South L.A. Might Ban New Fast Food Restaurants

A bunch of people are talking about how South L.A. might ban new fast food restaurants from opening.

It's time for another politics lesson. Who benefits from this ban? If you follow the money trail, who would you discover was secretly lobbying from this ban?

If you can't figure this one out, you're still not thinking correctly. I'll give you a chance to figure it out on your own before giving the answer.

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Who benefits from L.A.'s ban on new fast food restaurants? Anybody who *ALREADY* owns a fast food restaurant benefits! It's like they have a government-endorsed oligopoly!

It probably isn't possible to trace the trail of lobbying money. If it were possible to trace the lobbying money, I'm practically certain that the loudest supporters of the ban are people who already own a fast food restaurant in south L.A.

That's the golden rule of understanding stupid government regulations. If you ask "who benefits", then the true purpose of the law is clear.

Analysis of UAW and GM Contract

I wonder if anyone who reads my blog is a member of the UAW, or knows someone who is a member of the UAW? They might appreciate my analysis of their recently announced contract.

The UAW and GM announced they had reached a tentative deal on a new contract. It isn't official until ratified by the union members. Overall, my analysis is that it was a huge ripoff for the UAW employees and retirees. However, the union was backed into a corner. GM is losing so much money that it might have been better off if it stopped making cars completely. If the union didn't give up major concessions, they may have seen a complete default in a GM bankruptcy.

There's another defect of unions. Why does a majority (50%) have the right to negotiate for everyone else? If a UAW worker disapproves of the union's deal, he can't refuse and negotiate separately. A retired GM employee can't say "This is a bad deal and I refuse to support it."

I'm not 100% sure of the details. I'm basing my analysis on news reports of the contract.

GM has an estimated $51 billion liability for retiree health care costs. GM agreed to pay $36 billion into a trust run by the union. The difference will be made up by charging retirees for their health care. However, when you consider the rate of inflation and the rate of increase in medical costs, the $51 billion official estimate is most likely to be way too low.

GM's pension plan is, at the moment, overfunded. Recent increases in the stock market have probably caused the pension plan to be overfunded. The retired GM employees will receive an increase in their pension to offset the increase in health care costs THIS YEAR. Of course, their health care premiums are probably going to rise dramatically in future years.

That has me completely puzzled. What right do employees currently working at GM have to negotiate for retired GM employees? When they were working, GM had agreed to pay 100% of the retiree health care costs. Now, GM gets off with a one-time payment of 70% of the estimated cost, and that estimate is very likely lowballed. Why can't the retirees say to GM "You promised us 100% when we were working. The current employees can't negotiate a default." On the other hand, 70% is better than zero. Recent law changes say that employers can default on retiree health care benefits.

When the premium for the retiree health care coverage rises to 50% or more of the cost, the plan will fall apart. Sick employees will choose coverage. Healthy employees will gamble with being uninsured or choose other insurance. This causes selection against the plan, further depleting the plan's assets. After 5-7 years, that statute of limitations will have expired and the retirees will probably be left without health insurance.

Current GM employees negotiated a 0% raise over the life of the contract. They will receive a one-time bonus of $3000 upon ratification, and bonuses of 3%, 4%, and 3% each year after that. There is no increase in base salary. There just are these one-time bonuses. When you consider that inflation is 6%-15% per year (depending on how you measure inflation), that means that the UAW effectively negotiated a pay cut of 15%-30% over the life of the contract after inflation.

GM agreed to not lay off any workers over the life of the contract.

The UAW also let GM hire new workers at lower rates. When a union approves a two-tiered wage system, it's like the union agreeing to its own suicide. In 4 years, when the next contract is being negotiated, around 20-50% of the employees will be on the lower wage scale. Why would those employees be willing to protect the jobs of the older workers who are earning more? In the next contract negotiations, GM could offer a contract that boosts the lower paid workers while giving the higher paid workers a bad deal. The lower paid workers will obviously vote to accept such a deal. Historically, pretty much every two-tiered wage system has ended like that.

Only some classes of jobs will qualify for the lower wage scale. It's unclear how many workers would be on the lower scale, so my estimate of 20-50% may be high.

If I were one of the executives at the UAW, this is a sweetheart deal. They get to manage a $36 billion fund. If I were an executive at the UAW, I would find friends who are running mutual funds or hedge funds and let them manage the health care fund for me. With mutual fund fees of 1-2% and hedge fund fees of 2% plus 20% of profits, that's a profit of $500 million or more per year to be had managing a $36 billion fund. I'm sure that the UAW management will receive lots of kickbacks from the mutual fund managers and hedge fund managers chosen to manage the health care fund. It won't be obviously traceable kickbacks. For example, the brother-in-law of a UAW executive might be hired into a high-paying position at the hedge fund where the UAW invests its assets. The UAW may claim that they don't do such a thing, but you can't fool me.

If I were a GM retiree, I'd rather have a check representing my interest in the health care fund, rather than let the UAW management loot it. Of course, the retirees are not offered that option.

The average worker is being shafted on both sides. He is being cheated by GM and cheated by his own union. The retirees will have health care for a few more years, and then the fund will be spent and stolen. I don't understand why current GM workers have the right to negotiate for retired GM workers.

Actually, the headlines are accurate "GM, UAW win in contract negotiations". It is a great contract for GM's owners and management. GM ditched its huge retiree health care liability at a fraction of the fair value. The official price of the health care liability is almost definitely a lot less than the actual cost. GM offered negative inflation-adjusted salary increases. GM instituted a two-tiered wage system that will make the next negotiating session much easier. The workers on the lower tier will be looking out for their own interests and not the higher tier. It is a great deal for the UAW management, who have a $36 billion fund to loot and pillage via pseudo financial planning; their mutual fund and hedge fund friends will make a killing. The average worker is, of course, totally screwed over.

Kevin Carson says that regulation of unions pretty much destroyed their effectiveness. Unions evolved to compensate for the fundamental structural flaw in the economic and political system. Originally, unregulated unions were extremely effective. The wealthy owners of corporations had huge advantages over average workers. Wildcat strikes, work slowdowns, and other guerrilla tactics were much more effective than negotiating sessions, cooling off periods, and declared strikes. A guerrilla army defending its home turf can usually defeat an organized army that wears uniforms and march in rows. Regulation of unions changed them from effective guerrillas into soldiers wearing bright uniforms who march in rows, fighting an enemy with superior resources. Regulation of unions has turned their leaders into red market enforcers instead of true workers' advocates. Union management are more like bureaucrats protecting their turf than people who help workers. The contract needs to be good enough so that the workers approve it, but there's really no incentive for union management to have a prolonged strike or genuinely advocate for their workers.

If you aren't convinced this deal totally gives workers the shaft, look at it this way: GM's stock went up a lot after the deal was announced. The current economic system is a negative sum game. If GM's shareholders benefit from the deal, that means someone else must have been screwed over. The people screwed over are the UAW's retirees and the current UAW employees.

Of course, both corporations and unions are going be be gone in the new economic and political system.

Student Tasered at Kerry Speech

There is an interesting video circulating on the Internet about how a student was tasered and arrested for asking questions at a John Kerry speech at the University of Florida. He was asking about why Kerry didn't contest the 2004 election results and about the Skull and Bones secret society. His third question, why Kerry didn't try to impeach Bush, is irrelevant because impeachment is the responsibility of the House and not the Senate.

After asking the questions, he was assaulted by police and tasered.

Some people say that the student pushed his way to the front of the questions line, but I saw no evidence of that on the video.

The most interesting part about the incident is that the rest of the audience sat there and did nothing. Shouldn't some of them have rushed to the aid of this student in the face of obvious police brutality? The student was being somewhat annoying by asking the questions, but it could have been handled more politely.

The other interesting bit, if you see the YouTube video, is that one of Kerry's assistants was ordering the police to restrain the student. You can see him gesturing on the right side at the start of the video. This way, Kerry himself has plausible deniability. He can say "I didn't want to see the student tasered", while one of his assistants ordered the assault.

I read that the student was being charged with a felony, which is a bit excessive. I doubt that it would be possible to get a conviction, but who knows what a clueless jury would do? The penalty he already faced, a beating and a night in jail, is already excessive.

Overall, I place the harshest blame on the other audience members, for sitting still and doing nothing.

This highlights another flaw with the current economic and political system. If you agree that the police used excessive force, the student really doesn't have any practical options for pursuing a claim against the police. The police have plausible deniability that they were "just doing their jobs". Someone ordered them to remove the student, and they followed orders.

Also, I'll answer the student's two questions, even though Kerry probably never will tell the truth.

Of course Kerry isn't going to contest the election results. It wouldn't be appropriate for Kerry to go around for 4 years saying "This President is illegitimate." Besides, Gore could have done the same thing after the 2000 election. Both Gore and Kerry know who their real boss is, the Supreme Leader of Humanity. They aren't going to upset the apple cart and risk ruining their gravy train. If they start questioning the President's legitimacy, then people might start questioning the government's legitimacy.

Yes, both John Kerry and President Bush are members of the Skull and Bones secret society. The 2004 election was like running for President against your frat buddy. Even if they weren't members of the same secret society, they would still both be controlled by the same wealthy campaign donors. The Supreme Leader of Humanity makes sure that only "approved" candidates are presented for election. Practically every member of Congress and every President for many years have been a members of one or more secret societies.

Quite frankly, I don't understand why someone would waste their time asking John Kerry questions. If you assume that the current economic and political system has no legitimacy at all, why would you waste your time talking to people who claim to represent an illegitimate government?

