Not-a-Lemming : Bail out

How To Fix The U.S. Financial Problem

FutbolGuru — Tue, 17 Mar 2009 20:15:00 GMT

The reasons behind the collapse of the banking industry and its subsequent bailout by the government are going to be argued by pundits and experts for the next hundred years. There will be books written on it. It will be the subject of countless Ph.D. dissertations. Political candidates will reference it in their speeches – oh how they will use it in their speeches. But the root cause is easy: greed and dishonesty. But this should come as no surprise. If you went to college you should have seen it coming.

I matriculated at Auburn University in the fall of 1983. Bo Jackson was a junior that year and the most impressive athlete I’ve ever seen. How that kid could run. I had done extremely well in high school and we were toe-to-toe with the Rooskies. The military needed scientists for weapons research so I enrolled in physics. It was a difficult program so I buckled down and studied hard. I enjoyed my college experience and it wasn’t all work, but for the most part I spent the next seven years pursuing my degrees and there wasn’t time or energy for much else. But this wasn’t true for everyone at Auburn.

Along Magnolia Ave. and College St. were a number of large, manor houses, each of which had large, Greek letters on their facades. Kappa Alpha. Beta Theta Pi. Sigma Nu. Theta Chi. Lambda Lambda Lambda. (ß if you get that you are too old.) But I didn’t have time for a fraternity. Or the money. Nevertheless, on football weekends friends and I would sometimes go to their open parties which usually consisted of a very loud band – sometimes good, sometimes bad – with a lot of semi-drunk, underage people standing around holding plastic cups full of cheap beer. You remember the drill – or maybe you don’t.

I got to know people and as it turned out, there were very few physics or math or chemistry majors in fraternities. There were some engineering and biology students who were members but not many. Far and away the members of these fraternities were studying various derivatives of business; banking, finance, business, political science, or whatever. And they didn’t just party on football weekends. It was every weekend – Friday and Saturday, and a few times during the week. And not only were most of the people there breaking the law by drinking underage, they weren’t learning very much either.

Occasionally I would have one of these guys or gals in a class. Calculus, or physics, or more often, an elective like history. Invariably they would show up hung over, or not show up at all. At the time I wondered how they would pass the class and stay in school. But that wasn’t hard to figure out. They just cheated. I also wondered how they could afford to party so much. When I got to know some of them a little better I found out that too. When they ran out of money they called daddy and asked for more. Even then their grades were terrible and I wondered how they would be able to get a job. I didn’t figure that one out until after college; in business it isn’t so much a matter of what you know as who you know.

Fast forward twenty years and we find that the people running the nation’s financial system are the same people who got business degrees in college. A bunch of spoiled brats who partied their way through school, didn’t learn much in an easy curriculum, called daddy every time they needed money, cheated on every test and assignment, and wantonly disregarded laws they viewed as outdated or inconvenient. And got away with it. Beginning to sound like a familiar bunch, isn’t it?

I say the fastest way to fix this problem would be to kick these losers out and hire a bunch of scientists and engineers to untangle this mess. What is easier to understand, naked short selling or the Heisenberg Uncertaintly Principle? How to keep track of a million bank accounts, or how to keep track of a billion sub-atomic particles each doing something different? Going to the moon or thinking up some exotic financial derivative scheme? Figuring out exactly what North Korea’s military capability is up to, or booking a trip to the Caymans? Figuring out how to sequence DNA, or digging the toxic assets out of bundled securities?

Scientists and engineers are trained to work with huge amounts of data – far larger data sets than the paltry numbers used when dealing with money. The problems we attack are larger, far more complex with more variables, more unknowns, and in many cases, invisible forces acting on things we can’t directly see. Our understanding of mathematics is far more sophisticated than that of some business major. And for the most part since getting a degree in the hard sciences requires true discipline, we didn’t cheat our way through school.

When we needed a super weapon to stop a worldwide reign of terror who did we turn to? When polio was ravaging our children who provided the answer? When we asked what Saturn’s moon Titan looked like, who got the job done? Did business majors figure out the quantum mechanics that make computers possible? Did financiers determine the cause of global warming to give us time to fix it? Did political scientists deduce the structure of DNA? These problems are tough! The people who figured them out were smart, disciplined, and well-trained.

