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How Inflation Ruined A Chocolate Bar

Trump “Exploded” At Media Execs During Off-The-Record Meeting: “It Was A F–king Firing Squad”

Latest Project Veritas Bombshell: Undercover Journalist In Full Burka Offered Huma Abedin’s Ballot In NYC

While Media Obsesses Over Pussy-Gate, US Debt Soars To $19.7 Trillion

How Inflation Ruined A Chocolate Bar

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Now that the presidential election is finally over, can we talk about something that actually matters?

I’m referring of course to Tobleronegate, meaning the uproar surrounding the Swiss-based (but US-owned) chocolate company, Mondolez International. The company has widened the gaps between the segments of its iconic chocolate bar, reducing its total volume by some 10 percent. Although the reaction has something of an Old Coke-New Coke air to it, one can easily see it as a sign of the inflationary times, an effect of worldwide money creation coordinated by the leading central banks, with Toblerone being just one of many victims.

The economics of the decision shouldn’t surprise an actual student of economics. Since inflation is always and everywhere a monetary phenomenon, and since the world’s central banks have been pumping new money into the global economy at unprecedented rates for several years, we should expect an upward pressure on prices. In a Facebook post, Toblerone explained that it was forced into changing its product in response to “higher cost of numerous ingredients,” adding that

…we had to make a decision between changing the shape of the bar, and raising the price. We chose to change the shape to keep the product affordable for our customers, and it enables us to keep offering a great value product.

Statements such as this cause Toblerone to become, unwittingly, a case study for how firms in competitive markets respond when monetary inflation raises their costs of production. When that happens, firms are less able to pass the cost on to consumers in the form of higher prices because if they do, they face a strong likelihood of losing market share and revenues. Instead, these firms cut back in terms of volume, size, and portions.

We see this all the time. Have you been to a restaurant lately where the menu prices haven’t seemed to change but the portions of food on your plate has? Or opened a bag of chips that hasn’t fallen in size while the volume of chips inside has? Or consumed a product of lower quality than you remembered in less inflationary times because its producer was obligated to change ingredients to break even?

The fact is, Toblerone can’t raise its prices willy-nilly due to the many substitutes available to consumers. Critics claiming otherwise ignore this common side effect of inflation in competitive industries, a phenomenon that especially has applied to candy markets in recent years.

That said, the public’s response to the new Toblerone ranges from the funny to the bizarre. One person photoshopped a KitKat bar from four sections to two, with a large gap in-between. Others are showing that the new Toblerone gaps can be used for makeshift filing systems suitable for toast or electronics. There is even talk that Toblerone will have to change its intellectual property strategy given that its iconic shape has been changed so drastically. IP lawyers see gold in “them thar gaps.”

Then there’s a Brexit angle base, from what I can see, on the argument that (1) some people said bad would come from Brexit, (2) Brexit happened, followed by, (3) Toblerone’s new shape, which obviously then means, (4) Brexit ruined the candy bar. Or something like that. In response, Toblerone claims the change was planned well before Brexit.

We can all agree Toblerone underestimated consumer responses to its decision to reduce the volume in one of its signature candies and this, in itself, is not a big deal. One of the reasons why the free market system isn’t perfect is because the firms that comprise it often make mistakes. Just the same, what makes this system superior to the alternatives is the ability of firms to identify and act on those mistakes, whether by themselves or their competitors. New Coke didn’t last long. GM no longer produces Hummers. Meanwhile, my local post office plugs away, unchanged from what I remember it being 25 years ago.

Toblerone may announce it made a mistake and go back to the previous shaped candy, albeit at a higher price. Or it might revert to the previous shaped candy but at a smaller volume. Perhaps it will look for inferior ingredients, making it the Swiss chocolate equivalent of corn syrup soda. Yuck.

But wouldn’t it be great if, instead, Toblerone turned this incident into a teaching moment for its devoted customers? If it used its social media channels to remind them of the virtues of hard money and the costs of fiat money? If it helped Toblerone aficionados see the relationship between gaps in their candy to mainstream monetary fads that help bring them about?

It was rare but not uncommon for firms to make such arguments during the inflationary 1970s. It would be even more satisfying than good Swiss chocolate to see it again.

The Narrator @ December 1, 2016

Trump “Exploded” At Media Execs During Off-The-Record Meeting: “It Was A F–king Firing Squad”

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Earlier today we reported that in a “summit” organized by Trump’s campaign manager Kellyanne Conway, executives and anchors from the major US media outlets, including CNN president Jeff Zucker, ABC News president James Goldston, Fox News co-presidents Bill Shine and Jack Abernethy, and NBC News president Deborah Turness, visited Donald Trump at his Trump Tower penthouse for an off the record meeting.

Courtesy of the Post, we have a complete list of the participants at the Trump media meeting: the hour-long powwow included top execs from network and cable news channels. Among the attendees were NBC’s Deborah Turness, Lester Holt and Chuck Todd, ABC’s James Goldston, George Stephanopoulos, David Muir and Martha Raddatz, CBS’ Norah O’Donnell John Dickerson, Charlie Rose, Christopher Isham and Gayle King, Fox News’ Bill Shine, Jack Abernethy, Jay Wallace, Suzanne Scott, MSNBC’s Phil Griffin and CNN’s Jeff Zucker and Erin Burnett.

