On more than one occasion you have
offended me, but in my qualities both as Christian and philosopher I have
always forgiven you and only pitied you for your errors.
— Nicola
Tesla, Inventor, Engineer, Philosopher,
1856-1943
Last week, October jobs numbers were reported. The net
numbers were 100,000, a number below those required to keep up with population
growth.
So where are all the jobs?
There really is a common sense reason for the lack of jobs.
You wonÕt hear it from the politicians, the financial gurus, or the economists.
Actually the chance of you reading it anywhere other than right here at the
Wonder Springs Chronicle is slim to none!
Simply the reason there are no jobs is the fact that job
creation throughout the history of mankind has been totally asset based. In a
faux world, in which it is believed that universal debt financing is the basis
for economic growth — is simply wrong.
Furthermore the simple reason the debt-myth-lie is
continually broadcast ad nauseam is that Òthem that pitches this hype donÕt
know no better.Ó As an example the first rule of educating an industrial age
specialist is to throw common sense out the window, because the world is too
complex to be understood beyond the simple part we all play in the production
of goods and services game. Hence we all need to specialize; that is the
current universal jobs paradigm.
As we have continually pitched on these pages for at least a
year and a half, jobs are created by startup, entrepreneurial enterprises.
These startup job creators cannot afford to hire specialists, except as outside
contractors. In a startup business, whether it is a copy shop, or farm, or
repair business, or professional service you need people who are ready willing
and able to perform a number of diverse tasks and do them all well.
All prosperous enterprise endeavors do not need an
educational system that teaches potential employees to believe they deserve
rewards for just showing up, but never finishing anything, who have absolutely
no concept of true excellence, or the competitive nature of the real world, are
not needed, and they only get in the way. This is even more reality in a
startup.
The great difference between the current participants in the
Occupy whatever, the 60s and 70s flower children and the Vietnam War protestors
is that way back then the object was to get out of the way. Out of the war, out
of the culture, Òturn in, turn on and drop out.Ó TodayÕs occupy groupies think
that by getting in the way, that somehow makes them important. When in reality,
they are specialists in nothing that the real world needs, and they were
essentially forced into debt, maybe up to $100,000 to reinforce that reality.
Sadly most of these people were not alive when we started
down this steep path to Gomorrah. I wasnÕt old enough to vote in 1964 when
Lyndon Johnson defeated Barry Goldwater. But there are similarities with the
election of Barack Obama in 2008. Generally, much of JohnsonÕs victory margin
was not so much an endorsement of Johnson, as a vote against Goldwater.
Americans are generally conservative, but they were not as conservative as
Senator Goldwater.
With the election of Barack Obama, his victory margin was
not so much and endorsement of his Òhope and changeÓ agenda, but rather a vote
against the continuation of the Republican reign of George W. Bush.
Richard Nixon won the 1968 election over Hubert Humphrey and
George Wallace. I never voted for Mr. Nixon either time, because as I used to
say back then, ÒIf the United States can handle eight years of Richard Nixon,
it is a lot stronger than I can imagine.Ó
Thanks to the Watergate Scandal we didnÕt have eight years
of Richard Nixon, but this has been just a long introduction to show that we
really have Richard Nixon to thank for the predominance of this current mess.
Our current economic woes rest on three Nixon Administration distinctives: Fiat
Money, the All-Volunteer Military and Chiefly Nationalized Agricultural
Subsidies.
Of course Nixon was just trying to fix the financial
problems that he inherited from the Johnson Administration. So what really
happened, to use the current metaphor, under Nixon we began the kicking the can
down the road form of leadership.
Under any form of sound money, even fiat money, the debt
supercycle could have never been created.
Without the All-Volunteer Military we would have never gone
into Afghanistan or Iraq, and there is a strong possibility that 9-11 would
have never happened.
With even a semblance of free markets in agriculture, our
current industrial food system would not be so totally dependent on unsustainable
practices, and we would not be funding below cost of production subsidies to
crony agribusiness and fast food service providers.
