Relationship of Hatshepsut with Thutmosis III

In reading a history of Egypt I once again find some "learned" professor calling Hatshepsut a "usurper" and Thutmosis as being "marginalized" and kept out of power until her death. Of course the real truth will never be known but a little logic is sorely needed on this subject. First of all Hatshepsut took Thutmosis as a little boy and raised him as her son. Queen or peasant the relationship between mother and child is a strong one and not easily broken. When Thutmosis II died his son was very young -- generally believed to be about nine -- a boy. It was his step-mother Hatshepsut who adopted him as her son and had him crowned as Pharoah while she assumed the role of regent. Even though women did not figure in the succession a woman like Hatshepsut, who had been raised to rule could easily have eliminated Thutmosis III had she desired the crown, instead she crowned her step-son as Pharoah.

Thutmosis III ruled with his mother as regent for about two years but it was clear that he didn't like the routine of governing. Like most small boys he clearly wanted to be more active and like many small boys today, he was probably interested in the Army. Consequently Hatshepsut recognized the futility of trying to rule through a small boy and sent him off to the Army while she assumed the crown as Pharaoh but without usurping Thutmosis’s position as Pharoah, so she became the co-ruler. For some this idea of sharing may seem like wishful thinking or stretching the truth, but Hatshepsut ruled for 20 years and Thutmosis III was near thirty when she died and was commander of the most powerful army of the time.

Hatshepsut was Queen with a palace guard and she could have been overturned any time her step-son chose to exercise his rights as Pharoah. Instead he remained in the army and commanded several campaigns in the south. Clearly he loved the army and enjoyed the military life, leaving the governance of the country to his step-mother. Had he thought otherwise he could have claimed his right of governance at any point once he was mature. If further evidence is needed the situation with Senmut the Vizier should be considered. Senmut functioned as the Vizier with almost total power almost from the beginning and certainly had been tutor to Thutmosis while he was prince and even as Pharoah.

Historians have long speculated that Senumt was the lover of Hatshepsut, while this may be true any close examination of Hatshepsut’s actions indicate that she truly believed that she was descended from the Gods and it is unlikely she would have taken on any commoner as a lover. But even if she had it also seems equally clear that he would never have been a candidate to marry her or her daughter or to share power with Hatshepsut. Yet the history of the time shows Senmut’s climb to power from nothing to Vizier and it seems equally clear that he was motivated by power. But Senmut suddenly disappears from sight after a visit with Thutmosis III at his headquarters in the south. Senmut visits Thutmosis then vanishes after this meeting and he is never again mentioned. What happened is not recorded but this meeting and his disappearance seem to be related.

What actually happened at this meeting is lost in history but it doesn’t require a vast leap in logic to assume that Senmut urged Thutmosis to overthrow his step-mother and to assume full power. To anyone kept in the background this might have been a golden opportunity to reclaim what was rightfully his, but for a loving and dutiful son this was an act of treason. However, Thutmosis did not take action against Senmut but undoubtedly he notified his step-mother of what had been proposed by Senmut. Given the disappearance of Senmut immediately after this visit it seems logical that Thutmosis was happy with things just as they were and viewed Senmut as disloyal to his step-mother and a traitor, but it was Hatshepsut who took action not Thutmosis.

This then opens the question that if Thutmosis loved his step-mother then why did he obliterate her statutes and images? For some this is viewed as an angry response and an illustration of how much he hated her. This is the lazy man’s view of events and really doesn’t seem logical when everything is considered. First she was buried in one of the most spectacular tombs in the valley of the Kings. Also not all of her images were destroyed and those that were destroyed were not destroyed until some time after Thutmosis took power. Thutmosis III claimed to reign from the time he was crowned meaning that he viewed the entire period during Hatshepsut’s reign as his, which of course was true. During this period it was common to mark milestones, battles, and accomplishments with statues and writings in temples and on walls. It was these where Thutmosis obliterated Hatshepsut’s name and images claiming these as part of his reign and accomplishments. Other images and references remained intact so these actions were probably not done in anger or retaliation but were politically motivated.

It seems clear when all of the evidence is considered that Thutmosis III loved his step-mother and that they had a sound and loving relationship throughout her life. Thutmosis III was a warrior and is viewed in History as the Napoleon of Egypt. Any General that powerful would not have been marginalized or kept out of power if he chose to take what was rightfully his. Instead he was satisfied leading the army while she took on the burden of daily governance. He clearly loved his step-mother just as she loved him. The idea that Hatshepsut usurped the throne and kept Thutmosis sidelined is an assumption that doesn’t seem to conform to the known facts.

The Euro-Zone Crisis

So the 27 member Euro-Zone members did not reach an agreement on any solution to the ongoing Euro-Zone debt problem and Chancellor Merkel and Germany are being seen as killing the Euro. Why this surprises anyone is a mystery because Germany is the only stable and successful economy in Europe – or at least Western Europe. Essentially the solution has two parts – strict rules governing the fiscal and economic policies of the members and the issuance of “Euro-Bonds”. These bonds would be supported and guaranteed by the Euro-Zone members.

This seems simple and straightforward unless of course you are German. The Euro-Zone members are in love with their socialist programs, they like their 6 week vacations, short work weeks, high salaries, and early retirements. Even feeble attempts to rein in some of these government programs has led to riots in Greece and Italy – the governments might see the necessity for these changes but the recipients – the voters – do not. Of course the German voters see things quite differently since they are the hardworking taxpayers whose taxes have already gone to bailing out Greece and their irresponsible financial commitments. The German taxpayers are simply tired of being the financial savior of countries whose irresponsible financial programs have left them virtually bankrupt and expecting Germany to bail them out.

The Euro-Bond is a great solution for those irresponsible countries because the bonds would be guaranteed by the collective membership. Of course the largest guarantor would be Germany while the greatest abusers would be given breathing space without making any major changes to their cradle to grave programs. Chancellor Merkel sees this as a bad idea and at best a band-aid because it would merely avert the immediate crisis without actually improving the long range economic situation plaguing Europe.

The reality is Western Europe is not competitive in the world markets. Only Germany has an export economy supported by hard working taxpayers, while countries like Greece have tax policies that are laughable. In Greece the individual taxpayer is allowed to simply state how much they earned so the tax revenues don’t even approximate the cost of their government programs. The French – like most socialist governments – see employment as the objective rather than productivity and competitive position. So their solution has been to reduce the work week hours to well under 40 and any thought of increasing that has led to near riots. The supreme irony there is that France still sees itself as a world power and a peer – if not superior – to Germany. Of course France isn’t a basket case like Greece but it is nowhere near the economic power house of Germany.

Germany is emerging as the dominant force in Europe and is rapidly accomplishing the objectives that they failed to achieve in two world wars. Germany is increasingly determining the policies that Europe must follow and the only European government that seems immune to German dominance is the UK. The Fourth Reich is being born.

Greece & The Euro-Zone

The French drove the campaign for the Euro thinking that with a unified Europe the incessant wars that have characterized Europe for a thousand years would stop and France would once again be the dominant force in Europe and Germany would be contained. Alas the Euro-Zone had fatal flaws from the outset and instead of France becoming the dominant force in Europe it has turned out to be the Germans. Now the Euro-Zone must dance to the German tune because it is Germany who has the money necessary to keep the Euro from collapsing and it is this power that is being displayed in the Greek Debt crisis now rocking the Euro-Zone. But Greece is just the tip of the socialist iceberg that is threatening Western Europe. Eastern Europe isn’t affected because they learned their lesson about Socialism and Communism from the USSR, a lesson Western Europe did not heed, so a review of Greek Socialism seems to be in order.

Greek Underground
For the 2004 Olympics it was necessary to install a modern transportation system in order to avoid the mass traffic jams that characterize Athens. The cost of this system was roughly $2.4M of which the Greeks paid very little with the bulk of the money coming from the Euro-Zone. One would think that the revenues from this system would eventually pay off the debt, but that is an outmoded capitalist concept. In Socialist Greece they have the “honor” system where they installed “honesty machines” where the passengers are urged to pay for their passage. Apparently the Greeks are not very honest because virtually no one pays so not only is the new underground not paying off the debt it isn’t even covering the maintenance costs – so the underground is totally supported by the government and the government is supported by tax revenues. In a capitalist country the government would simply raise taxes to cover the cost but Greece is a socialist paradise where taxes are more of a nuisance than a reality.

Greek Railroad
If the Greek Underground is a disgrace the Greek rail system is even worse and typical of how socialism operates. The average salary for railroad employees is an incredible $90,000 which includes cleaners and track workers. This is a salary treble the average private sector salary. The wages – just the wages – for the Greek railroad system is $750M but the annual ticket sales is only $120M. In a capitalist society this would call for immediate action but not in socialist Greece where the government is focused on employment and not profit.

