Tuesday, January 31, 2017

Political Demonstrations

"Take a look. The enemy...how long has it been since you've seen him? I mean really seen him? Take a good look. Well, what do you think? Do I look like somebody who wants to blow up the world? She thinks I do. Dammit, stop thinking that all Americans are goons and idiots. They are probably as many people in my country that don't want those weapons lying around as there are in yours--maybe more. I'm not saying they're right. Maybe those weapons are keeping the peace exactly as they say they are. But there's one thing I do know. You're wrong. You're wrong when you lump together every damn thing you don't like and call it American. If you know me and don't like me, fair enough. But if you don't know me and don't like me, that's just damn foolishness."
--Carl Hostrup (Reunion at Fairborough)

What is the real driver behind political demonstrations? By publicly amassing in large numbers to march, wave signs, and chant, protesters might think that if they scream loud enough, then they will turn people toward their view.

This seems naive. Just as likely if not more so is that people will be turned off by what can be seen as juvenile behavior--i.e., people kicking and screaming like little kids because something is occurring that they don't like. As such, demonstrating political opinion in public view might reduce support for that viewpoint.

More plausible, it seems, is the notion that demonstrations make protesters feel good about themselves. Similar to high school pep rallies, demonstrations promote mutual assurance among the protesters that there is strength and solidarity in numbers. Mix in some civil disobedience from occasional arrests for, say, disorderly conduct and you get a mechanism for self-validating rebellion.

Which brings us to another possible motivation for political demonstration: to spark unrest. Demonstrating, for example, in the midst of someone else's political rally is like a spark in search of tinder. The idea is to incite violence, and somehow turn the narrative to implicate the other side.

By taking on the appearance of victims rather than of instigators, demonstrators hope to indirectly attract support for one's position by winning the sympathy of onlookers.

Monday, January 30, 2017

One In, Two Out

And when one little bump
Leads to shock
Miss a beat
You run for cover and there's heat
--The Fixx

President Donald Trump has been fulfilling campaign promises during his first week+ in office via a flurry of executive orders and administrative law. This morning he signed one related to his promise of reducing regulation.

The crux of the order is this: For every new regulation proposed, two regulations are to be eliminated. It also caps the cost of federal regulation for the remainder of the fiscal year and creates a budget process for new regulations in the next fiscal year to be set by the White House.

For domestic markets that have been choking on ever increasing regulation, this action is cause for optimism.

Sunday, January 29, 2017

Cal Exit

There she stood in the doorway
I heard the mission bell
I remember thinking to myself
This could be heaven or this could be hell

This election cycle continues to spawn ironic, and often welcome, behavior. Some of it is taking place in California. 

Over the years, leftist ideology has found a home in California with academic institutions such as Cal Berkeley serving as incubators. Yet, since Trump's election, the bastion state of socialistic thought has been considering actions that liberty lovers should applaud.

One is the possibility of secession. Polls suggest that one in three Californians now supports withdrawal from the union, and signature gathering by activists groups is underway. The group Yes California states includes this in its secession rationale:

"This independence referendum...is about the right to self-determination and the concept of voluntary association, both of which are supported by constitutional and international law." [emphasis mine]

Well said. Of course, similar rationale offered by Southern states for breaking away from the union after Lincoln's election has been traditionally viewed by leftists as racist. There is no teacher quite like experience, it appears.

Another possibility being entertained by California is not paying federal taxes. After President Trump threatened last week to cut federal funds from so-called 'sanctuary cities' engaged in harboring illegal aliens, California state officials are reportedly studying ways to withhold payment of federal taxes. California is one of a handful of 'donor states' that collects more in federal taxes than is received in federal funding.

At this time, it does not appear that refusal to forward tax money to the feds would result in the suspension of tax collection. Instead, federal tax payments would remain in the state to offset federal funding cuts to sanctuary cities. 

