Why gold is the best wealth insurance

Gold investing is not for the faint of heart.  It’s a physical currency that sits in your house and collects dust.  Often people choose to store it in safety deposit boxes meaning a yearly rental fee eats away at your asset when it’s sitting in storage and the stock market is moving upwards.  It doesn’t generate a return and it doesn’t generate a dividend.  By all investing standards it absolutely sucks.  And there’s no reason an investor should look at gold as a normal investment vehicle.

However, that’s not why we hold gold.  Gold is a currency and it’s the best one out there.  I’ll spare the chemistry of it, but by the miracle of science, gold has been blessed with the best characteristics for use as a currency.  It’s impossible to replicate, doesn’t tarnish, and doesn’t erode.  Not to mention it’s shiny and beautiful and rich people buy lots of it.

Gold is a currency, but that doesn’t mean we can’t make a profit off of it at certain times.  The reason that most people hate gold during certain eras is very often the best reason to own it at that time.  See, gold gets battered when people have faith in the official US paper dollar currency system and the overall economy in general.  Money flows out of gold when stock markets are booming from a debt and credit-fueled economic bubble that creates inflation, then as soon as the market crashes investors pile into gold at a disproportionately higher rate than any other asset.  This is the definition of undervaluation, which is the best way to extract value from the rise of an asset.  An asset is undervalued when people don’t price it at it’s true value.

Gold typically only occupies .25-.50 of a percent of the overall investment matrix in the United States.  In the scenario of a recession, if a mere 20% of investors allocate a new 5% of their assets towards gold holdings, that will increase the overall share of gold in the investment matrix to 1.25-1.5%.  That massive inflow of demand for gold would absolutely skyrocket the price of the precious metal.

Ideally we would return to the gold standard unless we can reverse losses in the value of the US dollar.  The media pundits tell you it’s a relic of the past but that’s absolutely unfounded.  So many misconceptions surround gold standard and it’s stability as a store of value helped ensure the advancement of the United States economy to unprecedented heights unseen by any other economy in history.  If we were to return to gold standard, it would obviously need to be set at the proper price given the amount of gold available and the increase in currency over time.  That price would be anywhere between 10,000 to 50,000 per ounce of gold depending upon which monetary supply level you choose.  100% gold-backing would set a price of 50,000 dollars per ounce.  Unfortunately (and fortunately for gold investors), it doesn’t look like we’re anywhere near reversing the dollar’s decline.  As dollar liabilities increase each year with our growing national debt, accelerated by the Fed’s Q.E. binge, inflation has run rampant.  As the Fed attempts to increase interest rates, interest payments will only increase on national debt, not to mention the challenge of unwinding the Fed’s 4.5 billion in bond holdings.  The future is bright for gold and it’s only a matter of time before it’s value is appreciated once again by savers and working Americans in general.

Trump must pop the debt bubble

It is imperative for Trump to pop this toxic economic bubble once and for all.  Our cultural discourse is at a critical cliff at the present.  Nearly half of the country feels that socialism is the best direction for this country and it has been driven by Keynesian academics that GDP growth requires inflation and interventionist forces:

-more government spending

-more tax increases to ease our growing national debt and unfunded liabilities

– more low interest rate policy that will eventually end in a Japan-like scenario where negative interest rates are used to pay off the national debt.

This is simply catastrophic.

Austrian economics is unparalleled in its consistency.  It is the only school of economic thought in which price signals are truly understood.  Prices simply adapt to new environments.  Natural deflation is consistent with capitalism itself and always makes living affordable for human beings.  Wages should never have to rise to keep up with inflation because inflation is an interventionist policy that results in an unsustainable system.  This is directly at odds with our move towards automation.  When automation is implemented properly it should result in far greater productive efficiency.  However, when paired with an inflationary environment automation is catastrophic as it creates competition with increasing wages due to inflationary pressure.

Trump is far from an Austrian economist but he understands principles that are essential to a surviving capitalist system.  He understands that growing national debt is catastrophic and creates inflation.  It is now up to him to connect the puzzle pieces and recover this system once and for all.

