Category Archives: View

View 750 Friday, November 16, 2012

Survival in a world of makers and takers. I am working on an essay. Suggestions welcomed. It will not be necessary to remind me of Atlas Shrugged. I am not that absentminded.

Barnes and Noble is closing FictionWise. Those who bought eBooks from Fictionwise have one a short time to convert them to B&N Nook format; the FW books are under Digital Rights Management, and once B&N stops maintaining the FIctionWise servers, they will be inaccessible.

If you have bought FictionWise books the following applies:

You will be able to read the transferred eBooks that you purchased at Fictionwise (including eReader.com and eBookwise.com) by downloading NOOK’s free mobile app to your iOS or Android smartphone or tablet, or you can read your transferred eBooks with your PC/Mac web browser, as well as on the award-winning NOOK® devices. If you would like to transfer your Fictionwise eBooks in your Fictionwise Bookshelf to a NOOK Library, simply opt-in by following the steps below.

Step 1:

Click through to the link below to go to the opt-in page, where you’ll be instructed to confirm that you would like your Fictionwise eBooks in your Fictionwise Bookshelf transferred to a NOOK Library. Please opt-in by December 21, 2012.

Step 2:

Once you opt-in, you will receive an email from Barnes & Noble.com with an access code and instructions for redeeming this code. This access code represents the Fictionwise eBooks in your Fictionwise Bookshelf that are being transferred to a NOOK Library for you. You will also see a link to a code redemption page.

Click through to the redemption page and simply enter your code as prompted. This will move your existing eBooks into a NOOK Library. Please redeem this code by January 31, 2013.

Note the deadline.

Authors of FictionWise books presumably will get their rights back. It should not be difficult to convert them to some other format. Note that Barnes and Noble and Amazon use different formats, but you sell books in both formats – but you can’t have a sale at B&N and undercut the price you charge at Amazon.

The publishing revolution continues to shake, rattle, and roll, and we can only dimly see outlines of some future developments. At the moment, about 80% of author revenue from eBooks comes through Amazon, 15% from B&N, and the rest is lost in the noise. That doesn’t preclude the rise of other eBook publishers. At one time Baen dominated the eBook market, but that was long ago when the market was much smaller than it is now.

Things change like dreams, but so far it has been good for authors.

The Benghazi story will not go away. It is clear that the obscure video had little to do with it – this was a well planned attack involving well equipped forces, not something assembled to support a protest – yet high public officials insisted for days after that it was not a planned attack nor was it sponsored by a terrorist organization.

We can speculate as to why it was thought a good idea to pretend to believe this story, and it is possible to come up with theories that make the whole mess fit in with Napoleon’s dictum: never ascribe to malice that which is adequately explained by incompetence. But in that case the incompetence must reach the highest level; and there must have been disagreement at some lower levels, and that disagreement must have been suppressed. Again we need not assume malice, merely obedience, on the part of the subordinates. Now that the story is out, one would think that at some point those ordered to act stupidly would welcome the discovery that they were merely obedient…

View 750 Thursday, November 15, 2012

Simple question.

The government only pays you UNEMPLOYMENT INSURANCE ( which, of course, I have paid for) for a whopping 26 weeks. Where did you get this crazy idea that people can live off unemployment indefinitely, which underpins your assertion.

Maybe you should try to feed your family on 405 dollars a week for 6 months before you pretend that people are choosing this as a lifestyle. Explain to your hungry kid at dinner why there’s noting else to eat. Getting a job is easy compared to that.

I can only think I have not been clear. I don’t think I have ever said that one can live indefinitely off unemployment. When I was an undergraduate “the unemployment” was known as 26-26, meaning that it was $26 a week for 26 weeks. The benefits have been raised considerably, and the duration extended to 99 weeks for many cases, but is still short of infinite.

Men with families who stay home and try to support them are not likely to be tempted to turn down a job offer because they prefer unemployment. On the other hand, those who live on unemployment do tend to adopt a new lifestyle, and to discover the other entitlements and benefits available. Indeed, given the blitz of radio advertisements for the food stamp program in the weeks before the election, they don’t have to work hard to make that discovery.

As an aside, the Food Stamp advertisements in California were promoted as “Cal Fresh”, and they were ubiquitous until just before the election. I have not heard one since. None of the ads mentioned the words Food Stamps.

