Saturday, May 30, 2009

This Week's Libertarian Times from Andy



In this issue, we will consider the outstanding question from last week:

“What’s so great about Freedom anyway?”

While the purpose of this newsletter was intended to be more along the line of “what actions should Libertarians take in view of the global economic crisis” and not so much a philosophical dissertation, I thought it would not hurt to try and answer this question. Thanks to all of you who contributed answers!

We Libertarians take the answer to this question for granted. It is obvious why Freedom is so great! People who live in authoritarian countries have time and again risked their lives to escape to free countries (one only has to remember the Berlin Wall from 1961 to 1989).

The context of the above question, however, was not in relation to dictatorships or countries where obvious oppression takes place. In such cases, the need to “sell” Freedom is unnecessary; people who are oppressed by a cruel, arbitrary regime will choose to be free if at all possible.

What is more difficult to “sell” today, is Freedom to people who already live in so-called “free” countries, such as the USA, Canada, European Union countries, Australia, New Zealand, etc. The population in these countries enjoys a certain amount of freedom already (at least most of them think so) and to make the leap to a “free” country in the Libertarian context is not so obvious. What additional advantages could a Libertarian society offer to them?

And, more to the point, what currently perceived advantages would a Libertarian society take away from them? If there’s no taxation, how would I get my pension? Who would provide education to my children? Who would look after the roads? What about the police, defense of the country, and a whole host of other items that people take for granted that the government provides for them?

Usually, we then proceed to explain the free market alternatives to all these things and get into arguments on the details of these alternatives. In the end, there are too many assumptions, too many uncertainties, too much risk to try something that only exists theoretically, too many unanswered questions, too many variables – better to stick with the devil you know! Fear of change also works against us, especially in times of war or crisis.

People have become used to their lifestyle and used to the restrictions that government imposes on them. Most people even agree that these restrictions, including the payment of taxes, are at best good for society and at worst a necessary evil. To make the leap to a society where Freedom as we understand it rules, is too much to ask. The best reaction you can hope for is that they concede that it is an “interesting” idea but not realistic in today’s environment and probably never will be realistic. And so the conversation ends.

Where do we go from here?

We are of course not the first Libertarians to ask this question. Many ideas have been proposed and tried, we have managed to be good custodians of our philosophy in that it has not died and been forgotten, and we have even made some “converts” along the way, people who “saw the light” and caught the spirit of Freedom, kindred souls with whom we can have intellectual discussions and lament the state of affairs as it exists in the world today.

While I in no way disparage these efforts and activities (in fact I fully support them and contribute to them in my own way), we have not answered the above question about what’s so great about Freedom for people who live in democratic countries and seem to enjoy a reasonably free lifestyle. They have freedom of religion, can travel overseas, can choose their work, their place of living, and “enjoy” the protection of their government. They can even decide to join political parties and take part in the democratic process of electing their politicians and can even try to become politicians, government ministers, and perhaps head of state themselves. What do we have to offer on top of that?

This is actually quite a sobering question and also the reason why I thought it is important enough to devote this issue (and subsequent ones, if necessary) to trying to answer it.

When we defend Liberty, we often do so by describing what happens when there is no Liberty. It’s a bit like defending “peace” as the absence of war. Even dictionary definitions of freedom point out “freedom from slavery, bondage, imprisonment, control of another, or external restraint or compulsion” (Webster’s). And people don’t want to hear that we (in the places mentioned above) don’t have freedom now anyway, or are minutes away from becoming a police state. You have instantly lost your credibility if you say this to the man or woman “in the street”. Pointing out the dangers of a loss of liberty has to be done carefully, and with examples that people can identify with.

Looking at Freedom in a positive way, i.e. not the absence but the presence of Freedom, we can make the following arguments.

Freedom is the right to choose! Choose what I wish, what I want, what I need, the way I want to live my life, the way I define my success or happiness, with the only proviso being that I do not infringe upon the equal freedom of others. Freedom therefore enables morality because I cannot make a moral choice, good or bad, if I am not free to make it. If I am forced or coerced to make a choice, the responsibility for that choice is no longer mine but belongs to whoever made me choose this or that.

Freedom is thus essential for morality, but also for happiness, prosperity, creativity, and justice. “Free” countries create more wealth because its citizens are free to be creative and successful, are free to pursue what makes them happy, and the principles of freedom and responsibility allow for justice (what is yours and what is mine) to flourish and to be effective. The voluntary actions of free individuals have greater potential for “good” than the forced actions of conscripted individuals.

“Freedom works because men are not all-knowing”, F.A. Hayek observed. A fundamental assumption of anyone being in favor of freedom is therefore the ignorance of all of us. I cannot improve of what Hayek said, so I let him continue his argument: “… if we could know not only all that affects the attainment of our present wishes but also our future wants and desires, there would be little case for liberty … Liberty is essential in order to leave room for the unforeseeable and unpredictable; we want it because we have learned to expect from it the opportunity of realizing many of our aims. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it.” (F.A. Hayek, The Constitution of Liberty).

The humility that is implied in the admission of ignorance is, of course, not that popular. Governments pretend that they know pretty much everything and whatever they don’t know is not worth knowing. Any discussions on the benefits of Freedom must therefore always start with this fundamental assumption: our collective ignorance. Our collective “wisdom” or knowledge has been made possible only by giving individuals the freedom to think, act, learn, experiment, debate, explore, and discover new knowledge and share it so that we all can benefit from it.

In summary, then, Freedom is essential for morality, justice, prosperity, happiness, progress, and knowledge. That’s good enough for me! The link of Freedom to Happiness was also the theme of one of our readers, Walter Smith, who had this to say about why freedom:

“The alternative to freedom is enslavement. If one assumes the purpose of
life is one's own happiness, then one must be free to seek happiness on
one's own terms. If one is to seek one's own goals and explore anything
life has to offer, one must be free to search. If we allow Big Brother (in whatever

form it takes) to dictate our lives we can never be truly happy.

Only an individual can decide what will bring him or her happiness. If
one's happiness is left up to Big Brother, then happiness will always be
subjugated to Big Brother's quest for more power and control over
individuals and society. Innovation and true improvement of the lives of
humans will suffer.”

Are these arguments enough to convince a skeptical public? A few perhaps, but certainly not a majority. It may be easier to point out the failures of government as they try to take over every aspect of our lives.

