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U.S. Sanctions: Economic Sabotage That Is Deadly, Illegal, and Ineffective

Yours is deep and too much for me to respond to, so just a few points:

You appear to believe that money is wealth, directly. It’s not: directly it’s bits of paper or digits on accounts somewhere. Money is only a claim on available real wealth just as title deeds to a house are not wealth, the house is the wealth, and the pink slip to a car is not wealth, but merely a claim on the car, the real wealth.

You seem to think that the real value, or what could be called utility value, of an item wealth is what it sells for (like Amazon being worth $1T). Market value is determined by supply and demand, and may be way less than its utility value. A car that can enable you to add $60K a year to your income, you may be able to buy for $20k, way less than its value to you. The discovery of penicillin (that opened the door to antibiotics) netted the discovery a pittance compared to what Michael Jackson made on his album, Thriller, but it’s clear which was and is worth more in real wealth. Inflation does not add real wealth, just prices.

Shares in Amazon are bits of paper or digits on accounts. They represent a claim primarily on the income of Amazon, money. If Amazon disappeared tomorrow, the net loss to the US, would be loss of price savings on merchandise- the rest is simply redistribution. Barrels of oil are hard assets, real assets with value, not claims on assets like money or shares. If a wealth of oil disappeared tomorrow, that would be a real net loss, not redistribution.

Gold did the Spanish lots of good. If Venezuela production ends, it does not make produced shale oil one wit more valuable, of greater utility to the user - It just makes the price higher (good for the seller, bad for the buyer) because of the drop in supply.

I certainly don’t think people are worthless: a highly educated or trained workforce can produce lots of real wealth.

Price represents one man’s revenue and another man’s cost. As share prices go up and down, there is not increase or decrease in wealth by that fact alone, only redistribution. The seller gets a better price and wins, while the buyer pays more and loses: Real wealth has not changed – is redistribution.

You say the true strength of The United States is its political organization of decentralization, because to get something done everyone has to agree. This was clearly not the founders’ intent. The constitution provides, subject to Bill of Rights protection, for majority rule. If we could get back to that, where the rich man does not have a greater political voice on policy than the poor man, where the rich do not have a veto on policy, this country could change directions and go forward towards utopia. Everyone having to agree is the path to dystonia.

Going to go backwards. The Founding Fathers as followers of Locke would have disagreed with your ideas of utopia. The rich man has more power in a centralized system where it is easier to for a bare majority to assert its will. After all the poor man gets a veto also. Vetos are good. Your model is the French Republic model based on the romanticism of Rousseau. We know how well that went. The Founders absolutely built a system that encouraged compromise, something where if the majority wants to get something done, they get their 60% while the minority gets their 40%. That is why we have a senate where Rhode Island has as much power as California. Everything is skewed so it is hard to get things done. Utopia is an impossibility which is why Marxism and all of the ism’s fail.

So lets talk about wealth as you are mixing wealth with currency. Wealth is a completely subjective human attribute. So is value. I hate the water. So a boat has no value to me. Yet if I stumble upon a boat I know I can sell it to someone who loves the water. Oil, boats, drugs, copywrites, patents, a one hour doctors consultation are just things that society comes to a consensus on. Of course there are disagreements. In the stock market people buy & sell as they have different opinions. I might try to sell my house. 99 people say my asking price is too high, but one may say I like it. Dallas Cowboy fans are concerned on how much money should be spent on Dak Prescot when his rookie contract expires. Is 34M a year too much which is the projection? This is all stuff. Its all disparate. In modern societies we measure what we value in currency.

The modern world has replaced asset backed currencies with floating currencies that you correctly point out are just digital bits in a computer or numbers on paper. Without currency, wealth becomes difficult to exchange because the currency is the common medium. We used to say with fixed currencies that it had to be backed. Now modern economists believe that a floating currency is superior. There is a minority that still believe in a gold standard. Again, I go back to the Accent of Money where it is asserted that the currency of a nation is related to the confidence of the world in the people of that country. The world has the most confidence in the dollar. So the dollar can buy a lot more tangible goods and services then lets say the Bolivar. That is why Russian and Chinese oligarchs want to convert their wealth into dollars.

