Americanly Yours

I recently read Peter and Andrew Schiff’s new book, .”  I am a big fan of Peter Schiff and was excited about reading this book.  Peter Schiff is an economist who is famous for predicting the financial meltdown in advance.  Here is a great video of him making predictions in advance of the meltdown.  He is even laughed at by the other commentators on CNBC and FOX for implying that there was a housing bubble only months before the market crashed.  Well known economists including Ben Stein and Arthur Laffer were among those mocking Schiff.  Interestingly enough, the people laughing at him selected Washington Mutual, Bear Stearns, and Merrill Lynch as great stock picks (all of those companies are now out of business).

This book is a simply written, illustrated allegory which details how economies grow and what can cause economic collapse.  The book begins with three men who are stranded on an isolated island.  The men spend all day fishing just to catch enough fish to barely survive.  After a time, one of the men underconsumes and is able to use his savings to increase the number of fish that he catches.  From this action, an island economy is born.

The story continues for generations and generations (immigrants eventually come to the island) as the island’s economy continues to develop.  I will refrain from giving specific details about the economic expansion so as not to ruin this book.

The chapters contain “Reality Checks” which simply relate the material in the chapter to real life by defining the concepts which are outlined.  In these short sections, the Schiffs explain things like underconsumption, productivity, savings, risk, and so on.  The “Reality Checks” help readers who may have little or no understanding of economics understand basic economics principles.

At the end of each section is a much more detailed (but still simple and easy to understand) section called “Takeaway.”  These sections elaborate on the lessons from the chapter and give further explanation of the underlying economic principles.  They greatly enhance the book by providing the reader with a nice overview as well as a great segue to the next chapter.  The “Reality Check” and “Takeaway” sections both help move the story along and are features which would be great in other books on economics.

The first 5 chapters of this book are absolutely amazing.  The Schiffs do an excellent job of using humor to make reading about economics fun and easy to follow.  They explain the causes of a growing economy (and the effects of a growing economy on society) in a manner that is easy for anyone to understand, regardless of their economic background.

In chapter 6, however, things took a slight turn for the worst.  In this chapter, the Schiffs explain the foundation of a banking system.  I have heard Peter Schiff give speeches on this in the past–his speeches are great and include detailed information on the historical evolution of banking.  It is always interesting to hear Schiff speak about this and I wish that he had included more of this information in his book.  For some reason or another, the Schiffs do not tell the full story of the evolution of the banking system.  This is somewhat perplexing, as he wrote about this quite nicely in his bestselling (and highly recommended by me) book, Crash Proof.  I have also seen him give numerous speeches on this subject, all of which were great speeches which gave this full history.  The failure to include this can certainly be excused, as the Schiffs’ book was surely intended to be a brief, simple overview of how an economy works.

The “Takeaway” section of chapter 6 was also somewhat perplexing.  There was a disconnect between the material in the chapter and the “Takeaway” section which is likely to confuse some readers.  In this section, the Schiffs launch an attack on the Federal Reserve system without explaining to the reader exactly how this ties in with the information in the early part of the chapter.  While I fully agree with the Schiffs on the Federal Reserve, an uninformed reader might have a little trouble understanding the Schiffs’ early critiques of the Federal Reserve System.  To their credit, however, the Schiffs do properly explain this later.

I do want to point out to my reader that this chapter is my only real criticism of the book and that while it is worth pointing out, it does not take much away from what is truly an excellent book.

Following this section, the Schiffs continue to brilliantly explain the evolution of a developing economy into a major economic player.  While the time line is a little off (something that the Schiffs warn the readers of in the introduction), the Schiffs paint a largely accurate picture of the history of the American economy and the growth of the American government (especially with regards to its intervention in the economy).

I wont give away the ending, but the economy in the book suffers a fate similar to that of the American economy during the current economic crisis–the title promises to explain how an economy crashes, so I dont think that Im giving anything away.  However, the Schiffs looks into the future and offers a glimpse of what the future of the American economy might look like if we do not quickly enact sound monetary policies.  Given Peter Schiff’s history of correctly predicting the course of the economy, his prediction is certainly worth taking into account.

