Monday, October 10, 2011

The Revolution Will Not Be Televised

A year from now, the battle to re-capture America will be in its waning days. We have 13 months before the future of our country is either moved toward a new Socialist Dawn, or we attempt to pull-back, and halt the progress toward a political system that rewards those without merit, while punishing those of merit. Or, I should say, promise a political system that rewards those without merit. Because no system that rewards the undeserving has ever succeeded.

What we're facing, though, is a group of people with mass. The group is so disparate, that I don't think they know the mass they have, but folks smarter than I, believe. The counter-point to this mass is you and me. There are a lot of you, but just one of me. The mass has weight, that unless and until you attempt to confront this weight, you not have an appreciation of the sheer weight and velocity of the forces set against us. In our naivete, we've believed that rules of fair play, intellectual deduction, calm and reasoned debate, that we, Americans, could avoid the devolution of other countries, who have allowed themselves the downward spirals of populist parties who assure their followers that simple obedience will gain them wealth and happiness that they've never before experienced. And, "salting the mine," they've taken money from the affluent under the guise of helping those who cannot help themselves.

I don't believe that welfare wasn't established to help the lazy, or the under-motivated.

Welfare was established in the Great Depression, with pictures of waifs nursing children with empty teats.

Welfare was created to help the least of us, in times when the best of us weren't able to do enough. Incremental contributions would be enough to help the bottom five percent. The truly needy. The infirm, halt, lame and mentally incapable.

Hollywood made pictures displaying the disparity of the poor and the wealthy. The rich would depend upon magic poor-people. Sure, the rich had the cash, but until, and unless, they gained the humanity of accepting the advice of smarter than they, but poor, folks, these affluent families would face the horror of profligate sons and daughters, air-headed wives, and hired help that despised them behind their backs. The moral? Unless,and until, you gave up riches, your were destined to a certain, unerring, unhappiness. The merely affluent, the middle- and lower-classes were but a step away from poverty.

Which was and is true.

The weight of wealth is not that it isn't better to jet around the world in a G-5, the weight of wealth is, given the choice to sit on ones wealth, or risk ones wealth, what is the best path to follow? Sit on it, or risk it? Risk it, and you can end up with nothing. Giving up riches is nothing. You, as I, were born with nothing. We hadn't learned a thing, nor earned a thing. There are advantages to finding yourself coddled in the lap of wealth, but that coddling doesn't reduce the risks of eventually becoming responsible for your situation. Knowing the rich, they aren't different than you or I, they simply have more money.

Like Mel Brooks said, "It's good to be the King."

No argument. I wasn't born rich. I grew up among the rich. I've worked for the rich. From the outside, being rich has certain advantages. Having rich friends has certain advantages. Gaining the trust of the rich has certain advantages. Working for the rich is better than working for the poor. But having nothing is a lot more liberating than having a lot. (Janice.) Intelligence, education, intuition, an ability to ken, trust in your own senses, these aren't hard-wired. If your pop was successful, it's easy to suggest that your likelihood of success is greater than if your dad was a failure. But it isn't necessarily true. If it isn't necessarily true, it at least, isn't sufficiently true. I have several families that I know of who have found themselves, in the past ten years, in the previously unknown condition of having to scrape a live together for themselves.

Rags to riches. The inverse is also true. The weight of poverty is a motivator, too, if allowed.

Which brings one to the issue of moral hazard.

Whether one has great wealth, or no wealth, the issue of moral hazard is raised whenever one makes a decision that affects the risks faced, versus potential rewards, due to ones judgements. The choices made that affect the ability one has to find the most meager of existences. Imagine you inherit, or win, a million dollars.

My thought is, take that million immediately to Vegas, and bet Red. If you hit, you can pay the taxes. If you lose, you don't have a tax liability.

You either double or you don't. Are you worse off?

If you didn't have anything, you are no worse off. But, let's suggest that there are enough bad gamblers out there, that they have a constituency in Congress. And actually, let me refine this risk a little more; imagine that there's a constituency out there that services the gamblers. The casinos of capital are held in our major banks. private and investment banks, and on the stock exchanges. 

Moral hazard. What to do when shorts don't cover you? Or, you take the wrong position on an investment, and find yourself stuck, with either shorts or longs, when both disintegrate? In 1929, for some, the answer was the nearest window transom. And, I'm sure, that during the latest malady in the markets, others have found quiet in the nearest equivalent to the window transom. Perhaps, it's drugs. Maybe it's a OWS. We all have our own El Guapo.

Moral hazard. A life without moral hazard must seem like Heaven to a certain sector of the human populace. I can't help but recall some of Mr. Clemen's hazarded guesses about this type of Heaven: "It is easy to see that the inventor of the heaven did not originate the idea, but copied it from the show-ceremonies of some sorry little sovereign State up in the back settlements of the Orient somewhere;" "Singing hymns and waving palm branches through all eternity is pretty when you hear about it in the pulpit, but it's as poor a way to put in valuable time as a body could contrive;" "Let us swear while we may, for in Heaven it will not be allowed;" and, "There is no humor in heaven."

The religious have always offered us ways to avoid the moral hazard of life. Innocence has always been a form of affirmative defense against crimes of sloth, carelessness, indifference and ignorance. Here, in America, we have as close to as is possible, a society where we can simply pick the fruit off the three.

What occurs when you legislate an outcome that favours both the diminished, and the advantaged? When you remove moral hazard from the middle-class? What society is it, that creates a solution where nobody is responsible for their individual actions? It isn't my fault that we've created a political system that rewards everyone, no matter their failings. It is as if we're awarding "participation ribbons" to banks, to Wall Street funds, to Fannie Mae and Freddie Mac, for simply being there. Good ideas. Didn't work out.

Solyndra. Wind mills for electrical generation. Green technology. Green buildings. Electric vehicles.None of which works, or works efficiently. It's not our fault. If we don't keep sending billions of bucks to stupid technologies, how are we going to create new technologies?

There will be no "revolution." We can allow our government to take billions of dollars from us to give to our connected friends and neighbors, but no new technologies will be developed. The new technologies will come from places we never knew existed. That is the nature of innovation. It cannot be planned. It will be discovered, in ways we never anticipated. The revolution will not be televised. It can be smothered, though, like a child under a heavy pillow.

And then, we will, begin again.

And it will not be televised.

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