Saturday, September 25, 2010

The Hindenburg Omen

The Hindenburg Omen  

[Wiki bloody Pedia] 
A technical analysis pattern that is said to portend a stock market crash; 
named after the German Zeppelin/Airship 'Hindenburg'  that exploded as it was docking in New Jersey on May 6, 1937.


The Hindenburg Omen is a combination of technical factors that attempt to measure the health of the NYSE, and by extension, the stock market as a whole. The goal of the indicator is to signal increased probability of a stock market crash.

The rationale is that under "normal conditions" either a substantial number of stocks may set new annual highs or annual lows, but not both at the same time. As a healthy market possesses a degree of uniformity, whether up or down, the simultaneous presence of many new highs and lows may signal trouble.


         These criteria are calculated daily using Wall Street Journal figures for consistency. (Other exchanges may be used as well.) Some have been recalibrated by Miekka to reduce statistical noise and make the indicator a more reliable predictor of a future decline.

1. The daily number of NYSE new 52 week highs and the daily number of new 52 week lows are both greater than or equal to 2.8 percent (typically, 84) of the sum of NYSE issues that advance or decline that day (typically, around 3000)[3]. An older version of the indicator used a threshold of 2.5 percent of total issues traded (approximately 80 of 3200 in today's market).
2. The NYSE index is greater in value than it was 50 trading days ago. Originally, this was expressed as a rising 10 week moving average, but the new rule is more relevant to the daily data used to look at new highs and lows.
3. The McClellan Oscillator is negative on the same day.
4. New 52 week highs cannot be more than twice the new 52 week lows (though new 52 week lows may be more than double new highs).
The traditional definition requires each condition to occur on the same day. Once the signal has occurred, it is valid for 30 days, and any additional signals given during the 30-day period should be ignored. During the 30 days, the signal is activated whenever the McClellan Oscillator is negative, but deactivated whenever it is positive.

To eliminate false positives some technical analysts have imposed the condition that the Hindenburg Omen must be triggered three times in a row within a month from the first triggering event for said initial trigger signal to be considered to be valid (i.e. requires double confirmation) is only valid when "all tightly coupled triggerings are within a fortnight" will indicate a possible future downturn or correction, depending on the magnitude of any "one off" triggering 

Recent Occurrences

  • August 12, 2010: The Omen's creator, Jim Miekka, considered the Omen officially triggered on this date with 92 and 81 new 52-week highs and lows, respectively. The McClellan Oscillator was a negative -120.03 and the 10-week NYSE moving average was rising; the market closed above its open of 50 days prior (May 27). In the ensuing week, the Omen narrowly missed confirmation twice (August 13 and 19).
  • August 20, 2010: According to the Wall Street Journal, the omen was confirmed on Friday, with 83 new 52-week highs and 95 new 52-week lows on the NYSE. The McClellan Oscillator was a negative -106.46 and the 10-week NYSE moving average was rising; the market closed above its open of 50 days prior (June 11).
  • August 24, 2010: 166 New Lows, 87 new Highs, McClellan Oscillator was negative, but the 10 week average began to fall. (Non-Confirmation.) (Although the 12 week average is still positive.)
  • August 25, 2010: 150 New Lows, 90 new Highs, McClellan Oscillator was negative, but again the 10 week average was falling (Non-Confirmation.) (Although the 12 week average is still positive.)
  • August 31, 2010: 86 New Lows, 164 new Highs, McClellan Oscillator was negative, and the 10 week moving average was up slightly 8.86 (0.13%) but falling (non-confirmation)
  • September 5, 2010 - September 16, 2010: McClellan Oscillator was positive and negates the previous signals in August 2010  

The Hindenburg Omen, named after the airship that exploded as it was docking in New Jersey in 1937, has preceded every crash since 1987, but it has also popped up plenty of times without any subsequent market decline. It resurfaced in mid-August and became popular fodder for various trading oriented blogs. It was triggered by two important statistical events. One, NYSE highs and lows both exceeded 2.5%stocks reaching 52-week highs were 2.9% of stocks traded at the Big Board, while stocks hitting 52-week lows were 2.6%. And two, a rising 10-week moving average for the NYSE compared to a negative indicator that shows market fluctuations (the McClellan Oscillator) -[Forbes]
"I'm taking it seriously and I'm fully out of the market now... I would've probably stayed in unjtil the Beginning of September depending on how the indicators varied. That was my basic plan, until the Hindenburg came along." -Jim Miekka, The creator of the Hindenberg Omen (August 23 2010) The Wall Street Journal

About the Hindenburg Omen: “sort of like a funnel cloud. It doesn’t mean it’s going to crash, but it’s a high probability. You don’t get a tornado without a funnel cloud.” -Jim Miekka

The Meat Inspection Act

Of Meat and Myth - Upton Sinclair "The Jungle"

