we could have seriously begun to restructure and rethink the role of government, so that it represented the vast majority of our people; not those just on the conservative and liberal extremes of their political parties.

Tags: Ichabod, Thanksgiving, economics, finance, compound interest, Laissez Faire Scoundrels, Collectivist Elitists, Babylon

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The whole world is so greedy for bathtubs that it has lost the stability necessary to build them, or even turn off the tap. Nothing could be more salutary at this stage than a little healthy contempt for a plethora of material blessings.
— Aldo Leopold, A Sand County Almanac, March 1948

Since our consumer world has begun to outwardly head into the ditch in 2007, there as been much said, pontificated, argued and discussed about the reasons for our current muddling economy and direction for the future. Little however, has been articulated regarding the need for economic competition and decentralization, especially federal government decentralization.

Presidential candidate Rick Perry in his book Fed Up! Our Fight to Save America from Washington, indicates his focus on the national government, but seems to look at one of the trees but misses the centralization forest. This of course has been the Republican mantra for as long as I can remember as they, along with the Democrats, “progressively” centralize more and more power at the national level.

Agriculture, Education, Environment, Healthcare, Housing, Military, Social Security and Transportation are just a few of the centralized bureaucracies that drive the national agenda. With largesse, contrary to all the rhetoric to the contrary, and essentially by definition, begets a lack of competition.

Centralization however is really the way we humans choose to solve our community and cultural problems throughout recorded history. Since the Tower of Babel in the Old Testament until the passage of ObamaCare in the United States, to the Eurozone attempts to unify distinct nation states, into a financial precursor to another attempt to create the human Babylonian utopia, we believe we are significantly collectively smarter than we are individually.

Tags: Aldo Leopold, competition, decentralization, Natural Law, Collectivist Elitists, Laissez Faire Scoundrels, F A Hayek, Congress