I believe that humans are becoming more intelligent, more educated, more moral, less violent, and more human. By more human, I mean that we have more leisure time to consume and to create art, politics, music, literature, etc. We also have more and more leisure time to help other humans or to heal the environment, as evidenced by the enormous number of NGOs and donors who fund them. Free trade and technological development are two primary factors that have allowed humans to escape the cruelties and monotony of the non-industrialized life and to become “more human.”

My friend and others who think as him (a significant portion of Prof. Freyfogle’s Individualism & its Critics class), often romanticize the non-industrialized, agrarian, hunter-gatherer world. I always find it curious that when I hear that romanticization and the denunciation of the industrialized world that it always comes from someone who lives in the industrialized world, but who visits nature. They visit nature during their leisure time as a vacation, but I have not yet met one who has had the courage to abandon civilized society to live an entire life on an isolated farm or in a forest with hunter-gatherer opportunities. A quick Google search reveals many such opportunities.

Regardless, the answer to the question asked in the title of this post is not obvious, even to a naive, heedless optimist. The amount of evil in the world is decreasing as humans become more educated and more connected through technology and the radii of our circles of empathy expand. Our humanity might be increasing, but the technologies of destruction that we develop are also increasing.

The equation would look something like this: (Proportion of Evil in the World) x (Ability of Existing Technology to Destroy Humanity) = Probability that Humans will Commit Mass Suicide. The existing technology could be nuclear power plants, nuclear bombs, the factors that cause global warming, a killer virus, or anything else. Therefore, the probability of mass suicide might be increasing. This equation serves as a general comment and also as a slight critique of Pinker’s presentation below.

I have posted two TED videos below that support my argument and I invite him to share material that supports his views. I maintain my optimism in the face of the arguments presented by Robert and myself. My thoughts on this subject are not well organized or articulated, but I am mostly curious what y’all think.

Andrew Mwenda, a journalist in Uganda, has an aggressive and unique view of financial aid that flows into Africa. Mwenda created the Ugandan newspaper The Independent after growing frustrated by government censorship of the Ugandan newspaper he had previously written for. The Independent promises readers “Uncensored News, Views & Analysis.” Mwenda is bold and aggressive.

TED holds conferences around the world that invite innovative speakers to present their ideas on a diversity of subjects. Mwenda argues in his TED talk that aid hurts African economic development. Bono attended Mwenda’s talk and he (rudely, I think) interrupted Mwenda. I have not seen a video, but I have read that Bono spent his entire TED lecture rebutting Mwenda instead of reading from his planned lecture. Mwenda’s thesis, if accurate, undermines nearly everything that Bono has devoted himself to in Africa. Andrew Rugasira, Chairman of Good Africa Coffee, wrote an interesting op-ed response in the Financial Times to the confrontation. Rugasira writes, “[T]he Bonos of this world need to listen more and display greater humility to African perspectives on African problems.”

TED introduced me to Mwenda and to another great contributor to our world: Hans Rosling. He is a professor of international health in Sweden. Rosling’s TED talks, Debunking Third World Myths and New Insights on Poverty and Life Around the World, present an empirical and large-lens view of global development. Not only does he give us wonderful insight into human economic and health developments, but he tells his story in a compelling and graphical way. The first time I watched one of his TED talks, I said to myself, “I wish that I could play with those awesome bubble time-series graphs.” Rosling granted my wish.

You can play with Rosling’s time-series graphs at his Gapminder website. Gapminder lets you play with tons of data. It allows you to manipulate the graph to present the data in any way you can imagine. Gapminder gives you access to videos of numerous talks by Rosling. The “Downloads” portion of Gapminder allows you to view pre-loaded graphical presentations. I enjoyed the Human Development Trends presentation.

Gapminder focuses on making interesting international development statistics accessible and digestible to the public. Rosling believes there is a gap between countries, within countries, and between the organizations (i.e. IMF, UN) that collect data and the public’s consumption. Gapminder tries to displays the gaps between and within countries and it tries to connect the public with important data.

Something else that is sweet about Gapminder is that Google bought their Flash graphical engine. This news means that you can upload any of your own data to the Gapminder engine and set it in motion. Google allows you to use it either as gadget on iGoogle or to add it as a widget into your Google Docs spreadsheet.

