Falling Off the Hunger Cliff

The October edition of Smithsonian magazine tells us that “With five simple words in the Declaration of Independence – ‘all men are created equal’ – Thomas Jefferson undid Aristotle’s ancient formula, which had governed human affairs until 1776: ‘From the hour of their birth, some men are marked out for subjection, others for rule.’”

Aristotle’s sentiments are obviously nonsense.  However, if you’ve ever reported to jury duty, and sat in a courthouse selection room all day among peers, you know that Jefferson got it wrong too.  For all men are not created equal…there’s a vast spectrum of people ranging from idiot to genius.

According to Thomas A. Patterson, in The American Democracy – Alternate Edition, what Jefferson – a slave owner – meant when he said “all men are created equal” is that all Americans are entitled to equal justice under the law.  The Smithsonian article attempts to reconcile the conflict between Jefferson’s words and actions as follows: “The very existence of slavery in the era of the American Revolution presents a paradox, and we have largely been content to leave it at that, since a paradox can offer a comforting state of moral suspended animation.” Continue reading

Posted in MN Gordon, Politics | Tagged , , , , | Leave a comment

Present Conditions and Negative Outcomes

There are certain things in life a reasonable person knows they should not do.  These are things so obvious, evident, and elementary they do not require learning.  They go without question.  They don’t have to be tested for confirmation or denial.

For instance, a person should not give a Hells Angel biker the middle finger.  Nor should they play chicken with a semi-truck.  Above all, a person should not stiff the IRS…unless they want the holy wrath of the federal government bearing down on them night and day.

Likewise, the proven way to make money in the stock market is to buy low and sell high.  Everyone knows this.  Yet, despite most people’s better judgment, they have the uncanny knack for buying high and selling low.  Of course, greed and fear have something to do with this.

When it comes to markets other than capital markets people are generally capable of making accurate price-to-value judgment.  Through everyday experience everyone knows when they’re getting a good deal on a turkey sandwich.  So, too, they know when they’re getting ripped off. Continue reading

Posted in MN Gordon, Stock Market | Tagged , , , , | Leave a comment

What You Are Up Against

The Bureau of Labor Statistics reported last Friday that consumer prices increased 0.6 percent in August.  Over the last 12 months, according to the BLS, consumer prices increased 1.7 percent.  Nonetheless, if you’ve paid bills or bought anything lately you know the government’s inflation numbers are merely propaganda.

When inflation is calculated the way it was measured in the 1980s, before government statisticians began fudging the numbers through hedonic pricing adjustments and other nonsense for political reasons, the consumer price index is rising by 9.3 percent annually.  Obviously, an inflation rate of 9.3 percent is much greater than an inflation rate of 1.7 percent.

This vast difference is problematic…particularly for low income earners living pay check to pay check.  They may now be finding that there pay check runs out long before payday.  But, in addition to low income earners, an inflation rate of 9.3 percent is problematic for savers and fixed income earning retirees. Continue reading

Posted in Inflation, MN Gordon | Tagged , , , , | Leave a comment

Helping the World Ruin Itself

“Iacta alea est.” – Suetonius to Julius Caesar, upon crossing the Rubicon, January 10, 49 BC

Yielding to Political Will

Yesterday brought forth new evidence that man, despite his better judgment, will nearly always yield to political will.  Several months ago Senator Chuck Schumer told Federal Reserve Chairman Ben Bernanke to “get to work.”  Yesterday’s FOMC statement offered Bernanke’s acquiescence…

“….The Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month.”

And here’s the kicker…

“If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.”

Following the FOMC statement stock prices soared.  The DOW jumped over 200 points closing at 13,539.  Gold also jumped $50 per ounce. Continue reading

Posted in MN Gordon, Politics | Tagged , , , , | 1 Comment