Greek Tax Policies
While the Greeks aren’t paying for their underground tickets they aren’t paying their taxes either or at least no where near the amount of taxes they should be paying. In fact only 5000 people out 12 million admit to earning over $100,000 a year where studies have shown that more than 60,000 people have investments over $1.5 M and this doesn’t include money in overseas banks. How is this possible? Very easy since the individual taxpayer is allowed to state their own earnings for tax purposes and these are rarely challenged. Consequently many Greeks state their taxable income to be below taxable threshold of $15,000 even they own vacation homes, boats, and other luxury items. To call the Greek system corrupt is just accepted and is so accepted that there is a semi- official rate for bribes for passing false tax returns and each Greek family is estimated to spend an estimated $2500 per year in bribes. If this isn’t bad enough the Greek shipping magnates – some of the wealthiest people in the country are tax exempt because of the benefits they bring to the country even though the Greek shipyards are virtually idle employing about 500 people.

Greek Pensions
Naturally in a socialist country pensions are very dear to the people who expect the government to take care of them even if they don’t pay taxes or work very hard to earn the pensions. In Greece the retirement age is 50 with a pension of 95% of their last year’s earnings and this includes pastry chefs, radio announcers, hairdressers, and masseurs whose work is classified as “arduous and perilous” to justify the 95%.

Greek Schools
Once Greece was allowed into the Euro-Zone money began to flow into the country and into public life making life better for all Greeks. This allowed salaries to increase without requiring more production and this impacted virtually all aspects of Greek life including the school system. In a socialist country performance is not measured because the objective is employment and not efficiency. Consequently the Greek school system hired more people to manage the system so now that system is overstaffed and employs four time more teachers per pupil than Finland who has the highest rated educational system in Europe. Not surprisingly the teachers, who are in fear of being discharged are hopelessly ineffective so now parents must hire private tutors for their children.

Greco-America
Does any of this sound familiar? Is America on a similar path to financial disaster? Consider the power of the unions who demand ever higher wages without increasing productivity and quality. Consider the educational system now dominated by unionized teachers who are turning out graduates who cannot read, who have no clue of history or geography. Consider the growing underclass supported by first one welfare program than another. Consider the large pensions and salaries being paid to public employees that far outstrip those of private industry. Consider the growing demand by the underclass for higher taxes on the rich to pay for their welfare system. Consider the growing interference by the government with private industry. All of these things are indications that our government is slipping inexorably into the financial quagmire that we find in Greece.

Germany Resurgent

Historically Europe has been the battleground of the West with France and Germany playing dominant roles with Britain and Russia playing important but secondary roles. This pattern has existed up until 1991 with the creation of the Euro-zone which was intended to link Europe financially in an effort to prevent any future wars due to the interdependence. This effort recognized the nationalism within the zone so the interdependence was strictly financial. It left borders intact along with languages but most importantly it left financial controls intact, meaning financial policies continued pretty much as they had in the past but with a common currency.

Unfortunately Europe has been held in thrall by its socialist programs – generous social programs that rewarded workers with lavish health and retirement benefits without demanding a great deal of work. While the taxes have been high in order to support these programs tax collection has been a challenge and the great national game has been to avoid paying taxes. The result has been the cost of government has far exceeded the revenues and the imports have exceeded exports. But the European problem isn’t totally theirs alone. China manipulates its currency keeping it an artificially low rate which drives its export based economy. The US has allowed the government to increasingly get involved in the financial structure which has caused instability both at home and abroad. But the serious problems remain in Europe because the objective of the common currency was unification and stability and the creation of an economic power – United Europe – to rival the United States – politically and economically. All of these objectives are seriously threatened.

The Maastrict Treaty created the Euro as a common currency but left the countries control of their individual fiscal policies. This meant that the countries in the Euro-zone had their own tax policies and would not share banks but would share interest rates. This allowed countries like Greece to continue their socialist programs supported by borrowed money but without any control over the value of money. In effect the Euro remains under central control but at the expense of national sovereignty. The result is the fiscal crisis in Greece and the imminent crises in Italy, Spain, Ireland, and Portugal. But these financial problems are jeopardizing the objective of a Unified Europe as well as the Euro itself, because of the resurgence of nationalism.

The Maastrict Treaty was intended to unify Europe and suppress the nationalism that has plagued Europe since the fall of Rome. But unlike the other members the German economy was designed to be export based unlike the other members in the European Free Trade Zone. . Germany became the dominant financial force in the Euro-zone and the unwilling source of financial support for the less responsible members. This is a role the German people quickly tired of as they couldn’t see why they should subsidize the irresponsible Greeks while the Greeks see the Germans as manipulating the financial system in their favor. The first bailouts by the Germans did not go well with the German people and when it became obvious that more bailout money was needed the Germans demanded action. The result was the creation of the European Financial Security Facility (EFSF) which raises money on the bond market and funnels that money to the weak Euro-Zone members, but the EFSF is run by Germany and it is the Germans who call the tune – not the French and certainly not the weak governments who depend on German money.

With the EFSF in place Germany can demand economic reforms before loaning money and are doing so. These reforms are austerity reforms which strike at the very heart of the socialist programs in place in these countries. In effect they can’t continue as they are without financial aid and they can’t get this aid without meeting Germany’s demands for reform. At a stroke and without firing a shot Germany has achieved the control over Europe that has been it’s objective since Bismark. The result has been a rise of nationalism that threatens the Euro and the concept of a unified Europe. At the very least the generous socialist programs that the Europeans have enjoyed for a long time cannot survive without extreme restructuring. This means fewer government jobs, longer work weeks, reformed pension plans, and higher taxes that are actually collected. These reforms are being resisted in Greece and Italy but when implemented will bring them more in line with the rest of the world. The question of what the European Union might become is now less relevant that can it survive at all without significant changes.—changes dictated by Germany. Welcome to the Fourth Reich.

ASK MR. MANAGER

The time has come once again when we turn to “Mr. Manager” to explain exactly what manager’s mean when they say such things as “people are our most valuable asset” or “we are looking for entrepreneurs” or “we want people who are not afraid of taking a risk” or the ever popular “we don’t shoot the messenger”. As everyone – including Mr. Manager – knows there is a huge difference between English and Management Speak. While the words sound the same the interpretation or meaning in Management Speak can be quite different from what the average employee may have understood. For example exactly what DOES a manager mean when he says people are our most valuable asset?

Well the typical employee hears and interprets this statement as focusing on “people” while the manager focuses on the word “asset”. The employees will see this statement as showing care and concern for the “people” and as an expression of concern and dedication to those who do the work but this isn’t precisely what is meant in Management Speak. While it is true Mr. Manager shows care and concern for his “people” he does the same for his Ferrari, after all one doesn’t mistreat an “asset” because it depreciates its value. So the focus by the Manager is not on the word “people” but the word “asset” because to the Manager these are interchangeable terms.

The proof of this assertion lies in the actions taken by the Manager when he is called to task by the accounting team and told he has to reduce his overhead, budget, or burn rate. Now the Ferrari, like most of the tangible assets have depreciated so the disposal value is much less than the cost of replacement, but not so that most valuable asset – the people. Disposing of a few hundred people immediately reduces the payroll, the travel, the healthcare, and all of the associated overhead. All of this falls to the bottom-line and thus demonstrates that People truly are the most valuable asset.

When the boss says “we are looking for entrepreneurs” or “risk takers” does that mean he wants people who are creative and willing to take a risk – as in high risk high reward? Mr. Manager can assure you that when the boss says he is looking for entrepreneurs he is telling the absolute truth. The boss is searching for entrepreneurs with the same verve and enthusiasm as the FBI is looking for serial killers with the same objective in mind – to eliminate them from society. Entrepreneurs are people who take risks, who see new ways, who – in short – upset the apple cart and threaten the status quo. No manager worth the name is going to tolerate having his apple cart turned into applesauce by some wild-eyed loose cannon who is out to reduce costs, improve efficiency, and show higher authorities that his boss is a moron. So yes indeed, the boss is certainly on the look out for entrepreneurs so he can give them the rewards they so justly deserve.

Periodically the boss will assure the staff that he is always looking for input from the rank and file and that he will reward good performance and sound suggestions. At some point, usually at some large gathering the Boss announces that he wants suggestions and that he wants to know what we think. Of course this is another one of those times when the English and the Management Speak don’t mean the same thing. The employee hears the Boss asking for the employees to give him assistance in determining the future – he hears a request for input and suggestions. But that is English and when you filter this through Management Speak, you immediately realize that while a cat might look at a King, it isn’t recommended procedure for an employee to take this statement seriously and to suggest anything to the Boss. When the boss says he is looking for input it is in the same category as the flashing “Applause” sign you see in TV studios. The Boss is willing to accept your compliments, applause, and congratulations but any actual advice is about as welcome as a bad case of hives – in fact your advice might just bring on the hives.

Of course the boss is always telling the employees that he wants their input and feedback and that he will reward their performance. Mr. Manager can assure you that when the Boss says “we reward performance” he is telling the absolute truth. Of course, you have to understand what is meant by “performance”. The more effusive your compliments, the higher your performance rating, while the more you actually offer advice or move outside of the established boundaries set by the boss, the lower your performance rating will sink. So my little Grasshopper, don’t be deceived when the Boss seeks your advice. When that happens, you smile, bow your head, and mumble that you cannot hope to improve upon the wisdom and brilliant incisive thinking that the Boss displays everyday. Assure him you hope to achieve only half of his wisdom and your performance rating will soar – as will the rewards.