The contents of what was discussed were initially unclear.

Wolf Blitzer

Now, according to the Post, we learn that the President-elect “exploded at media bigs in an off-the-record Trump Tower powow on Monday.”

It was like a f—ing firing squad,” one source told the Post.

According to the Post’s recound of the conversation, “Trump started with Jeff Zucker and said I hate your network, everyone at CNN is a liar and you should be ashamed….”


Jeff Zucker (left)

“The meeting was a total disaster. The TV execs and anchors went in there thinking they would be discussing the access they would get to the Trump administration, but instead they got a Trump-style dressing down,” the source added. A second source confirmed the encounter.

The Post adds that “the meeting took place in a big board room and there were about 30 or 40 people, including the big news anchors from all the networks…”

“Trump kept saying, ‘We’re in a room of liars, the deceitful dishonest media who got it all wrong. He addressed everyone in the room calling the media dishonest, deceitful liars. He called out Jeff Zucker by name and said everyone at CNN was a liar, and CNN was network of liars.

“Trump didn’t say Katy Tur by name, but talked about an NBC female correspondent who got it wrong, then he referred to a horrible network correspondent who cried when Hillary lost who hosted a debate – which was Martha Raddatz who was also in the room.

“Gayle did not stand up, but asked some question, ‘How do you propose we the media work with you?’ Chuck Todd asked some pretty pointed questions. David Muir asked how are you going to cope living in DC while your family is in NYC? It was a horrible meeting.”

Amusingly, since the meeting was off the record, meaning the participants agreed not to talk about the substance of the conversations, it means they will most likely be unable to confirm or deny the Post’s report. It also means that if indeed Trump was as confrontational as reported, that the conventional war between the various US media organizations and Trump is about to go nuclear.

The Narrator @ November 21, 2016

Latest Project Veritas Bombshell: Undercover Journalist In Full Burka Offered Huma Abedin’s Ballot In NYC

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As democrats and George Soros continue to funnel millions of dollars into lawsuits to fight voter ID laws around the country, Project Veritas continues to reveal just how simple it is to take advantage of the current system to commit voter fraud.  The latest example comes from New York City as an undercover Project Veritas journalist walks into a polling station wearing a full burka and requests the ballot of one Huma Abedin.

Election Official:  “But your name is not in the book.  For some reason it’s not here, but that doesn’t mean you can’t vote by paper ballot.  You just can’t vote by machine.”

 

Project Veritas Journalist:  “So I can vote as Huma Abedin, but just with the paper ballot?”

 

Election Official:  “Whatever you want.”

 

Of course, this latest example comes after New York City’s Commissioner of the Board of Elections, Alan Schulkin (D), was caught on a secret video slamming Mayor Bill de Blasio’s municipal ID program as contributing to “all kinds of fraud” — including at the polls.  Within the video, Schulkin parts ways with the views of many in the Democratic party calling for voters ID laws saying “there is a lot of voter fraud.”  At one point, Schulkin even admits that campaign officials bus minorities from “poll site to poll site” so they can vote multiple times.

Here is a summary of some of the key comments from the NY Post (video below):

“He gave out ID cards, de Blasio. That’s in lieu of a driver’s license, but you can use it for anything.  But they didn’t vet people to see who they really are. Anybody can go in there and say, ‘I am Joe Smith, I want an ID card.

 

“It’s absurd. There is a lot of fraud. Not just voter fraud, all kinds of fraud . . . This is why I get more conservative as I get older.”

 

“Voters? Yeah, they should ask for your ID. I think there is a lot of voter fraud.  You know, I don’t think it’s too much to ask somebody to show some kind of an ID . . . You go into a building, you have to show them your ID.”

 

“They bus people around to vote . . . They put them in a bus and go poll site to poll site.”  Asked which neighborhoods, Schulkin said, “I don’t want to say.”  When the undercover mentions black and  Hispanic neighborhoods, Schulkin responded, “Yeah . . . and Chinese, too.”

 

The Narrator @ November 7, 2016

While Media Obsesses Over Pussy-Gate, US Debt Soars To $19.7 Trillion

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One of the things that caught my attention this morning was that the US government’s debt level has soared to just a hair under $19.7 trillion.

To give it some context, that’s up over $170 billion in just eight business days.

It’s almost as if Barack Obama is intentionally and desperately trying to breach the $20 trillion mark before he leaves office in January.

Of course, this hasn’t been reported anywhere because the media is too busy pretending to be shocked that Donald Trump is a womanizer.

And yet the debt is a much, much bigger story… though admittedly one that is far less entertaining.

The election is merely a fight over who gets to be the band conductor while the Titanic sinks. And the debt is precisely the reason for this.

Total US public debt has skyrocketed over the last eight years by $9 trillion, from $10.6 trillion to $19.7 trillion.