These issues have been getting a lot of talk lately. The cover story of the new issue of Foreign Policy magazine is on what they dub the “Axis of Upheaval” – fragile or failed states that are being destabilized by the economic downturn. The story fits neatly with last week’s report from Adm. Dennis Blair, the Director of National Intelligence, which for the first time in years demoted terrorism as the foremost national security threat in favor of the threat to global stability posed by the economic crisis. As the economy spirals, populations will potentially become more radicalized just as governments become weaker. Pressure grows on those governments to become increasingly nationalistic, while pressure builds for the rest of the world to step in and lend support to these weaker states.

The European Union is facing similar pressures. Last week saw reports that the EU is considering having its bigger economies bail out its smaller ones, possibly by creating a fund financed by the European Investment Bank that would buy the smaller countries’ government debt. And while concerns that the economic crisis might foment Euroskepticism, the Czech Republic’s lower house just approved the Lisbon Treaty, while a recent poll in Ireland shows that 51% of voters there would now back the treat in a new referendum, which is expected in October but may be moved forward (last year referendum voters rejected the treaty by a 53.4% to 46.6% margin). At the same time, the Czech president recently compared the EU to a communist dictatorship and refused to say whether he would sign the treaty.

And, of course, the United States has gone through its own little bout with protectionism via the so-called “Buy American” provision in the stimulus bill. Pressure from the White House led to Congress taking most of the teeth out of the provision by inserting language that the United States is still bound by its international trade obligations, meaning that Canada and Mexico (as members of NAFTA), any states we have bilateral trade agreements with that cover government procurement, and any states that have signed onto the WTO government procurement agreement cannot be discriminated against. That notably leaves out China and Brazil, but still, it’s not the biggest deal in the world. It does, however, demonstrate the tug-of-war between protectionist impulses and globalist necessities.

The stimulus itself is a bigger example of the problem. Obviously there are several readers of this blog who think the stimulus won’t work no matter what. But if there is any hope of it working, it needs to be a global stimulus given that it is a global crisis. A lot of big economies, including China, have passed massive stimulus plans, but others, like Germany, have been holding out, and the more holdouts there are, the less effective the stimulus will be. (More on this point in a good Matthew Yglesias column here.)

How all this turns out is anybody’s guess, and it likely depends a great deal on just how bad the economy gets. The Great Depression led to the transformation of the federal government, and WWII led to the creation of relatively powerful international institutions. Those are two events of massive historical significance, and nobody seems to be predicting that things will get quite as bad as they got int he 1930’s, nor is there any reason to anticipate a global conflict on the scale of a world war. That suggests that the world’s response to this crisis will be less dramatic and more incrementalist.

Still, it seems to me that with institutions like the UN and the WTO already in place, it will be easier to build off those institutions in the future. And because of institutions like the WTO and the general proliferation of trade agreements around the world, it’s a lot more difficult to act on our protectionist impulses – a measure like Smoot-Hawley would be unthinkable in today’s world, both because we have learned from our mistakes and because we institutional checks against such actions. At the same time, that reality might just make the need for greater integration less pressing and therefore less likely to happen.

Harold Meyerson wrote an excellent piece for the American Prospect recently on the potential for a “Global New Deal.” In it he wrote about the impetus for greater global economic integration:

The most far-reaching case for global regulation — indeed, for a global New Deal — comes from the global labor movement. That unions favor New Deal?like social and economic arrangements comes as no surprise; that the labor movement now has genuinely global institutions probably does. In recent years, hitherto national unions and union-federations have begun to go global simply to keep up with their employers. [...] On Nov. 15 — the same day that the G-20 leaders met in Washington — three such new global entities, the International Trade Union Confederation, the Trade Union Advisory Council to the Organization of Economic Cooperation and Development, and the Global Union Federations (sectoral organizations of individual unions), released their own “Washington Declaration.” It called for nothing less than a new Bretton Woods system that would create a global economy with compacts and laws to regulate capitalism and foster countervailing institutions — such as global unions themselves — that would reduce the economic inequality inherent in unregulated capitalism.

