Policy

The World has Lots “More” Now What? III

Dave Davis Commentary, Dave's Healthcare Plan, Policy, The Long Journey to "More", Uncategorized

n our last post, we laid out how old-style top-down governments cannot keep up in a world where change can come from anywhere at any time. Lumbering bureaucracies must become increasingly repressive to maintain the control that has only provided “Less”. Moreover, you can’t be part of a worldwide trading system and supply chain while intimidating and undermining your more liberal neighbors. Threatening supply routes whether it be the South China Sea or the Straits of Hormuz just doesn’t denote a commitment to world trade. Top down just isn’t compatible with the continued growth of “More.” Yet even countries once appearing to follow the liberalizing path (in the classical sense) to”More” somehow found a way to be increasingly top-down and moved in the opposite direction. Venezuela surely has made the trip. Turkey seems headed in that direction. China is at the crossroads. Could others follow? Could we actually get off the highway that has brought us so much “More”? There is always a danger of backsliding and unfortunately, there are worrying signs.

But don’t we need Laws and rules? Of course, all civilized societies have to have them, but there are rules and laws and there are rules and laws. In order for us to flexible and adaptable they have to be needed, fair, level playing field, workable, and reviewable. A good example of this is how we approach energy in light of a warming world. Presently we have a hodgepodge of mandates and subsidies favoring some while penalizing others. A tax subsidy to the producers of luxury electric cars puts competitors with a much different solution at a disadvantage. Many think a better way is to have a carbon tax and let everyone choose what is the least costly way to have energy in light of the tax. Definitely, this would be superior to what we have today, but how do we determine the proper amount of the tax. Once the tax is collected what do you do with the money? Spend it or rebate it? However, the biggest negative is even if it works and we reduce our emissions further unless the rest of the world does the same it will hardly move the needle. However, it would raise our relative costs putting us at a huge disadvantage. Even if the rest of the world buckled under and adopted high cost Zero carbon emission energy sources it would doom a billion plus people to continued poverty. How moral is that?

Continue reading →

The World has Lots “More” Now What? II

Dave Davis Commentary, Policy, The Long Journey to "More", Uncategorized

In years gone by, powerful leaders exerting maximum control could plausibly claim they needed this power to protect the governed from attack or to lead them to “More” by taking it from others. Fighting with and taking from others was justified by presenting your culture as superior to others. From Imperial Rome to Imperial China outsiders were considered barbarians. Much easier to take their goods and enslave if you see them as inferior. In the modern world, these claims just don’t hold up. Recent German history illustrates the point. Prior to World War II Hitler claimed the Germans were being denied their Lebensraum. Invading Poland and other “inferior” nations were imperative to give them the territory needed for its natural development. Today even with unification Germany has less territory yet is much wealthier. With a declining birthrate, the country has had to actually import workers and allow in migrants. After spending 2 Trillion euros on joining east with the west, the country has no interest in taking over Poland or Ukraine anyone else.. Much more profitable to just trade with them. Closer to home, we would love to back what we spent occupying Iraq and Afghanistan. It surely didn’t gain us “More.”

As we pointed out in our last post, innovation was at best a very slow contributor to humanity gaining “More.” Top-down government and culture were essential. The educated elite made and recorded the laws, maintained calendars, and made the proper tallies. For most of mankind being an elite was gained by heredity. 10% or less of humanity used their positions to acquire whatever “More” there was to be had. The rest of mankind was mostly at the bottom. For thousands of years, this was mankind’s basic organization. Then the 15th Century A.D. came and the pace of innovation accelerated to the point it is the main determinate of gaining “More.” As change could now come from anywhere at any time we, in turn, have to be more nimble and flexible. Top-down governance of everything just can’t keep up with what is happening from the bottom up. The more controlling a government is the less efficient. If this wasn’t true the Soviet Union with its 5-year plans would’ve won the cold war.

Today the most controlling top-down governments such as Cuba, Egypt, North Korea, Iran, and Venezuela not only have failed to lead their citizens to”More,” but managed to provide “less”. The question is whether China will join them. Taiwan and South Korea liberalized from one party states to a democratic market dominated countries and gained much “More.” For a while, it appeared China was heading in the same direction. Then Xi Jinping took over. Facial recognition, the social credit policy and concentration camps for Muslims match or exceed anything George Orwell ever penned. It looks like the Chinese Communist Party is bent on joining the “we have to stay in power at any cost club”. President for life Xi seems aligned with those leaders with lifetime job security in we provide “Less” club. The one thing all the members have in common is they have maintained absolute control over their citizens no matter how much pain they have to inflict on their citizens just to maintain control.

China because of its size is of utmost importance to continue the march of humanity to “More.” The nation is at a crossroads. It either to moves to a responsive flexible society like its neighbors Taiwan, South Korea, and Japan and continues on its journey to “More” or it becomes North Korea or Venezuela on a much greater scale. Remember the Chinese Communists went down that road before with Mao’s Great Leap Forward. A failure setting China back for decades. Worse it cost 45 million lives. Is Xi out to break that record?

Continue reading →

The World has Lots “More” Now What?

