Week in Review

The Sixties radicals hated capitalism.  And the profit incentive.  They sang songs about love.  And revered communist leaders.  For they wanted to replace capitalism in America with communism.  Where no one owned anything.  But everyone owned everything.  It would be utopia.  This is what the Sixties radicals believed.  And what they wanted in the United States.  A system where they put people before profits.  So it would be like in that John Lennon Song.  Imagine.

Imagine no possessions
I wonder if you can
No need for greed or hunger
A brotherhood of man
Imagine all the people
Sharing all the world…

The Sixties radicals loved the former Soviet Union.  Because the Soviets hated capitalism.  And embraced socialism.  Putting people before profits.  These radicals loved Che Guevara.  One of Fidel Castro’s trusted lieutenants.  Who wanted the Soviets to launch their nuclear weapons on America.  (Remember this the next time you see a college student wearing a t-shirt emblazoned with his image.)  They liked Chairman Mao in China.  And Ho Chi Minh in Vietnam.  And every communist leader in Central America and South America.  For these communist leaders hated capitalism.  And put people before profits.  Just like in North Korea.  Who unlike the former Soviet Union (now Russia) and China, did not lose the faith and embrace capitalism.  No.  In North Korea they still put people before profits (see NKorean soldiers put down arms to help plant crops by JEAN H. LEE, Associated Press, posted 4/24/2013 on Yahoo! News).

The North Korean side of the Demilitarized Zone is a hive of activity — not of fighting, but of farming.

Beyond the barbed wire, ruddy-faced North Korean soldiers put down their rifles Wednesday and stood shoulder to shoulder with farmers as they turned their focus to another battle: the spring planting.

As neighboring nations remain on guard for a missile launch or nuclear test that South Korean and U.S officials say could take place at any time, the focus north of the border is on planting rice, cabbage and soybeans. In hamlets all along the DMZ, soldiers were knee-deep in mud and water as they helped farmers with the spring planting…

Last month, Kim Jong Un enshrined the pursuit of nuclear weapons, along with building the economy, as key goals for the nation.

Col. Kim, at the lookout point along the DMZ, called nuclear weapons “the lifeblood” of North Korea. “If we don’t have nuclear weapons, we’ll continue to be threatened by outside forces.”

For the moment, however, the labor of many North Korean soldiers is turned to the land. Spring is arriving slowly this year in North Korea, pushing back the crucial planting season by a month. Impoverished North Korea struggles to feed its 24 million people, with the U.N. estimating that two-thirds of the population cope with chronic food shortages.

Farmers in Panmunjom-ri, the North Korean village inside the DMZ, were busy planting rice, cabbage, soybeans and radish in fields surrounded by barbed wire and anti-tank barriers.

Elsewhere, faces flushed and still in their uniforms, men and women soldiers waded into muddy paddies and bent down with fistfuls of spinach to plant.

Around them, red banners fluttered in the wind. One read, “At a breath,” a phrase urging North Koreans to work hard. The other read, “Defend to the death.”

This is what you get when you put people before profits.  A nation with nuclear weapons.  And recurring famine.  Where the army has to pitch in during the planting season.  Because they are still farming in North Korea the way they were a hundred years ago.  By hand.  Meanwhile the United States grows so much food that they use some of it to make ethanol to put into their cars.  This is what you get when you put profits before people.  So much food that you can use it for fuel.  And where even the poorest people suffer from obesity problems.

You see, when you put profits before people you are putting people first.  For to earn a profit you have to please the people.  You can’t order them to buy your products.  Like the North Koreans can order their army to plant food.  You have to make a product the people want to buy.  And only when you please the customer can a business make a profit.  While the ruling regime in North Korea can kill hundreds of thousands of their people in a famine and they still live the good life.  Because when you put people before profits you can do pretty much anything you want to do.  Because the only people that truly matter are the people with the army to enforce their rule.

But south of the border it’s different.  In South Korea life is good.  And they suffer no famines.  Because they embrace capitalism.  Some people live better than others.  Such as those in Gangnam.   The area of three districts in Seoul, South Korea.  Immortalized in the video Gangnam Style.  A lifestyle that simply does not exist in North Korea.  Unless you’re high up in the ruling regime.  Because when you put people before profits only those with an army behind them can afford to live the good life.

So if you want to see the difference between capitalism and socialism/communism look to the Korean peninsula.  Where you will see a vibrant South Korea full of happy people.  And an Orwellian North Korea where the people live in fear and are often cold and hungry.  Because they put people before profits.  Where it’s easy to imagine they have no possessions.  Because they have little.  Well, the people don’t.  But the ruling elite certainly lives Gangnam style.  Like all dictators do.

www.PITHOCRATES.com

Economics 101

The Party of the Working Man misrepresents the Jobs Data and Lies to the People

Figures don’t lie but liars figure.  Something Mark Twain is said to have said.  Mark Twain is, of course, Samuel Langhorne Clemens.  But we know him by his pen name.  Mark Twain.  And the author of The Adventures of Tom Sawyer and Adventures of Huckleberry Finn.  But he was also a science buff.  And close friend of Nikola Tesla.  The father of AC power.  And he thought that most Congress people were liars and thieves.  With personal agendas.  Who will lie about facts and figures to get what they want.  And what do people in government want?  What all people in governments throughout time have wanted.  Wealth.  And power.

