Friday, January 30, 2009

water exports

Over the last however any years, British Columbia has been debating water exports with any number of people who applied for permits to fill tankers and send then off to a thirsty world. Most of these proposals involve parking the tanker near an ocean terminating river, hooking up a pipe to the supply and driving away when the tanker is full. When the tanker shows up where thirst guys are, the water is traded for money and off they go for another load.
I always thought of these schemes as a license to print money and well worth pursuing, but lo-and-behold was I in for a surprise. A cacophony of voices howled in protest, the loudest belonging to Maude Barlow. All sorts of reasons have been aired to prevent the export of water, and to me none of them make any real sense as we're talking about water that simply flows into the ocean. Does it make any difference to the ocean if the water makes a trip to California before it finally reaches the oceans? The water still makes it into the ocean sometime.
However, after some serious discussion over a couple of beer, we did figured out what the problem was - pollution. Think of this from a 'green' perspective. Here we have a product being shipped on the open ocean and, heaven forbid, the loaded tanker strikes an empty returning tanker and we now have an enormous spill. The true environmentalist recognizes the near impossibility of cleaning up the polluting spill. Now a normal human being might say water is water, what's the big deal, but that isn't how the environmental mind works. In their minds the water in the tanker has become a pollutant - the reason - its' been tainted with the profit motive.
Now you might think this is far-fetched and I'm seeing double ogres, but hear me out. As a example, think of Yellowstone National Park. Day after day, thousands of gallons of sulfur laden water bubble up out of the earth and, doing what gravity tells it top do, flows over the earth, into the Missouri river then the Mississippi and on to the gulf of Mexico.
Now if you had a business and dropped a tablespoon of sulfuric acid into the same river system the EPA would have a conniption. The local Sierra Club would write letters of condemnation and launch a lawsuit to get loot to cover everybody's perceived damages. The school teachers would get the eight years olds 'go public' with their newly learned anxieties. The television crew will be out in force filming geriatricly expired fish and claiming sulfur poisoning.
All it took was a couple of beer to finally see that to the goofy green environmentalist, profit = pollution. And Ben Franklin was right when he said, "Beer is living proof that God loves us and wants us to be happy".

Wednesday, January 28, 2009

jobs, work, effort

Have you heard the profound slogan "unemployment is not working"? That catchy sentence is usually followed by, "We demand more jobs". The two statements taken together, show clearly the ignorance associated with the meaning of the term "jobs".

And from the high level of unemployment in Canada we can deduce that few people really understand what is required to promote "jobs". Our political leaders make statements such as; "job sharing may be the only answer" and "the prosperity of the seventies is gone forever". No cure will ever come from people who make those kind of statements, statements that simply show economic ignorance.

Much of the confusion at the root of our unemployment problem stems from a misunderstanding of three terms or concepts. The terms effort and work must be clearly defined in order to understand the concept "job".

Let's begin with effort. Effort can be any kind of activity, mental or physical, that requires energy. Effort can be either productive or nonproductive, beneficial to our lives or detrimental. It can be work or play, both for ourselves or for others, but effort is totally self-generated. By that I mean, your effort can only be mentally directed by you.

Work is constructive effort, effort expended to support life. Work is a goal oriented and thought directed activity. And we all know when we are doing work for work is an activity that is distinctly different from play or exercise or entertainment.

The term job describes a type of work, work that someone else is willing to pay you to do. A job is an activity or a task that someone wants done and they are prepared to pay you to do that task.

Often the term job and occupation are interchanged, yet reason tells us this is not really true. One may have an occupation, but no job and one may have a job outside of one's occupation.

The term "job" is also incorrectly used to describe personal possession with regard to work. As a example, the phrase; "my job is ___" or "it's my job to ___". In actual fact, the owner of a piece of work is usually not the person being paid to do the work. This becomes very obvious if you quit a job, for the job doesn't stop. The boss simply hires someone else to finish the job.

There is still more confusion because jobs are often equated with the term duty. Many persons continue to fulfill a perceived obligation, sometimes after the pay stops and often after any pleasure for doing the task is gone.

Simply put, a job is nothing more than work or effort that is directed to satisfy another person. Your concern is payment, but a job appears when someone is willing to pay for time spent doing a particular piece of work. The prime concern of the person willing to pay for the work is always to get the work done or the product out.

