Tyranny of Stupid?

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Pondering is such sweet sorrow…

Aging and Motivation

So I’m back at Link TV. It’s a show about postponing aging… and I’m ponding that I’m out of inventory on my medical resveratrol elixir. (The “Three Wishes” Merlot from Whole Foods is rather nice for a $2 bottle…)

Sidebar: One of the featured researchers was a guy who swore on camera that he’d never work for a major pharmaceutical company… who’s company was then bought by Glaxo-Smithkline where he now works as an executive… They have just announced they are killing the primary drug that caused them to buy his company…

http://www.boston.com/business/healthcare/articles/2010/12/02/glaxo_halts_development_of_sirtriss_resveratrol/

Luckily, the natural stuff is still as close as a nice bottle of red. Per the same article:

Resveratrol, a compound found in red wine, switches on a class of proteins called sirtuins that may prevent gene mutations and repair DNA damage, potentially slowing the aging process.

But as is usual for me, the pondering doesn’t stop at the first bump in the road.

Part of the show explored the impact on society at large and the question of would a long life span cause folks to put more time into trying to improve the world, as they would spend more of their longer life in the improved one? Whereas now, by the time you could make things better, you have maybe 25 years left; and that pushes folks more toward greed and self aggrandisement.

Morality, Intelligence, Greed, and Governance

Lately we’ve had the Wikileaks event showing that the world of Global Governance and Diplomacy is a nest of snakes and vipers, all preening and pushing for power and control over each other, awash in bribe money.

Yet these folks are smart.

It’s been amply demonstrated that there are a great many very smart people who are not moral. History is in many cases a retelling of their tale.

It’s been amply demonstrated that there are a great many very smart people who are greedy. History again provides more than ample evidence of that. Greed is one of the “7 Deadly Sins” and is widely distributed. The whole of International Finance and Trade is dominated by Very Very smart people who are Very Very Greedy.

So I think it is a reasonable postulate that Greed, Morality and Intelligence are orthogonal traits. There is simply no correlation between them. There are greedy dumb people and greedy smart people. There are moral dumb people and moral smart people. And there are immoral dumb people, and immoral smart people.

Why does this matter? Yes, it’s an obvious thing to say about human nature, but it matters as soon as you think about Governance. (And in particular, the specter of Global Governance).

We want Moral, Intelligent, and Selfless government. Government is supposed to be there for US, not for it’s own personal gain.

Does the small intersection of moral, selfless, and intelligent people limit the nature of governance?

Just Not Enough Of Us

So we take the population and ask: If government is presently consuming between 1/3 and 1/2 the budget, are there 1/2 to 1/3 the population who are selfless, moral, and intelligent enough to “do right” by us?

I think the answer is a clear No.

If the traits are on a bell curve, you could have 1/4 of the population that would be well above median on each trait. But if the traits are randomly distributed, then the odds of one person having them all drop. And fast.

1/4 smarter than the herd. 1/4 of THEM of sound moral character. That’s 1/16 of the population. Then only 1/4 of that group would also be selfless and not greedy. 1/64. How can you make a stable government that is moral, selfless, and intelligent with that small a proportion of the population?

Yes, you can use “span of control” and “work rules” to limit the damage. That 1/64 might manage 10 times that many folks (who could be less smart, less moral, and greedy). But that still puts the limit at 1/6.4 or about 1/6 of the population. When Government is down at 1/10 the size of the private sector, you MIGHT have a shot at it. (But even then you are trying to attract the lions share of the smart, moral, and selfless folks to work for government, and we know that will not happen.)

The inevitable conclusion of this thought experiment is that Government must inevitably become stupid, greedy, and immoral when it becomes large. And we’ve not even added in such things as the degree to which our law schools select for greed and moral ambivalence in the folks that make up most of our politicians… who are excessively lawyers. Nor such character traits as power lust and sadistic tendencies that sporadically attract “great leaders” who do great harm ( From Pol Pot, Saddam and Kim Jong Il on the low end to Hitler and Stalin on the high end; clearly government disproportionately attracts the power hungry and sadistic.)

I suspect that this is the reason that the traditional US Government structure worked so well and for so long. The central power was very small, and very limited. Most power was at the local level, with only dribs and drabs “delegated upward”. But since about 1930 we’ve been slowly growing a monster government. IMHO, about 1970 it reached “critical mass of stupid” and started taking apart the balance wheels. (Nixon started doing the worst of it, IMHO. Took us off the gold standard. Had Watergate. Founded the EPA. Along with several other large stupidities. I’m just glad we finally got rid of the 55 mph speed limit that he started.)

So now we have a situation where the Government simply cannot be made of moral intelligent selfless people. There are not enough of us. And the folks who make up the highest management ranks are selected primarily from a pool that is pre-filtered and indoctrinated for moral ambivalence and greed, with a power hunger to boot. The only thing that has kept it working OK until now, IMHO, is that the structure had an inhibitory impact on the drift to collapse.

The Tyranny Of Stupid

So now we’re in a circumstance where the intelligent, but power hungry and “morally lacking” greedy, enter the management ranks of the government. Then they hire the less intelligent for the jobs of cranking the millstones of governance. From this is supposed to come good things…

The law makers have little to no technical knowledge of the things they decide. They often have little basis in history, nor of what societies have worked and which have failed. They are, first and foremost, knowledgeable about how to write laws and beg for money, with a minor in speech making and preening for the camera. An ideal mix for outside influences seeking greedy advantage with no moral compass. Thus the rise of the lobbyists.

This is simply a Tyranny Of Stupid. So we get crappy laws that do stupid things, administered by the less-than-bright-bulbs at the Bureau Of Stupid. For the benefit of the morally bankrupt and greedy but politically well connected. And with no way to effectively stop it.

