• In one clear, crisp concise statement ‘Romney is free market but uses economic incentives to encourage productivity and keep a safety net for the disenfranchised in our society’. If you like that view of political Economy than Romney is your man. Please read on for more interesting elaboration.

Romney does support economic common sense, and not give aways to the fat cats on Wall Street, contrary to what his opponents try to represent.

Mitt Romney’s economic plan is free market but not to the end. The purpose of this post is to look in a summary form at the pros and cons of Romney’s economic vision for the USA. Since I was a kid, I remember the neighbor fathers talk about we need a businessman to be President of the United States. Well at this juncture, it looks like it is going to happen. So it is important to get a clear understanding of his economic ideas, right from his book, not the media or political ads.

I might seem critical of Romney,  but on a whole, I think he is a good man and his economic ideas would help the USA more than Obama’s. Romney is generally free market and has positioned himself as someone who can appeal to Democrats economically because he is not about ripping apart safety nets but rather encouraging jobs in the free market and yet retaining a safety net for the poor and displaced.

Endeavor t0 provide the dignity of work in every safety-net program where that is possible, evn if it costs the government more money to do so.

Mitt Romney’s economic – political ideas

Romney like Obama sincerely wants to help the lower and middle class American.  I have never doubted their sincerity, just their understanding of markets. I will use Mitt Romney’s book No Apology as a guide to understanding Mitt Romney’s view of economics and quote from it. It is not economic theory but more the ideas of a politician who understand economics to some extend.

Productivity

An economy  is a function of the number of people in the workforce and the productivity of that workforce.

Romney’s view is focus on productivity as the central idea for generating wealth in the USA. This comes from his business background. That is if you have ever worked in an office you know a lot is about increasing efficiency and productivity. It is about showing efficiency gains on a micro unit level that gets you as a middle manager your bonus.

For example, lets imagine a micro nation, has one hundred people raising the food, while 100 built houses. Then one day, an innovation like the plow comes a long. Wow this is a breakthrough and now this micro nation only needs 50 people to raise food. Would fifty people be unemployed?  Romney’s answer is not really. They would use their talents and brainpower in other ways to increase the well-being of society instead of manual labor intensive processes. Some of these displaced workers will be better off and some will be worse off, but no one would argue for the return to agriculture before the plow. Life for all would be harder.  Productivity gains are almost synonymous with economic progress.

Romney is correct that productivity is an important component of economic growth.

Two books discuss similar issues if you wan to examine this in more detail and different points of view are:

• The Power of Productivity: Wealth, Poverty, and the Threat to Global Stability – William W. Lewis
• Cities and the Wealth of Nations by Jane Jacobs

• I think it Romney needs to make his message clearer, that economic freedom accelerates innovation, not that innovation gives us prosperity and hence economic freedom. Further, not government economic plans or recovery initiative to jump-start the economy.  The economy is not an engine that starts and stops, it is me and you taking individual action. Romney needs to champion this point even more if he understands it.

Innovation is the engine of productivity gains

In the 1980s it took ten hours to produce a ton of steel, today only one hour. This was because of innovation in the process of production. It is not that people are working harder, maybe they are, but it is more about technology and the process. It is not just some earth shattering breakthrough in science but also process improvement and work flow.

A key component of getting the economy to function better as well as the government sector is free markets so innovation can lead the growth. This includes outsourcing government functions to the private sector.

It has been my experience that almost always government is far less productive than enterprises in the private sector. That’s why private companies build roads for governments and make equipment for the military. It’s also the reason why FedEx and UPS can make a profit shipping and delving packages while the U.S. Postal service loses money, even with its inherent competitive advantages.

• We can conclude Mitt Romney is free market in the general sense. So where does he fail in his economic understanding?

1. Increasing the military – the biggest waste in the world.  This is an economic issue. We have been fighting wars since I was a kid in the 1960s and that is not going to change. Romney argues for an increase in soldiers (he says we need at least 100,000 more) in the military because the percent of GDP is not that large. I tend to disagree, I will not go in detail on this but let you do your own research. However, I personally know a lot of military and ex military guys doing nothing in the USA, nor can I see them ever integrating into the economy in a meaningful way. I think the military has a profound psychological impact on the most productive years of your life and many times hurts those young people from finding their way in a complex post industrial economy (in contrast to the post WWII economy which was easier).  Remember we are not defending US soil but playing a political chess game and using brave Americans as pawns in Middle Eastern politics. Most people know this by now. I say a smaller military for home defense not micro managing the Middle East. The impact of having a bloated military is huge. For example, did you know the cost of the wars in the Middle East exceeds the revenue collected in individual income taxes. Yep, the income tax is not where the US government gets the majority of its income. We could have eliminated the income tax instead of fighting those Middle Eastern wars with the grande army. So why does Romney want to increase military spending and overseas influence?
2. Quasi free market but not really - Supported the bail out of the auto industry with managing restructuring. This is better than Obama’s cash infusion method. I would say the auto industry could have fallen and restructured without the cost to US tax payers. Maybe I am wrong on this, but I have always said let the markets work or the cost is higher prices, less innovation and lower consumer satisfaction.  I still think cars are expensive as anything and thanks to your tax payer dollars it looks like it will stay that way. Supported the bank bailouts. Banks now sit on a huge inventory of foreclosed homes and the prices are still high in my opinion. If you want affordable housing, let the reckless banks fall and deflation correct the market, then you would see the haves loose and have nots gain because the market would work naturally. Supported the Federal reserves anti-deflation monetization. Big mistake, we should let he markets work.
3. Barack Romney or Mitt Obama – they are more similar than different, despite the political noise. Obama focuses on social programs and Romney military build up, but besides that basically the same. Ron Paul would like to eliminate the income tax and the Federal reserve and balance the budget by cutting real spending not growth like Romney’s cut the rate of increase. Now that is free market and that is different. Mitt Romney is more a bit free market and a better choice economically than Barack Obama, I guess, however, I would have to see more  understanding of money and markets to be totally impressed. I think at this point I will vote for him, maybe. Obama did the opposite of what should have been done in many cases because accident economists advised him wrong and he did not have the understanding to go against them.
4. Mitt still thinks in a corporate way, that the economy is a big machine

Having grown up in Detroit, I tend to think in automotive terms. If we imagine that the economy is an engine, then capital is its fuel.  – Romney

The economy is not an engine. It is you and I. It is not fueled just by balance sheet capital but by intellectual capital like the people who started Microsoft or Google.  They are usually innovative individuals, not large companies to start. Romney supports a decrease in corporate taxes to increase company balance sheet retained earnings for research and development and innovation. I guess, but don’t you think a lot of that will be just paid out to someone instead of allocated to R&D? It is trickle down economics.  What about eliminating the income tax so people, who are the ones who often create the best innovation in the basements (I have known many people who start companies in their garage that have done brilliant things like one of my former employers SS&C, an Investment Accounting software company, it was started by Bill Stone in his garage). So Romney is good, but thinking in terms of his experience in the corporate world. In contrast, I tend to think from an ideological standpoint of maximizes individual liberties, including economic and markets in aggregate will take off. This is Adam Smith.

Romney on minor economic issues

Romney supports a moderate minimum wage (some people argue this hurts small business not large). And Romney supports unemployment insurance as a safety net (some people say this prolongs unemployment). I have no major problems with either of these ideas because they do not have a huge economic impact. I think both have a libertarian solution but this is not the source of our massive economic problems.

What is the real source of the economic problems?