Every king, noble and aristocrat has acted selfishly in history to acquire wealth and power.  The privileged few.  Or one.  They held the power.  Traded favors.   And worked together.  Landowners amassed great wealth thanks to peasants working their land.  The king maintained the system that limited land ownership to a privileged few.  And the privileged few paid back the king with a share of their wealth.  By working together they exploited the masses to amass wealth.  So they could live the good life.  Comfortable in their wealth.  With the power to do whatever they wanted.  And this hasn’t changed over time.  Well, it has in one respect.  With the advent of democracy it is a little more difficult to do what you want when in elected office.

Today no one leaves Congress poor.  They are set for life.  With a generous pension.  And benefits most workers never get while gainfully employed.  And how do they do this?  The same way that kings, nobles and aristocrats have always acquired wealth.  By using political power to exploit the masses.  And the key to this is growing government as large as possible.  To give them that power.  And the ability to grant favors.  Throwing a few handouts to the peasants to win their love and admiration.  Thus pleasing enough of the electorate to win elections.  But the policies they use to make this happen have a major drawback.  They are anti-business.  And kill jobs.  Putting people out of work.  Which can be a problem when you’re the party of the working man.  And working woman.  So you have to at times misrepresent the jobs data.  And lie to the people.

The United States and Kim Jong Un have an Obesity Problem while the North Korean People suffer Famine

History has shown that low taxes and limited government grow economies.  This is what made the United States the number one economic power in the world.  Which was able to happen because it happened before the era of Big Government in the United States.  Right now there are emerging economies in the world going through a similar phase.  And their stellar economic growth will sputter out once the size of their governments grow.  Just like they have in many advanced economies that have transitioned into a social democracy.  For there is nothing that stamps out economic growth like higher taxes and greater regulatory costs.  Which is why the Soviet Union, the countries behind the Iron Curtain in Eastern Europe, The People’s Republic of China (under Mao), North Korea, Cuba, etc., have never been great economic powers.  Instead these countries that practiced fairness and redistributive policies suffered some of the most abject poverty and the lowest standards of living.  Not to mention having some of the most brutal and oppressive police states to keep their people from fleeing their social utopias.

But when it came to economic production these nations all lied to their people.  If you listened to the Soviet propaganda machine communism had won.  There was no way free market capitalism could match the managed communist economy.  They were growing bumper crops.  Their factories were putting out more goods than they could use.  And life was just peachy in the Soviet police state.  A lot of people in the West believed this.  And fought to undermine capitalism so they, too, could install socialist utopias in the West.  But the people living in those socialist utopias had a little more trouble believing the lies.  For they were waiting hours in lines to buy soap and toilet paper.  They saw stores with empty shelves.  And stores with shelves full of things no one wanted to buy.  They had to wait years before it was their turn to buy a car.  Or get an apartment.  And forever speak in hushed tones for fear the secret police might hear them utter some dissatisfaction of the socialist system.  Lest they disappear to some reeducation camp in Siberia.

And while the people suffered those in power did not.  In socialism everyone was equal.  But like George Orwell said in Animal Farm, some were more equal than others.  North Korea suffers from recurring famine.  And depends on food imports to prevent future famines.  So your average North Korean is not going to have an obesity problem.  While the United States suffers an obesity crisis because their people eat too much food North Korea suffers through recurring famines where people starve to death.  But you know who isn’t starving to death?  Kim Jong Un.  The new ruler of North Korea.  Who not only appears to be well fed.  But even looks obese.  And this in a country that suffers from recurring famines.  And it’s been the same throughout history.  Those champions of the people always lived better than the people.  For those in the inner party in the Soviet Union went to the front of the line when it came to cars and apartments.

Kings, Nobles, Aristocrats and those in the Federal Government act Selfishly to acquire Wealth and Power

This is why people want political power.  Because it is a pathway to wealth.  Especially for those people who don’t have the ability to create wealth on their own.  Like a small business owner.  So they need to use political power.  Favor.  Privilege.  And deceit.  Which is an important tool for today’s politician’s in a democracy.  Deceit.  Such as when they figure with the economic figures.  The Obama administration has implemented some of the most business unfriendly policies that have just stamped out all economic growth.  Which is why we have been wallowing in a jobless recovery following the Great Recession.  While some would even say the Great Recession lingers on.  Despite what the economic data says.  For they have little faith in the numbers anymore.  For with every jobs report the Obama administration highlights the new jobs the economy created.  And how even though the numbers could be better we are definitely on the right path.  As the unemployment rate continues to fall.  Dropping below 8% just in time for the 2012 election.  As no president ever won reelection with an unemployment rate above 8%.  So it was rather convenient it fell just in time for the election.  Perhaps a little bit too convenient.  Especially when you look at the other economic numbers (see Table A-15. Alternative measures of labor underutilization and Labor Force Statistics from the Current Population Survey).

The U3 unemployment rate is the official unemployment rate.  Which fell to 7.6% in March.  Yet another improvement.  But the U3 unemployment rate doesn’t count everyone who can’t find a full time job.  The U6 unemployment rate counts more people who can’t find a full-time job.  And it fell to 13.8% in March.  Which is an improvement.  But the number of people who can’t find a full time job is still in double digits.  And has moved little from around 14%.  One thing both the U3 and the U6 numbers have in common is that they have changed little in the last 6 months.  While the number of people in the civilian labor force has changed.  A lot.  So one of these numbers doesn’t appear to agree with the other two.  For if the unemployment rate was steady one would think the number of people in the civilian labor force would be steady, too.  Which makes one question the accuracy of the official unemployment rate.  And the constant reports of how the economy is improving.  How it’s on the right path.  As they talk about all the new jobs their policies have created.  Despite the stubbornly high unemployment numbers.  But if we look at that job creation and the changes in the size of the civilian labor force we get a different picture of that improving economy (see Employment Situation Archived News Releases).