I have often wondered about what it would take to inspire a large group of US citizens to refuse to pay their income taxes. Such action would likely grind the entire tax collection scheme to a halt--perhaps for good. I hadn't conjured a scenario where historical supporters of the income tax scheme become the holdouts, but it seems an interesting step in the correct direction nonetheless.

If a libertarian-minded president was in office, then he/she would likely view California's actions as gifts that would hasten the process of shrinking the federal government and restoring freedom. Of course, how Trump might respond is anyone's guess. 

Meanwhile, I am enjoying the ironies associated with Cal Exit prospects.

Saturday, January 28, 2017

Next Stop Dow30K

Things are going great
And they're only getting better
I'm doing all right
Getting good grades
The future's so bright
I gotta wear shades
--Timbuk 3

As long as we avoid trade wars or real wars, Barrons says, a 50%+ rise in the Dow is likely over the next few years.

A few contrarians will likely file this cover away for future reference.

no positions

Friday, January 27, 2017

Trump's Wall

'Cause somehow I can't believe that anything should happen
I know we're right below and nothing's gonna happen
--Tal Bachman

Building a two thousand mile long wall along the border between the United States and Mexico to discourage illegal immigration was a central plank in Donald Trump's campaign platform. As president, he has already signed an executive order to move forward on the plan.

He has stated that he wants Mexico to pay for Trump's Wall, and yesterday proposed a 20% border tax on goods coming to the US from Mexico to fund the project.

But tariffs are merely sales taxes. And sales taxes are borne directly by buyers of imported goods, not the sellers. If this scheme becomes reality, then it will be Americans who pay for the wall, not Mexicans.

Jacob Hornberger adds a salient point here. A tariff reduces demand for Mexican goods because those goods carry higher prices. That reduced demand will drive marginal Mexican operations out of business. It will also make foreign direct investment in Mexico less attractive. Economic hardship is therefore bound to increase in Mexico.

Worsening economic conditions and more unemployment will motivate more Mexicans to consider crossing the border illegally in search of opportunities. Ironically, then, building Trump's Wall using his proposed funding approach will encourage more Mexicans to circumvent the wall.

Several initiatives seem to make more sense than Trump's Wall. One is for the president to better enforce existing illegal immigration laws on the books--something that President Obama largely ignored. In fact, it can be argued that Obama's lawlessness here has fueled overreaction in the opposite direction.

Another is to reduce the welfare state in the US so that incentives for coming to America to live off the backs of others is reduced.

Finally, and perhaps best, work to encourage economic prosperity in Mexico. The greater the prosperity in Mexico, the less incentive people have to travel thousands of miles from home in search of better standards of living.

What's the best way to encourage that? Free trade and unhampered markets.

Thursday, January 26, 2017

Dow 20K

Here come the jesters
One, two, three
It's all part of my fantasy
--Bad Company

Yesterday, the Dow broke about 20,000 for the first time in history and closed there. SPX and COMP also closed at record highs.

Lotta feel good talk out there about market direction as well.

The higher prices go, the more the fantasy appears real.

no positions

Wednesday, January 25, 2017

Cabinet Timeline

"The vice president in this case is like the queen of England. You can't even buy airline tickets without talking to someone like me. Therefore, let me speak to the White House because, I can assure you, I'm the one person who can make this all work out."
--National Security Advisor Jack Doherty (Air Force One)

Taken from this missive, the below timeline indicates when cabinet-level departments were instituted in the federal government. By my count there are 16 cabinet level departments with nearly half of those established since 1950.

I can see merit in the first four: defense, treasury, state, justice. Why? Because they can be readily tied to executive powers granted in the Constitution.

The farther away from the founding other departments were established, the less constitutional grounding there seems to be.

Tuesday, January 24, 2017

TPP is Not Free Trade

There's a fire that's been burning
Right outside my door
I can't see, but I feel it
And it helps to keep me warm
--Phil Collins

One of the executive orders issued by Donald Trump on his first day in office was a statement that the US would withdraw from the Trans Pacific Partnership (TPP) process. The TTP is a pact being negotiated between various countries concerning trade. It had not yet been ratified by the US. Trump is exercising the authority granted to him under Article 2, Section 2 of the Constitution to make treaties (or to not make them as the case may be).