The older form had it’s share of stupid and greedy, but they were set against each other in a competitive setting. Those private company organizations that failed to act smartly, died of the competition. Greed was OK, as it was offset by countervailing force from other market competitors. Power hunger was OK, as it lead to large industries, not global warfare and mass deaths. We did have to add a morality police function (via such things as the anti-monopoly laws) and they worked for a while. Then the monopolists learned how to use Big Government to hand them a golden monopoly on a platter… But with some policing on the issue of “moral compass”; we had enough folks who were intelligent and greedy (but in competition to make products), that in the end we did rather well.

But who is the moral compass for Government? Where is the “Internal Affairs” department for the Bureau Of Stupid? Who holds congress accountable for greed, power lust, or just plain stupidity?

We’ve reached the point where most of the population “gets something” it wants from government. For large companies, many (most?) of them expect that lobbyists will pay off more than marketing or engineers. Will those folks really vote the general welfare ahead of their personal gain? Are more than 51% of THEM at the intersection of moral, selfless, and smart enough to know it’s the best path in the long run? (Or going to live long enough to care about the long run?…)

In Conclusion

I’ve come to the rather dismal conclusion that we are living in a Tyranny Of Stupid. For a while, the original constitution and Bill Of Rights, written by a few selfless moral and intelligent men, has held off the laws of statistics. But with the growth of size and power of government, the decline of religion and our moral compasses at large, and with changes made via a few very ill thought out amendments, we’ve opened the doors to a “Government By the Immoral, Of and For The Stupid .”

In Europe, the process has run a different course, but with a similar outcome. The EU government is clearly not accountable and subject to external corruption. I won’t even begin on the UN. Everything we’ve seen has shown it to be the worst of the lot. Worse, I don’t see any way out of this mess other than watching it collapse (as all governments eventually do) and starting over. But that is likely to take another 100 years, and we don’t live long enough for that path …

I wonder if I can find a nice SMALL country somewhere (outside the EU) that would like a new polite, moral, intelligent, and selfless citizen? Offers welcome…

Perhaps if we all increased our resveratrol intake enough, the longer life span would help us see the wisdom of a longer term view? Or at least we might not feel the pain of the reality quite so much…

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
This entry was posted in Political Current Events, World Economics and tagged , . Bookmark the permalink.

38 Responses to Tyranny of Stupid?

  1. Ken McMurtrie says:

    You’ve done it again EM!
    Many thanks for your perception, your moral standards, your intelligence, your clear thinking and writing, and your willingness to share all this with us.
    I receive from you much encouragement and support towards my understanding about the world and its iniquities, inequalities, tyrannies and madness.

  2. You have great insight, EM!

    A few of us are trying to slow down or stop world tyranny, but we seem to be badly outnumbered.

    From personal experience, I know that our government has given us a lot of misinformation about the Sun and its dominant influence on Earth’s climate

    Jerry Clinton Oliver, a small town mayor in Oklahoma, shows the evils of a federal government tyranny in his book: “A Time to Stand” http://www.booksbyoliver.com/

    Eisenhower anticipated and warned us in 1961 about the danger that a government-funded “scientific-technological elite” might one day take control of public policy.

  3. Ken McMurtrie says:

    Can I ask a favour of you please EM?
    Maybe the answer to my question is to be found somewhere within my own research capabilities, but I am currently at a loss.
    There are very many countries in debt, some very seriously, eg. USA, Ireland, others in the EU.
    What is not clear to me is – which countries are not in debt and/or who are the creditors? Is the money owed to private financial institutions, most of which are themselves bankrupt, or does the IMF hold all the credit for these debts?
    A direct answer might be a bit of an ask, but maybe you can point me in the appropriate direction, please.

  4. E.M.Smith says:

    @Ken McMurtrie:

    What you are asking is “Who holds the debt?”

    That would be:

    China, Japan (as the two largest IIRC), Saudi Arabia, Kuwait, Qatar (and all the other oil states more or less).

    Honorable mention goes to places like Taiwan and South Korea, with small amounts held as “reserves” by governments all over the world. (The US Dollar and to a smaller extent the Euro are held to be the standards for acceptable reserves. So the national bank of Botswana can’t just hold their OWN currency, they have to hold some metals or a “Reserve Currency” which may be held in bonds…)

    After that, you get into life insurance companies and retirement funds. So look up Cal Pers (California Public Employees Retirement System) and you find a lot of national debt. Replicate that around the world across all retirement funds.

    Then you are off in the land of ‘small change’. Like a neighbors mother who liquidated a lot of her stocks in her retirment account and moved them into bonds 2 years back as the market collapsed. About $2 million worth. Spread over a a few hundred million folks world wide, that adds up…

    Substantially, you can consider Latin America and Africa to be irrelevant other than central bank holdings. Just too small. The “big lumps” are the oil states, the Asian Tigers, and the Developed West retirement funds.

  5. Tim Clark says:

    Ken, this site lists the debt of every country as a percent of gdp. E.M. can avow that you are not going to get on some cia list, as i recall he’s been on it.

    https://www.cia.gov/library/publications/the-world-factbook/

  6. Ken McMurtrie says:

    Many thanks EM!
    Sorry, one more question- where does the IMF fit in? It seems to be funding the loans to bankrupt countries like Ireland.
    Regards, Ken.

  7. Peter Offenhartz says:

    May I raise a small objection? You say ” If government is presently consuming between 1/3 and 1/2 the budget …”

    I believe in the USA government accounts for about 30% of GDP, which roughly breaks down as 20% federal, 5% state and 5% local.

    [ REPLY: I’d rather not get into “accounting wars” as it’s dreadfully dull, but your numbers are low. “Believe” is a poor accounting standard. For the Feds, we’ve got about a 14 Trillion GDP and 2010 will spend about 3.5 Trillion that is in the budget. That’s 25% right there. Then you’ve got all the “off budget” and “unfunded” stuff to cover. In a proper analysis, one would also need to include the ‘unfunded mandates’, not just to the State governments, but also things like mandating “backup cameras” on cars (coming soon). Yes, you pay for it when you buy the car, but it is no longer YOUR decision, it’s the Federal Government directing where part of the economy must spend money. By the time those are done, you get much higher. Then there is that minor matter of hiding things “off budget”, like, oh, the Post Office, and using quasi-non-government entities like The Federal Reserve Bank, Fanny Mae, Freddy Mac, and Sally Mae to direct how folks spend there money. I think you can see how this makes the number even more murky… but always larger.