Not every person who goes through a long period of surviving unemployment adjusts to the point that continuing that life is preferable to continuing to look for jobs. How many do I don’t know. I’ve never been in that situation, and I don’t suppose very many of my readers ever have. I can tell you that there are plenty of jobs I would not take if it came down to that vs. a life on entitlements. Whether that would have appealed to me when I was younger I can’t tell you.

The people most critically affected by the economic crash are solid citizens, skilled workers who were solidly middle class until for one reason or another they were priced out of the labor market, and who have little capability of ever regaining the income and status they once had. Their companies could not compete, and the international economic policies protect keeping consumer prices lower (through non-tariffed imports) than job protection. That is yet another debate: clearly there are cased in which protective tariff to keep domestic industries alive have been successful; there are also cases in which protection produced terrible results and didn’t actually protect the jobs either. Lincoln’s observation that if he bought a shirt from New England he got the shirt and the money stayed in the United States where it could still be taxed doesn’t apply so much in these days of international corporations, but it is still something to keep in mind when designing economic policies. When I was young the South was solidly Democrat in part because the Democratic Party had a policy of “tariff for revenue only” as opposed to the Republican Party which favored protective tariff. That was long ago, and since that time industry has come to the South despite the enormous protective taxes on textile processing machinery, and the issue never arises any longer. The question of a rational policy that balances job stability against the higher consumer costs that come from protective tariff is worth discussion.

The problem is that no entitlement society can ever restore the lost jobs of the skilled workers whose industries have closed down. They will have to adjust to a new life style no matter what the government policy. Government and entitlements can’t make them middle class again. Government can employ some of them, but then they have to be paid for. And government can raise the level of what we call ‘poverty’ to something less intolerable – a large number of the people of the world would consider the US poverty level to be one of unattainable luxury. The question then is how long that can be continued: at present productivity levels it can’t be. Before we can give out enough goods to keep that level going we have to have those goods, either through manufacturing the goods or through providing goods and services to those who do make the stuff that we need.

In addition to stuff, there are essential services that must be provided. Health care is one of them. There is a limit on how many of those services are available. The remedy is to train more people to provide them. We’ve been through this before: is there a real limit to the number of medical professionals who can be supported at levels that will induce them to undergo the rigorous education and training required to bring them up to an acceptable level of service?

These are the kinds of problems that must be solved.

One solution is central planning. Five Year Plans. Guaranteed jobs. Employment stability. Schumpeter dealt with that a long time ago, in a book that used to be required reading for everyone who pretended to a university education. So have many others. Central planning tends to fail for lack of information. The computer revolution is said by some to have remedied that.

We have not seen many examples of successful central planning command economies. Perhaps in future? This time for sure? We will have some answers to that over the next four years.

Another is the “German Economic Miracle” phenomenon: remove restrictions on work and employment, remove most economic regulations, invite people to be ingenious” if you can think of something to hire someone to do, and that person is willing to do it, then go ahead. Yes, it’s more complicated than that, but that’s the core: unleash the engines of creativity. The result will be growth. Some of it will be brutal. It will be easy to find cases of exploitation’, greed, sadistic bosses, racial discrimination, sexual harassment: there will be good reasons to to impose restrictions and regulations. But for pure economic growth, unrestricted capitalism works.

Incidentally, the one restriction I would always impose on capitalism is size and market share. I would not allow monopolies and cartels. I would not allow the nation to have a Big Five banking system: it would be a lot more like “a not so big 100” along with a ferment of smaller local banks. The same would be true of many other industries: compete by providing more goods at lower prices, not by buying out your competitors. But that’s another story, and one I haven’t time to deal with just now.

What I do want to get across is that I don’t oppose the notion of unemployment insurance. I never took part in 26/26 but I had classmates who took it (and I think illegally continued their undergraduate studies). The notion of 26/26 was to bridge people’s transitions between jobs in a going economy. Inevitably over time the rates went up and the period was extended. That was hardly the main reason for the current depression, but it does contribute to its prolongation. But it can’t be continued forever.

And I think you may have underestimated the effect of entitlements on a coming generation which has not had the experience of supporting itself. Out in suburbia, where people marry and raise their children and send them to school, who show up to work on time and work hard, there is little incentive to live the life of On The Road, and great shame at being unemployed. Elsewhere those values are dying off.

If something cannot continue forever, it will stop.

