Brave New World Arrives 521 Years Early

Aldous Huxley’s dystopian novel, set in year 2540, warned of what is now happening.
Brave New World Arrives 521 Years Early
By: George Noga – February 10, 2019

       This is the second in our Four Horsemen series about the convergence of four gigatrends. This part deals entirely with the hyper-concentration of IQ within the US population. It is longer than usual, but necessarily so. If you missed the first part last week, it is on our website: Next week is the third and final part.

         A sea change, begun 70 years ago, is transforming America in ways few know or understand. IQ, both low and high, is being evermore concentrated in different cohorts of the population. In Brave New World, the World State (government) controlled children’s IQ in hatcheries. Today we do the exact same thing – only voluntarily.

       Some fundamental truths about IQ are accepted by virtually all professionals and academics who specialize in that field. There is such a thing as IQ on which humans differ and which IQ tests measure accurately. IQ matches what people mean when they use terms such as smart and intelligent; it is stable throughout life, but not perfectly so. Properly designed and administered IQ tests are not biased against any group. Finally, and very importantly, IQ is between 40% and 80% heritable.

        Before the middle of the last century, intelligence was nearly randomly distributed throughout the population. A poor, uneducated laborer was just as likely to have an high IQ as someone educated and well-off. IQ rarely entered into the calculus for marriage. Then things began to change and the pace of change has accelerated.

###  High IQ students attending college soared from a low percentage to nearly 100%.

###  Elite colleges were transformed. By 1960 the average 1952 Harvard freshman would be in the bottom 10%; today, he/she would not even think to apply.

###  Bright kids from all groups and backgrounds were identified and sorted. Today any smart student can go to college and, if necessary, without paying.

###  The IQ of the non-college population, drained of all the brightest kids, tanked.

###  Educational partitioning was followed by occupational partitioning.

###  The market value of IQ skyrocketed and the income and wealth gaps between cognitive elites and others widened at an alarming rate.

###  Selective marriage, based on IQ, is now the norm and breeding between elites and others is rare. People want smart kids who can thrive in the world of the future.

      Brave New World has arrived 521 years early. Cognitive elites matriculate in different schools, work in different jobs and workplaces, earn vastly more income, accumulate greater wealth, think about religion differently, shop differently, reside in different cities and neighborhoods and school their children differently. Their culture and politics differ. They intermarry and have kids who are even more elite. We now have fourth generation elites, who know nothing of the lives of ordinary Americans.

       Cognitive elites don’t watch the same movies or TV shows, read the same books, eat the same foods, dine at the same restaurants, drive the same automobiles or vacation in the same manner or places as non-elites. They don’t even look the same due to different notions about diet, exercise, piercings, tattoos, dress and cosmetic surgery. They are healthier and have longer life spans. Their language, speech and grammar differ. They eschew the military and disdain hunting, fishing and firearms.

     Many elites don’t know even one Evangelical Christian or someone without a college degree or who lives in flyover land. They have little in common with non-elites from whom they differ as much as Huxley’s Alphas and Epsilons. They are two different groups sharing the same land and government. The greatest source of inequality in America today is not economic – it is cognitive and cultural.

     What does this auger for America’s future? How much longer will non-elites be content to earn a fraction of what elites earn? How much longer will non-elites be willing to risk their lives and their children’s lives in the police or military to defend a small segment of the population that disdains their service? How long will it be before non-elites, far greater in number, assert control through either the political process or other means? Finally, how long until non-elites demand DNA modification to equalize the IQ of their children with elites; what Pandora’s Box would that open?

        I don’t have answers to these questions, but I do know the cognitive divide is real and will soon become a chasm. It explains many things no one likes to talk about or even to acknowledge, i.e. it is a mokita. I also know that if this gigatrend continues on its present course, there will not be a happy ending – especially for elites.

Next is the startling conclusion of the Four Horsemen of the Apocalypse.

Four Horsemen of the Apocalypse

If Americans hate each other, but honor the Constitution and accept election results, we have a country. Once that stops, anything, including civil war, becomes possible.
Four Horsemen of the Apocalypse
By: George Noga – February 3, 2019

     Four gigatrends are gathering steam; each is life altering. The convergence of two, three or all four will transform life in these United States and on this planet; they are:   

 1. Concentration of IQ, both high and low, in different cohorts of the population: Instead of the World State controlling children’s IQ in hatcheries, as in Huxley’s Brave New World, we are doing it voluntarily, but every bit as thoroughly. 

