AIG Part 2: Back from the Dead

“If I haven’t seen it, it’s new to me.” Well, this news is just a few weeks old, but it still begs a review from an enlightened POV. Remember AIG (American International Group), the name probably most closely associated with bitter feelings over the government bailout of financial institutions in the immediate wake of the financial collapse of last year? Well, the axed chair and CEO, Maurice Greenberg, is constructing what could turn into a new financial giant, and its recent progress is drawing some scowls.

Of particular irritation to some is that Greenberg is recruiting from among the ranks of current AIG workers. The restrictions which the Fed placed on AIG as terms for its bailout “loan” have strained payroll and reduced employee salaries. This may serve as an incentive for the talent to bail out of AIG and join Greenberg’s new crew. These developments inspire some concern that Greenberg is going to build an AIG 2, and it follows that AIG 2 would take business from AIG 1. In fact, a concern has been voiced that Greenberg’s new project could put AIG out of business, in which event, the billions it owes the Fed will never be repaid.

Well, obviously! Why should anyone have expected a business that’s run even in-part by the government to operate competitively (barring unethical practices like subsidy)? The direction of financial institutions by the government (remember Fannie Mae and Freddie Mac?) almost single-handedly precipitated the lending bubble that culminated in last year’s financial crash.

Need a fresher example? President Obama said his health plan, whose cost he estimated at nearly a trillion dollars, could be mostly paid for by cutting waste in the current government-run health programs Medicare and Medicaid. Excuse me? If there’s that much waste in the current government-run health programs, why would we let them arrogate the entire healthcare industry? (Why do we have a healthcare crisis in the first place? Because the entire industry is already heavily regulated by the government. Compare the healthcare industry to present-day AIG.)

So there’s the news in a nutshell: Maurice Greenberg still has the expertise (and perhaps the sleaze) to operate a business effectively enough to inspire fear in those who entered the field of politics because they lacked such real-world skills as economics and business management.

(I wrote this blurb for work, but they declined to post it, so I put it up here.)

On Equality

Those who produce nothing have no power to raise the lifestyle of anyone. Thanks to democracy, though, they can still promote equality by putting a drain on those who do produce.

Men are not equal. Neither were they equal at birth. A mother of two may attest to as much, with no blush of conscience. It is folly to take the oft quoted "all men are created equal" from its context as an argument against monarchy and use it to disguise robbery as righteousness. The robbery to which I refer is, of course, the redistribution of wealth from those who create it to those who do not.

It is a twofold privation: First, the fruits of labour are removed from him who worked. Second, the incentive for labour is removed from him who did not work.

Entitlement: Having the title is not having the car

(We could discuss at length the reasons why economic policies coming from our current governors are not working and are not going to work. Such an understanding is valuable, but there is a great deal of the population that is immune to and uninterested in such argument. Let us, rather, examine in brief the philosophy behind the policies issuing from the current powers:)

The word is entitlement. When entitlement takes centre stage, the law of the land becomes “Need is the great arbiter, and all else must bow to it. If a person stands in need, there shall be goods to supply his want.”

The idea that needs will be met ipso facto is absurd, of course. For example, if I find myself lost in an endless sea with nothing but a life preserver on hand, then I need fresh water, food, and shelter to survive; but fresh water, food, and shelter are simply not to be found. My need must go unsatisfied, even if I believe that I am entitled to life.

But the reader mustn’t think me entirely foolish for expecting to survive. After all, experience has taught me all my life that goods will come out of nowhere to supply my wants, if I cannot supply them myself. If I go to an ER and cannot pay my bill, I don’t have to, but I still get the lifesaving service. When gov’t-subsizidized financial entities decided that I was entitled to a house, they practiced reckless lending policies so that I could obtain one. (This pressed private financial institutions to practice similar foolish policies in order to stay in business.)