The world financial system is hosed. Similar scale problems include the German fiasco on the Eastern Front, the Soviet Union – all of it, global warming, and Reconstruction. Who do you think can fix it? Some guy who partied his way through school and has proven he can’t keep it straight. Or the dudes who figured out how to clone stem cells. I know where I’d put my money, and it ain’t on Wall Street.

-Futbol Guru, http://mises.org/Community/blogs/not-a-lemming

To be, or not to be... In Touch With Reality

FutbolGuru — Mon, 09 Feb 2009 17:02:00 GMT

One of the selling points of Mr. Obama as leader of the ‘free’ world was that he was/is in touch with reality. By this, of course, it is meant that his struggles have been similar to ours so he shares our values, ideals, and sensibilities. Naturally we assume this about him because he did not grow up the privileged son of a wealthy, decorated, World War II pilot. Or the son of an Admiral. He wasn’t a movie-star. He hadn’t been in elected office his entire professional life. The spoon in President Obama’s mouth was not silver but more like the spoons in our own humble mouths; stainless steel or plastic.

But is this assumption valid? For one thing there are many examples of people who came from humble beginnings only to have their world view twisted into something very different from that held by the common man. The easiest example of course has to be Bill Gates. He rose from nothing to become the wealthiest man in the world, and while his philanthropic efforts are laudable, a cursory look at his lifestyle leaves little doubt that he shares few sensibilities with you or I. Another excellent example is nearly every actor in Hollywood. The majority came from humble beginnings but it is far more difficult to find those with feet on the ground than their colleagues who’ve left planet Earth. Of course there are also examples of people who rise far above their origins yet retain their pragmatic view of life. Sam Walton comes to mind, who throughout his life continued to dress as he always had, drove pickup trucks, and visited his stores incognito. Doubtless he enjoyed his wealth and deservedly so, but those how knew him well always maintained that he was respectful and understanding of the average citizen. We all know examples from each group. We hold those in the former in disdain, and those in the latter in high regard.

Now back to Mr. Obama. It was difficult not to be swayed by the notion that his humble beginnings, which were played at length during the campaign, provided him with a world view consistent with prudence, frugality, and pragmatism. In other words, he wasn’t going to be irresponsible and wasteful and would try to reign in those who were. But I’m beginning to wonder if I may have missed the mark, or even been lied to. While Mr. Obama talked a lot about being in touch with reality, his actions since taking office speak a very different language. Most notably his decision to limit the bonuses paid to executives of failing banks.

Mr. Obama has proposed to limit the bonuses paid to executives of failing banks to $500,000. A half-million dollars. Let’s get this straight. These executives work for FAILING BANKS. They drove their business into the ground through greed and took your money with them. It got so bad in fact that they came to the government and begged – BEGGED – for more money. Your money. And for that we’re going to limit their bonus to $500,000? So last year the executive got $1,200,000 and $500,000 is a punishment? And Mr. Obama claims to be in touch with reality? What reality does he claim to be in touch with, because that decision doesn’t exist in my world view.

A half-million dollars. $500,000. How many of us could eliminate our lifetime debt, have money left over for college for our kids, and still knock ten years off our retirement age with $500,000? I’m talking mortgage, cars, credit, everything, wiped clean, and still not have to work for two or three years. Money is time. How much of your life is $500,000 worth. And that’s what he’s limiting as bonuses to failed executives? On top of their base, six-figure pay?

Perhaps it is just because $500,000 is so much less than $750,000,000,000 that he thought it would be okay. Or that it wouldn’t matter. Or that we wouldn’t notice. But this isn’t a matter of degree. The Nazis murdered 6,000,000 Jews during World War II. Does that mean we’re not supposed to prosecute people who only murder one person? What these executives deserve is to be fired, like would happen to you or I if we failed even far less spectacularly. What they should do, if they had a shred of honor and decency, is volunteer to work for free until the problem they created is fixed. Then maybe they can start drawing an hourly wage like the rest of us. But for some reason they, and our politicians, think they are entitled to a standard of living far above our own. And the most amazing thing about it all is that they’re using our money to get it! When they say this, what they really mean is, our lives aren’t important when it come to their standard of living. Feudalism.

In touch with reality. I think he needs a reality check.