…

Pushing for stronger global regulation of finance, product safety, labor rights, and the like might seem an indulgence Obama can ill afford. Or, given the exigencies of coping with a global economy, such global reach could prove surprisingly necessary.

My thoughts above are admittedly a little jumbled – I’ve written this over a couple days and with a bit of a cold. But what Meyerson says above gets at the basic point I’m making. I wouldn’t predict anything as ambitious as what he describes, but it seems to me we have the political actors and the institutions in place that could set the stage for something pretty dramatic. If things really start to tank, we could be in for some radical changes one way or another.

I find it sad that we forget the values that have made us the most powerful nation in history – economic liberty and limited government intervention – when fear overwhelms logic. Our economy is too complex for the federal government to micromanage it. If America maintains its dominance during China’s rise, it will be because of inefficient and corrupt intervention in the marketplace from the Chinese government. Markets require extensive regulation to prevent them from self-destructing, but market intervention is distinct from market regulation. Economists still debate whether FDR’s Keynesian spending programs hurt or helped the economy. Markets fluctuate and we must learn to accept years of recession. We cope with recessions because in the long-run free markets will generate a far greater abundance than enslaved markets. Big government spending tends to create moral hazard, be inefficient, create abundant opportunities for corruption and create a network of perverse incentives.

A Facebook group and a website have been started to organize the Santelli revolutionaries. I have joined the Facebook group.

While I agree with many of Obama’s social views, I chose not to vote for Obama because I fear his faith in the slimy squid tentacles of the federal government and his lack of faith in the system of economics that has created an abundance of wealth, health, education, universities, food, luxury, travel, philosophy, art, music and film – all of the things that make us human.

Perhaps after reading this post you will no longer doubt my conservative credentials.

Right now, a lot of people are scared, and there are plenty of reasons why. The question is what this fear has motivated us to do and how certain people are using it to achieve their own ends.

The responses to these challenges have run the gamut. Some point to our new charismatic leader as the beginning of the “change we need.” Others suggest clinging to traditional political or economic philosophies, from Reagan to FDR, Friedman to Marx. Others claim that the differences are too great, and that the Union is no longer worth saving.

The measure of a nation is its ability to innovate. When a country stops creating it dies. This is not limited to commerce or science. It is a political and economic matter as well. History does not repeat, it varies on common themes and precludes common responses.

But the premises that some are adopting, of dissolution or blind allegiance described as “post partisanship,” is unwise. Our union is cantankerous and disagreeable. But it is through our disputes and our compromises that we find our strength. No side of the political spectrum is right all of the time, and it is through conflict that we avoid bipartisan mistakes.

It is with this in mind that we have to turn to the official beginning of the Obama administration; the stimulus bill. It is representative of the stalest type of thinking. Keynesian economic theory is nothing but a justification for the argument that if you can’t work your way out, buy your way out. Government spending to “beef up” GDP is nothing more than a cheap parlor trick to scam the masses, much like dishonest CEOs used accounting rules to bump up earnings. These would be the same CEOs that President Obama railed against as a candidate, and still vilifies today.

But even if I were a staunch Keynesian, this bill represents a type of political cowardice that makes its passage unpalatable. There are plenty of provisions within that are stimulus related. I have nothing against those provisions. Granted I would not necessarily vote for them, but those provisions belong in such a bill.

However there are other provisions which are included, not because of their potential to stimulate the economy, but because these programs will be easier to pass while hidden in a “needed bill.” Because time is limited, there will be less debate than would otherwise be generated if the provisions stood alone. One initiative I find especially repugnant deals with health care.

Contained within the stimulus bill is an initiative to create a unified electronic system for the transfer of medical records. While seemingly innocuous on its face, the bill makes participation mandatory with fines being assessed for those who refuse to join. The privacy concerns involved for those who do not want to participate are deemed irrelevant by the party that is supposedly privacy’s champion. Further, the initiative also creates the National Coordinator of Health Information Technology, which will assess a doctor’s treatment to make sure it is “efficient and effective.” Essentially, it creates a Big Brother for doctors in determining how to treat people. It has all the worst traits of socialized medicine, without the benefits.