The Meat Inspection Act    

Of Meat and Myth By Lawrence W. Reed @

Advocates of the spontaneous order of freedom and free markets are forever stomping out the fires of fallacious reasoning, anti-capitalism bias, and twisted history.  It seems that as we set the record straight, opponents of the market manage to pervert ten others.
We spend as much time explaining the workings of the market as we do debunking myths and cliches about it.  Statists and interventionists spout an endless stream of put-downs and one-liners that pass as thorough critiques of the market, each one requiring a time-consuming, painstaking response and appeal to reason.  We are constantly rewriting prejudiced accounts of history to match what really happened.
Almost one hundred years ago, muckraking novelist Upton Sinclair wrote a book titled The Jungle that wove a tale of greed and abuse that reverberates to this day as a powerful case against laissez faire.  Sinclair's focus of scorn was the meat packing industry.  The objective of his effort was government regulation.  The culmination of his work was the passage in 1906 of the famed Meat Inspection Act, enshrined in most history books as a sacred cow (excuse the pun) of the interventionist state.  
Were Sinclair's allegations of a corrupt industry foisting unhealthy products on an unsuspecting public really true?  And if so, should the free market stand forever indicted and convicted as a result?  A response from advocates of freedom is long overdue.  Here's a healthy start.
The Jungle was, first and foremost, a novel.  It was intended to be a polemic—a diatribe, if you will—and not a well-researched and dispassionate documentary.  Sinclair relied heavily on both his own imagination and on the hearsay of others.   He did not even pretend to have actually witnessed the horrendous conditions he ascribed to Chicago packinghouses, nor to have verified them, nor to have derived them from any official records. 
Sinclair hoped the book would ignite a powerful socialist movement on behalf of America's workers.  The public's attention was directed instead to his fewer than a dozen pages of supposed descriptions of unsanitary conditions in the meat packing plants.  "I aimed at the public's heart," he later wrote, "and by accident I hit it in the stomach."1
Though his novelized and sensational accusations prompted later congressional investigations of the industry, the investigators themselves expressed skepticism of Sinclair's integrity and credibility as a source of information.  President Theodore Roosevelt wrote of Sinclair in a letter to William Allen White in July 1906, "I have an utter contempt for him.  He is hysterical, unbalanced, and untruthful.  Three-fourths of the things he said were absolute falsehoods.  For some of the remainder there was only a basis of truth."2
Sinclair's fellow writer and philosophical intimate, Jack London, wrote this announcement of The Jungle, a promo that was approved by Sinclair himself:
Dear Comrades: . . . The book we have been waiting for these many years!  It will open countless ears that have been deaf to Socialism.  It will make thousands of converts to our cause.  It depicts what our country really is, the home of oppression and injustice, a nightmare of misery, an inferno of suffering, a human hell, a jungle of wild beasts.
And take notice and remember, comrades, this book is straight proletarian.  It is written by an intellectual proletarian, for the proletarian.  It is to be published by a proletarian publishing house.  It is to be read by the proletariat.  What Uncle Tom's Cabin did for the black slaves The Jungle has a large chance to do for the white slaves of today.3
The Jungle's fictitious characters tell of men falling into tanks in meat packing plants and being ground up with animal parts, then made into "Durham's Pure Leaf Lard."  Historian Stewart H. Holbrook writes, "The grunts, the groans, the agonized squeals of animals being butchered, the rivers of blood, the steaming masses of intestines, the various stenches . . . were displayed along with the corruption of government inspectors"4 and, of course, the callous greed of the ruthless packers.
Most Americans would be surprised to know that government meat inspection did not begin in 1906.  The inspectors Holbrook refers to as being mentioned in Sinclair's book were among hundreds employed by federal, state, and local governments for more than a decade.   Indeed, Congressman E. D. Crumpacker of Indiana noted in testimony before the House Agriculture Committee in June 1906 that not even one of those officials "ever registered any complaint or (gave) any public information with respect to the manner of the slaughtering or preparation of meat or food products."5
To Crumpacker and other contemporary skeptics, "Either the Government officials in Chicago (were) woefully derelict in their duty, or the situation over there (had been) outrageously over-stated to the country."6  If the packing plants were as bad as alleged in The Jungle, surely the government inspectors who never said so must be judged as guilty of neglect as the packers were of abuse.
Some two million visitors came to tour the stockyards and packinghouses of Chicago every year.  Thousands of people worked in both.  Why is it that it took a novel written by an anti-capitalist ideologue who spent but a few weeks there to unveil the real conditions to the American public?
All of the big Chicago packers combined accounted for less than 50 percent of the meat products produced in the United States; few if any charges were ever made against the sanitary conditions of the packinghouses of other cities.  If the Chicago packers were guilty of anything like the terribly unsanitary conditions suggested by Sinclair, wouldn't they be foolishly exposing themselves to devastating losses of market share? 
Historians with an ideological axe to grind against the market usually ignore an authoritative 1906 report of the Department of Agriculture's Bureau of Animal Husbandry.  Its investigators provided a point-by-point refutation of the worst of Sinclair's allegations, some of which they labeled as "willful and deliberate misrepresentations of fact,"  "atrocious exaggeration," and "not at all characteristic."7
Instead, some of these same historians dwell on the Neill-Reynolds Report of the same year because it at least tentatively supported Sinclair.  It turns out that neither Neill nor Reynolds had any experience in the meat packing business and spent a grand total of two and one-half weeks in the spring of 1906 investigating and preparing what turned out to be a carelessly-written report with preconceived conclusions.  Gabriel Kolko, a socialist but nonetheless an historian with a respect for facts, dismisses Sinclair as a propagandist and assails Neill and Reynolds as "two inexperienced Washington bureaucrats who freely admitted they knew nothing"8 of the meat packing process.  Their own subsequent testimony revealed that they had gone to Chicago with the intention of finding fault with industry practices so as to get a new inspection law passed.9
As popular myth would have it, there were no government inspectors before Congress acted in response to The Jungle and the greedy meat packers fought federal inspection all the way.  The truth is that not only did government inspection exist, but meat packers themselves supported it and were in the forefront of the effort to extend it! 
When the sensational accusations of The Jungle became worldwide news, foreign purchases of American meat were cut in half and the meatpackers looked for new regulations to give their markets a calming sense of security.  The only congressional hearings on what ultimately became the Meat Inspection Act of 1906 were held by Congressman James Wadsworth's Agriculture Committee between June 6 and 11.  A careful reading of the deliberations of the Wadsworth committee and the subsequent floor debate leads inexorably to one conclusion: Knowing that a new law would allay public fears fanned by The Jungle, bring smaller competitors under regulation, and put a newly-laundered government stamp of approval on their products, the major meat packers strongly endorsed the proposed act and only quibbled over who should pay for it.
In the end, Americans got a new federal meat inspection law. The big packers got the taxpayers to pick up the entire $3 million price tag for its implementation as well as new regulations on their smaller competitors, and another myth entered the annals of anti-market dogma. 
To his credit, Upton Sinclair actually opposed the law because he saw it for what it really was—a boon for the big meat packers.10  Far from a crusading and objective truth-seeker, Sinclair was a fool and a sucker who ended up being used by the very industry he hated.
Myths die hard.  What you've just read is not at all "politically correct."  But defending the market from historical attack begins with explaining what really happened.  Those who persist in the shallow claim that The Jungle stands as a compelling indictment of the market should clean up their act because upon inspection, there seems to be an unpleasant odor hovering over it.
This essay originally appeared in the November 1994 issue of "The Freeman," the journal of the Foundation for Economic Education, based in Irvington, New York ( In his research for the article, he was assisted by Dr. Timothy Nash of Northwood University and Justin Marshall of the Mackinac Center for Public Policy staff.