2. Spending crisis: The US already has crossed the point-of-no-return.

3. Political/Cultural incivility: When we shred the Constitution, reject election results, rig the electoral system and investigate/jail opponents, that is a prelude to civil war. 

4. Intergenerational conflict: Ageing population, lengthening lifespans, unfunded medical and pension costs, fewer multi-generational families, spending crisis and rampant intergenerational theft create a recipe for hostility, strife and worse.


Political and Cultural Incivility

       Even if Americans hate each other, as long as everyone honors the Constitution and accepts election results, we have a country; once that stops, anything – including civil war – becomes possible. Accepting election results means not trying to change or rig the electoral system, not removing or jailing opponents and not spying on or investigating them without clear evidence of a crime.

There is no doubt incivility is on the ascendancy – one only needs to recall the Kavanaugh nomination. How does it all end? There are only a few possibilities, as described in America’s Cold Civil War by Charles Kesler. A transcendental event could change everything (unlikely) or people might change their minds through persuasion or moderation (unlikely). That leaves only three choices – two of which are devastating. 

The most sanguine of the three remaining alternatives is a sluiced up form of federalism whereby red and blue states handle the most contentious and divisive issues on a state level – thus denationalizing them. After all, the reason for our original constitutional federalism is that states have different interests and cultures. It is hard to see that working. What about purple states and issues that can’t be denationalized? If federalism on steroids doesn’t work, that leaves only two other possibilities – secession and civil war – those gruesome scenarios require no further elaboration. 

Intergenerational Conflict

For all the reasons noted supra, intergenerational conflict already is present and leading to strife. It is particularly virulent in the UK where negative views about old people are pervasive and even hostile. The US population over 65 will double in the next generation and Social Security and Medicare will require huge intergenerational transfers. On top of that comes the inevitable climax of the spending crisis. Finally, there is also a political and cultural divide between generations. 

It will only get worse as cultural, economic, demographic and political fault lines between generations come under more stress. As population ages, lifespan lengthens, Medicare, Social Security and pensions are vastly underfunded, and the spending crisis takes its inevitable toll, it could get ugly. Will less well-off younger generations blithely continue to subsidize older generations with whom they are in conflict and, not to put too fine a point on it, who also stole vast sums from their generation?

Don’t miss part II next week about IQ concentration; it is radioactive!

Climate Change Rejected Worldwide

After years of exploding taxes, energy costs and regulations, voters have had enough.
Climate Change Rejected Worldwide
By: George Noga – January 27, 2019

        All over the planet people are soundly rejecting climate change alarmism. Media coverage of recent reports by the UNIPCC, the US National Climate Assessment and of the conference in Katowice, Poland is inaccurate crisis-babble. Too lazy and doltish to understand climate science, the media have turned climate change into a good versus evil morality play. We will get to all that; but first, a statement of MLLG’s position.

MLLG Belief About Climate Change

        Climate change is a meaningless tautology because climate always is changing; it is used deceitfully to transform every weather event into a cause celebre. Secular (solar) global warming is real; our planet has been warming for 170 years, although there has been a pause during the past 20 years. This is a normal part of planetary warming/cooling cycles throughout history. The contribution, if any, by mankind is inconsequential and there is powerful evidence against anthropological causation.

        A modest amount of warming, such as we now are experiencing, is a net benefit to humanity. It is wrong to spend humongous amounts of money today for uncertain and infinitesimal reductions in temperature in the distant future. The best strategy is to maximize the global economy so that we will be in the strongest possible position to ameliorate any adverse effects, should warming become a problem in the future.

Voters Reject Climate Change Taxes and Costs

     Voters everywhere are rejecting spending and taxes to reduce CO2. The most dramatic was in France, where the yellow vest movement stopped increases in gas and heating fuel. In liberal Quebec, the Labor Party was routed in provincial elections due to a proposed carbon tax. In Ontario, with power bills up 75%, voters elected candidates opposed to all alternative energy subsidies. In Saskatchewan and Alberta, Trudeau’s carbon plan is opposed across the entire political spectrum.