The Federal reserve creates business cycles with easy credit and excess spending with Keynesian fiscal policy. This  displaces productive people from the private sector to the sluggish,  wasteful government sector. Not just a trade-off between one sector and another. Remember the post Keynesian model C+I+G=GDP? Wrong. Spending is a not an accounting equation, but one of crowding out and opportunity cost that is usually over looked.

For example, when someone is getting your income via taxes by being employed by the military in the desert as an artilleryman, does he have a job? Yes, but what if that young fertile brain was in the private sector using his 20s to create something innovative. A major displacement of intellectual capital.

Other economic quotes by Romney

The best way forward is not to erect trade barriers but instead to facilitate innovation and productivity that will sustain our global manufacturing competitiveness.

I agree. Trade protection will make every consumer good higher priced, I will not be afford a lot. Focus on innovation.

Our Standard of living are the highest of any other major economy

Questionable but I am glad I live in the USA.

In his capacity as chairman of the Federal Reserve, Alan Greenspan made a decision to hold down interest rates for an extended period that didn’t help either. He was motivated by a desire to avoid deflation – and in that respect it worked.

Did not help? That was the  root cause not a helper in all this. And deflation, nothing wrong with it, it is the market working. To not have deflation if needed is asking for long-term slow growth and deprives the have-nots the chance to have. People point to the deflation of the great depression, but that was a symptom of a deflating bubble created by the central bank.

The fact that both parties have come to accept deficits and ever-higher levels of public debt is deeply troubling.

Agreed, Romney is much more fiscally responsible than Obama. But why not just way number one probity is a balanced budget amendment?

Increase our investment in science and basic research

Not libertarian but I like it. I was talking to a military guy at the park the other day when our kids were in the playground. He told me every new immigrant should be required to serve in the military, even in combat zones before they come to the USA. Yeah right, we would turn away brilliant minds in research and science and replace then with jarheads. We should focus on intellectual strengths not old world ideas of blood and iron like Bismark believed. We do not need more industrial factories but high-tech centers offering solutions. I think investment in science can be encouraged with government and private business, although I think the latter does a better job. US innovation is on of our saving graces, we need to make sure it stays that way.

Romney on economics and the USA

1. A Strong Economy
2. A strong Military
3. A free and Strong people

Mark Biernat on economics and the USA

1. A free economy – only way to achieve a strong economy and real stability is maximizes economic freedom like delete the Federal reserve and let the markets work. People criticize free markets, do not realize we have not tried it yet.
2. Military for defending America – To illustrate the waste, what if we spend 1/3 to 1/2 of our budget on helping childhood diseases or making our cities safe instead of being the British empire of the 19th century; we would have a safer America.
3. A free people -  You achieve this largely by a free economy, but not just.

In summary economics and the election

Here is Mitt Romney’s economic plan in detail.

Will I vote for Romney in a Obama Vs Romney election in 2012? I have to think about it, but I suppose. Maybe I will vote libertarian as Obama and Romney are pretty similar despite all the noise. The bottom line both candidates want to cut the rate of growth, not the baseline. Both support a Federal reserve and income taxes with adjustments here and there. Both support bailouts, although Romney tends to be more free market with managed bailouts. But for me they are more similar economically, than different. He is more moderate and will appeal to cross party voters, therefore, have a good chance of winning in 2012. However, Romney does have a radically better of understanding economics than Barack Obama and can appeal to both parties.

Despite my affiliation with the Republican party, I don’t think of myself as highly partisan – Mitt Romney

Romney will get the Neo-con vote anyway, as what choice do they have, they will not vote for Obama. in the 2012 presidential election. So he would be wise to tone down the strong international military stance during the election. The election will be about a battle for the middle voters, not the extreme. What are your thoughts on Mitt Romney’s economic plan.

Are you investing your money on emotion or strategy? That is the question you have to ask yourself the next time some news and rumors are circulating.

I am a gutless trader

Maybe it is because I did not have the courage, or I am not a short-term trader but a chess playing strategist. Not that I am a better person than people who do such  short-term speculation, rather based on experience, it is very hard to buy or sell stocks on a day-to-day or week to week basis. It really is not investing or the kind of investing I am good at. If you are let me know.

If you can make money off of bounces, more power to you. Further, if are one of the guys that can jump out of the market, right at the right moment based on news, you are a better investor than I. However, news is rarely black or white.

I use to set up Bloomberg and Reuters financial news feeds

I use to set up news feeds for the Portfolio managers in NYC and use to tell them, do not read the news, it will do no good.  I have never rarely sold a stock at the exact moment I should have. Instead I make a profit or reduce my loss by a percentage. I think moving averages or a system of investing is better.

Again why not trade on news and rumours, is this not investing? Hey I like to make money. I do not want to get into whether it is investing or not, but, as unless you have real information that other people do not (yet not considered insider information), making money off news is just speculation.

Because of my economics background I guess I believe the market has fairly efficient information. In the words of Stan Weinstein,  the tape tells all. You can see the information coming out on the charts before you read it on the web. Again the problem is there are a lot of guys out there living and breathing every tick of the price and trying to react in the same way.

Therefore, I have seen stocks go either way. I have seen stock rumors and news that turn out to be true and I should have bailed out, and did not. In contrast I have seem stocks news to leave the shorts in the dust.

Buy on bad news sell on good news

• What I have learned is be more systematic in investing using quantitative investing and guidance from the charts, not reactionary.
• Message boards and news feeds mean little compared to numbers.  I still read them mind you, just do not make major buy and sell decision off of them. I have been burned more by reading such things than not.

I recently upgraded my lifestyle.  I went for many years without a car, TV and still do not have a cell phone. It is not that I am a Luddite, rather, I tend to be a minimalist. I like to read books from the library, play chess and do outdoorsy things like shoot baskets with my wife and bike everywhere, and recently a little surfing. But I am not Amish.

I think it has something to do with the fact that I am sitting on the computer working all day, I write language learning software and various other online projects and trade stocks (not much money generated here recently as I moved across the world and have not had my focus in stock trading like I should).

If I am sitting using technology all day long and I really do not want to sit (I just started using the Kola hug for my back pain – another purchase)  and drive or channel surf on my flat screen TV.  Nothing wrong with it, just I think I would gain weight (more).  So I am not anti-technology, but I love to be frugal and like a little bit of an alternative lifestyle guy, as much as an unrepentant capitalist can be.

At the playground this morning with my car - something that has expanding my lifestyle exponentially.

I really have to confess I love having a car and a TV after so long without one. I question what will I get next, a boat? I think for now this is enough expansion of my home economy on the consumption side. I was at the park today and I was mentioning causally to various people little things about my car and parking and what was on TV last night. I felt normal for the first time in a long time.

We also got a bike trailer for my daughter, an upgrade from a bike seat. A couple of my two alternative reality fantasy lives when I was a kid, used to be owning a bike shop or a bookstore.

Ironically my bike trailer order arrive the same day I got a car.

Of course I could not get cable, but rather I use a digital antenna which gets about 20 stations. For me this is enough TV and I have no cable bill.

I am Lucky I live near a major metropolitan area, that is Jacksonville. I have to qualify this that about three of the stations are religious stations (Jax is a Baptist mecca) and one Latino station (I really have to improve or learn Spanish). However, the other dozen stations I could watch. I think there is still one analogue station.

Movies I use Netflix streaming and the library (I have advanced to position number 82 in the queue for the last Harry Potter movie).

Daytime TV, now I feel like my lifestyle has improved.

On the car I intend to use only now and then and with Liberty Mutual I pay 65 dollars a month insurance. Therefore, as long as I do not drive it too much my monthly fixed cost is under 1000 dollars.  Car insurance + rent + utilities+ medical insurance (We are Polish citizens and bought a cheap plan from there that we can use here)  + Netflix +  YMCA (I am typing this post from there, it is more about getting my daughter to use the discovery center).  To be honest, I think it might be a little more if I add it all up all my expenses and I think my 30 dollar electric bills will not last in the summer. Although my brother made a point that for 400 years in Florida they did not have A/C.