To me, governments today are the source of arrogance, lies, theft, violence and corruption, and the priority task of Libertarians is to minimize the effects of these on our lives. One way is to use our time to make money; as I found in my travels around the world, the more money I have, the more freedom I have. It does not work everywhere but is still effective in a lot of places. However, with the action that governments around the world are taking and are planning to take in response to the economic crisis, I see even this opportunity being taken away gradually at first, but accelerating. This is why I believe it is time now for Libertarians to “collaborate” and ensure not only that the benefits of Freedom will continue for as long as possible but that we can be better prepared against the onslaught that is sure to come.

When the dangers to our Freedom become so obvious that the multitudes are noticing, it may be too late already, but in any case we need to have an alternative ready, based on our principles, that will then be accepted by a far greater number of people than we can hope for at present.


Friday, May 29, 2009

Why the price of gas is going up while the economy is headed down

Why the price of gas is going up while the economy is headed down.

By Nick Sorrentino, 5-28-2009

So the economy is tanking. GM is bankrupt. Chrysler is also. House prices are still going down. Unemployment is approaching 10%, and using the numbers for unemployment that we used to use just 4 years ago unemployment is about 13%. Times are hard there is no doubt. But good news! The price of gasoline is going up! Oh…wait.

Used to be, before we entered the economic bizarro world we now live in, that rising gas prices indicated that trade and travel generally were increasing. Though it was generally bad news for the consumer, rising gas prices often indicated good things for the economy down the road, ahem. But it doesn’t look that way this time.

As of the writing of this article, oil is trading at about $66 a barrel. 4 months ago it was at $35. We’ve had almost a doubling of the oil price this spring. This is why the numbers at the gas station are inching higher again.

But wait. Didn’t we just enter into the worst economic downturn since the Great Depression? Wouldn’t that create downward pressure on oil prices?

It would, but there are 4 possible reasons why this is not the case right now.

The first is that there is indeed more demand for crude than anticipated back in the winter. Perhaps those “green shoots” Bernake and the mainstream financial press keep talking about are real. Perhaps China is pulling up out of the abyss ahead of the west. Perhaps India is right behind it.

I personally don’t buy this argument as I believe that China at least may be really tweaking its numbers. But that’s just a feeling. I may very well be wrong.

The second is that OPEC has reduced production to a level where inventory is pushing prices.

This has indeed happened. OPEC has ratcheted down production in recent months and has stated publicly that it would like to see $75 oil. Countries such as Iran and Venezuela would probably like it a good bit higher than that.

So a reduction in inventories is a factor in the oil run-up even with anemic world demand.

(A side note. There are rumors of full oil tankers floating on the high seas with excess oil to unload once prices go higher. Interesting.)

Third is that traders are looking beyond the recession to when oil demand will really increase fundamentally and they don’t want to miss out. When this economic storm passes, and it will, it’s hard to see that Chindia will demand less oil than it has in recent years. It likely will demand more, much more. Whereas the USA and Europe were the main customers of crude until very recently, the world may now be witness to a doubling or even tripling of demand for oil over the next decade and a half with the emergence of the East.

Since oil deposits look like they are declining in yield generally around the world this increased demand could wildly increase the cost of a barrel of crude. I think this is very likely to happen.

But it still seems a bit early for this play.

The fourth reason for the increase in the cost of oil is that oil is the antidollar. I believe that this is the main reason for the oil rally of the past few months.

Oil is denominated in US dollars. So when crude prices go up, the value of the dollar goes down and vice versa. There are times when oil is the dominant factor in the dollar/antidollar dance and there are times when the dollar takes the lead. Right now I believe the dollar is taking the lead.

The Federal Reserve is in the midst of a policy of “QE” or quantitative easing. QE is the wholesale printing of money. The goal is to head off deflationary trends in the economy by creating an inflationary draft. The logic is that deflation is worse than inflation and so if inflation is needed to head off deflation so be it. This is basically what “Helicopter Ben Bernake” said he would do in the event of a financial crisis.

The Fed is systematically weakening the dollar to inflate away the massive debt that the US has taken on. Unfortunately the weakening of the dollar means higher prices at the gas pump for you and me. This will further stress an already stressed economy and may further feed the negative economic feedback loop the world seems to have fallen into.

There are many weird things that become apparent once one understands the dollar/antidollar dynamic.

For instance:

Does that mean that OPEC, because it can manipulate the price of oil, has a powerful hand in American monetary policy? If they can make the dollar go down by restricting the flow of oil does this not put the USA in a very precarious position? Would that mean that Hugo Chavez, The Iranians, and the Saudis impact whether you have a job, can afford to go on vacation, or will have enough money for retirement?

The answer to these 3 questions is YES. I’ll explore these issues more fully in the next article.

Dethroning the Dollar

Silver has best monthly run in 25 years. The run is just beginning the LER feels as inflation starts to creap in

Silver has best month in 25 years. LER feels the run is just beginning as inflation starts to creep in. Remember when silver was $9 an ounce in December? It's at $15 now. Some information from Bloomberg.

Sunday, May 24, 2009

Maggie Rourk

Gerald Celente: The Bailout Bubble- "Nothing left to inflate"

Goin' Back to DC Blues

Goin’ Back to DC Blues

I used to live in Northern Virginia. For those who are unfamiliar with the Fairfax/ Prince William/ Loudoun County complex it is a stretch of traffic ensnarled suburbia filled to the hilt with federal employees. Here one can find every kind and perturbation of bureaucrat. From FDA paper pusher to CIA covert operative. From Homeland Security domestic intel gatherer to DIA overseas intel gatherer. They all live here and shop at the same malls.

The military and the contractors that feed off of the military budget are of course well represented here. You can’t swing a dead cat without hitting a defense contactor. Seriously they are everywhere.

And there are also the many technology companies that populate the “silicon corridor” near Tyson’s Corner that suckle at the federal teat.

The Washington suburbs are rife with people who are in one way or another working the system. Big surprise right?

But for those who are unfamiliar with Washington DC culture, for those of you who have no idea what a “slug line” is, or would be completely confused if someone told you that they were a GS15 at a cocktail party, be happy. You don’t want to be familiar with it. But you should know about it.

