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.
Saturday, January 24, 2009
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
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.
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.
Sunday, December 28, 2008
conrad black
The Editor:
On this day, the tenth anniversary of Conrad Black offspring, The National Post, I’m remembering the man’s current ordeal and I’d like share my thoughts, if not with the NP readership, at least with the editorial board.
I wonder if, when some three years ago those disgruntled Hollinger shareholders who asked the courts to help them get more money, had any idea of the events they would set in motion. And when the courts deemed Conrad Black’s management team to be evil and removed control from the majority owners, were these shareholders rubbing their hands in anticipation of huge profits now that the evil Conrad Black couldn’t get any more non compete payments? I wonder if those same shareholders now have any second thoughts about the wisdom of bring charges against Conrad Black, especially after seeing what kind of people the courts appointed to temporarily ‘mismanage’ the company. Its become rather easy to see that much of what has transpired since the Black management team was removed has not been of any benefit to the people who originally thought they were being short-changed.
Its also become obvious that the legal industry, both the court appointed directors and the other representatives from the legal system, have been very successful in filling their own wallets while emptying those of the shareholders and Conrad Black’s and making sure that very little actual justice was done.
Now, after confiscating as much of Conrad Black’s assets are they were able to, probably with the intent of limiting his ability to defend himself, the courts have sentenced him to serve 6 ½ years in prison for failing to share non compete payments with those envious Hollinger shareholders. So does that vindicate the launching of the lawsuit by Hollinger shareholders? Is justice being served by upholding their claim and penalizing Conrad Black?
I personally believe we have before us one of the most glaring examples of a legal industry completely out of touch with justice. The proof of this to be found in looking at the value of Hollinger stock since the courts took over. When Conrad Black was removed from control, the stock’s value plummeted. With this in mind, it becomes easy to see how the individuals that choose to buy any news publishing assets from Conrad Black would pay to keep him from re-entering as a competitor. It has always been obvious that non compete promises only needed to be extracted from one individual, Conrad Black, not from other Hollinger shareholders, so why should the undeserving get paid?
In the competitive world of newspaper publishing, the Black controlled Hollinger was considered the third largest newspaper chain in the world, a far cry from its insignificant status today. Clearly, no investors can be found who see the court-appointed opportunistic directors or the envy-riddled Hollinger shareholders as having any competence in the newspaper publishing field. I’m sure that if any members of that forlorn group, suggested they were prepared to publish anything, the competitors would laugh hysterically.
Despite the above, some twelve jurors considering that shareholders of Hollinger do have a legitimate claim to remuneration from the non-compete payments made to Conrad Black. Truth be told, even the company share values were based on Mr. Black’s ability to make newspapers profitable. Its easy to see that the financial community doesn’t agree with the jury and considers the remnants of Hollinger to be of rather insignificant value as compared to it worth before Mr. Black disappeared from the board of directors .
I cannot think of a more clear example, showing explicitly what ratio of value a good CEO has to a company in relation to the shareholders who just put up a little money. ‘Riding on the shoulders of giants’ comes to mind as an apt description.
But what of the legal system that laid the charges and encouraged a group of reason-challenged jurors to bring forth a guilty charge on Conrad Black? Is there no one to sit in judgment of the real thieves, the group of people who deliberately destroyed Conrad Black and in doing so, successfully destroyed the company and squandered the shareholder’s assets, all the while handsomely rewarding themselves, the huge tax-collector financed legal industry with the clout to impoverish anyone?
At this stage of the fiasco, I’d say the shareholders got what they deserved and only Conrad Black is paying any penalty. If the judge had sought to help the shareholders while penalizing Mr. Black, she’d have ignored giving jail time. She’d have ordered Conrad Black to manage Hollinger for the five years for a token salary of possibly a dollar a year, while only retaining his own shares and the profits from them. I’d say that’s probably the only way Hollinger shareholders would ever have gotten a financial return on their soured investment.
When he is released, Conrad Black will be some seventy years old and, thanks to Jean Cretien, without Canadian citizenship. If we want to do something for the man that started this paper, the only Canadian paper with which I have a good deal of agreement, each of us can lobby this government as hard as possible, to reinstate Conrad Black’s citizenship. We couldn’t add a better citizen to this country.
Gary Seinen
On this day, the tenth anniversary of Conrad Black offspring, The National Post, I’m remembering the man’s current ordeal and I’d like share my thoughts, if not with the NP readership, at least with the editorial board.