The latest jobs report shows 88,000 new jobs added to the economy.  Less than projected.  And a bit of a disappointment to those in the ‘the economy is on the right path’ crowd.  But they still find solace in the fact that the economy added jobs.  Just as it has for the previous 5 months.  If you add this job creation up during this 6-month period it totals 953,000 new jobs.  That’s about 1 million new jobs.  Not a strong recovery.  But not too shabby.  But if we look at the change in the civilian labor force we don’t see 1 million new jobs.  Over the same 6-month period we see a net LOSS of 28,000 people from the civilian labor force.  Which agrees more with the reality of the current economy.  And the U6 unemployment rate.  It’s bad.  People can’t find a full-time job.  And it’s because of the anti-business policies of the Obama administration.  But for the past 4 years or so they have massaged the jobs data to lead us to believe that they were creating jobs when they were actually destroying jobs.  Why?  Because kings, nobles, aristocrats and those in the federal government act selfishly to acquire wealth and power.

www.PITHOCRATES.com

Week in Review

George W. Bush included North Korea in his Axis of Evil.  Because they were a Stalinist regime with nuclear ambitions.  Who oppressed her people.  Even starving them to death in the occasional famine.  But that was the cowboy days of George W. Bush.  Who made the world hate us with his swaggering and bullying ways.  President Obama was going to make the world love us once again.  Especially our enemies.  By simply talking to them.  So here we are.  Just finishing our fourth year under President Obama.  Who changed the way our enemies think about us (see North Korea ‘dream’ video shows U.S. city under missile attack by Dylan Stableford posted 2/5/2013 on Yahoo! News).

In what appears to be a provocative PR stunt, a bizarre video uploaded to YouTube by North Korea over the weekend shows a dream sequence that includes a U.S. city resembling New York under an apparent missile attack.

The video, produced by North Korea’s official website, Uriminzokkiri, begins with a young man imagining himself aboard a North Korean space shuttle that circles the earth, pausing to zoom in on a unified Korea…

Near the end of the dream sequence, the imagined U.S. city—including what appears to be the Empire State Building—is shown in flames. (The attack footage appears to have been taken from the video game “Modern Warfare 3.”)

“Somewhere in the United States, black clouds of smoke are billowing,” reads a caption, translated by The Guardian. “It seems that the nest of wickedness is ablaze…”

The video arrives just days after North Korea threatened to retaliate against the U.S. for what it called a double standard stemming from a recent rocket launch by South Korea, which the U.S. said had no military intent…

On Saturday, a North Korean Foreign Ministry spokesman did not elaborate on the threatened retaliation. But according to the Associated Press, Pyongyang recently threatened to conduct its third nuclear test in response to what it calls U.S. hostility.

Did North Korea not get the memo about President Obama becoming president in 2008?  And getting reelected in 2012?  They’re supposed to love us now.  Not threaten us with nuclear tests.  And missiles attacks.  I’m just not feeling the love here.

Perhaps George W. Bush was correct in his foreign policy after all.  And governed like he was wearing big-boy pants.  Like an adult who understands the world.  Not as a child-like liberal with the idealism of a Sixties’ hippy.  For it turns out ‘make love not war’ is not an effective foreign policy.  For there are states out there that just hate us.  And want to rain nuclear missiles down on our cities.  Unless we tremble at their military prowess.  And give them food aid so their people won’t die from yet another famine.

One thing, though, most people probably like in that video was a unified Korea.  Though not in quite the way the North Korean rulers imagine a unified Korea.  One in which the people of South Korea are brought down to the level of those in the North.  But one in which the people in North Korea are brought up to the level of those in the South.  A unified Korea free of oppression.  And free of famine.  This is the dream we have of a unified Korea.

www.PITHOCRATES.com

Week in Review

For awhile there we had hope that Kim Jong Un might not be like his dad.  Kim Jong Il.   That maybe North Korea would change.  Maybe loosen up a bit.  And not be all about famine and nuclear weapons.  But it appears that the new Kim Jong is as bad as the old Kim Jong.  Perhaps even worse (see China calls for talks after North Korean threat by Barbara Demick posted 1/24/2013 on the Los Angeles Times).

With North Korea openly threatening the United States with nuclear weapons, China called Thursday for a new round of diplomacy and appears to be growing increasingly frustrated with its longtime ally.

Beijing’s calls for intervention come amid a torrent of belligerent language from Pyongyang, angered by a United Nations resolution earlier in the week expanding sanctions over its missile and nuclear program.

The latest escalation came Thursday when Pyongyang lashed out at the United States, which it called the “archenemy of the Korean people.’’

“We are not disguising the fact that the various satellites and long-range rockets that we will fire and the high-level nuclear test we will carry out are targeted at the United States,” North Korea’s National Defense Commission said in a statement released by the official news service.

“Settling accounts with the U.S. needs to be done with force, not with words,” it said.

Not true.  The United States likes the people in Korea.  North and South.  It’s the government in the North that the United States has a problem with.  As do the good people suffering in North Korea.  Who would like to escape the oppression of Kim Jong Un.  And to know life without hunger.  To have a home.  Filled with the modern conveniences of life.

The Americans aren’t a threat to the people in North Korea.  They are a threat to the regime that oppresses these people.  We oppose the oppressive regime.  As we oppose regimes everywhere that oppress their people.  We are their friend.  And they know that.  Which is why the United States is the archenemy of North Korea’s ruling regime.  Because we give their people hope.  The last thing Kim Jong Un wants his people to have.

