ECONOMICS – Ramparts of Civilization

January 31, 2016

The Brokenness of Government

Venezuelans wait in line for food at a supermarket businessinsider.com — Venezuelans wait in line for food at a supermarket *businessinsider.com*

The world is looking like a progressively scary place, and it’s not from the usual bad guy good guy conflict. Its what passes for a government nowadays. Governance as defined by the dictionaries suggests a governmental body is to establish policies, monitor their implementation, and assume accountability,in order to provide for the prosperity and enhancement of the governed. Increasingly, real governance is the last thing these governments have in mind. The swelling size, scope, and grasp for power is their calling, and the people who have to put up with them are increasingly angry, and increasingly desperate. Media takes passively takes pictures and reports the presence of the increasing chaos and occasional violence, but is blind to accept the cause as a failure of the governing class for what it would mean for the perceived notion of an ideal society. The longer the disconnect remains in perception, the larger the risk of a real calamity developing.

The bloated government: World history has not seen an economy the size of the United States of America. For a country with an annual greater than 17 trillion dollar marketplace of prosperity, the government has progressively grown to install its brand of ‘fairness’ on the interactions through regulations. The original design of a limited government with checks and balances has been thrown out with an exploding executive branch, that thinks every decision an individual makes should be weighted on equality of outcome, and a legislative branch that has abandoned its role in assuring budgetary restraint and oversight guidance. The anger of the population is palpable this election season. A healthcare program built on monstrous legislation and ever more monstrous regulation fails on every conceivable level, but no one will do anything because it is a centerpiece of a president’s legacy. The nation’s debt balloons out of all conceivable proportion, having doubled in just 8 years weighed against the previous 230 with over 100 trillion in unfunded mandates, more worth than exists in the world, and nobody will do anything because they risk their re-election. Laws are that define governmental integrity, paying of taxes, respect for individual privacy, and care with the nation’s secrets are blatantly ignored by the governing class, and no clean up of the corrupting and corroding influence is undertaken, as the governing class protect their own. Bloated beyond all credible size, the government exists to exist, to redistribute, and to grow some more.

The Utopian government: Governments more firmly are designed to construct societies as utopians wish they would be, rather than how societies best function. The current free-fall in Venezuela is the Primus Inter Pares. Despite the explosion of national wealth and massive industry expansion brought by the discovery of Venezuela’s enormous oil reserves, the inequities created between the poor and the flourishing middle class and nouveau riche led to the election of a uber-socialist government of Hugo Chavez, patterned after the equally utopian autocracy of Cuba. The nationalizing of the oil industry allowed the government coffers to fill directly, providing patronage money for electoral success through 2 cent a gallon gasoline, and essentially free goods, transportation, and housing for the poor. The inevitable collapse of infrastructure in the oil industry, collapse of oil prices, and explosion of the black market has led to only more delusional moves by the Chavez successor Maduro, and the doubling down of every economic malfeasance. The printing of money with rampant inflation destroying currency value has led to the monetary black market, price controls destroying any available goods, and increasing enforcement of these unworkable decisions by government backed thugs, a pattern seen over and over in countries like Zimbabwe and North Korea, but it has not distracted the Venezuelan autocrats one bit. Suffering is the daily bread of utopian paradise.

The Nanny State Government: When the European Union implemented fully the Schengen Area in 1999, it was to tell the 400 million Europeans under the union they knew the world better than any of their inhabitants. Designed to eliminate borders by eliminating passports, it put all trade and immigration under the province of a supra-national government in Brussels who wants to eliminate 2600 years of cultural diversity and create a european superstate. The single currency followed close behind with the adoption of the Euro, and the vision of vast continent of a like minded social compact gave the governors in Brussels ecstatic chills. Give Greece the Euro, and a Greek will become efficient and frugal, undifferentiated from the Germanic. Open the borders, and the immigrants will flow and provide low cost labor for the overseers, liberalize themselves, and become the Europeans of the tomorrow, joyous in the vision of a protected life, and immune to genetic callings of their tribe. The whole Potemkin Village is crashing down with the onslaught of a million undocumented immigrants from the Middle East and Africa with little to separate them but their desire to be brought under the nanny state economic safety net, and their complete distain for any contact with the European social libertine streak. The various governments have determined to ignore the severe cultural clashes that express themselves violently in assault, rape, and even murder and pretend this has nothing to do with the greater assimilation. The inevitable result is the rise of hard right movement predicated upon protecting their homes, family, and culture, but using the tools that echo the vigilante actions of times past with their inherent dangers.

The Adversarial Government: Governments reacting to any political activity to limit growing efforts to limit their scope or power are increasingly hostile and frankly dangerous. Individuals who looked to develop opposing political views in the United States to the prevailing government found their phones tapped, the tax returns audited, and their businesses hounded by governmental agencies. In Russia the would be czar has used a more effective tool of at least indirectly supporting the murder of political opponents through means as diverse and criminal as street assassination and radioactive poison. In China, the preferred means, is societal erasure, with massive prison sentences. In the nascent state of ISIL, the medieval means of drowned, burning alive and beheading are used with the joy of totalitarian zeal. These governments are no longer responsive to public pressures for they have assured themselves that they are too big to fail, too powerful to resist. In the world where government is your boss and not your servant ,the temptation to use available levers of power and hide behind the bureaucracy is great. On such assumption, revolutions are borne.

The Demagogue Government: The governments are progressively fronted by Demagogue Leaders. Appealing to the raw emotions of inequity and promoting the assurance of equality of outcome, the politics of leaders is to demand the increasing accumulation of powers in the hands of a single individual who will protect the people against the weakness of deliberative processes or the blind justice based on laws not emotions. From Obama to Trump, the promise is you can have what you want, you need only a leader who is willing to take any means necessary to achieve the end result. The checks and balances placed to prevent just such demagoguery is to be subverted and overwhelmed. In a society where the hard work of democracy seems passe’ and the idea of principles of governance antiquated to the speed of our current discourse, a strong handed leader seems the easy out.

