Two and Two

Brushfire of Freedom 

“2+2=5, for extremely large values of 2.”

Some things make sense only when divorced from reality.  Irrational numbers, nonsensical statements, tax rebates to people who don’t pay taxes and so on.  If you are like me, extraordinarily handsome and sane, then you understand and reject this Orwellian doublespeak intuitively.  But the game has changed.  Under President Obama the rules simply do not apply.  You can shout down opposition in the name of free speech. You can triple the obligations of the country and speak about fiscal restraint.  You can raise taxes in the midst of a recession and speak about creating jobs and improving the economy. Math bends to your will!

Wait, no it doesn't.  Of course it helps if you have the backing of the uneducated, married with the over-educated. The problem is that money is not subject to fantasy or deconstructive literary techniques.  

Let me try to explain this and money in general to both the unknowing and those educated beyond their intelligence.  Lets see if they "get it" with a little help.  I will include a few key terms specifically for them to look up in brackets [that’s these things].

Money [Please see: Cheddar, Long Green, Cash, Benjamins, Wampum]  is a representation of commercial intent and power.  It is a slice of capital obligation, somewhat frozen in time and valued based on a host of items. It is sweat equity at its purest, with a touch of blue sky modified by the strength of the American economy and monetary policy.  We trade these little slips of capital obligation backed by the full faith and power of the government whose job it is to protect and defend, among other things, that obligation’s ability to be redeemed at will.

But the capital obligation inherent in the bills in your pocket can be used in many ways.  It can be traded directly for a good or service [Please see: Lap-dance] or it can be exchanged for a percentage of other instruments of obligation [an investment] such as stocks, bonds, T bills, time shares etc.. [or a handful of tickets at the racetrack].  This of course in the hopes of getting even more of them back in the long run [Return, Please see: Payoff]. But if the risks you see are larger than your  willingness to gamble, you can simply take those little slips of obligation and keep them in your pocket until you believe the risk vs reward favors you putting them into play again [a great inside tip on the 3rd, at Belmont].

Now, if enough people give their capital obligations to a like-minded group you get large-scale investments and working capital markets [That whole “business” thing Obama has been pointing at]  All of it is really just a lot of people like you and me working together with shared risks, possible returns and economies of scale [together, we could buy a whole lid, and make more Benjamins]. If however, enough people pull their little slips of obligation out of the capital market pool and keep them in their pockets, you get a market contraction and a slowing of the economy simultaneously -- nothing happens, anywhere.  Jobs go away as business start to hurt.

Now two things of interest [pun definitely intended, but you don’t get it] should be noted.

1) Money taken out of the market by the actual owner can no longer be put to work creating jobs, infrastructure and other bits of the modern economy [Would you give your money to your deadbeat cousin?].

2) Likewise, business and personal taxes remove capital from the working market by forcefully taking it from those who could have used it in business endeavors.  Unless the government can create jobs better than private enterprise [Please see: Snowball, Hell], you again get a diminishing of job creation, infrastructure and other bits of the modern economy .  This is acceptable however so long as the level isn’t so great that the market can’t calculate an acceptable positive return on investment [please read that twice, it’s kind of a big deal] or the economy is contracting [Please see: Right Now].

Take an agenda of equal parts punishing-the-rich and Orwellian “investment in our country”  promises [Please see: Spending, Drunken Sailor] and both of the above scenarios can occur simultaneously.  Why risk investing if the market is contracting? Poof! Low-risk middle class investors keep their trade-able capital obligations in their pockets.  Meanwhile, what investments there could have been from the medium to high-risk crowd are gone, as that capital is seized by the bureaucracy. Poof! Well-to-do investors lose the capital they once had to invest.  [Ever work for a poor man? Make a rich man poor, and he can’t pay you either].

The government could of course print more money to pay for everything, but that devalues the ones already in print. Just as doubling the stock shares of a company drops the value of each original share in half.  And of course, printing more greenbacks causes prices to skyrocket, as the holders of those goods try to reach an equitable true valuation [Inflation: see Carter, President and Germany, 1940].

Now all of the above are basic free market principles, Supply and Demand etc... [Johnny has a playstation. Billy has 4 Benjamins] it is not rocket science, not hard to grasp.  Yet Obama’s administration seems intent to make up new rules, regardless of how the market actually works.  It is not a coincidence that Obama’s cabinet has zero actual business experience – its amateur hour in Washington and it shows.   They do however seem to be excellent at Orwellian doublespeak, and use it to demonize anyone who raises a simple counter argument to their fiscal foolishness [Please see. Fecal Matter, Bovine].

Perhaps our clarion call for the uneducated should be “Obama Lied! Business Died!” [You get that, right? Right?]

But we need to add something Orwellian, so the overeducated follow blindly along as well.  Perhaps,  “Obama Lied! Business Died! and that’s Double-Double Ungood!”

Now everyone gets it.