Value vs. Money

Again, this assumes that government can create jobs. Government cannot create jobs. It can create a climate conducive to job creation or it can do the opposite. The jobs government creates are not ‘real’ jobs. They are jobs dependent on political patronage.

Government can insert itself and re-distribute the wealth created by real jobs in the private sector, but it cannot create or re-distribute ‘value‘. The honest money poured into unproductive sectors is money wasted. The tipping point is reached when too much wastage starves the private sector (where value is created) out of existence.

With the rise of autocratic dictatorial regimes at the expense of democracies, it is inevitable that job creation suffers. This political trend has now also taken root in Washington.

America was well known throughout the world as a place where it was still possible to come and make something of oneself. The business climate was considered to be ‘friendly‘. This is changing. High taxes and regulations have virtually ground business in America to a halt. In order to stay in business these days you have to first ingratiate yourself to the party in power and then wait for them to give you your arbitrary allotment of wavers and handouts. It’s called crony capitalism and it never works well.

There’s no mystery as to how capitalism functions and how ‘real’ value is generated. A man goes to work for a firm and receives a salary. His salary is predicated on how much he can be expected to contribute to the firm’s bottom line. If his skills are independent of the firm’s structure, he can eventually go out and start his own business. He will then begin to hire people keeping the same principle in mind: he will pay them a percentage of what they can be expected to contribute to the new firm’s success.

An athlete is paid according to how many people his presence can bring into the stadium. An actor is paid according to how many people his talent can attract to movie theaters. It is their talent that is valuable. The money generated by any such transactions can go up in smoke in an instant. The value of individual talent, skill and perseverance remains. A good actor will always eat.

Not many of us are blessed with outstanding attributes such as John Batchelor’s golden-throated voice and keen wit; or even with the ability to think effectively on our feet. Yet, we too can be a part of the system. We have other, perhaps less spectacular, attributes to deal. And we too, if we apply ourselves, can earn a modest, but secure, living.

Enter big government that blocks all normal processes and throws the whole system into confusion. Now nobody can be secure. The rules change with the political winds. It’s difficult to plan and even harder to trust - and the whole thing breaks down to be replaced by … what?

At this point, it could be anything - a new currency, gold, indentured servitude, work camps. With capitalism discredited, one’s work can no longer save one. Things are apt to become a whole lot more arbitrary and complicated. For one thing, America may soon not have to worry about its immigration problem as opportunity continues to fade; and there won’t be much left to bother blowing up anymore.
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A note about education: Education no longer teaches discipline and skills. Education has become so devalued in America (and elsewhere) that it represents little more than a (hall) pass for entrance into the entrenched elite classes‘ washrooms. Additionally, education nowadays consists primarily of learning to spout political propaganda points.

http://pkoelliker.blogspot.com/

Don't Hold Your Breath

From the beginning the Obama administration has been a lead balloon held aloft by wires, widgets and strange devices. The fact remains that lead balloons do not float. The moment cracks appeared in the suspension anchorage (in the form of poorly designed health care reform, stimulus; the University of East Anglia e-mail dump; foreign policy set-backs; deepening economic malaise; and, now, the Gulf oil spill – an apt metaphor) the balloon came crashing to the ground. Die-hard supporters of Obama’s Utopian vision were prepared for even this eventuality. They are now quite prepared to lower the ground.

"Mr. Obama is systematically diminishing the United States, effecting its transformation from what was once called 'the world's only superpower' to a nation subordinated to the demands of international consensus, organizations, 'peer competitors' and even rogue states." So writes Frank J. Gaffney, Jr. in a piece entitled, ‘The Obama Doctrine’.

Mr. Gaffney concerns himself primarily with international affairs, but the same ‘diminishing’ is going on domestically as well. It is largely uncertainty that is keeping the economy from roaring back. While much of it falls under the category ‘to be determined…’ (after elections), we do now have some idea of what the end game will look like (which we all know is not possible to achieve on American soil as it is presently configured).

Socialism is not what frightens us. It can be argued that we have been living under some degree of socialism for years. What frightens us is the specter of the step between now and then. In order for the seeds of socialism (or any new system) to sprout, the existing crop has to be plowed under. It is this we are now witnessing on a daily basis. In fact, the work has already progressed to the point of where it can no longer be stopped. Both the private sector and our government(s) are on the verge of collapsing.

On this blog we have been focusing on the private sector. Most of us are paying roughly 50% of our earnings to sustain government. Even at that rate, the government cannot survive. As taxes are increased, the private sector shrinks in same measure. There will be even less money to sustain government. The conservative drumbeat to shrink government is also no solution. The first thing cut will be the services we have come to rely on. This will also create problems for the private sector that depends on the continued maintenance of various forms of infrastructure while, at the same time thrusting more people onto the welfare rolls. Government and the private sector are entirely codependent. Cuts in either one end up harming both.

We have entered a lose-lose situation. The only way out of it is to encourage a robust private sector to mop up government excess. The private sector, however, is no longer robust. Government has grown too large and oppressive. It has smothered any hope of sustained economic expansion. We have in effect hit a wall.

The plowing under of the old crop has become inevitable. The kind of seeds we plant will be our next major decision. If we choose to go with the same old crop, the soil will end up even more depleted. There are alternatives, however. We can plant something different that will revive our soil; or we can leave the land lay fallow. In any case, we’ll have to resign ourselves to a long wait for the new seeds to sprout, for the stalks to grow. I would not advise anyone to hold their breath.