And in the 2016 fiscal year that just closed two weeks ago, the government added a whopping $1.4 trillion to the debt, the third highest amount on record.

Plus, they managed to accumulate that much debt at a time when they weren’t even really doing anything.

It’s not like the government spent the last year vanquishing ISIS or rebuilding US infrastructure. They just… squandered it.

Now, Nobel Prize-winning economist Joseph Stiglitz says we shouldn’t worry about America’s prodigious debt, and anyone who fusses over it doesn’t understand economics.

Stiglitz claims that we wouldn’t judge a private company like Apple based solely on its debt.

We’d look at other factors like assets, income, and growth before making an assessment of the company’s financial health.

And he’s right.

Singapore, for example, is a country with an extremely high level of debt. At first glance, it looks dangerous.

But if you dive deeper into the government’s balance sheet, you see an enormous abundance of cash reserves.

So taking into account just its cash assets, Singapore has absolutely ZERO net debt.

The US, on the other hand, is not in this position.

The Treasury Department publishes regular financial statements detailing its income, expenses, assets, and liabilities.

You already know the income numbers– the government loses billions of dollars per year, and the trend is negative.

As for its balance sheet, the government reports just $3.2 trillion in assets against $21.4 trillion in liabilities, for a NET position of NEGATIVE $18.2 trillion.

Now, when we’re dealing with trillions, it’s clearly not an exact science.

There are many economists who argue that the federal highway system, military, and federal tax authority should count as “assets” that are worth trillions of dollars.

Maybe so. But to be fair, one should also count the trillions of dollars of repairs needed on the highway system as liabilities.

Or the trillions more in cost of wars. Or the $40+ trillion in unfunded liabilities from Medicare, Social Security, etc.

It’s also important to note that America’s debt is growing at a far quicker rate than its economy.

When President Obama took office, US public debt was about 73% of GDP. Today it’s 105%. So even as the economy has grown, the debt has grown much faster.

chart

Any way you look at it, the US government is already insolvent, and its situation is becoming worse.

This leaves essentially two options.

We can choose to willfully ignore this obvious trend and delude ourselves into thinking that the continued expansion of US debt will forever be consequence-free;

Or, we can acknowledge the tiny possibility that maybe, just maybe, there may be some adverse consequence, and plan accordingly.

That’s the great thing about risks– we can take out insurance to protect against their consequences.

That’s why we have fire insurance to protect our homes, life insurance to protect our families.

Of course, there is no policy from Met Life or GEICO which will protect you from capital controls, a default on Social Security, or Global Financial Crisis 2.0.

Yet there are countless options to protect against these consequences.

The premise is simple: if your country is broke, don’t keep 100% of your assets there.

If your banking system is precariously illiquid and questionably solvent, don’t keep 100% of your savings there.

Most of all, it never, ever hurts to have a Plan B and give yourself additional options.

For example, you may be able to take some steps to legally reduce your tax bill; move some funds to a safer, better capitalized bank abroad that pays a higher rate of interest; or obtain a second passport based on your grandparents’ Irish or Polish nationality.

It’s hard to imagine that you’ll be worse off for having taken any of these steps.

And like any great insurance policy, these steps not only protect you against risk, but also give you the chance to make more money and prosper.

(That’s why the ultra-wealthy often invest in insurance policies as an asset class.)

Having a Plan B doesn’t mean hiding in a bunker with a tin-foil hat. Anyone expecting the end of the world is going to be waiting a very long time.

But taking some risk off the table is something that smart, rational people do, especially in light of such overwhelming data.

Submitted by Simon Black via SovereignMan.com,

The Narrator @ October 13, 2016

Professor Slams “Special Snowflakes” Living In “Fantasy World”

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‘People now experience the entire world as a form of bullying’

The political correctness movement that has swept college campuses, corporate America and mainstream life can be traced back to a few psychological trends.

Howard Schwartz, professor emeritus of Oakland University, has for years studied the psychology underlying political correctness, and in his new book Political Correctness and the Destruction of Social Order: Chronicling the Rise of the Pristine Self, he offers some clarity on why the term “snowflakes” is now synonymous with college students today.

Schwartz, who taught classes in social and behavioral science within its business school, said the term stems from what he calls “the rise of the pristine self.”

Schwartz writes in the book that “this is a self that is touched by nothing but love. The problem is that nobody is touched by nothing but love, and so if a person has this as an expectation, if they have built their sense of themselves around this premise, the inevitable appearance of the something other than love blows this structure apart.”

angry.Shutterstock

He added in his interview that “the oversensitivity of individuals today, including political correctness and microaggressions, all stem from this idea that people operating under the notion of the pristine self view you as evil because you are showing them something other than love.”

Schwartz points to the rise of helicopter parents and capitulating campus administrations as contributing to this phenomenon.

“People now experience the entire world as a form of bullying. The helicopter parent protects the children from real dangers but also fantasy dangers. These precious snowflakes are the children of political correctness, their parents and schools lead them to believe that the world is perfectly moralistic — they don’t live in the real world, it is a fantasy,” he said.

