Pertinent Quotes from Thomas Jefferson

"When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe ."
— Thomas Jefferson

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."
— Thomas Jefferson

"It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world."
— Thomas Jefferson

"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them."
— Thomas Jefferson

"My reading of history convinces me that most bad government results from too much government."
— Thomas Jefferson

"No free man shall ever be debarred the use of arms."
— Thomas Jefferson

"The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government."
— Thomas Jefferson

"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."
— Thomas Jefferson

"To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical."
— Thomas Jefferson

Thomas Jefferson said in 1802:

"I believe that banking institutions are more dangerous to our liberties than standing armies.

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property – until their children wake-up homeless on the continent their fathers conquered."

Using Energy Policy to Reduce the Deficit and Fix the Infrastructure

John Mauldin at Thoughts from the Frontline describes a plan to reduce oil imports and the budget deficit while repairing our aging infrastructure.

The mood in the country, if not in Washington (at least before the elections last November), is that the deficit needs to be brought down. And consumers are clearly increasing savings and cutting back on debt. But those accounts must balance. If we want to reduce the deficits AND reduce our personal debt, we must then find a way to reduce the trade deficit, which is running about $500 billion a year as we write, or about $1 trillion less than the deficit.

If the US is going to really attempt to balance the budget over time, reduce our personal leverage, and save more, then we have to address the glaring fact that we import $300 billion in oil (give or take, depending on the price of oil).

This can only partially be done by offshore drilling. The real key is to reduce the need for oil. Nuclear power, renewables, and a shift to electric cars will be most helpful. Let us suggest something a little more radical. When the price of oil approached $4 a few years ago, Americans changed their driving and car-buying habits.

Perhaps we need to see the price of oil rise. What if we increased the price of oil with an increase in gas taxes by 2 cents a gallon each and every month until the demand for oil dropped to the point where we did not need foreign oil? If we had European gas-mileage standards, that would be the case now.

And take that 2 cents a month and dedicate it to fixing our infrastructure, which is badly in need of repair. In fact, the US Infrastructure Report Card (www.infrastructurereportcard.org), by the American Society of Civil Engineers, which grades the US on a variety of factors (the link has a very informative short video), gave our infrastructure the following grades in 2009: Aviation (D), Bridges (C), Dams (D), Drinking Water (D-), Energy (D+), Hazardous Waste (D), Inland Waterways (D-), Levees (D-), Public Parks and Recreation (C-), Rail (C-), Roads (D-), Schools (D), Solid Waste (C+), Transit (D), and Wastewater (D-).

Overall, America's Infrastructure GPA was graded a "D." To get to an "A" would requires a 5-year infrastructure investment of 2.2 trillion dollars.

That infrastructure has to be paid for. And we need to buy less oil. And we know price makes a difference. The majority of that 2 cents would need to stay in the states where it was taxed, and forbidden to be used on anything other than infrastructure.

(And while we are at it, why not build 50 thorium nuclear plants now? No fissionable material, no waste-storage problem, and an unlimited supply (at least for the next 1,000 years) of thorium in the US. The reason we chose uranium was to be able to produce nuclear bombs, among other reasons.) We'll get into this and more when we get to the chapter on the way back for the US.

Mauldin likes thorium nuclear plants. In my opinion, traditional nuclear energy has several problems that are often overlooked: expensive technology, radioactive wastes, scarce fuel imported from other countries, massive water requirements, obvious terrorist target, centralized control, etc.

How many of these shortcomings do thorium nuclear plants overcome?

 

Is an Empire that Borrows from its Rivals Doomed to Fail?

The United States is beholden to China, financially. The dirty secret is that our government keeps overspending by selling debt to China. But most people don't know about it. Perhaps we can't stand the truth!

Too many of our leaders would rather pull the wool over our eyes than try to fix the really big problems that threaten the future of the United States.

Bill Bonner explains "Why an Empire that Borrows from its Rivals is Doomed to Fail" at the Daily Reckoning. Excerpts below.

We’re still Number One, right?

Yes…in the sense that we can, in theory, kick any butt in the world. That is, if the Chinese let us. They’ve got so much of our money and so many of our bonds, if they decided to dump them, we’d be in one helluva fix. Because we don’t pay enough in taxes to fund our social programs and the Pentagon at the same time. We can’t afford it. So the nice Chinese lend us money.

But don’t worry. They’ve promised not to dump our bonds. And we’re sure they’ll honor that promise for as long as they want to.

As far as we know, no empire that had to borrow money from its rivals has ever lasted very long. Britain got itself in that position in WWI. It could no longer afford the carrying costs of the empire – including the huge cost of the war itself. So, it borrowed from the US.