Food is our biggest variable costs, but my wife being from Poland cooks everything from scratch so it helps. I hope she does not become too American (both my sisters do not cook and but both my brothers do).

Anyway, I have no debt or credit and the last things we need to get is a house.  The issue here is we would like to pay mostly cash for a house (It is a European thing not a credit thing), but unless I turn up the dials on my income making machine or start trading more aggressively (with risk) this might be a pipe dream.

Most of my money now is through passive income from my websites. I need to start releasing products.

OK, So I got a TV and a car, I am guilty.  I can get off my high horse (a little) about  minimalism and try to be like many rich hippies say,’ living in the world but not attached to it’. I still do think you do not need a car, and the fact that I did not have one a good part of my life is a testament to this, but it will be nice for my wife and daughter as we are not living in a major city (St. Augustine beach).

This next year I do not intend to make too many major purchases. I have a wish list of course that includes a telescope, taking my daughter to the Space center and Disney, but now I really need to finish I have had on the back burner because of life issues came up. Then hopefully buy a house.

In the United States of America there is a Puritan ethic and a mythology of success. He who is successful is good. In Latin countries, in Catholic countries, a successful person is a sinner. – Umberto Eco

I have always said economic life is not want you earn or save but your lifestyle on a day-to-day basis. If you are in an hour and ten minute commute each way and with a stressful job, worrying you will lose your job or house, and you have stress at home, because you are always working, who needs it.  Life is what you do on a day-to-day basis. I know I could make more, and could afford more anyway, but I want to be a capitalist and entrepreneur, yet not base my lifestyle on too many material things. Kind of a Puritan work ethic type of idea, although I am Catholic.

I live on a semi-tropical island off the coast of Florida in St. Augustine. The island is called Anastasia island. It is tucked safely away in the Florida’s Northeast corner. It is an area that does not get hurricanes, nor major tropical storms. St. Augustine, the oldest city in North America has received one major storm in its history. In contrast NYC has had four.

Ocean front where I live

Therefore, you would think it would be a peaceful little island near this 450 year old town, it would be a safe bet to buy real estate on the ocean. Except for one thing. One little thing makes almost all beach real estate a deal breaker.  It is windy. Not the Wizard of Oz type wind, but just gusty.

My argument is it is not a deal breaker because of fear of home destruction or anything like that, rather it is more about lifestyle. Day-to-day lifestyle is more important than any abstract real estate valuation mind you. In theory they are should somehow correlate, but they do not. The unspoken nuisances no one talks about is wind. It makes life on the beach a bitch.

I love walking along the beach in the morning

My whole family lives on the coast

My brother and folks live in Jupiter in south Florida. They literally have beach front properties.  My family grew up not on the coast but near. They make the same comment, it is windy.

If you are considering beach front property I highly recommend you think again. The reason is the wind gets so strong that you can not enjoy your back yard.  Sure the ocean view is nice, however, that gets old fast. It would be better to be off the beach and have some protection of trees.  Then you could have lawn chairs and sit in the back. One a daily basis you want to relax in your back yard and read a book, not close yourself in some protected contract to shield from the wind.

Mr. Nautical does not recommend water front real estate

My brother who is Mr. Nautical and had a boat built from scratch based on historical designs sails up and down the eat coast and has a house on Cape cod and south Florida has said the same things. Do not buy beach front real estate. It is too windy to enjoy normal everyday life. He is looking to sell his mistake and move a bit inland. Even a 1/4 mile inland would be enough.

Better is to buy somewhere back from the water, and ride your bike to the beach.

Beach front properties and value

I have always thought beach front property is over priced disproportional for what it is worth.  Now more than ever I see  scores of empty units and homes in Florida now for good reason. They were over-valued and still are.

Beach front homes sell for over a million dollars where I live. Yet in the county not far away,  homes that have some land and reasonable size sell for 150,000 dollars. These are nice homes. People have gardens and play areas for their kids and drive to the beach. You really do not need to pay 1.5 million for a house because it is on the beach.

Some lady I know is selling her home for 1/2 million. I would personally pay 50,000 for it. It has been beaten down by the wind. I simply would not like to live there. Price is subjective. Do not simply take 15% of asking price, but ask yourself, what would you personally pay for this plot of land?

Beaches disappear

My brothers beach has disappeared. I think the Army corps of engineers will eventually rebuild it, or though some controversal funding. But just because you buy some notice water from property does not mean anything. In a few years the water might wash the beach away or be right up on your home or leave you with jagged rocks to trip over. Real estate agents love to sell property on the water but do not be sold.

Now my family has lake front property in New England. This is much more reasonable because it is not the ocean.

Just because I love the beach does not mean I have to live right on it

Traffic on the ocean and other considerations

The Entire coastline is often a tourist mecca. noisy bikers and drivers not looking where they are going driving up and down. Now I have no regrets about living on an Island but I am glad I am not right up on the ocean but a little further back were we can enjoy a little peace. We were living in Europe at the time and I did extensive research on the web for about six months for the optimal place to live. The best place is near but not on the ocean.

P&C insurance on beach front property

I worked for many years one of the larger P&C insurance companies in Boston. They charge a fortune for the VIP life of ocean front property. You have to factor in inflated insurance costs because of property and casualty home insurance. You have to factor in accelerated depreciation from the air eroding your home and things. Our bikes are new yet covered with rust because of the air. Beach properties are nothing but and expense and in this market a sinking asset.

Even if I was made out of money, which I am not I would not buy it unless I was trying to impress. I am not trying to impress. Life should be about lifestyle on a day-to-day basis and it would be a hard argument to tell me the windy stormy beach is worth the price.

When was beach front property worth it?

Here is an example. In Stonington, CT after WWII many Portuguese fishermen bought homes at cheap prices. In fact, the Portuguese in WASP blue blood New England were a bit of an odd lot. They were not accepted and people did not want to live around them. I grew up in New England and I remember this.

Then something happened. These poor fishermen got rich as the gold coast of NYC expand further out into CT and somewhere between Boston and NYC rich Yankees wanted a home by the sea. Homes bought for under 10,000 were selling for several million dollars. The opportunity cost of the land became too high to use as a fishing community. This was a specific time in this nations development. It was also a premium for a certain generation, but not as much for todays America. This type of opportunity does not exist today. If anything we are in a long-term reverse trend. Again I personally would recommend not buying beach front property, there are better values out there. There are better ideas for appreciation.

Thank you for reading such a long post on buying ocean front property, if you have any questions or comments let me know.

You could read my post on the 2012 election issues and about the Presidential election in general, but this post is more cut to the chase and non nonesense.

Will you vote for Obama or Gingrich or someone else?

What is Wrong with Barack Obama?

• He is Mr. Wall Street. He took large sums of money for campaign donations like from Goldman Sachs for example. Then when the crisis hit he used taxpayer money to help Wall Street. He is a hypocrite as he campaigned on helping the middle class. Obama needs to middle class by giving us more opportunities for us to help ourselves, by letting the markets work. Stop the culture of blame, that you perpetuate. I wrote a lot about it here: Who will win the 2012 election? and 101 reasons why Obama will not be reelected.
• Although Obama had no problem accepting the Nobel peace prize with a smile, he took the Bush-Obama doctrine of Empire building with undeclared wars to a new level. He is no different from Bush with Middle Eastern foreign policy.
• Not pro-life. I know we are all hip and cool in America and anything goes, but I can not image in a civilized nation like this we still do not protect the innocent.
• The debt exploded. Did he really have to do this to prove Keynesian economics wrong?
• Nothing special – lack of creativity.