We are entering into dangerous times with our eyes half closed. As a member of the diminishing group of people willing to discourse and legislate to a proper end, we need to be forceful in our defense of the constitutional concept. Listen before you speak. Read a book, and then another opposed. Think about our past, and reason about our future. Demand competence. Demand oversight of your government. Protect freedom of expression above all. Respect your traditions, and teach their value. Secure your future opportunity and guard it against all poseurs who would usurp it. And …make sure those who govern, that they do so only with the expressed assent of the governed and that they are under the same laws that govern all free society – none different, none selective. Hopefully, real push back, and the self correcting forces of an alert and engaged society will protect the world against the dark intent of predators and scoundrels.

Message: Go vote your principles, and if necessary, throw the bums out. Tomorrow is February 1st, and the future world we will live in is in our electoral hands, starting in Iowa. The world is watching carefully to see if there’s still a chance, that in the land that once was the beacon for hope for those under the yoke, good will still prevail.

December 28, 2014

Who Knew? – The American Oil Revolution

In all the stories assumed to be the Christmas miracle story of 2014, the story no one predicted was the resurrection of the American economy on the muscular shoulders of the American oil industry. On the gas pump above frozen in time like a faded photograph are the gasoline prices when America was the number one producer of oil for the world, before the OPEC oil embargo, the piling on of taxes on the energy sector, the mythic concept of Peak Oil and the fading of carbon as an available source of fuel and energy, and the concern about global warming converted to “climate change” (with the unexpected lack of global warming) and the rising CO2 emissions. A colossus of current events, however, are driving down energy prices to the point where, inflation adjusted, we may see prices comparable to the ancient levels, with the resultant spectacular boost it will provide the economy through inexpensive available energy and to the individual in freedom of transport.

In the millionth example as to how progress in society is best achieved through the power of individual initiative and creativity and not plodding government bureaucracies, the American Oil Revolution is a prime case study. Left to the nanny state mentalities of the modern government agencies, no revolution would have come about. Since 1990, on the basis of the dogma of carbon energy as the enemy, western governments have progressively looked to stamp out oil and coal initiatives because of the propped up science “connecting” global warming as an anthropomorphic phenomena and rising CO2 emissions as the world became progressively developed. The Kyoto accord looked to remove carbon as the fuel for economic expansion in the first world economies, allowing the developing world to “catch up” and to create a veneer of ‘sin’ associated with man’s progress as individuals. This argument was buttressed by the concept of Peak Oil – the world’s supply of oil was finite, and as we had found all there was to find, the inevitably scarcer oil resource had to be adjusted for by “good” technologies yet to be invented and aggressively put in place of oil. As expected, technologies artificially propped up by governments before their technical time, like wind and solar, created associated boondoggles, enormous waste of investment, lots of dead birds, and essentially no bump in net energy (energy creation/energy expended = net energy). As oil was yesterday’s fuel, the American government willfully restricted access to known oil resources on public lands, to assure the narrative and reorder societal behavior.

Leave it to those Texans to save us once again from ourselves. On private lands, experimentation on so-called inaccessible oil locked in rocks began in the 1990s and took off in the first decade of the 21st century in the form of fracking – the process of pressure injecting sand and water to create channels of oil flow in oil tied up in eons of rock. As the government struggled to contain the action on private lands, the progressive success of the process spread to areas of the country long considered dead to energy production – North Dakota and Pennsylvania with the stunning result that not only could the oil be captured safely and economically but in quantities that soon put the Peak Oil argument to shame. Hundreds of millions of years of organic detris preferentially distributed in the continental expanse of North America at levels only conjectured about became accessible, and the miracle was on.

And so the miracle of the United States surpassing once again Saudi Arabia as the number one producer of crude oil in the world. The effects of such a stunning turnaround are yet to be fully evolved. The initial downstream effect has been a glut of oil and natural gas that has created a dramatic downward pressure in oil prices. WTI Crude Oil per barrel was $54.73 per barrel on December 27, 2014. On September 6th, 2013 it was 108.12. This 50% reduction in the price of crude oil has been resulted in the fracturing of the continuity of OPEC, the brazen effort by Saudi Arabia to maintain production highs to try to “starve” the American oil producers who require a higher oil extraction price, and the secondary effect on the dictators in Venezuela, Russia, and Iran that have funded their extremism and revanchist expansionist policies on a steady high oil price. The benefit to the energy consumer, the individual in prices at the gas pump and the producer of goods and services in the reduction in energy outlay, is profound. The benefit in removing oil as a weapon used against western society is equally profound.

And yet, the lingering issue of carbon emissions and the resultant CO2 effects on potentially precipitating climate change. What good could possibly come from the entrepreneurial efforts of independent thinking Texas oil men when the world’s climate is at stake? The answer? — never doubt the creative intellect of the individual free to solve problems without an overbearing tiller of an oppressive bureaucratic regime. The next coming miracle may be EOR-Enhanced Oil Recovery. It turns out those Texans have not only resorted to fracking, but for decades have been thinking about the so-called exhausted wells they already own. The traditional drilling process extracts only about 30-40% of an oil field’s available oil before it is “exhausted” by the lack of pressure to retrieve the residual 60% of the oil left behind. It has always been cheaper to simply find another oil field to drill. The estimated 100 billion barrels of oil remaining in US wells after exhaustion of the well has been waiting for technology to deliver a solution. As fracking was to shale rock, EOR is to exhausted wells. The process of extracting the retained oil may be best solved by the utilization of — wait for it – CO2. That’s right, the “evil” gas CO2 created by man’s energy demands particularly by coal burning plants may be the savior of attaining oil from exhausted wells. CO2, in a liquified state, injected under pressure proves to be a unique solvent freeing retained oil for well to once again produce.