First and foremost the Beltway culture is one based on an extreme sense of entitlement. Many federal employees believe that they are owed a job- and a fairly high paying one at that. They deserve a bullet proof pension paid for by the taxpayer even though the tax payers footing the bill could never dream of such security in retirement. But the federal worker deserves, and I’ve heard it many times, his pension for the 20 years he worked at the Department of Rulemaking and Time Wasting. He has put his “time” in.

What’s worse is that many federal workers who have been provided a fairly comfortable life on the tax payer’s dime look at the people who aren’t in the “system” as suckers. Trust me, a close family relation told me as much.

“Why would you want to be an entrepreneur? It’s so risky. A good government job will pay you probably as much as you would make as a successful business owner, plus you get all kinds of days off and a healthcare package that can’t be beat.”

“But,” I said, “All those benefits are provided by people out in the real world who take on risk and build businesses and pay their taxes.”

“ Suckers.” My relation said.

I don’t believe that the average American in say Cleveland, has any idea of the extent to which he or she is being played for a fool.

It’s one thing to provide a living for people who live on welfare. That’s irritating. But if folks had any idea of the culture of arrogance and entitlement that permeates every pore of the Washington bureaucratic class, I think they’d be more than pissed.

Few people know for instance that the 3 wealthiest counties in the USA surround Washington DC. The average household income in these counties is about $100,000. The reason for this is because of the high number of civil servants (to be kind) who live in the area.

And remember these people can’t be laid off. They can’t be fired. They have every federal holiday off and a very generous leave regime. Not to mention the pension already mentioned and God knows what else in the way of perks.

These folks have these things because some guy out in Peoria had the balls to go out and follow a dream and start a business. Everyone seems to forget that part.

I am writing about this today because after 5 years away I am rejoining the fray in Washington. My business has died, as is common these days, and so I must find gainful employment where there are jobs. There are jobs in NOVA.

Now don’t get me wrong. I am thankful that employment options exist. If they are in Washington then I say thank you. It’s no fun to be poor.

But after hustling the last 5 years for a dream that in the end died, I am going to have a hard time suffering any federal employee who bitches that his cost of living raise wasn’t enough this year. I may have to punch him in the face.

-Nick Sorrentino

Friday, May 22, 2009

California ain't so golden no more

Time For Tough Choices: California

The Economic Value of Ownership, Control and Property

The Economic Value of Ownership, Control and Property

By- Andy Safa

This article is supposed to be about Whole Life Insurance, and for those that have eyes to see (!?), it is! However before discussing the product, process and the philosophy must first be exposed. Only then we will be able to see the value in the product. I have written this article not to bring forth the problem, but with the most optimistic attitude I will bring the solution. My work here is not to tell what you already know; it is to uncover what you “think” you know that really isn’t so.

The prevailing methods of financial operations are filled with an error that in the end will lead to fatal destruction to the client. The source of the error may sound overly simplistic to mention, but the implications are profound and far-reaching beyond our ability to measure. The problem is that the stated objectives of most plans and their underlying philosophies violate the core principles of basic 101 economics. While I believe most financial advisors are honestly trying to do what’s best for their clients, a lack of economics training and the tools to test the validity of one strategy versus another limits their ability to clearly discern substance from illusion in the plans they create.

However, we are not to be caught up in the flaws of traditional financial planning, we all are aware of that. What is important to recognize is what impression and thought process these advisors leave behind to the consumers. With common errors and lack of macro-economic understanding from advisors, the same outlook is passed on to the client. This outlook has then forever impacted the client’s mindset and understanding and to undo the damage done is more difficult than to teach new fresh concepts and principles. Economics is essential in any financial plan, without it we are destined to fail. An example: To a financial planner, a 401(k) maybe a sound investment strategy by using compounding interest -- same principle applies to a mutual fund. To other more inquisitive individuals, these investments may not be as effective, their reasoning would be that the principal is at risk, you might find yourself in a higher tax bracket at retirement, or, it accumulates taxes since you are paying on the harvest not the seed.

These reasons are relatively fair. However, economics has predicted that these products are not the sound investment by simple principles -- none which have anything to do with tax brackets, rate of return or retirement. The principle is this. Capital is private property, property equals freedom, freedom equals prosperity. When one is to give away the control and ownership of his property to the unknown, freedom has dissolved and therefore so has the goal of prosperity. He has become a slave. The money one gives to the 401(k) is no longer their money but it is F.B.O. (For Benefit Of) so and so. Whoever is willingly giving up control of property to an unknown party (the government is not an individual and its operations are unknown) has sown seeds of his own slavery.

What I have just expressed is purely an economic reason why such investments where ownership and control are given up from an individual to a collective entity whose operations are unknown results in slavery. Prosperity is the goal, to achieve it one needs freedom, to have freedom one needs private property. There are many explanations to the failure of the financial freedom to the average American. The most common explanations include lack of savings, lack of knowledge and education and lack ambition and risk taking. However the main reason I believe is the lack of control and ownership over private property. The same equation follows, private property equals freedom. If people are in slavery it is that they do not have control over their private property. The 401(k) is the most popular investment in America. It doesn’t take a rocket scientist to understand it’s a failure.

More people have made money in business than in anything else. Like others, this also has an economic explanation to it. The business of you is what you have more control over more than anything else. You have more ownership and control over the operations and results over your business than you do over real estate. Business is more private property than Real Estate hence freedom and prosperity are better achieved through business. The results show this, more have made more money in business than any other investment. The knowledge of Economics is essential in any financial advice and operation. If one is to ask, what is the best investment?! The typical financial advisor will draw up charts and scrunch in the numbers which will never be 100% accurate. The good Economist would answer, whichever one you have more control and ownership over, the one closest to true private property. Now, that answer is completely 100% accurate and cannot fail. It is a Godly Principle. Slavery is not.