Where are the jobs? Thanks to the above, how can you grow
jobs when we have no current fertile soil in which to plant the seeds of job
creation? Furthermore we have so cannibalized, through excessive debt leverage,
the jobs planting equipment itself; which means we must also rebuild that
entrepreneurial infrastructure.
Common sense tells us we need to start at the beginning, the
real beginning. At the Wonder Springs Chronicle we have what would be described
as a ÒprimitiveÓ young earth worldview. That is the only worldview consistent
with the creation story in the Bible, but also the only worldview that takes
into account and gives a reasonable basis for the complex world in which we
live.
To say that our present world evolved out of universal chaos
takes more blind faith, or something much worse, since it requires the
increasing natural complexity, to develop order contrary to all the natural
laws of thermodynamics, energetics, biology and chemistry.
But what our modern evolved world fails to understand is
that, no matter what road you choose to get to the present, that road simply
runs from randomness to organized complexity, complexity way too interrelated
for the individual or a community to fully grasp. Yet our very human desire is
to take that complexity and make it simple enough for us to not only
understand, but also to manipulate it to suit our desires for security and
individual and corporate achievement, in both the broadest and in the most
specific senses.
As we touched upon last week our global banking system of
finance, debt, and leverage based upon the Òuniversal law of compound interestÓ
is totally inadequate to deal with the risk premiums necessary to protect the
real uncertainty involved in the process of essentially creating order out of
some measure of chaos. Yet this is the very fundamental process required to
create jobs and to ensure continual growth within any simplified economic model
of the natural world.
The result is that the only growth sector that truly finds
opportunity within the current world are those who speculatively invest
compound interest funds, wherever they can find them, keeping any rewards for
themselves and to walk away when their bets on their own genius go wrong. This
leaves the true bankers and the broader human community on the financial hook
for the fallout.
We are not going to change that process by more regulations,
taxes, austerity measures or any other status quo process. Greece is still
going to default, because no matter how collectively high and mighty, or how
individual greedy you look at the euro and the European Union. The so called
Club Med is still going to take advantage of the current system, leaving the
Germans and other more financially conservative countries to pay the bills.
The fundamental paradigm of reality that our modern world
fails to realize, is that the buck always ends with accountability and no
matter where you draw the line, those beyond the line must be eventually held
accountable for their behavior. But the way the world works now is that they
are given a pass, because the whole world cannot ÒriskÓ the consequences of
their deals. In our house of economic cards, virtually all collective good is
too big to fail, even though that failure is the only solution that will
ultimately solve the problem.
Our solution in a powerful way must redefine capitalism,
because capitalism is built upon the banking principle of compound interest.
What made it work until the beginning of the twentieth century was the open
frontier that adequately, if not fairly, distributed the true risk premium to
the pioneers, however you may wish to define the pioneer concept.
For over a century we have been living on essentially the
compound interest of those pioneering investments. Those pioneer investments
were almost totally sweat equity investments, in that the total financial
outlays were well within the scope of individual and the closely knit local
community.
The problem with the twentieth century is that we ÒevolvedÓ
in our thinking, simplifying that pioneer ecosystem, by not continuing along
the path of complex diversity, but introducing ÒcollectiveÓ simplicity to
manage complexity, so that the individual became the servant, if not the serf
of the Industrial Age, of first manufactured goods, but eventually manufactured
everything, including food, services and human jobs. In blunt terms our world
became a universe of unitaskers.
So today, in the early twenty-first century, the evolved
solution is to redux the twentieth. The Liberal solution is to do this through
industrialized government. The conservative solution is to do it through a
continuation of enterprise industrialization. Neither process even begins to
understand the nature of compound interest risk we must at least acknowledge,
if we are to allow an environment of job creation to essentially create itself.
This solution must, at least in some degree, replace the old nineteenth century
pioneer sweat equity with capital financial equity.