Samuel Thernstrom in the Weekly Standard describes in a must read article a process where the billions of tons CO2 emissions created by coal burning plants could be captured and sold to the oil industry for EOR extraction, thus increasing available oil and reducing CO2 emissions into the atmosphere by injecting them back into the ground where they came from in a perfect dance of environmental and energy policy.

All proves possible again when you rely on the instincts and genius of the individual seeking to advance the world he or she lives in.

I don’t know if the amazing revolution in energy back to attainable carbon will be the final answer to continuing the process of achieving a more civilized and kinder world to more and more of the world’s population. I do know however, time and time again, the answer will be found in the fertile mind of an individual who, released from the oppressive weight of a government that thinks it knows the future, will bring the future to us all.

January 26, 2014

Why Don’t We Care About Facts Anymore?

“Everyone is entitled to his own opinion, but not his own facts.”

Daniel Patrick Moynihan

The latest Harris polls have come out this past week regarding the state of the country’s confidence regarding the nation’s management and future and they are grim. Powerline reviews these polls in anticipation to the President’s State of the Union address and finds that Americans by an almost continuous ratio of three out of every four citizens feel the direction as to managing the large challenges of this country, whether the environment, economy, education, health care, jobs, or foreign policy, is poor. The conclusion is that this is one of the most comprehensively pessimistic index of American confidence ever. What contributes to such pessimism and drives the most self correcting government mechanism ever developed to drive a Lamborghini of countries off the cliff?

I think it is as John Adams once said – “Facts are stubborn things.”

The country has spent the past fifty years of its history increasingly turning philosophically to the measuring stick of Values rather than Facts to guide its direction. Values and what they say about us are infinitely more comforting then dealing with the harsh realities of facts. Values declare an ideal world as it should be and define a truth that does not require a carefully constructed argument based on facts. It is an unpleasant sensation to recognize that people should respond and how they react in reality to facts are dissonant. The very liberal but factually enlightened Daniel Patrick Moynihan discovered this almost fifty years ago when he made the mistake of critically assessing the social effect of government’s war on poverty on a specific group, the nation’s African American poor. As a disciple of Lyndon Johnson, Moynihan was determined to find the government’s aggressive effort to wrench the nation’s poor out of poverty successful, but found instead dangerously opposite trends in the reaction of the population to the “help”. The positive values in the civil rights movement overlaid with the timing of the war on poverty were assumed to create an environment of opportunity and safety net that would improve the situation for the average urban poor – but Moynihan was finding disturbingly opposite trends. The crux of the issue seemed to be the fact that illegitimacy and single parent families were exploding in what had been a population that had lagged but at least paralleled the rest of the nation’s population in terms of economic progress and family stability.

This wasn’t a liberal versus conservative argument. Certainly Moynihan as a staunch liberal wasn’t rejecting the concept of the nation providing a strong hand in helping its nation’s poor or overturning hard won civil rights. He was instead pointing to facts and the need to understand them in guiding policy. What he and other factualists were not prepared for was the spectacular blow back from value biased proponents that vilified the report, not for its logic, but for its argumentative ‘illegitimacy’. In the values world, the facts suggested an effort to “blame the victim”, and imply a racially tinged “promiscuity” to the urban poor that was opposite of Moynihan’s argument. Although many bright individuals saw similar trends to Moynihan’s observations, the corrective actions that might have helped generations of poor were stamped out by the a progressively entrenched group of powerbrokers that felt they ‘owned’ the values argument, and that being non-judgmental regardless of outcome was the appropriate judgment.

What neither Moynihan or much of the nation recognized at the time was this values movement, philosophically being non-judgmental about fact and result meant being progressive and politically correct, would overwhelm all the naturally corrective capacities of adjusting to facts.

Fifty years later, and trillions of dollars of right minded non-judgmental expenditure has left us with gaping holes in urban poor education, family stability, economic capacity, and confidence in the future. No set of facts are up to withstanding the blizzard of invectives regarding victimhood, accepting any socially dissonant behavior, or continuing to explode the budgets of failing programs designed to “help”.

This willful ignorance and war against facts and their basis to constructively correct actions is the foundational cause of this nation’s pessimism.

The values movement has metastasized in many elements of policy discourse, particularly the economic ones, as significant money is to be made from arguing victimhood. The enormous redirection of funds to “modify behavior” in order to “save the world from global warming” continues despite the overwhelming evidence that the so called “settled science” of anthropomorphically induced global warming has collapsed. The pouring of trillions into “stimulus” projects when economic fundamentals suggest the opposite effect to economic growth incentives is created. The crash of health care stability against the desire to make it more fair or equitable, rather than better. The value of democratizing populations that hunger for stability rather than unencumbered elections before any other societal stabilizers are in place. The throwing away of thousands of years of educational concepts on formative development for the desire for each individual to be allowed to ‘ seek their own place’ in what they are educated on, with its resultant disastrous effect on cultural literacy.

And on and on and on.

Facts are stubborn things. Human behavior follows fairly recognized paths that our social engineering efforts often helplessly thrash against. The country is growing increasingly pessimistic because it can’t discern a way out of this mess; it can’t see that good intentions unencumbered by factual adjustment lead only to further deterioration. We are trying to be good by trying to do good, with the opposite effect resulting and contributing to our fatigue. The cure would be in accepting facts to lead to improving the conditions that would lead to progress against society’s ills, rather than projecting value judgements that perpetuate their very existence. The cure would be in listening to voices that discern the balance between values and facts necessary to begin to build some confidence back into the system, and trust the correcting capacities of the system as it was designed, not as we wish to manipulate it. As Senator Moynihan presciently stated so many years ago, no one owns the facts.