What is good about Obama?

• Although I am a Libertarian and prefer small government, if we are going to blow cash, it might as well be on a domestic programs where the money is recycled and more or less redistributed. Many slow growth European countries do this. This is better than just firing rockets in the desert. Guns or butter which is better?

What is bad about Newt Gingrich?

• I do not like him. I think it has something to do with he is on his third or fourth wife and left his last one when she had cancer. For me that is heartless. He has spent 35 years in Washington taking millions as a ‘consultant’ which is really nothing than an insider lobbyist. I find a number of small things like this insincere about him.
• Newt Gingrich war monger Uber war monger. Endless wars and destruction.
• Is not for smaller government but for the decrease in the rate of increase. Does not cut the baseline. We need a balanced budget amendment and a decrease in the baseline.

What is good about Newt Gingrich

• Fiscally conservative by a small degree.
• Protects life. Many people are one issue voters and this is a big one.

Who to vote for in the 2012 election when we have a choice between a donkey and an elephant? I used to vote under the idea that you do not want to waste your voice and vote for an unelectable third-party candidate. But you know what, screw it. If you look at the above no-nonsense analysis is it really a wasted vote?

I am seriously thinking of voting for neither major party and voting for a candidate who I actually believe in rather than who everyone else is voting for. Anyone else have any ideas?

Looking back at history, countries from Spain in the 17th century to Germany in the 1930s, countries that spend a lot of their GDP on military and financed it with debt, dug their own graves. They lost both guns and butter. Countries that peacefully focus on their own problems like Switzerland or Sweden enjoy peace and prosperity.

• The GOP will replay the 2008  election, when John McCain said: “we will stay in Iraq 100 years if we have to” – this GOP Neocon arrogance does not inspire any warm feelings in me, I do not know about you?
• Interview on War or the economy by Ron Paul is well worth listening to on anti-war.com

It is actually quite simple, if you choose guns over butter you will have neither.

Military tends to be a wasteful special interest and the US government is not looking out for you personally

This post is about why I believe in homeland defense, not empire building.  It will  clarify the guns vs. butter argument. Why I believe patriotism is not about beating militarily drums of war, as much as defending the constitution, economic prosperity at home and encouraging free market innovation to keep our technological security edge. I am not against defense, I just think national defense is different from military expenditures, which is something inefficient, wasteful.

• Let me illustrate, my friend who is a computer contractor with the US Navy in Jacksonville, earns three times what the average American makes, does not even know how to open a zip file (sorry if you do not) and still uses Internet Explorer 7 (sorry if you do).
•  When I was attacked overseas, as an American citizen, I did not feel I got super support from the State Department.  Therefore, I am unconvinced that defense of US citizens is synonymous with large conventional armies in the Middle East or the government is watching out for you . They watch out for themselves.

I also think the 15,000 people who die in crimes in the USA are more than those who die in domestic terror attacks. Maybe it would save more US lives to amp up the local police more than hunting people on the other side of the world? If they really cared about US citizens they would care about crime in the USA.  Further, one of the GOP nominees said something to the effect, we should stamp a green card to the passport of foreigners with Masters degrees if they wanted to come to the USA, so we could continue to attract the best and the brightest.  What about just focusing on the education of US citizens than attracting foreigners, if you cut the military in half you could fill the universities of young Americans with free tution.  I think if you analysis the guns or butter argument you have to ask yourself what evidence do you have that Washington has your best interests in mind?

The term ‘military intelligence’ or innovation at least, is a contradiction in terms. Currently we do use some cutting edge technology. However, to achieve that cutting edge it is coupled with ridiculous waste. My father was the Treasurer for a defense contractor ( United Technologies) when I was growing up and I in retrospect saw how much of a special interest that was. The problem is, the economy is different now then the 1960s, and I do not think the current economy can support that type of business as usual defense contractor special interest.

 Basis of US foreign policy

Our foreign policy is based on control the whole world by looking under ever stone for a terrorist. This can not be done, as there are too many people, and we will go bankrupt trying. Better focus on our own shores. Defend the USA, not try to make the whole would the USA.

Something that everyone knows but is afraid to say is, a lot of our foreign policy is based on Israel. I am for the defense of Israel if attacked and have good feelings toward the Jewish people. Very much so in fact. I just believe that Israel has proven time and time again they can take care of themselves. And us meddling and dictating in the micromanagment of the Middle East is not in your personal interst as a US citizen. Look at Egypt. We supported the last regime for 30 years and pumped them with arms and money, and now it is civil war.

We stir up bees nests in the Middle East and choose sides when we should be minding our own bees wax. When I was in Palestine most of the people were poor and friendly and welcoming. They did not impress me as ‘the enemy’. When I was in Israel I felt they were a little more heavy-handed.

People say we must support Israel at any cost, because they are a democracy. My reply is this:

• Why? Sure we can help them if attacked but like Ronald Regan realized when he pulled out of Lebanon, Middle East Politics is an endless quagmire we do not want to be sucked into.
• The Obama-Bush doctrine of preventative Middle eastern Wars – is nonsense, it stirs up trouble and anger more than helps Americans, does it help you personally?
• Israel has a questionable human rights record. – read up on it.
• Is the USA a democracy and is our mission to spread this to the world? I think the USA is a Republic. The word Democracy is not even mentioned in our Declaration of Independence, Bill of rights or US constitution, check this. The US was based on protecting the citizens from government, foreign wars and entangling alliances, if you read the original documents you will see this. Most Americans do not understand what this constitution is about, and they would gladly surrender their rights to usurpers of the law in the name of security. I would not say our manifest destiny is to spread ‘democracy to the world’. As an American citizen I am pledged to defend the US constitution, the highest law in the land, not a Middle Eastern country who has spied on us and even involved in a questionable accident like the USS Liberty. America should stand up for Americans.
• Ukraine is a democracy and ally but do we care they just put Yulia Tymoshenko in prison for ten years in a kangaroo court and human rights are violated? We the USA have a double standard.
• Is our view of the Arab nations like our view of Native Americans 150 years ago? How would you feel if foreign soldiers were in your backyard imposing their ideas of how you should live?

I the best way to be a patriot in the USA is to focus on homeland defense and economy, not Pax America, trying to be the British Empire of the 19^th century.

If we want security, defend the constitution and promote the free market and stay out of Middle Eastern politics and let science and technology lead us into battle rather than ground forces.

When I hear the Generals complain that we are at our weakest since WWII, that pure nonsense. They are barking not at cuts in military but a deceleration of the rate of growth.

Guns vs. Butter is an economic phrases that represents is a simplification of the economic tradeoff between prosperity at home, focus on the family vs. military expansionism. It is a choice that every empire has to make. The Soviet Union choose guns and the economy collapsed.

The great free market leader Margret Thatcher said:

 The Soviets put guns over butter, but we put almost everything over guns.

Look who won the arms race and why. Economics and innovation determine long run security.

There is also a trade-off between personal liberty, freedom,economic growth, prosperity and innovation at home or guns around the world. The result and my thesis is:

 Any civilization that falls behind economically and with innovation (which comes from the free market) will fall behind in terms of security and the ability to defend its citizens, then collapses or their national security is really at risk.

• The Mises foundation of economic ideas I think would back me up on this. Why expansion of military spending is counter productive to security.

What is happening to the USA now economically? Has there been any great innovation in the last ten years?

