Monday, August 31, 2009

Thomas Sowell: The Pattern of Failure

A coworker of mine who is a Ron Paul supporter gave me a book to read. Already 2 chapters into the book and it is blowing me away. The book is The Vision of the Anointed: Self-Congratulation as a Basis for Social Policy by Thomas Sowell

The interesting perspective I see is that it was written in 1996 and the ideas still apply today as they did in the past. I will give you an example how we are still seeing his thoughts played out. He starts off by pointing out the elitist, government-expanding crusaders share several key elements:

The following excepts are from The Vision of the Anointed by Thomas Sowell ©1996

1. Assertion of a great danger to the whole society, a danger to which the masses of people are oblivious.

2. An urgent need for government action to avert impending catastrophe.

3. A need for government to drastically curtail the dangerous behavior of the many, in response to the prescient conclusions of the few.

4. A disdainful dismissal of arguments to the contrary as either uninformed, irresponsible, or motivated by unworthy purposes.

He also points out patterns that have developed among the anointed for dealing with repeated failures of policies based on their vision.

The "Crisis"

Some situation exists, whose negative aspects the anointed propose to eliminate. Such a situation is routinely characterized as a "crisis," even though all human situations have negative aspects, and even though evidence is seldom asked or given to show how the situation at hand is either uniquely bad or threatening to get worse. Sometimes the situation described as a "crisis" has in fact already been getting better for years.

The "Solution"
Policies to end the "crisis" are advocated by the anointed, who say that these policies will lead to beneficial result A. Critics say that these policies will lead to detrimental result Z. The anointed dismiss these latter claims as absurd and "simplistic," if not dishonest.

The Results
The policies are instituted and lead to detrimental result Z.

The Response
Those who attribute detrimental result Z to the policies instituted are dismissed as "simplistic" for ignoring the "complexities" involved, as "many factors" went into determining the outcome. The burden of proof is put on the critics to demonstrate to a certainty that these policies alone were the only possible cause of the worsening that occurred. No burden of proof whatever is put on those who had so confidently predicted improvement. Indeed, it is often asserted that things would have been even worse, were it not for the wonderful programs that mitigated the inevitable damage from other factors.

There you have it...

Friday, August 28, 2009

Thomas Jefferson on Private Banks/FED

"If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."

-- Thomas Jefferson

Friday, August 21, 2009

Twits of the Week



Thursday, August 20, 2009

Inflation a Real Threat: Warren Buffett & Peter Schiff

Buffett in his latest New York Time Op-Ed says that the federal debt poses a serious risk to our economy. He writes:

Legislators will correctly perceive that either raising taxes or cutting expenditures will threaten their re-election. To avoid this fate, they can opt for high rates of inflation, which never require a recorded vote and cannot be attributed to a specific action that any elected official takes. In fact, John Maynard Keynes long ago laid out a road map for political survival amid an economic disaster of just this sort: “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens*.... The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

He also goes on to say:

Our immediate problem is to get our country back on its feet and flourishing — “whatever it takes” still makes sense. Once recovery is gained, however, Congress must end the rise in the debt-to-G.D.P. ratio and keep our growth in obligations in line with our growth in resources.

Really? I listen to Buffett, but just don't get his logic sometimes. In the US, debts are way to high and demand is down, it cannot come back anytime soon because of consumer debt and unemployment. Like Schiff says we need a natural correction.

This whole Keynesian economics has to stop and it has to stop now! Why can people not see what is happening all around us? Why can they not think for themselves and not listen to the media? I ask anyone seriously interested in the wealth of this nation and the wealth of yourself to go and study the Austrian School of economic principles.

*actually one thing I agree with John M Keynes

Wednesday, August 19, 2009

The Culture that Spawned the Crisis


The Seventh Annual John M. Templeton, Jr. Lecture on Economic Liberties and the Constitution considers the social, cultural, and moral causes of the current financial crisis in the United States.

In doing so, the Lecture revisits basic lending principles and examines our nation's skyrocketing debt, our lack of savings, and basic understanding of economic principles within the household, as well as corporate America, and the effects of our political and legislative effort to reduce discriminatory credit practices.

Tuesday, August 18, 2009

Tocqueville - Democracy In America

This week's quote of the week comes from a book I am slowly reading: Democracy in America by Alexis de Tocqueville. It is a book about the United States in the 1830s and its strengths and weaknesses.

Tocqueville speculates on the future of democracy in the United States, discussing possible threats to democracy and possible dangers of democracy. These include his belief that democracy has a tendency to degenerate into "soft despotism" as well as the risk of developing a tyranny of the majority.

