GEORGE TEMPLETON
COMMENTARY
By George Templeton
Gazette Blog Columnist
Together Again
We must, indeed, all hang together or, most assuredly, we shall all hang separately." – Benjamin Franklin
Taking Chances
Sometimes
things just happen that way. It’s like the flip of a coin. We have to
make a choice without the facts. When things work out well we take
credit, even though the outcome is coincidental. When we do poorly, we
fix the blame, even though our choice was arbitrary. When we don’t
know the truth, we claim the opposite of what our antagonist is saying.
Lies make a politician more “authentic”. They are a protest that is
less mind-numbing than the facts. We don’t choose outcomes. We select
policies that speak for us. The winner becomes the person who initially
set the rules, but that isn’t “the will of the American people”.
It
was President Theodore Roosevelt who said, “Speak softly and carry a
big stick”. Can you hear what our government is not saying?
A Guadalajara Sunday Morning
Homeowners
swept the street in front of their home with a whisk broom. Our
factory was full of hundreds of millions of dollars’ worth of
automation. But there were parts of Mexico where the streets were
cobblestone and filled with potholes. Beggars with baby in knapsack
looked hungrily through the window as we consumed our evening meal. But
in our clean-room factory, workers wore spacesuits.
It
was one of the greatest achievements of mankind. Many of its “secrets”
are common to all semiconductor physics. American schools educated
their PHDs. If they did not know it now, they would learn it in a few
years. It was that way, because of economies of scale. Things that
seem the same can have deep manufacturing differences, such as
double-sided vertical instead of horizontal construction, and high power
instead of shrunk size. That renders them incompatible with the
modernity that stays in America.
In Phoenix, our product sat waiting shipment to customers. An American flag and the words, “Made in-America” covered
our shipping containers. But these products were diffused, assembled,
tested, and marked in Mexico. They used wafers manufactured in
multi-billion dollar factories located in Japan or Germany. They
received only an overnight bake in an oven in Phoenix, but this obeyed
regulations.
You
can hire as many as thirty foreign workers for the price of one
American. But when America has overseas factories, we profit from the
same low operating costs that foreign countries could ultimately use to
compete with us. It keeps it American. It grows goodwill and their
middle class.
When America Changed
The
outsourcing of jobs began helter-skelter in the mid 70’s, but no one
paid much attention. We want access to huge developing markets.
Ownership and control are important. But business did not take care of
America’s workers. It thought that cheaper prices for consumers would
be enough. It forgot about mergers, takeovers, acquisitions,
automation, unions declining, and extravagant pension promises that
could not be kept. Government did not take care of America’s students.
It forgot about vocational education, participation with industry, and
student loans. The despicable forgot about apprenticeships, retraining,
and investment. They thought that Social Security was their bank
account. They wanted freedom from responsibility for themselves, to
their fellow man, and to the world. They bit the hand that fed them.
Healthy Capitalism
Wouldn’t
it be great if workers shared in the ownership of the companies they
worked for? Economist Craig Richardson recorded images of Zimbabwe
before and after the Robert Mugabe’s land grab. Within four years,
communal properties had visibly declined in comparison to private
properties. When people own, they care. But they don’t know enough to
run the show without management. Modern high-technology companies
realize that this is not 1955. It’s called “Participative Management”
and “Profit Sharing”.
Cynical
capitalists used Darwin’s “survival of the fittest” to justify their
immense salaries and the poverty of their poor and obscure employees.
But Elizabeth Warren’s Accountable Capitalism Act would require large
companies to become responsible for their workers in addition to their
stockholders. Workers should get their fair share, but they are also
responsible for their future. “Corporations are people too”. Was this
the intent of the Founding Fathers?
Most
of us march to the beat of a different drummer. If we could plot a
distribution we would get a bell curve. Mathematicians know that this
is because human nature is imperfectly aiming at a target. It is a
consequence of our collective situation and the fact that we overlap
with each other. But Leviathan in politics skews the curve in an
abnormal way. It is about power, us versus them, winning, and not
people.
Ned Cross not Red Cross
Both
were humanitarians. Ned owned a famous bar near Falcon Field in Mesa
during the WWII area. The Red Cross did not take sides during the
war. They treated the wounded from either side. To do otherwise, would
confound their mission. Does America have a calling? Is it “no more
nice guy”? The world needs an accepted leader. Countries like China,
India, and Brazil are too focused on themselves to become economic
leaders. Should we cancel foreign aid as conservatives have long argued
for? Don’t we benefit when we help others? The more we learn to
understand each other the more we value others and ourselves.
Words More than the Deed
There
are those who prefer the simplicity of a dictator to an independent
administration with resources, authority, and the ability to do the
job.
Trump
threatened to punish countries doing business with Iran because that
reduces the effect of our sanctions. They will never again do business
with the United States! They must pay a price for not buying our
stuff! Forget about rewards for being a good customer! It misses the
point, when everything is reduced to a matter of economics, and when
people and countries are just a means to an end, coerced to do our
bidding. The proud, infatuated with their power, chastise. It’s quick
and easy, but punishment is soon forgotten.
