EPA and Coal

     So it seems the EPA's new emissions regulations for powerplants will effectively ban the construction of any new coal-fired powerplants (LINK) however, from what the articles are saying, coal is already in decline because of natural gas. Also, the new coal-fired powerplants that are currently being constructed are being done so under the old regulations and there aren't a whole lot of new planned coal plants on the drawing board.

Ivanka Trump Well On Her Way to Billionaire Status

     So according to this article Ivanka Trump's (daughter of Donald Trump) fashion and jewelry business is expected to bring in $230 million this year. All I can say is WOW! A few more years and she should be a billionaire herself from that (a business that makes less a billion in revenue can still be valued at over a billion). Ivanka says her goal is tobuild it into a billion-dollar brand.
     Ivanka has been able to accomplish this I think due to a few things:

1) The daughter of a billionaire (probably easier for things like a bank loan if you need it)

2) The Apprentice - by appearing her father's TV show, "The Apprentice," she has been able to build up a large fan base. Millions of people now know who she is.

3) Celebrity - Ivanka didn't come up with any brilliant product that caught on so much as she made sure to come up with quality products with her name attached, and because of who she is, and the celebrity she has cultivated, she is able to have a lot more notoriety for her brand.

4) Her looks - Ivanka is one of those very exoting looking blondes, and I am sure that helps with her notoriety. She wouldn't generate the same celebrity if she was a plain Jane, if you will.

     But that's still quite an accomplishment, she will be a billionaire independent of her father if she keeps up the good work. It's neat, how being a billionaire used to really be a BIG deal, and I mean it still is, but there's so many billionaires these days, that becoming a billionaire seems kind of like what being a millionaire used to be back in the 1800s and early 20th century. If you could just make yourself worth $1 million back in those days, you were really really wealthy. Again don't get me wrong, being worth say $100 million or $200 million or even $50 million today is very sweet, $500 million or $600 million is incredible money too, but billionaires seem a lot more ubiquitous now.

SpaceX to Launch First Probe to International Space Station Next Month

LINK - hope all goes well! I very much hope the private-sector can pick up where the government left-off regarding space exploration.

James Cameron Returns from Deepest Spot on Earth

LINK - WOW would I love to be this guy. This is something I intend on doing someday, when I become wealthy (:D). I have always dreamed of exploring the oceans and building submersibles. The oceans are a really unexplored environment. From what I understand, we don't know the geography of the entire ocean landscape. We know where the major continental faults and trenches and so forth are, but in terms of all the geography, I think much of that is unknown at the moment. We also have only a fraction of understanding of the myriad lifeforms that live in the ocean. So there is much work to be done in terms of oceanographic exploration.
     When you think about it, Earth really is a water planet. To give an appreciation of the surface area covered by the oceans, if you add up the surface area of the Earth's continents, the surface area of the planet Mars, and the surface are of the Moon, you still do not reach the surface area covered by the oceans. That's a LOT of space to explore!
     It's rather comical to think about how arrogant humans used to be regarding the oceans. It used to be believed that the continents were fixed in place and did not move, that no lifeforms whatsoever existed on the bottom of the ocean, and that the entire ocean landscape was just barren and flat, basically an underwater desert. Then when scientists actually began going under the ocean and exploring, they found (in what shouldn't have been shocking), that the ocean actually has loads of mountains, ridges, ravines, you name it, along with lots and lots of lifeforms.
     Cameron himself has done dozens of ocean dives and is friends with most all the people active in the underwater exploration community. I would hope to someday become one of these people, but it will require some money. It would be great though to just have a big yacht (for this, an expedition yacht, which is a rugged yacht meant for exploration) with a submersible attached to it that one could use for deep ocean exploration.
     Graham Hawkes, the founder of Deepflight Sumbersibles, has been working for years to create what are essentially underwater aircraft. These are submersibles that would operate independently of any mother ship. You just put them into the water and "fly" underneath (they stay underwater using the opposite process of how airplanes use their wings to stay in the air). The benefit of such a craft is that if you stop underwater, you just float back to the surface (so no fear of being trapped if you broke down underwater). The downside however is that in order to stay submerged, you must be moving forward. Most current submersibles operate like underwater blimps and require a mother ship on the surface for support.
     It would be very awesome I think to get one of these craft and drive it underwater in say the tropics (clear blue water) and have a clear view of all sorts of different underwater lifeforms. Last I heard, the engineering challenge is how to get these craft to go deeper than 2,000 feet (I think Graham had said they have a "floor" of about 2,000 feet). Maybe they have since then surpassed that, I am not sure. These craft however cost some serious money as well.

Obamacare

     So today marked the very beginning of the Supreme Court and its hearing of arguments regarding President Barack Obama's healthcare law. The main issue of course is whether the mandate in the law, which requires people to purchase health insurance or pay a fine, is Constitutional. The Obama administration says it is Constitutional and that the Commerce Clause grants them the power to do this because healthcare makes up a massive portion of the American economy (about 1/6 of it) and that all the people who choose not to purchase health insurance are thus affecting commerce and the economy and healthcare costs. The opponents say that the law is not Constitutional as the Commerce Clause is about regulating actual commerce not regulating people not engaged in commerce and that if the government can mandate people purchase a product from a private company, then it can basically mandate anything.
     It is believed that the ruling will be narrow, either 5-4 for the mandate or against it. I am hoping that the Court strikes down the mandate, but I am trying to make myself assume that the Court will rule in favor of it so that I am not disheartened if they rule in favor of it. Personally, I do not think the argument made by the proponents matters much. Yes, technically, a large number of the population choosing not to purchase health insurance may affect healthcare costs, but, that shouldn't matter in this argument. That still shouldn't give the government the ability to literally mandate people purchase something. Now if it is a tax, which is perfectly Constitutional, that is different.
     The Obama administration swore up and down that the mandate was not a tax, that it is perfectly Constitutional to actually mandate people purchase something when they were pushing for the law, but then when it began to get challenged, they changed their argument and began saying that they were viewing as being a tax. The two are very close, I mean if the government mandates you purchase something and if you refuse, you pay a fine, versus the government decide to tax you if you do not purchase something, there's not a whole lot of difference, but there's still a distinct difference between the two. It is perfectly within the government's right to levy taxes. It is not necessarilly within their right to mandate people purchase anything, not the federal government anyhow.
     There are four major issues at stake regarding this law:

1) The first is that if the mandate is upheld, then it means the government could probably mandate anything from now on. We no longer have a government with limited powers but now a government that can essentially do whatever it wants.