It is the inevitable destiny that the Korean peninsula reunites.  But as the Germans learned at the end of the Cold War this is not easy.  And is costly.  Once the regime falls, and it will fall, South Korea will have a humanitarian crisis on their hands.  China, too.  Millions of people who need jobs.  And food.  Which is probably why China is in no hurry to see Kim Jong Un go.  Even though they’re losing their patience with their longtime ally.  What we need now is a plan to deal with post-Communist North Korea.

North Korea needs massive infrastructure investments.  If you look at the Korean peninsula coastline at night you can tell where South Korea ends and North Korea begins.  For there will be light and life in South Korea after dark.  And only darkness in North Korea.  Someone has to build up that infrastructure.  Someone has to build housing.  Someone has to build the goods to go in those homes.  And someone has to build the factories to build those goods.  North Korea has a lot of people.  And a lot of things that need to be done.  All they need is a plan.  So they can hit the ground running.  To speed up the unification process.  While minimizing the pain of unification.  And the cost South Korea will have to bear.

Or we can continue this dance forever.  Sanctions.  Nuclear threats.  And aid.  We try to punish them for advancing their nuclear program.  They threaten something nuclear.  We negotiate away the nuclear threat in exchange for more aid.  The same old song and dance we’ve been doing for decades.  It’s gotten so old that even the Chinese are tiring of it.  Perhaps suggesting they may be open to a little regime change.

www.PITHOCRATES.com

Week in Review

Apparently the U.S. isn’t the only place there is a war on Christmas (see South Koreans light giant border Christmas ‘tree’ by AP posted 12/23/2012 on USA Today).

South Koreans have lit a Christmas tree-shaped tower near the tense border with North Korea for the first time in two years following North Korea’s rocket launch…

Pyongyang views the tower as propaganda warfare, though it has not yet responded to this year’s lighting…

The tree wasn’t lit last year after officials asked Christians to refrain from doing so to avoid tension following the death of North Korean leader Kim Jong Il last December.

The North Korean government really hates Christmas.  As do all communists.  Who are officially atheists.  As the state doesn’t want anyone worshipping anything but them.  And they don’t want any moral restrains on their abuses of power.  If they want to torture and kill someone they don’t want anyone, or any god, telling them that it’s wrong to do that.  Especially the Prince of Peace.  Jesus.  In a country that has a military-first policy.  Where they will let people starve to death in a famine so they can feed their military.  And do.

The North Korean leaders no doubt know history.  They saw what happened in Poland.  President Ronald Reagan and Prime Minister Margaret Thatcher supported a little labor movement in Poland.  Along with another supporter of peace and freedom from oppression.  Pope John Paul II.  A Pole.  Who supported Lech Walesa.  The leader of Solidarity.  Who lead Poland out from underneath Soviet oppression.  And into a free market economy.  Which is the last thing the North Korean leaders want.  Which is why a Christmas tree on the border really bothers them.  It may give their people hope.

www.PITHOCRATES.com

Week in Review

The world has had some horrible dictators.  And still does.  Who have committed horrible acts of cruelty against their own people.  Even though dictators are only one person.  And couldn’t do these things alone.  So they get a little help (see Was a North Korean General Really Executed by Mortar Fire? by MICHAEL MADDEN posted 10/31/2012 on Foreign Policy).

Kim Jong Il had learned the importance of keeping his friends close and his generals closer. Until he assumed the role of supreme leader in 1997 (after a three-year morning period for his beloved father), almost all of his reported public appearances were field inspections of military units. This broadcast the military’s prominence as Kim Jong Il’s most valued political constituency. Under his “military first” policy, the military received priority in the allocation of increasingly scarce food and energy resources, as well as the rights to a number of lucrative foreign-currency generating economic activities. Having given his generals the butter churn, Kim Jong Il handed out the guns. Research and development into nuclear weapons continued, and the development and production of ballistic missiles thrived.

The number of military officials treated to the largesse of Kim Jong Il’s party economy steadily increased. They were permitted fine homes and vacation at exclusive retreats. On state holidays he gifted expensive automobiles, household appliances, and various luxury goods. As with Kim’s close aides in the party, military officials were allowed wide administrative latitude in how they managed the daily affairs of their respective agencies and units. This eventually incited fierce bureaucratic turf warfare among senior security officials. It suited Kim Jong Il’s interests as leader to have his generals squabbling among themselves instead of challenging him.

The key to being a dictator is taking care of the military.  You make sure they have the best food.  And the best stuff.  You make sure their lives are good lives.  In a country where most people quake with fear.  Fearing their government.  And famine.  This is life in North Korea.  Where it goes dark after the sun sets.  And looks like something out of medieval times.  While just across the border in South Korea life is good for all Koreans.  And there is no famine.  Where it is so good for some that Park Jae Sang (PSY) mocks their conspicuous displays of wealth in his Gangnam Style.  A world unknown to the people north of the border.  Unless you’re in the inner circle of power.  Or the military.

Of course you don’t have to live in a dictatorship connected to the inner circles of power to enjoy the very good life.  As governments grow in rich countries they have mountains of tax money to play with.  And those in the inner circles of power have a lot of privilege.  Who get generous portions of that vast tax revenue.  And live a far better life than most others could even imagine.  Even in the United States.  Where some of the richest communities with the highest real estate values are where?  Adjacent to our nation’s capital.  The suburbs of Washington DC.