Instead of having the courage to separate these more controversial provisions from the stimulus, and permitting the debate that these proposals deserve, President Obama hides the ball and then calls those that would oppose him foolish and mean spirited for holding up needed aid to America’s most desperate citizens. I call that politics as usual.

President Obama ran on a promise that he would elevate public discourse, change how politics is done in Washington, and then challenged us to do what is hard and right as opposed to the expedient and insubstantial. This is a promise and a challenge that did not even last 30 days. Not only did President Obama fail to achieve these goals in his first major piece legislation, he took the opposite approach and revealed himself to be just another politician. Those that would throw on the brakes in an attempt to form a better bill, to point out these distinctions, are drowned out by those that are paralyzed by fear or by those that would capitalize on other’s fear. Either way, legislation that should at the very least be highly scrutinized is being fast tracked merely so people can believe that “something is being done.”

One president told us that there is nothing to fear but fear itself. Our current president wants to use fear to achieve his own ends. By allowing President Obama to dictate the agenda by playing on our fears, we sacrifice any semblance of personal autonomy. President Obama should either stop lecturing about sacrifice, courage and innovative thinking or start living it. Either way, it is time for a change.

Editor’s Note: George Will came out with a column today playing with the Fear Itself quote, and talking about the stimulus package. I considered not posting this, but hell, I wrote it before Will posted his stuff, and I bring the cowardly comment, so screw it.

Late update: Nothing in this post takes away from my love for Mr. Smith Goes to Washington or this episode of the West Wing.

Everything your suburban parents told you about the future was wrong.

Hate to break it to you, but you’re not going to have a better, easier life than your folks did because you went to college.  As a matter of fact, if you’ve got a bunch of student loans, you’re going to spend the next ten or fifteen years significantly worse off than they did.  The suburbs, the McMansions, the long commute–all of those are as dead as flappers and bathtub gin, wiped out in the orgy of corporate and government immorality and excess that was the ‘oughts.

Along with the lowered expectations, you’re going to have to deal with a constantly uncertain future which includes the loss of direct political impowerment–the latter due to the fact that you’re going to be spending so much time simply surviving that you won’t have time to change the world.  The speed of the internet will give you more than the disenfranchised Okies had, but not much.  Revolutionary change is the purview of the children of the upper-middle class and your parents just lost half the value of their houses and retirement accounts.

Baby-boomers don’t remember hard times, but we remember long hours at the feet of our parents and grandparents–they were still alive, so that proved that they could survive much harder times than you are going to face.  (There was no bank safety net in 1929–rather than losing “pretend values” in inflated houses and bloated 401ks, they put their paychecks in and watched the teller windows close for four or more years.)

For what it’s worth–and I don’t expect everyone to listen, any more than they did in March of 2007 when I first warned about the onrushing depression, here are some items culled from their advice and adapted for the realities of the 21st Century.

Plan on living on half your pre-crash salary.

Or, in the case of soon-to-be college graduates, your projected salary.  Odds are that you and/or your significant other will be out of work quite often as the economy re-adjusts and that the jobs that you’ll end up taking will pay quite a bit less than you planned.

How long will this be true?  It depends on which theory of economics applies.  The new President has a plan of action similar to the one that Roosevelt pursued during the 1930s.  Murray Rothbard claims that Roosevelt’s programs extended that Depression by six additional years.  Conventional historians counter that the Roosevelt plan reduced suffering and shortened the trough.  Others claim that nothing happened either way and that the reason that the Great Depression ended was the increase in innovative investment due to the US’s entry into the Second World War.

In short, no one knows, except that it’s not going to end anytime in the near future.  Vox Day, who has been spot on economically over the last decade, thinks that before it ends we’ll be seeing 17% unemployment in the United States.  This would not surprise me in the slightest and in order to keep eating and end up on the other side in a position allowing prosperity, every step from now on will have to be carefully considered.  It is entirely possible for a person to have a high-paying job one week and be out on the street the next.

Here’s some advice for getting yourself ready for harder times:

Sell as much of your extraneous crap as possible and pay off any loans you may currently have.

If Prescott’s right and we’re about to hit inflationary times, your interest rates, which are tied to the prime in many cases, will skyrocket and all you’ll be able to afford is close-to-minimum payments.  Remember, all you have to do is be late on one payment on some credit cards for them to jump ten or fifteen percent in rate–if you’re missing payments, you sure as hell can’t afford that to happen.