My rating:

Strongly recommend:  9/10

Americanly Yours,

Phred Barnet

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My friend Ben sent me an article about this story.

The article is about a new rule for an Ottawa youth soccer league which stipulates that if a team leads by five goals, they automatically lose!  The league previously had a “mercy rule” which sought to prevent humiliation by calling the game when a team led by 5 and awarding that team with the victory.  There is at least some sense in this type of rule–there is definitely an argument against making kids feeling bad about themselves by allowing a team to lose by 10, 20, or 30 goals.

When I played baseball, there was a sort of mercy rule: no team could score more than 10 runs in an inning.  But even so, scoring a lot of runs didnt cause a team to lose–it didnt even cause the game to be called (I remember beating the Spartans 28-3).

But, this new rule is just plain wrong.  It uses perverse incentives to send children the wrong message, punishing good teams and rewarding bad teams.

Under this rule, a team that is winning 4-0 is in the lead, but if they score one more goal, they are losers.  But, what about that poor child who excitedly charges down the field and scores the fifth goal for the team.  By doing what he has been taught by his coach, he has just cost his team their victory.  Surely, his friends will give him hell after the game and make him feel bad for scoring.

Even worse: under this rule, a team that was down by 4 goals could easily kick the ball into their OWN goal–AND GIVE THEIR TEAM AN EASY WIN!

This isnt what youth sports are about.  Youth sports are about teaching children to work with others, as a team towards a common goal. What kind of message does it send to children to award the team with the fewest points the victory and turn the team with the most points into losers?

We can compare sports to economics in one important regard.  Wins and losses are little different from profits and losses.  Just as a profit is a signal to a company that it is succeeding and doing things right, a win is a signal to a team that it is succeeding and doing things right.  The opposite is true for losses.  People take actions that tend to offer them the most rewards; a profitable company will repeat the actions that brought it these profits, and similarly, a victorious team will repeat the actions that made it victorious.  I repeat:  What kind of message does it send to children to award the team with the fewest points the victory and turn the team with the most points into losers?

Dubbs Galt commented to me about this issue: “Today, the message from the youth sports egalitarians is that winning and losing is everything – only that any drive for winning should be replaced with a feeling of shame for making someone else lose. These bastardizers of morals want everyone to feel the benefits of an unearned effect while completely dismissing its relationship to any real cause.

As a both a former player and coach of youth baseball, I can promise that a day later kids don’t remember that they lost 11-5. But, the lessons you learn from preparing for competition, laying it on the line during the game, and even the lessons you learn from losing badly…..these lessons last a lifetime.”

This rule sends the wrong message.  It turns losers into winners and makes winners into losers.

Imagine if a similar rule was used in other sports.  A similar rule in baseball might cause a child to get booed by his own teammates after he hit a grand slam (which cost the team the game).  A similar rule in basketball could cause a child who mistakenly stepped behind the 3 point to cost his team the game.  This is insanity.

I am glad to report that the entire world hasnt gone completely stupid, however.  When I spoke with former New Mexico State QB, Carl Scaffidi about this rule, he told me “if I was a coach, I would strive to go 0-20 with 100 goals.”

Americanly Yours,

Phred Barnet

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A equals A.  Existence exists.  Things are as they are.  Truths are true.  We have the ability to determine the truth or falsehood of our judgments in relation to the facts of reality.

If the above sentences seem so obviously true, ask yourself why we have found ourselves in this mess.  Ask yourself why politicians (Republican as well as Democratic, liberal as well as conservative) continue to push for programs that fly in the face of logic, reason, and ultimately reality.

We fight “wars for peace,” heavily regulate the economy in an effort to increase economic activity, often both heavily subsidize and heavily tax the same product (ie, tobacco), redistribute wealth to promote “economic efficiency,” and so on.  Clearly, our leaders have failed to grasp the simple truths contained in the first line of this article.