December 1, 2013

The Savior of Private Enterprise(?)- Space

Space X Dragon capsule supplies ISS - space.com — Space X Dragon capsule supplies ISS – space.com

President Obama has maintained a consistent vision of converting America into a socialist utopia. Though he objects to the moniker ‘socialist’ , he has delivered an unceasing attack on the pillars of private enterprise through tax policies and regulation that create no doubt as to his ideological bent on the forces that brought America to economic greatness. The country’s priorities have been reset from economic vitality and defense supremacy to social investment, wealth redistribution, and marked retraction in defense expenditure. He has done what he could to suppress private sector financial creativity, energy exploration, small business enterprise, and most spectacularly, health care, in an effort to assure the ultimate direction, and with it power of determination, comes from the government.

In one industry, however, President Obama deserves credit as an economic visionary. Either through personal lack of interest in the subject, or the desire to remove the resources of the government from huge expenditures for which he could discern no social value, President Obama in 2009 declared a revolutionary privatized strategy regarding space exploration and development. Since 1961, the vision of the national government was for steady progress in manned space exploration, with the moon landing achieved by 1969, reusable space shuttle by 1981, and a permanent space station by 2000. The assumption was that the manned missions would progressively point outward toward the planets, with returns to the moon and ultimately Mars and the other planets envisioned. Given the spectacular costs and engineering support required for such goals, it was assumed that only a national consensus project could achieve the economic wherewithal for such undertakings.

President Obama declared, however, with the coming retirement of the space shuttle, that the national government would divorce itself from direct manned orbital flight, and would rely instead on private corporations to achieve the capacities to secure safe low earth orbit flight, satellite launch, and space station re-supply. The problem was, of course, no such capacity in the private sector existed, and the result of the policy was a howl protest from well informed traditional supporters of NASA, such as former astronauts Neil Armstrong and Jim Lovell.

Four short years later, we should give the avowed socialist President Obama a private enterprise medal. A remarkable amount of progress has been made in the private sector, led by the particular entrepreneurial genius of Elon Musk (see Ramparts People We Should Know #21 ) and Space X. Space X has already achieved successful cargo delivery reproducibly to the space station, and the commercial exploitation of manned flight for both tourist and orbital ventures are progressing nicely. New companies such as Orbital Sciences Corp., Bigelow Aerospace, Blue Origin, Virgin Galactic and Sierra Nevada, as well as established aerospace companies such as Boeing and Lockheed Martin are preceeding to goals of successful manned space flight, and not just to low earth orbit. The directions each are taking are diverse, aggressive, and ultimately unbound by the typical stultifying bureaucracy of governmental creation usually dominated by congressional bias. The Washington Post has an exceptional overview of old versus new space development that is worth exploring fully to grasp this exciting development, as we live through so many other disappointments of the current economy.

The President deserves credit for stumbling upon a prime example of how trusting the arena of ideas and the process of private market competition can lead to dramatic improvements in human development and life quality. And if he’s not careful, might just make America an economic leader in the current century as great as the last. Were he only to have such stumbles in the other areas of our moribund economy. In reflecting upon the overarching principles of human behavior versus utopian ideal, we once again turn to Winston Churchill for some prescient words:

“Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk. Not enough people see it as a healthy horse, pulling a sturdy wagon.”

December 30, 2012December 30, 2012

The Fiscal Cliff – Hohum…

The leaders of this nation – a nation very probably until recently the greatest exemplar of what can be accomplished through self governance – are busy in Washington DC trying to solve the enormous quandary of how to avoid the “fiscal cliff”. The quandary has been created by a nation fundamentally addicted to spending on itself, avoiding the bill, and seeking the least painful alternatives to keeping on doing what it is doing to itself. We the People stand by in worried anticipation of what is to come from the least economically perceptive President in history, a Senate that has not met its fundamental constitutional requirement of passing a budget in four years, and a legislative house that can not even get its own members to promote a possible solution. And We the People elected them.

The Fiscal Cliff is an inevitable point of destiny for incoherent and incompetent leadership. Presented as an endgame so terrible that a nation spending on average 1.2 trillion dollars more than it takes in every year, it was assumed the shock of rigid cuts and higher taxes for everyone would prod such leaders into finally facing up to their responsibilities. The cliff automatically would drive tax rates back to their 2001 status and force the gluttonous spending to unfunded levels still twice any deficit spending in the country’s history, but hey, at least in direction of more sane budgeting. In fact the CBO estimated the fiscal cliff would increase the nation’s federal revenues 19 percent while reducing the nation’s spending by 0.25%, resulting in a deficit reduction of 560 billion dollars, with luck under the stratospheric trillion dollar mark it has been functioning at for four years. That doesn’t sound so bad until the estimation as to the effect on the nation’s Gross Domestic Product (GDP) is figured in. The removal of hundreds of billions from the private sector through taxes to reduce but not remove the deficit , while reining in government spending so ludicrously called “stimulus” spending, would reduce the nation’s GDP a whopping 4%. Say hello, recession.