So what does this have to do with Whole Life!? Everything! From an economics viewpoint, a guaranteed dollar is worth more than and non-guaranteed dollar. Whole Life has guaranteed increasing cash value, and guaranteed death benefit. No risk involved. The rest is up to the owner, the owner and only he can control the results. The performance and the thrift is 100% in the hands of the policy holder. There are no market fluctuations to alter with the policy, no government intervention to deteriorate the options the policy holder has and last but not least, no Federal Reserve intervention, no tax, no inflation and no changing interest rates. No eroding factors from the outside. All is achieved from the imagination, the education and the will of the individual who owns it. No one but he has control or any sort of ownership. The policy holder is completely free. He is an individual; free to pursue prosperity and practice the unalienable rights of Life, Liberty and the Pursuit of Happiness. Individuals in our society have given up these rights. All has made it so that the individual is no longer able to pursue freedom and prosperity, until now. Made possible from the mind of one great individual. Infinite Banking has made it possible to pursue the true American Dream, a dream which has been deteriorated, forgotten, only a saying, not a reality.

Infinite Banking is the answer. From the beginning of all civilizations banking and bankers have been the most prominent and prosperous; right from the Knights Templar to the Robber Barons. Banking is the foundation. It is undoubtedly the best “business in the world”. Infinite Banking mixes the only real private property left today with the most powerful business in the world for centuries. No doubt, it is Whole Life Insurance that is the greatest investment we have today. The Founders of this nation sacrificed all they had for the vision of Freedom and Prosperity. That sacrifice is no longer necessary. Individuals can achieve liberty and finish the work of the founders in the most self interested libertarian way. No need for political campaigns and mass spending. No need for riots and calls for freedom. All it takes is for one to own a policy and then bank! Do not do this, first, for the purpose of America’s freedom. Do not, first, for completion of the vision our founders had. Do it for you. For your freedom. For your unalienable rights. For your prosperity. In doing so and sharing the news to others, Freedom will be restored, Unalienable rights will once again be granted and Prosperity will be achieved.

I dedicate this article to R. Nelson Nash, author of Becoming Your Own Banker -- The Infinite Banking Concept.

Andy Safa

This Weeks Libertarian Times by Andy Eyschen, Gold over $960, Silver near $15



Today we will look at the answers that several of you (my usual thanks!) provided to the questions I posed in the last issue:

“What are the advantages to dealing with other Libertarians as opposed to the general population?”

None of you disagreed explicitly with my proposition that we have an historic opportunity to collaborate in economic ventures as Libertarians for the benefit of ourselves as well as the “cause”; on the other hand the feedback to this question demonstrated that we have a long way to go before such collaboration is readily accepted.

All those that responded to this question pointed out the “pitfalls” of dealing with other Libertarians. Many of you had personal experiences or knew of other Libertarians who had personal experiences that were quite negative and, in some cases, disastrous. Based on these experiences, one could draw the conclusion that many Libertarians out there are unreliable, take advantage of the trust of other Libertarians, and have assumed the Libertarian tag only because they disagree with a particular law or government policy.

This is in stark contrast to the experience of Doug Casey at La Estancia de Cafayate, which you may recall from a previous LT issue. The elite group of some 100 people with strong Libertarian leanings who have chosen to create a community in northern Argentina seem to be working well together, deriving economic gain and enjoyment of life, as well as spreading the message of freedom on a global scale.

It is a fact that there are people who call themselves Libertarian only because they have a “beef” or even a fundamental disagreement with a single issue, be it a law or policy (e.g. drugs, abortion, taxation, gun control, licenses, etc.). My own experience confirms this too, as do many of yours. These people do not embrace the philosophy in its totality but pick and choose specific issues and harp on them (quite emotionally sometimes) to the exclusion of other issues and principles. Religions sometimes have this problem too, for instance on the meaning and application of “jihad” in Islam.

What we need, and what I’m looking for, are Libertarians with a good understanding of the philosophy of Liberty (including the responsibility and accountability parts), a practical and reasonably consistent application of the philosophy in daily life (this can be quite difficult at times), and individuals with a high degree of integrity or “character”. I also know from personal experience that such people still exist and while they don’t have to be “perfect” (none are) they do exhibit the virtues of intelligence, maturity, balance, and self-discipline. These are the kind of Libertarians I want to collaborate with.


I have used the words “collaborate” and “collaboration” quite frequently throughout the issues of Libertarian Times. This is deliberate and I want to briefly elaborate why I put such emphasis on this concept.

To me, collaboration is the latest “fad” in management practice.

Over the past 30 years or so, those old enough to remember have seen an evolution of management concepts starting in the 80’s with Total Quality Management (TQM) and the widespread adoption of ISO 9000-series quality standards. This was followed in the 90’s by Business Process Reengineering (BPR) or just Reengineering, a complete redesign of the way we did work in order to achieve sometimes dramatic performance improvements and often driven by new technologies, such as the Internet.

At the beginning of this Century, Knowledge Management (KM) became the focus of management science and practice, the attempt to collect knowledge residing in documents and people’s heads and storing it on a technology platform that enables other people to access and apply this knowledge (e.g. expert systems, artificial intelligence, helpdesk systems and in its simplest form: FAQ’s).

While there are still a number of obstacles to overcome and we still have a long way to go to fully realize the benefits of Knowledge Management, we are already getting a glimpse of the “next big thing” in management science and that is Complexity Management. This is still in its infancy but will be the major management application of the future. Whereas Knowledge Management is focused on “objects” (e.g. subject matter expertise), Complexity Management is focused on the links between objects, how they relate to each other and how they influence each other. The link itself becomes more important than the objects and this study will help us to explain and hopefully prevent the often negative “unintended consequences” of many of our actions and activities, while enabling positive consequences to happen in complex systems. The new maxim will be: “I link, therefore I am!”

The relentless and accelerating march toward complexity, driven mostly by new technologies (bio- and nano-tech) as well as the convergence of multiple science streams and disciplines that are starting to happen, will pose a great challenge for the future as our current ways of dealing with complexity (simplification, reductionism and specialization) will no longer be sufficient. Speed is a major factor in increasing complexity as change keeps happening faster and faster.

In between Knowledge and Complexity Management, I see “Collaboration” as an interim technique for handling increasingly complex problems until such time as Complexity Management has evolved into a full-blown science and practice of its own.

One of the reasons, I believe, why the current financial crisis happened so suddenly, with our so-called experts assuring us just weeks before that all was well, is that the complexity of our financial systems and the products that were invented (collateralized mortgage obligations, credit default swaps, repackaged asset vehicles, etc.) became so great that the consequences were no longer “visible” until it was too late. We now know that most of the buyers of these invented securities did not even understand what they were buying and thus became the victims when the whole house of cards collapsed.