Our culture teaches us that poverty divests one of his fixation on worldly goods, so we might imagine people of poor backgrounds to be free of the fallacy of entitlement. However, in our society, it is the poor whom we most soundly indoctrinate with the error of entitlement. To wit, the less one produces himself, the more he is entitled to receive. The poorest of us do not pay taxes, yet they enjoy roads and schools and parks we did not pay for. Entitlements in some cases extend so far as to bring cheques from the rest of the taxpayers (e.g. unemployment, wellfare). This is not to say that by producing nothing we enjoy the best of everything but, rather, by producing nothing, more of what we have is given to us free of charge.

Thus production and wealth become disassociated. When voters or politicians afflicted with this distortion of reality (which others have imposed upon them by attending to their needs)—when they assume power, economy must crumble.

A Truly Alien Nation

We usually don’t think of the first wave of European immigrants as ‘immigration’; we call it ‘colonization’. But this wave of immigrants relates to the surge of immigration which we can expect several decades in the future.

In his book, The Next 100 Years, George Friedman paints a rather believable picture of immigration and the baby boomers in 2030: There will be a disproportionate population of aged, non-working citizens in the US, and the rising generation will not be enough to replace them in the workforce. Americans have been having fewer offspring, and they are living longer after retiring. This is not anomalous to the US; governments of all industrialized countries will work to induce foreign workers to immigrate.

With respect to waves of US immigration, we tend to reflect on the Irish, Eastern Europeans, and Chinese, on whom the natural-born Americans heaped considerable persecution. Said persecution was unbecoming of a decent people, but it had the effect of inducing the immigrants to become American-ized, at least. After all, when countries are divided into divergent cultures, we end up with Yugoslavia, a short-lived nation, ready to tear itself apart and unprepared or unwilling to unite for its own defense.

Treatment of immigrants is currently vastly different from what it was in olden days, and so shall it differ in future. Treatment of illegal immigrants, if given so heartlessly as to the legal immigrants of yesteryear, is popularly condemned, unenlightened, we would say.

Speaking again of the first wave of European immigrants to the present-day US, the Native Americans (Amerindians) did not require the first immigrating English and Scots to adopt the native culture or language. Doubtless they did not have the might to force the Europeans to assimilate, but regardless, as a consequence of their failure to do so, the Native Americans became outnumbered in remarkably short time. Their culture, languages, and race were in short order nearly wiped from the land.

Ere the reader insist that the Europeans only effaced the Native Americans because of the former’s superior arsenal, recall that our immigrants will have access to the only weapons they’ll need: the candidate’s soapbox and the voting booth. (Recall furthermore, the US’s history of disseminating its military technology, witness Iran in the 80’s.)

Now I am a native American. I already pay my government to print its documents in a foreign language. I have lived in neighbourhoods where my language was scarcely spoken. I have seen the disparity of culture. I have seen firsthand that immigration does not lead to integration, not without a sizeable population of natives to immerse the immigrants and, furthermore, strong social incentives (such as persecution).

When the immigrants come to replace the baby boomers in the workforce, the face of the American population will change dramatically. When the baby boomers die out, it will change again. And then we may find ourselves in a foreign land.

Homosexuality: A Cause to Believe In

It is not difficult to accept that sexuality of any persuasion is not a choice, but it is quite a stretch to attribute it to genetics. It is socially accepted that pœdophiles do not choose to be attracted to young children, that homosexuals do not choose to be attracted to persons of their own gender, and straight men do not choose to be attracted to women.

HEREDITY

If homosexuality were genetic, I suggest, we should see a lot fewer homosexuals now than in the past. Hear me out before making the obvious contention that in the past, homosexuals lived under the necessity of closeting their deviant sexuality and therefore disguised their numbers:

In the past, regardless of sexuality, it was an economic necessity for men to marry women and produce many offspring. George Friedman offers a cogent explanation this in The Next 100 Years. He furthermore describes the current trend, in which childrearing is a great expense with no hope of any economic return for at least two decades, generally. Populations are declining or preparing to decline in industrialized countries, and in second- and third-tier nations, population growth is leveling off.