I also have this on the current situation:

Talk about Paradigm Shift… FBI agent in probe was a good guy made to look like a wacko

Dr. Pournelle,

Saw this in my news today (copyright, Seattle Times) and knew you would be interested in it. Someone was trying to ‘get’ the agent who bucked FBI bureaucracy and should be a hero. Shirtless photo incident totally presented to public out of context … as is seen after reading the facts in this story:

http://seattletimes.com/html/localnews/2019684905_agent15m.html?prmid=4939

Mystery FBI agent in Petraeus scandal revealed

The FBI agent who started the email inquiry that eventually led to the resignation of CIA Director David Petraeus is known for his work in Seattle leading the investigation into millennium bomber Ahmed Ressam.

By Mike Carter <http://search.nwsource.com/search?searchtype=cq&sort=date&from=ST&byline=Mike%20Carter>

Seattle Times staff reporter

PREV 1 of 3 NEXT

FBI Special Agent Fred Humphries once testified for the defense of would-be "millennium bomber" Ahmed Ressam. <http://seattletimes.com/ABPub/zoom/html/2019684906.html>

Enlarge this photo <http://seattletimes.com/ABPub/zoom/html/2019684906.html>

STEVE RINGMAN / THE SEATTLE TIMES

FBI Special Agent Fred Humphries once testified for the defense of would-be "millennium bomber" Ahmed Ressam.

The FBI agent who initiated the investigation that led to the resignation of CIA Director David Petraeus has a history of bucking the system on principle, once testifying for the defense of convicted would-be "millennium bomber" Ahmed Ressam about Ressam’s harsh treatment by the agent’s colleagues after the 9/11 attacks.

Special Agent Fred Humphries was outspoken in opposing the FBI’s decision at the time to turn Ressam over to agents from New York after the attacks, and warned their tough tactics were undoing the cooperation Humphries had coaxed out of the al-Qaida-trained terrorist. Eventually, Ressam ceased cooperating, as Humphries predicted.

Humphries found himself sharply criticized within the bureau. He insisted he had done right and owed it to Ressam.

That same sense of right and duty may be what drove Humphries late last month to contact U.S. Rep. Dave Reichert when he concluded that the FBI was dragging its feet — possibly for political reasons — into an investigation into disturbing emails sent anonymously to Tampa socialite Jill Kelley, according to sources familiar with the case.

That investigation eventually led agents to discover that the emails were written by Petraeus’ biographer and secret lover, Paula Broadwell.

Reichert, R-Auburn, took Humphries’ concerns to House Majority Leader Eric Cantor, who took the message to FBI Director Robert Mueller. Congressional leaders have since complained that they weren’t told about the probe until Petraeus resigned three days after the election.

Kelley, a family friend, first contacted Humphries about the emails, according to Humphries and news reports. Humphries referred Kelley’s complaint to the bureau’s cybercrime unit and was not directly involved in the investigation, according to the sources.

Humphries, in a telephone interview on Wednesday, acknowledged he sought out Reichert, through his former boss, retired Seattle FBI Special Agent in Charge Charlie Mandigo, but declined to elaborate.

But two sources said Humphries decided to go outside the bureau when his concerns about the progress of the investigation — which he believed involved national security — were met with an internal investigation into a shirtless photograph of Humphries found in Kelley’s email.

Humphries, 47, confirmed the photograph exists and was sent to Kelley and dozens of other friends and acquaintances in the fall of 2010, shortly after Humphries had transferred to the Tampa office from Guantánamo Bay, where he had been an FBI liaison to the CIA at the detention facility there.

Indeed, among his friends and associates, Humphries was known to send dumb-joke emails in which the punch line was provided by opening an attached photo.

A Seattle Times reporter was among those who received an email containing an attachment of the shirtless photo. The subject line read: "Which one is Fred?"

The snapshot shows Humphries — bald, muscular and shirtless — standing between a pair of headless but equally buff and bullet-ridden target dummies on a shooting range.

The joke — over which was the dummy — has now backfired in ways he couldn’t have imagined on Sept. 9, 2010, when it was first sent.

Mandigo confirmed he received a copy of the photo as well and described it as "joking." The photo was sent from a joint personal email account shared by Humphries’ wife. Humphries said that, at one point, his supervisor posted the picture on an FBI bulletin board as a joke and that his wife, a teacher, has a framed copy.