-Futbol Guru, http://mises.org/community/blogs/not-a-lemming

The Return of Feudalism

FutbolGuru — Fri, 06 Feb 2009 16:09:00 GMT

They say things come to you in the shower. That doesn’t usually happen with me. More often, during the act of climbing into bed. Then I have to get up and write the idea down, for experience has taught me if I don’t write it down, no matter how Earth-shattering the thought, it will be gone the next morning. But this morning while I was shaving a light bulb went off.

There used to be something called a ‘Retirement Plan.’ You’d go to work for a company and they would begin a retirement plan. Basically they’d put a little money aside each month and when you were old and gray, they’d start siphoning it back to you. It would come agonizingly slow but at least it was there. Sort of like serfdom in the old Feudal systems of Europe. In exchange for work, the Lord provides care and protection.

But retirement plans became expensive. And people clamored about not having any personal control over ‘their’ money. Companies took the opportunity to eliminate the costly retirement plans in favor of giving executives larger bonuses. But our government, always looking out for the little guy, said there had to be something for the workers. (They must have known even then that Social Security wasn’t going to be there.) So they came up with the 401K. You have the option to place a portion of your income, pre-tax, into an investment vehicle over which you have ‘control.’ Some companies even put money in there for you. How nice. It can then grow with the market. Sounds good on paper. Or does it?

Think about what’s actually going on here. The portion of 401K provided by your employer isn’t a gift. It is money that could have just as well come to you in the form of compensation. Sort of like FICA which the government takes for your retirement plan. You pay 7.5% and your employer picks up the other 7.5%. Of course they don’t ‘pick it up.’ They pull it out of funds you earned for a total of 15%. So 15% of your income goes to FICA retirement. Then your company, or you, puts some money into your 401K, in my case 15% for your, uh, retirement. That’s 30% of my income for retirement. Keep in mind that all this cash is flowing monthly into the stock market, continuously, like a river. Even now.

I can’t get to any of this - my - money right now. The Social Security System has no ‘fund’ so there’s nothing there to get. And my 401K isn’t available until I’m too old to use it. I can take it out but I pay a huge penalty, close to half. So it isn’t available to use in my productive life for things like, starting a business, paying for college, or stimulating the economy. So while you can’t use your money to grow your life, there are others who can use your money to grow their lives. This may seem like swindling, but this system was set up by laws.

Yes, you heard me right. While your income isn’t available to you, it is made available to other private citizens in a process protected by U.S. law. Consider the following argument.

Keeping your 401K in a ‘safe’ money market account produces virtually no growth so isn’t a viable retirement plan. So you move it into mutual funds. Mutual funds then make the money available to companies to use as investment capital through the purchase of stocks. These mutual funds are administered by investment banks and other institutions which, as we have all seen, almost without exception, pay their executives ridiculously huge bonuses even though they lost all the money you had been forced to put aside for retirement. So while the money your earned can’t do you any good, it supports a lavish lifestyle for others.

That’s bad enough, but there’s an even more chilling revelation hidden in this web of deceit. One of the strongest arguments against socialism is always the exorbitantly high taxes needed to pay for social services. On the order of forty to fifty percent in some countries. But we’re already paying upwards of 30% for retirement alone! Add income tax and that jumps to 45%. Health care comes out of our checks too, which easily pushes the rate to 50%. State and local taxes drive it north of 60%. In California it’s more like 70%.

Friends, we’re socialist already. But it gets worse. Far worse, because for most of us, there are no social services to be had! The hallmark of the socialist state – the safety net – is missing. While other socialist countries provide retirement and health care – even if it isn’t the best – the middle class in this country has neither. Social Security is insolvent and our 401K’s are worthless. Health care is only available while you’re working. So while we’re socialist, we’re not. We have the high taxes, but not the services. Where did the money go? I hear some Wall Street execs took home in excess of 2 billion dollars in compensation last year.

In fact, we’ve come full circle. We’re back to feudalism. Bad feudalism. In a good feudal relationship, the Lord expected work but provided protection. As long as he wasn’t a cruel, greedy bastard, the system worked surprisingly well. When he was a cruel, greedy bastard the Lord rolled in lavish excess, stopped providing protection, yet demanded the serfs continue to work. The serfs starved and complained but the Lords had lost the fundamental human element of compassion so simply shut the gates on their castles.

