The Pie and the Russian Brothers

The pie is a commonly used metaphor for describing the nation's economy. For example, we routinely hear or read about "getting a slice of the pie" to connote an individual's or a delineated group's share of the economic goods. 

By paying close attention to how the metaphor is applied one gains a sense for the underlying economic politics of the user of the metaphor. Notice, for instance, that modern liberals will almost exclusively refer to adjusting the size of the pie slices, as in "the working class slice has grown thinner while the wealthy have a larger slice". Perversely, they want you to believe that having a larger slice of a shrinking pie is a good thing.

In contrast, those that focus on the free market engines of economic expansion speak about the policies and approaches that will make the pie bigger. "We need more ideas and energy centered on the opportunity to grow, on abundance, on new markets, on a willingness to improve and compete, on more economic freedom in the hands of the creators of wealth rather than in the undeserving hands of the distributors and self-proclaimed adjudicators of wealth". 

This "unfair slice" argument is the modern liberal's springboard for their banal liturgy about protectionist measures, class-warfare and all the other divisive stuff that constitutes the politics of envy and resentment. We need less focus on mealy-mouthed and corner-of-the-eye glances on what your neighbor has that you don't. We need less of this because it is the path of ruin, the path of losers.

There is an old Russian fable about two brothers. Only one brother owned a sheep. The sheepless brother was hopelessly consumed with envy. Then one day, this brother that did not possess a sheep found a lamp, rubbed it and out came a genie willing to grant one wish. The wish? Well, the brother sneered and wished that the genie kill the sheep of his brother. 

A Different Way to Pay Taxes

Americans would have a different attitude toward taxes if they were not deducted from our paycheck. Then, we would have to write checks every month payable to the various departments of the US Government for our income, payroll, social security, and all other taxes. There is something about owning something and then being forced to give it up. 

Paycheck deductions for taxes are too smooth, too easy and too automatic. They create the numbing unconsciousness that can delude one into thinking that the entirety of a hard-earned paycheck was never truly ours to begin with. The fact that some, upon receiving their tax refund, exclaim that "they got something back", is alarming when one really thinks about the mindset. Rather, the exclamation should be: "why did they overreach into my earnings and where is the interest payment?"

What Comes First, Price or Cost?

In their purest form, capitalists and socialists have a fundamental difference on how a product ought to be priced in the marketplace. Let's begin with the socialists. Socialists predominantly base business enterprise decisions on cost. To arrive at an appropriate product price, they add up the labor costs, material costs, and other costs associated with taking the product to market. To this sum they add whatever profit margin they view as essential, and this brings them to a grand total: the product price.

If foreign competitors offer the product at a lower price, then socialists decry unfair trade agreements and scream for protectionist measures such as tariffs that are aimed at elevating the competition's cost, and by extension, the competitor's price. Lowering their own price is not the solution, especially when rigormortis sets in on their sacred "cost + margin = price" mentality. Who suffers from this wrongheadedness? The consumer for one and any notion of business sanity for another. The socialists have it backwards because their stale process leads to political barriers that reward inefficiencies.

By dramatic contrast, a capitalist focuses on price as the key determinant. What price will be the most attractive to capture consumers in a competitive marketplace? Once that price is established, the capitalist organizes himself to arrive at a cost structure that will permit the delivery of the product and leave a residual profit. This process forces the free marketer to develop all sorts of increased productivity measures,  sound organization, efficient use of labor, technological progress, optimal distribution channels etc... It is this very effort to construct a cost structure that can work within the constraints of the price limitation that has brought us marvelous new technology, workplace enhancements, and general business innovation. It leads to economic growth.

Here's a riddle: What happens when you cross a free market-created price constraint with a labor union/protectionist business organization? You get huge losses with no flexibility to change because the cost structure is rigid. You get Detroit.

Deepak and Gotham

Deepak Chopra is a bit flustered these days because of  a commentary written by Dorothy Rabinowitz that appeared in the Wall Street Journal on December 1st. The piece, titled "Deepak Blames America", convincingly asserts that Mr Chopra, during a CNN interview, pointed the finger of blame toward the United States as it related to the Mumbai, India terrorist attack. 

To paraphrase the CNN interview, Deepak said that US foreign policy led to the murderous act because the policy is too nasty toward the otherwise easy-going terrorists. It would be far better for America to adopt a "root cause" approach to this pedestrian misunderstanding with those who want to annihilate us. By the way, the self-help guru put out the outlandish claim that those who drop bombs from 35,000 feet (US pilots) can also be considered terrorists. 

The inconvenience of the "roots cause" kumbaya is that we are being targeted because of who we are - western society. However, to correct the root problem, all we need to do is mass convert to Islam and abandon this silly democratic regime we have. Seems reasonable to me.

Deepak Chopra objects to the term "War on Terrorism", citing that it paradoxically translates into "War on War". I tend to agree with Deepak and would suggest a more illuminating term, such as "War on Islamofacsism" or "War on Radical Islam". The sagacious Mr Chopra prefers to dial down the rhetoric and call it "Serious but respectful objections with those who embrace a different but equal culture and possess a well-grounded dislike for Americans because we do not dedicate enough time to fully understand the root reason for why these peaceful human beings want to kill us". Okay, the conflict's name may be long but it may catch on in time.