    Per State, you can go through a similar set of games, with State unfunded mandates going at the counties, and a budget that’s never real (or on time in California…) and with a variety of other games to hide the reality.

    Is a chart of the grand total of all California State and Local expenditures from these folks:

    http://www.usgovernmentspending.com/downchart_gs.php?year=1992_2015&units=p&state=CA&chart=F0-statelocal&local=c

    where you will notice it hovers between 20% and 25% over at the right hand edge. (And this passes a sanity test or “smell test” in that the State has a 9%+ (varies by county and city) sales tax AND an 11% income tax, total of 20% right there. So making and spending gets nicked for about that much, and then there are property taxes, vehicle taxes, deficit spending, etc. so we’re ‘in the ballpark’)

    Now we’ve got 25% to 30% (being conservative about the size of off budget and mandates and unfunded and…) Federal and about 25% combined all State and Local. That’s 50% to 55% of GDP. But some states will not be as crazy as California, so allowing that they might only be, oh, 8%, would get you to a lower bound of 33% to 38%. That gives us our other bound.

    So on the low end, we’re at 1/3 and the high end 1/2. Gee, where have I heard those numbers before… -E.M.Smith ]

  8. Jason Calley says:

    How small a country are you looking for? It is a good thing to ponder… During the decline of Rome, I guess that Capri was the smart place to be, at least until Constantinople came along. As far as current candidates go, I keep seeing nice reports about Uruguay. As for me, I plan on staying here in the US, but NOT near a big city. I am thinking somewhere farther in the woods. :) No place is ever completely safe, but I think that if one at least stays away from the areas where the big guys will want to fight with each other, things might be simpler. Look for an area that is poor, one that is NOT considered sophisticated or trendy. Get a place that has good soil and water in an area otherwise undesirable by the country club set. Most importantly, do not insult or look down on the local “hicks.” They may not have a degree, but they probably have more mother-wit than you do, and they most definitely are NOT domesticated humans.

    Ken, as for the IMF, I picture them as sort of the drug pusher that moves into neighborhoods to open up new markets. They arrange the initial loans to various unethical political leaders. The loans are supposedly to build national infrastructure, but actually go into the politician’s pockets. When the loans come due, the politicians pledge control of, or cheap access to, national resources — things like mining rights or water rights. The cheap resources go to the multinational corporations, then part of the profits go to the bankers and the First World politicians who control the IMF.

    Now that the IMF routine has been perfected on Third World countries, it is our turn here in the USA and in the EU to be unwilling dance partners.

    Just my opinions, and I have certainly been wrong before.

  9. GregO says:

    Chiefio,

    Interesting and prescient post. I’ve always been interested in governing, government, and history and with 26 years in the military, and currently owning a business, I suppose I am a person who has been in charge of other people the better part of my life – not my driving choice – I’m a creative guy – but it just always seems to turn out with me in charge.

    I have noticed throughout my professional life that there seems to be a type of person who wants to direct others as their primary driving motivation. Many of these people are absolutely devoid of morality or human conscious. Sure you have Hitlers and Stalins but there are countless petty tyrant government officials and soulless corporate managers and all kinds of power-freaks and criminals in all walks of life.

    And then there are idiots. I mean, does Barbara Boxer rate as evil?

    Anyhow, I guess my point is that there are a lot of people in this world – not many of them rate at your level of intelligence and accomplishment – and many of them just need a place to go during the day and they need something to do, and something to give their life meaning. To me, that spells work and service. What to do with all these people?

    So we have to get organized and get everyone to their places and get busy. To me, that place to go to get busy and organized is the family, the family or private farm, or small business or family business, or Church. At one time those were the centers of activity in America.

    Chiefio, it’s so different than that now; but nothing has really changed. And we put faith in a level of organization far removed from our daily life – national government. Wow. “Jo-Jo get back to where you once belonged” as the song says.

    Getting away from our roots is a formula for disaster – we do need government – but a small government that rules lightly. Civic order has to come from local authorities; ideally starting from the father and mother of the family and working up though local authorities – not starting from the top and working down.

    Don’t give up hope on the American system though. We have it good here. It is possible to do great things within this system and take care of people in the process. Never forget that. This is a unique place. Just read history and read the paper. America is still the greatest country for free men and women the world has ever known and our story has yet to be written.

    Along the lines of ruling and government, you may enjoy a book I found very entertaining outlining governing and government and the games of power in general. It was written by a scholar in the classics:

    “The 48 Laws of Power” by Robert Greene.

  10. Ken McMurtrie says:

    Thanks Jason, re IMF. An interesting assessment. Whatever their role, it is certainly not in the interests of the public.
    @GregO, your optimism in your country’s future is commendable, but may be misplaced. I think that is partly the trouble, that the citizens can’t believe how the leaders, military, CIA, financiers, can actually be so rotten and so bad for the country. Hopefully, for your sake, I am wrong.

  11. Baa Humbug says:

    Excellent thought provoking read, thankyou EM

    A thought on big govt. Would it be fair to say that the more we know and do, the bigger govt gets via new laws rules and regulations.
    A mentor of mine once said Australian laws were once held within just a few volumes, now we need a small warehouse to house the volumes.

    But is it big govt per se the problem or the concentration of power in a central govt?
    Here in Oz, our local councils and state govts used to have a lot more power than they do now. Some talented people used to hold office in these juristictions.
    But now the “main game” is in federal politics. We don’t seem to attract talented people to the sphere of politics that is closest to the people.