The question is, what are we going to do about it? America isn’t feudal Europe. In feudal Europe the people had no rights and the wealthy class had no accountability. We still have rights and there is still accountability. For now. But for how much longer? Those in power have already shown their disdain for good government and good business in favor of hoarding wealth and land. They passed laws which made your money available to them and not to you. They know they have swindled us and that we’ve done nothing about it. When people behave badly without consequence they grow only more bold. Why should they not feel that they are fundamentally entitled just because the masses are still restrained by the concepts of law and ethics? Concepts which they have found to be inconvenient or never had in the first place. Will they win in their latest ruse to increase their fortunes by asking us to buy things we don’t need, made in a country not ours, to ‘jumpstart’ the economy and get money they don’t need flowing back into their coffers?

I’m not a fan of socialism, but it is better than what we have now. And unless we the people take back not only our government, but our economy, we’ll wind up with even less. What is that going to take? There are those who say that the Tree of Liberty requires blood and sometimes they are right. But it hasn’t gone that far yet. Not even close. And in fact, the solution is much simpler, won’t cost a thing, and would actually save us money.

All that in between lifting the razor to my face and pulling it down my cheek. I guess you can have a thought in the shower.

-Futbol Guru, http://mises.org/community/blogs/not-a-lemming

I'm Not One of Those

FutbolGuru — Fri, 02 Jan 2009 03:17:00 GMT

It has become unfashionable in some circles to speak out against the rich. Of course it is a hobby on the left, and it is not at all uncommon for a wealthy congressman or actor to rail against excess, such as former South Carolina Senator Ernest Hollings’, famous statement that, “There’s too much consumin’ goin’ on.” Whether he’s right or wrong, his statement smacks of pandering, and for the most part middle-class Americans have been conditioned against openly criticizing the rich. We are free in this country and part of being free is the freedom to make tons of money and live the way we want. Who’s business is it to question how much money another person makes, even if it rises into the billions betting against our own economy and helping raise oil prices? In fact, speaking out against the rich is generally considered a sign of envy or jealousy and the speaker is often cast as less ambitious/intelligent/or otherwise lucky as the one he’s attacking. Across a large segment of society it has become un-American to speak out against wealth. It is even labeled as communist or socialist.

But it is exactly what I’ve been doing on Not-a-Lemming. Especially in my previous post. And I’m no communist or socialist. Most people who know me would call me a conservative. So how can I claim to be a conservative while at the same time bashing the rich in the land of rugged individualism? Can a conservative do that? And please don’t confuse the term ‘Conservative’ with the party ‘Republican’ or the orientation, ‘Right’. They are not now, nor have they ever been congruent even if their intersection is not the empty set. I can do it because I’m not bashing the rich. I am a staunch capitalist and am strongly in favor of innovation and the entrepreneurial spirit.

I got an iPod shuffle for Christmas. Actually I bought it for myself when I was shopping for my kids. It is one of the most amazing little devices I’ve ever seen. I’m no technophobe and have been aware of, and owned, iPods since their inception. But I remember a world before iPods. A world of transistor radios that rarely worked and clunky cassette and CD Walkmans that chewed through batteries like a teenage druggy burning through an inheritance. I now have a tiny device just a little larger than a postage stamp that can deliver hours of crystal clear music. That is innovation! That is legitimate wealth. Kudos to you Mr. Jobs. Live however you like. You’ve earned it, sir. And you’ve given back.

On the other hand, I live in a town supported primarily by government money. If our spigot ever dries up, this place with shrivel like lettuce in Palm Springs. A lot of people in this town start businesses, grow them, sell them, and get rich. Then they walk around with their heads in the air, literally, and puff about their innovation, sacrifice, and entrepreneurial skill. Except they built their businesses entirely on government money. Sure there were some long days writing proposals for government contracts, but for the most part their was no real personal investment, and the seed product of the business was almost always taken (some say stolen) from a competing company when the new business owner quit and took it with him. And these business owners invariably feel they earned it entirely through their own hard work and rarely give any of it back. Choosing rather to spend their windfall of fancy cars, second homes, and glitzy vacations.