It seems to me that you are telling us that we shouldn’t be candid when dealing with the boss, even though he tells us that he “won’t shoot the messenger”.

Well my little Grasshopper “We don’t shoot the messenger” is one of the most common management phrases that Mr. Manager is asked to comment on. Obviously your boss actually won’t shoot you – it’s against the law, besides it makes a mess on the carpet and possibly his Armani suit as well. But just because the boss won’t actually shoot you doesn’t mean that he is anxious to hear what you have to say. However, no manager is going to shoot the bearer of good news, effusive compliments, or outright flattery. Therefore, if you find yourself in the position of having to deliver bad news to the boss be sure that you wear your bullet proof vest. Well – not really because as we said it is unlikely the Boss will actually shoot you but come armed with some one to whom you can attribute bad news – sort of a human shield. Once the bad news is delivered don’t confuse the Boss’s silence or dumbfounded expression as acceptance. More than likely the boss is sitting there in stunned amazement at your complete lack of understanding of the issue instead. So while he won’t actually shoot the messenger he certainly will comment to his management colleagues on your lack of insight, reliability, and inability to grasp complex management problems. So in Management Speak, he really doesn’t shoot the messenger anymore than your typical crime boss actually disposes of an undesirable colleague – it just seems to happen.

I was due for a performance and salary review but my Boss promoted me from Bottle Washer and Coffee Maker Associate to the more prestigious position of Associate Coffee Maker and Bottle Washer and said that he would give me a review in six months. Why can’t he give me a review based on my previous position and another one on my new position in six months?

Mr. Manager must tell you once again that your question by itself shows you are not management material because you do not think like a manager. You look at this as performance review where the boss will tell you how well you are doing and give you tips on how to improve and possibly put yourself in line for his job. (Insert boss’s hysterical laughter) For the manager, the real reason is that he would have to increase your salary. The higher his operating costs the lower his performance bonus and no review means no increase in your salary. So when the boss tells you that he will conduct your review in six months what he is really saying, is that he will conduct your salary review after management bonuses are paid.

So there it is my little friend – all of your questions regarding what the Boss means when his actions don’t seem to fit with his words – have now been interpreted for you by Mr. Manager. Keep studying and watching how REAL managers operate and one day you too can become an oracle like Mr. Manager.

A Review of the Arab Spring

The Arab Spring continues apace as one Islamic Dictator after another falls to popular uprisings. The US has either quietly stayed on the sidelines as in Egypt and Iran or played an active role as in Iraq and Libya. Although US involvement in Libya was sort of a one off since it was conducted via NATO which is a military euphemism for the US. The US along with the western powers see these uprisings as an effort by the people to be free and struggling for democratic representative government. While these uprisings may establish new representative governments any resemblance to any western style democratic government is wishful thinking. The western powers seem incapable of grasping the realities of the Middle East and Islam. In spite of the politically correct position of the US government and the West, the reality is Christendom ( read the West) is engaged in religious war with Islam.

The Obama administration has declared that all American Troops will withdraw from Iraq. For the anti-war crowd this appears as a victory instead of the disaster it may be because to the Islamic community they won and have succeeded in driving American Forces out of Iraq. Iraq is not politically stable and that instability is being driven by Iran whose objective is to create another Islamic Nation dominated by Iran. It is almost a certainty the current government cannot remain in power once the US leaves and any new government will be Islamic, not secular, and certainly anti-American and anti-Christian.

Currently the West is celebrating the fall of the Gadhafi Government with the belief (read hope) that the new government will be democratic, pro-west, and secular. The first step of the new government was to declare Sharia Law. Of course this doesn’t mean that will stand because like most of the Arab nations, Libya is tribal and each of these tribes is now fully armed and struggling to gain power. It is probable that Libya will remain unstable for the foreseeable future but regardless of who finally emerges as the new dictator he will not be secular or democratic but Islamic and certainly not pro-west. Abdul Jalil – the head of the Libyan transitional government has already announced that he intends to establish Sharia Law in Libya – thus firmly returning Libya to the 8th Century.

The Crown Prince of Saudi Arabia died recently and now who will be the new Crown Prince is undetermined but the probability is that the logical candidate Prince Nayef Bin Abdul Aziz will be chosen. Saudi Arabia is strictly Islamic and rules with Sharia Law. World opinion has increasingly pressured Arabia to abandon or at least not enforce some of the more barbarous parts of Sharia. While Saudi Arabia has supported the US in some ways that support has largely been because the Royal family is not loved and needs international support. This is why the current Saudi government has been softening its enforcement of Sharia. If Aziz comes to power there is little doubt but he would return to the strict enforcement of Sharia law and reduce his support for the US. With Aziz in power Saudi Arabia could become very unstable and it is feasible that the Monarchy could fall and be replaced by an Islamic dictator.

As a further example of the failed US foreign policies we have Syria. The US was quick to step into Afghanistan, Iraq, and Libya and to support the uprisings in Egypt but have done nothing to support the uprising in Syria. It is no secret that Syria has a well organized and capable military and Assad is supported by Iran. If the people of Syria by some miracle manage to overthrow Assad, can the US expect their support? Not very likely but if Assad manages to suppress his opposition which he is likely to do, he will be indebted to Iran and Hezbollah. He would then pose an even greater threat to Lebanon and Israel. What the US policy is toward Syria has never been very clear and the failure to support the rebels in Syria will strengthen the current government just as it did in Iran and America will once again appear to be an unreliable friend.

Iran is actually Persia and at various times in history Persia has been a mighty empire and it seems clear that the current government is intent on re-establishing that empire, if not directly certainly indirectly. As the Arab Spring progresses Iranian influence has spread from Iran across Iraq, Syria, and Lebanon. How Turkey, Jordan, and Saudi Arabia react to this is to be determined but the intransigence of America cannot make them overly comfortable in relying on America and that is before Iran gains nuclear power, which they are sure to do. And when they do gain nuclear capability there is no doubt they will use it as intimidation on all of the Islamic Middle East in their bid to re-establish the Caliphate and the Persian Empire. In the meantime the American public should not be so quick to celebrate the Arab Spring as an example of the rise of democracy because these governments are not going to resemble anything like western democracies and with a Nuclear Iran as the central power a major military confrontation may not be far off.

Is Wealth Zero Sum

The postulation that wealth is zero sum, meaning that whatever wealth I have has been gained at the expense of others, in effect total global wealth is finite but is inequitably distributed. This argument rests on the assumption that wealth cannot be created and wealth can be defined and quantified. I submit that this is a fallacious argument.

First wealth can be defined in many ways such as the value of knowledge, a great many friends, honors, respect, or many other abstractions where the “wealth” is self determined or determined arbitrarily by others. This type of wealth is not finite and can be both created and destroyed. Therefore, for any meaningful argument wealth must be defined in terms of tangible goods such as gold, money, art, land, etc. But the postulation is that wealth is zero sum meaning that it is finite when it is obvious that the world’s available wealth today is far greater than it was a hundred years ago. But the professor / philosopher avoids this inconsistency by stating that his zero sum argument only applies to the moment and cannot be viewed in any historical context. But this refutes his argument that wealth cannot be created because global wealth has increased and he acknowledges this. This reduces his argument to the total global wealth is finite at any given moment, which is true at that moment, but in the next moment new wealth can be created e.g. a gold strike, oil strike, new invention, etc. The professor / philosopher acknowledges this but then moves to the more abstract view of wealth common to those who argue that wealth can only be gained at the expense of others – hence that wealth is finite.


The argument then becomes increasingly doctrinaire as he attacks – without noting – capitalism. He argues as follows:

“Material wealth obviously originated in the creation/origin of the universe (that is where the stuff comes from). Once we had the earth and people, people could start acquiring material goods like land and resources. These resources can be made more valuable by the addition of labor, thus creating wealth. They can also be made more valuable by other means, such as creating scarcity and controlling pricing. These material goods can be acquired in various ways, fair and foul. The classic method is, of course, conquest.”