The spokes people representing the ‘Guns’ side (Many people in the GOP) use perpetual fear to keep people believing that we need a security that is a blank check for the military, your money.

Newt Gingrich promised the American people:

 All of Us Will Be In Danger for the Rest of Our Lives

He is a Orwellian Machiavellian. The GOP will lose as the Universe will not let that happen, to have such a war monger in office.

I think it is a bit more complicated than simply dismantle Obama’s social programs and replace it with military as the GOP has suggested. I think we need a strong economy and free market innovation that will keep us one step ahead of the enemy. The militarily as it exist today is a WWII mentality of ground troops and submarines with innovation because we still have some economic juice left. But the innovation comes because we have money. What if the money runs out?

• If the economy collapses I can tell you what will happen with innovation, it will slow down, if it has not already.

The GOP Noe-cons always says ‘ they will drop a nuke’ in one of our cities if we do not spend more. And if it happened deep down some of them would be saying ‘see I told you so’. They would feel hurt and pain of course, but another side would say ‘see I told you so’.

I say they will nuke a city if our economy collapses and we can not afford to stay cutting edge technology. They will drop a nuke if we are in 150 countries in the world and choose to play the dangerous game of Middle Eastern politics. We can not have a Camera in every person in the world’s house. Further, let’s be real, to construct a nuclear weapon and detonate it in an US city is next to impossible, a dirty bomb maybe or a biological weapon maybe, but a real nuke is hard to build and get the material for.

 Why the US should focus on butter over guns

Here is the reality. We need to maintain a strong economy so we can have a technological edge and prevent this from happening. Building more attack subs or trying to control the whole world is not the way we do it. It is a war based on technology and international intelligence and this is fueled by free market innovation.

Coupled with the fact that we should not be involved in Middle East politics like we are, that is the reason they want to attack us, because they see the US as invading their homeland. Shocking but true.

Why do the terrorists not attack Japan or Iceland or the Swiss or the Swedes? These are rich free countries? Maybe it has to do with the fact that we behave like and empire.

The 9/11 attack was not caused by lack of military spending, we had lots of submarines in the ocean, it was lack of awareness of who the enemy was and their motives.

 Know thy enemy Sun Tzu – The Art of War

Many people jumped on Ron Paul for saying this about 9/11, but he was not saying that the victims caused the attack, not at all! He said something to the effect the attack was partly motivated because we act like and empire, fight undeclared wars, support political assassinations etc. This is what the Terrorist themselves said.

 Know thy enemy Sun Tzu – The Art of War

Bin Laden stated that the objective was to wear down the USA in a war of attrition. Are we playing into their hands?

George Bush said ‘they attacked us because of our freedom’. What an idiotic statement.

 The term Guns Vs. Butter

The term Guns or Butter was first used by William Jennings Bryan in his resignation from secretary of state under Woodrow Wilson, however, it had another history.

Living in Poland many years and at my University studied a lot of history. What many people do not know is why War II started when it did. What was happening in Germany in the 1930s?

The truth is the Germany economy in 1939 was on the brink of collapse. While everyone was singing praises of the party that was keeping Germany safe from the ‘ Jewish threat’, the economy was on the brink of failure. The economy could not maintain its military expenditure. Yes it was a classic boom and bust cycle brought about by government and a crazy evil leader.

Germany’s militarization was causing a grand fiscal expansion in their industrial military complex. He was keeping people on the military payroll and paying benefits and the arms makers were profiting. But that leader knew this the economy could not go on like that forever and felt war was the only solution to keep his political machine going before the economy collapsed. It did not cause the war of course but, they needed the war to keep their economy from collapsing.

So the political spokes people for that nation started to make statements about security from the ‘Jewish threat’ and the Bolsheviks and anarchists.

We can do without butter, but, despite all our love of peace, not without arms. One cannot shoot with butter, but with guns. Guns will make us powerful; butter will only make us fat – Hermann Göring

For me, that is another politically manipulate simpleton speaking.

I prefer the philosophy of security through innovation and an economic strength. I do not believe in politically playing like Otto Von Bismark did with realpolitik , that is politics based on practical rather than moral considerations. In contrast, I believe in the US constitution.

Two last thoughts on the guns vs. butter argument

1. In your household do you spend 25 to 50% of your budget on security? What if a business did this, it would have little disposable income for R&D or anything else. This is not life it would be a basic existence and this is what many in the USA have, just go to Walmart and look at the people shopping there.
2. Although I think religion should be kept out of politics, and it is distasteful when people in politics use religious language,  I can not help thinking that the Bible says ‘he who lives by the sword will dies by the sword.’.
3. ‘What good is one gains the world but loses their soul in the process’.

For pennies you can have fun

At one level the investing theory is sound, and people who have interest in penny stocks at some level understand the idea of financial leverage. It is the idea of trying to amplify your returns with little capital applied.

Financial leverage is a way which many great investors got rich, like Warren Buffet. However, they did not do it with trading penny stocks. They did it with more sophisticated methods. Buffets did it with Insurance., you can read my article, how insurance companies make money.

Penny stock traders have the idea that, low price equities, under a dollar, have potential for large percentage gains with even a small movement in absolute price. For example, if a fifty cent stock goes to three dollars a share that is a 600% return on your money. Even if it goes to one dollar yo double your money. In theory this is correct.

The problem is statistically the rate of return on average does not match the normal equity market. Windfall profits are the exception rather than the rule. Even if you have some play money, expect to throw away more than you will get back. However, if you have 100,000 dollars in a portfolio and you want to risk a few thousand, go ahead, but I would active leverage with options, rather than penny stocks as I think this is closer to a zero sum game.

Why penny stocks do not yield a good return on average

• Penny stocks that are scraps in the junk heap – Stocks beaten down this far can come back but more likely they are only attractive to junk men searching through rubbish. I do not know too many rich junk men in the real world.
• Penny stocks that are the next artificial blood – When I was in Finance in Boston I would soften hear about these wizards working on the next big thing in technology or biotechnology. They had MIT or Harvard connections. Great ideas, even noble ideas, like artificial blood, that maybe someday will be a reality, but in a 12 month time horizon or even 36 month time frame, I personally never saw any of those great opportunities perform.
• Penny stocks that are selling air – These companies that really do not have much going on but the dreams of the eccentric behind them. I think you would better off selling air. Sure, get some fresh mountain air from the Rocky mountains and compress it and sell it to people in LA or NYC. You would make more money then 99% of the stocks I have seen trading at pennies a share. I had a tried selling stock for some home gym he designed. I never saw it come to fruition. Even I personally and working on a few products. When I have mine out the door and selling I will let you know, but I prefer not to tot my horn, until this time.

Why Penny stocks move up

• Pump and dump – the market builds excitement, often manipulated by some individuals then they are dumped. Micro cap fraud
• Stocks sold illegally under schedule S internationally – Chop stocks

I understand why investing in penny stocks is tempting, because earning money though working for a living is harder and harder. If you could just profit from two ten baggers, that is buy two stocks in a row, that go from one to ten dollars; with ten thousand dollars you would have a million dollars. It could be done in a year.

However, everyone wants to do that. But have such a good run with a cheap stock, is like making a hole in one on the golf course. You can not base your life on it. Better is to prefect your game in a more rounded fashion and if you do get a stock that rises to ten times for what you guy it for, be thankful. I have, but it was when I was younger and I made a fortune, only to lose most of it. It was a painful lesson.

If you want to play with a little of your risk capital I think Leaps or long-term equity options are better vehicles for leverage. The are also low.