       Voters in Germany rejected Merkel’s energy policies which savaged the middle class. Carbon pricing efforts were defeated in Australia. In the United States, voters rank climate change dead last out of 20 issues of concern. Voters in liberal Washingtonstate and Arizona rejected ballot initiatives to tax carbon. After years of exploding taxes, costs and regulations, voters have had enough. They place their own well-being ahead of some distant, hazy and unproven threat foisted on them by their elites.

UNIPCC – US Climate Assessment – Poland Conference

       The UNIPCC issued a report in October and the US National Climate Assessment followed in November. Both were nothing burgers, but the media responded with scary headlines. New York Times headlines screeched: Emissions Surge, Hastening Perils Faced By Planet and Climate Accord Remains Alive as Crisis Builds. Al Gore shrieked that “civilization would descend into another dark age“. Other headlines used terms such as catastrophehuman extinctionlosing Earth and game over. Really?

       The reality bears no resemblance to the headlines. One worst case scenario showed annual GDP growth lower by five one-hundredths of one percent. The New York Timeshysterically reported the new data reduce GDP 10% by 2090, i.e. a growth rate of 1.86% instead of 2.00%. In a worst-worst case scenario, GDP would be 4% more in 2090 without human effects. In reality, both reports contained nothing new.

     The conference in Poland to implement the Paris Agreement was marred by the knowledge that whatever they decided was irrelevant. Macron’s defeat by the yellow vests means the end of carbon pricing. Despite the media’s ignorant crisis-babble, people everywhere now place their well-being ahead of climate alarmism.

Post Script: Since I first wrote this post, the yellow vest protests have spread to: Belgium, Bulgaria, Canada (12 cities), Croatia, Egypt, Finland, Germany, Ireland, Israel, Italy, Netherlands, Pakistan, Poland, Portugal, Russia, Serbia, Taiwan and Tunisia. Whew!

Next is our provocative series: The Four Horsemen of the Apocalypse.

Texting – Sears – Tyler – Hauser – Laffer

A 70% top income tax rate loses the government $65 billion over 10 years.
Texting – Sears – Tyler – Hauser – Laffer
By: George Noga – January 24, 2019

       This is a special mid-week posting of micro topics, many of which are timely, especially the segments about the progressive plan to raise marginal tax rates.

Micro Topics: CO2 emissions of electric vehicles often exceed those of gas vehicles, depending on the fuel used to generate the electricity and how long a charge lasts. The $7,500 tax credit is a wealth transfer from the middle class to the wealthy; nonetheless, it remains a darling of the left. . . . . . . Canada increased fines for texting while driving to $1,000 and loss of license. MLLG opposes distracted driving, but there are always unintended consequences of government actions. Where texting is illegal, drivers often relocate texting to their laps – out of sight of police but infinitely more dangerous.

Socialism & Sears: In the USSR, a man goes into a store and asks, “You don’t have any meat?” The clerk responds, “No, we don’t have any fish; it’s the store next door that doesn’t have any meat.” I have a stable of commie jokes; a favorite is where the USSR conquered the entire world but spared New Zealand just to know prices in the real world. These stories are so funny because they are true; commies had no way to know what things cost. We just learned Soviet economists (oxymoron) resorted to Sears catalogs to set prices for consumer goods – as did the Chicoms. Progressives are ignorant of the lessons of the USSR and the truth behind all the commie jokes.

John Tyler: Our national history spans but a few lifetimes and there are some amazing stories. My favorite is John Tyler (Tippecanoe and Tyler too), our 10th president (1841-45) born in 1790 during George Washington’s first term. Two of Tyler’s grandchildren are alive today.  The entirety of US history took place in the lifetimes of Tyler, his children and grandchildren, spanning 229 years and still going. Therefore, you should not be overly shocked to learn that the United States government in 2019 still is paying pensions to widows and children of Civil War veterans.