    So in essence, we could have “large govt” as a whole, but its power base needs to be spread closer to the coal face, nearer the people.
    Especially in geographically large and diverse countries like Oz, US and Canada.
    People in Darwin and Perth feel too far removed from the capitol Canberra, and with powerless local and state govts, feel helpless to do anything about their problems.

    p.s. regards the stats about the selfless, moral and intelligent, we may need to allow a discount factor for those who are moral selfless and intelligent, who get elected on that platform but within a short time are assimilated into the ‘system’ and become just another politician.

    regards

    O.(oggi) Tandogac

  12. GregO says:

    Ken McMurtie,

    Thank you for your fine points.

    Yes, unfortunately we here in the U.S. find ourselves beholden to a central government firmly in the hands of sociopaths. It is sad.

    There are well-meaning souls (tea party anyone?) but American people are dreamers, idealists, farmers and merchants and not particularly wise to the wiles of central governments. I mean with all of America’s wealth and virtue (and there is American virtue) why we continue to tolerate our gvts obvious incompetence and criminality is puzzling.

    But we did vote out Bush and the Republicans largely IMHO for the utterly foolish middle east and central Asian wars and stupidity in general; and we did vote out the worst of the lefties that replaced them in the following election.

    But in America there still is the possibility of functioning on the local-level somewhat isolated from the center. And here I am in concert with Baa Humbug.

    All of us need to take responsibility on the local-level starting with the family and working up to local government and local education.

  13. a jones says:

    If you are genuinely serious you could consider the Isle of Man. We are not part of the UK or belong to the EU although we have treaties with them.

    The climate is not quite that of California but is pretty temperate. You would have to apply thru the British consul or embassy altho you can find all the details you need on the IOMG websties.

    We are quite small, 75000 alcoholics cling to a rock in the middle of the Irish sea as the joke goes, and if you wish to maintain US citizenship you will need to pay your taxes there, as well as in the IoM: but there are double taxation reliefs.

    Many US citizens resident here also naturalise, 5 years, and obtain IOM passports for convenience because it gives complete travel and settlement rights within the EU. I understand this is permissable under US law.

    So there you have it.

    Kindest Regards

  14. Pascvaks says:

    “All that is necessary for the triumph of evil is that good men do nothing.” Edmund Burke

    While the difficulty of getting good people in government is one of those constant headaches, and while I agree with nearly everything you say, I feel there are others flys in the ointment and that a big one is “motivation” on the part of the part of “We The People”. The willingness to get involed, to roll up one’s sleeves, to get our hands dirty. Willingness tends to rise with temper. Tempers tend to rise with the level of incompetence and unchecked greed and curruption. The Tea Party Types got mad, they’re still mad, I see nothing that’s likely to sooth they ruffeled feathers in the near term. “To everything there is a season and a time for every purpose under heaven”, life’s a beach, always changing, always the same. When people get motivated they can move mountains, or the whole damn beach.

  15. Great post!…however, those “stupid tyrants” are but only employees, or rather more properly, servants of the “intelligent greedy” ones.
    If you dig a little deeper, as you began with an example from the pharmaceutical industry, you will begin to wonder why in the last 20 years, this area of the industry, and others too, witnessed a total change in the ownership of these, where they became owned, every time by smaller group of people. The question arises if all these were operations, in the end, financed with money produced “out of thin air”.
    Could have this so happened?
    If you buy, say a chocolate, anywhere in the world, even in that “nice SMALL country somewhere”, you will find that it has been produced by the same company.
    But let’s get back to history, to ask: When did it all this begin?, Who were the intellectual authors of this successful international business?, Did it begin with the fall of monarchies and will it end with the fall of the independent states?

  16. The incomprehensible dimension of all this is that, being the owners of the world or taking all the real money from us, hardworking people, can produce, won’t make them happier or make them immortal. Thus this endeavor is crazy, as it is a crazy endeavor that of the CANCER CELLS WHICH, WHILE TRYING TO OBTAIN TOTAL CONTROL OF THE BODY, KILL IT AND KILL THEMSELVES.
    Thus, those INTELLIGENT GREEDY, finally become, THE FOOLISHLY GREEDY.

  17. Larry Geiger says:

    Everyone rises to their own leve of incompetence.

    Every system accretes junk until it collapses.

    We don’t know how to prune. As individuals, as small groups and as large groups we just keep on accreteing stuff. We accrete stuff individually. We accrete stuff and interactions as small groups. We accrete laws and bureaucrats as large groups. We just aren’t good at pruning.

    Software is a great analogy. All software accretes junk until it becomes unusable and unmaintainable. It becomes “unfixable”. It must be scrapped and we start over.

    Yet, how to we do this with people and systems and institutions? Usually we have a war, kill off a bunch of them, wipe out a bunch of old physical stuff (buildings, walls, etc) and start over.

    Term limits are good things. Requiring balanced budgets is a good thing (for everyone, and all governing entities). Laws that expire are good things (I think that almost all laws should have an expiration date). Bureaucrats should have expiration dates (term limits :-) )

    The universe is designed in such a way as to prevent stability and equilibrium. Change is often violent.

  18. @Larry Geiger

    Good point that of yours, but, would it surprise you finding the same “bugs” in every new software you try?

  19. @Larry Geige
    The universe is designed in such a way as to prevent stability and equilibrium. Change is often violent.
    You are right in this too: Even Neutrons are not absolutely neutral. Anything neutral is dead, and as such, it begins to readily decompose.
    http://www.scribd.com/doc/43332150/Unified-Field-Explained-9

  20. Pascvaks says:

    Here’s another for the analogy pile – great nations are like great tectonic plates on the Earth’s surface (isn’t it funny how well this generally fits reality), over time they press together, pressures build up, and eventually there’s a tremendious release of energy and heat. Then things cool off for a while and the process continues. Nations are like people too (really they are) and sometimes they rub each other the wrong way.
    __________________
    Ref : Adolfo Giurfa
    “Great post!…however, those “stupid tyrants” are but only employees, or rather more properly, servants of the “intelligent greedy” ones.”..