In the US the ruling elite do not rely on the military to maintain their positions of power and privilege.  They rely on a loyal media.  The universities.  And public education.  Who help the people understand that they should vote for them.  And their very good lives.  Making it a lot easier for them to enjoy the very good life than someone like Kim Jong Un.  Who has to bribe the crap out of the military to prevent them from killing him.  And to put the fear of God into the people to prevent them from killing him.

www.PITHOCRATES.com

Fundamental Truth

In Warfare Starvation and Famine are the most Potent of Weapons

Starvation and famine has plagued mankind since the dawn of time.  It was the driving force in evolution.  Those who took control of their food supply lived.  Those who didn’t disappeared from the evolutionary path.  Like Neanderthal.  And those who came before him.  Our earliest civilizations massed their populations to farm.  And the masses lived in cities.  Setting down roots and saying goodbye to their hunting and gathering ways.  In the Wei River valley.  In the Indus River valley.  The valleys of the Euphrates and Tigris.  In the Nile River valley.  Where modern life took root.  Produced our first food surpluses.  And gave birth to urban life.  And the middle class.

The rise of the middle class allowed civilization to flourish.  For every person that didn’t have to produce food could do something else.  Build better tools.  Create a better government.  Create art.  In general, think about other things.  Those other things that made humans different.  By giving us a more interesting life.  And more sophisticated ways to express ourselves.

But this growth was a double-edged sword.  For large urban populations that made life more enjoyable was also a great threat to the food supply.  A cool and wet summer could destroy crops.  Poor food storage could spoil the food surplus.  A war could see an enemy purposely destroy your crops and your food surplus.  Causing famine.  Where half or your city population could easily die before the next harvest.  Or more.  Especially if the famine resulted from an act of war.   As an act of genocide.  To clear people off land that others want to use for their own food needs.  Which was Hitler’s plan in Russia.  To take the food from the Ukraine.  Kill the indigenous population.  And replace them with Nazis.  Thus creating more living space for the Third Reich.  Or Lebensraum.    Because in warfare starvation and famine are the most potent of weapons.

History has shown that the most Food-Abundant Countries are the most Capitalistic

England led the way in agricultural advances.  Increasing crop yields such that small tracts of land could support greater populations.  As well as produce such huge food surpluses that they had food to export.  As the British Empire spread across the globe so did their advanced agricultural ways.  During the 19th century starvation and famine were becoming rarer in the technologically advanced West.  The 19th century Irish Potato Famine reduced Ireland’s population by up to 25%.  A tragedy of epic proportions.  But it was an exception to the rule.  For food was growing so abundant in the advanced Western World that rarely did people go hungry.  Or feared famine.  And when mechanization and chemistry hit the farm our crop yields exploded.

During the Twentieth Century the Western World produced so much food that food prices plummeted.  Causing the Great Depression.  There was so much food available that farmers couldn’t sell their food at a high enough price to service the debt that they incurred mechanizing their farms.  But not everyone was producing bumper crops in the Twentieth Century.  Both the Soviet Union and the People’s Republic of China set records for death by famine.  As they shunned the ways of the West.  And the state took over their agricultural sectors.  States that were so inept at good farming practices and things economic that crop yields plummeted.  North Korea to this day can’t even grow enough food for her own people.  And has recurring famines.  Because they hold on to the communist ways of Stalin and Mao.  While the Russians and the Chinese have long abandoned them. 

History has shown that the most food-abundant countries are the most capitalistic.  Countries whose agricultural sectors use the latest in technology.  And/or have a rich and vibrant economy that can buy all the food they need if they can’t produce their own.  Like Hong Kong.  Basically a rock off the Chinese mainland.  It has little arable land.  Few natural resources.  But what it does have is low taxation and free trade.  And laissez-faire capitalism.  The Chinese lost Hong Kong to the British Empire (who have since given it back).  And the British used laissez-faire capitalism to make Hong Kong the gem it is today.  Where people are free and in want of little.  And in this island nation that can’t grow enough food to feed their population famine is unheard of.  Why?  Because they have the wealth to trade for all the food they desire.  In fact, while Mao gave the people in the People’s Republic of China famine Hong Kong were doing just fine.  Because they were wealthy and could trade for what they needed.  And they had the Royal Navy protecting her.

In America our Food Supplies are so Abundant and so Cheap that Poor People are becoming Obese

Poverty is the biggest killer.  Famine is prevalent in poor countries.  Like Haiti.  North Korea.  And sub-Saharan Africa.  People suffer in these countries unlike they do in the West.  Despite the amount of aid the West pours into them.  And it’s not because Western nations were blessed with natural resources.  Hong Kong doesn’t have anything other than laissez-faire capitalism.  Protected by the Rule of Law and minimal government interference into the private sector economy.  The very things that are missing from Haiti, North Korea and sub-Saharan Africa.  Where corruption rules supreme.  There is little regard for human rights.  Or property rights.  And no one can protect their people from the abuses of government.  Or from warring neighbors.  Like the Royal Navy protected Hong Kong.  And pretty much the rest of the world during the 19th century.  Just like America’s military might made the world safe for capitalism in the Twentieth Century.

Third world nations are not a victim of first world nations.  They are a victim of themselves.  Where corrupt rulers collect Western aid and live well while their people suffer.  Especially the nations that eschew capitalism.  And embrace socialism.  Like the Soviet Union did.  Like the People’s Republic of China did (the current Chinese regime is enjoying economic growth by allowing some capitalism into their still communist country).  And like North Korea still does.  These socialist utopias were a living hell for their people.  Where they live in fear of their government.  And of famine.