We call these new job creation environments ÒEntrepreneurial
Pioneer AreasÓ (EPAs). In Herman CainÕs 9-9-9 Plan he uses the concept of
urban Empowerment Zones, to promote economic renewal. Following in current
Republican doctrines, the other presidential candidates seem to be content to
allow simplistic tax cuts and spending cuts to redux twentieth century
industrialism.
As far as president ObamaÕs Jobs Bill, he even more so,
doesnÕt seem to grasp anything beyond historic twentieth century Collective
Elitist simplistic thinking.
Our correct answer is: None of the above will get the jobs
job done.
The Industrial Age basically relied on urbanization and
factory jobs to provide the goods and eventually the specialized services to
empower its economic growth. The other way to spin it is that you canÕt keep
them down on the farm, when the only economic opportunity results in the
depopulating of the rural west, because true subsistence isnÕt an easy life.
The Third Opening of the West is the only viable
alternative, as the Industrial Age Shining City on a Hill continues to become
economically and energetically unsustainable. I fully realize that Shining City
metaphor is perhaps the greatest example of American exceptionalism — a
true religion. From the early religious Pilgrims through the Reagan Revolution
to today, that Babylonian city concept is the vision of all elitists, wherever
they may stand along the political or the religious spectrums.
Furthermore throughout the twentieth century, city life not
only provided financial security it also provided cultural benefits
increasingly no longer available in rural areas. But until the closing of the
frontier, the Second Opening of the west provided all the cultural benefits of
the city, as well as the economic opportunities that were not available in the
city, except to the financial elite. Human beings, no matter where they may
live, by their nature create complex communities and cultures only limited by
the availability of their resources.
That history is slowly repeating itself a century later,
except for the Third Opening of the West has yet to provide any economic
opportunities, because there is no access to capital except, leverage capital
based upon unrealistic industrial growth paradigms. As a result we have not
just a jobless recovery, but job growth that hasnÕt kept pace with the increase
in population.
In our criticism of Herman CainÕs 9-9-9 Plan we said that
EPAs should basically include all the red areas of the red-blue political
divisions, which have been defined down to the county level.
EPA general provisions include no capital gains on the first
$10 million forever. All Blue Area regulations, which have been promulgated to
control urbanization, would be eliminated. All government agencies that exist
must be altered from the paradigm of ÒYou canÕt do that!Ó to ÒHow can we help
you achieve these minimal regulations.Ó
I used to tell would be entrepreneurs that you can buy an
urban lot for a million dollars, but there are whole small towns in rural
America that can be purchased for a million dollars. While that is just a
talking point; the reality is that we are slowly developing the twentieth
century infrastructure of wireless and fiber optic bandwidth in rural areas.
These are functions of government-private cooperation, just
as electrification and telephone communications were functions of
government-private partnerships during the closing of the physical frontier. However
much of the current infrastructure hype is really about fixing the stuff that
should have been handled through proper maintenance, which in itself would have
been a true source of sustainable jobs.
Furthermore under the surface of all the green energy
hyperbola and hubris is the reality that these technologies really are best
operated as direct current electrical systems. That means that to serve urban areas
it must be converted to alternating current for transfer over the electrical
grid, even the smart grid. However in less dense human environments, there are
true advantages to direct current. Advantages we lost when Thomas EdisonÕs
electrical vision lost out to Nikola TeslaÕs alternating grid.
Just like rural life lost out to urban growth during
twentieth century industrialism, in the twenty-first century economic
opportunities of rural areas will begin to create not only jobs but also true
wealth based upon common sense principles of humanity and not just wishful
thinking, financed by leveraged debt. These opportunities will not create any
shining cities, but diverse communities of knowledgeable individuals living a
lifestyle much more complex, than will be available in decaying industrial
urban centers.
The Third Opening of the West will change the American
Landscape in a way that will provide economic and cultural opportunities,
because of the reality natural law principles of diversity and sustainability
will always provide more opportunity than can be provided by simplistic human
cultural manipulations fostered by a simplistic unrealistic worldview.
©
2011: All rights reserved.
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