Hauser’s Law: Alexandria Ocasio-Cortez and progressive know-nothings (oxymoron) proposed a top income tax rate of 70%. They obviously know nothing about Hauser’s Law, which states that, regardless of tax rates, the individual income tax collects 18% of GDP – 20% in a strong economy, 16% in a weak one. In the 75 years since WWII, the top rate has varied from a low of 28% to a high of 92%, but the revenue it produced was constant at 18%. The Tax Foundation, when adjusting for the effects of behavioral changes, found that a 70% rate lost $65 billion in tax revenue over 10 years.

The Laffer Curve: Progressives also know nothing about the Laffer Curve. Economists know that as rates rise (starting from zero) tax revenues increase, but at a decreasing rate. Eventually a point is reached at which tax revenue is maximized. Beyond that point, tax revenues decrease at an increasing rate, i.e. the Laffer Curve. Higher marginal income tax rates actually result in less tax revenue. Economists have determined that tax revenue is maximized at a rate of 35% to 40%; once rates rise above 40%, total tax collections begin to fall and at an ever increasing rate.

The reason Hauser’s Law and the Laffer Curve work should be apparent; people (especially the wealthy) modify their behavior based on tax rates. If progressives want more tax revenue (within the existing tax code) they must do a Willy Sutton and go to where the money is, i.e. the middle class; there never are enough rich people. MLLG has written extensively about Hauser and Laffer and may soon need to devote a full posting to them amidst all the progressive jibber-jabber about hiking tax rates.

Our next post January 27 is a climate change update; don’t miss it.

My 25 Years in the School Choice Movement

Ron DeSantis is Governor of Florida today because of 100,000 black voucher moms.
My 25 Years in the School Choice Movement
By: George Noga – January 20, 2019

       I started the school choice movement in Florida in 1994 by raising money for private vouchers for children in poverty – 80% of whom were minorities; it was an overwhelming success. Assisted by a new tax credit law, we rapidly expanded. The program, now called Step Up for Students, grants over 100,000 scholarships each year at a cost of $400 million. Due to the Florida success, I was invited to join the board of  Children First America, which began voucher programs in over 100 cities. This posting offers reflections and observations based on my quarter-century in the movement.

1. School choice is a winning issue. Ron DeSantis is now Governor of Florida because 100,000 black voucher moms voted for him by a huge margin over Andrew Gillum, the black Democrat candidate, who vowed to abolish vouchers. Black women voted 18% for DeSantis only 9% for Scott and 7% for the GOP nationally. DeSantis also got 44% of the Hispanic vote. Doug Ducey won Governor of Arizona by corralling 45% of the Latino vote versus only 30% for McSally – again due to school choice.

2. Vouchers increase funding for public school children. Teacher unions, contrary to all logic, argue vouchers diminish funding for children in government schools. Assume there are 100,000 students is a school district funded at $10,000 per student, or $1 billion in total. If 20% receive vouchers for $5,000 (50% is typical), the 80,000 kids remaining in public schools now are funded at $900 million, or $11,250 each, equal to an increase of $1,250, or 12.5% per pupil remaining in government schools. QED

3. Choice is ultimate accountability. Opponents’ go-to argument is that voucher schools are unaccountable. Government schools are run by stultified, politicized and unionized bureaucracies whereas private schools are accountable directly to parents and students. A consumer armed with a free choice is the most powerful force on earth. Imposing rules on voucher schools turns them into the hell holes parents are fleeing and causes good private schools to shun vouchers, thereby reducing options for children from poor families. The state doesn’t interfere in schools where parents pay tuition directly, only in those that accept vouchers. They thus treat voucher parents as inferior to others.

4. Opponents always use race, class warfare and scare tactics. Even though I raised money from white businessmen to fund vouchers for black and Hispanic kids, I was called racist every time I spoke in public. Critics argue vouchers are bad because some kids are left behind; this is like asserting everyone should drown because there aren’t enough lifeboats to save everybody. Nor do vouchers skim the best students; voucher kids are indistinguishable from public school kids in every demographic.

5. School choice is about more than education. Government schools teach a vapid, PC, secular, valuless orthodoxy. Choice allows parents to select schools that reinforce, rather than contradict, parental values. Choice permits parents to select a safe environment versus metal detectors and perpetual police presence and to escape public schools, many of which are petri dishes for social dysfunction and breeding grounds for behavioral pathologies. Choice permits children to escape being held hostage by those standing in the schoolhouse door blocking their escape. Choice would be highly desirable even if there were no differences in educational outcomes.