1 Gabriel Kolko, The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916 (Chicago: Quadrangle Books, 1967), p. 103.
2 Roosevelt to William Allen White, July 31, 1906, Elting E. Morison and John M. Blum, editors, The Letters of Theodore Roosevelt, 8 vols. (Cambridge: Harvard University Press, 1951-54), vol. 5, p. 340.
3 Mark Sullivan, Our Times: The United States, 1900-1925; vol. 2: America Finding Herself (New York: Charles Scribner's Sons, 1927), p. 473.
4 Stewart H. Holbrook, The Age of the Moguls (Garden City, N.Y.: Doubleday & Company, Inc., 1953), pp. 110-111.
5 U.S. Congress, House, Committee on Agriculture, Hearings on the So-called "Beveridge Amendment" to the Agriculture Appropriation Bill, 59th Congress, 1st Session, 1906, p. 194.
6 Ibid.
7 Ibid., pp. 346-350.
8  Kolko, p. 105.
9 Hearings, p. 102.
10 Upton Sinclair, "The Condemned-Meat Industry: A Reply to Mr. J. Ogden Armour," "Everybody's Magazine," XIV, 1906, pp. 612-613.

An Exchange On The Subject

The Question of 'NothingEverDies'

If competition takes care of quality, then why do we need the Meat Inspection Act?

Or laws against monopolies? Or monopsony power?

Riddle me that, Mr. Sheeple.

The Response by 'Asderathos'

You presume a need for something merely because we have it, without questioning as to how we got it!

The meat inspection act was a response to a socialist polemic written as fiction devoid of actual sources "by an intellectual proletarian, for the proletarian. It is to be published by a proletarian publishing house. It is to be read by the proletariat" -Upton Sinclair

 Gabriel Kolko, a socialist Historian (no less), dismissed Sinclair as a propagandist and assailed inspectors Neill and Reynolds as "two inexperienced Washington bureaucrats who freely admitted they knew nothing" Their own testimony revealed that they had gone to Chicago with the intention of finding fault with industry practices so as to get a new inspection law passed.

The Meat industry was FOR the TAX PAYER FUNDED brand of approval which would cure the Damage (In Europe of the market for US Meat being cut in half) DIRECTLY CAUSED BY SINCLAIR's POLEMIC!!! that is why we HAVE the "Meat Inspection Act"; we Do Not Neeed It. This is the SAME THING That theChina Syndrom" did to Nuclear Power.
As a specific that was rather easy to explain "Monopoly Laws" are a little broader, "[Monopsony] Power" still more so
But I think the riddle is solved, go read Thomas Sowell.

Wednesday, September 22, 2010

Zero-Sum Fallacy

Zero-Sum Game Fallacy...