Very likely, the elected leaders in Washington struggle to see the enormity of their profligate spending and cavalier tax policies on the rest of us. It is understandably difficult when your healthcare follows different rules then the rest of us, you are guaranteed a pension unlike the rest of us, and you can position yourself for inflation-protected cost of living increases, at the expense of the rest of us. Jazz Shaw of HotAir.com puts our predicament into easy conceptualization in what he calls U.S Budget for Dummies:

U.S. Tax Revenue   $ 2,170,000,000,000

Federal Budget         $ 3,820,000,000,000

New Debt                  $ 1,650,000,000,000

National Debt         $ 14,271,000,000,000

Recent Budget Cuts      $ 38,500,000,000

Lets now remove 8 zeroes and pretend its a household budget:

Annual Family Income                                  $21, 700

Annual Money the family spent                  $38,200

New debt on the credit card                     $ 16,500

Outstanding balance on the credit card $142,710

Recent household Budget cuts                           $38.50

As has been identified correctly before, the US government is unlike the family household in a very critical way. It can print money and lend it back to itself to keep on going with the above economics for some time, where as the family household would likely be at a fiscal cliff of some sorts.

And so we approaching what will be the first of many fiscal cliffs. After the President achieves the successful re-framing of the nation’s economic ills as not the challenge of the national household but rather the failure of its most productive members to give sufficiently, taxes will become even more progressive, but not more productive in reducing our debt. The brief holiday for leaders in throwing the rational budget of the United States overboard will soon be overshadowed by the looming generational cliff of unfunded future spending. Somewhere in the first quarter of 2013 the government will come up against the movable line in the sand known as the debt ceiling, having exceeded trillions of dollars of wiggle room in only a year and a half. We the People can obviously absorb bad economic policy, but can a country in which half its participants look to the government for their daily milk, do without milk if the government is forced to shut down? Not likely.

Let’s just hope the nation is girded for what is to come.

In the mean time, pass the milk and cookies.

December 1, 2012December 1, 2012

Theater of the Absurd

Welcome to the Theater of the Absurd that has become the narrative of crumbling western institutions. Like the audience of Waiting for Godot, those of us who are observers in the audience don’t know whether to laugh, cry, or simply maintain a dumbfounded muteness at the inactions and confusions on the stage. In Beckett’s play, Vladimir and Estragon vainly wait for an acquaintance named Godot to arrive, blithely unaware as to whether they would even recognize him if he were to appear. So go the stumbling, bumbling leaders in charge of running the western assemblies who presumptively stand vanguard over two thousand five hundred years of western civilization’s most shining achievement, the elevation of each individual to a creature of value. We individuals, having bought the tickets for this absurdest drama, are frozen in the audience, the theater doors bared to any conceivable escape. We can only look back and wonder why we thought buying the tickets was such a good idea in the first place.

In our pitiful play, Greece is our Vladimir and the United States our Estragon. Greece, the citadel of western civilization, as a free willed country, is now at a point past death. Having involuted its entire economy into a vehicle for self digestion, the bill for the lavish feast is long past due. The puppets that are the face of the Greek assemblies agonize over the steadily increasing vise the international community, and in particular, the European Union, place on their ability to ingest themselves. And everybody is upset at the forlorn Greek taxpayer, a steadily diminishing segment of society that has realized that paying taxes is over rated, when the taxes simply go to those who demand more taxes from those foolish enough to pay. The fact that enormous financial burdens of the state have overwhelmed its ability to obtain receipts to pay for it all is looked upon hilariously as a specific character flaw of the Greeks.

The current supportive plan of the European Union is a ponzi scheme that should lead to our old friend Charles Ponzi to be nominated for a Nobel Prize in Economics posthumously. The Greek government forces the selling of short term bonds meant to pay their explosive debts, to insolvent Greek banks that long ago had their available capital washed away in debt restructuring, who in turn are held up by loans from the European Union countries, particularly Germany, at interest rates that everybody knows the Greeks will never be able to pay back. This, of course will lead to the wonderful absurdest moment in Act II, where the German Chancellor Merkel will get to explain to the German people in her bid for re-election, how investing Germany’s hard earned capital sustained through taxes on the German taxpayer, needs to be invested in an enterprise with no hope of return on investment from the incapable Greek taxpayer, and that this scheme needs to go on indefinitely. I suspect that will certainly produce some nervous guffaws from the audience. Luckily, a potential villain has surfaced. It turns out that the only surviving economy in Greece is the large group of small business owners, the individual mom and pop shops that make up 30% of business in Greece, far exceeding the percentage in any more civilized western socialist democracy. It turns out these little businesses have learned to survive by under-reporting their meager receipts, in order to avoid the oppressive taxes that would destroy their businesses. To European Unionocrats, this is an intolerable situation, that demands the coalescing of these businesses into a more manageable and cooperative bureaucracy. Thus furthering the destruction of individual incentive and enterprise. Who would have guessed?

Ah, but wait. The play, seemingly wandering about without answers, holds for us even more surrealist directions. We are beginning to hear from Estragon, in the form of the United States. Here is where the play will abound in absurdities. The recent election has confirmed the public’s confidence in the economic musings of a former Hawaiian prep school pothead, positioned to lead the once great American economic miracle into the rocks. Facing the “fiscal cliff” of enforced tax raises and dramatic directionless spending cuts guaranteed to throw the country back into recession, the former Cannabis connoisseur has determined the way to deal with the crisis is- no really- “stimulus” spending. You see, how this works is, the government overspends thereby needing more tax receipts thereby raising taxes thereby reducing economic performance thereby reducing receipts thereby needing economic stimulus through more spending. Estragon would be proud of such logic as he took off his bowler and stared inquisitively into it, seeing nothing. The legislative bodies sit by and wonder if cannabidiol has made logic invisible to the man who woke up one day and discovered himself Leader of the Free World. Certainly it can’t it can’t get more absurd than that.

The end game for a play which has no end is the lonely waiting for someone who will never come, a sustained and constructive policy to get the West out of this mess. The United States will unfortunately ignore its ridiculously prevalent bounties of personal incentive, creativity, innate thriftiness, and natural resources, and instead propel forward to economic decline, spiraling debt, and progressive paralysis. Europe will tumble into Act III, where suicide is contemplated but the characters of the play lack the energy and incentive to follow through.