Have I ever owned a penny stock? Sure in my 30 plus years of investing in the stock market I have owned a number, mostly at the start of my investing career. I did not buy them mind you, they were low price stocks that hit the pink sheets and went bankrupt, belly up. I was young and brash and thought buying low-priced stocks under 10 dollars would amplify my returns. I was always looking for something exotic and cutting edge.

What is the lesson we can learn from Penny stocks? – Leverage

Although most penny stock junkies will most likely never get rich they do teach a lesson. Leverage a key investing idea to amplify your returns. You can turn a small amount of investment capital into large returns. All you really need is a system of investing that does average, or even below average but consistently. Read my posts on quantitative investing and how to invest with logic.

• It is better to have a system that is consistent and below average, but leveraged than a system than going for a home run in the market with a hot stock.

I can not get excited about Newt Gingrich because he is the most Hawkish GOP candidates. He is the Uber war monger for the GOP and not a leader, his character is weak. George Will calls him anti conservative, he pocketed millions as a lobbies connected to housing, what is he on his fourth wife? I would not vote for him and I do not think he will be the Republican nominee.

It seems that if we want strong leaders, we should have leaders with enough self-confidence and strength of character to defy conventional wisdom and the chants of false patriotism and pride. – Ron Paul

This is why I think Newt Gingrich is as poor a Presidential candidate as Obama in the 2012 election for President.

• New Gingrich on the issues  – If you look at his ‘solutions’ page on the surface he does not look that bad. A lot of free market, ‘contract with America’ and talk and charity and religion. However, the bottom line, he will do this:
• Aid to the middle class
• Increase the war machine

War and economics. It is a trade-off, guns or butter, it was true for the Soviet Empire and the American Empire

I do not know why people can not make the connection between the drain on our resources and the military? I do not know why people do not understand that economics determines the outcome of war. If you aggregate all world-wide war military expenditures, the USA accounts for 46.5%. For me, that is not fiscal conservatism, but a recipe for decline of this great nation. Anything that comes out of Gingrich’s mouth is a lie, if he cuts aid for Americans and ‘helps’ other countries by firing missiles.

Local business at a team meeting. They were talking about costs, price, sensitivity, efficiency and customer service. This is what Americans need to focus on not following old blow hards like Newt into another war which takes money out of your pocket. Gingrich is not what America needs now.

Many vocal people in the Tea Party, with all its positive momentum about shirking government, on the other hand, champions the dreadnought diplomacy like a group of cold warriors.

I am not against veterans that have severed, nor am I a peace and love flower child hippie. I am one who is deeply concerned with the way the USA is going. It is not going up, it is going down.

The reason it is going down is too much government. A large chunk of this is the special interest of war, which Newt Gingrich supports. It is not just the money going out the door, but the lives of veterans that come back with head injuries or displaced in the work force as they have spent so much creative energy in the desert rather than using it to be entrepreneurs. The Republicans would rather cut assistance to Americans and not weapons for the Middle Eastern empire. As much as I have been positive about the GOP, an predicting they will win, they will lose this election if they are that stupid.

• Foreign policy and economics in 2012 elections are closely connected, why do not people see this?

Newt Gingrich could derail this election for the Republicans generally. He is ignorant about economics. If he reads this I will debate him on this.

Where is the greater threat, the economy and home security or on the other side of the world?

Gingrich claims the threat of terror is the reason for being a neo-con hold out. However, I consider the 14,000 homicides in the USA a year is a greater threat. 40,000 people die on the American roads, I think there is room for safety and infrastructure to be improved would you not agree? What about childhood illness? If more money was pushed to the above concerns the American public would be better off,  than causing resentment on the other side of the world with America sticking our noses in everyone’s business.

The GOP can lose the election in 2012

Why can the GOP not understand Americans do not cheer and get into war as much as they get into just living their lives? I like everyone else worry more about paying my bills, staying heal thing than an invasion of the American coastline of Iranian soldiers and terrorists.

It is not Christian to go to war like we have; without a consensus about it being a ‘just war’ manifest by a vote in congress for a declaration. Newt Gingrich blasphemed the name of John Paul II and tried to manipulate the Catholic vote when he in the same breath mentioned John Paul II and the future prospect of the Iranian-American war. He is politically manipulative, Machiavelli would have been proud of him. But the bottom line is America does not want a warrior President to usurper power from the congress and engage in another undeclared war.

His economic plan is little different from Obama’s other than he focuses on cuts in medical care rather than bombs. Newt Gingrich’s economic plan cuts the rate of increase of the debt but does not change the baseline.

For me this election could be a slam dunk for the GOP if their economic plan for the poor and middle class is coupled with peace, which so many people want in this new generation.

I do not want Obama to get re-elected as he has destroyed the USA with debt for the next 50 years and he has continued to expand the wars. However, Newt Gingrich is not the man for the GOP. If he is the Republican 2012 nominee, I might do a protest vote to Libertarian, as he is another John McCain, just someone who will spoil election hopes for the Republicans.

Lets first take a look where the US is spending your money with the deployment of US military troops that subsidies foreign economies. The US is in more than 150 countries around the world.

The following deployments of US military do not include defense contractors and private firms which cost the US tax payer a fortune, but are hidden costs. Nor do they include the Spy agencies like the CIA which have secret deployments and high, almost unlimited budgets.

These are rich countries that have been getting free rides for years and strong lobbies keep your dollars floating these rich countries, that frankly only love our money not us. US ground soldiers stationed to protect rich countries.

• Germany 54,198
• Italy 10,771
• UK 9,346
• Japan 40,178
• South Korea, 28,500
• Bahrain – 1,894
• Spain – 1,483
• Belgium – 1,234

Middle Eastern Countries on the other side of the world with US legions.

• Kuwait 10,548
• Turkey – 1,511
• Iraq – 49,000
• Afghanistan – 103,700
• Bahrain – 1,894

Of course there are more. We are in 150+ counties in the world.

I have heard we going to build up our military presence in countries like Australia, Poland. There is GOP talk of war with Iran.

There are many more countries that make up the 150 + countries the US is in. Each person stationed cost you money, a lot of money. Is this the foreign policy George Washington envisioned?

The US no longer fight wars of defense, but wars of aggression. Is this not the same behavior the American colonies rebelled against?

George Washington warned against entangling alliances, foreign wars and his economic policy was more libertarian than Republican or Democrat.

During Soviet times, my wife who is from Eastern Europe said:

The last thing they cut was the military, national police and spy agencies. They would cut all social programs and medical benefits, help for the disabled, education, before they would cut the military.

This is exactly what the United States is like. Despite promises to the contrary, the military and CIA and other defense agencies have only grown and largely unaudited. There is even talk now of war with Iran if needed.

In the Union (Soviet), the generals would be riding in nice cars with a staff, everything was under the shroud of secrecy and for the protection of the citizens, because of threats internal and external, but we all knew the real story. Government was the problem. The idea that they were protecting us was simply not correct. Newspapers in our mainstream media like Pravda (the truth) did not highlight the fact that the military was bringing the economy down. While we were firing million dollar missiles in Afghanistan, the Average citizen was worried about day-to-day economic survival.  It was the military that precipitated the collapse of the Union.

Alas, in the end we were grateful, as the weight of that industrial military complex brought the fall of the tyranny and the Union as the economy could not longer sustain a military empire around the world. The Union is now a footnote in history.

• Will America collapse? Many people think the USA will last forever. It will not. The only question is will it be a 250 year, footnote in history or looked back on as a shinning example of morality, an experiment that will last for a millennium.
• Many people think the Roman Empire fell because of barbarian invasions, but the reality was when the Republic centralized to an Empire, management became too complex, internal conflicts, bickering, civil unrest, then economic problems, weakened the Empire so it could not defend itself. Economics always determines strength.