Humphries joined the FBI after serving as an Army infantry and intelligence officer, leaving with the rank of captain. He had been with the FBI for just two years when he was made the case agent in the Ressam investigation, involving a 1999 plan to set off a bomb at Los Angeles International Airport.

The trial judge in the Ressam case, U.S. District Judge John Coughenour, praised Humphries’ efforts and integrity repeatedly.

In Tampa, he and his wife also dipped into the party circuit that featured CENTCOM brass. In an October 2008 email to friends and acquaintances, including a Seattle Times reporter, he said they had just had "a phenomenal evening at a private residence on Davis Island with MG Jay Hood (former commander at GTMO; now Chief of Staff, CENTCOM) and General Petraeus. Also in attendance, Former Governor Bob Martinez, Mayors, who’s who in Tampa and the State of Florida."

The email referred to the two generals as "great leaders."

The New York Times quotes Humphries’ attorney, Lawrence Berger from the Federal Law Enforcement Officers Association, as saying that the Humphries and Kelleys socialized, and that was part of the reason Jill Kelley went to him about the troubling emails.

He also described the shirtless photo as being "sent years before Ms. Kelley contacted him about this, and it was sent as part of a larger context of what I could call social relations in which the families would exchange numerous photos of each other," Berger said.

In May 2010, while an agent in the Tampa field office, Humphries shot and killed a disturbed, knife-wielding man outside the gate of MacDill Air Force Base, where Humphries was training with SWAT and special-forces soldiers.

In an email to the Seattle Times reporter several months later, Humphries described the incident.

"I had 4 seconds, that seemed like 40, to go through my mental checks," he recalled. With cars and civilians around, he waited "’till he was five feet from me before firing two rounds … after repeatedly warning him.

"I worried it was a FT Hood scenario," he said, referring to the shooting spree in 2009 at the Texas Army base that left 13 dead and dozens wounded. "I didn’t even have time to put on my ballistic vest. Crazy world."

The shooting was deemed justified. Locally, Humphries is remembered as a driven and dedicated counterterrorism agent whose first big case was Ressam, during which he wound up traveling nearly 300,000 miles. Ressam is serving a 37-year sentence.

Humphries also was a key agent in the investigation into James Ujaama, a Seattle man who tried to set up a terrorist training camp in Oregon.

Andrew Hamilton, a King County senior deputy prosecutor and former federal prosecutor in the Ressam case, said of Humphries on Wednesday, "I can honestly say he was one of the finest agents I have ever worked with." He said "one of the reasons" Ressam cooperated with federal investigators "is the way he was treated by Fred Humphries."

"I think Fred was very caring, he was honest and very professional," Hamilton said of the agent’s dealings with Ressam. "Let me just say this, Fred never got tired," Hamilton added. "He would work until the job was done."

[emphasis added] I put this up for information.

Missiles rain on Tel Aviv. Israel is calling up the reserves. They do not do this lightly.

U.F.O. seen over Denver Colorado Skies:

https://www.youtube.com/watch?v=2qxlMzKIEUY&feature=player_embedded

This guy records UFO’s over Denver between Noon and 1pm a couple of times a week. He tells a TV station. They send out a cameraman and a reporter. THEY get the UFO’s on video. NORAD claims no air activity for those times.

Well! Fancy that!

Ed

It appears to be repeatable.

http://www.businessinsider.com/fox-ufo-flying-above-denver-2012-11

Someone will eventually explain it I suppose. Still, very interesting.

http://ebooks.adelaide.edu.au/c/carroll/lewis/snark/ An attractive nuisance.

View 750 Tuesday, November 13, 2012

I had finished the editorials and news and was thumbing through the entertainment section of the LA Times when my attention was drawn by a photograph of Spartan soldiers, which attracted me to read a review of a new TV series by National Geographic: Mankind: The Story of All of Us. The series begins tonight at 9PM. Oliver Stone will do his liberal view of about 75 years iof US History in 10 hours. The Geographic will manage to tell the story of mankind from the Big Bang To present. We weren’t around for a long time after the Big Bang, so the story starts with hunters in the grasslands of East Africa.

