Money Management Mishaps – Page 13

Warfare as a Form of Welfare

Many proponents of state welfare also claim to oppose war. This isn’t surprising since proponents of state welfare try to position themselves as compassionate and caring. What they fail to understand is that warfare is also a form of welfare:

Approximately 1.4 million Americans work as members of the armed forces, and another 1.6 million workers labor in the civilian “defense” industry. These Americans are welfare clients of the “workfare” variety.

As an economic factor, they might just as well be digging holes and filling them back in (in fact, as a US Marine infantryman, I did quite a bit of exactly that!). The vast bulk of the work they do serves no “legitimate” function with respect to actual defense of the United States from attack or invasion, and in fact more likely increases the risks of such.

Some high double-digit percentage — I think 75% is a reasonable and conservative estimate — of “defense” spending is not about “defense” in any meaningful sense of the word. It’s about keeping those 3 million workers on the clock, and keeping their politically connected employers in profit.

Setting aside the apparently arbitrary percentage selected by the author the point of this article is clear, warfare employs some 3 million individuals. Every tank, ship, and missile requires manpower to design, build and, employ. Somebody must drive the tank, entire crews are needed to operate a ship, and missiles don’t fire themselves (yet). On top of building and operating military equipment there is also a massive number of support personell from janitors to secretaries to cooks.

Were the wars ended many of these 3 million people may find themselves without work. Facing a sudden surplus of labor it may take some time before those people are able to find employment again. By maintaining the warfare aspect of the warfare-welfare state some 3 million people find themselves being paid through tax victimization to be unproductive. Furthermore this form of welfare is self-perpetuating:

If that was the end of it, it would be pretty bad — one out of every five dollars earned by American workers siphoned off on an incredibly inefficient welfare program. But that’s not the end of it at all. The existence of the welfare program is a major incentive for going to war early and often.

If there is no war then the warfare-based welfare program must be either downsized or eliminated. Therefore a warfare-based welfare program encourages going to war because it allows those employed by warfare to continue to be employed and because nobody likes to have trillions of dollars of equipment lying around unused. Claiming to be in support of welfare but opposed to warfare, at least in the United States, is oxymoronic. Warfare is welfare.

Rand Paul Makes Hating Him too Easy

Even though I already have good reasons to dislike Rand Paul it’s nice to see that he’s working hard to give me more:

U.S. Sen. Rand Paul, R-Ky., is running ads in support of controversial Republican Missouri Senate candidate Todd Akin in his bid to unseat Democratic incumbent Claire McCaskill.

For the past week, RandPAC has been targeting Senate Democrats for voting against Paul’s proposal to cut foreign aid to Libya, Egypt and Pakistan.

Rand Paul is throwing his support behind Todd “Women Rarely Become Pregnant from Legitimate Rape” Akins. Normally I wouldn’t waste your time reporting on this. Nobody should be surprised that one sociopathic neocon is supporting another sociopathic neocon. However the fact that many people in the liberty movement still believe that Rand Paul will be our savior makes this stupid political move noteworthy. Obviously Rand’s opponents are going to descend on this news like vultures on a corpse and his supporters will be expected to justify his actions. It’s going to be damned difficult to justify Rand’s support of Akins since Akins’s did a wonderful job of vilifying himself in the eyes of almost everybody. Heck the Republican Party even told Akins to quite.

This should make for a very entertaining episodes of Politics: The Reality Television Show for Suckers.

I Don’t Think You Thought Your Clever Plan All the Way Through

Every Day, No Days Off demonstrates that lunacy isn’t confined to gun control advocates in the United States. Some rather creative, although short sighted, anti-gunners in Germany are trying to crowdsource funding to bury the Heckler and Koch factory in cement:

We plan to put a sarcophagus, similar to the one that encases the Chernobyl reactor, over Germany’s deadliest factory, so that none of its lethal “products” can illegally escape.