6. Public schools are a jobs program for adults. Voucher schools that fail are closed. No government school ever closes. Inept and dangerous teachers can’t be fired; instead, they are shuffled among schools or paid to sit in rubber rooms. The problem is not that there are a few bad apples, but that there aren’t enough good apples.

        School choice has come far in 25 years but has a long way to go until that magical day when every family in America has the power to choose. The 2018 election proved school choice is a winning issue among black and Hispanic voters. That should scare the bejesus out of teachers unions, progressives and others who are preventing poor kids from escaping failing schools. More importantly, it should embolden politicians of all stripes to embrace school choice – which is the civil rights issue of our time.

Watch for our special mid-week posting on Thursday, January 24th.

True Liberty Not Found in Democracy

The Constitution guarantees Americans “a republican form of government”.
True Liberty Not Found in Democracy
By: George Noga – January 13, 2019

     Later in this post we reveal occult facts about the Constitution, mostly unknown even to the erudite among us. But first – a preview of the MLLG blog for 2019.

     As we begin our 12th year, I am grateful to the tens of thousands of loyal readers who receive our posts directly via email, from forwards, on social media, on our website (110,000 hits), on the internet and through electronic media that republish our posts. We use a large commercial email service and they inform me that our open rate is among the very highest they have experienced. Thanks again to all of you!

     We will continue our mix of politics, economics, philosophy and human interest, posted weekly in 500-700 words and readable in under five minutes. You will see more of our signature issues: the spending crisis, climate change and government failure. You will see more micro postings covering multiple topics and we will reprise Montana Moments this summer. For the first time, we will footnote sources on certain postings; but whether footnoted or not, whatever we present as a fact is a fact.

     Our mission is not to write about the news of the day or to present commentary or perspective you can read elsewhere. We remain dedicated to showcasing, in our own inimitable way, the blessings of liberty and the evils (yes – evils) of government. Above all, we will remain true to our name – more liberty and less government!

The Constitution, Democracies and Republics 

     The USA is a constitutional republic. The word “democracy” appears nowhere in the Declaration of Independence or the Constitution. We don’t pledge our allegiance to the United States of America and to the democracy for which it stands. We don’t sing The Battle Hymn of the Democracy. We don’t have the Statue of Democracy. And Russia could not hack our democracy. We are not a direct democracy, representative democracy, democratic republic or even a constitutional democracy.

     Our founders, extraordinarily well versed in history, had justifiable contempt for democracy, which often is described as two wolves and a sheep voting on what to have for dinner. At the constitutional convention, Adams, Hamilton and many others cautioned that true liberty is not found in democracy. Article IV (Section 4) of the Constitution guarantees Americans “a republican form of government“.

     Alexandria Ocasio-Cortez and other socialist wunderkinds are poster children for the reason America’s founders had contempt for democracy.  In fact, the strongest case against democracy is the recent behavior of progressive mobs. Imagine what furies would be loosed if they ever achieved unfettered power. Do you know there is one part of the Constitution (described in Article V) that cannot be amended? Clearly, Ocasio-Cortez, Hillary Clinton, and all the other know-nothings advocating for fundamental changes to our republic, are ignorant about Article V of our Constitution!

January 20th – An assessment of the Trump presidency at the halfway mark.

Lessons From Christmas Shopping

The three gifts of Christmas embody important economic lessons.
Lessons From Christmas Shopping
By: George Noga – December 16, 2018

         This post was super popular with readers last Christmas; I have updated it and am reprising it for this holiday season. Christmas shopping embodies valuable lessons about economics and government. All gifts fall into three economic categories.

         First Party Purchase:  The most felicitous gift is the one you buy for yourself with your own money. Clearly, you know better than anyone precisely what you want as well as how much you will spend. Your priorities are both price and quality; you want the highest possible quality for the lowest possible price. There are many trade-offs between product features, quality and cost and many places to shop. You are uniquely qualified to evaluate all the permutations and to make the correct choice. Such gifts are never returned. This is a first party purchase; the person paying is the person using.