If our “leaders” have failed, however, it is because We the People have failed by selecting illogical people to act as our overseers.

If we want to see real change in our lifetimes–a change in the right direction, towards individual Liberty and a respect for logic, reason, and ethics, we must make the change in ourselves first.

There are many ways to accomplish this goal in our society, including grassroots political activism, developing workable alternatives to the present system, and education.

Economic activity depends on a division of labor–when people specialize in areas in which they are proficient, society can take on more tasks and advance faster than it could if everyone tried to do everything themselves.  Similarly, all of the above methods of achieving Liberty must be employed by those best suited to these tasks.

While all of these methods are important, it is my opinion that education is the most important.  Education is the cornerstone of good policy.  Education is also “the gift that keeps on giving.”  If I educate someone about the fundamentals of economics, he or she can then turn around and use their abilities and new knowledge to educate people they know.

It is simply impossible to achieve a society based on natural law, the principles of self ownership, and respect for private property if people are not educated about these concepts.

Although I dabble in philosophy, my website focuses mainly on economics.  But just as we must specialize our labor if we want economic growth and we must specialize in our methods of promoting Liberty if we wish to achieve this goal, we must specialize in educating and informing people about the ideas of Liberty if we wish for our educational efforts to be successful.

If all websites promoting Liberty were written and constructed in the same manner and focused on the same topics, we would only reach the same few people.  Therefore, it is important and even vital for this movement that different types of educational and informational resources are developed.

With the above in mind, I am pleased to present yall with an exciting new resource.  My friend, Dubbs Galt has spent a considerable amount of time developing a great new website.

A=A is a new, comprehensive resource designed to educate people about logic, reason, philosophy, economics, and natural law.

This site has a ton of resources, including information about how we got into this economic crisis, a detailed and comprehensive section on philosophy, a section on the importance of the study of sound economics (based on the study of human action), and a great section full of resources which will allow you to educate yourself.  Dubbs is a very talented writer who has the unique ability to break issues down to their core principles, investigate these principles, and then reconstruct the issues themselves.

There is much more to this site than what little I have described and I urge you to check it out.  In the coming weeks and months, Dubbs plans to further develop his already excellent site, so I urge you to continue to follow A=A as it develops.

Americanly Yours,

Phred Barnet

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I was able to finish both of my Thomas Sowell books yesterday.  That man is a great thinker.

Black Rednecks and White Liberals was a very interesting sociological and historical study of different cultures and peoples throughout the globe.  It is filled with virtually unknown (or un-talked about) facts and historical anecdotes.  If you are intersted in history or culture, I recommend this book.

I recommended Basic Economics:  A Citizen’s Guide To The Economy before even finishing it.  This book is a must read for anyone who is even slightly interested in economics, business, or politics.  It explains complex things like markets, wages, and trade in a very simple manner–easy enough for a child to understand.  Dr. Sowell contrasts properties of freer economies with those of more tightly controlled economies like the former Soviet Union. Most importantly, he explains simply and clearly the importance of pricing and how pricing serves as a conveyor of information. Read this book yourself, or give it to that friend you have who doesnt understand simple economics.

I have started reading two new books.

The first is Thomas Paine’s Common Sense. This book was released as a pamphlet in 1776 and immediately became very popular. This book was tremendously important. I read this book about a year ago, but I felt the need to reread it. Im sure that everybody has heard of this book, but I doubt most of yall have read it. You can get a used copy for less than $4. Well worth it.

The second book is Dr. Ron Paul’s Revolution: A Manifesto. Ive heard good things about this one.

If you decide to buy any of the books above, please buy them through my links. If there are any other books that you are thinking about buying, I have placed an Amazon search bar on the top right side of the page. Thanks!

Americanly Yours,

Phred Barnet

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I have written about Dr. Thomas Sowell here before.  I think he is possibly the smartest man in the country.  I scoured the interweb and found a bunch of great quotes from him.  Enjoy.