How this argument supports a zero sum conclusion is beyond me because it demonstrates how wealth can be created and shared yielding a wealthier population overall. The actual argument appears to be the inequity of some people being wealthier than others based on the assumption that unethical and even illegal means were used to accumulate that wealth. He leaves no room for wealth accumulation via fair means. But his argument has ceased being the creation of wealth but instead has shifted to the sharing of wealth.
At this point the argument shifts to the abstraction of money “the pieces of paper” whose value is commonly agreed to but his real argument doesn’t appear to be the creation of wealth but how that wealth is created.
“Monetary wealth is obviously a social construct: we made up the financial game and the “creation” of wealth depends on the sort of game being played at any given time. For example, some folks “created” wealth by clever repackaging of toxic assets. Other people “create” wealth by working and investing their money (which is supposed to give them more money). In many ways, this is “fictional” wealth in that we are literally just making this stuff up and its value depends entirely on how far we are willing to all play make-believe. Yes, I play the game-it is a convenient way to handle exchanges in some ways. But, I always remember that it is just a game we are playing (I work, I get some paper, I hand the paper to someone and they give me an apple).”
The point being made here is a little fuzzy to me because everyone knows that paper money is an abstraction whose value is set by common agreement and backed by the government. The creation of wealth followed the same rules when commerce depended entirely on gold and silver currency. It appears that he is simply opposed to how wealth is created and how it is inequitably distributed. But he concludes his argument that wealth is finite by arguing that currency (paper) is finite because printing more doesn’t create wealth but results in inflation. That is true but then at a stroke he reduces wealth to how much money you have and since that is finite wealth is finite and zero sum. That is ridiculous of course because tangible wealth can be created in many ways and the currency is simply a method of measuring the wealth created.
In my opinion this entire argument illogical and rests on false assumptions. And when the argument is reduced to its core it appears that it is anti-capitalism and the unequal distribution of wealth.


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China -- Red Dragon or Paper Dragon

From what you read in such prestigious sources as the New York Times you would think that everybody should start learning Chinese because China is not only a rising military power but an economic power house that is overwhelming all competition. But is that a realistic appraisal of the situation? I think a little critical thinking may be in order.

First the New York Times is not noted for its veracity or being in love with capitalism nor is most of the American media The critical thinking seems to be reserved for American business and foreign policies rather than any critical analysis of what lies beneath the public policies and positions of the Peoples Republic of China. In fact when was the last time you saw any reference to China as the “People’s Republic of China”? Currently the PRC is simply referred to as China which may just be laziness of the part of the media but the fact is failing to call the PRC what it is in reality is misleading. The reality is that Communism or Marxism are demonstrable failures as a government. Furthermore Socialism as a governmental form is far from successful as can be seen in the current upheavals in Greece, Italy, France, and across Western Europe in general. The fatal flaw in these political philosophies is that their objective is employment not efficiency and wealth redistribution not wealth creation.

There is no free enterprise in the PRC in spite of appearances. Permitting a family or an individual to set up a noodle stand is not quite the same as opening a factory. The Chinese government permits these small businesses to operate more like a safety valve on a steam engine – the internal pressures on the Chinese government are immense and growing. These pressures are both political and economic but the economic ones are by far the greater.

In the PRC the government owns everything – there is no true private ownership. The government owns all of the factories, the land, and all means of production from rice to warships which mean that they are the sole employer and that they control all prices. But the PRC, like all governments is faced with a finite amount of revenue that must cover their overhead, but unlike capitalist governments they cannot raise taxes because that is just taking from one pocket and putting it in another. Consequently the PRC is forced to increase revenues from exports which means they must compete in a global market for both labor and goods. To date the PRC has been able to maintain the fiction that they are a competitive powerhouse but in reality they are operating a giant Ponzi scheme.

The PRC is manufacturing and exporting vast amounts of product because foreign manufacturers are sending thousands of jobs to this “low labor cost” market. But the manufacturing centers are along the coastal areas where the quality of life is far superior to the internal quality of life. This is leading to a growing influx of young people seeking a better life which in turn is causing pressures on housing as well wages as the cost of living increases. If the wages increase the competitive position vanishes and that foreign investment will move to other low labor cost markets. The PRC has attempted to deal with this issue by subsidizing the manufacturing which means that the cost of goods being exported are a) below cost b) at cost or c) with low margins. This in turn has led to quality issues but the real problem is that these subsidies are draining financial resources from the interior infrastructure. While the internal infrastructure cannot be improved the major problem is that it cannot even be repaired. The PRC has suffered greatly from major floods and earthquakes which have left much of the interior in need of repair, which means the government is faced with some very difficult decisions. They cannot reduce the subsidies without raising prices which will create a demand for higher wages which will drive foreign investment away. They can fail to quickly repair the damage but the rural areas are already restive due to their quality of life versus that of the coastal areas. What ever they decide there will be major changes in the economy of the PRC.

And this brings us to the Chinese Military. As Talleyrand once said regarding Napoleon’s military exploits “the problem with an army is that it eats” and thus the PRC has this issue to deal with as well. Armies are pure overhead. They cost a great deal to feed and equip while providing nothing in peace time, so they must be employed or reduced in size. The PRC cannot use their army by adopting an expansionist policy nor can they reduce its size because they would still have to pay the soldiers being released because the government is the sole employer. But there is another less visible issue and that is the military itself. Generals do not like to see their power reduced but more importantly the soldiers themselves are the sons and daughters of farmers and small shop keepers. These are the people who are suffering from a poor quality of life which is aggravated by the damaged infrastructure. A Failure to alleviate the suffering in the rural areas could easily transfer to a restive military, so the central government cannot ignore the problems of the interior and they are caught on the horns of this dilemma. If those weren’t problems enough there is another historic problem that has plagued China for thousands of years and that is corruption. Nepotism, bribery, and kickbacks are a way of life and part of the Chinese culture. The PRC does what it can to stop this and do prosecute and act on the most outrageous examples, but the problem is endemic and undermines trust in the government.

So China – the People’s Republic of China – is perhaps more of a Paper Dragon than a real one. While they appear to be crushing everything in their path, the reality is that Communism and Central Planning are demonstrable failures. The PRC cannot continue to sustain the house of cards they have built indefinitely and their dominant position in world trade must eventually collapse from the internal economic pressures.

The Arab Spring and Islam

The entire Middle East is in turmoil as the people rise up in rebellion against the incumbent rulers. Unfortunately the western world sees this as a spontaneous effort by the people to achieve freedom and representative government. Actually this view rests on an appalling lack of historical knowledge as well as any insight into what Islam is all about. From the beginning Islam has swept all of the secular powers in the Middle East out of power and made great inroads into Europe and Asia but at no time did the Islamic rulers ever establish any semblance of a representative government or allow any of the freedoms so cherished by the West. Instead there has been just one repressive government after another and the Arab Spring is unlikely to produce anything close to a democratic government with all of the freedoms the west associates with democracy. In Iraq where American power overthrew a brutal dictator the new government is struggling to establish a representative government but is being challenged by Imam Al Sadr who wants an Islamic style government. In the meantime Christians are being persecuted along with any Jews that remain, so regardless of who emerges with the power it is unlikely to look anything like any western style democracy.

The people in the west, particularly those who subscribe to the pseudo-religion of multiculturalism and political correctness, watch these rebellions through western eyes and with virtually no understanding of what is actually happening. In the Arab world loyalties are very different than in the west and Libya is an excellent example to observe loyalties in the Arab world. In Islam loyalty is to the family – not just the nuclear family but all of the aunts, uncles, cousins, and nephews. The second loyalty is to the village and the third level of loyalty is to the tribe. Loyalty to a country if it exists at all is pretty thin and in spite of all of the flag waving in Libya this is essentially a tribal war and not a civil war in terms of the people versus the government. This is a group of western tribes who have held power for forty years being challenged by the eastern tribes who think it is time they held the power. Once the current regime in Libya is gone the new one is unlikely to establish anything resembling a truly democratic government. It will be an Islamic government with the only unknown being how extreme will it be.

Somehow the politically correct crowd in the west excuses the excesses of Islam on the basis that these are extremists and that at its core, Islam is a religion of peace. The naïveté of this position is astonishing given the 1500 years of evidence. The reality is the Muslim Moderates the politically correct cite as examples of Islam as peaceful simply don’t understand Islam. The true Muslims are those that are conducting the war against Christians, Jews, and Infidels. They are not “extremists who have perverted the teachings of the Koran – no -- in fact they are following Islam and the Koran to the letter. In reality it is the moderates are not adhering to the teachings of the Koran and it is unlikely they would be tolerated by Mohammed if he were alive today. Of course it is possible that as the Arab Spring progresses these moderate Muslims might come to power but it is highly unlikely given the history of Islam.

The mobs in the streets of Syria, Libya, and other Arab states are all male although in Egypt you might see a few women but even there the majority is male. Does anyone expect for the new regimes to suddenly give women equal rights? Will women be free to dress as they choose and go where they please? Will there be freedom of religion? Will Christian missionaries be permitted to proselytize in these countries under the new regimes? Will the new governments allow freedom of the press or will the government continue to control what the people hear? Will these new governments be friendly to the west or will they continue the jihad? Will Hamas, Hezbollah, Al Qaeda, and the multiple jihadist groups stop attacking the west? The reality is that nothing has changed and it is unlikely anything will change. Islam has been at war with Christians, Jews, and the infidels since the 7th Century and their attacks will not cease until they have conquered the world, which is what they believe is the command of Allah.

The western powers can help overthrow these repressive regimes and hope things will change but it is very unlikely. It is more probable that the former repressive regimes will be replaced by new repressive Islamic regimes perhaps not as extreme as the Taliban but certainly not resembling anything like a true democratic government with all of the freedoms associated with a free and open society.

