Archive for the ‘Economy’ Category


Monday, February 4th, 2013

“Hope springs eternal in the human breast; Man never Is, but always To be blest: The soul, uneasy and confin’d from home, Rests and expatiates in a life to come.” – Alexander Pope (1688–1744)

Economically, the world is a mess. Politicians and bureaucrats continue to make the same, age-old mistakes, hoping that, by trying to muddle through . . . somehow, some way . . . the problems will resolve themselves. They won’t.

In recent years, a field of economic inquiry has arisen as a supposed alternative to more traditional approaches. This new field is called “behavioral economics”. Its adherents hope to explain economic behavior more scientifically.

“Which science?” you might ask.

The answer isn’t entirely clear. One might hope that it would be strictly biobehavioral science, but it isn’t.

Off to a fine start they are; can’t get the name right, even. The name itself is a redundancy. Why? Because economics, by its very nature, is behavioral . . . just in a financial context.

Let’s say that a farmer grows a bushel of corn in excess of his own personal needs. He exchanges that bushel for something else, be it a bushel of wheat or a futures-option. That exchange constitutes a behavior. As such, it is governed by natural laws described within biobehavioral science. Economics without biobehavioral science is like pharmacy without chemical science.

Most traditional economists, nevertheless, have pinned their hopes on mathematics not biobehavioral science. Admittedly, all those equations do look impressive. Unfortunately, manipulating a bunch of numbers based upon invalid assumptions leads only to invalid conclusions. The point? That which should be underlying economics is biobehavioral science not mathematics.

Whereas biobehavioral science should underlie economics, it still cannot confer upon economics the quality of a true and complete science. Why? Because a true and complete science allows for prediction of that which it studies and, with few exceptions such as astronomy, allows for control. Economics allows for neither. Why? Because economists cannot begin to identify all the independent variables determining the dependent variable . . . financial behavior.

Economics aside, biobehavioral science can confer scientific benefits upon an economy, especially a capitalistic one. It can transform democratic capitalism into democratically-based Scientific Capitalism.

Democratic? Whoa! Isn’t biobehavioral science too complex for the average citizen?

No. Fortunately, the basic principles are relatively few and rather easily understood . . . should context favor the average citizen wishing to understand them (

Unfortunately, the current American context doesn’t favor average citizens acquainting themselves with biobehavioral science despite the consequence of doing so being a direct and immediate improvement in their own personal effectiveness and societal efficiency. This unfavorable context is the direct consequence of our governmentally-controlled educational system in which ideology terrorizes knowledge.

So, the average citizen likely will continue to allow his behavior to fall under the control of mystical and superstitious ideologies promoted by charismatic charlatans preaching short-term rewards while ignoring long-term punishments. “Heaven now . . . Hell later!” It’s a Faustian bargain destined to end in pain and suffering amidst widespread disaster if not total catastrophe, hope for the opposite notwithstanding.

Even though biobehavioral science offers a better way, that better way awaits a change in context, probably of a sort that most of us will find exceedingly unpleasant. When that change of context occurs, hopefully it will present average citizens the opportunity to allow science to become their guide . . . science, which has brought humanity so much good . . . not mysticism and superstition, which have brought humanity so much evil. Doesn’t hope spring eternal in the human breast?


Monday, January 14th, 2013

“The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”The Constitution of the United States of America (Amendment IV)

To paraphrase Oscar Wilde, Americans and, increasingly, Western Europeans are coming to know the price of everything (via the Internet) but not the value of what’s left of our most precious possession, freedom. Appealing to an increasingly mind-numbed mob, Hollywood-based producers of cinema portray corporations and businessmen as enemies in the form of murderers and thieves. Really? How many people have been killed intentionally by Exxon . . . or General Electric . . . or AT&T? How many people have been killed intentionally by their own governments . . . think Hitler, Stalin, and Mao. Who’s the real enemy? Where lies the real threat?

In his novel, 1984(1), George Orwell vividly described a dystopia; however, he couldn’t foresee the means of enslavement to government. It would be the electronic computer, firstly completed at the end of World War Two(2). With 18,000 vacuum-tubes, it was a slow forerunner of the fast machines of today, machines getting faster almost by the day. Using these increasingly faster machines, governmental tracking of Americans’ financial behaviors is making a mockery of the Fourth Amendment. Forget guns. The computer has become the most powerful, single tool for tyranny.