Schwartz said the pristine self is a sort of narcissism – individuals who regard themselves as pristine selves cannot handle the unlovingness of the world, even if it manifests itself in indifference rather than malice.

To them, everything is an act of offense.

Snowflake.Shutterstock

“The university is the setting in which this narcissism is nurtured and the university becomes a sort of protective figure. Universities have become maternal institutions in which the patriarchy, embodied within any authority, is hated,” he said. “This phenomenon is developing at corporations as well.”

Schwartz said political correctness issues will pose great difficulty for organizations in the future.

“Weber famously discussed the impersonality of organizations, and people have to know that organizations are places where they are not necessarily outwardly loved. Their jobs are where they are going to have a hard time,” he said.

“The one exception is certain social justice jobs, because they give you work that insists in hating the patriarchy and perpetuate political correctness as right and good,” he said, but added “we can’t have an economy based off of these, though.”

At the end of the book’s introduction, Schwartz sums up his project by noting “there is clearly an element of irrationality in political correctness. It is a form of censorship without a censor; we impose it on ourselves. Yet, it keeps us away from the reasoned discussion of social issues which everybody can see are important, consequential, and desperately in need of wide-ranging analysis. It does so through an emotional power that is rarely gainsaid and which anyone can see is ultimately against everyone’s interest.”

He told The Fix he does believe the tide is turning away from political correctness, however, and points to the presidential election campaigns as evidence.

“The fact that we have Trump campaigning as the ‘anti-political correctness’ candidate is really interesting,” Schwartz said. “It shows how far we have come and that this movement has lost control of itself.”

*  *  *

As we explained previously..

Your Feelings Are Largely Irrelevant

20151114_crybully

Seriously, nobody who has already graduated college cares about your feelings. That means that when you complain to your boss because your co-worker mis-gendered you, he’s probably not going to bend over backwards to bandage your wounds. Given feelings are entirely subjective in nature, it’s completely unreasonable to demand everyone tip-toe around you to prevent yours from being hurt. The reality is that people will offend you and hurt your feelings, and they won’t stop to mop up your tears because they shouldn’t have to. Learning to accept criticism, alternative viewpoints, and even outright insults will make you happier in the long run than routinely playing the victim card.

The Only Safe Space Is Your Home

111315-RickMcKee2

No matter where you go in life, someone will be there to offend you. Maybe it’s a joke you overheard on vacation, a spat at the office, or a difference of opinion with someone in line at the grocery store. Inevitably, someone will offend you and your values. If you cannot handle that without losing control of your emotions and reverting back to your “safe space” away from the harmful words of others, then you’re best to just stay put at home. Remember, though: if people in the outside world scare you, people on the internet will downright terrify you. It’s probably best to just accept these harsh realities of life and go out into the world prepared to confront them wherever they may be waiting.

Submitted by Kate Hardiman via TheCollegeFix.com

 

The Narrator @ October 12, 2016

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The Narrator @ October 11, 2016

Socialism Explained (In 1 Cartoon)

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Sooner or later, you run out of other people’s toilet paper…

The Narrator @ October 5, 2016

Anyone who’s interested in true intellectual pursuit shouldn’t be afraid of unorthodox engagements.

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Until recently, American political culture settled into a comfortable middle ground on matters of race. People knew what to say and how to say it, more or less. It was all very polite. Everyone obeyed the rules. This way you could stay out of trouble and avoid one of the most devastating accusations that could derail your career: the claim that you said something racist. If the claim sticks, there is no forgiveness; there is only a lifetime of suffering.

Well, that polite truce was never a consensus; it was a coverup. And it is over. The proof is everywhere in evidence, not just among the Internet trolls who proclaim themselves champions of the white race.

Last week, I decided to attend my first-ever Black Lives Matter protest. This protest was in my home city of Atlanta. It was titled “Atlanta Silent Protest” and held downtown at Lenox Mall and later at Peachtree Center station next to the Atlanta detention center. It was, shall I say, an interesting experience. I won’t chalk this up as representative of the entire movement, but this one in particular was without a doubt a black supremacist operation.

Everything was focused on devaluation of non-black aspects of society. There were accusations of black police officers being race traitors, and chilling calls for boycotts on non-black businesses and community ostracism of Korean shop owners and white residential occupants. During the protest, they even physically removed non-black (specifically white) allies from the support circle. White people had to migrate to the sidelines, because…I guess that’s how you help heal race relations.

But even though I was not really in support of their (frankly, racist) demands and even less so of their activism tactics (blocking traffic is stupid), I still managed to have a discussion with them. Expressing why I believe collective black investment in industry would have a much more effective influence in balancing positions of power of black communities compared to collective black protest of capitalist enterprise.

I don’t know if I would say it was mutually productive, but it’s good to hear these ideas firsthand without the fearful cloak of political correctness.

Let Everyone Speak

So, yes, racism is finding it’s way back into public discussion. And being a black man, you may find it strange that I’d say this, but it is better if ideas can be expressed rather than be suppressed.

Racial supremacists for a long time have been a taboo demographic among mainstream political discourse. In part, their absence was due to the lack of market demand for their opinions. But a much larger contributing factor was that they have been the target of ideological sanctions which have barred them from academic institutions, political office, and even private clubs and companies. The activists in Black Lives Matter feel this, and so do many white people.