Now Mr. Jobs has a pretty nice home, and I’ll wager that he’s got some nice cars too. And maybe even vacations from time to time, but there is a fundamental difference between what he does, and what these tax-suckers do. And now we’ve taken it to an entirely different level. A level which makes government contractors look like Mother Teresa. I’ll say it again as I’ve said it before, $750,000,000,000. And who acted like we were obligated to give it to them? Banks! Banks that took trillions (that’s $1e12 for you geeks out there) of investor money and evaporated it on bad loans in get-rich-quick schemes. They literally held the international monetary system hostage when they adopted an attitude that said, “Okay, don’t give it to us and see what happens.” How dare those bastards! And after losing our money!

This isn’t capitalism. It’s bad socialism. Perhaps even closer to Hitler’s fascism where the government propped up major industries to keep the war going. Yes, it is banks getting the money, but what about the executives that got them into that position? The failed executives. Did they give back their six-figure+ bonuses? Did they lose their mansions and second homes and personal bank accounts? Did their children have to drop out of the Ivy League schools they are attending? Will they be going on vacation this summer? Are their garages still filled with Mercedes and BMWs? Are their pension plans empty?

These people remained rich, and that is wrong. It is wrong because I’m NOT a communist. It is wrong because I’m NOT a socialist. In Soviet Russia party members became fabulously wealthy by diverting public rubles to their own accounts. All it required was a law. In socialist nations, the upper-class administrates public concerns which pay their salary out of the till. The same people who happen to run the government. And now that is America, too. I'm not saying they aren't entitled to it if they have worked for it. I'm just saying they aren't entitled to 14% of the GNP if they haven't worked for it. Especially after it was their poor management and lack of fiscal responsibility that got us into this mess in the first place.

Furthermore, I can think of no greater depressing effect on innovation and entrepreneurship than the bank bailout and the likely auto bailout. It has gazed straight into the eyes of the middle class and said, “fuck you.” I don’t apologize for the expletive. Expletives have their place, and this is it. This isn’t railing against the rich. This is railing against thievery. This is railing against communism and socialism at its worst. What incentive do I have to continue working night after night on actual products I hope to one day sell to actual people, when those who have figured out how to put their hand in the public till and pull out a dollar seem to have such a higher success rate? America was the land of innovation because innovation was rewarded. But how much longer will that be true in this climate? Especially when it is noted that those who actually earned money are far more willing to capitalize others than those who stole it. As the ratio of earners to thieves tips ever more in favor of the thieves, who for some reason feel they deserve their privileged lifestyle, actual seed money will become less, and less available. Innovators will leave for other places with fewer regulation and more favorable populations, and America’s monopoly on innovation will wither.

It is already happening. Europe, as it emerges from the effects of two world wars is gaining momentum. China, momentarily set back by the economic downturn, will regain her feet. And America, with capitol tied up in the hands of thieves, will seem increasingly less attractive to the talented and ambitious. It’s happened before.

So I reject any and all assertions that I am un-American, or communist, or socialist, or even jealous. I am a capitalist American who believes in fair play, equality of opportunity, and reward for innovation. You want to find a communist, go to an investment bank. He’ll be hiding in the closet under a pile of taxpayer money.

Next: Partners in Crime

-Futbol Guru, http://mises.org/Community/blogs/not-a-lemming

Protection At Any Cost

FutbolGuru — Fri, 02 Jan 2009 03:04:00 GMT

We forget things. We forget because we are people, and people are lemmings. For a moment, recall the basis for my analysis – the myth of the lemming. Lemmings DO NOT rush into the sea and commit mass suicide. Lemmings can, however, be frightened, especially by those who seek to benefit from their panicky mob behavior, whether they be unscrupulous film makers or former chairmen of major financial institutions. That is the lemming, those who fall prey to the machinations of others and join the crowd in running whatever direction without first checking where that direction leads. Lemmings, little, furry morons.

One of the things I seek to do on Not-A-Lemming is state the obvious. I do it because nobody else seems to want to. I do it because it is so often the obvious that is overlooked. Sort of like asking the furry, little hoard, "Why is everybody running this way when there's a cliff over there?" And that is the case today.

Seven hundred and fifty billion dollars. Also written $750,000,000,000. At my engineer’s salary I’d have to work for eight million years to make that much money. Actually 8.3 million years. (Or 8.3 million engineers could work for a year.) I’m going to keep harping on the $750,000,000,000 and writing it as $750,000,000,000, and not $750billion, or even 750 Gigabucks, because we should never forget that fourteen percent of our GNP was handed over to banks by a republican president backed by a democrat congress. Both parties are equally culpable in selling the middle class.