Def. Zero Sum Game: A situation where anyone's gain is balanced by another's loss

Syn.  Constant Sum: where the benefits and losses to all sum to the same value

Cutting a Pie, is Zero/Constant-Sum, because taking a larger piece reduces the amount of pie available for others.

In Economics, Goods and Services can be created, destroyed or poorly allocated thusly creating net gain or loss.

In Capitalism IE the Free Market, "no exchange takes place unless both parties benefit" -Milton Friedman, this in and of itself would not necessarily avoid adverse affects to third parties but "[He, the proverbial merchant, is] led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. " -Adam Smith

Non-Zero-Sum: A situation where the gains and losses are less than or more than Zero

List of Links to research for the writing of this blog... from best to worst [based on quick skimming], and then Wikipedia

Tuesday, September 21, 2010

How to Argue against Socialism Synopsis Part 3

How to Argue against Socialism and for Capitalism by Aaron Clarey Synopsis 

Part 3 Youtube Video 

IV. Capitalism is Logical Socialism is Not

Forget Empirical Evidence - Use Logic
  • Capitalism stands on its logical merits alone
  • Unless well researched and studied, will not have tons of economic data memorized
  • Most people won't believe you anyway
  • Logical Arguments also point out the stupidity of the left.
  • Stepping stone to converting leftists 
You will never convince a leftist with charts Clarey has tried, they've denied it, they won't listen to you. If you tax everbody and redistribute the wealth equally, where's the incentive to become the next Bill Gates? The left has No Empirical Data to support Socialism. They have not thought it through. Again you won't get them with the Data, they'll fall asleep and say lets go get some Chai Tea or something.

Socialism Can't Refute 5th Grade Logic
  • The stupidity and inanity of Communism
  • "If I make the same why work?"
  • "If you pay me not to work, why work?"
  • "If you bail everybody out why should I pay my mortgage?"
  • "If nobody works who wil make the food?" 
 When Clarey was in the fifth grade his social studies teacher said "What would happen in a communist country where everyone makes the same amount? or What would happen if you were paid the same amount whether you worked or not?" in the 5th grade over 25 years ago that made sense to Clarey. "I wouldn't work I'd play video games all day!" 20 years later no socialist has been able to explain this away.

Gun Control Example of Logic
  • Cannot refute "If we ban guns only criminals will have them." [Cops cannot be everywhere all the time] 
  • Cannot refute "if law abiding citizens have guns, then what's the problem?" 
Microcosmic Example.

"Think of the children!"

Hiroshima Nagasaki Atomic Bombings Example of Logic 
  • Atomic Bombing of Hiroshima and Nagasaki SAVED LIVES
  • MORE people would have died if not bombed ["Operation Downfall" was aptly named, because it would have been OURS, women & children were told to fight with sticks, this would have broken our will to fight]
  • Dresden fire-bombings caused more death than Hiroshima and Nagasaki
  • Logic Goes Over the head of the "Anti War" crowd, all the care about is the crusade. They're still all like- "No, should not have dropped them!" 
Simple Logical Foundation of Capitalism

"Allowing people to keep the VAST MAJORITY of the fruits of their labor will result in a more productive society than one where productive people are taxed to pay other people to not be productive at all."

Its that simple. "Its more complicated than that" -Nancey Pelosi, NO IT'S NOT! Fabricated Complication is where Leftists THRIVE! If you tax it you deter it. If you pay people not to work, they won't if you incentivize having children they will.

Perfect Example - US Tax Code
  • 16,845 pages of tax code (2006)   [2,500 pages of tax code (2008)]
  • Estimated $125-$140 Billion
  • 6.5 billion hours (another $125 Billion) 
  • Sales tax or flat tax (Russia) 
Politicians bribe the Masses into Voting for them [FLAT/FAIR TAX NOW]

All You HAve To  Do Is THINK!!!
  • I think therefor I'm dangerous
  • Economics is  NOT that complicated 
  • Since capitalism is REALITY it therefor Must be logical  
Just Printing More Money Will Cause Hyper Inflation

V. Thinking Vs. Feeling Vs. Knowing

Most Leftists "Feel" They Don't "Know"
  • Socialism is an emotionally based ideology
  • Has no basis in reality
  • "Feels good" Intentions are what matters
  • Room for error is enormous 
  • Room for being taken advantage of is cataclysmic 
 They want to do good by they're too lazy to think about HOW to do good. A LOT of money has been spent on Africa (1.2-1.5 T$) has it improved? NO, its a HOLE. CHINA IS INVESTING because of the resources and they're doing more good!.

We have to make it known what will work. Leftists Recycle and Drive a Prius and that's about it, they don't actually find out what policies do good.

The Saint Republicans

From St. Olaf and St. Thomas; they were arrogant but could not argue for Capitalism, but because they liked money.