Under the weight of growing social welfare programs and a shrinking empire, Britain’s economy sagged. Its old allies – France and the US – boomed in the post-war years. So did its old enemies – Japan and Germany. Soon, not only were its friends richer and more powerful…so were its adversaries.

Is that what we have to look forward to in America…a post-imperial decline, where our standard of living stagnates…our economy limps…and our place in the world frays and crumbles?

Yes. Most likely.

Why? Because the government is taking a larger and larger role in the economy. Because US social programs are too costly. Because we don’t have enough money to pay for them. Because not enough money has been invested in productive business. Because our military burden is too heavy…and difficult to escape. Because we have no savings. Because we will likely spend the next 10 years paying down private debt. Because the rest of the world is racing ahead. Because we are growing older. Because our leaders are corrupt and incompetent. And because the whole society becomes more zombified every day.

Is Consumption-Based Happiness Real?

In the first chapter of his book Survival+: Structuring Prosperity for Yourself and the Nation, Charles Hugh Smith provides some intriguing insights about false and real happiness as an introduction to adapting to reality after the financial crisis of 2008.

Since he launched his blog www.oftwominds.com in May 2005, Charles Hugh Smith has warned readers that the unsustainably leveraged global financial system was poised to break down. When the system finally crashed in late 2008, his goal switched to writing a practical guide for not just surviving but prospering – a concept he called Survival+ (Plus). He recommends liberating ourselves from failed models of credit expansion, resource depletion, financial looting and a counterfeit prosperity built entirely on debt.

Below is an excerpt from the end of Chapter 1. Warning: Reading this may make you uncomfortable. I started to see how much advertising and consumption affect our view of reality.

Link: Survival+: Structuring Prosperity for Yourself and the Nation

…happiness has been distilled down by the marketing/advertising complex to a simplistic, superficial formula:

1. You are a consumer

2. A consumer's worth is measured externally by what is owned, worn, displayed, and by what high-status markers are certified by authority (diploma, membership) or the mass media (desirable avatar, fame, etc.)

3. Self-worth results from the acquisition of goods and external markers

4. The internal state of owning scarcity-valued goods and high-status markers is happiness

What is left unspoken is the motivation for this formula:

5. The purpose of this formula is to profitably sell the insecure consumer an unnecessary good or marker which has no connection to self-worth or happiness.

Being social mammals, humans' reproductive success depends to some degree on the level of status, power and material wealth each individual reaches; thus some 8% of the men in a wide swath of Asia carry genes which trace back to the extraordinarily prolific conqueror Genghis Khan.

But to equate high social status with happiness is to confuse two complex issues: higher status may well provide more access to material sources of well-being, but happiness–a state of mind, an understanding, a practice and a process–cannot be reduced to material ownership.

Indeed, numerous studies of the multi-faceted inner sensation we call happiness (which I would term well-being) conclude that the sources of happiness are largely internal and relationship-based rather than material or status-based. Common sense suggests that the security offered by wealth and income boosts well-being, but studies find additional wealth provides diminishing returns. Beyond a certain relatively low level, additional wealth in any form (cash, goods, travel, etc.) offers little improvement in well-being.

Factors often listed as sources of well-being include: Meaningful work, recreation, love, friendship and worship.

We might ask: since shopping did not make the list, how did the pursuit of happiness shrivel to the pursuit of goods and services?

The answer is self-evident: a secure individual identity does not require status or limitless externalities, and thus it does not offer many opportunities to sell unneeded goods and services at a profit.

The first project of the marketing/advertising system is to break down internally produced self-worth and identity and replace it with a permanent insecurity. Convince the target audience that their worth is not internally sourced but totally dependent on externalities, and you create a fundamental insecurity: one can never have enough external goods or markers to establish enduring inner security.

A new fad or status marker will soon be introduced, driving down the value of whatever you own and thus your own "value" will plummet. Gratitude is impossible when there is never enough.

In a peculiar dynamic, the undermining of inner security–that is, of an independently constructed sense of self–by relentless marketing has sparked the emergence of a simulacrum of identity and self-worth: the so-called self-esteem industry.

Such is the perfection of the marketing/advertising system's induced insecurity that the connection between relentless marketing and our culture's pervasive sense of inner worthlessness is never made.

Rather than identify the root cause–the marketing/advertising complex–the self-esteem industry focuses on the symptoms, which it attempts to ameliorate with simplistic "feel-good" slogans ("you can be anything you want!", etc.), a counterproductive reduction in standards and a profoundly distorting goal of eliminating all metrics which might introduce a sense of diminished self-worth.

Just as the marketing complex purposefully confuses happiness with consumption (and indeed, citizen with consumer), so too does the self-esteem industry confuse external metrics and slogans with inner security and well-being.