Meanwhile in the Western capitalist nations what do they suffer from?  Especially the poor people in America?  Obesity.  In New York they’re passing laws restricting the size of sugary beverages because they are dangerous to your health.  While they pass out free condoms and birth control as sex is far less risky behavior than a delicious carbonated beverage.  Apparently.  Yes, in America our food supplies are so abundant and so cheap that poor people are becoming obese.  Because capitalism has made those food supplies abundant and cheap.  And capitalism gave people jobs where they could afford to buy so much food that they can give themselves an obesity problem.  A problem they just don’t have in Haiti, North Korea or sub-Saharan Africa.  Because they can’t grow enough food.  Or earn enough money to buy enough food.  For they don’t have an environment conducive to creating jobs.  Which is why these nations are still impoverished and/or suffering famine despite all the aid the West gives them.  Food aid will run out.  And then they’ll just be starving once again.  If they have jobs, though, they’ll be able to buy food whenever they’re hungry.  Because it’s like that old saying.  Give a man a fish and he can eat for a day; give him a job and he can have an obesity problem.

www.PITHOCRATES.com

History 101

Capitalism allows Entrepreneurs to bring their Great Ideas to Life

Entrepreneurs start with an idea.  Of how to do something better.  Or to create something we must have that we don’t yet know about.  They think.  They create.  They have boundless creative energies.  And the economic system that best taps that energy is capitalism.  The efficient use of capital.  Using capital to make profits.  And then using those profits to make capital.  So these ideas of genius that flicker in someone’s head can take root.  And grow.  Creating jobs.  And taxable economic activity.  Creating wealth for investors and workers.  Improving the general economy.  Pulling us out of recessions.  Improving our standard of living.  And making the world a better place.  Because of an idea.  That capitalism brought to life.

Entrepreneurs Risked Capital to bring Great Things to Market and to Create Jobs

Henry Ford established the Detroit Automobile Company in 1899.  Which failed.  He reorganized it into the Henry Ford Company in 1901.  Ford had a fight with his financial backers.  And quit.  Taking the Ford name with him.  And $900.  The Henry Ford Company was renamed Cadillac and went on to great success.  Ford tried again and partnered with Alexander Malcomson.  After running short of funds they reorganized and incorporated Ford Motor Company in 1903 with 12 investors.  The company was successful.  Some internal friction and an unexpected death of the president put Ford in charge.  Ford Motor built the Model A, the Model K and the Model S.  Then came the Model T.  And the moving assembly line.  Mass production greatly increased the number of cars he could build.  But it was monotonous work for the assembly line worker.  Turnover was high.  So to keep good workers he doubled pay in 1914 and reduced the 9-hour shift to 8 hours.  This increased productivity and lowered the cost per Model T.  Allowing those who built the cars to buy what they built.  In 2011 the Ford Motor Company employed approximately 164,000 people worldwide.

Bill Hewlett and Dave Packard established Hewlett-Packard (HP) in 1939.  In a garage.  They raised $538 in start-up capital.  In that garage they created their first successful commercial product.  A precision audio oscillator.  Used in electronic testing.  It was better and cheaper than the competition.  Walt Disney Productions bought this oscillator to certify Fantasound surround sound systems in theaters playing the Disney movie Fantasia.  From this garage HP grew and gave us calculators, desktop and laptop computers, inkjet and laser printers, all-in-one multifunction printer/scanner/faxes, digital cameras, etc.  In 2010 HP employed approximately 324,600 employees worldwide.  (Steve Wozniak was working for HP when he designed the Apple I.  Which he helped fund by selling his HP calculator.  Wozniak offered his design to HP.  They passed.)

Steve Jobs had an idea to sell a computer.  He convinced his friend since high school, Steve Wozniak, to join him.  They sold some of their things to raise some capital.  Jobs sold his Volkswagen van.  Wozniak sold his HP scientific calculator.  They raised about $1,300.  And formed Apple.  They created the Apple I home computer in 1976 in Steve Jobs’ garage.  From these humble beginnings Apple gave us the iPad, iPhone, iPod, iMac, MacBook, Mac Pro and iTunes.  In 2011 Apple had approximately 60,400 full time employees.

Jerry Baldwin, Zev Siegl, and Gordon Bowker opened the first Starbucks in 1971 in Seattle, Washington.  About 10 years later Howard Schultz drank his first cup of Starbucks coffee.  And he liked it.  Within a year he joined Starbucks.  Within another year while traveling in Italy he experienced the Italian coffeehouse.  He loved it.  And had an idea.  Bring the Italian coffeehouse to America.  A place to meet people in the community and converse.  Sort of like a bar.  Only where the people stayed sober.  Soon millions of people were enjoying these tasty and expensive coffee beverages at Starbucks throughout the world.  In 2011 Starbucks employed approximately 149,000 people.

Ray Kroc sold Prince Castle Multi-Mixer milk shakes mixers to a couple of brothers who owned a restaurant.  Who made hamburgers fast.  Richard and Maurice McDonald had implemented the Speedee Service System.  It was the dawn of fast food.  Kroc was impressed.  Facing tough competition in the mixer business he opened a McDonald’s franchise in 1955.  Bringing the grand total of McDonald’s restaurants to 9.  He would go on to buy out the McDonald brothers (some would say unscrupulously).  Today there are over 30,000 stores worldwide.  In 2010 McDonald’s employed approximately 400,000 people.

Richard Branson started a magazine at 16.  He then sold records out of a church crypt at discount prices.  The beginning of Virgin Records.  In 1971 he opened a record store.  He launched a record label in 1972.  And a recording studio.  Signing the Sex Pistols.  And Culture Club.  In 1984 he formed an airline.  Virgin Atlantic Airways.  In 1999 he went into the cellular phone business.  Virgin Mobile.  In 2004 he founded Virgin Galactic.  To enter the space tourism business.  His Virgin Group now totals some 400 companies.  And employs about 50,000 people.