We may all dream of “going back” to simpler days, the “good old days” perhaps, when life is simple and straight-forward. However, I firmly believe that this will not be the case and that life will become more and more complex, faster and faster. It is possible, of course (and it has been pointed out in recent literature with historical examples) that any society that becomes too complex will eventually destroy itself. Too complex, in this context, refers to the inability of the society to manage the complexity.

The search for tools, technology and techniques to manage complexity will therefore continue. Right now the time has come for “Collaboration”, the combined effort of a group of individuals with their own skills, talents, imagination, creativity, experience and knowledge working together on finding a solution to a defined problem or on finding the best way to achieve an agreed objective. A solution has to be found in a timely manner as the accelerating speed of change has a major impact on the problem and may make the solution obsolete before it is implemented.

The difference between collaboration and teamwork is that collaboration is a peer effort, where each member can contribute insight on any aspect of the problem or objective and not be limited by or to their specialization, as so often happens in teamwork. The composition of a collaboration team, the way the team gets rewarded when successful, the way individual contributions get measured and recorded, and the technology that is applied by the members all play an important role, much more so than in traditional teamwork. Also, collaboration lends itself better to situations where mindset change is required, as peers continuously question assumptions and conventional wisdom.

Geography plays a lesser role as the technology is designed to remove or minimize geographical as well as time zone limits.

I hope this gives you a better idea of what I mean when I use the words “Libertarian collaboration”. It means agreed objectives, individuals with certain skills, experience, knowledge, and chemistry (personality), dedication and commitment and (in our case) a common philosophical belief system, working together to achieve the objectives: furthering the cause of Liberty, making money and enjoying life!

Over the past few weeks, a small group of Libertarians from the LT readership has emerged with a greater than passing interest in this concept and I am greatly encouraged, notwithstanding the “perils” mentioned at the beginning of today’s issue. I have always believed that the Libertarian community consists of outstanding individuals that, if “collaborating”, can achieve far greater objectives as a group than they could individually.

I look forward to the first “Collaboration Project”!

The second question that was asked in last week’s issue: “What’s so great about Freedom anyway?” attracted far fewer responses than the first one above. I will therefore give you another chance to contribute your answers in this coming week. Deep down we all know the answer to this question already but it won’t hurt to put it into print and get it out in the open. I am sure it will be information we can put to good use in the near future!



Silver and gold rise as debuching of currency begins to take effect

Saturday, May 16, 2009

The Week's Libertarian Times: What's So Great About Freedom Anyway?, DARPA and Battlefield Telepathy



A reader question will kick off today’s issue:

“What are the advantages to dealing with other Libertarians as opposed to the general population?”

Of course, I would like to hear your answers but here is mine, albeit rather lengthy.

Having being involved in Libertarian circles, on and off, for well over 30 years, my “dealings” have been limited to attending conferences and reading Libertarian newsletters and literature. During my politically active time (1975-1981) there was greater involvement with members of the party, of course, but the focus was purely on political objectives: increasing membership, running for elections, media interaction, and fund raising. Collaboration on non-political ventures, such as economic ones, was not on the agenda.

In hindsight, I don’t really know why it wasn’t but in those days, we kept our private and political lives very separate. So, for work or business, we dealt with the general population. And have done so pretty much ever since. Our interest in things Libertarian seemed to be limited to intellectual and philosophical discussion and, every few years or so at election time, a bit of political activity.

Therefore the question that has been raised, why we would want to deal with Libertarians (for economic collaboration) as opposed to the general population, has basically not been asked before. So, thanks for bringing it up!

Individual Libertarians have participated (and still do) in business ventures and will continue to do so, where their objectives, interests and experiences bring them logically together. But in most cases that I know of, the fact that they were Libertarians was incidental. They would have done it anyway because it made business sense.

My quest today is for Libertarians to collaborate on economic ventures for the benefit of the Libertarian “cause” as well as for the benefit of the collaborators themselves, in the same sense that social entrepreneurship, as opposed to “simple” entrepreneurship, seeks an objective that is greater than the “mere” pursuit of profit.

The advent of the global economic crisis and its potential negative impact on personal freedom and free enterprise prompted this quest. The collapse of communism some 20 years ago and now the perceived “collapse of capitalism”, as promoted by much of the media and most politicians now in power, has created a vacuum in the minds of many people, especially young people starting out in their economic life and facing a lot of confusion as to their future.

This vacuum will be filled by governments or, if you belong to the conspiratorial class, by the power elite that is using or manipulating governments to retain control over the masses for their own ends. Where is/are the alternative(s)?

Libertarians face an historic opportunity to provide that, or at least one, alternative!

We have been discussing philosophy and theory for many years. Here is the opportunity and now is the time to put the philosophy and theories to the test and into practice! My aim, through this newsletter, has been to get Libertarians to collaborate not just for their own economic ends but to demonstrate to the world and especially to young Libertarians today that our philosophy is not just for intellectual entertainment but has practical and valuable application potential.

It is for this reason that Libertarians should “deal with” or collaborate with other Libertarians rather than the population at large, which “largely” does not understand or appreciate what our philosophy stands for.

And even though, as most of you pointed out, our philosophy does not generate the same degree of emotional attachment as a religious philosophy does, my suggestion to you is that collaboration on economic ventures that provide income, profit and work opportunities for Libertarians and simultaneously furthers the cause of Liberty should be our goal. I do not presume to have all the answers on how to do that and my aim through this newsletter was to invite your suggestions and ideas and arrive at an actionable plan.

My experience over the years has been that if you set a table with lots of dishes on it, many people will come to join you and eat. But if they have to bring their own chairs or even help to prepare the dishes, they tend to stay away. In our case here, the menu has not even been completed and I know that only the most committed and motivated among you would join to get the table set to the point where the majority will beg to be invited to dinner. If I prepare the menu myself, it will only have the things on it that I like. That’s why I need more cooks in the kitchen to make the menu as open and as palatable as possible.

Of course, we can start with a small menu and that is what is likely to happen. Other items will be added later but even to start, I would like to have at least a lot of ideas and agreement on what the first menu should look like. Can’t do it without you! So, please let me hear from you! Some of you have already given lots of suggestions and I am very grateful for that. Love to hear from the rest of you!