I will leave it to the historians to elaborate on why we have currency. Without currency I have to do the extra work of finding someone who needs what I produce. Barter is incredibly inefficient. If we all accept dollars and have confidence in what a dollar will purchase, then we have something far more efficient. That is why societies found things for currency be it gold, rice, or shells.

Now if you look at Spain they existed in an age where coin was just minted out of precious metals. It was not even a paper backed by an asset. So more and more gold and silver pours into Spain and ultimately Europe. Just like when you print too much currency, the value of the asset goes down and it buys less. Its no different for any commodity. If there is too much oil, gold, or pork bellies, the value of the unit goes down.

It’s true that the Founders rigged the system to protect the elite (themselves) against a system they proclaimed as justified because it was democratic - the bullshit goes way back. The claim that individual voters in Rhode Island should have more say in who is to be President than individuals in California is bullshit and undemocratic, regardless who is making the claim, even if it’s the Pope.

The falsity of your claim that a rich man has more power where is it is easier for a bare majority to assert its will is self-evident. The extent to which a rich man has more power in a centralized system depends on the extent to system is rigged, largely the extent to which money plays a part in the electoral system. Clearly here in the U.S. the system is rigged for the rich man and that is one of, if not our largest, problem. https://www.youtube.com/watch?v=PJy8vTu66tE

You say I was mixing wealth with currency when I went to great pains to do the opposite: money is a measure of one’s claim on real wealth: Wealth is not a human attribute nor completely subjective. Objectively speaking each of the Koch brothers is wealthier than I am, measured the way it is measured in this society. Disagreement as to what price to put on different items has little to do with it.

I have a problem with neoliberalism, the economic system to channel all money to the top (under the fraud that it will trickle down), and with the other fraudulent propaganda needed to maintain it (like the US tries for almost 20 years to bring down the government of Venezuela, and when Venezuela finally stumbles, it blames the dreaded socialism. The propaganda ignores blatant evidence of successful socialism while it proclaims “socialism never works”. Propaganda can almost make a person blind, particularly with Fox -like “group think”. Of course, socialism for the rich is not included in the critique.

Given that we have protections for the minority in the Bill of Right, I am absolutely opposed to the idea that either the rich or the poor should be able to veto the will of the majority: That is one of our biggest problems today. Action on climate change, wars, money in politics, health care. (and the list goes on) could all be dealt with better and for the general good, if we did not have the veto power of the so-called elites protecting their milking of all that we have…

I have several disagreements in no particular order. I have no problem with socialism. I think free market capitalism works better as an economic model and has proven itself. However, each society makes its own choices. Where I do have issue with socialism is when per Hayek it circumvents democratic process to achieve its goals. This is exactly what happened in Venezuela. You make the statement that the United States has been trying to take down Chavez and successors for 20 years where you really have no evidence. Neither Bush or Obama would have minded. Yet they really have not taken any serious action at crimping Venezuela until Trump enacted sanctions in 2018 preventing financial institutions to roll over debt. Like I said before if the United States could roll Chile in 73 on a shoebox budget, Venezuela would have been easy. The bigger reality is US interference is politically untenable. Venezuela’s issues are all self induced because there were no controls on a tyrant in charge.

So lets talk about majority absolute rule. I will absolutely disagree with you. The Founding Fathers codified the “Tyranny of the Majority” That is why there are three branches of governance with the President unable to make law himself. Due to expansion of powers of the executive branch, the president has a lot more power then the founding fathers intended. They wanted a weak president. It is the reason Washington refused to run for office a third time nor be a king. Protecting the minority meant that Trump could not completely undo Obamacare or make abortion a federal crime. The decentralization of power and the tyranny of the minority saves you. I would say that alone makes it self evident on why we should have decentralization of power. One persons saint is another’s tyrant. A real altruist that spoke for all people should get the support of all.