“People who talk incessantly about “change” are often dogmatically set in their ways.  They want to change other people.”

“Much of the social history of the Western world over the past three decades has involved replacing what worked with what sounded good.  In area after area – crime, education, housing, race relations – the situation has gotten worse after the bright new theories were put into operation.  The amazing thing is that this history of failure and disaster has neither discouraged the social engineers nor discredited them.”

“One of the sad signs of our times is that we have demonized those who produce, subsidized those who refuse to produce, and canonized those who complain.”

“The next time some academics tell you how important ‘diversity’ is, ask how many Republicans there are in their sociology department.”

“The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it.  The first lesson of politics is to disregard the first lesson of economics.”

“Prices are important not because money is considered paramount but because prices are a fast and effective conveyor of information through a vast society in which fragmented knowledge must be coordinated.”

“A recently reprinted memoir by Frederick Douglass has footnotes explaining what words like ‘arraigned,’ ‘curried’ and ‘exculpate’ meant, and explaining who Job was.   In other words, this man who was born a slave and never went to school educated himself to the point where his words now have to be explained to today’s expensively under-educated generation.”

“No matter how disastrously some policy has turned out, anyone who criticizes it can expect to hear: “But what would you replace it with?”  When you put out a fire, what do you replace it with?”

“Capitalism knows only one color: that color is green; all else is necessarily subservient to it, hence, race, gender and ethnicity cannot be considered within it.“

“Each new generation born is in effect an invasion of civilization by little barbarians, who must be civilized before it is too late.”

“If you are not prepared to use force to defend civilization, then be prepared to accept barbarism.”

“If you have always believed that everyone should play by the same rules and be judged by the same standards, that would have gotten you labeled a radical 60 years ago, a liberal 30 years ago and a racist today.”

“It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer it.”

“Liberals seem to assume that, if you don’t believe in their particular political solutions, then you don’t really care about the people that they claim to want to help.”

“Mistakes can be corrected by those who pay attention to facts but dogmatism will not be corrected by those who are wedded to a vision.”

“Mystical references to society and its programs to help may warm the hearts of the gullible but what it really means is putting more power in the hands of bureaucrats.”

“Prices are important not because money is considered paramount but because prices are a fast and effective conveyor of information through a vast society in which fragmented knowledge must be coordinated.”

“Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it.”

“Tariffs that save jobs in the steel industry mean higher steel prices, which in turn means fewer sales of American steel products around the world and losses of far more jobs than are saved.”

“The most basic question is not what is best, but who shall decide what is best.”

“The most fundamental fact about the ideas of the political left is that they do not work.   Therefore we should not be surprised to find the left concentrated in institutions where ideas do not have to work in order to survive.”

“The real goal should be reduced government spending, rather than balanced budgets achieved by ever rising tax rates to cover ever rising spending.”

“Too much of what is called “education” is little more than an expensive isolation from reality.”

“What ‘multiculturalism’ boils down to is that you can praise any culture in the world except Western culture – and you cannot blame any culture in the world except Western culture.”

“Would you bet your paycheck on a weather forecast for tomorrow?  If not, then why should this country bet billions on global warming predictions that have even less foundation?”

“The assumption that spending more of the taxpayer’s money will make things better has survived all kinds of evidence that it has made things worse.   The black family- which survived slavery, discrimination, poverty, wars and depressions- began to come apart as the federal government moved in with its well-financed programs to “help.””

“Most people who read “The Communist Manifesto” probably have no idea that it was written by a couple of young men who had never worked a day in their lives, and who nevertheless spoke boldly in the name of “the workers”.”

“Despite a voluminous and often fervent literature on “income distribution,” the cold fact is that most income is not distributed: It is earned.”

“It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.” [bureaucrats]

What is ominous is the ease with which some people go from saying that they don’t like something to saying that the government should forbid it.  When you go down that road, don’t expect freedom to survive very long.

Americanly Yours,

Phred Barnet

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