I know people do not see it this way, as the military is held in such high regard in the USA. However, it is what is weighing down economic growth. It is the ultimate crowding out effect. That is it displaces resources and bright young minds to be diverted to non productive activities and siphoned off economic capital that would have been used for the next start-up or medical breakthrough.

Without a strong economy we will lose our edge and that is the real security threat. Aggressive US foreign policy, causes hostility in the world and  inspires new legions of terrorists who use more radical weapons to replace the terrorists we shoot.  I mean the Swiss or Icelandic nations or even Costa Rica or Sweden or Japan in the modern world or the New Zealander or Canadians do not cause strong emotion and resentment like the USA. What is the difference?

Congressman Ron Paul  from Texas explains in his book Liberty Defined:

The United States is an empire by any definition, and quite possible the most aggressive , extended and expansionist in the history of the world. Do we really find it shocking that some people in the world don’t like us?

When 9/11 struck, the Commander and Chief of the US and President George Bush explained to the American people and the world that

these crazy people must have hated us because of our freedoms.

I personally find that explanation a little hard to swallow as the world is more complex than that.

Why I do not believe the US is looking after its citizens best interest

The party line in the USA is we spend trillions and drive up the debt to protect American citizens. Yet if this is true, explain to me why when I was abroad and attacked as an American, the State Department, in my impression, was more concerned about smoothing things over than finding the truth, until I really pressed the issue. Maybe the idea of protecting American citizens has nothing to do with the Federal government, but rather more about perpetuating their own bureaucracy?

Eighty billion dollars are spent on spy agencies to ‘protect the American people’. Possible secret financing by the Federal Reserve, with loads and guarantees to our friend to assist empire building, is unconfirmed but would not be surprising.

Money spent by the CIA and other security agencies receives virtually no oversight by the U.S. Congress. When problems results as a consequence, the military is frequently called upon to bring about order and congresses is coerced into supporting the efforts for supposed national security.  – Ron Paul – Liberty Defined

Why do we maintain an empire at horrible expense to the American people? Here are some ideas which are floating around Washington.

1. Fear keeps the perpetual the need for government protection – People believe danger is lurking around the corner unless we fight every coroner of the world. It was true in Vietnam in the 60s and it is true in Iran today. When I am in Moscow, I can spot Americans a mile away, they often are looking over their shoulder, thinking they are in a strange wild country and anything could happen. Who are they some oil magnate? Generally the streets are safer in many parts of the world than any US city. Fear not reality is what motivates extreme behavior. Fear is what keeps the people in line and voting for more global wars.
2. Spread our goodness to the world – Some Americans believe we are spreading democracy and goodness around the world. I personally find that strange since a more efficient way would be giving money to help sick and hungry children. What about the idea of spreading democracy? Hmm, are we are a democracy or a republic? I went to the State Department website and saw a statement that said something like, ‘these are the documents original documents, for the world to see, that support the idea of our great democracy’. I looked at the documents and the were the Declaration of Independence, Bill of Rights and the US Constitution etc. None of these documents contain the word democracy. These documents are all about protecting the rights of citizens, from oppressive governments. So before we try to beat the drums of war with spreading democracy to foreign nations, our leaders need to understand US history. Also maybe not all nations in the world share our history and culture and we should not try to force it on others with military occupation. What if foreign solders with a different ideology from you, were stationed in your town, who would you feel?
3. Secure supplies of oil – I recall that when Rush Limbaugh the conservative political commentator announced the Kuwait/Iraq war was about the free flow of oil for American citizens to protect the American lifestyle. I was shocked he was trying to be honest. This modern-day mercantilism requires the protection of our trade routes and natural resource is a policy that makes no senses. In the long run the price of mercantilism and empire building is just too high. Every empire that tried it from Spain to Japan declined. We could just pay for the resources we need like Iceland does. The natural resource model for expansion makes no sense. The WWII Japanese were trying to build the East Asian co-prosperity sphere. When they felt the reproduces for their expansion was being limited they tried to expand their control with the military to secure control over the resources.

• Whatever the reason the result is we have a worldwide presence of American troops. This cost you, your economic life as well as bread resentment towards Americans around the world. I have traveled in the Middle East. People do not resent you personally, they are usually welcoming, they do not like US foreign policy.

The German philosopher George Hegel wrote:

The world is a war of ideas.

The war in US foreign policy is this. The Republicans want more of the same 20th century foreign policy, more guns less butter. The Democrats say they are different, but continue business as usual.

Whoever wins the election 2012, social programs will be cut before the unaudited secret spy agencies like the CIA or the Military are looked at. This is a recipes for disaster. Short sighted general do not understand economics wins wars. Obama I will not vote for because, he is a continuation of Bush foreign Policy. If the US wants to keep spending money in this way and funding it with debt, the USA is heading for bigger trouble.

Many on the right who endorse the preventative war mentally of overseas aggression are sincere in their belief that this effort is required to defeat the enemies of liberty. They refuse to see any connection between a policy of perpetual war and the loss of civil liberties at home. They believe their own rhetoric. This deception only facilitates big government, deficits, and the dimishment of individual liberty they say they are fighting to preserve. -Ron Paul

• US military spending
• US foreign Policy
• GOP Neo-cons will destroy America

Is a vote for Mitt Romney or Newt Gingrich a vote for yet another unfunded war of choice, this time with a nation, Iran, three times as large and populous as Iraq? Mitt says that if elected he will move carriers into the Persian Gulf and “prepare for war.” Newt is even more hawkish. America should continue “taking out” Iran’s nuclear scientists — i.e., assassinating them — but military action will probably be needed.  – Pat Buchanan

One more quote to consider in this next election.

He (King George) has waged cruel war against human nature itself, violating its most sacred rights of life and liberty in persons of a distant people who never offended him. – Thomas Jefferson

On one hand, the USA is a superpower, and rich, not like the Soviet Union. Yet on the other hand when I am in Wal-Mart in anytown USA it does not look like we are a rich superpower, except for those connected to the bureaucracy of Washington, the military contractors or the people the government is helping bail out. Of course that is not universally true and I am be dramatic but it is to make a point.

Under the 10^th Amendment States have the right to keep all power not specifically given to the US Federal government written in the US constitution. This idea was crafted into the US constitution by the founding fathers, particularly Thomas Jefferson, to prevent the Federal government from growing too big, over stepping its powers which often results in a large central government run by bureaucrats.

Preventing this was the whole point of the American Revolution, to create a government that protects life, liberty and the pursuit of happiness, not stifling it. The founding fathers felt a loose confederation of states was the way do this.

The constitution granted states the right for nullification and succession. This is no interpretation of the constitution.

The Federalist papers no. 84 contain the intent of the Tenth amendment and the issue of states rights. At the heart of this issues is the future of your liberties, if you care.

The 10^th Amendment literally says:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

This Amendment was a direct continuation of the Articles of Confederation statement:

Each state retains its sovereignty, freedom, and independence, and every power, jurisdiction, and right, which is not by this Confederation expressly delegated to the United States, in Congress assembled.

Judges have chipped away at the interpretation of this constitutional  law:

• United States v. Sprague (1931)
• United States v. Darby, 312 U.S. 100, 124 (1941)
• South Dakota v. Dole, 483 U.S. 203 (1987)
• New York v. United States, 505 U.S. 144 (1992)
• Printz v. United States, 521 U.S. 898 (1997)

Federal funding is lost if the states do not follow the central bureaucracy

The Federal power is gradually centralized and reaffirmed. The Federal government power is asserted via the tax, debt and reallocation of money to the States system enforces this law. If a particular state would not adhere, they would be taxed, but no money would flow back into the state. They would have all the burden of being in the Union and none of the benefits.