Automation Isn’t Wrecking the Economy, Federal Monetary Incompetence Is…

Recently I’ve been reading a number of articles surrounding technology and the impending takeover of our jobs by machines.  It’s a concept that has existed for many years and is a natural fear for many humans.

Fortunately (and also unfortunately), the concept is just not true.  I can’t even begin to think of what it would take to replace many of our jobs.  Any job involving strategic insight, engineering, and satisfying customers requires significant human input.  Enhancing machine capabilities still requires the human input while improving what can be extracted from information.  Okay, so let’s take another, more basic career: steel worker.  China employs almost 12 million people in the coal and steel manufacturing sectors alone.  At the height of the 2000’s economic bull market in America (2006-2008) a mere 2.5 million people were employed simply in the manufacturing industry in the entirety of the United States.  Now, China IS making a push to cut steel jobs, but this is due to an overcapacity or glut of steel, not automation.  The point I’m trying to make is that automation is not something we should be worried about.

-Our fears should be focused on the absolute chaos and ineptitude that has taken over the global financial system, not technology and automation-

Automation has been happening since the beginning of time, which is probably the reason people still had jobs once things like the printing press were invented to replace scribes and automobiles were invented to replace horse-drawn carriages.  The misconception that automation is stealing our jobs avoids the all-too-important topics of monetary inflation and outsourcing due to excessive government regulation, both of which have caused the plight of a hollowed-out middle class and rusty, empty factories in the United States.

I’m not alone in this educated belief.  Peter Thiel, noted Silicon Valley investor and entrepreneur, believes the same thing.  Government is the cause of our woes.  Dollar inflation has turned healthy economic theories on their back and led us to vilify capitalism as workers chug along trying to afford increasing prices in real estate, food, stocks, and college tuition.  The Federal Reserve and US government selfishly print money and run up the national debt, respectively, that flood the global market with dollar-denominated liabilities to pay for increased consumer spending.  The government believes it can prevent recessions from ever occurring by forcing US consumers to spend money.  The funny thing is that government actually creates these recessions in the first place through over-speculation and spending!  As a farmer prods his sheep to move, so does the US government prod it’s citizens into spending and avoiding savings.  This is not only happening in America, but in nearly every nation around the world.

-Innovative deflation made us kings-

Innovative deflation is the core and essence of capitalism.  The period of growth in America from the late 1790’s to about 1913 was the most successful and wealthy era in modern history.  During this era, goods were cheap, wages were high, and there was no monetary inflation.  There was no income tax and virtually no regulation on businesses (although we now realize that some regulations are healthy).  A little known fact is that Standard Oil was so successful in providing cheap oil to consumers, that it was making competitors angry at the lack of potential business.  Thus, out of jealousy and spite, crony capitalism and lobbied monopolies were born.

Entrepreneurs find ways to make goods cheaper for consumers while increasing profits that allow for more entrepreneurial investment.  This is the beautiful cycle of capitalism that has been nearly thrown in the trashcan by global central bankers.  If this is not true, tell me why computers have become so affordable that they cost less nowadays than many driver’s license registrations?  Computers and electronic technology have managed to avoid inflationary pressure because of the fact that companies have been so effective at reducing prices in spite of inflation.  The idea of capitalism is to make life easier to the point where work is more productive than ever, less laborious than ever, and goods are cheaper than ever.

-How should we react to technological changes?-

While technological changes don’t evaporate the need for human labor, they will shift human labor.  Look back to history when people were employed in positions that are utterly useless nowadays.  When was the last time you saw someone employed as a carriage wheel manufacturer?  Aside from your local Amish family or Queen Elizabeth’s carriage manufacturer, this career is utterly unnecessary.  We train people to be flexible with changes in technology.  This is a constant throughout human history.

 

An honest critique of Paul Krugman

Paul Krugman is a bully.  There’s no other way to frame it.  Every so often he emerges to write a NY Times op-ed about how dumb Republicans and fiscal conservatives are, while constantly pressing his agenda for debt in more academic settings.

Listening to his countless lectures and debates with fiscal conservatives is like turning to a thesaurus for every different way to call someone a “dunce.”