Using credit-cards allows such computer-based tracking. Using cash obstructs it.

In 1935, the U.S. Treasury issued monetary notes in denominations of five hundred and one thousand dollars; in 2013, equaling ten thousand and twenty thousand. Now, the largest denomination is one hundred dollars. The Bank of England issues notes as large as only fifty pounds (eighty dollars). Why so little?

The politicians’ excuse is to preclude “money laundering”. Typical of tyrants, they purport to be protecting the people by punishing them. Well, who protects the people from their supposed protectors? Shouldn’t we, the citizenry, be demanding a return to denominations that reflect economic reality not economic persecution?

Meanwhile, companies issuing credit-cards create an aura of something for nothing. ’Taint true! Scientifically, they place users on a schedule of phony positive reinforcement known as “continuous reinforcement (crf)”. Every time the user charges a purchase, he receives points to be used as a medium of exchange . . . except, in truth, there are response-costs. One, the lesser, is in the form of higher prices to reimburse the issuer for the points. Another, the greater, is loss of the freedom to be secure from unreasonable searches and seizures. (

Like rats pressing a lever for food in the biobehavioral laboratory, when the time for payment comes, the typical consumer mindlessly whips out his credit-card instead of cash. An electronic database then records the transaction. Via queries, the transaction becomes available to other vendors and, worst of all, to governmental snoops(3).

Yes, the computer can be a benevolent tool for human good. It also can be a malevolent tool for human evil.

As we rush towards a so-called cashless society, we might ask ourselves, “Is tyranny ultimately the inescapable consequence of democracy in large nations, as Montesquieu(4) warned so long ago?” At present, unless required for business-related purposes, might we consider using cash instead of credit (or debit)? Is the price of credit acceptable but the cost intolerable? If so, how would you remedy the ill?


1. Orwell, G: Nineteen Eighty-Four. London: Secker and Warburg (1949).

2. McCartney, S: Eniac.  New York: Walker & Co. (1999).

3. Bamford, J: “The Black Box”. Wired. April 2012, page 078.

4. de Montesquieu (1689-1755). French lawyer, philosopher, and politician.


Monday, October 8th, 2012


“The rich ruleth over the poor, And the borrower is servant to the lender.” -Proverbs 22:7

Politicians lie. Well, most politicians lie much of the time.

Example? In 1932, the Democrat Franklin Delano Roosevelt lied when he campaigned on a plank of a balanced federal budget, accusing the hapless President Hoover of leading America down the road to socialism.

Another example? In 1994, the Republican Newt Gingrich preached a balanced federal budget. Subsequently in 2000, after winning the White House and the entire Congress, the Republicans created the biggest deficits in American history.

There’s a scientific explanation for why politicians lie. Consider the following: B = f(x) under c. Behavior is a function of its consequences under a given set of conditions (context). In the context of politics, the consequence of telling the truth often is defeat at the polls. Of lying? Victory. As it is said, a political gaffe is defined as a politician’s stating an obvious truth when he shouldn’t.

Why should the consequence of truth be defeat and of lying be victory? Answer . . . most people will choose to hear a pleasant lie over an unpleasant truth, even knowing that the lie is a lie.

As the character played by John Ireland advised the politician played by Broderick Crawford in the 1949-film, All the King’s Men, just tell ‘em you’re gonna soak the rich. Mr. Obama claims it’s to protect the “middle class”. Well, it’s a lie. Politicians use that lie to soak all the productive . . . rich and not-so-rich. Why? That’s where the money is.

The political concept is to steal the money from the productive to buy the votes of the unproductive. It’s a compelling reason to limit the reach of government and to disenfranchise those who take and to empower those who make. Who is John Galt?*

Soaking the rich isn’t sufficient. Simply put, the rich aren’t sufficiently rich to feed the insatiable governmental beast. Accordingly, the governmental tax-bandits since FDR have been following the alleged observation of the late bank-bandit, Willie Sutton.