         Second Party Purchase:  Your Uncle Warbucks sends a generous check for you to buy a gift for yourself. You remain the best judge of what to buy for yourself, but you now are tempted to purchase something you would not have bought with your own money. You still want high quality because you are consuming the product, but you are not as concerned about price. When someone else is paying, the temptation to splurge is great. This is a second party purchase; the person using is not the person paying.

         The typical Christmas present is one you buy for someone with your own money. However, you often are reduced to guesses about the needs and wants of others, even those close to you. Because you are spending your own money, you care about cost but are less concerned with quality, as you are not using the product. You don’t invest time comparison shopping and your gift is likely to be returned. This is a different example of a second party purchase; the person paying is not the person using.

       Third Party Purchase:  Now we have the situation where you buy a present for someone else with money supplied by a third party. Say your boss asks you to buy a present for a customer. You buy the present with money that is not your own; therefore, you do not care about the cost. You are not going to consume the present; therefore, you don’t care about the quality – or even the appropriateness of the gift. You have absolutely no idea what the person may want or like. You don’t waste time shopping and buy what only can be described as a white elephant and certain to be returned. This is by far the worst of all Christmas gifts; it is called a third party purchase.

* * * * * * * * * * * * * * * * * * * * * * * * * *

      All government spending consists of third party purchases. Government takes money from you and others and spends it based on its priorities; often, there is not even the pretense of acting in your interest. They are not concerned with either cost or quality. But it gets even worse. Government agencies and individual bureaucrats have their own priorities which often are directly opposed to yours; they respond to their own personal incentives and disincentives. It is akin to shopping for a customer and intentionally buying a present you know the customer doesn’t want, need or like.

       The lessons of the three gifts of Christmas apply with a vengeance to health care. The cost of government funded health care continues to skyrocket while, at the same time, service and quality deteriorate. With single-payer health care, patients often are treated shabbily because they are not the customer – it is a third party purchase.

     Contrast this to private health care, the norm in dentistry, ophthalmology and cosmetic surgery. The inflation-adjusted cost of such private health care is stable or decreasing, while quality and service are good. When you visit your ophthalmologist, dentist or cosmetic surgeon you are treated with unfailing courtesy because this is a first party transaction and, if not treated well, you go elsewhere. The most powerful force on earth is a consumer armed with a free choice as in a first party transaction.


Our next post previews MLLG’s plans for 2019 plus another pithy topic.

Micro Topics – 2016 Election – Latest from BHO

Capitalism makes our lives better without any plan for doing so; having such a plan however is a guarantee that our lives will become miserable.
Micro Topics – 2016 Election – Latest from BHO
By: George Noga – December 9, 2018

Micro Topics: Give a man a fish and he eats for a day; promise enough men free fish and you win elections. . . . .  Obama famously said “I have a pen”. Trump has an eraser and it is huge. . . . . The family deported together stays together. . . . . In California you go to jail for using a plastic straw, but crossing the border illegally gets you sanctuary and free stuff. . . . . Che Guevara: “I don’t need proof to execute a man; I only need proof it is necessary.”. . . . Capitalism makes our lives better without any plan to do so; having such a plan assures our lives will be miserable. . . . . There is only one everyday product in America that we must wait in long lines to purchase: a postage stamp.

Micro Topics II: Seen recently around a cauldron auditioning for Macbeth: Maxine Waters, Diane Feinstein, Kamala Harris, Nancy Pelosi and Barbara Boxer. California is like the mythical Germanic kingdom where candy grows on trees, lemonade flows in rivers and the fattest, ugliest and stupidest person is king or, in this case, queen . . . . .  “You can observe a lot just by watching.” (Yogi Berra) . . . .  Jubilee soon will be on the progressive agenda; it’s their version of biblical every 50-year debt forgiveness. . . . . If Trump nominated Hillary for SCOTUS, we could have had the FBI investigate her.

Hidden in Plain Sight: What really happened November 8, 2016? Two reporters spent the entire campaign on parts of the old Lincoln Highway in the American heartland. Their new book, What Really Happened, explains Trump’s victory. The book describes Bonnie Smith, from a small Ohio town. Her parents were Democrats; her husband is a Democrat, she was a Democrat and the county she lives in had not voted Republican for as long as anyone remembers. The county (Ashtabula) went for Obama by 55% twice but Trump beat Clinton by 19 points – a swing of 30 points. The same story played out in hundreds of similar communities throughout the area. Trump stumped there 18 times while Hillary was in California raising megabucks from elites.