While Paul Krugman has an astounding knowledge of facts and figures, his responses to basic economic principles often degrade to unfounded statements about gold and fiscal responsibility.  He likes to bully Austrians who adhere to core principles of economics that PREVENT recessions in the first place.  This leads me to my first main disagreement with Krugman:

1. Keynesians love to discuss spending to get out of a recession while assuring people they are “fiscal hawks” during the good times.  The fatal flaw to this logic; however, is that they never discuss what started recessions in the first place.  Krugman is the guy who advocated for a “housing bubble” after the dotcom crisis in order to pull the economy out the doldrums.  Seriously?  Just remember this is the man who essentially wrote the playbook for economic policy beginning in 2008.  So while Austrian policy actually prevents economic bubbles in the first place, Keynesians bring us into bubbles then advocate for bubbles in order to pull us from the crash of the last bubble, all while claiming they are “fiscal hawks” during the good times.

My second issue with Krugman is that:

2. He doesn’t understand his own policies from the place where it really matters: Wall Street.  Krugman is an academic who spends his time at elite economics conferences where Keynesians gather to discuss job creation and wealth inequality, stuff that tickles the hearts of celebrity philanthropists.  Krugman will embarrass and bully someone like Ron Paul, but put him in front of someone like David Stockman or Peter Schiff and he turns into an irrational and illogical child.  That’s because Stockman and Schiff actually work with money.  They understand better than anyone the perverse incentives that free money, low interest rates, and quantitative easing create in the stock market.  So while Krugman is busy discussing the minutae of how much unemployment is really driven by early retirement versus youth unemployment, Stockman and Schiff can recite Schiller ratios in various stock indices and are acutely aware of how inflated the stock market has become.

While Krugman has no problem bullying a political academic pundit like Ron Paul, his arguments would shrivel when confronted by someone like Hans Hermann Hoppe.  Hoppe is simply too adept at debate to be bullied by someone like Krugman.  Hoppe understands economics better than perhaps anyone alive today and instead of going head-to-head with Krugman on facts and figures, decides to instead treat him like a child and ask very simple questions.  I would highly recommend this clip for everyone to watch:

How CAN we create wealth by printing new money?

The illusion of prosperity under central banking

Robert Murphy, Hans Hermann Hoppe, Ron and Rand Paul, Peter Schiff, Harry Dent, Michael Burry, David Stockman, Jim Rickards, etc.: these are just some of the influential Austrian economics-educated figures who have vehemently protested the past decade-plus of economic policies in America.  Their voices have been drowned out by the droves rooting for Obama and fixated on the “change” and “hope” platitudes that have been tossed around in his many speeches.  Little do they know that the central banking policies propped up under the Obama presidency have created nothing more than a band aid on a growing tumor.

What’s happening with employment and debt? If you’ve been inquisitive enough to question national unemployment numbers I’m proud enough of your performance to give you one gold star sticker, which is worth about as much as the money printed by the Federal Reserve…  Real unemployment is measured by the U-6 and probably shows an even bigger picture through the “labor force participation rate.”  While official unemployment statistics are shown to be around 4.9%, the U-6 is around 9.9% and the labor force participation rate even worse, showing only 63% of working age adults somehow involved in work.  That means 37% are no longer even pursuing work.  This figure has decreased steadily since 2007 from 67%, while the unemployment figures that are reported by the Fed and the Obama Administration have shown the complete opposite…  The ruse is up.  Our lower and middle classes are saddled in debt while lacking any gainful employment

What’s happening with the Fed and Banks? The Federal Reserve’s primary goal since 2008 has been to create a spending-rich environment through low interest rates which would then be balanced out by an eventual rise in interest rates (higher interest on bank accounts means more consumer savings).  So what actually happened?  The Fed launched two measures that were supposed to boost spending: 1) lowering interest rates by lowering the rate at which banks could lend each other money (usually overnight) and 2) quantitative easing: the mass purchase of treasuries and other securities by the Federal Reserve with a stream of yearly cash flows by means of creating money out of thin air.  It sounds ridiculous because it is ridiculous.  By purchasing massive amounts of bonds through QE and lowering interest rates, would-be bond buyers had few options are were forced to accept miserable yields.  Consequentially, wealthy investors looked to park their investments in higher yielding speculations such as stocks.  The years from 2009 to 2014 marked one of the most odd, consistent increases in stock prices in history.  If it looks too good to be true it’s because it is.  Price-to-earnings ratios are through the roof in some industries where investors have over-speculated.