I wonder if, when some three years ago those disgruntled Hollinger shareholders who asked the courts to help them get more money, had any idea of the events they would set in motion. And when the courts deemed Conrad Black’s management team to be evil and removed control from the majority owners, were these shareholders rubbing their hands in anticipation of huge profits now that the evil Conrad Black couldn’t get any more non compete payments? I wonder if those same shareholders now have any second thoughts about the wisdom of bring charges against Conrad Black, especially after seeing what kind of people the courts appointed to temporarily ‘mismanage’ the company. Its become rather easy to see that much of what has transpired since the Black management team was removed has not been of any benefit to the people who originally thought they were being short-changed.
Its also become obvious that the legal industry, both the court appointed directors and the other representatives from the legal system, have been very successful in filling their own wallets while emptying those of the shareholders and Conrad Black’s and making sure that very little actual justice was done.
Now, after confiscating as much of Conrad Black’s assets are they were able to, probably with the intent of limiting his ability to defend himself, the courts have sentenced him to serve 6 ½ years in prison for failing to share non compete payments with those envious Hollinger shareholders. So does that vindicate the launching of the lawsuit by Hollinger shareholders? Is justice being served by upholding their claim and penalizing Conrad Black?
I personally believe we have before us one of the most glaring examples of a legal industry completely out of touch with justice. The proof of this to be found in looking at the value of Hollinger stock since the courts took over. When Conrad Black was removed from control, the stock’s value plummeted. With this in mind, it becomes easy to see how the individuals that choose to buy any news publishing assets from Conrad Black would pay to keep him from re-entering as a competitor. It has always been obvious that non compete promises only needed to be extracted from one individual, Conrad Black, not from other Hollinger shareholders, so why should the undeserving get paid?
In the competitive world of newspaper publishing, the Black controlled Hollinger was considered the third largest newspaper chain in the world, a far cry from its insignificant status today. Clearly, no investors can be found who see the court-appointed opportunistic directors or the envy-riddled Hollinger shareholders as having any competence in the newspaper publishing field. I’m sure that if any members of that forlorn group, suggested they were prepared to publish anything, the competitors would laugh hysterically.
Despite the above, some twelve jurors considering that shareholders of Hollinger do have a legitimate claim to remuneration from the non-compete payments made to Conrad Black. Truth be told, even the company share values were based on Mr. Black’s ability to make newspapers profitable. Its easy to see that the financial community doesn’t agree with the jury and considers the remnants of Hollinger to be of rather insignificant value as compared to it worth before Mr. Black disappeared from the board of directors .
I cannot think of a more clear example, showing explicitly what ratio of value a good CEO has to a company in relation to the shareholders who just put up a little money. ‘Riding on the shoulders of giants’ comes to mind as an apt description.
But what of the legal system that laid the charges and encouraged a group of reason-challenged jurors to bring forth a guilty charge on Conrad Black? Is there no one to sit in judgment of the real thieves, the group of people who deliberately destroyed Conrad Black and in doing so, successfully destroyed the company and squandered the shareholder’s assets, all the while handsomely rewarding themselves, the huge tax-collector financed legal industry with the clout to impoverish anyone?
At this stage of the fiasco, I’d say the shareholders got what they deserved and only Conrad Black is paying any penalty. If the judge had sought to help the shareholders while penalizing Mr. Black, she’d have ignored giving jail time. She’d have ordered Conrad Black to manage Hollinger for the five years for a token salary of possibly a dollar a year, while only retaining his own shares and the profits from them. I’d say that’s probably the only way Hollinger shareholders would ever have gotten a financial return on their soured investment.
When he is released, Conrad Black will be some seventy years old and, thanks to Jean Cretien, without Canadian citizenship. If we want to do something for the man that started this paper, the only Canadian paper with which I have a good deal of agreement, each of us can lobby this government as hard as possible, to reinstate Conrad Black’s citizenship. We couldn’t add a better citizen to this country.
Gary Seinen
Saturday, November 22, 2008
truth
Truth:
As human beings, the most significant problem we face today is the same problem all of our ancestors have faced throughout history - how can we be certain a particular thing is true or false. How can we know when we’re being misled?
Each of us, as individuals, must be able to see what to reject and what to accept in order to get the most out of life, to use our time to support things we won’t later regret, to avoid looking back at life and saying “I’d have done better if I’d realized “that” was nothing but a lie.”