Even some elements of organized religion have accepted the consumerist framework. In a troubling distortion of the Bible's edict that "It is easier for a camel to go through the eye of a needle than for a rich man to enter into the kingdom of God," some churchgoers have come to confuse wealth acquisition with spiritual attainment.

The Declaration of Independence's "pursuit of happiness"–implicitly a structured process, a journey toward a goal–has been replaced with an illusory and ultimately cruelly misleading end-state: happiness has been reduced from a structured journey (with inevitable setbacks) to the fleeting euphoria of a new purchase/acquisition.

An experience-based understanding of happiness is ontologically structured around the experiences of well-being, warmth and satisfaction offered by true friendship, accomplishment, generosity, romantic and spiritual love and the humility of worship. The acquisition of externalities and superficial markers has no place in this understanding.

In a parallel fashion, an independently constructed sense of self–what we term an individual's identity–grows from humility, self-knowledge and the strength of personal integrity, not from an illusory simulacrum of identity conjured by pronouncements ("I am a member of…") and possessions.

Indeed, all that is truly valuable in one's self and identity can never be taken away or even diminished: integrity, experience, self-knowledge and humility.

Rather than accept the derealizing, dehumanizing reduction to passive consumer, the individual seeking internal and external liberation must renounce the impoverishment of "consumer" and embrace the power of a citizen's independently constructed sense of self.

One key feature of the derealization created by the marketing/advertising system is the erosion of adulthood in favor of a simulacrum of adulthood: permanent adolescence. The very traits needed to negotiate adulthood–an awareness of being tricked/manipulated/cheated, an awareness that life is a series of trade-offs in which one desire is sacrificed to support another deemed more important, the ability to put aside short-term impulses to meet long-term goals, etc.–are derealized in favor of an easily mallable adolescent worldview of spontaneity (that is, impulse), immediate satiation of appetites, escape from everpresent boredom and an obsessively insecure monitoring of one's peers for approved behaviors and status markers.

The adolescent is the perfect marketing target: insecure, focused on gaining approval via external props and cues, easily distracted and bored, powerfully stimulated by "newness" (a key feature of marketing exploitation), drawn to "tribes" of prescribed behavior and identity, and prone to powerful sensory surges triggered by sexual and physical signals (taste, scent, etc.)

The ideal adolescent can barely restrain his/her impulses and emotions and is ever ready to indulge whims and desires. He/she is intensely insecure and doesn't trust his/her own experience but instead seeks the approval of peers or peer tribes via marketable clothing or other externals, suppressing his/her own inner life and experiences lest they conflict with the security offered by conformity. Regardless of the apparent marginality of the tribe he/she seeks to join/belong to, the conformity is equally intense, marketable and unthreatening to the State and the Plutocracy.

The more the "consumer" internalizes these positive cues for adolescence, the more they experience their own alienation as their own fault; given that the very adulthood skills they would need to break free of the trap have been eroded/derided by marketing, they find their inability to feel what they're supposed to be feeling ("happy") only drives them further into complusive, self-destructive behaviors (the primordial "eating a quart of ice cream in the bathtub" experience.)

The very shallowness of this ubiquitously marketed adolescent worldview insures the participating consumer will feel unfulfilled and insecure after the brief high of consumption wears off. Unable to cross the chasm to their own experience, they turn with increasing desperation to marketed escapes and distractions for relief.

When Consumerist Gods Fail

It is important to recall the context of the current Depression: the U.S. has consumed trillions of dollars of goods and commodities in exchange for rapidly depreciating paper. Once credit/debt cannot be created exponentially, then consumption will fall in line with surplus production.

The marketing/advertising complex will still be flooding every nook and cranny of the nation and its media with messages to consume, but if few have surplus money and credit then it follows that few will have the means to buy, regardless of the persuasiveness of the millions of messages.

Thus it is not that the false god of consumerism will be toppled but that it will be abandoned–in many cases, most sorrowfully–by believers and adherents who no longer possess the surplus cash to offer the consumerist god.

The key factor in a consumerist-based identity is that someone profits by selling you an identity, character and sheen of status. The idea that what you wear, drive, tattoo yourself with, load on your iPod, etc. has zero bearing on anything meaningful about who you are and what you value is sacrilege of the highest order.

If "my stuff" is no longer "me," then who and what am I? And indeed, what can I sell you if all you really need to be "yourself" and happy is friends, minimal shelter, unprocessed food, homemade music, a library and an Internet connection and spiritual communion/worship? How much profit can I make selling you a used guitar, a DSL connection and a bag of carrots?

It boils down to this: when you run out of money, you switch religions from Consumerism to one of the good old spiritual standbys.