Western Civilization, whose two thousand five hundred year brilliant journey is now in the hands of such characters, is best eulogized by Samuel Beckett’s most memorable line in the play regarding the frailty and brevity of such existence:

They give birth astride a grave, the light gleams an instant, then it is night once more.

August 25, 2012August 25, 2012

The Emerging Energy Bonanza

Ramparts of Civilization has long been an focused observer of the interesting politics of radical environmentalism, global warming hysteria, and the unstated but aggressive agenda of such proponents to “own the truth”, subjugate rational science, and fundamentally contain individual freedom and pursuit of happiness. Ramparts’ February 21, 2012 essay “Peak Oil Joins the List“ reviewed how the conversion of objective science into “settled science” was used to create the sense of inevitability in outcome and firm up the religious overtones of the underlying socialist agenda of radical environmentalism, and how the concept of “peak oil”, the exhaustion of all known petroleum energy reserves now in permanent decline, was used to reinforce the need to reduce energy utilization and fund other “more acceptable” alternatives.

The largest problem with the theory of peak oil is that it frankly is turning out to be dead wrong. Carbon based energy in the form of petroleum and natural gas has been responsible for the largest economic improvement in the status of the individual in history, with such security as provided in individual transport, inexpensive food, and availability of cheap energy for comfortable living and economic pursuit. The reality of the side product of increased carbon dioxide emissions in its utilization left the door open to radical environmentalists as associating this form of energy as “evil” and with its implied source exhaustion, in need of immediate abandonment. As available sources saw their decline around 2000, the public was left vulnerable to the scare tactics of staying “addicted” to this diminishing evil resource. The radicalists didn’t however take into account the power of technology to unravel all their assumptions. A small group of energy pioneers in the 1990s were already on to unleashing the motherlode of earthbound carbon energy locked in source rock thousands of feet deeper to the standard well drills. Source rock is the “Mississippi” of petroleum reserve that has over the millions of years fed the “ponds” of easier to obtain oil and gas previously uncovered with classical vertical drilling techniques. The fully developed technology of “Fracking” – horizontal drilling and hydraulic rock fracturing – has managed to revolutionize the energy industry in the United States and astoundingly potentially put itself in reach of energy independence.

Receiving almost no help from a federal government already married to the concept of peak oil, small private firms began to explore the possibilities of fracking, and in a few short years, have made the states of North Dakota and Pennsylvania among others into growing energy industry stars, providing huge economic benefits to their states. The known Shale Oil fields in the United States makes almost two thirds of the nation a potential harvestor of the resource. The stunning realization that the United States, so recently at the mercy of the Middle East oil cartel,may potentially become a net energy exporter for the first time since 1947, has huge strategic implications.

Now that fracking has unleashed the availability of inexpensive and potentially 100 year supplies, the fight will go to arguments of the safety of the process. Radical environmentalists, cornered in their argument regarding the inevitable end of available petroleum as the need to go to more expensive alternatives, now are focusing on the technique of fracking and the implied risk to water resources and soil environment. As we need to do with all technologies, a rational risk benefit assessment needs to be done based on occurrence not assumption. In a not to be missed interview with Peter Robinson’s Uncommon Knowledge, Trevor Rees-Jones of Chief Energy Corp, a pioneer in fracking, brings us some much needed perspective on the petroleum revolution under way and its implications. The coming national election will go a long way to determining if the future expressed by Mr. Rees-Jones becomes our shared future:

June 9, 2012

Things That Can’t Go on Forever, Don’t

The American economist Herbert Stein, counselor to presidents Nixon and Ford has been quoted as saying in various alliterations, “Things that can’t go on forever, don’t.” The great social experiments in history, roman citizenry binding unlike peoples, islamic caliphates achieving the submission of cultural disparities through religious”truth”, the French Revolution eliminating social strata by eliminating the social elite, and the Communist manifesto subjecting the self determination of the individual to the will of the collective have all come under the eventual reality of Professor Stein’s law, as natural economic forces for need for expression of individuality, survivorship of the most agile and fittest, need for rule of law, and the corrosion of the original experiment’s purity all come to bare. We may be seeing a evocation of Stein’s law with the 75 year experiment of attempting to achieve social equality through the marriage of elected governments and the governmental growth industry of a population beholden to that government, a process strengthened and ever emboldened by the vast access to tax dollars. Access that is truly vast, but owing to Stein’s law, not unfettered. The citizens of Wisconsin June 5th determined to put Stein’s law into effect and soundly put an end to the progressively disastrous idea that a government held hostage by its own citizen employees was a permanent feature, and democracy in its current state existed only to re-inforce the notion and replenish the coffers of its enablers.

Wisconsin, a posterchild for the national and international trends of democratically elected governments to feed upon their own to sustain the ideal of achieving the universally secure life, had found over the last ten years the supposed promise of guaranteeing security to all had become an unholy burden. Locked into having to produce a balanced budget by a constitution written years earlier by a more fiscally responsible and mature citizenry, increasingly unethical fiscal tricks were required to assure the entitled their unfettered cut of the budget. Multiple elevations in the tax rate for both individuals and businesses eventually proved insufficient to feed the multi-billion dollar requirements of entitlements and the democrat Governor Doyle did the only rational thing felt he could given the inseparable link of the entitled to the health and power of his party – he stole. First hundreds of millions from the transportation funds exclusively set aside through energy taxes to maintain the transportation system, and then from health care professionals and patients through the state’s malpractice fund. When that didn’t prove to be enough, he took what he could from a one time subsidy from the federal government’s stimulus funds, and retired, leaving the whole stinking pile for the next governor to deal with. The election of 2010 between Scott Walker, a fiscal realist, and Tom Barrett, mayor of Milwaukee, who promoted a further expansion of unsupportable tax mechanisms, was Wisconsin’s first dip into the cold water of fiscal reality and stunned every one with electorate’s decision to go with the adult in the room, and promote Walker to Governor.