So why did they do it? No oversight. No accountability. That is enough money to give every person in New York City, all 8.7 million of them, my yearly salary, earned with 17 years of experience and a Masters Degree in stuff that’s just frankly, damn hard. Why? As always, history holds the answer.

I work hard for the living I bring home – which doesn’t go far on a family of five. Eighty hours a week, forty-nine weeks a year. I get three weeks of vacation but no sick leave. My 401K is a joke; it stank before the stock market tanked. I’ve got a few thousand dollars in the bank. And I do mean, a few. Realistically I’m looking at a second mortgage to get my kids through college and retirement isn’t really an option. I don’t really like my job. I tried for a Ph.D., didn’t have the cash to finish it, and wound up doing this. In a nutshell, my version of the American dream is kind of disappointing. If it weren’t for my utterly fantastic wife and exemplary kids it would completely suck. After my nine-hour day I write just about every evening working on novels I hope to someday publish, but it’s a long shot and I know it. I can’t even get anyone in New York to reply to my query letters. But my story isn’t unique. I’m a law-abiding, tax-paying, hard-working American. The backbone of our nation. I am Atlas. Something to be proud of. I’m not complaining. I’m connecting. With you. Because your American dream is pretty sweaty, too.

Now imagine a different life. Basically enough money to not worry about money. What you would do with it is your business. A lot of people buy cars, boats, fancy homes, etc. And it can be a trap. I’ve seen more than a few sucked in and ground up. Success can definitely be a trap. But it doesn’t have to be. Just imagine that life where you don’t wake up in the middle of the night worrying about how you’re going to put your kids through college. Or how you’re going to fix the roof you know is leaking in that downpour. A life where you’re not anxious about retiring someday, before you’re too old to use it. A life where you can live in the way of your choosing whether it be working a job you love, doing art, contributing to society. Or just sitting around wasting time at a beach on Manihi. (Look it up on Google Earth.) To each his own.

This isn’t reality for most of us. But it is for some. People who can, do. And history has shown that those who live this privileged life immediately begin to feel it is their right, and will do anything to protect it. Anything. Lie, kill, steal, even commit genocide if necessary. No affluent culture has escaped this doom; an entitlement class, just as dependent as the welfare poor, who will go to any length to not worry, to not work, to live their life of ease. Am I stating the obvious? That’s what I do. That’s all I do. Those of means will do anything to protect their privileged life. Never forget that.

$750,000,000,000. Why? How did our leadership come to the conclusion that it should be simply handed over without any strings attached? Maybe we should look at who these leaders are. Senators and representatives have a pretty sweet deal. Reps make $145,000 a year, senators make $165,200 a year. With expenses. And a staff. And an office. And influence for life. That adds up to far more than $145,000 a year. And they don’t really have to work. They don’t even have to show up. And many of them started out wealthy. And they get elected with money. Money elects people. Not votes, not speeches, not even good looks or great legs. Just ask Mr. Obama who raised more than ever before. As the global financial system teetered on the brink – or so the lemmings thought – they sensed that their gravy train was in jeopardy. The wealthy are heavily invested. They lose enough money and they might not be able to take a European vacation next year, much less contribute to the party of their choice. The answer, take 14% of the US Gross National Product and use it to shore up their financial base. Works every time.

And don’t forget, one reason the stock market has tanked is because investors, aka, those with money, are pulling it out. The middle class has shrugged and left it in. They have no choice. They know their only chance is for the market to go back up. And it will. But the wealthy, who can pull their money, have, and it’s driving the market down, down, down. And then they went to congress with their hands out. And congress made sure they didn’t go away empty handed. Congress was in essence, giving the money to themselves.

So I guess understanding why congress would just hand over 8.3 million years of my salary is pretty simple. They were protecting their privileged life. And they didn’t even have to kill anyone to do it. I guess we should thank them.