Bonnie Smith is a mother of three who worked long and hard to save enough money to open a donut shop. She gets up at 1:30 AM to begin making donuts by 2:30 AM. Following are her words: “I am not sure what happened, but I started to look around my town and country and I was just not in the mood anymore to show up and vote for who my party tells me to vote for. I am kind of like that voter that was hiding in plain sight that no one saw coming. I was right there all along. I’ve seen the job losses here, the rise in crime, the meth and heroin problem, society losing hope and something just gave in with me.” Bonnie’s story speaks for many millions of other Americans.

Barack’s Baaaack: Obama now claims credit for the roaring economy. This from the same person who said, “Two percent growth is the new normal and we should get used to it.” Now, BHO and his acolytes put forth a metaphor of a lid screwed tightly onto a container. They assert BHO exerted superhuman efforts to loosen the lid such that once Trump took over, the lid (presumably holding back the economy) was easily removed and, voila, boom times followed – all due to Barack Obama loosening the lid.

For his entire eight years, BHO did all he could to tighten the lid on the economy, all the while preaching his little sermons whose subtext always was how smart he was and how his opponents were dim-witted, Neanderthal racists. I don’t believe Bonnie Smith and the other good folks in Ashtabula County, Ohio buy into Obama’s metaphor.

Our next post, about the four gifts of Christmas, is the last for this year. 

Enduring Lessons of Thanksgiving

We have become disconnected from and ignorant about the source of our great prosperity for which we give thanks. The earliest Americans, who lived under socialism, understood.
Enduring Lessons of Thanksgiving
By: George Noga – November 18, 2018

       Your children and grandchildren undoubtedly have been indoctrinated in the Thanksgiving narrative foisted on them by government schools and the media. You know, the one about Pilgrims celebrating their abundant first harvest and sharing it with Native Americans. It is a warm, fuzzy, politically correct, multi-cultural, feel-good myth, but it ignores the enduring lessons of Jamestown and Plymouth.

          Colonists arriving in Jamestown in 1607 found fertile soil and an abundance of game, fruit and nuts. Everything went into a common store owned by everyone and hence, no one. There was no direct connection between work and benefit. As with socialism everywhere, there soon was starvation amidst plenty. Within six months all but 38 died – most from starvation. In 1609 another 500 settlers arrived; six months later 440 more had died from starvation. In desperation, they turned to cannibalism.

          Then a new governor, Sir Thomas Dale, arrived. His first action was to give each man 3 acres, while requiring him to work one month a year for the common wheal, equal to a flat tax of 8.33%. Overnight the colony prospered; people became inventive and industrious. John Rolfe, husband of the real Pocahontas (not Elizabeth Warren), wrote about how private property had turned everything around. Jamestown’s first good harvest in 1611 was a direct result of abandoning socialism for private property.

       Fast forward to 1620; when the Pilgrims landed, they were governed under an arrangement that established communal property ownership. Everything went into  a common stock and was withdrawn by anyone as needed. This was pure communism: from each according to his ability, to each according to his need. Soon enough, they were reduced to eating rats and 50% of them died. Again, starvation amidst plenty.

     Governor Bradford took action. As Dale had done in Jamestown, he instituted private property rights, granting a parcel of land to each family. In Bradford’s words: “This led to good success, for it made all hands industrious. Much corn was planted; women now went willingly into the fields and took their little ones with them, which before was thought to be tyranny and oppression.” At the next harvest in 1621, there was enough of an abundance to share – thanks once again to private property rights.

       If the Pilgrims could not make socialism work, no one can. They were deeply religious, homogeneous, few in number and their survival depended on one another. Nevertheless, they starved to death en masse rather than work collectively. They did not tinker with, modify or seek to perfect socialism; they abandoned it as a failure.

         Over 400 years ago, the earliest American settlers understood socialism far better than Bernie Sanders, Andrew Gillum and Ocasio-Cortez, who are advocating that America return to the principles that created mass starvation in Jamestown, Plymouth and now Venezuela. Without liberty and property rights there is no abundance and there is no Thanksgiving. Socialism is pure evil and incapable of being refined.