Germany and the Fourth Reich

With the rise of Hitler in the 1930’s Germany attempted to establish the Third Reich militarily as it crushed all of Europe except Russia, which it left devastated. With the fall of the Third Reich the Europeans led by France attempted to constrain Germany while striving to return France to greatness. This effort to control Europe led to the creation of the Euro-zone and the Euro as the common currency. Alas as usual the arrogance of the French created a situation that instead of containing Germany and increasing French power, it has had the opposite effect. The European governments are socialist with populations that are not driven by a strong work ethic but with a strong expectation that the government will take care of them. This has given the hard working Germans a tremendous advantage as they work and make money while the rest of Europe vacations and wallows in their socialist giveaway programs.

Following WWII the Europeans treated Germany as a defeated foe and exploited Germany as Germany rebuilt but this exploitation was mostly financial as they used Germany’s financial growth to gloss over the growing problems with their socialist economies, mostly led by the French whose idea of sacrifice was to work more than 32 hours a week. The Germans accepted this situation for a long time but with the cost of Germany reunification and the end of the cold war Germany began to reassert itself and ask why they were carrying most of the financial burden for the Euro-zone? In fact the current financial crisis in Europe has made several things abundantly clear. First there is no central control and the European Congress is more show than effect. Secondly the only economy in Europe strong enough to exert control and influence financial policy is Germany, and finally, there is little prospect that the weaker European countries will be able to recover financially without some external control and the only logical country to exert that control is Germany.

The French led the charge for the Euro Zone thinking that they would be in charge and would dominate Europe, but they didn’t anticipate what happened when the Euro was introduced. The Maastricht Treaty created a common currency but it also allowed for national control of finance, banking, and fiscal policy. This meant that the countries had their own tax policies but would not share banks but would share interest rates. While the Euro-Zone would share a common currency there was no one in charge of the economy or to set central fiscal policy. But while Europe had been living off of Germany for years they simply assumed that Germany would just continue supporting the rest of Europe financially so there was never any attempt to curtail spending or to align taxes to all of those expensive socialist programs. While that was bad enough it seems that with the lower interest rates – due to the shared interest rates in Maastricht – some of the Euro-Zone members – like Greece – went on a borrowing spree as interest rates dropped and the cheap credit flooded the Euro-Zone.

But now the Germans have had enough. They have had to cut back on many of their socialist programs to maintain Euro-Zone fiscal stability. But they no longer feel that they should support and pay for the fiscal irresponsibility of the Euro-Zone members while they are having to sacrifice to subsidize this irresponsible behavior. The result has been the creation of the European Financial Security Facility (EFSF) which raises money on the bond market and funnels that money to the weak Euro-Zone members, but the EFSF is run by Germany and it is the Germans who call the tune – not the French or the Euro-Zone members. Under the EFSF the financially stressed Euro-States can now access the needed funds but only with German permission, because this is not under the control of the European Union. In fact the EFSF can act independently of the EU in any future financial crisis. The reality now is that any distressed European State can get any money they may need but by doing whatever Germany tells them to do.

The reality now is that any Euro-Zone state who accepts financial assistance from the EFSF means ceding financial control of their economy to Germany. This means that these countries will be forced to accept German austerity programs but the fine print shows that the conditions imposed by Germany don’t have to strictly be financial. In effect Germany now controls the Euro-Zone economy and with that control they can now dictate policies that extend beyond the financial -- if they choose to do so. Failure to accept German direction simply means that Germany can cut off the flow of money which would devastate the weak socialist governments. Germany has attempted to establish control over Europe militarily with the last attempt being Hitler’s Third Reich but now it seems Germany has established control over Europe without firing a shot. Rather than out shooting the French and the rest of Europe they have simply out worked them. Welcome to the Fourth Reich

Love and Marriage

Marriage seems to be on the decline as more and more people opt to “move in together” and act like they are married. Of course this is just a euphemism for no strings attached sex. When challenged regarding why not get married the response – usually from the man – is there is no need because those are just words that have no meaning and won’t change anything. Of course the rebuttal to that is “if the words have no meaning then why not say them?” Obviously the answer is they do have meaning not just morally and legally but psychologically as well. It is true that the marriage vows are just a verbal contract but they might be the most binding contract anyone will enter into and that is the reason why the “lets live together” bunch avoid it, because it is a firm commitment that closes their option to just walk away when they become unhappy.

For some reason more and more people seem to think they have a right to happiness-not just occasionally but permanently – they think they should never be unhappy and if things and circumstances make them unhappy they feel free to just walk away and find some one else who makes them happy. Of course this is an unreasonable expectation as anyone who has been married longer than a few years can tell you. Marriage is filled with highs and lows as well as compromises and sacrifices, but in the end it is worth everything if you just stick it out. Marriage begins with passion, fun, adventure, and the expectation that this will go on forever and it does for a while. But that passion and excitement is not love and the fun and adventure quickly fade and become routine. And as that routine sets in things change – for some it changes for the better but for others it becomes boring which in turn leads to unhappiness and divorce due to the expectation that they should never experience unhappiness or sacrifice. These people never really experience love because they cannot separate sex, passion, and excitement from love. The problem seems to be that people get confused about love and think that movies portray love – they don’t.

Every day and in many ways husbands and wives show their love. Every time a man squashes a bug or disposes of a mouse or just takes the trash out, he saying “I love you”. Every time the wife picks up the dry cleaning, prepares a meal, or insists you see a doctor for that scratch she is saying “I love you”. Marriage is all about love – real love – where the other person’s health and happiness comes before your own. Where you can sit quietly with the other person and say nothing but can’t sit alone without knowing where the other person is. Love is when nothing can be fully enjoyed without sharing with the other person. Love is not Hollywood just as it is not constant excitement and romance – love comes quietly and sustains you through the bad times just as it magnifies the good times. The words in the marriage vow mean something and will bring lasting love and happiness when they are followed.

Living together is not marriage and does not represent any sort of commitment and no matter how long this arrangement lasts it will never yield the level of love that marriage provides, because it never shows any commitment to be there during the bad times. But once married and willing to stay through the bad times the effort and sacrifices are worth it and yield a life time happiness because the marriage rests on a foundation of love.

Rome and The US And The Roots of Decline

History And Realpolitik

Sometimes it is truly frightening to watch world leaders make decisions and take actions that history clearly demonstrates are doomed to failure. In 2002 a book was published “Warrior Politics” which was an essay on “Realpolitik” In this short book the author uses historical references gleaned from some of the worlds great thinkers and philosophers to put the 20th century into perspective. Certainly the 20th Century will go down in history as a pivotal period. It included the rise of Communism and its ultimate failure. A failure still not recognized by many academics and politicians who still think Socialism and Communism are viable political structures but previous failures were not due to any inherent flaws but because the implementers were incompetent. The 20th Century saw genocides on massive scales, not just in Germany but in Asia, Eastern Europe, and Russia as well.

Without doubt two of the most important events in the 20th Century were the two world wars but it is worth noting that these two wars parallel the Punic Wars between Rome and Carthage. In the second century BC Carthage was the dominant power in the Mediterranean but that power was being challenged by Rome After the first Punic War Rome imposed an unjust peace on Carthage which directly led to the succeeding wars which were costly in lives and treasure. This is precisely what happened in the 20th Century. Germany was a newly minted country and a rising power in Europe. This drive for power brought it into conflict with France and England and gave rise to WWI. But the allied powers failed to see the parallel with the Punic Wars and imposed the unjust Treaty of Versailles. But the allied powers failed to see the parallel with the Punic Wars and imposed the unjust Treaty of Versailles Germany. This treaty led directly to WW II.

But these are only the most obvious lessons to be gleaned from history and as the 20th century fades into history we find the 21st Century leaders repeating the mistakes of history. We find the US – much like Rome – embroiled in a seemingly endless series of wars. The Pax Romana taxed the Roman Empire just as the Pax Americana is taxing the American Empire – and for many of the same reasons. America is engaged in Afghanistan, Iraq, Libya, Palestine, Syria, Egypt, China, India, and Pakistan. But for what purpose and for what advantage to America? The glib answer of course is that these are necessary to protect America both economically and militarily, which of course would have been the response of any of the Caesars. But there are no specific answers coming out of Washington, because there are no concrete advantages to America. Why is the US subsidizing Palestine (Hamas) when they are clearly the group who are the aggressors against Israel and have never shown even the slightest indication that they want peace. In fact the only thing they want is for Israel to vanish and all Jews (and Christians) to be driven from “Arab Lands”. We entered Afghanistan for the purpose of capturing Osama bin Laden, that is accomplished but once it was clear he was no longer in Afghanistan what was the purpose of us lingering there? An even larger question is why didn’t the US kill all of the poppy fields? The answer has been this would have turned them against us – are they for us now? Aren’t these fields the source of much of the drug trade throughout the world and the revenue source for the Taliban? At least the Romans could justify their military excursions on the basis that conquests generated greater revenues for the state, but for the US these military adventures are costly.