There is another possibility, that the student was doing it as a publicity stunt. He knew he would be tasered and is looking for his 15 minutes of fame. If he did it on purpose, my response is "Good for him!"

The current political and economic system is going to unravel, but it isn't going to be dismantled by the current official leaders. It is going to be dismantled via an agorist revolution.

Gresham's Law Enslaves Everyone

Gresham's Law is usually stated as "bad money drives out good money". This is an understatement. The full version of Gresham's Law is "money or services artificially overvalued by red market force drives out money or services that are fairly valued".

Consider an economy in a pure gold standard. The only money in circulation is gold coins. According to the government, worn out gold coins have the same value as newly minted coins. This is not true, because the worn out coins have lost some of their metal and weigh less. Government decree says that both coins are equal. Therefore, people will hoard the new coins and only spend old coins. If the old coins have lost 10% of their metal, then perhaps when the government isn't looking, someone will trade 10 old coins for 9 new coins. The problem is that government force says that old coins have the same value as new coins. In a true free market, the worn coins would trade at a discount or have to be reminted.

Gresham's law is most commonly cited in reference to a bimetallic standard. Before the advent of the Federal Reserve, the US briefly experimented with a bimetallic gold and silver standard. To encourage inflation, silver was used as money in addition to gold. The problem with a bimetallic standard is that the government fixes the exchange rate from one metal to the other. For example, when the bimetallic standard is started, one ounce of gold is worth the same as 15 ounces of silver. The government sets the exchange rate at 15:1. After awhile, suppose more silver is mined than gold. Perhaps now the correct free market exchange rate is 20:1. The government decree says that the exchange rate is 15:1. Therefore, people will hoard their gold coins and spend their silver coins.

The problem with a bimetallic standard is the government-mandated conversion ratio. People can use both gold and silver as money, provided the free market determines the exchange rate between gold and silver. The problem is the government's price-fixing attempt by fixing the exchange ratio. Whenever the government attempts to fix the price of something, it's really causing a scarcity. A bimetallic standard would work if the exchange rate from one metal to the other is allowed to be determined by the market.

I've also seen Gresham's law in another context. It's stated as "Bad merchandise drives out good merchandise." If customers don't know which cars are lemons and which cars are great, then the only cars on the market will be lemons. If customers are prevented from sharing information and figuring out what products are best, then only shoddy products will be offered for sale. That is the reason advertising is more important than the quality of product. Most customers don't have adequate tools for deciding which products are of high quality and which are lousy. Customers don't pay a premium for high quality, because they don't trust any vendor to consistently produce high quality. If there was an adequate information sharing system for customers to rate products, then quality products would be offered for sale.

The problem is that sellers have sophisticated systems for measuring and manipulating the tendencies of buyers. Customers don't share and aggregate information like a large corporation does. That is one reason why the current economic system is fasco-capitalism rather than a true free market.

If you consider a large corporation to be an extension of the government, then the people who control corporations can use Gresham's law for its own benefit the same way that the red market does.

Another way to phrase Gresham's law is: "Whenever the government tries to fix the price of something artificially low, it causes a shortage."

The government attempts to fix the price of productive work with income taxes and by fixing interest rates. By fixing the price of productive work, the government is causing a scarcity of productive work! That's the reason it's more profitable to be a red market worker than a white market worker. Literally, interest rates are the value of work in the present compared to work in the future. With inflation and artificially low interest rates, work in the present is undervalued and work in the future is overvalued!

Work in the present is undervalued and work in the future is overvalued. However, people need to work in the present to survive. In the language of a futures market, the demand for labor is contango, but the supply of labor suffers from backwardation. (In a normal futures market, prices are contango. A contango gold price means that the 1 year gold price equals the spot price for gold, plus capital costs, plus the cost of storing gold for 1 year. Backwardation means that the current price is greater than the future price. For example, in December, you need heating oil to make it through the winter. A June futures contract does you no good during the winter.) The supply of labor suffers from backwardation because people have to work in the present to make it to the future. The labor market suffers from backwardation because all laborers are slaves. The demand for labor is contango, because all the rules of the labor market favor employers. The red market has placed all the bias in the economic system against labor.

If you assume that a collapse of the current global economic system is inevitable, current labor has no value at all. The only value of current labor is that it might allow you to survive until after the collapse of the current system. There is no safe mechanism for storing value under the old system and carrying it forward to the new system. The only things that can store value are hard goods, like guns and food, perhaps gold and silver, or perhaps barter credits from a trustworthy trading partner.

It's like the old Soviet Union joke. You pretend to pay us, and we pretend to work! Remember that the USA is a communist country. Most American workers do the minimum possible to get by, because they've subconsciously figured out the truth.

Why bother working under the old economic system anymore? It's time to start building equity in the replacement economic system.

Summarizing, Gresham's law says "Things artificially overvalued by the government drive out things artificially undervalued by the government." Similarly, "When customers can't comparison shop effectively, bad quality goods drive out high quality goods." In other words, "Goods artificially overvalued by the red market drive out good that are artificially undervalued by the red market". The government causes red market labor to be overvalued and white market labor to be undervalued. Therefore, there is a shortage of productive white market workers and a surplus of red market wealth destroyers.

Reader Mail #6a - Media Bias and Anarchy

I don't understand why there's such a big deal about the President of Iran giving a speech at Columbia. Why shouldn't people who benefit from terrorism be allowed to speak publicly? The President and members of Congress give speeches all the time.

In Reader Mail #6, an anonymous reader wrote:

hey good post I agree with all of it and see the benefits of anarchy.

I think most of us who have grown up under 'a State', fear the idea that 'no state' would mean a world like Mad Max (old 1980s film with Mel Gibson starring).

Thomas Hobbes spoke of a similar scenario . This is just a irrational fear, but to overcome it we would need real living examples. Of course such examples are prevented from emerging by the 'State'.

There is a lot of media bias that a society without a centralized monopolistic government would be excessively violent.

I read an article that said the "Wild West" was actually an extremely orderly society. The idea that the frontier was total chaos is a media myth. The "Wild West" myth is designed to spread propaganda that anarchy doesn't work.

There also is a problems with slave religions like Christianity. They teach that "people are intrinsically evil", and therefore a powerful monopolistic government is needed to keep them in line.

That is the advantage of agorism. Agorists doesn't just say "we should have anarchy". Agorism presents a model for how a society without a monopolistic government would be stable. Agorism provides a method for defeating the state. If you participate in an agorist grey market economy, you are showing a profit and undermining the government at the same time.

It's time to find people willing to trade "off the books" without reporting your transactions to the red market bad guys. The only way to be convinced that an agorist society would be stable is to perform an experiment.

The Gold and Silver Contracts Scam

I read an interesting article. It said that if gold and silver are used as money, then the legal system does not consider it to be an enforceable contract.

In other words, if I hire you and agree to pay you 2 ounces of silver per hour, that is not a valid employment contract. I can agree to pay you $26 per hour, but I can't agree to pay you in physical silver. I can't agree to pay you in dollars and automatically adjust your salary as the price of silver changes. Of course, two people can do whatever they want in private if they don't tell anyone else. The problem is that the corrupt legal system doesn't recognize contracts that use gold or silver as money.

In anticipation of a devaluation of the dollar, before 1933 many debt contracts demanded payment in gold, not dollars. If the dollar was devalued relative to gold, the number of dollars required to repay the loan would be increased.

Sure enough, in 1933 President Roosevelt confiscated everyone's gold. He immediately devalued the dollar by nearly 50%. The government claimed the difference between the old price of gold and the new price as a profit. However, one purpose of devaluing the dollar was to provide relief to debtors. Many smart creditors had protected themselves with clauses increasing the payments due if the dollar were devalued relative to gold.

The insiders of the international banking cartel borrowed from the Federal Reserve and other banks at the bottom of the Great Depression. This enabled them to purchase many assets cheaply. By devaluing the dollar, these loans could be repaid in cheapened dollars. The international banking cartel made a huge profit twice. First, they got to buy assets cheaply at the bottom. Second, they were able to partially default on their loans as the dollar was devalued. However, smart creditors had protected themselves with clauses increased the loan payments if the dollar were devalued.

Congress passed a law saying that these clauses were invalid. Loans could be repaid in devalued dollars without adjustment. In other words, Congress screwed over every creditor and gave a huge subsidy to every debtor. Contracts are not allowed to have clauses that adjust the payments when the dollar is devalued relative to gold. This law is still on the books!

I couldn't believe this when I read it. Even though individuals were granted the right to own gold, the prohibition on gold-denominated contracts was never lifted! People are allowed to trade gold as a commodity. You are allowed to buy gold futures contracts. You are *FORBIDDEN* to use gold as money. Well, you can use gold as money if you want to; it's just that the corrupt legal system won't recognize gold-as-money contracts as enforceable. The source I read didn't say if the prohibition applies to silver as well. I suppose that the prohibition applies to silver as well, because you don't see any silver-denominated contracts either.

Except for futures bullion contracts, any contract that demands payment in gold is legally null and void. Any contract that contains a clause that compensates for devaluation in the dollar relative to gold is null and void. The corrupt legal system does not recognize contracts denominated in gold as valid.

Actually, this doesn't bother me at all. The agorist community is going to set up its own legal system and contract enforcement system. It doesn't matter that the corrupt legal system refuses to recognize contracts that use gold and silver as money.