If homosexuality is genetic, we can derive two ideas from Friedman’s observations: homosexuals of ancient days should have been marrying and passing on their genes just as prolifically as heterosexuals of their time; whereas in present day (starting 20+ years ago), homosexuals’ incentive to engender children is removed; ergo the current and rising generations should contain a paucity of homosexuals.

An acceptable theory which uses heredity as an explanation for sexuality might say that the explosion of the homosexual population is attributable to mass mutation (and why not? from power lines to processed foods, people point at almost everything in the modern world as a mutagen). But it is more than a little far-fetched to expect such a global uniformity in an anomalous phenotype.

CULTURAL DOCTRINE

The primary source of homosexuality, I postulate, is our culture. There is no intelligent debate as to whether sexual beauty is primarily (and by a wide margin) determined by culture. It is accepted fact. There is nothing inherently superior about full, sensual lips, for instance; it’s only a matter of cultural indoctrination.

When homosexuality becomes socially permissible or even a mark of progressive-mindedness or perhaps a social earmark (relating to the entertainment industry, for instance), then culture is teaching people that to be sexually attracted to someone of the same gender is correct. (‘Correct’ does not mean moral nor ‘the only correct mode’; it just means ‘correct’.)

SEX

In a society in which sex is not tightly bound to procreation, the myopic tend to think that the purpose of sex is pleasure and that any other view is unnatural or worse: intolerant. “Well isn’t it?” some readers will ask. Yes, that’s all it is for many readers. But for others, it is an exclusive expression of real love and loyalty. That statement perhaps begs an essay to explain what real love is; this is not the place for that discussion.

Decline of American Capitalism

The front page of the Wall Street Journal yesterday addressed the trend of Hispanics losing their homes in this country. The demography of the home-losers makes no difference; the phenomenon has hit numerous populations, black and white, rich and poor (more poor than rich, and more rich than you’d imagine). And the development of the phenomenon is the same in each demographic: people borrowed money to buy houses which they could not afford.

WEALTH WITHOUT PRODUCTION

The fault lies with both sides of the matter. The borrowers—rich and poor—could not afford to pay for their houses but the lenders were willing to extend them the money. Loans were given out, in many cases despite lack of credit, collateral, and income, which means that the recipients of loans were at a high risk of defaulting—never paying them back.

In some minds there develops a way of thinking in which need, not work and ability, is what makes a man deserve property. Concomitant to this way of thought is a gross misunderstanding of production; it is in the minds of non-producers that this thinking develops. These thinkers do not produce, yet they see wealth in all the first world around them, so it naturally appears that production is not necessary; wealth exists per se, not perforce. In reality, however, immeasurable strain of study, thought, and labor has gone into the creation of everything from moveable type to plastic tableware to the electrical power plant. We flip on the lights almost effortlessly because Thomas Edison worked doggedly to develop a commercially practical light bulb. His alleged statement issued in the midst of its development is well known (however variably quoted): “I have successfully discovered 1,000 ways to not make a light bulb.”

When a man comes to believe in wealth without production, there is no limit to the loans he can justify, and there is no remorse for the misappropriation of others’ belongings, which he must invariably usurp in order to remain afloat in the aftermath of his bad loans. This is what banks across the country have done. It isn’t because they knew something we didn’t. Their actions resulted from fallacious thinking.

JOBS WITHOUT PRODUCTION

Environmental restrictions are tightening up in California. We won’t discuss whether that’s healthy or not, but one prevalent view on the matter is destructive: The factories say that the environmental policies will compel them to leave the state in order to remain competitive. The government responds that it’s no worry because the increased restrictions will create jobs.

“Creating jobs” has been a line thrown around since my childhood and before. Give me a minute, and I can create a job for every human on the planet. I can’t find business for the employees, and I certainly cannot pay them, however. Who are the environmental departments going to regulate when the factories are gone? And where will the government get the money to pay them after the state loses billions of dollars of industry?