    I thought the “intelligent greedy” ones were the “stupid tyrants” –there’s more to life than money;-)

  21. E.M.Smith says:

    @Tim Clark:

    Yes, I’ve used the CIA Factbook site. But then again, I’m sure I’m on a list at their site. After 911 I sent them a resume and asked if they needed any computer guys… they were so flooded with folks wanting to ‘help’ that they didn’t want me. But I’m sure that got me on some kind of list or other. (Though the web site is pretty clean).

    @Ken McMurtrie:

    I’m presenting the more “traditional” view of the IMF, but have no complaints with the view of Jason Calley. The IMF operations are sometimes / often “murky”…

    Per the IMF: You can think of it as The Fed for super-national operations. So when a local bank has a run on the bank, they can go to The Fed and ask for a loan, at very low rates, to cover the run. Sometimes The Fed will say “Yes, but”… you may have to offer collateral, or sell something, or get your ‘reserves’ up within some amount of time. And if you don’t, they can “take your toys’…

    So now lets say a “little country” like Bolivia is having trouble because nobody wants Bolivianos right now.

    http://en.wikipedia.org/wiki/Bolivian_boliviano

    perhaps there was a coup or just an election of a Socialist who’s promised to raid the Central Bank piggy bank to pay for national health care (oh, wait, that’s the USA… ;-)

    It’s pretty clear they won’t have the money to pay for it, so the currency is going to be inflated and folks grab their money and put it somewhere else. This is disruptive.

    So Bolivia will have it’s central bank try to shop around the world for folks who will loan them money. Maybe China or Japan. But if that doesn’t work (sales of government bonds don’t go well, kind of like the last California bond sales…) what’s a country to do? Rather like California, they can’t just go to The Fed discount window and pick up a bailout loan.

    So the IMF was invented as a sort of a Central Bankers Central Bank. Bolivia goes to the IMF and asks for a pot of money, pretty please. Preferably all those nice Yankee Dollars and Euros that the folks are demanding as they turn in their Bolivianos and make a large currency exchange imbalance. And the IMF gives it to them.

    But…

    The IMF is largely funded by the USA, Japan, Europe (and some others) and traditionally has had a desire to get it’s money back. So they attach a load of ‘requirements’ to the loans. That’s where a lot of the controversy comes from.

    They may demand sales of Government Enterprises (like mines, or telephone companies, or as we’re doing in California, selling our State Buildings to lease them back… often funded by an original IMF development loan) or they may demand various “austerity” programs (like telling Greece they can have a loan as long as it doesn’t go to pay pensions for government workers retiring at 55 to go play on the beaches). Typically telling the Socialist Beggar to dump some of their Socialist Goals… or no cookies.

    The reason is pretty simple. “Eventually you run out of other peoples’ money to spend” per Maggy. And the IMF does not want to run out of ITS money, so tells the Beggar that they have run out of their own money, so time to sober up and get a job, or sell that Fender Classic Guitar.

    This is seen in the Socialist circles of the world as “Evil Western Imperialism”. And maybe it is. We’re buying their soul for lucre. Maybe it would be better to simply let them run smack into the reality of “No Money Left” and collapse, have a revolution and a couple of wars, maybe be taken out by a neighbor with more money to feed their army. No more Western Imperialism, just some local instability.

    I’d be willing to give it a try.

    Then again, I’m much more open to letting folks learn the hard way…

    OK, so that’s the IMF. What does that have to do with the “Financial Crisis”? Do they “own the debt”?

    Typically, no. They have a giant pot of gold (“contributed” by the founding countries with a major chunk of it being from the USA. What? You didn’t know our government was happy to give away our gold? Silly rabbit…) and a giant pot of “reserve currencies” (with another major part “contributed” by the USA… but who cares about that, we just print up more dead presidents on pretty paper…)

    Not a lot of mortgages or bonds there… BUT…

    As they lean on help various country central banks, they may accept collateral that consists of all sorts of assets. Some of the mortgage debt or national bonds of places like Ireland can end up in the mix. (Though realize that as a lender to a central bank, that central bank very well could / will own a chunk of those questionable assets.) As of 1999 the biggest borrowers were Russia and Indonesia per this link:

    http://www.house.gov/jec/imf/gold/gold.htm

    so not much Ireland… But why Russia and Indonesia, both with a load of oil, are borrowing from the IMF is an interesting question… The IMF also can make loans to countries if they think it’s a decent investment in growth. My suspicion would be that they both picked up some money to build out oil fields, but who knows. You can find a whole lot more about the IMF and world money balances here:

    http://www.imf.org/external/pubs/ft/bop/2009/ar/bopcom09.pdf

    with the site map here:

    http://www.imf.org/external/sitemap.htm

    Oh, and note that the “World Development Bank” also makes loans to the world but tends to loan more to smaller 3rd worlders that are just going to spend the money, largely on questionable schemes. So it isn’t really a “bank” in the financial sense of the IMF… that isn’t really a “bank” either, in the traditional local sense… Hope that makes it all very clear ;-)

  22. E.M.Smith says:

    @GregO: I’ve not given up on the USA … yet… Just shopping a bit ;-)

    Yes, I’ve seen the same folks you’ve seen. The empty suits and the clueless. The power hungry wolves looking for political games to play. Amazes me sometimes how we make organizations that work out of such folks… as long as the percentage is low enough.

    And yes, pulling power back to the local area is important. There were also a slew of Governors replaced this last election. Most amusing is the discussion among the States of having a minor constitutional convention and taking back THEIR Senatorial rights… Now THAT would be a big improvement!

    @Baa Humbug:

    Ah, yes, the “loss of morals” that comes from immersion in the swamp… Frankly, dumping the ‘seniority’ rules in the Senate and House would help a lot here as the “junior” members would not have to “kiss ass and wait” and thus get indoctrinated into the slime pit…

    @a jones:

    So, does IoM need any computer guys or folks with a financial bent? I can get an Irish passport pretty easy (already qualify), so can go where the EU passport is recognized pretty easy. IIRC, it’s also a British Commonwealth, and they let you wander around some too… Probably ought to do that before the rules change again ;-)

    But I’d be happy to join folks at a party on the rock… sounds like you’ve got a pretty good handle on how close (and how far away) to relate with the UK and EU.