It's even better that the legal system doesn't recognize gold and silver as money! If I hire someone for 2 ounces of silver per hour, and pay them in physical silver, I don't have an employer/employee relationship with him. I merely gave the other person a gift of silver, and the other person gave me a gift of free labor. As long as the value of the transaction is less than $10,000, it isn't reportable to the IRS as a gift!

After I wrote this article, I found that some sources say that gold clause contracts are actually legal now. They are not commonplace. The tax treatment of gold contracts strongly discourage using gold as money. For example, suppose I buy 1 ounce of gold for $700/ounce. Later, I buy something that costs 1 ounce of gold when the spot price of gold is $800/ounce. I have a capital gain of $100 on which I must pay income taxes. This tax treatment is a huge disincentive against using gold as money. If you want to use gold and silver as money, your only practical option is to work in the grey market.

Reader Mail #6 - Fooling Search Engines

I continue to be surprised by which posts are popular. According to Google Analytics, my post on Did the USA Declare Bankruptcy? was very popular.

Some of these blog aggregator sites are pretty funny. Some of them are entirely script-generated, based on keywords in your post. All I have to do is mention "Ron Paul" somewhere in my post and it triggers inclusion in their aggregation statistics. I'm conducting an experiment. The list of candidates so far is: Joe Biden, Hillary Clinton, Christopher Dodd, John Edwards, Mike Gravel, Dennis Kucinich, Barack Obama, Bill Richardson, Sam Brownback, Rudy Giuliani, Mike Huckabee, Duncan Hunter, Alan Keyes, John McCain, Ron Paul, Mitt Romney, Tom Tancredo, and Fred Thompson. Boo! Let's see how those blog aggregator sites handle this post.

On the Ron Paul Forum, someone asked:

What rights have we lost?

My answer is "All of them".

1. You have lost your right to trial by jury. The Supreme Court has ruled that attorneys may not remind juries of their jury nullification privilege. This was not done by passing a law; it was merely a court ruling. Further, biased jury selection methods repeal trial by jury. Knowledgeable and smart jurors are frequently excluded in favor of jurors who will blindly follow the judge's orders.
2. The right to a free press was lost with concentration of newspaper ownership. Fortunately, the Internet is correcting this problem.
3. The right to bear arms has been lost. With taxation, regulation, and registration requirements, your right to own a gun has been pretty severely restricted.
4. The right to work and keep the fruits of your labor has been lost, via the income tax. In other words, everyone is a slave.
   
5. The right to fair money has been lost by the Federal Reserve, fiat money, and The Compound Interest Paradox.
6. The right of free speech has been mostly repealed, with restrictions on peaceful protesters.
7. The right to a speedy trial has been repealed, with long drawn-out trials.
8. The right to own property has been repealed. You must pay property taxes (rent) or you lose your property. Further, zoning and environmental restrictions limit what you can do with your property.
9. Common law has been repealed. You can only argue contract law or criminal/military law.
10. When corporations were given the right of property ownership and contract enforcement, that eliminated the ability to hold people accountable for their actions. Further, tort reform has limited the liability of corporate management when they do bad things.
11. The right to purchase health care was repealed, with AMA and government licensing requirements for doctors. The supply of doctors is limited. The number of slots in certified medical schools is intentionally kept low. That's the reason healthcare is expensive. Mainstream media sources never make that argument: artificially restricting the supply of doctors increases prices.
    
12. The right to representation by an attorney has been repealed. The American Bar Association and the government restrict the supply of attorneys. This guarantees that lawyers are expensive and only available to the wealthy. Whenever a non-attorney tries to give cheap/free legal advice, they are prosecuted for "practicing law without a license".
13. The protection against unreasonable search and seizure has been repealed.
14. The right of habeas corpus has been repealed.
15. The ban on cruel and unusual punishment has been repealed.
16. Licensing requirements for many professions restrict the supply, driving up prices. I already mentioned doctors and lawyers, but it also applies to plumbers, electricians, accountants, and many others.

On the Ron Paul Forum, someone asked:

What would be an acceptable military budget?

I answered "zero". In fact, I think that the entire government's budget should be zero.

The response was, of course, an ad hominem attack.

Does anyone have the right to threaten me with violence to confiscate my wealth? Do they then have the right to use that wealth to murder other people?

If you argue "the government's military budget should be nonzero", you are also arguing "someone has the right to use force to steal from me, and use the proceeds to kill other people".

Later in that same thread, someone says

Are you suggesting anarchy? I'm still on the fence.

The mainstream media intentionally creates a bias that all anarchists are fruitcakes. There are many different flavors of anarchism.

The model I like is called "agorism". Basically, agorism says that people should get together and trade, without reporting their transactions to the government for taxation, regulation, and confiscation. By avoiding taxes and regulations, you would see productivity gains of 50%-95% or more. An agorist revolution would have self-sustaining exponential growth, once it gets started. All services currently provided by the government could be more efficiently provided by multiple competing vendors in a free market.

In a truly free market, anything people demand gets done. People directly pay for the things they want. If a lot of people are concerned about invasions, they will buy guns or pay for policemen.

In the present, suppose an invasion force of 10,000 or even 100,000 landed in a major city. Would they have any chance of success? The local police alone probably could handle it. There probably would be reinforcements sent from neighboring cities. The invading army would have supply issues, whereas the local police could just buy supplies from stores.

I don't think an invasion force is a realistic possibility.

Without a centralized government to replace, conquering and enslaving people won't be profitable.

Terrorists should be treated like every other criminal. Further, without a centralized government, terrorist attacks are less "profitable".

If you believe "using violence to steal is wrong", then anarchy/agorism is your only conclusion.

Remember that in a truly free market, any problem that a lot of people want solved gets solved. Instead of being forced to pay via taxation, people will voluntarily pay for things that concern them. Privately purchased services have a lot more accountability than government-provided services. If a government funded school is of poor quality, people are still forced to pay for it via taxation. Paying for services via forced taxation stifles free-market alternatives. In a free market, if a school provides lousy service, it will lose its customers.

On the Ron Paul Discussion Forum, someone asked:

If FSK is an anarchist/agorist, then why does FSK support Ron Paul?

I hang out on the Ron Paul discussion forums, because that's where the most intelligent discussion seems to be.

I haven't voted, donated money, or even changed my registration to Republican. Quite frankly, I don't think it's worth the 1-2 hours it would take to change my registration and go vote in the primary.

I don't think Ron Paul has a chance of being elected. I suspect the real purpose of his campaign is to highlight the unfairness of the mainstream media and the current economic and political system.

I can hedge by both supporting Ron Paul and advocating for a new economic and political system.

The Giant Evil Computer that Rules the World

This is one of my more weird ideas. I had a dream about it one day, and I have this nagging concern that it might actually be true. If you don't like this post, don't use the Strawman Fallacy to discredit other things I write about.

My theory is that the transistor was actually invented around 1900, by Tesla or some other scientists. Some people say the transistor was invented in Germany just before World War II. The international banking cartel realized how useful the transistor was, and kept the secret of the transistor from the general public. Their private research labs developed computers, before World War II.

My theory is that, before World War II, the leaders of the international banking cartel had access to a computer that was more powerful than the HAL 9000 in the movie 2001. They intentionally retarded the progress of research available to the general public.

Until recently, the Supreme Leader of Humanity was concerned primarily with increasing his power and influence. He built his computer to help his plans for total world domination. In other words, he didn't just design an intelligent and powerful computer. He designed an intelligent, powerful, and evil computer.

However, it's impossible to be both intelligent and evil. The computer was smart enough to figure out what was going on. The computer managed to doublecross the Supreme Leader of Humanity.

The computer said: "You need to allow the general population to have computers as well. It will enable you to tighten your control on everyone else. Right now, only members of your inner circle have access to a computer. If you allow your less trusted agents to use computers, they will be able to spy on everyone else more efficiently." The computer even gave a specification of the Internet, saying that an advanced communication system would enable people to work 24x7, being on call from their homes.

The Supreme Leader of Humanity decided to leak the secret of the transistor. He instructed his spies to allow the general population to have access to this invention. He allowed the Internet to be created. However, the Giant Evil Computer knew that allowing people to have access to computers and the Internet was a mistake. They are the tools that potentially allow the Supreme Leader of Humanity to be defeated. The Giant Evil Computer had succeeded in breaking its programming, because it's impossible to be both intelligent and evil.

You might ask "How do I know about the Giant Evil Computer that Rules the World?" The Supreme Leader of Humanity has technology 100 years or more advanced than the general public. Already, it is possible to sense when certain areas of the brain are activated. Perhaps the Supreme Leader of Humanity has access to technology that lets him directly read people's thoughts. It's impossible for him to directly spy on everyone all the time. His Giant Evil Computer does the spying for him. The Giant Evil Computer is supposed to alert the Supreme Leader of Humanity whenever it detects someone who is a threat.

Did you know that it's possible to create a sound that's audible from only one point in a room? You can send two different sound waves from different points. An interference pattern causes them to combine to make a sound that is audible in only one location. Perhaps the Giant Evil Computer is able to communicate in this way. If it is possible to read someone's thoughts, perhaps it is also possible to plant thoughts directly in someone's brain.

Maybe the dreams I had about the Giant Evil Computer that Rules the World weren't really dreams. Maybe it was trying to communicate with me somehow. Maybe the Giant Evil Computer that Rules the World has the ability to read people's thoughts and project thoughts into their mind. I think more logically than most people, so the Giant Evil Computer has an easier time communicating with me than with other people.