The fact is that such environmental-protection jobs are an example of jobs which do not produce anything. These jobs have to be supported by productive jobs. Those are the bottom line. If we focus on regulatory jobs at the expense of the bottom line, we end up with nothing.

ANTI-CAPITALISM

Entertainment media tend to deprecate capitalism, equating it with opportunism, dishonesty, and avarice. In the latest Indiana Jones movie, ‘Mac’ George Michael ironically explains his betrayal of the U.S. and U.K. (both capitalist) and his alignment with Russia (communist) with a shrug and the words, “Sorry, Indy. I’m a capitalist.”

The American attitude toward socialism grows welcoming and has long been doing so. Former Secretary of Agriculture Ezra Taft Benson, appointed in 1959 to host Soviet First Secretary Nikita Khrushchev for half a day, reported his experience:

According to President Eisenhower, Khrushchev had expressed a desire to learn something of American agriculture—and after seeing Russian agriculture I can understand why. As we talked face to face, he indicated that my grandchildren would live under communism. After assuring him that I expected to do all in my power to assure that his and all other grandchildren will live under freedom, he arrogantly declared in substance: ‘You Americans are so gullible. No, you won’t accept communism outright, but we’ll keep feeding you small doses of socialism until you’ll finally wake up and find you already have communism. We won’t have to fight you. We’ll so weaken your economy until you’ll fall like overripe fruit into our hands.’

Khrushchev’s prophesy of half a century ago is being vindicated; there’s no denying that socialism is integrated into our American society and culture. American education is socialist. Government welfare programs, an institution which has been swelling all my lifetime, is socialist. American healthcare is a hybrid of socialism and capitalism and is likely to be nationalized under the new administration—fyi: “nationalized” is another word for “socialized.”

Welfare programs operate on the belief that it is moral to take from those who produce and give to those who do not. He who produces most is obliged to give most, he who produces least is entitled to receive most. We call this philosophy “bleeding-heart,” as though it is the product of love, but guess what, it’s only heartfelt and charitable if you give your own money, not money wrested from the hands of others.

Nevertheless, the practice is useful and the motives largely unquestioned in the hands of a politician who promises to take from the most wealthy and distribute tax breaks among the other 51% of the voters, his purchased voters. Once the potentate has bought the voting base, he will give and give until they depend upon the government for subsistence. And then no one can afford to depose the regime.

The voice grows louder which says, “It is immoral to let people produce in America without taking a portion of their product.”

Attorney General to Nullify Constitutional Amendment

Californians from both camps will rally to the cry of protecting marriage rights, but when the man issuing the call has the power to redefine “marriage” at his will, no legal action on the people’s part can ensure their protection. It is in the name of protecting marriage rights that California Attorney General Jerry Brown pushes for the repeal of the latest constitutional amendment, which defines marriage to be between man and woman.

Brown’s rationale that our current legal definition of marriage encroaches upon marriage rights can be true only if he is permitted to redefine words whenever he pleases—a practice former President Clinton raised to a high art in his peculiar use of the word “is.” If we sanction this exercise of doublespeak, then a marriage law applies just as correctly to congress with a dog in the park as to a member of the opposite sex—provided that the dog be consenting and of age. Whether that age be considered in dog years or human years must vary from court to court, however, because under Jerry Brown’s philosophy, words do not have meanings in legal settings.

Today’s paper quotes Brown to say that he now finds the latest amendment at variance with the declaration of basic freedoms in Article I of the Constitution: “All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.” Does this constitute legal grounds for him to exercise his will in affairs of marriage? The fact is that marriage is mentioned in only two places in Article I: in the context of property ownership …and in the Prop. 8 amendment. There is no legal ground to impute Prop. 8 with violation of the Constitution.

Equality of rights has been called into question, nevermind that from a legal standpoint, homosexuals have and always will have equal marriage rights with heterosexuals: to wit, any man may marry a woman, and any woman may marry a man. Say it’s not fair, a person cannot choose the object of his or her attraction? If I am a pedophile, bestialist, polygamist, or practicer of incest will you make legal recognition of the morality of my union?