One of the major reasons for the ultimate decline of Rome was the rampant corruption at the top. The Justice system was corrupt as the politicians bought votes, and the politicians were engaged not just in power struggles but in lining their own pockets. Does any of that resemble the US Congress today? The voter roles are clearly corrupt and this is so widely accepted that it is a joke. Key politicians pay no taxes (unless caught) and enact legislation to enrich themselves and to pander to special interests. The Justice system may not be for sale but it certainly is out of control. The courts have begun to act as a legislative branch via their interpretation of laws which has given us rules that are totally counter to the majority will.

The result is American prestige is declining just as America has entered into a decline. Any sense of shame or moral authority is gone via Court decisions that permit everything in the name of free speech. People increasingly look to the government for help and support rather than rolling up their sleeves and taking care of themselves and their families. The Congress has lost any sense of fiscal responsibility as they spend money on special interests while borrowing money to give away. Rome was not conquered it rotted away and there is a message there that should not be ignored by our Congress or the American People.

China and Economics

The idea that China is rapidly taking over the world economy is a widespread belief, but like so many things related to Socialism and Communism the realities are frequently ignored by pandering press. Currently the focus is on Greece and Europe where all of those socialist dreams are rapidly becoming an economic nightmare as it becomes apparent that government spending cannot exceed tax revenues. But there are other socialist countries where the stark reality of economics is beginning to rear its ugly head and China is one of those.

China – like so many other nations including the US, unleashed a flood of “stimulus” money in 2008 for the purpose of stimulating its economy which had been hard hit with the global decline. This stimulus money mostly went to local governments with the intent that this money would be spent on the infrastructure. This money vanished but with no real improvement in the infrastructure and by 2010 the local governments were $1.6 trillion dollars in debt, mostly in bank loans with a substantial portion of those loans being bad debt. Many of those infrastructure projects are sunk in debt and incomplete and those that have been completed have done little to stimulate or support China’s economic growth as they are simply “bridges to nowhere”. The reality is that no government can continue to make loans that are not paid back because eventually you run out of money. Greece and Europe (and soon the US) are in the throes of that reality and China is not far behind.

Cart Water’s and American Investment Banker and a specialist in China, points out that 55% of the Chinese GDP was from infrastructure investment – meaning bank loans which in a Communist country means the government. But governments do not make a profit and this is true even in communist countries and the collapse of the USSR is an example of how governments cannot run anything at a profit. So the Chinese government is trying to shore up its economic house by shifting much of the local government debt off of their books while the state owned banks re-capitalize using state guaranteed profits generated by the spread between interest rates on savings and interest charged on loans. Chinese law allows the banks to roll over their bad debts indefinitely so they can gradually pay down these debts. This is a communist country where the government controls everything so it is easy for the government to rig the system, which is just building a house of cards that cannot stand forever.

Of course in a rigged system the banks make money no matter if the loans are bad loans but the reality is those loans don’t go away and as that debt load grows the government will find it harder and harder to lend more money for investment in the infrastructure necessary to maintain their economy. That economy is highly dependent on the industrialized coast cities and their industries which are government subsidized. But China remains a largely rural economy and the disparity in income between the interior and the coastal region is creating unrest and demands for infrastructure and quality of life improvements that the government cannot meet in its leveraged state.

But the work force in the Industrial cities is demanding higher and higher wages which is placing the government into a difficult position. A failure to meet the demands for higher wages will cause the workforce to become even more restive than it already is but raising the wages reduces China’s competitiveness in the world labor market while reducing their ability to satisfy the rural area’s demands for improvements in infrastructure and quality of life. The government has made some attempt to increase wages but this has caused some manufacturers to abandon China and move to lower cost labor markets. This migration out of China is causing unemployment and empty factories which is having an impact in the rural areas because the government can’t fund the necessary improvements in the countryside and those unemployed workers were sending money to their rural families but that has ceased adding to the unrest. There have already been riots and unrest which the government is attempting to keep out of the public eye but they recognize the gravity of the situation.

Socialism and communism alike cannot and do not work in the long term. Europe is nearly bankrupt and faced with the reality that their extravagant government benefits cannot be sustained in the face of higher costs and greater longevity of their populations. Attempts to reduce these benefits even slightly had resulted in riots and instability. This is a lesson not wasted on the Chinese but the fear that China is going to take over the world seems unfounded.

China and Economics

The idea that China is rapidly taking over the world economy is a widespread belief, but like so many things related to Socialism and Communism the realities are frequently ignored by pandering press. Currently the focus is on Greece and Europe where all of those socialist dreams are rapidly becoming an economic nightmare as it becomes apparent that government spending cannot exceed tax revenues. But there are other socialist countries where the stark reality of economics is beginning to rear its ugly head and China is one of those.

China – like so many other nations including the US, unleashed a flood of “stimulus” money in 2008 for the purpose of stimulating its economy which had been hard hit with the global decline. This stimulus money mostly went to local governments with the intent that this money would be spent on the infrastructure. This money vanished but with no real improvement in the infrastructure and by 2010 the local governments were $1.6 trillion dollars in debt, mostly in bank loans with a substantial portion of those loans being bad debt. Many of those infrastructure projects are sunk in debt and incomplete and those that have been completed have done little to stimulate or support China’s economic growth as they are simply “bridges to nowhere”. The reality is that no government can continue to make loans that are not paid back because eventually you run out of money. Greece and Europe (and soon the US) are in the throes of that reality and China is not far behind.

Cart Water’s and American Investment Banker and a specialist in China, points out that 55% of the Chinese GDP was from infrastructure investment – meaning bank loans which in a Communist country means the government. But governments do not make a profit and this is true even in communist countries and the collapse of the USSR is an example of how governments cannot run anything at a profit. So the Chinese government is trying to shore up its economic house by shifting much of the local government debt off of their books while the state owned banks re-capitalize using state guaranteed profits generated by the spread between interest rates on savings and interest charged on loans. Chinese law allows the banks to roll over their bad debts indefinitely so they can gradually pay down these debts. This is a communist country where the government controls everything so it is easy for the government to rig the system, which is just building a house of cards that cannot stand forever.

Of course in a rigged system the banks make money no matter if the loans are bad loans but the reality is those loans don’t go away and as that debt load grows the government will find it harder and harder to lend more money for investment in the infrastructure necessary to maintain their economy. That economy is highly dependent on the industrialized coast cities and their industries which are government subsidized. But China remains a largely rural economy and the disparity in income between the interior and the coastal region is creating unrest and demands for infrastructure and quality of life improvements that the government cannot meet in its leveraged state.

But the work force in the Industrial cities is demanding higher and higher wages which is placing the government into a difficult position. A failure to meet the demands for higher wages will cause the workforce to become even more restive than it already is but raising the wages reduces China’s competitiveness in the world labor market while reducing their ability to satisfy the rural area’s demands for improvements in infrastructure and quality of life. The government has made some attempt to increase wages but this has caused some manufacturers to abandon China and move to lower cost labor markets. This migration out of China is causing unemployment and empty factories which is having an impact in the rural areas because the government can’t fund the necessary improvements in the countryside and those unemployed workers were sending money to their rural families but that has ceased adding to the unrest. There have already been riots and unrest which the government is attempting to keep out of the public eye but they recognize the gravity of the situation.

Socialism and communism alike cannot and do not work in the long term. Europe is nearly bankrupt and faced with the reality that their extravagant government benefits cannot be sustained in the face of higher costs and greater longevity of their populations. Attempts to reduce these benefits even slightly had resulted in riots and instability. This is a lesson not wasted on the Chinese but the fear that China is going to take over the world seems unfounded.

A Review of Management

With unemployment high and manufacturing increasingly moving off shore American products and unions are under attack for high costs and low productivity. Union labor is viewed as unmotivated, illiterate, and giving a great deal less than a days work for a day's wage. Productivity is low and growth in productivity is either non-existent or modest. Labor unions continue to demand high wages and benefits while an increasingly ineffective management structure seems to be confused, inept, and unable to come to grips with the death grip unions have on both government and industry. The once formidable American management teams which dominated world markets are now struggling to maintain themselves in those markets which they once dominated.

What is the problem?

Why do so many American businesses seem to be operating out of control?

I believe the chaos which now pervades American business is caused by years of ineffective management, rigid union practices, and an outdated business model. The contemporary American business model was founded on a Socio-Political model which has been in vogue throughout history and it has only been recently that this model has shown itself to be seriously out of step with industry, business, and society.

It was this socio-political model which gave rise to the labor movement and established the concept of "Labor versus Management" which has characterized western industrial societies from their inception. It was this model which Karl Marx referred to when he spoke of exploitive capitalists and predicted the inevitable death of capitalism. There has always been this conflict between the governed (labor) and the governors (management), but how it has contributed to the decline in the American economy can best be seen in retrospect. When we look backward we can see that the symptoms and danger flags have been there for a long time.

• The separation of management from the work force, both physically and philosophically.
• A business focus, which has largely ignored any but financial issues.
• A persistent and longstanding antagonism between management and labor
• A high cost labor force governed by seniority and not performance
• A labor force with ever increasing demands for wages and benefits
• Failure by management and labor to recognize globalization and its impacts

The effect of these factors has been cumulative over a long period and the results are now becoming apparent. We are seeing reductions in quality, lower productivity, and increasing unemployment as jobs move overseas to lower labor markets. Much of this malaise is attributed to high labor costs, a declining work ethic, waste, mismanagement, and a wide variety of other reasons. However, rather than being the problem, these may be symptomatic.