How to Argue against Socialism Synopsis Part 1

How to Argue against Socialism Synopsis Part 2

How to Argue against Socialism Synopsis Part 3 (You Are Here)

How to Argue against Socialism Synopsis Part 4, 5, and 6 

How to Argue against Socialism Synopsis Part 4-6

How to Argue against Socialism and for Capitalism by Aaron Clarey Synopsis

Part 4 Youtube Video

Can't Afford to "Feel." You Must KNOW
  • Must know why you are a capitalist
  • Must know the empirical data that supports it
  • Must know the morality and track reciords of capitalism
  • No room for hypocrisy of the "Ditzy, Gold-digger, trophy wife Saint Republican."
  • [Know Nothing Republicans "You're a Great American Sean Hannity"] Will Cause more damage if uninformed
Pro-Freedom/Capitalist Tactics
  • Founded in one thing - TRUTH
  • CANNOT lose an argument if you argue truth [but a productive argument at least informs/enlightens] 
  • Must KNOW empirical evidence
  • Must KNOW philosophy and morality
  • Must KNOW the data, statistics and info 
You Must Know 2 More Things

1. Where to get this data and QUICKLY (You probably only have 5 minutes to convince someone, 2 hours in the library is Way too long)
2. Know thy enemy

Leftist Psychology
  • Where the majority of problems lie
  • Arguments based in emotion, not reality
  • Typically WANT to do good, but too lazy to find out HOW To
  • Some just WANT to SAY they do good and have no itention of ever doing so
  • Above all else, a complete disregard for INTELLECTUAL HONESTY 
Two Scenarios

1. An intellectually honest leftist. They exist.They are misinformed or fundamentally operate from a different premise than you do (albeit an erroneous premise). But they are rational, but above all, respectful. You can have an intelligent conversation with these people. You will not be yelling.

2. An intellectually DISHONEST leftist. Resulting in a logical, rational person arguing wiht an emotional feeling person - water and oil. No progress is made in any debate or discussion. Your points fall on deaf ears. No, real, mature adult conversation can be had. There is JUST ONE MINOR PROBLEM


Understand Leftist Psychology
Socialism is a Religion
  • Religion is a BELIEF
  • Facts do not get in their way 
  • No proof, no evidence, just doctrine
  • Reality bends to religion, NOT the other way around
The Leftist's Religion Hypocrisy
  • No problem mocking Christianity
  • But they believe in a religion just as unprovable - socialism
  • Global Warming IS THE ULTIMATE HYPORISY - subbing one religion for another
  • Catholics - Good Acts
  • Eviro-nazi's - "Going Green"
Arguing Against Fundamentalists
  • Impossible to argue or debate
  • Facts, figures and data don't matter UNLESS it supports the cause
  • Willing to BEND reality to fit religion, not the other way around
  • Definition of psychotic
Socialism, Inc.
  • Leftists are FINANCIALLY VESTED in socialism 
  • Philosophy, sociology, women's studies, WORTHLESS MAJORS ARE EMPLOYED BY SOCIALISM/GOVERNMENT
  • Do not understand parasite/Host relationship between Socialists/Capitalists
  • "How dare the host not want to host us!"
Bike Walk Ambassadors... OMG NO No no..

Part 5 of Youtube Video

- (mostly video of leftists sounding like idiots)

  • Brainwashed from the beginning (global warming children)
  • Watch Amerian Idol or Listen to Jason Lewis?
  • Intellectual Laziness is Key
  • Want to do good, but unwilling to expend the energy to research and think it through
  • Childishly idealistic and simple 
Capitalism Spoils the Masses
  • "Capitalism Affords them the LUXARY of believing in socialism
  • If living under socialism, they wouldn't be supporting it
  • Have no reason to become educated
  • Everything is taken care of
  • Negative Net Present Value for Leftists as humans - parents/college/government
The Ultimate Irony - The Socialists are always Spoiled Trustafarians

They are veritably Psychotic

Leftists ARE LITERALLYin the psychological sense DELUSIONAL

Delusional: In Psychiatry; a fixed false belief that is resistant to reason of confrontation with actual fact: a paranoid delusion.

"Liberalism is a mental disorder" -Dr. Michael Savage
Part 6 Youtube Video (Tree huggers crying over dead trees)
Delusional Cult

II. Common Tactics of the Left

Change the Topic
  • Universal Guarantee this will happen 
  • I have never finished a debate with a liberal 
  • Once losing a point they WILL change the topic 
  • To PREVENT you from ever making a point 
  • Avoid them having to admit they haven't thought more than 2 steps ahead 

One Person Reflects the Entire Ideology [Collective Condemnation]
  • Rush was addicted to Oxycoton
  • Sanford had an affair
  • John Edwards cheated on his cancer ridden wife
  • Inane- Avoids IDEOLOGY and focuses on irrelevant individual behaviors

 Blame the Boogy Man
  • Goerge W. Bush - Katrina, Economy, War
  • Greenspan caused the housing crisis
  • Exposes leftist LACK of belief in the individual and how we're all "Controlled" by other people.
  • ALSO - Shows how INTELLECTUALLY SIMPLE THEY ARE - Pie Chart of Blame
Anecdotes Used for ALL instances
  • Will use ONE example and apply it to 
  • 6 Billion People 
  • 300 Million Americans 
  • USe instance as LAW 
  • Point out the inanity of making the exception the rule

 "I Just Feel"
  • Universal
  • $14 TRILLION Economy
  • Wealth of Nations
  • OEP
  • 6.2 Billion People
  • Point out their idiocy
Changing Reality
  • GDP is NOT a good measure of Progress
  • Genuine Progress Indicator
  • Change what is "desired" or "sought after"
  • Criminalize wealth
  • One Question - why do they always want more money then?