So lets talk about who that benefits more. In Venezuela a socialist country with weak checks and balances has a disparity of wealth many times greater then the United States? It happens for exactly that reason. It is easier for those in power to assert their will. So a country that was built on the premise of wealth egalitarianism has wealth concentrated in a few political insiders and generals. The Chavez inner circle is worth billions with all of it being acquired after Chavez became the leader and installed his family circle in positions to soak the country. Yet the neo-radicals insist there is no fraud and graft in Venezuela. If only the neo-evils of the western world would not interfere.

Again socialism is fine to various extents if there is the rule of law. Much of Europe has a more socialist economic outlook. I will argue that the free market capitalism of the United States or Germany is superior, but is less of a concern in this correspondence as the real issue to me is the rule of law based on the logic of Locke instead of the romance of Rousseau.

The reason why I commented so much on the concept of wealth verses currency is it seemed to imply you thought that Amazon as a company was like currency. Amazon is just as fungible as a car, your clothes, food, or any other material item. Stock is a deed stating your portion of ownership in the company. The long term expectation for owning a stock is usually the expectation of an eventual dividend. So being a partial owner gives you access to the eventual profits of a company if there is more profit then can be invested.

So my point on Amazon is something that the world views as valuable as 20 billion barrels of pumped oil is a product of the combination of a market economy regulated by uncorrupt law. Again, this is the power of the market economy to create value where before there was none. In Venezuela anyone who makes something has it expropriated by the state in the name of socialism so that a crony can soak for their own ends. The National Oil Company is not run by an oil executive, but a general. The general makes sure that an appropriate stream of revenue is redirected to enrich himself and the cadre of supporters who guarantee his position. Ditto with the gold mining industry. That is what happens when you let tyrants even well meaning ones have complete control per Hayek

I think we can agree on opposition to socialism when it circumvents democratic process to achieve its goals. However, an unfettered free market devoid of social programs does not work: Some sort of amalgam is required.

The “Tyranny of the Majority” has nothing to do with the President being able to legislate: That was never on the cards. It would make him more of a King than the King of England. What the tyranny of the majority is about is the majority of people through their elected representatives being tyrannical to minorities (which would include the wealthy). If by decentralization of power you mean the President alone can’t legislate, then I absolutely agree with you that we should have decentralization. We don’t need a stink’n monarch.

I am opposed also to leaders soaking the country, socialist or free market. Social programs do not ipso facto make a country more vulnerable to corruption - you can find that all over.

United States and Germany have social programs and to the degree that they do are socialist countries.

I don’t think Amazon is like currency but shares in Amazon are, and shares can be readily converted into currency. Amazon did not create real wealth as much as focus it. Amazon has something like 50% of the ecommerce market. It it had a smaller share of the market, it’s competitors would have a correspondingly larger share and the us would be just as wealthy (except we may be paying more or waiting longer for internet purchases, or lack some other uniquely Amazon provided benefit). Amazon didn’t create real wealth out of nothing, but it did take for itself commerce that would otherwise have gone elsewhere (redistribution). Hard assets like oil (to the extent that it can be captured economically) are real wealth, not in existence by reason of redistribution.

We’re not that so far apart: You seem to think that socialism per se leads to corruption: I don’t. Look at the corruption now in the Trump administration: it’s a virtual kleptocracy. Hopefully, you think that unfettered capitalism (unfettered by any social program) does not work, - even the Trump administration does not admit to believing in abolishing everything not serving the wealthy (on reflection, there’s no such thing as unfettered free market. There’s the Fed manipulating interest rates, boosting the stock market, controlling the money supply … etc). You probably want a smaller share of the national income going to social programs than I do, and perhaps want lower taxes on the wealthy than I do.

You are correct as only the most ardent libertarian wants no social programs. As a nation gets wealthier it is able to afford more for those who do without. There will always be levels of how much.

Socialism by itself does not make a country more vulnerable to corruption as I view socialism at a economic model. However the concentration of power does make a society more vulnerable to political corruption because as I mentioned before there are fewer checks and balances. That is why I prefer the tyranny of the minority.

I do not understand your Amazon argument. Anything can be readily converted to currency. I can throw any of my possessions on Ebay and convert to dollars just as if I were stock.

Thanks for the discussion.