This is how the nationwide 55 mile an hour speed limit was enforced. States would lose highway money. It was a silly little ridiculous law.

Why State’s rights matter

However, states rights are not about silly laws like that. It is about when a Federal government becomes centralizes and powerful through incremental ism. States can not challenge or nullify Federal mandates, even if seems not to apply or be of benefit to a particular state or represent the beliefs of the people of that state.

The end result is always the same, government mandates, centralizes and becomes too strong. Top down management is also inefficient and often steps on ‘little people’ who are kept in their place.

Federalism is the ultimate top down approach

Having a strong central government that mandates universal laws and applies it to every household, is the opposite of democracy and efficiency. Americans say they have a democracy, I think it more like a like a large iron ship that is trying to navigate and turn though a narrow channel of water.

In our country a manifestation of centralization and a top down approach is seen by: large debt is placed on top of debt, and taxes on taxes, and wields its unlimited power and use up the trust of the American people in less than noble ways. Washington in its arrogance acts like an empire, to its own citizens and the world.

An empire where rich old men send poor young men and women to come back in body bags. State national guard units, young people who wanted to help their state in emergence or pay for the college are sent, not to help their state in times of flood or emergency, but to clear roadside bombs in Iraq.

Federal bureaucrats dictate their conception of that should be taught in schools children. Some see this as indoctrination.

The public’s liberties, rights and privacy are eroded with fear being used as a tool to get people to surrender their liberties. If a State protests like Texas did with body scans, the Federal government acts swiftly to squash the independent thinking.

Think about it while the Federal government operations maintain secrecy, you are watched more and more. What if we as private citizens were able to audit and watch the government workers, including the Federal Reserve? But this will never happen.

In summary the road to an authoritarian state is when the Federal government consolidates power, taking it from a bottoms up approach to a top down approach.

The Federalist papers no. 84

The Federalist papers are important as they describe the intent of the framers of the constitution, the ultimate law in our land. In the supreme court as cites the Federalist papers hundreds of times in their decisions. It is an original authoritative document.

James Madison, Thomas Jefferson never envisioned this and designed the constitution to safe guard against it. In fact Madison thought the 10^th amendment did not need extra language because it was a truism that the states have the power except in exceptional cases.

If you read the Federalist papers, no 84 is about the rights of the people vs the role of the government as it related to the bill of rights.

Alexander Hamilton was against the Bill of Rights because his interpretation of this would be, it was a list of rights of the citizens, while these rights are self-evident. By listing them future generations might interpret this list as the only rights citizens have. If you read the Federalist paper, you will see the Federal government was clearly meant to be limited and the power was to reside in the States and more important the rights of citizens were to be expansive.

What if the US constitution was respected?

If the US constitution was respected and defended US citizens would have more choices in their lives, more freedom. They could live in the states were law and order was more in agreement with their life ideals.

In an alternative reality in which government workers, including the military honored their pledge to the constitution, you would not have the US military hunting US citizens with drones without a trial like was done in Syria. We could have school choice for children, no monopoly on money, we could live in a state that is governed more in accordance with their political economic ideas.

Choose your State based on the way to the laws and lifestyle

Even under the current system we live, people do this to a limited extent. It is no coincidence that, one of the reasons I choose to live in Florida was there is no state income tax. In contrast, Many states like Oregon California, and New Jersey will siphon off about 10% of your earnings or over a month of your work life a years.

More important, if there was limited Federal government, some states would be financially responsible and have a balanced budget and others would not. Each State could issue their owe money as well as private citizens. People would live in states that were not train wrecks fiscally or enjoyed more personal freedoms. It would create competition between states for hard-working honest citizen. On the other hand if you want to live in a free lunch state like California, you would accept higher taxes.

What is really done at the state level Vs. the Federal government?

Think how much is done at the state and local level. Schools, roads, prisons, courts, state armies, air force, fire, police, parks, assistance to the poor, including food stamps and even medical insurance. At the state level there are driver’s license, Real Estate and lawyer and other professional licenses and regulations.

It makes you wonder why the US government exists at all if day-to-day life is done at the local and state level. Of course there is Federal government funding to the states, but come on this is a small part of the black hole called the Federal Budget.

Why does 1/3 of your life, really more if you aggregate all taxes go to the Federal government? They are not here to help you. For example, when I had problems abroad I felt they were more worried about cover their own complacency, then helping me the tax payer and citizen.

If the Federal government were to shut down, disappear or turn into a small into a small set of buildings which holds the US Constitution and the President acting mostly as the ambassador to other countries,; after an adjustment phase the world would go one. Of course this scenarios is to just make a point. The USA does not need to be the greatest empire the world has ever seen as well as being, the lender of last resort to failed businessmen nor control the money as well as every aspect of our lives.

Basically life would go on and the United States of America would prosper after an adjustment phase.

In another scenarios what happens when states rights are ignored and government continues to expand ad consolidate power:

• The problem of massive Federal debt will not go away, which neither party in this great democracy of ours will address until it causes long-run damage to US competitiveness. Then everyone will be stretching their heads saying what happened. The Federal government happened. I can assure you Federal assistance to the poor and small business will go before the massive military industrial complex, the state department and the CIA and other government agencies. A military state will always cut social programs before military and spy agencies which seem to be expanding.
• We have a Federal government that watches your every move, instead of the converse being true. The Federal government in my mind operates under the shroud of cloak and dagger guarded secrecy, like in George Or-well’s 1984. Big brother is watching you. You could be deemed as an enemy combatant. What if Americans watched the move of every bureaucrat and the lavish lifestyles I have personally witnessed with government workers and outsourced consulting firms? I bet corruption and waste would decrease if people really understood how their money was being spent. However, in free America that will not happen. The Federal government watches you, not the converse.

The Civil war and States rights issues

Did we not fight the civil war because of States rights which were connected to Slavery and other inhuman laws? Yes. There is a simple solution regarding the issue of slavery and civil rights. Of course there could be some limited Federal laws that deal with human rights and respect for the individual. That was an exceptional case and specific to the time, once we have crossed the huddles of abolishing slavery and civil rights for all people, the pendulum now swings in the other direction.

But the Civil war was caused by the Federal government making things worst with draconian laws. For example, In 1828 for example South Carolina was strapped with a horribly unfair Tariff Act. When the State nullified the law in 1832 . This unfair law escalated the conflict and polarized both sides. The north was industrial and the south was agrarian based. This was regardless of the slave issue. If there was no slavery the issue would be the same. The North passed laws that held the North but hurt the South. GDP in the South plummeted. If you like original documents you can read John C. Calhoun’ defense of nullification.

Jefferson in the Kentucky resolution of 1799 supported nullification as did Madison in the Virginia resolution in 1798.

Resolved, that the several States composing the United States of America, are not united on the principle of unlimited submission to their general government; but that by compact under the style and title of a Constitution for the United States and of amendments thereto, they constituted a general government for special purposes, delegated to that government certain definite powers, reserving each State to itself, the residuary mass of right to their own self-government. – Thomas Jefferson

It was almost universal that states would have the right to nullify Federal laws to the founding fathers to prevent abuse and growth of a central government.

• A good resource is Nullification: How to resist the Federal Tyranny in he 21^st century by Thomas woods.
• The Politically Incorrect Guide to the Constitution by constitutional scholar Kevin Gutzman.
• States right – the tenth amendment – quietly growing movement. I expect to see more challenges to the current interpretation of the 10th Amendment.

The Federal government needs to exists almost with the sole purpose of protecting individual rights of its citizens.