If I’m right and we’re going to have deflation, you want to hold on to as much cash as possible, since companies, desperate to keep any profit going at all, will be dropping the price on everything. This means that the dollars under your mattress will buy you $1.10 worth of stuff in a few months–it’s similar to what we’ve seen in electronics, but applied to the economy in general.  Those of us on fixed government pension incomes or with jobs that we hold on to will be sitting pretty in a deflationary situation.

So, debt is bad and cash on hand is good–besides, you didn’t really need that Boxster or the wall-length TV, did you?  Remember, the government made it much harder to declare bankruptcy than it used to be, so that option is less inviting than it was twenty years ago.

Rent, don’t buy.

As the number of unsold “investment houses” increases, owners, desperate to get anything out of them, will be dropping rents to what people can afford.  This is already starting to happen with business property in the downtown areas of large cities.  I expect this trend to continue and expand.  How low property values go will depend on inflationary/deflationary scenarios and how high unemployment goes.  Since that’s uncertain, you’ll lose every cent you put into a house that’s foreclosed and often that will be considerably more than you’d have had to pay for rent.

Team up to pool resources.

You don’t have to be married to use the kind of “efficiencies of scale” possessed by polygamous families.  It is cheaper to live as a couple than it is alone and costs per person can be reduced by up to 75% per person by living as a group of five rather than as a couple.  In addition, large family or peer groups increase the liklihood of one of the members having employment income as times get harder.  The number of practical skills in the experiential pool are likely to be much higher in a large group than in a couple.  During the 1930s, all this went without saying, since the nuclear family didn’t exist until after World War 2.  Large extended groups, related or not, will mark a return to the natural state of human living.

Despite low costs and the lure of bargains, do not invest in stocks.

From a strictly historical standpoint, the slowest recovery in a suddently-altered economy are stocks.  If you look at the Great Depression, the values of the major index did not reach 1929 levels (adjusted for inflation) until 1954.  You do not want to wait that long.  Those who had liquidity during the GD bought tangible items being auctioned off to pay back taxes–some of them are still in the family three generations later.  While it is not necessarily true that the same conditions apply during this time period, I believe that the kind of government interference in the marketplace that’s coming up will impede, rather than encourage, stocks’ return to pre-crash rates.

Keep enough money on hand to relocate.

Recovery, like the rest of the future is not going to be evenly distributed.  In the past, those who were willing to go where the jobs were had an advantage.  While this will be lessened by 21st Century communications, skills in tangible industries cannot be transmitted over the airwaves.  Get some “get out of the country” money together and don’t touch it, no matter what.

Whatever you do, keep your internet access and phone service.

The greatest advantage we have over the folks in 1929 is the speed and volume of our communications technology.  Even though it seems to be a luxury, the ‘Net will be invaluable to set yourself up for the next section of advice….

Diversify Your Skill Set

“Anything for a Buck America”–You’re Punk’d

A large number of seemingly-indestructable American institutions are going to become a thing of the past in the next ten years.  People who are currently involved with the Big Three Automakers, unions like the UAW and Machinists’ Union, print newspapers and magazines, non-bank financial institutions, and large law and lobbying firms will find themselves in the same position as the makers of buggy whips after the introduction of the automobile.  The economic and moral paradigms that allowed these institutions to prosper will have changed permanently by the time the dust settles.

The false economic paradigms involved the belief that the rate of innovation allowed the perpetuation of inherent inefficiencies in concept.  In other words, business was so good that CEOs could have salaries 300 times that of a line worker, the union workers could work thirty years and retire with full salaries, and newspapers could charge for advertising even though no one was reading them anymore.

The false moral paradigms involved the belief that if an end was good enough, any means was allowable.  Over time, in a post-religious society, this evolved into one where the improvement of one’s own position was a desirable end that would allow illicit means if no one was watching or if the means were clever enough.  This has culminated financially in pyramid schemes like Madoff’s and politically in the kind of corruption Blo-jo has demonstrated in Illinois and that permeates even the new administration, with its ties to Tony R and the Clinton Foundation’s foreign “donations.”  When financial times get hard, the moralities taught by the major religions become more attractive across society.  This will institute a backlash that will ripple through the halls of both Wall Street and K Street.  While I don’t expect that investment, lobbying, and law firms will be outlawed, per se, I expect that they will be regulated to such a great extent that they’ll have to lay off half of their junior partners just to pay their own legal fees to satisfy the Federal regulators.