“Willie, why do you rob banks?”

“Because that’s where the money is.”

To rob the middle-class, Democrats and Republicans, while trading power back and forth, have used two, main weapons of legalized theft . . . inflation and budgetary deficits. Inflation robs the living, mainly savers. Deficits robs the yet-to-be born, the defenseless.

To use inflation, the politicos have their accomplices . . . the bureaucrats at The Federal Reserve Bank who debase the currency by printing worthless banknotes or their derivatives. For deficits, the politicos have their accomplices at The Department of the Treasury who issue debt while the politicos raise its imaginary ceiling.

In this regard, given the twisted logic of politicians, a decrease in the rate of inflation is called deflation. It’s similar to the gambler who feels he gained by losing less than last time.

Given the size and resources of The USA, for two generations, the markets had allowed American politicians and bureaucrats to continue their stealing spree with abandon. When questioned, initially the politicos had claimed debt wasn’t a problem because we Americans owed the money to us ourselves. Then, after 1980, The USA went from the largest creditor-nation in the world to the largest debtor-nation, increasingly owing money to friendly foreigners.

“Still no problem,” the politicos had reassured us mistakenly.

Now, as Speaker of House, John Boehner, recently stated succinctly, “We’re broke!” Today, we Americans owe much of the debt to unfriendly adversaries if not to outright enemies . . . think China.

Despite being broke, The United States of America, as a nation, coast on their credit, at least for the moment. Continuing credit allows economists at “The Fed” (primarily Benjamin Shalom Bernanke as did his predecessor, Alan Greenspan) to keep in play fatally flawed policies based upon their faulty analyses, in turn, based upon their idiosyncratic ideologies instead of allowing the free-market to determine policy congruent with Scientific Capitalism.

As misguided as their policies have been, fortunately for The USA, the policies of most other major players, such as the Eurozone, have been even more misguided. Recall that The USA defeated the erstwhile Soviet Union not because we Americans were so cunning and skilled but because the Russians were so inept and incompetent.

Will the same paradigm hold true in our current context? Given the incredibly inept and incompetent behavior of the European politicians and bureaucrats, it just might, at least for a while.

Example? Greece.

*Part Two of the cinematic version of Ayn Rand’s Atlas Shrugged is being released this month.


“To relieve the present exigency is always the object which principally interests those immediately concerned in the administration of public affairs. The future liberation of public revenue they leave to the care of posterity.”
– Adam Smith, The Wealth of Nations (1776)

Well, it’s now 2012, and the Greek crisis created by . . . the Greeks . . . continues. Greek politicians had blamed everyone but the perpetrators . . . themselves; much of the Greek populace still is blaming others, mainly the Germans. Yet, it was the Greek politicians who promoted the borrowing of money in order to promote consumptive not productive behaviors.

Now, as the Greeks renege on their latest promise, they beg their creditors in a threatening tone, “Just one more extension of credit . . . ‘to save yourselves’.” So much for Greeks bearing promises, in particular. So much for the credibility of verbal behavior, in general.

The short-term consequence of their borrowing behavior, the Greek politicians hoped, would be getting themselves re-elected. The long-term consequence, they feared, would be economic disaster . . .  worse, losing power; both have come to pass.

“For every complex and difficult problem, there is a simple solution – and it is wrong.”
-H. L. Mencken

Could it have been different? Yes, if culturally the Greeks were Germans or, perhaps, even Irish. It’s easy to offer simple solutions to complex problems . . . politicians do so routinely. Two examples of promising to resolve debt painlessly are the following: 1) by creating more debt or 2) by reneging on prior debt. Selling more U.S. Treasury Bonds represents the first; “monetizing” the debt represents the second. The typical and inescapable consequences of both are the scenario unfolding in Europe as financial contagion spreads . . . Greece, Cyprus, Spain, Italy, then . . . .?

Had the European politicians adhered to their own now-broken “rules”, the euro might have become the preëminent reserve-currency instead of being placed on life-support administered by the Deutsche Bundesbank and the Schweizerische Nationalbank. One critical variable governing the euro becoming a reserve-currency was the behavior of The USA.