Walker proved to be one of those politicians that people who had co-opted government for their own devices had assumed they had intimidated out of existence – a politician who believed in every principle for governance he laid out, and was determined to stand behind what he had campaigned on. The backlash was immediate and total, because the stakes were so high. If Walker could actually achieve fiscal sanity of government through realistic budgeting, shared sacrifice, and mechanisms for restoration of a more balanced relationship between the government and the people it supposedly served, without identifiable calamity, then all the myths and dire predictions of those who controlled the governmental entitlements would be exposed. That would be intolerable, and the next two years reminded everyone of how determined, entrenched, and vicious the governmental oligarchy syndicate could be. Wave of recall after recall election was promoted and paid for. When the legislature did not immediately dissolve in the face of the intimidation, the syndicate looked to unseat the Supreme Court majority that stood in the way of constitutional support for legislative actions. Death threats were aimed at the governor and legislators that stood in their way. The indentured democrat servants were forced to flee the state by their masters in order to obstruct the process. A mass of radical professional protesters filled the halls of the people’s capital with a cacophony of noise and filth and threatened to not leave until they got their way. And when none worked , they risked all and aimed for the head of the beast. They looked to recall Walker himself, and did so by presenting the mirror election of two years previously, Walker vs Barrett, so the electorate could show the world that they had been wrong the first time and recognized the error of their ways.

On June 5th, the governmental oligarchy rolled the dice for ultimate control – and lost. Not by the squeakily narrow margins they had for so many years been able to manipulate, but resoundingly.

In just two years the impossible had occurred. The political elected forces had balanced the budget through sustainable means, eliminated a towering 3.6 billion dollar deficit, achieved job growth rather than company flight in the state, funded its healthcare mandates, restored local municipal control over budgets and investments, and did so without unethical pilfering or onerous tax increases on the backs of its economic producers. Most stupefyingly of all to those who thought everyone was in on the take, the electorate recognized what they had achieved, and showed its overwhelming stamp of approval.

Herb Stein the professor may prove to be Herb Stein the prophet. In democratic free market societies, there may yet prove to be self correcting capacities. Deficits as far as the eye can see and beyond what might be conceptualized does not have to be the fate of an engaged electorate. If the alternative is securing one’s security at the expense of prosperity and all that future citizens, the electorate may be capable after all in discerning who is willing to present and follow though on solving problems, and making a course correction before the crisis strikes. The Wisconsin motto, Forward, may have reached fruition in this election and may be the way forward for a nation that is about to face the same moment of electoral truth. When all is said and done the resilience of the American Idea, that the unbounded power of its people to move forward is a beacon for the rest of the world may once again be the positive miracle of our times.

May 27, 2012

Euro Collapse – 2012?

The prudent thing to do when a major storm with potentially cataclysmic destructive power is heading your way, if you have sufficient warning, is to prepare by boarding up the windows, gathering supplies, and make plans for the aftermath. It is clear that the countries and organizations that are oases of financial stability in Europe are seeing the gathering storm clouds and preparing for a very rocky night. The crushing weight of bond obligations are beginning to violently shake the southern foundation of the Euro zone and the painful efforts at austerity by the countries at risk and the financial shoring up by the European economic giant Germany may be reaching its limits. The aggressive efforts at trying to sufficiently underwrite Greece to allow it to stay in the Euro is cracking the will of both Greece and the underwriters, and the prime minister of Greece has declared the end of June as a point of bankruptcy and default, unless further funding is made available. German patience and financial wherewithal is, as German Foreign Minister Hans-Peter Friedrich has declared, limited, with Germany “unwilling to just pour money in a bottomless pit.” DeutscheBank Co-CEO Juergen Fitschen described Greece as a “failed state run by corrupt politicians.” When your major lender has such opinions of your credit rating, the future is dark indeed.

The inevitable Greek default on their financial obligations, and resultant exit from the Euro now appears – inevitable. The countries outside the Euro are preparing. Switzerland, with its rock stable Swiss Franc looking Olympian compared to the Euro, fears the inevitable over valuing of the swiss currency as billions of euros pour into the safe haven of the Franc, and is contemplating a minimum rate for the Euro against the Franc to protect its export economy if default occurs. Lloyds of London is reviewing the capacity to switch to multi-currency underwriting to protect its exposure on the continent. The overt effect upon Europe and in a global economy, the world at large, is return to deep recession, and to Greece, a catastrophic default with dramatic reduction in economic value, loss of savings, lack of supplies, and blackouts, as creditors cut off the lifeblood of the country.

Other than that, things might just get worse.

Spain’s major banks are reeling under the strain of increased interest rates, and the credit ratings for the massive economies of Italy and potentially France are due a significant downgrade in their credit rating, resulting in borrowing costs that may prove unsustainable in the continent inflexibly on a single currency. Defaulting by Too Big To Fail countries like Spain, Italy and France would likely plunge the world into a depression.

The sixty year experiment of buying European peace and stability by assuring cradle to grave security for its citizens is coming to an end, and it is not yet clear its citizens have grasped their role in precipitating their impending crisis. France, faced with limited, peripheral reductions in its welfare state under Sarkozy, determined with its recent election of the Socialist Hollande to throw its fortunes to whims of destiny. The United States, a debt behemoth that dwarfs any European obligations, is heading toward its own election in which the current socialist president who blithely expanded the national outlays by 22% over the last three years with no means of paying for it, stands a reasonable chance of being re-elected.