The problem may be that as our culture and markets have changed, our management model has not. It has continued to follow the authoritarian form it has had since the beginning of the industrial revolution. Western business is founded on a business model whose roots are in 18th century cultural concepts rather than those of the 20th Century much less the 21st. Only recently have the cultural conflicts inherent in the American model, become obvious.

American management has consistently failed to recognize the underlying source of worker dissatisfaction or to deal with it in any effective way. Historically this dissatisfaction was glossed over with higher wages, improved benefits, and other concessions. Only rarely were these concessions tied to any increase in productivity or quality. Labor negotiations and concessions were oriented toward rectifying surface problems associated with worker dissatisfaction rather than coming to grips with the basic causes of the problems.

The result was an upward spiral of costs factored with lower quality and productivity. American management failed to recognize that the underlying source of worker dissatisfaction was tied to the authoritarian model and its failure to incorporate the worker into the business process. The worker was kept out of the "decision process" and pacified with increased benefits. As these costs increased they were simply passed on to the consumer. This simple solution was an endless spiral until foreign manufacturers began to provide serious competition with higher quality goods at equivalent or lower prices. Suddenly management and labor were confronted with a completely new set of circumstances which they were ill prepared to face because the current American industrial model pits labor against management. Therefore the possibility of establishing a partnership between labor and management, as a solution to the crisis, has never been seriously considered.

It is the union labor contracts that have driven American Labor out of global competition. When management made it clear those productivity improvements, fewer job classifications, and reduced wages and benefits were necessary the unions refuse to cooperate. This resistance left management in the position of finding ways to improve productivity and profits without the support of Labor, which caused management to turn to off shore suppliers and technology as a solution. However, it quickly became apparent that productivity increases due to technology required more than capital investment and off shore work came with some significant quality and management issues.

To be competitive the American Management Team found that this new work force had to be more educated and more computer literate which did not describe their unionized work force. This new labor force was made up of technicians rather than craftsmen and efforts made by management to convert the existing labor force to technicians were rebuffed because the union craftsman ratings were hard earned and represented lifetime achievement for many. Failing to convince unions that retraining was in their best interest management began to recruit new and more educated employees.

These new technically trained workers were not union oriented and certainly not satisfied with the autocratic management style employed with unskilled workers. These new workers were less loyal to the company and expected to have a greater voice in the process of operating the business. Initially management failed to understand this aspect of this new work force but they also had problems coming to grips with a work force where the workers frequently knew more than their managers, and wouldn’t tolerate being patronized.

As the work force changed from unskilled to skilled the union leaders saw their membership decline because these new technical people had even less patience with them than they did with management. The result of this failure of labor and management to recognize the changing environment has been a growing irrelevance of labor unions and a management structure that seems increasingly unable to cope with the competitive situation. This has resulted in a chaotic situation which is due, at least partially, to the continuation of a model which has failed to reflect the changes in the labor force and our society. Many of the managers, who are experiencing this confusion today, recognize the failure of the old ways to solve today's problems and are grappling for a solution.

The failure of Theory X, Theory Y, Theory Z, and Managing by Objectives has led to a mini-revolution in management. Gone or going is the centralized workplace and increasingly the workers are working from home offices spread around the globe. This means the organization has become virtual and the managers must manage based on metrics and milestones. The labor unions continue their decline because virtual workers in a virtual organization have little interest or need for a union. Of course this requires a completely new management style but this is increasingly the management style of the 21st Century.

NATO or Naturally America Takes Over

Although I am a great admired of Harry Truman the man, I am much less impressed with some of his legacy, namely the United Nations and NATO. Like so many progressives (read socialist or neo-Marxist) I’m sure he labored under the impression that he was establishing a foundation for world peace. Many at the time thought that WW II was a result of the failure of the League of Nations and America’s failure to join. This of course is the typical reaction by France and Britain as they refuse to ever assume any responsibility for the disasters they created in Africa and the Middle East with their arrogance and meddling. Their unjust treaty of Versailles was the direct cause for the rise of Hitler and the desire of the Germans to retaliate against their oppressors. It is highly unlikely that even if America had joined the League of Nations WW II could have been avoided. But certainly President Truman must have felt that his United Nations would provide a forum to prevent any future wars. Of course he was proven wrong even in his life time.

The United Nations has morphed into a corrupt organization that is nothing more than an impotent debating club where nothing ever gets done and their peace keeping activities not only have universally failed to keep the peace but seem to have no function whatsoever other than cosmetic. This organization has become dominated by Islamic States led by strongmen, Presidents for Life, and terrorists like Arafat masquerading as heads of state. Yet the United States continues to participate in this charade which is bad enough but the US is expected to pay for its demonstrable anti-American activities. This is a failed organization that has clearly outlived its usefulness, must like that other misguided dream of Truman’s – NATO.

NATO was created in 1949 for the collective defense of Europe – aimed primarily at defending Europe from the Russian colossus to the East. In fact the role of NATO was summarized by the first Secretary General as “the purpose of NATO is to keep the Russians out, the Americans in, and the Germans down”. While that may be a flippant remark it is also painfully accurate but in that accuracy also lies the truth that it is no longer relevant, a burden on the US military, and a constant irritant to the Russians. Russia is no longer the USSR and generally thought of as no longer being a super power, but that is just whistling in the dark. Russia is and has always been powerful and while it is distracted now as it grows into something similar to a democratic state, it is not a military threat to Western Europe.

The Germans have grown into a major economic power with an invisible military. Germany dominates Western Europe and the Euro-zone economically while France and the majority of Western Europe sink into their socialist quagmire of entitlements, over taxation, and irrelevance. So the only real function of NATO is to “keep America in” meaning that NATO is in fact just the United States acting under the euphemism called NATO. It is America that funds NATO and it is American soldiers who act under its banner. The military and defense budgets of Europe are virtually non-existent and their military is hardly capable of defending themselves much less providing any meaningful support to any joint activity like Afghanistan, Iraq, or Libya. The military support coming from these NATO nations is at best cosmetic because with the exception of the UK they do not conduct active military operations in any major way. In general their troops are kept away from any real danger, because their governments can barely accept any military involvement and they participate only to keep the American money flowing into their military and NATO.

The fact is that America can no longer nor should any longer be expected to keep the peace world wide. If Europe needs defending then the Europeans should do it themselves and pay for it themselves. If South Korea needs to be protected from the North then they should do it with their troops and their money. If they think they need UN protection then let the UN field and pay for the troops not America. What purpose is served by maintaining a major military presence in Germany and Japan? These represent a drain on the American treasury and a misuse of American Troops that could be used more effectively in other places. NATO has seen its day and that day has past. It is an expensive anachronism and no longer serves America’s interests.

The Arab Spring of 2011

The Arab Spring is worrisome on several levels. It seems that few in the Western World understand the dynamics of the area and American foreign policy over several administrations seems to be based more on wishful thinking (my opinion)than any true understanding of how things work. There is a reason why these countries have been unstable for generations if not for centuries. The Ottomans ruled this area for 500 years but did so with an iron hand and disagreements and disagreeable people were dealt with harshly. The Arab world is tribal in nature with fierce opposition between tribes. Khadafi (sp) in Libya is hanging on to power because his military is drawn from and led by his tribe. The opposition is not some group or groups of people grasping for freedom and democratic government, these are people who think it is time for their tribe(s) to rule. Once Khadafi is out nothing will change and in fact there is a high probability that Al Qaeda could seize power because of the fragmented opposition to Khadafi.

The West and America in particular seems to labor under the misconception that the Arab World is in turmoil because the people want representative government and freedom. There is nothing in the history of this region that would lead any thinking person to that conclusion. Even if "democratic" governments come out of these conflicts they will not resemble any democratic government that would be recognizable by the average American. Their press will be controlled, the government will be corrupt, the legal system will be controlled, there will be no freedom of religion,no freedom of speech, and in general what will emerge is the usual Islamic strongman dictator clinging to power for life or at least for decades.

America is withdrawing from Iraq leaving behind a fragile "democratic" government. It is unlikely that government will survive and very likely that a civil war will occur driven by Al Sadr and other religious leaders. It will be Sunni versus Shia and tribe against tribe with the Christians and Kurds playing a minor role. People seem to forget that the British and French tried to bring democratic governments to this area following WW I and it failed. Those goverments collapsed into strong man dictatorships run by "Presidents" for life. The best thing America can do now is to cut our losses and leave these people to sort it out for themselves. The alternative would be to stop playing this ridiculous game of moral superiority and attempting to establish our rules over them. They regard our freedoms and rules as weaknesses and act accordingly. A few public executions, mass bombings, and an emasculation or two would send the only kind of message these people understand because those are their rules and the rules they understand.