I haven’t seen the series, but the reviewer says “As with ‘the Story of Us’, ‘Mankind’ with its emphasis on battles, weapons and gadgetry, is clearly aimed at engaging the easily distracted preteen male.” It will be interesting to see which battles National Geographic considers decisive in the history of mankind. As long time readers will recall, I recommend Fletcher Pratt’s Battles that Changed History as one of the best overview summaries of the history of Western Civilization, in part because of his essays on why obscure battles like the Nike Sedition in Constantinople, and Las Navas de Tolosa in southern Spain were selected over the better known battles of Creasy’s Fifteen Decisive Battles of the World which I also recommend. (I also recommend that you read Pratt first, but that’s not terribly important – I read Creasy before I ever heard of Pratt. But Creasy concentrates more on the battles; Pratt embeds the battle into its times, and that can be important.) I suspect the Geographic series will draw heavily on Creasy. Most lecture series of this kind do so.

That, however, isn’t what intrigued me about this upcoming history series. The review continues “There is no way to tell the history of mankind in a dozen hours of television without resorting to absurdities, which here include having “experts” explain how terrible cold and hunger can be, how difficult it was to build the pyramids, how dangerous bandits were and how the invention of the alphabet made it easier to learn how to read.”

Given the state of historical knowledge – abysmal – stretching from the White House and Cabinet through many level of University scholars and down into the public school system, even I am not at all convinced that it is absurd to explain to young American people how terrible cold and hunger can be. We have immigrant children who know these truths in their bones, but the middle class American teen agers who watch the National Geographic Channel are not likely to have experienced such things at first hand. More, concentration on battles and military history cannot be a bad thing. I suspect that “Mankind” will not show the crucial scene in the education of Alexander of Macedon (not yet The Great) who as a teenager was sent with one of Phillip’s marshals with a small force to deal with insurgents and raids on the frontier. On the way they encountered a stream of refugees, young people, women well raped, carrying everything they had as the fled toward the order represented by King Phillip. The old marshal pointed to the stream of misery and said “That is defeat. Avoid it.” Alexander remembered that all his life. It is a lesson every free person should learn.

But that was not the phrase that attracted my attention to this review.

Reviewer Mary McNamara, the Times Television Critic, may think it absurd to have to explain to viewers that the invention of the alphabet made it easier to learn how to read, but I can guarantee you that a very great number of professors of education – and tens of thousands of their students who have become teachers – have never given that idea much thought. Until not very long ago California public schools, like those in many other states, discouraged the teaching of phonics in first grade. They taught “whole word” reading, which is essentially reading as if there were no alphabet. Words are presented as if they were icons. The notion is that one learns to read by word recognition. This bypasses the ‘decoding’ of words by ‘sounding them out’ and thus makes for faster and smoother reading. This is, after all, the way good readers read. There is a lot of research data proving that. So why teach the painful process of word attack, phonics, syllables and sounding out? Better to teach children to read well. Alphabets are all very well, but the important thing is to learn to read words and understand them.

The results were disastrous and California has never recovered from this. School readers had to be revised for ‘grade level’, meaning that stories like Ruskin’s King of the Golden River, poems like Longfellow’s Skeleton in Armor and Macaulay’s Horatius at the Bridge, short stories like The Celebrated Jumping Frog of Calaveras County, many stories by Steven Vincent and Rosemary Benet, all of which were taught by 7^th grade in Capleville Consolidated in the 1930’s to farm children, vanished in favor of Dick and Jane and the whole parade of vocabulary controlled junk written specifically for grade schools. The first words of the McGuffy Reader which served America for generations were “No man can put off the Law of God.” The first words of the Soviet first grade readers were “For the joys of childhood we thank our native land.” The first words of a most widely used first grade reader in the United States during the height of the look-say period were “’See Spot run.’ said Jane. ‘Run Spot run.’”

Worse than the sacrifice of literature to banality was the plunging literacy rate. And worst of all was the loss of continuity: with no professor of education teaching phonics, no new teachers learned to teach that English is a phonetic language, and the whole notion of teaching reading through phonetics and teaching children to ‘sound out’ words was pretty well lost. Since professors of education have tenure, replacing those who believed in look say (and clearly didn’t understand phonics) takes a long time – and in many cases is being resisted because those tenured professors don’t want to bring in new professors who know the old goons to be culpable ignorami.