In their desperate, insatiable hunger for funds and penchant for political pandering, American governments at every level became untrustworthy. At the federal-based  level, the government even violated the sanctity of contracts. One example? The “bailout” of General Motors.

At the state-based level, a recent example was the mugging of the British bank, Standard Chartered, by the State of New York. The real crime was not alleged “money laundering” by the bank but extortion by the State in the amount of $345,000,000. This particular example of governmental mugging may be one that stands out, but it hardly stands alone . . . think Barclays and HSBC as well as, even more recently, Royal Bank of Scotland and J. P. Morgan.

So, despite the egregious antics of American governments, given the current trend, the euro, nevertheless, appears doomed as a reserve-currency . . . if not as a currency, altogether. Still, the U.S. dollar also appears increasingly unstable as the creditworthiness of the federal government drowns in a rising sea of currency . . . think QE-Infinity. What’s an investor to do?


“Lenin is said to have declared that the best way to destroy the Capitalistic System was to debauch the currency . . . Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million can diagnose.” – John Maynard Keynes

Is there an alternative to the debauched U.S. dollar? The Japanese yen? Doubtful . . . Japan has an increasingly aged and enfeebled population and too much governmental debt.

The Swiss franc? Not viable . . . too few.

The Russian rouble? Despite Russian optimism to promote the rouble as a reserve-currency, Russian financial structure remains too primitive, and Russian governmental foundation too shaky.

Ah, the Chinese renminbi? Question . . . to what extent will international investors trust a currency issued by a despotic, oppressive government Hell-bent on dominating East Asia? Answer . . . if the Chinese play their economic and political cards skillfully, a lot.

Why? Because America is acting more recklessly than our foremost adversary. How? As former Chairman of the Federal Reserve Bank, Paul Volker, has noted, the FRB is exceeding its legal and constitutional mandates to manage the economy, such management being the task of elected congressional representatives not presidentially appointed bureaucrats. Given its economic policies, there may be no alternative but China and its proxies.

Isn’t there a better way for us Americans to pursue commerce than that embodied in the variations on the same, hollow, economic theme currently mouthed by Democrats and Republicans . . . government creating jobs, jobs, jobs by creating debt, debt, debt?  Fortunately, there is.

What? Employment of scientific methodology through biobehavioral science to analyze and resolve the situations-in-question . . . not just economic but governmental, legal, educational, and health-related. We have the means. Ah, but do we have the will? If so, do we have the leadership to harness those means and that will?

Leadership? Who? Obama? Romney?

Unfortunately, we’re not likely to find competent leadership among the cast of Fellini-like characters in the current political charade enacted by the Democrats and Republicans. America needs a new political party . . . a party based upon the U.S. Constitution, American Tradition, and Science . . . a party that will tell the unpleasant as well as pleasant truths instead of only pleasant lies wrapped in weak excuses.

Uh oh, remember that most people will choose to hear a pleasant lie over an unpleasant truth, even knowing that the lie is a lie. Do Americans really want to hear the truth? Judging by the rhetoric in the current presidential campaign, one would answer, “No.” Presented a scientifically-based and scientifically-driven analysis and plan, however, mightn’t the answer be “Yes” (

Let’s give Americans a chance to answer for themselves. To paraphrase the late Senator Barry Goldwater, let’s give Americans a real choice not a weak echo.

Assuming the will to choose the right course by bringing our societal behavior under the control of long-term instead of short-term consequences, one might ask, “How much time do we Americans have before an economic Armageddon?” For the answer, don’t ask the Democrats. Don’t ask the Republicans. Don’t ask the Europeans. All are the servants.

Ask the Chinese. Ask the Japanese. They are the masters.


Monday, August 20th, 2012


Austerity: enforced or extreme economy.
Webster’s Collegiate Dictionary

Given his recent pronouncements, the Italian bureaucrat, Mario Draghi, would have the rest of us believe that living within one’s productive means and repaying one’s self-inflicted debts constitutes austerity. His would be a strange set of values were they not political for public consumption.