2) If the mandate is declared un-Constitutional, then it essentially ends the healthcare law, because the healthcare law depends on the mandate for its survival. Without the mandate, the whole thing will fall apart. So if the mandate is upheld, the entire law is upheld. What is disheartening though is just how much power the law gives to the federal government. Economic freedom is essential to having a free society. And healthcare is one-sixth of the economy. So whoever controls healthcare effectively controls one-sixth of the economy. With the healthcare law, the health insurance industry is essentially nationalized. Now the proponents of the bill say that the claim that Obamacare "nationalizes" one-sixth of the economy is right-wing scaremongering, that this isn't really the case, but I'm not sure I agree.
     Whoever controls health insurance controls healthcare, so by nationalizing the health insurance industry, the legislation essentially places the government ultimately in charge of the whole healthcare industry. If you read the annual reports of any company involved in healthcare, whether it be pharmaceuticals companies or medical devices firms or whatnot, they all comment about how the legislation will affect them.
     Now the law doesn't outright nationalize the health insurance industry, what it does is to do the equivalent of leaving the health insurance companies "private-sector" but regulating them to such an incredible amount that essentially they are run by the government. The health insurance companies had no problem with this (it's a myth that the big health insurance companies were against this healthcare law) because in exchange for giving up control, they get guaranteed profits, as people are now mandated to purchase their product or pay a fine (and for those who cannot afford healthcare, the government will subsidize them). Basically the law creates single-payer healthcare by proxy.
     So if it remains in place, we have essentially now placed one-sixth of the economy under government control and direction. The thing is that the United States is the last bastion of large-scale economic freedom in the world. America should work to preserve this, so that, no matter how bad things get anywhere in the world, people always know that there exists a light, a place where people are free and the economy is free.

3) Single-Payer Healthcare: Single-payer healthcare is the Holy Grail for the political left. I think it is because of their unwavering belief in the competency of government and also that they have never really been able to get over the fact that socialism doesn't work. I think it also stems from a major lack of understanding of the subject of universal healthcare. Contrary to what many believe (and this includes people on the right-wing as well), universal healthcare does not have to be socialist healthcare.
     Many pundits on the left will say for example, "In Europe, they have socialist healthcare and its great," while pundits on the right will say, "In Europe they have socialist healthcare and its terrible." What neither pays attention to is that in some of the major European countries, while they have universal healthcare, it is not socialist healthcare. For example, France and Germany, both major European nations, have universal healthcare systems, but neither one has socialist healthcare. Instead, they both have systems that are a complex combination of public and private, both being multipayer systems. In fact the French, having a literal quasi-socialist country, do not want socialist healthcare.
     The Left in America ignore this however, desiring full-on, government-run, single-payer healthcare for the United States. The problem is that, contrary to the claims of the Left, single-payer has some major problems, namely rationing. The argument for single-payer is the same one made by the socialists for why any industry should be nationalized, which is that it will get rid of all the inefficiencies of the private-sector by centralizing the whole thing into one government-run, single-payer system. But in practice, it results in the same thing any socialist, government-run system does, which is rationing. Part of this is due to the fact that centralizing the system does not result in the reduced costs that the system is supposed to create.
     Rising costs and rationing have happened in virtually every nation that has tried single-payer. For example, the British system has had problems with rationing for years, as it is a full-on, government-run, single-payer healthcare system. Because of the rationing, Britain has had some of the lowest breast-cancer survival rates out of all Westernized nations and the country has been working hard for years to address the problems of rationing in the system.
     Sweden, due to out-of-control costs in their single-payer system, had to adopt partial privatization of healthcare. Canada, due to rationing that began occurring in their system after outlawing private-care, has seen the rise of private clinics begin popping up, although they aren't really legal. But they have occurred because people do not like the waiting times in such a system. If one studies universal healthcare systems, they find that single-payer is not really the ideal way to go for a healthcare system. The ideal option is to have a system that is some combination of public and private, but which lets the market play a large role, so as to allow for choice and to keep costs down.
     The political Left in the United States however has no desire for such a system. President Obama himself said repeatedly when campaigning for President in 2007 and 2008 that he desired a full single-payer system for the United States, that he desired to create a "Medicare for all," if you will. Creation of a system combining public and private elements is not on the agenda, as I said, likely due to an ignorance of the fact that not all universal healthcare systems are single-payer and an unwavering, ideological faith in the capabilities of government to run an industry (and one as complex and massive as the U.S. healthcare system!).
     Proponents of single-payer also enjoy pointing out the incredible popularity of Medicare, so why not give it to everyone is their reasoning? On this, they miss a few points:

a) Medicare's exponentially-increasing costs. Medicare has been EXPLODING in cost for decades. Now in a healthcare system, one has generally three options, two of which can be provided: universal coverage, freedom of choice, and cost controls. It's not really possible to have all three. You can have universal coverage and freedom of choice, but you will have no cost controls and thus exploding costs. This is essentially how Medicare as a single-payer system is right now, and this is why it's so popular. Because it hasn't had the rationing implemented into it yet in order to contain costs. If it isn't reformed, then that will come in the future at some point, as the government eventually is going to hit a wall regarding Medicare costs. But for the time being, and since it was created, the government has essentially operated on the lie that Medicare is a single-payer system that covers all elderly and gives freedom of choice, with no rationing (not of the kind seen in other single-payer systems anyhow). So it has been very popular. No old person has complained of how they needed care and the system made them wait X weeks or months to see a doctor, and then it was a doctor they didn't like.
     Now if you have universal coverage with cost controls, you must remove freedom of choice. Or you can have freedom of choice and cost controls, but then you must remove universal coverage. One of these or some combination will occur in the future with Medicare if it isn't somehow reformed to save it. This issue leads to the second point the Left are missing, which is:

b) If Medicare is exploding in cost with the current recipients, then how on Earth could the program be applied to all Americans? Listening to President Obama and the political Left, one would think we could apply Medicare to the entire American population and everyone would magically receive the same quality care as the current Medicare recipients get. The fact that Medicare with the current recipients is exploding in cost to the point of being the major breaker of the federal budget, and that applying it to everyone would cause the costs to explode to an insane amount, is never addressed.
     I was rather amazed during the Presidential campaign of 2008 that none of the Republican candidates ever bothered to point this out. McCain was particularly inept as a candidate in this sense. If applied to all Americans, Medicare would have to begin severe rationing of care, simply to contain the costs.
     Another point the political Left make, when it is pointed out to them that government running the healthcare system will result in rationing, is that the private-sector rations care as well. Weeeeelllll.....sort of, but I mean that's like saying that the agricultural and food distribution industry rations food, so why not just let the government run it? When a critic of socialism says that the government "rations," what they mean is that the government rations a lot LESS efficiently than the private-sector and rations by bureaucratic fiat as opposed to the price-system. Anyhow, in writing all of this, my point is that the political Left very wrongly (I think) see single-payer as the way to go for healthcare.