Very few people comfortably accept this glaring fact. The prime concern of the person paying is not the economic well-being of the person employed. This is not due to any malicious or uncaring aspect in an employer's attitude - it's strictly reality. On a one-to-one basis this is easy to see. When you hire a person, say a plumber, your only concern is to get the job done, to get the toilet unplugged or the faucet to stop dripping. Someone who hires a thousand people concerns themselves with exactly the same thing, getting the product out.

Often needless personal devastation takes place when a man is fired or "his" job terminated yet jobs are terminated because of market conditions. To take personal offense at a market condition makes absolutely no sense.

The market is the sum total of all voluntary exchanges, all the trading that takes place in the entire world. The loss of a job means that an employer can't make money selling that particular effort on the world market. This may show a lack of accuracy on the part of an employer in assessing the market correctly and in desperation he cuts out work that costs too much. The market is refusing to pay.

A fact to keep in mind is that all persons pay on a voluntary basis. Be it product or work, everyone is faced with three choices. They can; (a) pay the price, (b) do the work or make the product themselves, and (c) do without.

If an employer is unable to sell our effort at a profit , we must look to the market ourselves and find a place where we can exchange our effort for the things we require for life. We will have to sell a product or our time ourselves. Selling directly into the market is the fastest way to learn just how much your time is valued by everyone else, and establishes a realistic view of personal worth.

It's the willingness of exchange that is too often forgotten. Pay does not come from unwilling employers. Expecting too much pay for work is the cause of unemployment.

Most people forget that effort is individual and self-directed. It requires thought and our effort, if constructive is called work. Can we wait for someone else to solve our problems, especially when the cure probably must come from within ourselves? Our effort is really the only commodity that we do control.

On a daily basis, time is the single commodity we all receive equally. Our personal sense of worth, our egos, depend on personal accomplishments. It is the effectiveness of our time utilization that governs our personal satisfaction with life. The power to use our time constructively comes from our own minds, the rational thinking process all of us are capable of following if we try.

Yes, unemployment is not working, but to demand a job is to demand a willingness beyond our control, a mythological impossibility. Recognizing that exchange is voluntary is the first step back to the affluence that we had and yes, can have again. Work is truly unlimited and does not need to be shared. The market supports anyone that offers a value for sale, but only if the price is right. Jobs are plentiful when a person's efforts are valued. The market is there and the choice is up each of us.

Saturday, January 24, 2009

The Rational Capitalist: Houses Are Not Investments

The Rational Capitalist: Houses Are Not Investments
If, as you imply, houses are not investments then my definition of investment differs from your. I can see the consumable rule applying to a hamburger but not to a 'good' that retains value in the market place. The house, while possibly of eroding value, retains value to other purchasers. In that sense, I see a house to be a money substitute, something that an individual may choose to invest time and energy into rather, especially when faced with fiat currency, than something akin to a Madoff investment scheme.
Would you grant that to a builder or a developer, a house is an investment? In the sense that an Ipod is the reason we build the factory, a capitalist will purchase the necessary 'bricks and mortar' to build a factory to produce a consumer good, anticipating a future return on the original investment. In that sense, I can see the house to be rather similar to a few crates of Ipods. Do you consider the investment characteristic to end when something is not able to produce futher goods?
If I choose to build a hotel with my 'bricks and motar' does the hotel become an investment? If that is the case, renting the house to someone should also recatigorize the house as an investment.
Confused.

Tuesday, January 13, 2009

budget advise

The Prime Minister, The Honorable Stephen Harper:

Please consider this, my voice as to what I consider to be appropriate actions for my government to take, actions to constructively address the current financial instability.

I support a free market solution to the problem. I hold the viewpoint that the country is far better off with less monetary interference by government. I see monetary intervention by the government as an attempt to counter the decisions already made by the market and that the intervention will only exacerbate the problems in the long run. The market, being the response to the accumulated decisions of every acting human being, remains beyond the control of the government and the best that could be done is to help people make wiser decisions.

Firstly, we need to agree that a viable economy is not an accident. The combined, rational, productive actions of a lot of people add up to make a sustainable economy. The current crisis developed because poor decisions were made. We have blamed investment banks and other financial players but these people made their decisions based on the rules that are in place in our society. The rules are made by our governments, mainly to channel the efforts of the citizens into directions that government officialdom deems to be best and when the results don’t measure up to the expectations, the rules are to blame, not the people.

I have yet to see government officials acknowledge any responsibility for making poor rules and that is a complete abdication of truth and responsibility. I cannot see the end of the fiscal debacle until the true causes are openly identified and addressed.