NEXT: I'm Not One Of Those

-Futbol Guru, http://mises.org/Community/blogs/not-a-lemming

Supporting the Royals

FutbolGuru — Tue, 23 Dec 2008 15:28:00 GMT

In 1940 the Wehrmacht was the most successful army on Earth. Nazi Germany's insane leadership had hijacked their nation's professional military and sent them on a rampage across Europe. Prior to their failed invasion of Britain, which rested on the backs of the Luftwaffe, they had tasted only success. Part of this unprecedented run was because they were fighting against the French, and the French haven't won a major battle since before Waterloo. But they fought against the Poles, Belgians, Danes, Czechs, and Dutch, also, and met much stiffer resistance. Still, their mechanized infantry, combined with a lethal assault from above ,rendered the military answer of their foes quickly moot. A charge of heavy Polish cavalry against panzers is the last recorded used of organized cavalry in modern warefare. It was all they had. Even the British Expeditionary Force was no match for this new kind of Blitzkrieg warfare.

There are a variety of reasons that the Germans ultimately failed, starting with a political structure that was as evil as Satan himself. A megalomaniacal, paranoid dictator with delusions of diety didn't help either. But the regular German military man remained effective and ferocious right up to the end. Arguably the best sheer land-fighters of all time, in fact. Which is why the success of the Americans against the Germans on the ground is a bit difficult to understand. Their soldiers were seasoned, well-trained, and by all accounts, incredibly brave. Their equipment was for the most part, technologically superior. Their aircraft were second to none. American tanks were almost paltry by comparison. Yet in every meeting the Yanks advanced steadily against their debatably, militarily superior adversaries. Why?

In World War I, the machinegun entered the battlefield and everything changed. The old strategies disintegrated and hundreds of thousands of bright-eyed youths paid the price of foolish generals who sent them in human waves over the trenches and helplessly to die in no-man's land. By World War II these lessons had been learned and strategies changed. All but one. In World War II, in the Wermacht, the infantry man supported the heavy machine gun. The ground tactics of advance, capture, and hold, were based on squad units supporting heavy machine guns. The Americans on the other hand, had developed tactics in which heavy machine guns supported infantry. The difference is subtle and not immediately apparent, but the American tactical development allowed faster, more fluid movement as well as much quicker adjustment to changing battlefield conditions. So while German soldiers dug in around their MG42s and MG34s, fast moving Americans infantry, supported by their Browning Model 1919s, (still in use today, virtually unchanged, I might add) flanked and neutralized the German positions which were incapable of rapid adjustment. This isn't the only reason that the Americans prevailed, but it is an often overlooked and always underestimated effect.

So why are we supporting heavy machineguns, now?

There is a problem with the American economy. A huge problem. Multiple problems, in fact. There are root causes for this, but at the center of this root ball I believe is a central seed from which the mess has grown. Support of the heavy machinegun. There was a time, I believe, when industry supported the American worker. And industry, in this sense, is not a legal definition, but a person, because decisions are ultimately made by people - or once were. People who owned industrial concerns used the influx of capitol we known as stocks, to fuel business growth which in turn supported the community. And this means, supporting the individuals in the community. The people. Industry supported the workers. This doesn't mean that everyone got rich, but the central focus wasn't necessarily on acquiring individual wealth - or at least it wasn't the only focus as it has become today. Greed. The same thing that drove Hitler to crave every inch of Europe. Pure, unbridled, unadulterated, unmitigated, greed.

Fast forward to 2008. The support of the worker, by industry, is gone. The disappearance of American jobs is the most telling evidence and trumps any and all arguments against this assertion. It is now the worker that supports industry. Labor that fuels lives of almost unimaginable avarice. The difference is subtle, just as it was on the battlefields of Europe sixty years ago. But this time around it is the Americans who are getting their asses kicked. It is all about direction of flow. Emphasis of investment. Choices that benefit community as opposed to bottom line. Because in the end, if the community dies, the bottom line is meaningless. Work in America is no longer an activity, it is a state of being into which one is born and in which they usually die. Can everyone become successful and wealthy? No. But when the incentive of success and wealth is removed, or becomes nearly imporssible to attain without subterfuge, the engine that drives the American economy dies with it.