The Decline of Capitalism and the Rise of the Welfare State caused the European Sovereign Debt Crisis

And we could go on.  For every big corporation out there will have a similar beginning.  Corporations that use capital efficiently.  Bringing great things to market.  Introducing us to new things.  Always making our lives better.  And more comfortable.  One thing you will not find is a great success story like this starting in the Soviet Union.  The People’s Republic of China (back in the days of Mao Zedong).  East Germany (before the Berlin Wall fell).  North Korea.  Or Cuba.  No.  The command economies of communist countries basically froze in time.  Where there was no innovation.  No ideas brought to life.  Because the government kind of frowned on that sort of thing.

There is a reason why the West won the Cold War.  And why we won that war without the Warsaw Pack and NATO forces fighting World War III.  And why was this?  Because we didn’t need to.  For the communist world simply could not withstand the forces of living well in the West.  Whenever they could their people escaped to the West.  To escape their nasty, short and brutish lives.  In the command economies of their communist states.  Where the state planners failed to provide for their people.  Even failing to feed their people.  The Soviet Union, the People’s Republic of China and North Korea all suffered population reducing famines.  But not in the West.  Where we are not only well fed.  But our poor suffer from obesity.  Which is not a good thing.  But it sure beats dying in a famine.

Sadly, though, the West is moving towards the state planning of their one time communist foes.  Social democracies are pushing nations in the European Union to bankruptcy.  Japan’s generous welfare state is about to implode as an aging population begins to retire.  Even in the United States there has been a growth of government into the private sector economy like never before.  Which is causing the Great Recession to linger on.  As it caused Japan’s lost decade to become two decades.  And counting.  As it is prolonging the European sovereign debt crisis.  With no end in sight.  The cause of all their problems?  The decline of capitalism.  And the rise of the welfare state.  Which just kills the entrepreneurial spirit.  And the creation of jobs.  Which is one cure for all that ails these countries.  And the only one.  For only robust economic activity can pull a country out of recession.  And for that you need new jobs.  And the entrepreneurial spirit.  In short, you need capitalism.

www.PITHOCRATES.com

Fundamental Truth

Voters are so Greedy and Selfish with their Hard-Earned Money that they’re not going to Vote to be Subjugated

History is strewn with people oppressing others to gain privilege for themselves.  Kings, emperors and nobles were always a small minority of civilizations.  But they had the power.  And the wealth.  While the masses suffered abject poverty and went hungry.  Or suffered through famines.    And died.  With early civilizations this was just the way of life.  Because there was no middle class.  No free market capitalism.  And no rule of law.  Life was for the most part subsistence farming.  Where most ate only what they grew.  While the kings, emperors and nobles enjoyed lots of food and drink.  Even enjoyed having a little fun.  Unlike the impoverished masses.  Having privilege made life better.  Which is why the privileged worked hard to keep it.  By forcing others to work hard to provide that better life for them.

But times change.  Privileged ruling classes fall.  And middle classes rise.  Creating vibrant economies.  And representative government.  Then one day the privileged find that they are no longer privileged.  That wealth isn’t automatically theirs.  Instead it belongs to the people who earn that wealth.  And if the once-privileged want wealth then they, too, have to work to get it.  So they, too, can have nice things.  And that they can only have these things if they earned enough to afford them.  Which is a great problem if you don’t want to work.  Don’t have any ability to earn a high income.  Or if you have a feeling of entitlement.  Like in days of yore.  Where you didn’t need anything but a good last name to live the good life.  On the backs of those who didn’t live the good life.

Feelings of entitlement don’t die, though.  They don’t go away once the middle class starts sharing the wealth.  Well, not so much sharing it but earning it.  And keeping it.  Instead of giving it to a privileged ruling class.  Which poses a problem for those who aspire to join a ruling class.  Especially now that we have those pesky elections.  Because voters are so greedy and selfish with their hard-earned money that they’re not going to vote to be subjugated.  They’re not going to vote in a privileged ruling class so they can live like royalty.  While those who pay for that royal lifestyle don’t.  ‘Vote for me so I can live better than you’ is just not a winning political platform.  So that’s why politicians lie.

The Privileged Elite uses Class Warfare to take other People’s Wealth

What do you need to live a privileged life?  Lots of money.  No secret here.  But the secret is how to get that money.  In particular, how do those who don’t want to work or have no talent or have no ability create wealth?  Here’s the secret.  They don’t create wealth.  They take wealth.  By going into government.

Only government has the power to tax.  Which can be a great source of wealth.  Other people’s wealth.  Which is any privileged class’ second favorite kind of wealth.  Second only to the wealth they already took from others.  Because that’s what they want.  Other people’s wealth.  And they’ve found a clever way of taking it.  By making the world a fairer place.  And who’s against fairness?  They’re going to make sure that the poor and children have access to food and affordable housing.  And who’s against the poor?  The children?  You’d have to be a pretty vicious, heartless bastard to be against the children.  And the poor.  They’re going to make sure that women have access to reproductive health care.  For who hates women?  I’ll tell you who.  Anyone that opposes raising taxes.  They hate women.  Children.  The poor.  For the world is full of haters.  And just who are these haters?  Aanyone that earns a lot of money and doesn’t want to pay higher taxes.  These people hate anyone not as wealthy as they are.  Because they hate fairness.  And paying their fair share.  Because they’re greedy.  And hate women and children.  And puppies, too.