Incidentally, for those who don’t know: of course a study of people who are good readers will not reveal many who ‘sound out’ words. Almost no one reading this exposition will read that way, until he encounters polyethyldimethyltoluene, and depending on reading habits more common words that may be unfamiliar. One may or may not be able to read quaggas at a glance, although if the book in question is a history of large South African mammals it will be encountered often enough to become part of the recognition vocabulary, just as Hannibal and Punic will become familiar to those reading Roman history. On the other hand, those who know phonics will be able to read both those words. They will also be able to read many others they may have heard in conversation but have never seen in print. And of course they will encounter words they have never heard before, and must infer their meaning from context or by looking them up or asking a teacher. It’s a lot easier to ask the meaning of a word one can say. **

I don’t suppose that the National Geographic explanation of how the alphabet allowed more people to learn to read will much change the world, but there is a potential there. The problem here is that smart children often figure phonics out for themselves, but since they have never been taught the principles they don’t learn them all. My wife’s reading program requires seventy half hour lessons to go through English phonics in a systematic fashion. When the student is done with it the student can read, and it works with pretty well every intelligence level. (My mother taught first grade in rural Florida in the 1920’s; when I asked her if any of those farm children left first grade without learning to read, she said, some years there might be one or two, but they didn’t learn anything else either.) Bright kids will learn to read, sort of, without knowing about phonics, but some will have problems; far better to learn systematically. Less bright kids – and some bright ones – just don’t catch on to phonics until the subject matter has by-passed them. If you can’t read by fourth grade you won’t be likely to get much from the rest of your education.

You may take the above as relevant to the question of survival for the next four years. One thing you can and must do is educate your children. The public schools are not likely to do that, and I see no incentive for them to get dramatically better anytime soon. The most important part of early education is to be able to read. It is your duty, — not the school’s – to see that your children can read before they leave first grade. It would be better that they know before they enter first grade. Since the British education system for centuries was to have nannies teach middle and upper class pupils to read at age four, and it is not likely that those children were better protoplasm than yours, you may safely embark on doing this. If you want to know how, start with Mrs. Pournelle’s reading program The Literacy Connection. It’s old and it’s hokey, but seventy half hour lessons will do the job. Some may have to be repeated, but that’s no difficulty. While you are at it, see that your kids learn the Addition table to 15 + 15 by then end of first grade, and the Multiplication table to 20 by 20 by the end of second grade. None of that requires home schooling, which may not be possible. More on this another time: but one thing you may be sure of is that with the current election results, dramatic improvement in the schools is unlikely. You may add bad education and increased illiteracy to the inflation and unemployment of the next few years. Inflation, unemployment, and increased illiteracy may not be inevitable, but that’s the way to bet it given the past.

Smart people should be in survival mode. That doesn’t mean trekking out into the woods and hiding. What you need to do is find ways to make it more probable that you will survive in place in the coming stagflation. We will from time to time look into observations on this, and of course I welcome discussion.

I would say that National Geographic is correct in designating the invention of the phonetic alphabet as a key event. Of course those of us brought up on V. M. Hillyer’s A Child’s History of the World have known that from an early age (I read it at about age five; my father bought it and left it lying about the house…) Alas, I don’t know of a reliable low cost source, but I can recommend the book as an early work for American kids. I suspect my father’s method of getting me to read it was optimum in my case, but I also understand that others have had success with bribes…

For that matter, leaving Pratt’s Battles that Changed History lying around for teen agers is worth a try. It too is worth a bribe…

I had thought the Benghazi / Petraeus story could not get more bizarre. Clearly I was wrong. Speculation without facts is a waste of time. We have not heard the last of this.

And once again let me remind you that inflation is almost certainly coming. Make some preparations. At least learn something about it.

** For grins, did you note the relationship of Punic to phonetic?

Note that the election was extremely close. Well under a million votes in six key states would have changed the outcome. The imbecility of the Republican consultants who built a strange and utterly faulty ground game should be enough to let us get rid of those suckers, although I wonder if the leadership has enough good sense to do that.

Close isn’t winning. But despair is not justified.

View 750 Monday, November 12, 2012

I have said that the prudent will prepare for inflation; that inflation is taking place now and will continue. I have also said that sometimes inflation has resulted in drastic hyperinflation – Weimar Germany and Brazil in the last quarter of the Twentieth Century are examples — and this is not impossible for the United States.

Not everyone agrees with me. I have this mail:

Hyperinflation requires a wage-price spiral.

Hyperinflation requires a wage-price spiral.

Hyperinflation requires a wage-price spiral.