Many outlets have wrongly termed the TPP as a 'free trade agreement.' As these pages have discussed, free trade requires no treaty. Buyers and sellers just...trade. No permission is required.

By withdrawing from the TPP, Trump has not hindered free trade. He has helped it. He would do similar if he withdraws the United States from NAFTA.

Unfortunately, free trade is not a consistent theme in the president's stated policy intentions. He has indicated that he wants to replace broad trade bloc agreements with bilaterial deals negotiated on a country-by-country basis. This is still managed trade, not free trade.

He also has signaled desires to impose tariffs to encourage a 'build and buy American' theme to economic activity. This, of course, is not free trade either.

Thus, while Trump has done some good for trade with his order pen in the early going, there is some likelihood that future signatures will be associated with rules designed to restrict exchange rather than to liberate it.

Monday, January 23, 2017

Do Not Enforce

Always slipping from my hands
Sand's a time of its own
Take your seaside arms and write the next line
Oh, I want the truth to be known
--Spandau Ballet

Shortly after being sworn in President Trump signed an executive order telling federal agencies to "ease the regulatory burdens" of Obamacare on individuals. As translated by Judge Nap, this order directs agencies not to punish individuals for non-compliance with the law--presumably because it might not be a non-compliance in a couple of months.

Trump is signalling that he expects the ACA to be repealed soon, particularly with regard to tax penalties.

The Judge added that this was a revolutionary executive order in that he has never seen a president tell the agencies under his control to favor the individual over government when making judgments.

"This is exactly what he promised he would do."

Let's hope that promise continues to hold true.

Sunday, January 22, 2017

Attacking PC

"And where once you had the freedom to object, to think and speak as you saw fit, you now have censors and systems of surveillance coercing your conformity and soliciting your submission."
--V (V for Vendetta)

Insightful discussion of this past presidential election cycle as well as the problems that plague both the Democratic and Republican parties. The author proposes three things that Donald Trump could do, or, more appropriately, undo, during his presidency.

He can withdraw from foreign conflicts around the world and keep America out of war. Given that this was something that appeared well within his ideological constraints to do. Barack Obama failed miserably in this area.

Trump could also get serious about undoing the Federal Reserve's destructive influence on the economic and social fabric of the country. He could start by pounding the congressional table to pass Rand Paul's audit-the-Fed bill.

Finally, and the one that I wanted to highlight here, is that he can use his presidential platform to continue attacking the illiberal (classically defined) code of political correctness. Political correctness underlies many other issues because it attempts to influence how we think and speak. The author says it well: "The conscious manipulation of language is inherently authoritarian." Let's state that again with emphasis:

The conscious manipulation of language is inherently authoritarian.

Fortunately, indications thus far suggest that Trump has been gifted with reflexive disdain for PC.

Saturday, January 21, 2017

I'm Coming For You

Trim life shadows flicker and fall
But you still can't turn away
Get up and run before you stall
Before the edges fray
--Ric Ocasek

The wordsmiths have been dissecting the president's inaugural speech yesterday every which way. A central message was this: To the Establishment, particularly in Washington, that has been getting rich off of the system for years at the expense of the average citizen, I'm coming for you.

Words, of course, are cheap. But words like this spoken on inauguration day have rarely been heard in so direct of a manner. Should Trump deliver anywhere close to his promises here, then the days of many federal government bureaucrats are numbered.

This is why Trump is in the cross hairs of statists everywhere. He threatens their livelihood, and they will not sit idly while an outsider attempts to burn their playhouse down.

Friday, January 20, 2017

Transfer of Power

"And, when the last law was down, and the Devil turned 'round on you, where would you hide, Roper, the laws all being flat?"
--Sir Thomas More (A Man for All Seasons)

Today Donald Trump will be sworn in as the 45th President of the United States. Many people are none too happy about it. Thousands of protesters in DC alone have police working overtime in attempts to keep the proverbial transfer of power peaceful.