How to Argue against Socialism Synopsis Part 1

How to Argue against Socialism Synopsis Part 2

How to Argue against Socialism Synopsis Part 3

How to Argue against Socialism Synopsis Part 4, 5, and 6 (You Are Here)

How to Argue against Socialism Synopsis Part 2

How to Argue against Socialism and Defend Capitalism by Aaron Clarey

Part 2 Youtube Video

eg. Arguing with Leftists
  • Change Topics? Can’t pin them down?
  • “Oh yeah, Bush is Hitler?”
  • Conspiracy theories? 
  • I just “feel”
  • Name calling – racist, sexist, fascist 
  • Arguing with people WHO DON’T LIVE IN REALITY 
  • Norwegian Philosophy Doctorate
You can show leftists the charts and the data and they’ll dismiss it even though it’s right there in black and white. They don’t live in reality. Clarey went for a 7 mile walk with a Norwegian Philosophy Doctorate, and by the time they got back he’d painted them in such a corner that they said “Well I don’t really believe in reality, I believe it’s the perception, my perception is reality”. YOU DON’T WANT THAT PERSON IN GOVERNMENT! That’s what you’re arguing with.

  • Have no fear but confidence 
  • ARGUE THE TRUTH – “If you only argue the truth, you will never lose an argument.”
  • Treat capitalism like a science 
  • Must know the EMPIRICAL EVIDENCE to prove capitalism - ECONOMICS
When it comes to Capitalism you are arguing one thing, and one thing only, THE TRUTH And not in a Religious way, but in data and statistics.  If you always argue the truth you will always be right. Why would you argue anything but the truth? We’re not little children anymore and gee lets have free health care for everyone and puppies and unicorns.

III. Empirical Evidence of the Superiority of Capitalism
No, Not ALL the evidence

We have 5% of the population, we account for one fifth of the world GDP;
That is 5 times its proportionate weight in economic production.


Skyrocketing Increase in standards of living.
This dramatic skyrocketing increase in standards of living was incentivized by what? Care? Compassion? NO, they could make oodles of money stick it in their ears and jump off of cliffs into water.
This comes from a Report In 1986, The Key thing to look at is GDP Per Capita (yer standard measure of  livings)… the USA = 100, they just index it to 100. Roughly Soviet standards of living were one third of that of the USA.  GDP is production, CPA is consumption, which is considerably less, about a quarter, primarily because the Soviet Union produced a lot of military wares and exported it. It’s really hard to eat a MIG 25 FOXBAT they’re kinda crunchy kinda bad on the teeth.



Communism was ushered out under Dang Chow Pang in 1978
(Clarey Questions this data but the same data source/methodology of measures shows twice the growth under “Capitalism”)


You want to compare similar regions and people to one another. It is unfair to compare Norway to South Africa; too many cultural and climate differences; however the Cayman Islands and Bermuda are very similar to Cuba, they are also “Tax Havens” they have not corporate or income tax but they absolutely dwarf the Socialist Utopia known as Cuba. Similar climate Much higher standard of living the key difference is they implemented capitalism to a much more extreme extent than the United states has while Cuba is a totalitarian Dictatorship.

Ireland once the armpit of Europe with roughly 65% the standard of living of the average European country, Until they cut their social spending and lowered their taxes. Over time GDP per capita has skyrocketed to Almost 140% the European Average. Achieved by lowering corporate taxes, lower than any other country in Eorope so headquarters for Companies flocked to Ireland NOT FRANCE.  

Similar Culture, similar area, Same Country. Hong Kong from 1962-1978 - 8.8% real [annual] GDP growth, China 7.1%, same Communist era.
The 50s and late 40s of China were horrible [much worse] but wanting to compare apples to apples Clarey went with the 62-78 data set because the Hong Kong records only went back to '62.

Focus on the Pink because that is just before reunification.

The BEST Example of two extremely different economic systems [but Apples vs Apples]

Larger Point 
  • Not even debatable
  • Capitalism has proven itself time and time again
  • Should not even be having a discussion

How to Argue against Socialism Synopsis Part 1

How to Argue against Socialism Synopsis Part 2 (You Are Here)

How to Argue against Socialism Synopsis Part 3

How to Argue against Socialism Synopsis Part 4, 5, and 6 

Monday, September 20, 2010

How to Argue against Socialism Synopsis Part 1

How to Argue against Socialism and Defend Capitalism by Aaron Clarey

Part 1 - Youtube Video

Purpose of this Presentation
  • To stop the wave of socialism currently sweeping the US (This is not hyperbole)
  • To educate the ignorant and uninformed more importantly educate those conservatives, libertarians, and other freedom loving folk to effectively defend and argue for capitalism
  • To reinstitute the principles that made the US great and prosperous
  1. The Philosophy of Capitalism
  2. Argumentative Tatics
  3. Statistics/Empirical Evidence
  4. Researching Resources
This is a Primer, it won’t solve all arguments, but it will solve most.