4) The fourth issue at stake is that the passage of such a universal healthcare system fundamentally changes the relationship between the individual and the state. It is a way to move the country to being a European-style social democracy. Now having sound social safety nets is fine, but with a social democracy, the problem that can occur is that if the government begins to act like a parent, then the people essentially become the equivalent of adult children. We see the ultimate manifestation of this in Greece, with people rioting and fighting the police there all because the government wants to reduce their very lavish government benefits and require them to do things such as work more than 35 hours a week and retire later than 50 years-old (people complaining over this is laughable to Americans who work at least 40 hours per week, oftentimes longer, and can't start receiving Social Security until age 67). But note that the people of Greece don't just protest these reforms (because their country is bankrupt), they riot. They are the equivalent of adult children.
     Now government bureaucrats, in particular left-leaning ones who think the government should boss everyone around and regulate every aspect of people's lives, love the idea of an adolescent population. An adolescent population is a lot more malleable for winning votes and is a lot more dependent on the government from the get-go, so the power of said bureaucrats is pretty secure. Anyone who wants to run on reducing the size of the government can be defeated by the bureaucrat saying said person will take away the freebies. An adolescent population also is self-reinforcing, because the people come off as needy and in need of guidance from the maternal government whenever a problem of any kind occurs, which then justifies the creation and/or expansion of government programs. The Roman statesman Sallust is said to have once said,

"Only a few prefer liberty. The majority seek nothing more than kind masters."

This describes much of the European population to a tee, I think. What governments do not like is an adult population. Because adult populations tend to be much more rugged and individualist and will view any attempts by the government to control their lives with disdain. Adult populations do not need the government oftentimes, which thus limits the creation of government programs. And worse for the bureaucrats, they have no way to scare the people into voting for them (the horror!).
     Now in saying this, I am not saying I am against all government programs. Having a system of sound social safety nets is fine. But there is a huge difference between having a system of safety nets meant to provide a cushion for people who get knocked down due to bad luck or a bad economy or whatnot, versus having an outright social welfare state where the government acts like a parent.
    The other major problem is that European-style social democracy is not sustainable. The reason the European nations as they exist today have been able to create their large social welfare states is because they have not had to pay for their defense budget much at all to protect themselves, and they also have higher taxes, such as a VAT tax which the United States does not yet have (another major myth on the part of the Left in America is that we can have European-style social entitlements by taxing the rich; that isn't how it works. You pay for those entitlements by having a VAT tax which hits the poor and the middle-class, not the rich).
     The Europeans have not had to pay much for their defense because the United States has been protecting them for decades. The United States serves as the anchor for Western civilization. It underwrites global security and global trade by keeping the sea lanes open and in general being the country to handle any major problems that break out in the world. It is the United States that kept the Soviet Union at bay throughout the Cold War. Europe would never have been able to stand against the Red Menace on its own.
     We saw the skimpiness of the European military capabilities with the recent Libya operation. The European forces ran out of the munitions they needed only two weeks into the operation and have had to rely on the United States for things like air-to-air refueling, air transport, logistics, targeting capabilities, and so forth. To the extent that the European nations operate anywhere in the world, they rely on the United States for these things. It is easy to create a large social welfare state when one doesn't have to spend much of anything on defense. There have been attempts to create European Rapid-Reaction Forces, but none of these have panned out. And what the Euros do spend on defense, much of it goes to the salaries and benefits of their soldiers as opposed to training and equipment. For years, many of the European nations have failed to contribute the military forces to NATO required of them, because they all know that if push comes to shove, the United States can and will handle the problem.  The Europeans also lack the economies of scale in defense purchases the U.S. has (all the Euro countries purchase individually as opposed to pooling their resources together to make purchases).
     Despite these higher taxes and lack of defense spending, the European social welfare states are STILL unsustainable. The worst of the offenders, such as Portugal, Italy, Greece, and Spain, are on the verge of bankruptcy. But even the stronger EU economies that maintain more solid finances still have had problems. Germany, the strongest EU economy, doesn't spend much of anything on defense. And in 2005, reforms were pushed through to reduce the size of the German welfare state. The United Kingdom is having to engage in fiscal austerity measures and, while being essentially the only nation (or nations?) outside of the United States to maintain a world-class military capable of real power-projection, still spends less of its GDP on defense than does the United States. The small Scandinavian nations, many of which maintain solid finances, also have this problem of not having to worry about defense (and Norway gets 25% of its GDP from oil exports).
     So if the United States adopts a European-style social democracy, what happens then? How is the United States to continue its role as underwriter of global security and global trade, of the current liberal global order? The answer is that it would not be able to. In my not-so-humble-opinion, adopting social democracy, starting with Obamacare, could threaten the very existence of Western civilization, albeit over a longer term, in two ways:

a) Turning the American population from being adults into adult adolescents, which destroys the warrior culture our nation has and destroying our economic supremacy

b) Ending the ability of America financially to sustain its military (through a combination of economic weakness and excessive entitlement spending)