Some of us are lucky enough to have parents who give much thought to truth and falsehood, who have consistent beliefs and pass their evaluative tools on to their children.
Other lucky members of society may, when going through school, meet an exceptional instructor who teaches them to reject all learning by rote, to question the validity of all things, especially that for which questionable proof is offered.
Largely though, the vast majority of people, myself no exception, fail to learn that many of the things we are taught early in life to be true, are in fact false. Some ideas (like santa claus) were never meant to be taken very seriously as the originator knew them to be false and was very aware that the society regarded them as false as well. These kind of lies aren’t real dangerous. The very dangerous ideas are those ideas believed to be true by the person feeding us the information.
The importance of learning a reliable method to determine truth can’t be overstated yet we will not, at present, be able to find a significant number of people who even agree on what is an appropriate method to determine the validity of an idea. Some will tell you to believe the bible. Some will say trust the experts. Some will say believe nothing.
For myself, the fog finally lifted after studying the philosophy of objectivism and learning that reality doesn’t lie. If facts observed in the real world are rejected to prove an argument then the argument is necessarily false.
As human beings, the most significant problem we face today is the same problem all of our ancestors have faced throughout history - how can we be certain a particular thing is true or false. How can we know when we’re being misled?
Each of us, as individuals, must be able to see what to reject and what to accept in order to get the most out of life, to use our time to support things we won’t later regret, to avoid looking back at life and saying “I’d have done better if I’d realized “that” was nothing but a lie.”
Some of us are lucky enough to have parents who give much thought to truth and falsehood, who have consistent beliefs and pass their evaluative tools on to their children.
Other lucky members of society may, when going through school, meet an exceptional instructor who teaches them to reject all learning by rote, to question the validity of all things, especially that for which questionable proof is offered.
Largely though, the vast majority of people, myself no exception, fail to learn that many of the things we are taught early in life to be true, are in fact false. Some ideas (like santa claus) were never meant to be taken very seriously as the originator knew them to be false and was very aware that the society regarded them as false as well. These kind of lies aren’t real dangerous. The very dangerous ideas are those ideas believed to be true by the person feeding us the information.
The importance of learning a reliable method to determine truth can’t be overstated yet we will not, at present, be able to find a significant number of people who even agree on what is an appropriate method to determine the validity of an idea. Some will tell you to believe the bible. Some will say trust the experts. Some will say believe nothing.
For myself, the fog finally lifted after studying the philosophy of objectivism and learning that reality doesn’t lie. If facts observed in the real world are rejected to prove an argument then the argument is necessarily false.
contractor dictionary
A CONTRACTOR’S DICTIONARY
(Courtesy of the Windsor Construction Association)
CONTRACTOR: A gambler who never gets to shuffle, cut or deal.
BID OPENING: A poker game in which the losing hand wins.
BID: A wild guess carried out to two decimal points.
LOW BIDDER: A contractor who is wondering just what he left out.
ENGINEER’S ESTIMATE: The cost of construction in heaven.
PROJECT MANAGER: A conductor of an orchestra in which every musician belongs to a different union.
CRITICAL PATH METHOD: a management technique for losing your shirt under perfect control.
STRIKE: An effort to increase egg production by strangling the chicken.
DELAYED PAYMENT: A tourniquet applied at the pockets.
COMPLETION DATE: The point at which the liquidation damages start.
AUDITOR: A person who goes in after the war is lost and bayonets the wounded.
LAWYER: A person who goes in after the auditors and strips the bodies.
(Courtesy of the Windsor Construction Association)
CONTRACTOR: A gambler who never gets to shuffle, cut or deal.
BID OPENING: A poker game in which the losing hand wins.
BID: A wild guess carried out to two decimal points.
LOW BIDDER: A contractor who is wondering just what he left out.
ENGINEER’S ESTIMATE: The cost of construction in heaven.
PROJECT MANAGER: A conductor of an orchestra in which every musician belongs to a different union.
CRITICAL PATH METHOD: a management technique for losing your shirt under perfect control.
STRIKE: An effort to increase egg production by strangling the chicken.
DELAYED PAYMENT: A tourniquet applied at the pockets.
COMPLETION DATE: The point at which the liquidation damages start.
AUDITOR: A person who goes in after the war is lost and bayonets the wounded.
LAWYER: A person who goes in after the auditors and strips the bodies.
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