1 Merits of the Capitalist Ideology

                Capitalism is Moral and Noble
  • Not a “Shameful” ideology
  • Responsible for practically all advancement in humanity
  • Single most important factor in increasing standards of living
  • Has eliminated poverty more than anything else in history
  • Has done so FOR THE MASSES
Understand, Usually most of us have a shame about being Capitalists there is a stigma attached to being Capitalists but when Capitalism is implemented, poverty is wiped out or at least severely lessened, and  standards of living raised for the masses. If you familiarize yourself with the history of Capitalism you will find it is moral/noble, it just happens to be mutually beneficial for both entrepreneurs and regular workers.

                Capitalism is Freedom
  • Made it possible for individuals to amass wealth rather than steal 
  • Unshackles men from slavery and provides true freedom
  • Advances in technology that has imp0roved standards of living
  • Unleashes innovation
  • Unleashes the true productive potentioal of the masses – North Korean streets vs. US Rush Hour
Aaron Clarey is a “Libertarian” and is “Pro in those categories” of social issues like “Abortion” and [so called] “Gay Rights” but the larger point is that those are quite irrelevant if you are a slave to the government. Economic Freedom is the Primary and Key Freedom by which all other freedoms are guaranteed. Without which the masses are impoverished. Property Rights; Capitalism, frees up men to keep the vast majority of the product of their labor. In the past labor was attained by conquest/theft. Free Men work harder (because they're in control of their own destiny) for themselves and Innovation is Unleashed; the increase in production benefits Government. 

St. Paul highway 94; We willingly tolerate Rush Hour every day to improve our lives.

The North Korean Masses have not been incentivized to mobilize.

Wealth Production will come from the incentivized Mobilized force, not the hermit kingdom.


Capitalism is Moral, Noble, Just; it is arguably the greatest force for good in human history. [I’ll say it, on par with Jesus]

You Should Have PRIDE, don’t hem and haw, shout it out, I LOVE MONEY, Stick it in your ears and run around, bathe in money! But also realize it’s a force for good.

II. Capitalism as a LAW, not an Ideology

Capitalism is NOT ‘an Ideology’, It’s Reality
  • Key philosophical point that must be understood
  • Capitalism is a LAW like GRAVITY
  • You cannot argue AGAINST IT
  • It Just “is.”
Socialism is an Ideal, Capitalism is Real.

eg – Policy 
  • Governments, institutions and people that implement policies or make decision BASED IN REALITY will be MORE EFFECTIVE AND SUCCESSFUL
  • Jumping of a cliff and expecting to fly
  • Corporate taxes 
  • Oppressing people economically and expecting production 
  • Closer to reality, the closer to CAPITALISM the better and more effective your policies and your society
  • No surprise the most successful countries are those with capitalist economic system
Let people keep the vast majority of their wealth and they will produce more and take care of themselves. If you say well, Flowers and Unicorns Obama and Free Chocolates for everyone, oh gee I hope people work even though they are taxed fifty percent; it’s not going to happen.

The Solution to the Recession RIGHT NOW is Eliminate Corporate Taxes FOREVER. A Flood of international and national investment capital would ensue but that’s not based in ‘idealism’.

In Venezuela Hugo Chavez keeps jacking up the percentage of oil revenue he takes so No oil company is going to set up shop any time soon.

No company dares set foot in Cuba, except abu dabi but if you look at some of the middle eastern investments, they made in the US Banking investments in 2006-2007 they may not know exactly what they’re doing.

eg. Worthless Degrees
  • People ignora starting salaries
  • Major in “fluff” 
  • But just because they graduate they “BELIEVE” they are entitled to a job 
  • Rude awakening for philosophy or journalism majors
The Vast Majority of people who major in worthless degrees, Sociology, Philosophy, Women’s Studies, Anthropology, are of a leftist stripe. When they can’t find jobs; that is reality hitting their idealism.

How to Argue against Socialism Synopsis Part 1 (You Are Here)

How to Argue against Socialism Synopsis Part 2

How to Argue against Socialism Synopsis Part 3

How to Argue against Socialism Synopsis Part 4, 5, and 6 

Sunday, September 19, 2010

Money, Greed, and God: Synopsis of Speech

[This is Not a Transcript, but a close Synopsis]

“Defenders of the Free Market must often contend with accusations from Christians that Capitalism is immoral despite its track record of delivering the goods.”  

Jay W. Richards author of “Money Greed and God: Why Capitalism Is The Solution And Not The Problem” says there should be no contradiction between Christianity and Capitalism.

Synopsis of the Author’s speech at the Cato Institute 2009

Most of what a person needs to be an educated citizen: to be able to evaluate public policy in economics doesn't require a degree or even a course in Macro Economics; only that you think through various issues carefully. 
Almost every intellectual mistake that Christians and others make can be boiled down into one of eight myths [from his book]. Only 3 of which will be covered here [briefly].
The Piety Myth
and the Law of Unintended Consequences
Intentions for a policy bare no relation to the effects of the policy.
City Councils’ intentions for Rent Control policy may be for the poor to have affordable housing, but the effect is a shortage of affordable housing as experience has shown.