What should I do with my new degree in Finance?

Damn, sorry to hear about that, dude.  Tough break.

Best thing to do would be to start working on some salable skills that could aid in keeping you alive.  Right now, an internship in organic chicken farming is a lot better deal than one at Citibank.  The arts and entertainment are often good ways to bring in nightly money.  Bars and dance clubs have good evenings as people try to forget their troubles, you might consider calling your classmates and getting a garage band going if you have any talent.  (Billy Joe–you may get your chance to be a poet and street musician, after all.)

Odds are, you’ll be out of work enough that both gardening and craft skills will help to save enough money to keep a roof over your head.  There are hundreds of sites on the Internet that teach you how to sew your own clothes, raise your own zuccini, cook your own meatless dishes and fix your own electronic devices.  Any of the above can also be used as barter to get you stuff you cannot make yourself–a move towards a more cashless economy.

“Ha!  My degree is in Electrical Engineering–I’ve got a job for sure!”

Well, ‘fraid not.  You see, the second thing that happens after a company lays off the 20% of dead weight in their low-level work force is that they start cutting R&D.  If you look at the late 1970s, the American carmakers had so little research going on that they nearly lost the auto market permanently to the innovative Japanese.  The word in corporate America is “last hired, first laid-off” so you either won’t get a job, or you’ll have it until the next ledge on the way down to the bottom is reached and you’ll get axed, then.

There is a bright spot for you, though.  With the lack of competition from the major corporations, garage tech has a higher liklihood of coming up with something that someone will want to purchase in the periods when there’s a bit of money floating around.  Apple and Microsoft both came out of the late-70s recession and I doubt very much that they could have done so if IBM and Texas Instruments had had their engineering staffs fully operational.  I know that this sounds like the equivalent of saying “get your classmates and start a band” but the paradigm has worked in the past and now, with the speed of communications, you don’t even have to be in the same town to work together.

“How about the intangible professions, I hear education and health care are increasing the number of jobs?”

They are, for now.  The problem with education, though, is that jobs there are dependent on a reasonably affulent tax base, which has just gone with the wind.  There’s a feedback delay of about two years, I figure, between the loss of business and personal revenue and its reflection in the education industry.  No big loss, I figure, modern educational institutions are useless at best and a menace to society at worst.  The University of Illinois will be laying educators off by 2010, I figure.

Health care is a more chaotic case–after all, when you have a heart attack, you don’t look at investment opportunities.  There will always be some jobs in health care, but the insurance companies that are currently financing the expansion of hospitals and clinics have been hit as hard by the financial downturn as the rest of the economy–one of the big three, as a matter of fact, is close to bankruptcy.  If the government gets involved, there will be extensive regulation of one kind or another that will freeze innovation and limit the number of jobs available in the industry.  In addition, a government-run health industry will make it dependent on collected revenue.  If there is a universal health plan promulgated by the Obama administration, I figure the industry lay-offs will start about 2011.

Plan for the Other Side of the Depression

Sooner or later, the depression is going to be over and the world will go back to a semblance of normalcy.  That world won’t look very much like ours, however.  The suburbs will be ghost towns, workers will get paid more in cash and less in benefits, and health care will either be self-paid (in the more libertarian future) or totally governmental (in the police-state future).

Business will be cut-down, streamlined, and transparent to a degree that no one can imagine right now.  I expect that the day-to-day dealings of all industries to be examinable by the government and the citizenry–sort of a “freedom of information act” for commerce.  Families are going to be larger (and not necessarily all hetero or monogamous).  They’re also going to be church-going–I expect that this long financial downturn will finally put the kibosh on the “brights” movement and most of the secular humanists.

So, you want to be rich in twenty years?  Figure out new industries that depend on lightning-fast reactions to the needs of large extended families and that operates in a totally moral manner.  That ought to do fine.