Whatever their real but hidden, personal values may be, the politicians of the EU and the bureaucrats of the ECB merely are dragging their feet to postpone the day of reckoning, an inescapable consequence of political and bureaucratic profligacy. Their notion of “unlimited” funding of debtors by the ECB is a fantasy. Nothing in our universe is unlimited, let alone in human affairs.

The violating of one’s word, in this case by the bureaucrats of the ECB violating their own charter in order to postpone the consequences of profligacy, constitutes a basic breach of trust. Based upon past and current behaviors, the words of Bureaucrat Draghi, like the words of most European and American politicians, are not to be trusted.

There is a better way, even for the Europeans … a way based upon science not politics, ideology, or personal charisma. Unfotunately, the Europeans following that way seems little more likely than we Americans doing so. Ultimately, however, reality always wins.


“The rich ruleth over the poor, And the borrower is servant to the lender.” Proverbs 22:7

Most politicians lie. Most always have. Perhaps, most always will.

In 1932, Democratic presidential candidate, Franklin Delano Roosevelt, ran on the plank of a balanced federal budget, accusing his opponent, President Herbert Clark Hoover, of leading America down the road to socialism. By 1939, the consequence of FDR’s lie was debt without gain.

In 1994, then-Congressman “Newt” Leroy Gingrich and his band of Republicans preached smaller government with a balanced budget. Including “off-budget items”, they never balanced the federal budget, and, by 2008, the Republicans had expanded government and created the worst debt the country ever would see until Barack Hussein Obama took office.

Yes, most politicians lie. Lying is a behavior. It can be described by the principles of biobehavioral science.

Context and consequences. Most politicians lie because, in the political context, the consequences of their lying are positive reinforcement; whereas, the consequences of their telling the truth are punishments or extinction (See “Pages/Define Your Terms”).

Scientifically, it has been documented that people will choose hearing pleasant lies, even knowing that the lies are lies, over listening to unpleasant truths. In politics, a reporter played by John Ireland advised a political candidate played by Broderick Crawford in the 1949-film, All the King’s Men, to tell the voters just that he’d soak the rich. No, Mr. Obama didn’t invent that sales-pitch.

Well, despite their verbal behavior to the contrary, American politicians haven’t been soaking the rich. Why? For several reasons, one of which is that collectively the rich don’t have enough money to make an appreciable difference. Accordingly, American politicians have been following the advice of fellow-robber, Willie Sutton, to go where the money is . . . in this case, the middle-class.

To rob the middle-class, Democrats and Republicans have followed two main routes, inflation and debt . . . and, for decades they got away with it, buying the voters’ votes with the voters’ own money and that of their children and grandchildren. How could they accomplish it? One, the size and resources of the USA. Two, the aftermath of World War II, which left the USA with no real economic competition.

At first, we Americans owed the debt to ourselves while remaining the largest creditor-nation in the world. After 1980, however, we increasingly owed the debt to friendly foreigners while becoming the largest debtor-nation in the world. Now, we owe much of the debt to foreign adversaries, if not outright enemies, while the federal government borrows money from itself . . . a practice similar to sending love-letters to yourself. Why such extraordinary and desperate behavior? As Congressman John Andrew Boehner recently put it, “We’re broke!”

Despite being broke, America continues to coast along, at least for the moment. For international investors, the USA remain the best of a bad lot.* This context allows bureaucrats such as Chairman of the Federal Reserve, Benjamin Shalom Bernanke, to continue to pursue fatally flawed policies based upon faulty analyses.

In this race to the bottom, we Americans may be self-defeating, but, fortunately for us, others are even more so. During the so-called Cold War, America beat the erstwhile Soviet Union not because we were so smart but because they were so dumb. Will the same paradigm hold true in our current challenge? Given the incredibly inept actions of the politicians in the European Union, it just might. So, let’s look at how inept the Europeans really are.

*When the United States of America were founded, federalism demanded the name take the plural not the singular, and it continues to do so.


Humpty Dumpty sat on a wall./Humpty Dumpty had a great fall./All the king’s horses and all the king’s men/Couldn’t put Humpty together again.