President-elect Obama's plan for fixing the economy is for the Middle Class to stop saving their money and resume buying crap they don't need by borrowing money they don't have. This isn't a slap against the president elect because it is the same plan on the other side of the aisle. The only difference between the two parties driving our nation into the ground is how to get the 'country' involved. But I say the entire scenario is backward. The entire economy is backward. The solution isn't to get people to behave foolishly so the coffers of business owners will fill up again, it is getting capitol and opportunity back into the hands of the infantry. In nature, forces don't act from low potential towards high potential. Rocks don't fall up. Water doesn't run uphill. Air doesn't move from low to high pressure. And money won't flow, at least for long, from poor to rich. And giving more ammunition to the machinegunners while leaving the infantry to throw rocks isn't going to get us very far.

Tell me the infantry isn't supporting the machinegun. Tell me it isn't all about greed.

NEXT: Why They Won't Listen

-Futbol Guru, http://mises.org/Community/blogs/not-a-lemming

The Tree of Liberty Needs Watering

FutbolGuru — Wed, 17 Dec 2008 16:12:00 GMT

I work in the defense industry. As many may know this industry is funded by the government, which means the money comes from tax-payer dollars. Many towns and cities across this nation survive and in some cases thrive off of these tax dollars. Some people get really, really rich and our military is second to none.

Regardless of ones feelings on this subject, it should come as a comfort that the government keeps pretty close track of this funding. Are there abuses? Certainly. And there is even fraud. But for the most part, a strict accounting system set in place by Federal Law ensures that the government’s money, your taxes and mine, are actually going to produce something, even if that something is pork. At my company we have weekly meetings on virtually every program where government employees charged with tracking spending do exactly that. Individual sessions are even more frequent. By and large the government people are polite and professional, our program managers are kind and professional, and everything slides along in greased grooves.

So what the hell is going on with the bailout? $750,000,000,000 has simply been handed over to banks with zero accountability. 14% of our Gross National Product. 14 cents of every dollar you spent this year. There are no auditors. No accounting. Not even any agency with oversight on how the money is spent. That’s 44 times larger than NASA’s budget request for next year. One and-a-half times larger than the entire military. Army, Navy, Air Force, and Marines, tanks, ships, planes, submarines, salaries, wars, etc. Everything it takes to run the military, including the money that goes to slimy contractors for R&D. With virtually no debate, and no control over how the money will be spent, or even the authority to ask, 14% of our GNP was transferred to banks; the same banks that hit you with a $50 fee for bouncing a check then repossess your car for missing a payment. I would sum this up in a single sentence but it would include the words ‘revolution’ and ‘violent overthrow’ and that would be against the law.

Tomorrow: A Reasonable Solution for the Problem We Have.

Futbol Guru, http://mises.org/Community/blogs/not-a-lemming

Anatomy of a Lemming

FutbolGuru — Wed, 01 Oct 2008 21:45:00 GMT

Lemmus trimucronatus is a medium-sized rodent, a little bigger than a rat, that lives in cool climates. They are sort of like tundral-ground hogs. Back in the late fifties the Disney nature documentary "White Wilderness" showed a herd of lemmings rushing headlong over a cliff and falling to their deaths in the icy water. “Why do they do this?” we all asked. But as the film said, “It is not given to man to understand all of nature’s mysteries.” Regardless, the vision was so powerful it instantly became part of our culture and was applied to all manner of self-destructive group behavior. Except of course for the fact that the entire sequence was faked. (Which in retrospect should have been obvious.) The lemmings were actually imported into the area and then induced by the film maker into panicking and rushing over a cliff. See it for yourself à here. I guess Disney wasn't as eco-friendly then as it is now.

As our President said a few days ago, if we don’t act quickly and give him $750,000,000,000 ( 750 Gigabucks, .75 Teradollars, etc.) our financial system will collapse. You know, when he says that I can just see him standing before the nation telling us all that if we don’t act immediately, Saddam will have nuclear weapons in just a few months. And he’ll use ‘em, partner. Turns out he didn't, couldn't, and probably wouldn't. Which in retrospect should have been obvious. To some of us it was.

Lemmings. Just who are the lemmus trimucronatus here? And who’s the film maker?

In fact, lemmings do not naturally commit mass suicide. They do however have an easily exploitable flight response, or perhaps herd instinct is a better choice of words. Sort of like another species. Disney has exploited this many times as have others. So if you see a large mass of lemmings people all headed in the same direction my advice would be to stay away.

Futbol Guru, http://mises.org/Community/blogs/not-a-lemming