     Now some pundits have suggested that this is nonsensical thinking, for the reasons that the current liberal order of relative peace and prosperity does not require the United States to thrive. That it can, and will (as many just assume that the U.S. is in a state of permanent decline now because of one financial crisis) get along without the U.S. They also believe that the current liberal order is the natural outcome of things in human history.
     Now I think both of these are horrendously wrong arguments. For one, liberalism (as in free-markets, Western democracies, human rights and freedoms, etc...) is NOT any natural outcome. The NORM throughout human history is poverty, misery, death, destruction, and oppression. The current liberal order is really a historical anamoly in the course of human history and may end at some point in the future.
     And the idea that the current global order could survive without the United States I think is wishful thinking in the highest. There are lots of violent, power-hungry countries in the world. These countries are not just going to behave if the United States loses influence. To suggest that goes against the entirety of human history. The current order survives and thrives because the U.S. is there to underwrite it. From military, such as underwriting global trade and security, keeping the sea lanes open (it's America that will re-open the Strait of Hormuz, through which more than 50% of the global supply of oil passes each day, should Iran try to close it up), to economic, in terms of providing support for the World Bank and IMF to serving as one of the global economic anchors (Americans buy lots of stuff), America plays a major role in the current world.
     If ever displaced, rather than survive, the current order would likely be challenged, and possibly ultimately replaced by a different order, one that will be set up by whoever are the strongest countries at that time. When the Western Roman Empire collapsed, a Dark Ages gripped Western Europe. Islamist forces tries for centuries to push into Europe but were held off by the remainder of the Roman Empire, the Eastern Roman Empire which became known as the Byzantine Empire. When Constantinople was finally captured in 1453 by Islamist forces, that was the end of the Byzantine Empire. The British Empire was the underwriter of global trade and security throughout the 19th century. Ironically, by the end of the 19th century, when Europe was experiencing an unprecedented peace and prosperity with liberalism (or major aspects of it) being so popular around the world, it was at that time believed that major wars were a thing of the past.
      Then the 20th century hit, in which the liberal order collapsed, and we saw the rise of communism, socialism, fascism, dictatorships galore and two major world wars. So how could anyone think that the current liberal order would survive without the United States there to underwrite its security?
      Going back to healthcare though, the ability of the United States to continue to do this role requires it maintaining an adult population, a population that believes in hard work, individualism, and a warrior culture. These are necessary to maintain the strong economy, limited government (adult people don't need an outright welfare state), and strong military required for the U.S. to continue to play this role. If Obamacare transitions America towards going down the route of a social democracy, all of these, and thus the current global order, I think are threatened, albeit in the long-term. Social democracy will lead to a financially unsustainable welfare state, which will cut severely into military expenditures, and an adolescent population as a result of its dependency on the government, which itself will lead to a weak economy (as people won't want to work or start businesses nearly as much), which then makes the welfare state's unsustainability and military cutbacks even more certain.
     Having said all of this, I could end by saying something dark and grave like, "It all comes down to what the Supreme Court decides...." well maybe so, but I wouldn't rush that Western civilization is done if the SCOTUS rules the mandate Constitutional. But it will mean that, assuming President Obama is re-elected, that the United States has taken a major step in the direction of social democracy that is likely not going to be good for the economic and social health of the country in the long-term.

Two Neat-Looking Books

I haven't read either of these books yet, but both of them look very cool, so I figured I'd post them up. One is a history of financial innovations throughout human history, the other a history of enterprise:

The Origins of Value: The Financial Innovations That Created Modern Capital Markets
The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times

Ways to Manage People

So in business, one of course wants to get people to do the work that needs to be done. Here are five tips to remember regaridng how to get people to do what you want:

1) Organize the work; don't so much try to organize the people of the business themselves, but organize the work that they must do

2) Try to make the work worthwhile - this isn't always doable, but people like to be part of something important or worthwhile and to be challenged

3) Try to make it economically beneficial to someone to do something that aids you. Asking people to do something for you that doesn't benefit them or drains them in some way has its limits. And if you have done things for the person, don't remind them of this, because they will resent it. They'll feel that you're trying to guilt them into doing the job (this more applies in general, not so much to employees as they're already being compensated economically for working for you).

4) Everyone has an invisible sign hanging around their neck that says: "Make Me Feel Important." Make someone feel that they're actually of some importance and they will be much more prone to do the job well. A person who thinks you couldn't care less how they do the job is not going to be incentivized to do a good job!

5) Treat people with respect (this may seem obvious, but lots of people don't treat others respectfully)

Preserving Wealth for the Apocalypse

     So I was browsing through Barton Biggs's book Hedgehogging last night when I stumbled upon the chapter titled, "Once You Have a Fortune, How Can You Hang Onto It?" Now I read this book some years back, but I was browsing through it again as I found it a fascinating read. Anyhow, in the chapter, he points out a major dilemma that many people have upon becoming wealthy, which is how exactly to preserve and enhance your fortune? And in particular, how to preserve it for when an apocalyptic scenario hits, because that's when you'll really need it.
     Being wealthy is great and all during prosperous times, but if you're wealth is susceptible to the ebbs and flows of the economy, then it isn't really the security cushion you may think it is. A lot of people discovered this the hard way with the recent financial crisis. One thing I have learned in studying business and economic history is that if you build a fortune, always assume that a major economic or financial calamity could be just around the corner, and think about how would your fortune fare if such a calamity was to hit. For example, if your wealth is tied to the stock market, well a stock market crash could evaporate a huge portion of your wealth. This happens to lots of people everytime there's a crash. If your wealth is tied into a single company, how will that company fare in an economic calamity? Is it a fairly recession-resistant business, or is it a business that does really well in good times, but really badly in bad times? If your wealth is in the banks, well if the banking system comes on the verge of failing, then the government only will bail out up to $250K of a person's money in the system (and if they have to, they can reduce that amount). So if you have $200 million in a bank and that bank goes kaput, the government will preserve you at most $250K.
     The perils of putting all of one's eggs into one basket became really apparent with the whole Bernie Madoff affair. Whole families had entrusted him with their entire fortune! Now myself, I do not see how anyone could do this, unless they are utterly clueless about investing. You can have a person who is brilliant and has a heart of gold, and that person could still end up losing one's money simply due to getting taken by surprise in some way by some economic calamity or something. I mean, it happens. So on that alone, one shouldn't entrust one's entire fortune to one person. But it really does seem like a lot of wealthy people are not very smart about money, neither in how they spend it or in the fact that they do not take into consideration that professional investors can lose large sums of their money as well. They also do not seem to take into account that recessions and depressions do occur.
     Anyways, back to the book, in the chapter, Biggs talks about how when he was in Hong Kong some years ago, he visited the elderly patriarch of a very wealthy Chinese family. This guy had been a General who fought the Japanese in World War II and the Communists. They got to talking about the perils of preserving wealth in Asia over a century of wars, depressions, inflation, and revolutions. As mentioned, they discussed how paper wealth is all fine and dandy during prosperous times, but that kind of thing is useless when anarchy reigns. Stocks, bonds, paper money, etc...are all worthless if the government collapses. A very good point I think Biggs makes is that at some point, the crap will royally hit the fan again.
     In the general's opinion, quality jewelry was about the best way to preserve wealth for when real disaster strikes. He points out that a disaster hedge should be the following:

1) Highly portable
2) Easily hidden
3) Very marketable

     People ranging from wealthy Chinese families escaping the Japanese, to wealthy Jewish families escaping the Nazis (both of whose assets were seized), to Marie Antoinette to the czarina of Russia, took jewels with them. The general explained that when the Japanese took Hong Kong in 1941, the local economic system collapsed, and all bank deposits were frozen. The family had lots of rental property in Hong Kong, but the tenants had stopped paying. The economic system reverted to barter. The family did have overseas assets that were intact, but they had no way to get cash out of them. The family found itself on the brink of starvation.
     The family survived because the women traded their jewelry for food and protection. Jewelry in particular had great purchasing power then because the Chinese girlfriends of Japanese military men wanted it. The general did not consider gold a very good store of value, as many people often think, because it was not valued in Hong Kong during the Japanese invasion. There was no demand for it. However, this is assuming one has gold in the event of a foreign military invading one's country. Both gold and silver have a good record of being a hedge against inflation. Since gold and silver oftentimes make up a major part of jewelry, high-quality jewelry overall seems to be a good inflation hedge as well (so to any ladies reading, if your man is concerned about the end of the world occurring, tell him that buying you expensive jewelry will make for an excellent store of wealth should a major crisis really occur :) ).
     Another example the General gave was what happens if, due to terrorism, the electrical grid is shut down. The modern electronic banking system we have also would then shut down. As a result, paper money might lose its value as a medium of exchange, and jewelry might be one of the preferred currencies. Biggs concludes that he doesn't really see jewelry as being a major asset class for serious money. But for being a respository for some wealth, it makes sense. It is good for when being invaded by a foreign army, for when a major economic or financial calamity strikes (such as out-of-control inflation), or for when a total breakdown of law and order occurs and paper wealth becomes worthless.

Why I'm Leaving Goldman Sachs

An employee writes an article in the New York Times on why they are leaving Goldman-Sachs: Why I Am Leaving Goldman Sachs

And here is Goldman Sachs's response: Goldman's Response

     I wonder how much of what he's saying is truth? It isn't surprising that Goldman Sachs disagrees. They most certainly are not going to come out and say, "Yep, he's right, we're all really nothing but a bunch of corrupt bastards..." :D I hope Goldman-Sachs can fix itself if this is the case. It actually brings up some interesting premises though: does GS have any obligation to really be about anything aside from making money? After all, that's the job of the company: to make money for the shareholders. They can do this by peddling junk or by truly seeking to serve the customer, but anything goes as long as it's legal.
     Personally, I think it's a combination of the two. Yes, the job of a business is to make money for the owners, but, businesses should seek to make money morally and ethically (as in, don't peddle junk on people under the guise of it being quality and don't seek to rip people off). Just because you can be unethical doesn't mean that you should be. Being ethical also can help in terms of public relations in the long run. It means that your firm will never enforce the stereotype that people in finance are all just greedy no-goods.
     And a big corporation such as Goldman-Sachs, in particular, should strive to be as moral and ethical as possible. Firms like this are key pillars of the global financial system. They are key pillars of the overall economic system. They are the stewards of capital, and how it is allocated. They should take this role seriously.
     There is often talk about businesses being "good corporate citizens." Some people say that this is nonsense, that the business should focus on making money for the owners, not on meeting some arbitrary definition of being a "good corporate citizen." For the most part, I agree with this. A business need not have to be involved in a bunch of partisan issues that are fashionable so as to be a 'good corporate citizen." What being a good corporate citizen to me means is a business that acts ethically, is moral, that doesn't try to rip people off, that doesn't abuse workers, and so forth. Such a business will not try to make anyone work in unsafe working conditions, and will not put harmful products into food or lead paint in the toys or anything like that, even if it could get away with it. Sadly, this is not how most businesses function, so we have to have regulations (and many of them use regulations to monopolize their industry).
     So for a firm like Goldman-Sachs to be a good corporate citizen, it doesn't need to get involved in issues such as global warming, or environmentalism, or other popular issues, but it should seek to be moral, ethical, not try to rip off people, and take seriously its role as a key pillar of the global economic system.
     It is sad that finance and financiers, one of the most important professions in the existence of humanity, have to have such a bad reputation. It is the lack of financial systems and financial institutions that are why so much of the world is poor, and why the world has been poor throughout so much of history. Finance, when populated by moral people, is to me one of the most noble professions in existence. The premier financial firms should make it a point to set the standard for ethics. But that's probably no more realistic than expecting businesspeople overall to do this!

One Other Point On Iran

One other point I had forgotten to mention that should also be kept in mind when considering a military strike on Iran is that there would be no land war with Iran. Retliation would be through terrorism or through rocket attacks. The United States in particular has major advantages when dealing with Iran in this sense.