What I tell you three times is true.

What mechanism in the United States economy translates inflation directly into wage increases?

What evidence is there that wages in the United States are inflating at a rate anywhere close to price inflation?

For full points, discuss the specifics of how Weimar Germany holding debt denominated in foreign currencies had the inflationary effect, and explain how the same effect arises in the United States in spite of the fact that United States debt is nearly all denominated in dollars.

If you are unable to frame a proper answer, post a note admitting that you are a fraud and a liar and should not be talking about things you don’t understand.

PRICE INFLATION IN THE ABSENCE OF WAGE INFLATION IS NOT INFLATION, IT IS AN ECONOMIC FULL STOP.

Either the Fed will figure this out, in which case we get deflation, or it will not, in which case we get Mad Max. Either way, you have no idea what you are talking about and should stop deliberately misleading your readers.

I post this in hopes that someone more articulate will explain it to me. Given its tone I have no real desire to correspond with the writer. Is there some truth in there that I have not seen?

I would think that printing fiat money is the very definition of inflation. When there is a great deal of money chasing finite good – including labor – then prices for the goods will rise, and if there is any shortage of labor, then wages will rise. Indeed, on Sixty Minutes last Sunday (November 11, 2012) there was a segment on the shortage of skilled labor for manufacturing jobs in these times of unemployment, and one suggestion was that wages should rise. Of course that would not instantly create more skilled labor; what it might do is induce more of those retired, or satisfied with an entitlement life, to reenter the labor force; employers are of course competing with entitlements, and after January first when the Affordable Health Care Act takes effect there will be other effects.

Hyperinflation is fairly rare, and lest I have not been clear on the matter, is not inevitable. Not inevitable does not mean zero probability. But ever increasing supplies of money will always have an effect, and increasing supplies of money widely distributed will cause prices to rise. If wages do not rise you can get various forms of stagflation; those old enough will recall Gerry Ford’s Whip Inflation Now efforts, and the increased money supply resulting in the return of stagflation during the Carter era. Under Keynesian theory you can’t have stagflation; but in fact that did happen.

Keynes famously quipped that burying jars of money would create non-government work (digging up the money) and through the release of the money into the economy solve the problems of depression. There was also the Townsend Plan, which in essence advocated large pensions to be paid to nearly everyone over 65. Those interested in the theory of the plan can find Townsend’s original proposals on line; they are quite appealing, and were persuasive to many.

If all this works – if goods are produced and more and more people go to work, then you get a booming economy, and all is well. That was the theory of Stimulus, and the shovel ready jobs as investments in infrastructure. Readers may observe the results of that experiment.

But if there is an increase in money but not in goods, prices will rise, and critical prices – energy being one critical – can rise quite rapidly. This will have an effect on the economy and on investment strategies. There are I suppose a number of outcomes including “an economic full stop” whatever that is, but in the latter half of the Twentieth Century the result was almost always stagflation: rising prices, stagnant wages, and high unemployment. This leads to demands for more ‘safety net’ entitlements. We do not know the final outcome of creating a situation in which fairly large numbers of people live under those circumstances, and many become adjusted to living on the dole as ‘normal’, but we may find out from direct experience.

So. It may be that I simply don’t know what I am talking about, and I am misleading my readers, but I do not do so deliberately. I think I have made a rational analysis of the probable effects of increased entitlements financed by increases in the money supply – pretty well the present US policy – and it seems very reasonable to me that the result will be stagflation: rising prices coupled with high unemployment. The rises in the consumer price index will officially be called “Inflation”, as in Whip Inflation Now, and I believe that prudence demands that we prepare for it.

Inflation always reduces the value of fixed income and cash savings. Those living on savings or fixed annuities should understand that.

The Petraeus affair continues, and becomes stranger; indeed it becomes so strange that it is becoming credible. There may be less to the story than we thought. There remains the story of Benghazi: who knew what, and when? The key decision was to leave the consulate inadequately protected coupled with not having a ready rescue force standing by in case the gamble failed. But I doubt we will learn much from General Petraeus on that.

Way back in the Eisenhower Administration there was a saying, “Deficit financing doesn’t cause inflation, deficit financing IS inflation.” While that is not strictly true – it is possible to have deficits created in non-inflationary ways – it isn’t likely. In general, governments running big deficits are engineering inflation. When more money chases the same goods, prices rise.