Where it’s headed from here:  The lower classes have remained financially weak since the crisis because little value has been created in terms of actual production and manufacturing jobs.  The following analysis is my own assessment, and I would appreciate criticism of these assumptions: The stimulus package worked the way any Austrian economist would have told you it worked: it created finite value by means of taking other peoples money.  A road construction job only lasts so long.  Krugman argued the stimulus should have been larger, which makes sense, but I am confident the vast majority of these government stimulus programs create very little value.  Wind energy?  Cash for clunkers?  Road construction?  I mean how many of these jobs can you reasonably expect to sustain the lower classes of the U.S. economy?  Krugman thinks these stimulus jobs initiate a healthy pattern of spending but it obviously fell short: banks aren’t making loans to consumers anymore because their stimulus jobs and part-time work as Starbucks cashiers aren’t creating any spending opportunities. Because consumers aren’t spending the stock market has stalled.  Quantitative easing has stopped, which means speculation on the stock market has to stop.  Loans to consumers have stopped because they don’t actually have any money.  The entire system has just… stalled.  People aren’t spending money anymore and this has terrible consequences.  Paul Krugman seems to believe infrastructure spending is a panacea, whereas real, intrinsic value is created through a healthy manufacturing sector, or at the very least, companies that keep their operations on American soil.

A lack of supply-side economics: Peter Schiff characterized it so well when he said Americans are getting China to buy our treasuries so that we can go and spend money on goods made in China.  The overall hollowing out of the manufacturing economy in America has made us a nation of spenders who don’t actually produce anything.  We have intellectual capital and lots of land, but where is our manufacturing economy?  Where are the great steel factories that line the Great Lakes?  Over the years, manufacturing has been steadily outsourced due to excessive regulations, union presence, and ridiculous rates of taxation.  This talking point has been misconstrued for years with Democrats claiming we simply can’t compete with third-world labor rates.  The truth of the matter is that once you take into account significant decrease in quality, setting up shop, and extra transport costs, the benefit of manufacturing overseas is not that much greater than the cost.  Just lowering corporate tax rates alone would prevent so many corporate inversions that have happened in recent years.  Is it any coincidence that the strongest manufacturing centers in America are in Tennessee, Mississippi and Georgia where unions are the weakest and tax rates are some of the lowest?

So what’s the international consequence of our excessive spending and lack of productive capability?  China will look towards slowing US treasury purchases while anchoring their currency around a gold standard.  They clearly realize this is in their own best interests because it provides an intrinsic value to their currency that won’t inflate.

The smartest idiot in the room?: The American economy is partially held together by the fact that we are one of the least screwed-up countries in the world.  Where else will investors put their money?  Russia?  Argentina?  France?   It’s true that we are one of the smartest idiots in the room, but that can’t change the fact that we have serious internal structural issues.  Our lower and middle classes are hollowed out, plain and simple.  At some point the Federal Reserve will come clean and reveal their hand.  It’s going to show poor job growth and low economic output.  We have to revamp the entire system if this is to work properly.  Food for thought: the last president to pay off America’s debt in it’s entirely was Andrew Jackson, the guy who was removed from the 20 dollar bill last week.  Is this symbolic or what?

8 years later, nobody understands what went wrong…

I recently watched The Big Short, which was a phenomenal movie that explained the toxic result of decades-worth of bad policies designed to increase economic growth while skirting personal responsibility.  Can we at least agree on this?  This is endemic to economics in general, as people are always looking for ways to easily hop into the engineered “middle class” that Democrats like to drone about so often.  But what amazes me is the sheer volume of so-called “professional” opinions on the internet that STILL cannot comprehend what caused this financial meltdown.  Isn’t it funny how the voices that were being silenced prior to the recession are the same ones being silenced after the recession as our Keynesian government attempts to bludgeon the economy once again?  Think about that for a minute…  In fact, a number of journalists scoffed at Michael Burry for voicing his views on the post-2008 economy!