I’ll end on one point. We don’t need any tyranny. The tyranny of the minority (the 1%) that we have now, with concentrated wealth rigging the system, needs to be modified to serve the majority that hopefully won’t be tyrannical, but it is, the Bill of Rights and the Courts are there to protect – the Bill of Rights can’t protect against the power of concentrated money rigging the system. “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both”, Justice Brandeis.

We have had the tyranny of the minority throughout history, and the birth of the US was to change that. For a thousand years, the King and his aristocratic cabal, with the connivance of the merchant and professional classes took virtually all the wealth: Under serfdom, serfs, in return for the use of a little piece of land for subsistence, had to work 4 days a week for their Lords for literally nothing – it’s how the Lords could afford castles, munificence, and an army of personal attendants, while there were serfs that literally “could not afford a pot to piss it”( for tanning).

Why would you want a tyrannical cabal of billionaires taking ever more of the wealth, to rule over us? Haven’t they taken too much already? Is the problem here really too much power in the hands of the masses, and too little in the hands of the Koch brothers? Do you really want to move on to a new serfdom? What was the American Revolution about?

Shares are like money in that they are bits of paper and digits on an account. They are not the wealth.

Have a good one.

I’ll just end with a couple corrections. Great Britain was long beyond Serfdom and had a democracy. The issue of the colonies was no taxation without representation.

The 2nd issue is that free market proponents would say that most billionaires are makers not takers. Did the founders of Microsoft, Apple, Google, Amazon, and Cisco warp the laws to bring in easy money? No, they made something. You may argue that Amazon is not a conventional bricks and mortar company. But why is Michael Jordan almost a billionaire when all he can do is drop a ball in a hoop? Value is just what society decides it is. If someone has a YouTube channel and wants to incorporate and sell shares, more power to them. If I can turn something into money, it is valuable to someone. Just because it is a piece of paper saying I have rights to something does not change the fact it has the same value as gold or oil, both which could be worthless in the future. If we move to an EV world, oil will be worthless other than a lubricant. If we every have space mining, the asteroid belt is filled with an infinite amount of gold and platinum. Gold would then be as worthless as the paper used to state the value of Amazon that you have issues with.

I weakened, and just had to give a final response.

Serfdom over a thousand years tells us something about the nature of man, and we need to heed the lesson. Perhaps it could give you a clue to the real reasons for opposition to raising the minimum wage to a living wage for the hapless people at the bottom, and to the fight for such things as entrenching gross inequity in the system of taxation, and the rigging of the political system to the benefit of the 1%.

“No taxation without representation” was a symptom not the disease. The Declaration of Independence spells it out. It was a fight for independence, and as Lincoln put it, a government of the people, by the people, and for the people. We could not fairly describe the government we have now as one of by and for the people.

You’re confusing price, wealth, and value, jumbling them all up as though they were the same thing. For example, I never said shares were not valuable. The most valuable physical thing we have is air, followed by water, but measuring their value by your free market ideology, they are virtually worthless – take a clue from that. I had tried to make the distinctions clear. I’m reminded of Oscar Wilde’s quip about the man who knows the price of everything and the value of nothing.

The founders of the companies mentioned are the rare exceptions, not the rule. I would guess that the vast majority of billionaires take from the economy way, way more than they personally contribute to it. But that’s a big subject on this own. But one clue: a share trader who makes big money contributes nothing to the economic pie, is a pure taker (or redistributor), and the gargantuan incomes made on Wall Street are taking from the economic pie ( or redistributing) in some instances completely, contributing nothing to the economic pie we divide up some way. I guess the billionaires all like to think that they are worth it to us as they suck up the wealth of the country, as though they personally made and contributed that much and more and are net givers.

It has been my experience that the limiting factor for most businesses is not supply (from the so-called makers), but demand, the ability to sell what you can easily get from those “makers”. The idea that the “takers” are the poorer people at the bottom is the reverse of reality. The “takers” for the most part are those doing all the taking. If this doesn’t demonstrate the power of spin and propaganda, nothing will.