Positive
reinforcement changes long-term behavior. The great French
mathematician Henri Poincare expressed that when he wrote that he, “…
does not study nature because it is useful; he studies it because he
delights in it.” Business embraced this when they changed their
employee review sheet from, “List everything that is wrong with the
employee” to instead discuss goals that were quantifiable and
agreeable. This gave a badly needed focus to the chaos of the
workplace. It will do the same for diplomacy.
Progress
may seem like destroying the Government Leviathan, but it should not
mean that the previous vanishes. There are flaws in every large
bureaucratic organization. Fractured groups are easily scattered.
Humpty Dumpty sat on Trump’s wall. Those with no regard for stability
caused his fall. Once splattered, he could not be put together again.
The Physics of Finance
Facts
exist because they are falsifiable, but have never been, even once.
For example, there is a relationship between power and energy, held
together by time. But physics gets in the way of psycho kinetics, the
human aura, and the soul. The law of supply and demand is different.
Its variables are never “realized”. There are many of them and they
interact, making seeing difficult if not impossible. The market place
is like a balloon, pushed in at one spot it bulges out in another.
There are unforeseen unpleasant consequences for tariffs and meddling
with the free market.
Economic Instability
Ninety
percent of the world’s countries undergo violent regime change a couple
of times per generation and they are poor. The most prosperous ten
percent have a median time of sixty years. The United States is the
world’s longest lasting regime, lasting from 1789 and it is rich.
Stability means prosperity.
Political
institutions are by far the strongest variable in determining a
country’s success. They include customs and rules and determine
motivation. A universal policy requires a common electorate, but
globally there is none. Fascists, who are least economically entangled,
uproot legal and democratic traditions and replace them with their own
self-interest. They do not minister to group needs.
Cutting
taxes is a good way to combat economic downturns, but America has
become a borrower nation and debts must be repaid. High taxes (for
everyone) raise prices, add to the cost of living, and discourage
production. Low taxes reduce prices and give us peace of mind. But
what is it that we are not investing in?
Republican Prudence
The
myth of Reagan’s tax cut, the Economic Recovery Act of 1981, stands in
the light of the seventies gas lines and twenty-one percent interest
rates. Its benefits particularly helped the wealthy. The economy
recovered, except for a recession in 1981 – 1982. A mountain of debt
resulted in the Tax Equity and Fiscal Responsibility Act, the Highway
Revenue Act of 1982, the payroll tax Social Security deal of 1983, the
Deficit Reduction Act of 1984, and the Tax Reform Act of 1986. We
changed from a society that saved to a credit card consumption driven
economy.
The
Treasury Department estimates that our government will need to borrow
$769 billion for the second half of 2018. It is the highest borrowing
estimate since the $1.1 trillion in the middle of the 2008 financial
crisis and it projects a 25% increase over the annual deficit in 2017.
The Trump Administration claims that economic growth, stemming from tax
cuts, will easily exceed the difference. Besides our Air Force, he
would create a “Space Force” and we would go to Mars. To further
stimulate the economy, Republicans are thinking about making the tax
cuts “permanent”. They would like to reduce capital gains taxes by
calculating them from an inflation compounded value. To increase
“stability”, big business would be allowed to abandon the traditional
quarterly report for a semi-annual one.
Sovereignty in Conflict
Many
Americans believe that big government is a greater threat than
terrorism. The irony is that those same people turn to government when
threatened. In 1802 Thomas Jefferson wrote, “I believe that banking
institutions are more dangerous to our liberties than standing armies.”
But our Federal Reserve System is charged with reducing the frequency
and severity of recessions. It is supposed to be independent of
politics. Trump has indicated that he wants to keep interest rates low
to stimulate the economy, but that risks inflation.
The Age of Instability
Domestic
politics always trumps international cooperation. Economics has become
political instead of scientific. The big issues: our environment,
free trade, and terrorism can be solved by no single nation. When more
countries participate, there are economies of scale, but a single
hold-out can stop progress.
Nationalism
promotes instability, but they say that if you want it done right, you
should do it yourself. The problem is that fast, good, and cheap are
mutually exclusive.
Economics
is all about “what if”. Its math suggests that we cannot fail. A
series of events, each improbable, are even less likely. But this
incorrectly assumes that events are independent. It ignores human
nature.
or
a while, it looked like the Secure Elections Act was the safest vote in
the Congress. It was introduced by Republican Senator James Lankford of
Oklahoma, nobody's idea of a liberal, and co-sponsored by Democrats
Kamala Harris of California and Amy Klobuchar of Minnesota, who are
practically everybody's idea of liberals.
vast majority — 70 percent — of Americans in a new poll supports
"Medicare for all," also known as a single-payer health-care system.
t
would start within minutes of special counsel Robert Mueller being
fired — a torrent of activity ricocheting through the halls of Congress
and over television airwaves, including nearly a thousand protests being
prepped from the Virgin Islands to Alaska.