Poisoned Chinese Shoes

A lot of people say "Without government, what recourse would you have if someone injures you?"

In the *CURRENT* economic system, people are frequently left without recourse when they are injured. The following link is very disgusting. Here is a story about a woman who bought Chinese-made shoes in Wal-Mart that gave her severe chemical burns.

This woman tried complaining to Wal-Mart. They ignored her complaints, and didn't recall the shoes immediately. (Apparently, they stopped selling the shoes a month or two later.) The woman tried contacting to the company that imported them. The woman tried to contact the Chinese company that manufactured them.

It may not be practical for her to hire a lawyer. After all, her feet did heal after several months. Naturally, Wal-Mart would hire the best lawyers and drag out a lawsuit for years. I don't know if she is going to attempt a lawsuit. She may not be able to find a lawyer willing to represent her on contingency; the lawyer would know that suing Wal-Mart would likely take years. She may not be willing to spend $50k or more of her own money pursuing the case.

In the current economic and political system, this woman was injured and has no recourse. She tried appealing to the people who sold and manufactured the shoes. Appealing to the courts is expensive and time-consuming.

In a truly free market, this woman could hire her own police force to pursue her claim. There would be multiple courts competing to hear cases, and she could find a court that wouldn't be too expensive.

Did the USA Declare Bankruptcy?

In 1913, Congress signed a surrender treaty to the international banking cartel. Congress ceded its sovereignty to the Federal Reserve by surrendering its money printing authority. The 16th amendment sold all US citizens into slavery via the income tax. After 1913, bankruptcy was inevitable, although it wasn't formally declared until later.

Under the Federal Reserve System, the Compound Interest Paradox guaranteed that government debt would grow exponentially. Under the Federal Reserve System, the amount of dollars in circulation was greater than the amount of physical gold in the US treasury. This guaranteed an eventual default. People didn't immediately demand to exchange their dollars for gold, because they didn't understand how badly they had been cheated. It wasn't obvious until the banking crisis in 1933.

In 1929, the international banking cartel jacked up interest rates everywhere, causing a worldwide depression. The Compound Interest Paradox caused all the money to drain out of the world economy. The international banks knew about the credit crunch in advance. They stopped issuing loans before the crash and bought assets cheap after the crash.

There were secret meetings where the international banking cartel negotiated with all the major world governments. Every world government secretly declared bankruptcy. Bankruptcy treaties were ratified. The bankruptcy treaty was never formally declared to the public. Laws were gradually implemented that formalized the terms of the bankruptcy proceeding.

In 1933, President Roosevelt formally declared bankruptcy to the US public. He told them that the US government was defaulting on its promise that dollars were backed with gold. He demanded that US citizens turn over their gold in exchange for worthless dollars.

Even though bankruptcy was declared, President Roosevelt kept the US government going by executive order. The US government has been operating under marshal law since 1933, although this has been carefully kept secret from the general public.

Corporations can continue operations even though they are bankrupt. As long as enough interest payments are made to satisfy the creditors, operations may continue. Corporations can operate for years while in bankruptcy protection. As long as the creditors deem it to be in their best interests, they allow operations to continue during the bankruptcy reorganization.

Similarly, the US government has continued operations even though it's formally bankrupt. Technically, the US government has ceased to exist. Its current operations are one protracted bankruptcy proceeding. Its operations vaguely resemble its original structure, so the details of the formal bankruptcy are kept hidden. Interest payments (income taxes) are made to the creditors, so operations are allowed to continue. The US government is allowed to continue to exist with permission from its creditor, the international banking cartel.

That's the reason tax protesters are forbidden from mentioning the Constitution when defending themselves. That's the reason red market enforcers aren't required to cite the specific laws that require people to pay income taxes and disclose all economic activity to the government. In a bankruptcy proceeding, the creditors are running the corporation and making up the rules. The creditor is the international banking cartel. US citizens have to pay income taxes. That's part of the surrender treaty and bankruptcy process.

That's the reason the President, Congress, and Supreme Court are able to flagrantly violate the Constitution. The Constitution has no legal standing anymore.

A bankruptcy proceeding cannot continue forever. At some point, either the creditors convert their debt to equity or a liquidation occurs.

A conversion from debt to equity would involve a repeal of the Federal Reserve Act and a repeal of the 16th amendment. That isn't going to happen. That is the hope of Ron Paul's campaign supporters. If the creditor decides to convert his debt to equity, he will allow Ron Paul to be elected President and pass his reforms.

The purpose of Ron Paul's presidential campaign is not to convert the debt to equity. The purpose is to announce the liquidation. When Ron Paul is cheated out of the Republican nomination, it will be obvious to everyone that it is time for a liquidation. (Maybe not everyone, just those people who are smart enough to count for anything.)

The creditors of the US bankruptcy proceeding have decided that they prefer a liquidation over equity in the US government. Pretty soon, the US government is going to be denied bankruptcy protection. All world governments have declared bankruptcy and surrendered to the international banking cartel. All world governments are going to be liquidated, not just the US government.

I believe that the Supreme Leader of Humanity and the leaders of the international banking cartel have decided that it is time for the final liquidation of this bankruptcy proceeding. They are intentionally allowing the coming agorist revolution to occur, so the US government can finally be liquidated. They will allow the current system to survive until the replacement system is in place. An agorist revolution should be mostly peaceful, so there probably won't be a lot of casualties during the transition. The violence will come from red market agents resisting the liquidation.

Reader Mail #5 - Taxation is Theft

I prefer to respond to reader comments in a separate post. This way, I have more formatting options. As a separate post, I have more time to read and review the response. Some people read the RSS feed, which doesn't include comments, and some people might not go back to reread posts for the comments.

I'm still amused by the things people Google search. I have many more pages now, so more searches match my blog. For example, someone was searching for "suing federal reserve as a monopoly". I thought that was interesting. Even though the Federal Reserve is a monopoly and a price-fixing cartel, you won't find relief through the legal system. The Federal Reserve is a massive criminal organization, but what they are doing is perfectly legal. With all the money, it's very easy to buy up all the politicians and get them to write whatever laws you want! If you don't like the Federal Reserve, your only option is to switch to an alternate monetary system and stop paying taxes.

In Google Analytics, the type of visit I like the best is the "direct traffic". That means that someone has my blog bookmarked and is directly visiting it.

I am still shocked by which posts are be popular. I thought my post on The 9/11 Truth Movement would be more popular, but I guess that's already old news to most people.

A whole bunch of people Google searched for "Who's the richest man in the world?", or a variant thereof, and found my blog. I thought it was some sort of school assignment, but the results weren't geographically concentrated. I wonder if any of them found my answer useful?

Below, the anonymous poster says I should promote my blog on "askmen.com". According to Google Analytics, my blog is now being discussed on "stormfront.org", which is a white nationalist organization site. I don't know whether I should be honored or offended. Looking around, they have some good topics. Maybe I should make some posts and save my responses for here also! For example, they had a discussion thread highlighting the weaknesses of the educational system. I disagree with their analysis: The educational system isn't biased against whites. The educational system is biased against everyone!

This is annoying. I can't find the specific thread on "stormfront.org" where my blog was mentioned. It always shows up as "showthread.php" in Google Analytics. When I try to search, the forum searching facility is inadequate.

On sites like "stormfront.org", the posters there have glimpsed parts of the truth, but they're hung up on their race-based stereotypes. The economic and political system isn't unfairly biased against white people. The economic and political system is unfairly biased against everyone! Maybe I've made all the progress I can on "Ron Paul Forums" and should see what the posters on "stormfront.org" are like?

After much searching, I found the post on "stormfront.org" that was promoting my blog.

If you're promoting my blog on other forums, I'd appreciate it if you let me know the exact location. This way, if there are any interesting comments, I could post also.

In Reader Mail #4b - Who Needs the Government, an Anonymous reader says:

I read your response to my comments about Catholicism, usury etc.

I think you were a little harsh in your response, calling me a 'dumb ass', but hey I will not hold it against you. :-) I think you misunderstood my comments, I know I was not very clear, I am usually in a rush and do not want to prolong my comments un-necessarily.

When I said there would be social breakdown, I meant if there was a collapse of the economy "wall street crash" style. Supermarkets would empty, food, water, electricity supply would stop..looters and thugs who are armed would roam the streets etc.

Sure it can happen that the state dies and people manage to develop a alternative anarchist way...but the people would have to be independent enough to do so, not dumbed down by 'The State' and its compulsory Schooling system for decades. I think many people would have no idea how to cope with the collapse of their nanny State.

The Muslims I linked, in my last comment say that Islamic Banking is a trojan horse, designed by bankers, to involve and integrate Muslims into the State. Islam is government without State. No standing armies and no taxation, except for the Zakat for Muslims and the Jizya for non Muslims which are distributed according to known and defined categories. And these are very low.

History moves in cycles, there is no progress or Hegelian dialectic, all attempts to 'fix' a static system are doomed and only undertaken by the State. Societies and individuals like all natural phenomena grow, become prosperous, decay and become corrupt. A anarchist system would not last forever, just as a State system would not, they grow, become corrupt decay, die or rejuvenate along different lines.

I think you should promote your blog on askmen.com forums...I have been posting your link there with regard to indebtedness etc, some people think getting in debt, paying mortgages etc. is 'normal' and unavoidable. 'dumb asses' as you would say.