    Though I’ll have to look into what grows there… Probably not a lot of Avocados and Citrus ;-)

    And yes, I’m seriously considering where to go. At a minimum, out of California. With Governor Moonbeam Redux it’s not going to make it. Then at the USA National Level, things are, er, “In Flux” but the long term trend has been very much the wrong way. Take a look at the demographics, then intersect that with the growth of medical and retirement entitlements. 10 years we hit a very very hard wall. (Oh, and last I looked, a US Expat got a ‘free pass’ on about $75k, of income per year. I’m ‘good with that’. And you can dump your USA citizenship, but still get to pay taxes for something like 10 years anyway. One of the few places in the world like that. I think it was Eritrea? was the other one. Tax slave for life…)

    So far it’s Florida, maybe Texas; then a couple of ‘typical’ Latin American havens, then the Ireland / EU / British Commonwealth set of things to explore.. for example I THINK that gets me into both French Guiana and Guiana in South America and a bunch of misc Islands around the world… more homework…)

    @Adolfo:

    Part of it is that folks are fascinated with “economies of scale” as a justification to gain power. They forget that there are also “DIS-economies of scale” and not all things are better when bigger. Yet the big things grow until they have past the peak and slid down the diseconomies side to the point where the balance against new small competitors. Then they go to the government and ask for more laws to “regulate” that make it harder for small enterprises to compete…

    @larry Geiger:

    I like Heinlein’s approach: Have one house of government who’s only duty is to REMOVE laws.

  23. Larry Geiger says:

    “I like Heinlein’s approach: Have one house of government who’s only duty is to REMOVE laws.”

    I had forgotten that! Heinlein was so long ago (junior high). Speaking of that era, though, what we really need is some Retief. A hero for the ages! To paraphrase: Everything I learned about bureaucracy, I learned from Retief.

  24. Peter Offenhartz says:

    Chief, you are right once again. I went to usgovernmentspending.com and found that total local, state and federal government spending amounts to $19,656 per capita (2009 data), which works out to almost exactly 40% of GDP. I had not realized how rapidly govt spending had increased in recent years. Thanks!

  25. dougie says:

    @ a jones

    nice to hear from another resident @ chiefio’s

    “So, does IoM need any computer guys or folks with a financial bent?”

    yes, we (IOM) have a big financial sector, need your/chiefio input to bring common sense to it (-:

    ps. originally from Scotland, which is experiencing the worst bout of CAGW for many years (last time I saw it this bad was 1970’s).

    BBC news skips over it like it’s nothing, but that’s another thread/story.

    keep up the good work chief

  26. Ed Forbes says:

    ok…now you have done it.

    I was feeling pretty good until I read this post.

    Holds together MUCH to well for my peace of mind.

  27. Ken McMurtrie says:

    EM. Thanks heaps for your IMF assessment.
    Re their own financing, I was a bit worried when you included the US as a major fund source, what with their printing money to fund everything else, but relaxed a bit when you mentioned GOLD.
    A major question remains – WHO are the IMF?
    Who are the directors?, what is their agenda?, where are they leading us?
    It is particularly worrying that they impose crippling requirements on countries that owe them money.
    Going out on a limb – are they influencing debtor countries who are involved in providing surface temperature records to compute global averages?
    Really appreciate your work and insights!

  28. E.M.Smith says:

    @Ed Forbes:

    Glad I could help quell your manic phase ;-)

    @Ken McMurtrie:

    All the details (who runs it, directors, etc.) are at their web site in the link provided above (site map). I don’t think they care at all about Global Warming (I’ve seen no evidence of it, but probably bears watching). Near as I can tell they are unrelated to any thermometer issues. Putting them at airports looks to account for most of the issue, then thinking that “grid / box anomalies” can fix that data splice hides it.

    @dougie:

    Well, I guess I’ll have to look into IoM job web sites ;-)

  29. E.M.Smith says:

    Hmmm…. Looks like someone else has noticed, and just a day after me:

    http://eureferendum.blogspot.com/2010/12/tidal-wave-of-stupidity.html

  30. a jones says:

    To answer your questions about the IoM.

    If you are entitled to an Irish passport and obtain one you may travel freely thru the EU and may also settle in the IoM if you please and be entered on the Electoral roll which entitles you to vote in both local and government elections.

    The IoM is a tax haven but apart from banking also has other major industries such as shipping, aerospace and so on. It also has a considerable IT sector supporting these.

    However unless you work for yourself you would require a work permit for the first five years: usually employers arrange this.

    You are liable to pay tax to IOMG. altho this is quite low by EU standards and as I understand the US 75K covers their oppressive regime.

    As with anywhere some costs of living are cheap and others expensive.

    You will also required to pay into the IoM social security fund which is a fully funded from contributions insurance scheme which entitles you to all medical treatment: and depending on your contribution a pension.

    There are other matters you may wish to consider.

    If you are serious then i am happy to offer you introductions.

    As for citrus etc. I am afraid we are a little too cold for that: how about a nice parsnip?

    Kindest Regards

  31. BlueIce2HotSea says:

    @E.M.Smith

    Substitute ‘envy’ or ‘avariciousness’ for ‘greed’ and I am on board 100%.

    The virtues of greed have been defamed by those with a preference for confiscating wealth vs. creating it. Remember, it was the ‘greedy’ French and English capitalists that expanded their business into a land of peasants, which as a result, became modern Germany.

    There are some countries friendly to American retirees where a little money goes a looong way. But IMO, best not to make a big noise about it before making the big move…

  32. E.M.Smith says:

    @BlueIce2HotSea: Either greed of avarice works for me. Envy? I suppose that would work.