We shall end this week’s issue with another question from a reader who has much interaction with the “population at large” and comes across this question frequently:

“What’s so great about Freedom anyway?”

I have not spent any time in these and previous pages to discuss our philosophy and its benefits because I am largely preaching to the converted. However, this reader (from Western Europe) is pointing out some realities that would be good for us to ponder. Many if not most of the people in the “social-democratic or dirigiste” countries of Western Europe have little regard for or interest in personal freedom, taking responsibility or starting a business. The government takes care of them from cradle to grave and they love it. I go to school, I get a job, pay my taxes, go overseas for my annual holiday, and if anything should happen to me, like being sick or not able to find a job, the government will provide for me and ensure that I and my family do not go hungry. When I retire, I will get a decent pension and live out the rest of my life in peace among friends and relatives. Why on Earth would I want to be “free”? I can do most things that I want and the few that are prohibited don’t attract me anyway. Why do you fret so much about “freedom”?

And why should I take the risks of starting my own business? I may lose all of my money and that of my friends, relatives or bank. I have to work more than a regular work week and must solve all the problems that inevitably creep up in a new business. Much better to work for a large national or multinational company (or even for the government), go home after work and don’t have to spend all evening and night thinking about the company’s problems, get my sick and annual leave entitlements, and can focus on my family or personal life rather than how I am going to pay my employees or creditors, how to satisfy my customers, or how to handle the new competitor that just surfaced in my town.

Young people feel the same way and have few ambitions to “be different” from their peers. Finish my studies (ideally a liberal arts degree), have a great time while at university, get a job (or unemployment benefits), get married, have a car, kids and a mortgage (preferably in that order) and let the government take care of all the problems that arise, including the odd financial crisis.

This attitude is probably more prevalent in Europe than in the United States and is strongly encouraged not just by the government but also by parents, teachers and corporate business people.

What do we have to offer to these people? How can we frame our philosophical message to appeal to this mindset? And while we do not have to “convert” everyone “out there” to embrace personal freedom and responsibility, we should at least be aware that this mindset exists and not just in a few eccentrics but is well entrenched in many societies.

How do you respond? Especially if you live in one of the rich countries in Western Europe!



Pentagon Preps Soldier Telepathy Push
By Katie Drummond
May 14, 2009
10:46 am
Categories: Army and Marines, DarpaWatch, Science!

Forget the battlefield radios, the combat PDAs or even infantry hand signals. When the soldiers of the future want to communicate, they’ll read each other’s minds.
At least, that’s the hope of researchers at the Pentagon’s mad-science division Darpa. The agency’s budget for the next fiscal year includes $4 million to start up a program called Silent Talk. The goal is to “allow user-to-user communication on the battlefield without the use of vocalized speech through analysis of neural signals.” That’s on top of the $4 million the Army handed out last year to the University of California to investigate the potential for computer-mediated telepathy.

Before being vocalized, speech exists as word-specific neural signals in the mind. Darpa wants to develop technology that would detect these signals of “pre-speech,” analyze them, and then transmit the statement to an intended interlocutor. Darpa plans to use EEG to read the brain waves. It’s a technique they’re also testing in a project to devise mind-reading binoculars that alert soldiers to threats faster the conscious mind can process them.

The project has three major goals, according to Darpa. First, try to map a person’s EEG patterns to his or her individual words. Then, see if those patterns are generalizable — if everyone has similar patterns. Last, “construct a fieldable pre-prototype that would decode the signal and transmit over a limited range.”

The military has been funding a handful of mind-tapping technology recently, and already have monkeys capable of telepathic limb control. Telepathy may also have advantages beyond covert battlefield chatter. Last year, the National Research Council and the Defense Intelligence Agency released a report suggesting that neuroscience might also be useful to “make the enemy obey our commands.” The first step, though, may be getting a grunt to obey his officer’s remotely-transmitted thoughts.
– Katie Drummond and Noah Shachtman

Saturday, May 9, 2009


Writing from Dubai today, where the recession has hit hard, especially in the construction sector, while the oil & gas sector has picked up a bit due to the price of oil staying above the USD 50 per barrel mark and nearing 60 for the first time in 6 months. The surrealism of the past decade though has given way to a bit more pragmatism, with some 85% of (mainly) construction projects cancelled or postponed. It’s possible again to get a taxi in Dubai!

Lots of interesting feedback on “Doug’s Gulch”! As is usual in Libertarian circles, a wide range of opinions, however, most of you that responded (many thanks!) feel sympathetic toward the idea of a retreat far away from the troubles of the world and among like-minded people while making money at the same time. To be fair, the majority of the people at La Estancia de Cafayate have not “gone on strike” and they are still very much involved in their day-to-day businesses, following world affairs closely.

Others felt that such places bring reminders of cults, such as Jim Jones or David Koresh, and would cause ordinary folks to think of Libertarians and their philosophy in the same terms: just another cult!

Of course, we do not consider our movement as “cultist” and Classical Liberal Philosophy has a long and respected history, appealing to the basic instinct in all human beings to be as free as possible from force, fraud or coercion. Despite this appeal, the philosophy has had a small following, reinforcing the perception of a “cult”.

In fact, there were plenty of religious metaphors in your feedback. Does or can our Philosophy generate the same kind of fervor, commitment and even sacrifice that religious philosophies are able to do? Do we need it and, if yes, how could we achieve it? More comments on this please!

There was broad consensus that the current crisis is not sufficiently severe to warrant Libertarians getting out of their existing comfort zones, yet. What more would it take, I wondered?

Would the scenario in Kenya, where I just spent nearly one month, be bad enough? Kenya’s society seems to be on the brink of collapse: millions facing starvation, a looming drought, water and power shortage and rationing, the dam that supplies the capital city of Nairobi only 30% full (the lowest level since its construction), the Mungiki and other criminal sects wreaking havoc by killing scores of people with machetes, running protection rackets, hijacking cars, trucks and buses, a new mysterious disease that killed 16 people in one week in one village, injured passengers in a bus accident being robbed of their belongings, assassinations in broad daylight of human rights activists, teachers, and businessmen, rising unemployment, over 200,000 internally displaced people living in tents following the election violence in early 2008, a potential conflict with Uganda over a 1 hectare island in Lake Victoria, railway lines being uprooted by angry youths, a week-long sex boycott by a prominent women’s group, a currency devaluation of over 20% in just a few months, annual inflation at over 25%, politicians bickering over positions of power and money, a maize scandal, massive bribery and corruption at all levels of the public sector - and you wonder what more does it take for a society to disintegrate and become dysfunctional?