Tiger Mom Philosophy on Education

     Some may remember the Tiger Mom, the Chinese woman who wrote the article for the Wall Street Journal that was an excerpt from her book. The article was titled "Why Chinese Mothers Are Superior." In it, she discusses the extreme level of discipline Chinese parents often put on their children to succeed academically, and that it is this, and not any special genetics, that results in Chinese children who come across as math prodigies, music prodigies, and so forth. Just plain old very strict discipline and hard work. She also details her disciplining of her own children, and even how a mini war broke out between her one daughter and she.
     Well the article resulted in the largest number of comments out of any WSJ article ever posted in the site's history. I found the article interesting because I think it points out another aspect of balance regarding education, this time in regards to how to educate your child. Some parents go to one extreme whereby they do not discipline their child/children at all. Whatever grades they get are the grades they get. Sometimes this works fine, as the child is self-driven and will study hard and work hard on their own. Other times though, it leads to a kid with no appreciation for learning or education or hard work or discipline, and who thus doesn't learn anything.
     However, then there is the opposite extreme, the parents who plan out their child's lives with practically military precision, who push the child very hard to excel in all subjects. The thing is, just as the lack of any discipline can result in a child who has no appreciation for learning or education, this extreme discipline method can result in the same over the long-term. You get a child who grows up where they never were able to enjoy learning at all. The only thing learning makes them think about is how they were pressured and horribly disciplined. It is where you can have a child that grows into an adult who has a hatred for classical music, simply because all they remember of classical music is being forced under strict discipline to practice it on an instrument. They never had an opportunity to enjoy it or life in general. This can end up resulting in a person who will revolt against learning for a long time even.
     I myself remember in elementary and high school hating music class and art class. I hated having these things forced on me. I didn't gain my love of art and music until I hit my twenties. The same can apply with other areas of learning I think as well. With a child, especially a young child, a balance is thus needed. Children do need discipline and to have the importance of learning instilled into them, but at the same time, they also need free time, time to play, and probably should not be pressured to be some super student that excells in everything. Create a baseline standard for grades that they must get, but otherwise, then just make it where excelling beyond that is up to them.
     I would think that this would result in a person who grows up having an appreciation of learning and education, but who doesn't outright hate learning or education or any particular subject because of it having been forced onto them in a way where if they do not succeed at it, they fail. I would not parent like a Tiger Mom, but I also wouldn't parent in a way completely devoid of discipline either.