       Teach your kids and grandkids the authentic lessons of Thanksgiving; you can begin by having them read this post. When society breaks the link between work and benefit, the inevitable results are privation and misery. No socialist scheme has ever worked; they all fail for the same reason, i.e. they are antithetical to human nature. If you want a veritable cornucopia to share with others, only capitalism can produce it.

       As in Jamestown and Plymouth, socialism always creates starvation (and even cannibalism) amidst plenty. Our ancestors found it so repugnant, they died rather than alter their human nature to make collectivism succeed. This year, let’s be thankful for the ineluctable lessons of early America: socialism fails and capitalism succeeds!

Next week’s post is about the politicization of science. 

Financial Repression

At the darkest hour of the crisis, I can see the state confiscating all IRA, 401(k) and private/corporate pension assets and transferring them into Social Security.
Financial Repression
By: George Noga – November 11, 2018

     If the term financial repression is new to you, get used to it! You already are experiencing it and it will get much worse as the spending crisis ratchets up. Financial repression is government action that insidiously transfers wealth from the private to the public sector and, in particular, facilitates government financing of its massive debt.

        Repression is already here; thus far, we have seen only less virulent forms: (1) artificially low (zero) interest rates that savaged savings and deferred the consequences of the government’s debt binge; (2) multiple bouts of quantitative easing, driving up prices of government bonds and suppressing interest rates; (3) regulations for banks to hold more government bonds to meet capital requirements; (4) increases in bank reserve requirements; and (5) early salvos in the war on cash. Following are the top five forms of repression you can expect as the spending crisis goes thermonuclear.

1.  Negative Interest Rates and the War on Cash  These go hand-in-hand; negative rates won’t work if citizens can hold cash as they are much better off with cash than negative rates. In Japan, the sale of safes soared when rates went negative. Europe wants to ban the 500 Euro note and the US the $100 bill. Canada, Singapore and many other countries have phased out large denomination notes. Cash can protect citizens from an overpowering state and that is precisely why the state has declared war on cash.

2. Currency and Capital Controls  As the spending crisis heats up, citizens are better off moving all or some of their funds to other countries. There is no doubt the government will put a stop to this with currency controls – as have all other nations in similar straits. Government also will regulate the flow of capital and capital markets by various means including taxation, regulation, prohibitions and mandates.

3. Bail-Ins During the spending crisis, banks will fail. Governments have established bail-in provisions requiring depositors of such banks to make the banks solvent by confiscating a portion of their deposits. Recently, Cyprus proposed taking 9.9% from every depositor. The state may palliate this by proffering worthless equity or bonds in the failed bank as compensation. Again, this ties into the war on cash; bail-ins won’t work unless citizens are forced to keep their money in banks or other institutions.

4. Seizure of IRA, 401(k) and Pension Assets Throughout history, pension funds have proven the quickest and easiest for politicians to steal. In recent years, Poland, Hungary, Bulgaria, Ireland and France have, through one artifice or another, seized money from personal, company and/or public pension accounts. Currently, there is $30 trillion of pension assets in the US; if you believe these are safe, you also believe in the Tooth Fairy. The Obama Administration once prepared a working paper outlining how government could seize 25% of Americans’ assets in IRA and 401(k) accounts.

5. Debt Restructure The state can forcibly restructure its debt, which can take many (or multiple) forms: (1) lengthen maturities; (2) impose a haircut, i.e. writedown of principal; (3) lower the interest rate – even to a negative rate; (4) require rollover; (5) delay or prevent redemption; (6) conversion to other securities; and (7) repudiation.

         Opportunities for financial repression are limited only by the imagination. More than likely, government will use all five of the forms of repression listed supra. I can see the state requiring IRA, 401(k) and private/corporate pension plans to own a mandated amount of government debt. At the darkest hour of the crisis, I can see the state taking over all (by then $50 trillion) private pension assets and converting them into highly politicized government pensions that revert to the state upon death.

       Government created this problem. Its ham-handed attempts to fix it will destroy America as we know it and create a lost generation of unfathomable desperation. That is why we passionately believe America needs more liberty and less government!

Don’t miss our special Thanksgiving posting – next from MLLG.