We will drop a sand and concrete mixture from helicopters onto the weapons factory in Oberndorf – a work of art changing reality. We need to shut down this gigantic wreck of humanity now, the German factory of Heckler & Koch in Oberndorf, once and for all!
Tons of sand and concrete will bring all deadly activities to a halt (see video). We need at least €4.000 ($5.200) to rent helicopters! For a donation of €10 ($13), you will receive a poster of the sarcophagus (Format: A1 – see below)!

The site has some really shitty renders of the Heckler and Koch factory (along with several neighboring houses by the looks of it) encased in cement. They’re goal is to raise €3,400 (even though they state they need €4,000 to rent a helicopter, obviously they’re not good at math), which isn’t going to be enough to rent and fuel a helicopter for enough trips that it will take to bury the entire factory in cement. Needless to say anti-gunner craziness is an international phenomenon.

The Absurdity of War

War has to be one of the most absurd concepts humanity has invented. Somehow we, as a race, are so incredibly stupid that we can’t even see the absurdity of people dying in the name of colorful pieces of cloth that denote imaginary lines on a map. Beyond the absurdity of the concept itself there is also the additional absurdity of the wasted resources that go into blowing one another up. In fact I think this picture concisely shows the mind boggling waste involved with warfare:

Consider for a moment the cost of war. Not only does it cost human lives but every ton of metal, hour of labor, and gallon of fuel is wasted on destroying other things made of metal by human labor that are powered by fuel. You don’t only have resources sunk into building weapons of war but you also have to sink more resources into replacing everything that was destroyed during the war. If you’re a military contractor or a construction company this may seem like a good idea but even for them it’s not. Warfare is nothing more than the biggest example of the broken window fallacy ever conceived. While it seems the military contractors and construction companies are getting rich off of warfare they fail to consider all the resources they’ve sunk into blowing stuff up and replacing stuff that was blown up could have been put into creating new and better things.

People often complain about the consumer culture we live in today where products are thrown away into of being repaired. Warfare is a great example of this on a very large scare. Think about the Javalin missile, an $80,000 tube that can only be used once. $80,000 thrown down the tubes every time you launch one of those missiles. On top of that you also have the massive cost of resources required for research and development to create the missile. Who thought that was a good idea?

Some groups have figured out that Achilles’ heel of warfare and have begun relying on cheap technologies and easy tactics to win wars. When you consider what warfare is you realize it’s nothing more than a competition to see who can maintain the most resources. If you’re tossing away $80,000 missiles willy nilly and your enemy is using cheap easily constructed explosives you’re not going to last in the long run.

Nuking the Economy

What does the world’s most powerful military force do when it runs out of money? Spend money it doesn’t have on upgrading weapons that it doesn’t need:

They may be cash poor as the recession continues, but that doesn’t stop the Obama Administration from continuing to spend, with a new scheme to spend hundreds of billions of dollars they don’t have on thousands of nuclear weapons they don’t need.

The “modernization” plan seeks to upgrade some 5,113 nuclear warheads as well as refurbishing nuclear weapons facilities and replace delivery systems for the weapons, each capable of wiping out a major city, and combined capable of destroying virtually the sum total of human civilization.

I give up, what can you say about this story that it doesn’t say already?

Making the Poor Poorer

Yesterday the Federal Reserve announced that it would ramp up it’s war on the poor:

The US central bank has announced it will resume its policy of pumping more money into the economy via so-called quantitative easing.

The Federal Reserve said it will buy “additional agency mortgage-backed securities at a pace of $40bn per month”.

The central bank also said it could increase the size of its purchases if the economy does not improve.

The Federal Reserve is going to start printing a minimum of $40 billion a month for an indefinite period of time. Printing money inevitably leads to inflation, which is a decrease in purchasing power. If the entire economy was made up of $100 and the Federal Reserve printed another $100 it would effectively reduce the purchasing power of each dollar by half. What’s more insidious about this is that the devaluation doesn’t occur immediately, the first receivers of newly printed money enjoy it’s use at full purchasing power. It’s not until the money begins circulating that the reduction in purchasing power hit. Effectively the poor, being the last receivers of newly printed money, get hit the hardest.