Education

     So I thought I'd write out my thoughts regarding education. I have always found it interesting that there seem to be two ways of thinking about education, one which seems to be practical and the other focused on learning for learning's sake. In America, a country which prides itself on its rugged individualism, the view towards education has often been more practical. As in, learning for learning's sake is all well and good, but if you don't learn a skill to produce something of value on the market, then you are not going to be able to make any money to support yourself. I guess it goes back to the old pioneer spirit, where you had to go out and cultivate the land, grow your own food, build your own home, hunt animals, etc...things like philosophy and art were fine and nice, but those aren't going to get the field plowed.
     I agree wholeheartedly with the importance of practicality in one's education. Even if one wants to earn a great liberal arts education, one still should make sure that when they go to college, they learn something that will be valuable. On the flip-side of the coin, is learning for learning's sake. This is the education you receive that is supposed to enable you to be a good and responsible citizen. For much of history, it seems to be that the two were more balanced: people would work to learn a trade or a acquire a degree in something of practical value, but also understood the importance of being well-grounded in things like the basic workings of government, history, geography, literature, and so forth.
     One thing I've noticed though is that some people are prone to going to extremes with each of these philosophies. On the one hand, you have the people who will only learn something if it is practical, i.e. can make money. This was to a good degree the Roman mindset. Unlike the Greeks, who were into studying mathematics, astronomy, philosophy, poetry, etc...for the sake of expanding their minds, the Romans had no interest whatsoever in fields like mathematics except for its military and commercial value. In modern times, it seems a lot of people have this similar view.
     A person who really had this view was Henry Ford. He was very, very uneducated. His philosophy was that he didn't need any education because he had access to the world's knowledge at the press of a button. To me, this is where this shows the extreme of learning things only of practical value. I mean, "yes," you don't need education in that sense because at any time, you can just call up an expert to provide the knowledge for you. But the problem with this is that, without the foundation provided by a liberal arts education, you are essentially guaranteed to be an idiot in many ways, no matter how crafty you otherwise may be.
     There are multiple reasons for this. For one, a sound liberal arts education doesn't just teach you facts to memorize, it also teaches you how to actually think critically, how to reason critically, skills that you otherwise likely will not have. In addition, it also teaches you things such as history, which is important for the old saying "those who do not know history are doomed to repeat it." It is for these reasons that many elites, if you will, throughout history have sought to limit the level of education that the mass population could obtain. The American public education system, for example, was not originally intended to educate children, it was intended to school them, to delay their development and make them not have critical thinking skills.
     John Taylor Gatto, a man who taught in the New York City public school system for multiple decades, and who also was the New York City and New York State Teacher of the Year, has written multiple books about this subject, one of the best being called The Underground History of American Education: An Intimate Investigation Into the Prison of Modern Schooling. Essentially, the book is about how the people involved with the creation of the American public school system were not in it to design a system that could result in a learned, critically-thinking populace, but rather to create a populace malleable to the requirements of big government and big business (this was the era of the large, inhumane, bureaucratic, machine-like big business corporation). It also ties into the whole history of ideas such as scientific management, how to manage workers properly.
     Many do not know it, but it was big business that pushed to end child labor from behind the scenes. This wasn't because big business cared about children, but because child labor is one of the things that will make a child grow up very quickly. You take a fourteen year-old and have him out plowing the field, hunting, working a job, etc...and by twenty-five, he's a much more responsible, mature adult then the stereotypical twenty-something of today. Big business did not want workers who could think critically. It wanted workers who would obey and follow orders. It also wanted a population malleable to marketing so that it could create a lot of consumer products to market to them. And of course big government, which goes hand-in-hand with big business, wanted a malleable population so that they could easily win votes (the last thing politicians want is a critically-thinking populace!). It also worked well for military as well. It was a top-down mindset, in that you wanted the enlisted soldiers to not think, just to follow orders. This came from the old method of warfare where you'd have the soldiers marching in rows with their muskets at each other, and had to be able to do so even when the other side would stop and open fire or fire cannons. The officers would stand off to the side, and command the troops. In modern warfare, such non-thinking soldiers aren't very workable. One of the advantages modern Western militaries have is that even the lowliest Private is allowed to think for themself to a degree and be creative in following orders.
     Now in saying this about the public school system being "designed" to limit critical thinking skills, I'm not saying that there's some secret cabal somewhere that plots how to design the public school system to brainwash Americans. That is not the case. It's just that this was the over-riding philosophy among many of the people involved in designing the school system. This whole philosophy changed a good deal when the Space Race kicked in, where all of a sudden, the government realized it needed people who could think and who were educated, and lots of them, and hence there was the push for all Ameircans to go to college and studying mathematics, science, engineering, technology, and so forth, in order to prevent the Soviets from beating out America.
     Today's public school system involves some leftover remnants of the old design that was geared towards social control. For example: the constant changing of classrooms in public schools. You go to a class, the bell rings at the end, and you go to another classroom. In private schools, that isn't how it works. Each grade has their own classroom. T Boon Pickens, in his book The First Billion Is the Hardest, inadverdently points out how the public school system was designed for social control. He pointed out that in the 1950s, when you went to work as an employee for a company, it was often just like public school. You'd go into work in the morning, have a bit of free time, then the bell would ring, you'd have a certain number of minutes to be at your desk, and then the bell would ring again, signaling work had begun. Bells would ring for lunch breaks and so forth. People thought nothing of it, because you had been conditioned to respond according to this like a robot from the first grade.
     This method of schooling was derived from the Prussian system of education, which had three levels of education, one for the working masses, another for the professionals in society, and then the full classical education for the ruling elite. This system was very good at producing soldiers and employees. This school divide still exists to a degree even today in America, where poorer and middle-class children must go to public school, while more affluent and wealthy children can go to private schools, where there is none of this business of bells and changing classes.
     One interesting thing to think about is how simplified much of the modern English language has become. Seriously, try reading a book written in English during the 1800s or beforehand. It's virtually impossible! Everyone talks so wordy. Oftentimes modern versions of such books have notes in them so that you can understand just what the heck they are actually saying. If an educated person from these times was to come to modern America and look at our current version of English, they'd probably wonder what happened to the language. A person who naturally could read and easily understand the incredibly wordy prose of those times would probably have no problem picking up on the more simplified English of modern times. But for a person who has only known the simplified English, learning the wordy English is tough.
     So going back to my original point, one needs aspects of a liberal education as well, even if one is mostly concerned with having a practical education and otherwise isn't interested in learning. Without the foundation provided by the liberal education, one isn't going to have the requisite critical-thinking skills and knowledge one needs to be a good citizen. Where Henry Ford's philosophy comes into play is when you're talking various forms of practical knowledge that nobody really needs to know unless you just really have an interest in it or its your profession. For example, I do not need to know how to design a jet engine. Or what materials it must be made out of. Or how to knit a sweater. Or how to land an aircraft. Or how to wire a building. And so on. You call an expert for that kind of thing. But EVERYONE should be well-read and learned in the basics of government, history, geography, rhetoric, grammar, the important works of literature, and I would also incorporate economics.
     Economics is one of those subjects that one must know both ways of thinking about, because otherwise, if all one knows is right-leaning libertarian economic thought, then any left-leaning person is a socialist in their eyes, and to a person who only knows left-leaning economic thought, any right-leaning person just "doesn't care" in their eyes (because to them every problem can be solved by more government). Unfortunately, most people seem to know either nothing about economics or just one way of thinking about it, which is what leads to much of hyper-partisanship we have today. For too many people as well, economics becomes a set of talking points for promoting a particular political agenda as opposed to being a way of just trying to understand how the economy and society actually functions.
     Now some may reason, "Well I can understand learning the basic foundation mentioned, but otherwise, I see no reason for continued learning and education, except with regards to what my profession requires." To this I disagree. To be a well-rounded person, one should always keep learning, as it exercises the brain. Another important thing about studying various subjects is how it further teaches you to think. For example, the law. Studying the law will teach one to think in different ways and to reason in different ways. Economics is no different. Studying economics will teach one to think and to reason in ways they had never fathomed before. What's especially neat is if you read two opposing points-of-view in economics and yet both of them seem to make sense! Mathematics is the same. It will teach you to think and to reason in different ways, as creativity is needed in solving math problems. Philosophy, that subject alone will wrack your brain when you study it. Physics as well. Learning to solve physics problems involves a tremendous amount of creative thinking and problem-solving. Computer science, that too, involves some rigorous thinking about how to solve problems.
     And so on. Now I'm not saying one must study all those subjects, but I mean continually reading and studying different areas will teach your brain to think in all sorts of new ways that you previously might never have even considered. And all of the above is ignoring the whole wide world of the arts as well, subjects like music, painting, architecture, etc...which are very fascinating fields in and of themselves.
     I was mentioning about how there are extremes, starting with the extreme of people who only want knowledge for "practical" purposes, otherwise whom find learning to be a waste of time. Well this goes in the opposite direction as well, with people who only want to learn the liberal arts education, but find learning anything practical to be beneath them. That is a bad mindset to have. One should always make it a point to have a practical skill of some type, as society functions off of the practical skills.
     Overall, what one should have is a balance. One should make sure to learn practical knowledge, both for making a living and just for getting through life (things like knowing how to change a tire, fix the pipe under the sink, etc...), but at the same time, should also make sure to learn about other subjects that increase their education and critical-thinking skills. This makes for a very well-rounded person. One other added benefit of being educated is that it will smash down many a class barrier you might encounter. You could be a plumber eating dinner with a group of professors and wealthy Wall Streeters let's say, but if you can talk as fluently about subjects like the Greek classics, Shakespeare, history, government, the economy, etc...and hold your own fine against these people who may have great formal schooling, well then they know that the only difference between you and them is that they have more money then you. So if you had to go to some fancy party with people who think you will be some idiot, you can show them that, while you may not be a lawyer or doctor or make their kind of money, you are equal to them in knowledge.

Beautiful Libraries

Here is an awesome website about libraries: Beautiful Libraries

And here is a video of Jay Walker's private library:

Will Israel Attack Iran?