The known sources of happiness require little to no consumption:

1. health

2. friends

3. free time to pursue interests

4. spiritual communion/worship

5. exercise/sports/play

6. gardening

7. meaningful work (unpaid qualifies)

The experience of well-being has been so derealized that the sense of deprivation experienced at the loss of fine dining, Caribbean cruises, season tickets to the games, etc. is itself suspect.

We might even speculate that the experience of genuine happiness and well-being has largely been forgotten, or perhaps is an unknown sensation to media-numbed "consumers."

Since sustaining the simulacrum of consumerist "happiness" will cause much misery as the consumerist economy slides to oblivion, we might profitably ask if the happier choice wouldn't be to jettison the entire artifice of consumerist "happiness." Upon reflection, it was never real happiness after all; it was only a means to reap immense profits.

The Structure of Happiness

Let us revisit a key concept:

This process of bridging the widening gap between what we experience and what we're being told we should be experiencing via the substitution of simulacrum for authentic structures is central to this entire analysis.

In other words: when we have lost the possibility of indulging the marketing/advertising system's fantasy of endless consumption of needless goods and services, instead of feeling the loss, deprivation and gnawing sense of insecurity/emptiness we are supposed to experience, we might well feel an unexpected but spontaneously genuine relief and liberation that the burdens of constant consumption have been lifted from our sagging shoulders.

It won't be surprising that an analysis which refers so often to the "politics of experience" seeks to illuminate the darkest corner of the consumerist theology: that there is a politics of experience deep within an apparently superficial consumerism.

That is, we do not experience happiness or fulfillment in a vacuum; it is difficult to pursue happiness in a political structure of randomized violence, suppression of free expression, insecure private property rights (a.k.a. theft by other means) and centralized, ubiquitous propaganda that is dominated by an over-reaching State and its Plutocratic overlords.

Thus if we consider the Founding Fathers' phrase "pursuit of happiness" closely, we find not only that it implies a personal pathway of goals, progress, setbacks and discipline rather than a static end-state but also a political environment in which the individual pursuit of happiness is not just possible but encouraged rather than suppressed.

Perhaps the first step to such an understanding of an authentic "pursuit of happiness" is to recognize the consumerist theology of insatiable acquisition (which benefits the State and the Elites alike) as a perverse and destructive simulacrum of genuine happiness.

Quotes from Thomas Jefferson

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.

When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe.

The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.

It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.

I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.

My reading of history convinces me that most bad government results from too much government.

No free man shall ever be debarred the use of arms.

The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.

To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.

via Scott Williams

P.S. I spent five great years in Charlottesville, Virginia, where Jefferson is revered. I concur.

Who Do We Believe / Trust?

Stoneleigh at The Automatic Earth raises some tough questions. These questions are unpleasant to consider, but ignoring them puts us in the same boat as the executives in the investment banks.

Link: The Automatic Earth: Debt Rattle, December 1 2008: Trying to avoid the unavoidable, but at what cost?.

It was recently revealed that Citigroup's analysis of their credit default swaps deliberately ignored the risk of a declining housing market. These are all indicative of the same reasoning, exactly the kind of reasoning Nouriel Roubini has been talking about – raving about – on TV panels for the last few weeks. This is exactly the kind of reasoning that all of the now-failed financial institutions have been relying upon and that has driven the derivatives bubble. If the risk of failure is minimal, this reasoning went, then it need not be accounted for, nevermind that the consequence is of catastrophic and systemic collapse. This debt crisis should teach us many things, only one of which is that risk assessment must include an assessment of the consequences of failure, however remote the likelihood of occurrence may be. The final irony, of course, is that the choice to systematically ignore those risks is what made their occurrence inevitable.

The financial industry bought into the ridiculous idea that risk which is low probability can be safely ignored. Now the federal government, whose advisors and actors come from the same blinkered pool, is doing the exact same thing. Is it lunacy to say that these hundred-billion dollar guarantees against balance sheets with unknown assets are in fact bluffs at serious risk of being called? In addition, now every big company is coming hat-in-hand to the government. States and municipalities are also at the door. But the only thing going on here is debt being shifted around. Privatize the profits, socialize the losses – a familiar refrain lately.

One might ask, why bail Citigroup and not American Auto? A cynical answer might be that because the people doling out the money are white collar Wall Street banksters, they don't care about blue collar workers, and because the people helping them dole out the money are government cronies, they don't like unionized blue collar workers. Can it go deeper than that? This Grand Theft America isn't just about class divisions and distaste for unions, as real as those motivations may be. This is about continuing the failed prescriptions of a consumer fantasy – that money could be made from money ad infinitum without the need to actually produce anything. Unfortunately, money chasing its own tail generated a mountain of debt large enough to threaten the integrity of the system.