I will not lie and say it is an easy read, but it is very fascinating to read some of his predictions, some which have played and some that look like they are headed that way. It is really teaching me the history of America from a perspective I have never been taught or even thought of. So even if you do not feel like reading the book, I would highly suggest checking out the wiki page and browse around it and its links.

The following excepts are from Democracy in America by Alexis de Tocqueville ©1835

"Look where you will, you will never find true power among men except in the free concurrence of their wills."

"He(the American) trusts fearlessly in his own powers, which seem to him sufficient for everything. Suppose that an individual thinks of some enterprise, and that enterprise has a direct bearing on the welfare of society; it does not come into his head to appeal to public authority for its help. He publishes his plan, offers to carry it out, summons other individuals to aid his efforts, and personally struggles against all obstacles. No doubt he is often less successful than the state would have been in his place, but in the long run the sum of all private undertakings far surpasses anything the government might have done."
I find it so amazing that people do not understand this concept, that we can do what every we want 10 times better than what our government can do, it just might take us longer. The problem is that our government has their hands deep into our pockets and our decision making. People say that we have to have the government help in this situation or that situation. Tocqueville goes on to say about social prosperity:

I am persuaded that in that case the collective force of the citizens will always be better able to achieve social prosperity than the authority of the government.

He uses China as an example:

China seems to offer the classic example of the sort of social prosperity with which a very centralized administration can provide a submissive people. Travelers tells us that the Chinese have tranquillity without happiness, industry without progress, stability without strength, and material order without public morality. With them society always gets along fairly well, never very well.

Again this book was written in the 1830's, but isn't it sounding more and more like the USA? The faster we wake up and take control of our government is the day we can start the recovery our great nation. Until then, we will keep seeing major corporations, banks and politicians becoming wealthier while the normal people keep having to work harder and harder to make it and get ahead.

Related Post:

Friday, August 14, 2009

Twits of the Week


More great stuff coming from twitter, I highly recommend following me and many others on twitter. Have a great weekend!

Thursday, August 13, 2009

Toxic Assets still in America's Banks

I am at least glad this is in some of the main street media. I personally think that the American people need to understand what's going on. Most media outlets are saying the recession is over, blah, blah, blah...I still think we have a long ways to go and it is going to be a long slow process to right the ship.

Make sure you listen very carefully around the 8:00min mark - SHE NAILS IT! If you think the bailout was necessary than you have to say that you are for big corporations, big government, or that you don't understand the situation, because that essentially what happened.

I read a great quote yesterday from Richard Russell:
85% of mankind is clueless & living on a hand-to-mouth basis. 5% of mankind is smart & pretty much knows what they are doing. 10% are intelligent enough to follow the 5%.
I just hope I am in the 10% that are following the 5% that know what they are doing. What do you think? Are we in for a lost decade or is the government going to stop intervening? Leave me a comment.

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Wednesday, August 12, 2009

We are Headed Towards a Cliff...


"I don't care if you're driving a hybrid or SUV. If you're driving toward a cliff, you have to change direction, that's what the American people called for."
- Barack Obama
"They're in a bus and they're driving for a cliff. And either we're going to drive off the edge of the cliff or we're going to turn course. If we continue on this current policy path, we are going over that cliff."
- Peter Schiff

Tuesday, August 11, 2009

Peter Schiff - Recession to Depression

Sorry, more doom and gloom, but I want all you to know that Autumn is coming...

Here is some of his solutions if you are interested:

Once the US's economy collapses we as a country will go through some hard ships, but we will become a better nation for it. I can see the winds changing right now, they are just slowly changing. I am guessing when the "real crisis" happens, the change will come rapidly and Americans will wake up to what's going on.

Am I wrong? Have we seen the bottom yet? The media and our government think that we have, the stock market is rising. I personally just don't see it? The numbers coming out are bad, really bad(and are not correct, out government is scared to let us know the truth about how bad the situation is)—they just do not look like the past numbers that were even worse. Leave me a comment and let me know!

Monday, August 10, 2009

100TH Post!

Wow, what can I say? I never thought I would make it this far and definitely not this fast. When I started this blog I wasn't sure how much and at what frequency I would post. It all started with an idea to keep myself in check financially and keep a running blog of my progress. As I started writing some post about some of my experiences with personal finance, it slowly started to evolve into how government interference can effect our finances. This got me researching about economics, and how this effects our lives, our money and our freedoms. It has now transformed into a study guide/diary for economics, personal finances and my beliefs.