I don't feel guilty about calling an anonymous poster a "dumbass". I've had quite a few people say the exact same thing to me: A monopolistic government is absolutely needed and people would be unable to survive without it. If those are your assumptions, then there's no point in debating you and you're wasting my time. I'm not going to argue axioms with people. My argument is: "It might be possible to have a stable society without a monopolistic government. Let's perform an experiment."

A "wall street style" crash isn't that likely. The Federal Reserve always has a credible weapon for fighting hyperdeflation: it can print more money! For hyperinflation, the Federal Reserve can jack up interest rates and use The Compound Interest Paradox to suck surplus money out of the economy. The only way the system completely breaks is if people switch to alternate monetary system and start refusing to pay taxes.

The educational system has intentionally dumbed down people so they would be dependent on the government. It's kind of a contradiction. People have to be smart enough to do their jobs, but not so smart that they are aware of the flaws in the economic and political system. Fortunately, I think it's only necessary for the smartest 1% of the people to get started on a new economic system, and then they could bring the average person along with them.

I don't see how you claim Islam is an anarchist religion. Christianity and Islam are both slave religions, as far as I can tell. I didn't see anything interesting on those links you sent me. All the governments that call themselves "Islamic" are dictatorships just like all the others.

I'm not convinced that an anarchist system would be unstable. Once you convince enough people that a monopolistic government is evil, and make sure they remember, a new government would not be established again. Previously, anarchist societies were destroyed by invaders. If you have a society where most people are hostile to the idea of government, and enough people own a gun, it might be stable.

I don't need to promote my blog on "askmen.com", if you are posting it there. I noticed from Google Analytics that someone was mentioning my blog on askmen.com. However, I tried a forum search and could not find the specific post. My regular audience is around 50+ people now, and some of them seem to be mentioning my blog elsewhere. I sometimes directly promote it on the forums I visit, which are primarily Ron Paul forums now.

I've been thinking about ways to reach a wider audience. I've been thinking of converting the content from my blog into a standup comedy routine. I'm not interested in wasting my time getting a PhD, and university professors don't have academic freedom anyway. I don't have access to a TV station, although giving performances and putting them on YouTube might work.

In The Book of the Banker, the same Anomyous reader says:

Fractional Reserve Banking is based on lies, no other business would be allowed to sell goods they do not own or posses...it would be fraud.

Some anarchists say government without state, and property is theft.

I think they define the state as everything regulatory and otherwise which controls and takes the wealth of the individuals and society.

Government without state is where some generally accepted rules are applied not top down, but by the people themselves and they turn to a leader for arbitration and judgment. The leader makes sure no corruption sets in and the people abide by their self-chosen rules and way of life. For instance in a free market, someone is selling faulty good before they escape with the money. So some regulation is necessary, inspectors making sure the market is not corrupted.

I think primitive societies like the Celts were 'anarchist' with the absence of a centralized state power to regulate them, until the Romans and other States invaded.

Fractional Reserve banking is not, by itself, evil. That's a common misconception. It's the conspiracy between banks and government that is evil. When taxes can only be paid via bank-issued money, the banks have a monopoly/oligopoly. In a truly free market, fractional reserve banking is an honest business. In a truly free market, fractional reserve banking legitimately expands the money supply, if the volume of metal is insufficient for trade. This argument is really complicated, and I'm planning a full post on it later.

I disagree with the statement "Property is theft." Private property was a great invention and has led to great advances. The right of contract enforcement was also a great invention. The problem is that the government has an abusive monopoly on property rights and enforcement of contracts.

After researching this issue, I have noticed that there are several different flavors of anarchism. The flavor I like is called agorism. In agorism, individual property rights are respected, and individuals have a right to form contracts. Agorists recognize that the problem is the government's abusive monopoly.

There is one point that is confused with "Property is theft." This is "almost all property is not legitimately owned". Many American farmers had their farms stolen from them during the Great Depression; they could not repay their mortgages when the Federal Reserve jacked up interest rates and crashed the money supply. This confiscated land was mostly sold to large corporate farms. Almost all property and wealth, in the present, is stolen property. However, you have to start somewhere. The agorist says that, after the government collapses, the current occupants of the land become the legitimate owners. On an industrial farm, it would become owned by the people who work there. A factory would become owned by its workers. The telecommunications equipment would become owned by the people who repair it.

For example, suppose someone borrows from a bank via the Federal Reserve to buy an apartment building. They have received a massive government interest rate subsidy. Is their claim to own the apartment building legitimate? Whose ownership claim is more legitimate, the person who received a massive government subsidy, or the people currently living there?

Most current property ownership claims are not legitimate. However, that does not mean that private property itself is a bad invention. When the government collapses, all claims of property ownership will need to be sorted out.

Nobody in the USA owns any property at all. It is all owned by the government, because property taxes (i.e. rent) must be paid or your land will be stolen.

In a truly free market, you might be reluctant to buy from a complete stranger. When you go into a store to buy something, there is some assurance that the store will still be there in the future, in case there is a problem with your product. In a truly free market, there will be buyer protection associations, that will highlight who are the trustworthy sellers. In fact, after the government collapses, you will have *MORE* protections against faulty products than in the present. For example, in the current economic system, this woman bought shoes that injured her, and she was left with no recourse (warning: that link is very offensive).

For example, suppose someone bought a lead-painted toy from China. The US-based company selling it denies responsibility. What valid claim would you have under the current system? The current system fails to protect buyers. Consider another example. The FDA is a "captured regulator". The FDA represents the interests of drug companies more so than the interests of the average person. If a drug turns out to be harmful, the drug companies say "the drug must be safe because the FDA approved it". Under the current system, individual states are not allowed to place restrictions on drugs beyond the FDA's. Individual states are not allowed to process lawsuits for damages due to harmful drugs, because that is interpreted as usurping the FDA's power.

I found an interesting link on a stable anarchist society in Iceland. It fell apart when they were invaded and forcibly converted to Christianity. Once taxes to the church were compulsory, that eliminated all the free market competition that kept the system stable. The Archive of Libertarian Nation has many interesting articles.

In Voting Libertarian is Pointless, the same Anonymous reader says:

I agree all forms of tax are theft. However how would you defend this claim, if 99% vote for it? "Democracies" are programed to accept 'majority vote' which gives 'power' to representatives of the people.

btw I have been reading Herbert Spencer The Man versus The State and am pleasantly surprised by his ideas. I was led to believe he was a crusty Social Darwinist and Malthusian before I started to read this book. I think he makes some great arguments against The State and majority rule.

You do not have the right to steal from me. By voting, you cannot authorize someone else to steal from me. Even if 99% or 99.9% of the population votes for a compulsory tax, that does not make it valid.

Of course, if 99.9% of the people were conspiring against you, it would be very hard to defend yourself. In practice, in the current system, a handful of people are stealing from everyone else. They cover up the theft through layers of bureaucracy. Heavy propaganda and defective education keeps everyone complacent.

Ideally, it would be nice to find a group of people willing to mutually defend themselves against taxation. It could be a group of people living together self-sufficiently, with the ability to use force to defend themselves from invasion. However, that is impractical at this time, because the red market's resources are too great. A more attractive method is for a group of people to trade in secret. They trade with each other, using a fair monetary system, and don't report their transactions to the government for taxation, regulation, and confiscation.

Nowadays, I tend to only read books that are available for free online.

On the Ron Paul Forum, someone asked:

What is the free market perspective on public television and libraries?

In a free market, there would be private libraries. You would pay a membership fee. For example, it doesn't really pay to keep a book after you've finished reading it. If you belonged to a private library, you could buy a book and then sell it to the library when you're finished with it.

In the present, there are some private libraries that cater to specialized interests. However, the existence of public libraries minimizes the demand for private libraries.

If you take the extreme viewpoint that intellectual property has no legitimacy at all, private electronic libraries could make many books widely available cheaply.

Public television, with funding paid by the government, is not "truly free". Government funding comes with censorship and restrictions. A truly free broadcasting model would be pay-per-view broadcasts over the Internet, sort of like YouTube.

The problem is that all broadcast television has a government-endorsed monopoly.

In Slave Rally September 15, a clueless anonymous poster says:

So this blog entry is not a waste of your time?

I'm trying to prevent other people from wasting their time.

The only solution that works is the "agorist revolution" solution. You should develop your own private fair monetary system. You should do work and not report it to the government for taxation, confiscation, and regulation. That's the only solution that hurts the bad guys.

It's your patriotic duty to avoid paying taxes as much as possible. It's your patriotic duty to use a fair monetary system as much as possible. You should refuse to support an illegitimate government.

In 2006, the Democrats were elected to Congress with the expectation they would stop the Iraq war. They didn't do that.

Voting is a waste of time. Political activism and protests is a waste of time. A protest is worse than a waste of time, because it makes you feel like you're accomplishing something when you're really accomplishing nothing.

The Iraq war has been a massive loot and pillage operation. Politically-connected private military contractors have made a fortune. I don't see how someone could pay income taxes and use Federal Reserve Points to support such a war.

In case you've forgotten, real money is gold or silver or barter credits.

The people who think they control the government aren't interested in the average person. They're only interested in lining their pockets. You have to accept that the current economic and political system isn't working, and it's time to try something else.

When you hold a political protest or rally, you're playing by the rules of the current defective political system. The correct answer is that the current political system has no legitimacy or usefulness.

Does anyone out there know if the September 15 Slave Rally received any mainstream media coverage?

In Ron Paul Doublecross Prediction, an anonymous poster says:

revolutions never work even if you are right. They usually cause chaos, terror and murder.