With this latest announcement the Federal Reserve might as well have said, “Fuck the poor!” Those who are barely able to get by on the current purchasing power of their money will soon find themselves entirely unable to get by as prices increase due to dollar devaluation. If you’re holding Federal Reserve notes it would be wise to convert them to something tangible quickly.

Pay Not Based on Results

In this time of economic hardship the teacher union in Chicago has decided to go on strike:

As many as 26,000 teachers were expected to stay away, with picket lines forming around the city.

About 350,000 students were affected by the strike in the nation’s third-largest district.

The walkout was called after all-day talks broke down on Sunday, following months of negotiations.

The two sides met again on Monday to continue negotiations, but failed to reach a settlement, meaning the strike will extend into at least a second day.

“This is not a strike I wanted,” the mayor said. “It’s unnecessary, it’s avoidable and it’s wrong.”

School officials said they had doubled the pay rise offered, for a total of 16% over four years.

“This is about as much as we can do,” Chicago school board chief David Vitale told the Chicago Tribune. “There is only so much money in the system.”

Considering the drop out rate in Chicago is roughly 40% I see no reason to give the teachers any raise. In fact I would argue they should have their paid decreased to reflect the poor job they’re doing at creating an environment where students want to come and learn.

Only Do Business with Those You Trust

Today’s life lesson is this: only do business with those you trust. If you do business with those you can’t trust then you may find yourself missing large quantities of money:

An invite-only online hedge fund that promised lucrative returns for investors called the Bitcoin Savings & Trust has shut down, and with it have disappeared the service’s administrator — a user known in the digital currency community as pirateat40 — as well as millions of dollars’ worth of the cryptocash, currently valued at around $11 USD per coin.

Pirateat40 claimed that Bitcoin Savings & Trust had collected from investors roughly 500,000 worth of the currency, or around $5.49 million in US dollars, but not before disappearing off the face of the Web. The virtual hedge fund went offline this month following pirateat40’s announcement that the site would be shutting down soon, but the investors that had their own Bitcoins tied up in BS&T say that they think the e-bankster in charge has bolted with their money.

From what I can gather nobody involved with the ponzi scheme actually knew who Pirateat40 was. Why would you trust a person you’ve never met with your money? More importantly, why would you trust a person whose identity is concealed from you with your money? The answer to both questions is you shouldn’t.

You’re Paying for the Democratic and Republican Party Convetions

Who’s footing the bill for the massive political conventions being used by the political minded to select new masters for everybody in the country? You and I are:

I encourage all Americans to tune into the Republican and Democratic conventions in the coming days, because, after all, you’re paying for it.

Yes, the U.S. Treasury last year cut a $17.7 million check to the Committee on Arrangements for the 2012 Republican National Convention, and a check for an identical amount to the 2012 Democratic National Convention Committee.

That’s $35.4 million taxpayers are paying for things like balloons, speech prep, liquor, newspaper subscriptions, hotel rooms,as I wrote last year. It’s not security spending. Perusing the convention committee’s spending records shows what you’re paying for.

Isn’t it great? Money is taken from you at the point of the state’s gun so the state can spend it on massive spectacles meant to boost the egos of politicians and make everybody involved in the political process feel special (and thus connivence them to continue throwing away time and money on political campaigns). Politics really is a sucker’s game.

Brazil Central Bankers Go on Strike

The irony can barely be described in words:

The central bank union is demanding an average pay increase of 23 percent to compensate for inflation since June 2008, Belsito said. The union may call a longer strike later this month, he added.

Brazil’s central bank likes to play many of the same games as the United States central bank. The Brazilian central bank enjoys printing money and fractional reserve banking. In fact the Brazilian central bank recently dropped the reserve requirement in the hopes of boosting automobile loans. Needless to say a drop in reserve requirement is actually a grant of permission from the main central bank to the lower banks to counterfeit more.

Now that the employees of Brazil’s central bank are suffering the consequences of their employer’s actions they are demanding a wage increase. Perhaps they can remain on strike indefinitely, cripple the central bank’s operations, and help prevent inflation from increasing.