ECONOMICS TRUMPS POLITICS

The reason politicians should not meddle with markets is because the market will eventually do what the market wants to do. The market is you and me and all the other market participants. Artificially creating floors and ceilings for prices and wages and creating onerous regulations only artificially changes prices for a short time until the market eventually corrects. 

The most egregious market interference is when one person, like the Chairman of the Federal Reserve, determines what the market should be (instead of all of the market participants). The FED is currently using non-market oriented gimmicks to keep interest rates artificially low and the result is that the low rates are driving investment into projects that would not be profitable if interest rates were higher. But alas, interest rates will go up because the FED will not be able to make its gimmicks work forever. When that happens we will have another market crash. It is as inevitable as the sun rising in the east and setting in the west.

Click the link below to read how Venezuela has resorted to jailing currency traders to try to keep its currency stable (hint: its not working).

http://www.bloomberg.com/news/2014-09-26/venezuela-s-biggest-bill-buys-buck-on-black-market-as-bonds-due.html?cmpid=yhoo

BARRON'S "COME DOWN FROM THAT IVORY TOWER" ARTICLE

AKA

LOIS LERNER SHOULD HAVE BEEN A DITCH DIGGER

Barron's had a great article explaining why today's college students today should have to do manual labor and get their hands dirty before moving on with their careers ... if for no other reason than to understand how the other half lives. I would take the article one step further and require government workers to work in the private sector before their eventual resting place as government employees (or worse career politicians). 

Maybe Lois Lerner would not have singled out hard working Libertarians if she had been a ditch digger for a highway crew before leading the IRS down the dark road of government interference and incompetence. Maybe Lois Lerner believes her ideology is the "right thing" to do but one must only look to the results of a person's actions or policies instead of the intentions. The road to hell is paved with good intentions. Remember, hell is full of good meanings, but heaven is full of good works.

Link to the Barron's article below.

http://online.barrons.com/news/articles/SB52133021052493823286804580158093633666612

WHO IS THE LARGEST SUB-PRIME LENDER IN THE WORLD?

THE FED

THE CLIENT?

THE US GOVERNMENT

The Federal Reserve, a bank created to bail out the banks when the banks do stupid things, currently holds about a quarter of all U.S. debt. The Federal Reserve creates money out of thin air and currently buys 40% of U.S. debt issuance. This is the reason your mom and dad paid a nickel for a soda when they were young and you now pay $5 a bottle at amusement parks for the same thing (actually you don't get as good a soda as they had because their's was made with sucrose and your's is made with high fructose corn syrup because of the sugar lobby). The extra money in circulation causes prices to go up and hurts the poor more than the rich as the poor do not have assets that appreciate to "keep up with inflation." Keeping up with inflation is basically owning hard assets that go up in price as more money is required to buy the same amount of goods with more money in circulation. 

Who is to blame? 

Read how the FED allows government to mimic an irresponsible freshman with their daddy's credit card below.  

http://mises.org/daily/6894/The-Worlds-Largest-Subprime-Debtor-The-US-Government

THE NEW POLITICO CLASS:

 NOTHING MORE THAN ELECTED USED CAR SALESPEOPLE

Euripides said, "Virtue proceeds through effort." So it is no surprise that a self-proclaimed "lazy" President does not take the time to understand easy economic principles or if he does understand economics and he promotes policies that fly in the face of those simple economic policies ... well ... we are in much more trouble than I thought. I will take the side that the President is just ignorant and not intentionally lying to pander to the public for support. That assumption would make Obama nothing more than a elected whore. Let's not go there (or at least save it for another day).

What happens when you raise the price of something? Do people buy more or less of it ... all other factors remaining the same? If you can buy 2 six packs of Coke for 5 dollars or 3 six packs for the same amount do you take the 2 six packs for the same price? Of course not. The same can be said of the Democrat's golden calf, minimum wage hikes. Obama and his buddies keep pushing minimum wage laws pretending they would help the working poor but knowing full well they don't. Why do they do this? Because they know the Republicans will not push legislation through that hurt the working poor. If you raise the price for labor there will be less demand for it not unlike person who buys more Coke when the price is lower and less when the price is higher. It is very simple to understand. The only ones who try to convolute the simplicity of the minimum wage laws are those who are trying to con you. They are looking to game the system (and you) by using government force with minimum wage laws. That is not the free market capitalism that made this country great. It is easy for the President to say Republicans hate the poor because they will not sign off on new minimum wage legislation. The Democrats are glib on that fib. 