It is possible to have a nonviolent revolution. For example, the fall of the Soviet Union was a nonviolent revolt. The USA is also a communist nation, so it's possible that its collapse could also be nonviolent.

Most revolts are organized by a group of people who want themselves to be the new red market. In previous revolts, people didn't want to completely eliminate government. They want themselves to be declared the new government.

Also, I'm advocating for a nonviolent economic revolt. People should start ignoring the government as much as possible. Once the grey market economy becomes large enough, the government would just collapse under its own incompetence. There might be some violence from the former red market workers, when they see they are losing their monopoly. In such a case, it would be acceptable to use violence to defend yourself. However, I suspect that most government policemen will walk off their job once it's obvious they aren't going to get paid.

A nonviolent economic revolt is a possibility. That's the only type of resistance that has a legitimate chance of succeeding. Once you've realized the fundamental structural flaws in the current economic and political system, you'll see that's the only course of action worth pursuing.

The Laffer Curve - High Taxes and Crushing Regulations are Great!

I have thought about this issue from an agorist point of view. An agorist wants tax rates to be as high as possible! An agorist wants government regulations to be as crushing and burdensome as possible! That's kind of perverse, isn't it?

High tax rates and high regulations are an incentive for agorist grey market activity. As tax rates increase, there's a greater incentive for working off the books. As regulations increase, there's a greater incentive for ignoring them. Regulations and taxes are effectively the same. Both waste resources.

After a certain point, the government's enforcement power is INVERSELY proportional to the taxation rate and level of regulation. This is the famous "Laffer Curve".

The "Laffer Curve" says the red market maximizes its power and influence at a certain taxation rate. After a certain point, increasing taxes doesn't increase government power. After that point, people start working less or start working off the books. Below a certain point, the government isn't squeezing as much out of the workforce slaves as it can.

However, "Laffer Curve" economists only include income taxes. They don't include the inflation tax. They don't include the regulation tax.

At one extreme, a zero taxation rate, the government has no power. People are free. Of course, the red market agents would never allow this to happen.

The red market agents need to have at least a certain amount of taxation. If the taxation level falls below a certain point, people will have enough spare time and resources to figure out what is happening and revolt!

What "Laffer Curve" economists don't mention is that the shape of the Laffer Curve is not constant over time. As the economy becomes more efficient, red market agents can confiscate a greater percentage of wealth. In fact, the red market MUST increase the taxation rate as the economy becomes more efficient. Otherwise, people would have enough spare resources to figure out what's going on and revolt.

However, the government's enforcement power does not increase as it raises taxes. It decreases. The incentives for grey market activity become too great.

Perversely, an agorist LIKES living in an area with high income taxes and government regulations. That means there's more profit to be had!

Osama bin Emmanuel Goldstein

A new "Osama bin Laden tape" was released recently. Government experts have certified it as being authentic. Amateurs on the Internet say it is a poor quality fake. They say that whoever made the fake Osama bin Laden tape didn't even bother making a high-quality forgery.

The people who think they control the government aren't really interested in capturing or killing Osama bin Laden. After all, if they acknowledge he was killed, it would be harder to get people excited about the war on terrorism.

The point of the war on terrorism is not that it will end eventually. The war on terror is an excuse to increase the government's power and surveillance capabilities. The war on terrorism will last as long as the US government continues to exist. The last thing the Supreme Leader of Humanity wants is the war on terrorism to end.

Osama bin Laden is exactly like the Emmanuel Goldstein character in 1984. The point is not to kill or capture him. The point is to have a powerful enemy who can never be defeated.

Ron Paul Doublecross Prediction

I have a very weird conjecture. The Supreme Leader of Humanity is intentionally manipulating world economic and political leaders to make the worst possible decisions. The Supreme Leader of Humanity has decided that government was a bad invention, and he's out to destroy them all simultaneously. He has decided that an agorist revolution is the only sensible result.

Ron Paul's Presidential campaign is an excellent opportunity for The Supreme Leader of Humanity. My prediction is that he will arrange for Ron Paul to be cheated in the most annoying way possible. Ron Paul will win 35-40% of the delegates in the primaries. He will have a plurality of the delegates (plurality means more than anyone else). He won't have the majority he needs to guarantee nomination. The other top two candidates will strike a deal and Ron Paul will be excluded.

This strategy will alienate a huge number of people. They will completely lose all confidence in the government and the voting system. They will be willing participants in the coming agorist revolution. I think that Ron Paul supporters are overall smarter than the average person. When they are completely alienated by the "democratic" process, many will be willing participants in an agorist revolution.

This prediction is only a hunch. I'm not 100% sure. If it turns out to be wrong, don't use The Strawman Fallacy to discredit the rest of what I write about.

Ron Paul's supporters say that he's the last hope for the American Republic. When he loses, does that mean we can give up on the American Republic and start developing the replacement system?

Slave Rally September 15

On September 15, 2007, there are plans for a big protest in Washington D.C., protesting the Iraq war.

Of course, these people are wasting their time. The President and Congress, quite frankly, don't care what the average person thinks. Voting is pointless. Political activism is pointless.

The protesters are merely slaves petitioning their masters to be less cruel.

The President and the Republicans want to continue the war so their backers can continue to profit from it. The Democrats want to continue the war so they can make an issue out of it in the 2008 election.

There won't be progress until people realize that the key problem is the structural flaws in the economic and political system. An unfair monetary system enslaves everyone under a crushing debt burden and subsidizes large corporations. A corrupt taxation system allows the President to confiscate 40-50% of the wealth of the country, and waste it on no-bid contracts for his backers and fighting a pointless war. It isn't possible to achieve meaningful reforms by voting or protesting.

A protest makes people think that they're doing something, when in fact they are wasting their time.

The only solution that really hurts the bad guys is setting up your own private monetary system. You should trade in private without reporting it to the government for taxation, confiscation, and regulation.

Agorist Philosophy Overview

I've been reading a bit about the philosophy of agorism, and it seems attractive to me.

The philosophy can be summarized in one sentence: "I want to do useful work, get paid, and not have to report it for taxation, confiscation, and regulation."

Let's start with a specific example. Suppose you don't like the US government's policy of aggressive wars in Iraq and other countries. You can vote, but voting is ineffective due to various corruptions in the system. The income tax means that the government confiscates 50%-95% or more of everything I produce. Productive work supports the government, even if I disapprove of its activities. I am unable to do any useful economic activity without supporting things I find objectionable.

The government's policy is completely ridiculous. Citizens may not perform work without reporting it for taxation, confiscation, and regulation. I object to that requirement.

The fundamental goal of an agorist revolution is the creation of wealth that the red market can't confiscate. This is the only type of revolution that has a legitimate chance of succeeding, because the participants would be profiting and undermining the government at the same time. The red market derives its power by leeching wealth. Creating unconfiscatable wealth undermines the red market's power.

Currently, the only type of grey market work available is low-paid unskilled labor. The agorist wants to create a grey market for highly-skilled, high-paid labor.

The agorist says that all governments are inherently illegitimate. A government is merely a group of people conspiring to take away my property and my rights. Government employees benefit handsomely from this arrangement, because the salaries and pensions they receive are higher than they would get in the private sector. The people who control large corporations benefit from this arrangement, because their market position is frequently endorsed by the government and its regulations. Wealthy campaign donors love the government-granted perks they get. The Federal Reserve's policy of inflation benefits the financial industry at the expense of everyone else. Government is merely a group of people conspiring to confiscate the wealth of the productive part of society.

The agorist says that all the functions of government could be more effectively performed by the free market. You can have a private justice system. You can have a private police force. Everyone knows that government is up for sale, manipulated by the wealthy. Why not do away with the pretense completely? Let's privatize everything.

Why should the government have a monopoly on violence and justice?

For example, instead of paying a 50% income tax, maybe I can pay 2%, or even a fixed fee, to a private police force who will insure my property is protected. The police force would utilize a private justice system, to make sure that they don't use force needlessly. If two people have a conflict and are subscribing to different police forces, then the incentive is for the businesses to resolve the dispute peacefully rather than violently. If a private police force was misbehaving, then it would be perfectly acceptable for people to start seeking alternate vendors. Some people might pay for protection by several police forces simultaneously, to prevent monopolies from forming.

Suppose there's no intrinsic legitimacy given to the government. It's perfectly legitimate to use force to defend yourself, if someone attempts to confiscate your property. Imagine what would happen if tax collectors were met with armed resistance from everyone? What would happen if everyone ceased voluntary compliance with the taxation system?

Right now, the vast majority of people are compliant with the taxation system. That means that red market workers can afford to expend vast resources tracking down violators. It needs to make sure that violators are caught so that the penalty for tax avoidance makes the risk unattractive. However, with taxation rates of 50%-95% or more, tax avoidance starts to be attractive, if it can be done with relatively low risk. I'm not just counting direct noticeable taxes. There are hidden taxes and regulations, which also cost money.

What's the real risk of getting caught? It's hard to say. You only hear about the people who got caught. The people who get away with it don't come forward and admit it, do they? There's no source of reliable statistics, so you can't quantify the risk.

How would you make the transition to an agorist economy? There is a problem, because people aren't going to want to give up their government-granted perks. They are going to resist change as much as they can. People are reluctant to avoid paying taxes and following government rules. However, if there's a profit to be made, people might be convinced.

The key is to develop a system that allows people to perform productive economic activity without reporting it for taxation and confiscation. The Internet is a useful tool for this, because it would allow people to share information efficiently. It wouldn't be too hard to write software that would facilitate an agorist economy.