To understand the ineptness of the politicians and bureaucrats leading the European Union (EU) and especially those leading the EuroZone (EZ), we might analyze from the biobehavioral orientation the fall in the fortunes of this supposedly high-minded but certainly awkward and disingenuous experiment. In the latter regard, many, if not most, analysts agree that the weak link in the experiment was and is Greece.

The Greek crisis has become the model of economic default . . . not only for European debtors but others, as well; e.g., Belize. In Europe, as Greece has gone, so Spain is going. As Spain goes, will Italy go? We can begin our analysis by describing the situation-in-question topographically; i.e., the situation as it appears to the eye of the observer. We do so from the following four points of view: context, antecedents, behaviors, and consequences.

Topographical Analysis

Context: In 1999, the European Central Bank (ECB), for the first time in history, issued a currency without a unified, supporting government. Corresponding members made pledges to adhere to specified, fiscal practices concerning debt . . . verbal behavior. No agency within the EU, however, held the power to set contingencies for adherence or violation . . . contingent consequences; accordingly, the specified, fiscal practices represented requests not rules; a rule being a statement of contingent consequences.

The Law of Effect: B = f(x) . . .  behavior is a function of its consequences. With no punishment for violations, France and Germany become the first to violate their respective pledges; subsequently, others, most notably Greece imitated that model.

With respect to Greece, historically, the Greek government lied to gain entrance into the EU then lied to remain within it. The politicians and bureaucrats in the EU knew the Greeks were lying, an example of a fundamental human weakness . . . preference for pleasant lies over unpleasant truths.

Greek debts grew to exceed vastly the prescribed guidelines such that, in 2012, the government finally defaulted. Meanwhile, the first to violate the agreement, the Germans, continue to demand fiscal virtue from the Greeks and other debtor-nations.

Antecedent: Before the default, the international financial community demanded increasingly high interest rates on Greek bonds after the Greek government publically admitted an increasing budgetary deficit of 12.7%.

Behavior: The Greek government defaulted . . . an instrumental behavior, promising to decrease its deficits over a period of years . . . a verbal behavior. The promise, in turn, functioned as an antecedent for protesting Greeks, 25% of whom is employed by government, to riot in the streets.

Consequence: Other governments comprising the EU agreed to reward Greece for its deceit and profligacy by accepting Greek promises and, together with the IMF, rescued the Greek economy. The Greeks were told on 02 May 2010 that they indeed would receive a “bailout” contrary to the charter of the EU in exchange for promises free from contingencies. Once the new, ECB-approved agreement was in place, displacing the private bondholders in favor of governmental ones, the Greek politicians immediately began to re-negotiate and continue doing so.

Functional Analysis and Resolution

We can continue our analysis by describing the situation-in-question functionally; i.e., in terms of the controlling variables. We do so from the following four points of view: problem, goals, plans, and measurement.

Problem: An excess of spending behavior by politicians comprising the Greek government.

Goal: To have the Greek government abide by that to which it initially agreed when it gained entry into the EU.

Plan: To employ specific and objective, contingent consequences. Without the IMF diluting the authority of the EU, the EU/ECB and Greece could have agreed to a reasonable and appropriate reduction of the budgetary deficit beginning immediately and completed within three years with specific benchmarks to be met every six months.

The Greek government then would have posted a series of performance-bonds representing each benchmark. The bonds would have been posted through an independent, private, bonding agency. Such an agency could have been established by a consortium of private banks; insurance companies; or other, private entities but not governmental ones. In this way, the matter would have left in the context of the free market not a politically-controlled one.

If unsuccessful in securing private bonding, Greece would have declared national bankruptcy by defaulting on its current debt as did Argentina a few years previously. Game over. If successful, each new bond would have been posted after Greece had retired the previous bond.

The consequences of failure by the Greek government to retire a bond would have been default by Greece and payment by the bonding agency of the deficiency directly to legitimate creditor-claimants. The bonding agency then could have filed a claim against the Greek government. Game over.

The consequence of failure to secure the next bond in the series would have been 1) default, or 2) suspension of Greece from membership in the EU until such time as the Greek government had returned to full compliance for a period of twelve months or 3) both. Game over.