Ah, yes, the transfer of power. This is what concerns many. It is not about Donald Trump the person. As observed here, Trump has been around for 70 years and, prior to his presidential campaign, he was not viewed as a significant threat. Although his personality may have been distasteful to some, there were no riots or media meltdowns when he was merely a successful entrepreneur and television celebrity. He had no legal power to commit acts of aggression on others.

But now he does.

And Trump can thank many of those same people wringing their hands over his presidency today for that power. Maybe he will during his inauguration speech.

"I'd like to thank all those partisan to the Obama administration and to administrations before that, for permitting the executive branch to assimilate ever more power--power that our founding ancestors toiled so mightily to avoid."

When it's your guy in the Big Chair, that power feels good. Someday, however, it might not be your guy.

And for many #NeverTrumpers, that day has come.

Thursday, January 19, 2017

Broadcasting Private Information

"The government's been in bed with the entire telecommunications industry since the forties. They've infected everything. They get into your bank statements, computer files, email, listen to your phone calls...every wire, every airwave. The more technology used, the easier it is for them to keep tabs on you. It's a brave new world out there. At least it better be."
--Brill (Enemy of the State)

Judge Nap recounts outgoing Attorney General Loretta Lynch's recent actions to permit the NSA, which has been unconstitutionally collecting information about all Americans via its domestic spying apparatus, to pass along its raw spying data to all other federal intelligence agencies. Those agencies can then share that data with counterparts in foreign countries and in the fifty states.

By essentially permitting the federal government to broadcast private information, this administration has acted once again to move the needle further away from liberty and freedom.

We can only hope that the incoming administration, including the new AG, will act to reverse these wrongs.

Wednesday, January 18, 2017


Stuff that works, stuff that holds up
The kind of stuff you don't hang on the wall
Stuff that's real, stuff you feel
The kind of stuff you reach for when you fall
--Guy Clark

In the constitutional law context, originalism refers to the principle that the meaning of the Constitution was fixed when it was written and ratified. That original meaning should be upheld and followed in subsequent legal interpretations.

Does that imply that our founding ancestors meant to bind future generations to that original meaning? Certainly not. They developed the amendment process for revising the original meaning.

The fact that the requirements for obtaining a constitutional amendment are substantial, however, suggests that the framers intended that any changes would be subject to broad debate and approved by far more than a mere democratic majority.

Tuesday, January 17, 2017

No Capitalism Without Capital

Here comes the rain again
Falling on my head like a tragedy
Falling on my head like a new emotion

A reminder. Capitalism requires capital. Capital comes from economic resources that have been set aside (i.e., 'savings') rather than consumed. The progression is savings-->capital-->investment in projects that improve productivity and thus prosperity.

Capital does not come from a loan made by a bank from savings that it does not have. It merely pulls economic resources from other sources.

When savings are low or non-existent, there can be no capitalism.

Because we are in such a low savings environment, then the obvious question becomes: If our current economic system is not capitalism, then what is it?

Stew on that in search for truth.

Monday, January 16, 2017


Dr Ellie Sattler: So, what are you thinking?
Dr Alan Grant: We're out of a job.
Dr Ian Malcolm: Don't you mean extinct?
--Jurassic Park

Fitting sketch on the back of yesterday's post:

As the MSM model continues to crumble, a more appropriate inscription might read Mediasaurus Wrecked.

Sunday, January 15, 2017

Presidential Media Entrepreneurship

You, telling me 
The things you're gonna do for me
I ain't blind
And I don't like what I think I see
--Doobie Brothers

There was a time when presidents were highly dependent on the mainstream media (MSM). The MSM had monopoly positions on the pipes that conveyed information to the people. Moreover, if a president did not play nice with journalists, then the press could slant stories in manners that would influence public opinion away from a chief executive.