After the financial meltdown, economists from CATO Institute and AEI came out with comprehensive research regarding the overwhelming role of government policy, Fannie Mae, and Freddie Mac in creating this disaster.  70% of the mortgages that defaulted in the crisis were backed by one of these two institutions, while banks were blackmailed, through government policies, to take on these high-risk loans.

Left-wing logic and outrage ensues: “well… the percentage of homeowners classified as ‘poor’ stayed stable at 6% through the lead up to the financial crisis.”  Since when does that mean anything?  The idea is that prospective home buyers regardless of their socio-economic status were taking on mortgages they couldn’t pay off.  If someone made the 2007 standard per capita GDP in America of $48,000 per year but took on a mortgage for a the average house priced at approximately $325,000 in early 2007, they’re still classified as “middle class” even though they’re going to default on their mortgage with almost absolute certainty…

I gathered a snippet from a nerdwallet calculator using 2007 GDP per capita figures.  According to this calculator, a homeowner who can put forth a $10,000 down payment on $48,000 year can afford a home worth $183,000 in Cleveland, Ohio (a city with a mid-priced housing market).

Average Mortgage 2007.PNG

The safe and easy alternative is to NEVER buy a home unless you have so much money lying around that you can safely afford to do anything you want.

The more I learn, the more cynical I become about the general state of society where NOBODY learns to take responsibility for his/her actions.  As Julius Evola stated, the only solution for the critical, rational, and analytical thinker is to “Ride the Tiger” of insanity, pursuing paths independently against the chaotic tides of society.  I guess improvement comes at a very slow pace.  Just be grateful for the privileges we all have in society today. However bleak future events may seem, somehow our incredibly dysfunctional society manages to progress forward.  At the same time, those who refuse to be complacent and constantly seek the truth must speak up and let their voices be heard.

 

 

Automation vs. Artificial Intelligence

Did Adam Smith ever take into account the possibility of artificial intelligence?  How would he have reacted to this development?  What are we supposed to do about the rising intelligence of computing power and the possibility of independently-learning computers?

First of all, we MUST make the distinction between automation and artificial intelligence.  Automation is a net positive for society.  It allows us to make quicker decisions and complete processes much quicker than in previous years.  Why is this positive?  Well automation has changed occupations but hasn’t actually decreased anyone’s employment.  There are countless professors and researchers who have studied this topic only to find that automation simply creates new jobs where old ones are retired.  The beauty of this system is that certain processes may remain in place as long as we are content with them.  Microsoft Excel and it’s various add-in automation solver components, for example, has been useful for over 20 years now.  The essence of Excel has barely changed yet has been useful for increasing the efficiency of various other industries.  This blank-slate program has made it easier to create strategic business decisions and has probably improved our overall quality of life as a society.  Excel has opened up an opportunity for an expansion of careers involving Excel.  The better we get at using it, the more we realize we can use this tool to do some incredible stuff.  Nowadays if you are very proficient at Excel, you can land a job quite easily, in my opinion.

Computer Engineer.jpg
Automation creates new positions

Artificial intelligence, on the other hand, is a far greater challenge to actually achieve.  The concept of AI was first really brought into the public light by Alan Turing in 1950 when he asked if computers could think independently and grow without human input.  Both of those stipulations, in my opinion, are impossible to achieve.  Human input will always be involved.  The random synapses in our brains combined with our organic composition make us incredibly incredibly unique.  Organic beings have limitations, no doubt, but we also possess a randomness that makes us so creative and unique.  Machines will always be our tools, in my opinion.  We, as humans, program them and tell them to do things.  Maybe they will end up beating Gary Kasparov in chess or winning Jeopardy, but does that mean they are actually artificial?  No.  Artificial intelligence strives to emulate human beings, albeit at a faster rate of learning than human beings.  If human beings are also evolving organically, we should instead marvel at human intelligence, not artificial intelligence.

As machinery becomes more and more complex, we must understand that it is all simply automation.  Humans have very basic desires and needs and computers are merely here to serve our needs in a simpler process.