I don't post as much on personal finance based on there are tons of PF bloggers that strictly cover that, and I am not going to bring that much new stuff to the table. If I come across a good article or an experience I will write about it, but you end up seeing a lot of bloggers write about the same things. Only a few truly bringing unique and interesting ideas and writings to their blogs. If you have been reading this blog for a while you will know I have cut back slightly on my writing because I just don't have the time. Maintaining a blog is a full time job in itself, and I have a regular job so I only get a certain amount of time everyday on this blog. I will mostly post stuff that I find relevant like videos, articles, comics, images, etc...that I learn from and hopefully you can learn from as well.

A big thank you to the readers of my blog, for without you I wouldn't have the motivation to post as often as I do. I appreciate everyone that comments on my posts, even if we disagree. Matter of fact, I enjoy someone else's perspective, I truly look at both sides and I don't think I know everything, but form my opinions from hearing both sides.

I want to thank everyone who has My Money Shrugged in their blogrolls, it really mean so much to me and I am honored that people would recommend my blog to their readers.

Last I want to make this blog a community where people can gather information and learn how to create wealth and what responsibilities we as Americans have to run our country. We cannot allow government bureaucrats, lobbyist, big corporations and the Fed control us while destroying our wealth. So if you ever have a link, idea, or tip please send my way. If you ever have desire to write a guest post, please reach out and contact me and please keep spreading the word of this blog and invite more people to come learn while this blog continues to grow, change, evolve into a resource for everyday people to learn about finances and economics.

Thanks from MMS

Friday, August 7, 2009

Favorite Twits of the Week

So this is going to be new feature on the blog, most bloggers give roundups of their favorite articles from the community of bloggers. So I decided that I show some of my favorite twits of the week. If you come across any good one please let me know, I am showing the ones that add value to me without sending links, even though that might change in the future.


Hope you guys have a great weekend, I am headed to the beach this weekend to tie up some wedding stuff and hopefully surf some waves! Leave me a comment and let me know what you think of the twits of the week.

Thursday, August 6, 2009

State Tax Holiday

This week North Carolina kicks off its state tax free holiday as do may other states. Sales tax is some of the most important tax levied by states. This provides temporary sales tax for consumers for purchasing a array items from clothes, computers, and back to school items. Carolina's law reads:
G.S. 105-164.13C provides an exemption for certain items of tangible personal property sold between 12:01 A.M. on the first Friday in August and 11:59 P.M. the following Sunday. For 2009, the dates are Friday, August 7th through Sunday, August 9th. Clothing, footwear, and school supplies of $100 or less per item; school instructional materials of $300 or less per item; sports and recreation equipment of $50 or less per item, computers of $3,500 or less per item; and computer supplies of $250 or less per item will be exempt.
So is a tax holiday really good thing for the state government or individuals? Here are some of the pros and cons.

Cons: (From the Institute on Taxation and Economic Policy)

Sales tax exemptions create administrative difficulties for state governments, and for the retailers who must collect the tax. For examples, exempting groceries requires a sheaf of government regulations to police the border between nontaxable groceries and taxable snack food. A temporary exemption for clothing (or for any other back-to-school item) requires retailers and tax administrators to wade through a similar quantity of red tape for an exemption that lasts only a few days. Last year's tax-free weekend cost the state(North Carolina)nearly $12 million in lost revenues.

The benefits of sales tax holidays are not limited to state residents, but also extend to consumers visiting from other states. For states struggling with continuing budget deficits, sales tax holidays offer less “bang for the buck” than more targeted tax breaks.

Retailers know that many consumers will shift their spending toward sales tax holidays to take advantage of the temporary tax exemption. Unscrupulous retailers can take advantage of this shift in consumer behavior by increasing their prices (or failing to reduce them by the full amount of the sales tax break) during the tax holiday.

Perhaps most important for cash-strapped lawmakers, sales tax holidays are costly. Revenue lost through sales tax holidays will ultimately have to be made up somewhere else, either through painful spending cuts or increasing other taxes.

Helps out struggling families that need a boost during these hard economic times for purchasing items such as school supplies and other items of need. The National Retail Federation's annual report says parents will spend close to 8 percent less this year to get their children ready to return to school.

The tax savings combined with all the sale prices that retailers typically offer during the weekend make the dollar go further.

The benefit to cash-strapped shoppers outweighs any inconvenience to merchants and state and local administration work.