The concept of democracy is an old idea, but the inherent instabilities of this old idea are very modern. Can a citizen recognize the difference between promises of security and the responsibilities of personal freedom? Can a citizen be their own country, recognize their responsibilities and obligations, contribute where they can contribute and start being part of the solution, rather than the nexus of the problem. The world is going to find out and it looks like 2012 is as good a year as any for some real self realization.

February 21, 2012February 21, 2012

“Peak Oil” Joins The List

The modern marriage of science and politics has not seen such a loving relationship since the Catholic Church and Geocentric theory. Control the conclusions and the power to direct policy and sublimate people is yours. The concept of the Earth as the center of the universe and all celestial bodies revolving about it were the brilliant conceptualizations of great men of science such as Aristotle and Ptolemy, providing for their time far reaching logical interpretations of the natural world. The piggybacking of the religious conception of an omnipotent God whose acknowledged greatest creation was Man and the planet man inhabited dovetailed nicely into the scientific tome. When the “settled” science developed cracks – and what science could be more settled than the science of an omnipotent supreme being’s creation – the Church found the observations of those such as Galileo heretical. The very concept of an alternative universe where the earth was just another planet orbiting a sun of many suns was antithetical to a universe where God expressed Himself most perfectly through his earthly creations, and most importantly, through His placing of the Church in the position of earthly arbiter of What Is. The beauty and mystery of God’s creation is undeniable and awe inspiring, but what is also clear is the many facets of the Mystery is not held forever in the hands of a solitary truth. Science untethered from restrictive thought evolves ever more masterfully toward bringing clarity to the natural world’s mystery. Tie its existence and conclusions to the current elite, and what you have is a recipe for trouble.

Thus, the framing of The List. The list is many examples through history of “settled” science threatened by the progression of knowledge and objective vetting, resulting in violent reaction and suppression. The list extends over the centuries in linear fashion, from the geocentrism of the middle ages, to Man as God’s directed creation rather than through Darwinian evolution, to the Racialist Theories of National Socialism, to the globalist theories of “anthropogenic global warming”. Each declared a settled science to maintain the political and economic levers such settled conclusions provided, and dictatorially suppressed any other conclusions.

The concept of “peak oil” takes its roots from similar origins of other such dire armageddon theories of the last five decades, such as “Population Bomb”, “Nuclear Winter”, and “Global Warming”. Each defined the Development of Western Man as the culprit, a out of control species that destroys the careful balance of the natural world for his own selfish interests, plundering the Earth, and plowing onward to the destruction of everything out of his own spiteful need for individual expression and pursuit of happiness. Only a global consortium of like minded tenders can “manage” this tendency for self destruction, and through the levers of economic control and rationing, assure a fair and appropriate distribution of the diminishing resources of the planet. Science joined into this radically reactionary tome for the same reasons Willie Sutton stated bank robbers rob banks – that’s where the money is. The dolling out of billions of dollars of “directed” research money assured that those with appropriate conclusions prospered and those contrarians starved- and thus the “settled” science.

“Peak Oil” has been typical of this science vein, nurtured on strands of facts and locked in against any potential threats. The simple tome goes like this – there is a defined amount to available oil carbon based energy on the planet, the amount has been discovered, and the earth’s spiraling need for oil will come up against this finite and ever diminishing source with dire consequences unless we immediately transition to other sources of energy and live “within our means”. The concepts are based on known oil sources and extraction capacities, progressive utilization, and the untoward effect of continuing reliance on oil on the environment. As the “Peak Oil” advocates similarly harp to similar dire predictions, the science of diminishing oil has long been “settled”.

Unfortunately for elitists, and to the benefit of those who seek a self directed individual life defined by freedom and choice, science is never settled. Anthropogenic global warming has recently crashed against the rocks of facts, and now Peak Oil is seeing a similar demise. The driving forces in the United States promoting the concept of Peak Oil have run up against the explosion of technology, that has separated the facts from the “science”. Available oil has always been artificially limited by availablity and now through new technology availablity has sky rocketed. New technological feats in shale oil extraction and deep water drilling have opened the United States, Canada and the world to spectacular new oil finds, to the extent that known available oil has doubled with no end in sight. The United States in particular, once the nunber one oil producer in the world, but in production decline since the 1940’s due to ever cheaper easily available middle east sources, now finds itself in the midst of an oil boom on the scale of the original oil rush , and could amazingly prove oil self sufficinient by 2022. This accounts only from newly discovered resources and does not take into account the spectacular availability of carbon based energy locked in coal that has yet to find a science to safely harness, and of which the United States is uniquely blessed with abundance.

How can this be? How is it possible that in three short years, one has gone from a convinced world in which man induced global warming and plundering of self limited natural resources, is now a world that appears to be cooling despite man’s efforts and is bountiful in cheap energy? It is of course the result of individual man’s ever searching intellect, that drives forward toward truth no matter what artificial constraints are applied to suppress it. These innate internal drives are what drove the discovery of the telescope by which Galileo exposed the universe’s reality, and what powered the intellects of the supposed racially inferior Jewish scientists cast out by Germany that powered U.S. atomic technology winning the race with German scientists to the secrets of the atom.

The List is an elitest one, designed to suppress free expression economically and materially, so that a certain hierachy is maintained. Their brief setbacks, created by facts they have not yet found the means to control, has given us all a brief respite. It is, however, an eternal struggle, and those striving for control of the nation’s and world’s resources control governmental avenues of power, and are not about to easily give up their drive for ultimate control of the new religion of “settled science”. Whenever necessary, we must stand strong and express doubt regarding their conclusions and demand independent observation. It is the way of science, it is the way of this democracy, and it is the way of free will.