This is the way the privileged take other people’s wealth.  Class warfare.  And it’s very effective.  By being the party of the poor, disadvantaged, children, women and puppies, they’re kind and benevolent.  With other people’s money, of course.  But those people are evil so it’s okay.  People hate them.  But they like their kind government benefactors.  Who are looking out for their best interests.  Not rich people.  Or corporate profits.  No, our kind government benefactors make sure those greedy rich people and corporations pay their fair share.  Because that’s all that they want.  It’s all anyone wants.  To be fair.

North Korea is pretty much at the End of the Fairness Road

Later incarnations of the privileged ruling class used the fairness approach to give themselves a better life.  While oppressing their people.  Even killing them.  Through famine.  Or deliberate acts of violence.  All in the name of fairness.  And nothing better epitomizes this than communism.  Where everyone was equal.  Brothers.  Comrades.  There were no profits.  No capitalism.  No competitiveness.  No.  Everyone was equal.  They paid everyone the same.  They dressed everyone the same.  They housed everyone the same.  They fed everyone the same.  Very little.  For one thing you never saw in a communist country was obesity.  Instead you probably heard the rumbling of tummies as most people were hungry all of the time.  There was no income inequality.  No gender inequality.  No.  In communism they had nothing but equality.  Life was fair.  Because no one had anything more than anyone else.  As they perfectly distributed the misery and poverty equally among the impoverished masses.

That was for the masses.  It was quite a different thing for the privileged ruling elite.  Those in the party apparatchik.  And the inner party members themselves.  Who were more equal than others.  These people dressed better.  They had better housing.  Even cars.  They ate better.  Some so well that they grew obese.  North Korea suffers from recurring famines to this day but Kim Jong IL had a bit of a weight problem.  As his son does.  Kim Jong-un.  No, life is very good for the privileged ruling elite.  And hell for those living under them.  Who the ruling elite let die of hunger.  And send to concentration camps if they dare speak of their displeasure.  For only under communism is life fair.  And they just can’t risk the unhappy masses to spoil it for the privileged few.

North Korea is pretty much at the end of the fairness road.  The country is so poor and impoverished and hungry that people will risk their lives to try and escape this land of fairness.  To get somewhere that isn’t so fair.  Like South Korea.  Where they have capitalism.  And inequality.  Where someone can come with nothing, work hard and earn a better life.  Allowing them to pay for housing.  And put food in their rumbling bellies.  For a fair and oppressive government surely cannot.  All they can do is create great inequality between the people and the ruling class.  Far greater than that between the rich and poor in any capitalist country.  For the poor in countries like the UK, Canada and the United States are living far better than anyone outside the ruling elite in North Korea.  This is where the fairness road ends.  But it starts with class warfare.  Where a privileged few live the good life through high taxes.  Taxes they use to force fairness on others.  While those at the top manage that fairness.  Skimming a lot off the top of those taxes for themselves.  And what’s left they spend on the poor, disadvantaged, children, women and puppies.  Just enough to make sure the people love their very rich and wealthy government benefactors.  So they can win the next election.  At least while they still have to deal with those pesky elections.

www.PITHOCRATES.com

Week in Review

And our little dance with North Korea continues.  We offer them food aid.  And then they test launch a nuclear ballistic missile.  Usually they wait to get their food before they start the next dance.  But they didn’t this time.  Probably to show that their new leader, the twenty something Kim Jong-un, has a pair.  To show his people he’s not afraid of the big bad wolf.  Which would be the United States in this metaphor.  To show how tough he is.  And how willing he is to let his people starve to death.  Yeah, he’s that tough.  The message to his people being “now do something to deserve some punishment and see what a cruel bastard I can be” (see Rocket failure cost at least US$1 billion by AP posted 4/15/2012 on The Taipei Times).

North Korea’s much-touted satellite launch ended in a nearly US$1 billion failure, bringing humiliation to the country’s new young leader and condemnation from a host of nations. The UN Security Council deplored the launch, but stopped short of imposing new penalties in response.

The rocket’s disintegration on Friday over the Yellow Sea brought a rare public acknowledgment of failure from Pyongyang, which had hailed the launch as a show of strength amid North Korea’s persistent economic hardship…

The launch brought swift international condemnation, including the suspension of US food aid, and raised concerns that the North’s next move could be even more provocative — a nuclear test, the country’s third.

North Korea can’t afford to feed their own people but they can spend $1 billion to put a satellite into orbit that none of their people can benefit from.  If you look at a nighttime picture of North Korea you’ll see the country is mostly dark.  They don’t have the money or the infrastructure to use electricity to light up their cities at night let alone receive anything electronic from that satellite.  But to save face they may now do something nuclear.  Again, something they can afford.  Unlike feeding the good people of their country.

North Korea is proud of their ‘military first’ policy.  For that is what’s important to their leaders.  After all, why feed your people when they may just starve to death anyway in another month or two?  Yet the American Left is far more vocal in their condemnation of the U.S. military than anything the North Koreans do.  Say all you want about the centuries old argument between guns and butter but one thing you can’t say is that the North Korean poor have an obesity problem.  Like they do in the United States.

The international community needs a plan on how to reintegrate the two Koreas without overwhelming the South Koreans or the Chinese.  Their nearest neighbors who undoubtedly will carry the heaviest cost in any reunification.  Perhaps line up some corporations to invest heavily in North Korea.  To find some resources they can extract.  To do a little job creation in North Korea.  And generate some wealth they can use to slowly build their infrastructure.  And grow the food to feed their people.  If we could communicate a viable plan to the oppressed North Koreans we could end this nonsense.  And help these people find a way to a better life.  And ultimately, hopefully, to reunification.  Or at the least an open and free border between the Koreas.  To bring together separated families.  While they’re still alive to be reunited.

www.PITHOCRATES.com