While such slant persists today, the MSM's monopoly position on the pipes is gone. In today's information age, consumers have more choices for obtaining information than at any other time in the history of the world. People who dislike the quality of information offered by one outlet can easily find other venues.

Although this weakens the MSM's position somewhat, presidents must still depend on the press at large so long as the president outsources the writing and distributing of content.

This, of course, is no longer necessary. A president can take to Facebook, Twitter, et al and publish his or her own content and bypass the MSM altogether. Moreover, if a president does not care for how the press his treating him or her, then he can publish his own rebukes on social media.

Donald Trump has been doing precisely this. Using primarily a Twitter account, he is taking his case directly to the people with no intermediaries. He has publicly praised the MSM for content and practices that he likes, and has publicly sanctioned content and practices that he does not like. The people get it straight from Trump. No journalistic filters in between.

In what can be seen as classic entrepreneurial behavior, Trump has recognized opportunity in taking a technology developed elsewhere and applying it to his situation. Consequently, he is reducing his dependence on the MSM and gaining more bargaining power. Should he decide to exercise more discretion in his availability for traditional interviews, press conferences, etc.--something that he has signaled that he might do--then he could reverse the tables on the MSM, effectively making the press more dependent on him.

The tizzy that this has created among the MSM and their lackies is of epic proportions. As it should be as Trump is trying to restructure the industry of political reporting right in front of their eyes.

Saturday, January 14, 2017

Repeal and Spend

What'll you do when you get lonely
And nobody's waiting by your side?
You've been running and hiding much too long
You know it's just your foolish pride
--Derek & the Dominos

The Senate bill known as Concurrent Resolution 3 has now passed Senate and House votes. This is the bill that puts in motion efforts to defund and repeal Obamacare.

Although repealing Obamacare is thought to be at the top of the incoming GOP agenda, you will note from the roll call results above that not all Republicans were 'yeas' on S.Con.Res.3. Rand Paul broke ranks in the Senate to spoil GOP unanimity, and nine Republican Reps including Thomas Massie joined House Democrats in 'nay' votes.

One concern voiced by some dissidents is that there is, as of yet, no firm replacement for Obamacare. This is not a good reason for delaying the repeal of Obamacare. Keeping bad law in place, regardless of intentions, continues to infringe on people's rights.

The other concern is that the overall budget for federal government spending contained in S.Con.Res.3 is forecast to raise the federal debt by $9 trillion over the next ten years. This is a good reason for voting no on this resolution.

The correct approach would be separate bills--one for repealing Obamacare and one for the overall federal government--so that each issue can be debated on its own merit.

That GOP leadership refused to separate these issues, when coupled with the Republican roll results, is revealing in terms of collective Republican Party priorities when it comes to cutting federal government spending.

Friday, January 13, 2017

Swiss Cash Kings

"I'll pay with cash."
--Darby Shaw (The Pelican Brief)

Last summer we discussed German preferences for cash. However, the cash kings of Europe and perhaps the world are the Swiss.

The value of bank notes and coins in circulation per resident in Switzerland is more than double the US. The Swiss like to use that cash for their purchases, paying for everything from monthly utility bills to cars using Swiss francs.

Many countries around the world cap how much cash can be used to purchase something before the transaction must be reported to the government. In the US, that limit is $10,000. In Switzerland, the limit is about ten times that amount.

While Swiss preferences seem out of step with 'progress' today, there are benefits to cash-only transactions such as anonymity. People who value liberty are likely to have a proclivity for physical cash.

Thursday, January 12, 2017

Obamacare and Wellness

Only shadows ahead
Barely clearing the roof
Get to know the feeling of liberation and relief
--Crowded House

Democrats have been seeking to raise popular resistance to Republican efforts to repeal Obamacare by sloganeering that repeal would "Make America sick again." Apparently, they are ignoring the data which suggest that Obamacare itself is not improving, and may be deteriorating, the US health profile.