    @a jones: I have parsnips growing in my back yard as I type. I LOVE parsnips. Bit of butter, salt and pepper…

    I’ll have to start the Irish Passport process (for any of several reasons, including that the spouse wants to visit there…). If the spousal experience is a guide, I’ve got between 6 months and a year before it completes. Then again, probably not nearly as many folks trying to get into the Celtic Tiger economy now that it’s having a bit of a lie down…

    Am I serious? Hmmm… I think the answer is “Yes, but”. I’m serious about leaving California. I’m serious about making a major change in my life. (I’m a lover of change, and I’ve been in the same house for over 1/4 century. It’s driving me nuts to be so static…). I’m serious about doing something productive with a company again.

    The “but” part: But the spouse is less ambitious (though has said ‘will go’) and I’m not sure if it would be a ‘forever’ change or just a ‘for a few years’ thing. I’d be thrilled to work in a small island nation for 5 or 6 years; but then might get wanderlust and want to do another ‘change up’… and it’s likely to be a year before I could implement (as the process can be very slow).

    At the end of all that thinking out loud, I think the answer is “Yes, I’m serious. But I’ve got some homework to do over the next several months. Passport. Background preparations.” Pay last installment of last kids college tuition ;-)

    Oh, and I’ve got to do a bit of research on what fields are hiring whom and what licenses and qualifications are needed. Probably not a lot of call for “blogger – self taught” ;-)

    So give me a bit of research time and I’ll contact via email.

    Wonder if there’s a “teach yourself Manx Gaelic” download…

    (At one time I looked at both Irish and Scots Gaelic. Interesting languages, but the orthography is a pain. It’s a hole I’ve wanted to fill for a while, to be able to ‘get by’ in some form of Gaelic… but other things keep taking the time away.)

  33. E. M. – May I suggest SE Missouri near the Mississippi River?

    We love it here, and it may be relatively safe as Western governments collapse from self-inflicted wounds.

    “Western science and Western forms of government face a self-inflicted crisis: Loss of public confidence caused by unbridled greed and selfishness and by the abuse of federal science as a tool of propaganda.” [Sky Dragon Slayers, Chapter 2, opening sentence, 2010]

    http://www.slayingtheskydragon.com

    In my opinion, it is no mere coincidence that the collapse of constitutional government has been accompanied by the growth of unintelligible, bombastic, gobbledygook science.

    It is the way our government-funded “scientific-technological elite” communicates that the people are too ignorant to be in charge of government, as former President Eisenhower warned in his farewell address on 17 Jan 1961 (See video above).

    Official jargon, and irrational, nonsensical science are made by the “scientific-technological elite” and repeated by those who wish to appear knowledgeable about Anthropologic Global Warming (AGW), Quarks, Gluons, God Particles, Axions, Dark Energy, Dark Matter, multi-Universes, etc., ad infinitum.

    Many have realized the tyrannical government climate science community violated the basic principles of science.

    The mayor of a small town in Oklahoma, Jerry Clinton Oliver, encountered tyrannical EPA “science” that threatened to close down the town’s water supply.

    http://www.booksbyoliver.com/

    This brief video introduces decades of distortions by tyrannical space scientists of experimental data on the Sun’s:

    a.) Origin; b.) Composition; and c.) Source of energy

    With kind regards,
    Oliver K. Manuel
    Former NASA Principal
    Investigator for Apollo
    http://www.omatumr.com/

  34. dougie says:

    if you ever end up in my neck off the woods, ie. the isle of man – would love to to meet up (ps. talk scottish with no Scots Gaelic). ye ken lad.

  35. E.M.Smith says:

    I once hired a Scot who had a speaking impediment… wait, that’s redundant ;-)

    No, really. A bit of a stutter and talked very fast ( was very bright with Ph.D. AND common sense).

    The staffing company rep wanted to attend the interview (very odd here) but I let her. Turned out the guy had had “trouble” with a couple of other interviews as some folks didn’t understand him. She’d “translated”.

    Well, took me about 2 minutes to “latch on” to the cadence, another one to detect and remove the stutter artifacts, then aboot a we dram mor’ t’ get the moood ‘o i’tall. Hit if off grand.

    Worked together for several years.

    Nope, no problem with Scottish, Scots nor Scotch (other than having too little of all about…)

    I’ll almost certainly make it over (spouse insisting on a Europe vacation, me interested in all things Celtic). The only question is how long I say…

  36. a jones says:

    Fine. Any questions drop me an email.

    Kindest Regards.

  37. Jason Calley says:

    I find this to be a thought provoking post about the ethical justification for “running away” from one’s country.
    http://www.sovereignman.com/expat/lessons-from-the-fall-of-rome/

    RE “I like Heinlein’s approach: Have one house of government who’s only duty is to REMOVE laws.” Robert Heinlein — through his books — was (thank goodness!) probably a larger influence on me than my parents. Somewhere packed away in a box I have a photo of a tall skinny hippy guy (that would be ME!) standing next to Heinlein at a sci-fi convention.

  38. E.M.Smith says:

    @Jason Calley:

    My family has an “odd tradition” in that we’ve been rather frequent “movers”. Why? Probably selection bias in the sample…. I live where the “Western Expansion” ran out of room to go any further.

    But in any case, rather like the Goths / Ostrogoths / Visigoths that started in the steppes of Asia, crossed all of Europe, and ended up in North Africa; my people have tended to wander.

    It’s also quite likely that we’re the ones, as in the article you referenced, who simply got fed up first and said “it’s not worth it to stay where things are collapsing”. The intersection of bravery with intelligence and risk taking, seasoned with crankiness. Or maybe we just like to move.

    I, personally, have seasonal wanderlust. Spring and Fall I want to MOVE. Go somewhere. Get on the road. Furthermore, every decade or so I want a major “change up”. It’s been a bit difficult being in one place for 25 years (though I’ve coped. Partly by being an “on the road” consultant for a decade in the middle with “gigs” as far away as Florida…)

    On my Mother’s side, we’ve got a couple of generations of sailors (themselves derived of Vikings). Covered the whole world. One relative (Granddad’s brother) changed home port from England to Australia (so there are a bunch of Sumners in Australia who are related). On my Dad’s side we’ve also got a history of moving. One line from Germany (via Switzerland) to the USA. Then drifting across the USA as the Amish spread out. The other line came over in the Potato Famine. (But those Irish originated in the Iberian Peninsula before that as the Iberian Celts moved out and found Ireland). The two lines met in Iowa / Ohio. Then my Dad visited England (courtesy of Uncle Sam in W.W.II) got married (just before getting to drive a truck across France and into Germany). The two of them landed back in Iowa, then moved to California.