The piety myth is especially a problem for religious people, theists believe intentions are morally relevant, particularly so with one’s status before God; who wants us to do the right thing for the right reasons. ‘We are commanded to love the Lord our God with our hearts, our souls, and our minds’. So we focus on the heart part, the problem is that while the heart is spiritually relevant, it is, in most cases, economically irrelevant.  
Henry Hazlitt, in his book “Economics in One Lesson” he defined ‘the art of economics this way:

 “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences for that policy not merely for one group but for all groups.” –Henry Hazlitt

Notice he is not talking about the ‘science’ of economics but the ‘art’; which is like an intellectual disposition that becomes intuitive so that any policy elicits the reaction “and then what will happen?” regardless of the policy or intentions of its advocates, and you trace those consequences. We can usually do this logically and in economic policies empirically with experience.

One example is the financial crisis, which is rather complicated but at its foundation was the subprime mortgage crisis; a series of good intentions [affordable housing] that influenced policy over a period of decades, one of which was encouraging private banks to lower their eligibility standards for mortgages, and similarly in ‘govt. sponsored enterprises the semi public/private banks Fannie and Freddy which changed the incentives over the years so that loan officers [who would have acted differently in a free market] made decisions leading to huge numbers of defaults on loans. Yet the Financial Crisis has been blamed on the Free Market. 

A Private loan officer who’s bank would be stuck with the loan, unable to offload it, who would be held accountable would act responsibly and hold to fiscally reasonable criteria.

But an Officer with Social and Legal pressure for lax criteria and lending to particular people with bad credit ratings, with no evidence of that they’ll be able to repay the loans; an officer with the opportunity for the loans to be offloaded & divided/securitized, their incentives are entirely different.  
This is an example of Market Incentives being subverted for ‘good intentions.

Despite good intentions, in policy we should focus on effects rather than intentions. Good intentions can lead to bad policy, bad intentions can lead to good policy. It simply doesn't matter. 
The Greed Myth
The Greed Myth is especially problematic because both critics and champions of Capitalism believe it. The Greed Myth is believe the essence of Capitalism is Greed or that Capitalism is based on Greed. Some of the most appreciated Free Marketeers like John Stossel  and Walter Williams have made this sort of argument. It has been immortalized by Oliver Stone in a 1987 movie as “Gordon Gekko” who gives a speech that goes

“Greed… is good… Greed is right. Greed works. Greed… cuts through and captures the essence of the evolutionary spirit. Greed, in all its forms… has marked the upward surge of mankind.”

[Although this is a caricature of 'the capitalist'] Some of the most prominent defenders of Capitalism of the 20th century have made something like the same argument: for instance, Ayn Rand, who’s books still sell 300,000 copies a year.

“Capitalism and altruism are incompatible… they are philosophical opposites; they cannot coexist in the same man or in the same society.”Ayn Rand

Selfishness/Greed has always been considered in the Judeo/Christian Tradition one of the 7 deadly sins. To identify it as/with a virtue is at the very least rhetorical non-starter for the religious.
George Guilder and Michael Novak make the Moral defense for Capitalism which informed Richards’ perspective.

But is Capitalism based in greed? The sort of Founder of Modern Capitalism Adam Smith made what sounds like this sort of argument. Most people don’t read “The Wealth of Nations” but rather a few select excerpts. [its available online as a free ebook]

Adam Smith
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

Adam Smith
“In spite of their natural selfishness and rapacity, [business people] are led by an invisible hand… and thus without intending it, without knowing it, advance the interest of the society…”

Superficially this would seem the same thing. Even well known economists and scholars would say it is the same argument as Ayn Rand’s. It wasn’t.

Smith was a Moral Philosopher, not an Economist. His previous book was “The Theory of Moral Sentiments in which he developed ideas in which human beings in social settings, in families and communities develop natural sympathies for each other; moreover Smith had criticized the Dutchman Bernard Mandeville author of “The Fable of The Bees” where the ‘English’ Bees grumble about moral Problems, but when they become virtuous everything falls apart. Bernard Mandeville argued that “Greed Is Good”. Smith described Mandeville’s system as “Wholly Pernicious”

Also according to Smith ‘Self Interest is not Selfishness’. Self Interest is what we know and what we are responsible for IE one’s narrow purview of things. But that’s not selfishness, every time you look both ways before you cross the road, take your vitamins, breathe etc,  that is ‘self interest’. The basis of the “Golden Rule”: Do unto others as you would have them do unto you is based in a properly ordered kind of ‘self love’. So, self interest in itself is not morally problematic. ‘The genius of the market is that people can pursue their narrow self interests as an end and nevertheless because of the incentives of the market a socially beneficially order can be created. That is entirely different from saying that 'Greed Is Good'.  Notice Previously, Smith said “In spite of their natural selfishness and rapacity“ in other words a Free Market Capitalism will channel not only legitimate self interest but also pernicious greed and other vices into socially beneficial outcomes. Saying that “Capitalism Channels Greed” is not the same as saying either that “Greed is Good” or that “Capitalism is Based on Greed”.

Full Length Video of the Speech