Overall: I think that it would be nice to spread a little tax relief, cough, cough... throughout the year instead of a 3day weekend, but then the lawmakers wouldn't be able to take credit for helping the people of their state out. I am guessing for some families this cannot come fast enough. Even though I do not agree fully with it, I hope it can help out some families/individuals that really need the help this year, as it has been a rough one economically.

What do you think? Are these a good idea or should they just give the tax relief spread throughout the year? Leave a comment.

Tuesday, August 4, 2009

Ad Sense Disabled

This morning I was about to write my post when I received a email from google saying my ad sense was suspended. I am not sure, but I believe that some readers might be clicking on number of ads and Google feels it is within there invalid clicks and impressions outlined in the ad sense privacy policy. I have requested to reinstate my ad sense for my site even though it might not happen or take a few months. In the meantime I will continue to blog and hope you enjoy the ad free blog! If my account gets reinstated please only click on ads that you are interested in and not for any other reasons.

Just to keep everyone updated, I now have 2 major issues with blogger/google. Currently my web domain is lost in the matrix(seriously). I understand the internet and understand mostly how everything works, as I work in the industry. I cannot figure out though why blogger says that this website is already hosted at another address. I spend close to 20+ hours going through google help and godaddy where I registered the name. There is no hope for getting my custom domain name at the moment. Now I have this ad sense issue which is seems very vague and seems like I am at the mercy of google to decide if I should get reinstated. Hopefully they will be able to fix the ad sense issue.

Anyways, thanks to everyone for still be loyal readers and supporters of My Money Shrugged! Please spread the word to friends, family, co-workers, etc...that I am blogging about personal finance and government intervention.

Monday, August 3, 2009

July 09 Net Worth: $52k Assets - $35k Overall 9.23% Growth

Little over half the year and we are still rolling and still growing every month. It is such an amazing feeling to see my money growing in such a short period of time. Seems like we have a major purchase every month, and July was no different, we purchased a TV. I know that a TV isn't a need, but our main TV is broken and I need a TV before football season starts up(will save me money on not going to a bar, ha). On top of that, TV's are so cheap and we have the money for it. We have a lot of extra expenses coming up in August so I am not sure this month is going to be so kind to us as the past few. Lets break it down:

Cash & Savings: After falling off last month and not making my budget I finally had my budget balanced again. It did not grow as big as it has over the past as I moved over around $800.00 into my brokerage account(thinking about shorting the financials). This bracket holds the funds for my down payment on house, engagement ring, insurance, auto maintenance, Roth IRA(before I max it out), and vacation. This is why it can be deceiving, it also holds my monthly budget in it. It has about 16-17k sitting around as savings the rest are funds that are going to be used at some point over the year. The rest is used on a daily bases for covering expenses, rent, food, auto, etc...

Stocks/Brokerage: This reflects transferring around $800.00 into my brokerage account along with other stocks doing well for the month. I have around $2500.oo in my past employee stock option plan that I am planning on selling if the Dow goes to 10k.

Retirement 401k: We saw increase growth from the stock market last month and it is being reflected here. At the end of the day these are long term investments, so no need to stress or get happy if it loses or gain slightly. I am still throwing the idea around to pull everything back into cash if the Dow goes to 10k which at this point who knows what is going to happen. I have my old 401k with my old company which is the majority of my retirement at the moment. I need to it rollover into my vanguard IRA account. If the dow hits 10k I will roll it over and let it sit in cash until we see what happens. I truly believe we are going to see a major pull back in the market come fall/winter.

Retirement IRA: This area was up big time and it feels great, I cannot seem to get over 5k, but I will once I purchase some shares at the end of year to max out my Roth!

Debts and Liabilities - Vehicle and Credit still high

Credit Cards: Most of this is still the engagement credit card with a 12 month 0% APR, I am not going to put much of a dent into this debt until the 12 month, when I will pay it off in full. I have that money going straight into my saving account creating a little interest off of it till I pay it in full. As I mentioned in the overview we purchased a new TV that is where see the extra 1,200.oo, it will be paid in full before interest is assessed.

Car Loan: Same story as last month...slowly paying it off every month. It has crossed my mind to try and sell it(for a used better gas mileage vehicle), I just have a lot going on and really don't want and have to deal with it at the moment.

So there you have it, I am very pleased with where I stand! August is going to be a crazy month with some vacation, bachelor party, and the start of football season, so I am going to have to really watch my budget. Once again I want to show that if you know where your money is going you can start to create wealth. If look at my net work graph on the right it has been growing every month. Hope you are having as much success as myself, remember as long as your working towards saving the more growth you will eventually see!

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