The Gates Foundation and Contraceptives

The world’s population is growing way too fast, but here’s the thing: population growth in Europe, China, Japan, and America has virtually come to a standstill or even reversed (well, the reversal needs to be addressed as well and that post is for another day).  The areas where we need effective birth control are also the poorest nations on the planet.  Allowing people to plan offspring prevents problems related to nutrition and sanitation and clearly raises living standards for families that use contraception.

I was thrilled to hear that the Gates Foundation will be administering a massive contraception effort in 69 impoverished countries with a drug called “Depo-Provera.”  This drug costs 1 dollar per shot and will be produced by companies like Pfizer through Gates Foundation funds.  The drug will be available at little to no cost and requires almost no technical expertise in administering the shot.

There are countless examples of countries that have stopped skyrocketing birth rates through simply contraception efforts by the government.  Bangladesh, a poor Muslim nation next to India, recently dropped birth rates from around 7 children per woman down to about 2.2 (!!!!) through a government effort to provide free contraceptives.  The way they did this was by allowing women to spread the drug themselves, apparently, meaning it spread quickly and women trusted one another that it would be safe.

As much as I want government to stay away from progress, I am happy to pay a tiny chunk of change to help nations deal with their booming populations.  Paying that small amount upfront could prevent the hassle of dealing with poverty on the back-end through expensive volunteer work efforts (shipping in food, sanitation supplies, etc., etc.) and knowing that millions upon millions of people won’t be starved, aimless souls walking around the planet.

 

 

Energy Efficient vs. Hybrid vs. Electric: How to Evaluate the Alternatives

Elon-Musk_2650478b
Elon Musk smugly laughing at you for buying a Tesla

I took three of the most efficient cars I could find from each category and compared the costs and underlying costs.

Mercedes CLA250: low-end Mercedes model with high MPG

Base Price: $31,500

MPG: (26 city * .50) + (38 highway * .50) = 32 mpg

Fuel Cost on 15,000 miles per year for 10 years at $3.00/gallon: (15,000/32) * $3.00 * 10 = $14,062.50

Total 10-year cost (excluding maintenance): $45,562.50

0-60 mph acceleration: 6.9 seconds

Acura ILX (Hybrid): middle-of-the-road Japanese luxury hybrid

Base Price: $28,000

MPG: (24 city * .50) + (35 highway * .50) = 29.5 mpg

Fuel Cost on 15,000 miles per year for 10 years at $3.00/gallon: (15,000/29.5) * $3.00 * 10 = $15,254

hybrid credits: none

Total (excluding maintenance): $43,254

0-60 mph acceleration: 6.3 seconds

Tesla Model S Electric: Tesla mid-line electric car

Price: $71,070 – average of $11,070 in incentives: $60,000

Fuel Cost on 15,000 miles per year for 10 years at a rate of half charging on Tesla supercharge network and half at home at $0.03/mile: (.5 * 0) + (7,500 * $0.03) * 10 = $2,250

Total (excluding maintenance): $62,250

0-60 mph acceleration: 5.9 seconds

So there it is.  All three of these cars are pretty comparable, mid-range luxury sports cars with a nice 0-60 acceleration of 6-7 seconds.  1st place is clearly the Acura ILX, which has the lowest cost of them all, and you’ll shell out almost $20,000 less than you would for the Tesla.  Mercedes has a really good value as well, although it is a bit slower than the other two, and I feel like a lot of the cost goes towards the brand itself.  Having a Mercedes is a bit sexier than having an Acura.  However, it’s still a great value.

A couple things to note here:

  • Gasoline costs are low and the cost rises a bit for both the gasoline and hybrid when you jack up the price to $4.00/gallon.  However, it’s not very significant and the Model S can’t compare to either of them.
  • Tesla takes advantage of some $10,000+ in subsidies.  People often forget that taxpayer dollars are going towards your neighbor’s sleek Tesla Model S.
  • Tesla is planning to make a $30,000 model in the coming years.  It’s going to be less powerful than this model and probably hits 0-60 in 8-ish seconds.
  • Battery costs are “expected to drop by 30%” when Tesla opens its’ $5 billion giga-thingy plant.  Tesla won’t disclose the cost to produce one of its’ batteries, but analysts estimate it costs about 30% of the total cost of the car.  Okay, so let’s do the math.  For that base model Tesla S it would be $21,000 for the battery and 30% of that would be roughly $6,400.  Well, given this EXTREMELY ambitious goal, that would bring the cost of our Tesla Model S down to just under $56,000.  Not even close.  Oh wait, then we add all of those taxpayers dollars back into the picture, and yeah…
  • The range on a battery-powered car is limited.  Just like your laptop battery that lasts for a very limited number of years, a battery-powered car starts losing it’s charge capacity after 100,000 miles or so.  Our calculation is out to 150,000 miles and there’s a good probability you will need an entirely new battery by then.
  • Electric vehicles take a charge from the power grid.  A power grid is comprised of coal, natural gas, and nuclear plants.  So that doesn’t necessarily mean you’re being more environmentally-friendly.  A number of sources have taken the liberty of calculating a “readjusted” mpg for your electric car by factoring in the sources of fuel that your state uses to power the grid.

I think a big takeaway here is that no matter how sexy and ambitious the electric-powered dream is, it’s not really that remarkable.  There’s no miraculous material that Elon Musk is using to power his automobiles.  He works with the same exact materials that everyone on the planet works with.  The electric-powered dream may be here in 50-100 years if gas prices skyrocket, but the material inputs are just so damned scarce.  It’s hard to imagine a highway full of Teslas in my lifetime.

You Are Neither “Liberal” nor “Conservative”

fatAmerican

The political parties in this nation are twisted and mixed up with their associated ideologies.  It’s pretty clear that political polarization happens along two lines in this country: Democrats and Republicans.  Democrats are socially liberal and economically conservative, whereas traditional modern Republicans are socially conservative (often due to religious influences) and economically liberal.

I don’t truly believe that anyone is fully “liberal” or “conservative,” just like no one puts 100% of their investments in one stock on the market…  However, the closest you can get to fully “liberal” is probably a libertarian or anarcho-capitalist.  This is someone who believes the government should stay out of almost all affairs because it’s more efficient for a market of humans to compete in order to solve solutions.  However, even these folks believe in the classic concept of “property rights” which means property is the right of the person who values it the most.  Your run of-the-mill hippie believes that the planet belongs to all human beings, so he would most likely be considered more “liberal” in regard to property.

The point I want to make here is that people are wrong about placing labels to their ideologies.  As a Republican, you are not fully “conservative.”  An addition concept that has been pushed endlessly by mainstream media, is that being “liberal” is somehow morally superior to being “conservative.”  They somehow evoke images of a conservative being your old grandpa who is stubborn to change, whereas a liberal is your hipsterscool DJ friend who lives in Brooklyn and supports “progressive” issues like eating locally and rallying at Occupy Wall Street (both of which are conservative stances).  Both of these stereotypes are absurd.  Whether you are liberal or conservative on a topic doesn’t actually matter.  What matters is your ability to think rationally and critically and examine what would provide the best utility for all parties affected and involved.  Think about that carefully, and apply it to every issue you confront.  This is far more effective than taking one of two extreme views on an issue.

One great example is the idea of globalization and economics.  I think almost all Americans would favor “American-made” products if they were of excellent quality.  Americans want American-made products because it means they would have job security in their own country.  This is not some far-fetched populist idea, but rather a natural and protective
response to foreign competition that could lead to unemployment.  Someone who is irrational would claim we should impose tariffs on all imported products.  This achieves the intended purpose, but it makes society worse off than if we were to allow imports.  A rational person realizes that it is simply impossible for everything to be produced cheaply in America.  Certain countries have advantages in terms of the resources and intellectual property they have developed over the years.  Saudi Arabia, for instance, produces the cheapest barrel of oil out of anyone in the world.  Therefore, the rational person realizes that the optimal solution would be to focus on an American comparative advantage (likely multiple) that would allow us to provide the best and cheapest product in the world of its kind.  This would provide a stable base for American jobs to continue thriving in the country as long as we continue to maintain that dominance and examine upcoming technologies.

This is an example of the correct way to examine political, economic, and societal issues.