Today is the 67th anniversary of the Japanese attack on Pearl Harbor. The next day when President Roosevelt declared war on Japan he used stark and clear words (dastardly, treachery, etc..) to convey his emotions and the reasons for war. Deepak would have advised the barbaric FDR to stand before congress daintily waving windchimes and call for a moment of aromatherapeutic, non-offensive dialog amid sushi and sake in order to engage in a guilt-ridden exploration of the "root cause" for the attack. We obviously did something to offend them. If you buy "The Seven Spiritual Laws of Success" you will not actually learn what we should have done in the aftermath of Pearl Harbor or 9/11 but Deepak would appreciate the patronage.

On December 5th, Deepak's retort to Ms Rabinowitz was printed in the Wall Street Journal. The letter was short and a bit whiney. He pouted because Ms Rabinowitz launched a personal attack on him. Somewhat disappointingly, Deepak exhibited a lack of creativity by using the same catty arguments, almost verbatim, that he used earlier in the week when he pawed at Fox News. Catty is never good, but being catty and lazy is inexcusable for someone who wrote a book conspicuously titled "Synchrodestiny". 

Enter Gotham Chopra, son of Deepak and rumored to have been conceived in the batmobile. Gotham follows Deepak's blurb of a letter with a rather long missive that is ominously prefaced with a threat to swing hard at Ms Rabinowitz because his daddy could not on account of Deepak's vow of non-violence in "all his words and action". (I may be allowed to dispute Deepak's allegiance with his own vow because his words do make my head hurt) The point is that Deepak cannot engage in bellicose words but he can recruit Gotham to the task - kinda like how the old mafia dons would take care of business. 

Gotham blusters that he will put this whole fracas with the terrorists in the "proper context". He does not. Gotham fails pathetically. Rather than elucidate, he punishes us with a rambling and incoherent series of non sequiturs. Further into his meandering letter I think I read the name Gandhi somewhere in there, something about his lending a bizarre idea to Deepak, and perhaps even a philosophical reminder that Cisco drank the whiskey and Pancho drank the wine.

Okay, I was going to write more about this but these guys just aren't worth it. So I'll stop right here. Deepak is a fraud and Gotham is a dullard.

As said by Churchill

The inherent vice of capitalism is the unequal sharing of the blessings. The inherent vice of socialism is the equal sharing of the misery.

An Awful Time for Trade Barriers

The Democrat-led House of Representatives, spearheaded by Speaker Nancy Pelosi, is blocking a vote on the US-Colombia Free Trade Agreement. Rather than protecting the labor unions (such as UAW) and manufacturers, whose job losses Democrats claim to lament, this trade agreement inaction will prove costly at a time when our economy is in a desperate need of a tourniquet. The delay is especially ill-timed because the Canada-Colombia FTA was signed on November 21st. 

The benefits gained by Canada and Colombia will result in a loss for the United States. The Canada-Colombia pact will eliminate existing tariffs between those two countries for a wide range of products. Hence, why would Canada and Colombia choose to purchase from the US (with tariffs) when it is cheaper to buy-sell among themselves? Who gets hurt here? - labor unions and manufacturers, of course.

It is in our country's best interest to demolish trade barriers, especially with a democracy in our hemisphere. We should want all South American countries to realize the benefits of being a free-trading, economically-free, democracy. Canada is ahead of us on this one.

Somali Pirates

Lo and behold, there may be one topic that most of the world can rally around - the scourge of Somali pirates. Piracy off the coast of this disastrous African nation has been all over the news as of late. There have been 90 reports of piracy in 2008 by the Somali.

Using vessels that range from large to dinghies, these criminals board a ship, make hostages of the crew, and then ask for ransom for the lives of the hostages. Refer to this map to see worldwide reported pirating incidents for 2008 alone. There are three hotspots. Off the coasts of Somalia, Nigeria, and Indonesia.

Unlike pirates of yesteryear, there has been minimal interest in the captured vessel's merchandise, although a captured Ukrainian freighter was carrying tanks, grenades and a host of other military equipment.  In 2008 alone, these pirates have seized vessels from India, Iran, Ukraine, Saudi Arabia, Thailand, Great Britain, France, and many others. The The Saudi vessel was a supertanker holding about $100 Million in oil.

A coalition of several countries has been formed to patrol the Gulf of Arden. To defend against the pirates, commercial vessels are now better equipped to repel an attack. This defensive measure is quite expensive, when one adds the new technology, additional militarily-trained crew that is required, increased insurance costs, and the cost and use of the patrol boats that act as guardians.

This coalition for "pirate-free waters" needs to go a step further by taking the offensive. They should consider patrolling the waters closer to Puntland, on the northern shores of Somalia. This break-away region that is run by warlords holds the highest concentration of these pirates. Once stationed, the coalition should sink any and all vessels that leaves its coast. If they shift to another region, then sink all of those vessels as well. 

We are dealing with a criminal element that becomes increasingly brazen. Think Mogadishu in 1993 with Black Hawk Down. There is nothing that is swashbuckling romantic about the murderous thugs that perpetrate these high-water crimes.

True, many vessels that depart from the Somali coast are innocent fishermen. But that's the problem - these "innocent vessels" are indistinguishable from the pirates. Therefore, they should all be sunk until Somalia learns to conduct itself. Should it not learn, then they can just prey on one another and leave the rest of the world alone.