Since the core of the ACA went into effect in 2014, death rates are up and life expectancy is down. Studies suggest that, although it increased use of healthcare services, the expansion of Medicaid eligibility under the ACA has had no impact on objective measures of health.

Economically, Obamacare has reduced employment and increased the national debt by hundreds of billion$. Health insurance premiums have also increased dramatically for many Americans, contradicting the president's personal assurance that Americans would $2500 annually under his signature law.

As we have noted before, all of this was sadly predictable.

The dust bin of history beckons...

Wednesday, January 11, 2017

Empty Claims and Journalistic Standards

I make my living off the evening news
Just give me something--something I can use
People love it when you lose
They love dirty laundry
--Don Henley

With yet another round of unsubstantiated assertions surrounding Donald Trump and Russia making the rounds among slanted media outlets this morning, it's hard not marvel at the traction that such empty claims get among both providers and consumers of such 'news.'

An empty claim is a an assertion that is not reasonably supported. In the context of news reporting,  support typically hinges on amassing significant amounts to hard facts or evidence that validate a claim as newsworthy.

An outlet with high journalistic standards would not report a claim as news unless it was certain that the claim was substantiated by fact. Otherwise, the outlet is trafficking in rumors or hearsay.

Currently, the popular term for trafficking in such rumors and hearsay is 'fake news.'

Why are empty claims so popular? Purveyors of empty claims know that misinformation can be effective. Consumers of empty claims, particularly those suffering from severe cases of cognitive dissonance, lap them up.

Journalistic standards are lowered so that markets for bias can be made.  

Tuesday, January 10, 2017

Of Pencils and Crayons

It's not in the way that you hold me
It's not in the way you say you're mine

Our previous analysis of long term 10 yr yields suggested 3% as the level to watch. Bill Gross's technical analysis of the same data marks 2.6% as the Maginot Line in the sand.

May not mean much in the larger scheme of things, but perhaps it demonstrates the difference between drawing lines for technical analysis with a sharp pencil or a dull crayon.

I myself prefer the Crayola.

Monday, January 9, 2017

Political Disclosure for the Talking Class

No place for beginning or sensitive hearts
When sentiment is left to chance
No place to be ending
But somewhere to start

It is telling that statists seek to regulate potential conflict of interest in certain professions such as finance, but shy away from regulating conflicts of interest among the talking class--namely journalism, education, and entertainment.

What if all journalists, for example, were required to reveal their political affiliations and contributions alongside all communications that they produce for public consumption?

As people continue to wake up to the political slant emanating from the talking classes, perhaps they will demand such not from the strong arm of government, but as a condition for voluntary exchange in free market systems.

Sunday, January 8, 2017

Replace With What?

In violent times
You shouldn't have to sell your soul
In black and white
They really, really ought to know
--Tears For Fears

Democrats chide Republicans for wanting to repeal Obamacare without presenting a replacement program. The reality, of course, is that plenty of alternative programs have been proposed by Republicans--but none are deemed acceptable by Democrats.

But the question of what to replace Obamacare with implies that there is an alternative form of socialized medicine that can be conjured to work better.

Fat chance, says Jacob Hornberger. All versions of socialized medicine predictably raise costs and prices, limit access, reduce quality and innovation, and ultimately chase capacity from the system. America's healthcare system has been in decline since the 1960s when the two major harbingers of socialized medicine in the US, Medicare and Medicaid, were born. Obamacare has merely exacerbated the problem.

The only long-term solution is to completely separate government from the healthcare system. Free market medicine is the alternative aligned with liberty and, by extension, prosperity.

Saturday, January 7, 2017


Benjamin Franklin Gates: Of all the ideas that became the United States, there's a line here that's at the heart of all the others. "But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.
Riley Poole: Beautiful. I have no idea what you just said.
Benjamin Franklin Gates: It means that if there's something wrong, those who have the ability to take action have the responsibility to take action.
--National Treasure

The central theme of this interesting essay by Hillsdale College President Larry Arnn involves conservatism. Because conservatism tends to take on many meanings, it is good to have a sense of the core idea.