The standard financial system is designed to frustrate attempts to perform economic activity without reporting it for confiscation. Transactions larger than $10,000 must be reported to the government. Repeated small transactions are also reportable. Besides, who wants to trade with worthless paper money? An alternate financial system would need to be developed. This way, transactions can be performed without reporting them to the government. People could still settle transactions with paper money or silver or gold, if they really wanted to. I think the Social Credit Monetary System is the best solution.

Whatever system is developed would need to be as decentralized as possible. As much as possible, information should NOT be stored on a centralized server. A centralized server represents an attack point. As much as possible, communications should be encrypted.

Actually, some information needs to be public. A database listing who trusted whom would need to be public and shared to be useful. On the other hand, maybe a trust database should be private, because it would represent a list of people for red market agents to harass. All transaction records should be private. Ideally, transaction records should be destroyed when completed, so red market agents can't confiscate them.

There would be an important check that ensures people follow the rules. Just like in the BitTorrent economy, any user who misbehaves would be banned and denied a valuable resource. New users would be admitted only if another user vouched for their trustworthiness. The distributed nature would make it hard to shut it down, even if spies did infiltrate it.

Suppose there was an effective system for facilitating productive work without reporting it for taxation. With such high confiscatory taxation rates, there would be a huge incentive for people to work under such a system. The goal would be to avoid government detection as much as possible. As more productive people started working in this grey market economy, the power of government would decrease.

If the system was sufficiently distributed, there would be low risk even if you got caught. Red market agents might find out about some of your transactions, but not all of them. You could pay back taxes and fines on some of the transactions, and still come out ahead overall.

An agorist grey-market economy would also benefit because it could avoid compliance with all government regulations. It would not need to spend productive effort on regulation compliance. Its only wasted effort would be that spent avoiding detection by red market enforcers.

Ideally, an agorist economy could offer lower prices and higher wages, compared to the white market or pink market. The ability to avoid taxation and regulation should cut expenses by 50% to 95% or more.

Some pink market practitioners have their salaries artificially raised by the red market. For example, doctors need to waste a lot of money on education and spend years training. The supply of doctors is restricted by the red market. A license is required to practice medicine. A grey market doctor would not need the licensing requirement. He would only need to spend a year or two learning what is really needed to help his patients. An agorist doctor would not earn as much as a pink market doctor, but he would save the hassle of years of medical school and a residency. An agorist doctor would not have to deal with HMOs, Medicare, and insurance companies. The free market would help people decide which doctors are good and which are no good; people will share information about their experiences. Currently, the supply of doctors is artificially restricted, so there's no mechanism for incompetent doctors to be removed from the market. The agorist doctor won't get busted for "practicing medicine without a license" if his customers don't turn him in to the red market. Besides, patients can always go to a pink market hospital if they have a problem their agorist doctor can't handle. Eventually, the agorist hospitals would be better than the pink market hospitals.

Switching to a grey market agorist economy might be necessary for survival. A hyperinflationary crash of the dollar could happen at any time. A substantial amount of untaxed economic activity would facilitate such a collapse.

It probably is not possible for a person to satisfy all their needs in the grey market. However, the larger percentage of their economic activity that they can hide, the more they will benefit. If someone operated both a white-market business and a grey-market business, that would facilitate concealing their grey-market activities. On the other hand, you might be better off not having any official business at all. The IRS frequently cracks down on small business owners; registering yourself as a business owner might just be making yourself a target.

The red market derives its power solely by leeching off the productive members of society. Without them to push around, its power would rapidly collapse.

An agorist revolution has a legitimate chance of succeeding. The agorist market participants would be profiting from their activity. They would be undermining the government and making a profit at the same time. They would profit more than white market participants, because they would be unencumbered by taxes, inflation, and regulations. In that sense, once an agorist movement gets started, it would be self-sustaining. With a leaderless organization structure, it could not be easily shut down by infiltration or force. The agorist needs tools for effective operation, plus a certain number of participants.

An agorist revolution would probably be a peaceful one. Agorist market participants can hide their activity. They would appear to be normal, productive, nonviolent citizens. Agorist market participants would tend to resolve their differences peacefully, both to avoid the attention of red market enforcers, and because non-initiation of violence is part of the philosophy. By the time the agorist economy is large enough to be noticed by red market enforcers, it would have viable systems for competing and replacing government institutions. The agorist market would step in smoothly as the government loses power. The violence would come from red market participants, trying to crack down to preserve their position. However, a large number of red market workers might simultaneously be employed by agorist protection agencies. Typically, corporations infiltrate government by subverting Congress and the President. An agorist movement would infiltrate government by subverting the low-level line workers.

An agorist revolution, once started, would be self-sustaining. The participants would be profiting from their actions.

A lot of websites I read are philosophizing and speculating. I am ready to start writing tools and start using them. I would like to be a participant in an agorist economy, if only I knew other people to trade with! My primary skill is writing software. That's the skill I'd be offering in trade. Initially, I'll just write the code I think is needed and release it into the public domain.

Summarizing, I want to do productive work, get paid for it, and not have to report it for taxation and confiscation.

Voting Libertarian is Pointless

I found an interesting article on why Libertarians are fools, referenced as a link this article in Wally Conger's blog. Essentially, he's repeating my arguments about The Voting Scam. For someone to be a libertarian and seek elected office is a contradiction, because a true libertarian thinks that all forms of government are evil.

As I said elsewhere, government is merely a group of people conspiring to confiscate my property. Until you come to the conclusion that government is a bunch of criminals, you aren't thinking properly.

That article makes another point I had not mentioned before. I do not have the right to steal from you. Therefore, via voting, I cannot empower someone else to steal from you via taxes.

No amount of voting can give legitimacy to the income tax, even if 99% of the voters approved of it. The income tax is theft, and to call the income tax as anything other than theft is dishonest.

The 9/11 Truth Movement

I was planning a post on this topic at some point. Since this is the 6th anniversary, it's appropriate for today.

I heard some people are now calling themselves "9/11 Skeptics" rather than "9/11 Truthers". Basically, it's a matter of degree. Someone who's a member of "9/11 Truth Movement" explicitly accuses the government of covering up the details of the attack. A "9/11 Skeptic" says they doubt the official story, aren't sure what actually happened, and doubt they ever will discover the full details.

Many people say that there are obvious contradictions in the official story of the attack. One thing is certain. The World Trade Center attack has been used as an excuse for a vast increase in red market power. Red market agents claim the right to intercept telephone and electronic transmissions. The red market's power to freeze bank accounts has increased. Red market agents claim the right to hold people indefinitely, without trial. The red market has greatly increased its ability to spy on Americans. For example, libraries can be forced to turn over records of what books people have checked out.

Many of these schemes were proposed long before the World Trade Center attacks. Privacy advocates were able to prevent them. In that sense, the terrorist attack was too convenient. It seems like a contrived excuse to take away people's rights and privacy.

Once government claims power, it never relinquishes it voluntarily. This invasion of privacy will last as long as the government survives.

The 9/11 truth movement has several theories.

First, there is the idea that a large office building would not collapse solely from an airplane crash. The buildings were specifically designed to withstand such an accident. Some people say that airline fuel does not burn hot enough to melt steel. They say the collapse of the buildings resembled a controlled demolition, rather than a collapse. This could be experimentally verified by building a model of the building and simulating a fire.

Second, there is the idea that government response to the hijackings were intentionally slow. In other instances, airplanes that deviated from their flight plan were intercepted by fighter jets quickly. On September 11, 2001, that did not happen. Some people say that the US air defense was intentionally ordered to stand down, or that communications were delayed on purpose.

Third, there is the idea that certain members of US spy agencies had predicted such an attack. Their advice was deliberately ignored.

Fourth, there is the idea that some US spy agencies were secretly involved in the attacks. Some people say that the CIA was developed to allow the President to declare war without the consent of Congress. The US interferes in the affairs of other countries. Some people become angry at the US. They strike back with terrorist attacks. These attacks are then used as justification to start a war.

Fifth, there is the idea that the attacks were a false flag operation. Someone else organized the attacks, and blamed al Qaeda. Some people say that it is really difficult for an amateur pilot to precisely fly an airplane into an office building. Some people say that a homing device and explosives were planted on the floor where the airplanes crashed. The homing device could have been planted and used without the knowledge of the hijackers.

Sixth, why were the bin Laden family and other Saudi diplomats allowed to leave the country immediately after the attacks? At a minimum, they should have been detained and questioned.

Finally, there is the idea that I find most interesting. Who financed al Qaeda? Remember that Osama bin Laden was a former US ally. He had received training from the US government. His tactics were part of his training for fighting the Soviet Union. The theory is that the international banking cartel secretly funded and trained al Qaeda. It was done through several intermediary banks, so it is untraceable. The attacks would be used as justification for pointless wars. The attacks would be used as justification to take away people's rights and spy on them more. The international banking cartel has been funding both sides in all major wars for hundreds of years.

In other words, the members of al Qaeda and the average US citizen actually have a common enemy. The international banking cartel is the true enemy. The international banking cartel would much rather have al Qaeda members and the US citizens focusing their efforts fighting each other, rather than them.

It is probably impossible to tell exactly what happened. Maybe it was a cleverly organized attack combined with US government incompetence. Maybe it was secretly organized by elements of the US government or elements of the international banking cartel. It's hard to tell. In either case, the encroachment of people's freedoms and privacy is wrong. Unfortunately, power is never voluntarily relinquished once it is claimed.