    OK, see a pattern here?

    We’re a people that moves around a lot. Goes places. Sees things. Doesn’t do well anchored in one place and moulding…

    So it’s not so much that I’ve a strong desire to “run away from” my country. It’s more that I need to run. This way. That way. Over there. Then maybe back again. Of course, if it’s getting crummy here, just that more reason to move on.

    Heck I’ve thought of getting a job that puts me shuttling around the world as a ‘coordinator’ of {whatever} just to satisfy the need.

    What did I do just a month ago? Drove from California to Florida. Then flew back. Now I can “sit” for a few more months, maybe, and not get too antsy…

    Thus the apparent ambivalence about what country to “run away to”. Uruguay? Isle Of Mann? Ireland? New Caledonia? Puerto Rico? Hey, they ALL are “new” to me so all call to me… New foods. New languages and accents. New places to map. New challenges of all sorts.

    (I’ve a built in “map” function and learn a “new” area rapidly. The process of “mapping” is pleasant and mildly compulsive. I’ve noticed the same thing in my rabbits, so it’s an ancient trait. Change the location of things in the yard, and the bunnies walk the area, re-writing their map. When something goes “bump”, then they can run full speed away and often TOWARD an obstacle, dodging at just the right times per The Map… while the predator reacts just a fraction late and hits the obstacle.)

    Yeah, different from most.

    Most folks never leave their local area, especially in “The Old Country’.

    But I’ve got a few thousand years of selective pressure in my ancestry for those who ‘moved’. And moved again.

    OK, with that said:

    I’m quite happy to look at where things are likely to be to my advantage in picking a place to go. Leaving a place that has a $250,000 debt per head and going to somewhere with much less. Leaving a place that is in decline and going somewhere that’s not declining. Rather like the folks in the article who say “Looks better over there and this place is going to Hell in a Handbasket. Gotta go.”. So I agree with them. But have an added bit.

    At any rate, I’m ‘itchy to move’. But I also know that after a few years in ‘the new place’ I’m likely to be ‘itchy to move’ again… I don’t see that as a driver for the decision… but more a trigger to the act.

    Sidebar 1:

    I think this is an artifact of being Borderline Aspe. The need for constant new data to absorb. The “suck in a whole new encyclopedia” function demands to be fed, and this is another way to feed it. At one time I joined a database consulting company on a platform where I had no knowledge. Read the 12 volume manual set cover to cover, learned JCL and 2 new computer languages; over about a month elapsed time. Then became a “senior consultant” on the product… A few years ago, I knew NOTHING about Global Warming other than thinking it would be interesting to find out ‘what caused it’. Now I’ve absorbed a huge amount about it (and found it’s not happening).

    But the Hungry Mind always demands to be fed more… and one way to do that is overwhelm it with the change of a new and completely different place. To the extent that trait is correlated and heritable, one might well have a selective pressure that lands a bunch of us in the same place at the edge of the diffusion band. As I look around Sillycon Valley at the number of Aspe and Near Aspe folks (who dominate in Geekdom) I see some merit to that thesis…

    Sidebar2 – New Rome:

    So is the USA the Next Rome preparing to fall? Sadly, it fits all the pattern Just Fine. (And I’ve a darned good pattern matcher…)

    However:

    The EU is actually closer. It already has recreated the Old Roman Empire. It has a central authority that is now answerable to no one, lacking only an Emperor. It is rapidly eroding liberties and growing central power. And it is rebuilding the Police State that was the nature of the Old Roman Empire (but this time with cameras and computers making it all the more efficient).

    So I suspect that Europe will become New Rome first, then collapse and fall into ruin first (simply because the USA tends to lag Europe by a significant degree and that lag is amplified by our Bible Belt Heartland that will act as a significant drag on centralization and change; oh, and that 2 or 3 guns per person doesn’t hurt either ;-)

    But such things are slow. I give it another 40 to 100 years. So I’d tell my kids to move to somewhere other than the EU, but I’d be happy to live there myself. I’ve probably only got about 20 years max left. So I can be “all done” before things get too horrid. Besides, odds are that in 10 years I’d be moving somewhere else again anyway.

    Where would I send the kids? Probably Latin America. They are still interested in the Joy of Living and understand that this life is not a dress rehearsal: take big bites! Brazil and Chile as first picks (with too little information to properly make the decision..) Pacific Islands including New Zealand right behind. Yeah, I know, Kiwi’s are headed down the EuroSocialist path too. But they are far enough away from everything that they can watch the collapse from afar, learn from it, and move on in time. Basically, it’s the “duck and cover” option. So far from everywhere that they don’t get whacked by what’s going to happen in Eurasia…

    And my ‘mental model’ says Eurasia is going to be making a whole lot of “interesting” history in the coming decades. It’s not stable. Never has been stable. Never will be stable. And the nuttiest folks are getting nukes.

    The New Rome is going to “go ballistic” when that blows up, which will drag in Russia, which will have China chime in… that will cause India and Pakistan to flair… When the New Rome is finding the old Germania and Britannia covered in snow and ice with food shortages in Gaul, well, we know where that leads. Toss in a Huns and Mongols moment and up she goes…

    FWIW, I think that is most likely NOT going to happen any time soon. I’d give it about 2030 or so. It’s also possible that folks could see where they are headed and change directions. Build a load of nuclear power plants. Develop more greenhouse growing. Defang the nut cases. Voluntarily devolve self determination and liberty back to the people. I just don’t see that happening since it never has.

    Thus the “Southern Hemisphere and Far Away” solution for “the kids”.

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