It is sometimes said that the cure is worse than the disease; however, sometimes the cure IS the disease.<\/p>\n\t
I was working in a benefits office of a large university and there was a lady who got a customer service award.\u00a0 The story was told that employees would call the benefits office frantic that the doctor told them they didn’t have coverage.\u00a0 She would scramble about and get them a confirmation of coverage, contact the carriers…fix everything.\u00a0 That is great customer service.\u00a0 The VP of Benefits turned to me and said, “The problem is that she was the one that forgot to enroll them in the first place because she is three weeks behind.\u00a0 If she’d do her job, there would be no need for her great customer service responsiveness.”<\/p>\n\t
Protection and Security:<\/strong><\/p>\n\t The government is spending trillions on our security.\u00a0 They are fighting ongoing wars in Iraq and Afghanistan; they are wiretapping us domestically; they are tracking us on our cell phones, monitoring us on Facebook; groping us as we go through airport security; censoring\/blocking website they deem inappropriate, etc., etc.<\/p>\n\t Let me simply point out who it is we need protection from (hint:\u00a0 it is not terrorists):<\/em><\/p>\n\t If we look at human history, the story is rarely of the government protecting its people from some external threat.\u00a0 History teaches us that the threat of tyranny comes most often from the government itself.<\/strong> The framers of the Constitution had this concept specifically in mind when they created our government:\u00a0 Limited government (see the 10th amendment) to protect us from the government.\u00a0 We have the right to bear arms so the government cannot disarm us in case we would like to overthrow the government (yes, that is what the founding fathers had in mind).<\/p>\n\t I previously mentioned that if the financial sector’s main purpose is to assess and hedge risk and they themselves are the largest risk, then the only sensible solution is to pack up and go home.\u00a0 Similarly, if the government’s aim is to protect us then they would be best served by doing almost nothing<\/strong>….since history shows over and over that the government itself is the largest threat to our freedom.<\/p>\n\t Saving the economy, Inflation, and the Fed<\/strong>:<\/p>\n\t We are told the Fed needs autonomy and power to intervene in the economy to save the economy.\u00a0 As President Bush said, “I’ve abandoned free-market principles to save the free market system.”<\/p>\n\t That is a great story (and a bizarre quote).<\/p>\n\t I will ask why the economy needs saving in the first place?<\/strong> The Fed created easy money that fueled an asset (housing) bubble.\u00a0 The government spends unfunded trillions on war that creates a budget crisis.<\/p>\n\t The government creates the economic conditions from which we need to be saved<\/strong>.\u00a0 Indeed, they are the largest player in the economy and thus the one most able to create imbalances which cause crisis.\u00a0 Very few other players have the market power to create a deep business cycle.\u00a0 Very few other players could ever be considered rule makers or market movers.<\/p>\n\t Consider inflation.\u00a0 Inflation is not caused by a rise in prices; it is not caused by increasing wages.\u00a0 Those are symptoms, not causes.\u00a0 It is caused originally by some expansion of the money supply (indeed there could be no inflation without an increase in the money supply).\u00a0 The government\/Fed controls the money supply.<\/p>\n\t When the government tells us it is fighting inflation, it is mainly fighting itself,<\/em> <\/strong>since they are the party that must take the initial steps.\u00a0 The government gets to create and spend money now when it is worth more and when it leaks out into the general economy as inflation we spend the money later when it is worth less.\u00a0 Inflation is a tax on savings.\u00a0 The tax goes to the government to spend now when the money is still worth more.<\/p>\n\t