You keep adding in new topics so compelled to respond. Serfdom has nothing to do with a living wage or not. Serfdom was a law binding people to the land compelling them to work. It was a step up from slavery barely. The question of a minimum wage is a completely different discussion. The problem with a minimum wage that is too high is there are certain jobs that are worth a certain value and no more. During the Internet bubble fast food franchises in my area were unable to adequately staff shifts. The maximum they seemed to be able to pay and still break even was about 12 dollars an hour. They chose to close the store for that shift then go higher. The 2nd problem is that automation becomes a cheaper solution. My first two jobs bottle returns and handing out computer stations have since been automated. Those jobs paid 3.35 an hour and 5.50 an hour. They would have been automated even sooner if they had to pay 15 dollars or its equivalent when I joined the labor force. My personal opinion is a minimum wage job is a first wrung job where you are proving you can be punctual and follow directions. In both cases it was on me to expand my work skills. In the former my manager saw I worked hard and I was able to hire directly into grocery. In the later I worked on my UNIX skills on my own time and got hired into a Network Operations Center that I eventually parlayed into an Engineering career. Now I am treated as a director for compensation even though I have no direct reports. That might not have happened if that bottom wrung did not exist. In my opinion if you are still in a minimum wage job and did not expand your skills that is on the individual. I know a guy who started as a dishwasher and now owns several franchises. Ok, not everyone is that motivated. But it is on the individual to empower themselves to make themselves for valuable.

I do not understand your complaint about the government is not for the people. Are you saying its not a democracy? When did it stop being one. There are always blocks and business will be one of them. People who have an agenda and money will always have influence. You hate the Koch brothers? Guess what conservatives hate George Soros. Conservatives complain main line journalism is biased and has an agenda. Yet Donald Trump ran on a populist program that he was “going to drain the swamp” So who is right. The progressives or the populist conservatives. Both complain government is rigged against them. Me, I think both sides are populist and use the same old tool of finding an enemy to blame for their problems.

I’m not confusing anything regarding currency and value. I defined the variables explicitly. Currency is a medium of exchange. Wealth is how much my possessions converted to currency plus my currency is worth. Value is how much a thing or service is worth in currency. Everything else is philosophy. A society can measure environmental quality. That may have an indirect cost in that certain things may be more expensive. For example the Chinese who are that much closer to living with their farm animals will tolerate a lower environmental standard then us. 50 years from now they may have the same standards. But other things have no equivalency like friendship, freedom, or love. My definitions were always purely economical since we were having a discussion on economics and not philosophy. So I don’t understand your complaint.

You seem to have an issue with speculative traders and bankers. I am sure that a few have made some money. If they did it fair and square without insider trading they should reap their rewards. Do you hate someone who wins the superlotto just because they are suddenly wealthy? The market economy is ultimately an efficiency vehicle. If someone in an open market like Buffett can appraise something that has higher value then the rest of the market says, its his genius. Do you hate Bill Belecheck because he can appraise football talent better then anyone else? Please name these hoards of billionaires who are just takers? For every one I will name a dozen who made something out of nothing. Plus many gave their entire wealth away, something a government can never do. Turner, Buffet, and Gates are just following in the footsteps of Mellon, Vanderbuilt, and Rockefeller.

MINIMUM WAGE
The reference to serfdom speaks to the nature of man. Historically, those in power have no concern with the well being of their perceived underlings and have rationalized serfdom, slavery, lack of health care, wars, wages for their underlings below that which they can live on, neoliberalism, poverty, discrimination, and the list goes on.

“There are certain jobs that are worth so much and no more”: Well then, don’t have jobs that are not worth a human’s time to do.

“Automation becomes a cheaper solution”. That has been argued since the beginning of the industrial revolution, and has always proven fallacious, at least so far. If people had been guided by this reasoning, we’d still have the horse and buggy.

“Minimum wage job is first wrung. If you are still in a minimum wage job and did not expand your skills that is on the individual”. This argument is fallacious in the aggregate. There is no way all of the minimum wage jobs could be filled by those on the first wrung, so lots are going to have to stay, so your attitude is, let’s leave them in their misery

There is no good excuse for the savagery of having millions working struggling to live on wages below a living wage that is easily affordable in the richest nation on earth; If you really want to know the truth, and be guided by empirical data rather than faulty reasoning, look at other countries that are able to do it. “That is on them” reveals the callousness of your position, an indifference to the suffering of your fellow man – the point of my reference to serfdom.