Very little of this is covered by the international media, from what I can see. Perhaps it does not resonate with many of you either and you may dismiss this as just another African country that can’t get its act together. But is it possible that we will see this happening in other parts of the world? I have chosen Kenya because of my first hand experience but I could have chosen Zimbabwe, where the situation is possibly even worse. Even Mr Gono, the former Reserve Bank Governor who gave the world its first One Hundred Trillion Dollar bank note, is back despite objections from the MDC party in the new “unity” government.

Politicians have learned to take advantage of these problems by using them to ask for more foreign aid from the World Bank, IMF and aid agencies. “Give us more money”, they say, “or things will get even worse!” This has created a mentality that “other people” are going to “fix” all the problems and it is not our responsibility. It has removed all sense of urgency and responsibility from local politicians, so they have the time to fight over power and money for themselves. The ultimate moral hazard?

And just like governments are bailing out failed banks and businesses in the developed world (more moral hazard?), so the donor and aid agencies are continuing to provide funding for corrupt governments in the developing world. Once the funds arrive, they are misappropriated, misspent and misapplied. As Ronald Reagan used to say: “Foreign aid means poor people in rich countries giving money to rich people in poor countries”. There’s no incentive to use the money wisely. If they did, the money might stop coming.

Is the world heading in the same direction as Kenya and Zimbabwe? Your thoughts, please!

Crisis Update

Crisis? What crisis?

Rising stock markets, the results of the “stress tests” by the US Treasury showing that “only” another couple of hundred billion dollars in additional capital will bring the banking sector back to health, the swine flu not being as bad as feared and the general feeling that we’ve had enough bad news for too long already, have given rise to demand for more optimism. We don’t want to hear the phrase anymore that says “things will get worse before they get better”.

For the past 6 months, people were reading the news to find out how bad this crisis is going to get. Now they want to read how soon the recovery will start and things will improve. Federal Reserve Chairman Ben Bernanke obliged by cautiously predicting a recovery later this year. We want to hear “good news” now, even if it means we will be lied to. Better pretty lies than ugly truth!

Of course, we all want to hear positive developments as a continuous flood of bad news is very depressing and pessimism becomes a self-fulfilling prophecy. I too prefer to be optimistic as it is a much better motivator to “do something”, like trying to encourage the Libertarian community to collaborate on any number of projects that will promote the cause of liberty and at the same time enrich the lives of Libertarians, both materially and intellectually. I would not do that if I thought it was pointless.

Therefore, I am pleased to report that several of you have expressed your willingness to collaborate with other Libertarians in principle, but you need more details and information about how such collaboration will work, on what terms and basis you could cooperate, in what areas, and what’s in it for you. All fair questions! My hope (and intention) was to use this newsletter as a means (catalyst might be too strong a word) to find the answers to these questions, find the people that are interested, get your creative ideas and suggestions, and create a virtual global community whose members can collaborate in areas of their own choice but produce concrete results that benefit not just the members but also the community and even society at large.

As Nick Sorrentino points out in his recent blog (, the Internet is the most Libertarian place on the planet and we should make the best use of it while it retains its relative freedom from political and government interference. So far, attempts to control the Internet by countries such as China, Singapore, UAE, and Pakistan (to name but a few) have been largely unsuccessful and we hope it will stay that way. However, we cannot be complacent and I am sure that such attempts will not only continue but become more serious and forceful in future. Let’s make the most of it while we can! We can? Now there’s a novel slogan for a Libertarian campaign!



Thursday, May 7, 2009

What is a Republican nowadays?

What is a Republican nowadays?

There was a time, long ago when I worked for the Republican Party briefly on the Hill. I had interned at the Free Congress’ America’s Voice network for two years just down the road, so the natural progression was to peddle my resume up in the House and Senate office buildings after I graduated from college.

I actually got a job fairly quickly and was hired by a very cool guy who taught me much about how Washington, at lease the House, worked. Once I saw how it worked though I became very disheartened.

I was naïve, green, maybe a little soft, but I soon realized that Washington was no place for ideas. (Queue the laugh track.) I had left the world of ideas at Mary Washington College. Frankly, I should have known better, I did intern in the vicinity for 2 years.

I foolishly believed that the GOP stood for limited government.

Now, this was just before Bush came into power and so the GOP as the party of small government was still kind of legit rhetorically. But it had really seeced to be a small government party long before I entered the RNC building. I wonder if the GOP ever was the party of small government. Maybe if we had had a president Goldwater. Perhaps not even then.

I truly believed, and continue to believe, that the size of the government should be shrunk. But the Republican Party, though paying lip service to limited government, has never engaged in an effort to limit government.

On the Hill I saw that limited government took a back seat to making sure power was consolidated for GOP members of congress. If that meant expanding a military base in the member’s district at the cost of billions to the taxpayer, so be it. Shrinking government means shrinking power. It is a rare Congressman that is secure enough psychologically to curtail his own power.

Power is seductive. It is sweet. Once one has the ability to put the fear of God into one’s enemies it’s hard to give that up. Power gives security, and money.

Washington is a place to get paid at the expense of the citizens of the vast American empire. It’s a big jack folks. The gangsters (Washington establishment) steal from you, with the power of law, to enrich themselves and the groups that will ensure they remain in power. It’s a syndicate. But we are so damn conditioned to accept it that we do. It doesn’t even occur to us that maybe, just maybe, our government has gone off the tracks. Maybe the government has become illegitimate.

So anyway, what is a Republican nowadays?

Is it Rush Limbaugh? Honestly the man was a heroin addict (granted hillbilly heroin but heroin none-the-less.) It doesn’t seem to me that the man has ever made his way around a running track. Should this guy be speaking for the GOP? God I hope not.

Is it Sarah Palin? This woman was a huge mistake. Yes she’s attractive and she’s a woman but she has no vision (to put it kindly.) If the GOP wants another George Bush it should support her. She’ll work out about as well.

Is it Ron Paul? Now, according to a prominent senator Ron Paul is not the leader of the Republican Party. But damn he sure looks it. He’s the only one with any credibility in the face of the financial crisis.