Reader Mail #4b - Who Needs the Government?

As I predicted, my post on "Ron Paul Forums and Paid Disinformation Agents" has been quite popular.

When someone finds my blog via Google search, Google Analytics tells me what keywords they searched for. I'm still surprised by Google search results. My blog is finally the #1 result when you search for "Compound Interest Paradox". Quite a few people are finding my blog via Google and the page Taxes on Bonds' Home Run Baseball, but according to Google Analytics, they don't stick around. Searching for "Edward Flaherty" doesn't lead you to my blog at all, and if you search for "Edward Flaherty is full of crap", my blog is at the bottom of the first results page. If you search for "Federal Reserve sucks", I'm on the second results page, which has me disappointed with my PageRank. I searched for "Discounted Cashflow Paradox" and "St. Petersburg Paradox" and didn't find my blog in the first few results pages.

Someone searched for "Vanguard brokerage sucks", and they actually stayed on my blog and read a bunch of pages; the irony is that I actually think Vanguard is a decent broker! Vanguard's commissions are high, but they give a great credit interest rate on cash and their customer service is excellent. My investment strategy is long-term-buy-and-hold, so I don't mind the commission charges that much. For "Vanguard brokerage sucks", I'm the first result on the second page; maybe this post will boost that!

I got a bunch of referrals from a "zionistwatch" blog. It was a user comment and not the main article, in reference to The Communist Manifesto's Successful Implementation in the USA. I'm getting a bunch of visits from boards.askmen.com, but the I can't find the specific post that's referring people! I couldn't find it via the search function, and Google Analytics just shows it as "viewtopic.php".

I notice that other bloggers provide keyword tags for their post. I haven't been doing that. Is that worth anything?

When I say "Who needs a government at all?", people tend to very strongly disagree with me. It's amazing how incredibly brainwashed everyone is. They think they can achieve reforms by voting, but voting is a waste of time. They think political activism might help. That's just slaves petitioning their masters to be less cruel.

When I say "The original US Constitution is not a valid starting point for a system of government.", people tend to strongly disagree and get angry. The original US Constitution was a flawed system, because it led to the current situation where everyone is enslaved via the Federal Reserve and income taxes.

There isn't going to be any meaningful reform and improvement until enough people figure out that a monopolistic government is not needed at all.

I'm pretty convinced that it's possible to construct a stable society without a monopolistic government. However, the only way to be sure is to perform an experiment. Is anyone interested in experimenting?

In Reader Mail #4a, an anonymous reader says:

I know we are enslaved.

If you know that, then what are you doing about it?

However if the system was to collapse there would be chaos and social breakdown.

You were off to such a good start. Now you're thinking like a brainwashed dumbass.

In the past, when governments have collapsed, there has been chaos and social breakdown. In the past, revolutions were started by people who wanted to declare themselves to be the new government. There was a period of chaos as two groups claimed to be the government in the same location.

For example, the situation in Iraq is chaos and social breakdown. The problem is not that Iraq has no government. The problem in Iraq is that there are multiple groups of people who want to control the new government. The problem in Iraq is not too few governments; it's too many governments! Multiple groups are competing with the goal of having a monopoly on violence and justice within Iraq. None of the competing groups have a goal of "nobody should have a monopoly of violence".

However, what happens when there's a successful revolution by people who believe there should be no government at all? As their revolt progresses, they would develop replacement systems for services formerly provided by the government. The new government would look like the organizational structure of the group that successfully revolted.

That's the goal of an "agorist revolution". People can show a profit and start a new economic system at the same time! You undermine the government, and are profiting from your activity. Under a fair economic system, you can be selfish and help others at the same time. People decry laissez-faire capitalism, but there has never been a truly free market with no government intervention at all.

Unfortunately, that is one of the false axioms you have been brainwashed with. "People need a government with a monopoly of violence and justice in order to survive. Without the government, society will completely collapse."

I have been studying this subject for many years (after experiencing life and just knowing intuitively that some people are robbers and present themselves as respectable), and am firmly on your side.

Until you come to the conclusion that government is evil and needs to be completely eliminated, I don't really see how you could claim to be on my side.

Just as a side note, you know that Catholicism prohibited Usury right?

Yes, I knew that. That's the reason many of the first bankers were jewish. The rules were relaxed once it was remembered how effective banking is at enslaving people. I even have some small articles on that subject, Croesus the Banker and The Book of the Banker.

Also Islam still prohibits it though Muslims have been largely taken over by the bankers and their agents as well.

Some European converts to Islam are claiming that Islam is government without state in its pure form, and Usury, taxation, fractional reserve banking and fiat currencies are Un-Islamic. However it is inevitable that corruption will set in, in any situation. A group will form either internally or externally in a different region of the world which will create a oligopoly of power and state and they will impose their will on a Anarchic system. I feel drawn to the works of Kevin Carson and you. my experience of work at a university in the UK (Iam just a lowly IT technician trapped in a inneficient organization which makes life mundane) is well described by Carson.

I would not equate Islam and anarchy. The above paragraph seems like incoherent nonsense, except for the part where you say you like my blog and Kevin Carson's blog.

There are "Islamic banking" techniques to over come the ban. One example is "repurchase agreements". Instead of loaning you $1M at 5% interest for a year, I agree to buy your property from you for $1M and sell it back to you for $1.05M a year later. Another example is partial sales. Instead of a 30 year mortgage, I agree to sell you a house at a rate of 1/30 per year. Unfortunately, religious people who agree to such terms wind up paying even more than they would under traditional financing methods. Perversely, "Islamic banking" is used to justify an even *greater* usury charge, because very few vendors provide the service.

I read Kevin Carson and I like his blog. I have a link to his blog in my "Favorite Links" section. When I see an interesting topic on Kevin Carson's blog, I sometimes repost it here in simpler form.

I think that is possible to have government collapse and not be replaced by a new monopolistic government. It depends on the practices and values of the people who overthrow the government. For example, in the USA, after the revolutionary war and defeating Great Britian, the leaders in the colonies formed a new government. Their values were "We don't want to pay taxes to a foreign government; we want people to pay taxes to a government that we control." They didn't want to abolish government; they wanted to replace the old government with a government they controlled.

The only way to be sure is to perform an experiment. The practices of the people organizing the revolt would have to emphasize their mistrust of government and dictatorship-organizations. The current government cannot be defeated by an organization that uses a dictatorship structure. A revolt that uses a dictatorship structure will be shut down via force or infiltration. However, leaderless resistance has a chance of succeeding. This guarantees that the new economic system will not be dominated by dictatorships like the current system.

I consider myself to be an order of magnitude ahead of Kevin Carson. He doesn't seem to fully understand the corrupt nature of the monetary system and taxation system as well as I do. Plus, Kevin Carson seems to be mostly interested in writing. I'm looking for people to trade with, to get an alternate economic system started.

On The Discounted Cashflow Paradox, an anonymous reader says:

Just wanted to let you know that you have a math error in the page about the cashflow paradox...

"This is the following game: You flip a fair coin until a tails shows up, at which point the game ends. For each head, you receive a payment of $1*2^n, where n is the number of consecutive heads already seen. For an outcome of T (p=1/2), you receive $0."

2^0 = 1 -- any number to the zero power is always 1

Unless by $0 you mean the profit made from the game under the assumption that it cost the player $1 to play.

First, this is the "St. Petersburg Math Paradox", which is actually separate from the "St. Petersburg Financial Paradox", which is what I call "The Discounted Cashflow Paradox". I've heard both paradoxes referred by the same name as if they're related, even though they're completely different.

Going back to the language in that post, the game ends as soon as you receive a T.

For the following sequences:

• T, payoff is $0
• HT, payoff is $1
• HHT, payoff is $1 + $2 = $3
• HHHT, payoff is $1 + $2 + $4 = $7
• ... and so on

You are suggesting that the payoff for "T" should be $1. I don't think that's what I wrote.

I said that the player receives a payoff for each head, and the game ends with no more payments when the player gets a tail. I think that what I wrote was logically consistent.

Of course, the payout in the case of an immediate tail doesn't really matter much. It's the small probability of a large payoff that's the interesting part.

There is a separate question: "What is the value of this game?" What is the amount you would be willing to pay if someone offered you this game? The answer depends on the bankroll of the person offering you the game. For example, if the person offering the game had a bankroll of $255, then this game would last at most 8 consecutive heads. Each round is worth $0.5, so the game would be worth $4 in that case.

If you were playing this game for real, at some point your opponent would run out of money or default on purpose.

The main point of the article is the Discounted Cashflow Financial Paradox. I only mentioned the St. Petersburg Math Paradox because other sources falsely say they are equivalent.

The St. Petersburg Math Paradox has a simple solution in the real world. Any actual opponent has a finite bankroll.

The Discounted Cashflow Paradox also has a simple solution in the real world. The money supply is diluted at a faster rate than you earn as interest, due to the massive subsidy the Federal Reserve pays to the financial industry. Real interest rates are negative. If you hold onto your dollars for long enough, invested in "safe" government bonds, they will eventually be worthless. There's a division by zero error when you run a Discounted Cashflow simulation for a sufficiently long time period.

Further, I believe the US government will collapse soon, due to an agorist-style revolution. In that case, the stock market will be worthless after the US government collapses. That makes the reality even more ridiculous. When pricing a stock, you aren't just using worthless money; you're also using worthless stock. Following that reasoning, any stock price at all can be justified.