In a social context, to conserve means to protect something culturally important from harm, destruction, or loss. Arnn suggests that conservative people sense that things that have developed a good reputation over time tend to be more trustworthy than new things that are unproven.

Conservatives are particularly drawn to original things because they tend to embody cultural principles that, as they say, have indeed stood the test of time. Change those principles and, by definition, the culture changes to something else.

Arnn then argues that American conservatism has to do with protecting things found at the beginning of America. This is particularly true of things associated with forming the original political bonds that defined America.

The two primary documents in this regard are the Declaration of Independence and the Constitution of the United States. The Declaration states the rationale for secession and forming a sovereign nation, and the Constitution establishes the form of government.

Together these two documents are the longest surviving things of their kind. As such, they should constitute a primary focus of American conservatism. This does not mean merely preserving the original documents in the National Treasure sense above. More important is that the content and context of these documents should be deeply understood and accurately passed along to new generations.

If they are not understood and passed along, then the rationale and ideas that defined America will not be conserved. They will be lost, as will be America in its original sense.

Friday, January 6, 2017

Epic Work Out

Who can it be 
Knocking at my door?
Go away
Don't come 'round here no more
--Men At Work

One of the many 'gifts' that President Obama will pass along to the American people as part of his 'legacy' is a historic decline in workforce participation.

In the last BLS employment report issued during this president's tenure, a record 95+ million people are estimated to be out in the labor force.

The corresponding labor force participation rate of under 63% marks 35 year lows.

When more than 1/3 of adult labor is not working, trillions of dollars of production and, by extension, standard of living, are foregone.

"I presided over an economy where workforce non-participation has reached epic proportions. I'm now handing it over to you as part of my legacy."

Um, yeah. Thanks, dude.

Thursday, January 5, 2017


"I am mad. I'm always losing things and hiding things. And I can never find them. I don't know where I've put them."
--Paula Anton (Gaslight)

In the classic 1944 film, Gaslight, Gregory Anton (played by Charles Boyer) tries to get his recent bride Paula (played by Ingrid Bergman) to believe that her perception of reality is wrong and that she is going mad. For example, Gregory moves things in the house and then claims that Paula did it even though she has no recollection of it. He also isolates Paula so that she has little contact with people outside of the house.

The film's title refers to the gaslights that illuminate the couple's old London townhouse previously owned by Paula's rich aunt. Paula occasionally hears footsteps up in the attic, the door to which is locked. Whenever she hears the footsteps, the gaslights dim. Whenever Paula tells Gregory about this, he tells her that she must be imagining it.

Over time, the reinforcement that her perceptions of reality are wrong coupled with little exposure to outsiders leads Paula to doubt her sanity.

It turns out that Gregory had murdered his wife's rich aunt before he and Paula were married, and is snooping around the attic to look for the aunt's valuable jewels that he is convinced are there. Whenever he climbs into the attic thru a roof-side window and turns on the attic lights, the gaslights dim on the floors below.

Ultimately, Scotland Yard investigator Brian Cameron (played by Joseph Cotton) intervenes. He pegs Gregory for the murder/thief that he is, and sneaks into the house one night to see Paula while Gregory is up in the attic. He demonstrates the cause and effect of the footstep/gaslight phenomenon which helps restore Paula's sanity. Cameron, of course, subsequently gets his man--and perhaps, we are lead to believe, the girl as well.

This article describes the psychological tactic of 'gaslighting' as practiced by the political Left. Gaslighting is defined as a form of mental and emotional abuse in which a domineering person denies the memories and perceptions of an intended victim until the victim begins to doubt his perception of reality. The article suggests that the Left's version of gaslighting is to push a false view of reality and then try to convince mainstream Americans that their views are extreme and not grounded in reality.

Benghazi, Obamacare, racism, global warming, Islamophobia, Trump's election, Russian hacking. Most if not all major narratives chanted by the Left contain gaslighting features.