The inappropriate American administration response to the fiscal dilemma is a wasteful path I urge my government to not follow. The billions of dollars distributed in an irresponsible, cavalier attitude must be repaid by the common citizen in taxes or reduced purchasing power. It is criminal to see tin-pot dictatorship tactics taking place in what was once the greatest, freest country in history.

Clearly, the money system is in serious trouble. Governments all around the world have taken on an ever increasing burden of obligations in order to collect votes. Most people know, because there is insufficient revenue from taxation, governments have resorted to fiscal manipulation to make up the shortfall. The less informed people support the entitlement programs because they have been convinced someone else will supply the funds. The wisest people know better and make certain the bulk of their wealth is inaccessible to the government. If this wealth is ever to be available for investment in our country again there are a number of things the government must do.

The government must stop spending taxpayer’s money to prop up institutions and organizations the taxpayer will not fund voluntarily. By that I mean everything from the CBC through to Bombardier. That also includes any bailout for the auto industry.

The government must reduce the number of restrictions it places on business activity. The recycling mandates and other useless environmental restrictions are both costly and discourage the development of resources. Investment discouraging rules drive mobile wealth out of the country.

The government must stabilize the value of our currency. The erratic float of our dollar for the past year has shown us just how unhealthy the investment climate has become. Rational business decisions are impossible without financial and regulatory stability. I realize the Canadian dollar is rather a small time player in the world of currency but I believe that the government is not without power to stabilize our own dollar. Below is a suggestion made by Walter Williams, economic professor, George Mason University, that, if implemented would serve as a solid start.

“ It is not wise for us to permit a few people on the Federal Reserve Board to have life and death power over our economy. My recommendation for reducing some of that power is to repeal legal tender laws and eliminate all taxes on gold, silver and platinum transactions. That way there would be money substitutes and the government money monopoly would be reduced and hence the ability to tax — some people would say steals from — us through inflation.”

Clearly, if we are to retain an affluent society, something must be done to repair the world’s financial system, something beyond the scope of this letter. As a member of the G7, Canada has a voice and I would urge the government to consider the work of Judy Shelton, documented in Money Meltdown, as a thoughtful starting point for a return to financial sanity.

The paper dollars printed by the government are IOU’s on the goods and service offered for sale in this country. The people who produce those goods and services are the only people entitled to hold those dollars, the rest are counterfeit claims to goods and services that have not been earned. If we are to consider the long term viability of Canada, the inflated printing of money must stop and all distributed entitlements must be financed out of taxes. The budgets must balance.

The role of government needs to be redefined. The present mind-set, that the purpose of government is to redistribute the wealth of the land into the hand of all who need it, is wrong and impossible to sustain. The government must provide an atmosphere of trust that investments will be honoured, physical force and fraud will be punished and promise to let the peaceful citizens decide for themselves, how they choose to spend their lives.

The best role is for the government to thoroughly review all the restrictions that have been imposed on the activities of the citizens of this country. By rationalizing laws, a wealth of funding that is now absorbed in the court system could be better employed for economic activity to enrich the lives of people presently defending themselves from bad laws. The various human right commissions come immediately to mind.

I am aware that my suggestions do not coincide with the strident voices urging the government to spend its way out of the financial quagmire but anyone prepared to think, knows the way out of a debt crisis is not by taking on ever more debt. I believe a clear appeal to the thinking public can overcome all the irrational arguments in favour of further destruction of the wealth of our country.



Gary Seinen, seine44@gmail.com

Tuesday, January 6, 2009

free markets

I was having a thought the other day and concluded that a person who believes in free markets as a solution to economic problems, will inevitably develop a positive outlook on life.

An integrated view of how a free market works means that one makes the fundamental assumption that each individual has a better idea of what they want than some central controlling body. Now if an individual can have control of their own actions but are denied the ability to control the actions of someone else, we're going to see a different world. Things never get better when everyone is focused on what someone else wants and with each person's limited knowledge of what is best for the other guy, forces the other guy to accept their standard.

On the other hand, the people who what to fine tune our society can only wind up frustrated. Its never possible to find a leader who give exactly what some meddler thinks is the right amount or form of meddle. Even when the so-called right amount of meddling is proposed the victim often squirts out from under the dominating thumb and doesn't do what they were supposed to do. So the controller usually draw the conclusion that the leaders are corrupt, that his fellow man is ungrateful or that the world just isn't fair.

In the end, a believer in free market realizes that economic problems tend to disappear when the intervention is reduced while the controllers remain forever frustrated as nothing ever seems to work the way they believe it should.

The free marketer's biggest problem remains cutting through all the bs and selling capitalism.