The Fed lowered its rate to 0% as part of the government’s continued plan to bastardize Friedman and Keynes to sacrifice long-term stability for short-term gains, and come up with a whole new way to screw up the economy. The market, with its scared and biased traders, rose 396 points today because that is what you do when the interest rates drop.

This allows us to arrive at the first lesson that I have gleaned from these few months. It has long been held that no one party, no one person can control a market. The information is diffused and individuals too concentrated to actually control. This was what the failure of socialism taught us. However, the market can be swayed and controlled through ideas, specific ideas that permeate the market. When they are good ideas, this is a good thing. When they are bad ideas, as the current market has shown us, it is catastrophic.

Free money means more money, and more money means inflation. A lot of inflation. The market may go up, but the market is denominated in dollars, so any “growth” that we will see will be effectively nothing. We are essentially adopting the Chinese model, which is premised on throw money at everything that the government feels is important, and hope that enough “stick” to make up for the incredible waste of government resources. This is a process that I have criticized in the past, but at the least the Chinese have a populace that are net savers and have a hard time spending due to their peg. For the United States, with their debtor citizenry, this is an even worse idea.

I was disheartened, although not surprised, to see President Elect’s choices for economic advisors. The Agent of Change picked the Stalwarts of the Status Quo and the Architects of the Bailout that Wasn’t. Being condemned to follow what has been done is no surer way to kill the economy, both here and abroad.

This is not a political question; it is a generational one. The progeny of the Greatest Generation may be condemned to being the worst. The turning points of our recent history will not be the election of Obama, as much as certain parties want it to be. It corresponds to the rise and fall of the interest rate the Dow Jones. The great events of history do not begin with a leader, it begins with poverty. These events are going to cause a hell of a lot of poverty.

Tom has foresworn, at least temporarily, his tendency to make dire predictions. I will pick up where he left off. The inflation that will result from this will more than offset any market gains created by the lower interest rates. All the political stuff that is enrapturing the general public will not be as important as they think. The credit market will not improve until the fundamental flaws are corrected, because even free money is not enough to clear the fear in the markets. And finally, there is going to be a drastic reorganization of the American workplace that will be painful and expensive. And delaying the obvious adjustment that will have to be made is just going to make it worse in the long run.

The scientific literature has shown that free markets fit best with human genetics. History shows the violence and inefficiency of attempts to mold human nature against its pre-loaded software. Not all human genes are the same. The composition of gene pools in the countries of the world depends on immigration, climate, geography, and a myriad of other factors. The existence of cross-country genetic diversity suggests that varying shades of free markets should be applied to the various shades of genetic pools. Some countries, like Singapore, properly fit their economic laws with their genetic predisposition for risk and free markets. Other countries, like Japan, have economic laws far freer than the population’s genetic tolerance for risk and economic freedom. The Circular Theory of Genetics and Economics shows the surprising closeness between Marxism and libertarianism in terms of the inefficiency of their fit with human genetics. The lower portion of the circle is a bowl of efficiency bounded by the European Welfare-State on the left and Modern American Capitalism on the right. This bowl represents the approximate range for all genetically efficient economic systems. Economic philosophers have always used abstract speculations on human nature as the basis of their proposed economic systems. Today we have objective scientific measurements of human nature and we should use that knowledge to precisely and scientifically craft economic laws tailoredto the diversity of human genetic pools – Genetic Capitalism.

The entire essay can be downloaded here.

He has a comment up today, that I wanted to submit to the Agora for discussion on Warren Buffett’s support for Obama:

HOW DID WARREN BUFFETT GET SO RICH?

He started with nothing, inherited nothing, made it all by his wits.  How?  By being uncommonly smart, sure, but also by being wise, which is different, and uncommonly thoughtful; uncommonly decent, which has attracted decency in return; by taking the long view and sorting out what’s important; and – crucially – by being a good judge of talent:  knowing which chief executives to bet on.

What does it say about Senator Obama that for the first time ever Warren Buffett has taken an active role in a modern Presidential election, hosting and headlining fundraisers to make Barack Obama our next chief executive?

What does it say about the urgency of the situation?

What does it say about Senator McCain?