Dave Davis Policy, The Long Journey to "More", Uncategorized

From at least 10,000BCt to the 15th Century AD Humanity at it’s most advanced level was organized on a strictly top-down basis. Agriculture involving most people underpinned of these societies. Highly labor intensive, agriculture needed organization. When to plant, when to harvest and where and how to store the harvest called for certain retained knowledge. As we have pointed out in this series on “More”, a society can only get “More” in three ways, take it from somebody else, trade for it or innovate. Once the easy areas were planted only innovations such as irrigation and better tools, akin to the plow, axes and saws could bring more land under cultivation. Unfortunately, major innovations were few and far between. For instance, the wheel came into use at about 3,500BC, but as a potter’s wheel, not for transportation or carrying burdens. That came even later. The wheelbarrow dates only from 600 BC in Greece. That left it for trade and taking stuff from others as the preferred ways to get “More.”

Settled agrarian communities with seemingly abundant food and fiber, couldn’t help but attract those looking to relieve them of the fruits of their labor. The protective organization was a necessity. Military and policing needed leadership, organization and a means to pay for it. Accumulated knowledge had to be preserved and passed down. Who keeps the calendar? Who makes and enforces the laws.?

Trade, the other means of acquiring “More” also had its requirements. Exchanging goods need central protected markets and routes. It’s no wonder towns and cities combined administration, religion and markets in a protected area.

Laws, religion (often the same), administration and trade then all needed ways to preserve and tally. Fortunately, civilizations learned to write, read and compute. Sadly, for most of history, this was laborious, costly and limited. Even if you could read and write cuneiform, can you imagine War and Peace written on clay tablets? As a result, literacy was severely limited. As of late 1475 BC, literacy was 5% in France and 1% in Sweden. Out of necessity, a narrow group of literate elites filled the upper clergy, government administration, military and those in mercantile endeavors across all civilizations. Heredity in most cases played a major part in the makeup of these elites. The other more than 90% of the “civilized world” was an illiterate mass, mostly tied to the soil. Whether they were called peasants, serfs, slaves, coolies or some other name denoting those at the bottom, they, for the most part, led mean short lives, partaking in little or none of the “better things of life.”

Continue reading →

An Under Served Market

Dave Davis Policy, Uncategorized

Can you think of anything anywhere there are 36 ready and willing buyers for everyone offered and no one is doing much to meet the demand? Something there’s at least a 2 to 7-year wait? We couldn’t either. In a capitalist country, supply would simply rise to meet the demand. Unless it’s a short-range disruption, generally it’s the government doing something wrong (think Cuba or Venezuelan) and/or not providing the proper legal framework to allow markets to do their job.

So it is with the shortage of babies for adoption. Right now, more than 2 million couples are waiting in line to for a baby. Families waiting to be completed. How many more are too discouraged by the incredible gauntlet of our adoption system to even try, have dropped out or are looking elsewhere is unknown? If you are among the few not having a family member or friend that has gone through the adoption misadventure, go online to read the endless stories of woe. We feel for a much lower number of transgenders wanting to get on with their lives, but we ignore the stress these millions are going through for just wanting to have a family.

Even if you can’t get worked up over what these couples are going through, you just might be over the possibility of our declining national population. Countries with declining populations such as Japan or Russia are locked in very slow growth with less young people supporting an ever-growing aged population. This will only get increasingly untenable in the future. So how do we maintain or increase our working-age population down the road? We can allow much greater numbers of immigrants. This, however, is a great bone of contention between our two major parties with no resolution anywhere on the horizon.

Continue reading →

He Cant Be Serious

Dave Davis Commentary, Policy, Uncategorized

President Trump again has put a wide swath of the establishment types in a state of fear for another of our “venerable” institutions.  What could he be thinking?  Steven Moore and  horrors Herman Cain considered for the Federal Reserve Board?  Why they don’t even have a PHD among them. Worse he is playing politics with appointment by selecting people generally agreeing with him on economic policy.  They see the  Fed as a revered independent agency led by highly educated elites delivering stable money and full employment from on high.  Contamination with these two louts will taint this wonderful institution with mediocrity possibly leading to failure. We have trouble in River City.

Before everyone hyperventilates, remember we’re talking about the Federal Reserve.  You know, the people not having a clue the “Great Recession” was on the horizon.  The ones by keeping interest rates so low it forced people in need of returns worldwide to buy riskier instruments such as the Collaterized Mortgage Obligations containing the subprime mortgages. That rocked the world economy.  Even when they woke up, their answer was to buy trillions of dollars worth of debt with newly created money driving interest rates near zero.  The result was the slowest recovery ever recorded after any recession or depression.  This even with  Obama’s near trillion-dollar stimulus.  At best the Fed has a hit or miss record since its inception.  We warned of the continuing destabilization of  the economy if interest rates continue below normal in our post Free Capital to Finance “More” in our series “The long Journey to More.”  The Fed never seems to be aware of the bubbles it creates till they burst.

Tightening or loosening the money supply at the wrong time may actually have happened more often than they got it right. As Milton Friedman put it, “No major institution in the US has so poor a record of performance over so long a period as the Federal Reserve, yet so high a public reputation.”  And this was said before  its “Great Recession” failures.  It would seem this is an organization in clear need of fresh ideas to achieve positive performance.

Continue reading →