The upheaval in the Arab world is driving out dictators who supported America but what they are being replaced by may be -- and probably will be -- much worse for American security than what it has been under the dictators. Egypt is abandoning their peaceful coexistence with Israel, Syria is in play over Lebanon and Israel. The Iranians are pushing their anti-west and anti-Israel agendas in the background. Our foreign policy is non-existent or at least doesn't give the appearance of being a coherent policy.

Royce

Ayn Rand in Summary

Several days ago I was challenged for being an ideologue without actually understanding conservatism or acknowledging the extreme views of Ayn Rand. As part of this discussion I was asked to respond but in something short of a white paper.

Ayn Rand is a very complex person while paradoxically seeming to be simplistic and predictable. I agree with others in that Rand’s philosophy can be summed up as “Objective Materialism”, but what this means probably falls into the same amorphous category as ‘socially conscious”. Do I find her views “appealing?” Yes and no – I think Rand makes some very valid philosophical points but that doesn’t mean that I subscribe to all of her positions, which can be extreme. Some of the left have asked that I distill Rand’s philosophy into a set of bullet points. The bullets below represent my effort to do so, but condensing Rand’s philosophy into a series of bullets probably cannot provide any in depth insight into her philosophy as a whole. So here is my (pathetic?) attempt to summarize Ayn Rand’s philosophy.

1. Probably the simplest and easiest way to view Rand’s philosophy is to summarize it as the struggle of society and government between individualism and collectivism. Where the individual has a right to be himself and to retain the fruits of his labor while the collectivist represents the right of government to take the fruits of the individual’s labor and use it for the “greater good”.

2. Rand sees the collectivists as destroyers of capitalism and the profit motive who if left unchecked will cause the ultimate collapse of society itself. Although Rand died before the collapse of the USSR I think that bears out her conclusion.

3. The Philosophy of Objectivism essentially is a defense or advocacy for reason, individualism, capitalism, and the free market economy while establishing a rejection of government coercion through laws and regulations intended to further government control and support for the greater good of society.

4. Much of Ayn Rand’s philosophy can be summarized as describing the inherent conflict between Marxism (Rand was a strong anti-Marxist) and Capitalism in the form of a free market and individual rights over the collective.

5. Rand’s Magnum Opus “Atlas Shrugged” actually was a treatise on how fascism, communism, and socialism or any form of government control of society is fatally flawed at its core and ultimately destructive to society as a whole. She feels that any form of coerced self-sacrifice is destructive to society.

6. Perhaps the most controversial part of Ayn Rand’s philosophy is her rejection of God or any sort of higher being. In her philosophy she rejects anything which she sees as claiming authority or control over the individual or the individual’s mind. Whether or not she is an outright Atheist is unclear, but this position puts her at odds with much of the conservative political movement.

7. Rand’s philosophy when examined at its core echo’s the position of Frederic Bastiat (The Law) which postulates that no man or government can obtain anything of value from an individual through force either physical or legal. In effect the rights of the individual are paramount (read rights of property) and that the individual has the fundamental right to the fruits of his labor. In effect Rand supports laissez faire capitalism – a free and unregulated market. Rand (and Bastiat) reject any legislation based on enforced or coerced altruism (e.g. equalization of opportunity) which Rand sees as a triumph of special interests over those who produce value (the individual).

8. Another summarized view of Ayn Rand’s philosophy and what probably makes it attractive to the political conservative is her position that society must protect itself from the parasites and “looters” (her term) who are represented by the “tax the rich politicians”, big labor, government ownership, government spending, government economic planning, onerous federal regulations, and most of all any form of wealth redistribution. That latter point in and of itself makes her philosophy attractive to the political right.

I think the above is a brief summarization of what passes for Ayn Rand’s philosophy called Objectivism and Individualism. There is undoubtedly more than what is shown here but I think these brief paragraphs demonstrate why she is attractive to the political right. Now it can be argued that her positions are extreme and that a society composed entirely of individuals beholden to no one but themselves could not be sustained anymore than the collectivist society that she condemns. On the other hand it can be argued that the US was a great deal richer and freer before the federal government became so powerful while the failure of the collectivist society is demonstrated by the failure of the USSR and the growing woes of the socialist European nations

Bin Laden -- Some Observations

As the details regarding Osama bin Laden continue to unfold it is becoming obvious that his rejection of things western left him vulnerable. Here was a man, a man of great wealth, living a more or less hypocritical existence. He has rejected all things western and called on his followers to live by the Koran. He rejected the Internet, cell phones, satellites, while using them to further his objectives of the overthrow of western society. He lived in a “mansion” we are told but the photos and videos showing his living conditions would have led to his indictment in the US as a slum lord. He feared capture and death while producing videos showing him in various militant poses with weapons. The real irony here is how he lived at the end. Hitler died in his bunker from self administered poison. His dreams of a super race and a Third Reich were crushed by bombs while he was rejected and betrayed by his own military. Stalin apparently died of natural causes but his was an existence of fear and mistrust because he feared all of those around him. So his life was hardly the kind of life anyone would wish and at the very end his own daughter betrayed him. Saddam Hussein ended on the gallows after being dragged out of hole in the ground. For Bin Laden he had effectively been in prison for the last five years, not venturing out beyond his walled compound. Apparently in his rejection of all things western he had failed to read his Shakespeare or he would have learned the lesson of King Lear. Bin Laden had divided his power and those to whom he delegated his power wielded it on their own leaving him ignored, living in squalor, and left to die surrounded by his two remaining loyal followers. So bin Laden followed in the footsteps of all of those mass murders who preceded him.

The pages of history are strewn with examples of how those who misuse their power seem to come to bad ends, destroyed by their friends, allies, or even by their own over reaching for power. Perhaps the lesson is that while empires may be build on blood and treasure individuals cannot achieve a positive place in history using the same methods. Caesar came to power over the bodies of his own citizens but was assassinated by his friends, because he could not bring himself to restore the republic. Napoleon came to power much the same way but he too could not lay down his power and set up a democratic government. George Washington is the only historical figure who having achieved total control over a government and country set aside his power in favor of a government of representatives. In the end, bin Laden ended like all of his predecessors, alone and undefended.

Rome & The Republic

The study of history has largely been abandoned in the American education system, particularly any study of ancient history but there are many lessons to be learned by simply examining the mistakes of the past. The parallels between ancient Rome and modern America should give pause to our political leaders today. Rome was a Republic that lasted for 482 years. It had an elected body—the Senate led by two Consuls. This was a very successful government until overthrown by Caesar in his drive for total power, but Rome itself lasted for over a thousand years and during that period experienced many problems and situations America faces today.

Rome was expansionist in that it conquered and incorporated territories into the Empire. But Rome was careful to preserve the cultures and leadership of those territories. Kings were left in place but most importantly Rome was careful not to tamper with the local customs and religions, that is until they ran up against the monotheistic Jews and Christians. This religious tolerance was not again experienced until the founding of America who incorporated religious tolerance into the Constitution. The Romans tolerated the Christians at first but the Christians simply would not accept the polytheistic views of the Romans. Eventually the Christians prevailed and the Roman Empire became Christian. Today America tolerates all religions including Atheism and Islam. However, just as the early Christians refused to accept the religious tolerance of the Roman Government so does Islam refuse to accept any religion except Islam. The Muslim community pleads for peace and understanding just as the early Christians did, but it should be noted that the Christians did not Christianize Rome through violence but through creeping influence and conversion until Rome was Christian. How will Islam impact America and America’s religious tolerance?

Rome accepted other people and cultures and the city itself was overflowing with people from all parts of the Empire. The Goths, Gauls, Visigoths, Britons, and others were not trying to overthrow Rome, they wanted to be part of the Roman Empire. They wanted to share the wealth and standard of living that characterized Rome. But in the simplest view, Rome simply could not accept this influx of people and cultures. Today America is under assault from thousands of people crossing our borders not to conquer us but to share the wealth and enjoy the stability of the government. This was a problem the Romans could not resolve for many reasons. They were preoccupied with foreign affairs, various wars, corruption in the government, failure in communications, unemployment, and a weakening economy. All of these issues exist in America today and it doesn’t appear that our government is any closer to solving them than the Romans but perhaps it might be worthwhile examining what the Romans did and try to not do those things.

Initially the Roman Senate was elected by the citizens of Rome and it represented their interests but gradually the Roman Senate became a self-serving group filled with corruption. Posts were bought and sold with the understanding that the person filling the post would enrich himself through corruption. The American Senate isn’t quite that bad – yet, but does the American Congress represent the people who vote them into office or do they represent the special interests and wealthy contributors who pay for their elections? The Romans never resolved this problem and whether America can is yet to be seen.

At one time Rome had over a million men in the Army spread across the Empire. This military presence was very expensive to maintain and it required a huge tax base just to maintain it. Nevertheless this huge Army was simply not enough to protect the borders or to maintain the integrity of the Empire. Today American has a huge military spread around the globe protecting America’s and in most cases international interests. This is being done with American money with only token amounts from other countries in the form of soldiers and money. Can America continue to support NATO? Can America continue to pretend the UN has any relevance and authority? Can America continue to play world policeman? The Romans couldn’t can America?

The lessons are there – is any one listening?