Measurement: For a plan to succeed, accountability through measurement is essential. In this case, responsibility for measurement would have fallen upon the bonding agency to which the Greek government would have given full access to its financial records. In contrast to current auditing practice where the audited pays the auditor, the bonding agency would have paid the auditor. The consequence of failure to give access at any time or of failure to pass the audit would have been default. Game over.

One might quibble with the specifics of the particular plan offered, but the point is to have applied scientific methodology and the free-market to resolving the situation-in-question; otherwise, left to politicians, failure has become an apparently inescapable consequence.


Had the European politicians adhered to their own “rules”, today the euro might have replaced the U.S. dollar as the international reserve-currency. Why? Because, given our gigantic deficits and debt, many believe that American politicians and bureaucrats no longer can be trusted. The recent, “scandal” involving a British bank offers a sobering example of the basis of this concern.

The “scandal” involving the bank, Standard Chartered, broadcasts an ominous message to foreign enterprises and investors. Some believe that the real scandal is the extortion from the bank by the State of New York of $345 million . . .  with the approval of the U.S. government.

A regulator with the ironic name of Lawsky accused the bank of “laundering” financial transactions to and from Iran in contravention to a ban issued by the federal government. Governor Cuomo and Bureaucrat Lawsky seemed to believe that the ban by the federal government bestowed upon them the option to enforce their own state-based interpretation of foreign policy. The officers of Standard Chartered denied the allegations but, given the immediate and dramatic fall in the market-value of their shares, settled anyway.

Doesn’t the demand that foreign nations obey U.S. laws represent extraterritoriality? The consequence of violating this particular law involved a direct attack upon international financial transactions in U.S. dollars, all of which currently are processed through the USA. Especially to foreign interests, it would seem to constitute a breach of trust by American officials in safeguarding the sanctity of this processing.

The obverse is that had the Europeans not violated the agreements concerning fiscal and monetary policies and, thereby, undermined trust in the euro, international enterprises and investors might have opted to do business in euros through Frankfurt rather than in dollars through New York.


“ . . . ye shall know the truth, and the truth shall make you free.” – John 8:32

Given the current trend, the euro appears doomed as a reserve-currency . . . if not as a currency. Moreover, the U.S. dollar appears increasingly unstable. What’s an investor to do?

The Japanese yen? Japan has a huge economic burden of a rapidly ageing population and too much governmental debt. Besides, the territorial aggression in the South China Sea by China creates an even more problematic context.

The Swiss franc? Too few.

The Chinese yuan? China is governed by despots bent upon dominating East Asia and controlling the entire South China Sea and all the islands therein. What are the odds that international investors would trust its currency for long-term commitments?

If, nevertheless, the Chinese skillfully play their political, economic, and military cards, the answer might be . . .  a lot. Why? Because, Americans may act in a manner even more self-defeating than their adversaries; in which case, there may be nowhere else to turn but to the yuan and its proxies.

Is there an alternative for America to this international race to the bottom . . . politically, economically, and socially? Yes.

The alternative, thus far, has been passively ignored if not actively resisted . . . the employment of biobehavioral science. We Americans have The What . . . the knowledge to analyze the situation topographically. We have The How . . . the knowledge to analyze the resolution functionally. We do not have The Who . . . the leadership to reverse this downhill course and to move towards an appropriate, achievable, and desirable destination. We are unlikely to find that leadership among the Democratic and Republican establishments.

America needs a new political party based upon the U.S. Constitution, American Tradition, and Science. A political party with honest and courageous leadership. A political party that will tell the voters the truth and keep its word.

The truth? Are Americans willing to listen to unpleasant truths or content to hear pleasant lies? Do Americans have the will to specify the real problems, to target realistic goals, to design and implement appropriate plans, and to measure outcomes honestly?

The problems are ugly. The goals are challenging. The plans are demanding. The measuring is painful.

Do we have the will to do what’s necessary to avoid degradation, desperation, deprivation, and despair? Alternatively, are we so wedded to debt that the lights indeed will have to go out in New York City before the truth stands a chance?

How much time remains for us? For the answer, don’t ask the Democrats. Don’t ask the Republicans. Don’t ask the Europeans. They are the servants.

Ask the masters . . . the lenders. Ask the Japanese. Ask the Chinese.