DEMOCRACY
“I do not understand your complaint about the government is not for the people”

"The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy”

https://bulletin.represent.us/american-government-isnt-democracy/

TERMINOLOGY
The market determines price, not what value it has for you or me or anyone else. The first is objective, the later, subjective. Currency is a medium of exchange, and a measure of wealth, not wealth itself. Even though it’s not wealth itself, it can be exchanged for wealth because the recipient knows he can do the same thing. In itself, it’s just paper and digits.

SPECULATIVE TRADERS AND BANKERS
Those speculators who simply redistribute and make big money get to share in the economic pie created by others, to which they have contributed a net nothing. They are eating someone else’s pie. Wall Street provides some essential services, but in terms of zero-sum activities, it is a huge drain.

One more note on the MINIMUM WAGE

Since many cities and states have raised wages lately, we have decent evidence about what an increase similar to a $15 federal minimum wage would look like. You can now compare areas where wages increased to areas where they didn’t, and examine the results. A paper just released by two UC Berkeley economists looked at this existing evidence, finding no “adverse effects on employment, weekly hours or annual weeks worked,” and no meaningful employment loss among any subgroup segmented by race or gender. The main impact was a decline in household and child poverty.

You did not include a link. But I found the paper. The problem is there is no consensus as other studies point otherwise. I believe the CBO study is most accurate in that for every person it benefits another loses their job. I will give a case study in Ann Arbor Michigan. There is a high level deli called Zingermans. They have good enough quality and brand they can sell a lunch for up to 25 dollars. The owner is very high minimum wage and likes to brag about it. Problem is all of the positions are taken by students of the University of Michigan. Despite being a college town, Ann Arbor has some projects. None of those project kids has a chance to work at Zingermans. So they take the jobs on Stadium. If the minimum wage was raised to 15 dollars those fast food joints would go out of business as much of the cliental is poor.

A 15 dollar minimum wage can work in a place like SEATAC because the Washington crowd is wealthy and will tolerate. I chose not to eat as I was not going to spend 15 bucks on fast food. The problem with an excessive high minimum wage is there are certain jobs that can no longer exist.

Ethically I still hold a minimum wage job was never intended to be a living wage. It is a starter job or a supplementary job. If the value of the work does not equal the pay, it will go away. My guess is those Berkley economists are cherry picking their data since their conclusion contradicts efficient market theory. A high minimum wage just becomes a user tax on positions that just can’t go away until automation occurs. This only accelerates the process until there are no minimum wage jobs because it is cheaper to automate. Walk into any grocery store and half the cashiers are replaced by kiosks.

If everybody in town now earning less in every line of work had a pay rise to $15 an hour, the town would be less poor, there would be more demand in convenience stores made better able to pay $15 an hour. Money circulates if it doesn’t fall into the hands of concentrated wealth, like the Wal-Mart family for example. Avoid the fallacy of composition, by thinking that if one store had to increase its wages it could not compete, if follows that if all stores had to increase its wages, no one could compete.

No one is advocating an excessively high minimum wage.

Your guess about Berkeley economists is a cheap shot. My guess is they are people of integrity and competence that would not want their professional standing trashed, churning out thrash like a Republican Think Tank.

Are you not aware that hundreds of millions of jobs have been lost to automation? Yes, hundreds of millions, way more than are currently employed.

The efficient market ideology is largely bullish. Many business start, devour capital, and fold within a few years - not so efficient. I was in Macy’s the other day: it was largely deserted, no way near operating at its most efficient capacity - if it was, it would look more lie the DMV with lots of people mailing around the goods on offer and checking out with purchases I see largely empty sores all the time. If the market was efficient Google revenues would fall through the floor as businesses did not need to allocate so much of their revenue to advertising, trying to pull business from competitors, a zero sum expense. Predatory capitalism abounds. The Treasury has been sacked. Banks need to be bailed out. The climate is being ravaged. Costs are externalized and dumped on others. The list goes on. Don’t believe everything you are told