The White Supremacists Too

In a similar way, the white supremacists or white nationalists have found a new home in what is known as the Alt-Right. To be sure, I’m not trying to strawman the Alt-Right, and I grant  many of its mainstream supporters believe in cultural superiority rather than racial superiority. But there are definitely some elements within the movement that advocate public policy intended to ensure racial Aryan purity and eugenics via state operations.

The other day I actually called into an Alt-Right webcast called The Radical Agenda. It is a provocative, adult-rated show discussing current politics, national socialism, “race realism,” anti-leftism and other right traditionalist ideas in an intentionally controversial format. We briefly discussed the actions of advocating white nationalism and why the host feels discrimination based on genetic heritage is a necessary tactic to preserve the core of the Western idea of civilization.

Contrary to what you might have assumed, it wasn’t a back and forth throwing of racial slurs and demeaning epithets. Again, I wouldn’t necessarily say it was particularly productive either, but it was a rational exchange of ideas.

Think of it: a black individualist libertarian had a respectful exchange with a white nationalist supremacist. This has got to be a good thing. For so long we’ve been told to avoid these people because they’re guilty of wrongthink and bad overall. But this isn’t elementary school. Anyone who’s interested in true intellectual pursuit shouldn’t be afraid of unorthodox engagements. You shouldn’t be afraid of talking to “bad people” or unpopular schools of thought.

Racists Need Free Speech as Much as Anyone

We all know that racism exists. As a collectivist and usually statist perspective, it is an ideology that made a huge showing in the course of the last hundred years, often with violent and devastating consequences. If we wish to avoid that fate again, it is in all our interests to discover why these people hold their racist views.

For a long time, these opinions have been relegated to evening Klan meetups in rural dive bars or radical African-American studies classes. We’ve enacted a quasi-probationary status against them, and this doesn’t help further intellectual development in society.

Racists are here; they’re in our lives on a day to day basis. Many say that racism is a driving force of politics today, and increasingly influential in social media, commerce, and government. But so long as we prevent them from being able to express (not execute, but express) their ideological conclusions and explanations for holding them, we’re doing ourselves a disservice.

Free speech is essential to freedom itself.

This may be difficult to accept, but in order to heal race relations, or at the very least get a proper understanding of why they’re so fractured, racist ideas need to be a part of the discussion. Banning accounts and passing suppressive laws against problematic speech won’t help us. Pretending everything is okay in an artificial echochamber of multicultural utopian cognizance doesn’t change the world we constantly complain about. It only shields us from uncomfortable truths that we may need to realize about ourselves and our fellow human beings.

* * *

Taleed J. Brown hosts the popular YouTube channel “That Guy T“.

Submitted by TJ Brown via The Foundation for Economic Education,

The Narrator @ September 28, 2016

The Matrix Exposed

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I define corporatism as an economic model (such as our existing) thatprioritizes short term profit maximization above everything else even consuming all other aspects of society to attain that goal.  Now I try not to simply opine on matters I discuss but attempt to substantiate my claims with objective quantitative analysis.  And yet it amazes me the number of ‘experts’ and otherwise out there that don’t just disagree with me but quite aggressively take exception to my claims.

What is really fascinating to me is that so many stringent supporters of corporatism honestly believe they are proponents of capitalism.  And it is for them that I’ve set out to unleash the iniquitous truth with such clarity so as to finally sever their misplaced loyalties to those false authorities who would have them not only believe but defend that the system is, in fact, what ‘They’ say it is.

Now before we go on, I must warn you there is a potential risk lying somewhere between jest and certainty that you will never see the world the same way again.  And so if this is something that will cause you a sense of unending doom then perhaps best to click over to CNBC.  And so….

“This is your last chance. After this, there is no turning back. You take the blue pill—the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill—you stay in Wonderland, and I show you how deep the rabbit hole goes. Remember: all I’m offering is the truth. Nothing more.”

Recently I provided some charts that show Wall Street profits up some 800% over the past 30 years while over that same period median weekly earnings for the American worker have risen about 9%.  The point of this was not to make a moral judgement about central bankers (I’ll leave that to you), but to highlight the fact that policy objectives are best understood through policy results.  Now in today’s world of continuously updated news, facts and figures it becomes almost impossible to gauge real progress.  We rarely ever hear about YoY results anymore let alone 5 year or 10 year results.

Our standard of measure is relative to yesterday or at most last quarter.  This allows the artistic freedom of seasonality adjustments.  You see YoY results don’t require seasonal adjustments and that means the raw figures would have to be exposed.  And well, that is a dangerous proposition for any government office or agency.  But by keeping us focused on a new individual leaf each day they have prevented us from noticing the forest has burned down around us.

So take a step back with me and let’s look at the long term results to see exactly what the policy objectives have and continue to be.  What we are about to see is that for those not already in retirement and especially for those just entering the real economy today the economic future is menacing and most will not survive it.