     I am of the opinion that Iran's nuclear program is not for peaceful purposes. It is a dictatorial government that used force to put down an uprising from its own people, and despite harsh sanctions, it continues to press on with pursuing its nuclear program. That is not the behavior of a country that is pursuing a peaceful nuclear program. The problem is, what else to do about Iran? Israel sees Iran's pursuit of a nuclear weapon as a fundamental threat to its existence, so the concern right now is, will or when Israel attack Iran?
     Israel's fear is not that Iran will acquire a nuclear weapon soon, but rather that they will reach a point after which they have secured their nuclear program to the degree that they cannot be stopped. The thing about Iran is that striking it isn't some simple one-strike operation. There isn't one facility and it isn't a simple matter of flying over the border. Striking Iran's nuclear program facilities would mean hitting multiple targets multiple times. Israel would also have to fly through the airspace of countries that would likely not grant it such permission in the first place just to reach Iran. All of this will take a lot of aircraft. They need strike aircraft to carry the weapons to strike Iran's facilities. Then they need fighter planes to protect the strike aircraft. They also need aircraft to jam Iran's air defenses. And because of the distance, they need refueling tankers, which can refuel all of the aircraft so they can fly back to Israel. They then need fighter planes to protect those refueling tankers.
     So the operation alone is a huge risk. Then there are Iran's various ways of retaliating, which could cause all hell in the region to break out. The current American administration does not believe that the Iranians are as close to reaching this point of no return regarding their nuclear program as the Israelis believe. I also think there is an element of politics regarding President Obama's behavior on Iran. Attacking Iran right now could well be political suicide for him. If he decides Iran must be attacked after he is re-elected (assuming he is re-elected), well then yes his poll ratings may tank, but he's already in for his second term (I say political suicide because the American people do not want any more major U.S. military involvements and especially with a country like Iran, where attacking it could result in oil prices skyrocketing where we end up with $5 or higher gasoline for example).
      I believe that as bad an attack on Iran would be, that Iran getting a nuclear weapon is a far greater danger. Iran acquiring a nuclear weapon would result in the following:

1) A likely arms race in the region to acquire nuclear weapons among other nations

2) Iran will be able to threaten closing the Strait of Hormuz. Right now, they can threaten it on paper, but the U.S. Navy could force it back open and if attacked by the Iranians, that would be an act of war, which would give the U.S. the right to attack the Iranian military outright. But with a nuclear-armed Iran, it makes it a whole new ballgame.

3) Iran could possibly attack Israel with a nuclear attack

     I sometimes wonder if the current situation with Iran is akin to the eve of World War II with Adolf Hitler and Nazi Germany. Hitler wrote a book saying what he was planning to do; it wasn't a big secret. Iran isn't all that different. The thing is, the world was so terrified of another war, because of World War I having been so recent, that much of Europe deluded itself into thinking Hitler would never start a war. Similarly, it seems many people now are frightened of another major military conflict because of what we just went through with Iraq and are still dealing with in Afghanistan. But in being afraid of this, I wonder if they are deluding themselves into thinking that Iran does not plan to use a nuclear weapon to destroy Israel or that the fears about a nuclear-armed Iran are overblown. Another fear I think is related to how the U.S. was so sure that Saddam Hussein had chemical and biological weapons and then it turned out, he didn't. He did have the ability to start producing such weapons quickly if he wanted, but the actual weapons, he didn't have. It was a major intelligence failure. Now many wonder if we are repeating the same thing with Iran. The kicker is that historically, the U.S. has tended to under-estimate the enemy regarding what weapons it had, rather than to over-estimate it. An example could be the Soviet Union, which developed the largest, most extensive biological weapons program in human history (this done after the United States and the Soviets had signed an agreement not to continue devleoping such weapons).
     Personally, I do not think that the fears about a nuclear-armed Iran are overblown. One thing history has taught us is that a lot of things can seem completely wacky and unrealistic until they actually happen. Terrorists hijacking jetliners and crashing them into major American buildings? Sounds like a plot to a bad made-for-TV action movie. The U.S.financial system almost completely failing? Pure scaremongering. A nuclear powerplant experiencing an actual meltdown? Can't happen. Yet all of these things have happened. Now the thinking seems to be, "Israel getting hit with a nuclear weapon from an aggressive Iran?" Won't happen. Until it does, and then the world will wonder how on Earth it ever let such a horror happen.
     I would hope that in the end, neither Israel or the United States has to attack Iran, but I do hope that if the Israelis go ahead with it, that they are successful. The U.S. will probably be Israel's sole ally if it does that, because the rest of the world, which already tends to view Israel as the problem in the region, is probably going to go berserk if Israel attacks and oil prices skyrocket. Israel could fail and suffer major losses in such an attack, but even if successful, it will likely face heavy criticism globally and retaliation from Iran in various ways.
     I do wonder however if the other countries in the region that do not like Israel, but even moreso do not want Iran to acquire a nuclear weapon, might give Israel a pass if it strikes Iran. Or maybe criticize it publicly, while privately liking that it delayed Iran in getting a nuke (if successful). Some have speculated as to whether Saudi Arabia would allow Israel to use its airspace to travel to Iran. The Saudis don't like Israel, but they also don't like Iran (especially considering how Iran recently tried to assassinate the Saudi ambassador to the United States). Iran is infamous for hating the United States and Israel, but being Shia Islam, it also HATES Saudi Arabia, which is Sunni. And Saudi Arabia in return hates Iran. So maybe this could be one of those "the enemy of my enemy is my friend" instances. There is also the added benefit that Saudi Arabia and the United States have fairly decent relations, I'd assume mostly because of oil (we want oil and they like our money), so perhaps this could also aid in the Saudis being willing to allow the Israelis to use their airspace.
 

Would Oil Independence Really Make a Difference?

     So one thing I have been pondering as of late is, would oil independence from the Middle East, on the part of the United States, really change anything? Everyone talks about "weening us off of foreign oil," so that if chaos breaks out in the Middle East, we wouldn't have any worries. Saudi Arabia cuts production? No biggie. Iran decides to close the Strait of Hormuz (where a massive amount of the global supply of oil passes through every day)? No problem. The flaw with this however, as I see it, is that this view ignores that oil is priced globally and that we have a global economy. The price of gasoline is to a good deal determined by the global supply of crude oil. Now as it is, the United States already gets most of its oil from Canada and Mexico (we don't get most of it from the Middle East as many think, it's just that the ME supplies enough oil to America to really cause harm if the supply were to be cut, and it supplies a major portion of the global supply of oil). So even if the United States was able, through increased domestic production let's say, to make it where we are independent of ME oil, where our oil comes solely from domestic production, Canada, and Mexico, well how does that separate us from the global oil supply? If chaos occurs in the Middle East that cuts the supply of oil there, that still does at least two things:

1) Yanks up the global price of crude oil, which will affect oil and gas prices in the United States

2) Tanks the rest of the global economy that is flat-out cut off from the oil it needs, which then in turn tanks the American economy as well.

So the only real solution to the problem of the Middle East I would think is to make the entire Western world independent of Middle Eastern oil. But I do not see that happening anytime soon.