Obama will say why can't Walmart pay the same wages as Costco. If you figure in the amount of sales per employee, they already do. The fact is that Walmart's employees are 1/2 as efficient as Costco's employees if you figure in the sales per employee. Do the math. I did. So if Walmart fired half of their employees and the remaining employees did twice as much work then they would be the equivalent of the Costco employee. Of course there would be much higher unemployment because Walmart is the largest public employer in the United States. Obama won't tell you that because all he cares about is politics which has nothing to do with economics. However, it is economics and economic policies that will determine if your standard of living will go up or down. The problem for you is that politicians have nothing to benefit by promoting sound economic policies which would call for smaller government and less public assistance.

Much of the deterioration of this country can be attributed to the fact this country is turning into more of a Democracy than a Republic. Plato laid out the difference between a democracy and a republic in The Republic. Unfortunately, every bonehead 18 years or older can vote for any career politician who runs for office in this democratic country. In a republic, only a small percentage of the population that usually possess virtue, wisdom and knowledge to maintain and protect society may vote for the elected leaders. In the United States early voters were required to own 50 acres of land to vote. In our day and age there may be other useful proxies rather than land ownership to vet those that should be able to vote but the case can easily be made there should be some requirement that those who are electing the leaders that are deploying the wealth of the nation should have some skin in the game before they are permitted to cast a vote.

The problem with our society is that any moron may enter a voting booth. Those who have not put any more thought into electing a President other than "it would be cool to elect a black President" or "he looks cooler that the other stiff" are permitted to vote along side those who have spent the time and effort to start a business and understand the burdens the government regulation or those that have devoted their lives to figuring out how economies are benefited by free markets so that they may improve their lot in life. The result of morons voting is that our leaders are more like used car salesmen, pitching their ignorance of subject matter that is objective, rather than the protectors of our republic which we so desperately need.

Subjective subject matter such as whether or not we are all better off with socialized medical care can be discussed ad infinitum without reaching a logical conclusion to everyone's satisfaction but minimum wage laws are not subjective ... they are objective. It is a waste of time and effort to discuss them so much from an economic perspective but the same minimum wage laws are hand fed fodder to the ignorant by our current political class for their own enjoyment AND EMPLOYMENT.   

Education is the key to unlock the golden door of freedom. - George Washington Carver

Click the link below to read how the fight isn't about minimum wages but the fight is about the fight itself.

http://www.nationalreview.com/article/364486/minimum-wage-myths-kevin-d-williamson 

SOCIALIST VENEZUELA IS SELLING CITGO TO RAISE US DOLLARS

BIG GOVERNMENT FAILS AGAIN - VOTERS WILL NEVER LEARN

Teaching the virtues of free markets (aka capitalism) is a waste of time if those listening have no virtues. The Hope and Change that Hugo Chavez has promised the voters of Venezuela have learned that socialism and big government provides no hope and change only for the worse. You have to love a charismatic speaker but you don't have to love standing in food lines with your ration coupon from the government. Not only has government interference caused previously abundant supplies of toilet paper to run out but now you will find it hard to obtain tooth paste (do you really need to brush your teeth if you don't eat anything?). 

Socialism is no laughing matter. It, along with its brother and sister Marxism and Communism and its cousin Fascism, has destroyed more lives in the 20th century than all the World Wars. In China the Communists killed all the property owners and landlords. In Russia they took the business owners productive property and turned it over to the workers who let it rot. In Germany if you were not a productive member of society then there was no need for you and you were terminated for frailty or old age. And there was massive starvation. These are the ugly stories you should be told over and over again when confronted by someone espousing big government and socialist programs. It is no joke.  

Link to the Citgo sale is below

http://www.cnbc.com/id/101987987