Now the subject of trade agreements always seems to elicit some very intense opposition to my own views.  My claims have focused around the concept that so called Free Trade Agreements are anything but.  These international trade agreements have two basic objectives.  First is to create a cost arbitrage while negating the high risk proposition of undeveloped economies that naturally exists in a free market.  Second is to protect the cost arbitrage from tariffs when targeting consumers back in developed economies.  That’s really it.  If you could lock those two objectives up on the back of a napkin the corporate interests would be happy for our legislators to sign it.

I’m about to prove that these trade agreements are the very essence of corporatism and together with fiat money have destroyed the natural self sustainment of capitalism through the requirement of private and public debt. In doing so corporatism has sabotaged the vast majority of American households thereby eradicating the capacity for economic growth.  Leaving a tremendously precarious situation for those whose futures are not yet secured by fortune.

Note that labour cost arbitrage is not a real competitive advantage because it only works if government legislates away the naturally occurring free market risk.  That is by definition, not a free market concept.  So please, let’s stop calling these trade agreements ‘Free Trade’.  And now think about a true capitalism cycle – Investment/production requiring profit, profit requiring consumption, consumption requiring income and income requiring investment – with only those parametres could firms profit if all firms implemented a labour cost arbitrage strategy?  Well let’s quickly run through it.

Imagine all CEOs replace their domestic workers with cheap foreign workers in hopes of increasing profit.  A trade agreement is put in place to negate the higher risk of their foreign capital investment and to ensure no tariffs are placed on products when they sell back into the domestic consumer market.  So all firms build products overseas, ship them back to the US and put them on the shelves of Walmart.

So far everything is looking good.  We have the Investment/production stage and now just require the consumption stage to realize profits so we can start the cycle over again.  However, in our capitalism cycle it appears that consumption requires income yet all CEOs replaced domestic income with cheap foreign income in an effort to increase profitability.  And so how do corporations realize profits if there is no income for domestic consumers to consume?

This is the absolute heart of the problem and helps to clarify the difference between capitalism and corporatism.  Corporatism strategies (trade agreements and economic cannibalism) necessitate credit and welfare (private and public debt) whereas capitalism is self sustaining.

Please understand the above is a logical syllogism because corporate profit requires a transaction to take place.  If no transaction then no profit is possible.  The transaction is a necessary (but not sufficient) process for corporate profit.  The transaction we call a ‘sale’.  The sale we call ‘consumption’.  So profit necessitates consumption.  Consumption can only come by way of three means, namely, income, credit and welfare.  Therefore by decreasing income in an effort to increase profit (on a macro scale, which is exactly what trade agreements do i.e. push microeconomic strategies on a macroeconomic scale) firms must assume the lost consumption from the lost income will be made up by credit and/or welfare.  And in our current system it is.  And I’m about to prove that to you beyond any shadow of a doubt.

If my claims are correct, then by implementing a labour cost arbitrage on a macro scale (trade agreements) you would end up with current account deficit inflection points following major trade agreement events.  The most recent trade agreement events for the US were NAFTA and the Tokyo round of GATT (which increased corporatism benefits by more the 500% over all other rounds combined).  The reason is that domestic consumption would increase materially relative to domestic production (i.e. production shipped offshore while selling that production back in the domestic consumer market).  So let’s have a look at at the data.

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The chart depicts total current account balance (black line) and 5 Yr moving average (red line).  What we find is that following both trade agreement events we had significant increases to the imbalance of domestic consumption and production.  Notice the balanced current account prior to Fiat money because you can’t run deficits on a gold standard.  Notice a bit of fluctuation in current account after Fiat but prior to Gatt Tokyo.  And then notice the major deficit move post Gatt and the massive deficit post NAFTA.  Essentially Fiat allowed for deficits but the trade agreements unleashed the deficits.

Now the above chart shows that our existing model post trade agreements (necessarily) integrates perpetual imbalances between consumption and production (and remember gdp = gni) so this means that the imbalance must be ‘balanced’ by some input.  And my claim is that exogenous input has to be credit and welfare.  You’ll notice I included the point at which we moved from a quasi gold standard to a full on fiat currency.  The reason is that we couldn’t implement labour cost arbitrage agreements without the ability to print endless private and public debt and so that was a necessary part of corporatism.  So Let’s have look at private and public debt.

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The above chart depicts changes in consumer credit + welfare as a percent of changes in personal consumption expenditures.  Essentially this is tracking how much of the growth in corporate revenues is coming by way of increases to credit and welfare.  What we find is that while there were ebs and flows over time there was a major shift immediately following NAFTA.  The shift moved the ceiling of 37% of consumer sales growth coming from credit and welfare increases before NAFTA to 37% being the floor after NAFTA.  In fact in 2015 a staggering 76% of consumer sales (PCE) growth came from growth in credit and welfare.

By now I must have your spidey senses tingly but I’m about to blow your mind with this next chart.  I’m going to prove to you with absoluteness that these trade agreements that create perpetual trade deficits have a direct requirement for consumer credit.