But how can a dissident lead a party? The establishment GOP hates Ron Paul because he actually believes that war mongering is evil and that expanding that military base on the taxpayer’s dime is wrong. He believes in cutting taxes but he also believes in cutting spending. This is very inconvenient for a deficit happy Republican Party. He believes in hard decisions and recognizes that the American people are ready for hard choices so long as they are the right choices.

Just because Washington is morally bankrupt does not mean that all of America is.

The GOP needs to learn this. If it does not it will no longer be a viable party. I am sad to say that the party I once supported may rather shoot itself in the head rather than embrace a true small government agenda. Small government means small power, and that is the crux of the "problem."

-Nick Sorrentino

The single greatest expanation of the New World Order that I have ever seen

Wednesday, May 6, 2009

Rick Santelli to Steve Liesman: "Don't Open Your Mouth and Say Dumb Things"

Rick Santelli to Steve Liesman: "Don't Open Your Mouth and Say Dumb Things" (Video)

One of the things that I like about Rick Santelli is that he doesn't come from the privileged side of the finance industry. He' a middle class kid who went to the University of Illinois Urbana-Champaign, not exactly the hollowed halls that most of the people in the media, in Washington, or On Wall Street hail from. He's a Midwesterner and he scrapped into the business.

It is interesting that he is now often demonized as a heartless shill for the financial elite because of his rant earlier this year against the mortgage cramdowns. But for months prior to this Santelli railed against the bailout of the banks as well. He's a capitalist probably for the same reason I am. If your smart and don't come from a privileged background capitalism allows the chance to better oneself. An average person has a chance, a chance, at greatness.

Under a rigid socialist-fascist system (like the system that may be emerging) a ruling class is who calls all the shots. There is little upward mobility for guys with last names like Santelli, or Sorrentino for that matter.

Monday, May 4, 2009

'I'm very serious about running,' Ron Paul's son says

Rand Paul is contemplating running for Senate in Kentucky.

The son of former Republican presidential hopeful Rep. Ron Paul said Monday that he is primed to mount a bid for the Kentucky Senate seat currently occupied by GOP Sen. Jim Bunning.

Saturday, May 2, 2009

Obama Libertarians? Can such a thing be?

Obama Libertarians?

Last month I wrote a bit about the emerging Tea Party movement and how I felt that this group- at least a large part of this group- are what I call “Reagan Libertarians.” They are basically paleo-conservatives who have probably have never read an Ayn Rand novel, but feel they have been abandoned by the GOP because they believe in a very limited government and the Republicans now do not. This group of people I believe is the key for the GOP in the immediate future but the Republicans haven’t figured it out, the dolts.

The Reagan libertarians are a fascinating group and one that I will visit again in this publication before the end of this month, but tonight I’d like to talk about another political subgroup that I have sensed was out there, but am now sure is real, the Obama libertarians.

As I watched the Obama campaign in 2008 it was pretty clear that they basically took the Ron Paul net strategy and turned it for their own use. Not that I blame them for doing so. If I was running a campaign I’d have done exactly the same thing if I could get away with it.

But I have to say that the RP campaign made sense on the internet, whereas the Obama campaign did not to me.

I believe the internet is inherently libertarian, and so the Ron Paul campaign had a natural home on the net.

Obama is a statist who believes in pervasive regulation and all that. The net is a place to be free and is a place where ideas spread like wildfire if they make sense. The net is basically a market for ideas and it’s hard to see how a fellow who believes in the state, and regulation, and the expansion of federal bureaucracy, and more intrusion into the lives of the everyday citizen, and has a distain for markets, can be championed by those who live on the internet the most libertarian place in the world.

But one must look at who Obama was up against. The GOP was clueless in the early 2000s. Carl Rove convinced the GOP that it was better to stay in power for power’s sake than to stand for something and potentially lose control of the government. However the GOP sold out its values in the late 90s and early 2000s while also losing government. Lose lose. The GOP was so poorly run that the Democrats, as clueless as they were, were able to take back government decisively.

When Obama came along many people who inherently understand the self organizing nature of the internet and of the economy got on the Obama band wagon because the Rove/Bush GOP represented dunderheaded obstinance and silliness. The net generation (and I use this term very loosely. What is the net generation anyway? ) knew that something different had to happen so they voted Obama in. But many of this generally younger group are not solidly Obama people. They get free enterprise. They were raised on it, but Bush and today’s GOP did not represent real free enterprise in their eyes but a bizzaro Halliburton quazi-facism. If both parties represented a form of proto-fascism better to vote for the guy who at least knew what a Blackberry is.

I have argued for months, though by no means vehemently, that a significant portion of the people who voted for Obama were intrinsic libertarians who hadn’t really thought about economics, as they were still young, but voted for Obama because they liked his “vibe.”

An experience I had on Thursday convinced me that I was right.

As my computer is prone to periodic fits of non-compliance I had to call the help desk of a company I do business with. As is typical a young voice came on the line to help me solve my problem. I didn’t get off the phone for 4 hours.

Thankfully the kid I was working with was both knowledgeable and pleasant. After about an hour we had figured out what the political disposition of the other was. By the 3rd hour we were discussing real politics between rebooting my system and reconfiguring my drivers.

What was interesting was that this young man was very bright but had been basically apolitical until last year when he was taken with Mr. Obama and started paying attention.

After I asked him why he had voted for Obama. (He was better than McCain.) I asked him how he could support someone who would expand a state that would impose ever greater burdens of taxation on him as he came into his peak earning years to pay for programs that would likely be long gone by the time he was ready to tap them.

At that point we both agreed that government was thoroughly messed up. I then told him that if he really wanted to get depressed that he should educate himself on the workings of the Federal Reserve.

There was a pause.

Then he said, “Yeah I know all about the debauching of the currency. I’ve become really interested in gold lately.”

I smiled into the phone.

“Really? Gold huh?” I said.

“Oh yeah,” He said, “Gold has held its value for thousands of years. I think a gold standard is a good idea.”

“Really?” I said, “You know that Obama is the antithesis of a gold standard.”

Then he paused. “Well aren’t the Republicans too?”

And he was of course right.

-Nick Sorrentino

About Me

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Nick Sorrentino is the Editor of The Liberty and Economics Review and CEO of a social media management company.