Of course, the Left owns no monopoly on gaslighting methodology. For example, the national security state construct coddled by Neocons is pushed by a great deal of gaslighting as well.

How to counter gaslighting? Develop capacity for processing information and be confident in your ability to reason. Shun dependence on strong, mesmerizing personalities who can sway your thinking. Avoid excessive socializing with narrow groups so that you can grow your mind, and develop and test plausible rival hypotheses.

Gaslighting can be seen as a form of propaganda. Strengthen your mind to avoid succumbing to narrative-driven propaganda that gaslighting promotes.

Wednesday, January 4, 2017

Regulating Commerce

Jojo was a man who thought he was a loner
But he knew it wouldn't last
Jojo left his home in Tuscon, Arizona
For some California grass
--The Beatles

One of the powers granted to Congress by the Constitution is "to regulate Commerce...among the several States." In today's language, granting regulatory power implies restriction. But in the context of the country's founding, regulating implies 'to make regular.'

A big problem facing the early union of states under the Articles of Confederation was that states raised trade barriers against each other making it difficult to conduct interstate commerce. A primary motivator behind convening the Constitutional Convention of 1787 was to write rules that would make trade between the states easy and seamless.

Article 9 of Section 1 captures the spirit well by noting that goods crossing state lines will not be subject to a state tariff or duty.

Stated differently, the duty of Congress is to remove force from interstate markets, not to instill it.

As the new Congress kicks into gear, two areas come to mind where the legislative body can better align with its constitutional regulatory duty. One is to repeal all laws that impair the writing of insurance policies across state lines. Current laws shield insurers in one state from competitors in another state. This is one reason why health insurance premiums are so high.

Eliminating interstate trade barriers related to insurance would drive quality higher and prices lower. Such measures should be seen as 'low hanging fruit' of forthcoming 'repeal and replace Obamacare' efforts.

The other area involves establishing reciprocal arrangements that enable licensed carry of concealed weapons across state lines. States are empowered to grant licenses. For example, they grant marriage and driver's licenses. These licenses are recognized in every state. Similar reciprocity should be in place for concealed carry permits. Currently it is bewilderingly complex, not to mention legally dangerous, for licensees to carry guns across state lines.

Not only does the current arrangement challenge Congress's constitutional duty to make commerce regular, but it also violates each citizen's Second Amendment rights--rights that are not state specific.

Addressing these two areas would be good first steps toward moving Congress in the right direction regarding their regulatory duties.

Tuesday, January 3, 2017

Minimum Wage and Robots

So if you see me acting strangely
Don't be surprised
I'm just a man who needed someone
And somewhere to hide

Nice demo shown here of how increases in minimum wage motivate more investment in automation and robotics.

The economics and accounting are straightforward. As cost of labor rises, equipment that can replace labor albeit at a high fixed cost becomes more attractive. It takes less time to cover the initial investment.

As minimum wage goes up, demand for labor goes down and demand for labor substitutes (machines) goes up. ECON 101.

Monday, January 2, 2017

Current AA

"I run risk management. It just doesn't seem like a natural place to start cutting."
--Eric Dale (Margin Call)

Updated asset allocation as we enter the new year. In percent of all financial (i.e., 'paper') assets.

stocks                  11%
fixed income         1%
precious metals   26%
cash                     62%

Stocks are primarily miners and 'special situations.' Precious metals are closed end funds that hold physical metal.

No shorts to begin the new year.

Sunday, January 1, 2017

Getting Better

With a little perseverance
You can get things done
Without the blind adherence
That has conquered some
--Corey Hart

The message resonates. Christ's birth. Days getting longer. New Year's Day. It the time for rebirth. For starting over. For improvement.

Although we can begin anew anytime, the confluence of events makes the flip of the calendar a powerful symbol for meaningful personal change.

God does not act randomly. As the new year begins, He places the wind at our backs for getting better.