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The above chart simply adds total real consumer credit per capita / total real salaries and wages per capita (blue line) to the first trade deficit chart above.  It is useful to think in terms of per capita because ultimately the macro is just the aggregate of individual circumstances and choices. The above chart has a correlation of -.9 and highly statistically significant regression results.  While correlation is not causation we have our theoretical basis that predicted this very relationship and the tightness of that relationship is truly striking.

It tells the story that these trade agreements force the economy to subsidize income (i.e. consumption) per consumer with credit.  That is, the trade deficits are a result of the trade agreements as depicted in the deficit charts above.  And the deficits are then directly subsidized by consumer credit, which must make up the relative shortfall in income.  Note the blue line is an almost perfect mirror image of the black line in the chart above, validating the hypothesis that the subsidizing credit is a direct requirement of the ‘free’ trade agreements.

Yeah, I know… colours are getting a bit brighter and things are starting to look much sharper than before.  Truth can be so cleansing.

Now each of these above charts are highly supportive that the logical syllogism I discussed above is in fact absolute.  It’s logical and mathematical; two things that most have very little success debating.  And remember, I’m not suggesting that international trade is necessarily bad.  I’m saying we irresponsibly develop trade agreements with corporate objectives that can only be supported by private and public debt.  The antithesis of capitalism.

Corporatism embodies the worst aspects of both capitalism and socialism to form a uniquely destructive economic framework.  So let’s look at the destructive nature of corporatism.  What we’ll find is that it isn’t only destructive to the average American but to the profiters themselves.

As I’ve discussed previously credit and welfare are a function of income and if income is stagnant then as credit and welfare increase we are moving toward their limit.  And this means we are heading to a maximum level of consumption (which can only be achieved by way of income, credit and welfare).  But not only does credit have a limit relative to income but as it increases for the sake of consumption it actually reduces the flow of consumption over the medium and long term because of interest.

Now without getting too philosophical, when one researches the concept and history of interest (usury, ribbit, riba) one finds that most ancient religions (which were the basis of law) going back to the ancient Vedic Texts prohibited interest either absolutely or in some form (this includes Christianity, Judaism and Islam).  And this to me is fascinating because it suggests that these ancient civilizations were wise enough to understand the potential destructive nature of interest bearing debt.  Some writings actually specifically ban the concept of consumer debt.

What this means is that at some point in even more ancient history some society or societies must have collapsed under the weight of indebtedness because ancient laws were based on generational experience.  Putting this in context with the plight of most great societies in more modern history we see the old lessons were lost on us.  The irresponsible expansion of money and debt being the fatal common denominator of so many great societies in recent history.

So let’s look at the destruction of our modern society by way of corporatism, which is synonymous to the expansion of interest bearing private and public debt.

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The above chart is pretty self explanatory.  What it suggests is that we are only about 5 – 10 years from moving beyond the now 45 year period of deceleration and into actual contraction.  Growth in incomes, credit and population are all below 1% on a 10 year average.  Consumption and welfare growth are around 4% on the 10 year average.  What’s concerning is that this trend, while softening during the 1990’s has again intensified post 2008.  One thing to note is that income, credit and consumption growth rates all peaked immediately following Gatt Tokyo.  What I’m telling you is that this is not a coincidence but a consequence.

And so I guess the point here is that you no longer have to take my word for it or for that matter the word of Moses, Plato, Aristotle, Cato, Cicero, Seneca, Aquinas, Muhammad, Jesus, Philo or even Gautama Buddha, all of whom condemned the concept of usury.  An economic model that is built around interest bearing private and public debt is a form evil in that it necessarily ends in the destruction of society.  Do comprehend that evil presents itself not as repulsive but nefariously seductive and credit is nothing if not seductive.

This is no longer about theory or opinion.  The facts define how this will end.  If you continue to deny these absolutes then you are technically irrational i.e insane.  And so I see this as an end to the debate.

The policy objectives have not been what you were told.  None of the economic policies were intended for your benefit.  Monetary policy is not about you or your well being.  Fiscal policies have not had your interest in mind.  This is not to conclude  that those who control your world maliciously intended you direct harm.  But in the very best case you were and are simply irrelevant in this economic model of Corporatism.

Ironically, however, the solution is your relevance and will be the subject of discussion very soon.

 

Submitted by Thad Beversdorf via FirstRebuttal.com,

The Narrator @ September 6, 2016

I Have Never Stood Up for the National Anthem—and Never Will

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  San Francisco 49ers quarterback Colin Kaepernick stands on the field during a 2015 game. (Ben Margot / AP)

I do not follow sports, so I had not heard of Colin Kaepernick before this week. The San Francisco 49ers quarterback took a simple action Friday during a football game: He chose not to stand during the national anthem, and for that he has now become a household name. His act was one to which I could strongly relate.

Some years ago, I was at the Hollywood Bowl for a concert that had absolutely nothing to do with a national holiday, the military or the government. It was just a music event. But simply because there was a large gathering of people in one place, the venue upheld its irrational tradition of playing the national anthem and, like programmed robots, everyone in the stadium stood. I refused.

I have never stood up for the national anthem. Not the United States’ or any other country’s. Until 2009 I was an Indian citizen. When I was an undergraduate at the University of Texas at Austin, I once attended an Indian student association event (primarily for the free Indian food) to celebrate the Hindu festival of Diwali. It had nothing to do with the Indian state. Yet inexplicably, the organizers began playing the Indian national anthem. Dutifully, everyone stood up. I refused.

I have been an immigrant since birth. I was born to Indian parents in the United Arab Emirates—a country that does not offer birthright citizenship. So right from the start, I didn’t belong. When I moved to the U.S., I still didn’t belong. It wasn’t until I was 34 years old that I finally lived in a country of which I was a citizen—a practical status that has enabled me to remain within the same borders as my husband and children. And by then, it was too late for attempts at indoctrinating the importance of nationalism in my psyche.

Kaepernick and a number of other black athletes like him have, over the years, come to the conclusion that allegiance to a country that has yet to come to terms with its enduring legacy of slavery makes little sense, particularly for African-Americans. In 1972, the legendary black baseball player Jackie Robinson wrote in his biography, “I cannot stand and sing the anthem. I cannot salute the flag. I know that I am a black man in a white world.” Forty-four years later, Kaepernick similarly declared, “I am not going to stand up to show pride in a flag for a country that oppresses black people and people of color.” Muhammad Ali, John Carlos and many other athletes have taken similar stands over the years.

Kaepernick refused to show respect for the national anthem because he likely became aware of just how widespread the injustices facing African-Americans are, as the Black Lives Matter movement has underscored. His statements about the U.S. military, which have gotten far less attention, have suggested an ignorance of U.S. foreign policy. Asked if he insulted the military by sitting through the anthem, he denied it, saying of U.S. soldiers, “They fight for freedom, they fight for the people, they fight for liberty and justice for everyone.” Right-wing critics frothing at the mouth over his criticism of police brutality are ignoring the fact that Kaepernick’s rosy views of the military are in line with theirs. Perhaps some day the quarterback will explore Ali’s criticism of U.S. foreign policy and revise his own vacuous comments about soldiers “fighting for freedom.”

Here’s the rub: No country is worth pledging blind allegiance to. Patriotism, nationalism, anthems, flags and syrupy words about “love of country” or soldiers “fighting for freedom” are constructs aimed at fostering unquestioning obedience from people lucky enough to be deemed citizens. They are meant to quash debate and discussion and enable mobs to righteously proclaim treason by anyone who dares to dissent. GOP presidential nominee Donald Trump, who today best represents the vitriol of right-wing white resentment, said it best: “Maybe [Kaepernick] should find a country that works better for him.” It is a variation on a phrase I have heard a few times during my life in the U.S.: “Go back to your country.” Except that it is even more insulting to Kaepernick, who is an American by birth.

Perhaps bowing in deference to a flag or anthem fulfills some deep, primal need in humans to identify as a tribe that’s bigger and better and stronger than other tribes. Perhaps it satisfies a compulsion much like organized religion does—to find one’s place in a big, dangerous world that often makes no sense. Regardless, like religion, nationalism ought to be optional, a personal choice. If you’re into standing for an anthem written by a man who enslaved black people, and whose verse blatantly exalting slavery is simply swept under the rug, go right ahead. But don’t expect everyone to do so or chastise those who openly refuse to bend to such expectations.

To its credit, Kaepernick’s team issued a statement that showed an understanding of his rights, saying, “In respecting such American principles as freedom of religion and freedom of expression, we recognize the right of an individual to choose to participate, or not, in our celebration of the national anthem.”

But apparently many Americans don’t understand that we live in a democracy where embracing the symbols of nationalism and accepting institutional abuses of power are not mandatory.

Police unions have denounced Kaepernick, whining about his “total lack of sensitivity towards police officers.” Racist Twitter users have resorted to the least intelligent epithet they could think of. In other words, Kaepernick’s critics have proven his point: that there is deep and abiding racism against black people and people of color in the U.S., and that for many Americans, there is far greater anger over an athlete sitting out the national anthem than over our ongoing epidemic of police killings of innocent, unarmed Americans who are disproportionately black.

Nationalism and blind patriotism can bring out the worst in all of us. No country is above criticism, because no country has ever gotten everything right. Most are built on legacies of mass oppression, genocide, slavery, colonialism, corruption, misogyny and racism.

We can love our family, community and neighborhood. We can—and should—participate in our civic duties to be politically active citizens for whom voting and observing jury duty are the least of our responsibilities. But waving a flag, standing up for an anthem, putting your hand over your heart like it actually means something, are hallmarks of groupthink, of a population easily swayed by pieces of colored cloth and emotionally evocative melodies.

By writing these words, I will surely be accused of not loving my country enough. I will be told to “go back to my own country” or find one that suits me better. Like Kaepernick and Robinson, those of us who are deeply critical of this nation’s failings are often working hardest to fix them, rather than papering over them. As James Baldwin wrote, “I love America more than any other country in the world and, exactly for this reason, I insist on the right to criticize her perpetually.”

By Sonali Kolhatkar

The Narrator @ September 3, 2016